The israeli agro-business_story_East Africa Agriculture Value Chain Investment Summit - 2012


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AgriQuality, a consultancy and Agro-projects'-integration office, located in Omer, Israel.

Shafrir Godel (CEO) offers a very deep understanding of and familiarity with the Israeli agricultural sector. In his work, he is focusing on international agro-business and rural development; Godel and his staff at AgriQuality, supports their customers throughout the developing of their own business, local or international.

Being active in the agriculture sector in the last 25 years, Shafrir has developed a wide, tight and affective business networking to be used on an everyday basis for better planning and executing of new ventures.

Under Shafrir's leadership Agriquality provides consultancy and managements services to farmers and agro-companies in Israel and in various countries, growing conditions and deferent business atmosphere.

Agriquality address economic, marketing, operational and agronomic questions and offers professional solutions and value adding to our customers
Among Shafrir's clients one can find few offices of the Israeli government, rural municipalities, farmers and agribusiness' companies in Israel, India and several European countries.
Shafrir has participate in few rural development projects in the arid south of Israel and gain a precious experience in implementing government intentions and budget for the benefits of his customers in the regions he was working in.

During the years shafrir has participate in in strategic decision and procedures taken by Agriquality's clients. He is involved with customer's dilemmas regarding deferent aspects of the value chain; starting up with an idea, planning, investment and fund raising, operational, agronomical and marketing aspects.

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The israeli agro-business_story_East Africa Agriculture Value Chain Investment Summit - 2012

  1. 1. The Israeli Agri-business story A story of entrepreneurship East Africa Agriculture Value Chain Investment Summit, Kampala Shafrir Godel December 4th , 2012
  2. 2. Introduction Personal point of view based on my experience and interviews. A collection of perspectives of different professionals in the industry Thanks to: Prof. Yiftach Ben-Asher Ben Gurion University of the Negev, Dr. Arie Regev Foreign Relations Department ,Ministry of agriculture, Mr. Haim Alush founder & CEO of Mashov Group, Mr. Hagai Ofek founder & CEO - Bar Or Economic Development, Mrs. Zohar Dvir founder and CO- GM of Shiluvim, Mr. Mishi Salomon Agribusiness consultant2
  3. 3. Our agenda for today• Shafrir Godel? Agriquality?• Israel – short introduction• Israel agriculture figures and numbers• Characterizing Israel’s agricultures success • Governmental and public involvement as Israel Developed • Water and irrigation story • Market’s story - who will buy the produce? • R&D and extension services story . • Trends of today • What’s in it for East Africa• Open discussion, questions and answers
  4. 4. Israel – generally speaking • The state of Israel was established in 1948 after WW2 following earlier UN declaration of dividing Israel into two states. • Population - 7,794,900. • Largest city: Jerusalem. • Israel borders with 4 countries: Lebanon, Syria, Jordan and Egypt. • Population composed of 76% Jews , 17% Muslims, 7% other minorities. • GDP- $243 Billion (2012 est.)4
  5. 5. 5
  6. 6. Israel – generally speaking • Israel has the largest number of Startup companies in proportion to the population, in comparison to any other country in the world. Number of startups by 2009 is 3,850 with over 70,000 employed • 450 different foreign media organizations operate in Israel. • 63% of the GNP involves international trading – one of the highest in the world. • Global financial crisis 2008 - Israel survived the crisis better than other countries in the world economy.6
  7. 7. Israel and the 2008 World Financial Crisis 2008 2009 OECD Eurozone Israel OECD Eurozone IsraelGrowth Rate 0.6% 0.5% 4% -3.5% -4% 0.7%Unemployment Rate 5.9% 7.5% 6.1% 8.2% 9.4% 7.6%Rate of Inflation 3.6% 3.3% 3.8% 0.5% 0.2% 3.9%The Current Account as a -1.6% 0.8% 0.7% -0.9% -0.6% 3.7%percentage of GDPPublic expenditure value in 41.4% 46.9% 42.7% 44.8% 50.7% 42.7%the growth ratePublic debt as a percentage 78.4% 73.2% 76.8% 90% 81.8% 79.4%of the growth rate
  8. 8. What is in common?8
  9. 9. Disk on Key • In April 1999 a patent was filed by the Israeli company “M-Systems” under the name “Disk on Key”. • IBM was the first to market the “Disk on Key” on December 2000 with a storage capacity of 8MB. • Around the world, this technology is commonly known as USB Flash Driver • Mobile, compact, easy to use, rewritable. • Replaced the floppy-disks and CD-ROMs • In 2006 M-systems was emerged with Sundisk9
  10. 10. Wastewater Treatment• Water shortage, contamination of water resources and intensive irrigation in agriculture are the main reasons for putting wastewater treatment and reuse of water high on Israel’s list of national priorities.• In 2009, 388 MCM of effluents were produced in Israel.• Nowadays, over 85% of the sewage water in Israel are destined for agriculture. Spain is next in line and recycling 20% of the water amount.
  11. 11. Drip Irrigation• Netafim, founded in 1965, pioneered the idea of drip irrigation, a process that virtually eliminates water waste in agricultural irrigation and became an innovative idea to the world.• The most economic way to use water.• Today, Netafim is a global company. It owns 13 factories located at 11 countries, over 30 Subsidiaries and representatives in about 110 countries around the world.• As a result of Netafim’s breakthrough , a few major irrigation companies joined the market: – Naan Dan merged with the Indian Jain irrigation systems in 2007 and now spread around the world in over 100 countries. – Metzerplas – Plastro Gevet – purchased by John Deere in 2007 – And others…
  12. 12. Iron Dome• The Iron Dome was developed by the Israeli company- Rafael.• It is one of kind solution• By November 2012 it has intercepted hundreds of rockets launched towards Israel.
  13. 13. Uganda- Generally speaking• Area 241,040 km2• Arable land (percentage of total area) 22.8%• Irrigated land 9,150 ha
  14. 14. Agri is our culture• During the last 50 years, the agriculture production multiplied 10 times and at the same time the use of water and the need for labor was reduced.• Using advanced technology, Israeli growers hold some productivity world records (diary farms, cotton, olives and more)• The agro industries in Israel are export-oriented and are willing to share their knowledge abroad.• Many of the Israeli-origin firms are now global companies owned by new owners.
  15. 15. National Challenges along the years 1970 until End of the Up until the the Mid 80’s 1980’s and 1970’s. beginning of onward the 80’s• Feeding the • Developing • Developing niche • ‫ניהול חוות גדולות‬ population, international markets. Losing ‫– יבול של משק‬ security and markets for main crops’ ‫אחד לבדו יכול‬ employment up treatment of markets to ‫להציף את השוק‬ until the 1970’s. output surpluses competitors part of the caused by around the global effort to inhabitants globe. locate new scattering policy energy and food and government ‫הישראלי. השקעה‬ support. ‫בשטחי גידול‬ ‫בחו"ל‬
  16. 16. Public responsibility the government story• Infrastructure and land development - When a farmer gets a new plot, he will get the water and the road to the plot’s edge• Water resources development and water distribution. In September 2012 water quota for agriculture has risen.• Implemental R&D and extension services are available to the farmer.• Marketing infrastructure was built by governmental company and the Ministry of Agriculture.
  17. 17. Israel’s agriculture - a water story• Chronic scarcity• Rainfall fluctuates and is poorly distributed• Almost all yearly rainfall within a period of 3 months.• Frequent drought spells• Moving from north to south, the precipitation drops by 2mm every Km
  18. 18. Israel’s agriculture - a water history• Non irrigated agriculture, winter crops grown in the north of Israel.• Beginning of floods irrigation, Gravitation 30’s to 50’s• Introduction of sprinklers’ pressured irrigation 50’s 60’s• Drip irrigation – Fertigation and irrigation controller mid 60’s• Customized irrigation.
  19. 19. Who is the customer?“You do not plant before you know who is thebuyer, what is the final destination of the crop and how will it get there”.
  20. 20. Out of the streets into the supermarkets’ shelf• From streets, markets and venders to European supermarket shelves.• From peasant to farmer• Innovation: new varieties new packages• Post harvest treatment• Transportation and logistic
  21. 21. What is carrot?
  22. 22. Where are we going to….
  23. 23. Key success factors• The need• Availability of land and water• Access to High End export markets that can pay for big investments in R & D and infrastructure.• Cooperativeness – Agrexco – R & D Close and open relationship along the value chain• Governmental involvement• Innovation and Excellence• Founds
  24. 24. Then and today• The cooperative structures of the agriculture in Israel has weekend• Israel do import fresh produce, not only grain. Entering the OECD supports that trend.• Israeli agricultural is moving from the center of Israel to the arid southern regions.• The size of farm unit has grown significantly.
  25. 25. The need to feed We will need a solution that is based on:• Mainly Increasing productivities of existing land and water resources, but also developing new lands for agriculture.• The world is experiencing now what Israel has been experiencing for a long time: the need to feed its population from limited waters and land resources and under home land security restrictions.• Israel has a lot to offer to the global efforts.
  26. 26. What’s in it for East Africa• Government involvement is crucial• We need Patience• Goals shifting• Flexibility and Adjustment for relevant time and “neighborhood”
  27. 27. Questions from the president lecture• What has worked and what hasn’t workedhistorically?• What is needed in order to capture a higherdegree of value added locally?• International brands vs. local producers• Should the focus be on the local market or theexport markets?
  28. 28.
  29. 29. Readings and bibliography • Senor, Dan and Soul Singer START-UP NATION, The Story of Israel’s Economic Miracle. USA 2009. • Carrison, Dan. Business Under Fire. New York: Amacom, 2005. • Preiss, Kenneth, Steven L. Goldman, and Roger N. Nagel. Cooperate to Compete: Building Agile Business Relationships. New York: VNR, 1996. • Israel Ministry of Finance- • Israel Ministry of Industry, Trade and Labor - • Central Bureau of Statistics- • Israel ministry of Foreign affairs- • The Knesset- • Bank of Israel - • Ministry of environmental protection- • Israel water authority -