PUBLIC SECTOR LINKAGES PROGRAM Cheese maker survey and analysis plan for Argentina, Brazil, Colombia and Uruguay Pablo Juliano in representation of the project team 29 August 2013
Outline Cheese cluster regions selected and survey methodology Argentina, Brazil, Colombia, Uruguay Preliminary cost study Data from cheese cluster regions needed to assess whey value addition 2 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Cheese cluster regions selected and survey methodology Argentina, Brazil, Colombia, Uruguay 3 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Methodology Decision trees Supply chain optimisation Cheese cluster identification Cheese makers classification according to whey characteristics Facility location optimiser Whey distribution optimiser Technology or product selection software WE ARE HERE Cluster classification Whey volumes produced per year Type of whey (sweet, acid, salty) Whey quality (if available) Other criteria Conventional and new whey products (process plant design and manufacturing costs) Best economic options for subclusters Business model for regional development *potential stakeholders 4 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Cheese cluster regions in Argentina 5 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Cheese cluster regions in Brazil DILEI/DIPOA/Mapa 6 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Cheese cluster regions in Colombia 7 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Cheese cluster regions in Uruguay 8 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Data from cheese cluster regions needed to assess whey value addition 9 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Methodology WE ARE HERE Cheese cluster identification Cheese makers classification according to whey characteristics Decision trees Supply chain optimisation Facility location optimiser Whey distribution optimiser Technology or product selection software Best economic options for subclusters Cluster classification Whey volumes produced per year Type of whey (sweet, acid, salty) Whey quality (if available) Other criteria Conventional and new whey products (process plant design and manufacturing costs) Business model for regional development *potential stakeholders 10 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Data to be collected from cheese makers Region definition Number of sites per cluster Cheese maker data location and size (milk volume, volume destined to cheese making) type of cheeses Number of dairy producers supplying Whey data Type (salty, sweet, nitrate added, starch) Quality (analysis ph/fat/protein/lactose/microbiology) Whey volume produced per day; categorised by cheeses produced Production seasonality Whey processes on site (costs for processing, storage, transport, disposal) Whey equipment (all equipment, options) Do they pasteurize? Costs? Do they concentrate? Costs? Refrigeration? Costs? How long do they store? Costs? Disposal method Costs for disposal (including capital costs) Costs for animal feed Transportation data Whey destination ( frequency, vehicle capacities, disposal methods, vehicle availability, percentages per destination) Sales to third parties Social data -economic motivation to provide to collection plant? 11 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Methodology WE ARE HERE Cheese cluster identification Cheese makers classification according to whey characteristics Decision trees Supply chain optimisation Facility location optimiser Whey distribution optimiser Technology or product selection software Best economic options for subclusters Cluster classification Whey volumes produced per year Type of whey (sweet, acid, salty) Whey quality (if available) Other criteria Conventional and new whey products (process plant design and manufacturing costs) Business model for regional development *potential stakeholders 12 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Cheesemaker cluster data: Number of sites per cluster Cheesemaker location and size Whey volumes produced per year Type of whey (sweet, acid) Whey quality (if available) WHEY DECISION MAKING MODEL Cheese making Cheese whey Sweet 6<pH<7 Acid ph<5 (a) Direct disposal (b) Animal feed (storage refr) (c) Preprocessing Pasteurization + Storage (refrigeration) + Concentration? (d) Preprocessing Storage (refrigeration) Cost requirements (a): Environmental costs for whey disposal Transportation costs Liquid whey Whey concentrate Market price inputs (b): Market price of animal products from whey Transportation cost, Optimum transportation routes Transportation cost, Optimum transportation routes Capital/operating cost inputs(b): Animal feed preservation cost Costs of animal products from whey Transportation costs Liquid whey Whey concentrate Market price inputs (c): Whey based ingredients Whey soups, Bars WPC, WPI Biogas Bioethanol Food grade lactose Ricotta cheese manuf costs Location and scale (vol., distances) of processing site according to cheesemaker cluster region Transport/location optimisation 13 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013 Animal products Direct use Protein separation (ultrafiltration/ diafiltration) Biogas, Bioethanol Capital/operating cost inputs (c): Whey storage costs Pasteurisation costs Refrigeration costs Distribution infrastructure costs Fuel costs per country Transportation costs for Liquid whey Whey concentrate Cost of building processing site Concentration costs Drying costs Whey soups costs Whey bar costs WPC, WPI production costs Ricotta cheese manuf. costs Biogas, Bioethanol production costs Lactose Drying Concentration Ricotta cheese Whey Protein Lactose Minerals Whey based ingredients / other whey products WPC, WPI Biogas, Bioethanol Crystallization Food grade lactose
Basic information needed for the decision making model Teams to work according to whey use How will options (including cost data) be integrated into the decision making tool? Team 1 Team 2 Team 3 Team 4 Whole of supply chain approach (transportation, facility location) Rodolfo G-F(cord, CSIRO) OsmarVdSF(U Minas Gerais) Sergio H (INTI) Pedro V (CNL) Stock feed /biogas/biomass Belen(cord, INTI) Yesid A (Corpoica) Erica S (INTI) Clara G (U Libre) Laura C (INTI) Team 5 Whey product options (final consumption) Laura C (coord., INTI) Carlos N (U Nacional) Caroline M (Embrapa) Santiago J (UITA) Ana Cristina R (Embrapa) Mary Ann A (CSIRO) Macroeconomy and social aspects Ilba BC (U Libre) Tomas L (UITA) Rosangela Z (Embrapa) Pablo J (CSIRO) Whey processing options and requirements (Ingredients) C. Mattos(coord., cons) Jose Uriel S (U Nal) Andre dsd(embrapa) Marcelo G. (INTI) Amauri R. (Embrapa) Phil C. (CSIRO) 14 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Preliminary cost study 15 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Considering return margins Example of D40 powder production Cost of raw materials: Southern hemisphere < Northern hemisphere (higher competitive advantage and better response to price increase) Consider 5 yr horizon on whey demand Pre-Concentration (nanofiltration) US$ 200/ton solids Drying US$ 500/ton solids Indirect plant cost US$ 200/ton solids Overheads (incl. refrig.) US$ 100/ton solids TOTAL costs US$ 1000/ton solids Price D40 whey powder US$1500/ton solids (projected to remain stable or increase over next 10+years ROUGH MARGIN US$ 500/ton solids Increase in energy costs will need to be considered 16 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Whey collection plant development costs US$ 1.5 million (100,000 L/day; 5000L/h) Minimum requirements (<US$ 200/ton) Pretreatmentequipment (3 reception silos, filtration, skimming, pasteurization equipment) Pre-concentration plant (nanofiltration/ultrafiltration) Quality control laboratory Also need to consider quality requirements (acid whey vssweet whey)and transportation to justify investment 17 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Considerations for individual cheese makers Pasteurization and whey packaging plant to be added on site Purpose development of whey based consumer products Will most likely need government subsidies to be able to reach return margin 18 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Scenarios for whey value addition Total available whey in cheese cluster >350 kl/d Collection plant (preconcentration) + drying >50 kl/d Pre-concentration Single collection plant consumer products Multiple centres consumer products + drying <50 kl/d Consumer products (more than on driers could occur across cluster) Consider pre-existing spare capacities in nearby whey processors <<50 kl/d Biogas, biomass, stockfeed (other) 19 AusAID PSLP Reinforcing disadvantaged communities Workshop 1 26-31 August 2013
Thank you CSIRO Animal, Food and Health Sciences Pablo Juliano Research Project Leader t +61 3 9731 3276 e pablo.juliano@csiro.au