UNICEF Supply Division RUTF pre-tender industry consultation Copenhagen 11-13 June 2018 Market Update for RUTF and other LNS products Evaluation of Procurement Objectives (RUTF tender 2015) Jan Debyser Contracts Manager Nutrition Unit, MNC
RUTF Bidding Overview Year of issue 2001 2006 2008 2010 2012 2013 2015 ITB/RFP Reference 16012 500418 500890 501480 501715 502090 Invitees 1 16 31 31 29 34 Response 1 13 27 23 25 29 Off-shore LTAs Established 1 1 7 14 11 14 13
Forecast Accuracy Rate 60,000 RFP 502090 50,000 Orders Forecast 40,000 30,000 20,000 10,000-2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18 Orders 8,129 20,690 27,154 29,110 33,635 30,577 34,158 32,952 52,850 40,677 Forecast 9,000 13,000 24,000 28,000 32,000 35,000 31,000 33,000 36,000 47,500
Procurement Objectives Long term: Ensure sustainable supply of affordable RUTF of assured quality that best meets the needs of countries Tender objectives: 1. Sustain a diverse supplier base with capacity to respond to the demand, including emergency response 2. Market competition in order to obtain best value for money 3. Assurance of quality in line with set international standards 4. Support 2014 2017 OMP objective to source 50% of RUTF from manufacturers located in programme countries by 2017.
MT Objective 1: Diverse supplier base with sufficient capacity to respond to demand, incl. emergency response 60,000 50,000 40,000 RUTF paste RUSF LNS-MQ LNS-SQ 30,000 20,000 10,000-2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr18 LNS-SQ 87 36 18 31 85 52 700 313 LNS-MQ 1,316 602 1,124 259 1,023 935 960 462 832 71 RUSF 8 42 713 682 1,161 1,256 423 714 958 638 169 RUTF paste 2,577 4,552 10,741 8,128 20,854 27,156 29,110 33,635 30,577 34,158 32,952 52,850 13,559
Therapeutic Foods in MT Number of Countries Supplied Ready to Use Therapeutic Food: UNICEF demand 60,000 70 50,000 Forecast balance RUTF Biscuit RUTF Paste Country Recipients 60 40,000 50 30,000 40 30 20,000 20 10,000 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18 Forecast balance - - - 33,941 RUTF Biscuit 600 76 156 151 61 108 335 120 56 160 24 RUTF Paste 3 84 57 109 344 1,793 2,697 4,552 10,741 8,129 20,690 27,154 29,110 33,635 30,577 34,150 32,952 52,850 13,559 Country Recipients 1 4 6 7 8 17 26 41 48 45 52 57 51 60 60 65 66 63 0
MT RUTF paste: UNICEF procurement and CIK (USAID/FFP donation) 70,000 60,000 50,000 40,000 30,000 20,000 10,000-2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18 CIK 1,690 4,882 6,372 3,367 8,534 2,802 Procurement 2,577 4,552 10,741 8,128 20,854 27,156 29,110 33,635 30,577 34,158 32,952 52,850 13,559 Procurement CIK
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Unpredictable timing of demand Timing of (funded) demand is erratic: Limited government procurement (through PS) Emergency donor funding Unpredictable ad-hoc funding Short-term funding Multi-year grants/loans but without government continuation 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
SAM COVERAGE RUTF MT Number of children with SAM 16 million Demand evolution? 7,000,000 6,000,000 EXTRAPOLATION OF SAM TARGETS 2018-2021 TO PROCUREMENT BASED ON 2014-17 AVERAGE RATIO OF 70% 70,000 60,000 5,000,000 4,000,000 3,000,000 2,000,000 50,000 40,000 30,000 20,000 1,000,000-2014 2015 2016 2017 2018 2019 2020 2021 MT 30,577 34,158 32,952 52,850 43,470 48,300 53,130 57,960 SAM coverage 3,200,000 3,600,000 4,100,000 4,000,000 4,500,000 5,000,000 5,500,000 6,000,000 TENTATIVE 10,000-6 million 1.0 million 1.9 million 2.6 million 2.9 million 3.2 million Number of SAM children accessing treatment 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
RUTF paste in MT 15 countries accounting for 80% of demand 9,000 8,000 7,000 6,000 5,000 4,000 2016 2017 Apr-18 3,000 2,000 1,000 -
RUTF: predominantly programme funded 100% 90% 80% 70% 60% 50% 40% 95% 92% 95% 93% 30% 20% 10% 0% 2016 2017 Apr-18 Grand Total Programme Procurement Services
MT RUTF: SD and Country Office procurement 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18 Grand Total Supply Division procurement Country Office procurement
MT RUTF: emergency-approved orders 9,000 8,000 7,000 6,000 5,000 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2012 2013 2014 2015 2016 2017 Apr-18 Grand Total 4,000 Non-emergency Emergency 3,000 2012 2013 2014 2015 2016 2017 Apr-18 2,000 1,000 -
Objective 1: Diverse supplier base with sufficient capacity to respond to demand, incl. emergency response Result: Number of companies capable to manufacture and supply RUTF for a global market has increased from 11 in 2013 to 13 in 2014/15, and maintained at that level in 2016-18. Before 2008 2009-2010 2011-2012 2013 2014-2015 2016-2018 Africa 2 5 4 6 5 Americas 3 5 4 4 3 Asia 1 2 2 2 4 Europe 1 1 2 1 1 1 TOTAL 1 7 14 11 13 13
RUTF Long Term Arrangements - Supply Division 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Nuflower Foods, India Amul Dairy (Kaira), India Compact South-Africa Ismail Industries, Pakistan Meds for Kids, Haiti Samil Industry, Sudan Power Foods, Tanzania Hilina, Ethiopia STA, Niger Mana Nutritive Aid, USA Edesia, USA Nutrivita, India Societe JB, Madagascar Compact, Norway Compact, India Insta, Kenya Asia Asia Africa Asia Americas Africa Africa Africa Africa Americas Americas Asia Africa Europe Asia Africa Challenge, USA Americas Diva, South Africa Africa Tabatchnick, USA Americas Vitaset, DomRep Americas Nutriset, France Europe TOTAL 1 5 7 12 14 11 13 14 13 13 13
RUTF Long Term Arrangements Country Offices Result: An increasing number of companies have LTAs with the UNICEF Country Office. Some of them also supply for export. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 STA, Niger X X X X X X X X X X X X X Hilina, Ethiopia X X X X X X X X X X X X PPB, Malawi X X X X X X X X X X Amwili, DRC X X X Valid Nutrition, Malawi X X X X X X X X X JAM, Mozambique X Societe JB, Madagascar X X X X X X X X X Power Foods, Tanzania X X PPB, Sierra Leone X X X X X X Samil Industry, Sudan X X X X X X X MFK, Haiti X X X X X X X InnoFaso, Burkina Faso X X X X X X DABS, Nigeria X TOTAL 1 2 2 4 7 7 8 10 9 9 8 9 10
Geographically well-spread supplier base with 20 UNICEF LTA and LLTA holders on 4 continents, 17 in programme countries. More potential new LTA and LLTA holders coming up
MT RUTF: procurement by vendor type 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18 Grand Total Originator Franchisee Independent
MT RUTF: vendor by location 60,000 50,000 40,000 30,000 20,000 10,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Africa Americas Asia Europe
Objective 1: Diverse supplier base with sufficient capacity to respond to demand, incl. emergency response Result: Global manufacturing capacity increased to >200,000 MT (theoretically up to 250,000 MT for all LNS products combined). This largely covers combined demand for all RUTF, RUSF, LNS-MQ and LNS-SQ of all procurement agencies and governments, leaving sufficient capacity to support growth in demand to meet WHA targets. 2013 2014 2015 2016 2017 UNICEF procurement 35,844 31,991 35,419 34,793 54,260 estimated WFP procurement 22,100 27,302 22,696 48,113 50,292 estim. USAID donation to UNICEF + WFP 2,230 8,198 8,967 9,147 11,021 total UNICEF+WFP+USAID 60,174 67,491 67,082 92,053 115,572 others (max 20%) 15,043 16,873 16,771 23,013 28,893 Grand total 75,217 84,364 83,853 115,066 144,465 estmated production capacity 142,204 143,573 143,573 185,470 207,820 % of capacity utilized 53% 59% 58% 62% 70%
RUTF: evolution manufacturing capacity 250,000 UNICEF RUTF procurement + CIK versus RUF/LNS global production capacity (MT) 250,000 Non-programme countries 200,000 200,000 Programme countries 150,000 150,000 100,000 100,000 50,000 50,000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 Europe Africa Americas Asia UNICEF procurement FFP donation
RUTF: production capacity (2017) RUTF production capacity per vendor category RUTF production capacity per vendor location 250,000 250,000 200,000 200,000 150,000 150,000 100,000 100,000 50,000 50,000 0 Franchisee Generic Patent Grand Total 0 Africa America Asia Europe Grand Total Capacity Capacity offered UNICEF Capacity Capacity offered UNICEF Actual and current capacity can be higher or lower than declared during last tender (early 2016) : Manufacturers not responding to tender Expansion and upgrades Temporary boost in capacity (e.g. extra shifts) Down time for expansions, upgrades, cleaning, quality problems Same capacity also used for production of other LNS products
USD per MT Objective 2: Market competition in order to obtain best value for money Result: further reduction in price: WAP reduced with 4% in 2016-17, with 16.6% compared to 2006 4,400 4,200 Weighted Average Price for RUTF procured by UNICEF 4,000 3,800 3,600 MT Cartons 3,400 3,200 3,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18 Cartons 52.06 54.25 57.07 53.60 52.17 51.82 49.83 49.61 50.94 45.24 44.80 43.43 44.36 MT 3,773 3,931 4,136 3,884 3,781 3,755 3,611 3,595 3,692 3,279 3,246 3,147 3,215
USD RUTF: WAP off-shore vs local procurement 65.00 60.00 WAP SD per carton WAP local per carton WAP general 55.00 50.00 45.00 40.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18 WAP SD per carton 51.56 53.79 57.01 51.53 49.94 50.51 48.17 48.84 49.45 44.25 43.67 42.56 43.47 WAP local per carton 60.00 58.49 58.87 60.49 59.60 57.32 54.08 57.05 56.74 50.16 49.31 48.23 48.62 WAP general 52.06 54.25 57.07 53.60 52.17 51.82 49.83 49.61 50.94 45.24 44.80 43.43 44.36
USD per carton RUTF: WAP of producers in programme versus nonprogramme countries 65.00 Result: gap between narrows thanks to producers in programme countries becoming more competitive 60.00 Non-progr Country Programme Country All 55.00 50.00 45.00 40.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18 Non-progr Country 51.56 53.79 56.96 51.02 49.46 50.08 47.45 48.81 48.85 42.74 42.15 41.47 42.99 Programme Country 60.00 58.49 59.62 57.58 56.88 54.62 51.91 51.79 54.23 49.24 46.88 45.06 45.33 All 52.06 54.25 57.07 53.60 52.17 51.82 49.83 49.61 50.94 45.24 44.80 43.43 44.36
USD per carton RUTF: WAP per vendor category 65.00 60.00 Franchisee Independent Originator 55.00 50.00 45.00 40.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18 Franchisee 60.00 58.49 58.87 59.52 59.35 55.43 53.22 52.91 55.80 48.96 47.04 46.27 46.07 Independent 62.10 55.84 54.02 52.73 50.33 50.56 49.34 48.55 45.58 43.55 43.90 Originator 51.56 53.79 56.96 50.93 47.89 49.85 46.30 48.19 48.92 41.18 41.01 41.35 43.58
USD per carton RUTF: WAP per vendor location 65.00 60.00 Africa Americas Europe Asia 55.00 50.00 45.00 40.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18 Africa 60.00 58.49 58.87 59.70 57.56 55.45 52.60 52.62 54.79 49.00 46.58 45.01 45.57 Americas 62.10 51.25 54.98 50.37 50.91 50.70 49.53 47.93 45.17 42.48 42.03 Europe 51.56 53.79 56.96 50.93 47.90 49.90 46.30 48.19 48.92 41.18 41.01 41.35 43.58 Asia 50.73 47.32 47.13 50.20 50.28 46.63 44.74 42.99
https://public.tableau.com/profile/supply.division#!/vizhome/unicef Pricedataoverviewforvaccines/Fulldashboard
Objective 3: Assurance of quality in line with set international standards
Objective 4: Support 2014 2017 OMP objective to source 50% of RUTF from manufacturers located in programme countries by 2017 Result: objective reached and maintained 100% 90% 6% 10% 4% 27% 80% 39% 37% 38% 39% 39% 70% 53% 56% 55% 59% 60% 50% 40% 94% 90% 96% 73% 30% 61% 63% 62% 61% 61% 20% 47% 44% 45% 41% 10% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18 Non-progr Country Programme Country
UNICEF/SUDA2014-XX228/Noorani Thank You 32