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The Emilia-Romagna agroindustry cluster, The Emilia-Romagna agroindustry cluster, and the fruit and vegetable chainand the fruit and vegetable chain

Alessandro ZAMPAGNAAlessandro ZAMPAGNACenturia RIT – Romagna Innovazione TecnologiaCenturia RIT – Romagna Innovazione Tecnologia

General ManagerGeneral Manager

Adriatic Danubian ClusteringAdriatic Danubian Clustering

UdineUdine, 14 February 2011, 14 February 2011

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1. The cluster concept1. The cluster concept

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NOT top-down planning

But

Self-originated and self-sustaining concentration of enterprises

Fostered by local specialised services and funding

The local government does not “create” clusters but helps the start-up and growth of the cluster through a support system

composed of funding and especially services

Agro-food clusterAgro-food cluster

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NOT a simple concentration of food processing enterprises

But

COMPLETE FOOD CHAIN SEGMENTS

MACHINERY AND SERVICES

INTEGRATION

COMMON ROOTS

Agrofood agroindustry clusterAgrofood agroindustry cluster

The agrofood sector developmentThe agrofood sector development

1900-1

950 1

960

1900-1

950 1

960

1970

1970

Cereals, Beets, Fruits and Vegs

Animal husbandry

Feed production Sugar industry Fruits & Vegs trade Seeds and nurseries

Milk and cheese Processing

Wine

Meat

1950-1970 : The modernisation of the agrofood sector

GROWTH

1970 - 2

000

1970 - 2

000

1970-2000 :

The development of the

Agroindustry Cluster

INTEGRATION

Farm machinery

Processing machinery

Refrigeration plants

Packaging

Logistics

Biotechnologies (in vitro, biological control, fermentation, extractions)

Information technology

The agroindustry cluster developmentThe agroindustry cluster development

The R-EVOLUTION of the new millennium:

The fall of agricultural product prices

The farewell of the sugar industry

La “vanishing” community funds

The Transport industry rationalisation

The opening international food product market

The “media” crisis (BSE, flue, dioxin)

Growing strategy differences of the three steps of the food chain:

- Agriculture WHAT? What are we going to do?

- Food HOW? How to be more competitive?

- Machinery WHERE? Where to look for new markets?

The cluster r-evolutionThe cluster r-evolution

2000 - …

.2000 - …

.

The cluster re-engineeringThe cluster re-engineering

2000 - …

..2000 - …

..

The REACTION:

• The confusion of the farmers

• Mergers of food enterprises (especially coop)

• The new non-food chain

• The internationalisation of machinery enterprises

• Searching for integrated logistic

Which policy for the three segments of the chain?

Is it possible to re-integrate the cluster?

DOES THE AGROINDUSTRY CLUSTER STILL EXIST?

The cluster re-engineeringThe cluster re-engineering

2000 - …

..2000 - …

..

The 2000s cluster policy :

INNOVATIONINNOVATION

Organisation Technology

Agriculture Bigger farms Bigger farms New cropsNew crops

New networksNew networks

Processing New commercialNew commercial New processes, New processes, solutionssolutions consumer-tailored consumer-tailored products, products, ICTICT

Machinery International growthInternational growth High techHigh tech

A POLICY TO INTEGRATE THE CLUSTER?

Innovation & Services (information, networks, R&D, finance) Innovation & Services (information, networks, R&D, finance)

The regional Service Centres NetworkThe regional Service Centres Network

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Regional Administration

ERVET ASTER

Cluster environment

Centuria RIT

CRPV, CRPA

Experimental farms

University & Research Centres

Training Centres

Labs

Cluster environment

Centuria RIT

CRPV, CRPA

Experimental farms

University & Research Centres

Training Centres

Labs

Cluster A

Agricultural farms

Coops

Processing companies

Machinery companies

Service companies

…..

Cluster A

Agricultural farms

Coops

Processing companies

Machinery companies

Service companies

…..

Cluster B

Agricultural farms

Coops

Processing companies

Machinery companies

Service companies

…..

Cluster B

Agricultural farms

Coops

Processing companies

Machinery companies

Service companies

…..

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3. The role of cooperatives in 3. The role of cooperatives in Emilia-Romagna agrofood clustersEmilia-Romagna agrofood clusters

Emilia-Romagna agricultural gross product amounts at 4,000 millions Euro.

More than 50% of the agricultural produce is managed by cooperatives.

Cooperatives have had a primary role in the development of the cluster.

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Agricultural Coops in Emilia-RomagnaAgricultural Coops in Emilia-Romagna

FIRST-GENERATION COOPERATIVES

• «Defensive» objectives: to protect members from market risks and to reduce costs through scale economies• “Decision Centre”: Board of Directors, composed of farmers, and Assembly «one head one vote"• Evolution: Difficulties in maintaining margins Develop new higher valued added activities along the chain (new-generation cooperatives) Mergers or alliances to obtain greater scale economies

How Coops were bornHow Coops were born

NEW-GENERATION COOPERATIVES

• «Offensive strategy»: scale economies in activities closer to the consumers (processing, logistics, marketing), in order to get more value added. They try not to sell commodities but higher-value products.

• Complete vertical integration, to obtain control of the whole chain.• Or strategic alliances with companies (even non coops) with synergic expertise.

The evolution of CoopsThe evolution of Coops

• Agricultural prices comes from the market; it is not realistic to think of control the agricultural product price.• Value Added is present all along the chain; every step of the chain to the consumer, gets a higher quota of Value Added.• To get more Value Added, it is necessary to invest in activities along the chain and get closer to the consumer.• Farmer income = agricultural product price + return from the investment along the chain

The principles of New-generation CoopsThe principles of New-generation Coops

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Some examples in the fruit and Some examples in the fruit and vegetable clustervegetable cluster

Diversificazione e segmentazione

PIU’ GUSTO AL BENESSERE

• ricchi di fibre

• basso contenuto di grassi

Ricchi di:

• fibre

• vitamine

• composti antiossidanti

Il biologico e la tracciabilità

A bridge between the fruit and vegetable A bridge between the fruit and vegetable cluster and the Mediterraneancluster and the Mediterranean

To foster internationalisation of fruit and vegetable To foster internationalisation of fruit and vegetable cluster companies in the Mediterraneancluster companies in the Mediterranean

27 Italian companies (in majority from Emilia-Romagna) in 27 Italian companies (in majority from Emilia-Romagna) in

different businesses of the fruit and vegetable cluster, have different businesses of the fruit and vegetable cluster, have

decided to cooperate in order to promote their activities in the decided to cooperate in order to promote their activities in the

Mediterranean:Mediterranean:

Fresh fruit and vegetable production and marketingFresh fruit and vegetable production and marketing

PackagingPackaging

MachineryMachinery

ServicesServices

Mediterranean Fruit Company

M.F.C. offices

MFC Italy

MFC Egypt

MFC Tunisia

MFC Turkey

MFC Russia

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3. The role of Centuria RIT 3. The role of Centuria RIT Romagna Innovation TechnologyRomagna Innovation Technology

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CENTURIA-RIT IS A SCIENCE AND TECHNOLOGY PARK AIMED AT ENHANCING THE COMPETITIVENESS OF

THE TERRITORY AND OF LOCAL ENTERPRISES THROUGH INNOVATION

It is at the same time:

A crossway between institutions, enterprises and research to foster information exchange, technology transfer, contacts.

A system of relationships, fed with added value services, to provide better access to knowledge, innovation, markets and

capitals.

The mission of Centuria RITThe mission of Centuria RIT

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The environmentThe environment

sede di Faenza

sede di Cesena

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INNOVATION INFRASTRUCTURES

- University

Agriculture, Food Science, Engineering, Information Science, Economics, Languages, Architecture, Psychology

- Analysis and R&D Laboratories

- Research centres

- Training centres

- Specialised international exhibitions

- Available industrial facilities

The environmentThe environment

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All the innovation infrastructures are present in the territory:

No need for new incubators, laboratories, greenfield

investments, etc.

The need is to increase the relationship between the actors of

the territory to increase innovation.

Hence the “SOFT” solution:

Public private investment

Majority of private capital

No direct “hard” investment:

“Soft” activities only: networking, information, innovation

brokerage, R&D project, etc.

The “soft” solutionThe “soft” solution

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CompaniesLeading companies

Associations of entrepreneurs

Banks

65% shares

The stakeholdersThe stakeholders

Research & trainingLocal faculties of the University of Bologna

CNR, ENEA

Research centres

Laboratories

0% shares

Local governmentMunicipalities, Provinces, Chambers of commerce

Local health and environment authorities35% shares

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The logical frameworkThe logical framework

INFORMATION AND NETWORKINFORMATION AND NETWORK

PROJECTS AND SERVICESPROJECTS AND SERVICES

CO

MM

UN

ITY

CO

MM

UN

ITY

Workgroups

News

Patent & tech

monitoring

Info

Seminars conference

s

Area marketing

R&D Tech Transf

Finance

Intangibles

R&DTech

Transf

Finance

New entrepreneurship

Internationalisation

Publications

ME

MB

ER

SM

EM

BE

RS

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Information flow to the territorySelected information on patents and technology

Commercial and joint-venture opportunities

Selections of the competencies useful for the territory

Relationship inside the territoryBetween companies, laboratories, R&D centres, university, public

administration, financial institutions

Meetings, seminars, company open days

Management of shared projects: start-ups, R&D, various collaborations

Information flow from the territoryArea marketing

Relationship with investors

Common marketing operations

1st activity: relationships network1st activity: relationships network

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SME

SME

SME

SME

SME

SME SME

InstitutionsBanksSyndicates of entrepreneurs

UniversitiesR&D centres

S.T.P.

project managementdata miningmarket analysestechnology transfer research and developmentbusiness connectionsnew business start upventure capital connectionstrainingJV development

Big industrialgroups

2nd activity: Specialised services2nd activity: Specialised services

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Concrete outcomes (projects, funding, patents, new companies, etc.)

Satisfaction of the associates

Low cost (flexible and light structure)

No building(ex. laboratories, incubators), just offices

No ad hoc public funding

80% of the investment in professional personnel and Information and Communication Technology

The outcomesThe outcomes

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Thank you