The Global, Centralized Approach of the GAIN Premix Facility Has Made Oil Fortification in Indonesia More Affordable

Abstract

Access to high-grade micronutrients is a recurring challenge that often threatens the long-term sustainability of food fortification programs. To assess the efficiency of the Global Alliance for Improved Nutrition (GAIN) Premix Facility in procuring quality, affordable vitamin A for fortification of edible oil in Indonesia. A global approach to procurement of standard items was used by combining volumes across various demand streams in order to reduce the total cost of acquisition through economies of scale. The GAIN Premix Facility undertook a detailed analysis of vitamin A requirements across its existing customer base, which served as a basis for developing a reliable demand forecast. A consolidated, competitive tender was launched that resulted in the setting up of a long-term commercial agreement with the selected supplier to lock in the most competitive price for a given period of time. The direct benefit to oil manufacturers of fortifying with vitamin A is that the cost of fortification went down significantly compared with prices they would have been offered had they ordered vitamin A individually. In Indonesia, this consolidated procurement approach has allowed a 14.5% decrease in the unit price of vitamin A. The GAIN Premix Facility demonstrated its effectiveness in acting as a global procurement platform by aggregating demand across different customers and leveraging improved prices through increased volumes. Building on the success of this effort, the GAIN Premix Facility is replicating this global approach for procurement of other standard items being procured across fortification programs worldwide.