Value Chain Glossary: Value-added Processing
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Value-Added Processing
Modifications made to a raw material that raise the price it can attain in the market, including improvements in quality or other attributes, or converting the raw material into a different product. Process upgrades are usually required to achieve value-added processing.
Examples of value-added processing:
- A Guatemalan horticulture cooperative adds a packaging plant that prepares pre-packaged products for local supermarket and export markets. They now receive a higher return per unit of production on pre-packaged vegetables.
- Ghanaian cocoa producers invest in standards and certifications for organic production and are able command a premium on certified organic cocoa beans as well as other organic processed cocoa products (chocolate bars, cocoa powder). They now enjoy a higher return per unit of production on cocoa beans than they did before they were certified.
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