Business Plan Satellite Farms

Transcription

1 Business Plan Satellite Farms

2 Outline proposed Business setup The general concept of this business venue is: Setup of turnkeys Satellite Farms by the Hub Cluster Farming NGO including a management agreement for a minimal period of 5 years. Whereas the supply and sales of the Farm s products will be guaranteed as follows: The Hub Cluster Farming NGO will be the sole supplier for the Satellite Farms. Life stock, seedlings, fertiliser and feed will be the main products supplied by the Hub Cluster Farming NGO. Africa Direct Sales Ltd will be purchasing the products from the Satellite Farms and will process and distribute it to the local, pan African and international markets. Joint Venture Cluster Farming NGO will structure a plan with the Investment Fund which will commission the setup of the turnkey Farms. This business plan covers the exemplary setup from these Farms based on the outputs from the existing HUB Farm. This HUB farm also serves as a training centre as well as a local economic centre and thus catalyst for local community development. A memorandum of understanding between Cluster Farming NGO and the Investment Fund will be drafted covering topics as: capital investment, loan facilities, interest rates, management consultancy etc... This memorandum include the establishment of a NGO for a Satellite Cluster Farm. The investment operates under the assumption of capital insertion (cash/ in kind) to setup of a Satellite Farm on 25 acres on an existing locations. The profit sharing model will be directly linked to the loan our investment facilities and subject to negotiations. As a general rule the local community has to be taken into account in regards to profit sharing: 10% profit to the local community. The Farm operates under a 100% organic charter and is 100% sustainable, with a minimal ecological footprint. The expertise and production from the diverse key activities is attained via close collaboration with the food industry in the local and pan African market. The base philosophy is: waste from one crop serves as food or fertilizer for another crop or animals. Presumptions were made that in 2014 the initial setup and start up can be made so the first production of the satellite farm can be attained by midst This could result in an operational breakeven end of 2017, if all timing targets are met and production can start at the pre-set pace.(see Financial Report) 1

3 Amortisation was not taken into account and due to the existing Hub farm we have the option to jump start production. The capital insertion in 2014 will serve to cover the building, operational start-up costs and create liquidity buffer. Our scope: Taking full advantage of the African farming potential: strong local markets and cost efficient export to the pan African market with demand exceeding supply; Cluster farming model: economic and sustainable model that can be managed and controlled as a Franchise model; Efficiency of cluster farming leads to cash flows: targeting international and Pan African cash crops, diversifying over several products, high operational techniques and inputs; Real social impact: not donating but participating, training, investing and integrating into local economy & community. Local market & local Agro products In the business plan the produce for the local markets are not being accounted for or evaluated. The local impact for the villages is very high and generates a local trading and economy. The cash flow for these products is important for the village community and the trading/selling of these products to other local communities reinforces the local economic development of the region. The Farm s development consists of local significant products sustaining economy and local markets. Agro forest consists of the planting and development of coconut trees, mango, avocado, lemon, orange, tangerine trees, papayas, cinnamon trees, etc... Next to the Agro forest development, local African products are being cultivated to sustain existing local economies and cultures like: Cassave Cocoyam Plantain Garden eggs Ocro Corn The HUB farm setup is also one of testing and engineering of possible new crops that can be successful introduced into the African markets. Traditional western crops such as: potatoes, tomatoes, beans, cucumber, sweet pepper and carrots are also being tested with promising results. 2

4 The Social Impact is diverse 10% of the net profit is distributed back to the communities in terms of structural and infrastructural investments for the villages involved into the Farm. This is direct profit and involvement for the village (the village mainly being the village where we acquired the land from). The workers needed for the farm are from the villages. they will be trained on the HUB farm for different types of activities on the Farm, approximately workers are needed on a permanent basis. In times of harvesting the workforce is expanded to meet the demands. This can go up to over 100 people when harvesting of different crops takes place. Calculating the social impact is easy for us, if we just look at the situation in our Farm. Due to the social structures we encountered, each worker has his wife and their children combined with the brothers and parents, up to people depend on each worker. Thus we make a direct difference for people on a structural basis. The biggest contribution we noticed so far is not directly the number of people we employ but the duration of the employment. By giving a solid and strong income during the years, the entire village starts to benefit from it. They are sustainable spending more in the village redistributing their profit towards the entire village. Our workforce is also evenly distributed since we start by hiring male workers and when we start the production/nursing we add female workers to the workforce. Indirectly we are hiring local services from the villages sustaining our farm in the day to day needs. Examples: We have daily meals for our workers prepared by a local cook who buys all the products locally in the village. Small day to day utility tools are bought in local shops. The local markets are benefitting from the entire operation. We are offering the workers an extensive on the job training in all the European techniques and standards. We learn them all the basic skills in regards to: plumbing, electricity, fish breeding, animal breeding, aquaponics, industrial cropping, etc... Also the modern Green and sustainable approach towards land depleting, the use of insecticides, herbicides etc... is of great importance to educate them. This type of education normally is very difficult to acquire for these workers in the system they know. We have foreign experts teaching them the European industry standards. By keeping the management / supervision in our hands (European managers) we are ensuring a sustainable quality. Our projects are designed to train the local managers in a period of 5 years so they have the full responsibility after 5 years of the project. We only tend to do this if we are sure that they can manage and operate the farm and face all the challenges they might encounter. 3

5 Operational Structure The operational production farms are now being rolled out, but this is just the first step. Part of the social support is the fact that we are creating a protected environment for the farm and its dependents. The distribution and supply of products is being set up and controlled by us towards our standards. A) Supply We create the farm technically and operationally in such a manner it can be serviced and managed by our local workers with products that are locally available. We source all the products directly at normal prices and not via all types of intermediates ensuring right prices and the needed quality. We are buying in bulk or manufacturing ourselves for all the farms creating a price advantage. The HUB farm will be supplying the Satellite Farms ensuring the quality of products going in. We are developing local new trading facilities and manufacturing facilities creating new job opportunities towards our main objectives: Fertilizer Fish feed Snail feed Seeds Fingerlings Logistics 4

6 B) Processing & Distribution The processing of all the products is done at the HUB farm ensuring: a uniform quality for the buyers trough centralised supervision; cost effectiveness for the operational side (larger scale and capacity planning); more efficient transport and logistics. The distribution and trading of the products is done by our internationally active trading company Africa Direct Sales Ltd for the local and Pan-African markets using all the existing networks. We are create the marketing and the sales network for the Satellite Farms. The demand exceeds the supply by far We are diversifying the farms towards different crops so every Satellite Farm has its speciality. Our sales organisation will setup a direct sales network of local roadside sales, Cluster Farm Fresh Shop and sales penetration into the hotel and restaurant branch from Accra, Cape Coast, Tema to Kumasi. 5

7 BUSINESS PROPOSAL I 25 ACRES CLUSTER FARM THIRD PARTY SET UP Outlined Business Proposition: INVESTOR WILL INVEST IN A THIRD PARTY SET UP; THIS MEANS HE WILL BE MAKING AN INITIAL INVESTMENT AND WILL BE 100% OWNER OF THE SATELITE CLUSTER FARM AND THE PROFITS OF THE FARM. THE FARM WILL BE CUSTOM BUILT AND DELIVERED TURN KEY TO THE INVESTOR. THE FARM WILL BE FULLY OPERATIONAL INCLUDING FIRST ANIMAL STOCKS. CLUSTER FARMING NGO WILL BE PROCURING THE MANAGEMENT FOR THE FIRST 5 YEARS AFTER DELIVERY OF THE FARM TO THE INVESTOR, GIVING THE INVESTOR THE POSSIBILITY TO HAVE HIS OWN MANAGEMENT TEAM FORMED AND TRAINED BY CLUSTER FARMING MANAGEMENT. CLUSTER FARMING NGO WILL: deliver and establish a Satelite Cluster Farming NGO (100% owned by the investor); set up administration requirements for the Satelite Cluster Farming NGO; deliver 25 acres of land into the Satelite Cluster Farming NGO; administrate land registration and follow-up; construct turnkey Satelite Cluster Farm including all infrastructure; be during 5 years responsible for management of the farm; be preferential buying partner for the products from the farm and will process and distribute it to the local and intercontinental market: be supplying the cluster farm with seedlings, fertilizer, feed and initial life stock o 75,000 fingerlings catfish o 300,000 fingerlings tilapia o 3,600 chickens o 1,200 guinea fowl o 500 grasscuters o 300 pigs o 100 sheep o 100 goats o 16 Greenhouses for tomato, paprika, pepper, cucumber INVESTOR WILL: sign a sales agreement for the business transaction; a payment plan will be drafted of the agreed investment to Cluster Farming NGO. upon signing of the sales agreement; purchase supplies from Cluster Farming NGO; grant Cluster Farming NGO the status of preferential buying partner for the products from the farm, which will be processed and distributed to the local and international market; be entitled to the profit of the farm; pay during the first five years the management fee. A memorandum of understanding will be drafted covering topics as the capital insertion and management consultancy. 6

8 BUSINESS PROPOSAL II 25 ACRES CLUSTER SATELITE FARM Outlined Business Proposition: INVESTOR WILL INVEST IN A SATELITE CLUSTER FARM; THIS MEANS HE WILL BE MAKING AN INITIAL INVESTMENT IN THE FORM OF A LOAN AND WILL RECEIVE AN INTEREST ON HIS INITIAL INVESTMENT AFTER THE FIRST FULL YEAR OF OPERATION OF THE FARM. COLLATERAL CAN BE NEGOTIATED SINCE WE CAN HAVE THE POSSIBILITY TO SECURE THE PROJECT WITH OPERATIONAL INSURANCE COVERAGE. CLUSTER FARMING NGO WILL BE RESPONSIBLE FOR THIS FARM (PROVIDING MANAGEMENT, LAND, STOCKS AND PRODUCTS, PROFITS, ). CLUSTER FARMING NGO WILL: form a Satelite Cluster Farming NGO; establish a Satelite Cluster farm on a 25 acres plot; construct a turnkey Satelite Cluster farm including all infrastructure in a period of nine months: be supplying the cluster farm with seedlings, fertiliser, feed and initial life stock o 75,000 fingerlings catfish o 300,000 fingerlings tilapia o 3,600 chickens o 1,200 guinea fowl o 500 grasscuters o 300 pigs o 100 sheep o 100 goats o 16 Greenhouses for tomato, paprika, pepper, cucumber INVESTOR WILL: sign an agreement for the investment; be entitled to an interest payment on an annual basis starting the first full year after start-up of the Satelite Cluster Farm operation; be reimbursed with the initial investment sum after 5 full production years. OUR SCOPE: taking full advantage of the African farming potential and strong local markets; the Cluster farming model is an economic and sustainable model that can be managed and controlled as a franchise model; efficiency of cluster farming leads to cash flows: targeting international and Pan African cash crops, diversifying over several products, high operational techniques and inputs; real social impact; not donating but participating, training, investing and integrating into local economy and community. A loan contract will be drafted covering topics as loan facilities, interest rates and repayment of the loan. 7