bigaarmenian dutchjvllc expansion business plan

BIGAAGROGROUP

BIGA ARMENIAN DUTCH JV LLC

ExpansionBusinessPlanBIGAARMENIAN‐DUTCHJVLLC

BIGAAGROGROUP

TableofContentExecutiveSummary 3

CompanyBackground 5

ManagementStructure 8

SWOTAnalysis 12y

MainProducts 14

OperationsandProductionPlan 16

ProductivityPerCropType 20

QualityAssuranceandControl 21

MarketingPlan 22

IndustryAnalysis 23

MarketDescription 25

Competition 26p

BusinessDevelopmentPlan 27

FinancialPlan 29

ExpansionBusinessPlan page

RiskAnalysis 36

BIGAAGROGROUP

EXECUTIVESUMMARY

BIGAAGROGROUP

Entirebusiness isconductedthroughBiga Armenian‐DutchJVLLCandAmster FlowersArmenian‐DutchJVLLC.

ExecutiveSummary

Mission Investments Planned

MissionoftheCompanyistoproducehighqualityfresh

agro‐productionanddeliverittotheultimatebuyersboth

in local and foreign markets.General objectives of the

Item Total,USD’mln BIGA EBRD

Strawberry‐ New 12.2 1.7 8.3inlocalandforeignmarkets.

TheCompanyaimstobeaneconomicallyviable,consistent,

sustainableanddiversifiedbusinesswhichishighly

competitivebothinlocalandexportmarkets,whichuses

goodagriculturalpracticestoproducethehighestquality

Generalobjectivesofthe

businessare:

Toincreaseproduction

capacities.

Todecreasenegative

Mushroom‐ New 4.2 0 4.2Tomato‐ New 2.7 0 2.7HangarConstruction 0.2 0 0.2Lamps–Tomato 0.3 0 0.3Pl

cultivated,natural,non‐GMOcropsforitsconsumers.

ConceptproposalDevelopmentPlan

TheCompanyintendstoestablish: CurrentlytheCompanyseeksastrategicpartnertoattract

seasonalityeffectsby

diversifyingproductline.

Touseadvancedand

moderntechnologiesfor

Plants 0.3 0 0.3Total* 19.9* 1.7 16

p y Anewgreenhouseof5hectaresforstrawberrygrowing,

containing750,000plants forwintercrop

Openareaof5hastrawberryfieldswithsmallgreenhousefor

cultivatingseedlingson5hawith150,000plants

A newmushroom growing plant near the existing plant

y p y g p

financialresourcesfortheexpansionofthebusiness.

EBRDisconsideredasmainpotentialpartner.Mezzanine

financingofUSD16mlnmaybeappliedtosuccessfully

implementthedevelopmentplanwithfurtherconversion

intensiveexpansion

Anewmushroomgrowingplantneartheexistingplant.

Anew1hagreenhousefortomatobreeding, tobeconstructed

nearthecurrentone.

Aspecialstorage forkeepingfertilizers,cocopeatandother

inventoriesinsecureandsafeconditions.

toCompanyinthenearfuture.

Thefinancialresourcesanticipatedtobeattractedaretobe

fullyutilizedforbusinessexpansionpurposes.

* Additionally the cash inflows generated from the operational Installnewgrowinglightsinexistingtomatogreenhouse


*Additionally,thecashinflowsgeneratedfromtheoperational

activityaretobeinvestedinthebusiness:c.USD2.7mln

BIGAAGROGROUP

CompanyBackground

BIGAAGROGROUP

BIGA’slongtermvisionistoincreaseprofitsbydecreasingproductionandoperationalcostsandincreasingitsmarketreach

CompanyBackground

globally.Vision BasicInformation

Qualityassures longtermprofitability.

BIGA ltd is dedicated to produce the best quality freshSphere: Agriculture

General objectives of the BIGA ltdisdedicatedtoproducethebestqualityfresh

fruitsandvegetablesandthusincreasebrandloyaltyofits

customers,resultinginhighercustomerretentionrate.All

theabovementionedattributeswillallowBIGAto

graduallyincreasetheproductionrate,andsimultaneously

RegistrationDate: 24.02.2005

RegistrationNumber: 26411007131

TaxID: 00089298

Generalobjectivesofthe

businessare:

Toincreaseproduction

capacities.

Todecreasenegative

raisetheproductionprices.BIGAstrivestobethe

dominantfoodexportertoMiddleEastandreflect

Armenianfreshfood’simageintheregion(MiddleEast).

LongTermGoals ShortTerm Goals

LegalAddress: 36/3N.Zaryan Str.,Yerevan,Armenia

seasonalityeffectsby

diversifyingproductline.

Touseintensiveadvanced

andmoderntechnologies g

Penetrateintonewmarketsbypositioningashigh

quality,non‐GMOproductfromArmenia

Establishrelationshipwithleadingdistribution

companiesinCISandtheMiddleEast

Increaseproductivityinexistinggreenhousebyusing

newtechnologiesandbuildanew1hagreenhouse

Constructhangarforstore inproperconditions turfand

otherinputsutilizedformushroombusinessp

ExpandcollaborationwithMirak Groupbygrowingnew

vegetables(iceberglettuce)andfruits(cherry)

EstablishR&Ddepartmenttoprovideresearchesin

thefieldsofadaptingadvancedtechnologiesto(in)local

p

Buildnew12units mushroomfactory

Build5haofstrawberrygreenhousetoutilizethehigh

pricesinwinterseason

Use extensivegrowingtechnologiesinnewlyTh C d d i h

environmentalconditionsandtodevelopstrategyto

substituteimportedmaterialswithlocallyproduced

constructedstrawberrygreenhouse

Establish AccountingandManagementreportingOS

TheCompanywasawardedwithsolid awardsformany years


BIGAAGROGROUP

BIGA AMSTERFLOWERS

CompanyBackground

BIGAwasregisteredin2010andisoperatingin

StrawberryandMushroomgrowingbusiness.

StrawberrygrowingfieldsarelocatedinAkunq

Community,Kotayq Region,Armenia.

AMSTERFLOWERSwasregisteredin2006andisengaged

intomatogrowinganddecorativeplantsimport,

regenerationanddistribution.Tomatogreenhousesare

locatedinMargara,ArmavirRegion,Armenia.y, yq g ,

Mushroom growing plant is located in Margara, Armavir

Region, Armenia. BIGA Mushroom is using the latest Dutch

technologies in the production in order to achieve high

quality and maximum yield .

g , g ,

PlantsbusinessisoperatingfromMargara,ArmavirRegion,

Armenia(growingfacilities)and9Arshakunyats Ave,

Yerevan(Showroom).

A l l f 2013ExistingProductionCapacities Investments,USD’000,2010‐2013

Annualsalesfor2013

wasoverUSD5mln.

NetProfitforthesame

periodexceededUSD

950k.Direction Total 2010 2011 2012 2013BusinessDirection Growing

AreaAnnualYield950k.

Strawberry 4,512 1,203 2,005 1,003 301

Mushroom 4,265 ‐ 2,031 2,234 ‐

Tomato 2,760 2,760 ‐ ‐ ‐

Plant* 500 ‐ ‐ ‐ ‐

Area Yield

Strawberryfields 15ha 350tones

Mushroom 2,880sqm 720tones

Total12,037 3,963 4,036 3,237 301

Tomato

Standard

Cherry

10,000 sqm

7,500sqm

2,500sqm

362.5tones

300tones

62.5tones *Actualinvestmentsweremadein2006

Thisbusinesslineisexcludedfromcalculationsand


projectionsduetoitssmallshareintotalvolumes,

insteadallfixedexpensesareconsidered.

BIGAAGROGROUP

In2014,BIGAandAMSTERFLOWERSwillbegroupedundertheumbrellaofBIGAAGROGROUPtomanagethewholebusiness.Thebusinessowners

ManagementStructure

BIGA KeyManagementPersonnel

Mr Samvel Petrosyan ‐ generalmanager, whole

businesses.

Li M

areactivelyengagedin

businessmanagement

processesbyensuringShareholderName Share,%

KarenGevorgyan 30%LineManagers

Mr.DavitGhukasyan – Mushroombusiness.

Mr.AramAsatryan – Tomatogrowingbusiness.

Mr.GeorgeGadimy – Strawberrybusiness.

M D K t d St b b i

thatthebusinessis

properlymanagedand

controlled.

KimYeganyan 25%

GarnikPetrosyan 25%

Amster FlowersJCLLC 20%

Total 100% Mrs.Donara Kostandyan– Strawberrybusiness.

AMSTERFLOWERS CurrentStructure

Total 100%

ShareholderName Share,%

KimYeganyan 45%

Garnik Petrosyan 45%

KarenGevorgyan 10%

Total 100%Total 100%

Allstrategicdecisionsaredrivenbyshareholders,whoareactivelyengagedinthemanagementprocessesofthe

wholebusiness,whiledailyandoperationalmanagementisconductedbyexperiencedprofessionals,whocarry


y p g y p p y

outdailyworkstoensurestablemanagementoverthewholeprocess.

BIGAAGROGROUP

Strawberrygrowing fieldsarelocatedinAkunqCommunity,Kotayq Region,Armenia.

LocationsandExistingInfrastructure– Strawberry

Strawberry GrowingFields ViewonStrawberryGrowingFacilities

TheCompanyoperatesonrentedlandplotsof15

hectaresinAkunq Community,Kotayq Region,ArmeniaP h d

byrunningconstructedproductionpremiseson8

hectaresoftheabovementionedarea.

Foreffectivemanagementandtaxoptimization

purposes thepropertiesarerentedfromthe

Thefirstharvestofstrawberrywasreceivedin2012.

To be purchased

Purchased

To be purchased

shareholders.

TheconstructionprocesswasfinalizedinMarch,2013.

OverallUSD4.5mlnwasinvestedinthisbusinessline.

Thefirstharvestofstrawberrywasreceivedin2012.Source:GoogleMaps

Theequipmentandtechnologicalsystemshavebeen

purchasedfromMirak Group.

Overall500kplantsareplantedonthisarea,which

ensures350tonesofstrawberrygrowingannually(i.e.

ActualInvestments

Item Value,USD

LandPurchaseandLeveling 1,250,000

Greenhouse 600,000eachplantprovides0.7kgcropsannually).

SpecialFastcoolingSystem‐FCSwasestablishedto

prolong shelflifeanddeliverfreshproductstolocaland

foreignmarkets.TheproductioncapacityofFCSis

d d l d h

Greenhouse 600,000

Buildings 460,000

Equipment&Machinery 952,000

Plants 500,000

Perlit&Cocopeat 260,000exceedingcurrentproductionvolumesandcanservethe

expansionrequirements.


OtherCAPEX 490,000

Total 4,512,000

BIGAAGROGROUP

Tomatogrowing greenhousesarelocatedinMargara,ArmavirRegion,Armenia.

LocationsandExistingInfrastructure– Tomato

TomatoGrowingGreenhouses ViewonTomatoGrowingFacilities

TheCompanystartedtomatogrowingin2010and

currentlyhastwogreenhouseswith totalgrowingareaof

10,000sqm,whichensurec.360tonesofharvestannually.

Thegreenhousesarefurnishedwithmodernequipments

andtechnologies,purchasedfromAmmerlaan.The

productionisbasedonhydroponicsstandards.

Hydroponicsistheproductionofvegetablesinmodern,

temperature‐controlled,multi‐spantunnels.Intermsof

implementedsystemscomputertemperaturesensors,

automaticopeningandclosingvents,automaticmisting

nits and temperat re controlled fans are being e ploited Actual Investments

Source:GoogleMaps

unitsandtemperaturecontrolledfansarebeingexploited,

whichsignificantlyincreasetheeffectivenessandthe

efficiencyofvegetablegrowingprocesses.

Greenhouse/hothousehydroponictomatoesareusedfor

thefreshtomatomarketonly.Whilethesetomatoes

ActualInvestments

Thefirstharvestoftomatowasreceivedin

2010.Item Value,USD

Greenhouse 2,240,964

Surroundings 24,096y

commandapremiumpriceinthemarketplace,theyare

neverusedinprocessing.GHtomatoeswouldbe

consideredtrashinprocessedmarketsduetotheirwater

content.Additionally/Moreover,nobioengineeredvarieties

Construction 240,964

Other 253,976

Total 2,760,000

aregrown;mostgreenhousevarietiesareproducedby

DutchorIsraeliseedcompanies.


BIGAAGROGROUP

Mushroomgrowing plantsarealsolocatedinMargara,ArmavirRegion,Armenia.

LocationsandExistingInfrastructure– Mushroom

MushroomGrowingPlants ViewonMushroomGrowingFacilities

TheCompanyisinmushroomgrowingbusinesssince

2011.CurrentlytheCompanyprocessestwomushroom

plantswithoverallareaof2,400sqm,containing

productiveshelvesof2,880sqm,whichdailyproduction

amountsto2tons.Themushroomplantsarelocatedin

Margara,ArmavirRegion,Armenia.

C i f h h l d

Thefirstharvestofmushroomwasreceived

in2011.

Constructionprocessesofthegreenhouseswerecompleted

in2010‐2011,byChristiaens Group.BIGAstarted

collaborationwithMirak Groupin2011havingacurrent

productioncapacityof2tonsperdayandplanningto

increase the production capacity to 4 tons per day ActualInvestments

Source:GoogleMaps

increasetheproductioncapacityto4tonsperday.

BIGAMushroomsisusingthelatestDutchtechnologiesin

theproductionofthemushroomsinordertoachievehigh

qualityandmaximumyieldfromthesaidareas.

InitsendMirak Groupisexportingmushroomsthroughout

Item Value,USD

Factory 3,598,193

Surroundingareaofbuilding 50,000

theGCCandAsia,andlookingtoexpandtotheSoutheast

Asia.Themushroomsarepackedin250gpunnetswith8

punnetsinacartonwithanetweightof2kg.

Buildingworks 400,000

Otherbuildingworks 125,000

Waterdrill 19,277

Road 38,554


Electricalgrid&transformer 33,735

Total 4,264,759

BIGAAGROGROUP

SWOTAnalysis

BIGAAGROGROUPThecompanypermanently paysattentiontotheimprovementofitsweaknessesbyusingitsstrengthsandopportunitiesinorderto properly overcome the threats

SWOTAnalysis

toproperlyovercomethethreats.Strengths Weaknesses

Mainshareholdersactivelyengagedinbusiness

management

Lackoffinancialresourcestofinancethepotential

growthofthebusinessmanagement

Stableandlongtermrelationswithforeignpartners

Existenceofadvancedgrowingtechnologiesand

automatedcontrolofproductionprocess

Brandrecognitioninlocalandforeignmarkets

g

Seasonalityofthestrawberry growingduetotheopenair

field

Opportunities

HighlysupportedbytheArmenianGovernment

High‐qualitytechnologiesandequipment

Professionally trained staff

Businesssynergiesand economiesofscaleduetothe

Availabilityofmorethan40hapotentialstrawberry

growingareasborderedwithexistingfarm

Hugepotentialinnewgulfmarkets(Kuwait,Saudi

Arabia,Qatar)

Easier export operations to new Customs union memberproductionvarieties

Dominantmarketshareinlocalstrawberrymarket

Diversifiedbusinessbothgeographicallyandby

realization

Professional international consultants and first hand

EasierexportoperationstonewCustomsunionmember

countries

IncreaseofthedemandforhighqualityGMOfreefood

OwnlandinArmavir regionforexpandingmushroom

andtomatoproduction Professionalinternationalconsultantsandfirsthand

marketinformation

Existenceofownpremises

ExistenceofshowroominYerevan

Presenceinmanyshopsandsupermarketslocallyand

Threats

Currencyratefluctuation

Competitioninforeignmarkets

f f bly p p y

internationally

CertificateofNon‐GMO production

Transportationissues incaseofexportofvegetables;

Emigrationofpopulation,whichleadstotheworkforce

fluctuationsanddecreaseof localmarketdemand


BIGAAGROGROUP

MainProducts

BIGAAGROGROUP

Strawberry Mushroom

MainProducts

TheCompanygrowsAlbion,PortolaandMonterey

strawberryvarieties.Eachplantprovides0.7‐1kgcrop

annually.Berriesaresweetflavored,redthroughout,

conicalandevenlyshapedwithahighpercentageoftop

TheCompanygrowsChampignontypeofmushrooms,

whichhaslargeconsumptionbothinlocalandforeign

marketsandiswidelyusedinlocalandforeigncuisines.

Mushrooms arecategorizedtothreesizes,bythediameter

qualityfruit.Thisvarietyisconsideredasdiseaseresistant

anddayneutralplantbyensuring10‐dayshelflife,which

makestheproductionmorecompetitiveintermsof

exportationandrealization.Thosespeciesproduceahigh

percentage of marketable fruit that are quite firm and even

ofthecap:small(3cm‐4.5cm),medium(4.5cm‐6cm)and

large(6cmandmore).Localmarketconsumesmainlylarge

andmediumcapmushroomswhileTheMiddleEast

consumesmainlysmallcapmushrooms.Market

diversification assures high prices for all produces whereaspercentageofmarketablefruitthatarequitefirmandeven

enduringprolongedwetspells.

diversificationassureshighpricesforallproduces,whereas

inArmeniathesmallcapsareconsideredasimmatureand

thusarepricedverycheap.

Tomato DecorativePlants

TheCompanygrowsCherry,Beefsteakand Standard juicy

tomatovarieties.Cherrytomatoesareslightlysmallerand

sweeterthanconventionaltomatoes.Theyareapopular

varietyoftomatoallovertheworld.Beefsteaktomatoes

l j i f f i f h f h

TheCompanyrunsbothindoorandoutdoordecorative

plantsimportationandtradingbusiness.

Overallmorethan100varietiesarepresentedtothelocal

marketbasedonspecificvolatiledemandchangingyear

Th l b i i d f H ll darelarge,juicytomatoesperfectforeatingfreshfromthe

harvest.Beefsteaksaretypicallywidetomatoes,butthe

moreroundtypeshaveasweeterflavor.

ACherryplantprovides 25‐30kg,andabeefsteakplant

provides 40‐50 kg crops annually. The highest figures of

overyear.TheplantsarebeingimportedfromHolland.

provides40 50kgcropsannually.Thehighestfiguresof

yieldwillbereachedbyusingthespecialenergyefficient

growinglights.


BIGAAGROGROUP

OperationsandProductionPlan

BIGAAGROGROUP

Description

ThestrawberryplantsarebeingpurchasedfromHolland,wheretheCompanyhasalongtermstrategicpartner,Vissers

OperationsandProductionPlan– Strawberry

Aardbeiplanten BV.

TheplantsarebeingseatintheendofAprilandthefirstharvestisbeinggatheredafter2months.Afterthefirstharvest on

dailybasistheharvestisgatheredbythecollectors.TheharvestseasonlaststilltheendofNovember.Eachplantproduces up

to1kgcrop,whichcanbeincreasedupto1.5kgwithin1‐2years,viatheimprovementofproductionprocess.Thestrawberry

f i h l i A i hi h h h h l i ll d i h I i l d h f f lifarmistheonlyoneinArmenia,whichhasapostharvesttechnologyinstalledinhouse.Itincludesthesystemoffastcooling,

whichallowsmaintaining“just‐picked”freshqualityofberries,facilitatesthe(easies)transportationandprolongsthelifespan

ofberriesbyextra10days.Theberriesgrowopenair,whichmakesthemexposedtothedirectsunlight,windandrainand

thusimprovestheplants’photosynthesisandabsorptionofoxygenthroughrain.Thepollinationiscarriedoutbyspecially

imported bees. Harvesting berries in special boxes located above 80cm ground level allows eliminating the risk of various

Currentlythe

businessowners importedbees.Harvestingberriesinspecialboxeslocatedabove80cmgroundlevelallowseliminatingtheriskofvarious

diseasesthatcanoccurbyberriesinteractingwiththesoilifgrownontheground.Italsoincreasesthecropcollection

efficiencybyworkersastheydonotbenttocollectthecrop.Closedcontrolledirrigationcircleinplacesaveswaterandreduces

quantityofmineralsubstancesused,resultinginabetterqualitycrop.Alltogether,thedetailedconsiderationandcontrolover

harvestingandpost‐harvestingprocessesextendstheberriesshelflife.

andspecialists

thinkabout

increasingthe

efficiencyand

Theforeignbuyerssendcompanyspecialiststo Armeniatotrainthelocalstaffeachyearfor2months.Theyalsofollowthe

cropcollectionprocessandthuscarryoutqualitycontrolprocessonsite.Thegatheredproductionispackagedinboxes,which

ensuretheproductsarenotdamagedduringthetransportation.Therealizationisbeingconductedbydrivers,whoarrange

transportationoftheproductsfromthefieldstotheAirportforexportortothelargesupermarkets.Tobenotedthatretailers

effectivenessof

strawberry

growing.

Particularly,special

b andbuyersofsmallervolumespurchasestrawberryrightfromthe field.potsaretobe

installedfor

constructing8‐level

growingareas

(overall 4 plants on


(overall4plantson

eachlevel).

BIGAAGROGROUP

Mushroom growingfactoriesarefurnishedwithequipmentimportedfromthewell‐knownproducerCHRISTAENSGROUPto

OperationsandProductionPlan– Mushroom

ensurehigh‐qualifiedproducts.Description

Thecompanyimports3rd phaseready‐to‐growmushroomcompost fromNetherlands.Othercomposts(Hungarian,Polish,

Armenian)testingshowedthatthebestprice/quality/quantityratioisprovidedbytheDutchcompost. Thecompostisbeing

placedontheshelvesandbeingirrigatedwithwaterenrichedwithfertilizers.Specialsystemsareinstalledtoallowpermanent

controloverthehumidity,airconditioningandtemperatureineachhall,wheretheshelvesarelocated.

Specialsoftwaresystemisinstalled,whichisusedtomonitorandcontroltheproductiveenvironment.Thesoftwareallowsthe

managertocontrolitremotelyviamobileorotherdevices.

Aspertechnologythefirstharvestofmushroomisbeingreceived12daysafterseeding.Actuallythefirstharvestisabout

248 8 k f th d ti Th d ti f th h t i i d ft 14 d Th th d h248,8kgpersqmoftheproductionarea.Thesecondportionoftheharvestisreceivedafter14days.Thegatheredmushrooms

arebeingpackagedinspecialboxesforfurthertransportationtoexportmarketsorlocalresellers.

Thereisafastcoolingsystemwhichisbeingutilizedforkeepingthegatheredmushrooms’freshproductlooktillits

transportation to the buyer.transportationtothebuyer.

Growingprocessesinmushroombusinessaremanaged,monitoredandcontrolledbyasoftwareproduct,developedby

FANCOMspecializedSoftwarecompany.Thesoftwareallowssettingtheindicatorsacceptablethresholdsandincaseof

deviationsfromthoselimitsspecialalarmsaresenttothecontroller.

TheCompanyhasownvehicleswhichareexploitedfortheproducttransportation.


BIGAAGROGROUP

Tomatogrowinggreenhouseisequippedwithhigh‐qualitytechnologiesincludinghydroponicanddripirrigationsystems.

OperationsandProductionPlan– Tomato

Description

ThetomatoseedsareimportedfromtheNetherlands.TheplantsareusuallyseatinJuly‐Augusteachyearandthefirstharvest

isgatheredfromSeptember,whichlaststillJune(nextyear).Overall50kgofstandardtomatoand25kgofcherrytomatois

being gathered per 1 sqm of the growing area annually For effective business management purposes July‐August is selectedbeinggatheredper1sqm ofthegrowingareaannually.ForeffectivebusinessmanagementpurposesJuly Augustisselected

asaperiodforplants’renewalgiventhatthemarketpricesareatthelowestlevelforthatperiod,thusitisnoteconomically

justifiedandeffectivetogrowtomatoingreenhousesduringthosemonths.Toarrangeproperpollinationwithinthe

greenhousesectionsspecialbee‐hivesarebeingused,whicharepurchasedfromBiobest BelgiumN.V.Thosebee‐hivesare

renewedevery6weeks.Overall8bee‐hivesareinstalledinthegreenhouseto“serve”thewholearea.Giventhefactthatthe

wholeharvestseasonis8months,thetotalquantityofbee‐hivespurchasedisabout30annually.Acorrectbalancebetween

macronutrientsandmicronutrientsisprovidedtoobtainthebestresultsfromtomatocrops.Awaterreservoirisinstalledin

thegreenhousewhichensurespermanentwatersupplytotheplants.Beforesupplythewaterisbeingenrichedwithfertilizers

andspecialmedicinesarebeingaddedtothewatertoeliminatetheriskofanypossiblediseases.

Specialsoftwaresystemisinstalledinthegreenhouse,whichallowstopreliminarilysetthresholdsforhumidity,air

temperature,daylights,etc.Incaseofanydeviationofthoseindicatorsspecialalertsarebeingsenttothestaffmembers for

preventiveorcorrectiveactions.Inthecurrentstagethebusinessownersintendtoinstallspeciallamps,whichwillensure

properlightinginthegreenhousethusencouragingtheplantsgrowfasterandmoreeffectively.Thiswillalsoleadtothe

decrease in gas utilization expenses by c 25% There is also a special water tank located in the greenhouse where the water isdecreaseingasutilizationexpensesbyc.25%.Thereisalsoaspecialwatertanklocatedinthegreenhousewherethewateris

beinggatheredduringdaytimewhichinthenighttimeisusedtoreducegasutilizationexpenses.TheGreenhousehasitsown

heatingsubstation,whichcanindependentlyprovideheatingtothewholegreenhouseincaseoftheinterruptionofgassupply,

basedondieselengine.

Theharvestisbeinggatheredondailybasisandimmediatelytransportedtotheresellersandotherbuyers.Someportionofg g y y p y p

theharvestisbeingcollectedbythebuyersthemselves.


BIGAAGROGROUP

Eachplant hasitsowngrowingcyclewhichdirectlyimpactstheproductionvolumesandcashflowsofthewholebusiness.Totalareaof

ProductivityPerCropType

Annual yieldspersquaremeterforeachcroptype(kg/sqm)strawberrygrowingis

arrangedonthefields

of15hectares.

Type Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Tomatoisharvestedon

10,000sqmgreenhouse

comprisingoftwo5,000

sqm sections one for

Type Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Strawberry N N N H H H H H H H H N

Tomato H H H H H H N N H H H H

Mushroom H H H H H H H H H H H Hsqmsections,onefor

Beefsteaktomatoesand

theotheronefor

Cherry.

Plants H H H H H H H H H H H H

H– HarvestSeasonN– NoHarvest

TheMushroom

productionplantisin

thesamelandplotwith

tomatogreenhouseand

Product Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Strawberry‐500k plants 0 0 0 0 0 50 50 50 70 80 50 0 350

( f k) 40hasareaof1,000sqm,

withproductive

shelvesof2,880sqm.

Tomato(Beefsteak)m2 3 3 3.5 7 7 5.5 2.5 0 0 1 3 4.5 40

Tomato(Cherry)m2 1.9 1.9 2.2 4.4 4.4 3.5 1.5 0 0 0.6 1.9 2.7 25

Mushroom–m2 16,2 20,2 24,7 24,7 24,7 24,7 13,5 13,5 13,5 24,7 24,7 24,7 250


BIGAAGROGROUP

ToensurethequalityoftheproductsisproperlysatisfyingthestandardsandiswithintheacceptableframeworktheCompany

QualityAssuranceandControl

conductsregularqualitycheckprocessesQualityAssurance Actions

Onmonthlybasisthewater utilizedintheproductionprocessesoftomatogrowingcyclesissenttotheNetherlandstoget

th l b t ltthelaboratoryresults.

Onmonthlybasisthestatisticaldataregardingtheweatherconditionsandthequalityoftheproductreceivedareanalyzed

torevealtheimpactofweatherconditionsonthequalityandquantityoftheharvest.

Plantsofstrawberry(Vissers Aardbeiplanten BV),compostformushroomgrowing(Walkro InternationalBV/alsofrom

theirsubsidiarycompany‐ DTO/)andseedsoftomato(fromthegrowers)arebeingpurchasedfromtheNetherlands.t e subs d a y co pa y O/) a d seeds o to ato ( o t e g o e s) a e be g pu c ased o t e et e a ds

Cocopeatisbeingpurchasedfromawell‐knowncompany,locatedinSriLanka.

Cardboardbox“beehives”arepurchasedfromBiobest BelgiumN.V.,whichhasagoodreputationinitsfield.

Mirak Group,strategicpartneroftheCompany,conductsregularvisitstotheproductionpremisesbyanalyzingthe

productionandharvestgatheringprocesses.

Dailymonitoringandcontrollingactivitiesarebeingconductedbythestaffinthelocalworkstationsandproduction

facilities.

Thecomputersystemsallowsettinguprequiredsettingstomanagetheclimatewithinthegreenhousesbyautomatically

changingtheinternalclimatedependingonexternalweatherconditions,i.e.sun,light,wind,etc.


BIGAAGROGROUP

MarketingPlan

BIGAAGROGROUP

CurrentstrategyofRAgovernmentismostlyinclinedtoencouragethedevelopmentofforeigninvestmentandfoster

IndustryAnalysis

Overall11,406.03tonesof

freshfruitsandvegetables

businesscooperationwithforeigncompanies.MacroeconomicHighlights ExportStatisticsbyProductTypes3

Currentlytheagriculturesphereisoneofthevitalareasof

th l l

wereexportedfrom

ArmeniaasofMarch20,

2014,againstthe3,312.64

tonsinthesameperiodlast ProductType

Year Volume,tones

Amount,USD’000thelocaleconomy.

Thisstrategyhasafundamentalroleforthefulluseoflocal

economicpotential.

Inrecentyearstheagriculturalindustryhasbeenensuring

about17%ofGDP,which,combinedwiththeshareofagro

year4.yp

Tomato 2010 898 559

2011 113 66

2012 66 55

2013 734 2,149Country Volume,Tones

G i 8 815 58 about % o G , c , co b ed t t e s a e o ag o

processing,resultsinc.23%ofGDP.1

About97%ofagriculturalproductionisprovidedby

privatesector.

Current Trends

Mushroom 2010 531 285

2011 660 587

2012 830 1,293

2013 1 347 2 284

Georgia 8,815.58

RF 2,486.97

Iraq 66.72

UAE 36.60

Uk i 0 16 Current Trends

Giventhesmallsizeofthelocalmarket,developmentof

industrialagricultureinArmeniaislargelycontingenton

theexportpotential.

There are c 900 greenhouses in the country in 2013 with

2013 1,347 2,284

Berry 2010 72 52

2011 74 69

2012 414 770

Ukraine 0.16

Total 11,406.03

Therearec.900greenhousesinthecountryin2013with

totalareaofabout130hectares.Thelargestgreenhouseis

5hectares.

About60%oftheiroutputsarevegetables– tomatoes,

cucumbers,beansandpeppers,and40%areflowersand

2013 323 596

Flowers 2010 26 81

2011 50 136

2012 202 1,447

ornamentalplants2.

Source:(1)http://www.minagro.am;(2) http://arka.am;(3)http://armstat.am (4)http://news.am page

2013 307 2,199

BIGAAGROGROUP

The Companysellsitsproductsbothinlocalandforeignmarkets.TheexportmarketincludesmainlyUAEandRF.

MarketDescription

The whole business can be

Strawberry Mushroom

Localmarketcapacityofstrawberryisalmost200tons

annually,whichisprovidedmostlybytheCompany(c.

85%) and a number of small local household producers

IntermsofMushroomgrowingandrealizationcurrently

theCompanyhassolidmarketpositionbybeing

represented in all large supermarket chains and shops

Thewholebusinesscanbe

describedasexport‐oriented

andwelldiversified.

85%)andanumberofsmalllocalhousehold‐producers

(c.15%).In2013,morethan50%oftheproduced

berrieshavebeenexportedtoDubai,UAEandRussia,

whiletheresthasbeenconsumedlocally.

Local sales are conducted mainly via major supermarket

representedinalllargesupermarketchainsandshops.

AspertheCompany’scalculationshalfoftheproductionis

consumedinlocalmarket,whichassuresc.50%oflocal

marketvolume.

TheremainingpartofproducedmushroomisexportedTheexportmarketincludesLocalsalesareconductedmainlyviamajorsupermarket

chainsandwholesalers,throughwhichtheCompany’s

productionisdelivereduptolocalcornershops.

mainlythroughMIRAKGROUPtoCarrefour,Waitroseand

Spinney'ssupermarketchainsinMiddleEast.

Tomato DecorativePlants

Dubai,UAE,wherethe

Companysellsthroughits

mainpartnerMIRAKGROUP

andtheRussianFederation,

h TomatogrownbytheCompanyishistoricallyrealizedin

localmarket.However,thebusinessownershave

preliminaryintentionstoarrangeexportationof

tomatoesstartingfromRussianmarket.

Decorative plantstradingbusinessiscomparativelynewfor

Armeniaandcurrentlytherearenomanylargeplayersin

thismarket.

whereBIGALLCcooperates

withAGRIKONLTD.

Given the diversification of the whole business the Company’s main clientele consists of both corporate


(wholesale) and individual (retail) customers. Furthermore, the Company realized the production in local andforeign markets. Currently proper arrangements are in process to get certification of organic production, whichaims to strengthen the Company’s market positioning.

BIGAAGROGROUP

Strawberry andMushroomarebeingexported,whileTomatoandDecorativePlantsarefullyrealizedinlocalmarket.

MarketDescription

Strawberry Mushroom

TheCompanyhas245tonesmaximumcapacityof

strawberryproductiononannualbasis.Basedonthe

market demand the Company has selling potential up to

TheCompanyhas720tonesmaximumcapacityof

mushroom productiononannualbasis.

Note that the market is also introduced with canned

Russianmarketfor

strawberrysupplyhas

noseasonality. marketdemand,theCompanyhassellingpotentialupto

1,000tonsperseason,mainlytoUAEandRussia.MIRAK

Groupisreadyandwilingtoensure1,000tonesofannual

purchaseofstrawberry.

NostrawberryharvestisgatheredduringApril–September

Notethatthemarketisalsointroduced withcanned

mushroomproducts,whichtakesomemarketshare.

AmongthemainplayersBONDUELLEcanbementioned.

Dubaimarketis

attractiveforApril‐

Septembereachyear.

inDubai.Forlocalmarketitistypicalthatthepricesare

veryattractiveandbeneficialduringOctober‐November

months.

MainCustomers

SalesStructure:Localvs.Export

ClientName Location Products Payment

Methodp

Mirak Group Dubai,

UAE

Strawberry

Mushroom

100days

after

shipment

Agrikon LTD RF Strawberry In cash60%70%80%90%100%

Agrikon LTD RF Strawberry Incash

Supermarket

Networks

Local,

Armenia

Tomato

Mushroom

60days

after

shipment0%10%20%30%40%50%

Strawberry Tomato Mushroom Plants


Individuals Armenia Plants IncashStrawberry Tomato Mushroom Plants

Foreign Local

BIGAAGROGROUP

The Companysellsitsproductsbothinlocalandforeignmarkets.TheexportmarketincludesmainlyUAEandRF.

Competition

Tomatopricesdepend

Strawberry Mushroom

Duetoitslargesizeandexistingproductionfacilitiesthe

Companyhasnocompetitorinlocalmarketintermsof

strawberry production

TheCompanyhassolidmarketpositionbybeing

representedinalllargesupermarketchainsandshops

locally As per the Company’s calculations half of the

ontheseasonal

availabilityandthe

qualityoftheproduct.

This also emphasizes the strawberryproduction.

Thereareonlysmallfarmerswithlittleproduction

volumes.

However,thelocalfarmerscanpartlycompetewiththe

Companyonlyinhighseasons(1‐2months),byensuring

locally.AspertheCompany scalculationshalfofthe

productionisconsumedinlocalmarket,whichassuresc.

50%oflocalmarketvolume.

TheCompanyhascompetitorsinmushroombusiness

line,asthereareseverallargeandsmallmushroom

Thisalsoemphasizesthe

competitioninsummer

seasons,whenthesmall

farmersalsoenterintonocompetitioninautumnmonths.

ArmenianHarvestPromoting Centeralsoenteredinto

market.

growersinArmenia.ThemaincompetitorisAROGHJSUNK

Company(translatedfromArmenian“HealthyMushroom”).

InDubaimarkettheCompanycompeteswithGulf

MushroomProductsCo.(S.A.O.G),whichalsoenjoysgoodTomato

thelocalmarketby

introducingtheir

harvest.Furthermore,marketreputationbytakingcertainmarketshare.

Thereareseverallargeandsmalltomatogrowing

greenhousesinArmeniaandtheCompanyhasthe

relativelyhighercompetitioninthisregard.

MaincompetitorsintomatomarketareMAVASGROUPand

DecorativePlants

RegardingdecorativeplantsbusinesstheCompany’smain

localmarketis

introducedwith

importedstandardp

GIOGROUP.competitorinArmeniaisBRABIONFloraServicewiththeir

businesslinecalledABIO.tomato,mainlyfrom

TurkeyandIran. Competitor Area, hectares Location

MAVAS Group 4.2 Dzoraghbyur , Kotayq


BIO Group (to

be constructed)

10.7 Jrvezh, Kotayq

BIGAAGROGROUP

BusinessDevelopment Plan

BIGAAGROGROUP

Atthecurrentstageofbusinessdevelopmentthecompanyhasintentionstoexpandtheproductioncapacities hence

BusinessDevelopmentPlan

EXPANSIONPLAN

Anewgreenhouseof5

encouragingsalesandrealizationvolumesbyalsoenteringintonewmarkets.High‐level Overview Estimated InvestmentsBreakdown

hectaresforstrawberry

growingisplannedto

establish,containing

750,000plants.The

planting area is sed 3 TheCompanyintendstoexpandstrawberry growing

areas. Itisplannedtopurchasenewlandplots(5hectares)

adjacenttotheexistingstrawberryfields, constructanew

greenhouse,aswellastorenewthewholeplantsof

strawberry coco peat and fertilizers The planned

plantingareaisused3

timesmoreeffectively

comparedwithopenarea

fields

Openarea5ha

Item Total,USD’ml

n

BIGA EBRD

Strawberry‐ New 12.2 1.7 8.3Mushroom‐ New 4.2 0 4.2Tomato ‐ New 2 7 0 2 7strawberry,cocopeatandfertilizers.Theplanned

greenhousewillprolongtheharvestperiodfor

strawberries.

Thenewmushroom growingplantwillbeconstructed

nearthecurrentplantsbydoublingtheproduction Comments on Investments

p

strawberryfieldswith

smallgreenhousefor

seed‐ plantgrowingon5

hawillbeestablished

Tomato‐ New 2.7 0 2.7HangarConstruction 0.2 0 0.2Lamps–Tomato 0.3 0 0.3Plants 0.3 0 0.3Total* 19.9 1.7 16

p y g p

capacities. Furthermore,ahangaristobeconstructednear

themushroomgrowingplantscoveringtotalareaof40x12

sqm.

The newtomato growinggreenhousewillbeconstructed

CommentsonInvestmentscontaining150,000plant

Anewmushroom

growingplantwillbe

constructednearthe

AfterimplementationofsubjectbusinessplantheCompany

willhave:

5,760sqmmushroomgrowingareawithproduction

i f 4 h d iladjacenttotheexistingfacilitiesbysignificantlyincreasing

theproductivity.Notethatspeciallampsaretobeinstalled

intheoldandnewgreenhouses toensureextrahigher

yield of25‐30%.

existingplants.

Anewgreenhousefor

tomatogrowingwillbe

constructednearthe

current one (10 000

capacityof4tnmushroomdaily;

1,250plantsofstrawberrywithaverageannual0,85kg

yieldperplant(existingopenarea350,000+newopenarea

150,000+newgreenhouse750,000);

20 000 sqm tomato growing area with the following


currentone(10,000

sqm).

20,000sqmtomatogrowingareawiththefollowing

productivity:

(i)Cherry‐3Okgpersqm(ii)Beafstick‐50kgpersqm

*Notethatcashinflowsgeneratedfromtheoperational

activityaretobeinvestedinthebusiness:c.USD2.7mln

BIGAAGROGROUP

FinancialPlan

BIGAAGROGROUP

Tomakethefinancialanalysismoreclearthefollowingmainassumptionsaretobeconsidered.

FinancialProjections

600

MainAssumptionsforProjections Financial Model– Content

Depreciationiscalculatedonastraight‐linebasis.

The following terms are used in amortization

Assumptions

GrowingArea/NumberofPlants

Productivity per season400

450

500

550

Thefollowingterms areusedinamortization

calculations:

Land– 20years

Buildings&Property– 20years

Equipments‐ 10years

Productivityperseason

Salespermarket,kg

Pricespermarket,USD

SalesUSD

Inputperkgofcrop

300

350

Dec‐10

May‐11

Oct‐11

Mar‐12

Aug‐12

Jan‐13

Jun‐13

Nov

‐13

EUR USD OtherAssets– 14years

Currency ExchangesRateusedincalculationsare:

USD/AMD=415

EUR/USD=1.39

Annualperkgofyieldcostcalculation

COGS

DirectMaterialsandInputsCalculationsperkg

Payroll

EUR USD

Salesprojections arecalculatedconsideringlocaland

exportprices.

COGSforeachproductwascalculatedtomakerealistic

calculations and projections

Assets

Loans

ProfitandLossStatement

CashFlowStatement

Balance Sheet

TheFinancialModel

containsinformation

abouttheyieldand

l d i calculationsandprojections.

Payrollcalculationsarebasedonthenumberof

monthseachpositionworksannually.

VATisnotincludedintheModelconsideringthefact

thatVATreceivedisalwayslessthatVATpaid(the

BalanceSheettotalproducingareas.

CompanyisimportingmaterialswithVATandgetVAT

backasanexporter)


BIGAAGROGROUP

Both companieshavebeengrantedwithloansbycommercialbanksandareproperlyservedinlinewithrepaymentschedules.

FinancialRequirements,CreditHistory

OutstandingPortfolioSt t b C i

MainIntentions CreditHistory&LoanPortfolio

CurrentlytheCompanyislooking forastrategicpartner

financialinstitutiontoattractfinancialresourcesforthe

expansion of the business

TheCompanyhasattractedloanfacilitiesfromcommercial

banksinArmenia– Ameria BankandIneco Bank.

Loan exposures of both companies have been historically

AMD,26%

EUR,53%

StructurebyCurrencies

expansionofthebusiness.

EBRDisconsideredasoneofthepotentialpartners.

Mezzaninefinancingmaybeappliedtosuccessfully

implementthesubjectexpansionplan.

Thefinancialresourcesanticipatedtobeattractedaretobe

Loanexposuresofbothcompanieshavebeenhistorically

servedinlinewiththerepaymentscheduleswithnodelays

intermsofrepaymentschedules.

Thefirstloanwasgrantedin2010.

Theexistingloansofbothcompanieswereadjustedwith

USD,21%

fullyutilizedforbusinessexpansionpurposes. exchangeratestogetthewholeportfolioinUSD.

CBArateswereusedforcalculations.ActualLoanServiceHighlightsFinancialRequirements

Currency InitialBalance Outstanding RepaidPortion

Item m/u Value

Amount USD 16,000,000

AIR % 6%

Year LoanReceived,

USD

2010 240,964

2011 3 894 578

AMD 800,000,000 532,567,458 267,432,542

USD 1,200,000 1,049,115 150,885

EUR 2,695,000 1,898,095 796,905

15.00% 12.5319%Term Months 24

Note:*Loanof16mln.isconsideredtobeconvertedintoequity in2016.Only interestwillbepaidduring2yearspriortoconversion.

2011 3,894,578

2012 1,544,277

2013 1,181,928

0.00%

5.00%

10.00%10.0000% 9.0843%


p o to co e s oAMD USD EUR

Blended Average Rate per Currency

BIGAAGROGROUP FinancialProjections– BalanceSheet,USD’000

Item

Historic Projections

2012 2013 2014 2015 2016 2017 2018

ASSETS

TotalCurrentAssets 180 1,903 938 6,806 12,959 20,312 28,036FixedAssets 9,874 9,424 28,507 27,005 25,503 24,001 22,500(Less)AccumulatedDepreciation ‐ 544 ‐ 517 ‐ 1,502 ‐ 1,502 ‐ 1,502 ‐ 1,502 ‐ 1,502N Fi d A

Detailed

informationis

presentedinthe

FinancialModel,NetFixedAssets 9,330 8,907 27,005 25,503 24,001 22,500 20,998

TOTALASSETS 9,510 10,810 27,943 32,309 36,961 42,812 49,034

LIABILITIES

TotalCurrentLiabilities 180 330 367 780 782 798 798T l L T Li bili i

beingpartofthis

businessplan.

TotalLong‐TermLiabilities 4,566 4,664 19,351 17,911 669 157 ‐TOTALLIABILITIES 4,746 4,993 19,718 18,690 1,451 954 798

NETWORTH

Owners'Investment 5,012 5,106 6,806 6,806 6,806 6,806 6,806Sh C it lShareCapital 0 0 0 0 16,000 16,000 16,000RetainedEarnings ‐ 249 710 1,418 6,812 12,703 19,051 25,429TOTALNETWORTH 4,763 5,816 8,225 13,619 35,509 41,857 48,235

40 00050,000 60,000

‐10,000 20,000 30,000 40,000

2012 2013 2014 2015 2016 2017 2018



TOTAL ASSETS TOTAL LIABILITIES TOTAL NET WORTH

BIGAAGROGROUP FinancialProjections– AssetsBreakdown,USD’000

Item


2012 2013 2014 2015 2016 2017 2018ASSETSASSETSCurrentAssets

Cash 71 1,575 550 6,006 12,157 19,494 27,217

AccountsReceivable 36 66 73 156 156 160 160

Inventory 73 262 314 644 646 658 659

Detailed

informationis

presentedinthe

FinancialModel,

TotalCurrentAssets 180 1,903 938 6,806 12,959 20,312 28,036FixedAssets

Land 1,128 1,072 1,268 1,205 1,141 1,078 1,015

Property 7,559 7,251 25,239 23,977 22,715 21,453 20,191

beingpartofthis

businessplan.

Equipment 884 796 1,216 1,095 973 851 730

OtherAssets 303 305 784 729 674 619 564

Subtotal 9,874 9,424 28,507 27,005 25,503 24,001 22,500

(Less)AccumulatedDepreciation ‐ 544 ‐ 517 ‐ 1,502 ‐ 1,502 ‐ 1,502 ‐ 1,502 ‐ 1,502

NetFixedAssets 9,330 8,907 27,005 25,503 24,001 22,500 20,998

TOTALASSETS 9,510 10,810 27,943 32,309 36,961 42,812 49,034

40,000 50,000 60,000

60%80%

100%

15 00020,000 25,000 30,000

‐10,000 20,000 30,000

2012 2013 2014 2015 2016 2017 2018

0%20%40%

2012 2013 2014 2015 2016 2017 2018


‐5,000 10,000 15,000

2012 2013 2014 2015 2016 2017 2018




Current Assets Fixed Assets TOTAL ASSETS


Other Assets EquipmentProperty Land


Land PropertyEquipment Other Assets

BIGAAGROGROUP FinancialProjections– IncomeStatement,USD’000

ItemHistoric Projections2012 2013 2014 2015 2016 2017 2018

SalesRevenueDetailed

informationis

presentedinthe

Financial

Strawberry 175 1,225 1,750 6,460 6,460 6,460 6,460Raspberry ‐ 180 180 180 180 180 180Tomato‐ Standard 352 540 390 975 975 975 975Tomato‐ Cherry 360 375 1,350 2,700 2,700 2,700 2,700Mushroom 1 560 2 880 2 880 5 760 5 760 5 760 5 760Model,beingpartof

thisbusinessplan.

Mushroom 1,560 2,880 2,880 5,760 5,760 5,760 5,760TotalSales 2,447 5,200 6,550 16,075 16,075 16,075 16,075COGSDirectmaterialsandinputs 1,436 2,653 2,796 6,040 6,040 6,040 6,040Strawberry 190 176 117 294 294 294 294Raspberry 59 59 143 285 285 285 285Raspberry 59 59 143 285 285 285 285Tomato‐ Standard 40 277 396 1,203 1,203 1,203 1,203Tomato‐ Cherry ‐ 23 23 23 23 23 23Mushroom 1,147 2,117 2,117 4,235 4,235 4,235 4,235Directlabor 254 254 343 429 429 429 429Strawberry & Raspberry 139 139 192 239 239 239 2395,000

6,000

7,000

Strawberry&Raspberry 139 139 192 239 239 239 239Tomato‐ StandardandCherry 40 40 52 65 65 65 65Mushroom 75 75 100 125 125 125 125TotalCOGS 1,690 2,907 3,140 6,469 6,469 6,469 6,469GrossProfit 757 2,293 3,410 9,606 9,606 9,606 9,6062,000

3,000

4,000

SGAexpenses 93 110 125 125 125 125 125EBITDA 664 2,183 3,285 9,481 9,481 9,481 9,481InterestCommercialbanks 369 466 418 277 136 44 7InterestEBRD ‐ ‐ 480 960 480 ‐ ‐Depreciation 544 517 1,502 1,502 1,502 1,502 1,502

‐1,000

‐

1,000

2012 2013 2014 2015 2016 2017 2018



EBT ‐ 249 1,199 885 6,742 7,363 7,935 7,973Taxes ‐ 240 177 1,348 1,473 1,587 1,595NetProfit ‐ 249 959 708 5,394 5,891 6,348 6,378

j

Net Profit

BIGAAGROGROUP FinancialProjections– CashFlowStatement,USD’000

Item


2012 2013 2014 2015 2016 2017 2018

C h t b i i f i d 71 1 575 550 6 006 12 157 19 494Detailed

informationis

presentedinthe

Financial

Cashatbeginingofperiod ‐ 71 1,575 550 6,006 12,157 19,494

Cashflowfromoperatingactivities

Cashreceiptsfromcustomers 2,447 5,200 6,550 16,075 16,075 16,075 16,075

Cashpaidtosuppliersandstaff ‐1,783 ‐3,017 ‐3,265 ‐6,594 ‐6,594 ‐6,594 ‐6,594

Netcashfromoperatingactivities 664 2,183 3,285 9,481 9,481 9,481 9,481Model,beingpartof

thisbusinessplan.

p g

Cashflowsfrominvestingactivities

Land ‐ ‐ ‐250 ‐ ‐ ‐ ‐

Property ‐2,452 ‐71 ‐18,350 ‐ ‐ ‐ ‐

Equipment ‐420 ‐ ‐500 ‐ ‐ ‐ ‐

Plant ‐77 ‐23 ‐500 ‐ ‐ ‐ ‐

Netcashusedininvestingactivities ‐2,948 ‐94 ‐19,600 ‐ ‐ ‐ ‐

Cashflowsfromfinancingactivities

InvetmentfromShareholdersinWC 2,000 ‐ 1,700 ‐ ‐ ‐ ‐

Proceeds from issue of share capital ‐ ‐ ‐ ‐ 16 000 ‐ ‐

25,000

30,000

Proceedsfromissueofsharecapital ‐ ‐ ‐ ‐ 16,000 ‐ ‐

ProceedsfromEBRDLoan ‐ ‐ 16,000 ‐ ‐ ‐ ‐

ConvertingofEBRDloanintoequity ‐ ‐ ‐ ‐ ‐16,000 ‐ ‐

PaymentofinterestonEBRDLoan ‐ ‐ ‐480 ‐960 ‐480 ‐ ‐

ProcedsfromBankloans 1,544 1,192 ‐ ‐ ‐ ‐ ‐10,000

15,000

20,000

Paymentoflong‐termborrowings ‐820 ‐1,070 ‐1,335 ‐1,440 ‐1,241 ‐513 ‐157

Interestsonlong‐termborrowings ‐369 ‐466 ‐418 ‐277 ‐136 ‐44 ‐7

Paymenttobudget ‐ ‐240 ‐177 ‐1,348 ‐1,473 ‐1,587 ‐1,595

Netcashusedinfinancingactivities 2,355 ‐585 15,290 ‐4,025 ‐3,330 ‐2,144 ‐1,758

‐

5,000

2012 2013 2014 2015 2016 2017 2018

Hi t i P j ti


Netcashflow 71 1,504 ‐1,025 5,456 6,151 7,337 7,723

Cashattheendofperiod 71 1,575 550 6,006 12,157 19,494 27,217


Cash at the end of period

BIGAAGROGROUP

RiskAnalysis

BIGAAGROGROUP

TheCompanypaysproperattentiontotherisksassociatedwiththebusinessandpermanentlyensurespropermitigation

RiskAnalysis

mechanismsandactionstobeinplace.RiskMatrix

Giventhediversified

nature of the business

RiskType Level Description

Mediumnatureofthebusiness

includinglocaland

foreignmarkets,aswell

aspermanent

consultanciesand

Generaleconomicenvironment Medium Giventhattheonlystrawberryfieldsareinopen‐airarea,whichistobemitigated bygreenhouseconstruction.

Political/regulatory Low ThewholebusinessisnotrelatedtopoliticalpersonsandoperatesinitsnormalwayregardlessthepoliticalchangesinArmenia.

Lowadvisoryprovidedby

theirstrategicpartners

theriskscanbe

consideredmitigated.

Changesinpublicopinion Low TheCompany’sproductshavegoodreputationinthemarket.

BuyerRisk Low TheCompany’sproductsarebeingrealizedbybothcorporateandindividualclientslocatedinlocalandforeignmarkets.

SupplierRisk Low TheCompanyhaslonglastingandstablerelationshipwiththesuppliersof Thebusinessowners

areactivelyengagedin

strategicmanagement.

Nokey‐manriskexists

equipment,seeds,technologicalassistance,etc..Eachproductionfacilityisequippedwithownsubstationtoensureheatingincaseofinterruptionofgasandelectricitysupply.Specialwaterreservoirsarelocatednearthefieldstoensurepermanentwatersupply.

Technological Low Thebusinessprocessesarebeingpermanentlymonitoredandcontrolledbyforthebusiness.

g p g p y youtstandingexpertsinthefields,includingvisitstofieldsandproductionpremises,controloverthequality,etc.

Lawsuits Low Therearenolegislativerestrictionsandbarrierstooperateinthesubjectarea.TheCompanyhasproperdocumentationregardingexportationprocesses.

M di


Staffing Medium TheCompany’smanagementhighlyemphasizesstaffmanagementissuesandmotivationsystemtoensurelowlevelofstafffluctuation.Mainlyurbanpopulationisbeinghiredtowork.

BIGAAGROGROUP

The subjectbusinessplanispreparedbyShirakamut ConsultingCompany.

SHIRAKAMUTCONSULTING

AboutShirakamut Consulting CustomerDetails

SHIRAKAMUT ConsultingCompanyoperatesinconsulting

marketsince2008.Thecompanyisspecializedinthe

sphere of business and strategic planning as well as offers

Sphere: Agriculture

Registration 24.02.2005sphereofbusinessandstrategicplanning,aswellasoffers

suchserviceslike:taxandmanagementaccounting,loan

managementandconsulting,investmentplanningand

financialanalysis.

Date:

RegistrationNumber

26411007131

TaxID: 00089298

ContactDetails

ImportantDisclaimerName SHIRAKAMUTCONSULTINGCOMPANY

LegalAddress: 36/3N.Zaryan Str.,Yerevan,Armenia

Thesubjectbusinessplan,includingthefinancialmodel,is

preparedbySHIRAKAMUTConsultingCompanybythe

orderofBIGAARMENIAN‐HOLLANDJOINTVENTURELLC.

Thefinancialmodelattachedtothisbusinessplanisowned

COMPANYWeb‐page www.shirakamut.am

E‐mail [email protected]

Address Room 201 26/3 V Sargsyan YerevanbyShirakamutConsultingCompany.

Theinformationcontainedinthisdocumentishighly

confidentialandcanbeusedonlybypermissionofBIGA

ARMENIAN‐HOLLANDJOINTVENTURELLC.

Address Room201,26/3V.Sargsyan,Yerevan

Tel.No: +(374)10581807


bigaarmenian dutchjvllc expansion business plan

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