zvirimwa group projects on: heyshott farm, kia ora flowers, florinova, irmaos enterprises &...
TRANSCRIPT
ZVIRIMWA GROUPProjects on:
Heyshott Farm, Kia Ora Flowers, Florinova, Irmaos Enterprises &
Bloomfield Farm
MAZOWE, ZIMBABWE
About Us
• A collection of aligned Zimbabwean companies– Based on corporate farming– Focusing on export production roses,
horticulture and food crops• Export markets in EU, USA, Asia and
South Africa• Five farming operations form the
base of the supply chain• Freight logistics & marketing• Manage entire cold chain from field
to customer• Up to 5,000 jobs to be created
SME Out-grower Program
• A vital part of the expansion of Zvirimwa
• Designed to enable small-scale and inexperienced farmers to access critical expertise and international markets
• Each of the farming units manages out-growers ensuring the produce supplied to the international markets conforms to numerous global certified standards
Zvirimwa Group Dynamics
Zvirimwa (Pvt) Ltd
John Sole Management
Establishment of funding, production and
linkages to markets
Marketing & Logistics
International Markets
Heyshott & Out-growers
Florinova & Out-growers
Kia Ora & Out-growers
Produce supply HUBS
Bloomfield & Out-growers
Irmaos & Out-growers
Future HUBS & Out-growers
Zvirimwa Supply Chain
Grower Pack house
Export consolida
tionFreight
Import and
clearing
Market supplier
and consolidator
Super market Consumer
HEYSHOTTKIAORA
FLORINOVABLOOMFIELD
IRMAOSOUT-GROWERS
Export Market
• Wholesale Market– Volume & price sensitive– Weekly market trade
• Retail Market– Supermarket, discount trade
growing – Year-round supply of product
lines– Certification requirements
• GlobalGAP, MPS-A, Fairtrade, Sedex
– Traceability from field of origin
Zimbabwe in the Market
• Kenya is the powerhouse of African export and supply to European markets, – from a parity position in the late 1990’s with
Zimbabwe – Today, 3 dedicated freighter flights a DAY out of
Nairobi vs. 3 shared freighter flights a WEEK out of Harare.
• Zimbabwe, along with Ethiopia, Uganda, Morocco and Zambia, plays a significant role in supplying market windows or product lines.
Opportunity
• In the last 2 years UK retailers more accepting of Zimbabwean product– Kenya has lost some of it’s positive shine
in the world press – perception is important!
• Example: Mange Tout and snap peas– Desired from Southern Africa between
April and October.– Kenya struggling with MRL (chemical
residue) and duty (NPA) issues.– Definite shift in ordering from ZW,
airfreight kg significantly up year on year (approx 30% per annum last two years)
Current - Horticulture
• European and UK vegetable consolidators are giving the Group an opportunity to supply:– Mange Tout and Sugar Snap Peas in winter – Baby Corn in summer
• Last year a total of 350 tonnes of Mange Tout and Sugar Snap Peas were supplied
• For 2015 the group has secured:– a 650 tonne off-take agreement for Mange Tout and
Sugar Snap Peas with Van Oers United – A contract to supply 300 tonnes of Mange Tout and
Sugar Snap Peas to Safari Fresh and Lonrho Fresh – Renewed supply contracts to SIIM International in
France and Jacana Produce in the UK from last season
Current - Roses• Increased demand from our established
markets– 42 million stems sold in 2013-14– Over 46 millions stems to be sold this season.
• Global Flower Trading BV– Increase demand for specific packed at
source colour-mix bunches of >3.2cm bud-size, with Fairtrade certification direct to Dutch supermarket Jumbo.
• PMC Holland BV– Consistent sales of intermediate roses year
round.• Floflora (Pty)
– Increase direct sales to Spar and Pick n Pay for pre packed roses in sleeves with flower food.
Current - Food Crops
• Through JV partnerships with adjacent land holders, utilising infrastructure, equipment and management from group farms, the food cropping has increased as follows:– 2011-12 180 ha– 2012-13 220 ha– 2013-14 250 ha– 2014-15 550 ha
• Seed maize 50 ha• Soya 250 ha• Maize 250 ha
Expansion
• Zvirimwa plans to expand in the next 5 years by adding the following to its portfolio:– 47 ha roses– 300 ha export horticulture– 4,000 ha food crops
• Total funds required in proposal: US$16 million– Roses US$7.8 million– Horticulture US$2.2 million– Food crops US$4.8 million– Livestock US$1.2 million
Expansion - Roses
• 9 hectares per annum, for three consecutive years– 5ha (Bloomfield), 2.5ha (Heyshott), 1.5ha (Florinova) in 2015– Further 18ha across the 3 sites (9ha 2016; 9ha 2017)
• Plus 20 ha on Bloomfield (10 ha 2018, 10 ha 2019)
• Capital requirements US$7.8 million– Greenhouses $3,760,000– Plant material $1,374,750– Greenhouse Plastic Sheeting $846,000– Royalty first installment $716,000– Irrigation $564,000– Construction & Preparation
$517,000– Horticultural Equipment $112,000
Expansion – Horticulture
• Export horticulture is to grow by an additional 60 ha/annum for 5 consecutive years from 2016 to 2021
• Expansion will be centred at Bloomfield, Heyshott, Kia Ora, Florinova, Irmaos and surrounding SME out-growers
• Capital requirements US$2.2 million– Irrigation & Centre pivots$675,000– Tractor and implements $510,000– Trellis equipment $360,000– Refrigerated trucks $270,000– Packing and cold facilities $105,000– Pick up trucks $88,000– Fertigation systems $75,000– Grading equipment $63,000– Generators $54,000
Feb Mar Apr May Jun Jul Aug Sep Oct
$(150,000)
$(100,000)
$(50,000)
$-
$50,000
$100,000
$150,000
$200,000
$250,000
Winter Legume Annual Cash Flow
Income (FOB Hre) Total Costs Cumulative Cash
Expansion - Food Crops
• Cropping area for 2015-16 season is planned at 2,500 ha
• Further expansion by 1,000 ha/annum from 2016-17 season
• Initial capital requirement US$4.8 million– Tractors, equipment, irrigation
infrastructure, vehicles & grain drying, handling and storage
Oct Nov Dec Jan Feb Mar Apr
$(500,000)
$(400,000)
$(300,000)
$(200,000)
$(100,000)
$-
$100,000
$200,000
$300,000
$400,000
Food Crop Annual Cash Flow
Income (FOB Hre) Total Costs Cumulative Cash
Expansion - Livestock
• Each hub to develop a feedlot to handle 1,000 head of cattle per annum
• Feed to be based on crop residue and pack shed waste
• Cattle to be sourced from local small scale farmers
• Capital requirement US$1.2 million– Feedlot infrastructure, equipment
and initial livestock units
Employment Creation
• These expansions will create thousands of positions, both permanent and seasonal, many of which will be filled by women: – Roses: 1,600– Horticulture: 1,500– Food crops: 500– Livestock: 100
• Indirect jobs created through local businesses growing and diversifying with increased monthly earnings introduced into circulation
Social Responsibility
• Registered with four globally recognised certification bodies:– Fairtrade www.fairtrade.net/ – GlobalGAP www.globalgap.org – MPS www.my-mps.com – Sedex www.sedexglobal.com
• Community development through Fairtrade Premium Committees and The Rose Collection which is a community based business initiative– www.facebook.com/TheRoseCollection
Financing Options
• Loan– 5-year loan to Zvirimwa Group based on the export
book of the group & company banking portfolio– Interest rate of 8% per annum to be paid every 12
months– Year 3 to year 5, 33.3% (one third) of the loan will
be repaid per annum• Equity Funding
– Investor provides funding and in return receives shareholding of Zvirimwa Group
– After 5 years the investor is able to sell the shares back to the remaining shareholders at a market valuation price of each share
– Group aiming for a public listing in 5 years
Risks• Land and tenure security
– Zvirimwa Group is well placed to secure ‘Offer Letters’ and 99 year leases for all production hubs under the Zvirimwa banner
– Zvirimwa Group can facilitate progress with Government in spearheading the formation of ‘Special Economic Zones’ for the export flower and vegetable proposals
• Currency fluctuations– Euro:USD rate is concerning as it is heavily affected by Airfreight charges in
USD– Jakana Logistics is constantly monitoring this dynamic and progressively
engaging the airline to moderate the freight rate• Market access
– Freight– Over supply
Benefits• Integrated capacities from field to fork• Incorporates small-scale and SME participants• Secure export markets, and a transparent
marketing channel for these exports• Highly competent team of experts and
administrators on and off farm• Forms a blueprint for the successful expansion
of the export agriculture sector and food production in Zimbabwe
Conclusion
• Zvirimwa Group is a proven model for a successful agricultural partnership for all parties concerned
• A balanced model between export and food crop farming assisting cash flow
• Investment of US$16 million will see the Group’s annual turnover increasing by US$28 million within 5 years
• Experienced, hands-on, management team that has a proven track record