Farland agro project presentation

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Farland agro project presentation

  1. 1. FARLAND INVESTMENT LIMITED COMMERCIAL AGRICULTURE KOLIR RICE PROJECT UGANDA An Opportunity for INVESTMENT
  2. 2. Project Location:Kolir Sub CountyofBukedea District,Uganda
  3. 3. Project Partners under a JVA:JVC: FARLAND AGRO (U) LIMITED JVC – Partners: FARLAND INVESTMENT LIMITED RHM FOODS (U) LIMITED KOLIR SUB-COUNTY of BUKEDEA DISTRICT
  4. 4. The Project:• Establish Commercial Agriculture in Kolir Sub Country.• Bring 60,000 hectare of land in use for commercial farming for Rice production.• 10,000 hectare of land being brought into productive farming in Phase -1.
  5. 5. Project Goals: Phase-11. Produce 90,000 MT of paddy per year.2. Export 43,400MT milled Rice with good value addition.3. Contribute to world food security and social stability.4. Create jobs for local community and foreign skilled workers.5. Develop farming & value addition infrastructures.6. Support small out-growers with knowledge and skills.7. Provide micro finance support to farmers.8. Increase productivity through better seeds and mechanised farming.9. Reduce costs of production through better management of resources.10. Maximise profit through reducing waste and improved efficiency.11. Implement sustainable environment management practices.12. Become East Africa’s largest commercial Rice grower in 10 years.13. Pay better dividends to investors.
  6. 6. Rice in the global market• Staple food for 50% of world World Production MT Consumption MT population 470 420• In 2009, global production and global consumption 370 estimated at 440 million tons 320 milled rice (659 MMT of tons paddy) 270 220• Thin and residual global market (29.8 million tons) 170 – 7% of world production 120 1960/61 1964/65 1968/69 1972/73 1976/77 1980/81 1984/85 988/89 1 1992/93 1996/97 2000/01 2004/052008/09 traded • Global stocks at : 90 MMT (75 million MMT in 2007) Source USDA 2010
  7. 7. World trade in rice is about 30 million tons Major exporters are: • Thailand, • Vietnam, • United States, • India and • Pakistan
  8. 8. Rice importers are: • Indonesia, • Brazil, • Iraq, • Philippines, • Bangladesh and • the Arab world
  9. 9. A Demand AnalogyRICE IN BANGLADESH: ASIA:• Rice is the lifeblood of Bangladesh • In Asia, total annual rice production must• producing about 25.0 million tons (for 140 increase by 60 percent. million people) • 3 billion people in Asia• 2.3 million people being added each year to • Production at above 420 million tons a year its population • 100 million additional mouths have been• require about 27.26 million tons (2020) added since 2005• 18 percent of the Gross Domestic Product • Prices shot up 30 percent (2005 to 2007) and (GDP) 40 percent since 2008• providing about 70 percent of an average • 4 percent sustained growth in agriculture is citizens total calorie intake needed• rice area totals about 10 million ha• 93 percent of the total area planted to cereals• farm size has declined from 1.43 ha in 1961 to 0.87 ha in 1994• average rice yield remains low at about 2.7 t/ha (some growth was achieved during recent years)
  10. 10. High volatility of international rice prices but upward trend projected•Impressive surge in prices in2008 followed by a fall just asspectacular. Prices still remainhigh.• The FAO all-rice index (2002- 2004=100) more than double between 2005 and 2010 from 125 to 260.• In Nov 2010 prices for ThaiA1Super and Thai 100 USD/t are 480 USD/t and 550 USD/t•The variability (CV) of Thai100 upfrom 15% in 1990s to more than50% in 2000-10•Global rice prices are projected toincrease by 2.5 to 3% every yearuntil 2017 (USDA, 2008) Source: OSIRIZ/InfoArroz,CIRAD
  11. 11. Increasing Importance of Rice in SSA Figure1: Total paddy production, area harvested, paddy yield, import of milled rice, and arable land per agricultural population in SSA 18000 2.5 Import Quantity (1000 tonnes) 16000 14000 2 (t/ha, ha/person) Area Harvested (1000 Ha) (000t, 000 ha) 12000 1.5 10000 Total paddy production (1000 8000 tonnes) 1 6000 Paddy yield (t/ha) 4000 0.5 Arable land per agricultural 2000 population 0 0 Year2011 AfricaRice Science Week and GRiSP-Africa Science Forum
  12. 12. Regional analysis Average milled rice production (000t) Growth rates (%) of Yield, Area and Production (2001-2005) Country 1970’s 1980’s 1990’s 2001- Country Yield Area Product 2005 ion Kenya 24.56 30.19 31.58 32.39 Kenya 3.66 4.02 7.83 Tanzania 184.05 329.54 446.29 456.97 Tanzania 14.03 -1.57 12.24 Uganda 12.4 17.29 54.47 85.76 Uganda -1.41 7.67 6.15 East Africa 1613.6 1880.5 2245.2 2598.8 East Africa 6.73 0.45 7.212011 AfricaRice Science Week and GRiSP-Africa Science Forum12-16 September 2011
  13. 13. Growth rate of consumption (%) Self sufficiency ratios Country 1980’s 1990’s 2001- Country 1980’s 1990’s 2001- 2005 2005 Kenya -0.02 3.12 31.58 Kenya 0.98 0.42 0.16 Tanzania 9.13 5.65 -1.19 Tanzania 0.94 10.3 0.86 Uganda 4.44 13.55 5.04 Uganda 0.85 0.95 0.76 East Africa 1.38 3.79 2.66 East Africa 1.03 1.04 0.93Research Days 2010, 29 Nov-2 Dec 2010
  14. 14. Where we are today!PHASE-1 • 10,000 hectare of farmland – leased for 49 years with automatic right to renew at the end. (Oct 2011) • Testing seeds for cultivation – in collaboration with JICA & NAADS and Ministry of Agriculture of Uganda. (Dec 2011) • Planned to cultivate 405 hectare, for rice growing from March 2012.
  15. 15. Phase-1: Total Project Cost Investment Cost of the Project Cost (in 000, US$)25,000.00 With IDC $21.7 M20,000.00 Without IDC $20.4M15,000.0010,000.00 5,000.00 Investment Cost of the Project Cost 0.00
  16. 16. Estimated Annual Output (in 000, US$)25,000.00 21,708.00 22,349.5220,000.0015,000.0010,000.00 5,000.00 Estimated Annual Output Average 0.00 21.38 641.52 43.42 0.00 0.00 Thousand @ 30.00 Thousand @ 500.00 Thousand @ 0.00 Thousand MT Thousand MT Thousand MT Thousand US$ US$ US$ US$ Husk Milled Rice ?? Gross Revenue
  17. 17. Product Cost (in 000, US$) Item Year 1 AverageCrop Total Production Cost 12,600.00 12,600.00Operating Cost 2,562.83 2,933.99Direct Material Cost 15,162.83 15,533.99Repair and Maintenance Cost 300.37 363.62Depreciation Cost 1,565.20 875.74Cost of Goods Sold 17,028.39 16,773.36Administrative Costs 331.76 370.99Financial Expenses 773.05 -21.34Total Expenses Before Tax 18,133.20 17,123.01Cost per Thousand MT of Husk 24.34 22.98Cost per Thousand MT of Milled Rice 405.67 383.07
  18. 18. Estimated Profit Net income - before tax Net profit - after tax 5,226.51 5,226.51 4,216.32 4,216.325 years TaxHoliday assumedin the calculations 1st Year (in 000, US$) Average
  19. 19. Base Case Scenario Series1 34,219.04 32.03% 4.00 20.63% 56.42%(in 000, US$) IRR NPV @ 7% Payback Period ROI BEP in capacity utilization
  20. 20. Farland Agro (U) Ltd. Kolir Rice Project Amount is Set to Thousand of US$ Investment Cost of the Project Estimated Annual Output Item Cost Item Unit Year 1 AverageLand Cost 0.00 Thousand MT 21.38 21.38 HuskLand Development 1,000.00 @ 30.00 Thousand US$ 641.52 641.52Construction Works 1,033.00 Thousand MT 43.42 43.42 Milled Rice @ 500.00 ThousandMachinery & Equipments 3,420.00 21,708.00 21,708.00 US$Electrical Equipment 500.00 Thousand MT 0.00 0.00 ??Industrial Vehicle 12,500.00 @ 0.00 Thousand US$ 0.00 0.00Other Equipment 515.00 Gross Revenue Thousand US$ 22,349.52 22,349.52Transport vehicles 165.00Office equipment 10.00 Product CostFurniture and fixtures 20.00 Item Year 1 AverageRegulatory expenses 27.10 Crop Total Production Cost 12,600.00 12,600.00Deposit for supply utility 1.00 Operating Cost 2,562.83 2,933.99Other costs 75.00 Direct Material Cost 15,162.83 15,533.99Manpower for project execution 138.00 Repair and Maintenance Cost 300.37 363.62Pre-operational expenditure 165.00 Depreciation Cost 1,565.20 875.74IDCP 821.90 Cost of Goods Sold 17,028.39 16,773.36Working Capital 1,316.25 Administrative Costs 331.76 370.99Total Investment with IDCP 21,707.25 Financial Expenses 773.05 -21.34Total Investment without IDCP 20,391.00 Total Expenses Before Tax 18,133.20 17,123.01 Cost per Thousand MT of Husk 24.34 22.98 Scenario Base case scenario Cost per Thousand MT of Milled Rice 405.67 383.07 IRR 32.03% NPV @ 7% 34,219.04 Payback Period 4.00 Net income - before tax 4,216.32 5,226.51 ROI 20.63% Net profit - after tax 4,216.32 5,226.51 BEP in capacity utilization 56.42%
  21. 21. Project Implementation PlanEvents 2011 2012 2013 2014 2015JVC Formed AugustJVA OctNEMA DecSURVEY FebSEED TEST DecPOP DecLand Dev March (1,000h) 2,000h 5,000h 10,000hFinance JanPurchases Feb
  22. 22. Thank you!

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