Kohath Rice Company: a Homestrings investment opportunity in Nigeria


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Nigeria imports about 2 Million Tonnes of rice annually making it the second largest importer of rice in the world despite its comparative advantage in rice production. Current projections indicate that Nigeria will require 36 Millions Tonnes of rice annually by 2050 to meet the needs of its 300 Million people. KRC seeks to fill the demand-supply gap through the development of its Integrated Rice Production project which will harness local capacity and Nigeria’s comparative advantage in rice production.

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Kohath Rice Company: a Homestrings investment opportunity in Nigeria

  1. 1. Integrated Rice Production Project (IRPP)
  2. 2. About KIG KOHATH PROPERTY DEVELOPMENT COMPANY KOHATH MINING COMPANY KOHATH RICE COMPANY KOHATH ENERGY Kohath Property Development Company (KPDC) is establishing itself as a major player in developing New Cities in Nigeria and other African Countries. • KPDC is the operator and Joint Venture owner of the “Land of Honey” City development company. • Land of Honey City is mixed use new city development occupying 1767 Hectares. Kohath Mining Company (KMC) is focused on harnessing the earth’s natural resources to improve our lifestyle by supplying raw materials to manufacturers around the world. • KMC’s current acquisitions are in Tantalite, Iron Ore, Coal and Gold. • KMC is currently developing a tantalite mining field and a tantalum processing plant in Kwara State, Nigeria. Kohath Rice Company (KRC) is strategically positioned to harness the Agricultural Potentials in Nigeria through Rice Cultivation and Processing. ▪ KRC is in the process of setting up an Integrated Rice Production Project. ▪ Estimated annual production of 31,500 MT high quality parboiled long rice. Kohath Energy is poised to take advantage of emerging opportunities in Nigeria’s energy sector. KE’s Key Business Areas are: ▪ Power generation and transmission ▪ Natural gas utilisation for LNG production ▪ Oil and gas business consulting ▪ Crude refining through set up of modular refineries
  3. 3. About KRC
  4. 4. KRC IRPP: Project Overview • Aimed at harnessing Nigeria’s advantage in rice production • 3 Key components: ✓ 5 TPH state of the art rice mill ✓ 10,000 Hectare irrigated & mechanized paddy cultivation estate ✓ Development of outgrower scheme • Project locations – Adena village, Kaiama LGA, Kwara state • Initial annual production of 27,000 MT of export quality long grain parboiled rice • Production to be tripled within 36 months of project commencement • Project to be developed in 3 phases • Production to be technology driven • Development of agricultural production corridor with supporting infrastructure • KRC will employ an inclusive business model to engender smallholder farmer growth • Production to commence Q2 2015 KRC Integrated Rice Production Project Rice milling Paddy cultivation Outgrower scheme
  5. 5. KRC IRPP: Project Execution Strategy SPV Shareholding Structure SPV (Integra Rice Company) KRC (80%) Kwara State Govt. (20%)
  6. 6. KRC IRPP: Project Objectives
  7. 7. KRC IRPP: Paddy Production Model
  8. 8. KRC IRPP: Our Rice Products ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
  9. 9. KRC IRPP: Project Drivers Others: • Increase in rice import levy from 50% to 100% by FGN • Availability of suitable land, water for irrigation and labour
  10. 10. KRC IRPP: Development Partners
  11. 11. KRC IRPP: Financials ■ ■ ■ ■ ■ PROJECT COST ITEMS CAPEX OPEX Rice processing equipment Land preparation and leveling Farm mechanization machinery Agri inputs (Seeds, fertilizer, CPPs …) Farm buildings and structures Buy back costs Power generation Wages and utilities Operational vehicles Packaging materials Office equipment and furniture Advertising and promotion
  12. 12. KRC IRPP: Financing Strategy Agro Insurance (Risk Mitigation) • Agro insurance cover to be procured by SPV and Outgrower Coops • Insurance will provide cover from floods, drought, pests, fires and other man made/natural disasters • Insurance will serve as a risk mitigation strategy for equity investors and commercial banks Debt Funding into SPV (Term Loan & Working Capital) • Debt funding to be provided by commercial banks • TERM LOAN to fund FIXED ASSETS, WORKING CAPITAL to fund OPEX NIRSAL (Risk Mitigation) • Credit Risk Guarantees (CRG) to be procured by KRC from NIRSAL • 75% default cover on loan issued by commercial banks • Interest Drawback to be provided by NIRSAL SPVOutgrowers Equity Funding
  13. 13. How can you get involved?
  14. 14. Contacts