Ghana Food Crop Farming
Overview
The Company and its Business model
The client is an Italian company operating in the agribusiness sector, which controls a Ghanaian
company farming Jatropha Curcas and food cash crops.
One of its ambitions is to demonstrate that it is possible to manage a highly productive
plantation in Africa while also having a positive impact on the local community.
The company, managing a farm of 4,500 hectares in Ghana based on a fully registered 50 years
land concession, aims to become a key player in the production of:
• sustainable vegetable oil for technical use in the EU market
• food cash crops (maize, soy, yam, cassava, etc.) both for local and export markets
The company has started to farm food crops since 2013, and recently decided to dedicate half
of the available land – i.e. at least 2,000 hectares – to the production of food cash crops
through a new company that will be soon established.
The Investment opportunity is specifically in the spin-off farming Food Crops.
The Company’s strengths
To achieve success, the company can rely on :
• A strong management team, with advanced technical and entrepreneurial skills, led locally
by a Ghanaian entrepreneur with extensive work experience in Africa and the US.
• A state-of-the-art, well-organized plantation with modern facilities in operation for 3 years,
and the tremendous expertise (including in logistics and infrastructure) gained therein
• Perfect integration into its socio-economic context with high local acceptance, solid
administrative backing and fully-registered land concessions.
• A land concession in first grade arable land with a track record of high productivity in the
Yeji area (Central Ghana), including an option for 46,000ha additional land for scale.
The Opportunity
The Ghanaian farming landscape is largely devoid of large commercial farms for food crop
production, lacks the technical sophistication to produce to meet precise specifications and the
pre-processing capabilities necessary to preserve fast-spoiling products and extract additional
value. The wholesale market is incapable of closing the gap.
Yet the growing industrial and export markets are in dire need of reliable suppliers able to
consistently meet quality standards with large volumes.
This is true especially for yam (and yam planting material), cassava (especially processed) and
maize (dried), which will be the focus of the first food crop development.
The Company is in the unique position to answer these large customers' call and become the
preferred supplier of all large, value-added buyers in Ghana.
It would be largely protected from currency or other macro-economic problems by being
focused on sophisticated customers in either export of import-substitution markets.
5, rue Fragonard, 75017 Paris France & Oburoni House, Lokko Rd Osu Accra Ghana, [email protected]
Ghana Food Crop Farming
Products
Food Crop Markets (Ghana and exports)
Food crops (mainly maize, cassava and yam) account for ~66% of total Ghanaian agriculture GDP.
Yam
Yam is one of the most farmed tubers in West Africa and Ghana is, behind Nigeria, the second
largest world producer, with a production of 6 Mt/y, i.e. 12% of w/w production. Demand, both
domestic and export, is growing strongly, and the economics of the crop are especially good.
Yam is a local crop in the site of the farm. The Farm is in the middle of Yam activities and
interacts daily with farmers providing them with both financial and logistical support, and will
through the project provide them with planting material.
Maize
Ghana is historically a net importer of cereals (mainly maize and rice). The strong increase of
the internal consumption, sustained also by the growing poultry industry, cannot be balanced
by the fast growing internal production (CAGR 6,4% for maize and 8,7% for rice in the period
2000÷2010).
Specifications required by processors are insufficiently followed, leading to manufacturers
usually preferring more expensive, imported maize.
The farm is very close to the so-called Maize Belt of Ghana, where the best yields are achieved.
Cassava
The same area is also intensively farmed with cassava, especially dedicated to export to China in
dried and chipped form (for biofuel production), besides serving the local demand both for
direct use as food and for the food industry (flour, breweries).
Food Development Plan
Since the farm is located in an area highly suitable for modern agriculture, trials have already
been performed with several cash crops (maize, soy, sorghum) and also irrigated vegetables
(carrots, onions, aubergines, etc.); all of these crops are currently sold to the local market.
Farming of yam and cassava started in 2015.
The food cash crops development plan in the short/medium term is shown below.
5, rue Fragonard, 75017 Paris France & Oburoni House, Lokko Rd Osu Accra Ghana, [email protected]
Ghana Food Crop Farming
Benefits and Financial Plan
Project Financials
The project will be cash positive in 2019 and will generate a steady cash flow (EBITDA) of 2,2
M€/y by 2021.
Social Impact
The Company has been established with the goal of setting the example for a plantation with a
positive social impact.
Through an elaborate outgrowing scheme, local farmers can benefit from the plantation as a
market, source of crops and source of material.
Impact on unemployment (well over 60% in the area) is key: In year 2014 the permanent
workforce was about 130 workers, plus many seasonal ones. At steady state, the project is
expected to retain a permanent workforce of no less than 550 workers plus 500 seasonal ones;
Furthermore, some 1500 farmers are expected to be involved in the outgrowing scheme.
To attain high women empowerment, they are preferred in the hiring process: current workforce
composition is 67% females, similar numbers are expected for the Food Crops spin-off.
The engagement of the Group towards the local community shows also in the yearly
contributions to a special Community Fund, managed by local authorities, in the cooperation
with an Italian NGO (Ai.Bi.) for the care of babies of the female workers, and in the regular
training to all workers on many health issues (HIV, malaria, etc.)
Future Milestones
In the short term (years 2015÷2018): Establish a profitable business in the food cash crops
through a strong farming programme of approx. 1.000 new hectares dedicated to food
In the medium term (2019 onwards): Complete the food cash crop development plan to reach
2.000 ha; Eventually increase the extension of dedicated land, or start further higher value
crops (vegetables, especially with irrigation, tropical fruits, etc.)
Funding Needs
The overall funds required for the whole project are about 3.3 M€.
The overall capex, partially covered by the operational cash flow, has been evaluated in 4,8 M€,
with destination as follows:
• 2,0 M€ for investment in machines
• 1,8 M€ for investment in farming infrastructures & processing plants
• 1,0 M€ for land preparation and other set-up costs
The above financial figures have been built with a 100% equity approach, even though it is
possible to decrease the requirements through more prudent approaches.
5, rue Fragonard, 75017 Paris France & Oburoni House, Lokko Rd Osu Accra Ghana, [email protected]