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.
5.
6.
7.
8.
9.
10.
11.
12. 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.
13. Project Goals: Phase-1
1. 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.
14. 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
15. World trade in rice is about 30 million tons
Major exporters are:
• Thailand,
• Vietnam,
• United States,
• India and
• Pakistan
16. Rice importers are:
• Indonesia,
• Brazil,
• Iraq,
• Philippines,
• Bangladesh and
• the Arab world
17. A Demand Analogy
RICE 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
citizen's 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)
18. High volatility of international rice prices
but upward trend projected
•Impressive surge in prices in
2008 followed by a fall just as
spectacular. Prices still remain
high.
• 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 up
from 15% in 1990s to more than
50% in 2000-10
•Global rice prices are projected to
increase by 2.5 to 3% every year
until 2017 (USDA, 2008)
Source: OSIRIZ/InfoArroz,CIRAD
19. 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
Year
2011 AfricaRice Science Week and GRiSP-Africa Science Forum
20. 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 7.21
2011 AfricaRice Science Week and GRiSP-Africa Science Forum
12-16 September 2011
21. 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 0.93
Research Days 2010, 29 Nov-2 Dec 2010
22. 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.
23. Phase-1: Total Project Cost
Investment Cost of the Project Cost (in 000, US$)
25,000.00
With IDC $21.7 M
20,000.00
Without IDC $20.4M
15,000.00
10,000.00
5,000.00
Investment Cost of the Project Cost
0.00
25. Product Cost (in 000, US$)
Item Year 1 Average
Crop Total Production Cost 12,600.00 12,600.00
Operating Cost 2,562.83 2,933.99
Direct Material Cost 15,162.83 15,533.99
Repair and Maintenance Cost 300.37 363.62
Depreciation Cost 1,565.20 875.74
Cost of Goods Sold 17,028.39 16,773.36
Administrative Costs 331.76 370.99
Financial Expenses 773.05 -21.34
Total Expenses Before Tax 18,133.20 17,123.01
Cost per Thousand MT of Husk 24.34 22.98
Cost per Thousand MT of Milled Rice 405.67 383.07
26. Estimated Profit
Net income - before tax Net profit - after tax
5,226.51 5,226.51
4,216.32 4,216.32
5 years Tax
Holiday assumed
in the calculations 1st Year (in 000, US$) Average
27. Base Case Scenario
Series1
34,219.04
32.03% 4.00 20.63% 56.42%
(in 000, US$)
IRR NPV @ 7% Payback Period ROI BEP in capacity
utilization
28. 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 Average
Land Cost 0.00 Thousand MT 21.38 21.38
Husk
Land Development 1,000.00 @ 30.00 Thousand US$ 641.52 641.52
Construction Works 1,033.00 Thousand MT 43.42 43.42
Milled Rice @ 500.00 Thousand
Machinery & 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 0.00
Other Equipment 515.00 Gross Revenue Thousand US$ 22,349.52 22,349.52
Transport vehicles 165.00
Office equipment 10.00 Product Cost
Furniture and fixtures 20.00 Item Year 1 Average
Regulatory expenses 27.10 Crop Total Production Cost 12,600.00 12,600.00
Deposit for supply utility 1.00 Operating Cost 2,562.83 2,933.99
Other costs 75.00 Direct Material Cost 15,162.83 15,533.99
Manpower for project execution 138.00 Repair and Maintenance Cost 300.37 363.62
Pre-operational expenditure 165.00 Depreciation Cost 1,565.20 875.74
IDCP 821.90 Cost of Goods Sold 17,028.39 16,773.36
Working Capital 1,316.25 Administrative Costs 331.76 370.99
Total Investment with IDCP 21,707.25 Financial Expenses 773.05 -21.34
Total 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%
29. Project Implementation Plan
Events 2011 2012 2013 2014 2015
JVC Formed August
JVA Oct
NEMA Dec
SURVEY Feb
SEED TEST Dec
POP Dec
Land Dev March (1,000h) 2,000h 5,000h 10,000h
Finance Jan
Purchases Feb
