Business start-up: 

Tajik Fruit Company

Cleaning and Exporting of Dried Apricots from Tajikistan

  • Buying dried apricots.jpg

    Buying dried apricots.jpg - 

    Purchasing dried apricots

Purchasing of dried apricots from local farmers, sorting, cleaning and packaging them for export markets to the US and Europe. In 2006, as a private entreprenuer, I exported 13 metric tons of cleaned dried apricots to Pennsylvania, US. This was the first time a food product was sent to the US from the Sugd Province, Tajikistan.

Facts

Year of establishment

2007

Sales (US$)
Two years ago:
Last year:
This year (forecast): 399,000
Year 2 (forecast): 598,500
Year 3 (forecast): 798,000
Net profit after tax (US$)
Two years ago:
Last year:
This year (forecast): 68,400
Year 2 (forecast): 102,600
Year 3 (forecast): 136,800
Total number of Employees
Two years ago:
Last year:
This year (forecast): 35
Year 2 (forecast): 45
Year 3 (forecast): 55

How do you expect this to be financed?

Own Contribution in cash 10,000
Loans (debt)
Shares in your company that you offer to investors (equity)
Other sources
Total finance needed (US$) 10,000

The Business

What is your product/service?

The product my company will produce is clean quality dried apricots. Original varieties for apricots around the world are found in the Ferghana Valley of Central Asia (the Asht region of the Sugd Province of Tajikistan is in the Ferghana Valley) where I plan to establish my business. In the United States the apricots will be marketed under the brand name CandyCot (www.candycot.com) by Lancaster International Trading Company because of its high sugar content.

Tajikistan currently markets thousands of tons of low quality apricots to countries of the former USSR. However, I will produce a high quality dried apricot that will compete in United States, Europe and elsewhere.

This business will generate profit for local apricot farmers from whom we are buying dried apricot supplies, for our company as we process and export products abroad and for the customer abroad who will buy our product wholesale and retail it.

Since the collapse of the Soviet Union 15 years ago much privatization in the agricultural sector has occurred in Tajikistan. My suppliers in this business will be private local apricot farmers who raise, harvest and dry apricots.

The company’s biggest current need is the purchase and renovation of a permanent facility to be used for sorting, washing, sulfuring, cleaning, packaging and storing of the dried apricots. I currently know of a building I can buy but I will need to construct interior rooms for processing, and install water and electrical supply to the building. All our processing is done by hand with no use of huge expensive machinery. This will create 50 or more jobs, supports the local economy and also produces a high quality product.

Dried apricots can be stored for up to several years, and farmers always have a stock of dried apricots for sale, waiting to sell until the price is right or until they need the cash. So we plan to have a year-round supply of dried apricots, but would prefer to stock our annual inventories right after the harvest when the supply is high and the price is low.

Explain how you will sell your product/service (marketing strategy) and how you will reach your customers (distribution strategy)?

Currently my marketing strategy is keep strong relationships with my current partners, Myron Stoltzfus, John Driver and Thomas Brown. John has known me for the past 6 years, Myron for the past four years and Thomas Brown for the past year. They have trained me in processing dried apricots, have seen the product I made in 2006 and want to continue buying my product. They will also assist me finding new buyers and have a strong motivation to see my business succeed.

We will deal with competitors by setting an unmatched standard of quality. Clean sweet quality dried apricots will be our cutting edge. Few, if any, in Tajikistan can produce the quality of apricots that I am producing.

The price of my product will be somewhat higher than other apricots marketed in Tajikistan, however, the quality of my product is incomparable to other products on the market. Other dried apricots on the Tajik market have dust, dirt and small stone particles on them and are crusty and dry.

On the world market, my apricots are better because they are sweeter than any other variety on the world market. Original sweet apricot varieties come from the Ferghana Valley, where I am doing business.

What makes your business different/better than your competitors (competitive advantage)?

The cleanliness, sweetness, size and bright colors of my dried apricots will be unmatched on the world market. The quality of the sugar content of my dried apricots is incomparable. Therefore, my product is being marketed in the US under the brand name CandyCot because it really is the sweetest apricot on earth.

The Entrepreneur & Management

Describe the entrepreneur & management

As a result of the training I have received, as outlined in the previous question, I have become an expert in my field. I do not know of anyone else in the Sugd Province (the northern province of four provinces in Tajikistan) that has the knowledge, understanding of world market standards, skills and expertise of dried apricot processing which I have. I plan to establish a cleaning facility in my home town of Shaydon, which is the regional capital town for the Asht region, the poorest of 14 regions in the Sugd Province. Being that Shaydon is my home town I completely understand the needs of the local economy.

In 2006 as a private entrepreneur I processed and exported 13 metric tons of dried apricots to Lancaster International Trading Company (LITCO), in Lancaster, Pennsylvania, and LITCO is now successfully marketing the product. According to the head inspector at the Sugd Provincial Sanitation and Epidemiology Department, this was the first time that a food product had ever been sent from the Sugd Province to the United States. I am now registering a Limited Liability Company in order to expand my business activities.

Development

How does your business improve the local living standards (social and environmental)?

I plan to hire 50 or more employees who will work in processing dried apricots. This will directly impact their families’ income. Our suppliers, local apricot raising fruit farmers, will also be impacted as they will have a buyer to whom they can sell their quality products.

From the first year I desire to invite agriculture specialists to my region to hold training for the local fruit farmers on proper pruning, spraying, harvesting and drying techniques. The end result will be higher quality fruit – non-diseased non-bruised fruit – that will be competitive on the world market.

Also, in the next two years from company profits I desire to start up a business that will provide quality spraying services to the fruit farmers. This would include acquiring spray materials, spraying equipment and would provide employment for 5 – 10 more persons. The end result will be more quality fruit being sold at higher prices on the world market.

In three years from company profits I want to buy 50 hectares of land to develop as an apricot orchard demonstration plot. During my seven years of work with NGO Shelter for Life, Tajikistan, I participated in community development education. I want to continue to pass on these principles to my future employees, suppliers and surrounding communities through the work of my fruit processing company.

Finally, within four years, from company profits, I want to help orphaned children in my community. If possible, I will try to help them sooner than four years from now.

Needs
Advice - business management, Advice - production, processing, Network - buyers, customers