1
Rice Processing, Branding & Marketing(RPBM)
Rice Processing, Branding & Marketing(RPBM), a sustainable and environmentally friendly business model to agribusiness development
RPBM is an evidence-based demand-driven intervention based on research findings conducted by Rockford Harris Group(RFH) for Butaleja Local Government, the National Agricultural Advisory Services(NAADS) & the District Farmers Forum.RFH is an agribusiness consulting company engaged in rural development.The business plan is in its initial stage. Rockford Harris Group wishes to establish itself as an agribusiness Market Access Company(MAC). Baseline data has been sythesized and shared by all stakeholders for community mobilization. Critical infrastrusture such as farm land, defunct warehouses, rural feeder road network & access to telecom signal for communication identified. RFH has also integrated community radio programming through partnerships in its business platform. Contacts for key strategic partnerships with Post Bank Uganda, Uganda Commodities Exchange and the District Farmers' Forum both for smallholder farmer mobilization, crop financinag through the Warehouse Reciept System(WRS) and business development has been initiated.
RPBM focuses on agribusiness enteprise development, value-addition(agro-processing, product & supply chain-development and finally warehousing services).The demand for rice is growing as result of emerging markets,global warming and the bio-fuel industry creating pressure on the global food supply chain.
Uganda's rice market currently stands at 200,000 Metric tones(MT). Production levels stand at 170,000MT with an import bill of more than $45m of 35,000MT from India, Pakistan & Vietnam.Government has increased import tarrifs to promote local production from a policy perspective.The Regional Market is 120million people. Production levels will hinge on Agribusiness Enterprise Development through the Warehouse Reciept System(WRS),Agro-Processing(Rice Drying & Milling Plants) & Product Branding. That what RPBM addresses.
The Business Plan focuses on implementing an integrated market oriented, sector specific, public-private intervention. Project resolves many of the constraints to financing agricultural sector and the associated agricultural production and marketing challenges because the product (crop) is financed only after production, product is self-collateralizing and the loan terms are normally short. Access to warehouse receipts encourages production and productivity because opportunities for greater revenue (through temporal storage) become realistic to producers and cash in hand from receipts directly finances production at no risk to the lender.
Facts
2008
| Two years ago: | |
| Last year: | |
| This year (forecast): | 10,000 |
| Year 2 (forecast): | 350,000 |
| Year 3 (forecast): | 450,000 |
| Two years ago: | |
| Last year: | |
| This year (forecast): | 9,000 |
| Year 2 (forecast): | 336,000 |
| Year 3 (forecast): | 432,000 |
| Two years ago: | |
| Last year: | 2 |
| This year (forecast): | 4 |
| Year 2 (forecast): | 12 |
| Year 3 (forecast): | 30 |
Finance needed
| Finance needed for fixed assets (buying of machines, buildings, ...) | 140,000 |
| Finance needed for working capital (salaries, stock, rental, leasing, transport, ...) | 120,000 |
| Total finance needed (US$) | 260,000 |
How do you expect this to be financed? Please note: the total amount mentioned here should be equal to the total finance needed at the previous question.
| Own Contribution in cash | 20,000 |
| Loans (debt) | 20,000 |
| Shares in your company that you offer to investors (equity) | 220,000 |
| Other sources | |
| Total finance needed (US$) | 260,000 |
The Business
The business will offer services in warehousing storage, agribusiness enterprise consulting and agro-processing on commission basis. A %age commission will be determined by business needs.
The company also will invest in product development and branding in the short and long term. This will entail purchase of grain from farmers, development of product, branding and supply chain development.
Global warming,bio-fuel industry,population growth have exerted pressure on the global food supply chain.
There is a regional demand for rice with a market estimated at 120million people.
Refurbish & Construct Warehouses for quality and improved storage of rice produce.
Identify potential enterprise groups for resource pooling, enterprise development, market intelligence tracking and sharing for improved production as a service on commission basis.
Establish the ware house reciept system( WRS) for improved crop financing and collateralization of produce for improved household incomes and productions in the long term.
Establish a modern drying/hulling plant for agro processing a process leading to product,brand and supply chain development.
Rockford Harris will be a Market Access Company(MAC). From a service point of view it will offer warehousing services for farmers at a commission. It will share market information with farmers.It will also process rice through its agro-processing plant.
The company will also directly buy,process, brand the rice from rural farmers based on our Market Access Company Model. Our Market Strategy will focus both on the local & regional market demand. The distribution chain will entail strategic partnerships with retail stores, small shops,schools,World Food Program as well as contracts with government & private institutions such as the army, hospitals and the police departments in the region.
Our packaging will strategically target market needs. While peri-urban centers will obtain rice packed in 50kg bags in small shops where they can buy the product based on amounts of choice and affordability, the urban market will have a varied combination of the branded packaged product through retail chain stores.
The company will obtain its fleet of logistical transport and well as outsourcing cargo trucks for product distribution. Our distribution strategy will entail:
-Tender/Contractual supply to private/public institutions in Uganda and Region.
-Retail Chain Stores
-Small shops
-Schools
-International agencies such as WFP
-UN Mission in Congo,Darfur,Southern Sudan.
We are targeting both the local and regional market. Our expansion strategy is looking at Southern Sudan, DR.Congo, Rwanda, Tanzania are market of approximately 150 million people. This is an emerging market as economies grow at an average of 5.5% in aggregate terms.
Traditional exporters India,& Pakistan are capping their exports to due increased local demand. That creates unsatisfied demand in the regional market that must be met.
The global food crisis as a result of a growing global population, the bio-fuel industry, increased energy costs has caused a cap on exports from traditional exporters,India & Pakistan.Uganda produces 170,000MT of rice and imports 35,000MT with an import bill of more than $40m. The national demand is 200,000MT alone currently facing a regional demand of the grain rising prices high.
Kibimba rice scheme is a large scale producer of rice accounting for 20% of the market with 20,000MT a year. It has taken advantage of economies of scale. It is directly engaged in production of rice and therefore its brand. This requires high capital investment. Our strategy is to help already existing smallholder farmers form enterprise groups improve productivity on the contrary. By directly producing the product our competitor has limited social impact on the community since profits are not even distributed. From a purely business perspective, our competitors are competing with smallholder farmers in Butaleja. Our entry in the market will clearly uniquely differentiate us from our competitors based on our social enterprenuerial concept of facilitating value chain development.
The other value chain competitors are small agro-processors who account for almost 40% of the market in addition for the importers from India & Pakistan who accoun for almost 25%. Our entry into the market is evidence-based on research. Our intervention is strategic. Our initial market share target is 5% which represents approximately 5,000MT as we grow.
Social enterprenuership concept.Community ownership of our business model. It is the synergistic partnership between the farmer and company for business sustainability. You empower the farmer you guarantee higher production levels, you guarantee reduced poverty levels at household level but you also boost company business portfolio at mininal investment in the long term. Improve the national tax base through Improved production, quality mgt, storage and branding with customer-care driven marketing models will facilitate our deep market penetration.
Our partnership with enterprise groups of smallholder farmers in our area of operation will be our strategic approach. The introduction of warehouse services and reciepts will facilitate long term storage of grain as well as a unique model for crop finance for primary producers. This is a rural community famous for rice growing but farmers lack access to markets. Our agro-processing plant and warehouses introduces a Market Access Company(MAC) company that other private players had ignored.
By directly producing the product , our competitor has limited social impact on the community since profits are not evenly distributed. From a purely business perspective, our competitors are competing with smallholder farmers else where. Our entry in the market will clearly uniquely differentiate us from our competitors based on our social enterprenuerial concept of facilitating value chain development through Strategic partnerships.The model of business ownership & the production concept. The company will not invest in production directly but facilitate value-chain developments among viable groups by providing a reliable market infrastructure. The company will buy rice directly from farmers at competitve market rates. Value addition & product branding will facilitate business profictability to the company.
Continuously studying local,regional and global market dynamics. Understanding the needs of the customer and changing the business model to the changing market environment.
Identifying enterprise groups of farmers, teaching contractual Mgt issues,idetifying value chains actors and understanding our competitors ,their production lines will helps us build a unique brand in the market that makes our product stand out.
The Entrepreneur & Management
Mr.Shaka Robert is an Ashoka Fellow & CEO for Rockford Harris Group. He is a business automation management consultant as well as a social enterprenuer.
This Business Plan, which is his idea is evidence-based on his company's agribusiness consulting contract his team carried out for the National Agricultural Advisory Services(NAADS) & The Butaleja District Local Government. This business plan is a strategic intervention that was highlighted in our research findings as the best approach to stimulating markets and enterprise growth in that area from a development perspective and give opportunity to both the smallholder farmer and the MAC.
Our approach is one of strategic partnership with the Farmers' forum,Uganda Commodities Exchange, Post Bank,NAADS,Local Government & other Private sector actors. The strategy is to create broader ownership of business responsibility while keeping functional conventional business values.
The company prides in a pool of Business Development Experts, Product Development,Branding & Developing Market linkages as well as cross-cultural communication specialists. This team is our strategic resource in building this business.
I have a historical record as an enterprenuer. I have invested in property and agribusiness consulting as a passion. I am versatile in character with ability to multi-task in a highly skilled environment. As individuals we have experience spanning 6 years working for various development organizations in agribusiness and development research in our proposed business area. Our company has also had contractual work with NAADS & other development agencies in agribusiness enterprise development with vast information on the region in our possession.
We have the drive and see opportunity where many do not. Our approach is a hybrid of business and community building(social enterprenuership).
We believe Business has a social responsibility to the community in which it thrives.We build strategic partnerships with key actors.
More than 40 hours a week.
Development
Rural farmers in Butaleja are poor despite the massive investment in rice growing. Lack of market information & access is critical to alleviating poverty. Rockford Harris Group will be the Market Access Company buying rice directly froms farmers. The value-chain will be developed through training. Farmer will understand the importance of farmer associations as they pool resources, learn to manage credit, market intelligence, finance & micro-finance. The net effect is improved productivity and quality translating into improved household incomes, food security,health and profitable business.
Cant you start in a small way?
Brilliant