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Author
Participant
  • Nature Challenge 2009

    Boosting businesses on sustainable use of natural resources in Mozambique & Kenya

  • The full business plan documents have been submitted for assessment.

  • The plan application has been submitted for assessment.

 
Business established

1

An Initiative in Combining Rural Development with Private Enterprise in the Honey Sector through shared ownership with Producers

V & M Grain comercializes agricultural commodities in central and northern Moçambique direct from producers

Comercialisation of maize, milling and trading is the main activity for internal markets, volume is between 15.000 - 30.000 tons a year
Pulses, groundnuts, sesamy and others are traded for external markets and exported mainly to Dubai and India, total volumes around 8000 tons a year.

A new and exciting product to produce, buy, process and trade is HONEY, to bring it as first grade, 100 % organic and Fair-Trade certified into high level markets.

Facts

Legal status business
Formally registered
Year of establishment

1995

Sales (US$)
Two years ago: 5,000,000
Last year: 6,000,000
This year (forecast): 7,500,000
Year 2 (forecast): 8,500,000
Year 3 (forecast): 9,000,000
Net profit after tax (US$)
Two years ago: 500,000
Last year: 600,000
This year (forecast): 800,000
Year 2 (forecast): 900,000
Year 3 (forecast): 1,000,000
Total number of Employees
Two years ago: 12
Last year: 12
This year (forecast): 14
Year 2 (forecast): 16
Year 3 (forecast): 20

Finance needed

Finance needed for fixed assets (buying of machines, buildings, ...) 185,000
Finance needed for working capital (salaries, stock, rental, leasing, transport, ...) 350,000
Total finance needed (US$) 535,000

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 185,000
Loans (debt) 0
Share capital that you seek from investors (equity) 350,000
Other sources 0
Total finance needed (US$) 535,000

The Business

What is your product/service?

Development of the value chain of suststainable environmental agriculture through bee-keeping which has a result in producing ,comercializing honey, processing, packing and marketing as a high-value product.

Considering the limited quantity, 500 tons after 5 year, the high quality, will result in a demanding market on all levels.

The Company will facilitate access to production means and offers a competitive purchase price.

What customer need/problem do your products/services satisfy?

Bees , in the tradional production areas are dying and production on global levels is continious declining, the product, we will produce, is in rel. small quant. and specialized, the market wont be saturated.

How will you make the product/service?

By producing various types of bar-hives, some out of local materials like mud and bamboo , which can be made by the producer with very low costs (5 usd ) and by selling the timber KTB -hive on credit to the producers.

Collecting and processing will be done by our tecnicians, where hygienic and other environmental criteria are met on first world standards.

Packing , labelling and logistics to the buyer will be done on a professional way.

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

Formal local, sales of all grades through direct contact with shops and supermarkets, in glass bottle packing max. 350 grs.

Informal sales through street sellers, small road shops in a proper 10-25 grs plastic packing, also some mixed with groundnuts, cashew nuts.

For creating demand advertising in jornals and television.
Honey as substitute for sugar in f.e. coffee and tea.

S.A and Japanese markets through a fixed agent.

To whom are you selling, what is your market?

Starting with the local , formal (shops and supermarkets) and informal (street and bairros) markets, this will absorb at least 200-300 tons.

As the quantities will get more, we will look into the regional market like South Africa.

In the meantime try-outs will be done with small quantities of top-quality, organic honey to the Asian market , where we have an agent as quantities are growing, certification for EU market will start.

Describe your competitors?

Competition with cheap honey comes from China, Latin America, Australia, Europe like Portugese and Spanish.
Quality wise these honeys have lost their special properties.

They are working with agents, especially in South Africa, but for imported portugese honey also in Moçambique.

Local produced honey is sold along the main roads from south to north with a low price but very doubtfull quality in used water bottles and often mixed with sugar.

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

Quality in the first place, processed, packed on EU norms in the 2 place and transported on time and secure in the third place.

The buyer will be aware that the producer is involved in the Company.

What makes your business, your product or service innovative?

The Mocambican Honey Company is a stake holder company with 50% shareholding for private and 50 % for producers.

The private will guarantee high value management, the producer will be able through training and availability of acquiring improved bee-hives, to guarantee a high value product.

Producers will be organized in Associations and Coops and will be trained to participate in management and as shareholders in profit sharing.

How will you ensure the growth of your business?

The honey production in Mocambique has got an enormous potential, (estimated 3500 tons a year)
Production with putting out top bar-hives will grow 2 to 3 times a year.

Local markets will be developped by marketing, Honey "Made in Mocambique" ,and will absorb good quantities, starting at 200-300 tons a year.

Top quality honey as a "niche" has a good market, although the existence of a lot of these, compare it with the parfums-market.

The Entrepreneur & Management

Describe the entrepreneur & management

Andre Vonk,managing Director and owner of V & M Grain is the driving force behind the honey project, he has many years of experience in running a succesful company in Mozambique.
V & M focusses on grain trading and value adding activities which relies on a close relationship and trusting environment with many thousands of small scale producers.
The honey project will require such a person with successful small scale producers experience.

What specifically makes you and (if relevant) your management team most qualified to build this business?

V & M has been working through the years directly and indirectly with the Communities , organized or not in Ass. and Coops.

Main objective to pay the highest possible price directly to the producers.

It will now start comercializing honey in the villages which alternatively will give the producers even more possibilities to also sell other commodities directly to the end-user, resulting into higher prices.

It always pays cash on the spot.

How much time do/will you expect to spend per week in the business?

In the next few month I will work full time on the project to establish the company and put the funding in place .

As that is done , a manager will be nomonated and I will withdraw into an advisory role

Development

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

Honey can be seen as a great way to alleviate absolute poverty, it is easy to produce and provides extra income.
Bees are responsable for flowering and pollination of natural flora and crops, improving the yields of various crops like maize, beans and sesame.
It will change the mentality of burning down trees to deforest terrain, and turn into a "preserve nature" thinking, as people will see them as important ingredients for honey production.

1 comment

Re: manager

Andre Vonk, 7 Apr 10, 12:10
"mandar" sabemos todos, saber mandar e o segredo.

1 May 10, 06:45 Andre Vonk, 1 May 10, 06:45