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Business established

1

Organic Snacks from Cameroon

Produce and Distribute snacks made of Organic fruits

AGA organizes farmers into teams and provides them technical assistance to produce organic fruits according to international standards. AGA partners with small scale entrepreneurs for processing and packaging in a drying unit using solar energy. The packaged dried fruit will then be sent to international Markets.

Facts

Year of establishment

2006

Sales (US$)
Two years ago:
Last year:
This year (forecast): 523,200
Year 2 (forecast): 880,800
Year 3 (forecast): 1,029,840
Net profit after tax (US$)
Two years ago:
Last year:
This year (forecast): 96,854
Year 2 (forecast): 178,111
Year 3 (forecast): 114,228
Total number of Employees
Two years ago:
Last year:
This year (forecast): 25
Year 2 (forecast): 35
Year 3 (forecast): 52

How do you expect this to be financed?

Own Contribution in cash 20,000
Loans (debt) 64,921
Shares in your company that you offer to investors (equity)
Other sources 100,000
Total finance needed (US$) 184,921

The Business

What is your product/service?

Product:
Dried Organic papaya, pineapple, banana, mangoes and mix fruits.
AGA never uses sulfites, sweeteners or added juices, thereby assuring consumers a delicious, nutritious and true fruit taste!

Operations:
Operations encompasses the activities that lead from sowing of the fruit, to cultivation, harvesting, picking, packing, transportation to the drying facility, processing and drying, packaging, transportation to the United States, and delivery to final customers

15 kg of fresh fruit is required to produce 1 kg of dried pineapple. The company plans to produce an average of four tons of dried fruit per month in year one. This requires the company to purchase 720 tons of fresh fruit .

Collection and Transportation:
To ensure quality packing for transport to AGA Food’s facilities, the Company’s co op manager will monitor harvesting, packing, and transportation the crops to the processing facility.

Processing:
Equipment in the processing facility includes: dryers, tanks, vacuum sealer, freezers. When the fresh fruit arrives at the facility, it is sorted, washed, de-skinned, peeled, sliced. Minimum drying capacity is based on a number of assumptions – namely that the pre-drying thickness of the pineapple is 3mm and that the drying time is 26 hours.

Labour:
The management team includes a technical Manager, Coop manager, Quality control manager who are supported by a team of 20 people

Shipping:
The dried fruit will be packaged and shipped via container to the United States, where a distributor will get the products to the stores.

Quality, Norms and Certifications:
The quality standards and certifications for AGA Food are important to the company’s ability to export to the US

Target Market:
US consumers, similarly to their EU counterparts, display an increasing emphasis on organic consumption for the following reasons:
• Concern for animal welfare
• Impacts of intensive farming and genetically modified crops and other environmental and social issues
• Trend for organic and fair trade to go together
For AGA, the first 2 years will be dedicated to 2 business opportunities. Indeed, two major investors have recently asked AGA Food to guarantee its capabilities to provide them with regular shipments of consistent quality and quantity levels.

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

Competition
Leading developing country suppliers of organic products are located in Latin America, namely Argentina, Mexico, Brazil and Dominican Republic. Next come Asian countries such as China, India, Sri Lanka
Major competitors:
o Dried Pineapple: Mexico and Thailand
o Dried Papaya: Thailand and Vietnam
Our Competitive advantage includes the duty free advantage of AGOA, technical state of the art facility as well as our strong network with buyers.

Promotion
Within the first 3 years, we will not heavily spend on promoting AGA Food in the US. Instead, the focus for the first year of operations is in defining the branding (name, website) and more importantly the packaging.

Distribution
Various retail stores have recently increased variety and shelve space for exotic fruits:
Our tactic is to partner with a contract packer/distributor in order to target specialized grocery stores as soon as AGA Food two first customers will be served.

Price
We consider that AGA Food selling price has also to take into account mark ups for retailer and distributors.
The result is that AGA brand can be sold at introductory prices of $1.38 per 4 oz compared to $1.99 for private labels

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

My products allow the customer to enjoy its snack while keeping essentials values:
- Health: organic snacks
- Social Impact (making a difference in the lives of farmers growing those products)
- Environment issues and contributing to the conservation of the environment through cultivation techniques used by our farmers.

The Entrepreneur & Management

Describe the entrepreneur & management

My background in Finance and Marketing is a valued asset for the success of this project. As Director of AGA Consulting, I spent several years helping small and medium businesses in Cameroon get financing. Under the intermediation of AGA a textile group (Blaz Design) has signed an agreement with a USA partner (Southern Textile Exchange) in presence of the USA ambassador to sell 1 million pants per year. Our strength in Marketing and joint venture negotiation will be an important asset for the Organic snacks project. By attending several trade shows in the USA, I have also build a strong network of buyers who will be our initial clients for the organic snacks.
Living in the USA which is the main target market has allowed me to measure the quality standard for the product, packaging, sanitation practices, certifications that is expected from the customer point of view.

Development

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

AGA” has helped farmers to get organized into associations and GIC (Community Groups) and has been monitoring their farming techniques for more than a year. This project will allow stable stream of revenue for families, enough surpluses to carry out community projects.

1- Socio-economic impact :
- Improve farmers’ incomes, enabling farmers to invest in their families’ educations, health care, and homes.
- Improve community and family stabilization by providing local economic opportunities ( farmers groups owning their own dryers)
- Reduce cities overpopulation as people will be encouraged to stay on their family farms and do not need to migrate to larger cities for employment.

2- Long term sustainability is assured as we are negotiating commercial agreements with customers who are buying organic dried fruits and willing to pay the premium prices over conventional, as they are concern about their health as well as environment issues.

3- Scalability: This project can be expanded to other regions of central Africa with critical conservation issues as the market expands and we get more clients interested on eating healthy products while having an impact on the conservation of the environment and the lives of people in rural areas.

4- Community involvement: the bonus paid to farmers for the high quality of their products will be used for social projects like educational and health centers. The decision on the community project to carry out is made by farmers themselves. AGA is dedicated to establishing safe and equitable working conditions for farmers.

1 comment

Great project needs to be replicatd

Hi Laura,
That is a great idea that needs to be replicated especailly if you can secure an output market at inception as this can be used to raise a structured farming financing. Will like to exchange with you more on the subject and others.
kwadjo
kwadjo_vidja@yahoo.com

11 May 09, 12:16 kwadjo Vidja, 11 May 09, 12:16