MOJI MOGARI
Jul 11, 2015
MOJI MOGARI
OVERVIEW
OVER OF AFGRI
COLLATERAL MANAGEMENTCOLLATERAL MANAGEMENT
GENERAL AGRICULTURAL ISSUES OF CONCERN
GLOBAL CHALLENGES
OPPORTUNITIES IN SOUTHERN AFRICA
AFGRI’S APPROACH TO VALUE CHAINS
GENERAL AGRICULTURAL ISSUES OF CONCERN
OPPORTUNITIES IN SOUTHERN AFRICA
AFGRI’S APPROACH TO VALUE CHAINS
1. OVERVIEW OF AFGRI
• 65 Silo complexes ± 4,0m tons (incl. Zambia)
• Debtors book of ± R5.6bn of which 50% are individual
farmers
• 1000 000 tons of Animal Feed
(including Natal-Agri)
• Largest John Deere dealer in Southern Hemisphere
OVERVIEW OF AFGRI Cont1
4,0m tons (incl. Zambia)
R5.6bn of which 50% are individual
Largest John Deere dealer in Southern Hemisphere
Total Agriculture SolutionProcure Direct (Farmers)
Procure Indirect (Mills)
Market Product (SAFEX)
Animal Feeds
Market
InfrastructureStorage
Logistics
Risk Management
alternatives
Total Agriculture Solution
Finance
Insurance Start Up Insurance
Inputs Equipment
Fertilizer
Seed
Chemicals
BUSINESS MODEL
SERVICESAGRI-
SERVICES
AFGRI
FOODSAFGRI
FOODS
AFGRI is a leading SoAfrican services busin
offering a wide rang
physical and intellec
inputs to farmprocessors and user
agricultural produ
AGRI SERVICES
AGRI-FIN
SERVICES
FOODS
NEW SEGMENTAL STRUCTURE
Operational activities
Capital Broking
Logistics Services
Capital:CreditTreasuryInsurancebroking
Financial solutions
for agriculture
Logistics:•Grain handling & storage• 65 silo complexes• Five bunkers• 4 million ton capacity
Trading:• Grain & commodity trading
Broking:•Price risk and hedging solutions for producers and consumers of agricultural products•No proprietary trading
Logistics Trading
Tailor made financial solutions to farmers, processors and consumers of agricultural products
trading•No proprietary trading
Value-add products and services supplied to a wide variety of customers, especially famers to support and grow their farming operations
NEW SEGMENTAL STRUCTURE
Operational activities
Producer Services
Animal Protein Oil & Prote
Retail:• 60 retail outlets• FarmCity• John Deere agency & workshop
Primary Inputs:•Direct supply of diesel, fertiliser and seed.• Agri-chemical
Animal Feeds:•Animal feed technology, formulation and production•Scientific services and equipment retail
Broilers:•Poultry production
Oil & Protein:• Bulk supplier oedible oils and fasoya and cotton protein for animafeed and texturissoya protein for human consump
Retail Primary
Inputs
add products and services supplied to a wide variety of customers, especially famers to support and grow their farming
• Agri-chemical distribution•Advisory services
•Poultry production from hatching to abattoir in the Daybreak Group
Expanding into the agricultural processing and food production sectors and comprises Animal feeDaybreak farms & Nedan oil businunits
NEW SEGMENTAL STRUCTURE (cont.)
Operational activities
Capital
Capital:
• Credit
• Treasury
• Insurance broking
Financial solutions for agricultureFinancial solutions for agriculture
Tailor made financial solutions to farmers, processors and consumers of agricultural products
NEW SEGMENTAL STRUCTURE (cont.)
Operational activities
Broking
Broking:
•Price risk and hedging solutions for
producers and consumers of
agricultural products
•No proprietary trading
Tailor made financial solutions to farmers, processors and consumers of agricultural products
NEW SEGMENTAL STRUCTURE (cont.)
Operational activities
Logistics Services
Logistics:• Grain handling & storage
• 65 silo complexes
• Five bunkers
• 4 million ton capacity
Trading:
Logistics Trading
Trading:
• Grain & commodity trading
• No proprietary trading
Value-add products and services supplied to a wide variety of customers, especially famers to support and grow their farming
operations
NEW SEGMENTAL STRUCTURE (cont.)
Operational activities
Producer Services
Retail:• 60 retail outlets
• FarmCity
• John Deere agency & workshop
Primary Inputs:•Direct supply of diesel, fertiliser and
Retail Primary Inputs
add products and services supplied to a wide variety of customers, especially famers to support and grow their farming
operations
•Direct supply of diesel, fertiliser and
seed.
• Agri-chemical distribution
•Advisory services
NEW SEGMENTAL STRUCTURE (cont.)
Operational activities
Animal Protein
Animal Feeds:• Animal feed technology, formulation
and production
• Scientific services and equipment
retail
Broilers:Broilers:• Poultry production from hatching to
abattoir in the Daybreak Group
Expanding into the agricultural processing and food production sectors and comprises Animal feeds, Daybreak farms & Nedan oil
business units
NEW SEGMENTAL STRUCTURE (cont.)
Operational activities
Oil & Protein
Oil & Protein:• Bulk supplier of edible oils and fats,
soya and cotton protein for animal
feed and texturised soya protein for
human consumption
Expanding into the agricultural processing and food production sectors and comprises Animal feeds, Daybreak farms & Nedan oil
business units
Infrastructure: Logistics
3 Network Architecture
On-site
Transactional
Grading PC
On-site ART PC
Transactional
Server
On-site
Transactional
Grading PC
Grading PC
Grading PC
On-site
Transactional
Grading PC
On-site ART PC
ART Server
Grading PC
On-site
Transactional
Grading PC
On-site ART PC
Acorn Inventory Measurerement & Survey ‘AIMS’
. General Agricultural Issues of
Concern
Constrained competitiveness and profitabilityConstrained competitiveness and profitability
Lack of confidence and growth in the sector
Lack of investment in the sector and private sector
Global financial crisis (exports and credit risk)
Competing claims for resources Competing claims for resources
Implementation of Strategic Plan for SA Agriculture, including equitable participation
Food security risk: globally, continentally, regionally, nationally, and last but not least, at household level.
General Agricultural Issues of
Constrained competitiveness and profitabilityConstrained competitiveness and profitability
Lack of confidence and growth in the sector
Lack of investment in the sector – both from public
Global financial crisis (exports and credit risk)
Competing claims for resources Competing claims for resources
Implementation of Strategic Plan for SA Agriculture, including equitable participation
Food security risk: globally, continentally, regionally, nationally, and last but not least, at household level.
FOOD PRODUCTION CAPACITY ENHANCEMENT
5. OPPORTUNITIES IN SOUTHERN AFRICA
INVESTMENT IN FOOD INFRASTRUCTURE
UNDER UTILIZED ARABLE LAND , WITH AVAILABLE
WATER RESOURCE
GREATER LOCAL NEED FOR SUSTAINABLE FOOD
PRODUCTION
FOOD PRODUCTION CAPACITY ENHANCEMENT
5. OPPORTUNITIES IN SOUTHERN AFRICA
INVESTMENT IN FOOD INFRASTRUCTURE
UNDER UTILIZED ARABLE LAND , WITH AVAILABLE
GREATER LOCAL NEED FOR SUSTAINABLE FOOD
6 VALUE CHAINDIRECT
SUPPLIERS
PRODUCER
SERVICES
RETAILPRIMARY
INPUTSLOGISTICS
DAY 30 DAY 200
Direct
ManufacturingGrowth period
PLANT HARVESTPLANT HARVEST
FINANCIAL SERVICES
CAPITAL
LOGISTICS FOODS RE
LOGISTICS TRADINGANIMAL
PROTEIN
OIL &
PROTEIN
DAY 300 DAY 350
Storage ProcessingEn
Cust
TRADE SALETRADE SALE
FINANCIAL SERVICES
BROKING
VALUE CHAIN (cont)
5. GROWER
GRAIN
4. AFGRI ZIM OR EQUIVALENT:
MANAGES THE SEASONAL FACILITY ON
BEHALF OF THE MILLERS
5. PRODUCTION
SUPPLY
CONTRACTS
GRAIN
PRODUCERS
CREDIT FACILITY
ADVANCED BY AFGRI ZIM
ON THE BASIS OF
PURCHASE ORDER, AND
THE MILLER
GUARUNTEEING THE
FACILITY
MILLERS BUY THE MILLERS AND
OTHER BULK
3. AFGRI ZIM
REGISTERES BOND
ON PHYSICAL
ASSETS OF THE
MILLERS
GRAIN AT SAFEX
LINKED / MARKET
PRICE, AND THE
PRODUCER
CREDIT LINES ARE
SETTLED IN FULL
CONTRACTS
OTHER BULK
BUYERS
6.
PURCHASE ORDER
ISSUED TO THE
PRODUCERS.
1. GENERAL/BUYING
FACILITY RAIZED TO
ENABLE THE MILLERS
TO BUY FROM
PRODUCERS.
2. THEN AFGRI ZIM
ENTERS INTO AN
AGENCY
AGREEMENT AT A
FEE TO ARRANGE
AND MANAGE
ADVANCES TO THE
PRODUCERS , AND
RISK MANAGEMENT
AFGRI
THANKS YOU
AFGRI
THANKS YOU