BUSINESS PLAN FOR COMMERCIAL PROCESSING OF
CASSAVA, GRAINS & OILSEEDS
BY
DEVAFRIC INVESTMENTS LIMITED
P.O. Box 21948, Kampala, Uganda
, Telephone: 0752662383, 0772662383
Email:
Presented to:
Prepared by:
Packwell Business and Consulting Gurus Limited
Suite 20, Wilken Buildings, Opposite
Roofing Industries,
Entebbe Road, Lubowa, Wakiso District
P. O. Box 35136
Kampala, Uganda.
Email: packwellbusinessgurus@gmail.com
Contacts: 0778065414/0772448812
SEPTEMBER, 2018
TABLE OF CONTENTS
Table of Contents......................................................................................................... 1
List of Acronyms .......................................................................................................... 3
Executive Summary ..................................................................................................... 5
SECTION 1: THE BUSINESS........................................................................................ 7
1.2 The Company ........................................................................................................ 8
1.3 The Opportunity .............................................................................................................................. 9
1.4 Need to be filled ............................................................................................................................... 9
SECTION 2: INDUSTRY ANALYSIS ............................................................................. 11
2.1 Industry Overview ................................................................................................ 11
2.1.1 Seeds Production in Uganda.......................................................................................................... 11
2.1.2 Trends ............................................................................................................................................ 11
2.2 Risks ...................................................................................................................................................... 12
2.3 Barriers to Entry.................................................................................................................................... 13
2.4 SWOT Analysis ...................................................................................................................................... 13
SECTION 3: MARKETING PLAN................................................................................. 16
3.1 Market Description ............................................................................................................................... 16
3.2 Market Objectives...................................................................................................................... 16
3.3 Products & Services offered ................................................................................................... 16
3.4 Product Differentiation ............................................................................................................ 16
3.5 Target Market ............................................................................................................................. 16
3.6 Pricing ........................................................................................................................................... 17
3.7 Place-Distribution: .................................................................................................................... 17
3.8 Promotion .................................................................................................................................... 18
3.9 Competition ................................................................................................................................. 19
3.10 Creating sustainable competitive advantage ................................................................. 19
3.11 Marketing strategies....................................................................................................................... 20
SECTION 4: DESCRIPTION OF PRODUCTION AND OPERATIONAL PLAN ................. 21
4.1 Seed Production and Processing................................................................................................ 21
4.2 Equipment Required .................................................................................................................... 23
4.3 Quality Control .............................................................................................................................. 40
4.4 Activities and Milestones ............................................................................................................ 40
SECTION 5:
MANAGEMENT PLAN ....................................................................... 43
5.2 The Human Resources Plan .............................................................................. 43
5.3 Organization Chart for “Nile Quality Seeds Ltd .................................................... 45
5.4 Profiles of the Board of Directors ......................................................................... 46
SECTION 6: FINANCIALS........................................................................................... 52
6.1 Summary of the Financials ........................................................................................................ 53
6.2 Sales Projections............................................................................................................................ 54
6.3 Projected Income Statement ...................................................................................................... 56
6.4 Projected Statement of Financial Position ............................................................................ 57
6.5 Projected Statement of Cash flows .......................................................................................... 58
6.6 Break-even Analysis ..................................................................................................................... 59
6.7 Investment Appraisal ................................................................................................................... 60
LIST OF ACRONYMS
EAC
East African Community
LIST OF TABLES
Table 1: National Annual Seed Demand for selected Grain Crop Seeds
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Table 2: Seed supply from both formal and informal seed sectors
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Table 3: Analysis of Demand and Supply for selected Grain Crop Seeds
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EXECUTIVE SUMMARY
Nile Quality Seeds Ltd (NiSeed) is private limited company incorporated on
21st
November 2016 and with the Head Quarters in Lira Town, 5km along the Lira-Kampala
Road. The company is directed and controlled by a seven member Board of Directors.
NiSeed envisions being the leading high quality seed producer in Uganda.
NiSeed will produce and supply beans, soybean, rice and maize certified seeds in the
short-run and will expand business to include other seeds in the medium to long-term.
This will be done on the 200 acres of land already acquired by partnering with five
selected local farmer cooperatives with supervision of technical staff from Niseed, NARO
and Ministry of Agriculture.
At the headquarters is an existing store constructed with IFDC grant worth
USD$300,000, with an area of 40 x 50m2, however NiSeed is mobilizing funds from the
PSFU through the “start” funding facility of US$ 99,053 to improve the full range of
processes by acquiring state-of-the-art value addition production equipment worth US$
99,053.
Farmers in Uganda produce between 80%-85% of their seed themselves while only 20%
of their seed is got from the formal system in Uganda. (ISSD Briefing Note –September
2012). With the current number of about 30 registered national seed companies which
produce certified seed of hybrid and open pollinated varieties (OPVs), completion is still
less stiff as the need to be filled is immense. NiSeed therefore aims at capturing up to
8% of the market share represented by production of 650 MTs of certified seed by the
fifth year.
Revenue is expected to grow by 16% over the period, averaging 5% per annum,
represented by 1.7billion Ugx, while earnings after tax is averaging at 5% per annum
represented by 145 million Ugx by over the five year period
The percentage contribution to the revenue streams product wise is 32% Beans, 30%
maize, 20% rice and 18% soybeans.
Return on Capital Employed is expected at 109% over the period meaning that for every
Shilling Shareholders invest will return 1.09 Shs. This is clearly above most fixed
deposit rates or treasury bills.
The Internal Rate of Return (IRR) is estimated at 54.58% meaning that the investment
will make more money than its actual cost. It is the rate at which NPV is Zero and in
this case the cost of capital is 12.73% which is far less than the IRR. This is a viable
venture.
The Payback period will be 3 year, which is a fairly short period an investment of such
magnitude.
With the PSFU “START” Grant of 270m million 0r US$60,585; the investment will in
total add to the wealth of the owners over Ugx 503 million over the 5 year period, this is
in no doubt a viable venture.
SECTION 1: THE BUSINESS
1.1 Background
Devafric Investments Limited (DIL) is a private limited company incorporated on 2008
with its headquarters in Loro, Oyam District. Its main business is to process, market
and sell grains, legumes including maize, wheat, soybeans sunflower, groundnuts, fish,
animal and poultry feeds and related products.
The company is directed and
controlled by a two member Board of Directors-Mr. Okello Richard and Ms. Betty
Okello, who are highly qualified, knowledgeable and experienced in grain processing
and business administration.
DIL envisions being a leading brand of processed grains, animal feeds and cereal
products in Northern and the Albertine Regions of Uganda.
DIL started operations in 2009 growing and processing of maize. It acquired 45 acres in
Karuma and additionally leased 200 acres of land on which about 2000 metric tons of
maize was processed into maize flour and sold off. This mass production was facilitated
by machinery including tractors which were leased and a chain excavator which was
procured. DIL has been producing 13,000 metric tons annually and projects to
maintain process the same level.
Due to falling prices of maize and maize products, the company additionally started
processing soybeans from 2010. This product is mainly supplied to Mt. Meru and
Mukwano Industries for use in making cooking oils. The company has been processing
16,000 metric tons annually and projects to produce 30,000 metric tons this year.
In 2018, after doing an informal market assessment, it was prudent for DIL to start
processing cassava flour in Loro sub-county-Oyam district. The company has leased
650 acres of land on which to grow cassava in addition to procuring from local farmers.
The cassava is processed to make flour and supplied to Nile and Uganda Breweries and
among other customers. This year alone, DIL is expecting to process and sell 20,000
metric tons of which 500 will be supplied to Nile and Uganda breweries.
Cognizant of the fact that the business has gained enough experience in processing
grains, aware that it must scale-up production in order to obtain maximum benefit
give the growing market for grain, DIL intends to expand business by establishing a
grain processing plant at Namanve Industrial Park in Kampala.
This will involve acquisition of land, construction of silos, warehouses, offices and
procurement of grain processing plant, all of which will need an initial outlay of US$ 1
million.
1.2 The Company
Devafric Investments Limited (DIL) was incorporated in 2008 to mainly process and sell
grains. Its headquarters is in Kampala and current field operations in Loro, Oyam
District.
Mission
To promote grain and cereal production, processing and value addition in the Northern
and the Albertine regions of Uganda
Objectives
I. To increase the company's market share
2. To promote value addition through grain processing
3. To increase annual turn-over by 7.5 in 2018 and 10 percent annually through to
2020.
Development Partners and Collaborators Organizations
1.3 The Opportunity
Uganda has the unrivaled potential to be the food basket of the East African
Community, as well as the Great Lakes regions, with the capacity to export processed
food stuffs to the wider COMESA economic bloc if more investment is targeted at
processing more of the agro products. Uganda is among the leading producers of coffee
and bananas. It is also a major producer of tea, cotton (including organic cotton),
tobacco, cereals, oilseeds (simsim, soybeans, sunflower, etc), fresh and preserved fruit,
vegetables and nuts, essential oils, orchids, flowers and sericulture (silk). Opportunities
include commercial farming and value addition, as well as the manufacture of inputs
(fertilizers, pesticides etc.). Public Private Partnership investment opportunities exist in
the commercial production of cereals (maize and rice) and beans.
The Uganda National Development Plan prioritizes agriculture among the key
productive sectors driving growth in the national economy. In the Comprehensive Africa
Agriculture Development Program (CAADP), Uganda has committed to the principle of
agriculture-led growth as the main strategy; to the pursuit of a 6% average annual
growth rate for the agriculture sector; and to increase the share of the national budget
allocated to the agriculture sector to reach an eventual target of 10%. The Agriculture
Sector Development Strategy and Investment Plan (DSIP) 2010/11–2014/15 is the
foundation for the CAADP Compact and its implementation will simultaneously achieve
both the national and CAADP outcomes and targets.
1.4 Need to be filled
The total production for maize in Uganda was estimated at 2,748,000 MT (metric tons)
per annum in 2012 per statistics from (FAOSTAT, Uganda maize production quantity,
2012) with average yields for Ugandan producers estimated at 1.5 tons per hectare and
an average price of 600 USh/kg. Maize is not a traditional crop for Ugandan
consumption; however, local demand for maize is growing, especially in urban areas
and with the younger population.
A majority of the maize produced in Uganda supports the local brewery industry, where
flour is fermented to produce local brews. There are also a number of different export
markets for maize, with strong demand from Kenya, Southern Sudan and the
Democratic Republic of the Congo (DRC).
Southern Sudan, the DRC, and the informal market in Kenya buy low-quality maize.
The formal maize trade in Kenya is concerned with a higher grade, reflecting standards
recently adopted in the East Africa Community (EAC) limiting levels of foreign matter,
mold, and levels of aflatoxins in maize. Because of these standards for maize, efforts are
being made to curtail informal trade to Kenya and boost the quality of maize in Uganda.
Research estimated that about 80% of trade takes place through informal trading
channels.
Soybeans: Annual production of soybeans in Uganda was estimated at 638,000 MT per
annum in 2014, with average of 0.75–1 ton per hectare and an average price of 2,200
USh/kg. Maize and soybean market systems are very similar as many market actors
(including traders, wholesalers, and larger buyers) involved in maize are also involved
in beans, including soybeans. This is due to the similar routes to market, as well as
similar storage facilities.
Processors transform soybean seeds into soy oil, soy cake, unimix, soy flour and soy
bits. However, local demand for soybeans is very limited, due to a lack of awareness of
the nutritious consumption of soy. Processors like Reco Industries, Sesaco Corporation,
East African Basic Foods and others are hoping to change this as they develop soy
products for the national market. Other processors, such as Mukwano Industries, Ltd.
or Mt Meru Millers, export soy cake for feed to regional markets, Asia and the Middle
East.
There are export opportunities of oilseeds, exports of soybean rose by 210.2% from USD
0.29 million in 2010 to USD 0.91 million in 2014, during 2010-14, maize exports rose
by around 14% to USD 43.5 million. (Grains Market in Uganda: Analysis of Production,
Consumption, and Trade of Major Cereals, Pulses and Oil seeds, Trends and Forecast
(2017 - 2022) This could be exploited by DIL to sell off its produce.
SECTION 2: INDUSTRY ANALYSIS
2.1
INDUSTRY OVERVIEW
2.1.1 Cassava, Grain & Seed Oil Processing in Uganda
The National Grain Trade Policy 2015 focuses on interventions aimed at improving the
supply of quality grain through adoption of post-harvest handling best practices, and
use of modern storage and value addition facilities. It outlines the vision, mission and
strategic objectives to be pursued during the implementation process. It highlights
strategic policy actions that will transform the grain sector to ensure sustainable and
accelerated growth in grain production, quality storage, value addition and trade
volumes.
The National Grain Trade Policy is in line with Uganda’s Vision 2040 and the National
Development Plan II in respect of provision of food security, improving income
generation and advancement of industrialization. Its implementation will be multisectoral; including public private partnership arrangements.
2.1.2 Trends
Cassava
The Bill and Melinda Gates Foundation-supported project is developing value chains for
High Quality Cassava Flour in five countries—Ghana, Tanzania, Nigeria, Malawi and
Uganda—to improve livelihoods and incomes of smallholder households.
In Uganda, the project is implemented by Africa Innovations Institute, and was first
piloted in the eastern region in 2001. It has now been rolled out to central region.
They have built the capacity of cassava processors in Nakasongola, link them to
aggregators
and
breweries
who
buy
from
them.
The demand in the brewing industry has opened opportunities for the farmers who sell
in bulk to aggregators who buy inputs on behalf of the breweries.
Uganda Breweries (UBL) currently requires 700 metric tons of high quality cassava
flour
per
month
but
is
expected
to
rise
to
1,500
metric
tons.
UBL mainly use the bulking agent model where companies or farmer groups,
cooperatives and individuals who bulk material meeting their specifications.
Apart from UBL, the ethanol processing plant in Lira (Kampec) requires 10 tonnes of
dry cassava. Various companies require cassava starch which they export to China for
pharmaceuticals, and the demand continues to be high. South Sudan refugees crave
for cassava while last year, 2,000 bags of cassava went to Rwanda for about Shs300m.
The huge local and Congo market also remains demanding. This ever growing market is
what DIL intends to take advantage of and produce more cassava.
Maize
According to the National Agricultural Advisory Services, maize has increasingly
become a staple food in many parts of the country due to changes in people’s eating
habits.
This, according to business experts, presents an investment opportunity for anyone to
venture out through value addition if the crop is milled into flour.
In the market a kilogramme of maize flour costs an average of Shs1, 000 during
scarcity and as low as Shs 200 during bumper harvest
In Uganda, small scale farmers who constitute the bulk of the rural poor, also account
for the largest share of maize producers. Maize is grown in every part of the country
and a direct source of livelihood to more than two million households, over 1,000
traders and about 600 millers.
Increasingly, maize has become a major non-traditional export cash crop particularly
benefitting smallholder farmers.
Soybeans
The common varieties of soybeans on high demand currently are MAKSOY3N and
MAKSOY 4N. These take two take 90 to 108 days in the garden to mature, ready for
harvest and are also resistant to drought and pests.
Soybean oil is extracted from soybeans and is a good source of healthy fats, including
omega-3 fatty acids and polyunsaturated fats. Soy milk is a plant-based drink
produced by soaking and grinding soybeans, boiling the mixture, and filtering out
remaining particulates. It is a stable emulsion of oil, water, and protein. If one is
allergic to dairy, lactose intolerant, soy milk is a perfect alternative.
The biggest buyers of soya beans within the northern region are Mt Meru Millers in Lira
district and Mukwano Group of Companies who buy a kilogramme of soya beans at
currently Shs1,100. DIL sales its cassava to the two bulk-buyers.
2.2 Risks






The company may face stiff conditions for export to other countries which may
negatively affect production and sales volumes.
The major threat to the company is that Uganda may experience a decline in yields
due to soil exhaustion unless measures are put in place to encourage the uses of
organic fertilizers.
Climatic change leading to drought and flooding which may adversely affect the
farmers and the entire value chain.
The threat from Genetically Modified Organisms in a way that organic crops are
threatened by inadvertent contamination from genetically engineered crops cannot
be under-estimated.
According to a study conducted by CABI in collaboration with MAAIF in 2017, crop
pests, diseases and weeds are identified as the greatest risk to Ugandan agriculture.
Losses due to pests and diseases are estimated at 10-20% (pre-harvest), 20-30%
(post-harvest) and up to 100% for perishable crops and export crops. This may
negatively impact production
According to the Uganda Biosciences Information Centre (UBIC), Cassava Brown
Streak Disease and Cassava Mosaic are reducing cassava production and the
country is producing a mere 6.7m tons annually compared to possible 30 million.
Due to drought and pests Ugandan farmers average maize yield is 2.7 tons per
hectare compared to possible 9 tons.
2.4 SWOT Analysis
Strengths
Weaknesses
 Proximity to the major market of
 Lack of adequate financing to deal
South Sudan and major towns of
in large volumes of grain.
Kampala, Gulu, Arua, Moroto,
 Poor post-harvest handling
Soroti and Mbale.
practices by farmers leading to low
 Low unit cost of production as the
yields, poor quality produce and
crop is easy to cultivate and
general loss of revenue.
maintain.
 Lack of affordable crop credit
 Availability of fertile soils on
financing
which to grow grains and oilseeds
 Highly qualified and experienced
human resources.
 Availability of leasable large tracts
of land which to grow cassava,
grains & seed oils.
Opportunities
Threat
 Growing demand for maize flour,
cassava flour and soybeans.
 Emergence of commercial farmers
which makes it easy to collectively
bargain for better trade conditions.
 Goodwill and support by
government and UIA
 Emergence of farmer cooperatives
is expected to bring about
economies of scale as farmers will
grow agricultural produce
massively.
 Stiff competition from other grain
processors
 Unstable prices of grains
 Maize cultivation is entirely nature
dependent (rain fed agriculture)
and hence affected by prolonged
drought.
 Vagaries of weather such as
drought that may negatively affect
yields
 The threat from Genetically
Modified Organisms in a way that
organic crops are threatened by
inadvertent contamination from
genetically engineered crops
cannot be under-estimated
 High air transport costs for
shipments to international markets
Points of Leverage
On the basis of the strengths, weakness, opportunities and threats (SWOT) identified,
the following leverage points provide the best opportunity for accentuating the
intervention suggested.
 Locating the operations in Loro-Oyam which is re-known for mass cultivation of
cassava, soybeans and maize is the most viable option
 Locating the plant at Namanve which is near the market is imperative
 Working with the existing organized farmers cooperatives to guaranty supply of
produce is the way to go.
SECTION 3:
MARKETING PLAN
3.1 Market Description
Marketing Goal: DIL expects to process 130MTs of maize, 300 MTs of soybeans, 200
MTs of cassava and 100 MTs of animal, fish and poultry feeds in the first year. This is
represented by a total of 730 MTs, by year three, it will be processing 778 MTs and 846
MTs in year five.
3.2 Market Objectives
 Maintain steady market growth
 Generate increased brand awareness and visibility quantified by feedback of
customers.
3.3 Products offered
DIL offers the following products: a) Maize & Cassava Flour
b) Soybeans
c) Fish, Poultry and Animal Feeds
3.4 Product Differentiation
DIL intends to differentiate its product by ensuring a good brand name, quality seed,
latest technology, good packaging in a range of bags, service delivery-after sales service
and offer support in form of agronomic advice to farmers
3.5 Target Market
DIL’s target market includes:
 Wholesalers/deals, Retailers, Seed Oil manufacturing industries like Mukwano and
Mt. Meru Industries, beer manufacturing companies like Nile and Uganda Breweries
 Supermarkets, bakeries
 Institutions like schools, hospitals & hotels
 Fish & Livestock feeds manufacturers
 General Public
Animal feeds: There is a big deficit of alternative feeds for livestock during the dry
season, therefore grain & cereal feeds production process, offers a big solution to
mitigate the above shortage. The grain flour produced also offers a good raw material
for production of livestock feeds whose demand in the region is high due to many
mushrooming fish and poultry farms in Uganda.
3.6 Pricing
DIL charges competitive prices depending on cost recovery plus a mark-up. The gross
profit margin is 65% across board. These determined prices are also compared with
competitors’ prices so that final prices are charged.
The pricing policy is geared towards achieving four major objectives including sales
growth, earning an acceptable profit, gaining a competitive advantage, and creating a
positive consumer perception of the quality products on offer.
DIL adopts a penetration-pricing strategy by which products are offered at lower prices
than the major competitors in order to stimulate demand and have a cutting edge over
the competitors. This is made possible by the low prime costs incurred in the
production process.
Offerings and Pricing Structure
Product
Package
Cost
price
per unit
Per Kg
Ugsh
Maize Flour
1, 2, 5, 10,
560
25, 50, 100
Cassava Flour As above
350
Soybeans
As above
420
Feeds
25, 50, 100
125
Unit Selling
Price
Ugsh
1,600
Gross
Profit
Margin
%
65%
1,000
1,200
500
65%
65%
75%
A
discou
nt of
up to
10%
will
offere
d for
bulk purchases.
Other factors include: DIL bases on the following issues in its pricing decisions:
 The ruling market prices applied
 Fixed costs such as staff salaries, fuel and cost of raw materials need to recovered
 Payment terms are generally by cash. Credit is permitted in line with the company
credit policy.
3.7 Place-Distribution:
When selecting a channel of distribution, the DIL will consider the following:
 The consumer characteristics, needs and segments.
 The company goals, resources, expertise and experience
 The product value, complexity, and bulkiness
 The competition characteristics and tactics
 Distribution channels alternatives, characteristics and availability
 Legalities: current and pending laws
 Warehousing
 Transportation
 Inventory management
 Order processing
 Market Coverage-number of locations
 Specific distribution channels
The existing distribution network will be improved to make it more elaborate and
robust. This will involve establishing regional outlets in Eastern-Mbale, Northern-Lira,
West Nile-Arua, Central-Kampala, Western-Mbarara and Mid-Western-Masindi. This
will ease the distributions as wholesalers and other large customers will access the
products at those points.
A fleet of Trucks will leased to regularly transport the products to regional outlets from
Lira and Kampala. This cost will have to be covered by increased sales volumes as a
result of country wide spread of the product.
DIL will also establish networks with international exporters that will create linkages
with the foreign market especially South Sudan, the EAC, SADC and EU in the medium
to long-term.
3.8 Promotion
The following promotional activities will be conducted:Advertising
 Periodic aggressive advertising to the target market will be done mainly through
local newspapers, from quarter page ads announcing its promotional campaigns to
business card-sized logo ads.
 Use of outdoor signage such as large bill boards in strategic locations in the country
 Establish a business website for purposes of reaching out to a wider network of
domestic and foreign potential customers.
 Additional places to post flyers/business cards or for a business card ad include
bulletin boards in public buildings (organizations, government agencies, commercial
centers).
Direct Marketing: Specific customers like organizations, government agencies and big
suppliers will be approached through use of responding to supply bid invitations,
writing offer letter, distributing brochures to prospective customers, e-mailing them,
making sales calls both in person and over the phone.
Publicity and Public Relations
 Media releases will be sent to newspapers including New Vision, Monitor, Bukedde,
Rupiny, Etop and Red pepper announcing the launch of DIL’s new processing plant
at Namanve
 Radio talk shows, adverts and spots will regularly be aired
 Posters and Banners will be put up.
 Sponsorships
 Participating in tradeshows and fairs.
 Sharing the message “DIL Quality Products” on invoices, advertisements, brochures,
stationary and business cards, product packages, company newsletters and
websites.
 DIL will be a member of the Uganda Grain Millers Association, Uganda
Manufacturers Association, Chamber of Commerce and Uganda Investment
Authority as a means of networking in a bid to tap local and foreign markets.
 The Managing Director will occasionally attend speaking engagements at community
or civic organizations, seminars, workshops as a low-cost way of increasing
awareness and building goodwill in the business community
Word of Mouth
This will involve any informal communication about the product by ordinary
individuals, satisfied customers, or people specifically engaged to create word of mouth
momentum. These will include the marketing team and the rest of the staff.
3.9 Competition
The National Working Group on Food Fortification (NWGFF) carried out a nationwide
mapping exercise of maize millers. Findings indicated that there were 780 maize millers
from 62 districts; the central region had 38 percent, eastern 22 percent, northern 22
percent and western 18 percent. Most millers (46 percent) had a production capacity of
1-5 metric tons per day. It is noted that most maize millers also mill cassava, millet and
sorghum.
DIL will communicate a superior message that will enable its customers to make a
difference in their experience just by purchasing its products. The company will be
known for differentiation, superior quality and simplicity in marketing of its brand.
While the products will be superior, since we will be cost leaders owing to cheap raw
material and labour, they will be sold at affordable prices.
3.10 Creating sustainable competitive advantage
The impact on smallholder farmers will be high as they will no longer suffer postharvest losses due to low returns from sale of produce. An estimated number of over
100 local farmers will benefit directly as cassava out-growers. Their living standards
will improve owing to the better prices offered by DIL to them.
DIL has positioned itself to become a market leader of processing cassava and grain
flour and soybeans in Uganda and thus enjoys the following advantages over
competitors:

Positioning: DIL offers fortified, organic and clean products like no other.

Product Strategy: The Company differentiates its products from others of its
competitors through unique branding and packaging, using unique, branded
containers such as plastic woven bags and small packages for households. This
enables the company products to be easily identified by customers thus increasing
on our market share.

Location – DIL’s operations are in Lira, Lango Sub-Region, Northern Uganda, a
region which is the breadbasket of maize, cassava, soybeans and rice.
Product Quality –NiSeed will professionally and carefully produce, multiply and
supply quality certified seed. Quality control will be integrated at every stage of
production in collaboration with Makerere University and NARO and in conformity
with MAAIF standards
Expert Knowledge – NiSeed boasts of highly professional staff and the fact that it is
in touch with the top breeders from Makerere University and NARO makes its seed
more competitive.
Intellectual property: SFBL has a registered trade mark and is working towards
obtaining a patent on its Sky product brands.
Agreements with customers and suppliers: NiSeed has signed long-term
production agreements with five local farmer co-operatives to multiply quality seed.







Control of costs: As cost leaders, NiSeed will multiply seed cheaply because of low
cost labour which will work to our advantage. Costs at all times will be controlled by
adhering to planned expenditure and limits. Periodical budget follow-ups, internal
control reviews and variance analysis will be carried out.
Control of channel: NiSeed will control the value chain by ensuring that both
downstream and upstream chains are controlled. This will be achieved by
contracting farmers to multiply seed, while distribution will be managed by
establishing regional outlets from where wholesalers and retailers can access its
quality seed for onward distribution to the final consumer.
Brand and Quality: The brand will standout for what its superior quality is,
making it the farmer’s first choice. Quality control will be ensured at every
production stage. The NiSeed brand will be a branding and packaging outlier
meaning that, it will be superior than all other competitor brands
3.11 Marketing strategies
Multi-pronged market strategies will be pursued including the following: DIL will take keen interest in selection of market segments, maintaining its
reputation as a reliable flour and oilseeds supplier, a company that is loyal to its
customers and gives additional benefits to them through.



The company will always be ahead of its competitors by offering superior quality
products consistently.
Building the brand: Well aware that a brand is an impression formed over time
through multiple experiences, DIL intends to build it through focusing on image,
reputation, and character, what the company is known as, associated with and what
is the one thing its customer will remember. The brand is intended to bring benefits
like being “on the list” in crowded markets, a sources of customer reference, a
barrier to losing customers, a source of premium for the company’s products and
the brand may be difficult to match by competitors.
The initial focus will be to satisfy the local market then export to countries in the
region.
SECTION 4: DESCRIPTION OF PRODUCTION AND OPERATIONAL PLAN
4.1 Cassava, Grain and Soybeans Processing
The Company`s main products include cassava and maize grain flour, soybeans and
fish, animal and poultry feeds.
For value addition, DIL grows cassava and maize but also procures some more from
local farmers and processes it into flour, packs and sells.
In a bid to ensure steady supply of raw materials, DIL provides its partner farmers with
seed loans, repayable by produc
Maize flour
DIL produces and sells maize flour to diverse markets including the local,
regional and international markets. The maize flour is produced in three
grades, which are first class, second class and ordinary and packaged
conveniently in 1kg, 2kg 5kg, 10kg, 25kg, 50kgs and 100kgs packs bags to
meet the different needs of the clients.
DIL buys dry maize grains from partner farmers in the locality, cleans it and
then processes high quality maize flour that is packaged in different sizes for
different customers. The dried and cleaned maize grains are stored to ensure
regular supply of raw materials. The planned technology process is illustrated
figure 1 below.
SILO #1
(Maize
grains)
Raw
maize
grains/
cereal
Warehouse
Cleaning
Packaging &
Marketing
Maize
Flour
SILO
(Maize
Flour Grade
I & II
Humidity/Drying
Peeling
Crushing
Milling &
Sieving
&
Grading
Maize
Bran
Figure 1: Maize milling technology process
Animal and Poultry feeds
DIL processes the by-product-maize bran into animal, fish and poultry feeds
for sale to farmers, stockists and middlemen traders. The feeds will be
packaged in bags of 10kg, 20kg, 50kg, and 100kg bags. This is to ensure that
22 | P a g e
all customer needs are met. The range of products will include broiler starter,
broiler finisher, layer starter, growers mash, and layer finisher in the case of
poultry. In the progressive years, the company also plans to produce fish
pellets for fish food to serve fish farmers.
4.2 Equipment Required
DIL will procure equipment for its Namanve new plant which does sorting,
drying, cleaning, grading, treatment, bagging & storage. These equipment are
manufactured by
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Hongdefa Maize flour milling machines since 1982 ,more than 30years
experience specially design according Africa marketing request ,such as
Kenya,Zambia Uganda, Tanzania, Mozambique, Nigeria, Ghana, Angola etc.
The maize flour milling machine have different capacity such as 50T/24h,
20T/24h,30T/24h,100T/24h,150T/24h, 250T/24h, 500T/24h maize milling equipment
for sale in Africa,Asia, South America.
1-Pre- conditioning and pre cleaning
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Pre-conditioning involves Isolation of seed from plant parts with which it was
harvested e.g. shelling
Pre-cleaning involves removal of external materials like trash, stones, clods
which are either in a larger size or lighter in weight. No pre-cleaning is required
for hand harvested The machine which ably does this is the Scalper.
Scalper
It removes the larger inert matter from the seeds. If it contains a single sieve it
is called as a scalper, while two sieves it is a rough cleaner. The unit consists of
a vibrating or rotating screen or sieve having perforation large enough to allow
the rough seed pass through readily.
Scalper-Rough Cleaner: Drum Scalper VA 900
The drum scalper is intended for separation of coarse impurities such as
straws, strings, paper, splinters of wood, maize husks etc. from granular or
mealy bulk products. Elimination of these impurities will exert a favorable
effect on the functional reliability and performance of the machines and
conveying elements of the processing line.
This Drum Scalper VA900 has the capacity to rough clean 120, 110 and 50
Tons per hour of maize, soybeans and rice respectively. Costs US$ 8,500
2- Huller – Scarifier
Have two rubber faced rough surfaces to rub the seeds. Dehulling (removal of
28 | P a g e
outer coat or husk) and scarifier (scratching the seed coat) can be done
simultaneously or separately. Its operations, Seed – rotating disc- centrifugal
force – thrown – huller- - suction chamber- removes lighter seeds like rice
seeds. Costs US$ 6,500
3- Maize Sheller MR 20
Cimbria Maize Shellers are designed for gentle separation of maize kernels from
the cobs and removal of rachis. They find application mainly in the seed
processing sector, where maize cobs are harvested as a whole unit. In the
processing plant, the machine is positioned after husking and cob drying. The
maize sheller removes the kernels in the gentlest possible way by rubbing the
cobs against each other without any risk of harming the germination capacity
of the sensitive maize seed. It has capacity of shelling 20 Tons per hour and it
costs US$ 7,000
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Step 2: Cleaning
Cleaning is carried out with air blasts and vibrating screens and is applicable
to all kinds of seeds. It is essentially the same as scalping but more refined. It
is performed mostly by one machine known as air-screen cleaner.
1-Air-Screen cleaner cum grader
The air-screen machine is the basic cleaner in most seed processing
plants. Almost all seed must be cleaned by air-screen cleaner before specific
specifications can be attempted. Machine size varies from small, two-screen
farm models to large industrial cleaners with 7-8 screens.
Two-screen models are used on farms, in breeder and foundation seed
programs and by experiment stations for processing small quantities of seed. In
most machines separations are made on the basis of differences in only one
physical characteristic.
30 | P a g e
The air-screen machine, however, effects separations on the basis of
differences in size and weight of seeds. This enables the air-screen machine to
use three cleaning elements: aspirator, in which light material is removed from
the seed mass; scalper in which good seed are dropped through screen
openings; but larger material is carried over the screen into a separate spout;
and grader, in which good crop seed ride over screen openings, while smaller
particles drop through. The cost is US$ 8,500
2-Sceen Cleaner: CIMBRIA DELTA SCREEN GRADERS-120 Series
The 120 Series is developed for precise grading of grain and seed, the gentle
flow of product through the machine ensures an excellent grading precision.
It has the following built-in elements: Shaker feeder  Air lifting fan  Pre- and After-suction  Electronic control
system,  Flexible screen flow
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It does very accurate separation between heavy and light product with a
minimal mixing zone and has the capacity of processing maize, soybeans and
rice, 2 Tons per Hour. Costs US$12,000
3-Destoner TS90
It can reliably extract stones, metallic parts and glass splinters and has the
Capacity to process 2.8 Tons per hour of Rice, 1.5 Tons per hour of Soybeans,
costs US$6,500
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Step 3: Cleaning and Grading
In order to obtain quality seed, it is necessary to clean the seed obtained from
the farm to get rid of inert materials, weed seeds, other crop seeds, other
variety seeds, damaged and deteriorated seed. Different kinds of seeds can be
separated when they differ in one or more physical characteristics. Physical
characteristics normally used to separate seeds are size, shape, length, weight,
colour, surface texture, affinity to liquids, electrical conductivity, etc.
The problem lies in identifying the most important property and use the
machine that separates seed using the identified property.
1- Gravity Separator:
This machine is fed with clean products that is after pre/fine cleaner, indent
cylinder, grader etc. The Cimbria GA 31 is suitable for this project and can
process 2 tons per hour of maize, rice and soybeans. Costs US$6,500
2-Sorting & Grading:
Cylindrical screening machines are used for sorting and grading of seed and
cereals such as grain, maize, sunflower, rice and similar commodities and also
generally granular products such as recycling products.
33 | P a g e
This method makes use of a combination of weight and surface characteristics
of the seed to be separated. The principle of floatation is employed here. A
mixture of seeds is fed onto the lower end of a sloping perforated table. Air is
forced up through the porous deck surface and the bed of seeds by a fan,
which stratifies the seeds in layers according to density with the lightest seeds
and particles of inert matter at the top and the heaviest at the bottom. An
oscillating movement of the table causes the seeds to move at different rates
across the deck. The lightest seeds float down under gravity and are discharged
at the lower end, while the heaviest ones are kicked up the slope by contact
with the oscillating deck and are discharged at the upper end. This machine
separates seeds of the same density but of different size and seeds of the same
size but of different densities.
The Cylindrical Screening Machine ZS 300-I series has the capacity can sort
and grade 0.9 Tons per hour of maize, Soybeans 1.6Tons per hour, rice 1 Ton
per hour. Costs US$ 8,000
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3-Coater: CENTRICOATER CC10
The Cimbria Centricoater is designed for coating value-added seeds with costly
seed treatments. The system ensures continuous batch operation utilizing a
highly accurate inlet scale together with a highly accurate chemical dosing
system controlled by a PLC.
The system provides improved seed coverage and more uniform distribution of
treatment material on the seed compared to traditional continuously operating
drum or screw-type coaters. It has the capacity to coat 1.8 Tons per hour of
grain. Costs US$ 5,500
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4-Solar Dryer
The dryer is constructed from a timber frame and UV resistant plastic sheeting
for walls and roofs. It will have five 2 meter high chimneys of 100 mm PVC
pipes with caps. The overall dimensions of the dryer will be 4 m wide, 5 m high
and 10 m long. Estimated capacity for grain is about 2000 kg per batch. The
Product is loaded on galvanized mesh supported on wooden or aluminium
plated mild steel frame trays. Each tray is 1.5 m by 3 m. The trays are
supported on a mild steel rack(not shown due to limited time). Each rack is be
1.5 m wide, 3 m long and 4 meters high. There are a total of six racks in the
dryer. Each rack contains 7 trays and there are a total of 42 trays in the dryer,
each tray is estimated to carry about 50 kg of grain. This costs about
US$5,300
37 | P a g e
As shown in Fig. 1 below, this is how raw seed will be fed to the pre-cleaner by
elevator (E1). This scalper will remove large size undesired materials from the
seed. The partially cleaned seed will then be fed to the cleaner cum grader with
elevator (E2). Here, the small undersized materials including undersized seeds
will be separated on the basis of size difference and weight difference. The
cleaned and sized seed will be fed to the cylindrical screening machine by
elevator (E3) whereby the broken and short seeds will be separated. The graded
seed will be fed to the specific gravity separator by elevator (E4) for removing
light seed. If it is not required then it will be bypassed. The processed seed will
be packed, weighed and stitched with the help of weighing and stitching
machine.
E1
Pre-cleaner
E2
E3
Grader
E4
Cylindrical
screening
E1, E2, E3, E4 are elevators
Specific
Gravity
Separator
Raw
seed
Weighing, bagging
and packing
Fig. 1 Layout of seed processing machines
38 | P a g e
CAPITAL EXPENDITURE & W ORKING CAPITAL
UGX'M illions
60,000,000
US$
3,800
15,789
32,300,000
24,700,000
26,600,000
323,000
8,500
6,500
7,000
85
45,600,000
24,700,000
24,700,000
12,000
6,500
6,500
30,400,000
20,900,000
40,000,000
270,223,000
8,000
5,500
10,526
60,585
16,000,000
6,000,000
352,223,000
4,211
1,579
82,164
44,857,225
11,805
EXCH
Land
Plant & M achinery
Scalper-Rough Cleaner: Drum
Scalper VA 900
Huller – Scarifier
Maize Sheller MR 20
Air-Screen cleaner cum grader
Cimbria Delta Screen Grader-120
Series
Destoner TS90
Gravity Separator: Cimbria GA 31
Cylindrical Screening Machine ZS
300-I series
Cimbria Centricoater CC10
Solar Dryers
Sub-total
Motorcycles
Computers & Accessories
Sub-Total
W ORKING CAPITAL
2
4
3
TOTAL FUNDING REQUIREM ENT
397,080,225
START GRANT FUNDING
270,223,000
71,111
EQUITY FINANCING
50,000,000
13,158
RESERVES
76,857,225
9,699
39 | P a g e
-
93,968
Capital Item
Capacity
Land
Processing 3
Plant & Machinery MTs of Grain
per day
Motorcycles
Computers &
Accessories
Working Capital
3 Months
Total
Cost (UGX)
% age
NiSeed
Contrib Financing
Contribution ution
(UGX)
Gap (UGX)
60,000,000
60,000,000
15.1%
0
270,223,000
0
16,000,000
16,000,000
4%
0
6,000,000
6,000,000
2%
0
44,857,225
44,857,225
11%
0
397,080,225
126,857,225
0 270,223,000
32% 270,223,000
4.3 Quality Control
Quality control is ensured throughout the processes. Seed testing as one of the
quality control activities involves determining the standards of a seed lot’s
physical purity, moisture and germination and thereby enabling the farming
community to get quality seeds. This is continuously done in order to minimize
the risk of planting low quality seeds, identifying the quality problem and their
probable cause, determining their quality, that is, their suitability for planting,
the need for drying and processing and specific procedures that should be
used, determining if seed meets established quality standards or labeling
specifications.
With a view to maintain uniformity in quality control our seed testing facility is
equipped to test the following: - Seed purity; testing the cleanliness of seed lot
and genuineness of the cultivar, Seed moisture content and Seed viability and
germination
4.4 Activities and Milestones
The following are the detailed activities planned for the first three years of
production.
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IMPLEMENTATION TIMELINES FOR SEED PROCESSING
Year 1
ACTIVITY
1 2 3 4 5 6 7 8 9
FARM ESTABLISHMENT
Identification, Selecting and
Enrolling of 700 Out-Grower
Farmers. 300 Yr 1, 200 Yr II,
200 Yr III
Out-growers committing 350
HA of Land (150 Yr 1, 100 Yr
II, 100 Yr III)
Sign Production Agreements
Ploughing & Farm Clearance
Training of farmers on best
practice agronomic practices,
sustainable land management,
irrigation, water harvesting
technology
and
business
skills, seed multiplication
Establishing of demonstration
plots and procure bulk planting
materials
Planting and maintenance
10
11
12
13
14
15
16
Year 2
17 18 19 20 21 22 23 24
Year 3
.25-36
25-26
25-26
27-28
27-28
28
27-28
25-31
Procurement of 4 Motorcycles
for Field Agricultural Workers
Procure breeders seed
Produce foundation seed
Multiply and sell certified seed
41 | P a g e
25-27
Year 1
ACTIVITY
1 2 3 4 5 6 7 8 9
PLANT ESTABLISHMENT
Staff Recruitment
Staff Training in Production
Processes, Health & Safety
Equip Production Staff with
Safety Gear
Certified Seed processing and
selling
Procurement and installation
of sorting, drying, cleaning,
grading, treatment, package &
storage equipment
Acquisition of an Industrial
Power Generator
SELLING & DISTRIBUTION
Aggressive
Advertisement
and promotional campaign
Customer profiling
Leasing of Distribution Trucks
Distribution
to
Regional
Outlets
Setting
up
integrated
Management
Information
System
and Enterprise
Resource Planning (ERP)
System
QUALITY
CONTROL
&
STANDARDS
MAAIF Certification
CAPACITY DEVELOPMENT
OF HUMAN RESOURCES
42 | P a g e
Year 2
10
11
12
13
14
15
16
17 18 19 20 21 22 23 24
Year 3
.25-36
25-36
25-27
29-31
25-36
SECTION 5:
MANAGEMENT PLAN
5.1 Corporate Governance
NiSeed is a private limited company with seven directors. The following are
their names:
1234567-
Mr. Joseph Aston Ebinu
Basil Ajer
Dr. Milton Otema
Ms Caroline Acen
Ms Gertrude Ajwang
Mr. Hamilton Ogwang
Mr. Akecha Tobby
Chairperson, Board of Directors
Company Secretary/Director
Member
Member
Member
Member
Member
Richard Opio
Managing Director/CEO-Ex-Official
5.2 The Human Resources Plan
For a smooth running of the seed store, multiplication farm and plant, the
company is retaining the services of the Managing Director, 1 Manager, 4
Agricultural Extension Officers, 2 Markers, 1 Accountant, Administrative
Assistant, Driver, 2 Security Guards and 4 Casual Laborers. A total of 17
employees in all are employed in the short-run and in the medium term, they
will increase to 25.
All the technical staff employed will be trained regularly to keep up to-date with
latest agronomic best practices in liaison with NARO and Makerere University.
All marketers in contact with the customers will also be exposed to customer
care/relations training. Continuous professional development remains a core
strategy of the company.
Financial management
A robust financial management system is in place to manage and control
financial resources for the profitable benefit of the company. Strong internal
control systems are regularly reviewed and tested for effectiveness. The
computerized accounting system- Enterprise Resource Planning (ERP) is used
to track and periodically report on Production, Inventories, Human Resources
and the Financial position
Board Affairs
NiSeed shall strive to enhance corporate governance in order to increase the
efficiency of management, maintain good relationships with shareholders and
other investors, customers, communities, suppliers and other stakeholder
groups, and fulfill its corporate social responsibilities. Through the products
Page | 43
they offer, they will aim to be a company that consistently offers new value to
its customers around the world.
The Company's corporate governance framework comprises the board of
directors, Audit and supervisory members and an Independent Auditor.
The Board of Directors will hold regular quarterly and extraordinary meetings
as the need arises. The board will discuss and makes decisions on important
management matters such as strategic direction of company, strategic and
business plans and investments. It will also receive reports regarding business
execution which it uses to conduct oversight.
Audit committee
An Audit Committee will be instituted at the board level in order to ensure
accountability, risk management, robust internal controls and generation of
credible financial reports among others.
The Company is statutorily annually audited by external auditors
Internal Audits
The Company will establish an Auditing Department in the long term to among
other things ensure that all transactions are authorized
44 | P a g e
5.3 Organization Chart for “Nile Quality Seeds Ltd
BOARD OF DIRECTORS
MANAGING DIRECTOR
MANAGER
AGRICULTURAL
FIELD OFFICERS (4)
ACCOUNTANT
MARKETING
EXECUTIVES (2)
ADMINISTR
ATIVE
ASSISTANT
SECURITY
GUARDS (2)
STORE
KEEPER
DRIVER
CASUAL
LABOURERS
(4)
45 | P a g e
QUALITY CONTROL
OFFICER
5.4 Profiles of the Board of Directors
1-Chairman-Board of Directors -Mr. Ebinu Joseph Aston
Qualifications: Master of Science in Crop Science (Makerere University), Post
Graduate Diploma in Monitoring & Evaluation (Uganda Management
Institute), Bachelor of Science in Agriculture (Makerere University)
Experience and core competences
Joseph is a passionate about agribusiness and is a well-motivated
Agriculturalist, with highly demonstrated capacity and experience of 18 years’
in the coordination and implementation of sustainable livelihood programs. He
has worked as Team Leader, Agricultural Extension Supervisor at ALREP-FAO,
Extension Coordinator and Regional Coordinator at DAR/RALNUC-DANIDA for
18 years running. He brings to the Board, high level expertise in agricultural
services, international exposure and networks and agribusiness acumen.
Technical skills and strengths: Good agricultural practices, agronomy, value
chain and marketing of pulses and oil seed crops, Agricultural clean seed
production, Pest and disease management, Project planning and management,
Report writing and fund raising skills
2- Managing Director –Mr. Opio Richard
Qualifications: Master of Science in Aquaculture (Ghent University), Bachelor
of Science in Botany and Zoology (Makerere University).
Short Courses: Fisheries Management and Aquaculture Production training
Certificate, Wageningen University, The Netherlands (Holland), Complementary
studies in Aquaculture (Post Graduate Diploma in Aquaculture) Ghent
University, Belgium, Economic Transformation and Management Certificate,
Kyankwanzi and Result oriented management (ROM)
Experiences & Core competences
Richard is highly knowledgeable about aquaculture and business, grounded in
results oriented management and brings to the Board extensive experience in
agricultural production and management, strategic planning, tested corporate
governance having worked in the Executive Director position for 4 years at
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ACOD-Uganda and Production & Marketing Officer at Kole District Local
Government for 4 years.
3- Company Secretary-Mr. Ajer Basil
Qualifications: Executive Master of Business Management (UTAMU), Master of
Science in Agribusiness Management (Makerere University), Post Graduate
Diploma in Monitoring and Evaluation (Uganda Management Institute),
Bachelor of Science in Agriculture (Makerere University).
Short courses: Capacity Building of Small and Medium sized Enterprises for
Developing Countries; Beijing, China, Policy Formulation and Dissemination
(International Network for the Availability of Scientific Publications), Strategic
Investment Promotion, conducted by International Development Ireland
Limited, Addressing Climate Change in Development Assistance; Copenhagen,
Denmark, Project Planning and Management, Human Resource Management
and Farming as a Business and Internal certification system for organic
agricultural products.
Experiences and core competences
Basil is highly trained and experienced in agribusiness management of small
and medium sized enterprises, agricultural policy formulation, strategic
investment promotion, business operations, and corporate governance among
others. He has comprehensive experience and expertise in investment
planning, SME agribusiness development having worked as a consultant for 4
years in those key fields, grounded in agronomic best practices and marketing
having worked as a Senior Program Officer in charge of Agriculture &
Marketing at DANIDA for 3 years. He is an accomplished trainer, having
worked as a Program Officer-Agricultural Training for Coordination Function
DANIDA. Basil has worked in communities and is exposed to use of IPhones to
collect and disseminate agricultural and market related information for the
benefit of smallholder farmers. He is conversant and experienced in Monitoring
and Evaluation, Production and Marketing.
Basil is a researcher and has a number of publications to his name including: a) Influence of Non-Financial Factors on the Growth of Small and Medium
Enterprises in Kira Municipality – Uganda. Unpublished Master’s thesis,
2017.
47 | P a g e
b) Contribution of Uganda Cooperative Alliance to Farmers Adoption of
Improved Agricultural Technologies. Journal of Agriculture and Social
Sciences. Vol. 8, No. 1, 2012.
c) Adoption of agricultural production technologies among farmers affiliated to
Uganda Cooperative Alliance. MSc thesis, September 2007.
d) Assessment of achievement by Uganda Cooperative Alliance delivery of
services to Rural Producer Organizations in Uganda. MaK/ BEEP project.
March, 2006.
e) Analysis of Constraints to Marketing of Split Cowpea in Kumi District. A
case study of Kumi and Bukede sub counties. BSc Agric Dissertation, 2005
Members of the Board
4- Dr. Milton Otema
Qualifications: PhD in Chemical Ecology (University of Greenwich), Master of
Science in Crop Science, (Makerere University), Bachelor of Science in
Agriculture General, (Sokoine University of Agriculture)
Dr. Milton is a guru in chemical ecology, crop entomology, researcher in crop
science having worked as Research Officer/Crop Entomologist, National
Agricultural Research Organization/National Crops Resources Research
Institute (NaCRRI) for 10 years, Senior Agricultural Inspector, Crop Protection
Department, Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) for
3 years, Research Assistant, International biological Control Center for
Africa/International Institute of Tropical Agriculture, East and Southern Africa
Regional Center for 2 years.
Dr. Milton brings to the table credible expert knowledge in crop science, which
is pivotal in ensuring seed quality production. He has several publications to
his name and below are some of them:  Otema, A. M, D. Rees, G.N. Ssemakula, D. I. Farman, R.O.M Mwanga and
P.C. Stevenson. 2016. Behavioural and Electrophysiological Responses of
sweetpotato weevils to plant-derived volatiles from sweetpotato. National
Agricultural Research Organization-Makerere University Joint Agricultural
Dissemination Conference: Speke Resort Munyonyo, 21-24, November,
2016. Pp 93
 Otema, A. M, D. Rees, G.N. Ssemakula, D. I. Farman, R.O.M Mwanga and
P.C. Stevenson. 2015. Interactive effects of hydroxycinnamic acid esters and
Bt Proteins on Sweetpotato weevil larvae mortality (in Press).
 Otema, A. M, D. Rees, G.N. Ssemakula, D. I. Farman, R.O.M Mwanga and
P.C. Stevenson. 2015. Chemical analysis and biological evaluations of a bi48 | P a g e

parental cross between weevil resistant New Kawogo and weevil susceptible
Beauregard (in Press)
Robert O.M. Mwanga, Gerald Kyalo, Gorrettie N. Ssemakula, Charles
Niringiye, BenardYada, Milton A. Otema, JoweriaNamakula, Agnes Alajo,
Benjamin Kigozi, Rose N.M. Makumbi, Anna-Marie Ball, Wolfgang J.
Grüneberg, Jan W. Low, and G. Craig Yencho. NASPOT 12 O’ and ‘NASPOT
13 O’ Sweetpotato. HortScience March 2016 51:291-295

Ssemakula G., C. Niringiye, M. Otema, G. Kyalo, J. Namakula and R.O.M.
Mwanga (2014). Evaluation and delivery of disease-resistant and
micronutrient dense sweetpotato varieties to farmers in Uganda. Uganda
Journal of Agricultural Sciences15: (2) 1-11.

Anyanga M. Otema, H. Muyinza,H. Talwana, D.R. Hall, D. Farman, G.N
Ssemakula, R.O.M Mwanga and P.C. Stevenson. Resistance to the Weevils
Cylaspuncticollis and Cylasbrunneus Conferred by Sweetpotato Root Surface
Compounds. J. Agric. Food Chem. 2013, 61, 8141−8147

Otema, A.M, H. Muyinza, D.Rees, D. Farman, G.N Ssemakula, R.O.M
Mwanga and P.C. Stevenson.2012. Sweetpotato weevil resistance in SubSaharan Africa. A viable mechanism for reducing Cylas damage. Conference
proceedings of the 16th Triennial International Society of Tropical Roots
Crops 23-28th September, 2012 at Federal University of Agriculture,
Abeokuta, Ogun State, Nigeria.pp 187.

Otema, A.M, P.C. Stevenson, D.Rees, D. Farman,R.O.MMwanga and G.N
Ssemakula.2011. Sweetpotato volatile chemistry after herbivory by African
sweetpotato weevils (Cylaspuncticollis and C. brunneus).
Conference
proceedings of the 13th Triennial Global Conference on Entomology, March
5-9, 2011, Chiang Mai, Thailand. Pp. 51.
5- Ms Caroline Acen
Qualifications: Master of Business Administration (Makerere University
Business School), Bachelor of Business Administration -Marketing, (Makerere
University)
Experience and core competences:
Caroline is a highly trained and experienced Marketer, having worked as Sales
&Operations Manager at Monitor Publications Limited for 3 years, Project
Manager –Circulations at Monitor for 3 years, Sales Manager – Circulation for 3
years at Monitor, as Trade Marketing Representative, Area Manager and Brand
Executive at British American Tobacco Uganda
49 | P a g e
She brings to the table vast knowledge about the market place management,
advertising, sales promotion, pricing and cutting marketing strategies. She will
be the driving force behind growth in market share of NiSeed quality seeds.
6- Ms Gertrude Ajwang
Qualifications: Post Graduate Diploma in Human Resource Management
(Uganda Management Institute), Bachelor of Information Technology (Makerere
University).
Gertrude is a professional Information Scientist and HR/ Administrator expert
with strong competence in areas of job and performance evaluation, staff
motivation, competency profiling, customer care, and capacity building and IT
systems. She brings to the table information systems that improve efficiency in
business operations and human resources.
7-Mr. Hamilton Ogwang
Qualifications: Master of Agribusiness Management (Makerere University),
Post Graduate Diploma in Project Planning and Management (Uganda
Management Institute), Bachelor of Science in Agriculture (Makerere
University).
Hamilton is an Agriculturist who highly experienced in agricultural advisory
services, having worked as a Zonal Agricultural Development officer for west
Nile zone at National Agricultural Advisory services (NAADS) for 4 years,
Zonal NAADS Coordinator- NAADS secretariat for 3 years, District NAADS
Coordinator-Oyam District for 4 years, as Food Security Technical Officer at
GOAL Uganda. He also worked as an Out-grower Superintendent at Kinyara
Sugar Works Ltd in the Agriculture department for 9 years.
Hamilton brings to the table practical experience in agricultural extension
services, farmer handling, and training of farmers, farm demonstration and
seed multiplication.
8- Mr. Akecha Tobby
Qualifications:
Bachelor of Arts Degree in Education Majoring in
Economics and History, Makerere University -Kampala), a Postgraduate
Diploma & Master of Management Studies Organizational Development
(Uganda Management Institute-Kampala)
Tobby has proven hands–on experience in Participatory Monitoring and
Evaluation spanning over 05 years. Proven facilitation skills gained over the
last ten years in facilitating capacity building trainings to Primary/Secondary
school stakeholders, civil society Organizations (CSOs) and CBOs. Ably
mobilized over 10,000 cassava farmers across lango sub-region, classified them
50 | P a g e
into Farmers Groups and clusters, trained them in post-harvest handling
techniques, incorporated the groups into Village Savings and Loans
Association, and provided them with skills and equipment to enhance cassava
processing. He brings to the Board, vast experience in farmer relations and
projects monitoring and evaluation.
51 | P a g e
SECTION 6: FINANCIALS
For a comprehensive analysis of financials, refer to Financials appended viz: 1- Summary of the Financials
2- Sales Projections
3- Projected Income Statement
4- Projected Statement of Financial Position
5- Projected Statement of Cash flows
6- Break-even Analysis
7- Investment Appraisal

The Plant & Equipment, Motorcycles and part of the working capital will be
financed by the PSFU-“START” Grant Fund amounting to Ugx 270 million

Revenue is expected to grow by 16% over the period, averaging 5% per
annum, represented by 1.7billion Ugx, while earnings after tax is averaging
at 5% per annum represented by 145 million Ugx by over the five year
period

The percentage contribution to the revenue streams product-wise is 32%
Beans, 30% maize, 20% rice and 18% soybeans.

Return on Capital Employed is expected at 109% over the period meaning
that for every Shilling Shareholders invest will return 1.09 Shs. This is
clearly above most fixed deposit rates or treasury bills

The Internal Rate of Return (IRR) is estimated at 54.58% meaning that the
investment will make more money than its actual cost. It is the rate at
which NPV is Zero and in this case the cost of capital is 12.73% which is far
less than the IRR. This is a viable venture.

The Payback period will be 3 years which is a fairly good indicative

With the PSFU Grant of Ugx 270 million, the investment will in total add to
the wealth of the owners US$ 132,323 or Ugx 503 million Ugx over the 5
year period, see details in the Investment Appraisal appended.
52 | P a g e
6.1 Summary of the Financials
NILE QUALITY SEEDS LTD
Summary
Years 1 to 5
Summary Financials ($)
Revenue
Gross Profit
EBIT
EBITDA
Net Earnings
Net Cash from Operating Activities
Capital Expenditures
Interest Income/(Expense)
Dividends
Cash
Total Equity
Total Debt
Year 1
Year 2
Year 3
Year 4
1,580,000,000
561,777,700
189,777,700
239,800,000
132,844,390
(43,199,710)
292,223,000
0
53,137,756
62,439,534
94,838,649
0
1,627,400,000
557,071,305
200,386,905
250,409,205
140,270,834
231,226,510
0
(1)
56,108,333
237,557,710
141,128,024
0
1,684,359,000
560,901,138
203,253,376
253,275,676
142,277,363
228,872,223
0
(2)
56,910,945
409,518,988
188,079,554
0
1,751,733,360
572,979,452
213,330,187
263,352,487
149,331,131
193,411,013
0
(3)
59,732,452
543,197,548
237,358,827
0
3%
5.6%
3%
1.4%
4%
5.0%
4%
8.2%
2.1
0.0
2.9
0.0
3.4
0.0
3.9
0.0
4.4
0.0
35.6%
22.9%
8.4%
34.2%
21.9%
8.6%
33.3%
21.2%
8.4%
32.7%
20.5%
8.5%
32.0%
19.4%
8.8%
7.2%
8.4%
8.4%
7.4%
8.4%
8.4%
7.2%
8.1%
8.1%
7.2%
8.1%
8.1%
7.4%
8.3%
8.3%
Growth
Revenue Growth Rate - CAGR:
Net Earnings Growth Rate - CAGR:
Ratios
Current Ratio
Debt to Capital (LT Debt + Equity)
Profitability
Gross Profit %
Operating Expenses %
Net Earnings %
Returns
Return on Assets
Return on Equity
Return on Capital (LT Debt + Equity)
53 | P a g e
Year 5
1,830,561,361
586,328,984
230,923,913
280,946,213
161,646,739
204,716,410
0
9,996
64,658,696
683,255,262
290,702,251
0
6.2 Sales Projections
NILE QUALITY SEEDS LTD
Revenue Projections
Years 1 to 5
(Ugx)
Sales Volume per
Season
KGs
MTs
Kg Bags
Annual Sales
Seasons
Percentage Annual Increase
Product 1-Maize
Number of Units
Price per unit
Total
Product 2-Maize
Number of Units
Price per unit
Total
Product 3-Maize
Number of Units
Price per unit
Total
Product 4-Beans
Number of Units
Price per unit
Total
Product 5-Beans
Number of Units
Price per unit
Total
Product 6-Beans
Number of Units
Price per unit
Total
54 | P a g e
Year 1
Year 2
Year 3
Year 4
Year 5
0
3%
3.5%
4%
5%
2
16
16000
2
32,000
6,000
192,000,000
32,960
6,000
197,760,000
34,114
6,000
204,681,600
35,478
6,000
212,868,864
37,075
6,000
222,447,963
14
14000
2
28,000
6,000
168,000,000
28,840
6,000
173,040,000
29,849
6,000
179,096,400
31,043
6,000
186,260,256
32,440
6,000
194,641,968
10
10000
2
20,000
6,000
120,000,000
20,600
6,000
123,600,000
21,321
6,000
127,926,000
22,174
6,000
133,043,040
23,172
6,000
139,029,977
20
20000
2
40,000
5,000
200,000,000
41,200
5,000
206,000,000
42,642
5,000
213,210,000
44,348
5,000
221,738,400
46,343
5,000
231,716,628
17.5
17500
2
35,000
5,000
175,000,000
36,050
5,000
180,250,000
37,312
5,000
186,558,750
38,804
5,000
194,021,100
40,550
5,000
202,752,050
12.5
12500
2
25,000
5,000
125,000,000
25,750
5,000
128,750,000
26,651
5,000
133,256,250
27,717
5,000
138,586,500
28,965
5,000
144,822,893
5
10
2
5
10
Product 7-Soybeans
Number of Units
Price per unit
Total
Product 8-Soybeans
Number of Units
Price per unit
Total
Product 9-Soybeans
Number of Units
Price per unit
Total
Product 10-Rice
Number of Units
Price per unit
Total
Product 10-Rice
Number of Units
Price per unit
Total
Product 10-Rice
Number of Units
Price per unit
Total
Net Revenue
55 | P a g e
2
16
16000
2
32,000
3,500
112,000,000
32,960
3,500
115,360,000
34,114
3,500
119,397,600
35,478
3,500
124,173,504
37,075
3,500
129,761,312
14
14000
2
28,000
3,500
98,000,000
28,840
3,500
100,940,000
29,849
3,500
104,472,900
31,043
3,500
108,651,816
32,440
3,500
113,541,148
10
10000
2
20,000
3,500
70,000,000
20,600
3,500
72,100,000
21,321
3,500
74,623,500
22,174
3,500
77,608,440
23,172
3,500
81,100,820
16
16000
2
32,000
4,000
128,000,000
32,960
4,000
131,840,000
34,114
4,000
136,454,400
35,478
4,000
141,912,576
37,075
4,000
148,298,642
14
14000
2
28,000
4,000
112,000,000
28,840
4,000
115,360,000
29,849
4,000
119,397,600
31,043
4,000
124,173,504
32,440
4,000
129,761,312
10
10000
2
20,000
4,000
80,000,000
20,600
4,000
82,400,000
21,321
4,000
85,284,000
22,174
4,000
88,695,360
23,172
4,000
92,686,651
170
170,000
1,580,000,000
1,627,400,000
1,684,359,000
1,751,733,360
1,830,561,361
5
10
2
5
10
6.3 Projected Income Statement
NILE QUALITY SEEDS LTD
Income Statement
Years 1 to 5
(UGX)
Year 1
Year 2
Year 3
1,627,400,000 1,684,359,000
NET REVENUES
1,580,000,000
COST OF REVENUE
% of Revenues
1,018,222,300 1,070,328,695 1,123,457,862
66.7%
65.8%
64.4%
Year 4
1,751,733,360
Year 5
1,830,561,361
1,178,753,908 1,244,232,377
68.0%
67.3%
GROSS PROFIT
% of Revenues
561,777,700
35.6%
557,071,305
34.2%
560,901,138
33.3%
572,979,452
32.7%
586,328,984
32.0%
OPERATING EXPENSES
Sales & Marketing
General and Administration
Total Operating Expenses
% of Revenues
248,600,000
113,400,000
362,000,000
23%
233,298,000
123,386,400
356,684,400
22%
228,429,510
129,218,252
357,647,762
21%
224,030,127
135,619,137
359,649,264
21%
211,469,687
143,935,384
355,405,071
19%
EARNINGS FROM OPERATIONS
199,777,700
200,386,905
203,253,376
213,330,187
230,923,913
EXTRAORDINARY INCOME / (EXPENSE)
(10,000,000)
0
0
0
0
EARNINGS BEFORE INTEREST & TAXES
189,777,700
200,386,905
203,253,376
213,330,187
230,923,913
INTEREST INCOME / (EXPENSE)
0
0
0
0
0
NET EARNINGS BEFORE TAXES
189,777,700
200,386,905
203,253,376
213,330,187
230,923,913
TAXES
(56,933,310)
(60,116,072)
(60,976,013)
(63,999,056)
(69,277,174)
NET EARNINGS
% of Revenues
132,844,390
8.4%
140,270,834
8.6%
142,277,363
8.4%
149,331,131
8.5%
161,646,739
8.8%
56 | P a g e
6.4 Projected Statement of Financial Position
NILE QUALITY SEEDS LTD
Balance Sheet
Years 1 to 5
(UGX)
Begin
Year 1
Year 2
Year 3
Year 4
Year 5
ASSETS
CURRENT ASSETS
Cash
1,000,000
62,439,534
237,557,710
409,518,988
543,197,548
683,255,262
Accounts Receivable
0
236,052,000
194,506,848
195,722,516
203,551,416
212,711,230
Inventories
0
236,052,000
194,506,848
157,992,874
164,312,589
171,706,656
28,440,000
23,434,560
23,581,026
24,524,267
25,627,859
1,000,000
562,983,534
650,005,966
786,815,404
935,585,821
1,093,301,007
1,050,000,000
1,292,200,700
1,242,178,400
1,192,156,100
1,142,133,800
1,092,111,500
1,051,000,000
1,855,184,234
1,892,184,366
1,978,971,504
2,077,719,621
2,185,412,507
Other Current Assets
Total Current Assets
PROPERTY, PLANT & EQUIPMENT
TOTAL ASSETS
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short Term Debt
0
0
0
0
0
0
Accounts Payable & Accrued Expen
0
246,037,600
203,880,672
205,154,926
213,361,123
222,962,374
25,627,859
Other Current Liab
Current portion of long term debt
Total Current Liabilities
LONG TERM DEBT (less current portion)
28,440,000
23,434,560
23,581,026
24,524,267
0
0
0
0
0
0
0
274,477,600
227,315,232
228,735,952
237,885,390
248,590,233
0
0
0
0
0
0
SHAREHOLDERS' EQUITY
Share-Capital
Grants
1,000,000
51,000,000
51,000,000
51,000,000
51,000,000
51,000,000
1,050,000,000
1,450,000,000
1,450,000,000
1,450,000,000
1,450,000,000
1,450,000,000
196,120,023
Reserves
35,867,985
73,741,110
112,155,998
152,475,404
0
43,838,649
90,128,024
137,079,554
186,358,827
239,702,251
Total Equity
1,051,000,000
1,580,706,634
1,664,869,134
1,750,235,552
1,839,834,231
1,936,822,274
TOTAL LIABILITIES & EQUITY
1,051,000,000
1,855,184,234
1,892,184,366
1,978,971,504
2,077,719,621
2,185,412,507
Retained Earnings
57 | P a g e
6.5 Projected Statement of Cash flows
NILE QUALITY SEEDS LTD
Cash Flow Statement
Years 1 to 5
(Ugx)
Year 1
OPERATING ACTIVITIES
Net Earnings
Depreciation
Working Capital Changes
(Increase)/Decrease Accounts Receivable
(Increase)/Decrease Inventories
(Increase)/Decrease Other Current Assets
Increase/(Decrease) Accts Pay & Accrd
Expenses
Increase/(Decrease) Other Current Liab
Net Cash Provided/(Used) by Operating
Activities
INVESTING ACTIVITIES
Property & Equipment
Other
Net Cash Used in Investing Activities
FINANCING ACTIVITIES
Increase/(Decrease) Short Term Debt
Increase/(Decrease) Curr. Portion LTD
Increase/(Decrease) Long Term Debt
Increase/(Decrease) Common Stock
Increase/(Decrease) Preferred Stock
Dividends Declared
Net Cash Provided / (Used) by Financing
INCREASE/(DECREASE) IN CASH
CASH AT BEGINNING OF YEAR
CASH AT END OF YEAR
58 | P a g e
1,000,000
Year 2
Year 3
142,277,363
50,022,300
Year 4
149,331,131
50,022,300
Year 5
161,646,739
50,022,300
132,844,390
50,022,300
140,270,834
50,022,300
(236,052,000)
(236,052,000)
(28,440,000)
41,545,152
41,545,152
5,005,440
(1,215,668)
36,513,974
(146,466)
(7,828,901)
(6,319,715)
(943,241)
(9,159,814)
(7,394,067)
(1,103,592)
246,037,600
28,440,000
(42,156,928)
(5,005,440)
1,274,254
146,466
8,206,197
943,241
9,601,251
1,103,592
(43,199,710)
231,226,510
228,872,223
193,411,013
204,716,410
(292,223,000)
0
0
0
0
(292,223,000)
0
0
0
0
0
0
0
50,000,000
400,000,000
(53,137,756)
396,862,244
61,439,534
1,000,000
62,439,534
0
0
0
0
0
(56,108,333)
(56,108,333)
175,118,176
62,439,534
237,557,710
0
0
0
0
0
(56,910,945)
(56,910,945)
171,961,278
237,557,710
409,518,988
0
0
0
0
0
(59,732,452)
(59,732,452)
133,678,560
409,518,988
543,197,548
0
0
0
0
0
(64,658,696)
(64,658,696)
140,057,714
543,197,548
683,255,262
6.6 Break-even Analysis
NILE QUALITY SEEDS LTD
Break-Even Analysis
Years 1 to 5
(UGX)
Year 1
1,580,000,000
Year 2
1,627,400,000
Year 3
1,684,359,000
Year 4
1,751,733,360
Year 5
1,830,561,361
Cost of Sales
Variable
Fixed
Total
459,000,000
474,622,300
933,622,300
477,252,000
504,444,695
981,696,695
498,708,900
531,430,482
1,030,139,382
520,644,802
560,395,372
1,081,040,174
547,025,323
594,112,366
1,141,137,689
Operating Expenses
Variable
Fixed
Total
47,400,000
314,600,000
362,000,000
48,822,000
307,862,400
356,684,400
50,530,770
307,116,992
357,647,762
52,552,001
307,097,263
359,649,264
54,916,841
300,488,230
355,405,071
506,400,000
789,222,300
1,295,622,300
526,074,000
812,307,095
1,338,381,095
549,239,670
838,547,474
1,387,787,144
573,196,802
867,492,636
1,440,689,438
601,942,164
894,600,597
1,496,542,760
0.32
0.32
0.33
0.33
0.33
1,161,485,874
1,200,324,487
1,244,287,669
1,289,409,123
1,332,895,733
Revenue
Total Costs & Expenses
Variable
Fixed
Total
Variable Costs/Revenue Ratio
Break-Even Point Revenues
59 | P a g e
6.7 Investment Appraisal
Error! Not a valid link.
60 | P a g e
ASSUMPTIONSError!
Not
INITIAL INVESTMENT
Initial Investment=
Opportunity cost (if any)=
Lifetime of the investment
Salvage Value at end of project=
Deprec. method(1:St.line;2:DDB)=
Tax Credit (if any )=
Other invest.(non-depreciable)=
$82,164
$0
5
$20,541
2
0%
0
WORKING CAPITAL
Initial Investment in Work. Cap=
Working Capital as % of Rev=
Salvageable fraction at end=
$11,805
3%
100%
a
valid
CASHFLOW DETAILS
DISCOUNT RATE
Revenues in year 1=
$415,789 Approach(1:Direct;2:CAPM)=
Var. Expenses as % of Rev= 133,263 1. Discount rate =
Fixed expenses in year 1=
207,690 2a. Beta
Tax rate on net income=
30%
b. Riskless rate=
If you do not have the breakdown of fixed and
c. Market
variablerisk premium =
expenses, input the entire expense as a %d.ofDebt
revenues.
Ratio =
e. Cost of Borrowing =
Discount rate used=
YEAR
0
INITIAL INVESTMENT
Investment
- Tax Credit
Net Investment
+ Working Cap
+ Opp. Cost
+ Other invest.
Initial Investment
SALVAGE VALUE
61 | P a g e
$82,164
$0
$82,164
$11,805
$0
$0
$93,968
1
2
3
4
5
link.
2
12%
0.9
5.00%
9.00%
6.00%
10.00%
12.73%
Equipment
Working Capital
Error! Not a valid link.
62 | P a g e
$0
$0
$0
$0
$0
$0
$0
$0
$20,541
$11,805