BUSINESS PLAN
FOR
KAFOI ESTATES LIMITED (KEL)
KEL Farms on The Slopes of Mount Kilimanjaro
KEL Integrated Expansion Process of Production and Value Addition
in Four Agricultural Sub-Sectors in Current KEL Operations
2011
TABLE OF CONTENTS
1.0
EXECUTIVE SUMMARY......................................................................................................... 1
1.1
Business physical location ...................................................................................................... 1
1.2
Nature of the present KEL Business ....................................................................................... 1
1.3
Purpose of the Business Plan .................................................................................................. 1
1.4
Key Activities planned for the projects and its Business Strategy .......................................... 2
1.5
Climatic Conditions of the region KEL is located .................................................................. 2
1.6
Topography, Water Resources and Quality of Water and Soils ............................................. 2
1.7
Water Resources and Quality .................................................................................................. 2
1.8
Electricity/Power Supply at KEL ............................................................................................ 2
1.9
Transport and Communications .............................................................................................. 3
1.10 Management of KEL............................................................................................................... 3
1.11 Distribution of Project costs .................................................................................................... 3
1.12 Collateral for this bank facility ............................................................................................... 4
1.13 Financial Returns and other benefits Expected by the Projects .............................................. 3
2.0
PROJECT LOCATION, THE BUSINESS AND THE PROMOTERS ..................................... 4
2.1
Nature of Business .................................................................................................................. 4
2.2
Summary of other main features of the projects and the farms .............................................. 4
2.3
Purpose of the Business Plan .................................................................................................. 5
2.4
The Operational Plan of the Business ..................................................................................... 5
2.5
Scope of Work and Report ...................................................................................................... 5
2.6
Approach and Methodology.................................................................................................... 5
2.7
Particulars of the Promoters and Managers of the Projects .................................................... 6
2.8
CLIMATIC CONDITIONS OF THE REGION KEL IS LOCATED .................................... 8
2.9
Water Resources and Quality .................................................................................................. 9
2.10 Rainfall Distribution in West Kilimanjaro .............................................................................. 9
2.11 Electricity/Power Supply at KEL .......................................................................................... 12
2.12 Transport and Communications ............................................................................................ 13
3.0
KEL EXPANSION AND “KILIMO KWANZA” .................................................................... 13
3.1
KEL as a Going Concern ...................................................................................................... 14
4.0
THE PLANNED KEL PROJECTS AND ASSOCIATED ACTIVITIES ................................ 14
4.1
Project Financing Arrangements ........................................... Error! Bookmark not defined.
4.2
Competitive Advantage offered by KEL farms .................................................................... 16
4.3
Financial Returns Expected top be Generated by the Projects............. Error! Bookmark not
defined.
5.0
EXPANSION AND DEVELOPMENT OF DAIRY PRODUCTS .......................................... 16
5.1
Suitability for Dairy Cattle and Milk Production at KEL Rongai Farm ............................... 17
5.2
Varieties of Milk products envisaged in KEL Value addition .............................................. 18
5.3
Market for milk in Tanzania ................................................................................................. 19
5.4
Demand projections for milk in Tanzania............................................................................. 21
5.5
Meeting the milk targets ....................................................................................................... 22
5.6
Facility for Expanded Milk Production................................................................................. 22
5.7
Project Implementation schedule .......................................................................................... 23
6.0
EXPANSION AND DEVELOPMENT OF HORTICULTURE .............................................. 25
6.1
Horticulture - Suitability of West Kilimanjaro Area for horticulture production ................. 25
6.2
Horticulture Key Statistics .................................................................................................... 25
6.3
Meeting the production conditions of the horticulture production ....................................... 25
6.4
Horticulture Expansion Plans................................................................................................ 27
6.5
Market and Demand for Horticulture Products ..................................................................... 28
6.6
Major Constraints in Tanzania’s Horticulture sector ............................................................ 32
6.7
Implementation schedule/ Time frame required implementing a project ............................. 33
6.8
Facility Reserved for Horticulture Expansion....................................................................... 34
7.0
EXPANSION AND DEVELOPMENT OF GRAIN PRODUCTS .......................................... 35
7.1
KEL Grain Production Future Outlook ................................................................................. 35
7.2
Grain Production (wheat, beans, oil seed, and seed production) .......................................... 35
7.3
Market Availability of Grain Products.................................................................................. 37
7.4
Export Markets for Tanzania ................................................................................................ 38
7.5
Implementation Schedule...................................................................................................... 40
7.6
Facility Reserved for Grain Expansion ................................. Error! Bookmark not defined.
8.0
EXPANSION AND DEVELOPMENT OF COFFEE OPERATIONS .................................... 40
8.1
Coffee Industry in Tanzania .................................................................................................. 41
8.2
Market for Coffee ................................................................................................................. 41
8.3
Marketing and Sales strategies .............................................................................................. 41
8.4
Coffee trade statistics: ........................................................................................................... 41
8.5
Coffee market report ............................................................................................................. 42
8.6
Implementation Schedule...................................................................................................... 42
9.0
MANAGEMENT PLAN AND ORGANIZATION STRUCTURE ......................................... 43
10.0 SOCIAL AND ECONOMIC BENEFIT ASSOCIATED WITH THE PROJECT ................... 43
10.1 Food Security and Safety ...................................................................................................... 43
10.2 Nutritional and Human Health Needs ................................................................................... 43
10.3 Community based Infrastructure ........................................................................................... 43
10.4 Environmental Sustainability ................................................................................................ 44
11.0 THE STATE OF THE REGION IN WHICH PROJECT IS BASED ...................................... 44
12.0 RISKS AND UNCERTAINITIES ASSOCIATED WITH THE PROJECTS .......................... 45
13.0 CONCLUSION AND RECOMMENDATIONS ...................................................................... 45
14.0 ANNEXTURES ........................................................................................................................ 47
15.0 FINANCIAL PROJECTIONS .................................................................................................... 4
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1.0
EXECUTIVE SUMMARY
KEL was established under CAP 212 of the laws of The United Republic of Tanzania on 30th
April 1998 as a private limited liability company; its Certificate of Incorporation is No.
33893. The authorized share capital of the company is Tshs. 500 million divided into 50,000
shares of TZSh. 10,000 each. 30,000 shares have been subscribed and paid-up by Mr. Felix.
G. N. Mosha with 20,000 shares at Tshs. 250 million and his wife Anna F. Mosha holds
5,000 shares for Tshs. 50 million.
KEL is made up of two farms: Rongai Farm, which was established in 1931 (approx.3000
acres); and Mwanza Farm, which was established in 1954 (2000 acres), that brings to
cumulative total of 5000 acres owned and managed by KEL. In reality, KEL has fairly
diversified production base with necessary basic infrastructure which include farm roads;
houses for employees; administrative and livestock facilities as well as farm machinery and
equipment. Therefore, KEL is a reasonably large on-going agricultural concern. Presently,
KEL has a modern high quality milk herd of over 400. Depending on weather conditions has
produced up to 1000 litres of fresh milk per day, making it the second/third single largest
producer of fresh milk in Tanzania. It is already a major producer of grain – especially wheat.
It is involved in horticulture production. It operates a 35 acre coffee farm Thus, on the whole,
KEL is not just an on-going concern; rather, it is already a major player in agriculture in
Tanzania as a private sector entity.
1.1 Business physical location
KEL is located in West Kilimanjaro. KEL operates two big farms namely; Rongai farm 3000 acres); and Mwanza Farm 2000 acres or a total of 5000 acres. The project is located
about 45km from Kilimanjaro International Airport (KIA) between Mount Kilimanjaro and
Mount Meru. The road to the farm site is tarmac save for the 6 km before the farm, which is
also in good condition and 5 km between the farm’s entrance and its offices. Jomo Kenyatta
International Airport (JKIA) Nairobi - Kenya is about 320 km away from the KEL. Many
horticulture producers in the region use these two airports as exit Airports. In effect, the farm
easily connects with all weather roads to markets and exports. The farm used to be a
Government operated dairy farm before it was privatized in 1998.
1.2 Nature of the present KEL Business
KEL mainly operates farm business involving several projects that range from dairy
operations, horticulture, and grain production to coffee production. Thus, none of the projects
in this Business Plan in any way represent a “start-up”. The plan is to expand the production
and or the scale of operation in each of the products.
.
1.3 Purpose of the Business Plan
This business plan has a purpose of seeking financial resources to expand several projects in
which KEL is already involved. The projects are being implemented at KEL Farms in West
Kilimanjaro, Tanzania. The specific purpose and objectives of this business plan are:
 Assess the viability of integrated strategy proposed for the projects; in particular, to assess
the overall feasibility of an integrated development of horticulture production, grain
production, dairy operations and coffee production and value addition for the products;
 The supply and demand situation of these products in the market,
 Determine the amount of financing required for each project and all of them together;
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Discuss the technical, structural set-up, management and operational options and select
the preferred ones;
Preparation of detailed financial projections and financing plan for the selected options.
1.4 Key Activities planned for the projects and its Business Strategy
The key activities to be carried out under these projects will include expanded production and
other associated activities of the following products:
 Expansion of Horticulture production i.e. sugar snaps, fine beans, baby corn, runner
beans; and, soya-beans;
 Expansion of Grain production i.e. wheat, beans, maize, oil seeds and seed
multiplication;
 Expansion of Milk Production and milk products;
 Expansion of Coffee production;
 Value addition/processing of the products.
The production of all the projects will be market driven and a strong quality control and
marketing department will be established to ensure the competitiveness of KEL products.
Tanzania market will be the principal market for the bulk of the production. However, much
of the horticultural products will be exported mainly to Europe.
1.5 Climatic Conditions of the region KEL is located
Temperatures at the Farms are between 10C and 25C or more on the lower side of the Farms.
The area of the Farms receives in an average year about 750mm of rainfall but the amount
ranges from 500mm to 1000mm. This rainfall is bimodal with short rains in
October/November and long rains falling in March-June. The rainfall decreases from south to
north of the Farms.
1.6 Topography, Water Resources and Quality of Water and Soils
The farm is situated on a gently sloping land between the two mountains. The place next to
the mountain is steeper with the slope reducing as one move towards the main road; the place
next to its main road is almost flat. Each of these projects will be located in appropriate areas
of the Farms.
1.7 Water Resources and Quality
The Farms have two river frontages – the Engare Rongai River and the Gararagua River.
Both rivers originate directly from the Kilimanjaro mountain forest. Hydrological evaluation
of water resources for KEL show that the Gararagua River- below its gravity flow intake (for
which KEL has the water rights) is 176 4m3/hr or 1,541,760 m3 annually; whereas, the flow
of Engare Rongai River is 54 m3 /hr. Analysis of a sample taken from the rivers, indicates
that the water is of excellent quality for irrigation and post- harvest treatment.
1.8 Electricity/Power Supply at KEL
KEL had historically operated without power supply. However, electricity poles – now
pending distribution of cable/wires have already been installed across the Farms as part of the
national grid. It is now expected that power supply to KEL may take effect as early as July
2011. In addition, some two powerful transformers are within the Farms areas. Aside from
electricity from the national grid, the Farms have two standby generators altogether covering
a total of 260 KVA. More importantly, being a dairy farm with a target of up to 1,000 herd in
the next ten years, KEL has yet to utilize its biogas as a source of energy. Under these
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projects, it is planned that KEL will install the necessary facilities and infrastructure to
effectively utilize its biogas capacity to supplement supply from the national grip and standby
generator capacity.
1.9 Transport and Communications
As already mentioned the project is located some 45 km from the Kilimanjaro Internatioanl
Airport (KIA). The Farms are also linked to the alternative Airport (apart from KIA) i.e. the
Jomo Kenyatta International Airport Nairobi (JKIA) by good road covering a distance of 320
km. Other major links are Mombasa Kenya, which is five hours drive and Dar es Salaam,
which is eight hours drive. The road network to all these points is tarmac, offering year-round
reliability of transportation in and out of the Farms.
The local and international telecommunications network in the area is very good for all major
mobile networks in Tanzania or a combination thereof that the Farms may choose to use in
line with appropriate equipment that would be required for the Farm’s operation.
1.10 Management of KEL
Currently, KEL has two directors, Mr. Felix G.N.Mosha and Mrs. Anna. F. Mosha. These
two individuals play crucial role in making this company running. They are the brain behind
this company’s development. However, the company shall invite new board members from
both national and international background as part of the expansion being proposed in this
project. KEL expect to expand and grow while maintaining her diversified production
structure at all levels of the company. KEL objective is to build a market oriented enterprise,
which can successfully compete in both domestic and external markets.
1.11 Project costs
The overall project cost is estimated at TZS. 10.0 billion i.e. approximately US$ 6.25 million
at an exchange rate of TZS 1600 to US$1. Out of this amount TZS 6.8 billion will be capital
expenditures. Operating expenditure in the first year will be TZS 2.5. This amount is
expected to cumulatively add up to 38.1 billion in the tenth year of operation. Investment in
the expansion of the following will be as follows: wheat production TZS 2.7 billion; dairy
expansion TZS 2.5; horticulture TZS 2.2 billion; oil seeds TZS 685 million; seed
multiplication TZS 118 million; beans production TZS 605 million; and, expansion of coffee
production TZS 507 million. The balance of TZS 685 million will be invested in the farms
infrastructure i.e. fencing of the farm, roads, housing and other residential facilities for
workers including social services like health clinic, children kindergarten, etc.
1.12 Project Financing Arrangements
The financing of this project is expected to be a combination of equity from the investors and
loans from various lending sources. Specifically, a joint venture arrangement is contemplated
that will generate adequate equity from new investors in addition to borrowing as indicated
above.
1.13 The structure of the Project
This project is structured in such a manner that its implementation must not start with all the
production areas at once. A choice could be made to start with the expansion of horticulture
or dairy; the idea will be to start with the most profitable operation and move to the rest on
step-by-step basis. However, because of the high fixed costs of the project, the most feasible
approach would be the launching of all the components of the project at once.
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1.14 Financial Returns and other benefits Expected by the Projects
Great financial returns are expected to be generated from the KEL`s expansion. Accumulated
net earnings from the project are estimated at over TZS 160 billion in the projected period of
10 years of operation or an average of TZS 16 billion annually. On the average TZS 5.2
billion will be generated from horticulture per year and the rest from all the other operations
of the farms. Thus, the project is financially viable and operationally feasible. However, the
social benefits arising from this project are considerable. The project will generate at lease
500 jobs in the local area; bring up to 800 small holders mainly women to the dairy and
horticulture value chain; provide corporate and other taxes to the government; enhance food
self-sufficiency for Tanzanian; and contribute towards poverty eradication specifically in its
region of location (population over a million people) and in Tanzania generally.
1.15 Valuation of the Assets
According to the report issued by PSRC in 1995 with respect to the KEL farms, it PSRC had
valued two farms at TZS. 6.9 billion at a time the exchange rate to the dollars was around
TZS 500 to US$1. Under the valuation, TZS 4.0 Billion was for the Rongai farm and the
remaining TZS 2.9 billion accounted for the Mwanza farm. No valuation of the Farms and its
other assets was carried out for this project. Presently, the estimated value of the Farms and
its assets stands at USD 14 million.
2.0
PROJECT LOCATION, THE BUSINESS AND THE PROMOTERS
KEL was registered under CAP 212 of the laws of The United Republic of Tanzania on 30 th
April 1998 as a private limited liability company; its Certificate of Incorporation is No.
33893. The authorized share capital of the company is Tshs. 500 million divided into 50,000
shares of TZSh. 10,000 each. 30,000 shares have been subscribed and paid-up by Mr. Felix.
G. N. Mosha with 20,000 shares at Tshs. 250 million and his wife Anna F. Mosha holds
5,000 shares for Tshs. 50 million.
KEL is made up of two farms: Rongai Farm, which was established in 1931 (approx.4000
acres); and Mwanza Farm, which was established in 1954 (2000 acres), that brings to
cumulative total of 6000 acres owned and managed by KEL. In reality, KEL has fairly
diversified production base with necessary basic infrastructure which include farm roads;
houses for employees; administrative and livestock facilities as well as farm machinery and
equipment. Therefore, KEL is a reasonably large on-going agricultural concern.
2.1 Nature of Business
KEL mainly operates farm business involving several projects that range from dairy
operations, horticulture, grain production to coffee production. Thus, none of the projects in
this Business Plan in any way represent a “start-up”. The plan is to expand the production and
or the scale of operation in each of the products.
2.2 Summary of other main features of the projects and the farms
 Name of project: Kafoi Estates Limited (KEL).
 Project Concept: Development of 6,000 acre farms project involving the expansion of
its current production and value addition for the products
 Project Sponsors: Kafoi Estates Limited, Tanzania (KEL)
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Project Location: West Kilimanjaro, Tanzania
Nearest town - Sanya Juu, West Kilimanjaro- Tanzania.
Address P.O.Box 25 Sanya Juu, West Kilimanjaro OR
P.O.Box 23381 Dar es Salaam
Telephone No 255 222700830
Cell 255 754 282 085
Email Contact: Felix.mosha@kafoi.com OR
Email Contact: Anna.mosha@kafoi.com
2.3 Purpose of the Business Plan
This business plan elaborates in detail on the next phase of developing KEL current
operations, and expansion of production of several of its farm’s products in West
Kilimanjaro. The development is designed to meet the growing domestic and foreign markets
demand; both in qualitative and quantitative terms. The purpose of this business plan is to
establish the economic viability and financial feasibility of the integrated expansion of the
KEL planned operations. Key elements in this phase will cover the following areas;
• Expansion of Horticulture Production i.e. sugar snaps, fine beans, baby corn, runner
beans; and, soya beans;
• Expansion of grain production i.e. wheat, beans, maize, oil seeds and seed
multiplication; the latter will be fully covered in another study.
• Expansion of Dairy Operations;
• Expansion of Coffee Production;
• Value addition operations for the products
2.4 The Operational Plan of the Business
Operational plan of the business covers important aspects such as location, facilities and
equipment, physical plant, inventory, production, employees needed and other operation
processes. In fact, this is the area of the business that explains how things must be done
within the company. KEL operational plan can well be explained in the following categories;
2.5 Scope of Work and Report
This business plan had to undertake the following summarized specific tasks:
 A thorough review of the farm business operations;
 Consideration of the technical aspects of the farm operations;
 Organization structure and management for KEL;
 Economic and social aspects associated with KEL operations;
 Financial analysis of the projects;
2.6 Approach and Methodology
 Assess the suitability of the key capital items like land, water, infrastructure for the
development of the projects;
 Review the project’s requirements, financing, and commitment to meet the
obligations necessary for successful project implementation;
 Analyse the market in terms of the key players and level of competition
 Use the information gathered above, develop the base financial assumptions detailing
varieties selected, production, market prices, and the cost structure so as establish the
economic viability of the projects.
5
Restructuring and re-organizing KEL operations will be in line with domestic and global
market conditions. It will also achieve maximum job creation for the community in the area
and the country at large; contract farming arrangements to bring small holders/producers into
the agricultural value chain; provide heifers of high milk yielding potential to small dairy
farmers in Tanzania; increased foreign exchange earnings for Tanzania; increased tax
revenue for government; and, contributing towards poverty alleviation, especially in the
region which KEL is located. In broad terms, an optimal realization of the above goals would
bring among other socio economic benefits, some 1000 direct jobs in West Kilimanjaro and
over 500 indirect jobs; an estimated annual revenue of US$ 3 million in foreign exchange
earnings and bringing up to 800 small holder producers (through contract farming) into the
value chain process.
2.7 Particulars of the Promoters and Managers of the Projects
Felix Mosha is an Economist by Profession. He has been involved in farming for the last 15
years – mainly, in dairy activities (second/third largest fresh milk producer in Tanzania),
grain, coffee and horticultural production. His main farms are in West Kilimanjaro. Tanzania.
He is a Retiree of the United Nations Organization New York where he served for some 25
years rising to a level of a Special Representative of the United Nations Secretary-General
under Buotros Buotrol Ghali, and subsequently, under Kofi Annan. He took an early
retirement from the United Nations to become a Farmer.
Prior to his retirement from the UN, Mr. Mosha had served for three years as Senior Aide and
Adviser to Gen. Olusegun Obasanjo of Nigeria and Executive Director of the African
Leadership Forum (a Forum that was mainly attended by former African Heads of State);
Also served for three years as UN Special Adviser and Envoy of the Late Mwal. Julius K
Nyerere on Mwalimu’s Peace Initiatives in the Great Lakes, particularly the Burundi Peace
Negotiations. Currently, among other responsibilities, he serves as;
Founding Chairman of National Investments Company Limited (NICOL); Chairman of the
Confederation of Tanzania Industries (CTI); Chairman of the Horticultural Development
Council of Tanzania (HODECT); Chairman of the Tanzania National Business Council
(TNBC) Agricultural Working Group (thus led the formulation of Tanzania’s KILIMO
KWANZA “Agriculture First” Vision); Member of the Executive Committee of the Southern
Agricultural Growth Corridor for Tanzania (SAGCOT); Member of the Executive Committee
of the East African Business Council; Member of the Executive Committee of the Tanzania
National Business Council; Non-Executive Director of Tanzania’s largest Commercial Bank the National Micro-Finance Bank (NMB) PLC; Board Member of the Agricultural Council of
Tanzania; as well as Board membership in a range of other companies.
He holds a B. Sc (Economics) and M.Sc. Economics. He studied at the City of London
College UK; the Helsinki School of Economics Finland; and, Harvard Business School USA
He has been a Member of the Society for International Development; Member of the
Academy of International Business, Member of the International Trade and Finance
Association; and, Member of the International Peace Research Association
Mrs. Anna Mosha who is also a shareholder and Director of KEL holds a B.Sc Degree in
Business Administration from Iona College, USA. She has for many years been involved in
farming activities. Currently, she serves as an overall Head of the Management of the
operations of KEL farms. She has also been extensively involved in Real Estate development.
Previously, she served in hospitality sector in Hotel Management.
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FIGURE I: THE KEL FARMS AND THEIR LOCATION
AERIAL POSITIONS OF KAFOI FARMS
7
2.8 CLIMATIC CONDITIONS OF THE REGION KEL IS LOCATED
Temperatures at the Farms are between 10C and 25C or more on the lower side of the Farms.
The area of the Farms receives in an average year about 750mm of rainfall but the amount
ranges from 500mm to 1000mm. This rainfall is bimodal with short rains in
October/November and long rains falling in March-June. The rainfall decreases from south to
north of the Farms. Thus, there are – as would be expected – seasonal climatic variations as
shown in Figure II below.
FIGURE II: MEAN TEMPERATURE RECORDED AT KIA AND MOSHI
The solar radiation is optimum for any production, which coincides with the main harvesting
season for farms products. Figure III below shows the relative daily radiation at a nearby
farm.
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FIGURE III: RELATIVE TENGERU RADIATION
2.9 Water Resources and Quality
The Farms have two river frontages – the Engare Rongai River and the Gararagua River.
Both rivers originate directly from the Kilimanjaro mountain forest. Hydrological evaluation
of water resources for KEL show that the Gararagua River- below its gravity flow intake (for
which KEL has the water rights) is 176 4m3/hr or 1,541,760 m3 annually; whereas, the flow
of Engare Rongai River is 54 m3 /hr.
The Engare River water is captured by a pipe of 8 km from its intake deep in the Kilimanjaro
Forest Researve and flows directly into KEL 50,000 litre water reservoir tank. The water is
partly used by the dairy unit as well as domestic consumption and the surplus for irrigation.
With proper plans, Engare Rongai can be exploited and used for more irrigation (especially
under drip irrigation) at particular hours of the day in the upper Rongai Farm area. However,
currently, the water from Engare Rongai River is used for domestic supply which is more
than sufficient for general workforce, home use, school, livestock, hospital etc.
It should be pointed out that water analysis of a sample taken from the rivers, indicates that
the water is of excellent quality for irrigation and post- harvest treatment. Microbiological
analysis shows also that there no detrimental microbes in the water, making it excellent for
use in horticulture.
2.10 Rainfall Distribution in West Kilimanjaro
The long term (1975 –2003, 28 years) annual rainfall recorded at west Kilimanjaro station is
782.3 mm while the annual amount in the last five years is 247.8 mm. Figure IV below shows
the monthly distribution of rainfall at West Kilimanjaro station, which is the nearest station to
KEL Farms.
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TABLE I: RAINFALL DISTRIBUTION AT WEST KILIMANJARO
Rainwater harvesting would be an added resource provided KEL can put up the necessary
facilities that can capture as much as possible the substantial amount of rain water that
otherwise flows out of the Farms into the drainage system of the main public roads.
In addition to the effort to harvest rain water, KEL shall build infrastructure for large scale
water reservoirs. It is proposed that each reservoir should store about 130,000 m3 at a usable
depth of 4 metres. This would be sufficient for a substantial production acrerage. The source
of water into these reservoirs would be from rain harvest and the mother reservoirs. The
water from the river and rain water collected would be stored in three 450,000 m3
constructed on the upper part of the farm. The mother reservoir shall be built at a depth of 5
metres or more. The terrain at the production site allows for feeding the mother reservoirs
through gravity. The reservoirs will be based on the configuration illustrated in Figure V.
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FIGURE IV: PLANTING AND IRRIGATION STRUCTURE PLANNED FOR KEL
W EST KILIMANJARO FLO W ER PARK - PHASE O NE 10 HA LAYO UT
6 met res road
2.5 ha (84 x 302 m)
8 metre main road
2.5 ha (84 x 302 m)
(A)
6 met res road
2.5 ha (84 x 302 m)
(B)
6 met res road
2.5 ha (84 x 302 m)
6 met res road
©
Pumphouse, Fert igat ion and fert iliser st ore
Drain wat er pond (700 m3)
Fresh wat er pond (130,000 m3)
(A) Coldroom packhouse and offices for 10 ha
(B) Chemical spray unit and chemical st ores
© washrooms
Figure VI (the graph) below shows the same data mentioned above. The rainfall is bi-modal
with the heavier rainfall falling in the March/April period and light rains in November. There
are about four months when the area is completely dry. One month on either side of the dry
period also receive insignificant amounts of rainfall.
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FIGURE V: TEMPERATURE AT KIA AND MOSHI
Priority attention will also be directed towards the development of boreholes. Hydrologists
consider the underlying rocks at KEL to have a potential of ground water based on
experience of nearest boreholes from the Farms. The yields of these boreholes which on
average are 10 km from KEL site would on average be about 15 m3 /hr assuming that two
boreholes can be sunk and operate for 15 hours daily to allow for recharge.
To the extent that no borehole is sank, and based on overall evaluation of water resources at
KEL, it can be concluded that KEL has sufficient water resources to meet the development of
the integrated expansion of its operations as proposed in this study.
2.11 Electricity/Power Supply at KEL
KEL had historically operated without power supply. However, electricity poles – now
pending distribution of cable/wires have already been installed across the Farms as part of the
national grid. It is now expected that power supply to KEL may take effect as early as July
2011. In addition, some two powerful transformers are within the Farms areas.
Aside from electricity from the national grid, the Farms have two standby generators
altogether covering a total of 260 KVA. More importantly, being a dairy farm with a target of
up to 1,000 herd in the next ten years, KEL has yet to utilize its biogas as a source of energy.
Under these projects, it is planned that KEL will install the necessary facilities and
12
infrastructure to effectively utilize its biogas capacity to supplement supply from the national
grip and standby generator capacity.
2.12 Transport and Communications
As already mentioned the project is located some 45 km from the Kilimanjaro Internatioanl
Airport (KIA). The Farms are also linked to the alternative Airport (apart from KIA) i.e. the
Jomo Kenyatta International Airport Nairobi (JKIA) by good road covering a distance of 320
km. The road network to both exit points is tarmac, offering year-round reliability of
transportation in and out of the Farms. Other alternatives are Mombasa and Dar es Salaam.
The local and international telecommunications network in the area is very good for all major
mobile networks in Tanzania or a combination thereof that the Farms may choose to use in
line with appropriate equipment that would be required for the Farm’s operation.
3.0
KEL EXPANSION AND “KILIMO KWANZA”
Eighty (80%) of Tanzanians depend on agriculture for their livelihood. Agriculture sector in
Tanzania has been improving in recent years and the launching of “Kilimo Kwanza” shall
add significant impetus to the road to Tanzania green revolution. More farmers are trying to
transform their farm activities from traditional agriculture to commercial agriculture to
improve the standard of living and national economy.
KEL`s expansion plans has come at an opportune time i.e. in the era of “Kilimo Kwanza”.
This KEL Plan relates to practically all the 10 Pillars of “Kilimo Kwanza”. However, this
Plan specifically anchors in six of the Pillars. Pillar four of “Kilimo Kwanza” calls for a
“Paradigm Shift” to a strategic production framework. All the products in KEL’s expansion
plan – with emphasis on expanded food production at KEL fall within the Paradigm Shift of
“Kilimo Kwanza”. Pillar seven of “Kilimo Kwanza” is “Industrialization for “Kilimo
Kwanza” with agro-processing and trade integration that facilitate the entire value chain in
agriculture as some of the key components of the Pillar. As already outlined in this study,
value addition in all the products in which KEL will expand production is a major focus of
this Plan. Pillar nine is Infrastructure Development for “Kilimo Kwanza”. Irrigation and
communication infrastructure is among the key enabling factors for the implementation of
this KEL Plan.
Others are: Pillar six i.e. “Incentives for “Kilimo Kwanza” including removal of market
barriers for agriculture products and a range of fiscal and non – fiscal incentives are among
the factors in “Kilimo Kwanza” which are important for the KEL project. Finally the pillar
that enables or facilitate all the rest i.e. Pillar two: Financing “Kilimo Kwanza”. Various
financial instruments and facilities have emerged for financing agriculture under “Kilimo
Kwanza” including the Tanzania Investment Bank Agricultural Window from which this
project expects to get funding pending the establishment of the planned Tanzania Agricultural
Development Bank, which is expected would provide larger financial facilities on a longer
term basis. On the whole, any major agricultural development project has huge advantages in
being implemented in the present conditions and climate of “Kilimo Kwanza”.
Until the time of its privatization, the KEL Farms had been confined to Dairy operations
only. KEL diversified the farm structures to give it a mix farming dimensions such as
horticulture production, grain production, dairy operation, and coffee production. The goal of
13
expanding the production in these specified areas was to optimize the returns of the entire
farm. In this regard, KEL anticipates to expand her current operations in order utilize the
entire 5,000 acres of land. KEL shall now allocate enough land that would support each
development.
It is against this background that KEL is embarking on its expansion strategy to contribute
towards lifting the agriculture sector of the farms from its age-old system of poor
performance to a much higher level of productivity and improved returns. KEL would like to
be among the entities, which will participate in moving Tanzania’s agriculture into a 21st
century industry and a leading agriculture commercial enterprise in the era of Kilimo
Kwanza. In particular, this project shall make a contribution towards that objective by
bringing small holders into the value chain.
3.1 KEL as a Going Concern
KEL has envisaged the idea of expanding its current production to be vital. All the products
grown in the KEL`s farms have high demand both at local and international markets. People
will always need to consume horticulture products, grain products, coffee, and dairy products.
KEL depending on and weather conditions has produced up to 1000 litres of fresh milk per
day – making it the second/third single largest producer of fresh milk in Tanzania. It is
already a major producer of grain – especially wheat. It is substantially involved in
horticulture production and up to 300 acres of land, which can be irrigated by water moving
on its own gravity has been set aside for the planned expansion of horticulture. Presently,
KEL has a modern high quality milk herd of over 400 and projected to increase to a total of
1000 herd by 2020. Currently, it operates a 35 acre coffee farm that under this plan will be
expanded to 100 acres. KEL has a well developed physical infrastructure. KEL agricultural
equipment and machinery along with some movable and none movable assets are shown in
Annexe I to this Study. Above all, KEL has a well developed 5000 acre farm. Thus, KEL is
not just an on-going concern; rather, it is already a major player in agriculture in Tanzania as
a private sector entity.
4.0 THE PLANNED KEL PROJECTS AND ASSOCIATED ACTIVITIES
The development of the integrated projects in the KEL planned operations will focus in five
main areas. These are:
 Expansion of horticulture production;
 Expansion of grain production;
 Expansion of Dairy Operations specifically milk production;
 Expansion of Coffee production focusing on high quality coffee; and,
 Undertaking a value addition process on all the above products.
 Value addition/processing of the products
At the moment, KEL produces all the above projects, but on a moderate scale. With new
company’s objectives and expected working capital, the company anticipates utilizing its
production to the full potential and achieve higher returns on its investment. Enough research
about the KEL farms has been conducted with the aim of identifying how well the land
should be used, and the results indicated the production of the above operations will produce
significance benefits to the owners and community around the farm in general.
14
4.1 Project costs
The overall project cost is estimated at TZS. 10.0 billion i.e. approximately US$ 6.25 million
at an exchange rate of TZS 1600 to US$1. Out of this amount TZS 6.8 billion will be capital
expenditures. Operating expenditure in the first year will be TZS 2.5. This amount is
expected to cumulatively add up to 38.1 billion in the tenth year of operation. Investment in
the expansion of the following will be as follows: wheat production TZS 2.7 billion; dairy
expansion TZS 2.5; horticulture TZS 2.2 billion; oil seeds TZS 685 million; seed
multiplication TZS 118 million; beans production TZS 605 million; and, expansion of coffee
production TZS 507 million. The balance of TZS 685 million will be invested in the farms
infrastructure i.e. fencing of the farm, roads, housing and other residential facilities for
workers including social services like health clinic, children kindergarten, etc.
4.2 Project Financing Arrangements
The financing of this project is expected to be a combination of equity from the investors and
loans from various lending sources. Specifically, a joint venture arrangement is contemplated
that will generate adequate equity from new investors in addition to borrowing as indicated
above.
4.3 The structure of the Project
This project is structured in such a manner that its implementation must not start with all the
production areas at once. A choice could be made to start with the expansion of horticulture
or dairy; the idea will be to start with the most profitable operation and move to the rest on
step-by-step basis. However, because of the high fixed costs of the project, the most feasible
approach would be the launching of all the components of the project at once.
4.4 Financial Returns and other benefits Expected by the Projects
Great financial returns are expected to be generated from the KEL`s expansion. Accumulated
net earnings from the project are estimated at over TZS 160 billion in the projected period of
10 years of operation or an average of TZS 16 billion annually. On the average TZS 5.2
billion will be generated from horticulture per year and the rest from all the other operations
of the farms. Thus, the project is financially viable and operationally feasible. However, the
social benefits arising from this project are considerable. The project will generate at lease
500 jobs in the local area; bring up to 800 small holders mainly women to the dairy and
horticulture value chain; provide corporate and other taxes to the government; enhance food
self-sufficiency for Tanzanian; and contribute towards poverty eradication specifically in its
region of location (population over a million people) and in Tanzania generally.
4.5 Valuation of the Assets
According to the report issued by PSRC in 1995 with respect to the KEL farms, it PSRC had
valued two farms at TZS. 6.9 billion at a time the exchange rate to the dollars was around
TZS 500 to US$1. Under the valuation, TZS 4.0 Billion was for the Rongai farm and the
remaining TZS 2.9 billion accounted for the Mwanza farm. No valuation of the Farms and its
other assets was carried out for this project. Presently, the estimated value of the Farms and
its assets stands at USD 14 million.
15
4.5 Competitive Advantage offered by KEL farms
KEL`s farms posses the following features which provide competitive advantages of the
expansion process contemplated by KEL:
• Good quality of land that is found in both farms
• Availability of water resources and good annual rainfall
• High attitude of the farm- which yield advantage of productivity
• Proximity of the farms to good transport and telecommunication infrastructure
including the 45 km from Kilimanjaro International Airport and 320 km from Nairobi
• Advantage of being a large scale producer
• Access to national grid electricity and a huge amount of biogas.
5.0 EXPANSION AND DEVELOPMENT OF DAIRY PRODUCTS
In a large measure, Dairy has been the mainstay of KEL operations – given that it had been
the basis of which the Farms were operated prior to their privatization. Presently, KEL has
around 400 dairy cattle with just over 100 cows in milk per day. The current dairy operations
of KEL have the capacity to produce about 1000 (one thousand litres of fresh milk) per day.
The feeding of the cattle is mainly through grazing; however, this process is expected to end
upon the expansion of horticulture and grain production.
FIGURE VI: KEL FRISIAN DAIRY CATTLE
16
5.1 Suitability for Dairy Cattle and Milk Production at KEL Rongai Farm
The Kilimanjaro area where KEL Rongai farm is located is pre-eminently the most suitable
area for dairy cattle development. It is a dairy cattle environment in which the targets
stipulated in this project could best be met. Figure VII below, shows the concentration of the
dairy cattle in the area in question.
In recent years, there has been a commendable
improvement in milk production in Tanzania which increased from 1.5 million litres in
2007/8 to 1.9 million litres in 2009/10.
FIGURE VII ESTIMATED TOTAL DAIRY CATTLE 2007/2008 BY
REGION
Sources:
*
**
District Integrated Agricultural Survey 2007/2008 National Report
National Census of Agriculture 2007/2008 Report, Volume II
District Integrated Agricultural Survey 2007/2008 – National Report
As shown in the Figure VII above, around 50% of the dairy cattle in Tanzania (or an
estimated total of 230,706 out of a country’s estimated total of 461,604 in 2007) were located
in Kilimanjaro. KEL – Rongai Farm is presently the single largest dairy complex in Northern
Tanzania. The largest in the country is DAFCO Kitulo Farm in Iringa region. On the whole,
the concentration of dairy cattle in Kilimanajaro confirms its suitability for dairy cattle, and
this project.
17
In the new phase of expansion, KEL wishes to move from just over 100 cows in milk per day
or a herd of just over 400 to a herd of 1000 in 2020 and anticipates in that year to produce up
10,000 litres per day. This is planned to be achieved through an expansion plan that will
include





Setting aside 300 acres for intensive management of the dairy herd; including planting
of hay, Lucerne and a range of silage products for the livestock;
Setting up processing facilities for producing live stock feed, in addition to or using
the residuals from the horticultural and grain projects;
Building a modern milk palour and other associated infrastructure;
Processing of the milk at the Farm - to capture the full value of the dairy operations;
Bio-fuel power out of the concentrated livestock under intensive care management.
5.2 Varieties of Milk products envisaged in KEL Value addition
The initial phase of the dairy processing will start with fresh milk processing to UHT level,
and move to sour milk, yogurt and cheese.
FIGURE VIII: MILK PRODUCTS VARIETIES PLANNED BY KEL
In addition to the above activities, KEL will build the capacity of selling potentially high milk
yielding heifers to small holders within the community to increase their income generation
and contribute towards poverty alleviation. KEL had done so in the past but reduced herd size
brought the practice to an end.
18
5.3 Market for milk in Tanzania
Milk consumption in Tanzania is very low-even by the standards of sub-Saharan African.
While per capita milk consumption in Tanzania stood at 28 litres in the mid 1990s, it was 80
litres in Kenya, and an average of 35 litters in sub-Sahara-Africa. This share is marginal
compared to world per capita average of 105 litres. Tanzanians strategy has been gearing
towards raising the above level of per capita consumption of milk.
The raw milk that KEL produces dominate the domestic market and the product will continue
to attract the highest demand from variety of milk consumers in Tanzania. A survey of
Tanzanian households carried out in the mid 2000s established some very clear patterns in
terms of the type of milk preferred by different income groups, and that each such group was
able to obtain its preferred milk.
A clear conclusion that was given in that survey was that, the type of milk marketed by KEL
retains an overwhelming share of the raw milk market in Tanzania provided supply can be
properly delivered to the appropriate market segment. Milk products preferences by
household respondents might have assumed (in a low income country like Tanzania) to be
principally influenced by price, with other factors such as quality relegated to lower
considerations. On the contrary, reasons cited by consumers in the above survey for
purchasing particular milk product showed that preference for fresh whole milk was due to its
flavour, availability and low prices. KEL`s milk possess all these important characteristics
Presently, KEL sells almost its entire production to only two milk processors. The latter
needs a daily supply of over 10,000 litres. Currently, the total available Arusha and
Kilimanjaro regions including the milk from KEL is estimated at 4,000 litres per day. In
addition to Brookside, Arusha, other milk plants in Dar es Salaam and Tanga are in need of
fresh milk. Thus, the demand for fresh milk is on the rise. Notwithstanding, KEL already has
a supply contract for its entire production to these two buyers. In effect, this business plan,
among other things, is to expand milk production in order to meet the production targets for
the contract with two buyers and also supply other needy buyers in the short term before KEL
embarks on its own processing of the milk. On the whole, overall market conditions for fresh
milk are positive.
19
FIGURE IX: TYPE OF MILK PREFERRED BY INCOME GROUPS AND PRICE
Source: The Tanzania Dairy Sub-sector A Rapid Appraisal 2005.
Figure IX also demonstrates that a large majority of all households (86%) prefer and consume
(82%) fresh whole milk or raw milk, and might only buy a different type in the absence of the
raw milk. These groups were divided according to their monthly income of up to Tshs.
50,000 for the lowest group; followed by one that earned between Tshs. 50,000 and Tshs.
100,000; and, finally the group that was in the income category of over Tshs. 100,000. A
clear conclusion that was drawn from the survey is that the type of milk marketed by KEL –
Rongai Farm retains an overwhelming share of the raw milk market in Tanzania provided
supply can be properly delivered to the appropriate market segment
A further inquiry in the survey was directed to the rationale or the basis governing the
decisions of the different groups of consumers (with respect to the purchase of the different
types of milk products) in order to determine the sustainability of that pattern of preference.
These results are re-produced in Figure X below.
20
FIGURE X: PURCHASE PRIORITIES FOR TYPES OF MILK PRODUCTS:
Source: The Tanzania Dairy Sub-sector A Rapid Appraisal 2005.
Milk products preferences by household respondents might have assumed (in a low income
country like Tanzania) to be principally influenced by price, with other factors such as quality
relegated to lower considerations. On the contrary, reasons cited by consumers in the above
survey for purchasing particular milk product showed that preference for fresh whole milk
was due to its flavor, availability, and low price.
The underlying rationale in the above pattern also has a great deal to do with the uses to
which the milk is put, and the channels of its distribution. Milk at the level of households
surveyed is mainly consumed in tea, and in fermented form or more popularly known in
Tanzanian as mgando. At the same time, the principal channels of distribution involve direct
home delivery by producers. In Kilimanjaro and Arusha these deliveries accounts for some
65% of the milk marketed by Street vendors and local retail shops.
5.4 Demand projections for milk in Tanzania
Tanzania’s strategy was (in the 1990s) geared towards raising this level of per capita
consumption to 36 litres by 2000 decade. Figure XI below shows this target has been
reached.
21
FIGURE XI: PROJECTIONS IN DAIRY SUPPLY AND DEMAND IN TANZANIA
Million litres milk/yr
1500
1300
1100
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2008
2009 2010
2% GDP growth
1% GDP growth
Milk production
Source: The Tanzania Dairy Sub-sector A Rapid Appraisal 2003.
The survey reproduced in Figure XI above also concluded that there existed a high-income
elasticity of demand for milk and dairy products in Tanzania of about 0.8. On assumption of a
modest increase of 1% rise in GDP, the survey estimated that milk consumption would rise
by over 60% by 2010 to reach 1.5 billion liters annually from 600 million in late 1990’s. The
Figures also projected an increase of 40% (above the level to be achieved under 1% GDP
growth
900 rate) assuming a modest 6% growth in the dairy cattle and a 2% GDP growth rate. On
this basis, by 2010 there was to have been a shortfall of 170 million liters of milk annually or
about 13% of actual demand. Since GDP growth rate has been higher, a realistic expectation
is that demand for milk and milk products is much higher than has been projected in the
above survey.
5.5 Meeting the milk targets
700
KEL
has around 400 dairy cattle. This herd was scaled down from around 800 as a result of
market problems for raw milk when the milk processing factory in Arusha collapsed. The
cows in milk per day at the farm are over 100. The genetic potential of KEL cows is a around
20 litres per cow per day. However, the present production is around 10 litres. It is KEL`s
goal to increase the herd to 1000 and produce up to 10,000 litres of milk per day in the year
2020 based on an expanded herd and higher yield per cow per day.
5.6 Facility for Expanded Milk Production
An estimate of TZS 150,000,000/= at the very minimum will be needed to move KEL’s
dairy operation to its next level of development
The following table shows the projected dairy projection which specifically shows the
increment of cows versus milk production in litters.
22
5.7 Project Implementation schedule
TABLE II: IMPLEMENTATION SCHEDULE FOR THE PROJECT
Based on the above implementation schedule, Table III below gives the capital expenditure
needed in the proposed dairy operations.
23
TABLE III: CAPITAL EXPENDITURE FOR DAIRY OPERATIONS
24
6.0 EXPANSION AND DEVELOPMENT OF HORTICULTURE
The KEL horticulture project was until recently directly employing some 150 workers. This
number has now come down considerably Manyof these workers (80%) are women, mostly
Masai women who have only recently ventured into farming labour market.
6.1 Horticulture - Suitability of West Kilimanjaro Area for horticulture production
The major suitable areas for production of horticulture in Tanzania are the Northern
Highlands, the Southern Highlands and the alluvia plain in Usangu / Mbeya. The Northern
Highlands are principally the areas located on the slopes of Mt. Meru and Mt. Kilimanjaro
which include the KEL farms. The Map below i.e. Figure XII derived from Tanzania
Horticultural Development Strategy developed by the Horticultural Development Council of
Tanzania (HODECT) shows the key horticultural areas in Tanzania.
6.2 Horticulture Key Statistics
 Horticulture is the fastest growing industry in Tanzania
 Export growth is 8% per annum
 Perishable horticulture for exports to Europe started in the 1970s
 Vegetables exports started in the 1970s but it was only in 2000 when serious
exports business started.
6.3 Meeting the production conditions of the horticulture production
The KEL-Rongai farm is located on the lower western side of Mt. Kilimanjaro at an attitude
of 1,200 to 1,500 meters above sea level. The farm receives in an average year 750mm of
rainfall. The amount ranges between 500mm in those zones of the farm that receive the least
rainfall to 1,000mm in those areas on the farm that receives high levels of rainfall. However,
the horticulture project will rely on irrigation using already available water resources at the
farm. Thus, suitability of the farm for the project is beyond question.
25
Figure XII. Suitable Horticulture Production Areas or Clusters in Tanzania
5.2.1Current State of Horticulture at KEL
Currently, KEL horticulture production was until utilizing approximately 110 acres based on
surface irrigation. But the acreage has now been reduced to 25 acres pending the
establishment of a Pack House under this project. The main products are sugar snaps, fine
beans, baby corn, soya beans, etc. The demand for these products is high and growing both at
local and foreign market. However, a competitive realization of the growing market for these
products requires:
(a) Value addition at KEL through investment in a Packing House;
(b) Increased daily production to meet shipment lots for air cargo from Kilimanjaro
International Airport (KIA); and,
26
FIGURE XIII: SUGAR SNAPS AT KEL FARM
6.4 Horticulture Expansion Plans
Plans by KEL to support (through contract farming) a large number of small holders has
already identified 200 and will eventually cover up to 800) to bring them into the agricultural
value chain, through organized market outlets.
KEL envisages expanding her current horticulture production from its present low acreage to
300 acres – allowing for necessary crop rotation. The estimated cost of expanding the
production to this level is expected to be TZS. 400 Million. The ffort will start with 70 acres
and gradually expand. The expansion to 300 acres is expected would in the final development
phase of the KEL project generate – at its peak – up to ten tons of horticulture products of
various varieties per day. This production will be heavily supported by drip irrigation and
necessary water reservoirs which shall be used as necessary. For the 300 acres, land
allocation will follow the following;
27
6.5 Market and Demand for Horticulture Products
Horticulture constitutes a major pillar in this business plan in terms of investment and Turn
Over. Prior to the plan to embark on this large scale production, KEL has been involved in
the production in this sub-sector and results were successful both in terms of total production,
the quality as well as yield per acre for key horticulture products.
The research shows that Tanzania is relatively new comer in the horticulture industry
compared to two key neighbouring countries namely Kenya and Zimbabwe. For example,
while in the mid 2000s Kenya and Zimbabwe were estimated to have accounted for some
50% and 10% respectively of the total African-Caribbean-Pacific countries (ACP) export
fresh vegetables to the European Union (EU), Tanzania was not among the 18 key ACP
exporters of these products to the EU.
More significantly, the total EU imports of the products from the ACP that amounted to
30,500 metric tons had represented just around 10% of the total EU imports. This implies that
significant scope still existed in the EU for increased supplies from ACP countries including
Tanzania. The key markets for horticulture are shown in Figure XIV below.
Available figures show that peas and bean varieties imports into the EU countries have
increased constantly in volume and dollar terms reaching a total of 314,000 tons or US$ 317
million throughout 2000 - 2010. Significantly, on average, 60% of these products are
supplied by developing countries. In the same period, as per the figure 5 above, the leading
suppliers were Kenya (26%), Spain (15%), The Netherlands (8%), France (8%), Morocco
(7%), Egypt (6%), Zimbabwe (6%) with 24% being accounted for by others including
Tanzania’s share.
28
FIGURE XIV : PEAS AND BEANS VARIETIES – EU MARKETS AND SUPPLIERS.
Source:
EUROSTAT 2008
Horticultural exports by Tanzania have been increasing gradually, making horticulture the
fastest growing agricultural sub-sector in Tanzania. The growth rate for the industry is
currently 10% per annum with 63% increase on new investments and 23% expansion on
existing horticultural farms since 2005. Despite the mentioned achievements, the industry
still operates far below its maximum potential as compared to the industry in the region. The
sector has been a significant contributor to the national economy through employment
creation, support of community development programmes, foreign exchange earnings,
support to other sub-sectors through purchases of agro –inputs, etc. Table XV below shows
the varieties and the production trends of horticulture in Tanzania.
29
FIGURE XV: EXAMPLES OF HORTICULTURE PRODUCTS IN TANZANIA
Tanzania’s diverse
climatic conditions
allow for the
cultivation of a wide
range of horticultural
products that can serve
domestic, regional and
international markets.
Currently, some
products are only
destined for local
markets, even though
they have regional and
international potential.
Some products are
mainly for export, even
though there are
undeveloped markets
within Tanzania. This
strategy recognizes the
potential of Tanzania’s
horticulture produce to
expand domestic and
international markets.
Examples of horticulture products in Tanzania
Fruits
Vegetables
- Apples
- Berries
- Jack fruit
- Mangoes
- Oranges
- Papaya
- Pawpaw
- Passion fruits
- Pears
- Pineapple
Spices,
Herbs and
- Plums
- Green
- Chilli Peppers
Beans
- Asparagus
- Baby corn - Snap Peas
- Brocolli
- Tomatoes
- Baby Corn - Onions
- Snow peas - Cabbages
- Green Peas - Nightshade
- Peppers
- Okra
- Amaranth - Pears
- Pumpkin
- Cassava Leaves
Cut flowers and Ornamental
Plants
- Roses
- Chrysanthemum
- Cuttings
- Other Ornaments
Nuts
- Cardamon
- Cinnamon
- Clove
- Nutmeg
- Vanilla
- Herbal Medicines
- Macadamia Nuts
Source: HODECT - National Horticultural Development Strategy
Notwithstanding the growing domestic and global demand for horticulture products, as will
be seen from Table IV below, production in Tanzania has only in some cases demonstrated a
sustained growth pattern. Otherwise, in a number of cases, production has stagnated, or
declined. KEL project are among those that may contribute towards meeting the domestic and
external demand.
30
TANZANIA: HORTICULTURAL PRODUCTION 1999/2000-2007/2008
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/2008
FRUITS
Banana
254,000
245,000
455,000
380,593
500,000
505,000
617,204
682,330
787,966
Mangoes
142,300
145,000
146,000
154,302
255,000
257,550
309,174
334,986
300,000
Oranges
140,000
139,500
145,000
155,865
168,854
170,542
177,881
181,550
210,000
Pineapples
218,400
218,000
200,000
181,629
196,765
198,733
207,284
211,560
245,600
Plums
17,300
16,000
18,000
16,818
18,219
18,401
19,193
19,589
20,800
Tangerines
11,200
11,500
11,300
16,310
21,502
22,636
22,490
27,100
Lemon
1,000
700
1,200
3,155
7,200
22,527
7,272
9,331
9,500
10,500
Pawpaw
2,500
2,300
3,000
4,320
4,680
4,727
4,930
5,032
6,038
Avocados
5,100
4,800
5,500
5,366
5,813
5,871
6,124
6,250
7,500
Pears
3,700
2,500
1,750
1,620
2,800
2,828
3,000
3,200
3,840
Peaches
3,700
3,200
3,800
4,685
5,076
5,127
5,347
5,458
6,200
Passion fruits
950
1,200
1,700
1,391
3,000
4,259
5,111
2,100
1,700
1,500
2,000
2,166
3,030
2,188
3,849
Guava
2,282
2,329
2,795
Apples
4,000
3,900
4,020
3,860
5,070
5,121
5,751
6,066
7,279
Jackfruit
120
100
150
740
1,200
1,212
1,781
2,066
2,479
Loquat
150
135
320
500
920
929
1,348
1,558
1,870
Sour sop
100
90
120
209
226
228
238
243
292
806,620.00
795,625
998,360
933,362
1,198,491
1,211,286
1,397,353
1,498,466
1,645,370
Tomatoes
130,000
120,000
130,500
132,801
142,000
145,420
151,750
206,595
237,914
Cabbage
221,114
220,000
222,700
183,619
195,000
207,550
204,515
214,273
207,128
74,025
106,000
110,500
126,132
126,643
118,010
143,948
147,601
137,121
Amaranthus
2,000
2,200
2,400
2,370
2,520
2,705
1,919
2,090
2,600
Chinese cabbage
1,850
1,700
1,900
2,213
2,600
1,843
2,408
2,562
2,154
Eggplant
1,870
1,880
1,900
1,950
2,400
2,434
2,276
2,714
2,900
Sweet pepper
1,800
1,890
2,100
2,090
2,300
2,540
2,595
2,694
2,700
Green peas
1,250
1,530
1,850
2,011
2,196
2,325
2,200
2,428
2,554
Green beans
1,730
1,710
1,750
1,836
2,250
2,510
2,590
2,800
2,970
Carrot
1,200
1,500
1,450
1,365
1,700
1,727
2,108
2,362
2,514
Swiss chard
559
580
570
576
624
630
657
674
809
Okra
250
220
300
342
560
566
678
736
883
Cauliflowers
200
210
300
360
410
590
625
680
658
437,848
459,420
478,220
457,664
481,203
488,849
518,269
588,209
602,905
Cardamom
500
450
560
432
550
600
580
500
530
Ginger
320
300
380
254
300
350
520
600
670
Garlic
100
90
150
250
350
450
380
400
480
Total
VEGETABLES
Onions
Total
SPICES
Vanilla (fresh beans)
NA
NA
NA
5
6
NA
NA
NA
18
Total
920
840
1,090
941
1,206
1,400
1,480
1,500
1,698
Roses
NA
NA
NA
NA
NA
NA
4,792.00
5,450.00
6,659
Cuttings
NA
NA
NA
NA
NA
NA
1,070
1,348
1,618
Total
NA
NA
NA
NA
NA
NA
5,862
6,798
8,277
FLOWERS
Source: MAFC 2008
31
FIGURE XVI:
TANZANIA
HORTICULTURE
EXPORT
PERFORMANCE
Figure
2. Tanzania
Horticulture
Export
Performance
USD $
Millions
146
160
140
120
100
80
60
40
20
-
89
62
45
2004
45
2005
2006
2007
2008
Source: UNComtrade Data, 2010
These two FIGURES XVI and XVII demonstrates that on the one hand, growth of horticulture
exports by Tanzania was at a rate of 10% annually on the average; while on the other hand, it
should actually have grown by 25% annually.
FigureHORTICULTURE
4. Tanzania Horticulture
Export Potential
FIGURE XVII: TANZANIA
EXPORT POTENTIAL
USD $ Millions
1,850
2,000
1,500
1,000
500
150 185
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Note: 2010 figure based on 2008 exports figures from UNComtrade with modest annual growth assumption of 10% in 2010.
Growth projections from 2010 to 2020 based on an average annual growth rate of 25%
6.6 Major Constraints in Tanzania’s Horticulture sector
To the extent that suitable land and weather conditions exist in Tanzania, major problems in
large scale production of horticulture in the country have always been financial and technical.
This project is in a position to overcome such obstacles, which include market information,
32
adequate working capital resources, and technical expertise necessary from seed selection,
pesticides and other diseases control requirements.
A key aspect requiring maximum attention is quality control that would make KEL`s
horticulture sufficiently competitive with that of the rest of the world in major horticulture
markets especially EU. These markets have grown so sophisticated that in addition to highest
quality product, an equally important focus is directed toward high quality consumer packs to
direct place the products on the shelf of the importing distributor ready for the shopping
consumers.
FIGURE XVIII: DRIP IRRIGATION SYSTEM OPERATED BY KEL
Drip Irrigation System KEL Plans to Reactivate for the Horticultural Project
6.7 Implementation schedule/ Time frame required implementing a project
The implementation schedule for expanded horticulture production will start in January 2011.
Each plant phase will take the duration of eight weeks from the time the farms are prepared to
harvesting, packing and selling crops. To facilitate proper production of horticulture products,
the following activities should take place in each season:
 Ploughing
 Harrowing
 Planting
 Applying fertilizers
 Weeding
 Spraying
 Harvesting
 Packing and delivering the product to the market
33
The table below shows activities to be performed versus time frame in each of horticulture
products
TABLE V: IMPLEMENTATION SCHEDULE HORTICULTURE
6.8 Facility Reserved for Horticulture Expansion
The estimated TZSh.400 Million is expected to be invested in this level of expansion. The
amount will be used directly for the purpose of all production activities as well as procuring
production items.
Items to be procured under this category include:






Water pumping equipment;
Grading equipment
Out-grower support
Seven tons Tracks ( 2 units)
Construction of a water damn with a capacity to hold 400,000 liters of water
Construction of a packing house
TABLE VI: CAPITAL EXPENDITURE - HORTICULTURE
34
7.0
EXPANSION AND DEVELOPMENT OF GRAIN PRODUCTS
7.1 KEL Grain Production Future Outlook
KEL wishes to take her current production to the next level by expanding production from
2000 acres to 3000 acres. KEL anticipates to produce the following products in its new
expansion plan.
 Wheat
 Beans
 Oil seeds and
 Seed production i.e. seed multiplication
7.2 Grain Production (wheat, beans, oil seed, and seed production)
Currently, Tanzania only produces 5% of its wheat requirements. The country’s present
importation is in excess of 500,000 tons annually at a cost of US$175 million. Thus, the
country is a long way off in terms of being self sufficient in wheat production and therefore
the market for the KEL wheat is not a problem – at least in the medium term.
Grain production in Tanzania is of daily concern. Roughly 60% of food intake by weight
consists of starchy staple foodstuffs in the urban areas. The composition of the urban staple
food diet is wide-ranging. However, maize and rice dominate when measured by value (58%)
or by weight (55%) of total staple foods consumed
The price of wheat products (bread, or cakes) has increased over the past few months due to
rising world food prices, as local wheat production (about 100,000 MT/year) cannot meet
local demand and large scale imports are required. A 500g loaf of bread that has sold at TZS
500 for the past two years has been selling for TZS 800 since March 2008
Wheat, maize and beans are staple food for the majority of Tanzanians. As the entire
community consumes the commodities, the demand is growing along with population
growth. While maize is number one, wheat is the fifth most important grain consumed in the
country. It is produced in small holdings and in large-scale farms. Tanzania produces hard
wheat. Flour millers usually mix the locally grown variety with imported soft wheat to
improve its quality.
Currently, KEL utilizes between 1500 and 2000 acres of grain production – mainly, wheat,
beans and maize. With the planned end of the cattle grazing in favour of intensive feeding, at
least 3000 acres will be available for grain (food) production, which will in turn add to the
feeding of the dairy (cows) under the integrated development. This acreage, properly
developed and managed, can produce some 5,000 metric tons of food grains and on a
continuing basis make a modest contribution towards an increased food security in Tanzania.
The Arusha region and West Kilimanjaro Farms i.e. the Northern Highlands of the country
produce most of the domestic wheat supply. Wheat is also produced by small holders but to a
smaller extent in Mbeya and Iringa regions in the Southern Highlands of the country. It
accounts for about 3% of all cereals produced in the country of which a large part is
consumed in urban areas with only small amounts filtering into rural households. But the key
will be productivity as shown in Table VII below.
35
TABLE VII: COMPARATIVE DATA ON PRODUCTION AND PRODUCTIVITY OF
SELECTED CROPS FOR YEAR 2007
Productivity MT/Ha
Production (MT)
Cotton
China
USA
Brazil
India
Pakistan
Tanzania
4.2
2.44
2.3
1.4
1.3
0.67
15,248,000
6,163,000
2,589,820
8,805,600
3,965,000
300,000
Rice/paddy
Egypt
Australia
USA
China
Vietnam
Indonesia
Bangladesh
India
Tanzania
9.5
8.2
7.5
6.42
4.98
4.7
4
3.3
1.8
N/A
N/A
N/A
187,397,460
35,867,500
57,157,436
43,057,000
144,570,000
1,341,835
Maize
Newsland
10
N/A
USA
9.46
331,175,072
Argentina
7.7
21,755,364
China
5.15
151,948,870
Brazil
3.79
52,112,200
Mexico
3.2
23,512,752
Tanzania
1.22
3,659,000
Wheat
UK
7.7
N/A
Egypt
6.3
N/A
France
6.25
32,769,900
China
4.6
109,298,296
India
2.7
75,800,000
USA
2.7
55,822,700
Russian Federation
2.1
49,389,860
Tanzania
0.9
82,800
Source: Food and Agriculture Organisation /Ministry of Agriculture Food &
Cooperatives
Quite apart from all other competitive factors favouring KEL, or in addition to those factors,
the key to KEL’s success will be productivity. As shown in Table VII above, Tanzania has
performed very poorly in terms of productivity compared to world’s best practices. In the
36
data below, KEL is involved in the production of wheat and to a lesser extent maize. In these
areas, in addition to dairy and horticulture, KEL has performed very well.
7.3 Market Availability of Grain Products
Local and international markets for KEL products are available. The company will not
struggle to sell its products because of the favourable markets conditions. The need and usage
of KEL`s products is considerable. Just by looking at local markets, Tanzania has a
population of 42 million people and projected to increase to around 60 million in the final
year of the projected duration of the project. As will be shown below, Tanzania has been
going through a food deficit situation. In order to cope up with this situation Tanzania
imports extra food (e.g. rice, wheat, cocking oil and periodically maize) to sustain the
growing demand which is mainly influenced by non-optimal food production conditions and
population growth of the country. Table VIII below the demand required to meet national
consumption targets, quite apart from exports.
TABLE VIII: PER CAPITA FOOD CONSUMPTION – TANZANIA
(Annual Consumption and projections (kilograms) per person)
1961/63
Wheat
Maize
Potatoes
Cassava
Pulses
Banana
4.8
54.1
1.2
223.8
8.4
29.1
1969/71
1979/81
5.0
55.2
2.3
207.0
9.7
27.9
6.8
72.3
8.3
240.2
12.6
27.4
1988/90
5.6
83.6
7.1
228.0
13.8
21.1
2000
2010
6.1
85.0
7.3
220.0
13.8
22.0
6.4
87.0
7.5
210.0
14.0
23.1
Source: Food and Agricultural Organization of the United Nations (FAO): Investment
Center FAO/ADB Cooperative Program 2008.
Tanzania has on average been a food deficit country. In order for the country to meet its food
deficit situation, it has to produce at least 125% of its food needs to allow a buffer stock.
However, over the past 20 years, annual monitoring reports have shown that overall food
production has been increasing over time. However:
•
The extent to which locally produced food meets annual requirements
in terms of Strategic Stock Reserve (SSR) has continued to stagger
between 88% and 112%, mainly due to decline in cereal production
and productivity. In the last 5 years SSR has just been a little over
100% falling short of the required level of national food security.
•
Cereals production has staggered around 75-95% of requirements
implying a cereal deficit of between 375,000 and 875,000 tonnes on
annual basis
37
•
The cereal supply in 2009/10 stood at 79% implying a deficit of
1,348,445 tonnes. Approximately 50% of national food crop
production is composed of cereals out of which 30% is maize.
IN 2010/2011 the Ministry of agricultural and Food Security (MAFC) estimates that the food
supply has slightly improved following good rains in the 2009/2010 season. However, the
MAFC Final production estimates indicate that the country will meet its national requirement
by 111 % implying a 1,176,076 tonnes of surplus food in 2010/2011. In effect, this is not
surplus in the real sense since the national food security threshold would be 125% as
indicated above.
Accordingly, based on data from the Food Security Unit of MAFC, Tanzania is not yet food
secure – so much so that in March 2010 about 717,684 people in 47 Districts were facing
food shortages to the tune of 21,604 tons according to a recent report by the Bank of
Tanzania (2010). In effect, food stocks held by SSR declined by to 64,694 tons in March
2010 from 124,252 tons in March 2009. Tanzania’s current declining trend in food self
sufficiency is traceable back to 2006/7 crop season when the self sufficiency ration moved
from 112% to i06%, 105%, 102% in 2007/8, 2008/9, and 2009/10 respectively. As indicated
above, it rose to 112% in 2010/11 which does not meet national targets.
7.4 Export Markets for Tanzania
But even on the assumption that increased production will soon meet Tanzania’s domestic
market needs, KEL’s market focus need not be directed towards domestic market alone. On
the contrary, Tanzania’s agricultural transformation will depend to a large extent in being
able to feed and provide other agricultural goods first within the East African Community
with a population of 126 million and growing (projected to reach 200 million by 2020 i.e.
final year of this project); secondly, when SADC is added it brings the population of the
market available to Tanzania to 400 million; and, adding COMESA ( allowing for successful
negotiations in the on-going tripartite arrangements (EAC/SADC/COMESA) brings the
population of market available to Tanzania and KEL to around 600 million people. This is a
big market.
But quite apart from the African market, there is the rest of the world - including rapidly
growing markets such as India and China which continue to import massive amount of food
and agricultural raw materials. In 2010 China imported 40 million tons of Soya and 6 million
tons of maize. These are quantities for which Tanzania can only meet a fraction of such
external demand. Table IX below show the crop production over the last five years.
38
TABLE IX: CROP PRODUCTION 2006 - 2007 TO 2010 – 2011
2006/2007
2007/2008
2008/2009
2009/2010
2010/2011
Hectare
Tons
Hectare
Tons
Hectare
Tons
Hectare
Tons
Hectare
MAIZE
1,841,305
3,068,420
936,312
2,751,512
1,939,052
4,637,509
440,761
1,364,400
1,992,686
PADDY
318,438
1,222,304
302,655
1,300,334
450,816
1,748,768
45,513
591,027
577,564
SORGHUM
FINGER
MILLET
532,864
838,149
211,880
707,298
488,910
819,592
24,196
20,061
486,247
134,318
58,290
77,764
133,659
25,703
56,128
2,669
10,879
40,618
7,418
17,771
14,790
68,310
38,083
44,178
13,295
15,502
94,934
CASSAVA
712,228
2,484,093
340,978
2,115,062
492,787
2,204,381
-
1,429,906
-
BANANA
ROUND
POTATOES
SWEET
POTATO
60,758
967,304
73,115
1,172,615
175,394
1,870,631
410,040
1,854,649
67,820
71,281
607,195
32,315
322,094
9,014
709,690
57,424
-
311,432
1,125,672
113,801
546,923
274,164
1,114,663
85,218
767,775
122,017
BEANS
438,901
594,793
229,974
343,140
225,779
651,115
322,143
285,723
398,799
PIGEON PEAS
313,599
114,934
52,042
101,780
76,579
117,516
2,027
1,655
39,005
SUNFLOWER
127,496
137,114
3,083
123,319
110,196
213,499
6,458
13,995
178,928
GROUNDNUTS
178,863
194,962
59,358
134,176
193,760
200,320
136,995
142,745
121,950
274
416
20
13,363
-
198
4
7
106
SESAME
46,922
30,380
39,462
50,532
53,485
21,786
-
-
6,820
OIL PALM
BULLRUSH
MILLET
10,214
10,826
-
-
-
149
13,578
13,268
-
67,381
191,000
161,019
134,794
12,021
16,808
129,605
2,482
1,537
KARTUM
1,185
948
27,377
20,991
46,872
23,166
908
11,263
15,499
BARLEY
2,414
9,686
-
-
8,616
12,285
3,864
6,954
8,447
PEGION PEAS
50,511
66,939
42,209
44,118
44,463
47,780
30,977
30,862
26,953
GREEN GRAM
16,726
32,014
7,394
27,258
11,729
55,338
11,926
74,138
888
-
33,529
1,785
1,680
303
1,785
3,987
1,375
20,165
WHEAT
SOYBEAN
PEAS
MUNGO
BEANS
292
1,679
1,785
1,680
-
1,785
-
-
1,958
CHICK PEAS
3,001
1,974
144
-
-
-
-
-
866
COCONUT
3,370
10,518
847
2,050
95
374
-
-
-
5,251,191
11,820,908
2,730,109
10,116,687
4,677,821
14,569,444
1,684,163
6,696,089
4,203,806
TOTAL;
Source: Ministry of Agriculture, Food and Cooperatives
As elaborated in Table IX above, performance in the production of key products in which
KEL is involved or targeting both in grain and horticulture has been mixed. For example,
wheat production dropped from a high of 68,310 in 2007/8 to 15,502 in 2009/10 and rose to
94,000 in 2010/11. The drops in pigeon peas, potatoes, sunflower etc were considerable.
KEL market segments will consist of wholesale buyers, retailer buyers, institutional buyers
consisting of hospitals, refugee’s institutions, schools and other government bodies. Food
crops principally wheat and beans will likewise be used for local consumption in Tanzania
for which large deficit exists and other markets beyond East Africa. Besides, grains are
39
consumed on daily basis by majority of Tanzanians. Therefore, it is true to say the size of the
target market is almost 90% of Tanzanian. The industry has both small farmers and main
producer farmers. However, the major competition that KEL faces come from Grain
production in West Kilimanjaro. Despite of these industry players, still the demand for grain
products in Tanzania, given its food deficit and growing population is too big compared to
the current production.
7.5 Implementation Schedule
The implementation schedule for upgrading the grain production is supposed to start with
effect from the next production season, which normally starts January of each year. With the
available 3000 acres, the management of the company wishes to divide this land into four
different areas. The company has reserved 2000 acres for wheat production, 500 acres for
beans production, 500 acres for oil seed production, and 500 acres for improved seed
production/ multiplication.
Normally, the implementation schedule has series of activities that need to be performed to
ensure successful implementation of the project. In the case of grain production, the
implementation schedule will have a series of the following activities and time frame that
have been shown to the table below.
TABLE X: IMPLEMENTATION SCHEDULE GRAIN PRODUCTION
8.0
EXPANSION AND DEVELOPMENT OF COFFEE OPERATIONS
Currently, KEL operates 35 acres of productive coffee farm. Coffee had occupied more than
200 acres at the farms prior to the take over of the farms by KEL. But the coffee was
neglected and much of it disappeared. This was a substantial loss of income to the country as
a whole. Since coffee is a crop that can provide income - under the KEL integrated plan over a long period of time, the coffee operation will be expanded to 100 acres to allow the
necessary critical mass for its improvement and sustainable maintenance. This acreage will
also over time facilitate direct export rather than going through domestic auctions.
40
KEL is going to expand her current coffee production by growing modern coffee that yields
far better products. The company has reserved additional area of about 65 acres for this
expansion. An estimate of TZS 150,000,000 is expected to be deployed for the coffee
expansion project. The funds will be used to support current operations (working capital) as
well as procuring some necessary machines to be used for coffee production.
8.1 Coffee Industry in Tanzania
Coffee accounts for about 20% of Tanzania’s foreign exchange earnings and has been the
mainstay of the country’s agriculture-based economy. More than 400,000 farm families
(95%) and 110 estates (5%) derive their livelihoods from growing coffee with an estimated
2,000,000 additional people employed being directly or indirectly in the industry. Coffee
production is concentrated in few geographic areas of Tanzania; In the North (Kilimanjaro,
Arusha and Tarime); in the West (Kigoma and Kagera); and, in the South (Mbeya Iringa and
Ruvuma).
Coffee industry has been and continued to be the single most important and dominant cash
crop in major producing provinces, particularly, in the highlands region. The industry is made
up of about 280,000 smallholder household growers, 660 blocks ranging from 1 – 30
hectares. New education on how to improve both quality and quantity has always been the
concern and shall get special treatment as an alternative in developing of coffee products
8.2 Market for Coffee
The United States is the world’s largest importer of coffee from East African countries;
particularly, Tanzania. Companies like Kraft, Nestle, Procter & Gamble and Sara Lee are the
major roaster companies and account for purchases of about 50 percent of all the annual
production of coffee. Demand for coffee is price inelastic: When coffee prices rise, people do
not reduce their coffee consumption proportionally; when coffee prices fall, consumer
demand for coffee does not proportionally increase to any great extent.
The targeted goal of this coffee expansion is high quality coffee for direct export to Coffee
Houses in Europe, Japan, and North America and eventually to package the same partly for
the domestic market and principally for some targeted export markets. KEL expects to start
processing coffee within the framework of this project and supply in consumer packs to
markets in the above countries.
8.3 Marketing and Sales strategies
The sales strategy that will keep selling this product is through the process of converting
perspective customers into long-term customers by emphasizing high-quality products and
high levels of customer service. This strategy recognizes the fact that even though the
company may have the best product, without excellent customer services the organization
will not succeed.
8.4 Coffee trade statistics:
World coffee exports amounted to USD 7.98 million bags in September 2010, compared with
USD 7.08 million in September 2009. Exports in coffee year 2009/10 (Oct/09 to Sep/10)
have decreased by 3.8% to 93.8 million bags compared to 97.4 million bags in coffee year
2008/09. Exports of Arabica coffee in year 2009/10 total led 61.1 million bags compared to
62.4 million bags last year; whereas Robusta exports amounted to 32.6 million bags
compared to 35 million bags in 2008/09.
41
8.5 Coffee market report
During September 2010 coffee prices recorded further increases with the monthly average of
the price at 163.61 US cents per lb compared to 157.46 in August 2010. The significant
upward trend recorded since May 2010 is largely attributable to the firmness of Arabica
prices. The average price during coffee year 2009/10 is 134.41 US cents per lb, representing
an increase of 20.2% in relation to the average of 111.8 cents for the previous coffee year. It
is noteworthy that all the coffee produced by KEL is Arabica.
8.6 Implementation Schedule
The implementation of this specific project is scheduled to start early next year. As stated
above, already KEL produces coffee in her current area of about 35 acres. The objective of
this expansion is to expand the coffee acreage to 100 acres. Based on this assumptions the
projections shows that within five years in the life of the project i.e. by the year 2015, KEL
will reach its initial target or goal of producing high quality coffee in an area of 100 acres.
The table below shows the implementation scheduled for this coffee expansion:
TABLE XII: IMPLEMENTATION SCHEDULE – COFFEE PRODUCTION
The items to be purchased for the purpose of implementing the coffee expansion project are
given in Annexes.
42
9.0
MANAGEMENT PLAN AND ORGANIZATION STRUCTURE
Currently, KEL has two directors, Mr. Felix G.N.Mosha and Mrs. Anna. F. Mosha. These
two individuals play crucial role in making this company running. They are the brain behind
this company’s development. However, the company shall invite new board members from
both national and international background who can bring in new ideas and strategies about
the best ways to keep growing this company. KEL wants to grow up while maintaining her
diversity from all levels of the company. The main objective is to build global oriented
enterprise.
With this new expansion, the company is expected to improve its human resource capability
in order to meet the objective of this project. In this regards, the company is going to recruit
and fill key positions from the local market. The above structure below represents new
organization structure of KEL.
Upon the filling of the above proposed new positions, the project will be in a position to meet
its operational objectives. The company anticipates retaining current few employees in the
management level since they are experienced individuals in their respective fields. More
importantly, they are employees who had managed and operated the farms for many years
prior to its privatization. The job descriptions for each key position – are detailed in KEL’s
new management structure attached as Annex IV to this report.
10.0 SOCIAL AND ECONOMIC BENEFIT ASSOCIATED WITH THE PROJECT
Apart from job creation, export earning and taxes, there are possible social and economic
impact associated with KEL expansion. Possible gains include; food security and safety,
Human Health, building relationships through value chain, and environmental health. These
additional values cannot be easily quantified, it is clear that these additional impacts when
translated into economic terms would be quite substantial. They may very well equal or
exceed the financial impacts we can estimate from known sources of information Food
10.1 Food Security and Safety
KEL farm products contribute to food security by increasing the amount of food available to
Tanzanians both in the rural and in urban areas. But it also contributes to food security in the
region, which expects Tanzania with its abundant land to be the major exporter of ffod.
10.2 Nutritional and Human Health Needs
KEL expansion will produce farms products that have direct positive effect on nutritional
conditions in Tanzania which faces serious nutritional deficiencies. It would thus contribute
to better heath in Tanzania and better quality of life derives significantly from higher
nutritional standards and good human health.
10.3 Community based Infrastructure
Through KEL expansion, the near by community will benefit from development of
community based infrastructure system such as telecommunication, electricity, roads and
various socio-economic infrastructure such as Schools and Health Clinics. Building
Relationships within the local community will be further strengthened by the project bringing
up to 800 small holder farmers – particularly women into the value chain.
43
10.4 Environmental Sustainability
Perhaps one of the most clear-cut indicators of a healthy agricultural system is a healthy
environment. Diverse agricultural systems that utilize pasture-based livestock systems can
improve water quality, clean the air, reduce gases that cause climate change, and improve
wildlife habitat. KEL which borders a major forest reserve has a huge accumulated
experience in environmental sustainability.
11.0 THE STATE OF THE REGION IN WHICH PROJECT IS BASED
Kilimanjaro Region has fallen on very hard times. It fell from being second or the third
region in its contribution to Tanzania’s GDP, to its current position of 19th place. A range of
factors has contributed towards this development. The almost free fall of the region’s
economy was originally triggered by a collapse of coffee prices in the 70’s, 80s, and 90s
resulting in drastically reduced coffee production. To-date, coffee production in Kilimanjaro
hasn’t recovered to pre-historic levels. Historically, coffee had accounted for a large portion
(over 75%) of the region’s GDP. Other sectors of the regions economy, perhaps as a result
of the fallout from the collapse of coffee, failed to grow significantly, and at best, stagnated.
The region’s industrial manufacturing as a percent of its GDP declined from 6% in the early
‘90s to its current level of less than 3 %. At the same time, a region of otherwise high
population density fell into conditions where most of the productive sectors of its economy
were on a decline. Kilimanjaro has a density of around 160 people per sq. km making it third
from Mwanza and Dar es Salaam. In its highlands, the density rises to as high as 650 people
per sq. km, which is higher than some of the urban areas in Tanzania. It is estimated that
households made up of 4.4 people owns only 1.5 acres that clearly makes a predominantly
agriculture-based development through low value crops difficult in a population where 56%
of the households are directly involved in the sector.
Kilimanjaro region has continued to experience the highest migration compared to other
regions in the country. It is estimated that 125,000 people left the region as lifetime migrants
within a period of 10 years in late 90’s. On one hand, this migration reduces the pressure on
the high population density; but on the other, it takes away from the region the age group that
is physically most able to contribute to the region’s development and growth. In
consequence, its present population not only reflects the migration conditions of the region,
but also, the difficulties in reversing and alleviating the region’s poverty – especially through
low value crops. It is estimated that around 54% of the region’s population is made up of
children under the age of 14 and elderly people above the age of 65. Notwithstanding, the
region has a critical advantage of having a relatively well trained human resource base.
The evolving trend of poverty in Kilimanjaro region has also over the years been made worse
by an increasing number of female headed households that in early 2000 were estimated to be
around 26% of all households in the region. In this regard, a decisive contribution towards
poverty alleviation in Kilimanjaro region must first and foremost target the regions women
population, which is already, the poorest section of the society, but in addition heads over a
quarter of the regions’ approx. 400,000 households.
As a result of all the above factors, a region that had otherwise advanced is presently saddled
with an estimated 11% of its households categorized as being below the food poverty line i.e.
moving closely towards the national average of 19%; while 31% of its households (close to
the 36% of the national average) are categorized as poor.
44
12.0 RISKS AND UNCERTAINITIES ASSOCIATED WITH THE PROJECTS
The major risk that may affect the above projects performance include; adverse weather
conditions such as drought and floods, market problems for the planned products epidemic
affecting live stock; the competition; and inadequate working capital.
In terms of adverse weather conditions, KEL Rongai Farm was able to with stand the El Nino
with minimum Damage and is presently experiencing the worst drought in 20 years. To
manage the latter situation, and for the livestock particular, a huge water tank reservoir that
draws water directly from sources in mount Kilimanjaro has the capacity to supply an amount
great than the necessary water needs of the liver stock and the farm as a whole. Thus, a risk
of catastrophic drought to the livestock is not conceivable.
In term of crop development, mention must be about the fact that owing to the size of KEL
Rongai Farm, It has three different weather zones. Invariably, one of these zones would
usually retain favourable weather conditions. At any rate this project represents an empty to
move away from an entirely rain-fed agriculture to a more predictable, which is a production
arrangement through irrigation. A dam originally used in the farm, and an existing piping
infrastructure will be rehabilitated to irrigate at least 500 acres of crops. When combined with
water that moves on its own gravity at the farm, around 1000 acres of crops farm would be
irrigated along with rehabilitated irrigation system. In the worst-case scenario, water drillings
within the farm will be carried out to provide the necessary water resources.
Wheat, beans and horticulture are part of staple diet for the majority of Tanzanians. The
products do not therefore pose serious market problems when consideration is given to the
needs of domestic consumers, institutional buyers consisting of hospitals, refugees, schools
and other government institutions being a commodity consumed by the entire population
growth. Information available from the Ministry of Agriculture indicates that per capital
consumption of these commodities is growing along with continuing population growth and
the country has a deficit in many of them.
The factor associated with coffee largely involve declining prices-of historically cyclical
nature, the reality is that good premium quality of coffee shall be produced under the plan
will always find a market albeit, under cyclical conditions.
On competition, given the dominant position of KEL Rongai Farm as the second single
largest producer of milk in the country, the demand for milk is too high; therefore, no serious
damage from the competition is conceivable in the foreseeable future. The same applies to
other commodities, given the arrangement under which they will be produced.
13.0 CONCLUSION AND RECOMMENDATIONS
The analysis of these projects demonstrate that the projects are financially viable and
technically attainable, economically feasible and would provide a good opportunity for
Tanzanian Private Sector entrepreneur to participate meaningfully in this vital sector of the
country’s economy. These are projects that are designed to be useful contribution towards
45
poverty alleviation particularly to women in the Kilimanjaro region where the projects are
based.
The analysis further demonstrated the minimal risks that are involved in these projects
because of the mixed farming nature of KEL Farms. Consideration presented rule out
possibilities for catastrophic epidemics or ruinous weather conditions that will impair the
viability of these projects.
The projects have shown their inherent strength in terms of its economic benefits to the
communication within their locations; the region; and the country as a whole. In particular,
KEL’s farms operations will have the following impacts; good source of revenue for owners,
employment creation for the community; foreign exchange earnings estimate at USD3.0
million annually; and an enhanced level of food self-sufficiency for the Tanzanian people.
Furthermore, the management already in place to implement these projects has proven truck
records of managing these kinds of projects and will be significantly strengthened. These
projects present a unique opportunity in which the government policy emphasis on
agriculture by the private sector, particularly with respect to horticulture, grain, dairy and
coffee.
However agriculture industry faces a number of challenges among of which is the size of the
country (which put pressure on demand for development of infrastructure), as most of the
agricultural communities are found in remote areas around the edges of the country. Other
challenges facing agricultural development include differing land (topographic) and climatic
Conditions thus you need different approaches or farm practices. KEL has resource and
capability to meet the above mentioned challenges.
46
14.0 ANNEXTURES
ANNEX I: KEL – RONGAI FARM’S EXISTING ASSETS/FACILITIES
Existing buildings and civil works
One office block
Senior staff houses
Non-professional staff houses
Workshop
A milking parlor
Hay barn
Eight livestock paddocks and Twelve water troughs
Existing machinery, vehicles and equipment
Milk cooling facilities and equipment total 16,000 liter capacity
One milk truck tanker 9,000 liter-capacity
One heavy-duty tractor 180 HP
One heavy tractor 140 HP
Two heavy-duty discs ploughs 16 discs each
Multi-purpose modern seed planter
One DAF truck 16 ton each
One IVECO Oil Tanker 20,000 liter capacity
One Isuzu Trooper 4WD
One single cabin pick-up
Honda motorcycle
Two tractors 80 HP
One diesel generator 26 KVA
Lister engine
Hay baler
Disc mower
Hay rake
Disc plough
Water tank
Molasses tank
Air compressor
Hand drill
Drilling machine
Farm tools
Furniture and fittings
Proposed Additions in the Farm’s Development.
New pasture development
Modern communication and office facilities including computers
47
ANNEXE II: SCHEDULE OF MANAGEMENT POSITIONS
4.3 Accordingly, a more elaborate Organization Chart/structure for KEL under its expansion
plan would take teh following form.
48
ANNEX III: PROPOSED KEL ORGANOGRAM
Chairman and
Managing Director
Farm Manager
Corporation Secretary
Dairy Manager
Veterinary
Officer
Processing
Plant Officer
Horticultural
Manager
Parkhouse
Officer
Grain Manager
Quality
Control
Officer
Farm
Officer
Finance and
Administration
Manager
Coffee Manager
Support
Services
Officer
Farm - Coffee
Officer
Support
Services
Officer
Coffee
1
Accountant
Personnel
Officer
Marketing
Manager
Marketing
Officer
Transport and
Maintenance Manager
Procurement
Officer
Transport
Officer
Maintenance
Officer
ANNEX I
Job Descriptions
Farm Manager
The Farm Manager will be the overall head of the farm. He / she will be responsible for the
overall running of the business and strategic direction. He/she will coordinate and to pull out
the right human resource that can lead all farm activities that range from farm management /
operation, marketing, logistics etc. He will also be responsible to ensure the farm profitability
and development is obtained. The ideal candidate should have a BSc in Agriculture with not
less than 10 years experience in farm management. Other business qualifications such as an
MBA and experience in developing the farm will be an added advantage.
Finance & Administration Manager
Finance and Administration manager will be in charge of all accounting and administrative
functions. He/she will be responsible for financial planning and control, budgeting /
budgetary control, and supervision of the accounts department. The position holder should
have a business degree and an accounting qualification such as CPA (T). In addition, he/she
should possess sound financial and administrative experience of at least 5 years acquired in a
large commercial organization.
Horticulture Manager
Horticulture manager should be someone with abundant knowledge of horticulture
products(runner bees, fine beans, sugar snaps). The ideal candidate should have at least 5
years of progressive experience in managing these kinds of products. He must hold a
bachelor degree in Agriculture and must have interest in working in the farm
Grain Production Manager
Grain manager should be someone with substantial knowledge of grain products (wheat,
beans, oil seed and seed production). The ideal candidate should have at least 5 years of
progressive experience in managing these kinds of products. He must hold a bachelor degree
in Agriculture and must have interest in working in the farm
Dairy Operation Manager
The diary Manager directly supervises dairy and production development and has to be
involved with the daily operations, logistics, maintenance, safety and quality in the dairy. He
also has to meet regulatory agencies and follow the required standards. He must keep records
of production and sales and make sure that the dairy says profitable and He needs to meet
targets and achieve operating results. He or she must hold a degree in veterinary science with
at least ten years experience in the management of large livestock herd and large scale dairy
operations.
Coffee Production Manager
Coffee manager should be someone with substantial knowledge on coffee product. The ideal
candidate should have at least 5 years of progressive experience in managing coffee
production and management. He must hold a bachelor degree in Agriculture and must have
interest in working in the coffee plantations. Experience working with co-operative units like
KNCU will be an added advantage.
1
Marketing Manager
Marketing manager will be responsible for getting out to the market and sell KEL products.
He should be responsible to study the market trends to know the target market and how well
the company should cope with competition as well as any substitute products. The ideal
candidate must have at least 5 years of progressive marketing experience in agricultural
products across the value chain. He should hold a Business or Economics Degree i.e. B.Sc.
Economics or Bachelor of Business Adminstration.
Procurement Manager
The Procurement Manager’s role will be to ensure the purchase of farm inputs including
fertilizer, drugs, tools, equipment, and administrative consumables goods. He/she will be
responsible for ensuring the procurement of the best quality goods at competitive prices. The
position holder should possess a business degree, a qualification in procurement and supplies
management and at least 5 years experience in a similar function.
The Irrigation and Fertigation Officer
The Irrigation and Fertigation Officer will be responsible for determining the water and
fertilizer requirements for the farms operations and ensure that the specific areas of the farm
gets water in the required amounts at the right time. He/she will manager the irrigation and
fertigation control centre including the fertigation unit, laboratory and management
information system (MIS). The position holder should have a degree in Agricultural
Engineering with 5 years experience in irrigation and fertigation.
Disease and Pest Control Officer
The Disease and Pest Control Officer will be responsible for responding to infections from
pests and diseases and carry out control measures. The position holder will be in charge of
the spraying and determining the required chemicals for the entire farm area. The position
holder should have a degree in Agriculture with 5 years experience in pest and disease
control.
Accountant
The accountant will be charged with the responsibility of preparing the final accounts of
KEL, payments, and payroll management. He/she will report to the Finance &
Administration Manager and will supervise the activities of the Accounts Assistant. The ideal
position holder should be a University graduate, a CPA with at least 5 years experience as an
Accountant in a large enterprise..
Store Keeper
The storekeeper will be in charge of the store. He/she will keep record of items in the store
and requisition for replenishment of farm consumables depending on the stock levels. The
position holder should possess a diploma in stores management with at least 5 years
experience in stores management.
Administration Officer
The Administration Officer will report to the Finance and Administration Manager. His/Her
role will be to coordinate the HR functions in KEL including, recruitment, liaising and
negotiation with the Union, health and safety, payroll management, training, welfare and
custody of personal files. The Administration Officer will supervise the Security Supervisor,
2
Secretary and the Drivers. The position holder should possess a university degree, a
qualification in human resources management and at least 3 years experience in a similar
position.
Security Supervisor
The Security Supervisor will report to the Administration Officer. His role will be to
periodically review the security situation and coordinate the activities of the Security Guards.
The position holder should possess a minimum of High school education with training in
security operations gained from the Police and or reputable private security organization.
He/she should possess at least 5 years experience in a similar function.
Security Guards
The Security Guard will be responsible for the day-to-day security of company property and
personnel. The Security Guard will report to the Security Supervisor. The ideal person should
possess secondary school education with 2 years experience in a similar function. He/She
should have approved training in fire arms.
Mechanics and Tractor Operators/Maintenance
The technical personnel in this category will be responsible for operations and maintenance
of equipment and machinery. This category of personnel will each have complete VETA
training and have a VETA Certificate or hold a diploma in Mechanics and in every case with
at least 5 years experience in the relevant field.
Drivers
The driver will be responsible for the deliveries to local customers and dispatching the
consignments for export. The driver should possess driver’s license for light commercial
vehicles and trucks and at least 5 years experience.
3
15.0 FINANCIAL PROJECTIONS
Projected profit and loss
The projected profit and loss account of the KEL shows promising results. The project is
expected to generate a surplus income from the first year of projections (2011) and beyond.
(see Annex A). The retained surplus during the projection period is growing from a profit of
TZS 260 million in Year 0. The projected profit and loss account shows that KEL will be able
to generate high income that will cover its operating costs and additional capital investment
as proposed by the management.
Projected operating cash flow
The cash flows statement provides information about the project’s liquidity position and the
breakdown of the sources and uses of its funds. The projected liquidity statement indicates a
sound financial position for the proposed expansion of the farm (see Annex B). The analysis
shows that positive net cash flows from operation will be available during the production
periods.
The projected balance sheet indicates project’s strong financial position in both the short and
long terms. Annex C of this report shows the projected balance sheet for the projection
period of the business plan. Figure 6 below shows the trend of the net total assets for the
project from the current position (Year 0) to the end of projection horizon.
Figure 6: Trend in Net Worth (TZS million)
41,938
37,440
33,024
28,689
24,437
20,269
16,199
12,231
8,384
5,723
3,680
Year 0
Year 1
Year 2
Mgt accts
Year 3
Year 4
Year 5
Year 6
Projections (TZS 'mln)
Viability assessment
4
Year 7
Year 8
Year 9
Year 10
On the basis of the assumptions made on revenue generation, capital expenditure
requirements, and cash flows projections, the project is both financially feasible and
economically viable.
Financial results
The project shows positive prospects in terms of financial results (See Annex D). All the
profitability ratios show that the project will continue to be profitable throughout the life of
the projections in Year 10. A slowdown in ROE and ROA is attributable to large
denominator, equity and assets that the promoters have initially invested into the business.
Sensitivity analysis
The expansion projections only reflect the most likely cash flows based on the assumptions
made. However, the actual results are most likely to be different, from projections made
because of unexpected change of events.
The major component that drives KEL value in this business plan is revenue from sales of the
farm products. Three value drivers – selling price of products, cost of production and volume
of production are simulated in a worse case sensitivity and scenario analyses using 10% and
20% negative variation to establish impact on KEL performance with regards to profitability
and cash flow throughout the planning period. The following summarizes results and their
effects in performance of the first three years of projections (Year 1 – Year 10) (see chart 1).
Product prices
The prices of these products are reduced by 10% to see their impact on profitability and cash
flow. Reduction in price of coffee will have a marginal impact to the business. This will
result in sales revenue of TZS 26.3 billion, EBIT of TZS 18.1 billion and profit after tax
amounting to TZS 12.4 billion, a decrease in revenues of 6.5% from the base case scenario.
The biggest notable change will be when price of horticultural products falls, to bring down
total revenues to TZS 21.5 billion, EBIT of TZS 13.3 billion and profit after tax of TZS 9.1
billion, decrease in revenues of 23.5% from the base case scenario. The cash flows will only
be affected during the non-harvest periods but they will always be positive by each year end.
Cost of production
Increase by 10% in costs of production will not significantly affect the operating results of
the business. For instance increase in fuel prices by 10% p.a will result into EBIT of TZS
18.1 billion and profit after tax amounting to TZS 12.5 billion, a decrease in profitability by
8.8% from the base case scenario.
Volume of products
Reduction by 20% in volume of production for coffee will marginally affect the operating
results; bringing about sales revenue of TZS 26.3, EBIT of TZS 18.1 billion and profit after
5
tax of TZS 12.5 billion, a decrease of 8.9% against a base case scenario. The situation will
result into lowest figures when production of horticultural products decreases. That will result
into sales revenue of TZS 23.0 billion, EBIT of TZS 15.3 billion and profit after tax of TZS
10.5 billion, a decrease in revenues of 18.1% against a base case scenario.
6
Chart 1: Sensitivity analysis. Figures in TZS (bln)
28.1
26.4
26.4
26.3
26.0
26.3
26.2
26.0
24.7
23.0
21.5
19.7
18.1
18.1
17.7
17.4
18.1
18.0
17.8
16.5
15.3
13.7
13.6
12.5
10.2
13.3
12.0
9.7
12.2
10.0
12.4
11.3
9.2
10.2
9.1
12.3
10.0
12.5
12.4
10.2
10.5
10.2
8.4
7.3
Base case
Fuel cost increase Labor + other
Price of milk
Price of grains
Price of
Price of Coffee Milk production Grains production Horticulture Coffee production
by 10% p.a
direct costs decrease by 10% decrease by 10% horticultural decrease by 10% decrease by 20% decrease by 20% production
decrease by 20%
increase by 10%
p.a
p.a
products decrease
p.a
decrease by 20%
p.a
by 10% p.a
Sales revenues
EBIT
Profit/ (Loss) for the year
60
Net cash flows
Annex A: PROJECTED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEARS ENDED
Figures in TZS '000
Gross Sales Revenues
Diary operations
Grains production
Horticulture
Coffee production
Year 0
Interest on loans
EBT
Tax expense
Net Profit/(Loss) After Tax
Net Profit/(Loss) b/f
Accumulated Profit/(Loss)
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
4,792,290
328,500
1,878,000
2,552,040
33,750
5,832,974
394,200
1,878,000
3,470,774
90,000
7,771,935
459,900
1,878,000
5,310,285
123,750
7,966,341
525,600
1,878,000
5,416,491
146,250
8,140,370
591,300
1,878,000
5,524,820
146,250
8,316,567
657,000
1,878,000
5,635,317
146,250
8,429,273
657,000
1,878,000
5,748,023
146,250
8,544,234
657,000
1,878,000
5,862,984
146,250
8,661,493
657,000
1,878,000
5,980,243
146,250
8,781,098
657,000
1,878,000
6,099,848
146,250
1
2-5
6
7
254,237
159,600
90,174
4,463
1,510,690
199,500
792,985
499,830
18,375
1,652,388
239,400
792,985
610,440
9,563
1,915,420
279,300
792,985
831,660
11,475
1,956,595
319,200
792,985
831,660
12,750
1,996,495
359,100
792,985
831,660
12,750
2,036,395
399,000
792,985
831,660
12,750
2,036,395
399,000
792,985
831,660
12,750
2,036,395
399,000
792,985
831,660
12,750
2,036,395
399,000
792,985
831,660
12,750
2,036,395
399,000
792,985
831,660
12,750
487,244
3,281,600
4,180,587
5,856,515
6,009,746
6,143,875
6,280,172
6,392,878
6,507,839
6,625,098
6,744,703
38,500
30,960
540
7,000
129,908
108,120
4,988
16,800
160,909
139,087
5,022
16,800
162,637
140,782
5,055
16,800
164,400
142,510
5,090
16,800
166,198
144,273
5,125
16,800
168,032
146,071
5,161
16,800
169,903
147,906
5,198
16,800
171,811
149,777
5,235
16,800
173,758
151,685
5,273
16,800
175,743
153,631
5,312
16,800
448,743
3,151,692
4,019,678
5,693,878
5,845,345
5,977,677
6,112,139
6,222,975
6,336,027
6,451,340
6,568,960
78,000
136,542
137,842
139,142
140,442
141,742
143,042
143,042
143,042
143,042
143,042
370,743
3,015,150
3,881,837
5,554,736
5,704,904
5,835,935
5,969,098
6,079,933
6,192,985
6,308,299
6,425,918
95,766
80,438
58,706
36,616
22,144
14,042
5,524
62
370,743
2,919,384
3,801,398
5,496,031
5,668,288
5,813,791
5,955,056
6,074,409
6,192,923
6,308,299
6,425,918
111,223
875,815
1,140,419
1,648,809
1,700,486
1,744,137
1,786,517
1,822,323
1,857,877
1,892,490
1,927,775
259,520
2,043,569
2,660,979
3,847,221
3,967,802
4,069,654
4,168,539
4,252,086
4,335,046
4,415,809
4,498,143
60,000
319,520
2,363,089
5,024,068
8,871,289
12,839,091
16,908,745
21,077,284
25,329,370
29,664,416
34,080,225
319,520
2,363,089
5,024,068
8,871,289
12,839,091
16,908,745
21,077,284
25,329,370
29,664,416
34,080,225
38,578,368
Less: Fixed costs
Salaries and wages
Repairs and maintanance
Farm overheads
Other costs
EBIT
Year 3
741,480
157,680
583,800
-
Contribution Margins
Depreciation
Year 2
Appendix
Ref.
1
2-5
6
7
Less: Variable costs
Diary operations
Grains production
Horticulture
Coffee production
EBITDA
Year 1
1-7
1-7
1-7
-
61
-
-
Annex B: PROJECTED CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER
Figures in TZS '000
ASSETS
Non Current Assets
Property , Plant and Equipment
Other assets
sub total
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
6,954,833
46,800
7,001,633
7,143,386
53,300
7,196,686
7,680,639
58,500
7,739,139
7,541,497
62,400
7,603,897
7,641,056
65,000
7,706,056
7,499,314
71,500
7,570,814
7,356,273
78,000
7,434,273
7,513,231
72,800
7,586,031
7,370,190
68,900
7,439,090
7,377,148
66,300
7,443,448
7,234,106
65,000
7,299,106
56,619
160,881
347,563
565,063
58,317
910,535
2,227,038
3,195,890
60,067
1,108,265
3,830,472
4,998,804
61,869
1,476,668
7,118,842
8,657,379
63,725
1,513,605
10,613,171
12,190,501
65,637
1,546,670
14,631,218
16,243,525
67,606
1,580,148
18,740,878
20,388,632
69,634
1,601,562
22,637,573
24,308,769
71,723
1,623,404
27,076,749
28,771,876
73,875
1,645,684
31,461,168
33,180,727
76,091
1,668,409
36,077,411
37,821,911
TOTAL ASSETS
7,566,695
10,392,576
12,737,943
16,261,276
19,896,556
23,814,339
27,822,905
31,894,800
36,210,965
40,624,175
45,121,017
EQUITY AND LIABILITIES
Equity
Share Capital
Retained earnings
Revaluation reserve
sub total
360,000
319,520
3,000,000
3,679,520
360,000
2,363,089
3,000,000
5,723,089
360,000
5,024,068
3,000,000
8,384,068
360,000
8,871,289
3,000,000
12,231,289
360,000
12,839,091
3,000,000
16,199,091
360,000
16,908,745
3,000,000
20,268,745
360,000
21,077,284
3,000,000
24,437,284
360,000
25,329,370
3,000,000
28,689,370
360,000
29,664,416
3,000,000
33,024,416
360,000
34,080,225
3,000,000
37,440,225
360,000
38,578,368
3,000,000
41,938,368
Non Current Liabilities
New Loan facility
Existing Accounts payable
Advance towards share capital
737,833
3,146,800
945,163
553,374
3,153,300
808,810
368,916
3,158,500
665,480
184,458
3,162,400
514,817
0
3,165,000
356,445
0
3,171,500
189,971
0
3,178,000
14,981
0
3,172,800
0
0
3,168,900
0
0
3,166,300
0
0
3,165,000
Current Liabilities
Payables and accruals
sub total
2,542
3,887,175
17,649
4,669,487
17,649
4,353,875
17,649
4,029,987
17,649
3,697,466
17,649
3,545,595
17,649
3,385,621
17,649
3,205,430
17,649
3,186,549
17,649
3,183,949
17,649
3,182,649
EQUITY AND LIABILITIES
7,566,695
10,392,576
12,737,943
16,261,276
19,896,556
23,814,339
27,822,905
31,894,800
36,210,965
40,624,175
45,121,017
Current Assets
Inventory
Trade debtors
Cash and Cash Equivalents
sub total
62
Annex C: PROJECTED CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARS ENDED
Figures in TZS '000
CASHFLOW FROM OPERATIONS
Cash from Operations:
Cash Sales Revenues
Collections from Accts Receivable
Sales of Long-term Assets
Subtotal Cash Received
Operating Expenditures:
Payments
Loan interest payments
Tax payments
Subtotal Cash payment
NET CASH FLOW FROM OPERATIONS
CASH FLOW FROM INVESTMENTS:
Purchase of Capital items
Other capital expenditures
NET CASH FLOW FROM INVESTMENTS:
CASH FLOW FROM FINANCING
Loan from financiers
Loan repayment
Owners Capital Investment
Dividend
CASH FLOW FROM FINANCING
NET CASHFLOW FOR THE PERIOD
CASHFLOW BEGINING OF THE YEAR
NET CASHFLOW END OF THE YEAR
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
741,480
741,480
3,881,755
160,881
4,042,636
4,724,709
1,108,265
5,832,974
6,295,267
1,476,668
7,771,935
6,452,736
1,513,605
7,966,341
6,593,700
1,546,670
8,140,370
6,736,419
1,580,148
8,316,567
6,827,711
1,601,562
8,429,273
6,920,829
1,623,404
8,544,234
7,015,810
1,645,684
8,661,493
7,112,689
1,668,409
8,781,098
(290,194)
(111,223)
(401,417)
340,063
(1,627,190)
(95,766)
(875,815)
(2,598,771)
1,443,865
(2,012,776)
(80,438)
(1,140,419)
(3,233,634)
2,599,341
(2,448,262)
(58,706)
(1,648,809)
(4,155,776)
3,616,158
(2,159,788)
(36,616)
(1,700,486)
(3,896,890)
4,069,450
(2,197,671)
(22,144)
(1,744,137)
(3,963,952)
4,176,418
(2,239,874)
(14,042)
(1,786,517)
(4,040,432)
4,276,134
(2,229,741)
(5,524)
(1,822,323)
(4,057,588)
4,371,685
(2,232,138)
(62)
(1,857,877)
(4,090,077)
4,454,156
(2,234,584)
(1,892,490)
(4,127,074)
4,534,420
(2,237,079)
(1,927,775)
(4,164,855)
4,616,243
-
(325,095)
(675,095)
-
(240,000)
-
-
(300,000)
-
(150,000)
-
-
(325,095)
(675,095)
-
(240,000)
-
-
(300,000)
-
(150,000)
-
-
1,000,000
(239,295)
760,705
(320,812)
(320,812)
(174,991)
(174,991)
(14,981)
(14,981)
340,063
7,500
347,563
1,879,475
347,563
2,227,038
1,603,434
2,227,038
3,830,472
(327,788)
(327,788)
3,288,370
3,830,472
7,118,842
(335,121)
(335,121)
3,494,329
7,118,842
10,613,171
63
(158,371)
(158,371)
4,018,047
10,613,171
14,631,218
(166,474)
(166,474)
4,109,661
14,631,218
18,740,878
3,896,694
18,740,878
22,637,573
4,439,176
22,637,573
27,076,749
4,384,420
27,076,749
31,461,168
4,616,243
31,461,168
36,077,411
Annex D: RATIOS
RATIOS
Gross profit Margin
EBITDA Margin
Net Profit Margin
Total Assets Turnover
Return on Assets
Return on Equity
Current Ratio
Quick Ratio
Gearing
Debt to Equity
Year 0
65.7%
60.5%
35.0%
0.1
222.3
200.0
0.2
Year 1
68.5%
65.8%
42.6%
0.5
5.7%
10.9%
181.1
177.8
0
0.3
Year 2
71.7%
68.9%
45.6%
0.5
5.8%
9.4%
283.2
279.8
0
0.1
Year 3
75.4%
73.3%
49.5%
0.5
6.6%
9.3%
490.5
487.0
0
0.1
Year 4
75.4%
73.4%
49.8%
0.4
5.5%
7.0%
690.7
687.1
0
0.0
64
Year 5
75.5%
73.4%
50.0%
0.3
4.7%
5.6%
920.4
916.6
0
0.0
Year 6
75.5%
73.5%
50.1%
0.3
4.0%
4.7%
1155.2
1151.4
0
0.0
Year 7
75.8%
73.8%
50.4%
0.3
3.6%
4.0%
1377.3
1373.4
0
0.0
Year 8
76.2%
74.2%
50.7%
0.2
3.2%
3.5%
1630.2
1626.1
0
0.0
Year 9
76.5%
74.5%
51.0%
0.2
2.9%
3.1%
1880.0
1875.8
0
0.0
Year 10
76.8%
74.8%
51.2%
0.2
2.6%
2.8%
2143.0
2138.7
0
0.0
Appendix 1: DAIRY PROJECT
Summary of Income and Expenditure
for the years ended
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Figures in TZS
Total number of cattle held p.a
No. of working days per year
No. of milking Cattles at farm
Milk production(ltrs/Cattle)
Milk Production(ltrs/day)
Annual milk production (litres)
Annual milk sales (litres)
Milk Price/litre
Sales Revenue
VARIABLE COSTS
Cattle purchase
Dairy inputs
Animal feed
Vertenary
Vitamins & Minerals
Direct Labour
Parking materials. 1/2 Lt Packets
TOTAL VARIABLE COSTS
400
365
120
10
1,200
438,000
394,200
400
157,680,000
-
500
365
250
10
2,500
912,500
821,250
400
328,500,000
-
600
365
300
10
3,000
1,095,000
985,500
400
394,200,000
-
700
365
350
10
3,500
1,277,500
1,149,750
400
459,900,000
800
365
400
10
4,000
1,460,000
1,314,000
400
525,600,000
-
-
900
365
450
10
4,500
1,642,500
1,478,250
400
591,300,000
-
1,000
365
500
10
5,000
1,825,000
1,642,500
400
657,000,000
-
1,000
365
500
10
5,000
1,825,000
1,642,500
400
657,000,000
-
1,000
365
500
10
5,000
1,825,000
1,642,500
400
657,000,000
-
1,000
365
500
10
5,000
1,825,000
1,642,500
400
657,000,000
-
1,000
365
500
10
5,000
1,825,000
1,642,500
400
657,000,000
-
73,000,000
24,000,000
48,000,000
14,600,000
91,250,000
30,000,000
60,000,000
18,250,000
109,500,000
36,000,000
72,000,000
21,900,000
127,750,000
42,000,000
84,000,000
25,550,000
146,000,000
48,000,000
96,000,000
29,200,000
164,250,000
54,000,000
108,000,000
32,850,000
182,500,000
60,000,000
120,000,000
36,500,000
182,500,000
60,000,000
120,000,000
36,500,000
182,500,000
60,000,000
120,000,000
36,500,000
182,500,000
60,000,000
120,000,000
36,500,000
182,500,000
60,000,000
120,000,000
36,500,000
159,600,000
199,500,000
239,400,000
279,300,000
319,200,000
359,100,000
399,000,000
399,000,000
399,000,000
399,000,000
399,000,000
12,960,000
315,237
7,000,000
54,360,000
1,260,948
16,800,000
54,360,000
1,260,948
16,800,000
54,360,000
1,260,948
16,800,000
54,360,000
1,260,948
16,800,000
54,360,000
1,260,948
16,800,000
54,360,000
1,260,948
16,800,000
54,360,000
1,260,948
16,800,000
54,360,000
1,260,948
16,800,000
54,360,000
1,260,948
16,800,000
54,360,000
1,260,948
16,800,000
20,275,237
72,420,948
72,420,948
72,420,948
72,420,948
72,420,948
72,420,948
72,420,948
72,420,948
72,420,948
72,420,948
TOTAL ANNUAL PRODUCTION COSTS
179,875,237
271,920,948
311,820,948
351,720,948
391,620,948
431,520,948
471,420,948
471,420,948
471,420,948
471,420,948
471,420,948
Net Profit/(Loss)
(22,195,237)
56,579,052
82,379,052
108,179,052
133,979,052
159,779,052
185,579,052
185,579,052
185,579,052
185,579,052
185,579,052
FIXED COSTS
Salaries and wages
Farm machinery operation & maintanance
Farm overheads
Other
TOTAL FIXED COSTS
65
Appendix 1A
Diary Operations Assumptions - Current situation
Years
Number of cattle held p.a
Year 0
400
Year 1
400
Year 2
400
Year 3
400
Year 4
400
Year 5
400
Year 6
400
Year 7
400
Year 8
400
Year 9
400
Year 10
400
Dairy inputs
Animal feeds
Cattles/bag/day
Cost/bag
days/year
Total cost
10
10
10
10
10
10
10
10
10
10
10
73,000,000
73,000,000
73,000,000
73,000,000
73,000,000
73,000,000
73,000,000
73,000,000
73,000,000
73,000,000
73,000,000
Vertenary
Cost Per Cattle per month
Total cost per month
Total cost per year
15,000
2,000,000
24,000,000
15,000
2,000,000
24,000,000
15,000
2,000,000
24,000,000
15,000
2,000,000
24,000,000
15,000
2,000,000
24,000,000
15,000
2,000,000
24,000,000
15,000
2,000,000
24,000,000
15,000
2,000,000
24,000,000
15,000
2,000,000
24,000,000
15,000
2,000,000
24,000,000
15,000
2,000,000
24,000,000
Minerals
Cost per Cattle per month
Total cost per month
Total cost per year
20,000
4,000,000
48,000,000
20,000
4,000,000
48,000,000
20,000
4,000,000
48,000,000
20,000
4,000,000
48,000,000
20,000
4,000,000
48,000,000
20,000
4,000,000
48,000,000
20,000
4,000,000
48,000,000
20,000
4,000,000
48,000,000
20,000
4,000,000
48,000,000
20,000
4,000,000
48,000,000
20,000
4,000,000
48,000,000
Direct Labour
Cattles/person
Pay rate per day
Days per year
Total cost
Position
Diary Manager
Accountant
Store Manager
Dairy maintanance Personell
Other
Security
Cleaners
Drivers
Total payroll cost
Other costs
Electricity
Water
Total
Revenue
Milk
% of milking Cattles
Litres of milk produced/Cattle/day
Days per year
Gross litres of milk produced/year
Extraction (% of gross milk produced)
Net litres of milk produced/year
Price of milk per litre
20
2,000
14,600,000
Months
20
2,000
14,600,000
20
2,000
20
2,000
20
2,000
20
2,000
20
2,000
20
2,000
20
2,000
20
2,000
20
2,000
14,600,000
14,600,000
14,600,000
14,600,000
14,600,000
14,600,000
14,600,000
14,600,000
14,600,000
12
12
12
12
Total
6,000,000
2,400,000
-
12
12
12
12,960,000
3,600,000
960,000
12,960,000
12,960,000
12,960,000
12,960,000
12,960,000
12,960,000
12,960,000
12,960,000
12,960,000
12,960,000
6,000,000
2,400,000
8,400,000
8,400,000
8,400,000
8,400,000
8,400,000
8,400,000
8,400,000
8,400,000
8,400,000
8,400,000
120
1,200
200
2,000
200
2,000
200
2,000
200
2,000
200
2,000
200
2,000
200
2,000
200
2,000
200
2,000
200
2,000
438,000
730,000
730,000
730,000
730,000
730,000
730,000
730,000
730,000
730,000
730,000
394,200
400
157,680,000
657,000
400
262,800,000
657,000
400
262,800,000
657,000
400
262,800,000
657,000
400
262,800,000
657,000
400
262,800,000
657,000
400
262,800,000
657,000
400
262,800,000
657,000
400
262,800,000
657,000
400
262,800,000
657,000
400
262,800,000
12
12
7,000,000
66
Appendix 1B
Diary Operations Assumptions - Expansion
Years
Number of cattle held p.a (Cumulative)
Additions==> births
Dairy inputs
Animal feeds - bags/day
Cattles/bag/day
Cost/bag
days/year
Total cost
Year 0
0
Year 1
100
100
Year 2
200
100
Year 3
300
100
Year 4
400
100
Year 5
500
100
Year 6
600
100
Year 7
600
-
Year 8
600
-
Year 9
600
-
Year 10
600
-
3
5
8
10
13
15
15
15
15
15
18,250,000
36,500,000
54,750,000
73,000,000
91,250,000
109,500,000
109,500,000
109,500,000
109,500,000
109,500,000
Vertenary
Cost Per Cattle per month
Total cost per month
Total cost per year
15,000
-
15,000
500,000
6,000,000
15,000
1,000,000
12,000,000
15,000
1,500,000
18,000,000
15,000
2,000,000
24,000,000
15,000
2,500,000
30,000,000
15,000
3,000,000
36,000,000
15,000
3,000,000
36,000,000
15,000
3,000,000
36,000,000
15,000
3,000,000
36,000,000
15,000
3,000,000
36,000,000
Minerals
Cost per Cattle per month
Total cost per month
Total cost per year
20,000
-
20,000
1,000,000
12,000,000
20,000
2,000,000
24,000,000
20,000
3,000,000
36,000,000
20,000
4,000,000
48,000,000
20,000
5,000,000
60,000,000
20,000
6,000,000
72,000,000
20,000
6,000,000
72,000,000
20,000
6,000,000
72,000,000
20,000
6,000,000
72,000,000
20,000
6,000,000
72,000,000
Direct Labour
Cattles/person
Pay rate per day
Days per year
Total cost
Revenue
Milk
% of milking Cattles
Litres of milk produced/Cattle/day
Days per year
Gross litres of milk produced/year
Extraction (% of gross milk produced)
Net litres of milk produced/year
Price of milk per litre
0
2,000
5
2,000
10
2,000
15
2,000
20
2,000
25
2,000
30
2,000
30
2,000
30
2,000
30
2,000
30
2,000
-
3,650,000
7,300,000
10,950,000
14,600,000
18,250,000
21,900,000
21,900,000
21,900,000
21,900,000
21,900,000
-
50
500
100
1,000
150
1,500
200
2,000
250
2,500
300
3,000
300
3,000
300
3,000
300
3,000
300
3,000
-
182,500
365,000
547,500
730,000
912,500
1,095,000
1,095,000
1,095,000
1,095,000
1,095,000
164,250
400
65,700,000
328,500
400
131,400,000
492,750
400
197,100,000
657,000
400
262,800,000
821,250
400
328,500,000
985,500
400
394,200,000
985,500
400
394,200,000
985,500
400
394,200,000
985,500
400
394,200,000
985,500
400
394,200,000
400
-
67
Appendix 1C
Capital Expenditure
DIARY OPERATIONS
Expansion
Milk Processing plant
Reception/cooking and storage tank
Micro-diary module
4buffer tanks 500L each
Cooling equipment module, alfa glas, 1900, 2Nos
Cold storage 18m3, 1No
1 Laboratory equipment
2 tetra classic junior, 800, 1/2 litre packs . H2
Mild steel installation material
Electrical installation material
Yoghurt Module machine
Transport Sweeden-Dar port
Technical Assistant 4 weeks
Total price// cost CIF Dar port
Add. Contingencies 5%
Custom duty 10%
Insurance Inland 1.5%
Transport Dar-Kilimanjaro 1.5%
Qty
Price (USD)
30,000
1,000
2,000
3,000
4,000
4,800
5,440
4,000
1,000
2,000
4,500
5,500
4,000
71,240
3,562
7,124
1,069
1,069
Exc rate
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
TZS
45,000,000
1,500,000
3,000,000
4,500,000
6,000,000
7,200,000
8,160,000
6,000,000
1,500,000
3,000,000
6,750,000
8,250,000
6,000,000
106,860,000
5,343,000
10,686,000
1,602,900
1,602,900
Total Mini Dairy, Plant machinery and Equipment
126,094,800
Construction of livestock sheds for zero grazing
85,000,000
<= 4 intergrated feedlot sheds for 300 cattles each looking at each other, and 1 feedlot fitted with a milking parlour in btwn
Total Expenditure (Expansion)
211,094,800
Current
Existing farmhouse
150,000,000
68
Appendix 2: BEANS PRODUCTION
Summary of Income and Expenditure
for the years ended
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
0
300
300
300
300
300
300
300
300
300
300
Figures in TZS
Farm capacity (acres)
Activity
Means
Ploughing
by tractor
Harrowing
by tractor
Seeds
Planting
by planter
Fertilizers
Spraying
by tractor
Weeding
by hand
Fungicides/Insecticides
Gunny bags
Harvesting
by hand
Transportation from field by tractor
Bagging/Loading
by hand
Other costs
-
12,000,000
6,000,000
18,000,000
4,800,000
720,000
7,200,000
7,200,000
16,200,000
3,600,000
18,000,000
360,000
900,000
12,000,000
6,000,000
18,000,000
4,800,000
720,000
7,200,000
7,200,000
16,200,000
3,600,000
18,000,000
360,000
900,000
12,000,000
6,000,000
18,000,000
4,800,000
720,000
7,200,000
7,200,000
16,200,000
3,600,000
18,000,000
360,000
900,000
12,000,000
6,000,000
18,000,000
4,800,000
720,000
7,200,000
7,200,000
16,200,000
3,600,000
18,000,000
360,000
900,000
12,000,000
6,000,000
18,000,000
4,800,000
720,000
7,200,000
7,200,000
16,200,000
3,600,000
18,000,000
360,000
900,000
12,000,000
6,000,000
18,000,000
4,800,000
720,000
7,200,000
7,200,000
16,200,000
3,600,000
18,000,000
360,000
900,000
12,000,000
6,000,000
18,000,000
4,800,000
720,000
7,200,000
7,200,000
16,200,000
3,600,000
18,000,000
360,000
900,000
12,000,000
6,000,000
18,000,000
4,800,000
720,000
7,200,000
7,200,000
16,200,000
3,600,000
18,000,000
360,000
900,000
12,000,000
6,000,000
18,000,000
4,800,000
720,000
7,200,000
7,200,000
16,200,000
3,600,000
18,000,000
360,000
900,000
12,000,000
6,000,000
18,000,000
4,800,000
720,000
7,200,000
7,200,000
16,200,000
3,600,000
18,000,000
360,000
900,000
-
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
-
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
Sales Revenue
-
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
Net Profit/(Loss)
-
119,921,250
119,921,250
119,921,250
119,921,250
119,921,250
119,921,250
119,921,250
119,921,250
119,921,250
119,921,250
Total Production costs
Other costs (fixed)
69
Appendix 2A
Beans Production Assumptions
Years
Number of acres
Ploughing (by tractor)
Fuel consumption per acre
Ploughing per year
fuel price per litre
litres
times
TZS
Sub-total
Harrowing (by tractor)
Fuel consumption per acre
Harrowing per year
fuel price per litre
litres
times
TZS
Kgs
times
TZS
litres
times
TZS
bags
times
TZS
litres
times
TZS
no.
times
TZS
Year 7
300
Year 8
300
Year 9
300
Year 10
300
10
2
2,000
10
2
2,000
10
2
2,000
10
2
2,000
10
2
2,000
10
2
2,000
10
2
2,000
10
2
2,000
10
2
2,000
10
2
2,000
10
2
2,000
12,000,000
12,000,000
12,000,000
12,000,000
12,000,000
12,000,000
12,000,000
12,000,000
12,000,000
12,000,000
5
2
2,000
5
2
2,000
5
2
2,000
5
2
2,000
5
2
2,000
5
2
2,000
5
2
2,000
5
2
2,000
5
2
2,000
5
2
2,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
30
2
1,000
30
2
1,000
30
2
1,000
30
2
1,000
30
2
1,000
30
2
1,000
30
2
1,000
30
2
1,000
30
2
1,000
30
2
1,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
4
2
2,000
4
2
2,000
4
2
2,000
4
2
2,000
4
2
2,000
4
2
2,000
4
2
2,000
4
2
2,000
4
2
2,000
4
2
2,000
4,800,000
4,800,000
4,800,000
4,800,000
4,800,000
4,800,000
4,800,000
4,800,000
4,800,000
4,800,000
0.8
1
3,000
0.8
1
3,000
0.8
1
3,000
0.8
1
3,000
0.8
1
3,000
0.8
1
3,000
0.8
1
3,000
0.8
1
3,000
0.8
1
3,000
0.8
1
3,000
720,000
720,000
720,000
720,000
720,000
720,000
720,000
720,000
720,000
720,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
6
2
2,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
7,200,000
1.5
2
18,000
1.5
2
18,000
1.5
2
18,000
1.5
2
18,000
1.5
2
18,000
1.5
2
18,000
1.5
2
18,000
1.5
2
18,000
1.5
2
18,000
1.5
2
18,000
16,200,000
16,200,000
16,200,000
16,200,000
16,200,000
16,200,000
16,200,000
16,200,000
16,200,000
16,200,000
6
2
1,000
6
2
1,000
6
2
1,000
6
2
1,000
6
2
1,000
6
2
1,000
6
2
1,000
6
2
1,000
6
2
1,000
6
2
1,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
5
2
2,000
30
2
1,000
4
2
2,000
0.8
1
3,000
6
2
2,000
6
2
2,000
-
Fungicides/Insecticides (Roud+Rarate+Folicur)
Insecticides per acre
litres
Insecticides need per year
times
Price per litre
TZS
Sub-total
Sub-total
Year 6
300
-
Sub-total
Gunny bags/Packing material
Bags needed per acre
Harvesting per year
Price per bag
Year 5
300
-
Sub-total
Weeding (Hand weeding)
People needed per acre
Weeding per year
Pay per person per day
Year 4
300
-
Sub-total
Spraying (foliar)
Fuel consumption per acre
Spraying per year
fuel price per litre
Year 3
300
-
Sub-total
Fertilizers (foliar)
Bags needed per acre
Fertilizing per year
Price per bag
Year 2
300
-
Sub-total
Planting (by planter)
Fuel consumption per acre
Planting per year
fuel price per litre
Year 1
300
-
Sub-total
Seeds
Seeds needed per acre
frequency per year
Price per kg
Year 0
0
1.5
2
18,000
-
bags
times
TZS
6
2
1,000
-
70
Appendix 2A Continued
Harvesting (by hand)
Number of bags
Harvesting per year
Pay per bag
bags
times
TZS
Sub-total
Transportation (from field) by tractor
Bags produced p.a
Tractor carrying capacity
Trips to be made
Fuel consumption per trip
fuel price per litre
6
2
5,000
6
2
5,000
6
2
5,000
6
2
5,000
6
2
5,000
6
2
5,000
6
2
5,000
6
2
5,000
6
2
5,000
6
2
5,000
6
2
5,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
18,000,000
5
2,000
1,800
50
36
5
2,000
1,800
50
36
5
2,000
1,800
50
36
5
2,000
1,800
50
36
5
2,000
1,800
50
36
5
2,000
1,800
50
36
5
2,000
1,800
50
36
5
2,000
1,800
50
36
5
2,000
1,800
50
36
5
2,000
1,800
50
36
5
2,000
0
360,000
360,000
360,000
360,000
360,000
360,000
360,000
360,000
360,000
360,000
500
1,800
500
1,800
500
1,800
500
1,800
500
1,800
500
1,800
500
1,800
500
1,800
500
1,800
500
1,800
500
-
bags
bags
trips
litres
TZS
50
-
Sub-total
Bagging/Loading (by hand)
Bags produced p.a
Price per bag
bags
TZS
Sub-total
-
900,000
900,000
900,000
900,000
900,000
900,000
900,000
900,000
900,000
900,000
Total cost
-
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
94,980,000
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
Fixed Costs
Salaries and wages
Repair and maintanance
Other overheads
Sub-total
-
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
1,098,750
Total costs
-
96,078,750
96,078,750
96,078,750
96,078,750
96,078,750
96,078,750
96,078,750
96,078,750
96,078,750
96,078,750
6
3,600
60,000
6
3,600
60,000
6
3,600
60,000
6
3,600
60,000
6
3,600
60,000
6
3,600
60,000
6
3,600
60,000
6
3,600
60,000
6
3,600
60,000
6
3,600
60,000
REVENUE
Number of bags per acre
Annual production
Price/bag (100kg bag)
bags
bags
TZS
6
60,000
Gross sales revenue
-
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
216,000,000
Net Sales
-
121,020,000
121,020,000
121,020,000
121,020,000
121,020,000
121,020,000
121,020,000
121,020,000
121,020,000
121,020,000
71
Appendix 2B
Capital Expenditure
Beans Production
Zero till hydraulic planter
Combine harvester
Tractor (300Hp)
Grain storage
Qty
1
1
1
1
Price (USD) Exc rate
60000
1500
45000
1500
23500
1500
18000
1500
Total
TZS
90,000,000 <= source www.agweb.com
67,500,000 <= source farmingmachines.co.uk
35,250,000
27,000,000
219,750,000
72
Appendix 3: OIL SEED PRODUCTION
Summary of Income and Expenditure
for the years ended
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
0
250
250
250
250
250
250
250
250
250
250
Figures in TZS
Farm capacity (acres)
Activity
Means
Ploughing
by tractor
Harrowing
by tractor
Seeds
Planting
by planter
Fertilizers
Spraying
by tractor
Weeding
by hand
Fungicides/Insecticides
Gunny bags
Harvesting
by hand
Transportation from field by tractor
Bagging/Loading
by hand
Other costs
Total Production costs
Other costs (fixed)
-
10,000,000
2,500,000
1,500,000
2,000,000
10,000,000
4,000,000
4,000,000
2,925,000
750,000
4,500,000
300,000
750,000
10,000,000
2,500,000
1,500,000
2,000,000
10,000,000
4,000,000
4,000,000
2,925,000
750,000
4,500,000
300,000
750,000
10,000,000
2,500,000
1,500,000
2,000,000
10,000,000
4,000,000
4,000,000
2,925,000
750,000
4,500,000
300,000
750,000
10,000,000
2,500,000
1,500,000
2,000,000
10,000,000
4,000,000
4,000,000
2,925,000
750,000
4,500,000
300,000
750,000
10,000,000
2,500,000
1,500,000
2,000,000
10,000,000
4,000,000
4,000,000
2,925,000
750,000
4,500,000
300,000
750,000
10,000,000
2,500,000
1,500,000
2,000,000
10,000,000
4,000,000
4,000,000
2,925,000
750,000
4,500,000
300,000
750,000
10,000,000
2,500,000
1,500,000
2,000,000
10,000,000
4,000,000
4,000,000
2,925,000
750,000
4,500,000
300,000
750,000
10,000,000
2,500,000
1,500,000
2,000,000
10,000,000
4,000,000
4,000,000
2,925,000
750,000
4,500,000
300,000
750,000
10,000,000
2,500,000
1,500,000
2,000,000
10,000,000
4,000,000
4,000,000
2,925,000
750,000
4,500,000
300,000
750,000
10,000,000
2,500,000
1,500,000
2,000,000
10,000,000
4,000,000
4,000,000
2,925,000
750,000
4,500,000
300,000
750,000
-
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
-
-
-
-
-
-
-
-
-
-
-
Sales Revenue
-
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
Net Profit/(Loss)
-
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
73
Appendix 3A
Oil Seed Production Assumptions
Years
Number of acres
Ploughing (by tractor)
Fuel consumption per acre
Ploughing per year
fuel price per litre
Year 0
0
Year 1
250
Year 2
250
Year 3
250
Year 4
250
Year 5
250
Year 6
250
Year 7
250
Year 8
250
Year 9
250
Year 10
250
litres
20
times
1
TZS 2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2
1
3,000
2
1
3,000
2
1
3,000
2
1
3,000
2
1
3,000
2
1
3,000
2
1
3,000
2
1
3,000
2
1
3,000
2
1
3,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
2,925,000
2,925,000
2,925,000
2,925,000
2,925,000
2,925,000
2,925,000
2,925,000
2,925,000
2,925,000
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
Sub-total
Harrowing (by tractor)
Fuel consumption per acre
Harrowing per year
fuel price per litre
-
litres
5
times
1
TZS 2,000
Sub-total
Seeds
Seeds needed per acre
frequency per year
Price per kg
-
Kgs
2
times
1
TZS 3,000
Sub-total
Planting (by planter)
Fuel consumption per acre
Planting per year
fuel price per litre
-
litres
4
times
1
TZS 2,000
Sub-total
Fertilizers (DAP)
Bags needed per acre
Fertilizing per year
Price per bag
-
bags
40
times
1
TZS 1,000
Sub-total
Spraying (Round+Decis)
Fuel consumption per acre
Spraying per year
fuel price per litre
-
litres
8
times
1
TZS 2,000
Sub-total
Weeding (Hand weeding)
People needed per acre
Weeding per year
Pay per person per day
-
no.
8
times
1
TZS 2,000
Sub-total
Fungicides/Insecticides (Roud+Decis)
Insecticides per acre
Insecticides need per year
Price per litre
-
litres
1.8
times
1
TZS 6,500
Sub-total
Gunny bags/Packing material
Bags needed per acre
Harvesting per year
Price per bag
Sub-total
-
bags
times
TZS
6
1
500
-
74
Appendix 3A Continued
Harvesting (by hand)
Number of bags
Harvesting per year
Pay per bag
bags
6
times
1
TZS 3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
4,500,000
4,500,000
4,500,000
4,500,000
4,500,000
4,500,000
4,500,000
4,500,000
4,500,000
4,500,000
bags bags
50
trips litres
5
TZS 2,000
1,500
50
30
5
2,000
1,500
50
30
5
2,000
1,500
50
30
5
2,000
1,500
50
30
5
2,000
1,500
50
30
5
2,000
1,500
50
30
5
2,000
1,500
50
30
5
2,000
1,500
50
30
5
2,000
1,500
50
30
5
2,000
1,500
50
30
5
2,000
0
300,000
300,000
300,000
300,000
300,000
300,000
300,000
300,000
300,000
300,000
500
1,500
500
1,500
500
1,500
500
1,500
500
1,500
500
1,500
500
1,500
500
1,500
500
1,500
500
1,500
500
Sub-total
Transportation (from field) by tractor
Bags produced p.a
Tractor carrying capacity
Trips to be made
Fuel consumption per trip
fuel price per litre
-
Sub-total
Bagging/Loading (by hand)
Bags produced p.a
Price per bag
bags
TZS
Sub-total
-
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
750,000
Total cost
-
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
Total costs
-
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
43,225,000
600
150,000
600
600
150,000
600
600
150,000
600
600
150,000
600
600
150,000
600
600
150,000
600
600
150,000
600
600
150,000
600
600
150,000
600
600
150,000
600
REVENUE
Number of kgs per acre
Annual production
Price/kg
kgs
kgs
TZS
600
600
Gross sales revenue
-
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
90,000,000
Net Sales
-
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
46,775,000
75
Appendix 4: SEED MULTIPLICATION
Summary of Income and Expenditure
for the years ended
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
0
200
200
200
200
200
200
200
200
200
200
Figures in TZS
Farm capacity (acres)
Activity
Means
Ploughing
by tractor
Harrowing
by tractor
Seeds
Planting
by planter
Fertilizers
Spraying
by tractor
Weeding
by hand
Fungicides/Insecticides
Gunny bags
Harvesting
by hand
Transportation from field by tractor
Bagging/Loading
by hand
Other costs
Total Production costs
Other costs (fixed)
-
8,000,000
2,000,000
5,400,000
1,600,000
8,000,000
3,200,000
3,200,000
2,340,000
600,000
3,600,000
240,000
600,000
8,000,000
2,000,000
5,400,000
1,600,000
8,000,000
3,200,000
3,200,000
2,340,000
600,000
3,600,000
240,000
600,000
8,000,000
2,000,000
5,400,000
1,600,000
8,000,000
3,200,000
3,200,000
2,340,000
600,000
3,600,000
240,000
600,000
8,000,000
2,000,000
5,400,000
1,600,000
8,000,000
3,200,000
3,200,000
2,340,000
600,000
3,600,000
240,000
600,000
8,000,000
2,000,000
5,400,000
1,600,000
8,000,000
3,200,000
3,200,000
2,340,000
600,000
3,600,000
240,000
600,000
8,000,000
2,000,000
5,400,000
1,600,000
8,000,000
3,200,000
3,200,000
2,340,000
600,000
3,600,000
240,000
600,000
8,000,000
2,000,000
5,400,000
1,600,000
8,000,000
3,200,000
3,200,000
2,340,000
600,000
3,600,000
240,000
600,000
8,000,000
2,000,000
5,400,000
1,600,000
8,000,000
3,200,000
3,200,000
2,340,000
600,000
3,600,000
240,000
600,000
8,000,000
2,000,000
5,400,000
1,600,000
8,000,000
3,200,000
3,200,000
2,340,000
600,000
3,600,000
240,000
600,000
8,000,000
2,000,000
5,400,000
1,600,000
8,000,000
3,200,000
3,200,000
2,340,000
600,000
3,600,000
240,000
600,000
-
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
-
-
-
-
-
-
-
-
-
-
-
Sales Revenue
-
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
Net Profit/(Loss)
-
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
76
Appendix 4A
Seed Multiplication Assumptions
Years
Number of acres
Ploughing (by tractor)
Fuel consumption per acre
Ploughing per year
fuel price per litre
Year 0
0
Year 1
200
Year 2
200
Year 3
200
Year 4
200
Year 5
200
Year 6
200
Year 7
200
Year 8
200
Year 9
200
Year 10
200
litres
20
times
1
TZS 2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
6
1
4,500
6
1
4,500
6
1
4,500
6
1
4,500
6
1
4,500
6
1
4,500
6
1
4,500
6
1
4,500
6
1
4,500
6
1
4,500
5,400,000
5,400,000
5,400,000
5,400,000
5,400,000
5,400,000
5,400,000
5,400,000
5,400,000
5,400,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
4
1
2,000
1,600,000
1,600,000
1,600,000
1,600,000
1,600,000
1,600,000
1,600,000
1,600,000
1,600,000
1,600,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
40
1
1,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
8,000,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
8
1
2,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
3,200,000
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
1.8
1
6,500
2,340,000
2,340,000
2,340,000
2,340,000
2,340,000
2,340,000
2,340,000
2,340,000
2,340,000
2,340,000
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
6
1
500
600,000
600,000
600,000
600,000
600,000
600,000
600,000
600,000
600,000
600,000
Sub-total
Harrowing (by tractor)
Fuel consumption per acre
Harrowing per year
fuel price per litre
-
litres
5
times
1
TZS 2,000
Sub-total
Seeds
Seeds needed per acre
frequency per year
Price per kg
-
Kgs
6
times
1
TZS 4,500
Sub-total
Planting (by planter)
Fuel consumption per acre
Planting per year
fuel price per litre
litres
4
times
1
TZS 2,000
Sub-total
Fertilizers
Bags needed per acre
Fertilizing per year
Price per bag
bags
40
times
1
TZS 1,000
Sub-total
Spraying (Round+Decis)
Fuel consumption per acre
Spraying per year
fuel price per litre
-
litres
8
times
1
TZS 2,000
Sub-total
Weeding (Hand weeding)
People needed per acre
Weeding per year
Pay per person per day
-
no.
8
times
1
TZS 2,000
Sub-total
-
Fungicides/Insecticides (Roud+Decis)
Insecticides per acre
litres
1.8
Insecticides need per year
times
1
Price per litre
TZS 6,500
Sub-total
Gunny bags/Packing material
Bags needed per acre
Harvesting per year
Price per bag
Sub-total
-
bags
times
TZS
6
1
500
-
77
Appendix 4A Continued
Harvesting (by hand)
Number of bags
Harvesting per year
Pay per bag
bags
6
times
1
TZS 3,000
Sub-total
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
6
1
3,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
3,600,000
1,200
50
24
5
2,000
1,200
50
24
5
2,000
1,200
50
24
5
2,000
1,200
50
24
5
2,000
1,200
50
24
5
2,000
1,200
50
24
5
2,000
1,200
50
24
5
2,000
1,200
50
24
5
2,000
1,200
50
24
5
2,000
1,200
50
24
5
2,000
0
240,000
240,000
240,000
240,000
240,000
240,000
240,000
240,000
240,000
240,000
500
1,200
500
1,200
500
1,200
500
1,200
500
1,200
500
1,200
500
1,200
500
1,200
500
1,200
500
1,200
500
-
Transportation (from field) by tractor
Bags produced p.a
bags
Tractor carrying capacity
bags
50
Trips to be made
trips
Fuel consumption per trip
litres
5
fuel price per litre
TZS 2,000
Sub-total
Bagging/Loading (by hand)
Bags produced p.a
Price per bag
bags
TZS
Sub-total
-
600,000
600,000
600,000
600,000
600,000
600,000
600,000
600,000
600,000
600,000
Total cost
-
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
Total costs
-
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
38,780,000
600
120,000
600
600
120,000
600
600
120,000
600
600
120,000
600
600
120,000
600
600
120,000
600
600
120,000
600
600
120,000
600
600
120,000
600
600
120,000
600
REVENUE
Number of kgs per acre
Annual production
Price/kg
kgs
kgs
TZS
600
600
Gross sales revenue
-
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
72,000,000
Net Sales
-
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
33,220,000
78
Appendix 5: WHEAT PRODUCTION
Summary of Income and Expenditure
for the years ended
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
0
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
Figures in TZS
Farm capacity (acres)
Activity
Means
Ploughing
by tractor
Harrowing
by tractor
Seeds
Planting
by planter
Fertilizers
Spraying
by tractor
Weeding
by tractor
Fungicides/Insecticides
Gunny bags
Harvesting
by harvester
Transportation from field by tractor
Bagging/Loading
by hand
Other costs
Total Production costs
Other costs (fixed)
-
80,000,000
20,000,000
20,000,000
20,000,000
200,000,000
20,000,000
40,000,000
80,000,000
75,000,000
40,000,000
6,000,000
15,000,000
80,000,000
20,000,000
20,000,000
20,000,000
200,000,000
20,000,000
40,000,000
80,000,000
75,000,000
40,000,000
6,000,000
15,000,000
80,000,000
20,000,000
20,000,000
20,000,000
200,000,000
20,000,000
40,000,000
80,000,000
75,000,000
40,000,000
6,000,000
15,000,000
80,000,000
20,000,000
20,000,000
20,000,000
200,000,000
20,000,000
40,000,000
80,000,000
75,000,000
40,000,000
6,000,000
15,000,000
80,000,000
20,000,000
20,000,000
20,000,000
200,000,000
20,000,000
40,000,000
80,000,000
75,000,000
40,000,000
6,000,000
15,000,000
80,000,000
20,000,000
20,000,000
20,000,000
200,000,000
20,000,000
40,000,000
80,000,000
75,000,000
40,000,000
6,000,000
15,000,000
80,000,000
20,000,000
20,000,000
20,000,000
200,000,000
20,000,000
40,000,000
80,000,000
75,000,000
40,000,000
6,000,000
15,000,000
80,000,000
20,000,000
20,000,000
20,000,000
200,000,000
20,000,000
40,000,000
80,000,000
75,000,000
40,000,000
6,000,000
15,000,000
80,000,000
20,000,000
20,000,000
20,000,000
200,000,000
20,000,000
40,000,000
80,000,000
75,000,000
40,000,000
6,000,000
15,000,000
80,000,000
20,000,000
20,000,000
20,000,000
200,000,000
20,000,000
40,000,000
80,000,000
75,000,000
40,000,000
6,000,000
15,000,000
-
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
-
-
-
-
-
-
-
-
-
-
-
Sales Revenue
-
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
Net Profit/(Loss)
-
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
79
Appendix 5A
Wheat Production Assumptions
Years
Number of acres
Ploughing
Fuel consumption per acre
Ploughing per year
fuel price per litre
litres
times
TZS
Sub-total
Harrowing
Fuel consumption per acre
Harrowing per year
fuel price per litre
litres
times
TZS
Kgs
times
TZS
litres
times
TZS
litres
times
TZS
Sub-total
Year 7
2000
Year 8
2000
Year 9
2000
Year 10
2000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
20
1
2,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
10
1
1,000
10
1
1,000
10
1
1,000
10
1
1,000
10
1
1,000
10
1
1,000
10
1
1,000
10
1
1,000
10
1
1,000
10
1
1,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
4
1
25,000
4
1
25,000
4
1
25,000
4
1
25,000
4
1
25,000
4
1
25,000
4
1
25,000
4
1
25,000
4
1
25,000
4
1
25,000
200,000,000
200,000,000
200,000,000
200,000,000
200,000,000
200,000,000
200,000,000
200,000,000
200,000,000
200,000,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
5
1
2,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
80,000,000
15
1
2,500
15
1
2,500
15
1
2,500
15
1
2,500
15
1
2,500
15
1
2,500
15
1
2,500
15
1
2,500
15
1
2,500
15
1
2,500
75,000,000
75,000,000
75,000,000
75,000,000
75,000,000
75,000,000
75,000,000
75,000,000
75,000,000
75,000,000
5
1
2,000
10
1
1,000
5
1
2,000
5
1
2,000
-
litres
times
TZS
10
1
2,000
-
litres
4
times
1
TZS 10,000
Sub-total
Gunny bags/Packing material
Bags needed per acre
Harvesting per year
Price per bag
Year 6
2000
-
Sub-total
Fungicides/Insecticides
Insecticides per acre
Insecticides need per year
Price per litre
Year 5
2000
bags
4
times
1
TZS 25,000
Sub-total
Weeding
Fuel consumption per acre
Weeding per year
fuel price per litre
Year 4
2000
-
Sub-total
Spraying
Fuel consumption per acre
Spraying per year
fuel price per litre
Year 3
2000
-
Sub-total
Fertilizers
Bags needed per acre
Fertilizing per year
Price per bag
Year 2
2000
-
Sub-total
Planting
Fuel consumption per acre
Planting per year
fuel price per litre
Year 1
2000
-
Sub-total
Seeds
Seeds needed per acre
frequency per year
Price per kg
Year 0
0
-
bags
times
TZS
15
1
2,500
-
80
Appendix 5A Continued
Harvesting
Fuel consumption per acre
Harvesting per year
fuel price per litre
litres
times
TZS
Sub-total
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
10
1
2,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
40,000,000
5
2,000
30,000
50
600
5
2,000
30,000
50
600
5
2,000
30,000
50
600
5
2,000
30,000
50
600
5
2,000
30,000
50
600
5
2,000
30,000
50
600
5
2,000
30,000
50
600
5
2,000
30,000
50
600
5
2,000
30,000
50
600
5
2,000
30,000
50
600
5
2,000
0
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
500
30,000
500
30,000
500
30,000
500
30,000
500
30,000
500
30,000
500
30,000
500
30,000
500
30,000
500
30,000
500
-
Transportation (from field) by tractor
Bags produced p.a
bags
Tractor carrying capacity
bags
Trips to be made
trips
Fuel consumption per trip
litres
fuel price per litre
TZS
50
-
Sub-total
Bagging/Loading (by hand)
Bags produced p.a
Price per bag
bags
TZS
Sub-total
-
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
Total cost
-
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
Total costs
-
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
616,000,000
1500
3,000,000
500
1500
3,000,000
500
1500
3,000,000
500
1500
3,000,000
500
1500
3,000,000
500
1500
3,000,000
500
1500
3,000,000
500
1500
3,000,000
500
1500
3,000,000
500
1500
3,000,000
500
REVENUE
Number of kgs per acre
Annual production
Price/kg
kgs
kgs
TZS
1500
500
Gross sales revenue
-
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
1,500,000,000
Net Sales
-
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
884,000,000
81
Appendix 6: HORTICULTURE PRODUCTION
Summary of Income and Expenditure
for the years ended
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
70
150
200
300
300
300
300
300
300
300
300
Figures in TZS
Farm capacity (acres)
Activity
Means
Ploughing
by tractor
Harrowing
by tractor
Seeds
Planting
by planter
Fertilizers
Spraying
by tractor
Weeding
by hand
Fungicides/Insecticides
Packing materials
Harvesting/loading
by hand
Transportation from field by tractor
4,200,000
2,100,000
6,300,000
1,680,000
504,000
2,520,000
2,520,000
5,670,000
21,000,000
42,000,000
1,680,000
-
9,000,000
4,500,000
13,500,000
3,600,000
1,080,000
5,400,000
5,400,000
12,150,000
90,000,000
348,000,000
7,200,000
-
12,000,000
6,000,000
18,000,000
4,800,000
1,440,000
7,200,000
7,200,000
16,200,000
120,000,000
408,000,000
9,600,000
-
18,000,000
9,000,000
27,000,000
7,200,000
2,160,000
10,800,000
10,800,000
24,300,000
180,000,000
528,000,000
14,400,000
-
18,000,000
9,000,000
27,000,000
7,200,000
2,160,000
10,800,000
10,800,000
24,300,000
180,000,000
528,000,000
14,400,000
-
18,000,000
9,000,000
27,000,000
7,200,000
2,160,000
10,800,000
10,800,000
24,300,000
180,000,000
528,000,000
14,400,000
-
18,000,000
9,000,000
27,000,000
7,200,000
2,160,000
10,800,000
10,800,000
24,300,000
180,000,000
528,000,000
14,400,000
-
18,000,000
9,000,000
27,000,000
7,200,000
2,160,000
10,800,000
10,800,000
24,300,000
180,000,000
528,000,000
14,400,000
-
18,000,000
9,000,000
27,000,000
7,200,000
2,160,000
10,800,000
10,800,000
24,300,000
180,000,000
528,000,000
14,400,000
-
18,000,000
9,000,000
27,000,000
7,200,000
2,160,000
10,800,000
10,800,000
24,300,000
180,000,000
528,000,000
14,400,000
-
18,000,000
9,000,000
27,000,000
7,200,000
2,160,000
10,800,000
10,800,000
24,300,000
180,000,000
528,000,000
14,400,000
-
90,174,000
499,830,000
610,440,000
831,660,000
831,660,000
831,660,000
831,660,000
831,660,000
831,660,000
831,660,000
831,660,000
Other costs (fixed)18,000,000
55,417,500
86,417,850
88,146,207
89,909,131
91,707,314
93,541,460
95,412,289
97,320,535
99,266,946
101,252,285
Sales Revenue
583,800,000
2,552,040,000
3,470,774,400
5,310,284,832
5,416,490,529
5,524,820,339
5,635,316,746
5,748,023,081
5,862,983,543
5,980,243,213
6,099,848,078
Net Profit/(Loss)
475,626,000
1,996,792,500
2,773,916,550
4,390,478,625
4,494,921,398
4,601,453,025
4,710,115,286
4,820,950,792
4,934,003,008
5,049,316,268
5,166,935,793
Other costs
Total Production costs
82
Appendix 6A
Horticulture Production Assumptions (Current situation)
Years
Number of acres
Ploughing (by tractor)
Fuel consumption per acre
Ploughing per year
fuel price per litre
litres
times
TZS
Sub-total
Harrowing (by tractor)
Fuel consumption per acre
Harrowing per year
fuel price per litre
litres
times
TZS
Kgs
times
TZS
Year 5
70
Year 6
70
Year 7
70
Year 8
70
Year 9
70
Year 10
70
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
6,300,000
litres
times
TZS
4
3
2,000
1,680,000
bags
times
TZS
0.8
3
3,000
504,000
litres
times
TZS
6
3
2,000
Sub-total
Weeding (Hand weeding)
People needed per acre
Weeding per year
Pay per person per day
Year 4
70
30
3
1,000
Sub-total
Spraying (foliar)
Fuel consumption per acre
Spraying per year
fuel price per litre
Year 3
70
2,100,000
Sub-total
Fertilizers (foliar)
Bags needed per acre
Fertilizing per year
Price per bag
Year 2
70
5
3
2,000
Sub-total
Planting (by planter)
Fuel consumption per acre
Planting per year
fuel price per litre
Year 1
70
4,200,000
Sub-total
Seeds
Seeds needed per acre
frequency per year
Price per kg
Year 0
70
2,520,000
no.
times
TZS
6
3
2,000
Sub-total
2,520,000
Fungicides/Insecticides (Roud+Rarate+Folicur)
Insecticides per acre
litres
1.5
Insecticides need per year
times
3
Price per litre
TZS
18,000
Sub-total
Packing material
materials needed
Harvesting per year
Price per material
5,670,000
5
units
times
TZS
Sub-total
Harvesting (by hand)
Number of crates
Harvesting per year
Pay per crate
Sub-total
84,000
3
250
21,000,000
50
crates
times
TZS
8,400
3
5,000
42,000,000
4,200,000
5
3
2,000
2,100,000
30
3
1,000
6,300,000
4
3
2,000
1,680,000
0.8
3
3,000
504,000
6
3
2,000
2,520,000
6
3
2,000
2,520,000
1.5
3
18,000
5,670,000
168,000
3
250
42,000,000
16,800
3
5,000
4,200,000
5
3
2,000
2,100,000
30
3
1,000
6,300,000
4
3
2,000
1,680,000
0.8
3
3,000
504,000
6
3
2,000
2,520,000
6
3
2,000
2,520,000
1.5
3
18,000
5,670,000
168,000
3
250
42,000,000
16,800
3
5,000
4,200,000
5
3
2,000
2,100,000
30
3
1,000
6,300,000
4
3
2,000
1,680,000
0.8
3
3,000
504,000
6
3
2,000
2,520,000
6
3
2,000
2,520,000
1.5
3
18,000
5,670,000
168,000
3
250
42,000,000
16,800
3
5,000
4,200,000
5
3
2,000
2,100,000
30
3
1,000
6,300,000
4
3
2,000
1,680,000
0.8
3
3,000
504,000
6
3
2,000
2,520,000
6
3
2,000
2,520,000
1.5
3
18,000
5,670,000
168,000
3
250
42,000,000
16,800
3
5,000
4,200,000
5
3
2,000
2,100,000
30
3
1,000
6,300,000
4
3
2,000
1,680,000
0.8
3
3,000
504,000
6
3
2,000
2,520,000
6
3
2,000
2,520,000
1.5
3
18,000
5,670,000
168,000
3
250
42,000,000
16,800
3
5,000
4,200,000
5
3
2,000
2,100,000
30
3
1,000
6,300,000
4
3
2,000
1,680,000
0.8
3
3,000
504,000
6
3
2,000
2,520,000
6
3
2,000
2,520,000
1.5
3
18,000
5,670,000
168,000
3
250
42,000,000
16,800
3
5,000
4,200,000
5
3
2,000
2,100,000
30
3
1,000
6,300,000
4
3
2,000
1,680,000
0.8
3
3,000
504,000
6
3
2,000
2,520,000
6
3
2,000
2,520,000
1.5
3
18,000
5,670,000
168,000
3
250
42,000,000
16,800
3
5,000
4,200,000
5
3
2,000
2,100,000
30
3
1,000
6,300,000
4
3
2,000
1,680,000
0.8
3
3,000
504,000
6
3
2,000
2,520,000
6
3
2,000
2,520,000
1.5
3
18,000
5,670,000
168,000
3
250
42,000,000
16,800
3
5,000
4,200,000
5
3
2,000
2,100,000
30
3
1,000
6,300,000
4
3
2,000
1,680,000
0.8
3
3,000
504,000
6
3
2,000
2,520,000
6
3
2,000
2,520,000
1.5
3
18,000
5,670,000
168,000
3
250
42,000,000
16,800
3
5,000
4,200,000
5
3
2,000
2,100,000
30
3
1,000
6,300,000
4
3
2,000
1,680,000
0.8
3
3,000
504,000
6
3
2,000
2,520,000
6
3
2,000
2,520,000
1.5
3
18,000
5,670,000
168,000
3
250
42,000,000
16,800
3
5,000
252,000,000
252,000,000
252,000,000
252,000,000
252,000,000
252,000,000
252,000,000
252,000,000
252,000,000
252,000,000
8,400
50
168
5
2,000
16,800
50
336
5
2,000
16,800
50
336
5
2,000
16,800
50
336
5
2,000
16,800
50
336
5
2,000
16,800
50
336
5
2,000
16,800
50
336
5
2,000
16,800
50
336
5
2,000
16,800
50
336
5
2,000
16,800
50
336
5
2,000
16,800
50
336
5
2,000
Sub-total
1,680,000
3,360,000
3,360,000
3,360,000
3,360,000
3,360,000
3,360,000
3,360,000
3,360,000
3,360,000
3,360,000
Total cost
90,174,000
322,854,000
322,854,000
322,854,000
322,854,000
322,854,000
322,854,000
322,854,000
322,854,000
322,854,000
322,854,000
Fixed Costs
Salaries and wages
Repair and maintanance
Other overheads
18,000,000
-
18,360,000
-
18,727,200
-
19,101,744
-
19,483,779
-
19,873,454
-
20,270,924
-
20,676,342
-
21,089,869
-
21,511,666
-
21,941,900
-
Sub-total
18,000,000
18,360,000
18,727,200
19,101,744
19,483,779
19,873,454
20,270,924
20,676,342
21,089,869
21,511,666
21,941,900
108,174,000
341,214,000
341,581,200
341,955,744
342,337,779
342,727,454
343,124,924
343,530,342
343,943,869
344,365,666
344,795,900
Transportation (from field) by tractor
Crates produced p.a
crates
Tractor carrying capacity
crates
Trips to be made
trips
Fuel consumption per trip
litres
fuel price per litre
TZS
Total costs
83
Appendix 6A Continued
REVENUE
Runner beans
Acres utilized
Production/acre
Avg production/per acre
Annual production
Price/kg
tons
kgs
kgs
TZS
Sub total
Sugar snaps
Acres utilized
Production/acre
Avg production/per acre
Annual production
Price/kg
tons
kgs
kgs
TZS
Sub total
Fine beans
Acres utilized
Production/acre
Avg production/per acre
Annual production
Price/kg
tons
kgs
kgs
TZS
Sub total
Soya edamane
Acres utilized
Production/acre
Avg production/per acre
Annual production
Price/kg
Sub total
tons
kgs
kgs
TZS
18
2
2,000
105,000
2,500
18
4
4,000
210,000
2,550
18
4
4,000
210,000
2,601
18
4
4,000
210,000
2,653
18
4
4,000
210,000
2,706
18
4
4,000
210,000
2,760
18
4
4,000
210,000
2,815
18
4
4,000
210,000
2,872
18
4
4,000
210,000
2,929
18
4
4,000
210,000
2,988
18
4
4,000
210,000
3,047
262,500,000
535,500,000
546,210,000
557,134,200
568,276,884
579,642,422
591,235,270
603,059,976
615,121,175
627,423,599
639,972,070
18
1
1000
52,500
2,400
18
2
2000
105,000
2,448
18
2
2000
105,000
2,497
18
2
2000
105,000
2,547
18
2
2000
105,000
2,598
18
2
2000
105,000
2,650
18
2
2000
105,000
2,703
18
2
2000
105,000
2,757
18
2
2000
105,000
2,812
18
2
2000
105,000
2,868
18
2
2000
105,000
2,926
126,000,000
257,040,000
262,180,800
267,424,416
272,772,904
278,228,362
283,792,930
289,468,788
295,258,164
301,163,327
307,186,594
18
1
1400
73,500
1,800
18
3
2800
147,000
1,836
18
3
2800
147,000
1,873
18
3
2800
147,000
1,910
18
3
2800
147,000
1,948
18
3
2800
147,000
1,987
18
3
2800
147,000
2,027
18
3
2800
147,000
2,068
18
3
2800
147,000
2,109
18
3
2800
147,000
2,151
18
3
2800
147,000
2,194
132,300,000
269,892,000
275,289,840
280,795,637
286,411,550
292,139,781
297,982,576
303,942,228
310,021,072
316,221,494
322,545,924
18
1
800
42,000
1,500
18
2
1600
84,000
1,530
18
2
1600
84,000
1,561
18
2
1600
84,000
1,592
18
2
1600
84,000
1,624
18
2
1600
84,000
1,656
18
2
1600
84,000
1,689
18
2
1600
84,000
1,723
18
2
1600
84,000
1,757
18
2
1600
84,000
1,793
18
2
1600
84,000
1,828
63,000,000
128,520,000
131,090,400
133,712,208
136,386,452
139,114,181
141,896,465
144,734,394
147,629,082
150,581,664
153,593,297
Gross sales revenue
583,800,000 1,190,952,000 1,214,771,040 1,239,066,461 1,263,847,790 1,289,124,746 1,314,907,241 1,341,205,386 1,368,029,493 1,395,390,083 1,423,297,885
Net Sales
493,626,000
868,098,000
891,917,040
916,212,461
940,993,790
84
966,270,746
992,053,241 1,018,351,386 1,045,175,493 1,072,536,083 1,100,443,885
Appendix 6B
Horticulture Production Assumptions (Expansion)
Years
Number of acres
Ploughing (by tractor)
Fuel consumption per acre
Ploughing per year
fuel price per litre
litres
times
TZS
Sub-total
Harrowing (by tractor)
Fuel consumption per acre
Harrowing per year
fuel price per litre
litres
times
TZS
Kgs
times
TZS
litres
times
TZS
bags
times
TZS
Year 5
230
Year 6
230
Year 7
230
Year 8
230
Year 9
230
Year 10
230
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
10
3
2,000
4,800,000
5
3
2,000
litres
times
TZS
30
3
1,000
Sub-total
4
3
2,000
0.8
3
3,000
6
3
2,000
Sub-total
Harvesting (by hand)
Number of crates
Harvesting per year
Pay per crate
6
3
2,000
Sub-total
Transportation (from field) by tractor
Crates produced p.a
crates
Tractor carrying capacity
crates
Trips to be made
trips
Fuel consumption per trip
litres
fuel price per litre
TZS
1.5
3
18,000
6,480,000
0
3
250
192000
3
250
48,000,000
0
3
5,000
-
50
5
2,000
Sub-total
6
3
2,000
2,880,000
50
crates
times
TZS
6
3
2,000
2,880,000
-
units
times
TZS
0.8
3
3,000
576,000
Fungicides/Insecticides (Roud+Rarate+Folicur)
Insecticides per acre
litres
1.5
Insecticides need per year
times
3
Price per litre
TZS 18,000
Packing material
materials needed
Harvesting per year
Price per material
4
3
2,000
1,920,000
-
Sub-total
30
3
1,000
7,200,000
-
no.
times
TZS
5
3
2,000
2,400,000
-
Sub-total
Weeding (Hand weeding)
People needed per acre
Weeding per year
Pay per person per day
Year 4
230
-
Sub-total
Spraying (foliar)
Fuel consumption per acre
Spraying per year
fuel price per litre
Year 3
230
-
Sub-total
Fertilizers (foliar)
Bags needed per acre
Fertilizing per year
Price per bag
Year 2
130
-
Sub-total
Planting (by planter)
Fuel consumption per acre
Planting per year
fuel price per litre
Year 1
80
-
Sub-total
Seeds
Seeds needed per acre
frequency per year
Price per kg
Year 0
0
0
19200
3
5,000
7,800,000
5
3
2,000
3,900,000
30
3
1,000
11,700,000
4
3
2,000
3,120,000
0.8
3
3,000
936,000
6
3
2,000
4,680,000
6
3
2,000
4,680,000
1.5
3
18,000
10,530,000
312000
3
250
78,000,000
31200
3
5,000
13,800,000
5
3
2,000
6,900,000
30
3
1,000
20,700,000
4
3
2,000
5,520,000
0.8
3
3,000
1,656,000
6
3
2,000
8,280,000
6
3
2,000
8,280,000
1.5
3
18,000
18,630,000
552000
3
250
138,000,000
55200
3
5,000
13,800,000
5
3
2,000
6,900,000
30
3
1,000
20,700,000
4
3
2,000
5,520,000
0.8
3
3,000
1,656,000
6
3
2,000
8,280,000
6
3
2,000
8,280,000
1.5
3
18,000
18,630,000
552000
3
250
138,000,000
55200
3
5,000
13,800,000
5
3
2,000
6,900,000
30
3
1,000
20,700,000
4
3
2,000
5,520,000
0.8
3
3,000
1,656,000
6
3
2,000
8,280,000
6
3
2,000
8,280,000
1.5
3
18,000
18,630,000
552000
3
250
138,000,000
55200
3
5,000
13,800,000
5
3
2,000
6,900,000
30
3
1,000
20,700,000
4
3
2,000
5,520,000
0.8
3
3,000
1,656,000
6
3
2,000
8,280,000
6
3
2,000
8,280,000
1.5
3
18,000
18,630,000
552000
3
250
138,000,000
55200
3
5,000
13,800,000
5
3
2,000
6,900,000
30
3
1,000
20,700,000
4
3
2,000
5,520,000
0.8
3
3,000
1,656,000
6
3
2,000
8,280,000
6
3
2,000
8,280,000
1.5
3
18,000
18,630,000
552000
3
250
138,000,000
55200
3
5,000
13,800,000
5
3
2,000
6,900,000
30
3
1,000
20,700,000
4
3
2,000
5,520,000
0.8
3
3,000
1,656,000
6
3
2,000
8,280,000
6
3
2,000
8,280,000
1.5
3
18,000
18,630,000
552000
3
250
138,000,000
55200
3
5,000
13,800,000
5
3
2,000
6,900,000
30
3
1,000
20,700,000
4
3
2,000
5,520,000
0.8
3
3,000
1,656,000
6
3
2,000
8,280,000
6
3
2,000
8,280,000
1.5
3
18,000
18,630,000
552000
3
250
138,000,000
55200
3
5,000
13,800,000
5
3
2,000
6,900,000
30
3
1,000
20,700,000
4
3
2,000
5,520,000
0.8
3
3,000
1,656,000
6
3
2,000
8,280,000
6
3
2,000
8,280,000
1.5
3
18,000
18,630,000
552000
3
250
138,000,000
55200
3
5,000
96,000,000
156,000,000
276,000,000
276,000,000
276,000,000
276,000,000
276,000,000
276,000,000
276,000,000
276,000,000
19,200
50
384
5
2,000
31,200
50
624
5
2,000
55,200
50
1,104
5
2,000
55,200
50
1,104
5
2,000
55,200
50
1,104
5
2,000
55,200
50
1,104
5
2,000
55,200
50
1,104
5
2,000
55,200
50
1,104
5
2,000
55,200
50
1,104
5
2,000
55,200
50
1,104
5
2,000
3,840,000
6,240,000
11,040,000
11,040,000
11,040,000
11,040,000
11,040,000
11,040,000
11,040,000
11,040,000
Total cost
-
176,976,000
287,586,000
508,806,000
508,806,000
508,806,000
508,806,000
508,806,000
508,806,000
508,806,000
508,806,000
Fixed Costs
Salaries and wages
Repair and maintanance
Other overheads
-
35,400,000
1,657,500
-
66,000,000
1,690,650
-
67,320,000
1,724,463
-
68,666,400
1,758,952
-
70,039,728
1,794,131
-
71,440,523
1,830,014
-
72,869,333
1,866,614
-
74,326,720
1,903,946
-
75,813,254
1,942,025
-
77,329,519
1,980,866
-
Sub-total
-
37,057,500
67,690,650
69,044,463
70,425,352
71,833,859
73,270,536
74,735,947
76,230,666
77,755,279
79,310,385
Total costs
-
214,033,500
355,276,650
577,850,463
579,231,352
580,639,859
582,076,536
583,541,947
585,036,666
586,561,279
588,116,385
85
Appendix 6B Continued
REVENUE
Runner beans
Acres utilized
Production/acre
Avg production/per acre
Annual production
Price/kg
tons
kgs
kgs
TZS
-
Sub total
Sugar snaps
Acres utilized
Production/acre
Avg production/per acre
Annual production
Price/kg
tons
kgs
kgs
TZS
tons
kgs
kgs
TZS
0
3
2800
0
1,800
-
Sub total
Soya edamane
Acres utilized
Production/acre
Avg production/per acre
Annual production
Price/kg
0
2
2000
0
2,400
-
Sub total
Fine beans
Acres utilized
Production/acre
Avg production/per acre
Annual production
Price/kg
0
4
4,000
0
2,500
tons
kgs
kgs
TZS
0
2
1600
0
1,500
20
4
4,000
240000
2,550
33
4
4,000
390000
2,601
58
4
4,000
690000
2,653
58
4
4,000
690000
2,706
58
4
4,000
690000
2,760
58
4
4,000
690000
2,815
58
4
4,000
690000
2,872
58
4
4,000
690000
2,929
58
4
4,000
690000
2,988
58
4
4,000
690000
3,047
612,000,000 1,014,390,000 1,830,583,800 1,867,195,476 1,904,539,386 1,942,630,173 1,981,482,777 2,021,112,432 2,061,534,681 2,102,765,374
58
2
2000
345000
2,868
58
2
2000
345000
2,926
20
2
2000
120000
2,448
33
2
2000
195000
2,497
58
2
2000
345000
2,547
58
2
2000
345000
2,598
58
2
2000
345000
2,650
58
2
2000
345000
2,703
58
2
2000
345000
2,757
58
2
2000
345000
2,812
293,760,000
486,907,200
878,680,224
896,253,828
914,178,905
932,462,483
951,111,733
970,133,967
20
3
2800
168000
1,836
33
3
2800
273000
1,873
58
3
2800
483000
1,910
58
3
2800
483000
1,948
58
3
2800
483000
1,987
58
3
2800
483000
2,027
58
3
2800
483000
2,068
58
3
2800
483000
2,109
308,448,000
511,252,560
922,614,235
941,066,520
959,887,850
979,085,607
20
2
1600
96000
1,530
33
2
1600
156000
1,561
58
2
1600
276000
1,592
58
2
1600
276000
1,624
58
2
1600
276000
1,656
58
2
1600
276000
1,689
58
2
1600
276000
1,723
58
2
1600
276000
1,757
58
2
1600
276000
1,793
58
2
1600
276000
1,828
146,880,000
243,453,600
439,340,112
448,126,914
457,089,453
466,231,242
475,555,866
485,066,984
494,768,323
504,663,690
989,536,647 1,009,327,380
58
3
2800
483000
2,151
58
3
2800
483000
2,194
998,667,319 1,018,640,666 1,039,013,479 1,059,793,749
Sub total
-
Gross sales revenue
-
1,361,088,000 2,256,003,360 4,071,218,371 4,152,642,739 4,235,695,593 4,320,409,505 4,406,817,695 4,494,954,049 4,584,853,130 4,676,550,193
Net Sales
-
1,184,112,000 1,968,417,360 3,562,412,371 3,643,836,739 3,726,889,593 3,811,603,505 3,898,011,695 3,986,148,049 4,076,047,130 4,167,744,193
86
Appendix 6C
Horticulture Production
CAPITAL EXPENDITURE
Expansion
HORTICULTURE PRODUCTION
Water dam (400,000 Litres)
Water pumping equipment
Grading and packing house and equipment
7-tons refrigerated trucks
Drip irrigation
Qty
1
1
1
2
1
Price (USD)
20,000
35,000
85,000
28,000
25,000
Total
Exc rate
1,500
1,500
1,500
1,500
1,500
TZS
30,000,000
52,500,000
127,500,000
84,000,000
37,500,000
331,500,000
87
Appendix 7: COFFEE PRODUCTION
Summary of Income and Expenditure
for the years ended
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
35
50
75
90
100
100
100
100
100
100
100
Figures in TZS
Farm capacity (acres)
Activity
Means
Ploughing
by tractor
Harrowing
by tractor
Plants
Planting
by hand
Fertilizers
Spraying
by hand
Weeding
by hand
Fungicides/Insecticides
Gunny bags
Harvesting
by hand
Transportation from field by tractor
Bagging/Loading
by hand
Other costs
Total Production costs
Other costs (fixed)
Sales Revenue
Net Profit/(Loss)
700,000
420,000
1,400,000
525,000
1,050,000
105,000
262,500
300,000
150,000
11,250,000
300,000
1,000,000
600,000
2,000,000
750,000
1,500,000
150,000
375,000
1,500,000
900,000
3,000,000
1,125,000
2,250,000
225,000
562,500
1,800,000
1,080,000
3,600,000
1,350,000
2,700,000
270,000
675,000
2,000,000
1,200,000
4,000,000
1,500,000
3,000,000
300,000
750,000
2,000,000
1,200,000
4,000,000
1,500,000
3,000,000
300,000
750,000
2,000,000
1,200,000
4,000,000
1,500,000
3,000,000
300,000
750,000
2,000,000
1,200,000
4,000,000
1,500,000
3,000,000
300,000
750,000
2,000,000
1,200,000
4,000,000
1,500,000
3,000,000
300,000
750,000
2,000,000
1,200,000
4,000,000
1,500,000
3,000,000
300,000
750,000
2,000,000
1,200,000
4,000,000
1,500,000
3,000,000
300,000
750,000
4,462,500
18,375,000
9,562,500
11,475,000
12,750,000
12,750,000
12,750,000
12,750,000
12,750,000
12,750,000
12,750,000
225,000
971,250
971,250
971,250
971,250
971,250
971,250
971,250
971,250
971,250
971,250
33,750,000
90,000,000
123,750,000
146,250,000
146,250,000
146,250,000
146,250,000
146,250,000
146,250,000
146,250,000
14,403,750
79,466,250
111,303,750
132,528,750
132,528,750
132,528,750
132,528,750
132,528,750
132,528,750
132,528,750
(4,687,500)
88
Appendix 7A
Coffee Production Assumptions (Current situation)
Years
Number of acres
Year 0
35
Year 1
35
Year 2
35
Year 3
35
Year 4
35
Year 5
35
Year 6
35
Year 7
35
Year 8
35
Year 9
35
Year 10
35
4
1
5,000
0%
4
1
5,000
0%
4
1
5,000
0%
4
1
5,000
0%
4
1
5,000
0%
4
1
5,000
0%
4
1
5,000
0%
4
1
5,000
0%
4
1
5,000
0%
4
1
5,000
0%
4
1
5,000
0%
700,000
700,000
700,000
700,000
700,000
700,000
700,000
700,000
700,000
700,000
700,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
420,000
420,000
420,000
420,000
420,000
420,000
420,000
420,000
420,000
420,000
420,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
1,400,000
1,400,000
1,400,000
1,400,000
1,400,000
1,400,000
1,400,000
1,400,000
1,400,000
1,400,000
1,400,000
525
1
1,000
525
1
1,000
525
1
1,000
525
1
1,000
525
1
1,000
525
1
1,000
525
1
1,000
525
1
1,000
525
1
1,000
525
1
1,000
525
1
1,000
525,000
525,000
525,000
525,000
525,000
525,000
525,000
525,000
525,000
525,000
525,000
525
1
2,000
525
1
2,000
525
1
2,000
525
1
2,000
525
1
2,000
525
1
2,000
525
1
2,000
525
1
2,000
525
1
2,000
525
1
2,000
525
1
2,000
1,050,000
1,050,000
1,050,000
1,050,000
1,050,000
1,050,000
1,050,000
1,050,000
1,050,000
1,050,000
1,050,000
525
50
11
5
2,000
525
50
11
5
2,000
525
50
11
5
2,000
525
50
11
5
2,000
525
50
11
5
2,000
525
50
11
5
2,000
525
50
11
5
2,000
525
50
11
5
2,000
525
50
11
5
2,000
525
50
11
5
2,000
525
50
11
5
2,000
105000
105,000
105,000
105,000
105,000
105,000
105,000
105,000
105,000
105,000
105,000
525
500
525
500
525
500
525
500
525
500
525
500
525
500
525
500
525
500
525
500
525
500
Sub-total
262,500
262,500
262,500
262,500
262,500
262,500
262,500
262,500
262,500
262,500
262,500
Total cost
4,462,500
4,462,500
4,462,500
4,462,500
4,462,500
4,462,500
4,462,500
4,462,500
4,462,500
4,462,500
4,462,500
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
225,000
4,687,500
4,687,500
4,687,500
4,687,500
4,687,500
4,687,500
4,687,500
4,687,500
4,687,500
4,687,500
4,687,500
3
52500
1,500
3
52500
1,500
3
52500
1,500
3
52500
1,500
3
52500
1,500
3
52500
1,500
3
52500
1,500
3
52500
1,500
3
52500
1,500
3
52500
1,500
3
52500
1,500
Gross sales revenue
78,750,000
78,750,000
78,750,000
78,750,000
78,750,000
78,750,000
78,750,000
78,750,000
78,750,000
78,750,000
78,750,000
Net Sales
74,287,500
74,287,500
74,287,500
74,287,500
74,287,500
74,287,500
74,287,500
74,287,500
74,287,500
74,287,500
74,287,500
Spraying (by hand)
People needed per acre
Weeding per year
Pay per person per day
Pay increment per p.a
no.
times
TZS
%
Sub-total
Weeding (Hand weeding)
People needed per acre
Weeding per year
Pay per person per day
no.
times
TZS
Sub-total
Fungicides/Insecticides
Insecticides per acre
Insecticides need per year
Price per litre
litres
times
TZS
Sub-total
Gunny bags/Packing material
Bags needed per acre
bags
Harvesting per year
times
Price per bag
TZS
Sub-total
Harvesting (by hand)
Number of bags
Harvesting per year
Pay per bag
bags
times
TZS
Sub-total
Transportation (from field) by tractor
Bags produced p.a
bags
Tractor carrying capacity
bags
Trips to be made
trips
Fuel consumption per trip
litres
fuel price per litre
TZS
Sub-total
Bagging/Loading (by hand)
Bags produced p.a (100kg)
Price per bag
bags
TZS
Fixed Costs
Salaries and wages
Repair and maintanance
Other overheads
Sub-total
Total costs
REVENUE
Number of kgs per tree
Annual production
Price/kg
kgs
kgs
TZS
89
Appendix 7B
Coffee Production Assumptions (Expansion)
Years
Number of acres
Ploughing (by tractor)
Fuel consumption per acre
Ploughing per year
fuel price per litre
litres
times
TZS
Sub-total
Harrowing (by tractor)
Fuel consumption per acre
Harrowing per year
fuel price per litre
litres
times
TZS
No.
times
TZS
no.
times
TZS
no.
times
TZS
no.
times
TZS
Sub-total
Year 7
65
Year 8
65
Year 9
65
Year 10
65
10
1
2,000
10
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
-
-
-
-
-
-
-
-
-
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
0
1
2,000
-
-
-
-
-
-
-
-
-
0
1
1,500
0
1
1,500
0
1
1,500
0
1
1,500
0
1
1,500
0
1
1,500
0
1
1,500
0
1
1,500
0
1
1,500
-
-
-
-
-
-
-
-
-
0
1
5,000
0
1
5,000
0
1
5,000
0
1
5,000
0
1
5,000
0
1
5,000
0
1
5,000
0
1
5,000
0
1
5,000
-
-
-
-
-
-
-
-
-
4
1
5,000
4
1
5,000
4
1
5,000
4
1
5,000
4
1
5,000
4
1
5,000
4
1
5,000
4
1
5,000
4
1
5,000
4
1
5,000
300,000
800,000
1,100,000
1,300,000
1,300,000
1,300,000
1,300,000
1,300,000
1,300,000
1,300,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
6
1
2,000
180,000
480,000
660,000
780,000
780,000
780,000
780,000
780,000
780,000
780,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
4
1
10,000
-
600,000
1,600,000
2,200,000
2,600,000
2,600,000
2,600,000
2,600,000
2,600,000
2,600,000
2,600,000
-
225
1
1,000
600
1
1,000
825
1
1,000
975
1
1,000
975
1
1,000
975
1
1,000
975
1
1,000
975
1
1,000
975
1
1,000
975
1
1,000
-
225,000
600,000
825,000
975,000
975,000
975,000
975,000
975,000
975,000
975,000
-
225
1
2,000
600
1
2,000
825
1
2,000
975
1
2,000
975
1
2,000
975
1
2,000
975
1
2,000
975
1
2,000
975
1
2,000
975
1
2,000
450,000
1,200,000
1,650,000
1,950,000
1,950,000
1,950,000
1,950,000
1,950,000
1,950,000
1,950,000
0
1
2,000
0
1
1,500
4
1
5,000
4
1
5,000
6
1
2,000
litres
4
times
1
TZS 10,000
bags
times
TZS
Sub-total
Harvesting (by hand)
Number of bags
Harvesting per year
Pay per bag
Year 6
65
-
Sub-total
Packing material
Bags needed/annum/acre
Harvesting per year
Price per bag
Year 5
65
-
Sub-total
Fungicides/Insecticides
Insecticides per acre
Insecticides need per year
Price per litre
Year 4
65
-
Sub-total
Weeding (Hand weeding)
People needed per acre
Weeding per year
Pay per person per day
Year 3
55
-
Sub-total
Spraying (by hand)
People needed per acre
Weeding per year
Pay per person per day
Year 2
40
-
Sub-total
Planting (by hand)
People needed per acre
Weeding per year
Pay per person per day
Year 1
15
-
Sub-total
Plants
Trees per acre
frequency per year
Price per tree
Year 0
0
bags
times
TZS
1
1,000
1
2,000
-
300,000
5
1
2,000
150,000
500
1
1,500
11,250,000
4
1
5,000
300,000
90
Appendix 7B Continued
Transportation (from field) by tractor
Bags produced p.a
bags
Tractor carrying capacity
bags
50
Trips to be made
trips
Fuel consumption per trip
litres
5
fuel price per litre
TZS 2,000
225
50
5
5
2,000
600
50
12
5
2,000
825
50
17
5
2,000
975
50
20
5
2,000
975
50
20
5
2,000
975
50
20
5
2,000
975
50
20
5
2,000
975
50
20
5
2,000
975
50
20
5
2,000
975
50
20
5
2,000
0
45,000
120,000
165,000
195,000
195,000
195,000
195,000
195,000
195,000
195,000
500
225
500
600
500
825
500
975
500
975
500
975
500
975
500
975
500
975
500
975
500
Sub-total
Bagging/Loading (by hand)
Bags produced p.a (100kg)
Price per bag
bags
TZS
Sub-total
-
112,500
300,000
412,500
487,500
487,500
487,500
487,500
487,500
487,500
487,500
Total cost
-
13,912,500
5,100,000
7,012,500
8,287,500
8,287,500
8,287,500
8,287,500
8,287,500
8,287,500
8,287,500
746,250
746,250
746,250
746,250
746,250
746,250
746,250
746,250
746,250
746,250
Fixed Costs
Salaries and wages
Repair and maintanance
Other overheads
Sub-total
-
746,250
746,250
746,250
746,250
746,250
746,250
746,250
746,250
746,250
746,250
Total costs
-
14,658,750
5,846,250
7,758,750
9,033,750
9,033,750
9,033,750
9,033,750
9,033,750
9,033,750
9,033,750
3
22500
1,500
3
60000
1,500
3
82500
1,500
3
97500
1,500
3
97500
1,500
3
97500
1,500
3
97500
1,500
3
97500
1,500
3
97500
1,500
3
97500
1,500
REVENUE
Number of kgs per tree
Annual production
Price/kg
kgs
kgs
TZS
3
0
1,500
Gross sales revenue
-
33,750,000
90,000,000
123,750,000
146,250,000
146,250,000
146,250,000
146,250,000
146,250,000
146,250,000
146,250,000
Net Sales
-
19,837,500
84,900,000
116,737,500
137,962,500
137,962,500
137,962,500
137,962,500
137,962,500
137,962,500
137,962,500
91
Appendix 7C
Capital Expenditure
COFFEE PRODUCTION
Expansion
Overhead Irrigation system
Coffee processing equipment
Pickups for staff
3-tons delivery Van
Qty Price (USD) Exc rate
1
25000
1500
1
33500
1500
2
14500
1500
1
12000
1500
TZS
37,500,000
50,250,000
43,500,000
18,000,000
149,250,000
Current
Irrigation system
Qty Price (USD) Exc rate
1
30000
1500
TZS
45,000,000
45,000,000
92
AN ALTERNATIVE SCENARIO ON THE SCHEDULE OF EXPANSION INCLUDING VALUE
ADDITION AND CAPITAL EXPENDITURE
93
ANNEX A: PROJECTED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FIGURES IN TZS '000'
FOR THE YEAR ENDED
REVENUE
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
Dairy Operations
111,895
167,843
278,619
487,582
877,648
Beans Operations
216,000
324,000
475,200
522,720
Horticulture Operations
875,700
963,270
1,059,597
1,165,557
94
YEAR 7
YEAR 8
YEAR 9
YEAR 10
965,413
1,061,955
1,168,150
1,284,965
1,413,462
574,992
632,491
695,740
765,314
841,846
926,030
1,282,112
1,410,324
1,551,356
1,706,492
1,877,141
2,064,855
Coffee Operations
337,500
371,250
408,375
449,213
494,134
543,547
597,902
657,692
723,461
795,807
Wheat Operations
1,500,000
1,575,000
1,653,750
1,736,438
1,823,259
1,914,422
2,010,143
2,110,651
2,216,183
2,326,992
Oil Seeds Operations
Seeds Multiplications
Operations
175,000
183,750
192,938
202,584
212,714
223,349
234,517
246,243
258,555
271,482
96,000
100,800
105,840
111,132
116,689
122,523
128,649
135,082
141,836
148,928
TOTAL REVENUE
3,312,095
3,685,913
4,174,319
4,675,225
5,381,548
5,812,069
6,280,262
6,789,622
7,343,987
7,947,556
Dairy Operations
67,137
100,706
167,171
292,549
526,589
579,248
637,173
700,890
770,979
848,077
Beans Operations
108,000
162,000
237,600
261,360
287,496
316,246
347,870
382,657
420,923
463,015
Horticulture Operations
656,775
722,453
794,698
874,168
961,584
1,057,743
1,163,517
1,279,869
1,407,856
1,548,641
Coffee Operations
236,250
259,875
285,863
314,449
345,894
380,483
418,531
460,384
506,423
557,065
Wheat Operations
1,125,000
1,181,250
1,240,313
1,302,328
1,367,445
1,435,817
1,507,608
1,582,988
1,662,137
1,745,244
Oil Seeds Operations
Seeds Multiplications
Operations
105,000
110,250
115,763
121,551
127,628
134,010
140,710
147,746
155,133
162,889
57,600
60,480
63,504
66,679
70,013
73,514
77,190
81,049
85,101
89,357
TOTAL OPERATING EXPENSES
2,355,762
2,597,014
2,904,910
3,233,083
3,686,649
3,977,059
4,292,598
4,635,583
5,008,552
5,414,288
PROFIT BEFORE TAXATION
956,333
1,088,899
1,269,408
1,442,142
1,694,899
1,835,010
1,987,664
2,154,040
2,335,435
2,533,268
OPERATING EXPENSES
95
ANNEX B: PROJECTED CONSOLIDATED BALANCE SHEET
FIGURES IN TZS '000'
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
YEAR 7
YEAR 8
YEAR 9
YEAR 10
13,996,686
13,996,686
13,996,686
13,996,686 13,996,686 13,996,686 13,996,686 13,996,686 13,996,686
13,996,686
Inventories
230,000
241,500
253,575
266,254
279,566
293,545
308,222
323,633
339,815
356,805
Trade & Other Receivables
80,000
86,400
93,312
100,777
108,839
117,546
126,950
137,106
148,074
159,920
Cash & Cash Equivalents
15,000
903,333
1,168,632
1,614,441
2,232,983
3,041,282
4,052,692
5,216,756
6,547,195
8,059,030
TOTAL ASSETS
14,321,686
15,227,919
15,512,205 15,978,158 16,618,075 17,449,059 18,484,550 19,674,181 21,031,770 22,572,442
Share Capital
360,000
360,000
360,000
360,000
360,000
360,000
360,000
Retained Earnings
956,333
2,045,232
3,314,640
4,756,782
6,451,681
8,286,691
10,274,355 12,428,395 14,763,830
17,297,098
Revaluation Reserve
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
4,316,333
5,405,232
6,674,640
8,116,782
9,811,681
11,646,691 13,634,355 15,788,395 18,123,830 20,657,098
New Loan Facility
6,800,000
6,044,400
5,288,800
4,533,200
3,777,600
3,022,000
2,266,400
1,510,800
755,200
Shareholders Funds
3,202,853
3,775,587
3,545,849
3,325,026
3,025,392
2,776,695
2,579,828
2,370,701
2,148,113
14,319,186
15,225,219
15,509,289
15,975,008 16,614,673 17,445,386 18,480,583 19,669,896 21,027,143
NON CURRENT ASSETS
Property, Plant & Equipment
CURRENT ASSETS
EQUITY & LIABILITIES
360,000
3,000,000
360,000
3,000,000
360,000
NON CURRENT LIABILITIES
96
0
1,910,346
22,567,444
CURRENT LIABILITIES
Trade & Other Payables
2,500
2,700
2,916
3,149
TOTAL EQUITY & LIABILITIES
14,321,686
15,227,919
15,512,205 15,978,157 16,618,074 17,449,059 18,484,550 19,674,181 21,031,770 22,572,442
97
3,401
3,673
3,967
4,285
4,627
4,998
ANNEX C: PROJECTED CONSOLIDATED CASH FLOW STATEMENT
FIGURES IN TZS '000'
FOR THE YEAR ENDED
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
YEAR 7
YEAR 8
YEAR 9
YEAR 10
CASH FLOW FROM
OPERATIONS
Opening Balance
Sales including receipts from
15,000
903,333
1,168,632
1,614,441
2,232,983
3,041,282
4,052,692
5,216,756
6,547,195
8,059,030
1
accounts receivables
3,312,095
3,685,913
4,174,319
4,675,225
5,318,548
5,812,069
6,280,262
6,789,622
7,343,987
7,947,556
5
Loan from Financers
6,800,000
0
0
0
0
0
0
0
0
0 6
10,127,095
4,589,246
5,342,951
6,289,666
7,551,531
8,853,351
10,332,954 12,006,378 13,891,182 16,006,586 6
OPERATING EXPENDITURE
2,355,762
2,597,014
2,904,910
3,233,083
3,686,649
3,977,059
4,292,598
4,635,583
5,008,552
5,414,288
3
Loan interest payments
68,000
68,000
68,000
68,000
68,000
68,000
68,000
68,000
68,000
68,000
6
755,600
755,600
755,600
755,600
755,600
755,600
755,600
755,200
6
Loan repayment
Purchase of Capital Items
0 755,600
6,800,000
0
9,223,762 3,420,614
CLOSING BALANCE
903,333
1,168,632
0
0
0
0
0
0
0
0 6
3,728,510
4,056,683
4,510,249
4,800,659
5,116,198
5,459,183
5,832,152
6,237,488
5
1,614,441
2,232,983
3,041,282
4,052,692
5,216,756
6,547,195
8,059,030
9,769,098
9
98
CAPITAL EXPENDITURE
DAIRY OPERATIONS
Expansion
QTY
PRICE
(USD)
EXC.
RATE
T.SHS.
Milk Processing plant
400,000
1,500 600,000,000
Reception/cooking and storage tank
30,000
1,500 45,000,000
Micro - diary module
20,000
1,500 30,000,000
4buffer tanks 500L each
30,000
1,500 45,000,000
Cooling equipment module alfa glas 1900.2Nos
100,000
1,500 150,000,000
Cold storage 18m3, 1No
48,000
1,500 72,000,000
1 Laboratory equipment
70,000
1,500 105,000,000
2 Tetra classsic junior, 800,1/2 litre packs. H2
40,000
1,500 60,000,000
Mild steel installation material
10,000
1,500 15,000,000
Electrical installation material
50,000
1,500 75,000,000
Yoghurt module machine
90,000
1,500 135,000,000
Technical Assistant 4 weeks
10,000
1,500 15,000,000
Total price/cost CIF Dar port
120,000
1,500 180,000,000
Add Contingencies 5%
6,000
1,500 9,000,000
Custom duty 10%
12,000
1,500 18,000,000
99
Insuarance inland 1.5%
1,800
1,500 2,700,000
Transport Dar-Kilimanjaro 1.5%
1,800
1,500 2,700,000
Milking Parlour
400,000
1,500 600,000,000
Total Mini Dairy, Plant machinery and Equipment
2,159,400,000
Constration of livestock sheds for zero grazing
170,000
<- 4 intergrated feedlot sheds for 300 cattles each looking at each other and
1 feedlot fitted with a milking parlour in btwn
Total expenditure (Expansion )
1,530 260,100,000
2,419,500,000
Current
Existing farmhouse
150,000,000
100
SHEDULE OF EXPANSION INCLUDING VALUE ADDITION AND CAPITAL EXPENDITURE
Dairy Operations Assumptions - Expansion
FIGURES IN TZS '000'
REVENUE
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
YEAR 7
YEAR 8
YEAR 9
YEAR 10
Milk
98,550
147,825
245,390
429,432
772,977
850,275
935,302
1,028,832
1,131,716
1,244,887
Cheese
5,133
7,700
12,781
22,367
40,261
44,287
48,715
53,587
58,946
64,840
Youghurt
8,212
12,318
20,448
35,784
64,411
70,852
77,937
85,731
94,304
103,734
TOTAL REVENUE
111,895
167,843
278,619
487,582
877,648
965,413
1,061,955
1,168,150
1,284,965
1,413,462
OPERATING
EXPENSES
67,137
100,706
167,171
292,549
526,589
579,248
637,173
700,890
770,979
848,077
PROFIT BEFORE TAX
44,758
67,137
111,447
195,033
351,059
386,165
424,782
467,260
513,986
565,385
101
CAPITAL EXPENDITURE
BEANS PRODUCTION
Expansion
QTY
PRICE
(USD)
EXC.
RATE
T.SHS.
Zero till hydraulic planter
1
150,000
1,500
225,000,000
Tractor (180 Hp)
1
110,000
1,500
165,000,000
Beans storage
1
25,000
1,500
37,500,000
Drying & Packing
1
20,000
1,500
30,000,000
25,000
1,500
37,500,000
Other Costs
Total expenditure (Expansion )
495,000,000
102
SHEDULE OF EXPANSION INCLUDING VALUE ADDITION AND CAPITAL EXPENDITURE
Beans Operations Assumptions –
Expansion
FIGURES IN TZS '000'
REVENUE
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
Beans
216,000
432,000
475,200
522,720
574,992
632,491
695,740
765,314
841,846
926,030
TOTAL REVENUE
216,000
324,000
475,200
522,720
574,992
632,491
695,740
765,314
841,846
926,030
OPERATING
EXPENSES
108,000
162,000
237,600
261,360
287,496
316,246
347,870
382,657
420,923
463,015
PROFIT BEFORE TAX
108,000
162,000
237,600
261,360
287,496
316,246
347,870
382,657
420,923
463,015
103
YEAR 7
YEAR 8
YEAR 9
YEAR 10
CAPITAL EXPENDITURE
HORTICULTURE PRODUCTION
PRICE
(USD)
EXC.
RATE
Water Dam Construction 400,000 Ltrs
1 100,000
1,500
150,000,000
Water pumping equipment
1 70,000
1,500
105,000,000
Grading and packing equipment
1 250,000
1,500
375,000,000
7 - tons refrigerated trucks
2 80,000
1,500
120,000,000
Expansion
QTY
T.SHS.
Drip irrigation 100 hect.
200,000
1,500
300,000,000
Cooling Facilities
200,000
1,500
300,000,000
1 50,000
1,500
75,000,000
45,000
1,500
67,500,000
Storage
Other Costs
Total expenditure (Expansion )
1,492,500,000
104
SHEDULE OF EXPANSION INCLUDING VALUE ADDITION AND CAPITAL EXPENDITURE
Horticulture Operations Assumptions - Expansion
FIGURES IN TZS '000'
REVENUE
YEAR 1
Horticulture
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
YEAR 7
YEAR 8
YEAR 9
875,700 963,270
1,059,597
1,165,557
1,282,112
1,410,324
1,551,356
1,706,492
1,877,141
2,064,855
TOTAL REVENUE
875,700 963,270
1,059,597
1,165,557
1,282,112
1,410,324
1,551,356
1,706,492
1,877,141
2,064,855
OPERATING
EXPENSES
656,775 722,453
794,698
874,168
961,584
1,057,743
1,163,517
1,279,869
1,407,856
1,548,641
PROFIT BEFORE TAX
218,925 240,818
264,899
291,389
320,528
352,581
387,839
426,623
469,285
516,214
105
YEAR 10
CAPITAL EXPENDITURE
COFFEE PRODUCTION
PRICE
(USD)
EXC.
RATE
T.SHS.
50,000
1,500
75,000,000
Coffee processing equipment
1 80,000
1,500
120,000,000
Packing Machine
1 25,000
1,500
37,500,000
3 - tons delivery Van
1 10,000
1,500
15,000,000
15,500
1,500
23,250,000
Expansion
Overhead Irrigation system
Other Costs
Total expenditure (Expansion )
QTY
270,750,000
106
SHEDULE OF EXPANSION INCLUDING VALUE ADDITION AND CAPITAL EXPENDITURE
Coffee Operations Assumptions - Expansion
FIGURES IN TZS '000'
REVENUE
YEAR 1
Coffee
337,500
TOTAL REVENUE
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
371,250
408,375
449,213
494,134
543,547
597,902
657,692
723,461
795,807
337,500
371,250
408,375
449,213
494,134
543,547
597,902
657,692
723,461
795,807
OPERATING
EXPENSES
236,250
259,875
285,863
314,449
345,894
380,483
418,531
460,384
506,423
557,065
PROFIT BEFORE TAX
101,250
111,375
122,513
134,764
148,240
163,064
179,371
197,308
217,038
238,742
107
YEAR 7
YEAR 8
YEAR 9
YEAR 10
CAPITAL EXPENDITURE
WHEAT PROCESSING
Expansion
QTY
PRICE
(USD)
EXC.
RATE
T.SHS.
Planter Hydrolic
1
120,000
1,500
180,000,000
Combine harvester
1
150,000
1,500
225,000,000
Harvesting Trucks
2
140,000
1,500
210,000,000
Trailers - 15 tons
2
30,000
1,500
45,000,000
150,000
1,500
225,000,000
Milling Plant, infratructure and storage
Packing Machine
1
25,000
1,500
37,500,000
Tractor (250-300 HP)
1
150,000
1,500
225,000,000
Forklift
1
30,000
1,500
45,000,000
Distribution Vans
2
60,000
1,500
90,000,000
60,000
1,500
90,000,000
Other Costs
Total expenditure (Expansion )
1,372,500,000
108
SHEDULE OF EXPANSION INCLUDING VALUE ADDITION AND CAPITAL
EXPENDITURE
Wheat Operations Assumptions - Expansion
FIGURES IN TZS '000'
REVENUE
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
YEAR 7
YEAR 8
YEAR 9
Wheat
1,500,000
1,575,000
1,653,750
1,736,438
1,823,259
1,914,422
2,010,143
2,110,651
2,216,183
2,326,992
TOTAL REVENUE
1,500,000
1,575,000
1,653,750
1,736,438
1,823,259
1,914,422
2,010,143
2,110,651
2,216,183
2,326,992
OPERATING
EXPENSES
1,125,000
1,181,250
1,240,313
1,302,328
1,367,445
1,435,817
1,507,608
1,582,988
1,662,137
1,745,244
PROFIT BEFORE TAX
375,000
393,750
413,438
434,109
455,815
478,606
502,536
527,663
554,046
581,748
109
YEAR 10
CAPITAL EXPENDITURE
OIL SEED PRODUCTION
Expansion
QTY
PRICE
(USD)
EXC.
RATE
T.SHS.
Oil processing Plant
1
160,000
1,500
240,000,000
Packing & Bottling
1
45,000
1,500
67,500,000
100,000
1,500
150,000,000
30,000
1,500
45,000,000
50,000
1,500
75,000,000
Storage
Distribution Van
Other Costs
Total expenditure (Expansion)
1
577,500,000
110
SHEDULE OF EXPANSION INCLUDING VALUE ADDITION AND CAPITAL
EXPENDITURE
Oil Seeds operations Assumptions –
Expansion
FIGURES IN TZS '000'
REVENUE
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
Oil Seeds
175,000
183,750
192,938
202,584
212,714
223,349
234,517
246,243
258,555
271,482
TOTAL REVENUE
175,000
183,750
192,938
202,584
212,714
223,349
234,517
246,243
258,555
271,482
OPERATING
EXPENSES
105,000
110,250
115,763
121,551
127,628
134,010
140,710
147,746
155,133
162,889
PROFIT BEFORE TAX
70,000
73,500
77,175
81,034
85,085
89,340
93,807
98,497
103,422
108,593
111
YEAR 7
YEAR 8
YEAR 9
YEAR 10
CAPITAL EXPENDITURE
SEEDS MULTIPLICATIONS
EXC.
RATE
T.SHS.
1 20,000
1,500
30,000,000
Packing Facilities
40,000
1,500
60,000,000
Storage
20,000
1,500
30,000,000
Distribution Van
1 30,000
1,500
45,000,000
Forklift
1 30,000
1,500
45,000,000
10,000
1,500
15,000,000
Expansion
Grading & Sorting Equipment
Other Costs
Total expenditure (Expansion)
QTY
PRICE
(USD)
225,000,000
112
SHEDULE OF EXPANSION INCLUDING VALUE ADDITION AND CAPITAL
EXPENDITURE
Seeds Multiplication operations Assumptions - Expansion
FIGURES IN TZS '000'
REVENUE
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
YEAR 7
YEAR 8
YEAR 9
YEAR 10
Seed Multiplications
96,000
100,800
105,840
111,132
116,689
122,523
128,649
135,082
141,836
148,928
TOTAL REVENUE
96,000
100,800
105,840
111,132
116,689
122,523
128,649
135,082
141,836
148,928
OPERATING
EXPENSES
57,600
60,480
63,504
66,679
70,013
73,514
77,190
81,049
85,101
89,357
PROFIT BEFORE TAX
38,400
40,320
42,336
44,453
46,675
49,009
51,460
54,033
56,734
59,571
113
114
ANNEX B: PROJECTED CONSOLIDATED BALANCE SHEET
FIGURES IN TZS '000'
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
YEAR 7
YEAR 8
YEAR 9
YEAR 10
13,996,686
13,996,686
13,996,686
13,996,686 13,996,686 13,996,686 13,996,686 13,996,686 13,996,686
13,996,686
Inventories
230,000
241,500
253,575
266,254
279,566
293,545
308,222
323,633
339,815
356,805
Trade & Other Receivables
80,000
86,400
93,312
100,777
108,839
117,546
126,950
137,106
148,074
159,920
Cash & Cash Equivalents
15,000
903,333
1,168,632
1,614,441
2,232,983
3,041,282
4,052,692
5,216,756
6,547,195
8,059,030
TOTAL ASSETS
14,321,686
15,227,919
15,512,205 15,978,158 16,618,075 17,449,059 18,484,550 19,674,181 21,031,770 22,572,442
Share Capital
360,000
360,000
360,000
360,000
360,000
360,000
360,000
Retained Earnings
956,333
2,045,232
3,314,640
4,756,782
6,451,681
8,286,691
10,274,355 12,428,395 14,763,830
17,297,098
Revaluation Reserve
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
4,316,333
5,405,232
6,674,640
8,116,782
9,811,681
11,646,691 13,634,355 15,788,395 18,123,830 20,657,098
6,800,000
6,044,400
5,288,800
4,533,200
3,777,600
3,022,000
NON CURRENT ASSETS
Property, Plant & Equipment
CURRENT ASSETS
EQUITY & LIABILITIES
360,000
3,000,000
360,000
3,000,000
360,000
NON CURRENT LIABILITIES
New Loan Facility
115
2,266,400
1,510,800
755,200
0
Shareholders Funds
3,202,853
3,775,587
3,545,849
3,325,026
3,025,392
2,776,695
2,579,828
2,370,701
2,148,113
1,910,346
14,319,186
15,225,219
15,509,289
15,975,008 16,614,673 17,445,386 18,480,583 19,669,896 21,027,143
22,567,444
Trade & Other Payables
2,500
2,700
2,916
3,149
4,998
TOTAL EQUITY & LIABILITIES
14,321,686
15,227,919
15,512,205 15,978,157 16,618,074 17,449,059 18,484,550 19,674,181 21,031,770 22,572,442
CURRENT LIABILITIES
116
3,401
3,673
3,967
4,285
4,627