AFRICAN AGRICULTURE FUND 1

A Changing Tides Group Initiative

THE CHANGING TIDES: “AFRICA AGRICULTURE FUND”

 Strategic Vision

Executive Summary as presented by: Martin Hall, President & Chairman

An Initiative by the Changing Tides Group: www.thechangingtides.com

Why Africa
Changing Tides is an Expert in Human Social Impact and have decided to invest in AFRICA

Changing Tides, together with our strategic partners, wants to create an international
sustainable model and at the same time to achieve a development which will be a trigger for:

− Environment friendly economic, industrial and social development

− Skills development, Education and Job creation for the region

− Promotion of human capital

− Creating wealth for the country and its citizens

 Strategic Vision

• The people of Africa are increasingly becoming more vulnerable and are facing food
insecurity and malnutrition on a daily basis. Three quarters of the world’s poor people
live in rural areas of developing countries. Despite the diversity and complexity of the
livelihoods of the rural poor, the majority of rural households depend mostly on
agriculture and agriculture-related industries and services.

• It is therefore clear that agricultural growth can have powerful leverage effects on the
economy as a whole, especially in the early stages of economic transformation when it
accounts for large shares of national income, employment and exports. Furthermore,
agricultural growth can generate patterns of development which are employment
intensive – hence favorable for the poor and Economic growth. Especially the effects of
broad-based agricultural growth on non-agricultural sectors qualify agriculture as the
“engine of growth” of areas in all stages of development.

• Therefore the intent is submitted by the Changing Tides Group to develop an intensive
farming projects in AFRICA by concentrating on high-value Crop and product by starting
to develop 180 000 Ha of Maize, 300 000 Ha of Wheat and vegetable production 150 000
Ha in phase 1. This will be grown over time to also round off 110 000 Ha within the next two
to three years. It is anticipated that those mega farms will not alone be the solution to the
food-insecurity challenge, but it could provide a template which can be replicated
elsewhere in the AFRICA and on a number of other occasions and that, combined, with
a network of farms will be able to make a meaningful difference to the currently
structurally embedded and persistent food crisis and the economic growth of the
AFRICA. Production will be done according to full commercial agriculture principles.
 Strategic Vision

• Changing Tides & African Partner’s are both diversified and integrated business
companies with activities spanning agribusiness, food and processing, financial and
alternative energy with an unwavering desire for a meaningful contribution in the African
economy. We operate a highly entrepreneurial business model underpinned by African
federal approach and decentralized management structure that actively encourages
acquisition, nurturing and empowering of local teams to grow all divisions/units and strive
to maximize the synergies between them. Our JV is structured onto four key strategic
pillars comprising:

 Agribusiness
 Food and Industrial Processing
 Renewable Energy
 Financial Services (Together with our Financial equity Partners)
Our focus is therefore centered on generating cash in the communally-owned agricultural
assets to grow the food and industrial processing, financial services and Renewable Energy
operations, while continuously taking advantage of attractive opportunities that help
deepen our involvement in the agribusiness value chain. We operate in untapped and
growing markets, with considerable potential for expansion into allied services and similar
new geographies. Our JV Group will focus on agriculture and agribusiness activities
encompass the following:
 focusing on primary agriculture crop production between the field and farm-gate
 provisioning of input supplies and products for agricultural crop production;
 Strategic Vision

offering well-positioned grain logistics, handling, storage, procurement, marketing

and trading– links between communal smallholder farm gate and grain off-taker;
ensuring a complete integrated solution for the communal smallholder producer
and grain off-taker to enhance market access and pricing solutions; and ensuring
smooth and efficient flows and value-chain processes of grains from farm-to-fork.

• Our aim is to unleash unprecedented investments in agribusiness and agro-processing

sector through the establishment of communal smallholder farming hubs and rural
Agri-parks by creating integrated agribusiness value-chains and agriculture
commodity production models in rural areas
.
• By doing such a Constructive Agricultural project in AFRICA, there is an option to
alleviate rural poverty through agricultural development and that in today’s globalized
economy, agricultural development should focus on high value commodities and
value added processing rather than food staples production.
• This will contribute to the most important economic mechanisms for reducing poverty by:
 Income redistribution
 Economic growth/Development
 Access global economic opportunities
 Participation in world food Security programs
Make a contribution towards the restoration of the natural capital base of the focus
area through the improvement and expansion of the environmental and conservation
initiatives
 Strategic Vision

 Make a contribution towards ensuring food, water, energy and income security
ECONOMIC OBJECTIVES:
 Improving the quality of life of the population in the area, Province and Country
 Growing the economy of the Area, local Government and Country
 Attaining regional integration
 Improving the institutional efficiency and effectiveness of all role players
Various skilled experts will be commissioned to drive the project and produce the projected
production and financial returns.
• The profits produced in each year will be reinvested in further cultivation, building up to
250 000 -500 000 Ha over the next 5 – 10 years. Attention will be paid to the management
structure, the level of expertise to be deployed and the research that will be conducted
in the area. The baseline for the feasibility studies and the business plan will then be
defined in terms of what crops should be produced, what it will cost to produce these
crops, what income can be expected and what the profits could be. The profits will be
reinvested for growth and expansion as well as ensuring an equitable income for all
Participants.

• There are only a few Areas in AFRICA that have sufficient and open area to support the
size of the envisaged development. AFRICA has vast and untapped natural resources
that can support the development of Agriculture, Energy, fishing and tourism. Of the
options, AFRICA and the specific Countries has been selected for a number of reasons:
*Land Availability
*Stability
*Climate suitability;
 Strategic Vision

*Reasonable infrastructure.
*Available land for future development
*Availability of local employable work force

• Major new Infrastructure development will be done:

– a) Grain Storage
– b) Water distribution
– c) Electricity generation and distribution
– d) Infrastructure facilities for
• Training Centre
• Community center
• Clinic
• Stores for all input products

• The Final Business plan will show in detail how the new farm and surroundings will be
developed and changed into a profit making entity over the next coming years.
• The first year will mainly be to plant 20 000 ha’s and used to uplift the Infrastructure in
the Area and to install new infrastructure on the farms and to bring the farms to normal
standards.
 Strategic Vision

• The JV Group will make some hectares available to local small scale farmers. Knowledge
and information are essential for people to respond successfully to the opportunities and
challenges of social, economic and technological changes. As mentors, the JV Group
will assist these farmers and make them part of the total project to benefit from the new
opportunities that will be unlocked by this investment.

• The JV Group will be the implementation agent for the project and take full responsibility
for all aspects of the planning, implementation and growth of the initiative over the next
years, through the use of a proven business model, the Group can deliver acceptable
to high returns for all participants and shareholders in a growth market where food
security and sustainable income generation will become increasingly important.

• A fully-fledged Program/Project Management Office resourced with a Project Director,

Project Managers, a Procurement Manager and a Financial Account will be
established and tasked with providing technical-, agriculture farming-, and operational
expertise to the localized empowered and self- directed production teams.

• Herein below our proposed management structure:

 Strategic Vision

• Management Structure

*Our JV Company is managed and led by its four Executive Directors together with two
funding executive members who will be involved in various capacities in the organization
both at the Board and Executive Committee (EXCO) levels. Our Group will also appoint a
Credible Financial Institution who will Financial Officer, and will be part of the Board and
EXCO team. Our preferred Financier will be sourced and appointed to fulfill the role
Private Investment Partner, effectively and will form part as the implementing agent, and
will be tasked with day-to-day operational management of the AFRICAN AGRICUTLURE
HUB. A fully-fledged Program/Project Management Office resourced with a Project
Director, Project Managers, a Procurement Manager and a Financial Account will be
established and tasked with providing technical agriculture farming operational
expertise to the localized empowered and self-directed production teams.

*Our fully integrated approach to managing and operating our business will allow us to
prioritize investments where the essential components exist (i.e. good soil, suitable
climate, access to water and land) and where local communal smallholder farming
practices can easily link with commercial agriculture to generate good solid investment
returns. It helps drive sustainability, viability and profitability by ensuring a complete and
comprehensive end-to-end value chain linkage- between the point of origination at
the farm-gate, handling and distribution, and the processor.
 Approach

Farm Operating Structure

By focusing on a feedstock acquisition process, our JV Group will be expedite and

rapidly advance the lead generation activities. Our appointed service provide which
will in essence at as the implementation technical partner tasked with managing and
coordinating of all African Agri-Park’s operations through the PMO structure

Mission and Vision of the JV Group

Our mission is to implement an integrated Agricultural development Program and

Project based on sound economic and business principles that will guarantee the
sustainable growth of the competencies, wealth and confidence of the whole
Agricultural sector in AFRICA by creating systems that will stimulate local economic
development, enhance management capacity, improve education and training and
provide access to economic Development and Growth.
 Approach

We will also Strive to economically empower, disadvantaged individuals, groups

and legal entities in the primary agricultural sector in AFRICA. This is in order to
establish a vibrant and viable core of commercial farmers contributing
to the respective Area, Regional and National economies. The initial target is the
highest Potential Areas with a higher than market related return on investment for all
role players over the medium to long term.

Mechanism

i. Engaging with all role players and communities to strengthen innovation capacity and
knowledge generation
ii. Increasing productivity and enhancing sustainable natural resource use and
management
iii. Conducting risk analyses and designing coping strategies for mitigating against
climate variability and change, and associated crop-animal-human health
epidemics
 Approach

iv. Exploiting potential of Crop Production and indigenous vegetables for food security and
nutrition
v. Strengthening leadership, management and cross-cutting professional skills
vi. Liaison with Government (Dept of Rural Development and Agriculture) and
Local Representatives, in order to obtain approval to assist in broad based
Agricultural within the respective Area, Province and Countries.

• Always follow Principles of Sustainable Agriculture by using the following quality systems:

i. Commitment:
• A total commitment from management to all role players must be adopted to implement a
successful quality system.
ii. Organization
• An organizational structure must be implemented to create functional responsibility for each
task.
iii. Training & Skills Development
• Relevant training must be provided for local personnel carrying out the tasks at the
critical stages affecting quality or safety of the product
 Approach

iv. Controlling the production

• “A chain is only as strong as its weakest link”. The whole process of production
should are analyzed and critical stages affecting quality and safety identified. The
Chemical protocol provides all the relevant critical points that need to be
considered in production. Action requirements must be developed for each of the
identified critical stages.
v. Inspection and testing
• Critical stages in the production, packing and shipping of fruit should be monitored using
relevant measuring equipment. Equipment such as temperature loggers should be
routinely calibrated to recognized standards. Records of calibrations must be kept.
vi. Documentation and quality records
• Documentation of all aspects dealing with critical stages (outlined in the Chemical
protocol) in quality and safety control must be kept for auditing purposes.
vii. Traceability
• The finished product must be clearly identified. It must be traceable so that product
recalls can be readily facilitated if required.
viii. Safety

• A properly implemented Chemical protocol is a recognized means of exerting due Diligence.

 Approach

Skills Development and Training

• Skills transfer to beneficiaries over the total contract period -

• Training opportunities for participants on a continuous basis in order to enable skills
transfer and improve skills to attain independence and function as commercial
farmers.

Start Up
• After an Investigation on Crop Profit margins the following has been decided for Funding
Requirements

Vehicles and infrastructure 14.500.000 USD

Inputs (seed, fertilizer, chemicals, labor) 178.000.000 USD
Mechanization services 60.000.000 USD

TOTAL INVESTMENT: 252 500 000, 00 USD

 Approach

• The above funding requirement will be sufficient to cultivate 180 000 Hectares of maize
and 300 000 hectares of Wheat. The input finance requirement includes multi - peril risk
insurance so as to safeguard the investment.

• In order to establish a core beef unit of 60 000 animals, the

following will be required: Infrastructure and equipment

30.400.000 USD
Animal purchases 28.000.000 USD
Working capital 10.880.000 USD

Investment Required: 69 280 000 USD

• The above amount excludes an abattoir/processing plants as critical mass of at least

a 100 animals per day/per plant for slaughter has to be reached before investment
can be made. Estimated cost of abattoirs is 54.000.000 USD
 Industrial Analyze

The investment required for the vegetables are:

Infrastructure 21.760.000 USD

Working capital 21.760.000 USD

Investment 43.520.000 USD

Total investment (cash crops, cattle and vegetables) = 419.300.000 USD and can be broken
down in faces, but does not include Land

Risk Assessment – will be dealt with in detail in the Business Plan

 Industrial Analyze

The following mitigation strategies are employed by our JV Group

i. Production and price risk of the specific farm and enterprises

ii. Financial risk
iii. Climatologically risk
iv. Legal
v. Risk Management

• Market/Marketing Strategy – will be dealt with in full in the Business Plan

• Agriculture as an industry is a significant contributor to the African economy and is critical

to the socio-economic development in the rural areas. It is estimated that approximately
12% of the Africa’s land is deemed suitable for agricultural production, with only 22% of
this land is regarded as high potential arable land and the sector contributing around
2.6% and 3% to the GDP and represents about 7% of formal employment. Africa has a
dual agricultural economy, with both well-developed commercial farming and smaller-
scale communal farming based production in the former homeland areas, and is a net
exporter.
 Industrial Analyze

• In terms of the real value added by the agricultural sector, there was an increase to 5%
in 2013 from to the 3% registered in 2012 and resulting in an increase of 5.8% in the real
net farming income with maize and soy beans contributing 49% and 5%, respectively.

• Our JV Group will initially market and produce to target processors and off-takers
based on the commercial arrangements between the Company and Countries. We
can also start a marketing program with a potential Financial Equity JV partner. The
Company is further in discussions with the AFRICAN Ministers of Agriculture, Forestry and
Fisheries with a view to acquire lands.

• The Company will embark on aggressive marketing and advertising campaigns drive to
further market itself. The strategies to be deployed will include the promotion of its
products on local print media and radio shows, through the sponsoring of events and
participating in exhibitions, and also engaging also engaging in prominent public forums
and industry-specific platforms to ensure brand visibility in the agribusiness space
 Summary

• Agriculture must respond to the challenge of feeding 6 billion people, while protecting
the environment and taking care of rural societies. It will be necessary to:

Eradicate hunger and ensure food security; global food needs will be three times higher in
2030 than they are nowadays. Some production factors can be increased, for example
ploughing out more land (like the cerrados in Brazil), improving the access to scientific and
technological progress (for instance, agro biotechnology), more research and development.

 Protect the environment and mitigate the impact of human activities on the environment.
The threats are known: Stalinization of soils; increase in sea levels and catastrophic floods;
desertification; loss of tropical forests and of the associated biological diversity,
overexploitation of farmland and pastures; water scarcity; urbanization and large-scale
engineering works.

Agriculture will remain the primary sector to explore for opportunities for sustainable
economic development, creating jobs, generate income and change the lives of the
local in-country people. Our goals of the project are therefore to launch an intensive
agriculture project, improving agricultural productivity through organized decent work
and imparting skills thereby promoting diversification, improving livelihoods and further
ensuring national food security.
 Conclusion

Changing Tides Group

“Helping to build the Africa of the Future”

Compliant Funding and Economic

Protected Investors’ Development
Capital

Pool of Social Mix

Industrial Process

Environmental and Sustainable Development

 Conclusion

CONTACT US:
Martin Hall: President & Chairman of Board
martin@thechangingtides.com
www.thechangingtides.com