- Country: South Africa
- Industry: Agriculture
- Stage: Expansion/Growth
- Years in operations: 2, Employees: 6
- Investment size: $4,000,000 / min. $2,000,000
- ROI: 80% in 5 years
- Type of investment: Debt, Equity
Our Chicken Farm needs an investment to expand the business due to new contracts sourced. We need to purchase land and set up environmentally controlled broiler houses.
We have been awarded a contract for 35000 broiler chickens per week and another contract for 10 000 broilers per week. These are starter contracts and have the ability to grow to such an extent that the clients will purchase whatever amount of chickens we can produce.
We have been negotiating these contracts for the past 2 years and the only obstacle in our road to success is the financing of the operation. Unfortunately, the government in South Africa will not invest in white farmers due to the whole apartheid scenario and thus we have to source funding from private investors. The broiler industry in South Africa is under severe pressure as the demand exceeds the supply. Currently, the country imports chicken meat from foreign countries.
We need ZAR 40 000 000.00 to purchase land and erect a minimum of 6 environmentally controlled broiler houses as well as our own abbatoir to ensure that our product are of the highest quality and that production and quality are not affected by third parties. There is also the possibility of starting our own hatchery and this will assist us in the future to be less reliant on other companies.
All staff will be fully trained by Dicla Trading, a company specialising in training staff for the broiler industry and this will also assist the company in employing professionally trained staff that know how to do their job from start to finish the right way the first time, instead of employing staff that have "experience" in the industry that might have a negative effect on production.
There already are many companies growing broiler chickens in RSA but the advantage we have is that we will be supplying broilers at a smaller size than the norm. This reduces the growing rate of the chickens by 2 weeks thus growing chickens for 4 weeks instead of the norm of 6 weeks (spring chickens).
We are not in competition with the other growers in the country but will merely supplement the current shortage. The RSA government is also reducing the import of poultry to assist the local market to grow but unfortunately due to corruption in our beautiful country money is spend on infrastructure and other costs but some of these projects are never really operational.
We are focused on the task at hand and we have located the shortage in the market and we are fully committed to make this a success as if we do get the funding we know that we have only one chance of making this a success. We do not have the luxury of obtaining money from government only to fail and ask for more money just to fail again because we got money easily the other two times.
Rationale for the deal
Our market are for the 900gram to 1.1kg chickens that are normally sold in retail outlets as well as in restaurants. This market is focused on the normal smaller South African individual or family that will only buy this size chicken due to their family size. Most South African households consist of 4 or less people and this size chicken is ideal for them.
We have successfully raised broiler chickens on small scale for the past year in order to have a product to show as part of the application for the above mentioned contracts. This is our passion and our future and we are also encouraging not only our children but also other South African youth to become farmers as the amount of farmers in 1994 which amounted to over 200 000 have dropped in 2014 to just a little over 33000. We are focused on job creation, raising chickens in an humane and professional manner and to supply the country with the best possible product.
Use of financing
The funding will be implemented to:
1. Purchase the land needed for the farm
2. Train all staff before any operation even commences
3. Set up the environmentally controlled houses as well as the abbatoir and other infrastructure
4. Make provision for the first 3 months expenses of rearing the chickens which include day old chicks, feed, labour, abbatoir costs, transport costs, packaging costs etc.
5. Purchase refrigerated trucks for the transport of the products as well as other vehicles needed for the day to day running of the farm
Opportunity for the investor
The full investment amounts to ZAR 40 000 000.00.
We are prepared to give 30% of the company as equity.
The investment will be repaid within 5 years but we however request a 5month payment holiday in order for staff training as well as the setup of the infrastructure.
We welcome a hands on or silent investor. We will also negotiate to give 20% equity in the company to the primary investor and the remaining 10% to secondary investors.
We are also of the opinion that should we be able to secure funding and actually start production ,that the RSA government will realise the opportunity as well as the amounts of jobs created and will than assist us with funding should we require any for further growth or to assist in repaying the loan of quicker.
Please feel free to request any documentation needed or to ask any question as we are more than thankful just to be able to raise this opportunity. Should an investor however request any documentation or further details we do request that an Non disclosure agreement be signed as stated above we have worked hard for more than 2 years to secure this deal and we just can not risk any chance of losing it.
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