A highly experienced team of specialists is looking for investor to establish a new agricultural company in the East of Ukraine. The business model that will be employed has already proven itself in practice. Products to be produced: Wheat, Sunflower, Corn. Payback: 2.5 years. ROI: 35-40% a year.
The region where we plan to start a company has 1.2 million hectares of agricultural land. The biggest company in the region has 150 000 ha; There are two or three more companies with land bank around 10 000 ha, and the rest of the land is cut in small agricultural firms with land from 100 ha to 3000 ha. Normally, the last ones have outdated machinery, old technology and bad access to financing which makes them low-efficient (4-10%).
The demand for the crops is always high because Ukraine has developed infrastructure of sea ports and huge demand for crops from middle-east countries. To sum up, there is always somebody who will buy crops at a pretty good price. At this terms producers are not fighting for buyers (Ukrainian agricultural sector has a large room for development).
The price for ton of wheat is fluctuating in pretty much same price corridor from year to year (same situation with corn and sunflower). The key moment in here is that most companies’ Gross profit/Total expenditures = 4 to 10%.
Please see the full project description in the presentation attached.
Our competitive advantage:
Our team has experience of organizing production with efficiency of 35-40%.
Can our success be repeated by your competitors?
Theoretically yes. Practically, the chances are quite low because they may not have necessary experience.
The business opportunity we are looking at consists of the following components:
1) A lot of small inefficient companies with obsolete machinery, technology and generally outdated approach to business
2) Highly experienced team of specialists with the experience of building highly efficient company on the basis of several small ones.
3) The land price is one of the cheapest in the world (Ukraine = around $300-500; Poland = $1500-5000), the fertility of the land is one of the highest in the world.
4) The land price will soar once the land market will be opened in Ukraine.
5) The demand for crops is always high and it only will be growing in the world.
Our team has experience of building the company using the same scenario, as a result the company grew in one of the biggest in Ukraine and attracted around $60m through IPO on Warsaw, Chicago and London Stock exchanges.
We will disclose the name of that company and the names of the team members on later stages of project negotiations with investor.
See the last slide of presentation attached.
We are looking for equity investor whom we are offering 70% share of the new company.
We expect the project payback period to be 2.5 years.
We will be equally glad to find investor who prefers to be passive to the production process as well as the one who wants to know every little detail and to monitor every step by himself. We believe that we will be able to find common language with all types of investors.
Our specialists employ full transparency in relationship with investor and are ready to accept any steps an investor may consider necessary to be convinced.