MULUNGUSHI UNIVERSITY

SCHOOL OF AGRICULTURE & NATURAL RESOURCES

INSTITUTE OF DISTANCE EDUCATION

STUDENT NUMBER: 201303697

STUDENT NAME: ANDREW CHEELO HIMUUNZA

PROGRAM: BSc. AGRICULTURAL BUSINESS MANAGEMENT IV

COURSE CODE: AGB 411

COURSE NAME: AGRICULTURAL ENTREPRENEURSHIP

LECTURER: MR. E.M. SYAMPAKO

CONTACT DETAILS

C/O ANDREW CHEELO HIMUUNZA,

MINISTRY OF AGRICULTURE, P.O BOX 950006,
MITETE

EMAIL: himuz.c88@gmail.com

PHONE CONTACT NUMBER: 0955561055/0965561055/0979001494

BUSINESS NAME: HIMUUNZA & SONS AGRO SOLUTIONS COMPANY LTD.

TITLE: CEEC MATCHING GRANT BUSINESS PLAN

CONTACT DETAILS: C/O ANDREW CHEELO HIMUUNZA,

P.O BOX 95006,

MITETE.

MOBILE NUMBER: 0955561055

Email address: himuz.c88@gmail.com

KEY PERSON: MR. ANDREW CHEELO HIMUUNZA

PHONE NUMBER :0955561055

PROJECT TITLE: TOMATO PROCESSING PLANT

Source: Zambia Daily Mail, Picture of tomato laying wasted at Lusaka’s Soweto Market
2. TABLE OF CONTENT
2.0 EXECUTIVE SUMMARY
 ORGANIZATION (BACKGROUND)
 INDUSTRY SITUATION
 VISION&MISSION STATEMENTS
 OBJECTIVES
 PROBLEM STATEMENT
 SOLUTION STATEMENT
 BUSINESS/PROJECT OVERVIEW
 INCOME SOURCE
3.0 MARKETING PLAN
 TARGET MARKET
 COMPETITION ANALYSIS
 MARKET SIZE AND GROWTH PATTERNS
 PROJECTED MARKET SHARE
 TRENDS IN DEMAND
 TRENDS IN SUPPLY
 PRICING
 PROMOTION AND PUBLICITY
4.0 OPERATIONAL PLAN/MANAGEMENT STYLE
 MANAGEMENT TEAM
 RECRUITMENT/ STAFFING PLANS
 PHASING
 BUDGET
5.0 FINANCIAL PLAN
 CASH FLOW PROJECTION
 FINANCIAL STATEMENT
6.0 PROPOSED VENTURE
 PURPOSE, TENURE AND AMOUNT
 DRAWDOWN PLAN
 REPAYMENT PLAN
 PROPOSED REPAYMENT ASSURANCE

7.0 RESULTS
 PROFITABILITY
 SUSTAINABILITY
 SOCIO-ECONOMIC IMPACT
8.0 MAIN BUYERS AND SUPPLIERS
 KEY SUCCESS FACTORS
 ENVIRONMENTAL CONCERNS
9.0 RISKS, CHALLENGES AND ASSUMPTIONS
10.0 ANNEXES:
(i) CERTIFICATE OF REGISTRATION/LEGAL PERSONALITY
(ii) A LETTER FROM INDUNA SILAO(AREA)
(iii) TESTIMONIAL
2.0 EXECUTIVE SUMMARY

Our organization was established in 1975, it stated as a family farm business, later in 1995 it got
registered under the company act. The farm practiced mixed farming which is the rearing of
livestock and growing of crops. Currently we have concentrated our production from traditional
crops such as maize, sorghum, groundnuts to high value horticultural crops such as citrus fruits,
vegetable production and processing. The business is being managed by a steering committee of
different expertise in the Agricultural sector such Agribusiness Specialists, Agronomists, Land
Husbandry Technicians and other Agricultural fields etc. The directors are the shareholders that
are mostly family members.

The Mission of our organization is to establish a Multinational Agribusiness Firm that offers
solutions to the impending agricultural problems, our Vision is to become a leading Agricultural
Consultancy and Agribusiness Solution by 2030 in Southern Africa. The main objective of this
business proposal is to offer lasting solutions to problems faced by tomato producers in Zambia of
price volatility. The solution to the aforementioned challenge is to establish a processing plant that
will take into account all produced tomatoes and create a stable sustainable market for tomato.

The current situation, tomato producers incurred post-harvest loses due to the perishability of
tomato crop, when the quantity supplied is higher than the quantity demanded. Once harvested,
tomato has to be disposed of, because of its short shelf life, farmers tend are left without a choice
but to sale their products at any prevailing market price. Tomato prices are such volatile to an
extent that farmers are left without any alternative, especially during peak production periods, the
prices can be as low as K15.00/Crate. The trend has been that prices of tomato are usually at their
highest from December to March and they range from K300 to K400/crate (Zambia Daily Mail
Ltd, 2018). These prices are not stable and are subject to instant changes depending on the demand
and supply of the commodity.

The solution to this above mentioned problem is to establish a tomato processing plant which will
be able to absorb the produced tomato at prearranged prices and quality of produce. The processing
plant will be able to stabilize the volatile tomato prices and increase the longevity of tomato shelf
life by processing the commodity into preserve able forms such as tomato paste, tomato juicy,
tomato source etc. Currently there are no known tomato processors in Zambia, therefore, our firm
will be the first of its kind and we would like to create a stable and sustainable market for tomato
producers.

The project intends to source for funds from the Citizen Economic Empowerment Commission
(CEEC). The loan will be used to construct and establish an ultra-modern processing plant to be
situated at the Lusaka South Multi Economic Facility Zone. The plant is likely to create over 300
direct jobs and about 15000 indirect jobs – which include smallholder out grower farmers.
2.1.0 ORGANIZATION

Background

Himuunza Agro Consultancy Company Ltd was established in 1975 as a family farm. It was
registered in 1996 under the registrar of companies. The business located at a family farm in
Mazabuka district. The farm is situated specifically in Magoye area, about 20 km from Mazabuka
central business district.

The organization structure of company

CEO

FAMILY MEMBER

HUMAN
RESOURCE CAMPANY TREASURER
QUALIFIED HR QUALIFIED ACCOUNTAT

ACCOUNTANT
CLERK
QUALIFIED ACCOUNTANT

AGRIBUSINESS BUSINESS DEVELOPMENT

PROCUREMENT AGRONOMIST
SPECIALIST EXPERT
QUALIFIED PROCEMENT
AGRIBUSINESS QUALIFIED
PERSONNEL NON FAMILY NON FAMILY MEMBER NON FAMILY MEMBER CROP SCIENTIST NON FAMILY MEMBER
MEMBER

Research &
Quality control Development Unit Field Production

supervisor Supervisor supervisor

 The roles of the Chief Executive officer (CEO) is to take a figurehead position in the company.
To operationalize the mission and vision of the organization through leading, motivating,
allocation of resources and planning.

The family trustees are there to ensure that the interest of family members is taken into
consideration in decision making. The family has the majority shares in this business,
therefore, the trustee is acts as the second vote to decision making.

The company treasurer is responsible for organizing books of accounts and financial reports,
he reports to CEO and other directors. Approvals of Contracts, payments and other
expenditures are prepared by the company treasurer and accounts.

The positions below are technical in nature, they are specific and require individuals with
certain skills and abilities i.e. Agribusiness specialist, Agronomist, Procurement and Business
Development Expert etc.

2.2 .0 INDUSTRY SITUATION

2.2.1 Production outlook

Tomato processing is not exploited in Zambia despite the witnessed increase in production.
Production of tomato has increased in recent past because an increase in the number of actors in
the production of the crop. Most production areas are around the urban peri-throws of Lusaka,
Kabwe, Kapiri Mposhi, Mkushi, Serenje and other areas around the railway and agricultural
dominated districts such Mumbwa, Choma, Monze, Itezhi Tezhi to mention but a few. The tomato
industry is predominantly smallholder dominated. These are producers who grow tomato at a small
scale with area cultivated ranging from 0.5 – 5 ha.

Trends in tomato production determine the time of high supply and demand for tomato. Most
farmers prefer to grow tomato during the dry season because in the rainy season, the prevalent rate
of fungal diseases is high. Therefore, pests and diseases adversely affect production in the rainy
season compared to dry season. But this comes at a huge cost, because farmers off-load their
tomato on the market almost at the same period. This trend causes excess supply of the commodity
leading to a price drop. Prices are at their highest during the rainy season because of low
production. this low production is caused by the increase in the number of diseases and pests that
attack tomatoes. Most farmers are avoiding production costs, which are mainly pesticides,
fungicides and herbicides.

2.2.2 Marketing outlook

Most tomato producers sell their commodity at open markets such as Soweto Market in Lusaka.
About 80% of produced tomato is sold in open designated marketing points in the urban and peri-
urbans of cities, towns and districts throughout Zambia. The marketing chain actors are Farmers -
who are producers, Marketeers who are middlemen or bulk buyers, Retails – Marketeers/ Traders
in Green Markets such as John Chinena around Chibombo - Kabwe road, around cities, towns and
districts.

Another marketing and distribution channel is that of out growers – Retailer arrangement where
out-grower farmers are engaged to produce defined and determined qualities and quantities of
tomato at prearranged prices. This distribution channel is common among Chain Stores such as
Shoprite, pick n Pay, Choppies, Melissa and Spur Supermarkets. The out-grower/Retailer
marketing arrangement only amounts to about 15% of the tomato farmers across the country which
cannot absorb the excess of the produced tomato. The remaining 5% of the tomato is sold at farm
gate by individual producers (Zambia Daily Mail Ltd, 2018).

2.3.0 VISION, MISSION AND OBJECTIVES

OUR VISION is to become a leading Agricultural Consultancy and Agribusiness Solution by

2030 in Southern Africa

MISSION of our organization is to establish a Multinational Agribusiness Firm that offers

solutions to the impending agricultural problems in Africa and the world at large.

OBJECTIVES

 To establish an ultra-modern tomato processing plant within Lusaka by 2020

 To process the tomato into finished products that have longer shelf life by 2022
 To provide a sustainable and stable market for tomato farmers by 2022
 To create an out-grower tomato scheme for our farmers by 2021
 To stabilize the volatile tomato prices currently experienced by farmers by 2020
  To promote quality production of tomatoes among smallholder farmers during the rainy
season

2.3.3 PROBLEM STATEMENT

Tomato price volatility has been a persistent challenge among tomato producers in Zambia. This
has been attributed to the lack of markets that can absorb the entire supply of tomato produced at
a given time. This means that, the tomato industry is purely perfect competitive market system,
where products are indifferent, and there are many supplier of similar products. If demand is in
excess of supply prices increases and if the opposite happens prices go down. In such crops it is
difficult to maintain an equilibrium price, because there are many producers that are producing
homogeneous products that are not differentiated, and are willing to supply at any given market
price. It is therefore, worth noting that tomato is a perishable crop as such, market failure in tomato
marketing is inevitable because producers become price takers when supply is in excess of the
demand. Prices drop to lower levels leaving producers without a choice but to reduce prices. Most
farmers run at loses, because they fail to even cover for variable costs at lower prices. The
following are some of the problem that this firm is going to solve: -

a) Price volatility of tomato both in short run and long run

b) Perishability of tomato
c) Lack of processing plant to absorb excess supply of tomato

In 2018, Zambia Daily Mail conducted a survey and interviewed a Farmer from Serenje who
brought his tomato to Soweto Market. and the following were some of the discussion.

Mr. Michael Kaumba told the daily mail that it costs about K30,000.00 to manage a hectare of
tomato. And farmers are expecting a lot from their investment but what is taking place at Soweto
Market is very disappointing. Prices of tomato per Crete at peak ranges from K300.00 - K420 that
is during the rainy season. And prices fluctuate depending on the demand and supply of the
commodity, but in certain periods of the year, tomato prices drop to as low as K 15.00/ Crete of
tomato, this sharp drop in prices is caused by high supply which is in excess of demand. Coupled
with the perishability of the commodity, the farmers are left without any choice or alternative but
to sell their product at lower prices, they become price takers instead of determining the prices. At
lower prices, farmers fail to break even and hence they make losses, or can utmost become
bankrupt. (Zambia Daily Mail Ltd, 2018)

2.4.0 SOLUTION STATEMENT

The problem mentioned above has two solutions, the first solution is to establish a processing plant
that will process raw tomato into finished products in order increase shelf life and reduce wastage.
The second is to create a formal marketing link between producers and middlemen to processors
that will enable farmers have the power to negotiate or bargain for better prices. To ascertain
supply, the project will engage farmers to form out-grower schemes where farmers will enter into
an agreement with the company to produce and supply an agreed quality of the commodity at
prearranged or predetermined prices.

In order to assure quality and freshness of the raw materials – Tomato into our processing plant,
the company will procure refrigerated container tracks and establish buying points in production
areas such as Mkushi, Mumbwa, Chongwe, Rufunsa, Kabwe, Kapiri Mposhi and other areas.
These collection points are the bulking points where farmers can easily take their produce.

2.5.0 BUSINESS OVERVIEW

Tomato is a highly perishable crop, once harvested, it cannot be stored in its raw form. Currently
it’s a pitying to see tomato going to waste, and farmers ending up in losses because they are unable
to salvage something from their efforts. Tomato production is currently risk because of the
uncertainty of market prices at a given time. Accurate price forecasting is almost impossible at the
moment as prices can fluctuate steeply causing losses among farmers. Our firm wants to change
this fact and establish a processing plant that will ensure preservation of tomato to avoid post-
harvest loses, increase the shelf life of the harvested tomato by processing it into tomato source,
tomato paste, tomato juice and other dry spices and soups.

Currently, the tomato industry trades in raw tomato that is not processed, therefore, our main aim
is to increase the level of processing the tomato into forms that have a high storability. Our targeted
markets are local, Regional and international markets.

2.5.1 Local Markets

A blend of products will be produced, labelled, packaged and distributed to the local super markets
and retail shops. Depending on the market research, a number of products will be developed and
produced in order to meet customer preferences and taste. Different marketing strategies shall be
employed to penetrate and dominate local markets. This we shall achieve through aggressive
promotions, adverting, and other forms of sales promotion in marketing. A variety of products
shall be produced, and this gives us an advantage in marketing, it is easier to differentiate our
products from those of competitors. To increase our market segment, strategies such as co-
marketing of products with already established products shall be arranged with Zambeef meat
products – combo marketing strategy.

2.5.2 Regional and International Markets

Regional Markets depend on the trade agreements between member states, which means high
standard products should be produced in order to meet customer satisfaction and regional trade
food safety and regulation requirements. Since quality is one of key priority, its investable to
penetrate regional markets. Our Competitive advantage in Regional trade is that, Zambia a land
linked country, connected to markets such as the Congo DR, Angola, Mozambique, Zimbabwe,
Namibia, Malawi Botswana and South Africa, that is in the SADC and COMESA.

2.6.0 SOURCES OF INCOME

The project shall be entirely funded by the loan that will be obtained from Citizen Economic
Empowerment Commission (CEEC). The project total costs are estimated at K3,200,000.00 which
will be used for construction of the plant, Procurement of equipment, labour and raw materials for
production.

a) Sales of Processed tomato products i.e. tomato source, tomato soup, tomato juicy e.t.c
b) Raw packaged tomatoes
3.0 MARKETING PLAN
3.1.0 Target Market
We are targeting the local, regional and international markets. As earlier stated, our goal is produce
quality products ranging from Tomato source, Tomato paste and soups, Tomato juice and other
tomato related products for the kitchen. The local distribution chain shall have the following forms:
a) Producer to Retails to Consumers
b) Producer to wholesalers to Retails to Consumers
c) Producer to Consumers
d) Producer to Agents to Retailers to Consumers

These distribution chains are influenced by consumer behavior and the competitors’ products
available on the market. In markets that are near the production center, products shall be sold direct
to will consumers and the further the consumer point from the factory, the larger the number of
actors in the distribution chain.

3.2.0 COMPETITION ANALYSIS

There is a stiff competition in the agro processing industry, especially on the regional scale.
Currently locally, there is no firm that process tomatoes in Zambia, that is why we intend to put
up a processing plant that will help reduce tomato wastage in the country and process it into
products that can be on shelves for a relatively longer period of time. Canned tomato pastes, tomato
juice, tomato soups and other squeezer bottled tomato sources currently consumed in Zambia are
from other countries with SADC and COMESA Countries. Most of these products are seen on the
shelves in Chain Store Supermarkets such a Pick n Pay, Spur Supermarkets and Choppies.

3.3.0 Market Size and Growth Patterns

The market niche is likely to grow steadily with time; this is mainly due to the changes in
consumption patterns where the population in middle class is growing at an exponential rate.
Worldwide, the class of people that are high consumers are the middle class, because, they have a
high marginal propensity to spend. The middle class have disposable income; they want to keep
up with changes in world trends. Strategically, it is our priority as a new entrant in the industry to
segment our market and allocate a specific marketing strategy i.e. within middle class society,
skimming as a price mechanism, in low income society. penetration strategy shall be employed.
3.4.0 Projected Market Share
Our projected market share is 80% of our products are targeting both at local and regional markets,
the major competitors currently are products produced in South Africa, which are mostly GMOs.
Our products shall be a combination of organic and conventional farming. Organic products be
focused in the elite markets such as the European Union Markets. The local shall be composed of
conventionally grown tomato processed products as well as organic products. We shall have 15%
of our products targeting the European Union Markets.

3.5.0 Trends in Demand

There is a great demand for tomato products because every household consume tomato on a daily
basis in the country. The demand for tomato comes from individual households, restaurants, hotels,
organization holding workshops, events organizing entities – matebeto parties and Supermarkets.

3.6 .0 Trends in Supply

The main suppliers of tomato are Smallholder and Emergent scale farmers, and other individual.
The supply is higher than the demand because lack of processing factory of raw tomato, many
people are discouraged from engaging in tomato production. Many potential Tomato suppliers do
not realize that as long as they are able to maintain high volumes and constant supply of tomato,
some processing plant can be established.
Tomato is a perishable agricultural product, therefore, if poorly packaged, it gets damaged and
leads to absolute losses among producers. The supply of tomato is both inelastic in the short and
long run. Meaning there is a constant supply of tomato regardless of the prevailing price on the
market. In most cases supplier suffers price reduction, but because of the perishability of the crop,
they end up selling their produce at any given market price.

3.7.0 Pricing
The pricing mechanism that the firm shall adopt are those prevailing with the competitors’
products. Since the products will be entering for the first time on the Zambian market, a high
quality and lower price strategy will be adopted in order to rapidly penetrate the market. A
wholesale price of various products shall be competitive.

3.8.0 Promotion and Publicity

Advertisement is key in increasing sales and product market share. Sales can be increased also
through promotions and publicity. Co-marketing with other products that are complementary to
our products will be one of the strategies for increased sales. Creating product awareness is cardinal
in marketing. The consumers have to have the knowledge about the existence of the product on
the market, where they can find the product and at what prices. All this information need to be
availed to consumers in order to increase sales. Advertisements both in electronic and print media
as well as online marketing and television and radio shall be employed as means of creating
awareness of our products.

4.0 OPERATIONAL PLAN/MANAGEMENT STYLE

4.1.0 Management Team
The management of any organization follows a certain organizational system. Our firm shall adopt
a functional organization structure. Considering the fact that we are production varying products
from a single raw material. The organization shall be led by the Chief Executive Officer and the
Treasurer shall be the Chief Financial Controller. There shall be heads of departments from each
functional office i.e. Marketing Department, Procurement Department, Human Resources
Department, Accounts Department, Agribusiness Department and Business Development
Department.
4.2.0 Recruitment/ Staffing Plans
Agribusiness firms are labour intensive, they require a right mix of capital and labour in order to
become efficient and effective in achieving set targets and attaining of objectives of the firm. The
functional organization structure shall be adopted instead of product based organization structure;
this is suitable for an organization that produces many similar but differentiated products from the
same raw materials. In this case the raw material is tomato fruits, which is fed into the production
process to produce tomato finished products.
The human resources department – headed by a HR manager, shall be responsible to recruitment
and retaining of skilled and talented workforce. Worker retention is very important because it cost
to employee every season. The project shall have both contractual and permanent employees.
Contractual employment shall be for a period of not more than Six (6) months of which at the end
of each contracts employees shall be entailed to a gratuity which shall be value at 25% of the basic
pay in the period served.

4.21 Phasing
In the next 5 years, our company is going to stabilize the volatile tomato prices on the market.
There will increased processing of raw tomato and the number of out grower farmers will be
increased to over 8,000 smallholder tomato farmers. The number of employees will also increase
from the current levels by about 40% in 2025.
The project is segmented into 3 phased of which
a) Phase 1
 will involve establishment of an ultra- modern processing plant in order to solve
the stated problem of volatile tomato prices.
 Intensify research on product design, labelling and packaging, and adoption of an
appropriate distribution channel
 Establishment of product prototype and market testing before a final product is
offloaded on the market
 There shall be a number of smallholder farmers recruited in order to assure stable
supply of the feed raw material to the plant

b) Phase 2
 Increased advertisement in order to increase the product market share
 Establishment of more marketing integrated strategies such as co-selling, co-
marketing and co-advertising with already established complementary products
such as Zambeef products.
 The delocalization of bulking centers to production areas to increase market
accessibility by our farmers
 Determining strategies that maximizes profit levels in the firm
 Increasing the recruitment of out grower tomato farmers in order to enable our plant
operate at full capacity throughout the year.
 Increased monitoring and evaluation strategies in order to increase product quality
 Operations scheduling in mist agricultural processing is seasonal, because raw
material are most produced seasonally while consumption is throughout the year.
Therefore, our firm would strategically facilitate for the production of tomato
throughout the year by creating demand (Market) for tomato- especially during the
rainy season.
c) Phase 3
 The maintenance of the market share, rebranding of products that have reached the
maturation stage in the product marking cycle
 Removal or phasing out of non-performing products, rebranding or improvement
of such products
  To conduct product rejuvenation and considering of other alternatives that can
support continuity of production

4,2 2 Budget

The budget is based on an annual processing of 10,000 MT of raw tomato, which shall be processed
into tomato products {paste, soup, juice and tomato powder}. These products shall be the main
sources of revenue after marketing them. Some of the tomato shall be processed into powders that
can even be stored for much longer periods in order to reduce the perishability of tomato

BUDGET

A PERSONNEL COST RATE(K) QTY FREQ AMOUNT(K)

Salaries

Director Monthly 8,000.00 1 12 96,000.00

HODs Monthly 5,000.00 6 12 360,000.00

Supervisors Monthly 4,500.00 6 12 324,000.00

General workers Monthly 1,500.00 10 6 90,000.00

Subtotal 870,000.00
TRAVELLING &
B TRANSPORTATION COST

Fuel Costs Litre 14.65 2000 2 58,600.00

Lubricants Litre 65.00 100 3 19,500.00

 Subtotal 78,100.00
INFRASTRUCTURE &
C EQUIPMENT

PROCESSING PLANT MACHINES UNIT 458,000.00 1 1 458,000.00

REFRIDGERATED TRUCK ( 5
TON) TRUCK 120,000.00 3 1 360,000.00

LAND FOR FACTORY PREMISES ACRE 100,000.00 1 1 100,000.00

CEMENT FOR
CONSTRUCTION(50KG) POCKETS 65.00 2000 1 130,000.00

ANGULAR IRON BAR BAR 300.00 300 1 90,000.00

ROOFING GALVERNIZED
SHEETS SHEET 200.00 250 1 50,000.00

QUARRY DUST(SMALL STONES) TON 2,000.00 25 1 50,000.00

BUILDING SAND TON 1,000.00 50 1 50,000.00

WAREHOUSE DOORS DOOR 2,500.00 3 1 7,500.00

WINDOW FRAMES UNIT 250.00 70 1 17,500.00

COMPUTERS OFFICE UNIT 8,000.00 5 1 40,000.00

PRINTER( INDUSTRIAL
MULTPURPOSE ) UNIT 6,000.00 2 1 12,000.00

FURNITURE & FIXTURES UNIT 40,000.04 1 1 40,000.04

Subtotal 1,405,000.04
D ADMINSTRATIVE COSTS

ELETRICITY UTILITIES Monthly 3,000.00 12 1 36,000.00

WATER BILLS Monthly 2,000.00 12 1 24,000.00

TELEPHONE CHARGES Monthly 1,000.00 12 1 12,000.00

VEHICLE REPAIRS &
MAINTENANCE Quarterly 10,000.00 4 1 40,000.00

BANK CHARGES Monthly 200.00 12 1 2,400.00

GENERAL OFFICE SUPPLIES Monthly 600.00 12 1 7,200.00

FUEL 7 LUBRICANTS Monthly 2,108.33 12 1 25,299.96

Subtotal 146,899.96
E WORKING CAPITAL

RAW MATERIAL PURCHASES (MT) Biannual 500,000.00 2 1 1,000,000.00

Subtotal 1,000,000.00

TOTAL 3,500,000.00

5.0 FINANCIAL PLAN

5.10 Cash Flow Projection

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

CASH INFLOW
Grant/loan/
investment 3,500,000.00 - 1,000,000.00 2,000,000.00 - -
Sales(tomato
products) 2,500,000.00 2,500,000.00 3,000,000.00 4,000,000.00 6,000,000.00 6,000,000.00

Total cash inflows 6,000,000.00 2,500,000.00 4,000,000.00 6,000,000.00 6,000,000.00 6,000,000.00

CASH OUTFLOWS
Fixed Assets
Buildings 495,000.00 - - - - -

Motor Vehicles 360,000.00 - - - - -

Equipment 458,000.00 - - - - -
Office Fittings and
Fixtures 92,000.04 - - - - -
 Cost of Sales
Electricity Utilities 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00

Water Bills 24,000.00 24,000.00 24,000.00 24,000.00 24,000.00 24,000.00

Telephone Charges 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00

Vehicle Repairs &
Maintenance 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00

Bank Charges 2,400.00 2,400.00 2,400.00 2,400.00 2,400.00 2,400.00

General Office
Supplies 7,200.00 7,200.00 7,200.00 7,200.00 7,200.00 7,200.00

Fuel 7 Lubricants 25,299.96 25,299.96 25,299.96 25,299.96 25,299.96 25,299.96

Raw Material
Purchases 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00

Salaries & Wages 870,000.00 870,000.00 870,000.00 870,000.00 870,000.00 870,000.00

Loan Repayment 770,000.00 770,000.00 770,000.00 770,000.00 770,000.00

Tax paid 33,333.33 40,000.00 53,333.33 80,000.00 80,000.00

Total Cash Outflows 3,421,900.00 2,820,233.29 2,826,899.96 2,840,233.29 2,866,899.96 2,866,899.96

Cash flow summary

Cash inflows 6,000,000.00 2,500,000.00 4,000,000.00 6,000,000.00 6,000,000.00 6,000,000.00

cash outflows 3,421,900.00 2,820,233.29 2,826,899.96 2,840,233.29 2,866,899.96 2,866,899.96

Net flows 2,578,100.00 (320,233.29) 1,173,100.04 3,159,766.71 3,133,100.04 3,133,100.04

Balance b/f - 2,578,100.00 2,257,866.71 3,430,966.75 6,590,733.46 9,723,833.50

Balance c/f 2,578,100.00 2,257,866.71 3,430,966.75 6,590,733.46 9,723,833.50 12,856,933.54

5,11 Financial Statement

Gross Margins
REVENUE YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Sales 2,500,000.00 2,500,000.00 4,000,000.00 6,000,000.00 6,000,000.00 6,000,000.00

Costs of sales 2,016,899.96 2,820,233.29 2,820,233.29 2,840,233.29 2,866,899.96 2,866,899.96

Gross profit 483,100.04 (320,233.29) 1,179,766.71 3,159,766.71 3,133,100.04 3,133,100.04

Gross Profit % 19.32 (12.81) 29.49 52.66 52.22 52.22

6.0 FACILITY

6.10 Proposed Security

A 2000 HA Farm situated in Magoye value at ZMW 7,500,000.00.

6.11 Drawn down Plan

The operation plan is as indicated below, the shaded areas are the time frame in which activities
shall be conducted.
ACTIVITY AMOUNT PERIOD
Q1 Q2 Q3 Q4 TOTAL
CONSTRUCTION OF PLANT 495,000.00 495,000.00
PURCHASING OF PROCESSING MACHINES 458,000.00 458,000.00
PURCHASE OF VEHICLE 360,000.00 360,000.00
( REFRIDGERATED TRUCK)
COMPUTER PURCHASES & FIXTURES 92,000.04 92,000.04
OUT-GROWER FARMERS RECRUITMENT 1,000,000.00 1,000,000.00
OTHER PURCHASES 1,094,999.96
TOTAL 3,500,000.00
The project shall fully settle its loan obligation within the period of 5 years with no grace period
from the day of commencement of operations, the to the first month of repayment due date. The
monthly installments shall be ZMW 64,166.67, with an annual repayment of K770,000.00
REPAYMENT SCHEDULE

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

LOAN
DISBURSMENT 3,500,000.00 0 0 0 0
REPAYMENT
@ 10% 3,500,000.00

PRINCIPLE 700,000.00 700,000.00 700,000.00 700,000.00 700,000.00

INTEREST 70,000.00 70,000.00 70,000.00 70,000.00 70,000.00

TOTAL 770,000.00 770,000.00 770,000.00 770,000.00 770,000.00

SCHEDULE

Month 1 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

 Month 2 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

Month 3 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

Month 4 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

Month 5 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

Month 6 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

Month 7 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

Month 8 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

Month 9 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

Month 10 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

Month 11 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

Month 12 64,166.67 64,166.67 64,166.67 64,166.67 64,166.67

TOTAL 770,000.00 770,000.00 770,000.00 770,000.00 770,000.00

7.0 RESULTS

The addressing of specific objectives, profitability and sustainability of the project. The project
can be sustained if reinvestment and expansion programmes can be implemented. Investment of
the company excess earnings will grow the working capital and augment future earnings. The
company policy is to reinvest 25% of the total profits after tax.

7.10 Profitability

REVENUE

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Sales 2,500,000.00 2,500,000.00 4,000,000.00 6,000,000.00 6,000,000.00 6,000,000.00

Costs of sales 2,016,899.96 2,820,233.29 2,820,233.29 2,840,233.29 2,866,899.96 2,866,899.96

Gross profit 483,100.04 (320,233.29) 1,179,766.71 3,159,766.71 3,133,100.04 3,133,100.04

GP % 19.32 (12.81) 29.49 52.66 52.22 52.22

A gross profit of 483,100.40 is expected in the first year, in the second year, there is an indication
of a gross loss of (320,233.290 due to the low sales volumes and loan repayment, which erodes
the profits. The gross profits are expected to grow steadily from year 2 to year 5.

7.11 Sustainability

Based on the financial projections, the business will be able to profitably sustain its operations
even after the monthly CEEC loan deductions. It is expected that the business will be in a much
stronger financial position after the CEEC intervention.

7.12 Socio-Economic Impact

The project will reduce the unemployment rates in Zambia. Youth will be employed in this factory,
and they will be earning salaries and wages to improve their livelihood.

For out growers and non out grower tomato farmers, they will benefit from our company because
it will provide a reliable Market for their output. Usually farmers have a challenge of tomato
marketing because of luck of sustainable, and reliable markets for their produce. Tomato producers
are also affected by the volatile tomato prices; tomato prices are not stable. The company will
stabilize the prices for tomato on the market by creating a constant demand for tomato throughout
the year. Currently farmers suffer losses when the market is saturated with tomato supply, and
tomato being a perishable crop, farmers in fear of completely losing their crop, they tend to become
price takers and end up selling their produce at lower prices.

Wholesalers and retailers

Tomato products are highly consumed in Zambia, they are either taken in mixed dishes, the hotel
and fast foods industries are the major consumers of tomato products. In households, our tomato
products will benefit our local communities to improve the nutrition at household level. Meaning
our wholesalers and retailers will have access to quality processed tomato products through various
distribution chains.

8.0 MAIN BUYERS AND SUPPLIERS

8.1 1 Suppliers

Our main suppliers will be farmers from the out grower scheme. We shall also buy our raw
materials from other tomato producing farmers with the established buying points in the catchment
area of production. These are farmers in areas such as Mkushi, Kapiri Mposhi, Serenje, Kabwe,
Chisamba, Chibombo, Mumbwa, Itezhi-Tezhi, Lusaka, Chongwe, Rufunsa, Kafue, Chilanga just
but to mention a few.

8.1 2 Buyers

Hotels and restaurants are our main targeted consumers. Households are also our domestic targeted
buyers. Below are some of the products that we shall produce. Wholesale and retail shops are our
main distributors.

9.0 Key Success Factors

The personnel involved in the operations of the tomato processing are very experienced. They
have been involved in farming and processing for the past 25 years.

9.1 Environment Concerns

The project has no environmental concerns that are threating to the environment. It is actually
contributing positively to the environment by making sure that there is not tomato wastage of
tomato. We shall train our farmers to produce high quality tomatoes with optimal use of chemicals
and artificial fertilizers that pose a challenge to the environment. Organic fertilizers shall be
promoted in order to control the use of artificial fertilizers. Organically produced tomatoes shall
have premium prices to encourage our farmers start producing organic tomatoes.

10.0 Risk Management

S/N RISK MITIGATION

1 Low supply of raw Backward integration and establishment of out grower

materials schemes that will enable a sustainable and reliable
supply of tomato to the factory

2 Climate change Pests and Disease affect the quality of produce; this can

( Pests and Disease) also reduce production of tomatoes. The mitigation is

use of organic pest control systems.
 3 Electricity Outages Usage of alternative power sources such as Solar energy
to avoid production stoppages due to load shedding

ANNEXES

ANNEX 1 FINANCIAL STATEMENTS

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

CASH INFLOW
Grant/loan/
investment 3,500,000.00 - 1,000,000.00 2,000,000.00 - -
Sales(tomato
products) 2,500,000.00 2,500,000.00 3,000,000.00 4,000,000.00 6,000,000.00 6,000,000.00
Total cash inflows 6,000,000.00 2,500,000.00 4,000,000.00 6,000,000.00 6,000,000.00 6,000,000.00

CASH OUTFLOWS
Fixed Assets
Buildings 495,000.00 - - - - -

Motor Vehicles 360,000.00 - - - - -

Equipment 458,000.00 - - - - -
Office Fittings and
Fixtures 92,000.04 - - - - -

Cost of Sales
Electricity Utilities 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00

Water Bills 24,000.00 24,000.00 24,000.00 24,000.00 24,000.00 24,000.00

Telephone Charges 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00

Vehicle Repairs &
Maintenance 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00

Bank Charges 2,400.00 2,400.00 2,400.00 2,400.00 2,400.00 2,400.00

General Office
Supplies 7,200.00 7,200.00 7,200.00 7,200.00 7,200.00 7,200.00

Fuel 7 Lubricants 25,299.96 25,299.96 25,299.96 25,299.96 25,299.96 25,299.96

Raw Material
Purchases 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00

Salaries & Wages 870,000.00 870,000.00 870,000.00 870,000.00 870,000.00 870,000.00

Loan Repayment 770,000.00 770,000.00 770,000.00 770,000.00 770,000.00

Tax paid 33,333.33 40,000.00 53,333.33 80,000.00 80,000.00

Total Cash Outflows 3,421,900.00 2,820,233.29 2,826,899.96 2,840,233.29 2,866,899.96 2,866,899.96

Cash flow summary

Cash inflows 6,000,000.00 2,500,000.00 4,000,000.00 6,000,000.00 6,000,000.00 6,000,000.00

cash outflows 3,421,900.00 2,820,233.29 2,826,899.96 2,840,233.29 2,866,899.96 2,866,899.96

Net flows 2,578,100.00 (320,233.29) 1,173,100.04 3,159,766.71 3,133,100.04 3,133,100.04

Balance b/f - 2,578,100.00 2,257,866.71 3,430,966.75 6,590,733.46 9,723,833.50

Balance c/f 2,578,100.00 2,257,866.71 3,430,966.75 6,590,733.46 9,723,833.50 12,856,933.54

 ANNEX 2

Gross Profit

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Sales 2,500,000.00 2,500,000.00 4,000,000.00 6,000,000.00 6,000,000.00 6,000,000.00

Costs of sales 2,016,899.96 2,820,233.29 2,820,233.29 2,840,233.29 2,866,899.96 2,866,899.96

Gross profit 483,100.04 (320,233.29) 1,179,766.71 3,159,766.71 3,133,100.04 3,133,100.04

GP % 19.32 (12.81) 29.49 52.66 52.22 52.22