(Proposed )

Rahimafrooz Agro Limited

Business Plan Presentation

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 Embarking on a New Journey …..
Rahimafrooz Agro Limited

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 with a Sole Dream…
 Vision 2015
To be leader with the best quality produce from ‘seed to
shelf’ .

 Our Mission
We want to bring ethical and excellence business practices in
agro sector contributing significantly to GDP ensuring trust
from grower to consumer.

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 BANGLADESHI AGRICULTURE AT A
GLANCE
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 Preview of National Accounts
All figure in million Taka

Source: BBS, MOA

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 Preview of National Accounts (Cont’)
Agriculture Products
Year
(M.BDT) Agriculture Products
2,500
1995-96 1,606

1996-97 1,611
2,000
1997-98 1,701

1998-99 1,848
1,500
1999-00 1,847

2000-01 1,802

2001-02 1,810 1,000

2002-03 1,922

2003-04 1,994 500

2004-05 2,060

2005-06 2,204 -
1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
Source : Economic Trends, Statistics Department, Bangladesh Bank.

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 Overview of Farming Statistics

Contribution
• Total family : 17,600,804
Farmers
• Total area : 14.845 million hectare • Total farm holding :
Land

15,089,000 • Agriculture sector to GDP

• Cultivable land : 8.44 million : 23.50%
hectare • Income yearly: 48,500
• Crop sector to GDP :
• Cropping intensity : 175.97% • Expenditure: 48,500 13.44%
• Net cropped area : 7.809 million • Average family member: 5 • Manpower : 62%
hectare • Savings - 0 • Total food crop demand :
23.029 million metric ton

Source: Own primary data, BBS, 2006 and Handbook Agricultural Statistics, MoA

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 Past trends: an example….

Seed Demand-supply (m MT)

Total Space (in 000 hectors) Total rice Production (in
11,000 million metric ton) Demand-Rice seed supply-Rice seed

10,800 437,940
30,000 426,410
414,050
10,600
367,970
25,000
10,400 310,400
20,000
10,200

15,000
10,000

9,800 10,000

9,600 5,000

9,400 14,968 14,375 17,794 24,837

- 12,348

2000-01 2001-02 2002-03 2003-04 2004-05

Source: BBS, MOA

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 Agro market size ---

Market size in Agro sector

9.5 29 billion USD

Market Size of Inputs

5.812 billion USD

Existing Seeds Market

1.278 billion USD

Other inputs
(Fertilizer, Chemical,
Pesticide and Machinery)
USD – 4.534 billion

Source: Value chain analysis , Change maker and BBS 2008

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 Crop Production cost segment and
our focus ---

Production
Chemicals
29% Of the total (7%) USD
production cost 406.84 million
Inputs Logistics & Fertilizer Pesticide
Service (48%) USD (10%) USD
61 % of the 2.789 billion 581.20 million
Production 10% of the
cost production cost

Agriculture Seeds (22%) Inputs Machinery

sector USD 1.278 5.812 13% USD
9.529 billion billion billion USD 755.56 million
USD

• Source: Value Chain analysis data & BBS 2008

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 Our plan & Targets

1% of seeds, fertilizer and machinery market by 5 years

Fertilizer Machinery
BDT 52.88
BDT 195.23 billion
billion

Seeds BDT
89.46 billion

BDT - 3.50 billion

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 INPUT COMPONENT:
SEED

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 Seed Market Scenario

 The market for seed is controlled mostly by the informal sector (88%) and the rest is contributed by
the private sector and government through BADC.
 Rice seed constitute the lion’s share of the product mix in the seed sector.
 The satisfied demand of the market stands at 45 billion taka.
 The market is predicted to grow at a rate of 33% in 2009 and a further 34% in 2010.
 The major players in this segment BRAC, ACI, Syngenta, Lal Teer, Supreme, AR Mallick, Aftab and a
host of localized brands
 A large portion of the seeds market is being met by farmers’ own seed cultivation.

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 Input Market Scenario…
Market Gap%-Seeds
(Figures in metric tons)
Current Scenerio:Seed(2006-07) 100%

Qty Demanded Supply of 90%

Items GAP GAP%
for Seed Seed
80%
Rice Seed 375,584 30,053 345,531 92.00% 70%
Potato 737,685 13,008 724,677 98.24%
60%
Wheat 132,834 24,012 108,822 81.92%
50%
Pulses 33,445 235 33,210 99.30%
40%
Total Oilseed 20,686 517 20,168 97.50%
Maize 1,791 602 1,190 66.42% 30%

Jute 7,690 279 7,411 96.37% 20%

Vegetables 3,465 125 3,339 96.39% 10%
Source: Seed Wing, MOA 0%

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 Estimated Scenario of Seed Market
2010

Qty demanded for Supply of

Item GAP GAP%
Seed,2010 (In MT) Seed
Rice Seed 403,520 24,837 378,683 93.84%
Potato 567,450 7,697 559,753 98.64%
Wheat 102,180 14,208 87,972 86.10%
pulses 25,727 139 25,588 99.46%
Total Oilseed 15,912 306 15,606 98.08%
Maize 1,378 356 1,022 74.17%
Jute 5,915 165 5,750 97.21%
Vegetables 2,665 74 2,591 97.22%
Total 1,124,747 47,782 1,076,965 95.75%

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 Current Seed Market Scenario (Total)
Seed (2008)

12%

Branded
Non Branded
88%

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 Current Seed Market Scenario
(Branded)
Seed (2008)

ACI United AR Malik &

10% 4% Namdhari
10%
Supreme
14%

Other
31%

Brac
10%
Syngenta
Aftab Lal Teer
6%
4% 11%

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 INPUT COMPONENT: FERTILIZER

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 Fertilizer Market Scenario

 Micro-nutrient and Basic Fertilizers constitute the fertilizer sector landscape of Bangladesh. Organic
fertilizer plays a negligible role in this segment. However, it is growing at a constant rate.
 Government plays a major role in this sector as it is the sole supplier of Urea. (Annual requirement 2.8
million MT)
 All other fertilizers, namely MoP, TSP, DAP, NPKS, Zinc Sulphate, Sulphur etc., are met/supplied
almost exclusively by the private sector.
 The premier players are ACI Agro, Petrochem, East West, MAP Agro, Syngenta etc.
 The market for fertilizer is growing and is predicted to grow by 25% in the year 2009 and a further
growth of around 40% in 2010.

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 Fertilizer Market Scenario

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 Estimated Scenario of Fertilizer Market
in 2010
Total Estimated Demand (2010 -
Types Total Supply GAP GAP%
all figure in million tons )
Urea 3,623 2,515 1,108 30.57%
TSP 567 340 227 40.04%
MP 378 230 148 39.15%
SSP 157.5 122 36 22.54%
Gypsum 189 72 117 61.90%
Zinc 37.8 26 12 31.22%
DAP 315 115 200 63.49%
NPKS 441 150 291 65.99%
Total 5,708 3,570 2,138 37.45%
1st Year of Fertilizer business, we will be targeting the NPKS and in 2nd Year 5 Product Lines of Fertilizer
NPKS is product specific
balanced fertilizer which
Integrity Excellence Customer Delight Innovation ensure the correct nutrition
for the plant
 Current Market Scenario-Competition
Study
Fertilizer (2008)

East West
Others Global
6.67%
23.33% 4.44%

Petrochem
11.11%
Sygenta
3.33%
Map Agro
7.78%

Bangladesh
SKF
Agriculture
2.22%
5.55%
Alpha
Padma
ACI 5.56%
7.78%
22.22%

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 INPUT COMPONENT:
AGRO- MACHINERIES

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 Agro Machineries Market Scenario

 The main three components of the machineries market are Tractors, Harvesters and Power Tillers.
 The market for Tractors is small and progressing to a point of saturation.
 However, the market for Harvester and Power tiller is growing consistently.
 The entire market is expected to grow by 10% in 2009 and a further 15% in 2010.
 The major players of the market are TAFE (Massey Ferguson), Mahindra, Swaraj and Sonalika (ACI).
 The small machineries like Spray machine and spare parts also plays a significant role in the machineries
market.

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 Current Market Scenario-Competition
Study
Tractor & Harvester (2008) Power Tiller (2008)

BULL POWER
(ACI)
14% SIFENG
Others Sonalika (ACI) 58%
9% 16%
Swaraj Others
9%
13%

DONGFENG
15%
TAFE
Mahindra 48%
18%

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 Total Market GAP (BDT)
Items Total. Mkt Existing GAP Our Target Our Target
(in BDT millions) (in BDT millions) (3years) (in BDT millions)
%
Seed 86,904 81,600 1% 705.8
Product Current Future

Trading 2,559 810 15,876 15% 121.5

Fertilizer 26,250 7,500 1% 46.3

Machinery 35,290 0.01% 4.4
Total 878.00 mil

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 Significant Perceptual gap exists in the
market to create optimum value
Conventional Seed Non Branded Branded Government “Rahimafrooz “
Market Wayside Seed BADC
Vendors

Quality Inconsistent, Inconsistent Consistent consistent, Consistent,

unpredictable unpredictable predictable

Price Low Cost Bargained High premium Premium Competitive

Availability Home Grown Territorial Low availability as Central and Regional Superior
per demand Hubs Availability -
Regional,
Territorial
One-stop Solution Own experience Not reliable Limited range Wide range Intensive care
service

Delightful Customer n.a Moderately good Worst Best

Experience liked

*Internal Study - Observation; Depth Interviews & Family Interviews

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 How We plan to create value for the
Farmers / Growers
Agriculture solution for Farmers and Growers

Knowledge transfer Introduce new

Marketing and
on cultivation technology for
Logistics advice
technique cultivation

Fuller Range of
One stop solution
Products

Quality
Integrity Excellence Customer Delight Innovation
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 Our business Direction

RSF will be distribution

partner for seeds
fertilizer and machinery

Consumer
CIC will support with
Retail to consumer
own seeds chemical Farming
and fertilizer Support to other retail
Own farming business
Contract farming Develop own Agro
BADC, Setu Consultancy for supply chain business
Corporation, Mullika farmer/grower
and NGO’s will help for Inputs
Own & Contract farming Seeds
Fertilizer
Machinery
Product Trading
Tissue culture lab

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 1st three years operation plan

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 SWOT
 Strengths
 Rahimafrooz corporate credibility
 Country-wide RSF sales network
 Horizontal integration with existing SBUs’ of Rahimafrooz
 Energetic and experienced management
 Weaknesses
 New business domain
 Possible mismatch in business assumptions
 Absence of established business process for Modeling

 Opportunities  Threats
 Government support in agro-sector  Government restriction on operating seeds business
 Small presence of organize competition  Inflation
 RAGL-RSF-RSL alliance  Lack of control over production/supply
 Entry of new operator
 Natural Calamity

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 Our Competitive Advantage

Network
• Country wide RSF New Quality
“Rahimafrooz” Network Operating with
Paradigm Management
corporate • 1000+ Farmer economies of Competence
credibility /Grower relationship • Knowledge based Scale
in different location • Cost effective
• Comprehensive
understanding of
Current Value
Chain of agro
business

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 Sourcing of Products
 The business merchandise will be sourced from a varied mix: -
 Import from China, Srilanka & Phillipines
 Collection of seeds from our contracted farmers
 Own seed production at research & development facility
 Seeds will be sourced from China & Srilanka initially
 Fertilizers will be imported from India, China & other relevant sources

Sourcing from various Assembling, grading, packing

Channeling for Distribution
points at processing plant & Storing

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 Distribution Model

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 Our Footprint Districts

1st Phases 2nd Phases 3rd Phases

Jessore Rajbari Kishorganj

Bogra Rangpur Narshingdi

Dinajpur Faridpur Munshiganj

Mymensing Sylhet Manikganj

Noakhali

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 With the following Products
Seed Fertilizer Machineries

Rice Chemical Power Tiller

Wheat Organic Tractor

Potato Micronutrient Thresher

Vegetables Sprayer

Lentil/Maize Dryer

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 Organogram (Top Level) 1st Phase
Head of
Business
Business leader Operation

Projects &
Executive committee (G – 8/9) Agro
Supply Chain Finance Sales Strategic
technologist
planner

Team Qualification
Agro technologist Minimum Masters in Agro Science / Economic + 10 years of experience in ago business as agro scientist

Supply Chain Minimum Business Graduate + 5 years of experience in related Industry or any FMCG Industry

Finance ICMA/FCA /CA/ACCA + minimum 5 years of experience

Sales Minimum Graduate in Agro Economic/ marketing + minimum 5 years of experience in ago inputs marketing

Projects & Strategic planner Minimum Business Graduate + 5 years experience in business development, Business research, Business
process in FMCG or any related Industry

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 Project Management & Strategic
planning Organogram 1st Phase

Executive Agro technologist

committee G-9

Scientific officer Scientific officer

Mid level seed Fertilizer

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 Sales and Marketing Organogram 1st
Phase

Executive Head of Sales (1)

G- 8
committee

Asst. Manager -
Seeds, Fertilizer
Mid level Asst. Manager
Product trading (1) and Machineries
(1)

Territory Sales
Field Level Sales officer (6)
Manager (6)

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 Supply Chain Organogram 1st Phase

Executive Head of
Supply Chain
committee G-8

Asst. Manager
Asst. Manager
Mid level Procurement
Logistics (1)
(1)

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 Finance Organogram 1st Phase

Executive Head of
Finance
committee G–9

Asst. Manager
Asst. Manager Asst. Manager
Mid level Accounts (1) Treasury (1)
MIS & Planning
(1)

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 Project Management & Strategic
planning Organogram 1st Phase
Head of Project
Executive Management &
Strategic planning
committee G-8

Market Research
Mid level Project engineer (1)
officer (1)

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 Thank you

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 Knowledge transfer on cultivation technique

Training Thru
NGO’s (RSF)

Knowledge
transfer on
cultivation
technique
Activation
Formation of
Campaign on
Advisory
Cultivation
Committee
Methodology

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 Introduce new technology for cultivation

Research and
development wing
formation

Introduce new
technology for
cultivation
Value Bio tech innovation
reengineering for for better plant
cost effective health, plan growth
planting solution , plant nutrition

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 Marketing and Logistics advice

Availing market
information to the
customers through
relevant service
providers

Marketing
and
Logistics
advice

Cost Effective
Transport Solution

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 One stop solution

Complete
range of
products

Advice on One
Advice on
Sales and stop Cultivation
logistics solution

After
Sales
Service

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 Fuller Range of Products

Variety of Seeds

Fuller
Range of
Products
Machinery –
Both – basic and
Sowing, Cropping,
micro nutrient
provision for
fertilizer
accessories

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 Formation of Advisory Committee

 In order to run the business, the company will employ a

board of advisors comprising of Agriculture sector
professionals.
 The board will be headed by a chief advisor and
supported by 3 to 4 members, each representing
different segment of the sector.

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 Our advisory panel
No. Name Designation Organization Area of Specialization

1 Dr Mahbub Hossain Executive Director BRAC University, Dhaka Agricultural

Economist

2 Dr Jainal Abeden IRRI Representative in International Rice Research Farming system

Institute (IRRI),

3 Dr Shahidul Islam Member, BFA and Former Member of Fertilizer Soil Scientist
DG, BRRI Association (BFA)

4 Dr Prof. Lutfunnesa Professor, BAU Agricultural University Pathologist

(BAU)

5 Dr M.A. Bashar Head, Seed Resources Division Bangladesh Rice Research Plant Breeder
Institute (BRRI)

6 Dr AKM Mohiuddin Head, Biotechnology Moulana Bhashani Biotechnologist

Department University

Integrity Excellence Customer Delight Innovation

 How We plan to create value for the
Farmers / Growers
Agriculture solution for Farmers and Growers

Knowledge transfer Introduce new

Marketing and
on cultivation technology for
Logistics advice
technique cultivation

Fuller Range of Formation of

One stop solution
Products Advisory Committee

Quality
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