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August 30, 2021

Thefarmhouseclub

Thefarmhouseclub is an agritech platform, tailored towards the advancement of African agri commodities export, using the stellar blockchain to facilitate crossboarder payments in a sucure, fast and cheap way. The initiative emanated as a result of the long overdue need for a general overhaul of legacy workflows in the agrosphere hitherto.

SUMMARY

International trade is very important in the expansion of the economy of a country because it allows for the development of markets, creates employment, reduces the rate of poverty, and breaks monopolies by discouraging the domination of a market by a few.

 

Export trade is a sub-division of international trade where goods produced in one country are transported to another country for sale or trade and as a crucial element of a country's economy, exports stimulate economic growth.  Export trade facilitates economic expansion, promotes international cooperation, improves the balance of payments and boosts foreign currency earnings. Despite the steady growth in the value of Nigeria's agriculture exports over the last three years (2016 to 2018), the country's agriculture exports to total exports remained below two percent (2%). Consequently, oil revenue continues to account for more than eighty percent (80%) of total value of annual exports. However, the agriculture industry contributed approximately twenty-five percent (25%) to total gross domestic product (GDP) in 2018 while the oil sector's share of total economic output was eight point six percent (8.6%) over the same period.

  

Since the agriculture sector is the largest contributor to Nigeria's gross domestic product (GDP), unlocking the potential of agricultural exports is key. Between 2016 and 2018, the country's total agriculture exports was driven by export of sesame seeds, fermented cocoa beans, cashew nuts, ginger, crude palm kernel oil, soya beans, frozen shrimps and prawns, among other commodities.

  

Cumulatively, the country earned ₦ 0.53 trillion from agriculture export between 2016 and 2018. In contrast, Nigeria's total agriculture import bill over the same period stood at N2.39 trillion. As a result, agriculture trade deficit stood at ₦ 1.86 trillion. In 2016, total agriculture exports stood at ₦ 60.7 billion or zero pijt seven percent (0.7%) of total exports for the period.
In 2017, total agricultural exports grew by one hundred and eighty pont seven percent (180.7%) over the previous year to close at ₦ 170.4 billion and it accounted for one point three percent (1.3%) of total exports. By 2018, agriculture exports increased by seventy-seven percent (77%) over 2017 to close at ₦ 302.3 billion, and accounted for one point six percent (1.6%) of total exports.

  

The country's total export has been driven by crude oil exports. In 2018, crude oil exports accounted for eighty-two point three percent (82.3%) of total export revenues while agriculture exports accounted for just one point six percent (1.6%). With the Federal Government's intent on diversifying the economy away from oil, there has been renewed interest in the agricultural sector as a critical sector to lead the charge.

  

The Asia region is the leading importer of Nigeria's agricultural commodities. The region accounted for fifty nine percent (59%) of total exports in 2018 (2017: fifty-two point seven percent (52.7%)). Europe – thirty-four point five percent (34.5%) and America – three point six percent (3.6%) are the second and third biggest markets for Nigeria's agricultural goods in 2018. However, both regions' share of exports in 2018 dropped from thirty-five pint nine percent (35.9%) and six point five percent (6.5%) respectively recorded in 2017. In absolute term, export value of agricultural goods to Asia in 2018, grew by one hundred and sixty-seven percent (167%), from ₦ 67.3 billion in 2017 to ₦ 179.6 billion. The growth was mainly driven by demands from Japan, India and China. Trade in agricultural goods between Nigeria and the rest of Africa is still relatively small compared to other regions of the world. Agricultural exports to other African countries declined by six percent (6%), from ₦ 4.1 billion in 2017 to ₦ 3.9 billion in 2018.

  

Sesame seeds, cashew nuts, fermented cocoa beans and superior quality raw cocoa beans – with combined total export value of ₦ 210.2 billion accounted for sixty-nine point five percent (69.5%) of total agriculture exports in 2018.
Nigeria has comparative advantage in the production cashew nuts, sesame seed, cocoa beans, shea nuts, castor seeds and hibiscus flower in Africa over her counterparts due to the large arable land available for production and condusive climatic condition.

  

Spring Tech Farmhouse Limited (Thefarmhouseclub) seeks to establish and run a commodities business linking producers and consumers of commodities with a system that supports a fair exchange of value and creates a trust economy where producers, processors and investors can fulfill their potential for increased productivity and wealth creation.

  

Spring Tech Farmhouse Limited (Thefarmhouseclub) would start with the export of cashew nuts, sesame seed, cocoa beans, shea nuts and hibiscus flower from Nigeria. Nigeria is the third largest producer of sesame seeds in the world after India and China and the largest in Africa with production capacity in excess of five hundred thousand (500,000) metric tonnes as at 2017. According to the Nigerian Institute of Food Science and Technology, about ninety-five percent (95%) of sesame output in Nigeria is exported.

  

According to the National Cashew Association of Nigeria (NCAN), Nigeria ranks as the sixth largest producer of cashew nuts in the world with average production capacity of one hundred and twenty thousand (120,000) metric tons per annum. Cashew is grown in about nineteen (19) states of the country comprising: Abia, Anambra, Akwa Ibom, Benue, Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Imo, Kogi, Niger, Nassarawa, Ogun, Osun, Oyo, Taraba and Kwara.

  

The export value of cashew nuts in Q2 2018 was ₦ 37.9 billion, representing forty-seven point five percent (47.5%) of the combined export value of cashew nuts for 2017 and 2018. The export value of cashew nuts was the highest among all agriculture products exported in Q2 2018. West Africa accounts for about seventy percent (70%) of global cocoa output. Cote d'Ivoire and Ghana combined, account for more than half of the world's total production.

  

Nigeria is the third largest cocoa producer in Africa. Data estimates from Statista, a statistics online portal, puts the country's total cocoa production at two hundred and forty-five thousand (245,000) tonnes in 2016/2017 which is less than one-third of Ghana's production level.

  

Hibiscus (or bissap, as it is called in Senegal) is a valuable and versatile crop whose brightly coloured, star-shaped flowers are prized for their tart flavor, and can be made into a long list of by-products. Hibiscus jellies, jams, fruit pastes, traditional medicines, teas, syrups and refreshing drinks can be found in almost every market stall in West Africa. These beautiful flowers have a high concentration of vitamin C and have been proven to medically reduce high blood pressure. Spring Tech Farmhouse Limited (Thefarmhouseclub) would procure, package and ship thirty-six (36) tons of sesame seed, twenty-four (24) tons of dry hibiscus flower, thirty-six (36) tons of cashew nuts  and twenty-four (24) tons of dry cocoa beans on a free on board (FOB) basis monthly. The products would be shipped in twenty (20) FT container and forty (40) FT containers. For sesame seed, eighteen (18) tons would fill twenty (20) FT container, twelve (12) tons would fill twenty (20) FT container for dry hibiscus flower and twenty-two (22) tons of dry split ginger for forty (40) FT container. Packaging would be in Polypropylene (PP) woven sacks of twenty-five (25) kilogramme for dry hibiscus flower and fifty (50) kilogrammes for sesame seed, cashew nuts and cocoa.

  

Spring Tech Farmhouse Limited (Thefarmhouseclub) would also set-up a ten (10) tons per day capacity plant to process shea nuts into crude shea butter for export. The plant would operate at eighty percent (80%) of the installed capacity operating double shift of eight (8) hours for three hundred (300) days per annum.

  

An input ouput ratio of three point five (3.5) to one (1) kilogramme was assumed for shea nuts to crude shea butter. The product would be packaged in twenty-five (25) kilogramme / carton with PE inner bag. Spring Tech Farmhouse Limited (Thefarmhouseclub) would also operate an outgrower’s scheme whereby investors can invest in the cultivation, processing and export of soya beans, sesame seed and castor seeds to be located in Benue state. For the sesame seed, the size and locations of the farm is one hundred and ten (105) hectares. One hundred (100) hectares would be used for the farm while the remaining five (5) hectares would be used for the construction of the office, warehouse and other civil works.
At spacing of 60 cm by 10 cm by row, the farm would require four (4) kg per hectare and using improved seedling (NCRIBEN O1m (530-6-10) with a potential yield of one thousand (1,000) kilogramme per hectare and oil content of forty-five percent (45%)), the crop would mature in four (4) months with two production cycle per annum.

  
The farm would also have five (5) tons per hour capacity seed cleaning plant. Upon processing of the unclean sesame seed two percent (2%) of the product would be lost as admixture (dirt’s, stones and defective seeds). For the castor seed, the farm would be one hundred and ten (105) hectares and one hundred (100) hectares would be used for cultivation while five (5) hectares would be used for civil works and development. Castor is a seven (7) years crops and the maturity of the crop depends on the variety. Most of the improved cultivars mature in about five (5) - six (6) months after planting.

  
Generally, yield of any crop depends on factors like cultivar, soil type, irrigation, climate and cultural practice. On the average, castor can yield one (1) ton in the first year, one point five (1.5) tons in the second and third year and two (2) tons from the fourth (4th) year till the seventh (7th) year.
For the soya bean, the size and locations of the farm is one hundred and five (105) hectares. One hundred (100) hectares would be used for the farm while the remaining five (5) hectares would be used for the construction of the office, warehouse and other civil works.
The farm is expected to yield two and half (2.5) tons of soya bean per hectare with the use of improved seedling (TGX 1448-2E) which matures in four (4) months with two production cycle per annum.

  

This report seeks to examine the financial viability or otherwise of establising a commodity trading platform, cultivation, processing and export business in Nigeria. The required startup capital estimate of the business is ₦ 870,021,805.00 and it would be funded from thirty percent (30%) equity - ₦ 261,006,541.50 and seventy percent (70%) loan - ₦ 609,015,263.50. The loan would be used to finance our purchase of the product and the working capital.

  
The repayment plan is for five (5) years with a moratorium period of twelve (12) months, tax at thirty-two percent (32%) of net profit and the assumed interest rate for the loan is twenty-five percent (25%).

The proposed business would be operated by the promoter and the total manpower required to run the business is about forty (40) staffs.

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SUMMARY

International trade is very important in the expansion of the economy of a country because it allows for the development of markets, creates employment, reduces the rate of poverty, and breaks monopolies by discouraging the domination of a market by a few.

 

Export trade is a sub-division of international trade where goods produced in one country are transported to another country for sale or trade and as a crucial element of a country's economy, exports stimulate economic growth.  Export trade facilitates economic expansion, promotes international cooperation, improves the balance of payments and boosts foreign currency earnings. Despite the steady growth in the value of Nigeria's agriculture exports over the last three years (2016 to 2018), the country's agriculture exports to total exports remained below two percent (2%). Consequently, oil revenue continues to account for more than eighty percent (80%) of total value of annual exports. However, the agriculture industry contributed approximately twenty-five percent (25%) to total gross domestic product (GDP) in 2018 while the oil sector's share of total economic output was eight point six percent (8.6%) over the same period.

  

Since the agriculture sector is the largest contributor to Nigeria's gross domestic product (GDP), unlocking the potential of agricultural exports is key. Between 2016 and 2018, the country's total agriculture exports was driven by export of sesame seeds, fermented cocoa beans, cashew nuts, ginger, crude palm kernel oil, soya beans, frozen shrimps and prawns, among other commodities.

  

Cumulatively, the country earned ₦ 0.53 trillion from agriculture export between 2016 and 2018. In contrast, Nigeria's total agriculture import bill over the same period stood at N2.39 trillion. As a result, agriculture trade deficit stood at ₦ 1.86 trillion. In 2016, total agriculture exports stood at ₦ 60.7 billion or zero pijt seven percent (0.7%) of total exports for the period.
In 2017, total agricultural exports grew by one hundred and eighty pont seven percent (180.7%) over the previous year to close at ₦ 170.4 billion and it accounted for one point three percent (1.3%) of total exports. By 2018, agriculture exports increased by seventy-seven percent (77%) over 2017 to close at ₦ 302.3 billion, and accounted for one point six percent (1.6%) of total exports.

  

The country's total export has been driven by crude oil exports. In 2018, crude oil exports accounted for eighty-two point three percent (82.3%) of total export revenues while agriculture exports accounted for just one point six percent (1.6%). With the Federal Government's intent on diversifying the economy away from oil, there has been renewed interest in the agricultural sector as a critical sector to lead the charge.

  

The Asia region is the leading importer of Nigeria's agricultural commodities. The region accounted for fifty nine percent (59%) of total exports in 2018 (2017: fifty-two point seven percent (52.7%)). Europe – thirty-four point five percent (34.5%) and America – three point six percent (3.6%) are the second and third biggest markets for Nigeria's agricultural goods in 2018. However, both regions' share of exports in 2018 dropped from thirty-five pint nine percent (35.9%) and six point five percent (6.5%) respectively recorded in 2017. In absolute term, export value of agricultural goods to Asia in 2018, grew by one hundred and sixty-seven percent (167%), from ₦ 67.3 billion in 2017 to ₦ 179.6 billion. The growth was mainly driven by demands from Japan, India and China. Trade in agricultural goods between Nigeria and the rest of Africa is still relatively small compared to other regions of the world. Agricultural exports to other African countries declined by six percent (6%), from ₦ 4.1 billion in 2017 to ₦ 3.9 billion in 2018.

  

Sesame seeds, cashew nuts, fermented cocoa beans and superior quality raw cocoa beans – with combined total export value of ₦ 210.2 billion accounted for sixty-nine point five percent (69.5%) of total agriculture exports in 2018.
Nigeria has comparative advantage in the production cashew nuts, sesame seed, cocoa beans, shea nuts, castor seeds and hibiscus flower in Africa over her counterparts due to the large arable land available for production and condusive climatic condition.

  

Spring Tech Farmhouse Limited (Thefarmhouseclub) seeks to establish and run a commodities business linking producers and consumers of commodities with a system that supports a fair exchange of value and creates a trust economy where producers, processors and investors can fulfill their potential for increased productivity and wealth creation.

  

Spring Tech Farmhouse Limited (Thefarmhouseclub) would start with the export of cashew nuts, sesame seed, cocoa beans, shea nuts and hibiscus flower from Nigeria. Nigeria is the third largest producer of sesame seeds in the world after India and China and the largest in Africa with production capacity in excess of five hundred thousand (500,000) metric tonnes as at 2017. According to the Nigerian Institute of Food Science and Technology, about ninety-five percent (95%) of sesame output in Nigeria is exported.

  

According to the National Cashew Association of Nigeria (NCAN), Nigeria ranks as the sixth largest producer of cashew nuts in the world with average production capacity of one hundred and twenty thousand (120,000) metric tons per annum. Cashew is grown in about nineteen (19) states of the country comprising: Abia, Anambra, Akwa Ibom, Benue, Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Imo, Kogi, Niger, Nassarawa, Ogun, Osun, Oyo, Taraba and Kwara.

  

The export value of cashew nuts in Q2 2018 was ₦ 37.9 billion, representing forty-seven point five percent (47.5%) of the combined export value of cashew nuts for 2017 and 2018. The export value of cashew nuts was the highest among all agriculture products exported in Q2 2018. West Africa accounts for about seventy percent (70%) of global cocoa output. Cote d'Ivoire and Ghana combined, account for more than half of the world's total production.

  

Nigeria is the third largest cocoa producer in Africa. Data estimates from Statista, a statistics online portal, puts the country's total cocoa production at two hundred and forty-five thousand (245,000) tonnes in 2016/2017 which is less than one-third of Ghana's production level.

  

Hibiscus (or bissap, as it is called in Senegal) is a valuable and versatile crop whose brightly coloured, star-shaped flowers are prized for their tart flavor, and can be made into a long list of by-products. Hibiscus jellies, jams, fruit pastes, traditional medicines, teas, syrups and refreshing drinks can be found in almost every market stall in West Africa. These beautiful flowers have a high concentration of vitamin C and have been proven to medically reduce high blood pressure. Spring Tech Farmhouse Limited (Thefarmhouseclub) would procure, package and ship thirty-six (36) tons of sesame seed, twenty-four (24) tons of dry hibiscus flower, thirty-six (36) tons of cashew nuts  and twenty-four (24) tons of dry cocoa beans on a free on board (FOB) basis monthly. The products would be shipped in twenty (20) FT container and forty (40) FT containers. For sesame seed, eighteen (18) tons would fill twenty (20) FT container, twelve (12) tons would fill twenty (20) FT container for dry hibiscus flower and twenty-two (22) tons of dry split ginger for forty (40) FT container. Packaging would be in Polypropylene (PP) woven sacks of twenty-five (25) kilogramme for dry hibiscus flower and fifty (50) kilogrammes for sesame seed, cashew nuts and cocoa.

  

Spring Tech Farmhouse Limited (Thefarmhouseclub) would also set-up a ten (10) tons per day capacity plant to process shea nuts into crude shea butter for export. The plant would operate at eighty percent (80%) of the installed capacity operating double shift of eight (8) hours for three hundred (300) days per annum.

  

An input ouput ratio of three point five (3.5) to one (1) kilogramme was assumed for shea nuts to crude shea butter. The product would be packaged in twenty-five (25) kilogramme / carton with PE inner bag. Spring Tech Farmhouse Limited (Thefarmhouseclub) would also operate an outgrower’s scheme whereby investors can invest in the cultivation, processing and export of soya beans, sesame seed and castor seeds to be located in Benue state. For the sesame seed, the size and locations of the farm is one hundred and ten (105) hectares. One hundred (100) hectares would be used for the farm while the remaining five (5) hectares would be used for the construction of the office, warehouse and other civil works.
At spacing of 60 cm by 10 cm by row, the farm would require four (4) kg per hectare and using improved seedling (NCRIBEN O1m (530-6-10) with a potential yield of one thousand (1,000) kilogramme per hectare and oil content of forty-five percent (45%)), the crop would mature in four (4) months with two production cycle per annum.

  
The farm would also have five (5) tons per hour capacity seed cleaning plant. Upon processing of the unclean sesame seed two percent (2%) of the product would be lost as admixture (dirt’s, stones and defective seeds). For the castor seed, the farm would be one hundred and ten (105) hectares and one hundred (100) hectares would be used for cultivation while five (5) hectares would be used for civil works and development. Castor is a seven (7) years crops and the maturity of the crop depends on the variety. Most of the improved cultivars mature in about five (5) - six (6) months after planting.

  
Generally, yield of any crop depends on factors like cultivar, soil type, irrigation, climate and cultural practice. On the average, castor can yield one (1) ton in the first year, one point five (1.5) tons in the second and third year and two (2) tons from the fourth (4th) year till the seventh (7th) year.
For the soya bean, the size and locations of the farm is one hundred and five (105) hectares. One hundred (100) hectares would be used for the farm while the remaining five (5) hectares would be used for the construction of the office, warehouse and other civil works.
The farm is expected to yield two and half (2.5) tons of soya bean per hectare with the use of improved seedling (TGX 1448-2E) which matures in four (4) months with two production cycle per annum.

  

This report seeks to examine the financial viability or otherwise of establising a commodity trading platform, cultivation, processing and export business in Nigeria. The required startup capital estimate of the business is ₦ 870,021,805.00 and it would be funded from thirty percent (30%) equity - ₦ 261,006,541.50 and seventy percent (70%) loan - ₦ 609,015,263.50. The loan would be used to finance our purchase of the product and the working capital.

  
The repayment plan is for five (5) years with a moratorium period of twelve (12) months, tax at thirty-two percent (32%) of net profit and the assumed interest rate for the loan is twenty-five percent (25%).

The proposed business would be operated by the promoter and the total manpower required to run the business is about forty (40) staffs.

GOAL

STEPS

 BUDGET REQUEST

GOAL

The current goal for the project is to secure a strategically located warehouse where we can receive and store our tokenized agri produce from our cooperatives, for export through our web app.

STEPS

• Roadmap step 1
App testing

• Roadmap step 2
Implement PR/Marketing  campaign to create awareness and secure clients

• Roadmap step 3
Secure funds to purchase commodities for tekenisation and subsequently export

• Roadmap step 4
Launch!

 BUDGET REQUEST:

$45,000

worth of XLM

GOAL

 BUDGET REQUEST

The current goal for the project is to secure a strategically located warehouse where we can receive and store our tokenized agri produce from our cooperatives, for export through our web app.

$45,000

worth of XLM

OUR REQUEST

App testing = $5,000
PR/Marketing strategy = $20,000
Trading Funds = $20,000

• Roadmap step 1
App testing
-hire one or two software testers to test the app extensivley before launch

• Roadmap step 2
Implement PR/Marketing  campaign to create awareness and secure clients  
-Intro video (using stock footages)
-Explainer videos “how to”
-Newsletters writers
-Page creation / content development (copy and design) and management across platform
-Page/ content promotion
-2X Editorial review by seasoned agric /tech columnist
-Posting of stories on 3 selected high ranking blogs
-Virtual event
-Courtesy visits to stakeholders

• Roadmap step 3
Secure funds to purchase commodities for tekenisation and subsequently export
for smooth and seamless operations, we would need to have funds readyily available to source and purchase commodities once orders come in through the platform. Dealing with commodity producers is a cash and carry business so having "trading funds" is essential to optimal service delivery.

• Roadmap step 4
Launch!

PROBLEM & SOLUTION

1: Limited access to standardized and quality commodities

2: Prevalence of commodity wastage and losses

3: Value leakages in agricultural supply chain

4: Limited access to fair finance for farmers

PRODUCTS & SERVICES

Product 1 - Smart Store
Similar to the legacy warehouse receipt system (WRS), our smart store solution grants farmers and hedge funds the ability to store standardized export grade agricultural commodities in our audited
warehouses or accredited partner warehouses across the continent. These commodities are tokenised, ie; represented cryptographically on the stellar blockchain which serves as A much more secure and
faster way to trade the commodities, provide proof of ownership for the hedge funds and a more efficient way for farmers to access collateral backed finance.

Product 2 - Smart Swap
Decentralized ledger technology or more commonly known as blockchain, offers an improved way of trading commodities globally. Addressing issues of trust and complexity of transactions involving multiple
parties, our smart swap solution simplifies the commodity trading process for participating stakeholders by mapping the cumbersome legacy workflow involving multiple parties, into a succinct, transparent
and secure smart contract. Trade fiat currency for agricultural commodities and take delivery in a matter of a couple of clicks!

No items found.

^ to view all: hover over images and scroll down  ^

PRODUCTS & SERVICES

Product 1 - Smart Store
Similar to the legacy warehouse receipt system (WRS), our smart store solution grants farmers and hedge funds the ability to store standardized export grade agricultural commodities in our audited
warehouses or accredited partner warehouses across the continent. These commodities are tokenised, ie; represented cryptographically on the stellar blockchain which serves as A much more secure and
faster way to trade the commodities, provide proof of ownership for the hedge funds and a more efficient way for farmers to access collateral backed finance.

Product 2 - Smart Swap
Decentralized ledger technology or more commonly known as blockchain, offers an improved way of trading commodities globally. Addressing issues of trust and complexity of transactions involving multiple
parties, our smart swap solution simplifies the commodity trading process for participating stakeholders by mapping the cumbersome legacy workflow involving multiple parties, into a succinct, transparent
and secure smart contract. Trade fiat currency for agricultural commodities and take delivery in a matter of a couple of clicks!

PRODUCTS & SERVICES

Product 1 - Smart Store
Similar to the legacy warehouse receipt system (WRS), our smart store solution grants farmers and hedge funds the ability to store standardized export grade agricultural commodities in our audited
warehouses or accredited partner warehouses across the continent. These commodities are tokenised, ie; represented cryptographically on the stellar blockchain which serves as A much more secure and
faster way to trade the commodities, provide proof of ownership for the hedge funds and a more efficient way for farmers to access collateral backed finance.

Product 2 - Smart Swap
Decentralized ledger technology or more commonly known as blockchain, offers an improved way of trading commodities globally. Addressing issues of trust and complexity of transactions involving multiple
parties, our smart swap solution simplifies the commodity trading process for participating stakeholders by mapping the cumbersome legacy workflow involving multiple parties, into a succinct, transparent
and secure smart contract. Trade fiat currency for agricultural commodities and take delivery in a matter of a couple of clicks!

No items found.

^ to view all: hover over above images and scroll down  ^

PRODUCTS & SERVICES

Product 1 - Smart Store
Similar to the legacy warehouse receipt system (WRS), our smart store solution grants farmers and hedge funds the ability to store standardized export grade agricultural commodities in our audited
warehouses or accredited partner warehouses across the continent. These commodities are tokenised, ie; represented cryptographically on the stellar blockchain which serves as A much more secure and
faster way to trade the commodities, provide proof of ownership for the hedge funds and a more efficient way for farmers to access collateral backed finance.

Product 2 - Smart Swap
Decentralized ledger technology or more commonly known as blockchain, offers an improved way of trading commodities globally. Addressing issues of trust and complexity of transactions involving multiple
parties, our smart swap solution simplifies the commodity trading process for participating stakeholders by mapping the cumbersome legacy workflow involving multiple parties, into a succinct, transparent
and secure smart contract. Trade fiat currency for agricultural commodities and take delivery in a matter of a couple of clicks!

TARGET MARKET

One of the first activities when planning a tech enabled export business is to decide who will be the target customers.  With the kind of services we offer, our main target market would be other businesses (B2B). For example, manufacturing companies, ie - swiss chocolate factory looking to buy cocoa from Africa etc. a few businesses have been identified below:

CASHEW NUTS
Red River Foods, Inc.
9020 Stony Point Parkway, Suite 380
Richmond, VA 23235 USA
P: 804-320-1800, F: 804-320-1896
http://www.redriverfoods.com

MM Agro International
Address : “Shree Ram House” Jay Vijay Society Road,
Nr Vyapar Bhavan, Unjha-384170. Gujarat, India.
Phone No. : +91 2767 255466
Fax No.  : +91 2767 255466
Email  : info@mmagro.com
Skype : mmagrointernational
Contact Person : Hitesh Patel Chirag Patel Hiren Patel
+91 99250 17050 +91 98254 93143 +91 98798 21010
hitesh@mmagro.com chirag@mmagro.com hiren@mmagro.com

SWATHY ENTERPRISES
Post Bag no.2156,
Kollam 691013 , Kerala, India
Tel 91 474 2768048 / 2743965
Fax 91 474 2764030
email : swathyent@gmail.com  
santhosh@indiancashews.in
website : www.indian-cashews.com

REVENUE MODEL

Commodity export generally affords a 15-35 percent spread depending on the commodity in question. Higher margins can be achieved the higher up the value chain the
commodity goes. In our first year of operations, we will deal with 4 different commodities namely; cocoa beans, sesame seeds, hibiscus flower and cashew.

The current cost price per Metric Tonne for the commodities listed above from our partners (FOB) are as follows:
cocoa = $1750
cashew = $1165
hibiscus = $995
sesame = $1093

The current international selling price for the commodities listed above are as follows:
cocoa = $2560
cashew = $5960
hibiscus = $2000
sesame = $1700

Revenue per commodity based on projected trade volumes per month(24 tonnes each):
cocoa = $810 x 24 = $19,440
cashew = $4795 x 24 = $115,080
hibiscus = $1005 x 24 = $24,120
sesame = $607 x 24 = $14,616

Total Monthly income = $173,256

MARKET RESEARCH

International trade is very important in the expansion of the economy of a country because it allows for the development of markets, creates employment, reduces the rate of poverty, and breaks monopolies by discouraging the domination of a market by a few.

Export trade is a sub-division of international trade where goods produced in one country are transported to another country for sale or trade and as a crucial element of a country's economy, exports stimulate economic growth.  Export trade facilitates economic expansion, promotes international cooperation, improves the balance of payments and boosts foreign currency earnings.

Despite the steady growth in the value of Nigeria's agriculture exports over the last three years (2016 to 2018), the country's agriculture exports to total exports remained below two percent (2%). Consequently, oil revenue continues to account for more than eighty percent (80%) of total value of annual exports.

However, the agriculture industry contributed approximately twenty-five percent (25%) to total gross domestic product (GDP) in 2018 while the oil sector's share of total economic output was eight point six percent (8.6%) over the same period.

Since the agriculture sector is the largest contributor to Nigeria's gross domestic product (GDP), unlocking the potential of agricultural exports is key. Between 2016 and 2018, the country's total agriculture exports was driven by export of sesame seeds, fermented cocoa beans, cashew nuts, ginger, crude palm kernel oil, soya beans, frozen shrimps and prawns, among other commodities.

Cumulatively, the country earned ₦ 0.53 trillion from agriculture export between 2016 and 2018. In contrast, Nigeria's total agriculture import bill over the same period stood at N2.39 trillion. As a result, agriculture trade deficit stood at ₦ 1.86 trillion. In 2016, total agriculture exports stood at ₦ 60.7 billion or zero pijt seven percent (0.7%) of total exports for the period.
In 2017, total agricultural exports grew by one hundred and eighty pont seven percent (180.7%) over the previous year to close at ₦ 170.4 billion and it accounted for one point three percent (1.3%) of total exports. By 2018, agriculture exports increased by seventy-seven percent (77%) over 2017 to close at ₦ 302.3 billion, and accounted for one point six percent (1.6%) of total exports.

The country's total export has been driven by crude oil exports. In 2018, crude oil exports accounted for eighty-two point three percent (82.3%) of total export revenues while agriculture exports accounted for just one point six percent (1.6%).

With the Federal Government's intent on diversifying the economy away from oil, there has been renewed interest in the agricultural sector as a critical sector to lead the charge.

The Asia region is the leading importer of Nigeria's agricultural commodities. The region accounted for fifty nine percent (59%) of total exports in 2018 (2017: fifty-two point seven percent (52.7%)). Europe – thirty-four point five percent (34.5%) and America – three point six percent (3.6%) are the second and third biggest markets for Nigeria's agricultural goods in 2018.

However, both regions' share of exports in 2018 dropped from thirty-five pint nine percent (35.9%) and six point five percent (6.5%) respectively recorded in 2017. In absolute term, export value of agricultural goods to Asia in 2018, grew by one hundred and sixty-seven percent (167%), from ₦ 67.3 billion in 2017 to ₦ 179.6 billion. The growth was mainly driven by demands from Japan, India and China.

Trade in agricultural goods between Nigeria and the rest of Africa is still relatively small compared to other regions of the world. Agricultural exports to other African countries declined by six percent (6%), from ₦ 4.1 billion in 2017 to ₦ 3.9 billion in 2018.

Sesame seeds, cashew nuts, fermented cocoa beans and superior quality raw cocoa beans – with combined total export value of ₦ 210.2 billion accounted for sixty-nine point five percent (69.5%) of total agriculture exports in 2018.
Nigeria has comparative advantage in the production cashew nuts, sesame seed, cocoa beans, shea nuts, castor seeds and hibiscus flower in Africa over her counterparts due to the large arable land available for production and condusive climatic condition.

Spring Tech Farmhouse Limited (Thefarmhouseclub) seeks to establish and run a commodities business linking producers and consumers of commodities with a system that supports a fair exchange of value and creates a trust economy where producers, processors and investors can fulfill their potential for increased productivity and wealth creation.

Spring Tech Farmhouse Limited (Thefarmhouseclub) would start with the export of cashew nuts, sesame seed, cocoa beans, shea nuts and hibiscus flower from Nigeria.

Nigeria is the third largest producer of sesame seeds in the world after India and China and the largest in Africa with production capacity in excess of five hundred thousand (500,000) metric tonnes as at 2017. According to the Nigerian Institute of Food Science and Technology, about ninety-five percent (95%) of sesame output in Nigeria is exported.

According to the National Cashew Association of Nigeria (NCAN), Nigeria ranks as the sixth largest producer of cashew nuts in the world with average production capacity of one hundred and twenty thousand (120,000) metric tons per annum. Cashew is grown in about nineteen (19) states of the country comprising: Abia, Anambra, Akwa Ibom, Benue,
Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Imo, Kogi, Niger, Nassarawa, Ogun, Osun, Oyo, Taraba and Kwara.

The export value of cashew nuts in Q2 2018 was ₦ 37.9 billion, representing forty-seven point five percent (47.5%) of the combined export value of cashew nuts for 2017 and 2018. The export value of cashew nuts was the highest among all agriculture products exported in Q2 2018. West Africa accounts for about seventy percent (70%) of global cocoa output. Cote d'Ivoire and Ghana combined, account for more than half of the world's total production.

Nigeria is the third largest cocoa producer in Africa. Data estimates from Statista, a statistics online portal, puts the country's total cocoa production at two hundred and forty-five thousand (245,000) tonnes in 2016/2017 which is less than one-third of Ghana's production level.

Hibiscus (or bissap, as it is called in Senegal) is a valuable and versatile crop whose brightly coloured, star-shaped flowers are prized for their tart flavor, and can be made into a long list of by-products. Hibiscus jellies, jams, fruit pastes, traditional medicines, teas, syrups and refreshing drinks can be found in almost every market stall in West Africa.

These beautiful flowers have a high concentration of vitamin C and have been proven to medically reduce high blood pressure.

THREATS & OPPORTUNITIES

COMPETITION

All other agri export companies are our competition. However, what differenciates us from the compitition is our mode of transaction. Our competitors ustilize traditional means of international trade which is cumbersome and expensive. Ie; a Letter of Credit is used to receive payments from our competitors clients whereas, we tokenize our agri produce, allowing us to bypass the use of L/Cs for payment. this is not only a faster means of payment but it saves our clients money. the average cost of raising an L/C for international trade ranges from 1% of the face value of the instrument up to 10% depending on country and bank in question. Therefore, we are able to deliver same quality agri produce as our competition at cheaper rates.


MARKETING & SALES

We intend to Steer clear of cliché style communication, by communicating a single-minded message in a disruptive way to make us stand out. We would use  digital PR as the spine for our communication. We would advertise our product and service on b2b website, chambers of commerce and trade houses to identify reputable commodity importers.We would also offer discount on our product as part of our strategies to attract and keep customers.

COMMUNICATION APPROACH
• Videos
Create an intro video and short snackable explainer videos deployed across online video networks.
• Email newsletter,
Segment specific newsletter
• Social media engagements
Engagement and listening via own channel (Linkedin, Facebook, Tweitter, Instagram)
Long-form articles deployed periodically that inform the target audience about Thefarmhouseclub.
• Public relations
word of mouth and press conferences with relevant stakeholders
• Launch event

COMMUNICATION TOUCH POINTS
• Farmhouse club, the best agro product online distributon plaform
• The nexus between agriculture and technology
• Revolutionary approach to agro product distribution and supply chain
• Bridging the gap between farmers and consumers
 
KEY PR CHANNELS
Blogsites
Agriculture/Tech blogs
Newspapers/magazines
Offline events


RESOURCES & RELATIONSHIPS

We have strategic partnerships with some agriculture based cooperatives, farmer assosiations and accredited warehouses where we source quality agricultural produce to be tokenised on the stellar blockchain for the export market.

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About you

Thefarmhouseclub

Thefarmhouseclub provides simple and intuitive tools to facilitate the integration of African agri-produce into global supply chains using the stellar blockchain network Farmers, Financiers, off-takers and all other stakeholders now have a unified secure platform with which to transact transparently and efficiently with reduced friction and less cost all together, ultimately resulting in eco-friendly agriculture and fairer trade.

COMMUNITY DISCUSSION