Round 8
Winner
Thefarmhouseclub
by

Agritech platform, tailored towards the advancement of African agri commodities export.

Budget request:  
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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!

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Previous Project(s)
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Progress so far
Goals

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.

To get there, we  will use our requested budget of  
*
  to:

• 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!

Overview

Problem and 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


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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Team