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Making
the investment case
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Tactical
approach to our investments
One of
the key issues to financial success in commercial agriculture
is to establish highest values for the sale of your produce.
In much of Africa this is difficult in that because of the poverty
of the region there is precious little demand for high value
crops, such as herbs and spices. Furthermore, low value crops,
such as maize or potato, are uneconomic to produce given transportation
costs to major markets. We have a number of advantages dealing
with this problem:
| • | as
a UK based enterprise, albeit operating in Africa, we
are connected to principal buyers across Europe and the
Far East. As a volume and reliable producer there is strong
demand for our output in high value crops, such as paprika
and chillies | | • | because
we are business driven we always seek to optimise profit.
We are therefore aiming to establish food processing plants
next to our farms, capturing more profit and creating
far greater certainty of crop value at our own farm gates.
This moves forecast profits to over 80% per annum* | | • | farm
gate food prices are subjected to considerable abuse from
‘middlemen’. In our experience, the result
of these middlemen leaves Malawi farm gate prices representing
just 1% of the final price paid by a consumer and it is
this, more than anything else, that keeps Malawi’s
rural people poor. As we are a major supplier we can ignore
these individuals and firms but we are raising this issue
politically in the UK. By demanding a fairer share of
the consumer price we can lift our profits still further,
allowing for better wages and crop prices for the people
we engage with. | | | * Source:
Africa Invest Malawi Limited / cru Investment Management
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