PROJECT DESCRIPTION
The business project consists of eight (8) private sector shareholders from South Africa and Malawi. The project involves manufacturing of various types of fertilizers that Malawi has specified for farmers in the country, and distributing these fertilizers through all the depots (1030) of the Agriculture Development and Marketing Corporation (ADMARC) Ltd through an MOU that was signed between the two parties.
Objective of the Project
The project aims to provide smallholder farmers in Malawi and the Eastern/Southern African countries with affordable and more potent fertilizer technology than has ever been possible by anyone before.
Sector of Operation:
Manufacturing sector.
Business Activity:
The project involves the manufacturing and sale of various fertilizers throughout Eastern and Southern Africa. Urea Gold Fertilizers Limited, is the only company in Sub-Sahara Africa with the specialized technology of slow-nutrient-release fertilizers. We manufacture these fertilizers at affordable costs for smallholder farmers to afford everywhere.
LOCATION
Actual Project Location
Our fertilizer factory is located in Lumbadzi, Lilongwe, Malawi.
Prominent business activity surrounding your place of operation
The factory being located in the Central Region of the country means we are located in the heart of Malawi’s agriculture industry. It carries the bulk of agriculture production of the country. apart from that, it allows us to be within easy reach by farmers from the Northern Region and Southern Region of the country.
BENEFITS OF THE PROJECT AND ITS ALIGNMENT TO MALAWI GOVERNMENT’S GOALS
Contribution to achieving national, regional or global economic, social, environmental and developmental goals
As a fertilizer manufacturing company, we will be able to uplift Malawi’s agriculture production tremendously, as well as the agriculture production of other Eastern/Southern African states, and increase food production for all these African countries.
Export orientation/forex generation
Since our SCU fertilizers are not manufactured by any other company in sub-Sahara Africa, there are tremendous fertilizer export opportunities across East/Southern Africa, as well as Central Africa and West Africa which Malawi will therefore stand to benefit from our exports to other African countries and earn enormous foreign-exchange for the country.
Import Substitution
Fertilizer is one of the main imports of the country. By undertaking this project, Malawi will save tremendously from its current foreign exchange usage by companies who import various fertilizer substances into the country.
FINANCIAL REQUIREMENTS
Capital Expenditure Requirements:
The project promoters have spent over US$750,000 in the purchasing of manufacturing machines which are installed in the factory at present. Over US$250,000 in development costs has been spent during the past 5-7 years.
New CAPEX required: US$500,000 to purchase additional machinery to enable semi-automation of the production processes. This new funding will entail that the new investors will take up 30% equity in the project.
Working Capital Requirement:
Required US$1,600,000 as a production 5–7-year loan from international investors.
Commodity financing of US$34,740,188 in the first 1-2 years, financed by international investors. [This production loan is repayable in the same year]
Proposed Financing Structure:
Equity = US$500,000 = 30% shareholding for new investors. This will go towards CAPEX in year 1.
Raw material purchases from an International Loan for the 1-2 years = US$34,740,188 repayable in the same production year 1-2.
Long-Term (5-7-years) International Investor Loan = US$1,600,000 for additional production machines, in the next 3-4 years.
Proposed Investment Model
New investor(s) to sign Investment Agreement with existing shareholders of Urea Gold Fertilizers Limited, and commit the US$500,000 thereafter, and legally take up 30% equity. The balance of the financing will be secured through local Banks who are already interested to provide some funding.
There is a remote opportunity that a Public-Private Partnership (PPP) arrangement maybe achieved, with ADMARC Ltd joining our operations as a shareholder. Such an arrangement would serve to cut down the marketing costs of the project. ADMARC’s Board of Directors and the Malawi Government have yet to make a decision on the matter.
Accumulated Retained Earnings: Year 1 = $4,075,618; Year 2 = $12,259,330; Year 3 = $28,998,730; Year 4 = $46,267,085; Year 5 = $64,621,771; Year 6 = $92,514,880; Year 7 = $123,234,635.
PROJECT’S FEASIBILITY
Technical Feasibility
The technical Feasibility documents have been completed by the Project Developer/Promoter.
Feasibility Study
Local feasibility studies were conducted successfully, and Malawi Bureau of Standards granted necessary approvals for the commercial manufacturing of NPK fertilizers in 2018, after trial operations were conducted successfully.
Environmental Impact Assessment
An environmental impact assessment was conducted by professional environmentalists, and a certificate of approval was granted by the Malawi Government’s Department of the Environment.
Technical Designs
All technical designs and production machines’ setup, process operation’s designs were done by the project promoters
Licenses
All necessary project licenses have been granted by relevant authorities.
Market Feasibility Study
Extensive market feasibility studies have been carried out.
Financial Feasibility
Project’s NPV = $48,580,768, Project’s IRR = 640%, Annual Net-Worth of the Company = $48,117,308 per year on average, ROI or ROE = 212% annually. Growth Rate = 121% per year RONA = 30%, % Equity = 62%, Current Ratio = 2 times and Acid Test Ratio = 2 times
CONTACTS
Our Attorney & Secretary: Mr. Likhwa R. Mussa, K D Freeman & Associates, Area 14, Lilongwe Our Address: Lumbadzi ADMARC Buildings, Lilongwe. P. O. Box 31288, Capital City, Lilongwe 3, Republic of Malawi E-Mail: This email address is being protected from spambots. You need JavaScript enabled to view it.; Cell: + (265) 993-404-090; and + (265) 885-580-930
The business project consists of eight (8) private sector shareholders from South Africa and Malawi. The project involves manufacturing of various types of fertilizers that Malawi has specified for farmers in the country, and distributing these fertilizers through all the depots (1030) of the Agriculture Development and Marketing Corporation (ADMARC) Ltd through an MOU that was signed between the two parties.
Objective of the Project
The project aims to provide smallholder farmers in Malawi and the Eastern/Southern African countries with affordable and more potent fertilizer technology than has ever been possible by anyone before.
Sector of Operation:
Manufacturing sector.
Business Activity:
The project involves the manufacturing and sale of various fertilizers throughout Eastern and Southern Africa. Urea Gold Fertilizers Limited, is the only company in Sub-Sahara Africa with the specialized technology of slow-nutrient-release fertilizers. We manufacture these fertilizers at affordable costs for smallholder farmers to afford everywhere.
LOCATION
Actual Project Location
Our fertilizer factory is located in Lumbadzi, Lilongwe, Malawi.
Prominent business activity surrounding your place of operation
The factory being located in the Central Region of the country means we are located in the heart of Malawi’s agriculture industry. It carries the bulk of agriculture production of the country. apart from that, it allows us to be within easy reach by farmers from the Northern Region and Southern Region of the country.
BENEFITS OF THE PROJECT AND ITS ALIGNMENT TO MALAWI GOVERNMENT’S GOALS
Contribution to achieving national, regional or global economic, social, environmental and developmental goals
As a fertilizer manufacturing company, we will be able to uplift Malawi’s agriculture production tremendously, as well as the agriculture production of other Eastern/Southern African states, and increase food production for all these African countries.
Export orientation/forex generation
Since our SCU fertilizers are not manufactured by any other company in sub-Sahara Africa, there are tremendous fertilizer export opportunities across East/Southern Africa, as well as Central Africa and West Africa which Malawi will therefore stand to benefit from our exports to other African countries and earn enormous foreign-exchange for the country.
Import Substitution
Fertilizer is one of the main imports of the country. By undertaking this project, Malawi will save tremendously from its current foreign exchange usage by companies who import various fertilizer substances into the country.
FINANCIAL REQUIREMENTS
Capital Expenditure Requirements:
The project promoters have spent over US$750,000 in the purchasing of manufacturing machines which are installed in the factory at present. Over US$250,000 in development costs has been spent during the past 5-7 years.
New CAPEX required: US$500,000 to purchase additional machinery to enable semi-automation of the production processes. This new funding will entail that the new investors will take up 30% equity in the project.
Working Capital Requirement:
Required US$1,600,000 as a production 5–7-year loan from international investors.
Commodity financing of US$34,740,188 in the first 1-2 years, financed by international investors. [This production loan is repayable in the same year]
Proposed Financing Structure:
Equity = US$500,000 = 30% shareholding for new investors. This will go towards CAPEX in year 1.
Raw material purchases from an International Loan for the 1-2 years = US$34,740,188 repayable in the same production year 1-2.
Long-Term (5-7-years) International Investor Loan = US$1,600,000 for additional production machines, in the next 3-4 years.
Proposed Investment Model
New investor(s) to sign Investment Agreement with existing shareholders of Urea Gold Fertilizers Limited, and commit the US$500,000 thereafter, and legally take up 30% equity. The balance of the financing will be secured through local Banks who are already interested to provide some funding.
There is a remote opportunity that a Public-Private Partnership (PPP) arrangement maybe achieved, with ADMARC Ltd joining our operations as a shareholder. Such an arrangement would serve to cut down the marketing costs of the project. ADMARC’s Board of Directors and the Malawi Government have yet to make a decision on the matter.
Accumulated Retained Earnings: Year 1 = $4,075,618; Year 2 = $12,259,330; Year 3 = $28,998,730; Year 4 = $46,267,085; Year 5 = $64,621,771; Year 6 = $92,514,880; Year 7 = $123,234,635.
PROJECT’S FEASIBILITY
Technical Feasibility
The technical Feasibility documents have been completed by the Project Developer/Promoter.
Feasibility Study
Local feasibility studies were conducted successfully, and Malawi Bureau of Standards granted necessary approvals for the commercial manufacturing of NPK fertilizers in 2018, after trial operations were conducted successfully.
Environmental Impact Assessment
An environmental impact assessment was conducted by professional environmentalists, and a certificate of approval was granted by the Malawi Government’s Department of the Environment.
Technical Designs
All technical designs and production machines’ setup, process operation’s designs were done by the project promoters
Licenses
All necessary project licenses have been granted by relevant authorities.
Market Feasibility Study
Extensive market feasibility studies have been carried out.
Financial Feasibility
Project’s NPV = $48,580,768, Project’s IRR = 640%, Annual Net-Worth of the Company = $48,117,308 per year on average, ROI or ROE = 212% annually. Growth Rate = 121% per year RONA = 30%, % Equity = 62%, Current Ratio = 2 times and Acid Test Ratio = 2 times
CONTACTS
Our Attorney & Secretary: Mr. Likhwa R. Mussa, K D Freeman & Associates, Area 14, Lilongwe Our Address: Lumbadzi ADMARC Buildings, Lilongwe. P. O. Box 31288, Capital City, Lilongwe 3, Republic of Malawi E-Mail: This email address is being protected from spambots. You need JavaScript enabled to view it.; Cell: + (265) 993-404-090; and + (265) 885-580-930