AgriGrowth Presentation

Discussion Document Agriculture and Agro-Processing Investments

Strictly private and confidential

September 2014

Extensive opportuni.es to increase food availability through reduc.on in food wastage (60%)

and increases in produc.vity (precision farming 300% yield increase) Growing demand for food from Southern Africa , one of the worlds key bread basket

regions

Increasing concerns around food security and its impact on socio-poli.cal stability Global retailers and food wholesalers demand driven

THESIS

Investment Thesis and Opportunity

OPPORTUNITY

Deep, sustainable, responsible investment (SRI) into agricultural value chains. Investment targets must either be par.cipa.ng in, or have poten.al to par.cipate in the

whole agricultural value chain, from primary agriculture to consumer shelf, and, preferably where opportunity exists to value-add to exis.ng waste streams.

Ini.al investment at a point in the value chain, secondary investment up and down the chain whilst improving business process eciency, developing new products through benecia.on of waste streams where possible and eec.vely expanding such value chain into new markets.

AMrac.ve investment returns with increased margins and product diversica.on from integrated supply chain, mi.ga.ng key investment risks.


Sustainable, Responsible Impact Investment (SRI)

Sustainable, responsible, impact inves.ng (SRI) is an investment discipline that considers environmental, social and corporate governance (ESG) criteria to generate long-term compe..ve nancial returns and posi.ve societal impact.

ESG incorpora.on as an investment strategy means the considera.on of environmental, community, other societal and corporate governance (ESG) criteria in investment analysis in combina.on with the tradi.onal nancial analysis.

Def

init

ion

Str

ateg

y

According to the US SIF Founda3ons 2012 Report on Sustainable and Responsible Inves3ng Trends in the United States, as of year-end 2011, more than one out of every nine dollars under professional management in the United States$3.74 trillion or morewas invested according to SRI strategies.


Success of SRI lies in Key Enablers across the Value Chain

Control of primary supply stream Diversify stream Greater purchasing power Utilisation of waste

Profitability through Waste Beneficiation Efficiency through Capitalization Leverage technology

Individuals Community Environment

Focused and Accountable Inclusive and Transparent Local Supplier Development Equal opportunities

Diversified income stream In-depth understanding of the Market Data driven pursuit of "Demand Spaces

Efficient and constant supply

Engaged Employees & Communities

Making a True Difference

Innovation for Advantage

Driven by Market Insights

Investment return expected to be in excess of 15% annualized with a *10 year investment horizon for Investors. *preferred

Robust commercial returns through demand driven approach, key linkages and integration in the supply-chain giving access to multiple local and global markets.

Combine strong commercial returns with deep RSI highly sustainability investment returns.

Expertise and experience of the agricultural and food supply-chain, its various stages, parallel routes to market and development collateral opportunities.

Local presence and in-depth operational knowledge and expertise.

Rigorous investment management strategies to limit key risks and provide mitigation.

Proven track record of management. Agrigrowth will focus its investment efforts on deep RSI and assign its management to target companies to assist in identifying and delivering operational optimisation and drive the growth process.

AgriGrowth Presenta.on to Copyright 2012 Calico Capital and Associates

Investment Objectives

Copyright 2012 Calico Capital and Associates

Investment Criteria

Evaluate Targeted Investments against the following criteria: Normal financial investment criteria RSI criteria Ability to expand upstream and downstream, through acquisitive as well as organic expansion Capacity to include community Ability to benefit from regenerative agricultural practices.

Invest in Target with selected synergistic investment partners

Actively manage investments to: Deliver forecasts Deliver RSI commitments Expand across the supply chain, capturing as much of the value curve as possible Optimize process efficiency (including production capacity through regenerative agricultural practices) Develop alternative products from waste streams, focusing on nutritional and pharmaceutical value

Consider exits to Trade Buyers seeking a zero waste integrated supply chain producing a variety of product within the nutritional and pharmaceutical industries.

AgriGrowth Presenta.on to


Pineapple Supply Chain Investment N

DLA

MB

E N

AT

UR

AL

IND

US

TR

IAL

PR

OD

UC

TS

Farming Capacity increase: Exis3ng 4,000 hectare to 8,000 hectare dry land

Employment increase: Exis3ng 1,100 employees - Permanent and Seasonal To 2,300 employees - Permanent and Seasonal

Business Growth: Current Turnover R130m and prot R-3m To Turnover R450m and Prot R100m


Pineapple Supply Chain Investment W

hy t

he P

inea

pple

Ind

ustr

y

u Barriers to Entry Ownership of value chain through contracted growers who have a

signicant equity stake in the business.

u Value Chain Primary produc.on of pineapples, conversion to pineapple juice

concentrate (PJC) and asep.cally packed raw juice (NFC). Conversion of fruit process waste into dietary bre and agricultural biomass (plant material) into bromelain and micro-crystalline cellulose.

u Access to Market Currently supply 85% to Europe and South America (Cargill, Coca Cola et

al) and 15% local (Ceres Juices et al). Dietary bre and other waste to value-add product markets being developed.

u Access to Raw Material Currently low (65,000mt/annum), but signicant expansion opportuni.es

exist on previous pineapple land (140,000mt).

u Impact on Communi3es Currently employing circa 1,100 full .me employees and 500 seasonal

workers in value chain. Value add projects will add 1,200 to 1,500 jobs in a rural area where unemployment rate is 76%.


Bus

ines

s M

odel

u Products Pineapple Juice Concentrate (PJC), Asep.c Raw Pineapple Juice (NFC),

Pineapple Dietary Fibre (DF), Micro-Crystalline Cellulose (MCC), Bromelain.

u Target Market Food/beverage ingredient and nutra/pharmaceu.cal companies.

u Compe33ve Advantage Ver.cal value chain, innova.on through value addi.on to waste

opportuni.es

u Combine FYE2014 nancial highlights Rev 133,9m Opera.ng - Prot R-3,2m (2015 R15m) Assets R191m - Liabili.es R86m

u Management Team Average length of employment 20 years

u Current Achievements Pineapple dietary bre world rst, limited commercial scale up. MCC and Bromelain advanced pilot stage co-opera.on agreement with

Du Pont. R30m grant funding awarded from EU via DTI for DF, MCC and Bromelain

Pineapple Supply Chain Investment


Pineapple Supply Chain Investment In

vest

men

t O

ppor

tuni

ty

u Investment Required Circa R35m ini.al investment required, ul.mately circa R300m to grow to

a fully integrated business with a turnover of R450m.

u Use of Funds Acquire shares in HoldCo to enable controlling interest in combina.on

with aligned par.es, acquire controlling stake in 2nd largest primary agricultural opera.on.

u Poten3al Exits Sale to poten.al strategic partners (such as Du Pont) Sale to Trade Buyer

u Investment Returns Es.mated 30% ROI over 5 years but models need to be nalised.

u Impact on Communi3es Employee trust currently holds 26% equity in HoldCo. Targe.ng a transac.on with DRDLR to include workers in primary

agriculture and relocated processing factory in centre of produc.on area. Employment opportuni.es to the local community.

Vegetable Supply Chain Investment LI

JAN

I B

OE

RD

ER

Y

Farming Capacity increase: Exis3ng 240 Hectare - Pivot Irriga3on To 800 Hectare - Pivot Irriga3on Total Farm Land owned > 2500ha

Employment increase: Exis3ng 250 employees - Permanent and Seasonal To 400 employees - Permanent and Seasonal

Business Growth: Current Turnover R40m and Prot R6,3m To Turnover R240m and Prot R40m


Vegetable Supply Chain Investment W

hy t

he V

eget

able

Ind

ustr

y

u Barriers to Entry geographically bound due to price/transport dieren.al. Lijani Boerdery

is situated in Gauteng, at the market.

u Value Chain Lijani Boerdery already produce vegetables, wash and pack for retailers

and produced pickled vegetables under the Gold Crest and Pick n Pay brands

u Access to Market Currently supply retailers Woolworths, Shoprite, Fruit n Veg, Spar and

Pick n Pay as well as producing own brands for smaller resellers and fresh produce market. Have packing agreements with Gold Crest and Pick n Pay with the ability to expand to other brands

u Access to Raw Material Currently access to arable land and irriga.on is Lijanis only limita.on.

u Impact on Communi3es Lijani is currently employing circa 150 full .me employees and 100

seasonal workers. The project will at least double this employment.


Vegetable Supply Chain Investment B

usin

ess

Mod

el

u Products Carrots, Cabbage, LeMuce, Maize and Wheat as well as Beef

u Target Market Retailers and Food Services Industry with fresh and processed vegetables

u Compe33ve Advantage Proximity to Market, Size (cri.cal mass), Experience, ver.cal integra.on

and Reputa.on

u Combine FYE2013 nancial highlights Rev 48,9m Opera.ng - Prot R5,92m Assets R74,7m - Liabili.es R29,4m

u Management Team Farming since 1989. Started on 152ha

u Current Achievements Farming 2045ha - 240ha under irriga.on and vegetables. Secured Gold Crest and Pick n Pay pickled vegetable contracts. Owns Chalmer Beef Feedlot, capacity 12 000 caMle. 500 caMle in feedlot.


Vegetable Supply Chain Investment In

vest

men

t O

ppor

tuni

ty

u Investment Required Circa R25m ini.al investment required ul.mately circa R75m to growth to

a fully integrated business with a Turnover of R240m.

u Use of Funds Acquire shares in Lijani Boerdery and Proper.es and inject working capital

to fuel acquisi.on of land and growth.

u Poten3al Exits Consolida.on with other synergis.c businesses Sale to Trade Buyer

u Investment Returns Es.mated 31% ROI over 5 years but models need to be nalised.

u Impact on Communi3es Targe.ng a transac.on with DRDLR to include Workers in Shareholding

Structures Employment opportuni.es to the local community.


Other Supply Chain Investment P

oten

tial

Tar

gets

: ME

AT

Target Criteria:

Protable Feedlot with Working Capital to sustain growth Capacity and Op.ons to expand via Ver.cal Integra.on Preferen.al/ Secure Access to animals Experienced Management Team Niche Access to Markets


Other Supply Chain Investments P

oten

tial

Tar

gets

: Fru

it

Target Criteria:

Protable Fruit Processors Capacity and Op.ons to expand via Ver.cal Integra.on Valuable Waste stream available Preferen.al/ Secure Access to Fruit Op.on to engage in Corporate Farming Niche Access to Markets

Design Quarter Corner William Nicol Road and Leslie Ave. Fourways 2128

A

P.O. Box 3845 Dainfern 2055

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Tel: 046 624 2228 Fax: 086 696 4595 Email: [email protected]

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Documents

AgriGrowth Presentation