A VERTICALLY INTEGRATED LIVESTOCK & MEAT PRODUCTION PROJECT IN TANZANIA - INITIATED BY AN ONSITE SHARE FARMING OPERATION AND LARGE SCALE EXPORT FOCUS.

 

PHASE 1: Focusing on Share farming:

 

To kick-off the operations in Tanzania with the least possible risk, we intend on focusing on contract and share farming agreements. We already have plenty of potential land owners to work with in Tanzania, including an immediate 5,000 hectares in Tanga and another 5,000 hectares in Rufiji - with whom we already have signed pre-agreements. The reason we focus on Contract and Share agreements is to avoid particularly difficult land ownership issues in Tanzania, which can be end up taking too much time, become too troublesome and they have already proven to have been the downfall of many foreign farming projects in Tanzania. Having said that, we are not forgetting our ambition of owning land in Tanzania - we will get there one day - but in order to mitigate our risk we know we would do well by starting out in Tanzania without land ownership - rather just own the equipment, the machinery and the management and move from land to land (via 5 year contract or so) in order to cultivate or manage the land of others.

 

Once we have invested in the required machinery and equipment  we will engage with local farm owners, as well as – and especially – with Government held land banks across the country. Simple Share Farming is not unknown in Africa, but it is yet to be achieved in the way we understand it in Australia. The advantages of contract or share farming would totally prevent 'locals' from accusing us of some sort of land grabbing scheme, because the land would remain in the control of the Government or local owners fair and square - and we would always be able to separate ourselves from complicated farmers or issues - by taking our equipment and leave without suffering important loses. Our job will be - until we one day acquire our own lands - to have access to the necessary machinery, mechanization, farming know-how and input technology to transform unused, or simply totally underachieving land masses, to a state of stable broad acre food producing fields. We know today of an estimate 400,000 hectares of totally unused (or underachieving) agricultural land that could be simply and quickly converted, of which the owners of a total of 70,000 hectares have already been contacted and engaged with for further eventuality.

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All our crops can be sold locally or to international traders at competitive prices.

 

PHASE 2:  Focusing on Feed production:

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Now that we are on full control over our own crops, we can start focusing on the production of high quality animal feeds. Animal feeds in Tanzania are of terrible quality, creating a major problem in the Tanzania livestock industry as efficient and nutritious feeds are difficult to come by for animals. Animals cannot properly put on weight, cows cannot produce enough milk, etc. It is a problem and the need for feed across Africa is growing rapidly. While the quality feeds that we produce can be sold direct on the market - as well to the middle east, where they are in big demand as well - the purpose of our feed production is mainly for growing our own livestock. In general, feed costs make up 70 - 80% of the total costs of livestock production - and monitoring and close control of this aspect is essential for profitable livestock projects anywhere in the world. The composition of our raw materials and the formulation of our feed will be aimed at producing a highly balanced feed, designed to provide our own animals with their daily requirements of nutrients at the minimum feasible cost. The sequence, the size and the sophistication of the equipment needed will vary with the output of feed required as well as differences in livestock, know-how and expertise.

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PHASE 3: Focusing on the Australian feedlot system:

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As we grow in size, increase our control of crops and animal feed, we will need to improve the quality of our LIVE livestock exports. Currently, only 2% of all livestock are raised on commercial farms and only few animals are actually fattened before being slaughtered. We will set up some Australian feedlots for the purpose of fattening our animals in a professional way and purposefully work on tenderizing the meats from the production onwards. We will strive to produce the best animals in the region and work at becoming a recognized brand for quality animals in the Middle East in particular.   

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It has been observed in other parts of the world, such as Asia, that dietary habits change with the rising affluence, as it leads to higher consumption of quality meats. We are fully expecting to see the same results in Africa, where the population will double in next 30 years, from 1 billion people to 2 billion people. It is imperative to optimize our animal production and ready ourselves, over time, for a booming local market, which will become more and more demanding as affluence inevitably rises in sync with population growth.

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PHASE 4: Focusing on LIVE exports to the Middle East:

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If you take a look at the livestock ‘export’ activities in Somalia, it is easy to understand why Tanzania could become a major competing livestock hub. Tanzania will not be doing the same volume any time soon, but the main goal would to immediately start supplying a much better quality of livestock, than Somalia - and focus on quick LIVE exports to the Middle East. Tanzania has the 3rd largest livestock population in Africa, and the country is much better predisposed to produce quality cattle than Somalia ever will be. Not only is there a safety issue in Somalia, but there is water issues and major feed shortages, which really provides for poor quality livestock over all. However, this industry still represents close to USD 1 Billion per year for Somalia. To get into the livestock industry easily and without major costs, we would start with a simple collection point, with a good animal selection process - and a quarantine station where we can ready animals for direct export. 

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PHASE 5: Focusing on meat production:

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The Middle East right now is one of the fastest growing food markets in the world with many GCC countries importing more than 90 per cent of all their food requirements. This market will continue to represent a good opportunity for Halal meats especially; and while Brazilian and US beef remains the favorite in the Middle East, the Australian and New Zealand beef remains the more exclusive. We believe the quality we can produce - with much less road to travel than any of these producers - can be a good option for buyers in the Middle East as long as we remain very quality and price aware. 

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Locally - in spite of having a large livestock population - Tanzania produces no quality meat – all quality meats are 'imported' - to the extent that Chicken meat is still more expensive, than beef today. The quality is so poor that is causes huge sanitary and health problems, but also generates an almost total deficiency in the much needed protein chain across Tanzania. In order to improve this, a number of new abattoirs have been built in the last 2 years, but they are all stand-alone – they are not vertically integrated and will eventually be troubled by limits in steady supply and certainly in quality supply. Not only will they represent a great business opportunity for the sale of our high quality livestock locally - but we can also have them produce and package our own brand for us. Obviously, this will rapidly warrant the acquisition or construction of our own abattoir, because we will be fully vertically integrated from crop, to feed, to livestock, to meat production. It would be a natural step for us to buy our own abattoir. We would be able to further develop a strong local meat ‘brand’ in Tanzania and supply the entire region and more...

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PROJECT DIAGRAM

 

By avoiding an interminable long processes of trying to own land in Tanzania; avoiding any type of local land conflicts with villages or local authorities and avoiding any potential  accusation of land, we will be able mitigate quite a number of potentially upsetting problem right from the outset. Not owning the land will allow us to take our machinery and equipment and move away from any contentious projects without major difficulty - but having said that, we are definitely interested in taking our chances if the ownership of a piece of land in Tanzania should present itself. But to mitigate initial risks, we will want to start with pre-signed 'Contract Farming' agreements. 

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1. We start as a CONTRACT FARMING COMPANY. We will invest in farming machinery and farming equipment, which we secure in a central location in Tanzania.

2. We operate our 'Contract Farming' and/or 'Share Farming' projects from our central location.

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