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Premium Foods Ltd

Investment Opportunities in the Maize Value Chain Tom Gambrah, Premium Foods Limited

Overview of Maize Value Chain 1 Producers: 2.5million households are engaged in maize production (GLSS 5, 2012) Geographic distribution:

Overview of Maize Value Chain 2

Volumes of Production Total Volume – 1,620,000MT (MoFA, 2009) Quality Standards •5 quality standards have been developed by Ghana Grains Council and Ghana Standard Board •A warehouse receipt system is still in the development stage

Maize Market & Use

Investment Opportunity 1: Capacity Building for Agric. Enterprise Development

Technical Know-how Equipment Capacity •

Type of Investment –Targeted training programs for specific markets –Equipment loans for service providers to provide services to value chain operators

Investor –The public sector •Ministry of Food and Agric., Ministry of Trade and Industry

Investee –Service providers in both the public and private sectors

Investment Opportunity 2: Agric. Research and Development

Technical Knowledge •

Type of Investment –Seed research and market –Soil research –Specific mechanization equipment and technique (tropicalized equipment to suit the environment)

Investor –The public sector (MoFA, MoTI) –Private sector (emphasizing on mechanization improvement and use, monopoly of seed sector by private sector companies should be safeguarded against. Local companies should be encouraged. Local seed production equates food security for the small farmer, which in turn equates community food security, which also in turn equate national food security which finally is a national security issue).

Investee –Private sector –Public sector institutions into seed research. The public sector should not die, they should be strengthened to play their regulatory as well as research role.

Investment Opportunity 3: Input Supplies

Chemicals: Fertilizers and Pesticides •Type of Investment –Mutually favorable credit to chemical suppliers –Credit to nucleus farmers to on-lend to outgrowers –Credit to SMEs in districts and communities to provide input credit to farmers

•Investor –Banks facilitating credit for the input supplier –Producers, manufactures (producer credit)

•Investees –Local chemical supply enterprises –Nucleus farmers and established out-grower systems –Smallholder farmers

Investment Opportunity 4 Mechanization

Farm Equipment Irrigation (only 0.4% of farmlands irrigated)

•Types of investment – Small dams for irrigation – Serviced farm lands with irrigation – Irrigation equipment and operational know-how

•Investor – Public sector as public goods – Private Sector with patient capital

•Investee – Service providers who will lease the equipment for use in their enterprises

Investment Opportunity 5: Storage/Warehousing/Silos

Ghana Grains Council estimated minimum storage facilities market in the 3 northern regions of Ghana: 86 Level 1 facilities (1000MT int. standards facilities) - 86,000MT 264 Level 2 facilities (500MT) - 132,000MT 369 Level 3 facilities ( 80MT short-term at community or village level) - 29,520 MT •Type of Investment – Construction of warehouses and auxiliary facilities – Training in warehouse management and operations

•Investors – Banks financing construction – Public/Private sector regulators – Private sector as owners, leasers, trainers operators

•Investees – Ghana Grains Council – Nucleus Farmer SMEs – Real estate companies

Investment Opportunity 6: Financing

Increasing access to finance (1% of agricultural practices are financed by banks)

•Type of investment – Invest in banks who are willing to invest in value chain operators – Invest in the value chain operators based on ROI and impact

•Investors – Government of Ghana – Private sector banks/finance houses

•Investees – Value chain operators – Banks and other financial institutions

Investment Cycle for Success

14 04 29 1110 premium foods agribusiness investment summit presentation  
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