Business Plan

PREPARED FOR EIB COVID RELIEF LOAN

PRIME FERTLIZERS MALDIVES PVT. LTD. | 2nd floor, M. Ishan Villa, Haveeree Hingun, Male, Maldives
CONTENTS

EXECUTIVE SUMMARY............................................................................................................................................ 2

THE QUICK PITCH.............................................................................................................................................................2

THE PROBLEM................................................................................................................................................................. 2
THE SOLUTION.................................................................................................................................................................2

CORPORATE PROFILE..................................................................................................................................... 3

HISTORY AND CORPORATE PHILOSOPHY................................................................................................................................3

KEY MILESTONES.........................................................................................................................................................3
FINANCIAL HIGHLIGHTS...............................................................................................................................................4
KEY PEOPLE................................................................................................................................................................. 5

PRODUCTS & SERVICES.................................................................................................................................. 6

FERTILIZERS & SOIL CONDITIONERS.............................................................................................................................6
SEEDS.......................................................................................................................................................................... 6
FARMING TOOLS & EQUIPMENT...................................................................................................................................6
PESTICIDES & INSECTICIDES........................................................................................................................................7
HYDROPONICS & GREEN HOUSE...................................................................................................................................7

OUTLETS AND LOCATION............................................................................................................................... 7

CUSTOMER & MARKET ANALYSIS............................................................................................................... 8

CUSTOMER SEGMENT: BUSINESS SIZE...................................................................................................................................8

CUSTOMER SEGMENT: ECONOMIC SECTOR............................................................................................................................8
CUSTOMER SEGMENT: GEOGRAPHIC.....................................................................................................................................9

MARKET ANALYSIS.......................................................................................................................................... 9

MARKET SHARE................................................................................................................................................................9
MARKET TRENDS..............................................................................................................................................................9
THE EXTERNAL LANDSCAPE............................................................................................................................................... 10

MARKETING & ADVERTISING PLAN.......................................................................................................... 12

ANALYSIS OF THE CURRENT SITUATION.................................................................................................. 13

THE SOLUTION................................................................................................................................................ 13

FINANCIAL PLAN & PROJECTION............................................................................................................... 14

PROJECTED INCOME & EXPENDITURE AND BALANCE SHEET........................................................................................0

PROJECTED CASH FLOW STATEMENT............................................................................................................................1

JOB CREATION.................................................................................................................................................. 0

INVESTMENT APPRAISAL............................................................................................................................... 1

PAYBACK PERIOD.........................................................................................................................................................1
NET PRESENT VALUE....................................................................................................................................................1

PROJECT PLAN........................................................................................................................................................ 0

DISBURSEMENT PLAN............................................................................................................................................. 0
EXECUTIVE SUMMARY

THE QUICK PITCH

Prime Fertilizers Maldives proposes to improve the food security in the Maldives by enabling the local communities
with the most cost-effective agricultural inputs, consultancy and solutions.

THE PROBLEM

Presently, we are facing the challenge of catering customer demands due to lack of adequate warehousing facilities.

THE SOLUTION

We propose improve our capacity by building a warehouse facilities on the land leased Thilafushi. This five-storey
warehouse facility to be built on 6500 useable footprint is expected to solve the current challenges.

CORPORATE PROFILE
HISTORY AND CORPORATE PHILOSOPHY

Prime Fertilizers was originally founded in 2007 with merely USD2,000 in capital by resilient,
enthusiastic, and entrepreneurial brothers with the aim to ensure food security in the Maldives. The
operation started with a 20-feet container of cow manure has expanded their business to supply all
required agricultural inputs to local famers.

Prime Fertilizers Pvt Ltd was incorporated in 2013. Today, the company provides total sustainable
farming solution, enabling farmers to have a high yield at the lowest possible unit cost. With a
wide range of product lineup, we also offer domestic farming solutions, including products and
services required for hydroponics and vertical farming.

Under the philosophy of ‘giving back to society,’ we are committed to ensuring that the general
public is educated with relevant information. As such, our farming consultancy service open for all
farmers, regardless them being our customers.

Our employees are considered as business partners. As an integral part of the business - the force
that drives to achieve strategic objectives is the truest asset of the highest value. The company’s
compensation & benefit and learning & development policies are devised to reflect this value.

KEY MILESTONES

2012 2021
2007 Got sole Got
Started the distributorship distributorship
business of for Unigrow. 2019 of Autopot
delivering cow Got sole Got Got sole
manure directly distributorship distributorship distributorship
from warehouse for Pavoni of Van Egmond of Deltachem

2009 2013 2020

First outlet Prime Fertilizers Got
opened incorporated distributorship
of Chihiros
Aquatic Studio

FINANCIAL HIGHLIGHTS
 Sales
60,000,000

50,000,000

40,000,000

30,000,000 During the period 2016 –

20,000,000 2019, the average annual
10,000,000 sales growth was at 12%.
-
2016 2017 2018 2019 2020 However, in 2019 there was
a drastic sales growth of 66.68% because of the surge in agriculture industry. This is most
probably because of the concern about food security due to COVID-19 pandemic.

This growth in sales is reflected on profits of the company during the period.

The following is a snapshot of the company’s performance and financial position:

Income Expenses Accounts receivable Accounts payable

51,917,265 41,448,356 5,227,811 329,606

66.7% 47.7% -37.5% -86.9%
vs. previous year vs. previous year vs. previous year vs. previous year

Net Profit Cash & cash equivalents Quick Ratio Current Ratio

10,468,909 2,045,239 39.00 87.00

239.7% 26.9% 884.0% 905.5%
vs. previous year vs. previous year vs. previous year vs. previous year
KEY PEOPLE

Our management comprises a team of dedicated, qualified, and experienced personnel.

AHMED SHIYAZ IBRAHIM - MANAGING DIRECTOR

Shiyaz has always had an interest in business since childhood. Having served in aerodrome
operational service for more than 25 years, Shiyaz is experienced in logistics management and
operation.

NIYAZ IBRAHIM - DIRECTOR, BUSINESS DEVELOPMENT

Niyaz has over 20 years of extensive experience in the public sector – mostly in senior
management.

As a chartered accountant and auditor by profession Niyaz is highly qualified in business

management and total quality management.

MOHAMED ZAHID - MANAGER, SALES & MARKETING

Zahid has a far-reaching background in sales and marketing with experience gained by working
with government companies in the Maldives. He has also a wide range of knowledge and
experience in the agricultural sector.

Zahid is a trained professional in farming and plant care.

FATHIMATH ADAM - MANAGER, HR & ADMINISTRATION

Fathimath has over 15 years of experience in HR management and general administration. Prior to
joining the Prime Maldives team, she worked for the civil service and a government-owned
company. She was instrumental in formulating HR related policies and procedures in these
organizations.

Fathimath holds a bachelor's degree in business administration.

IBRAHIM SUNEEL - MANAGER, LOGISTICS & OPERATIONS

Suneel joined Prime Maldives in 2013 and played a pivotal role in assisting to expand the
company into its current scale. Suneel holds a bachelor's degree in Information Technology.
PRODUCTS & SERVICES

Our products speak for themselves. Our brands are well-received by our customers. We are
proudly the sole distributor of most favorite brands of the farmers, namely Unigrow, Pavoni, and
Baba. We choose the products after extensive research on the challenges of farming in the
Maldives, and hence it addresses the problems the local farmers face.

Our product portfolio currently has more than 8000 products. We have all the necessary tools,
machinery, substrates, soil amendments, fertilizers, pesticides, adjuvants, and various other
agricultural production inputs.

FERTILIZERS & SOIL CONDITIONERS

You are what you eat. An important determinant of what you eat is the quality of fertilizer used to
grow the crop.

We have a wide range of fertilizer products both organic and synthetic enriched with all the
essential nutrients for the growth of plants. This includes straight fertilizers, NPK fertilizers and
micronutrients. Also, we have soil and soil amendments including substrates to improve your soil
farms soil condition.

SEEDS

You reap what you sow.

The quality of your crop is highly dependent on the quality of seeds you use.

We have partnered with renowned seed breeders. The farmers can choose either organic seeds or
synthesized seeds depending on their need. Our seeds are carefully selected considering the
temperature, humidity, and soil condition of the Maldives.

FARMING TOOLS & EQUIPMENT

We have all the tools in between from basic garden shovels to heavy-duty equipment required for
commercial farming in the Maldives. This includes, but not limited to, greenhouses, watering and
irrigation systems, sprayers, farming apparels and protective gears and many more. You can get all
these tools, equipment, and other accessories under one roof, in one visit.

PESTICIDES & INSECTICIDES

Like any other living being, plants are prone to diseases and get weak due to harmful creatures
such as pests and insects. Plants do also need care and cure of such diseases and need to be
prevented from pests and insects.

We have pesticides, insecticides, and even weedicides that can instantly eliminate any harmful
factors. Our product range also includes sprayers and ingesting tools that can either treat individual
plants or the whole field.

HYDROPONICS & GREEN HOUSE

Land is the scarcest resource in the Maldives. We understand the challenges face by both farmers
and hobbyist-farmers due to lack of desired land area. That's why at Prime Fertilizers' we promote
and provide the best vertical farming systems and accessories. Our hydroponic farming related
product includes hydroponics systems, pH and EC meters, auto-pot systems and grow lights

OUTLETS AND LOCATION

We have 3 outlets located at walking distance from the North Harbor – the inter-atoll cargo harbor.
Having located at this prime location enable us to have efficiency in terms of logistics.

In order to cater the demand on live plants and home gardening items during the COVID lockdown
in 2020, we have opened a new outlet in Hulhumale.

In addition to our own retail outlets, we have retailers from every atoll who are registered as our
credit customers and who frequently buy from us in large quantities. Recently we have started a
program which allows such retailers to become our partners – allowing them to enjoy benefits such
as higher trade discount and longer credit period. This is to widen our distribution network.

As of today our distribution network consist of over 30 registered distributors scattered across the
Maldives.

CUSTOMER & MARKET ANALYSIS

During the last 6 years, Prime Fertilizers made a turnover of MVR175 million. These sales were
contributed by customers of varying size, background and industry.

CUSTOMER SEGMENT: BUSINESS SIZE

Sales: B2C v B2B  37% sales were from retail sales to individual
customers (B2C). A majority of these individual
customers are from the islands who earn an
37% average monthly income of MVR 30,000. Since
there is no household rental expense in the atolls
and cost of living is relatively lower, around a
63%
50% of this income is reinvested in the farming
business channeling back to agro suppliers like
Prime Fertilizers.
B2C B2B

 63% sales were business-to-business (B2B).

CUSTOMER SEGMENT: ECONOMIC SECTOR

 53%: farming Sales exposure by industry

 22% are from tourism sector

agro

Others
14 are retailers selling agro inputs wholesalers 9%
Tourism
2% 21%
 9% are from others
Agro retailers
 2% of sales were made by wholesalers selling 14%

agro inputs.

2% sales were made to the government agencies, state-

owned enterprises and cooperative societies.

Farming
53%

CUSTOMER SEGMENT: GEOGRAPHIC

As a result of strong relationship with wholesale Atoll coverage - Frequent Retailers/Partner Shops
6
customers in the atolls, Prime Fertilizers is able 5
to have a retailer almost all the atolls. 4
3
2
1
0
Ha Sh R Lh AA V F Th Ga Gn

MARKET ANALYSIS

MARKET SHARE

SOCIAL MEDIA ANALYSIS

Looking at the Facebook impressions it can be Facebook Likes

determined that Prime Fertilizer is ahead of the Agro Services

Green Farmer
competitors. With approximately 13,000 likes we
PestEx
hold 43% of Facebook impressions of local
Pesterminators
agricultural input suppliers. The closest rival, Alividhaa

Alividha trails behind us with 39%. It has to be Prime Fertilizers

noted that Alividha has been in the business for

almost 20 years.

Considering the value of imports and social media position, it is evident that compared to the
competitors, Prime Fertilizer holds a significant portion of the market share.

MARKET TRENDS

No . o f r e gi st e r e d far m e r s (2 0 1 5 -2 0 1 9 ) According to the Ministry of Fisheries &

7650
Agriculture statistics, the agriculture industry
7600
looks promising. It shows that from 2015 to
No. of registered farmers

7550
7500 2019, there is an upward trend of the number of
7450
farmers registered with the Ministry.
7400
7350
7300
2015 2016 2017 2018 2019

THE EXTERNAL LANDSCAPE

The following are an analysis on external factors that affect the agricultural inputs market:
GOVERNMENT POLICY

According to the government’s Strategic Action Plan (SAP) 2019-2023, several challenges faced
by farmers are identified and policy interventions to address the challenges are set out. This would
enable the agriculture sector to grow drastically and as such creating opportunities for expansion
for the agricultural input suppliers.

ECONOMY

After the lockdown in April 2020 due to the COVID- No. of tourist arrivals after after the lockdown
120,000
19 pandemic, Maldives economy started to grow as 100,000
80,000
the number of tourist arrivals increased. 60,000
40,000
As number of tourist arrivals increases, the demand 20,000
0
for agricultural inputs also increases because most of

Jul-20

Aug-20

Sep-20

Oct-20

Nov-20

Dec-20

Jan-21

Feb-21
our major customers are from the tourism sector.

Also, as the economy started to recover from the blow last year, the GDP has increased drastically.
According to the statistics published by the Maldives Monetary Authority (MMA), the annual
percentage change was -29.3% for 2020 and so far in 2021 this has gone up to 13.5%. The growth
in the economy would enable resources and give a breathing space for the government to
implement the policies on developing the agriculture sector. It would also enable the potential
investors like new farmers to enter into the market.

SOCIAL PSYCHE

The COVID-19 pandemic has taught us how vulnerable we are as a country. As the Maldives
import everything, during the lockdown when supply-chains were restricted, there was
nervousness among the general public about foods security. As a result, there was a significant
growth in the agriculture sector – especially horticulture.

TECHNOLOGY

Another important change that the COVID brought was embracing of technology. Customers
started to avoid visits to outlets as much as possible. Instead, pick and choosing of items are done
on online media such as e-commerce websites and social media platforms. We at Prime Fertilizer
also witnessed the change and we immediately adapted to the change. Our social media presence
increases significantly and today a major portion of our sales are channeled through social media
platforms. As such we started to develop our online shop and it is expected to launch in May 2021.

MARKETING & ADVERTISING

PLAN Facebook ratings on local channels
250,000.00
Prior to 2018, Prime Fertilizers did not
run any form of advertising campaign. 200,000.00

The company relied on modest form of 150,000.00

promotional activities such as giving
100,000.00

50,000.00

-
Raajje TV tvm vtv sangu Channel 13
bulk discount to existing customers and efforts to tap into new markets were minimal. This
changed in 2018 where the company started running advertisements on Mihaaru Online. Again in
2019, a program on TVM was sponsored expanding the exposure.

The marketing & advertising campaigns were intensified in 2020. In addition to running tv
commercials, advertisings were running on social media. This intensified advertising campaigns
culminated in promising results – which is reflected in the drastic sales growth.

One of the crucial steps taken to increase the marketing and advertising in 2021 is to sign a one
year contract in March with Raajje tv to be the co-sponsor of the Maakana Show. This step is taken
after analyzing the statistics available on Facebook. It shows that Raajje TV is far ahead with the
other local TV channels.

In addition to running advertisements, several other marketing campaigns are planned. The
following is the annual marketing and advertising plan:

1 Ha 2
2 Hdh 4
3 Sh 2
4N 4
5R 2
6B 4
7 Lh 3
8K 4
9 AA 1
10 Adh 3
11 V 0

ANALYSIS OF THE CURRENT SITUATION

The following is an analysis of the current situation of Prime Fertilizers Maldives:

Strengths: Weaknesses:
• Greater market share • Inability to cater customer demand due to
• Partner shops in all the regions inadequate storage space.

• Delivery team and fleet • Weak customer base in the tourism sector

• Strong relationship with suppliers

 Opportunities: Threats:
• Expand market to tourism sector • Emerging competitors
• Government policy to promote agriculture • Change in regulations and policy shift in a
sector. new government
• Public's concern on food security due to
challenges faced during COVID lockdown

Following the analysis, it is planned to do the following:

 Use the best of the strengths of the company: greater market share, partner shops,
delivery team and strong relationship with suppliers.
 Eliminate the weaknesses: inadequate warehouse space and weak customer base in the
tourism sector.
 Exploit the opportunities.
 Get prepared for the threats.

THE SOLUTION

As such it is planned to consolidate Prime Fertilizers’ storage facilities to a single premise with
extended space. This is aimed to eliminate the weakness of inadequate warehouse space. With the
establishment of the proposed warehouse, it is expected to have the following benefits:

 Ability to buy and store in bulk.

 Ability to cater customer demand
 Enjoy bulk discount and thereby lowering cost per unit thereby increasing profit margin.
 Inability to cater customer demand means loss in revenue. Therefore, when this issue is
addressed it would increase the revenue.
 Inability to cater customer demand means losing customers to competitors. Therefore,
when the storage issue is addressed it is expected to increase customer retention rate.
 When storage facility is improved and bulk stock is stored, it would build confidence to
expand the resort customer base.

FINANCIAL PLAN & PROJECTION

Our plan is to utilize the EIB COVID Relief Loan to build a warehouse in a 7,500 square feet land
in Thilafushi. The estimated cost of building a five-storey warehouse with 6500 useable footprints
is MVR 12,000,000 (please refer to the quotation/BOQ in the annex-1).

This warehouse is to be used as storage facility for fertilizers, pesticides, adjuvant and other
agricultural inputs.

The advantages of having such a warehouse includes:

 Cost-saving. We currently pay MVR250,000 per month as rent for storage spaces (Please
refer to annex-2: Summary of Lease Agreements). This reduction in operational expense
will expect to increase our profitability by 6%
 Buy fertilizer and other such products in larger mass from our suppliers. The maximum
weight of a fertilizer bag we currently buy is 50kg. Once the proposed warehouse is
completed we plan to buy jumbo bags (weight). Currently we buy a 50kg bag for an
average cost of MVR25. If we buy jumbo bags, we can get 200 kg for MVR 70 reducing
cost per kg by 25%. This reduction in cost will be passed on to the customers. It is expected
to have 10-15% increase of sales volume.
 Seed caring rooms: For the best result, seeds are to be stored in specially-designed
atmosphere with controls over temperature and humidity. This would help to improve the
fertility ratio of our seeds which would help us to maintain the customer confidence.
 Existing storage condition: Our existing storages are in densely populated residential areas
in Male. Due to this we have several limitations such as:
o Unable to customize the storage to our needs.
o Logistical difficulties. Narrow roads, entrances, no loading bay.
o Safety issues. Storing fertilizer with chemical elements.
PROJECTED INCOME & EXPENDITURE AND BALANCE SHEET

PRIME FERTILIZERS PVT LTD

PRIME FERTILIZERS MALDIVES PVT LTD

Profit and Loss Account

From 01/01/2020 to 31/12/2020

For the
Period
Particulars 01/01/2020 to
31/12/2020

Income
Income From Other Source
Other Income
5000 Unrecognized Income 40,983.32
5001 Daily Cashier Excess Money 92,936.79
37 Other Charges A/C 11,578.35
145,498.46
Cash Sales
29 Cash Sales 41,615,078.01
41,615,078.01
Credit Sales
31 Credit Sales A/C 10,215,750.41
10,215,750.41
PROJECTED CASH FLOW STATEMENT
PRIME FERTILIZERS PVT LTD
PRIME FERTILIZERS MALDIVES PVT LTD

Profit and Loss Account

From 01/01/2020 to 31/12/2020

For the
Period
Particulars 01/01/2020 to
31/12/2020

Income
Income From Other Source
Other Income
5000 Unrecognized Income 40,983.32
5001 Daily Cashier Excess Money 92,936.79
37 Other Charges A/C 11,578.35
145,498.46
Cash Sales
29 Cash Sales 41,615,078.01
41,615,078.01
Credit Sales
31 Credit Sales A/C 10,215,750.41
10,215,750.41
Goods Return
39 Goods Return A/C -268,910.12
-268,910.12

Total Net Sales 51,707,416.76

Cost Of Sales
Cost Of Goods Sold
Purchase Account
06 Cost Of Goods 23,878,765.65
23,878,765.65
Direct Expenses
7003 Form Filling And Processing Charges 390.00
390.00
JOB CREATION

The corporate philosophy on human resource is that employees are considered as partners, not
workers. It due to this philosophy that kept Prime Fertilizers going even with the challenges during
2020 lockdown. Prime Fertilizers proudly can say that we have not slashed a single laari from the
payroll and staff were fully paid even in the difficult times.

Currently, there are 70 full time employees who are paid at industry average salaries and benefits.

As the proposed project is expected to increase the business volume, it is also expected to create
approximately 20 additional jobs. Following are the details of jobs that are going to be required to
meet additional business requirements:

Cost Centre Job Head Monthly Total Annual

count salary per monthly Salary
head salary
Floor Manager 1 15,000 15,000 180,000
New outlet Sales Assistants 6
Cashier
Resort Supply Dedicated Sales 5 15,000 75,000 900,000
Unit Account Managers
Credit Control Credit Control 1 15,000 15,000 180,000
Unit Manager
Accounts Cost Controller 1 20,000 20,000 240,000
Call Agents 3 7,000 21,000 252,000
Sales Contact
Social Media Agent 1 7,000 7,000 84,000
Centre
Manager 1 15,000 15,000 180,000
TOTAL 0
INVESTMENT APPRAISAL

PAYBACK PERIOD

The project is expected to cost MVR 15,011,826 (please refer to the attached bill of quantities).

The project is expected to save rental expenses of MVR 3,369,600 per year. When this saving is
set-off against the yearly rental expense of Thilafushi land MVR 336,060 it would give a net cash
flow of MVR 3,033,540 each year.

Therefore, the cost of investment MVR 15,011,826 is expected to be paid back in less than 5 years.

Year Save in rental Rental expense Net cash flow Cumulative net
expense cash flow

1 3,369,600 (336,060) 3,033,540 3,033,540

2 3,369,600 (336,060) 3,033,540 6,067,080
3 3,369,600 (336,060) 3,033,540 9,100,620
4 3,369,600 (336,060) 3,033,540 12,134,160
5 3,369,600 (336,060) 3,033,540 15,167,700
6 3,369,600 (336,060) 3,033,540 18,201,240
7 3,369,600 (336,060) 3,033,540 21,234,780

15.011 .826
Payback period= =4.95 years
3,033,540

NET PRESENT VALUE

The project with annual net cash flow of MVR 3,033,540 is expected to have net present value of
MVR 23.77 million. This is considering the warehouse facility is expected to have an economic
life of 25 years.

Year Save in rental Rental expense Net cash flow Present Value
expense (Discounted at
6%)
1 - 25 84,240,000 (8,401,500) 75,838,500 38,778,822
0 Cost of the project (15,011,826) (15,011,826)
NPV 23,766,996
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A1 TASK START END DAYS M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S
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lear PRELIMINARIES 7/1/21 7/8/21 8
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IN SITU CONCRETE 7/11/21 8/21/21 42

MASONRY & PLASTERING 8/21/21 8/25/21 5

PAINTING 8/25/21 8/26/21 2

DISBURSEMENT PLAN

Description Disbursement Disbursement

date Amount

Disbursement-1 1 June 2021 9,616,532

Disbursement-2 1 September 2021 5,395,294