Amir Hamza (T) Limited

Strategy and Implementation Summary.

Amir Hamza (T) Limited (AHL) strategy is to expand production capabilities to fulfill the requests of
importers with whom we currently deal for larger orders which we are unable to currently fulfill. In
addition, AHL seeks to establish additional contracts with importers in Europe and the Middle East
and increase the volume of instant exported from Tanzania market. We intend to first maximize
quantity of coffee sold within existing channels and second, establish additional accounts through
targeted marketing efforts. To achieve this, we need to ensure efficient running of the factory that is
expected to be operating at its optimal, AHL is working to execute the following strategic plans in
the areas of operations, marketing, financial, and disruptive:

i) Operational Strategy.

Staffing: We are focusing on reducing cost both on production and other operations by focusing on
lean operational model of hiring few experienced coffee processing experts from India, who in turn
train our local graduates that are under industrial apprentice program without compromising the
quality of output.

Raw Materials: AHL is looking to secure a constant supply of raw materials, that is, the coffee cherries
to maintain optimal production capacity. The company, as a major player, has established direct
contracts with small scale farmers through their primary co-operative societies. AHL, through these
contracts, purchases farmers’ produce by offering higher farm-gate prices. Once the full set of the
factory capacity utilization is achieved, it will require 100,000 tons of coffee cherries to be procured
from the smallholder farmers. Kagera Region produces around 85,000 tons and the balance can be
sourced from Musoma and Kigoma. The farmers are expected to grow more coffee as AHL intends
to offer better farm gate prices. However, in order to offer higher prices, the farmers must have
quality coffee cherries. The company is now looking to partner with a bank or not-for-profit
organization to assist the farmers in their inputs (in the form of finance and technical expertise). AHL
will then serve as a guaranteed market of the produce that meets the quality criteria.
Empowering Smallholder Farmers: The smallholder farmers are at the centre of success of the plant
as they supply the vital raw material to produce coffee. In view therefore, AHL would like to foster
a long-term relationship so that smallholder farmers have the confidence of having a stable buyer,
year after year. Kagera Region has well over 130,000 smallholder farmers which operate under
Agricultural Marketing Co-operative Societies (AMCOS). This is a very good system of association
as it helps the farmers to co-ordinate support and provides the platform for sharing vital information
on the coffee business (diseases, weather, quality, prices etc.). The groups are well established and
can do more if well supported.

AHL will be buying the coffee cherries from the AMCOS and will offer better prices than the market
to encourage increased production. With the envisaged expansion of operations, AHL will be able
to buy all the coffee produced in the region which is around 85,000 tons of cherries.

AHL will work with the smallholder farmers to learn more about “climate-smart” techniques and,
improve their knowledge, incomes and access to markets so that they can adapt and thrive
notwithstanding the changing conditions. AHL must be more involved throughout the coffee value
chain to ensure high quality coffee which means better prices for smallholder farmers thus resulting
in increased income too. The smallholder farmers can be encouraged to embark on other activities
to supplement/broaden their income like beekeeping, poultry farming and horticulture.

AHL in collaboration with the AMCOS, intends to register all farmers on a farming digital platform
for ease of management and monitoring. The platform will have all key personal details (KYC) of
the smallholder farmers – individual names, size of family, village, ward, district, region, AMCOS
they belong to, size and location of farm etc. Furthermore, it has a component of digital financial
services which incorporates payments and savings, aggregation of orders and improved record
keeping. Thus, smallholder farmers will not be paid cash for their sales, instead the funds will be
deposited to their accounts where they can be withdrawn using their mobile phones. Therefore,
the platform addresses the issue of financial inclusion and collection of individual data which can be
used for credit scoring. The farmers will be required to submit data from time to time through
extension officers. The digital platform will be vital for financiers and any other organizations
interested in supporting the smallholder farmers in one way or the other. With technology, it will
be easier and more cost effective to gather monitored crop information and support the smallholder
farmers improve their farming methods.

AHL will endeavor to partner with other organizations, which also support smallholder farmers, to
assist the company to scale its impact even further sustain its raw material supply pipeline.

ii) Marketing and Distribution Strategy.

AHL has developed an international clientele base, from different geographical locations with its
brand name Amimza coffee already registered in 36 countries. The company will continue to invest
in and maintain business relationships with their customers since lock-in contracts are advised against
due to price volatility. There is potential in the domestic market. The presence of re-packaging firms
offers a secure market. This is in addition to the 15% of Instant coffee that is being taken up by
AMIMZA Limited, a separate legal entity operating in the Instant coffee retail market. Further,
emerging small and medium enterprises in the local food industry offer market opportunities to AHL.
The number of coffee shops are growing in all major cities and AHL will capitalize on that and
develop suitable products for them.

AHL marketing strategy includes the use of targeted print media advertising and direct selling to
importers in the Middle East and Europe who provide repack/reprocess instant coffee to their own
market preferences. We will capitalize on existing relationships with importers who have stated their
willingness to contact European affiliates and recommend AHL. We have positioned ourselves as a
differentiated provider of the highest quality bulk instant coffee for international market. The primary
goal of all marketing efforts will be to communicate this to existing and potential customers.

Distribution is one of the greatest challenges faced by AHL. The distribution system of Tanzania is
largely outdated and inefficient. Moreover, taxes, specifically excise taxes are high. Distribution costs
for internal sales are absorbed by the customer but distribution costs for exports are absorbed by
us. Increasing the volume of our exports makes us eligible to receive reduced fees and helps ensure
that containers are running at maximum capacity.
iii) Financial Strategy.

Financing: Coffee trading is a volume business, on bulk sales its characterized with low margins but
high volumes. To be competitive, the company will have to expand its production capacity and
stocking ability. This will be done through securing of a comparatively cheaper finance option to the
current local financiers, but also consolidate its current liabilities to a single financier for effective
financial management.

Pricing Strategy: Because AHL adheres to higher quality standards, the price of our coffee is slightly
higher than the market average. The import market largely determines the price of imported coffee
in the Middle East and Europe. Coffees that do not meet AHL export quality standards are resold
on the local market at the current market price. Instant coffee, on the import market, now sells for
USD 4.5-5.5/kg. According to AHL pricing strategy, its instant coffee would sell for approximately
USD 5-7/kg. Importers have to this point been willing to pay the additional cost due to price and
semi-organic nature of the commodity.

Sales Forecast: The following chart and table show our present sales forecast. We project healthy
growth in sales in 2024, a slightly smaller increase again in 2025, and reach maximum for production
capacity in 2001 representing a large growth over the previous year.

Sales Forecast 2022

3,500,000
3,000,000
2,500,000
Sales USD

2,000,000
1,500,000
1,000,000
500,000
-

Months 2022

Local Sales (USD) Export Sales (USD)

 Sales Projections
90,000,000
80,000,000
70,000,000
60,000,000
Sales USD

50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
FY FY FY FY FY FY FY FY FY FY FY
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2031
Years

Local Sales (USD) Export Sales (USD)

iv) KPI Milestone Chart

a) Increase Production to
60% (5,000MT)
utilization

b) Establish Export
Accounts with
European buyers

c) Secure Financing

d) Hire 2 expert coffee

processors from India

e) Commence Industrial
Apprenticeship
Program

f) Signing MOUs for

partnership with other
organisations to
support smallholder
farmers productivity
scale and off taking.
Q1 Q2 Q3 Q4