Business Plan

BASGRO PRIVATE (PTY) LTD

Address of Company: House 2122 Antimony Street

Clayville
Midrand
Gauteng
Telephone No:
Cellphone No:
Fax No:
Email Address:

Date:
This document is confidential.

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 Table of Contents of BASGRO Business Plan

Executive Summary...........
Section II – Mission,Vision, Goals and Objectives...............................................................
v General Description of Business...............................................................................
v Mission Statement.....................................................................................................
v Goals and Objectives.................................................................................................
Section III – Background Information...................................................................................
v Industry Information..................................................................................................
Section IV – Organizational Matters.....................................................................................
v Business Structure.....................................................................................................
v Management Team....................................................................................................
v Risk Management......................................................................................................
Section V – Marketing Plan...................................................................................................
v Products/Services.......................................................................................................
v Customer Analysis.....................................................................................................
v Competitive Analysis.................................................................................................
v Market Potential.........................................................................................................
v Pricing........................................................................................................................
v Promotional Strategies...............................................................................................
· Advertising.............................................................................................................
· Public Relations.....................................................................................................
· Personal Sales.......................................................................................................
Section VI – Financial Plan...................................................................................................
v Pre-Startup: How much money will it cost to get ready to start production.............
Projections/Operational Budget...................................................................................
 SWOT ANALYSIS……………………………………………………………...
Appendix and Attachments....................................................................................................

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 Executive Summary
1. Basgro is a Private Limited Company Incorporated and is registered in
2017/24921/07. The company supplies wheat and barley grain and it intends to
be the biggest supplier in South Africa.
2. We started this company because of the forever increasing demand of wheat
and barley, in seeing an opportunity in that we realized that we could combat
the demand at the same time be a profitable company.
3. Our first project for the company will be utilizing the 6-hectare farm located in
Limpopo and Zebediela. We will be crop coating with soya beans and sunflower.
In our second year we will be focusing on expanding the business further to
Eastern Cape (Matatiele region), which happens to have about 50-hectares.
Once we have taken over the Matatiela region we will now be able to supply
SAB, other beer producing companies as well as other companies that utilize our
product.
4. Basgro is founded by three ambitious youngsters namely Zibusiso Ndlovu, Qiniso
Hlongwa and Emmanuel Ntsuebeane. The three will be the
Directors/Shareholders of the company with all having 30% each.
5. So far the company has raised R40 000 capital contributed by Mr. Q Hlongwa and Mr. Z
Ndlovu.

6. The company needs funding so that it can start operating. It need about R100 000 as a
start-up capital to be able to get company equipment’s, pay employees, transportation
etc

7. The main customer is the end-user who are factories like SAB, BOKOM, SASCO and many
other factories that produced food using wheat and barley.

8. BASGRO is not only intending on just growing the business only and make money
for itself. With the high rate of unemployment, we as BASGRO pride our self in
helping the community by employing stuff and giving them the necessary skills
they need.

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Section II – Mission/Vision, Goals and Objectives

 General Description of Business

BASGRO is a private company that produces wheat and barley. Wheat being the second
most important grain crop produced in South Africa. Most of the wheat produced in
South Africa is used on alcohol, bread wheat, with small quantities of durum wheat being
produced in certain areas and is used to produce pasta.

Our short term objective is to buy and put in place all the equipment needed to start
planting as soon as the season starts. We also want to secure contracts to supply our
product to the intermediaries before we harvest.

In our second year we want to expand the farm by 20 hectares a year, allowing us the
time to gain experience, learn and adapt as we grow. We shall continue to grow the land
each year by a factor of 20 hectares. By doing so it will allow us as a company to have
room for contingency when we come across a bad season or year. Expanding by 20
hectares a year will grow BASGRO and allow it to be sustainable.

 Vision Statement
Our vision is to be an industry leader in the wheat and barley suppliers. A well-
diversified, vertically integrated company ushering in a new age in an old age industry.

 Mission Statement
Our mission at BASGRO is to provide high quality grain, improve the South African
Economy and reduce poverty by unleashing African famer’s abilities to manage their
natural resources and grow their income.

 Goals and Objectives

Our goals and objectives for the first five – Ten years of operation include:

 Become the leading supplier of wheat and barley in Southern Africa region, for us
to achieve that we will be utilizing the 6-hectcare farm located in Limpopo and
Zebediela as our first project for the 4-year period. Then our second project will
be going in the big sector of farming which is in the eastern Cape where they are
about 50-hectares.
 By achieving this we will be able to also supply SAB and other companies like
bread producing companies and others that utilize wheat and barley.
 We want our company to be sustainable and high profitable, be flexible and be
willing to adapt to environmental changes. Provide the best grain to satisfy our
customers’ needs.

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  We want to reduce the high unemployment rate in South Africa, by creating jobs
in this business venture.
 Also we want to reduce the importing of wheat and make South Africa one of the
other countries like China, USA, India, etc that produces wheat.

Section III – Background Information

 Industry Information

Section IV – Organizational Matters

 Business Structure

Directors/Shareholders
Zibusiso Ndlovu,Qiniso Hlongwane,
Emmanuel Ntsuebeane.

Legal
Marketing Accountant Manager
Logistics Manager Samkeliso
Manager Ntokozo
Monga Dube Ndlovu Mbonani

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  Management Team
 Basgro is a company founded by Zibusiso Ndlovu, Qiniso Sibonelo Hlongwa and
Emmanuel Ntsuebeane, who are the main shareholders and Directors of the
company. We spotted a growing demand of wheat and barley in South Africa and
knew this would be a good opportunity to get in the business.

 Monga Dube in the planting, pest management, harvesting and storage of our
produce. His knowledge of the equipment will also help us a great deal. Other
employees who will be helping will be reporting to Monga.

 will oversee the marketing aspects of the business and management of our brand.
Marketing ourselves right will ensure that we are known for producing the best
quality wheat and Barley for our clients. Branding of our equipment as well will
ensure that with every delivery our clients know that it is us and not a impostor.

 In the Accounting department we have Samkeliso Ndlovu who is a professional

financial manager. She will make sure our budget is drafted well according to the
needs or requirement of each department.

 legal matters and making sure we are compliant with the legislation, tax and
environmental policies including contracts whether be of employment or
supplying to customers will be handled by Ntokozo Mbonani.

 We as Basgro pride ourselves on the effect our business will be to the community.
We aim to employ the local community, be involved in their training as well be
involved in the years to come to community programs in and around Zebediela.
We know and understand that each Business or person in a position to uplift
people to be better and achieve their own goals in order for them to do the same
for others to come, must take it upon themselves to do just that.

Section V – Marketing Plan

 Products
Wheat can be used in different formats. For human consumption, as well as industrial.
The industrial aspects include the production of industrial alcohol into synthetic rubber,
explosives and paper making. Scientists are also looking at the prospect of using wheat
for medicinal use.

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We as Basgro with a 70% ownership of the 6-hectare farm will concentrate on growing
wheat on the farm and with the purchase of more land in the upcoming years, the first
being in the end of year two. We will be looking on growing hard winter white, soft
winter white and hard red.
We will look to crop rotate the wheat with sunflowers as well as Soya beans. They
benefit well with a minimal or no till after wheat harvesting. This gives us a productive
income and helps us to explore a different kind of products other than wheat and
barley.

 Customer Analysis
We have secured ourselves friends who are themselves in management position in beer
and vodka making companies. Our ultimate goal is to have a contract with SAB which
has now merged with AB-INBEV to become the biggest producers of beer in the world.
Once we secure this contract it will enable us to grow year by year. We will start by
supplying AU Gold distillery with wheat. They are currently on their third year and
growing from strength to strength and with their increasing demand of their vodka as
well as their Gin. They have just announced that Emtee the rapper is now a shareholder
at the company.
Basgro is also looking at the cereal market and open to securing contracts with Bokomo
for instance as they to0o will need wheat to make flour, wheat-bix and other wheat
products. We will look upon securing a contract with them by the end of year two.
We have spoken to pioneer foods who make Bokomo, pasta Grand, Sasko bread etc and
are willing to get into contract with them as soon as our product passes their inspection
and meets their quality standard.
Soya beans as well as sunflower seeds due to their high demand we shall be in need to
produce more each year.
We have been in contact with Food Corp who mill wheat into four and are willing as well
to first see the product before getting into a contract for us to supply.

 Competitive Analysis

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 Market Potential
 South Africa imports about 2 million tons of wheat yearly from Poland, France,
Russia, Canada and United States of America. We import 60% of our wheat from
these countries yearly. If we as Basgro can capture even 0,1% of this percentage,
we are looking at figures of over R10 million in sales per annum. The 60% of
wheat imported is due to the increase in demand due to the growing middle
class that are buying more wheat related foods and the number of wheat
consumption is growing each year. SAB has come forward in support of the local
wheat and barley producing farmers by issuing sponsorships and support to also
curb the importation rate as well as to promote more local farmers to grow
wheat and barley.

 Soya beans is another commodity that South Africa Imports about 55%. The
farmers cannot sustain the demand of it hence the government must look
elsewhere to meet the growing demand of it mostly due to high oil demand.

 In terms of barley, we are looking at planting and harvesting twice a year. We

will look to produce malt barley which at the moment is the most preferred by
the major brands. South Africa itself is the fourth leading country that imports
Canadian malt barley, and 3rd in Canadian malted barley, in the world.

 The biggest and only major buyer of barley in South Africa is SA Maltsters, whom
supply mostly SAB.

 Africa is the biggest nation with a 21% annual growth rate of demand of barley,
so the potential growth is quite favorable and with careful management, Basgro
will look to be among the biggest suppliers of barley in due time.

 Pricing

 Promotional Strategies

 Advertising

 Public Relations

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  Personal Sales

Section VI – Financial Plan

 Projections/Operational Budget

Zebediela 1st year plans

❖ Labour : Since we are still at our Infancy with the operation of our first project we
are looking at hiring 8 personnel on a temporary basis of which they will be getting a
daily rate for 5 days a week. This we are planning to do for a period while we
preparing the land and planting of seedlings. We will then reduce the number of
personnel to 4 who will then maintain the place and prepare it for the next plantation
period.
❖ Seedlings: Wheat grass seedlings range from R35 - R40 per Kg and with the land we
are currently working on, we are looking on buying 80 KG of which will cost us
about R2000 per plantation, and R4000 for the first year. The soil we will be using is
fertile, there will be no need for too much fertilizes which will save us also about
R1500. The fertilizers themselves should cost us about R3000 for the first year.
❖ Transportation: Transport is essential for our day to day running of business either
transporting The crop to storage or delivering to our clients, so with us it will be our
advantage that we do have a truck already, the only cost we have to cover for will be
for fuel cost which will be at R5000 per month since we will be going on site twice a
month.
❖ Storage: we will be looking starring our produce in water tight Jojo storage silos that
we can keep dry and easy to monitor until the time we get to transporting it out to our
client. This should cost us about R10 000. As for the water tanks we will use to store
water we are looking purchasing 2x5000L storage tanks which should cost us about
R10000.
❖ Communication: Since we will be based here in Pretoria and we will need someone
that will be on site checking on our product. The only means of communication will
be cell phone which may be R300 to R500 of airtime including placing and
confirmation of orders.
❖ Security: we are looking at securing the farm with a fence that will not mark out the
territory we own but to prevent any domestic animals from sneaking in and eating the
crops. This should cost about R10 000.
❖ The borehole currently present at the moment needs a bit of maintenance so we have
set aside about R15 000 to replace any old motor and install new pipes that will be

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 connected directly with the Jojo tanks which will then be connected to the watering
equipment to water the seedlings and the crop.
❖ Irrigation system will cost us R40 000
❖ Marketing: establish our own Web address where we get to advertise our products, it
should be precise and clearly state what we offer to our clients. Branding is also a big
part of that and we need to brand our delivery boxes, trucks, documents etc. We
will need as well to make sure that we attain all the necessary permits before we start.
That will cost us money and should be planned for. So therefore for the first year a
allocation of R30000 should suffice.
❖ Chemicals and harvesting costs: R10 000

LIMPOPO,ZEBEDIELA 6- EASTERN CAPE 50 HACTRE

HACTRE 1ST YEAR PLAN FARM, MATATIELE
1st plantation costs: 1st plantation costs:

*Labour: *salaries, plantation and harvesting:

*Seedlings: R3 000 R200 000
*Transportation: R5 000 *Watering equipment &pump: R80
*Storage: R10 000 000
*Communication: R500 *Seeds: R15 000
Security: R10 000 *Transportation: R20 000
*Borehole: R15 000 *Storage: R80 000
*Irrigation System: R40 000 *Security: R20 000
*Marketing: R30 000 *Marketing: R15 000
Chemicals and Havesting: R10 000 *Pest control: R10 000
*Fertilizers: R20 000
Total costs: R300 000 Total costs: R430 000

2nd plantation costs: 2nd plantation costs:

*salaries, harvesting and plantation: *Labour: R 200 000

R150 000 *Seeds: R15 000
*Fertilizers: R 10000 *Transportation: R20 000
*Seeds: R10000 *Marketing: R15 000
*Marketing: R10000 *Pest control: R10 000
*Transportation: R15000 *Fertilizers: R20 000
*Pest control: R15000 *Packaging and trading: R50 000
*Petrol for the generator: R15 000
*Packaging and branding: R40 000

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 Total costs: R250 000 Total costs: R330 000

 Pre-Startup: How much money will it cost to get ready to

start production/ Project Funding.
We at Basgro have set ourselves clear yet achievable goals and will look upon executing
them within the set time. In order to reach our set goals, we shall need to purchase
fertilizers, pest control chemicals, seeds, as well as replacing the motor of the pre-
existing bore-hole as well as the connecting pipes and watering equipment. We are then
seeking a R550 000 in capital in order to accomplish our set goals for the Zebediela farm
to Start which will be allocated over a period of two years. In Matatiele we are seeking a
starting capital of R760 000 and the total for both farms is 1310 000.
At Zebediela, we are looking on growing the land to 20 hectares in our second year. That
will mean our turnover for the year for wheat will be R680 000 and R190 000 for soya,
for the year with a total sale of R870 000.
In Zebediela with the current 6 hectare farm, Our sales forecast indicate that R170 000
for wheat and R57 000 for soya beans sales in year one with total sales of R245 000.
The Eastern Cape farm in Matatiele which is placed neatly in the valley of its rugged
mountains receives its fair share of rain each year is the more profitable venture as it is
a 50-hectare farm with a river that flows past it supplying the farm with unlimited
amounts of water. We will plant and supply Barley on the farm. We are looking at a first
year sales of R1 100 000 and a gross profit of R673 000 and a second year sales of R1
100 000 and a gross profit of R798 000. This farm will incur costs of about R 472 000 for
the first year and R302 000 for the second year.
We have planned to start the Matatiele project using the profits saved from the
Zebediela farm if we don't manage to secure an investment capital for the project. By
growing the land year on end yet still making sure our supply chain remains profitable
we will be able to start at Matatiele by year five.
We are currently in negotiation to secure another 50-hectare farm lying next to the one
we will start with.

 VII Socio-Economic Benefit

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  VIII Environmental Plan

 SWOT ANALYSIS

 STREANGTH

At Basgro our strength is the farm t that we are tenacious and willing to learn as we are
inexperienced in farming in general. What we know is what we have researched and
spoken to people about but no amount of research will beat experience and are currently
looking for mentorship to bridge the gap. Our vision is clear and we shall face the
tempests together and defeats but will shall never be defeated

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  WEAKNESS

 OPPORTUNITY

While the need for wheat continues to grow due to increase in middle class who buy
wheat related products while beer and vodka markers continue to grow due to the demand
of the alcoholic drinks and other industrial companies using wheat. Wheat bases products
as a by-product of another product grows. According to international grain council (IGC)
in 2017 south African grain imports will reach 4.1 million tons despite the weather
changing for the better in 2017. The graph below shows the production vs imports of
wheat in tonnes each year from 2010 till 2017.

 THREATS

At the moment south Africa is faced with a shortage of water due to a drought that has
span almost 3 years with insufficient rainfall across the country. That has influenced
many farmers to detour from wheat and Barley.

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Appendix and Attachments
 Proof of funds availability
 Resumes
 Letters of endorsements
 Copies of contracts and agreements
 Licenses, certifications, and other credentials
 Copies of market study material and other data used to develop
elements in the business plan

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