Executive Business Plan Summary
Côte d’Ivoire Case Study
With its 400 million acres of arable land (of which 6.91 million are in Côte d’Ivoire), Africa has the potential to feed the whole world population. However, due to low yield productivity and land under utilization, Africa has become a net food importer. There is a necessity to satisfy business needs of small and medium-sized enterprises, build investment strategies that support enterprise capacity building, and develop global networks. MACD wants to take on that challenge.
MACD is a private equity firm registered in Ontario (Canada). MACD is interested in finding sustainable solutions to meet Africa’s food needs. MACD will start its operations in Côte d’Ivoire and open its headquarters in Abidjan. It is interested in investing in poultry and livestock to meet local needs for wheat, meat and milk, etc. After Côte d’Ivoire, MACD will expand its operations to the rest of Africa and globally.
Africa’s private equity industry is at an early stage of development, but it is growing steadily thanks to improving economic environment. This $32.9 billion industry is underfunded. The majority of funds are in the mid- market targeting fast growing mid- and small-sized companies. As of 2011, 23% of funds were invested in food and agriculture, etc. Over a 10-year period ending September 2012, Private Equity Africa annualized return was 11% outperforming MSCI Emerging Market Index.
In the short and mid terms, MACD will invest in poultry and livestock feed crop production and value-added agriculture respectively. It is expected that with a participation rate of 35% of an estimated population of 15.8 millions mobile phone users in Côte d’Ivoire, MACD would raise about $5.53 million over 2015-2021 period by selling its album alone and organizing its Première in Abidjan. This project will also generate thousands of direct and indirect jobs and build local enterprise capacity.
Marketing Plan and Development
Apart from using social media, the overall approach will be to generate grassroots support and referrals. MACD will hold concerts, presentations as well as participate at agricultural annual events such as ‘Salon de l’Agriculture’.
The greatest challenge will be to find partners (artists and sponsors) in Côte d’Ivoire. MACD will differentiate itself from its competitors by overseeing and streamlining agribusiness activities along the whole value chain. MACD will seek to build strategic partnership with governments and the private sector to create synergies as well as develop strong research culture to sustain agricultural development in Africa and continually innovate its products and services.
MACD will incur losses of $1.468 million in year 2, $0.292 million in year 3, $0.584 million in year 4 and $1.842 million in year 5 due to business expansion. However, from the third year on, the project will start financing itself as some farmers will be able to sell their products. Starting from year 6, MACD will generate sustainable return on its investments.
None. The company has budgeted $25,000 as initial capital. However, MACD is open to any partnership with interested investors or sponsors.