The issues surrounding environmental pollution and food safety, combined with the growing demands placed on farmers to increase crop yields, require action now to ensure sustainability of our food supply into the future.
It also impacts upon our business directly: Terravana’s palm mills require a steady supply of crude palm oil from palm plants, while our bio energy business hinges on the success of cassava growing programs. In order to mitigate risk and assure the future viability of our businesses, Terravana has to become involved right at the start of the growing process; for this reason, we are establishing a bio fertilizers business in countries across Sub-Saharan Africa and South Asia.
The bio fertilizers business is based on assured buybacks from partners with a strong local presence, and will enable us to focus on building a farmer-friendly, value-oriented business line, from initial growing phase through to the final product.
"In 2020, we will be investing $12.4 million into a further four plants, in Zambia, Indonesia, Sierra Leone and Vietnam, giving us a total of 13 plants"
Terravana has already raised the capital for our first three plants in Malaysia, Indonesia and Zambia. We are also investing $18.6 million for a further six plants – three in India and one each in Kenya, Ethiopia and Malaysia – bringing our total number of plants to nine by the end of 2019.
In 2020, we will be investing $12.4 million into a further four plants, in Zambia, Indonesia, Sierra Leone and Vietnam, giving us a total of 13 plants. Our greatest presence will be in India, followed by Indonesia and Malaysia, where our bio energy and palm mills operations take place.
Each plant can be fully operational after two years, and can begin production after a maximum of nine months of set-up time. In the second year of construction, there is a focus capacity and efficiency increase across to 100% over a five-year period, and the consolidation of our marketing and sales activities for our products. Our efforts in this regard will be differentiated for our main South Asia and Sub-Saharan Africa markets due to the differences in market maturity.
Terravana has an advantage in that we can acquire pure cultures from our research and development laboratories based in the UK, which will provide us with access to high quality products, expert microbiologists and the latest technology. Centralized development and sub-culturing in the UK will minimize costs, while conducting the remaining processes at in-country laboratories will ensure the provision of local jobs.
We will produce four organic materials in total:
Our differentiated efforts will be tailored to our two specific markets. In Sub-Saharan Africa, our primary customer will be the government, and therefore sales will be generated through participation in tenders and other public systems. Terravana will also leverage links with local government bodies and philanthropic organisations to bring about policy changes favourable towards bio fertilizers, to ensure both the future sustainability of this business model, as well as improved crop yields.
Meanwhile in South Asia, our primary customers will be the palm mills and the farmers themselves. The market itself is more economically developed, and potential clients will be reached through both physical and virtual means. In India, we will also leverage our network with the Consortium of Indian Farmers Association to build sales.