tanzania hub for cashewnut processing

“CASHEWS FOR ENTREPRENEURS"

DEVELOPING TANZANIA NATIONAL ENTREPRENEURSHIP IN CASHEW PROCESSING INDUSTRY

AN INITIATIVE BY KAMAL GROUP

TANZANIA HUB FOR CASHEWNUT PROCESSING

“CASHEWS FOR ENTREPRENEURS"2

KAMAL GROUP OF COMPANIES-INTRODUCTION

Kamal Group registered in Tanzania starting with Kamal SteelLimited in 2004 and today it has become largest Hi- Tensile SteelRe-bars producer in East Africa.

Kamal group over the period has matured, apart from the Steelsector, has also started operating in various other sectorsincluding agricultural sector which is operated under Kamal Agroltd.

Kamal Agro ltd apart from investing in Coffee business, currentlyhas initiated a plan to develop entrepreneurs in Tanzaniathrough small-mid industries for processing raw cashews withinTanzania.


KAMAL GROUP OF COMPANIES-INTRODUCTION..

• Kamal in appreciating the efforts of fifth government ofTanzania under His Excellence Dr. John Pombe JosephMagufuli of making Tanzania industrialized country, willdevelop exceptional Institution which will train and facilitateEntrepreneurs who are passionate to invest in cashewprocessing industries. That institution will be called “KamalCashewnut Processing Institute and Training”

• “Kamal Cashewnut Processing Institute and Training” hasplanned to establish Cashewnut Industry with the aim to makeTanzanians as entrepreneurs and to create jobs and generateforeign exchange for the country.


CASHEWNUTS PROCESSING OPPORTUNITY IN TANZANIA

➢ Having more than 90% of total production of raw nuts exported in raw form toIndia, the country is not only losing incomes from export of processed Cashewnut,but also there is a loss of employment opportunities to local communities andalso loss from export of by-products.

➢ Tanzania’s Cashewnut industry has a lot of attractive investment potentials, withpromising returns within short and medium term horizons.

➢ There are still promising investment options that can have an immediateeconomic impacts in the societies growing Cashewnut and create financialbenefits to investors within short terms through establishment of medium tolarge scale factories.

➢ Engaging local communities in the ownership of the stake in the factories will notonly provide sustainable supply of raw Cashewnut to the factories, but also willprovide a direct bridge between farmers and the markets which will encouragefarmers to sustainably increase production at farm.


KAMAL VISION

➢Developing the industrial entrepreneurs in Tanzania and generatemultiple employment without any foreign investment.

➢100% processing of cashews in Tanzania and making Tanzania ascashew nuts hub as the world market is increasing at a sustainablegrowth rate of 10%.

➢Kamal initiates to incorporate model institute and factory whichshould develop within 6 months.

➢On the successful implementation of model institute and factory,Kamal shall start its first phase of employing 100 Tanzanianentrepreneurs with second and third phase shall follow.

➢To create Kamal Industrial Estate at Zinga, Bagamoyo as Cashewsprocessing hub.


CASHEWNUTS PROCESSING STEPS

Cashew Nuts Processing Unit Steps

Drying

Shelling

Removal of the Testa

Grading

Packaging

By-Products


PROPOSED MODEL- COTTAGE INDUSTRY

PROPOSED MODE-CASHEWNUTS INDUSTRY

With the help of Government of Tanzania and Banks, Kamalhas planned to make a team of 100 entrepreneurs in 1st phasewhich shall be a part of cottage industry.

Banks to finance each of the 100 entrepreneurs.

Kamal will control all the operations and logistics with itsspecial team, who will give training on machine operationsensuring no burden on entrepreneurs

On start of each cottage industry, Kamal shall procureprojected raw cashew nuts through Cashewnut Board (withGovernment support) and give to each entrepreneur eachweek on job work basis.

Entrepreneurs will be motivate to process good quality cashew as their efforts give them good income and incentives.


PROPOSED MODEL- COTTAGE INDUSTRY…. CONTD.

PROPOSEDMODE-CASHEWNUTSINDUSTRY

Create the atmosphere for industrialization andentrepreneurship.

Kamal to ensure that no Entrepreneurs to suffer and default atany point of time.

Kamal shall pay to each Entrepreneurs on weekly basis basedon their cashew processing targets.

Entrepreneurs has absolutely no risk on procurement and saleof Cashewnut at any point of time as it will be given on Jobwork basis by Kamal.

Kamal to ensure that good quality cashews are packed invacuumed and nitrogen packaging of international standardsensuring all required international certifications to export allover the world.


PROPOSED MODEL- GOVERNMENT SUPPORT AND INCENTIVES

Government to recognize these cottage industry underspecial category to give single license to operate andprovide all needed licenses at free of cost to motivateand attract individuals to become entrepreneurs.

Government to support each of the entrepreneurs withTax incentive and other incentives.

Kamal team has worked for almost three years todevelop the model to lower down the cost which shallbe acceptable for both the Government andentrepreneurs with bank facilities and Governmentsubsidy.


PROPOSED MODEL- BENEFITS

PROPOSEDMODEL-BENEFITS

Utilization of own country recourses and multiple fold of thevalue addition.

Direct employment of 2000 employees and indirectemployment of 1000 employees. This is a women centricindustry, hence empowering Tanzanian women

Skills development and processing skill with Tanzanian national

Substantial growth in foreign currency inflow resulting betterGDP of the Country.


PROPOSED FINANCIAL MODEL

• Assumptions:

– Each factory to process 150,000 Kg of raw cashew each year.

– Approximately 22% of good quality cashew nuts are processed,i.e. 33 tones of processed cashew each industry each year.

Calculation of Total Investment Cost

Land and building cost for 200 sq. meter area

Particulars Amount in TZSLand and Building 200 Sq Mts @ TZS 225,000 per

Sq Mtr 45,000,000

Total Land & Building Cost 45,000,000


PROPOSED FINANCIAL MODEL..CONTD..

Calculation of Total Machinery Cost for processing 150,000kg/Year of raw cashew nut.

Total Machinery Cost No of Machine Capacity Amount in TZS

Boiler 1 160 Kg Capacity 6,750,000.00

Automatic Cashew Nut Cutter 3 25 kg per hour 10,800,000.00

Electric Dryer 1 100 Kg capacity per hour 4,500,000.00

Peeling Machine 1 25 Kg capacity per houe 10,800,000.00

Grinding Table 4 2,250,000.00

4,500,000.00

39,600,000.00 Total Machinery Cost

General Electrification and Other expenses


Calculation of Total Investment for processing of 150,000 kg/Year of rawcashew.

Source of Investment:

• Bank Finance @ concessional interest rate of 10% is expected and repayment within three years

Particulars Amount in TZS

Land and Building 45,000,000.00

Machinery Cost 39,600,000.00

Total Cost 84,600,000.00

Total Investment Cost

Source of Investment Amount in TZS

Own Finance (20% of the Total Cost) 16,920,000.00

Bank Finance (80% of the Total Cost) 67,680,000.00



• CASH FLOW PROJECTIONS FOR EACH ENTERPRENEURS

Remarks :Each entrepreneur spending own fund of TZS16,920,000, earns a total profit of TZS 37,834,654 under thismodel.


Particulars Amount in TZS

Cash Inflows for Each Entrepreneurs

Each Entrepreneur to get TZS 697,500 per tonnes as conversion cost 104,625,000.00

Total Cash Inflows (A) 104,625,000.00

Cash Outflows for each Entrepreneurs

Water and Electricity 4,500,000.00

Women worker (Mostly) 36,338,495.58

Bank Interest 3,451,850.44

Loan rapayment (Capital) 22,500,000.00

Total Cash Outflows (B) 66,790,346.02

Total Profit- Each Entrepreneur C= (A-B) 37,834,653.98


• CALCULATION SHOWING PROSPECTIVE REVENUE LOSS TOGOVERNMENT AS A RESULT NOT PROCESSING CASHEW INTANZANIA

A prospective net saving of USD 300 Mn. and major foreigncurrency inflow shall improve the country’s economy.

ECONOMY IMPROVEMENT OF COUNTRY

Particulars Numbers

Approx. Yearly Cashew Production (in Tons) 300,000

Processing @ 22% of Raw Materials (in Tons) 66,000

Cashew Rate per Ton for Raw Cashew (in USD) 1,200

Processed Cashew Rate per ton (in USD) 10,000

Current Government Revenue out of export of Raw Cashew (in USD) 360,000,000

Tentative Cashew Revenue post Processing and Export (in USD) 660,000,000

Loss of Revenue to Government (in USD) 300,000,000


Conclusion

• As a social and economic initiative's taken by Kamal Group Chairman Mr.Gagan Santosh, his main vision is to create entrepreneurship and theseentrepreneurs will create direct employment for 2000 people and indirectemployment for approx. 5000 local people.

• With the implementation of this project, a message will be given toTanzanian people to get attracted to the project which will help them tobecome entrepreneurs.

• The main reason to setup the project in nearby Dar-es-salaam is that it willbe better managed and controlled well since Kamal Group head office andother businesses is being operated from the city itself. In addition to thisTop class Port facilities are available in Dar es Salaam for Exports.

• Kamal Steel has a fully developed SEZ/ EPZ facilities at Zinga, Bagamoyo forfacilitating the above project.

• Kamal management can take of the project personally as Mr. GaganSantosh wishes to control day to day operations to make the projectsuccessful.


Future Vision of Kamal Group

• After the successful implementation of this project, Kamal Group plan to takethis project to next level by implementing the same model in other parts ofthe country like , where cashew nuts are grown.

• By implementing the project in other parts of the country will help to createmore entrepreneur and also create job opportunities for local in other part ofcountry.

• The project intends to give priority to local people of the country which willcreate a positive atmosphere and Tanzania can become one of the largest Hubfor Cashewnut processing plant which will directly create job employment forthe people and indirectly increase the foreign exchange reserves of thecountry thru exports of finest Cashewnut through out the world.

• Kamal is also thinking to start a manufacturing unit to make Cashew nutprocessing machinery in Tanzania which will help in developing more Cashewnut processing units here which will add great value addition in the countryand it will create more job opportunity to Local people.


CONCEPT OF PROJECT OPERATION AND TRAINING INSTITUTE

ENTREPRENEURS SKILLS AND CAPABILITIES .

-Must be Hardworking

-Must be having soft skills( Be calm and humble)

-Must be a good learner

-Must be well behaved

-Must be disciplined

-Must Learn and posses cultural of Entrepreneurship

-Must be a good student


ENTERPRENUERS RESPONSIBILITIES ON CASHEW PROJECT

1. Entrepreneurs will pay salary workers

• Entrepreneurs will be able to pay workers from the monthly cashthey receive from Kamal after they buy their processed cashew.Cash can also be used for other expenses.

• Entrepreneurs must pay workers for their day-to-day workaccordingly.

2. Entrepreneurs must meet minimum requirement of output:

• The minimum requirement must be produced. They have to bringto Kamal Facilities all the finished and wastage cashew and getthe fixed amount and get the fixed amount in kg.


KAMAL FACILITATION ON THE CASHEW PROJECT.

1. Quality Control

• It is the responsibility of Kamal to provide technicians to train and educateentrepreneurs about the best quality of Cashew.

2. Purchasing of Raw Cashew

• Kamal will buy and provide entrepreneurs with the raw cashew that needs to beprocessed. There will be a required fixed quantity given to the entrepreneurs.

• Kamal will give a fixed amount of cash to the entrepreneur per kg of processedcashew they get from the from

3. Kamal will watch to see workers are paid on time.

• Kamal will oversee to see workers are paid from the cash given to them frombuying their cashew.

4. To Fix a monthly output of production.

There will be a set required output which will be expected by Kamal from theentrepreneurs.


Cont.

1. Conversion Cost

• Kamal will control on the payments to the bank, the money will be deducted fromthe entrepreneurship. Electricity/ Water will be paid by Kamal.

2. Kamal will be responsible for all output

• such as Quality, Repair, Service, Maintenance, Technical. These will be available in24 hours.

3. Faculty and Facility-

• Kamal faculty and team for Cashew project will be available on the ground.

4. Kamal will be responsible to provide good machine

• for quality control, sorting the products, packaging machines with Nitrogenfacilities.

5. Kamal will also assist in all the necessary licenses

for export the rest of the world, procure needed to export the finished good and all thefood licenses to introduce Tanzania finish good to all over the world.


Certificate of 5 years training to theEntreprenuers

• All in all after 5 years entrepreneurs can decide if they want to be under the umbrellaof Kamal or they want to stand on their own feet and own the industry, because all itneeds is money, skills, and market.

• In the first 5 years there is no responsibility of market or loosing the money asKamal is buying the raw and finished goods all together. This time is the good timeto learn and earn and acquire what you will need for later if you choose to own foran industry

• //In order for the cashew industry to be fruitful, people needs to have the rightknowledge and skills to help in making the whole process of cashew industrysuccessful.

• It is somehow like university which will be a platform for the knowledge andpractical teachings of the Cashew Industry.

• It aims at developing people to be entrepreneurs and industrialist in the country


We help to create Entrepreneurs

• Syllabus:

1. How to Operate machine

2. Time management of Machine output

3. Usage of utilities (water, electricity, etc.)

4. Salary Management

5. Taxation & Responsibilities towards the government.

6. Ethics and Principals for Entrepreneurs (Honest, Value.

7. How to manage Cashflow & Inventory

8. Understand the value of Savings

9. Fair Competition

10. Expertise

11. Sharing of knowledge

12. Hard working

13. Savings for future

14. Legacy – to let legacy behind the entrepreneurs


CONT

• Duration- Just like a degree of university is a 5 years courses

• We will certify and issue certificate of a successful industrialist and theknowledge will be passed on generation to generation.

• Rules must be obeyed as students obey university rules.

• Transfer of knowledge and merits can help Tanzania to be fully independent.

• The Legacy will continues for the people and the country overall.


SUCCESS OF THE PROJECT

PROJECT OF THIS SIZE AND WITH SUCH VISION CAN ONLY SUCCEED IF GOVERNMENT OFTANZANIA ALONG WITH BANKING SUPPORT CHANNEL ACCORDS ALL BENEFITS. THISPROJECT IS DIRECTLY BENEFICIAL TO TANZANIA AS A NATION AND ITS POPULATION WHOWILL HAVE ACCESS TO INDUSTRILISATION, BENEFIT OF DIRECT AND INDIRECTEMPLOYMENT, IMPROVEMENT OF TECHNICAL SKILL & KNOW HOW, SUBSTANTIALINFLOW OF FOREIGN EXCHANGE.

tanzania hub for cashewnut processing

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