Discussion Document

Agriculture and Agro-Processing Investments

Strictly private and confidential
September 2014

Investment Thesis and

Opportunity

THESIS

Deep, sustainable, responsible investment (SRI) into agricultural value chains.

Investment targets must either be par.cipa.ng in, or have poten.al to par.cipate in the
whole agricultural value chain, from primary agriculture to consumer shelf, and, preferably
where opportunity exists to value-add to exis.ng waste streams.

Ini.al investment at a point in the value chain, secondary investment up and down the chain
whilst improving business process eciency, developing new products through benecia.on
of waste streams where possible and eec.vely expanding such value chain into new
markets.
AMrac.ve investment returns with increased margins and product diversica.on from
integrated supply chain, mi.ga.ng key investment risks.

OPPORTUNITY

Extensive opportuni.es to increase food availability through reduc.on in food wastage (60%)
and increases in produc.vity (precision farming 300% yield increase)
Growing demand for food from Southern Africa , one of the worlds key bread basket
regions
Increasing concerns around food security and its impact on socio-poli.cal stability
Global retailers and food wholesalers demand driven

Definition

Sustainable, responsible, impact inves.ng (SRI) is an investment discipline that

considers environmental, social and corporate governance (ESG) criteria to
generate long-term compe..ve nancial returns and posi.ve societal impact.

Strategy

Sustainable, Responsible Impact

Investment (SRI)

ESG incorpora.on as an investment strategy means the considera.on of

environmental, community, other societal and corporate governance (ESG) criteria
in investment analysis in combina.on with the tradi.onal nancial analysis.

According to the US SIF Founda3ons 2012 Report on Sustainable and Responsible Inves3ng Trends in
the United States, as of year-end 2011, more than one out of every nine dollars under professional
management in the United States$3.74 trillion or morewas invested according to SRI strategies.

Strictly private and confidential

Success of SRI lies in Key

Enablers across the Value Chain

Efficient and
constant supply

Innovation for
Advantage

Engaged
Employees &
Communities

Control of primary
supply stream

Profitability through
Waste Beneficiation

Focused and
Accountable

Diversify stream

Efficiency through
Capitalization

Inclusive and
Transparent

Leverage technology

Local Supplier
Development

Greater purchasing
power

Making a True
Difference

Individuals
Community
Environment

Driven by Market
Insights

Diversified income
stream
In-depth understanding
of the Market
Data driven pursuit of
"Demand Spaces

Utilisation of waste
Equal opportunities

Strictly private and confidential

Investment Objectives

Investment return expected to be in excess of 15% annualized with a *10 year investment
horizon for Investors. *preferred

Robust commercial returns through demand driven approach, key linkages and integration in
the supply-chain giving access to multiple local and global markets.

Combine strong commercial returns with deep RSI highly sustainability investment returns.

Expertise and experience of the agricultural and food supply-chain, its various stages, parallel
routes to market and development collateral opportunities.

Local presence and in-depth operational knowledge and expertise.

Rigorous investment management strategies to limit key risks and provide mitigation.

Proven track record of management. Agrigrowth will focus its investment efforts on deep RSI
and assign its management to target companies to assist in identifying and delivering
operational optimisation and drive the growth process.

AgriGrowth Presenta.on to

Copyright 2012 Calico Capital and Associates

Investment Criteria

Evaluate Targeted Investments against the following criteria:

Normal financial investment criteria

RSI criteria

Ability to expand upstream and downstream, through acquisitive as well as organic expansion

Capacity to include community

Ability to benefit from regenerative agricultural practices.

Invest in Target with selected synergistic investment partners

Actively manage investments to:

Deliver forecasts

Deliver RSI commitments

Expand across the supply chain, capturing as much of the value curve as possible

Optimize process efficiency (including production capacity through regenerative agricultural practices)

Develop alternative products from waste streams, focusing on nutritional and pharmaceutical value

Consider exits to Trade Buyers seeking a zero waste integrated supply chain
producing a variety of product within the nutritional and pharmaceutical industries.

AgriGrowth Presenta.on to

Copyright 2012 Calico Capital and Associates

NDLAMBE NATURAL
INDUSTRIAL PRODUCTS

Pineapple Supply Chain Investment

Farming Capacity increase:
Exis3ng 4,000 hectare to 8,000 hectare
dry land

Employment increase:
Exis3ng 1,100 employees - Permanent and
Seasonal
To 2,300 employees - Permanent and Seasonal

Business Growth:
Current Turnover R130m and prot R-3m
To Turnover R450m and Prot R100m

Strictly private and confidential

Pineapple Supply Chain Investment

Why the Pineapple Industry

Barriers to Entry

Ownership of value chain through contracted growers who have a

signicant equity stake in the business.

Value Chain

Primary produc.on of pineapples, conversion to pineapple juice

concentrate (PJC) and asep.cally packed raw juice (NFC). Conversion of
fruit process waste into dietary bre and agricultural biomass (plant
material) into bromelain and micro-crystalline cellulose.

Access to Market

Currently supply 85% to Europe and South America (Cargill, Coca Cola et
al) and 15% local (Ceres Juices et al). Dietary bre and other waste to
value-add product markets being developed.

Access to Raw Material

Currently low (65,000mt/annum), but signicant expansion opportuni.es

exist on previous pineapple land (140,000mt).

Impact on Communi3es

Currently employing circa 1,100 full .me employees and 500 seasonal
workers in value chain. Value add projects will add 1,200 to 1,500 jobs
in a rural area where unemployment rate is 76%.
Strictly private and confidential

Pineapple Supply Chain Investment

u

Products

Pineapple Juice Concentrate (PJC), Asep.c Raw Pineapple Juice (NFC),

Pineapple Dietary Fibre (DF), Micro-Crystalline Cellulose (MCC), Bromelain.

Business Model

Target Market

Food/beverage ingredient and nutra/pharmaceu.cal companies.

Compe33ve Advantage

Ver.cal value chain, innova.on through value addi.on to waste

opportuni.es

Combine FYE2014 nancial highlights

Rev 133,9m Opera.ng
Assets R191m

-
-

Prot R-3,2m (2015 R15m)

Liabili.es R86m

Management Team

Average length of employment 20 years

Current Achievements

Pineapple dietary bre world rst, limited commercial scale up.

MCC and Bromelain advanced pilot stage co-opera.on agreement with
Du Pont.
R30m grant funding awarded from EU via DTI for DF, MCC and Bromelain
Strictly private and confidential

Pineapple Supply Chain Investment

Investment Opportunity

Investment Required

Circa R35m ini.al investment required, ul.mately circa R300m to grow to

a fully integrated business with a turnover of R450m.

Use of Funds

Acquire shares in HoldCo to enable controlling interest in combina.on

with aligned par.es, acquire controlling stake in 2nd largest primary
agricultural opera.on.

Poten3al Exits

Sale to poten.al strategic partners (such as Du Pont)

Sale to Trade Buyer

Investment Returns

Es.mated 30% ROI over 5 years but models need to be nalised.

Impact on Communi3es

Employee trust currently holds 26% equity in HoldCo.

Targe.ng a transac.on with DRDLR to include workers in primary
agriculture and relocated processing factory in centre of produc.on area.
Employment opportuni.es to the local community.
Strictly private and confidential

Vegetable Supply Chain Investment

LIJANI BOERDERY

Farming Capacity increase:

Exis3ng 240 Hectare - Pivot Irriga3on
To 800 Hectare - Pivot Irriga3on
Total Farm Land owned > 2500ha

Employment increase:
Exis3ng 250 employees - Permanent and Seasonal
To 400 employees - Permanent and Seasonal

Business Growth:
Current Turnover R40m and Prot R6,3m
To Turnover R240m and Prot R40m

Vegetable Supply Chain Investment

Why the Vegetable Industry

Barriers to Entry

geographically bound due to price/transport dieren.al. Lijani Boerdery

is situated in Gauteng, at the market.

Value Chain

Lijani Boerdery already produce vegetables, wash and pack for retailers
and produced pickled vegetables under the Gold Crest and Pick n Pay
brands

Access to Market

Currently supply retailers Woolworths, Shoprite, Fruit n Veg, Spar and

Pick n Pay as well as producing own brands for smaller resellers and
fresh produce market. Have packing agreements with Gold Crest and Pick
n Pay with the ability to expand to other brands

Access to Raw Material

Currently access to arable land and irriga.on is Lijanis only limita.on.

Impact on Communi3es

Lijani is currently employing circa 150 full .me employees and 100
seasonal workers. The project will at least double this employment.
Strictly private and confidential

Vegetable Supply Chain Investment

u

Products

Carrots, Cabbage, LeMuce, Maize and Wheat as well as Beef

Target Market

Retailers and Food Services Industry with fresh and processed vegetables

Compe33ve Advantage

Business Model

Proximity to Market, Size (cri.cal mass), Experience, ver.cal integra.on

and Reputa.on

Combine FYE2013 nancial highlights

Rev 48,9m Opera.ng
Assets R74,7m

-
-

Prot R5,92m
Liabili.es R29,4m

Management Team

Farming since 1989. Started on 152ha

Current Achievements

Farming 2045ha - 240ha under irriga.on and vegetables.

Secured Gold Crest and Pick n Pay pickled vegetable contracts.
Owns Chalmer Beef Feedlot, capacity 12 000 caMle. 500 caMle in feedlot.

Strictly private and confidential

Vegetable Supply Chain Investment

Investment Opportunity

Investment Required

Circa R25m ini.al investment required ul.mately circa R75m to growth to

a fully integrated business with a Turnover of R240m.

Use of Funds

Acquire shares in Lijani Boerdery and Proper.es and inject working capital
to fuel acquisi.on of land and growth.

Poten3al Exits

Consolida.on with other synergis.c businesses

Sale to Trade Buyer

Investment Returns

Es.mated 31% ROI over 5 years but models need to be nalised.

Impact on Communi3es

Targe.ng a transac.on with DRDLR to include Workers in Shareholding

Structures
Employment opportuni.es to the local community.

Strictly private and confidential

Other Supply Chain Investment

Target Criteria:

Potential Targets: MEAT

Protable Feedlot with Working Capital to sustain growth

Capacity and Op.ons to expand via Ver.cal Integra.on
Preferen.al/ Secure Access to animals
Experienced Management Team
Niche Access to Markets

Strictly private and confidential

Other Supply Chain Investments

Target Criteria:

Potential Targets: Fruit

Protable Fruit Processors

Capacity and Op.ons to expand via Ver.cal Integra.on
Valuable Waste stream available
Preferen.al/ Secure Access to Fruit
Op.on to engage in Corporate Farming
Niche Access to Markets

Strictly private and confidential

Design Quarter
Corner William Nicol Road and Leslie Ave.
Fourways
2128

P.O. Box 3845

Dainfern
2055

Tel: 046 624 2228

Fax: 086 696 4595

Email: info@calicocapital.co.za