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GOLD BANANA COMPANY S.R.L. COMPANY OVERVIEW AND CHALLENGES 1.

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Presentation on theme: "GOLD BANANA COMPANY S.R.L. COMPANY OVERVIEW AND CHALLENGES 1."— Presentation transcript:

1 GOLD BANANA COMPANY S.R.L. COMPANY OVERVIEW AND CHALLENGES 1

2 GBC OVERVIEW GOLD BANANA COMPANY S.R.L. IS THE COMPANY CREATED IN THE DOMINICAN REPUBLIC WITH A SOLE PURPOSE OF ESTABLISHING A MODERN AGRICULTURAL ENTERPRISE DEDICATED TO PRODUCING ORGANIC FRUIT WHILE UTILIZING BEST AGRITECHNOLOGY AND LATEST GROWING / HARVESTING TECHNIQUES. 2

3 GBC OVERVIEW OUR LOCATION: – SELECTION OF OUR LOCATION – CABEZA DE TORO, GUAYUBIN, MONTECRISTI – WAS PREDICATED BY THE FOLLOWING FACTORS: CLIMATE SUITABLE TO GROWING ORGANIC BANANAS ACCESS TO CLEAN WATER SOURCE AMOUNT OF LAND REQUIRED FOR EFFICIENT OPERATION AVAILABILITY OF EXPERIENCED LABOR FORCE 3

4 PLANTATION DESIGN – 230 HA OVERALL, ABOUT 200 HA (3,500 TAREA) PLANTABLE – DOUBLE-ROW, HIGH DENSITY PLANTING – DRIP-IRRIGATION (3 LINES/DOUBLE ROW) – ELECTRIC IRRIGATION PUMPS – FERTIGATION – WELL WATER FOR PROCESSING FRUIT WATER TREATMENT (FILTERS, UV, RECIRCULATION, REVERSE OSMOSIS, CARBON FILTER ON DISCHARGE) – CAPTURE OF RAIN WATER (3 LAGUNAS, GRAVITY FED) – EXTENSIVE MULCHING GBC OVERVIEW 4

5 GBC ACHIEVEMENTS AS OF APRIL, 2013, THE FOLLOWING HAS BEEN ACCOMPLISHED: – 1000 TAREAS (65 HA) IN PRODUCTION CONSTRUCTED WATER SUPPLY PIPELINE FROM GUAYUBIN RIVER TO THE PLANTATION (16, 3.5 KM LONG), TURBINE WATER PUMP AT THE RIVER IS PROVIDING 3,000 GPM FOR THE IRRIGATION BUILT CENTRAL PUMPING STATION CAPABLE OF SUPPLYING 7,000 GPM TO THE FIELD – BATERY OF 100 HP ELECTRIC MOTORS/PUMPS – STATE-OF-ART DISK FILTERS – FERTIGATION TANKS/PUMPS – ARRAY OF 250 KWH GENERATORS CLEARED / BUILT APP. 15 KM OF INTERNAL ROADS 5

6 GBC ACHIEVEMENTS – CREATED IRRIGATION SYSTEM 15 KM OF MAIN PVC PIPES 650 KM OF DRIPLINE 12 IRRIGATION ZONES / 96 ZONE VALVES – PLANTED 220,000 BANANA PLANTS – CONSTRUCTED ABOUT 10 KM OF CABLE WAY – BUILT 1,000 SQ. M. PACKING HOUSE AND ASSOCIATED INFRASTRUCTURE – DEVELOPED WATER WELLS FOR PROCESSING NEEDS – INSTALLED STATE-OF-ART WATER TREATEMENT FACILITY – OBTAINED 2 EACH ORGANIC PRODUCTION CERTIFICATES FOR USA AND EU (CONTROL UNION AND BCS) ALSO: – 1,100 TAREAS HAS BEEN CLEARED AND IS BEING PLANTED 6

7 GBC CHALLENGES TO MAXIMIZE RETURN ON THE INVESTMENT, FOLLOWING CONCERNS MUST BE ADDRESSED: – HIGH COST OF ENERGY NEAREST 3-PHASE POWERLINE IS ABOUT 15 KM AWAY, NON- INTERRUPTED POWER SUPPLY IS UNAVAILABLE, COST OF ELECTRICITY IS CONSTANTLY RISING DIESEL-POWERED GENERATORS ARE REASONABLY RELIABLE, BUT COST OF FUEL IS EXTREMELY HIGH AND IS RISING – WHILE INTERNAL INFRASTRUCTURE (ROADS, DRAINAGE, ETC.) IS MANAGEABLE, EXTERNAL IS NOT 9 KM OF UNPAVED ROAD PREVENTS OPERATIONS DURING PERIODS OF RAIN – EXPORT OF FRUIT, RELYING ON EXISTING EXPORTERS FOCUSED ON EUROPE, IS NOT ASSURED AND IS NOT RELIABLE 7

8 GBC CHALLENGES DISCUSSION ENERGY – TO ASSURE EFFICIENCY, ALTERNATIVE SOURCES OF ENERGY MUST BE EXPLORED SINCE WIND POWER IS NOT CONTINUOUS AND SUFFICIENT WIND VELOCITIES MAY NOT CORRESPOND TO PRODUCTION CYCLE (6AM TO 6PM), AS WELL AS HIGH COST OF ENERGY STORAGE, WIND POWER MAY ONLY BE CONCIDERED AS SECONDARY, SUPPLEMENTAL SOLUTION PRESENT RELIANCE ON DIESEL POWERED GENERATORS IS PROVING TO BE VERY EXPENSIVE AND AVAILABILITY OF PROPER GRADE FUEL IS SCARCE – OUT OF THE OPERATIONAL EXPENSE OF ABOUT USD $100,000 PER MONTH, ABOUT 45% IS COST OF FUEL 8

9 GBC CHALLENGES DISCUSSION 9 USING SIMPLIFIED CALCULATION, IT IS APPARENT THAT THE COST OF PRODUCING A BOX OF FRUIT IS THE FOLLOWING: - EXPENCES OF ABOUT USD $65,000/MONTH (EXCLUDING AMORTIZATION OF THE INVESTMENT) - GROSS SALES OF ABOUT 23,000BOXES PER MONTH (417,000 KG) - COST PER BOX ON THE AVERAGE OF USD $ PRICE PER BOX, PAID BY THE EXPORTERS, RANGES FROM USD $4.00 TO USD $9.20, DEPENDING ON THEIR REQUIREMENTS AND SIZE OF FRUIT -IN OUR EXPERIENCE, AVERAGE PRICE PAID PER BOX IS ON THE ORDER OF USD $7.40, LEAVING ABOUT USD $4.57 OF GROSS PROFIT PER BOX

10 GBC CHALLENGES DISCUSSION CONCLUSION: – WHILE PAYROLL IS A MAJOR PART OF THE EXPENSE, EXPERIENCED PERSONNEL IS THE KEY TO SUCCESSFUL OPERATION – CONSUMABLES, SUCH AS FERTILIZERS, NEED TO BE MANAGED BUT ARE CRUCIAL TO PLANT GROWTH – FUEL EXPENSES MUST BE REDUCED – EVERY USD $10,000 TRANSLATES INTO USD $0.60 PER BOX – SOLAR POWER IS THE ONLY ALTERNATIVE THAT MAY ALLOW FOR SIGNIFICANT OPERATIONAL COST REDUCTION PERIODS OF SUN AND RAIN CORRESPOND TO IRRIGATION NEEDS STORAGE OF ENERGY IS DESIRED BUT NOT REQUIRED TEMPORARY OUTAGES MAY BE COMPENSATED BY DIESEL POWER 10

11 GBC CHALLENGES DISCUSSION EXPORT ISSUES: – EXPORT MARKET IS PRESENTLY DRIVEN BY A FEW EUROPE-ORIENTED EXPORT COMPANIES – EXPORT TO USA IS LIMITED IF NOT NON-EXISTENT NORTH AND NORTH-WESTERN PARTS OF DR DO NOT HAVE READY ACCESS TO THE CONTAINER PORT FACILITIES – FRUIT HAS TO BE TRUCKED TO SANTO DOMINGO AT THE 600% OF THE COST OF TRUCKING TO MANZANILLO MAJOR BRAND CONTROLLED MARKETING ADVERTISING IN USA DOES NOT ALLOW DOMINICAN FRUIT TO ESTABLISH A FOOTHOLD SINGLE FRUIT MARKETING MAY NOT BE AS EFFICIENT AS A BROADER COUNTRY / MULTIPLE FRUIT / LIFESTYLE CAMPAIGN 11

12 GBC SOLUTIONS SOLAR POWER, AS EXPENSIVE AS IT MAY BE TO IMPLEMENT, IS THE ONLY VIABLE, LONG TERM SOLUTION – ATTENTION SHOULD BE PAID TO: GRANTS AVAILABLE FROM EU, USA AND OTHER SOURCES, SPECIFICALLY DESIGNATED FOR IMPLEMENTATION OF RENEWABLE SOURCES OF ENERGY ASSISTANCE FROM MANUFACTURERS OF SOLAR ENERGY EQUIPMENT, WHETHER IN THE FORM OF VENDOR FINANCING OR GOVERNMENTAL SUPPORT LOW-COST FINANCING OF SOLAR POWER INSTALLATIONS OUR PRESENT NEED IS 500 KWH, GOING TO 750 KWH IN 6 MONTH 12

13 GBC SOLUTIONS INFRASTRUCTURE MUST BE IMPROVED – UNPAVED ROADS NEED TO BE BROUGHT TO ACCEPTIBLE CONDITION AND PROPERLY MAINTAINED DRAINAGE CHANELS MUST BE CUT AND MAINTAINED SURFACE OF THE ROAD MUST HAVE AT LEAST A LAYER OF GRAVEL – THE GOVERNMENTAL PROGRAM FOR MAINTAINING LOCAL ROADS SHOULD BE USED TO RESOLVE THE ISSUE 13

14 GBC SOLUTIONS EXPORT – ORGANIC PRODUCTS, BEING THE MAIN EXPORT STRENGTH OF THE DOMINICAN AGRICULTURE, SHOULD BE USED TO PENETRATE THE USA MARKET – MULTIPLE PRODUCTS, SUCH AS BANANAS, PLANTAIN, MANGO, ETC., SHOULD BE MARKETED TO BROADEN THE COUNTRYS APPEAL – VALUE ADDED PRODUCTS, I.E. BANANA AND PLANTAIN CHIPS, BANANA PUREE AND PRESERVES, SHOULD BE MANUFACTURED AT THE POINT OF GROWING LOWER TRANSIT DAMAGE TO THE FRUIT REDUCED TRANSPORTATION COST INCREASED LOCAL EMPLOYMENT INCREASED PROFIT FOR LOCAL ECONOMY 14

15 GBC CONCLUSION GBC IS CONFIDENT THAT WITH ASSISTANCE OF APPROPRIATE GOVERNMENTAL AGENCIES OF THE DOMINICAN REPUBLIC MOST, IF NOT ALL, OF THE ISSUES AND CHALLENGES CAN BE SUCCESSFULLY RESOLVED. BENEFITS OF THIS RESOLUTION WILL BE ENJOYED BY A BROAD RANGE OF POPULATION, SUCH AS: – WORKERS IN THE FIELD – ARICULTURAL EQUIPMENT OWNERS/OPERATORS – ENGINEERS/AGRONOMERS – OWNERS OF AGRICULTURAL ENTERPRISES – TRANSPORT SECTOR – EXPORT MANAGERS INCREASED AND HIGHER VALUE EXPORT WILL INEVITABLY LEAD TO HIGHER EMPLOYMENT AND ADDITIONAL REVENUE FOR THE DOMINICAN REPUBLIC 15


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