|SUMMARY MANAGEMENT PRODUCTION LOCATION MARKET TECHNOLOGY FINANCE 2.PAGER Why SMB|
On the proposed large-scale acreage the following crops would be grown:
Rapeseed | Wheat | Brewing Barley | Sunflower | Corn | Soybean … and other crops determined by season and market need.
Sowing would be in the autumn and spring. The harvest of individual crops is proposed to start in mid-June and last until the end of each year. These would be marketed through traders as quality basic food charged at world market prices (commodities exchange). By optimizing storage capacities, these can be scaled and processed specifically to meet the demand of raw materials in the market. Operating like this assures secure market acceptance - it's just that the buying price may vary slightly. The price history of these products in recent years moves towards longterm prices rises, since the world's population is rising and arable land is becoming scarcer. It is therefore apparent that the land also will inevitably increase in value as well.
Due to an increasing world population and increasing demand for food, the demand will continue to increase for a long time yet. The acreages are limited for the long term and thus can also be considered from a long-term deadlines price increase.
In addition, there are also various finishing options for crops. Just as an example, a certain proportion of the rapeseed can be pressed and marketed locally to be used as cooking oil, then the resulting rapeseed cake can also be used or sold as animal feed.
According to current professional calculations, annual production based on current world market prices per hectare of land in the Ukraine look like this:
Experience has shown that approximately 60 percent of the expected average yield per hectare can be produced at start-up of the production in the first year. This percentage increases to approximately 80 and 100 percent during the second and third year, respectively. During the infrastructure construction phase, products can be arranged in “nearby storage” so the usual world market price are attained, in order to avoid price losses up to an estimated 20%. The total cost of “nearby storage” amounts to around 33.8 Euros/ ton/ year. We expect that storage until the following year of the investment can be carried out in the warehouse property.
Since these are non-cyclical and non-durable products, there is no product life cycle as such.
We would utilize the global commodities markets as purchasers of our agricultural products. For staple foods, the stock exchanges in Paris and Chicago are the main handlers.