An abridged overview: how the money for our intended plant shall be spent if we only raise $15m in total, versus if we raise $45m:
Note: this is only an abridged overview. A detailed description of what we will do better if we raise $45m instead of $15m, is on the UCF website.
But in short, here are 3 reasons why $45m would do a better job:
1). Given the geographical vastness of, and the level of poverty in, our region, our goal is to have a plant that can support as many rural poor farmers as possible, in terms of its capacity to consume their produce.
2). Considering the social-economic status of farmers in our region, our plant will be required to provide all our target farmers with initial inputs (all free), along with other ongoing extension services, to enable these farmers participate in this work successfully. So, we will need a sufficient budget for farmer support, as our work will span a big geographical area.
3). Our goal is to have an integrated agro-processing plant that shall help rural poor farmers diversify their incomes, by creating markets for more than one type of crop. In this respect, $15m will only get us a very small plant, as this plant will have multiple components, from cassava starch to High Quality Cassava Flour to fruit processing to cereal/grain cleaning.
So, here is what we will do if we raise $15m vs if we raise $45m:
a). If we only raise $15m, we will use $380k of this, to install a starch facility of 1 ton/hour (or 24 ton/day). If we raise $45m instead, we will use $2.4m of this, to install a 3 ton/hour (or 72 ton/day) starch facility that could support a relatively bigger number of farmers.
b). $14m will install a 6 ton/hour fruit processing facility if we raise $15m, but if we raise $45m, we will use $28m on a facility twice that capacity.
The former (i.e. a 6 ton/hour facility) will only be able to consume our farmers’ produce for the first 1-2 years. But once all farmers have planted a sufficient volume of fruits, which will automatically result from the presence of a ready market, this plant will be too small, starting year 2 onward. A $28m facility will do a better job, though it will still be small too.
For example, the Soroti Fruit Factory, which was installed by Uganda’s government in 2019 in the Teso region, and which also has a 6 ton/hour capacity, was outrun by farmers in only the first year of operation — and today, an inability to consume all the local farmers’ fruits is one of their biggest challenges, as reported here in 2020 (and also here in 2021).
By comparison, the Benfruit Plant in Nigeria, which was developed by Tony Elumelu, has an annual capacity of 26.5 million tons, equivalent to 3,025 ton/hour. In our own case, if we raise $45m in total, we will have a plant that can only do 12 tons of fruit per hour, still far smaller than the capacity of the Benfruit Plant, but at least better than nothing.
c). $200k will provide farmer support if we only raise $15m. But given the social-economic status of farmers in our region, and the fact that our plant will be required to provide all our target farmers with new planting materials to ensure that their crops are of the right variety, yet our work will span a large geographical area, $200k won’t suffice farmer support.
We will instead allocate $2m on this over four years, if we raise $45m.
To see the kind of support that we will provide to all the participating farmers once this plant is installed, see our planned Business Model.
d). Our $15m budget doesn’t include any working capital. So, if we only raise $15m, we will run the risk of installing this plant but with no working capital to operate it. If we raise $45m in total, we will use $3m in working per year, for the first 4 years, totaling $12m. From Year 5 onward, the plant will have a sufficient income to enable us use our own working capital.