1 absa agribusiness in africa presentation to the southern africa trade hub delegation may 2011
Post on 17-Jan-2018
217 Views
Preview:
DESCRIPTION
TRANSCRIPT
1
Absa AgriBusiness in Africa
Presentation to the Southern Africa Trade Hub Delegation
May 2011
2
Contents
• Footprint• Background• Agricultural Risks• Typical Agricultural Supply Chain• Typical Agricultural Value Chain as basis for Financial Solutions• Products and Initiatives
Footprint
Absa Africa operates conventional banking in 2 countries:• Mozambique - Barclays Bank Mozambique• Tanzania - National Bank of Commerce (NBC)• Namibia - Representative Office
Barclays Bank operates in the following countries:1. Botswana 2. Seychelles3. Egypt 4. Tanzania5. Ghana 6. Uganda7. Nigeria (Rep. Office) 8. Zambia9. Kenya 10. Zimbabwe11. Mauritius
4
• Farmers exposed to market risks (Quantity and Price).• Limited development of the agro-processing sector (prolonging
shelf life, value added outside region of production).– Inelastic demand and supply.– Price volatility – prices at the bottom soon after harvest.– Poor effective demand (Poverty in the local communities).
• Poor Profitability– Reduced production and no incentive to increase productivity.
• Less adoption of quality seed.• Less/no attention to soil quality and thus fertiliser
usage.– In the large-scale commercial environment, farmers
will increase scale or reduce costs to remain profitable.
• No incentive to protect environment.
Background
Agricultural Risks
• Market Risk (Price, Storage, Third party risk)– African farmers face prices greatly influenced by the international markets.– Have very little control over pricing levels and tend to be price takers with prices varying between
import and export parity.– Factors influencing prices over which they have no control include international production trends,
subsidies, exchange rates, import and export tariffs.
• Production risk– Production risk due to climatic changes (drought, hail, etc.)– Poor management and planning.– Risks can be managed through insurance and technology improvements.
Typical Supply Chain in Southern Africa
Store Produce Store ProcessTransport Transport
Input Supplies Growing Crop Harvested Produce
Plant Harvest Consumer
Food & Energy
Input Supply Credit Contract Farming Warehouse Receipts
Finance Cycle
ManufactureManufacture
Typical Agricultural Value Chain as basis for Financial Solutions
Start on Right of Value Chain
One up one down strategy
8
• Products– Vanilla type of products (Term loans, ODs, Asset finance).– Input Cost/Production cost type of finance.– Import and export Finance.– Inventory Finance.
• Initiatives/Collaboration– Discussions with stakeholders to increase finance.
• Guarantee funds.• Non-Governmental Organisations.
– Private Equity Funds.• Equity investments
Products and Initiatives
Thank you
Hans BalyamujuraTel +27 11 350 6160
Email hans.balyamujura@absa.co.za
Disclaimer: Although everything has been done to ensure the accuracy of the information, the Bank takes no responsibility for actions or losses that might occur due to the usage of this information.
top related