Fig Tree Fruit Processing Plant (Industrial Development Corporation)

Company Description

The Industrial Development Corporation (IDC) Limited is a State-Owned Enterprise (SOE) charged with the mandate to spearhead the Zambian Government's commercial investments agenda aimed at strengthening Zambia's industrial base and job creation. The IDC was established to create and maximise long-term shareholder value as an active investor and shareholder of successful state-owned enterprises, as well as undertake industrialisation and rural development activities through the creation of new industries.

Countries of Operation

Zambia

Ownership of Company

Not indicated

Number of years since incorporated

10 Years

Project Pitch

Fig Tree Fruit Processing Project. The Fig Tree Fruit Processing Project is envisaged to be a fruit and vegetable processing plant that will adopt a hybrid technology allowing a single processing line to switch and process a variety of fruits all year round. The envisaged primary finished products from the hybrid processing plant will be tomato paste, tomato sauce, tomato chutney and tomato puree. It will also have capabilities to produce fruit juices, pulp, and jams. The Fig Tree Fruit Processing Project will operate under the company name Fig Tree Fruit Processing Limited, which is a subsidiary of Zambia Fruit Company that is wholly owned by Industrial Development Corporation (IDC). The project site is in Chisamba, Central Province of Zambia and covers a total area of 20 hectares. The Project is open for FDI through a minority or majority stake and will cost approximately ZMW 258.5 million (USD US$ 15.2 million). The key project costs include equipment procurement and installation, civil works, utility vehicles, development costs and working capital. The IDC has secured ZMW 17.7 millio (US$ 1.04 million) for earlystage development activities, consultation services and civil construction and is now seeking equity partners to close the financing gap of ZMW 240.8 million (US$ 14.16 million). FTFP is expected to generate positive operating cashflows during operations. The project is expected to achieve a sustainable 56 to 60% Gross Profit Margin, 31 to 37% EBITDA Margin and 0 to 22% Net Profit margin. FTFP has a project payback period of 8 years with an Internal Rate of Return (IRR) of 40.4%. The project is expected to generate post debt service free cashflows in excess of US$ 13.23 million over the first ten years of operation.

Team

The project will have a total of thirty-two (32) employee-positions with eight (8) grading classifications. The project will employ 70 employees in year one, 123 in year two and 153 in year three. The management structure will include senior management with vast experience from Zambia and foreign experts in the fruit processing sector. The foreign experts will train the local employees on the running and maintenance of the plant equipment. The recruitment process for middle management and junior staff will harness the local labour to a greater extent.

Stage

Preliminary | Initial studies completed | Feasibility study completed

Annual Revenue (in EUR)

Not indicated

Number of employees

Not indicated

Total Project Cost (in USD)

USD 15,200,000

Financing needs (in USD)

USD 14,160,000

Type of financing needed

Not indicated

Planned allocation of fundraising capital

Greenfield (new activity for the company)