ADA OSAKWE

CEO, Agrolay Ventures

• Former Senior Investment Adviser to Dr. Akinwumi Adesina,

Nigeria’s former Federal Minister of Agriculture and Rural

Development.

• MBA (Kellogg School of Management)

• Kellogg Leadership Award

• MSc in Economics and Finance (Warwick)

• BSc in Economics (First Class Honours) (Hull)

• Forbes 20 Youngest Power Women in Africa (2014)

• Archbishop Desmond Tutu Leadership Fellow.

• Founding board member, SHAPE initiative and IMPACT.

• Nigerian citizen.

Nigeria’s Agribusiness Investment Opportunity

22nd August 2015

Ada OsakweCEO, Agrolay Ventures

SME OPPORTUNITIES IN NIGERIA’S AGRIBUSINESS VALUE CHAIN

A Covenant Capital Seminar

116116

NIGERIANo. 1 Tomato Producer In Sub-Saharan Africa

117117

118118

NIGERIANo. 1 Producer Of Citrus Fruits In Sub-Saharan Africa

No. 2 In The World

119119

NIGERIANo. 1 SoyabeanProducer In Sub-Saharan Africa

Note: 1Excludes Oranges, Lemons and Grapefruit Source: FAO Stat; Index Mundi

Nigeria Is An Agriculture Super Power?

Note: 1Excludes Oranges, Lemons and Grapefruit Source: FAO Stat; Index Mundi

Groundnuts

3,070

Citrus

fruits1

3,900

Rice

4,833

Fresh

Vegetables

6,200

Sorghum

6,900

Maize

9,410

Yams

30,000

Cassava

52,404000’s Tonnes, 2012

Nigeria’s Top Staples

1st 1st 13th 1st 4th 17th 2nd 3rd

Global

Ranking

121121

60% LOSSES

122122

Spends $500million Annually Importing Fruit Concentrate

123123

Over 50% Of Edible Oils Is Imported

YET

124124

125125

60% Of Arable Land Is Unutilized

126126

Less Than 1% Irrigation On 3 million Hectares Potential Irrigable Land

127127

80 Million Youths But 54% Of Them Unemployed

128128

Markets

GROWING CONSUMER MARKET

OPPORTUNITY OPPORTUNITY

OPPORTUNITY

Where Are The Specific Agribusiness Investment Opportunities ?

Tomatoes

250340

407507

880

180

1,500

Nigeria Cameroon South

Africa

Kenya Ghana Tanzania Benin

Nigerian Farmers Produce 65% of All The Tomatoes in West Africa

Processing Is Where Investors Capture The Greatest Value

Aggregation and

Logistics

Processing (both paste &

concentrate)1

Retail Production

Economics of the Tomato Value Chain in Nigeria

Note: 1 Concentrate can be an intermediate product of tomato paste with less water content; concentrate is generally produced for industrial use while paste is for

domestic use

Source: Industry Interviews

1%

Initial Aggregator Retailer Transport

55%

3%

Customer End-Use Processor

4%

37%

Farmer

% of End Price Captured through the Value Chain

Tomato Paste Local Demand Estimated at 200,000 Tonnes per AnnumNigerians Consume 2.4kg / Person per Year

Low Cost . Available All-Year Round

No Company In Nigeria Locally Produces Tomato Concentrate To Make Tomato Paste

Instead, Local Demand Is Met By Extensive Imports

2010

Rank

Country Imports

(Thousand Tonnes)

1 Germany 226

2 Italy 174

3 United Kingdom 154

4 Russia 147

5 France 109

6 Japan 105

7 Iraq 100

8 Nigeria 86

9 Poland 79

10 Libya 70

Nigeria Spends 16 Billion Naira AnnuallyImporting Tomato Paste

The Need For Import Substitution Creates A Domestic Investment Opportunity

� $1.3 Billion Market (> 200 Billion Naira)

Estimated to reach $2 Billion by 2020

� Ongoing Protection from imports

Tomato Paste on CBN Banned Forex List.

� Abundant Supply of Raw Supplies (i.e. Tomatoes)

$40 Million Investment By Dangote Group In A Tomato Paste Processing Factory in Kano

Investment By Agrolay Ventures in Ready-To-Eat Tomato -Based Stew

Securing Raw Materials Is A Challenge For Processors, Significantly Driving Down Profitability

Low Yields

5

49

57

84

22

Kenya China Italy

25

USA Nigeria

Tonnes per Hectare, 2011

Nigerian yields

range from 5-

25 Tonnes per

hectare

• Low Yields

• 45 – 60% Post-harvest losses

• Tomato Prices 5x higher in the South than in the North

• Seasonal fluctuations cause price volatility

These Problems Present Further Business Opportunities • Improved Transportation

Logistics

• Cold Storage Warehouses

• Market Aggregation Centres

Nigerians Fruit Juice Consumptionu

550

320

200

2012 2007 2002

CAGR +11%

Source: USDA Gain Report, “Nigeria’s Fruit Juice Concentrate Ma r k et,” 20 09; FIIRO,

“Industrial Profile on Fruit Juice Production,” 20 13; Business Day, “ Rising middle class

now 23% Population,” September 2011; IndexMundi; World Bank; African Development

Bank; Industry Interviews

Litres MN

Fruits

Fruit Concentrate Juice/Drinks

Fruits are crushed

and the extracted

juice is dehydrated to

concentrate form

Processors

reconstitute the

concentrate into

juice and fruit drink

Ripe fruits are

harvested and

transported to

processing facilities

Fruit Juice In Nigeria Is Mostly Produced From Concentrate

95% Of Concentrate Used To Produce Juices In Nigeria Is Imported

Fruit Concentrate Imports

115

48

20

CAGR +19%

2015E 2010 2005

Annual Imports, Kilograms MN

Oranges and Pineapples Are The Most Popular Concentrates Used By Nigerian Juice Manufacturers

Apple, 10%

Others, 5%

Mixed

Fruits, 20%

Orange,

40%

Pineapple,

25%

Demand For Fruit Juice By Flavour

% Share of ConsumptionChi Limited

Cway

Dansa

Don Simon

Dudu

Coca Cola

Frutta Juice

Fumman

Nature Fresh

SCOA Foods

Local Manufacturers Utilising Concentrate

Teragro Invested Over 1 Billion Naira In Fruit Concentrate Factory in Makurdi

Reel Fruits Produces Dried Fruit Snacks Using Pineapples and Mangoes

Agrolay Invested In The Nuli Juice Co., Which Uses Locally Grown Fruits & Vegetables To Make Fresh Juice

100% Juice Content Demand Is Growing

Juice Drinks

(up to 24%

juice), 13%

Fruit-Flavour

Drinks (No

Juice), 5%

100% Juice,

3%

Nectar (25 -

99% juice),

79%

Demand For Fruit Juice By Product Category

% Share of Consumption

• 100% juice

products was the

fastest growing

product category

in 2011, with

demand growth of

PREMIUM QUALITYBut There Are Limited 100% ALL-NATURAL, Juice Options Available

PREMIUM QUALITYNuli Juices Have Not Just Fruits, But Vegetables Too

PREMIUM QUALITYFruits & Vegetables Are Locally Sourced From Farms Across Nigeria

Many Challenges Face Agribusiness Investors In Nigeria% of the 75 Respondents Citing Challenges, by Categ ory 1

Competitive Environment

5%

Government Coordination

19%

Land

24%

Information &

Communication

28%

Governance

39%

Human Capital

45%

Policy & Regulatory

Environment

53%

Securing Supplies

55%

Financing

56%

Infrastructure

72%

Note: Data from 75 investors; 1Respondents have cited all challenges that are applicable to them

Infrastructure was consistently cited as the

greatest barrier to investment, regardless of

investor type, size, location, or stage of value

chain

152

Government Is Tackling Infrastructure Deficit With Staple Crop Processing Zones To Support Robust Systems for Food Security

Selected SCPZ sites and anchor crops

SorghumBunkure-Kadawa (Kano)

Biu (Borno)

HorticultureBunkure-Kadawa (Kano)

Makurdi (Benue)

Oban (Cross River)

FisheriesKetu-Ereyun (Lagos)

Okorolo (Rivers)

Ebedebiri (Bayelsa)

CassavaAlape (Kogi)

Ososa (Ogun)

RiceBadegi (Niger)

Bunkure-Kadawa (Kano)

Adani / Omor (Enugu, Anambra)

Gassol (Taraba)

Ambrusa / Binji (Kebbi, Sokoto)

LagosLagos

BayelsaBayelsa RiversRivers

ImoImo AbiaAbia

Akwa

Ibom

Akwa

Ibom

AdamawaAdamawa

BauchiBauchi

GombeGombe

KadunaKaduna

FctFctNassarawaNassarawa

PlateauPlateau

TarabaTaraba

BenueBenue

Cross

River

Cross

River

EnuguEnugu

EbonyiEbonyiAnambraAnambra

DeltaDelta

EdoEdo

KogiKogi

OyoOyo

OgunOgun

OsunOsun EkitiEkiti

OndoOndo

KwaraKwara

NigerNiger

SokotoSokoto

KebbiKebbiZamfaraZamfara

KatsinaKatsina

KanoKano

YobeYobeJigawaJigawa

BornoBorno

Lagos

Bayelsa Rivers

Imo Abia

Akwa

Ibom

Adamawa

Bauchi

Gombe

Kaduna

FctNassarawa

Plateau

Taraba

Benue

Cross

River

Enugu

EbonyiAnambra

Delta

Edo

Kogi

Oyo

Ogun

Osun Ekiti

Ondo

Kwara

Niger

Sokoto

KebbiZamfara

Katsina

Kano

YobeJigawa

Borno

153

SCPZ sites SCPZ sites with Masterplans

SCPZs Will Significantly Reduce Operating Costs For Farmers And Agribusiness Processors

Government Infrastructure Assets Leased To Private Sector To Develop Warehouse Receipt System And Facilitate An Active Commodities Exchanges

155

0.70%

5%

2010

2013

Commercial Banks’ Agriculture Lending Portfolio 0% Default

Nigerian Commercial Banks Have Increased Their Agricultural Lending Because of the Positive Agricu ltural Policy Reforms & Incentives

The Governments of Nigeria and Germany Launched an Innovative Agribusiness Private Investment Fund, Th e First of Its Kind in Africa

157

157

• Funding: Capitalized initially by the Public Sector ($28million ). Scaled to up to $100 million by private sector

• Management: Independent, private-sector fund manager (SAHEL CAPITAL)

• Target investees: Primarily SMEs

• Investment Size: $500,000 - $5 mn

• Instruments: Long-term, tailored financing , as well as quasi-equity, and other innovative financing instruments

• Technical Assistance Facility: 10% of the total Fund sizewww.fafinnigeria.com

Today, Young Nigerians Are Excited About The Agribu siness Opportunity And Becoming Agri-preneurs