Investment Opportunity in Cameroon (Fish Project)

U&I is acting as consultant to the National Industrial Fishing Farming LTD. The project is to bread 5,000 tons-10,000 tons of bar fish annually in the Limbe sea South West region Cameroon. The company is a newly establish and it is seeking for partners with whom they can take the venture. Below is the executive summary of the project for your review.

Introduction

The demand of high quality fish and shellfish products has increased over the last century, both as a result of shifts in consumer preference as well as a growing world population. Inherently in this is also an increased awareness of healthy food i.e. consumers focusing on a low calorie diet and polyunsaturated fatty acids. Global fish production from fisheries peaked with 90 million tones in the early 1990s (FAO1999). About two-third of this is used for human consumption with the remaining catch employed as fish meal or fish oils in various industrial application, inclusive of feed for the agriculture and aquaculture. Attempt have been made to predict the future capacity of the global food production system due to increasing pressure on natural resources and possible declines in stock due to increasing environmental stress (Doos and Shaw 1999).
The predicted increased regional and global demand for fish and fishery products will fall shorts of wild fishery, such demand may be met by aquaculture products but most aquaculture fisheries are fed by wild fish.

Many of the world’s poorest people depend on fish to help meet their basic needs. Fish are a key dietary staple for over 1 billion people, providing up to 70% of animal protein in some countries. Similarly millions of families rely on catching, processing and trading fish to provide their main source of cash income. These benefits need to be protected if hunger and poverty are to be reduced and the MDG targets met. As the world’s population grows and purchasing power increases so does the demand for fish. Consumption has doubled since 1973, with rising demand in developing countries accounting for the bulk of that growth. Meeting that demand is both a challenge and an opportunity. It is a challenge because most wild-fish stocks are already reaching the limits of their productive capacity, while many have leveled off or declined as a result of over fishing and other causes. In response we need not only to develop the capacities required to maintain wild fisheries in the face of these constraints and pressures, but also develop aquaculture which provides the only option for substantial increases in fish production. It is an opportunity because the strong demand for fish creates national and international markets that provide an increasing number of farmers, fishers, processors, traders, and service providers, with attractive investment options. This has already driven the rapid expansion of aquaculture in Asia, and the recent increases in aquaculture production and associated livelihoods in Egypt and sub-Saharan Africa have been similarly fed by growth in local markets. As demand continues to increase, these national markets will grow together with international opportunities. With 40% of fish catch being sold internationally fish has already become the most heavily traded commodity in international markets, with a net value of $18 billion a year, nearly 75% of which goes to developing countries in Asia. With adequate support, more small-scale fish producers in developing countries could benefit immensely from the globalization of trade in fish

Why Focus on Fisheries and Aquaculture?

The Millennium Development Goals (MDGs) set ambitious targets for improving human well- being by 2015. As the international community strengthens investment to meet these targets it is important that special attention is given to areas where there is greatest leverage for improving people’s lives. The World Fish Center and Cameroonian Government believes that fisheries and aquaculture can make such a contribution in many of the poorest countries and the present document summarizes where the Center’s research is helping to achieve this. A study in Malawi and Cameroon shows that average farm profits per unit area can be more than doubled by integrating aquaculture into traditional livestock and horticultural farming systems and these ‘fish farming’ families can earn 28% higher incomes. Fish consumption rises, strengthening the family’s food security and child malnutrition decreases. During times of drought, these farms are 18% more productive. This has huge implications, particularly in southern Africa where even mild droughts can lead to food shortages, and demonstrates how fish ponds underpin the resilience of the entire farming enterprise
Objectives

Main objective

To build sustainable increase in domestic fish production in 1 pilot countries in sub-Saharan Africa (Cameroon)

Specific objectives:

- To increase production of fish thereby improving food security of Cameroonians and subsistence farmers
- To increase household income of subsistence farmers
- To improve nutrition conditions for subsistence farmers household and Cameroonians at large.
- To reduce fish importation by improved local production capacity
- To improve farmers access to fingerlings.

Expected results

To mitigate the possible fish shortages and reduce the need for fish importation and the associate drain on foreign currency reserves in the sub-Sub-Saharan region. The initiative will enhance fish production in each target country by 10-20%.

National production and consumption trends

Fish is a preferred protein source for most Cameroonians because it is cheap compared with such other meats as bush meat, pork, chicken and beef. Prices for fish vary from 700-3000 FCFA per kilogram (kg) according to the quality and the place of purchase. Additionally fish is available in conveniently small units that can easily purchased by the poor with heaps of smoked fish selling for 100 FCFA or 0.2 dollars.

According to the 2007 Cameroon Economic and Financial Report national fish production was estimated at 140,000 tons, 100,000 tones come from marine fisheries and 40,000 tones from inland fisheries and demand stood at 260,000 tones. As a result 120,000 tones were imported which leads to about 120 billion spent by the government in the importation of fish. Sixty percent of national fish production is sold in smoked form mainly because of poor communication and access to fisher’s settlements as well as insufficient infrastructure for other form of processing (e.g. freezing, canning, salt-drying or fermenting). In addition, consumers prefer fish species such as madeuran sardinella (sardinella sp), Bonga Shad (Ethmalose sp) Bar fish etc.

Average fish consumption nationally is estimated at 17.9 kg per person per year. This figure varies according to location, rising to 30-35 kg in the large cities of Yaoundé and Douala and falling to 10 kg in villages far from fish production sites. As national fish production has not been able to meet fish demand, the government of Cameroon has in the past decades imported over 100,000 tones of fish per year. In 2004 135,000 tons of frozen fish were imported (Ngok et al 2005 Groupment Professionnel des Acconiers 2007). An estimate of 2.8 % growth rate in the fish consuming population and rapid urbanization (38% in 1987 rising to 55% in 2006) ensure that the potential for production and profitable aquaculture is high, especially as increased production from captures cannot be expected. So far, however, the large potential for aquaculture has not yet to be realized

Promoter of the project

The promoter of the project is Nation Industrial Fishing Farming LTD with the aims of providing quality fish to Cameroonians and to promote the cage culture of fishing and enhance the production of fingerlings for farmers.

Operation size

The project intends to produce 5,000 – 10,000 tones of bar fish during it first three years of operation. The fish will be graded in sizes accordingly during breeding to match – up consumer’s pattern, 0-3 months fish will weight 500g, 4-8 months 6-8kg and the suitable market size 500g two whole fish in a kg is good for Cameroon market.

Investment Objectives

The investment objective is to promote cage culture and producing large quantity of finger lings for the farmers and thus lead to wealth creation for the farmers and also to maximize the investment of partners. The fund asset allocation will concentrate in the feasibility study, purchase of equipment, setting up of plant, construction of processing units, office premise, health centre, vehicle and working capital.
The total cost of the project is 3 billion Franc with an internal rate of return of 100% during the first three years of operation with a start up cost of 100million and a projected revenue of 3.5 billion.

Business Opportunity in Cameroon (Rice Project)

U&I is happy to announce the rice project over 1,000 ha of land in the south west region of Cameroon as an opportunity for those who are seeking for venture with high growth and returns. The promoter of the above project is Camrice ltd in which U&I is a consultant to the project, Camrice is a newly establish company and it is seeking for partners with whom the can take the venture.

Below is the executive summary of the project for your review.

Introduction
Global and National Context
The high demand for food brought about by the sustained growth of Asian economies and skyrocketing and unstable petrol prices led to grain shortage and an increase in cereal prices on the world market. Indeed, global stocks have experienced their lowest level in a quarter of a century. This resulted in the crisis of high living costs which manifested in social upheavals in Cameroon during the first quarter of 2008. Despite the current petrol prices, many analysts are of the opinion that cereal prices will remain high for along time.
Faced with this situation, the meeting of the council of Ministers of the Africa Rice Center (WARDA) member states held in Abuja, Nigeria in September 2007 sounded the alarm by drawing the attention of the international community to the fact that Africa, in spite of being home to just 12% of the world population, draws in 32% of world rice import and has a high growth rate of consumption at 4.5% per annum. The council also stated that in Central Africa rice imports increase 14-fold between 1961 and 2007, rising from 32,100 to 470,974 tons while cereal production per inhabitant reduced from 157 to 84.9kg.
The Council recommended that an urgent special program be implemented; the program is called the Coalition for African Rice Development (CARD). The National Strategy for the Development of Rice Growing (NSDR) was also developed in response to this concern.

Objectives
Main objective
To build sustainable increase in domestic rice production in 1 pilot country in sub-Saharan Africa (Cameroon)
Specific objectives:

1. To introduce and improve on the production of the NERICAs thereby improving food security of subsistence farmers,
2. To increase household income of subsistence farmers,
3. To improve nutrition conditions of subsistence farm households,
4. To decrease rice importation by introducing nericas,
5. To empower women farmers,
6. To diversify agricultural production based on NERICA farming,
7. To develop agro-industry based on NERICA,
8. To establish sustainable NERICA based farming.

Expected results

To mitigate the possible rice shortages and to reduce the need for rice imports and the associate drain on foreign currency reserves in the sub-Saharan region.
The Initiative will enhance rice production in each target country by 5 to 10% by participating farmers as compared with 2006 production levels during the initial phase. Farmer training on improved integrated rice management practices, rural radio and videos will have a lasting effect on farmer productivity and the quality of the environment. This effect will be especially visible in lowland rice systems.

Target groups: Farmers, researchers, commercial multipliers, processors, producers
Beneficiaries: Farmers, Consumers etc.
Main activities: Production, Training in rice production (Rice Field School), Traning communty based seed producers.

National production and consumption trends, their importance in rural earnings, economic growth and food security
Rice is the staple food for rural and urban population in Cameroon. National demand was estimated at 300,000 tons in 2009, essentially covered by imports. According to the latest household consumption survey (ECAM 3, 2008), average rice consumption per head in Cameroon in 2007 was worth FCFA 11,180 that is 23 dollars in urban areas for towns more than 50,000 inhabitants, FCFA 5,817 that is 9 Euros in rural areas, the national average was FCFA 7,709 that is 16 dollars. Taking an average price of FCFA 300 per kilogram, this consumption would be around 37.3 kg in urban areas, 19.4 kg in rural in rural areas and 25.7 kg per inhabitant for the national average. According to the survey, around FCFA 138 billion that is (276 million dollars) devoted to the purchase of rice in the food budget for households against FCFA 112 billion in 2001 that is (224 million dollars), representing an increase of about 4% per year.
National production is estimated at 100,000 tons of paddy grown on 44,000 ha each year. Most of this production comes from irrigated schemes in the North West and the Far North regions which are far away from the centers of consumption in the South of the country (Yaoundé and Douala). About 145,000 farmers are involved in producing rice, which mainly is exported to neighboring countries (Nigeria, Chad and the Central African Republic).
The Far Northern region produces around two-thirds of the country’s rice. It is estimated that the number of people directly living off rice growing activities is 180,000, in 27,000 households and 3000 other actors. (Agricultural workers, business people, retailers, hulling machine operators, suppliers of inputs, sellers of packaging material etc)

Constraints of rice production in Cameroon

Despite the magnitude of the investment, production of rice in Cameroon only meets 20% of domestic demand. Several factors can help explain this situation
- High cost of production of irrigated rice that requires considerable investment for the development of production perimeters or basins.
- Location of three major production facilities far from the major urban centers (Yaoundé and Douala) and close to border market (Nigeria, Chad and Central African Republic)
- Preference by consumers in the southern regions for long grain which is imported for its superior quality (these varieties can as well thrive in Cameroon rice ecology)
- Lack of promotion of other types of rice production, especially in the southern parts of the country.
- Biotic and abiotic constrains (pests, diseases, weeds etc.)

Importance of Introducing New Rice for Africa (NERICA)

The time has come to scale -up operation to reach many more farmers in sub-Saharan Africa (SSA). However, more is required than just promoting the Nericas. Environmental problem in SSA are becoming acute. Already, depletion and degradation of the natural resources are widespread, cultivated soils are losing their natural fertility and subject to erosion due to over-exploitation, and tropical forests are being destroyed at an increasing rate. Complementary technologies (for example, to maintain soil fertility) and enabling policy and market environment are needed to make Nericas work. NERICAs are seen as a catalyzing element to (a) reduce risk and improve the productivity of rainfed production system and (b) conserve and ameliorate the environment by improving the sustainability of rainfed production system and reducing pressure on fragile environment in West and Central Africa (WCA).
Nericas is the fertile progenies from crosses between Asian rice, O.sativa and African rice, O.glaberrima which was carried out in the early 1990s at WARDA the rice center in Africa. About 3,000 NERICA lines have been produced so far. NERICA characteristic include easy harvesting and threshing, local consumer-acceptable cooking and eating qualities, and better resistance or tolerance to drought and soil acidity. Many of the NERICA lines have also shown resistance against major African endemic insect pests and disease, such as AFRGM (African Rice Gull Midge) and RYMV (Rice Yellow Motte Virus). A number of NERICA lines have rapid early vegetative growth, making them more weed competitive and improving the productivity of scarce labor. NERICA protein content is generally high. Moreover, NERICA generally have shorter growth duration than most traditional rice varieties.

ORGANIZATION

The promoter of the above project is Camrice LTD, it intends to cultivate NERICA species of rice over 1000 ha of land in the Southwest region of Cameroon and later move to other countries in the Central Africa. The objectives are to promote NERICA rice and supply of seeds to local farmers and provide quality rice to Cameroonians. In South west region Otto has already undertaken a rice project over 2 ha of land for the NERICAs and the results were goods and it intends to expand the project over 4 pilot countries while starting in Cameroon.

Investment Objectives

The investment objective is to promote the NERICAs species and producing large quantity of milled rice, rice seeds for the farmers and thus lead to wealth creation for the farmers and also to maximize the investment of partners. The fund asset allocation will concentrate in the feasibility study, purchase of equipment, setting up of plant, construction of processing units, office premise, health centre, vehicle and working capital. The total cost of the project is 2 billion franc cfa with a return of investment of 50%.

Cameroon Goverment Targets 60% Cocoa Increase

Cameroon will raise its annual cocoa output to as much as 300,000 tonnes within five years from current levels of around 190,000 tonnes. Micheal Ndoping the General Manager of the National Cocoa and Coffee Board (NCCB), said available farmland , low taxes and high farm gate prices were encouraging farmers to grow more cocoa but middlemen and poor roads were still cutting margins.

Global cocoa supplies have been finely balanced and futures traded in London and New York risen over the last year, supported by fears of a poor crop in nearby Ivory Coast, the world’s biggest producers.

In five years we will definitely make the 250,000 tonnes, if not more. We could easily hit 300,000 Ndoping told the press in Yaoundé. Benchmark cocoa futures for delivery in May sold at 1,897 pounds per tone in London on Wednesday, and while they have fallen from late January’s high of more than 2,000 pounds , are still up more than 7% from the start of the year.

Analyst say the outlook for Ivory Coast, which normally produces around 1.3 million tones but this year is forecast at 1 million tones, is particularly gloomy and could fall dramatically if steps are not taken to help farmers invest in their crops. We are small but we can fill some of the gap. We have good climate and hard working people. If Cameroonians know they can make money from cocoa, they will do it.

Investment Sought figures for the 2008/2009 season showed Cameroon produced 182,583 tonnes of cocoa between August and February, of which a local grinder bought 24,915 tonnes and the remaining 24,915 tonnes exported. Ndoping said farm-gate prices were roughly FCFA 900 I.e. is $ 1.85 per kg over the last few years, meaning Cameroonians farmers earned far more than their counterpart in other countries in the region. Ivorian farmers have been receiving roughly FCFA 500 per kg.

The cocoa and coffee Development Fund (FODECC) was helping farmers with pest and disease management and improve support services, he said. Following the liberalization of Cameroon’s cocoa sector government export taxes on beans were slashed though the Fund received levies of 15 francs per kg exported. The governments NCCB receives a further FCFA 8.5 while the private sector-led Cocoa and Coffee inter professional Board (CCIB) is paid 15 francs per kg.

Cameroon, once a major oil producer which is now seeking investment in it mining sector and hydroelectric sector, is also a minor coffee producer