LUBCON Nigeria Limited

Lagos, Nigeria

15th June, 2016

By

Sunil Dahiya

Chief Business Officer

African Cashew Alliance Secretariat

Accra, Ghana

African Cashew AllianceIntroduction, Cashew Socio-Economic Impact & Service Offer

• Established in 2006, with the support of the USAID

West Africa Trade Hub

• An association of African and international

businesses with an interest in promoting a globally

competitive African cashew industry

• Representing all aspects of the cashew value chain

including producers, processors, traders, and

international buyers

About ACA

2

Vision: A globally competitive African

cashew industry that benefits the value

chain – from farmer to consumer.

Mission: Support the African cashew industry by

•providing technical assistance and facilitating investments

•promoting market linkages and international standards

• creating a global platform for sharing information and best practices

Objectives:

Increase processing

Improve competitiveness

and sustainability

Facilitate public-private

cooperation

3

Vision & Mission Statements

Executive Committee & Advisory Board

4

Arie

Endendijk

Harry

Sinclair

Joseph

DeverPeter Munga Olusegun

Awolowo

VP (EA): ED

Maokola-

Majogo

SJC / Tanzania

Ashak Sheriff

CASA / Côte d’Ivoire

President:

Georgette

Tarraf

Nad & Co / Benin

VP (WA): Tola

Faseru

NCAN / Nigeria

Patrick

Wainaina

NutPak, Kenya

Lars Wallevik

MIM Cashews /

Ghana

Ronald Zaal

TDG /WA &

Holland

Alliance Key Activities

5

Advocacy & PartnershipLeveraging Resources & Enabling Biz

Environment

Conferences & Communication Investment Promotion & Information

Sharing

World Cashew Festival Learning & Networking

Platform

Learning & Investor ToursCashew Tours to Africa

& World-Wide

Technical AssistanceStrategic Advisory, Quality - Food

Safety & MIS

We BELIEVE in Partnership

66

• AGA (GC)

• AICAJU (MZ)

• AMEC (ML)

• ANCA (GB)

• APEX (BF)

• CAG (GMB)

• CBT (TZ)

• VINACAS (VIET)

Partnerships To Date:

• CCA (CDI)

• COFAC (SN)

• CoNEC (BN)

• FENAPAB (BN)

• MOFA (GH)

• NCAN (NG)

• NutPAK (KN)

• RONGEAD (BF)

• CEPCI (IND)

• GCC (Intl)

� USAID since 2006

� USDA via IRD since 2010

� GIZ via ACi since 2006

� UNIDO since 2012

� AfDB since 2015

� World Bank/IFC since 2016

Institutional Support:

Cashews History

7

Cashews are native to Brazil, like the Brazil nut.

Cashews were given their botanical name because

they are heart-shaped. It loves the tropics and in

tropical heat can grow to heights of forty or fifty

feet.

The cashew fruit has two distinct parts: the

fleshy pear-shaped stalk or stem known as

cashew-apple, heart-shaped nut, the true fruit,

about an inch in length that is attached to the

lower end of the apple. The nut, like other nuts,

contains the edible kernel. The “apple” is not only

edible but also delicious.

Cashew nuts, unlike the Brazil nut, have traveled

well away from Brazil with Portuguese travelers

and introduced to Asia and Africa to stop land

erosion. Today India is one of the major producers

of cashews and Africa is largest producing

continent.

Worth Consuming Cashew Nut!

8

Delicious recipes

Health benefits

Valuable nutrients

Cashew Nutrients & Health Benefits

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• Healthy heart, prevents gallstones and cholecystectomy in women

Cholesterol free

• Dental, bone, hair and skin careValuable source of minerals

• Controls diabetesLow glycemic index

• Weight ControlHigh energy density and dietary fibre

• Control premature agingAntioxidants

• Combat CancerProanthocyanidins

BENEFITS &

NUTRIENTSHEALTH EFFECTS

Cashew Nut and Fruit Products

10

11

‘Cashew Future’ is in AFRICA!

Source: ACA Annual Report, 2014

12

o This decade belongs to Africa!

o Vietnam consolidates its leadership!

o India shows the potential of ‘broken & pieces’!

o ‘Cashews are good for health’!

o Food safety requirements increase across the

world!

o Market grows when prices are stable!

o Sustainability is the weak link for cashew!

Source: Cashew Handbook, 2014 by FBS - India

Cashew Industry News

Global Cashew Production

World Cashew Nut Production

2.6m MT, 2015 Global supply has increased

significantly over the last decade:

Vietnam has actively targeted the

growth of its cashew industry and

has become market leader as a

result but now facing challenges for

further growth

India and Brazil have lost market

share, as production grew more

slowly. This is in part attributed to

competition for agricultural

production capacity

Growth in Africa has matched

Vietnam’s growth in RCN

production. Africa represents now

50% share of world annual cashew

production

13 African countries all together producing 50% of the world raw cashew nut

production. West African countries represents 82% while East Africa 18% of

total annual African Cashew Crop. Traditionally Africa been exporting RCN to

India and now days to Vietnam and Brazil as well. In last decade there has been

significant investments taken place in African Cashew Industry to explore the

cashew potential and for further value addition.

76,284

42,291

83,910

376,012

474,963

1,516,000West Africa 1,250,000

Cambodia

Indonesia

Brazil

Vietnam

India

Africa

13Source: ACA Annual Report, 2015

Cashew Processing in Africa

� Africa processes approximately 10% of all cashews

� Processing has more than tripled in 15 years

� Africa represents 264,000 MT installed capacity of Cashew

Processing @ 50% Utilized Capacity

� 1 MT of processed RCN = $254 in salaries and $363 additional

household income

14Source: ACA Annual Report, 2015

Source: Fitzpatrick, J. – The Cashew Kernels Market 2015 Perspectives & Outlook

• New consumer markets

developing rapidly (e.g.

China, Middle East)

• Existing processing

paradigm incapable of

meeting demand

• Africa increasingly

important as both a

producer and a processor

• Southern crop suppliers

will have a competitive

positioning, premium

price~20% as compared to

Northern Crop

Market State

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Consumption

Supply

Cashew Consumption/Supply (Million Tons)

As consumer demand increases, so too does the demand for quality. India is already a mature market

and Vietnam cashews are low in quality targeted to China. Consumer markets look to Africa for

volume and quality in processed cashew exports.

Cashew Consumption Vs Supply

Cashew Processing is IMPORTANT

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Typical impact of a medium size processing capacity

1,000 Mt Facility

60% supply directly from farmers and cooperatives, at prices 20% higher than the market

1,800farmers

New jobs in rural areas, 60+% of women

200 jobs

9,500dependants

Impact on the local economy Multiplier effect

�For $1,000 in cashew sales by farmers, 120 jobs are created�For $1.00 of farm income from the sale of cashews, an additional $1.43 of household income will be created in the local economy. �For $1,000 nut purchased an addition of $2099 goes to workers and firms to process it

1,000 MT processed generate : $1,095,200 direct income for farmers and workers, $1,566,000 additional household income with the Multiplier effect

Source: USAID Multiplier Effect Study, 2011

Why Invest in AFRICA!

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� Improved Political Stability

� Virgin land of opportunities & enormous potential, e.g. processing,

trading, technology-making, & consumption

� Agribusiness is one of the TOP PRIORITY investment area for

governments

� Presence of ONE STOP SOLUTION CENTRE for investors

� Supportive Investment (A2F) schemes and banks

� Energetic and young labor availability

� Effective transfer of capital or profits

� Protection against nationalization

� Duties and tax exemption incentives for export- ready companies

� Active market access; EAC, SADC, ECOWAS, UEMOA, AGOA, EU, and

China

Source: ACA Investment Promotion Guide, 2015

Where to Invest in Cashews?

18Source: ACA Investment Promotion Guide, 2015

Cashew Processing Investment Potential! Over 1m MT RAW MATERIAL

AVAILIABILITY

Potential Markets for Equipment Manufacturers! TARGETTED MARKET

WORTH OVER $200M

Cashew By-Product Processing Potential! ACCESS TO UNTAPPED MARKET

19Source: ACA 2015 Maputo Conference, Efficiency Forum 19

Non-Competitive Business Environment

Poor Infrastructure & ineffective incentive

schemes

Non-Functioning Local & Regional Trade Collaboration

RCN

Price Volatility

Investors Protection Lack

Shrunk Technical Assistance

African Cashew Industry Challenges

Government Recognition

• Major cashew processing industries form Vietnam, India, and Brazil are strongly

supported by local government via encouraging incentive schemes and local industry

protection policies

Crop Enhancement Programs

• The Indian Government invested in 10,000 hect. for new cashew farm land and protected

local industry with prompt policies, followed by Vietnam with innovative solutions to

improve the yield and quality

Domestic Consumption

• India became the biggest cashew kernel consumer by consuming half of their own

production

Competitiveness Facts

• On time/Single Digit interest A2F, higher efficiency and productivity labor skills, well

developed locally sourced equipment/technology, premium price markets, local markets

for cashew by-products from waste, renewable/cheap energy and processors incentive

package

Local Industry Protection

• Vietnam, India, and Brazil have banned their RCN exports and India has 0% import duty

on RCN and 30% on cashew kernel imports to grow and protect the local industry

Africa taking Global learnings

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Progressive African Cashew Industry

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� 60+ Operating Cashew processors across Africa

� 137,000 MT of RCN processed locally @ 356% growth rate

� Installed capacity of ACA members reached 260,000 MT @

50% capacity utilization rate

� ACA members invested US$ 70 million in New Investments

and Biz Expansions

� African processing adding household income by US$ 53

million

� ACA member firms exported value-added kernel worth of

US$ 99 million

� 250+ Containers exported to USA/European markets of

ACA’s Quality & Food Safety Seal Approved Cashews

Source: ACA Annual Report, 2014

ACA Service Offer

22

� ACA membership services and connecting LUBCON to ACA

members network

� Promote LUBCON Agro-business Industrial park via ACA

website and network to new Nigerian cashew investors

� Feasibility study development for LUBCON to set-up

‘Cashew Processing’ facility

� Business & Food Safety Advisory services to LUBCON

cashew venture and installed companies in their industrial

park

� Market link-aging to international markets

Do Join the Cashew Transformation

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�By becoming Alliance active member

�Commit to ACA Business Code of Conduct

(www.africancashewalliance.com/code)

�Having Africa based legally registered company

�Clear vision and mission for cashew business

� Scoring “PASS” on ACA’s engagement criteria and due

diligence and sign engagement to benefit from Advisory

and Assistance via Development grants

Time to learn and Celebrate!

24

Contact Us:

African Cashew Alliance Secretariat sdahiya@africancashewalliance.com

Jubilee House, 4th Street, Kuku Hill M +233 544 34 00 40

PMB 35A – Osu F +233 302 78 22 31

Accra, Ghana

Find Us Online:

www.africancashewalliance.com

@AfricanCashew

facebook.com/africancashewalliance

Thank You