Romania2013

WAGYU BREEDING AND FATTENING

FARM

The business and the product

The Market and competition

Strategy

Business drivers

Management

Financials

Funding requirement

Anexa 1 – Wagyu grading

Anexa 2 – Biogas Graph

OVERVIEW

The newly formed company is to produce for luxury markets the world class Wagyu Cattles of A5 grade (annex 1)

Two farms – 1 housing the breeding population and 1 housing the feeding lot – to be build with a total capacity of 6000 heads

Biogas Plant – 1.6 MW installation producing 12.000 MW/year

BUSINESS PROPOSITION

Wagyu Black full blood cattle with the highest obtainable marbling due to its own genetics and thru intensive feeding over a period of 550-600 days

Green energy– 12.000 MW/year

THE PRODUCT

The high cost of purchase of genetic material and the feeding makes the wagyu producing prohibited for most of the farmers

The demand is high and in a continuous growth, as reflected in it’s high prices (10,000-20,000 USD/carcass)

THE MARKET

The product is designated for markets where the luxury hospitality services are at a high or developing

Saudi Arabia, Dubai, Qatar, Thailand, Taiwan, Hong Kong, China, Indonesia

MARKETS

26.8 22.4 20.6

37.3 36.1 33.4

15.79.5 7.1

15.8

26.8

33.1

4.4 5.1 5.8

USA

Europe

Japan

Asia Pacific excluding Japan

Middle East and Others

Share of Global Sales %

2006

2011

2015

Share of global expenditure on luxury branded products

Europe – at this point are a small number of farms that are having wagyu cattle mainly for breeding purposes. Approximate number of heads in each farm not exceeding 500-600

USA – while has a much more number of wagyu farmers, most of them are producing a mix breed of wagyu – A1

Australia – AA CO - the major producer world wide of wagyu catles having a number of 60.000 heads

COMPETITION

Obtain a population for breeding of 3000 heads through the purchase of wagyu full blood embryos

Obtain a population for fattening of 3000 heads through intensive breeding program over fi rst 4 years

The farm is designed to be broadly self-suffi cient in that we are aiming to produce about 95% of our animals’ feed from within the farm, using their manure as a biomass and as fertilizer.

The building of Biogas plant that is to produce 12.000 MW/year of green energy from the cattle manure.

STRATEGY

Wagyu cattle are highly adaptable to the European climate

Black Sea International Harbor which facilitates transport of livestock to Middle East market

Low cost of agriculture land in Romania

Low cost of labor in Romania

Low tax/profit in Romania (16%)

BUSSINESS DRIVERS

Florentina Agiakatsikas –age 35 - with an overall 15 years of work experience, out of which over 9 years in entrepreneurship, has proven to be trustworthy in setting up and approaching complex projects in a simple and straightforward manner. Her communication skills as well as contagious optimism and "can do" attitude makes work with her inspiring, leading to the fulfi llment of the expected financial returns. She is a very detailed-oriented person and has high standards in terms of quality.  She is a results - oriented manager who decides strategy, identifies needs and changes, sets objectives, controls target fulfi llment,  manages the resources and motivates the team

MANAGEMENT

Cristian Dinu – age 36 - working for 15 years in various fields, from building to electric equipment, Cristian had acquired vast knowledge and experience. He is a combination of strong personality with a hard working character. If I have to define him in 3 words: Nothing is impossible. Although strong personality his team player qualities

do not suffer.

The project aims to arrive at full production capacity of exporting (approx. 850 heads) in the 4 th year

FINANCIALS

Starting with 2014 Biogas plant brings a revenue of 2.196.000 € from the sales of green certificates and energy. Revenue is used to continue investment in livestock and genetic material

Starting with 2015 the initial cattle (6000 heads) used for wagyu embryos implanting will be sold recovering 90% from their purchase value

Starting with the year 2017 the fi rst wagyu cattle are ready for export at an approximate price of 10,000 €/each

OVERVIEW OF FINANCIAL INCOME

WAGYU FARM - 6000 HEADS

Total investment     €19,229,727 Salaries and operational costs €2,407,074 INCOME/year - starting with 2020      Export wagyu catle 900 heads 10000€/each €9,000,000 Wagyu cows 300 heads 7000€/each €2,100,000 Green certificates 36000 G.C 46€/each €1,656,000 Energy sold in the network 12000 MW 45€/each €540,000 Government subventions €1,056,000 Total income €14,352,000 Profit before tax     €11,944,926 Profit after TAX     €10,033,738

BUSINESS PROJECTION

CASHFLOW

2013 2014 2015 2016 2017 2018 2019 2020

Cash Inflows

Sales €1,946,000 €5,300,000 €5,652,000 €10,256,000 €13,852,000 €13,852,000 €14,352,000Investment €9,910,665 €4,234,732 €1,474,383 €1,162,383 €2,447,563 - - -Total Cash Inflows €9,910,665 €6,180,732 €6,774,383 €6,814,383 €12,703,563 €13,852,000 €13,852,000 €14,352,000

Cash outflows

Purchases €9,400,000 €4,320,000 €4,320,000 €4,320,000 - - -Operational Expenses €685,665 €1,758,273 €2,315,474 €2,355,474 €2,520,007 €2,407,074 €2,407,074 €2,407,074Taxes €34,065 €102,459 €138,909 €138,909 €154,389 €154,389 €154,389 €154,389Income Tax - - - - €1,836,417 €1,806,486 €1,806,486 €1,911,188Return of 2017 liquidity €2,447,563 - - -Return of Investment (ROI) - - - - €4,800,000 €9,450,000 €4,803,396 -Withdraws/Profit - - - - - - €4,650,000 €9,800,000Total Cash Outflows €10,119,730 €6,180,732 €6,774,383 €6,814,383 €11,758,376 €13,817,949 €13,821,345 €14,272,652

Cash Surplus/Deficit - - - - €945,187 €34,051 €30,655 €79,348Opening Cash Balance €9,910,665 €6,180,732 €6,774,383 €6,814,383 €1,505,438 €2,450,624 €2,484,675 €2,515,330Closing Cash Balance - - - - €2,450,624 €2,484,675 €2,515,330 €2,594,678

Over a period of 4 ½ years the business needs a total injection of capital of 19.229.727 €

ROI (Return of Investment) starts at the end of 5 th year (2017) and ends in the 7 th year (2019)

FUNDING REQUIREMENT AND ROI

Building and machinery Farm purchasing and extend the capacity to 6000 heads Biogas plant – production of 12000 MW/year

Livestock and genetic material purchase 6000 heifers to be implanted with wagyu embryos 9600 Full blood wagyu embryos

Operational costs Crops development Utilities Salaries Taxes

USE OF FUNDS

34.93%

48.17%

16.90%

In 2019-2020 a second farm can be build, doubling the capacity (12.000 heads) and the production for export.

An increase in profit of 100% is to be expected by the 2023-2024

BUSINESS EXTENSION

ANNEX 1 – WAGYU GRADING

ANNEX - BIOGAS

PROJECT PROPOSED FOR 2013

Entrepreneur Florentina Agiakatsikas

E’mail: fl orentina_aya@yahoo.com+30 6947407619

Thank you