Executive Summary

Jump to section

• Overview & contents
• i. Important Notice and Basis of Preparation
• 1. Executive Summary
• 2. The Opportunity
• 3. The Product Ladder
• 4. Operations and Certification
• 5. Market and Competitive Position
• 6. SWOT and Strategic Response
• 7. Financial Projections
• 8. Working Capital, Funding and the Balance Sheet
• 9. Sensitivity and Scenario Analysis
• 10. Risk Analysis
• 11. Regulatory and Compliance
• 12. Organisation
• 13. Implementation Roadmap
• 14. Key Performance Indicators
• 15. Investor Returns and Recommendation
• 16. Assumption Register
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Volume, Allocation and Price Schedules
• C. Appendix C: Funding, Working Capital and Balance Sheet Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

1.1 The proposition

Kenya Greenmaster Fresh Limited contracts smallholder growers in the Kenyan highlands and exports their produce to European retail and wholesale customers. The crop base is fine beans, sugar snap peas and tenderstem broccoli, grown year-round at altitude in Nyandarua and Kirinyaga, with a seasonal Hass avocado line shipped by sea between March and September.

The company does not farm. It contracts hectares, provides seed, inputs, agronomic supervision and a guaranteed offtake, collects daily at field cold rooms, and grades, packs and ships from a facility near the airport. Its commercial value lies entirely in what happens between the field and the aircraft.

1.2 The mechanic the plan rests on

European buyers of whole fine beans specify length, straightness, calibre and blemish tolerance. Field reality does not comply. Between a third and two-fifths of a well-managed crop fails cosmetic specification while being perfectly sound produce. Conventionally that fraction is sold on the domestic market at roughly a fifth of the export price, and the exporter treats it as an unavoidable loss.

A prepared line changes that. Beans that are too short, too curved or inconsistently calibred are topped, tailed and cut to length, combined into retail-ready packs, and sold into European supermarket programmes at a premium to whole product — €6.72 against €4.74 a kilogram. The raw material for that line is produce whose alternative use is a €0.28 local sale. Airfreight, the single largest cost in the chain, is identical per kilogram on both lines.

Across the plan this lifts the share of delivered field weight reaching Europe from 62 per cent to 81 per cent, and contribution per harvested kilogram from €0.379 to €0.852 — a 2.25-fold improvement on the same land, the same growers and the same freight.

1.3 What the model shows that a reader should not skip

▪ The returns are modest and the sector does not produce venture outcomes. On the mid case the business reaches US$37.60m of revenue and US$3.55m of EBITDA in FY2031, a 9.4 per cent margin. An equity investor putting in US$6.0m receives 1.4 times money over five years, an internal rate of return of 7 per cent. Even at an eight-times EBITDA exit the multiple is 1.8 times. This is what fresh produce export returns look like: thin gross margins, real capital intensity, and a working capital cycle that consumes the profit as fast as it is earned.

▪ Working capital, not profitability, is the binding constraint. The company reaches monthly EBITDA breakeven in month 15, but working capital absorbs everything it generates thereafter. Peak working capital reaches US$6.96m in FY2031 against a receivables facility that advances at most US$4.25m. European customers pay at 45 days; smallholders must be paid within 12 or they side-sell to competing buyers. Cash never exceeds US$2.63m at any point in five years.

▪ The revenue authority is an unfunded creditor of this business. Exports are zero-rated for value added tax, so input VAT on packaging, inputs, utilities and services is recoverable. Recovery in practice lags. At the modelled 210-day refund period the receivable reaches US$0.95m at peak — about 16 per cent of the equity raised, lent interest-free to the tax authority. Any assessment that ignores the refund cycle will understate the capital requirement.

▪ The business is a leveraged position on airfreight. Airfreight is €1.88 a kilogram, 40 per cent of the bulk price. A 30 per cent increase takes FY2031 EBITDA from US$3.55m to US$0.06m, and EBITDA reaches zero at a 30.6 per cent rate rise. Rates are set by capacity on the Nairobi corridor, by fuel, and by competing demand from the cut flower industry. A further demand-side risk sits alongside the cost one: several European retailers have publicly committed to moving away from airfreighted fresh produce, which no amount of rate negotiation answers.

▪ A single border interception can remove a year of profit. European plant health rules treat certain pests found in Kenyan podded vegetables as quarantine organisms. Repeated interception triggers increased inspection frequency and, in the worst case, emergency measures suspending a category. A one-quarter suspension of the vegetable lines in FY2029 would remove US$4.15m of revenue and take EBITDA from US$1.09m to US$0.23m.

1.4 Financial summary

1.5 The ask

The company seeks US$6.0m of equity for 45 per cent of the share capital, alongside a US$3.0m development bank term loan against the packhouse and cold chain, and a receivables-backed working capital facility scaling to US$4.2m. Only US$2.85m of the equity funds fixed assets and the build; the balance funds early trading losses and the working capital gap that the receivables facility cannot reach.