SA Best Peanut Butter Business Plan — Risk Analysis

Aflatoxin events, kernel price and supply, retailer listing risk and the cash absorbed through the ramp, with trigger points.

Risk Analysis

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11.1 The risks that matter
11.2 Risk register
11.3 Trigger points

11.1 The risks that matter

Aflatoxin exceedance and recall is the risk that defines the business. It is medium in likelihood and severe in impact: a one-month recall costs R15 881 116, which is 1.21 times a full year of Year 4 EBITDA and 1.6 times the entire annual control programme. It is mitigated by contracted supply with certificates of analysis per lot, pre-shipment testing at the supplier’s cost, statistically valid intake sampling, optical sorting, batch testing before release against a 4 parts per billion internal limit, and lot-level traceability that narrows a recall from a month of production to a handful of pallets.

Kernel price volatility is high in likelihood and severe in impact. Kernels are 45.4 per cent of revenue at maturity and the crop is drought-exposed, with domestic production averaging about 62 000 tonnes a year. Contribution reaches zero at R42 269 a tonne against a planned R27 900 — headroom of 51.5 per cent — which is genuine protection, but the sensitivity analysis still ranks kernel price second only to selling price. It is mitigated by contracted supply and by blending local seasonal purchases with year-round imports.

Retail listings not being secured is high in likelihood and severe in impact, because own-brand listings take longer to win than the plant takes to build and the entire margin improvement depends on growing own brand from 30 to 49 per cent of volume. It is mitigated by private label agreements covering at least half of Year 1 volume before construction, and by R3 600 000 of listing fees budgeted as a real cash cost rather than assumed away.

Working capital exceeding the facility is medium in likelihood and high in impact. Working capital reaches R25 069 516 against a R26 000 000 facility drawn to R25 689 744 at its peak — headroom of only R310 256 in Year 4. It is mitigated by holding kernel stock at 42 days rather than a full season, and by retaining all earnings through the projection.

11.2 Risk register

Risk	Likely	Impact	Mitigation and residual position
Aflatoxin exceedance and recall	Medium	Severe	A one-month recall costs R15881116 against a control programme of R8655900 a year. Mitigated by contracted supply with certificates of analysis, intake and batch testing, optical sorting and lot-level traceability that narrows a recall
Kernel price volatility	High	Severe	Kernels are 45.4% of revenue. Contribution reaches zero at R42269 a tonne against a planned R27 900 — headroom 51.5%. Mitigated by contracted supply and by blending local seasonal purchases with year-round imports
Retail listings not secured	High	Severe	Own-brand listings take longer than the plant takes to build. Mitigated by private label agreements covering at least half of Year 1 volume and by R3 600 000 of listing fees budgeted
Volume below plan	High	High	Break-even is 1161 t on one shift against a capacity of 1 215 t. Mitigated by private label filling the plant while own-brand listings are won
FSSC 22000 certification delayed	Medium	Severe	Without it the plant is limited to food service and industrial channels at materially lower prices. Mitigated by certification before the first commercial batch
Drought in the producing provinces	Medium	High	Local production averages about 62 000 t a year and is drought-exposed. Mitigated by import blending, at the cost of currency exposure
Tariff reviewed or reversed	Low	High	The 20% duty was granted on application and can be reviewed. It does not reach EU, UK, EFTA or SADC origins. The plan is structured to remain viable without it
Currency movement on imported kernels	High	Medium	The import portion is dollar-denominated. Mitigated by forward cover on contracted volumes
Working capital exceeds the facility	Medium	High	Working capital reaches R25069516 against a R26 000 000 facility. Mitigated by 42-day kernel stock rather than a full season, and by retaining earnings
Undeclared allergen incident	Low	Severe	Peanut is a declared major allergen; an undeclared allergen is as reportable as a mycotoxin exceedance. Mitigated by dedicated lines and R146 labelling control
Electricity cost and supply	High	Medium	Roasting and grinding are energy intensive at R1 180 a tonne. Standby generation is budgeted at R1 600 000
Second shift started before demand exists	Medium	Medium	Adds R2 700 000 of fixed cost. Mitigated by the Year 2 gate requiring contracted volume

11.3 Trigger points

Point	Trigger	Committed response
Commissioning	Aflatoxin results not consistently below 4 ppb on trial batches	Do not commence commercial production. The internal limit is the control, not the regulatory one
Before drawdown	Less than 70% of Year 1 kernel requirement contracted	Defer construction. A plant without qualified supply cannot control the risk that defines it
Before drawdown	Less than 50% of Year 1 volume committed to private label	Defer. Own-brand listings take longer than the plant takes to build
Month 6 of trading	Intake rejection above 6% of certified deliveries	Re-audit the supplier base. Rejection at that level signals a sourcing failure, not bad luck
End of Year 1	Volume below 986 t	Engage lenders before the second shift is committed, not after
Any batch	A release test above the internal limit	Hold, investigate and widen the sampling. Never release against a single passing re-test
Any time	Own-brand share below 35% by Year 3	The margin improvement in this plan depends on the mix shift; review listings and trade investment

The batch trigger is the one that must never be negotiated

A release test above the internal limit triggers a hold, an investigation and wider sampling — and explicitly forbids releasing against a single passing re-test. That instruction exists because of how aflatoxin behaves: contamination is heterogeneous within a lot, so a re-test drawn from a different part of the same batch can pass while the batch as a whole exceeds the legal limit. The February 2026 episode returned 46 parts per billion on a first test and 28 on a re-test — both above the limit, but a manufacturer looking for permission to ship would have seen the second number as improvement. Every other trigger in this table concerns money. This one concerns whether the business survives, and it is the reason the release decision reports to the board rather than to production.

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