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Welcome
to AFRICABIZ, 
Welcome
to Africabiz Online Synopsis
RSS Feed edition. Previous issue available at this
link
Dear faithful reader,
 -
AFRICABIZ editorial team is taking one month break from September 1 to September
30, 2002. Therefore this delivery stands for two issues: N° 40 / August 15
- September 14; and N° 41 / September 15 - October 14, 2002.
On
September 15, this same delivery will be posted again to the new comers to AFRICABIZ...
and thus to the whole mailing list of AFRICABIZ.
Our next new issue
N° 42 will be posted on October 15, 2002.
AFRICAN
COMMODITIES IN THE GLOBALIZATION JUNGLE
Since the 1985's, the beginning of Structural Adjustment
Program (SAP) enforcement by the IMF and the World Bank, the so-called "globalization"
of the economy took hold of the entire world and tightened its grip
around sub-Saharan African countries fragile economies.
Sub-Saharan
African countries are forced to compete, within the biased rules and regulations
of the Uruguay Round / World Trade
Organization (WTO), against the heavyweights countries of Americas, Europe,
and Asia. They are obliged, under SAP, to renounce to or alleviate any subvention
granted to their vital economic sectors (Utilities, and agricultural produces in particular),
while America and Europe continue to granting billion
of US$ financial subventions to farmers. (See Farm
Bill in the States and Common
Agricultural Policy - and CAP - in The European Union).
Furthermore,
the selling prices of mineral and agricultural commodities produced by African
countries (Iron, copper, manganese, coffee, cocoa, cotton, tea, and cashew nut. Etc.;)
are under pressure from the "legal" trading speculation undertaken by
international investors acting under the powerful umbrella of bourses located
at Paris, Chicago, London, Amsterdam, and Singapore.
It is not a surprise
therefore that the selling prices of African commodities are constantly submitted
to highs and lows on the marketplace. Dramatic high and low - more lows than highs
- fluctuations on which African decisions makers - private and governmental alike
- have absolutely no say. (Visit New York Board of Trade (NYBOT)
and click on Prices & Quotes tag to review prices' fluctuations of
sugar, coffee, cocoa, cotton; you may also visit WorldBank
website to download Pinksheets about Monthly commodities prices data in
summary format.)
These unpredictable prices's trends make it difficult
for the majority of industrial and trading African companies in the commodities's
sector to plan for efficient marketing campaigns and budget for sound forecasted
revenues.
Sometimes a minor nosedive of international selling prices
of tropical mineral and agricultural commodities triggers, in sub-Saharan African
countries, painful tightening of belt or final closing of shops.
QUALITY OF PRODUCTION, STRICT CONTROL OF THE COST OF PRODUCTION AND "INDEPENDENT"
MARKETING STRUCTURE
The biased rules and regulations setup by the Uruguay Round, which put on
the same competition pitch first division European, American and Asian countries
- (heavily pampered with financial subventions in the range of US$ billions, and additional economic
facilitations) against amateurs players from sub-Saharan African countries, are
now well known and fiercely
confronted by the anti-globalization movements.
Some diplomatic
efforts are also currently made by African states's decision makers, within the
legal frameworks of the World Trade Organization, to search for compensations.
Click
here for a Statement made on December 6, 2000 by Mike Moore the Director-General
of the World Trade Organization and here
for more on the state of negotiations - on April 8, 2002 - in the agriculture
sector.
However, time will pass by (in the range of several decades!)
before African countries gain
something substantial from the powers of the day.
In the
meantime, in addition to the lobbying efforts to obtaining compensations, African
countries will be better off, in the prevailing jungle of economic globalization,
if they get organized; adopt efficient
management practices to producing value added products at competitive prices.
Because, for would be international purchasers of commodities or any industrial
product, only matter quality, product availability, delivery on time at agreed
purchasing and competitive prices.
Documents and analysis produced
for the Conference on export development of cashew nut from Africa, organized
by the International Trade Center - ITC; Cotonou, Benin, July 22-26, 2002 (Click
here for more) revealed some of the many obstacles and hindrances encountered
by African producers of tropical commodities in the marketplace. (Documents
and papers related to the Conference are available here
at the international Trade Center's website. Click on the Events tag
once on the website or make search with: cashew nut, Cotonou, Benin,
July 22-26, 2002.)
THE USEFULNESS
OF BUSINESS-TO-BUSINESS E-COMMERCE FOR AFRICAN COMMODITIES
To help solving the marketing problems encountered by Africa's cashew nut producers,
ITC planned for the setup of a website portal dedicated to the promotion of African
cashew nut on the international marketplace. (Paper drafted for Cotonou's
Cashew Conference by Mrs. May El-Darwish - ITC's Associate Market Analyst
- titled: "Introduction to, and demonstration of, the networking program
developed for the project" - available here
at ITC website, gives more information about the portal.)
- The website will be a meeting point for African producers of cashew nut: Benin,
Burkina Faso, Cote d'Ivoire, Guinea Bissau, Senegal, Kenya, Madagascar, Mozambique,
Nigeria, Tanzania - (Click here
for countries briefs) and for international purchasers.
Transactions
directly undertaken from the website will be made in complete transparency. The
influence of speculators having less impact on the selling prices. High
and low fluctuations above mentioned will be less jumpy. African producers will
be in a better position to exercising more control on the selling price of their
product.
Other sub-Saharan African countries' producers of mineral
and agricultural products (Iron, copper, manganese, coffee, cocoa, cotton, tea.
Etc.) will be better equipped, at the international marketplace, first to protecting
their market share; and second to controlling the selling price of their product,
if they set up similar Business-to-Business e-commerce portals.
"CONTRIBUTOR'S
GUIDELINES" are
available here. You are invited
to contribute to AFRICABIZ ONLINE MONTHLY ISSUE - with articles related to
"How Africa Could Bridge The Developing Gap".
Many
thanks for subscribing to Africabiz. See you here on October 15, 2002.
Dr. B.M. Quenum
Click here for contact & support console
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Business
Opportunities
TROPICAL
FRUIT INDUSTRY AS INCOME BUILDING POWER FOR AN AFRICAN COMMUNITY / PART VII: SOME
INVESTMENT FIGURES ABOUT A MEDIUM SIZE TOMATO PASTE PROCESSING UNIT
In previous
issue demonstration was made
that if the technical management of a tomato plantation is well organized; particularly
if trickle irrigation is applied and pest control up to standards, the expected
yield per hectare could be in the range of 50 metric tons (conservative estimate)
per hectare. That gives the cost of production of one metric ton of fresh tomato
to be approximately: US$ 43.82 from which a selling price of US$ 52.58
(20 % profit margin) was adopted.
Let's consider investment related
to establishing a medium size processing plant for the transformation of 15,000
metric tons of fresh tomato into 2,143 metric tons of double concentrated tomato
paste at 28° I.R. One shift; 6 days / week (312 days / year); 48.077 metric
tons of fresh tomato per operating day:
| | Amount
(US$ x 1,000) | |
INVESTMENT
| |
Total
investment | 2,460 |
| PRODUCTION
LEVEL |
| Tomato
Concentrate at 28° = 2,143 metric tons
| | OPERATING
COSTS | |
Operational
Expenses: Raw material
purchasing (fresh tomato, salt and so on) - production costs - insurance - utilities
- staff and hands / management salaries - external management assistance - amortization
- interests on loan and so on.
| 1,419 |
| PRODUCTION
COST PER METRIC TON | | 2,143
metric tons of Double Tomato Concentrate Paste at 28° I.R. = | 662 |
| GENERATED
REVENUES* | |
2,143 metric tons of paste x 1,500 US $ per metric ton | 3,620 |
| GROSS
PROFIT | 2,201 |
GENERATED REVENUES*:
Figures listed in the pricing table here
available show that the cost of production of one metric ton of tomato paste (obtained
in optimized cultural and processing conditions in an African country) competes
well with purchasing prices of imported products and allows for hefty profit margin.
Generated revenues above reported were conservatively calculated
with a selling price (US$ 1,500) far below prevailing international prices.
The management will have enough cash flow to servicing debts and increasing processing
capacity if necessary.
- This
is a real niche opportunity for an international investor or African country to
improving its foreign exchange balance. It is also a perfect Economic
Catalyst
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