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AFRICABIZ VOL 2 - ISSUE: 108
April 15 - May 14, 2008
Previous Issue
Editor: Dr. Bienvenu-Magloire Quenum
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A WORD FROM THE EDITOR


Dear visitor and international investor,


We warmly welcome you, if this is your first visit to Africabiz Online - The ultimate newsletter on trading and investing in 49 sub-Saharan African countries. If you are a regular and faithful reader, welcome back.

- FOOD RIOTS ACROSS THE CONTINENT HIGHLIGHT AFRICAN DEVELOPMENT SCHEMES' STRUCTURAL UNBALANCE

All over the continent, sky-rocketing food prices are fueling popular discontent and unprecedented strikes and demonstrations.This had already been exposed in March 15, 2008 delivery.

The crisis is picking up momentum worldwide in such a way that several South Asian countries - India and Pakistan in particular, decided to restrict the export of rice. The crisis being (apparently) a world crisis fueled by rising crude oil's purchasing price, one could consider it is normal it is also occurring in sub-Saharan African countries. Is that a good reasoning? To see if such analysis is correct, let us review the listing of commodities and food staples African governments are hurriedly subsidizing in the hope to quiet citizens's anger and extinguish social disturbance fire.

Indeed, in Western, Central, Eastern and Southern African regions, governments are waiving out taxes and levies to granting subsidies to wheat flour, canned tomato paste and canned peeled tomato, rice, milk powder and canned condensed milk, pasta and noodles, cooking oil and cooking gas cylinders, gas oil, cement, iron threads for reinforced concrete. Etc. However, one notices that not a single medicine is included in the listing. Why pharmaceuticals are not included? That is odd, as the prices of medicines are also skyrocketing and most people in African countries cannot afford buying pharmaceuticals anymore.

One notices also that products and commodities included in the listing are imported up to 100% - except for cement which production in some African countries covers 30% of the demand. In other words, not a single African country is self-sufficient in food production They are not self-sufficient in milk production, tomato, meat, rice, and wheat production. Except in South Africa, maize or corn, the basic food staple for millions of Africans is not produced in quantities and ground to flour to (partially) replace wheat flour import. The same for roots and tubers, which are not cultivated and processed in quantities to replace rice. For instance, Gari, the popular west African cassava floor [60, 61, 63, 64] is not produced in huge volumes to cater for a demanding population. Examples are endless.

These shortcomings in the developing landscape of African countries is the reason Africabiz Online states that developing schemes implemented in African countries are not adequate. These schemes do not promote the cultivation of local food crops and staples to provide abundant food stuffs to the population. These so called "development schemes" are structurally unbalanced.

Measures hurriedly taken by governments are buying time decisions that cannot be extended for to long as billions of local currencies are shed in the "void" to save the day. These billions are lost for the proper development of the countries.

Indeed, the only way to put an end to the crisis is to design and promote modern agriculture in Africa, to develop local crops and provide logistics and other support to the farmers. That is the way America and Europe proceeded. Thailand is another exemplary country that systematically develop its agriculture. Today, Thailand is almost the only Asian country shielded against the crisis. Its rice production amount to a staggering volume of 9,000,000MT.

It is time for African decision makers to follow suit Thailand and set the black continent free from the mantra of globalization; supporting the development of a strong agricultural sector that promotes local crops. (Read John Perkins's book: Confessions of An Economic Hitman to see how we are manipulated to work for our own demise! The video below exposed explained how economic hitmen operates)

In some quarters, the rising cost of energy is blamed for the crisis. Is that true? Indeed, oil price increased ten fold in eight years, from US$10 per barrel in 2000 to the actual level averaging US$100 since January 2008. However, can one agree right away with pundits that skyrocketing oil price is responsible for current worldwide food crisis?

We invite you to read more about the matter visiting following link: The Rising Price of Oil: Not A Valid Excuse To Explain Food Crisis in African Countries

- SERVICES AND PRODUCTS FROM Dr. QUENUM & ASSOCIATES / BUSINESSAFRICA (TM)

List of Products and Solutions to trading and investing in and out emerging nations - and particularly in sub-Saharan African nations - is here to review.

We draw your attention to Jobs & Projects' platform that assists first, project-owners to tender for the best experts to carry out projects at very competitive costs, and, second, job-seekers to publish for free Résumés/CV to attract project-owners attention.

The Free and Pay-Per- Click advertisement platform is also the cheapest way to advertise for your business and drive traffic to your website.

Click the image for moreDr. Quenum and Associates, IBC / BusinessAfrica (TM) have decided to follow Yahoo wise business practice - that is to establish business relationship only with clients who can produce email address linked to an ISP domain name or that could be traced back against a database of valid and legitimate domain names. In other words, from now on, only ISP-based email messages can expect replies from Dr. Quenum & Associates, IBC / BusinessAfrica (TM). For more on the matter, please visit this link.

- Contributor's Guidelines are here to review. Your contribution on "How emerging nations and particularly African countries / entrepreneurs could bridge the developing gap" is welcome.

Your feedback / objection / contribution is welcome. Visit WorldWide BizCenter, and choose General Information (as topic) to create a thread for discussion. On the top of the WorldWide BizCenter page, there is a HELP link to assist you making an efficient use of the discussion board. This link also is useful


Many thanks for dropping by and see you here on May 15, 2008

Dr. B.M. Quenum

Editor of AFRICABIZ

Contact Dr. Bienvenu-Magloire Quenum

BUSINESS OPPORTUNITIES IN AFRICA


- Several business opportunities - component parts of the Integrated Developing Scheme described in Africans, Stop Being Poor! are listed in following table.


1-SHEA BUTTER (5, 6, 7, 11, 12, 13)
2- BLUE GOLD (14, 15, 16, 17, 18, 19)
3- FREEZE-DRIED PAPAIN (20, 21, 22 and here)
4- KENAF (23, 24)
5- VEGETABLE OIL (25, 26, 27, 28)
6- CEREALS (30, 31, 32, 33)
7- FRUITS (34, 35, 36, 37, 38, 39, 40, 42, 43, 44, 45, 46)
8- ESSENTIAL OILS (47, 48, 49, 50, 51, 52)

9- ROOTS & TUBERS (54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64)
10- FOWL BREEDING (66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76)
11- FISH FARMING (78, 79, 80, 81, 82, 83, 84, 85, 86, 87)
12- BIOMASS ENERGY (89, 90, 91, 92)
13- SUGAR CANE & PRODUCTS (93, 94, 95, 96, 97, 98, 99/100, 101, 102)
14- LIVESTOCK (103, 104, 105, 106, 107, 108, 109,

- LIVESTOCK & GAME DEVELOPMENT: PART V - A MEDIUM-SCALE CATTLE FATTENING OPERATION - C - INVESTMENT & ECONOMICS

This delivery is a continuation of the previous ones [104, 105, 106, 107 ] that laid down the basics for animal feed formulation.

Broad fattening trade's principle reads as follows: “Buy the cattle low. Fatten them cheaply. Sell them high.” Thus three main questions: (1) Where to buy; (2) How to fatten, and (3) How to sell

At following link are listed livestock breeds of the African origin
Wilkipedia provides here a long list of breeds worldwide
The following linked-site provides comprehensive description of African breeds

Let us consider a medium scale operation to fattening cattle, which at full gear delivers 100 animals every month to the slaughterhouse. That is an operation that produces 1,200 fattened animals in 12 months-period, after 25 months-period of fattening - as shown on the graphic below, which area had been limited to 12 months-period to save space. (On the graphic, Q stands for Quarantine, S for Sold and the green area represents the fattening period).

Batch/Months 1 2 3 4 5 6 7 8 9 10 11 12
1 Q   S        
2   Q   S      
3     Q   S    
4       Q   S  
5         Q   S
6           Q  
7             Q  
8               Q  
9                 Q  
10                   Q  
11                     Q  
12                       Q

In other words, in order to put 1,200 fattened animals on the market in 12 month-period, one has to purchase 2,500 White Fulani cattle over a period of 25 months (for more visit previous delivery). Each single animal head in each purchased batch of 100 cattle weighting in average 75/ 80kg.

- INVESTMENT ESTIMATE, OPERATING COSTS, AND REVENUES

Explanations given in previous preliminaries indicate that 2,500 animals are fattened during a period of 25 months in order to put 1,200 fattened animal on the marketplace.

Data dating back to the 1980s (personal archive) and pertaining to the state-run fattening operation at Ferkessedougou/ Ivory Coast, show that the following daily feeding formula permits weight gains in the range of 450gr to 500gr per day. The resulting weight gain in tropical conditions would be approximately the same with alternative feeding formula here available. Idem for a feed formulation composed from information available at following links [1, 2]. Following link [3] managed by the University of Georgia (www.georgiadrought.org) provides a rough estimate of feeding costs.

It is difficult to get import/export stats on molasses as the product is blended with sugar and honey in statistic listing available on specialized websites such as the one exposed on this link. Based on personal archive we take the selling price US$20 per MT west African origin.

For cotton seeds, the selling price west African origin had sharply increased since the 1990s due to the heavy export to European countries. Prices moved from average US$70 per MT (1990) to up to US$252 per MT (March/April 2008) - origin Senegal - see an article written in French by Pape Demba SIDIBE in le Soleil dated April 12, 2008.

Let us consider the daily feeding formula here available, in which cotton-seeds oil-cake/oil meal is replaced by a daily intake of 0.250kg of ground cotton-seed. Taking in consideration speculative pricing trend above exposed for cotton-seeds, we opted for a price of US$200 per MT; and for molasses (US$20 per MT). The total feeding consumption and costs to fattening 1,200 cattle-heads for six-month period (from 75kg each to 150 kg) is reported on the following table:

Feeds Total consumption over 7 month-fattening period* Costs US$
Molasses [4.5kg*210days*1200heads] = 1,134MT*20$ 22,680
Ground Cotton-seeds [0.250kg*210days*1200heads] = 63MT*200$ 12,600
Forage/kenaf leaves [23, 24] [15kg*210days*1200heads] = 13MT*20$ 3,780
Salt+Hi-Mag Blocks [0.15kg*210days*1200heads] = 0.394MT*350$ 138
Clean Water [50liters*210days*1200heads] = 13Cubic Meter*75$ 9,800
Veterinarian medicines   2,500
Total feeding costs   51,418

Total consumption period above outlined includes also the quarantine period of approximately one month It is in line with feeding costs reported at the link available here. Based on previous preliminaries, Investment and Operating Costs read as follows.

Items
US$
INVESTMENT

1- Plots fencing

750

2- Equipment: A computer, one farm tractor, a hamper, one grinding machine, water pump. Etc.

45,000

4- Starting expenses: Purchase of initial 5 batches (see graphic above) of underfed 500 cattle heads at US$ 250 per head (each animal weighting 75kg) .

125,000

Total investment

170,750
PRODUCTION LEVEL
1,200 fattened cattle heads / weighting 150kg each and fattened from an initial weight of 75kg
OPERATING COSTS

Operational Expenses: Feeding cost as per previous table; staff and hands / management salaries. Etc.

70,000
PRODUCTION COST PER ANIMAL
US$60,000 divided by 1,200 fattened cattle heads / weighting 150kg each and fattened from a initial weight of 75kg 58.33
GENERATED REVENUES *
1,200 fattened cattle heads sold at US$350 - weighting 150kg each and fattened from an initial weight of 75kg 420,400
Gross Profit: US$420,000 (selling price) minus US$300,000 (purchasing price) 120,000

The opted selling price of US$350 per cattle head, puts the kilogram of good quality meat at the highly competitive price (for African marketplace) of US$2.33 per kg. Return On Investment is short in the range of four years. The business is a profit making venture if the operation is vertically integrated to include a slaughterhouse, meat transformation (smoking and salting for instance), skins preparation, blood collection for animal feed and bio-gas production.

Next issue 109 (to be delivered on May 15, 2008) will briefly expose renewable bio-gas energy produced by the operation to enhance its profit-making potential.

MORE ON LIVESTOCK & GAME DEVELOPMENT
1-Handbook of Livestock Management
by Richard A. Battaglia (Paperback - Jul 21, 2006)
2- Raising Small Livestock:
A Practical Handbook
by Jerome D. Belanger (Paperback - Feb 11, 2005)
3- The Homesteader's Handbook
to Raising Small Livestock Goats, Chickens, Sheep. Geese, Rabbitts, Hogs, Turkeys, Guinea Fowl, Ducks and Pigeons
by Jerome D. Belanger (Hardcover - April 1974)
4- Backyard Livestock:
Raising Good, Natural Food for Your Family, Third Edition by Steven Thomas and George P. Looby (Paperback - Jan 2, 2007)
5-
Keeping Livestock Healthy:
A Veterinary Guide to Horses, Cattle, Pigs, Goats & Sheep, 4th Edition
by N. Bruce Haynes (Paperback - Nov 1, 2001)
6- Alternative Health Practices for Livestock
by Michael Keilty and Thomas Morris (Hardcover - Jan 1, 2006)

7- A World Dictionary of Livestock Breed
Types, and Varieties
by V. Porter and I. L. Mason (Hardcover - Jun 6, 2002)
8- Livestock waste facilities handbook
(Paperback - 1985)
9- Raising Small Livestock:
A Practical Handbook
by Jerome D. Belanger (Paperback - Feb 11, 2005) 10- Livestock Feeds and Feeding (5th Edition)
(Hardcover - Jun 8, 2001)
by Richard O. Kellems and David C. Church
11- Raising Game Birds
by Lessiter Publications (Paperback - Jun 1986)
12- Livestock Production in Unfavourable Economic Environments:
Strategies for Attaining Sustained Competitive Advantage
by P. G. A Jennings (Hardcover - Mar 30, 2007)

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