The Grain Handling and Milling facility offers about 465 small scale farmers in the Western and Rift Valley regions of Kenya with warehousing facility for their maize and wheat. This is a step towards achieving a sustainable availability of food and control hunger that ravages the country mostly due to unavailability of accessible grain storage facilities.
Our clients are small scale farmers who harvest their grains for immediate sale not knowing that these can be warehoused for the future market where better prices can be obtained. By paying a storage fee of only USD 0.07 per bag, the farmer is provided a warehouse receipt which can be used as collateral to obtain loans from participating financial institutions. The grain is stored for a period ranging between two to three months awaiting favorable market prices before a sale is executed on behalf of the farmers.
There are farmers that periodically will need immediate sale of their grain. The company will buy this grain at an average price of USD 35 per 90 Kg bag. Most of this grain will be converted to flour in the milling facility. The milling process will also produce waste products that will be sold as poultry feed.
Across the East Africa Region, the number of grain farmers has increased over the last three years. The Western and Rift Valley region has a high density of small scale grain farmers operating farm sizes ranging from one to slightly over one hundreds of acres. Our market research has shown that 7 out of 10 farmers in the Western and Rift Valley regions would prefer to have their grain stored to realize better future prices. The other 30% prefers direct sale of their grains for immediate access to cash for settling their running expenditures.
While there are currently five businesses offering grain milling services in the western and Rift Valley regions, only one of these offer warehousing facility to farmers.
EA Sparkle Enterprise’s marketing strategy is to emphasize the benefit of grain warehousing and the availability of our services. Small scale farmers accustomed to selling their grain at low prices, for instance, will have control over the pricing of their grain in the future market instead of spot sales to middle men or agents. Based on the size of our market and our defined market area, our sales projections for the first year are $5,075,000.
The management of EA Sparkle Enterprises consists of co-owners Jane Collins and Jerry Kaboka. Jane has over 25 years’ experience in sale and marketing of grain while Jerry is a seasoned entrepreneur involved mostly in grain handling and merchandise trade. Both partners will be taking hands-on management roles in the company. In addition, we have assembled a board of advisors to provide legal and risk management advisory services.
The Return on Investment
Based on the size of our market and our defined market area,we project to provide storage of upto 45000 bags per month of grain provided by the smal scale farmers. We are seeking operating line of $6,500,000 to finance our first year growth.
We plan to aggressively build our client base through local radio, newspaper, and direct mail advertising. The professional warehousing and grain milling services that EA Sparkle will provide is sure to appeal to small scale farmers throughout the Western and Rift Valey regions of Kenya and there is scope for expanding this into the whole of East Africa.