Samak | Capacity building in Ghana

The problem

The context for this project was stark with Ghana importing around 80% of its rice needs. Meanwhile, domestic rice production satisfied only 20% of local consumer demand, with the deficit made up by imports from South East Asia.

To compound the issue, scarce foreign reserves and access to credit impeded prospects for Ghana to seize its undoubted potential as a national and international rice production centre.

In a bid to transform the scenario, Farrelly Mitchell were retained to develop a forward-integrated expansion plan for an established largescale commercial rice farming business in Ghana, creating a high-value rice milling and consumer foods business.

The new rice mill was supplied by Samak, an established local farmer co-operative and agribusiness. It involved being sited and constructed on two large-scale land plots totalling 55,000 acres, located in the Northern and Volta Regions of the country, strategically located at the heart of Ghana’s rice production belt.

The solution

Farrelly Mitchell applied strategic planning for raw material supply for the new mill to be sourced from the farms current and highly scalable operations as well as a strategic partnership with a 4,500 strong member local rice farmer co-operative.

Deploying our local and international deep financial, strategic and operational knowledge and consultancy expertise, we helped the Client with sourcing investment capital by way of equity investors on the most favourable terms for the Project. This included developing the necessary marketing collateral to promote and market the investment opportunity, such as investment teaser and full growth and development plan. It also entailed rigorous business plan development and implementation.

The results

The new purpose-built mill and associated agribusiness have helped to facilitate import substitution by supplying the significantly underserved domestic market, as well as regional export markets in West Africa, with high-quality consumer-ready rice.

The new mill is supplied by Shinkaafa Buni Rice Farmers Association, an established farmer co-operative and Samak Agribusiness, both of which are currently producing rice paddy.

The project has been instrumental in facilitating the development and enhancement of agronomic and extension services to the co-op’s smallholder farmer members, in turn improving livelihoods and the yield and output of paddy rice for the new mill.

The milling capacity is highly scalable and set to expand with local supply, market growth and capital investment momentum.

The mill’s siting and quality management services allow for other advantages. It is well-positioned to serve neighbouring markets such as Nigeria, Togo, Burkina Faso and its location is also beneficial in saving Samak on the transport cost of (33%) of paddy supply to the mill.

The facility also benefits from the Ghanaian government’s efforts to protect and promote rice production through mandating nationalised institutions (schools, hospitals etc.) to consume domestically produced rice as policy.

Finally, there is an attractive macro-economic rationale for the mill’s future success with reference to demographic trends, growing affluence and urbanisation, Ghana’s rice market estimated to be growing at 15% annually.

Client endorsement

We retained Farrelly Mitchell to develop a forward integrated high-value expansion plan for our farming operation in Ghana.

This involved two large-scale land plots totalling 55,000 acres, located in the Northern and Volta regions of the country.

– Akshay Sharma, Commercial Director, Samak