CONTACT: BONKE BASHE CELL +27 61 507 4004 OR+27 78 7932 731

E-MAIL: [email protected]

ADDRESS: 2 FRANJIPANI, MARINE DRIVE, MARGATE, 4275

As we were conducting our own feasibility study, we discovered that there are very few (if not an

insignificant number of) black hydroponic greenhouse farmers in South Africa. Interested parties and new

entrants into this market need among other things, exposure, access to relevant markets thorough training

and mentorship programs, access to funding, a voice, and someone that will assist them in penetrating the

industry and negotiate on their behalf prices, buy and sell their products and represent them in the export

markets as well. These are some, among others, reasons that led us to come-up with a solution of establishing

LUSABO ASSOCIATION OF GREENHOUSE FARMERS (LAGF), an extra wing of LUSABO GROUP

operating under the principles of LUSABO GROUP.

We do not intend to mandate our members where they buy and to who they sell. LAGF will create a network

of buying and selling where our members can decide who and where they want to sell to.

The Association will, among other things:

▪ Negotiate with Fruit and Vegetable purchasers, and all of our Products buyers on behalf of the members
of the association;

▪ Assist the member companies to penetrate the export market and meet compliance requirements;
▪ Align production supplies of our members to the demands of the export market;
▪ Members collective buying to achieve maximum discounts;
▪ Conduct Research and Development Programs;
▪ Research on Best Farming Practice Methods;
▪ Research and keeping up with new innovative equipment or structures;
▪ Ultimately become a supplier of greenhouse farming structures and elements to members of the
association.

LAGF team and Lusabo Group management will be travelling internationally to research hydroponic farming

methods and bring best practice concepts to South Africa in the form of product innovation, methods, skills

and the likes. LAGF will have Research and Development (R&D) division that will conduct all research

related to this project and all agri business related solutions. The Association will also be responsible for

negotiating bilateral agreements with other countries in communication with the South African Department

of Agriculture, Fisheries and Forestry and Proudly SA.

Members will join LAGF with an initial joining fee which, included in the fee is, buying the business concept

of LUSABO GROUP, comprehensive Project Management for the set-up of the farm of the member, access to

the network or database of LAGF suppliers, business set-up and establishment, agronomist support,

recruitment, training and development and ongoing support. This joining fee is obviously a fixed percentage
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relevant to the loan-funding amount of the business of the member, payable and included in the monthly

repayments of the loan for the duration of the loan amount. Once the members start selling through the

channels the association has set-up as part of its network, the members of the association will start paying 2%

of their turnover commission over to LAGF per annum. This only means that LAGF will only be making

money when their members are making money, which drives LAGF’s management to ensure maximum

value for their members and a win-win relationship for members, LAGF, buyers and ultimately the consumer.

Once LAGF reaches 100 members with an average rebate of R2 million per member we will receive over R200

million in member rebates per annum. This is outside of rebates from suppliers, and product supply. We are

of the opinion that our operating costs should not exceed 50% of revenues thus producing a great bottom line

of 50% nett profit. Our members’ rebates charged is a reasonable fee of 2% of turnover for the value they

receive from the organization will not be achieved on an individual basis.

▪ COMMUNITY DEVELOPMENT

5.1.1.1 EMERGING FARMERS AND COOPERATIVES

Lusabo Group has reckoned it necessary to establish inclusive, equitable and sustainable business model of

working with disadvantaged emerging farmers and cooperatives with the intention of among other things,

reviving farming, awareness of farming through technology, access to markets, transfer of knowledge and

skills, etc. We believe that our business model is commercially viable showing that “win-win” outcomes are

possible ways of creating value within a market network of local producers, suppliers and consumers that

involve small farmers and cooperatives. This business model will empower the community, develop young

agricultural entrepreneurs and improve the economy of the locals, opening more doors for employment and

thus reducing poverty in the community.

▪ WHY EMERGING FARMERS AND COOPERATIVES?

We have realized that most of these groups have passion for farming but lack skills, poor access to

information, lack knowledge farming technology, lack access to funding, lack of traceability of their produce,

management of risk, etc. Lusabo Group will assist these locals through the experience, knowledge and skill

that the company through training and mentorship programs that are designed for their line of farming.

▪ BENEFITS TO EMERGING FARMERS AND COOPERATIVES

Co-operatives are established to provide members with economic benefits in terms of access to dynamic

markets. These differ from social organizations in their entrepreneurial focus, and may build on existing

informal networks of farmers and traders as well as inputs and support from buyers or other chain actors.

Models that are driven and owned by small-scale producers/cooperatives allow producers to market
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collectively despite widely differing farm assets. Lusabo Group model of working with cooperatives has the

following advantages:

➢ To improve emerging farmers and cooperatives’ technical and managerial skills,

➢ To ensure consistent volume and quality of supply to buyers,

➢ To develop stable trading relationships,

➢ To improve negotiating skills resulting in enhanced access to service provision,

➢ To provide non-financial support such as mentoring programmes, skills development programs,

➢ To provide a wide range of business management support services to cooperatives & emerging farmers, such as:

▪ Developing business plans

▪ Market research

▪ Marketing

▪ Business development

➢ To identify women entrepreneurs and affiliate them to one umbrella body that will represent and articulate the

aspirations of all women entrepreneurs, especially rural women,

➢ To create locally based economic opportunities for young people through cooperatives.

5.1.1.2 YOUTH DEVELOPMENT

LUSABO GROUP business model also aims to develop local solutions to unemployment by investigating

options for youth development in the form of co-operatives working in conjunction with local municipalities

and donors. Our business model accommodates offering information and counselling support regarding

career development, employment and entrepreneurship mainly in agricultural stream. This model will also

focus on unemployed youth who have no tertiary education, enabling them to acquire the skills, competencies

and experience they require to achieve economic independences through agricultural projects

5.1.1.3 COMMUNITY INVOLVEMENT STRATEGY

Lusabo Group has a strategy that will address community mobilization, sustained mobilization,

empowerment and participation in ensuring community buy-in to this agribusiness project. Active

Community Participation is critical for success and accepted implementation of this project since these factors

facilitate the development plans. We at Lusabo Group believe that lack of participation by the community in

decision-making to implement any agricultural policies can lead to failure in implementation of any

agribusiness project.

Participation by the community means empowering community and giving them responsibility so that they

feel they own the project. Lusabo will ensure that traditional leaders as well as the members of the community
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have the chance, directly or through representation, to participate in the design, implementation and

monitoring of this agribusiness project. In the context of community mobilization, Lusabo will encourage and

ensure accountability among community members that will amount to transparency which helps to ensure

that decisions that affect the community are made in a socially responsible way, which particular groups,

such as ethnic minorities or persons with disabilities, are not excluded from the benefits of projects or

activities. Lusabo will take it upon themselves to ensure that governance is accountable, transparent, just,

responsive and participatory

Lusabo Group’s strategy of encouraging Active Community Participation involves the following:

▪ Empowerment,

▪ Partnerships,

▪ Interaction,

▪ Active consultation,

▪ Informing, and

▪ Feedback on services

Participation by community in this project means empowering community and giving them responsibility so

that they feel that they own the project, which will help in ensuring that the project is compatible with the

local environment and does not have conflicts with the target group.

5.1.1.4 PRINCIPLES BEHIND COMMUNITY MOBILIZATION

a) Participation

Lusabo Group will ensure that the members of the community have the chance, directly or through

representation, to participate in the design, implementation and monitoring of Lusabo agribusiness. This will

ensure a higher likelihood of the project accurately reflecting real needs and interests of the community. This

approach takes into consideration the different experiences, needs and capabilities of various groups in a

community – women and men, youth and the elderly, persons with disabilities and the able-bodied,

ethnic/religious/language minorities and majorities.

b) Accountability

In the context of community mobilization, Lusabo Group will encourage and ensure that community leaders

and members are being accountable to each other. This is due to the fact that any individuals elected to help

lead projects are accountable to the wider community, their neighbors who are counting on them to

implement projects in the best interest of everyone. This approach amounts to transparency which helps

ensure that decisions that affect the community are made in a socially responsible way that particular groups,

such as ethnic minorities or persons with disabilities, are not excluded from the benefits of projects or
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activities.

c) Good Governance

Lusabo Group intends to work closely with local leaders acknowledged by the community for the role they

play in decision-making. Mobilization activities in this context will build the foundation for good governance

as official structures in the area of the project are developed. Lusabo Group will take it upon themselves to

ensure that governance is accountable, transparent, just, responsive and participatory.

LUSABO COMMUNITY STRATEGY LUSABO LONG-TERM BENEFITS

1) Increases participatory decision-making a) Communities reduce their dependence on outside

processes by bringing diverse stakeholders aid, as they become adept at identifying and

into agribusiness processes. solving their own problems.

2) Expands inclusion of often-marginalized b) Communities can better prepare for or respond to

populations, such as women, youth, persons disasters and crises because they have

with disabilities, the elderly, and religious or relationships with decision-makers and experience

ethnic minorities. in quickly identifying communal needs and

3) Emphasize utilization of local resources, both priorities.

human and material. c) Local government gain greater credibility with

4) Fosters stronger relationships between their own constituencies and can better lobby

traditional leaders, local government, national level decision-makers because they are

businesses, community members and NGOs truly aware of local needs and have local support.

5) Ensures local ownership of Lusabo Group d) A more stable foundation for breaking cycles of

agribusiness project by the community. inter-group tension and achieving lasting stability.

6) Promote a more active participation,

interaction, and empowerment of local

community.

5.1.1.5 COMMUNITY MOBILIZATION

▪ Maintain a sense of humor and patience,

▪ Open mind and heart open doors and possibilities for receiving warm welcome by the community, a mutually

beneficial relationship has a potential to develop,

▪ Building upon the positive aspects of the local culture, religion, knowledge, and tradition; brick by brick, working

with people to build up their lives with dignity and honor,

▪ Initiate but do not lead, Lusabo Group is a catalyst of inspiring development activities, not the authority,

▪ Identification of the people’s needs, or rather facilitate them to identify their needs, keeping in mind that awareness-
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 raising is the first step towards mobilization,

▪ Sitting together with the community, sharing ideas and experiences – this is a two-way process,

▪ Avoidance of talking in terms of money, rather talking in terms of working together as the value of a project,

▪ Talking simply, not using complex language for Lusabo Group task is to communicate effectively,

▪ Involvement of the community from the very beginning of the project,

▪ Organizing people to draw up their own plans for their development; simple activities that will easily be understood

and realistically carried out.

5.1.1.6 AGRI BUSINESS PROPOSAL

In order for the community to grow economically, it is imperative that our agribusiness project has its own

Local Economic Development opportunities; it needs to diversify its economic base and strengthen its existing

profitable sectors that have a high Gross Geographic Product, such as trade and agriculture. This agribusiness

will add value to farm produce and will create much needed job opportunities, generating income for the

local residents and put such an area of the project at international spotlight.

5.1.1.7 ADVANTAGES OF THE PROJECT

The project will bring the following opportunities and promote the following areas of national

transformation:

▪ Address the problem of urbanization and encourage people to stay in rural areas as well as in their small towns,

▪ Demonstrate the truth that stability and prosperity actually do proceed from sustainable natural resources

management,

▪ The design and management of the upgrading of appropriate infrastructure,

▪ Job creation by ensuring long term success of venture and as an ongoing income generation opportunity,

▪ Create a sustainable solution to land reform in SA;

▪ Encourage community to start developing interests towards needing self-employment opportunities through

agribusiness,

▪ Create business opportunity awareness for small farmers,

▪ Capacity building and skills transfer by the management team and implementing agents by creating vehicles to

support and nurture the skills at local level, through training and mentorship programs.

▪ Training staff in crop value adding and appropriate small industry skills,

▪ Women and Youth empowerment. This project will involve youth and women as one of its major aims is to

empower these groups to acquire independence,

▪ Sustainable land use planning and sustainable commercial farming,

▪ Awareness to poor people to become less dependent on government grants,

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 ▪ Black Economic Empowerment. The business belongs to black historically disadvantaged group which is a positive

support of the Black Economic Empowerment since the people involved will be empowered with skills and

experience to manage their own businesses. This does not mean that this project will not need expertise, experience

and services from other racial groups as the main aim remains effectiveness and efficiency.

▪ Tapping into export industry.

5.1.1.8 STRATEGIES FOR DEVELOPMENT

The following strategies have a potential of increasing the economic activity and therefore its local economy

in order to ensure that sustainable economic growth is maintained over a long time frame.

▪ Community Economic Development

This agribusiness concept is based on the idea of developing community self-reliance through human

resource development and skills development. This strategy aims at alleviating poverty by improving the

capabilities of disadvantaged communities so that they can improve on their standards of living. Lusabo

Group’s 5 years strategic partnership with Local Municipality will address this concept. Community

Economic Development initiatives include: Employment training, Capacity building, Human services and

enterprise development, Enhancing access to employment opportunities, Creating an environment for self-

sufficiency. Community members involved in this agribusiness project will be identified and trained in order

to enhance their skills and increase the output of production, which will diversify the local economic base.

▪ Development of Competitive and Comparative Advantages

Placing the project area in a position where it can be competitive with other regions as well as the rest of South

Africa through establishment of such state of the art project. Such area will emerge competitive if agribusiness

resources are used at their full potential in a sustainable manner. This project would be able to give a

competitive edge where industries, business and even SMME's prefer to locate in these areas. This will

stimulate the economic development of the region due to its competitive or comparative advantage that other

areas do not have.

▪ Development of Infrastructure

In order for investment to be attracted to the area of the project, for industries to be established, and for local

and international trade and manufacture to occur, it is essential that the physical and social infrastructure of

an area be developed initially. The infrastructure of an area shows its development. Thus, it is a significant

aspect that needs to be paid greater attention to in order for industrialization to occur in the region. This will

be addressed in the form of establishment of production infrastructure like greenhouses as well as installation

of necessary equipment for running operations of this project, offices, workshops, packhouses, processing

facilities, sheds, etc.

Industrial investment is a perfect strategy of attracting new industries to the area of the project, thereby

creating employment opportunities and increasing tax base. Comparative advantages of an area are marketed

in this strategy. Our Greenhouse project is an investment strategy that has a potential of attracting new

industries. Other factors considered by businesses are the level of infrastructure, recreational, agricultural,

social and cultural activities at the area and whether a local market exists for the type of goods or services

produced. There is a definite market for agricultural products and greenhouse structures have a potential of

attracting investors.

▪ SMME Promotion and Support

SMME's create the bulk of South Africa's jobs and are also a major component of the South African economy,

contributing by approximately 40%. With the creation of SMME's, the local economic base will be diversified,

investment will increase, and the private sector will be strengthened. Therefore, it is vital to encourage and

support SMME development within the Municipality jurisdiction, as it will assist with sustainable economic

growth. The sustenance of job creation in South Africa has been proven to be through SMME development.

▪ Promotion of the Project Area

Lusabo Group Agribusiness project is a promotional strategy, as the area of the project shall also need to be

promoted and advertised so that people, businesses and industries are attracted to the area. The concept of

Greenhouse farming is not famous but it automatically places the area of the project at a marketable state in

such a way that people would want to work and live in the area. Project area can be promoted through

marketing campaigns via the usage of websites, the Internet, brochures, information desks, newspapers,

holiday and tourist magazines, and advertising campaigns on the radio and television, etc. Promotion of the

area of the project will also create jobs for local inhabitants of the area, thereby also enhancing the economic

development of the region.

▪ Monitoring and Evaluation

Lusabo Group Agribusiness monitoring and evaluation will ensure that this project is progressing according

to plan, developing Monitoring and Evaluation tools and systems to monitor and access impact and

effectiveness of the project, participatory appraisal and review mechanisms applicable across the board and

continuous assessment.

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