Urbanization and changing consumption patterns have created strong and growing markets for processed foods, many of which require maize as an input. The cornflake market in Ghana provides many untapped business opportunities, as most of the cornflakes sold domestically are imported. The price of the imported cornflakes is about US$6 per kg, whereas domestically produced cornflakes would cost approximately US$2 per kg. Low-cost cornflakes fortified with soya have a ready market at schools, where they can serve as a substitute for foods like gari, which have lower nutritional value.
Sky-3 Farms is an agribusiness located in Kintampo in the Brong Ahafo Region that is looking to take advantage of this import-substitution opportunity by moving into cornflake production. Sky-3 Farms has a 100 acre maize farm at Kintampo with an additional 100 acres for expansion. In operation since 2011, Sky-3 Farms started as an aggregation business, but was later transformed into an agribusiness center following the collapse of the tobacco industry in Kintampo. The farm produces maize and cowpea, and provides storage, drying, cleaning, and marketing services. Through its outgrower scheme, the company provides tractor services to over 295 maize farmers with 1,500 acres, and 115 rice farmers with 500 acres.
Sky-3 Farms is seeking US$1.5 million to US$2.0 million in start-up funding to expand into cornflake production. Financing is needed to conduct a feasibility analysis, for working capital, and for capital expenditure to set up a facility.
Sky-3 Farms is currently working with a BAS provider who is helping the firm develop a business plan for maize production, grain drying and storage, preparation of feasibility studies for the production of corn flakes, and to secure a loan facility for the set-up of the production plant.
An ERR is required to determine the level of environmental risk associated with this investment. Infrastructure construction tends to have moderate to high risk, but risk will be determined during further screening of this investment and preparation of an ERR.
There are a number of government and donor-supported initiatives that could be leveraged to support this investment:
- Ghana Export Development Investment Fund, for which Sky-3 Farms is a nucleus farm
- USAID-supported ADVANCE Project
- Savannah Agricultural Development Authority
- Northern Rural Growth Project.
Kwasi Etu-Bonde, Proprietor, +233 (0) 268 151 375; (0) 208 151 375; firstname.lastname@example.org