Business Plan of Existing Agricultural Enterprise for the Expansion and Development in Local and International Markets

The purpose of the current project is to establish the necessary steps to be taken to make the company's future business expansion and development in the local and international agricultural arena successful, by increasing company’s local market share and export directions. In addition, to analyze all internal and external factors that may affect the result of achieving the final goals and objectives. At the same time, current business plan will be used to ensure that company fulfils all required objectives during the years, that will allow to track the progress and amend necessary steps if required. Finally, it will give the company an estimate of what to expect in the future, avoiding adverse factors and subjectivism. In order to accomplish key set objectives, which are mentioned in separate section, the main objective of current business plan is to raise USD 7 million in the form of a Bank loan to finance necessary costs in the expansion project. Agrogled SRL is an agricultural entity that carries out its main activity in the production, storage and further trading of grain products (e.g. wheat, barley, peas, sunflower, corn and other crop products). The company's head office is located in Chisinau, and its production process is carried out in the southern part of the country – Taraclia Region, Moldova. An international work experience of top management, prudent and efficient leadership allowed to reach competitive results over the years. For instance, between 2010 and 2019, company increased its total cultivated areas from 6,000 to 12,384 hectares of total fertile area and illustrated the most efficient harvest levels per 1ha of cultivated land in the region ( +15/20% than competitors). Current positive trends are illustrated in the diagram below, where can be observed that revenue in 2019 amounted to USD 12.4m against USD 11.7m in 2018 and the company’s share in the local grain market amounted to 1.4%. Table 1: Snapshot of “Agrogled” SRL (in $/thousand) - (chart presented in the bachelor thesis.) In addition, Agrogled has an aggressive, but realistic plan to continue increasing its revenue (including export share) through production volume growth, i.e. cultivated areas and reach a figure of up to 20,000 hectares of land (by the end of 2027) by offering unique long-term lease terms to landowners, given the fact that company has high business reputation and experience in cultivating the land efficiently, i.e. generates more profit to the landowners. Moreover “Agrogled” SRL will continue to strengthen its position in the field of local and foreign agricultural business, adapting commodity trading lines, creating a modern enterprise with highly professional technical personnel, modern agricultural machinery and aggregators, as well as technologies for growing agricultural products, with a vital increase in the level of production and labor organization, which will significantly benefit the region economically and allow it to be one of the most prosperous regions in the Republic of Moldova. The dynamics of the commodity grain industry is highly fluctuating year to year due high dependency on the climate conditions. However, the tendency of country’s total grain turnover has increased by 70% in the last 10 years along with the grain demand on Moldavian products in international market, due to emerging business environment (conditions such new trading port), well geographical positioning and lower production cost in relation to global market. With reference to the end selling of the product, “Agrogled " SRL has a well-developed customer portfolio, which has been built over 20 years of experience. For instance, the company’s main customers are Trans-oil Group (Moldova) and Tiryaki Group (Turkey), both of which have annual total revenue of USD 400 million and 1.5 billion respectively. Furthermore, the company’s accumulated trading volume with current customers only USD 7 million and has a high potential to grow based on the client’s interest to consume larger amount of “Agorgled” SRL’s products. In addition to the mentioned client giants, the “Agrogled” SRL has more than 15 other clients with a high appetite for the company's product. In order to assure a security to the bank, while issuing a USD 7 million loan, Agrogled will provide financial hedging in a form of collateral (pledge) of market value – USD 9 million and UBO (Ultimate Beneficial Owner) guarantee (see Loan Guarantee section). Furthermore, in relation to the use of proceeds of additional USD 7 million loan funding, company expects to refinance part of the existing loan, cover deficit of WC and acquisition of fixed assets.