Commercial proposal on laying joint orchards, registering the land for the long-term use, and cultivating nuts (walnuts and hazelnuts) for export
Ukrainian company “SSK-engineering”, which areas of work include planting nut plantations in Ukraine, operates in the south of Ukraine (Zaporizhzhya and Kherson regions). For today, the company’s management department has decided to look out for U.S. partners who are interested in co-investing into planting walnut in order to further export the outputs to the world market.
The plantations are laid from certified selected varieties.
The process of laying the gardens, growing and harvesting, takes place under supervision of certified companies, vendor of selected seedlings, with a guarantee of a high quality of seedlings themselves. The very activity of growing walnut orchards are not certified.
Currently “SSK-engineering” has issued a long-term use of 480 ha of land for 100 years; 86 ha have already been planted with walnuts in 2015. The company is ready to increase its land bank to 2,000 hectares per year, followed by planting walnut orchards there.
When the gardens are planted, we issue garden passports, and when the crop is harvested it is to be certified in accordance with the requirements of the importing country.
When growing products we apply bio-fertilizers only.
The finished products are to be delivered in two forms: in-shell walnuts packed in 25 kg bags on pallets and wrapped with stretch plastic wrap, and refined walnut kernel packed in vacuum plastic packaging in cardboard boxes placed on pallets. The minimum batch supply is a twelve feet container.
An investor is to be invited to participate in this project from 100 hectares (and a multiple of 100 ha) on the following conditions:
Funding of 80% of the expenses, according to the schedule (six years), in which the investor’s share of ownership will be equal to 51% of the company’s assets and income, and the share of our co-financing will be 20% of the expenses with the ownership of assets and income equal to 49%.
The practical implementation of the project at all stages is provided by the Ukrainian side.
The total amount of investment for 6 years, including laying the gardens, harvesting and implementation of the first commercial harvest, is 673,700 euros per 100 hectares.
During the 6th year, the planned yield is to be 3,000 kg/ha.
300 tons of in-shells on 100 hectares of wеalnut plantation.
The maximum cost of the implementation of the nut without taking into account transport costs is 1,100 euros per 1 ton.
Gross income is 1,100 EUR/1t – 300t = 330,000 euro/year.
During the 8th year, the yield is to be 5.000 kg/ha, which will increase the harvest nut indicators up to 500 tons per 100 ha per a year.
Gross profit forecast is 1,100 EUR*500t = 550,000 EUR/year
The payback period is 3 years from the date of beginning of commercial fruiting.