Netafim’s Financial Solutions for Smart Irrigation Solutions Elad Levi – Commercial Manager, Netafim Africa February, 2017
Agenda • Netafim at a glance & Drip Irrigation • Financing solutions by Netafim 2 Confidential
Netafim - 50 years of shaping the future of agriculture Founded in 1965 #1 The Largest Irrigation by Farmers for Farmers Company in the world In the desert area of kibbutz Continues to lead the Drip Irrigation Hatzerim, which suffered from a revolution, offering end-to-end smart severe lack of water. Introduced irrigation solutions Drip Irrigation to the world 3 Confidential
Evolved to be the global leader of the irrigation industry 17 29 MARKET SHARE HQ IN MANUFACTURIN ISRAEL SUBSIDIARIES ~ 30% G PLANTS EMPLOYEES ANNUAL SALES * COUNTRIES 4,400+ 110+ ~$900M * Estimate for 2016 4 Confidential
Selected irrigation projects Vietnam – Total Mexico – Los Pinos Senegal - CSS >1,000 Ha of drip 540 Ha Net house & 80 3,500 Ha of drip irrigated coffee Ha Greenhouse irrigation including project BWS Ethiopia - Wolkaite India - Ramthal 7,000 Ha of drip 11,700 Ha irrigation including BWS community Peru - Olmos irrigation, involving 8,000 Ha Center Pivot 6,700 framers Brazil - Agrovale project including BWS Tanzania – 5,000 Ha of drip >1,000 Ha of drip irrigation project irrigated coffee Brazil – Annually Swaziland - Simunye 6,000 Ha of drip 11,500 Ha of drip irrigated coffee irrigation 5 Confidential
Full irrigation solution – from water source to tree’s roots 6 6 Confidential
Drip Nutrigation™ - 95% efficiency of nutrient App. (vs. 30%-60%) 7 7 7 Confidential Confidential
Drip Nutrigation™ - Netafim’s Solution for Coffee Impacts of Drip Nutrigation™ Up to: ▪ 300% yield increase ▪ 50% water savings ▪ > 8 harvests before pruning ▪ > 95% uniformity ▪ Significantly lucrative ROI Ensures and control the yields also during drought & difficult climate times! 8 Confidential
On-Surface Drip Irrigation Dripnet PC Uniram RC 9 Confidential
Sub-Surface Drip Irrigation Uniram AS 10 Confidential
Drip Nutrigation™ in coffee starts from the very beginning Nursery Young Trees 11 11 Confidential 11 Confidential
Drip Nutrigation™ - Irrigate the plant – not the soil Confidential 12 1212 Confidential
Drip Nutrigation™ - Uniform flowering Confidential 13 1313 Confidential
Drip Nutrigation™ - Optimized uniformity (>95%) Confidential 14 1414 Confidential
Drip Nutrigation™ - yield comparison (Brazil 2014) Rainfed Drip Nutrigation Confidential 15 1515 Confidential
Drip Nutrigation™ - optimized results Confidential 16 1616 Confidential
Coffee - yield comparison East Africa- Kenya, Tanzania, Zambia, 2013 Vietnam, 2013 (since 2010) Arabica, Averaged yield (Kg) per Ha. Robusta, Averaged yield (Kg) per Ha +294% +71% 2150 2750 1900 900 400 Smallholders Drip Nutrigation Smallholders Dry Land Drip Nutrigation * Small holders in the forest * Small holders ~1ha, Basin or OH irrigation 1800-2000 Kg/Ha Dry land - commercial 9ft X 9ft. 800-1000 Kg/Ha Drip Nutrigation 2500-3500 Kg/Ha Drip Nutrigation – 1800-3000 Kg/Ha 17 17 Confidential 17 Confidential
Agenda • Netafim at a glance & Drip Irrigation • Financing solutions by Netafim 18 Confidential
Netafim’s financing map EH SH NBFC ECA L L D 19 Confidential
Netafim’s financing map EH SH NBFC ECA L L D 20 Confidential
Netafim’s financing map Arthur J. Gallagher 21 Confidential
Suppliers’ Credit Financing Package Preconditions ▪ Customers: corporates/ dealers ▪ Recent 3-years audited financial statements ▪ Minimum transaction: 300k USD ▪ Company has a track record of success (not SPV) ▪ Tenure: up to 5 years (door to ▪ Sales, profitability and assets are in positive trend door) ▪ Total transaction value does not exceed ~20% of the ▪ Terms: 20% down payment; L + company’s turnover and/ or ~50% of company’ ~5% + single-time financing Equity costs ▪ Company’s existing debt leverage is reasonable ▪ Agreement and installments are US dollar based Advantages ▪ Company demonstrates strong capabilities to succeed in its agriculture operations ✓ Free of collateral financing ✓ Debt is not registered in the Process Flowchart company’s credit lines Contract ✓ Ordinary commercial agreement Customer Debt Fast and efficient process! Agreement Debt Debt Transfer Payment Bank 22
Suppliers’ Credit Project Funds NBI Debt Sale Documentation Description Transfer Transaction Information (Application form) 1. Netafim managed to finance >150m Buyer : Customer name & address , profile, and • updated financial statements USD worldwide! Transaction: Product, amount, payment terms etc. • 2. None Binding Indication receipt of a conditional approval from the bank 3. Documentation • Promissory notes / Invoices • Legal opinion of the Issuer (Buyer), Guarantor (if applicable), supplier (Netafim), Notice of Endorsement 4. Sale of promissory notes to Bank (Indemnity letter) Funds Transfer 5.
Buyers’ Credit Financing Package Preconditions ▪ ▪ Customers: big corporates/ gov. Sovereign Guarantee ▪ Minimum transaction: 10m USD OR ▪ ▪ Tenure: <10 years (door to door) Audited financial statements of recent 3-years ▪ ▪ Terms: ~20% down payment; L+ Company’s financial statements are very strong, ~3% + single-time financing demonstrate positive trend and legacy of success costs Process Flowchart Advantages Contract Buyer ✓ Available in emerging countries Seller Loan AGMT ✓ Lucrative interest rates Risk ✓ Flexible payment terms Sharing Guarantee Governments/ Bank Corporates Full solution for the customer Guarantee Ministry of Finance Israel’s ECA 24
Buyers’ Credit – Government of Ethiopia :Buyer (Sugar Corporation / ETHIOPIA (State owned :Guarantor Ministry of Finance, The federal democratic republic of Ethiopia :Seller .Netafim Ltd Project Turn key project of 7,000 ha infield irrigation including bulk water :Description .supply Tigray region, N. Ethiopia Water supply Tekeze & Zarriema river :Amount M 200 USD~ Deliveries & .Within 18 month from contract signature :Installation :Tenor years 10 :Financing Buyer’s credit agreement to be signed between the bank and the 100% Buyer. (2 years grace plus 8 years semiannual repayments) supported .by insurance :Insurance Part #1 - Export Facility / Insured by ASHRA & backed by private insurance Part #2 - Commercial Facility / insured by private insurance
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