Business Plan Rusenyi Coffee Growers - Final - Version - Final

RUSENYI COFFEE GROWERS
PROJECT
BUSINESS PLAN
December 2016
1 | RUSENYI COFFEE GROWERS BUSINESS PLAN
PRERIMINARY INFORMATIONS
1 PROJECT NAME RUSENYI COFFEE GROWERS PROJECT
2 NAME OF THE Mr. BIGIRIMANA Robert

PROMOTOR
3 CONTACT  Email: bigirarobert@gmail.com

 TEL: +250 788,304,464
4 LOCATION  RUSENYI Coffee Zone

 KARONGI District,
 WESTERN PROVINCE
 RWANDA
5 INITIAL INVESTMENT  Equity contribution : Euro 1,052,168
 Loan requirement : Euro 4,208,674

EXECUTIVE SUMMARY
Business concept
Agriculture is estimated to account for 33 percent in RWANDA’s GDP. Coffee only contributes about 25
percent to the Rwanda agricultural exports. Today according the coffee census 2015, the number of
coffee farmers involved in coffee production is 355,771.
Coffee farming was introduced in Rwanda in the 1930’s by the Belgian colonial government. The number
of coffee trees at national level is 89,726,809 trees with only 90 million of them being productive. Despite
the volatile international coffee prices, Rwanda’s best Arabica coffee is in great demand and attracts
a premium price on the international market.
Coffee quality is dependent on production management practices at the farm level such as fertilizer
application, spraying against infection, tillage practices, irrigation and harvesting. Coffee quality is also
dependent on processing operations at factories beginning with reception of cherries, pulping, pre-grading,
fermentation, grading, conditioning, drying, storage and waste management. In order to realize more
revenue and contribute to the balance of payment of Rwanda, enhancing value and assuring quality of
coffee export products is required. This will increase coffee demand on national, regional and international
markets. The establishment of a first-class brand of Rwandan coffee can increase export of coffee from
Rwanda, attract more buyers and improve the living conditions of local farmers by negotiating good prices
for their coffee and connecting them with international buyers. This project comes in the context of
promoting and marketing of Rwanda coffee, especially helping coffee producer located in RUSENYI coffee
zone to increase coffee quality and best farming practices for increased quality and quantity. This is
done though establishment of RUSENYI COFFEE GROWERS operating in RUSENYI Coffee Zone
according to New NAEB coffee zoning system.
Company’s mission
The main activity of the RUSENYI COFFEE GROWERS (RCG) is to establish a first class brand of Rwanda
coffee both as a fully washed coffee and having high quality green bean. The business activities include
establishment a modern coffee farm on 1500 Ha through land consolidation program, purchasing
produced coffee, processing coffee and selling green coffee at international markets. We expect to sell
about 672 MT at the first two year and about 1200 MT every in the following years. The mission of the
business is to satisfy customers’ needs who want high quality coffee and will increase quality production
of Rwandan coffee thereby improving the livelihood of RUSENYI coffee producers through promotion
and marketing of coffee from the RUSENYI Zone in Western Province. This brand from RUSENYI zone
will mainly targeting the international market. .

It is planned that RUSENYI COFFEE GROWERS Project will commence coffee export activity during this
coming in 2017.
Company objectives
The objectives of the company are to:
 First market and promote coffee produced in the region RUSENYI Zone on both local and
international markets.
 Facilitate production of high quality coffee for international market
 Sensitization of local farmers and facilitate the establishment of modern coffee farm on
consolidated land on 1500 Ha in Rusenyi, Western Province.
 Negotiate good coffee prices for the farmers for improving living conditions of coffee farmers
 Train farmers on best farming practices for increased coffee production and coffee quality
 Establishment of Milling factory in long run
Management Team
RUSENYI COFFEE GROWERS Project (RCG) will benefit from an experienced entrepreneurial
management of the Promoter Mr. Robert BIGIRIMANA who is responsible for strategic corporate and
financial planning. The company will also hire technicians with sufficient knowledge of the local economy
and experience in agribusiness, marketing and processing and the team will run the day-to-day operations.
Partnerships and Finance Plan
RCG Project will strive to form mutually beneficial partnerships with local farmers. Farmers will receive
more favorable prices for their coffee production. The total investment requirement has been calculated
at Euro 5,260,842 out of which 80% will be in form of loan (4,208,674 euro), paid in 15 years
with 3 years grace period and Euro 1,052,168 in form of equity contribution. The project payback
period is 6 years with a cumulative Net Present Value of Euro 4,627,810 in 10th Year. The Project
Internal Rate of Return of 11.54 percent reveals a feasible profitability of the business.
Economic Impact
RCG will contribute to Rwanda balance of payment and will also contribute to the farmer’s income by
negotiating good prices. Similarly, more coffee producers will be motivated to participate in coffee
intensification programs as a result of assurance for good markets and prices. This will results in
development of RUSENYI coffee brand and stimulate the local economy and increase Rwanda Gross
Domestic Product.

TABLE OF CONTENT
PRERIMINARY INFORMATIONS ................................................................................................................2

EXECUTIVE SUMMARY .................................................................................................................................3
TABLE OF CONTENT ...................................................................................................................................5
PARTY I: OVERVIEW OF THE COFFEE SECTOR IN RWANDA ......................................................8
1.1 Coffee Production................................................................................................................................8
1.1.1 Semi-Washed coffee or Ordinary Coffee .........................................................................................8
1.1.2. Fully Washed coffee ..............................................................................................................................9
1.1.3 Characteristics of coffee production and area covered by coffee ..............................................9
1.1.4. Soil characteristics in intervention area......................................................................................... 10
1.1.5 Coffee Varieties available in the country ................................................................................. 12
1.1.6 Statistical data on coffee in Rwanda ................................................................................................ 13
1.2. COFFEE WASHING STATION AND STORAGE INFRASTRUCTURE.................................. 18
1.2.1 Current status of coffee washing station ....................................................................................... 18
1.2.2 Coffee plantation in Western Province .......................................................................................... 19
1.2.2.1 Estimated supply of coffee cherries of the region .................................................................... 20
PART II: RUSENYI COFFEE GROWERS PROJECT ............................................................................. 22
2. 1 Business description .............................................................................................................................. 22
2.2. Coffee Collection Centers for the Project ...................................................................................... 23
2.4 Marketing Analysis .................................................................................................................................. 26
2.4.1. The situational analysis of the coffee production and export in Rwanda .............................. 26
2.4.2 Target Markets ..................................................................................................................................... 28
2.4.3 Marketing plan and marketing strategy ........................................................................................... 30
2.5 BUSINESS OPERATIONS ..................................................................................................................... 30
2.5. 1 Product Manufacture ......................................................................................................................... 30
2.5.2 Raw material ......................................................................................................................................... 30
2.5.2 Quality Control.................................................................................................................................... 31
2.6 Project Management............................................................................................................................... 31
2.6.1 Non-discretionary budget requirements and Company organization chart .......................... 31
2.7 ECONOMIC AND FINANCIAL ANALYSIS ................................................................................... 32

2.7.1 Assumptions.......................................................................................................................................... 33
2.7.2 Loan bank conditions .......................................................................................................................... 33
2.7.3 Local tax system................................................................................................................................... 34
2.7.4 Estimation of total operational costs .............................................................................................. 34
2.8 Financial and Economic Viability (NPV and IRR).............................................................................. 47
2.8. Tactics and Strategy for growing the business ................................................................................ 48
2.9 Risk analysis / Mitigation ........................................................................................................................ 49
PART III: FUTURE INVESTMENT IN MILLING FACTORY ............................................................... 49
3.1 Architectural design of Milling Factory in Karongi District ........................................................... 50
3.2 Estimated area for the planned Unit................................................................................................... 52
3.3 Site map and location ............................................................................................................................. 52
4. POSITIVE IMPACT OF THE PROJECT ............................................................................................... 53
LIST OF TABLES
Table 1: Number of trees and area covered by coffee ............................................................................9

Table 2: Coffee Export comparison .......................................................................................................... 13
Table 3: Current Status of Coffee Sector ................................................................................................ 14
Table 4: Distribution of Coffee trees in Western Province ................................................................ 14
Table 5: Coffee projection 2013-2017 ...................................................................................................... 15
Table 6: Individual coffee growers and cooperatives ........................................................................... 15
Table 7: Trends in evolution of fully washed coffee .............................................................................. 18
Table 8: Coffee Washing Station number and processing capacity .................................................... 19
Table 9: Coffee trees in Western and Northern Province according to age of plantation .......... 19
Table 10: Estimation of coffee cherries in Rusenyi zone and Northern Province .......................... 20
Table 11: Total production of green coffee ............................................................................................. 21
Table 12: Established coffee collection centers ...................................................................................... 23
Table 13: Coffee cherries supply activities ............................................................................................. 24
Table 14: Transitional Probability Matrix of Coffee Exports ............................................................... 29
Table 15: Estimated quantity of operational costs for Key Staff, IT and Utilities............................ 32
Table 16: Total operational costs .............................................................................................................. 35

Table 17: RCG COFFEE PRODUCTION CAPACITY ......................................................................... 36
Table 18: Investment in coffee plantation ................................................................................................ 39
Table 19: Investment in coffee Washing Station..................................................................................... 40
Table 20: Financing plan ............................................................................................................................... 41
Table 21: Amortization table ...................................................................................................................... 42
Table 22: Projected income Statement..................................................................................................... 43
Table 23: products-market matrix ............................................................................................................. 48
LIST OF FIGURES
Figure 1: EDPRS Targets for coffee ........................................................................................................... 10

Figure 2: Proportion of coffee tree grouped and Individuals ............................................................... 16
Figure 3: Distribution of coffee tree according to age in RUSENYI Coffee Growers ................... 17
Figure 4: Coffee production in Rwanda .................................................................................................... 27
Figure 5: Export earnings in USD............................................................................................................... 28
Figure 6: Organization chart........................................................................................................................ 31

PARTY I: OVERVIEW OF THE COFFEE SECTOR IN RWANDA
1.1 Coffee Production
The Rwanda coffee industry holds a good position in agricultural export commodities in acreage
planted, as well as foreign exchange and domestic earnings. Exported coffee from Rwanda is
estimated in terms of green coffee, which is obtained after transforming the fresh coffee cherries
into clean green beans ready for export or for roasting. There are essentially two types of green
coffee produced: fully washed coffee and Semi Washed or Ordinary coffee.
1.1.1 Semi-Washed coffee or Ordinary Coffee
This type encompasses a large proportion of coffee produced in the country. Normally it is not
recommended for coffee producers to process harvested coffee but convey produced cherry to
wet mills according the coffee zoning system. The Semi washed manufacturing process is
characterized by the use of internal resources in the hands of coffee farmers. This requires a lot
of local work whose opportunity costs is among the lowest in the world.
It is therefore reasonable to assume that the ordinary coffee sub sector would be internationally
competitive. The only steps that consume tradable inputs are clearance, transport, as well as the
specific financial costs for this sub-sector, mainly recorded by the exporters for their buying and
exporting activities.
Today, agriculture strategic papers emphasizes on production of "Specialty coffee”. NAEB

Medium term strategy from 2013 t0 2018 targets the maximum of fully washed at 70 percent of
total green coffee produced. This also shows that the benefit from the ordinary coffee will persist.
The more the system produces quality, the more the selection on the cherries will be strong, the
more the "ordinary “will be persistent.
Moreover, for the coffee farmers, the ordinary coffee plays the role of cash supplier relatively
fast: a few days after the harvest, the coffee grower can go to sell his coffee parchment washed
on the market and have easy cash.
From a practical point of view, on the contrary, the washing stations should be equipped with
hand pulverizers in order not to wash the poor quality cherries resulting in sorting system at the
Coffee Washing Station which should generate wealth, because there is a remunerative market
for this type of coffee and this potential is not at this time fully valued. Under these conditions
the coffee Washing Station leave the cherry of poor quality and thus they leave the value added

to the competition. It is known that the ordinary coffee production is essentially due to lower
quality of coffee harvested because of a lack of sufficient extension services and probably control
of good agriculture practices.
1.1.2. Fully Washed coffee
The strategic plan for Rwanda Agriculture Transformation and National Agricultural Medium
Term Strategic encourages investment in quality and quantity of coffee by planting and
constructing modern Coffee Washing Stations to contribute to specialty coffee for export.
Technically, the Fully Washed subsector is characterized by an additional pre-industrial link
necessary to obtain a better milder coffee, developing a more definite aroma. Coffee washing
Stations constitute this additional industrial link.
The additional costs of this sub-sector are due to:
 Additional cost due to the value addition at coffee washing station level
 Financial expenses related to the cherry gathering activities and represented more than
80% by the financial expenses related to first coffee payment of the coffee growers
(financed on their share)
 Financial costs related to the financing of CWS equipment’s and coffee marketing
1.1.3 Characteristics of coffee production and area covered by coffee
Rwanda produces Arabica coffee of bourbon and typical species. In general, the coffee tree grows
well and gives a sufficient production in regions with altitude between 1400 and 1900 meters,
rainfall between 1500 and 1600 mm, temperature between 18 º C and 22º C and soils with acidity
levels (pH) between 4.5 and 6, which are fertile, fragile and quite permeable (MINAGRI, 2004).
The shores of Lake Kivu in the Western province (RUSENYI Region) were identified to be
suitable for coffee growing with very good productivity, the Southern province, Eastern province
and Northern Province.
Table 1: Number of trees and area covered by coffee
SN Province Number of coffee Trees Area Covered (Ha)

1 West 29,888,577 11,955
2 South 27,976,684 11,191
3 East 21,958,296 8,783

4 North 9,121,974 3,649
5 Kigali 781,278 313
Total 89,726,809 35,891
The figure below illustrates the EDPRS targets for coffee sector
Figure 1: EDPRS Targets for coffee
Acreage Production
60,000 54,426
51,926
49,426
46,926
50,000
40,000 35,000
32,000
30,000
28,000
30,000
20,000
10,000
0
2013 2014 2015 2016 2017 2018
1.1.4. Soil characteristics in intervention area
There are different types of soils such as:
 The schisto-sandstone rocks which yielding yellow-brown clay alliterated products

 Latosols (ferrosols) with low soil fertility. This type of soil covers the vast majority of the
area outside the volcanic zone.
 Floors with a dark horizon. These soils are highly desaturated and seem to be like
temperate humic podzols. They are a horizon of accumulation of organic matter and these
soils are mostly found in the region of RUSIZI District.
 Ando Soils. They have a thick, blackish color on the soil surface.

 Brunizems soils (Dark prairie Soils) have a good reserve of calcium and are grown on
poorly altered parental material. They are fertile and are particularly suitable for growing
tea and coffee.
Basing on soils type described above and observations made during the field visits, it was noted
a significant deficiencies in soil nutrients in the various orchards in the area. It is recommended
to apply organic manure in coffee trees though mulching.
The production of organic manure necessary in the mulching in coffee plantation can be done by
using Pennisetum purpureum in coffee plantation. However, other plant materials may be used
such as sisal waste, coffee pulp, sawdust, wood waste, rush and papyrus that are taken from wet
valleys.
In the case of young coffee trees
It is recommended to mulch the young coffee trees as soon as they are put in place. If large
quantities of organic matter are not available, the soil should be covered at the foot of the coffee
tree with a radius of 40 to 60 cm. In the soil where erosion is to be feared, the organic manure
will be placed in rows of 1 to 1.20 m in length in the same line of the coffee trees. It should always
be avoided to have the soil protective material in direct contact with the trunk (allow a space of
2.5 to 5 cm between the trunk and the mulch material).
In the case of mature coffee trees
For coffee trees planted in flat or slightly rugged and very fertile ground, the mulch will be placed
at the first spreading in one spacing out of two and during the second spreading in the other
spacing. This will be done alternately once or twice a year. If the coffee trees are located on
eroded soil and especially in the area of KARONGI where the rainfall reaches an annual average
of 1250 mm, the mulching will be done in all between lines once a year.
It is possible; in coffee plantations in low-fertile soil, where all the interlinings receive annually a
layer of organic matter; not to mulch one spacing out of two per year, especially if the available
organic matter is not sufficient to cover all plantation. Coffee plantation with a higher plantation
density (2 m x 2 m) will be protected before those with lower plantation density (depending on
the slope of the plot).
Timing of coffee Mulching
The timing of mulching in mature coffee plantation depends on the amount and distribution of
rainfall. In the areas with two rainy seasons, the mulching will be applied before the rains and
preferably before the wet season. In the case of RUSENYI Coffee Growers (RCG) plantation, we
will wait the end of the rainy season to spread the mulching so that it protects the soil and
maintain humidity during the dry season. Mineral fertilizers in ammoniac form will be applied

simultaneously with the application of organic manure. In the case of the RUSENYI coffee
Growers plantation it is planned to establish of an organic matter decomposition system in order
to have sufficient organic manure to apply in the site.
Photo 1 Photo 11
Photo 3 Photo 4
It is certain that the climate and soil conditions are suitable for coffee growing coffee. It is only
the good agriculture practices as well as the small deviations of the climatological parameters
which accentuate the quality of coffee cherries compared to the other regions of the country
where coffee is produced.
1.1.5 Coffee Varieties available in the country
According to the Rwanda Agriculture Board (RAB), the varieties most commonly planted in
Rwanda are:
1) Bourbon Mayaguez 139 (BM 139)

2) Bourbon Mayaguez 71 (BM 71)
3) Bourbon Mibirizi
4) Jackson 2 / 1257 (J2 1257)

5) Harrar
6) Population 3303 (Pop 3303)
7) Catuai
8) Caturra
Variety number 1 through number are Bourbon varieties. National Agricultural Export
Development Board (NAEB) distributes seedlings for varieties 1, 2 and 4, depending on the
region, and does not recommend the other varieties. Other varieties have been tested by Ex.
ISAR but they have not been released. These include BABAKA KAFFA, AMPHILLO and
CATIMOR.
Les varieties like POP 3303 and HARRAR as well as the CATUAI and CATURRA dwarf varieties
were unable to adapt to the different coffee regions and at present, plantations are 98% by
ARABICA coffee varieties and only 2% by ROBUSTA varieties (mainly in Kamonyi district).
1.1.6 Statistical data on coffee in Rwanda
The statistical data presented here is collected in different agriculture statistical documents,
NAEB Medium strategy and reports and Rwanda Economic development and poverty reduction
Strategy. According to the table below, in 2015 the full washed coffee was at 44.7 percent of the
total exported green coffee. The target is 71 percent of fully washed coffee in 2018.
Table 2: Coffee Export comparison
2012 2013 2014 2015
Type Expor Reve Averag Export Reve Avera Export Reve Averag Export Revenu Average
t nues e Price MT nues ge MT nues e Price MT es in M. Price
in M. in M. Price in M. USD
MT USD USD USD
Fully 5669 25.7 4.5 6655.1 24.7 3.3 6,007,8 21,3 3.6 7,394,7 35,3 4.8
Washed
Semi 9639 32.6 3.3 10568.2 27.1 2.5 8,913,9 22,6 2.5 7,351,6 25,2 3.4
washed
Triage 1467 2.2 1.5 2521.4 30.4 1.2 2,675 3,1 1.2 1,668,1 3,2 1.9
Robusta 212 0.4 1.8 224.8 0.3 1.5 230,2 0.2 1 107.3 0.2 1.1
Roasted 7.9 9.6
Total 16,98 60.8 3.5 19969 55.2 2.7 17,975 47,4 2.7 16,529 64,0 3.9
9

Source: NAEB Report 2016
Table 3: Current Status of Coffee Sector
ITEM QUANTITY
1 Number of Coffee Producer 355,771
2 Area Planted 35,891
3 Number of trees 89,726,809
4 Yield per tree 3-4
5 Estimated production (MT) 16,936.2
6 Number of CWS 245
7 Percentage of full washed 54.4
8 CWS Utilization capacity of operated CWS (%) 95
9 Number of Coffee cooperatives with legal personality 198
10 Number of cooperatives owning a CWS 89
Table 4: Distribution of Coffee trees in Western Province
SN DISTRICT TOTAL TREES <1 YEAR (%) 1-3YEARS (%) 3-30 YEARS (%) >30 YEARS (%)
Nyamasheke
1 13,032,732 553,835 4.2 753,647 5.8 8,735,215 67.0 2,990,035 22.9
Rutsiro
2 5,558,759 230,096 4.1 366,149 6.6 3,816,726 68.7 1,145,788 20.6
3 Rusizi 5,544,315 218,408 3.9 314,267 5.7 4,338,149 78.2 673,491 12.1
4 Karongi 3,325,989 397,349 11.9 308,155 9.3 1,710,962 51.4 909,522 27.3
5 Rubavu 1,045,458 25,451 2.4 87,531 8.4 675,370 64.6 257,106 24.6
6 Ngororero 998,677 134,499 13.5 53,512 5.4 462,166 46.3 348,500 34.9
7 Nyabihu 382,647 28,137 7.4 26,575 6.9 214,307 56.0 113,628 29.7
WEST 29,888,577 1,587,775 1,909,836 19,952,895 6,438,071

Table 5: Coffee projection 2013-2017
SN Description 2013 2014 2015 2016 2017

1 Total Production 26,000 28,000 30,000 32,000 34,000
2 Fully washed 9,500 12,000 15,000 19,000 24,000
3 Semi Washed 16,500 16,000 15,000 13,000 10,000
4
% FWC 37 43 50 59 71
5 Revenues
(million USD) 108,5 119.2 130.5 143.1 157
6
Washing stations 249 274 299 324 349
The coffee Census of 2015 shows that the western province has 126,655 coffee farmers with a
total number of 29,888,577 coffee trees corresponding to 11,955 Ha. The census has also shown
an average of 236 trees per coffee grower. The individual growers account for 71% while
associations and cooperatives account for 29%.
Table 6: Individual coffee growers and cooperatives
SN District Number of coffee Coffee trees Coffee trees not

Trees grouped grouped
1 Karongi 3,325,989 900,456 2,425,533
100 27.07 72.93
2 Ngororero 998,677.00 441,976.00 556,701.00
100.00 44.26 55.74
3 Nyabihu 382,647.00 148,482.00 234,165.00
100.00 38.80 61.20
4 Nyamasheke 13,032,732.00 2,378,599.00 10,654,133.00
100.00 18.25 81.75
5 Rubavu 1,045,458.00 383,890.00 661,568.00

100.00 36.72 63.28
6 Rusizi 5,544,315.00 1,745,762.00 3,798,553.00
100.00 31.49 68.51
7 Rutsiro 5,558,759.00 2,645,415.00 2,913,344.00
100.00 47.59 52.41
Total 29,888,577.00 8,644,580.00 21,243,997.00
Figure 2: Proportion of coffee tree grouped and Individuals
29%
71%
Coffee tree grouped Coffee tree not grouped

Figure 3: Distribution of coffee tree according to age in RUSENYI Coffee Growers
<1 YEAR
>30 YEARS 5% 1-3YEARS
6%
22%
3-30 YEARS
67%
In the western province about 90 percent of the coffee trees are located in the district of
KARONGI, NYAMASHEKE, RUSIZI and RUTSIRO. Apart from RUSIZI, the remaining districts
mentioned above are supposed to supply coffee cherries to the three coffee washing station
which are MARA, MPEMBE and RWAMIKO.

1.2. COFFEE WASHING STATION AND STORAGE INFRASTRUCTURE
1.2.1 Current status of coffee washing station
Since 2002, the number of coffee washing station has increased. The Rwanda National coffee
strategy put in place in 2002 was recommending the installation of CWS to improve coffee quality
for export. After strategy implementation at the end of 2012, there was about 198 Coffee
Washing Station spread over the country. Most of them were private investment and a small
number belonged to the coffee cooperatives. They are located where there are a substantial
number of coffee trees but also in zones with relevant facilities like roads, water and electricity
availability. The liberalization of coffee sector and promotion of investment opportunities in the
sector has attracted much more investors than initially anticipated by the strategy.
NAEB in its medium term strategy 2013-2018 targets to reach 71 % of fully washed coffee by
2017 with a total production of 34,000 tons.
Table 7: Trends in evolution of fully washed coffee
2007 2008 2009 2010 2011 2012 2013 2014
FWC ( T ) 3 150 4 800 3 150 4 255 4 439 6 897 6 206 6 808
Total
Production 14 800 21 000 16 000 20 000 16 371 19 955 18 346 16 572
(T)
% FWC on
21.3 22.8 19.7 21.3 27 35 33 42
Total
The distribution of CWS across the country are able to process 104,600 MT of coffee cherries per
season as it is indicated in the table below

Table 8: Coffee Washing Station number and processing capacity
Theoretical capacity in cherries processed per

Provinces Total Number of CWS in 2015
season
West 100 49,350
South 74 25,150
East 46 18,700
North 24 10,900
Kigali 1 500
G/TOTAL 245 104,600
1.2.2 Coffee plantation in Western Province

The coffee census of 2015 conducted by the National Agricultural Export Development Board
(NAEB) of 2015 gives a total number of coffee trees in Western Province of 29,888,577. This
recent census is quite exhaustive and allows to estimate the coffee production capacity of
Western Province (Rusenyi region). The table below presents the number of coffee tree in
western province according to age of coffee plantation.
Table 9: Coffee trees in Western and Northern Province according to age of

plantation
District Total Number of Number of Number of Number of

number of new young productive old coffee
coffee trees planted coffee coffee trees trees more
located in coffee trees 1 to more than 3 than 30
this village trees less 3 Years years up to years
than 1 year 30 years
Karongi
3,325,989 397,349 308,155 1,710,962 909,522
Ngororero
998,677 134,499 53,512 462,166 348,500
Nyabihu
382,647 28,137 26,575 214,307 113,628

Nyamasheke
13,032,732 553,835 753,647 8,735,215 2,990,035
Rubavu
1,045,458 25,451 87,531 675,370 257,106
Rusizi
5,544,315 218,408 314,267 4,338,149 673,491
Rutsiro
5,558,759 230,096 366,149 3,816,726 1,145,788
TOTAL 29,888,577 1,587,775 1,909,836 19,952,895 6,438,071

Burera
66,291 11,643 3,319 26,538 24,791
Gakenke
4,283,659 565,452 347,871 1,995,738 1,374,598
Gicumbi
2,275,589 277,541 108,962 1,082,771 806,315
Musanze
67,116 12,119 4,824 37,525 12,648
Rulindo
2,429,319 448,996 161,376 1,030,042 788,906
TOTAL 9,121,974 1,315,751 626,352 4,172,614 3,007,258

Source: NAEB Coffee Census, 2015)
1.2.2.1 Estimated supply of coffee cherries of the region
A. Estimated supply with a theoretical coffee yield of 1 - 4- 3 kg per tree

The production of coffee is calculated basing on average of 1-4-3 kg per tree considering coffee
trees of an age between 1 and> 30 years and depending on coffee production area and
professionalism of coffee producers
Table 10: Estimation of coffee cherries in Rusenyi zone and Northern Province
Number of Number of productive Number of old Total

young coffee coffee trees more coffee trees
trees 1 to 3 than 3 years up to 30 more than 30
Years years years

Western Province
Yield per 1 4 3
tree (Kg)
Coffee Trees 1,909,836 19,952,895 6,438,071
Sub Total
(MT)
1,910 79,812 19,314 101,036
Northern Province
Average yield per age
Yield per 1 4 3
tree (Kg)
Coffee tree 626,352 4,172,614 3,007,258
Sub
626 16,692 9,021 26,339
Total(MT)
B. Total production capacity of the supply area (Western Province)
Assuming that conversion rate from cherries to parchment is 1 Kg against 5 and parchment to
Green coffee is 0.8 Kg against 1 Kg, we can estimate whole year the total production of green
coffee of the region as follows:
Table 11: Total production of green coffee
SN TYPE OF COFFEE QUANTITY
(MT)
1 Cherries 101,036
2 Parchment 19,063
3 Green Coffee 13,344

PART II: RUSENYI COFFEE GROWERS PROJECT
2. 1 Business description
Rusenyi Coffee Growers RCG is a private company established and registered in Rwanda on
March 7, 2005. It is active in the purchase, processing and international trade of fully washed
Arabica coffee. RCG is heavily involved in the process of washing and processing coffee cherries
into parchment coffee, and in export trade aimed at enhancing these quality products in overseas
markets.
The mission of Rusenyi Coffee Growers (RCG) is as follows:
 Increase the quality and quantity of coffee produced in Rwanda ,

 Provide a sufficiently high standard of living in rural areas at the coffee plantations.
 Land consolidated farm of 1500 ha of coffee in Rusenyi
 Establishment of coffee milling factory in long run
Rusenyi Coffee Growers (RCG) has invested in three 3 coffee washing stations. The Coffee
Washing Station of Mpembe s was built in 2005/2006 and started in March 2006. The Rwamiko
Coffee Washing station was built in 2007 and started up in April 2007. Finally, the Mara station
was built in 2007 and not yet operation. All these stations are equipped with pulping machines
with a capacity of 16 to 20 tons of cherry per day.
The coffee harvesting season in Karongi district (Ex. Kibuye) is from February to May and from
November to January. For the Rwamiko Coffee Washing Station located in Gicumbi district, the
season oscillates from January to July (only one season).
RCG has necessary documents required for operating in the Sector:
 District authorization
 National Agricultural Export Development Board (NAEB) authorization

Rusenyi coffee Growers site map
KOPAKAKI
Detegara
Mpembe CWS Murangara CWS APROCAGA CWS
Nyagotovu (Mara)
CWS
Musenyi Coffee
CWS
Gitesi CWS
Kibuye Mountain
Coffee
2.2. Coffee Collection Centers for the Project
There is a collection channel established between RCG and collectors. The payment of producers
will be realized by collectors funded by RCG.
Table 12: Established coffee collection centers
1 Station de Mpembe
2 Nyankira
3 Rwamujyanye
4 Nyagatovu
5 Gashyushya
6 Kabuga
7 Gisunzu
8 Murangara
9 Mubuga
10 Kiziba

11 Kwibambiro
12 Kigarama
13 Ngoma
The following table describes the necessary coffee activities, actors, locations and means used at
each processing stage of cherry coffee before it reaches Coffee Washing Station (Ex RCG).
Table 13: Coffee cherries supply activities
Location Actors Activities Comment
Plots Farmers Harvesting By hands
Transportation to Manpower
the collection
center Bicycle
40% through 20 collectors Weighting and Scales and registers

collection centers Payment from Jan to
and 60% direct June and From Sept
to November
Drivers Transport from 4 Cars and 2 boats

collection centers
to CWS
CWS Staff Weight Water is required
Payment Fuels
Pulping, Electricity etc.

fermentation,
Washing
Grading
Drying

Packing etc.
RCG Store at Mpembe Jute bag of 60Kg
Lake and Roads RCG Transport by boat Boat RCG

in lake Kivu to
Kibuye then by Truck RCG
Truck to Kigali via
NAEB
Kigali Milling Factory Reception, control , Milling Factory

milling etc.
Kigali RCG quality Transport Truck
Kigali RCG Document
Kigali Client FOB
.3 RCG SWOT analysis
STRENGTH WEAKNESSES
 Rwanda coffee is well appreciated at
international market for good  Insufficient working capital
cupping characteristics
 Skills and experience of the
promoter in running successful
coffee businesses
 Owners access to financial resources
and strong cash flow from operations
 Existence of rural collectors network
 Existence of partner coffee washing
stations
 Sound knowledge of coffee market
and price risk management by the
Promoter and staff

OPPORTUNITY THREATS/CONSTRAINTS
 Global and local Coffee Demand  Lack and not well maintained rural
feeder roads
 Availability of Good Coffee in the
country
 Population growth (residential

development) and increased standard
of living
 Willingness of coffee stakeholders to

work on partnership model
 Improved public transport and

infrastructure
 Possibility of developing and

organizing internal market
 Availability of many milling factories

and rosters
2.4 Marketing Analysis
2.4.1. The situational analysis of the coffee production and export in Rwanda
Rwanda’s Arabica coffee is in great demand and attracts a premium price on the international
market. During the past decades, prices paid to Rwandan farmers closely mirrored international
market fluctuations and followed a downward trend. This price decline as well as other factors
severely impacted Rwanda’s coffee production.
The downward trend could be explained by the fact that low farm gate prices offered no
incentives to farmers to invest in coffee production.
The first coffee strategy was developed in 2000 and updated in 2009. Due to the strategies
adopted, coffee production has been stabilized.

Figure 4: Coffee production in Rwanda
Production (MT)
35000
30000
25000
20000
15000
10000
5000
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Despite stagnant coffee production, there has been steady increase in quality of exports. This
resulted mainly from increased investments in coffee washing stations, which increased from 2in
2002 to 2015 in 2012. The increase in the percentage of fully washed coffee resulted into
increased revenue from Coffee. Where export was 19.5 MT, with 19.2 U$M revenues where
only 0.25% was graded as Specialty coffee from 2 Coffee washing stations (CWS) but in 2012 the
annual export was 19.9MT, 65 U$M and with 33% being specialty coffee from 215 Coffee washing
stations.

Figure 5: Export earnings in USD
Export earnings
90000000
80000000
70000000
60000000
50000000
40000000
30000000
20000000
10000000
0
1996 1997 1998 1999 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Compiled from NAEB report-2012
The new strategy to increase coffee export now emphasizes on increasing farm production and
productivity of coffee, enhancing value and assuring quality to increase demand and price on
national, regional and international markets. In addition it is required to improve business
operating environment through providing effective trade support services (Market information,
trade finance, product development/diversification, trade promotion, and standard compliance)
to enable export enterprises to operate better on international markets and enhancing inter-
institutional coordination and strengthen the capacity of cooperatives of coffee production.
2.4.2 Target Markets
Rwanda Coffee is well appreciated for its good cupping characteristics. It has excellent fragrance,
flavor, and medium acidity which make it being a preferred coffee at the international markets.
The transitional probability matrix using the market shares of Rwanda coffee exports to the major
importing countries computed has shown where coffee export should be focused. As it could be

seen in the table below, the potential markets for the coming years will be Germany, Switzerland
and Belgium where about 90 per cent of Germany’s previous share, 83.6 per cent of Switzerland’s
previous share and 80 per cent of the previous year’s to Belgium will be retained. Consumption
also in these countries is supposed to increase in the coming years.
Table 14: Transitional Probability Matrix of Coffee Exports
Belgiu UK USA Switzerla Italy Japan Norway Germany China Other

m nd Countri
es
Belgium 0.7961 0.0491 0.1222 0.0000 0.0000 0.0047 0.0020 0.0034 0.0000 0.0225
UK 0.0833 0.0000 0.0000 0.9007 0.0000 0.0000 0.0000 0.0000 0.0160 0.0000
USA 0.0000 0.0000 0.0000 0.7876 0.1710 0.0000 0.0000 0.0000 0.0191 0.0222
Switzerla
0.1637 0.0000 0.0000 0.8363 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
nd
Italy 0.0000 0.0000 0.0000 1.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
Japan 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 1.0000 0.0000 0.0000
Norway 0.0000 1.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
Germany 0.0000 0.0223 0.0000 0.0000 0.0000 0.0000 0.0828 0.8949 0.0000 0.0000
China 0.0000 0.0000 0.0000 1.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
Other
0.0000 0.8654 0.0000 0.0000 0.0000 0.1346 0.0000 0.0000 0.0000 0.0000
Countries
In addition:
 Global demand for coffee is supposed to rise: Growth is increasing by 2.4% annually and,
within 10 years; it is expected to be170 million bags in coming years.
 Consumption in emerging markets (such as China, Eastern Europe and Korea) is

increasing nowadays and is supposed to increase greatly in coming years.
 According to ICO reports worldwide prediction supply will not be enough to meet
projected demand,

2.4.3 Marketing plan and marketing strategy
RCG marketing strategy will include the use of targeted print media advertising and direct selling
to importers in the Germany, Belgium, Switzerland and other emerging markets who provide
green coffee to potential consumers. RCG will also make use of its already developed website as
advertising media. The company will also emphasize on existing relationship with European coffee
shops which use coffee from Africa. Where possible, there will be the use of promotional tools
for customers who are looking for milling service and by products. Green coffee will be also
promoted through direct sales calls to international roaster companies and by providing a quality
product at a cheaper price. Efforts will be mobilized to establish business relationship with roasted
and ground coffee distributers in China, Hong Kong, Korea, USA and many other countries in
Europe. Also, a strategy will be put in place to establish cooperation agreements to have toll
roasting plants at the market sites (i.e. in the above mentioned countries). As a result, this will
narrow down costs relating to roasting, packaging etc...
2.5 BUSINESS OPERATIONS
2.5. 1 Product Manufacture
Green coffee is processed from parchment coffee with coffee milling factory. It is a mechanical
process to get a product of a particular quality. The conversion rate from parchment coffee to
green coffee is about 80 percent. The remaining 20 percent are husks and bad products which
are used for other purpose. The milling service will be contracted to existing milling factories in
Kigali.
2.5.2 Raw material
The only raw material required is coffee cherries produced locally in Rusenyi coffee Zones in
Western Province. A partnership was established with different coffee farmers and cooperatives
to supply coffee on a regular basis. The collection centres and trained collectors will be used to
make sure that this process is done correctly. The main activities required to supply coffee
cherries to coffee washing station were described above. The purchasing and supply quantities
are detailed in economic and financial analysis

2.5.2 Quality Control
RCG Ltd will maintain a strict quality control of both incoming raw materials as well as the
finished processed green coffee before export.
2.6 Project Management
2.6.1 Non-discretionary budget requirements and Company organization chart
During normal operation, the company will require about 15 permanent personnel, many
casual/temporary staff and consultancy services from expert as required. IT system, insurance
and consumed utilities (electricity, watere tc). The table and figure below quantifies the operating
costs required to run the business and their estimated cost per unit.
Figure 6: Organization chart
CEO
Mr. BIGIRIMANA
Robert
Administrative
Operation Manager Assistant
Coffee Washing Consultance

Finance Department Internal Auditor
Station Managers (3) Services
Human Resource Coffee Procurement Staff and casual

Accountant Marketing Officer Technicians
Officer and Stock Controller labor
Driverss Store Keepers

Table 15: Estimated quantity of operational costs for Key Staff, IT and Utilities
DESCRIPTION NUMBER GROSS IN RWF GROSS IN EURO
Chief Executive 1 2,000,000 2286

Officer
Operation 1 1,500,000 1714

Manager
Expert 1 1,000,000 1143
Chief Finance 1 1,500,000 1714
CWS Manager (3) 1 600,000 686
Auditor 1 500,000 571
Accountant 1 500,000 571
Marketing Officer 1 500,000 571

Operating
HR 1 500,000 571
Costs
Procurement 1 500,000 571
Officer
Administrative 1 300,000 343

Assistant
Internet ff 500,000 571
Computers 10 8,000,000 9143
IT Systems Printers 10 3,000,000 3429
Photocopiers 5 2,500,000 2857
Consumables 500,000 571
Utility charges ff 200,000 229
Insurance ff 300,000 343
2.7 ECONOMIC AND FINANCIAL ANALYSIS
The economic and financial analysis of the business was based on some assumptions, local bank
conditions especially interest rate and local tax system. It includes capital costs, operating
expenses and revenues from green coffees sales. Generally, there are some start-up costs that
are due to the establishment of coffee farm, operationalization of three existing Coffee Washing

Station in Western Province, the procurement coffee cherries, packaging material for coffee
and day to day expenditures.
2.7.1 Assumptions
2.7.1.1 Plantation
 Land consolidation on 1500 ha, including 750 ha of coffee;

 Production of 7500 MT / year of cherries, from year 3
 Years 1 and 2: purchase of 4200MT / year of cherries (covered by working capital)
2.7.1.2 Fully washing coffee
 Three existing stations

 Treatment capacity of 7500MT / year of cherries over 26 weeks / year
 Production capacity of 1500MT / year of parchment coffee
2.7.1.3 Coffee Milling Factory
 Coffee washing station treatment capacity of 3125MT per year over 26 weeks / year
 Treatment of 1500MT / year of ex- Rusenyi (Parchment)
 So it is expected, a production of 1200MT per year of green coffee
 300MT / year (Triage)
2.7.1.4 Investments including working capital and interest

2.7.1.5 Interest rate of 8 % / year, repayment period in 15 years including 3 years grace period.
2.7.1.6 Positive gross operating income after three years
2.7.1.7. Net Present Value from the first year of operation
2.7.1.8 Currency conversion rate from Rwandan to euro was set to 875Rwf
2.7.1.9 Ratio equity loan is 20/80
2.7.2 Loan bank conditions
The interest rate of 8 percent was used to discount returns as the base rate of interest offered
by foreign banks for short and medium term loans in agriculture sector. All costs and
expenditures are calculated in Rwanda francs and converted into euro.

2.7.3 Local tax system
Tax on business profit was estimated on the basis of annual declaration of 30 percent and local
trading licence was set at Rwf 60,000 yearly. Annual NAEB Export licence was estimated at USD
100 which is equal to 83,000 Rwf.
2.7.4 Estimation of total operational costs
Operational costs calculated here include expenditures for staffing, utilities charges, insurance
and IT system. They are calculated annually, using unit costs presented in table 2 above. Some of
them are fixed, meaning that each cost is identical from month to month such as labor costs,
others are variable and may go up or down from month to month, such as consumed utilities.
The table below presents in detail the total operating costs required to run this business.

Table 16: Total operational costs
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Managem Chief Executive
ent Fees Officer 24,000,000 24,000,000 24,000,000 24,000,000 24,000,000 24,000,000 24,000,000 24,000,000 24,000,000 24,000,000
Operation Manager
18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000
Expert
12,000,000 12,000,000 12,000,000 12,000,000 12,000,000 12,000,000 12,000,000 12,000,000 12,000,000 12,000,000
Chief Finance
18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000
CWS Manager (3)

21,600,000 21,600,000 21,600,000 21,600,000 21,600,000 21,600,000 21,600,000 21,600,000 21,600,000 21,600,000
Auditor
6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000
Accountant
Opera 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000
ting
Marketing Officer
Costs 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000
HR
6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000
Procurement
Officer 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000
Administrative
Assistant 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000
IT Internet 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000
Systems
Computers 10 8,000,000 8,000,000
Printers 10 3,000,000 3,000,000
Photocopiers 5 2,500,000 2,500,000
Consumables 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000
SUB TOTAL 177,700,000 164,200,000 164,200,000 164,200,000 164,200,000 177,700,000 164,200,000 164,200,000 164,200,000 164,200,000

Utility
charge
s 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000
Insuran
ce 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000
TOTAL IN RWF
178,200,000 164,700,000 164,700,000 164,700,000 164,700,000 178,200,000 164,700,000 164,700,000. 164,700,000 164,700,000
TOTAL IN EURO 203,657 188,229 188,229 188,229 188,229 203,657 188,229 188,229 188,229 188,229
Table 17: RCG COFFEE PRODUCTION CAPACITY
ITERM Unit Base Year 1 Year 2 Year 3 Year 4 Year 5

PLANTATION
New coffee Plantation Ha 1,500 1,500 1,500 1,500 1,500 1,500
Existing coffee Plantation Ha 750 750 750 750 750 750
Planting density 2,500
Number of coffee trees Number 1,875, 1,875,00 1,875,00 1,875,00 1,875,00 1,875,00
000 0 0 0 0 0
Yield per tree kg / Year 4
Total production on existing Plantation MT / Year 7,500 7,500 7,500 7,500
Coffee Procurement(Cherries) T / an 4,200 4,200
COFFEE WASHING
Number of Coffee Washing Station 3

CWS Washing Capacity MT 16,025
Cherries/Day
Working period Week per year 26
Days per 6
Week
Real capacity CWS Green Coffee MT/Year 2,500
Total coffee Cherries production 7,500 4,200 4,200 7,500 7,500 7,500
Parchment coffee production (3CWS) MT/Year Ratio 5 1,500 840 840 1,500 1,500 1,500
MILLING FACTORY
Milling capacity MT 16,025
Cherries/Day
Working period Week per year 26
Days per 6
Week
Real capacity Milling factory MT/Year 2,500
Conversion ration 0,8
Installed capacity(Production parchment 3,125 3,125 3,125 3,125 3,125 3,125
coffee) MT/Year
SPECIALITY COFFEE
Parchment coffee production (3CWS) MT / Year 1,500 840 840 1,500 1,500 1,500
Ratio Green coffee/Parchment 0,8
Ratio Triage/ Parchment 0,20
Green Coffee per year T / Year 672 672 1,200 1,200 1,200
Triage per year T / Year 168 168 300 300 300
Remaining CWS Capacity T / Year 2,285 2,285 1,625 1,625 1,625
SALES
Specialty Coffee T / Year 672 672 1,200 1,200 1,200

Triage T / Year 168 168 300 300 300
Container MT 19,20
Containers/ 35 35 62 62 62
Triage Year
Containers/ 9 9 16 16 16
Container Year

Table 18: Investment in coffee plantation
PLANTATION UNIT QUANTITY UP/FRW UP/EUR TOTAL EUR
Land Consolidation Ha 1,500 382,813 437.5 656,250

Land preparation Ha 750 292,250 334 250,500
SUB TOTAL 906,750
Coffee seedlings
Purchase seedlings Seedlings 1,875,000 40 0.05 85,714
Plantation Seedlings 1,875,000 5 0.01 10,714
SUB TOTAL 96,428
Mulching
Purchase Themeda Ha 750 350,000 400 300,000
Plantation Ha 750 561,200 641 481,029
SUB TOTAL 781,029
Agri equipment and

materials Ha 750.00 115,000.00 131.43 98,571.43
SUB TOTAL 98,571.43
TOTAL PLANTATION
IN EURO 1,882,778.4
NB: The land Consolidation will help us to have more production at the third year hence since
farmers will have more production and will also get the support from us, it will also help farmers
to fill like owners of the project in general, to get more benefit from our support and the
government support in that area will be less because more of them will be removed in the
poverty.

Table 19: Investment in coffee Washing Station
MARA COFFEE WASHING STATION UP RWF UP EURO TOTAL PRICE

Drying tables U 100.00 545,504.00 623.43 62,343.31
Pre drying room U 0.00 2,068,600.00 2,364.11 0.00
Rehabilitation activities FFT 1.00 2,000,000.00 2,285.71 2,285.71
Store U 1.00 30,000,000.00 34,285.71 34,285.71
Nurseries FFT 1.00 53,437,125.00 61,071.00 61,071.00
Organic manure FFT 1.00 88,523,000.00 101,169.14 101,169.14
TOTAL MARA 261,154.89
RWAMIKO COFFEE WASHING STATION

Drying tables U 100.00 545,504.00 623.43 62,343.31
Pre drying room U 0.00 2,068,600.00 2,364.11 0.00
Store U 1.00 30,000,000.00 34,285.71 34,285.71
Nurseries FFT 1.00 53,437,125.00 61,071.00 61,071.00
TOTAL RWAMIKO 261,154.89
MPEMBE COFFEE WASHING STATION

Drying tables U 100.00 545,504.00 623.43 62,343.31
Pre drying room U 0.00 2,068,600.00 2,364.11 0.00
Store U 0.00 20,000,000.00 22,857.14 0.00
Nurseries FFT 1.00 53,437,125.00 61,071.00 61,071.00
TOTAL MPEMBE 241,130.09
RUSENYI COFFEE GROWERS (RCG)

Pick UP U 1 38,000,000.00 43,429 43428.6
U 4 2,800,000.00 3,200 12,800
Motorcycle AG100 U 3 3,000,000.00 3,429 10,286
TOTAL 66,514

Table 20: Financing plan
TOTAL TOTAL YEAR 0 1 2 3 4 5
RWF EURO
1
Investment
3,596,278,875 4,110,033 4,110,033
requirement
2
Interest 8% 287,702,310 328,803 328,803
3
Working capital 20% 719,255,775 822,007 822,007
4
Total 4,603,236,960 5,260,842 5,260,842
5
Equity 20% 920,647,392 1,052,168 1,052,168
6 Loan 80% 3,682,589,568 4,208,674

4,208,674
Loan Repayment plan in 15 years
Loan
4,208,674
4,208,674 4,208,674 4,208,674 4,208,674 3,857,950.98
Grace period in 3
years 12
350,722.82 350,722.82
Principal
4,208,674 4,208,674 4,208,674 3,857,951 3,507,228
Ending Balance
336,693.90 336,693.90 336,693.90 336,693.90 308,636.08
Interest
336,693.90 336,693.90 336,693.90 687,416.72 659,358.89
Total payment

Table 21: Amortization table
AMORTIZATION COST TIME YEAR

1 2 3 4 5
Plantation
LAND 906,750 0 0 0 0 0 0
Seedlings 96,429 30 3,214 3,214 3,214 3,214 3,214
Mulching 781,029 30 26,034 26,034 26,034 26,034 26,034
Equipment 98,571 10 9,857 9,857 9,857 9,857 9,857
CWS
Mara 261,154.89 15 17,410 17,410 17,410 17,410 17,410
Rwamiko 261,154.89 15 17,410 17,410 17,410 17,410 17,410
Mpembe 241,130.09 15 16,075 16,075 16,075 16,075 16,075
RCG
Other assets 66,514 5 13,303 13,303 13,303 13,303 13,303
Milling Factory
Land 108,221 0 0 0 0 0 0
House 385,202 25 15,408 15,408 15,408 15,408 15,408
Equipements 141,517 15 9,434 9,434 9,434 9,434 9,434
Other miscellaneous
equipment 71,325 5 14,265 14,265 14,265 14,265 14,265
Total Amortization 5,342,877 142,412 142,412 142,412 142,412 142,412

Table 22: Projected income Statement
UN
Year UP 2,017 2,018 2,019 2,020 2,021 2,022 2,023 2,024 2,025 2,026
IT
MT
/
Specialty Coffee
YEA 672.00 672.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
R
MT
/
Triage
YEA 168.00 168.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00
R
C MT
AS Milling Service
/
H (50% remaining
YEA 2,285.00 2,285.00 1,625.00 1,625.00 1,625.00 1,625.00 1,625.00 1,625.00 1,625.00 1,625.00
IN capacity)
R
FL
O Specialty Coffee Eur/ 3.20 2,150,400.00 2,150,400.00 3,840,000.00 3,840,000.00 3,840,000.00 3,840,000.00 3,840,000.00 3,840,000.00 3,840,000.00 3,840,000.00
W Kgs
Triage Eur/ 1.80 302,400.00 302,400.00 540,000.00 540,000.00 540,000.00 540,000.00 540,000.00 540,000.00 540,000.00 540,000.00
Kgs
Milling service
Eur/ 0.06 62,837.50 62,837.50 44,687.50 44,687.50 44,687.50 44,687.50 44,687.50 44,687.50 44,687.50 44,687.50
60FRW/kg
Kgs
Total Cash in
EU 2,515,637.5 2,515,637.50 4,424,687.50 4,424,687.50 4,424,687.50 4,424,687.50 4,424,687.50 4,424,687.50 4,424,687.50 4,424,687.50
Flow
R
Crop
maintenance ha 656,250.00 656,250.00 656,250.00 656,250.00 656,250.00 656,250.00 656,250.00 656,250.00 656,250.00 656,250.00
Harvesting and
maintenance 250,500.00 250,500.00 250,500.00 250,500.00 250,500.00 250,500.00 250,500.00 250,500.00 250,500.00 250,500.00
ha
C
MT
AS Purchase of
/
H coffee (First two 4,200.
YEA 960,000.00 960,000.00
O years) 00
R
U
T Plantation 976,028
FL
O CWS MARA
261,155
W
CWS
RWAMIKO 261,155
CWS MPEMBE 241,130
Pick up& Ag 100
66,514

Management fee
Chief Executive
Year
Officer 27,428.57 27,428.57 27,428.57 27,428.57 27,428.57 27,428.57 27,428.57 27,428.57 27,428.57 27,428.57
ly
Operation
Year
Manager 20,571.43 20,571.43 20,571.43 20,571.43 20,571.43 20,571.43 20,571.43 20,571.43 20,571.43 20,571.43
ly
Expert Year
13,714.29 13,714.29 13,714.29 13,714.29 13,714.29 13,714.29 13,714.29 13,714.29 13,714.29 13,714.29
ly
Chief Finance Year

20,571.43 20,571.43 20,571.43 20,571.43 20,571.43 20,571.43 20,571.43 20,571.43 20,571.43 20,571.43
ly
CWS Manager (3) Year

24,685.71 24,685.71 24,685.71 24,685.71 24,685.71 24,685.71 24,685.71 24,685.71 24,685.71 24,685.71
ly
Auditor Year
6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14
ly
Accountant Year
6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14
ly
Marketing Officer Year

6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14
ly
HR Year
6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14
ly
Procurement
Year
Officer 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14 6,857.14
ly
Administrative
Year
Assistant 4,114.29 4,114.29 4,114.29 4,114.29 4,114.29 4,114.29 4,114.29 4,114.29 4,114.29 4,114.29
ly
Store keeper Year

ly 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57
Machine
Year
operators (2)
ly 8,228.57 8,228.57 8,228.57 8,228.57 8,228.57 8,228.57 8,228.57 8,228.57 8,228.57 8,228.57
Secretary Year
ly 2,742.86 2,742.86 2,742.86 2,742.86 2,742.86 2,742.86 2,742.86 2,742.86 2,742.86 2,742.86
Security guard (4
Year
people)
ly 3,840.00 3,840.00 3,840.00 3,840.00 3,840.00 3,840.00 3,840.00 3,840.00 3,840.00 3,840.00
Workers team
Year
leaders (4 people)
ly 5,485.71 5,485.71 5,485.71 5,485.71 5,485.71 5,485.71 5,485.71 5,485.71 5,485.71 5,485.71
Casual labor ( 35
X156 days) 546 12,480.00 12,480.00 12,480.00 12,480.00 12,480.00 12,480.00 12,480.00 12,480.00 12,480.00 12,480.00

0
days
Electrician Year
ly 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57
Mechanical
year
technician
ly 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57 3,428.57
Other machine
9mo
operator (2)
nths 3,150.00 3,150.00 3,150.00 3,150.00 3,150.00 3,150.00 3,150.00 3,150.00 3,150.00 3,150.00
Warehouse
casual labor (20) 10,697.14 10,697.14 10,697.14 10,697.14 10,697.14 10,697.14 10,697.14 10,697.14 10,697.14 10,697.14
Customer care
Year
officer
ly 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00
Driver Year
ly 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00
Consumables
Electricity Year
ly 1,142.86 1,142.86 1,142.86 1,142.86 1,142.86 1,142.86 1,142.86 1,142.86 1,142.86 1,142.86
Water Year
ly 457.14 457.14 457.14 457.14 457.14 457.14 457.14 457.14 457.14 457.14
Fuel Year
ly 13,257.14 13,257.14 13,257.14 13,257.14 13,257.14 13,257.14 13,257.14 13,257.14 13,257.14 13,257.14
Office rent Year

ly 13,714.29 13,714.29 13,714.29 13,714.29 13,714.29 13,714.29 13,714.29 13,714.29 13,714.29 13,714.29
Office fanutures
Year
and Stationaries
ly 17,142.86
IT EQUIPMENTS
Internet Year 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857
ly
Computers 10 Year 9,143 9,143

ly
Printers 10 Year 3,429 3,429

ly
Photocopiers 5 Year 2,857 2,857

ly
Consumables Year 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857
ly

Insurance
Houses
1767.0 1767.0 1767.0 1767.0 1767.0 1767.0 1767.0 1767.0 1767.0 1767.0
Products 1431.0 1431.0 1431.0 1431.0 1431.0 1431.0 1431.0 1431.0 1431.0 1431.0
Other equipment 2285.7 2285.7 2285.7 2285.7 2285.7 2285.7 2285.7 2285.7 2285.7 2285.7
Others
Intrest and
Principal 336,694 336,694 336,694 687,417 659,359 631,301 603,243 575,185 547,128 519,070
142,412 142,412 142,412 142,412 142,412 142,412 142,412 142,412 142,412 142,412
Amortization
Total
Operational 4,446,727 2,608,174 1,648,174 1,998,897 1,970,839 1,958,209 1,914,723 1,886,665 1,858,607 1,830,550
Costs
Total Returns (1,931,090) (92,536) 2,776,514 2,425,791 2,453,849 2,466,478 2,509,964 2,538,022 2,566,080 2,594,138
69 69 69 69 69 69 69 69 69 69
Trading license
NAEB License 97 97 97 97 97 97 97 97 97 97
Tax on profit 30% (579,377) (27,811) 832,904 727,688 736,105 739,894 752,940 761,357 769,774 778,192
1,757,025 1,776,665 1,796,306 1,815,946

Returns after
(1,351,713) (64,726) 1,943,609 1,698,103 1,717,744 1,726,584
taxes
- 1 2 4 5 6 7 8 9 10
Discount factor
at 15% 1.000 0.926 0.857 0.735 0.681 0.630 0.583 0.540 0.500 0.463
Discounted (1,351,713) (59,931) 1,666,332 1,248,157 1,169,068 1,088,041 1,025,207 959,877 898,600 841,134
Returns
(4,208,674) (4,268,605) (2,602,273) (1,354,117) (185,049) 902,992 1,928,199 2,888,076 3,786,676 4,627,810
Repayment Plan
6 years
Payback Period
4,627,810
Total NPV

2.8 Financial and Economic Viability (NPV and IRR)
The Net present value is the difference between the present value of cash inflows and the present
value of cash outflows. This is used in capital budgeting to analyze the profitability of a given
investment. A positive net present value indicates that the project earnings generated by a project
or investment exceeds the anticipated costs. The formula used here to calculate NPV is
Where:
 Ci : Net cash inflow during the period t

 Co : Total initial investment costs
 r : Discount rate
 t : Number of time periods
Based on the resultant cash flow as indicated in table above, the total Net Present Value after 10
year is USD 4,627,810. The Net Present Value at different Discount Rates shows the following
Net Present Values at Different Discount Rates
NPV @ 11.00 % 117,085 USD
NPV @ 11.54% 0
NPV @ 16.00% (833,269 USD)

The Internal Rate of Return (IRR) considering only heavy investment is 11.54% .This means
that the project is viable at discount rate equal or below 11.54 percent
2.8. Tactics and Strategy for growing the business
The objective here is to increase the total sales volume to get maximum profit. The company will
exploit all business opportunities and will be updated about all new technologies. If necessary,
the scale economy will be used.
The products-market matrix will be helping to penetrate present and new markets. We have to
remember that this is profitable only when the increased output can be sold at good prices.
Table 23: products-market matrix
Present New
Present Market Penetration Product development
(Penetrate existing markets (Introduce new products in
with existing products) existing markets)
New Market Development (Enter Diversification
new markets with existing (Introduce new products in
Products) new markets)

2.9 Risk analysis / Mitigation
Type Description of risk Mitigation
Business Risk The volatility of prices on Apply an average price that

the local market favours better supply from
farmers but also provides to
the project owner a margin
capable to face the risk
Environmental risk Climatic change that can Sensitize farmer to plant

cause diminution of agroforestry will mitigate
production, soil erosion due this risk
to extensive culture Training of local farmer on
Good agriculture practices
PART III: FUTURE INVESTMENT IN MILLING FACTORY
The idea of establishing a coffee milling factory came to respond to the difficulties encountered
to access the services of drying and milling the produced coffee for export. This was because it
was regularly registered coffee losses due to the delay of almost two months in gaining milling
services.
In view of the coffee future development in the next few years, it was planned to set up a milling
factory the only way of avoiding the same difficulties, it was envisaged to build a unit of unblocking.
In addition, the establishment of small Coffee Washing Stations throughout the country will also
require quality services, preferably close to the production sites by installing a milling factory.
In Karongi District, there are almost more than 8 Coffee Washing Stations including that of
Mpembe and Mara.
At present all these CWS are obliged to carry their production to Kigali in order to have this
milling service.

With an estimated production of 500 tons, we can expect some savings resulting from waste
transport estimated at 2,000,000 Rwf equivalent to Euro 2,285.7 (500,000 kg x 20% x 20 Frw /
kg). We can add to this amount the cost of the drying service, which is 30 Frw / kg, that is to say
a total euro 17,143 (15 Million) spent in Kigali. This will be a good way to inject the money into
the regional financial resources where this production is originated.
To ensure the full capacity service of the unit, it will be preferable to source the coffee and
provide milling service to coffee washing station areas other than those of Mara and Mpembe.
The milling factory will be installed in Karongi city, Karongi district where it is easy to find useful
facilities (electricity, technicians, workshops, etc.) for the operation of the machines. It should be
noted that the city of Karongi is easily accessible from all sides of the province by road as well as
by the lake. The unit will therefore be well positioned to receive most of the coffee, especially
since it is at the crossroads of the most productive and transit areas of the products.
The negotiations with the District to get the plot for construction was completed.
The following actions have been initiated:
o Contact with a equipment supplier who is ready to finalize the offer;

o Negotiation with one of the parchment coffee collectors in areas of Karongi and
Rutsiro to supply the factory. They are ready to sign supply contract;
o Contact with technicians to hire once the operations are started
3.1 Architectural design of Milling Factory in Karongi District

3.2 Estimated area for the planned Unit
3.3 Site map and location
Towards Mpembe/ Mara

4. POSITIVE IMPACT OF THE PROJECT
The establishment of RUSENYI Coffee Growers project will have many advantages to the local
community in terms of boosting trade and commerce, improved social services like education
and health, access to clean water and electricity, improved communication by road and improved
environment which will be achieved by agroforestry and coffee planting.
Approved by: Signature
RUSENYI COFFEE GROWERS ------------------------------

BIGIRIMANA ROBERT
Project Coordinator Date:…………………….

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RUSENYI COFFEE GROWERS

1 PROJECT NAME RUSENYI COFFEE GROWERS PROJECT

2 NAME OF THE Mr. BIGIRIMANA Robert

3 CONTACT  Email: bigirarobert@gmail.com

4 LOCATION  RUSENYI Coffee Zone

2 | RUSENYI COFFEE GROWERS BUSINESS PLAN

3 | RUSENYI COFFEE GROWERS BUSINESS PLAN

The objectives of the company are to:

Partnerships and Finance Plan

4 | RUSENYI COFFEE GROWERS BUSINESS PLAN

PRERIMINARY INFORMATIONS ................................................................................................................2

5 | RUSENYI COFFEE GROWERS BUSINESS PLAN

Table 1: Number of trees and area covered by coffee ............................................................................9

6 | RUSENYI COFFEE GROWERS BUSINESS PLAN

Figure 1: EDPRS Targets for coffee ........................................................................................................... 10

7 | RUSENYI COFFEE GROWERS BUSINESS PLAN

1.1 Coffee Production

1.1.1 Semi-Washed coffee or Ordinary Coffee

Today, agriculture strategic papers emphasizes on production of "Specialty coffee”. NAEB

8 | RUSENYI COFFEE GROWERS BUSINESS PLAN

1.1.2. Fully Washed coffee

1.1.3 Characteristics of coffee production and area covered by coffee

Table 1: Number of trees and area covered by coffee

SN Province Number of coffee Trees Area Covered (Ha)

9 | RUSENYI COFFEE GROWERS BUSINESS PLAN

1.1.4. Soil characteristics in intervention area

There are different types of soils such as:

 The schisto-sandstone rocks which yielding yellow-brown clay alliterated products

10 | RUSENYI COFFEE GROWERS BUSINESS PLAN

In the case of mature coffee trees

11 | RUSENYI COFFEE GROWERS BUSINESS PLAN

1.1.5 Coffee Varieties available in the country

1) Bourbon Mayaguez 139 (BM 139)

12 | RUSENYI COFFEE GROWERS BUSINESS PLAN

1.1.6 Statistical data on coffee in Rwanda

Roasted 7.9 9.6

13 | RUSENYI COFFEE GROWERS BUSINESS PLAN

Table 3: Current Status of Coffee Sector

1 Number of Coffee Producer 355,771

2 Area Planted 35,891

3 Number of trees 89,726,809

4 Yield per tree 3-4

5 Estimated production (MT) 16,936.2

6 Number of CWS 245

7 Percentage of full washed 54.4

8 CWS Utilization capacity of operated CWS (%) 95

9 Number of Coffee cooperatives with legal personality 198

10 Number of cooperatives owning a CWS 89

Table 4: Distribution of Coffee trees in Western Province

WEST 29,888,577 1,587,775 1,909,836 19,952,895 6,438,071

14 | RUSENYI COFFEE GROWERS BUSINESS PLAN

SN Description 2013 2014 2015 2016 2017

SN District Number of coffee Coffee trees Coffee trees not

1 Karongi 3,325,989 900,456 2,425,533

100 27.07 72.93

2 Ngororero 998,677.00 441,976.00 556,701.00

100.00 44.26 55.74