Netafims Financial Solutions for Smart Irrigation Solutions Elad - - PowerPoint PPT Presentation

Netafim’s Financial Solutions for Smart Irrigation Solutions

February, 2017

Elad Levi – Commercial Manager, Netafim Africa

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Agenda

Confidential

• Netafim at a glance & Drip Irrigation
• Financing solutions by Netafim

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Netafim - 50 years of shaping the future of agriculture

Confidential

Founded in 1965 
 by Farmers for Farmers

In the desert area of kibbutz Hatzerim, which suffered from a 
 severe lack of water. Introduced Drip Irrigation to the world #1 The Largest Irrigation

Company in the world

Continues to lead the Drip Irrigation revolution, offering end-to-end smart irrigation solutions

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Evolved to be the global leader of the irrigation industry

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MANUFACTURIN G PLANTS

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SUBSIDIARIES

110+

COUNTRIES

4,400+

EMPLOYEES HQ IN ISRAEL

~30%

MARKET 
 SHARE

Confidential

~$900M

ANNUAL SALES*

* Estimate for 2016

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Selected irrigation projects

Confidential Peru - Olmos 8,000 Ha Center Pivot project including BWS Senegal - CSS 3,500 Ha of drip irrigation including BWS India - Ramthal 11,700 Ha community irrigation, involving 6,700 framers Ethiopia - Wolkaite 7,000 Ha of drip irrigation including BWS Swaziland - Simunye 11,500 Ha of drip irrigation Brazil - Agrovale 5,000 Ha of drip irrigation project Mexico – Los Pinos 540 Ha Net house & 80 Ha Greenhouse project Brazil – Annually 6,000 Ha of drip irrigated coffee Vietnam – Total >1,000 Ha of drip irrigated coffee Tanzania – >1,000 Ha of drip irrigated coffee

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Full irrigation solution – from water source to tree’s roots

Confidential 6

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Drip Nutrigation™ - 95% efficiency of nutrient App. (vs. 30%-60%)

Confidential 7 7 Confidential

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Drip Nutrigation™ - Netafim’s Solution for Coffee

Confidential

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!

Uniram RC Dripnet PC

On-Surface Drip Irrigation

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Confidential

Uniram AS

Sub-Surface Drip Irrigation

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Drip Nutrigation™ in coffee starts from the very beginning

Confidential 11 11 Confidential

Nursery Young Trees

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Drip Nutrigation™ - Irrigate the plant – not the soil

Confidential 1212 Confidential

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Drip Nutrigation™ - Uniform flowering

Confidential 1313 Confidential

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Drip Nutrigation™ - Optimized uniformity (>95%)

Confidential 1414 Confidential

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Drip Nutrigation™ - yield comparison (Brazil 2014)

Confidential 1515 Confidential

Rainfed Drip Nutrigation

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Drip Nutrigation™ - optimized results

Confidential 1616 Confidential

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Coffee - yield comparison

Confidential 17

East Africa- Kenya, Tanzania, Zambia, 2013 Arabica, Averaged yield (Kg) per Ha.

* Small holders in the forest Dry land - commercial 9ft X 9ft. 800-1000 Kg/Ha Drip Nutrigation – 1800-3000 Kg/Ha

Vietnam, 2013 (since 2010) Robusta, Averaged yield (Kg) per Ha Smallholders Drip Nutrigation 2750 1900

* Small holders ~1ha, Basin or OH irrigation 1800-2000 Kg/Ha Drip Nutrigation 2500-3500 Kg/Ha

+294% +71%

Smallholders Dry Land Drip Nutrigation 2150 900 400

17 Confidential

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Agenda

Confidential

• Netafim at a glance & Drip Irrigation
• Financing solutions by Netafim

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Netafim’s financing map

Confidential

EH SH D L L NBFC ECA

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Netafim’s financing map

Confidential

EH SH D L L NBFC ECA

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Netafim’s financing map

Confidential

Arthur J. Gallagher

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Suppliers’ Credit

Financing Package

▪ Customers: corporates/ dealers ▪ Minimum transaction: 300k USD ▪ Tenure: up to 5 years (door to door) ▪ Terms: 20% down payment; L + ~5% + single-time financing costs

Preconditions

▪ Recent 3-years audited financial statements ▪ Company has a track record of success (not SPV) ▪ Sales, profitability and assets are in positive trend ▪ Total transaction value does not exceed ~20% of the company’s turnover and/ or ~50% of company’ Equity ▪ Company’s existing debt leverage is reasonable ▪ Agreement and installments are US dollar based ▪ Company demonstrates strong capabilities to succeed in its agriculture operations

Contract Debt Agreement

Customer Bank

Debt Transfer Debt Payment

Process Flowchart Advantages

✓ Free of collateral financing ✓ Debt is not registered in the company’s credit lines ✓ Ordinary commercial agreement

Fast and efficient process!

Suppliers’ Credit

Project Description NBI

Documentation

Debt Sale Funds Transfer

1. Transaction Information (Application form)

• Buyer : Customer name & address , profile, and

updated financial statements

• 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)

5. Funds Transfer

Netafim managed to finance >150m USD worldwide!

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Buyers’ Credit

Financing Package

▪ Customers: big corporates/ gov. ▪ Minimum transaction: 10m USD ▪ Tenure: <10 years (door to door) ▪ Terms: ~20% down payment; L+ ~3% + single-time financing costs

Preconditions

▪ Sovereign Guarantee OR ▪ Audited financial statements of recent 3-years ▪ Company’s financial statements are very strong, demonstrate positive trend and legacy of success

Contract Guarantee

Buyer Bank

Risk Sharing

Process Flowchart Advantages

✓ Available in emerging countries ✓ Lucrative interest rates ✓ Flexible payment terms

Full solution for the customer

Governments/ Corporates Seller

Loan AGMT

Israel’s ECA Ministry of Finance

Guarantee

Buyers’ Credit – Government of Ethiopia

(Sugar Corporation / ETHIOPIA (State owned :Buyer Ministry of Finance, The federal democratic republic of Ethiopia :Guarantor .Netafim Ltd :Seller Turn key project of 7,000 ha infield irrigation including bulk water .supply Tigray region, N. Ethiopia Water supply Tekeze & Zarriema river Project :Description M 200 USD~ :Amount .Within 18 month from contract signature Deliveries & :Installation years 10 :Tenor 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 :Financing Part #1 - Export Facility / Insured by ASHRA & backed by private insurance Part #2 - Commercial Facility / insured by private insurance :Insurance

THANK
 YOU