Hi Ryan,
This is going to sound a little strange, but both my girlfriend and I, days apart, had dreams where we were shown that it would be good to invest in African seeds. It was clear in both dreams that it had something to do with actual plant seeds.
I’ve never received investing advice in a dream before, but when my girlfriend had the same advice in her dream, after not knowing anything about my dream, I started to wonder.
Anyway, I’ve been doing some reading on what is happening with the seed industry in Africa (and the world) and I’ve now become very interested in this topic. It seems to me that there is a growing demand for non-GMO seeds, and I think Africa could have a lot to do with this shift in attitude.
Do you have any advice for a would-be African seed commodity investor? I have about $10,000 that I keep freed up as high-risk money.
Sincerely,
Seedless in Seattle
Hi Seedless,
I believe it may actually be possible to make your dream a reality.
Seed Co Limited claims to be Africa’s leading seed company, and its shares trade on the Zimbabwe Stock Exchange. They develop and market a wide variety of crop seeds (maize, wheat, cotton, and soya) in 15 African countries. Their operations are concentrated in Southern Africa with Zimbabwe, Zambia and Malawi accounting for more than 80% of revenue. Seed Co’s goal, however, is to “dominate agro-industry” on the continent, so they’ve recently been making moves into Eastern and Western Africa, too.
While the company does not appear to have a strict stance against GMO seeds (they have a research agreement with Monsanto), Zimbabwe has banned GMO seeds, and the company’s chief executive recently said that GMO seeds aren’t a panacea for raising crop yields.
But before you wire money to Zimbabwe, keep the following in mind.
In the company’s 2013 fiscal year (which ended on March 31), earnings per share dropped a gut-churning 35%. This resulted, in large part, from a sharp reduction in grain seed sales due to low commodity prices and power supply problems, and from the dramatic revaluation of the Malawian kwacha. These things are largely out of management’s control, but such wild reversals in fortune are something to steel yourself for if you intend to become a shareholder. I’d hate for your dream to become a nightmare.
Seed Co’s share price has dropped over 9% so far this year and now sports a P/E ratio of 10.6. Management has not yet announced a 2013 dividend, but if it remains at the same level as last year (not a certainty), the stock’s yield would be 2.4%.
Because the company’s 2013 results have just been released, I’d watch the stock’s price closely over the next few weeks. A big drop might offer a nice buying opportunity, and, if management maintains the dividend at current levels it could signal confidence in improved results for 2014.
If you’d like to buy Seed Co stock, you’ll need to open an account with a Zimbabwean stock broker. You can find more info on that right here.
Happy investing!
Ryan
Dear Seedless,
I think Ryan has clearly indicated in his statement that seed co Ltd has dominated the Southern and Western African regions. To both Ryan and you, would it be prudent to invest in a market that is already saturated? Why can’t you take advantage of the Eastern African Market whose staple food(maize/corn) is on the brink due to lack of resistant seeds for production of the same. In the Kenyan Market where I come from for instance, the 2 major seed producers; Kenya Seed Co Ltd and Western Seed Company Ltd are in the field doing all kind of research to find a lasting panacea. I would kindly advise that you try through the relevant stakeholders the Kenyan Market and the Return on your Investment is going to be amazing.
http://www.seedco.co/investor-center.html – here is their investor relations section – register to receive alerts from the company and digest in detail recent news. Earnings are down in the short term but when you consider how this company emerged from the hyperinflation of Zimbabwe and that +60% of their earnings are from Africa outside Zimbabwe Ryan’s suggestion that it may be the right time to buy is worthy of consideration
Dear Seedless,
Perhaps of assistance to you in your research into how to invest in African seed companies, we have available for purchase a comprehensive sector report on the Kenyan Seed and Pesticide sector. Our independent research house is based in Africa, and has been performing industry analysis for over 30 years. This report runs to 92 pages, and is a detailed bottom up analysis of these sectors in Kenya. It is the most thorough and comprehensive analysis of this type available. Our report covers the activities of 26 companies within these sectors in Kenya.
Please get in touch if you would like to know more.
Lisa
Hi Lisa
I am very interested in the agriculture sector in Kenya. Can you send me your report ?
Thank you
Best regards
Christian
Hi Christian,
Thank you for your interest in our report. As I explained, our report is available to purchase. If you would like more information or to make a purchase, please email me at lisa.sanderson@gatestreetafrica.com.
Best wishes
Lisa
Hi Christian
Thank you for your interest in the agricultural sector in Kenya. It is the right choice since seed co Ltd has dominated the Southern and Western African regions. Probably you have already gotten some best offers in the Kenyan region but i hope am not too late to invite you for some best offers,mostly coffee in the Highlands of Kisii in Kenya. If interested,call me on +254700547139/
Thank you Lisa
What is the cost of the report ?
Best regards
Christian
Dear Christian,
Please would you email me directly on lisa.sanderson@gatestreetafrica.com so that I may give you a price and inform you further as to content.
Kind regards
Lisa
Why not try the new country of South Sudan where there is so much good virgin land available . This could be used by aspiring seed producers in Africa who want good isolation in order to get good original seeds. Many Countries suffer isolation constraints due to availability of land and increased population pressures. We don’t have that problem here in South Sudan and have started producing seeds locally.
I’ve heard that there are a wealth of business opportunities in South Sudan for the bold. Godfrey, do you know whether there are any plans afoot for a S. Sudan stock exchange? Are there any other mechanisms by which foreign investors can participate in the country’s growth?
Hi
As for a stock exchange it is early days yet as infrastructure for such will take some time. The country is only 2 years old as of 9th July 2013.
Sure, there are a wealth investment opportunities here. Early birds will certainly be successful as competition is less. Moreover, The country needs almost every thing. About all are imported. Key areas are in Agri-business, infrastructure development, real estate etc., just to name a few.
Dear Godfrey,
I am a 26 year old student from Vienna, Austria, and thinking about going on a motorcycle trip next year after finishing my studies (History and International Development) which would take me from Zimbabwe over Mocambique, Tanzania, Kenya all the way up to Ethiopia. Part of that travel includes the search for an ideal spot for starting a small business that a friend and I have been daydreaming about a lot over the last years. Our dream would be to build up a perma-culture farm that feeds us and employees and in a near future includes accomodation for tourists and travelers. What I have read here about the South Sudan sounds very interesting. Easy investment access, fertile soil and an intact natural environment including healthy wild live populations would be the main points we are looking for..
I would be happy if you or anyone on this forum has ideas, advice or any thoughts which he or she would like to share with me about such a project 🙂
Greatings and all the best, Leon