On behalf of a client, Navigator is recruiting an independent agribusiness consultant who can undertake a confidential due diligence on a large-scale greenhouse investment project.
This project includes the construction of a covered area of 5 hectares in a cold climate, northern European country, and production of tomatoes intended for export to a single large customer in an EU country. The investment sponsors include companies already producing tomatoes in similar greenhouses, but on a smaller scale.
The project includes a number of technical and financial and operational risks which must be clarified by the agribusiness consultant, including the following:
What production yield should be assumed for the tomato varieties planned, and is there a ramp-up period to full productivity?
What sensitivities should be assumed in terms crop losses due to plant diseases other factors?
What alternative sales arrangements exist rather than those foreseen in the current business plan? Are the prices per kg foreseen in the business plan realistic?
Are the construction costs for the greenhouse accurately priced? Does the greenhouse design and technical specifications correspond to international norms and the specific operating conditions in the country of production?
The main objective of the Consultant during this phase is to assimilate the technical and commercial aspects of the Project as presented by the Sponsor. The Consultant will verify the different aspects of the Project to come out with a list of assumptions that are to be used jointly with a financial advisor to accurately model the economics of the whole business. The Consultant, along with a financial advisor and possibly a legal/transaction advisor who will be assigned by the Investor, will further assist the Investor in submitting a proposal to the Sponsors and negotiating with the later specific deal conditions.
The Consultant will review aspects of the Project related to development and operations phases at a level of details seen necessary to accurately model the business. This includes accurately establishing the cost and time required for construction and commissioning of the Project. It also includes accurately defining and pricing the production running cost and facility management of the Project during operations phase. It also includes studying proposed marketing and selling prices and analyzing demand and supply in selected market(s) to accurately model the revenue of the Project through its life span.
The Consultant will propose best marketing strategy to follow based on their market study. Within the above, the Consultant may need to run several scenarios with the financial advisor to come up with a plan that results in best return and is of least risk. The Consultant will further study exit strategies available to the Investor; this may include the possibility of exiting through an IPO or direct equity liquidation at certain stage in the future.
During this phase, the role of the Consultant is also to work with all concerned parties to ensure that all the technical activities such as preliminary planning studies, facilities architecture, design and detailing, procurement, construction, commissioning, and maintenance of the facilities are all consistent and accurately planned and priced into the financial model. The Consultant will then work with the financial advisor to run sensitivity and scenario analysis and report findings as will be necessary for the Investor decision making as previously described and within the scope below.
The interaction with the main parties during this phase shall be directly with each of the Investor, other advisors (legal and financial), and the Sponsors. The Consultant shall remain available to represent the Investor in meetings, conference calls, site visit, or other as seen necessary when required.
The assignment of the Consultant extents through the period ending by decision making and commitment to invest. This period, though believed to not take more than 3 months, may expand for longer time. During which, the Consultant will remain available to be asked for updates of the original report, stay available to answer any question that may arise, or attend meetings and conference calls.
The Consultant’s role will be to:
Review all technical aspects of the studies prepared by the Sponsor and initiate any technical inquiries to the Sponsor and other related parties.
Investigate, validate, and estimate the different technical assumptions related to the Project’s concept, development requirements, design and build specifications and cost, country and agribusiness assessment, operating cost, the choice of the crop to be produced, marketing plans and strategies, selling prices, demand and supply assessment for the country of production and selected export markets, etc.
Review and validate technical assumptions related to operations such as, but not limited to, the cost, type, and use of seeds and fertilizers, the assumed production yield, and the consumption of water, heat, and power.
Budgeting (assisted by the Sponsor and contractors, and equipment suppliers)
Comment on basics of value engineering for the Project (concept and basic design iterations and adjustments) and design optimization.
Comment on the basic specifications for facilities construction and listing of equipment, and identifying sources of equipment for pricing.
Comment on the design specifications and details to facilitate accurate and firm pricing by contractors.
Final review of D/B Contractor and MEP subcontractor offers for technical compliance and completeness.
Compiling an assumptions book to include assumptions for all aspects of the project (see previous points) with proper references and explanations.
Support the feasibility analysis work (work with the financial advisor to provide cash flow plans for the D/B, maintenance schedules, and operations phase). Within such, the Consultant will communicate directly with the financial advisor with input necessarily for the later to build a financial model for the business and other analyses as deemed necessary.
Support the Investor and Legal Advisors to establish the D/B contract terms, study market conditions, applicable incentives, and other transaction advisory work.
Attend sessions with Sponsor, Investor, and other advisors to communicate and present the findings of the technical aspects above and receive feedback.
Comment and provide guidance if needed in relation to development plan, marketing plan, and operating plan.
Study different sources of material suppliers in the country of production and potential ways of cost efficiency and business optimization.
Take part in site visits, investigation, and tests as when needed.
Any necessary and related activity to the above listed activities.
Consultants submitting proposal scope and commercial terms in response to this document are required to comply with the following guidelines. The proposal shall be in English language and shall include:
Description of the organization and method/process to be implemented by Consultant
Identification of major issues likely to concern the transaction
Designation of core team, experience and references of the team to carry out the mandate for its duration, focusing on similar transactions in the region and abroad
Description of the fee structure and payment terms, refer to fee structure section below
Deliverables summary and delivery schedule
The name of the person to contact for questions or discussions
Consultants are requested to confirm their ability to act as agricultural advisor on an exclusive basis. Upon signature of an NDA, a specific confirmation is requested that
There is no conflict of interest to act as Consultant for the Investor
Consultant does not represent or assisted any other investor or public authority in relation to the Project
Consultant does not and will not assist any of the Supplier, Distributer, or Sponsor in relation to the Project
Consultant is not representing or advising any of the Current Partners and that the Consultant is not conflicted in regards to the Project
Fees should be quoted in US Dollars and exclusive of VAT and any other taxes that may apply.
Fee should be quoted for the phase reaching commitment to invest date as described below. Further assignments will be subject to separate agreement and fees to be agreed upon then.
Interested parties are requested to send their detailed proposals and CVs to Philip Ammerman, email@example.com, by Friday, 8 March 2013.