Prospectus for Springdale Vegetable Co-operative Society Limited
10-Year Debenture Issue

Introduction

Springdale Vegetable Co-operative Society Limited (Springdale Co-op), based in Domboshava, Bindura, Zimbabwe, is a community-driven agricultural cooperative with a membership primarily composed of women village farmers. Dedicated to empowering rural women and enhancing Zimbabwe’s agricultural productivity, Springdale Co-op provides a sustainable income source for its members by facilitating the growth, purchase, and export of high-quality vegetables. To expand its operations and add value to its products, the co-operative is raising funds through a 10-year debenture issuance, with an attractive fixed annual interest rate of 35%. The proceeds will support the construction of a vegetable freezing plant, initial capital to purchase vegetables from member farmers, and related operating expenses.

Project Overview

The primary objective of this financing is to establish a state-of-the-art freezing facility in Domboshava, which will enable Springdale Co-op to process and preserve its produce, extending shelf life and improving market access. Frozen vegetables are in high demand within South African retail co-operatives, and this project aims to capture that demand by exporting directly to these networks. Springdale’s focus on sustainable agriculture and its commitment to uplifting rural women farmers make this an impactful investment both economically and socially.

Funding Requirements

The co-operative plans to raise USD $150,000 through the issuance of 150,000 debentures, each valued at USD $1. The debenture funding will cover key project areas, including:

• Construction of Freezing Plant: USD $70,000
• Purchase of Initial Vegetable Stock from Farmers: USD $30,000
• Operating Capital for Year 1: USD $20,000
• Sales and Distribution Infrastructure: USD $15,000
• Working Capital and Reserves: USD $15,000

Market Opportunity and Demand

The demand for high-quality frozen vegetables in South Africa is significant, particularly through established retail co-operatives. By exporting frozen vegetables, Springdale Co-op will tap into a market with consistent demand, enhanced by the co-op’s established relationships within the retail sector in South Africa. Frozen produce offers a profitable export commodity due to its longer shelf life and transportation efficiency, reducing the risk of spoilage and allowing competitive pricing. This project is expected to generate strong returns for both the cooperative and its investors through structured supply chain management and operational efficiencies.

Financial Forecast and Revenue Projections

• Year 1 Revenue: USD $80,000, primarily from initial export sales to South African retailers.
• Year 3 Revenue: Projected to increase to USD $150,000 as production capacity expands and operational efficiencies improve.
• Year 5 Revenue: Expected to reach USD $250,000 with full plant utilization and a stable customer base in South Africa.

Projected Profit Margins:

• Year 1: 10% net profit margin, with initial start-up costs absorbed.
• Year 5: 25% net profit margin, due to economies of scale and streamlined operations.

The freezing plant, once established, will enable the co-operative to achieve higher revenue by selling vegetables at premium prices as frozen products, compared to fresh produce sold locally. Over ten years, the project is forecasted to generate cumulative revenue of USD $1.5 million, allowing for sustainable returns and reinvestment in the co-op’s growth and member services.

Social Impact

Beyond financial returns, Springdale Co-op’s project has a profound social impact, empowering women farmers in Domboshava. By guaranteeing a fair market price for their vegetables, the co-op provides stable income for over 300 women, improving quality of life and economic independence within their communities. Furthermore, the freezing plant will create employment opportunities locally, fostering skills in processing, packaging, and quality assurance.

Investor Benefits

This 10-year debenture offers an annual interest rate of 35%, with interest paid out yearly. The fixed return makes this an attractive option for investors seeking stable, high-yield income. In addition, investors can be confident that their funds are supporting a project with both economic and social significance, empowering Zimbabwean women and promoting sustainable agriculture.

Risk and Disclosure

Investors should consider that, as with any investment, there are inherent risks. This debenture is unsecured and relies on the co-operative’s ability to generate revenue through vegetable exports and efficient plant operations. While demand forecasts are optimistic, external factors such as market conditions, currency fluctuations, and operational challenges may impact performance.

Conclusion

Springdale Vegetable Co-operative Society Limited’s 10-year debenture issue presents a unique investment opportunity combining financial returns with social impact. By investing in this debenture, investors support rural women farmers, contribute to the growth of Zimbabwe’s agricultural sector, and participate in the lucrative frozen vegetable market in South Africa. With a clear business plan, committed management, and strong demand from South African retail co-operatives, Springdale Co-op is well-positioned to deliver sustainable growth and returns to its debenture holders.