The project offers an attractive investment opportunity with an estimated Internal Rate of

Return (IRR) of 36%, a Pay Back Period of 4 years, a Discounted Cash Flow (DCF) valuation
of US$31.9 million (using a discount rate of 12%) and a Net Present Value (NPV) of US$6.6
million.

After five years of operation, there is scope to maximise returns on investments on the project
by venturing into the production of other honey related products such as beeswax, propolis
and industrial honey, in order to take advantage of the entire honey value chain. potential made possible
Social and Economic Impact
The project has positive social externalities through reducing poverty by indirectly empowering
a large population of people mostly in rural areas who are involved in the beekeeping and
honey production value chain. In addition, people involved in the honey subsector will benefit
through access to annual training, capacity building and increased productivity arising from
use of modern technology in beekeeping and honey harvesting.

Zambia Development Agency PromoteZambia

Privatisation House
Nasser Road
potential made possible
Lusaka, Zambia PromoteZambia
PO Box 30819

Zambia Development Agency

INVESTMENT PROJECT PROPOSAL
Phone: +260 211 220 177

PromoteZambia
Name of project: Zambia Natural Honey Processing
Website: www.zda.org.zm

Country: Zambia
Overview Key Facts the domestic, regional and international markets mainly
driven by health considerations. Honey has medicinal uses
The Government of the Republic of Zambia Name of Project Zambia Natural Honey and it is considered as a healthy substitute to sugar hence
(GRZ) is inviting Private Investors to Processing the ever-increasing demand globally by 2% annually. The
establish a modern natural organic honey, Country of Zambia trend is expected to continue in the foreseeable future.
processing project that falls under Light Operations
Manufacturing Industry Sector, which The Competition
Headquarters HQ: LS-MFEZ Lusaka.
is classified as a priority sub sector. The
The competitors to the project include local Zambian
processing plant will produce an average
Contact Partnership for companies such as Forest Fruits, Mpundu Wild Honey,
of 5,000 tonnes of natural organic honey
Investment & Growth in and Adcoms as well as regional and international
per annum. The plant will be constructed
Africa (PIGA) organic honey processors. At a regional level, the main Fig 1. Source of honey
on 20 acres of land located at the Lusaka
Zambia Development competitors are from South Africa and Botswana.
South Multi-Facility Economic Zone (LS-
MFEZ) and hence the project will benefit Agency
The main differentiation strategy for the project will
from both fiscal and non-fiscal incentives Privatization House,
be anchored on the high quality of the organic honey
that are associated with investing at the Nasser Road, Lusaka
produced.
LS-MFEZ site. The total investment that Tel: +260 962146223
is required to operationalize the project is Current Status of Green Field Project Staff
US$5 million. The Private Investors will be Project
expected to meet the entire project costs • Project Coordinator – from ZDA.
Sector Light Manufacturing – • Investments and Finance Expert – from ZDA
of US$5 million through injecting cash agro processing
equity in the project. GRZ, LS-MFEZ and • Legal Expert – from GRZ
other Government Agencies will assist the Proposed Legal Private Investments • Trade Expert – from Ministry of Commerce Industry
Private Investors to establish the project, Structure Company and Trade. Fig 2. Bee hives
through various forms of interventions. • Honey Production Expert – from Private Sector.
Partners Private Investors
The project will be implemented through an • Honey Sector Expert – from Honey Sector
Company
Investments Company that will be wholly Regulatory body.
Project Value USD 5,000,000
owned by Private Investors. The project will Investment Proposal
take 12 months to operationalize. Proposed Investment Structure
The Zambia Natural Honey Project is soliciting for cash
The Product Proposed USD 5,000,000
equity of US$ 5 million for the establishment of a modern,
Investment
The project will produce natural organic state of art processing plant at the LS-MFEZ, in Lusaka,
Amount
honey, using raw comb honey, which is that will produce natural organic honey for the domestic,
Type of Private Equity regional and international markets.
produced in large quantities in Zambia. The
Investment
honey will be pure, light coloured and with The money will be utilised to meet the construction costs
a mild taste. Type of Investor Private Equity Investors Fig 3. Raw comb honey
of the factory buildings, acquisition of processing plant,
Needed equipment, machinery, vehicles and working capital to pay
The Market
Use of Proceeds The funds from the for raw comb honey, inputs, salaries and other operational
The natural organic honey will be Private Investors will costs. The investment is in the form of equity finance in
distributed to the domestic market in be used to finance the an Investments Company that will manage and run the
Zambia (60%) and regional markets in construction of a honey project.
Angola, Botswana, Democratic Republic processing plant and
of Congo, Namibia and South Africa (10%). buildings and purchase Profit Analysis
About 30% of the honey will also be of modern honey
The project will start generating profits from the first year
exported to international markets in China, processing equipment,
of operation, with net profit margins ranging from 12% in
European Union, France, Germany and vehicles and to finance
year one to 25% in year five.
Italy. There is a general increase of about working capital.
Fig 4. Processed natural honey
2% annually in the demand for honey on