Rwanda International Business Seminar, September 23, 2011, Netherlands
On Friday 23 September,the Embassy of Rwanda in the Netherlands hosted an investment seminar in the posh surburb of Wassenaar, near The Hague. The Rwanda Investment Seminar was an initiative of the Embassy, in collaboration with the Rwanda Chamber Foundation (RCF). The purpose of the Seminar was to create awareness within the Dutch business community, of the abundant investment opportunities available in the Rwandan market, with the view to attracting potential investors to Rwanda.
In order to achieve this objective, key officials from both governments made presentations on the policies of both countries. Additionally, representatives of Dutch multinationals gave their first hand experiences in the Rwandan market.
Further, a four-persone delegation from Rwanda elaborated on investment options in various sectors. To provide the glue for future collaboration, enabling institutions provided various financial instruments and other incentives available to facilitate future sustainable partnerships.
In her opening remarks, the Ambassador of Rwanda to the Kingdom of the Netherlands, H.E.Immaculée Uwanyiligira, highlighted the recent realignment of Dutch foreign policy as it pertains to development cooperation.
This new policy, she revealed, emphasizes, among others, economic diplomacy and the creationof an enabling environment which fosters an increasing role played by the private sector through international trade and investment.
She pointed out that this new policy is exactly in line with Rwanda’s own policies and thrust to energize and invigorate the private sector, which Rwanda has identified to be one of the critical engines for development. Ms. Uwanyiligiraunderlined that the convergence of both countries’ policies creates tremendous synergy poised to generate an impetus for closer colaboration within the two countries’ business communities.
Among the speakers were H.E. Frans Makken, the Ambassador of the Kingdom of the Netherlands to Rwanda, who provided an overview of Rwanda’s investment environment, the regional perspective, the opportunities and challenges as well as the role of the Embassy in fostering cooperation under the new policy.
Mr. Simon Smits, the Director General of Foreign Economic Relations in the Ministry of Economic Affairs, Agriculture and Innovation, (EL&I), further elaborated on the new Dutch development cooperation policy and emphasized his government’s commitment to engage with Rwanda.
On the same subject, Mr. Joost Bolt from EVD International, an office within the same Ministry, provided details on various government instruments available to assist the private sector, both in the Netherlands and in Rwanda, chief among them: the Private Sector Initiative (PSI) for foreign businesses, the Match Making Facility (MMF) to match foreign and Dutch businesses; and the ORIO program for large scale government projects in developing countries.
Mr. Bob van der Bijl from the Netherlands African Business Council (NABC), delivered a presentation on the role of the NABC in linking Dutch entrepreneurs with the African entrepreneurs.
He praised the initiative of the Embassy of Rwanda and pledged NABC’s support for future initiatives and follow up activities.
Key among the speakers, were representatives of Dutch conglomerates operating in Rwanda, namely: Heineken and Rabobank. Mr. Sven Piederiet, the CEO of Bralirwa/Heineken, provided an overview of Bralirwa’s history, its partnership with Heineken, and the long-term, profitable cooperation between the two companies that have yielded profits for the two companies and also for shareholders in its initial public offering (IPO) on Rwanda’s stock exchange.Mr.Piederiet gave a positive demographic outline of the consumer market in Rwanda and encouraged other companiesto invest in Rwanda’s dynamic emerging market.KLM was also represented in the audience.
Mr. Paul van Apeldoorn, Chief Commercial Officer for Banque Populaire du Rwanda/Rabobank, gave an orientation of the financial sector and emphasised that Rwanda’s financial sector was stable and provided a variety of services for investors.
He also mentioned interesting aspects of Rwanda’s financial sector, such as the mobile banking, which he pointed out, were better developed than those in the Dutch financial sector.
Mr. Co Meijer, Managing Director of Kadaster International, described the success of his company, which recently completed a land registration project in Rwanda.
Investment opportunities in Rwanda
Opportunities in buildings / houses, energy, horticulture, animal feed, poultry industry for the private parties
Politically stable with well functioning institutions and zero tolerance for corruption (Ombudsman office since 2004). Macroeconomic stability manifest in high GDP growth at 7 - 9% and low inflation. Stable currency and exchange rate (related to the USD). Stabel interest rates (7%-9%). Inflation 2011 was 6,6%.
There is an open trade policy, a favorable investment climate, cheap and abundant labor, tax incentives to businesses, specific free-zones, stable internal security, and crime rates that are comparatively low.
Rwanda has solid institutions like an Investment Board, a Chamber of Commerce, land registration, a UK based legal system and a transparant tax system.
The Government of Rwanda has sought to privatize several key firms. Since 2007, the telecom and mining sectors have been largely privatized, and the government has sold off several government-owned tea estates and made great strides in completing privatization of the banking sector. RECO, the utility monopoly, remains to be privatized, as do several other parastatals.
There is access to wireless internet all over the country. Electronic banking is very well developed.
Rwanda is a member of the free trade zone EAC common market: 130 million people (with Kenia, Tanzania, Burundi, Uganda).
Investment insurance also is available through the Africa Trade Insurance Agency, the Overseas Private Investment Corporation, and the World Bank’s Multilateral Investment Guarantee Agency (MIGA). Increasingly attractive for Foreign Direct Investors (FDI)
The implementation of a value added tax of 18% and improved tax collections are having a positive impact on government revenues and thereby on government services rendered. Banking reform and low corruption also are favorable current trends.
Today, there are about 20 institutions of higher learning in Rwanda. Between 1963-1993, Rwandan university graduates numbered roughly 2000; today, Rwandan university graduates exceed 45,000.
The biggest tax payer in Rwanda ($100 mln.) is Heineken and the biggest employer (> 2000 employees) is BPR, a bank managed by (Dutch) Rabobank. Rwanda has its own stock market.
Investment opportunities are (among others) and supported by the Dutch Government (in specific food security, energy, the legal system, and clean water):
Infrastructure (Kigali convention center, Bugesera Int. Airport, Isaka railway)
Agriculture (Horticulture, fresh wholesale foodmarket, irrigation projects) and livestock programs including milk processing.
Energy (extraction of methane gas Lake Kivu (and the drilling of three geothermal exploration wells, at a cost of $20-million, will start this year. A program of $900 million). Hydro-energy and biogas.
Tourism, All kinds of manufacturing, ICT. Also a new law on intellectual property.
Real Estate & construction, Financial services, Mining (Tin, Colombo, Wolfram)
(newly listed companies on the capital market shall be taxed for a period of 5 years at 20% if those companies sell at least 40% of their shares to public). Venture capital funds will be accorded 5 years tax free if registered in Rwanda
RCF (Rwanda Chamber Foundation). What do we offer:
Research in the Rwanda market
Building contacts and facilitating partnerships
Set up business, office, banking, administration, agency,…
Set up other facilities like housing, transport, internet-connections, …
Advice in legal & tax affairs
Management & Business advice
Management of organizations, offices, administration and performance
Accountancy & bookkeeping services
Dealing with cultural issues
We deliver training
We organize a Rwanda & Uganda Trade Mission, together with NABC in the week of June 17, 2012. Please visit www.rwandatrademission.com
Rwanda: Projects ready for investment Summarized:
affordable buildings for factories, storages, houses
A- energy (methane gas, electric power, horticulture) B- greenhouse horticulture
dairy processing plant
avocado packaging plant
beans processing & canning plant
organic oil production
invest in fertilizer import, and distribution business as privatization
invest in a powerplant, 5 MW
1. Flexible affordable buildings for factories, storages, farms, and for housing.
In Rwanda he process buying a house / building is the same as in The Netherlands. Based on a buyers contract and a constructors contract the pays the bank in the first place. The warranty of the banks guarantees the payments. We work with BPR bank (local Rabobank) and we have our own accountancy and legal & tax advice firm in Rwanda. As a project developer we work with our legal entity Rwanda Business Develoopment Ltd.
Foreign investors are invited to buy shares at € 1000.-/ share
We are working with a Dutch architect and a Dutch factory & constructor who have the concept and the design for flexible buildings based on steel frame construction and flexible walls (system buildings), from 32 m2 to 200 m2 and more, up to 4 levels. The local demand in Rwanda is huge because we can deliver for very competitive pricing.
Our order book:
15 buildings for chicken (12 x 48 m)
2 storages (12 x 24 m)
1 storage (28 x 56 x 5 m)
1 bungalow 300 m2
4 houses 150 m2
1 house 100 m2
1 house 48 m2
We have an option from the Rwandan government to build 5000 affordable houses in 7 different types.
Manufacturing of constructing products and intermediate elements.
Depending on the volume of project 1 we have built a business case for manufacturing locally. A plant for steelframe profiles. A plant for ceramic bricks & tiles. We are calculating the business cases for the plants. In the meantime we are working with a local factory in bricks.
2. Energy & Horticulture. This is one project with two sub-projects.
For a high tech horticulture solution we need clean water, heat and CO2. That is produced by a CHP (Combined Heat & Power Plant) with a gas turbine generator set. The CHP delivers between 3.5 – 4.5 MW electric power what is much more than we need for the greenhouse, so we will deliver the electric power to the grid. Investment is around Euro 2.2 million for a new installation, however, there are very good used plant available. Based on the price of gas and the tariff of electric power, the CHP will be break-even in 7 - 10 years running 8000 hours/year. Life-time is 300.000 hours.
This CHP delivers also 3,8 kW heat and 1,530 kg CO2/hour. Therefore the energy, heat and CO2 for the greenhouse will be free of costs. The total production is enough for a greenhouse of 20 ha. The climate conditions in Rwanda are optimal.
The investment in project 1A is about in Euro between 1.2 mln and 2.2 mln. depending new or used installation.
We will build a greenhouse out of glass for tomatoes, starting with 5ha (with an option for 20 ha). During the first year the 5 ha produces over 2,500,000 kg tomatoes (50 kg / m2), Greenhouse completed turn-key in Rwanda ready for production will cost euro 125 – 140 / m². In total about Euro 6.5 mln. Plastic greenhouse will lower the costs with about 20-25%. Scaling into 15 or 20 ha declines the costs by 10%. Calculating with a total investment of 6 mln. Euro the EBIT will be around 600,000.- in the first year.
The turn-key project will be delivered by a Dutch party. Foreign investors are invited to join the project.
3. Animal feed.
There is no factory for animal feed in Rwanda. At the moment the demand for good food is about 30.000 MT. The local production today is 5000 MT, and the rest is imported in low quality. The market (demand) is growing quickly with 10,000 MT / year. The total investment will be about € 750,000 producing 5 MT / hour. We might get a grant from the Dutch Government of 50% of the total investment. We are working with local companies in this project and a solid Dutch party who delivers all installations, additives and knowledge. In addition the Rwandan government will invest in Silo’s to store overproduced grains during the wet season for the dry season (storage, handling technologies and milling & equipment). A local entrepreneur is searching for foreign investor to build a plant for soybean processing as well. Total investment is Euro 500,000 to produce 2 MT/hour high quality high percentage protein additives. In combination this is a 1.25 mln. euro investment over 3 years. The value of the demand for feed is over Euro 10 mln. / year. Foreign investors are invited to join this project.
4. Poultry Industry.
Scaling and strengthening the poultry industry is based on the availability of good food. We have found local partners in hatchery (public & private) and in breeding / rearing layers and broilers. Private parties are ready to invest € 350.000 in hatchery and in farmhouses and equipment for layers and for broilers. The government will invest into a pullet farm (100,000 pullets/year) plus training center (investment Euro 400,000). We have found solid Dutch parties who can and will deliver experts, training programs, equipment, parent-stock, settlers, hatchers, and more. We are searching external investors in parts of the projects. When the numbers of broilers grow, the government will invest in a slaughterhouse and chicken processing. Also for this project we are searching for foreign investors.
5. Diary processing plant.
Rubirizi Dairy is one of the oldest dairies in Rwanda.
It's current production capacity now is about 3000L/day with a max. of 8000l., but equipement is old and needs some "refining" or, for some of them, replacing.
The owner of this dairy is a fair man who has my boss for years.
These days, the plant is closed due to requirements of RBS (Rwanda Bureau of Standards) that Rubirizi Dairy is failing to fullfill.
That is why the owner is looking for an investor who is "serious" and experienced in dairy sector to improve performance of the plant. This is unique opportunity in Rwanda because the dairy is located about 5km from Kigali City center, and it comprises about 50ha which can host a modern dairy farm in order to have a minimum of own raw milk to supply a dairy plant.
Dairy value chain supported in Vision 2020 and EDPRS
Generates profits in first year of operations
Projected 1.3B RWF (2.16M USD) by 2016; 25% Gross Margin; 10% Net Margin
Positve income impact for thousands of Rwandan cattle farmers
6. Avocado packaging plant.
The investment opportunity identified is the establishment of a greenfield avocado packaging facility that will serve the growing and significant demand for avocados in the EU. Avocado consumption has grown strongly amongst health conscious consumers in developed markets; however unlike the U.S., the EU has thus far struggled to find sources of increased supply. Rwanda’s good agro-climatic conditions, favorable cost basis and the attractive investment environment, enable Rwanda to meet some of the EU’s unfulfilled demand. Investment USD 2.9 million, ROI 38%.
7. Beans processing & canning plant.
The investment opportunity identified is the establishment of a Greenfield beans processing and canning facility that will serve a growing regional middle class market driving demand for processed foods. Rwanda’s favorable supply-demand dynamics, the gap in the market for processed beans products and the attractive business environment, present an attractive opportunity to secure first mover advantages to serve the rapidly urbanizing middle class within Rwanda and the region. Investment USD 8.6 million, ROI 32%.
8. Organic oil production.
The core product focus for Ikirezi Natural Products is the production of quality organic geranium oil. Ikirezi currently has approximately 30 Ha of current land under cultivation and distillation capacity to produce over 2.5 MT of geranium oil annually. The five year plan targets an expansion to 400 Ha of geranium and patchouli producing 6MT and 9MT respectively, with an annual turnover of approximately two million USD/yr. Essential oils represents a key sector with the opportunity to:
Become regional leader as premium producer of essential oils
Projected Investor / Shareholder ROI greater than 30% and IRR of 22%
Provide return to farmers (1,600 families impacted; agricultural incomes total 2.5M USD).
9. Fruit processing.
SONAFRUITS is a privately-owned company that has made its primary business in the processing of fruit, into concentrate and ready-to-drink (RTD) fruit juice for subsequent sale to the local Rwandan market. Primarily focused on the passion fruit market, SONAFRUITS has played an important role in passion fruit cultivation and value addition in Southwestern Rwanda.
Geographically located in an area historically known for significant passion fruit production
Projected Investor / Shareholder ROI greater than 13%
Small but rapidly growing juice market; passion fruit demand 5X supply
Ideally positioned as acquisition target by local, regional or international competitor
10. Invest in fertilizer import, and distribution business as privatization, and government’s commitment to addressing market barriers is creating opportunity for players to secure first mover advantage.
The Government of Rwanda’s strategy to increase agricultural productivity through increased fertilizer usage has grown the fertilizer market to 32,000 MT over the last 6 years
The Government now plans to privatize the market and encourage the entrance of more private sector players to increase market efficiencies, fertilizer utilization and technical agro-capabilities
With privatization and the planned market building initiatives, Rwanda’s fertilizer market has the potential to reach 48,000 MT in volume and over $46M in revenue over the next 5‒7 years.
11. Invest in a powerplant, 5MW. The plant will burn methane gas, produced by the off-shore plant in Lake KIVU.
The electric power is delivered to the grid at a tariff between € 0,12 – 0,15 / Kw. Revenu 8000 hours x 0,12 x 5000 KW = Euro 4,8 Million / year. Gas: 1140 m3 x 8000 hours x € 0,30 = Euro 2,7 million.
For more information, please contact us.
Phone: +31 629 075 200, and +31 627 507 588, and +357 990 64 193 Mail: firstname.lastname@example.org ; email@example.com
Discover Rwanda Magazine The Embassy used the occasion to introduce two projects commissioned by the Embassy. Just hot off the press, the Discover Rwanda magazine was a result of collaboration between the Embassy of Rwanda in the Netherlands with Your World Publishers. The magazine contains tourisms oriented information as well as investment information. Its sister magazine in the Dutch language, Ontdek Rwanda, will be available on newsstands across the Netherlands for the next three months. Discover Rwandawill also be available as a downloadable Apple applet on the online Apple Store.
University of Groningen Research Study on Dutch FDI in Rwanda The Embassy also commissioned an academic study at the beginning of the year, to examine opportunities for foreign direct investment (FDI) in Rwanda as it pertains to the Dutch companies. The study was carried out by students of the University of Groningen by six students, four of whom travelled to Rwanda in March/April for three weeks to collect data. The Results Book was published in June 2011.
The Embassy used this opportunity to introduce this Results Book to the business community, which is an invaluable resource for companies wishing to critically examine the Rwandan market by sector.