AP Franchise – successful turn-key agricultural production from Agroprosperis

AP Franchise works as follows: an agreement is concluded for agricultural services provision to produce cultures the Group specialises in (wheat, corn, sunflower, rape, soya). An APP performs all the technological operations on the land allocated for this project. Agroprosperis is interested in an AP Franchise customer growing a good crop and selling it at the best price possible. So it offers its own technology for which it supplies all inputs at market prices, uses modern equipment, involves its specialists. A technological chart is agreed on with the client and a business plan is drawn up. These are actual documents guiding further work done step by step. Importantly, the farmer remains the owner of its land.

 

Full or partial funding for the project is provided by Agroprosperis Bank or the Group's partner Piraeus Bank. The collateral is future crops. A credit line is opened which is used by the customer gradually and as necessary. Then, Agroprosperis production teams work hand in hand on a daily basis with the client, communicate and report to the farmer, sign an acceptance report of works done every month.

 

The idea of AP Franchise came up in mid-August 2017. It was put into practice first by the teams of Nizhyn Agro and Bakhmach Agro. These Latagro holding APPs operating in Ukraine's northern region are best in operational results across the Group.

"Selecting us for the pilot project, the investor was confident that we would help our neighbour farmers to achieve a new level of agricultural production and profit. We signed the first agreement in November 2017, and we continue to meet with interested farmers in the regions we work in. Currently, the project is being implemented in Chernigiv and Sumy oblasts. The next stage is Vinnytsya Oblast. Now we're working with closest neighbours who can see our yields and machinery and know our team. Then, we'll expand into other regions of the Group's activity", says Vasyl Sagan, director general of Latagro.

 

AP Franchise is first offered to small legal entities (farms 30 to 300 ha) that want more from their land and therefore need effective changes in technology and approaches. In the future, Agroprosperis is ready to consider bigger farms as well. There're new farmers among the Group's customers who actively enlarge their land bank and don't have enough experience or money. Agroprosperis is ready to transfer its successful business model to them.

 

Decision-making takes from 1 month on average. During this time, the Group representatives meet with a client, agree on the technology and business plan, the bank checks a clients’ credit history and business reputation, following the standard procedure before providing funding.

 

"Our goal is to earn together with a farmer and make his business more profitable. We give an operational guarantee. It comes into effect if expenses exceed profit on the land involved in the project, then we compensate the difference. Accordingly, Agroprosperis takes upon itself the risks of a bad crop or a fall in price. The cost of our guarantee is a share in the profit earned under the AP Franchise project. We're interested in getting a high profit together which is shared with the client after the final product is sold in a ratio of 70 to 30 per cent, where 30 per cent is Agroprosperis's share", adds Olga Makara.

First AP Franchise clients say that participation in the project opened new opportunities and prospects to them. One partner noted that he spent the May holidays at home with his children for the first time in 4 years, instead of having to solve business related issues such as purchasing seeds, finding equipment and operators, getting funding to cover production costs. To another farmer, growing corn was a long-time dream because of too high expenses. And now, the first corn crop will soon be harvested from his fields!

 

You're an agribusiness owner and want more from your fields? Fill in an application for taking part in the AP Franchise project available at the link, and we'll contact you to discuss partnership!