Essay: Musahamat Farms (Bananas) SWOT & PESTLE analysis

Bananas are grown by millions of small-scale farmers and plantation workers in tropical regions.
Musahamat Farms Ltd. Ghana is an Agricorp Holdings company that operates in the Agriculture sector producing, packing and shipping premium quality “Senorita®” and “Hermanita®” branded Cavendish bananas to global export markets including the European Union, United Kingdom, Kuwait, Kingdom of Saudi Arabia and key Arabian Gulf markets. It owns approximately 7,908 hectares in Ghana.
Musahamat Farms Ltd – Ghana plantations Global GAP certified company. The location of the farms in West Africa is well positioned for the EU market. Agricorp holdings has 3 locations under Intishar Holdings in the banana plantations with the Philippines farms, West Africa -Ghana and Latin America in Ecuador. This business model is to ensure the growth of the brand Senorita® and business model as a big brand. Senorita® is a registered brand bought (USD $3 million invested in brand registration) with Intishar Holdings to create and compete with major brands with the business growing in all the production regions and markets into Asia, EU, North America and Africa.
Marketing in the EU is achieved through certifications that is Global GAP/GRASP, Fair Trade and HACCP. This certification for the business to access markets in the EU, ME and some Regional or African markets including South Africa. To gain markets with a guaranteed or fixed price, Fair Trade certification increases more market access in EU which is secure and stable. Fair Trade premium is the sum of money which goes into communal fund for workers and they use to improve their social, economic and environmental conditions. Conditions include protection of workers rights and the environment, business gains by getting a Fair-Trade premium price especially with retail supermarkets. The Fair-Trade sticker or label identifies certified product and market in UK and Germany is 55% Fair Trade consumption.
Major markets by volume and distribution are the European Union with 85% volume exported to EU countries that is France, UK, Belgium, Greece, Italy, Spain and Poland. 5% of fruit sold in regional markets mainly West African that is Senegal and Benin. 10% volume shipped to Middle East with main markets being Kingdom of Saudi Arabia, Kuwait ad UAE. Middle East Markets have the advantage of getting direct retail access due to our Middle East marketing group, Sabel Group Gulf marketing, handling and ripening fruit to direct retail distribution and wholesale markets.
The company’s purpose is to profitably develop and nurture the land, water and agricultural resources entrusted to us by training our employees to be best, while becoming one of the leaders in the agricultural export sector in Ghana, with total annual exports to EU 28,800 tonnes.

SWOT Analysis

Strengths

• Musahamat Farms has access to all major markets due to its geographical positioning. This gives the business greater scope for growth and developments.
• The Company has a strong technical team which they have attracted which can develop and grow the business and with a strong Research and Development section which continues to improve business operations and processes from field to the consumer.
• Well developed and excellent work class website promotes business knowledge and a well-seasoned marketing team with vast experience in the fruit industry and fresh produce business.
• Robust container yard for logistics and business partnership with major shipping lines like AP Moeller – Maersk which creates a very string and stable cold chain system.

Weaknesses

• Production costs for the organic bananas too high as market for raw materials and inputs not available locally.
• Road infrastructure, poor road access causes high maintenance costs and tie delays to in land logistics movement and can affect fruit quality in loaded reefer containers.
• Local material supply such as packaging is either of low standard or specifications for the fresh produce sector or expensive compared to high quality imprinted packaging which results in a long supply chain.
• Manual processes with government offices like phytosanitary certificates approvals cause delays in the export process.

Threats

• The local currency devaluation creates a challenge for the business including wage stability and local pricing
• Government changes comes with new regulations and requirements as they try to prove their achievements taking away previous agreements which affect business process and growth with risk in losing out on some agreed concessions like taxes and land leases.
• The harbour/port is vulnerable to congestion and shipping system is also prone to problems from the neighbouring countries which are at times affected by strikes, delays and inefficient systems like in Nigeria and Senegal.
• Government support for the export farming sector still not enough so at times business does not get attention needed for some processes to enhance exports of highly perishable products.

Opportunities

• Direct market access to EU with no quota limit and advantages into the UK market as a Commonwealth member state.
• Middle class economy development creating more local consumption of locally produced fresh produce as affordability increases
• Business can grow from farming operations as land and water are not a limiting factor with a perennial water sources and climate for all year production
• More market access through governments bilateral agreements like South Africa, Namibia and Angola.
• Research and Development working with universities and local researchers to develop more and advanced system as scope and capacity for more innovations and research is there with good research stations like Kumasi and other institutions.

PESTLE Analysis

Political

• Demand for chemical free, organically or sustainably grown products from the EU.
• Risk of chemical residue for bananas due to disease controls for the consumers
• Low levels of unemployment.
• Food labelling compliance essential as country suffered a ban sometime on chemical residue in fresh produce and product safety.
• Fast food mentality in the European Union countries can be a challenge. Governments trying to promote health eating and fighting obesity.
• There has been a lot of advocating to increase intake of fruit for all populations with the European Union increasing the campaigns and awareness to fight obesity and promote healthy eating habits, increase life expectancy (WHO, 2002).

Economic

• The country remains vulnerable to potential slowdowns in the global economy and commodity price shocks.
• Costly and difficult financial services
• Increases of prices of raw products and inputs such as organic fertilisers, fuel, paper, fuel affects operating performances
• Competition from large organisation like Chiquita, Del Monte, Fyffes, Noboa and other growers

Social

• Very huge labour pool. No labour shortages for the business.
• Unionised employees – Trade Unions are on the rise and they have a tendency of bargaining for higher wages more than government stipulated ones.
• Socio cultural factors
• Need to eat healthy
• The EU consumers is increasingly aware of the need to eat healthy and environmentally conscious.

Technical

• Advances in technology, improved shelf life through different growing conditions influence marketing behaviours.
• Traceability systems that is having data from field practises (inputs, sprayed chemicals) post-harvest and packing conditions, shipping, (reefer systems, vessels) from port of origin to country of receipt.
• Effective method to preserve crowns of bananas by means of application of moisture proof sealing wrap. The idea is to use a paraffin based semi-transparent stretchable plastic which is in a role. The sealing wrap protects the cut crown and maintains the freshness of the fruit.
• Natural marking, a process designed by the Spanish start-up Laser Food, to directly tattoo the skin of bananas without using ink or denature the fruit to record the necessary information.
• Banana Tree, an organic banana plant design with banana bunches hung to mimic the way the plants are in the plantations to give consumers that natural farming experience and pick fruit directly from the bunch of various sizes.

Legal

• Trade restrictions very minimal, however, a burdensome bureaucracy
• Ambiguous property laws. Land claims continue to threaten business expansion even though land is given by the government as traditional land ownership is always against government land allocations.
• The consumer is always demanding product knowledge.
• Compliance regulations; Fair Trade, Global GAP/GRASP certifications are needed to create a more stable and confident market presence.

Environmental

• Waste management poor.
• Environmental degradation and water source pollution.
• Growing and weather conditions can impact supply (i.e. Harmattan season, drought) also affect quality and market prices of bananas.
• The need for the bio degradable or compostable banana sleeves is needed and must be done in order to maintain or improve production whilst avoiding pollution and challenges to waste management.

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