GUINEA BISSAU

CASHING IN ON CASHEWS

Presented By –
Poonam, Prerna, Sukeerth
 A Strategical Insight…
• Location
• Life in Guinea Bissau
• Guinea Bissau at a glance – facts and figures
• Introduction to our business
• Applications of CNSL
• Factors affecting our business
• SWOT Analysis
• Extracting oil from cashew nut shells
• Estimated Financial Statement
• Growth prospects
• Recent Developments in Guinea Bissau
• Bibliography
Life in Guinea Bissau
 Statistical Facts and Figures
FACTS FIGURES RANKING
Size 36,125 sq km 138
Population 1.6 million 149
GDP $837 million 168
GDP Growth Rate 2.9 62
Infant Mortality Rate 112.7/1000 186

Life Expectancy 46.4 184

Birth Rate 49.6/1000 2
Literacy Rate 64.6% 152
Exports 133 million 172
Imports 200 million 183
 Introduction To Our Business…

Setting up a manufacturing unit in Guinea Bissau to extract Cashew Nut Shell

Liquid.
Cashew Nut shell liquid (CNSL) is a reddish brown viscous liquid, having the honey
comb structure of the shell of cashew nut obtained from cashew tree.
Cashew Nut Shell oil is extracted from the honey combed shell of the cashew nut
and then sold in its raw or distilled form into two different markets: Auto brake
linings and industrial & marine coatings.
 Applications of CNSL…
• Coating sector : Industrial and marine coatings.
• Construction sector : For cementing floors exposed to chemical attack.
• Laminating industry : For reducing brittleness and improving the flexibility of the
laminates.
• Substitute : As a substitute for linseed oil in the manufacture of foundry
• core oil, which is used as a binder in the foundry.
• Automobile : Auto brake lining
• Paints and enamels : for dark coloured paints and varnishes
• Electrical insulating varnishes : used as insulating varnished with high electrical
resistance and laboratory table tops
• Polymers : used as a cement hardening agent
• Rubber products : helps processing and enhances the vulcanizate properties.
Factors Affecting Our Business
 Political And Legal Environment
• Political Type:  Republic, multi-party since 1991
• Independence:  September 24, 1973
• Political parties: The African Party for the Independence of Guinea-Bissau and Cape
Verde(PAIGC); The Social Renovation Party (PRS) and The Republican Party for
Independence and Development
• Political and institutional instability.
• Growing party warfare.
• Corruption & mismanagement in govt.
• An unsustainable level of public debt has long been a major impediment to development.
• State involvement in the economy is widespread and inefficient.
• Corruption is perceived as pervasive. Guinea–Bissau ranks 158th out of 179 countries in
Transparency International’s Corruption Perceptions Index for 2008.
• Labor regulations are burdensome.
 Economic Environment
• Guinea–Bissau is one of the world’s poorest countries. Agriculture accounts for over 60 percent
of GDP, employees over 80 percent of the labor force, and comprises about 90 percent of exports.
Cashew nuts are the primary export.
• Currency is West African Franc i.e. CFA
• Starting a business takes more than five times the world average of 35 days and it takes
approximately 233 days to start a business.
• Guinea–Bissau has a relatively low income tax rate but a moderate corporate tax rate. The top
income tax rate is 20 percent, and the top corporate tax rate is 25 percent.
• Irregularities in import valuation, difficulty tracking and monitoring goods, inadequate
infrastructure and trade capacity, and customs corruption add to the cost of trade.
• The overall freedom to conduct a business remains severely limited by Guinea–Bissau’s
regulatory environment.
• The entry costs of launching a business are very high.
• An unsustainable level of public debt has long been a major impediment to development.
 Socio-Cultural Environment
• Major religions: Indigenous beliefs, Islam, Christianity.
• Languages: Portuguese (official), Creole, French.
• Ethnic groups: Balanta 30%, Fula 20%, Manjaca 14%, Mandinga 13%, Papel 7%, others
16%
• Low literacy rate 42.4%
• Village women as town prostitutes.
• Large population is diagnosed with AIDS.
• Guinea–Bissau has become a major transshipment point for drugs and light arms by
international criminal gangs.
 Technology Environment
• Conventional methods and techniques are applicable in the industries
• The prevalant technology is obsolete.
• No funds are available for research and development.
• No patents in case of technological advancements
 SWOT Analysis…

Strengths Weaknesses

• 6th in cashew nuts production and 2nd in • Lack of infrastructure

cashew nuts export • Unskilled labor
• Low cost of labor • Low employee education, training and
• Demand for CNSL exceeds supply motivation.
• Sole exporter of CNSL • Difficulty in setting up plant in Guinea
• Availability of technology Bissau
• High level of social vulnerability
 SWOT Analysis…

Opportunities Threats

• Abundant resources such as phosphate, • Lack of skilled labour

Bauxite, fish, water, timber clay, granite • Political instability
• Unexploited deposits of petroleum • Exchange rate fluctuations
• A large biodiversity
• Adverse business climate
• Incentives and Guarantees against
• Lack of institutional development
nationalization and expropriation
• Poor health conditions
Extracting oil from Cashew Nut
Shells
Diagram of Cleaning Process
Diagram of Manual Roasting
Diagram of a drum roaster fired from a furnace below
Cashew Nut Shelling Machine
 Estimated Financial Statement
Production Capacity (per annum) CNSL-45 MT @ CFA.2,80,000 per tonne.
1.00 INR=10.7247 CFA
Description Total in CFA in Rupees
Fixed Capital 45300000
Working Capital 22650000
Total Capital Investment 67950000
Cost of production (per 105030000 10503000
annum)
Sales (per annum) 126000000 12600000
Profit 20970000 2097000
Net Profit Ratio 16.64%
Rate of Return 30.86%
 Growth Prospects
Unlocking the potential of cashew nuts
• Despite being the second largest cashew nut producer in Africa, only a tiny fraction of
the nuts go through the simple but laborious roasting and peeling that makes them
edible and quadruples their export value. This is the unexploited potential that we aim to
tap.
• We do not want anything from the cashew to go waste. We plan to build a generator at
the back where we will burn the cashew nut shells to make our own electricity, in order
to support our manufacturing unit.
• It can be used to prepare various food items like cakes, biscuits, jams, and syrups from
the cashew nut and its luscious red fruit.
Recent Developments in Guinea Bissau
• During the last years the country attracted the attention of many foreign investors, based
on a government strategy to diversify its partners.
• Projects such as: a new 5 stars hotel, a cashew nuts processing firm and a real estate
project for over euros 70 millions by the Libyan Arab African Investment Company.
• Over euros 100 million investment for the optic fiber coverage of all the territory by
Orange
• The rehabilitation of the national brewery and investment in the forestry sector with over
euros 150 million by the Moroccan Group URBAJET
• The installation of regional banking groups such as Ecobank, are clear signs of
improvement in the country’s business climate.
 Bibliography
• http://www.ebizguides.com/guides/main_guide.php?country=29
• http://anacardium.info/IMG/pdf/cashew_nut_shell_liquid.pdf
• http://www.africaneconomicoutlook.org/en/countries/west-africa/guinea-bissau/
• http://news.bbc.co.uk/2/hi/africa/country_profiles/1043287.stm#overview
• http://www.fao.org/inpho/content/documents/vlibrary/ac306e/ac306e07.htm
• http://www.infoplease.com/ipa/A0107604.html?pageno=1
• http://en.wikipedia.org/wiki/Guinea-Bissau
• https://www.cia.gov/library/publications/the-world-factbook/geos/pu.html
• http://www.state.gov/p/af/ci/pu/
THANK YOU

Questions?