Mango Industry Benchmarking (Three Years) (2010-11, 2011-12, and 2012-13)
CDI Pinnacle Management May 15th 2014 Sample / Benchmarking Group Sample Scale
Trays Total Mango Producing % of Harvest Harvest Year Producing Ha (7Kg Equiv.) Harvest Trees (Est.) (Est) (Trays)
2010 - 2011 261,000 1,322 1,120,357 5,922,000 19%
2011-2012 497,000 2,500 3,300,000 8,576,000 38%
2012-2013 500,000 2,500 3,200,000 7,147,000 45% Area per Region in Sample
% of Area in Each Region 2012 and 2013
Mareeba Dimbulah, 19% Burdekin, 24%
Southern, 4%
NT, 54% Average Farm Size Average Farm Size (Ha) 2013 140 121 120
100 78 80 74
60
40
20 13
- Burdekin Mareeba Dimbulah NT Southern Farm Size – Spread (3 Years)
350 Size of Participant Farms 328 300
250
200
150 82 100 38 50 5
- MEDIAN AVERAGE Variety Mix in Sample
120% % of Sample from each Variety (2012 AND 2013)
100% Keitt, 3% Kent H-Gold, 9% Brooks 80% R2E2, 12% Keitt
60% Other - Mango KP, 35% Honey Gold
40% R2E2
KP 20% Calypso 37% Calypso
0% 1 All Participants – 3 Years Yield: Trays / Producing Tree (Including Juice / Processing) Trays / Producing Tree (Incl. Juice)
6.65 7 6.34 5.73 6
5 4.34
4
3
2
1
0 F2011 F2012 F2013 3 YEARS Yield: Tonnes / Producing Ha (Including Juice / Processing) Tonnes /Producing Ha (Incl. Juice)
10 9.31 9.2 8.53 9
8 7.01
7
6
5
4
3
2
1
0 F2011 F2012 F2013 3 years Pack Out: Grade and Count (% of Fresh Market Fruit Only)
100%
90%
80%
70% % Premium
60% 63% 51% 39% 51% % A Grade 50%
40%
30%
20% 34% 26% 28% 28% 10%
0% 2011 2012 2013 3 YEARS Costs and Returns per Tray Equiv. (Including Juice / Processing)F2011 F2012 F2013
Ave. Total Operating Costs 19.27 17.07 17.03
Ave. Cash Profit (*) 2.16 0.58 3.58
Ave. Gross Return 21.43 17.65 20.61
Marketing and Ripening Costs / 7 KG Equivalent 3.03 2.20 2.36
Farm Gate Return (Net) Received / 7 KG Equivalent 18.40 15.45 18.25
(*) From 'Cash Profit' Producers must fund: 1. The cost of finance, 2. The depreciation / replacement of all plant and equipment, and 3. Achieve a return on their investment Average Gross Return F2013 (Before Paying Marketing & Ripening Costs)
Total Gross Sales $ / Tray Sold 2013 $60.00 $49.74 $50.00 $46.38
$40.00 $31.59 $29.91 $29.19 $28.81
$30.00 $27.57 $24.55 $24.09 $23.82 $23.80 $23.72 $23.37 $22.43 $22.08 $21.73 $21.38 $20.61 $19.96 $19.34 $17.89 $17.88 $17.64 $17.38 $17.19 $16.81
$20.00 $16.71 $15.51 $14.81 $14.79
$10.00
AVERAGE MEDIAN Average Operating Costs F2013 (Before Paying Marketing & Ripening Costs) (Before paying interest and depreciation)
Ave. Operating Costs / Tray - 2013 $50.00 $44.34 $45.00
$40.00 $36.35 $35.71
$35.00 $29.70 $30.00 $28.23 $26.08 $26.06 $24.60 $23.07 $22.97 $22.63
$25.00 $21.76 $20.57 $20.31 $19.74 $19.17 $18.68 $17.99 $17.92 $17.03 $20.00 $17.04 $16.46 $15.52 $14.78 $14.12 $14.00 $13.97 $12.74 $15.00 $12.44 $12.44
$10.00
$5.00 MEDIAN AVERAGE Average Cash Profit / Tray F2013 (After marketing and ripening and before interest & depreciation)
Cash Profit (EBITDA) $ / Tray Sold 15.00 11.07 10.67
10.00 7.52 7.05 7.00 5.73 5.45 5.40 5.33 5.30 4.92 4.69 3.91 3.58 3.75 3.56 3.36
5.00 3.14 2.37 2.03 1.91 1.67 1.39 0.85
0.00 (1.53) (2.93) (5.18) (5.60) (5.00) MEDIAN (9.37) AVERAGE (10.00)
(15.00)
(20.00) (21.56)
(25.00) Costs and Returns / 7 KG Equiv. Produced (including Juice /Processing)
25 10 9.31 9.2
8.53 9
20 2.16 8 Average Cash Profit 3.58 (EBITDA) 3.39 0.58 7 7.01 15 6 Average Operating Costs
5 $ / Tray
Yield t / ha Average Yield (T / ha) 10 19.27 4 17.07 17.03 16.28 3
5 2
1
0 0 2011 2012 2013 3 YEARS Cash Profit – Spread (3 Years) EBITDA / Tray Sold 13.45
35% of participants did not achieve a Cash Profit per Tray or per Tonne (made a loss),
46% of participants achieved a Cash Profit per tray or per Tonne equal to or greater than the average Cash Profit of: ( $3.39 / Tray ($485 / Tonne). Average 3.39 Median 3.14
(59.13) (21.56)
(70.00) (60.00) (50.00) (40.00) (30.00) (20.00) (10.00) 0.00 10.00 20.00 Labour Costs per 7KG Tray Equiv.
6.00 10.00
9.00
5.00 1.10 8.00 Packing Labour $ / Tray 1.45 7.00 4.00 1.45 1.06 Picking Labour $ / Tray 6.00
1.11 3.00 0.27 5.00 1.09 Pruning Labour $ / Tray Yield t / Ha 0.24 4.00 LabourCosts $ / Tray 2.00 0.28 3.00 Farm and Other Labour $ / tray
2.83 2.39 2.00 1.00 1.94 Yield (Tonnes / Ha) 1.00
0.00 0.00 2011 2012 2013 Labour Use Efficiency
Ave. Total Tonnes Produced (Incl. Juice / Processing) per FTE
120.00
100.00
80.00
60.00 112 90 96 40.00
20.00
2011 2012 2013 Varieties – 3 Years Packed to Premium + A Grade By Variety
% - Premium + First Grade 120%
96% 100% 90% 91% 91% 87% 84% 80% 66%
60% 50%
40%
20%
0% Brooks Calypso Honey Gold Keitt Kent KP Other - Mango R2E2 Pack to Sizes 12 to 24 (%Fresh Market Fruit only)
% Packed Sizes 12 - 24 90% 85% 81% 79% 80% 71% 69% 70% 60% 60%
50% 39% 40% 29% 30%
20%
10%
0% Brooks Calypso Honey Gold Keitt Kent KP Other - R2E2 Mango Yield (Tonne / Ha) per annum (Regardless of Tree Age)
2011 2012 2013 18.00
16.00 Keitt
14.00 Other Mango Varieties
12.00 Honeygold 10.45 10.9 10.00 R2E2 10.13 9.4 Calypso 8.00 9.24 6.93 7.5 Kensington Pride (KP) 6.81 6.00 6.34 Brooks 4.00
Kent 2.00 Varieties: Yield (T / Ha) 3 Years (Regardless of Tree Age)
YIELD FOR VARIETY - T / Ha - 3 YEARS 12.0 10.5 9.7 9.7 10.0 9.3 8.8 7.8 8.2 8.0 7.3
6.0
4.0
2.0
- Brooks R2E2 Kensington Calypso Other Keitt Honeygold Kent Pride (KP) Mango Varieties Regions – 3 Years Regions: Tonnes Per Hectare (Including Juice/ Processing) 12.0 10.7
10.0 9.3 9.4 9.0 9.2
8.0 7.4 7.2 F2011 6.3 6.0 5.6 F2012 4.9 4.6 F2013 4.0
2.0
0.0 Burdekin Mareeba/Dimb. N.T. Southern Burdekin Yield (Incl. juice) and Operating Costs 18.00 16.92 BURDEKIN YIELD AND OPEATING COSTS
16.00
14.00 12.45 12.00 Operating Costs / Tray 10.00 9.56 9.4 9.3 Yield t / Ha 8.00
6.00 5.6
4.00
2.00
0.00 F2011 F2012 F2013 Mareeba/Dimbulah Yield (Incl. juice) and Operating Costs
MAREEBA / DIMBULAH YIELD AND OPERATING COSTS 30.00
25.00 25.33
20.00 Operating Costs / Tray
15.00 17.28 16.08 Yield t / Ha
10.00 9.0 7.2 5.00 4.9
0.00 F2011 F2012 F2013 N.T. Yield (Incl. juice) and Operating Costs
25.00 N.T. YIELD AND OPERATING COSTS
20.00 19.60
17.66 15.00 15.95 Operating Costs / Tray
Yield t / Ha 10.7 10.00 9.2 7.4
5.00
0.00 F2011 F2012 F2013 Southern Region Yield (Incl. juice) and Operating Costs
30.00 SOUTHERN REG. YIELD AND OPERATING COSTS
25.00 25.82
20.00 19.60 Operating Costs / Tray
15.00 Yield t / Ha
10.00
6.3 5.00 4.6
0.00 F2011 F2012 F2013 Top 10 and Sum Up (Top 10 = Top 10 most profitable farms per 7 KG Tray Equivalent) Attributes of the Top 10 Top 10 as % Total Group Top 10 % of Sample of Industry Ha (*) 5,021 962 19% 1% Trees (*) 925,000 157,600 17% 5% Trays (*) 5,571,287 915,913 16% 4% % Packed to Premium and A Grade 91% 91% % Packed to Sizes 12 to 24 78% 70% Top 10: 80% production was in the N.T (5 Farms) , 20% production Mareeba / Dimbulah (5 Farms) Yield tonne / ha 8.53 6.70 Variety Mix - Top 10 % Premium 63% 67% (by Volume Produced ) % Sizes 18 – 22 39% 67% KP 56% Gross Return / Tray 19.67 26.28 Calypso 20% Operating Costs / Tray 16.28 15.71 R2E2 13% Operating Costs as % of Gross Revenue 83% 60% H - Gold 7% EBITDA / Tray 3.99 10.57 Keitt 2% EBITDA as % of Gross Revenue 20% 40% Brooks 1% Top 10 as % Total Group Top 10 % of Sample of Industry
Ha (*) 5,021 962 19% 1%
Trees (*) 925,000 157,600 17% 5%
Trays (*) 5,571,287 915,913 16% 4%
% Packed Premium & A Grade 91% 91%
% Packed to Sizes 12 to 24 78% 70%
Top 10: 80% production was in the N.T (5 Farms) ,
20% production Mareeba / Dimbulah (5 Farms) Variety Mix - Top 10 (by Volume Produced )
KP 56%
Calypso 20%
R2E2 13%
Honey Gold 7%
Keitt 2%
Brooks 1% Total Group Top 10
Yield tonne / ha 8.53 12.3
% Premium 63% 67%
% Sizes 18 – 22 39% 67%
Gross Return / Tray 19.67 26.28
Operating Costs / Tray 16.28 15.71
Operating Costs as % of Gross Revenue 83% 60%
Cash Profit (EBITDA) / Tray 3.99 10.57
Cash Profit (EBITDA) % of Gross Revenue 20% 40% VARIANCE TOP 10 REMAINDER VARIANCE (Top 10 V. TOP 10 OVER THREE YEARS (Per Tray) (Per Tray) + / - % Remainder
Gross Revenue Received 24.58 17.93 6.65 37% Employment 3.50 6.28 (2.78) -44% Marketing and Ripening 2.67 2.82 (0.15) -5% Freight 2.12 2.84 (0.72) -25% Packaging 1.60 2.94 (1.34) -46% Consultants / Contracting (Incl. Cont Packing) 1.30 2.67 (1.37) -51% Chemicals & Fertilizers 0.91 1.71 (0.80) -47% Repairs & Replacements 0.82 1.05 (0.23) -22% Other Costs 2.53 3.37 (0.84) -25% TOTAL OPERATING COSTS 15.46 23.68 (8.23) -35% CASH PROFIT PER TRAY SOLD 9.42 2.20 7.22 328% Yield (Tonnes per Hectare) 7.09 7.29 0.20 3% Average Financials Over 3 Years Per Tray Per Producing Per Tonne % of Sales Equivalent Ha
Total Gross Income (*) 19.67 2,810 24,109 100%
CASH PROFIT (EBITDA) 3.39 484 4,156 18%
Total Operating Costs 16.28 2,326 19,954 82%
Total Employment Costs 4.23 604 5,183 22%
Total Labour & Contractor Costs 5.99 856 7,345 31% Major Costs – Over 3 Years
Per Per Tray Per Tonne Producing % of Sales % of Costs Equivalent Ha Employment Costs 4.37 624 5,010 22% 27%
Marketing and Ripening Fees 2.15 297 2,551 11% 13%
Freight 2.00 286 2,451 11% 13%
Packaging & Pallets 1.97 282 2,419 10% 12%
Consultants and Contracting 1.24 178 1,524 7% 9%
Chemicals and Fertilizers 1.14 163 1,399 6% 7%
General 1.00 143 1,230 5% 6%
Repairs & Replacements 0.74 106 910 4% 5% "Median" Sized Farm (Average Performance)
Farm Area 38 Producing Hectares Farm Production (@8.5 t / ha) 46,428 Tray Equivalents Gross Return / tray 19.67 $ / Tray Equivalent Revenue from Mango Sales 913,239 $ Income
Per Tray $ Per Tonne Per Producing Ha % of Sales Equivalent
Total Produce Sales Income 913,239 19.67 2,810 24,033 100%
Total Employment Costs 202,919 4.37 624 5,340 22% Marketing and Ripening Fees 99,870 2.15 307 2,628 11% Freight 95,980 2.07 295 2,526 11% Packaging & Pallets 94,701 2.04 291 2,492 10% Contracting & Consultants (Excl. Contract Packing) 59,679 1.29 184 1,570 7%
Chemicals & Fertilizers 54,794 1.18 169 1,442 6% General 48,163 1.04 148 1,267 5% Repairs & Replacements 35,617 0.77 110 937 4% Contract Packing Fees 24,993 0.54 77 658 3% Power and Gas 16,155 0.35 50 425 2% Fuel & Oil 13,389 0.29 41 352 1% All Other Operating Costs 34,996 0.75 23 267 4% TOTAL OPERATING COSTS 781,255.90 16.23 2,319.27 19,905.09 86%
EBITDA (Cash Profit) 131,983 3.39 491 4,128 14%
Assume initial investment and / or LAND plus establish costs and maintaining the orchard to maturity per Ha = $ 25,000 $ 30,000 $ 35,000 $ 40,000 $ 45,000 Capital Invested $ 950,000 $ 1,140,000 $ 1,330,000 $ 1,520,000 $ 1,710,000 30% Gearing results in Interest costs of $ 28,500.00 $ 34,200.00 $ 39,900.00 $ 45,600.00 $ 51,300.00 Return on Investment $103,482.86 $ 97,782.86 $ 92,082.86 $ 86,382.86 $ 80,682.86 ROI % 10.89% 8.58% 6.92% 5.68% 4.72%
THIS ASSUMES FARM PERFORMANCE OF: Yield 8.5 T / HA (7.4 trays / tree at average density of 165 trees /ha ) Gross Return / Tray $19.67 Net Return (After Marketing & Ripen) / Tray $ 17.52 Operating Costs / Tray $16.23 “Key Issues / Hit List”
% Of Per Tray Per Producing Per Tonne % of Sales Operating Equivalent Ha Costs
Total Employment Costs 4.23 604 5,183 22% 26%
Marketing & Ripening Fees 2.15 297 2,551 11% 13%
Freight 2.00 286 2,451 11% 13%
Packaging & Pallets 1.97 282 2,419 10% 12%
Consultants and Contracting 1.24 178 1,524 7% 8%
Chemicals and Fertilizers 1.14 163 1,399 6% 7%
TOTAL 12.73 1810 15527 0.67 78% “Key Issues / Hit List”
• Price ?? • Labour • Marketing • Freight • Packaging • Contracting • Chemicals and Fertilizers • Yield “Key Issues / Hit List”
• Labour (26% of Costs) 1. Process Re-engineering ? 2. Using management information ? 3. Speed / efficiency setting - (technology verses human oversight) 4. KPI system developed ? “Key Issues / Hit List”
• Marketing & Ripening (13% of Costs ??) • Marketing what ? • Feedback systems ? • Information / Knowledge ? • Accessing key data sets ? • Nielsen ? • Aztec ? • Marketing what – impact on on-farm practices “Key Issues / Hit List”
• Freight (13% of Costs) • Relationship between carton design & pallet space / cube use ? • Relationship between freight costs and sourcing packaging ? “Key Issues / Hit List”
• Packaging (12% of Costs) • Imports • Imports V Freight Costs “Key Issues / Hit List”
• Contracting (8% of Costs) • (Does not include Contract packing (3% across BM Group) “Key Issues / Hit List”
• Chemicals & Fertilizers (7% of Costs) • In Other Words – Nutrition and Pest Management • NUTRITION……… • Resulting Yield (of what) • Grade • Size ‘The Bucket List’
• Yield • What is the “driver hierarchy” • Nutrition ? • Pruning ? • Irrigation ? • Sources of Information ? • Ongoing benchmarking / industry and process and analysis, and data focus