Jalilabad AgroBusiness Company Final Report Written by Azer Humbatov Jalilabad, Azerbaijan 2003
This presentation provides a general overview of JABC and the results achieved at the project’s end (data as of July 31, 2003) JABC Mission Statement Provide high-quality financial and agricultural services to rural entrepreneurs, SMEs and INGOs in Southeastern Azerbaijan. Table of Contents Background Highlights Agro-services Training Artificial insemination Cooperation with INGOs Revenues Balance Sheet
Background • ACDI/VOCA began the process of creating Jalilabad AgroBusiness Company (JABC) in August 2001. JABC was formally established in December 2001 by obtaining a registration certificate from the Ministry of Justice in December 28, 2001. The following steps were taken in the JABC creation process: • ACDI/VOCA started the process by selecting a region (Jalilabad) that was conducive for agricultural/agribusiness activities. Later followed the hiring of two employees (an agronomist and a zoo-technician). The employees were selected as a result of rigorous training programs and intensive job interviews. • Selected candidates were taught how to start up an organization like JABC; how to write business plans; how to assist clients in establishing successful associations; how to link up with other donor funded programs and how to become a self-sustainable organization in near future. The candidates were shown ways to collaborate with the Azeri Rural Credit project, and CredAgro in particular, as well as agribusiness companies located in other parts of the country. Specialized trainings were provided to the employees targeting the enhancement of their computer and word processing proficiency. • In October 2001, JABC “opened its doors” for business. The company started off by offering merely business planning but shortly added other fee-based services, such as agro-services and land treatment/cultivation to the Jelilabad farmers and other entrepreneurs. • As of January 1 2002, JABC established its own bank account and the separate from CredAgro budget and, with this, became a fully independent entity operating as subsidiary of CredAgro.
JABC Agroservice was established in November 2001. The company made a small investment into a seed driller and, simultaneously, entered into leasing contracts with the area farmers who owned other agricultural machinery and equipment. JABC rented idle machinery/equipment and provided agro-services to needy farmers. JABC charged fees just high enough to cover its lease costs with a little margin above that contributed to increase in the company revenues. In cooperation with other farmers in year 2001, JABC provided seed drilling on 96 ha of wheat field. At the beginning of year 2002, with generated revenues, JABC purchased yet another piece of equipment, this time a fertilizer spreader. As a next step, the Company invested resources into fertilizers and began selling two-in-one service package whereby a farmer not only contracted JABC for spreading, but purchased fertilizers from the company as well. As a result of the “horizontal” integration, JABC sold six metric tons of fertilizer and spread 73 hectares of land. Subsequently, JABC purchased: a harvester “NIVA-SK5”, a tractor “MTZ-82”, a trailer “2-PTS-4”, a plow “PN-3-35”, two cultivators “PRVN-2.5” and a furrow. JABC financed capital purchases partly through retained earnings from business activities and partly with the loan received from CredAgro at a slightly lower (14%) than the commercial interest rate CredAgro charges other clients (18%). In summary, during 2002/2003, JABC provided following services to rural entrepreneurs: a) fertilizer sales and its application; 2) seed drilling; 3) plowing and furrowing; 4) harvesting; 5) transportation, and other services. In addition, JABC offered technical training in crop cultivation, fertilizer application and disease control. JABC Agroservice serving Jalilabad farmers Agroservice
JABC conducted several farmer training seminars for beneficiaries of other donor funded programs such as IFDC and Mercy Corps. JABC provided on-site trainings to IFDC farmer-beneficiaries on proper fertilizer application and usage. On-site training for IFDC beneficiaries As result, in 2002, the farmers who followed JABC recommendations were able to “enjoy” the record high wheat harvest in Jalilabad. Similarly, JABC experts conducted a month-long artificial insemination training to Mercy Corps beneficiaries. Artificial Insemination training for Mercy Corps beneficiaries Training for IFDC beneficiaries Training
In February 2002, JABC became involved in the Artificial Insemination (AI) project financed by the Dutch government. JABC zoo-technician was invited to Ismaili where he was put through extensive AI training program. Upon completion of the training, the company received as grant all necessary equipment for performing AI and invested own resources in training and purchasing of quality bull semen. In May 2002 JABC officially began offering AI service in Jalilabad. During first eight months ending in December 2002, JABC performed 67 inseminations. In the seven months of 2003 JABC performed 99 inseminations. The clients that “entrusted” JABC with their cattle, have now received 41 much improved species of calves as a reward. Currently JABC is actively involved in the Mercy Corps administered “Cluster Access to Business Services” program. The program’s goal is development of veterinary services and provision of quality AI in southeastern Azerbaijan. As part of the project, JABC experts provide training for selected veterinarians and zoo-technicians. Artificial Insemination
Cooperation with INGOs The very first INGO that JABC established business relations with was ACDI/VOCA (In fact, ACDI/VOCA founded JABC as CredAgro’s subsidiary). JABC received a small grant from ACDI/VOCA to establish self-sustaining consultancy group operating as a fee-for-service provider in the Jalilabad region of Azerbaijan. A portion of the grant was used to develop and enhance institutional capacity of JABC itself. Now JABC boasts 68 long-term contracts with farmers providing various types of consultancy services to them. The contract with ACDI/VOCA was followed by the project with the Dutch government to provide Artificial Insemination services. The Dutch gave JABC an equipment grant for AI allowing the company to perform 166 inseminations in just 15 months of operation. In October 2002 JABC signed a short-term contract with IFDC to conduct agricultural consultancies to IFDC beneficiaries. in January 2003, however, JABC received a longer-term contract from IFDC and became IFDC’s official fertilizer dealer/distributor in five regions of southeastern Azerbaijan. In April 2003 JABC was selected by Mercy Corps to become a part of the “Cluster Access to Business Services” project and conduct trainings for AI operators. Currently JABC closely collaborates with number of for-profit and nonprofit (both Azeri and international) and governmental organizations.
2002 January-July 2003 Gross Revenues in USD