Private Placement Memorandum - Agrimex Capital

III Investing in banana production
MARKET OPPORTUNITY
Banana is the world´s 4th largest agricultural commodity by volume and consumption. In
the United States alone, the market is 4.1 million banana boxes per week, which is the
equivalent of 1.7 bananas per U.S. habitant or 410 million bananas.
From an investment perspective, banana production has generated returns between 25%
to 29% after tax on average on a yearly basis for the past 20 years. The downside of these
investments has been the price volatility in the market. The volatility in prices brings much
uncertainty to producers who are willing to put more capital into producing higher volumes
but are not sure of the sale price. Agrimex Capital has secured a contract which will enable
the firm to sell bananas at a fixed price for the next 5 years thus eliminating any market
risk.
There is a growing demand from large International Companies to source fruit from very
fertile Chiapas, Mexico, mostly for logistical purposes and to move away from politically
unstable Central and south American countries where they have found it complicated to
have a consistent stable supply.
There are three main reasons why this demand surged and why they look to Mexico as
their future supplier:
High quality product. The Chiapas region has some of the best soils in the world
for the production of tropical commodities that combined with a very hot and humid
weather give path to very high quality production at high yields.
High supply potential and efficiencies. The median yield for technologically
advanced plantations in the region is 3200 boxes per year per hectare, where in
other regions the yield is much lower, such as in Ecuador and Honduras where the
yield is around 2000 boxes a year per hectare. Agrimex Capital focuses on the cost
of production per box, all things being equal; the higher yield per hectare gives a
higher return per box. This allows the international companies to get better prices in
this region because producers can supply more efficiently.
Geographical location. The geographical location of Agrimex I Banana Project is
of great logistical advantage for the U.S. market because of the cost savings this
generates by the shorter distance compared to other Banana ports.