INTERNATIONAL BUSINESS EXPANSION PLAN

2. INTERNATIONAL BUSINESS EXPANSION PLAN ADNAN ANWAR NICHOLAS BIANCHI JENSON DUNN FAISAL RAZA ARTHUR URATANI Assessing the Feasibility of Sugar and Ethanol Operations in Ghana STRT 571-45 INTERNATIONAL BUSINESS ENVIRONMENT

3. SNAPSHOT OF GHANA Population 23,387,000 Area 238,535 km2 GDP $35.8 billion GDP per capita $1,500 Currency Ghanaian Cedi (GHS) Tropical climate Wet and Dry season • 28% of population live below international poverty line ($1.25/day) • Agriculture accounts for 37% of GDP with the sector employing 56% of workforce • Two-party democratic system • Independent central bank (Bank of Ghana)

4. ADVANTAGE: GHANA • Political Factors • Two dominant but moderate political parties • Central tendency acts as strong deterrent to radical policy change • Relatively low perception of corruption for a developing country • Monetary Policy • International Monetary Fund (IMF) oversight • Inflation targeting framework • Fiscal austerity measures • Geography • Close proximity to Europe • Coastal country • Ideal climate for sugarcane cultivation Ghana Economic Free Zone Incentives • 0% tax rate for agriculture/industrial plant, machinery and equipment imported for investment purposes • Low upfront capital investment costs • 100% ownership of share by any investor • 0% tax on profits for 10 years; no greater than 8% thereafter • Guaranteed protection against expropriation

5. OPPORTUNITY: EUROPE • The European Union (EU) has set a mandatory target of 20% biofuel incorporation by 2020 • Increasing disparity between biofuel demand and supply in EU member states TAKE A CLOSER LOOK BIOMASS ACTION PLAN (EU) • Further promotion of renewable energy sources • Security of supply and sustainable energy in Europe • Preparation for the large scale use of bio-fuels • Heightened cooperation with developing countries in the sustainable production of bio-fuels

6. PRODUCTS Sugar – to serve Ghana’s demand Ethanol – to serve Europe’s demand Growing demand in Europe Imports originating in Brazil totaled approx. 400 million gallons in ‘08 • $530 million in sugar imports over the last five years • Upward trending regional demand of 2.3% per year • Energy Self-Sufficient: Sugar Byproduct (bagasse) can be burned as fuel Ghana – the perfect fit • Abundance of affordable labor • Food industry tax incentives • Savannah Accelerated Development Authority (SADA) have acquired thousands of hectares of land for varied agricultural initiatives including sugarcane • Government incentives for export-oriented industry • Low transportation costs to target market

8. CARGILL CAPABILITIES AND EXPERTISE • 138,000 employees in 68 countries • Net earnings of $3.33 billion (FY ‘09) • Other revenues of $116.6 billion (FY ‘09) • Fourth largest biofuel producer in U.S. • Dedicated branch (Cargill Sugar) focused on sugar and ethanol opportunities • Environmentally certified with the International Organization for Standardization (IOS) RELEVANT EXPERIENCE • Sugar processing and ethanol production in Brazil • Footprint in Europe (biodiesel capabilities) • Existing operations in Ghana

9. STRATEGY Greenfield Investment • 65,000 acres (43,000 acres for ethanol, 22,000 acres for sugar) • [Domestic Market Seeking] Full capacity of 352,000 metric tons of sugar per year (using average yield of 16 metric tons per acre) • [Cost Reducing / Resource Seeking] Full capacity of 26 million gallons of ethanol per year for export SUSTAINABILITY Economic Social Environmental

10. DRAWBACKS AND RISKS TAKE A CLOSER LOOK THE SUGARCANE TRAP • Tradeoff between food and fuel • Limited arable land and water supply • Heightens fears of corporate greed Product Price Stability - future ethanol vs. petroleum prices Currency Risk – government activities suggest stabilization Energy Reliance – growing resistance to dependence on foreign fuels Corruption Risk – prior history, lack of transparency controls

12. Sugar Prices