MERLOG FOODS

Merlog Foods Presentation DTI, US EMBASSY & USAPEEC SEMINAR Importers Guide Poultry Meat Importers 1-3 March 2016, Pretoria Presented by Georg Southey

Merlog Foods Presentation DTI seminar Background to Merlog Size of South African Chicken Market Capital requirements Import process HDI (new importer) solution Questions

Merlog Foods Presentation Background to Merlog Started from a home office in 1994 (son and father) Offered logistics services Grown over 22 years to become one of the largest WHOLESALE, DISTRIBUTION, and IMPORT Businesses in SA Distributes 7 – 10,000 metric tons per month Equivalent to fcl (full container loads) per month Product make up: 60% frozen chicken

Merlog Foods Presentation Background to Merlog

Merlog Foods Presentation Automated Cold Store (

Merlog Foods Presentation DTI Workshop Merlog operates from 2 warehouses Head office and warehouse in Cato Ridge; Kwa Zulu Natal 12,000 pallet positions Warehouse Heriotdale; Johannesburg 2,800 pallet positions Fleet of nearly 50 delivery vehicles and trailers

Merlog Foods Presentation SIZE of South African CHICKEN MARKET Annual Consumption 2,200,000,000 kg’s Imports (all cuts) 250,000,000 kg’s Local (all cuts)1,950,000,000 kg’s Bone in Chicken imports 160,000,000 kg’s USA Quota 65,000,000 kg’s USA Quota as % of current imports +-40 % Number of containers 650/qtr 2,600 pa

Merlog Foods Presentation Importing is not a get rich “scheme” Successful businesses are built over time: - Through: Market knowledge, trust, relationships, and reliability

Merlog Foods Presentation Capital required Estimate cost for 1 container of chicken portions: ProductChicken Leg 1/4 Quantity27 mt Price750$/mt Exchange RateR 16/US$ Product327,767 Duties101,870 Other23,901 Vat56,662 Total R510,200

Merlog Foods Presentation Process to Access Quota Quota application to DAFF DAFF assess applications and allocates Quota DAFF issues Quota Importer Applies for Rebate Permit from ITAC Importer Negotiate to purchase product from Supplier Importer Applies for Import permit from DAFF Product is shipped Import Clearing and customs

Merlog Foods Presentation Veterinary Inspection and release Sale of Product Delivery to customer Collect Payment from Customer Repeat, repeat, repeat……

Merlog Foods Presentation Administration –Negotiate price –Agree shipping period –Currency Hedging –Insurance –Clearing Instructions –Payment terms Supplier (Cash Payment before receipt of Goods (CAD)) –Payment terms Clearing Agent –Customer credit worthiness –Customer payment receipt (14 – 30 days)

Merlog Foods Presentation New Participants need a Coach or Mentor MERLOG FOODS JV with MFS 51% HDI : 49% MF MEGA FOOD SUPPLIES HDI HDI HDI (Quota Holders) Assistance with Sourcing, Logistics, Clearing, Marketing, Working Capital

Merlog Foods Presentation `

QUESTIONS? Thank You for the opportunity to present today

Merlog Foods Presentation