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Quarterly Report back on the Good White Meat Rabbit Company

Share Class C

Our operating partner in the rabbit sector walked away with a selection of trophies at the Nama ePhepha Challenge Abattoir Awards 2019. They won prizes in both low and high through-put, as well as the best abattoir in Gauteng categories. They were presented the awards by the Department of Agriculture and Rural Development on the 24th January 2020.

The hands on and energetic industry visionary, Hennie Viljoen, has successfully united more than 80 (and the number keeps growing), existing rabbit farmers across the country under RASA (Rabbit Association of South Africa). As some investors may be aware, the rabbit industry went through a tumultuous three years under the previous abattoir owners. Under Hennie and his team’s leadership, in excess of 240 jobs have been salvaged since October 2019 with more being generated monthly as new rabbit farmers come on stream.

Further news on the abattoir is that it passed the HACCP (Hazard Analysis and Critical Control Point) audit. This has opened-up numerous export opportunities that will prove very valuable, particularly as the Rand continues to weaken.

Hester Bibbey’s marketing team finalised the re-branding and packaging trademarks, which will now start to be displayed in the numerous butcheries and meat retail outlets in a number of key cities across the country. Despite the lock-down under Covid-19, new off-take agreements have been secured, together with two multiple-ton export contracts into East Africa and Qatar.

Currently, many farmers are growing their herds and increasing their breeding stock, leading to a larger through-put at the abattoir in quarter three. This has exceeded our investment committee’s forecast for the rest of 2020 (underC-19, lockdown).

For investors interested in statistics, the first quarter yielded 39,950kg at the abattoir, consisting of 29,020 rabbits, of which 92% were A-Grade (export) quality. The abattoir’s slaughter capacity is 44,000 rabbits per month. Between April 2020 and June 2020, the number of empowered farmers steadily increased boding well for ramping up production to meet the newly signed off-take agreements.

Unfortunately, a set-back of theft at the abattoir resulted in disciplinary hearings and the dismissal of all but 6 workers – including the manager. Criminal charges were laid at the Carletonville Police Station. New staff were recruited and properly trained. Provision has been made for a dramatically improved security system.

Two highlights of the second quarter were: the ongoing development of a proprietary IT software system, exclusive to the rabbit industry, as well as the launch of the rabbit industry marketing campaign starting with the leading producer’s web-site going live. This bodes well for the strong marketing focus the industry has implemented for the third and fourth quarters of 2020.

In conclusion, our operating partners have resurrected the abattoir, despite inheriting a “broken industry”. Improved leadership and stewardship have already resulted in incremental growth and numerous milestones being achieved. Lingering negative sentiment is still displayed by some sceptical former producers and consumers, who are watching the Good White Meat Rabbit Company closely, to see how the industry fares under the stewardship of RASA.

RASA and its leadership are confident that they will succeed in the mission of becoming the leading industry player in SADC. This brings to mind the slogan by which they have operated over the past six months – to quote Dave Brinkley: “A successful man is one who can lay a firm foundation with the bricks others have thrown at him.”

Impact Empowerment Ventures’ investment committee is very proud of the hard work and growth this Agri-tech Share Class has achieved in a short space of time. We congratulate Hennie and the operators on the successful first six months, industry consolidation and incremental growth. Keep up the great work.

Kind regards,

IEV Investment Committee

August 2020

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