Investors purchase or supply weaners (calves weighing an average of 230 kg) to A2 Beef. A2 Beef process, feed and manage the cattle at their cost for an average of 150 days. At the end of the 150 day cycle the cattle are sold and the net profit (the profit after purchase price, process costs and feed costs have been deducted) is shared according to a 50/50 profit sharing ratio. The cattle remain the property of the investor and therefore serve as security for the investment. Currently two investment models are on offer.
The investment is for any investor. A minimum amount of R250 000 must be invested.
This amount is taken to market and 230 kg weaners are purchased on behalf of the investor by A2 Beef. The weaners are then processed at a cost of R350 per calf, which is carried by A2 Beef at this point. The processing cost includes weighing, tagging, a full inoculation program as prescribed by the VET as well as transport costs. The investor’s cattle are tagged with a unique series and number and kept together in one pen throughout the duration of the 150 day cycle.
The cows are fed for a period of 150 days at a cost of R25 per day. This cost is also carried by A2 Beef at this point. The cows will grow at an average of 1.60 kg per day. This is a sustainable growth rate that has been achieved over the past 3 years.
After a period of 150 days the cows are sold to the abattoir. The purchase price, feeding costs and the processing costs are deducted from the proceeds received from the sale of the cattle. The net amount remaining (profit) is split between the investor and A2 Beef on a 50/50 basis.
This investment will yield a minimum return of 15% per annum for the investor however returns of up to 30% can be attained should the market be going through a good cycle. A realistic 5 year average return of around 22% per annum can be anticipated.
This investment is for farmers who supply weaners to A2 Beef to be fed at the feedlot. A minimum of 150 head of cattle must be supplied at the start of the investment.
The weaners must be provided by the investor and delivered to the A2 Beef feedlot. A market related value (the initial cost) is agreed upon between the investor and A2 Beef on delivery of the weaners to the feedlot. A2 beef will then feed the weaners for an average 150 days depending on the weight of the weaners when they are delivered to the feedlot. All process, feed and medication costs are carried by A2 Beef.
The weaners are fed for an average of 150 days and the cattle are then sold to the abattoir when they reach an average live weight of 480 kg.
Once the cattle have been sold the investor will receive the initial cost plus R 1000 per calf.This investment will thus yield a return of 27% to 32% per annum for the investor.