Thrive Agric Founders Issue Statement to Customers Over Delay in Payouts

Thursday, October 08, 2020 /08:14 AM / Press Release By Thrive Agric/ Header ImageCredit: Thrive Agric

By now, you may be aware that payouts forsome farm subscriptions are delayed. This is an unfortunate outcome ofthe COVID-19 pandemic and its consequent restrictions on physical access tofarms and farming markets. Like many other businesses, we were not fullyprepared for the impact, and despite the intent upon which this company hasbeen run for the last 3 years, our subscribers now bear the brunt of thesechallenges with us.

We are issuing this statement to conveythree things:

First, to once again express our deepestapologies that subscriber payouts are delayed. Second, to share our plansto resolve this issue. And third, to reassure you that Thrive Agricremains a viable business that Nigeria needs.

Catching up on the payouts

Thrive Agric's primary revenue source isbased on a successful harvest (inclusive of crops and poultry). Therefore,any revenue coming into the business is synchronized with the success of theoperation and timing of sales. When a planting season or harvest is lost,like we did this year, Thrive Agric can only hope to earn such lost revenuesfrom subsequent harvests. In our case, we have previously communicated tosubscribers that we would meet our obligations based on overdue payments fromoff-takers. Some of those payments have come in, but not nearly enough tomeet our obligations to subscribers. We hoped they would, but they didnot.

In the last week, we have communicatedtimelines for repayment to our subscribers of up to 24 monthsdepending on the specifics of their subscription. We expect to payout beforethe committed due date, but in the past, we have been aggressive in ourexpectations and not met them. We do not want to continue to disappointour customers so we have given a timeline that we can more confidentlykeep. We are taking steps to beat this timeline, but experience has taughtus to be more realistic. We fully understand our customers' frustrationas the business is in the same position of linking obligations to expectedpayouts, only to have the schedule change.

We remain committed to our mission toenable agriculture, combat food scarcity, and build local wealth in Nigeria andbeyond. We still believe that dream to remain valid, despite the currentchallenge. We also remain committed to our subscribers and will pay ALLoutstanding subscriptions as quickly as we can.

The Pandemic and It's Effects on Thrive Agric

The COVID-19 pandemic and thesubsequent movement restrictions in Nigeria and neighboring countries, greatlyhampered business operations that generate the returns on your investment:

Border restrictions restricted the availability of farming inputs (feed, fertilizers, and agrichemicals)
The price of farming inputs increased dramatically and fluctuated frequently, reducing the number of farmers we could support within our original budget
Due to isolation and the restricted movement, we could not physically reach the farmers to give them much needed farm inputs, reducing farming activities
Major offtakers stopped production, in order to design safety measures to protect their staff and the food they make for the market

Our business has been hit veryhard. All of these factors have had a ripple effect through theorganization and reduced operations well below normal levels. In summary,the combination of more expensive inputs, restricted distribution and constrainedmarkets reduced business earnings. Like many others around the world, nothingprepared us for this unpredictable challenge.

Now that lockdown restrictions haveeased, business operations are picking up, we look to a bountiful harvestat the end of the year to get back on our expected trajectory.

Operations are indeed returning tonormal:

Rainfall has been optimal which is indicative of a good yield
Eased movement restrictions now allow distribution of inputs to farmers and for harvest operations to commence
We have begun to redesign our operations such that we put better risk management in place to avoid a recurrence of this scenario
We have also put repayment plans with our offtakers that owe the business and expect those funds to start coming back in
The market for the 2020 harvest has begun to open up as sales calls have commenced

As operations pick up, so willpayments.

Further Communication withCustomers.

Also, over the past week, we communicatedour current business challenges, our inability to process payouts to oursubscribers, timelines for these repayments as well as the processes we areputting in place to steer the business to full recovery and fulfill ourcommitments to our subscribers in full.

We have also put together answers tofrequently asked questions about the status of current farm subscriptions onThrive Agric available here. Also,we have kept all our communication lines open for more questions, and as we getthem from our subscribers, we will constantly update this page with moreanswers as we go.

We took it a step further to invite ourcustomers via their subscribed emails to register for zoom calls to addressthese concerns and also to cover any questions that we may not haveaddressed. These are dated Friday, October 9, 2020, 4pm and Saturday,October 10, 2020, 11 am.

Disclaimer

Please note that the statement above is that of thefounders of Thrive Agric and not the position of Proshare. The information is considered to beuseful and informative for subscribers to Proshare.