Green / Poly House Farm (Fresh Cut Roses) [Rs. 8.7 million, Sep-2018]

Green / Poly House Farm (Fresh Cut Roses) [Rs. 8.7 million, Sep-2018]
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01 October 2018
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Growing cut flowers especially roses is a profitable business, as they are the most traded flowers around the world. Local demand for cut flowers is growing tremendously due to increased usage especially decorative items in weddings, birthday parties, and other social gatherings.
Production of high quality fresh cut roses, requires proper green / poly house with a controlled environment. An important aspect of using a greenhouse is that high quality flowers can be produced all year round, irrespective of the weather changes. Additionally, it also increases annual production of fresh cut roses three times compare to open cut flower farms. Low cost of labor combined with reasonable land lease rates and a suitable climate for most part of the year makes investment in this business a lucrative proposition.
On average 12,000 rose plants will be sowed on 1 acre of land on four green / poly houses that will produce 2.16 million flowers per year. However, 20% of the total production goes to rose petals. Capacity utilization during first year of operation is assumed to be at 40%, whereas capacity utilization growth rate for subsequently years will be considered 20%. The maximum capacity utilization is worked out at 80% in the 3rd year of operation.
The cost for setting up the proposed green / poly house farm for fresh cut roses on 01 acre land is Rs. 8.71 million out of which Rs. 8.34 million is capital cost and Rs. 0.37 million is for working capital. The farm will provide employment to 3 individuals in addition to seasonal labor for picking and pruning etc. The project is proposed to be financed through 50% debt and 50% equity. The project NPV is projected Rs. 4.19 million, with an IRR of 25% and a payback period of 4.34 years. The legal status of the business is proposed as ‘Sole Proprietorship’.
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