Operating Model

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• Overview & contents
• 1. Executive Summary
• 2. Investment Thesis
• 3. Company and Business Overview
• 4. Problem, Customer Need and Value Proposition
• 5. Products and Services
• 6. Industry Analysis
• 7. Market Analysis and Sizing
• 8. Customer Analysis
• 9. Competitive Landscape
• 10. Business Model
• 11. Go-to-Market Strategy
• 12. Operating Model
• 13. Management and Organisation
• 14. Strategic Plan
• 15. SWOT Analysis
• 16. Risk Analysis
• 17. ESG and Sustainability
• 18. Implementation Roadmap
• 19. Financial Plan
• 20. Assumptions Framework
• 21. Funding Requirement and Structure
• 22. Break-Even and Debt Serviceability
• 23. Investment Case and Valuation
• 24. Sensitivity and Scenario Analysis
• 25. Key Performance Indicators and Management Dashboard
• 26. Conclusion
• A. Appendix A: Assumption Register
• B. Appendix B: Conditions Precedent to Drawdown
• C. Appendix C: Index of Exhibits and Tables
• D. Appendix D: Glossary

12.1 The production calendar

The company’s financial year is set to end on 31 October precisely so that a complete crop cycle falls inside a single reporting period. Land preparation begins in September, planting runs through November and December, the crop grows under irrigation from January, harvest runs July to September, and dispatch runs July to October. A financial year end at any other point in the calendar would split the cycle and make the accounts materially harder to interpret.

Table 25. Annual production calendar and its cash consequences.

The year-end balance sheet is close to the least informative snapshot of this business available

At 31 October the crop has been harvested, sold and largely collected, and the next crop is not yet in the ground. Net working capital at FY2031 is R10.58m. The June peak requirement is R26.1m, two and a half times the year-end figure. Conventional working capital ratios are correspondingly misleading: days sales outstanding of 32 looks excellent, and days inventory of 72 looks unremarkable, but neither captures the eight-month period during which the company has spent everything and received nothing. Section 21 sizes the seasonal facility from the monthly model rather than from the annual balance sheet for this reason.

12.2 Land, water and rotation

The company leases whole farms rather than isolated blocks. Leasing preserves capital for infrastructure and planting material at exactly the point in the cycle when the company is least certain of its ultimate scale, and it allows the rotation footprint to expand without a corresponding land purchase. At 504 controlled hectares by FY2031, purchasing the footprint would require R150m or more of capital that would earn nothing while resting.

Table 26. Land footprint and cost. Note the divergence between the headline lease rate of R15,000 per hectare and the R50,000 per planted hectare the business actually bears.

Land selection matters more in ginger than in almost any other crop, because soil history cannot be corrected. The company plants only on land with a documented absence of ginger, potato, tomato and tobacco in recent rotations, all of which host the same wilt organism. Soil testing before lease commitment is treated as a condition precedent rather than as an operational step, and the technical and plant health manager holds a veto over any block that fails screening regardless of its commercial attractions.

Water is fully allocated to the crop. Ginger under Limpopo summer conditions requires reliable irrigation from January through the bulking phase, and a curtailment during that window is a yield event rather than an efficiency event. Water use entitlements are verified for the FY2029 planted area across the leased footprint before drawdown, and on-farm storage is installed to buffer short interruptions.

12.3 Field operations, harvest and post-harvest

Ginger is planted into raised beds under drip or micro-sprinkler irrigation and mulched heavily to conserve moisture and suppress weeds. Harvest at eight to ten months is by hand or with a modified lifter. Post-harvest handling determines how much of the crop is actually saleable, and the marketable share assumption of 88% is a packhouse outcome, not a field outcome. A five-point movement in marketable share is worth R3.4m of FY2031 revenue, comparable to a 6% movement in the fresh price.

Table 27. Post-harvest process specification.

12.4 Capital expenditure and asset base

Table 28. Capital expenditure schedule, depreciation and net book value. Depreciation is straight line over asset lives of 7 to 15 years with a half-year convention in the year of addition.

A material point on leasehold risk: R42.55m of infrastructure is installed on land the company does not own. The leases are therefore negotiated with improvement clauses providing either for compensation at depreciated value on non-renewal or for a right of removal, and with renewal options extending beyond the plan horizon. An investor should treat the enforceability of those clauses as a diligence item of the same weight as the soil history, because without them a substantial part of the capital expenditure is at the landlord’s discretion at lease expiry.

12.5 Quality, compliance and systems

• GLOBALG.A.P. certification for the fresh crop, required by every national retail programme and audited annually.
• Plant Improvement Act compliance for the certified seed business, including registration, record keeping and traceability of mother material.
• Agricultural Pests Act obligations relating to the movement of plant material between districts.
• Residue and food safety management including a spray programme aligned to maximum residue limits in the destination market, with full block-level records.
• Farm management software linking block records, spray records, irrigation scheduling, laboratory indexing results and packhouse output to a single traceable identifier per block per season.
• Occupational health and safety compliance across field, packhouse and cold store operations, with particular attention to the cold store and to mechanised lifting equipment.