Tarlton Beetroot Business Plan — Operating Model: Post-Harvest, Packhouse and Logistics
Washing, grading, cold chain and delivery, and the pack-out discipline that converts tonnage into saleable product.
Section 14 of 37
Operating Model: Post-Harvest, Packhouse and Logistics
Jump to section
- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. Investment Thesis
- 3. Company, Structure and Stage of Development
- 4. Customer Problem, Value Proposition and Monetisation
- 5. Products, Portfolio and Unit Economics
- 6. Industry Analysis
- 7. Market Analysis and Sizing
- 8. Customer and Channel Analysis
- 9. Competitive Landscape
- 10. Business Model
- 11. Go-to-Market Strategy
- 12. Operating Model: Agronomy and Production
- 13. Operating Model: Post-Harvest, Packhouse and Logistics
- 14. Water, Energy and Land: The Three Binding Constraints
- 15. Management and Organisation
- 16. Strategic Plan
- 17. SWOT Analysis
- 18. Risk Analysis and Register
- 19. ESG and Development Impact
- 20. Implementation Roadmap
- 21. Financial Assumptions
- 22. Projected Income Statement
- 23. Projected Balance Sheet
- 24. Projected Cash Flow
- 25. Capital Expenditure and Working Capital
- 26. Funding Requirement and Structure
- 27. Break-even Analysis
- 28. Debt Serviceability
- 29. Investment Returns and Valuation
- 30. Sensitivity and Scenario Analysis
- 31. Phase 3: Processing Optionality
- 32. Key Performance Indicators and Management Dashboard
- 33. Conclusion and Investment Recommendation
- A. Appendix A: Monthly Projections, Year 1
- B. Appendix B: Detailed Assumptions Register
- C. Appendix C: Glossary
The packhouse is where the plan makes its money, and it does not exist until month 37.
Phase 1 and the first half of Phase 2 rely on third-party contract packing at Tarlton, costed at a R0.70 per kilogram premium over own-packhouse conversion in Years 1 and 2 and R0.20 in Year 3. This is a deliberate capital-efficiency choice: building a packhouse to serve one hectare would be indefensible, and the district has established packing capacity available on contract. The cost of that choice is a real margin give-away of roughly R0.20 million across Years 1 to 3, and a dependence on a third party for quality control during precisely the period when the Company is trying to prove consistency to retail buyers.
Table 21 Post-harvest process and cost, own packhouse from Year 3
|
Step |
Description |
Cost R/kg |
Applies to |
|---|---|---|---|
|
Field heat removal |
Harvest into crates, shade immediately, deliver to packhouse same day |
included |
All volume |
|
Wash and de-stone |
Drum washer with recirculated, chlorinated water and grit separation |
0.35 |
Fresh volume |
|
Topping and trimming |
Manual, to specification |
0.30 |
Fresh volume |
|
Grading |
Size grading to retail specification; Class 1, Class 2 and outgrade separation |
0.30 |
Fresh volume |
|
Hydro-cooling |
Reduce core temperature before packing |
0.22 |
Retail volume |
|
Packaging |
1 kg pre-pack film and label; or 10 kg market pocket; or bulk |
0.95 / 0.42 / 0.18 |
By channel |
|
Cold storage |
Two cold rooms, palletised, dispatch within 48 hours |
included |
Retail volume |
|
Distribution |
Refrigerated 4-tonne truck to distribution centre; own LDV to market |
0.62 |
Retail and market |
Total post-harvest cost ranges from R0.35 per kilogram on processing outgrade to R2.74 per kilogram on retail pre-pack. The retail channel therefore costs R2.39 per kilogram more to serve than the processing channel but returns R7.40 more, which is the entire economic argument for the packhouse.
Working capital consequences
Table 22 Working capital drivers
|
Driver |
Assumption |
Comment |
|---|---|---|
|
Retail receivable days |
32 |
Standard distribution centre payment terms |
|
Market agent receivable days |
14 |
Agent settlement after consignment sale |
|
Informal receivable days |
2 |
Effectively cash at the farm gate |
|
Processor receivable days |
30 |
Contracted terms |
|
Payable days |
34 |
Input suppliers on 30-day terms with some seasonal extension |
|
Growing crop |
3 to 4 months of field cost |
Biological asset carried at accumulated cost until harvest |
|
VAT refund lag |
1.5 months |
Output is zero-rated so the Company is permanently in refund; SARS verification drives the lag |
The migration to retail lengthens the cash conversion cycle exactly as it improves margin. Receivables rise from R0.02 million in Year 1 to R2.46 million in Year 5 while the growing crop asset rises to R0.92 million. This is the mechanism behind the base-case cash deficit discussed in Section 26: the more successful the channel strategy, the more working capital it consumes.
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