Verdant Fungi Farms Business Plan

Investor-ready mushroom farm business plan: R20.60m deployed, six growing rooms, 285 t button and 34 t oyster a year, R18.27m Year 5 revenue.

Verdant Fungi Farms — six shelved growing rooms producing button and oyster mushrooms

Business Plan & Investment Proposal · South Africa

Mushroom Farming Business Plan — South Africa, Oyster & Button

Verdant Fungi Farms (Pty) Ltd · Button For Volume, Oyster For Margin.

Six growing rooms producing 285 tonnes of button and 34 tonnes of oyster mushrooms
a year — within two hours of a metro market, near a Phase III compost supplier, with 1 680 m²
of shelved area at 6.7 crops a year and an oyster house processing 160 tonnes of substrate. R20.60 million
of capital: R12.40 million promoter and investor equity and R8.20 million term debt at 13.0 per cent
with a two-year capital moratorium.

R20.60mCapital deployed

319 tMushrooms a year

R18.27mYear 5 revenue

6.0%Contamination at Year 5

Read the executive summary →

A mushroom farm is a fixed-cost box in which something either grows or spoils.
Verdant Fungi builds six rooms and 1,680 square metres of shelving, reaches that capacity in Year 3, and
then never expands again — yet revenue still climbs by R3.41 million over the following two years. All of it
comes from contamination loss falling from 16.0 per cent to 6.0 and crops rising from 5.4 to 6.7 a year on the
same shelves. The plan’s title captures the second half of the model: button fills the rooms and carries the
fixed cost at 285 tonnes a year, while oyster earns 26 per cent of contribution on 11 per cent of
volume. The obvious question — why not grow more oyster — is answered rather than dodged: substrate caps it at
160 tonnes. And there is a number worth reading twice, because cumulative break-even sits at 4.25 per cent
contamination, tighter than the Year 5 assumption itself.

The plan at a glance

Six measures that determine whether this farm and its funding stand up.

R20.60mCapital deployed over five yearsR12.40m promoter and investor equity plus R8.20m term debt at 13.0% with a two-year capital moratorium.

16% → 6%Contamination lossThe operating story. Cumulative break-even sits at 4.25% — which means the plan must beat its own Year 5 rate to have paid for itself.

6 rooms1 680 m² of shelved areaReached in Year 3 and unchanged thereafter. Years 4 and 5 add revenue from the same shelves at 6.7 crops a year.

26%Of contribution from oysterOn 11% of volume. Oyster earns far above its weight, which is why the plan runs both species rather than the easier one.

160 tOyster substrate ceilingThe binding constraint on the higher-margin crop. Margin alone cannot expand it, and the plan says so.

2.35xYear 5 debt service coverFrom 0.39x in Year 2 — which is exactly what the two-year capital moratorium exists to bridge.

Two crops, two different jobs

Which crop fills the rooms and which one earns — and why the farm cannot simply grow more of the profitable one.

Button11% of contribution per tonne285 tonnes a year and 78% of revenue. It fills the rooms, carries the fixed cost and makes the farm bankable — but it earns thinly.

against

Oyster26% of contributionOn just 11% of volume. Far better margin per kilogram, but capped at 160 tonnes of substrate — so the farm cannot simply grow more of the profitable one.

Five years of trading

Revenue and EBITDA on the base case. Contamination loss and yield per square metre are the two assumptions that matter most, and both are stressed in Section 12.

Revenue build — rooms against contamination loss

Rooms reach six in Year 3 and stop. Revenue keeps climbing because contamination falls from 16.0% to 6.0% and crops per room from 5.4 to 6.7 a year — the same shelves, better managed.

Year 1

R4.56m · 3 rooms · 16.0% loss

Year 2

R8.47m · 4 rooms · 11.5%

Year 3

R14.86m · 6 rooms · 8.5%

Year 4

R16.96m · 6 rooms · 7.0%

Year 5

R18.27m · 6 rooms · 6.0%

EBITDA and margin, Year 2 onward

Year 1 runs an EBITDA deficit of R1.24m while rooms are commissioned. Growing rooms cost the same to run whatever comes out of them, so every point of contamination avoided falls to the bottom line.

Year 2

R0.42m · 4.9%

Year 3

R2.99m · 20.1%

Year 4

R4.14m · 24.4%

Year 5

R4.81m · 26.4%

Why this plan works the way it does

Contamination is the operating storyLoss falls from 16.0% to 6.0% while the shelves stay the same size. A growing room costs the same to heat, humidify and staff whatever comes out of it, so every point recovered falls almost entirely to EBITDA.

Break-even is tighter than the base case looksCumulative break-even sits at 4.25% contamination against a Year 5 plan of 6.0%. The farm has to keep improving past its own end-state assumption before the five years have paid for themselves.

Oyster earns above its weight, and is capped11% of volume and 26% of contribution. The obvious response is to grow more of it, and the plan explains why that is not available: 160 tonnes of substrate is the ceiling.

Capacity stops in Year 3; performance does notSix rooms and 1,680 m² are reached in Year 3 and never expand. Years 4 and 5 add R3.41 million of revenue purely through crops per year and contamination — not through building.

Compost supply is a concentration riskThe farm depends on a Phase III compost supplier within reach of the site. That relationship is a single point of failure and the plan treats it as one.

Financial snapshot

Four charts from the plan. The full set of twenty-four appears throughout the sections below.

Figure 5. Button and oyster compared, Year 5.

Figure 10. What is grown and never sold.

Figure 11. Output and revenue per growing room.

Seventeen sections and five appendices. Every page carries full navigation, a section outline and links to the sections either side of it.

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Important Notice and Basis of PreparationBasis of preparation, data sources and forward-looking statement caveats. Please read first.

Appendices

Confidential. This document is provided for the purpose of evaluating an
investment in Verdant Fungi Farms (Pty) Ltd and may not be reproduced or distributed without written consent. Projections are
forward-looking statements based on the assumptions registered in Section 16 and are not guarantees of future
performance.