Green Master Vegetables Business Plan — The Five-Year Build and Its Gates

The build from 8 to 45 hectares, and the water, performance and capital gate each expansion step must clear.

The Five-Year Build and Its Gates

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Year

Hectares

Focus

Gate before proceeding

1

8.0

Establish. Water proven, drip installed, first tunnel, first crops through the winter window.

Water use authorisation held; borehole yield proven by pump test in the dry season; yields within 15% of plan

2

14.5

Prove the system repeats. Second tunnel. Direct customers begun.

Direct channel above 20% of volume; EBITDA loss narrowing; reviewed financial statements

3

24.0

Cross break-even. Second Blended Finance tranche. Certification begun.

Water confirmed for 35 hectares; EBITDA positive; GLOBALG.A.P. process underway

4

34.5

Scale within proven systems. First profitable year.

Certification achieved; a retail or processor contract signed; agronomist in place

5

45.0

Full operation with a management layer.

Market channel below 60%; water confirmed for the full area

Year 1

Year 2

Year 3

Year 4

Year 5

Hectares under production

8.0

14.5

24.0

34.5

45.0

of which tunnels

1.0

1.5

2.5

3.5

4.5

Direct channel share

14.0%

20.0%

28.0%

36.0%

42.0%

EBITDA, R’000

(390)

(425)

329

1 542

3 421

Break-even area at that year’s cost base, ha

12.2

18.6

21.6

25.1

27.3

Position against break-even

Below

Below

Above

Above

Above

Closing cash, R’000

588

881

1 537

1 045

1 384

10.1 Why the farm crosses break-even in Year 3 and not before

Break-even area rises across the plan from 12.2 hectares in Year 1 to 27.3 in Year 5, because the fixed cost base grows as the farm adds management, agronomy, security and certification. The planted area rises faster, from 8.0 to 45.0. The two lines cross during Year 3, when 24 hectares are planted against a break-even of 21.6.

That crossing is not the result of cost control. Fixed costs rise from R1.13 million to R5.30 million, nearly fivefold. It is the result of gross margin per hectare rising from R92 500 to R193 800, through tunnel area, through cropping intensity, through yield, and through the channel shift. Area alone would not have done it; a farm that grew to 45 hectares while holding gross margin per hectare at the Year 1 level would still be below break-even.

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