Karoo Harvest Produce — Operating Cost Structure
Projected annual operating costs at full production (Year 1 onwards) are detailed below. The cost structure reflects commercial irrigated onion production benchmarks for the Northern Cape, adjusted for current input pricing.
Section 8 · Business Plan
Operating Cost Structure
Projected annual operating costs at full production (Year 1 onwards) are detailed below. The cost structure reflects commercial irrigated onion production benchmarks for the Northern Cape, adjusted for current input pricing.
8.1 Annual Operating Cost Breakdown
Projected annual operating costs at full production (Year 1 onwards) are detailed below. The cost structure reflects commercial irrigated onion production benchmarks for the Northern Cape, adjusted for current input pricing.
| Cost Category | Year 1 (R) | Year 2 (R) | Year 3 (R) | % of Revenue |
| Seed & Seedlings | 3,200,000 | 3,360,000 | 3,530,000 | 10.7% |
| Fertiliser & Agrochemicals | 3,800,000 | 3,990,000 | 4,190,000 | 12.7% |
| Irrigation & Energy | 2,500,000 | 2,700,000 | 2,920,000 | 8.3% |
| Permanent Labour (85 staff) | 2,800,000 | 3,080,000 | 3,390,000 | 9.3% |
| Seasonal Labour (200 workers) | 1,500,000 | 1,575,000 | 1,654,000 | 5.0% |
| Transport & Logistics | 2,200,000 | 2,420,000 | 2,660,000 | 7.3% |
| Packaging & Grading | 1,800,000 | 1,890,000 | 1,985,000 | 6.0% |
| Insurance & Overheads | 1,200,000 | 1,260,000 | 1,323,000 | 4.0% |
| Maintenance & Repairs | 1,000,000 | 1,100,000 | 1,200,000 | 3.3% |
| TOTAL OPERATING COSTS | 20,000,000 | 21,375,000 | 22,852,000 | 66.7% |
Operating costs are projected to increase at approximately 5–7% per annum, reflecting CPI inflation on labour and input costs, partially offset by efficiency gains from scale and precision agriculture optimisation. The all-in cost of production is estimated at approximately R2,780 per tonne in Year 1, declining to R2,600 per tonne by Year 3 as economies of scale are realised.
8.2 Labour Plan
| Category | Headcount | Monthly Cost | Annual Cost |
| Farm Manager | 1 | R45,000 | R540,000 |
| Assistant Managers | 2 | R25,000 each | R600,000 |
| Irrigation Technicians | 4 | R15,000 each | R720,000 |
| Machinery Operators | 6 | R12,000 each | R864,000 |
| General Farm Workers | 72 | R5,500 each | R4,752,000 |
| Administrative Staff | 4 | R12,000 each | R576,000 |
| Seasonal Workers (peak) | 200 | R4,500 each (4 months) | R3,600,000 |
| TOTAL | 289 (peak) | R11,652,000 |
All permanent employees will be employed on BCEA-compliant contracts at or above the national minimum wage for the agricultural sector. The Company will register with the Unemployment Insurance Fund (UIF), Compensation Fund, and relevant bargaining councils as required.
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