Springs Harvest Greenhouses (Pty) Ltd Business Plan › Section 18 › Appendices

Appendix A: Detailed Financial Assumptions

Revenue Assumptions

Year 1 revenue of R8.4 million assumes a 6-month ramp-up period during which the 10,000 sqm Phase 1 greenhouse achieves approximately 50% of steady-state production capacity. By Year 2, full-year production at optimised yields generates revenue of R14.7 million. Phase 2 expansion of 8,000 sqm is commissioned mid-Year 3, contributing approximately R4.9 million of incremental revenue in Year 3 and reaching full capacity by Year 4. Years 4 and 5 growth of 15–20% reflects yield improvement, price escalation, and export volume growth.

Cost of Goods Sold

COGS includes seedlings, growing media, nutrients, biological controls, water, and direct energy costs. The COGS ratio of 60% in Year 1 improves to 54% by Year 5 as the operation achieves economies of scale, negotiates improved supplier terms, and reduces crop losses from 5% in Year 1 to 2–3% by Year 3.

Operating Expenditure

Operating costs are projected on a line-item basis with specific escalation assumptions. Staff costs escalate at 8% per annum to reflect annual wage increases and incremental hiring for Phase 2. Energy costs (net of solar savings) escalate at 8% per annum. Other operating costs escalate at 5–7% per annum in line with inflation.

Capital Expenditure

Initial CAPEX of R14.3 million covers Phase 1 greenhouse construction, hydroponic systems, solar PV, packhouse, and land preparation. Phase 2 CAPEX of approximately R3.2 million in Year 3 funds the additional 8,000 sqm expansion. Ongoing maintenance CAPEX of R500,000–R1,000,000 per annum from Year 2 onwards covers equipment replacement and infrastructure upgrades.

Appendix B: Glossary of Terms

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