Professional Documents
Culture Documents
Pre-Feasibility Study
FRUIT AND FOREST PLANT NURSERIES
Contents
1
DISCLAIMER......................................................................................................... 4
INTRODUCTION TO SCHEME.................................................................................5
EXECUTIVE SUMMARY.......................................................................................... 5
5.2
Technical Feasibility....................................................................................... 7
5.3
Green Shed.................................................................................................... 7
5.4
Propagation.................................................................................................... 8
5.5
Irrigation........................................................................................................ 8
5.6
Cultivation...................................................................................................... 8
5.7
Environmental Aspects................................................................................10
5.8
Project Benefits............................................................................................ 10
5.9
Location....................................................................................................... 10
CRITICAL FACTORS............................................................................................. 12
PROJECT ECONOMICS................................................................................... 13
9.2
PROJECT FINANCING.................................................................................... 13
9.3
PROJECT COST............................................................................................. 13
9.4
9.5
9.6
REVENUE GENERATION................................................................................14
9.7
LIST OF TABLES
2
DISCLAIMER
the
document/study
covers
various
aspects
of
project
concept
Apart from carefully studying the whole document one must consider critical
aspects provided later on, which form basis of any Investment Decision.
INTRODUCTION TO SCHEME
Prime Ministers Youth Business Loan program , for young entrepreneurs, with an
allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide
subsidised financing at 8% mark-up per annum for one hundred thousand (100,000)
beneficiaries, through designated financial institutions, initially by the National Bank
of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).
Small business loans upto 2 million with tenure up to 8 years, inclusive of a 1 year
grace-period and a debt : equity of 90: 10 will be disbursed to SME beneficiaries
across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwah, Balochistan, Gilgit
Baltistan, Azad Jammu & Kashmir and Federally Administered Tribal Areas (FATA).
EXECUTIVE SUMMARY
The project of Nurseries Business will include the production and supply of new and
best available fruit varieties along with Forest collection. The proposed business will
start at an area of 8 kanal (160 Marla) that can further be increased with the
expansion of the business during later years.
It is proposed to be located at areas where climate, soil, temperature are favorable
along with better distribution network to the major markets and potential
consumers. Patoki in Punjab is the major hub for nursery business in the
country for all varieties and plants. For small scale level the nurseries can be
managed at every part of the country to meet the local requirements in different
localities. In urban areas mostly ornamental and fruit plants are demanded,
whereas, in rural areas the utilization of fruit, forest and vegetable is according to
the farmers interest. The proposed project will provide direct employment to 05
fulltime people along with required workforce during time to time as per
requirements and keeping in view the seasonal working.
Product(s) include Fruit, Forest, Ornamental Plants and vegetable nurseries.
1. Area Required approximately 8 kanal
Rs.
Given the cost assumptions IRR and payback are 76% and 3.5 years respectively
the most critical considerations or factors for success of the project are;
1. Strong networking with other nursery growers
2. Best varieties of nursery plants
Nursery Business will be used to meet the growing need of best varieties of fruit,
forest ornamental plants and vegetable seedlings. The nursery industry is a very
wonderful and exciting business. The production of plants for profit has the potential
of providing many personal and financial rewards. However, as with many other
farming enterprises that appear to be very simple on the surface, the nursery
business is very complex and requires a great deal of knowledge and skill not only
in production, but also in labor management and marketing.
The nursery industry is very diverse. It is a business, and like any other business,
the probability of success depends on imagination, determination, planning, and
good management of the five major resources.
II.
III.
structure.
Products will be grafted plants of tropical subtropical and deciduous
fruit plants
plants. Marketing is an extremely important part of the nursery business and should
be given equal status and attention to production. Marketing efforts should begin
as soon as the commitment has been made to start a nursery business. Producers
should begin to attend nursery meetings, trade shows, retail and landscape
contractor meetings, during the first year of production, if not before. Proximity to
other nurseries can be an advantage. Through cooperative buying, marketing,
shipping, and sharing of technology and equipment, costs can be reduced. A
common practice among nurseries that are close is to pool plants to make up
shortfalls in numbers, sizes or species to fill orders.
There are three major areas in which nursery producers compete: price, quality and
service (delivery). It is very difficult to compete with larger nurseries on production
costs. Therefore, new competition must strive to produce higher quality plants and
provide better service.
Another area in which smaller nurseries can compete is by doing something a little
different in marketing or in inventory. Smaller nurseries can fill a niche market by
producing specialty nursery crops. These are crops that are not in large enough
demand to warrant high volume production or plants that require special skills and
handling.
Hoe:
Shovel:
soil.
Rake:
Sieve (channi):
Funnel:
Scoop:
Watering can:
Wheelbarrow:
seedlings, etc.
Pruners:
Germination tray:
Pointed sticks:
5.2
Water pipe:
for irrigation
Technical Feasibility
Technical feasibility takes into account whether the required technology is available
or not and whether the required resources are available in terms of manpower and
equipment.
A successful nursery producer needs knowledge of plants, soils, fertilizers,
pesticides, irrigation, Tools, pruning, harvesting methods, overwintering techniques,
packing practices, etc. It is not just casting seed to the wind and watching the trees
and profits grow.
5.4 Propagation
The shed will be used to propagate seedlings. Seedlings also will be grown in
seedling bags in the shade covered area and the open nursery.
Propagation of fruit tree crops, hard woods and forestry species will involve field
investigations to identify and select good sources of plant seeds for collection and
propagation in seedling bags in the open nursery. Propagation of fruit tree crops
also will involve grafting techniques to produce seedlings with desired qualities.
Planting media will include commercial potting mixes for vegetable seedlings and
suckers.
5.5 Irrigation
The open nursery will be irrigated by a ground sprinkler system while the shade
covered area will be irrigated by elevated sprinklers attached overhead to the shade
structure. A misting propagator will be installed in the screen house. The irrigation
system will be gravity-fed at a pressure of approximately 40 psi from a spring at 200
feet above the site.
5.6 Cultivation
The green shed will provide an environment which is free from insects and other
vectors. Weed control in the shade house and open nursery will be affected by use
of polypropylene ground cover plastic. Fertilizer will be applied through mixing in
the medium. Insecticides will be applied according to manufacturers specifications
and the growing conditions.
Plants typically will be ready for sale at the appropriate age and height for
transplanting depending on the specific crop, and will be sold either as rooted plugs
or in seedling bags. .
5.9 Location
The proposed business can be done in all over the country where fruits, forest are
grown. However, the location should be selected on the basis of nursery size and
keeping in view the minimum risks associated with infrastructure development to
production level and from production level to marketing and distribution
10
mechanism. Site selection and layout are very important in the early stages of the
planning process. Your choices will directly affect your success in growing and
selling plants. When purchasing/ leasing on rent, you should come prepared with
questions. Prioritize your list of requirements based on what site characteristics are
the most difficult and costly to repair after you have purchased the land. Do not
purchase land or take on lease, blindly because that will lead to greater cost,
reduced plant quality, increased product losses, and reduced profit. For small level
business in which some plants are procured from outside and some are grown at
own capacity. The location should be near the main highways, city area and already
existing nursery market.
Location of your nursery may be predetermined based on availability of property or
for personal reasons. Alternatively, you may be free to choose a location that best
suits your needs and goals. In either case, your location choice will directly affect
your decisions on marketing, employee hiring, and future expansion.
In selecting a location you should consider proximity to other nurseries, to major
cities, and to highways. Other factors to consider include availability of
transportation facilities, distance to market, competition, availability of reliable
labor (full-time, part-time, and seasonal), and availability of inexpensive land for
future expansion. (You should know that locating near other nurseries may be
mutually beneficial for small operators by providing markets for specialty items,
sharing transportation services, and increasing the frequency of buyer visits.) Yet
another consideration in choosing a location is the present and future regulatory
status of the area (e.g., zoning, taxation, labor relations, environmental issues, and
product inspections).
5.10
Market Analysis
Orchard growers, small, medium and large scale farmers along with huge local
markets in Karachi, Lahore and Islamabad for ornamental plants are the targeted
markets for the nursery business. Nursery owner must analyze and organize his or
her own marketing channels, develop a sales program, prepare the product for
distribution, extend credit, and make collections. There are many resources
available through bookstores and libraries which provide tips on marketing and
business management techniques. Five possible approaches to defining your market
and customers are:
1. Define the types of customers within your target market (average salary,
average number per household) based on census and local Chamber of
Commerce data;
2. Determine customer preferences for products and services through
questionnaires and by investigating the local competition;
3. Use local and national industry association data and commercial publications
to determine market trends;
4. Anticipate future preferences on the types and number of plants to grow; and
11
CRITICAL FACTORS
Individuals considering entering the nursery business need to carefully consider the
following factors:
1. Networking with other growers and farmers from all over the country would
be necessary to meet any excess requirement or shortfall
2. Consistent quality of plants with complete knowledge of plant variety
3. Availability of skilled manpower
12
For this project it is assumed that the production will start from the very first year
for the products like pots, plants grown through cuttings, varieties along with
purchases from other whole salers and propagators.
Distribution
A detailed financial model has been developed to analyze the commercial viability
of Nursery Project under the Prime Ministers Youth Business Loan program.
Various cost and revenue related assumptions along with results of the analysis are
outlined in this section.
consumers and recover payments, if these factors are not efficiently managed and
will also lead to increased operating cost.
Table 1 Project Economics
Description
Net Present Value (NPV)
Benefits Cost Ratio (BCR)
Internal Rate of Return (IRR)
Payback Period (years)
Details
Rs. 3,128,750
1.81
40%
3.41
Description
Total Equity (10%)
Bank loan (90%)
Mark up to borrower (per
annum)
Tenure of Loan (Years)
Grace Period (years)
9.3
Details
Rs. 244,970
Rs.1,982,030
8%
8%
1
PROJECT COST
Item
Unit
Qty
Rate
(Rs)
Amount
14
Land (Leased /
Rental
basis)
50,000
Plants
Manure
Special Soil
No
Trolley
Trolley
Polythene
Bags/Trays/Pots
Total
20000
15
5
20
2000
2000
No
50000
400,000
30,000
10,000
100,000
590,000
Descriptio
n
Nos.
Expert
1
Skilled
Labour
2
Total
per
month
Total
per
year
Salary/employee/
month
25,000
20,000
35,000
420,000
15
Products
Unit
15,00
0
Saplings
2.
Cuttings
Sales
Price
(Rs./Unit)
80,00
0
20,00
0
50
Amoun
t (Rs)
750,00
0
15
1,200,0
00
40,000
year
1,990,
000
995,00
0
Mont
hs
Items
Utilities
Salaries
Miscellaneous
Expense
Total
Monthly
Charges
(Rs.)
6
6
12,000
210,000
15,000
237,000
Particulars
Sales Price Growth Rate
Increase in cost of raw material
Increase in utilities
Debt/Equity Ratio
Loan Period
Grace Period
Loan Installments
Financial charges (interest rate)
Assumption
4% per year
5% per year
5% per year
90:10
8 years
1 year
Monthly
8%
16
3000 Medium
Pots Per kanal
Fruit plants
1500-2000
average large
Pots per kanal
Propagation Area
Larger Plants
Water Storage
I Kanal = 20 X
273= 5460 Sq.ft
Two
Gouses
Green
Display
Display
17
Ye
ar
0
Capit
al
Cost
Infrastruct
ure Oper.
and Maint.
12170
00
Plants
& Raw
Materi
al
Human
Resour
ce
59000
0
42000
0
590000
420000
25000
619500
441000
26250
650475
463050
27563
682999
486203
28941
717149
510513
30388
753006
536038
31907
790656
562840
33502
830189
590982
Total
Cost
22270
00
10100
00
10855
00
11397
75
11967
64
12566
02
13194
32
13854
04
14546
74
Gross
Benefit
0
199000
0
199000
0
206960
0
215238
4
223847
9
232801
9
242113
9
251798
5
Cash
flow
22270
00
98000
0
90450
0
92982
5
95562
0
98187
7
10085
87
10357
36
10633
11
Interes
t
Income
after
Interes
t
Payme
nt
131076
848924
306447
598053
101000
0
100509
3
306447
623378
977173
306447
649173
950030
306447
675430
923640
306447
702140
897983
306447
729289
873039
306447
756864
848788
PV
Cost
PV
Benefit
199000
0
184259
3
177434
8
170863
2
164534
9
158441
0
152572
8
146922
0
0300-5241628
kmq_2008@hotmail.co.uk
Dr. Hafeez-ur-Rahman
0301-5462535
askhafeez594@yahoo.co.uk
051-8443760
18
051-8443668
0303-5091922
iaqamar@gmail.com
19