FynbosFarm
Strategy and Implementation Summary
The FynbosFarm group strategy is to profitably and efficiently utilize present and future agricultural technology in the production of vegetables. The company, by developing a profitable vegetable farm with all the necessary custom-innovated equipment, will gain a significant industry advantage.
Additional application and utilization of horticultural technology in the production of vegetables will double utilization of the climate controlled portion of the overhead.
The company’s goals in the first year are to:
- Develop the complete project.
- To have all 6ha planted and ready for production.
- To have the instant turf planted and ready for production early in year 2.
- To have grading and pack shed constructed.
The company’s long term plan is to also produce more selective vegetables as well as looking to get into the fresh flower market.
5.1 Competitive Edge
FynbosFarm’s main competitive advantages are:
- Efficient production utilizing greenhouses.
- No existing projects of this magnitude in the KZN region.
- Experience in the vegetable industry goes back to 1996.
5.2 Marketing Strategy
FynbosFarm will market and supply its products to the selected outlets aggressively, focusing at first on local markets, and then on export options. We will emphasize the reliable year-round output of our climate-controlled hydroponics facilities, as well as the ability to produce in-demand, non-native vegetables.
Marketing for turf will take place with direct contact between FynbosFarm and regional greenhouses and landscapers.
The company will also eventually develop a website and advertise on the Internet, although these future marketing avenues are not included in this plan.
5.3 Sales Strategy
At FynbosFarm, the sales process is primarily the same for vegetables as it is for instant turf, in that both products will be mainly sold through wholesale marketing. Shipments of vegetables will be transported in refrigerated trucks as per orders, and instant turf will be palletized on open back trucks as per orders.
5.3.1 Sales Forecast
We expect to have exceptional sales in the first year. Our direct unit costs include the costs for the agricultural labor force who will tend and manage the vegetables and turf, including incentives and bonuses. These costs are roughly 35% of all direct costs each month.
| Sales Forecast | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Unit Sales | |||||
| Tomatoes | 2,100,000 | 1,500,000 | 2,100,000 | 1,500,000 | 2,100,000 |
| Peppers | 205,000 | 210,000 | 205,000 | 210,000 | 205,000 |
| Cucumbers | 250,000 | 250,000 | 250,000 | 250,000 | 250,000 |
| Instant Turf | 150,000 | 200,000 | 200,000 | 200,000 | 200,000 |
| Total Unit Sales | 2,705,000 | 2,160,000 | 2,755,000 | 2,160,000 | 2,755,000 |
| Unit Prices | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Tomatoes | R4.00 | R4.25 | R4.50 | R4.75 | R5.00 |
| Peppers | R10.00 | R10.50 | R11.00 | R11.50 | R12.00 |
| Cucumbers | R1.80 | R1.90 | R2.10 | R2.20 | R2.30 |
| Instant Turf | R10.00 | R11.00 | R12.00 | R13.00 | R14.00 |
| Sales | |||||
| Tomatoes | R8,400,000 | R6,375,000 | R9,450,000 | R7,125,000 | R10,500,000 |
| Peppers | R2,050,000 | R2,205,000 | R2,255,000 | R2,415,000 | R2,460,000 |
| Cucumbers | R450,000 | R475,000 | R525,000 | R550,000 | R575,000 |
| Instant Turf | R1,500,000 | R2,200,000 | R2,400,000 | R2,600,000 | R2,800,000 |
| Total Sales | R12,400,000 | R11,255,000 | R14,630,000 | R12,690,000 | R16,335,000 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Tomatoes | R2.00 | R2.13 | R2.25 | R2.38 | R2.50 |
| Peppers | R5.00 | R5.25 | R5.50 | R5.75 | R6.00 |
| Cucumbers | R0.90 | R0.95 | R1.05 | R1.10 | R1.15 |
| Instant Turf | R4.80 | R5.28 | R5.76 | R6.24 | R6.72 |
| Direct Cost of Sales | |||||
| Tomatoes | R4,200,000 | R3,187,500 | R4,725,000 | R3,562,500 | R5,250,000 |
| Peppers | R1,025,000 | R1,102,500 | R1,127,500 | R1,207,500 | R1,230,000 |
| Cucumbers | R225,000 | R237,500 | R262,500 | R275,000 | R287,500 |
| Instant Turf | R720,000 | R1,056,000 | R1,152,000 | R1,248,000 | R1,344,000 |
| Subtotal Direct Cost of Sales | R6,170,000 | R5,583,500 | R7,267,000 | R6,293,000 | R8,111,500 |
5.4 Milestones
The following table and chart show the main milestones for the first year.
| Milestones | |||||
| Milestone | Start Date | End Date | Budget | Manager | Department |
| Raise funding | 11/1/2004 | 1/15/2005 | R0 | ABC | Department |
| Begin Construction | 2/1/2005 | 2/5/2005 | R15,000,000 | ABC | Department |
| Begin First Crop Planting | 5/10/2005 | 5/15/2005 | R5,000,000 | ABC | Department |
| Begin Sales | 7/1/2005 | 7/10/2005 | R0 | ABC | Department |
| Begin Turf Sales | 10/1/2005 | 10/10/2005 | R0 | ABC | Department |
| Total Sales over R12 Million | 7/1/2005 | 6/30/2006 | R0 | ABC | Department |
| Totals | R20,000,000 | ||||
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