commercial hydroponic agriculture · gardener. since a sterile medium is used, there are no weeds...

COMMERCIAL HYDROPONIC AGRICULTURE

Controlled Environment Agriculture (CEA) for Off Season Cropping

BALAJI GOPALAKRISHNAN

๏ CURRENT SCENARIO

๏ CEA OVERVIEW

๏ HYDROPONICS

๏ PROPOSAL

CONTENTS


CURRENT SCENARIO

๏ DEMAND FACTORS

๏ SUPPLY FACTORS

๏ INFRASTRUCTURE FACTORS


DEMAND FACTORS

✤ Stable Demand for “CORE” set of Fresh Produce (ex. Tomato / Fresh Corriander )

✤ Consumer prefers fresh produce

✤ Evolving Middle Class with disposable income to buy value added goods and services (ex. Lettuce / Salads)

✤ Bulk Consumers (ex. Restaurants) have fixed end product pricing with season dependent variable input costs (ex. Peas / Cauliflower)

CURRENT SCENARIO BALAJI GOPALAKRISHNAN

SUPPLY FACTORS

✤ Seasonally Dependent Open Sky cultivation for most part

✤ Subsidy dependent agricultural practices

✤ Controlled Environment Agriculture has not been adapted in the vegetable industry as it has been in poultry and fishing industry

✤ Commercial Agriculture does not exist in a meaningful way


INFRASTRUCTURE FACTORS

✤ Storage facilities are not prevalent in the market

✤ Import of Fresh Produce is an expensive proposition

✤ Storage and Forwarding facilities are almost non-existent

✤ CEA is a high startup cost business

✤ Man Power needs to be trained and retained


CEA OVERVIEW

๏ WHAT IS IT ?

๏ WORLD MARKETS

๏ INDIAN ADAPTATION


WHAT IS IT?✤ CEA is a broad term used to cultivate agricultural

produce under controllable optimal environment

✤ Typically not dependent on rain/soil conditions

✤ Suitable to cultivate crops where nature is harsh

✤ Effectively utilized in developed economies for fruits (Horticulture) /vegetables and Flowers (Floriculture)

✤ Produce typically of uniform superior quality

✤ The technology of controlled environment agriculture is changing rapidly with systems today producing yields never before realized

CEA OVERVIEW BALAJI GOPALAKRISHNAN

WORLD MARKETS

✤ Holland is a leader in Floriculture

✤ Israel has converted Arid land into Productive land

✤ Australia and New Zealand are market leaders for their domestic consumption of fruits and vegetables

✤ US grows most of its Leafy Vegetables under CEA

✤ Greenhouses are used extensively in developed world

✤ Central American Countries have adapted the technology extensively to supply produce to North American markets


INDIAN ADAPTATION

✤ Not very well adapted in India although beginning to make inroads

✤ Indian adaptation dates back to 1946 popularly called the Bengal System

✤ Favorable government policies to promote CEA

✤ Shortage of skilled man power


HYDROPONICS

๏ WHAT IS IT ?

๏ TECHNIQUES

๏ DISADVANTAGES


WHAT IS IT ?✤ Hydroponics is often defined as "the cultivation of plants in

water."

✤ Research has since determined that many different aggregates or media will support plant growth; therefore, the definition of hydroponics has been broadened to read "the cultivation of plants without soil."

✤ Soil-less gardening offers many advantages to the home gardener. Since a sterile medium is used, there are no weeds to remove, and soil-borne pests and diseases are minimized, if not eliminated completely. The plants can mature faster, yielding an earlier harvest of vegetable and flower crops.

✤ The big advantage to hydroponics is the ability to automate the entire system hence improving efficiency.

HYDROPONICS BALAJI GOPALAKRISHNAN

TECHNIQUES✤ Flood and Train Method

✤ A water-holding container, such as a plastic dish pan, is filled with the aggregate and plants. The container is flooded periodically with the nutrient solution. The solution is drained back into the nutrient reservoir by opening a valve at the bottom of the container. During each cycle, the roots should be submerged in the solution for no more than 20 to 30 minutes.

✤ Trickle Feed Method

✤ The nutrient solution is continuously pumped from the reservoir through a 1/2-inch irrigation tube that branches into a number of 1/8-inch tubes. These smaller tubes deliver the solution to the containers. Any excess solution is collected at the base of each container and returned to the nutrient reservoir.

✤ Tube Feed Method

✤ A 4- to 6-inch plastic tube or bag is filled with a lightweight aggregate. Holes are made on all sides of the container for the plants. The tube is hung vertically, and an irrigation tube is positioned at the top of the container. The nutrient solution seeps through the container and may or may not be recycled when it reaches the bottom.


DISADVANTAGES

✤ Hydroponics usually requires a greater technical knowledge than crop growth in soil (geoponics).

✤ Hydroponics usually requires more expensive equipment than geoponics. Most hydroponic crops are grown in greenhouses or controlled environment agriculture.

✤ Hydroponics usually requires more and more frequent maintenance than geoponics. If timers or electric pumps fail or the system clogs or springs a leak, plants can die very quickly in many kinds of hydroponic systems.

✤ For the previous three reasons, hydroponic crops are usually more expensive than soil-grown crops.


PROPOSAL

๏ EXECUTIVE SUMMARY

๏ COSTING

๏ PRE-PRODUCTION INITIATIVES

๏ POST-PRODUCTION INITIATIVES

๏ FUTURE OUTLOOK

BALAJI GOPALAKRISHNANPROPOSAL

EXECUTIVE SUMMARY

✤ The proposal is to develop a CEA farm using Hydroponic technology to grow “core” vegetables that have high year around demand like Tomatoes and Capsicum (incidentally happens to be a very good crops for hydroponic technology)

✤ Time the harvest of the crops to be during off-season to justify the cost of production

✤ Promote cultivation of high nutritional vegetables like lettuce and to develop new markets for them

PROPOSAL BALAJI GOPALAKRISHNAN

COSTING - CAPEX*


Item Description Cost in Lakhs of Rupees

1 Basic Greenhouse Construction (30 ft x 132 ft x 12 ft) 5

2 Cooling and Heating System & Automation System 4

3 Hydroponic Tomato System (30 ft x 65ft) 4.5

4 Hydroponic Lettuce System (30 ft x 65 ft) 4.5

5 Misc Agricultural Equipment including Automation 1

6 TOTAL 19

7 WORKING CAPITAL REQUIREMENT 4

* High End Estimates

COSTING - CASH FLOW*


Item Description Cost in Lakhs of Rupees

1 Tomato Production at 8000 kgs @ 10 Rs Gross Profit x 2 yields /year 1.6

2 Lettuce and Herbs at 64,000 heads @ 2 Rs Gross Profit (approx 20 yields ) 1.2

3 GROSS REVENUES/YEAR 2.8

3 Man Power Expenses @ 3 Employees @ 25,000 / Year 0.75

4 Electricity and Nutrients & Others 0.5

6 GROSS PROFITS 1.55

* Middle Range Estimates

COSTING - PROJECTIONS*


* Middle Range Estimates

Years 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

CAPEX 19.0 - - - - - - - - - - - - - - -

WORK CAP 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0

Interest on WC 0.4 0.4 0.4 - 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.6 0.7 0.8 0.9

Depreciation 7.6 5.7 3.8 1.9 - - - - - - - - - - - -

Operating Exp 1.3 1.3 1.4 1.4 1.5 1.6 1.7 1.8 1.8 1.9 2.0 2.1 2.2 2.4 2.5 2.6

Gross Profits 2.3 2.5 2.7 3.0 3.3 3.6 4.0 4.4 4.8 5.3 5.8 6.4 7.1 7.8 8.5 9.4

Net Profits

(7.0)

(4.9)

(2.8)

(0.4) 1.4 1.7 2.0 2.3 2.6 3.0 3.3 3.7 4.2 4.7 5.3 5.9

PRE-PRODUCTION ACTIVITIES

✤ Procurement of Land

✤ Procurement of the initial technology from a good vendor

✤ Construction of the first Green House

✤ Marketing Identification

✤ GOI incentives for Hi-Tech Agriculture

✤ Initial steps to localize the technology and components


POST-PRODUCTION ACTIVITIES

✤ Identifying Storage Solution

✤ Marketing to High End Markets

✤ Training local talent and introducing new crops

✤ Technology localization for future greenhouses


FUTURE OUTLOOK

✤ Vertical Integration of the Product Line

✤ Derivative Product Identification (packaged products)

✤ Lookout for Herbal Products / Organic Products

✤ Export Market exploration


commercial hydroponic agriculture · gardener. since a sterile medium is used, there are no weeds...

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