Executive Summary

 

The project entails construction of a modern, heated greenhouse in the Gori region of Georgia over the area of 1,080m2. P&L and cash flow calculations include all expenses related to the construction and operation of the greenhouse as well as revenues from crop sales (for investors only).

The initial total investment is 135,040 GEL (42,200 USD) using the current exchange rate of 3.20 GEL per USD. According to cash flow projections, the project shall recoup most of the investment by June, 2021, based on two separate harvests. In subsequent years, the annual net operating profit is projected at 125,000 GEL (39,0623 USD) per year.

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Project Management

 

The project will be fully managed by Primavera Greenhouse LLC under the direct supervision of Centaurum LLC. The venture is 80% owned by investors while 20% is owned by Zurab Zangaladze, a local resident and an experienced agriculture specialist, owner of the land on which the greenhouse was constructed. Primavera Greenhouse LLC will be owning and operating another greenhouse on the adjacent land also owned by Mr. Zangaladze, identical to the proposed greenhouse in every aspect, with exception of the slight difference in size (1200m2 vs. 1080m2).

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Location

 

The greenhouse will be located in the village of Kvemo Khviti, Gori region of Georgia. The soil in this particular village is famous for its richness and chemical composition that is highly favorable for agriculture.

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Construction of the Greenhouse

 

The greenhouse is to be constructed by one of the four USAID-approved suppliers with vast experience in the matter. It will be 27m in width and 40m in length, consisting of 3 conjoined arched sections each with the width of 9m. It will have a ventilation system, a drip irrigation system as well as a heating system. The heating system will consist of horizontal pipework and a charcoal boiler. 

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Crops

 

It has been decided to introduce a single crop - red tomato variety called Big Beefy. Tomatoes are one of the most profitable greenhouse crops in Georgia. With the help of heating, there will be two harvests per year. For the first harvest, seedings are ordered in the beginning of August and planted in the greenhouse during the second week of September. They begin maturing in November and harvest lasts over about two months. Once the first harvest is over, the second round of seedings (which will be grown beforehand) will be planted with harvest taking place in May and June. 

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The expected yield of the Big Beefy variety is at least 7kg per plant. The plan envisions planting of a total of 2,400 plants in the greenhouse with the expectation to hit the target of 16.8 tons per harvest.

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Operations

 

The key to a successful agricultural business is constant quality control and monitoring. The project will therefore use a number of methods of control to ensure the best possible yield.

 

Human Resources

 

There will be a total of 3 full time staff, agricultural specialists, employed by the greenhouse. The co-founder of Primavera, Mr. Zangaladze, who resides near the property will constantly supervise these staff and ensure quality control. Designated Centaurum staff as well as a third party agriculture expert will also visit on a weekly basis to assess the situation and personally examine the progress of the works and the crops.

 

Constant monitoring

 

There will be video cameras installed throughout the greenhouse space (at least 3 are planned) that will have web access and will be monitored on a constant basis, providing the project investors and other interested parties with 24 hour access.

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Sales 

 

Three different channels of sales will be utilized:

 

Retail in grocery stores

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A smaller portion of the crops will be packaged individually and sold at retail stores. The sale price is expected to be considerably higher, with the store chain retaining 20% of revenues. This method of sale is more lucrative but contains certain risks as well as additional costs of transportation. A preliminary agreement has been reached with Spar, one of the larger grocery store chains in Georgia and Primavera products will be ensured good placement in the stores.

 

Sales in wholesale markets

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It is expected that sales on the wholesale market will be a large portion of overall sales. Mr. Zangaladze is familiar with the Tbilisi wholesale market and has personally sold his produce there. It is expected that produce will be sold in the another large city, Kutaisi, as well.

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Spot sales

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It is expected that a largest portion of the crops will be sold on the spot, by the greenhouse. Resellers and wholesalers in the area regularly visit farmers to purchase produce from them directly and considering lack of serious competition, most of the crop is expected to be sold easily using this method. The advantage of this method of sale is absence of additional expenses while the disadvantage is a relatively lower price point compared to wholesale or retail sales.

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