Pre-Feasibility Study

OFF-SEASON VEGETABLES FARMING

(Walk-in Tunnel)

Pakistan Horticulture Development and Export Board

www.phdeb.org.pk
HEAD OFFICE
Waheed Trade Complex, 2nd Floor , 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore
Tel: (042) 111-111-742, Fax: (042) 5727350
info@phdeb.org.pk

August, 2003

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

DISCLAIMER
The purpose and scope of this information memorandum is to introduce the subject
matter and provide a general idea and information on the said area. All the material
included in this document is based on data/information gathered from various
sources and is based on certain assumptions. Although, due care and diligence has
been taken to compile this document, the contained information may vary due to any
change in any of the concerned factors, and the actual results may differ substantially
from the presented information. PHDEB does not assume any liability for any
financial or other loss resulting from this memorandum in consequence of
undertaking this activity. Therefore, the content of this memorandum should not be
relied upon for making any decision, investment or otherwise. The prospective user
of this memorandum is encouraged to carry out his/her own due diligence and gather
any information he/she considers necessary for making an informed decision.
The content of the information memorandum does not bind PHDEB in any legal or
other form.

DOCUMENT CONTROL
Document No.
Revision
Prepared by

PHDEB

Approved by

CEO

Issue Date

August, 2003

Issued by

CEO

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

1 INTRODUCTION
1.1 Ge ne ral
Agriculture sector is the backbone of Pakistans economy. The sector employs 44 %
of the work force and contributes 25% towards National GDP. Nature has blessed
our country with fertile land and suitable climate for growing variety of vegetables.
The geographical location of the country is ideally suited for a large variety of
agricultural crops, which are used directly for food as well as a raw material for
processing industry. Vegetables grown in Pakistan are unique in taste, aroma and are
almost organic as very low quantity of chemicals is used in their cultivation.
Moreover, most of the vegetables grown are not genetically modified and original
species are still cultivated in the country.
Vegetables are rich source of vitamins, carbohydrates, salts and proteins. With
increased health awareness in the general public and changing dietary patterns,
vegetables are now becoming an integral part of average households daily meals. In
addition, high population growth rate has also given rise to high demand in basic
dietary vegetables. Increased health awareness, high population growth rate,
changing dietary patterns of increasingly affluent middle class and availability of
packaged vegetables, has therefore generated a year round high demand for
vegetables in the country in general and in major city centers in particular. However,
our farmers have yet not been able to encash this opportunity and still follow
traditional sowing and picking patterns. This results in highly volatile vegetable
supply market wherein the market is flooded with seasonal vegetables irrespective of
demand presence on one hand and very high priced vegetables in off-season on the
other. Lack of developed vegetable processing and storage facility robs our farmers
from their due share of profit margins. In natural season local vegetables flood the
markets substantially bringing down the prices.
In the absence of storage infrastructure and vegetable processing industry in the
country, off-season vegetables farming is the only viable option that can add value to
the farmer produce.
1.2 Pro je ct B rie f
The proposed project is designed as a medium size off-season vegetable farming
unit, spreading over a land area of 15 acres. Off-season vegetables, such as,
tomatoes, cucumber, brinjal, hot pepper and squashes will be cultivated using Walkin tunnel technology.
The land can be utilized for green farming 1 during the idle period to maintain the
fertility of soil. Apart from green farming, the land can also be utilized for growing
seasonal vegetables like potato, carrot, onion, garlic and cabbage etc., in the idle
period, but this may affect the fertility of the land, resulting in reduction of yield of
1

Green farming is done to maintain the fertility of the land with the cultivation of any legume crop.
When the crop is matured it is then incorporated in soil with the help of a Rotavator.
3

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

off-season vegetables. Therefore it is recommended that only off-season vegetables

should be grown on the proposed land, with a well chalked out sowing pattern.
The estimated yield potential of the farm varies according to the selected type of
vegetable. For this project a mix of five vegetables is proposed and is listed below.
For this vegetable mix it is estimated that a 15-acre farm unit will yield a total of
333,000 Kg per annum.
Ta ble 1-1: Tota l Pro duct ion Ca paci ty o n t he bas is of Wa lk-i n tunne l te chno logy
Vegetables

Area (Acres)

Tomatoes
Cucumber
Brinjal
Hot Pepper
Sweet Pepper
Squashes

2.5
2.5
2.5
2.5
2.5
2.5

Production Quantity
in (Kgs)/ Acre
25,000
25,000
24,000
12,000
18,000
25,000

Total Production
Quantity
62,500
62,500
60,000
30,000
45,000
62,500

1.3 Oppo rt unity Rat io nale

There is a huge demand for fresh vegetables in the local as well as international
markets, which includes Europe, Middle East, and Far Eastern markets but due to
their perishable nature it is difficult to export this commodity. The facility of
growing off-season vegetables also allows for growing non-conventional varieties
and vegetables, which are in high demand in the international market.
The importance of vegetables cannot be denied due to their nutritional value as these
provide proteins, carbohydrates & salts that are essential ingredients for the growth
of human body. Vegetables are used in raw form as salad or cooked food according
to the taste, which provide a balanced diet and keep human being healthy. A large
number of world population now prefer vegetables in their daily diet due to the
awareness that vegetables provide better source of energy and nourishment to the
body.
The essential nutritional ingredients of some of the vegetables are shown in Table 11, below: Ta ble 1-2: Nut rit io nal i ng re die nts i n a we ig ht of 1 00 G ra m
Vegetable Name Calo rie s
Potato
Turnip
Carrot
Cauli Flower
Cabbage

71.6
30.0
39.6
13.9
19.8

Proteins
Gram
1.7
0.9
1.1
1.1
1.0
4

Fats
Carbohydrat
Gram
es Gram
0.1
16.0
0.2
6.2
0.3
8.2
0.1
2.2
0.2
3.9

Ascorbic
acid
14.1
24.7
5.3
31.1
38.1

Pre-Feasibility Study

Peas
Tomato
Onion
Spinach
Brinjal
Lettuce

Off-Season Vegetables Farming (Walk-in Tunnel)

45.4
20.0
45.8
23.8
20.3
12.6

3.0
0.9
0.9
1.0
1.9
0.8

0.2
0.3
0.2
0.0
0.2
0.1

8.0
3.5
9.7
60.4
2.6
2.0

11.9
20.5
8.4
5.1
48.2
12.6

Mostly the vegetables grown in the world are local to their land and countries
however other varieties and types have also been introduced from across different
continents/countries, which are now grown and consumed in the local diet. Almost
all types and varieties of known vegetables are grown in Pakistan.
Vegetables can be cultivated in off-season, with the induction of an artificial
technique like tunnel technology, in which temperature and moisture is controlled
for specific growth of vegetables. The production of vegetables all around the year
enables the growers to fully utilize their resources and supplement income from
vegetable growing as compared to other normal agricultural crops.
As the landholding powers of farmers is decreasing, they need to increase the
productivity of their available land, off-season vegetable farming is a measure
through which they can attain higher profit margins from the crop.
1.4 Via ble Eco no mic Fa rm S i ze
The proposed project is based on a land holding of 15 acres, however the distance of
the farm from the market will determine the feasible size of the project. Near large
markets like Lahore, projects with smaller land holdings can be a viable option, but
large land holdings are recommended for projects that are planned away from large
markets.
1.5 Pro je ct Cos t
The proposed project of off-season vegetables farming needs capital investment of
about Rs. 1.06 million. This includes machinery and equipment. The land utilized for
cultivation is recommended to be leased. In addition to this, a sum of Rs. 0.17
million is also required as working capital. The total project cost amounts to Rs. 1.22
million.

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

1.6 Proce s s Flow Cha rt

Fig ure 1-1: Produc tio n flo w of of f- s e as on ve ge table s
NURSERY/
SAPLING

HARVESTING

GRADING

FIELD BED
PREPARATION

SOIL
FERTILIZING

PLANT
PROTECTION

TOP DRESS
FERTILIZING

POST
HARVESTING
ASPECTS

NURSERY
TRANSPLANTATION

MOISTURE
CONDITIONING

SHIPMENT/
DESPATCH

1.7 Pro duct ion Flo w o f off -s e as on ve ge table s

The production flow varies slightly for different vegetables. The following
production flow is based on the production of tomatoes:
i.
Sowing of seeds in a separate plot of land for nursery.
ii.
Preparation of seed beds in the field for cultivation of vegetables.
iii.
Using fertilizer in the soil to maintain its fertility.
iv.
Transplantation of nursery in the soil or sowing of seeds directly in the soil.
v.
Maintaining level of moisture in the soil.
vi.
Protection from the pests, diseases and other wild growths by using
pesticides/sprays of chemicals, and trimming.
vii.
Using fertilizer of different varieties for the smooth growth of plantation.
viii.
Picking/harvesting at various times as per nature/requirement of the
plantation.
ix.
Grading of crop on the basis of quality and other standards.
x.
Application of post harvesting technology for picking/plucking, packing and
storing the vegetables in order to fetch the maximum price.
xi.
Transportation to the sale points in local or export markets.

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

2 CURRENT INDUSTRY STRUCTURE

2.1 Off s e as on ve ge table gro we rs
At present, the tunnel technology is being used at the following places/farms along
with other small farms:
i. Mian Shadi Agri Farm, Mamonkangan, district Faisalabad
ii. Haji Sons, Chiniot, Jhang
iii. Ayub Agricultural Research Center, Faisalabad
iv. National Agriculture Research Center (NARC) Chak Shahzad, Islamabad
v. Mardan
vi. University of the Punjab, Lahore
vii. Sindhu Farm, Kamalia, district T.T Singh
viii. Sitara Farm, at Sitara Chemicals, Shah Kot, district Faisalabad
2.2 Pre se nt Pro duc tio n of Ve ge table s
According to Pakistan Statistical yearbook 2003, the production of various
vegetables is shown in Table 2-1 below: Ta ble 2-1: Pro duc tio n of va rio us ve ge table s during t he ye ar 2001-02
Item

Tomato
Onion
Garlic
Chili
Turmeric
Potato
Peas
Vegetables
(excluding potato
and sugar beat)

Punjab
000
Tons
62.2
225.0
21.1
13.5
33.9
1548.8
20.8
2082.0

Sind
000
Tons
32.8
596.6
7.3
76.6
3.0
32.8
202.1

NWFP Balochistan
000
000
Tons
Tons
146.2
52.8
183.2
380.2
24.9
3.2
0.4
2.8
5.9
115.6
54.3
1.2
2.1
358.7
230.4

Pakistan
000
Tons
294.0
1385.0
56.5
93.3
39.8
1721.7
56.9
2873.2

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

2.3 Ex po rt of Ve ge table s
The export data of some of Pakistans vegetables by destination for years 1999-2000
and 2000-01 is shown in the following Table 2-2: Ta ble 2-2: Ex po rt by Co unt rie s
Country

Tomato
Afghanistan
Cucumber
Afghanistan
Dubai
India
Brinjal
Afghanistan
Dubai

2000-2001
Quantity Value Average
In Tons
Rs
Rate
000 Rs./Kg.

1999-2000
Quantity
Value
Average
in Tons Rs 000
Rate
Rs./Kg.

39

5.5

13

167

12.5

175
--

424
---

2.4
---

143
20
6

633
120
28

4.4
6
4.1

243
6

1,079
60

4.4
10.4

94
--

267
--

2.8
--

In addition to the broad based local market for consumption of vegetables, the
markets of Afghanistan and those of the Central Asian Republics & Middle East can
be effectively and conveniently catered from Pakistan.
2.4 Cl us te rs of off-s e as on ve ge table pro ductio n
As per the information gathered from Agriculture Department, Government of
Punjab, and National Agricultural Research Center, Islamabad, following are some
of the areas which could be identified as major existing clusters of off-season
vegetable production in the country:
Mamonkangan, Shah Kot in district Faisalabad, Kamalia in Toba Tek Singh, Chiniot
in district Jhang, Swat, Tarnab, Mardan, Khairabad, and Mirpur Khas.

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

3 TECHNICAL ANALYSIS
3.1 Pla nta tio n & G ro wt h Es se ntials
There are 16 essential requirements for healthy growth of a plant. The requirement
and their respective sources are provided in the following table:
Ta ble 3-1: Pla ntat io n g ro wt h e sse ntials
SOURCE
Air & Water
Land

REQUIREMENT
Carbon, Hydrogen, Oxygen, Nitrogen, Phosphorus and Potash
Calcium, Magnesium, Sulpher Iron, Copper, Zinc, Boran,
Molybidenium, Maganese and Chlorine

3.2 Fe rt il i ze rs
Using fertilizers containing Nitrogen, Phosphorus and Potash the yield of the crop
can be maximized.
Appropriate quality and quantity of fertilizer plays a great role in the production and
quality of vegetables.
3.3 Sowi ng & picki ng pe rio d o f off -s e as on ve ge table s
Following are sowing and picking periods of selected off-season vegetables in their
respective normal growing seasons:
Ta ble 3-2: So wi ng a nd pi cki ng pe rio d fo r t he se le cte d off-s e as on ve ge table s
Vegetables
Tomato
Brinjal
Squashes
Cucumber
Sweet pepper/ Hot
pepper

Sowing Period
October (Nursery)
November (transplantation)
October (Nursery)
November (transplantation)
End of October to 1st week of
November (direct seeding)
End of October to end of
December (direct seeding)
Mid of September to 1st
week of October
End of October to 1st week of
November (Transplantation)

Picking Period
February-May

February-May

End of December to
April
Mid January to May

End of January to
September

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

3.4 Off-s e as on cul tivat io n me t hods

There are number of ways and methods to cultivate vegetables in off-seasons. Some
of the methods are explained as under: 3.4.1

Natural method by selection of appropriate area

The off-season vegetables are grown in the areas where the climatic conditions are
moderate for both normal as well as for off-seasons. Winter vegetables are grown in
summer on hilly/semi hilly areas where climatic conditions are favorable for a
particular vegetable. Like wise summer vegetables are grown in winter season in the
valleys and across the sea areas.
The production cost of vegetables under above conditions is very high due to
transportation of crop to the markets. Moreover, the transportation of crop over long
distance markets causes post-harvest losses. These drawbacks lead to the adoption of
artificial methods of cultivation in off-season, nearer to markets to tackle heavy
transportation cost and to reduce post-harvest losses.
3.4.2

Artificial Methods

Vegetables can be grown in off-season through artificial methods, the details of

these methods are given below:
Growing Beneath the Sarkanda 2
This is an old method and is usually adopted near the big cities. The main vegetables
grown under this method are tomato, chili, cucumber, and bottle gourd. The nursery
of these vegetables is planted in October/November and a wall of Sarkanda is
affixed in the direction of North South, which protect plant from cold winds and
mist. This method of cultivation is not beneficial because the growth of the plant
tends to be slow, as the plant does not receive required sunshine and desired
humidity.
Building of Green Houses
Through building green houses, the sunshine intensity is controlled. The vegetables
under this method are grown mostly in the winter season. Here the temperature,
humidity, carbon dioxide, ventilation of air and irrigation etc. are controlled. Green
houses can be built of plain glass or of fiberglass material. The main drawback in the
usage of this method is heavy capital cost.
Plastic Tunnel
Cultivation by this method is gaining popularity because of low cost and easy usage.
Plastic tunnels are transparent which provide required sunshine to the plants, and the
plastic also plays a barrier against the cool air in winter.

Sarkanda (Saccharum spontaneum) is a tall, straight, grass, growing in clamps, having height upto
6 meters.
10

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

In the construction of tunnel the major materials involved are mild steel bars and
plastic sheets. Plastic sheets are used for roof covering of the tunnel shaped
construction, which is built with steel bars. Bamboo lengths can also be used in some
proportion with the mild steel bars. Plastic sheet is to be spread in such a manner that
it enables the stoppage of cold air from outside.
The tunnel construction offers maximum crop yield, better maintenance of the
fertility of land, controlled temperature and humidity, protection from wild animals,
insects and better water conservation.
There are three types of tunnels, known as low and walk-in and high tunnels.
1. Low Tunnel
It is cheaper than high tunnel but creates difficulty for soil preparation, spraying and
picking.
The tunnels are suitable for cucumber sown flat bed, melons, watermelons, bitter
gourds, squashes, and snake gourds etc. The crop yield in this type of tunnel is
however low compared to high tunnels.
Fig ure 3-1: Lo w Plas tic Tunne ls3

Curtsey: Mian Shadi Agriculture Farms Mamoonkangan, Faisalabad

11

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

2. Walk-in Tunnels
Walk-in tunnels are lower than the high tunnels but they are gaining popularity as
they provide high yield compared to low tunnels. The tunnel is suitable for growing
tomatoes, cucumbers, sweet pepper and hot pepper.
Fig ure 3-2: Squas h g ro wn in Wa lk- i n Tunne l4

3. High Tunnel
High tunnel facilitates easy access for soil preparation, picking and spraying due to
its width and height. The crop yield is maximum in this type of tunnel. The tunnel is
suitable for growing tomatoes, cucumbers and sweet peppers.
Fig ure 3-3: Pict ure of H ig h Tunne l 5

Curtsey: Mian Shadi Agriculture Farms Mamoonkangan, Faisalabad

Curtsey: Mian Shadi Agriculture Farms Mamoonkangan, Faisalabad
12

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

3.5 Re comme nde d Tunne l

In this pre-feasibility study, cultivation is recommended with the use of walk-in
tunnels on the basis of its low construction cost. All the calculations are done on the
basis of walk-in tunnel technology.
The measurements of walk-in tunnel are given in the following table:
Ta ble 3-3: Di me ns ions of Walk -i n Tunne l
Material Specification

Pipe material

Mild steel, zinc galvanized

Thickness

Diameter
20 mm
Thickness
1.6 mm
Length
18 ft
Mild steel, round in shape
Diameter
12 mm
Length
2 ft
0.06 mm thick and 20 ft wide
Center 6 ft, Sides 2.5 ft
12 ft
190 ft
13 per acre

Iron Rod

Tunnel Specification

Plastic
Height
Width
Length
No. of tunnels

The cost of walk-in tunnels amounts to Rs. 32,000 to Rs. 35,000. The tunnel is
suitable for growing tomatoes, cucumbers, sweet pepper and hot pepper.
3.5.1

Support Structure

Each tunnel will be 190 feet long, 2.5 feet high and 12 feet wide. The tunnel is built
by pipe material of 20-mm diameter 18 feet length, and round shaped mild steel iron
rods of 12-mm diameter and 2 feet length. Each tunnel structure will then be covered
by 0.06-mm thick and 20 feet wide plastic sheet. Approximately 13 tunnels can be
constructed on an acre of land.

13

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

Fig ure 3-4: Suppo rt s truc t ure in walk- i n t unne ls 6

3.6 See d and i ts Impo rta nce

For tunnel cultivation, F1 hybrid seed developed for tunnel technology is used,
because they have the ability to resist multiple diseases. These hybrid seeds cost
more than the ordinary seeds. The productivity and quality of the crop is ensured
from quality of these seeds. Hybrid seeds have above 90% germination capacity as
compared to that of ordinary one. The ordinary seed is produced from the crop itself
whereas hybrid seed is produced through a special process. For every crop, new
hybrid seed needs to be purchased/sown.
The crop yield achieved from hybrid seeds is 3 to 4 times more than to the ordinary
seeds and is also less prone to diseases.
3.7 Pract ical ti ps fo r off -s e as on ve ge table fa rmi ng

Any person who is planning to adopt this technology should have some practical
knowledge about farming.
Land that is being utilized for off-season vegetable farming should be tested
which will help in determining the quality of land for agriculture purposes.
Farmer should ensure that the plant they are planning to grow must have the
ability to self-pollinate under the plastic sheet.
Selection of the seed is most important factor because this determines the
productivity of the crop.
Vegetables, which are in demand, should be cultivated, this will help in earning
higher profit margins.

Curtsey: Mian Shadi Agriculture Farms Mamoonkangan, Faisalabad

14

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

Timing of cultivation of vegetables has to be done accurately. The farmer should

have knowledge about the benefit that the early crop will offer and should gather
data about the prices of these early crops.

4 LAND UTILIZATION
A bar chart showing possible utilization of land is given in Table 4-1:
Ta ble 4-1: Bar c ha rt s ho wi ng t he occupat io n of la nd
Description

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

OFF SEASON
Tomato
Cucumber
Hot & Sweet
Pepper
Squashes
Brinjal

4.1 M ode of Land Ac quis itio n

Agricultural land can be taken on lease or purchased for the implementation of the
proposed project.
4.2 M ate rial Ava ila bi li ty

Tunnel material i.e. mild steel bar, Plastic Sheet, Iron Wire, Bamboo, is available
locally from different suppliers.
Mian Shadi Agricultural Material Company, Syngenta Pakistan Ltd. and Haji
Sons are the major suppliers of hybrid seeds.
Fertilizers of all kinds are available locally.
Pesticides of different natures are also available locally.
Water is available from canal or can be used from peter engine.

4.3 Ex pe cte d Pro duct io n a nd Sa le price

Expected production and sale price of some vegetable is given in Table 4-2, below: Ta ble 4-2: Ex pe cte d Produc tio n a nd Land Ut il i zat ion
Vegetable

Tomatoes
Cucumber
Brinjal
Hot Pepper
Sweet Pepper
Squashes

Land
Utilization
(Acres)
2.5
2.5
2.5
2.5
2.5
2.5

Production
Quantity (Kgs)/
Acre
25,000
25,000
24,000
12,000
18,000
25,000
15

Production
Quantity
(Kgs)
62,500
62,500
60,000
30,000
45,000
62,500

Sale Price
Rs./ Kg
10
10
8
15
15
8

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

The prices of vegetables in normal season are around one-third of the prices of
vegetables grown in off-seasons.

5 MACHINERY REQUIREMENT
Following machinery is required for an off-season vegetable farm of 15 acres:
Ta ble 5-1: Too ls , Equi pme nt a nd Ve hic le s
Description

Number

Rotavator
Ridger
Soil Leveler/ Scraper
Spray Machines & Farm Tools
Peter Engine
Total cost of tools & equipment cost
Tractor & Cultivator
Total cost of vehicle
Total cost of tools, equipment & vehicle

1
1
1
1
1

Cost per
Unit (in Rs)
30,000
10,000
10,000
37,500
20,000

350,000

Total Cost
(in Rs)
30,000
10,000
10,000
37,500
20,000
107,500
350,000
350,000
457,500

6 HUMAN RESOURCE REQUIREMENT

6.1 Numbe r of Sta ff Re qui re d
Ta ble 6-1: Numbe r o f Staf f & O ff ice rs re qui re d
Description

Number

Farm Manager
Labor
Guard
Total

1
5
1

Monthly Salary per

person (Rs.)
3,000
1,800
1,800

Annual Salary (Rs)

36,000
108,000
21,600
165,600

Apart from the above mentioned staff requirement part time workers for three month
will be required during the picking season. Following table shows the part time staff
requirement:
Ta ble 6-2: Pa rt-t i me s taff re qui re me nt
Description
Labor 7

Number
4

Salary (per Day) (Rs)

50

Labor requirement per acre

16

Salary per Month (Rs)

1,500

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

7 INFRASTRUCTURE REQUIREMENT
Ta ble 7-1: La nd & B ui l di ng Cove re d Are a
Description
Agriculture Land (Acre)

Area (Acre)
15

Ta ble 7-2: Co ns t ructio n Cos t fo r wa lk- in t unne l pe r Ac re

Description (Material)
Misc. pipe length required
Plastic string
Iron rods
Welding and labor
Total Cos t i n Rs . pe r Ac re
Plastic Cost (Kg/Acre)
Salvage value of Plastic after a year 8
Total

No. of
Units
3300 RFT
3 Kg
180 kg
1

Price Per
Unit (in Rs.)
8
40
22
2,000

170 Kg
25%

70

Total Cost
(in Rs.)
26,400
120
3,960
2,000
32,480
11,900
44,380

7.1 Sui table locatio n fo r t he pro pos e d pro je ct

On the basis of weather conditions and population base, off-season vegetable
farming project can be located near the big cities on fertile land.
Big cities have adequate consumption of various vegetables. As such, the project can
be located near Lahore, Karachi, Islamabad, Faisalabad, Sahiwal, Mardan, and
Quetta etc.
7.2 Uti li tie s Re qui re d

Electricity
Diesel (for tube well operations)
Water
Telephone/Fax

The plastic will be resold every year at a salvage value of 25%

17

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

8 PROJECT ECONOMICS
Ta ble 8-1: Pro je ct Cos t
DESCRIPTION
Building & Civil works
Plant & Machinery
Furniture & Fixture
Vehicles
Pre-Operating Cost
Total Fixed Cost
Cash

Cost (in Rs)

487,200
107,500
50,000
350,000
62,800
1,057,500
41,227

Equipment Spare Parts Inventory

Up-Front Land Lease

5,000
120,000

Total Working Capital

Total Project Cost

166,227
1,223,727

Ta ble 8-2: Fi na nci ng Pla n

Financing

Rs.

Equity
Debt

50%
50%

611,864
611,864

Ta ble 8-3: Pro je ct s Re turn

Project Internal Rate of Return (IRR)
Net Present Value (NPV) (in Rs)
Payback Period (Years)

58.70%
1,879,500
2.04

18

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

9 KEY SUCCESS FACTORS

The commercial viability of the project depends upon the regular and consistent
supply of good quality hybrid seeds and fertilizers.
The other important aspect is the need for strong linkages with the local market and
progressive vegetable exporters.
9.1 Gui de li ne s for s ucce ss ful c ul tiva tio n
Following principles need to be pursued for the best productivity of vegetables:
1. Use of high quality hybrid seeds.
2. Having and maintaining fertility of land within the tunnel during the period of
cultivation.
3. Selection of profitable vegetables on the basis of best analysis of cost and
revenues for a given season. Cost efficiency through better management.
4. Timely control of pests, diseases and exercise of preventive measures.
5. Maintenance & control of internal temperature & humidity in the tunnel.
6. Timely irrigation and fertilization.
7. Timely training and grading of plantation.
8. Expansion in customers market.
9. Fertilization should be done at the soil bed preparation stage. The second
fertilization, after 3 weeks interval the third after 6 weeks and finally during the
harvesting period.
10. Post harvest includes protection from direct sunlight and speedy transport to the
market.
11. Proper soil analysis for determining soil nutritional level.

10 THREATS FOR THE BUSINESS

Crop failure in any year.

Effect of change in the government regulations.
Absence of crop insurance.

11 OPPORTUNITIES FOR THE BUSINESS

Hybrid seeds that provide higher yield can lead to lower unit cost.
Off-season cultivation of high value vegetables will fetch better price and
provide continuous supply to the processing industries.
Higher prices can be obtained by producing the right crops, at the right times and
of better quality. They may also depend on negotiating skills and targeting high
price buyers.

19

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

12 FINANCIAL ANALYSIS
12.1 Pro je cte d I nco me State me nt
PROJECTED INCOME STATEMENT

Total Sales Revenue

COST OF GOODS SOLD
Raw Material
Payroll (Production Staff)
Machine Maintenance
Direct Water
Plastic Cost
Total
Gross Profit
OPERATING EXPENSE
Payroll (Admin)
Fixed electricity
Administrative Overheads
Amortization (Pre-operational Expenses)
Transport Cost
Packing Cost
Depreciation
Total
Operating Profit
NON-OPERATING EXPENSE
Financial Charges on Long Term Loan
Financial Charges on Running Finance
Land Lease
Total
PROFIT BEFORE TAX
Tax
PROFIT AFTER TAX
Retained Earnings beginning of year
Retained Earnings end of year

in Rs
Year-10

Year-1

Year-2

Year-3

Year-4

Year-5

Year-6

Year-7

Year-8

Year-9

2,851,750

2,994,338

3,144,054

3,301,257

3,466,320

3,639,636

3,821,618

4,012,699

4,213,334

4,424,000

408,125
414,000
60,000
30,000
178,500
1,090,625
1,761,125

428,531
434,700
63,000
33,000
142,800
1,102,031
1,892,306

449,958
456,435
66,150
36,300
161,096
1,169,939
1,974,115

472,456
479,257
69,458
39,930
166,362
1,227,462
2,073,795

496,078
503,220
72,930
43,923
175,377
1,291,529
2,174,791

520,882
528,381
76,577
48,315
183,972
1,358,127
2,281,509

546,927
554,800
80,406
53,147
193,214
1,428,493
2,393,125

574,273
582,540
84,426
58,462
202,864
1,502,564
2,510,135

602,987
611,667
88,647
64,308
213,010
1,580,618
2,632,716

633,136
642,250
93,080
70,738
223,660
1,662,863
2,761,137

21,600
36,000
28,518
6,280
322,500
322,500
75,110
812,508
948,618

22,680
39,600
29,943
6,280
338,625
338,625
75,110
850,863
1,041,443

23,814
43,560
31,441
6,280
355,556
355,556
75,110
891,317
1,082,798

25,005
47,916
33,013
6,280
373,334
373,334
75,110
933,991
1,139,804

26,255
52,708
34,663
6,280
392,001
392,001
75,110
979,017
1,195,774

27,568
57,978
36,396
6,280
411,601
411,601
75,110
1,026,534
1,254,975

28,946
63,776
38,216
6,280
432,181
432,181
75,110
1,076,690
1,316,435

30,393
70,154
40,127
6,280
453,790
453,790
75,110
1,129,644
1,380,491

31,913
77,169
42,133
6,280
476,479
476,479
75,110
1,185,564
1,447,151

33,509
84,886
44,240
6,280
500,303
500,303
75,110
1,244,632
1,516,505

53,476
16,623
120,000
190,099
758,518
140,481
618,037
0
618,037

45,059
0
120,000
165,059
876,384
181,734
694,650
618,037
1,312,687

35,631
0
120,000
155,631
927,167
199,509
727,659
1,312,687
2,040,346

25,072
0
120,000
145,072
994,732
223,156
771,576
2,040,346
2,811,921

13,245
0
120,000
133,245
1,062,528
246,885
815,643
2,811,921
3,627,565

0
0
120,000
120,000
1,134,975
272,241
862,734
3,627,565
4,490,299

0
0
120,000
120,000
1,196,435
293,752
902,683
4,490,299
5,392,981

0
0
120,000
120,000
1,260,491
316,172
944,319
5,392,981
6,337,300

0
0
120,000
120,000
1,327,151
339,503
987,648
6,337,300
7,324,949

0
0
120,000
120,000
1,396,505
363,777
1,032,728
7,324,949
8,357,677

20

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

12.2 Pro je cte d Cas h Flo w Sta te me nt

PROJECTED CASH FLOW STATEMENT
Year-0

Operating activities
Net profit
Amortization (Pre-operational Expenses)
Depreciation
Accounts receivable
Equipment Spare Parts Inventory
Stocks-RM
Accounts payable
Cash provided by operations
Financing activities
Long term debt principal repayment
Lease Payment
Lease Expense
Addition to Long Term Debt
Running Finance Repayment
Issuance of share
Cash provided by/ (used for) financing activities
Total
Investing activities
Capital expenditure
Cash (used for)/ provided by investing activities
Net Cash
Cash balance brought forward
Cash Balance
Running Finance
Cash carried forward

(5,000)
0
(5,000)

(120,000)

Year-1

Year-2

Year-3

Year-4

Year-5

Year-6

Year-7

Year-8

Year-9

in Rs
Year-10

618,037
6,280
75,110
0
(250)
0
34,002
733,179

694,650
6,280
75,110
0
(263)
0
1,700
777,477

727,659
6,280
75,110
0
(276)
0
1,785
810,558

771,576
6,280
75,110
0
(289)
0
1,874
854,551

815,643
6,280
75,110
0
(304)
0
1,968
898,698

862,734
6,280
75,110
0
(319)
0
2,066
945,871

902,683
6,280
75,110
0
(335)
0
2,170
985,907

944,319
6,280
75,110
0
(352)
0
2,278
1,027,636

987,648
6,280
75,110
0
(369)
0
2,392
1,071,061

1,032,728
6,280
75,110
0
7,757
0
2,177
1,124,052

(70,147)
(120,000)
120,000

(78,565)
(120,000)
120,000

(87,993)
(120,000)
120,000

(98,552)
(120,000)
120,000

(110,378)
(120,000)
120,000

0
(120,000)
120,000

0
(120,000)
120,000

0
(120,000)
120,000

0
(120,000)
120,000

0
0
120,000

445,636
(166,227)

611,864
937,500
932,500

(236,375)
496,804

(78,565)
698,912

(87,993)
722,565

(1,057,500)
(1,057,500)
(125,000)
0
(125,000)
166,227
41,227

496,804
41,227
538,031
0
538,031

698,912
538,031
1,236,943
0
1,236,943

722,565
1,236,943
1,959,509
0
1,959,509

21

0
(98,552)
755,999

755,999
1,959,509
2,715,507
0
2,715,507

0
(110,378)
788,319

788,319
2,715,507
3,503,826
0
3,503,826

0
945,871

0
985,907

0
1,027,636

0
1,071,061

120,000
1,244,052

945,871
3,503,826
4,449,698
0
4,449,698

985,907
4,449,698
5,435,605
0
5,435,605

1,027,636
5,435,605
6,463,240
0
6,463,240

1,071,061
6,463,240
7,534,302
0
7,534,302

1,244,052
7,534,302
8,778,354
0
8,778,354

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk-in Tunnel)

12.3 Pro je cte d Bala nce She e t

PROJECTED BALANCE SHEET
Year-0

Year-1

Year-2

Year-3

Year-4

Year-5

Year-6

Year-7

Year-8

Year-9

in Rs
Year-10

Current Assets
Cash
Equipment Spare Parts Inventory
Stocks and Inventory
Pre-paid Land Lease
Receivable
Total

41,227
5,000
0
120,000
0
166,227

538,031
5,250
0
120,000
0
663,281

1,236,943
5,513
0
120,000
0
1,362,456

1,959,509
5,788
0
120,000
0
2,085,297

2,715,507
6,078
0
120,000
0
2,841,585

3,503,826
6,381
0
120,000
0
3,630,208

4,449,698
6,700
0
120,000
0
4,576,398

5,435,605
7,036
0
120,000
0
5,562,640

6,463,240
7,387
0
120,000
0
6,590,628

7,534,302
7,757
0
120,000
0
7,662,058

8,778,354
0
0
0
0
8,778,354

Gross Fixed Assets

Less: Accumulated depreciation
Net Fixed Assets

994,700
0
994,700

994,700
75,110
919,590

994,700
150,220
844,480

994,700
225,330
769,370

994,700
300,440
694,260

994,700
375,550
619,150

994,700
450,660
544,040

994,700
525,770
468,930

994,700
600,880
393,820

994,700
675,990
318,710

994,700
751,100
243,600

62,800
62,800
1,223,727

56,520
56,520
1,639,391

50,240
50,240
2,257,176

43,960
43,960
2,898,627

37,680
37,680
3,573,525

31,400
31,400
4,280,758

25,120
25,120
5,145,558

18,840
18,840
6,050,410

12,560
12,560
6,997,008

6,280
6,280
7,987,048

0
0
9,021,954

166,227
166,227

0
34,002
34,002

0
35,702
35,702

0
37,487
37,487

0
39,361
39,361

0
41,329
41,329

0
43,396
43,396

0
45,566
45,566

0
47,844
47,844

0
50,236
50,236

0
52,413
52,413

Long Term Liabilities

Long Term Loan
Total

445,636
445,636

375,489
375,489

296,924
296,924

208,931
208,931

110,378
110,378

0
0

0
0

0
0

0
0

0
0

0
0

Equity
Paid-up Capital
Retained Earnings
Total

611,864
0
611,864

611,864
618,037
1,229,901

611,864
1,312,687
1,924,550

611,864
2,040,346
2,652,209

611,864
2,811,921
3,423,785

611,864
3,627,565
4,239,429

611,864
4,490,299
5,102,162

611,864
5,392,981
6,004,845

611,864
6,337,300
6,949,164

611,864
7,324,949
7,936,812

611,864
8,357,677
8,969,541

1,223,727

1,639,391

2,257,176

2,898,627

3,573,525

4,280,758

5,145,558

6,050,410

6,997,008

7,987,048

9,021,954

Intangible Assets
Pre-operational Expenses
Total
TOTAL ASSETS
Current Liabilities
Running Finance
Accounts payable
Total

TOTAL LIABILITIES AND EQUITY

22

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk in Tunnel)

13 KEY ASSUMPTIONS
Ta ble 13-1: Cro p As s umptio ns
Crop
Assumptions

Cost per
Seed in Rs.

Tomato
Brinjal
Cucumber
Hot Pepper
Sweet Pepper
Squashes
Sale Price Growth Rate

2.5
2.5
2.5
2.5
2.5
2.5

Average
Av. Seed Crop Yield Sale Price
Seed
Price/
per Acre in of Crop per
Requirement Acre
Kgs
Kg
in unit/ Acre
15,000
6,750
25,000
10
15,000
6,750
25,000
10
15,000
20,250
24,000
8
15,000
7,500
12,000
15
15,000
22,500
18,000
15
7,000
7,000
25,000
8
5%

Ta ble 13-2: Eco no my re late d As s umptio ns

Electricity Growth Rate
Water price growth rate
Wage Growth Rate

10%
10%
5%

Ta ble 13-3: Ex pe ns e s As s umpt ions

Crop Wastage
Raw Material price growth rate
Administrative Overhead (%of Total Revenue)
Water cost per Irrigation per Acre (Rs.)
Irrigation (No. of Months)
No. of times land irrigated (per month)
Fixed Electricity per Month
Transport Cost per Kg (in Rs)
Packing Cost per Kg (Rs)
Maintenance Cost of Tunnel Structure
Machine Maintenance (machine/month)
Machine Maintenance Growth Rate
Pesticide Requirement per Acre per Year (Rs)
Fertilizer Cost per Acre per Year (Rs.)
Field preparation cost per acre

23

15%
5%
1.0%
200
5
2
3,000
1.00
1.00
1,000
1,000
5%
7,500
7,500
3,500

Pre-Feasibility Study

Off-Season Vegetables Farming (Walk in Tunnel)

Ta ble 13-4: Cas h Flo w As s umpt io ns

Accounts Payable cycle (in days)
Equipment & Spare Part Inventory (in months)

15
1

Ta ble 13-5: Fi na ncia l As s umptio ns

Project Life (years)
Debt Ratio
Equity Ratio
Interest Rate on Long Term Loan
Interest Rate on Short Term Loan
Discount Rate
Debt Tenure (Years)
Payments in a Year

10
50%
50%
12%
10%
20%
5
1

24