1st Draft
PRE-FEASIBILITY FOR
CUT FLOWER PRODUCTION IN PAKISTAN
PAKISTAN AGRICULTURE RESEARCH COUNCIL ISLAMABAD
MINISTRY OF NATIONAL FOOD SECURITY AND RESEARCH
Government of Pakistan
www.parc.gov.pk
January 2014
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CONTENTS
1.DISCLAIMER
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2. PURPOSE OF THE DOCUMENT
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3. INTRODUCTION TO SCHEME
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4. EXECUTIVE SUMMARY
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5. BRIEF DESCRIPTION OF PROJECT DESCRIPTION
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5.1 Critical Factors
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6. BACKGROUND
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6.1 Project Profile
6.2 Project Brief
6.3 Status of Cut Flower Production and Opportunity Rationale in Pakistan
6.4 Cut Flower Market in Pakistan
6.5 Proposed Timing for Market entry
6.6 Proposed Business Legal Status
6.7 Proposed product Mix
6.8 Production Capacity
6.9 Project Investments
6.10 Recommended Project Parameters
6.11 Suitable Locations/Potential Areas (A*)
6.12 Infrastructure Requirement
6.13 Key Success Factors
6.14 Recommendations and Suggestions
6.15 Current Industry Status
6.15 (a) International Status of Cut Flower trade:
6.15 (b) Pakistani Floriculture Industry:
7.MARKET ANALYSIS
7.1 Marketing Channels
7.2 Producer
7.3 Whole Seller Commission Agent
7.4 Retail Market
7.5 Consumers
7.6 Harvesting Packing and Transportation
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7.7 Pricing Structure
8. TECHNICAL ANALYSIS/REQUIREMENTS
8.1 Gladiolus
8.1 (A) Growing Season
8.2 Statice
8.2 (A) Growing Season
8.3 Iris
8.3 (A) Growing Season
8.4 Lily
8.4 (A) Growing Season
8.5 Field Preparation
8.6 Planting
8.7 Irrigation
8.8 Harvesting
8.9 Picking And Packaging
8.10 Machinery And Equipment’s
8.11 Wind Breaks
8.12 Office Equipment’s/Furniture
8.13 Irrigation Cost
8.14 Human Resource Requirement
8.15 Land Requirement/Office
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9. PROJECT ECONOMICS
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10. FINANCIAL ANALYSIS
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11. FINANCIAL STATEMENT
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12. REVENUE GENERATION
12. KEY ASSUMTIONS
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List of Tables
Table1: Product Mix
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Table 2: Project Parameters
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Table 3: Exporters of Cut flowers and flower
buds for bouquets, fresh or dried
Table 4: Planting Chart
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Table 5: Row and Plant Distance
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Table 6: Other Requirements
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Table 7: Machinery And Equipment’s
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Table 8: Other Equipment’s
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Table 9: Human Resource
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Table 10: Land and Other Requirements
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Table 11: Project Economics
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Table 12 :Financing
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Table 13: Project Cost
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Table 14: Revenue of the Project
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1. DISCLAIMER
This information memorandum is to introduce the subject matter and provide a general idea
and information on the said subject. Although, the material included in this document is based
on data / information gathered from various reliable sources; however, it is based upon certain
assumptions which may differ from case to case. The information has been provided on an ‘as is
where is’ basis without any warranties or assertions as to the correctness or soundness thereof.
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. PARC, its employees or agents do not
assume any liability for any financial or other loss resulting from this memorandum in
consequence of undertaking this activity. The contained information does not preclude any
further professional advice. The prospective user of this memorandum is encouraged to carry
out additional diligence and gather any information which is necessary for making an informed
decision; including taking professional advice from a qualified consultant / technical expert
before taking any decision to act upon the information.
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2. PURPOSE OF THE DOCUMENT
The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs in
project identification for investment. The project pre-feasibility may form the basis of an
important investment decision and in order to serve this objective, the document/study covers
various aspects of project concept development, start-up, and production, marketing, finance
and business management. The document also provides sectoral information, brief on
government policies and international scenario, which have some bearing on the project itself.
The purpose of this document is to facilitate potential investors in banana tissue culture by
providing them a holistic as well as a micro view of business with the hope that such
information as provided herein will help the potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally documented
sectors attains greater imminence as the research that precedes such reports reveal certain
thumbs of rules; best practices developed by existing enterprises by trial and error, and certain
industrial norms that become a guiding source regarding various aspects of business set-up and
it’s successful management. Apart from carefully studying the whole document one must
consider critical aspects provided later on, which form basis of any Investment Decision.
3. INTRODUCTION TO SCHEME
‘Prime Minister’s 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 subsidized 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).
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4. EXECUTIVE SUMMARY
The project of cut flower production, cultivation and marketing envisages the acquisition and
multiplication of demand driven cut flower species and its varieties for starting private
commercial flower business. The proposed business will start on 3 acre area. The project will
contain maximum available species of exotic and local cut flowers. Cut flowers can be grown in
a wide range of climatic conditions, in the plain and mountain areas of Pakistan. Certified seeds,
bulbs, cuttings and plants for establishment of mother blocks will be acquired from local and
international sources. The installed capacity will be 117,500 plants. Total cost estimate is 2.08
million Rupees with fixed investment of 0.8 million rupees and working capacity 1.25 million
rupees payback period is 1.08 year respectively.
5. BRIEF DESCRIPTION OF PROJECT DESCRIPTION:
The Cut flowers are propagated sexually by means of bulbs/corms and seeds and will be
marketed in local markets.
Location: Cut flowers farm is proposed to be started at favorable flower growing areas in
Pakistan.
Product: The farm will produce cut flowers to fulfill the local demand of cut flower varieties.
Target market: Target the local market of Pakistan and Middle Eastern countries.
Employment: The project will provide job to 5 people. If established at strategic location, will
start profit in the first year of operation.
5. (a) CRITICAL FACTORS
o Increasing and stable to growing demand of cut flowers from the institutional
market (offices, hotels and restaurants).
o Exclusive novelty products.
o Elevating demand in most cities of the country.
o Changing life style and increased demand for flower consumption in rural and urban
areas.
o Supply from colder and hilly areas of the country.
o Off season Encouraging and supporting the formation of bulb certification scheme,
particularly for bulb exports.
o Promoting opportunity for the development of native flora for the domestic and
export markets.
o Identification of market niches that can be supplied talking advantage of Pakistan’s
climate.
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6. Background:
6.1 Project Profile:
This project is an effort to briefly explain the establishment of Cut Flower Farm for
production of Gladiolus, Iris, Statice (Gul-e-Sataish) and Lily varieties. The document highlights
all the market management, and financial aspects required for the establishment and
successful of the project.
6.2 Project Brief:
Colorful flowers with pleasant fragrance have been a source of attraction to mankind.
Flowers provide pleasure through enlightening colors and spreading fragrance. Floriculture is a
branch of horticulture that deals with production, management and disposal of flowering
plants. Cut flowers are those flowers which have a known vase/shelf life like roses, gladiolus,
Iris, tuberose, gerbera, freesia, Ilium etc. The commercial cut flower production includes
growing of flowering plants and marketing of flowers cut along with some stem and leaf. The
demand of cut flowers is increasing day by day with changing life styles and social values now
people want flowers to glitter their occasions and ceremonies like wedding, parties etc.
The favorable agro-climatic conditions of Pakistan makes floricultural crop production a
promising business, the returns of these crops is much higher than other agricultural crops they
have a short life span and gives maximum returns. Cut flower demand varies during the year
depending upon different social utilities whereas supply of cut flowers fluctuates due to
seasonal effects of weather.
6.3 Status of Cut Flower Production and Opportunity Rationale in Pakistan:
Due to the varied agro-climatic conditions and relatively low cost of production,
Pakistan has immense opportunities not only to meet the local demands of both traditional and
cut flowers but also a high potential for export. Floricultural crops are highly perishable and
require immense care for production and marketing, they involve some technicality that may
boost the returns or lead to failure for which new techniques and technologies. Most of the
flowers produced in Pakistan are sold locally and very few are exported as our produce does
not meet the international export standards’ large numbers of cut flowers are wasted because
of lack of infrastructure, post harvest mishandlings and improper marketing. The important cut
flowers that have a known name in Pakistani trade are Roses, Gladiolus, Iris, Carnation,
Narcissus, Lilies, Gerbera, Freesia (Gul-e-Farzana) and Statice (Gul-e-Sataish). Statistical data
reveals that almost 10 to 12 Thousand tons of floricultural products are produced in Pakistan on
an estimated area of 6880 hectares with no data available on fresh flowers. Although cut flower
is one of the best options for business but still suffers neglection by the producers as they are
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not aware of the production technologies and possible benefits in terms of credits. Pakistan has
better scope in the future as there is a shift in trend towards tropical and sub tropical flowers
and this can be gainfully exploited by the country like Pakistan with reasonable diversity in
indigenous flora and climatic conditions in different regions.
In Pakistan, most of the flowers are produced in winter season when Europe sinks in
the snow and most of the traditional functions are held during that period. Our country is rich
in resources and has got favorable climate conditions that are very helpful for raising cut
flower. Pakistan can earn its foreign exchange in billions of U.S. dollars through export fresh
flowers and flower buds like the countries Sri Lanka, Iran, India, Kenya, Singapore and Thailand
etc.
6.4 Cut Flower Market in Pakistan:
As compared to other provinces floriculture is relatively better developed in Punjab due
to increasing competition in agriculture sector and the presence of major markets of Lahore,
Rawalpindi, Faisalabad and Islamabad. However it is still far behind in competition at
international level. Pattoki is the major center for floricultural production and marketing in
Pakistan. In recent years flower production has also increased in Kasur and Sheikhupura
districts. Other flower producing areas include Lahore, Chunian, Okara, Kallarkhar, Rawalpindi,
Faisalabad, Narowal, Sahiwal, Gujranwala, Manshara and Abbotabad. Major buyers of the cut
flower are in the larger cities including Karachi, Peshawar, Lahore, and Islamabad. However
marketing of cut flowers in these areas is still unorganized. In most cities flowers are brought to
wholesales markets, which mostly operate in open yard.
6.5 Proposed Timing for Market entry:
In Pakistan the demand of cut flowers is highly driven by social occasions but with the
changing life style and increasing awareness of the beneficial effects of the beautiful cut flowers
people have started including it in everyday life. However the production is highly dependent
upon season which can be minimized by exploiting the natural blessing of four available
seasons and topographical variations.
6.6 Proposed Business Legal Status:
The business can be started as an independent business or on partnership basis in
addition to it there are some technical complications involved in production, forming,
administrating, running and marketing of proprietorship or partnership business.
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6.7 Proposed product Mix:
Variety additional revenue will be generated by selling of corms and bulbs of Gladiolus,
Iris which will start from the third year.
Table1: Product Mix
Average
Name of Cut Flower seed/bulbs/corms
required per acre
Gladiolus
45,000
Iris
48,000
Statice
20,000-28,000
Lilies
48,000
Average yield per acre
45,000 stalk
48,000 stalk
25000
48,000 stalk
Price per Stick
(Rs.)
10-25
10-50
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90-160
6.8 Production Capacity:
Total farm area is assumed to be 3 acres for the cultivation of Gladiolus, Iris, Statice
(Gul-e-Sataish) and Lilies will be distributed on an area 1.5, 0.25, 1 and 0.25 acre respectively.
6.9 Project Investments:
The total project investment is 2.08 Million which includes capital cost of 0.824 million
and variable cost of 1.25 million approx. The project is financed on 90:10 equity bases.
6.10 Recommended Project Parameters:
Maximum Capacity
3 Acres
Total Cost
2.08 million Rupee
Table 2: Project Parameters
Human Resource
Technology/Machinery
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Local
Financial Summary
IRR
NPV
93%
@ 8 % Rs. 863,224,0.47
Location
As mentioned in A*
Pay Back Period
1.08 year
6.11 Suitable Locations/Potential Areas (A*):
Pakistan is a country conducive to small scale farming where floriculture provides an
opportunity for enhancing income from available land resources. Floriculture is an upcoming
opportunity in Pakistan since it provides more per acre income than traditional crops. It can
play a major role in the economy of Pakistan and can become an important sector such as
horticulture, livestock and fisheries.
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PUNJAB: Sahiwal, Lahore, Gujrat, Gujranwala, Multan, Faisalabad, Rawalpindi, Jhelum, Dera
Ghazi Khan.
KHYBER PUKHTUN KHWA(KPK): Peshawar, Kohat, Mansehra, Abbotabad, Battagram, Swat,
Mardan, Banu, D I Khan, FATA.
BALUCHISTAN: Quetta, Khuzdar, Pashin, Lorlai, Zob, Kohlo, Duki, Ziarat and Qalat
SIND: Karachi, Hyderabad, Sukhar, Larkana, Nawabshah, Khairpur.
GILGIT BALTISTAN: Gilgit, Hunza, Chilas, Astore, Ghizar.
KASHMIR: Rawlakot, Muzafarabad, Ponch, Bagh, Sudhnodi
6.12 Infrastructure Requirement:
o Land
o Water
o Roads
o Electricity
6.13 Key Success Factors:
o Increasing cut flower demand.
o Growing demand in hostile industry and offices.
o Exclusive novelty products.
o Elevating demand in most cities of the country.
o Changing life style and increased demand for flower consumption in rural and urban
areas.
o Off season supply from colder regions including Baluchistan and hilly areas of the
country.
o Encouraging and supporting the formation of bulb certification scheme, particularly for
bulb exports.
o Promoting opportunity for the development of native flora for the domestic and export
markets.
o Identification of market niches that can be supplied talking advantage of Pakistan’s
climate.
6.14 Recommendations and Suggestions:
o Most important is site selection, the farms should be established in areas that have
plenty of water, electricity facility and road access.
o Scientific information must be followed for farming practices including pest and weed
management.
o The key factor of success is availability of Healthy certified seeds/bulbs/corms, Land
preparation, sowing pattern, fertilizer management, and proper irrigation and
marketing strategies.
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o
Production must be demand oriented; the producer is advices to exploit the peak
seasons like valentine etc for maximum profit earning.
6.15 Current Industry Status:
6.15 (a) International Status of Cut Flower trade:
The total Export value of cut flower for the year 2007 was US $ 6.9 Billion while total
imports of cut flower was US $ 7.0 Billion in 2007. Largest exporters of cut flowers are
Netherlands, Colombia, Ecuador, Kenya, Italy and Belgium respectively. Netherlands is the
leading exporter of cut flower having a market share of 3.9 Billion USD while Columbia is the
Second largest exporter with a market share of 1.1 Billion USD respectively. Overall exports
increased by almost 30 % from 4.9 Billion Dollars in 2003 to 6.9 Billion Dollars in 2007. World’s
largest importers of fresh flower include United Kingdom, Germany, United States of America,
Netherlands, France, Russian Federation, Japan, and Italy. UK is the world’s largest importer
with total imports of 1.1 Billion Dollars followed closely by Germany and USA with imports of
1.1 and 1.0 Billions Dollars Respectively. World imports of Cut flowers increased by 30 % from
4.9 Billion Dollars in 2003 to 7.0 Billion Dollars in 2007 where Pakistan exported cut flowers
worth 218 US $ during 2007 and imports are of worth 190 US $. If we compare the resources
of Pakistan with the Netherlands, we have an area 20 times more, manpower 9 to 10 times
more and better climate, soil and irrigation system. What we are lacking is the modern
production technology.
The production of flower crops has increased significantly and there is a huge demand for
floricultural products in the world, resulting in growing International Flower Trade. The world
consumption of cut flowers and plants is increasing and there is a steady annual increase of 10
to 15 per cent in all importing countries. Due to globalization and its effect on income, there is
growing per capita floriculture consumption in most of the countries .In case of developed
countries, the consumption of flowers is closely linked with GNP per capita income and urban
population.
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Table 3: Exporters of Cut flowers and flower buds for bouquets, fresh or dried
(Thousand USD)
Exporters
Exported
Exported
Exported value Exported
Exported value
value in 2003 value in 2004 in 2005
value in 2006 in 2007
'World
4,954,492
5,329,851
5,605,120
6,120,753
6,996,985
'Netherlands 2,815,519
Colombia
'682,283
'Ecuador
295,223
3,054,422
703,441
342,230
3,116,423
906,320
370,251
3,332,531
967,037
435,834
3,944,605
1,114,884
403,028
Kenya
176,014
231,890
226,310
271,583
313,412
USA
52,036
39,418
41,643
45,837
73,095
'16,870
33,658
30,344
33,398
171
195
287
218
Zimbabwe
'Pakistan
158
6.15 (b) Pakistani Floriculture Industry:
In Pakistan, the flower business is mainly concentrated around the big cities like Karachi,
Lahore, Islamabad, etc. and is also turning towards a booming business. Therefore, with
increasing demand of flowers for number of utilities, flower business is likely to gain expansion.
Pattoki serve as the centre for floriculture activity in Pakistan. Through Kasur and Sheikhupura
districts have also developed some expertise in this field, still Pattoki serve as the hub market
for all floriculture trade. Pattoki “mandi” is the major forum for buying and selling of fresh cut
flowers especially roses. About one million pieces of cut flowers are daily exported from Pattoki
to different market in Pakistan, more important of which, are Karachi, Peshawar, Lahore, and
Islamabad. The flowers especially roses, gladioli, carnation, day lily etc are grown for sale as cut
flowers. Because of a large number of foreigners in these cities, there is a good demand of
these commodities. The area under roses is increases day by day. There is a well establishing
market in these towns and flowers of one kind or other are available throughout the year. The
prices of the flowers of these kinds vary according to the seasons and their availability. This
flowers commodity is on sale for all over the Pakistan from Peshawar to Karachi from October
to February. Area and production estimates are not available. The flowers have a sweet and
strong flagrance, very much liked by the Pakistan people but not appreciate by the Europeans.
The markets are dominated by few flower merchants who buy most of the produce and
distribute them to local retail outlets. The retail florist shops are scattered at different locations
normally operating on roadsides. The production and consumption of cut flowers has increased
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over the past decade and this increase is expected to continue. Demand for cut flowers is
growing tremendously as more and more people are becoming aware of the beauty of flowers
as decorative items. Weddings, birthday parties, seminars, and other such social gathering
events are incomplete without floral decorations.
7.
MARKET ANALYSIS
Since Floriculture in Pakistan is in embryonic stage with increasing awareness in people
about the significance of flowers and their beneficial effect on human psychology in everyday
stress relief. Floriculture is viewed as a lucrative enterprise for poverty alleviation. The
production is highly dependent on environmental factors and consumption is driven by social
events and gatherings. Flowers are highly perishable they require great care proper
infrastructure and transportation is required for their proper marketing.
7.1 Marketing Channels:
The marketing channel for cut flower is the same as that of other horticultural produce
from producers through whole sale/Commission agents and retailers it reaches the consumers.
The cut flowers are also purchased by hostile industry directly from producers. The marketing
channels of cut flower follow a wide range of different routes before reaching the consumer. In
general, however, cut flowers and foliage from producers follow one of the following
distribution channels from farming to retail.
7.2 Producer:
Most of the cut flowers are produced far away from the markets because of lack of
farmers market the producer fails to sell the produce to end consumers the produce is
auctioned to the whole seller at low prices from where it reaches retail markets.
7.3 Whole Seller Commission Agent:
Wholesalers are vital links in the chain from growers to consumers. Since it is possible
for the retailers to buy in bulk, it is left to the wholesalers who purchase large amounts of
flowers and break this bulk into smaller amounts. These smaller amounts then sold to retailers
or larger clients. Most of the wholesalers buy their product directly for larger producers or at
flower auctions which are held in the major cities.
These auctions handle majority of the produce in Pakistan. Most of the smaller retailed
do not purchase large quantities of a single variety, but rather purchase small quantity many
different varieties. Therefore, the wholesalers purchase most of the flowers at the auction.
Major markets of flowers where regular auctions take place include Patoki, Karachi, and Lahore.
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The prices normally vary according to region due to the fluctuations in supply and demand.
Individual growers and traders from across the country bring their produce to the auction
market. The auction normally takes places in the form of bundles which may contain different
number of flowers depending upon the variety. One of the major issues related to the growth
of this sector is the monopoly of middle men. Since it is not possible for small farmers to
participate in each auction he is bound to sell his product to the middle men.
7.4 Retail Market:
Retail shops present in every City now a days consumer prefers to buy cut flowers in
finished foam like bouquets or in the form of petals etc rear are those who buy individual sticks.
In addition flowers are also sold by at prominent road crossings in the major cities. Some of the
retail shops also contain refrigerators for the storage of flowers which is not recommended as it
affects flower quality.
7.5 Consumers:
Flowers are brought for different purposes; they are mainly consumed on weddings and
religious occasions. They are exchanged among people to show emotions and young people
purchase them as a sign of affection. People especially ladies buy flowers to decorate their
houses at special occasions and some in daily routine to create a pleasant environment.
Similarly larger hotels, restaurants and growing number of business also buy flowers to
decorate their lobbies and offices.
7.6 Harvesting Packing and Transportation:
Flowers are perishable in nature and require great care. Harvesting time depends upon
the destiny of the flowers if they are to be marketed to distant place then they must be
harvested before blooming in morning time. Field heat is removed by placing in shade and then
packed in bunch foam in cardboard cartons. Since the quantity is not very large mostly these
flowers are sent to other cities through buses.
The packaging of flowers has to satisfy a number of conditions, mainly in the field of handling,
and the protection of the quality and presentation. Different packaging materials are used,
depending on the type of produce and the function of protection. Cut flowers should be packed
in cardboard boxes made for this purpose. Generally cardboard measuring 100 cm ×25 cm×
10cm are used. Boxes of this size are costly, therefore other old suitable boxes like tube light
boxes or of other industries can also be used.
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7.7 Pricing Structure:
The price structure normally depends upon the quantity and variety of the flower. Price
normally determined by the Wholesaler and Retailers. Owing to the nature of supply and
demand, short-term price fluctuations occur frequently at the auctions. Some of the factors
influencing producer prices are:
o
o
o
o
o
o
o
o
o
Shape
Color of flower
Fragrance
Variety
Size and Stage of opening of buds
Color and quantity of leaf
Packaging
Overall appearances
Vase life
8. TECHNICAL ANALYSIS/REQUIREMENTS
This report includes pre-feasibility of following cut
flowers that may be considered for the production.
1)
2)
3)
4)
Gladiolus
Statice
Iris
Lily
8.1 Gladiolus:
Gladiolus commonly known as “sword Lily” has a known name in cut flower industry and
is very popular in flower arrangements and bouquet formation. Gladiolus produce long spikes
of numerous colors including white, pink, red, purple, Orange and green. Most popular among
are white varieties because they can be stained in different colors. It is native of South Africa
and Mediterranean.
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8.1 (a) Growing season
Gladiolus are propagated by means of corms that are
winter hardy, they must be sown in September or stored until
planting time the following April, may or replaced annually.
Gladiolus plantation starts from the month of October till
December they can be planted at 10-15 day interval to get
variation in production, however in some cooler regions it is
planted in the spring as the soil is fit for production.
Application of nitrogen significantly improves flower health.
The blooming season can be stretched by making succession plantings, by planting bulbs of
several sizes, and by using varieties which take different lengths of time to mature.
Gladiolus is found in a variety of types that include both the species and hybrid gladiolus. The
different types of species represent the geographic and ecological range of the many species in
this genus. The different combination of species used to create the different hybrids has led to
the establishment of several different types of hybrids as well.
8.2 Statice:
Statice also known as sea lavender or Marsh rosemary is a member
of genus Limonium. They are grown both for their flowers, and for the
appearance of the calyx, which remains on the plant after the true flowers
have fallen, and are known as "everlasting flowers". The plant is also very
drought-tolerant, so you can enjoy its blooms even if you forget to water it
from time to time. In fact, statice thrives in hot, sunny spots with welldrained soil. Plant them outdoors after all danger of frost has passed.
8.2 (a) Growing season
Statice is easy to grow and salt tolerant. Statice Seeds can be
initiated indoors 6-8 weeks before planting or sown directly
outdoors. Seeds are planted in nurseries in Feb while they are
shifted outdoors in March and April. It is very drought tolerant and
is mostly planted in cold season, sown in the month of OctoberNovember it requires full sun and well drained sandy soil for its
growth less disease attack makes it perfect for growers. Some
species of Statice have an offensive odour. English Statice comes in
1- to 2-inch clusters of Calyxes, each about 1 inch across. Stems are 1 to 1 feet long. The
German Statices' small gray bracts arch backward, while the English Statice feature calyxes that
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are yellow, white, purple, lavender or pink with tiny white or yellow flowers inside. Latifolia
Calyxes are white with blue violet flowers. Statice Flowers can be spray dried with a fixative.
8.3 Iris:
Iris is flowering plants with showy flowers fan like in shape more
symmetrical six-lobed flowers, named after the Greek goddess who
rode rainbows, comes in many magical colors. The distinctive
flowers have three large outer petals called "falls" and three inner
upright petals called "standards." The falls may have beards or
crests. Bearded irises are so-called because they have soft hairs
along the center of the falls. In crested iris, the hairs form a comb or ridge.
8.3 (a) Growing Season
Iris are propagated by means of bulbs, they require at least half a day of sun and well drained
fertile and naturally acidic soil in the month of September October. After planting, water well to
settle the soil around the bulbs. In warmer climates foliage will form in the autumn, winter will
bring taller growth and flowers will develop in the spring. In colder regions foliage and flowers
will wait until winter's cold has passed and will develop in the spring.
When in bloom, feel free to cut iris flowers for spring bouquets. This will not hurt the
plants. After blooming has finished for the season leave the foliage in place;
don't cut it off. The leaves will gather sunlight, create food through
photosynthesis and strengthen the bulbs for the future. Water as needed
during active growth periods; about 1" of moisture per week is a good
estimate. During the summer the leaves will yellow and die back as the plant
slips into dormancy. Foliage many be removed at this point. Your Dutch irises
will rest for a few months before beginning the next growing cycle. Varieties of iris includes
Dutch iris, Blue flag Iris, Yellow flag Iris etc.
8.4 Lily:
Lily is one of the best cut flowers and potted plant. Out of different types
of lilies Asiatic and Oriental types are most fascinating, in international floriculture
trade easter lilly and tiger lily are also important one.
8.4 (a) Growing season
The best time of planting hybrid lilies under north Indian climate is from
mid-September to mid-December. Planting density depends on cultivar, bulb size and time of
the year, High light intensity in summer reduces the stem length and therefore 50% shade nets
18
are recommended to cover the crop. Low light intensity in winter leads
to flower abortion and abscission. Supplementary lighting during
winter increases yield, stem sturdiness and quality of flowers. Asiatic
hybrids take 8-10 weeks, while Orientals 14-16 weeks from planting to
harvesting, but `frozen –in’ (Eskimo) takes less time The blooms are cut
when the lower most flower bud is fully colored but not open.
Recommended varieties are star gaze, Longiforum and robina.
8.5 Field Preparation:
The first and most important factor in cut flower production is site selection and land
preparation. The land near by a established flower market or hub must be preferred for
production, road access is another factor that must be considered along with water availability
and electricity. Then comes field preparation in which the field is levelled first The best way for
field is to divide the field in parallel cut flower fields having water canals on one side and
driveway on the other. So the water canal will water the fields on its both side and it will be the
case with driveways.
Wind can also cause damage to the flowers to protect the site from wind breaking trees
or shrubs should be grown around the farm. Building and other infrastructure is also required
for the production of cut flowers which are described in detail in a separate heading. Bed
preparation depends upon the variety of the flowers. If plants are relatively tall with dense
foliage, the bed should be narrower because insufficient sunlight will penetrate the center of
the flowerbed, resulting in poor plant growth. Workers can easily reach 2 feet into a flowerbed
to make a proper cut and remove the flower without damaging the crop. The flower beds will
not be wider than 4 feet.
8.6 Planting:
Planting time vary with the variety of the cut flower. Planting time of different varieties
of cut flowers is proposed as follows
19
Table 4: Planting Chart
Month
Gladiolus
Statice
Iris
Lily
Sept
Corms
-----
----
Oct
Corms
Bulbs sowing
Bulbs sowing
Nov
Dec
Bulbs sowing
---
Bulb sowing
Bulb sowing
Feb
corms
Corms
+ harvesting 3
months
Harvesting + 3
months
Harvesting
Seed sowing
Seed
sowing/Nursery
transplantation
after 15 Oct
-----
Mar
Harvesting
Jan
Harvesting +
2.5 months
Harvest
Harvest
Harvesting + 3
months
Harvesting
Harvesting +
months
Harvesting
Harvesting
It is recommended that plantation should be done in batches with some time interval
which will ensure availability of products throughout the growing season and the above
mentioned planting chart is for warmer to moderate temperature regions of the country.
Planting density changes with the plant types and varieties. The plant to plant and row to row
distance for the recommended varieties is provided as follows:
Table 5: Row and Plant Distance
Plant to Plant distance
Row to Row Distance
Plant per acre
Gladiolus
6’’-9’’
12’’-18’’
40,000-50,000
Iris
6”- 8’’
12’’
40,000-56,000
O
20
Statice
12”-15”
15’’-18’’
20,000-28,000
Lily
6”-8”
12’’
40,000-56000
Table 6: Other Requirements
Gladiolus
Water
Weekly
Iris
Weekly
Requirements
Price per seeds/bulb
Fertilizer
Farm yard manure)
Fertilizer pesticides
Foliar Spray
Sunlight
Rs-7/-
Sunlight
Rs-20/-
Statice
Weekly
Lily
Weekly
Sunlight
Rs-3/-
Sunlight
Rs-50/-
Rs-21,000/Rs-7000/
Rs-1500-2000/-
8.7 Irrigation:
Most of the cut flower requires water on weekly basis. Water should be provided
analyzing the condition of the soil by looking at dampness. For best results micro-irrigation
system can be used which causes minimum damage to the shoot and flower. Given the
importance of water for cut flower production it is recommended that the farmer should have
its own water source e.g. a well or a tube well.
8.8 Harvesting:
Since cut flowers have a very perishable nature, therefore, they are normally harvested
a few days before full bloom to increase their shelf life. Harvesting the flowers early in the
morning also helps in keeping the freshness and hence increases shelf life. Knives and shears
should be kept sharp to ensure that stems are cut evenly and not crushed as crushed stems
restrict the ability of flowers to take up water, thereby reducing their vase life. That’s why
workers should take care so that their output is of high quality. Harvesting calendar is provided
in the Table 3.
8.9 Picking and Packaging:
Picking must be done early morning and the harvested flowers must be kept in shade to
remove field heat. Use of clean sterilized utensils eg: cutters must be considered. The flowers
are harvested with closed buds if to be marketed to distant places. Before marketing its better
to treat flowers with life enhancing solutions of sucrose other chemicals can also be used like
calcium chloride solutions etc. then Packed in cardboard boxes or wooden containers in bunch
foam and then marketed.
21
8.10 Machinery and Equipment’s:
The equipment’s/Tools that are required are as follows:
Table 7: Machinery and Equipment’s
Items
Cutters/Shovels/Carts
Cost Rs
Rs-25,000/-
8.11 Wind Breaks:
Trees can be grown at the edges of the fields to serve as wind breakers. Depending
upon the locality mud walls, other shrubs can also serve the same purpose.
8.12 Office Equipment’s/Furniture:
Table 8: Other Equipment’s
Items
Furniture
Stationery/Office Equipment’s
Total
Cost Rs
30,000/20,000/50,000/-
8.13 Irrigation Cost:
Canal water Irrigation cost is Rs-50/acre and alternate irrigation charges are 700 rupees
per hour and it takes 2.5 hr to fill one acre so irrigation charges per acre for once is Rs.1750.
8.14 Human Resource Requirement:
Table 9: Human Resource
Description
Supervisor
Farm worker (Mali)
Farm worker (Labour)
No
1
1
3
Monthly salary
12,000
10,000
6500
8.15 Land Requirement/Office:
Table 10: land and other Requirements
Description
Quantity
Land
3 acre
Office/store
1
22
Yearly salary
144,000
120,000/19,500/-
Rent/month/year*
5000-35000*
12,000
It is proposed that the project be started at land on lease and the land rent varies from
5,000 to 35,000 as per Location and average of which is used for calculation.
9. PROJECT ECONOMICS:
Table 11: Project Economics
Internal Rate of Return (IRR)
Benefit Cost Ratio (BCR)
Pay Back Period (yrs)
Net Present Value (NPV)
93%
2.13
1.08
@ 8 % Rs. 8632240.47
10.
FINANCIAL ANALYSIS:
Following table provides details of the equity required and variables related to bank
loan;
Table 12: Financing
Description
Details
Total Equity (10%)
Bank Loan (90%)
Markup per annum
Tenure of the Loan (Years)
Grace Period (Years)
208,175
1,873,575
8%
08
1
23
Table 13: Project Cost
Project Cost
Description
Area
Capital Cost/Fixed Assets
Machinery and Equipment’s
Stationery /Office Equipment’s
Building Infrastructure
Bulbs (Gladiolus + Iris)
Furniture
Unit/Cost (Rs)
3 acre
25000
20000
40,000
709,000
30,000
824,000
Variable Cost
Land Rent
Seeds/Bulbs (Lily + Statice)
Land preparation charges
Irrigation charges
Fertilizer charges
Pesticide cost
Foliar spray
Human resource charges
Transportation Charges
Office/Store rent
Miscellaneous
60, 000
672000
6000
22750
21000
7000
2000
283,000
20,000
144000
20000
1257750
2,081,750
Total Cost
24
11. FINANCIAL STATEMENT
Investmen
t
Years
0
Infrastructur
e Oper. &
Maint.
Variable
Cost
2081750
Total Cost
Total
Benefits
Cash
flow
2081750
0
-2081750
Instalments
Income
after
Instalment
PV Cost
PV
Benefit
1
17250
1257750
1275000
3191250
1916250
149886
1766364
1275000
3191250
3102604.
2
3016420.
7
2932631.
3
2851169.
3
2771970.
1
2
18113
1383525
1401637.5
3350813
1949175
359862
1589313
1297812.5
3
19018
1521878
1540895.6
3518353
1977458
359862
1617595
1321069.6
4
19969
1674065
1694034.3
3694271
2000237
359862
1640374
1344779
5
20967
1841472
1862439.3
3878984
2016545
359862
1656683
1368948.5
6
22016
2025619
2047634.8
4072934
2025299
359862
1665437
1393585.8
7
23117
2228181
2251297.5
4276580
2025283
359862
1665421
1418699.3
8
24272
2450999
2475271.4
4490409
2015138
359862
1655276
1444297.1
2694971
2620110.
7
10864192
23181127
Discount
Factor
1
0.926
0.857
0.794
0.735
0.681
0.630
0.583
25
12. REVENUE GENERATION
Table 13 Revenue of the Project
Product
Spikes/acre
Area
(acre)
Gladiolus
45000/acre
1.5
67500 Spikes
Average
Sales Price
(Rs./Unit)
17.5
Lilly
12000
0.25
48000 Spikes
125
150,000,0
12000
25000
0.25
1
48000 spikes
2500
30
6
360,000
150,000
319,125,0
Iris
Statice
Total Revenue Rs.
Actual
Production
First Time
Revenue
(Rs)
118,1250
12. KEY ASSUMPTIONS
Description
Interest Rate
Loan Tenure
Grace Period
Debt Equity Ratio
Sale Price Growth Rate
Repair and Maintenance Rate
Prepaid Rent Period
Increase in Staff Salaries
Increase in Office Expense
Increase in Input Price
8%
8 Years
1 Years
90:10
5%
5%
1 Year
10%
10%
10%
26