Project information

BUSINESS PLAN
PROJECT NAME: Mdx Agri Fresh Produce
PROJECT LOCATION: Mdx Agri (Pty)Ltd.


PROJECT INFORMATION

Project Name	LDC Name
MDX AGRI FRESH PRODUCE

Town	Local Municipality	District Municipality
MOOI NOOI		MADIBENG
Project Team	Initial and Surname	Contact Number
MANAGING DIRECTOR	M.D. XUBA	081 797 6831

1. 
   PROJECT BACKGROUND
   

This is a start- up commercial vegetable farming enterprise. The farming enterprise will be conducted under the style of a private company which is registered in terms of the companies act, 2008.The managing director of the business is Mr M.D. Xuba who is the sole shareholder in the company. Briefly the details of the project are as follows:

Project Initiator: MR. M.D. XUBA
Current Status: START UP
Previous Farm Activities: FLOWER AND VEGETABLE FARMING
Farm Details:
Size of the Farm: 12.5 HECTORS WITH 8 BOREHOLES, 2 IN WORKING ORDER
Size of arable land: 8 HECTORS
Amount of land to be used for the project: 7.5 HECTORS WITH IRRIGATION RIGHTS.
Purchase Cost of the Farm: R 1785 000
Date of Purchase:
Average annual rainfall on the farm: 680.1MM

1. 
   Project Location
   

Name of the Project: MDX AGRI FRESH PRODUCE
Name of the Farm:
Name of the Nearest Town: MOOI NOOI
Name of the Local Municipality:
Name of the District Municipality: MADIBENG

2. 
   Situational Analysis
   

This farm was previously used for commercial farming of vegetables and flowers. Currently Mr Xuba is conducting small scale farming of vegetables. The business requires funding to cultivate lettuce in 7.5 hectors of land. If measured in terms of the envisaged cultivation of lettuce, the carrying capacity of the land is 240000 lettuce plants per hector, or 40 tons of lettuce per hector.

The table below shows a list of currently existing farm infrastructure.

Existing Infrastructure
MaxAgri Asset Budget
Land: Original cost		R1,785,000
Buildings		R0
Land and Buildings		R1,785,000
Equipment
Item Description		Price
Tractor		R60,000
Trade Vehicles		R65,000
Green House		R84,000
Existing Equipment		R209,000
TOTAL EXISTING ASSETS		R209,000

In order to operate as an efficient commercial enterprise, Mdx Agri requires the following infrastructure listed in the table below:

Required Infrastructure
New Equipment Required	QTY
Pipe Plastic. HDPE 40mm Class 10 100m	15		R18,978
Drip Aqua GML 30cm 1.14L/H 3048M	3		R8,486
Drip Lin 16mm 1.6L/H0.3 space 500m	20		R32,609
Returnable containers(Crates)	600		R90,000
Shade netting set	1		R1,763,696
Solar System	1		R91,723
FUNDING REQUIRED FOR NEW EQUIPMENT		R2,005,492

SWOT Analysis

Strengths Availability of sufficient water Close proximity of markets Wide range of customers	Weaknesses Cost of land for expansion purposes
Opportunities Emerging farmer support Economic transformation initiatives for black farmers	Threats Rising costs of inputs Availability of inputs

3. 
   Stake holders
   

Mdx Agri reagrds the following stakeholders as critical to the success of the business:

• 
  Suppliers
  
• 
  Customers
  
• 
  Employees
  
• 
  Banks
  
• 
  Finance companies
  

4. 
   Project Objectives
   
   1. 
      Short Term Objectives
      

The objective of Mdx is to supply the market with 2.5 million units of lettuce in its first year of operation

2. 
   Medium Term Objectives
   

• 
  Control pest build up by planting other types of vegetables
  
• 
  Implement employee skills development
  

1. 
   Long Term Objectives
   

• 
  Acquire an additional vegetable farm
  
• 
  Diversify our markets
  

5. 
   Socio-economic Indicators
   

We have applied average level of education, source of income, average level of income, and access to health facilities as indicators of the socio-economic status in the areas surrounding the location of the proposed farming enterprise.


Average Level of Education- Matriculation
Source of Income – formal, informal, and self-employment.
Average Level of Income - +-R 3500
Access to Health Facilities – On average 16000 households have access to a local clinic about 800 meters away.

2. 
   PROJECT OUTPUT
   

The project requires fertilizers, water, labor, seeds and pesticides as direct inputs. The table below shows the quantities, unit prices, and budgets for fertilizers, water, labor and pesticides.

1	Fertilizer requirements
	Tons of Fertilizer application/ha	1
	Purchase Price/Ton	R15,422.22
	Number of ha to be applied	7.5
	Fertilizer budget for 7.5ha		R 115,667
2	Water requirements budget
	Liters of water required	4800000
	Municipal water rate/liter	R0.02
	Water budget for 7.5ha		R72,000
3	Labor
	Number of employee	6
	Statutory rate/hour	R20.00
	Labor rate	R120.00
	UIF	R1.20
	Labor rate + UIF/hour	R121.20
	Number of hours/months	175
	wages for 6 employees/month	R21,210
	Months in a planting season	6
	Labor Budget for 6 months		R127,260
4	Cost of Seed
	Purchase price of seeds	R10,379
	Quantity	25000
		R0.42
	Quantity required for the season	187500
	Total Budget for seeds		R77,841
5	Pesticides
	1 liter per hectors Purchase price	R 320.00
	Number of hectors	7.5
	Cost of pesticides for7.5 hectors		R 2,400
	TOTAL BUDGET FOR INPUT COSTS		R 395,167

3. 
   PROJECT DESIGN
   

This project will specialize on producing lettuce on 7.5 hectors of the land. The 7.5 hectors of land will be planted on installment of 1.5 hectors every month. Planting will initially take place at the farm’s nursery.

1.