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Business Plan Tomato

Production Ndola 

Zimbabwe PDF
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Original Title: Business plan tomato production Ndola Zimbabwe.pdf
Uploaded by Saifullah Zamri on May 31, 2016
The project is aimed at producing graded and packed tomatoes of the
Tengeru variety for supply to Ndola bulk buyers. The initial investment
per farmer is estimated to be K17,581,221 broken d… Full description

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Related titles Chipulukusu 

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Vegetable
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FStT BUSINESS PLAN - 2009-2012

CHIPULUKUSU
VEGETABLE GROWERS  
cvg 

EXECUTIVE SUMMARY

The Chipulukusu Vegetable Growers (CVG) project is aimed at producing graded and packed
tomatoes of the Tengeru variety for supply to Ndola bulk buyers. CVG is a registered
cooperative which has 100 paid up members who will constitute the urban producers for the
MoPO. The project will supply tomatoes throughout the year from December 2009. CVG is
organised in committees dealing with the whole production, supply and marketing chain. The
committees are made up of representatives of clusters. The Ministry of Agriculture and
Cooperatives will provide extension services for the farmers whereas other partners will provide
technical advice, and later financing and credit. Individual farmers will sort and grade tomatoes
at the farm plot before transfer to a central location for final sorting, grading and packing by
CVG. Transportation of the product to clients will be handled by CVG. CVG will also carry out all
functions related to marketing contracts and debt management with various clients on behalf of
its members. Members of CVG will enter into individual contracts with CVG related to the
production and marketing of tomatoes as well as to loan and other financial aspects.

The initial investment per farmer is estimated to be K17,581,221 broken down into variable
costs in terms of consumables and farmer management costs of K5,315,575 and K12,265,646
respectively. The working capital per farmer will be K1,000,000. Therefore, the total production
cost per kilogram of tomato is estimated to be K1,159. The variable cost is projected to be
K265.45 per kilogram of tomato.

The profitability assumption is based on the total annual production of 20,000 Kg of tomatoes.
This is the volume of the product that will be supplied to the market after deducting 25% for
losses. The break even quantity is 7,055 Kg translating into 282 boxes of tomatoes per farmer
per year. The basic minimum average transfer price, from each farmer to CVG, to achieve
profitability is K2,000 per Kg of tomatoes. The project is expected to provide an annual profit in
the first year of K11,180,268 per farmer with a return on investment (ROI) of 103%. The
average net profit margin over the projected 5 year period, based on the transfer price of
K2,000/kg, is estimated at 48%. The price of K2,000/Kg of tomato is the price at which the
farmer will supply the cooperative. CVG will therefore sell tomatoes at a basic minimum of
K2,500/Kg – the maximum price will depend on the market.

 A worst case scenario is when farmers produce less than the break-even point (i.e. 7,055Kg per
annum) which will yield a loss of K5.9 million. A best case scenario is when the target
production level of 20,000 Kg is achieved. The worst and best case scenarios are developed
taking into account loans/credit, salaries, a very low sales price of K2,000/Kg and other personal
costs for the farmer over a period of a year. The project is expected to have more than 100
seasonally employed individuals in a production cycle.

Chipulukusu Vegetable Growers will achieve good results once each farmer produces 20,000
Kg over a period of a year and tomatoes are sold at a basic minimum of K2,000 per kilogram.
Secondly, sustainable production of good quality tomatoes that are supplied timely to clients will
ensure that CVG has a backbone of clients for its products and farmers retain a profit over their
investment.

ABBREVIATIONS AND ACRONYMS

ADCOM Administrative Committee

CVG Chipulukusu Vegetable Growers
ECZ Environmental Council Zambia
IDE
Kg Kilogram
MACO Ministry of Agriculture and Cooperatives
MoPO Most Promising Option
PACRO Patents and Companies Registration Office
UPFS Urban Producers Field School
ROI Return On Investment
USAID MATEP
ZAFFICO Zambia Forestry and Forest Industries
Corperation
ZRA Zambia Revenue Authority

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TABLE OF CONTENTS
EXECUTIVE SUMMARY ________________________________________________________________ 2
Abbreviations and acronyms ___________________________________________________________ 3
Table of Contents ____________________________________________________________________ 4
BUSINESS IDEA ______________________________________________________________________ 5
PROJECT DESCRIPTION ________________________________________________________________ 6
OPERATIONAL PLAN __________________________________________________________________ 6
Production  _______________________________________________________________________ 6
Processing  _______________________________________________________________________ 8
Marketing  ________________________________________________________________________ 9
STAFFING STRUCTURE _______________________________________________________________ 10
CVG Committees ________________________________________________________________ 11
Financial Management  ___________________________________________________________ 11
CVG Records  ___________________________________________________________________ 11
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Product strategy ____________________________________________________________________ 12
Market Analysis  _________________________________________________________________
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Clients for CVG tomato  _________________________________________________________ 12
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Minimum Quality  _______________________________________________________________ 12
Become a Scribd member for full access. Your
Competitiveness _______________________________________________________________ 12
first 30 days are free.
Demand by the potential buyers  _________________________________________________ 12
Production capacity of the Chipulukusu Vegetable Growers   _________________________ 12
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Price _________________________________________________________________________ 13
Production Calendar   ___________________________________________________________ 13
Meeting buyers ________________________________________________________________ 13
Promotion  ____________________________________________________________________ 13
PARTNER STRATEGY _________________________________________________________________ 13
FINANCIAL PLAN ____________________________________________________________________ 15
General Assumptions ____________________________________________________________ 15
 Assumptions for financial statements _______________________________________________ 15
Investment in Capital Items _______________________________________________________ 16
Project Income Statement _________________________________________________________ 18
Ratio Analysis ___________________________________________________________________ 23
Sensitivity Analysis _______________________________________________________________ 24

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