Saturday, 10 December 2016

Greenhouse Setup Cost

Greenhouse Setup Cost and Profit Details Guide


Greenhouse Setup Cost and Profit Details Guide

Cost of Greenhouse Construction and Profits:-What is Greenhouse? Basically greenhouse is a framed structure covered with a transparent material. Greenhouse provides the controlled environment conditions for growing vegetable crops and flower crops. In India, Greenhouse concept is picking up due to controlled cultivation under less area with higher yields compared to open land cultivation. Initial investment cost would be high in greenhouse cultivation. However there is a option for going for loan/subsidy in case of constructing a greenhouse. To reduce the initial cost, one can prefer to go for low cost or low tech greenhouse where simple structure is constructed with local materials like bamboos, wood etc.
In this article, let us take a model for production of Rose cut flowers for export market and domestic market as well along with cost of greenhouse construction.
Following are the main project components involved in greenhouse construction:
  • Procuring land needed. (Selecting a site location is very important, choosing a site near by local market is a good idea)
  • Setting up or constructing the greenhouse (includes material).
  • Procuring planting material.
  • Procuring Irrigation material.
  • Procuring fertilization system.
  • Procuring grading and packing area.
  • Procuring refrigerated van.
  • Procuring office equipment.
  • Procuring Import of technology.
  • Labour charges for setting up all above components.
  • Hiring technical manpower.
  • Procuring Pesticides, Fertilizers and preservatives.
There are 2 types cost components involved in greenhouse cultivation
1) Fixed cost component –>Permanent items cost. For example, land cost, greenhouse construction material /irrigation/other required material.
2) Recurring Cost—-> plantation cost, cultivation, maintenance/labour, storage, packing & transport costs.
Find the detailed rough cost estimate for both cost components:
This below cost chart is for one hectare greenhouse to produce Rose cut flowers.
There are government schemes and subsidies and bank loans are available for setting greenhouse, contact your nearest horticulture/agriculture department for subsidies.
Initial investment by entrepreneur and repayment info:
  • 25% of the total cost of the project has to be invested by the entrepreneur
  • Principal and interest are to be repayable in 7 years with a moratorium for the 1st year on interest and for two years on principal amount.
Fixed cost details are given below.
No.Items involvedAmount in Indian Rupees (lakhs)
1.Land and development cost4.0
2.Green house cost13.0
3.Cold storage  cost 10.0
4.Grading and packing room cost5.0
5.Office area  cost2.5
6.Refrigerated van cost1.0
7.Generator set  cost2.0
8.Fax, telephone, Computer cost1.0
9.Furniture cost0.5
10.Power supply installations cost2
11.Water supply system, drip irrigation and misting liners cost6.0
12.Planting materials and planting cost30.0
Total fixed cost of the green house77 lakhs
Recurring costs details are given below.
No.Items InvolvedAmount in Indian Rupees ( lakhs)
1.Electricity charges / year6.0
2.Manures and fertilizers cost1.0
3.Plant protection cost1.0
4.Preservatives  cost3.0
5.Packing material cost2.0
6.Air freight charges125.0
7.Labour charges3.0
8.Commission / duty/ insurance cost15.0
9.Salaries for employees5.0
10.Overhead costs0.5
11.Maintenance cost1.0
12.Miscellaneous costs4
Total recurring cost in greenhouse cultivation166.5
Total investment for setting up and maintaining the greenhouse project = Fixed cost + Recurring cost = 77 + 166.5 in first year= 243.5 (2 crore 43 lakhs and 50 thousands rupees).
Now let us look into the project yield:-
  • Quantity of rose plants per hectare of greenhouse = 60,000
  • Quantity of rose flowers expected per plant = 100 to 150
  • Quantity of exportable quality rose flowers /plant = 60 to 100
  • Price per rose flower in international market = Rs. 6 to 11
  • Total quantity of exportable flowers per hectare @ 100 flowers /plant = 60 lakhs flowers
  • Gross income through exports @ 50 flowers/plant = 300 lakhs (3 crores) (minimum).
These costs may vary depending on the type of greenhouse construction and current market value of the material.
Types of greenhouses and their costs involved:    
S.No.Type of GreenhouseCost/Sq.mt in Rupees
1Low cost greenhouse without fan and pad.300 to 500
2Medium-tech greenhouse with pad and fan system without automation.800 to 1100
3Hi-tech greenhouse with fully automatic system.2000 to 3500   

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