Hydroponics: Concept and Scope
The South African population continues to expand rapidly. We are experiencing the increasing challenges of unemployment, poverty, a lack of skills, and poor nutrition. This project can supply nutritious food vital to a healthy population and can drive inclusive economic growth in our beautiful town, while improving food security and creating opportunities for locals.
The sole and simple objective of this project is to establish an intensive farm producing high-quality produce for both local and regional markets all year round. Through the responsible set-up and management of a hydroponic growing facility, we aim to create highly nutritious and tasty fresh vegetables which will, in turn, offer stable job opportunities, alleviate poverty. and providing skills—including leadership experience—for local men and women. This project will also provide education, experience, and research in the fields of hydroponics and aquaponics.
We hope to engage huge numbers of unemployed youth in workshops; teaching the values of honest work and ethical food production.
- Highly efficient vegetable production
- Efficient use and re-use of our most valuable resource: Water
- No commercial projects on this scale in greater Knysna
- Intensive training of staff in hydroponics and related farming practises
- A high and continuous demand for organic, fresh produce (perpetual market)
Ownership and Start-up Capital
The project will be initiated and 50% owned by Sonwabo Mani, with the balance of shares allocated to workers and project managers. This project needs investment for the purpose of financing the acquisition of vegetable farm, facilities, modifications, equipment, and funding expenses, including fixed assets. The start-up period is three months and includes construction of the tunnel and the initial planting:
- 1 x 1,000-metre tunnel enclosing vegetables area
- Irrigation, fertilisation, temperature control, and water treatment devices
- Pack house and wash bay facilities
- Business office building or pre-fabricated facility
Start up requirements and expenses
- Storage and office buildings R 130,000
- Seedlings R 50,000
- Gravel and sawdust R 40,000
- Electricity costs (R 1,500) monthly R 18,000
- Plant bags R 6,000
- Twine, fittings and clips R 4,000
- Tunnel erection, 3 x 5,000-litre tanks and irrigation R 280,000
- Packaging and wash-bay facilities R 40,000
- Initial labour costs and training R 80,000
Total start-up expenses (Ex-labour) R 568,000
Cash required R 648,000
Hydroponics: the Product
What are Hydroponics and Aquaponics?
Hydroponics is a method of growing plants, without soil, in a temperature-controlled environment using mineral-nutrient solutions in water. Terrestrial plants may be grown with their roots in the solution only or in an inert medium, such as gravel.
Aquaponics is the addition of edible or non-edible fish to the system to create nutrition fish waste for the plants.The advantages of growing in technology-controlled tunnels are:
- Faster growth
- Substantial water saving and re-use
- High-quality produce
- Produce greater yields per plant
- Longer productive season
- Less risk (weather and pest damage)
The project will produce hydroponically grown lettuce, spinach, tomatoes, and a selection of herbs like watercress, rocket, and basil.
Research and Development
The project managers will work with commercial hydroponic vegetable producers and universities to develop the skills and experience to successfully run a hydroponic production facility. We will also work with ARC. Together with our stakeholders and local and regional experts, we are confident we can be the best producers in this field—sourcing quality seedlings and producing flavoursome, large and firm vegetables all year round.
This project will be able to supply major retailers such as Fruit & Veg City, Checkers, Pick n Pay and Spar, especially since these retailers have to consider local sources due to shelf-life and cost of transport. We will also engage with various Farmers Markets (nine of them locally). At present, we have interest from several companies in hydroponic produce.
The hydroponics and aquaponics industries are still relatively new in the South African marketplace and large production facilities are not widespread. Because Hydroponics is an intensive-farming practice, which uses less land, it can therefore be much closer to markets than traditional farms (normally a fair distance from retailers).
There is no shortage of demand for high quality, organically grown produce. This produce is considered a premium item, and should be sold retail outlets to fetch an appropriate price. The project will also help retailers with reliable and consistent supply as the project will be able to
Competition and Buying Patterns
The major advantage of hydroponics is the capability to produce vegetables all year round, in large
quantities. The controlled environment allows growers to prolong, and even ignore, traditional
‘productive seasons’ which is a major positive factor for consistent availability.
Strategy and Roll-out
Strategy and Implementation
The primary project strategy is to profitably and efficiently utilise present and future agricultural technology in the production of vegetables. This will be done by developing a profitable hydroponic vegetable farm with all the necessary custom and innovative equipment. Our use of existing horticultural technology in the production of vegetables together with growing hydroponic technology (such as mineralised water, temperature control, pest control) will produce more vegetables of a better quality with less water and space, and fewer overheads. This strategy gives our project a significant industry advantage over traditional farming methods.
The project will:
- Finalise the plan
- Secure the land required for stage 1 (with scope for expansion)
- Develop the infrastructure and begin planting
- Complete first growth cycles and sell vegetables for profit
- Participate effectively in the economy of greater Knysna
- Up-skill workers and engage with youth for training in hydroponics
- Build or buy a packaging shed and office
Hydroponics can offer the following competitive benefits:
- Efficient production
- Healthy and tasty produce
- Little or no local competition
- Relative small footprint required
- Short distance to markets
- Ease of expansion
- Competitive price
- Year-round availability of most produce
Marketing and Growth Prospects
This project will market and sell its products to the selected outlets aggressively, focusing at first on local markets and then regional market. The project will emphasise the reliable year-round output of our climate controlled hydroponics facilities, as well as the ability to produce even non-native foods in sufficient quantities to satisfy
Marketing will take place with direct contact between project managers and retail managers. We will also develop our own in-house brand with the assistance of a local creative and use local companies to produce and maintain a website (and possibly grow this into an online shop), social media platforms, pamphlets and local newspaper ads. We also believe a project of this nature will have a strong word-of-mouth marketing potential.
- Our products will be sold mainly through wholesale marketing
- A selection of products will be sold at local farmers markets
- We envisage creating our own brand for sale at these farmers markets
- A part of our sales strategy is to incorporate education material to show the health and cost benefits of buying our products
- We will be able to react quickly to changing needs and demand, and therefore remain consistent in the eyes of the retailer
- At all times we will maintain, in order of priority, the following:
- Quality (i.e. taste and health)
- Consistency (ability to supply)
Below is a financial forecast for year one: R 640,853
Less cost of sales: R 104,000
Gross profit: R 536,853
Less expenses: R 460,000
Advertising and promotions: R 24,000
Bank charges: R 6,000
Cleaning consumables: R 4,000
Computer expenses: R 16,000
Depreciation: R 25,000
Electricity and water: R 22,000
Printing and stationery: R 4,000
Salaries and wages (1 manager, 1 adminstrator, and 4 workers): R 323,000
Telephone, Internet and fax: R 12,000
Transport R 24,000
Net profit/(Loss) before tax: R 76,853
Sales—Tomatoes (14,000kg) R 9.70/kg Wholesale* (4 crops/year) R 135,800
Sales—Spinach (11,000 kg) R 13.05/kg Wholesale* (continuous) R 143,550
Sales—Lettuce (10,320 kg) R 28.26/kg Wholesale* (continuous) R 291,643
Sales—Mixed Herbs (1,996 kg) R 35.00/kg (continuous) R 69,860
Total sales: R 640,853
COS—Tomatoes: R 26,000
COS—Spinach: R 22,000
COS—Lettuce: R 40,000
COS—Mixed Herbs R 16,000
Total Cost of Sales: R 104,000
*Average Price Quote by Joburg Market Wholesalers
Crops per year: 8 (minimum)
Crops per year: Continuous (every two weeks per metre) 20m
We will, where possible, engage with government organisations such as the Department of Trade and Industry and Department of Agriculture for training and up-skilling of management.
We have undertakings from various private sector individuals and companies who have pledged support for the project and who will assist and little or no cost in the formation of the company. This will greatly help avoid additional start-up costs.
We will invite both National and International Volunteer Organisations for gap-year hands on work experience—the benefit of which will be positive public relations as well as free semi-skilled labour.
Growing into the Future
Once the production is stabilised and the system matures, we are able to enhance the offering with other produce, and create small-run growth projects for specialised markets. These could include:
Introduction of new plants for specialised markets
Additional tunnels can easily be added to include production of high-value flowers, specialised ‘heirloom’ plant varieties (such as Brandywine OTV Tomatoes or Evergreen Corn) and mixed herbs.
Expansion into Aquaponics
With little adjustment to the proposed facility we would be able to include edible fish into the system. These could include tilapia (O. Mozambicus), carp and even fresh water crustaceans such as marron or crab (both high value sources of protein). An added bonus is that living fish and crustaceans add valuable minerals to the system, lessening the buy-in of artificial fertilisers.
We see the opportunity to train up both our local unemployed youth to prepare them for small scale hydroponics, and in turn create both employment as well as an additional production facility for the project. We may also engage with learners from educational institution who pay for courses with us.
Additional products could include a training manual, micro hydroponics systems for home or hobby use, fresh fish (if aquaponics is installed) branded items such as caps and T-shirts, and even ornamental fish like koi or goldfish. The possibilities of growth are literally endless.
Blogpost and picture submitted by Sonwabo “Soli” Mali (Republic of South Africa): sollymani724[at]gmail.com
The content, structure and grammar are at the discretion of the author only.
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