1st Draf

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

i
 CONTENTS

1.DISCLAIMER 5
6
2. PURPOSE OF THE DOCUMENT
6
3. INTRODUCTION TO SCHEME
4. EXECUTIVE SUMMARY 7
5. BRIEF DESCRIPTION OF PROJECT DESCRIPTION 7
5.1 Critical Factors 7
6. BACKGROUND 8
6.1 Project Profile 8
6.2 Project Brief 8
6.3 Status of Cut Flower Production and Opportunity Rationale in Pakistan 8
6.4 Cut Flower Market in Pakistan 9
6.5 Proposed Timing for Market entry 9
6.6 Proposed Business Legal Status 9
6.7 Proposed product Mix 10
6.8 Production Capacity 10
6.9 Project Investments 10
6.10 Recommended Project Parameters 10
6.11 Suitable Locations/Potential Areas (A*) 10
6.12 Infrastructure Requirement 11
6.13 Key Success Factors 11
6.14 Recommendations and Suggestions 11
6.15 Current Industry Status 12
6.15 (a) International Status of Cut Flower trade: 12
6.15 (b) Pakistani Floriculture Industry: 13
7.MARKET ANALYSIS 14
7.1 Marketing Channels 14
7.2 Producer 14
7.3 Whole Seller Commission Agent 14
7.4 Retail Market 15
7.5 Consumers 15
7.6 Harvesting Packing and Transportation 15
7.7 Pricing Structure 16
8. TECHNICAL ANALYSIS/REQUIREMENTS 16
8.1 Gladiolus 16
8.1 (A) Growing Season 17
8.2 Statice 17
8.2 (A) Growing Season 17

ii
 8.3 Iris 18
8.3 (A) Growing Season 18
8.4 Lily 18
8.4 (A) Growing Season 18
19
8.5 Field Preparation
8.6 Planting 19
8.7 Irrigation 21
8.8 Harvesting 21
8.9 Picking And Packaging 21
8.10 Machinery And Equipment’s 22
8.11 Wind Breaks 22
8.12 Office Equipment’s/Furniture 22
8.13 Irrigation Cost 22
8.14 Human Resource Requirement 22
8.15 Land Requirement/Office 22

9. PROJECT ECONOMICS 23
10. FINANCIAL ANALYSIS 23
11. FINANCIAL STATEMENT 24
12. REVENUE GENERATION 26
12. KEY ASSUMTIONS 26

Table1: Product Mix 10

Table 2: Project Parameters 10

Table 3: Exporters of Cut flowers and flower 13

buds for bouquets, fresh or dried
Table 4: Planting Chart 20

Table 5: Row and Plant Distance 20

Table 6: Other Requirements 21

List of
Table 7: Machinery And Equipment’s 21
Tables Table 8: Other Equipment’s 22

Table 9: Human Resource 22

Table 10: Land and Other Requirements 22

Table 11: Project Economics 23

Table 12 :Financing iii 23

Table 13: Project Cost 24

Table 14: Revenue of the Project 26

iv
 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.

5
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).

6
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.

6. Background:
7
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 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
8
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.

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.

9
 Table1: Product Mix

Average
Price per Stick
Name of Cut Flower seed/bulbs/corms Average yield per acre
(Rs.)
required per acre
Gladiolus 45,000 45,000 stalk 10-25
Iris 48,000 48,000 stalk 10-50
Statice 20,000-28,000 25000 6
Lilies 48,000 48,000 stalk 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:

Table 2: Project Parameters

Maximum Capacity Human Resource Technology/Machinery Location
3 Acres 5 Local As mentioned in A*
Financial Summary
Total Cost IRR NPV Pay Back Period
2.08 million Rupee 93% @ 8 % Rs. 863,224,0.47 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.
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.
10
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.
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:

11
 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.

12
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 3,054,422 3,116,423 3,332,531 3,944,605

Colombia '682,283 703,441 906,320 967,037 1,114,884
'Ecuador 295,223 342,230 370,251 435,834 403,028

Kenya 176,014 231,890 226,310 271,583 313,412

USA 52,036 39,418 41,643 45,837 73,095

Zimbabwe '16,870 33,658 30,344 33,398

'Pakistan 158 171 195 287 218

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
over the past decade and this increase is expected to continue. Demand for cut flowers is
13
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.
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
14
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.

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
15
demand, short-term price fluctuations occur frequently at the auctions. Some of the factors
influencing producer prices are:

o Shape
o Color of flower
o Fragrance
o Variety
o Size and Stage of opening of buds
o Color and quantity of leaf
o Packaging
o Overall appearances
o Vase life

8. TECHNICAL ANALYSIS/REQUIREMENTS

This report includes pre-feasibility of following cut

flowers that may be considered for the production.

1) Gladiolus
2) Statice
3) Iris
4) 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.

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.
16
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 well-
drained 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 October-
November 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
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
17
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 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:

18
 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

Table 4: Planting Chart

Month Gladiolus Statice Iris Lily

Sept Corms Seed sowing ----- ----

Seed
sowing/Nurser
Oct Corms y Bulbs sowing Bulbs sowing
transplantation
after 15 Oct
19
 Nov corms --- Bulbs sowing Bulb sowing
Dec Corms --- --- Bulb sowing
+ harvesting 3
months
Jan Harvesting + 3 Harvesting + Harvesting +
months 2.5 months months
Feb Harvesting Harvest Harvesting + 3 Harvesting
months
Mar Harvesting Harvest 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

Gladiolus Iris Statice Lily

Plant to Plant distance 6’’-9’’ 6”- 8’’ 12”-15” 6”-8”
Row to Row Distance 12’’-18’’ 12’’ 15’’-18’’ 12’’
Plant per acre 40,000-50,000 40,000-56,000 20,000-28,000 40,000-56000
O

Table 6: Other Requirements

Gladiolus Iris Statice Lily

Water Weekly Weekly Weekly Weekly

Requirements Sunlight Sunlight Sunlight Sunlight

Price per seeds/bulb Rs-7/- Rs-20/- Rs-3/- Rs-50/-
Fertilizer
Rs-21,000/-
Farm yard manure)
Fertilizer pesticides Rs-7000/
Foliar Spray Rs-1500-2000/-

20
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.

8.10 Machinery and Equipment’s:

The equipment’s/Tools that are required are as follows:
Table 7: Machinery and Equipment’s
Items Cost Rs
Cutters/Shovels/Carts 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
21
 Items Cost Rs
Furniture 30,000/-
Stationery/Office Equipment’s 20,000/-
Total 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 No Monthly salary Yearly salary
Supervisor 1 12,000 144,000
Farm worker (Mali) 1 10,000 120,000/-
Farm worker (Labour) 3 6500 19,500/-

8.15 Land Requirement/Office:

Table 10: land and other Requirements
Description Quantity Rent/month/year*
Land 3 acre 5000-35000*
Office/store 1 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) 93%
Benefit Cost Ratio (BCR) 2.13
Pay Back Period (yrs) 1.08
Net Present Value (NPV) @ 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%) 208,175

Bank Loan (90%) 22 1,873,575
Markup per annum 8%
Tenure of the Loan (Years) 08
Grace Period (Years) 1
 Table 13: Project Cost

Project Cost
Description Unit/Cost (Rs)
Area 3 acre
Capital Cost/Fixed Assets
Machinery and Equipment’s 25000
Stationery /Office Equipment’s 20000
Building Infrastructure 40,000
Bulbs (Gladiolus + Iris) 709,000
Furniture 30,000
824,000
Variable Cost
Land Rent 60, 000
Seeds/Bulbs (Lily + Statice) 672000
Land preparation charges 6000
Irrigation charges 22750
23
Fertilizer charges 21000
Pesticide cost 7000
Foliar spray 2000
Human resource charges 283,000
Transportation Charges 20,000
Office/Store rent 144000
Miscellaneous 20000
1257750
Total Cost 2,081,750

24
 11. FINANCIAL STATEMENT
Infrastructur Income
Investmen Variable Total Cash PV Discount
Years e Oper. & Total Cost Instalments afer PV Cost
t Cost Benefits flow Benefit Factor
Maint. Instalment
0 2081750 2081750 0 -2081750
1 17250 1257750 1275000 3191250 1916250 149886 1766364 1275000 3191250 1
3102604.
2 18113 1383525 1401637.5 3350813 1949175 359862 1589313 1297812.5 2 0.926
3016420.
3 19018 1521878 1540895.6 3518353 1977458 359862 1617595 1321069.6 7 0.857
2932631.
4 19969 1674065 1694034.3 3694271 2000237 359862 1640374 1344779 3 0.794
2851169.
5 20967 1841472 1862439.3 3878984 2016545 359862 1656683 1368948.5 3 0.735
2771970.
6 22016 2025619 2047634.8 4072934 2025299 359862 1665437 1393585.8 1 0.681
7 23117 2228181 2251297.5 4276580 2025283 359862 1665421 1418699.3 2694971 0.630
2620110.
8 24272 2450999 2475271.4 4490409 2015138 359862 1655276 1444297.1 7 0.583
10864192 23181127

25
 12. REVENUE GENERATION

Table 13 Revenue of the Project

Average Sales First Time

Area Actual
Product Spikes/acre Price Revenue
(acre) Production
(Rs./Unit) (Rs)
Gladiolus 45000/acre 1.5 67500 Spikes 17.5 118,1250
Lilly 12000 0.25 48000 Spikes 125 150,000,0
Iris 12000 0.25 48000 spikes 30 360,000
Statice 25000 1 2500 6 150,000
Total Revenue Rs. 319,125,0

12. KEY ASSUMPTIONS

Description
Interest Rate 8%
Loan Tenure 8 Years
Grace Period 1 Years
Debt Equity Ratio 90:10
Sale Price Growth Rate 5%
Repair and Maintenance Rate 5%
Prepaid Rent Period 1 Year
Increase in Staff Salaries 10%
Increase in Office Expense 10%
Increase in Input Price 10%

26