Due to the growing popularity of western life style, the custom of buying flowers for one's own use is becoming popular, which was hitherto unpopular and this is evident by the fact that internationally floriculture has become a lucrative industry in many countries of the world which encompasses trade in ornamental cut flower, live plants, cut foliage, seeds, bulbs and tubes.

Market status

The global flower market is expanding rapidly in what is now come to be called the global bloom. Cultivating cut flowers has become a widespread activity throughout the world. Statistically, cut flower cultivation is known in 145 countries. At present world wide consumption of floriculture products is estimated around US $ 40 billion out of which nearly US $ 26 billion is contributed by cut flowers alone. Consumption of cut flowers is concentrated in three areas i.e. Western Europe, North America and Japan. Japan is the largest consumers of cut flowers. Both the total consumption of flowers (11 billion guilders in 1990) and per capita consumption (40 units) is high.

Netherlands is the largest exporter of cut flowers (68% of world exports) and pot plants (51% of world exports) and is regarded as a centre for florist products. It is followed by Columbia with 10% share of worlds cut flower exports. Italy is the third largest producer of cut flowers in terms of value.

International supply and demand are confronted with each other at Dutch auctions The prices at which cut flowers are sold at the Dutch auctions are indicative of international price trend for those products. Inspite of the sharp rise in the supply, the average annual prices of the cut flowers bought to auction has remained virtually constant in the last ten years at nominal 36 cents per stem. The average price at Dutch auctions for roses is Rs. 12.20 per stem.

In India commercial floriculture is a recent development in India. Out of the total production of flowers in 34,000 ha., 24,000 ha., is under traditional way of flower cultivation and the rest 10,000 ha under cut flowers, but all of this area is under open cultivation. The leading flower producing states are Tamil Nadu, Karnataka, West Bengal, A.P. and Rajasthan. The total export of Indian floriculture products in 1992-93 is estimated at Rs. 149.1 million of which cut flowers contribute about 11 million.

Manufacturing process

The flowers are to be produced in greenhouses. The greenhouse functions as a device that protects flowers against precipitation, wind and too much radiation. It is also of vital importance for creating a micro-climate around the flowers. The mother plants are planted in green houses after the soil is sterilized. To maintain an optimal nutrient balance in the soil fertilizers and nutrients are applied. It takes about 4 to 6 months for the plants to reach the harvesting stage. The life of the mother plant material is estimated to be 5 years.

Flowers meant for export should be harvested at the bud stage itself. Once the flowers are harvested, they are placed in the cold storage. They are then graded and bundled on length and then packed in pre-cooled boxes.

Plant and Machinery

The major requirements that need to be imported are greenhouses with pad and fan cooling system made with galvanized steel, Chilled store, Climate Computer systems and other miscellaneous equipment for spraying, cutting and packing. These can be sourced from Netherlands. The other equipment that are indigenously available are micro irrigation system including pumps, drugwells and air conditioning equipment.

Raw materials

The major raw material to be used for the cultivation of Roses is the mother plants apart from pesticides and fertilizers. The mother plants can be imported from Holland. In addition to these chemicals, minerals and water would be required. The water requirements has been estimated at 280000 ltrs. (7 litres per sq. metre) per day.

Location and Capacity

The project can be set up in the areas around the twin cities due to moderate climate, availability of experienced people in the field of Horticulture and proximity to the city.

The installed capacity of the rose stems that can be cultivated could be 9 million in an area of 50,000 sq. mts. and the average production could be about 185 stems per square meter.

Cost of project and Working capital requirement

The project is estimated to cost about 102.5 million and it could be sourced through equity of Rs. 62.5 million and debt of Rs. 40 million. The total working capital required for this project is about Rs. 17.5 million of which 7.5 is the margin money requirement.

Cost of production and Profitability

The unit is expected to operate at 70%, 80% and 90% of the installed capacity for the first three years . The roses are priced at Rs. 12 per piece in the export market and Rs. 4 in the domestic market. The sales at full realisation would be Rs. 104 million. The company would break even at about 35% of installed capacity.

Salient features