Investment

Commercial greenhouse projects can be very attractive investment propositions. The first step is identifying and establishing whether there are market demands and a price point for a particular vegetable, fruit, herb, flower or medicinal crop. From there we can design a solution tailored to your investment goals to achieve the desired ROI.

Why Greenhouses?

Choosing a builder

Considerations

Why Greenhouses?

Greenhouses provide better growing conditions for crop types. The more you control climate, inputs and labour, the better the result. To justify the business case, an increasing number of high-tech greenhouses are being built suited to high-value crops. Increasing input costs will push more “non-traditional” crop types towards controlled-environment, greenhouse growing.

Weather patterns are changing and supermarkets and consumers are less tolerant to supply changes because of extreme weather events, wanting fruit and vegetables year-round, regardless of seasonality. Greenhouses are a hedge against non-seasonal weather anomalies and serve more markets.

Input costs are increasing. Water is used five times more efficiently per kilo of crop produced in a hydroponic greenhouse system. Any water not taken up by the crop (drain water) is captured, stored, treated and reused – creating a circular recycling system.

Energy is becoming increasingly expensive in farming. In a greenhouse environment we can monitor and control energy used and install energy-efficient solutions such as biomass and solar, to guarantee greater ROIs than traditional fossil fuel installations.

Low unemployment impacts regional communities and productivity pressures are growing. People no longer want to bend down in the mud to harvest produce in the elements. Climate-controlled greenhouses with produce harvested at waist height offer a viable solution.

Choosing a builder

When building a greenhouse, avoid cheap contractors as they will often cut corners in other areas, where Apex Greenhouses will never compromise. Look for these contractor characteristics:

Licensed – are they licensed in your state?
Compliance – are their machines compliant to AS/NZS 1418.10? Are their staff qualified with white cards, EWP tickets, telehandler or other tickets?
Track record – what is the level of experience and completed projects where you’re looking to build? Do they have trusted testimonials?

Apex Greenhouses has more than 40 years of experience in New Zealand markets and more than 25 years in Australia. We welcome competition as it pushes us to innovate as we custom-build and improve how we work. We are proud to provide full-time work for local staff and ensure our skilled team is paid above industry-average salaries.

We will not compromise on safety or quality, whether our builds are large scale or boutique.

Do your homework – a “cheap price” often comes with unintended consequences. Carry out your due diligence and ask potential builders as many questions about your project as possible.

Considerations

There are many points to consider when looking to invest in a greenhouse business:

Crop and market – what crop are you looking to produce? Who will you sell it to, is there a market, and what’s your price point? These answers can help you develop a business case, particularly if external investors need briefings.
Location – where are you going to build? How far will it be from markets or distribution centres? How much land is available? Is the land flat? What is the area’s historical climate? Is the location within a high wind, rainfall, floodplain or cyclonic region? Is there room for expansion?
Resources – does the land have access to natural gas and enough electricity? Does the project warrant investment into alternative energy sources and electricity production (which might require high capital expenditure but good ROI). Is water available and good quality? Is there enough local labour or can your greenhouse sustain foreign visa holders (including nearby housing for migrant workers … if not, will you need to factor in building or supplying worker housing?).
Management Team – despite the emergence of AI climate algorithms and highly-automated growing systems, greenhouses are not “plug and play, set and forget” systems that will push out produce without oversight. A successful greenhouse needs an experienced grower, ideally from a high-tech greenhouse with climate computers and growing systems, irrigation recipes and able to manage labour. These growers can be difficult to find locally. Enticing grower managers from North America or Europe often requires a very high salary. It can be challenging to develop a local grower and send them overseas for training with trusted partners. Developing local staff who can manage crops is often the most successful model.

Global Perspectives

Global trends are pushing us naturally towards more controlled environment agriculture (CEA) facilities – such as greenhouses – as we face climate change, unexpected weather events, labour shortages, rising input costs and the need to grow more produce for larger markets as the population grows.

By 2050 the world population is forecast to grow to 10 billion people. Record numbers of people are being lifted out of poverty resulting in demands for a higher volume and quality of food, particularly in South East Asia. This will call for a 60 per cent increase in supply from current levels – which traditional farming along will struggle to keep pace with.

According to international analysts Maximize Market Research, the Controlled Environment Agriculture Market (CEAM) was valued at US$81.74 billion in 2022 and is estimated to reach a value of US$157.28bn in 2029. The Global CEAM size is estimated to increate at a compound annual growth rate of 9.8 per cent over the forecast period.

A major problem faced in the agriculture sector is the rapid loss of arable and fertile agricultural land. Each year, around four million hectares of land becomes unusable due to erosion and degradation of soil. More than five million hectares are lost due to the conversion of land for commercial purposes such as for the construction of highways, factories, housing societies, residential areas, and other urban needs. As land is rendered unusable, it becomes increasingly difficult for farmers to sustain or produce sufficient yields to feed the growing population.