RGI (ASX) RotoGro International (ASX:RGI) signs long-term licence agreement

Originally posted by Surandy70 ↑

What is a big deal?

How about this.

Back when RGI signed the HOA with Freshero it was stated that the growing cycle for one harvest of heads of lettuce would take 18 to 20 days. At 20 days that would equate to 18 harvests per year. Each growing unit could grow 576 heads of lettuce per harvest.

At 624 growing units that would equate to around 7.2 million heads of lettuce per year! Verity state that would equate to 850,000kg per year. Verity also state:

The cultivation area is approximately 66,000ft² (6,131m²), containing 1,872 garden systems, stacked three-high, along with the supporting technology, including automated guided vehicles and their supporting infrastructure. This cultivation area produces approximately 5,463,054 pounds (2,478,000 kilograms) of leafy greens annually.

A month or so ago I searched around and other leafy green vertical farmers thought that growing 900,000kg per year from a 6,500 square metre facility was pretty good.

Also, in terms of the timing with selecting a country and city, don't forget the timeframes mentioned in the announcement were deadlines, not the actual expected timeframe. Verity had this to say about timeframes:

Although we have key milestones for rolling out our first facility, it is our intent to meet these milestones sooner than expected.

I am still hopeful for the Canniberia and CanniFarms deals coming through shortly. This would enable RGI time to produce growing units for Canniberia for delivery early in the new year then to start work on growing units for phase one of the CanniFarms facility and then start producing growing units for Verity's 1st facility.

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The 3 year average Melbourne wholesale price/kg (2017-19) was $2.589. Of course the perfect lettuce from one of these facilities would fetch a premium, and Canadian lettuces are more expensive than those in OZ, but at (say) $3.00/kg, Verity might receive $2,550,000 for the quoted 850,000kg or $7,434,000 for the large facility's annual production.

It would be helpful if someone can make a reasonable estimate of production costs and posts it on this forum; they should probably use the formula: TOAFx2 and hope that the calculations arrive at a positive return on invested capital. If they don't then the list of indoor farming cutbacks that I quoted a few days ago may not be complete.