● the estimated market size for your product or service in tenge or dollars

Presently, Kazakhstan boasts a total of approximately 1200 hectares of greenhouse

farms, with only around 300 hectares equipped with advanced technologies. Research
indicates that Kazakhstan requires an additional 305 hectares of technologically
advanced farms, which could take a span of 10 to 15 years to complete. As a result,
there is an average annual demand for the construction of 20 hectares of such farms.
The anticipated demand for these farms is projected to start at 15,000 square meters
and is expected to increase by 10% each year.

Furthermore, the estimated average price per square meter for a vertical farm is
currently set at 250,000 KZT, with an annual price escalation of 10%. The market size in
KZT has been computed by accounting for potential price increases based on statistics
from the official site of the "Association of Greenhouses of Kazakhstan” and were stated
in the Table 1.

Year 1 Year 2 Year 3 Year 4 Year 5

Farm size 15,000 16,500 18,150 19,965 21,961

demand
m2

Average price 250,000 275,000 302,500 332,750 366,025

per m2
KZT

Total market 3,750,000,000 4,537,500,000 5,490,375,000 6,643,353,750 8,038,275,025

size
KZT
Table 1. The estimated market size for the five years

● the market share you aim to achieve in each of the first five years of operation
(1%).

The initial step entails determining our company's projected total sales or revenue for
each year to ascertain our market share. Subsequently, we can derive the market share
by computing the proportion of our total sales relative to the overall market size which
are already calculated in Table 1, thereby establishing the market share target we aim
to attain over the consecutive five-year period. The ensuing Table 2 presents the
comprehensive calculations projected for the upcoming five years.
 Year 1 Year 2 Year 3 Year 4 Year 5

Total sales 152,200,000 217,646,000 311,233,780 445,064,305 636,441,936

KZT

Market size 3,750,000,000 4,537,500,000 5,490,375,000 6,643,353,750 8,038,275,025

KZT

Market share 4,06 % 4,8% 5,67% 6,7% 7,92%

%
Table 2. The market share of our company for the first five years

СОСТОЯНИЕ РАЗВИТИЯ ТЕПЛИЧНОЙ ОТРАСЛИ В РК. Новости. (n.d.).

https://greenhouses.kz/news/sostoyanie-razvitiya-teplichnoy-otrasli-v-rk

Strategy for Reaching Customers and Achieving Market Share Objectives

The method we want to take for our vertical farming business is customer-centric. We
use partnerships, technology, and targeted marketing to connect with our target markets
and meet our market share goals.
Customer-Centric Approach: We prioritize meeting the various demands of B2B and
B2C clients. We will emphasize the advantages of a consistent supply of locally grown,
pesticide-free produce for B2B clients, including restaurants, food service
establishments, and supermarkets. We aim to position ourselves as valuable partners in
their sustainable sourcing efforts by addressing their eco-friendly values and offering a
year-round supply. For B2C customers, including health-conscious individuals, fitness
enthusiasts, and technology enthusiasts, we will emphasize the high-quality, nutritious,
and fresh produce we offer, aligning with their specific needs and preferences.
Leveraging AI and Mobile Applications: Integrating AI technologies in our vertical
farming system sets us apart from traditional farming methods. We will provide a user-
friendly mobile application free of charge for customers and partnering business
accounts. The app will offer personalized nutrition suggestions for customers,
enhancing their experience and encouraging repeat purchases. For entrepreneurs, the
app will provide insights into product availability, enabling them to make data-driven
decisions for better planning and profitability.
B2B and B2C Marketing: Our marketing efforts will be tailored to target B2B and B2C
customers effectively. Mass advertising on popular social media platforms like
Instagram, TikTok, and Facebook will help us gain public attention and reach a wider
audience. It will include targeted advertising and social media account development to
attract potential customers.
Strategic Partnerships: To build a stable customer base and expand our market
reach, strategic B2B partnerships will play a crucial role. Collaborating with restaurants,
food delivery services, and pharmaceutical companies will provide us with steady
demand for our produce. At the same time, franchising opportunities will attract Farms
of the Future and urban farming enthusiasts, promoting sustainable local food
production.
Emphasizing Social and Environmental Responsibility: We recognize the
significance of sustainability and its importance to socially responsible investors and
eco-conscious consumers. Our marketing messages will highlight our commitment to
reducing food miles, ensuring pesticide-free production, and addressing food security,
aligning with the United Nations' sustainable goals.
Franchising Program: The development of franchising packages and training
programs will be a priority to attract Farms of the Future and urban farming enthusiasts.
Offering ongoing support and technology access will enable successful vertical farm
setups.

Priorities for Action: We will prioritize developing and launching a user-friendly mobile
application based on our strategy. This app will enable us to engage with customers
directly, offer personalized nutrition suggestions, and provide real-time updates on farm
status to business accounts. We will identify and establish strategic partnerships with
key businesses, such as restaurants, food delivery services, and supermarkets, which
will be a priority. These partnerships will ensure consistent demand for our product and
create a stable customer base. We will launch a comprehensive marketing campaign on
social media like Instagram, TikTok, and Facebook, looking at the positive experience of
young and successful ventures in Kazakhstan.
Our vertical farming venture is built on three key assumptions that drive our
strategy and vision for the future:
1. We recognize the risk of a shortage of organic food in the global market due to
potential resource limitations and environmental issues. Vertical farming, with its
resource-efficient approach, offers a solution to address this challenge and
ensure a consistent supply of fresh produce.
2. We assume that people prefer eating organic food as consumers increasingly
prioritize health and environmental consciousness. We aim to meet this growing
demand and cater to health-conscious consumers by providing high-quality,
pesticide-free, locally-grown organic produce.
3. Our strategy is based on practicing reasonable use of present resources for
sustainable development.
Vertical farming's reduced water, land, and energy requirements align with our
commitment to responsible production and consumption, contributing to a healthier
planet. Through these key assumptions, we envision a future where our AI-integrated
vertical farming system mitigates potential risks in the organic food market, satisfies
consumer preferences, and promotes sustainability.

The problem or opportunity you are addressing and the product or service you
aim to develop to resolve this problem or opportunity.
Agriculture is an ever-increasing sector of the world economy. In an attempt to supply
the demand, providers face a multitude of problems. Especially traditional farming has
limitations such as requirement of a large volume of water, limited time of favorable
conditions, prone of plants to diseases, and high dose of pesticides. Our project offers
an innovative solution by providing individuals and businesses with vertical farms. We
aim to initiate agricultural development in Kazakhstan and further succeed in the global
market that aligns with the UN's sustainable goals, specifically targeting Zero Hunger,
Sustainable Economic Growth, and Responsible Production and Consumption.
The overall potential of the vertical farming franchising market remains appealing,
driven by the global demand for efficient and sustainable food production.
The value proposition which will attract customers to use your product or service
(0.5%).
Although the concept of vertical farming is not entirely novel, we offer an innovative
solution to agricultural companies and everyone who supplies or uses plants. We
provide an outstanding customer experience by integrating AI technologies. It includes,
but is not limited to, a mobile application that offers personal recommendations for using
farm-grown food for B2C customers and an excellent way of controlling demand on
specific products and markets for B2B customers; IoT technology that allows for lower
supply-chain expenses and longer equipment life. Our product's primary advantages
include remote control, agro-technological recipes, scheduled service inspection and
maintenance, a delivery app, and a ready marketplace for buyers.

Part B

Figure 1. The NPV values for different discount rates.

The project has a positive NPV at discount rates between 0% and 8%, with the highest
NPV at 0% and decreasing gradually to 8%. The break-even point is between 8% and
10%, and at 10% or higher, the project's NPV becomes negative, indicating lower
expected cash flows. The project is a wise investment below 8% but may not be
feasible above 10%.

Figure 2. The FCF for the initial five years

The project will have an initial expense of ₸28.3 million. In the first year, the cash flow is
negative, equaling ₸97.6 million. It will decrease in years 2 and 3, growing to ₸3.7
million in the three years. And year five will have a significantly larger positive cash flow
of ₸83.2 million. Overall, the project follows a typical cash flow pattern for large
investments.
 Figure 3. The unleered net income

The project will experience losses (89.6 and 72.4 million Tenge) in the first two years
due to operational costs and slow revenue growth. However, by year three, we
anticipate a significant reduction in losses (39.4 million Tenge), with projected profits by
year four (17 million Tenge). By year five, the project is expected to generate a
substantial income of 110.2 million Tenge. The project follows a typical investment path,
with initial losses decreasing over time for a strong long-term return.

Figure 4. The revenue projections for the initial five years

Over the next five years, the revenue projections are predicted to increase steadily. The
revenue projections indicate a very positive trend, beginning at 152.2 million Tenge and
reaching 636.4 million tenge by year 5.