Can Iceland Reach its Self-Sufficiency of Leafy-Vegetables Production 20140822.pdf

Can Iceland Reach Self-Sufficiency of Its Leafy-Vegetables Production and Even Export Them to Nordic Europe Continent?

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Can Iceland Reach Its Self-Sufficiency of

Leafy-Vegetables Production and Even Export

Them to Nordic Europe Continent?

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August 22, 2014

Author: Dr. Allen Lang, Peter Teng

SpeedyGreen, Inc.

Telephone+86-186-5526-9911

[email protected]


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Iceland is an island country of Nordic Europe, and is located near North Pole. With its high

latitude, cold temperature and uneven sunlight hours, Iceland cannot produce large amount of

vegetables to meets countrys demands for its local population of 330,000. Iceland relies 2/3 of its

total vegetables consumptions on foreign-air-shipped imports. And among the total imported

vegetables, leafy-vegetables occupied even higher percentage. And this drives its local market price

of leafy-vegetables extremely high. One head of lettuce is sold more than $3 retail-price on its local

market. The nearby island of Greenland, with a population of 56,000, the situation is even worse and

a head of lettuce is sold more than $5 USD on its local market. And the 4 other Nordic Europe

countries (Denmark, Finland, Sweden and Norway) on the continent side have similar conditions

with high market price on leafy-vegetables. The market price of one head of lettuce is sold between

$2.1 and $2.8 there. All 5 Nordic Europe countries plus island of Greenland (with total

vegetables-consuming population of 25 million) are suffering with high-price, non-fresh imported

leafy-vegetables. The total market size of leafy-vegetables is estimated at 600,000 tons a year, or a

value total of 3-5 billion USD a year.


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Can Iceland start a new farming industry to be self-sufficient in producing leafy-vegetables to

supply to its local market and the market of Greenland? If succeeded, it would mean a cut in annual

importing trade expenses of 74 million USD a year for Iceland, and created annual exporting trade

income of 12.6 million USD by exporting the produced leafy-vegetables to nearby Greenland. Also,

the side benefit is the creation of local employment of 960 jobs. We shall provide a realistic

approach and its proofing statistics of reaching this goal in latter part of this article.

Can Iceland increase its production capability of this farming industry further to include part or

all of the other 4 Nordic Europe Continent countries in its market of leafy-vegetables? If succeeded,

it would mean creating annual exporting trade income of 1.1 to 4.5 billion USD plus the creation of

local employment of 12000 to 64,000 jobs per year. We shall provide possible progressive approach

for this goal also in latter part of this article.

Iceland is very rich in hydroelectric power and geothermal energy. This makes Iceland quite

unique and different from 4 other Nordic Europe countries. For its richness in hydroelectric power, its

cost of electricity is very low-priced (only 1/5 priced comparing to the 4 other Nordic Europe

countries on the continent: Norway, Denmark, Finland and Sweden). In addition to hydroelectric

power, Iceland is also rich in geothermal energy. With these two unique energy sources, Iceland has

developed a special way of farming called HotHouse Farming. The glass greenhouse is heated by

geothermal energy to overcome the year-round low temperature, providing perfect vegetables

growing temperature of 25-30 year-round. Also, artificial lighting is used to supplement the

shorter daylight hours during winter time. Inside these HotHouses, tomatoes, cucumbers, and green

peppers can be produced. However, the HotHouse Farming in Iceland is still not efficient and

cost-effective enough to become an industry to supply the vegetables market we mentioned.

What is the reason that HotHouse Farming of Iceland cant become such an industry to supply

vegetables to Nordic Europe? We provide the following reasons:

It still utilizes a glass GreenHouse, not a sealed industrial workshop: Glass GreenHouse is


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only a semi-controlled environment designed to utilize natural sunlight for

vegetables-growing. It obtained the purpose of attracting sunlight, but sacrificed with poor

insulation of temperature as well as the controllability on other vegetables-growing

environments. When artificial lighting and geothermal heating are applied, then, a

completely-sealed industrial workshop will be more suitable for complete-controlled

environment and with better insulation. Such an industrial workshop is more easy to build

and with much lower-cost comparing to the Glass GreenHouse.

It does not utilize Vertical Farming: Vertical Farming utilizes 3-dimensional structure to

house more growing units (movable seedbeds), i.e., to provide more growing area for

mass-production of vegetables. This way of building the vegetables growing space can cut

down the cost of environment-controlled-equipment as well as its operational cost.

It does not separate the growing space from working space: a complete streamline-style

industrial mass-production requires that we separate the growing space from the working

space. Workers stays in the working space to handle all processes and vegetables stays

inside the growing space where vegetables illumination and irrigation are performed. This

makes mass-production of vegetables possible and can save labor cost and

process-handling time.

It does not utilize Automated-Moving-Seedbeds-System: once the growing space goes

vertical, we need automated system to move growing units (seedbeds) in and out of the

growing space to working space. Workers stay and work only in the working area, and let

the automated system to handle the transfer the growing units (Seedbeds) in and out of the

growing space to working area. This will cut down the total labor cost as well as making the

production highly efficient and easy to manage. Also, this automated system makes

Multi-Stage-Transplanting-Method possible, therefore, increases vegetables production

quantity drastically.

It does not utilize highly-efficient Multi-Stage-Transplanting-Method which can increase

the production by 250%: HotHouse Farming still grows vegetables in a traditional way: a

space is reserved for one vegetable to grow from seed to full-grown vegetable. Growing

area is wasted and only a limited number of vegetables can be grown. On the contrast, the

Multi-Stage-Transplanting-Method utilizes multiple areas, each area designated to grow

vegetables with different density that fits their size of that growing stage. One small area

can grow large numbers of sprouts with high density while they are in initial growing stage,

and another larger area can grow same amount of sprouts with lower density when they

become bigger. Therefore, utilizing this method, with the same growing area, 2.5 times of

vegetables can be produced. However, this method requires transplanting to relocate the


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sprouts at end of one stage to another area for new stage growing. This type of

transplanting cannot be easily performed on traditional land-type of growing and only can

be easily executed using the Automated-Moving-Seedbed-System.

The cost of vegetables production is too high to obtain profitability. Without profitability, the

HotHouse Farming cannot reach to a commercial scale and forms such an industry of

vegetables production in Iceland.

Overall summary, such HotHouse Farming does not offer mass-production and is not

cost-effect to generate profitability. So, what Iceland really needs, is mass-production-type and

efficiently-designed Hydroponic Vertical Farming Factories of leafy-vegetables that can offer

mass-production and cost-effectiveness to obtain profitability. With Icelands advantages in

geothermal energy and hydroelectric power, such factories can mass-produce leafy-vegetables with

low-cost. Vegetables produced can be sold to the local market and Greenland with high profitability,

and also possibly be exported to the 4 other Nordic Europe countries. A new and

environmentally-friendly leafy-vegetables farming industry, then, can be started in Iceland.

What is the mass-production-type and efficiently-designed Hydroponic Vertical Farming Factory

of leaf-vegetables needed by Iceland? The answer apparently is a factory that overcomes the

deficiency of the HotHouse Farming we mentioned above, and be able to mass-produce

leafy-vegetables with low-cost to make profits on its operation.

Following graph shows a well-designed hydroponic vertical farming factory

of leafy-vegetables, when its demanding requirements are met, can turn

vegetables Seeds into Gold.

A magic to turn seeds into gold


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Hydroponic Vertical Farming, in recent years, causes a lot of confusions for investors in this

field. Due to that multiple technologies are involved with high complexity in its design, many

hydroponic vertical farming factories with different approaches are introduced and experimented.

Some are very good for demonstration of this technology, but not practically-designed to meet

mass-production requirements. Some can handle mass-production of vegetables, but fail to make

profitability on its operation. To perform the magic we mentioned, we need a properly-designed

hydroponic vertical farming factory that make sense and is efficient enough to generate profitability.

Author-designed hydroponic vertical farming factory of leafy-vegetables, we believed its

operation can be profitable when it is built and operated in Iceland. Let us analyze the requirements

of the hydroponic farming factory that can generate profitability in Iceland (for easy of explanation,

let us use lettuce production as the production type):

1. It has to perform mass-production of leafy-vegetables: author-designed 1530 factory,

can produce at least 1 million heads of lettuce a year. Without this kind of mass-production

capability, reaching Icelands self-sufficiency seems impossible. A same-size factory that

can produce less than 10% of this quantity of vegetables will not be cost-effective to

generate profitability as well as meeting the markets demand on vegetables quantity.

2. Its source of energy required has to be what Iceland can offer: Since Iceland can provide

low-cost electricity, this factory should be designed to only draw on electricity, not on other

resources which Iceland cannot provide. A factory that demands large amount of fresh

water, land and high-skilled labor which Iceland cannot offer is not qualified.

Author-designed factory relies heavily on the drawing of large amount of electricity but

demands very little on other sources. This is quite matched with Icelands reality.

3. It should utilize Hydroponic Vertical Farming: Vertical Farming saves land-usage and

makes control of the environment easier and more cost-effective. Profitability of the

factorys operation relies on these savings. Author-designed 1530 factory provides

3-layer-structure on its working space, forming the storage of total of 273 seedbeds (4.3M

X 1.72M) with accumulated growing space area over 2100 . This type of Hydroponic

Vertical Farming factory is what Iceland really needs.

4. It should be designed with Automated-Moving- Seedbeds- System: once we go with

Vertical Farming, the multi-layer vegetables growing space structure prohibited

human-handling of any production processes. We need an automated system to transfer

the growing units (seedbeds) to a working space area for handling and processing.


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Author-designed factory is designed with such an automated system with streamline-style

production line operation.

5. It should utilize Multi-Stage-Transplanting-Method: traditional land-growing-method

designates a fixed fully-grown-vegetable-size area for growing vegetable from seed to

harvestable-stage. While Multi-Stage-Transplanting-Method designates different areas to

grow sprouts arranged in different density to optimize the usage of growing area. And

transplanting of sprouts from high density area to lower density area is performed at end of

each growing stage cycle. Mathematic calculation proves that this method can grow 2.5

times more vegetables than the traditional method. However, due to the large of

transplanting action of sprouts from stage to stage is needed, this method can only be

easily implemented on Vertical Farming Factory with Automated-Moving- Seedbeds-

System. Instead of performing transplanting during each end of stage time, Vertical

Farming Factory with automated moving seedbed system averages out all the

transplanting work on a daily processing basis. With Vertical Farmings increasing

production quantity efficiency by the number of layers in the vertical structure, and the

Multi-Stage-Transplanting-Method increasing production quantity efficiency by 250%, the

total combined production quantity efficiency can reach 6-10 times verses the traditional

growing method on a non-vertical farming way. That is why author-designed 1530

factory can produce more than 1 million heads of lettuces a year.

6. It should utilize industrial streamline-style production: The traditional agriculture-style

production is a style that farm workers roaming around the whole growing space area

performing production-related work. This is wasteful as well as non-effective. The industrial

streamline-style utilizes production line setup for workers to stay at the side of it and

perform the necessary handling and processing. Therefore, author-designed hydroponic

vertical farming factory of leafy-vegetables is designed with separated growing space and

working space. Plus the Automated-Moving- Seedbeds- System is designed to allow farm

works to stay on the side of the production line in the working space and the robotic

vehicles are used to transfer the need-to-be-processed seedbeds to the production line.

This set-up increases the production efficiency and cuts down the wastes in labor and cost

as well.

7. It should be installed inside a sealed industrial workshop building: glass greenhouse is not

well-insulated which increases the heating cost in the case of Icelands cold winter

temperature. Also, glass greenhouse costs more to build than the simple industrial

workshop building. All of these contribute to saving of costs, therefore, increasing of

profitability. Author-designed factory utilizes industrial workshop building, not glass


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greenhouses for saving costs as well as the total controllability of vegetables growing

environment.

8. It should utilize automated recycling-irrigation system: water-saving is important in place

like Iceland. Author-designed factory is installed with such a computer-controlled recycling

irrigation system.

9. It should utilize automated LED illumination system: Iceland can provide low-cost electricity

and this will not be a major expense for our factorys operation. Author-designed factory is

installed with such a computer-controlled LED illumination system.

10. It has to generate profitability on its operation in Iceland: For any hydroponic factory that

requires governmental subsides to operate is not qualified to help Iceland reaching its

self-sufficiency of leafy-vegetables production. Author-designed factory built and operated

in Iceland can produce annual ROI of more than 40%. The Profit & Lose Statement is

provided at the latter part of this article.

So, Iceland has a unique opportunity: to build and operate our highly-efficient and

mass-production-type factories in Iceland, enjoying the low cost of electricity, and produce large

quantity of fresh leafy-vegetables to its local market.

Analysis of Icelands capability to meet the profitability requirements on

building and operating an author-designed hydroponic vertical farming

factory of leafy-vegetables:

First, we analyze on the cost of electricity. Hydroponic Vertical Framing Factory of

leafy-vegetables requires large consumption of electricity. For author-designed 1530 factory, it

consumes 1.25 million KWH for LED illumination a year, and 0.75 million KWH for building heating

or cooling cost for maintaining consistent temperature of 25-30C year-round. Total consumption of

electricity can reach 2 million KWH a year when heating/cooling of the workshop space is needed.

For comparison, we look at different places on the world for their cost of electricity (assumed that all

LED illumination & heating is all done by electricity), and the total cost of electricity of our factory

operating there:

Cost of Electricity Electricity Cost Operating Our Factory

Qatar $0.014/KWH $28,000/per year(cooling required)

Bahrain $0.028/KWH $56,000/per year(cooling required)


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China $0.100/KWH $200,000/per year(cooling required)

USA $0.075/KWH $150,000/per year(cooling required)

Japan $0.230/KWH $460,000/per year(cooling required)

Iceland $0.080/KWH $100,000/per year(No heating/Cooling)

Nordic Europe

continent Countries

$0.400/KWH $500,000/per year(no heating/cooling)

(Note: $0.080 per KWH is the price of the residential rate in Iceland. We may obtain discount

industrial rate, possibly 1/2 of the residential rate, if we build and operate 10 factories simultaneously

to meet the 10 million KWH per year minimum requirement)

From the above chart we found that, Icelands electricity cost, although not the cheapest among

world countries, is still in reasonable range. This is due to that Iceland has rich resource in

hydroelectric power. The richness of hydroelectric power in Iceland drives its cost of electricity

reasonably low. The total cost of electricity of operating our factory is $100,000 a year. Cooling is not

required due to that Iceland is near North Pole with year-around cold temperature and large number

of LED tubs are used in artificial illumination which generate enough heating in the workshop

building.

If the cost of total consumption of electricity is reasonable, then the profitability of the

author-designed factory depends on the Income side of the balance sheet, i.e., the wholesale price

of the vegetables produced. The wholesale price is used to calculate the total income of its

operation, and it, in terms, depends on the retail-price of the vegetables on local market.

Following chart shows the market retail-price of one head of 200g lettuce from different locations on

the globe (information from website NUMBEO.COM under Cost of Living Lettuce per Head):

For one head of lettuce (200g) Market Retail-Price

China $0.75

Qatar $1.60 $1.80

Bahrain $1.70 - $1.90


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USA $1.00 - $2.00

Japan $1.80 - $2.80

Iceland (population 330,000) $2.90

Greenland (population: 56,000) $5.68

Norway (population 4.9 million) $2.80

Denmark, Finland & Sweden (population of 21 million) $2.12

Author-designed hydroponic leafy-vegetable factory can produce high profitability for local

farmers in Iceland because the market prices of local market and the market of Greenland are very

high. We can assume that one head of lettuce produced by our factory can be sold with

wholesale-price of $1.8 USD in Iceland and Greenland to sustain the competition of the market.

Our standard 1530 factory can produce roughly 1 million heads of lettuce per year (200g

Lettuce production is used as example). With wholesale price of $1.8 per head, or $9 per Kg, it can

generate $1.8 million dollars income a year. Minus all expenses (including depreciation), the annual

ROI is 48% before tax on the total investment of 1.55 Million USD. (We will show, in the end of this

article, the Profit & Lose Statement of the author-designed factory, built and operated in Iceland).

So, building and operating our factories in Iceland to reach Icelands self-sufficiency in

leafy-vegetables production as well as exporting them to Greenland is a realistic and profitable

approach.

To be exact, total of 48 of our stand 1530 factories needs to be built and operated to

produce total of 96,000 tons of leafy vegetables. Out of which 84 tons of leafy-vegetables is to

supply to Icelands local market and 12 tons is to export to the Greenland. We are able to sell $1.8

per head (or $9 per Kg) of lettuce produced and the ROI of building and operating one factory in

Iceland is 48.1% before tax, and 38.5% (after deducting Icelands 20% corporate tax).

Remember that we mentioned before, Iceland and Greenland has a combined population of

only 386,000, so its total market size of leaf-vegetables is also limited to build and operate only 48 of

our factories. However, the total vegetables-consuming population of 5 Nordic Europe countries as

a whole reaches 25 million. Therefore, the combined vegetables-consuming population is still very

large. Can we increase our leafy-vegetables farming industry to export vegetables-produced to

Nordic Europe continent countries?

Question comes before hand is: Why cant we build our factories on Nordic Europe continent

and supply them directly with our vegetables produced there? The answer is We cant., because


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the cost of electricity in all 4 Nordic Europe countries on the continent is very high (about 5 times of

that in Iceland). With such high price on electricity and plus high cost of local labor there, our factory

built and operated there will not be able to generate profits at all.

So, this provides Iceland with a unique opportunity: we can build and operate our factories in

Iceland, enjoying the low cost of hydroelectric power and geothermal energy of Iceland, and export

the vegetables produced to all 4 other Nordic Europe countries which are only 1000 Km away by

ocean-freight and short-distance land-freight combined. Will our vegetables produced be still fresh

after shipping from Iceland to there by ocean-freight? The answer is Yes due to that

hydroponically-produced vegetables are harvested with roots not cut. Vegetables are still alive after

harvesting. With proper packaging, their freshness can be maintained with 3-5 days of shipping on

the ocean and on the continent land.

Now, let us look at the retail-price of one head of lettuce again,

For one head of lettuce (200g) Market Retail-Price

Iceland (population 330,000) $2.90

Greenland (population: 56,000) $5.68

Norway (population 4.9 million) $2.80

Denmark, Finland & Sweden (population of 21 million) $2.12


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When we calculate the Profit & Lost Statement, how much price per head of lettuce can we sell?

If we use a wholesale price (FOB our factory) of $1.6 per head of lettuce, this price should be a

reasonable price so that we can export vegetables-produced to Norway and the final retail-price is

still competitive at the market of Norway. And our factorys ROI becomes 27.5% after tax in this case.

If we use a wholesale price (FOB our factory) of $1.4 per head of lettuce, this price should be a

reasonable price so that we can export vegetables-produced to Denmark, Finland and Sweden and

the final retail-price is still competitive at the market there. Our factorys ROI becomes 16.5% after

tax in this case. So, we can conclude that, we are able to export the produced vegetables to the

Nordic Europe Continent countries. Only the profitability is not as high as selling to Iceland and

Greenlands market.

We now look at some possible scenarios for building and operating our factories in Iceland and

each with its associated statistics:

If 48 of our factories are built and operated within 2 years in Iceland, following will be the

statistics it may generate by using lettuce production as an example:

Total Amount of Investment: 75 million USD in 2 years

Total Lettuce Produced: 9,600 tons per year after all factories are built

Total Cut of Import Trade Expenses (with wholesale price of $9.0/Kg): 74 million USD per

year after all factories are built

Total Creation of Export to Greenland Trade Incomes (with wholesale price of $9.0/Kg):

12.4 million USD per year after all factories are built

Total Local Employment Opportunities Generated (assumed wage of $36,000/per worker

per year): 960 jobs in 2 years

A realistic schedule to reach this goal will be: to build 4 pilot factories in 2015, and 44

factories in 2016 (Total of 2 years to reach to self-sufficiency of Iceland leafy-vegetables

production as well as exporting produced-vegetables to Greenland)

If 600 of our factories are built and operated within 5 years in Iceland, following will be the

statistics it may generate by using lettuce production as an example:

Total Amount of Investment: 930 million USD in 5 years


Total Cut of Import Trade Expenses (with wholesale price of $9.0/Kg): 74 million USD per

year after 48 factories are built

Total Creation of Export Trade Income to Green & Norway (with wholesale price of

$7.0/Kg): 800 million USD per year after all factories are built

Total Local Employment Opportunities Generated( Assumed wage of $36,000/per worker

per year): 12,000 jobs in 5 years


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A realistic schedule to reach this goal will be: to build 48 factories in 2015-2016, and 185

factories each year from 2017 for another 3 years (Total of 5 years to reach to

self-sufficiency of Iceland leafy-vegetables production plus exporting to Greenland and

Norway)

If 3200 of our factories (fulfills the whole market size) are built and operated within 15 years in

Iceland, following will be the statistics it may generate by using lettuce production as an example:

Total Amount of Investment: 4.65 billion USD in 15 years


Total Revenue of Foreign Trade Generated (with wholesale price of $7.0/Kg): 4.2 billion

USD per year after all factories are built

Total Local Employment Opportunities Generated( Assumed wage of $18,000/per worker

per year): 78 ,000 jobs in 15 years

A realistic schedule to reach this goal will be: to build 48 factories in 2015-2016, and to

build 185 factories each year from 2017-2019, and to build 260 factories from 2010 and on

for another 10 years (Total of 15 years to reach to self-sufficiency of Iceland

leafy-vegetables production plus exporting to Greenland, Norway, Denmark, Finland, and

Sweden)

Now, we come back to look into the author-designed hydroponic vertical farming factory of

leafy-vegetables, and see why it is efficiently-designed and practically-operable for high profitability.


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Author-designed Hydroponic Vertical Farming Factory of leafy-vegetables:

a well and efficiently designed hydroponic vertical farming factory of leafy-vegetables built inside an

industrial workshop building

Our fully-automated mass-production vegetables-growing system is built inside a completely

enclosed industrial workshop building. This automated system is called Automated

Multi-Layer-Moving-Seedbed System. Our standard factory requires only a space of 1530 . A

WorkingSpace (or Headhouse) of 30M X 12.5M with flowing-lines of working benches, allows

movable seedbeds to flow through there during daily work is performed by workers waiting inside. A

large Growing Space of 38.5M X 30M with 3 layers of 7 growing-lines of shelving on each layer

forms a 3D shelving space for storing 273 movable seedbeds (growing units, 4.3M X 1.72M each).

Total actual growing area reaches 2100 .

Multi-Stage-Transplanting-Growing-Method is used. Seeds are prepared and sent inside a Spouting

Room to grow into sprouts. Then all sprouts are washed and planted into the seedbeds designed to

grow into 4X4 c sprouts. After 4X4 c sprouts are grown, they are transferred to seedbeds

designed to grow into 7x7 c sprouts. After 7x7 c sprouts are grown, they are transferred to

seedbeds designated to grow into 14X14 c full-size harvestable vegetables. This is the optimal

way to grow the maximum amount of vegetables. Also, we turn the 20-days-a-time transplanting into

daily routing operations. Same routine procedures are executed daily seedbed by seedbed along

with daily harvesting of fixed number of seedbeds of fully-grown vegetables. The whole production

becomes year-round non-stop operation with daily routine procedures. This averages out the sparse

labor and procedural requirements into daily work, and makes the best usage of man-power as well

as the ease of execution.


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Two Robotic-Vehicles are used for shuttling movable seedbeds between Workshop and Growing

Space. Workers perform work on the seedbeds flowed inside Workshop and never step into

Growing Space.

Our product can produce massive quantity of leafy-vegetables with low-cost. For growing lettuce as

an example, in Iceland, this factory can produce 1 million heads or 200,000 Kg of lettuces a year. It

is a completely self-supplied factory (all stages of sprouts are produced internally) requiring only

vegetable-seeds as its production source. Electricity is required to light up LED lighting and liquid

fertilizer and water is required for irrigation. It required limited resource on land. It does not generate

pollutant substances and is very environmental-friendly.

The reasons that our factory matches with Icelands conditions perfectly because:

1) The major cost of operating our hydroponic vertical farming system is the cost of electricity. Our

standard 1530 factory requires 1.25 million KWATS of electricity to provide LED lighting.

Iceland provides the reasonably lowest cost on electricity. Its electricity cost ($0.04/KWATS), is

40% comparing to China, 20% comparing to Japan, 10% comparing to Norway, Denmark,

Finland and Sweden. Our hydroponic vertical farming system basically utilizing Icelands

low-cost electricity and geothermal energy to turn seeds into leafy-vegetables.

2) With all 5 Nordic Europe countries high demands and high price on fresh leafy-vegetables, our

factory can obtain handsome profits by operating it in Iceland.

3) Our vegetable factory requires only vegetable-seeds as its source and is fully self-supplied with

self-grown sprouts and strong-sprouts. Once the factory is built and operation started, no

imports materials other than vegetables-seeds are required.

4) Our vegetable factorys operations are simple and standardized. Only one computer operator is

required with certain computer knowledge and all other daily tasks done by the workers are

routine and repetitive. Workers can be trained easily with no prior experiences required.

5) Any local farmer invested in building and operating our leafy-vegetable factory can result in high

profits. And ROI of factory can be as high as 40-50% annually. They can recover their full

investment within two and a half years.

Authors Hardware Know-how

1. Growing Units-Movable Seedbeds design where germchits, strong-sprouts and

leafy-vegetables are grown. They are stored in the 3-D Growing Space while lighting and


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irrigation are performed daily until growing-cycle is completed.

2. WorkingSpace (Headhouse) design Harvesting/Packaging/Shipping; Planting Seeds,

Transplanting Germchits/SproutsTwo robotic-vehicles are used to shuttle movable

seedbeds between Workshop and Growing Space. Workers are waiting inside here to

perform works daily on the seedbeds retrieved from Growing Space. Then, newly planted

seedbeds are shuttled from Workshop into the Growing Space.

3. Robotic-Vehicles designtwo robotic-vehicles are used. One for delivering newly planted

seedbeds from Workshop into Growing Space, one for retrieving ready-to-process

seedbeds from Growing Space to Workshop.

4. 3-Dimentional Shelving Space for all movable Seedbeds design

A. 3-layers shelving structure

B. 7 movable Seedbeds flowing lines on each layer

C. 13 movable Seedbeds can be stored and flowed on each flowing line

D. Automated Irrigation System designRecycled Nutrient Liquid are stored in tanks and

daily irrigation is performed automatically by computer-control schedule. A hydroponic

NFT method is implemented.

E. Automated LED Lighting System design: LED lighting are installed on top of every

movable seedbeds on the shelving. Daily lightings are performed by computer-control

schedule.

Authors Software Know-how

1. Computer operated software for delivering and retrieving movable seedbeds

2. Recipes for nutrient solutions for different kinds of leafy-vegetables

3. Recipes for lighting schedule for different kinds of leafy-vegetables

4. Recipes for handling Seed-to-Germchit, Germchits-to-StrongSprout,

StrongSprout-to-Vegetable for different kinds of leafy-vegetables

5. Providing detailed processing notes for growing vegetables on different stage

6. Providing detailed information on harvesting, packaging and shipping processing

7. Assurance on the mass-production on the leafy-vegetable requested by the customers

8. Proving consultation on developing new leafy-vegetables production

Photos of Author-designed factory


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To calculate the Total Number of Lettuces produced annually in our

factory:

With actual data collected in a in the author-designed factory in 2012-2013, we provide heads of

lettuces that a 1530 sq. meters factory that can be produced annually:

System Configurations and production statistics:

Total of Growing Units: 273

Each Growing Units size: 4.3M X 1.73M

Cost of industrial workshop build: $250,000

Cost of Hydroponic Vertical Farming System installed inside: $1.3 Million.

System has a Germination Room to produce initial-sprouts (2cmX2cm-size) from

vegetable-seeds daily with 14 days of growing cycle. 4950 initial-sprouts (2cmX2cm-size) can

be produced daily.

System utilizes 26 growing units to produce stronger-sprouts (4cmX4cm-size) from

initial-sprouts (2cmX2cm-size). 1 growing units (around 3600 stronger-sprouts) can be

produced daily.

System utilizes 52 growing units to product lager-sprouts (7cmX7cm-size) from

stronger-sprouts (4cmX4cm-size) with 20 days of growing cycle. 2.6 growing units (and 3200

stronger-sprouts) can be produced daily.

System utilizes 195 growing units to product harvestable lettuces (14cmX14cm-size) with 20

days of growing cycle. 9.25 growing units (and 2900 vegetables) can be produced daily.

Total Number of Lettuces can be produced annually:

Annual Production calculations:

With one stage of germination in a enclosed

Room, and 3 stages to grow sprouts to lettuces,

the final daily number of seedbeds that we can

produce harvesting vegetables are:

9.25

Growing

Units

Harvestable Lettuces on each Growing Units are: 348 Head

Annual Production Days are: 365 days


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Annual Number of Lettuce that we grow: 1,174,935 Head

Consider survival rate of the lettuce on each

Growing Unit:

90%

Actual Number of Lettuces produced annually 1,057,442 Head

With Icelands market retail-price of $2.90 to $3.10 per head of lettuce, and we calculate total annual

income o f our factory with wholesale-price of $1.8 per head of lettuce.

Income Statement and Return-on-Investment calculation on our standard

1530 factory built and operated in Iceland

by producing Lettuces as example

1530 Sq. Meters 3-Layer 273 Seedbeds

Hydroponic Vegetable Factory

$1,540,323 USD

Total Annual Income(Leaving-factory price: $1.8

per head of lettuce) $1,903,395 USD

USD

Total Annual Expenses $1,162,619 USD

Labor Cost (total of 20 working 2 shifts,

assumed $36,000 per worker per year) $720,000 USD

Cost of seeds($100 per 5,000) $44,761 USD

Sprout Growing Supporter $29,141 USD

Liquid Fertilizer $9,677 USD

Consumable Materials $5,181 USD

Cost of packaging $68,222 USD


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Cost of Cooling/Heating (LED illumination will

provide enough heating for the building) $0 USD

Cost of Electricity for LED lightings($0.08/KW) $99,073 USD

Land Rental Fee $29,032 USD

Depreciation (95% depreciate in 15 years) $97,043 USD

System Operation and Maintenance $12,903 USD

Administration Fee(3% of Total Income $47,585 USD

Profit $740,776 USD

Profit Taxes (unknown, assumed 0% at this time) 20%

Net Profit $592,621 USD

Return on Investment 38.5%

We can see that, local farmer make investment in building and operating our factory there, can

recover their total investment cost back in two and a half year.

NOTE: When our factories are built and operated to sell to Norway, the FOB leaving our factory

price will be $1.6 so that the final reach-to-market retail-price can still be competitive. For this price,

the profit will drop and ROI becomes 27.5% after tax. When our factories are built and operated to

sell to Denmark, Finland and Sweden, the FOB leaving our factory price will be $1.4 so that the final

reach-to-market retail-price can still be competitive. For this price, the profit will drop and ROI

becomes 16.5% after tax.


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Conclusion:

Building and operating author-designed hydroponic vertical farming factory

of leafy-vegetables, Iceland can reach to its self-sufficiency of its

leafy-vegetables production as well as the state of exporting them to

Greenland within 2-3 year time. Total investment is 75 million USD. Total

annual revenue generated is 84 million USD. And each factory can obtain

high annual ROI of 38.5%.

If continuing building up this leafy-vegetables farming industry with our

factories, Iceland can reach to the state of exporting leafy-vegetables to

Greenland and Norways market within 5 years. Total investment is 930

million USD. Total annual revenue generated is more than 900 million USD.

And each factory can still obtain high annual ROI of 27.5%.

Should the ambition of covering all Nordic Europe market is desired,

Iceland can reach that goal within 15 years with continuing build-up of our

factories in Iceland. Total investment is 4.5 billion USD. Total annual

revenue generated is more than 3.5 billion USD. And each factory can

obtain annual ROI of 16.5%.

NOTE1: Author-designed Hydroponic Vertical Farming Factory of Leafy-Vegetables is

manufactured and semi-assembled in China. The semi-assembled factory will be shipped

container-ocean-freight to Iceland for final assembly and testing onsite. Lead-time from the order is

given with 66% down payment, to the delivery onsite is 3 months, and final assembly and testing

time is 2 months. So, total of 5 months of lead-time before the system is functional shall be

expected.

NOTE2: The standard1530 , 273 seedbeds system price is 1.3 USD FOB Shanghai, China

including all turn-key system equipments inside an industrial workshop building. This price excludes

the industrial workshop building itself and the temperature-controlled system of the building (such as

air-conditioning system, water-supply equipment and electricity-supply system, etc.).

NOTE3: Authors company will guarantee our customer of the production of the mutually-agreed

type of leafy-vegetables, and is willing to perform the vegetables production operation for the

customer under mutually-agreed contract with charge if so desired by the customer.


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NOTE4: Author-designed factory currently is designed for lettuce growing and production. Other

mutually-agreed type of leafy-vegetable can be chosen and authors company will make the proper

modification to perform the production of vegetable type chosen. However, we only allow one type of

leafy-vegetables to be grown and produced in one factory. The production of various types of

leafy-vegetables in the same factory will weaken the utilization of seedbeds and degrade the

efficiency of the production (and may lose the profitability), therefore, not supported.

NOTE5: Because our factory utilize the Multi-Stage-Transplanting-Growing-Method, there is a

ramp-up time of 74 days (in the case of lettuce production) before daily production of targeted

quantity can be performed from that day and on. The ramp-up times for different type of

leafy-vegetables may vary.

NOTE6: Although Iceland is what author writes this article for, there are two other places that author

has in mind can also build and operate of our factory of leafy-vegetables with high profits: they are

Qatar and Bahrain, both in Persian Gulf. Investors with interests in building and operating of our

factories in these locations can send your request to Authors email address: [email protected]

and the full analysis information package will be replied to you with the location you specified.

Documents

Can Iceland Reach its Self-Sufficiency of Leafy-Vegetables Production 20140822.pdf