POMEG-TECH considers an economic profitability analysis a prior condition to any investment in the pomegranate business. Hence, POMEG-TECH offers its customers the economic analysis as part of the package, at the start (e.g., growing pomegranates) and later in every other phase (e.g., extraction of the arils, juice production, etc.).

Even before entering into expenses, per demand of a customer the prior conditions (climate, soil, etc.) are judged by POMEG-TECH with the objective to screen out the worst cases, in which there is no chance to succeed. An additional, complimentary, consideration is dedicated to the marketing opportunities (see MARKETING).

Part and parcel of the pre-feasibility report is an economic analysis based on data collected during the field visit of POMEG-TECH experts who cover the ‘economics’ issues.

The economic ‘model’ analysis is based on POMEG-TECH experts’ experience in Israel and other countries, and relates to a 100 hectare (ha) plantation. Since at the beginning the available data are not sufficient, this analysis could be defined as a demonstrative ‘model’ based on a series of assumptions regarding the climate and other ambient conditions.

Production costs, yields and farm-gate prices are estimated, both for the investment period [the first two years] and for the later fruit bearing years. An outcome of adopting the advanced agro-technology the yield attains its highest values (quantities and quality-wise).

The profitability parameters are calculated and disclose an extremely profitable business:
• a) The cumulative Net Present Value surpasses within 7 years the investment 3.6 times.
• b) The ‘year of return of the investment’ is approximately five years, and
• c) The Internal Rate of Return (IRR) is over 50% within only 7 years.

Similar economic analyses were also carried out, by POMEG-TECH experts, for additional activities such as keeping the fruits in a cold-store, extracting the arils, etc. These analyses are performed by POMEG-TECH to the request of a customer within his specific ambient.

After adding the economics of the cold storage aspect to that of the farm described above, it transpires that the overall calculated profitability is somewhat higher than for the farming itself: the grower can sell during a much longer period of the year, an important asset and a contribution to his prestige as a supplier.

The economic estimation of the profitability of an arils (seeds) extraction factory, at the appropriate plant, carried out by POMEG-TECH, offer a general plant economic framework and it shows to be profitable.