Adipic Market 2

MARKET FEASIBILITY STUDY

MARKET DESCRIPTION

Monoammonium phosphate has been one of the most important granular fertilizer for many years. Its water soluble and dissolves rapidly in adequately moist soil. Monoammonium phosphate can also be used in fire extinguishers that is commonly found in schools, offices and homes. However, Philippines being an agricultural country, demand for Monoammonium phosphate is solely focused on the fertilizer sector. The amount of demand for fertilizer is growing to meet the demand for Philippines agricultural services. Also, as one of the top producers of rice, corn and sugarcanes, Philippines uses various amounts of fertilizers to ensure the growth o f the crops. The amount of Monoammonium phosphate in demand is greater than the supply generated worldwide, being in a continent which specializes in producing agricultural products, Asia alone generates vast amounts of demand for fertilizers worldwide. Countries such as China, India and United states are the leading consumers of these fertilizers.

Figure 1 Fertilizer utilization worldwide worldwide The figure shows the international utilization of fertilizers, China uses 28% of all the fertilizers worldwide while India and North America both uses 14% of th e fertilizers.

MARKET DEMAND AND SUPPLY OF MONOAMMONIUM PHOSPHATE

This section will show the historical and projected demand and supply for Monoammonium Phosphate in order to determine the feasibility of monoammonium phosphate for the next 10 years here in the Philippines HISTORICAL DEMAND OF MONOAMMONIUM PHOSPHATE

The data presented below is the total derived demand du ring the past 10 years. The derived data below is gathered using the cost of sales filed by the companies that uses Monoammonium Phosphate as raw materials for their product. [Source: Security and Exchange Commission, 20062015] 2015] Table 1.1 Historical Demand data for Monoammonium Phosphate acid YEAR 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

HISTORICAL DEMAND (KG) 125,409,615.65 92,590,361.07 43,782,708.94 66,673,829.76 96,734,206.52 52,897,542.71 64,181,879.21 76,576,608.82 85,650,198.65 98,613,900.87

Historical Demand for MAP (Kg/Yr) 140,000,000.00 140,000,000.0 0 120,000,000.00 100,000,000.00 100,000,000.0 0 80,000,000.00 80,000,000.0 0 60,000,000.00 60,000,000.0 0 40,000,000.00 40,000,000.0 0 20,000,000.00 20,000,000.0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 DEMAND (Kg/Yr)

Figure 1.1 Graphical representation of historical demand for Monoammonium Phosphate

HISTORICAL SUPPLY FOR MONOAMMONIUM PHOSPHATE

The data presented below is the total supply for Monoammonium Phosphate with added derived data from different manufacturer and industries that manufactures Monoammonium Phosphate in the Philippines. Table 1.2 Historical supply data for Monoammonium Phosphate YEAR 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

HISTORICAL SUPPLY (KG) 94,439,823.00 41,117,493.00 26,371,430.00 4,903,042.00 1,464,173.00 655,750.00 45,604,401.00 12,350,104.00 22,268,032.00 2,347,745.00

HISTORICAL SUPPLY OF MAP (Kg/Yr) 100,000,000.00 90,000,000.00 80,000,000.00 70,000,000.00 60,000,000.00 50,000,000.00 40,000,000.00 30,000,000.00 20,000,000.00 10,000,000.00 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

SUPPLY (Kg/Yr)

Figure 1.2 Graphical representation for historical supply data of Monoammonium Phosphate

Table 1.3 Historical Supply and Demand of Monoammonium Phosphate YEAR

HISTORICAL DEMAND (KG) 125,409,615.65 92,590,361.07 43,782,708.94 66,673,829.76 96,734,206.52 52,897,542.71 64,181,879.21 76,576,608.82 85,650,198.65 98,613,900.87

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

HISTORICAL SUPPLY (KG) 94,439,823.00 41,117,493.00 26,371,430.00 4,903,042.00 1,464,173.00 655,750.00 45,604,401.00 12,350,104.00 22,268,032.00 2,347,745.00

Historical Demand and Supply of MAP 140,000,000.00 120,000,000.00 100,000,000.00 80,000,000.00 60,000,000.00 40,000,000.00 20,000,000.00 1

2

3

4

DEMAND (Kg/Yr)

5

6

7

8

9

10

SUPPLY (Kg/Yr)

Figure 1.3 Graphical representation of historical demand vs. supply of Monoammonium Phosphate

Projected Demand and Supply for Monoammonium Phosphate

This section shows the projected future supply and demand for the next 10 years using different types of statistical projection. This is a necessary procedure in order to predict the movement of the market for Monoammonium Phosphate in the next 10 years.

CALCULATION OF STATISTICAL PROJECTION 1. Arithmetic Straight-Line Method (ASLM) – assumes that the annual increase in the

future will be the same although the rate or increase in percent is decreasing.

2. Arithmetic Geometric Curve Method (AGCM) – assumes that the annual increase in the

projected values is constant however; the amount of change keeps on increasing.

3. Statistical Straight-Line Method (SSLM) – assumes that the change of values is constant

while the change in percentage of the data for the year is decreasing.

4. Statistical Parabolic Curve Method (SPCM) - assumes that the change in the values and

the percentage change could be decreasing or increasing.

Projected demand for Monoammonium Phosphate

1. Arithmetic straight line method (ASLM)

Table 1.4 Projected demand Values of Monoammonium Phosphate using ASLM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

125,409,615.65 92,590,361.07 43,782,708.94 66,673,829.76 96,734,206.52 52,897,542.71 64,181,879.21 76,576,608.82 85,650,198.65 98,613,900.87

Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Standard Deviation

Yc

92,659,297.59 89,681,995.95 86,704,694.31 83,727,392.66 80,750,091.02 77,772,789.38 74,795,487.74 71,818,186.10 68,840,884.46 65,863,582.81 39,518,564.52

Standard Deviation:

 = √ ∑( ) = √ 1.51016  = ,,. 120,000,000.00

Aslm Projected demand of MAP

100,000,000.00 80,000,000.00 60,000,000.00 40,000,000.00 20,000,000.00

y = -419011x2 + 2E+09x - 2E+12 R² = 0.8793

2000 2005 2010 Aslm Projected demand

2015 2020 2025 Poly. (Aslm Projected demand)

2030

Figure 1.4 Graphical representation of ASLM projected demand

2. Arithmetic Geometric Curve Method (AGCM)

Table 1.5 Projected demand Values of Monoammonium Phosphate using ASLM Y Year Yc 125,409,615.65 103,084,221.93 2016 92,590,361.07 107,757,189.56 2017 43,782,708.94 112,641,990.07 2018 66,673,829.76 117,748,226.16 2019 96,734,206.52 123,085,935.85 2020 52,897,542.71 128,665,612.20 2021 64,181,879.21 134,498,223.93 2022 76,576,608.82 140,595,236.99 2023 85,650,198.65 146,968,637.11 2024 98,613,900.87 153,630,953.34 2025 Standard 26,267,286.20 Deviation

Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Standard Deviation:

 ∑ ( )       6 . 8 10 √ √  =  = 10  = ,,. Projected demand of MAP using AGCM 200,000,000.00 150,000,000.00 100,000,000.00 50,000,000.00 0.00 2000200520102015202020252030

y = -46459x 2 + 2E+08x 2E+11 R² = 0.9909 Projected demand using AGCM Poly. (Projected demand using AGCM)

Figure 1.5 Graphical representation of AGCM projected demand

3. Statistical Straight Line Method (SSLM)

Table 1.6 Projected demand Values of Monoammonium Phosphate using SSLM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

125,409,615.65 92,590,361.07 43,782,708.94 66,673,829.76 96,734,206.52 52,897,542.71 64,181,879.21 76,576,608.82 85,650,198.65 98,613,900.87


Yc

74,408,232.36 73,334,986.38 72,261,740.41 71,188,494.43 70,115,248.46 69,042,002.48 67,968,756.50 66,895,510.53 65,822,264.55 64,749,018.58

.

Standard Deviation:

 ∑ (     ) 5 . 2 0 √ √  =  = 10  = .  Projected Demand of MAP using SSLM 150,000,000

y = -677048x 2 + 3E+09x - 3E+12 R² = 0.703

100,000,000 50,000,000 0 2000 2005 2010 2015 2020 2025 2030 -50,000,000

Projected Demand of MAP using SSLM

Poly. (Projected Demand of MAP using SSLM )

Figure 1.6 Graphical representation of SSLM projected demand

4. Statistical Parabolic Curve Method (SPCM)

Table 1.7 Projected demand Values of Monoammonium Phosphate using SPCM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

125,409,615.65 92,590,361.07 43,782,708.94 66,673,829.76 96,734,206.52 52,897,542.71 64,181,879.21 76,576,608.82 85,650,198.65 98,613,900.87


Yc

123,505,630.44 135,801,281.95 149,212,783.41 163,740,134.83 179,383,336.21 196,142,387.55 214,017,288.84 233,008,040.09 253,114,641.29 274,337,092.45 16,245,150.29

Standard Deviation:

 ∑ (     ) 2 . 6 10 √ √  =  = 10  = .  Projected demand of MAP using SPCM 300,000,000 250,000,000 200,000,000

y = 206453x 2 - 8E+08x + 8E+11 R² = 0.973 Projected demand of MAP using SPCM

150,000,000 100,000,000 50,000,000 0 2000 2005 2010 2015 2020 2025 2030

Poly. (Projected demand of MAP using SPCM)

Figure 1.7 Graphical representation of SPCM projected demand

Table 1.8 Summary of Standard Deviations Method of Statistical Projection Standard Deviation 1. ASLM 2. AGCM 3. SSLM 4. SPCM

,,,,.. ,,,,..

Since SPCM have the lowest standard deviation, SPCM should be used to project the demand of Monoammonium Phosphate for the next 10 years. Table 1.9 Summary of Equations and R2 of different methods of projection Method

2nd Order Polynomial Regression Equation

R 2

ASLM

y = -419011x2 + 2E+09x - 2E+12

0.8793

AGCM

y = -46459x2 + 2E+08x - 2E+11

0.9909

SSLM

y = -677048x2 + 3E+09x - 3E+12

0.703

SPCM

y = -206453x2 - 8E+08x + 8E+11

0.973

Table 1.10 Projected Demand of Monoammonium Phosphate

Year

Demand (Net Weight in kg)

2018

149,212,783.41

2019

163,740,134.83

2020

179,383,336.21

2021

196,142,387.55

2022

214,017,288.84

2023

233,008,040.09

2024

253,114,641.29

2025

274,337,092.45

2026

234,775,832.63

2027

258,229,983.70

Projected supply for Monoammonium Phosphate 1. Arithmetic straight-line method (ASLM)

Table 1.11 Projected supply Values of Monoammonium Phosphate using ASLM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

94,439,823.00 41,117,493.00 26,371,430.00 4,903,042.00 1,464,173.00 655,750.00 45,604,401.00 12,350,104.00 22,268,032.00 2,347,745.00


Yc

-18,117,161.22 -28,349,614.33 -38,582,067.44 -48,814,520.56 -59,046,973.67 -69,279,426.78 -79,511,879.89 -89,744,333.00 -99,976,786.11 -110,209,239.22 35,314,798.05

Standard Deviation:

 ∑ ( )       1 . 2 10  = √  = √ 10  = ,,. Projected Supply ASLM 150,000,000.00 100,000,000.00 50,000,000.00 0.00 2000200520102015202020252030 -50,000,000.00

y = -147354x 2 + 6E+08x 6E+11 R² = 0.924 ASLM Projected Supply Poly. (ASLM Projected Supply)

-100,000,000.00 -150,000,000.00

Figure 1.10 Graphical representation of ASLM supply projection


Table 1.12 Projected supply Values of Monoammonium Phosphate using AGCM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

94,439,823.00 41,117,493.00 26,371,430.00 4,903,042.00 1,464,173.00 655,750.00 45,604,401.00 12,350,104.00 22,268,032.00 2,347,745.00


Yc

19,234,259.56 157,579,609.67 1,290,995,024.23 10,576,673,949.85 86,651,017,038.91 709,901,693,999.40 5,815,978,073,481.85 47,648,288,822,438.40 390,365,884,984,728.00 3,198,132,145,474,840.00 37,477,743.33

Standard Deviation:

 ∑ (     ) 1 . 4 10 √ √  =  = 10  = ,,. AGCM projection y = 6E+14x 2 - 2E+18x + 2E+21 R² = 0.3811

250,000,000,000,000,000.00 200,000,000,000,000,000.00 150,000,000,000,000,000.00

Projected Supply

100,000,000,000,000,000.00 50,000,000,000,000,000.00 0.00 2000 -50,000,000,000,000,000.00

2010

2020

2030

Poly. (Projected Supply)

Figure 1.11 Graphical representation of AGCM supply projection


Table 1.13 Projected supply Values of Monoammonium Phosphate using SSLM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

94,439,823.00 41,117,493.00 26,371,430.00 4,903,042.00 1,464,173.00 655,750.00 45,604,401.00 12,350,104.00 22,268,032.00 2,347,745.00


Yc

-5,167,330.87 -10,679,972.72 -16,192,614.56 -21,705,256.41 -27,217,898.26 -32,730,540.11 -38,243,181.96 -43,755,823.81 -49,268,465.65 -54,781,107.50 22,873,163.33

Standard Deviation:

 ∑ ( )       5 . 2 10 √ √  =  = 10  = ,,. Projected Supply SSLM 120,000,000.00 100,000,000.00 80,000,000.00

y = 35910x 2 - 2E+08x + 2E+11 R² = 0.8384

60,000,000.00 40,000,000.00 20,000,000.00 0.00 -20,000,000.002000 2005 2010 2015 2020 2025 2030

Projected Supply SSLM Poly. (Projected Supply SSLM)

-40,000,000.00 -60,000,000.00 -80,000,000.00

Figure 1.12 Graphical representation of SSLM supply projection


Table 1.14 Projected supply Values of Monoammonium Phosphate using SPCM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

94,439,823.00 41,117,493.00 26,371,430.00 4,903,042.00 1,464,173.00 655,750.00 45,604,401.00 12,350,104.00 22,268,032.00 2,347,745.00


Yc

37,230,411.05 45,555,318.13 54,843,810.25 65,095,887.41 76,311,549.62 88,490,796.87 101,633,629.16 115,740,046.50 130,810,048.88 146,843,636.31 18,085,442.12

Standard Deviation:

 ∑ (     ) 3 . 2 10 √ √  =  = 10  = ,,. Projected supply SPCM 250,000,000.00

y = 807845x 2 - 3E+09x + 3E+12 R² = 0.9169

200,000,000.00 150,000,000.00

Projected supply SPCM

100,000,000.00

Poly. (Projected supply SPCM)

50,000,000.00 0.00 2000 -50,000,000.00

2010

2020

2030

Figure 1.13 Graphical Representation of SPCM supply projection

Table 1.15 Summary of Standard Deviations Method of Statistical Projection Standard Deviation 1. ASLM 35,314,798.05 2. AGCM 37,477,743.33 3. SSLM 22,873,163.33 4. SPCM 18,085,442.12 SPCM yields the lowest standard deviation among the 4 therefore, SPCM projection shall be used in determining the supply for the next 10 years. Table 1.16 Summary of Equations and R2 of different methods of projection Method


R 2

ASLM

y = -147354x2 + 6E+08x - 6E+11

0.924

AGCM

y = 6E+14x2 - 2E+18x + 2E+21

0.3811

SSLM

y = 35910x2 - 2E+08x + 2E+11

0.8384

SPCM

y = 807845x2 - 3E+09x + 3E+12

0.9169

Table 1.17 Projected supply of Monoammonium Phosphate using SPCM projection for the next 10 years

Year

Supply (Net Weight in kg)

2018

54,843,810.25

2019

65,095,887.41

2020

76,311,549.62

2021

88,490,796.87

2022

101,633,629.16

2023

115,740,046.50

2024

130,810,048.88

2025

146,843,636.31

2026

163,840,808.78

2027

181,801,566.29

Table 1.18 Projected Supply and Demand of Monoammonium Phosphate YEAR

PROJECTED DEMAND (KG) 149,212,783.41 163,740,134.83 179,383,336.21 196,142,387.55 214,017,288.84 233,008,040.09 253,114,641.29 274,337,092.45 234,775,832.63 258,229,983.70

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

PROJECTED SUPPLY (KG) 54,843,810.25 65,095,887.41 76,311,549.62 88,490,796.87 101,633,629.16 115,740,046.50 130,810,048.88 146,843,636.31 163,840,808.78 181,801,566.29

Projected Demand Vs. Projected Supply 500,000,000.00 450,000,000.00 400,000,000.00 350,000,000.00 300,000,000.00 250,000,000.00 200,000,000.00 150,000,000.00 100,000,000.00 50,000,000.00 0.00 2018

2019

2020

2021

Projected Supply

2022

2023

2024

2025

2026

2027

Projected Demand

Figure 1.16 Graphical Representation of Projected supply and demand of Monoammonium Phosphate

The projected supply and demand for the next 10 years shows that there is high amount of unsatisfied demand here in the Philippines. This high amount of unsatisfied demand may cause the companies using Monoammonium Phosphate to reduce their production rate which may led to the company’s bankruptcy.

PLANT CAPACITY

For the annual production of the plant, 300 operating days will be allocated. Operation will shut down for a total of 60 days this will happen during the months of July and November for maintenance purposes. Table 1.19 Projected demand and supply for Monoammonium Phosphate

Demand

Supply

149,212,783.41

54,843,810.25

163,740,134.83

65,095,887.41

179,383,336.21

76,311,549.62

196,142,387.55

88,490,796.87

214,017,288.84

101,633,629.16

233,008,040.09

115,740,046.50

253,114,641.29

130,810,048.88

274,337,092.45

146,843,636.31

234,775,832.63

163,840,808.78

258,229,983.70

181,801,566.29

Unsatisfied Demand

The difference between projected demand and projected supply in the market. The amount of demand not being satisfied by the supply circulating in the market. Unsatisfied demand dictates the plant capacity for production to avoid over or under production in the plant. Unsatisfied Demand = Projected Demand – Projected Supply

Table 1.20 Table for Unsatisfied demand of MAP Unsatisfied Demand (kg)

94,368,973.16 98,644,247.42 103,071,786.60 107,651,590.68 112,383,659.68 117,267,993.59 122,304,592.41 127,493,456.14 70,935,023.85 76,428,417.41

Table 1.21 Plant Capacity for Monoammonium Phosphate Market Share (%)

Annual Production (kg)

Daily Production (kg)

80%

13.107%

12368614.39

41228.71464

98,644,247.42

90%

14.106%

13914691.19

46382.30397

2020

103,071,786.60

100%

15.0%

15460767.99

51535.8933

2021

107,651,590.68

100%

14.362%

15460767.99

51535.8933

2022

112,383,659.68

100%

13.757%

15460767.99

51535.8933

2023

117,267,993.59

100%

13.184%

15460767.99

51535.8933

2024

122,304,592.41

100%

12.641%

15460767.99

51535.8933

2025

127,493,456.14

100%

12.127%

15460767.99

51535.8933

2026

70,935,023.85

100%

21.796%

15460767.99

51535.8933

2027

76,428,417.41

100%

20.229%

15460767.99

51535.8933

Year

Unsatisfied Demand (kg)

Utilization (%)

2018

94,368,973.16

2019

MARKET DEMAND AND SUPPLY OF RAW MATERIALS

The tables and figures below shows the historical and projected demand and supply of the raw materials used, Phosphoric acid and Ammonia, which express the feasibility of the production of Monoammonium Phosphate.

HISTORICAL DEMAND AND SUPPLY OF PHOSPORICACID

Table 1.20 Table of historical supply and demand of Phosphoric acid [Philippine Statistics Authority] YEAR 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

HISTORICAL DEMAND 6,229,792.00 2,294,513.00 816,172.00 468,256.00 2,986,482.00 5,649,435.00 1,367,274.00 1,033,185.00 635,278.00 1,154,647.00

HISTORICAL SUPPLY 19,169,470,000.00 31,220,277,000.00 17,465,182,000.00 21,588,200,000.00 18,257,860,000.00 17,287,846,000.00 17,761,773,000.00 18,327,072,000.00 16,528,003,000.00 18,187,834,000.00

Historical Demand and Supply Phosporic acid 35,000,000,000.00 30,000,000,000.00 25,000,000,000.00 20,000,000,000.00 15,000,000,000.00 10,000,000,000.00 5,000,000,000.00 1

2

3

4

DEMAND (Kg/Yr)

5

6

7

8

9

10

SUPPLY (Kg/Yr)

Figure 1.17 Graphical Representation of Historical Demand and Supply of Phosphoric Acid

Projected demand for Phosphoric acid

1. Arithmetic straight-line method (ASLM)

Table 1.4 Projected demand Values of Phosphoric acid using ASLM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y


6,229,792.00 2,294,513.00 816,172.00 468,256.00 2,986,482.00 5,649,435.00 1,367,274.00 1,033,185.00 635,278.00 1,154,647.00

Yc

26,837.00 -537,068.00 -1,100,973.00 -1,664,878.00 -2,228,783.00 -2,792,688.00 -3,356,593.00 -3,920,498.00 -4,484,403.00 -5,048,308.00 2,391,841.18

Standard Deviation:

 = √ ∑( ) = √ 5.71013  = ,, .  8,000,000.00

ASLM projection demand

6,000,000.00 4,000,000.00

y = -9572.6x2 + 4E+07x - 4E+10 R² = 0.8656

2,000,000.00 (2,000,000.00)2000

2005

2010

2015

2020

2025

2030

(4,000,000.00) (6,000,000.00) (8,000,000.00) ASLM projection demand

Poly. (ASLM projection demand)

Figure 1.4 Graphical representation of ASLM projected demand


Table 1.5 Projected demand Values of Phosphoric acid using ASLM Y Year Yc 6,229,792.00 1,667,487.99 2016 2,294,513.00 2,408,109.32 2017 816,172.00 3,477,680.52 2018 468,256.00 5,022,305.96 2019 2,986,482.00 7,252,982.84 2020 5,649,435.00 10,474,423.61 2021 1,367,274.00 15,126,679.93 2022 1,033,185.00 21,845,254.13 2023 635,278.00 31,547,909.41 2024 1,154,647.00 45,560,037.08 2025 Standard 2,863,345.69 Deviation

Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Standard Deviation:

 ∑ (     ) 8 . 1 10  = √  = √ 10  = ,, .  AGCM Projected demand 120,000,000.00 100,000,000.00

y = 399840x 2 - 2E+09x + 2E+12 R² = 0.8799

80,000,000.00 60,000,000.00

AGCM Projected demand

40,000,000.00

Poly. (AGCM Projected demand)

20,000,000.00 0.00 2000 2005 2010 2015 2020 2025 2030 -20,000,000.00

Figure 1.5 Graphical representation of AGCM projected demand


Table 1.6 Projected demand Values of Phosphoric acid using SSLM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

6,229,792.00 2,294,513.00 816,172.00 468,256.00 2,986,482.00 5,649,435.00 1,367,274.00 1,033,185.00 635,278.00 1,154,647.00


Yc

568,640.80 260,483.96 -47,672.87 -355,829.71 -663,986.55 -972,143.38 -1,280,300.22 -1,588,457.05 -1,896,613.89 -2,204,770.73 1,772,023.071

Standard Deviation:

 = √ ∑( ) = √ 3.11010   = ,,. SSLM projected demand 8,000,000 6,000,000 4,000,000 2,000,000

SSLM projected demand Poly. (SSLM projected demand)

0 2000 2005 2010 2015 2020 2025 2030 y = -16180x 2 + 6E+07x - 6E+10 -2,000,000 R² = 0.7645 -4,000,000 -6,000,000 -8,000,000

Figure 1.6 Graphical representation of SSLM projected demand


Table 1.7 Projected demand Values of Monoammonium Phosphate using SPCM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

6,229,792.00 2,294,513.00 816,172.00 468,256.00 2,986,482.00 5,649,435.00 1,367,274.00 1,033,185.00 635,278.00 1,154,647.00


Yc

1,257,524.22 1,283,494.87 1,325,121.97 1,382,405.51 1,455,345.49 1,543,941.91 1,648,194.78 1,768,104.08 1,903,669.83 2,054,892.01 1,757,354.70

Standard Deviation:

 ∑ (     ) 3 . 0 10 √ √  =  = 10  = ,, .  SPCM projected demand 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000

SPCM projected demand Poly. (SPCM projected demand) y = 9301.3x 2 - 4E+07x + 4E+10 R² = 0.2262

1,000,000 0 2000 2005 2010 2015 2020 2025 2030

Figure 1.7 Graphical representation of SPCM projected demand

Table 1.8 Summary of Standard Deviations Method of Statistical Projection Standard Deviation 1. ASLM 2,391,841.18 2. AGCM 2,863,345.69 3. SSLM 1,772,023.071 4. SPCM 1,757,354.70 Since SPCM projection yields the lowest Standard deviation among the four projection methods, it will be used in employing the projected demand for Phosphoric acid for the next 10 years. Table 1.9 Summary of Equations and R2 of different methods of projection Method


R 2

ASLM

y = -9572.6x2 + 4E+07x - 4E+10

0.8656

AGCM

y = 399840x2 - 2E+09x + 2E+12

0.8799

SSLM

y = -16180x2 + 6E+07x - 6E+10

0.7645

SPCM

y = 9301.3x2 - 4E+07x + 4E+10

0.2262

Table 1.10 Projected Demand of Phosphoric Acid

Year

Demand (Net Weight in kg)

2018

1,325,121.97

2019

1,382,405.51

2020

1,455,345.49

2021

1,543,941.91

2022

1,648,194.78

2023

1,768,104.08

2024

1,903,669.83

2025

2,054,892.01

2026

216,598.52

2027

399,133.59

Projected supply for Phosphoric acid 1. Arithmetic straight-line method (ASLM)

Table 1.11 Projected supply Values of Phosphoric acid using ASLM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

94,439,823.00 41,117,493.00 26,371,430.00 4,903,042.00 1,464,173.00 655,750.00 45,604,401.00 12,350,104.00 22,268,032.00 2,347,745.00


Yc 17,969,692,666.67 17,860,622,000.00 17,751,551,333.33 17,642,480,666.67 17,533,410,000.00 17,424,339,333.33 17,315,268,666.67 17,206,198,000.00 17,097,127,333.33 16,988,056,666.67 4,041,357,057.65

Standard Deviation:

 ∑ ( )       1 . 6 10  = √  = √ 10  = ,, , .  35,000,000,000.00 30,000,000,000.00 25,000,000,000.00

ASLM projected supply ASLM projected supply Poly. (ASLM projected supply)

20,000,000,000.00 15,000,000,000.00

y = 2E+07x 2 - 1E+11x + 1E+14 R² = 0.338

10,000,000,000.00 5,000,000,000.00 0.00 2000 2005 2010 2015 2020 2025 2030

Figure 1.10 Graphical representation of ASLM supply projection


Table 1.12 Projected supply Values of Phosphoric acid using AGCM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

94,439,823.00 41,117,493.00 26,371,430.00 4,903,042.00 1,464,173.00 655,750.00 45,604,401.00 12,350,104.00 22,268,032.00 2,347,745.00


Yc

18,750,122,209.91 19,329,793,909.85 19,927,386,521.23 20,543,454,080.19 21,178,567,751.24 21,833,316,356.78 22,508,306,923.03 23,204,165,242.82 23,921,536,455.73 24,661,085,646.25 6,146,935,740.21

Standard Deviation:

 ∑ (     ) 3 . 7 10 √ √  =  = 10  = ,, , .  AGCM projected supply 35,000,000,000.00 y = 6E+07x 2 - 2E+11x + 2E+14 R² = 0.5122

30,000,000,000.00 25,000,000,000.00

AGCM projected supply

20,000,000,000.00 15,000,000,000.00

Poly. (AGCM projected supply)

10,000,000,000.00 5,000,000,000.00 0.00 2000

2010

2020

2030

Figure 1.11 Graphical representation of AGCM supply projection


Table 1.13 Projected supply Values of Phosphoric acid using SSLM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

94,439,823.00 41,117,493.00 26,371,430.00 4,903,042.00 1,464,173.00 655,750.00 45,604,401.00 12,350,104.00 22,268,032.00 2,347,745.00


Yc 15,585,335,466.67 14,859,150,696.97 14,132,965,927.27 13,406,781,157.58 12,680,596,387.88 11,954,411,618.18 11,228,226,848.48 10,502,042,078.79 9,775,857,309.09 9,049,672,539.39 3,518,445,812.36

Standard Deviation:

 ∑ ( )       1 . 2 10  = √  = √ 10  = ,, , .  SSLM projected supply 35,000,000,000.00

y = 2E+06x 2 - 7E+09x + 8E+12 R² = 0.7906

30,000,000,000.00 25,000,000,000.00

SSLM projected supply

20,000,000,000.00 15,000,000,000.00

Poly. (SSLM projected supply)

10,000,000,000.00 5,000,000,000.00 0.00 2000

2010

2020

2030

Figure 1.12 Graphical representation of SSLM supply projection


Table 1.14 Projected supply Values of Phosphoric acid using SPCM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

94,439,823.00 41,117,493.00 26,371,430.00 4,903,042.00 1,464,173.00 655,750.00 45,604,401.00 12,350,104.00 22,268,032.00 2,347,745.00


Yc 17,553,284,383.33 17,704,542,283.52 17,900,526,295.45 18,141,236,419.13 18,426,672,654.55 18,756,835,001.70 19,131,723,460.61 19,551,338,031.25 20,015,678,713.64 20,524,745,507.77 3,457,885,359.49

Standard Deviation:

 ∑ ( )       1 . 2 10  = √  = √ 10  = ,, , .  SPCM projected supply 35,000,000,000.00 30,000,000,000.00

y = 5E+07x 2 - 2E+11x + 2E+14 R² = 0.3441 SPCM projected supply

25,000,000,000.00 20,000,000,000.00 15,000,000,000.00

Poly. (SPCM projected supply)

10,000,000,000.00 5,000,000,000.00 0.00 2000

2010

2020

2030

Figure 1.13 Graphical Representation of SPCM supply projection

Table 1.15 Summary of Standard Deviations Method of Statistical Projection Standard Deviation 1. ASLM 4,041,357,057.65 2. AGCM 6,146,935,740.21 3. SSLM 3,518,445,812.36 4. SPCM 3,457,885,359.49 SPCM yields the lowest standard deviation among the 4 therefore, SPCM projection shall be used in determining the supply for the next 10 years. Table 1.16 Summary of Equations and R2 of different methods of projection Method


R 2

ASLM

y = 2E+07x2 - 1E+11x + 1E+14

0.338

AGCM

y = 6E+07x2 - 2E+11x + 2E+14

0.5122

SSLM

y = 2E+06x2 - 7E+09x + 8E+12

0.7906

SPCM

y = 5E+07x2 - 2E+11x + 2E+14

0.3441

Table 1.17 Projected supply of Phosphoric Acid using SPCM projection for the next 10 years

Year

Supply (Net Weight in kg)

2018

17,900,526,295.45

2019

18,141,236,419.13

2020

18,426,672,654.55

2021

18,756,835,001.70

2022

19,131,723,460.61

2023

19,551,338,031.25

2024

20,015,678,713.64

2025

20,524,745,507.77

2026

21,078,538,413.64

2027

21,677,057,431.25

Table 1.18 Projected Supply and Demand of Phosphoric acid YEAR

PROJECTED DEMAND (KG) 1,325,121.97 1,382,405.51 1,455,345.49 1,543,941.91 1,648,194.78 1,768,104.08 1,903,669.83 2,054,892.01 216,598.52 399,133.59

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

PROJECTED SUPPLY (KG) 17,900,526,295.45 18,141,236,419.13 18,426,672,654.55 18,756,835,001.70 19,131,723,460.61 19,551,338,031.25 20,015,678,713.64 20,524,745,507.77 21,078,538,413.64 21,677,057,431.25

Projected demand and supply of Phosphoric acid 25,000,000,000.00 20,000,000,000.00 15,000,000,000.00 10,000,000,000.00 5,000,000,000.00 0.00 2018

2019

2020

2021

PROJECTED DEMAND (Kg/Yr)

2022

2023

2024

2025

2026

2027

PROJECTED SUPPLY (Kg/Yr)

Figure 1.16 Graphical Representation of Projected supply and demand of Phosphoric Acid

The projected supply and demand for the next 10 years shows that there will be high amount of supply of Phosphoric acid here in the Philippines for the next 10 years. There will be a huge difference between supply and demand according to the projection used.

MARKET ENVIRONMENT

The market environment studies the selling price, competitiveness of product, transport methods, channels of distribution and general trade practices for Monoammonium P hosphate. The conditions mentioned is significant in order to determine the feasibility of production of Monoammonium Phosphate in the country. MARKET SELLING PRICE OF MONOAMMONIUM PHOSPHATE SELLING PRICE STUDY OF MONOAMMONIUM PHOSPHATE

Table 1.31 Historical price data for Monoammonium Phosphate [UNcomtrade] YEAR 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

PRICE(PHP/KG) 97.81477 99.55344 94.71131 83.97812 116.9699 138.7535 120.6219 111.4728 128.1909 154.2686

Historical price for Monoammoium Phosphate 180 160 140 120 100 80 60 40 20 0 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Figure 1.26 Graphical representation of historical price of Monoammonium Phosphate

PROJECTED MARKET PRICE OF MONOAMMONIUM PHOSPHATE

The market price for Monoammonium Phosphate for the next year is projected by the five methods of projection based on the historical price of Monoammonium Phosphate. 1. Arithmetic Straight Line Method (ASLM) Table 1.32 Projected Price of Monoammonium Phosphate through ASLM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

97.81477 99.55344 94.71131 83.97812 116.9699 138.7535 120.6219 111.4728 128.1909 154.2686


Yc

166.81 173.09 179.36 185.63 191.90 198.18 204.45 210.72 217.00 223.27 17.28

2. Arithmetic Geometric Curve Method (AGCM) Table 1.33 Projected Price of Monoammonium Phosphate through AGCM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

97.81477 99.55344 94.71131 83.97812 116.9699 138.7535 120.6219 111.4728 128.1909 154.2686


Yc

164.24 174.86 186.16 198.20 211.01 224.65 239.17 254.63 271.09 288.61 13.95

3. Statistical Straight Line Method (SSLM) Table 1.34 Projected Price of Monoammonium Phosphate through SSLM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

97.81477 99.55344 94.71131 83.97812 116.9699 138.7535 120.6219 111.4728 128.1909 154.2686


Yc

145.44 151.04 156.64 162.24 167.84 173.44 179.04 184.64 190.24 195.84 12.83418527

4. Statistical Parabolical Projection Method (SPCM) Table 1.32 Projected Price of Monoammonium Phosphate through SPCM Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Y

97.81477 99.55344 94.71131 83.97812 116.9699 138.7535 120.6219 111.4728 128.1909 154.2686


Yc

155.86 161.39 167.15 173.15 179.38 185.86 192.57 199.51 206.70 214.12 12.36

SPCM have the lowest standard deviation of all the projection method used. However, AGCM projection have the highest price for the market price of Monoammonium Phosphate for the next 10 years. Therefore, AGCM projection will be used to determine the market price of Monoammonium Phosphate.

COMPETITIVENESS OF THE PRODUCT

The company’s goals are to produce and distribute affordable yet high quality grade of Monoammonium Phosphate through an efficient way of production. This will ensure the growth of the company and will contribute to the growth of local market and global market.

Monoammonium Phosphate is used as a precursor for polyamides, it is also used for polyurethanes, and PVC’s. It is used to produce high grade polyamides worldwide. Kemko Philippines is determined to produce high quality Monoammonium Phosphate to ensure that it can be used to produce high grade polyamides and meet the standard of the coonsumers and to ensure that the company will be able to compete with the global competitors.

The raw materials used in the production of Monoammonium Phosphate may cause harm to the workers, Kemko Philippines will ensure that the workers will receive proper training in handling the chemicals and will ensure that the workers will receive each personal protective equipment to guarantee the safety of the employees. This will build a better environment for the workers whilst producing high quality product.

Kemko Philippines is committed to become one of the leading producers of Monoammonium Phosphate worldwide. Kemko Philippines will ensure that the product will always stay tip of the top while promoting a worker friendly environment and efficient production to keep up with the consumer’s contentment.

METHODS OF TRANSPORTATION OF MONOAMMONIUM PHOSPHATE

To ensure that the quality of the products stay high, Kemko Philippines will take pride in handling and storage of Monoammonium Phosphate to avoid deterioration and avoid safety problems. Primarily Monoammonium Phosphate is stored in a polybag. Monoammonium Phosphate is commonly distributed in a bag of 50 kg. However, in cases of h uge amount of orders, Kemko Philippines will properly supply in bulk bags. Kemko Philippines devised a method of transportation that will ensure to avoid the deterioration of the product. The following are the general considerations applied to all modes of transportation of Monoammonium Phosphate: 

Monoammonium Phosphate should be stored in a cool dry place. Away from any sources of ignition and heat and any oxidizing chemicals. Open flame source or heat may cause a fire risk. The workers should wear full personal protective equipment as there are excessive dust generation from the product which may pose a health risk on the worker.



Since Monoammonium Phosphate can be delivered through polybags, it can be easily delivered by trucks. However, the trucks must be ensured to be cool and dry and free protected against water and spillage.



If there are spillage in the product, it must be dealt with in accordance to material safety data sheet (MSDS) in order to ensure that there will be no harm to the workers.

CHANNEL OF DISITRIBUTION

Figure 1.25 Channel of distribution of Monoammonium Phosphate

The methods of distribution are shown in fig 1.25, the Monoammonium Phosphate is delivered to different companies producing different products. Kemko Philippines targets the distribution of Monoammonium Phosphate into different companies that produce Polyurethane, Polyamide and PVC. Companies that produces these materials are Neltex Inc, Sika Phils, INOAC phils., and Emerald Industries. In order to promote the product, the company will produce local publications and will contact all the companies needing the Monoammonium Phosphate and all the distributors to compare the margin of the price of the product. The sales marketing team will provide the contacting of the clients to ensure that the product will be known amongst distributors and clients. The sales marketing will also handle finding new clients worldwide to produce more partners for the company.

putangina GENERAL TRADE PRACTICES

All manufacturing plants must comply with the laws present in the country, and standard industry practices in order to survive the competition from other companies. The company is committed to survive and adapt the changing trends in the market, economy and other factors that may affect the company while still improving as a company producing and promoting high quality products and will guarantee that every process will be efficient.

PROPOSED MARKETING PROGRAM

In order for the company to gain fame, it devised a marketing program which will engage the company in a friendly environment and ensuring that the adve rtisements will be worth looking to initiate the curiosity of the clients to try the products we produce.

A. Preposition

“Monoammonium Phosphate for your plasticizer needs.”

Adipic Market 2

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