BUSINESS PLAN OF PEP-UP JUICE
Kinetic Company Limited Head Office Bashundhara City Complex Panthapath, Dhaka Web:
[email protected] Factory Kinetic Company Limited Ashulia, Savar, Dhaka
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Name of the Directors
Mohammad Saoban
Ismat Jerin Chetona
Managing Director
Director Finance
M-08, Merul, Badda, Dhaka-1212
123/4, Shyamoli, Dhaka
Cell: 01977252535
Cell: 01683613219
e-mail:
[email protected]
e-mail:
[email protected]
Quazi Tamim Ahmad
Kazi Razzak Hossain
Director Marketing
Director
23/C, Mirpur-10, Dhaka
34-b, Mohammadpur, Dhaka
Cell: 01674927958
Cell: 01681577038
e-mail:
[email protected]
e-mail:
[email protected]
Mahadi Hossain
Vincent Mabi D Costa
Director Administators
Director
34/D, Mohammadpur, Dhaka
56/GA, Mohammadpur, Dhaka
Cell: 01670600223
Cell: 0101678712274
e-mail:
[email protected]
e-mail:
[email protected]
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NATURE OF BUSINESS: Our business Plan is to process and market a unique range of healthy juice to be introduced first time in Bangladesh. Our products are responsibly sourced and harvested, filtered naturally and packaged in environmentally conscious Tetra Packs. Till now market deals in fresh fruit juices which can be easily preserved however this idea has not been catered yet. The brand name of our product range will be: PEP-UP : Pure and naturally fresh juice for Healthy life. We will introduce two types of unique juices: Product 1. Sugar-cane Juice Product-2 Coconut Water (Dab er Pani)
STATEMENT OF FINANCING NEEDED: Initial financing required of the company is 4,00,00,000 taka loan to be paid off over five years from Prime Bank Ltd. This debt will cover office space, office equipment, and for supplies two leased vans, advertising and selling cost. The Directors provided 11,00,00,000 taka jointly. So, the total cost of the project estimated at 15,00,00,000 taka.
Share of the Profit and Loss NAME OF WORKING DIRECTOR
SHARE OF PROFIT
SHARE OF LOSS
1. Mohammad Saoban
25%
25%
2. Ismat Jerin Chetona
15%
15%
3. Quazi Tamim Ahmed
25%
25%
4. Vincent Mabi D Costa
15%
15%
5. Kazi Razzak Hossain
10%
10%
6.Mahadi Hasan
10%
10%
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Confidential Agreement
The undersigned reader acknowledges that the information provided by Ismat Jerin Chetona in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of Mohammad Saoban, Chairman, Kinetic Company Ltd. It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader may cause serious harm or damage to membership. Upon request, this document is to be immediately returned to chairman.
_______________________ Mohammad Saoban Name (typed or printed) Date:
This is a business plan. It does not imply an offering of securities.
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Executive Summary We are students of BBA from UIU; under kind supervisor of sir Md. Ahsanullah started to work on new and innovative idea that has not been before in Bangladesh. As a step towards growing entrepreneurship in Bangladesh we will present our new and innovative idea in front of people which could benefit the job situation in Bangladesh and so that we could become job givers not job beggars. We have prepared report is based on “Business Plan on “Kinetic Company Ltd” namely Pepup Juice. To prepare this report we have followed marketing research methodology for whose are children and diabetic people. The information, on which the total business plan stands, was the collection of data from the questionnaire made by Kinetic Company Ltd. To see the market need and wants. The survey took place inside and outside of Dhaka. After analyzing questionnaires we made some plan about location, building source of finance, price, product promotion, and Channel of distribution. We selected our plant location at Ashulia, Gazipur and head office at Bashundhara City. So we will get the raw materials easily. We will introduce 500ml, and 200 ml sugarcane , Coconut water, Cocktail juices. We will keep the prices of our products relatively low than other soft drinks and fruit juice. We will place our advertisement at television & banner. We will distribute our product nearby shop of Dhaka city in the form of bottle packaging so that consumer can get it easily. The whole production process is in strict conformity with international standards, and constant research and development all products. We are confident that our products and services will satisfy the highest of standards. Our pricing policy will be reasonable and channel of distribution will be convenience. So our target customers will get it easily. We hope that we will carry a good and competitive market share in soft drinks industry. Pep-up Juice provided superior value to their customer who they promised throwing advertising. So the customer are loyal the pep-up Juice brand and build long term relationships. Though it is exist in our country, but there is a great potentiality in this sector. If we can able to flourish this
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sector by investing more, our national economy will be flourishing. As well as there are lot of people may earn from this sector and can increase their life style as well increase our GDP.
Vision and Mission statement:
Entrepreneur’s vision and mission for the company. Mission: Establish our brand Pep-up as the local leading source of healthy energy in the form of fresh juices with an uncompromising commitment to making a difference through our values. Vision: To fill the desire of taste and satisfaction. “What business are we in”? Our company is a beverage company. Initially we will produce only sugarcane juice and coconut water. In future our plan is to expand in juice variety. Already there are a lots of verities juice in market. Sugarcane juice and coconut water are also available but not everywhere and not in a commercial way. We will produce these two types of juice and also try to bring others fruit juice with a new taste and feature like ‘cocktail juice’ which will be a mixed taste of sugarcane and coconut water juice. That’s why our research and development department working on this. Values and principles on which the business stands: Values: Our product is unique. We will offer affordable prices. We will make maintaining your health easier for you.
Principles: We are very much concerned about Consumer care, Supplier care, Employee care, and Trade care. By satisfying our consumers who purchase our product, our supplier from those we collect our raw materials, our employee whose integrity, creativity and innovation make the final
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product , and trade Directors those who helps us to reach our ultimate consumers by many promotional activity. What makes the business unique? What is the source of its competitive advantage? Uniqueness: Our business uniqueness will be the uniqueness of our product and the high quality of our products that we will deliver. Competitive advantage: high quality unique fruit juice Other important features of our products are:
Our product price is affordable.
We will use minimum amount of Preservative.
Unique design in packaging of products.
We make a full utilization of our resources. As we have our own lands, it will be cost effective for us.
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About our Products: Our product will be delivered in tetra pack packaging. Sugarcane juice and Coconut Water is widely consumed in summer season because it is good in taste and low in cost. But problem is that the juice is sold at road-side in an un-hygienic atmosphere. So, health-conscious consumers though find it absolutely amazingly tasty, avoid this range of delicious drinks. Instead people of all ages take soft drinks and juices to quench their thirst. These are nutritionally not a good choice to quench thirst. So we have decided to launch a range of healthy juice alternatives. The brand name of our product range will be: SHORBOT. Because both types of juice are naturally sweet, so it can be sold with a little additional processing. The products will be sold in tetra pack is highly demanded by customers because it reduces the thirst and it is useful for healthy life because it is hygienic and pure. So when it is highly available at affordable price at everywhere customers will use fresh juice rather than soft drinks because it has no side effects and it is safe. Each type of our product has enormous health benefits and medicinal properties most of which remains unknown to the masses. For example: Sugar-cane juice: It has direct effect on digestive system and it contains healthy nutrients proved medically to strengthen the stomach, kidneys, heart, eyes, and brain and sex organs. The juice sucked from the sugarcane can prove highly valuable in case of weak teeth due to lack of proper exercise resulting from excessive use of soft foods. It gives a form of exercise to the teeth and makes them strong. It also keeps the teeth clean and increases their life. Coconut water: The water is one of the nature’s most refreshing drinks consumed worldwide for its nutritious and health benefiting properties. Coconut water is a very refreshing drink to beat tropical summer thirst. The juice is packed with simple sugar, electrolytes, and minerals to replenish hydration levels in the body. Research studies suggest that cytokinins (e.g., kinetin and trans-zeatin) in coconut water showed significant anti-ageing, anti-carcinogenic, and antithrombotic effects. The high potassium and low sodium content of coconut water has a nutrient profile shown to help lower high blood pressure. Coconut water contains a very good amount of electrolyte potassium. 100 ml of water has 250 mg of potassium and 105 mg of sodium.
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Together, these electrolytes help replenish electrolytes deficiency in the body due to diarrhea (loose stools). In addition, fresh coconut water has small amount of vitamin-C (ascorbic acid); provides about 2.4 mcg or 4% of RDA. Vitamin C is a water-soluble ant-oxidant.
Industry Environment
Over view of the industry: Our business is the part of fruit & vegetable industry of Bangladesh. Agriculture is the largest income and employment-generating sector of Bangladesh. About two third population of the country resides in rural areas and directly or indirectly depends on agriculture for their livelihood. The sector is an important source of demands for its products. Company Locations and Facilities We will select our industry location in Ashulia, Gazipur because we can collect most of our sugarcanes and Coconut from the north Bengal. The transportation system with north Bengal to Ashulia is very good. Potential customers Our potential customers will be every kind of individuals like:
Students at every level.(from school to universities)
Employees who work the entire day in hot and humid condition.
Households, passengers.
Patients
In summer season every kind of people with no age limit will consume this juice, because most of the people avoid unhygienic products. Initially we will only limit our geographical scope to Dhaka and then after initial success we will expand our target segments. We expect we will cover
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almost 30%-40% of Dhaka’s population which could be almost one million. We aspire that out of these 30%-40% we will capture 60%-70% of the market. Direct competitors: We don’t have direct competitors in our product however in substitute products we have mainly big companies like: Pran, Shezan, Akiz, Partex etc. Business opportunity: This is the business plan of a Directorship in the name of ‘Brand name of Product’. The plan is to process and market the high-quality sugarcane and coconut-water juice. First time in Bangladesh, juice will be preserved in tin pack keeping them as fresh as at time of extraction. Till now market deals in fresh fruit juices which can be readily preserved however this idea has not been catered yet. Collecting raw materials Sugar Cane: Bangladesh country is an agricultural country. In North Bengal the farmers produce a huge amount of sugarcane. Sugarcane is the only dependable cash crop in the low rainfall belt of the north-west and south-west parts of Bangladesh. Although sugarcane is grown in almost all the districts of the country, the principal growing areas are Chittagong, Comilla, Sylhet, Dhaka, Faridpur, Jamalpur, Kishoreganj, Tangail, Jessore, Kushtia, Bogra, Dinajpur, Pabna, Rajshahi, and Rangpur. Because it is an annual crop, sugarcane keeps the land occupied throughout the year. Consequently, some farmers are inclined to cultivate other profitable crop rather than sugarcane. This has resulted in a decline in crop acreage as well as the production of the commodity in recent years. The by-products obtained from sugarcane include rum, alcohol, fuel, bagasse, livestock feed, and from the stalk residue, paper and wallboard. So it is a great opportunity for us to collect our raw materials. 1st year we buy our raw materials from those farmer. On the other hand in that year we will lease 450-500 acres of land from the farmers and produce sugarcane in that land. Our sugarcane production will be increase if we grab the market.
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So, based on present statistics, we will motivate sugar-cane farmers to produce sugar-cane for our company throughout the year. We will buy sugar-cane directly from the farmers, so that they get their ‘just’ price for their raw-materials and so that we can receive fresh sugar-cane throughout the year. Sugarcane juice is widely used because of its sweet taste and being a solution to different health problems. The cost of production and raw material is not so much. It needs not to be marketed so much because it’s a new thing which people will try and love a lot. Simply we can place it in universities cafeterias, gourmet franchises and grocery shops, the only thing we must do is to ensure its shelf life and long time preservation time. Coconut Water: Coconut is one of the important nut crops in Bangladesh. It is mostly grown in the southern part of the country. Coconut is exported out of the country. Bangladesh is completely self sufficient in coconuts, with hundreds of thousands of nuts neglected and eventually discarded annually, a cheap supply is assured. We will lease the numerous large plantations (estates) that have fallen into neglect, where coconuts are growing and bearing anyway, will be resuscitated with the opportunity to sell to local markets. We will purchase coconuts directly from the farmers to provide them with their ‘deserved’ price. Collecting raw materials Bangladesh country is an agricultural country. In North Bengal the farmers produce a huge amount of sugarcane. Sugarcane is the only dependable cash crop in the low rainfall belt of the north-west and south-west parts of Bangladesh. Based on sugarcane, the sugar and gur industries of Bangladesh have developed in the country. Although sugarcane is grown in almost all the districts of the country, the principal growing areas are Chittagong, Comilla, Sylhet, Dhaka, Faridpur, Jamalpur, Kishoreganj, Tangail, Jessore, Kushtia, Bogra, Dinajpur, Pabna, Rajshahi, and Rangpur. Because it is an annual crop, sugarcane keeps the land occupied throughout the year. Consequently, some farmers are inclined to cultivate other profitable crop rather than sugarcane. This has resulted in a decline in crop acreage as well as the production of the commodity in recent years. The by-products obtained from sugarcane include rum, alcohol, fuel, bagasse, livestock feed, and from the stalk residue, paper and wallboard. So it is a great opportunity for
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us to collect our raw materials. 1st year we buy our raw materials from those farmer. On the other hand in that year we will lease 450-500 acres of land from the farmers and produce sugarcane in that land. Our sugarcane production will be increase if we grab the market. So, based on present statistics, we will motivate sugar-cane farmers to produce sugar-cane for our company throughout the year. We will buy sugar-cane directly from the farmers, so that they get their ‘just’ price for their raw-materials and so that we can receive fresh sugar-cane throughout the year. Company impact Sugarcane juice is widely used because of its sweet taste and being a solution to different health problems. The cost of production and raw material is not so much. It needs not to be marketed so much because it’s a new thing which people will try and love a lot. Simply we can place it in universities cafeterias, gourmet franchises and grocery shops, the only thing we must do is to ensure its shelf life and long time preservation time. Company strategy In first year, our company will market in Dhaka. Dhaka will be sole market for first year. Then looking through our sales history we will expand our business opportunities to other big cities of Bangladesh. More products that will be processed in same way and will be included in product line after making a good repute in the history. Machinery requirement-For Sugar cane Juice Production We use few kinds of machinery in our industry. Like crusher machine for crash sugarcane, filter machine for filter the crushed juice, labeling machine, can lid machine etc. Our plant capacity will be 3500-4000 Liters per day. For both the type of Juices, the main items are the aforementioned machetes and knives plus:
A refrigerated tank for fermentation / enzymatic control of water collection.
Micro filtration facilities complete with appropriate membranes for multi-stage filtration.
Control laboratory for batch testing and control.
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Equipment All the coconut water operations can be mechanized but will still require approximately six operators. Alternatively, manual labor may be employed instead, which will reduce initial investments but also probably compromise quality standards. The minimum equipment required will be: 1. Hand tools such as machetes, and paring knives for initial raw material preparation. 2. Coconut de-shelling machines or manual devices to crack open nuts. A machine is a first step towards ensuring a low contamination operation. 3. Stainless Steel buckets and other containers for collecting / inspection of water and flash. 5. Press(es) for juice extraction. Choice of screw, flat or roller press will be determined by the scale of our company’s production and operational considerations. 6. Packaging machines as determined by format choices i.e. cans or bottles or plastic tetra-packs complete with labeling capability. The same packaging equipment will be Sugar-cane Juice Production. We will use the waste proct husks from both the Coconuts and Sugarcane in packaging. This will be very much cost-effective. 7. Wheelbarrows, spades and buckets for disposing of debris. 8. Electrical water pump and hoses for cleanup and maintenance. 9. Small 5Kva 110/220v AC Generator to power the equipment through blackout periods to finish a run. The generator is just to finish the run, but not for continuous operation.
Process of Manufacture of Sugar-cane Juice: Sugarcane processing focuses on the production of cane sugar (sucrose) from sugarcane. After sugar cane has been harvested it must be processed within less than 24 hours to avoid sugar loss by inversion to glucose and fructose. The cane is received at the mill and prepared for extraction of the juice. At the mill, the cane is mechanically unloaded, placed in a large pile, and, prior to milling, the cane is cleaned. The milling process occurs in two steps: breaking the hard structure of the cane and grinding the cane.
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The cane is first washed to remove mud and debris. Then the cane is chopped and shredded in huge roller mills for extracting the juice. About 93% of the juice is extracted. The spent cane, called bagasse is either used as fuel, as raw material for paper or hardboard, or as insulating material. We will use this ‘bagasse’ as well as the husks of coconuts in the production of tetrapacks for our packaging. Fresh, juicy and fully mature sugarcane, which is free from insect and fungal attack or any other blemish, is taken for extracting the juice. The juice so obtained is clarified and filtered to get a clear solution. Required quantities of permitted preservatives, additives and flavours are added. The process should be carried out under hygienic conditions. The sugarcane juice beverage is stored in 200 mL bottles and crown corked. The bottles and crown cork closures should conform to ISO standards. Production technology is available from CFTRI, Mysore. The main production process for sugarcane juice can be summarized into:
Sugarcane Processing
Production Process
Cane Sugar Process (Milling)
Processing Traditionally
Sugarcane Juice Processing
Ultra filtration of sugarcane juice: studies on membrane fouling
Packaging development
Packaging of Sugarcane Juice: The sugarcane juice will be preserved and packed in tetra packs and bottle which has a good storage life and is available during off-season also. Aseptic package not only protects the product but also will maintain the quality of the product. Aseptic packaging systems have played a vital role in providing people all over the world with essential nourishment. Fresh sugarcane juice packed under hygienic conditions will be available on the shelf. To protect the intellectual rights of the production process of our products we will make patents on:
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Method of Extraction of Juice from Sugarcane
Method for producing Sugarcane juice and Coconut Water
Method for producing stable sugarcane juice and Coconut Water
Juice spread and a Process for preparing the same
Process for preparing ready-to-drink shelf stable sugarcane and coconut water juice beverage
Diffusion apparatus
Company goals and Objective: A. Goal: Our main goal is to achieve customer believe by providing 100% pure juice and by quality assurance. Apart from this our Operational goal is To find new customer. To retain existing customer. To increase the market share by 5% every year. To increase the total retail customer by around 10%. And our Functional goal is To increase the revenue by 15% every year. Make the cash flow very smooth. Business strategy: A. Desired image and position in the market.
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We are new in the market. That’s why in the market and also in customer mind there is no image of our product. We make a logo, tag line and also vision & mission statement. We are planning to do a attractive promotional activity. B. SWOT Analysis : 1. Strengths: Updated technology plant. Quality product. We have a first mover advantage. Totally Bangladeshi made. Reasonable price. We have low overheads. We can minimize our cost by selling by product or wastage. 2. Weaknesses: New in this market. Small distribution network. Strong competitors. No market share. Limited experience of customers. Low reputation. Unreliable cash flow in the early stages. 3. Opportunities: Increase the distribution network. Acquiring the new technology. Big & attractive market. Take over the distributor. We can export our product to foreign country. Increased demand. Business sector is expanding. Government wants to encourage local businesses. 4. Threats:
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Political instability. Governmental regulation. Competitor can produce the same product. Downward pressure on pricing. New innivation from other comprtitors could be a threat. C. Competitive strategy. 1. Cost leadership: We buy raw materials in bulk because there is no chance to damage of products. After than we produce juice and sell. Then we are able to achieve economies of scale. That’s why our production cost will be lower. We also use our byproduct baggase from sugarcane and coconut husks in Packaging which will minimize our cost. 2. Differentiation: Sugarcane juice and Coconut water are not in the market in a commercial way. It is locally available but not in a different flavor. We bring sugarcane juice in a four new flavor which is pudina, ginger, tulsi, lemon. And coconut water in a tetra packs. 3. Focus: Apart from cost leadership and differentiation our focus will be “how to more and more distinctive appreciable way we provide service to our customer. How we present our product to customer comparatively in a unique way.
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COMPANY PRODUCTS AND SERVICES: A . DESCRIPTION:
Coconut Water Coconut water's nutritional benefits - low in calories and packed with electrolytes, potassium, and other essential vitamins and minerals - also will make it a quick favorite among the celebrity set. Our company will attract investments and endorsements from some of the most renowned celebrities. Coconut husks were one of the first commercially-important components of coconuts. The fibers are used for car seat fillings. The coconut meat is also a popular ingredient of foods such as
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baked goods and candy bars and coconut oil is also desired for foods and personal care items. However, coconut water was a by-product in processing these coconut ingredients. I Sugarcane Juice The sugarcane juice preserved and packed in tetra packs and bottle has a good storage life and is available during off-season also. The juice is available in many flavors including classic plain, mint, ginger, lemonade, pepper, sweet & salt etc. Sugarcane juice is a high-energy drink that is natural, sweet and is a healthy alternative to refined sugar added drinks. It quickly replaces lost energy in the most arduous of circumstances. 1. Product feature : 100% fruit juice. No added sugars, preservatives or colorants. High in nutrition. Naturally low in fat. Cholesterol-free. Ideal for a healthy lifestyle. Pasteurized to guarantee quality. Available in four variety of great tasting flavors 2. Customer health benefits :
a.
Customer benefits of Sugarcane juice :
Health benefit: Sugarcane juice is great for recharging energy because it contains rich carbohydrate and iron. It strengthens the stomach, kidneys, heart, eyes, and brain and sex organs. The juice is beneficial in fevers. When there is a great protein loss, sugarcane juice supplies the body with necessary protein and other food elements. It keeps the urinary flow clear and helps the kidneys to perform their functions smoothly. Sugarcane is very useful in scanty urination. It keeps the urinary flow clear and helps the kidneys to perform their functions properly.
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It is also valuable in burning maturation due to high acidity, gonorrhea, enlarged prostate, cystitis and nephritis. For better results, it should be mixed with lime juice, ginger juice and coconut water. It hydrates the body quickly when exposed to prolong heat and physical activity. The juice keeps the teeth clean and increases their life. Sugarcane juice is a fattening food. It is thus an effective remedy for thinness. Rapid gain in weight can be achieved by its regular use. The dew which collects on the long leaves of sugarcane is useful in several eye disorders. When instilled in the eyes, it is an effective medicine in defective vision, cataract, and conjunctivitis, burning of the eyes and eye-strain after excessive reading.
For whom Sugar cane juice suits best? Sugar cane juice is ideal for those: who often suffer from burning sensation all over the body. who suffer from burning sensation when urinating. Who are tired due to excess sun exposure, during summer?
When to take Sugar cane juice? The best time to take sugar cane juice is the afternoon. It is better to avoid it during night. B. CUSTOMER BENEFIT OF COCONUT WATER:
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Advantages to investing in this industry:
Good average returns on investment over the life of the project.
Recovery of investment less than 2 years for coconut water operation and 5 years for
Coconut cream production.
Year round availability of cheap raw materials.
Low-cost of commercial electricity in the country.
With the use of appropriate machinery, the labor involved is not expensive, as it is mostly unskilled and widely available.
There are additional government incentives for agro-processing operations.
Either of these operations is a viable project on its own, but will benefit from synergies of production if the investment is made for both operations.
A combination factory operation can be set up for as little as Tk………... A full feasibility study will be required prior to startup to determine actual startup costs, working capital and financing requirements.
Health benefit : Coconut water is a very refreshing drink to beat tropical summer thirst. The juice is packed with simple sugar, electrolytes, and minerals to replenish hydration levels in the body. Coconut water showed significant anti-ageing, anti-carcinogenic, and anti-thrombotic effects. Coconut water has been generally offered to patients with diarrhea in many tropic regions to replace fluid loss from the gastrointestinal tract and reduce the need for intravenous therapy.
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Coconut water is composed of many naturally occurring bioactive enzymes such as acid phosphates, catalyses, dehydrogenises, diastase, peroxides’, RNA polymerases etc. Altogether, these enzymes aid in digestion and metabolism. Despite very light consistency, its water has much better composition of minerals like calcium, iron, manganese, magnesium, and zinc than some of fruits like oranges. Its water is also a very good source of B-complex vitamins such as riboflavin, niacin, thiamin, pyridoxine, and folates. These vitamins are essential in the sense that body requires them from external sources to replenish. Coconut water contains a very good amount of electrolyte potassium. 100 ml of water has 250 mg of potassium and 105 mg of sodium. Together, these electrolytes help replenish electrolytes deficiency in the body due to diarrhea (loose stools). In addition, fresh coconut water has small amount of vitamin-C (ascorbic acid); provides about 2.4 mcg or 4% of RDA. Vitamin C is a water-soluble ant-oxidant. Very important points are: Coconut water helps you lose fat. Coconut water can help prevent diabetes. Coconut water can aid digestion. 3. Uniqueness: Our product is unique in case of packaging and its different taste. Other company’s also said that their product have a different taste but in reality they actually sell only that fruit juice but we blend some extra ingredient with our core product and make a unique taste full juice. B. Patent or trademark protection: We have not yet make a plan of trademark protection of our product. After making a strong impression in customers mind about our product we will think about trademark or patent. D. Costs &Price Structure:
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PRODUCT NAME
RAW MATERIAL COST
MARKETING COST
DIRECT/INDIRECT COST OF PRODUCTION
PRODUCTION CAPACITY PER ANNUM
SELLING PRICE/UNIT
RETAIL PRICE
Sugarcane Juice (500 ml)
9.50
2.50
6.00
100000 Pcs
28.00
30.00
Sugarcane Juice (200 ml) Coconut Juice (500 ml) Coconut Juice (200 ml)
7.00
1.25
3.75
200000 Pcs
20.00
22.00
10.50
2.50
7.25
100000 Pcs
33.00
35.00
7.50
1.00
4.00
200000 Pcs
20.00
22
1. Key suppliers: We collect sugarcane and coconut from two district. Rajbari and Faridpur. In this two district sugarcane and coconut are produce in a large amount and it will fulfill our demand. When demand will high then we collect this from Kushtia and Jessore. D. Future product or service offering: After operating three years in this business we will expand our juice category. Next we will introduce to customer Berry (jam) juice, Carambola (kamranga) juice, and Latka (lotkon) juice. After this we will produce jelly and achar of different fruit. Marketing strategy : The marketing strategy is based on positioning of product in the mind of consumers. Positioning statement: For every individual, who wants a 100% natural product that offers rejuvenation and freshness, our juice is a packaged drink that provides energy and refreshment at affordable price, best quality and value for your money. A. Target market: Our main target market people are the young ages people who like to drink juice very much, mostly the school going students and the children. Beside that we also focus the
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young generation people. Although our main target market is young people but we also prefer the people of adult and old ages people. Here is a Demographic segmentation: Age
14-30
Gender Family size Family life cycle Income Occupation Education Religion Nationality
Male, Female 1-2, 3-4, 5+ Married & Unmarried Rs. 10000+ From middle class to upper class Schools, Colleges, Universities All religious people Bangladeshi
Geographic Segmentation: World region Country Cities Density Climate
Asia Bangladeshi Dhaka Urban Hot & Dry
Psychographic Segmentation: Social class Lifestyle
Middle class & Upper class Health conscious. Consumer who have inclination towards nature and natural product. Quality conscious consumer. Consumer who have diverse taste and seek variety.
Behavioral segmentation: Occasions Benefits
Parties, Birthdays, Sports & regular occasions Quality & Taste
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Readiness stage Aware & Interested
B. Customers motivation to buy: Motivation results from the interactions among conscious and unconscious factors such as the (1) intensity of desirer need (2) incentive or reward value of the goal, and (3) expectations of the individual and of his or her significant others. Customer like sugarcane juice and coconut water very much. For the first time this juices are coming into the market with attractive packaging and different taste. Obviously they will try it to match their desire with our juice. Reasonable price is another factor. C. Market size and trends: To determine the market size and trends we have to identify how large is the market and is it growing or shrinking and how fast. Before making this business plan we make a survey. And our survey report shows that in market there is a huge demand of sugarcane juice and coconut water. Many people now prefer sugarcane juice and coconut water specially in summer season. During this Ramadan month many people drink these juices in iftar. So market size is large and very fast it is growing. D. Advertising and promotion: Our main objective to make awareness and provide knowledge to customer about our product. 1. Media used: However we introduce our product only in Dhaka city. That’s why our promotional and advertising strategy will based on that. We use only Billboards. Radio channels. Newspaper After passing some months then we will go to TV advertisement.
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2. Media cost : Approximate Rs. 2,500,000 3. Plans for generating publicity: We have a plan to provide a sponsorship in some athletics game. We also make a campaign facility in some different places to provide sugarcane juice and coconut water at a free cost and only for first time.
F. Distribution strategy: 1. Channels of distribution used :
2. Sales techniques and incentives: At first we make our product available in all schools,
colleges, and university canteens. Also we sell this product through many restaurants and hotels. And specific retail shop on demand. After then we make it available in every retail store.
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Competitor analysis: A. Existing competitors: Our existing competitors are the roadside shopkeepers who make the sugarcane juice instantly or sell the coconut water. In case of sugarcane juice and coconut water they are our competitor. Their strengths are: They can produce juice instantly. Already popular or known to all customer. Almost available everywhere. Sell 1 glass sugarcane juice at a price of 10 taka & coconut water at 25-30 taka. They can shift their stall from place to place. Very low operating cost. They don’t need extra labor. They don’t have to pay factory cost and overhead cost. Their weaknesses are: Make juice in a very unhygienic place. Don’t maintain quality and quantity. Have no security or fixed place to operate the business. B. Potential competitors : Already there are many juice companies in the market. The direct competitors of our product are: Pran. Rasna. Shezan. Frutika. Fruto.
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Already they have a large market share and good image on customer mind. So if they enter into the market with the same product our product might face serious problem. We might lose market share at a large portion. Or customer can be de-motivated from our product. But we are not competing our product with them because they are the competitors of the Juice market and they are only providing the different flavor juices but not the sugarcane juice. Indirect competitor: As the Sugarcane juice is the symbol of the refreshment and nutrition and it is also a substitute for the other soft drinks. So we have compared it with other soft drinks. So in the soft drink market we have the competitors like Coca cola. 0 PEPSI. And other Instant drinks Location: As it is a manufacturing company the manufacturing industry will be established in Ashulia industrial area. The Head office and sales center will be located in a posh business area in Dhaka city. It is located in the Bashudhara City, level 1. Bashundhara City is a place where each type of products are available. It is the home to various office complexes, retail shops, restaurants and a large up scaling shopping mall. This business centre serves the 20000 people who live and work in this area. The area draws approximately 8 million visitors annually. This location offers our business the benefits of high consumer traffic. Currently there are 2000 or more square feet available for lease. The lease rate is BDT 10000 per square foot. We will seek two year lease with an additional four tear option. The location of Company X is indicated on the accompanying map. The close proximity to Bashundhara City, the large shopping mall, places Company X in a high traffic retail area, conductive to walk-in-traffic.
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Figure: Location of Kinetic Company Ltd at Bashundhara City
Market Strategy Several strategies could be implemented to establish a credible presence in the market For our juice product. These will include marketing and advertising campaigns to develop local awareness and education for both sugar-cane juice and coconut-water drink. Pricing considerations should include:
Selling at factory location at distributor / wholesale prices.
Selling to grocery stores at wholesale prices and selling bottled water to existing water nut vendors at a distributor’s price that allows them a good profit.
Offering delivery to the dealers like the other competing drinks manufacturers.
Penetrating groceries with a larger can/package offering more value for money to provide real competition.
Basic research shows that many consumers would welcome a smaller but cheaper quantity in either a can or pouch.
Developing special niches for special products, such as sports rejuvenation, medical and nutritional items.
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Building A very simple building designed along factory production lines allowing for smooth transitioning of raw materials into completed products. The actual layout of the building will depend on the machinery chosen and the processes involved. E.g. packaging equipment varies widely in their requirements depending on the package format, cans and bottles requiring significantly greater storage and operational space than tetra-packs. A location of at least 112sq.m. (1200sq.ft) (30’x40’) will be required. Electrical supply The building should be wired appropriately to provide power for the equipment, most of which are designed to operate on 220v AC. Certified electrical contractors will employed to install appropriate supply wiring based on the needs of the operation. Fortunately many qualified, skilled but unemployed personnel are available in our country.
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StoreS
Store House
Distribution Centre
CMO’s Room
Distribution Centre
(Sugarcane Juice) Distribution Centre
(Cocktail Juice)
Entrance Passage
(Coconut
Managers’
Juice Bar
Sales Executives
Reception
Fig: Layout of the office of the Kinetic Juice Company
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Form of Ownership The form of the business is “Limited Company” business and all the directors are responsible for the business. The Directors are jointly and severally liable for all debts of the firm. Company X is established with 6 directors initially. Each director has their own particular designation in the company. Our company is flat organization. Extract of Memorandum of Association and Articles of Association: THIS IS MADE ON September 01, 2012 by and among,
Mohammad Saoban
Ismat Jerin Chetona
M-08, Merul, Badda, Dhaka-1212
123/4, Shyamoli, Dhaka
Cell: 01977252535
Cell: 01683613219
e-mail:
[email protected]
e-mail:
[email protected]
Quazi Tamim Ahmad
Kazi Razzak Hossain
23/C, Mirpur-10, Dhaka
34-b, Mohammadpur, Dhaka
Cell: 01674927958
Cell: 01681577038
e-mail:
[email protected]
e-mail:
[email protected]
Mahadi Hossain
Vincent Mabi D Costa
34/D, Mohammadpur, Dhaka
56/GA, Mohammadpur, Dhaka
Cell: 01670600223
Cell: 0101678712274
e-mail:
[email protected]
e-mail:
[email protected]
WHEREAS the above named directors have decided to start the business of Food and Beverage in the name and style of Kinetic Company Ltd. with effect from September 01, 2012 on the terms and conditions hereinafter mentioned and have desired to reduce the terms and conditions into writing after legal registration and incorporation in Joint Stock Company of Bangladesh.
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NOW THIS INDENTURE IS WITNESSETH AS FOLLOWS:
1. THAT the DIRECTORS referred above shall carry on the business of Juice under the name and style of hereinafter referred to as the Kinetic Company, Limited , But by their mutual consent may start and carry on any other business or businesses under any other name or names at any other place or places. 2. THAT the business shall be deemed to have commenced with effect from …1st day of September, 2012 3. That the capital required for the business shall be contributed time to time by the PARTIES in such manner in all respect as may be agreed to between them and such capital may be paid interest as may be mutually agreed from time to time at the rate of rates not exceeding 12% (Twelve Percent) per annum. 4. That all the PARTIES referred above shall be Working Directors and shall attend diligently to the business of the Directorship and carry on the same for the greatest advantage of the Firm. 5. That all the WORKING DIRECTORS may be paid Salary w.e.f. 1st October, 2012, for the work of the FIRM as may be agreed mutually from time to time between the PARTIES in accordance with the provisions of the Income Tax Laws as well as business necessities and other factors, subject however, that the monthly Salary to each such Director shall not exceed as under: NAME OF WORKING DIRECTOR MAXIMUM BASIC SALARY NOT TO EXCEED 1. Mohammad Saoban TK 25000 2. Ismat Jerin Chetona TK 25000 3. Quazi Tamim Ahmed TK 25000 4. Kazi Razzak Hossain TK 25000 5. Mahadi Ahmad TK 25000 6. Vincent Mabi D Costa TK 25000 6. That all business expenses shall be borne by the company. 7. That the retained profit, as the case may be, of the Directorship business shall be divided among the Directors as under:
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NAME OF WORKING DIRECTOR
SHARE OF PROFIT & LOSS
1. Mohammad Saoban
25%
2. Ismat Jerin Chetona
15%
3. Quazi Tamim Ahmad
25%
4. Kazi Razzak Hossain
15%
5. Mahadi Hasan
10%
6. Vincent Mabi D Costa
10%
8. That the duration of the DIRECTORSHIP shall be at WILL subject to Clause „9. 9. That any Director may retire from Directorship after giving a notice to the other Director (s) of not less than one month in writing and at the expiry of such notice period he shall be deemed to have retired. 10. Upon mutual understanding, each Director or his duly authorized agent shall have free access to the account books of the Directorship and shall be entitled to take copies or extracts from any or all such books and records of the Directorship Business. 11. That no Director shall have the right to sell, mortgage or transfer his share of interest in the FIRM to anyone else except to his heir or heirs or any one of the existing Directors or to their heir (s). In the event of heir (s) selling his/her share to anyone else, the existing Directors shall have a right or pre-emotion in respect of such share (s) sold. 12. That the Directors shall keep or cause to be kept the books of account of the FIRM at the principal places of its business and make all entries therein, and that all such books of account kept shall be closed on 31st March every year or in the case of any necessity on any other date as the Directors may mutually decide. 13. That no Director shall do any act or thing whereby FIRM or the FIRM property may be prejudicially effected.
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14. That the terms of the Directorship Deed may be altered, added to or cancelled by the written consent of the Parties to this DEED. 15. That the Directors can open the bank account of the firm, in any bank and bank account shall be operated by the Directors jointly or individually, as the case may be. 16. That the Directors shall not take any loan from any person/Financing Company, bank or any
other Govt./Pvt. Department in any case, without the written consent of each other. 17. That in the case of any dispute arising out of this DEED between the Parties of this DEED; it shall be decided by Arbitration as provided for under the Indian Arbitration Act. IN WITNESS WHEREOF the Parties hereto have set and subscribed their respective hands to these presents the day, month and year first written above.
WITNESSES OF THE DIRECTORS AGREEMENT: 1. Mohammad Saoban
-
Saifur Rahman
2. Ismat Jerin Chetona
-
Popy Christina Biswas
3. Quazi Tamim Ahmed
-
Ahsan Ahmed
4. Kazi Razzak Hossain
-
Shoebur Rahman
5. Mahadi Hasan
-
Rajib Ahmed
6. Vincent Mabi D Costa
-
Rakib Ahmed
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SIGNATURE OF DIRECTORS 1. Mohammad Saoban
………………………… ……
2. Ismat Jerin Chetona
………………………… ……
3. Quazi Tamim Ahmed
………………………… ……
4. Kazi Razzak Hossain
………………………… ……
5. Mahadi Hasan
………………………… ……
6. Vincent Mabi D Costa
………………………… ……
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PLAN OF OPERATION:
Key management personnel 4 important departments will be there: Purchasing and logistics Mr. Saoban with one assistant (employee) will be responsible for all operating materials purchases at best possible rates and delivering at the appropriate time, use of just in time inventory. Production and Financial operations Miss Ismat Jerin Chetona will be responsible for qualify production process. He will also be responsible for financial records and accounting. Md. Yusuf Raihan needs the following staff at the plant in the process. Marketing Mr. Tamim is our marketing researcher. He with the assistance of Mabi is responsible to design promotional campaigns and do art work for advertisement. Their main task is to work in celebration with sales department to create demand opportunities and find out new market segments. Warehouse Management and sales Mr. Mehedi and Rajib will be responsible for managing finished goods inventory in Dhaka Warehouse and office and to go generate sales per decided and approved credit terms from financial department.
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Figure: Organogram of Kinetic Company Ltd.
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Financial Forecast:
FIXED COST OF THE PROJECT SL. NO.
DESCRIPTION OF ITEMS
AMOUNT
1
Land & Land Development
10,000,000
2
Building and Plant Development
30,000,000
3
Cost of Machinaries(Including Import Duties)
25,000,000
4
Import Duty, VAT, Insurance, PSI fee, Clearance,
5
Local Transport etc 10% of Imported Machineries Cost of Erection of Machineries, (Expert, Engineer,
6
Trainer 4 Persons) as per Annexure Cost of 500KVA Giesel Generating Set
1,000,000
7
Cost of Local Equipment
5,000,000
8
Cost of Vehicle & Transport
5,000,000
9
Cost of Office Equipment
260,000
10
Documentation, registration, mortgage, project
260,000
11
examination fee Preliiminary & Startup Expense
1,000,000
12
Contingency
2,000,000
Total Fixed Cost of the Project =
1,000,000 30,000,000
110,520,000
WORKING CAPITAL OF THE PROJECT
39,480,000
TOTAL COST OF THE PROJECT
150,000,000
MEANS OF FINANCE
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Head of Finance
Total Amount in Tk.
Bank Loan
Tk.90,000,000
Owners' Equity
Tk.60,000,000
Total (Debt + Equity) =
Tk.150,000,000
Debt : Equity Ratio(60:40)
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Kinetic Company Limited Pro-forma Income Statement For the year Ended on 30th June, 2012 Taka Net Sales Beginning Inventory Add: purchase freight in
Less: Ending Inventory
11,500,000 .00 350,00 0.00 11,850,000 .00 1,704,500 .00
Total COGS Gross Profit Less: operating Expenses Advertising Maintenance Salaries & Wages Building Rent Repairs Depreciation (Land & Building)
Taka 25,500,00 0.00
10,145,500 .00 15,354,50 0.00
2,900,000 .00 30,00 0.00 1,090,000 .00 1,660,000 .00 815,00 0.00 150,00 0.00
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Depreciation( machine) Office Expenses Miscellaneous Professional fees Telephone Utilities marketing Van Packaging Cost Total Operating Expenses
163,40 0.00 50,00 0.00 90,00 0.00 170,00 0.00 90,00 0.00 99,00 0.00 160,00 0.00 2,300,000 .00
Operating Profit Less: interest Expense Net Profit before Taxes Less: Tax (40%) Net Income
9,767,4 00.00 5,587,10 0.00 5,330,200 .00 256,90 0.00 102,76 0.00 154,1 40.00
Kinetic Company Limited Cash Flow Projections For the year Ended on 30th June, 2012 Taka Cash flow from Operating activities: 154,1 Net Income 40.00
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Adjustment to reconcile act income to net cash: add: Depreciation/ Ammortization Loss on sale of equipment Decrease in prepaid expense Increase in accrued expenses payable Less:Increase in account receivables Increase in Inventories Decrease in Accounts payable Net cash provided by Operating Activities Cash flow from investing activities: Add: Sales of Plant asssets Investments Less: Purchase of equipment Purchases of land Purchases of Building Net cash used by investing activities
325,00 0.00 110,00 0.00 200,00 0.00 54,00 0.00 (280,00 0.00) (95,00 0.00) (65,00 0.00)
403, 140.00
95,00 0.00 500,00 0.00 (230,00 0.00) (2,600,000 .00) (1,063,000 .00)
(3,298,0 00.00)
Cash flow from financing activities: Add: common stock less: paid of cash cash dividend redemption of bond
-
(85,00 0.00) -
net cash used by financing activities
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(85,00 0.00)
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(2,979,86 0.00) 110,000,00 0.00 104,040,2 80.00
net cash decreases in during year add: Opening cash balance Cash of the end of the year Kinetic Company limited Proforma Balance Sheet As on 30th June 2012 Liabilities Current liabilities: Account payable Supplier Tax payable Notes payable Accrued payable
Taka 480,0 00.00 805,4 00.00 105,9 40.00 935,0 00.00 473,0 00.00
Assets Current assets: Cash & cash equivalents
Taka
Market securities
47,500,00 0.00 1,704,50 0.00 6,553,00 0.00 1,300,85 0.00 8,900,00 0.00 8,500,00 0.00
Total current assets
74,458,3 50.00
Inventories Bank Account Recv. Prepaid expenses
Long-term Liabilities Bank loan Reserve Fund
Owner's equity Saoban 2,75,00,000 Chetona 1,65,00,000 Tamim 2,75,00,000 Vincent
34,669,8 00.00 1,385,0 00.00
Fixed assets: Land & building Machinery & equipment Freezer Furniture & fixture
19,494,96 5.00 43,500,00 0.00 2,526,50 0.00 1,854,32
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1,65,00,000 Razzak 1,10,00,000 Mahadi 1,10,00,000
Staff vechicle
5.00 1,125,00 0.00 3,500,00 0.00 2,395,00 0.00
Total Assets
148,854,14 0.00
Computer Cover van
Total owner's equity Total Liabilities
110,000,0 00.00 148,854,1 40.00
BREAK EVEN ANALYSIS
Kinetic Company Limited Break even analysis for the year ended 30th June 2012
Fixed Cost
TK
Computer
1,125,000.0 0
Cover van
3,500,000.0 0
Variable Cost
Raw materials
TK
10,145,500.00
720,000.00
Factory overhead cost Miscellaneous expenses
550,000.00
Salaries & wages
1,090,000.00
Gas generator
1,450,000.0 0
Marketing van
160,000.00
Staff vehicles
2,395,000.0 0
Utility bill
99,000.00
Furniture & fixture
1,854,925.0 0
Advertisement
2,900,000.00
Freezer
2,526,500.0 0
Packing cost
2,300,000.00
Air condition Photocopy mechine
80,000.00 90,000.00
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Land & building
5,094,965.0 0
Telephone bill
90,000.00
Total fixed cost
19,216,390.00
Total Variable Cost
16,954,500.00
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