business plan village based banana processing project
DESCRIPTION
Village-Based Banana Processing ProjectTRANSCRIPT
INTRODUCTION
Project Rationale
The project is envisioned to create a program for the farmer, non
working house wifes in the locality of village by expanding the irrigable area
for a regular and continuous production schedules among the farmers in the
village.
The project will be constructed in Barangay Palusapis Science City of
Muñoz, Nueva Ecija, where 90% of its residents are rice farmer and where
30% of village lands are planted of banana trees.
The project aims to have banana processing facilities for the farmer
and non working housewife of the Barangay. Project helps the village and
can be known as the one of the mango and banana processing in the Nueva
Ecija.
The increased economic activities in the village will necessitate the
employment of 50-60% of its residents who are non-working housewife and
farmer.
Primarily, this project will fund of Local Government Unit. This project
requires about Php.4,500,00.00 to construct the necessary features and
equipment.
1
The existence of a Barangay’s Officials shall help to facilitate the
maintenance, management and operations of the Project.
2
MARKETIG ASPECT
There is no doubt that the market of tilapia fingerlings remains bright.
Banana, being as popular as an economic in agriculture is faced with
problems and sufficient supply and quality fruit. Most of banana farm in
Central Luzon just to scout quality source banana. In Nueva Ecija, the
demand and supply gap remained unfilled.
A.Market Assessment
Demand and Supply Analysis
Banana is one of the most common and widely grown fruit
crops in the Philippines. It is also one of the country’s major
dollar earners, and has consistently ranked next to coconut oil
and prawns in terms of value earnings during the last five years.
Banana has various uses. The ripe fruit is pureed, candied,
and preserved in various forms when not eaten fresh. Its extract
is used in the manufacture of catsup, vinegar,and wine. The
unripe fruit is powdered and chipped.
In rural areas, the young leaves are pounded to suppress
bleeding and treat wounds. The leaves are also widely used as
packing materials for fruits and vegetables in market centers.
3
Banana fiber is manufactured into rope, sack, and mat. Sheets of
paper and paper boards are also made from banana peel.
Banana blossom is exported dried.
Competitor Analysis
Philippine is one of the world’s largest banana exporters.
Large contiguous areas are devoted for commercial production in
four provinces in Mindanao, namely Davao del Norte, Davao del
Sur, South Cotabato, and Misamis Oriental.
Consumer/Client Analysis
Target consumer will be children and old, who was a good
buyer, that can make bought a banana product like chips, catsup
and jam and other more products came from the processing
project.
B.Marketing Program
The proposed project marketing program are composed of
Product Feature/Design, Pricing Scheme, Promotion and Advertisement
Strategy, Product Distribution Strategies, and Target Market Share and
Profit Objectives
Product Feature/Design
4
The proposed project will feature the banana products like
Banana puree, Banana Chips and Banana jam.
Pricing Scheme
The proposed project will classify its product based on the
sizes (small, medium and large). All transaction shall be done on
“cash on pickup” basis or “cash on delivery” basis. These sizes
will be sold as follows:
Size of Banana Puree Price per Piece25g Php. 2050g Php. 35100g Php. 65
Size of Banana Chips Price per Piece25g Php. 1050g Php. 17100g Php. 30
Size of Banana Jam Price per Piece250ml Php. 85500ml Php. 120
Promotion and Advertisement Strategies
Marketable size of banana products will be packed using
transparent or durable plastic packs and glass bottle. The
finished product will put in box to prevent the accidents in
transportation of finish product safely.
Product Distribution Strategies
5
The proposed project will primarily serve the banana
products requirement of Banana Growers Cooperative of Science
City Munoz farmer-members. Any production excesses will be
sold to non-coop members. Job orders will be accept accepted in
a case basis, depending on the availability of disposable banana.
Target Market Share and Profit Objectives
The proposed project target the market share at 30%
supply in municipality market in Nueva Ecija and 5% supply in
nationwide market in Philippines.
TECHNICAL ASPECT
6
Strictly, the project will comply with recommended to techno guide for
modern banana processing operation. To ensure operational effectiveness,
the support agencies (BAS, PhilMech) and/or consultant(s) will be tapped
from time to time for such purpose.
Plant/Farm Description
The proposed project is developmental-oriented for the
Municipality of Science City of Munoz, Nueva Ecija, envisioned to
produce banana by-products and to help the banana growers of
Science City of Munoz. The project put in Brgy Palusapis Science
City of Munoz near at the large population of the banana
growers.
The main row material of proposed project is banana.
Banana has Dietary fiber, fats, protein, vitamin A, Calcium,
Vitamin C, Iron and Calories good for the human.
Production Schedule
7
The proposed project produces a Banana product (Puree, Jam
and Chips). The banana chip are producing every day, banana puree
are produce thrice a week and the banana jam produce twice a week.
Target Volume Yearly2013 2014 2015 2016 2017 2018
Puree
8640 9072 9525.6
10001.88
10501.97
11027.07
chips
10080 10584
11113.2
11668.86
12252.3
12864.92
jam 12960 13608
14288.4
15002.82
15752.96
16540.61
Production Process (es)
8
Banana Puree
Banana Chips
9
Recieving/ Sorting Washing Sanitizing Peeling
SlicingTreatmentCookingBottling
Sealing Storing
Banana Jam
Fixed Assets and Facilities
10
Recieving/ Sorting Washing Sanitizing Peeling
SlicingTreatmentSoakingSweating
Frying Quality Control Sealing Storing
Recieving/ Sorting Washing Sanitizing Peeling
SlicingTreatmentSweatingCooking
Bottling Quality Control Sealing Storing
The proposed projects have a fixed assets and facilities like
buildings, delivery car, land, office equipment and processing
equipment and facilities.
Raw Materials and Other Key Inputs
The main row material of proposed project is banana. Banana
has Dietary fiber, fats, protein, vitamin A, Calcium, Vitamin C, Iron and
Calories good for the human.
Waste Disposal System
The proposed project waste material can be decomposed. It can
be use for organic fertilizer making and it can useful for banana
growers member of the Science City of Munoz.
ORGANIZATION AND MANAGEMENT ASPECT
11
Management during the Operating Period
Types of Organization
The proposed project will be held be held by a C.E.O. or
Manager who will be acting as the banana inspector. Under the
supervision of manager will be 0ne (1) accountant, one (1)
salesman, one (1) equipment maintainer-operator and one (2)
Production ire/researcher
Organizational Set-up
Job Description and Job Specification
Chief Executive Officer. The highest ranking executive in a
company whose main responsibilities include developing and
implementing high-level strategies, making major corporate
decisions, managing the overall operations and resources of a
company, and acting as the main point of communication
between the board of directors and the corporate operations. The
12
Chief Executive Officer or Manager
Sales/SellerProduction/ResearcherFinance/Accountant
Equipment Maintainer Workers
BAS PhilMech
CEO will often have a position on the board, and in some cases is
even the chair.
Finance/Accountant. An accountant is a practitioner of
accountancy or accounting, which is the measurement,
disclosure or provision of assurance about financial information
that helps managers, investors, tax authorities and others make
decisions about allocating resources.
Production/Researcher. A programme researcher provides
support to the producer and production team. Researchers
contribute ideas for programmes, source contacts and
contributors and collect, verify and prepare information for
business.
Sales/Seller. The provider of the goods or services completes a
sale in response to an acquisition or to an appropriation or to a
request.
Worker/Laborer. A laborer or labourer is a person who does one
of the construction trades, traditionally considered unskilled
manual labor, as opposed to skilled labor.
Personnel Compensation and Fridge Benefits
13
The proposed project will have fringe benefits for all of
employee of the project. They must have a life assurance,
PhilHealth, SSS and etc.
Project Timetable
The proposed project processes will start at 7:00am to 5:00pm
Monday to Friday. And if have improvement of facilities or production
and additional product will proposed in the project it will acquired in
Saturday and Sunday.
FINANCIAL ASPECT
14
With its existing fixed assets the proposed project will require an
operating capital of at least Php 1000000 for a start. This will be used to
initially finance its proposed Banana Processing Project (Phase of its
proposed overall Village-Based Banana Production Project).
Total Project Costs
The budgetary requirement of the proposed project will is estimated as
follows;
Particulars 2014 2015 2016 2017 2018 2019Sales Of Product
13444800
14117040
14822892
15564036
16342238.
17159350.
Pre-Operating Expense
Preparation Of Feasibility Study
130,000.00
Business Permit
38,350.00
38,350.00
38,350.00
38,350.00
38,350.00
38,350.00
Land 750,000.0
Building 1,400,000
Machine 120,000Training Of Staff
27,000
Delivery Truck
120,000
Contingency 245,535.00
Operating ExpenseRaw 201825 2078797. 21411 220539 227155 233970
15
Materials(Banana)
0 5 61. 6. 8.1 4.9
Other Ingredients
113000 124300 136730
150403 165443.3
181987.63
Salaries And Wages
528,000 528,000 528,000
554400 554400 554400
Fringe Benefits
11520 11520 11520 11520 11520 11520
Packaging Materials
319600 335580 352359
369976.9
388475.79
407899.58
Depreciation: Equipment
56,000.00
56,000.00
56,000.00
56,000.00
56,000.00
Depreciation: Utensils
6444 6444 6444 6444 6444
Repair And Maintenance
108,820.00
108,820.00
108,820.0
108,820.0
108,820.0
108,820.0
Electricity And Water
264,000 264,000 277200
277200 291060 291060
Fuel And Oil 79200 79200 83160 87318 91683.9 96268.095
Advertising Expenses
50,000 50,000 50,000 50,000 50,000 50,000
Sss And Philhealth
10,000 10,000 10,000 10,000 10,000 10,000
Utilities Expense
60,000 60,000 60,000 60,000 60,000 60,000
Contingencies
178119.5
185633.075
191069.7
197373.9
203270.25
208705.21
Total Expenses
6,571,394.
3,936,644.58
4,050,814
4,183,202
4,307,025.
4,421,159.
Net Income 6,873,405.
10,180,395.4
10,772,077.8
5
11,380,834.47
12,035,213.02
12,738,190.93
3740509.5
3898294.57
4012464.146
4144852.129
4268675.4
4382809.4
Financing Scheme and Sources
16
The proposed project will be financed through loan and coop
equity. About 90% of capital will be financed from outside sources and
10% of capital from internal sources. The budgetary allocation and/or
percentages contribution are presented as:
Items Amount PercentageACEF Loan P5940,000.00 90%Coop Equity Counterpart
P660,000.00 10%
-------------------------------------
-------------------------------------
TOTAL CAPITALIZATION P6,600,000.00 100%
List of Financial Assumptions
17
1. Sales volume is expected to increase by 5% yearly.
2. Since mushroom processing are build, other mushroom growers will be encourage to sell their products therefore Yearly production should increase at 3%.
3. Selling prices are assumed to increase by two pesos a year
4. Other ingredients for processing are projected to increase 10% yearly.
5. SSS and Phil Health are expected to increase by 5% on the fifth year.
6. Price contingency are assumed to increase at 5%
7. Employees’ salaries and wages are expected to increase 5% every 3years.
8. Electricity and water are expected to increase 5% every 2 years.
9. Fuels, oils and lubricants are expected to increase 5% every 2 years.
10. Packaging materials are projected to increase 5% yearly
11. Tools were accounted for using the replacement method in which the cost of tools is capitalized when originally purchased and as replacement tools are purchased, they are charged as current expense. All other assets under Property, Plant, and Equipment, except land are depreciated using the straight line method.
12. One fourth of Mushroom raw materials are come from the processing plant.
13. 5kg are assumed to increase of mushroom supply during cold season(dec-feb) and rainy season(jun-july)
Projected Financial Statements
18
Initial cash balance of the project is equivalent to the cash
deposit of the cooperative. With the financing support from donor
agencies and loaning institution, start-up operating capital of the
project is therefore budgeted 1ooooooo. The projected income, cash
flow and balance sheet statements of the proposed project over its
three-year lifespan are estimated are estimated and summarized as
follows:
Projected Income Statement
19
Particulars 2014 2015 2016 2017 2018 2019
Sales of Product
134448001411704
0148228
92155640
36.6163422
38.43
17159350.
35Pre-Operating Expense
Preparation FS130,000.0
0Business Permit 38,350.00
38,350.00
38,350.00
38,350.00
38,350.00
38,350
Land750,000.0
0Building 1,400,000Machine 120,000training of Staff 27,000delivery truck 120,000
Contingency245,535.0
0Operating Expenseraw materials(Banana) 2018250
2078797.5
2141161.425
2205396.268
2271558.156
2339704.9
Other ingredients 113000 124300 136730 150403
165443.3
181987.63
salaries and wages 528,000 528,000
528,000 554400 554400
554400
Fringe benefits 11520 11520 11520 11520 11520
11520
Packaging materials
319600 335580 352359369976
.95388475.
7975
407899.58
74Depreciation: Equipment
56,000.00
56,000.00
56,000.00
56,000.00
56,000.00
Depreciation: Utensils 6444 6444 6444 6444 6444
Repair and maintenance
108,820.00
108,820.00
108,820.00
108,820.00
108,820.00
108,820.00
Electricity and water 264,000 264,000 277200 277200 291060
291060
20
Fuel and oil79200 79200 83160 87318 91683.9
96268.095
Advertising Expenses 50,000 50,000 50,000 50,000 50,000
50,000
sss and philhealth 10,000 10,000 10,000 10,000 10,000
10,000
utilities expense 60,000 60,000 60,000 60,000 60,000
60,000
contingencies
178119.5185633.0
75191069
.7213197373
.9109203270.
2577
208705.21
06
Total expenses
6,571,394.50
3,936,644.58
4,050,814.15
4,183,202.13
4,307,025.41
4,421,159.
42
NET INCOME
6,873,405.50
10,180,395.43
10,772,077.85
11,380,834.47
12,035,213.02
12,738,190
.93
Projected Cash Flow Statement
21
Particular Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Beginning Cash Balance
2,830,885
12,674,945
23,040,973.5
34,004,121
45,582,329
57,820,812.73
Cash Flow: Sales Receipt
13444800
14117040
14822892 15564036.6
16342238.4
17159350.35
Cash OutflowRaw Materials(Banana)
2018250 2078797.5
2141161.42
2205396.2
2271558.15
2339704.9
Other Ingredients
113000 124300 136730 150403 165443.3
181987.63
Salaries And Wages
528,000 528,000 528,000 554400 554400 554400
Fringe Benefits
11520 11520 11520 11520 11520 11520
Packaging Materials
319600 335580 352359 369976.95
388475.797
407899.9
Depreciation: Equipment
56,000.00
56,000.00
56,000.00
56,000.00
56,000.00
Depreciation: Utensils
6444 6444 6444 6444 6444
Repair And Maintenance
108,820.00
108,820.00
108,820.00
108,820.00
108,820.00
108,820.00
Electricity And Water
264,000 264,000 277200 277200 291060 291060
Fuel And Oil
79200 79200 83160 87318 91683.9 96268.095
Advertising Expenses
50,000 50,000 50,000 50,000 50,000 50,000
Sss And Philhealth
10,000 10,000 10,000 10,000 10,000 10,000
Utilities Expense
60,000 60,000 60,000 60,000 60,000 60,000
Business Permit Renewal
38,350.00
38,350.00
38,350.00 38,350.00
38,350.00
38,350.00
Contingencies
178119.5
185633.07
191069.7213
197373.910
203270.257
208705.2106
22
Total Cash Outflows
3600740 3751011.5
3859744.425
3985828.21
4103755.15
4212454.213
Netcash Flow
12,674,945
23,040,973
34,004,121
45,582,329
57,820,812
70,767,708.87
Financial Analysis
23
5.5.1Benefits and Cost (B/C) Schedule and Measure of project worth
GB GC NB ANB DNB at 12%
DNB at 60%
YEAR2014-0 37405
10-
3740510
-3740509.
5
-3740509.
52015-1 14117040 38982
95102187
45647823
69123879.
8444924855.
4252016-2 14822892 40124
64108104
28210291
738618006.
8995251843.
3542017-3 15564036
.641448
52114191
84222296
128127949.
9535582670.
7462018-4 16342238
.4342686
75120735
63234927
477672967.
5695945223.
6082019-5 17159350
.3543828
09127765
41248501
047249752.
4466341784.
546
IRR 278%Payback period
0.4Years
NPW@12%
7249752.446
Financial Sensitivity Test
24
A. Assumption #1What if the gross Cost increase by 5% during the Actual Operation period(year1-5); Gross benefits remain the same forecasted
B.
Assumption #2
What if there will be a 5% shortfall in Gross Benefits yearly due to drop in its selling Gross costs remain the same as budgeted price
YEAR GB GC NB DNB@12% DNB@60%0 0 4377867 -4377867 -4377867 -43778671 12772560 4567983 8204577 7325515 51278612 13411188 4758505 8652683 6897866 33799543 14785835 4897543 9888291 7038291 24141344 15525127 5112492 10412634 6617417 15888425 16301383 5311001 10990382 6236238 1048124
IRR 194%
25
YEAR GB GC NB DNB@12%
DNB@60%
0 0 4596760
-459676
0
-4596760 -4596760
1 13444800
4796382
8648418
7721801 5405261
2 14117040
4996430
9120610
7270894 3562738
3 15564037
5142420
10421616
7417901 2544340
4 16342238
5368117
10974121
6974253 1674518
5 17159350
5576551
11582799
6572391 1104622
IRR 194%
c. Assumption 3What if there will be 1% a shortfall in gross benefits and 1% cost overrun during the actual operating period (simultaneous occurrence)
YEAR GB GC NB DNB@12% DNB@60%0 0 4596760 -4596760 -4596760 -45967601 12772560 4796382 7976178 7121587 49851112 13411188 4996430 8414758 6708193 32870153 14785835 5142420 9643414 6863992 23543494 15525127 5368117 10157010 6454963 15498375 16301383 5576551 10724832 6085558 1022800
IRR 180%
Financial Feasibility Findings
The project is financially feasible based on the IRR that is 278%, since it is greater than hurdle rate. It is also acceptable based on the Net present worth of 7,249,752 pesos since it is positive.
26
SOCIO-ECONOMIC ASPECT
The project will benefit not only Muñoz Banana Processing Cooperative,
Inc. (MBPCI) farmers-members but also the Nueva Ecija banana growers in
general. Likewise, the community residents and the banana consumers will
be benefited in items of increased banana product supply to reduced banana
product prices.
Since the general goal and objective of the cooperative is upgrade the
standard living of its farmer-members, the proposed project will help boost
the income-generating capacity of its primary beneficiaries. With assured
source of banana and technical assistance, this will encourage MBPCI
members to engage in banana farming or multi-cropping in one season to
augment their income from crop cropping.
The project can be likewise tapped as training ground and orientation
for enterprising individuals and as venue for banana technology
improvement researches.
27