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Paroma Enterprises limited Corporate Office:+256-774-828-247
P.O BOX 27529, KAMPALA Hannington Centre Room 10
Office No: +256-783-542-432, Modern Demonstration Farm
+211-926-262-671 MukonoMbalala, Nakapinyi
+256-774-828-247 Riviera Rock Spring +256783542432
+256-701354963 Paroma Distribution Majestic L5 Rm 40
Email: [email protected]@paromauganda.com, [email protected]
Website: www.paromauganda.com
Registration number: (Reg. N0:137699) (TIN: 10011046448)
PAROMA MODERN INDUSTRIES
P.O. Box 27529 Kampala
Industrial Facility Project
Developed By
Mr. Francis Bukenya
+256783542432+211926262671, Email: [email protected]
Skype: francisbukenya
LinkedIn: Francis Bukenya & Twitter: @francisbook
Facebook: Francis Bukenya
Website: www.francis-bukenya.strikingly.com
JAN 2016
i
Board of Directors
Business Manager
Accountant
Store Keeper Drivers Security
Production Manager
Enterprise
Dev. Specialist
Marketing &
Sales Rep.
Farm Technicians
& Laborers
Operations
Manager
Operations
Manager
1.0. BUSINESS OWNERS PAROMA INDUSTRIES
Partnership/owners Full address and contacts Share of the business
1. Mr. FRANCIS BUKENYA HANNINGTON CENTER KAMPALA.
60
2. Ms. LILIAN KEMBABAZI HANNINGTON CENTER KAMPALA.
10
3. Mr. VASCO JOSPH HANNINGTON CENTER KAMPALA.
10
4. Mr. KITUI FLAVIA MUTONYI
HANNINGTON CENTER KAMPALA.
10
5. Ms. SASHA NAJJUKA HANNINGTON CENTER KAMPALA.
10
Business advisors
Name Address Role
Mr. Larry Wolverton Arizona U.S.A Chief Technical Advisor
Mr. Andrew Mayiga Uganda Chief Industrial Advisor
Ms. Agnes Sseruyange Uganda Management Advisor
Mr. Andrew Muwonge South Africa International trade advisor
ii
EXECUTIVE SUMMARY
Our diverse product portfolio in the manufacturing and cleaning segment comprises of a broad
range of solutions in housekeeping, laundry, swimming pool, health club/personal care,
kitchen/food safety, and cleaning materials. The Aim is being a global leader in the provision of
commercial cleaning products and services, respected by our professionalism, quality and
integrity.
Our hygiene products and systems are designed to enhance stakeholder value with special regard
to; achieving optimal customer satisfaction; employee welfare; health and safety; enhancing
customers’ competitive advantage in their respective industries; reducing the clients’ labor costs;
training of employees and customers; promoting local communities through jobs and innovative,
quality and affordable products; contributing tax revenues to the government; to mention but a
few.
Mission: In encouragement of Practical Entrepreneurship amongst the youth and Women in Africa
while promoting agriculture, value addition and industrial processing for export.
Vision: Being a profitable market driven business that maintains real growth while creating
prosperity through the provision of a diversified range of cleaning products and services to the
benefit of East African countries and their environs.
Table of Contents
EXECUTIVE SUMMARY .............................................................................................................. iii
Table of Contents .............................................................................................................................. iii
2.0 Purpose of the Project: .......................................................................................................... 14
3.0 Rationale behind the Project .................................................. Error! Bookmark not defined.
3.1 Beef consumption ................................................................................................................. 14
3.2 Export Potential. ................................................................................................................... 15
3.3. Access to resources ............................................................................................................... 16
3.3.1. Land ....................................................................................................................................... 15
3.3.2. Raw materials: ....................................................................................................................... 15
3.3.3. Labour .................................................................................................................................... 15
3.3.4. Access to Markets / Market Niche .......................................... Error! Bookmark not defined.
3.4. market plan................................................................................ Error! Bookmark not defined.
iii
4.0 Projected Capacities and Processing Requirements ............................................................. 29
4.1 Estimated Total Investment Costs (US Dollar) .................................................................... 30
4.2 Major Inputs requirements: ................................................................................................... 30
4.2.1. Raw materials......................................................................................................................... 30
4.3 Processed industrial materials and components ................................................................... 30
4.4 Factory Supplies.................................................................................................................... 31
4.5 Labour ................................................................................................................................... 31
4.6 Sales ...................................................................................................................................... 31
4.7 Indicative time schedule ...................................................................................................... 31
5.0 Financial Analysis ................................................................................................................ 32
5.1 Profitability .......................................................................................................................... 32
5.2.1 Feasibility Analysis ................................................................................................................. 32
5.2.2. Balance Sheet ......................................................................................................................... 33
5.2.3. Pay Back Period ..................................................................................................................... 33
5.2.4. Rate of Return (Return on Investment) .................................................................................. 34
5.3. Annex - Machinery and equipment: ......................................................................................... 34
iv
v
vi
vii
viii
ix
x
xi
xii
xiii
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1.0 Background Information
Our diverse product portfolio in the manufacturing and cleaning segment comprises of a broad
range of solutions in housekeeping, laundry, swimming pool, health club/personal care,
kitchen/food safety, and cleaning materials. The Aim is being a global leader in the provision of
commercial cleaning products and services, respected by our professionalism, quality and
integrity.
Our hygiene products and systems are designed to enhance stakeholder value with special regard to;
achieving optimal customer satisfaction; employee welfare; health and safety; enhancing customers’
competitive advantage in their respective industries; reducing the clients’ labor costs; training of
employees and customers; promoting local communities through jobs and innovative, quality and
affordable products; contributing tax revenues to the government; to mention but a few.
Mission: In encouragement of Practical Entrepreneurship amongst the youth and Women in Africa while
promoting agriculture, value addition and industrial processing for export.
Vision: Being a profitable market driven business that maintains real growth while creating prosperity
through the provision of a diversified range of cleaning products and services to the benefit of East
African countries and their environs.
2.0 Purpose of the Project:
The purpose of the project is to manufacture top quality consumer goods.
3.0 Swot Analysis
Strength:
3.0.1 Demand for cleaning products continues to grow due to consumer awareness concerning the
importance of hygiene and the spread of infectious diseases. The global cleaning products market is
benefiting from increased focus on safe food storage, hygienic garbage disposal, the importance of
sanitary conditions and the need to disinfect household surfaces. One of the major attractions of these
products for today’s consumer is convenience, with time-strapped consumers having less and less time for
household chores but eager to maintain high standards of hygiene and cleanliness. The growing incomes
represent an opportunity to invest in the sector.
15
According to a new market report published by Transparency Market Research titled "Organic Personal
Care Products Market for Skin Care, Hair Care, Oral Care and Cosmetics—Global Industry Analysis,
Size, Share, Growth, Trends and Forecast, 2012–2018," the global demand for organic personal care
products was over $7.6 billion in 2012 is expected to reach $13.2 billion by 2018, growing at a CAGR of
9.6% from 2012 to 2018.
The global organic personal care products market witnessed steady growth in recent years due to
increasing consumer concerns regarding personal health and hygiene. In addition, widening distribution
channels and new product development are the other factors that contribute to the market growth.
However, limited shelf life, raw material supply and a stringent regulatory scenario are expected to be key
challenges to market growth over the next five years.
3.0.2 Uganda has abundant land for industrial development, good and reliable supply of water from lakes
and rivers.
3.0.3 The partners are ready to kick start this project as a new venture based on market demand readily
available.
3.0.3. There is enough supply of skilled and unskilled labor in Uganda for industrial processing,
agriculture value chain processing project, packaging, sales and marketing. There are graduates in
Chemical Engineering, Industrial development, Horticulture, Business management, Entrepreneurship and
Information communication technology from Universities who can easily adapt to new technology.
3.1 Opportunities:
3.1.1 There is an export potential to the neighboring countries of East Africa and in the several states of
Uganda.
3.1.2 The marketplace for janitorial products and services is changing, both in nature and scope.
The consumer is becoming more conscious of the environmental impact of cleaners as the market
expands.
We offer an innovative line of biodegradable, environmentally safe, citrus cleaners to janitorial
services, retail outlets and consumers.
Offering innovative janitorial products. This is essential for maintaining the niche market sectors
mentioned in the mission statement.
Reliable and timely deliveries. We make good on its delivery promises.
A reliable administration that is ready to serve customers, prepare accurate billing, follow-up on
orders and other documentation, and maintain close watch on expenses and collection of accounts
16
receivable
We have developed a very strong portfolio over time, with quality products and the best customer
service being the backbone of our success.
3.1.3 There is a tremendous expansion of the tourism industry bringing in a new class of
consumers demanding quality a unique organic products and natural well processed extracts like garlic
powder
.
3.1.4 The Middle East and Arab countries, Europe & U.S.A offer a wider market for African organic
products like Honey, Garlic fresh & products, mushroom fresh & products, Shea butter and many other
such raw extracts in powder, fresh and oil. Given the current East African Community market, we shall
utilize this opportunity to export to countries like Uganda, Democratic Republic of Congo, Rwanda and
Burundi amongst others.
3.1.4 There is a virgin market here in Uganda.
3.1.5 Our products are made from natural top quality raw materials.
3.2 Weaknesses:
3.2.1 Limited capital; there is eminent shortage of operating capital to fully finance the project activities.
3.2.2 Unpredictable vagaries of weather and lack of properly managed metrological facilities to fully
furnish farmers with necessary weather conditions.
3.2.3 Lack of well trained agricultural extension workers.
3.3 Threats:
3.3.1 Government policy; because of ever changing government policies, which may breed difficult
situation to spur development of the project activities.
3.3.2 Pests and diseases; due to unpredictable weather conditions, pests and diseases are likely to infest the
project raw material suppliers & crops.
3.3.3 Floods and prolonged dry spells may affect the profitability levels of the project.
3.3.4 Competition from other investors who may start doing similar business.
17
3.4 Market plan:
3.4.5 We will be selling primarily to:
Direct market retail customers.
Huge supermarkets.
Export market.
3.4.6 We will be targeting our prospective customers by:
Geographic area since we are centrally located in the Great Lakes Region which is ideal for supplying the
growing regional markets in Kenya, Tanzania, Southern Sudan, Congo and Rwanda and the domestic
Ugandan market plus Middle East countries.
Capacity building steps for the Paroma
The steps needed for implementation of the business plan shall include the following:
i) Recruitment of staff and orientation of management structures
ii) Development of operational implementation plan
iii) Procurement and installation of equipment
iv) Stakeholder inception business meetings
v) Product development and diversification
vi) Quality testing, evaluation and management
vii) Market development and sales promotion
viii) Research, technology transfer and development
ix) Students mentorship and capacity building
x) Documentation and dissemination of best practices and lessons
18
Market Share
1.1.1. Target market(s)
Customer/buyers Targets Barriers Strategies
Local (on farm-buyers )
10% for daily and annual average prices… Sales
Well established local and international competition
Increase off-season production by creating durable cleaning products, develop new product lines
Local (major town KAMPALA)
40% on daily and annual average prices, 10%annual sales growth
well established local and international competition & seasonal price fluctuations
Prompt service delivery, promotions, customer contact
International (South Sudan, Kenya Rwanda, Tanzania and Burundi and Europe)
50% daily and annual average prices, 10% sales growth
Well established local & international competition.
Seasonal price fluctuations.
Advertising, good price fixing and friendly service delivery.
19
1.1.2. Political, Legal and regulatory factors
Factor of concern Response
MAAIF policies and agreement
Environmental regulations regarding waste management
Include waste management facilities the development plan strategies and keep an open communication with municipalities and all enforcement agencies
Immigration policy limited hiring of skilled managers
Strong training efforts
Strong employees policies to encourage long term employees
Municipal ground coverage application limit expansion of the dairy farm
Ensure land base adequacy to allow for future expansion
Accaricide application certificate Take courses in application
Distribution strategy
Customer/buyers Targets Barriers Strategies
Local (on farm-buyers )
10% for daily and annual average prices,….Sales
Well established local and international competition
Increase off-season production by creating durable cleaning products, develop new product lines
Local (major town Kampala)
40% on daily and annual average prices, 10%annual sales growth
well established local and international competition & seasonal price fluctuations
Prompt service delivery, promotions, customer contact
International (South Sudan, Kenya, Rwanda, Tanzania and Burundi& Europe)
50% daily and annual average prices, 10% sales growth
Well established local & international competition.
Seasonal price fluctuations.
Advertising, good price fixing and friendly service delivery.
20
2.0. Production Plan Land and Building
Location: Kampala Uganda
Description: High quality consumer good
Size: 5 Acres
Owned or leased: Owned
Land
Production strategies
Description Target yield (liters/year)
Barriers Response
Cleaning products
45,000 UGX fluctuation Prepare offshore accounts
Cosmetics & Candles
15,000 UGX fluctuation Prepare offshore accounts
3.0. Environmental assessment and safety plan An environmental assessment plan for the operation has been completed using resources such as the municipality, the city and local Ministry of Industrial development specialists. The owners are aware of the issues of federal and provincial legislation that passes the responsibility for clean-up of environmental hazards to the owners of the property. Also relevant permits, licenses, health and safety controls, water quality controls, and soil conservation required when operating, constructing or expanding the unit has been followed.
Firm safety is a major concern for the operation. The owners have taken courses related to safety in the area of emergency skills and safety precautions. As well, owners ensure sustainable use of waste recycling.
Political, Legal and community Aspects of Production
The business owners have:
Researched and complied with the municipal regulation limiting consumer goods production with technology and value addition through processing to preserve the product.
Applied for facilities development permits
21
Applied for environmental permits related to land development
Communicated with the municipal authorities, plans to establish Paroma industries.
4.0. Human resource plan Employees plan
Job title Functions
Owner/marketing and business manager Company management, sales management, and promotion and market development, book-keeping, cost accounting, billing, coordinating and developing business plan.
Owner/production and facilities manager Company management, production management, supervising workers, worker training, scheduling and coordinating repairs and maintenance, upgrading and developing facilities
Foreman Supervision of Paroma operations such as Consumer good, grading, processing and packaging, shipping and handling and general maintenance.
Production workers Manufacturing, carriage, packaging and transportation
Labor and training goals
Target Barrier Planned response Measurement
Employee safety
An accident free workspace
-Lack of knowledge
-Poor working conditions
Training, employee manual, awareness & supervision
100 accident free days
High productivity
Work habits,
Knowledge,
Attitude,
Experience
Attention to employee concerns, regular performance reviews, training opportunities, job design, staff hiring, management style
60,000 Tons a year
Low staff turnover ratio
Demand for skilled workers by other
Attention to employee concerns, regular
Tenure greater than 4 years
22
firms performance reviews, staff hiring and training opportunities
3.4.7 Competition Analysis
Company
Contact
Informatio
n
Types of
products/
Characteristi
cs
How
Package
d
Service/deliver
y options
Price
range
Uneliver &
Nice &
Lovely
Special
personal care,
cleaning and
household
products
Standard
packages
Deliveries to
distributors
only
Average
depending on
product
Mukwano,
Miad &
Cash Cash
Modern
quality
personal care,
cleaning and
household
products
Standard
packages
Deliveries to
distributors
only
Range
s due
to
market
deman
d
Movit &
Jesco
Modern
personal care,
cleaning and
household
products
Standard
packages
Deliveries to
distributors
only
Range
s due
to
market
deman
d
Samona,
Jireh,
Mum’s
products
Herbal
personal care,
cleaning and
household
products
Standard
packages
Deliveries to
distributors only
Range
s due
to
market
deman
d
23
3.4.8 Situation Analysis:
Strengths Weaknesses Opportunities Threats
Central location
in the Great
lakes region.
Unpredictable
Vagaries of
weather.
Good
investment
climate.
Government policies
of supporting local
investors.
Government
policy.
Favorable
climatic
conditions.
Lack of capital Ready market
domestically
and in the
great lakes
region.
Competition
from firms
already in
the market
and new
entrants.
Availability of
vast land,
natural raw
materials.
Lack of well
trained extension
workers.
Good political
climate
Vagaries of
weather and
inflation.
Superior
products.
Less
competition
Pests and
diseases
Strategy and Implementation Summary
SWOT Analysis
List the internal factors in your business that represent favorable forces (strengths) and unfavorable
forces (weaknesses)
STRENGTHS WEAKNESSES
Customer satisfaction
Team work
Staff welfare
Change consciousness
1. Insufficient Capital, Tools &
Modern Equipment
2. Proper records keeping
3. Lack of infrastructure
24
Social responsibility
Flexibility/innovation/creativity
4. Loan to service
Quality
Integrity
Integrity
Reliability
Environmental friendliness consciousness
List the external factors which constitute favorable forces (opportunities) and unfavorable forces
(threats) outside your business.
OPPORTUNITIES THREATS
a. The presence of the East African Community
enlarges our Market.
a. Tax increment overtime
b. The increase in E-marketing will easily support our
sales and marketing department
b. Inflation of the Uganda Shilling (UGX)
against the US Dollar.
c. The marketplace for janitorial products and
services is changing, both in nature and scope.
The consumer is becoming more conscious of the
environmental impact of cleaners as the market
expands.
Paroma Enterprises Limited offers an innovative line
of biodegradable, environmentally safe, citrus
cleaners to janitorial services, retail outlets and
consumers.
c. Increase in the imported products of the same
kind
d. Insufficient Capital to meet customer demands
3.4.9 Factors that may affect our business
Economic factors such as growth, industry health, economic trends, taxes, and many others may affect
smooth operations of the project.
25
Regulatory, legal factors, environmental factors should also be considered as factors that may affect the
organic consumer products business project.
3.4.10 OUR PRODUCTS:
Our diverse product portfolio in the manufacturing and cleaning segment comprises of a broad
range of solutions in housekeeping, laundry, swimming pool, health club/personal care,
kitchen/food safety, and cleaning materials. The Aim is being a global leader in the provision of
commercial cleaning products and services, respected by our professionalism, quality and
integrity.
Our hygiene products and systems are designed to enhance stakeholder value with special regard to;
achieving optimal customer satisfaction; employee welfare; health and safety; enhancing customers’
competitive advantage in their respective industries; reducing the clients’ labor costs; training of
employees and customers; promoting local communities through jobs and innovative, quality and
affordable products; contributing tax revenues to the government; to mention but a few.
Well branded with unique product characteristics, attractive packages coupled with highly competitive
prices and quality distribution and delivery services will leverage our products against our competitors.
Pre and post sales services shall be emphasized so as to meet our customers’ demands.
Our well stocked and managed inventories shall be designed in line with our customer needs.
Our products shall confirm to both national bureau of standards and international standards organization.
Frequent quality assurance tests shall be carried out to ensure quality.
Products
Paroma Organic Products
1. Paroma Mushroom Powder
2. Paroma Garlic Powder
3. Paroma Quail eggs
4. Paroma Aleo Vera oil
5. Paroma Moringa oil
6. Paroma Neem oil
7. Paroma Avocado oil
8. Paroma Shea Oil
9. Paroma Honey
10. ParomaHerbal Petroleum
Jellies
11. Paroma Herbal creams
12. Paroma Herbal oils
13. Paroma Herbal creams
Swimming Pool Products
Paromalgicide (Algae
Growth Control Micro-
Biocide)
Paromapool Chlorine 65%
(Pool Sanitizer)
Paromapool Super
Chlorine 90% (Pool
Sanitizer)
Paromapool Flocculator
(Clears All Suspended
Particles In The Pool)
Paromapool pH Minus (pH
Downward) - Liquid
Textile & Laundy Hygiene
products
Paroma Chlorine Bleach
(Powdered Bleach For
Whites Only)
Paroma Industrial Bleach
(liquid Bleach for whites
only)
Paroma Booster (Cuts
Grease And Boosts The
Cleaning Power)
Paroma Oxygen Liquid
Bleach (Liquid Bleach For
Both Whites & Colored)
26
14. Paroma Herbal lotions
15. Paroma Herbal soaps
16. Paroma Herbal foot powder
17. Paroma Herbal muscle relaxer
18. Herbal Hair care products
19. Paroma Melon water
20. Paroma Lemon grass oil
21. Paroma Eucalyptus oil
Dairy Industry Products
Paroma Sanitizer
Paroma Hand Wash Cream
Paroma Multipurpose
Heavy Duty Detergent (pH
10 & above)
Paroma CIP Chemicals
Paroma Water treatment
chemicals
Paromapool pH Plus (pH
Upwards) - Powder
Paromapool Brilliant
(Maintains A Blue Natural
Color)
Paromapool Antistain -
Liquid
Paroma Basic Fabric
Detergent
Paroma Fe (Special For
Iron Based Stains On
Fabrics)
Paroma Liquid Rust
Remover (For Spotting)
Paroma Hand Wash Fabric
Detergent
Paroma PB Special For
Proteinous Stubborn Stains
(Blood)
Paroma Super- Single
Application (3 In 1)
Paroma XDH
(Recommended For Areas
With Extremely Hard
Water)
Paroma General Fabric
Disinfectant
Paroma Phenolic
Disinfectant
Paroma Biological
Detergent
Personal Hygiene Products
Paroma Shower Gel
Paroma Hair Shampoo
Paroma Hand & Body
Lotion
Paroma Hand & Body
Cream
Paroma Mouth Wash
Paroma Hand Washing
Cream
House Keeping Hygiene
Products
Paroma Carpet Cleaning
Shampoo
Paroma Car Cleaning
Shampoo
Paroma Ceramic Tiles &
Toilet Bowl Cleaner
Maintainer
Paroma Ceramic Stubborn
Stain Remover
Paroma Terrazzo Detergent
Paroma Toilet Disinfectant
Paroma Floor Polish
Paroma Scouring Powder
Super Grade & Economy
Grade
Paroma Glass Shine
Kitchen Hygiene Products
Paroma Multipurpose
Liquid detergent
Paroma Multipurpose
Heavy duty liquid
detergent (Dishwasher)
Paroma Sterilizing powder
– Legu plus (Sanitizer for
vegetable salads and
general sanitizing)
Paroma Powdered
Destainer for all Kitchen
equipment
Paroma Oven and Grill
Cleaner – (Use cold/hot)
Paroma Degreaser
Paroma unblocking wonder
(fats)
27
Liquid
Paroma Hand Washing
Cream ―P‖
Paroma Methylated spirit –
for keeping food warm
Paroma Machine Rinsing
Liquid
Paroma Machine Dish
Washing Detergent
3.4.11 pricing strategy:
Competitive and premium pricing strategy shall be employed during cost accounting procedures. List
price, discounts, bundling, favorable payment terms and financing options shall be part of our pricing
strategy.
The pricing strategy shall make the project break-even by covering costs and leaving a sizeable profit
margin.
Sales shall be tracked on a monthly basis through sales reports supervised by the sales director by tracking
potential number of customers against estimated volume per customer hence potential sales volume.
3.4.12 PRODUCT DISTRIBUTION
Holistic Distribution channels shall be employed through wholesalers and distributors during the
distribution process coupled with logistics, including delivery and order fulfillment.
3.4.13 PROMOTION
The project image shall be high quality services and low cost goods.
The project shall use the following promotion/advertising media:
Type of
Promotion
Timeline Estimated
Cost $
Projected
results
Website
Throughout
the project
cycle
3,846
10%
Face book ― 5%
28
-
Blogging
YouTube
―
1,152
5%
Electronic
newsletter
―
350
5%
Personal
contacts
Business
cards
―
1,500
15%
Brochures
3yrs
5,400
15%
Fliers
3yrs
3,580
5%
Direct mail
5
yrs
- 5%
Coupons
- - 0%
Newspaper
Magazines
Telephone
Directory
5yrs
15,6780
15%
29
4.0 Projected Capacities and Processing Requirements
No. Heading Details /Assumption
1. Planned
products to be
produced
The project is currently manufacturing diverse cleaning products
segment which comprises of a broad range of solutions in
housekeeping, laundry, swimming pool, health club/personal care,
kitchen/food safety, and cleaning materials. The Aim is being a
global leader in the provision of commercial cleaning products and
services, respected by our professionalism, quality and integrity.
This project is planning to produce Paroma products mentioned above.
2. Quantities to be
produced
It’s projected that the plant has a capacity of 6000 tons per month of
processed products; it will be started with 60% of production capacity in
the first six months and will increase to 80 per year.
3. Equipment and
machinery
required
The plant has limited equipment and machinery. For details check the list
of machines at the end of this project proposal.
4. Premises
requirements
The plant has its land ready to put up a modern facility, located in
Kampala Uganda.
5. Sources of the
machinery
U.S.A, China, Belgium and United Kingdom, Denmark.
6. Specialized
Human
Resources
Business Managers,
Cosmetic quality controllers & Agro processing specialists;
Chemical & Industrial Technologists
30
requirements Marketing staff and ICT specialists
Mechanical Engineers
7. Potential
Markets
Domestic market, regional markets and international markets.
4.1 Estimated Total Investment Costs (US Dollar)
No Item(s) Amount
1 Pre-operating expenses 86,956
2 Tools 80,500
3 Vehicles 130,434
4 Machineries and equipment 291,304
5 Furniture and office equipment 23,478
6 Working capital 108,695
Total 721,367
4.2 Major Inputs requirements:
4.2.1. Raw materials (Lump sum of USD 288,000$ annually)
4.3 Processed industrial materials and components
Item Monthly Qty (Kg)
Unit cost in US
$
Cost in US
$
Annual Total
Shea oil 130 3 390 1,170
Unique additives 420 2 840 10,080
Display samples 520 0.8 416 4,992
Natural extracts 600 1 600 7,200
Packaging and
Casings 200
22 44,000
528,000
31
Total 551,442
4.4 Factory Supplies
Item monthly cost annual cost
Protective wears 1,956 23,478
Cleaning requirements 800 9,600
33,078
4.5 Labor
Type Description Monthly wages/salaries in US $
Managerial Will be responsible for the entire
running of the business
7,080
Technical Advisor Provide technical assistance 5,400
Skilled (2) Assist the technical advisor 7,296
Unskilled (4) Work as directed by their supervisors 8,340
Total 28,116
4.6 Sales
Item Quantities per
month(Pcs)
Unit cost($) Total cost per
month
Annual Total
Product
boxes 6,500
4 32,000 312,000
Unique
products
boxes 1,500
4 10,000 120,000
Total 432,000
4.7 Implementation plan.
Item Activity Duration
32
1 Project execution arrangements Jan 2016
2 Site identification, preparation and
development
Jan, Feb 2016
3 Procurement of machinery and
equipment
Feb, Mar 2016
4 Installation and commissioning Mar,2016
5 Commercial operation
Monitoring & Evaluation
Mar, April,2016,
Throughout the project
life
5.0 Financial Analysis
5.1 Profitability
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Total Income 332,608 399,130 598,695 798,260 1,330,434
Total Expenditure 120.9 51740 47,392 47,392 52,608
Net Profit Before
Tax 277,826 51740 47,392 47,392 52608
Net Profit Margin 54,782 347,390 551,303 750,868 1,277,826
Return on
Investment 42,608 53,673 130,434 131,304 137,173
5.2.1 Feasibility Analysis
Item Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total
Bank Balance B/F 39,130 39,130 90,000 181,633 298,317 700,663 1,309,743
33
8
5.2.2. Balance Sheet
Item Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total
Bank Balance B/f
Inflows:
Revenue receipts 42,608 42,608 54,347 361,980 463,043 869,567 1,791,545
Equity Injection 19,565 19,565 38,043 43,782 100,000 106,086 307,476
Development Bank Loan 270,434 270,434 306,739 - - - 577,173
Total 332,608 39,130 39,130 90,000 181,633 298,317 700,663
Outflows
Capital Expenditure 54,782 54,782 58,260 62,391 64,726 65,860 306,019
Purchases 86,956 86,956 91,304 100,000 130,434 139,130 547,824
Operating expenses
(Excl. Depreciation) 56,956 56,956 60,434 61,739 69,565 70,000
318,694
Loan Interest payments 42,608 42,608 42,608 - - - 85,216
Loan Repayments 52,173 52,173 56,521 - - - 108,694
Total 293,478 293,478 309,130 224,130 264,726 274,991 1,366,455
Balance C/f 39,130 39,130 90,000 181,633 298,317 700,663 1,309,743
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5.2.3. Pay Back Period
Payback period
consumption
Period Net cash flow Balance recovery of
investment
Year 1 39,130 42,608
Year 2 90,000 53,673
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Payback Year 3 181,633 130,434
Year 4 298,317 131,304
Year 5 700,663 137,173
5.2.4. Rate of Return (Return on Investment)
Year 1 Year 2 Year 3 Year 4 Year 5
Annual Return on Investment 42,608 53,673 130,434 131,304 137,173
5.3. Annex - Machinery and equipment:
No Machinery/equipment Qty Unit cost in US $ Total cost US$
1 Complete cream, lotion mixer n
packer
1 17,391 17,391
2 Industrial tables & shelves 1 1,522 1,522
3 Tube filler 1 790 790
4 wax saw 1 265 265
5 Laboratory machines 1 3,522 3,522
6 Vacuum machine 1 2,700 2,700
7 Liquid soap mixers 1 1,435 1,435
8 Brine injector 1 1,565 1,565
9 Scotter machine 1 5,200 5,200
10 Facility computer 1 1,400 1,400
11 Soap plodder 1 26,086 26,086
12 Boiling sauce pans 1 720 720
13 Cold truck 1 78,260 78,260
14 Complete Jelly production line 1 5,217 5217
15 Packaging machine 1 8,695 8,695
BREAK- EVEN POINT
This is the part at which the profit is zero
Break-even point = Fixed cost________
Contribution Margin
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Contribution Margin = Selling Price per unit- Variable Cost Per Unit
Variable cost are the costs that increase or change with changes in the level of output.
The variable costs are the purchases for the goods sold and the break-even point is the point where the
business is able to cover its total cost.
NET PROFIT MARGIN
This calculates the net profit as a percentage of the total sales
Net Profit Margin = Net Profit(after tax) ×100
Total Sales
Critical risks
Risk Intervention Plan
Theft Comprehensive security policy plan
Installation of monitoring and surveillance equipment
Comprehensive insurance cover on key equipment
Fire Design of a safe operations system including training plan
Installation of fire monitoring and fighting systems
Comprehensive cover on systems
Market penetration with
dominance of single
Aggressive marketing strategy
Competitive advantage focus
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player