papad co operative project plan group unknown

““KURKUR PAPADKURKUR PAPAD” ” CO-OPERATIVE CO-OPERATIVE SOCIETYSOCIETY

Project ReportProject Report

Executive SummaryExecutive Summary

Kurkur Papad Cooperative Society

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Introduction Purpose & Objectives Business Plan Manufacturing Process overview Struture of Co-operative Technical Analysis Marketing Analysis Porter‘s Five Forces Financial information Conclusion

IntroductionIntroduction

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Co-operative Name: Kurkur Papad Cooperative Society

Location: Jhajjar, Gujarat

Year of Formation: 2014-15

No. of Members: 80 Women

Capacity in a year: 180 Kg / Member

Share in Co-operative: Rs. 1200 / Member

Total Equity of its Members: Rs. 96,000

Bank Loan @12%: Rs. 5,64,000

Structure of Co-operative: Two Tier (Village and Dist

Level)Kurkur Papad Cooperative Society

PURPOSE & OBJECTIVESPURPOSE & OBJECTIVES4

Ensure regular market and remunerative prices

Increase in household income

Promote local food and livelihood security

Promote home value-addition through processing of floor

Invest cooperative income from value-addition and diversification to

improve living standards of the

local community by establishing health care, education, credit and transport

infrastructure


Business PlanBusiness Plan5

Forming a Co-operative Society with women who are poor

and wanted to do something for their livelihoods generation

Co-operative Society with two tier structure: Village level and

District level

Dist. Union will provide raw materials to village level

District Union is also responsible for packaging and

marketing of produce

If Co-operative Society will make the profit, it will be divided

in its active members as patronage refund


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Manufacturing Process overviewManufacturing Process overview


Struture of Co-operativeStruture of Co-operative7

Dist. Co-operative Union

Dist. Co-operative Union

Vill:1Vill:1Vill:1Vill:1 Vill:2Vill:2Vill:2Vill:2 Vill:3Vill:3Vill:3Vill:3 Vill:4Vill:4Vill:4Vill:4 Vill:5Vill:5Vill:5Vill:5 Vill:6Vill:6Vill:6Vill:6 Vill:7Vill:7Vill:7Vill:7 Vill:8Vill:8Vill:8Vill:8

Kurkur Papad Cooperative Kurkur Papad Cooperative Society Society has three tier structures:

Structure – Organization LevelStructure – Organization Level


Technical AnalysisTechnical Analysis8

Easy Availability of Raw material.

Scattered suppliers across Himmatnagar, Indore, Dahod, Rajkot, low switching costs between suppliers and low concentration of sellers.

Suitable Agro-climatic availability for sun drying component of the manufacturing process; 320 days of bright sunlight in a year.

Easy availability of capital through member contribution, government subsidies of up to 25% on a loan amount of 10lac and above for setting up of business unit.

Strong infrastructural support in the state of Gujarat


Marketing AnalysisMarketing Analysis

Large number of buyers and sellers

Large number of competitors and relative size, each vying for the share in total value

pie.

Low Entry Barriers, less barriers in raising of capital, low uncertainty in the industry

Quality & Quantity of raw materials assured

Increasing demand to the extent that the industry is unable to meet it through its current

capacity

Latent demand for Handmade and Semi handmade Papad

Transparency in quality through appropriate grading criteria and fairness in quantity

measurement

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Porter’s Five Forces ModelPorter’s Five Forces Model10

Threat of New EntrantsLow Entry Barriers Economies of Scale Access to distribution channels Cost Disadvantages other than Size RelatedModerate Reactions from Competitors Resources of existing participants

Threat of New EntrantsLow Entry Barriers Economies of Scale Access to distribution channels Cost Disadvantages other than Size RelatedModerate Reactions from Competitors Resources of existing participants

Large number of

competitors in the market

Local producers, Lijjat, Bikajiwala, MDH, Shakti Bhog

Moderate Buyer Power

Profitability of buyers

Switching costs Availability of

Information

Moderate Buyer Power

Profitability of buyers

Switching costs Availability of

Information

Handmade Papad as substitute

No complements

Handmade Papad as substitute

No complements

High Supplier Power Product differentiation Information available to

buyers Switching costs Proportion of revenue

represented by sales

High Supplier Power Product differentiation Information available to

buyers Switching costs Proportion of revenue

represented by sales


Financial AnalysisFinancial Analysis11

1. Total number of members in co-operative are 80 women who are contributing Rs. 1200

per member

2. Total equity of members in co-operative is Rs. 96,000

3. Kurkur Papad Cooperative Society is financing 20% by member equity and 80% by

bank loan.

4. Kurkur Papad Cooperative Society invest in fixed assets Rs. 60,000 and other start-up

expenses is Rs. 6,00,000

5. So, Total required of fund is Rs. 6,60,000 which will be financing by its members and

by bank loan where Gujarat government provided 25% subsidy.

6. In first year, total cash inflow goes on Rs. 13,01,760 and cash outflow on Rs.

10,22,080

7. Net Present Value at the discount rate of 15% of the project is (-40064) and IRR is

55%Kurkur Papad Cooperative Society

Financial Analysis……Cont…Financial Analysis……Cont…

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Kurkur Papad Cooperative Society are generating total revenue in 1st year Rs. 13,16,060.

After deducting interest and taxes , Kurkur Papad Cooperative Society have net profit of Rs. 2,44,864 in 1st year.

In one quintal raw materials, Co-operative is producing Papad of 50 kg, Khakra of 20 kg, Chaurafali & Mathia 10 kg and Pickles 8 kg with the selling price respectively Rs. 100,100,100 and 130 per Kg.

So, average total price of produce in quintal is Rs.9040. Whenever average variable cost of one quintal RM Pickles is Rs. 7555 per

quintal. Contribution margin is 1485 and contribution ratio is 0.16 Fixed cost of project is Rs. 60,000. So, Break Even Point (BEP) is 3,65,000 approximately which Cooperative

will achieve in 3rd year.


FINANCIAL ANALYSIS

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As the demand of home made food in rowing, the food industry faces a positive supply

pressure.

This coupled with recent freedom provided by the government would create a

favourable environment for the co-operative.

The company is already doing sufficiently well and also took several initiatives for

further improvement.

It should try to adopt newer technologies to stay ahead of the competition.

In addition to this, it should constantly look for adding to the value provided to

customers.

This requires a dedicated marketing and consumer research activity set.

The company should also work on strengthening its internal operations and try to

develop new business models (such as integration). Kurkur Papad Cooperative Society