theresa maximnuk kirby poirier sara wielgosz tyler wilson
TRANSCRIPT
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Theresa MaximnukTheresa MaximnukKirby PoirierKirby PoirierSara WielgoszSara WielgoszTyler WilsonTyler Wilson
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IntroductionIntroduction
Proposing a Pasta Processing Plant to Proposing a Pasta Processing Plant to produce Whole Wheat Pastaproduce Whole Wheat Pasta
Plant will be established in Swift Plant will be established in Swift Current, SaskatchewanCurrent, Saskatchewan
Funded by private Saskatchewan Funded by private Saskatchewan Investors and a Bank Operating LoanInvestors and a Bank Operating Loan
Using Home-Grown Prairie Durum Using Home-Grown Prairie Durum wheat to make a value-added productwheat to make a value-added product
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Operations PlanOperations Plan
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Organizational StructureOrganizational Structure
Board of Directors - 5
Investors
Manager
Sales Manager
Secretary
Production Staff
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Lot LocationLot Location
#4
#1
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Site PlanSite Plan
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Prairie Pride Pasta’s Floor Prairie Pride Pasta’s Floor PlanPlan
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Process FlowProcess Flow
Finished product Storage Room
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Business CycleBusiness Cycle
Business Hours – 8:00 to 4:30 DailyBusiness Hours – 8:00 to 4:30 Daily Plant workers stay extra hour Plant workers stay extra hour Optimum – 7 hours a day productionOptimum – 7 hours a day production
Durum delivered to plant every 2 weeksDurum delivered to plant every 2 weeks Potential of plantPotential of plant
21,000 kg/week 21,000 kg/week Total Production - 1,209,600 kg per Total Production - 1,209,600 kg per
yearyear
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Standards & RegulationsStandards & Regulations
Set out by Canadian Food Inspection Set out by Canadian Food Inspection AgencyAgency Prairie Pride Pasta must follow food Prairie Pride Pasta must follow food
processing regulationsprocessing regulations HACCP program presentHACCP program present ISO 9001:2000 ISO 9001:2000
recognized businessrecognized business
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Investment Investment RequirementsRequirements
Capital Budget SummaryCapital Budget Summary Land $43,240 Land $43,240 Building Costs $267,650Building Costs $267,650 Equipment $846,500 Equipment $846,500 Working Capital $85,197 Working Capital $85,197
Total Capital Required $1,242,587 Total Capital Required $1,242,587
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Human Resource Human Resource StructureStructure
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Prairie Pride Pasta’s Prairie Pride Pasta’s EmployeesEmployees
Operations Manager – $70,000Operations Manager – $70,000 Sales Manager – Base $45,000 plus Sales Manager – Base $45,000 plus
1% commission – potential of 1% commission – potential of $60,000$60,000
Secretary - $35,000Secretary - $35,000 Plant Labourers – $12.00 per hourPlant Labourers – $12.00 per hour
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Marketing PlanMarketing Plan
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The 4 P’sThe 4 P’s ProductProduct
Whole Wheat Pasta (Long and Short)Whole Wheat Pasta (Long and Short) PricingPricing
Market based competitive priceMarket based competitive price Promotion Promotion
Health Food Product, Low Carbohydrates, Health Food Product, Low Carbohydrates, Highly NutritiousHighly Nutritious
Place Place Independent, Locally owned, corner storesIndependent, Locally owned, corner stores
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Segmentation, Targeting & Segmentation, Targeting & PositioningPositioning
Potential TargetsPotential Targets Large Scale Grocery Chain, Independent Large Scale Grocery Chain, Independent
Grocery stores, Specialty StoresGrocery stores, Specialty Stores SegmentationSegmentation
Variety of Customers that shop at different Variety of Customers that shop at different locations and store typeslocations and store types
PositioningPositioning Convince customer to pay premium price for Convince customer to pay premium price for
quality productquality product
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SWOT AnalysisSWOT Analysis
Human Resource Human Resource Sales Manager is key!Sales Manager is key!
Physical Resources Physical Resources Location, Modern Equipment, and FacilityLocation, Modern Equipment, and Facility
Financial resources Financial resources Bank loan and private investorsBank loan and private investors
External Opportunities & Threats External Opportunities & Threats Market trendsMarket trends Grain prices Grain prices New products New products
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Market AnalysisMarket Analysis
Whole wheat market increasingly Whole wheat market increasingly growinggrowing Conventional market gong down due to Conventional market gong down due to
trendstrends Target markets – Health food Target markets – Health food
conscious peopleconscious people Customers willing to pay premiumCustomers willing to pay premium Product features – high nutrient, Product features – high nutrient,
mineral, fibre, low-carbmineral, fibre, low-carb
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Marketing StrategyMarketing Strategy
Sales and Profit ObjectiveSales and Profit Objective ““25% pre-tax profit by selling 75% of the 25% pre-tax profit by selling 75% of the
plant’s production capacity”plant’s production capacity” Channels of DistributionChannels of Distribution
Using Wholesaler/Distributor to Using Wholesaler/Distributor to distribute product to storesdistribute product to stores
RBR Food Brokerage Ltd in CalgaryRBR Food Brokerage Ltd in Calgary
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Marketing BudgetMarketing Budget
Packaging - Design and Costs $5,000Packaging - Design and Costs $5,000 Sponsorship & Donations $5,000Sponsorship & Donations $5,000 Office Supplies – Marketing Office Supplies – Marketing
purposes $3,000purposes $3,000 Product Brochures $2,000Product Brochures $2,000 Sales & Marketing Manager Sales & Marketing Manager
Expenses- $51,800Expenses- $51,800 Total Marketing Budget $66,800Total Marketing Budget $66,800
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Financial PlanFinancial Plan
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FinancingFinancing
Long Term Debt $500,000Long Term Debt $500,000
Owner's Equity $744,411Owner's Equity $744,411
Total Financing Total Financing $1,244,411$1,244,411
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Dividend PolicyDividend Policy
Dividend paid if:Dividend paid if: Cash flow – (working capital + 15%)Cash flow – (working capital + 15%)
Dividend Policy ScheduleDividend Policy Schedule
2008 2009 2010 2011 2012 2013 2014 2015
12,924
144,870 230,908 284,389 340,736 361,952 368,658 372,944
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Production CostsProduction Costs
Year 2006 - Breakdown of $1.64 production Cost
Durum, 0.21,
13%
Boxes, 0.03,
2%
Packaging
Materials,
0.2, 13%
Operating
and
Marketing
Costs, 0.61,
38%
Overhead,
0.43, 24%
Direct
Labour, 0.15,
10%
Year 2014 - Breakdown of $1.19 Production Cost
Durum,
0.25, 20%
Boxes, 0.05,
4%
Packaging
Materials,
0.23, 18%
Direct
Labour, 0.10,
8%
Operating
and
Marketing
Costs, 0.35,
28%
Overhead,
0.21, 22%
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Sensitivity AnalysisSensitivity Analysis
Best and Worse Case Scenario
0.0%5.0%
10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%
Sel
ling
Pric
e
Qua
ntity
of S
ales
-S
pagh
etti
Qua
ntity
of S
ales
-P
enne
Dire
ctLa
bour
Critical Variables
IRR
Worst Case
Base Case
Best Case
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Prairie Pride Pasta ???Prairie Pride Pasta ???
Feasible under current financial modelFeasible under current financial model Internal Rate of Return – 24.6%Internal Rate of Return – 24.6%
Main obstacle: achieving sales quantity Main obstacle: achieving sales quantity Hiring bold and exciting sales managerHiring bold and exciting sales manager
Sales figures reflect growth that Prairie Sales figures reflect growth that Prairie Pride Pasta will take into the futurePride Pasta will take into the future
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““Prairie Pride Pasta is looking to become a Prairie Pride Pasta is looking to become a recognizable, reputable, as well as profitable recognizable, reputable, as well as profitable business in the value-added sector of business in the value-added sector of Saskatchewan’s economy”Saskatchewan’s economy”