Managing Projects in Bangladesh

Chapter 1.0: Introduction

1.1: Origin of the Report

This assignment was given by honorable course instructor Saleh Md. Zaman, PhD, Assistant Professor, School of Business, as the requirement of the course entitled Project Management to gather knowledge and experience on the managing projects in Bangladesh by focusing the problems and solutions in Bangladesh context.

1.2: Purposes and Problems

This assignment seeks for managing projects in Bangladesh by focusing the problems and solutions in Bangladesh context. Here we focus on the food processing project in mango juice. This assignment helped us define, design, deliver and develop the project process and applying this gathered knowledge to our work associated fields in near future.

1.3: Scope

The scope of this assignment was to identify define, design, deliver and develop the project process and managing projects in Bangladesh by focusing the problems and solutions in Bangladesh context.

1.4: Limitations

When we prepare this report we faced some problems, such as limited time, technical problem and practical problem in communicating people, information need, cost etc. but this limitation does not effect in our project.

1.5: Literature Review

Mango trees (Mangifera indica L.) reach 35-40 m in height, with a crown radius of 10 m. The tree is long-lived with some specimens known to be over 300 years old and still fruiting. In deep soil the taproot descends to a depth of 20 ft, and the profuse, wide-spreading feeder roots also send down many anchor roots which penetrate for several feet. The leaves are evergreen, alternate, simple, 15-35 cm long and 6-16 cm broad; when the leaves are young they are orange-pink, rapidly changing to a dark glossy red, and then dark green as they mature. The flowers are produced in terminal panicles 10-40 cm long; each flower is small and white with five petals 5-10 mm long, with a mild sweet odor suggestive of lily of the valley. The fruit takes from three to six months to ripen.

The ripe fruit is variable in size and color, and may be yellow, orange, red or green when ripe, depending on the cultivar. When ripe, the unpeeled fruit gives off a distinctive resinous sweet smell. In its center is a single flat oblong seed that can be fibrous or hairy on the surface, depending on the cultivar. Inside the seed coat 1-2 mm thick is a thin lining covering a single embryo, 4-7 cm long, 3-4 cm wide, and 1 cm thick.

A ripe mango is sweet, with a unique taste that nevertheless varies from variety to variety. The texture of the flesh varies between cultivars, some having a soft, pulpy texture similar to an over-ripe plum, while others have firmer flesh like a cantaloupe or avocado. In some cultivars, the flesh has a fibrous texture.

1.6: Report Preview

In our report we have define the project by conceptualization and analysis, then design the project process by proposal, justification, agreement, then deliver the project by start-up, execution, completion, handover, finally, develop the process by review and feedback. Our assignment covers the area of Project planning, Project Idea generation, Project analysis, Problem Solving, and Project Administration.

1.7: Sources of Data

For our research, we collect and use the data from two sources:

  • Primary Data
  • Secondary Data

Primary Data:

For collecting primary data we have visited PRAN mango juice factory and office. Interviewed, observation was the method of collecting data.

Secondary Data:

We also use some relevant secondary data from different sources like: published books, journal, website etc.

Chapter 2.0: Define the Project

2.1: Conceptualization

Mango, a highly valued crop in Bangladesh, is also called the king of fruit belongs to the family Anacardiaceae. It occupies an area of 50 thousand hectares with an annual production of 187 thousand metric tones (BBS, 2002). A large number of mango germplasms are grown in the country but the fruits of a few varieties are of
superior in quality. The detailed information of bio-chemical characteristics of different mango  varieties  of Bangladesh is scanty. The information on the bio-chemical characteristics   of         some    mango   varieties  have     been reported by Samad (1975); Hossain (1989); Salunkhe and Desai (1984). But the varieties of which qualities has not yet been explored need immediate study. Therefore, this study was undertaken to assess             detail   information on the bio-chemical characteristics of some mango germplasms grown at Mymensingh, which were not earlier evaluated in Bangladesh, in the summer season, plenty of mango produce, so that excessive mangos are spoil due to preservation problem. On the other hand, people con not get mango on the off-season time.

2.2: Analysis

We will produce and supply mango juice so that, we can preserve or protect mango from spoilage in the summer season, and people can get the taste of mango in the off-season.

Chapter 3.0: Design the Project Process

3.1: Proposal

This proposal will be submitted to:

  • Sponsor
  • Public Offering
  • Bank
  • Regulatory Authority

3.2: Justification

To justify the project we will analyze in the following areas:

  • Market and Demand Analysis: From Market Survey Data
  • Financial Analysis: Projected Cash Flow, Cost of Capital, Evaluation- NPV, IRR, Payback period, Break-Even Point.
  • Technical Analysis: Storage Procedure, Freezing system, Pulp converter, Packaging system, Production procedure, equipment etc.
  • Cost-Benefit Analysis: Project cost and Output, Social Cost-Benefit, Revenue, Employment

 

3.2.1 Market and Demand Analysis

 

Current Marketing Situation:

In the past 10 to 15 years, the juice consumption is increasing with the time. People are more conscious about their health and nutrition. That’s why the marketers meet the customers’ demand by importing different kinds of juice from abroad. But now the domestic companies are getting very interested to juice market. The domestic companies are launching different kinds and flavors of juice in the market. Many new companies are making juice from the domestic produced fruits like orange, mango, litchi, pineapple, strawberry, guava etc.

 

Market Description:

The New born company establishes by offering the new product mango juice. New-born (Pvt.) Limited has the modern technology to provide the high quality juice. It also has the new concept to compete with the domestic as well as the foreign competitors by offering the new products to the market. The company tries to deliver the different sizes of products to the different segment’s customers.

Product Review:

Our product, CHOICE mango juice offers the following standard features:

  • Natural taste of mango along with natural color.
  • No artificial color is added.
  • No preservative
  • Healthy for age people.
  • It is fat free
  • Nutritionally low in calories.
  • Considering as an ideal diet food.
  • Attractive packaging with different sizes
  • Using environment friendly tetra-pack
  • Reasonable pricing system

 

Competitive Review:

In the juice market, there are many juice companies. In Bangladesh, the domestic companies are Pran, Starship, Arong, Danish, Acme and the foreign companies are Shezan, Tiffany, Cyprino, Alowba Dutch Lady, Foster Clarks, and Rasna etc. The domestic companies are producing the juice with the domestic fruits combining different flavors like milk, chocolate, mixed fruits. They differentiate their juices by considering uncommon fruits like tamarind, guava, pineapple, lemon, etc. On the other hand, the foreign companies offer banana, tomato, carrot, apple, papaya, strawberry, leeches, which are uncommon. Both the foreign companies and domestic companies are considering different sizes, attractive package systems for the consumer. These competitors are not keeping the quality consistent. Though they offer different types of flavors, but they cannot maintain the quality. Still there is huge competition between the companies.

Table-1: Competitive Review

Brand

Type

Size

PranMango, Orange, Litchi100ml, 250ml
StarshipMango, Chocolate250ml
DanishMango, Orange250ml
AcmeMango, Orange100ml,250ml, 1000ml

Despite this strong competition, our company can carve out a definite image and gain recognition among the mass people.

Distribution Review:

We want to distribute our product through out the country by our employee distributors in every district. We will facilitate them by our company’s logistical support. They will get the transport and communication facilities. We will build strong value-delivery network rather then only supply chain system. We will emphasis on downstream partners so that our consumer can get our product easily. Our distribution is mass marketing so our most important channel partners being contacted are:

  1. Distributor: New-Born will assign distributor in every district.
  2. Dealer: Dealership will be given to the remote and large area.
  3. Wholesaler: Wholesaler will carry out our product to the retailer.

Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis:

CHOICE mango juice has several strengths depending on which we are ready to produce it. Along with the strengths CHOICE mango juice has basically three main weaknesses. The opportunities are that it is a new concept, enormous target market, and increasing consumer income. The threats are also there. For instance, it is easily duplicable, because of that consumers can switch easily to other brands and lack of infrastructural support.

Strengths:

CHOICE mango juice has five major strengths:

(1) Experienced And Expert Management and Board: We have a very experienced and expert management and board which helps us to produce a good and a very               
      promising new product.

 

(2)    High Quality Product: As we have great experts in our company we can guarantee a high quality product. As mango is a summer fruit and it is a very juicy fruit it self. So the taste of the juice will be exactly like the real fruit, as the juice will be made from real mango. No Preservatives or extra tastes will be added.

(3)    Unique Distribution All Over the Country: We have great distribution channels, which will allow us to distribute the product to every part of the country. And we will make sure that every consumer from every part of the country is getting the product.

(4)    Large Amount of Investment and State-of-Art Technology: We have sufficient amount of capital to invest. So, we can afford to have the best machineries required and the best technology know how to make the product. We have the most modern and fluent machines and state-of-art technology.

(5)    Highly Skilled Human Resource: Our technicians are highly skilled and trained. We make no compromise with quality so, the consumers will get the very best they can.

 

Weaknesses:

As New-Born Co. (Pvt.) Ltd. a new company in foods and beverages market, it may face the weakness of:

(1)Lack of brand awareness: As New-Born Co. (Pvt) Ltd. a new establish company, it is not popular recognition. So, our brand CHOICE mango juice will face competitive brand recognition. Our primary marketing objective is to create product awareness among our target customers.

(2)New taste and flavor: We offer a completely new flavored and tasted juice. Usually other company introduces only traditional juice like- lemon and orange. So our product at first can only tasted by the innovators.

 

Opportunities:

 

There are three basic opportunities:

(1)   Uniqueness- As the mango juice is not a competitively new concept it has a good opportunity to capture the market and the taste of the consumer. It has a totally different color, which is not usual to see in a juice or a drink. The color will attract people and the taste we give will be exactly like the real fruit. In this hot and humid country like Bangladesh it will be a good drink to meet up with your thirst.

(2)   Enormous Target Market – The target market for this juice is huge. This is because we live in a country, which is hot and humid most of the time in a year. Mango is a fruit, which more or less every one in our country knows starting from the rich to the poor. We have set a price by which we can get to any segment. We want everyone to be able to drink this juice, which will not cost much and will be affordable.

(3)   Consumer Income Is Increasing-As our country is on the rise in economy our consumer income is increasing. And as a result of better income the consumers are willing to pay for good commodities. Our product is such a product, which is priced in a way so that most people can consume it.

 

(4)   Legally Protected: Our new product CHOICE brand mango juice is copyrighted and registered. CHOICE is approved by BSTI and its processing is followed by WHO. We also look for the ISO certified.

 

Threats:

There are three threats, which can affect our product:

(1)   Consumers Can Switch: As the product is a liquid and it has just a single flavor the consumers can switch to different brands for more variation in taste.

(2)   Can Easily Be Copied: The product can easily be duplicated by the competitors. Because every one will know about its ingredients and it might easily be copied by other brands.

(3)   Lack of Infrastructural support: Lack of infrastructural support is another threat. Due to lack of infrastructural support the product might be in risk.

Strengths, Weakness, Opportunities, and Threat Analysis

Internal factors

Strength

Weakness

 ManagementExperienced and expert management and boardNew Brand
 OfferingsUnique, high quality productExisting taste and flavor
 MarketingDistribution in the all over the country.
 PersonnelExcellent work force
 FinanceLarge amount of investment
 ManufacturingState-of-the-art technology
 R&DHighly trained technical human resource

External factors

Opportunities

Threats

 Consumer/ SocialEnormous target marketCustomers may switch
CompetitiveUniquenessCan easily duplicable
TechnologicalState-of-the-art technologyLack of infrastructure support
EconomicConsumer income is increasing
Legal / RegulatoryApproved by BSTI and ISO

 

Objectives and Issues:

As we are a new company with a new and a unique product, our initial objective is to position our product in the market. We are not hoping for huge profit in the first year, but our aim is to capture the taste of the consumers in most of the market segments.

First-Year-Objectives:

As we started in February, 2007, our first year objective is total 20,000 liters juice will be sell which price is 1,000,000 BDT and it will capture 3 percent of total market share in juice market.

Second-Year-Objectives:

Our second year objective is to sell 30,000 liters juice, which price is1, 500,000 and we will capture 6 percent market share, and hope to achieve the break-even point.

 

Issues:

Our main issue or focus in to create good brand equity and to capture the juice market industry in Bangladesh. As there are many local brands and some foreign brands in the market, it would be challenging for us to create a position in the market. But as we have adequate amount of capital, so we are ready to bear any sort loss or down fall in the market. And as we believe in never ending quest for quality, our major focus will be to maintain the best possible quality and the best marketing strategy.

 

Demand Forecasting:

  • Chain Ratio Method:

Total amount of mango produced = 187,000 Metric Ton

Proportion of mango produced in North Bengal = 85%

Total amount of mango produced in North Bengal = 158,950 Metric Ton

Proportion of mango used in food processing industry in North Bengal = 15%

Total amount of mango used in food processing industry in North Bengal = 23,842.5 Metric Ton

Proportion of mango used for juice production = 90%

Potential use of mango for juice production = 21,458.25 Metric Ton

 

Marketing Strategy:

New-Born’s marketing strategy is based on a positioning of product differentiation. Our primary consumer target is kids, children and young, where taste will vary at each offering. Our secondary consumer target is health conscious people. This segment can be described demographically by age (1-10, 11-20, 21-30, 31-40, and 41-50).

Our marketing-mix strategy is based on superior performance in the following areas:

  • Product selection
  • Product quality
  • Consumer’s preference

Our marketing strategy will create awareness, interest, and appeal from our target market for what New-Born offers our customers.

Mission:

We will produce quality food items and newer beverage products maintaining the international standard and will price at premium prices while providing challenging career opportunities for employees.

 

Motto:

We do believe in never-ending quest for quality.

 

Goals:

For the coming five years New-born (Pvt.) Limited will try to achieve the following goals

 

Non-financial goals:

  1. To cerate and maintain a very healthy growth of business with desired image ensuring the quality first.
  2. To enter the nook and corner of the country
  3. To add a new product in every 2 years
  4. To ensure optimum utilization of all resources
  5. To be among the top 3 food and beverage companies – regardless of packaging (canned and paper) in one third of the metro markets in which it will compete by 2008 and two thirds by 2010.

 Financial Goals:

  1. To earn a strong profit base and to ensure an adequate return on investment
  2. To obtain a return on investment at least 20 percent
  3. To make it a Public Limited Company and offering of IPO by 2011

Segmentation:

We have segmenting our product by demographically with age (1-10, 11-20, 21-30, 31-40, and 41-50) and generation (kid, child, teenager, young). We also look for the behavioral segmentation like- user status, user rates, loyalty status, readiness status, attitude towards products etc in near future.

 

Target Customers:

After studying the survey we can say that the target customers of the juice are mainly young people. The age range of the young people is 11-20. The kids are also very fond of Juice.

 

Positioning:

           

In the past, juice companies did not offer mango juice. Moreover, they only segmented their product for kids. But Choice is offering mango juice at a reasonable prices, high quality and different tastes for different age. These desirable characteristics will obtain a positioning in consumers’ minds. We mainly focus in unique taste and natural flavor at our product positioning. We will highlight this product as the drink for health-conscious family.

Product Strategy:

We want to keep the original flavor of mango in our every juice-pack so that the customers can get the original taste. No artificial flavors or preservatives will be added to ensure the natural touch. We want to use a little Caffeine to add as extra feature of juice which can ensure the refreshment quality we are claiming.

At the Introduction stage, we want to launch our juice in 3 different sizes:

  • Junior (100 ml)
  • Classic (220 ml)
  • Standard (500 ml)

We should also develop strong brand equity. Our brand name is CHOICE, which will be the automatic choice to the customer. Our slogan will be “A sip for refreshment”.

We also go for attractive packaging. We want to associate Junior/mini-pack with children. We want to use a triangle tetra pack for children. In future, we will introduce different attractive packaging for junior/ mini size. Classic Juice pack will be associated with young generation. We use one-time glass-pack for this size. For Standard (500 ml) size Tetra pack will be used. After the Introduction stage, more product and packaging variation will be offered. Then we will launch family size pack of 1liter.  We should try to use always eco-friendly package.

Then we will focus on labeling of packaging. The label will identify our product. In our label, we should use price, open dating, and nutritional label.

 

Pricing Strategy:

Our company will give comparative benefit to our customer by pricing strategy. Price will be comparatively lower than the competitors in the market. Our pricing objectives will be market share leadership. We will use market-penetration pricing. But, later we will also price-adjustment strategies like- discount and allowance pricing, promotional pricing etc. Our initial pricing will be cost based pricing which is shown in budget section. Our product price will be:

 Price Strategy

Product size

Price

Category

100 ml

7  Tk

Junior

220 ml

13 Tk

Classic

500 ml

26 Tk

Standard

Promotion Strategy:

We want to promote both customers and retailers by promotional offerings. For customers we will offer –

  • Discount
  • In-pack coupon
  • Free sampling in different occasions

For retailers we will offer –

  • Quantity discount
  • Credit purchase
  • Incentives
  • Point-of-purchase Promotion

Advertising:

To widen the name of New-born (Pvt.) Limited, we will select different advertising forms and vehicles. At the introduction stage, the Informative advertising will be introduced. We will use Poster, Banner, Festoon, Billboard, Newspaper, Television and Radio advertising media to reach the mass market.

Distribution Strategy:

We will build up value-delivery network for our marketing channels and supply chain management. We want to distribute our products by employing distributors in every district. We will facilitate them by our company’s logistical support. Our channel strategy is to use selective distribution to have CHOICE sold through nearby stores and shops. During the first year, we will add channel partners until we have converge in all major area and the product is included in the retail shops. We will also investigate distribution through our channel partners.  In support of our channel partners, NEW-BORN will provide demonstration products, detailed specification handouts, and full-color photos and displays featuring the product. We will also arrange special trade terms for retailers that place volume orders. For our channel management, we regular select new channel members, managing and motivating channel members, and finally evaluating channel members. We should design a logistics system to minimize our cost. Our main logistics functions include warehousing, inventory management, transportation, and logistics information management. We will maintain integrated logistics management by cross-functional teamwork both inside and outside the company.

Marketing Communication Strategy:

By integrating all messages in all media, we will reinforce the brand name and the main points of product differentiation. Research about media consumption patterns will help our advertising agency choose appropriate media and timing to reach prospects before and during product introduction. Advertising will appear to maintain brand awareness and communicate various differentiation messages. The agency will also coordinate public relations efforts to build the brand and support the differentiation message. To attract, retain, and motivate channel partners for a push strategy, we will use trade sales promotions and personal selling to channel partners. Until the brand has been established, our communications will encourage purchases through channel partners.

Marketing Research:

Using research, we are identifying the specific features and benefits that our target segments value. Feedback from market tests, surveys, and focus groups will help us develop the CHOICE brand. We are also measuring and analyzing customers’ attitudes toward competing brands and products. Brand awareness research will help us determine the effectiveness and efficiency of our messages and media. Finally, we will use customer satisfaction studies to gauge market reaction.

Marketing Organization:

New-Born’s Marketing Director holds overall responsibility for marketing strategy and direction. Figure-4 shows the structure of the 14 person marketing organization. New-Born will follow the functional departmentalization. New-Born has hired marketing people to handle national sales campaigns, trade and consumer sales promotions, and public relations efforts. Total number of marketing employee is 36.

Action Programs:

NEW-BORN’s new brand of mango juice “CHOICE” will be introduced in February. We make an action program for the next six months. And we believe that, if our six month action programs will run well, then we will achieve our goals easily.

January

In the first month of our action programs we will be to recruit people through newspapers and online for our new product. We will also look for the wholesaler, distributor, and dealer for our channel partner. Then we will collect their information. In the last week of January we will start production.

February

 In the beginning of the February we will arrange a meeting with our dealers. In the meeting we will describe everything about our new product like product quality, benefits etc. And then tell them about our goals. In the last week of February we will make our distribution channel

March

This month we will advertise of our new product in the Television, Radio, Bill board and also poster. Then we will launch our product in to the market. In the primary stage we will launch our juice in 3 different sizes: Junior (100 ml), Classic (220 ml), and Standard (500 ml). And it will be available in the city shops.

April

In the month of April, we will continue our regular production and advertising. We will also take some promotional offer for the consumer. We will set target sell for our channel partners, and who will achieve the target, will get bonus.

May

In May, We will go for larger distribution channel, so that our product can be available almost every shop. We will also go for a consumer survey toward our product, weather they like or dislike our product and why, our packaging system, advertising campaign, promotional offer. We will also identify newer idea for our product like adding caffeine, introducing family pack (1 Liter) etc. This survey will help us to know the position of our new product and to get value from our customer.

June

In June, the last month of our six-month action plan, we will try to bring differentiation in our product and our other strategy plan referring to our consumer survey. We will also observe our distribution channel regularly and support them.

Control

Finally, we have to control the whole marketing strategies. We should follow four steps to control our marketing program. First, we will set specific marketing goals. It then measures its performance in the marketplace and evaluates the causes of any differences between expected and actual performance. Finally, we should take corrective action to close the gaps between its goals and its performance. This may require changing the action programs or even changing the goals. We have the plan to observe the quality and customer service satisfaction closely. The monitoring will helps us in quick response in correcting any problems that may occur. We are also contriving to monitor any deviation from our plan including monthly sales and monthly expenses.

We also take operating control for the short-run, which involves checking ongoing performance against the annual plan and taking corrective action when necessary. Its purpose is to ensure that the company achieves the sales, profits, and other goals set out in its annual plan.

Then we will look for strategic control for the long-run. We follow marketing audit to examine the company’s environment, objectives, strategies, and activities.

Monthly sales target will be set for production as well as sales. If any deviation occurs we will try to fix it instantly and will recover the mishap for ensuring smooth production and sales simultaneously.

Zonal sales target will be set for district territories and it will be monthly compared to the actual sales.

 

Implementation Plan:

In our marketing implementation process, our marketing strategies and plans will turns into marketing actions in order to accomplish strategic marketing objectives. Urban areas and district head-quarters will be treated as the current market and the product will be offered in half prices in front of schools, amusement parks, stadiums, concerts and in the social get-together places to gain the attention.

Sponsored in social event like concerts, sports league, and other social gathering to attract the attention of people will be New-Born’s implemented plan.

 

Product Life-Cycle:

1) Product Development Stage:

In this stage New-Born Company identify and develop the idea of our new product “CHOICE” mango juice. During product development, sales are zero and the company’s investment costs is 1,500,000 BDT.

 

2) Introduction:

In this stage of our product’s life cycle, sales are expected to be low. On the other hand cost per customer will be very high. So, in this stage, we will use cost-plus pricing. Profits will be negative until we reach the break-even quantity which is 50,000 units of sale. We will offer the only brand “CHOICE” in this stage. Distribution will be selective to well-known metropolitan shops and retailers. We will use heavy promotional activities; advertising, personal selling and try to build product awareness among early adopters. Our marketing objectives will be creating product awareness and trial.

 

3) Growth:

In this stage, both sales and profits of our product are expected to rise rapidly. To penetrate the market, we will use average cost per customer. Growing number of both customers and competitors are expected in this stage. We will try to maximize our market share by building intensive distribution. In this stage, we will reduce the promotional activities and will conduct market survey research to know consumer demand. Our marketing objectives will be maximizing market share.

 

4) Maturity:

We expect to have our highest profit in this stage. Peak sales will occur as a result of low cost per customer. Majority of the target consumers are expected to taste our mango juice in this stage. Our objective will be maximizing profits while defending market share. In this stage, we will start to introduce our other brands of mango juice with different features. We will set the price to match or beat competitors. Distribution strategy will be more intensive, that is consumers will be getting our product more easily in nearby stores. Advertising activities will stress brand differences and benefits. Finally we will increase promotional activities to encourage brand switching. Our marketing objectives will be maximizing profit while defending market share.

 

5) Decline:

In this stage of our product life cycle, both sales and profits will be declining. Cost per customer will be low, as we will reduce our expenditures. We will also phase out weak items that are unprofitable. Price will be cut off and promotional activities will be reduced to a minimal level. In this stage, we will again go for selective distribution. Finally, advertising activities will be reduced to level needed to retain loyal customers. Our marketing objectives will be reducing expenditure and milk the brand.

3.2.2 Financial Analysis

Investors are reminded that while projection for future years have been made with due consideration of pertinent factors of historical sales and costs as a going concern, no certainty of its achievement is implied. The assumptions underlying the projection are also disclosed. Prospective investors should read the projections carefully before investment decision is made.

1. Weighted Average Selling Price

 Per PC/KG

5. Working Capital Components

Returnable Glass Bottle Juice

5.22

Raw and Packing Materials in % of Direct cost

30.00%

Plastic Bottle juice

6.96

Work in Progress in % of Direct cost

7.50%

Squash and Syrup

42.9

Stores and Spares on Machineries

2.00%

Canned Juice

30.65

Finished Goods in Days15tk
Trade Debtors  in Days15tk
Increase of Advance, Deposit and Prepayment

10.00%

Liabilities For goods in % of Direct Cost

5.00%

Liabilities For Expenses on Wages and Overhead

10.00%

Liabilities For Other Finance on Sales

5.00%

2. Production Capacity

6. Public Issue

Bottle Juice in Pcs – Existing

2880000

Bottle Juice in Pcs – Expansion

36000000

Shares in Issue

200000

Plastic Bottle Juice in Pcs

4032000

Issue Price TK.

100

Squashes and Syrup in pcs

300000

Issue Size TK.000

20000

Canned Juice in Pcs

356000

Shares Capital – Sponsors TK.000

20000

Shares Capital – Public TK.000

20000

Issue Expenses as % of size

8.00%

Issue Expenses TK.000

1600

7. Other Assumptions

3. Working Capacity

Tex Holiday Reserve

30.00%

Working Days Per Year

300

Interest on Short Term Investment

5.00%

Working Shift Per Days

1

Interest on Term Loan

11.00%

Working Hours Per Shift

8

Workers Profit Participation Fund

5.00%

Amortization of Issue Exp: in Years5tk

4. Price / cost Escalation

Market Sharing – Dhaka city

40.00%

Market Sharing – Outside Dhaka city

60.00%

Selling Price

5.00%

Deferred Advertisement Cost – 1995-963500tk
Raw Materials

5.00%

Deferred Advertisement Cost – 1996-974000tk
Salary and Wages

10.00%

Distributors Commission

8.00%

Production Overhead

7.50%

Administrative and Marketing Expenses

10.00%


Projected Balance Sheet

      
ActualProjected
201020112012201320142015
Fixed Assets Less Depreciation

44125

54030

47196

41399

36474

32281

Current Assets:
Inventory

9704

14939

29539

37386

45442

53400

Dedtors

1578

3136

6275

8053

9868

11653

Advance. Deposit & Prepayments

1279

1500

1650

1815

1997

2196

Investment

0

0

0

20000

40000

65000

Cash and Bank Balances

1929

5271

7407

10191

23623

52401

Total Current Assets

14490

24846

44871

77445

120930

184650

Current Liabilities:
Current Maturity of Term Loan

3333

3333

3333

3333

3333

3335

Liabilities for Goods

1080

1635

3314

4242

5187

6121

Liabilities for Expenses

2399

1533

2988

3396

3711

4087

Liabilities for other Finance

3210

3136

6275

8053

9868

11653

Dividend Payable

0

6000

7200

8000

8000

8000

Total Current Liabilities

10022

15637

23110

27024

30099

33196

Net Working Capital

4468

9209

21761

50421

90831

151454

Preliminary Expenses

6

4

2

0

0

0

Deferred Revenue Expenditure

1408

4287

7193

5300

3800

2300

Issue.Expenses

0

1280

960

640

320

0

Total

50007

68810

77112

97760

131425

186035

Represented By:
Issue Capital

10000

40000

40000

40000

40000

40000

Share Money Deposit

10000

0

0

0

0

0

Tax Holiday Reserve

1152

3593

9996

20341

35340

55124

Retained Earnings

2177

1872

9614

25751

52749

90911

Shareholders Fund

23329

45465

59610

86092

128089

186035

Long Term Loan

16667

13334

10001

6668

3335

0

Sponsors/ Associated Companies Loan

10011

10011

7500

5000

0

0

Total

50007

68810

77111

97760

131424

186035

Earning Forecast      
ActualProjected
201020112012201320142015
Turnover

32731

62711

125490

161055

197366

233054

Less cost of Goods old

22154

43610

82557

101574

120853

140058

Gross Profit

10577

19101

42933

59481

76513

92996

Administrative & Marketing Expenses

5404

8180

18534

21693

23857

26545

Financial Expenses

1952

2108

1742

1375

1008

642

Amortization of Issue Exp.

0

320

320

320

320

320

Operating Profit

3221

8493

22337

36093

51328

65489

Add: Other Income

35

50

75

113

1169

3753

Less: WPP Fund

163

407

1067

1724

2500

3292

Net Profit

3093

8136

21345

34482

49997

65950

Income Tax Provision

0

0

0

0

0

0

Net Profit After tax

3093

8136

21345

34482

49997

65950

Appropriation:      
Tax Holiday Reserve

822

2441

6404

10345

14999

19784

Dividend

0

6000

7200

8000

8000

8000

Retained Earnings B/F

-94

2177

1872

9614

25751

52749

Cumulative Retained Earnings

2177

1872

9613

25751

52749

90915

       
Projected Ratios
ActualProjected
201020112012201320142015
Gross Profit Margin

32.31%

30.46%

34.21%

36.93%

38.77%

39.90%

Net Profit Margin

9.45%

12.97%

17.01%

24.41%

25.33%

28.30%

EPS

15.47

20.34

53.36

86.2

124.99

164.87

EPS Growth

0.00%

31.52%

162.36%

61.54%

45.00%

31.90%

Net Asset Value Per Share      116.62

113.66

149.03

215.23

320.22

465.09

Dividend

0.00%

15.00%

18.00%

20.00%

20.00%

20.00%

PE at Issue Price         6.47

4.92

1.87

1.16

0.8

0.61

Projected Cash Flow Statement     
ActualProjected
201020112012201320142015
Sources of Fund      
Internal Sources      
Net Profit

3093

8136

21345

34482

49997

65946

Depreciation

4096

5475

6834

5797

4926

4193

Amortization of Preliminary & Deferred Exp.

623

623

1096

1895

1500

1500

Amortization of Issue Expenses

0

320

320

320

320

320

Sub Total

7812

14554

29595

42494

56743

71959

External Sources      
Share Capital

0

20000

0

0

0

0

Long from Sponsors

4754

0

0

0

0

0

Sub Total

4754

20000

0

0

0

0

Total

12566

34554

29595

42494

56743

71959

Uses of Fund
Repayment of Term Loan

0

3333

3333

3333

3333

3333

Repayment of Sponsors Loan

0

0

2511

2500

5000

0

Addition to Fixed Asset

12662

15380

0

0

0

0

Issue Expenses

0

1600

0

0

0

0

Deferred Revenue Expenditure

0

3500

4000

0

0

0

Payment of Dividend

0

0

6000

7200

8000

8000

Sub Total

12662

23813

15844

13033

16333

11333

Incresde or Decrease in Working Capital       
Inventories

-30

5235

14600

7847

8057

7958

Debtors

514

1558

3139

1778

1816

1784

Advance, Deposit, Prepayment

-451

221

150

165

182

200

Investment

0

0

0

20000

20000

25000

Liabilities for Goods

-129

555

1679

927

946

933

Liabilities for Expenses

-449

-866

1455

407

315

376

Liabilities for other Finance

1613

-74

3139

1778

1816

1784

Sub Total

-1002

7398

11616

26677

26978

31848

Increase or Decrease in Liquid Fund       
Cash & Bank Balance

906

3342

2136

2783

13432

28778

Total

12566

34553

29596

42493

56743

71959

Projected Turnover
Production Capacity2010-112011-122012-132013-142014-15
Returnable Glass Bottle Juice in Pcs

11,880,000

38,880,000

38,880,000

38,880,000

38,880,000

Plastic Bottle Juice in Pcs

2,352,000

4,032,000

4,032,000

4,032,000

4,032,000

Squash & Sherbet in Pcs

300,000

300,000

300,000

300,000

300,000

Canned Juice in Pcs

356,000

356,000

356,000

356,000

356,000

Jams & ketchup in Pcs

152,000

152,000

152,000

152,000

152,000

Pickles in Pcs

230,000

230,000

230,000

230,000

230,000

Dehydrated Products in Kg

200,000

200,000

200,000

200,000

200,000

Farming Products in Kg

500,000

500,000

500,000

500,000

500,000

Total

15,970,000

44,650,000

44,650,000

44,650,000

44,650,000

Capacity Utilization:
Returnable Glass Bottle Juice

35%

30%

35%

40%

45%

Plastic Bottle Juice

30%

40%

50%

60%

65%

Squash & Sherbet

25%

35%

45%

55%

60%

Canned Juice

60%

65%

70%

70%

70%

Jams & ketchup

30%

40%

50%

60%

70%

Pickles

40%

50%

60%

70%

70%

Dehydrated Products

20%

30%

40%

50%

60%

Farming Products

40%

50%

60%

70%

75%

Total

35%

32%

37%

43%

48%

Production and Import
Returnable Glass Bottle Juice in Pcs

4,158,000

11,664,000

13,608,000

15,552,000

17,496,000

Plastic Bottle Juice in Pcs

705,600

1,612,800

2,016,000

2,419,200

2,620,800

Squash & Sherbet in Pcs

75,000

105,000

135,000

165,000

180,000

Canned Juice in Pcs

213,600

231,400

249,200

249,200

249,200

Jams & ketchup in Pcs

45,600

60,800

76,000

91,200

106,400

Pickles in Pcs

92,000

115,000

138,000

161,000

161,000

Dehydrated Products in Kg

40,000

60,000

80,000

100,000

120,000

Farming Products in Kg

200,000

250,000

300,000

350,000

375,000

Imported Tetrapacked Juice in Pcs

320,000

480,000

528,000

580,800

638,880

Total

5,849,800

14,579,000

17,130,200

19,668,400

21,947,280

Inventory in Hand
Returnable Glass Bottle Juice in Pcs

207,900

583,200

583,200

777,600

874,800

Plastic Bottle Juice in Pcs

35,280

80,640

80,640

120,960

131,040

Squash & Sherbet in Pcs

3,750

5,250

5,250

8,250

9,000

Canned Juice in Pcs

10,680

11,570

11,570

12,460

12,460

Jams & ketchup in Pcs

2,280

3,040

3,040

4,560

5,320

Pickles in Pcs

4,600

5,750

5,750

8,050

8,050

Dehydrated Products in Kg

2,000

3,000

3,000

5,000

6,000

Farming Products in Kg

10,000

12,500

12,500

17,500

18,750

Imported Tetrapacked Juice in Pcs

16,000

24,000

24,000

29,040

31,944

Total

292,490

728,950

728,950

983,420

1,097,364

Quantity Sales
Returnable Glass Bottle Juice in Pcs

3,971,203

11,288,700

11,288,700

15,454,800

17,398,800

Plastic Bottle Juice in Pcs

670,320

1,567,440

1,567,440

2,399,040

2,610,720

Squash & Sherbet in Pcs

84,406

103,500

103,500

163,500

179,250

Canned Juice in Pcs

224,655

230,510

230,510

249,200

249,200

Jams & ketchup in Pcs

45,158

60,040

60,040

90,440

105,640

Pickles in Pcs

95,924

113,850

113,850

159,850

161,000

Dehydrated Products in Kg

39,464

59,000

59,000

99,000

119,000

Farming Products in Kg

190,168

247,500

247,500

347,500

373,750

Imported Tetrapacked Juice in Pcs

304,000

472,000

472,000

578,160

635,976

Total

5,625,298

14,142,540

14,142,540

19,541,490

21,833,336

Weighted Average Selling Price in Taka
Returnable Glass Bottle Juice Per Pc

5.22

         5.48

5.75

6.04

6.34

Plastic Bottle Juice Per Pc

6.96

         7.30

7.67

8.05

8.46

Squash & Sherbet Per Pc

42.90

       45.04

47.30

49.66

52.14

Canned Juice Per Pc

30.65

       32.18

33.79

35.48

37.26

Jams & ketchup Per Pc

37.52

       39.39

41.36

43.43

45.60

Pickles Per Pc

30.70

       32.23

33.84

35.53

37.31

Dehydrated Products Per Kg

350.00

     367.50

385.88

405.17

425.43

Farming Products Per Kg

24.83

       26.08

27.38

28.75

30.19

Imported Tetrapacked Juice Per Pc

12.00

       12.60

13.23

13.89

14.59

Turnover in ‘ 000 Taka
Returnable Glass Bottle Juice

20,719

61,842

77,716

93,344

110,339

Plastic Bottle Juice

4,663

11,449

15,307

19,320

22,075

Squash & Sherbet

3,621

4,662

6,314

8,119

9,347

Canned Juice

6,886

7,419

8,391

8,843

9,285

Jams & ketchup

1,694

2,365

3,112

3,928

4,817

Pickles

2,944

3,669

4,631

5,680

6,007

Dehydrated Products

13,812

21,683

30,484

40,112

50,626

Farming Products

4,723

6,454

8,145

9,990

11,282

Imported Tetrapacked Juice

3,648

5,947

6,954

8,032

9,276

Total

62,710

125,490

161,054

197,368

233,054

Projected Cost of Sales
Quantity Sales2010-112011-122012-132013-142014-15
Returnable Glass Bottle Juice in Pcs3,971,20311,288,70013,510,80015,454,80017,398,800
Plastic Bottle Juice in Pcs670,3201,567,4401,995,8402,399,0402,610,720
Squash & Sherbet in Pcs84,406103,500133,500163,500179,250
Canned Juice in Pcs224,655230,510248,310249,200249,200
Jams & ketchup in Pcs45,15860,04075,24090,440105,640
Pickles in Pcs95,924113,850136,850159,850161,000
Dehydrated Products in Kg39,46459,00079,00099,000119,000
Farming Products in Kg190,168247,500297,500347,500373,750
Imported Tetrapacked Juice in Pcs304,000472,000525,600578,160635,976
Total5,625,29814,142,54017,002,64019,541,49021,833,336
Weighted Average Direct Cost in Taka
Returnable Glass Bottle Juice Per Pc2.832.973.123.283.44
Plastic Bottle Juice Per Pc3.643.824.014.124.42
Squash & Sherbet Per Pc22.0423.1524.3025.5226.79
Canned Juice Per Pc15.3816.1516.9617.8118.70
Jams & ketchup Per Pc18.2519.1620.1221.1322.18
Pickles Per Pc14.8415.5816.3617.1818.04
Dehydrated Products Per Kg169.00177.45186.32195.64205.42
Farming Products Per Kg11.6312.2212.8313.4714.14
Imported Tetrapacked Juice Per Pc8.508.939.379.8410.33
Direct Cost of Sales in ‘ 000 Taka
Returnable Glass Bottle Juice11,23933,54442,15550,63159,850
Plastic Bottle Juice2,4405,9918,01010,10911,551
Squash & Sherbet1,8612,3963,2444,1724,803
Canned Juice3,4563,7234,2114,4384,659
Jams & ketchup8241,1501,5141,9112,343
Pickles1,4231,7742,2392,7462,904
Dehydrated Products6,66910,47014,71919,36824,445
Farming Products2,2123,0233,8164,6805,285
Imported Tetrapacked Juice2,5844,2134,9265,6896,571
Total Direct Cost32,70866,28484,834103,744122,411
Contribution Margin in ‘ 000 Taka30,00359,20776,22293,623110,643
Production Wages2,0002,5002,7503,0253,328
Production Overhead:
Salaries & Allowance2,2004,0004,3004,6234,969
Energy Cost1,3002,0002,1502,3112,485
Cold Storage rent400500538578621
Carriage Inward350800860925994
Repair & Maintenance300600645693745
Insurance100150161173186
Sundry Expanses500800860925994
Total Production Overhead5,1508,8509,51410,22810,994
Depreciation3,8715,2004,4873,8763,352
Total Conversion Cost

11,021

16,550

16,751

17,129

17,674
Change in Conversion Cost of Stock

-118

-276

-10

-19

-27
Cost of Sales

43,610

82,557

101,574

120,853

140,058
Administrative & Selling Overheads
Administration & Selling Overhead2010-112011-122012-132013-142014-15
Director’s Remuneration

0

600

660

726

799

Salaries & Allowance

2,500

4,500

4,950

5,445

5,990

Traveling & Conveyance

200

500

550

605

666

Printing & Stationery

150

200

220

242

266

Postage, Telephone & Fax

150

200

220

242

266

Energy Cost

225

300

330

363

399

Fees & Charges

120

150

165

182

200

Office Rent

480

480

528

581

639

Repairs & Maintenances

400

750

825

908

998

Insurance

25

50

55

61

67

Sales Promotion & Advertisement

500

750

825

908

998

Distributors’ Commission

753

6,024

7,731

9,474

11,187

Carriage Outward

250

1,000

1,100

1,210

1,331

Amortization

623

1,096

1,895

1,500

1,500

Sundry Expenses

200

300

330

363

399

Depreciation

1,604

1,634

1,309

1,049

841

Grand Total

8,180

18,534

21,693

23,859

26,546

Working Capital
Working Capital Components:2010-112011-122012-132013-142014-15
Raw & Packing Materials

9,812

19,885

25,450

31,123

36,723

Working in Process

2,453

4,971

6,362

7,781

9,181

Finished Goods

2,215

4,224

5,115

6,080

7,038

Stores & Spares on P & M

458

458

458

458

458

Total Inventory

14,938

29,538

37,385

45,442

53,400

Debtors

3,136

6,275

8,053

9,868

11,653

Advance, Deposit & Prepayment

1,500

1,650

1,815

1,997

2,196

Current Liabilities
Liabilities for Goods

1,635

3,314

4,242

5,187

6,121

Liabilities for Expance

1,533

2,988

3,396

3,711

4,087

Liabilities for Other Finance

3,136

6,275

8,053

9,868

11,653

Total Current Liabilities

6,304

12,577

15,691

18,766

21,861

Long Term Loan
2010-112011-122012-132013-142014-15
SABINCO Term Loan:
Balance as on 01 July

16,667

13,334

10,001

6,668

3,335

Transfer to Current Liabilities

3,333

3,333

3,333

3,333

3,335

Balance as on 30 June

13,334

10,001

6,668

3,335

0

Current maturity of Term Loan
Balance as on 01 July

3,333

3,333

3,333

3,333

3,333

Transfer from Term Loan

3,333

3,333

3,333

3,333

3,335

Repayment of Loan

3,333

3,333

3,333

3,333

3,333

Balance as on 30 June

3,333

3,333

3,333

3,333

3,335

Interest on Term Loan @11%

2,108

1,742

1,375

1,008

642

3.2.3 Technical Analysis

 

Introduction

Processing is one of the most effective solutions to reduce the wastages. In Bangladesh processing of fruits and vegetables is extremely low and is below 2%. Value addition to the raw produce is only 7% compared to as much as 23% in China, 45% in the Philippines and 88% in the UK. Thus the processing (including value addition through post harvest management) industry holds tremendous potential not only for contributing to the GDP but also for generating employment in rural areas and business opportunities for entrepreneurs.

Among various processing technologies (canning, dehydration, pickling, provisional preservation, bottling etc), freezing is one of the most popular methods for preservation of foods. Main advantages of freezing technology include:

  • Preservation of produce for 9-12 months without changing the basic characteristics and nutritional value of the food
  • No preservatives are used
  • Cost of processing is relatively less as compared to canning, bottling etc.
  • The product is hygienic
  • Convenience and off season availability

On the other hand there are certain special requirements such as maintenance of cold chain all through the sales channel and high power requirement for freezing and storage.

In last couple of years frozen mango pulp has become very popular in retail market. Even second rung cities like are becoming quite attractive and major players have set up distribution network in these cities.

 

Objective

The primary objective of the model report is to facilitate the entrepreneurs in understanding the importance of setting up such a unit, technology and financial parameters of various components for preparation and submission of project proposal to bank for sanction of long term loan. This model report will serve as guidance to the entrepreneurs on starting up such a new project and basic technical knowledge for setting up such a facility.

 

Capacity

The annual capacity of the project offer BMRE will be as follows:

Production lineBMRE
Glass bottle juice in pcs2880000         36000000     38880000
Plastic bottle juice in pcs4032000               –                4032000
Squashes and sherbet in pcs300000                –                 300000
Canning planet in pcs356000                 –                356000

The capacity is based on single shift a day of eight hours and 300 working days per year.

 

Land and capacity:

The project is located at Ghorashal, Polash, at Norsingdi on freehold land of about 7.09 acres. The plant is about 90 minutes by road from Dhaka city. Good road, river and railway communication are available site. The infrastructural facilities like gas electricity banking and so on etc are considered adequate for the project. NO additional land is required for proposed expansion.

Building and civil works:

Major civil constriction consists of main factory building warehouse boiler room, cold storage office workers shed agricultural stores peeling shed etc. main factory building and ware house is rectangular type’s pucca construction and others are semi-pucca construction with brick wall and CI sheet roof. The factory building has a covered area of 46500 sft. The company is going to expand its covered area by 12800 sft for expansion program.

Plant and machinery:

The plant and machinery for the existing project have been procured under the guidance of the project consultant the major machineries have been imported from Taiwan, Pakistan and USA and others have been locally procured. The plant has adequate flexibility to regulate the product mix in accordance with market requirements. The plant includes all necessary accessories together with power generator modern testing equipment and quality control units. The additional machinery for balancing and expansion to be produced includes filling and crowning unit having capacity of 250 bottles per minute, pasteurization unit 3 no SS Blending tanks having capacity of 4000 liter homogenizer of 4000 liter/hr, mango juice evaporator, and so on.

Utilities:

Power:

Existing connected load of the project is 75 KW which has already been provided to the project by Bangladesh power development board. To provide this power BPDB has installed one 100 KVALT pole mounted transformer at the site. For additional machinery a load 200 KW would be required which is to be produced provided by BPDB.

Water:

Water is required for mango washing processing of fruits boiler sanitation and human consumption. Total requirement of water about 11210 gallons per hour is available from the projects own deep-tube well with purification and deionization plant.

Steam:

Required steam is available from projects existing boiler.

Fuel and lubricants:

Annual requirements of natural gas lubricants grease etc. after BMRE has been estimated as follows:

Transportation:

Transportation is required mainly for procurement of raw materials chemicals and packing materials for delivery of mango juice can to the dealers. At the present the company owns 3 ton truck, 9 pick ups and 19 delivery vans. Besides, micro buses have been purchased by the company for transportation. In addition a huge capital is reserved for expanding the value delivery network to spread our product.

Waste disposal:

Only waste of the project will be used for feeding the animal. The company has NOC of environment directorate of the government of the project.

Human resource management:

Market is competitive. So we will consider the cost effective concept for making profit. We will consider one production house for producing mango juice in front of the store house. For operating the machineries and equipment we will hire some expert employee than hire 1000 employee for operation and processing. If our proposed financial assessment can be met then we will hire additional employee. Besides operation we will consider some experts of accounts and finance department for running the company. As a manufacturing company we recruit human for expanding our project.

Raw materials:

The major raw materials are mango and several type of plastic can tin bottle crown cap lug cap labels and so on. Mango pulp is made in the projects processing plant fro locally procured mango. For consumption during off season fruits are processed in peak season are preserved in rented cold storage. Most of the chemicals and additives are locally purchased. All the packing materials except wooden crates labels plastic containers and net bags are imported.

Quality control:

While processing mango juice go through strict hygienic and other qualitative tests. The projects own have laboratory for carrying out required tests. Besides we will consider the BSTI test result for running the production.

Tax   Exemption/Holiday:

The Company’s Farming unit is enjoying tax exemption up to 30.06.2020 vide SRO NO.309-L/91 dated 09.10.2000 issued by the National Board of Revenue. The Manufacturing Unit is enjoying tax holiday for 10 years with effect from 01.07.2010. The expansion in the manufacturing will also enjoy tax holyday for the same period.

Process description for Mango Juice:

Procedure

(in sequential order)

Description

Grower StorageProduce arrive at the plant for processing.

InspectionSamples of the unprocessed produce are taken to be graded and for grower payment.

Raw ReceivingUnprocessed produce is off-loaded from trucks and inspected to decide if it requires sorting. In case of mangoes, the produce is first ripened

PeelingUnprocessed produce is pealed.

CuttingThose products as may require cutting are cut according to buyer specifications. A special cutting equipment is proposed for the unit

GradingPieces that are too small or misshapen are removed from the main processing line and used in other products.

BlanchingProduct requires blanching at 160o-180oF for 15-40 minutes to remove natural sugars, stabilize enzymes, and create a good texture.

Pre-cool Blanched produce is pre-cooled at 0oF for 15 minutes before entering the freeze tunnel.

Freeze TunnelProduce is quickly frozen for 30 minutes at -40oF.

PackagingThe frozen products are packaged into bags.

WarehousePackages are stored in a cold storage warehouse until shipment to grocery stores, restaurants and other customers.

 

 Mango processing line:

(Freezing system 1000 MT/hr)

  • Pre-cooling belt
  • Freezing tunnel
  • Air-moto condensing plant with screw compressor for pre-cooler and injection refrigeration plant for freezing tunnel with 3 nos. double screw compressor

 

Packaging system:

  • Transporting belt
  • Inclined belt for feeding to weighing machine
  • Weighing machine
  • Form filling and sealing machine
  • Pick-up conveyor
  • Air compressor

Capacity of Plant:

The planned capacity of the unit is 2498 Mt per annum.

Project component and cost:

PARTICULARSAMOUNT
LAND201.04
BUILDING394.91
PLANT & MACHINERY464.87
MISC. FIXED ASSETS33.50
CONTINGENCIES109.43
PRE-OPERATIVE EXPENSES173.50
MARGIN MONEY FOR WORKING CAPITAL81.61
 1458.88 Lakh Taka

Plant and Machinery:

The main machineries required are following

FEEDING CONVEYOR
DEPODDER
WASTE CONVEYOR
GRAIN HANDLING SYSTEM
INSPECTION CONVEYOR
WASHER
BLANCHER
COOLER/CHILLER
VIBRATOR
Inclined conveyor with food grade belt
PEELING CONVEYOR WITH WASTE
DISPOSAL SYSTEM
SHIFTING CONVEYOR
FEEDING TO IFQ, TANK-PUMP
FINISHER-TANK-PUMP
PHE ( 5 STAGES)
TANK- FILLING -PARKING

 

Building:

The building development charges would cost around Taka. 394.91lakhs.

 

Miscellaneous Assets:

A provision of Taka.33.50 lakhs would take care of all the requirements.

3.3: Agreement

  • Agreement with source of fund
    • Bank
    • Equity holder
  • Agreement with supplier of mango
  • Agreement with wholesaler, retailer

Chapter 4.0: Deliver the Project

 

4.1: Start-up

  • Collect mango
  • Reserve in cold storage
  • Assemble the equipment
  • Assign the task to the employee

 

4.2: Execution

  • Convert mango into juice
  • Packing, storing
  • Continue the operating activities

 

4.3: Completion

  • Ensure quality by a team of quality controller, inspector
  • Set up Lab for ensure and develop the quality

4.4: Handover

 The project will be full commercial on January 2010.

Chapter 5.0: Develop the Process

 

5.1: Review

  • Find out errors & omissions
  • Identify the problem
  • Check-out the whole process

 

5.2: Feedback

  • Quick solution of problem
  • Better improvement of product

6.0: Problems and Solutions

Risk Factors:

Any of the following factors might affect adversely the profitability of the Company:

  1. Any upward change in the price of raw and packing materials and difficulty in its availability may adversely affect its performance.
  2. Any adverse change in Government policy like increase of duty and taxes on chemicals & packing materials.

Management’s Perception of Factors:

  1. Since the Company has made adequate provision to care of escalation in the price of raw & packing materials and maintain adequate inventory for smooth operation, it does not foresee any adverse effect in its performance.
  2. Under the GATT agreement where Bangladesh is also a signatory, tariff barriers are to be slowly lowered. Bangladesh is pursuing this policy quite aggressively, therefore it is envisaged that duty will at least remain in the current level, if not further lower.

 

Problem and solution of Mango Fruit Juice:

We have undertaken mango juice production project. As a manufacturing company several problems that a manufacturing company need to face. Three problems are common for manufacturing company.

Disequilibrium:

Disequilibrium occurs when a business is out of whack and nothing seems to be going right. Different departments (production, accounting, sales, estimating, planning, and production) blame each other for all the company’s woes. Material is not purchased on time, or not enough material is purchased. The tooling isn’t right. There’s lots of grumbling and finger pointing. What the company needs is a plan to pull things together, to get everyone going in the same direction.

Outdated Technology:

New technology is needed when there is a major shift in development, or possibly when you are anticipating a major new contract or product enhancement. Perhaps you must get new equipment in order to meet the new productivity and pricing requirements. Perhaps you need to develop new ways of doing things to meet new challenges. Of course, new equipment usually means additional training, too.

 

Moving Away from the Base:

A company can easily move away from its original base when it is doing work it never intended to do. You now have contracts with large companies, tight deadlines, higher production costs, specialized customer-driven quality control, and complex manufacturing requirements. If you’ve been forced— whether through poor decisions, good decisions, or just the nature of things—into areas you’re unfamiliar with, you need help focusing on how to handle new developments.

 

Local bottlenecks:

The mango fruit sub sector is hampered by high costs in transport and lack of value addition. This is causing the following:

• Value addition and packaging: “Absence of professional processing services and no varied packaging”. This is leading to high losses from spoilage (during transport and from melon fly) in transporting only fresh melons.

Solution:

The factory will extract and process mango into concentrate, juice. Other fruit products will not be added to the line. The mango juice has to be bottled for sales in local market and/or export market.

The juices will have to be packaged into carton tetra packs for direct sales at local markets.

 

Management:

(a) Services mango processing.

(b) Organizational model Factory set ting.

(c) End products Concentrate / Juice.

(d) Estimated employment 204 people.

 

Economic Viability:

Market for syrup is not clear. Market for concentrate is not high volume. Juice would require cold storage and large scale facility.

i. Investment required:

Overall investment is substantial, even if low-cost extracting and processing equipment can be found, because packaging has to be added.

• Depends on the availability of low-cost extracting and processing equipment

• Bottling line

• Packaging line: 9812000

• Generator: 225000

• Cold Storage: minimum of 351356

• Above budget

ii. Operational budget:

• Raw materials and additional supply that will need to be imported

• Packaging material

• Electricity/fuel

• Salaries

Technical Feasibility:

Technical Assistance Required

• Management Support

• Access to finance

• Marketing/BDS Training

• Technical Training

iii. Technical resources:

• Mango: Only seasonal. Processing will have to take place immediately to prevent perishing.

• Electricity:   uninterrupted supply of electricity is a major challenge

• Skilled labor: for operating equipment are not there. Laborers have to be trained to learn to follow strict hygienic procedures.

• Availability of other ingredients.

• Equipment: available in China, India,

 

Other considerations:

• The business concept would only work when other fruit juices will be added.

• Factory environment may not be suitable for (remote based) women.

• Electricity may not be reliable

• Largely seasonal business between July and November.

Constraints:

• Limited access to export markets (flying is too expensive).

• Occurrence of wastage mango in raw materials

Preliminary analysis / impact:

Employment: 204 people / based on team estimation.

Involvement of women: Women can be directly employed in the factory.

Marketing channels: Improved product will diversify links to higher grade buyers.

Rural incomes: Local people will be involved in the factory. Farmers’ income will also increase indirectly, as market-mechanism will strengthen their position to negotiate prices with the buyer, when demand for almonds increase and production levels stays the same.

Industry:

Increased income for entire sub sector, as added-value will increase the price of the end products and end-products can be sold throughout the season, generating additional income throughout the year instead of seasonal. New products may also have the ability to reach new markets, while avoiding product loss during transportation and high transportation costs of raw mango.

 

Chapter 7.0: Conclusion

In this project, the New-Born Company will produce Choice Mango Juice from January 2010. The project idea was generated from secondary sources and supported by feasibility testing. The project will ensure all the information provided in this plan by actively commercialization process. The mango juice project is a manufacturing project, so that its function will be a continuous process. The primary objective of the model report is to facilitate the entrepreneurs in understanding the importance of setting up such a unit, technology and financial parameters of various components for preparation and submission of project proposal to bank for sanction of long term loan. This model report will serve as guidance to the entrepreneurs on starting up such a new project and basic technical knowledge for setting up such a facility.

 Managing Projects in Bangladesh