Business plan for a fruit processing company

Business plan for a takings treat go withOur Business Plan ordain be ab come in fruit processing. This entrust reduce fruits post harvesting loss by processing fruits in syrups and concentrates.This will help middle and low income eaners as we find at that place is lofty need of fresh fruits succus as some of fresh fruits succus ar imported and sold in high price which normal Tanzania citizen bevel squ be afford.Our company will be situated in Korogwe Tanga where on that point are many firms. Company has three partners, Mildred, Sophia and Saja.ABRIVIATIONASDP unsophisticated Sector maturement ProgrammeASDS Agricultural Sector Development StrategyBIT Board of Internal TradeDACHE Dar Es Salaam College of Home Economics LtdGDP Gross Domestic crosswayHKMU Hubert Kairuki Memorial UniversityMAFC Ministry of agriculture Food Security and CooperativesMITM Ministry of Industries Trade and commercialiseingNARS National Agricultural Research InstitutePASS Private Agricultural Sector put upSIDO Small Scale Industries Development OrganizationSIDP Sustainable Industry Development ProgrammeSUA Sokoine University of TanzaniaTDV Tanzania Development VisionTFDA Tanzania Food Drugs and Cosmetics AgencyUDSM University of Dar es Salaam art PLAN1.0 Executive summaryThe current agriculture potentiality contri furtheres about 26.5% of GDP and it provides employmentment about 70% of total labour force. Tanzania set abouts a mental image of fruit including topical and temperate. The yearbook harvest-tide of fruits is 678,515MT (this is 5% of potential area exploited) tanserve n.dAgro processing in the industrial sector is indeed genius of the underdeveloped zep sectors and according to a report by Commonwealth Secretariat (1997) it was seen to consume about 1% of the horticultural naked as a jaybird materials produced in Tanzania as compared to 80% in Malaysia which also is in the category of developing country practical execution n.dAgro processing and espe cially small -scale processing is becoming very important in the country as means to reduce crop losses and value addition at fruit and collection sites and a way of income generating activity.practicalaction n.dHowever, the sector experience losses during and afterward harvest. Post harvest losses of fruits and veggies are estimated at 50 to 80%. These losses are more meaningful economically compared to the cost of compensating for losses through increased crop mathematical production. Losses are caused by among an separate factors, mechanical, physical and biochemical aspects.SOMIL intends with this financial and economical projection the idea will bring bare-assed concept in a market and good strategies which will enable the company to acquire a good market position initially the company may have up and downs of in the altogether start but with the partner potentiality gradual the sales may increase once SOMIL gets good eyeball to watch over it operations.A daily productio n of between 2000 and 3000 kilograms of fruit product is estimated to be obtained from an input of between 2000 and 3000 kilograms of fruit pulp/product is estimated to be obtained from an input of 5000 kilograms. Production time per annum is estimated to be 240 days. And the project intends to employ 22 people and it is an investment of Tshs. 300,000,000.00 which will realize Tshs 144,000,000.00 in year five times. wide-cut production costs are estimated at Tshs. 290,000,000.00 in year one gradually rising in years two and three then irrigate slip by in year five onwards.Project cash flow is favourable, it will start making profits from the world-class year of the project and all loans be re compensable by third year of operation. This will be showing clearly in financial.2.0 THE BUSINESS2.1 The opportunityAccording to government record and statistics show the annual production of fruits to be 678,515MT, but this is only 5% of the potential area exploited and this can be caused b y lack of where to send the increased production.2.2 command to be filledThis project so as to say will focuses on increasing fruits usability which experience enormous looses especially during the gruntle and create virgin opportunities for industrial consume in rural areas through processing of fruits for fresh juice.More so, the initiator of this idea is a professional expert in the dramaturgy of post harvest processing, having a long margin experience in offering knowledge to small scale food processors and food interposeprises and managed to experience a shit them grow to a medium scale electrical condenser.2.2.1 How the proposed business will fills the needWith the capacity of operation which business plan to operate in, the company will process fruits for juice which will be consumed by low and medium income earners who are not able to buy exported fresh fruit juice.3.0 Company and Company history ab initio idea was brought by one of the partner who is professional in a filed and she has long term experience in food processing later on the idea was joined by two different partners who contribute in capital invested.3.1 Company mission statementTo provide 100% satisfaction by offering fruit in syrup and fruit concentrates of the highest role, impeccable services, guaranteeing accurate supply, fast canty and developing strong likenessships with farmers and medium to small scale fruits processing business and entrepreneurs.3.2 Our visionSOMIL forecast to be competitive in service while taking on prior responsibilities that are pertinent to our clients needs through producing strict quality and safe products, for health and economical satisfaction.3.3 Company objectiveThe products to be made include quality and safe fruits of the season concentrates and fruits in syrup. neutrality will govern the products made since raw materials will basically comprise of fresh, mature fruits of the season without non-fruit fortification. SOMIL products a re intermediate since they form raw material to juice making, wine making and fruit salads to other small to medium scale industries. Availability regard slight seasonality forms another break value to SOMIL products.The main objective is to interpret sustainable economic, food and edible security by seasonal reduction of fruits post harvest loses by 10% through processing.3.4 Specific objectivesTo ensure the proof of fruit concentrate and fruits in syrup industry is in place by end of year one of the project inceptionTo establish catch links with stakeholders who will daily deliver to the industry quality seasonal fruits for processingTo continuously encourage and support value addition to seasonal fruits so that the farmers are economically empoweredTogether with farmers and other stakeholders of the project area, to reduce the post harvest losses by 50% through fruits processing by year 2013To continuously support technology developments in the post-harvest system according to zonal conditions, climatically, and socio-culturally and according to the needs of the clients for effective and sustainable accessibility of the industrys raw material.4.0 agonistic ADVANTAGEFruit concentrates and fruits in syrup are made from fresh fruits of the highest quality, maturity, and health from both temperate and tropical zones. The fruits have to be selected and graded through a rigorous quality control system so that all of our products have the best flavors and nutrient content that meet the national and international quality and asylum parameters and understructureards. The products made by SOMIL will be raw material to other secondary fruit products that include among others juices, wines, fruit salads and fruit based products. wad packaging will govern the products and minimum carriage weight will be 20 kilogram and maximum 200 kilogram drums.Literature freshen up and a study visit to few industries in Dar es salaam indicates about 16medium scale and 300 sm all scale prospective competitors, however, paste, fruit concentrates and fruits in syrup are not their core activities to any of these companies. They specialize in finished products of this semi finished products. Similarly, the demand for SOMIL products especially during off seasons in which consumers recess to imported pastes and fruit concentrates is prospectively high. Furthermore, customers of secondary products (finished products) have become health conscious, which add to the unique selling auspicate of the company products. The company is reputed of having competent employees both professionally and aggressiveness to deliver as per vision of the company.4.1 Description of the business modelThe company will deliver its products in the first come first served basis. Since constitution of business entail quality and safe semi finished products than enterprises of finished products will certainly find them highly convenient both as a time saver as well as all-seasons produ cts. Despite the presence of few competitors the demand is rarely met, also they utilize mostly the imported concentrates that are generally fortified with non fruit material thus reducing the products nature and quality. Consumers of the finished products have become health conscious which adds to the unique selling point of SOMIL products as they are naturally made from whole fruits and vegetables with nothing added hence making the product whole, fresh and nutritional. The company is reputed of having competent employees both professionally and aggressiveness to deliver as per vision of the company.4.2 How the business will create a sustainable competitive advantageProduction cost govern to a bighearted extent pricing strategy but also comparisons have to be made with competitors prices so a not to be very different for a product of similar or near similar. Other quality parameters such as health impact, intellectual property etc will also be interpreted in the setting. Accordi ng to studies on food habits conducted by use of a case study of Dar es Salaam, consumers reported to be willing to pay a footling more for a healthy product especially when they are ensured of its quality and safety (Mjawa, 2003) For this reason, if a small price difference is set (ceteris peribus), it will make the business sell few volumes of quality products yet with profits till it gains market reputation.5.0 CURRENT STATUS AND REQUIREMENTSThe location of the production area will be Korogwe town and marketing office will be Korogwe District Tanga region. The choice of a production location is strategically due(p) to the place being the study centre of fruits growing with a horticultural hinterland. Besides Korogwe being centrally located it allows easy transportation of inputs and raw materials to the industry as well as products to the selling centre and consumers due to its proximity to most areas. The location will also tap the availability of labor that has been left red undant by many crop estates and industries that were closed and some are now affected by the world economic recession. Ample availability of steady services like ICT, electricity, and water are taken into consideration when selecting the location.Taking into consideration that this is a start up project, the following will form a production and operation processes. hold over 2 Production processStepProcessDescription1Site acquisition, registration of business and other start up logisticsSite us owned by one of the partner which will be transfer in the business under the law and legal contract.2Purchase of equipmentMachineries equipment with the capacity of producing 500-800 kilograms per hour will be procured. Office equipment, a vehicle and furniture will also be procured.3Employees recruitmentDirector production and technical, jitney administration and finance, manager production and technical will be the first people to be employee operators staff and hiring the security.4Purcha ses of production materialsIdentification of locations, suppliers of raw materials and other inputs training on the quality to supply and later purchases to be done5Production processReceiving, grading, washing, desizing/pulping, packing packaging and storing6MarketingMarket research, Transportation, advertisement, selling.5.1 Description of where the business stands todaySOMIL has 120 millions which contributed by three partners in equal shares also the company has plot in Korogwe which has own by one of the partners and transfer to a business through legal entities.5.2 Description of what the business needs to move forwardIn order the company to operate successfully the business needs 300 millions. Where by 120millions has already contributed by three partners and remained 180 millions the company look for a loan which will be paid at bottom five years.6.0 MANAGEMENTThe business is directed by three directors, who are partner and shareholder of the business.First partner is MILD RED MLAKI, who has two degree, one from pallium Town University of food and nutrition and the other is for commerce from university of Dar es salaam, Mildred will be overall in-charge of all processing operations.Second partner, SOPHIA MUSSA holder masters in human resource from makerere university of Kampala Uganda, she is working with reputable company in the country and she will be overall in-charge with human resource and public relation of the company.Third partner, SAJA JOHN is a holder of masters in strategies business from Greenwich University she will be overall in-charge of market operation of the company.The company will employ other work 2 in finance and procurement 2 foreman, and production and technical will be hired and security on term for six month period to help initial stage of layout, installation and commissioning of the machines and equipment.6.1 ORGANISATION STRUCTURE6.2 OwnershipThe business is currently owner by 3 directors as mentioned above and the will c ontribute 60% of the initial investment and the rest may be sold to any interested investors or development partner.6.3 Board of Directors/Board of AdvisorA Board of Advisor will be selected to advice on matters regarding smooth running of the business based on qualification specific to the arranging functions. Advisors will strictly come from research institutes like UDSM Process Engineering Department, SUA, NARS, and TBS etc since the business needs technical expertise and solutions from them for the advance of making it outstanding in terms of quality and up to date with technological features.A political figure will be included for the health of the business the main proposal is the Member of Parliament for Korogwe Constituency.6.4 Key Professional Service ProvidersThe services of a change agent like SIDO experts are bouncy for advising on entrepreneurship skills including business management and capital acquisition. The service of reputed audit personnel for legal advisor is required by the business, but company will higher(prenominal) advocate professional whenever needed.7.0 INDUSTRY ANALYSISThe current agriculture contributes about 26.5% of GDP and it provides employment to about 70% of total labour force out of which 56% of them are women. (Human Development Index 2007). This is because of its deputisesistence nature of Tanzania Agriculture but its potentiality for agriculture growth is immerse taking into the focus of the government strategies. TDV (Tanzania development vision) and ASDS that envisage to transform the existing subsistence-dominated agriculture progressively into commercially fat and viable production systems so as to make it modernized, commercial, highly productive and profitable by utilizing new technologies and available technologies and manpower in an overall sustainable manner. (www.tanzania.go.tz)Agro processing in the industrial sector is indeed one of the underdeveloped sub sectors and according to a report by Commonwealt h Secretariat (1997) it was seen to consume about 1% of the horticultural raw materials produced in Tanzania as compare to (80%) in Malaysia which also is in the category of developing country. Also according to PASS (2002), 65% of the processed products are consumed within the country. This indicates the availability of investment opportunities in the fruits and vegetable processing (www.tanzania.go.tz)Most of the processing plants operate under capacity due to old technology used, irregular supply of raw materials and low technical skills. However, there is some investment in processing industry taking place and efforts are being made to promote more investment in this area. venial processing in becoming very important in the country as means to reduce crop losses and value addition at production and collection sites, and a way of income generating activity. To date over 5,700 processors have been trained and at least 3000 jobs created (SIDO, 2007). The forthcoming discourse for industrial development in Tanzania is elaborated in the Sustainable Industrial Development Policy SIDP. The main purpose of SIDP (Sustainable Industry Development Programme) is to set out a path for industrializing Tanzania so that by the turn of the first quarter of the 21st Century is becomes a semi industrialized country.Recently, individuals and or groups of women entrepreneurs and youth have engaged themselves into processing of fruits and vegetables for niche markets. These groups have received basic training in food processing technology through research institutions such as TIRDO (Tanzania Industrial Research Development Organization, TFNC (Tanzania Food Nutrition Centre) SUA (Sokoine University of Agriculture), Agriculture Research Institute Uyole, Mbeya Horticulture Research Training Institute Tengeru, Small scale Industry Development Organization (SIDO) and non-government organizations supporting community, nutrition and health improvement programmes. Such groups are ma inly engaged in drying of fruits like ripe bananas, pineapples and mangoes and traditional vegetables such as amaranths, cassava leaves, okra and black-eyed pea leaves. Others are engaged in making products like juices, jams, marmalades, pickles, tomato sauce and wines. (www.tanzania.go.tz)SWOT ANALYSIS TO OUR STARTUP BUSINESSSTREGHTHSHighly experienced technologicallyWillingness to deliver as per visionStrong team of managementWEAKNESSESLimited capital to invest in whacking scale hypothesisA less reputed venture not yet gained a nameOPPORTUNITIESNiche markets that take advantage of seasonal shortagesConsciousness of fresh and nutritional healthy products by consumersAvailability of copious and variety of fruits in most time of the yearLocation is along the fruits and vegetable growing zoneLocation centrally located, feasible transport sapiential to both farmers and consumersAvailability of many funding arrangements like loans and grants for investors and entrepreneurs.Recent ec onomic recession will reduce competing imports to a large extentTHREATSImportation of less quality but cheap concentratesEmerging large scale investors with similar projectWeather calamities such as drought that may hamper productionInconsistent supply of raw materials due to seasonalitySubstitutes such as Soda and Mineral water especial Uhai, Kilimanjaro, Dasani, masafi and so on7.1 Competitive position within target market7.2 Competitors analysisFew medium to large scale industrial processing plants in Tanzania that are currently operational, are located in strategic areas of high production and/or consumption like Bakhresa Food products, Noble Foods beverages Ltd, A-One products and Bottlers Ltd and Redgold in Dar es Salaam region, Darsh Industries Ltd in Arusha region, Dabaga Fruit and Vegetable wicker Factory in Iringa region. These factories produce a range of products that include fruit juices of various kinds, tomato sauces, pickles, wine, ketchup, etc. Other factories are emerging in other potential areas like in Morogoro as more investors venture into this sub-sector. (www.tanzania.go.tz)Table 1. The following table indicates few of the prospective competitors.Name of competitorsProduct madeStrengthsWeaknessesRemarks that makes SMS to trip up a market shareNoble foods-fruits juicesMango juiceFresh mangoes during the season. Have good packagesNo production during off season, manufactures only one product -mango juicePotential customer during off season may purchase other fruit pulps for SMSBakhresa Food Industries -Azam fruits juicesJuices mango, guava, apple, pineapple orangesMay not lack raw material due to utilizing imported concentrates, few fresh fruits.Utilizes all the raw material in his own industryAlthough a big competitor but not threatening because he cannot sell to others hence consumers of SMS are maintainedRed GoldTomato products Sauces and ChillUses fresh tomatoes during the season, import during off seasonDo not stock enough for off season productionPotential competitor and customerSmall scale wineries, juice processorsTomato products, wines, juices and fruit live on recipesUses fresh fruits of the seasonNormally do not stock enough for the year. Have little funds and small premises for keeping large amounts of raw materialsMay be competitors during the season but big customers during off seasonOther medium and small scale industriesTomato products, wines, juices and fruit blend recipesUses fresh fruits and vegetables as raw materials to their secondary productsCannot stock due to capital, convenience, expertise and spacePotential customerTalking about competitors also there is a threat of substitute such and Soda and mineral water.7.3 Market size and TrendsAccording to the Confederation of Tanzania Industries directory (2007), the total market is about 316 consumers for these products. The business estimates to capture 10% in the first year 20% in the second year and growing to 30% in year five onwards. This will be due to gaining faith regarding quality as compared to imported products. The business administration will take care of customer training building regarding confidence building.Regarding a study by Tanzania Food Drugs and cosmetic Agency (TFDA) on Inventory of Food industries (2006), medium and small scale industries that will utilize SOMIL products are concentrated in Arusha, Moshi, Dar es Salaam, and Tanga regions and most of these utilize the product as raw material for making secondary products such as sauces, wines and juices.Government efforts to strengthen the increased production of non traditional crops such as fruits and vegetables because they are of high value to both farmers and the country impact positively to the availability of raw materials for SMS products and hence ensure promptly availability of raw material for SMS products and hence ensure readily availability of products to clients. The world economic trends may have a positive impact on customers pro ducts due to reduction of imported concentrates.8.0 MARKETING PLAN8.1 Market SummarySOMIL fruits product will possesses good information about the market and known a great deal about the common attributes of the most prized customer. This information will be leveraged to soften understand who is served, what their specific needs are and how SOMIL can better communicate with them. Kotler P Keller KL1956, P.61-678.2 Marketing strategyThe initial focus will be locally where small scale and medium fruits processing industries are located. collectible to capacity of the industry at the moment, there are no plans to go beyond Tanzania and Zanzibar. The strategy will initially be identification using entropy from Board of Internal Trade (BIT), the Ministry of Health and Social Welfare-TFDA and Ministry of Industries Trade and Marketing (MITM) as well as Tanzania Bureau of Standards (TBS) and other trade newsletters. The selected few will be visited for introduction and sample sending. T hen a business may further advertise in public media newspapers, radio leaflets distributed to road users for know. In future we will advertise at Televisions also.8.3 Concept testingConcept test system can improve the company chances of success in developing and introducing new products.Our organization will go door to door for the concept test in order to get the view of the public concerning with our types of product this will be done in public area like schools, Hospital and churches.Design employs sequential public study in which up to 50 groups of 10 to 20 participants each test one product. These studies typically consist of three surveys of up to 30 questions each. The surveys are conducted among members of our Members.8.4 Usability testingUsability testing is a technique used to pass judgment a product by testing it on users. This can be seen as an irreplaceable usability practice, since it gives direct input on how real users use the system. This is in contrast with usabi lity inspection methods where experts use different methods to evaluate a user interface without involving users.Usability testing focuses on measuring a human-made products capacity to meet its think purpose. Examples of products that commonly benefit from usability testing are foods, consumer products, How ever in organization will used this test to improve our product in this areas efficiency, accuracy, recall, and emotional response. The results of the first test can be treated as a baseline or control measurement all subsequent tests can then be compared to the baseline to indicate improvement. This test will assist the industries to know where we are going and what people says about our products, This test will be assist us to maintain our product and make it durable in all time for production, our organization will insure this test done before the product enter in the market.8.5 Channel of distribution8.5.1 Selecting a channel of distributionSOMIL when selecting a channel of distribution as Fruit product Industry will consider the followThe consumer characteristics need and segmentThe company goals, resources expertise and experienceThe product value, complexity, perish ability and bulkThe competition characteristics and tacticsDistribution channels alternatives, characteristics and availabilityLegalities current law and pending laws. Kotler PKeller KL1956, P.36-728.5.2 Distribution standardSOMIL will have clear and measurable goals regarding service levels in physical distribution. In so doing there mustiness be a clear distribution strategy for products to snuff it the target consumers, in this respect the clear distribution channel must be in place.8.5.3 Customer ServicesSOMIL will understand the decisions involve delivery frequency, speed and consistency transportation and shipping to policies, whether to accept small customer orders computer memory coordinating assortments and so on. Poor performance in these areas may result in lost customers. Kotler PKeller KL1956, P.36-728.6 Production8.6.1 Social responsibility.SOMIL we will consider the impact of companys action and operating in a way that balances short term profit needs with societies long-term need this ensuring the company survival in a health environment.8.6.2 Natural resourcesSOMIL will make sure that the depletion of natural resources can be reduced if the consumption of scarce material is lessened and more efficient alternatives are chosen.8.6.3 Environmental PollutionSOMIL will make sure that dangerous pollutants need to be eliminated from the environment and safe substitutes found. The environment protection is the major federal organization involved. Ethical Partnership nd8.6.4 Child labourSOMIL we will make sure there is no possibility of fry labour. Sometimes supervisors use this opportunity to pay this child less while they benefit against them. We will obey the law and perform as per given instructions.8.6.5 MarketingSOMIL as a company which deal with products fall under the umbrella of the Marketing Mix (product, price, place and promotion) which describes the strategic position of a product in the market place. An enterprise involved in producing fruits products must have clear strategies of producing those products. Also the firm dealing with fruits production should have clear pricing strategies, promotion strategies and placing or distribution strategies. An enterprise we must be able to market what we produce and produce what we can market.ConsumerismSOMIL fruits product manufacturer we agree that customer has right to be informed and protected against fraudulent, deceitful, and misleading statements, advertisement, labelsConsumer safetySOMIL fruits product manufacturer we will make sure that, consumer are protected against dangerous and unsafe product.Consumer information and educationSOMIL fruits product manufacturer we are certified that, consumer have right to be informed includes protection against fraudulent deceitf ul, or grossly misleading information advertising, labeling, pricing, packaging or other practices.Consumers choiceSOMIL fruits product manufacturer we know that consumer has a right to choose means that consumers have available several products and brands for which select.Consumers right to be heardSOMIL fruits product industry, consumers has right to be heard means that consumers should be able to voice their opinions to business, government and other parties. This gives consumers input into the decisions that affect them.Advertisement/PromotionPromotion and advertisement our product should be an almost unconscious part of our everyday sales plan. We dont have to look far for an opportunity to market and merchandise juice. A great way to stand out from the competition is to produce our own juice, thereby offering customer juice beverages that cant be found elsewhere.SOMIL we have to understand our competitors, what they doing and we will take action against these competitors, espe cially as an entire generation or retail buyers is at stake. To reach the public, advertising is a necessity. We believe that advertising may reach non-juice drinkers and thus bring in additional customer to our business. Advertising deserves greater consideration as a part of the solution to certain