Business Plan On Manufacturing Knitted and Woven Bags
Business Plan On Manufacturing Knitted and Woven Bags
Business Plan On Manufacturing Knitted and Woven Bags
The undersigned reader acknowledges that the information provided by iCARUS Private Limited in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of iCARUS Private Limited. It is acknowledges by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to iCARUS Intenational. Upon request, this document is to be immediately returned to iCARUS Private Limited
______________________
Signature _______________________ Date This is a business plan. It does not imply an offering of securities.
Name: Icarus International (proposed) Ownership of the business: The business will be formed with 4 stock holders each with 25% share. The agreement will be in accordance with the law of the state of Bangladesh and will be drawn up by an attorney Advocate Mr. Jalil Anonto Type of business and product: Manufacturing of seamless bag using natural fiber (jute & others) Locations and hours of operation: The proposed location will be at Gazipur and land is still vacant.
Sl 1 2 3 4
Name & Address Sardar Salahuddin Bijoy Nafeul Hafij Moni Rani Saha Airin Jannat
Business Experience
Ownership (%) He was engaged in NGO, IT 40 business, stock market, He was engaged in clinical 20 business Engaged with stock 20 business, printing business One of the owners of a jute 20 product buying house.
Executive summary
A pollution free environment is necessary for human survival. Now people are more conscious about environment and they are willing to use such products that are ecofriendly in nature and among them using shopping bag is a big concern for everyday consumers. It has found that secondary packaging market is one of the fastest growing markets in the world. Though its growth is very high but in the perspective of our country, the growth was not substantial enough due to lack of advance technology, product innovation, diversifications. Now the picture is changing. As the people are getting more conscious about environment, eco-friendly product nature and price hiking of petroleum products has influenced the natural fibre packaging sector to reemerge. Considering all the facts iCARUS International is going to open a new horizon that will be able to create value and profitability in the packing business and will be the leader in terms of supplying the highest quality reusable Bags made from domestic raw materials those will not harm the environment. In addition, the people who engaged in the business are very much creative and self-reliant. They love to face challenge and confident to handle problems. Our business will entirely using the available advance technology, domestic materials with lots of innovative ideas. Our product is bag specifically woven seamless Bag. According to buyers requirement the bags will be produced. Different types of bags will be available as well as size. One of the most distinct characteristics of our product will be low cost compares to other similar products available in the market also the product will be, biodegradable, recyclable, fashionable and stylish, export quality. Considering the product type, we have selected distributing channel wisely to reach the target market. It includes superstores, shopping malls, outlets, showroom and popular shops in local area. Marketing strategy has been developed to capture both the local and international market. As we are emphasizing on secondary packaging we have selected internet, In order to enter the market our strategy will be widely used Market Penetration Strategy where we will be able to sell our product at the lowest price than the competitors to capture the market. We are expecting within a small period of time we will be able to grab a larger share we will start selling our product at competitive price. According to your operation plan, we have decided to operate 12 hours shift and 300 days a year. The full capacity of the production will have 4 lacs pieces of bags. For efficiently running the plant it will require 50 persons directly and it will create more employment in future. The total investment requirement is estimated at Tk. 61.25 lack, out of which 40.55 lacks is required for plant and machinery. The fund will be collected through sponsor and bank loan .The project is financially viable with an internal rate of return (IRR) of 13% and a net present value (NPV) Tk. 205,851.53 of discounted at 13%. A portion of our initial startup costs will be used to purchase inventory, office equipment, and different machinery. The balance will be used for catalog costs and initial advertising
expenses. Additionally, we project the need for additional financial commitment to finance receivables and payroll expenses for the operations. It should be noted that the partners are not intend to take any profits out of the business until the long-term debt has been satisfied.
ph arm ace ut ical , drinking water e t c . has increased in big volume. There is a growing trend to use plastic made containers in place of containers made of metal and glass. This trend has also developed the printing processes. Poly packaging: There are more than 500 small and medium size industries producing Poly packaging items. Use of Poly packaging items has, in recent times, increased in big volume. Although Government has imposed ban on use of polythene shopping bags for protecting environment pollution yet demand of polythene packaging for packing export oriented industry like readymade garments, food items, consumables etc. has increased in big volume. Poly factories use PP film, LLDPE Film, BOPP, Aluminum Foil, Metalized film, Polyester Film etc. Tetra, aluminum foil and flexible packaging: Use of tetra, aluminum foil and flexible packaging for packing items like; spices, chips, pickles daily necessaries, pharmaceuticals, drinks and beverage, ice cream, milk and pasteurized milk, juice, table salt, tea, sugar etc. has increased tremendously. This is because of the rapid growing population in urban areas. Metal Packaging: Use of metal containers are limited for packaging chemicals, paints etc. which has also increased with the expanding demand of these items in local market.
Analysis of competitors:
Major Competitors and their position in the market
iCARUS International knows that there are some established manufacturers of related products in the field. iCARUS after a detailed analysis found that its major competitive advantage is its superb quality & design at a very reasonable price. However, we have identified 3 major types of competitors who are not producing the same product but creating barriers to our business. They are: Direct Competition: We have direct competition with all the shopping bag manufacturers and printing presses that are selling the similar product within Bangladesh.
Indirect Competition: We have indirect competition with all the manufacturers of small paper packets and net bags. Still some people are illegally producing banned poly-bags. These people are also competing with us indirectly. Hidden competitors: There are some manufacturers who are producing polythene shopping bags which have been banned since 2002. Though still they are available in the market also acting like a competitor to our product. Replacement competitor: There is another threat of replacement competitor who may use the same types resources to produce same types of product.
Potential competitor Diversified non-woven bag producer Diversified natural fiber made bag producer
Asia Jute Company Jahan Group of Companies Abir international National jute mills corporation Confident jute mills ltd. H.N enterprise
Inventaproltd
Market Segmentation:
Product segmentation:
Government and consumers are now concerned about climate change and its sustainability. Inorder to meet the consumer demand we are providing products at a reasonable price with superior quality. Our customers are quite conscious about the environment. So they want to use environment friendly shopping bags.
Customer Segmentation:
Since, we want to sell our product to only those shops/ outlet/ superstores which have a minimum reputation. We are taking some super stores and some other renowned shops as our potential customers. However we do have market segmentation according to the volume of purchase by the customers. That segmentation as followsMaster Consumer: Customers that purchase 15,000 units per month. Elite Customer: Customers who purchase more than 7000 but less than 12,000unit per month. General Customer: Customers who purchase more than 4,500 but less than 6,000 units are of this group Customer Characteristics: Our customers are quality conscious .They do not compromise with quality.
Figure: Most important characteristic while using shopping bag (n=20; multiple choice)
3.Al-Amin
Dhaka G-12, DCC Market (Ground floor), Dhaka Road # 5, Dhanmondi, Mirpur Road, Dhaka 24 Shamoly Biponi Bitan, Mirpur Road, Dhaka 196, Green Road, (1st floor), Dhaka Shaheen College Gate, Dhaka 2, Ishakha Shopping Complex, Kakrail, Dhaka 28, Mirpur Road, (1st floor), Dhaka Plot-7, Road-15, Sector-3, Rabindra Sarani, Uttara, Dhaka Plot-38, Road-2, Sector-3, Uttara, Dhaka 55, South Avenue, Gulshan-1, Dhaka G-23, DMC North Market, Gulshan-2, Dhaka Dhaka Sheraton Hotel, Dhaka
17.Stop N Shop
4.Almas General Stores 5.Aqib Departmental Store 6.Asian Sky Shop Ltd 7.BAFWA Complex 8.Desh Department
18.Shameem Traders 19.Shantinagar Super Market 20.Shoppers World 21.Meena Bazar 22.Mona Departmental Store 22.Rahimafrooz Super Stores Ltd 23.Prince Departmental Store 24.PQS Super Centers 24.Plaza central
House # 23, Road # 27 (Old), Dhanmondi, Dhaka 108, Aulad Hosen Market, Airport Road Tejgaon, Dhaka 24-4, Chamelibagh, Shantinagar, Dhaka 68/1, Gulshan Avenue, Gulshan-1, Dhaka 719/A, Satmasjid Road, Dhaka Eastern Trade Centre, 56, Inner Circualr VIP Raod, Dhaka Azad Chamber, 13, Mohakhali C/A, Dhaka Bishal Center, 216, Circular Road Moghbazar, Dhaka Plot-11, Road-3, Sector-3, Uttara, Dhaka Plot # 22 (2nd Floor), Gulshan Circle-2, Dhaka A.R. Tower, 24, Kemal Ataturk Avenue, Banani, Dhaka
9.Elegant Golden Gate 10.Family Needs 11.Fortune City 12.H.N.P. Family Mart 13.Jamen Varieties Store 14.Jonaki
Interstate Automobile Valuers & Assessor Flex Management Sdn Bhd C V. Everbright International
Malaysia Indonesia
Fixed Asset
Quantity(pcs)
Management Summary
iCARUS international will be organized and managed in a creative and innovative way to generate very high levels of customer satisfaction through delivering superior quality products, and to create a working climate to a high degree of personal development and economic satisfaction for employees. On the job training (OJT) to help improve product knowledge and skills will be conducted on a regular basis. As the business grows, the company will consider offering an employee benefit package to include health and vacation benefits for everyone.
Management Team
1. Sardar Md. Salahuddin: He is 24 years old. He is now a student of BBA(9 th semester).He has Started his career in 2007 as an operation manager in S.S Sanchoy Prokolpo till 2009. Then he had worked in Dreamz Unlimited as an
Accountant. He has also worked as IT Trainer in S.S Computer IT. He was also engaged with stock business. He will act as Chief Executive Officer (CEO). His job is to cover the corporate strategy, sales, E-Commerce, marketing and public relations in the company.
2. Nafeul Hafij Rista: He is a doctor .he completed his MBBS from Rajshahi medical college in 2001.He is now serving as government doctor .He is engaged in clinical business .He is 35 years old now.
3. Moni Rani Saha: He worked in a Shopping Mall in Saudi Arabia and returned in Bd. in 2010 and started career as a proprietorship concern with jute world export in 2011. Jute world export is jute buying house .He is 30 years old now.
4. Airin Jannat: He is a Textile engineer; completing his B.Sc from Bangladesh University of Textiles .He has a sound knowledge in textile production. He will work as the Manager (Product & procurement) in the company. He was engaged with stockbusiness,printing business etc. His Job description is Product development, Process development, procurement and licensing activities across all divisions. He is 25 years old now.
Method of innovation
Our proposed process of manufacturing of jute bags involves the following operations:
Manufacturing Process
Weaving Fundamental: The classical method of weaving is essentially the insertion of a continuous length of weft yarn from a shuttle which travels to and fro across the warp sheet in the loom and leaves behind a trail of weft (pick) at each passage. Weaving involves three primary actions and two secondary ones. These are briefly as below:Primary Action: The three primary actions are shedding, picking and beating up. They must be performed in strict rotation in a loom.
i) Shedding To form any weave structure all warp threads under which a particular pick has to lie in ultimate cloth are raised during the shuttle passage while all threads with the same pick has to pass over powered. ii) Picking: The action of passing the weft through the shed is picking. iii) Beating Up Finally after the insertion of each brick, the pick of weft in itself has to be pushed forward by a reed (a type of closed comb through which all of the warp threads are drawn) to a point adjacent to the previous pick, known as the fell where this cloth is formed. This third action is called beating up. Secondary action: In addition to the primary actions two secondary actions are necessary. However, the instant at which they are performed is at the discretion of the weaver in the case of simple hand looms. On the other hand strict control and timing in relation to primary motions is required for power looms. i) Taking up: This action involves the taking up of woven cloth as weaving proceeds so that the fell is maintained in the same position. ii) Letting off: This action involves the letting off the further warp from a beam at the above of the loom to replace that woven into cloth.
Production Stages:
Manufacturing of Woven seamless bag:
Warping: It is the process of placing warp yarn on to the warp beam. Here also oil treatment is happened. Beaming: Beaming process is follows after spool winding. In beaming operation yarn from spool is wounded over a beam of proper width and correct number of end to weave jute cloth. To increase the quality of woven cloth and weaving efficiency, the warp yarns are coated with starch paste. Adequate moisture is essential in this process. Weaving: Weaving is a process of interlacement of two series of threads called warp and weft yarns to produce the fabric of desired quality. There are separate looms for Hessian and sacking in weaving section. The Hessian looms, shuttle which contents cops (weft yarn) is manually changed. The sacking looms are equipped with ecoloader to load a cop automatically into the shuttle Cutting: Normally Rotary and Guillotine type machines are used to cut the cloth into pre fixed piece lengths depending on the dimension of the bag. Here we will follow the manual method of cutting. Starching: Starching it is not a essential step .but when necessary tit is done to increase stiffness. Starch solution in water contains tamarind kernel powder (TKP), antiseptic sodium Silica fluoride (NaSiF4) and its concentration varies with the quality of yarn. Drying: Drying is a necessary step for if the starching operation is done . Printing section: As per buyers requirement bags are branded manually by screen printing technique. Branded bags are kept on the floor for sometimes to facilitate drying of the dye staff used for branding printing will be done according to the buyer requirements. Necessary instrument for printing are below: a) Wooden Printing Table b) Screen of Diff. Design c) Rubber Wiper d) Dye Paste Stirrer e) Water Drum f) Cottage Steamer g) Tubes, Steel Spoons,
Lamination: Laminated Jute looks exactly like Raw Jute on the outside and has an additional thin layer of Polypropylene (PP) applied to the inside of the bag to stiffen and protect the natural fibers which creates a really structured, solid, long-lasting bag. The lamination of Jute adds about 10% to the cost and it will extend the life of the bag almost indefinitely. When times comes to discard the bag, the PP layer can be removed which leaves to completely biodegradable Jute bag Inspection/ Repairing: The weaving faults present in the cloth are inspected and repaired manually. Inserted cop present, if any, is removed to avoid major damage supposed to occur during calendaring. Production at this stage varies depending upon major and minor weaving faults present in the fabric.
Creeling: Creeling is the placement of full packages in position ready to be unwound as part of the transfer operations. An alternative meaning is the removal of the exhausted packages & their replacement with full ones. Knitting: It is a technology of creating fabric by transforming continuous strands of yarn into a series of interlocking loops. We will use full circular garment length machine .Here tubular fabrics are made in continuous form. Cutting: Normally Rotary and Guillotine type machines are used to cut the cloth into pre fixed piece lengths depending on the dimension of the bag. Here we will follow the manual method of cutting.
Stitching & Finishing: Seaming is the most vital sewing operation in bag manufactures. Two ends of the same piece of cloth are placed one above other and stitched for seaming (joining) with Herakle sewing.
Building & civil work Machinery & Equipment (1) Power Jacquard loom (2) Winding machine (3) Pressing machines (4) Lamination machine (5) Printing table & auxiliaries (6) Tools and auxiliaries (7) Garment length knitting machine (8) Inspection machine (9) Others machine Furniture & Fixture Transport (pick up) (10) Air Conditioner (11)Computer & laptop Total 3 1 3 1 1 1
1000000 1480000 600000 50000 50000 200000 30000 30000 400000 20000 100000 75,000 1000000 80,000 50,000 3,685,000
1 2 3
Chemical type
Others
Description of Raw Materials Dye Stuff Printing gum Chemicals & auxiliaries Jute yarn Cotton yarn PVC buckle or bamboo Sewing thread Packing material,label etc. Total
Supplier of raw materials: Most of product we can purchase from the local market but some dyeing chemical we can import from BASF- Malaysia. They are one of the leading industrialists in chemical manufacturing business.
Marketing Plan
Our objective is to build ECOBAG a strong brand. Product: Our company will produce two types of product one of them is woven bag another one is knitted bag. There will be two type of sub quality of that product like woven type (A) and woven type (B) also knitted type (A) and type (B). Two of them will be raw jute color. And two of them will be mixed color. One of them is named gift packaging jute bag and another one jute and cotton shopping bag. Other one named is Eco jute shopping bag.
In the above picture both of them is gift packing jute bag. One may can use for shopping mostly. Above those two products has only raw jute using for the production of those particular product. But second one is only mixed red color for eye catching of the product.
Above those bag can use for the various purpose. Especially middle one can use as basket also. First one may use for shopping like carrying fruits.
Pricing Strategy: Price plays an important in business. Inorder to enter into the market we have decided to use New Product Pricing Strategy as we want to enter into the market slowly and grab the market share slowly with the highest possible profit. iCARUS international will manufacture shopping bags of 2 different materials.
Sales Forecasting:
Product name Woven seamless bag Unit Average Price Knitted seamless bag Unit Average Price Sales revenue Year 2 Product name woven seamless bag Unit Average price knitted seamless bag Unit Average Price Year 1 1st 2nd 3rd 4th quarter quarter quarter quarter 5000 25000 70000 100000 27.5 27.5 27.5 27.5 5426 12.5 12045 12.5 23154 12.5 19375 12.5 Total 200000 27.5 60000 12.5 260000 Tk. 7905000
390112
77002
Total
467114
278000
305800
327206
350110.4
374618.1
Organizational Plan:
Organizational Structure:
Management Team Chief Executive Officer (CEO) Manager ( Product & procurement) Manager (operations) Manager (Administration & finance) No of post 1 1 1 1
Chief Executive Officer (CEO) will make critical decision making of the overall activities.. The manager (Product & procurement) will conduct research regarding better quality for surviving in the market. Manager (operations) will be responsible for his works to the production manager. Production manager will control the whole production process. Manager (Administration & finance) will take decision to improve working condition of the factory as well as recruiting manpower, set up distribution channel etc by consulting opinions from the marketing section, human resources and accounting officer.
Figure:
The background of the management team: Name Designation Job description To cover the corporate strategy,sales,ECommerce, marketing and public relations. Md.Shahidul kader is acodtextile production. Qualification & experience
Nafeul
Product development,
Hafij
procurement)
Manger (operations)
Responsible for the Total Production & Quality Control of the factory. Responsible for finance and accounting, controlling, IT, HR, logistics and legal.
Airin Jannat
Business Start-up Activities and Cost: Sl 1 2 3 4 5 6 7 8 Business Start-up Activities Business Plan preparation Registration and license for business Application for loan Contract/Agreement Purchase of land/ Rent (only time) Connection of utilities (gas, electricity, water) Recruitment Others Total Time(week) 8 6 6 2 2 6 4 2 30 Cost N/A 50,000 10,000 10,000 50,000 30,000 10,000 1,60,000
Salary of the Employees: Sl 01 02 03 04 Designation Chief Executive Officer (CEO) Manager( Product & procurement) Manger (operations) Manager(Admin & finance) Salary (Monthly) Only take Profit Only take Profit 30,000 30,000
05 06 07
Clerk cum-Accountant Marketing officer R& D officer Add: Perquisite @15% Total(monthly) Total for 3 months
Administrative Expenses: Sl 1 2 3 4 5 6 7 9 Description Depreciation of Office Equipment Salary of Employees Office Rent Office Utilities (gas, electricity, water etc.) Postage, Telephone etc. Stationeries Entertainment Speak money Total Cost (In Taka) 40,000 3,03,600 60,000 9,000 6,000 5,000 20,000 20,000 4,63,600
Overall Goal To establish an absolute commitment to customer satisfaction through establishing an eco-friendly Packaging green business.
Project Purpose Longer-Term To create a global market of our local jute in packaging. Shorter-Term
-Confidence to occupying the packaging market -Superior quality - Interviews or level of the surveys product -Members own contribution -Increased level of -Progress satisfaction of
To meet our customer's expectations, producing superior quality and exceptional service at a fair profit.
the stakeholder
reports
SWOT ANALYSIS:
:Risk of the Business:
Risk mitigate The flexible financial strategy implies surplus cash and little short term borrowing. However, to start the operation of our business, we need to take both short and long term loans. Though the estimated net income for the first two years of our business will be positive. Hopefully reduces the risk of experiencing financial distress.
2.Inflation risk
The high growth rate of price in this country may lead to decrease in investment in various sectors or it may increase the price of the product that will directly affect the revenue and thus the expansion of the firm. 3.Volatility of interest rate We will take short term loans more than long terms risk at the initial stage .Since, short term interest rates are more volatile than longer rates; this may lead to interest rate risk for our company. 4.Power interruption We have alternative plan (solar ) to solve this problem 5.Political risk The current political instability may appear to be a major threat for a new entrant like us since opening a new firm requires considerable amount of activities regarding fulfillment of rules and regulations and maintaining laws that are directly or indirectly affected by political affairs 6.Technical risk Although technology is new, but we have a great effort .we are all engineers. It is a great advantage 7.Business Risk The business is at initial stage but the proprietor is very much alert and hired a strong experienced team to overcome this problem. 8. Environmental risk The past history of the location we have chosen is the least disaster prone area.
9. Technological risk
Though technological risk is one of the most potential risk and inorder to mitigate the risk we have had an extensive survey and we have come to a conclusion that our technology will sustain in the market for a longer time.
Large chain stores are also offering alternate bags made of jute or cotton. This proves there is healthy global demand for these products due to the growing awareness of and demand for eco-friendly and biodegradable products.
Opportunities: Bangladesh is now one of the leading manpower exporting countries of the world. The export earnings also have been experiencing increase especially in the readymade garments, medicine, leather, shrimp and jute & jute goods. The revenue earning is also increasing which was more than 10% higher than the last fiscal year 2009-20010. The government is giving highest priority to rapid industrialization of the country. An extensive program of incentive to expedite investment in the country is now in place. No ceiling for investment, tax holiday up to 10 years, tax exemption and duty free import of capital machinery and spare parts for 100% export oriented industries, residency permit for foreign nationals, profit and dividend repatriation facilities, avoidance of double taxation, tax-exemption on the interest payable on foreign loan, convertibility of taka on current account etc. Foreign direct i n v e s t m e n t e n c o u r a g e s i n all industries except reserve list. Moreover equal treatment of local & foreign investment was given and safeguarding foreign investment from state expropriation. Export performance: The government has liberalized its trade policy and declared various incentives packages for exporters. Because of that export trade of the country achieved a growth of 17. 71% in 2010-2011.A comparative statement showing export earning of the country for the last five years is given below Fiscal Year 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 Export Earnings (million US$) 6548.44 7602.99 8654. 00 10526. 16 12180.00 (+)Increase +562.35 +1054.55 +1051.01 + 1872.00 +1653. 84 Increase in % + 9.39% + 16.10% + 13.83% + 21.63% +17.71%
Financial Plan
Presumption The financial analysis of the seamless bag project is based on the data presented in the previous chapters and the following assumptions:a) The cost in respect of plant and machinery, raw materials and selling price of finished product are those generally obtained at the time of preparation of project profile and may vary depending upon other various factors. b) The salary and wages of staff and labors has been taken as per present market rate.
c) Production utilization capacity is considered initially at 70% of the total capacity. The time period for achieving full envisaged capacity utilization is three years. d) Working days per year is considered 300 days and working hours is 8 hour per day considering single shift. e) The rate of interest on Bank loan has been considered as 15% p.a. which may vary from time to time Construction period Tax holidays Discount cash flow Accounts receivable Raw material local Work in progress Finished products Cash in hand Accounts payable 1 year 3 years 15% 30 days 30 days 2 days 30 days 5 days 30 days
Average Loan utilization of the facility: 90% Cost of fund is assumed at 10% and Interest rate is 13.00% p.a. Loan Processing Fee @ 0.20% on approved limit Loan Service Charge@ 0.15% per quarter on quarter end outstanding
List of Fixed Asset Fixed Assets Land (rent) Building & civil work Machinery & Equipment (1) Power Jacquard loom (2) Winding machine (3) Pressing machines Quantity 30 decimal Price 500000 1000000 1480000 3 1 1 600000 50000 50000 Depreciation (In Taka) 50000 148000
(4) Lamination machine (5) Printing table & auxiliaries (6) Tools and auxiliaries (7) Garment length knitting machine (8) Inspection machine (9) Others machine Furniture & Fixture Transport (pick up) Total
3 1
Current Asset Description Raw materials expenditure Wages Factory Overhead expenditure Marketing expenditure Administrative expenditure Total Duration(months) 3 3 3 6 3 Present (Tk) 480173.5 276375 290750 139000 484,650 1,670,948.5
Income Statement Items Sales (-) Net VAT Net Sales (-) Cost of Goods Sold Gross Profit Year 1 7905000 7905000 4189194 3715806 Year 2 10276500 0 11067000 5027032.8 5249467.2 Year 3 13359450 13359450 5881628.376 7477821.624
(-) General Administrative and sales expenditure Net Profit Before Interest and Tax
2216600
2438260
2925912
1499206
2811207.2
4551909.624
(-) Interest on bank loan Net Profit Before Tax (-) Tax Net Profit After Tax
233472 1265734
233472 2577735.2
233472 4318437.624
1265734
2577735.2
4318437.624
Balance Sheet: Item Current Assets Cash and Bank balance Inventory Accounts Receivables Prepaid Expenses Total Current Assets Fixed Assets Fixed Assets Less accumulated depreciation on all fixed assets Total Fixed Assets Total assets Liabilities Current liabilities Cash credit Accounts Payable Interest Payable Taxes Payable Outstanding expenses Total Short term liabilities Year 1 Year 2 Year 3
3,642,000 6,889,728
3,352,900 8,619,129
2,861,430 12,256,219
318425 230000
95527.5 115000
750479.75 57500
548425
210527.5
807979.75
(b) Long term liabilities Bank loan payable Mortgage payable (-) Current portion of long term liabilities Total Long term liabilities Total liabilities Owners Equity Initial capital Retained Earnings Profit for the year Total Owners Equity Total Liabilities & Equity Differences (if any) 1400000 889563 876497
889563 1100090.5
876497 1684476.75
3675569.1 3675569.1 1265734 2577735.2 2577735.2 4318437.624 7519038.3 10571741.92 8619129 12256219 0 0
Cash Flow Statement Projected Cash Flow [Year] OPENING BALANCE Cash inflows Sales Equity Loan Asset sales Debtor receipts Total Cash inflows Cash outflows Marketing Expenses Capital Expenses Cost of raw materials Wages Year 1 Year 2 Year 3 Year 4 Year 5
N/A
3042909
3100490
4992625
5462728
13359450 1500000 0
13230948. 5
13402448. 5
14859450
17920884.6 4
20204747.9
278000
305800
327206
350110.42
374618.14
2,230,250 4,055,000 2,027,500 1,784,200 1,962,620 1920694 2304832.8 2765799.36 3318959.23 3982751.07 2 1105500 1216050 1337655 1471420.5 1618562.55
Factory Overhead Expenses Start-up cost Office Equipment Salary Administrative expenses Bank fees & charges Interest paid Lease/Rent Income Tax Dividend Total Cash outflows Cash balance CLOSING BALANCE
1163000
1337450
1538067.5
1768777.62 5
2034094.26 9
1400000 200000 1338600 484,650 50000 233472 500000 0 12728916 502033 502033
0 300000 2313100.8 645069.15 17150 233472 726000 3250000 12928259.7 3 4992625 4992625
0 240000 2775720.96 709576.065 12005 233472 798600 4225000 14742020.0 7 5462728 5462728
Break-even Analysis Production cost: Unit cost of product = Total production cost Total No. Of Units produced
= (4189194/310000) =Tk.13.25
Break-even Analysis: Break Even volume = Total Fixed Cost Unit price- Total variable cost Total production unit = 4055000 20- (4207805/260000)
1062594
Sales unit after 2nd year = 727114 Sales unit of 3rd year = 534378 Break even at the middle of 3rd year = 727114+534378 = 1261492
} }
Number of units Break-even Analysis
Total fixed cost Total variable cost Average unit price Total production unit / 1st year
Sources of Fund
Start-up Cost
= TK. 400,000
Total Investment = Fixed asset +Current asset+ Pre-operative expense =Tk. 6,125,949 Fund structure:
Total Tk.6,125,949
Schedule of Loan Repayment: Total loan Tk. 2500000 Installment/Year Tk. 416667 Interest/Year Tk. 233472 Total paid Tk. 650139
Conclusion: Jute and cotton are valued natural fiber with unique characteristics and long standing end-use applications. Increasing production was, in fact, unable to meet the needs of rapidly expanding demand, resulting shortages in and for which manufacturers of synthetic substitutes were able to compete with a far larger potential capacity, budgets for promotion and lower prices. The demand for jute in export markets for the traditional products declined in the face of this competition with carpet backing the first to suffer in the United States. Use of mineral oil is incompatible with the ecofriendly characteristics of jute and needs to be phased out as far as possible.