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SHIERA WHOLESALER

DETERGENT BAR & POWDER

82 J.P. RIZAL PROJECT 4 QUEZON CITY

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I. SUMMARY OF THE PROJECT

NAME OF THE FIRM

We came to arrive on starting and putting up a business that all

people from different walks of life would need and that they are assure

even if competition is very keen will still progress because it is the

most important need of the people.

So after all the confusions and contradictions on this regard

Shiera Wholesaler Detergent Bar & Powder had been chosen in order

to procure the best unique business with our specialization in servicing

the people and giving them the best detergent bar for washing clothes

to plates.
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LOCATION

The location of the firm is in 82 j.p. rizal project 4 quezon city.

We choose this site because the site is busy and it is nearby a

supermarket wherein there are many walk-in customers and all walks

of life and different classes of people would come to shop and stop at

the supermarket that’s why there is a great possibility that our

proposed business would click and that it would become a successful

one.
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BRIEF DESCRIPTION

Shiera Wholesaler detergent bar and power is a brand known by

few, yet is the number one natural-brand seller. The problem for our

team is to figure out how to stimulate consumer awareness and

increase sales. Last year Shiera Wholesaler detergent bar and power

generated 4 million in sales. Our challenge is to inform people of the

company's message, retain loyal customers, and stimulate growth.

To extend the company's message of a natural, environmentally

safe product, we will emphasize the fresh citrus scent. We will also

include the fact that the product does not test on animals, contains no

animal products, contains no added dyes or perfumes, is non-toxic, is

made from natural oils such as coconut and orange, and will

biodegrade within 28 days. Our team is eager to inform customers not

only about the environmental features, but also the safety and

effectiveness of the product. Shiera Wholesaler detergent bar and

power is hypoallergenic and non-toxic. If babies or pets ingest the

product, no serious complications will result. The product also cuts

grease and placed fourth in 2002, behind three national brands, which

all contained bleach.

We have found that once consumers purchase Shiera Wholesaler

detergent bar and power they remain loyal to the brand and purchase
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the product repeatedly. This evidence serves as a means to prove once

again how effective the detergent bar and powder is.

Specifically we will increase awareness and stimulate growth

through coupons, in-store samples, and magazine advertisements that

emphasize the strengths of the product mentioned above. Coupons will

stimulate purchase for those consumers who are eager to try a new

brand but do not want to spend a lot of money. We plan to place in-

store samples in health foods stores such as Whole Foods Market for

those customers that are looking for a new type of dishwashing liquid,

but have not had the opportunity to make a new purchase or are

hesitant to purchase an unfamiliar product. Magazine advertisements

with the slogan "Bring the outside in" will stimulate curiosity and

awareness in consumers. The print advertisements will emphasize the

natural qualities of the product and imply that the dishwashing liquid is

like a giant bowl of fruit; it is fresh, natural, and full of citrus power.

Detergents, term applied to materials, the solutions of which aid

in the removal of dirt or other foreign matter from contaminated

surfaces. Until the 1940s soap was the only important detergent.

Today soap is but one of a great many detergent products. The

ingredients of detergents are often called surface-active agents, or

surfactants, because they act upon a surface. A common feature of

detergents is that they are made up of comparatively large molecules

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(molecular weight over 200). One part of the molecule is soluble in

organic material, and the other part is soluble in water.

During World War II the shortage of fats, from which soap is

made, spurred the development of soapless or synthetic detergents.

After the war the need for new types of detergents for automatic

washing machines accelerated the trend.

Detergents are made by treating an aromatic, or benzene-type,

compound with sulphuric acid, followed by neutralization with alkali to

convert the product to its sodium salt. The detergent products of these

reactions came into wide use in the late 1940s and early 1950s and

proved to be effective in hard water and cool or cold water, whereas

soap is often wholly ineffective under both conditions. These

detergents, however, became a public nuisance because, unlike soaps,

they were neither soluble nor biodegradable; that is, once put into

water they tended to remain there, resisting conversion into less

complex and more soluble substances. The detergents tended to

create foam in cesspools and in sewage-disposal plants as well. They

even appeared in naturally occurring ground and surface waters.

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SUMMARY OF FINDINGS

MARKET FEASIBILITY

it is important to the business to acquire an organized

management study, which involves the strategy implementation in

order to serve as guidelines for them to follow from the top

management to the lower position in the company. Managemetn is

indeed, a vital component in the execution of busines sprojects and

ventures. Planned activities by the companies cannot be stated and

fulfilled without the proper people to manage the business. It is in the

high light that the management of the firm be strongly established to

ensure continuous and smooth flow of operation from the company.

In relation to achieving company foals and objectives a defined

organizational set-yups is likewise required. The business organization

structure will ensure the smooth interpersonal relation between the

firm key officers and employees. In addition, it will further enhance

their personnel schedule of work prohibition and working hours.

In any form of business this marketing aspect is the most

necessary aspect among all aspects because the life of every business

lies merely on how the entrepreneurs and the proponents will try to

manifest and uphold a very demanding and very successful marketing

aspects.
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Considering that many entrepreneurs today are not merely

complied with the best assurances and importance of considering this

as a necessary ingredient in the flow of the business. Well the business

proponents in this aspect are seeing to it that they are complying with

the best assurance and consideration on how to manipulate marketing

aspect for the good and welfare of the business.

They believe that the marketing strategy would be the fact that

this is the best sensitive aspect to hold because there are many

strategies to uphold and considering the many techniques to study and

adjust.
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TECHNICAL FEASIBILITY

The technical feasibility is one of the basic requirements in

establishing the wholesale of powder and bar detergent and at the

same time manufacturing business and it would depend on the result

of the survey and research. This would be the basis to determine the

aspect of the product site and others.

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FINANCIAL FEASIBILITY

a. to make realistic and complete estimates of the business to put up

this project

b. to determine the amount of capital need

the financial matters of this business will be purely shouldered

by the partners itself thereby we would be the ones to capitalize the

business and thus whatever the need financial assistance and

assessment would be manifested and managed by both partners.

For long-term sanctions the partners may seek for financial loans

from banking institutions or other financing sectors as long as they

offer the loans granted on the flow of the business.

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II. GENERAL INFORMATION

a. MANAGEMENT OF THE PROJECT

TYPE OF BUSINESS ORGANIZATION

The proposed business will be organized as a general partnership.

This partnership will be formed according to the articles of the Civil

Code of the Philippines that defines partnership as an organization

where two or more persons bind themselves to contribute money,

property or industry to a common fund with the intention of dividing

the profits among themselves.

The partnership will operate based on its partnership agreement in

its Article of Partnership specifies the functions and responsibilities of

each members.

This type of business ownership is considered because of the

following advantages:

• it could easily be formed

• there are more persons to conduct the business and to handle its

problems

• and the combined ability and resources of partners are source of

strength.

The proposed business will adopt the line type of internal

organization. Under this type of organization, there is a direct flow of

authority from one top position to immediately subordinate levels. This

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authority flows to subordinate positions directly below and as it goes

down it is subdivided. The line type of organization has clear and

distinct channels of authority and responsibility.

The partners opted for this type of organization because of its

directness, fixed responsibility, discipline, simplicity and flexibility. The

proposed organizational chart for the company is shown in Figure 1.

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ORGANIZATIONAL CHART

FIGURE I

GENERAL MANAGER

TREASURER OPERATION MANAGER MARKETING

MANAGER

WORKER1 WORKER2 WORKER3

HELPER
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MODE OF FINANCING

The capital of the business is 4 million pesos. 2 million pesos

comes from the proponents, their share for the capital of the business.

The other 2 million is from their loan in the bank with the interest of

12% annually and the mode of payment is monthly.

Without the loan, the company would not exist and that they

would have difficulty finding ways to attain their goal, to serve the

household.
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RECRUITMENT PROGRAM

Officers and their Qualification

General Manager. Preferably a holder of Business Management

degree, 25 to 30 years old. The manager will be elected among the

partners according to the qualifications and requirements of the

position. The General manager will manage the whole operation of the

business.

Treasurer. Her responsibility is the management of the money

resources of the firm. With the consultation with the rest of the

partners shall formulate the budget, formulate compensation and

fringe benefits and manage the cash and cash out of the company. In

short she handles the finances of the company.

Marketing Manager. The candidate should be one of the partners

with a degree in business management with majors in marketing. The

marketing manager will be in charge of developing strategies as well

as marketing of the firm’s products.

Operations Manager. The candidate needs to be a chemist or a

chemical engineer. The successful candidate should be part of the

partnership and will be responsible for managing the production

operations of the company.

Employees. The candidate for this position should be a high

school graduate and is a fast learner and efficient.

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Selection and Hiring Process

Screening the Applications and the Applicants. This process

involves screening and selection of applicants from the bulk of the

applications received in order to determine those qualified for the

initial interview. At this point the applicant is evaluated as to the

fitness of his or her qualifications to the job subjected to further

screening.

In the screening interview , the applicant is appraised for

personality traits like grooming and manner of speaking , family and

community background , relevance of the experience to the job

applied for, and the entries in the application which need verification

from the applicant.

Mental Ability and Skills Test. Once the screening interview has

determined mental ability and skills test is the next procedure . This

will determined the ability of an applicant to cope with processes

involved in the job and to measure his/her skill usually in the use

equipment.

Selection Interview. Done after the applicant examinations. This is

to deepen the background check and to know his/her view in working

in the establishment and it’s career plan.

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Physical and Medical Examination. This is to determined the

stamina of the applicants , it physical disability , and existing illness

that may cause bad reactions to the working environment.

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Company Policy

• Hired employees are those who past our interviews and testing

and those who can comply to the needs of their job.

• Taking care of the people who take care of our customers is out

top priorities. In doing this , we will secure all the benefit’s of each

employee and treat them upright w/o harming their rights.

• Food safety policy, to promote safe and high quality food

service. Any violation will be dealt with accordingly.

• Motivate the employee through seminars and trainings to

improved their skills. It will also include incentives and promotion.

• Free food but it will depend on the number of hours you worked.

• Free uniform but will return after terminated from the service.
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TRAINING PROGRAM

Refers to the systematic process that will help employees to

elevate their skills and gained more knowledge about their job

description. All hired employees will undertake training in the

operation process that will be employed by the company in the

production of carrot juice.

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COMPENSATION PLAN

Hours Manned per Day 24 720

Avg. Hourly Wage 12.00 8,640

Workman's Comp Rate = 5.00% 432

Taxes & Benefits = 15.00% 1,296

Total 10,368
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FRINGE BENEFITS

Weaknesses of Shiera Wholesale

· Priced slightly higher than competing brands

· Not well known

· Fairly new company

· Not as much money to spend on advertising

· Packaging

· Limited availability

The only major weaknesses of Shiera Wholesale are the price,

limited availability, and little known brand name. Bluenext is slightly

more expensive than other leading dishwashing products, so the

company needs to focus on what makes Shiera Wholesale a unique

product.

While Shiera Wholesale cannot afford to spend as much money

on advertising as a larger company like Ajax, Ariel & Tide, it still needs

to put as much as money as possible into advertising to focus on name

recognition and brand awareness. Since dishwashing liquid is a

relatively inexpensive product, brand loyalty is a challenge that all

companies in the industry face.

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MARKET SHARE

Shierra Wholesale Detergent Bar and powder’s share to the

economy is by serving the household especially the mothers who are

left at home for household chores.

Secondly the laundry shops that needed powder and bar soap to

serve their clients for a better cleaner clothes.

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MARKET PRICE

The price of Shierra Wholesale product are the following:

POWDER DETERGENT 8.00 6x8.00(pack)

BAR DETERGENT 7.50 5x7.50(pack)

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FACILITIES

b. STATUS AND TIMETABLE OF THE PROJECT

The project is expected to be operational after six months of

preparation which shall commence in the formation of the partnership

which shall include the drawing of Articles of Partnership; then the

acquisition of capital; business registration and other legal

requirements; selection and acquisition of site; construction and

improvements of the site; selection and acquisition of furnishings and

fixtures; selection and acquisition of equipment and machinery;

selection of suppliers; selection and hiring of workers; orientation and

training; acquisition of supplies and normal operation.

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ECONOMIC ASPECTS

c. MARKET STUDY

DEMAND

The target market of the company is the residents and transients

in the Project 4 Quezon City. For this reason the demand will be

projected based on the population of the city which is 472,780 with an

estimated growth rate of 2% annually reaching about 511,752 in the

fifth year. In estimating the demand, it is assumed that 80% of the

population or about 378,224 is the potential market consuming about

1000 grams of detergent powder and bar for household use. Using

these figures as basis the projected demand is shown in this Table.

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PROJECTED CONSUMPTION

YEAR ESTIMATED ASSUMED

80% POPULATION CONSUMPTION

(1000grams/person)

First Year 378,224 378,224,000

Second Year 385,908 385,908,000

Third Year 393,504 393,504,000

Fourth Year 401,374 401,374,000

Fifth Year 409,402 409,402,000

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SUPPLY

The supply of raw materials in the local market is very limited.

Some of the supplies are imported. Other raw materials in the local

market rarely include. But the supply is also limited which account for

their high price in the market.

The projected supply for five year is believed to be the following;

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======================================

YEAR SALES % of DEMAND

======================================

2005 10,000.00 10%

2006 15,000.00 10%

2007 20,000.00 10%

2008 25,000.00 10%

2009 30,000.00 10%

2010 35,000.00 10%

2011 40,000.00 10%

2012 45,000.00 10%

2013 50,000.00 10%

101 455,000.00 10%

======================================
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DEMAND - SUPPLY ANALYSIS

The demand is greater than the supply. One of the reason for

this is that most of the supply are imported. The local suppliers of

detergent soap in the market produce only the traditional detergent

bar and powder, which are not even enough to meet the demand of

the market. The proponents will be focusing on the local market, but

their resources are not enough to serve bigger market. Plans to

increase production will be considered when the proponents are able to

promote Shiera wholesaler powder and bar detergent effectively in the

market and enable it to penetrate and increase its share of the market

beyond Project 4 Quezon City.

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COMPETITIVE POSITION

My proposed Competitor A Competitor B

business
Strengths Production likely Good brand image Product is cheaper
to be sited close and range of than A and sells
to retailers can products. well They offer
deliver at short good margin to
notice. retailers.
Weaknesses Difficult to find Products more Poor quality
good packaging. expensive than B. product, poor label
Uses synthetic design. I'm told by
colours and retailers that
preservatives. supplies are
irregular and not
always the amount
ordered.
Opportunities Retailers say Appears to be
demand for expanding
products without deliveries to new
additives is areas according to
increasing. I can newspaper reports.
produce without
added colours.
Threats Strong promotion Cheaper products May have over-
by A. There are than B. expanded
few wealthy distribution
consumers and network and failing
price is most to make deliveries.
important factor. I
am not yet sure of
production costs.
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MARKETING PROGRAM

The Product. The company will manufacture detergent bar and

soap.

The Price. The price will be competitive with the other

detergent bar and powder available in the market. The bar soap are

sold at P4.50 per bar, while the powder were sold to 3.50 per 50grms

in the market. In order to penetrate the existing market and at the

same time increase its market share the company will sell at P5.00 per

bar.

Promotion. The product will be promoted in using billboard

signs will be placed in conspicuous public places. And flyers will be

distributed at the entrance of supermarkets. The store display will be

done in a manner by which the product will gain customers’ attention.

Product tasting for the public will also be made in supermarkets in the

first month of its introduction in the market.

Packaging Design. The product will be available at 50grms

colored plastic coat for the powder, and colored platic coat for the bar

weighted 425 grms. The label will contain the fragrances (flavors) of
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the detergent half covered with bloody red coat. Both the logo and

design and the detergent bar and soap product of the company will be

registered and patented as the exclusive property of the proponents.

Terms of Sale. All sales will be on cash basis with direct buyers.

While consignment term for malls.

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CHANNELS OF DISTRIBUTION

The company intends to sell the product directly to the consumer

in the first years of operation. It is one way to ensure that it could be

made more affordable and also monitor its trend and consumer

acceptance of the product.

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BUILDING OF SHIERA WHOLESALER

In general, a building should have enough space for all

production processes to take place without congestion and for storage

of raw materials, packaging materials and finished products. However,

the investment should be appropriate to the size and expected

profitability of the enterprise to reduce start-up capital, the size of any

loans taken out and depreciation and maintenance charges.

Roofs and ceilings

In tropical climates, overhanging roofs keep direct sunlight off

the walls and out of the building. This is particularly important when

processing involves heating, to make working conditions more

comfortable. Fibre-cement tiles offer greater insulation against heat

from the sun than galvanised iron sheets do. High level vents in roofs

both allow heat and steam to escape and encourage a flow of fresh air

through the processing room. The vents must be screened with mesh

to prevent insects, rodents and birds from entering the room. If heat is

a serious problem, the entrepreneur could consider fitting electric fans

or extractors, although this clearly increases capital and operating

costs.
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Rafters or roof beams within the processing and storage rooms

are unacceptable. They allow dust to accumulate, which can fall off in

lumps to cause gross contamination of products. Similarly, insects can

fall from them into products. They also allow paths for rodents and

birds, with consequent risks of contamination from hairs, feathers or

excreta. It is therefore essential to have a paneled ceiling fitted to any

processing or store-oom, with careful attention when fitting them to

ensure that there are no holes in the paneling. Care should also be

taken to prevent birds, rodents and flying insects gaining access to the

processing room through gaps in the roof structure or where the roof

joins the walls.

Walls

As a minimum requirement, all internal walls should be rendered

or plastered with a good quality plaster to prevent dust forming in the

processing room. An experienced plasterer should be used to ensure

that no cracks or ledges remain in the surface finish, which could

accumulate dirt and insects. The lower area of walls, to at least 1.08

metres (four feet) above the floor, is most likely to get dirty from

washing equipment, from product splashing etc. and special attention

should be paid to ensure that this area is easily cleaned. Higher areas

of walls should be painted with a good quality emulsion. The lower

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parts of walls should be either painted with a waterproof gloss paint,

preferably white, to allow them to be thoroughly cleaned, or ideally

they should be tiled with glazed tiles. If tiling a process room is too

expensive, it is possible to select particular areas such as behind sinks

or machinery and only tile these parts. In some countries there is a

legal requirement for specified internal finishes and this should be

checked with the Ministry of Health or other appropriate authority

Windows and doors

Window sills should be made to slope for two reasons: to

prevent dust from accumulating and to prevent operators from leaving

cloths or other items lying there, which in turn can attract insects.

Windows allow staff to work in natural daylight, which is preferable to

and cheaper than electric lighting. However, in tropical climates there

is a natural inclination for workers to open windows to allow greater

circulation of fresh air. This provides easy access for flying insects,

which can readily contaminate the product. Windows should therefore

be fitted with mosquito mesh to allow them to be left open.

Normally doors should be kept closed, but if they are used

regularly there is again a tendency for them to be left open with

similar consequences of animals and insects entering the plant. In this

case, thin metal chains or strips of material that are hung vertically
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from the door lintel may deter insects and some animals, while

allowing easy access for staff. Alternatively mesh door screens can be

used. Doors should be fitted accurately so that there are no gaps

beneath them and all storeroom doors should be kept closed to

prevent insects and rodents from destroying stock or ingredients

Floors

It is essential to ensure that the floors of processing rooms and

storerooms are constructed of good quality concrete, smooth finished

and without cracks. In some developing countries, it is possible to buy

proprietary floor paints or vinyl based coatings, but these are usually

very expensive. Generally, it is not adequate to use the red wax floor

polishes that are commonly found in households, as these wear away

easily and could contaminate either products or packages. Over time,

spillages of acidic fruit products react with concrete and cause it to

erode. Attention should therefore be paid to cleaning up spillages as

they occur and to regularly monitor the condition of the floor.

The comers where the floor and the walls join are places for dirt

to collect. During construction of the floor, it should therefore be

curved up to meet the wall. It is possible to place fillets of concrete (or

'coving') in the comers of an existing floor to fill up the right angle, but
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care is needed to ensure that new gaps are not created which would

harbour dirt and insects.

The floor should slope at an angle of approximately 1 in 8 to a

central drainage channel. At the end of a day's production, the floor

can be thoroughly washed and drained. Proper drainage prevents

pools of stagnant water forming, which would in turn risk

contamination of equipment and dishwashing liquid. The drainage

channel should be fitted with an easily removed steel grating so that

the drain can be cleaned. Where the drain exits the building, there is a

potential entry point for rodents and crawling insects unless wire mesh

is fitted over the drain opening. This too should be easily removed for

cleaning.
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d. CONTRIBUTION TO THE PHILIPPINE ECONOMY

Our proposed detergent bar and powder manufacturing business

can help our economy especially for the people who need employment.

It lessens the percentage of the people who are unemployed. It also

helps those individuals to earn money to support their families in their

daily life. This improves their standard of living.

Taxes paid for the income of our government respective

municipality is to increase the income for accomplishment for the

government project and infrastructure for the improvement of our

country.

There are lots of competitors in detergent industry; everyone

improves their product for the satisfaction of the customers. The effect

of it in the supply of commodities in our country is even if it is

domestic or foreign. This will produce additional supply for the demand

of the people if they have increased in supply the price of commodities

of detergent will decrease. Anyone can buy the product. It also affects

the demand of material for detergent production. Detergent product is

easily produced because they have money to by the demand of

customers.

a. Employment and income

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o our detergent bar and powder manufacturing business will

employ within the community thus it can help in giving

livelihood to some wage earners. All employees will receive

what is due to them per presidential decrees.

b. Supply of commodities

o the company will surely serve the people in a way that

they can appreciate it.

c. Taxes

– taxes paid by the company to the municipal and national

government may be used for the community.

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III. TECHNICAL FEASIBILITY

a. THE PRODUCT

· Made from all-natural ingredients (contains no bleach, dyes,

perfumes or preservatives)

· Biodegradable packaging made from 100% recycled plastic

· Hypoallergenic

· Non-toxic

· Cuts grease

· Good housekeeping seal of approval

· Citrus scent

· Not tested on animals

· Rinses clean with no film

· Contains aloe vera & skin softeners

· #1 of all natural brands

· safe to wash baby bottles

· safe for children and pets

Oils and fats used are compounds of glycerine and a fatty acid,

such as palmitic or stearic acid. When these compounds are treated

with an aqueous solution of an alkali, such as sodium hydroxide—a

process called saponification—they decompose, forming glycerine and

the sodium salt of the fatty acid. The fat palmitin, for example, which
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is the ester of glycerine and palmitic acid, yields sodium palmitate

(soap) and glycerine upon saponification.

The fatty acids required for soap-making are supplied by tallow,

grease, fish oils, and vegetable oils from such plant varieties as the

coconut, olive, palm, soya bean, and maize. Hard soaps are made

from oils and fats that contain a high percentage of saturated acids,

which are saponified with sodium hydroxide. Soft soaps are semi-fluid

soaps made from linseed oil, cotton-seed oil, and fish oils, which are

saponified with potassium hydroxide. Tallow used in soapmaking

ranges from the cheapest grades, recovered from waste and used for

cheaper soaps, to the best edible grades, used for fine toilet soaps.

Tallow alone yields a soap that is too hard and too insoluble to provide

satisfactory lathering, and therefore it is usually mixed with coconut

oil. Coconut oil alone yields a hard soap that is too insoluble for use in

fresh water; it lathers in salt water, however, and is used as marine

soap. Transparent soaps usually contain castor oil, high-grade coconut

oil, and tallow. A fine toilet soap made of high-grade olive oil is known

as castile soap. Shaving soap is a potassium-sodium soft soap,

containing stearic acid, which gives a lasting lather. Shaving cream is

a paste that is a combination of shaving soap and coconut oil.

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b. MANUFACTURING PROCESS

The company has a machine that will conduct the manufacturing

process for the detergent bar and powder product. Manpower is

required to do the checking of the materials needed and the

ingredients and how much content shall be pour into the machine.

Labeling and packaging of the product is also been taking care of

machines. Repacking it into box are the manpower required.

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c. PLANT SIZE AND PRODUCTION SCHEDULE

The company will be open at 7:00 in the morning. The machine

will be open at 8:30 after the checking of the ingredients and the

materials that are needed for production.

After an hour of production, the machine will produce 20 boxes

of detergent bar with 50 bars of detergent in each box. While the

powder detergent will produce 15 boxes that contains 150pcs of plastic

sachet powder detergent.

Deliveries would be made at 11:00 in the morning and a

continuous manufacturing would be made until 5:00 in the afternoon,

closing time.
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d. MACHINERY

The decisions on equipment requirements are also influenced by:

· the cost and availability of machinery

· the availability of people who are skilled in

· maintenance and repair

· the availability and cost of spare parts and

· the possibilities of local equipment fabrication.

Information on the types and suppliers of equipment is often

difficult to obtain, but catalogues and sometimes databases of

equipment manufacturers and importers may be available at offices of

national and international development agencies, Chambers of

Commerce, university departments, research institutes, embassies of

other countries and trade or manufacturing associations.

It is preferable wherever possible, to buy equipment from local

suppliers and fabricators because servicing and obtaining spare parts

should be faster and easier.

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e. PLANT LOCATION

The company and its manufacturing operation will be located in

the City of Las Pinas. The business will be located within its target

consumer as well in consideration of economy. 

f. PLANT LAYOUT

The layout will be according to process. According to this system

workers, machines and equipment will be arranged to the flow of

operation. The aim is to increase productivity by organizing the

workplace according to the process involves in the manufacture of

carrot jam.
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g. STRUCTURE

All dishwashing powder and bar processing operations require an

hygienically designed and easily cleaned building to prevent products

from becoming contaminated during processing.

The two main sources of contamination are 1) insects and

animals and 2) micro-organisms. Insects and animals are attracted to

food buildings if dishwashing liquid or wastes are left lying round after

production has finished. Micro-organisms can grow in food residues

that are left on equipment, tables or floors which have not been

properly cleaned. Micro-organisms require water to grow and wet

processing therefore has an inherently greater risk of contamination

than dry processing does. However, some types of micro-organism can

form inert spores that are able to survive under dry conditions and

then grow when they come into contact with water or dishwashing

liquid and strict hygiene should also be enforced in drying operations.

In dry processing there is an additional risk of contamination by dust,

which can spoil dishwashing liquid itself and also harbour micro-

organisms. The following aspects of setting up a processing facility

should therefore be addressed by entrepreneurs, whether they are

constructing a new facility or converting an existing building.

 48

h. UTILITIES

Water and electricity are important facilities needed in the

manufactured of detergent bar and powder. The estimated utility costs

is P15,000/month

Lighting and power

General room lighting should be minimised wherever possible.

Full use should be made of natural daylight, which is both free and

better quality light, especially for intricate work. Where additional

lighting is needed, florescent tubes are cheaper to operate than

incandescent bulbs. However, if machinery is used that has fast

moving exposed parts, these should be lit with incandescent bulbs and

not tubes. This is because even though the parts should have guards

fitted, a rotating machine can appear to stand still if its speed matches

the number of cycles of the mains electricity that powers fluorescent

tubes - with obvious dangers to operators.

All electric power points should be placed at a sufficiently high

level above the floor that there is no risk of water entering them

during washing the floor or equipment. Ideally, waterproof sockets

should be used. It is important to use each power point for one

application and not use multiple sockets which risk overloading a

 49

circuit and causing a fire. If there are insufficient power points for the

needs of a process, additional points should be installed, even though

this is more expensive. All plugs should be fitted with fuses that are

appropriate for the power rating of the equipment and ideally the

mains supply should have an earth leakage trip switch. If three-phase

power is needed for larger machines or for heavy loads from electric

heating, it is important that the wiring is installed by a qualified

electrician to balance the supply across the three phases.

Water supply and sanitation

Water is essential in nearly all dishwashing liquid processing,

both as a component of products and for cleaning. An adequate supply

of potable water should therefore be available from taps around the

processing area. In many countries, the mains supply is unreliable or

periodically contaminated and it is therefore necessary for the

entrepreneur to make arrangements to secure a regular supply of

good quality water each day. This can be done by installing two high

level, covered storage tanks either in the roof-space or on pillars

outside the building. They can be filled alternately when mains water is

available and while one tank is being used, any sediment in water in

the other tank is settling out. As sedimentation takes several hours,

the capacity of each tank should be sufficient for one day's production.
 50

The tanks should have a sloping base and be fitted with drain valves

above the slope and at the lowest point. In use, water is taken from

the upper valve and when the tank is almost empty, the lower valve is

opened to flush out any sediment that has accumulated.

Water that is included in a product should be carefully treated to

remove all traces of sediment and if necessary, it should be sterilised.

This is particularly important if the product is not heated after water

has been mixed in as an ingredient.

There are four ways of treating water at a small scale: by

filtration; by heating; by ultra-violet light and by chemical sterilants,

such as hypochlorite (also named 'chlorine solution' or 'bleach'). Other

water treatment methods are generally too expensive at a small scale

of operation.

Filtration through domestic water filters is slow, but having made

the capital expenditure, it is relatively cheap. Larger industrial filters

are available in some countries. Heating water to boiling and holding it

at that temperature for 10-15 minutes is simple and has low capital

costs, but it is expensive because of fuel costs and it is time

consuming to do routinely. Heating sterilises the water but does not

remove sediment and boiled water may therefore require filtering or

standing to remove sediment.

 51

i. WASTE DISPOSAL

The wastes that will be incurred in the production are

biodegradable and could be managed by natural means of

disposal. Hence, there are no expected expenses that would be

incurred in the waste disposal of the excesses of production, which is

made up mostly of the ingredients.

 52

IV. FINANCIAL FEASIBILITY

a. TOTAL PROJECT COST

machinery and equipment 2,800,000.00

furniture and fixture 150,000.00

delivery pane l 50,000.00

working capital 1,000,000.00

total project cost 4,000,000.00

 53

b. INITIAL CAPITAL REQUIREMENTS

Equipment and Tools P 110,000.

Estimated Patents’ and Registration 100,000.

Lease Deposit 50,000.

Furniture/ Fixture 100,000.

Building Improvement 140,000.

Working Capital 1,200,000.

___________________________________________

Initial Capital Requirement P 1,700,000.00

 54

c. SOURCES OF FINANCING

The project will be funded through equity financing. The partners

contribute an amount equal to their share in the company. For its

initial year of operation the proponents of this project will need four

million pesos (4,000,000.00) to finance the business and its operation

for its first year in business.

 55

NET CASH INFLOW

Year net income depreciation net cash

inflow

2006 76735 1233 77968

2007 126237 1233 127470

2008 195142 1233 196375

2009 280122 1233 281355

2010 382785 1233 384018

 56

DISCOUNTED RATE OF RETURN

The discounted rate of return of the business is

67.74%. this means the business is acceptable, since it

is higher than the cost of capital of 17%

Year net cash 66% 67% 66% 67%

inflow

2006 77968 0.60240 0.59880 46969 46687

2007 127470 0.36289 0.35856 46259 45706

2008 196375 0.21861 0.21470 42930 42164

2009 281355 0.13169 0.12856 37053 36173

2010 384018 0.07933 0.07698 30466 29564

 57

NET PRESENT VALUE

The project met the income requirements of 27%

(cost of capital). Since the total computed NPV is

greater than the total project cost. The total project cost

is 197801 and the computer NPV is 454439.

Year annual cash 27% net present

flow value

2006 77968 0.70740 55154

2007 127470 0.6200 79031

2008 196375 0.48819 95868

2009 281355 0.38440 108152

2010 384018 0.30268 116234

NPV = 454439 – 197801

= 256638
 58

CURRENT RATIO

The computation shows that in the first year operation of the

business. The current assets are enough to cover up the one peso and

nine cents for every peso liability. Second year 2.4:1 the assets can

cover up to two pesos and 4 centavos for every peso of liability. On

third year is 3.8:1 the assets cover up the 3 pesos and 8 cents for

every pesos of liability. Fourth 5.6:1 the assets can cover up the 5

pesos and 6 cents for every peso of liability and fifth year is 6.3:1

assets can cover up the 6 pesos and 3 cents for every peso of liability.

The yearly average increase is 3.10:1 the business is very much

liquid because it has enough liquid assets to pay the liabilities.

 59

Current liabilities

2006 2007 2008 2009 2010

248296 335152 492791 734825 1128155

145493 137879 134143 131822 180134

1.7:11 2.4:1 3.8:1 5.6:1 6.3:1

 60

EQUITY RATIO

Equity ration measures what percent of the total assets are

financed by the partners capital. There is 24.48% in first year,

18.30% in second year 12.52% in the third year 8.42% in fourth year

and 5.50% in the fifth year. There is the partners are financing an

average of 13.84% of the total assets.

 61

FINANCIAL ANALYSIS

Income and profit

From the market survey, the estimated market size and share

enables the expected sales to be calculated. The gross profit (or gross

loss) is the difference between the expected income and the total

operating costs over the first year, including any loan repayments.

Income is therefore calculated as follows:

Income = Selling price per unit x number of units sold

 62

INCOME STATEMENT

2006 2007 2008 2009 2010

329280 422688 553488 908934

SALES

Less : cost of 78636 96372 118456 145956 180525

sales
Stocks 21600 22680 23812 25008 26256
Labor cost 100236 119052 142268 170862 206781
Total cost of 100236 119052 142268 170862 206781
sales
 63

229044 303636 411220 543174 702153

Gross profit

Less:
operating
expense
4000 - - - -
Taxes &
license
60000 69000 79350 91253 1049401
Lease & rent
expense
14400 14832 15276 15732 16200
Electricity &
water
1000 1100 1210 1331 1464
Miscellaneous
expense
1000 1100 1210 1331 1464
Selling
expense
1000 1100 1210 1331 1464
Repairs &
maintenance
10000 10500 11025 11576 12155
Transportation
& delivery
1080 1134 1191 1250 1313
Contingencies
1233 1233 1233 1233 1233
Depreciation
93713 99999 111705 125037 140234
Total
operating
expense
135331 203637 299515 418137 561919
Income from
operation
 64

23086 18595 13341 17193 -

Less: interest
expense
112845 185642 286974 411944 562919
Total

112845 185642 286974 411944 562919

Total income
36110 59405 91832 131822 180134
Less provision
for income tax
76735 126237 195142 280122 382785
NET INCOME
 65

CASH FLOW

2006 2007 2008 2009 2010

CASH
INFLOW
Beginning 248296 335152 492791 734825
Balance
Partners 62000
capital
Proceeds from 135801
loan
Sales 39380 422688 553488 714138 908934
Others 600 600 800 1000 1000
Total cash 527681 671584 889440 1207929 1644759
inflow

Less : cash
outflow
Stocks 78636 93372 118456 145956 180525
Labor cost 21600 22680 23812 25008 26256
100236 119052 142268 170964 2006781

Add :
operating
expense
Electricity & 4000 - - - -
water
Miscellaneous 60000 69000 79350 91253 104941
Taxes and 14400 14832 15276 15732 16200
licenses
Others 1000 1100 1210 1331 1464
Computer 10000 10500 11025 11576 12155
advertisement
Selling 1000 1100 1210 1331 1464
expense
Repairs & 1000 1100 1210 1331 1464
maintenance
Contingencies 1080 1134 1191 1250 1313
Total 92480 98766 110472 123804 139001
operating
expense

Interest 23086 18595 13341 7193 -

 66

expense
Payments of 26418 30909 36163 42311 -
loan
Withdrawals 31000 33000 35000 37000 39000
Payment of 36110 59405 91832 131822
taxes
Acquisition of 6165 - - - -
machinery &
equipment &
utilities
CASH ON 248296 335152 492791 734825 1128155
HAND
 67

BALANCE SHEET

CURRENT 2006 2007 2008 2009 2010

ASSETS

Cash 248296 335152 492791 734825 1128155

FIXED
ASSETS

Gross fixed 6165 6165 6165 6165 6165

assets

Acc. Dep 1233 2466 3699 4932 6465

Net fixed 4932 3699 2466 4233 -

assets

TOTAL 253228 338851 495257 736058 1128155

ASSETS

LIABILITIES

Notes 109383 78474 42311 - -

payable

Income tax 36110 59405 91832 131822 180134

payable

TOTAL 145493 137879 134143 131822 180134

LIABILITIES

PARTNERS
CAPITAL

31000 31000 31000 31000 31000

31000 31000 31000 31000 31000

 68

Total
partners 62000 62000 62000 62000 62000
capital

Add: net
income 76735 126237 195142 280122 382785
Retained
earning 45735 138972 299114 542236
Less draw
31000 33000 35000 37000 39000
Total
partners 107735 200972 361114 604236 948021
equity

Total
liabilities 253228 338851 495257 736058 1128155
and capital