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Olive business plan

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Olive Business Plan
Olive Business Plan
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Olive business plan

  1. 1. Supervised by: Syed Afzal Moshadi Shah Group Members: - Zaka Ul Hassan - Nouman Sarfaraz
  2. 2. <ul><li>Business Idea: </li></ul><ul><li>Plantation of Olive Trees in Pakistan </li></ul><ul><li>Providing consultancies </li></ul>
  3. 4. Olive Growing Environment Climatic Requirements for Olive Cultivation Factors Standard Climate Pakistan Climate Temperature 5-45 o C 10-45 o C Rainfall 700-800mm More than 500mm Humidity 75-90% 70% Altitude 400-1700meter 100-3000meter Chilling Req. 400-2000 hrs 400-2100 hrs Slope upto 20 o 10 o -50 o
  4. 5. Marginal / Barren lands Marginal / Barren Land
  5. 6. <ul><ul><li>Market consumption and production World Wide </li></ul></ul>Table 1 – World Olive Production & Consumption Countries <ul><ul><li>Market consumption in Pakistan </li></ul></ul>Table 2 - Import of Olive Oil in Pakistan Source: Federal Bureau of Statistics (2009) Source: Edible oils in Pakistan Country Production in Tons (2009) Production % Consumption Spain 1,199,200 41.2% 20% Italy 587,700 20.2 30% Greece 332,600 11.4 9% Syria 168,163 5.8 3% Tunisia 150,000 5.2 2% Turkey 143,600 4.9 2% Morocco 95,300 3.3 2% Year Quantity (tons) Value in (Mn PKR.) 2004-05 461 59.9 2005-06 746 105 2006-07 1463 172.2 2007-08 2008 358 2008-09 2768 380
  6. 7. <ul><li>50 Mn naturally grown wild olive trees in marginal areas </li></ul><ul><li>7 Mn wild olive trees grafted by support of PODB and IAO </li></ul><ul><li>900 acre olive orchards establish in different region of KPK, Balochistan and Potohar </li></ul>Pakistan Government Actions <ul><li>Pakistan is world's 4th largest importer of edible oils </li></ul><ul><li>Edible oil imports forecast 2.16 Mn metric tons 2011/12 </li></ul><ul><li>Demand of edible oil is increasing at the rate of 6 to 8 % per annum </li></ul>Pakistan Edible Oil Usage Source: USDA Reports (2011)
  7. 8. Olive Orchard
  8. 9. Olive Plant Varieties: <ul><li>HARDY Arbequina </li></ul><ul><li>Leccino </li></ul><ul><li>Pendallino </li></ul><ul><li>Sevallino </li></ul><ul><li>Ascolana </li></ul><ul><li>Coratina </li></ul><ul><li>SENSTIVE </li></ul><ul><li>Frantoio </li></ul><ul><li>Manzanilla </li></ul><ul><li>Koroneiki </li></ul><ul><li>MODERATE </li></ul><ul><li>Picholine </li></ul>
  9. 10. <ul><li>Features </li></ul><ul><ul><li>Forms </li></ul></ul><ul><li>Generally olives are being use in three forms: </li></ul><ul><li>Olive Oil </li></ul><ul><li>Table Olive </li></ul><ul><li>Olive Cake (waste after olive extraction use for fertilizer) </li></ul><ul><ul><li>Plant benefits </li></ul></ul><ul><li>Generate energy 2.5 times more than other woods </li></ul><ul><li>Ash used for fertilizing gardens and plants </li></ul><ul><li>Wood is being use for making handicrafts </li></ul><ul><ul><li>Oil Grades </li></ul></ul><ul><li>Olive oil has four grades: </li></ul><ul><li>Extra virgin olive oil </li></ul><ul><li>Olive Pomace oil </li></ul><ul><li>Sulphonated oil </li></ul><ul><li>Technical oil </li></ul>
  10. 11. <ul><li>Benefits </li></ul><ul><ul><li>Products can be made </li></ul></ul><ul><li>Cosmetics </li></ul><ul><li>Health and beauty </li></ul><ul><li>Personal Care </li></ul><ul><li>Herbal Medicine </li></ul><ul><li>Edible products eg. </li></ul><ul><ul><li>Pickles, jams, sauces, extract vinegar, breads, confectionary, and traditional Pakistani Sweets. </li></ul></ul><ul><li>  </li></ul><ul><li>Nutritional Importance of Olive </li></ul><ul><li>Vitamins E, K, and A </li></ul><ul><li>Used as a balm </li></ul><ul><li>Massaged onto the body </li></ul><ul><li>Help against wrinkles and delaying the effects of old age </li></ul><ul><li>Help combat against strokes, heart-disease, High blood pressure, diabetes </li></ul>
  11. 12. Table Olive Product Options Olive Oil Seeds Tasbeegh Traditional Sweet Burfi Dried Olive Powder Bread Medicine From Olive
  12. 13. Financial Costing Olive orchard on 40 kanal which is 5 acre. Basic Description: 835 Plants on 5acre (167/acre spacing of 4x6 meter) Capital Cost: We have taken the costing of 5 acre area for the plantation of Olive plants. Table 3 – Irrigation equipments Irrigation System Installation Cost: Table 4 – Plants Installation Cost Initial Cost: Equipments Cost PKR. 9 Water Tanks 45,000 Land Bore 40,000 Hard Plastic Pipe 11,880 One Electric Motor 10,000 Total 106,880 Material No. of Unit Per Unit PKR. Total Olive Plants 835 30 25,050 Fertilization 6 2,000 12,000 Land Preparation Labor 3 7,000 21,000 Irrigation System 1 106,880 106,880 Total 164,930
  13. 14. <ul><ul><li>Annually Running Cost </li></ul></ul>Table 5 – Input Cost No. of Months Per Month Total Manpower 12 7,000 84,000 Electricity (April, May, June) 3 3,000 9,000 Electricity Per Month 9 500 4,500 Other Expenses 12 500 6,000 Fertilizer 6 2,000 12,000 Total 115,500
  14. 15. <ul><ul><li>Return </li></ul></ul>Estimated Production: We have estimated the production of olives by 95% of successive rate. Table 6 – Production of Olives Per Tree Year Olives-kg/Tree Olives-kg /5 Acre Year 1 0.0 0.0 Year 2 0.0 0.0 Year 3 0.0 0.0 Year 4 4.5 3,556 Year 5 6.5 5,135 Year 6 8 6,320 Year 7 11 8,690 Year 8 12 9,480 Year 9 13 10,270 Year 10 15 11,850
  15. 16. Preparation of Table Olive Cost of producing Table Olives Price Per Kg Preparation of Oil Cost of producing Olive Oil Profit Per ltr Packaging PKR./kg Bottle 35 NaOH 1 Nacl 1.66 Vinegar 40 Labor 2 Utility Expenses 2 Total 81.66 Selling Cost PKR./kg Retail Price 500 COST Manufacturing Cost (81.66) Retailer Margin 20% (100) Sales man Margin 5% (25) Profit 293.34 Packaging PKR./ltr Bottle 35 Transportation 2.81 Labor 2 Utility Expenses 2 Total 41.81 Selling Cost PKR./ltr Retail Price 500 COST Manufacturing Cost (41.81) Retailer Margin 20% (100) Sales man Margin 5% (25) Profit 333.18
  16. 17. Projected Cash Flow Analysis Table Olives: Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Olive kg 0 0 0 0 2,133 3,081 3,792 5,214 5,688 6,162 7,110 Manufacturing Cost 0 0 0 0 184,181 261,594 319,655 435,775 474,482 513,189 590,603 Total Cost 164,930 115,500 115,500 115,500 549,681 377,094 435,155 551,275 589,982 628,689 706,103 Revenue 0 0 0 0 799,875 1,155,375 1,422,000 1,955,250 2,133,000 2,310,750 2,666,250 Net Profit -164,930 -115,500 -115,500 -115,500 250,194 778,281 986,845 1,403,975 1,543,018 1,682,061 1,960,147 Income -164,930 -280,430 -395,930 -511,430 -261,236 517,045 1,503,890 2,907,865 4,450,883 6,132,944 8,093,091 Cumulative Cost 164,930 280,430 395,930 511,430 1,061,111 1,438,205 1,873,360 2,424,635 3,014,617 3,643,306 4,349,409 Cumulative Revenue 0 0 0 0 799,875 1,955,250 3,377,250 5,332,500 7,465,500 9,776,250 12,442,500 NPV @ 0% NPV @ 5% NPV @ 10% NPV @ 15% 12309703 9721802 7815713 6385157
  17. 18. Projected Cash Flow Analysis Olive Oil: Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Olive ltr 0 0 0 0 444 642 790 1,086 1,185 1,284 1,481 Manufacturing Cost 0 0 0 0 18,579 26,837 33,030 45,416 49,545 53,674 61,931 Total Cost 164,930 115,500 115,500 115,500 134,079 142,337 148,530 160,916 165,045 169,174 177,431 Revenue 0 0 0 0 166,641 240,703 296,250 407,344 444,375 481,406 555,469 Net Profit -164,930 -115,500 -115,500 -115,500 32,561 98,366 147,720 246,428 279,330 312,233 378,038 Income -164,930 -280,430 -395,930 -511,430 -478,869 -380,502 -232,782 13,645 292,976 605,208 983,246 Cumulative Cost 164,930 280,430 395,930 511,430 645,509 787,846 936,376 1,097,292 1,262,337 1,431,511 1,608,942 Cumulative Revenue 0 0 0 0 166,641 407,344 703,594 1,110,938 1,555,313 2,036,719 2,592,188 NPV @ 0% NPV @ 5% NPV @ 10% NPV @ 15% 1847308 1474767 1192541 975345
  18. 19. Brand Name: Potohar Olives Target Market: - Upper and Middle class Marketing Strategy: - Push Strategy (in the beginning) Give away high margins to Retailers (20% of the price) and Sales Staff (5-15% of the price) Low price entry strategy: Product Competitor Rate PKR./ltr Our Rate PKR./ltr Extra Virgin Olive Oil 726.25 500.00 Pomace Olive Oil 479.12 440.00 Table Olive 725.11 500
  19. 20. <ul><li>The proposed project would require following staff members </li></ul><ul><li>First three years </li></ul><ul><ul><li>Manager - 1 </li></ul></ul><ul><ul><li>Gardeners - 1 to 3 </li></ul></ul><ul><li>Fourth year onward </li></ul><ul><ul><li>Manager - 1 </li></ul></ul><ul><ul><li>Gardeners - 1 to 3 </li></ul></ul><ul><ul><li>Machine operators - 1 </li></ul></ul><ul><ul><li>Labor - 2 </li></ul></ul>
  20. 21. SWOT Analysis <ul><li>Strengths: </li></ul><ul><li>High profit margin </li></ul><ul><li>Suitable with Pakistan’s climate </li></ul><ul><li>Barren / marginal land can be utilized </li></ul><ul><li>It can be cultivated on the fertile land along with other crops as well </li></ul><ul><li>Whole plant right from the seed to fruit is beneficial and useful </li></ul><ul><li>Religious importance </li></ul><ul><li>Opportunities: </li></ul><ul><li>Growing tastes and preferences </li></ul><ul><li>Can be exported to neighboring countries </li></ul><ul><li>Huge free barren land </li></ul><ul><li>Can develop a strong national and international brand. </li></ul><ul><li>Weakness: </li></ul><ul><li>Lack of Awareness (both producers and consumers/ customers) </li></ul><ul><li>Government level subsidy not availed </li></ul><ul><li>Threats: </li></ul><ul><li>Big players response </li></ul><ul><li>Strong brands loyalty </li></ul><ul><li>Government policies </li></ul>
  21. 22. Thanks for your patience Any Question???

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