Olive business plan cultivation, harvest and it's selling process in details. Plan is designed by analysis of local market.

2. Table of Contents
1) Business Idea
1
a. Olive Growing Environment
2
b. Pakistan Government Actions
2
2) Need
3
a. Current market consumption World Wide
3
b. Current market consumption Pakistan
3
3) Features
4
a. Forms
4
b. Usage
4
c. Plant benefits
4
4) Benefits
5
a. Health/ Nutritional Importance of Olive
5
b. Islamic values
6
5) Financial Costing
7
a. Capital cost
7
b. Running cost
8
c. Return
8
6) Product options
9
a. Preparation of Table Olive
9
b. Extraction of Oil
9
7) Current market situation
9
8) Marketing and management Aspects
10
a. Preparation of Table Olive
10
b. Preparation of Oil
11
9) Projected Cash Flow Analysis Table Olives
12
10) Projected Cash Flow Analysis Olive Oil
13
11) SWOT Analysis
14
12) Conclusion
15
13) Interviewed By
16
14) References
16

3. (1)
Business Idea:
Plantation of Olive Trees in Pakistan
880,000 hectare suitable for olive cultivation. We must know that mainly farmer having land with slopes above
10% would be interested in introducing this crop in their farming system. By considering about 30% of the entire
suitable area will reduce the total potential area at around 264,000 hectares. This area would be put under olive
cultivation, and by adopting an average plant density of 250 trees per hectare a production of olive oil in the region
will be of 72,000 ton per year. [1]
Providing consultancies
Providing the consultancy to the entrepreneurs about the business.
Land suitable for olive plantation in Pakistan:

4. a) Olive Growing Environment:
Table 1 - Climatic Requirements for Olive Cultivation
Factor
Standard Climate
Pakistan Climate
Temperature
5-25oC
10-45oC
Rainfall
700-800mm
More than 500mm
Humidity
75-90%
70%
Altitude
400-1700meter
100-3000meter
Chilling Req.
400-2000 hr
400-2100 hr
Slope Suitable
<20o
10o-50o
Soils that have a depth of cultivation of at least 0.4/0.5 m and pH ranging from 6 to 7.5. Olive trees are adaptable to a
wide range of soil types and can be grown in siliceous and calcareous soil. Medium fertility soils (having 1-2 % of
organic matter) receiving an average rainfall of at least 500- 550 mm per year may guarantee good productions. Olive
tree can withstand as low as temperature of -8 or -9 °C as long as it is not subjected to them for many hour provided
that trees are not at the active growing period.
b) Pakistan Government Actions:
Pakistan’s vegetable oil imports are forecast at a record 2.16 million metric tons (MMT) 2011/12, five percent higher
than the estimated 2.05 MMT imported in the 2010/11. Nearly 75 percent of Pakistan’s domestic consumption of
vegetable oil is met through imports, 81 percent of which is comprised of palm oil. [2]
Pakistan demand of edible oil is increasing at the rate of 6 to 8 % per annum greatly switching over from ghee to edible
oil. Pakistan edible oil imports are likely to go up by five percent in 2011/12 to a record 2.16 million tons it must be
known Pakistan is world's 4th largest importer of edible oil. [3]
50Mn naturally grown wild olive trees in marginal areas through them 7Mn grafted with European olive species with
the support of Pakistan Oilseed Development Board (PODB) and Italian Ministry of Foreign Affair. 900 acre Olive
orchards establish in different region of KPK, Balochistan and Potohar. [4]

5. (2)
Need
a.
Current market consumption World Wide:
The International Olive Oil Council (IOC) is an intergovernmental organization based in Madrid, Spain, with 23
member states. It promotes olive oil around the world by tracking production, defining quality standards, and
monitoring authenticity.
In the future, the world olive oil market will probably be more and more segmented on the basis of product quality
differentiation, with price playing a relatively less important role than in the past. This is already obvious in the
relatively richer countries where olive oil is part of the traditional diet and it can be seen as a mature food.
Table 2 – World Olive Production & Consumption Countries
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%
The International Olive Oil Council figures on olive oil consumption show a worldwide increase from 1,666.5 tones in
1990 to 2,839 tons in 2009. Consumption went up in the olive’s traditional base in the Mediterranean and Middle East
from 1,427.5 tons in 1990 to 2,242.5 tons in 2009. [5]
b.
Current market consumption Pakistan:
The 5% of richest part of the Pakistani population can be considered for the moment the market segment to which the
olive oil supply is addressed. The segment is not yet saturated; big chances of growth are represented by and within this
segment.
Olive oil consumer in Pakistan is not yet used to this as basic commodity. In the edible oils business agree that a
substantial growth is possible.

6. According to USDA reports, Pakistan edible oil imports can touch a record 2.16 million tons up by 5% in 2011-12.
Pakistan mainly imports low-priced palm oil that meets 81% of total edible oil imports. [6]
Table 3 - Import of Olive Oil in Pakistan
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
Source: Federal Bureau of Statistics 2009
(3)
Features
a. Forms:
Generally olives are being use in three forms:

Olive Oil

Table Olive

Olive Cake (waste after olive extraction use for fertilizer)
b. Usage
Olive oil has four grades:

Extra virgin olive oil

Olive Pomace oil

Sulphonated oil

Technical oil
c. Plant benefits
Olives are now being looked at for use as a renewable energy source, using waste produced from the olive plants as an
energy source that produces 2.5 times the energy generated by burning the same amount of wood. The same reference
claims that the smoke released has no negative impact on neighbor or the environment, and the ash left in the stove can
be used for fertilizing gardens and plants. The wood is of high value because it is finally graded and used for making
handicrafts.

7. (4)
Benefits
a. Health
The Olives and its oil, leaves, residue, and wood all have different nutrition, health, herbal and natural values and uses.
Different products can be made like Edible products, cosmetics, health and beauty products, Personal Care, Herbal
Medicine and several other uses. Research on olives & its leaves, olive oil, and prepared different pickles, jams, sauces,
extract vinegar, and breads, confectionary, and traditional Pakistani Sweets.
Nutritional Importance of Olive:

Vitamins E, K, and A

Used as a balm, it moisturizes the skin, combating dry skin and softening it

Massaged onto the body, Olives fortify the limbs, combat against inflammation

Help against wrinkles and delaying the effects of old age

Help combat against strokes, heart-disease, High blood pressure, diabetes

The powder of seeds mixed with butter is effective in brittle nails

It also removes the kidney stones

8. b. Religious Values
Islam:
Olives have been mentioned six times in the Quran and their health benefits have been propounded in Prophetic
medicine.
(Surat An-Nūr) (The Light) (24:35)
“Allah is the Light of the heavens and the earth. The example of His light is like a niche within which is a lamp, the
lamp is within glass, the glass as if it were a pearly [white] star lit from [the oil of] a blessed olive tree, neither of the
east nor of the west, whose oil would almost glow even if untouched by fire. Light upon light. Allah guides to His light
whom He wills. And Allah presents examples for the people, and Allah is Knowing of all things.”
(Surat Al-Mu'minūn) (The Believer) (23:20)
“And [We brought forth] a tree issuing from Mount Sinai which produces oil and food for those who eat.”
(Surat An-Naĥl) (The Bee) (16:11)
“He causes to grow for you thereby the crops, olives, palm trees, grapevines, and from all the fruits. Indeed in that is a
sign for a people who give thought.”
(Tirmizi, Ibn Maja)
Hazrat Sayyed Al-Ansari(R.A.) narrates that the Prophet (sallallahu alaiyhi wassallam) said:
“Eat the olive oil and massage it over your bodies since it is a holy (mubarak) tree.”

9. (5)
Financial Costing
Olive orchard on 40 kanal which is 5 acre.
Basic Description:
835 Plants on 5acre (167/acre spacing of 4x6 meter)
a. Capital Cost
We have taken the costing of 5 acre area for the plantation of Olive plants.
Fertilization expenses:
Trolley 1500 PKR and 500 PKR rent (1500+500= 2000 PKR.)
Irrigation System Installation Cost:
Table 4 – Irrigation equipments
Equipments
Cost PKR.
9 Tanks
45,000
Land Bore
40,000
Hard Plastic Pipe
11,880
1 Electric Motor
10,000
= 106,880
Initial Cost:
Table 5 – Plants Installation Cost
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
= 164,930

10. b. Running cost
Table 6 – 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
= 115,500
c. Return
Estimated Production:
We have estimated the production of olives by 95% of successive trees.
Table 7 – 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
3,555
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

11. (6)
Product Options
Preparation of Table Olive:
Fruit is harvested when it is light green. After washing with water fruits are put in 1-2% NaOH for 36-48 hour. Later on
fruits are taken out and washed 5-6 times and then put in 6-8% Nacl solution for 14-21 days and last fruits are washed
and put in vinegar.
Extraction of Oil:
Fruits are harvested during October when these are purplish. Later on these are mechanically crushed to get oil. Olive
contains 15-40% oil.
(7)
Current Market Situation
Table 8 - Olive Oil Price at Market
Company
Type
Quantity
Price PKR.
PKR. Per ltr.
Fragata
Pomace Oil
5ltr
2125
425
Borges
Pomace Oil
5ltr
1650
330
Lasso
Extra Virgin Oil
5ltr
3850
770
Borges
Extra Virgin Oil
5ltr
3850
770
Mundial
Extra Virgin Oil
3ltr
1995
665
Rafael Salgado
Extra Virgin Oil
3ltr
1925
641.66
Rafael Salgado
Pomace Oil
3ltr
1675
558.33
Mundial
Pomace Oil
4ltr
1675
418.75
Source: Local Market Price
The average current market rate of the Extra Virgin Oil is 726.25 PKR. /ltr and the Pomace Oil is 479.12 PKR./ltr. [8]
Table 9 – Table Olive Price at Market
Company
Quantity
Price PKR.
PKR. Per kg
Figaro
450gm
365
811.11
Marios
595gm
375
630.25
Acora
225gm
165
733.33
Source: Local Market Price
The average current market rate of the Table Olives per kg is 725.11 PKR.

12. (8)
Marketing and Management Aspects
Preparation of Table Olive
Olive Pitting Machine is being use for making table olives. Company will purchase that machine at the fourth year
having the worth of 250,000 PKR. The marketing expenses are accounted to be 10,000 PKR. Table oils will be selling
in the local stores initially at the rate of 500 PKR. This is much lower than our competitor’s price. The pricing strategy
we are using is price penetration.
Cost of producing Table Olive:
Packaging
PKR./kg
Bottle
35
NaOH
1
Nacl
1.66
Vinegar
40
Labor
2
Utility Expenses
2
Total
81.66
Price Per Kg:
Selling Cost
PKR./kg
Retail Price
500
Manufacturing Cost
81.66
Retailer Margin 20%
100
Sales man Margin 5%
25
Total
206.66
Profit
293.34

13. Preparation of Oil
The oil will be extracted at the Tarnab farm where the facility is given for free of cost. Olive oil 1 ltr extracted from
8kg olives. Oil will be selling to the local stores where they are sold at the price of 500 PKR./ltr. The marketing
expenses are accounted to be 10,000 PKR. Table oils will be selling in the market initially at the rate of 500 PKR. This
is much lower than our competitor’s price. The pricing strategy we are using is price penetration.
Cost of producing Olive Oil:
Packaging
PKR./ltr
Bottle
35
Transportation
2.81
Labor
2
Utility Expenses
2
Total
41.81
Profit Per ltr:
Selling Cost
PKR./ltr
Retail Price
500
Manufacturing Cost
41.81
Retailer Margin 20%
100
Sales man Margin 5%
25
Total
166.81
Profit
333.18

14. 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

15. 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

16. SWOT Analysis
Strengths:
Opportunities:
 High profit margin
 Growing tastes and preferences
 Suitable with Pakistani climate
 Can be exported to neighboring countries
 Barren / marginal land can be utilized
 Huge free barren land
 It can be cultivated on the fertile land along with
 Can develop a strong national and
other crops as well
international brand.
 Whole plant right from the seed to fruit is
beneficial and useful
 Religious importance
Weakness:
 Lack of Awareness (both producers and
consumers/ customers)
 Government level subsidy not availed
 Low entry barriers
Threats:
 Big players response
 Strong brands loyalty
 Government policies

17. (9)
Conclusion
Olive Oil Demand Increased:
With growing needs and market potential there is a huge demand for food and other household products. Growing
health consciousness and increased incomes have caused a shift in eating habits of people which are still evolving.
Historically, the demand for edible oils has gone through different stages which are mainly marked by consumer due to
healthy properties of the oils. Pakistani has shifted in their diet habits from animal saturated fats (butter) to healthier
products like vegetable saturated fats (ghee) and finally to even healthier products such as vegetable unsaturated fats
(canola, sunflower oils). Nowadays a further substitution of ghee and vegetable oils with olive oil can be envisaged. In
rural areas and amongst the poorest parts of Pakistan the consumption of ghee is relatively higher than in urban areas,
indicating that the people who are shifting to healthier oils are mainly living in urban areas and have a higher level of
education and income.

18. (10) Interviewed By
 Mr. Hakm Dad, Havelian; Grafting and have sapling
 Mr. Iqbal, Khanpur; grafting on wild olive trees
 Mr. Mukhtar NARC Islamabad; research centre for olives
 Dr. Hafiz Ishfaq, University of Arid Agriculture - Rawalpindi; Researcher
 Mr. Azmat Ali Awan, PODB Tarnab; SCIENTIFIC OFFICER
 SHAJARPAK PVT LTD, Pakistan; Lahore
(11) References
1). Olive Oil Pakistan (2010), Official website available from http://www.oliveoilpakistan.com/; Accessed on April 02,
2011.
2). gain.fas.usda.gov/.../Oilseeds%20and%20Products%20Annual_Islamabad_Pakistan_4-4-2011.pdf
3). Edible Oil Report (2010), Official website http://www.edibleoilreport.com; Accessed on April 13, 2011.
4). http://www.olives101.com/2007/11/02/pakistani-government-to-develop-olive-oil-production/; Accessed on March
20, 2011.
5). http://www.buzzle.com/articles/increasing-olive-oil-consumption.html; Accessed on April 12, 2011.
6). http://www.commodityonline.com/news/Pakistan-edible-oil-imports-may-touch-216-Mn-tons-USDA-38300-31.html; Accessed on April 19, 2011.
7). http://www.tradingeconomics.com/pakistan/inflation-cpi; Accessed on April 23, 2011.
8). Moon emporium store, local retail store; Visited April 22,2011