CAMIS Final

7/31/2019 CAMIS Final

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India-Europe International Business School

BUSINESS PLAN

ON

CAMIS PRIVATE LIMITED

By

Nitesh Gupta

Roll. No. 20100808

MBA | Finance

Submitted to

MR. ANUP AWASTHI

PROFESSOR

ENTREPRENEURSHIP & SMALL BUSINESS MANAGEMENT


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C A M I S P R I V A T E L I M I T E D Page 2

BUSINESS PLAN 2012

CAMIS PRIVATE LIMITED

Contents

Contents ........................................................................................................................................................ 2

TIMELINE ....................................................................................................................................................... 3

PROJECT GANTT CHART ................................................................................................................................ 4

EXECUTIVE SUMMARY .................................................................................................................................. 5

VISION ........................................................................................................................................................... 6

MISSION ........................................................................................................................................................ 6

INDUSTRY ANALYSIS ...................................................................................................................................... 7

BUSINESS IDEA ............................................................................................................................................ 21

SALES REVENUE STRUCTURE ...................................................................................................................... 22

HUMAN RESOURCE PLANNING ................................................................................................................... 23

SALARY STRUCTURE: ................................................................................................................................... 24

ORGANIZATION STRUCTURE ....................................................................................................................... 24

BUSINESS STRATEGY ................................................................................................................................... 25

MARKETING PLAN ....................................................................................................................................... 28

KEY MARKETS & SEGMENTATION ........................................................................................................... 28

MARKETING OBJECTIVES FOR THE FIRST YEAR ....................................................................................... 28

OBJECTIVE, STRATEGY & ACTION PLAN .................................................................................................. 29

SALES PLAN ............................................................................................................................................. 32

AGRO PROCESSING RELIEF MEASURES: ...................................................................................................... 34

FINANCIALS ................................................................................................................................................. 35

PROFIT & LOSS ACCOUNT ........................................................................................................................... 35

BALANCE SHEET .......................................................................................................................................... 37CASH FLOW ................................................................................................................................................. 38

REFERENCES ................................................................................................................................................ 39


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BUSINESS PLAN 2012

TIMELINE

Project Timeline Business Plan Schedule

Week Task Deliverables

Week 1 Brainstorming on thebusiness idea, Preparing theoutline structure &discussion with theconcerned faculty about thebusiness plan

Finalising the Businessplan idea

Week 2-4 Industry analysis andbrainstorming about a foodprocessing company

Executive Summary, Vision,Mission, type of Company& Business Idea

Week 5-6 Making the requiredresearch about the differentaspects of a food processingcompany

Marketing Plan, Basic CostStructure & Revenuestructure.

Week 7 Buffer Week

Week 9 Estimating the financials forthe firm and projections for thefuture

Financial statements for thenext three years

Week 8 Compilation of the data ,Discussions on the datacollected, Final Report andConclusion

Final report with Completeinformation


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BUSINESS PLAN 2012

PROJECT GANTT CHART

Week

1

Week 2 Week 3 Week 4 Week

5

Week

6

Week

7

Week

8

FinalisingtheBusinessplan ideaExecutiveSummary,Vision,Mission, typeof Company

& BusinessIdea

MarketingPlan, BasicCost Structure& Revenuestructure.

Financialstatements forthe next threeyears

Compilationof the report

FinalReportPreparation


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BUSINESS PLAN 2012

EXECUTIVE SUMMARY

CAMIS is one of the pioneers in the processing of agricultural products, is currently within its

first year of operation. As of 2012 the firm stands as the only company to offer such services.

Since we are operating globally CAMIS faces economic forces like the fluctuating wealth of our

clients as well as outside forces. Besides economic and competitive forces, CAMIS is also subject

to legal and regulatory forces. We are a private limited company registered with the Indian

Companies act 1956.. Our firm follows all laws regarding our business and hiring of employees.

CAMIS target all the people who have the need of processed and good quality agricultural

products. In the future, as per the financial stability of the company we will also providetransportation facilities to our clients.

The SWOT analysis identifies the Strength, Weaknesses, Opportunities and Threats associated

with CAMIS. These traits are compared against many economic, environmental, and social

factors that could potentially affect the success of our company. The analysis also considers our

competition and their potential direct impact on CAMIS. We heavily assess CAMIS operations

and how our strengths and weaknesses relate to our operations.

The Business Resources section of the plan specializes in explaining the financial and human

resources available to the firm as well as the experience and expertise already accessible. Our

financial resources, enumerated in this report primarily for short term concerns within three to

five years, will come from cash on hand and potentially from discounting of bills. Human

resources are split into skilled and unskilled divisions. Most of the funds used for training will be

spent on the skilled divisions of management, where it is most needed. Each of our top three

executives is extremely experienced and well regarded in the industry and play a key part in the

success of our firm.

The Business Strategy consists of a list of specific objectives followed by detailed plans of how

to achieve these objectives. CAMIS have four main objectives:

Cover a large market share within 3 years. Increase net income by at least 15% each year Expand our brand name and become recognized

To achieve these objectives, our strategy consists of:


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BUSINESS PLAN 2012

Seasonal products: Medium price, Medium volume strategy, Medium Quality Regular Products: Low price, High volume strategy, High quality High awarenessDetailed financial projections are illustrated in graph form in the Financial Projections and

Budgets section of the business plan. Graphs measure the competitive advantage CAMIS has

against the industry. In addition, we have also projected expected values for our income

statement for 2013 & 2014.

Controls and Evaluation show in detail how the outcome of our plan will be monitored and

measured. We set performance standards and financial controls as goals that our company

aspires to attain in the upcoming years. We also set a scale to monitor our procedures as well

as a set standard to measure our results. Last, we talk about performance analysis and

compared our company data to all other companies in the food processing industry.

CAMIS

We deliver quality

VISION

To produce a product that will maximize our customers satisfaction by

giving them the possibility to create a better standard of living. A living

backed with good quality processed agricultural products for the whole

family

MISSION

By 2015 we will be one of the leading companies in the food processing

industry for providing good quality processed agricultural products, also our

brand will be among the valued brands in the country.


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BUSINESS PLAN 2012

INDUSTRY ANALYSIS

Basic structure of the FOOD PROCESSING INDUSTRY

The chart above describes the process i.e. the Entire Value Chain for a Private Entrepreneur from Demand

Estimation to Consumption. Government i.e. Central as well as State government along with its agencies

supports the farmer and processing units to encourage this sector. The Stages involved in the value chain

are:

1. Market: In this stage, the Entrepreneur estimates the demand for crops and decides which

crop to sow

2. Input: After deciding on specific crops, the entrepreneur ploughs the crop with the use offertilizers, pesticides, nutrients and water to realize a good crop.

3. Pre Harvest: After a good crop has developed, Pre Harvest involves maintaining the crop till

harvest with the use of Latest technology and Fertilizers.

4. Harvesting: It involves the process of separating a full grown crop for processing, packaging,

transportation and finally for consumption.


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BUSINESS PLAN 2012

5. Post Harvesting: After Harvesting, the crop goes through a chain of processes to filter the crop

on the basis of Quality and many other parameters. The crops thus chosen are packaged

accordingly for safe transportation to the market. In case of perishable products it also requires to

be processed for their preservation.

6. Transportation: It involves the physical movement of the crop and processed food from the

farm to the actual Market.

7. Marketing: Marketing involves providing sales platform for the food products. Sometimes it is

done by the producer himself. Government creates a market through setting up APMC Depots,

online websites and also through trade exhibitions.

8. Market: Finally, the Chain gets completed when the crop reaches the market for consumption

and the farmers as well as the processing units get the money out of it.

COUNTRY-WISE LEVEL OF PROCESSING

Country wise level of processing

While India has an abundant supply of food, the food processing industry is still nascent:

Despite these low volumes, the processed food industry is one of the largest industries in the

country - it is ranked fifth in terms of production, consumption, export and expected growth.

Processed food industry accounts for 13 per cent of the countrys exports and 6 per cent of total

industrial investment. The food industry size is estimated at Rs.9100 billion and the food

processing industry at Rs.350 billion. According to official data, India exported about 17.5

million tone of agri and processed foods worth Rs 31,870 Crore ($ 6639.58mn.) in FY08 against

10.9 million tone valued at Rs 21,805.9 Crore ($4361.2mn.) the previous year which shows

growth of more than 45% in terms of value.


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BUSINESS PLAN 2012

CHALLENGES IN FOOD PROCESSING INDUSTRY

Unprocessed foods are susceptible to spoilage by biochemical processes, microbial attack andinfestation. The right post harvest practices such as good processing techniques, and properpackaging, transportation and storage (of even processed foods) can play a significant role inreducing spoilage and extending shelf life. The challenges in processing lie in retaining thenutritional value, flavor, aroma, and texture of foods, and presenting them in near natural formwith added conveniences. Besides, processed foods need to be offered to the consumer inhygienic and attractive packaging, and at low incremental costs. The challenges for thepreservation, distribution and processing sectors are diverse and demanding, and need to beaddressed on several fronts to derive maximum market benefits. Presently, the organizationsaddressing the educational and R & D requirements are too few, and there is a pressing need forsupplementing their efforts. In the emerging scenario, the Food Engineering professional needsto develop sufficient awareness and appreciation of the relevant principles of life sciences,and physical sciences, as well as of a wide variety of other topics including: nutrition,preservation and storage techniques, processing unit operations, bio-processing, wastemanagement, distribution and supply chain management, food laws and regulations and so on.Besides, the professional needs to develop an appreciation of R&D and innovation in criticaltechnology areas such as: newer or novel process development in preservation and storagetechniques, rheology, colloids and dispersal systems, packaging-polymers and composites,sensors for detection and process control, bioprocess engineering etc.

OPPORTUNITIES IN FOOD PROCESSING INDUSTRY

Diverse agro-climatic conditions lead to a wide-ranging and large raw material base suitablefor food processing industries in India. Currently a very small percentage (less than 2%)of these is processed into value added products, leaves opportunity to explore in the sector. Oneof the biggest emerging markets, with more than 1 billion population and 250 million strongmiddle class sets a large consumer base within the country. India is the seventh largest country,with extensive administrative structure and independent judiciary, a sound financial &infrastructural network. Stable and flourishing democracy is also an opportunistic attribute ofthe country.

Increasing literacy, rapid urbanization and rising per capita income resulting in rapid growth andchanges in demand patterns. This is creating great opportunities for exploring the largehidden markets. An average Indian spends about 40% of household expenditure on food items.Demand for processed /convenience food is constantly increasing. Cheaper workforce availabilitycan be effectively utilized to setup large low cost production bases for domestic and exportmarkets. Liberalized policies with specific incentives for high priority food processing sectorprovide very favourable environment for investments and exports in the sector.


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BUSINESS PLAN 2012

India is the leading producer of milk in the world, and produced about108 MT in 2007_ 37% of the produced milk is processed and 676 diary plants are registeredwith the government The major growing segment include- branded butter, cheese and icecream and the total market is valued at INR 20.3 bn (USD 442 mn) andexpected to grow at an average rate of ~13% Ultra Heated Treatment and flavored milk are other high growth market

Dairy

products

Growth

Rate 15%

Globally, India is second and third largest producer of vegetables (100MT) and fruits (50 MT) respectively_ India accounts for 8.4% of the worlds F&V production Less than 2% of total vegetables produced are processed commercially inIndia Share of organized sector in fruits processing is 48% and ~20% of

processed F&V are exported_ Mango and its other products alone constitute 50% of the total F&Vexports market.

Fruits &

VegetablesGrowth

Rate 20%

India has the largest livestock population (470 mn) globally About 5 mn tonnes of meat is produced per year in India Per head consumption of fresh and processed meat is as low as 1.5 kg in

India against world average of 35.5 kg Majority of animals in India are not bred for meat, the processingpercentage for meat is as follows:

-Buffaloes (11%), Cattle (6%), Sheep (33%), Goat (38%) The annual poultry production in India is 450 mn broilers and 33 bn eggs

growing at 20% and 16%

Meat &

PoultryGrowth

Rate 10%


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BUSINESS PLAN 2012

Packaged foods beverages and staples are restricted to urban areas characterized by highvolumes and low margins

India ranks third in fish production in the world Frozen shrimp contributes to 34.62% of exports in terms of volume and63.5% in value India has about 369 freezing units with daily processing capacity of

10,226 tonnes and 499 frozen storage units with a capacity of 134,767tonnes

Fisheries GrowthRate 20%

India has around 60,000 bakeries; 20,000 traditional food units The growing segments in packaged foods include_ Soups market is at a nascent stage and is valued at INR 644 mn (USD 14mn)_ Confectionaries market pegged at INR 22.3 bn (USD 484.3 mn) growingat 5.7%_ Biscuit market is estimated to be INR 17.2 bn (USD 373.4 mn) and isgrowing at 7.5%

_ Culinary products; tomato ketchups and jams at 18-20% annually

Packaged

foodsGrowth

Rate

India is the largest tea producer in the world accounting for 28% ofglobal production and 5th largest coffee producer accounting for 4% oftotal production in the world There are 100 plants across India under aerated soft drinks segment Exports in soft drinks are valued at INR 7.2 bn (USD 156 mn) perannum

Beverages GrowthRate 27%

India is the second largest wheat producer globally with an output of 70

MT valued atINR 9 bn (USD 195 mn)

There are 10,000 pulse mills with 14 MT milling capacity perannum

StaplesGrowth

Rate 85%


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BUSINESS PLAN 2012

KEY SUCCESS FACTORS AND RISK FACTORS IN THE FOOD PROCESSING INDUSTRY

SEGMENTS KEY SUCCESSFACTORS KEY RISKFACTORS

Fruits and

Vegetables

Ability to establish forward and

backward linkages through contract

farming, cold chains, and a strong

distribution network.

Use of modern technology in F&V

processing rather than manual methods

Using hybrid seeds to improve yields

Large number of innovative products

and branding.

About 35% of agricultural

produce is wasted due to poor

cold chain linkages during

storage and transportation.

International trade rules and

increasing protectionism in

export markets.

Poor performance of the

agricultural/primary sector.

Dairy Products

Ability to increasing scale of output

Wide product portfolio of high-value

products such as yoghurt, sweets

Ability to tap into export markets

Developing a portfolio of milk-based

products.

Low productivity in milk

animals despite the largest

bovine population (250

million)

Lack of scale in the industry

despite of success stories such

as AMUL.

Meat & Poultry Ensuring quality and sustained branding.Ability to tap into export growth in the

value-added segment.

Quality and hygiene is low in

street-side wet markets

imperfect slaughtering

High supply chain costs as

feed constitutes 60% of total

broiler costs

Relatively unregulated

slaughter facilities to the

extent of 50%. The country

has only 3,600 slaughter

houses, 9 modern abattoirs

and 171 meat processing

units, and a limited number of

pork-processing units

Primitive rearing techniques


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BUSINESS PLAN 2012

EMERGING BUSINESS MODELSBackward Integration

Everybody is well versed with the traditional methods of value chain in food processing.

Looking at the dominance of the sector towards the growth of economy it has been considered

priority sector amongst all. We can see the generic value chain of the food processing industrybelow.

Figure 16: Terminal Market

Contract Farming

Contract Farming is an agreement between the food processor (contractor), who is typically a

large organized player, and the farmer, whereby the farmer is contracted to plant the

contractors crop on his land. He also agrees to harvest and deliver to the contractor a quantum

of produce, based upon anticipated yield and contracted acreage at a pre-agreed price. The

food processor provides inputs in terms of technology and training to the farmer, to improve

the yield and quality of the produce.This results in a win-win situation that generates a steady source of income for the farmer and

eliminates supply shocks and assures good quality farm inputs which are crucial for the

processor. The Government of India has been actively encouraging contract farming

endeavors. The National Agricultural Policy envisages that private sector participation will be

encouraged through contract farming and land leasing arrangements to allow accelerated

technology transfer, capital inflow and assured market for crop production .

Terminal Markets

A Terminal market is a central site, often in a metropolitan area, that serves as an assembly and

trading place for agricultural commodities. Here there are different options for disposing off the

produce. It can either be sold to the end consumer, or to the processor, or packed for export, or

even stored for disposal at a future date. It thus offers different options to farmers under a

single roof. Typically, terminal markets operate on a hub and spoke model where the markets

form the hubs, and are linked to different collection centers (spokes) that are located close to

the production centers. The typical value chain structure for a terminal market, as well as the

key activities and corresponding infrastructure requirements at each level, are depicted in the

figure below:


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Figure

17: Terminal Market

The Government of India is looking to promote terminal markets, as a means of integrating

domestic produce with retail chains. There are plans to set up such markets in eight cities

across five states, at a cost of US$ 131 million. The cities being considered are Mumbai, Nasik,

Nagpur, Chandigarh, Rai, Patna, Bhopal and Kolkata.

Global Farming

The next step towards globalization comes from global farm lands. Food shortage and

reducing level of arable land is encouraging countries to approach other territory for farm land.

China government wants its agricultural firms to buy or lease farm lands in Africa or South

America to bolster food security in their country. China has 40% of farmers across the globe but

only 9% of agricultural land. More than 40% of arable land of Brazil is unused and china would

like to take up this land for soyabean production. Similarly Libya is negotiating with Ukraine for

growing wheat and Saudi Arabia is too looking for green pastures for their steady supply of food

& livestock supplies.

Food Parks

Food Parks are comprehensive industrial estates for food-processing units where the industries

would have the provision of common facilities like cold storage, cold chain, effluent treatment

plant, warehousing, power connection, water facilities, sewage etc.

The creation of these common infrastructures would benefit the individual units particularly the

small and medium scale units, because these are expensive to be set up by any single individualunit. Therefore a common park with all the infrastructures would help in the growth of this

industry.

The ministry of food processing industries has envisaged an initial investment of Rs 120 Crore

(Rs 1.2 billion) for setting up the common infrastructure in a park. It is of the view that by

providing a grant of Rs 1,500 Crore (Rs 15 billion) for 30 parks, Rs 50 Crore (Rs 500 million) for


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each, the private sector would be encouraged to invest up to Rs 9,000 Crore (Rs 90 billion) in

various parks across the country.

GROWTH DRIVERS FOR FOOD PROCESSING INDUSTRY

Changing Lifestyle

As far as the processed food market is concerned, Indian households are closely knit and the

percentage of nuclear families and working women is very low. Therefore, while the market

itself is one of the largest in the world, the penetration of packaged and branded products is

abysmally low. People prefer homemade or fresh products, which are cheaper than branded

products. However, over the last couple of years, private players have started taking enormous

interest in the sector, with many MNC's already testing the waters. Their efforts have beenaided by the fact that urban India is showing a marked shift towards ready-to-eat food:

With urban incomes increasing and urban consumers squeezed for time, they are slowly

demanding more of the products they consume. Also, the hygiene factor is facilitating growth.

With 200 million people expected to shift to processed and packaged food by 2010, this

presents an opportunity for makers of branded products like HLL, ITC, Nestle to convert

potential consumers into patrons on as big a scale as never before.

Large share of wallet:

Food forms the largest component of the total consumption expenditure in India accounting for

as much as 51%. This is highest compared to 9.7% for an average American person and 15% for

both Japanese and British. Though with rising income, the share would go down, but would

increase in absolute terms. Multi-national companies such as Coca- Cola, PepsiCo, Britannia,

Danone, Nestle, Cadbury, Heinz and Perfettiae have made their presence felt in India. Indian

majors like HUL, ITC, Dabur too have lined up investments in this segment.

Growth in Retail

Although organized retail is around 5 % of the total market, it is expected to be seen 35-40% in

next 10 years. The annual growth of the retail market in India is expected to be around 8 per

cent. Indian market has become the most lucrative market for retail investment in the world.

The great Indian consumer market is still going strong. Existing middle class with increasing

share of wallet, rapid urbanization, increase in the number of working women, large number ofworking young population, changing attitudes, tastes and lifestyle, globalization , indulgence

and convenience aspects are triggering the retail food industry which in turn will a great boost

to the food processing industry. This also attracts global retail giants like Wal-Mart, Tesco,

Carrefour SA, Metro AG etc. to enter the Indian markets. With increasing number of shelf space

more and more branded and processed food is finding its way in retail stores. Industry

estimates the total retail stock in India stands at 34.8 million sq ft. Another 62.6 million sq ft of


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mall space is either proposed or under various stages of construction in the next 2-3 years; only

35% of this supply is coming in Mumbai and Delhi.

It is expected that the share of the two cities to fall from the current 72% of the total stock to

49% by end of 2011. This will enable retailers to plan at increasing their penetration into the

Tier II and III markets, which have lower operating and rental costs, and are relatively untapped.

With a sizeable amount of supply in pipeline, the retailers and developers would shift the focusof Indian retail market from lifestyle goods to value retailing. FMCG and food retailing is likely

to be the least affected in this downturn and some activity is expected in this sector.

Food Retail:

Food retail has surpassed the dominating apparel and accessories sector. Contrary to the belief

that fashion is the largest segment of organized retail in India, food & beverages is the major

segment, worth Rs 8,97,000 crore. Growing at the rate of 30%, the Indian food retail is going to

be and no doubt is the major driving force for the retail industry. The percentage of income

spent in households will drive growth in the food market. Food accounts for the largest share of

consumer spending. Food and food products account for about 50% of the value of final private

consumption. This share is significantly higher compared to developed economies, where food

and food products account for about 20% of consumer spending.

Currently, the retail food sector is Rs.3500 billion and is expected to rise to Rs. 7500 billion by

2025. Food has the largest consumption in the Indian economy and will remain the single

largest category.

Government Initiatives

The government has taken steps to provide financial assistance for setting up and modernizing

food processing units, creation of infrastructure, and support for R&D and human resource

development in addition to other promotional measures to encourage the growth of the

processed food sector. The government has set a vision 2015, for the sector which includes: Promoting a dynamic food processing industry

Enhancing competitiveness in domestic and international market

Making sector attractive for both domestic and foreign market

Achieving integration of food processing infrastructure from farm to market It also has

following specific targets:

Level of processing of perishables from 6% to 20%

Value addition from 20% to 35%

Share in global food trade from 1.5% to 3% by 2015 In order to achieve the vision, the

government has taken following steps:

Priority area: The Government of India has identified the food processing sector as a highpriority area and has given a number of fiscal relief and incentives to encourage

commercialization and value addition to agricultural produce.

FDI: Automatic investment approval up to 100% foreign equity has been allowed for larger part

of the food-processing sector except for malted food, alcoholic beverages and those reserved

for small-scale industries (SSI). 24% foreign equity has been permitted in small-scale sector.

Foreign investments are allowed in SSI reserved items under an export obligation in selected

items.


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BUSINESS PLAN 2012

Licenses: The Indian government has abolished licensing for almost all food and agro-

processing industries except for some items like alcohol, cane sugar, hydrogenated animal fats

and oils and items reserved for the exclusive manufacture in the small scale industry (SSI)

sector. This has resulted in a boom in the FMCG market through market expansion and greater

product opportunities.

Taxes: To further aid the segment, the government has announced a liberal corporate tax policyfor export and domestic earnings. Income tax rebate has been allowed (100% of profits for five

years and 25% of profits for the next five years) for setting up of new agro-processing industries

to process and package fruits and vegetables (F&V). Export earnings are exempted from

corporate tax. Various states governments like Himachal Pradesh, Uttaranchal and Jammu &

Kashmir have encouraged companies to set up manufacturing facilities in their regions through

a package of fiscal incentives. The move towards uniform VAT has also been considered.

Excise and custom duties: Quantity restrictions on all food products have been removed. Peak

rate of customs duty has been reduced from 30% to 25% (excluding agricultural and dairy

products) and duty structure on designated items has been rationalized. The import of food

processing machinery is allowed freely with low levels of duties. Import of capital goods for

exports of agricultural products and their value added variants under the Export Promotion

Capital Goods (EPCG) is allowed duty-free and Foreign Technology Agreement within norms has

been made automatic. This opens up huge opportunities for large investments in food and food

processing industries in different fields including up gradation of technologies, improvement of

skills with installation of modern machinery and equipment, especially in areas of canning, dairy

plants, specialty processing.

Food laws: Consumer protection against adulterated food has been brought to the fore by the

Prevention of Food Adulteration Act (PFA), 1954, which applies to domestic and imported food

commodities and encompasses food colour and preservatives, pesticide residues, packaging,

labeling and regulation of sales.Food parks: In a bid to boost the food sector, the Government is planning to set up agri zones

and mega food parks. 30 such mega parks are coming up across the country in various cities to

attract Foreign Direct Investment (FDI) in the food processing sector. Each food park will have a

cold storage facility, apart from facilities for sorting, grading, food processing, packaging and

quality control and R&D laboratories, among other things. The government has already

identified five locations in Maharashtra, Andhra Pradesh, Punjab and Jharkhand and one in the

North- East region. It is also planning to set up 30 food parks across the country.

MAJOR INVESTMENTS IN FOOD PROCESSING INDUSTRY

Private investment has been one of the key drivers for growth of the Indian food industry. As

we know food processing industry has been allowed 100 % FDI it has shown substantial growth

which can be observed in the chart:

Industry estimates the total amount of investments in the food processing sector in the pipeline

for the next three years is about Rs. 1,150 billion. The government has received around 40

expressions of interest (EoI) for the setting up of 10 mega food parks (MFPs) with an


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BUSINESS PLAN 2012

investment of US$ 514.37 million. In August 2008, the first chocolate academy in India was

opened by Swiss confectioner Barry Callebaut, making its fifth foray into the Asia market. South

Korean confectionery giant, Lotte Group, also has plans to set up a subsidiary in India. Belgian

brewing giant, InBev, has announced increased expansion in India, with a focus on the beer

market. Through its recent acquisition of US brewing giant Anheuser-Busch (A-B), the company

now also owns A-B's Indian subsidiary, Crown Beers India. Italian confectionery company,Ferrero SpA, has announced plans to invest US$ 35 million for setting up a mint manufacturing

plant in Maharashtra. Conglomerate Reliance Industries Ltd has invested US$ 1.25 billion in a

dairy project. In August 2008, Reliance Industries was reported to be mulling a partnership with

UK-based supply chain solutions provider, Wincanton, for its efforts focused on Indias mass

grocery retail (MGR) sector.

Dairy major and ice cream specialist, Amul Dairy, has announced plans to enter India's US$ 500

million snack food market. Texas Chicken, the chicken fast-food brand of the US-based Church's

Chicken, has already opened its first outlet in Hyderabad and plans to open at least 300 outlets

in India over the next 10 years. The world's third largest pizza chain, Papa John's, plans to open

100 outlets in different parts of the country with an investment of US$ 51 million. Fast-food

chain McDonalds is pumping in US$ 83.4 million on increasing its footprint in India. ITC is

planning to set up a world-class processing infrastructure in Rajasthan for an integrated

'cleaning-cum-sorting' facility for spices like cumin, coriander and pepper. Moreover, ITC is also

planning investments to automate the different operations in its supply chain. It is planning to

set up a pepper garbling and steam-washing facility in Kerala, apart from a 'blended spices'

facility over the next two years. Sapat International, a Mumbai-based tea company, is

reportedly in talks with EPIC, a private equity firm in the UK, for the acquisition of its stake in

Whittard, an upmarket tea and coffee retailer in the UK. France-based Belvedere Group, which

is the worlds second-largest vodka producer, is planning to enter India via the travel retail

channel.


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EMERGING TRENDS IN THE FOOD PROCESSING SECTOR

Emerging trends in the food processing sector

The food processing sector is highly fragmented industry, it widely comprises of the followingsub-segments: fruits and vegetables, milk and milk products, beer and alcoholic beverages,

meat and poultry, marine products, grain processing, packaged or convenience food and

packaged drinks. A huge number of entrepreneurs in this industry are small in terms of their

production and operations, and are largely concentrated in the unorganized segment. This

segment accounts for more than 70% of the output in terms of volume and 50% in terms of

value. Though the organized sector seems comparatively small, it is growing at a much faster

pace.


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BUSINESS PLAN 2012

Figure 19: Food processing share in manufacturing

SWOT ANALYSIS OF FOOD PROCESSING INDUSTRY

Strengths Abundant availability of raw material Priority sector status for agro-processing given by the central Government Vast network of manufacturing facilities all over the country Vast domestic market

Weaknesses

Low availability of adequate infrastructural facilities Lack of adequate quality control and testing methods as per international standards Inefficient supply chain due to a large number of intermediaries High requirement of working capital. Inadequately developed linkages between R&D labs and industry. Seasonality of raw material

Opportunities

Large crop and material base offering a vast potential for agro processing activities Setting of SEZ/AEZ and food parks for providing added incentive to develop greenfield

projects

Rising income levels and changing consumption patterns Favorable demographic profile and changing lifestyles Integration of development in contemporary technologies such as electronics, material

science, bio-technology etc. offer vast scope for rapid improvement and progress

Opening of global marketsThreats

Affordability and cultural preferences of fresh food High inventory carrying cost High taxation High packaging cost


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BUSINESS PLAN 2012

BUSINESS IDEA

CAMIS will create the following physical infrastructure to facilitate the farmers to semiprocess their products, these activities will be grading, sorting and storage.

Infrastructure facilities consist of:

Processing and grading facilities for farm produce Warehousing for fresh farm produce and semi processed farm products Cold storage for fresh farm produce Highly technologically equipped ecommerce system that enables the farmers to

connect to the market place

CAMIS scope of work is to carry out the back end work like sorting, grading,storing etc. but not selling the products directly


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BUSINESS PLAN 2012

SALES REVENUE STRUCTURE

REVENUE MODEL

Rent for storage from the farmers and the clients Processing fees (as per the rates fixed) Commission from other activities such as transportation, loading & unloading, Loan

assistance, irrigation facilities, etc.

Membership fees from the farmers for maintaining their database.

Farmers

CAMIS would source information about agricultural products and post them on itswebsite.

The company would also provide storage facility and would charge them accordingly

Sorting

Grading the farm produce at the time of delivery

Sending the materials to be processed further

Storage

Storing products in their respective sections

Processing

Assessing the orders from the clients and processing the produce

Dispatching the materials to the clients and distributors

Packaging

Packaging the Vegetable and other produce to increase their life and maintain quality

To Clients(Wholesellers,

Retailers &Processors

Continuous communication for feedback and improvements

Special teams to suggest improvements to the client


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BUSINESS PLAN 2012

HUMAN RESOURCE PLANNING

Recruiters

Temporary contracted employees

Outsourcing

At first, our company will have enough individuals to launch the business. However it will

become imperative over time to increase our employment force to accommodate the needs of

the growing organization. CAMIS can look towards recruiters who will be able to provide us

with talented and experienced employees. It is also possible to hire temporary contracted

employees on a need-based basis. Eventually, when CAMIS has grown and become more

financially powerful, we may be able to outsource our technical & account handling jobs

overseas to places like China or US. We look to keep costs as low as possible and receive a

higher return.

The intake of raw material is a relatively semi-skilled process, so therefore it will not be

necessary to heavily train our employees, thereby keeping costs low. In the management

positions, however, where expertise is the key to the success of the business, we will not

hesitate to fully train our staff to most effectively manage the organization. This training will be

funded by the excess cash we plan to keep on hand in case of an emergency. Fortunately, our

core top management team will be comprised of three of the most successful, respected

individuals in the industry. Our CFO, will control financial projections and works closely withother top management to develop and maintain a long term strategy for the organization. The

CEO is the general overseer of the company who will delegate tasks as necessary. The CEO will

also constantly analyze the firms situation in the industry plus the firms past experiences in

order to attain a full perspective of where our firm stands. She/he is also a key player in the

firms business strategy development and sets objectives crucial to success. With years of

combined experience between our three top executives, we are confident that our company is

inevitably bound for success.

CAMIS would recruit mostly the female employees from the rural areas from which it sources

the agricultural produce. In order to the provide education about the right crop and create astrategic vendorship with the farmers for long term supply of the produce. Also a total number

of food quality experts will be employed to ensure the quality of the produce and to do the

grading process.


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BUSINESS PLAN 2012

SALARY STRUCTURE:

ORGANIZATION STRUCTURE

Position Number Salary per head Yearly

CEO 1 90000 1,080,000

CFO 1 75000 900,000

Manager 20 34000 8,160,000

Quality Experts 100 22000 26,400,000

Salesman 30 15000 5,400,000

Junior level employees 100 8000 9,600,000

Labour 400 5000 24,000,000

Administration 60 6000 4,320,000

Peon & Watchmen 30 4000 1,440,000

Total 742 81,300,000

CEO

QUALITY EXPERTS

ADMINISTRATION

SALESMAN

PEON &WATCHMAN

JUNIOR LEVELEMPLOYEES

LABOUR

CFO

MANAGER


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BUSINESS PLAN 2012

BUSINESS STRATEGY

The Business Strategy consists of a list of specific objectives followed by detailed plans of how

to achieve these objectives. CAMIS have four main objectives:

Cover a large market share within 3 years.

Increase net income by at least 15% each year

Expand our brand name and become recognized

Our first objective is to increase market share. The market currently calls a large amount of

processed foods which are ready to be used for further production, so catering to a large chunk

of needs would fetch us a high market share. Attaining 100% of the market share would be our

first goal for the first year. By the second year, we hope to have a proper system in place thatwould enable us to maintain at least 95% of the market share.

Our second objective is to increase our net income, otherwise known as profit after tax. Our

sales revenue for the first year will be Rs. 60 Lakhs Approx. and we hope to increase this

amount by at least (15%) in the first year. As years go on, we plan on our revenue increasing in

larger and larger increments. By our second year, we hope this value has increased by at least

Rs.10 Lakhs. Similarly, for our net income, we hope it will also continue to expand. Right now,

we stand at the initial stage and have a negative cash flow.. By the third year, this amount

should rise to approximately Rs. 15 lakhs. By the fifth year, the net income should be 20 lakhs.

By the eighth year, we should be bringing in a whopping 40 lakhs.Our last objective is for our company to successfully establish a brand name. To do so,

we will be distributing much of our funds to advertising and public relations, as needed. More

money will also be spent on brand recognition as well as quality so that our services or value

additions are known as best in the industry.

Key Strategy for Using Capabilities and Resources

1. Seasonal Produce: medium price, medium volume strategy

2. Regular produce: low price, high volume strategy

3. High Awareness

a. High Advertising

b. Medium-Low Public Relations

c. Medium Brand Name Awareness

d. Medium Quality


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BUSINESS PLAN 2012

Based on our goals and objectives, CAMIS plans on using a medium volume, medium

price strategy for the seasonal produce. This strategy entails raising price 1%-15% every year for

the seasonal produce until the launch of a new items being produced. Currently, our value

addition process costs approximately Rs. 11. For the first year, were taking a daring step and

raising it to 15 for 2012. Scenario Reports say that customers have medium sensitivity to price

changes in seasonal produce so a change of Rs. 4 should not decrease revenue by too much.With a higher price, people will need better reasons to continue using the service.

As a part of our new strategy to gain more and lose less, we plan to increase spending in

Magazine Advertising and Television by about Rs 100,000. Every year, we will increase the total

amount spent on advertising by small increments as our price increases. These increments will

range from Rs.10,000 to Rs.50,000. To counter our extreme increases in Advertising, we will

decrease the amount of money we invest in Public Relations since the Scenario Reports tell us

that Seasonal produce requires High Advertising, but Low PR. Our production volume for the

first year will remain at 277,000 kgs. Production volume will change depending on the price set

for the product as well as customer reaction in previous year to varying changes in price,

advertising, capacity, quality, etc.

When we reach the regular market, we will adopt a lower price, higher volume strategy based

on the market for regular produce. Our reason for servicing the regular produce market is that

regular and seasonal produce requires many of the same resources. For example, both need

high Advertising and low Public Relations. Both also require more television and magazine

advertising as opposed to newspaper. It is also easier to focus on regular and seasonal markets

since the distribution of produce to the clients will be done using a common transportation

system. In order to have enough cash and capacity to introduce a new produce, we will most

likely cut back on the amount of spending and production volume of seasonal produce.

However, to counter the loss in profit due to fewer items processed, we will most likelyincrease the price of processing seasonal produce by small increments of 1% per year.

CAMIS will be providing a database of all the items on its website (www.camis.com). This

website will give all the information to the clients regarding the agricultural produce available

with CAMIS and the farmers associated with CAMIS. The data will be fed in by executives who

will be from the company for the first 3 months. These executives will be recruited mostly from

the semi urban areas and shift to a new rural area after every 3 months. Along with this he will

also train a person from the rural area to feed in the data after 3 months. It is evident that in 3

months a minimum 10th

passed rural person will be able to work on a user friendly system. This

will be a strategy of CAMIS in order to involve the rural people and make them a part of the

system.

For the first year of our food processing system, we also plan on processing a small to medium

amount of the items to test the market and see how well it is accepted. Advertising

expenditures will rise, but Public Relations spending will be kept low. If the launch of our new

process is successful, we will gradually increase capacity to process more of regular produce

and reach our goal of having a low price but high volume for the produce.
http://www.camis.com/http://www.camis.com/http://www.camis.com/http://www.camis.com/


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BUSINESS PLAN 2012

We will also use high advertising to increase service and brand awareness. This increase in

awareness can in turn help increase profit and revenue. Another tactic our firm plans to utilize

is a gradual increase in quality. Every year, we will allot money to increase the quality of our

produce, which also goes to help increase our brand name awareness, and thus our general

service awareness.

According to the information from our SWOT Analysis, it seems our strengths outweigh our

weaknesses. The dedication and talent of our team will pull through in the long run. Although

we may spend more time and money developing the product, our high quality earns us a better

name with the customers. We are trying to become a recognized company after all. In addition,

even if our team is met by time constraints, it is possible to still work together efficiently. The

team communicates frequently through the internet and via phone so that information is

transferred and work is done. Because of our devotion, this strength creates many new

opportunities for us in the future. It opens doors to innovation and creation and focuses us on

what is important.

Our weakness could also become a potential strength because working apart; we can get

separate jobs accomplished instead of working together on one problem for a long period of

time. We focus on efficiency and quality, which is why we believe our strategy will be the

strongest in the long run.

Our strategy hopes to take advantage of our opportunities which include advocating health

care, creating innovative and new services, and introducing new ways to improve quality. When

we advocate healthcare, more people will be motivated to use best of the best agricultural

products. The launch of our process of regular produce would be a new and innovative product

for the future which we hope will be successful. CAMIS also plan to introduce new technology

and hire technicians in order to increase the quality and safety of our process.

The ultimate goal of our business strategy is to capitalize on our strengths, convert our

weaknesses into strengths, exploit potential opportunities, and defer harmful threats. By doing

this CAMIS will become one of the strongest firms in the industry.

CAMIS will also be providing the following services:

Providing warehouse facilities for farmers as well as the clients Loans facilities for the farmers by tying up with banks Equipment assistance for the farmers Assistance for the development of Irrigation facilities Single window to all companies huge customer base SMS Alerts Weather, Market rates & Right grains Database of farmers in relation to crop


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BUSINESS PLAN 2012

MARKETING PLAN

KEY MARKETS & SEGMENTATIONAll the seven items will be marketed through the CAMIS website. Since we are not involved in sales but

in only supplying the agricultural produce to the clients CAMIS will make sure that it provides the best

service possible to its clients. CAMIS will develop a mechanism wherein the shortage of items for the

client to a minimum transportation level will automatically be delivered to the client.

The list of potential CAMIS clients are given below:

Retail Giants (Reliance fresh, Future group, etc) Hotels & Restaurants Food chains FMCG companies Export companies Wholesalers

MARKETING OBJECTIVES FOR THE FIRST YEAR

Create brand awareness about CAMIS and its items at the PAN India level, by offering betterservices and through advertising

Supply 500 tons approx. of agricultural produce to the clients which will include all the sevenitems and any extra items if included.


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BUSINESS PLAN 2012

OBJECTIVE, STRATEGY & ACTION PLAN

STRATEGY

1. Build the CAMIS brand using the 360 degree Integrated Marketing Approach:Distribution: Transportation of goods to the right client at the right time will be out prime focus

Trade Focus: During the initial stage a lot of discounts will be offered to the customer in order

to engage the client. Also branding will also be done through word of mouth.

Awareness: Since CAMIS is being targeting both the individual and the business buyers it will

indulge in the BTL, ATL & TTL activities.

Visibility: Hoardings, Banners and a lot of outdoor activities will also done to increase the

visibility

Create brand awareness about CAMIS and its items atthe PAN India level, by offering better services andthrough advertising

Supply 500 tons approx. of agricultural produce to theclients which will include all the seven items and anyextra items if included.

Objective

Build the CAMIS brand using the 360 degree IntegratedMarketing Approach

Target the major clients in the FP industry to deal inlarge volumes

Strategy

Create awareness and Communicate positioningthrough ATL,BTL and TTL activities

Stress more on the quality of the services and timelydelivery.

Offer incentive if needed but only for a short term

Actionplan


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BUSINESS PLAN 2012

Trial Incentives: Competitive introductory consumers prices without compromising with brand

image and positioning.

Sampling: Regular sampling activities at on demand selling will be directly delivered to

consumers is key.

Repurchase and Loyalty: Free gifts, building good consumer understanding and their

preferential taste for the CAMIS brand also discounts for getting additional customers on board.

For promotions and better visibility CAMIS will do the following things:

Distinctive logo: CAMIS will use it on all your marketing materials that will serve as a graphic

symbol of our brand. We will be creating an expensive logo because this is one of the most

important symbols of our business as a whole.

Company website: CAMIS will have its own website (www.camis.com) which will also promote

the brand. We will be directly linking it the major search engines such as Google, yahoo, etc.

This will attract our potential customers to our websites. Going online is a good strategy of

going digital which forms an important part of 360 degree marketing approach.

Public relations: Is the most cost-effective b-to-b marketing tool for reaching large audiences.

CAMIS will conduct press release activities on a large scale in order to create awareness about

the service offered.

Direct mail: CAMIS will be sending direct mails to the potential customers because standardenvelopes often get trashed, but simple postcards will typically get scanned by the recipient,

and "lumpy mail" (packages with some souvenir object in them) will usually get opened. One of

the best uses of direct mail is to generate interest among potential customers in visiting our

website, where visitors will be answering a simple question and the click on the answer will be

directly linked to the CAMIS website to know their interests.

LOCAL MARKETING APPROACH

Newspaper advertising: CAMIS will give newspaper ads which can be effective in building name

awareness and generating some inquiries from prospects. Since as the per the study giving one

ad will be worthless so CAMIS will issue a series of 4 to 12, which will build interest and desire

on the part of potential customers.

B-to-B networking - In India the Federation of Indian the Chamber of Commerce has a wide

variety of events year-round that will let us meet and talk with hundreds of people, some of


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BUSINESS PLAN 2012

whom are potential customers and some of whom may serve as referral sources. Also a mix of

professional organizations provides additional opportunities to get to know lots of people and

pass out plenty of business cards.

Radio and TV: CAMIS will advertise through radio and TV that will create awareness among the

local public. Majority of our advertising will be through the cable and DTH which will let usselect a cluster of channels that are more likely to be viewed by majority of people than some

others.

NATIONAL MARKETING APPROACH

For national marketing approach CAMIS will focus on the following two mediums:

Trade magazines Trade shows2. Target the major clients in the Food Processing industry to deal in large volumes:

CAMIS will mostly focus on the large players in the food processing industry such as the Future

Group, Walmart, Tesco, Aditya Birla Group, etc. In order to increase the trade and reduce the

gestation period we have to deal in large volumes. For this we have to be consistent with our

quality of the supply and the services offered. For this we will concentrate on the economies of

scale in order to obtain cost leadership also a differentiation strategy of distribution which we

strive to achieve with the help of a better distribution system.


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BUSINESS PLAN 2012

SALES PLAN

Items Tonnes Volume

(in kilos)

value

/kg

In Value Proces

sing

Grad

ing

Packa

ging

Tot

al

cost

Total

Proces

singcost/ki

lo

Total

revenue

Maize 66800

66,800,0

00

8

534,400,

000

10% 8% 10% 28

% 2.24 149,632,

000

Groundn

ut

66800

66,800,0

00

30

2,004,00

0,000

10% 8% 10% 28

% 8.40 561,120,

000

Seasame

Seed

66800

66,800,0

00

43

2,872,40

0,000

15% 11% 18% 44

% 18.92 1,263,85

6,000Jowar 66800

66,800,0

00

10

668,000,

000

10% 8% 10% 28

% 2.80 187,040,

000

Bajra 66800

66,800,0

00

12

801,600,

000

10% 8% 10% 28

% 3.36 224,448,

000

Soyabea

n seeds

80160

80,160,0

00

15

1,202,40

0,000

10% 8% 10% 28

% 4.20 336,672,

000

Millets 80160

80,160,0

00

10

801,600,

000

10% 8% 10% 28

% 2.80 224,448,

000

Total

Yearly

494320

494,320,

000

8,884,40

0,000

42.72

2,947,21

6,000

Monthly 41193.3

3333 41,193,3

33.33

Daily 1373.11

1111 1,373,11

1.11

Salesman will carry out marketing and merchandising functions as and when needed,they will also be responsible for gathering market intelligence on regular basis.

They will also be responsible for collection & will work on salary + incentive system.


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BUSINESS PLAN 2012

Salesman will be trained on brands related marketing issues, merchandising techniquesand will be equipped with POSM, trade leaflets and brochures.

Salesman will send their daily sales report to the marketing and sales responsible andwill report directly to him.

Sales managers will procure sales order from the customers, email the same to themarketing and sales responsible, who will further forward the delivery instructions to

the logistic company, obtain the delivery date and revert back to the sales manager,

who will intimate the customer about his goods receiving date.

STRATEGIES:

1. Exceed the quota. Send no less than 50 letters of introduction to new prospects each week.

Make no less than 50 cold calls of introduction to new prospects each week.

Make no less than 20 face-to-face contacts with new prospects each week.

Create no less than 10 proposals each week.

Make no less than five presentations each week.

2. Obtain referrals from all my new customers.Within 30 days of delivering the product, the salesman will ask each of new customers for at

least three names and phone numbers of someone they personally know who may have a use

for our products.

3. Sales lead generation using relationship marketingThe entire salesmans will develop longer-term relationships with customers rather than

individual transactions.

4. Sale lead generation using search engine optimization and Internet marketing strategiesSalesman will also make use of digital marketing tool to create sales lead generation program

that includes search engine optimization (SEO)/Internet marketing strategies that will attract

prospects at the beginning of their buying cycle.


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BUSINESS PLAN 2012

SALES FORCE

Profile of the Salesman:

Must be fluent in English and good in communication and flair for sales. Good working knowledge of MS office, university graduate with at least 4 years of sales

experience in agricultural products.

Sales Managers will be entitled to monthly and yearly sales incentives.Deliverables for Sales Manager:

Must meet the monthly individual product target as well as the total monthly group product

target and yearly target.

Deliverables for marketing and sales responsible:

Minimum business of 1 cr/month/salesman Training the sales managers Business Developments Preparing future growth strategies

AGRO PROCESSING RELIEF MEASURES:

As per the latest announcements from the Ministry of Food Processing in India full exemption

from excise duty is being extended to,

1. The preservation, storage, transports or processing of agricultural, horticultural, dairy,poultry, apiaries, aquatic and marine produce.

2. Conveyor belt systems for use in cold storage for the preservation, storage, transport orprocessing of agricultural, horticultural, dairy, poultry, apiary, aquatic and marine

produce and in mandis & warehouses for storage of food grains and sugar.

3. Also,Income tax relief:

Income Tax rebate is allowed, 100% of profits for 5 years and 25% of profits for the next5 years, for new industries to process, preserve and package fruits and vegetables.


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BUSINESS PLAN 2012

FINANCIALS

PROFIT & LOSS ACCOUNT

Sales Revenue

At an approximate CAMIS will be sourcing around 7 kinds of agricultural produce from the 400

farmers of 20 villages (200 farmers per village). All the agricultural produce will be processed,graded, and packed as per the specifications of the customer. The estimated figures are as

follows. For further details refer to the excel sheet.

Total produce of farmers yearly 494320 (Tonnes)

Average processing cost Rs. 6.10

Total estimated revenue yearly 2,947,216,000

Financials

Sales Revenue 98,24,05,333 3,38,92,98,400 3,89,76,93,160

Other Income 1,89,00,00,000 2,49,48,00,000 2,74,42,80,000

Excise Duty - - -

Net Sales 2,87,24,05,333 5,88,40,98,400 6,64,19,73,160

Power & Fuel Cost -2,59,96,069 -5,01,92,138 -32,62,48,894

Other Processing Expenses -2,35,77,728 -5,18,71,002 -5,70,58,102

Marketing -14,14,66,368 -15,56,13,005 -17,11,74,305

Admin -9,43,10,912 -10,37,42,003 -11,41,16,204

selling -9,43,10,912 -10,37,42,003 -11,41,16,204

Miscellaneous Expenses -2,35,77,728 -2,59,35,501 -2,85,29,051

Employee Cost -8,13,00,000 -8,94,30,000 -9,83,73,000

Total Cost -48,45,39,717 -58,05,25,651 -90,96,15,759

Operating Profit 49,78,65,617 2,80,87,72,749 2,98,80,77,401

PBDIT 2,38,78,65,617 5,30,35,72,749 5,73,23,57,401

Interest -1,25,19,33,964 -2,69,56,66,347 -

PBDT 1,13,59,31,653 2,60,79,06,402 5,73,23,57,401

Depreciation -13,57,20,000 -13,57,20,000 -13,57,20,000

Profit Before Tax 1,00,02,11,653 2,47,21,86,402 5,86,80,77,401

Tax - - -

Reported Net Profit 1,00,02,11,653 2,47,21,86,402 5,86,80,77,401

2012 20142013


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BUSINESS PLAN 2012

It will take around 6 months to get the setup ready and start production. Also a 2 month credit

is also allowed for the customers. Hence the the cash inflow starts from the month of

September.

Other Income

Since CAMIS will also be providing warehousing facilities to the farmers and the clients. It has

procured a land of 630000 sq.ft in the semi urban area costing of Rs.600/sq.ft. Assuming that

at any particular time the warehouse will be occupied to the tune of 40% of the capacity. CAMIS

will charge Rs. 750/sq.ft from its customers. The warehouse will take approximately 2 months

to be operational.

Power & Fuel Cost

Power & fuel cost is assumed at 10% of the total operating cost.

Other Processing Expenses

Processing expenses are assumed to be at 2% of the monthly sales revenue

Marketing

Marketing costs are assumed to be at 6% of the average yearly sales revenue

Admin

Admin costs are assumed to be at 4% of the monthly sales revenue

Selling

Selling costs are assumed to be at 4% of the monthly sales revenue

Miscellaneous Expenses

Miscellaneous expenses to be at 1% of the monthly sales revenue

Employee Cost

Employees are paid as fixed monthly salaries and laborers are given their fixed amount of

wages. (Calculations are given in the excel sheet)

Interest

Interest will be paid after 2 months when the cash inflow from the warehousing facility begins.


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BUSINESS PLAN 2012

Depreciation

Depreciation is charged at 10% of the total assets except land.

BALANCE SHEET

ASSETS

LAND:

Land will be purchased in the rural areas for the setup of the plant & machinery. 45 bigha land

will be acquired at the cost of 12 lakh per bigha.

WAREHOUSE:

A total of 14 bays will be setup of an area of 45000 sq.ft per bay. The total cost is estimated at

around Rs.37.80 crores and 10% as the development cost.

Sources of funds: Amount in Rs.

Bank Loan 1,18,22,65,186

Equity 50,66,85,080

TOTAL LIABILITIES 1,68,89,50,266

Application of funds:

Land 5,40,00,000

Plant & Development 1,29,60,00,000

Warehousing 12,60,00,000

Machinery

Processing 2,46,00,000

Grading 1,14,00,000

Packaging 1,65,00,000

Other Equipments 2,00,000

Office 6,00,00,000

Furniture & Fixtures 4,00,000

Cash at bank 9,58,56,255

Cash in hand 39,94,011

TOTAL ASSETS 1,68,89,50,266

Balance Sheet


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BUSINESS PLAN 2012

PLANT & DEVELOPMENT:

The cost of construction of the plant and its development per sq. ft is taken from the internet as

$40/sq.ft with clean room facilities. So the total cost of construction and development comes to

Rs.129 crore (approx.)

MACHINERY:

All the machines will be purchased from the respective vendors on cash basis. In total we will

be having 9 machines for the processing, grading and packaging services. The total cost of

machinery is estimated at around Rs.5.25 crores.

OFFICE & FURNITURE & FIXTURES

Office will be purchased at the cost of 6 crores in an urban area and furniture & fixtures worth

Rs. 4 lakhs.

LIABILITIES

Liabilities include the cost of all the assets and the working capital for the first two months and

10% of the working capital as contingency. The liability is divided into bank loan & equity at 70%

and 30% respectively. The loan will be taken from a bank @ of 16% per annum and the equity

will be sourced from 4 to 5 investors through private placements.

CASH FLOW

Amount in Rs.

2012 2013 2014

Net Profit Before Tax

1,000,211,653 2,472,186,402 5,868,077,401

Net Cash From Operating Activities

497,865,617 2,808,772,749 2,988,077,401

Net Cash (used in)/from (484,539,717) (580,525,651) (909,615,759)

Closing Cash & Cash Equivalents

13,325,900 2,228,247,098 2,078,461,641


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BUSINESS PLAN 2012

REFERENCES

The web references and reports would be useful in the course of the project

Websites: www.justdial.com,www.parinda.com,www.companiesinmumbai.com,

www.economywatch.com.

Websites of Ministry of India:

Ministry of food processing (mofpi.nic.in) & Ministry of construction (www.moch.gov.iq)

Reports:

KT & G Business plan Report on Indian food processing industry Report on financial draft
http://www.parinda.com/http://www.parinda.com/http://www.parinda.com/http://www.companiesinmumbai.com/http://www.companiesinmumbai.com/http://www.companiesinmumbai.com/http://www.economywatch.com/http://www.economywatch.com/http://www.moch.gov.iq/http://www.moch.gov.iq/http://www.moch.gov.iq/http://www.moch.gov.iq/http://www.economywatch.com/http://www.companiesinmumbai.com/http://www.parinda.com/

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