07-Sweet Bangladesh_final

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Strawberry Farming: A Fresh Effort to

Sweeten Our Economy

Sweet Bangladesh Ltd.

Teknapara, Salna, Gazipur

Telephone: 8810002

Website: www.sweetbd.com

The proposal envisage setting up a company named Sweet Bangladesh Ltd for

commercial production of Strawberry and manufacturing plant with modern

machineries at Salna, Gazipur. The strawberry products are being used as basic

materials of the essential food products like jam, jelly, ice-cream, biscuits and milk-

shakes. The growth of the strawberry depends on the financial and policy help given

by the government and the flawlessness of the saplings collected by us. The

machinery for the project has been proposed to be imported from Canada. The project

is expected to go into commercial operation within 18 (Eighteen) months from the

date of expected the L/C for importing capital Machinery. At first phase to acquire

infrastructure and development some capital expenditure has to be incurred and in

second phase cultivation expenses has to be incurred time to time to start our projects

cultivation process.

Financing

Our total invested money is TK.22,90,150. We will invest 40% of capital by ourselves

and rest of the 60% from the bank or from any financial institution as term loan. Each

of us will contribute equal amount of money. For carry on the business this debt will

cover the portion of the expenses which we cannot finance with our invested amount

of money. It might include office equipment, office rent, other necessary items etc.


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Summary of the Project

A. Name of Business: Sweet Bangladesh Limited.

B. Location of the Project:

The proposed project is to be located at Teknapara, Salna under Gazipur District. The

proposed site is nearer to Dhaka. It is a place where a good number of lands are

available for manufacturing purposes. The project site is enjoying facilities likeelectricity, water, skilled labor and good road and river communication.

C. Name and Address of Principals:

Entrepreneurs Address Telephone E-mail

Sumon Shahriar 303/E, East Kazipara,

Mirpur, Dhaka.01717386085 [email protected]

Khan Muhammad Faisol House-901, EastShewrapara, Dhaka

01716475147 [email protected]

Mahmudul Hassan20, Chamelibag,

Shantinagar, Dhaka01911188887 [email protected]

K.M.Saemon Islam

13/10, Shahid Anwar

Girls College Quarter,

Dhaka Cantonment.

01670782070Saemon135

@yahoo.co.uk

Faijullah Rashid Shimul292/2, Dania,

Jatrabari, Dhaka.01670978247 [email protected]

Mehreen Ahmed

C-2, Tower Bhaban,

Fuller Road, Dhaka

University Quarter.

01727457999mehreenahmed007

@yahoo.com

D. Nature of Business : Manufacturing Business

E. Project NPV : Tk.56,82,429 or, 50,07,900 or, 44,23,887.

F. Statement of financing need:


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There would be three sources of financing the project as below:

Source AmountEquity Capital (40%) 9,16,060Term loan (60%) 13,74,090Total 22,90,150

G. Statement of Confidentiality of Report:

This report is confidential and is the property of the co owners listed above. It is

intended only for use by the persons to whom it is transmitted, and any reproduction

or divulgence of any of its contents without the prior written consent of the company

is prohibited.

Executive Summary

Debt,60

Equity,40


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A Fresh Effort to Sweeten Our Economy- with this baseline, here emerges a

relatively newer idea in the economic sector of our country. Fundamentally, in a

developing country like ours, it is pretty much crucial that we keep focusing on the

newer business sectors just to enhance the credentials in every respect of the nature of

evolution of business. As we know, with time the matured business segments decline

in incongruent approaches as far as the product appeal is concerned and newer areas

become needed to be exploited. Just keeping in mind this concept, we established a

proposal of strawberry farming that is very much innovative of an idea with the

proven potentials.

As we approach the farming of strawberry, we focused on the plan entirely on

business point of view. In the initial segment of our plan, we analyzed the probable

opportunities in the overall economic sector of Bangladesh. As we stated before, we

found out, there is a great possibility around this sector awaiting exploration.

Then we turn our focus on the potential competitors, which means, how much

commercial rivalry we may face after the starting of this business. While keeping an

eye on our competitors, we analyze our targets from the level of individual consumers

to the institutional level.

While getting ahead with our plan of strawberry cultivation, we were challenged with

the fact that how much friendly will our climate and demographic aspects will be with

the prospect of this project. Keeping in mind this fact, we presented all arguments and

experiments in favor of this venture as well as the probable drawbacks.

Next we worked on our decisive concern that how much viable will be this plan as far

as the commercial notion is concerned. In that segment, we analyzed and presented

every bit of financial approach that we are needed to be concerned with. We evaluate

the sources of financing of this project, required cash flows, NPV, the break-even as

well as the profit margin. So, seemingly, in that segment of financial feasibility we

didnt leave any stone unturned.

With the financial analysis supporting our claims of this plan to be a success, we presented the details of the procedural methods of the cultivation of strawberry as


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well as the workforce needed for it. And essentially after that the marketing policy of

this plan, which we deemed as the key to success.

Providing the pros n cons of this project that we felt is still pretty much new with all

the potentials in the business viewpoint, we genuinely believe that this is the venture

that is up there with the very best for the next decade.

Industry Analysis

A. Future Outlook and Trends


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a) Overall Economy : A projects future growth and

development has some impacts on the countrys overall - 1)

trends in the GNP 2) Unemployment rate 3) Disposable

income. Our project strawberry farming seems to have a

positive force to those economic variables. Surely cultivating

strawberry in a poor economy like ours tends to increase

GNP& disposable income and reduce unemployment rate.

b) Culture : Before starting the project we carefully consider the

cultural components- 1) demographic shift 2) Shift in attitude

3) trend in safety, health, nutrition 3) concern for

environment. Now living in a global economy demographic

shift is an important factor to consider while measuring some

projects possibility and same as the case for ours. Strawberry

is not a product of great demand for Europe or America only

and thats where our projects expansion is considerably

possible. Our project strawberry farming as a agro-based

model for business has a environment-friendly set-up &

nutrition prospect, through this project our nations safety,

health, nutrition and our concern for environment is well-

assured.

c) Legal Concerns : Legal perspective of our project is in a

primal stage. Strawberry, a money-spinning nutritious and

delicious foreign fruit adapted in Bangladesh, may get

government registration soon for cultivation across the

country after experiments yielded encouraging results in

Rajshahi and Natore. Once registered, strawberry cultivation

will be expanded with government patronization according to

Mr. Braja Hari Das, deputy director of Rajshahi Directorate

of Agriculture Extension (DAE). With great export potential,

the sweet and attractive fruit will open a new horizon for farmers. Strawberry variety has been sent to National Seed


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Board and the process for registration is underway as said by

Dr Shafikul Islam, senior scientific officer of Rajshahi

regional Fruit Research Centre (FRC). If it is registered then

some of those issues need to check are: 1) trademark 2)

licensing 3) product safety & liability 4) insurance 5)

contracts 6) restrictions on media advertising.

B. Analysis of Competitors

Strawberry plantation as a concept of business is new in our country and thats why

meager competition will be found after commercializing our product at home. In

Abroad there are so many competitors and we have little chance to compete with them

because of their huge capital and friendly environment for strawberry production at

least in the very short run. It will be like small manufacturing companys competition

for capturing a smaller market.

C. Market Segmentation

Besides being taken as a fruit, it is used in preparing ice-cream, jam, jelly, pickle,

chocolate, biscuit, cake or milk shake. This wide variety of strawberry usages will

make our project attractive to local consumer and businesspersons who run mega-

shops for high-class and upper middle-class people. If this project is successful and

acquired expected growth then it can expand its market to other parts of the world.

Market segmentation of our project concentrated into the two main facets: one will be

the aristocratic market of Dhaka and other major cities of Bangladesh and the other

facet will be the countries who are the highest importer of strawberry from various

corners of the world.

a) Posh market: Dhaka, Chittagong, Rajshahi, Sylhet.

b) International market :Germany, UK, USA, France, Netherland,

Belgium, Canada, Italy


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D. Industry Forecasts

Strawberry farming has started gaining popularity everywhere in northern region for

the last couple of years as the fruit has tremendous economic prospect for the

grassroots farmers. Many farmers, including the amateur ones, have been showing

interest to cultivate strawberry and searching for its saplings during the current

plantation season that will continue till middle of this month. Experts said the

growers' level extension of strawberry cultivation as well as its higher value could

bring a new dimension to the country's agriculture. Referring to the bright prospects

of strawberry cultivation in Bangladesh except the coastal districts, the experts called

for an effective motivational campaign for commercial farming of the soft red-juicy

fruit.


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basis at his Modern Horticulture Center at Harishpur in Natore for last three years.

But both of them found the best results this year (2008) in hilly areas at Matiranga

Army Zone where 26 Cavalry Division produced quality strawberries from 200

saplings.

Strawberry cultivation is as easy as growing potatoes or brinjals. Saplings can be

sown in rows in November and December. The plant starts flowering within one

month of plantation and fruits can be collected till March. Saplings can be collected

from nurseries of Dr Manjur and Quamruzzaman in Natore. Each plant bears around

250 to 300 grams of fruits and some 6000 plants can be grown on one bigha of land.

The country has an annual demand for around 50 tonnes of strawberry, now imported

from Thailand and Australia at Tk 900-1200 per kg. Strawberry flavor is also

imported. Enthusiastic people are cultivating the fruit in 24 districts and they formed

Bangladesh Strawberry Association to train growers. The fruit is best for those who

want to get higher and faster returns from limited land, according to Manjur and

Quamruzzaman.

Figure: Two initiator of strawberry farming -Dr Manjur and Quamruzzaman

After exploring through the internet over this opportunity of a fresh entrepreneurial

effort- Commercial Cultivation of Strawberry we felt very motivated to take the

venture and for that purpose established a private limited company named Sweet

Bangladesh Ltd.

B. Venture Product


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Sweet Bangladesh Ltd. before launching its commercial cultivation wants to introduce

its product to all walks of people. This section provides information about the

prospect & the very nature of strawberry production. One of the best loved fruits in

many parts of the world is strawberry. Indeed, people from all walks of life truly

enjoy the venerable strawberry. In addition to being a delicious fruit, the strawberry

also is a fruit that can be easy to cultivate and grown. The sweet red berries are

irresistible to almost everyone. Very quick to produce their fruits, strawberry plants

are an excellent crop. These plants can be a wonderful addition to any gardening.

Strawberry plants are lush and have attractive blooms. In addition, when the plants are

laden with berries, they are lovely indeed. They are different from most fruits in that

their seeds are produced on the outside of the fruit - this combined with their bright

red color has the unfortunate side-effect of making them very attractive to birds.

Strawberry is a major fruit of temperate region, but with the advent of day-neutral

cultivars, it grows profitably well in the sub-tropical regions also. Plasticulture

techniques can play very important role in the manipulation of microclimate favorable

for its cultivation. Scientific findings have revealed that use of plasticulture

techniques in strawberry cultivation could revolutionize its commercial cultivation for

higher profitability in the many regions of Bangladesh.

Strawberry is a perennial, stoloniferous herb belongs to the family Rosaceae , genus

Fragaria and most widely consumed fruits throughout the world. It contains

relatively high quantities of ellagic acid, which has a wide range of biological activity.

It is produced in 71 countries worldwide on 506000 acres. Strawberries are now

getting popularity in Bangladesh. Karhu and Hakala 1 observed that micro propagated

strawberry plants were comparatively better in different characters (crown size,

number of runners, flowering time and yield of berries) than conventionally

propagated runner plants.


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C. Project Cost & Size

A four Bigha plantation of the crop is a viable proposition. Project costs of the model

are exhibited in a summary of the project cost in the table below:

Estimated Project Cost (four Bigha model strawberry plantations)

Serial No. Component Proposed Expenditure1. Cost of goods sold

(i) Cost of planting material 77,000(ii) Fertilizers & pesticides 8,900(iii) Mulching 11,000(iv) Cost of Labor 12,000

Sub Total 1,08,9002. Land & Site Development

(i) Land 16,00,000

(ii) Leveling & Dressing 80,0000(iii) Fencing & Gates 120,000

Sub Total 18,00,0003. Building

Pump House 29,000Labor Shed 14,500

Sub Total 43,5004. Plant & Machinery

(i) Submersible Pump 72,500(ii) Fertigation system 58,000

(iii) Farm Equipment Machinery 7,250Sub Total 1,37,7505. Furniture & Fixtures 2,00,000

Grand Total 22,90,150

D. Background of Entrepreneurs

There are altogether six entrepreneurs to take the venture of strawberry cultivation.We all are students of the business faculty of Dhaka University. We think we are

1. Karhu, S. and K. Hakala, 2002. Micropropagated strawberries on the field.

ISHS Acta Horticulture, 2: 182


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energetic, aggressive in decision-making, vibrant to all the opportunities around us,

knowledgeable at the field of business, able to work together and brave enough to

wait and work hard until we reach the peak. Without having much support from our

families it will not be possible to take the venture and we think our families will be

helpful towards us.

Production Plan


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The initiative was taken as cultivation of the fruit on

a small piece of land with a little investment can

help us earn handsome profit in any areas where

people mainly depend on agriculture but lack

cultivable land. Strawberry cultivation does not

need much land and takes time not more than two

and a half months. It is not a tough job, as a farmer only needs to process the soil a

little.

A. Agro-Climatic Requirements

Strawberry grows well under temperate climate. Some cultivars can be grown in

subtropical climate. Daylight period of 12 hours or less and moderate temperature are

important for flower-bud formation. Each cultivar has a different day length and

temperature requirement. Sandy loam to loamy soil with pH 5.7-6.5 is ideal for

cultivation.

B. Land Preparation

The soil is ploughed during summer with a soil turning plough which is followed by

repeated ploughing to make soil friable, remove weeds and stubbles. Soil fumigation

with a mixture of methyl bromide and chloropicrin helps to increase root system,

reduce fertilizer requirement and control the weeds.

C. Manufacturing Practices

Different strawberry production systems can be adapted to organic Strawberry production, including the matted row system, which is lightly mulched with straw in

the planting year to reduce weeds, and the plasticulture system. Weed control is a

challenge for both conventional and organic strawberry growers. Tools for weed

control include the Lely springtine, Buddingh finger weeder, and the Reigi weeder.

The Reigi is now available in 2 and 3 row models, and very popular. Hand weeding is

still needed in addition to the mechanical weed control provided by these implements.

A biologically active soil resulting from green manures and cover crops will havelarge reserves of nutrients to feed the crop. Nutrient reserves are built over the years


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and then maintained for the most part with composts. Natural sources of plant

nutrients can be used to supplement nutrient needs.Insect pests can sometimes be

controlled by crop rotation. For example, crop rotation is the only way to control

strawberry rootworm. However, crop rotation doesnt help with tarnished plant bug

control. Damage from this pest can be reduced by managing vegetation on land

around the field, dont mow anything while strawberries are in bloom. Row covers

and black plastic mulch (non photodegradable) are allowed in organic production.

Certain organically acceptable slug and mouse baits are available.

D. Production Technology & Procedure

i) Physical Plants

Strawberry is commercially propagated by runner plants. For large scale propagation

of virus free plants, tissue culture is widely used.

ii) Planting Season

The ideal time of planting runners or crowns in hilly areas is September-October. If

the planting is done too early, plants lack vigour and result

in low yield and quality of fruits. If planted very late,

runners develop in March and crops are light. Runners are

uprooted from nursery, made into bundles and planted in

the field. These can be kept in cold storage before

transplanting. The soil should be frequently irrigated to

reduce water stress in the leaf. Defoliation suppresses the

plant growth, delays fruiting and reduces yield & quality.

iii) Spacing

Planting distance varies according to variety & type of land. A spacing of 30 cm. x 60

cm. is usually followed. In the model scheme, a spacing of 30 cm. x 30 cm. with a

population of 5500 plants per Bigha has been considered which was commonly

observed in areas covered during a field study.

iv) Nutrition


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A fertilizer dose of 25-50 tonnes farmyard manure, 75-100 kg. N, 40-120 kg. P2O5,

40-80 kg. K2O/ha. may be applied according to soil type and variety planted.

v) Irrigation

Strawberry being a shallow-rooted plant requires more frequent but less amount of

water in each irrigation. Excessive irrigation results in growth of leaves and stolons at

the expense of fruits & flowers and also increases the incidence of Botrytis rot.

Irrigation is applied in furrows between the rows. Trickle and sprinkler irrigation

systems are becoming popular nowadays. In case of trickle irrigation, 30% water and

energy are saved.

vi) Training

Four different types of training systems viz. matted row, spaced row, hill and plastic

mulch are used to train the strawberry plants. Usually matted row system is more

popular than the other training systems.

vii) Intercultural Operations

The field is kept weed free during the first season by harrowing & ploughing,

applying herbicides or plastic sheet. Inter-cultural practices are continued till the straw

mulch is applied.

viii) Growth Regulators

Application of GA3 (50 ppm) sprayed four days after flowering and maleic hydrazide

(0.1-0.3%) sprayed after flowering increases the yield by 31-41%. Morphactin (@ 50

ppm) improves the fruit size.

ix) Harvesting and Yield

Strawberries are generally harvested when half to three fourths of skin develops color.

Depending on the weather conditions, picking is usually done on every second or

third day usually in the morning hours. Strawberries are harvested in small trays or

baskets. They should be kept in a shady place to avoid damage due to excessive heat

in the open field.

E. Machinery and Equipment


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Irrigation Infra-Structure

For effective working with drip irrigation system, it is

necessary to install a tube-well with diesel/electric pumpset

and submersible motor. This is post cost of tube-well for four

Bigha.

Drip Irrigation

This is average cost of one acre drip system for the crop inclusive of the cost of

fertigation equipment. The actual cost will vary depending on location, plant

population and plot geometry.

Implements & Equipment

For investment on improved manually/power operated essential implements and

equipment.

Building Infrastructure

A one acre orchard would require minimally a labour shed and a store-cum - pump

house and a labour shed.

F. Names of Suppliers of Raw Materials

Saplings can be collected from nurseries of Dr Manjur and Quamruzzaman in Natore.

At first the farmers have to buy the mother plants from the university at Tk 20 per

sapling and later they will be able to produce the saplings themselves. The teachers

already trained 129 persons from 24 districts on strawberry cultivation and sent

saplings to the districts for experimental farming.

Marketing Plan

Pricing


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Appropriate pricing is necessary to measure our projects profit in the short run and

the growth of our company in the long run. For measuring this sensitive factor we use

current market information and analysis of the researchers. In our project per plant

(unit) cost is (108,900/22,000) or 4.95 tk. Our first year sales price is 550 tk per kg

reasonably assumed from the range given 200 tk to 900 tk. As each plant produce 300

grams or 0.30 kg so income from each plant will be (0.30*550) or 165 tk which is

33.33 times higher than the cost of unit good sold (4.95 tk).

Distribution

Majority of the growers sell their produce either through trade agents at village levelor commission agents at the market. Our company Sweet Bangladesh Ltd will use

both the way of distribution in line with their accessibility, profitability and cost

effectively. It is expected that the established marketing network should be more

strengthened due to availability of our product at the appropriate time or seasons.

C. Promotion

Free Sample: We have decided to give free samples to the training centers, where

different agro based trainings are provided. Again, we will provide free samples to the

people in the near localities.

Posturing: We will try to promote our product by posturing near training centers and

selling centers.

Sales at Discount: We also have planned to sale our products at discount to the whole

sellers as a plan of the whole promotion planning.

D. Control

One of the major goals of our business is to capture the major share of strawberry

industry in Bangladesh. For this reason, we have set the required sales volume thatwill help us to achieve the goal. We will monitor timely and properly the actual sales


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and forecasted sales. We will also monitor the performance of our manpower

resource.

E. Product Forecasts

The country has an annual demand for around 50 tonnes of strawberry, now imported

from Thailand and Australia at Tk 900-1200 per kg. Strawberry flavor is also

imported. . Each plant bears around 250 to 300 grams of fruits and some 5500 plants

can be grown on one Bigha of land. With growing demand for strawberry around the

world make our product forecast predictable and the forecast is strawberry has a

bright prospect in local market and in the foreign market too.

F. Post Harvest Management

Grading: Fruits are graded on the basis of their weight, size and color.

Storage: Fruits can be stored in cold storage at 320C up to 10 days. For distant

marketing, strawberries should be pre-cooled at 40C within 2 hours of harvesting andkept at the same temperature. After pre-cooling, they are shipped in refrigerated vans.

Packing: Packing is done according to the grades for long distance markets. Fruits of

good quality are packed in perforated cardboard cartons with paper cuttings as

cushioning material. Fruits of lower grades are packed in baskets.

Transportation: Road transport by trucks/lorries is the most convenient mode of transport due to easy approach from our site to the posh market of Dhaka, Chittagong,

Sylhet, Rajshahi and other major cities.

Organizational Plan

A. Form of Ownership:


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Being a green-field Venture it is proposed initially to be set up a Private Limited

Company and registered with the Registrar of Joint stock Companies, Bangladesh

under Companies Act 18 of 1994. After an initial period of successful operation,

marketing, the company may be restructured into a public Limited Company with

issue of Public Shares in the Market.

B. Management of the Company:

The overall management of the company will be vested with Board of Director. The

Board will formulate Companys policies and will provide guideline for its day to day

business operation. The managing Director is to look after the business affairs and

other logistic support to the company. Highly qualified and experience General

Manager will be recruited to support the Managing director in all operational level of

activities. Besides, staffs at different levels will assist the managing Director.

C. Board of Directors:

D. Organogram:

The organization set-up of the project will be in usual and staff method. The company

will provide both administrative and technical support to the project for its

implementation, operation and smooth running.

The detailed organogram is shown below:

Organogram of Sweet Bangladesh Limited

Name Address PostSumon Shahriar 303/E, East Kazipara, Mirpur. M.DFaijullah Rashid Shimul 292/2, Dania, Jatrabari, Dhaka. Director

(Finance)K.M.Saemon Islam 13/10, Shahid Anwar Girls College

Quarter, Dhaka Cantonment.

Director

(Administration)


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E. Basic Management Structure:

Initially, it will act as a private Limited Company. So here the overall management of

the company will be vested with the Board of Directors. The managing Director will

manage the routine operations of the company. And the major Company vision

Programme and policy discussion will be taken through approval of the board. The

Managing Directors will be assisted by other directors.

For a smooth and professional operation of the company, we will appoint some active

Directors with a degree of professional education and managerial skill and experience

Managing Director

Director Finance & administration

Manager Production

Manager Finance

Supervisor Accounts officer

MarketingOfficer

MarketingOfficer

Marketing

Officer

Marketing

Officer

Manager administration

Manger Marketing

Chairman


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as salaried Functional Managers. To establish transparency and accountability we

maintain external and internal auditing system.

F. Number of Staffs:

A. Technical staff: No. of personsProduction manger 02Asst production manager 02Supervisor 02Fore man 02Qtc officer 02Skilled worker 15

Unskilled worker 50Total 75B. Administrative staff:

General manger 01Asst. Manager 02Purchase officer 02Sales & purchase officer 04Cashier 02

- Peon, guard, typist, sweeper etc 04Total 15

Grand total personnel 90

Assessment of risk

A. Plant Risks & Protection

Insect

White grubs, cutworms and hairy caterpillars attack the crop. Areas where

strawberries are to be planted should be free from white grubs and cutworms.


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Application of endosulfan (0.05%) or Malathion (0.05%) on appearance of

caterpillars has been found to be effective in most cases.

Diseases

Main diseases reported are leaf spot and grey mould. Application of carbendazim /

thiophanate methyl has been found to be effective in most cases.

Disorders

Albinism (lack of fruit colour during ripening) is a physiological disorder in

strawberry. It is probably caused by certain climatic conditions and extremes in

nutrition. Fruits remain irregularly pink or even totally white and sometimes swollen.

They have acid taste and become less firm. Albino fruits are often damaged during

harvesting and are susceptible to Botrytis infection and decay during storage.

B. Evaluation Weakness of Business

Strawberry cultivation is still in such a primary stage that anything could

happen to this industry.

Practically there may lack the true taste of strawberry because it is invented in

the laboratory. Though rabi-3 proved itself as a successful type of strawberry.

Environmental change harm substantially.

Financial Plan

A. Pro Forma Income Statement

Taka

Items Year 1 Year 2 Year 3Sales revenue 36,30,000 39,60,000 4,290,000


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Less: Cost of Goods sold

Cost of planting material

Fertilizers & Pesticides

Mulching

Cost of Labor

Total cost of goods sold

Gross profit

Operating expenses

Selling expenses

Advertising

Salaries, wages

Supplies

Rent

Utilities

Insurance

Term loan interest

Depreciation

Miscellaneous

Total operating expenses

Net profit

Ratio (Percentage):

Gross profit to sales%

77,000

8,900

11,000

12,000

1,08,900

35,21,100

1,45,200

79,860

1,81,500

19,965

65,340

14,520

7,260

29,040

28,193

46,222

6,17,100

29,04,000

97%

77,770

8,989

11,110

12,120

1,09,989

38,50,011

146,652

80,659

1,83,315

20,165

65,993

14,665

7,333

28,930

28,193

47,084

622,989

32,27,022

97.22%

78,548

9,079

11,221

12,241

1,11,089

41,78,911

1,48,118

81,466

1,85,148

20,367

66,653

14,812

7,406

29,023

28,193

47,751

6,28,307

35,50,604

97.41%Net profit to sales % 80% 81.49% 82.76%

B. Cash Flow Projections

Particulars Amount (Year-1)Receipt Sales 35,57,400

DisbursementsLand & site development 18,00,000


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Plant & machinery

Building

Furniture & fixtures

Cost of goods sold

Selling expenses

Salaries & wages

Advertising

Office supplies

Rent

Utilities

Insurance

Term loan interest

Total disbursements

137,750

43,500

2,00,000

1,06,722

1,42,296

1,77,870

78,262

19,566

64,033

14,230

7,115

28,460

28,19,804Cash flow 7,37,596

C. Pro Forma Balance Sheet:

Taka

Properties & assets particulars Year 1 Year 2 Year 3Land & Site Development

Land

Leveling & Dressing

Fencing & GatesBuilding

16,00,00

0

80,0001,20,000

16,00,000

80,000

1,20,000

16,00,000

80,000

1,20,000


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Pump House

Labour Shed

Plant & Machinery

Submersible Pump

Fertigation system

Farm Equipment Machinery

Furniture & Fixture

29,000

14,500

72,500

58,000

7,250

2,00,000

28,130

14,065

68,875

55,100

6,887

1,80,000

27,260

13,630

65,250

52,200

6,524

1,60,000

Total Fixed Assets 21,81,25

0

21,53,057 21,24,864

Cash balance 3,66,424 3,66,424 3,66,424Bank balance 5,49,636 5,49,636 5,49,636Accounts receivables --------- 5,16,060 6,86,060Total current Assets 9,16,060 9,00,000 9,30,000Total 30,97,31

0

35,69,117 37,40,924

Taka

Capital & liabilities Year 1 Year 2 Year 3

Equity / Share capitalRetained Earnings

Long term loan

Accounts payable

Other current liabilities

9,16,0608,07,160

13,74,090

-----------

-----------

8,87,8678,07,160

13,74,090

3,00,000

2,00,000

8,59,6748,07,160

13,74,090

4,00,000

7,00,000Total 30,97,310 35,69,117 37,40,924

D. Break-Even Analysis

Analysis of total cost Fixed Variable TotalRaw Materials (COGS)

Selling expenses

Advertising

Salaries, wages

SuppliesRent

-

-

-

1,00,000

7,98639,204

1,08,900

1,45,200

79,860

81,500

11,97926,136

1,08,900

1,45,200

79,860

1,81,500

19,96565,340


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Utilities

Insurance

Term loan interest

Depreciation

Miscellaneous

5,808

7,260

29,040

28,193

18,488

8,712

-

-

-

27,734

14,520

7,260

29,040

28,193

46,222

Total 2,35,979 4,90,021 7,26,000

We know, CM ratio = (Sales Variable Cost)/ sales

= (36,30,000-4,90,021)/36,30,000

= 86.5%

BEP (Sales) = Fixed cost / CM ratio

= 2,35,979 / 0.865

= Tk. 2,72,808

BEQ = BEP/Price per unit

= 2,72,808/550

=496 unit

Margin of Safety = (Total sales-Break even sales)/Total sales

= (36,30,000-2,72,808)/36,30,000

= 92.48%

E. Sources and Applications of Funds

Sources of funds

Source AmountEquity Capital (40%) 9,16,060Term loan (60%) 13,74,090Total 22,90,150

Applications of funds

Applications Amount

Land & Site Development 18,00,000Building 43,500


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Plant & Machinery 137,750Furniture & Fixture 2,00,000Cost of goods sold 108,900Total 22,90,150

F. NPV of the Project:

For calculating NPV, we have to find OCF (operating cash flow):

OCF in year-1 = EBIT + Depreciation- Tax

= 28,74,960 + 28,193 - 0

= 29,03,153


= 31,98,092 + 28,193 - 0

= 32,26,285


= 35,21,581 + 28,193 - 0

= 35,49,774

When, required rate of return is 10% then NPV

429,82,5610.1

774,49,35

10.1

285,26,32

10.1

153,03,29150,90,22

32=+++=


900,07,5015.1

774,49,35

15.1

285,26,32

15.1

153,03,29150,90,22

32=+++=


887,23,4420.1

774,49,35

20.1

285,26,32

20.1

153,03,29150,90,22

32=+++=


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Concluding Remarks

In a developing country like Bangladesh, the competition of the establishment in an

already recognized & conventional business sector is very hard. The companies invest

more in the familiar business segments rather than most new ones. So, with the

necessity, comes the innovating approach to exploit the potential areas. A plan like

strawberry farming can always succeed in our country where the cost of direct

workforce is relatively cheaper, the environment is as friendly and good

communication as we can practically expect it to be. If government help a little bit

and support, this sector of business can really grow in near future spontaneously.

Presenting this incredibly feasible of a business idea we can say, our economy is

awaiting to become sweetened in a real eco-friendly way.

Assumption:

Depreciation is charged 3% on building, 5% on

plant & machinery and 10% on furniture & fixture.

No tax is charged on the 1 st three years income of

the company. Assume that there is tax exemption on the 1 st three years of

operation.Cash flow is increased at the rate of 5% for 2 nd and

3rd year.

Assuming that discount rate for calculating NPV is

10% or 15% or 20%

References:


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1) Entrepreneurship 5 th edition

R.D.Hisrich

M.P.Peters

2) BSA (Bangladesh Strawberry Association).

3) Botany Department, Rajshahi University.

4) Professor Dr Manjur Hossain, Rajshahi University, Botany Department.

5) Quamruzzaman, Horticulturist, Horticulture Center, Harishpur, Natore.

07-Sweet Bangladesh_final

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