7

CHAPTER 2

BUSINESS PLAN

2.1 Executive Summary

Naturalife Greenworld is a firm that was established by the

students and alumni of the school of pharmacy ITB in 2006.

Naturalife Greenworld is established as a company that will focus

on the medicinal plants trading as the supplier with the best

product quality assurance. Naturalife Greenworld has obsession

to be the main supplier of medicinal plants product in the

domestic and international market.

In the first step, Naturalife Greenworld will focus on the

upper stream business as the supplier to the big players who need

medicinal plant. The big players can be either the major industry

players or niche industry players such as PT. Kimia Farma,

PT.Indofarma, PT. Bio Farma and PT. Pharos, Bayer, Bristol Myer

Squibb, Merck, Scan Chemie, Phvizer, Abbot, Aventis, Sandoz

Biochemie, PT. Sidomuncul, PT. Nyonya Meneer, PT. Indotraco

jaya utama, PT. Indofarma, CV. Temu kencono.

Naturalife Greenworld has a wide range networking for

getting its material, from the medicine plants farmer in Banten,

West Java (Lembang, Lido and Subang), Yogyakarta (Klaten),

Central Java (Wonogiri and Tawang Mangu) and also East Java

(Sidoarjo and Malang) to run the function of quality control

especially in handling the pesticide and also the drying of

simplicia and water composition.

8

Naturalife Greenworld products position itself as the the

medicinal plants supplier company which provide high quality

and safe products which in line with the international standards

and customize depends on the requirements and the demand of

the industry.

Naturalife Greenworld product focus is in the form of

simplicia presentation for wild ginger (Zingiber officinale), kumis

kucing (Orthosiphon aristatus), rumput fatimah (Labisia pumila). The

consideration of choosing those plants are because of their

readiness to be harvested, to be dried and to be supplied to the

industries that needs these medicinal plants. Beside that the

planting time also becomes the consideration. Ginger have the

longest planting time of eight to ten months, while rumput fatimah

or kumis kucing have a plantating time of one month to two

months. In conclusion, the planting time of kumis kucing and

rumput fatimah are aimed at supporting the long planting time of

ginger.

Naturalife Greenworld is aiming at having the market

share of ginger for 1% of the total market of ginger or 50 tons per

year or as big as IDR 200 millions from the total market of 5000

tons or as big as IDR 2 trillions. This is actually for the initial

strategy, because Naturalife Greenworld believes that in the

following year the company can increase the market share to 5-

20% for ginger. For kumis kucing, since there are no players in this

product, Naturalife Greenworld is optimistic to lead the market

share by 70% of 20 tons which is 14 tons or equal to IDR

996.000.000 per year. Lastly for rumput fatimah we are aiming at

supplying 630 kilograms for every two months. Specifically for

9

rumput Fatimah, Naturalife Greenworld is the pioneer of playing in

rumput fatimah market.

Naturalife Greenworld businesses is a fast growing

business, according to the financial analysis, the business of

medicinal plant that will be run by Naturalife Greenworld is very

feasible based on the normal case, since the Payback Period is 15

months and25 days, NPV is bigger than “0” about IDR 314.649.416

and IRR is is 155 percent.

In conclusion the business are very prospective since the

habit of medicinal consumption had changed to back to natures

trend. Beside the empty market that are not yet fulfilled which

vary in different business core ensure the high rate of demand in

medicinal plants in Indonesia.

2.2 Company Profile

2.2.1 Business Profile

Naturalife Greenworld is a firm that was established by the

students and alumni of the school of pharmacy ITB together with

SBM-ITB student in 2006. Naturalife Greenworld is established as

a company that will focus on the medicinal plants trading as the

supplier with the best product quality assurance.

Naturalife Greenworld will cooperate with the potentially

credible farmers of medicinal plant products such as ginger, kumis

kucing and rumput fatimah.

10

Naturalife Greenworld has obsession to be the main

supplier of medicinal plants product in the domestic and

international market.

Naturalife Greenworld has significant resources either in

competency, network or in human capital such as pharmacy

competency, laboratories network, financial practitioners, UGM-

ITB consultant and direct network to medicinal plants farmer

network.

2.2.2 Company Value

This part will describe Naturalife Greenworld company value

which consisting of the company vision, company mission,

company logo, company motto and the company core value.

2.2.2.1 Company Vision

To be the best Indonesian medicinal plants/herbs company having

international standard qualification operating on completely

integrated from upstream to downstream industry.

2.2.2.2 Company Mission

1. Controlling the best supply of medicinal plants in

Indonesia.

2. Conquering medicinal plant market in In Indonesia.

3. Supplying the international need of medicinal plants.

11

4. Tight controlling in quality and quantity assurance of the

medicinal plants.

5. Having a well prepared and execution to achieve the

company vision.

2.2.2.3 Company Logo

The figure below is the Naturalife Greenworld logo, which is

designed based on the philosophical basic of the Naturalife

Greenworld company value and represents the whole identity of

the company.

Figure 1: Naturalife Greenworld Logo

Naturalife Greenworld logo consist of three different parts.

The first one in the top is the main company logo which having a

philosophical meaning as follows:

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1. The green color represents the company value of

the sustainable development of the natural

resources on our environment.

2. The green circle represent the greenworld and the

sustainable development of earth of which

Naturalife want to achieve.

3. The plants picture represent the the medicinal

plants of which Naturalife focuses on.

The second part is the naturalife greenworld text which

explains the logo on the top. Then the last part is the NLG text is a

logo that will be use for all the Naturalife Greenworld employees

to be put on their chess to make them proud of Naturalife

Greenworld Company.

2.2.2.4 Company Motto

The company motto is “Experience the Harmony of Life”, having the

meaning of bringing people back to the nature and having feel the

harmony of living by using something that the nature always

gives us.

2.2.2.5 Company Core Values

1. Trust

The company should be known as the trusted company,

either externally or internally.

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2. Knowledge

The company should become the knowledge based

company by always updating knowledge.

3. Work Ethos

The company insists in implementing a discipline and

never give-up culture

4. Leadership

The company should be able to lead the efforts in the best

way to achieve the company vision.

5. Sustainable Development

The company actively involve in the sustainable

development of the nature and the company itself.

2.2.2.6 Keys Success Factors

To be the best Indonesian medicinal plants/herbs company having

international standard qualification operating on completely

integrated from upstream to downstream industry. Naturalife

Greenworld has the following key success factors:

A. External Factors:

1. Definitely targeted markets which always increase

consistently.

2. Best quality of products and services, from both

upperstream process to the downstream process.

3. Realistically competitive price

B. Internal Factors,

1. Focus

2. Discipline

3. High spirit

4. Teamwork

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2.3 Product Description

Naturalife Greenworld will provide a variety of qualified

medicinal plant products that will enable to the traditional

medicine industries pharmacy industries and to several potential

targeted market. Naturalife Greenworld underlying philosophy in

selecting products is to choose lines of products carrying not only

best quality, competitive prices and product satisfaction to

customers but also high margin of profit for the company.

Naturalife Greenworld has intentionally conducted

research of the following products. Naturalife Greenworld has

high commitment to offer products that are in line with the

required standard of industry demand nationally or

internationally. All of the product are in a form of dry herbs, which

divided into three kinds of form namely leaves, rhyzomes and

fruits.

Ginger (Zingiber officinalle) is a medicinal plant with an

apparent stem. Ginger is originally from the Asia Pacific and

spreads along China to India (Direktorat Budidaya Tanaman

Sayuran dan Biofarmaka, 2005: 1). The two nations (China and

India) are the first nation using ginger as drink, spices and

traditional medicine (Direktorat Budidaya Tanaman Sayuran dan

Biofarmaka (B), 2005: 4). The characteristics of Ginger are they

need: a high rate of rain between 1.500-3000 mm/year, an open air

to get sunshines especially between 2,5 until 7 months old, a

crumble land. Moreover, they live in tropic or subtropic area

between 0-1.000 m above the sea level (Direktorat Budidaya

15

Tanaman Sayuran dan Biofarmaka (B), 2005: 7). Ginger picture can

be seen below.

Figure 2: Jahe Plantation in Banten

Rumput fatimah (Labisia pumilla), has been used by many

generations of the Malaysian and Indonesian women to induce

and facilitate childbirth as well as a post-partum medicine. Three

varieties of Labisia pumila had been identified and found in

Malaysia, they are Labisia alata, Labisia pumila and Labisia lanceolata.

It is imperative to differentiate the three varieties in terms of their

physical and chemical characteristics as well as biological activity,

in order to determine the proper plant material for use, hence

producing quality herbal medicines with proven safety and

efficacy. It is a fast growing plants, it can be planted last than one

month to two months maximum3.

3 http://www.imr.gov.my/org/hmrc_r2.htm

16

In the Figure 3 below, it shows the rumput fatimah picture:

Figure 3: Rumput Fatimah Plantation between Corn Plantation in Lido,

West Java

There is presently a great local market demand for rumput

fatimah especially as afterbirth tonics, however, a paucity exists in

technical information on plant identification, propagation

techniques, agronomy and sivicultural aspects according to

Jaganath and Ng on the year 20004.

Kumis kucing (Orthosipan aristatus) is a medicinal plant in a

form of straight wet branch. This plants is well known with

several names such as kidney tea in England, giri-giri marah in

Sumatera, remujung in Central Java and East java and songot

koneng in Madura. Kumis kucing was originally from tropical

Africa and then spread out to Asia and Australia. The wet or dry

leaves of kumis kucing is used as a material of medicines. In

Indonesia the dry leaves (simplisia) is used commonly for kidney

4 http://www.imr.gov.my/org/hmrc_r2.htm

17

problems (diuretic) meanwhile in India it is used to heal

rheumatism5.

The picture of kumis kucing can be seen in Figure 4 below:

Figure 4: Kumis Kucing Plantation in Lido, West Java

The peoples in South and South East Asia are commonly

used kumis kucing as traditional medicines to heal several peoples

problems including rheumatism, masuk angin and constipation.

Beside that kumis kucing could also be used for therapy kidneys

inflamed, kidneys stone, kencing manis, albuminuria, and

syphilis6.

Currently the majority of these products are only available

to customers through wholesale vendors such as Cash and Carry 5http://www.ict4pr.org/files/warintek/Teknologi%20Tepat%20Guna/budidaya%

20pertanian/obat/kumis_kucing.pdf

6http://www.ict4pr.org/files/warintek/Teknologi%20Tepat%20Guna/budidaya%

20pertanian/obat/kumis_kucing.pdf

18

in retail outlets in a small number and volume; therefore it is the

customer's responsibility to acquire these products by their own

means. As the same as rumput fatimah, kumis kucing is also a fast

growing herbs approximately from three weeks to one months if it

is plant in a right procedure.

2.3.1 Product Distribution

2.3.1.1 Current Distribution Schemes

Figure 5 shows the current distribution processes as it is

researched by the Department of Agriculture of Indonesia in

several medicinal plants production area. From the figure can be

identified that the products must pass several stages before it

reach the customers hand. From the farmer the products go to the

assembly trader, inter region trader and ends up in the processing

industries for the industry purpose used. Meanwhile for the

internal consumption, it must go first to the district trader in the

kecamatan or kabupaten wholesaler. In this graphic either farmer,

assembly trader or inter region trader can make their own way of

doing export through the exportir channel.

The figure in the next page shows the common product

distribution which is made by the Department of Agriculture of

Indonesia:

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Figure 5: Biopharmaca or Medicinal Plant Market Current Distribution Schemes

(Source: Department of Agriculture, Indonesia, 2002)

2.3.1.2 Naturalife Greenworld Distribution Schemes

From the Figure 6 in the next page clearly explains that Naturalife

Greenworld product distribution cuts several stages in the market,

since Naturalife Greenworld does an effective process to the

product received from the farmer by drying the product and

doing toxicity process. The process makes the product value

increase so that Naturalife Greenworld also can earn more profit

margin.

Farmer

Assembly Trader

Inter region trader

Kabupaten District Trader

Internal Consumption

Processing Industries Exportir/

Importir

4

1

2

5

3

20

Figure 6: Naturalife Greenworld Distribution Schemes

2.3.2 Quality Assurance

In the beginning of Naturalife business, the company is aiming at

giving the best quality products to the customers. This means the

products which are going to be supplied must fulfill the standard

quality of company. To fulfill the industry standard the company

will set up the internal standard we are going to have internal

standard guidance of standardizations as Naturalife greenworld

quality assurance. The benefit of having standardization is to

guarantee the uniformity of the product, the consistency and

uniformity including safety, benefit and product quality from

batch to batch (the quantity of measurement in one sample).

Farmer

Naturalife GreenWorld.co

Local Market

Quality

Assurance

Inventory

Processing Export

Global Market

1

3

2

4

21

The point of quality of assurance and the guidance of

standardization are Kadar abu total, Kadar abu tidak larut asam, Kadar

abu larut air, Logam berat (Kadar/Batas), Kelarutan, Kadar sari larut

pelarut tertentu, Cemaran pestisida, Cemaran radioaktif, Kadar air,

Susut pengeringan, Bahan organik asing, Senyawa sintetis, Residu

pelarut organic, Aflatoksin, Cemaran mikroba (ALT, Angka kapang

khamir, Bakteri patogen) (Elfahmi, 2006).

The quality assurance will last for the first 3 years of the

company establishment. After 3 years, Naturalife are aiming at

getting the ISO to be able to get international recognition of the

products quality standards, considering that the dynamic of

business which require a global product quality standards and

minimizing the risk of uncertainty business situation in Indonesia.

2.3.3 Packaging

There is no standard demand for packaging, but there is the wide

range variability on packaging specification depending on the

needs of each buyer. However Naturalife has prepared the

technology of packaging to accomodate the need such as the

vacuum packaging technology.

2.3.4 Competitor Product Analysis

Generally the direct competitors in this business are not many,

there are only two big players that will be the main competitors,

namely Haldin and Emeralda. The rest are individual players

which do not continuously show up.

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Haldin has various variety of products and captive market

in the USA, it is not amazing because it is a sub company of its

holding company base in the USA. Moreover Haldin itself is not

focusing well on its core products, it is seasonal inter region

trader. Haldin does not process the products until extract products

like Naturalife Greenworld will do.

Emeralindo Hijau Lestari is a trader that located their

company in Bandung, Emeralindo focus itself on ginger products

for the purpose of trade, but it trades ginger in the form rhyzome or

wet form (Direktorat Tanaman Sayuran, Hias dan Aneka

Tanaman, 2002: 29) or without any further processing (drying) like

Naturalife Greenworld will do.

2.4 Market Analysis

The economical value of the medicinal plant industry has reached

US$ 100 million per year, meanwhile the world potential reached

US$ 43 billion in 2001. It is estimated that it will grow to US$ 83

billion in 2002 and reach US$ 5 billion in 2050. It can be said that

the medicinal plant growing is moving towards a promising

direction (Direktorat Tanaman Sayuran, Hias dan Aneka

Tanaman, 2002: 4).

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2.4.1 Market Characteristics

Based on the interview with Mr. Pinondang Poltak Marganda7 on

June 25th 2007 and Mr. Galih Prasetya Utama8 on June 30th 2007 the

medicinal plant market can be identified through several

characteristics related to the “back to nature” trend of the world

community consuming the medicinal plants, those characteristics

are:

1. Sensitive to the healthy idea’s about the use of nature

material, based on a research. The meaning of this

characteristic is when one product is exposed, so there will

be a me too-product so that the market of that product will

go down. To design a stable market need, but not easy to go

down, it is important to design a holistic trend.

2. In the rainy seasons, the peoples willingness to consume

natural material is much bigger than consuming synthetic

medicine, especially consuming jamu.

3. Consuming jamu, standardized herbs, phytopharmaca and

reflection massage are an alternative healing besides using

synthetic medicine.

4. There are some commodities which are long lasting and

needed in the market, most of the manufactured company

invested their money to produce those commodities as

primary commodity in their production or their product

7 Representative from the Direktorat Budidaya Tanaman Sayuran dan

Biofarmaka, Departemen Pertanian

8 Representative from the School of Pharmacy ITB and the owner of

www.bisnisfarmasi.wordpress.com

24

line up. PT. Nyonya Meneer prioritizes and focuses on

Curcuma domestica or kunyit. Other products that are as the

primary commodities in the manufactured companies are

kunyit, jahe, lengkuas, kencur, kapulaga and aloe vera.

Beside those products, other medicinal plants products are

also needed such as kumis kucing, rumput fatimah,

pegagan, temulawak, etc.

5. Nowadays all the pharmaceutical companies have part of

their profit from the medicinal plants products, from

cosmetics to tooth paste. At least they have one “herbal”

product edition or there is a mix of medicinal plants in the

composition of the product that the companies produce.

Those companies don’t want to be bothered by the natural

material that are difficult to be processed. They want it in a

form of extract so to make it easier in the downstream

process and not too take much time in the upstream

process, one example of it is PT. Indofarma that dares to

buy in a great price for the extracts.

2.4.2 Market Size and Needs

Nowadays natural material is becoming a primary consideration

of the business development in several pharmaceutical companies.

Almost every synthetic medicine companies have a natural

material development division such as Sanbe Farma, Kalbe Farma

and Kimia Farma. For Sanbe Farma itself has already used two

experts from China and India for two years, to help its natural

material developmet division. The infrastructure that they built is

in research and business development.

25

Moreover, there are a definite finite demand in

biopharmaca or medicinal plants industry for several commodity.

The most demand is Ginger which is needed totally 5000 ton

followed by Kapulogo and Temulawak by 3000 ton, Kunyit 3000

ton dry simplicia and 1500 ton rhyzome or wet, and there are 2000

ton needs of Adas and Kencur. And still hundreds of ton are

needed yearly in the biopharmaca or medicinal plants industry.

For complete it will be shown and mentioned in the table below:

Table 1. The needs of Indonesian Traditional Medicine Industry on The Variety

of Biopharmaca

26

Source: Departemen Pertanian, 2002

Eventhough the data was recorded in 2002, but based on the

interview with the Direktorat Budidaya Tanaman Sayuran dan

Biofarmaka, the demand of medicinal plants is still high, because

several manufactures still lack of the supply of the medicinal

plants material, it is estimated that the fulfillment on the

medicinal plants for only 2 % yearly, so from 2002 until 2007 there

is only 10 % of fulfillment in the medicinal plants demand,

therefore there is still a wide market to run business in this

market.

Naturalife Greenworld is aiming at having the market

share of ginger for 1% of the total market of ginger or 50 tons per

year or as big as IDR 200 millions from the total market of 5000

tons or as big as IDR 2 trillions. This is actually for the initial

strategy, because Naturalife Greenworld believes that in the

following year the company can increase the market share to 5-

27

20% for ginger. For kumis kucing, since there are no players in this

product, Naturalife Greenworld is optimistic to lead the market

share by 70% of 20 tons which is 14 tons or equal to IDR

996.000.000 per year. Lastly for rumput fatimah we are aiming at

supplying 630 kilograms for every two months. Specifically for

rumput Fatimah, Naturalife Greenworld is the pioneer of playing in

rumput fatimah market.

2.4.3 Industry Growth Trend

To analyze the growth trend of biopharmaca or medicinal plants

market, Naturalife Greenworld uses the growth in production as

showed in Table. 2. It can be seen that there is an increasing

growth trend of productions from almost every products, 25-30 %

annually. Therefore it can be said that the demand of medicinal

plants from 1997 to 2005 tends to increase.

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Table 2. Production of Medicinal Plants in Indonesia

Source: BPS Indonesia, 2006

29

Moreover the growth of the medicinal plants need can

also be seen from the growth numbers in the traditional

medicine industry either small and medium medicine

industries (IKOT) or big medicine industries (IOT) in the

year 2000 there were only 87 IOT and 723 IKOT, and in the

year 2003, there were 118 IOT and 973 IKOT (BP POM, 2000

and 2003). That figure shows that there is the increasing

number of medicinal plants industry, implying that there is

an increasing number of people consuming medicinal

plants9.

Based on the data from Corinthian Infopharma

Corpora (CIC), in 2000 the consumption of traditional

medicine in Indonesia increased 5,4 % annually, while

globally it increases 20,96 % annually. BP POM Republic of

Indonesia stated that the consumption of traditional

medicine will always increases nationally and internationally

as the impact of the new trend of back-to-natures living10.

2.4.4 STP (Segmenting, Targetting, Positioning) Analysis

2.4.4.1 Segmenting

The segmentation of Naturalife Greenworld market is going

to use the variable of industrial type which vary from

9http://www.bi.go.id/sipuk/id/lm/tanaman_bahan_jamu/pendahuluan.as

p

10http://www.bi.go.id/sipuk/id/lm/tanaman_bahan_jamu/pendahuluan.as

p

30

traditional medicine manufacture to food and beverages

manufactures, commonly called as Intermarket

Segmentation meaning that “the consumers have similar

needs, eventhough they have different core of businesses”

(Kottler, 2004: 250). Table 3 shows the number of companies

in each market segment:

Table 3. Market Segment for Medicinal Plant Product

No Market Segment Numbers

1. Traditional Medicine Industry 118

2. Smal and Medium Medicine Industry 917

3. Pharmacy Industry 168

4. Food Industry 55

5. Restaurant 309

6. Export (jahe only) Malaysia,

Singapore, Japan,

Saudi Arabia, USA

7. University 54 Pharmacy Faculty

Source: Compilation of Several Data

The market segment of Naturalife Greenworld are

divided into:

1. Industri Obat Tradisional/ Traditional

Medicine Industry

Industri Obat Tradisional (IOT), is a

traditional medicine industry or well known

as big Jamu manufacturer. The numbers of

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IOT had increased to 118 in 2003 compared to

1999 which was only 87 IOT. IOT industries

in Indonesia are led by Sidomuncul, Nyonya

Meneer and Air Mancur. Most of these type

of IOT are in a form of PT or perseroan

terbatas11.

2. Industri Kecil Obat Tradisional/ Small

and Medium Traditional Medicine

Industry

Industri kecil Obat Tradisional (IKOT), is a

small medium traditional medicine industry

producing jamu in a small amount of

production compared to IOT. Most of IKOT,

is a small medium enterprises and play

locally outside the capital city. Now the

numbers of IOT have reached 917 industries

compare to the year 1999 which are 833

industries12.

3. Pharmacy Industry

Pharmacy industry needs the natural based

material so much in a form of biopharmaca or

medicinal plants, since the peoples have

shifted their habit to back-to-natures habit.

There are 168 pharmacy industries

throughout Indonesia and the big players in

11http://www.republika.co.id/koran_detail.asp?id=213084&kat_id=150

12 http://www.republika.co.id/koran_detail.asp?id=213084&kat_id=150

32

pharmacy industries are Kimia Farma, Kalbe

Farma, Sanbe Farma, Indo Farma and Bio

Farma (B2B Directory, 2006-2007).

4. Food Industry

What does it mean by food industry here is

the need of food industry to consume spices

or medicinal plants for its production. There

are 55 food industries including the market

leader like Indofood, Ajinomoto, Sasa and

Magfood (B2B Directory, 2006-2007).

5. Restaurant

Restaurant can also be categorized as the

market segment for medicinal plants, because

It actually uses medicinal plant as spices.

There are 309 restaurants including fastfood,

foreign food and traditional or indonesian

food restaurant. The company that uses

spices from medicinal plants are included PT

Yakiniku Daidomon, PT Nyonya Suharti

Ayam Goreng, PT Pondok Laguna

Indonesian Food and PT Natrabu Indah

Agung (B2B Directory, 2006-2007).

6. Export

As mentioned above there are five countries

that have big demands in ginger like

Malaysia for 767 tons per year, Singapore 402

tons per year, Japan 527 tons per year, and

33

Saudi Arabia and USA 54 tons per year each

(Statistik Pangan Luar Negeri Indonesia-

Indikator Pertanian, 2005).

7. Pharmacy Faculty

The pharmacy faculty also has demand for

medicinal plants for its research. For

example, School of Pharmacy ITB needs one

ton of medicinal plants for one semester.

There are 3 major pharmacy faculty in

Indonesia UGM, ITB and University of

Indonesia.

2.4.4.2 Targetting

The target markets that is aimed by Naturalife Greenworld

are all the market segment having the most needs of Ginger,

kumis kucing and rumput fatimah as the basic material for the

purpose of the their production.

2.4.4.3 Positioning

Naturalife Greenworld will position itself as the the

medicinal plants supplier company which provide high

quality and safe products in line with an international

standards, and customize the products depending on the

requirements and demand of the industry.

34

2.4.5 Entry Barriers

In general the biopharmaca or medicinal plants business has

little entry barriers, since the market has less tight

competitors because the players in this industry that are

focusing in the suppliers are still few. Most of the suppliers

are the individual instead of the company. Meanwhile there

are also the companies as the suppliers such as Emeralindo

and Haldin. These individuals have the big possibilities for

their products to be rejected, the manufacturer choose the

company more because of their legalities.

Second, “the players in this business are focusing

themselves on wet harvested product rather than extract

processed product, this means that they are giving the wet

harvested product in a commodity which have no added

value to the customers which in the end the customers could

bargain for a lower price” (Galih Prasetya Utama, Private

Interview, 30-06-2007). So in case of these issues Naturalife

Greenworld had prepared itself to have a simple technology

of drying-to-extract plants which is not costly expensive and

easy to handle.

2.5 Marketing and Sales Strategy

In marketing and sales strategy there will be a discussion on

the the strategy that will be implemented by analyzing it

using the common tools of marketing and sales theory.

35

2.5.1 Competitive Strategy

No one strategy is best for all companies. “Each company

must determine what makes the most sense given its

position in the industry and its objectives, opportunities and

resources” (Kottler and Armstrong, 2004: 573). In the

Principle of Marketing books writen by Phillip Kottler and

Gary Armstrong, there are six basic competitive strategy.

The first three competitive strategy is called as the

three winning strategies include:

1. Overall Cost leadership, which means the

company works hard to achieve the lowest

production and distribution cost.

2. Differentiation, which means the company

concentrates on creating a highly

differentiated product line and marketing

program.

3. Focus, which means the company focuses

its effort on serving a few market segments

well rather than going after the whole

market.

In the Kottler and Armstrong winning strategy since

Naturalife Greenworld is a new established company, the

most suitable strategy to implement is by using Overall Cost

Leadership because by having these strategy it can reduce

the cost from production and distribution in order to gain

maximum efficiency of money which can be allocated to self

funding program for Naturalife Greenworld.

36

The second three competitive strategy is called as the

value discipline for delivering customer value, include:

1. Operational Excellence, which means the

company provides superior value by

leading its industry in price and

convenience.

2. Customer Intimacy, which means the

company provides superior value by

precisely segmenting its products or

services to match exactly the needs of the

targeted customers.

3. Product Leadership, which means the

company provides superior value by

offering a continuous stream of leading-

edge products or services.

In these last three strategies, Naturalife Greenworld

will use Customer Intimacy which we will give flexibility to

the customers needs of what form of product they want to be

supplied on. By having these strategies, the company added

value will increase in the eyes of customers.

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2.5.2 Strategic Opportunities

2.5.2.1 SWOT Analysis

Strength

- Networking from government, NGO,

business practitioner, academician and

also virtual networking.

- Product quality.

- Customer Relationship.

- Team work and ethos.

Weakness

Not yet recognizable by the market.

Opportunity

- There are still big space in the market of

which the industry need.

- The trend of medicine is changing to the

natural based medicine or back to nature

trend which is not just nationally but

also internationally.

Threat

- The threat from the imported product

especially from China.

- The threat from the substitution product

of synthetic based material which is

cheaper.

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2.5.2.2 Competitive Advantage

Competitive advantage is an advantage over competitors

gained by offering consumers greater value (Kottler,

2004:259). The competitive advantage of Naturalife

Greenworld product is in term of quality. The quality of

products of which Naturalife provides has been

standardized, depending on the market needs. Generally it is

natural from its farming until its drying.

2.5.3 Marketing Strategy (4 P’s)

2.5.3.1 Product

Naturalife will carry a variety of quality products that will

enable to provide full service delivery to medicinal plants,

traditional medicine industries and pharmacy industries. The

product that naturalife is focusing are on Ginger (Zingiber

officinale), kumis kucing (Orthosipan aristatus) and rumput

fatimah (Labisia pumilla).

2.5.3.2 Pricing

The price of each product offered vary based on the local

market prices, for dry Ginger it is IDR 7.000 to IDR 13.000 @

1 kilogram, for dry Kumis Kucing it is IDR 13.000- IDR

20.000 @ 1 kilogram and for Rumput Fatimah it is IDR

110.000- IDR 180.000 @ 1 kilogram. For dry medicinal plants

there is no fixed rule, commonly it depends on the

negotiation from the supplier and the consumers, but the

rate that is used are as mentioned above.

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2.5.3.3 Place

The Place of which naturalife cooperate with the farmer on

getting the best quality of product is in Lido, West Java for

rumput fatimah and kumis kucing and in Banten for Ginger.

Both of these area are an inventarization of medicinal plant

farming that make easy access from the party that are

involved between farmer, supplier and Industry.

2.5.3.4 Promotion

- Naturalife Greenworld will listed itself in

international or national trade website like alibaba for

advertising.

- Direct Selling to the targeted market by making first

the complete database of those targeted market.

- Referral Marketing, by the network that Naturalife

Greenworld have, it enables us to get a reference.

Most of the marketing expense will be used for

promotion, the expected marketing expense is around 2

million IDR per month. It will be vary according to the need

of the expense.

2.5.4 Sales Forecast

Naturalife Greenworld estimated that the growth of sales is

20%-30% per year depends on the unit product sold and the

company maximum supply capacity, because Naturalife

Greenworld are pretty sure by acknowledging the specific

40

market for different product in the first year it will make

easy Naturalife in the upcoming years. The estimated

increases of sales were assumes of the increasing number of

capacity that Naturalife Greenworld could supply or the

increasing price of the products itself. The specific number of

sales forecast is shown in table below:

Table 4. Naturalife Greenworld Sales Forecast (In Rupiah)

Total Year 1 Total Year 2 Total Year 3

Sales

Jahe Rp560.000.000 Rp960.000.000 Rp1.088.000.000

Kumis Kucing Rp655.200.000 Rp914.550.000 Rp1.037.400.000

Rumput Fatimah Rp451.027.500 Rp565.950.000 Rp597.712.500

Total Sales Rp1.666.227.500 Rp2.440.500.000 Rp2.723.112.500

2.6 Operational Plan

The objectives of the Naturalife Greenworld operation plan

are:

1. Efficiency and easiness in distribution and production

2. To keep the product quality and service to fulfill the

demand of the targeted market.

3. To give the best service to the targeted market in

order to give brand image of Naturalife Greenworld

company.

41

The discussion of the operational plan will include the

business process, the capacity of production, the contract

agreement system.

2.6.1 The Business Process

The Naturalife business process is the whole business

process showing the time and direction of the process from

farmer to the end user which is the manufacture. The table in

the following page shows the business process of Naturalife

Greenworld company.

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Table 5. Naturalife Greenworld Business Process

NATURALIFE GREENWORLD BUSINESS PROCESS

NGW MARKETFARMER

FARMING

HARVEST

WAREHOUSING

PLANT DRYING

TRANSPORTATION

LAB CHECKING

(SAMPLE)

QUALITY

ASSURANCE

YES

NO

PACKAGING

(Optional)

COMPANY LAB

CHECK

MANUFACTURE

YES

NO

1-8

month

1-5

weeks

1-2

weeks

2 days

1-8

days

3 days

1

weeks

2 days

3 days

end

The process start from the farming, in this farming

stage the medicinal plants are being planted by the farmer.

The three different kinds of products have different times of

planting time. Ginger lasts for eight months, while kumis

kucing and rumput fatimah only last for one month. After the

43

farming, the process comes to the harvesting taking from one

to five weeks, depending on the planting method. If all

plants (ginger, kumis kucing and rumput fatimah) are planted

in the same time, the harvesting will only last one month but

if they are planted in “tumpang sari” or random, the

harvesting could take five months.

The next process is the warehousing which takes one

to two weeks. The warehousing takes place in the farmer

side. After the warehousing, the next is the plant drying

process, the plantations are being formed to simplicia or

extract.

In the next stage, the sample of the drying plants will

be taken to Bandung for lab checking which takes one to

eight days. The lab checking of Naturalife Greenworld will

also conduct the quality assurance for three days to ensure

the products have been standardized. The products that

fulfill the standard will be directly packaged in the farmer

side for one weeks and the products that are not passed the

checking will be returned to the farmer and exchanged them

with other plants.

After the packaging process, the next stage is

delivering the plants to the market or manufacturer or to be

re-checked again in their internal lab, the check are

commonly just for formality because the products have been

certified in the previous lab checking. At the end, products

will be processed in the manufacture.

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2.6.2 Capacity

The capacity of supply from Naturalife Greenworld are:

Table 6. Naturalife Greenworld Maximum Capacity of Supply

Maximum Capacity

Jahe (ton) 150 ton/8 bulan

Kumis Kucing (ton) 14 ton/2 bulan

Rumput Fatimah (kg) 1000 kg/2 bulan

The assumptions from these capacity is based on the

ability of the medicinal farming area of which Naturalife

Greenworld products are being taken in this case Lido and

Banten. But Naturalife also have wide range of farmer

networking throughout Indonesia especially in Java if in

example the demand increase.

2.6.3 Contract Agreement System

The contract agreement system is the contract agreement that

is made by the farmer and Naturalife Greenworld to ensure

the capability of farmer on fulfilling the demand which

Naturalife Greenworld asks for a month or a year and

Naturalife Greenworld capability on giving the payment to

the farmer. So at the end, no party from the farmer and

Naturalife Greenworld are being disadvantaged. These

Contract Agreement systems will be conducted legally in

front of the notary public.

There are two kind of system that is used by

Naturalife Greenworld to build long term cooperation with

the farmers, legally- formal and social way. Initially, in the

45

first step Naturalife Greenworld finds the potential region to

become farming partner, Naturalife Greenworld build

emotional engagement with intense communication and

trust building by opening new captive market for the farmer.

Secondly, when the farmers are getting used with the

company, and they’ve already trust the institution.

Naturalife Greenworld offering a new agreement for long

time mutual cooperation, legally in front of the notary

public.

The first term ( Social Trust Building) range time can

be vary according to the character of the farmers, and the

sustainability of the product market itself, as soon as

Naturalife Greenworld show the commitment of emerging

market and keep the sustainability of market share, the

farmer are getting faster to get more trust with the company.

These contract agreement systems will also be

implemented between the consumer and Naturalife

Greenworld in order to keep the demand always stable and

one of the party are not reluctant with the agreement.

2.7 Management Team

2.7.1 Key Member

Naturalife Greenworld will be run by 6 people of which also

take a part as the managers and also having the role as the

permanent employee, because in the first establishment of

the company Naturalife Greenworld doesn’t have employee.

But here the managers is also the employee. There are 4

46

divisions, each divisions will hold on and responsible to

what their task is. Responsible for leading the company is the

task of the general manager, responsible for sales and

marketing is the task of sales and marketing division,

responsible for finance is the task of finance division,

responsible to run the company administration is the task of

corporate secretary, responsible of research and development

is the task of R&D division and responsible on production

and quality assurance is the task of production and quality

assurance division.

Beside the permanent employee which consist of six

members, there will be also a temporary employee which

have a task of keeping and guarding the warehouse. There

will be three temporary employees. These temporary

employees will be responsible to the production and quality

assurance division.

2.7.2 Organization Structure

The figure in the next page is showing the organization chart

of Naturalife Greenworld company.

47

Figure 7: Naturalife Greenworld Organization Structure

2.8 Financial Plan

Naturalife Greenworld is a company that is established to

run a business which aimed at gaining the profit. Therefore

the function of financial management in Naturalife

Greenworld is to make a financial planning, the allocation of

investment and resources in order for the company to get a

guarantee on the business sustainability and stability, so at

the end the company objectives can be achieved.

Beside that, Naturalife Greenworld thinks that

financial strategy is very important and one of the important

factor in the decision making on achieving the objectives of

the company. The detail of the strategy will be later

discussed in the next sub chapter.

General

Manager

Corporate

Secretary

Sales and

Marketing

Division

Finance

Division R&D Division

Production

and Quality

Assurance

Division

Warehouse keeper and guard

48

2.8.1. Start-up Capital

The Initial investment that Naturalife Greenworld estimated

is the amount of IDR 94.600.000, which is allocated for cash,

legal, warehouse rent office rent, office renovation,

laboratorium rent, equipment and others.

For detail it is shown in the table below:

Table 7. Naturalife Greenworld Start-Up Summary (In Rupiah)

Start-Up Summary

1. Asset

Requirements QTY

a. Computer 1 4.750.000

b. Printer 1 1.000.000

c. Fax 1 1.250.000

d. Office Kit

(Furniture) 3.000.000

2. Working Capital

a. Salary 20.700.000

b. Warehouse Rent 20.000.000

c. Office Rent 12.500.000

d. Laboratorium Rent 1.500.000

e. Office Supplies 400.000

3. Initial Cost

a. Legal 10.000.000

b. Office Renovation 4.500.000

c. Market Research 15.000.000

Total Start-up Cost 94.600.000

2.8.2 Basic Assumptions

In designing a financial plan Naturalife Greenworld use the

basic assumptions as shown in the tables below:

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Table 8. Naturalife Greenworld Maximum Sales Capacity

Sales

Maximum Capacity

Jahe (ton) 150 ton/8 bulan 8000/kg

Kumis Kucing (ton) 14 ton/2 bulan 13650/kg

Rumput Fatimah (kg) 1000 kg/2 bulan 115500/kg

Table 9. Naturalife Greenworld Expenses Assumption

Expense Amount Explanation

Warehouse Rent Rp 20 mill@year In Advance, Increase Rp 500 thou yearly

Office Rent Rp 12 mill@year In Advance, Increase Rp 500 thou yearly

Lab Rent Rp 2mill@year In Advance, Increase Rp 500 thou yearly

Utility Expense Rp 980thou-Rp 1,3mill@month Fluctuated

Tarnsportation Rp 1.5 mill/6 ton

Administration Rp 416.667@month first year

Increase total Rp 500 thou yearly

Marketing Expense Rp 2.083.333@month first year Increase total Rp 5 mill yearly

Salary Expense Rp 20.700.000@month first year

Increase Rp 150 thou yearly every month

Miscellanoues Expense Rp 1.250.000@month first year Increase total Rp 1 mill yearly

Tax 25%

Depreciation a. Computer 79167

b. Printer 27778

c. Fax 14881

d. Office Kit

(Furniture) 50000

Total/month 171825

Profit sharing 40% from net profit after tax

Worst Case Scenario Worst Case Scenario Unit Sold 90% COGS Increase 10%

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2.8.3 Revenue

The tables below shows the Naturalife Greenworld projected

revenues:

Table 8. Naturalife Greenworld Projected Revenue (In Rupiah)

Total Year 1 Total Year 2 Total Year 3

Revenues

Jahe Rp560.000.000 Rp960.000.000 Rp1.088.000.000

Kumis Kucing Rp655.200.000 Rp914.550.000 Rp1.037.400.000

Rumput Fatimah Rp451.027.500 Rp565.950.000 Rp597.712.500

Total Revenues Rp1.666.227.500 Rp2.440.500.000 Rp2.723.112.500

2.8.4 Project Measurement Analysis

In analyzing the project measurement, Naturalife

Greenworld will use three method to identifying whether the

business is feasible or not.

2.8.4.1 Payback Period

“Payback period is a period which shows how long the

investment in one business can be return” (Rangkuti, 2005:

214). The fastest the return, the more profitable the business

is or on the other hand the the less number of the payback

period the business is better. Naturalife Greenworld

estimated that the payback period is 15 months 25 days for

the normal case. For the worst case, the payback period is

unidentified with the scenario that the COGS will increase 10

percent and the unit sold is 90 percent.

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2.8.4.2 Net Present Value (NPV)

This method is used to analyze whether the business project

is feasible or not to run. “If the Net Present Value (NPV) is

positive, so the project is producing cash inflow bigger than

the investment opportunity cost” (Rangkuti, 2005: 205). On

the other hand if the NPV is > 0 the business is feasible.

Naturalife Greenworld NPV is IDR 314.649.416 for the base

case which is bigger than “0”, so the business based on the

normal case is feasible. For the worst case the NPV is below

“0”. It means that the business is not feasible if the product

unit sold is 90 percent and the COGS increase 10 percent.

2.8.4.3 Internal Rate of Return (IRR)

IRR is a method to measure level of investment. “IRR shows

the project ability to get an average profit as long as the

project run considering from the level of interest rate”

(Rangkuti, 2005: 207). If the IRR is bigger than the interest

rate it means the business is feasible to run. Naturalife

Greenworld IRR is 155 percent for the normal case, from the

normal case scenario we can see that the business is feasible

because it is bigger than the interest rate in suku bunga

deposito bank which is only 6,75 percent. Moreover Naturalife

Greenworld also make an addition of 30 percent to the

deposito to make a total of 36,75 percent because the addition

is worth the risk that the business brings, but still Naturalife

Greenworld IRR is still bigger in the normal case. In

conclusion based on the normal case this business is very

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good to run. The condition is vise versa in the worst scenario

where the unit product sold is 90 percent and the COGS

increase 10 percent, the IRR less than interest rate that

Naturalife had sent for the benchmark. In summary to keep

on this business therefore Naturalife Greenworld should

maintain sales of unit close to 100 percent and keep the

COGS stable not to increase very far.