[ rattan agency]

[Rattan Agency]

Business Plan

(c) Ade Cahyat 2003 2

Investment Summary


Vision, Mission andObjectives


Corporate Mission

“To develop and sell consistently high value and eco-friendly rattan products and to recognize that

commitment to social responsibility is a long term competitive advantage”


Company Aims and Objectives

1. SEP is committed to pursuing commercial rattan opportunities

2. SEP will co-operate with its partner, P3R to obtain its supply of resources from sustainably managed rattan gardens

3. SEP will reward honesty, hard work and achievement, placing a strong emphasis on unity, professionalism and respect for others

4. SEP will work closely with its partner, P3R, on research and development projects to optimise the cost of its rattan products, to reduce dangerous chemical residues produced by existing processing techniques and to raise average product quality

5. SEP is committed to becoming an asset of the rattan farmers and craftsmen by providing long-term corporate shareholding opportunities once sustained profitability has been secured


SEP PositioningWhat role are we playing in the industry?

Resource BaseForest Land Garden

Harvesting

Local VillageCollector

Local LargeTrader

Furniture Factory

Exporter

Samarinda Trader

Rattan Product Trader

Java/Bali Product Trader

(Processing)

ProcessingSemi-Finished

Manufacturing

End User

Distribution

JavaTrader

Local Craft Maker & Subsistent Use

Home Industry

Ikea

Overseas ConsumerDomestic Consumer

SEPRattan Farmer


SEP Positioning

SEP will assume the role of processor, aggregator, marketer and distributor and buy directly from farmers and sell directly to furniture manufacturers and craftsmen. Initially SEP will purchase wet rattan directly from farmers, process

(wash, smoke and dry) the wet rattan and sell the dry rattan directly to domestic and oversea customers.

SEP will also process/split dry rattan into core and peel (semi-finished rattan) and sell it to craftsmen and furniture makers.

In the long term, SEP will contract craftsmen to make and sell crafts to rattan product traders.

What role are we playing in the industry?


StakeholdersWho has a stake in the company?

Financial

InstitutionsPartners/ Advisors

Contractors

Traders Employees

Customers

Farmers

Media

Local Communitie

s

Funders

Government

SHK

P3R

SEP

Major stake-holders

Minor influences

Direct link

In-direct link

Potential shareholders


Stakeholders

There are many stakeholders in SEP aside from the obvious customers and suppliers

Some stakeholders such as customers and the farmer suppliers have direct contact with the company and have a high degree of influence on the future success of the company

Others have in-direct contact and either relatively high influence on SEP such as funders and NGO partners, while some such as local financial institutions are of lower importance but still warrant consideration

Who has a stake in the company?


Marketing Plan


Product OverviewWhat is rattan?

Unpeeled rattan

Rattan garden harvesting



Rattan crafts Rattan furniture



Baskets

Lampit

Stool

Hanging chair


Product Overview

Rattans are climbing palms that grow throughout the Southeast Asian region, with 160 species on the island of Borneo.

Since the plant needs trees to survive, rattan products offer significant advantages over timber products in terms of sustainable development in the Indonesian forest.

Rattan can be cultivated or harvested from the wild. Cultivated rattan (from “rattan gardens”) accounts for less than 15% of total Indonesian commercial production but 100% of SEP’s product line.

Raw (wet) rattan is washed, dried, and smoked to produce round rattan (dry). This is then put through a machine to produce rattan core and peel, which are called semi-finished products.

Rattan’s finished products include furniture, baskets, lampit (mats), and wicker.

What is rattan?


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Rattan Soap Rice

Situation Analysis

Unit Price of Wet Rattan (per kg) Compared with Soap (per piece) and Rice (per kg)

Market Size and Trends

Export ban on round Rattan lifted

Indonesia bans the export of raw & semi-finished rattan


Situation Analysis

Comparing rattan prices with those of other basic goods like soap and rice, rattan prices are decreasing.

The price of rattan is not rising as fast as inflation, and has been falling in real terms for more than ten years.

Farmers are forced to move from rattan production to other businesses that currently exist on their farms with higher yielding products (timber, palm-oil, etc.) to provide for their basic needs.



Situation AnalysisMarket Size and Trends

Wood

OtherFurniture

Basket 16%

Rattan

OtherLampit

2002 Indonesian Furniture Exports by Volume

77%

6%

16%

4%0.5%

79%

Rattan Exports

All Furniture Exports

*Rattan includes all finished products


Situation Analysis

Furniture is the major use for rattan and accounts for nearly 80% of total rattan-based product exports from Indonesia.

Baskets are the second most important finished product while Lampit mats are relatively insignificant.

SEP will focus on furniture manufacturers as the major customer segment to align itself with the industry, and will consider focusing its craft production on baskets.



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done

sian

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nitu

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xpor

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$m

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Rattan Wood Bamboo Metal Plastic




Indonesian Furniture Export Value (US $m)


Indonesian Economic Crisis


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Rattan Wood Bamboo Metal Plastic


Unit Value of Indonesian Export Furniture




Indonesian Economic Crisis


Situation Analysis

Rattan and wood products are the most important raw materials for Indonesian furniture in both volume and value. Rattan led the market until 1994, but since then, wood has been the market leader and the gap between the two has widened.

The majority of Indonesian furniture that is produced is exported, so this sector plays a dominant role in defining market opportunities for unfinished and semi-finished rattan products.

Both rattan and wood furniture exports are growing slowly on an annual basis.

There is a strong correlation between the volume and value of wood and rattan-based furniture Indonesian exports.

The unit price of rattan has been declining since 1997.

Compared with the unit price of wood, rattan prices are much more sensitive to market forces.



Situation Analysis

Farmer

• Own multiple rattan gardens• Farmers own on average

2.25ha of Sega and can produce 4 wet tonnes every 36 months

• Plant and maintain • Decide what rattan species

to plant based on land• Big & small harvests• Hire helpers to harvest

rattan (pay out 50% of revenue)

• Ask traders for price and quantity before harvest to decide when/how much to harvest

• Timing of pmt by collector depend on market

• Have other sources income (breakdown unclear)

LocalCollector

• Buy rattan from farmers• Wash, smoke and dry

rattan• Transport rattan to

large local traders• Compare prices of

Large Traders and sell to highest bid (limited bargaining power)

• Need to sell all inventory Transport via boat or truck

• Sell 1 - 4 tonnes/trip• Freq. of trading

depends on distance from Large Traders

• Buy in mix• Paid 20% on delivery

and 80% 2 wks later (may make a trip just for money collection)

Large Traders

• Buy rattan from Local collectors or farmers

• Wash, smoke and dry rattan

• Sometimes re-processing is needed if upstream processing has been poor

• Transport and sell rattan to Samarinda traders

• Use combination of truck and boat for transportation

• Frequency of trading depends on distance from Samarinda

• Don’t keep track of how long inventory has been there

Samarinda Traders

• 6 Samarinda traders• Buy based on

warehouse capacity• Sometimes do

processing

Some disintermediation

Current Local Value-chain


Situation Analysis

LocalCollectors

LargeTraders

SamarindaTraders

Rp. 700-9002,200t wet

Rp. 2,6001,270t dry

Rp. 2,200550t dry

Rp. 2,6001,730t dry

Rp. 3,930

3,000t dry5,

500t

wet

ProcessingHolding

Processing

Rp. 500-7003,300t wet

Price per kgMonthly volume

Average Sega Price in Surabaya per kg

LocalCraft Makers

SubsistentUses

Farmers

Rp. 1,000<4%



Situation Analysis

The current local value-chain begins with the farmers who command a price of between Rp. 500-900 per kg for wet round rattan

Approximately 3,300 tonnes is washed, smoked and dried through small local processing units per month while around 2,200 tonnes pass through large local traders

Local traders sell either to larger local traders or direct to the Samarinda traders

The street price for dry round rattan per kg in Surabaya is approximately Rp. 3,930

Farmers also sell wet round rattan to local craft makers at Rp. 1,000 per kg. Farmers also use the rattan for their own use. However, the volume is small and less than 4% of the harvest volume.



Situation AnalysisIndustry Distribution Chain

Resource BaseForest Land Garden

HarvestingRattan Farmer

Local VillageCollector

Local LargeTrader

Furniture Factory

Exporter

Samarinda Trader

Rattan Product Trader

Java/Bali Product Trader

(Processing)

ProcessingSemi-Finished

Manufacturing

End User

Distribution

Java Trader

Local Craft Maker & Subsistent Use

Home Industry

Ikea

Overseas Consumer Domestic Consumer


Situation Analysis

Raw rattan can be harvested from “rattan garden” plantations as well as natural forests

Rattan is processed by either local village collectors or local large traders

The chain between harvest and manufacturing may involve as many as four actors mainly due to the long distance and high transportation costs between the supply to customer base

Java traders sell dry rattan to home-based and large furniture manufacturing companies in Java as well as overseas customers

Trade to overseas customers may also involve export specialists

Farmers also sell wet round rattan and/or semi-finished rattan to local craft makers. They also farm rattan for subsistent use.

Industry Distribution Chain


Product OverviewWhat products are we selling and when?

Product Advantages Disadvantages

Round Sega Rattan

(Rp. 3,777 in Surabaya)

Can be harvested year roundHigh quality – strongMature sega needed for lampit

More difficult to package (ship)

Semi-finished Sega Rattan

(Rp. 8,500-13,500 in Surabaya)

Easy to package (ship)Clean (lambang has a lot of surface hair,

which sega does not)Diameter flexibility

Competes against lambang rattan (jelayan) produced in Sulawesi which is flexible, absorbs color, cheaper

Core competes with Red PulutDifficult to produce consistent color when

painted

Round Red Pulut Rattan

(Rp. 19,000-21,000 in Surabaya)

Kedang Pahu only supplierNatural color (filtrit must be painted)Strong and durableEasier to package than round sega

Competes with filtrit (same size)High costLimited proven marketNo technology to semi-finish

Crafts Possible use for low quality sega & jahabHandmadeAchieves social mission through employment

opportunities

Difficult to compete with mass productionMore difficult to package (ship)

Eco Labeled goods SEP the only supplier of eco-rattan Difficult FSC certification processUnclear understanding of customersUnclear value to customers

Other Rattan Garden Products

Medicinal plants, cosmetics ingredients and other natural herbs could be high margin

Unclear products and customers

Sh

ort

Te

rmL

on

g T

erm

Products at launch


Product Overview

Short Term

Round Sega is advantageous because of its strength, quality, and abundance in the Kedang Pahu area.

Semi-Finished Sega is easy to pack and offers a much higher price in Surabaya. SEP will focus on producing as much of this product as possible given capacity constraints in the short term.

Round Red Pulut is only produced in Kedang Pahu, so SEP will be one of the few suppliers. The product is known for its high quality and natural color. However, red pulut cannot produce semi-finished products due to a lack of technology, so the potential to add future value is low unless SEP can design a process.

What products are we selling and when?


Product Overview

Mid Term

Crafts will be an important product for SEP after two years. Crafts offer the advantage of a use for low quality sega and jahab and are handmade, making the products unique to SEP. The downside is that crafts like baskets are more expensive to ship and are disadvantaged when directly competing with low cost mass production.

Eco-Labeling will offer SEP a unique opportunity with rattan. As the only certified supplier, SEP will be able to differentiate its rattan. However, the value associated with this product relative to its costs and the possible customers remain unclear.

Long Term

Other products that grow in rattan gardens such as medicinal plants, cosmetics ingredients and other natural herbs could be a possibility for SEP in the long term, but the variety and value of these products still needs to be researched.

What products are we selling and when?


CompetitionCompetitors and Profiles

Attribute Local Traders Large Traders

Strengths Existing relationship Experience Local Pays cash Can buy from non-P3R members

Volume Existing relationship Experience Local Pays cash Can buy from non-P3R members

Weaknesses Competitive price Cash flow Limited inventory/processing capacity Depend on seasonality for river transportation Weak relationship with farmers (no

transportation assistance) Buy and sell in mix (low focus on quality) Low focus on business Limited knowledge on customers and market

trend Poor tracking of data No contracts create uncertainty

Limited supply choice Limited knowledge on customers and market

trends Weak relationship with farmers (no

transportation assistance) No contracts (higher risk) Poor tracking of data No customer loyalty


CompetitionCompetitors and Profiles

Attribute Samarinda Traders Surabaya

Traders

Strengths Volume Existing relationship Experience Can buy from non-P3R members Warehouse in Samarinda Existing relationship w/ transporters Close to the sea as a main port

Closer to the customer Do not manage transportation across Java sea Lower labour cost, but higher skill Sufficient energy sources Ability to mass produce and replicate designs Ability to buy from multiple geographic

suppliers Close to the main port More product diversity Easy to deliver to customer Cheap machinery maintenance due to easy

access to spare parts

Weaknesses Weak customer service Inconsistent product Lack of quality control Lack of business ethic Limited knowledge on customers and market

trends Inconsistent supply volume Lack of rattan focus due to diverse product lines

Far away from up resources area (lack of quality control)

Limited skills to make cultural products Higher material cost (due limited vertical

integration) Lack of business ethics


Competition

Local Traders and Large Local Traders present similar challenges in terms of competitors. Each has experience and existing relationships in Kedang Pahu. With an organized and coordinated approach, SEP can take advantage of their cash flow problems, weak relationships, high uncertainty, and low focus on the rattan business.

SEP will also compete with Samarinda Traders. Although these competitors offer greater volume than local traders and stronger existing relationships with transportation companies, they are generally inconsistent in product quality and supply volume, offer limited customer service, and have little knowledge of their customers.

Competitors and Profiles


Competition

SEP’s primary competitors are the Surabaya Traders. These traders have experience in high volume, are close in proximity to their customers, and can purchase from suppliers from different geographic locations (which is a significant advantage over SEP). SEP will need to capitalize on these competitors’ lack of quality control due to distance from production areas, high material costs due to lack of vertical integration, and lack of customer knowledge.

Competitors and Profiles


Customer Targeting

High

HighLow

IKEA

Small-to-Medium SizedFurniture Makers

Low Quality Furniture Co.

High QualityFurniture Co.

Attractiveness

Eas

e of

E

ngag

emen

t

1

3

2

4

Which will be our first target customer segment?


Customer Targeting

Assessing market attractiveness and ease of engagement suggests that for initial revenue generation purposes, the best customer targets are the small-to-medium sized furniture manufacturing businesses

High quality large furniture manufacturers and IKEA are attractive but are harder to engage in the early stages of company operation since volume, quality and price stability will be hard to achieve before the company reaches critical mass

Low quality furniture manufacturers are easier to engage since they are less demanding on product quality but are likely to squeeze prices as low as possible

Which will be our first target customer segment?


Customer Roll-out PlanHow will our customer mix change over time?

Year

Small-Mediumsized

Low Quality

High Quality

IKEA

Relationshipdevelopment

Bulk sales

Customer Roll-out plan Sales Mix

100%

Customer

Year

0%

Small-to-Medium

Low Quality

Ikea

High Quality

1 2 3 1 2 3


Customer Roll-out Plan

The first customers are the small-to-medium sized furniture manufacturers. These customers buy in relatively low volumes and will provide an initial revenue flow.

As volume grows, low and high quality large furniture manufacturers will be targeted to shift larger volumes of rattan and drive revenue growth to prove the business model.

Once sufficient quality in supply can be guaranteed, SEP will aggressively target high quality large furniture manufacturers as the primary revenue stream.

IKEA will be a focus of relationship development from company inception but revenue from this customer is unlikely to be generated until company operations are stable and sustainable.

How will our customer mix change over time?


Customer Roll-out PlanHow will our customer mix change over time in terms of product quality?

Low Quality Large Low Quality LargeLow Quality Large Low Quality Large

Small to Medium

Small to Medium & IKEA Suppliers

IKEA SuppliersIKEA Suppliers

Small to Medium

Small to Medium & IKEA Suppliers

High Quality Large High Quality Large

Phase 1 Phase 2 Phase 3 Long Term

Vo

lum

e

Low Quality Medium Quality High Quality

High

Low


Customer Roll-out Plan

In phase 1, SEP will sell medium to high quality product to small and medium furniture manufacturers, and lower quality product to low quality furniture manufacturers

In phase 2, as quality mix improves and supply volume grows SEP will focus on developing relationships with IKEA and its suppliers, and sell them medium to high quality products.

In phase 3, as quality mix and supply volume stablizes, SEP will focus on developing relationships with high quality large furniture manufacturers and sell them high quality products. At the same time, SEP will sell to IKEA suppliers medium quality products at a reduced price.

In the long term, SEP will focus on selling high quality product to high quality large furniture manufacturers, and medium quality product to IKEA suppliers but with less emphasis and low quality products to low quality furniture manufacturers.

How will our customer mix change over time in terms of product quality?


Customer Value PropositionWhy will customer segments want to buy from us?

Possible Value Proposition

Selected attributes Value Proposition

Ikea

FSC labeling, stable quality, low residue, legal, on-time, long term contracting, P3R visit, consistency

FSC labeling Consistency Supplier Relationship Low residue?

SEP provides a sustainably harvested rattan product of consistent quality and volume and low chemical residue to its valued clients

High Quality

Stable supply, quality, on-time delivery, long-term contracting, co-branding, consistency

Co-branding Consistency Stable supply High quality

SEP can provide a stable supply of consistently high quality rattan and the co-branding opportunities that stem from association with an FSC certified producer

Low Quality

Volume, on-time delivery, consistency

Volume Competitive price

SEP provides stable rattan volumes at competitive prices

Small-to-Medium Sized

Quality, FSC labeling, precut & prepared, consistency

FSC labeling Flexibility Co-branding

SEP is the only flexible, FSC certified provider of rattan that can help differentiate furniture products through co-branding


Customer Value Proposition

Customer value-propositions vary depending on the specific requirements of customer segments

The most important target segment, which is the high quality furniture supplier, values consistent supply in terms of quality and volume as well as the potential co-branding opportunities that exist when sourcing from an FSC certified supplier

IKEA has specifically identified a low chemical residue as important to its purchasing of SEP products

Why will customer segments want to buy from us?


Sustainable Competitive AdvantageHow can we sustain a differentiated position?

Consistency of Product

Cus

tom

er S

ervi

ceLow High

High Competitors will rely on price

to undermine SEP’s market position

SEP will create a sustainable competitive advantage by:

1. Producing a rattan product of consistent quality and volume

2. Provide high levels of customer service 1. On-time and accurate

delivery 2. Stable contracts3. Potential co-branding

opportunities created by FSC labeling and socially responsible production

Price-basedcompetitors

SEP


Sustainable Competitive Advantage

The current basis of competition in the supply of rattan in Surabaya is price and quality

SEP will provide high quality products at market competitive prices to match existing market demand

SEP will differentiate itself by improving client customer service levels and by providing a consistency of product

SEP has an advantage in consistency of supply due to its close relationship with its suppliers (P3R farmers) and its vertical integration across the distribution chain from Kedang Pahu to Surabaya

This differentiated position will help SEP first capture and then grow market share due to a stronger value proposition than its competitors

How can we sustain a differentiated position?


PricingWhat is our pricing strategy?

Costs (per kg) Round Sega Semi-Finished Sega Red Pulut

Purchase 900 1530 dry 900 1530 dry 6500 13,400

Wash 150 250 dry 150 250 dry 150 300 dry

Dry/Smoke 150 250 dry 150 250 dry 150 300 dry

Transport (Kedang Pahu – Boat Point – Samarinda)

150 150 150

Transport (Ssmarinda-Surabaya)

600 ship + 75 fee = 675 600 ship + 75 fee = 675 600 ship + 155 fee = 755

Transport (Surabaya-Customers)

100 100 100

Load/Unload (7 times) 105 105 105

Inventory 100 100 200

Semi Finish none 625 + 550 + 300 +150 + 275 = 1900 2780

none

Sorting 100 100 100

Overhead Cost 200 200 200

Total Rp. 3,460 3,900 Rp. 6,240 11,000 Rp. 15,610 19,200


Pricing

SEP will have an average cost of Rp.3,460 per kg for round Sega, Rp.6,240 per kg for semi-finished Sega and Rp. 15,610 per kg for Red Pulut.

Taking competitive considerations into account, SEP will aim to achieve an average price of Rp.3,897 per kg across its raw Sega product lines

SEP has considerable pricing flexibility for semi-finished products and will be able to support an average price of Rp.11,000 per kg

Red-Pulut is a niche opportunity for SEP, so the company will be able to support an average price of Rp.19,200 per kg and will still have significant pricing flexibility

What is our pricing strategy?


PricingWhat is our pricing strategy with respect to quality?

Kubu 1 Kubu 2 Soft 1 Soft 2 Tiger

Typical Production Mix

27% 42% 22% 3% 6%

Current Industry Price

4,150 4,150 3,800 3,500 2,000

SEP Price 4,200 4,000 3,900 3,500 2,000

Average SEP Price: Rp.3,897

Surabaya Prices for Round Sega by Quality Category


Pricing

SEP will price higher quality rattan at a premium to its customers

Kubu rattan (1 and 2) will average Rp.4,080 per kg – a discount of Rp.100 per kg over current industry prices

Soft rattan will be priced slightly higher than the industry average to reflect the enhanced value that consistent quality and stability of supply will bring to customers

Tiger rattan will be priced at Rp.2,000 per kg with the aim of clearing the rattan from the warehouse in Kedang Pahu as quickly as possible

As the company grows and potentially evolves its product line to include rattan crafts, it will phase out Tiger sales and channel Tiger into crafts production

What is our pricing strategy with respect to quality?


PricingWhat is our discount or cash-back strategy for specific customerswith respect to volume?

Dis

coun

t

High

None

Volume per customer per month

Low Quality

High Quality

IKEA

Small-to-medium

High discount to large volume low quality

purchasers

Very little discount for low volume

customers

SEP will discount based on who the

customer is and how much they buy


Pricing

SEP will discount to incentivize volume purchases and long-term contracts to stabilize demand volatility

High quality rattan will be discounted less than low quality to reflect the higher value placed on quality and FSC certification of this customer segment

Low quality rattan furniture manufacturers that purchase in high volumes will receive the largest discounts as SEP will strive to sell its low quality rattan in high volumes to a small number of regular customers

Small-to-medium sized furniture manufacturers will receive lower levels of discounts due to their higher cost of sales but will be encouraged to buy in large volumes if appropriate

What is our discount or cash-back strategy for specific customerswith respect to volume?


Distribution Channel DesignHow do we get our products to market?

SamarindaKadang Pahu

Customer Channel

IKEA Direct using executive management & SHK business development officer

High-quality large furniture manufacturers

Direct using executive management & SHK business development officer

Low-quality large furniture manufacturers

Direct using the sales director

Small-to-medium sized manufacturers

Direct using Surabaya warehouse

Crafts Direct sales to crafts traders in Kalimantan and Surabaya


Distribution Channel Design

SEP executive management will work directly to develop relationship with and sell to IKEA and its suppliers

SEP will hire or contract sales agents to develop relationships with and sell to high and low quality furniture manufacturers if the initial direct sales strategy proves to be ineffective

SEP sales agent based in Surabaya warehouse will directly sell to small and medium sized furniture manufacturers

SEP agent will directly sell to craftsmen in Kalimantan and Surabaya?

How do we get our products to market?


Promotional StrategyHow do we get our message out to customers?

Vehicle Ikea High Quality Low QualitySmall-to-medium

Journals x x

Exhibitions x x

Sales People x x x

Local Paper ½ ½ ½

Word of Mouth x x x

Radio

Website x

Objectives Say “hello” Get people to buy Raise SEP awareness

Consistent with the Value Proposition Push consistency of supply and quality Promote FSC/green-ness/social

responsibility Use Red Pulut to drive sales & awareness On time delivery


Promotional Strategy

The major aims of the promotional efforts in the early stages of company operation are to support market entry and rapidly raise awareness of SEP operations

The most important messaging channel for SEP will be the sales agents channel

Exhibitions will be useful to show-case SEP products but should use red-pulut as a leading attraction in order to differentiate the company from other rattan traders

How do we get our message out to customers?


Five Year Sales ForecastsHow much do we expect to sell?

Forecast Value of Sales (m Rp.)

0

1,000

2,000

3,000

4,000

5,000

6,000

Year 1 Year 2 Year 3 Year 4 Year 5

Yea

rly s

ales

fore

cast

(m

Rp.

)

Semi-finished ProductsRed-PulutSega TigerSega Soft IISega Soft ISega Kubu IISega Kubu I


Five Year Sales ForecastsHow much do we expect to sell?

Forecast Volume of Sales (tonnes)

0

100

200

300

400

500

600

700

Year 1 Year 2 Year 3 Year 4 Year 5

Yea

rly s

ales

fore

cast

(to

nnes

)

Semi-finished productsRed-PulutSega TigerSega Soft IISega Soft ISega Kubu IISega Kubu I


Total sales volume in the first year of operation is expected to be 18 tonnes, generating Rp.94m in sales

In year 5 SEP expects to be handling 660 tonnes per year and generating Rp.5.5bn in sales

SEP forecasts that it will maintain a consistent product mix over the first five years of operation since product mix can not be changed due to natural plant yield

SEP limits five year growth opportunities due to supply-side constraints on P3R farmer membership, logistical costs and desired management overhead

The low-value products, Tiger and Soft II will be sold directly to Samarinda traders in Kedang Pahu since the marginal cost of transportation to Surabaya per kg is greater than the price for which they can be sold

How much do we expect to sell?Five Year Sales Forecasts


Marketing Plan Summary

Market Trends

Although the market for rattan is growing slightly in volume, the unit price is not rising as fast as other basic need goods prices.

The major finished product use for rattan is furniture (it accounts for about 80% of the market by volume), so rattan is highly dependent on the furniture industry.

Customers

SEP’s initial target customers are the low quality and small-to-medium sized furniture makers based in Surabaya and other Java cities.

The customer mix will evolve as the company matures with IKEA and high quality furniture manufacturers being the long-term focus.

What are the major marketing take-aways?


Marketing Plan Summary

Value Proposition

SEP will offer a value proposition tailored to each customer incorporating consistency, high quality, possible co-branding and environmental sustainability benefits.

Market Tactics

Semi-finished product volume will be maximized to capacity constraints as they yield high marginal profits.

SEP will sell directly to customers in Surabaya as far as possible and ideally sell based on complete container units.

Pricing will be based on product and grade. The sales team will be the most important marketing

communications channel.

What are the major marketing take-aways?

[ rattan agency]

Documents

rattan farmers

dry rattan

wet rattan

securedc ade cahyat

rattan product traders

marketing planc ade

investment summaryc

ecofriendly rattan products