dried mango and mango juice production

CHAPTER 1

THE RESEARCH PROBLEM

Introduction

This paper is to present a proposal which seeks to conduct a feasibility

study for a dried mango and mango juice production in Bansalan, Davao del Sur.

Mangoes are known as “the king of all fruits”. Beyond the sweet, luscious

taste of mangoes, they also contain an abundance of vitamins, minerals and

antioxidants that assure your optimum health. The name “mango” is derived from

the word “mangkay” or “man-gay”, when the Portugese traders settled in Western

India, they adopted the name as “Manga”. Mangoes are bursting with protective

nutrients. The vitamin content depends upon the variety and maturity of the fruit,

when the mango is green the amount of vitamin C is higher, as it ripens the

amount of beta carotene (vitamin A) increases. This is the reason why there are

a lot of products made out of mango in the market today that is constantly

arising. Among those products were the very famous dried mangoes and mango

juice.

Dried mangoes is considered as the best nutritious and convenient snack

around the world, very convenient, that made Cebu City more popular because

of distributing the finest dried mangoes around the globe. While it is a better

alternative to sugar candy and other junk foods, dried fruit still be consumed in

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moderation because it contains much higher amounts of sugar and calories than

regular fruit.

Mango juice contains a number of valuable nutrients. The naturally

fulfilling fruit beverage also acts as a beneficial dietary food item that aids in

normal bodily function and the prevention of health risks. Like many other natural

fruit drinks, mango juice, sometimes referred to as mango nectar, packs a variety

of both vitamins and minerals. Each cup of mango juice aids a more than feasible

source of both vitamins A and C to any diet. Without sugars, pure mango nectar

contains about 30 grams of sugary carbohydrates per cup.

Statement of the problem

This study aimed to determine the feasibility of opening a business engaging

Dried Mango and Mango Juice production

The following questions were answered after the completion of the research

1. What area can be identified as the market area of the proposed

dried mango and mango juice production?

2. What is the customer profile of the market area of the proposed

business such as population size, consumer spending and others?

3. Who are the competitors of the proposed project and how they are

doing?

4. Which of the preferred locations is the most desirable one based on

the proposed project site selection guidelines?

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5. Will the proposed project be able to gain profit with the proposed

pricing, operation hours and the estimated controllable and

uncontrollable expenses?

Objectives of the Study

The objective of the study aim to:

1. To determine the market area of the proposed dried mango and

mango juice production.

2. To determine the customer profile of the market area of the

proposed business.

3. To determine the competitors of the proposed project and how they

are doing.

4. To determine which location is the most desirable one.

5. To determine if the proposed project be able to gain profit.

Assumptions of the Study

In view of the successful entry of dried mango and mango juice production

into Philippine Fruits International Corporation, an assumption can be made that

the dried mango and mango juice production in Bansalan, Davao del Sur can be

successful as well.

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Significance of the Study

The result of the study will be significant to the following

To the Dried Mango and Mango Juice Industry- this study helps to

determine the country’s economic and nutritional development. It also

helps increase the dried mango exports.

To the marketers- it largely contributes the study in order for them to know

the importance and benefits of dried mangoes and mango juice and

determine the feasibility of the product.

To the consumers/customer- it helps them buy the products in a less effort

and less expenses for their fare. It helps them to know the benefits of the

said project.

Scope and Limitation of the Study

The study is limited to determine the feasibility of Dried Mango and Mango

Juice Production within Bansalan and Digos City area only. This study focuses

the marketability of the product to the Wholesalers/Retailers, Hotels, Restaurants

and Bakeshops within Bansalan and Digos City.

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CHAPTER II

REVIEW OF RELATED LITERATURE

According to Food and Agriculture Organization (FAO), Philippines is one

of the top 10 producers of mango in the world. The Philippines claim to have the

world’s sweetest mango and that is the Philippine Carabao Mango. Thus,

Philippine mango, either fresh or processed, has been in demand in the export

market.

Tirtha (1998) had described that pulp of mango is used to cure diabetes

and hypertension. Kirti Kumar and Baju (1998) also states that the ripe mango

fruit is considered as a laxative drug. This only implies that dried mangoes and

mango juice is a very nutritious product which can compete locally and even in

international market.

“A company would need to spend millions of pesos for the construction of

the plant. Purchase of equipment is an even bigger cost item,” Siao said. On the

other hand, your investment will surely be paid off after a year because dried

mangoes and mango juice are in demand locally and even in international

market.

Before starting a business, you have to assure that the customer service

standards are always implemented with each customer, not just the clients or the

biggest accounts. Include customer service standards in your job descriptions

and performance reviews, then enforce and measure those standards. The

reputation of your business relies heavily on the service your team provides.

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CHAPTER III

METHODOLOGY

The nature of the research determines that both primarily research and

secondary research should be conducted to collect information needed for the

said study. Observational research method will be used to collect the information

concerning customer’s spending pattern. In view of the different research

methods, this chapter will include information about how research subjects will be

selected, what data collect instrument will be used to conduct the survey and the

observational research, what procedures will be followed to collect the data, and

what sample selection criteria will be applied, and how the collected data will be

analyzed. Limitations of method, sample and procedures will also be addressed

at the end of the discussion.

Market Area

Each economic activity has a location, but the various demands (raw

materials, labor, parts, services, etc.) and flows each location generates also

have a spatial dimension called a market area. A market area is the surface over

which a demand or supply offered at a specific location is expressed. For a

factory it includes the areas to where its products are shipped; for a retail store it

is the tributary area from which it draws its customers (Dr. Jean-Paul Rodrigue).

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For an established dried mango and mango juice business, it is not hard

to get market area information. Surveys can be made to gather information about

where the customers are from, and plots on the maps can be made to give a

clear picture of the market area or trade area. Transportation is particularly

important in market area analysis because it implies on the location of the

activities as well as their accessibility. The size of a market area is a function of

its market threshold and range. On the other hand, it is hard to predict the market

area of a proposed dried mango and mango juice because no specific

information as to where the customers purchased their product is available. But

this information can be collected by gathering such information from competitors’

customer interview, mailed-back questionnaire from competitive facilities.

Now that you have an understanding of where your small business stands,

it is time to take all the information you have collected and use it to segment your

market. Market segmentation is the process of identifying and analyzing the

buyers in a product market with similar characteristics. Segmentation allows to

match your products with buyers’ requirements. Since you have already identified

and analyzed your buyers, you need to take it a step further. You would want to

examine the differences among your buyers and categorize them into subgroups

of the total market. You can break down your market characteristics using three

major sub groups:

1. Demographic Characteristics including age, sex, location, income,

education, stage in life cycle, social class, occupation, and religion race.

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2. Psychological Characteristics including their personality and lifestyle.

3. Geographic Characteristics including rural, urban, suburban, religion,

climate, city size, and population density (Patt, 2010).

However, in this study, market area can be easily identified since the

proposed site will be located in Poblacion Uno, Bansalan, Davao del Sur. The

following discussion will first identify the market area of dried mango and mango

juice production and analyze the characteristics of the market area, and then

describe the future development of the market area of the proposed dried mango

and mango juice production.

A. Market Area Identification

In today’s world the buyers has unlimited choices of spending his/her money

on a wide range of products and services. These choices are possible due to

global competition, rapid change, and needs and wants of buyers. For a small

business to have a complete knowledge of the market, it is essential for them to

perform a market analysis (Wiley, 2014). Through market analysis, a small

business can identify business opportunities, evaluate existing and potential

competition, guide the choice of who they should target, and indicate the

customer requirements that will satisfy their marketing position strategy.

The site of (15m x 25m) or 375 square meter dried mango and mango juice

production is located in Poblacion Uno, Bansalan, Davao del Sur. It is situated a

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few meters from the Public Market and a few kilometers away from Digos City,

about 20-25 minutes travel from the site. Therefore, it is very accessible for the

wholesalers/retailers , restaurants, and bakeshops of Bansalan and Digos City

and even from the nearby Hotels which is included in my target market.

B. Population Profile and Consumer Spending Pattern

After determining the market area of the dried mango and mango juice

production, the following paragraphs will look at the population profile and

consumer.

Demographic profile of the wholesalers/retailers, bakeshops, hotels,

restaurants, and pasalubong centers on the city and municipality is essential in

determining whether or not to open a dried mango and mango juice production in

Bansalan. The demographic profile includes the total population of the registered

business in the market area in this way it reveals the information needed by any

business person to make their decision. The researcher focuses in the most

important aspects of the demographic characteristics, the income distribution and

also discusses other related demographic feature.

Based on the city licensing division of Digos City and municipal licensing

division of Bansalan, there were a total of 36 bakeshops, 6 hotels, 25

wholesalers/retailers, 5 restaurants, and 41 school canteens as of 2014. This is a

1% higher than in 2013, 2% higher than in 2012, and 1 % lower in 2011 and

2010.

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In this study, population profile and consumer money availability will be

collected mainly through surveys due to lack of such statistics from the

government.

Site Selection Analysis

In finding a location for a dried mango and mango juice production, a site

selection criteria checklist is structured to help get the right data and the right

analysis when selecting a site.

After identifying the market area, population characteristic and consumer

spending pattern, the next step to be made is to decide which specific placed the

proposed project should be located. Site selection indicates the practice of new

facility location, both for business and government. Site selection involves

measuring the needs of a new project against the merits of potential locations.

Competition Analysis

In Competition analysis a survey questionnaire for competitor is structured

to help the proponent get the right data and the right information about their

business.

The main goals of a competition analysis are to understand who your

competitors are, what strategies they are using and have planned, how

competitors might react to your business actions, and how to influence

competitor behaviour to your advantage. A lot of the time, this data is easily

accessible so you will need to dig deep into product brochures, patent

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applications, the services they offer and much more. Competition analysis is not

just randomly choosing the business, and has a rough idea of what the

competitors are like, but to be carefully choosing the direct and indirect

competitors and analyse all the aspects of their business and through giving

them survey questionnaire for supply or a straight interview with the manager or

the owner and with some of the employees are one of the approach to obtain

some information about their business and their business plan.

There are benefits we will get on why we should do a competition

analysis. And these are the following “Can assist your management with

developing marketing strategies, Can identify opportunities in the market that

are under-served, Can help you take advantage of competitors weaknesses to

grow market share, Can allow you to make better informed decisions about your

strategy and ensure you can create sustainable competitive advantages and Can

help you with forecasting future investments”.

Pro Forma Financial Statement

After all the researches have been made, the final step of the feasibility

study comes to the Pro Forma Financial Statement. The term Pro Forma most

often used to describe a practice or document that is provided as a courtesy

and/or satisfies minimum requirements. The pro forma statement presents the

estimated projected revenues and expenses for a proposed or existing business

over a certain period of time in the future. In utilizing a pro forma financial

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statement is to specify revenue generating criteria that includes the proposed

prices, operating hours, customer volumes, and etc basis on

operating conditions that can be used to calculate potential revenue.

Pro forma statements are used for a full range of financial analysis and

should be created at the beginning of every financial planning cycle or whenever

an organization is considering a step that could have a significant financial

impact. They are often examined when a company is contemplating a merger,

new financing (debt, stock, institutional subsidy, or external grant), capital

investment in plant or other fixed assets, expanding production, launching a new

product line, or any other situation with important financial implications. A

university press most often uses pro forma statements in connection with its

annual operating budget and long-term financial planning process. Budgets and

multi-year financial plans usually contain pro forma income statements and

balance sheets to summarize financial performance for given time periods and

financial conditions for given dates.

In business, pro forma financial statements are prepared in advance of a

planned transaction, such as a merger, an acquisition, a new capital investment,

or a change in capital structure such as incurrence of new debt or issuance

of stock. The pro forma models the anticipated results of the transaction, with

particular emphasis on the projected cash flows, net revenues and (for taxable

entities) taxes. Consequently, pro forma statements summarize the projected

future status of a company, based on the current financial statements. Pro

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http://en.wikipedia.org/wiki/Cash_flows

http://en.wikipedia.org/wiki/Stock

http://en.wikipedia.org/wiki/Debt

http://en.wikipedia.org/wiki/Financial_transaction

http://en.wikipedia.org/wiki/Financial_statement

http://en.wikipedia.org/wiki/Business

forma figures should be clearly labelled as such and the reason for any deviation

from reported past figures clearly explained.

Subject Selection and Interview

Observational research and a survey questionnaire a tool to help me more

collect data and information about their business will be used to conduct the

competition and site selection research. Features of the projected location site

will be evaluated by in a view of the items needed on the proposed business.

Direct and indirect competitors will be identified by an observational

research and a survey is conducted to the competitors and it includes the years

they have been in the business, their current buyers, quantity or products they

produce per day and their rejected orders.

Consumer spending pattern survey was conducted to collect the

information needed for the study. The subjects of the study will be the

retailers/wholesalers, bakeshops, hotels, restaurants and school canteens of

Bansalan and Digos City.

The limitations of the research include the following:

1. The way that the survey was conducted, which is researcher

gives out the survey, stand by the selected subject and wait until

the survey is completed might make the subject very conscious

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of themselves. The subject might choose or put higher quantity

of products they buy.

2. Due to the fact that the researcher will stand by to wait until the

selected subject finish their survey, asking about the income of

their business will make the subject be more aware of security

issue when revealing their business income. As a result no

business income is being asked in the questionnaire, and no

such information is being collected.

Instrumentation

Bearing in mind the factors for a useful business plan, Site selection

criteria checklist, a survey questionnaire will be used to collect information from

the competitors.

Site Selection Criteria Checklist

1. Address

2. Total Square Meters

3. Distance from the highway

4. Visibility from the major highway

5. Parking type

6. Type of energy available

7. Characteristic of surround area

8. Offering rental fee per month

9. Establishment requiring plan approval

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The questionnaire for the competitors is created by the researcher for the

sole purpose of the study. The questions are constructed to find out how many

years have they been in the business, who are their current buyers and how

many products they produce per day.

A random distribution of questionnaire will be used to collect consumer

spending behaviour information The questionnaire was created by the researcher

for the lone purpose of the study. In the first two questions ( question 1-2 ), it

design to find out if they were one of the buyers of the product and for what

purpose did they buy the product. Questions 3-6 are for the researchers to know

who are the suppliers of their product, how frequent they buy and the

competitor’s price. Questions 7-8 focus whether they were satisfied with their

supplier and how many establishments would patronize the proposed product.

Data Collection Procedures

The collection data was collected through a period of one week from

August 3 to August 9. The site visits are made to collect information such as site

features and site accessibility.

Competitors’ data was collected through a three (3) days period from

9:00am-3:00pm at a random distribution of questionnaire from August 16 to

August 19. Data was collected by having a response to the questionnaires being

given to them, by interviewing them about their business and an observational

research that will help in my study.

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Demand survey was conducted through a ten (10) days period from

9:00am-3:00pm at a random distribution of questionnaire around Digos City area

and Bansalan from September 7 to September 16 with no specific time interval

before preceeding to the next establishment. The researcher walks over an

establishment to neighbouring establishment and use public vehicles if an

establishment is quite far from its point. The researcher explained to the selected

establishment that they were asked to do a survey, that the survey would be

done as completion of her research paper and their response would be kept

confidential, but still some refuses to answer.

Data Analysis

Due to the nominal questions on the questionnaire, only descriptive

statistics analysis will be made to find out the consumer spending pattern and

market potential data.

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CHAPTER IV

RESULTS AND DISCUSSION

Seeing as three researches have been done to collect information

concerning sites, competitors and consumer spending patterns, the following

result analysis will be conducted in the corresponding three areas: competition

analysis, site selection and consumer spending pattern and market area potential

research.

Competition Analysis Result

There are around two dried mango and mango juice manufacturing

company in Davao area ( Appendix 3 for the competitor’s profile ), were both of

them has a location not accessible to the customer. The two competitors both

have built good reputation to its customers. Both company offers domestic and

international transaction. There will be a competition between both companies

because both of them established already a good customer-supplier relationship.

The competition analysis will look at a wide range of aspects such as the taste

and quality of the product, the location and its wholesale price.

From the information collected, it can be found that PFIC is the most

competitive among the competitors. Since almost half of the local demands in

Davao area were ordered from their company. Other manufacturing company

doesn’t offer the same taste and quality among the customers and the location is

not convenient.

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Site Selection Result

Applying the site selection criteria checklist on the proposed site, the

researcher found out the following facts concerning the site. First is the site

address where it is located at Poblacion Uno, Bansalan, Davao del Sur. Second

is the features of the site including the total area of the space that will be rented,

distance from the highway, type of energy available, availability of raw materials

within the area, and the establishment requiring plan approval.

The total size of the space to be rented is 375 square meters. The

distance from the highway is 3 meters away, while the distance from the national

highway is 25 meters away. The type of energy available in the building is the

electricity and water, bills for the said energy is being paid by the occupant of the

space where it has their own measuring device, the offering rental fee is thirty

five thousand pesos per month and it is negotiable. The site also is a few

kilometres away from its source of raw materials which is the mango.

The establishment plan approval includes the BIR and the business

permit. The proposed site meets the approval of the researcher which it is the

best site that the business will be located.

Consumer Spending Pattern and Market Potential Research Result

As stated in the previous discussion, the survey is conducted from 9:00

am- 3:00 pm through a ten (10) day period from September 7- September 16 and

altogether, the 200 questionnaires were distributed and returned. The following

paragraphs will analyze the results of the survey and seek out the implication of

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the results. For dried mango, as discussed in the instrumentation paragraphs,

which is the question number1 and 2, is design to find out if they were one of the

buyers of the said product and for what purpose did they bought it.

In Table 1, it can be seen that 59% of the respondents answered “yes”, they buy dried mangoes and 41 percent answered no. This question helps the researcher to know his potential customers and to see whether his proposed project is common in the market.

Table 1. Number of respondents who buy dried mango

Frequency

Percent(%)

Cumulative Percent (%)

Yes 41 41 41

No 59 59 100

Total 100 100

In table 2 the question is “If yes, for what purpose?”, 41 out of 41 answered for

“selling”. The remaining 59% are those who answered no on the first question.

Table 2. Purpose of buying dried mango

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FrequencyPercent(%)


Consumption 0 0 0

Selling 41 41 100

Pasalubong 0 0

Total 100 100 100

In question 3, which is “Where do you usually purchase dried mango?”, 41 out of

41 who answered Yes from the first question purchased dried mango from

Davao. The question helps the researcher to know the location of its competitor.

Table 3. Places where dried mango is being purchased by the respondents

Frequency Percent(%) Cumulative Percent (%)

From Davao 41 41 100

From Digos 0 0

From Cebu 0 0

Total 100 100

In Table 4, it seeks to know how frequent they ordered the product from its

supplier. 8% answered once a week, 1 % answered twice a week and 32 %

answered once a month. 59% are those who answered no on the first question.

Table 4. Period of buying processed tuna

Frequency Percent (%)


Everyday 0 0 0

Once a week 8 8 20

Twice a week 1 1 22Once a month 32 32 100

Total 100 100 100

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In Table 5, it seeks to find out an average of how many packs of dried mangoes

did they usually purchase in a month. 30% answered 100 packs, 4 % answered

200 packs and 7% answered 250 packs. Mostly, pasalubong centers has a huge

volume of orders in a month.

Table 5. The average packs of dried mango usually purchased by the respondents

FrequencyPercent(%)


100 30 30 73

200 4 4 83

250 7 7 100

Total 100 100 100

In Table 6, it seeks to know the range of prices which the consumer buys from its

supplier. 1% of them bought the product from a price ranging from Php 51-75,

30% is Php 76-100 and 10% bought the product from a price ranging from Php

101-150.

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Table 6. Price of dried mango being purchased by the respondents

Frequency Percent (%)


Php 51-75 1 1 2

Php 76-100 30 30 75

Php 101-150 10 10 100

Total 100 100 100

In Table 7,it can be seen that most of the respondents were satisfied with the

quality of the product. 38% answered Yes and 3 % answered No.

Table 7. Number of respondents who are contented with the quality of the product they are buying


Yes 38 38 93

No 3 3 100

Missing 59 59

Total 100 100 100

In Table 8, “If ever Shine Dried Mango will be realized, will you patronize the

product?”, 74% answered Yes and 26 % answered No. Most of them answered

yes because they won’t travel anymore to Davao just to buy the product for their

stores.

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Table 8. Number of respondents who will patronize the proposed productFrequency

Percent(%)


Yes 74 74 74

No 26 26 100

Total 101 100

For mango juice, as discussed in the instrumentation paragraphs, which is the

question number1 and 2, is design to find out if they were one of the buyers of

the said product and for what purpose did they bought it. The result can be seen

in Table 9 and Table 10.

In Table 9, it can be seen that 88% answered Yes and 12% answered no. This

question helps the researcher to know his potential customers.

Table 9. Number of respondents who buy mango juiceFrequency

Percent(%)


Yes 88 88 88

No 12 12 100

Total 100 100

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In table 10, the question is “If yes, for what purpose?”, 88 out of 88 answered

“selling”. The remaining 12% are those who answered “no” on the first question

for mango juice production.

Table 10. The purpose of buying mango juice

FrequencyPercent(%)


Consumption 0 0 0

Selling 88 88 100

Total 100 100 100

In Table 11, it can be seen that 54% preferred to buy mango juice in tetra-pack,

26% in plastic bottles and 8% in bottles.

Table 11. The packaging of mango juice usually buy by the respondents

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FrequencyPercent(%)


Tetra-pack 54 54 61Plastic Bottles 26 26 91

Bottles 8 8 100

Total 100 100 100

In Table 12, which is “Where do you usually purchase mango juice?”, 74%

answered from Davao and 14 % from Digos. The question helps the researcher

to know the location of its competitor

Table 12. Location where dried mango usually bought by the respondents

In Table 13, it seeks to find out how often they purchase a product. 7% answered

once a week, 16% answered once a month and 65% twice a month.

Table 13. Period of buying mango juice

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FrequencyPercent(%)


From Davao 74 74 84

From Cebu 14 14 100

From Digos 0 0

Total 100 100 100

Frequency Percent

Cumulative Percent

Once a week 7 7 8

Once a week 16 16 26Twice a month 65 65 100

Total 100 100

In Table 14, it seeks to know an average of how many packs/bottles of mango

juice they usually purchase in a month. 8% answered 200, 42% answered 300

and 38% answered 400.

Table 14. The average packs/bottles of mango juice usually buy by the respondents in a month

In Table 15, it seeks to know the range of price per pack/bottle of mango juice

they purchased. 76% answered Php 5-10, 10% answered Php 11-15 and 2%

answered Php 16-20.

Table 15. Price per pack of mango juice usually buy by the respondents

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FrequencyPercent(%)


200 8 8 9

300 42 42 57

400 38 38 100

Missing 12 12

Total 100 100 100

In Table 16, it seeks to know if the consumers were satisfied with the quality and

taste of product they are buying. 86% answered Yes and only 2% of them

answered No.

Table 16. Satisfaction of the quality of the productFrequency

Percent(%)


Yes 86 86 98

No 2 2 100

Missing 12 12

Total 100 100 100

In Table 17, it can be seen that most of the respondents answered yes. They will

patronize the product since the location of their supplier will be very convenient

for them. 91% answered Yes while only 9% answered No.

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Php 5-10 76 76 86

Php 11-15 10 10 98

Php 16-20 2 2 100

Missing 12 12

Total 100 100 100

Table 17. Number of respondents who will patronize the product

Frequency Percent (%) Cumulative Percent (%)

Yes 91 91 91

No 9 9 100

Total 101 100

Marketing Aspects

A. Supply and Demand Analysis

Dried mango is a true tropical delight. This treat lets you enjoy the

luscious, Sweet taste of real mangoes anytime and anywhere. Dried

mangoes are a great snack or as a part of a delicious dessert.

Local Demand for dried mango were gathered through surveys

conducted to retailers, pasalubong centers, Hotels and some certain

establishment who sell dried mango and mango juice . The researcher

derived its demand by giving questionnaires and personal interviews to

the owner of different establishment who sell dried mango and mango

juice.

Table 18. Past Population of Hotels, Restaurants, Wholesalers, Pasalubong Centers in Digos City and Bansalan.

Year Total Population2010 822011 942012 972013 108

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2014 113

B. Demand Analysis for dried Mango

Table 19 shows the projected population of Hotels, Wholesalers/Retailers,

Restaurants and Pasalubong Centers in Digos City and in Bansalan. The

data was obtained using statistical straight line method of projection.

Table 19. Projected population of Hotels, Wholesalers/Retailers, Restaurants and Pasalubong Centers in Digos City and Bansalan

Year Total Population

2015 1212016 1292017 1362018 1442019 152

Table 20 shows the projected demand of dried mangoes in Digos City and

Bansalan based on the survey conducted. Out of 100 respondents, 74 agreed to

patronize the product. To get the projected demand of dried mangoes, multiply its

average consumption (179 kilo per week) by 74% of its projected population and

then multiply it again by 52 weeks.

Table 20. Projected Demand of dried Mangoes for the next five years.

Year Population 74% of the Annual demand of total population dried mangoes

(in kg)2015 121 89 828,4122016 129 95 884,2602017 136 100 930,800

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2018 144 106 986,6422019 152 112 1,042,496

C. Supply Analysis for Dried Mango

Table 21 shows the supply of dried mangoes for the past five years. The supply

increases as years goes by. The statistical method was used to compute the

projection.

Table 21. Supply of Dried Mangoes for the past five years

Year Supply (Kg)

2010 46,0002011 51,5002012 53,0002013 56,8002014 57,600

Source: Philippine Fruits International Corporation & Martsons Foods Incorporated

Table 22 shows the projected supply of dried mangoes for the next five years.

The supply increases as years goes by. The statistical method was used to

compute the projection.

Table 22. Projected Supply of Dried Mangoes for the next five years

Year Supply ( Kg)

2015 61,5302016 64,3802017 67,2302018 70,0802019 72,930

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D. Demand Analysis for Mango Juice

Table 23 shows the projected demand of mango juice in Digos City and

Bansalan based on the survey conducted. Out of 100 respondents, 91% agreed

to patronize the product. To get the projected demand of mango juice, multiply

the average consumption per week (273.85 L) by 91 % of its projected

population, and then multiply it again by 52 weeks.

Table 23. Projected Demand of Mango Juice for the next five years

Year Population 91% of the Annual demand of total population mango juice (in litres)

2015 121 105 1,495,2212016 129 111 1,580,6622017 136 117 1,666,1032018 144 122 1,737,3042019 152 129 1,836,985

E. Supply Analysis for Mango Juice

Table 24 shows the supply of mango juice for the past five years. The

supply increases as years goes by.

Table 24. Supply of Mango Juice for the past five years

Year Supply (in litres)

2010 62,4002011 74,8802012 93,6002013 99,8402014 106,080

31

Table 25 shows the projected supply of mango juice for the next five

years. The supply increases as the years goes by. The statistical straight line

method was used to compute the projection.

Table 25. Projected Supply of Mango Juice for the next five years

Year Supply (Litres)

2015 121,0562016 132,2882017 143,5202018 154,7522019 165,984

F. Demand, Supply and Gap Analysis

Table 26 shows the projected demand, supply and gap of Mango

Juice in the area of Digos City and Bansalan for the next five years. The

gap increases as the years goes by. The demand per week will be

multiplied into 52 weeks to get the final demand for the product.

Table 26. Projected Demand, Supply and Gap for Dried Mangoes

Year Demand (Kg) Supply (Kg) Gap (Kg)2015 828,412 61,530 766,8822016 884,260 64,380 819,8802017 930,800 67,230 863,5702018 986,642 70,080 916,562

32

2019 1,042,496 72,930 969,566

Table 27 shows the projected gap and market share of dried mangoes,

the statistical straight line method was used to compute the projection. The

projected share of 45,500 kilos per year, pack in 250 grams, operates 5 days a

week and 52 weeks in a year. For the projected demand and supply, the project

will attempt to fill up the unsatisfied demand for the next five years from 2015-

2019. It is expected that the demand for the product will increase in the next five

years of operation.

Table 27. Projected Gap and Market Share for Dried Mangoes

Year Gap (Kg) Market Share (Kg) Percent Market Share (%)

2015 766,882 45,500 5.932016 819,880 45,500 5.542017 863,570 45,500 5.262018 916,562 45,500 4.962019 969,566 45,500 4.69

Table 28 shows the projected demand, supply and gap of mango juice in

the area of Digos City and Bansalan for the next five years. The gap increases as

the year goes by. The demand per week will be multiplied into 52 weeks to get

the final demand of the product.

Table 28. Projected Demand, Supply and Gap of Mango Juice

33

Year Demand (in litres) Supply (in litres) Gap (in litres)2015 1,495,221 121,056 1,374,1652016 1,580,662 132,288 1,448,3742017 1,666,103 143,520 1,448,3742018 1,737,304 154,752 1,582,5522019 1,836,985 165,984 1,671,001

Table 29 shows the projected gap and market share of mango juice, the

statistical straight line method was used to compute the projection. The projected

share of 31,200 litres per year is based on the capacity of the plant, which will

produce 120 litres daily and pack in 200 ml. , operates 5 days a week and 52

weeks in a year. For the projected demand and supply, the project will attempt to

fill up the unsatisfied demand for the next five years from 2015-2019. It is

expected that the demand for the product will increase in the next five years of

operation.

Table 29. Projected Gap and Market Share for Mango Juice.

Year Gap (in litres) Market Share (in litres) Percent Market Share%

2015 1,374,165 31,200 2.272016 1,448,374 31,200 2.152017 1,522,583 31,200 2.052018 1,582,552 31,200 1.972019 1,671,001 31,200 1.87

G. Projected Sales Volume and Peso Sales

34

Table 30 and 31 shows the projected sales volume and peso sales of dried

mangoes and mango juice. To get the projected sales volume, multiply its

market share by 4 since the product is 250 grams per pack. For the projected

peso sales, the price of the product will be multiplied by its projected sales

volume.

Table 30. Projected Sales Volume and Peso Sales for Dried Mango

Year Product Price Projected Projected Sales Volume Peso

Sales

2015 250 grms. pack 95 182,000 17,290,0002016 250 grms. pack 99.75 182,000 18,154,5002017 250 grms. pack 104.74 182,000 19,062,6802018 250 grms. pack 109.98 182,000 20,016,360

Table 31. Projected Sales Volume and Peso Sales for Mango Juice

Year Product Price Projected Projected Sales Volume Pesos Sales

(Php)2015 200 mL 5 156,000 780,0002016 200 mL 5.25 156,000 819,0002017 200 mL 5.51 156,000 859,9502018 200 mL 5.79 156,000 902,5382019 200 mL 6.08 156,000 948,480

35

H. Proposed Marketing Strategy

1. Target Market

The target market of the proposed project are the

establishments who were engaged in selling gifts or

pasalubong such as grocery stores, hotels, restaurants

bakeries, food courts and canteens.

2. Proposed Product

The proposed products will be called “Shine Dried Mangoes”

and “Shine Mango Juice”. The proposed project will produce

a nutritious, affordable and tasty dried mangoes and mango

juice that can compete with the other producers.

3. Proposed Promotional Activities

Promoting the product will encourage the customer to buy a good

quality product. This proposed project will promote its products

through tarpaulin streamers and signboards. The project will also

use the social media such as facebook, instagram and twitter to

encourage everyone to buy their products.

36

4. Placement

The proposed project will be using the direct and indirect channel of

distribution. The products are sold directly from the producers to the

buyers and consumers. Products will be sold through wholesale

and retail sectors. An indirect channel of distribution is when the

product will be delivered to the customer in a weekly basis using its

company vehicle.

5. Selling Price

The selling price of the proposed project will be Php 95 for every

250 grams of dried mangoes and Php 5 for every 200 mL of mango

juice. The price will increase 5% annually based on the following

factors:

Increased price of raw materials and other component

Increased price in gasoline

Increased cost of electricity

Increasing the wages of workers and other factors that will

affect the proposed project

Management Aspects

37

Production Workers

Manager

Secretary Driver Security Guard

The proposed project has an initial manpower of 20 which consist of

manager/cashier, factory workers and a driver.

Organizational structure

Figure 1 shows the organizational structure of the proposed Dried Mango

and Mango Juice Production Business.

Fig.1 Organizational Structure

Duties and Responsibilities of Personnel

1. Manager

- The manager/cashier is responsible for the overall monitoring and

decision making of every matter concerning within the production. It is

his responsibility to keep the good reputation and make the

establishment a continuous profit gaining firm.

- The manager/cashier is responsible of the customer and responsible

for the records of all the payments made and balances and cost and

in charge of the salaries and benefits of the worker.

Qualifications

38

Must be a graduate of BS Accountancy or any business

management related course

Must have at least 3 to 4 years experience

Must possess a good analytical and decision-making skills

2. Production Workers

- Performs all tasks involved in the production of the company’s

product.

Qualifications

Must be a high school or college graduate

Good practical skills

The ability to work quickly and methodically

Good team working skills

3. Secretary

-Ensuring company meetings are effectively organised and minuted.

-Maintaining effective records and administration

-Upholding legal requirements

Qualifications

Must be a graduate of any secretarial course or

business related course

At least 18-25 years old

39

LOADING SEALING

RECEIVING OF MANGOES

SORTING PEELING

MIXING WEIGHING SLICING

PACKINGDRYINGCOOKING

With pleasing personality

4. Security Guard

-Protect property and lives by patrolling the area.

- Identify visitors and ask for appropriate documents

-Responds to alarms and calls of distress.

` Qualifications

Must be a Licensed Security Guard

At least 23-40 years old

Technical Aspect

Process Flow Chart of Making Dried Mangoes

40

Fig. 2 Process Flow Chart

Receiving of Mangoes- mangoes are received by weighed; sample and

labelled, also primarily sorting should be done at this stage.

Time per process: 30-45 mins.

Sorting- mangoes are sorted according to size and maturity. It will then be

washed manually and blanched either with hot or live stream.


Peeling- Mangoes are peeled manually.

Time per process:1-2 mins per mango

Time per process: 1-2 mins. per mango

Slicing- peeled mangoes are sliced into chips manually


Weighing- sliced mangoes are peeled for recording purposes


Mixing- sliced mangoes are mixed with sulphur dioxide


41

PASTEURIZATION FILLING INTO TETRA-PACKS

SEALING

MIXING(SUGAR & CITRIC ACID

HEATING SLICING

RECEIVING OF MANGOES

SORTING/WASHING

PEELING

Cooking- sugaring process follows, sliced mangoes are soaked in syrup or

sugar, it will then be put in a large trays to make them ready for dehydration

process


Drying- mangoes are put into drying machine

Time per process: 1-2 hours

Packing- dried mangoes are packed per 250 grams

Time per process:1-2 mins per pack

Sealing- packed mangoes are sealed using the sealing machine

Time per process: 30-35 seconds per pack

Loading- packed dried mangoes are placed into the delivery trucks and is now

ready to be delivered

Time per process: 30-40 mins

PROCESS FLOW CHART OF MAKING MANGO JUICE

42

Fig. 3 Process Flow Chart

Receiving of Mangoes- mangoes are received by weighed; sample and

labelled, also primarily sorting should be done at this stage.


Sorting- mangoes are sorted according to size and maturity. It will then be

washed manually and blanched either with hot or live stream.


Peeling- Mangoes are peeled manually.

Time per process:1-2 mins per mango


Slicing- peeled mangoes are sliced into chips manually


Heating- sliced mangoes are pre-heated to achieve standard moisture content

before mixing other ingredients.


Mixing- sliced mangoes are mixed with citric acid and sugar


Pasteurization- mango juice will be placed at the pasteurizing machine

43

Time per process: 45 mins.

Filling into Tetra-packs- mango juice will be packed 200 mL per tetra-packs

Time per process: 2-3 mins. per pack

Sealing- tetra-packs will be sealed using the sealing machineA

Time per process: 30-35 sec.

Manufacturing Processes

Production process usually undergo a manual operation in receiving of

mangoes, sorting, peeling, weighing, mixing, cooking and mechanical process in

drying/heating for both dried mango and mango juice.

For dried mangoes, the raw materials (mangoes) are received by

weighed; sample and labelled, also primarily sorting should be done at this stage.

Mangoes are sorted according to size and maturity. Mangoes to be dried must be

carefully selected. It will then be washed manually and blanched either with hot

or live stream. Sorting and grading is the next step and to be followed by peeling

and slicing. Addition of chemical to the finish trimmed mango to candied or

sugaring follows. Cut pieces of mango are soaked in syrup or sugar, it will then

be put in a large trays to make them ready for dehydration process and to

achieve a desired moisture content of 12-16%.

44

After dehydration, a post drying operation follows. Dried mangoes will be

kept in boxes or closed rooms at 1 week or more to allow a balanced moisture

among individual process then packed and stored.

Mango juice making process starts from washing, peeling, pulping,

heating and storage which is the used for producing mango juice itself. The pulp

is blended with citric acid and sterilized water. After pasteurization, the juice is

hot-filled into tetra-packs. The container is sealed and put in a water bath. This

process can further lengthen the shelf life of the juice. A hydro cooling is done.

The packed mango juice is placed in ambiance storage before shipment.

The proposed project will operate 5 days a week for 8 hours. Workers will

work 20 days a month, 260 days a year or 52 weeks a year. The production will

depend on the quantity or stock of mangoes and other materials. It has a rated

capacity of 200 kilos per day for dried mangoes and 120 per day for mango juice.

The plat has a dimension of 15 x 25 meters. Operation will start at 8:00 in the

morning and will end at 5:00 in the afternoon. The proponent will have an initial

capacity of 52,000 kg. that will increase every year. Electricity and water bills will

be paid by the occupant of the space where it has their own measuring device,

the offering rental fee is thirty five thousand pesos per month and it is still

negotiable. The site also is a few kilometres away from its source of raw

materials which is the mango.

The main source of mango is situated in Bansalan. Sugar, sulphur dioxide

and citric acid will be delivered by the supplier. The plant will designate garbage

area wherein wastes of the plant will be temporarily placed. These wastes such

45

as mango seeds, skins and plastics will be collected by the garbage trucks of

Bansalan early morning during Tuesday and Friday.

SOCIO ECONOMIC BENEFITS

The project will be a great help to the community and the people residing

the area. The government will be benefited by this project because they will pay

necessary permit and taxes to them. It will also serves as an opportunity to those

unemployed individual nearby. In return, those individual will also pay their

individual taxes to the local government.

CHAPTER V

FINANCIAL ASPECT

This chapter discusses the project cost, project administrative cost, utility

cost, operating cost depreciation cost, projected income statement, cash inflow

and outflow, and the projected balance sheet. It also presents the computation

for the return on investment, return on equity, payback period and benefit cost

ratio. Tables are shown to present the data.

Total Project Cost

46

Table 32 shows that the total project cost summed up to Php 4,032,546 which includes the total fixed asset amounting to Php 3,282,546 adding the total operating capital amounting to Php 750,000.

Table 32. Project Cost

Total Project Cost Cost (Php)Fixed Asset:

Utensils and Supplies 41,470Furniture and Fixtures 22,636Machinery and Equipment 3,218,440

Total 3,282,546

Operating CapitalTotal 750,000

Total Project Cost 4,032,546

Monthly Pro-Forma Financial Analysis

Calculation of Monthly Revenue

Based on the survey result, price for dried mango on its first year of

operation is 95 pesos. Mango juice has an initial price of 5 pesos and both

product prices will tend to increase depending in any circumstances.

Table 33. Product Price List

47

Product List Price (Php)Shine Dried Mango (250 grams) 95

Shine Mango Juice 5

Total 100

Projected Monthly Revenue:

Average Price Per pack for dried Mango :Php 104.99

Annual Market Share : 117,000

Monthly Market Share : 117,000÷12 = 9750

Monthly Revenue Formula : Average Price × Monthly Market Share

= 9750 x 104.99

Monthly Revenue : Php 1,023,652

Average price per pack for Mango Juice: Php 5.53

Annual Market Share : 156,000

Monthly Revenue Formula: 5.53 x 156,000

Monthly Revenue: 862,680

Monthly Pro Forma Financial Statement

48

Assumptions are made in this study. Salary and benefits of the personnel

is estimated to increase 5% annually and permit/license is at Php.4,000.00 and

will increase 5% annually. Project overhead cost including electric consumption,

water consumption, internet connection and facilities maintenance will increase

5% annually. Cost of sales and service (direct materials and direct labor) will also

increase 5% annually. Tools and equipment is to be depreciated for ten (10)

years and furniture and fixtures is for ten (10) years. Computation of tax is based

on the rates of taxable income of individuals. Calculated by subtracting cost of

sales and service, administrative expenses, operating expenses from the total

revenue, the monthly earnings before tax is Php. 65, 441.67.

Projected Monthly Revenue:

Annual Market Share: 117,000

Monthly Market Share: 117,000÷12 = 9750

Price Per Pack of Dried Mango: Php 95

Total Account receivable per Month: Php 95

Total Gross Sales:

Total Account Receivable Per Month × Monthly Market Share

Php 95 x 9750 = Php 926,250

49

Projected Expenses:

Cost of Services Sold: Php 8,514,930

Selling and Admin. Cost: Php 435,000

Total Expense Php 8,949,930

Net Income Before Taxes and Depreciation Cost: Php 2,614,512.92

Computation for Cash Payback Period

Table 34 shows the payback period of the cash investment. The projected

payback period of the project is derived by dividing the total investment with the

average annual profit. Computation on Appendix 18 shows that the payback

period is four

months and nine days. This means that the investment will be recovered after

four months and one day of the installation service operation.

Table 34. Cash Payback Period

No. Years Total Investment

Ave. Annual Net Cash Flow After Tax

Cash Payback Period

05 4,032,546.00 2,114,411.96 1.90

50

Major Assumptions

1. Increase in administrative expenses is 5% yearly

2. Increase in utility cost is 5% yearly

3. Cost of raw materials to increase 5% yearly

4. Employee Phil health and SSS benefits is 5% yearly

5. Increase in salaries and wages is 5% yearly

6. Permit and licence to increase 5% yearly

7. Revenue of Cost Projecting is 5% increase yearly

Total Sales

Table 35 and 36 shows the total sales for dried mango and mango juice.

In the first year of production for dried mango, the total is Php11,115,000, in the

second year is Php 11,115,000., in the third year is 12,254,580, in the fourth

year is Php 12,867,660

and in the fifth year of production is Php 13,511,160. For mango juice, first year

of production, the total is Php 780,000, in the second year is Php 819,000, in the

third year is Php 859,950, in the fourth year is Php 902,538 and in the fifth year

of production is Php 948,480.

Table 35. Total Sales for Dried Mango

Year 1 (Php) Year 2 (Php) Year 3 (Php) Year 4 (Php) Year 5 (Php)Sales 11,115,000 11,670,750 12,254,580 12,867,660 13,511,160Total 11,115,000 11,670,750 12,254,580 12,867,660 13,511,160

51

Table 36. Total Sales for Mango Juice

Year 1 (Php) Year 2 (Php) Year 3 (Php) Year 4 (Php) Year 5 (Php)Sales 780,000 819,000 859,000 902,000 948,000Total 780,000 819,000 859,000 902,000 948,000

Machinery and Equipment

The proposed project will require a set of facilities for the operation of the

business. Table 37 shows the furniture and fixtures needed for the project with

their corresponding price. This equipment will be purchased locally in a cash

basis.

Table 37. List and Cost Furniture and Fixtures

Quantity Unit Description Unit Cost (Php) Total Unit Cost (Php)

4 pcs Tables 2500 10,0001 pcs Arm Chair 960 96010 pcs Seats 350 35005 pcs Faucets 88 4405 pcs Sinks 748 37403 pcs Bathroom Suites 966 28982 pcs Bookshelves 999 1098

52

Total 6,611 22,636

Table 38 shows the list of utensils and supplies that is needed to the proposed

project. The total cost is approximately Php 41,470

Table 38. List and Cost of Utensils and SuppliesItem Quantity Unit Cost Total Cost

(Php)Peeler 20 pieces 90 1,800

Knife 20 pieces 120 2,400Basin 20 pieces 200 4,000Plastic Crates 25 pieces 310 7,750“Katsa” 2 dozens 100 200“Kaeng” 25 pieces 250 6,250Hand Towel 20 pieces 20 400Hair net 20 pieces 20 400Face Mask 20 pieces 20 400Pot Holder 10 pieces 75 750Boots 20 pairs 320 6,400Head Cups 20 pieces 50 1,000Scissors 20 pieces 280 5,600Gloves 1 box 200 200Gas/LPG 4pieces 980 3,920Total: Php 41,470

Table 39 shows the tools and equipment needed for the project and their

corresponding price.

Table 39. List and Cost of Machinery and Equipment

Item Quantity Rated Unit Total Cost

Capacity (Php)Drying Machine 2 pieces 4Hp 1,000,000 2,000,000Sealing Machine 1 piece 1 Hp 120,000 120,000

53

Pasteurizer Machine 1 piece 4 Hp 115,000 115,000Generator 1 piece 45,000 45,000Weighing scale (big) 1 piece 12,000 12,000Weighing scale (small) 1 piece 2,000 2,000Kettle 2 pieces 84,420 168,840Gas stove burner 2 pieces 2,800 5,600Delivery truck 1 piece 750,000 750,000

Total: Php 3,218,440

Projected Selling and Cost Services Sold

Table 40 shows the labor requirements for the business for the manager

or cashier Php.8, 500.00 is their monthly salary, for the production workers,

security guard and driver is Php. 7, 000.00 each, secretary will get Php 7,500 per

month and their Benefit will be 10% of their monthly salary and for the 13 th month

pay is their monthly salary.

Table 40. Labour Requirements

Personnel# Monthly Salaries(Php) SSS/PhilHealth(Php) 13 Month Pay (Php)

Manager 1 8,500 850 8,500Secretary 1 7,500 750 7,500Production 20 7,000 700 7000 WorkersSecurity 1 7,000 700 7,000

GuardDriver 1 7,000 700 7,000Total 12 37,000 3,700 37,000

54

Table 41 shows the direct labor expense annually in first year of operation is Php

2,414,000, Php 2,534,700.00 in the second year of operation, Php 2,661,435 in

the third year of the operation, Php 2,794,506.75 in the fourth year of the

operation and in the fifth year of the operation is Php 2,934,232.08.

Table 41. Direct Labor Expense

Account Title Year 1 (Php)

Year 2 (Php)

Year 3 (Php)

Year 4 (Php)

Year 5 (Php)

Salaries And Wages 2,414,000 2,534,700 2,661,435 2,794,506.7

52,934,232.08

Total 2,414,000 2,534,700 2,661,435 2,794,506.75

2,934,232.08

The source of electricity will be Davao del Sur Electric Cooperative

(DASURECO) and Bansalan Water District for the water supply. The estimated

monthly cost for the electricity and water is shown on Table 40.

Table 42. Estimated Consumption of Utilities

Consumption Consuming Month Per Month Consumptions Total (Php)

Electricity 12 36,000 432,000Water 12 2,700 32,400Total 38,700 464,400

55

Table 43 shows the list of the raw materials needed for the operation with

their corresponding amount and the estimated cost for five years of operation.

Table 43. Raw Materials

Raw Materials year 1 (Php)

year 2 (Php)

year 3 (Php)

year 4 (Php) year 5 (Php)

Mango (200kg/day at Php 30/kg) 1,560,000 1,638,000 1,719,900 1,805,895 1,896,189.75

Sugar (100kg/day at Php 38/kg) 988,000 1,037,400 1,089,270 1,143,733.

5 1,200,920.17

Sulphur Dioxide (70kg/day at Php 75/kg)

1,365,000 1,433,250 1,504,912.5 1,580,158.1 1,659,166

Citric Acid (45 kg/day at Php 22.90/kg) 267,930 281,326.5 295,392.8 310,162.4 325,670.5

Packaging 936,000 982,800 1,031,940 1,083,537 1,137,713.8Total 5,116,930 5,372,776.5 5,641,415.3 5,923,486 6,219,660.22

Table 44 shows the total projected cost for the five years of the operation.

Table 44. Projected Cost

Account Title Year 1 (Php) Year 2 (Php) Year 3 (Php) Year 4 (Php) Year 5 (Php)

Raw Materials 5,636,930 5,918,776.5 6,214,312.3 6,525,451 6,851,723.47

56

Direct Labor 2,414,000 2,534,700 2,661,435 2,794,506.75

2,934,232.08

Overhead Cost Expense 464,000 487,200 511,560 537,138 563,994.9

Total 8,514,930 8,940,676.5 9,387,307.3 9,857,095.75 10,349,950.45

Projected Administrative Cost

Table 45 shows the five years projected administrative costs which in year

1 is Php.435,000, in year 2 is Php.456,750, in year 3 is Php.479,587.5, in year 4

Php.503,566.80 and in year 5 is Php.528,745.1.

Table 45. Projected Administrative Costs

Account Title Year 1 (Php)

Year 2 (Php)

Year 3 (Php)

Year 4 (Php)

Year 5 (Php)

Promotions and Advertisement 5,000 5,250 5,512.50 5,788.1 6,077.5

Permits and Licences 4,000 4,200 4,410 4,630.5 4,862.0

57

Building Maintenance 6,000 6,300 6,615 6,945.7 7,293

Rent Expense 420,000 441,000 463,050 486,202.5 510,512.6

TOTAL 435,000 456,750 456,750 503,566.8 528,745.1

Operating Expense

Table 46 shows the total projected operating cost. In the first year of the

operation is Php 8,949,930, in the second year is Php 8,949,930 , in the third

year is Php 8,949,930, in the fourth year of the operation is Php 10,360,662.55,

and in the fifth year of operation is Php 10,878,695.55.

Table 46. Projected Operating Cost

Account Title Year 1 (Php) Year 2 (Php) Year 3 (Php) Year 4 (Php) Year 5 (Php)

Cost of Services Sold

8,514,930 8,940,676.5 9,387,307.3 9,857,095.75 10,349,950.45

Selling and Adm. Cost

435,000 456,750 479,587.5 503,566.8 528,745.1

58

TOTAL 8,949,930 8,949,930 9,866,894.8 10,360,662.55 10,878,695.55

Depreciation Schedule

Table 47 shows the depreciation schedule for the machines and

equipment is depreciated for ten (10) years, furniture and fixtures is for five (5)

years and utensils and supplies is for one (1) year.

Depreciation Expenses Original Acquisition – Salvage Value Useful Life

Salvage Value = 10% of the Original Acquisition

Machines and Equipment = Php.3,218,440– Php.321,844 10

= Php.289,659.6

Furniture and Fixtures = Php 22,636 – Php 2,263.6 5

= Php.4,074.48

Utensils and Supplies= Php 41,470– Php 4147 1

= Php 37,323

Table 47. Depreciation Schedule

Item Actual Salvage Estimated Annual

59

Value (Php) Value (Php) Life in Years

Depreciation Cost (Php)

Furniture and Fixtures 22,636 2,263.6 5 4,074.48

Machines and Equipment 3,218,440 321,844 10 289,659.6

Utensils and Supplies 41,470 4,147 1 37,323

Total 3,328,546 328,254.6 331,057.08

Projected Income Statement

Table 48 shows the projected income statement for the next five years of

operation in the business.

Table 48. Projected Income Statement

60

Account Title Year 1(Php)

Year 2(Php)

Year 3(Php)

Year 4(Php)

Year 5(Php)

Total Sales 11,895,500 12,489,750 13,114,530 13,770,198 14,459,640

Less: Cost of Goods sold 8,514,930 8,940,676.5 9,387,307.3 9,857,095.7510,349,950.45

Sel. and Adm. Cost 435,000 456,750 479,587.5 503,566.8 528,745.1

Dep. Cost 331,057.08

331,057.08 331,057.08 331,057.08 331,057.08

Total Expenses 9,280,987.08 9,728,483.58 10,197,951.88

10,691,719.63 11,209,752.63

Net Inc. Before Taxes 2,614,512.92 9,761,266.42 2,916,578.12 3,078,478.37 3,249,887.37

Less: Income Tax 710,544.13 757,605.25 807,304.99 859,113.07 913,995.95

Net Income 1,903,968.79 2,003,661.17 2,109,273.13 2,219,265.3 2,335,891.42

Projected Cash Flow

Table 49 shows the projected cash flow for the next five years of the

operation in the business.

Table 49. Projected Cash Flow

Account Title Pre-operating

Year 1Year 2 (Php) Year 3 (Php) Year 4 (Php) Year 5 (Php)

(Php)Cash InflowsEquity Cash 4,032,546.00

61

Revenue 11,895,500.00 12,489,750.00 13,114,530.00 13,770,198.00 14,459,640.00

Cash OutflowsFixed Assets 3,282,546.00 Cost of Goods Sold 8,514,930.00 8,940,676.50 9,387,307.30 9,857,095.75 10,349,950.45Sel. and Adm. Cost 435,000.00 456,000.00 479,587.50 503,566.80 528,745.00

Income Tax 710,544.13 757,605.25 807,304.99 859,113.07Total Cash Outflow 3,282,546.00 8,949,930.00 10,107,220.63 10,624,500.05 11,167,967.54 11,737,808.52

Net Cash Inflows 750,000.00 2,945,570.00 2,382,529.37 2,490,029.95 2,602,230.46 2,721,831.48

Add: Cash Beg. 750,000.00 3,695,570.00 6,078,099.37 8,568,129.32 11,170,359.78Cash Balance End 750,000.00 3,695,570.00 6,078,099.37 8,568,129.32 11,170,359.78 13,892,191.26

Projected Statement of Financial Position (Balance Sheet)

Table 50 shows the projected balance sheet this shows if the operation

cycle of the business is balanced.

Table 50. Projected Balance Sheet

Account Title Pre-operating Year 1 (Php) Year 2 (Php) Year 3 (Php) Year 4 (Php) Year 5 (Php)

AssetsCurrent Assets

62

Operating Cash 750,000.00 3,695,570.00 6,078,099.37 8,568,129.32 11,170,359.78 13,892,191.26

Current Assets 750,000.00 3,695,570.00 6,078,099.37 8,568,129.32 11,170,359.78 13,892,191.26Machines and Equipment 3,218,440.00 3,218,440.00 3,218,440.00 3,218,440.00 3,218,440.00 3,218,440.00

Less: Acc. Dep. 289,659.60 579,319.20 868,978.80 1,158,638.40 1,448,298.00

Subtotal 3,218,440.00 2,928,780.40 2,639,120.80 2,349,461.20 2,059,801.60 1,770,142.00

Fur. and Fix. 22,636.00 22,636.00 22,636.00 22,636.00 22,636.00 22,636.00Less: Acc. Dep. 4,074.48 8,148.96 12,223.44 16,297.92 20,372.40

Subtotal 22,636.00 18,561.52 14,487.04 10,412.56 6,338.08 2,263.60Utensils and Supplies 41,470.00 41,470.00 41,470.00 41,470.00 41,470.00 41,470.00

Less: Acc. Dep 37,323.00 74,646.00 111,969.00 149,292.00

Subtotal 41,470.00 4,147.00 -33,176.00 -70,499.00 -107,822.00 41,470.00

Sub. Prop. And Equip. 3,282,546.00 2,951,488.92 2,620,431.84 2,289,374.76 1,958,317.68 1,813,875.60

Total Assets 4,032,546.00 6,647,058.92 8,698,531.21 10,857,504.08 13,128,677.46 15,706,066.86Liab. And Own. Equit.Current LiabilitiesInc. Tax. Payable 710,544.13 757,605.25 807,304.99 859,113.07 913,995.95

Current Liabilities 710,544.13 757,605.25 807,304.99 859,113.07 913,995.95

Owner's Equity

Equity Beg. 4,032,546.00 4,032,546.00 5,936,514.79 7,940,925.96 10,050,199.09 12,269,564.39Add: Net Income 1,903,968.79 2,003,661.17 2,109,273.13 2,219,265.30 2,335,891.42Total Owner's Equity 5,936,514.79 7,940,175.96 10,050,199.09 12,269,464.39 14,605,455.81Total Liab. And Equity 6,647,058.92 8,698,531.21 10,857,504.08 13,128,677.46 15,706,066.86

Projected Income Statement

63

Table 51 shows the projected income statement this shows the total tax

due for the five years of operation

Table 51. Projected Income Statement

Year 1 Gross Income Before Tax (Php) 2,614,512.92 Less: Basic Personal Exemption 50000.00Taxable Income 2,564,512.92Tax Due 50000.00

Add: 32% in excess of P500,000.00 660,644.13

Total Tax Due 710,544.13Year 2 Gross Income Before Tax 2,761,266.42

Less: Basic Personal Exemption 50000.00Taxable Income 2,711,266.42Tax Due 50000.00Add: 32% in excess of P500,000.00 707,605.25Total Tax Due 757,605.25

Year 3 Gross Income Before Tax 2,916,578.12 Less: Basic Personal Exemption 50000.00Taxable Income 2,866,578.12Tax Due 50000.00Add: 32% in excess of P500,000.00 757,304.99Total Tax Due 807,304.99

Year 4 Gross Income Before Tax 3,078,478.37 Less: Basic Personal Exemption 50000.00Taxable Income 3,028,478.37Tax Due 50000.00Add: 32% in excess of P500,000.00 809,113.07Total Tax Due 859,113.07

Year 5 Gross Income Before Tax 3,249,987.37 Less: Basic Personal Exemption 50000.00Taxable Income 3,199,987.37Tax Due 50000.00Add: 32% in excess of P500,000.00 863,995.95Total Tax Due (Php) 913,995.95

Profitability Analysis

64

Table 52 shows the financial analysis of the proposed project for the first

five years of operation. The return on investment is projected to be 47.21% for

the first year, 46.69% for the second year, 52.30% for the third year, 55.03% for

the fourth year and 57.92% for the fifth year. The return on equity is projected to

be 32.07% for the first year 25.23% for the second year 20.98% for the third

year, 18.08% for the fourth year and 15.99% for the fifth year.

Table 52. Return on Investment (ROI) and Return on Equity (ROE)

Item Year 1 Year 2 Year 3 Year 4 Year 5Return on Investment (ROI) 47.21% 49.69% 52.30% 55.03% 57.92%

Return on Equity (ROE) 32.07% 25.23% 20.98% 18.08% 15.99%

Table 53 shows the benefit cost ratio for the first five years of the business.

Table 53. Benefit Cost Ratio

Year Annual Revenue (Php) Annual Operating Cost (Php)

Benefit-Cost Ratio

1 1,903,968.79 750,000 2.53

2 2,003,661.17 787,500 2.54

3 2,109,273.13 826,875 2.55

4 2,219,265.3 868,218.75 2.56

5 2,335,891.42 911,629.69 2.56

CHAPTER VI

SUMMARY AND CONCLUSION

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Summary

The research conducted by the proponent of the feasibility study of putting

up a Dried Mango and Mango Juice Production at Bansalan, Davao del Sur was

carefully analyzed the different aspects of starting any business. It includes the

market area, consumer spending pattern, competition analysis, site evaluation

and finally the financial aspect of the proposed project. The research came to the

following conclusions in terms of the five research objectives set up at the

beginning of the research paper.

The market area of the proposed business is identified as the whole Digos

City and Bansalan area.

Conclusion

The proponent analyzed the different aspects of putting Dried Mango and

Mango Juice Production Business in Bansaln. It includes the market area,

competitor’s analysis, site evaluation and the financial statement. The researcher

came up with the following conclusion.

In table 2 and 10, it clearly emphasize that most of the buyers of the

product were retailers/wholesalers since its purpose of buying is for selling. They

usually purchase the product at Davao City to avail lesser price. The site is 375

square meters at Poblacion Uno, Bansalan, Davao del Sur. Type of energy

66

available is electricity and water supply, the area is very accessible and the

offering rental fee is Php 35,000 per month. Lastly, is the approval plan, this

includes the permits and licenses.

A Pro-forma financial analysis was conducted to determine the financial

feature of the proposed Dried Mango and Mango Juice Production. Based on the

prices of the products, the initial price of dried mango will be Php 95 and Php 5

for mango juice. Operation hour is from 8:00am- 5:00pm and will open 5 days a

week from Monday to Friday.

It is estimated that the earning before tax is Php 1,023,652 monthly for the

first year of operation. The payback period of the proposed project is 2 months

and 3 days of operation. It shows that the operation will be recovered in a year of

operation.

BIBLIOGRAPHY

67

Kumar, Kirti and Baju, Malik (1998), The Benefits of Mangoes. Retrieved on

February 23, 2012 from http:www.da.gov.ph/Mindanao/com_profile

/mango.html.

Siao, Yulin (1900), Investment and Money. Retrieved on September 9,2011 from

http:sanko.com/.

Tirtha, Sakar (1998), Amazing Facts in Foods. Retrieved on June 17, 2012 from

http://www.fedupwithfoodadditives.info/factsheets/driedfruit.

Wiley, Shawn (2014), Global Competitions. Retrieved on March 30, 2013 from

http://www.competitionsanddemand/meetup/relevance.info/global

68

http://www.fedupwithfoodadditives.info/factsheets/driedfruit

APPENDICES

Appendix A

Site selection Criteria Checklist

1. Address - Pob. Uno, Bansalan, Davao del Sur

2. Total square meters - Three Hundred Seventy Five Square

Meters ( 375 sq.m)

3. Distance from the

Highway

- Three meters (3 m)

4. Visibility from the Major - Thirty meters (25 m)

69

Highway

5. Parking type - On-street

6. Type of Energy Available - Electricity and Water Supply

7. Characteristic of Surround

area

- Market area accessibility

8. Offering Rental Fee per

Month

- Thirty five thousand (35,000) pesos

9. Establishment Requiring

Plan Approval

- BIR and Business Permit

Appendix B

Competitors Profile

For Dried Mango

PFIC MFIC

Location Toril, Davao City Toril, Davao City

70

Number of years in the Business 5 years 4 years

Number of orders per Month

60,000 packs of Dried Mango per month

45,000 packs of Dried Mango per month

AtmosphereClean,BrightAttractive

Clean, Bright,Attractive

Hours of Operation 8hrs 8hrs

For Mango Juice

PFIC MFIC

Location Toril, Davao City Toril, Davao City

Number of years in the Business 5 years 4 years

71

Number of orders per Month

20,000 tetra-pack per month

5,000 tetra-packper month

AtmosphereClean,BrightAttractive

Clean, Bright,Attractive

Hours of Operation 8hrs 8hrs

Appendix C

Survey Questionnaire for Competitor

UNIVERSITY OF SOUTHERN MINDANAOCOLLEGE OF INDUSTRY AND TECHNOLOGY

KIDAPAWAN CITY CAMPUSSUDAPIN, KIDAPAWAN CITY

72

Supply Survey Questionnaire

Name: Date:Address:

Note: Please give your best answer to the following question. All answers are considered right and shall be held confidential.

1. Are you producing dried mango?____Yes ____No2. If yes, how many years have you been in the business?____3 years ____5 years____10 years ____Others; Pls. specify3. Who are your current buyers?____Household consumer ____Department Store____Retailer/Sari-Sari Store ____Others; Pls. specify4. An average of how many packs of dried mango do you produced for the past five years?____2010 ____2011____2012 ____2013____20145. Have you experience rejecting orders?____Yes ____No6. If yes, an average of how many packs of dried mango, base on customer’s demand have

you rejected for the past five years?____2010 ____2011____2012 ____2013____2014

Signature: ________________



Supply Survey Questionnaire

Name: Date:Address:

73

Note: Please give your best answer to the following question. All answers are considered right and shall be held confidential.

1. Are you producing mango juice?____Yes ____No

2. If yes, how many years have you been in the business?____3 years ____5 years____10 years ____Others; Pls. specify

3. Who are your current buyers?____Household consumer ____Department Store____Retailer/Sari-Sari Store ____Others; Pls. specify

4. An average of how many packs of mango juice do you produced for the past five years?____2010 ____2011____2012 ____2013____2014

5. Have you experience rejecting orders?____Yes ____No

6. If yes, an average of how many packs of dried mango, base on customer’s demand have you rejected for the past five years?____2010 ____2011____2012 ____2013____2014 Signature: ________________

Appendix D

Survey Questionnaire for Consumer Spending Behaviour



74

Demand Survey QuestionnaireName: Date:Address:

Note: Please give your honest answer to the following question. All answers are considered right and shall be held confidential.

1. Do you buy mango juice?____Yes ____No2. If yes, for what purpose?____Consumption ____Selling____Others; Pls. specify3. Which packaging of mango juice do you prefer?____Tetra-pack ____Plastic bottles____Bottles ____Others; Pls. specify4. Where do you usually purchase mango juice?Direct from the processor:____From Davao ____From Digos____From Cebu ____Others; Pls. specify5. How often do you purchase it?____Once a week ____Once a month____Twice a month ____Others; Pls. Specify6. An average of how many packs/bottles of mango juice you usually purchase?____100 ____200____300 ____Others; Pls. specify7. How much is the price per pack/bottle of mango juice?____5-10 Php ____11-15 Php____16-20 Php ____Others; Pls. specify8. Are you contented with their quality?____Yes ____No9. If ever “Shine Mango Juice” will be realized, will you patronize the product?____Yes ____No

Signature: ________________



Demand Survey Questionnaire

75

Name: Date:Address:

Note: Please give your honest answer to the following question. All answers are considered right and shall be held confidential.

1. Do you buy dried mango?____Yes ____No2. If yes, for what purpose?____Consumption ____Selling____Pasalubong ____Others; Pls. specify3. Where do you usually purchase dried mango?Direct from the processor:____From Davao ____From Digos____From Cebu ____Others; Pls. specify4. How often do you purchase it?____Everyday ____Once a week____Twice a week ____Once a month____Others; Pls. Specify5. An average of how many packs do you usually purchase?____1 ____2____5 ____10____Others; Pls. specify6. How much is the price of dried mango?____1-25 Php ____26-50 Php

____51-75 Php ____Others; Pls. specify7. Are you contented with their quality?____Yes ____No8. If ever “Shine Dried Mango” will be realized, will you patronize the product?____Yes ____No

Signature: ________________

Appendix E

Communication Letter



76

August 13, 2015__________________________

Sir/Madam:

Greetings of peace and prosperity!

I, Derren Ivy Shine Veňigas, a fifth year student of Bachelor of Science in Industrial Engineering of the University of Southern Mindanao Kidapawan City Campus, College of Industry and Technology, is currently having my Feasibility Study entitled, “Shine Dried Mango & Mango Juice Production”.

I have chosen your company as one of my sources of data. Any information that your company could give, will do a lot towards the accomplishment of my study. Please allow me to administer a question for this study in your company. Rest assured that all information you will give will be kept confidential.

I am hoping for your positive response with this matter.

Thank you and more power!

Respectfully yours,

DERREN IVY SHINE VEŇIGAS

ProponentNoted:

ENGR. JANET LUMANG

Adviser

CURRICULUM VITAE

A. Personal Data

77

NameDate of BirthPlace of BirthSexCivil StatusHome AddressFamily

FatherMother

::::::

::

Derren Ivy Shine VeňigasMarch 30, 1995Bansalan, Davao del SurFemaleSingleBanslan, Davao del Sur

Dominador VeniegasCelestina Veniegas

B. Educational Background

Trainings and Seminars

PIIE Seminar and Career Orientation February 12,2015 USM-KCCCIT, Sudapin,Kidapawan City

Alternative Fuel Stakeholders Forum 2014 AJ high time Hotel, Kidapawan City

Queuing Model Research@ Pizza Treat Delight 2014Kidapawan CityTime and Motion Study@ Ajoc Candle 2013Canapia Subd.,Kidapawan City

C. Affiliations

ORGANIZATIONS: Philippine Institute of Industrial Engineers

(PIIE) Member Working Youth Club (WYC) Member

S.Y. 2011-2016

S.Y. 2014-2015

CERTIFIED TRUE AND CORRECT

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Tertiary

Degree

Secondary

Elementary

:

:

:

:

University of Southern MindanaoKidapawan City CampusCollege of Industry and TechnologySudapin, Kidapawan CitySY 2011-2016

Bachelor of Science in Industrial Engineering

Holy Cross of Bansalan CollegeBansalan,Davao del SurThird Honorable MentionSY 2007-2011

Dolo Elementary SchoolBansalan, Davao del SurSalutatorianSY 2001-2007

DERREN IVY SHINE VEŇIGAS

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dried mango and mango juice production

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