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HeaVCO Private Limited

1.0 EXECUTIVE SUMMARY HeaVCO is a company that contain by 4 main managers and the leader is CEO. The other mangers are operation manage6r, marketing manager and financial manager. The strength and successful of the organization is depend on the manager to manage the business. Our organization has a motive and objective to achieve our target. The companys business philosophy is to develop and commercialize coconutbased products, while at the same time empowering local communities through integrating local communities business activities into the companys processes. Our company produces and sells products such as virgin coconut oil. The company started the business with one product: virgin coconut oil, which is a popular food supplement product. Virgin coconut oil (VCO) is the newest, highvalue coconut product very much sought after for its human, nutraceutical benefits and as a functional food. World demand for VCO is rapidly increasing. VCO production, which at present is mostly done at household, micro- or village-scale levels, is rising rapidly and has excellent potential for improving coconut farm incomes by five to eight-folds over traditional copra production or sale of fresh nuts. Asian Pacific Coconut Community (APCC) and member countries are strongly promoting VCO for health and improving livlihoods of smallholder coconut processors. However, one major concern is that unless VCO is produced correctly under well-managed, hygienic conditions, the poor quality oil produced will not meet prescribed standards, and may not be suitable for human consumption. The fast developing niche and high value markets for VCO as a food supplement, as a body moisturiser and carrier oil for aromatherapy, as a hair conditioner and as other applications, is generating a great deal of interest among coconut farmers and landowners, businessmen and entrepreneurs. The attraction is in the different processes for producing VCO with the goal being a possible source for improving livelihoods and incomes. In terms in this business plan, our company will provide a production on VCO by industrial scale bit for the starter, we will do it by homemade. This is the starting point to promote our product to the consumer or customer and established

HeaVCO Private Limited


a trust on them. This is also a starting point to gain their attraction towards our product. Basically, VCO is defined as Oil obtained from the fresh, mature kernel (meat) of the coconut by mechanical or natural means, with or without the use of heat, without undergoing chemical refining, bleaching or de-odourising, and which does not lead to the alteration of the nature of the oil. Virgin coconut oil is suitable for human consumption without the need for further processing. It has a fresh coconut aroma that can be mild to intense depending on the oil extraction process used. 2.0 COMPANY PROFILE 2.1. Company Profile Basic Information

Company Name: Business Type: Product/Service: Address:

HeaVCO Partnership Virgin coconut oil (VCO) 33, Jalan Mutuara Emas 7/6, Taman Mount Austin, 81100, Johor Bahru, Johor, Malaysia.

Ownership & Capital Year Established: Ownership Type: Trade & Market Main Markets: Penang, Johor, Selangor, Kuala Lumpur August 2012 Private Limited

HeaVCO Private Limited


2.2. Company Description Logo

Motto Leap Towards The Healthy Wealth

2.2.1.1.

Objective

HeaVCO is produced to meet the demand of the market. The objectives are: To get a maximum profit from time to time. To increase the customer. To create job opportunities to people who is unemployed. Follows the campaign of government to the Healthy Life.

HeaVCO Private Limited


2.2.1.2. Mission

Our mission is to manufacture the finest virgin coconut oil and associated products available on the market today. We intend to do this operating with honesty and integrity. We would hope that we can share our success with people who are a lot less fortunate than ourselves. We will always pay coconut farmers a fair price for their coconuts and we will always pay our employees a fair days pay for a fair days work. We will never compromise the quality of our oil to increase the yield. Virgin Coconut Oil is a totally natural product, made using the finest organic coconuts. Nothing will convince us to alter our production methods.

2.2.1.3.

Vision

We expect, over the next few years, to see virgin coconut oil recognised for the numerous health benefits it offers, this is happening, but it is happening slowly. We aim to make Virgin Coconut Oil, the premier VCO brand in the world. We aim to ship our oil to as many countries as possible. This amazing oil, with so many benefits, should be available in stores all over the world.

HeaVCO Private Limited


3.0 MANAGEMENT PLAN 3.1. Management Team and Responsibilities POSITION TASK AND RESPONSIBILITIES

Chief Executive Officer

The decision maker of this company Serves as a peacemaker if disputes arises between the members

Generate networks with the UMK authorities as well as other non-profit organisation related to the main aim of our business

Manages all the human resources

Human Resource Manager

Manages all the administrative works Distributes the profit amongst the shareholders

Marketing Manager

Decides the proper marketing strategies for the company Determine the pricing of the product according to the demands and needs of the market and keep track on the latest findings regarding of the business

Production Manager

Supervise all field related activities Manages the one stop centre in and out

Financial Manager

Control and balancing companys account. Make sure the budget and influence of money is clear. Help finance manager in companys budgeting.

HeaVCO Private Limited


3.2. Organization Chart

(Chief Executive Officer) HARTINA HUSSIN

Human Resource Manager ATIQAH IZYANNIE

Operation Manager CHUA HIU CHING

Marketing Manager MOOI WEI CHEIN

Financial Manager HO NEE KHING

4.0 PRODUCT DESCRIPTION 4.1. Product definition The Philippine National Standard for VCO (PNS/BAFPS 22:2004/ ICS 67.2000.10) officially defines VCO as: Oil obtained from the fresh, mature kernel (meat) of the coconut by mechanical or natural means, with or without the use of heat, without undergoing chemical refining, bleaching or de-odourising, and which does not lead to the alteration of the nature of the oil. Virgin coconut oil is suitable for human consumption without the need for further processing. VCO consists mainly of medium-chain triglycerides, which are resistant to peroxidation. The saturated fatty acids in VCO are distinct from animal fats, the latter consisting mainly of long-chain saturated fatty acids. VCO is the purest form of coconut oil, essentially water clear or colourless. It contains natural Vitamin E and has not undergone any hydrolytic and atmospheric oxidation as demonstrated by its very low, free fatty acid (FFA) content (even without refining) and low peroxide value. It has a fresh coconut aroma that can be mild to intense depending on the oil extraction process used.

HeaVCO Private Limited


VCO differs greatly from traditionally produced, copra derived coconut oil, which must undergo chemical refining, bleaching and de-odourisation processes to make it suitable for human consumption. RBD (refined, bleached and deodourised) coconut oil made from copra, is yellow in colour, odourless, tasteless and does not contain natural Vitamin E, since this is removed when the oil is subjected to high temperature and various chemical processes.

4.2. Product characteristics and uses The degree of saturation and length of the carbon chain of the fatty acids comprising a particular fat or oil determines its properties, corresponding uses and its effects on human health. The more saturated the fat and the longer the chain, the harder the fat and the higher the melting point (Fife, 2001). Coconut oil is unique amid fats and oils, as it contains the highest percentage of medium-chain fatty acids (MCFA) with a carbon-chain length of 8 to 12 carbon atoms. VCO behaves and metabolises differently in the human body to other saturated and unsaturated fats or oils. MCFA in coconut oil is about 64%, with lauric fatty acid (C12) as the highest ranging from 47 to 53% depending on the coconut variety. For edible purposes, coconut oil is generally used as a frying and cooking oil because of its excellent resistance to rancidity development. It is also used as a substitute for expensive butterfat in filled milk, filled cheese and ice cream making these products cheaper without changing their palatability. When hydrogenated, coconut oil is used as margarine, shortening and baking fat. Other edible applications of coconut oil are: as a source of fat in infant formulas and baby foods because of its easy digestibility and absorbability; as a spray oil for crackers, cookies and cereals to enhance flavour, increase shelf-life and impart a glossy appearance; As an ingredient in confectionaries such as candy bars, toffee, caramels, etc.

HeaVCO Private Limited


The Spectrum of Coconut Products states that in food preparations and in diet, coconut oil performs the following functions. It serves as an important source of energy in the diet. It supplies specific nutritional requirements. It provides a lubricating action in dressings or leavening effect in baked items. It acts as carrier and protective agent for fat-soluble vitamins. It enhances the flavour of food. VCO can also be used in all applications where crude, cochin and refined, bleached, de-odourised (RBD) coconut oils are normally used, and would be a much better alternative if it could be made available in large volumes at affordable prices. In the manufacture of oleo chemicals reserved for cosmetic applications, the use of VCO instead of copra-derived oil will enhance the quality of the final product because of its hypoallergenic properties. One interesting development to note, is that VCO is being focused on specific applications distinct from the traditional uses of coconut oil listed above. The current emerging major uses of VCO are as: a hair and skin conditioner; an oil base for various cosmetic and skin care products; a carrier oil for aromatherapy and massage oils; a nutraceutical and functional food.

Mr. Arthur Bautista of the Splash Research Institute defines nutraceutical as Natural food components that provide health benefits or reduce the risk of chronic disease, above and beyond their basic nutritional function. Simply put, nutraceuticals are substances that not only nourish but also heal. Virgin coconut oil is considered a nutraceutical because studies have shown the following facts. The medium chain (C8 C12) fats in coconut oil are similar in structure to the fats in mothers milk that gives babies immunity to disease. There are also similar beneficial effects in adults, (Kabara, 2000).

HeaVCO Private Limited


VCO possesses anti-inflammatory, anti-microbial and antioxidant properties which work together to protect arteries from atherosclerosis and the human heart from cardiovascular disease, (Fife, 2004). VCO boosts the immune system. VCO protects against heart disease by increasing high density lipoprotein (HDL) that collects the excess or unused cholesterol in the body for excretion by the liver. VCO provides protection from infectious diseases not easily cured by known antibiotics. VCO is digested easily without the need for bile and goes directly to the liver for conversion into energy, (Dayrit, 2003). VCO stimulates metabolism, boosts energy and prevents deposition of fats thereby preventing obesity, (Dayrit, 2003). VCO improves the nutritional value of food by increasing absorption of vitamins, minerals and amino acids, (Fife, 2004). VCO is the worlds only natural, low-calorie fat, (Fife, 2004). VCO inhibits the action of cancer-forming substances (Clara Lim Syliangco, 1987). 4.3. Identity characteristics Gas Liquid Chromatography (GLC) range of fatty acids composition of VCO shall be in accordance with Table 1.

HeaVCO Private Limited


Table 1: Gas Liquid Chromotagraphy range of fatty acid composition of VCO Common name Caproic acid Caprylic acid Capric acid Lauric acid Myristic acid Palmitic acid Palmitoleic acid Stearic acid Oleic acid Linoleic acid Linolenic acid Composition C 6:0 C 8:0 C 10:0 C 12:0 C 14:0 C 16:0 C 16:1 C 18:0 C 18:1 C 18:2 C 18:3 C 24:1 * ND= non-detectable The fatty acid profile of virgin coconut oil is greatly dependent on the coconut variety. Studies done by the Philippine Coconut Authority (PCA) Zamboanga Research Centre, revealed that coconut hybrid varieties have a higher lauric fatty acid content (above 50%) than local tall varieties. 4.4. Colour, odour and taste Virgin coconut oil shall be colourless, sediment free, with natural fresh coconut aroma and free from rancid odours or tastes. 4.5. Specifications Virgin coconut oil shall conform to the requirements specified in the table 2. (%) ND 0.7 4.6 10.0 5.0 8.0 45.1 and above 16.8 21 7.5 10.2 ND* 2.0 4.0 5.0 10.0 1.0 2.5 ND 0.2 ND

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Table 2: Virgin coconut oil property requirements Properties Moisture and volatile content Free fatty acids (expressed as lauric acid) Peroxide value Food additives Contaminants Matter volatile at 105 C Heavy metal Iron (Fe) Copper (Cu) Lead (Pb) Arsenic (As) mg/kg max. 5.0 0.40 0.10 0.10 Specification 0.20% max. 0.20% max. 3.0 meq/kg oil max. None permitted 0.20% max.

In the absence of a laboratory analysis report, the quality of VCO can be assessed through sensory evaluation by testing the following attributes: Colour: Virgin coconut oil has a clear water appearance. Based on the studies done under the Philippines/UK Aflatoxin Reduction in Copra Project, the colour of the oil is either brought about by contaminants in the oil (as in tapahan drying of copra), or by high temperature processing and microbial contamination of the coconut meat prior to oil extraction. Depending on the type of micro-organisms that cause the contamination, the oil colour can appear yellow or pink or red-orange. Aroma: A good quality VCO does not have any rancid smell. It has a sweet coconut aroma which may range from mild to intense depending on the process used for extraction. Taste: A good quality VCO should not have off-flavours or a sour taste. It should not cause any itchiness in the throat when ingested as this is an indication that the free fatty acid content is already higher than the prescribed standard.

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Quality assurance in processing VCO Quality assurance in the context of any industry should be viewed in two ways. 1. Ensure that the product produced by any processor conforms to domestic and internationally accepted product standards. The market for VCO, whether local or international, has to be protected and sustained by ensuring that only VCO of the highest quality is produced. 2. Quality assurance should be strictly implemented to protect the consumer. The VCO on sale must be of the highest quality since there is no way for a consumer to check the quality when it is bought in a packaged container. At present, VCO is generally bought as a food supplement or nutraceutical because of the increasing quantity of literature indicating its beneficial effect on human health. In this instance, quality is of paramount importance since the product is being ingested directly and not as a food ingredient or a cooking medium.

4.6. VCO Processing 4.6.1.1. Modified Natural Fermentation Method

Fermentation generally means the addition of yeast or enzyme or suitable micro-organism to a feedstock to obtain a desired product. However, in the case of the Natural Fermentation Method for producing VCO, no other substance is added. It has been observed that when a coconut milk mixture is allowed to stand for more than 10 hours under favourable conditions, the oil naturally separates from the water and the protein.

The mechanism for this natural separation without the addition of any fermentation agent is unexplained. One theory is that the natural enzyme in coconut meat, which is subsequently transferred to the coconut milk, is being activated at some point. Another theory is that airborne lactic acid bacteria, which have the capability to break the protein bonds, act on the coconut milk causing VCO separation.

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It can be surmised that the term, Natural Fermentation Method, was coined because the water and the curd that separate out from the oil, smell and taste sour. It is natural because no other substance is added to achieve the fermentation.

Modified Natural Fermentation Method has the lowest labour requirement and the least energy input. However, if the fermentation process is not properly controlled, then it produces oil with a sour smell and relatively higher free fatty acid content nullifying the saving in labour costs as the oil cannot be classed as VCO. Precise controls for the maturity of coconuts and the ambient conditions for the fermentation room are necessary to obtain good, high quality oil recovery. The Modified Natural Fermentation Method comprises two distinct parts extraction/preparation of coconut milk and processing of the VCO from the milk.

The Modified Natural Fermentation Method has the lowest labour requirement with the least energy input of all the methods.

Oil recovery is 20 kg/100 kg fresh coconut meat.

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4.6.1.2. Extraction and preparation

Table 3: Process for the extraction and preparation of coconut milk (Source: Revised excerpt from Bawalan, (2004) Process 1) Selecting nuts Action to take Select fully matured nuts (12 to 13 months old) and de-husk; the husk should be turning brown not green. 2) Splitting and grating Split the de-husked nut into two and grate the meat either manually or through the use of motorised grater. Another method is to manually de-shell the coconut and feed the meat with testa into a Thai motorised coconut shredder. 3) First milk extraction Extract the milk from the grated coconut meat either by hand or by manually operated or motorised coconut milk press. This can be the hydraulic type, vertical screw or horizontal screw type press, manually operated or motorised. Set aside the milk obtained. Prepare the coconut milk residue (sapal) for second extraction. 4) Second extraction milk Do a second milk extraction by mixing water with the sepal obtained from the first milk extraction using a ratio 2 sapal:1 water. Press the residue again. 5) Mixing of first and Mix thoroughly the first and second milk extracts by stirring second milk extracts vigorously for about 10 minutes.

4.6.1.3.

Processing of VCO

In the traditional Natural Fermentation Method, selling and subsequent fermentation of coconut milk is done for 36 to 48 hours. However, laboratory analyses of VCO produced using this process, show that the free fatty acid (FFA) content (33% to 38%) greatly exceeds the prescribed standard of maximum 0.1%. Likewise, in many cases, coconut oil produced will be pale yellow in colour and will not meet the VCO standard.

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Table 4: The Modified Natural Fermentation Method of processing coconut milk to produce VCO Process Action a place where the temperature can be maintained at 35 40 C. Note 1: If the intention is to recover coco skim milk for further use as a beverage, then two-stage settling has to be carried out (the first stage settling is done in the refrigerator or ice box for 3 hours. After separating the cream from coco skim milk, the cream is again allowed to settle (second stage settling at 35 40 for 13 21 hours. C 2) Separation of the oil and Separate the oil from the fermented curd by using a ladle to fermented curd layers scoop the oil off the top. Note 2: Dispose of the water phase (fermented skim milk) and gummy portions by diluting with water before draining into grease trap and then into the sewage system or soakage pit. Put the fermented curd and the oil in separate containers. 3) Oil drying Drying is required to ensure that all residual moisture is removed to prolong the shelf-life of the VCO. Note 3: Apart from removing the residual oil, heating the VCO in a double boiler or vacuum dryer will ensure that fermentation will be stopped. It will also remove the faint sour smell in the oil. Note 4: If the oil is subjected to incubation (air-drying) or vacuum drying, then it needs to be filtered first (Step 4). 4) Filtration of oil Filter the VCO to remove adhering particles of fermented curd. Note 5: Filtration of the VCO produced from the Modified Natural Fermentation Method does not require special filtration equipment as only relatively large particles of curd near the surface of the oil need to be separated. Any filtering medium that can trap the curd will be appropriate. 1) Settling of the coconut milk Allow the coconut milk mixture to stand for 16 24 hours in mixtures

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Note 6: One practical and simple way of filtering the oil is by pouring the oil over sterilized cotton wool placed in the hole of a big funnel, and allowing it to trickle down. For a large-scale operation, a fabricated pressure filter with filter cloth is recommended to increase filtration rate. 5) Heating of fermented curd After VCO separation, the fermented curd is heated to recover the residual Class B oil that can be used for making skin care products and herbal soaps. The temperatures are not as strictly controlled but should not exceed 90 or the C oil will become dark yellow. Note 7: After the Class B oil is recovered, the toasted curd can be mixed with other compost material and use as organic fertiliser. Note 8: The Class B oil recovered by heating should be dried in a double boiler. Do NOT MIX with the Class A VCO. 6) Packaging and storage VCO may be stored in stainless steel containers and polylined drums. Pour oil into very dry bottles for marketing. Note 9: The recommended packaging material for virgin coconut oil (VCO) is glass. PET bottles (plastic bottles normally used for mineral water) can be used in cases where the VCO is immediately consumed. Glass is recommended if the VCO is sold in stores where it may remain on the shelf for several weeks.

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4.7. HAZARD ANALYSIS WORKSHEET

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4.9. Critical Control Points in processing VCO Common processing Critical Control Points To ensure that only high quality VCO will be produced, the following Critical Control measures should be applied in all of the processes discussed in this VCO manual. Critical Control Points for individual processes are given later in manual. 1. Receipt and inspection of nuts All de-husked nuts are inspected to segregate and reject immature, germinated or spoiled nuts when delivered to the plant. Only fully mature nuts, 12 to 13 months old, should be used for VCO production. As an indicator of maturity of the nut, the husk and shell is brown in colour and the nut makes a sloshing sound when shaken. Always ensure that the nut, while fully mature, does not have a haustorium (Figure 5) because the oil content of the kernel starts to decline once the haustorium is formed and the quality deteriorates as the haustorium grows bigger. Proper procedures must be adopted so that nuts do not break while unloading. Likewise, exposure to sunlight of the dehusked nuts during delivery, weighing and unloading should be avoided to prevent cracking of the shell that will cause spoilage. Nuts will crack and begin to decay after one hour in the sun. Figure 1: De-husked coconuts with

haustoriums; these are not suitable for VCO processing

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Storage De-husked nuts should be kept in clean storage areas with cement floors, good ventilation and adequate rain/sun cover. Avoid sun exposure of the de-husked nuts. Storage bins should be designed and partitioned so that the principle of first-in first-out can be easily implemented. The pile of de-husked nuts should not be placed directly on the cement floor but on an elevated platform (pallet) with slats so that the coconut water can flow away if breakages occur. Maximum height for the storage pile of fresh nuts should not exceed 1.8 metres. De-husked, fresh coconuts should be processed within seven days from the time of harvest. Therefore the VCO processing facility should be placed within the coconut producing areas to ensure freshness of raw material and to lower transport costs of the nuts. 2. Handling of coconut water Coconut water spoils and ferments very rapidly once the nut is opened. When the nut is split, coconut water should be collected in a container and properly disposed of in one of two ways. As another source of income it can be converted into vinegar or other products including nata de coco and electrolyte drinks, or diluted with water and flushed into soakage pits or the sewage system. Coconut water should not be left on the floor as it will attract flies and become a source of contamination. Undiluted coconut water becomes very acidic and will destroy the cement surface of the floor if it is not tiled. It also generates a foul smell once fermentation has started. 3. Drying and handling of VCO Water in oil causes it to go rancid thus shortening its shelf life. To ensure the VCO will have a long shelf-life, it should be subjected to an oil-drying process after recovery from coconut milk or extraction from dry grated or granulated coconut meat. Removal of residual moisture is critical in the VCO produced from the Modified Kitchen Method and the Modified Natural Fermentation Method. Because both are

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wet extraction processes, that is, recovery is from meat with intermediate moisture content, the end product will contain more moisture than with high pressure expelling. Drying of the oil can be achieved using one of the following methods.

Figure 2: Drying and handling VCO a) Preparing VCO samples from expeller oil for quality checking Place the extracted oil in a double boiler and heat for about fifteen minutes or until the oil has changed from turbid to water-clear colour. Oil temperature should not exceed 65 C. Incubate or air-heat the oil in the container at 50 for 12 hours or until the oil has C changed from turbid to water-clear colour. Vacuum dry using a commercial vacuum dryer at 50C. Vacuum drying is the most effective way of drying oil without the risk of the colour turning yellow but the investment cost is high, so it is not a viable option for microscale processing. A double boiler can be made by placing a stainless steel mixing bowl or basin in a larger pan that is half filled with water. Pour the oil into the smaller container. Once the water in the pan starts to boil, reduce the heat to the lowest possible setting so that the hot water remains at a simmer point. Do not allow oil to boil or the container to boil dry!

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Remember! Water is the arch enemy of oil! Oil drying temperatures should not exceed 65 or oil will be yellow which is then C classified as Class B oil. 4. Handling of coconut milk Coconut milk contains protein and other nutrients, is low in acid and has a high moisture and nutrient content making it very susceptible to microbial contamination and rapid spoilage. Because of these characteristics, grating or milling of fresh coconut meat and subsequent extraction of the milk should be done in a clean environment and under very strict sanitary conditions. The following critical control measures must be applied at all times: Always ensure that grating or scraping of coconut meat and subsequent milk extraction is done under sanitary conditions by observing good personal hygiene. Wash hands with soap and water before doing any preparation work; wear the necessary protective clothing with hair cover. Do not wear jewellery on the hands or arms. Ensure that all materials, utensils or equipment used in extracting and holding coconut meat and milk are thoroughly cleaned and rinsed with hot water. Utensils should be free from any soap residues. High quality clean water should be used for the diluents or re-hydrating agent for the second milk extraction. It should be free from microbial contamination and low in mineral content. Filtered, purified or demineralised water is preferable. Coconut water can also be used as diluents, but a specific handling procedure must be observed to avoid microbial contamination. The coconut water must be filtered and immediately placed in a refrigerator or ice box while waiting for the grating and first milk extraction to be completed.

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1) Low Pressure Extraction and High Pressure Expeller Critical Control Points The low pressure extraction methods and the high pressure expeller methods belong to the general category of Fresh-dry processing of VCO where the VCO is obtained by first drying the fresh, grated or comminute coconut meat and then pressing the dried meat to separate the oil. Hence, in both processes, the most critical step is the drying of the meat. The following critical control measures must be observed when preparing the coconut meat for subsequent oil extraction. Dry the coconut meat within four hours of opening the nut. Delay in drying will allow bacterial contamination of the fresh meat and will result in an unacceptable yellow oil. Dry the grated or granulated coconut meat at a temperature of 70 to 75 using an C indirect, hot-air dryer, either steam heated or biomass fired. If the drying temperature is too low, bacterial contamination will occur resulting in unacceptable yellow oil. On the other hand, if the drying temperature is too high, the grated meat will burn, also resulting in yellow oil. Under conditions of low humidity and clear, hot days, the grated meat can be solar dried. A well-designed solar dryer can normally generate a drying temperature of about 70 that is sufficient for the intended purpose. However, additional heat may C be needed to ensure this temperature is reached on cloudy, rainy days. Open sundrying is not recommended as grated meat can become contaminated with dust and insects and temperatures are too low to prevent bacterial breakdown of the meat. If using a direct contact dryer similar to the one being used in the South Pacific for the Direct Micro Expelling (DME) process, constant attention and turning of the grated meat is required to prevent it from becoming scorched or burnt, which will result in an unacceptable yellow oil. Dry with care and maintain good hygiene handling.

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5.0 COMPETITOR ANALYSIS The main competitors are come from competitors that produce same or likely product and market their product at the same place. The main competitors come of our business of course from farmers that practice same or likely method that we use that is chemical free and market their product near or on same place we have for example of our business. This is one competitor which running the same business with us: Table 5: Competitor Analysis Company Joyce Chua Strength Established over 10 years Good reputation in society Innovation of product Carry out HACCP during the production Aaron Yen Carry out HACCP during the production Export VCO to foreign country Carry out HACCP during the production Limited capacity Unable to fulfill the production Weakness Unable to fulfil the

demand from society

demand from local society New established in society No HACCP Small business Low income

Luen Yen Yee

Others

Have a regular customers Lower price compared to others

Micro business No promotion Low production capacity

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5.1. Market Share Market share refers to the portion of the market that the business can control after taking into consideration market size and the competitors position in the same market. Market share also refers to percentage of the total market size. Table 6: Market share before the entry of HeaVCO Company Joyce Chua (WT SUMBER BUMI SDN BHD) Aaron Lim (Adirondack (M) Sdn. Bhd) Luen Yen Yee (PRESTIGE POOLS CONSTRUCTION SDN BHD) Others 19 Total = 100 Market share, % 33 26 22

Table 6: Market share after the entry of HeaVCO Company Joyce Chua (WT SUMBER BUMI SDN BHD) Aaron Lim (Adirondack (M) Sdn. Bhd.) Luen Yen Yee (PRESTIGE POOLS Market Share, % 26 20 18

CONSTRUCTION SDN BHD) HeaVCO Others 28 8 Total = 100

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Sales (%)
Joyce Chua (WT SUMBER BUMI SDN BHD) 33%
19% 33%

Aaron Lim (Adirondack (M) Sdn. Bhd.) 26%

22% 26%

Luen Yen Yee (PRESTIGE POOLS CONSTRUCTION SDN BHD) 22%


Others

Figure 2: The market share before the entry of HeaVCO

Sales (%)
Joyce Chua (WT SUMBER BUMI SDN BHD) 26%
8% 28% 26%

Aaron Lim (Adirondack (M) Sdn. Bhd.) 20% Luen Yen Yee (PRESTIGE POOLS CONSTRUCTION SDN BHD) 18% HeaVCO 28%

20% 18%

Others 8%

Figure 3: Market share after the entry of HeaVCO

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6.0 MARKETING PLAN 6.1. Marketing summary Marketing is one of the most important element is forming a business. Without proper marketing plan, a business will never achieve their goals. The main objective of marketing plan is to satisfy customers wants and needs through creating and exchanging products and value with others as well as contributing towards profit for the business. For that purpose, the partners had made a research to identify the demand of the people. In consumer needs and wants, there are some factors that make Virgin coconut oil become a demand for customers. The factor that influences the customers to buy the product is because giving healthiness for everyone. This is because virgin coconut oil provide varies of benefit such as Lowers cholesterol and blood pressure levels, cancer fighting, natural antibiotic and etc. This means that it make human become healthy and prevent human for causing obesity and have a strong immune system. For the marketing plan conclusion, the most important thing that influence our strategies in winning the customers heart and also compete with other company is our promotion concept that acting more friendly to the customer beside we supplying the best product for them. Also providing a high quality product will fulfil the customers need and wants nowadays. When the customers are satisfied and trust our product that we provide, they will be our fix customers and will buy our product when needs. For the increasing our sale, we offered confidence work strategies that is also to fulfil the customer need and want. They are, pricing strategies, distribution strategies and product strategies that is the main scope in marketing plan. All of the strategies that being mentioned are important in achieving the marketing objective. 6.2. Marketing Objectives Generate a 5-10% yearly increase in sales. Increase market penetration every year To conquer and dominate in local market Expand the business and open more outlets in Malaysia

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6.3. Marketing concept Our marketing concept is production orientation. The focus of the business is not only the needs of the customer, but also reducing costs by mass production. Therefore, we have sell with lower price and can compete with others. 6.4. Marketing strategy 6.4.1.1. Target market

Our target market mainly focus in housewife and company who used virgin coconut oil to produce shampoos, conditioners, moisturizers, health supplements, massage oils. Although coconut oil can modified and use in others way but we will focus it as cooking oil and our target is housewife. Table 7: Target Market Analysis Target Market(s) Moderate and high income Retailer High education Others Percentage (%) 45% 30% 15% 10%

6.5. Market segmentation 6.5.1.1. Geographic Segmentation

We will act as supplier and wholesaler. Our product will sales in varies mini market and hypermarket such as Giant and Tesco. The entire place we sell is the hot spot place since we are still new company cannot just simply send our product to vary place. At the early stage, we will focus in hot spot to make our company name become familiar first. So we will focus on the area that people will go everyday to buy daily need product.

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6.5.1.2.

Demographic segmentation

In market segmentation, that is demographic aspect; our main target is for the moderate and high income. We also focused on high educated person. The reason why we focused on this group is because they can think wisely before buying a product. Not only high educated people, we also focus our product as raw material for big company to produce shampoos, conditioners, moisturizers, health supplements, massage oils. 6.6. Marketing Mix As we new business, we must give full concentration in marketing strategies and efficient, systematic administration and management must be done. Our marketing strategies consist of 6Ps indicate for aspect: 1) Product or service strategy 2) Price strategy 3) Distribution strategy 4) Process strategy 5) People strategy 6) Physical environment

1) Product or Services Strategy Our business focuses on marketing strategy in the market aspect. The purpose of this marketing strategy is to fulfil needs and wants and make them satisfy with it. The product strategies are as follow: Quality Due proper sales technique, complete and high quality of product is very importance to avoid the product from the defect during store delivery process. We also will make sure the concentration of the virgin coconut oil is 100% without adding others oil. HACCP analysis and CCP will be focus on to produce high quality product. We also will apply HALAL certificate to convince muslim.

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HeaVCO Private Limited Packaging For packaging aspect, we have focus on 100% closed of the cap. This can make sure our product do not change or spoiled because of the leaking. The design of our product is unique, clean and clear to looking on. The benefit of the product will mention clearly to attract the customer. The attractive design packaging will convince the customer to try on our product.

2) Price strategy The price strategies is main target is to achieve our business objectives or goals. The price of the virgin coconut oil will be provided with a similar and suitable price according to the cost of production. We offered the high quality of product and cheapest compared competitor. It is to attract more customers and get them to trust our business. This is because we produce high volume of product. This allows us can put a low price compare to competitor. This is penetration strategy. To determine the price, we consider all cost involve in production. We need to make sure our business is able to get return from sales, first we compared with competitor price in the market to make sure our product price is not too cheap or expensive and then we analyze what is the price that the customer willing to pay.

3) Process strategy For the process strategy we are using pilot plant scale because we dont have enough models. By using pilot plant scale we can produce enough production for sales.

4) Place or Distribution Strategy Our product located in varies mini market and hypermarket such as Giant, Tesco. For the companies that want to buy the product with us can buy contact us. They can buy from our company. If the quantities that buy from them are higher, we will provide delivery service. For the mini market and hyper market we will send to their place.

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HeaVCO Private Limited Distribution Strategies Distribution strategy is aimed at establishing a structured and controllable distribution system to ensure the product offered reached the target customer. A distribution channel moves goods from producers to consumers. The most common form of distribution is: 1) Manufacturer Customers

Customer can get lower price if they buy VCO direct from manufacturer compared they buy at hypermarket because the retailer will eat up mark up to make profit. So, the price will be higher 2) Manufacturer Retailer Customer

5) People strategy We provide a hotline to allow customer to call when they face a problem after consuming our product. All the workers are well training. We will not allow worker who do not train before accept a phone called. 6) Physical environment The product that we product have a good looking and the design is a modern style. The oil that produces will be clear and the customer can see it clearly.

6.7. Promotion Strategy Promotion is important in order to get the product well known by public. Good promotion strategies will attract people to buy our product and it will increase our sales. We will organize many promotion methods in introducing our product to the customer and in local market. The promotion that will be done by us is like:1) Advertisement Advertisement is a very important way to promote our product. We need to promote our product in news paper, magazine and internet. Nowadays internet already becomes a very important pathway to provide information to customer. We can record a video to promote our company.

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2) Sign Board This method is very important to make people know about our product. Sign board will be put near the Hot spot in the city or in highway. It makes the customer familiar with our product. 3) Sponsor for healthy event This allows customer know our objective and our company roles. We are the company who enhance healthy life-style. This can increase company reputation. 4) Business Card The business card will be given to the target customer such as the company that use virgin coconut oil as raw material so that they can easily contact us.

7.0 OPERATION PLAN Production/Operational plan is defined as the production planning of a product or service according to the quantity, quality, specification and time specified by the customer at the lowest cost possible. An operational activity includes: a. Business inputs b. Transformation process c. Output

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Business Inputs Labor Raw material Machinery Technology Capital Transformation Process Service Output Product

Controlling

Figure 4: The operational Activity I. Transformation Process

a) Generally the transformation process: 1. Materials (coconut milk) 2. Machinery & equipment (coconut grinder, filter) 3. Technology (grinding, fermentation, packaging) 4. Labor (machine operator, general worker)

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In the production of VCO, the transformation process is listed as below: Raw Materials 1. Coconut milk 2. Coconut meat

Machinery and Equipments 1. coconut dehusking 2. coconut grinding 3. coconut milk extracting 4. bottles

Technology 1. Grinding 2. Fermenation 3. Packaging

b) Efficiency of the Transformation Process The productivity index (P.I) is used to measure the effectiveness of the transformation process Formula: P.I = Output/Input cost Example: Sales = RM2, 000/day Operational cost = RM1, 200/day P.I = RM2, 000/RM1, 200 = 1.67 P.I index of more than 1 indicates the efficiency of the transformation process.

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II.

Process Flowchart It is schematic representation of the production/operation process from

the start until the product or service is sold or delivered. It must show: The sequence (step by step) Description of each process/activity Time (days, hours or minutes)

Make coconut milk (use only old coconuts which is in brown color)

Fermented overnight (the separation occurs naturally during fermentation for 24-48 hours in an enclosed container).

Fermented at room temperature

Final product: virgin coconut oil floats on the surface

Packaging

Finished product are stored before deliery

Figure 5: The process flow of production VCO

c) Material Requirement Planning So, in the production of VCO, we need atleast 500 of coconuts to be processed into VCO.

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d) Acquisition of Machinery and Equipment For the production of homemade coconut oil, we need coconut dehusking, coconut grinding, coconut milk extracting, and bottles for the production of VCO. There are several factors to be considered before buying machinery & equipment: Price Quality in terms durability Easiness of acquiring spare-parts Maintenance Technology & simple to operate Reputation of the supplier After sales service e) Operational Manpower Planning The function of operational manpower planning is to determine the volume of production. It also helps in determine the standard time in producing a unit of product, man productive hours, determine number of workers and the source, and calculate the cost of direct and indirect labor. In this context, when the manpower planning is increase, the production of VCO also increases. The standard time for producing VCO is maximum 2 days in the room temperature without using any heat treatment. So, for the beginning, we will do by ourselves which are five of us in order to reduce the labor cost. We will do the work by shifting in order to gain the high production of VCO.

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Table 8: Manpower Planning in HeaVCO POSITION Chief Executive Officer Marketing Manager Financial Manager Human Resource Manager Chief Operating Officer Total NUMBER OF STAFF 1 1 1 1 1 5

f) Selecting a Location There are several factors to be considered: Distance from source of materials Supply of labor Transportation Distance from target market Price of the property Other factors: Basic infrastructure & facilities g) Operation Budget For the operation budget, we will take these few things into considerations which are: Cost of machinery and equipment Direct materials Direct labor Prime cost = Direct materials + Direct Labor operational overheads Utilities

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The following section will identify the proposed operational plan for ABCO: I. Location And Premises

We had selected Johor Bahru as our starting point in business operation. JB is a developed city with the high demand on the health. That is the reason we choose JB as our first operation business. II. Legal Environment

There are no current legal obligations for HeaVCO. III. Personnel

HeaVCO will start with a total of 5 initial members that includes owners and management team. IV. General Operating Hours

HeaVCO intends to operate Monday thru Saturday from 8 am to 5 pm. ABCO will be operational year round. V. Machinery, equipment

Due to the involvement in making VCO, our company produces VCO as our product. Therefore, equipment plays a vital role in providing the excellent product to the customers. Purchasing of equipment require huge amount of capital, which in turn comes to the payment via instalment annually which ease of progress of companys development in terms of cash flow. So, our company decided to lease equipment which to overcome the issue of capital insufficiency. For the production of VCO, we need coconut dehusking, coconut grinding, coconut milk extracting, and bottles for the production of VCO. VI. Assets

A unit of van is used which functions as delivery transport to the customer.

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VII.

The production process

As with any production process, the operational workflow for the business is quite uniform and simple to follow. The following is a step by step outline of how production of VCO has been made: Step I: Make coconut milk (use only old coconuts which is in brown color) Step II: Ferment overnight (the separation occurs naturally during fermentation for 24-48 hours in an enclosed container). Step III: put it into the refrigerator and the virgin coconut oil is ready to use. The virgin coconut oil floats on the surface. The fermentation of virgin coconut oil has been done. VIII. Raw material

The raw materials that had been used in this production of VCO is coconut whether in coconut milk or coconut meat. IX. Customer service plans

Our company will provide a customer services plan. This plan is implemented to those who are take order the VCO with us whether in large quantity or small quantity. For the higher quantity, we will deliver to their home or company but depends on the locations. If it is more than 30km from our company, we will charge the delivery fee upon the product price. If it is not more than 30km, we will provide free delivery for them. They must purchased atleast 50 bottles of VCO.

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7.8. Service Execution Timeline Table 9: HeaVCO will follow this service execution model to enter in the oil market. Task January Choosing location Company Development Hiring training

Execution Period February March April May June July

and admin staff Advertising Opening HeaVCO of


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8.0 SWOT ANALYSIS I. SWOT ANALYSIS

Table 10: SWOT Analysis of HeaVCO

STRENTGHS
1. No side effect

WEAKNESSES
1. Excessive Harm Coconut Oil May

2. Healthy

2. Flavour does not taste good

3. Virgin Coconut Oil has long shelf life

3. Target moderate and high income people

OPPORTUNNITIES
1. Healthy Life Style

THREATS
1. New distribution channel (new competitor)

2. Low Competitor

2. The

price

of

raw

material

increase

3. High Demand In Indian Market

3. Economy downturn

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a) STRENGTHS 1. No side effect As we know virgin coconut oil is very safe to use for people all over ages. In addition this product does not harm people and does not have side effect when use it. 2. Healthy Moreover, the virgin coconut oil can treated hair damage and hair loss. It is one of the earth friendly products and does not contain any chemical during the production. It improves digestion and nutrient absorption encouraging weight loss. It also controls killer disease such as diabetes. Finally it is an antioxidant product. 3. Virgin Coconut Oil has long shelf life Actually, virgin coconut oil has long shelf life compare to other oil. This is because virgin coconut oil is completely natural and unrefined. The unique texture, taste and quality of our oil is achieved by using a traditional cold-press process and by using only mature, organic coconuts. Coconut oil is highly stable and does not create any Trans fat. Coconut oil contains no cholesterol and provides lauric acid, which has been shown to boost the immune system. b) WEAKNESSES 1. Excessive Coconut Oil May Harm Everything that we take excessive can harm ourselves. For example when consume too many of coconut oil even though the oil is good to our health it will give bad impact to our health. It will gain weight and hair loss. 2. Flavour does not taste good Coconut usually have a smell that is nor bad or nice. But during the fermentation process, the coconut milk will produce sticky sour smell and the sour smell will actually attached to the end product. Not strong as during the fermentation process. So customer will think twice to buy this product.

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3. Target moderate and high income people Because of the high production price and the raw material is quite expensive, therefore it cause low income people cannot afford. For the high educated people , they will concern in healthy product . This cause out market become small compare to others product. c) OPPORTUNITIES 1. Healthy life style Nowadays, people are more concern about a healthy life style. Even though there is a lot of healthy product out there, they still want our product to maintain their health condition. This is due to what we offer the benefit of our product. 2. Low competitor In the market, there are low competitors in the production of virgin coconut oil. This is because the product come from bio-product sources and not many people know how to produces product from bio-materials. 3. High demand in Indian market Usually in daily life, Indian love to use virgin coconut oil. For example, they applied it to hair and skin. Due to high demand of this product, our company has high potential to produce more virgin coconut oil. d) THREATS 1. New distribution channel (new competitor) When the product is known for the benefit and the business is profitable, many new competitors will appear and take advantage of this opportunity. As the premier entrepreneur in this sector, we have to maintain our quality of the product so that our customer still trusts in our product. 2. The price of raw material increase For the price, our company sold the product still cheap and we do not have to worry for the other opponent. Nowadays, the price of raw materials is increase but we cannot simply increase the price of our virgin coconut oil due to competitor. In

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that case, financial manager has to find the solution on how to solve the price of the product such as search for new supplier. 3. Economy downturn Economic downturn will cause lower expenditures by consumers, lower demand for products and services, lower productions and job cuts. Lower cash flows and limited financing are the major challenges faced by our company.

9.0 FINANCIAL PLAN 9.1. Financial Objectives Decrease customer acquisition costs by every purchase Holding spending, as a percentage of sales, at a steady rate. Achieve positive net worth by years two. Capture and maintain a gross margin of 10-20% Our initial capital for this business is RM 300, 000. We estimated our return of investment is shown as below:

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9.2. Income Statement Table 11: Income Statement YEAR Goods of sales A. DEVELOPMENT COSTS 1. land rental 2. Renovation Sub-total TOTAL A 120, 000 6,000 16,000 142, 000 120, 000 120, 000 120, 000 120, 000 120, 000 120, 000 1 500,000 2 600,000 3 750,000 4 900,000

B. OPERATIONAL COST 1. Company maintenance 2. Staff Salaries & Wages 3. Equipment maintenance 4.Insurance(company) 5. Employees' Welfare 6. Taxes & Permits 7. Utilities cost 8. Advertising fees 9. Equipment 10. Miscellaneous TOTAL C 7,000 30, 500 1, 000 1, 500 1, 000 1, 000 3, 000 2, 500 150,000 500 198, 000 7,500 35, 500 1, 000 1, 500 1, 000 1, 000 3, 000 2, 500 500 53, 500 8,000 38, 500 2, 000 1, 500 1, 000 1, 000 3, 000 2, 500 500 58, 000 9,000 40, 500 2, 000 1, 500 1, 000 1, 000 3, 000 2, 500 500 61, 000

TOTAL OF EXPENSES INCOMESTATEMENT

340, 000 291,500

173,500 426,500

178,000 572,000

181,000 719,000

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9.3. Cash flow for 4 years Table 12: Cash flow for 4 years 2012 Liabities Equity ToTal asset RM 40 000 RM 45 000 RM 85,000 2013 RM30,000 RM 60 000 RM 90,000 2014 RM 28,000 RM 72 000 RM 100,000 2015 RM 19,000 RM 101 000 RM 120,000

9.4. Balance sheet Table 13: Balance sheet Current assets Cash Account receivable Inventory Total current assets Current liabilities: Account payable Total current liabilities Working capital Noncurrent assets: Equipment Utilities Plus Noncurrent assets: Total assets less current liabilities Net assets Stockholder equity: Common stock Retained earnings(Inventory + Equipment + Utilities) Total owners equity RM 50 000 RM 40 000 RM 90 000 RM 90 000 RM 90 000 RM 12 000 RM 3 000 RM 15 000 RM 10 000 RM 10 000 RM 75 000 RM 50 000 RM 10 000 RM 25 000 RM 85 000

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10.0

CONTROL

The purpose of HeaVCO marketing plan is to serve as a guide for the shop. HeaVCO will seek customer feedback on marketing efforts and may conduct surveys or focus groups to test ad effectiveness. The following areas will be monitored to gauge performance: Revenue-monthly and annual Expenses- monthly and annual Customer satisfaction Implementation

10.1.

The implementation that will be done by Fabulocity Pets is through advertising such as mass media and internet. Besides that, flyers distribution will be done around Kuala Lumpur area. Enlightenment and awareness programme can be implemented through advertisement regarding the funding. 10.2. Contingency Planning

Difficulties and risks: Problems developing a sufficiently large client base. Significant economic downturns.

Worst case risks include: Determining that the business can no longer support itself. Having to liquidate equipment to cover liabilities.

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11.0 CONCLUSION Today a trend has the high demand for Virgin Oil. That is the main reason we developed our HeaVCO Company in order to meet the demand the market. We have management capability, industry attractiveness, and competitive advantages. As a result, this is the best business opportunity which compliance with our motto, Wealth to Health. From the research, Virgin Coconut Oil has been reported to help many skin problems as well and it has many benefits. Last but not least, more improvements, invention and research should be done in order to improve the quality of virgin coconut oil and fully utilize the natural resource. We have focused on cost-based strategy. This business plan has been developed in order to create a healthy lifestyle. In a nutshell, HeaVCO Company is the best producer in producing pure virgin coconut oil. 12.0 REFERENCES 1. http://tropicsbest.com/virgin-coconut-oil-centrifuge-process 2. http://www.mixph.com/2008/08/production-process-of-coconut-flour-andvirgin-coconut-oil.html 3. http://www.bizplancorner.com/samples/health-club-business-plan.pdf

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13.0 APPENDICES 1. Guideline and Control for making VCO

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2) Packaging Material

Manufacturing by: HeaVCO MANUFACTURING SDN. BHD (183510V) 33, Jalan Mutuara Emas 7/6, Taman Mount Austin, 84000 Muar, Johor, Malysia. Tel: +607-89010423 Fax: +607-89010422 Contents: 100% Pure Virgin Coconut Oil 250mI Product of Malaysia

3) Business Card

HeaVCO
Leap Toward Healthy Wealth

www.

heavco.com

Jenn Chua
Tel: +607-89010423 Fax: +607-89010422

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