BUSINESS PLAN

Startup Name: SwathiCo

Product: Packaged Tender Coconut Water




SwathiCo -Tasty, Healthy and Energizing








Prepared by

Rakesh K
3
rd
Sem, MBA Full Time,
Roll No: 27
School of Management Studies,
CUSAT














Table of contents:

Contents Page No.
1.Executive Summary 3
2.0 Company Summary
2.1 Industry Overview 4
2.2 Company Description 4
2.3 Mission Statement 5
2.4 Critical Success Factor 5
3. Products
3.1 Product Description 6
3.2 Unique Features 7
3.3 Production Process and Technology 8
3.4 Follow on Products 9
4.0 Market Analysis Summary
4.1 Industry Analysis 9
4.2 Market Analysis 10
4.3 Competitor Analysis 11
5.0 Marketing Strategies
5.1 Targeting Strategy 12
5.2 Pricing Strategy 12
5.3 Distribution Channels 13
5.4 Promotion and Advertising Strategy 13
6.0 Development 14
7.0 Management 14
8.0 Operations
8.1 Operation Strategy 15
8.2 Location 16
8.3 Personnel Requirement 16
8.4 Production 17
8.5 Operational Expenses 17
9.0 Financials
9.1 Startup Funds 17
9.2 Breakeven Analysis 18
9.3 Projected Profitability 20
10.0 Financial Assistance 21
11.0 Conclusion 21
12.0 References 22







1. Executive Summary

SwathiCo is a privately held firm engaged in production of packaged tender coconut
water. The water of tender coconut is a sterile, nutritious, thirst quenching health drink.
The pure and sweet tender coconut possesses enormous therapeutic properties and is a
thirst quenching refreshing health drink for all age groups. It is loaded with natural
sugars, salts, and vitamins and is low in fat, calories and has no cholesterol. It's a highly
rejuvenating tonic that can ward off fatigue in an instant. SwathiCo takes the natures gift
in its natural form by offering the tender coconut water in cans and simple packets that
are food grade and eco-friendly.


Our emphasis is on delivering Gods gift in its true and natural form. We promote our
product as a natural thirst quencher, a health drink and also as a substitute for artificial
energy drinks.SwathiCo offers quality coconut water drink in its natural form. Our vision
is to be one of the largest producers of packaged tender coconut water by the year 2015
and to be a major player in the natural foods market by 2025.

Farm fresh tender coconut are selected and natural tender coconut water is squeezed out,
untouched by hand and put through a special process and packed in food-grade cans,
which keeps it fresh for 9/18 months. The taste is natural and hence good. Tender
Coconut Water is considered the healthiest & best sports drink in the world, because it
contains vitamins and proteins. The benefits of tender coconut water discovered by
ayurvedic experts centuries ago, is even today being put to use in modern hospitals
worldwide.

The size of soft drinks industry is estimated to be approximately 50 billion dollars and is
growing at a rate of 6 to 7% annually. The per capita consumption of soft drinks in India
is around 5 to 6 bottles compared to Pakistan's 17 bottles, Sri Lanka's 21, Thailand's 73,
the Philippines 173 and Mexico 605.Coconut products are gaining popularity world wide
.FAO studies contributed significantly to its new acceptance by raising the level of
respectability of coconut products.SwathiCo aims at capturing the huge potential offered
by both domestic and international market.

Tender coconut water is recommended for people of all ages. With the consumers turning
health conscious and preferring natural products, we believe that our product has a strong
market both in domestic circles and in countries abroad. Our main target customer is the
ordinary aam admi(common man on the roads).Secondly we target the young
generation who have a fancy for energy drinks. We also target the sport persons with our
special energy pack. We want to make available our drink for
homes,offices,hospitals,sports persons,marriages,other occasions, hotels and restaurants.


The market and financial analysis indicate that with a initial start-up expenditure of Rs.
24 lakhs.SwathiCo can generate 13 lakhs in sales in first year, 15 lakhs in sales in second
year and about 23 lakhs in sales in third year.SwathiCo aims at achieving net profits of
7lakhs by end of third year. We achieve our breakeven target in about 2.5 years times.

Advantages of investing in this industry:
Good average returns on investment over the life of the project.
Faster recovery of investment
Year round availability of cheap raw materials.
With the use of appropriate machinery, the labor involved is not expensive, as it
is mostly unskilled and widely available.
A global market
Government incentives for agro-processing operations.


2.0 Company Summary

2.1 Industry Overview

The Indian packaged tender coconut water is still an industry in its development
phase.There exist very few players in this market.SwathiCo aims to position its product
in the general market where exists players like Pepsi, Coco-Cola,Parle Agrofoods etc
who are major players in soft drink segment.The emerging trend among the consumers to
go for healthy and natural food products will drive this industry. Coconut water is a fruit
juice with many unique features and a major one is its low calorie content when
compared to other 100% juice products it has slightly less than half the calories of apple
or orange juice. This makes it a very attractive prospect for weight management-
positioned juices.




2.2 Company Description

SwathiCo will primarily engage in extracting, processing and packaging of tender
coconut water into cans, bottles ready to be delivered to the stores. It is a privately held
firm.SwathiCo will be located at Perumbavoor in the state of Kerala.We have identified a
location which is closer to the coconut farms and a good supply of water throughout the
year.SwathiCo sources the tender coconuts for its requirement from its own farms and
also additionally from other farmers directly. Our processing unit has an capacity of
processing 20000 litres of tender coconut water annually.
We intend to use modern technology for extraction of coconut water. The machines will
will be sourced from Coimbatore and customized for our requirements.SwathiCo will get
the storage technology from the Defence Food Research Laboratory, a Premiere Defence
Lab, under the aegis of Ministry of Defence, Government Of India by paying a one time
license fee of Rs 3lakhs.



2.3 Mission Statement

We promote our product as a natural thirst quencher, a health drink and also as a
substitute for artificial energy drinks.
To deliver tasty,healthy and high quality tender coconut water in containers to its
customer.At SwathiCo,we place great importance to health, hygiene and safety while
making our products.We want to showcase this natural drink and evolve as a big brand in
soft drinks market.
Tagline: Tasty,Healthy and Energising
Our Logo:



Our Logo depicts the nature fresh tender coconut being packaged in green and eco-
friendly containers.




2.4 Critical Success Factor

Coconut water is incredibly healthy and one of the best drinks to hydrate the body.
Besides helping to remove toxins from the body and aiding digestion, coconuts have
amazing anti-viral, anti-fungal and anti-microbial properties that help to cure the disease.
Our products are nature friendly and health conscious with no harmful addictives that are
usually found in other soft drinks. Coconut water accounted for 67% of 100% juice retail
volume sales in 2010, compared to 47% in 2005 and 21% in 2003. As packaged food and
beverage markets continue to develop in terms of sophistication, consumers will
eventually be compelled by the advantages of purchasing their favorite liquid refreshment
in an easily portable, convenient and hygienic format to suit consumption occasions in
more formal environments, e.g. at the office or at school.
The support from the Coconut Development Board and technology support from other
premier agencies like Defence Food Research Laboratory, a Premiere Defence Lab are
critical factors as a sophisticated technology is required in both pest control and long term
storage.

This product exerts universal consumer appeal on the premise that unadulterated, natural,
virtually unprocessed, pure products are healthiest for the human body. This is
underlined by Euromonitor International's health and wellness data, which shows that the
naturally healthy category is the most sizeable in terms of value, accounting for almost
40% of total global health and wellness sales.
Another category, and one which is often touted as coconut water's spiritual home, is
sports drinks. This category is sadly lacking in offerings positioned as natural at present.
Sports drinks are viewed by many as chemical concoctions, not helped by the fact that
they come in a range of lurid colours the very antithesis of natural. The key stumbling
blocks are sourcing and price point. For instance, coconut water sells for roughly double
the price of mass-market sports drinks. The procurement of coconut water is still fraught
with issues of availability, quality and perishability. These problems will have to be
addressed in order to bring coconut water beverages close to the price points of existing
products in the categories in which they hope to compete.
The pest attack on coconut trees makes it difficult to get the required number of tender
coconuts from local place and for this reason we may have to source them from
neighboring states like Tamil Nadu and Karnataka.Here optimal logistics cost will play a
vital role in the profit margin.





3. Products

3.1 Product Description

We intend to sell the extracted coconut water in cans, bottles and eco-friendly packs. Our
product offerings include
1.Coco-Cool A Natural thirst quencher
2. Qi A special coconut drink with different flavours (Chocolate etc)
3. H-Plus A proprietary Coconut Water with herbal extracts, specifically
targeted at the health conscious segment.
4. Joules Promoted as a sports drink/Energy Drink

The small packs will be of 200 ml priced in the same range as the other fruit drinks in the
market. The larger capacity cans and bottles will be offered in the capacities of 1 L.






3.2 Unique Features

The SwathiCo aims to offer high quality products in attractive packages which are easy to
use and eco-friendly to dispose of. The unique features of our product are:
Product offered in Natural form as well as different flavours
Offering in various quantities as per the customer need
No more carrying heavy tender coconuts from outside. For 4 tender coconuts each
weighing approx 2 kgs, i.e. 8 kgs could be easily replaced by our 1 lt bottle
having the same and equal but less than a Kilo! And further the messy work of
cutting, untidiness and last but not the least, waste of tender nuts.
Our product can be served chilled which may not possible in case of tender
coconuts and has a long storage life.
No need of a knife to cut it, and no worrying about the knife's cleanliness.
Strict quality and hygiene measures at our factory will ensure that the product is
safe.
Patients in hospitals are safer from infection because no chopping and transfer to
glass is involved. Just pierce, insert the straw and drink.
The inconvenience of keeping bulky tender coconuts is also eliminated.
Available at the nearest supermarkets/retail shop/medical store. May be even at
the pharmacy inside your premises.
Some facts about coconut drinks:
Coconut water contains more potassium (at about 294 mg) than most sports drinks
(117 mg) and most energy drinks.
Coconut water has less sodium (25mg) where sports drinks have around 41mg
and energy drinks have about 200 mg.
Coconut water has 5mg of Natural Sugars where sports and energy drinks range
from 10-25mg of Altered Sugars.
Coconut water is very high in Chloride at 118mg, compared to sports drinks at
about 39mg.

3.3 Production Process and Technology

The starting point is selection of coconuts suitable for processing.Coconut Water of 6-7
month stage is first filtered through pressure filters and then mixed with the desired
proportion of additives plus sugar and concentrated to the appropriate level. The water is
then packed in pouches/cans/bottles and retorted in an autoclave, after which it is cooled
in a stream of cold water.

The Coconut Development Board in collaboration with Defence Food Research
Laboratory, Mysore has developed the technology for packing tender coconut water in
pouches/aluminium cans, which is available at a total lumpsum transfer fee of Rs.3
lakhs.We intend to source this technology after paying the necessary fees.


Fig: Process Flow Chart

































The Quality checks are done after each stage at regular intervals, right from the time the
raw material arrives to the final check before water is packaged.

Washing Tender
Coconut
Breaking Shell
Tender Coconut
Water
Filtration
Adding Sugar
Bottling/ Packing
Chilling
Storage
The shells are cracked open with the use of thick heavy-bladed, pointed knives that are
also used to extract the kernel from the shells. Alternatively, the coconuts may be halved
and removed with the use of a rotary grater. Unnecessary handling of the kernel may also
lead to the spread of bacteria and other contamination. We intend to use machines with
this facility to do this operation to ensure cleanliness.Special customized machines are
used for extracting and packaging purposes.


The machinery will have the following components.
The shell breaking unit
Coconut water collection tank
Filter: The micro filtration is carried out in two stages; pre-filtration using a
0.80 m pore membrane prior to going through the final micro filtration using a
0.20 m membrane.
Additive mixing tank
Coconut water storage tank
Volumetric filling machine
After being contained into respective packs, the product is shifted to the company storage
facility. All the equipments that are required can be sourced locally.

3.4 Follow on Products

SwathiCo currently concentrates on tender coconut water but it has plans to utilize the
kernel and develop them into marketable product. Besides the shell and other waste are
proposed to be sold off as scrap but we have plans to convert them into usable goods after
acquiring necessary technology. Thus diversification is on the cards. We also plan further
research and development activities in the field of coconut harvesting, processing and
storage of coconut water.

4.0 Market Analysis Summary

4.1 Industry Analysis

The per capita consumption of soft drinks in India is around 5 to 6 bottles (same as
Nepal's) compared to Pakistan's 17 bottles, Sri Lanka's 21, Thailand's 73, the Philippines
173 and Mexico 605. The industry contributes over Rs 12 bn to the exchequer and
exports goods worth Rs 2 billion. . An NCAER study says that 91% soft drink sales are
made to the lower, middle and upper middle classes. Euromonitor International's soft
drinks data shows that Brazil is currently the world's largest market for packaged coconut
water. Coconut water accounted for 67% of 100% juice retail volume sales in 2010,
compared to 47% in 2005 and 21% in 2003. This rapid share gain came primarily at the
expense of orange juice.












Fig: Demand for Aerated Drinks
Demand for Aerated Drinks:Past & Future
330
359
373
388
403
479
0
100
200
300
400
500
600
2005-06 2006-07 2007-08 2008-09 2009-10 2014-15
Year
m
n

c
a
s
e
s

Source: Ministry of Food Processing Industry,Govt. Of India

4.2 Market Analysis

Tender coconut water is recommended for people of all ages. With the consumers turning
health conscious and preferring natural products, we believe that our product has a strong
market both in domestic circles and in countries abroad. Our main target customer is the
ordinary aam admi(common man on the roads).Secondly we target the young
generation who have a fancy for energy drinks. We also target the sport persons with our
special energy pack. We want to make our drink available for
homes,offices,hospitals,sports persons,marriages,other occasions, hotels and restaurants.

Initially our efforts aim to conquer the south Indian market. The popularity gained by
coconut products abroad, gives us a good scope to export our products.

The recent studies showing the impact of aerated drinks on health has turned customer to
ignore such artificially produced drinks and go for natural food drinks.The rising
population will require larger amount of food drinks.Our product will be a natural thirst
quencher during the long summer months and during these days we see demand picking
up in Northern Parts of the country.

Market Structure
62%
38%
Overall Cola Drinks:
Fruit Drinks

Source: Ministry of Food Processing Industry,Govt. Of India
There is a huge potential for our product to compete against the cola drinks.We also focus
on areas like Delhi,North Indian States where there is huge demand for tender coconut.

4.3 Competitor Analysis

Pepsi and Coke are the major players in soft drink industry.Dabur and Parle Agro are
already into fruit juice drinks.There are however few major players in coconut water
processing with Cocojal from Jain Agro Foods being the leader.
The 50-bn-rupee soft drink industry is growing now at 6 to 7% annually. In India, Coke
and Pepsi have a combined market share of around 95% directly or through franchisees.
There are about 110 soft drink producing units (60% being owned by Indian bottlers) in
the country.
Some of the leading Brands are Coca Cola, Thums Up, Limca, Fanta, Gold Spot, Rim
Zim, Maaza, Pepsi, Mirinda, 7'UP, Mangola, Slice, Duke's, Lemonada, Crush, Canada
Dry, Campa.

5.0 Marketing Strategies

The health benefits offered by our product will be the theme and key driver for our
promotion campaigns. We intend to capitalize on the promotions by government agencies
like Coconut Development Board, who have been involved in product promotion
campaign. We also plan to enter into tie-ups with schools and colleges to offer our
product to them by establishing a counter at their campuses.To bring the product to the
masses, we will offer our product at all stores,retail outlets. Financial assistance is
provided by the government for market promotion of coconut products through the
media, participation in exhibitions / developing / hiring display facilities in super
markets, adopting attractive packaging etc. @ 50% of the project cost limiting to
Rs.10.00 lakhs for individuals.We intend to use these options.Our products will be
offered at railway stations and bus stands through our partners.
To gain popularity among the masses we also propose to have a leading sports
personality to endorse our product.We will enter into tie-ups with health centres,Gym
Centres to offer our health and energy drinks.

5.1 Targeting Strategy

Our products fall into four categories viz.,

1. Coco-Cool A Natural thirst quencher.We promote this as a replacement for
artificial soft drinks.
2. Qi A special coconut drink with different flavours (Chocolate etc).This is
targeted at young generation who want variety.We also intend to capitalize on this
product as an export oriented product.
3. H-Plus A proprietary Coconut Water with herbal extracts, specifically
targeted at the health conscious segment.The hospitals and health centres will be
our main customers.The product will be made available to general public through
medical stores.This will be a propriety product from our company.
4. Joules Energy Drink, Promoted as a sports drink.Targeted at the sports
persons or gym goers.

5.2 Pricing Strategy

Our products are nature fresh and are competitively priced. To penetrate market we will
follow penetration pricing in some markets which are dominated by artificial drinks.

On basis of analysis, we arrive at the following prices for our products.

Product
Name Rs Reasons
Coco-Cool 20
At price lower than
competitor
Qi 25 Priced due to its uniqueness
H-Plus 54 Priced due to its uniqueness
Joules 31 Priced due to its uniqueness







5.3 Distribution Channels

We have identified few distribution agencies as our partner but final selection depends on
the reach and cost benefits. For other states, we are planning to enter into alliance with
major distributors of food products as they have already a well established network and
reach.

5.4 Promotion and Advertising Strategy

Mass marketing will be employed by advertising via conventional media. The Foreign
tourist arriving in Kerala will be offered the products.
We also plan to start on-the-go stores by offering our drinks at busy junctions and school
areas.The total budget for marketing activities has been pegged at Rs.1000000.The funds
available from the government will be effectively tapped for promotion.
We are launching the products as a healthy and natural energy drink and this will be
reflected in our promotion campaigns.Creating awareness about the health benefits of
coconut water will our major challenge.
Numerous medicinal properties of tender coconut water reported are:-

Good for feeding infants suffering from intestinal disturbances.
Oral rehydration medium
Contains organic compounds possessing growth promoting properties
Keeps the body cool
Application on the body prevents prickly heat and summer boils
Kills intestinal worms
Presence of saline and albumen makes it a good drink in cholera cases
Checks urinary infections.
Excellent tonic for the old and sick
Cures malnourishment.
Diuretic
Effective in the treatment of kidney and urethral stones
Can be injected intravenously in emergency case.
Found as blood plasma substitute because it is sterile, does not produce heat, does
not destroy red blood cells and is readily accepted by the body.
Aids the quick absorption of the drugs and makes their peak concentration in the
blood easier by its electrolytic effect.
Urinary antiseptic and eliminates poisons in case of mineral poisoning.

We also plan to sponsor sports event like cricket matches, etc.As a part of our product
launch, a Kochi Marathon will be organized and all participants will be given free
samples of our product. To attract the foreign customers, we intend to use internet
marketing and other new age marketing tools.





6.0 Development

The road map for development is given below:












In two years down the line, we expect to capture 10% market share in the overall soft
drinks market. We break even in the 2.5 years. Our total sales turnover will be Rs 23,
00,000 in the year 2015.





7.0 Management


SwathiCo is a privately held firm led by a team of young enthusiastic individuals and
guided by experienced senior professionals. Our team structure consists of Rakesh who
will be chief officer. He is currently pursuing management degree from Cochin
University of Science and Technology. Shri. S. K. Nair will be responsible for finance
and accounting. He is the co-promoter of this project. He has vast experience of about 35
years at leading corporates handling finance and tax related matters. Mr.Sooraj will
handle the operations and distribution channels respectively. He has rich experience in
distribution, marketing and sales.



8.0 Operations

8.1 Operation Strategy

SwathiCo will source the tender coconuts directly from its own farms.Our key strategy is
to minimize the dependence on external players for tender coconuts. To meet extra
demand we have plans to source tender coconuts from other farmers directly.The farm
fresh tender coconuts are then processed and coconut water extracted.This water is
refined and addictives are added.After this the water is packed into cans.This is then
taken to the cold storage and later placed in company warehouses.From the warehouses
the product is taken to the retailers with the help of distribution partners.A flowchart
below depicts the major processes involved.












Fig: Process Flowchart


To account for huge demand we also plan to source the tender coconuts from Tamil
Nadu.The plant will be run in two shifts operating from 6 a.m. to 2 p.m. and from 2 p.m.
to 10 p.m.All days except Sundays will have two shifts. Sundays will be utilized for
preventive maintenance activity if any.

We will rent trucks which will be used for transporting the coconuts from farms to the
factory. The capacity of 1 truck is approximately 5000 unprocessed coconuts.
Rented trucks will be used once a week to transport the stored shells from the company to
the charcoal industry. The end product is transported in special trucks with refrigeration
and cold storage facilities to the retailers.




Cans are transported
Taken to
Fresh Tender
coconuts from
Farms
Bottling Unit
Transported
Factory Storage
Shed
Extraction of
Water
Retailer / Shops
Company
Warehouses Customer





8.2 Location

Our unit will be located at Koovapady, Perumbavoor in the state of Kerala.This place has
various advantages like easy availability of raw material. It is close to International
Airport. The place has good road connectivity. The place is approximately 30 km from
Kochi.It would be convenient to cater to the market as the place is connected to all
important places via road link. The availability of cheap labor also adds to our advantage.

8.3 Personnel Requirement

The total manpower requirement for our project is about 7 persons including the
management team. We plan to recruit the locals and provide them training. The details of
the staff required are given below along with the nature of job.

Manpower
requirement/Roles
Total
Including
Both Shifts
Type
of Labor
Salary/Wages
Rs. per
person/month
Total
Salary
/Wages
Total
annual
salary
Operators 2 Skilled 6000 12000 144000
Loaders/Helpers 1 Unskilled 4000 4000 48000



The executive team comprises of 4 members including two promoters in charge of
overall operations.
Executive Team No. Roles
Annual
Salary
Marketing and Logistics 2
Customer management,
Distribution channels handling,
Marketing Strategy, Logistics 288000
Management/Operations 2
Overall responsibility,
Finance,HR,Accounting,Taxes,legal Promoters

The total payroll comes to Rs.480000 per year. The operators will be provided training to
operate the machines. They will also be trained to do some minor maintenance and repair
work. We plan to get trained at Technology Development Centre, Coconut Development
Board, South Vazhakulam, Aluva.In the expansion phase when we add more capacity ,we
will be recruiting extra persons for the required functions and provide them with
necessary training.


8.4 Production

The key processes include coconut water extraction using the machines and filtration
process. After this we will be adding additives/flavors as per the requirement. The water
is then chilled and packed into cans of 200ml sizes. Strict Quality control is ensured at
different points by physical inspection and lab testing. The operator will be trained on
these aspects too.
We will be producing 200 cans of 200ml capacity per day which amounts to about 60000
cans annually. In addition to this we also have plans to introduce larger capacity bottles
of 1Litre gradually. A tender coconut has about half a litre of water in it which means we
need one such coconut to make two cans. Very good quality of tender coconut has about
0.75 L of water. The total capacity of our unit will be about 20000 litres of coconut water
annually.



8.5 Operational Expenses

We will source the coconuts at Rs12 per nut.The total initial investment is 24 lakhs.The
major expenses include the raw material costs which is about 5 lakhs.To optimize the
power cost we plan to alter the requirements of machine for processes which could be
done easily by humans.


9.0 Financials

9.1 Startup Funds

To arrive at the figures we have certain assumptions as mentioned. We assume that on an
average one tender coconut will deliver about 0.5 L of tender coconut water. This means
1 tender coconut can cater to 2 cans of 200ml each of the final product.
Our daily production capacity is 200 cans of 200 ml size.
Total working days in a year = 300 days
Assuming that we run the plant to full rated capacity, working 300 days in a year we need
about 200 cans * 200 ml * 300 days i.e. 12000 litres of tender coconut water.
We will source about 100 coconuts per day which means we will have about 30000
coconuts annually. This will deliver about 15000 litres of fresh coconut water. Even
assuming worst case scenario we have a buffer of 3000 litres.


Initial Start-up Costs in Rs.
Land and Buildings 1200000
Machineries 700000
Storage Facilities 200000
License Fee To DFRL (One 300000
time)
Total Cost in Rs. 2400000


Other Costs:

Other cost In Rs
Salary 480000
Raw material cost 360000
Sugar + additives cost 30000
Fixed Cost 2400000

We assume that we will get the nuts at Rs 12 per nut. The total requirement for nuts being
30,000 nuts annually.
Thus Total Start up Cost is Rs. 32, 70, 000. We expect to raise Rs 1300000 of our own
capital and borrow the remaining for remaining funds as a 10 year loan.

The machinery and equipments cover hand tools, paring knives, coconut de-shelling
machines or manual devices to crack open nuts, stainless steel buckets and containers,
Packaging machines, Cans, bottles or plastic pouches, buckets, electrical water pumps
and hoses,AC Generator.

9.2 Breakeven Analysis

The following assumptions are made: The total production of coconut water is about
60000 cans (200 can/day X 300 days).Also we assume there is no inventory i.e., the
amount of cans produced is sold in the market. For different product categories we have
taken the proportion of market we want to capture initially. The following table gives the
total sales turnover for the first year.

Table: Sales Forecast Total cans sold: 60000
Product
Price /
Unit
Percentage
of total
volumes %
No of
cans
Sold Sales in Rs.
Coco-Cool 20 40 24000 480000
Qi 25 20 12000 300000
H-Plus 54 30 18000 972000
Joules 31 10 6000 186000
Total 1938000

The total fixed cost comes to Rs 2640000 after taking into account the interest paid for
the loan (12 % worst case).

Total Fixed Cost in Rs.
Fixed costs 2400000
Interest on loans 240000
Total Fixed Cost 2640000


Breakeven quantity is given by Q = Total Fixed Costs/(Price/Unit Variable Cost/Unit)

Quantity Sold 60000
Price per Unit 32.4
Variable Costs 870000
Variable Cost per unit 14.5
Total Fixed Cost 2640000
Break even Quantity 147486



The break even quantity is 1, 47,486 units and is achievable in 2.5 years time assuming
that the production is 60000 units per year. The calculations are shown below.

Units -->
Break event
Analysis 0 60000 90000 120000 150000 160000 200000
Sales 0 1980000 2970000 3960000 4950000 5280000 6600000
Total Fixed cost 2640000 2640000 2640000 2640000 2640000 2640000 2640000
Variable Cost/Unit 14.5 14.5 14.5 14.5 14.5 14.5 14.5
Total Variable Cost 0 870000 1305000 1740000 2175000 2320000 2900000
Total Cost in Rs. 2640000 3510000 3945000 4380000 4815000 4960000 5540000


Breakeven Chart
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
0 50000 100000 150000 200000
Units
C
o
s
t

i
n

R
s
Sales
Total Fixed Cost
Total Variable Cost
Total Cost

9.3 Projected Profitability

The projected profit and loss statement is shown below.
Projected Profit and Loss
Year 1 Year 2 Year 3
Income
Sales Turnover 1260000 1452000 2310000
Other Income 150000 165000 181500
Total Income 1410000 1617000 2491500
Expenditure
Raw Materials 450000 495000 544500
Power Cost 150000 181800 219978
Employee Cost 480000 489600 499392
License Fees 300000 0 0
Miscellaneous Expenses 150000 300000 330000
Total Expenses 1530000 1466400 1593870
Profit -120000 150600 897630
Taxes 0 15060 89763
Interest Expenses 240000 240000 240000
Net Profit -360000 -89400 657630
Net Profit/Sales -28.6 -6.2 28.5

Some assumptions made are that there will be changes in the market mix of products
offered in consecutive years. We have not considered the government subsidies while
making the projections. Interest rates are calculated at a rate of 12 % annually. The first
year shows huge losses due to the one-time license fees of Rs 300000 that is paid to
acquire the technology from DFRL.

10.0 Financial Assistance

Coconut Development Board provides Financial Assistance under Technology Mission
on Coconut to entrepreneurs for setting up /modernizing / expanding coconut processing
units and promoting value added coconut based products. We wish to make use of this
facility.


11.0 Conclusion

Our company makes products that are healthy and has a huge demand both in India and
outside. The location of our factory helps us in getting raw materials at a low cost.
Plant is well connected to other places which ensure smooth logistics.SwathiCo is into a
business which is widely promoted as eco-friendly. The government is promoting the
food industry in a huge way as it is seen as an emerging industry. Its a recession proof
industry. We are investing in latest technology to extract coconut water and store the final
product. The plant is located closer to other major places in Kerala like Aluva,
Ernakulam,Angamaly etc.We have solid growth plans as we plan to invest more to
diversify into other coconut products. The product has a huge export potential. To take
into account the risks arising from pest attack on coconuts; we have plans to source them
from TamilNadu and Karnataka.
Coconut product industry has been growing leaps and bounds due the efforts taken by the
government authorities. Besides there is a changing perception among the people about
the artificial drinks as we see them shifting to natural drinks. The tender coconut water
has many advantages over the other fruit drinks.
















12.0 References


1. http://www.knowledgebase-script.com/demo/article-320.html
2. http://mofpi.nic.in/ContentPage.aspx?CategoryId=548
3. http://coconutboard.nic.in/product.htm
4. http://mofpi.nic.in/EDII_AHMD/Plantation_Spice_Products/09%20Coconut%20
Shell%20Powder.pdf
5. http://www.jainagro.com/products.html
6. Good Practices for small-scale production of bottled coconut water ,Rose
Rolle,accessed via http://www.fao.org/ag/magazine/0701sp1.htm
7. http://www.techno-preneur.net/information-desk/sciencetech-
magazine/2010/may10/nut/Coconut.html
8. http://sspindia.tradeindia.com/Exporters_Suppliers/Exporter3898.49344/Coconut-
Processing-Plant.html
9. http://www.fao.org/docrep/010/a1418e/a1418e00.htm
10. http://researchwikis.com/Energy_Drinks_Market
11. http://www.cseindia.org/userfiles/Expert_Committee.pdf
12. http://www.business-standard.com/india/news/xxx-energy-drinks-eyes-30-
market-share/116637/on
13. http://agmarknet.nic.in/ProductionCoconut.pdf