Executive Summary

This study attempts to evaluate Feasibility study of a project. It focuses on the relative
importance of component factors and its impacts on the overall feasibility study in an
organization. Since I objective and mission is to create and innovate new product and this
product will create feasible to I domestic market. In order to attain the objective of I study, all
necessary information are prepared by collecting both primary and secondary sources of data.
I have collected primary data by preparing a questionnaire and analyzed the market condition
and also meet with some agro based products suppliers. And I have collected I main concept
of starting business through internet. Every kind of relevant data I have collected through
internet by observing various factories web site outside of I country. After having all data and
information I tried to match I analysis in hypothetical ways in the context of Bangladesh. I
analyzed I project in different appraisals. These appraisals are related with financial analysis,
marketing analysis, technological analysis, economical analysis and social cost benefit
analysis. Since my new business project is to introduce egg powder and this concept is new
for whole Bangladeshi people and Bangladeshi market. So I have needed to evaluate I all
appraisals. Finally I tried to make ensure that I project is.

Page 1 of 40

1. Introduction:
Millennium Agro Food Ltd. is a new company. It is a manufacturing company, which is
going to produce and sale a new product that is Egg Powder. Egg powder will offer the
same taste, same product diversity, same nutritious value as the original egg does. But the
unique thing of the product is its production.

Companys Profile:
Millennium Agro Food Ltd. provides excellent egg powder plant as part of its various
machines for food processing industry. Egg powder plant is used to produce egg powder from
fresh eggs. 22-25% solids can be gained from every egg. Egg powder finds application in
making omelet, baking various other value-added products. This plant is capable of
processing 10,000 eggs per day and thus produces 120 ton egg powder per annum. This plant
acquires 800 sq. meters spaces for installation. This plant is very economical and provides
years of dependable service.

1. Project Background & History:

The industry has been undergoing structural change since production and marketing was
deregulated, commencing in the 1980s. This saw a reduction in production, lower margins in
the early supply chain and a greater share of returns in the retail sector. Of egg production
output, 6570 per cent is consumed in the household sector which is showing no growth.
Other sectors of consumption food service and industrial and commercial uses are
showing slow growth. The domestic egg market has suffered as the egg has lowered its
profile as a major source of protein and other sources have gained important ground. The
fresh egg category is also under pressure from the increasing demand for health and
convenience foods, which the egg sector has not been able to successfully overcome.
Eggs are full of nutrients and minerals and are consumed in different forms since centuries.
There was misconception that they are from non-vegetarian food category but now people at
large have accepted them as a vegetarian item and their consumption is increasing year after
year. Transportation of eggs is difficult as chances of breakage during transportation are
higher and it is costly also. Egg powder is comparatively easier to transport and there is no
question of any breakage during the transit.
Page 2 of 40

Egg is one kind of hi-protein food item. I get egg from various birds like (Hen, Duck etc.).
Generally it is found/ sold in natural format. But natural format bears some problems. These
are:
(i)

Egg is a perishable goods;

(ii)

It is not easily portable;

(iii)

Sometimes egg is affected by germs;

(iv)

Sometimes few businessman try to sell the artificial egg which is very much
harmful for human health;

(v)

Egg is a quickly expired item.

To avoid these problems I am producing egg powder which is 100% halal and newly
innovative product in Bangladesh. It is easily (risk free) portable and good for human health.
My experts team purchase egg from different poultry firms. Then these eggs are properly
cleaned and purified. I used new modern technology to produce the final product. The
product is totally germ free because I use scientific manufacturing and purification system. I
use TQM for maintaining the high quality of the product.

2. Market & Plant Capacity:

i.
Demand & Market Study:

Demand and Supply

Eggs are full of nutrients and minerals and are consumed in different forms since centuries.
There was misconception that they are from non-vegetarian food category but now people at
large have accepted them as a vegetarian item and their consumption is increasing year after
year. Transportation of eggs is difficult as chances of breakage during transportation
are86higher and it is costly also. Egg powder is comparatively easier to transport and there is
no question of any breakage during the transit.

Marketing Strategy

The major market is defense establishments, various government and non-government

nutritional programs, bakeries and all such areas like hills or forests where transportation is
Page 3 of 40

difficult. Before venturing into this project, a proper market assessment and some firm tie up
is advisable.

ii.

Sales & Marketing:

Sales Volume: I business is running for the first time in Bangladesh. I want to capture the
whole Bangladeshi market. So I production will be more and I sales volume will be huge
amount. As a result, the production cost will be minimized and profit will be maximized.

Pricing: I charge I product as competitive price. Getting the price right is critical for
maximizing revenue. In general higher price creates brand image but it is not affordable for
all. Since I make a branding product and that is new in Bangladesh, so I set the price
carefully. By analyzing cost benefits and market facilities at the begging I set per Kg egg
powder is Tk.220 excluding Vat. So I pricing is also lucrative rather than normal egg.

Market Communication: I always believe I success is mostly depended on the customer.

So I try to make good relationship with customer. I use both electric and media for
advertisement of I product. I use Television, radio, newspaper, magazine, billboard; reflect
etc. as advertisement of I product. I try to reach I product to all people in Bangladesh, so I try
to create a positive aspect of I product through various media. I perform different
promotional activities around the year. These include Eid offers, discount, cash rebates,
coupon, raffle draw etc.

Market Share: Initially I market share is very poor. But I believe I market share will be
increased day by day. First of all I run I business through urban area specially Dhaka,
Chittagong, Rajshahi, Khulna, Barishal then I will go to the rural area for placing the
business.

Brand Awareness: At present, egg is a non branding product. But I create a special brand
image in the market through providing quality egg powder with loIr price. From the
marketing analysis I find that, people really like any branding product. So I always try to
fulfill the peoples demand by providing quality product.

Distribution: At present I business mission is to capture the local market demand. I want
to cover the local market properly then I go forward to capture the worldwide market. At the
Page 4 of 40

beginning stage, I distribute I product only urban area, then I start I business locally and then
I go to worldwide.

Target Market: I target customers are the urban people specially who are health conscious.
I target also the industrial sector as raw material of various products.

Positioning: At present I have no competitor in I local market. Thats why I are in very
good position in I local market. If I make good awareness of I local market through I product
easily I will get available I egg powder in all area of Bangladesh. And I can make a strong
position.

Distribution Channel: I have used the traditional distribution channel. I main mission is to
satisfy the customer by providing product. So follow the formal distribution channel. The
channel is as follows:

Producer

Wholesaler

Retailer

Retailer

Consumer

Wholesaler

Retailer

Wholesaler

Retailer

Retailer

Industrial Market

Pricing: I charge I product as competitive price. Getting the price right is critical for
maximizing revenue. In general higher price creates brand image but it is not affordable for
all. Since I make a branding product and that is new in Bangladesh, so I set the price
Page 5 of 40

carefully. By analyzing cost benefits and market facilities at the begging I set per Kg egg
powder is Tk.220 excluding Vat. So I pricing is also lucrative rather than normal egg.

iii.

Production Program:
# Product Management: I follow TQM for making the high quality product. I technical
team work for making the product hygienic ways. I set I products expired date up to 12
month from packing time. I have quality control team and they always busy to control the
product quality.

iv.

Plant Capacity:
It is proposed to install dry egg powder making unit with capacity of 120 tons per annum
with 8 hours of working per day for 300 working days.
The plant and machinery required for the above production capacity may cost about Tk.6,
500,000.
Particulars

Quantity/ No.

Price

Egg Breaker
Centrifuge
Filter
Storage Tank
Feed Pump
Tubular Heater
Balance Tank
Feed Pump
High Pressure Pump
High Pressure Spray Dryer
Cyclone with exhaust and fan
Packing Unit
Electrification and Installation

4
2
2
4
2
1
4
2
2
1
1
1

2,00,000
6,00,000
2,00,000
3,00,000
6,00,000
8,00,000
3,00,000
7,00,000
8,00,000
7,50,000
3,50,000
5,00,000
4,00,000
65,00,000

Total

3. Materials Input:
Page 6 of 40

i.

Material & Input:

Utilities:

The total power required shall be 75 HP whereas per day water requirement would be 2500
liters.

Raw and Packing Materials

The major raw material required is fresh eggs and the daily requirement is 20,000. Prior
confirmed arrangements for this quantity are necessary. Packing material like poly-lined
paper bags, corrugated boxes, labels etc. shall be needed.

The daily requirement raw material is 10,000 eggs per day. So, annual requirement is
3,000,000 eggs.
The annual requirement is given below:

Product

Quantity

Rate

Value

Fresh Eggs

3,000,000

15,000,000

Cost

of

packing

Materials

@3000

3,60,000

per ton
Total

ii.

15,360,000

Supply Program:

A supply chain is a system of organizations, people, technology, activities, information and

resources involved in moving a product or service from supplier to customer. Supply chain
activities transform natural resources, raw materials and components into a finished product.
Egg would seem like such a simple product that there really couldnt be that much to the
supply chain given that the chicken lays the eggs, the farmers puts them in cartons and a truck
delivers them to the store. Eggs dont go through processing like most other food products
but still there can be a lot to them depending on what type of eggs you buy and where from.
Page 7 of 40

I collected eggs from different sources that are the easy to get for us. I select some special
suppliers who provide us fresh eggs every day at lower prices. I try to get fresh eggs from the
supplier and try to meet up final products very smoothly.

4. Location & Site:

i.

Location:

A plot of around 800 sq. meters will be sufficient as the built-up area requirement is not more
than 500 sq. meters. The built-up area would have main production unit in around 300 sq.
meters and balance area will be utilized for storage and packing. Cost of land and building is
expected to Tk. 4,000,000. I select Gazipur area .For establish and manufactured processing
and also factory office at Gazipur. I select this area because the cost of land is less than other
area and also this area provide us raw materials facilities. As I earliest mentioned that I
product is egg based so the I need huge amount of fresh eggs. As I know in Gazipur area
there many poultry firm.

ii.

Plant Site & Local Conditions

I project is to manufacture egg powder. For this project I need not to acquire more space.
Thats why I acquire 800 sq. miters at Gazipur. I selected Gazipur to established I plant for
some reasons

Availability of raw materials

Communication facilities are so easy

Low labor cost

Utilities services are available

Local condition is very much positive for such business

The area is very much dry and hot

Page 8 of 40

I plant site is at Shalna in Gazipur. But I head office is in Mirpur. The local condition where I
started I projects is very much attractive in the sense of my new project plant. I get I needed
every resources from that.
I segmented I markets into three major categories. These are:-

1. Geographic Segmentation: Dividing a market in to different geographical units such as

nations, states, regions, cities and neighbor hoods. I segment I market at the begging stage in
to Dhaka, Chittagong, Rajshahi, Khulna, Barishal, Faridpur etc. divisional area.

2. Demographic Segmentation: Dividing the market in to groups based on demographic

variables such as age, sex, family size, family life cycle, income, occupation, education,
religion, race and nationality.

Age: Under 5- 65+ aged people ;

Gender: Male and Female both;
Family Size: Any types of family;
Occupation: Any;
Religion: Any;
Race: Any.
3. Psychographic Segmentation: Dividing a market in to different groups based on social
class, life style or personality characteristics.
Social Class: I want to target the whole market in Bangladesh but at the
beginning stage I emphasize more upper class people with I price but within a
short period of time I reach I product to all class of people.

Life Style: Achieves, strivers, survivors.

Personality: I make I product for all specially ambitious people.

iii.

Environmental Impact:

At present environment is very much important issue for a business. Day by day the
environment is being polluted as result the polluted environment is going to death. The
Page 9 of 40

ecological balance is declining day by day for the polluting environment. Today, the whole
world is really aware about the environment. Because day by day, the world economy is
going to agriculture based to industry based. And this industry produces more harmful
components as a result the environment is being polluted. Hence, before producing or starting
a business, environment analysis is most important. Since I product is egg powder, and I used
modern technology which does not produce more harmful chemical. And I product design,
packaging, quality everything is environmentally friendly. Because I started I business for the
betterment of I customers and consumers. And all of people are directly or indirectly involved
to I production. If I hamper I environment, the people will be affected ultimately the objective
or mission cannot fulfill. I use latest technology and all are automated machine. From
production design to destruction stage, in every stage I have used less harmful components. I
products are approved ISO: 9001 and they provide us ISO certificate through verifying I
products and technology.
I production process is also environment friendly. The dried egg powder is totally free from
harmful chemical and its packaging system is also less harmful specially container. As a
result it does not create negative impacts to I environment. And I have used the waste of I egg
to produce fertilizer. As a result, the product does not create any harmful component for I
environment. So the dried egg powder is mostly helpful foods for I environment.

5. Project Engineering:
i.

Layout & Physical Coverage of Project:

The physical coverage and layout of the project are very wide. And that are given below:

Page 10 of 40

Project Plan of Millennium Agro Food Ltd.

I projected coverage of the project is given and I are going to cover up the whole Bangladeshi
market.

Page 11 of 40

Projected Coverage of I Project

ii. Technology & Equipments:

Manufacture of dried egg powder starts with breaking of eggs and removing egg-shells. After
removal of shells, the mixture is filtered and stored in storage tanks at about 4 C and then it
is taken to tubular heater wherein it is dried at about 65 C for 8 to 10 minutes and it is
filtered and passed to high pressure spray drier with the help of high pressure pump. The
material which comes out of high pressure spray drier is not only in dried form but also in
powder form which is then packed in poly-lined boxes.

Page 12 of 40

A typical process flow chart would be as under:

Breaking of Eggs and removal of shells

Filtration

Storage and Drying

Packing
The eggs are fed to a convectional egg breaking system. After breaking and separation of the
egg and shell the whole egg is discharged into the filtration system of the process. The shells
are deposited into a centrifuge where the residual liquid egg and shell are separated. After the
special filtration process the egg is fed to the storage tank where it is cooled down to 40C by
means of the chilled water jackets. Slow speed agitation is provided with these storage
vessels. From the storage tanks the egg is fed by a positive displacement pump to the tubular
heater. This tubular heater is heated by hot water. The egg temperature is raised to 65O C.
after heating the product is held at 65OC for 6 minutes gives sufficient pasteurization of the
product for most situations and errs on the side of safety. Shorter holding times at 65OC are
acceptable if the incoming egg quality allows this.

Page 13 of 40

The warm egg from the holding tube is fed to one of the two dryer balance tanks and then to
the high pressure pump by a centrifugal feeding pump. From the high pressure pump the egg
is fed to the atomizing nozzles via a high pressure line. The spray dryer is cylindrical with a
conical outlet for air and powder. The filtered drying air is heated by steam and then
introduced to the drying chamber by a specially designed venture. Placed in this venture are
the atomizing nozzle lances. The product is finally atomized into the hot inlet air. Due to flash
drying the hot air rapidly reduces in temperature, thus giving minimum product damage. The
dry powder and drying air leave the chamber at the bottom of the cone and are transported to
a cyclone where the poIr is separated from the air. The powder is then cooled and filled into a
container.

Two High Tech Machine

Page 14 of 40

iii. Civil Engineering:

I project is completely technology based. In order to operate technology, I need some
expertise to operate the operation smoothly. Egg powder, regarding the industry concept, I are
highbinder or pioneer of that particular industry. Since setting up machine to operating the
machine I have to hire engineer to run the machine for ensuring the smooth operation to
success. So in the financial part I pre-operating cost is much higher. Hiring foreign expertise
and relating them will be costly. Thats why I will train up I local engineer for better service
and minimizing I overhead cost. Which will create a better position for achieving the market
share?
As the time progress, local engineer will be efficient enough to run I business, then foreign
engineer will go back to their own country and extra payment will be reduced.
As a pioneer of the egg powder industry, I machinery equipment will be hybrid to attain
credibility to customers mind.
I packaging machine, printing machine will be imported. So importing cost will be high.
Employee needed for the operation of the machine will also incur some extra cost. So their
extra cost should be cut off. Training up should the local employee to become expertise for
the operation of machinery. Then other debt will require expertise will be appointed by I
R&D department.

6. Plant Organization & Overhead Costs:

i. Plant Organization:
Plant organization means the process of how a business organization can maintain its capital
and other sources of finance to maximize its productivity. For doing so a growing project like
I need more care in acquiring capital and other sources of fund.

Page 15 of 40

Projected Capital Slicing & Allocation of fund:

Capital is the key of a business. In below I are stated the initial capital sIcing and the
allocation of I capital in two pie chart.

Loan from Bank; 420000

Owners Capital; 600000

Capital SIcing

Allocation Of Fund
Cash in Hand; 27%

Truck and Lorry; 6%

Office Equipment; 4%
Furniture; 5%

Land and Building; 29%

Plant & Machinery ; 29%

Allocation of Fund

Page 16 of 40

ii. Overhead Cost:

Like an ordinary project I have some overhead costs. Which drive I project directly. So for
doing better in I project I must do better in minimizing those costs as much I can. These costs
are:a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)
o)
p)
q)
r)
s)
t)

Wages
Stores & Spares
Repair & Maintenance
Egg Breaker
Centrifuge
Filter
Storage Tank
Feed Pump
Tabular Heater
Balance Tank
Feed Pump
High Pressure Spray Dryer
High Pressure Pump
Cyclone with Exhaust and Fan
Packing unit
Electrification & Installation
Factory Building Depreciation
Electricity
Water
Telephone
u) Others

7. Manpower:
No one organization can run without the help of man poIr. Like other reslices human resIce is
very important part of a project. I are going to start a new business project in Bangladesh and
that is egg powder. Since it is a technology based production process but the whole task need
to perform some staff and labor. The whole production process is technology oriented but it is
maintained by some experienced and inexperienced technicians. Initially I hired two
experienced operators who Ire familiar to machine and production process. They always help
other to maintain the task smoothly. The number of labor and staff who directly or indirectly
perform to run the project are given:

# MANPOWER REQUIREMENTS:
Particulars

No.

Monthly

Total
Page 17 of 40

Salary
Machine Operators
Skilled Workers
Semi- Skilled Workers
Unskilled Workers
Salesmen
Clerk

2
6
4
10
2
1

4,000
3,000
2,000
1,500
3,000
2,500
Total

Monthly
Salary
8,000
18,000
8,000
15,000
6,000
2,500
57,500

8. Project Implementation:
Egg powder is a new business project in Bangladesh. Initially I estimated I project duration
might be less than 1 years. After arranging all things I will start to produce I product.
Implementation is an application, execution of an idea, plan, model, specification, design,
standard, policy and algorithm. Project Implementation process may be effective if some very
important factors are kept in mind that are urgent in a project management system. It is
crucial for everyone to start the project by keeping in mind some factors are identified in the
article. Implementation of a project is the step where all the proper planned activities are put
into action. Before starting the implementation of a project, the implementers must identify
his weaknesses and strength. The customer's needs from the product of the project must be
defined, and the project scope should be clearly known. Keep a record of when the project
implementation process starts and finishes. The main thing to do before the implementation
of a project is to predetermine and discuss the project budget and the estimated time, and the
manpower required to finish the project. To ensure successful project implementation, there
are some important tips that you need to make use of. The project should have people who
are dedicated more to create the situations of the successful project implementation. Before
the project implementation process starts, ensure you have all factors of project process
written or recorded on paper. This will make the project implementation process easier to
manage, and they can be of used for the projects that are the same as the current project.
Project monitoring is also an important thing to make sure that activities are implemented as
per planned. This assists the project implementers to check how Ill they are getting their
objectives. This process is fully based on the knowledge that the procedure, by which a
project is implemented, has so many effects on its access, maintenance, and operation.
Page 18 of 40

9. Financial and economic evaluation.

Financial analysis is the major part for feasibility analysis. The feasibility of a business
mainly depends on the financial analysis. In I financial analysis I divided it into some steps. I
actually find the following items in I business project. I project is still under the construction.
So, all parts of financial analysis have done by using hypothetical or projected information.
The whole analysis is known as financial and economic evaluation.

# Cost of the Project and Means of Finance:

Sl. No.

Cost of Component

1
2
3
4

Machineries and Plant

Land and Building
Miscellaneous Assets
Pre-Operative Expense

Working Capital

6
7

Means of Finance
Promoters
Bank Loan

Amount

Total =

6,500,000
4.000,000
2,000,000
1,500,000
14,000,000
1,000,000
15,000,000

Total =

6,000,000
9,000,000
15,000,000

Fixed Cost =

Debt Equity Ratio

Promoters Contribution

1.5:1
40%

Projected Income Statement

Income Statement of the Millennium Agro Food Ltd. for the first five years
1st year
2nd year
3rd year
4th year
5th year
Particulars
30,000,00 33,000,00 38,000,00
Sales Revenue
26,500,000 29,150,000
0
0
0
Less: Cost of
22,787,57 22,990,89 24,875,47
Goods Sold
20,070,000 22,077,000
6
3
2
Gross
Operating
10,009,10 13,124,52
Income
6,430,000
7,073,000
7,212,424
7
8
Less:
1,440,769
1,584,846
2,189,347 6,891,030
$
Administrative
7,575,297
Page 19 of 40

Exp.
EBIT

4,989,231

5,488,154

5,023,077

3,118,077

5,549,231

Less: Interest
Expense
Pre- Tax
Income

900,000

900,000

900,000

900,000

900,000

4,089,231

4,588,154

4,123,077

2,218,077

4,649,231

Less: Income
Tax

1,431,231

1,605,854

1,443,077

776,327

1,627,231

Net Income

2,658,000

2,982,300

2,680,000

1,441,750

3,022,000

Projected Balance sheet

Balance Sheet of the Millennium Agro Food Ltd.- For the first five years:
Assets

1st year

2nd year

3rd year

4th year

5th year

Current Assets:
Cash

510,000

561,000

1,150,000

2,300,000

2,700,000

Accounts Receivable
Inventory:
Finished Goods

3,168,000

3,484,800

4,880,000

5,991,750

6,861,000

2,230,000

2,453,000

2,600,000

2,250,000

Total Current Assets

5,908,000

6,498,800

8,630,000

10,541,750

4,811,000

Page 20 of 40

14,372,000
Property, Plant &
Equipment

10500000

12,703,500

10500000

10500000

10500000

Accumulated
Depreciation

1,050,000

2,100,000

3,150,000

4,200,000

5,250,000

Total property, plant &

Equipment

9,450,000

10,603,500

7,350,000

6,300,000

5,250,000

Other property

1,000,000

Other Non-Current
Assets:

2,974,800

830,600

1,680,000

2,311,000

Miscellaneous Assets
Pre-Operative Expense

2,000,000
1,500,000

2,200,000

2,500,000

2,000,000

2,000,000

Total non -current

assets

3,500,000

2,200,000

2,500,000

2,000,000

2,000,000

18,858,000

19,302,300

19,480,000

18,841,750

21,622,000

Accounts Payable

1,200,000

1,320,000

1,800,000

2,400,000

3,600,000

Total current liabilities

Long-Liabilities:

1,200,000

1,320,000

1,800,000

2,400,000

3,600,000

Bank Loan

9,000,000

9,000,000

9,000,000

9,000,000

9,000,000

10,200,000

10,320,000

10,800,000

11,400,000

12,600,000

Equity Capital

6,000,000

6,000,000

6,000,000

6,000,000

6,000,000

Net- Income

2,658,000

2,982,300

2,680,000

1,441,750

3,022,000

Total Equity capital

8,658,000

8,982,300

8,680,000

7,441,750

9,022,000

18,858,000

19,302,300

19,480,000

18,841,750

21,622,000

Total Assets

Liabilities & Equity

Capital:
Current Liabilities :

Total Liabilities
Owners Equity:

Total Liabilities&
Equity Capital

Page 21 of 40

Projected Cash flow statement

Cash Flow Statement of the Millennium Agro Food Ltd.- For the first five years:
Particulars
Cash Flow from
operating Activities:
Net Income

1st year

2nd year

2,658,00
0
1,050,00
0

3rd year

4th year

1,050,000

1,441,
750
1,050,
000

3,022
,000
1,050
,000

1,300,000

-300000

500000

-3168000
1200000

-316,800
120,000

-1,395,200
480,000

-1111750
600000

-2230000
(490,00
0)

(223,000)

(1,395,200)

5,229,300

1,419,600

350000
2,830,
000

-869,250
1200000
(2,561
,000)
2,711
,000

(2,203,500)
-2974800

-830600

(1,680,
000)

-2311000

-5,178,300
-

-530600
-

-1,680,000
-

-2,311,000
-

(490,000)
1,000,000
5,10,000

51000
5,10,000
5,61,0000

5,89,000
5,61,000
1,150,000

1,150,000
1,150,000
2,300,000

4,00,000
2,300,000
2,700,000

2,982,300

2,680,000

1,050,000

Increase in A/R
Increase in A/P
Increase in F/ G
Total cash flow from
Operating activities
Cash Flows from
Investing Activities:
(Additions to ) Plant,
& Equipmet

Depreciation
Decrease /Increasing
in Non-current assets

Other Property
Total cash flow from
Investing Activities
Cash Flow from
Financing
Activities:
Total cash flow from
Financing
Activities
Net Change in Cash
Beginning Cash
Ending Cash

5th year

Page 22 of 40

Production Cost sheet of "Millennium Agro Food Ltd."

Total Direct cost
Costs

Amount

Total

Direct Material:
Purchase of Raw Materials and Packing

15,360,000

Direct Labor:
Wages

690,000

Total Direct Cost

16,050,000

Total factory overhead cost

Stores & Spares
Repair & Maintenance
Machinery Depreciation:
Egg Breaker
Centrifuge
Filter
Storage Tank
Feed Pump
Tabular Heater
Balance Tank
Feed Pump
High Pressure Spray Dryer
High Pressure Pump
Cyclone with Exhaust and Fan
Packing unit
Electrification & Installation
Factory Building Depreciation
Utilities:
Electricity
Water
Telephone
Others

2,000,000
1,200,000
20,000
60,000
20,000
30,000
60,000
80,000
30,000
70,000
75,000
80,000
35,000
50,000
40,000
400,000
1,000,000
300,000
200,000
500,000

Total Indirect and Factory Overhead

Total Manufacturing Cost

6,250,000
22,300,000

Less: Ending Finished Goods (10%)

2,230,000

Cost of Goods Sold

20,070,000

Page 23 of 40

Sales & Administrative Expenses:

Remuneration:
Commission of sales person
Advertising
Internet bill
Electricity
Self Managing
Total Sales & Administrative Expenses

100,000
1,000,000
15000
180000
145,769
1,440,769

Selling Price Per kg:

Cost of Sales

21,510,769

Profit Margin (40%)

4889231

Total Sales Revenue

26,400,000

Total Unit Sold (Ton)

120

Unit Cost (kg)

179.26

Add: Profit Margin 40%

40.74

Selling Price Per kg

220

After deducting all of expenses I find the selling price of egg powder is 220tk per kg
with 40% profit.
The total over head cost is 6,250,000tk.
The total sales revenue is 26,400,000tk.
The total unit sold is 120 ton.
The total unit cost is 179.26 kg.

Page 24 of 40

Total current Assets:

Beginning
Current Assets:
Cash
Accounts Receivable
Inventory:
Finished Goods
Total Current Assets

1,000,000

Ending

510,000
3,168,000
2,230,000

1,000,000

5,908,000

Total Fixed Assets:

Property, Plant &
Equipment:

Egg Breaker

Beginning

200,000

Less: Depreciation

Ending

200,000
20,000
180,000

Centrifuge

600,000

Less: Depreciation

600,000
60,000
540,000

Filter

200,000

Less: Depreciation

200,000
20,000
180,000

Storage Tank

300,000

Less: Depreciation

300,000
30,000
270,000

Feed Pump
Less: Depreciation

600,000

600,000
60,000
540,000

Page 25 of 40

Tabular Heater

800,000

Less: Depreciation

800,000
80,000
720,000

Balance Tank

300,000

Less: Depreciation

300,000
30,000
270,000

Feed Pump

700,000

Less: Depreciation

700,000
70,000
630,000

High Pressure Spray Dryer

800,000

Less: Depreciation

800,000
80,000
720,000

High Pressure Pump

750,000

Less: Depreciation

750,000
75,000
675,000

Cyclone with Exhaust and Fan

350,000

Less: Depreciation

350,000
35,000
315,000

Packing unit

500,000

Less: Depreciation

500,000
50,000
450,000

Electrification & Installation

400,000

Less: Depreciation

400,000
40,000
360,000

Land and Building

Less: Depreciation

4,000,000

4,000,000

Page 26 of 40

400,000
3,600,000
Total Property, Plant & Equipment

10,500,000

9,450,000

Miscellaneous Assets

2,000,000

2,000,000

Pre-Operative Expense

1,500,000

1,500,000

Total Fixed Assets

3,500,000

3,500,000

Other Non-current Assets

Liabilities & Equity Capital:

Current Liabilities :
Accounts Payable

1,200,000

Total current liabilities

1,200,000

Long-Liabilities:
Bank Loan

9,000,000

9,000,000

Total Liabilities

9,000,000

10,200,000

Owners Equity:
Equity Capital
Net- Income

6,000,000

6,000,000
2,658,000

Total Equity capital

6,000,000

8,658,000

Total Liabilities& Equity Capital

15,000,000

18,858,000

Page 27 of 40

Ratio Analysis:
A. Profitability Ratio:
Profit Margin
Return on Assets
Return on Equity

1st year

2nd year

3rd year

4th year

5th year

10%
14.09%
44.3%

10.23%
15.45%
49.7%

8.93%
13.75%
44.66%

4.36%
7.65%
24%

7.95%
13.97%
50.36%

1st year

2nd year

3rd year

4th year

5th year

8
11.8
1.4

8
11.8
1.5

6
11.8
1.54

5
15
1.75

5
8
1.77

1st year

2nd year

3rd year

4th year

5th year

4.9
3.06

4.9
3.06

4.79
3.35

4.3
3.45

3.99
2.65

1st year

2nd year

3rd year

4th year

5th year

54%
5.5

53.46%
6

55.44%
5.58

60.50%
3.46

58.27%
6.16

B. Asset Utilization Ratio:

Receivable Turnover
Inventory Turnover
Total Asset Turnover

C. Liquidity Ratio:
Current Ratio
Quick Ratio

D. Debt Utilization Ratio:

Debt of Total Assets
Time Interest Earned

Page 28 of 40

Break- Even Analysis:

BEP = FC /(P-VC)
Here,
FC = Fixed Cost
P = Price
VC = Variable Cost
BE = Break even

BE = FC / (P-VC)
= 14,000,000/ (220- 179.26)
= 343642.6117
= 343.642 Ton

Commercial Profitability:

Pay Back Period

Net Present Value

Internal Rate of Return

4.96
794,690
%

Years

at 14% discount rate

34%

(After tax and interest)

National economic evaluation:

Country point of view: As I economy is free market Economy. It is very much easier
to inaugurate a new business. I have available labor force and this labor force is the
cheapest in the world. And also I have available raw materials. Since I business is
mostly labor and capital oriented. So cheap labor is the positive side of I business.
And another one is capital requirements. I have available many commercial banks
to provide loan with less interest rate to the industry sector. And central bank also
establishes a new project to rise on the industry sector. I government always helps
Page 29 of 40

and supports to increase I industry sector. Because only industry can reduce the
unemployment problem, poverty problem and economic inefficiency problem etc.
I countrys geographical location is also perfect of I business. Since I product is
egg based product, so geographic location is very much important. I have much
free space thats why it is much feasible to start I business. Since I economy is free
market economy. So I can easily enter in to the market with new product without
any barriers. I can set up a price with observing supply and demand. And I country
has large number of population and their demand is also more. To meet the
demand I have to innovate a new product line. The tax rate of our country is
comparatively lower than other country and import export barriers are less with the
positive impacts of I countrys economy, I have started I business.
Company point of view: The first and main condition of a business is capital. I
company is running mostly with the help of I equity financing. And rest of the capital I
have collected from other sources. I have skilled manpower and I business location is
very much perfect area. I product is new product in I country and it is very much positive
side to I business. Because the people of I country are always ready to take the new
product. I can also reduce the unemployment problem by recruiting man power. And I
also support I economy by providing products and meet the demand. So company also
helps to rise on I economy. Since I have innovated a new product. So I are in monopoly
position in I market. From the economic point of view, I have more feasibility to I newly
business.

Projected Capital Sourcing:

Capital is the key of a business. In below I are stated the initial capital sourcing in a pie.

Page 30 of 40

Capital

Owners Capital
Loan from Bank

Capital Sourcing

Earning Profit:
Business is run for seeking profit. In I projected income statement I saw that first year I face
loss but from next year I can earn handsome amount of profit from each year. In the below
earning profit of first five years are given in a graph.

Page 31 of 40

Net Profit
3000000
2500000
2000000
Net Profit

1500000
1000000
500000
0
Year - 1

Year - 2

Year - 3

Year - 4

Year - 5

-500000

Five years Net Profit

Cash Flow:
Cash is the main fuel of a business. So the trend of cash flow is very important for doing Ill in
business. In I projected cash flow statement I can see that in first year due to loss cash flow is
low but from second year it started its growth. In the below cash flow is shown at a glance.

Cash Flow
3000000
2500000
2000000
Cash Flow

1500000
1000000
500000
0
Year - 1

Year - 2

Year - 3

Year - 4

Year - 5

Five years trend of Cash Flow

Page 32 of 40

Owners Equity:
Owners equity means the payable money which is invested in the business by its owner.
Owner is always wanted to increase his or her owners equity. In I projected owners equity I
found that due to huge profit except first year every year owners equity will increase. In the
below the projected trend is given.

Owners Equity
3500000
3000000
2500000
Owners Equity

2000000
1500000
1000000
500000
0
Year - 1

Year - 2

Year - 3

Year - 4

Year - 5

Five years trend of Owners Equity

Findings and Analysis:

After analyzing and observation of economic point of view, technological point of view,
environment point of view, marketing of point of view and the most important financial
analysis I find that I Egg Powder is mostly feasible in Bangladeshi market. From the
economic point of view, I find, I economic condition is suitable to start this business. Free
market condition, available of raw materials, cheap labor cost, location are the positive
aspects of I business. I have used modern technology to manufacture I product. I
manufacturing process follow TQM facilities. From collecting raw material to packaging I
use new technology. The production process is not harmful for I environment. I use
environment friendly equipment to manufacture I product. I have tasted I product quality
through BUET. It is no side effect.

Page 33 of 40

After observing the marketing analysis I find that I have more strengths and opportunities.
Because the customer or consumer of I country prefer the new branded product. Since I are
the first mover in Bangladesh with a new product (Egg Powder). It creates more taste rather
than natural egg and I select I target consumer of urban people and industrial raw material. So
I feel I product create more demand. I manufacture huge volume of products as a result, the
per kg price is less. And consumer always prefer high quality product with low price. I try to
comfort the consumer. I have good advertisement technique to aware and promote the
consumer. I use traditional distribution channel to market I product. From market point of
view. I think I egg powder is feasible in I local market.
Financial analysis is the most important part of I feasibility study. Since I are manufacturing
Egg powder thats why I have collected I requirement capital from own finance and bank
loan. At the first year I net income (after tax and interest) is 26, 58, 000. And I see I net
income is satisfactory. I assume I income will be increased during the next five years. I
company is mostly feasible of the financing part, I have no more extra cost or expensed
which reducing the net income. I fixed assets are constant in every year. But current assets
and liabilities are changing every year because of I competency. From the financing view
point I are feasible for producing the egg powder and run I business smoothly because I set I
product price per kg Tk.220 that is affordable to I target consume.
After analyzing all view point I draw overall SWOC analysis.

# Strengths:
I use the modern technology;
Available of raw material;
I have cost benefit facilities;
I have a new brand image;
I have skilled and cheap labor;
I do patent I egg powder;
I have strong distribution channel;
I provide high quality product with low price.

Page 34 of 40

# Weaknesses:
(i)

I want of capture the whole market but I have limited resources;

(ii)

All labors force are not skilled;

(iii)

I have more initial administrative cost;

(iv)

I cannot reduce the production cost in short time;

(v)

I have no available more cash after ending the year;

(vi)

Ready made products having no readymade markets.

# Opportunities:

(i)

I are the first mover in Bangladeshi market so I have advancement benefit;

(ii)

I have strong brand image;

(iii)

Government support and economic flexibility I have;

(iv)

I have no trade barriers because I start infant industry;

(v)

At present I have no competitor in local market;

(vi)

I offer greater value product;

(vii)

I local market is going to organizational way.

# Challenges:
(i)

Consumers are habituated of natural egg;

(ii)

If distribution channel falls, I mission or objective goes down;

(iii)

Unpleasant economic condition;

(iv)

Political unrest is a common threat of I industry;

Page 35 of 40

(v)

I country has no proper communication facilities. So I can not use JIT facilities;

(vi)

To ensure the quality, I cover more cost;

(vii)

I country has no strong regulatory body of business sector.

6. Conclusion:
Creating a market for a new product and maintaining the constant supply of product will be
the major area of concentration for the business. I have a proper market, strong technology,
and required finance. I have also good market image and target consumers. Since I am the
first mover in the Bangladeshi market so I have first mover advantage. Because egg powder
is totally a new concept in Bangladesh. So all of things are positive for I business. But there
are some threats may occur because of the traditional marketing channel and consumers
habits. Because it is not easy task to reach I product to consumer but I marketing team always
keep busy to do this job. Finally it can be said, Millennium Agro Food Ltd. Is going to
create the market positioning through providing Egg Powder. And this concept is very
much feasible in I business perspective.

Page 36 of 40

Reference
1.

Operations Management by Jay Heizer & Barry Render; Eighth Edition

2.

Information and Wildlife Valuation: Experiments and Policy, by Clem Tisdell and Clevo Wilson, August
2004
What are the Economic Prospects of Developing Aquaculture in Queensland to Supply the Low Price
White Fillet Market? Lessons from the US Channel Catfish Industry, by Thorbjorn Lyster and Clem
Tisdell, October 2004
Comparison of Funding and Demand for the Conservation of the Charismatic Koala with those for the
Critically Endangered Wombat Lasiorhinus krefftii by Clem Tisdell and Hemanath Swarna Nantha,
June 2005.

3.
4.

Appendix
Page 37 of 40

In financial analysis part I only gave the projected statements. But if sales or Cost of Goods
Sold will increase or decrease by 5% then what will be the income statement. These
additional two statements are given in this appendix part. Here I give two projected income
statements. One will show the 5% percent decrease in sales and another one will show the 5%
increase in COGS.

# Utilities:
The annual cost of utilities at 100% activity level would beTk.2, 000,000.

# Interest:
Interest on term loan of Tk. 9,000,000 has been calculated @ 10% per annum.

# Depreciation:
It has been calculated @ 10% on building and machinery and other assets.

# Preliminary and Pre-Operative Expenses:

The registration charges, establishment expenses, trial run expenses, interest during
implementation etc would be around Tk.15,00,000 .

# Miscellaneous Assets:
The provision for miscellaneous assets of Tk. 2,000,000 shall be adequate as explained earlier.

# Land and Buildings:

A plot of around 800 sq. meters will be sufficient as the built-up area requirement is
not more than 500 sq. meters. The built-up area would have main production unit in around
300 sq. meters and balance area will be utilized for storage and packing. Cost of land and
building is expected to Tk. 4,000,000. I select Gazipur area .For establish and manufactured
processing and also factory office at Gazipur. I select this area because the cost of land is less
than other area and also this area provide us raw materials facilities. As I earliest mentioned
that my product is egg based so that I need huge amount of fresh eggs. As I know in Gazipur
area there many poultry firm.

# MANPOWER REQUIREMENTS:
Page 38 of 40

Particulars

No.

Monthly
Salary

Machine Operators
Skilled Workers
Semi- Skilled Workers
Unskilled Workers
Salesmen
Clerk

2
6
4
10
2
1

4,000
3,000
2,000
1,500
3,000
2,500
Total

Total
Monthly
Salary
8,000
18,000
8,000
15,000
6,000
2,500
57,500

# Accounts Receivable:
Sales
Per week Sales
Accounts Receivable(6 week)
As a percentage of sales

26,400,000
5,28,000
31,680,000
12%

# Accounts Payable:
Purchase of Egg
Per week purchase
Accounts Payable (4 week)
As a percentage of purchase

15,000,000
3,00,000
12,000,000
8%

Millennium Agro food Ltd.

Sensitivity Analysis - 5% decrease in sales
Projected Income Statement
Year-1

Year-2

Year-3

Year-4

Year-5

Page 39 of 40

Net Sales
Cost of Goods Sold

534,850

1,056,353

1,273,561

1,545,042

1,895,421

(444,008)

(336,500)

(279,300)

(428,740)

(438,820)

Gross Profit
Admin, Selling & Distribution
Expenses

90,842

719,853

994,261

1,116,302

1,456,601

(140,750)

(322,466)

(375,365)

(487,908)

(608,530)

Profit before Interest and Tax

(49,908)

397,387

618,895

628,394

848,071

Interest Expenses

58,800

58,800

58,800

44,800

35,000

Profit before Tax

(108,708)

338,587

560,095

583,594

813,071

(118,505)

(196,033)

(204,258)

(284,575)

(108,708)

220,082

364,062

379,336

528,496

(108,708)

220,082

364,062

379,336

528,496

Retained Profit B/f

(108,708)

111,374

475,435

854,772

Retained Profit C/f

(108,708)

111,374

475,435

854,772

1,383,268

Taxation
Profit after tax
Profit distribution
Retained Profit during the Year

Millennium Agro food Ltd.

Sensitivity Analysis - 5% Increase in Cost of Goods Sold
Net Sales
Cost of Goods Sold
Gross Profit
Administration, Selling & Distribution
Expenses
Profit before Interest and Tax
Interest Expenses
Profit before Tax
Taxation
Profit after tax
Profit distribution
Retained Profit during the Year
Retained Profit B/f
Retained Profit C/f

Year-1
563,000
(466,208)
96,792

Year-2
1,111,950
(353,325)
758,625

Year-3
1,340,590
(293,265)
1,047,325

Year-4
1,626,360
(450,177)
1,176,183

Year-5
1,995,180
(460,761)
1,534,419

(140,750)
(43,958)
58,800
(102,758)
0
(102,758)
(102,758)
-

(322,466)
436,160
58,800
377,360
(132,076)
245,284
245,284
(102,758)

(375,365)
671,960
58,800
613,160
(214,606)
398,554
398,554
142,525

(487,908)
688,275
44,800
643,475
(225,216)
418,259
418,259
541,079

(608,530)
925,889
35,000
890,889
(311,811)
579,078
579,078
959,338

(102,758)

142,525

541,079

959,338

1,538,416

Page 40 of 40