2.

Company Summary
2.1 Industry Overview
The packaged tender coconut water is still an industry in its introduction phase in Bangladesh.
There is no existing coconut water processing firm in this market. 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.
There are a lots of companies in the world serving in more than thirty countries in the world
including India, USA, Canada, Brazil and New Zealand.
2.2 Company Description
TenderCoco 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.
TenderCocos plant will be located at Ramu near Coxs Bazar.
2.3 Vision and Mission Statement
Our vision it to establish a leading value-driven, most trustful, nutritious and healthy natural
drink provider company by staying the in the minds and hearts of our customers.
Our mission is to nationally 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 TenderCoco, 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.
3. Products
3.1 Product Description
We intend to sell the extracted coconut water in bottles and eco-friendly packs. Our product
offerings include
Sl.
No.

Product Name

Ingredients

Available Sizes

1.

Coco Natural (a natural thirst

quencher)

Natural coconut water less

than 1% natural fruit
sugar, vitamin C

200 ml, 400 ml &

800 ml

2.

Coco Fruits (coconut drink with

different fruits flavors orange,
mango, strawberry, lemonade and
pineapples etc.)

Coconut Water, Natural

Fruit Sugar, Vitamin C
and Any Specific Flavor
Puree

200 ml, 400 ml &

800 ml

Coco Junior (flavored coconut

water for kids)

Coconut Water, Natural

Fruit Sugar, Milk Shake,
Vanilla, and Any Other
Specific Flavor Puree

150 ml

3.

1|Page

3.2 Unique Features

The TenderCoco 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 flavors

No more carrying heavy tender coconuts from outside. For 4 tender coconuts each
weighing approx. 2 k.gs, i.e. 8 k.gs 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.

Strict quality and hygiene measures at our factory will ensure that the product is safe.

This safer from infection because no chopping and transfer to glass is involved. Just
pierce, insert the straw and drink.

Available at the nearest supermarkets/retail shop/medical store. May be even at the

pharmacy inside your premises.

Coconut water is very useful for patient.

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.

Fig: Process Flow Chart

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.
We intend to use modern technology for extraction of coconut water. We will source fullycustomized machines (for cutting shells and packaging coconut water) locally from

2|Page

Bangladesh to meet our production requirements. TenderCoco will get the storage technology
from the Institute of Food Science and Technology, Bangladesh Council of Scientific and
Industrial Research (BCSIR), a research lab, under the Ministry of Science and Technology,
Government of Peoples Republic of Bangladesh.
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 packs of different sizes. Strict Quality control is ensured at different points by
physical inspection and testing. The operator will be trained on these aspects too.
4. Market and Demand Analysis
The per capita consumption of soft drinks in Bangladesh is around 7 to 10 liters annually.
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
common people in our targeted areas. Secondly we target the young generation who have a
fancy for soft drinks. The popularity gained by coconut products abroad, gives us a good scope
to export our products.
4.1 Total Market Potential
The demand of TenderCoco lies in both urban and rural regions of Bangladesh. The yearly
estimated market potential of TenderCoco is more than a Tk. 240 million* (US $3 million; 1
US dollar is equivalent to Tk. 80.00) market, which is expected to reach Tk. 400 million (US
$5 million) soon, and company insiders believe that there is a huge prospect of this product for
the market to expand. *(80 million x 30tk/packet = Tk. 240 million)
Primary Target Market: TenderCoco targets around 8 divisional cities (Dhaka, Chittagong,
Sylhet, Rajshahi, Jessore, Khulna, Rangpur & Mymensing) accommodating nearly 17.7 million
consumers since it is more accessible and acceptable for our products to reach target customers.
Next 2 years, TenderCoco target market will expand into surrounding 20 districts of 8
divisional cities. This will increase our target customer to 35 million in total.
4.2 Competitor Analysis
TenderCoco aims to position its product in the general market where exists players like Globe
Soft Drinks Ltd, Akij Food and Beverages Ltd, Pran Foods Ltd., Globe Beverage Company
Limited, Transcom Beverages Ltd, Partex Beverages Limited etc. who are major players in soft
drink segment. Here is the list of competitors serving soft drinks market in Bangladesh:
Companies
Globe Soft
Drinks Ltd.
Akij Food and
Beverages Ltd
Pran RFL Group

Brands

Market
Share (%)

Uro-Lemon, Uro-Cola, Uro-Orange, Lychena,

FizzUp, Royal Tiger, Energy Drinks, Mangole.

13

Mojo , Lemu, Clemon, Speed (Energy Drink), Spa

15

Pran Up, Pran, Frutika, Lassi, Juice, Maxx Cola

20

3|Page

Global Beverage
Shark, Zam Zam Cola
Company Limited
Transcom
Pepsi, 7up, Mirinda, Mountain, Dew, Slice
Beverages Ltd.
Partex Beverages RC (Royal Crown) Cola, Upper 10, Big Boss, RC
Limited
Q Lemon.

2
40
10

Source: The Executive Times, September 2014

5. Marketing & Promotion 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 Institute of
Food Science and Technology, Bangladesh Council of Scientific and Industrial Research
(BCSIR) & Bangladesh Standards and Testing Institution (BSTI) who have been involved in
product development stage. We also plan to enter into tie-ups with schools, colleges &
universities 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 grocery shops, pharmacy, retail
outlets etc. 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 centers, Gym Centers
to offer our health and energy drinks. We want to make our drink available for homes, offices,
hospitals, sports persons, marriages, other occasions, hotels and restaurants.
5.1 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

Sizes

Taka/Unit

Reasons

Coco Natural

200 ml

30

At similar price with competitor

Coco Fruits

200 ml

40

Priced due to its uniqueness

Coco Junior

150 ml

25

Priced due to its uniqueness

5.2 Distribution Channels

We have identified distribution agencies as our partner but final selection depends on the reach
and cost benefits. We are planning to enter into alliance with major distributors of food
products as they have already a well-established network with. The following figure depicts
the distribution channel of TenderCoco:

4|Page

5.3 Promotion and Advertising Strategy

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 be our major challenge. TenderCoco will reach its target market through the following
ways:
1.

Health Awareness Campaign: TenderCoco will launch health care campaigns with
special focus on healthy drinking in various public locations and educational
institutions.

2.

Community Radio, TVCs and Newspaper Ads: Mass marketing will be employed
by advertising via these conventional media. TenderCoco will use these strategies to
let people know about the benefits of healthy coconut drinking.

3.

Mobile Car Van: We also plan to start on-the-go stores by offering our drinks at busy
junctions and school areas.

4.

Sponsoring public events: We also plan to sponsor public events which involves high
community engagement like sports programs of local etc.

As a part of our product launch, a ribbon-cutting ceremony including any reputed public figure
along with media personalities 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. The promotion strategies of our product line:
1. Coco Natural We promote this as a replacement for artificial soft drinks. It is Refreshing
and packed with nutrients, our original line is Mother Nature's drink of choice.
2. Coco Fruits A special coconut drink with different flavors (fruits). This is targeted at
young generation who want variety.
3. Coco Junior Kid-friendly flavors packed with nutritional benefits
6. Management
TenderCoco is a privately held firm led by a team of young enthusiastic individuals and guided
by experienced senior professionals. Md. Elias will oversee the core operations of TenderCoco.
He is currently pursuing Management degree from Dept. of Management, University of Dhaka.
Another co-promoter, Md. Tanver Ahmed, will be responsible for taking reports from VP of
Finance and Accounting Departments. He has sound knowledge on finance and tax related
matters. Md. Sharif will handle the Human Resources activity and Md. Hafizur Rahman will
be responsible for maintaining distribution channels respectively. He has rich experience in
distribution, marketing and sales.
7. Operations
7.1 Operations Strategy
TenderCoco 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
and minimize competition, we have plans to source tender coconuts from street vendor at large
volume. The farm fresh tender coconuts are then processed and coconut water extracted. This
water is refined and ingredients are added. After this the water is packed, this is taken to the
cold storage and later placed in company warehouses. From the warehouses the product is

5|Page

taken to the retailers with the help of distribution partners. A flowchart below depicts the major
processes involved.
We will purchase 2 special trucks with refrigeration and cold storage facilities which will be
used to transport end products to the retailers. The capacity of 1 truck is approximately 5,000
end products. Rented trucks will be used once a week to transport the tender coconuts and
stored shells from the company to the charcoal industry.

Fig: Value Chain

7.2 Location
TenderCocos plant will be located at Ramu near Coxs Bazar because the raw material is
available there. It is famous for its large coconut garden, which is located at the 3-4 km far
away from Ramu Sub-district. It has the largest coconut garden among the south Asia. It put
up with about one million Coconut tree. The coconut garden of Ramu made upon two hundred
acres land. It is an asset of Bangladesh Government and maintained by Food Crops Wing of
Department of Agricultural Extension under Agriculture Ministry.
7.3 Personnel Requirement
The total manpower requirement for our project is about 40 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.
Operational Segments

No.

Roles

Annual
Salary/Wages

Management/Operations

Admin, Human Resources, Legal &

Taxes

1,500,000

Finance & Accounting

Finance, Accounts

1,000,000

Marketing and Logistics

Supply Chain, Marketing & Sales,

Logistics

2,500,000

6|Page

Factory Workers

22

Lineman, Operators,
Loaders/Unloaders
Total Payroll (Tk.) =

2,000,000
7,000,000

The factory workers will be provided orientation & technical training to operate the machines
& processes. They will also be trained to do some minor maintenance and repair work. In the
expansion phase when we add more capacity, we will be recruiting extra manpower for the
required functions and provide them with necessary training.
Profit Sharing: The total number of promoters is 6 (six) and all of them will constitute Board
of Directors of TenderCoco. They will be entitled to receive 20% annual net profit of the
company from 2nd year of business operation.
7.4 Production
We will produce 150 ml, 200 ml, 400 ml and 800 ml capacity which amounts to about 9,50,000
units annually. In addition to this we also have plans to introduce larger capacity bottles of 1
liter and another product line coco caf in the next year. We also plan to introduce coconut
oil on the same year. A tender coconut has about 400 ml 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 liter
of water. The total capacity of our unit will be about 250,000 liters of coconut water annually
and it will be increased further year.
7.5 Quality Practices in TenderCoco
Pre-Harvesting: Coconuts must be harvested at 9 months of maturity to obtain the maximum
volumes of water & maintain the consistency of taste.
Harvesting: Harvest coconuts that are in sound condition during the earlier or cooler part of
the day. Lower coconut bunches to the ground with the use of rope and bunches should never
be dropped.
Post-Harvesting Handling: Coconuts are highly susceptible to mechanical damage. Thus,
careful handling and transportation to avoid cracking of coconuts. Harvested coconuts are kept
in clean, well-ventilated surfaces off the ground (on a rack). Coconut water should be collected
from the harvested coconut within 24 hours of harvest. Examine the coconuts during washing
and discard damage or immature coconuts. Transfer the water-washed coconuts into sanitizing
solution for at least 15 minutes. Dry in a clean oven or dryer at 100o C
Bottling & Packaging: Rapidly bottle and seal the cooled (4o C) coconut water in pre-labelled
bottles and refrigerate coconut water immediately after bottling. Store bottled coconut water at
4o C, away from light. Maintain pH level for coconut water from 5 5.4 (scale of 0 to 14) and
Brix from 5 6.5
Distribution: Keep bottles of coconut water on ice during distribution. Monitor retail outlets
to ensure that the bottled coconut water is stored at the correct temperature and away from
direct light.

7|Page

7.5 Operational Expenses

We will source the coconuts at Tk.20 per. The total initial investment is Tk. 6,500,000. The
major expenses include the raw material costs which is about Tk. 16,333,333 and total factory
operational expense is Tk. 2,000,000 annually. To optimize the power cost we plan to alter the
requirements of machine for processes which could be done easily by humans. The machinery
and equipment 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.
8. Financials
8.1 Startup Costs
Our total startup cost is Tk. 6,500,000. We expect to raise Tk. 4,500,000 of our own capital
and Tk. 1,500,000 loan from bank @ 15% interest and the remaining funds from others sources
(friends & relatives) worth Tk. 500,000.
The following table summarizes Initial Requirements of the Project:
Particulars
Land and Buildings
Machineries
Delivery Van (2 x Tk. 1,000,000)
Storage Facilities
License Fee to BSTI (One time)
Working Capital
Preliminary and Capital Issue Expenses
Other Fixed Assets

Amount (Tk.)
1,000,000.00
1,000,000.00
2,000,000.00
200,000.00
100,000.00
1,500,000.00
200,000.00
500,000.00

Total Cost =

6,500,000.00

Means of Financing & Cost of Capital:

Sources

Amount

Proportion

Cost of Capital

Issued Share
(450000 shares @ Tk. 10/share)

4,500,000.00

69%

20%

Loan from Bank @ 15% interest

1,500,000.00

23%

15%

500,000.00

8%

6,500,000.00

100%

17.25%*

Others (friends & relatives)

Total =

*WACC = [(20 x .69) + (15 x .23) + (0 x .08)] = 17.25%

8|Page

8.2 Breakeven Analysis

The following table gives the break-even point for the first year.
Particulars

Formula

Units

Break-even point in sales (liter)

Fixed Costs Contribution

Margin*

162,805.2599 liter

Break-even point taka

Break-even (Liter) x Selling

price per unit

Tk. 25,817,658.11

*Contribution margin = selling price per unit variable expense per unit = Tk. 47.91
8.3 Sales Forecast

Sales Forecast
Total Estimated Sales: 200,000 liters
For the 1st year

Product

Coco Natural

Coco Fruit

Coco Junior

Available
Size

Price/Unit
(Tk.)

200 ml

30

Sales
Volume
(Tk.)

No. of Packets
Percentage of
Sold
Total Production
40%
(80,000 liters)

240,000

7,200,000

60,000

3,300,000

10,000

1,050,000

180,000

6,300,000

45,000

2,925,000

7,500

937,500

400 ml

55

800 ml

105

200 ml

35

400 ml

65

800 ml

125

150 ml

25

30%
(60,000 liters)

400,000

10,000,000

Total =

200,000 liters

942,500 units

31,712,500

30%
(60,000 liters)

Sales Per Liter (Tk.) = (31,712,500 200,000 liters) = Tk. 158.5625

9|Page

8.4 Projected Profitability

The projected profit and loss statement is shown below.

TenderCoco Pvt. Ltd.

Pro forma income statements
For the first 5 years
Particulars

Year 1

Year 2

Year 3

Year 4

Year 5

Liters

200,000

260,000

280,000

300,000

320,000

Sales

31,712,500

41,230,800

44,402,400

47,574,000

50,745,600

600,000

780,000

840,000

900,000

960,000

Total
Revenues

32,312,500

42,010,800

45,242,400

48,474,000

51,705,600

(-)Variable
Expenses

22,133,333.33

28,773,333.33

30,986,666.67

33,200,000.00

35,413,333.33

Contribution
Margin
(-)
Fixed
Costs

10,179,166.6
7

13,237,466.6
7

14,255,733.3
3

15,274,000.0
0

16,292,266.6
7

7,800,000

7,800,000

7,800,000

7,800,000

7,800,000

EBIT

2,379,166.67

5,437,466.67

6,455,733.33

7,474,000.00

8,492,266.67

225,000.00

225,000.00

225,000.00

225,000.00

225,000.00

2,154,166.67

5,212,466.67

6,230,733.33

7,249,000.00

8,267,266.67

753,958.33

1,824,363.33

2,180,756.67

2,537,150.00

2,893,543.33

1,400,208.33

3,388,103.33

4,049,976.67

4,711,850.00

5,373,723.33

Revenue from
other sources

(-) Interest
EBT
Tax (35%)
Net Income

TenderCoco Pvt. Ltd.

Pro forma Balance Sheet
For the first 5 years
Particulars
Assets
Total Current
Assets
Total
Fixed
Assets
Miscellaneous
Assets

Year 1

Year 2

Year 3

Year 4

Year 5

2,554,166.67

5,510,691.00

9,250,672.33

13,520,152.3
3

18,369,131.0
0

4,300,000.00

3,900,000.00

3,500,000.00

3,100,000.00

2,700,000.00

1,700,000.00

1,500,000.00

1,300,000.00

1,100,000.00

1,000,000.00

10 | P a g e

Total Assets

8,554,166.67

10,910,691.00

14,050,672.33

17,720,152.33

22,069,131.00

1,000,000.00

800,000.00

700,000.00

600,000.00

650,000.00

1,500,000.00

1,500,000.00

1,500,000.00

1,500,000.00

1,500,000.00

Owner's Equity

5,900,208.33

8,610,691.00

11,850,672.33

15,620,152.33

19,919,131.00

Total
Liabilities and
Equities

8,554,166.67

10,910,691.00

14,050,672.33

17,720,152.33

22,069,131.00

Liabilities and Owner's Equity

Short
term
Liabilities
Long
Term
Liabilities

8.5 Cash Flow Statement

TenderCoco Pvt. Ltd.
Pro forma Cash flow Statement
For the first 5 years
Particulars
Sources of Funds

Year 1

Year 2

Year 3

Year 4

Year 5

Share Capital

4,500,000.00

Profit before
taxation with
interest

2,379,166.67

5,437,466.67

6,455,733.33

7,474,000.00

8,492,266.67

Total

6,879,166.67

5,437,466.67

6,455,733.33

7,474,000.00

8,492,266.67

6,500,000

225,000

225,000

225,000

225,000

225,000

Taxation

753,958.33

1824,363.33

2,180,756.67

2,537,150

2,893,543.33

Dividends

677,620.67

809,995.33

942,370

1,074,744.67

Total

7,478,958.33

2,726,984

2,405,756.67

2,762,150

3,118,543.33

Change in
Cash

(599,791.67)

2,710,482.67

4,049,976.67

4,711,850.00

5,373,723.33

Disposition of Funds
Capital
expenditure
Interest
on
bank loan

11 | P a g e

8.6 Calculation of Pay Back Period (PBP), Net Present Value (NPV):
Year

Cash flow

Cumulative Cash Flow

(6,500,000.00)

(6,500,000.00)

(599,791.67)

(7,099,791.67)

2,710,482.67

(4,389,309.00)

4,049,976.67

(339,332.33)

4,711,850.00

4,372,517.67

5,373,723.33

9,746,240.67

Calculation of Pay Back Period (PBP):

Pay Back period (PBP)

=A+B/C
= 3 + (339,332.33/4,711,850)
= 3.07 Years

In the above formula,

A is the last period with a negative cumulative cash flow;
B is the absolute value of cumulative cash flow at the end of the period A;
C is the total cash flow during the period after A
Calculation of Net Present Value (NPV):
NPV

Ct
nt=1 (1+r)t
Initial Investment

= (8,890,704.051 6,500,000)
= Tk. 2,390,704.051

Internal Rate of Return (IRR) = 25.26%

11.0 Conclusion
Our company makes products that are healthy and has a huge demand both in home and abroad.
The location of our factory helps us in getting raw materials at a low cost. The plant is located
closer to other major places in Chittagong, Dhaka and other regions. TenderCoco is into a
business which is widely promoted as eco-friendly. We have solid growth plans as we plan to
invest more to diversify into other coconut products. However, there is a changing perception
among the people about the artificial drinks as we see them shifting to natural drinks. This
changing trends and other favorable factors will act as catalyst for our future growth as a
leading natural drink provider of country.

12 | P a g e

References
1. Bari.gov.bd, (2015). Bangladesh Agricultural Research Institute (BARI)Government of the People's Republic of Bangladesh [online] Available at:
http://www.bari.gov.bd/ [Accessed 10 Oct. 2015].
2. Chandra, P. (2009). Projects. New Delhi: Tata McGraw-Hill.
3. Daily-sun.com, (2015). Vista of huge coconut garden in Ramu, Coxs Bazar.
[online] Available at: http://www.daily-sun.com/post/7722/Vista-of-hugecoconut-garden-in-Ramu-Cox%C3%AF%C2%BF%C2%BDs-Bazar- [Accessed
13 Oct. 2015].
4. Vitacoco.com, (2015). Vita Coco | Welcome to Vita Coco. [online] Available at:
http://vitacoco.com/ [Accessed 12 Oct. 2015].

13 | P a g e

Appendices
Cost of Production (per liter):
Coco
Natural
75.00

Coco
Fruits
90.00

Coco
Junior
80.00

Avg.
Cost/Liter
81.67

Labor Costs

10.00

10.00

10.00

10.00

Utilities Costs

4.00

4.00

4.00

4.00

Factory Overhead

4.00

4.00

4.00

4.00

Total

93.00

108.00

98.00

99.67

Items
Material Costs

Variable Costs:
Items

Cost/liter (Tk.)

Total Cost (Tk.)

Material costs

81.67

16,333,333.33

Labor costs

10.00

2,000,000.00

Factory overhead

2.00

400,000.00

Utilities costs

2.00

400,000.00

Packaging costs

10.00

2,000,000.00

5.00

1,000,000.00

110.67

22,133,333.33

Variable selling
administrative cost

and

Total variable cost

Fixed Costs:
Particulars
Salary

Amount (Tk.)
5,000,000.00

Utilities

400,000.00

Rent

300,000.00

Depreciation

400,000.00

Manufacturing Overhead

400,000.00

Advertising

1,200,000.00

Absorption

35,000.00

Others

65,000.00

Total

7,800,000.00

Per Unit Fixed Costs

39.00

14 | P a g e