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Doing

Business
In
China

Sugarcane Juice
BUS 251 Report
Company Name
Dynamic Venture Plc.

Prepared For
Mabel D Costa(MDC)
Lecturer, North South University

Prepared By
Name
AKM ABDUL ALIM
MD. IQBAL HOSSAIN
MD. MOSHIUR RAHMAN
MD. ADEEL ANJUM

ID
123 0675 030
123 0176 630
131 1003 630
132 1311 630

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Table of Content
Acknowledgement......................................................................................................... 3
Letter of Transmittal................................................................................................... 4
Executive Summary.................................................................................................... 5
Why sugarcane juice.................................................................................................. 6
The Product................................................................................................................ 7
Food Value:................................................................................................................. 8
Manufacturing and Operations Plan........................................................................... 9
1. Production of Sugar cane:...........................................................................9
2. Machines:........................................................................................................ 9
3. Juice processing........................................................................................... 10
4. Packaging..................................................................................................... 11
Essentials & Desirable Characteristics......................................................................12
Targeted Country...................................................................................................... 13
Bibiliography:............................................................................................................ 17

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Acknowledgement

The most pleasant part of submitting the report is to get the opportunity. We would like to thank
those who have contributed to it a lot. Unfortunately, the list of expression of thanks- no matter
how extensive is always incomplete and inadequate. These acknowledgements are no exception.
First of all we would thank almighty Allah for bestowing us the patience and courage to finish
this huge task within deadline.
In addition, we would also like to thank those people who have provided us their precious time
regarding our product. At last, we sincerely acknowledge our debt to Miss Mabel DCosta, our
honorable faculty, for his valuable counseling towards the improvement of the project. Without
his encouragement, this would have never been possible.

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7TH April 2015


Mabel DCosta
Lecturer, North South University

Subject: Report Submission on Sugarcane Juice by Dynamic Venture Plc


Dear Miss Mabel,
We are pleased to submit a report that you asked for, we have tried to introduce a new product
which is Sugarcane Juice. We tried our best to make the report informative and precise.
This study was very useful to us as it gave us the knowledge on things we need to think and
analyze before launching a new product. We learnt things here which may get very useful in the
future. We sincerely hope that we could fulfill your expectations.
This report is an outcome of the efforts of all of our group members and we thank you for giving
us such an interesting topic to work on and hope we could do it accordingly. We also apologize
in advance for any mistakes left in this report.
Yours Sincerely,

AKM ABDUL ALIM

MD. IQBAL HOSSAIN

MD. MOSHIUR RAHMAN

MD. ADEEL ANJUM


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Executive Summary
The name of our business is Dynamic Venture PLc. As a part of our group training program we
are developing a new product. We are developing Sugar Cane Juice that will be produced in
China. There is a big market for soft drinks and other kinds of beverages so it is a good
opportunity to launch a product like this. Whether in the cities, towns or villages sugarcane juice
is very popular as it is a familiar scene that people are chewing raw sugarcane during its season.
But due to hygiene factor & lack of clean & safe drinking water it is a major issue for the
consumers. Therefore keeping that in mind we have chosen China where we will produce our
sugarcane juice. In order to process the juice we would mix lemon extract and other acidic
material along with it. In order to learn about the market potentiality, we surveyed to sixty
respondents and ask them questions regarding the industry. We have also done PEST analysis to
get an inside view of the market which we have provided in the report. Our initial investment is
CNY (Chinese Yuan) 795000.00 and we have calculated that the Break Even Point for units is
CNY 10675.92and for monetary value is CNY 128110.95. In addition, we will be able to get the
investment back within 3 years. Apart from that China is large economy which is has the lowest
labor rate of 3-4 dollar. Therefore as we need to produce our product in a low cost effective
method therefore China is the best decision we have taken. Since machinery that are needed is
readily available and we know that China has the expertise on electronics & machinery sector as
well. Then Young people are proactive and working side by side therefore chances of ineffective
workforce is low & from young people we can get the new ideas as to how to expand our
production. As supporting these points we have given it in the analysis as well as in essentials
category. Apart from that, skilled labor, good working condition & fast packaging at a
competitive rate can only be possible in China. As its a food product therefore we plan to focus
more on quality control to provide the consumer the safest & vitamin enriched drink at a very
low price. So that we can say made in china food products are great in the international market
scenario.

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1a. Why sugarcane juice


Sugarcane is one of the premier cash crops of China. With a production of 10 million tones of
sugar, 90% of which is produced from cane, China is a major player in the sugar industry. The
province of Guangxi produces 60% of the countrys total volume. In China they produce raw
sugar, molasses etc. Like people from other parts of Indian subcontinent, chewing raw sugarcane
to have the juice is a very popular in China. During the season of sugarcane, it is a very common
scenario that, men and women regardless of their ages are chewing raw sugarcane in order to get
it has sweetened juice. Sugarcane juice is also a popular street beverage in China. Street vendors
use machine to squeeze out juice from sugarcane stick and serve to consumers in glasses.
Despite of being unhygienic and served in an unhealthy manner a large number of people
consume it for its unique taste. Although we could not find out any statistical data regarding
sugarcane consuming on the street through our observation and research we have find out it is a
very popular commodity.

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1a.1. The Product


As it has been mentioned earlier we are producing sugarcane juice. As the name suggests the
main raw material for our product is raw sugarcane. In order to preserve the juice for long time
we would use extract of lemon and 4% of Sobric acid as after extracting the sugarcane juice
fermented within 48 hours. The problem with the sugarcane juice is that it get contaminated too
fast as it contains high amount of sugar it attract flies easily. We are maintaining a neat and clean
condition in the factory to produce a healthy drink. Sugarcane is filled with substance that is
beneficiary for health. Sugarcane, being low on glycolic index, helps keep the body fit and
healthy. Sugarcane juice has been found to be very beneficial for preventing as well as treating
sore throat, cold and flu. Since sugarcane has no simple sugar, diabetics without any fear can
enjoy it. However, they intake should still be limited for people suffering from type-2 diabetes.
Being alkaline in nature, sugarcane juice helps the body in fighting against cancer, especially
prostate and breast cancer. Sugarcane provides glucose to the body, which is stored as glycogen
and burned by the muscles, whenever they require energy. Therefore, it is considered one of the
best sources of energy. If anyone has been exposed to heat and physical activity for too long they
could drink sugarcane juice. It will help hydrate the body quickly. Sugarcane is believed to
strengthen stomach, kidneys, heart, eyes, brain, and sex organs. Sugarcane juice is an excellent
substitute for aerated drinks and cola. Sugarcane clears the urinary flow and helps the kidney to
perform its functions smoothly. Sugarcane juice has been found to be good for those who are
suffering from febrile disorders. Febrile disorders are responsible for causing fevers, which can
result in a great amount of protein loss from the body. Liberal consumption of sugar cane juice
provides the necessary protein and other food elements to the body. Sugarcane is beneficial for
maturation, caused due to high acidity, along with gonorrhea, enlarged prostate, cystitis and
nephritis. Mixing sugarcane juice with lime juice, ginger juice and coconut water will give better
results. Sugarcane juice is said to speed up the recovery process after jaundice. As sugarcane
consists of carbohydrates, in good quantities, it serves to refresh and energize the body. It
supplies instant energy to working muscles and for this reason, it is also known to maximize
performance in sports and endurance. Sugarcane is also good for digestion, as it can effectively
work as a mild laxative because of its high potassium content.
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1a.2. Food Value:


1) Sugarcane juice is a great preventive and therapeutic source for sore throat, cold and flu.
2) It has a low glycerin index that keeps the body healthy.
3) This is one sweet drink even the diabetic can enjoy without fear because it has no simple
sugars.
4) Due to its alkaline nature, it helps to fight cancer. Studies indicate that it has positive
activity against prostate and breast cancer cells.
5) It hydrates the body quickly when exposed to prolong heat and physical activity.
6) They are excellent substitutes for aerated drinks and cola.
7) It refreshes the body right away, as it is rich in carbohydrates.
8) Sugarcane strengthens the stomach, kidneys, heart, eyes brain and sex organs.
9) Febrile disorders that causes fever where there is a great amount of protein loss. However,
liberal intake of sugarcane juice provides the body with necessary protein and other food
elements.
10) It keeps the urinary flow clear and helps the kidneys to perform their functions smoothly.
11) It can accelerate recovery from jaundice.

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1b. Manufacturing and Operations Plan


Sugar cane is one of the premier cash crops. Sugarcane industry has a long industry. In the part
of manufacturing and operation in our business plan most of the elements are related to the
production of sugarcane juice. It mainly outline our needs in terms of a few area like facilities,
location, space requirements, capital equipment, labor force, inventory control and purchasing.

1b.1. Production of Sugar cane:


In the production as we said, at the initial stage, we will buy a land and cultivate sugar cane but
it takes time to grow and we cannot just sit and wait for it to grow. On the other hand in the m
meantime we will buy sugar cane from local supplier. Therefore it will save our time and the
next time for the production, we can use the sugar cane grown by us.
In the production process, we can see that this industry involves four basic processes: the
cultivation of cane, the milling of the cane to extract the juice, the rendering of the juice and
packaging.

1. Machines:
The machine we are using has these criteria

Fixed 3-Rollers Noise less operation


One Hp IEC Standard energy efficient Motor
Gearbox from NORD Drive Systems, India
Maximum juice extraction in one time
Designed for sugarcane with dia up to 4.0 inch
Even more than one sugarcane can be inserted with smaller dia
Great crushing Speed up to 250 kgs per hour
Very Hygienic and made with food grade stainless steel
All stainless steel Body Never get rusted
Latest sealing technology No rusting of bearings, & jamming

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After we are done cultivating and crushing out the juice through the machineries from the cane,
it is time to process the juice-

1b.2. Juice processing

Filtration

Filtration is required to remove fibers debris and other solid impurities from the fresh extracted
juice. The filtrated juice can then be sold as fresh beverage. For further processing to obtaining
cane sugar and by-products, another treatment is required that is the boiling of the juice.
In this process, firstly we have to add lime to the juice in order to coagulate impurities which
then settle out, and secondly add sulphur dioxide to neutralize the resulting acidity. [The
addition of sodium, hydrogen, sulphate components at the end of the boiling process can also
coagulate impurities and lighten the color of the final product - and increase sulphur content].

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Boiling

This is done in large pans over open fires or simple furnaces. The essential requirement is for clean pans
and tools. Sediment settles to the bottom of the pan during boiling and is dredged out. Scum rises to the
top and is skimmed off. Both of these wastes are good for animal. The end of the boiling process is
judged from experience - that is from the sight and sound of the boiling juice. Small samples can be
removed to see if they set solid when cooled. Technically, this usually corresponds to a Brix (sugar
content). After removal from the heat, the pans of juice are rapidly stirred to incorporate air and trigger an
even

crystallization.

The

cooling

juice

is

then

poured

into

pots

or

moulds

to

set.

1b.3. Packaging
The whole packaging of the juice is included in the machine we are out sourcing to a packaging
company. This helps us to save our time and effort. Here, the packaging of the juice will be in
plastic bottles which is easy to consume and convenient for the customers.

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2. Essentials & Desirable Characteristics:

Availability-In order to produce sugarcane juice, the producing nation must have a
continuous and bulk availability of sugarcanes

Cost-. A country having a high cultivation of sugarcane can offer lower prices for raw
materials (sugarcane) than a country which has a lower volume of cultivation.

Transport cost-In this case the cost of transport would have a massive effect as the core
raw material is bulk in size and is not expected to produce more than 2 units of output
(assuming 250ml/pack).

Technological advancementto keep it dirt-free and hygienic the production process is


preferred to be automatic. So, a chosen country should have experience in producing
juices with automated disposals in cans/bottles which would also reflect the availability
of technical skills in the country. Furthermore, if the country has availability of
automated machines, it would also help for further solutions of technological failures and
would prevent disrupted production.

Export friendlyThe producing nation should have export friendly/supporting facilities


to ease down the export process. Furthermore it can also benefit in monetary terms if the
country offers tax rebates or less/no export duties for exports.

Remittance As sending money to the producing country would be a very frequent task,
the remittance process should preferably match with Bangladesh to perform day to day
tasks easily.

Labor Even though the production process is preferred to be automatic, the cost of
labor would indirectly affect the total cost as it would primarily affect the cost of
cultivation. Moreover, it would also affect as labors would be required to operate the
machines as well.

Communication easeCommunication is the basic ingredient for business development.


There should be enough literacy in the country that the people can communicate with us.
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3. Targeted Country
3.1 Introducing the country
For the production process of our canned sugarcane juice, we choose China. China is the second
largest country by land. It has a vast area of croplands and the third country to produce the most
sugarcane with more than 125 thousand metric tons of sugarcane per year.
Another reason for choosing China as the production hub for our product is cheap labor cost.
Labor cost per hour in China ranges from $2-$4 which is really cheap compared to other
industrial countries. The other operational costs are also low. Such as- China ranks 3 rd in
sugarcane production, so the raw material cost is also low.
Moreover, if our sugarcane juice is produced there it may attract the Chinese customers. So,
there is a potential consumer class ready for our product in China. Production in China is also
rising as it rose by 29% last year, the highest since the mid 90s.
So, considering all these facts China seems to be the best hub for producing our product if
monitored properly.

3.2 PEST analysis of the country

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PEST analysis is a macro environmental framework to understand the political, economic, social
and technological factors that can affect a business. It is also a strategic tool used for analyzing
the business environment.

3.2.1

Political Analysis

Political factors are related to rules and regulations and the government policies to influence a
business positively and negatively.
The government policy of China can be characterized as one party communist dictatorship. It
helps the country to be nationally stable and also the economy to grow and sustain the growth.
Since the economy has reformed in 1978, China has become one of the fastest growing
economies in the world. The country is also the largest exporter and importer of goods. The
economic decentralizations and the eased foreign trade policies have helped the number of
foreign investors to rise and boost the economy of China.
The Labor laws have also been eased up. In the new laws, the government changed the job
structured and became less strict which may create opportunities for unemployment in the rural
area creating jobs for the less educated like farmers and less educated but trained labors. It was
done so that not many people stay unemployed and there is at least place to work for everyone.
So, there is a huge job market.
The foreign trade policy is also flexible. The laws also support foreign investors. The income tax
law, company law etc provide legal bases for foreign enterprises to conduct independent
operation in China. After the economic reform in 1978 the private sectors have moved forward
faster. The open door for foreign businesses has led to a direct foreign investment of over 100
billion dollars as of 2008.
However, there is a challenge for foreign businesses. As there is only one-party communist
dictatorship, there is very little transparency in rules and regulations and they are also very
vulnerable which makes it challenging for foreign investors to invest in China.

3.2.2

Economic analysis
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Chinas economy is one of the fastest growing economies since 1978 when the economy was
reformed and opened up.
The annual GDP of China is 9240.27 Billion USD as of 2014. Even after the economic recession
around the world, China has maintained an annual GDP growth rate of 7.30% in 2014.
People around the world are very much familiar with the label Made in China and many
companies around the world have shifted the production of their products in China because of
the skilled labor force and lower labor costs. China has an unemployment rate of 4.1% and
inflation rate of 1.4%.
The industrial sector contributes 46.9% of Chinas total GDP, service 43% and agriculture
contributes the rest 10%. China is one of the leading manufacturers of electronic equipments in
the world. They also produce clothing, medical equipments, plastic products and furniture in
large numbers.
One key factor that can challenge foreign investors or foreign producers to produce in China is
the tax rate for foreign investments in China is 30% which is 10 times higher than local
investments.
3.2.3

Social Analysis

China has a population of about 1.3 billion. More than 70% of the population is under the age
group of 15-64 years. This happened because of the birth limitation policy which previously was
maintained strictly. This had a negative effect in the workforce in China. There are not enough
young workers to replace the jobs of the old workforce or the people who are about to retire. It is
a bad news for firms who want to run production process in China. Because production needs
young hands people who adapt to changes quickly and who are optimistic.
Moreover, there is inequality in the income distribution. The average income in east China is
2.26 times of the income of west China. There is also huge income gap between the urban and
rural China.
Education is becoming more and more important day by day. That is why the Chinese
government now encourages international schools and colleges to join venture with Chinese
schools. The literacy rate is 95.1% in China.

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Chinese language and culture is the main barrier for foreign firms to invest or to run production
in China. Chinese culture is very different. Their food habits are also different. Chinese people
prefer to talk in Chinese language and many of them do not learn English properly. So, if a firm
wants their own manager to go and monitor the production in China, he needs to learn Chinese
be familiar with their food habits. Moreover, foreign companies may need bi-linguists to
communicate with the Chinese agencies.

3.2.4

Technological Analysis

China has exponentially grown in technological fields. They are worlds one of the largest
producers of electronic equipments. Moreover, China is very rich with mineral resources and that
is why production technology is a cutting-edge field for China. China is a leading country in
innovative technologies and therefore a well-known location for customization and production.
One key challenge for China was to reduce the amount of energy usage which was a threat for
the environment. Now, the energy consumption has become low. Energy usage fell by almost 9%
between 2004 and 2009. China plans to reduce the dependence on energy by conserving energy
and reducing emission. China government spent more than 34 billion USD in the clean-fuel
project in 2009. The information technology has also boomed the economy of China. There are
more than 641 million internet users in China with over 20 million internet hosts. These have
eased the way of foreign trading with China.
The transport of China is also a key feature for flexible production process in China. There are
over 500 airports, the third largest railway system of world in China.

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