1.

Executive Summary
‘Twinkle Palm oil Business’ is a standard palm oil processing business that will be based in
Gopalganj. Although we intend starting out on a small scale by purchasing palm kernel from
farmers, but that will not in any way stop us from maximizing our potential in the palm oil
processing line of business.
Our business goal as a palm oil processing business is to become the number one choice of
households and petty traders in Bangladesh and other countries of the world where we intend
retailing our palm oil. As a business, we are willing to go the extra mile to invest in owning our
own palm tree plantation and also to hire efficient and dedicated employees. We have been able
to secure permits from all relevant departments both at local government level.

Twinkle Palm Oil Ventures is set to redefine how standard palm oil processing business should
be run, not just in Gopalganj, but also in the whole of the Bangladesh. This is why we have put
plans in place for continuous training of all our staff at regular interval.
In the nearest future, we will ensure that we create a wide range of distribution channels all
across Bangladesh. With that, we know we will be able to maximize profits in our business.
Twinkle Palm Oil Ventures will at all-time demonstrate her commitment to sustainability, both
individually and as a firm, by actively participating in our communities and integrating
sustainable business practices wherever possible. We will ensure that we hold ourselves
accountable to the highest standards by meeting our customers’ needs precisely and completely.

2. Company Description
2.1. An overview of business
Palm oil processing industry is an industry that is highly thriving in countries in the African
continent and in some part of Asia. Bangladesh is one of the countries in Asia that uses a lot of
palm oil. Although locals in rural communities run this type of business on a small scale, there

0
are medium scales to big time investors who also operate standard palm oil processing
businesses.
These are the organizations that own their own palm tree plantations and also engage in
exportation of well-packaged palm oil to countries across the world. In most cases, they ensure
that they target countries with robust African communities.

2.2. A description of product and/or service.

We are very much aware of the importance of having very good products and services. This is
one of the reasons why we have made great plans to have the best of products and services. At
Twinkle Palm Oil Ventures, we will be involved in palm oil processing, packing and wholesale
distribution across Bangladesh, Asian Coats and the world at large. Our intention of starting
Twinkle Palm Oil Ventures is to make profits from the palm oil processing line of business and
we will do all that is permitted by the law in Bangladesh to achieve our business aim and
ambition.
2.3. Goals for the business.

Vision:
 To capture all over the world as a core product.
 To be a number one product.

Mission:

 To continue our strategy of controlled growth and through improved management to continue
to increase our net margin
 To increase client satisfaction, through improved reporting, accuracy, timeliness and
estimates of cost and value, together with a better understanding of our Client’s needs
 Whilst maintaining our commitment to core water industry customers, continue to diversify
into targeted markets in Energy, Rail & Scotland
 To learn how to formulate an effective Business Plan.
 To continue our strategy of controlled growth and through improved management to
continue increasing our net margin
 Operating the firm efficiently.
 Funding the firm.
 Seeking financing.
 Arranging strategic alliances.
 Obtaining large contracts.
 Testing the viability of our plans.
 Attracting key employees.
 Business plan can uncover omissions and/or weaknesses in our planning process.

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2.4. Proposed target market

When it comes to retailing processed palm oil, there is indeed a wide range of available
customers. In essence, our target market can’t be restricted to just a group of people, but all those
who make use of palm oil for cooking and also all those who make use of palm oil as raw
material in the cottage industry.
In view of that, we have conducted our market research and we have ideas of what our target
market would be expecting from us. We are in business to engage in retailing and wholesale
distribution cum exporting of palm oil to the following groups of people:
 Households who make use of palm oil for cooking
 Restaurants and canteens that make use of palm oil for cooking
 Small-scale businesses that make use of palm oil as part of their raw material.

2.5. Why we select this business

First and foremost, it is very beneficial in many cases that make more and more profit. According
to the American Palm Oil Council, palm oil has been consumed for over 5000 years. Its health
benefits are numerous, and additional benefits continue to be discovered. It is now a leading
crop, and according to Dr. Betty Kamen, PhD, palm oil is the second most common vegetable oil
produced worldwide. Some benefits are particular to the hair and skin, however it is

Reduce risk of macular degeneration and cataracts

Helps to improve energy level in body
Beneficial in prevention of cancer
Boost hormonal balance
Improved blood circulation
Regulated cholesterol levels
Reduced free radical damage and inflammation
Reduced blood pressure
Alleviate strain cardiovascular system
Prevent vitamin deficiencies in pregnant women and children
Palm oil can be used in many different foods without affecting their taste or smell
Palm oil is very suitable for use in products with a long self-life. Products containing palm oil
maintain their flavors and structure – such as crispiness or crunch – for a longer period of time.

2
2.6. Management team and their prior experience
Ordinarily, we would have succeeded in running a palm oil processing business with few
employees, but as part of our plan to build a top flight palm oil processing business in Delta
palm, we have perfected plans to get it right from the onset which is why we are going the extra
mile to ensure that we have competent employees to occupy all the available positions in our
company.
The picture of the kind of palm oil processing business we intend building and the business goals
we want to achieve is what informed the amount we are ready to spend to ensure that we build a
business with dedicated workforce and robust distribution network.
In view of that, we have decided to hire qualified and competent hands to occupy the following
positions at Twinkle Palm Oil Ventures;
 Chief Executive Officer (Owner)
 Palm Oil Processing Plant Manager
 Human Resources and Admin Manager
 Sales and Marketing Officer
 Accountants / Cashiers
 Palm Oil Processing Plant Casual Workers
 Truck Drivers / Palm Oil Wholesale Distributors

2.7. Financial outlook for the business

When it comes to pricing for products such as palm oil, there are no hard and fast rules, the
prices depends are based on per liter or the container in which the palm oil are placed in.
In view of that, our prices will conform to what is obtainable in the industry but will ensure that
within the first 3 to 6 months our palm oil are sold a little bit below the average prices when
compared to other palm oil retailing businesses in Bangladesh. We have put in place business
strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging
people to buy into our brands.

2.8 Methodology
This is a business plan to establish a Palm oil business. Now a day, palm oil is a popular
cooking oil in Bangladesh. Palm oil is also a profitable business because people used Palm oil
in every day of his/her life. Our business plan is prepared by the queries of several Palm oil
industries. Some surveys have been conducted and some interviews were taken.

3. Summary of the project

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1. Name of the Project : Fast Forward palm plant (Pvt.) Ltd.
2. Business Type : Palm Oil manufacturing company
3. Form of Business : Partnership
4. Source of Finance : Individual Capital & Bank Loan
5. Product/Service
(We sell) : Palm oil & Kernel oil
6. Product/Service
(We Buy) : Palm Plant, Fertilizer
7. Brands : Shera
8. Number of Employees : 50-60
9. Main Customers : Local market of Bangladesh
Soap Manufacturer in Bangladesh
10. Management Certification : HACCP ISO 9001:2000

3.1. Location : Our project location is setting:

Sub Project Area Location

Project 1 Ramu, Cox’s bazaar
Project 2 Banderbans
Project 3 Rangamati.

Figure-1: Locations of the Business

4. Description of Palm Oil:

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4.1. What is Palm Oil?
Mainly palm oil is the cooking oil. Palm oil is oil, which is extracted from the fruit of the palm
oil tree. Palm oil is obtained from the reddish pulp of the fruit of a palm oil seed from the oil
palm tree. Through a series of processes, it can produce two different types of oil, i.e., palm oil
and palm kernel oil, which are used in products to treat several medical conditions such as:
vitamin A deficiency; cancer; brain disease; as well as malaria; high blood pressure; and high
cholesterol.

• Palm oil, referring to the oil extracted from the fruits of the palm oil tree, is edible plant oil that
is naturally reddish, as it contains high amounts of beta-carotene (antioxidant).
• The palm oil tree has an average productive lifespan of about 25 to 30 years. It can reach a
height of up to 30 feet (9 m) and produces fruit bunches from three years of age after field
planting.
• In each productive year, a palm oil tree may produce between 8 to 12 bunches of fruit.
• Each bunch weighs between 10–25 kg (22–55 lb) and contains between 1000 and 3000
fruitlets.
Loose fruits are ripe fruitlets, which have fallen from a ripe bunch. They are often used as an
indication to measure bunch ripeness.
• These fruits are the ripest in the bunch, and therefore contain the highest amount of oil.
• The palm oil fruit is almost spherical in shape. It consists of a hard seed (kernel) enclosed in a
shell (endocarp) which is surrounded by fleshy husk (mesocarp).
• Palm oil is extracted from the mesocarp. .
4.2. Composition of Palm Oil

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Palm oil contains about 50 percent saturated fat (majority of which is oleic acid), 40 percent
monounsaturated fatty acids (MUFAs), and 10 percent polyunsaturated fatty acid (PUFAs).

Palm oil gets its reddish color from the carotenes beta-carotene and lycopene, the same nutrients
that give color to carrots and tomatoes. Its carotene levels are 15 times higher than carrots and
300 times higher than tomatoes. This is why palm oil is hailed as the best source of beta-carotene
and alpha-carotene, both of which are precursors to vitamin A.

Palm oil also contains 20 other carotenes, as well as the following nutrients:

 Vitamin E, particularly tocotrienol

 Vitamin K
 CoQ10
 Squalene
 Phytosterols
 Flavonoids
 Phenolic acids
 Glycolipid

4.3. How to Make Palm Oil

In small and large operations, the four main steps followed in order to create palm oil are:

 Separation of the fruit from its bunch (Palm fruits grow in clusters)
 Softening of the fruit flesh
 Extraction of the oil from the fruit
 Oil purification.

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.
4.4. View of a palm oil

Palm oil, one of the world’s most widely produced and consumed oils, is a tropical oil,
growing only within 10 degrees north or south of the equator. These growing regions house
vast areas of tropical rainforest rich in biodiversity on the continents of Asia (such as
Indonesia and Malaysia, global palm oil production countries), Africa and South America due
to their warm temperatures, abundant sunshine, and plenty of rain suitable for maximizing
plantation yield and production.
The world largest suppliers of Palm oil are Malaysia, which produces 45% of the world’s
supply and Indonesia (39%) These countries would supply up to 20% of the European
Union’s biodiesel needs by 2010.

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4.5. A Closer Look at Palm Oil Processing and Technologies

Figure 2: Palm Oil Fundamental Processes

Preparation — cleaning, cracking and cooking to get raw oil seed or fruit
Seedlings are raised in the nursery for about 12 months prior to transplanting in the field. After
24 to 30 months, the oil palm starts to yield fruit in compact bunches called fresh fruit bunches
(FFB).Harvesting involves manually cutting ripe bunches using a chisel or sickle. Collection of
harvested fruits is either done manually, sometimes with a wheelbarrow, or mechanically using a
tractor-mounted grabber with trailer.
Extraction—Separation of oil from fruit or seed by mechanical, chemical or
mechanical/chemical processes
To preserve the freshness and quality of palm oil, the FFB are preferably sent to the mill for
extraction within 24 hours of being harvested. They are steamed under high pressure to sterilize,
loosen and soften the fruits before they are stripped from their stalks and mechanically pressed to
extract the oil.No solvents are used to express the oil.
Refining — The goal of refining is to remove undesirable components while retaining the
product.

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The extracted oil from the mill is called Crude Palm Oil (CPO).CPO is sent to a refinery where
impurities, colors (by bleaching) and odors (by deodorizing) are removed. The refinery would
also separate the solid (palm stearin) and liquid (palm olein) fractions of oil to cater to a wide
range of uses.
Modification — Provide the oil with the desired functionality (hardness, crystallization and
oxidative stability)
Interesterification (synonym of transesterification) — Mixing the methanol with a catalyst to
form fatty acid methyl esters (FAME)
Fat modification processes provide opportunities to offer an array of products reach out to new
customer groups and provide increased revenue for businesses. Strategic advantages to be gained
from modifying these fats include moving from the basic processing of bulk oils and fats and
focusing on a wider market spread and reach. This in turn allows the plant to better handle the
impact of seasonal demand, market volatilities and the global commoditization of basic
agricultural products.
Fat modification techniques like fractionation, interesterification (chemical or enzymatic) and
hydrogenation allow proposing a large range of new fatty products.

The simplest and cheapest fractional crystallization technique of fats and oils (i.e., no
chemicals, effluent or losses) is by far dry fractionation. The oil processing industry uses this
technique to extend the application of a variety of fatty matters as well as to replace, whether
fully or partially, the chemical modifications.Due to the continuous improvements and
developments of the dry fractionation process, a gamut of products normally produced by
solvent fractionation can now be obtained with a high degree of selectivity with dry
fractionation.

4.6. Product items: Our Production Item is setting in;

Items Package (In container)

Palm Oil 1,2,5&10kg
Kernel Oil 1000,2000&5000 Kg

Figure-3: Product Item for Business

5. Management aspect
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5.1 Corporate Set – up:

As our business is partnership, all the partners will active partner. Everyone will take part in the
business. All partners will be the board of directors. Besides, they will run the business by taking
the different post such as general manager, production manager, marketing manager, accounts
manager, and supervisor.

The names and posts of the management team

S/L No Name Post

1 Pobitro Paul General manager
2 Mst Afroja khanam Accounts manager
3 Kazi Rahazul Hasan Marketing manager
4 Sudipta Das Supervisor

Except these managers, there will also chief executive officer, palm oil processing plant manager,
human resource and admin manager, palm oil processing plant casual workers, truck drivers or
palm oil wholesaler distribution, engineers and other 30 to 40 workers.

5.2 Organizational Structure

Board of
directors/owners

General
Manager

Marketing Production Accounts

Manager Manager Manager

Supervisor

Figure-4: Organizational Structure

5.3. Duties and Responsibilities:

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The important duties of the partners are-

 Justice, Faithfulness: True accounts, Full Information: Partners are bound to carry on
the business of the firm to the greatest common advantages, to be just and faithful to
each other, and to render true accounts and full information of all things affecting the
firm to any partner or his legal representative. Sec-9
 Equality of losses: Subject to any contract to the country, partners are bound to pay the
losses of the firm equally. Sec- 13(B)
 No private benefit: A partner cannot use the partnership properties directly or
indirectly for his own benefit.
 NO secret profit: If a partner carries on any competing business of the firm, s/he shall
account for and pay to the firm all profits made by him on the business. Sec-16 (B)
 Unlimited liability: Every partner is liable for the acts of the firm done while s/he is a
partner. The liability is joint and several. Sec-25
 Decision making for every possibility will be done by Mr. X, Managing Director
of Fast forward palm industry. But, every partner has some right to act on behalf of
the firm. He has express and implied authority.
 Each partner has a chance to write down, the name of his authorized nominee (Wife,
children, or third party). If anyone become disabling or in case of death, the authorized
 People will get the amount of the invested money. As well as this contract will be
broken down. The third party will not be treated as a partner.
 If anyone become accuse of doing a bad situation, he must be punished based on the
intensity of the impact. If it is high, he should be expelled from the business and this
contract will be isolated.
 Legal structure of the proposed company:
 The managing directors of the company select a structure about the power of selected
employee. The structure will follow a chain of command rules. Here manager will get
the supreme power of the company. But every important issue will submit to the board
of director. Where Managing director, departmental head and also advisor must have the
right to give the opinion.

5.4. Technical aspect

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5.4.1. Project Land & Location:
We try to form a Partnership business, which create a renowned brand. And for proper
distribution of our product we will made factories in different location of our country. These are:

Types of expenses Taka

Leasing 200000
Land preparation cost 50000
Total 2,50,000

Figure-5: Land Cost per Project

5.4.2. Buildings:

For this business, we need building or factory. That’s why in every project we should make 2
or 3 stories building. What we used for storeroom, production room, managers room, guest
room, garage etc.

Sub Project Area Description Total Cost (Tk.)

Project 1 3 Storey 60000
Project 2 2 Storey 40000

Total 100000

Figure-6: Building Cost per Project

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5.4.3 Machinery & Equipment:

For this project, we need foreign and local machinery. We will purchase our foreign
machinery from Italy. The machinery purchase from Italy is:

Machine Name Cost Per Quantity Total Cost

Machine
Vessel 30000 4 120000

Sterilizer 40000 3 120000

Stripper 35000 3 105000

Alkali Refiner 40000 1 40000

Alkali Neutralizer 20000 1 20000

Earth bleacher 10000 2 20000

Refiner vessel –1 20000 1 20000

Refiner vessel-2 20000 1 20000

Total 465000

Figure-7: Machinery & Equipment Cost

Types of expenses Tk.

Purchasing machines 30,00,000
Setting up machines 50,000 13

Purchasing delivery vans 5,00,000

Total 35,50,000
 The total imported duty is tk. (3000000*9%) 270000.
 We also purchase some local machinery which takes more than tk. 30,000
 The amount of IDCP is tk.60000
 The total amount of Machinery & Equipment is tk.4375000

6. Marketing Analysis

6.1. Justification of setting up the business:

We are living in the world of business. Business is the root of the economy activity and
everything is encompassing it. Thinking about a business is like leading an adventure.
However, we are going to take an adventure with palm oil. Every year we have to import huge
quality of edible oil in which more than 40% is palm oil .Every year Bangladeshi government
imports 1.2 million tons of edible oil costing gap proximately 5000crore.Despite the convenient
weather support and huge potentiality to grow palm tree here. We import because we lack
initiative to grow palm tree locally. Considering the need, we are planning to grow palm tree,
manufacture palm oil, kernel oil and market them.

2. PEST Analysis
Political Analysis:

The political situation of Bangladesh is not enough good. The rules and regulations are always
changed by changing a political leader. Moreover, hortal, hindrance, procession and meeting in
the road are also a big threat for the organization. As a result, it will very tough for the
organization to predict the actual yearly revenue.

Economic Analysis:

The economic situation of Bangladesh is not so good. There is huge economical discrimination.
In the upper class people of city area, the per capita income is very much high where our
average per capita income is below 700$. In the rural area people have a very few knowledge
about technology. Moreover their income level is very much low. And that is why they are our
main target consumer. For those people we offer economy size of oil pack. And we first invent
the brand low price palm oil for the rural people.

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Social Analysis:

Bangladeshi people are very much voluptuous. So Palm Oil is not a segmented product in
Bangladesh. All classes of people have the ability to purchase on our product. So we segmented
our product price by depending on consumer expenditure level. As a result we think that
consumer will like our product. Again in winter season the sales revenue of palm oil is very
much high. Because, people always preference to purchase palm oil for removing the
thirstiness in this season.

Technological Analysis:

Bangladesh is a developing country. So it is very tough for us to get all kind of technological
support from Bangladesh. Moreover there have some shortage of skilled engineer for solving
the technical problem. As a result we are bound to purchase our machinery from abroad.

6.3. Demand & Supply Analysis of palm oil industry:

The demand of Palm oil in Rural area is very much high then the people of urban area. Urban
areas people are very much concern about brand. 33% rural people cannot aware about a brand
Cooking oil where more than 92% people in urban areas people are very much concern about
the brand of a cooking oil . So we can say that, in urban area we have Fixed 8% and in rural
area 33% consumer can divert into our product, if we can full fill their demand easily. Without

15
these in many area of Bangladesh, people cannot purchase a Soybean because of the high price.
So decided that we will provide an economy price for the people of rural area.

Area/Location Cooking oil Brand Market Share

Natural Meizan Pure Others
Urban Area 56% 24% 12% 8%
Rural Area 40% 22% 5% 33%

Figure-8: Market Share of Different Brand

6.4. Detail Information on Local Supply:

In Bangladesh the raw materials of Palm Oil is not available. And the supplier company also
ensures the quality of the raw material. The dealer of sub contract organization also ensured the
quality of the product. But the availability of machinery of Palm Oil is not available in
Bangladesh. So for setting up a Palm Oil factory it is necessary to purchase machinery from
abroad.

Supply Gap:

The below we mentioned about the demand, supply and supply gap palm oil in Bangladesh.
Last year the demand of cooking oil was 31,025,000 litters, where the supply was only
17,680,000 litters. As a result were 13345. And the gap is increasing day by day.

Year Demand Supply Supply Gap

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 2007 – 2008 202800 90000 112800
2008 – 2009 1500000 520000 980000
2009 – 2010 36498 20060 16438
2010 – 2011 42454 22178 20276

Figure-9: Supply Gap of palm oil

 Present & projected market demand of the project ‘Fast forward palm industries :

Year Demand
2007 – 2008 25550
2008 – 2009 31025
2009 – 2010 36498
2010 – 2011 42454

Figure-10: Present & projected market demand

 Present & projected Supply of the project ‘Fast forward company:

Year Supply
2007 – 2008 15300
2008 – 2009 17680
2009 – 2010 20060
2010 – 2011 22178

Figure-11: Present & projected Supply

Present & projected Supply Gap of the project ‘Fast forward palm industries

Year Demand Supply Supply Our Real Gap

Gap Contribution
2007– 25550 15300 10250 —- 10250
2008
2008 – 31025 17680 13345 —- 13345

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 2009
2009 – 36498 20060 16438 —- 16438
2010
2010– 42454 22178 20276 15000 5276
2011

Figure-12: Present & projected Supply Gap

6.5. Who is the target customer of Palm oil?

We segment our market by depending on income level. These are:

1. Rural people and
2. Urban people
And in rural and urban area our main consumer will be the Middle & lower class people.
Because we are trying to get there cheaply cooking oil. In our research we found that the lower
class people are very much crazy about our product. So it is our confidant that Middle & lower
classes people take our product as there first preference. So our target area is the rural area in
Bangladesh.

6.6. Who are competitions for us?

In the local market, there are 5 brands of palm oil in consumer packs namely,
 Natural,
 Meizan,
 Pure,
 Family

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  And Dada Super.
Because of increasing demand, two more brands will appear in the market in coming months
and hence there would be seven brands of consumer packs of palm oil by the year-end.

6.7. Pricing Strategy:

A form must set a price for the first time when it develops new product. In this regard we must
consider many factors in selling of price such as determining the demand, estimating cost;
analyzing competition etc. here we are using the cost plus profit pricing method that means the
mark up on cost.

The formula: Markup =cost +price

Particulars 1kg 2kg 5kg 10kg 1000kg 2000kg 5000kg

Palm Oil 70tk 140tk 335tk 650tk
Kernel Oil 45000 88,000 220,000

Figure-13: Price List for Different Item

6.8. Network Technique

In our project we have a lot of small work. And some works dependent works and some are
independent works. Our project work is given below by network diagram.
Task Time (days)
A1- making lease document 10
B1- making cultivating 30

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 B2- field cultivating 30
B3- machinery import 30
B4- building Construction 60
C1- seeding & watering 30
D1- crops cultivation 1100
E1- oil refining 30
E2- oil packaging 10

7. Financial Analysis

7.1 Deposit to PDB:

Sector Cost
Gas 4
Water 2
Electricity 9
Telephone 7
Internet Line 3
Total: 25

Figure-15: Cost of PDB

7.2. Fixed Cost of the Business:

Item Local Cost Foreign Cost Total

Building 100000 100000
Imported Machinery — 35,50,000 35,50,000
Imported Duty 270000 270000

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 IDCP 60000 60000
Local Machinery 30000 30000
Furniture 30000 30000
Computer 50000 50000
Office Equipment 20000 20000
Safety Equipment 10000 10000
Deposit to PDB 25000 25000
Pre-operating Expense 8000 8000
Vehicles 77000 77000
Consultancy Fee (1% of
the Project Cost) — 17600

Initial Investment of the

Business: 4497600

Figure-14: Fixed Cost of the Business

7.2. Financial Plan for Business:

Bank’s Client’s Equity Total

Item Investment
Amount % Amount % Amount %
Land 250000 100 250000 100
Building 70000 70 30000 30 100000 100

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 Imported 1420000 40 2130000 60 3550000 100
Machinery
Local Machinery 15000 50 15000 50 30000 100
Vehicles 38500 50 38500 50 77000
Others 490600 100 160600 100

Total 2034100 2463500 4497600

Figure-16: Financial Plan for Business

Means of Finance:

Bank’s Investment – 2034100 (45.23%)

Client’s Equity – 2463500 (54.77%)
Total - 4420600 (100%)

Debt Equity Ratio:

Debt-Equity Ratio =45.23: 54.77

7.3. Syndicate Finance:

AB Bank is going to participate 55% of total loan amount. It hires UCBL and Dutch Bangla
Bank to for a syndicate for sanctioning the loan. The Co-arranger banks will participate the
loan amount by using ratio 6:4.

AB Bank
DBBL
UCBL

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 Figure-17: Lead arranger & Co-arranger

7.4. Syndicate Finance in Percentage:

Bank Name % in Syndicate Finance Amount

AB Bank 55% 1097580

UCBL 27% 538812

Dutch Bangla Bank 18% 359208

Total 100% 1995600

Figure-18: Bank Investment in Syndicate

7.5. Cost of Goods Sold:

Item Total
Raw material cost 6300000
Wages 1080000
Carriage 55000
Subcontract expenses 286200
others 4800
Total 7726000

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 Figure-19: Cost of Goods Sold

7.6. Sales Estimate:

Palm oil 80000Kgs. Kernel oil 40000kgs.

Items Production Price Tk.

Palm oil 80000Kgs 75 6000000

Kernel oil 40000kgs 55 2200000

Total 82000000

Figure-20: Revenue from Sales

7.7. Raw Material Cost:

Particulars TK
Palm fruit import 6300000
Subcontract 286200
Total 6586200

Figure-21: Total Cost of Raw Materials

7.8. Subcontract:

Sl. No. Subcontract Total Cost

1 Palm oil box 90000
2 Packet of palm oil 75000
3hy Sticker or paper cover 70000
4 Carton for packet 45000
5 Dresses of employee 6200
Total: 286200

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 Figure-22: Purchasing Price from Subcontract

7.9. Wages Expenses

No. of Wages per day Wages Per month Wages per

employees (Tk) (Tk) Annual (Tk)
30 100 90000 1080000
Total 1080000

7.10 Salaries:

Description Persons Salary (individual) Salary (annually)

Managing Director 1 -------- ----------

Manager 2 -------- ----------

Operator 4 3000 144000
Driver 3 1000 36000
Lower level employee 4 1500 72000

Total 252000

Figure-23: Salaries Expenses

7.11. Depreciation Schedule:

Item Cost % Total

Land 250000 — —
Building 100000 5% 5000
Machinery 3820000 4.65% 177630
Vehicle 77,000 7% 5390
Furniture 30000 8% 2400
Computer 50000 8% 4000
Local Machinery 30000 5% 1500
Office 20000 5% 1000
Equipment

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 Safety 10000 4.7% 470
Equipment
Total 197390

Figure-24: Depreciation from Fixed Asset

We followed the straight-line method i.e., the depreciation of fixed asset always same in our
project.

7.12. Administrative Expenses:

Item Amount
Salary 252000
Bill of PDB 5500
Others 2700
Total 260200

Figure-25: Administrative Expenses

7.13. Selling & Distribution expenses:

Item Amount
Advertisement 30000
Delivery Exp. 2000
Other 18000
Total 50000

Figure-26: Selling and Distribution Expenses

7.14. Financial Expense:

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Item Amount % of rate Interest
Bank loan 1995600 10% 199560

15. Earning Forecast:

Estimated Profit and loss A/c

For the Year ended at 31st December ……

”
Description 1st Year 2nd Year 3rd Year
Revenue earning 8400000 8600000 9000000
Less: Direct Expenses
(-) C.O.G.S 7726000 7800000 8022000

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 Gross Profit 674000 800000 978000
less: Indirect Expenses
(-) Adm. Expense 260200 280200 330200
Operating Profit 413800 519800 647800
(-) Selling Expenses 50000 54200 110000
Profit before tax, interest & 363800 465600 537800
Depreciation

Less: Depreciation 197390 197390 197390

Profit before tax & interest 166410 268210 340510

(-) Financial Expense 199560 199560 199560

Net Profit Before Tax (33150) 68650 140950
Tax Holiday 00.00 00.00 00.00
Net Profit After Tax (33150) 68650 140950

Figure-27: Net Profit Analysis

7.16. Balance Sheet

Estimated Balance Sheet

For the Year ended at 31st December…….

Asset 2nd Year 3rd year 4th Year

Current Asset:
Cash 165600 252600 183350
Bank Balance 170000 210000 310000
130000 177300 277300
Total Current Asset 465600 639900 770650
Fixed Asset:
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 Total Fixed Asset 4189610 4189610 4189610
Total Preliminary Expenses 110600 95600 82000
Total Asset 4765810 4925110 5042260
Capital & Liability
Capital 2463500 2550500 2558600
Net Profit 68650 140950 250000
Total Owners Equity 2532150 2691450 2808600
Bank Loan 2034100 2034100 2034100
Financial Expense (Interest) 199560 199560 199560
Total Liability 2233660 2233660 2233660
Total Capital & Liability 4765810 4925110 5042260

Figure-28: Balance sheet

Calculation of Fixed Asset

Particulars Tk
Total Fixed Asset 4189610
Less: Depreciation 4387000
Net Fixed Asset 4189610

Figure-29: Net Fixed Asset

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 Figure-30: Presentation on Net Profit

Figure-31: Presentation on Balance Sheet

8. Break Even Point Analysis
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To find out the break-even analysis, we may use the following formula (Algebraic method):
Assuming that’
Sales=8400000
Fixed cost= tk. 4807800
Variable cost per kg = 100
Selling Price per kg=130

So, Break-even point (Unit) = Fixed cost/ Sales per unit- Variable cost per unit
=4807800/ 130-100
=160260 kg

Break-even point (tk.) =Break Even Point Unit *Selling Price per unit
=160260*130
= Tk.20833800

Comment: From the above calculation, we may say that there is no profit and no loss in 160260
kg and tk. 20833800.

8.1. Showing Profit from BEPA

Particulars Tk.
Earning Revenue 20833800
Less: Variable Cost 16026000
Contribution Margin 4807800
Less: Fixed Asset 4807800
Profit 000.00

Figure-32: Profit from BEPA

If we will increase profit 100000 without changing per kg selling price and per kg variable
cost then our Break Even Point will be:
BEP (Unit) = Fixed Cost + Profit/Selling Price per Kg-Variable Cost per Kg
=4807800+100000/130-100
=193593

BEP (Tk.) = BEP Unit * Selling Price per Kg

=193593 *130
= Tk. 25167090
8.1. Showing Profit from BEPA

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 Particulars Tk.
Earning Revenue 25167090
Less: Variable Cost 19359300
Contribution Margin 5807800
Less: Fixed Asset 4807800
Profit 100000

Figure-33: Profit from BEP

From the above BEPA we see that if we want to make Tk. 100000 profit then our production
will be increased by (193593-160260) =Kg 33333.

8.2. Social Cost Benefit Analysis

Social Cost:

Items Private Sector Economic Sector

Imported Machinery 92,412 92,412
Local Machinery 15,600 15,600
Vehicles 77,000 77,000
Furniture 2,200 2,200
Computer 9,800 9,800
Office Equipment 700 700
Safety Equipment 350 350
Palm oil cost 41,157 90,150
Subcontract 21,025 21,025
Salary and Wages 26,340 25,000
Others 550 550
Total 260,794 309,787

Figure-34: Social Cost Analysis

Social Benefit:

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 Items Private Sector Economic Sector
Foreign Currency 92,412 92,412
Backward Linkage 127,225 21,025
Contribution to —— 26,340
GDP
Local Demand 205,575 205,575

Total 425,212 345,352

Figure-35: Social Benefit Analysis

Net Benefit
Private Sector : 425,212 – 260,794 = 164,418
Economic Sector : 345,352 – 309,787 = 35,565

From The above social cost, benefit analysis we will also see that social benefit is greater than
social cost .So our Project is Fruitful.

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Conclusion
Our business goal as a palm oil processing business is to become the number one choice of
households and petty traders in Bangladesh and other countries of the world where we intend
retailing our palm oil. As a business, we are willing to go the extra mile to invest in owning our
own palm tree plantation and also to hire efficient and dedicated employees. We have been able
to secure permits from all relevant departments both at local government level.

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