Group Members:

- Zaka Ul Hassan
- Nouman Sarfaraz
Supervised by: Syed Afzal Moshadi Shah
Business Idea:
•Plantation of Olive Trees in Pakistan
•Providing consultancies
Olive Growing Environment

Climatic Requirements for Olive Cultivation

Factors Standard Climate Pakistan Climate

Temperature 5-45oC 10-45oC

Rainfall 700-800mm More than 500mm

Humidity 75-90% 70%

Altitude 400-1700meter 100-3000meter

Chilling Req. 400-2000 hrs 400-2100 hrs

Slope upto 20o 10o-50o

 Marginal
Marginal / Barren
/ Barren lands
Land
Market consumption and production World Wide
Table 1 – World Olive Production & Consumption Countries
Country Production in Tons (2009) Production % Consumption
Spain 1,199,200 41.2% 20%
Italy 587,700 20.2 30%
Greece 332,600 11.4 9%
Syria 168,163 5.8 3%
Tunisia 150,000 5.2 2%
Turkey 143,600 4.9 2%
Morocco 95,300 3.3 2%
Source: Edible oils in Pakistan

Market consumption in Pakistan

Table 2 - Import of Olive Oil in Pakistan

Year Quantity (tons) Value in (Mn PKR.)

2004-05 461 59.9
2005-06 746 105
2006-07 1463 172.2
2007-08 2008 358
2008-09 2768 380
Source: Federal Bureau of Statistics (2009)
Pakistan Edible Oil Usage
Pakistan is world's 4th largest importer of edible oils

Edible oil imports forecast 2.16 Mn metric tons 2011/12

Demand of edible oil is increasing at the rate of 6 to 8 % per annum

Pakistan Government Actions

50 Mn naturally grown wild olive trees in marginal areas

7 Mn wild olive trees grafted by support of PODB and IAO

900 acre olive orchards establish in different region of KPK, Balochistan and Potohar

Source: USDA Reports (2011)

Olive Orchard
Olive Plant Varieties:
HARDY
Arbequina
Leccino
Pendallino
Sevallino
Ascolana
Coratina

SENSTIVE
Frantoio
Manzanilla
Koroneiki

MODERATE
Picholine
Features
•Forms
Generally olives are being use in three forms:
Olive Oil
Table Olive
Olive Cake (waste after olive extraction use for fertilizer)

•Plant benefits
Generate energy 2.5 times more than other woods
Ash used for fertilizing gardens and plants
Wood is being use for making handicrafts

•Oil Grades
Olive oil has four grades:
Extra virgin olive oil
Olive Pomace oil
Sulphonated oil
Technical oil
Benefits
Products can be made
•Cosmetics
•Health and beauty
•Personal Care
•Herbal Medicine
•Edible products eg.
•Pickles, jams, sauces, extract vinegar, breads, confectionary, and traditional
Pakistani Sweets.

Nutritional Importance of Olive

 Vitamins E, K, and A
 Used as a balm
 Massaged onto the body
 Help against wrinkles and delaying the effects of old age
 Help combat against strokes, heart-disease, High blood pressure, diabetes
Product Options
Table Olive Olive Oil Seeds Tasbeegh

Medicine From Olive Dried Olive Powder Bread Traditional Sweet Burfi
 Financial Costing
Olive orchard on 40 kanal which is 5 acre.

Basic Description:
835 Plants on 5acre (167/acre spacing of 4x6 meter)

Capital Cost:
We have taken the costing of 5 acre area for the plantation of Olive plants.

Irrigation System Installation Cost: Initial Cost:

Table 3 – Irrigation equipments Table 4 – Plants Installation Cost

Equipments Cost PKR. Material No. of Unit Per Unit PKR. Total

9 Water Tanks 45,000 Olive Plants 835 30 25,050

Land Bore 40,000 Fertilization 6 2,000 12,000

Hard Plastic Pipe 11,880 Land Preparation Labor 3 7,000 21,000

One Electric Motor 10,000 Irrigation System 1 106,880 106,880

Total 106,880 Total 164,930

Annually Running Cost

Table 5 – Input Cost

No. of Months Per Month Total

Manpower 12 7,000 84,000

Electricity (April, May, June) 3 3,000 9,000

Electricity Per Month 9 500 4,500

Other Expenses 12 500 6,000

Fertilizer 6 2,000 12,000

Total 115,500
 Return
Estimated Production:
We have estimated the production of olives by 95% of successive rate.

Table 6 – Production of Olives Per Tree

Year Olives-kg/Tree Olives-kg /5 Acre

Year 1 0.0 0.0

Year 2 0.0 0.0
Year 3 0.0 0.0
Year 4 4.5 3,556
Year 5 6.5 5,135
Year 6 8 6,320
Year 7 11 8,690
Year 8 12 9,480
Year 9 13 10,270
Year 10 15 11,850
Preparation of Table Olive
Cost of producing Table Olives Price Per Kg
Packaging PKR./kg Selling Cost PKR./kg

Bottle 35 Retail Price 500

NaOH 1 COST

Nacl 1.66 Manufacturing Cost (81.66)

Vinegar 40
Retailer Margin 20% (100)
Labor 2
Sales man Margin 5% (25)
Utility Expenses 2
Profit 293.34
Total 81.66

Preparation of Oil
Cost of producing Olive Oil Profit Per ltr

Packaging PKR./ltr Selling Cost PKR./ltr

Retail Price 500
Bottle 35
COST
Transportation 2.81
Manufacturing Cost (41.81)
Labor 2 Retailer Margin 20% (100)
Utility Expenses 2 Sales man Margin 5% (25)
Profit 333.18
Total 41.81
Projected Cash Flow Analysis Table Olives:
Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Olive kg 0 0 0 0 2,133 3,081 3,792 5,214 5,688 6,162 7,110

Manufacturing Cost 0 0 0 0 184,181 261,594 319,655 435,775 474,482 513,189 590,603

Total Cost 164,930 115,500 115,500 115,500 549,681 377,094 435,155 551,275 589,982 628,689 706,103

Revenue 0 0 0 0 799,875 1,155,375 1,422,000 1,955,250 2,133,000 2,310,750 2,666,250

Net Profit -164,930 -115,500 -115,500 -115,500 250,194 778,281 986,845 1,403,975 1,543,018 1,682,061 1,960,147

Income -164,930 -280,430 -395,930 -511,430 -261,236 517,045 1,503,890 2,907,865 4,450,883 6,132,944 8,093,091

Cumulative Cost 164,930 280,430 395,930 511,430 1,061,111 1,438,205 1,873,360 2,424,635 3,014,617 3,643,306 4,349,409
Cumulative Revenue 0 0 0 0 799,875 1,955,250 3,377,250 5,332,500 7,465,500 9,776,250 12,442,500

NPV @ 0% 12309703
NPV @ 5% 9721802
NPV @ 10% 7815713
NPV @ 15% 6385157
Projected Cash Flow Analysis Olive Oil:
Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Olive ltr 0 0 0 0 444 642 790 1,086 1,185 1,284 1,481

Manufacturing Cost 0 0 0 0 18,579 26,837 33,030 45,416 49,545 53,674 61,931

Total Cost 164,930 115,500 115,500 115,500 134,079 142,337 148,530 160,916 165,045 169,174 177,431
Revenue 0 0 0 0 166,641 240,703 296,250 407,344 444,375 481,406 555,469
Net Profit -164,930 -115,500 -115,500 -115,500 32,561 98,366 147,720 246,428 279,330 312,233 378,038
Income -164,930 -280,430 -395,930 -511,430 -478,869 -380,502 -232,782 13,645 292,976 605,208 983,246
Cumulative Cost 164,930 280,430 395,930 511,430 645,509 787,846 936,376 1,097,292 1,262,337 1,431,511 1,608,942
Cumulative Revenue 0 0 0 0 166,641 407,344 703,594 1,110,938 1,555,313 2,036,719 2,592,188

3,000,000
NPV @ 0% 1847308
NPV @ 5% 1474767
2,500,000 NPV @ 10% 1192541
NPV @ 15% 975345

2,000,000

1,500,000 Cumula tive Cost

Cumula tive Revenue
1,000,000

500,000

0
0 1 2 3 4 5 6 7 8 9 10
Brand Name: Potohar Olives
Target Market:
- Upper and Middle class
Marketing Strategy:
-Push Strategy (in the beginning)
Give away high margins to Retailers (20% of the price) and Sales Staff (5-15%
of the price)
Low price entry strategy:

Product Competitor Rate PKR./ltr Our Rate PKR./ltr

Extra Virgin Olive Oil 726.25 500.00

Pomace Olive Oil 479.12 440.00

Table Olive 725.11 500

The proposed project would require following staff members
First three years
Manager - 1
Gardeners - 1 to 3

Fourth year onward

Manager - 1
Gardeners - 1 to 3
Machine operators - 1
Labor -2
 SWOT Analysis
Strengths: Opportunities:
High profit margin Growing tastes and preferences
Suitable with Pakistan’s climate Can be exported to neighboring countries
Barren / marginal land can be utilized Huge free barren land
It can be cultivated on the fertile land along with Can develop a strong national and international
other crops as well brand.
Whole plant right from the seed to fruit is
beneficial and useful
Religious importance
Weakness: Threats:
Lack of Awareness (both producers and Big players response
consumers/ customers) Strong brands loyalty
Government level subsidy not availed Government policies
Thanks for your patience
Any Question???