Presented To:

Instructor: Sir Akbar Saeed

Course: Entrepreneurial Finance (MBA – Weekend Program)

Presented By:

• Najma Abdul Sattar• Umair Usman• Aymen Afif• Maliha Sami

Presentation On:Best Beverages (Pvt.) Ltd. Summer Thrill, Beat The Heat

PROJECT DESCRIPTION

– Juice Extraction & Packaging– COMPANY NAME : Best Beverages– Capacity• JUICE EXTRACTION : 2112 TONS PER ANNUM • PACKAGING : 8,448,000 CRATES PER

YEAR • TOTAL COST : 95 MILLION

– DEBT-EQUITY : 60/40

PROJECT DESCRIPTION

• LOCATION: Eastern Industrial Zone, EZ/1-P-4 Port Qasim Rd, Karachi 74200, Pakistan

• IMPLEMENTATION PERIOD: 19 MONTHS • START OF OPERATIONS : 01-April-2017 • LOCAL SPONSORS: Partners, Allied Bank &

Industrial Development Bank • FOREIGN SPONSORS: Industrial and

Commercial bank of China ( ICBC )

CONSTRUCTION SCHEDULE

PROJECT COST

Project Financing PlanRs. (mn)

Total Cost: 95 Loan-1(ICBI): 17.1 Loan-2(ABL): 22.8 Loan-3(Industrial Development Bank): 17.1 TOTAL DEBT 57 Equity-1(Partner): 9.5 Equity-2(Partner): 9.5 Equity-3(Partner): 9.5 Equity-4(Partner): 9.5TOTAL EQUITY 38

Location Map

• Eastern Industrial Zone, EZ/1-P-4 Port Qasim Rd, Karachi 74200, Pakistan.

Factory Layout Plan

DETAILS OF BUILDINGS

– Total area of land : 20,000 sq. ft.– Total covered area : 6 kanals– Main factory buildings : 2,000 sq. ft.– Raw Material Shed : 1,200 sq. ft.– Finished Goods Shed : 800 sq. ft.– Boundary Wall : 150 meters

LIST OF FOREIGN & LOCAL MACHINERY

Description QtyTotal Cost (Rs) mn. Supplier

Washer fruit 1 459 Koldware Industries Pvt. Ltd.

Finisher - extractors pulp & oil 1 1,020 Jiangsu Kuwai Machinery Co,Ltd.

Sorter mango 1 102 Jiaozuo Zhoufeng Machinery Co., Ltd.

Extractor 1 102 Jaffer Brothers Pvt. Ltd.

Pasteurization 1 4,781 Shanghai Changlong Industrial Equipment Co., Ltd.

Cooler 1 122 Dongguan Golden Refrigeration Equipment Co., Ltd.

Packaging machine 1 408 Zahid Packages

Total cost 6,995

Manufacturing Flow Diagram

Manufacturing Pictorial Process

Management Team and Legal Structure

• Management team comprise on;– Mr. Kasim Feroze Khan, Manager Finance– Mr. Syed Azfar Naqvi, Manager Marketing– Mr. Talha Saeed, Production Manager– Ms. Romana P. Khokhar, Manager HR

• Best Beverages is a private limited company.

Presenting by

Aymen Afif

Summary of Income StatementRs . (mn)

Sales 8,025,600Less: COGS 7,022,400Gross Profit 1,003,200Less: S & A Expenses 241,776

Operating Profit (EBIT) 761,424Less: Amortization

761,424

Less: Interest Expenses 250,000

Earnings Before Taxes 511,424

Less: Taxes 25% 127,856Net Profit 383,568 Dividends Retained Earnings 383,568

EPS 0.21 ROA 0.81%ROE 2.06%

Projected Profit and Loss Account

Constr. Period Year-1 Year-2 Year-3 Year-4Sales 8,025,600 96,729,600 117,427,200 134,323,200 151,219,200Less: COGS 7,022,400 84,638,400 102,748,800 117,532,800 132,316,800Gross Profit 1,003,200 12,091,200 14,678,400 16,790,400 18,902,400Less: S & A Expenses 241,776 2,902,896 3,523,824 4,030,704 4,537,584Operating Profit (EBIT) 761,424 9,188,304 11,154,576 12,759,696 14,364,816Less: Amortization 0 200,000 400,000 400,000

761,424 9,188,304 10,954,576 12,359,696 13,964,816Less: Interest Expenses 250,000 833,625 713,688 593,750 473,813Earnings Before Taxes 511,424 8,354,679 10,240,889 11,765,946 13,491,004Less: Taxes 25% 127,856 2,088,670 2,560,222 2,941,487 3,372,751Net Profit 383,568 6,266,009 7,680,666 8,824,460 10,118,253 Dividends Retained Earnings 383,568 6,266,009 7,680,666 8,824,460 10,118,253

EPS 0.21 3.36 4.12 4.73 5.43 ROA 0.81% 11.04% 11.81% 11.99% 12.14%ROE 2.06% 25.16% 29.18% 32.13% 35.19%

Assumptions to the projected Income Statements

• Selling Price-one Tetra Pack Rs. 20.00/-• Cost per unit– Direct Material = Rs. 8– Direct Labor = Rs. 4.5– Direct + Indirect Over Heads = Rs. 5

Annual Output-Number of Crates 1,408,000 One crate consists of 6 Tetra Packs(All figures in No. of Crates)

Constr. Period Year-1 Year-2 Year-3 Year-4

Capacity Utilization 5% 60% 70% 80% 90%

Break Even Analysis

• Total production = 8,448,000 packs/year• Unit price = Rs. 20/-• Break even = 422,400 units

Presenting by

Najma Abdul Sattar

Manpower Schedule - Production

Description No. of Employees

Salary per Employee Per Month (Rs)

Food Technologist 1 55,000 Processing Plant Operator 5 50,000 Skilled Machine Mechanic 1 30,000 Supervisor 1 35,000 Helper 2 20,000 Semi Skilled Laborers 5 20,000 Total 15 210,000

Manpower Schedule – Admin & Selling

Description No. of Employees

Salary per Employee Per Month (Rs)

Chief Executive 1 120,000 Procurement Officer 1 60,000 Accounts Officer 1 45,000 Admin Officer 1 35,000 Security Guard 3 20,000 Driver 2 25,000 Total 9 305,000

Industry Analysis

• International Market Analysis:• The juices market was led by fruit drink (0 to 29%

juice, representing 72.2% of total value)• Nectar (30% to 99% juice)• 100% Fruit Juice (from concentrate) with a 23.5% &

3.8% market share• Vegetable Juice accounts for the remaining 0.5%

share.• The rising consumption of Packaged Products reflects

the demand for the organized juice market.

Industry Analysis

• Local Market Analysis:– Nestle & Shezan have loyal customers over the

years because they are very old and customers are aware with their merits & demerits

• Beverages Market In Pakistan:– Bottled Water– Carbonated Drinks– Sport/Energy Drinks– Juices

Competitor Analysis

• Competitor’s Current Market Share in Soft Drinks– SHEZAN – (35% market share in Pakistan)– NESTLE – (45% market share in Pakistan)– MAAZA (by Coca-cola)– SLICE (by PepsiCo)

Presenting by

Maliha Sami

Target Market• Primary Market:

1. Kids – Fond of Fruit Juice (fond of Mango)2. Teens – More Experimental3. Youth – Experimental & More Buying Power4. Working People5. House Wives

• Secondary Market:1. Travel Industry2. Airlines, Railways and Local Transport Systems3. Movie Theatre and Malls.4. School & Colleges.5. Hotels & Restaurants etc.

Marketing Plan• Product Elements:– Brand Name: Ramango• (Drive from word RAW Mango. Locally known as ‘KERI’)

– Logo: Mango – King of fruits• We want to show the rawness from our logo as well, so we

have used EDO SZ font which is Stroke Font.– Color Scheme: Yellow & Green• When we think of mango or raw mango, first color that

clicks in our mind is either ‘yellow’ or ‘green’.– Slogan: “Summer Thrill, Beat The Heat”– Ingredients: Raw Mango, Sugar, Salt & Honey

Marketing Plan

• Product Features:– Ramango is a 100 % Pure Raw Mango Fruit Juice

which will be produced & marketed by Best Beverages.

– Provide Proteins, Minerals & Vitamins.– Beneficial for kidneys, sharpen the memory.– Unique & Excellent in Taste.– Gives instant Energy & Freshness.

Marketing Plan• Product Life Cycle:– Our product lies in the Introduction Phase of PLC.• Low Sales• High Cost Per Customer• Minor Profit Margin• Few Competitors

– Objectives: To create awareness of product• Offer a basic product• Price At Cost-plus• Selective Distribution• Induce Trial Via Heavy Sales Promotion

Marketing Plan

• Pricing Strategy:– As a new comer, our pricing strategy is to

introduce our product in the market at low price so as to create huge demand among existing / competitor’s offerings.

– Once we come up in the demand, we will gradually increase our price and will provide more efficient and unique juices variety to capture larger market share.

Marketing Plan

• PLACE:– At the initial phase, we would be outsourcing the

raw material (mangoes) & packaging of juices under BB brand.

– Raw Mango would be purchased from Gharo, Sind area. Packaging would be sub-led to local producer.

– Distribution Channel:• Mode of Transport: Road Transport

Marketing Plan• Promotion:• Our objective is to create brand awareness as we are

in introduction phase.• Use of :Print Media, Radio Adds, Hoardings in Public

Spots, Sample Distribution, Organizing Events, TV Commercials etc.

• Tie-Up with upcoming KID’s Summer Camps at various hotels.

• Special Ramadan Offers.• Occasional Gift Packs (such as EID Greetings etc.)

Promotion

Web Marketing• Creating a Fan page on Facebook• This will enable the brand to keep it’s TA engaged and

updated with introduction of new flavor and events• Creating an active account on for regular tweets on

product and event updates which will ensure interaction with TA.

• Followers will be encouraged to tweet their suggestions.

SWOTSWOT ANALYSIS

INTE

RNAL STRENGTH WEAKNESS

Adequate availability of Raw Material

Seasonal Availability of Raw Mango

Price, a competitive advantage Brand Acknowledgement Natural Product Late Entry into the market

EXTE

RNAL

OPPORTUNITY THREATS Participation with a growing industry

Cut Throat Competition

Competitive Advantage over Carbonated soft drink.

Unstable Government policies

Possible deal with Pakistani Sports associations

Rising Global Warming

Mission/VisionCompany’s Mission Statement:• “To be a leading producer of organic/ pure fruit juices by

dedication to nature, corporate & product hygiene, dynamic leadership & command to our partners & stakeholders.”

Vision Statement:• “To be Pakistan’s premier fruit Juice Company offering nutritious

& superior quality tasty drinks to its consumers. • By April 2017, we aim to achieve 30% of market share and would

be the best in terms of consumer value, customer service, and employee talent with consistent and predictable growth.”

Q&A

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