1:Conversion of Apple Pomace into cattle feed-

A viable project on waste management! “ FOOD AND SAFETY ,HAND IN HAND”

TEAM MEMBERS:ZEESHANA MUSHTAQ AS CEOAFSHAN GAZI AS CMOKHURSHID MIR AS COORAFIE MALIK AS CFO

DEPARTMENT OF SBSISLAMIC UNIVERSITY OF SCIENCE AND TECHNOLOGY (IUST)AWANTIPORA PULWAMA KASHMIR

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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY……………………PAGE 2,PAGE 3

2. COMPANY SUMMARY………………………PAGE 4

3. PRODUCTS AND SERVICES………………PAGE 4,5

4. MARKET ANALYSIS SUMMARY…………PAGE 5,6

5. STRATEGY AND IMPLEMENTATION

SUMMARY ……..… PAGE 7, 8.

6. OPERATION MANAGEMENT…………….PAGE 8 TO 13

7. WEB PLAN SUMMARY…………….………PAGE 13.

8. MANAGEMENT SUMMARY………………PAGE 14.

9. FINANCIAL PLAN………….………………PAGE 14 TO 19

10. APPENDICES ………………………………PAGE 20

1.0 EXECUTIVE SUMMARY

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Our project is about the conversion of the waste resources of APPLE POMACE intoa safe and nutritional feed in order to counter difficulties being faced in providing sufficientand nutritious food for the live stock population. Since the cost of feed is very high and inrecent years the price of conventional or basic feeding ingredients has tremendouslyincreased, this has made live stock production very expensive. It is the need of the time toutilize unconventional feeds like agro industrial by-products to make a balanced feed whichin addition will be freeing our environment of the various threats.

Our project attempts to set an example for the efficient utilization of the wasted food

resource – APPLE POMACE by producing multienzyme bio-feed, biodegrade the anti-nutritional factors such as pectin and tannins in apple pomace, and obtain the nutritionalenrichment of the fermented substrate. Undumped and untreated deposits of apple pomacehas caused serious environmental problems.

Indian apple production averages nearly 2 million tonnes during 2009-10 making itthe seventh largest producer of apples in the world. Nearly all of India’s apples are grown inthree mountainous states in north India- Himachal Pradesh, Jammu and Kashmir andUttarakhand. Himachal Pradesh and Jammu and Kashmir each have roughly equal areaplanted to apples, but Jammu and Kashmir has the highest average yield and accounts forabout two-third of the total production which stands as a base for our business idea and givesus an absolute advantage over other regions.

Apple processing industries are one of the major industries of these states like juices,concentrates, wine, cider, canned slices, etc. Food industry In general generates a largequantity of wastes i.e peel, seed , pomace, rags, kernels etc which is biodegradable in nature.Due to richness in carbohydrates, dietary fibres and minerals, such wastes have the potentialto support the growth of microorganisms involved in the production of various products.

Apple pomace - a by-product of juice processing industry, represents about 25-35% ofthe weight of the fresh apple processed. is a rich source of many nutrients includingcarbohydrates, minerals, fibres except protein. Its disposal in the environment, being highlybiodegradable (very high BOD), results in production of foul smell and affects the aquaticlife since large amounts of the waste are dumped in various water bodies which compels forits proper treatment. Apple pomace has been utilized as an animal feed as such or after ensilage but due to lowdigestible proteins was not considered suitable as an animal feed. Attempt to increase thequantity of protein was made by addition of non-protein nitrogen to apple pomace but it ledto birth of dead or weak calves Utilization of such a waste in an economical and effectiveway would be in the interest of prevention of resource wastage and better economy of theprocessing plants and hence provides a great business opportunity.

This project calculates the costs of starting a small venture with a list of all necessary

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purchases including tangible assets( for example equipment, and inventory) and services,working capital, sources , collateral and market feasibility and relevance of the firm with realmarket test and thee various strategies both pre and post launch and also various marketingtools to be used.

VISION STATEMENT To strive for the development of a sustainable industry that acts responsible within the foodchain by ensuring safe and nutritious feed for safe food.

MISSION STATEMENT

Company aimed at offering high-quality, moderately priced feeds using only naturalingredients. We view ourselves as partners with our customers, our employees, ourcommunity and our environment. We aim to become a regionally recognized brand name. Weare building a business in which high standards permeate all aspects of our company. Qualityis a state of mind at our company.

GOALS/OBJECTIVES

Our goal is moderate growth, annual profitability. To expand distribution channels of the company. To create a strong research &development base in unconventional feeds. To complete all planned projects within scheduled time and approved cost. To have loyal customers and provide complete value for money to clients. Use our innovative approach that will help firm to uncover new opportunities. Always take feedback from our customers.

Keys to Success

The keys to success for APPO VALLEY FEED are:

1. Investment capital to provide eco friendly feed favoring environment positively, anddeliver a value-added product that produces cost savings for customers that far exceed theproduct cost.

2. Aggressive marketing to introduce long-term care providers to the significantcost/benefit advantages of APPO VALLEY FEED.

3. Product quality, ease of use, world-class customer service and support.

4. Price competitiveness.

2.0 COMPANY SUMMARYAPPO VALLEY FEED is a mid-valley based farm and feed store dedicated to providing our customers with high quality feed products. APPO VALLEY FEED intends to offer only the best feed and products in the industry that are always fresh and available. It also offers its customers the option of a custom made feed.

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Our primary focus is on keeping our customers satisfied.

2.1 Company Ownership

APPO VALLEY FEED will be created as a Limited Liability Corporation. It will be ownedby its principal investors , khurshid, Zeeshana, Afshan and Rafie. Zeeshana And Rafie actingas CEO and CFO respectively and each holding 25% stake in the company. Also khurshid asCOO and Afshan as CMO are holding 25% share each.There will no silent investors.

2.2 Start-up Plan

The total start-up expenses include those of apple pomace, chemicals, jute bags,professionals, insurance, rent, construction, expensed equipment, etc. Start-up assets requiredinclude short-term assets (truck, machinery etc.), and initial cash to handle the recognition feeand expenses prior to opening. Long-term asset purchases and the assumption of long-termliabilities are anticipated.

2.3 Company Facilities This company will be located in the heart of the valley. The company has currently goodinfrastructure with good machinery .The quality supply chain is maintained and the process of production is streamlined with theuse of advanced technology and efficient human labor.

3.0 PRODUCT AND SERVICESPRODUCT DESCRIPTIONCOMPETITIVE COMPARISONSOURCING AND FULFILMENTTECHNOLOGYFUTURE PRODUCTS

Most developing countries are facing difficulties in providing sufficient food for theirpopulation. The cost of feed is very high and in recent years the price of conventional orbasic feeding ingredients has tremendously increased. This has made livestock productionvery expensive. It is the need of the time to utilize unconventional feeds to make a balancedfeed especially for livestock production efficiently. Realising this need we came up with thisidea of using apple pomace as a non conventional cost effective animal feed. Unlike othercattle feeds like Hindustan Animal Feeds, PIOUS EXIM – India, PERFECT Feeds &Chemicals – India, Surya Feeds & Concentrates – India, Eshwari Chemtech – India andlocally with Willayat cattle feeds, Royal Cattle Feed ,JK Feeds jammu,Americian feedjammu etc) it is a reliable, eco-friendly and high-quality product. The source of raw materialwould be different apple juice manufacturing companies which normally throw out pomaceafter extracting juice from apples. We are using futuristic technology for the productionwhich is eco- friendly and doesn’t discharge anything hazardous into the atmosphere.In future we aim to create niche markets i.e., create markets out of existing markets like bymaking varied varieties of cattle feed, or different varieties for different animals and diversifyin the same discipline as much as is profitable for the company.

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INDUSTRY ANALYSIS:-We would go for the industry analysis on the basis of Porters Five Force Model.1. Threat of substitutes – as there are already various cattle feeds in the market, the

threat of substitutes is large.

2. Bargaining Power Of Suppliers- because our product is entirely new , our bargaining

power is going to be high

3. Bargaining power of buyers- as the buyers have no other option to choose from, their

bargaining power is going to be less.

4. Inter firm rivalry- being the entrants in an entirely new product, rivalry is also less.

We can be the price setters and have a major share of the market.

5. Threat of new entrants- is quite high as the market is varied and the potential

customer base is large.

INDUSTRY TRENDS:-The business that we are entering is in an industry that is growing. But because our productis based on new technology and is cost effective, we would be able to create our own marketand even capture a share of the existing market.

MARKETING:-

Now as per the plan where we are marketing non-conventional cattle feed but if it is notmarketed appropriately whole plan will be ineffective.

First of all we need to identify if there exists a need for a particular product or not. And in ourcase we know there is a grave need of an innovative product. After assessing the need we tryto identify our market segment which will be based on product specialization (single productfor all markets). Since it is starting as a small business we will focus on people who rearcattle in rural areas. People of the kind have little money at disposal so this cost effectivefeed would be highly beneficial for them. Identification is just not enough what we need todo is that we need to create positive attitude of people towards the product that we areoffering. And how can a positive attitude be possibly created. One of the ways is to create apositive brand imagenot by highlighting ESP (emotional selling point) because people these days are veryrationale and logical but by highlighting the USP. The USP in our case would be price. Aftergetting the customer base by using USP we get use tactics to get attached to our customersemotionally which will in turn help us in increasing the brand equity. Here we need to takecare of positioning which must be appropriate, say healthy, varied and balanced diet foranimals.

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Branding

We would brand our product using the brand pyramid model which take care of followingaspects

a. Mark of specification: distinguish product from our competitors (level likeHindustan Animal Feeds, PIOUS EXIM – India, PERFECT Feeds & Chemicals –India, Surya Feeds & Concentrates – India, Eshwari Chemtech – India and locallywith willayat, royal etc) using low price high quality strategy competitors at national

b. Mark of assurance: by giving high quality, consistent and reliable product.c. Moment of choice : making it the only choice available for people in terms ofeco- friendliness, cost, usefulness etcd. Mark of association: initiate to make emotional attachment by using differentstrategies ( emotional appeal)e. Emotional involvement: here people should associate themselves with ourproduct/ brand

Keeping in view the PLC we can start niche marketing. Create markets out of existingmarkets like by making different feed for different animals based on their nutritionalrequirement.

The problem with all these manufacturers is that they make conventional and high costanimal feed. Comparatively we are making non conventional and cost effective feed asmentioned earlier. We believe in value based marketing and the surplus value we will beproviding will be the value of convenience and reliability. Pricing would also be thus valuebased. For our promotions we shall be using different ways of marketing like viral marketing,buzz marketing, ambush marketing, subliminal marketing and green marketing. We can alsomake use of local media -both online and offline, advertisements, campaigning, small groupsessions with the target audience, sponsoring different social and environmental events(ambush marketing).

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STRATEGY:-

Bain & Company’s View “Strategy is a company’s game plan for winning; it maps out the moves a business mustmake to outwit the competition, captivate customers and increase long-term shareholdervalue.”

Our strategy would be to go for first intensive growth (improve existing business), thenintegrative growth (both forward n backward integration) to achieve EOS and finally fordiversification as suggested by Ansof’s matrix (market penetration, product development,market development and finally diversification).With time we will go for niche marketing.For production we will use geocentric approach but for marketing we will go for polycentricapproach Pricing would be value- based.

MARKETING CHANNELS :A company’s channel decisions directly affect every other marketing decision.We would be using Wholesalers and Retailers. There are two reasons for that:1. That sector is mature.2. These people buy in bulks. Thereby reducing costs in terms of transportation etc.

VALUE ADDITION: Based on Michael Porters value chain. Adding value at every possiblestep on primary actions likeInbound logisticOperationOutbound logisticMarketing/salesServicesAnd secondary actions include supporting activities like infrastructure, HR, technology,procurement.

STRATEGY PYRAMID :

Strategic objective: To become recognized as a provider of the highest-quality cattle feed.Tactics: use low cost raw material to produce high quality feed which will be highly useful.o Quality assurance with total quality management.

o Use developed and cost effective distribution channel

Programs: people with right skills will be placed at right place at right time. This will reduceintensiveness of labor and bring in more of quality work in proposed time. Using financejudiciously and arranging skill enhancing programs from time to time for employees.We will be revising and updating our programs, tactics & strategies to be the leaders in themarket.

PROMOTION STATEGIES :-As we are mainly focusing on the rural section of the people who have access to radio andtelevision only, we would be promoting our product via radio, television and newspapers.

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SALES STRATEGY:-Once we have identified our target market and assessed the benefits our products canpotentially bring to our customers, the next step is to plan what method to use in selling ourproduct. The geographical catchment area will help you to determine the best sales methodsfor your business. These include:

Personal contact (direct selling, retail)

Direct mail (special offers, catalogues)

Telesales

The sale is just the beginning. Following up the deal will strengthen the relationship with ournew customer, and could provide opportunities for additional sales.

STRATEGIC ALLIANCES:-

We can go for a strategic alliance with the apple juice manufacturing companies in the futureto ensure a continuous supply of the apple pomace , so that we can catch up with the demand.The Center for Veterinary Medicine regulates animal feed products. A feed license is requiredby states for persons manufacturing or distributing commercial feed.Hindustan Animal Feeds - India

OPERATION MANAGEMENT

Bioconversion of apple pomace into a nutritionally enriched substrate by Candida utilis

This work aims to select biological treatments and conditions for the bioconversion of applepomace by Candida utilis, into an enriched substrate with increased digestibility for use asruminant feed. After C. utilis fermentation, the protein level increased 100% and the mineralcontent 60%, accompanied by 8.2% of increase in the digestibility. The level of free sugarsdecreased 97% after substrate supplementation with ammonium sulphate (10 g /l). Afteroptimization, sequential fermentation with C. utilis and P. ostreatus achieved a high proteinlevel with 500% of crude protein enrichment after 60 days of fermentation as well as aconsiderable increase in the mineral level. The level of free sugars increased after thefermentation with P. ostreatus alone due to pectin and hemicellulose degradation. Consideringthe time required for fermentation, the C. utilis treatment was the most efficient treatment toconvert apple pomace into a more nutritive substrate for ruminant feed.

Apple pomace is presently used to feed ruminants or simply added to soil as a fertilizer.Several factors adversely affect the value of apple pomace as a ruminant feed. Firstly, theresidue has low digestibility due to considered high lignin/cellulose ratio. Secondly, thepomace has a high free sugar content, which after ingestion by ruminants and fermentation inthe rumen causes animal alcoholaemia, a problem for cattle farmers. Thirdly, the protein,vitamin and mineral content of apple pomace are low, which contributes to the low nutritionallevel and consequently low commercial value of the residue.

Fermentation of apple pomace by C. utilis

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300 g of wet apple pomace (80% humidity) was mixed with 600 ml of distilled water in 2l-Erlenmeyer flasks and sterilized at 121 _C for 15 min. The substrate was cooled to roomtemperature and then inoculated with 100 ml of C. utilis inoculum, previously centrifuged at850 · g for 10 min and resuspended in 100 ml of sodium chloride solution (8.5 g l)1).Fermentation was performed at 30 _C under constant aeration using small air pumps. After 6days of fermentation, the pomace was dried at 50 _C for 72 and several chemicalparameters were evaluated. The total digestible nutrients, a parameter that evaluates the total nutrients able to bemetabolized by animals, also increased after fermentation. These nutrients increased around16%, changing from 53.4% (w/w) in the non-fermented pomace to 61.8% (w/w) afterfermentation (Table 1). In addition, the content of three important mineral elements forruminant diets, calcium (Ca), phosphorus (P) and potassium (K), also became moreconcentrated in the substrate after C. utilis treatment. These minerals increased 20, 30 and23%(w/w), respectively. During the fermentation, the microorganismsoxidized the organic matter present in the substrate, thus increasing the rate of mineralcontent.The content of total nucleic acids, although presenting an increase of 50% after fermentation,can still be considered a low concentration (0.003% w/w), and not hazardous for animalhealth. The soluble Klason lignin fraction decreased after C. utilis fermentation.This resultwas responsible for the increase in the apple pomace digestibility, since this polymer isrelated to the low digestibility of a lignocelluloses substrate. On the other side, the insolublefraction of Klason lignin was not degraded during the fermentation. Lignin degradation isextremely dependent on the presence of oxygen and it is therefore possible that the resultmight have been different if the cultivation was in conditions in which the oxygen availabilitywas higher, e.g. not under submerged conditions. The cellulose fraction of the pomace was slightly degraded (7.8%), and the pectin fractionwas consumed 16%. Although several yeast species are able to degrade pectin, cellulolyticability among yeasts has been observed only in C. utilis. The slight degradation of cellulosealso contributes to the increase of apple pomace digestibility.

The fermentation of apple pomace by C. utilis was the most efficient biological treatment andit reached our objectives, which were to reduce the free sugars level of the pomace in a shortperiod of time, in addition to nutritional enrichment of the fermented substrate. Nevertheless,even though the fermented pomace digestibility was decreased after the sequentialfermentations using C. utilis and P. ostreatus, the fermented substrate presented highpotential to be used as protein supplement, if mixed with other more digestible substrates, incattle feeding. However, factors such as the long time needed to obtain such proteinincrement and the requirement of large spaces for the processing of high volumes ofsubstrates makes this treatment less feasible than treatment with C. utilis only. In contrast, thefermentation of apple pomace by P. ostreatus alone seems not to be a viable alternative, sincethe treatment did not decrease the free sugar level of the substrate, and the protein incrementwas considerably lower than the other treatments and also requireda longer period of fermentation. This work only addressed one of the several possibleprocesses to be used to ferment apple pomace .Although the apple pomace is a seasonal agro-industrial residue, the high amount of this residue available annually make it possible thathigh quantities of supplement for cattle feed could be produced in a short period of time withlow cost.

Treatments

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Parameter (% (w/dry weight of sample) I II III

Reducing sugars 15.0 3.0 16.5

Crude protein 4.1 8.3 5.2Digestibility (DMSIV)

58.5 63.3 62.6

Total digestible nutrients

53.4 61.8 61.5

Klason lignin 23.5 24.0 27.0Soluble klason lignin 0.01 0.003 0.006Pectin 5.5 4.6 2.9Cellulose 7.2 6.6 8.0Nucleic acid 0.002 0.003 0.003Ash 2.0 2.6 2.4Phosphorus 0.07 0.09 0.08Calcium (Ca) 0.10 0.12 0.12Potassium . 0.43 0.53 0.58

OVERVIEW OF APPLE POMACE CONVERSION INTO NUTRITIOUS CATTLEFEED. The problem was overcome through fermentation and thus, manufacturing a high proteinanimal feed. The promising method included fermentation of apple pomace with yeasts,separating out ethanol and using the left-over protein rich material after drying as an animalfeed. The major hurdle is to find out the acceptability of feed developed in appropriateanimals by actual feeding trials. Recently, feeding of fermented apple pomace to the broilerswas found to be successful. Keeping this in view, the present study was undertaken to findout the acceptability of the feed produced by fermentation of apple pomace and to study theeffects of its feeding on rats.

To utilize apple pomace in an economical and effective way, a feed was developed bysolid state fermentation (SSF) using sequential interactive co-culture of Candida utilisand Kloeckera. Removal of ethanol and drying of the left - over residue. Feeding trial wasconducted in white albino rats before and after reconstitution of apple pomace feed in thechoice and no choice study. Feeding of apple pomace feed in the rats before reconstitutionindicated that neither in fermented nor in unfermented form it was acceptable. In the nochoice study both in 100% fermented and unfermented apple pomace group feed intakedecreased continuously resulting in death of rats apparently due to decreased digestibilityowing to high fibre content. Further, fermented or unfermented apple pomace based feed hadlower digestibility and efficiency of conversion than the standard rat feed. Compared to thestandard feed group, growth rates in all the feed groups were negative. Incorporation offermented apple pomace into standard rat feed in the ratio of 1:1 gave better acceptability and

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digestibility. Reconstituted feed with 10% jaggery, 2% groundnut oil, 0.01% mixed flavourand 1% salt was the most acceptable. The post-mortem examination of the rats that diedduring the feeding trial revealed generalized oedema, probably due to some hepatotoxin inthe feed. The blood glucose level in the apple pomace feed group except that wasreconstituted with jaggery, showed a general hypoglycemia, though falling in the range. Italso suggested damage to the liver. The mortality rate, post-mortem examination of the ratsthat died during the feeding trial and blood biochemical analysis of rat serum suggest a moreelaborative study for extended period of time.

Preparation of animal feed

Apple pomace was fermented with sequential cultures .Fermentation was carried out inplastic barrels with Candida utilis for 96 hrs followed by Kloeckera spp. for 120 hrs withintermittent rotation. After completion of fermentation and ethanol recovery, fermented apple

pomace was dried in a mechanical dehydrator at 60o ± 1

oC for 8 hrs and was ground and

packed in polythene bags. The powdered apple pomace was used for feed acceptabilitystudies.

Apple grown areas where there is abundance availability of such feeding material can be usedin the diet of lactating animals for the cost effective milk production. Pomace being richsource of energy can replace the starchy ingredients like maize to the extent of 33% in aration of dairy calves. It contains high level of moisture, which can be evaporated by sundrying reducing to 10-15% for its inclusion in the ration. Apple pomace contained 4.72%crude protein (CP), 20.50% crude fibre, 3.22% ether extract, 2.60% ash and 68.96%nitrogen free extract (NFE). The potential digestibility of nitrogen free extract (NDF), aciddetergent fiber (ADF) and hemi cellulose were found to be 74.90%, 71.33% and 85.42%respectively. Earlier reports showed that inclusion of apple pomace make the dairy rationeconomical and cost effective. The experiment was designed to study the effect ofsupplementing apple pomace in the dairy ration on milk yield and milk constituents. Theinformation as such is very scanty in such animals and therefore such trial was conducted.

Table 1. Concentrate ingredients and chemical composition of feed (% on DM basisParticulars Group I Group II Oat fodderFeed Ingredients, %

Maize 35.0 23.0Apple pomace - 12.0Peanut cake (deoiled) 31.0 35.0Wheat bran 31.0 27.0Mineral mixture 2.00 2.00Common salt 1.00 1.00

Chemical composition Organic Matter 88.4 88.0 22.0Crude Protein 19;0 19.2 06.8Crude Fibre 8.01 10.1 03.0

DMI and Nutrient intake of cow (Red Sindhi x Jersy) at different stages of lactation: Group – II

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(With Apple Pomace)

Days ofLactation

MEintake, Mcal/day

Concentratemixture,kg/day

Total DMintake, kg/day

CPintake,kg/day

TDNintake,kg/day

ME intake, Mcal/day

0-30 7.60 2.90 10.50 1.05 0.89 24.5331-60 8.20 4.00 12.20 1.30 8.01 28.2761-90 8.60 4.60 13.20 1.44 8.67 30.8791-120 7.90 3.90 11.80 1.26 7.75 27.59121-150 8.30 3.60 11.90 1.23 7.80 27.77151-180 7.50 3.20 10.70 1.10 7.04 25.06181-210 8.80 2.90 11.70 1.13 7.66 27.27211-240 9.10 2.40 11.50 1.05 7.52 26.77241-270 9.60 1.60 12.20 0.87 7.31 26.02271-300 8.50 1.00 9.50 0.74 6.19 22.04Mean 8.41 3.01 11.52 1.12 6.88 26.22

In spite of a higher level of crude fibre in apple pomace it contributed readily available sourceof energy due to presence of soluble carbohydrate which increased the productivity of milkalmost at par with the control (2274.55 kg Vs 2265.27kg). It was very interesting to note thatthe constituents of milk were not affected much due to dietary change. The milk yields ofcrossbred cows (RS x J) have been presented in table 5 and graphically represented in figure1.

Milk productions in cows in the two groups at different stage of lactation

Days oflactation

Milk yield, kg Trimester wise milk production, kgGroup-I Group-II Group-I Group-IITotal Yield Yield/day Total Yield Yield/day Total Yield Yield/day Total Yield Yield/day

0-30 224.39 7.50 219.50 7.3231-60 275.00 9.17 300.50 10.0261-90 334.44 11.14 346.12 11.59 833.83 9.26 866.12 9.62

91-120 313.44 10.45 296.00 9.87121-150 284.00 9.47 271.12 9.03151-180 243.44 8.11 242.13 8.07 840.88 9.34 809.25 8.99

181-210 231.44 7.71 218.25 7.28211-240 182.56 6.10 184.64 6.15241-270 123.11 4.10 126.13 4.26271-300 62.33 2.08 60.88 2.03Total* 2274.55 7.58 2265.22 7.56

537.56 5.97 529.02 5.87

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6.0 Web Plan Summary

APPO VALLEY FEEDs, website will enable us to offer customers current information onspecial sales, promos, new product releases, events, and public service announcements. Wealso plan on utilizing the Web to sell and market our products and services. An e-store willalso be implemented into our web design, allowing customers to place orders for the feedthey need right on our website. We will be able to accept and process check and credit cardorders immediately online. Our customers will still have the options of paying by cash,check or money order as well.

6.1 Website Marketing Strategy

Our website will be promoted through the use of sponsor listings and affiliate memberships[confidential and proprietary information removed]. Our site will be registered with all of themajor search engines. We will also share links with our distributors and manufacturers.

6.2 Development Requirements

Our website will be initially developed with few internal technical resources. IPower Webwill host the site and provide the technical back end. MX-Productions will produce thegraphics, logos, artwork, and flash media as they will be developing our website fromscratch. Our site will be maintained by one of the owners.

7.0 MANAGEMENT SUMMARY:

7.1 ORGAZATIONAL STRUCTURE :

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APPO VALLEY FEED depends on an organized division of responsibilities in order

to run an efficient, diversified enterprise. Main decisions and responsibilities will be dividedbetween the four top partners. They will focus on maintaining high quality and a cohesivebusiness entity. Top division managers will be given specific responsibilities such asmarketing, finance, strategic management, or research and development.

7.2 Management Team APPO VALLEY FEED is completely departmentalized. The main departments arefinance, marketing, management, and operations. RAFIE MALIK, owner of the company,assumes the responsibilities of the CFO, while his counterpart, ZEESHANA, will beresponsible for the duties of CEO, operations will be done by KHURSHID as COO andAFSHANA will be taking care of Marketing sector as CMO.. The company will make alldecisions in accordance with the company mission. Employees are delegated tasks basedupon their specialty.

Every three months, the four partners will assess the results of these tasks, and the personalityof the employee involved, to determine promotion and/or salary issues.

7.3 Personnel Plan

Appo valley Feeds,. is currently run and operated by about 50 persons including the topmanagement team of four persons.we have good chunk of labors available in the company tocarry out different tasks.. In time, as we implement our marketing plan, we will need to hirein an additional employees to assist the already working employees. We also could possiblyneed to hire a delivery person in the year 2012. When the business expands with newcustomers and larger feed orders, Afshan will need to be on site to assist Khurshid withinspecting the orders prior to delivery to ensure quality and accuracy of all orders. As growthevolves other family members may be of age to assist in the processes or employees mayneed to be placed.

8.0 FINANCIAL PLAN 8. 1 Important Assumptions :

Easy entry into the industry.

Demand is there in the market.

100% recovery from debtors

Raw material available in plenty..

An adequate loan amount to allow for initial implementation of plans.

Competition and buying patterns remain similar to those used for forecasting.

Existing customer base maintained.

Market research is on target and current (received from different state organizations).

Long-term interest rate will be no more than 7%.

Income tax rate is 30%.

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Sales tax rate is 6%.

8.2 Key Financial Indicators.

POSITIVE OPERATING CASH FLOW: there is a positive operating cash flow, the PBP of the unit is & months. The costs incurred inthe establishment of the unit will be recovered in 7 months.

INTEREST COVERAGE RATIO:The company's ability to service its debt is another important criterion to judge its health. Thelower the interest coverage ratio, the more difficult it is for the company to service its debt. More debt servicing ratio more is it in the favour of the firm.ICR = PBIT/Fixed interest charges. 6,89,700/12,250 =56.

RETURN ON CAPITAL:

EBIT/Capital employed.6,89,700/8,00,000. = 0.86.

Variable and Fixed costs per unit.Raw Materials. Rs 10.00Transportation. Rs 1.00Chemicals. Rs 20.00Packaging. Rs 3.00Wages/ salaries. Rs 20.00Electricity. Rs02.00Diesel. Rs 2.00Water. Rs 1.00Marketing. Rs 15.50 Stationary. Rs 0.50Fixed costs. Rs 1.00Inventory. Rs 1.01Misc. Rs 0.10

Total Costs/ unit. Rs 77.11

8.3 Break even analysis.Break-even is based on fixed costs of approximately Rs 6,00,000. including loan repayment,maintenance and labor. Additionally, controllable such as service labor, advertising and legal/professional fees are included.The volume of sales where revenues are equal to the total costs (fixed+variable).B.E.P or B.E. Sales = fixed costs/contribution per unit.

F.C=10,000, variable costs/unit= 77.11, sales/unit=100.BEP= 10,000/22.9= 436.68 units.

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Profit generated from sales of 436.68 units = 436.68*22.9=9999.97This will meet our fixed cost requirements only.

8.4 PROJECTED PROFIT AND LOSS

To opening stock.To purchase of raw materialTo carriage inwards.To diesel.To manufacturing wages.To factory rent.To depreciation. Furniture. Machinery.To water and electricity.Total

To gross profit c/d

Na9,90,000.30,000.60,000.3,36,000.15000.

2500.12500.90,000.18,00,000.

14,64,000.

By sales.By closing stock. Raw material. Partly manufactured goods. Finished goods.

Total

30,00,000.

- - - - -- - - - -- - - - -

30,00,000.

To Indirect expenses.To salaries.To storage.To advertisement.To Marketing.To stationary.To Distribution. Total

2,64,000.30,300.3,00,000.1,50,000.15,000.15,000.

7,74,300.

To gross profit b/d.By indirect in comes.

Net profit.

14,64,000.- -

6,89,700.

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8.5 PROJECTED CASH FLOW

Cash flow statement of APPO VALLEY FEED from October-December 2010

Oct. Nov. Dec.Cash inflows.

Opening balance. ----------. 2,24,900. 4,49,800 .Cash sales. 10,00,000. 10,00,000. 10,00,000.Collection from debtors. ---------- ------. -------Total cash inflows. 10,00,000. 12,24,900. 14,49,800

Cash outflows.

Variable expenses. 30100. 30100. 30100.Rent. 5000. 5000. 5000.Creditors. 5,40,000. 4,90,000. 4,90,000.Wages and salaries. 200,000. 200,000. 2,00,000.200,000

Total cash outflows. 7,75,100. 7,75,100. 7,75,100.

Closing balance. 224900. 4,49,800. 6,74,700

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8.6 PROJECTED BALANCE SHEET

Liabilities.

Figures for current year

Assets.

Figures for currentyear

Long term Liabilities. Loans and advances from banks Capital.P&L a/c.

7 lac.8 lac.

2,79,215.

Fixed assets. Land. Building. Plant and machinery. Furniture.

500,000.100,000.

Current liabilities. Sundry creditors. Outstanding expenses. interestProvisions. For taxation. Income tax @ 30%. Sales Tax @ 6% For insurance. For Rent of Building and land

Total

...........

12,250.

2,03,235.1,80,000.............15,000.

21,89,700.

Current assets. Cash & bank balances. Stock in trade. Work in progress. Sundry debtors. Advance payments. Bills receivable.

Total

15,89,700...................................................

21,89,700.

8.7 Business Ratios.

The business ratios of the APPO VALLEY FEED for the first three months of business remain constant. As our assumptions suggest that the production, sales, current assets as well as liabilities remain the same. There is no growth in sales because our product is in initial stage and we don’t want to take risk of holding any kind of inventory, that holds our money. After having a detailed investigation of the market and if there is a potential for increasing theproduction, APPO VALLEY FEED will expand its business as per customer needs.PBP = 7 months.

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October November DecemberSales growth 0% 0% 0%Current liabilities 0% 0% 0%Percent of sales 100% 100% 100%PBIT 45.98% 45.98% 45.98%Current ratio 3.87%

8.8 Long term Financial Plan.

APPO VALLEY FEED, is expected to grow at a steady pace. In conversations with otherfeed owners, this topic is already a common theme. Many feed stores are beginning toexperience record breaking growth rates. This is an exciting time to purchase an alreadyestablished and successful store in this market. As we expand our customer base, offer moreproducts and bring the dreamed of equine boarding stable to life, we will be positioningAPPO VALLEY FEED. amongst the elite dealers in the state of Jammu and Kashmir.We will continuously review our business plan as we implement changes. By doing so wewill ensure accuracy and stability. Our goal is to take over this great business, protect it,nurture it, and provide for it. Doing these things will enable us to grow and expand thebusiness in a professional atmosphere.

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APPENDIX:

References:

1. Masami izumiya (lab. Of regional research management )

2. Humiko tsushma and Shinnouska TAMA:The research of Apple Friut juiceprocessing business in Aomori Prefecture Working Paper No.2(1992).

3. Kouji TOYOKAWA and Seiji Murayama:answer book about utilization ofapple pomace for livestock feed(cow). Hirosaki University.

4. Masami IZUMIYA:Economic Analysis of biomass industry , lab. Of ruralresource distribution, Hirosaki university.

CALCULATIONS:

Efficiency of feed utilization

The efficiency of different types of feeds given to the rats was analyzed on the basis ofconsumption index, growth rate, efficiency of conversion of ingested feed anddigestibility of feed, as described by Waldbauer (1968).