Palm production & processing

Eat Fresh Live Healthy

ACTING PRINCIPALDHAKA CITY COLLEGE

PANDEMIC TOUCHB.B.A. 12TH BATCH

SECTION - F

30TH MARCH, 2010.

A project by “Pandemic Touch”

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SUBMITTED TO

SUBMITTED BY

DATE OF SUBMISSION


PANDEMIC TOUCHB.B.A. 12TH BATCH

SECTION-F

Serial

No.

Members name ID Signature

01. Mumtahina Afroz 341

02. Flora Sharmin 342

03. Jahid Hasan 343

04. Nuren Fahmid 344

05. AKM Shahab Uddin 345

06. Tazrian Zahir 346

07. Md. Fahim Siddiqui 347

08. Priyanka bishwas 348

09. Sarah Marzia Beg (leader) 349

10. Md. Ahad Rahman Niloy 350


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Letter of transmittal

30 March, 2010.

To,

The Acting Principal,

Dhaka City College,

Dhanmondi, Dhaka.

Sub: Report on palm production and processing.

Sir,

With great pleasure, we the members of “Pandemic Touch” would like to submit our

project on “Palm production and processing”. we have taken this term project as a

great chance to know more about business plan. This report gives a practical scenario

of Business plan. This will also help us to get idea about Business planning.

We have tried our best to enclose all the related information. This report will

definitely give us an exceptional experience that will be useful in the future on

practical ground.

In preparing this report, we had limitation of many, time and insufficient man power

of the organization.

We, therefore, pray and hope that you will be kind enough to take our final report for

presentation considering our limitation and oblige thereby.

Your faithfully,

(On behalf of the group members)


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“Pandemic Touch”

B.B.A. 12th Batch,

Section: F.

Acknowledgement

At the very beginning, we acknowledge the immeasurable blessing and profound

kindness of “Almighty Allah”- the supreme authority of the universe.

Numbers of individuals have contributed to this report. Firstly we are thankful to all

of them for their help and support. Foremost we are thankful of our coordinator Mr.

Hafizul Islam who has given us the opportunity to make our report with the practical

business environment. We are thankful to our course instructor Mr. Mohammad

Mosharraf Hosssain for his technical and mental support. He also helps us to

understand the theoretical part of Management. We are also thankful to MS. Jafrin

sultana & MS. Nasrin Sultana for giving theoretical knowledge in Financial and

Marketing segment respectively. We are also thankful to Mr. Quazi Ahmed and Mr.

Saiful Islam for self-motivation and guidance. We have got an opportunity to view the

previous report from BBA conference room. So we are thankful to Md. Johural Haque

for his patience. We thanks to the authority of BBS (Bangladesh Bureau of Statistics)

for giving us information. This report is on palm production and processing . It is one

of the greatest additions to our knowledge and wonderful experience. Making this

project report we have worked as a group. The whole group collects accurate

information regarding the topic. Still there may have some errors. We apologies for

our mistakes.

Finally, we are pleased to complete the report on the given subject properly and

authentically.


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Palmate Palm Plant (Pvt.) Ltd Eat Fresh Live Healthy

Board of directors:


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MD. FAHIM SIDDIQUI

MD. AHAD RAHAMANJAHID HASAN

AKM SHAHAB UDDINTAZRIAN ZAHIR PRIYANKA BISHWAS

FLORA SHARMIN

SARAH MARZIA BEG

MUMTAHINA AFROZ



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Executive Summary

In our country, there are many businesses. Some are related to agriculture and some

are about industry. This report, prepared by us is about an amateur business in

Bangladesh, that Palm Production & Processing. Bangladesh is a quite new in this

business. No one farm participated in this business from our country. We are going to

be 1st 0ne in Bangladesh. The name of our farm is “Palmate Palm Plant (Pvt.) Ltd.”. It

is all about palm oil business. As there are many competitors of us in this country, the

scope of this establishment of our farm is pretty bright. Our competitors are both local

and importer Soya been &Palm oil. We are going to start this business as an amateur,

but our vision is to be the local market leader within the year 2025.We will provide

the best product with cheap rate. We are able to supply TFA1 free high quality RBD2

Palm vegetable olein3. Customer’s satisfaction will be considered as the best award

for us.

We are proud to have such persons who have promoted us highly. Above them, some

are related to our farm and others are hired from Malaysia.

Our firm will be formed as a private limited company. We have Ten Shareholder. Our

farm has three sections. Two’s are Cox’s bazaar and the rest one is Dilkhusha. We

have specific land for our project. We will cultivate palm & offer cultivation. We will

produce palm oil, palm olein & kernel oil when we will able to collect our main raw

materials (Palm Plant) from the Malaysia and Myanmar and others will collect from

our palm ground field for palm processing. As the oils will be ready to deliver in just

time.

The target market of us is divided into three parts. In palm oil & palm olein sectors,

the redefined target market includes General Mass, restaurant, hotel etc. In kernel oil

sector our target market is soap manufacturing companies. We will keep regular

communication with them about our service. Our customer will be able to order by

online. Our company will be much careful about the comments of our customers.


71. TFA ( Trans Fatty Acid ) 2. RBD ( Refined Bleached Deodorised ) 3. Olein ( Liquid Fraction of Palm oil )


The total cost of the project is projected 60,000,000 taka. 35% of that amount will

cover by bank loan with rate of 13% interest. For the 1st year the production cost is

projected as 3700000 taka for 72000 litters’ palm olein & 2000 litters’ kernel oil. By

the time continues, the rate of production will be increased.

Our company will not focus only on the profit, but also will do some social activities.

Any activities related to our business will not be done which affects the environment.

Every activity will be kept transparent to the people of our country. We will publish

annual reports for the visitors.

Finally we can say that our company will have a bright future in the local market. We

can hope with our company that if all member’s works effectively efficiently. Our

company will be the no.1 company in local edible oil market in our country.


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Table of contents

Number Contents Page no.I Title FlyII Title Page IIII Group Identification IIIV Letter of Transmittal IIIV Acknowledgement IVVI Introducing Company’s Shareholder VVII Executive Summary VI-VIIChapter-1 Business Introduction1.1 Introduction 11.2 Objectives 21.3 Methodology 31.4 Limitations 4Chapter-2 Business Description &

Management Segment2.1 General Description of Business 52.2 Industry Background 52.3 Company History 6-72.4 Goals & Objectives 72.5 Uniqueness of the product 82.6 Management & Organization 8-92.6.1 Management team key Personnel 102.6.2 Legal structure 102.6.3 Legal Fact 102.6.4 Board of directors 112.6.5 Management adversary board 11Chapter-3 Technical Segment3.1 Location analysis 123.2 Production needs 12-153.2.1 Operation plan 153.2.2 Our products 15-173.2.3 Chemical composition of palm oils 17-183.2.4 Health & Nutrition 193.3 Suppliers 213.4 Source of raw materials 213.5 Labor supply 213.6 Production process 213.7 Quality control 22Chapter-4 Marketing Segment4.1 Current Scenario in Bangladesh 234.2 Situation Analysis 234.3.1 Market summary 234.3.2 SWOT Analysis 24-25


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4.2.3 Marketing research 264.2.4 Competitor Analysis 264.3 Marketing Strategy 264.3.1 STP Analysis 26-274.3.2 Marketing Mix Analysis 20

Product 29Uniqueness 29Benefits 29Features 29Price 29Breakeven analysis 30-33Distribution Channel 34Delivery terms 34Packaging & shipment 34Payment method 34Sales forecast 35Promotion 35

4.4 Corporate Social Responsibility in Marketing

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Chapter-5 Financial Segment5.1 Cost of project 385.2 Financial plan & loan requirement 395.3 Means of Financing 405.4 Loan repayment schedule 415.5 Profitability projection 425.6 Projected income statement 43Chapter-6 Conclusion

Conclusion 44 Bibliography 45

Chapter-7 AppendixGlossary 46


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Introduction

In the context our country, Palm Production & Processing isn’t a established business.

As a new business it has so many potentialities scopes to be a profitable sector.

Thinking about a business is like leading an adventure. However Palmate Palm Plant

(Pvt.) Ltd. is a unique business company for Palm Production venture in Bangladesh

interested to deal in Palm oil. Basically our industry is an agro based industry. Every

year we have to import large quality of edible oil in which more than 40% in palm oil

and those are not well refined. 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, TFA free RBD palm olein, vegetarian cooking oil, and kernel

oil and market them.


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Objectives

We have specific goals & objectives for present and future. Our main objective is to

produce TFA free high quality RBD palm vegetable olein cooking oil. Our other

objectives are given below:-

To produce also palm oil & kernel oil and make an example of producing

palm oil in Bangladesh.

To provide a well refined & fresh looking oil.

To operate the company through a profitable way and to have growth.

To reduce the cost of the Govt. in importing edible oil. We will market Palm

oil, Palm olein & kernel oil in a subsidized price.


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Methodology

To make this business plan we have to give all our effort. To prepare this report

standard methods of collecting information and report writing have been used. We

used all secondary data for preparing this report by market survey. We collected all

data from internet, magazine, different books and topic of STP, SWOT, and

Promotion.

Beside this we have collected as many information from outside source, like as BBS

(Bangladesh Bureau of Statistics)


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Limitations

This study as an empirical study, suffered from some limitations short comings, lapses

and many others obstacles. However, we have tried to give our maximum effort so

that this repot and an acceptable conclusion can be drowned and benefited.

We did not have enough time for preparing this report.

Lack of information.

We did not have sufficient fund for writing report.


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2.1 General description of 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 tones of edible oil costing gap

proximately 5000 core taka. 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.

2.2 Industry background:

“Palm-oil” the word came from African oil palm. The history of Palm Production &

Processing started from the invention of Palm seeds. Palm seeds were first invented in

1848 in Denmark. The first Palm industry of the world was established in Britain in

1960-1970 century. The name of the company was Malaysianijation Company. After

that few other had started this industry. So Denmark is the first country that introduce

palm in the world. Now several countries like as Malaysia, Australia, Indonesia etc.

started this business. But still now Bangladesh is totally out of this idea. We are the

first whose are going lunch Palm Production & Processing in our Bangladesh.

The name of our company is Palmate Palm Plant (Pvt.) Ltd and this is the first Palm

industry in Bangladesh.


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2.3 Company history:

2.3.1 Vision:Our target is to be the local leader of edible oil market within 2025. We fulfill the

necessity of local market by producing oil in our own country and stop importing oil

from other countries.

2.3.2 Missions:

We are forwarding with a great mission. Our mission statement consists of three

interrelated parts.

Product mission:

Producing palm locally, processing palm to market palm oil and kernel oil those are

wholesome and neutral to environment

Economic Mission:

To operate the company through a profitable way and to have growth. Economic

establishment of the owners and career progression of the employees.

Social Mission:

Reducing the cist of the government in importing edible oil. Marketing palm oil and

kernel oil in a subsidized price.

2.3.3 History:

Palmate Palm Plant (Pvt.) Ltd is the first Palm Production & Processing Company in

Bangladesh. Before this company Bangladeshi soap industry & people had used

imported oil. This idea first came in our thinking at 27-02-2010. From this date we are

working for building of our company. Others identification are given below :-


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NAME ADDRESS

Palmate Palm Plant (Pvt.) Ltd

Making a difference

Palmate Palm Plant Pvt. Ltd

Kalilchara

Ramu

Cox’s Bazar

Phone: 9128506

Cell : +880 1672910584

Fax :88-02-9560299

E-mail :

The another office is situated in our servicing office. The address of this office in

given below :-

2.4 Goals & Objectives:We have specific goals and objectives for present and future. Presently we want to

work in Cox’s bazaar. Our future goal is to expand the business in other hilly district

like Banderbans and Rangamati.

To achieve the goals we have some objectives. Our main objective is to produce TFA

free high quality RBD palm vegetable olein cooking oil and other objectives is to

produce palm oil and kernel oil in a reduced cost in comparison to the importers

imported cost.


ADDRESS

BCIC Bhaban (8th

Floor,30-31

Dilkhusha C/A

Dhaka-1000.

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2.5 Uniqueness of the product:We are producing such a product that people need everyday without considering its

features and benefits. However, we have some unique product features and benefits.

TFA free High quality RBD palm olein vegetable cooking oil that all classes

of people get the right and high quality product and being satisfied.

Our palm oil is refined and fresh looking. In Bangladesh palm oil isn’t well

refined.

We can sell palm oil and kernel oil less than the importing cost. Thus we can

save people money.

We supply the kernel oil to the soap manufacturers that they must import

kernel oil from other exporter countries because the local market isn’t exist till

now.

2.6 Management & Organization:Our day to day management will be conducted by a group of experienced and talented

managers. We shall hire 7 employees from Malaysia for different duties. Some of

them will directly join to the management. Owners of our company will also join the

chief management of the company. Owners will be contracted with the company and

run the top management. Give below our organization chart which clarifies the

position of the managers and employees.


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Organizational chart


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Board of directors

Managing directors

Palm ground manager

Production manager

Human resource

General Manager

Finance managerAccount manager

Agrarian

40 Workers

Agrarian

40 Workers

Agrarian

40 Workers

Specialist in palm oil

60 Workers

Specialist in kernel oil

60 Workers

2 Enployees

2 Enployees

2 Enployees


2.6.1 Management team key personnel:

Our management team is our honorable ten members of our board of director. Our

chairman co- ordinates the organization through planning and decision making. Our

Managing director manages the whole management sector.

2.6.2 Legal structure:

Primarily we want to establish as a private limited company. We are ten entrepreneurs

.In future we may move into (public limited company). Our company needs huge

amount of capital. For this reason, we may have become public limited company but

firstly we are not trying to be so. Firstly, we want to take risk by ourselves. At the

beginning, we may not get responses from general investors who will be willing to

invest in our company. Besides, we want to make a valuable image in this field by

running it through private limited company. We want to make an example here.

2.6.3 legal fact:

We could think ourselves as partners but we do not like to do so, we want to be a

private ltd. Company. The reason behind the fact is to get strong legal support. Still

we have to go through the licensing procedure. We strongly believe that we shall get

positive incentive and supports from (BCIC) will provide us the business license. Our

industry will not pollute the environment highly. Besides, our palm field will turn into

forest within 10-12 years that will be very helpful for environment.


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2.6.4 Board of directors:

Our board of directors includes 10 members – all owners of the company. Our

honorable board of directors is:

01. Mumtahina Afroz

02. Flora Sharmin

03. Jahid Hasan

04. Nuren Fahmid

05. AKM Shahab Uddin

06. Tazrian Zahir

07. Md. Fahim Siddiqui

08. Priyanka bishwas

09. Sarah Marzia Beg

10. Md. Ahad Rahman Niloy

2.6.5 Management adversary board:


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Any five of the members of the above chart will be active members of the

management.

Advocate Abdur Rajjak, layer of the Supreme Court will provide us legal

support.

Mr. Mojid Hossin will be our banker.

We shall have additional two specialists from Malaysia for providing mentors

and adversary support.


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3.1 Location analysis:

3.1.1 Palm ground location:Site selection for any industry is very much vital. Our palm ground is in Ramu Cox’s

Bazaar. To be close to raw materials we have chosen our site near the palm ground.

our total 12hectares of land will be ready for planting trees.

3.1.2 Industrial location:People all over the country are the customers of our products. so

we don’t think where to locate our industry. However considering

the raw material supply we proposed our location just two km.

away from our palm field. Our proposed industry zone will be 12

hectares of land .we shall use electricity produced in Kaptai Lake.

We are bound to locate our palm field in Cox’s Bazaar because

palm tree don’t grow beyond 20 degree equator tropical zone.

3.2 Production needs:Basically, we are having an agro-based company. Before having finished products we

have to go a long way. Due to the nature of our raw materials, we cannot go to


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Palm ground location

LocationIndustrial location


production before 2 years starting from now. Producing palm needs at least 15-18

months to have palm in hand. Then we can think about production of palm oil, other

products from it and its marketing. Palm trees average highest age is 25 years.

Considering the fact we have purchased 13hectares land in Cox’s Bazar at Ramu

Primarily. We may extend the land at Bandharban, Rangamati in future. This land is

actually on the slope (not much as sleep) of the hill and plant land also.

We are choosing the land for raw material production because palm production needs

forest like environment and where people seldom go or a desolate place. Besides our

palm field will form into a deep forest within 10-12 years

Land with little solve is convenient for production of palm; our intended

location will meet the requirement. We are taking the lease from the government. It

will cost 2, 00, 00,000 taka.

Planting palm tree needs 25 degrees temperature and 200”and above rainfall.

As a hilly site Cox’s bazaar meets the demand. By the end of the year we are

importing some palm plants from Malaysia and Myanmar within that time our total

12hectares of land will be ready for planting trees.

To inspect and guide the total palm productions we are hiring three agrarians

who are specialist on palm production. We need our facilities layout fully equipped at

the end of 2012. Our industry is a heavy industry. So we need heavy machineries. All

the machines will be imported from Japan. That will cost 3, 00, 00,000 taka.

Palm oil machines kernel oil machines

Vessel

Sterilizer

Stripper

Deacidification

Alkali Refiner

Alkali Nevtralizer

Earth bleacher

Charsher

Refiner vessel –1

Refiner vessel-2

Total 10 machines.


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PALM PLANTSPlanting palm tree needs 25 degrees temperature

and 200”and above rainfall. As a hilly site Cox’s

bazaar meets the demand. By the end of the year

we are importing some palm plants from Malaysia

and Myanmar within that time our total

12hectares of land will be ready for planting trees.Imported palm plant

PLANTATION & GROWINGPalm trees may grow up to sixty feet and more in

height. The trunks of young and mature trees are

wrapped in fronds which give them a rather rough

appearance. The older trees have smoother trunks

apart from the scars left by the fronds which have

withered and fallen off.

OIL PALM TREE Oil palm tree will start bearing fruits after 30 months of field planting and will

continue to be productive for the next 20 to 30 years; thus ensuring a consistent

supply of oils. Each ripe bunch is commonly known as Fresh Fruit Bunch (FFB). We

will divide oil palm tree into two categories.

Early Maturity Our planting material is vigorous and

harvesting of fruits can commence 18 months

after planting as opposed to the industry

average 30-36 months

2 Year Old Oil Palm


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High Yield

Our planting material can produce a

high yield of 16 tons/ha in the first year

of harvesting, subsequently increasing

to 35-38tons/ha in the 5th year of

harvesting.

FRESH FRUIT BUNCH (FFB)

Palm fruit contains two types of oil: palm oil,

which comes from the mesocarp or fleshy part

of the fruit, and palm kernel oil, which comes

from the seed in the fruit. Both have

significant commercial value.

Fresh Fruit Bunches

3.2.1 Operation plan:After Palm plantation we need to process. We shall have standardized operational

process and technology imported from Malaysia. Our all heavy machines will be

imported from Japan

3.2.2 Our products:

The Oil

Our oil palm produces two types of oils; crude palm oil (CPO)1 from the fibrous

mesocarp and crude palm kernel oil (CPKO)2 from the kernels. Although both oils

originate from the same fruit, palm oil is chemically and nutritionally different from


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palm kernel oil. It is one of the only two mesocarp oils available commercially, the

other being olive oil.

In conventional milling process, the FFB’s3 are sterilized and the fruitlets stripped off.

The loose fruitlets are then digested and pressed to extract the CPO. The kernels are

separated from the fibrous mesocarp in the press cake and later cracked to obtain

CPKO.

Palm oil: palm oil is going to be our major product. However our

palm oil will be well-refined than that of the importers’ palm oil, In

our country importers market palm in 16 liters tin. We will market it

in tin as well as 1,2,3 and 5 liters container.

RBD Palm olein:

Palm olein is going to be another major product. Palmate Palm

Plant (Pvt.) Ltd. now able to supply high quality RBD Palm

Olein Cooking Oil.


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1. CPO ( Crude Palm Oil ) 2. CPKO ( Crude Palm Kernel Oil )3. FFB ( Fresh Fruit Bunch )


Palm Olein Cooking Oil Product Specifications:

Iodine Value

(Wijis) : 56 min.

Melting Point : 24

deg c

Cloud Point : 10

degrees Celsius

max.

Free Fatty Acids as Palmitic : 0.1% max.

Moisture Content : 0.1% max.

Colour, 5.14" Lovibond Cell : 3 RED max.

Palm Olein Cooking Oil Applications & Benefits:

Ideal for cooking and baking

Very rich in Vitamin E

No Trans Fatty Acids

Cholestrol and Lactose FREE

No artificial additives or preservatives

Shelf life and certification:

Shelf Life is 24 months from the date of production.

Conforms to the requirements stipulated by Bangladeshi Food Act and Regulations

100% HALAL


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ISO 9001 : 2000 certified

HACCP Codex Alimentarius

GMP Codex Alimentarius

Kernel oil: Palm kernel oil is obtained from the kernel of

the oil palm fruit. The oil composition is very different from

that of the palm oil. kernel oil is one the important raw

material for soap manufacturing. By our facilities, we shall

produce kernel oil. Presently, soap manufacturers import

kernel, we expect that we shall contribute to non-importing of kernel oil to some

extend.

3.2.3 Chemical composition of palm oils:

Crude Palm Oil is the richest natural source of Tocotrienols. Our company has

developed a special patented technology for extraction. The latest technology to

purify Tocotrienols from the fruits of oil palm (Elais guineensis) was developed to

produce a superior quality and purity.

Formation of tocotrienols

Tocotrienols are members of the Vitamin E family comprising of Tocotrienols and

Tocopherols. Tocotrienols differ from the Tocopherol's in that they contain three

double bonds in the side-shain (see molecular structure). Tocotrienols Isoprenoid side

chain has three double bonds as compared to Tocopherol's saturated side-chain. In

total, there are

four types Tocopherols namely alpha, beta, gamma and delta and four corresponding

of Tocotrienols isomers.


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Alpha Tocotrienols is 40-60 times more potent than normal Tocopherols making it

one of the most powerful lipid soluble anti oxidants available.

Among vegetable oils, palm oil is the richest natural source of Tocotrienols.

Tocotrienols are surprisingly not found in any other vegetable oils like soy bean oil,

canola oil, rape seed oil and sunflower oil. Tocotrienols can be found naturally but in

much lesser quantities in rice barn, barley, wheat gem and oats.

Palm Tocotrienols complex contains significant amount of D-Alpha-Tocopherol, D-

Alpha-Tocotrienol, D-Gamma-Tocotrienol and D-Delta-Tocotrenol as compared to

most other naturally found vitamin E, which are mostly Tocopherols.

3.2.4 Health & Nutrition:

The palm oil is rich in naturalchemical compounds important for health and nutrition.

Among others, it is a natural source of Carotenoids & Vitamin E as well as supplying

fatty acids and other important fat-soluble micronutrients. It also supplies an

abundance of calories that gives us much-needed energy for our daily life.

Trans-Fatty Acid (TFA) Free


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Solid fats made from palm oil are better for health as they do not have to go through

hydrogenation. Hydrogenation of oils produces TFAs along with saturated fatty acids

and modifies cis-fatty acids. TFAs have been implicated by numerous scientific

studies to breast cancer, colonic cancer, and heart disease. It is also believed to

contribute to development of Type 2 diabetes and impairment of brain development in

newborns. Many countries today warn consumer against intake and/or even regulate

the content of TFAs in foods sold in the irrespective markets. This underlines the

growing recognition and concern over their negative health effects.

Rich In Vitamin E Palm oil is rich in Vitamin E (tocopherols & tocotrienols). In fact, no other vegetable

oil has as much Vitamin E compared to Palm Oil. Vitamin E is a powerful anti-

oxidant, capable of reducing the harmful types of oxygen molecules (free radicals) in

the body. This means they may help to protect you from certain chronic diseases,

while delaying the body's ageing process. Latest research shows that the tocotrienol

form of Vitamin E reacts more effectively than tocopherols.

Carotenoids Carotenoids are natural chemical compounds that give crude palm oil its orange-red

color and that make palm oil red in color. Unrefined palm oil and crude palm oil are

nature's richest source of carotenoids as compared to the other vegetable oils - 15

times more than carrots, and 30 times more than tomatoes.

The most active and important form of carotenoids found in palm oil is ?carotene

(beta-carotene).Many carotenoids contain Vitamin A which is an effective antioxidant

that helps strengthens the body's immune system and reduces the risk of cancer, heart

disease and cataract. Lack of Vitamin A can lead to blindness and a variety of serious

medical conditions.

Nutritious Oil Another reason why you need palm oil is because it supplies fatty acids as well as

important fat-soluble micronutrients like Carotenoids (including pro-vitamin A),

vitamins D, E and K.


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Fatty acids are raw materials for building the membranes of every cell in your body,

including your bones, nerves and brain! The micronutrients keep your body cells

healthy and functioning properly.

You would be malnourished and become sickly or prone to infections if you do not

have fats and oils in your diet. The same result will happen if you lack foods that

supply carbohydrates, protein, minerals and other vitamins. The best way to meet all

your nutritional needs is to follow the Food Guide Pyramid - the lower the food group

on the pyramid, the more of it you should eat.

Calories Palm oil is very rich in calories. One gram of palm oil supplies 9 Kcal of energy,

which is 2 ½ times more than one gram of protein (4 Kcal) or carbohydrates (4 Kcal).

Energy should come from all groups of food, including fats and oils. Experts calculate

that ordinary adults need between 1,800 Kcal to 2,000 Kcal per day, out of which up

to 30% can be obtained from fats and oils.

3.3 Suppliers:When we start our business we need some suppliers make as support source of our

business. It’s very important to receive the supplies in time to serve the valued

customers with quality service. To select the suppliers, we first collect the list of

suppliers and their customers. Then we go to the customers of those suppliers to

receive feedback. We also supply our product directly to the customer by using our


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own transportation facilities. This approach helps us to identify the efficient suppliers

& customers in the business world.

3.4 Source of raw materials:Raw materials for the project are the Palm plants. The Palm plants collect globally.

We import these Palm plants from Malaysia & Myanmar. We cultivate this plant FFB

using the local labor and get the Palm. We used this FFB for produce our products.

3.5 Labor supply:Labor is an important part of our organization. We collect our labor from the local

area. We give them train about Palm cultivation by our expert technician. Labor is

available here and they are interested to work with us. Here labor cost is not very

high.

3.6 Production process:A unique feature of the oil palm is that it produces two types of oil - palm oil from the

flesh of the fruit, and palm kernel oil from the seed or kernel. For every 10 tons of

palm oil, about 1 tons of palm kemel oil is also obtained. We have to follow process-

manufacturing system due to our nature of raw materials and output. We have several

steps to produce palm oil and we should have to go through all the steps. A flow chart

will make our production process easy and understandable.

Processing Flow Chart


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3.7 Quality control:We have automated quality control system. Second phase in flow chart “the refining

process” is well a quality control system. Pre bleaching and earth bleaching are two

special machines for quality control. For kernel refiner 2 is setup for quality control.


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4.1 Current scenario in Bangladesh:Palm isn’t produce in Bangladesh till now. It imports from various country like as

Malaysia, Australia, Myanmar, Kenya etc. It’s not well refined. That’s why it’s not

very popular in Bangladesh. This oil contains lots of TFA (Trans Fatty Acid) & A project by “Pandemic Touch”

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cholesterol. So it’s increase the porn of heart diseases. There is also a fact that there is

not enough prepared land for palm cultivation. We have some little amount of area in

our countries that are suitable for Palm cultivation. In those areas we started our

project & they are situated in Cox’s Bazar’s Ramu hill tracts & sea-beach area. We

refine the Palm oil using special technique rather than other vegetable oil, Soya been

oil & seed oil. For the first time we produce high quality TFA free RBD Palm olein

vegetable cooking oil in Bangladesh that the all classes of people get the right and

high quality product and will be satisfied.

4.2 Situation analysis:

4.2.1 Market summary:We are the first palm production and processing company in Bangladesh. Before that

different company would have to import products from abroad. So the price rate was

probably high and our imported palm oil isn’t well refined. But now we produce well

refined palm oil and high quality RBD palm olein with feature of TFA free and sell to

clients in reasonable price. So we will have a strong demand in market.

4.2.2 SWOT Analysis:

PERFORMANCE IMPORTANCE


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AREAS MajorStrength

Minot Strength

Neutral Minor weakness

Major weakness

Hi MED LOW

1.MarketingCompanyReputation √ √

2. MarketShare √ √3.CustomerSatisfaction √ √4.CustomerRetention √ √5.ServiceQuality √ √6.PricingEffectiveness √ √7.DistaibutionEffectiveness

√ √8.PromotionEffectiveness √ √9.InnovationEffectiveness √ √10.FinanceAvailability Of Capital

√ √

11.Cash Flow √ √12.Financial Salability √ √13.DedicatedEmployees √


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STRENGTHS

We have satisfied customer.

We will supply TFA free High

Quality RBD Palm olein vegetable

cooking oil in local edible oil sector.

We have good debt repayment

reputation.

Our staffs are very much dedicated.

WEAKNESS

New established company in

Bangladesh.

We have least knowledge about our

market.

Our business in the amateur

position.

OPPORTUNITIES

Large market opportunity.

The demand of our product is very

high.

Government is increasing facilities

for this business.

THREATS

Many people of our country dislike

palm oil.

As the market is renowned as

highly profitable and easy to serve

many companies are entering the

market with some kinds offering

and features.

We have business diversity Risk.

4.2.3 Marketing research:


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Introducing a new product needs market research to

about the surrounding factors. We are not beyond the

rule. Market research is to identify some facts like –

expected demand and supply condition of a product,

geographic factors and competitors position etc.

From the Bangladesh Bureau of statistics, we found

that there is a huge palm oil market in our proposed

location. It reveals that the total edible oil demand In

Cox’s bazaar is about 11,000 tones a year. This demand is met by both imported

soybean and palm oil.

4.2.4 Competitor analysis:Our primary market reveals our competitive position. Our competitors are both local

and imported soybean and palm oil. We think, at the beginning, we are like a child

industry so we can’t do such thing that will influence the whole market. Here has a

matter of customer preferences. Particular group of people prefer soybean to palm oil.

The reason is that our imported palm oil is not well refined and containing a lots of

TFA. We believe, we shall produce well refined and TFA free vegetable palm olein

cooking oil and our customer will prefer to buy it.

4.3 Marketing strategy:4.3.1 STP Analysis:

Market segmentation:As a Manufacturing company we produce our product considering market basis.

Palmate palm plant (Pvt.) Ltd. finds many difficulties to segment its marketing in the

sense of mass marketing. But after thinking about our target market we decided to

segment or device our local market in 3 nature of market bellow.

Government Market

Private sector Market

Import Market


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Targeting:Our company is giving three types of products. One is palm oil, other is palm olein

and the other is kernel oil. So the target market of this company is divided into three

parts. In palm oil and palm olein sectors, the redefined target market includes General

Mass, restaurant, Hotel etc. We shall sell palm oil and palm Olein to wholesaler in a

maximum extent. A little amount will be marketed by our own facilities within Ramu

Upazilla. In kernel Oil sector our target market is soap manufacturing companies.

Here we shall not take resort to intermediaries. They are stressing, especially in the

industrial zone like Chittagong, Narayangonj and Gazipur.

In a word, our customer will be all the people of our marketing area irresponsible to

age, cost and creed.

Marketing positioning:We are standing our business as a new organization. So we must have to concentrate

on to stay in the market. To do so, we have to set our goal. To achieve our objective

we have some strategies.

Our delivery process will be the fastest one.

We focus on our goal.

We focus on our target customers.

We analyze our competitors & take more than necessary steps for the survival of

our company in the market.


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4.3.2 Marketing Mix Analysis:


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Promotion

AdvertisingPublicity

After sales service

PlaceChannelsInventoryLogistics

PriceList PriceDiscount

Allowances

Product

Brand Packaging

Service

Target

ConsumerIntended

Positioning


Product:Uniqueness:

We will make our self in a position to supply TFA free High Quality RBD palm olein

vegetable cooking oil (TFA Free). We will also provide kernel oil that’s are the main

raw materials of soap manufacturing companies whose import CPKO from abroad.

Benefits:Our Palm oil is well-refined and fresh cooking. Our major product RBD palm olein

vegetarian Cooking oil is totally free from TFA. So it can be eaten all classes of

people. That why people get the right and high Quality product and being satisfied.

Features:We market tined palm oil and palm olein as well as 1,2,3 and 5 litters containers, no

importers provide this feature. The benefits are that it is easy to carry, easy to use,

easy to store and less hazardous to the retailers to retail.

Price:Pricing policy:

We have two competitors- imported palm oil and soybean oil. Soybean’s price always

higher than that of palm oil. In our country palm oil’s price vary from (70-80 taka)

and this variation depends on the price of international market.

Our policy is to keep our palm oil’s price always less than 10 taka by soybean oil and

the price will be same in contrast with the imported palm oil.

We are pricing normal palm oil price same as imported oil because we have a very

little market share so we can not influence market by pricing less or huge rather than

having a competitive price (Here quality will provide us competitive advantage our

palm oil is well refined than the imported oil.).


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For our major product TFA free High Quality palm olein vegetable oil, the price will

be same in contrast with the soybeans oil. For kernel oil we extend international

market price $2 or 140 taka per litter. Importers have to pay purchasing cost and

import tax, thus the price goes up. Here we get competitive advantage.

General mass will be our customer group – who mostly think about pricing. So here

we will get competitive advantage than soybean oil. Again some people consider

quality become competitive advantage which we will get from palm oil.

Breakeven analysis:Our first accounting period is of two years. We have to incur three years expenses

before having first production, so we decided to account all these 2 years expenses

in our production year.

First accounting period’s break-even:

Total fixed cost:Costs Description Taka

Depreciation of equipment 3,05,00,000/25 12,20,000/=Depreciation of building 15,00,000/25 60,000/=Depreciation of delivery van

15,00,000/20 75,000/=

Total fixed cost(TFC): 13,55,000/=

Total cost (TVC+TFC) = 49, 44,000+13,55,000 = 62,99,000/=

Revenues:Products name: Description Taka Palm oil 80(per unit) @72,000 litters 57,60,000Kernel oil 140(per unit) @ 20,000 litters 28,00,000

Total 825,60,000


Total variable cost:Raw materials Labor costOverhead costSelling expenseAdministrative expenseFinancial expense

2000000/=700000/=1000000/=200000/=420000/=624000/=

Total variable cost (TVC): 49,44,000/=

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As we are dealing with two products. It’s difficult to exactly identify the variable cost

and fixed cost for the two products.

To identify these costs, we consider revenue contribution (% ) of each product to our

total revenue. Otherwise we could do this by REVENUE MIX method.

The process is like : 85,60,000(100%) = 57,60,000( 67.29%) + 28,00,000(32.71%)

Palm oil fixed cost = 13, 55,000*67.29% = 9, 11,780tk.

Kernel oil fixed cost = 13, 55,000*32.71%= 4, 43,220tk.

Palm oil variable cost = 49, 44,000*67.29% = 33, 26,818tk.

Kernel oil variable cost = 59, 44,000*32.71% = 16, 17, 182tk.

Break-Even For Palm Oil:1. Mathematical equation method:

(USP*Q)-(UVC*Q)-FC=00 [Here USP= Unit selling price

Or, 80Q-46Q=FC Q= Quantity

Or, 34Q=9, 11, 780Or, Q=26,817units UVC= Unit variable cost

FC= fixed cost]

{Variable cost per unit=3326818/72000=46tk.}

Note: our capacity is 72,000 litters/units that mean selling more than 26,816 units will

contribute 34tk. to revenue.


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2. Graphic presentation method:

Break-even for kernel oil:

1. Mathematical equation method: (USP*Q)- (UVC*Q)-FC=00

or, 140Q-81Q=FC {variable cost per unit=16,17,182/20000=81tk.}

or, 59Q=4,43,220

or, Q=7512units

Note: our capacity is 20,000 litters/units that mean selling more than 7512 units will

contribute 59tk. to revenue.


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2. Graphic presentation method:

Effect of high low pricing:Pricing is so much important for product. If we fix a high price for a product general

people will not be able to buy our product. Before fixing the product price first we

have to look our competitors company. If other companies fix the product price low

than our company, people will not buy our product. But if we fix our product in low

rate. People will not trust. They will think that there is something wrong to our

product or it is not high quality product. So we should fix our product price in level

from which we can get minimum profit and trust of people. If we can do this we can

get our market.


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Place:Distribution channel :

For our products we shall take resort to different

distribution channel. Soap manufacturing

companies will collect palm by their own facilities.

We also supply them by our transportation if the

location is not so far.

Delivery terms: Our company is a well processing company but we have also transportation facilities.

We arrange free transportation facilities for our local customer. We have also some

stepped for others customers. We give them safe transportation facilities by our own

transport system.

Packaging and shipment:The Palm oil which is imported in Bangladesh with packaging those all are packed in

16 litters barrel. So the importers sell the Palm oil in open market with out containers.

It isn’t well system to sell oil because it can be polluted. In these case we are packing

the oil in little containers , such as : 500ml,1litter, 2litter,3 litter,4litter & 5 litter so

that the general public can buy our oil as their need. As well as containers also

protecting oil from being polluted with air. So people getting eager to use our oil.

Payment method: Credit policy:

Every business has to sell on credit; we are not beyond the policy.

We do not sell on credit beyond 50% of the total sale.

We do not offer the prompt payment discount.

While considering credit to a new applicant we check his business history.


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Managing account receivable:We are a bit relaxed in our accounts receivable collection. While selling to

wholesalers, we extend ‘N/30’ credit terms.

Managing account payable:

Our nature of business reveals that we have very little payable accounts. Our policy is

to pay payables as early as possible.

Sales forecast:We shall market basic product, the edible palm oil.

So we can forecast that we shall be able to sale

whatever the amount we produce. Our estimated

production of palm oil is in a year is 72,000 kg.

From market research, we found that the demand

of Cox’s for edible oil Bazaar is about 11,000

tones. So selling 72 tones is not matter of concern. So we can forecast that our

products will be sold within 6-7 months of production.

Our market research reveals that soap manufacturing companies need 1,500 tones

kernel oil in a year. While we can supply up to 20 tones.

Promotion:Our company will enjoy a premium in promotional cost. Because, we are marketing

such a product that people need everyday. This product is a basic product like rice and

wheat.

But this doesn’t mean that we don’t need advertising. As we are starting the business,

we need to make people know that palm is being produced in our country. There is a

matter of patriotic motivation.


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Medias:As we are planting plants at the end of the year, we are intended to advertise our

activities through TVs for one month only. Because of this stage, we don’t need

much advertising. Three years later when palm fruit will mature to produce, we will

start our palm oil production. TV will show our palm field and finished products. We

will also use radio and newspaper to advertise. We shall take resort to cost free

method of promotion – publicity.

Sales promotion:If our customers order us with 1st 9 month. We will provide some discount to them.

Different types of discount will be provide, Such as

1st month-3rd month ---8%

4th month- 6th month ---5%

7th month -9th month ---3%

Public relation:We will also promote our product through public relation. To make up public relation

we select some areas. We show them with our projector how we produce our oil &

how much it will be beneficial for health

Direct marketing: We can give some free oil cane to public.

We can distribute leaf let of our company.

We can participate in different types of fair.

After sales service: If any Customer found defect in our product we will replace it instantly.

We will exchange our product it the date is expired.

Promotional budget: We don’t need uninterrupted advertising. Although promotion cost is variable cost by

nature, in our firms this expense will occurs only twice. So the cost goes to only

20,000 taka on top of that, we have taken resort to cost free promotion methods


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4.4 Corporate social responsibility in marketing:

Business corporations were only run for profit. They were as like as “Money Making

machine” But now a day this view is changed. Government is doing some social

duties for society. So we also do some social duties for our society.

We will give 5% of annual net profit of business to institutions who work to help the kidney patient.


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5.1 Cost of project:Capital Requirement Amount (Tk) Amount (Tk)

Fixed Asset:

Land 20000000

Land preparation cost 1000000

Machine 30500000

Building 1500000

Delivery vehicle 1500000

Total Fixed Asset: 5,45,00000

Pre Operating Expenses:

Palm plant import &plantation cost 15000000

Start up advertising cost 200000

Total Pre operating Expenses: 17,00,000

Working capital :

Raw materials 2000000

Work in process 800000

Factory overhead 1000000

Total working capital: 38,00,000

Total capital requirement : 60,000,000


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5.2 financing plan & loan requirement:

Particulars Owner’s equity

Loan Total

Fixed Capital

Land 20000000 20000000

Land preparation cost 1000000 1000000

Machine 30500000 30500000

Building 1500000 1500000

Delivery vehicle 1500000 1500000

Pre Operating Expenses:

Palm plant import &plantation cost

15000000 15000000

Startup advertising cost 200000 200000

Working capital :

Raw materials 2000000 2000000

Work in process 800000 800000

Factory overhead 1000000 1000000

Total : 55,200,000 48,00,000 60,000,000

Percentage : 65% 35% 100%


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5.3 Means of financing:

We contribute taka 39200000 covering the cost of the leasing, Machine, Pre operating

expenses and some of working capital. A loan will be required for the rest o the

project cost.


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LoanOwner’s equity


5.4 Loan repayment schedule:

Calculation of Installment:

or,

or,

or,

Here

PV = Present Value

X= Installment

R= Rate of Interest

n= Number of Year

year Principal Amount

outstanding

Installment

Interest@13%

Principal repaymen

t

Remaining

Balance.

1 20800000 5913743 2704000 3209743 17590257

2 17590257 5913743 2286733 3627010 13963247

3 13963247 5913743 1815222 4098521 9864726

4 9864726 5913743 1282414 4631329 5233397

5 5233397 5913743 680342 5233397 0


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20800000

20800000

5913743


5.5 Profitability Projection:

Profitability ProjectionPalmate Palm Plant (Pvt.) Ltd

Prepare for the ending year

Particulars Amount (Tk) Amount (Tk)

Sales Revenues:

Palm oil/olein (75Tk@72000 Litter’s) 57,60,000

Kernel oil (140Tk@20000 Litter’s) 28,00,000

Total sales revenues: 85,60,000

Less: Cost of production

Raw materials 20,00,000

Labor 7,00,000

Factory overheads 10,00,000

Total cost of production: (37,00,000)

Gross Profit: 48,60,000

Less: Operating expense:

Administrative expense 4,20,000

Selling expense 2,00,000

Total Operating expense: (6,20,000)

Operating profit(EBIT): 42,40,000

Less:

Financial expenses 27,04,000


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Depreciation 13,55,000

(40,59,000)

Earning before tax (EBT): 1,81,000

Less: Provision for taxation (40%) (72,400)

Profit After Tax: (EAT) 1,08,600

5.6 Projected income statement:Projected income statement

Palmate Palm Plant (Pvt.) Ltd

Particulars Year -1 Year -2 Year -3 Year -4 Year -5

Palm Oil/Olein(80 Tk Per Unit/Litter)

Litter Litter Litter Litter Litter

72000 72400 72600 72800 80000

Kernel Oil (140 Tk per Unit/Litter)

20,000 22000 24000 26000 28000

Sales Revenue 8560000 8872000 9168000 9464000 1032000

Less: Cost of production

Raw Materials 2000000 2250000 260000 2270000 2280000

Labor Cost 700000 700000 700000 700000 700000

Overhead Cost 1000000 1000000 1000000 1000000 1000000

Total Production Cost

(3700000)

(3950000)

(3960000)

(3970000)

(3980000)

Gross Profit 4860000 4922000 5208000 5494000 6340000

Less:

Administrative Expenses

420000 420000 420000 420000 420000

Selling Expenses 200000 200000 200000 200000 200000

Total Operating Expenses

(620000) (620000) (620000) (620000) (620000)

Operating Profit 4240000 4302000 4588000 4874000 5720000

Less:

Financial Expenses 2704000 2286733 1815222 1282414 680342

Depreciation 1355000 1355000 1355000 1355000 1355000


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Earnings Before Tax

181000 660267 1417778 2236586 3684658

Less:

Provision for Taxation (40%)

72400 264107 567111 894634 1473863

Profit After Tax 108600 396160 850667 1341952 2210795


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Conclusion

We will start a new business company which name is Palmate Palm Plant (Pvt.) Ltd.

it is the first Palm Production & Processing Company in our country. Though it is the

first palm production and processing company, so it will create a new situation in this

sector. It will reduce the importing cost of edible oil market and fulfill the demand of

local market. Our company will also make contribution toward the economy. We can

give service to the customers quickly. We can reduce unemployment & illiteracy

problem. We will give best service low price comparing than other company. We

want to improve our society through our company.


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Bibliography

For preparing this report we did not/took any/help of primary source. We only

collected the information from some web pages and books.

Primary sources: Nil

Secondary Sources:

Web pages:

www.fao.org

www.chgs.com

www.palmplantation.org

www.hvainternational.nl

www.uga.com

www.squ.edu

En.wikipedia.org

With other web-pages searched by google.

Books:

Magazines like Malayasian Palm oil fortune VOL-4 April 2009

“Crude oil” written by Ellie Brown.Phd

Statistical Year Book of Bangladesh 2006


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Others:

A format for presenting business plan is given by Mohammad Mosharaf

Hossain, Lecturer of Dhaka City College.


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Glossary

Some short codes are used in our report as short of a long sentence. The full meaning

of those short codes is as a below

PPP = Palmate Palm Plant

FFB = Fresh Fruit Bunch

RBD = Refined Bleached Deodorized

SWOT = Strength , Weakness , Opportunity,Threats

STP = Segmentation, Targeting, Positioning

TFA = Trans Fatty Acid

BBS = Bangladesh Bureau Of Statistics

COGS = Cost of Goods Sales

CPO = Crude Palm Oil

CPKO = Crude Palm Kernel Oil

EBIT = Earnings Before Interest and Tax

EBT = Earnings Before Tax


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EAT = Earnings After Tax


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Palm production & processing

Documents

Transcript of Palm production & processing