VILLAGE-SCALE COCO FOODS PROCESSING PLANT

BUSINESS OPPORTUNITY PROJECT SUMMARY

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SOPREX Foundation
SOPREX/MIND-BIOS Bldg., MSU-IIT Campus
A. Bonifacio Ave. Tibanga, Iligan City. 9200
(063) 223-8077 / FAX: (063)2238481
 Partnerships in Local Enterprise Development
and Governance Sustainability (PLEDGES) Program

BUSINESS OPPORTUNITY PROJECT SUMMARY

VILLAGE-SCALE COCO FOODS PROCESSING PLANT

PROJECT CONCEPT:

The Project adopts the concept of a Village-Scale Coco Foods Processing Plant with a daily capacity of only 1,000
nuts as the most affordable and viable initial phase of a fully integrated community coconut central. At this initial
scale, the 300,000 coconuts raw material requirement can be supplied by as low as 20 hectares at the average annual
production of 15,000 per hectare of a fully planted and productive coconut farm. The Project shall adopt the “wet-
dry” process that eliminates the conventional copra making phase (see process flow diagram at the back page).

The Project shall involve available local technologies that are adapted to local conditions. A major departure from
conventional practice is the use of biomass, e.g. rice hull and/or corncobs, as fuel for all cooking and drying
operations. Such a set-up allows the full recovery of the economic value of the coconut shell and husk, which are
partly (in some cases fully) consumed in copra-drying and edible oil production processes. Instead of the traditional
practice that takes about 3 days of copra drying, the “wet-dry” process produces coconut oil and aflatoxin-free sapal
meal within 24 hours.

The main product lines at this initial stage include: beverage from the nutrient-rich coconut water; gata (fresh
coconut milk), virgin oil and sapal feed ingredients from the meat; and charcoal from the cocoshell. The coconut
husk supply shall initially be sold as fuel to household users and delicacy makers. After attaining stable operations
of the initial product lines, the village-scale plant shall expand operations and/or be replicated in other villages, and
the cluster shall evolve the fully integrated municipal-level coconut central. The central shall at this point
incorporate the decorticating facilities to convert the coconut husk to produce coir and peat, and grinding equipment
to produce coco flour from the sapal byproduct.

DAILY PRODUCTION:

PRODUCTS AND BY-PRODUCTS VOLUME DAILY

(1000 coconuts per day, 25 days per month) VOLUME
Sapal, Pressed Dry, for sale to livestock/poultry raisers @ 30% of granulated meat (kg) 132
Pure Coconut Milk for sale to food processors @ 33% of total volume (liters) 103
Virgin Oil @ 66% of pure milk volume, 60% yield (liters) 122
Coco Protein (Whey) @ 4% of volume of pure coconut milk processed to oil (kg) 2
Coco Uncola: @ 8oz or 239mL per bottle (Cases, 24 bottles) 42
Charcoal: @130 gm per shell and 33% yield (kg) 43
Coconut husk, initially for sale to native delicacy makers (pcs) 1,000

ANNUAL OPERATING INCOME: PhP 1.15 million

ESTIMATED TOTAL PROJECT COST: PhP 2.41 million
RETURN ON INVESTMENT RATE (R0I) /PAYBACK PERIOD: 47.7% p.a. /2.1 years

FOR MORE INFO, PLEASE CONTACT:

SOPREX Foundation The LogoTRIPhilNet member organization nearest you.

MSU-IIT Campus, Tibanga, Iligan City 9200 Contact SOPREX Foundation for this member’s contact
Tel./Fax: (063)223-8481/223-8077 person(s), agency, address and contact phones/fax.
Cell Phones: 0918933172 (Maya); 09189420065 (Yesnoy)
 PRODUCTION PROCESS FLOW DIAGRAM

WHOLE NUT

HUSKS DEHUSKING

COCONUT WATER SPLITTING

BEVERAGE PRODUCTION SCOOPING COCO SHELL

BOTTLED COCO UNCOLA COCO MEAT CHARCOALING

COOKING IN OIL GRANULATING CHARCOAL

EXPELLER COPRA EXPELLER DEFATTED

EXTRACTION MEAL EXTRACTION DRIED MEAT
(SAPAL)

CRUDE COCONUT OIL FRESH GATA

(CNO)

LOW HEAT BOILING COCO WHEY

VIRGIN OIL
 Table 1. ESTIMATE OF TOTAL PROJECT COST &FUNDING SOURCES

ITEM AMOUNT
(PhP)
EQUITY GRANT/ TOTAL %
CLIENT LOAN SHARE

I. FIXED ASSETS COST:

Land and Land Improvements
Land: 500 sqm @ P150 75,000 - 75,000 3.1%
Land Improvements: 500 sqm @ P200 - 100,000 100,000 4.2%
Sub-Total 75,000 100,000 175,000 7.3%
Buildings
Production Plant: 75 sqm @ P3,500 - 262,500 262,500 10.9%
Administrative Office: 12 sqm @
P5,000 60,000 - 60,000 2.5%
Sub-Total 60,000 262,500 322,500 13.4%
Plant Machinery & Eqpt. Inc. 5%
installation/start-up - 670,614 670,614 27.9%
Transport Equipment: 1 service pick-up - 120,000 120,000 5.0%
Office Equipment, Furn./Fixtures: 1 Lot 50,000 - 50,000 2.1%
Sub-Total 185,000 1,153,114 1,338,114 55.6%

II. PRE-OPERATING EXPENSES & OTHER ASSETS

Business Organization & Related
Expenses 25,000 25,000 50,000 2.1%
Feasibility Study & Detailed Engineering 100,000 - 100,000 4.2%
Engineering Construction Supervision 50,000 50,000 100,000 4.2%
Training & Technology Transfer 100,000 150,000 250,000 10.4%
Travel & Miscellaneous Expenses 50,000 50,000 100,000 4.2%
Sub-Total 325,000 275,000 600,000 24.9%

III. INITIAL WORKING CAPITAL (2

months) - 469,548 469,548 19.5%

TOTAL 510,000 1,897,662 2,407,662

% Share 21.2% 78.8% 100.0%
 Table 2. PROJECTED ANNUAL INCOME
GROSS SALES INCOME PESOS
Coconut Pure Cream Milk @ 30.00 per liter 924,000
Coco Uncola @ 3.50 per bottle 1,054,393
Virgin Oil: @ 25.00 per liter 914,760
Sapal @ 5.00 per kg 198,000
Coco protein (whey): @ 60.00 per kg 36,960
Charcoal: @ 5.00 per kg 64,350
Coconut husk @ 0.10 per pc 30,000
TOTAL 3,222,463
LESS: PRODUCTION COST
DIRECT COST OF PRODUCTION
Direct Materials:
Whole Nut 3.50 per piece 1,050,000
Cooking Fuel (Rice Hull) 10 per sack of ricehull 60,000
Beverage flavoring & other ingredients 0.50 per bottle 150,628
Other processing supplies 20.00 per day 6,000
Packaging Supplies
Pure Coconut Cream 1.00 per liter 30,800
Virgin Oil 1.50 per liter 54,886
Coco Uncola Bottle
Caps 0.25 per bottle 75,314
Sapal 5.00 per 50 kg sack 3,960
Sub-total packaging 164,959
Total Direct Materials 1,431,587
Direct Labor:
Factory Workers: 3
@ P90/day. 81,000
Add: 15.0% SSS, etc. 12,150
Total Direct Labor: 93,150
TOTAL DIRECT COST OF PRODUCTION 1,524,737
PRODUCTION OVERHEAD
Indirect Labor:
Mechanic/Driver: 1 @ PhP185/day. 55,500
Add: 15.0% SSS, etc. 8,325
Total Indirect Labor 63,825
Utilities:
Power: 30 kwhrs/day @ P4.00 36,000
Water: 240CM/yr @
P5/CM 1,200
Telephone/Fax 5,000
Total Utilities 42,200
Repairs & Maintenance: 2 % per year on Fixed Assets except land 25,262
Depreciation Exp.: 15 years ave. ecolife of Fixed Assets except land 84,208
Miscellaneous @ P100 per month 1,200
Total Production Overhead 216,695
TOTAL COST OF PRODUCTION 1,741,432
GROSS PROFIT 1,481,031
LESS: SELLING EXPENSES & ADM. OVERHEAD
Salaries & Wages:
General Manager: 1 @ P8,000/mo. 96,000
Bookkeeper/Property Custodian: 1 @ P7,000/mo. 84,000
Secretary/Cash Clerk: 1 @ P5,000/mo. 60,000
Add: 15.0% SSS, etc. 27,000
Total Salaries/Wages & other benefits 267,000
Other Administrative Overhead: 2% of sales 64,449
Total Selling & Adm. Overhead 331,449
OPERATING INCOME (NET BEFORE INTEREST & TAXES) 1,149,582
ROI (% Per annum) 47.7%
PAYBACK PERIOD (Years) 2.09
 Table 3. SCHEDULE OF PLANT MACHINERY & EQUIPMENT

1. Dehusking/Splitting/Scooping/Comminuting and Cocowater Collection

Dehusking/splitting/scooping tools: 2 sets @ PhP1,000 2,000
Motorized coconut granulator: 1 unit 83,780
Cocowater collection utensils: 2 sets @ PhP1,000 2,000
Sub-Total 87,780
2. Coconut Cream and Virgin/Edible Oil Production
Screw-press Expeller: 1 unit 212,400
Cooking Vats: 80-liter SS or Aluminum, 2 units @ PhP2,500 5,000
Ricehull-fired Stove: 1 unit @ PhP18,000 18,000
Cooking Equipment/Utensils: 1 Lot @ PhP50,000 50,000
Freezer: 1 Unit 25,000
Sub-Total 310,400
3. Beverage Production
Ice-maker/Chiller: 1 unit 150,000
Mixing/Pasteurizing Vat: 100-liter SS, 2 units @ PhP5000 10,000
Ricehull-fired Stove: 1 unit @PhP18,000 18,000
Manual Bottle Capping Equipment: 1 Unit 10,000
Bottles and Cases: 100 cases @ PhP125/case 12,500
Sub-Total 200,500
4. Other Machinery & Equipment
Portable Charcoal Retort: 1 unit 10,000
Materials handling/eqpt./tools: 1 set 10,000
Heavy-duty Weighing Scales: 1 Set 10,000
Maintenance & Repair Tools: 1 Lot 10,000
Sub-Total 40,000

TOTAL 638,680