BusinessPlanforKamadIndustries

Under supervision
Of
Sir Fraz Shafique

Presented by:
Ifzal Ahmed BBA-FA05-09

Sheraz Ashraf BBA-FA05-25

Fehmina Khurshid BBA-FA05-05

Hajrah Fazal BBA-FA05-29

COMSATS Institute of Information technology,

Lahore
 Executive Summary
We students of BBA batch 4 from COMSATS; under kind supervision of Sir Fraz Shafique
started to work on new and innovative ideas that have not been done before in Pakistan before.
As a step towards growing entrepreneurship in Pakistan we students of COMSATS have a
tradition to present our new and innovative ideas in front of people which could benefit the job
situation in Pakistan and so that we could become job givers not job beggars.

Sugarcane Juice industry is a business idea that deals is products. Our product is sugarcane juice
in tin pack or pet bottles. Sugarcane juice is widely used in summer season because of its taste
and low cost. But the problem with this is that it cannot be preserved for long time. The
methodology used in Pakistan is quite old and so people normally don’t go for this sector
because of the risk of low shelf life. But increasing technology and research has made it possible
and now in many of countries it’s produced on commercial basis and their sales are quite high
especially in Middle East countries. This juice is widely used in hot weather conditions. Pakistan
is the fifth largest producer of sugarcane still there isn’t any method of preserving this juice.

Only methodology being followed utilisation of aqueous ammonia as a preservative for sugar
cane juice the full process is explained in final report. Ammonia (28% NH3 w/v) at levels of 15
or 20 ml per litre of cane juice successfully preserved the juice and also supplied the necessary
nitrogen for rumen fermentation of this energy source. Palatability of the treated juice was not
apparently affected. Secondly it can be preserved by the use of sodium benzoate and ammonium
hydroxide (aqueous -nh3) as preservative for sugar cane. Experiments were carried out with
sodium benzoate and aqueous ammonia (28.2%NH3), the objective being to stop spontaneous
fermentation of sugarcane juice. It was found that sodium benzoate at a concentration of 0.05%
was sufficient to stop fermentation for 2-3 days; 0.1% was necessary to conserve the juice for 6
days. The concentrations of aqueous ammonia necessary for the same periods of preservation
were 0.32 and 1.28% (0.08% and 0.32% NH3.

The supply of sugarcane is not a big problem because Pakistan is the fifth largest producer of
sugarcane

Our initial product to start is 250ml sugarcane juice cotton pack, 500 ml tin pack and 1 liter pet
bottle. Future prospects are of addition in product line and setting out executive distribution
channels, and plans are for exporting to KSA market in future.
Industry Environment
Overview of the industry

Our business is the part of fruit & vegetable industry of Pakistan. Agriculture is the largest
income and employment-generating sector of Pakistan’s economy. About two third population of
the country resides in rural areas and directly or indirectly depend on agriculture for their
livelihood. The sector provides raw materials to the industrial sector and is an important source
of demand for its products. The past experience shows that periods of high/low agricultural
growth have generally coincided with periods of robust/poor performance of the national
economy. Currently juice industries are in high profits because of the demand for the products
and the climate conditions. However there are areas which has not been catered before such as
sugarcane juice this is because generally people perceive that its can not be preserved for long
time so they don’t go for the use of technology and research for catering and taking benefits from
this wrong perception.

Top Ten Sugarcane Producers — 11 June 2008

Country Production (Tonnes)

Brazil 514,079,729

India 355,520,000

People's Republic of China 106,316,000

Thailand 64,365,682

Pakistan 54,752,000

Mexico 50,680,000

Colombia 40,000,000

Projected position for the future

Because this potential areas has not been catered before so it will give us a new and distinctive
name in the market and similarly we can extend our product line to other existing products once
the goodwill and reputation is build in the market. Although optimum level of benefit of these
natural resources has yet to be achieved, the volume of production is growing every year as the
area under cultivation has been increased by manifold. The ever growing demand of Pakistani
sugarcane juice in summer season suggests that there is a need to further increase productivity,
introduction of new varieties of fruit juices to maintain affordable prices at home and to get
exportable surplus. Supply of raw material may not be a big problem because there are lots or
areas in Pakistan which are the largest producers of sugarcane the only problem we may face is
ensuring that shelf life of juice is maintained and a distinctive market position is build in
customer’s eyes.

Potential customers

Our potential customers will be every kind of individuals however we will segment our market
on the basis of their priorities and attitudes towards hygienic products. Initially to minimize our
risk we will cater only markets in Lahore then depending upon the demand and our finance
capacity we will expand our production and distribution to other major cities of Pakistan. Our
customers will be:

• Students at every level (from school level to universities)

• Employees who work the entire day in hot conditions

• Households, Passengers

In summer season every kind of people with no age limit use this juice but because of unhygienic
products most of people avoid this. We will specially target those kinds of people. Initially we
will only limit our geographical scope to Lahore and then after initial success we will expand our
target segments. We expect that we will cover almost 30%-40% of Lahore’s population which
could be almost one to two million we expect that out of these 30%-40% we will capture 60-
%70% of the market. Which will be a big success for us initially and as time passes and business
prosper will we will be able to cover and capture the remaining potential market. Similarly
almost every second person that goes to job and have medium salary and maintain good living
status will be our potential customer.

Direct competitors

We don’t have direct competitors in our product however in substitute products we have mainly
big guns like:

Nestle Shezan Country juice others

Market Share 27.7% 31% 19% 22.3%
Source: google.com
Marketing
Business opportunity

This is a business plan of a partnership firm in the name of sugarcane juice. The plan is to
process and market the precious sugarcane juice. First time in Pakistan, juice will be preserved in
tin pack keeping them as fresh as at time of extraction. Till now market deals in fresh fruit juices
which can be easily preserved however this idea has not been catered yet. Canned sugarcane
juice will be sweet as fresh fruit. Firm plans to start a processing plan near. Processed and packed
finished fruits juice will be temperature resistant and thus able to be transported to market for
sale initially. Firm will hold a warehouse, production plant and office in Lahore.

Company impact

This is quite a new idea which has not been yet commercialized because of the lengthy and risky
procedures of preserving this juice. This juice is widely used because of its sweet taste and being
a solution to different health problems. The cost of production and raw material is not so much
high while sales may be expected to be high because of its greater utilization. It needs not to be
marketed so much because it’s a new thing which people will try and love a lot. Simply we can
place it on universities cafeterias, gourmet franchises and grocery shops, the only thing we must
do is to ensure its shelf life and long preservation time.

Company strategy

In first year, our company, will market in Lahore in the three segments described in the report.
Lahore will be the sole market for first year. Then looking through our sales history we will
expand our business opportunities to other big cities of Pakistan. More products that will be
processed in same way and will be included in product line after making a good repute in the
industry. Initially our company production line is based on semi-automatic techniques but hi-tech
extension is planned in future.

Benefits matrix

Customer Pain Points Benefits

Already developed distribution system we only

need to make a well repute to launch and Easy distribution
familiarize our products

Availability throughout the year No shut down if season is off

Easily available sugarcane in large quantity Low cost of production

Operations
Organizational structure
A Kamad industry is an organization that will be legally formed as partnership firm. The partners
will be Ifzal Ahmed, Sheraz Ashraf, Fehmina Khurshid, and Hajrah Fazal. Each partner will
contribute 25% as initial investment in business. Land and building will be initially taken on
rent.

Key Management Personnel

4 important departments will be there:

Purchasing and Logistics

Mr. Sheraz Ashraf with one assistant (employee) will be responsible for all operating material
purchases at best possible rates and delivering at the appropriate time, use of Just in time
inventory.

Production and Financial operations

Mr. Ifzal Ahmed will be responsible for quality production process. He will also be responsible
for financial records and accounting. Mr. Ifzal Ahmed needs the following staff at the plant in the
process.

Process workers (7)

Marketing

Miss Fehmina is our marketing researcher. She along with assistance of Hajrah is responsible to
design promotional campaigns and do art work for advertisement. Their main task is to work in
celebration with sales department to create demand opportunities and find out new market
segments.

Warehouse Management and sales

A separate employee will be hired which will be responsible for managing finished good
inventory in Lahore Warehouse and office and to generate sales as per decided and approved
credit terms from financial department.

Core operations
Machinery Required

Sugarcane juice is a very delicious drink during summer, contains many minerals and has
nutritive value. It is a major constituent of glucose and sugar. Glucose being a major stamina-
enhancer, sugarcane juice is a pure and natural refreshment and is available in every town and
city. This juice can be easily preserved with its taste and aroma remaining intact. It can be sealed
in container and transported to places where sugarcane is not available or is too costly. Sugarcane
juice has good export potential and good marketability as consumption of juice is increasing in
various countries. In Pakistan there are no as such units engaged in the preparation of sugarcane
juice. A new entrepreneur can enter this field, as there is good potential for market and export.
Option 1:
Plant & machinery: Rs. 20.30 Lakhs
Plant capacity: 4000 Ltrs/Day
Working capital: Rs. 23.31 Lakhs T.C.I: Rs. 70.11 Lakhs
Return: 47.22% Breakeven: 49.12%
Option 2:

Capacity: 100,000 x 200 ml packs/year

Total investment: Rs. 1.50 lakh

Basic Methodology
The utilization of aqueous ammonia as a preservative for sugar cane juice

Materials and Methods

Aqueous ammonia (28% NH3 w/v) was mixed with 500 ml batches of freshly extracted sugar
cane juice at levels of 0, 0.5, 1.0, 1.5, 2.0, 2.5 and 3.0% (w/v). The mixtures were left at room
temperature in sealed glass containers for a 7 day period to measure changes in pH and Brix of
the juice.
Results for pH and Brix during the 7 days after treatment are shown in Table 1. It gives the
trends in these measurements for aqueous ammonia levels of 0, 0.5, 1.0, 1.5 and 2%. Results for
higher concentrations were identical to those for 2% aqueous ammonia. It is obvious that
ammonia works well as a preservative, especially if fairly high
Levels are used. At levels above 2.0% w/v, the juice becomes less palatable for cattle and in such
situations it should bereft to stand until the excess ammonia dissipates. It has been suggested by
Leng and Preston (1976) that the optimum level of available nitrogen in the rumen to ensure
optimum synthesis of microbial protein is 3 g N/100 g of fermentable organic matter. Taking the
case of cane juice at 14 Brix, then this would require about 1.5% (w/v) of aqueous ammonia (28
% NH3 w/v) in order to provide the required amount of available nitrogen for microbial protein
synthesis. Cane juice of higher Brix content would need proportionally more ammonia - N. In
the experiment reported here, the inclusion of from 1.5 to 2.0% aqueous ammonia in the sugar
cane juice, thus provided the necessary amount of N for rumen synthesis of protein and also
preserved the juice for over 6 days.

Use of Sodium Benzoate and Ammonium Hydroxide (Aqueous -Nh3) As Preservative For
Sugar Cane

Materials and Methods

Additives: Two experiments were carried out with sodium benzoate under aerobic and anaerobic
conditions respectively. The levels of sodium benzoate used were 0, .01, .02, .03, .04 and .05%
(v/v) in Experiment 1 and 0, .05, .075 and .10% in A third experiment was carried out with
aqueous ammonia (28.2% NH3) using levels of 0, .32, ,64, .96, 1,28 and 1.6% (w/v). 346 Trop
Anim Prod 1981 6:4
Procedure: The sugar cane juice was extracted from freshly harvested sugar cane stalks using a
3-roller sugar cane press (McKinnon, Aberdeen, Scotland). The juice was immediately sampled
and these samples taken to the laboratory and distributed among flasks of 100 ml. Two replicates
per treatment were used and flasks were maintained sealed at an ambient temperature for 6
consecutive days. pH and Brix were recorded every 24 hours ( Brix was taken as a measure of
the concentration of total soluble solids in a sample).

It appears that a concentration of 0.05% sodium benzoate in the juice was sufficient to conserve
the sugars in the juice for 2 or 3 days; however preservation for up to 6 days required a higher
concentration of 0.1%. The concentration of aqueous ammonia necessary to preserve the juice
for up to 2 days was 0.32 %( 0.08% NH3) and in order to preserve the juice for up to 6 days 1.28
%( 0.32% NH3) was necessary. Even at the higher concentration there was some degradation of
the sugars (approximately 10-15%). The pH of the juice dropped slightly from 4.5 to 3.5 during
the first 24 hr, independent of the concentration of sodium benzoate. The pattern was quite
different when aqueous ammonia was used; in this case the pH rose to between 8 and 9 when the
preservative was added, afterwards falling to around 3.5 after 3 days. There was a slight
indication that fermentation proceeded more slowly under anaerobic conditions.
Sodium benzoate was a more economic preservative than aqueous ammonia, the prices at present
in Dominican Republic being US$ 4.4/kg and US$7.2/ liter respectively (equivalent to US$ 4.40
and US$ 112.00 per 1000 liters of juice preserved).
The concentration needed will depend on the storage time required, that is, 0.05% for 48 hr,
0.075% for 72 hr end 0.10% for a longer period. It is suggested that containers used for juice
storage should be sealed to stop the entrance of air. This methodology is already been used in
Dominican Republic, Middle East and India and has been successful because of the weather and
climate conditions. However we haven’t seen a big brand in this area so it can be a big potential
for us. We can also export it to the neighboring countries.

Investments and Projected Financials

Initial Investments
Business will be started with total capital of Rs 5,000,000. Each of the four partners will
contribute 25%. Land and building will be taken on rent initially. Ifzal Ahmed will manage all
major activities and financial aspects as team leader.

CAPITAL INVETMENTS

Investments Rupees

Security payment for 10 Marla building 100, 000

Plant & machinery 2,030,000

Labeling Machine 45, 000

Can lid sealing machine 55, 000

Working capital 2,331,000

Total 4,561,000

Miscellaneous 5, 000

Total 4,567,000

OPERATING INVESTMENT BEFOR EARNINGS

4 months rent of plant building 80, 000

Wages for approx 2.5 months 50, 000

Approximate initial recruitment cost 10, 000

Initial utility bills 20, 000

Total 160,000

Surplus (5,000,000 – 4,727,000) 267,000

Surplus will be used to purchase operating material supplies for starting production.

Projected Financials
Initial capacity of the firm is to process approx 2000 litres in a day. And 4000 cans in a day. One can (550
grams) costs Rs 20 including all operation costs and will be sold at price of Rs 35 with profit of Rs10.
Capital investment will be recovered in one year operations on sale of 137,140 units. First year expected
sale revenues will be 150,000 units. This means first peak season can recover our initial capital
investments to some extent.

Cost of Goods Sold

CGS contains costs for following material

Bottles or tin whichever is low

Label

300 gram apricot

Sodium benzoate US $ 4.4/kg, 9000 per 1000 litres of juice preserved

HR Cost Calculation:

• 6 seasonal workers hired for 4 months will be paid Rs. 6000 per month.
Total HR cost

This all will cost as follow:

6000*4*12= 288, 000

Rent and Administrative Expense:

• Rs 25, 000 per month for 10 Marla building near Iqbal Town
• Rs 2, 000 per month is approximation of administration expenses including utility costs

Projected 1st year end compressed Income Statement (amounts in thousands)

 Sales 5,250

Less: Cost of Sales 3,000

Gross Profit 1,750

Less Operating Expenses:

Rent expense 300

Distribution expense 100

HR expense 288

Administrative expense 24

Net Profit before taxes 1138

* In projected financials we ignored effect of by-product (kernel) income.

Costing per unit

Tin and lid or bottles 8(may

vary)

Sugarcane 5

Label 2.5

Sodium benzoate 4.5

Total Cost per Unit 20

Cost-based pricing will be adopted and we will set a price of Rs. 30

Retail price will be Rs 35. (Rs 5 will be margin of retailer)

References

• A NOTE ON THE UTILISATION OF AQUEOUS AMMONIA AS A PRESERVATIVE

FOR SUGAR CANE JUICE IN RUMINANT DIETS
 F Duarte, A Mena, R Elliott y T R Preston
Facultad de Medicina Veterinaria y Zootecnia, Un Universidad de Yucatan, Apdo.
116-D, Merida, Yucatan, Mexico

• THE USE OF SODIUM BENZOATE AND AMMONIUM HYDROXIDE (AQUEOUS -NH3)

AS PRESERVATIVE FOR SUGAR CANE
Milagros Bobadilla and T R Preston2
CEDIPCA, CEAGANA, Aptd 1256/8, Santo Domingo, Dominican Republic

• Sanchez M & Preston T R 1980 Sugar cane juice as cattle feed: Comparison with molasses in the
presence or absence of a protein supplement Tropical Animal Production 5:117-124

• NIIR PROJECT CONSULTANCY SERVICES (NPCS),

106-E, Kamla Nagar, Delhi-110007, India.
Email: npcs.india@Gmail.com • Website: NIIR.org • Tel: +91-11-23843955, 23845654,
23845886 • Mobile: +91-9811043595 • Fax: +91-11-23841561

• Agha khan rural support program

Electronic References

• www.Break-Day.com/Crusher_Machine
• www.freshpatents.com
• www.Patentstrom.com