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Yerevan State University

Business plan
Production of dried fruits

Ara Simonyan
Owners

The business will be family business, owners will be I Ara Simonyan and my
brother Nshan Simonyan.

History

People since ancient times have tried to preserve maximally useful elements in
fruits how its contain, for the future use .For that purpose people developed
different methods and technologies. The most common among them are deep
freezing, conservation and drying. Dried fruits are the most optimal way to
preserve the quality of fruits. Also that way comfortable as for the customer as
for the entrepreneur.

Freezing or conservated products loose its taste quality and useful elements after
a few days. We may easily keep dried fruits for a weeks and it does not require
special conditions. These interesting type of business can dօ everybody. The
significant weakness of the business is its seasonality that can scare the beginner
entrepreneurs. People do not buy dried fruits in summer as in that period the
stores and the supermarkets are full of fresh fruits. Summer it is time to produce
dried fruits and to sell the production must be done in winter. The production of
dried fruits pays off in 1 year.

Assortement and sourses of raw material

Fruits will be bought from local farmers at the lowest price. In that way there
will be savings in transportation .It is suitable to use all types of fruits for
producing dried fruits. For example apples, plums, pears, cherries, apricots- the
most popular fruit in Armenia, grapes – there are several sorts which are used in
producing dried fruit. During drying it looses ¾ of its weight. The fruits will be
acquired in whole region Armavir , mostly in village Janfida. Besides fruits there
will also be dried greens. But in our region the weather and the climatic
conditions will allow us to produce dried fruits only 6 months in a year.

Process of production dried fruits

The process of producing dried fruits include the following stages:

1. Preparation of raw materials - washing and slicing, if it necessary


2. Fruit stone removal- is a stage that needs special equipment to keep the fruits
wholly .This stage also can be done by manual labor.

3. The cooking process - up to 5 minutes, in order to preserve all the useful


specifications.

4. Drying in the dryer but we can at first dry the fruits in the air( if the weather
allows ) then we can use drying camera.

Structural parts of the enterprise

The building that will be used as workshop is located in village Janfida , but there
are some modifications that must be done in order to suit it for producing. Before
that process we must get a license to start the business. We must inform that the
building where will be performed the production belong to us and we wont do
costs for that. It will have five rooms for the workers and for equipement . It will
have water pipe, sewerage, continuous access to a three-phase network. The
building will contain the following departments:

 Department for primary processing fruits


 Recycling department
 Department for drying fruits
 Department for packing
 Department for keeping the final product

Equipments for the production of dried fruits

In spite of there is possibility to process the fruits by using manual labor, it will be
better maximally automate the process of production . Fore this purpose we will
use special equipments for dried fruits. We will acquire a few of them in foreign
countries.

1. Truck for transporting production

2 Weighing-machine
3. Packaging to keep the product

4. Knives for cutting fruit

5. Baths for washing products

6. Hermetic packaging for finished production


7.Modern drying camera and the trays for drying
8.Packing machine
Packing of products

Finished product will be sold in hygienic and hermetic packages. There will be
advertisement on the packages which will increase sells volume .In order to make
sure customers that the product is ecologically safety there will be way and shelf
life of keeping dried fruits.
Market research
There are great demand for Armenian dried fruits not only in Armenia but also in
other countries in Russia, Ukraine, Iran France. In spite of that greet demand
Armenia imports 3 times more dried fruits then exports.
There are 5500 dried fruit producers in Armenia but only 20 of them are large
producers (up to 5 ton a year). They totally exported only 40 ton dried fruits in
2016 which is too little for Armenia because it has a big potential in this area.
In case of a reasonable organization the production of the dried fruits can bring
great benefits in Armenia.

Product sales and business prospects

The product will be sold in the markets of the cities, also we can negotiate for
permanent delivers to supermarkets and food stores. We will export the product
to other countries, especially to Russia where we already have our contracts.
We will enlarge our production if we have a success in future.
The risks of that business

We have risks deal with this business at an early stage but there are actions
against the risks we must take into account :
1.The lack of the harvest and the seasonality : in order to escape from this
problem we must take care about presence of the row materials beforehand.
2. Price reduction: sales contracts must be prepared in advance.

Financial analysis

We do not spend money on acquiring the building because we have the area to
start our business. The other costs are:

Costs for equipments:

Modern drying camera and the trays for drying – 1500000 AMD
Packing machine – 1800000 AMD
Truck for transporting production – 2000000 AMD
Modification of the building – 2500000 AMD
Other costs – 500000 AMD
Total – 8300000 AMD
Salary to staff :

There will work 4 workers during 6 month , 25 days per month and they will get
5000 AMD a day
Total salary will be - 4x6x25x5000=3000000 AMD

Acquiring row materials

We can get 170 g dried fruit from 1kg fruit, consequently we will get 1 kg dried
fruit from 5 kg fruits
We will manufacture 100 kg fruits a day, during 6 month we will manufacture –
100x25x6=15000kg
The average price for per kg fruits is 200 AMD
Total cost of all row materials will be 15000x200=3000000 AMD

We will get 3000 kg dried fruits from 15000 kg fruits. Average price for dried fruit
is 4000 AMD per 1 kg. Our profit will be - 3000x4000=12000000 AMD.