Business plan for the expansion of the Philippine Carabao Center dairy processing plant from 200 liter to 500 liter capacity in General Trias, Cavite

Date

2010

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Faustino Q. Arrienda II

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Abstract

The Special Problem report entitled Business Plan for the Expansion of the Philippine Carabao Center Dairy Processing Plant from 200Liter to 500Liter Capacity in General Trias, Cavite aimed to determine the viability and profitability of establishing a processing plant in General Trias, Cavite. Specifically, it aimed to present the project concept and planned area of operation involved in putting up a dairy processing plant; determine the market, production, organizational and financial viability of operating the plant in Gen. Trias, Cavite; recommend specific courses of action based on the findings of the study; identify the technical/ operational requirements of establishing the processing plant and determine the organizational structure and management system requirements of operating the new processing plant. Primary data were gathered through personal interviews, telephone inquiries and site observations. The data regarding the technical aspect such as required equipments for the new plant were sourced from the Director of the PCC, the main coordinator of this project. On the other hand, secondary data were obtained from the different agricultural agencies, institutions and associations such as Bureau of Agricultural Statistics, Department of Agriculture, National Dairy Authority, and the Philippine Carabao Canter. The new processing plant will operate as a commercial-scale processing plant with 500 liters capacity and will use GenTri‘s Best: Gatas ng Kalabaw as its brand name. The raw milk will be supplied from the farmers and other cooperatives near the processing plant. The products will be distributed to Mr. Moo‘s, subdivisions in the area, school canteens and retail stores. Promotional strategies will be conducted to promote the product and attract customers. Since the plant will be located along the high-way walk-in customers are expected to increase in number. Also, it will operate as cooperative-type but will hire a plant manager for effective and efficient management of the plant. Processors of the cooperative will undergo a training and seminar to enhance their skills regarding the operation of the business. Net Present Value (NPV), Internal Rate of Return (IRR) and Payback Period were used to determine the financial viability of the project. Using 14% as the rate of return, the Base Scenario yielded an NPV equal to 5,312,295.12778549, IRR of 24% and Payback Period of 2.7 years. Using sensitivity analysis, Scenario 1 has an NPV of 3,989,883.24, IRR of 22% and Payback Period of 3 years. Scenario 2 has NPV of 8,939,727.00261579, IRR of 29% and Payback Period of 2.6 years. In Scenario 3, however, the project resulted to a negative NPV of -4,834,854.87775461, IRR of 1% which is lower than the rate of return and Payback period of 4.5 years. This means that the project is not viable when subjected to decrease in revenue along with an increase in its raw material prices.

Language

English

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2010 M17 L67

Document Type

Thesis

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