Co operative business plan group-1

Business Plan

Cane Farmers Co-operative Cane Farmers Co-operative SocietySociety

Cane Farmers Co-operative Society 2

Executive Summary Introduction Purpose & Objectives Business Plan Struture of Co-operative Technical Analysis Production & Value Chain Analysis Marketing Strategy: SWAT Financial information Conclusion

Introduction


1. Huge need of co-operative in this area as the farmers do not get what they deserve like price etc. 2. The sugar mill owners have always an upper hand than farmers. 3. Co-operatives have capacity to influence because they have a good number of farmers and sufficient

quantity of produce. 4. Market failure, high loss of farmers duo to fluctuation of demand and supply of sugarcane

Why this Co-operative ??Why this Co-operative ??

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PURPOSE & OBJECTIVES

Ensure regular market and remunerative prices for their crop to small and marginal sugarcane farmers

Increase sugarcane farm productivity Promote local food and livelihood security in drought-prone region by

developing alternative irrigation systems for crop diversification Promote farm value-addition through processing of sugarcane and

industrial use of byproducts leading to improved incomes of small farmers

Invest cooperative income from value-addition and industrial diversification to improve living standards of the

local community by establishing health care, education, credit and transport infrastructure

Business Plan Farming a Co-operative Society with sugarcane farmers: Cane

Farmers Co-operative Society. Co-operative Society as three tier structure State, District And Village

level. Dist. Union collect and processed the sugarcane from village level

society members. Society produce Different type of Jaggery, Sugar and some other

value added products. State level Federation will responsible for marketing of these produce

and assessing in decision making. If Co-operative Society will make the profit, it will be divided in its

active members as patronage refund.


Value Chain Analysis &Production


Struture of Co-operative

Cane Farmers Co-operative Society has three tier structures for collecting of sugarcane and processing from its member farmers:


State co-operative Federation

Co-operative Union

Vill:1Vill:1 Vill:2Vill:2 Vill:3Vill:3 Vill:4Vill:4 Vill:5Vill:5 Vill:6Vill:6 Vill:7Vill:7 Vill:8Vill:8

Technical Analysis Soil and ph---Sandy loam and clay & 6.5 Irrigation facilities---Tube wells, bore wells, canal Variety---CoS 95255, CoS 96268, CoS 88230 Raw materials---good quality matured sugarcane, jute gunny

bag. Storage facility---Self-owned warehouse Transportation---Farmer’s field and warehouse are well

connected to major parts and roads are in good condition. Farm machinery---double roller, sugarcane crusher, steel pan

for boiling, etc.



Marketing planPRODUCT

Jaggery, Sugar, Value

added products

PRICEJaggery (Rs. 20 to 40/ kg), Sugar (Rs. 30 to 45/ kg),

Value added products (Rs. 5

to 200/ kg)

PLACE

Rural, Urban and Global

Market

PROMOTIONNews Paper,

Personal selling, TV, Banner &

poster, Discount


SWOT

ThreatOpportunities

WeaknessStrength


Financial information

Projected balance sheet for the end of the first year‘s trading

A projected profit and loss account for the first five year

A cash flow forecast for the first five year Break-even analysis (number of units the business needs to

sell or the sales turnover needed to cover the overheads

ACCOUNTING FINANCIAL


Start-Up Expenses Amount (Rs.) Start-Up Assets Amount (Rs.)Survey 50000 Land & Building 200000

Salaries & Wages 120000 Plant & Machinery 300000Rent Deposit 30000 Furniture's 110000

Insurance Premiums 10000 Vehicles 450000Office Supplies 70000 Other Fixed Assets 50000

Adv. & Promotions 20000 Total Start-Assets 11,10,000License 5000 Total Required Cost of Project

Other Initial Cost 10000 Total Start-Up Expenses 430000Operating Capital 575000 Total Start-Assets 1,570,000

Total Start-Up Expenses 890000 Total Cost of ProjectTotal Cost of Project 20000002000000

Cost of ProjectCost of Project

To date, the Co-operative have come out of pocket from equity approx. Rs. 10,00,000 or 50% percent of the project’s total costs. The following chart summarizes the source of funds:

Source of Funds Source of Funds

Source Amount (Rs.)Members Equity 1000000Long Term Loan @ 12% 600000Short Term Loan @ 15% 400000Total Source of Funds 2000000

Financial Analysis


1. Cane co-operative is financing 50% by member equity and 50% by bank loan.

2. Cane Co-operative invest in fixed assets Rs. 11,10,000 and other start-up expenses is

Rs. 8,90,000

3. So, Total required of fund is Rs. 20,00,000 which will be financing 50% by its

members and 50% by Bank loan.

4. In first year, total cash inflow goes on Rs. 15,30,000 and cash outflow on Rs.

14,45,500

5. So, operating cash balance in 1st, 2nd, 3rd, 4th, 5th & 6th year is Rs. 84500, 474350,

967685, 1566014, 2277167, 3105466.

6. Net Present Value at the discount rate of 15% of the project is (-124538) and IRR is

38%

Financial Analysis……Cont… Cane Cooperative are generating total revenue in 1st year Rs. 1530000. Total expenses of Cane Cooperatives is Rs. 1340500. After deducting interest and taxes , Cane Cooperatives have net profit of Rs.

67600 in 1st year. Similarly, In 2nd year , net profit will Rs.311000, in 3 rd year it will Rs. 400000,

in 4th year Rs. 478000 and in 5th year it will Rs. 569000. In one quintal sugarcane, we are producing brown Jaggery of 12kg, white

jaggery of 4 kg, sugar 2kg and Gabage 82 kg with the selling price respectively Rs. 2600,2700,2900 and 200.

So, average total price of produce in quintal is Rs.642. Whenever average variable cost of one quintal sugarcane after processing is

Rs. 395 per quintal. Contribution margin is 247 and contribution ratio is 0.38 Fixed cost of project is Rs. 1110000. So, Break Even Point (BEP) is 29 lakh approximately which Cooperative will

achieve in 5th year.Cane Farmers Co-operative Society 14


As the demand of sugar in rowing, the sugar industry faces a positive supply pressure. This coupled with recent freedom provided by the government would create a favourable environment for the company. The company is already doing sufficiently well and also took several initiatives for further improvement. It should try to adopt newer technologies to stay ahead of the competition. In addition to this, it should constantly look for adding to the value provided to customers. This requires a dedicated marketing and consumer research activity set. The company should also work on strengthening its internal operations and try to develop new business models (such as integration).


PRESENTED BY:

Aachintya Damera (12201001)Abhishek Singh (12201002)

Anoop Kumar Mishra (12201005)Chandra Prakash (12201011)

Suvrojit Choudhury (12201043)