Chapter III

THE FEASIBILITY STUDY

This chapter presents the feasibility study of the proposed Lambanog Manufacturing in General Santos City. It includes the management and organization, marketing, technical and financial evaluation of the study.

3.1 Forms of Business OrganizationOwnership means the legal title to a thing or control over

the thing owned, the right possession and disposal. In business enterprise, ownership means title to and possession of the assets of the enterprise, the power to determine the policies of the operation, and the right to receive and dispose the proceeds.

In partnership form of organization, partners merely outline the activities and they can start the operations, so it is easy to form as the single proprietorship, there are more persons to conduct the business and to handle its problems. However, disagreement between partners sometimes leads to delay and difficulties, which

could endanger the enterprise. In addition, death, insanity, and insolvency of a partner automatically dissolve the partnership.

For the proposed business, a partnership form of is more suitable considering the size of the business and the capitalization required to operate. The partnership will be composed of five partners who will contribute equal amount of capital. If the need arises to change the form of ownership into a corporation, such may be adopted to suit the needs of the business.

3.2 Organizational StructureThe organizational chart communicates the formal

structure of the business. It conveys how the authority and responsibility are delegated throughout the organization. It tells who has the authority over whom and who reports to whom. Figure 2 presents the organizational chart of the proposed Lambanog manufacturing company.

3.4 Personnel Duties and ResponsibilitiesThe duties and responsibilities of each personnel are

presented in table 4.Table 2

Personnel Duties and ResponsibilitiesPosition Duties and Responsibilities

General Administrative and Selling Supervisor

Manages the business; formulates and executes policies. Over all supervisor. Determine the marketing plan.

Production Supervisor Supervises production and quality control.Accounting Clerk Records, classifies and summarizes accounting matters.

Handles all monetary disbursements and receipts. Take care of other clerical works.

Warehouse Clerk Stores all finished products, raw materials, and supplies. Schedules delivery of goods to buyers.

Salesman In charge of product distribution and selling. In charge of products promotional activities.

Driver Does loading and unloading of raw materials and finished products. Does the delivery of the product.

Mangagarit/ Mananaggot(tappers)

Does the climbing/collection of coconut from trees Transferring of coconut sap to containers

Tagaluto(Distiller)

Manages the fermentation and distilling process Skims the upper layer of tuba of floating impurities Maintains the cleanliness of the machinery

Bottler/Packer/Cleaner

Bottles the lambanog from distillation Packs bottles in boxes Checks final product

Security Guard Keeps the vicinity safe. Safe guards the properties, employees and vicinities

The mangagarit/manananggot climb the trees without protective harnesses to prune the coconut flowers before they turn into fruits. The sap is allowed to drip into bamboo receptacles. Like high-wire performers, the tappers navigate a network of bamboo bridges connecting the trees nine metres (30 feet) above the ground, with blades on their waists and bags tightly strapped to their shoulders. Pruning is mostly done in the afternoon, and the climbers return at dawn to collect the liquid. Farmhands then deliver the sap to the distillery in big plastic containers that are carried behind their backs or on pack horses.

General Accounting

Clerk

Salesman

Stock/ Warehouse

Clerk

Drivers

Production Supervisor

Fermenting

Figure 2. Organizational Set-up (Chart)

Bottler/ Packer/ Cleaner

Mangagarit/ Manananggot

(tappers)

Security Guards

Tagaluto (Distillers)

General Administrative

and Selling Supervisor

Storing

Production Process

Transferring to Fermentation

Vats

Packaging

Receiving

Collecting

Transferring and Holding

Distillation

3.5 Personnel Salary Structure

The Personnel Salary Structure is presented in table 5.

Table 3Personnel Salary Structure

(For 1 month)Position Minimum

Rate

Total (PhP)

General Administrative

and Selling Supervisor

33/hr 16,000.00

Production Supervisor 62.5/hr 13,000.00

Accounting Clerk 50/hr 12,000.00

Warehouse Clerk 41.67/hr 10,000.00

Salesman 41.67/hr 10,000.00

(Tagaluto, Bottler,

Packer/Cleaner)

33.33/hr 8,000.00

Driver 25/hr 6,000.00

Magagarit 250/day 7,500.00

Security Guard 25/hr 6,000.00

3.6 Summary of Pre-operating Activities

The summary of pre-operating activities is presented in table 6.Table 4

Summary of Pre-operating Activities

Cost Percentage

Rent 5.47%

Labor:

Installation of bamboo bridges

Tapping

Hauling

Distillation

Transporting the product

69.77%

3.99%

81.16%

2.08%

11.29%

1.48%

Transportation 3.98%

Supplies and Materials 13.94%

Tools and Equipments 0.39%

Bank Charges 3.57%

Depreciation 2.10%

Repair and Maintenance 0.30%

Business Tax 0.48%

CHAPTER IVMarketing FeasibilityThis chapter presents the marketing feasibility which includes the target market, market size and trends, competition and estimated market share. This chapter also includes the sales and distribution strategy, pricing strategy and promotion strategy of the proposed business.

4.1 Market Research and AnalysisIn establishing a lambanog manufacturing, market research and analysis is an important consideration that would help the business itself. The market research and analysis entails the knowledge of obtaining the target market, market size and trends, the estimated market share of the proposed venture and the competition in the market.

4.1.1 Target MarketThe main target markets of Lambanog Manufacturing are those alcoholic-drinkers from General Santos and other cities who would like to experience different flavors of lambanog that they never tasted before. The market of the proposed venture can be extended to the people of General Santos City who would prefer to buy and avail the products comprising of inhabitants of General Santos City who belong to the class A, B and C. According to the Philippine income classification for provinces, cities and municipalities General Santos City (Dadiangas) is a 1st class highly urbanized city. The urbanization status of General Santos City (Dadiangas) is classified as partly urban (Philippine Islands 2010).

Economic class A refers to those people who are considered upper-class earners in the society. They earn above Php150, 000 a year. Class B are those people who belong to the middle class that are able to live a satisfactory life. They earn over Php100, 000 but not over Php150, 000 in a year. Economic class C refers to those people who have less purchasing power compared to the other two classes. These people earn over Php50, 000 but not over Php100, 000. These economic classes include businessmen, executives, professionals, blue-collar workers and other employees. The total population of people who belongs to the age of legal majority is 303,994 based on the year 2010 which inludes the classes A, B and C. Since General Santos is a city, alcoholic-drinkers are present in the community who has an income and has a capability to buy and consume lambanog products.

4.1.2 Market Size and TrendsThe market size and trends refers to the total population of the lambanog industry in General Santos City excluding the transportation industry and the latest status and trends in the target market. This will determine the actual number of target consumers of the proposed company’s market. It projects the possible customers that will primarily serve as basis for possible sales and provides definite market segmentation for the company itself.

Based on the National Statistical Coordination Board (NSCB), there are 303,994 legal aged person in General Santos City are considered as the market of the proposed study since alcoholic drinks are not available and prohibited among children.

4.1.3 The CompetitionThe proposed business will be competing with the existing liquor industry. More specifically, the bars and lambanog established in General Santos City, which is closely related to the proposed business. Currently there are a lot of competitors taking into account the target market that the business intends to serve. Lambanog will enter into a market characterize by monopolistic competition. This is a common market structure where many competing producers sell products that are similar but

differentiated from one another. There are zero barriers to enter and exit and producers have no degree of control over price.

4.1.4 Estimated Market ShareOur share in the marketplace is estimated to 10% of the total market. This 10% will be from the consumers who are still patronizing lambanog products as the native product of our country. In the current generation, many bars and discotheques exist which provide entertainment as well as the fresh musics and latest alcoholic drinks that this generation loves which made their share almost a half of the total market share. These establishments are the ones whose influence in the industry is materially incomparable. It means that the control over the target market is coming from a fairly plenty completion. Although this fact exists, there are still advantages that the proposed business differs from the other competitors.

4.2 Market StrategyThis strategy will includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives.

4.2.1 General Description of the productThe business will have distinct feature, style, and quality of product to the customers. Lambanog is an alcoholic beverage known for its potency (it is sold in 80 or 90 proof variations). The lambanog making process has been a tradition passed down through generations of coconut plantation. Because of its long history as a cottage industry product, lambanog is still beginning to gain worldwide recognition. Also, in an effort to increase its appeal to people of all ages, it is now marketed in several flavors: mango, blueberry, bubblegum, cinnamon, etc.

4.2.1.1 Brand NameKokos Wein is a German word which means “Coconut Wine.” A few ounces of lambanog is an experience. While most would compare it to vodka, it’s actually a local version of the Asian alcoholic beverage called arrack, which is based on fermenting coconut sap (Arrack could also be the root word of alak, the general term of alcohol in Filipino).

4.2.1.2 Product FeaturesTo many rural people, swigging lambanog is part of celebrating life, culture, and tradition. Recently, there are claims that local fruit wines help improve health as the fruits used in the blends reportedly have curative effects. Duhat and bignay, for example, can supposedly help cure diabetes and reduce high blood pressure.

4.2.1.3 Product StyleThere is a wide variety of lambanog: Pure and Clear lambanog has the exceptional yet assertive quality of a fine alcoholic beverage. Strawberry flavoured lambanog has the real taste of strawberry fruit and pink in color, but the spirit of lambanog is still there. Bubble Gum flavoured lambanog has the real taste of bubble gum and blue in color, but the spirit of lambanog is still there. Grape flavoured lambanog has the real taste of grape fruit and violet in color but the spirit of lambanog is still there. Melon flavoured lambanog has the real taste of melon fruit and orange in color, but the spirit of lambanog is still there.

4.2.1.4 Product QualityAs far as the environment is concerned, the lambanog industry does not pose any major threats, since it is in their best interests to encourage more tree planting. To achieve, quality

product the business will ensure high customer satisfaction through the successful attainment of the product styles which will be done by the lambanog manufacturing. Both the product and the process do not include any harmful chemicals; in fact, it is being marketed as an organic product.

4.2.1.5 Product Packaging and LabellingProducts must be packaged well to increase shelf life. It can be used to encourage potential buyers to purchase lambanog. It improved tamper resistance to deter tampering and also can have tamper evident features to help indicate tampering. It was written, electronic, or graphic communications on the packaging or on a separate but associated label. The researchers decided to have a packaging and labeling as what is shown in Figure 8 because of its significance and meaning. The upper design which is the “PILIPINAS Kay Ganda” signifies that the product is made in the Philippines and tells how beautiful the country is for having different products such as the Lambanog produced by the researcher. The “koko s Wein” is the product name and the bottles below were the different flavors of the product which is strawberry, raisins, mango and bubblegum.

4.2.2 Sales and Distribution StrategyThis section includes the sale and distribution process of the proposed lambanog manufacturing in General Santos City.

4.2.2.1 Order ProcessingThe process of ordering should be present in a business to attain customer satisfaction. Customer should contact us through calls and emails which will be answered by

one of the salesman to be able to recognize of how much and when their orders are needed.

After ordering, the salesman will tell the warehouse clerk to schedule the delivery of lambanog to the consumer and how much is needed and the address where it will be delivered.

Then, the warehouse clerk will inform the driver in the scheduled time to load and deliver the finished products and the address of the consumer who ordered.

On the day of delivery, the driver will be accompanied by one of the salesman who will collect the payment of the customer.

When the driver arrived, he will also be the one to unload the finished products and the salesman will collect the payment of the customer.

4.2.2.2 Product Control ManagementThis pertains to how the business manages and controls the purchase of supplies to be able to maintain organized and efficient records of inventory.

4.2.2.2.1 Product QuantityThis refers to the number of safety stock to be purchased in order to control the inventory management. The company will make use of the traditional costing. The quantity of product to be manufactured will be relatively large which will be stored in the stock room. It is good to store the lambanog in a long period of time while waiting for an order because its taste will get better.

4.2.2.2.2 Product Lead TimeProduct lead time manifest the timing of the entity in ordering the safety stock. The product lead time depends on the customer of what specific day and time will he/she wants the product to be delivered. But it is assured that it will be delivered in the exact day, time, and place as what the consumer demands.

4.2.2.3 Transportation This section contains the cost, speed, reliability of the transport and cost of damage

in relation to transportation.

4.2.2.3.1 CostRunning the business is also expensive because of the cost incurred for

transportation. The company will handle the delivery of the products to the retail stores, or supermarkets and the cost of gasoline for the delivery is incurred. They may revolutionize transportation one day, but until then, the internal combustion engine is what we’ve got. Diesel is expensive but certainly more fuel efficient than gasoline powered engines.

4.2.2.3.2 SpeedThe transportation of finished goods is to be delivered upon the demanded date of

the retail stores or supermarkets.

4.2.2.3.3 Reliability of the TransportGeneral Santos City is not that populated compared to other cities. The volume of

vehicles is not that heavy. Upon the delivery of the product, there is a smooth transportation along national highways but in the streets going to the retail stores or supermarkets are little bit narrow and added with many tricycles, there is a light congestion but no delay in delivery.

4.2.2.3.4 Cost of DamageIn case of damage in transporting the products, the company is liable for the

replacement and returns of defected goods.

4.2.2.4 Warehouse/StorageWarehouse refers to the place where the finished products are stored for delivery to

consumers. The warehouse of the lambanog products should have a room temperature which is under the normal condition, 21 °C (70 °F).

4.2.2.5 Distribution ChannelsThe distribution of lambanog products could be in sari-sari stores, supermarkets,

public markets, or straight to the final consumer for consumption. The channel of distribution is at its full control.

4.2.3 Pricing StrategyAdopting a better pricing strategy is a key option to stay viable. It is a learning curve

when studying the needs and behaviors of customers and clients.

4.2.3.1 Pricing StructureCost-based pricing will be adopted where the cost data will be used in determining

the selling price. Specially, the full cost pricing will be used in order to cover up the operating expenses. Under the full cost pricing method, selling price is computed by adding the total production and operating cost to a mark-up based on such total cost.

The computation below shows how the selling price of the product is arrived at.

1 Bottle PackagingIndirect Costs Php 12.31

Direct Materials 36.625

Direct Labor 39.50

Factory Overhead 8.1

Total Cost 96.535

Mark-up (40%) 38.614

Selling Price per Bottle 135.149

Chapter VTECHNICAL FEASIBILITY

This chapter discusses the details of how the business will deliver a product or service, the materials, labor, transportation, location of the business and the technology needed for the sustainability if the business.

5.1 Technical ProcessThis section talks about the procedures of the venture on how the product will be

offered to the market. A division of the process will be understood in the preceding categories.

5.1.1 The ProductLambanog is wine made from coconut. It is famous for its potency that normally

carries about 80 to 90 proof variations. It has been passed down throughout generations of coconut plantation farmers. The process involves collecting the sap from the coconut flower, similar to rubber tree tapping. The sap is then cooked and fermented to become tuba, a popular coconut toddy. The tuba is then distilled to make lambanog.

5.1.2 Raw MaterialsIn conducting business operations, the proposed lambanog manufacturing will use

raw materials. Such raw materials and the corresponding cost in the market are shown in Table 10.

Table 6 : Raw MaterialsRaw Material Quantity Cost

Coconut Sap 80 gallons/ day --Empty Bottles 240 bottles/ day Php 20.00 eachFlavorings:

Bubblegum Raisins Strawberry Mango

1 kilo1 kilo3.5 liter3.5liter

Php 170.00Php 125.00Php 137.00Php 105.00

5.1.3 Manufacturing ProcessThis section will tell how the Lambanog Manufacturing works. The flow chart of the

process is shown in Figure 11. Collecting

Coconut sap is the liquid tapped from the unopened flower (spadex) of coconut tree. The sap when collected must be pearly white in color and sweet in taste and has the characteristic coconut sap smell.

ReceivingCoconut sap packed in carbouys (20-L capacity) is received at the production area.

Transferring to Fermentation Vats/Coarse FiltrationThe coconut sap is filtered and manually transferred to the fermenting vats.

FermentingCoconut sap is allowed to ferment in large plastic drums. Fermentation period takes about 3-4 days to produce an alcohol content of approximately 7-8%

Transferring and HoldingThe alcoholic liquor is transferred to a holding tank that is usually located near or beside the distillation area. The alcoholic liquor stays in the holding tank until distillation set-up is ready for the next batch.

DistillationThe traditional process of distillation is the batch type pot-still process with rice hull or wood as source of fuel. The alcoholic liquor is heated. The initial distillate (head or ‘bating’) which contains the undesired methanol and other components is separated and set aside for other purposes. It has a high proof of content (concentration: 110 proof). The succeeding distillates that are lambanog have lower alcohol content. However, as distillation proceeds, the desired alcohol content of 80-90 proof must be achieved. The distiller uses an alcohol meter (hydrometer) to check the alcohol content. It varies from 80 to 90 proof.The remaining liquor in the distillation vat, which is the tail, is discarded. It is composed of high alcohol like fusil oil that boils at higher temperature.

Packaging, the product (‘alak’) is transferred to plastic containers (HDPE-high density polyethylene) in full capacity for delivery or storage.

Storing

5.2.3 Establishment Lay-out

This describes the floor plan of the proposed Lambanog Manufacturing Plant. 5.3 Production Needs

The production needs describes the facilities, the equipment, the utilities, and the waste disposable that will be using in manufacturing of lambanog.

5.3.1 Facilities Below are the facilities that would be established in completing the normal operating cycle of the proposed business.

Table 7 : Facilities

Facilities Description

Coconut Plantation This is an outdoor rented area of the company where the coconut trees are maintained.

Production Area This is the area where the fermentation and distillation process of making Lambanog is done.

Storage Room This is the area where the finished products are stored in 20-25 ºC.

OfficeThis is where the transactions of the business are being recorded. This is also the place where the records of the business were keeped.

5.3.3 UtilitiesTo make the business operational, it will have the following utilities presented on

table 10 and with its corresponding description and estimated cost per month. The estimated total of the utilities expense would be Php 8,000.00.

Table 9 : List of UtilitiesUtility Description Estimated Cost

Water It is a necessity of the business for sanitary purposes (washing and cleaning of the equipments and etc.)

Php 3,600.00 per month

Electricity It is a necessity of the business to start its operation. Electricity will provide light to the whole area especially at night (for security purposes). Furthermore, it is used to generate the equipments use in making lambanog.

Php 11,000.00 per month

Heat It is used in cooking the coconut sap for fermentation.

Php 1,500.00 per month

Telephone Medium of communication to clients and suppliers

Php 500.00 per month

Internet Used for other business transactions done in the internet.

Php 1000.00 per month

TOTAL Php 17,000.00 per month

5.3.4 Waste DisposalThe business shall have a proper waste disposal in order to maintain a clean

healthy environment. The main waste that will eventually produce by the production area are the waste from fermentation and distillation process. The waste will be disposed in a certain area since it is not harmful because it is a biodegradable waste.

5.4 Supplier’s Transportation FactorsThe suppliers of the materials (which supplies the empty bottles and firewood) which

is needed in the normal operation of the business has to consider the following:Availability of Supply. There are really times when the needed amount of supply

that the business firm needs is not sufficient enough. Distance. The supplier of the business must be in local area only (General Santos

City) because the products needed are readily available in this area. It is also ideal to have a supplier near the production area for lower cost.

Unforeseen events. There are things that cannot be predicted that could prevent the normal operating transportation of supplies to the production area.

5.5 Labor SupplyThe business will hire 15 employees. These employees will mostly come from the

locale or elsewhere. The potential employees will be searched through advertisements in the flyers and other kinds of advertisement. Whenever an applicant has possesses the requirement that are needed on a certain job then he/she will be hired on the spot or will still be on hold and filtered if there are other potential applicant perfect for the job.

5.6 Manufacturing Cost Data

Table 10 Manufacturing Cost Data

The cost of finished goods in making lambanog is attained by adding all the direct labor, direct materials and Manufacturing Overhead. After having the sum of those, a markup is imposed unto the product. Costs that are directly and indirectly traceable unto the product include depreciation, permits and licenses, repairs and maintenance, insurance, rent, supplies, salaries and wages, utilities and miscellaneous expenses.

The total project cost represents the business’ capital required for the startup of operations. It includes the fixed capital, and working capital. The summation of those capitals would then be the grand total cost of project.

In the total operating expenses, labor cost takes the largest share (70%-75%). Labor expenses include the payment for the mananaggot or tapper (about 80% of the total labor cost) and distillers or tagaluto (about 12% of the total labor cost). Of the remaining 25%-30% of the total operating expenses, 90% goes to the procurement of bamboo poles and 10% to the rental of the coconut trees, transportation, tools, repair, and maintenance.

Fandialan (1978) described the functions of the different constituents of the labor force. The manananggot takes charge of periodically cleaning the farm and the palms, prepares the palms for tapping, trains the spadices to yield sap, taps daily approximately 110 spadices, and delivers the collected sap to the fermentation and distillery plant. The distiller or tagaluto who works seven hours daily supervises the deposition of the sap in the fermentation contatiners, manages the fermentation of the sap, gathers fuel for the distillery, distills the tuba, and packs the lambanog. The hauler delivers the lambanog from the production area to the entrepreneur’s house and then to the customers.

Among the various operations involved in lambanog manufacture, the most time-consuming is the tapping or collection of sap, which according to Suiza (1979) accounted for 58% of the total labor requirement. This is followed by the distillery labor requirement (22.6%). The other labor requirements involve cleaning the upper portion of the palm to facilitate easy tapping (1.9%) and the repair of the bamboo bridges (1%).

The relative distribution of operating expenses in a lambanog enterprise was estimated by Fandialan (1978) as follows: 5.47% for rental of coconut trees, 69.77% for labor, 3.98 for transportation, 13.94% for supplies and materials, 0.39% for tools and equipment, 3.57% for bank charges, 2.10% for depreciation, 0.30% for repair and maintenance, and 0.48% for business tax. The labor expenses were the highest, with relative distribution of 3.99% for installation of bamboo bridges, 81.16% for tapping, 2.08% for hauling, 11.29% for distillation, and 1.48% for transporting the product.

Based on various studies of lambanog production, it can be estimated that for a 5-hectare farm, the manpower required to operate a lambanog business is as follows: 6-7 manananggot (tappers), 2 persons who work for 2 hours per day to transport collected sap to the distillery plant, 2 persons responsible for distillation, and one person for bottling the product.

The yield of sap from the Laguna Tall variety is based on two spadices per palm, where one spadix has an average sap yield of 0.75 L per day. The months with lowest (April to May) and highest (August to September) sap yield were taken into consideration. The yield of lambanog is based on the 17.51% recovery efficieny. The sap yield is comparable with those reported in other countries: 1.49 L per day in Malaya (Marsden Skilton, 1931), 1.59 L per day in India (Patten, 1938), and 1.58 L a day in Ceylon (Nathanael, 1955).

Firms do not use any brand name for their products. The same sizes are sold by the processors. All the packaging materials used are provided by the customers. Purchased lambanog wine is transferred in the containers brought by the buyers. Some firms lend their regular customers with containers especially if they purchase in large quantities. One container or stauffer holds about six gallons of lambanog. The packaging material used is a big plastic container called the stauffer. One gallon and one half gallon lambanog use smaller plastic containers with handle. Some firms used glass containers.

The price for one stauffer of pure lambanog ranges from Php780- Php900 while the price for one gallon lambanog ranges from Php130 to Php150. Retail prices are as follows: twelve ounces of lambanog is sold at the range of Php12- Php17. Flavored lambanog costs higher than pure lambanog. It is sold for Php190- Php200 per gallon of any flavor.

Direct materials used Php 173,200.00

Direct labor Php 77,500.00

Manufacturing overhead applied Php ,000.00

Total manufacturing costs Php 255,700.00

5.3.2 EquipmentUnder this section are the equipment needed for the daily operation of the proposed

venture.Table 8: Equipment

Equipment Quantity Cost Description

Production Based EquipmentsAlcohol Hydrometer

3 pcs Php 750.00 each

(Php 2,250.00)

Alcoholmeters are for reading alcohol content in distilled spirits only. 12" (30cm) Very accurate Alcoholmeter. Professional grade. 0 - 200 Proof and 0-100% abv reading.

Distillation Equipment

2 pc. Php 150,000.00 each(Php

300,000.00)

Used for distilling the fermented coco sap.

Empty Containers

30 pcs. Php 70.00 each

(Php 2,100.00)

This is where the collected sap is stored for about 2-4 days.

Strainer 5 pcs. Php 30.00 each

(Php 150.00)

This is used to filter the coconut sap.

Graduated Cylinder

3 pcs. Php 300 each

(Php 900.00)

This is where the distilled coconut sap is measured after.

Cutted Bamboo 900 pcs. Php 3.00 each

(Php 2,700.00)

This is where the sap is collected while it is still in the coconut tree.

Copper Pot 2 pcs. Php 2,995.00 each

(Php 5,990.00)

Used for fermentation process.

Administrative EquipmentComputer Set 3 pcs. Php 21,000.00

each(Php 63,00.00)

Used for keeping records of the business and also for communication.

Telephone 2 pcs. Php 1,189.00 each

(Php 2,378.00)

Used for communication.

Office Supplies Php 1,049.00

Used for office works in the flow of the business.

Furniture & Fixtures

Php 28,350.00 each

Used for the accommodation of guests and people inside the office.

Air Condition 3 pcs. Php 35,00.00 each

Used for the convenience of the emlpoyees in the office and

(Php 105,000.00) in the conference roomGenerator 1 pc. Php

60,000.00Used for the continuation of production in case of electricity loss or black-out.

Total Php 613,867.00

Table 11Total Project Cost

Item Category Total

A. Fixed Capital Costs:

1. Land (1.5 hectares) Php 1,660,000.00

2. Building Php 1,500,000.00

3. Air ConditionerGenerator

Php 105,000.00Php 100,000.00

4. Production Based Equipmentsa) Alcohol Hydrometerb) Distillation Equipmentc) Empty Containersd) Strainere) Graduated Cylinderf) Cutted Bamboog) Copper Pot

Php 2,250.00Php 300,000.00Php 2,100.00Php 150.00Php 900.00Php 2,700.00Php 5,990.00

5. Administrative Equipmentsa) Computer Setb) Telephonec) Office Suppliesd) Furnitures & Fixtures

Php 63,000.00Php 2,378.00Php 1,049.00Php 28,350.00

Total Initial Fixed Capital Php 3,773,867.00Item Category Total

B. Initial Working Capital

1. Current Assets:a) Cash on Handb) Inventories

Php 101,390.00Php 976,756.55

Total Initial Working Capital Php1,078,146.55TOTAL PROJECT COST Php 4,852,013.55