Upload
frederick-black
View
218
Download
0
Tags:
Embed Size (px)
Citation preview
Feasibility Study
» By:
– Kory Lylyk
– Daniel Hutton
– Daniel Ferre
– Anthony Renneberg
Prairie Pulse Processing
Introduction
» Prairie Pulse Processing will be:– purchasing raw products from local producers
– splitting the lentils and peas into a edible human product.
» Mission Statement
– To provide a consistent high quality product for East Indian human consumption markets. To develop a competitive alternative market for Saskatchewan pulse producers.
Operations Plan
» Prairie Pulse Processing will be located:– R.M. 370 - Humboldt– Approx. 5 Miles west on Highway #5– Adjacent to the existing AgriCore United
Facility– CNR loading at Saskatoon, SK.
Location
Humboldtt
Site PlanUnloading Scale
Ra
w S
tora
ge
Offic
e B
uild
ing
Feedmill Loading
Loading Dock
Organizational Structure
Organizational Structure
Marketing Manager(Grain Buyer)
Board of Directors(3 Foreign and 4 Canadian)
GGeenneerraall MMaannaaggeerr
Processing Plant Staff
(1)Shipper/Receiver (2) Baggers
(2) Forklift Operators
MMaaiinntteennaannccee MMiillllwwrriigghhtt)) ((22))
Secretary
(2)Foreman
Clean Up Staff(1)
Production Flow Chart
Cleaner Destoner
Gravity Table
Dehusker
Polisher
Sizer
Splitter
Bagger
Storage (Bulk)
Warehouse
Raw storage Stone storage
LoadingDock
Finished Storage
Screenings
Operating Expense
Table 3.4 Operating Expenses for 2004Description Cost / $ Year Source
Telephone 7,200 SasktelSalaries 165,000 Financial ProjectionsBenefits 20,048 Financial ProjectionsMarketing 32,500 Marketing PlanAdministration 37,741 Financial ProjectionsTransportation 1,984,283 CN RailwayTrucking Premiums 591,000 Kooistra TruckingInsurance 12,000 Hycerenko Insurance AgenciesMiscellaneous 3,000 EstimateInterest LT Debt 284,700 Advantage CU
Summary of Financial Statements
Year 2004 2005 2006 2007 2008Sales 16,679,775$ 20,616,202$ 21,234,688$ 21,871,729$ 22,527,880$ COGS 11,366,549$ 15,169,776$ 15,583,083$ 15,858,954$ 16,181,181$ Gross Profit 5,313,226$ 5,448,061$ 5,687,355$ 6,070,341$ 6,410,016$ Expenses 3,137,471$ 3,733,939$ 3,816,911$ 3,901,422$ 3,987,448$
Income Tax 663,321$ 516,336$ 566,109$ 661,144$ 741,906$ Net Income 1,512,435$ 1,197,786$ 1,304,335$ 1,507,775$ 1,680,662$
Net Present Value (NPV) 3,317,618Expected Rate of Return on Equity Investment (IRR) 37.3%
$ 2,168,919 $ 2,422,568
Net Cash Flow to Equity
$ 315,430 $ 1,364,567 $ 872,664 $ 229,979 $ 70,064
$ 2,175,756 $ 1,714,122 Net Income Before Taxes
$ 1,870,444
Capital Expenditures
Table 3.5 Capital ExpensesDescription Cost Dimensions/Quantity/Source
Asx115 OC GFG aspirator Northland SuperiorNS-FB24 FR Feed Box Northland SuperiorCamas SV4-1 Density Separator Northland SuperiorForsberg Model G3 Destoner Breakdown Northland SuperiorOliver Model 160 gravity table Not Northland SuperiorNS-HC56 OC FR Aspirator Available Northland SuperiorNS-22x120-P22 Rotary Cleaner Northland SuperiorNS-HC56 CC GFG Aspirator Northland SuperiorNS-22x120-P22 Rotary Cleaner Northland SuperiorNS 4 multi cylinder length separators Northland SuperiorSite Construction 120,000 Hadiken Concrete & SupplyLand 20,000 R.M HumboldtBuilding 280,000 Boychuk BuildersBobcat 30,000 Kelsey Farm EquipmentUtilities Installation 100,000 Crown Corp'sStorage Bins 200,000 Federated Coop100' Scale 100,000 Northland SuperiorOffice Expense 10,000 Staples
Total Value 6,300,000
Human Resources
Staff Position General Marketing Secretary/ Foreman Shipper/ Millwright Forklift Baggers Cleanup
Manager Manager Accountant Receiver Operators
Number 1 1 1 2 1 2 2 2 1Annual Salary 65,000 55,000 45,000 80,000 35,000 100,000 50,000 50,000 25,000E.I. (3.08%) 2,002 1,694 1,386 2,464 1,078 3,080 1,540 1,540 770CPP (4.07%) 2,646 2,239 1,832 3,256 1,425 4,070 2,035 2,035 1,018Comp. (5.0%) 3,250 2,750 2,250 4,000 1,750 5,000 2,500 2,500 1,250
Total Cost 72,898 61,683 50,468 89,720 39,253 112,150 56,075 56,075 28,038
Line of Authority
Marketing Manager(Grain Buyer)
GGeenneerraall MMaannaaggeerr
Processing Plant Staff
(1)Shipper/Receiver (2) Baggers
(2) Forklift Operators
MMaaiinntteennaannccee MMiillllwwrriigghhtt)) ((22))
Secretary
(2)Foreman
Clean Up Staff(1)
Marketing
» Marketing of the final product will be minimal due to:– One company purchasing all edible finished
product.– Low volume of screenings available for sale.
Supply of Unprocessed Product
» Lentils– In 2001 there was 798,392 tonnes produced in
Sask.
» Green and Yellow Peas– In 2001 there was 2,403,668 tonnes produced
in Sask.
Location of Production
» Of the pulse production required:– Lentils 1% of production in Sask.– Primarily sourced from Southern Sask.– Peas less than 1% of production in Sask.– Sourced from nearby districts:
• Districts 8A, 8B, 5B and 6A
Direct Competitors
» Belle Pulse - Bellvue (Peas, Lentils)
» Best Cooking Pulses - Rowatt (Peas)
» Canadian Select Grains - Eston (Chickpeas)
» Darlaine Natural Foods - Radisson (Peas)
» Parkland Pulse Grain - North Battleford (Peas)
» Walker Seeds - Tisdale (Peas)
Marketing Budget
Advertising Ads 7,500.00$ Inserts 500.00$ Total Advertising 8,000.00$
Promotion and Development Web Page 3,500.00$ Travel Expenses 20,000.00$ Trade Show 1,000.00$ Total Promotion 24,500.00$
Total Marketing Expenses 32,500.00$
SWOT Chart
Strengths Weaknesses48% of Foreign FundingLarge supply of raw productGuaranteed Purchase of Finished ProductState of the Art Facility
High cash conversion cycleHigh start up costsNo control over finished product pricingDependency of foreign customers
Opportunities ThreatsOther potential customers (Europe, MiddleEast)Ability to process other productsPotential to expand
WeatherCompetitionVariation of commodity pricesSubstitutes for Production
Financial
Lentils Break Even
$-
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
1 2 3 4 5 6 7 8 9 10
Year
$/to
nn
e Economic
Net Income
Cash Flow
Financial
Peas Break Even
$-
$100
$200
$300
$400
$500
$600
$700
1 2 3 4 5 6 7 8 9 10
Year
$/to
nn
e Economic
Net Income
Cash Flow
Net Income
Net Income
0
500
1000
1500
2000
2500
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Year
$ /
1000
Net Income After Tax
Ratios
2004 2008 2013Liquidity
Current Ratio 8% 12% 12%Quick Ratio 6% 10% 9%
SolvencyDebt Ratio 44% 30% 9%
ProfitabilityGross Profit Ratio 32% 28% 30%Net Profit Ratio 9% 7% 9%
Financial Ratios
Critical Variables
Variable Level of Importance (1,2,3)Split Lentils Sold (t) 2Split Peas Sold (t) 3Screenings Sold (t) 3Export lentil price 1Export pea price 1Screenings price 2Transportation cost 2Pea purchase price 1Lentil purchase price 1Trucking premiums 3