Midcity New Ppr

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2011

Dhaka City College

6/1/2011

Term Paper On: Mid-city Recycling Plant


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Project Management (4103)

Prepared For:

Ms. Jafrin Sultana

Assistant Professor

Department Of Business Administration

Prepared By:

Group: Edge

List of group members:

NAME CODE

Marzia Begum 047

Sharmistha Das 042

Tamanna Tasnin Neeshe 043

Tamanna Nahar Tany 050


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Letter of Transmittal

6th Jan, 2011

To

Ms.Jafrin Sultana

Assistant Professor

Department of Business Administration

Dhaka City College

Dhanmondi R/A, Dhaka

Dear Madam,

Here is the project that you asked us to conduct as an individual project. We were given

approximately 60 days to finish this work. This is a former report on the project named Mid-city

recycling plant. It was undoubtedly a splendid opportunity for us to work on this report.

As you will see, we have followed the instructions that were given by you while doing the

project. The term paper contains the organizational introduction, the demand and market

analysis, technical analysis, financial analysis and such other relevant issues of the project.

We are pleased to do this project as this gave us another chance to apply most of our

knowledge we gained in the course PROJECT MANAGEMENT (4103). We sincerely thank you

for all your cooperation with us regarding the project. We believe and hope that you will

appreciate our work.

Sincerely Yours,

Marzia Begum

(Group leader)


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ACKNOWLEDGEMENT

We the members of GROUP: EDGE are very pleased to accomplish the task of

preparing a Term Paper, given by our revered course instructor Ms. Jafrin Sultana. In

preparing the report, we have got much direct and indirect assistance from some

persons. In this regard, we are extremely grateful to our course teacher, Ms. Jafrin

Sultana, for her cooperation. We also thank our senior brothers, consultants and our

respected teachers who helped us in this regard.


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OBJECTIVES OF THE STUDY

The objective of the study is to present a formal report on mid-city recycling plant. The report

has been prepared, following several phases. Starting with a brief company overview, the report

has eventually gone through the demand and marketing phase, technical phase, financial

phase, and so on.

SCOPE OF THE STUDY

This study provides an immense utility to the study unit by various means; the scope of this

study is:-

The main objective of the study was to put into practice the theoretical aspect of

the study into real life work experience.

This project will be as a source of information for further practical applications of

the company.

This project will serve as a foundation for further study of the company to

understand its own position better.

METHODOLOGYOF THE STUDY

All the information used in this paperwork has been obtained from primary and secondary data,

journals and reports. Through this paperwork we have tried to focus on the ways of starting a

completely new venture, using the following framework:

y organizational background

y Aims and objectives

y Mission and vision

y Functions

y Facilities provided

y

Financial performancey Positive affects in the economy


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LIMITATIONS OF THE STUDY:

Lack of time;

Lack of proper source of data;

Lack of cooperation;

It is difficult to estimate and do all the financial projections accurately according to thecurrent market.

Are some of the limitations due to which we could not collect and present some more

relevant information.


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Executive Summary

Mid-City recycling main work will be to collect, recycle/compost, and market waste frommunicipality waste processing plants for use as a consumer good. This recycled product willmeet two critical needs:

1. It will give municipalities a feasible and cost effective alternative to land filling the waste,and

2. It will help meet the growing demand for organic soil enhancers and fertilizers. Thematerial that will be recycled is human waste sludge.

Our recycled waste will be targeted toward fertilizer manufacturers, nurseries, landscapers,farmers, government agencies, golf courses, and others. All of these potential customers willbenefit from the compost's numerous soil enhancing characteristics.

Additionally, we will offer a service to waste processing plants owned by municipalities.

Currently these plants face several issues regarding the disposal of human waste sludge.

Landfills are filling up and costs of disposal are rising. Mid-City recycling will solve this problemby accepting this waste at a nominal charge and recycling it into a useful product.

Mid-city recycling is entering a niche market in that human waste sludge has not been recycledon any sizeable scale in Dhaka City. This is a unique and viable concept that addresses theneeds of various customers and reaches an untapped market with tremendous growth potential.

One of the most attractive aspects is that the business is projected to attain a strong cashposition and achieve profitability in the first year of operation. Due to a large need for theseproducts and services, and a lack of direct competition, our projection of quick profitability isattainable.

Our in-depth research pertaining to human waste's positive soil enhancement characteristicsand its many potential uses is well advanced. The concept has been tested on a small scaleand the results, upon analysis, were found to be high quality compost. Research will be anongoing process for the company; one particular area of interest is the possibility of qualifyingthe product as a fertilizer. In this case, the profitability of the product would nearly double.

We already have an advance order for 500 tons, and one fertilizer manufacturer and a largelandscaper have committed to purchasing 600 tons of our product annually. Additionally, variousmunicipalities have expressed keen interest in paying us to accept their waste.


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TABLE OF CONTENTS:

SerialNo.

Topic Page no.

01 Section-1: organization profile

Mid-city recycling plant: a brief prelude

Objectives

Mission

Keys to success

03 Section-2: Market and Demand Analysis

Situational Analysis

Collection of secondary information

Conduct of market survey

Characteristics of the market

Demand forecasting

Market planning:

Current market situation

SWOTAnalysis

Objectives of mid-city

Marketing strategy of mid-city

03 Section: 3: technical Analysis


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Organogram

Resources and Production

Production methods

05 Section-4: Financial Analysis

Break-even Analysis

Sources of fund and utilization of fund

Budget

Projected Income Statement

ProjectedBalance Sheet

Cash flow statement

07 Section-6: risk Analysis Part

Business risk

Financial risk

Risk management

08 Wrapping Up

09 References


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Mid-City recycling main work will be to collect, recycle/compost, and market waste frommunicipality waste processing plants for use as a consumer good. This recycled product willmeet two critical needs:

3. It will give municipalities a feasible and cost effective alternative to land filling the waste,and

4. It will help meet the growing demand for organic soil enhancers and fertilizers. Thematerial that will be recycled is human waste sludge.

Our recycled waste will be targeted toward fertilizer manufacturers, nurseries, landscapers,farmers, government agencies, golf courses, and others. All of these potential customers willbenefit from the compost's numerous soil enhancing characteristics.

Additionally, we will offer a service to waste processing plants owned by municipalities.Currently these plants face several issues regarding the disposal of human waste sludge.Landfills are filling up and costs of disposal are rising. Mid-City Recycling will solve this problemby accepting this waste at a nominal charge and recycling it into a useful product.

1. Flush sales for the first twelve months of operations and growing each year thereafter.2. Establish the recycling facility in various parts of the County, to include four composting

units in Year 1.3. Open additional facilities in Year 2 and Year 3 to serve other areas of the state;4. Continue to market Mid-City Recycling by contacting and soliciting business from

additional municipalities and compost using customers.

Mid-city recycling mission is threefold:

Our first responsibility is to ensure the financial well being of the business. Second, is to provide municipalities with an economical, alternative for the disposal of

human waste sludge. Third, is to provide a top quality, recycled material to the consumer so that they may

benefit from compost's many good properties and organic elements. In addition, wehope to build in the consumer a positive feeling about the feasibility of using recycled

human sludge as a fertilizer.

A BRIEFPRELUDE :

OBJECTIVES:

MISSION:


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The keys to success in our business are:

y Overcome perception issues that may exist with using compost made from human wastesludge.

y Establish and build relationships and trust with customers to help shield from futurecompetition.

y Expand rapidly to control the market.y Offer reasonable prices.y Get investment.

KEYS TO SUCCESS:


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Situational analysis:

There are customers at both ends of our supply chain that will benefit from our services andproducts. Municipalities will benefit from our service by having an alternative means of wastedisposal. Other potential customers who will benefit from our compost product include turf

farms, fertilizer manufacturers, nurseries, landscapers, golf courses, homeowners, and even thefederal government for use in highway construction reseeding. Therefore, we have two basicmarket segments; those waste treatment facilities which will benefit from our services andconsumers who will benefit from our product.

Recent study reveals that landfills are overflowing and the costs of disposing of sewage and

garbage is rising. City leaders can relieve over extended municipal budgets, prevent the

contamination of drinking water, and help farmers build healthier soils by recycling garbage and

human waste back to farms. We offer a service by which municipalities can dispose of their

waste without it having to be land filled anywhere. This is of great value to this customer.

At the other end of our process are the users of our compost. Composting is experiencing aresurgence of activity which is driven by increased understanding of the agronomic benefits of

compost utilization, and rising disposal costs for municipal wastes. Moreover, Consumption of

compost in the commercial market is growing due to people looking for a more organic or

natural substitute for traditional chemical fertilizers. Recycling is at the forefront of responding to

this growth trend in the Dhaka city. We will initially focus on selling compost to fertilizer

manufacturers, nurseries, and landscapers. We already have commitments from a fertilizer

manufacturer and a landscaper to purchase 600 tons per year or more of our compost material.

Five major market segments for compost have been identified:

y Agriculture (for food and nonfood crops and sod farms).y Landscapers (for industrial and commercial properties; golf courses, cemeteries, and

athletic fields; landfill covers; and damaged soils).y Nurseries (for plant and forest seedling crops and reforestation projects).y Public agencies (for highway median strips, parks, recreational areas, and other public

property).y Residents (for home landscaping and gardening).


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Collection of secondary information:

The following sources of secondary information have been identified:-

1. Census of Bangladesh

2. National sample survey reports3. Statistical year book

4. Annual survey of industries

5. The Dhaka stock exchange directory

6. Fertilizer statistics

7. Overview of Pakistan fertilizer manufacturing

Conduct of market survey:

Due to certain limitations of census survey, sample survey has been used to gather relevantinformation from a sample of population.

In the fertilizer business it is possible to assess farmers' intentions through retailers. Manyretailers are located in villages and are in daily touch with farmers. Many are themselvespracticing farmers and have a good feel for agricultural prospects for the ensuing season oryear. Being close to the scene of action, they have a good assessment of produce price trends,available purchasing power, likely crop shifts, etc. It should be possible to ascertain from eachretailer directly or through a large sample, the likely fertilizer demand. Through enquiry fromtheir own outlets, marketing organizations can produce a fairly accurate sales forecast.

When surveying retailers the type of questions to be addressed should be simple and direct.Questions of a long-term nature should be avoided. The main questions to be addressed shouldbe:

i. What fertilizer types did they buy last year and in what quantities?ii. What percentage increase or decrease do they expect for the coming

season/year?iii. What are the reasons for the expected increase or decrease? (It is preferable to

help the dealer to choose from a list of possible reasons with one item readingothers to provide for reasons outside the list).

Aggregation of this information to determine a regional growth rate provides the forecast for the

next season or year, as well as valuable information on market forces.


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Characteristics of the market:

Several companies compete in the fertilizer market. Their major selling points are performanceand price. However, health conscious consumers have created growing competition betweenchemical and organic products. Mid-city recycling competition can be divided into two forms:

direct and indirect.

Our direct competitors would include other compost producers capable of producing sufficientproduct to supply the growing compost demand. There is no other compost producer in Dhakacity that meets this need. Therefore, we have no direct competition in the city.

Our indirect competitors are fertilizer manufacturers (who also are a part of our target market).The trend is away from chemical fertilizers, toward natural organic soil enhancers. Thus themarket for chemical fertilizer is decreasing while our market is increasing.

The organic industry now boasts sales in excess of Tk.9 million at retail, with growth forecast tocontinue at 25% per year. The demand for compost to use in organic farming and other

applications is growing rapidly.

The possibility of growth in this market is realistically huge. Consider the following simple facts:

y Municipalities must have an alternative means for disposing of human waste; we offer agreat alternative to meet that need.

y Market trends are skewing more and more toward organic soil enhancements and awayfrom chemical fertilizers; we meet this need as well.

y We have no direct competition in Dhaka city and all over the country as well.

Our service offers a feasible, even desirable, and alternative to traditional means of disposing ofhuman waste. Our product is a value added, soil enhancer that appeals to the growingenvironmental conscientiousness among consumers. Direct competition is almost nonexistent.We intend to position ourselves as the logical, economical choice for human waste disposal andcompost production in the entire Dhaka city.

Demand forecasting:

Qualitative method: jury of executive method has been used while forecasting demand underqualitative methods.

Time series projection method: A commonly used method of forecasting is the analysis ofhistorical data to discern the trend in demand growth and extend it into the future to forecast

demand. Although this method calls for application of statistical techniques it is useful to knowits features in a simplified form. If several years' data of fertilizer sales are available and thetrend is relatively stable, it is possible to read from past data the current "speed" of demandgrowth and the extent to which the speed is increasing or decreasing.


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Actual Year Year ofAnalysis

1999-00 0

2000-01 1

2001-02 2

2002-03 3

2003-04 4

2004-05 5

2005-06 6

2006-07 72007-08 8

2008-09 9

Calculations in the least square method:

T Y

0 2.833 0 0

1 2.966 2.966 12 2.928 5.856 4

3 3.019 9.057 9

4 3.221 12.884 165 3.694 18.470 25

6 3.804 22.824 36

7 3.672 25.704 49

8 3.581 28.648 64

9 2.691 24.219 81T=45 Y=32.409 TY=150.628 =285

b=

=

=0.0580

a=Y-bT

=3.2409-0.0580(4.5)

=2.9799

Demand forecasting equation: Y=a+b(x)

Y=2.9799+0.0580x


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This equation shows the demand function of fertilizer. By using this equation, we can calculatefuture demand of fertilizer.

Lead Indicators method:

This method is meant primarily for short-term demand forecasts. It uses certain lead indicatorswhich need not necessarily have a causal relationship with fertilizer demand. In the case offertilizer, a possible lead indicator might be the price of produce in the previous season. Thehigher the price, the more money in the hands of farmers, thus raises the demand for fertilizerfor the following crop. The amount of high yielding seeds sold prior to planting is possiblyanother indicator.

Market planning:

i. Current market situation:

To target our customers, we examined the market trends. Mid-City recycling products targetbuyers of organic fertilizers and soil enhancers. This market has grown significantly in recentyears and we expect to capture a quarter of this.

This market growth is fueled by a more health conscious consumer. People are better informed

about the potential side effects associated with chemical fertilizer products both to their health

and to the environment.

According to the study, the pace of research into organic products continues feverishly, andtheir use is bound to increase. Moreover, the researchers suggest that regenerative agriculturalmanagement systems based on organic fertilizer can preserve carbon and nitrogen in the soil,thus reducing emissions. They maintain that organic methods can produce the same yields asconventional systems that use synthetic fertilizer.

Mid-Citys products will help fill the growing need for organic fertilizers, and soil amendments,while helping to solve the problem of dwindling landfill space.

Main competitors:

As noted earlier, direct competitors are essentially non-existent; our major indirect competitorsare chemical fertilizer manufacturers. However, their products are more costly and do notaddress the market's trend toward organic, natural soil enhancers.

Some municipalities have begun composting operations in an attempt to deal with wastedisposal issues. They typically use a method in which sludge is placed on the ground inwindrows which are turned periodically for aeration. This is an inefficient method of compostingprimarily because it is slow, taking 90 or more days, which means that availability is uncertainfor consumers. Also, in this composting method high enough temperatures are not achieved tokill harmful bacteria and seeds that may sprout into weeds. Additionally, municipalities are a notbusiness, which means their marketing capabilities are limited. Their market primarily consistsof local homeowners and businesses, which ignores the greater market. Also, this composting


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method requires a lot of ground space which restricts the operation. Finally, odor can be aproblem for municipalities due to nearness of local residents or businesses. For these reasons,municipality composting efforts are not considered a competitive threat.

ii. SWOTAnalysis:

Strengths of Mid-City:

Organic: Our organic product allows us to be responsive to the dominant market trend.We offer all of the advantages that organic products have over chemical competitors.

Comparable application times: our product is comparable in potency to chemicalfertilizer. Thus the application time is also comparable, which saves money and laborsince there is no need to purchase and apply additional products.

Recycled: This part of our product has to do with marketing. We are a company thatcares about the consumer and the environment. We offer a valuable product, at lowcost, that saves landfill space.

Cost: The price of our compost product is much less than chemical fertilizers.

Organic product: We offer an organic product which is responsive to current markettrends. This includes the entire advantages organics offer over chemicals.

Elimination of disposal issues: Municipalities now have a waste that takes up landfillspace. Our service recycles the waste which saves valuable landfill space.

More effective between application times: Normal times between applications canrange from two to four weeks. Our product lasts for many months, thereby saving thecustomer time and money (no additional expenditure for more products).

Weakness of Mid-City:

Competition: since it will be a profitable business, several other producers of chemicalfertilizer are likely to provide us with tough competition.

Lack of awareness: initially mid-city might suffer since potential customers are still notaware of the product.

Opportunities of Mid-City:

Locating in other regions: although mid-city will be initially operating in the Dhaka city

only but it has the opportunity to expand its business in other districts of the country.

Further promotions: mid-city will go for publications in local news papers and otherforms of promotional activities to inform the potential customers.


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Threats of Mid-City:

New competitors:new competitors can easily enter the market by providing thecustomers with more attractive offers.

iii. Objectives ofMid-City:y Flush sales for the first twelve months of operations and growing each year

thereafter.

y Establish the recycling facility in various parts of the County, to includefour composting units in Year 1.

y Open additional facilities in Year 2 and Year 3 to serve other districts of thecountry;

y Continue to market Mid-City Recycling by contacting and soliciting business fromadditional municipalities and compost using customers.

iv. Marketing strategy ofMid-City:

The marketing strategy is the core of the main strategy:

1. Emphasize high value, high quality products and services.2. Build a relationship oriented business.3. Focus on municipalities, fertilizer manufacturers, landscapers, nurseries, and the federal

government as key initial markets.

Target market segmentation:

To target our customers, we examined the market trends. Mid-city recycling products targetbuyers of organic fertilizers and soil enhancers. This market has grown significantly in recentyears and we expect to capture a quarter of this multi billion-dollar market.

This market growth is fueled by a more health conscious consumer. People are better informedabout the potential side effects associated with chemical fertilizer products both to their healthand to the environment.

The researchers suggest that regenerative agricultural management systems based on organicfertilizer can preserve carbon and nitrogen in the soil, thus reducing emissions. Moreover, theymaintain that organic methods can produce the same yields as conventional systems that use

synthetic fertilizer. Mid-city's products will help fill the growing need for organic fertilizers, andsoil amendments, while helping to solve the problem of dwindling landfill space.

Products and services:

Our products and services offer needed solutions to municipalities and the market for organicsoil enhancement products. Mid-city recycling will be the market leader as the first company inthe region to collect, compost, and recycle human waste sludge for use as a fertilizer and a soilenhancer. Mid-city recycling realizes that consumers today are more conscious of recycling and


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of their environment. Because of this trend, there is a growing trend among consumers to moveaway from traditional chemical based fertilizers more natural organic materials.

We will offer one major service and major product. Our major service will be to offermunicipalities an alternative means for disposing of human waste sludge generated in wastetreatment plants. Our major product will be recycled (composted) human waste sludge for use

as a fertilizer.

Price:

The going rate per ton for compost is BDT3500 and up. This price is low enough to ensure rapidgrowth in the market yet still provide a very healthy profit, given that we have no directcompetition and chemical fertilizer is much more expensive. This is possible because we are onthe front end of the industry growth in this region.

Additionally, we will be priced at market rates for the waste disposal service we offer tomunicipalities. Additionally, we will charge competitive skid box rental fees and transportation

costs.

Promotion:

Our promotional strategy will be two-fold: first phase promotion will focus on before, during, andsix months following our opening; the second phase of promotion will deal with the long term.The purpose of the first phase is to assist with rapid market entry to ensure early and sustainedprofitability. The purpose of the second phase is to ensure long-term growth and helps propel ustoward achieving our goal of expanding country wide.

First Phase Promotions

y Publicity: We will send news releases to all of the major newspapers in Dhaka City.Publication of news articles about Mid-city Recycling will lend great credibility and be anexcellent way to let all target markets know about this new, innovative business and thesolutions it provides for municipalities and users of compost or fertilizers. We willsimilarly seek publicity in the form of news stories from local radio and televisionstations.

y Advertising: We will utilize direct mail and face-to-face promotional strategies to raiseawareness about our products and services in the target markets. Newspaperadvertising may also be used. Radio and television ads are not certain, we will evaluatetheir effectiveness before further implementation.

y Internet: We will have a content heavy website geared toward educating potentialcustomers about the benefits of our products and services. All literature, business cards,

etc. will include our website and e-mail address information.y Alliances: We intend to form alliances with fertilizer manufacturers to use our product in

their fertilizer and/or distribute our product for us.


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Second Phase Promotions

y Publicity: As the business grows and expands we will continue to seek publicity throughnews media to tout our successes.

y Advertising: We will continue to make face-to-face contact with customers and potentialcustomers. Mail-outs will be done again within a few months of start up. The second

round of mail outs will be updated to reflect the benefits provided to customers thus far.Such mail-outs will be sent periodically.

y Internet: We will continue to have a comprehensive website. The website will beupdated to provide responses to frequently asked questions. After the first six months,and certainly after the first year, we will evaluate the viability of having target clientsadvertise on our site, and conversely, we will evaluate viability of advertising on ourtarget clients websites (if applicable).

y Alliances: We will continue to seek mutually beneficial and complementary allianceswith manufacturers where applicable.

Positioning statement:

For municipalities seeking an answer to their waste disposal problems, Mid-city Recycling is theservice of choice and trusted strategic ally who gives them a cost effective solution.

For users of fertilizer and soil amendment products, Mid-Atlantic Recycling is a dependableprovider of low cost and consistent high quality compost products.

Place:

Mid-City recycling will operate in Gazipur, which is just a few kms away from the main city. Therecycling facilities will be located on a 15+ acre property owned by company president. 2 acreswill be set aside for the recycling facility set up and operation. This site is ideal as it provides

access to local municipalities. Also there is room for expansion as the business grows. .

As the business expands to additional districts in subsequent years, we will need to leaseproperty on which to site our facilities.

v. Action program:

Action programs will help mid-city recycling plant to operationalise the strategy. Mid-city mightlike to roll out its marketing plan in the next one year:

Quarter 1: mid-city should attain a top of mind awareness of 60% in the target segment.This is done by spending lump sum amount on promotional activities.

Quarter 2: mid-city shall establish at least 2 composting units by this time in Dhaka city. Quarter 3: mid-city shall reach 4 composting units by this time. Top of mind awareness

should reach almost 75%. Quarter 4: by this time mid-city shall flush sales and continue to take essential steps to

increase sales.


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Manufacturing process or technology:

Composting is biological decomposition of organic materials. Bacteria, fungi, protozoan, insects,worms and other organisms typically play a part in the decomposition process. Composting is

natures means of recycling. It will turn grass clipping, leaves, vegetables, fruit and other organicmaterials into a very beneficial soil amendment. Composting is also an effective means of

reducing the amount of solid wastes going into our nations landfills. Mid-city recycling processwill greatly speed up the natural composting process.

Technical Arrangements:

As briefly described above, the human waste sludge used in Mid-city recycling process will be

picked up from municipalities in skid boxes provided by Mid-city recycling. Accepting thewaste, rental of the boxes, and transportation will all be sold as a service to the municipalities.

Upon arrival at our recycling facility, the sludge will be placed into one of six organic in-vessel

digesters. These vessels are proven for composting various types of animal manure. The materialcompost produced was tested by the equipment manufacturer and found to be high quality

compost. Additionally, the compost material was recently tested by Agricultural practitionersand found to be an exceptional soil amendment.

Production process:

The recycling/composting units work as follows. The unit is 50 feet long. The sludge is placed

into one end of the unit. To make compost, additional dry fibrous material such as sawdust,wood chips, or bark must be added.

The unit turns slowly, making four revolutions per hour, to ensure that adequate oxygen gets to

all of the composting material. Also, the unit is set on a very slight, 2 degree; angle so that as theunit turns, the material slowly migrates toward the opposite end of the unit. During the

composting process, the material heats up (due to the natural reaction) to temperatures ofapproximately 140 degrees Fahrenheit; this kills any harmful bacteria in the composting

material.

Temperature can be controlled to ensure optimum composting environment. Also, the moisture

levels can be controlled to ensure optimum composting. After three days, the material hasreached the opposite end of the unit where it is removed.


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Layout of mid city recycling plant


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Environmental aspects:

Advantages of this recycling/composting method are as follows:

y Recycling is completed rapidly in three days. Other methods take 90 plus days.

y Waste materials in the unit are isolated from the environment.y The manager has precise control of moisture, temperature, and aeration during the process to

ensure the most efficient composting possible.

y In-vessel composting can maintain a rapid decomposition process year-round regardless of

external ambient conditions. The material can be used for improvement of organic matter

content and fertility of soil.


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Ownership and management:

Legal structure:

The legal structure ofmid-city is a general partnership. It is a privately owned firm established

and will be operated by its four partners. Each of them will share equal amount of the profit and

all are active participants in management decisions. As they are equally qualified in different

areas of business sector, they are currently acting as the heads of different departments to

minimize personnel cost.

Management Sector:

Effective management calls for mutual respect, sharing of knowledge and cooperation between

people who are involved in handling different sectors of the business. Mid-city has an

environment structure that encourages productivity and respect for clients and fellow employees

so that creativity can flourish. Generating new ideas and products is always encouraged.

Management structure is relatively flat and communication is encouraged.

y The organogram of the company is illustrated below:

With the development, determination, motivation, and persistence of everyone involved, Mid-city

Recycling will be the leading producer of composted human waste sludge in Dhaka city.

GeneralManager

FinanceManager

Employee 1

TechnicalManager

Labor labor

MarketingManager

Employee 1 Employee2

Consultant


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At Mid-city Recycling, the management team believes that this unique way of recycling willchange the way consumers look at fertilize and compost products. As with any company, the

responsibilities and duties of the management team are very important and cannot be takenlightly. Mid-Atlantic Recycling's management will work together as a team to create a successful

company.

Management Team

The responsibilities involved in the company Mid-city Recycling are great and abundant. Mid-City Recycling main purpose is to appeal to municipalities by offering a human waste disposalalternative, and to environmentally conscious minded consumers by developing products thatinclude recycled human waste. Each executive member will have several responsibilities thatare imperative to fulfill the duties in producing such unique products.

The management team of Mid-city Recycling will be comprised of the following executivepositions:

y General Manager: Marzia Begum has a degree in Agriculture from West VirginiaUniversity and has spent 7 years in the farming and agriculture industry. Moreover, shehas experience in the operation, fabrication and maintenance of heavy equipment. Thisability will be critical to the success of the business.

y Finance manager: Sharmistha Das is in charge of Finance Department. She has theexperience in the related field. She is responsible for firms daily transaction, & firmsoverall financial matter. She will look after the day-to-day operation of the farm.

y Technical manager: Tamanna Tasnin is in charge of technical department. She isintimately familiar with the uses of compost materials and its production process. Shewill also serve the purpose as an consultant.

y Marketing manager: Tamanna Nahar is not experienced in this sector but she hasexperience in doing jobs. So she can help in building relationship with well distinguished

people and develop marketing policies, strategies and ensure their effectiveimplementation to achieve business goal.

Personnel Plan

The Personnel Plan reflects the staffing levels required to manage and achieve the anticipatedlevels of production, and establish the customer base needed to achieve the revenues projectedand reach profitability.

We have projected a staff of 22 employees in 2010. This includes the owner, 2 managers, 3truck drivers, 4 equipment operators, 2 laborers, 2 metal workers, and 1 secretary; this staff of15 will operate the recycling facility. In addition, a staff of seven, including one supervisor and 6

laborers, will provide sawdust, wood chip, and bark removal at the International Paper Companyon a full time basis; the contract for this work has been won. The sawdust materials collectedwill be used in the composting process.

In addition to the above, Mid-city Recycling plans to hire a local trucking firm to deliver compostmaterials to customers. This is expected to result in the creation of two additional jobs.


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Therefore, the total employment impact of this venture is expected to be the creation of 24 jobsin the first year of operation.

Personnel Plan

Year 1 Year 2 Year 3

Management/supervisory Tk.106,044 Tk.250,992 Tk.527,083

Production labor Tk.186,889 Tk.338,688 Tk.711,245

Sawdust collection team Tk.81,120 Tk.176,646 Tk.183,712

Other Tk.0 Tk.0 Tk.0

Total People 22 44 88

Total Payroll Tk.374,053 Tk.766,326 Tk.1,422,040


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FINANCIAL PLAN:

Our financial plan is based on receiving several loans to purchase/fabricate the production

equipment, provide initial operating capital, and establish the customer base.

We will achieve profitability early in the first year and due to the expected high growth rate, wewill realize strong profits on sales by year three.

Cost of the project:

Our start-up costs will be BDT1, 000,000. Owner equity investment of in the form of a loan fromthe Regional Council of Governments Loan Fund.

The funds will be primarily used for the following:

Capital Asset Purchases:

Processing Plants 2 x BDT190,460BDT380,920

Processing Plants built in-house 2 x BDT40,00080,000

Sheds 48'x72' 4 x BDT18,50074,000

Skid Truck 2 x BDT73,000 (avg price)146,000

Backhoe40,000

Front-end Loader 2 x BDT50,000 100,000

Tandem Dump Trailer6,000

Total826,920

Means of Finance:

Particulars Total Project Percentage

Equity:

Partners 700,000 70%

Debt:

Loan 300,000 30%

Total Financing 10,00,000 100%


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Detail of start-up assumptions are shown in the following tables and chart.

Start up expenses BDT

Legal 500

Phone/utilities deposit 500

Licenses/tax deposits 4,000Insurance 1,000

Brochures and sales literature 500

Advertising 2,500

Employee salaries 16,680

Skid boxes 15@BDT 3000 45,000

Welding and cutting torch 10,000

Furniture and supplies 5,000

Website development 1,500

Miscellaneous 5,000

Total start up expenses 92,180

Start up assets BDT

Cash required 80,900

Start up inventory 0

Other current assets 0

Long term assets 826,920

Total assets 907,820

Total requirements 1000,000

Working capital requirements:

Particulars Amount(tk)

Raw Materials 155000

Selling & Administrative Cost 374053

Labor 648000

Utilities 24000

Total 1201053


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Esti

mates of sales and production:

SalesStrategy

Mid-city recycling sales strategy is relatively straightforward. Get the word out about ourproducts and services to potential customers, educate them as to the value added by our products

and services, and the product/service will sell itself.

Our present management team will become the main sales force when operations begin. Mid-cityrecycling sales force will increase as business demand permits. In the first six to twelve months

of operations, our sales team will focus its efforts on municipalities, fertilizer manufacturers,farmers, small nurseries and other related companies. The team will promote the products based

on their environmental strengths and extended duration. Mid-city recycling will use otherchannels of selling after the first year. Face-to-face contact and direct mail selling are part of the

selling plan.

Sales Forecast

The table below outlines the sales forecast and cost of goods sold. The forecast is based onreasonable sales projections within this very large market.

An additional revenue stream will be the collection and removal of sawdust, wood chip, andbark from the International Paper Company on a full time basis; the contract for this work has

been won. The sawdust materials collected will be used in the composting process.

The high growth is based on our plans to expand by increasing operations in Dhaka city andplacing similar facilities in other parts of the country.

Sales forecast:

UnitSales:

Details Year:1 Year:2 Year:3

Sawdust collection service in hrs 13,440 13,440 13,440

Waste acceptance in tons 10,640 25,920 51,840

Compost sales in tons 14,776 36,000 72,000


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Total Unit Sales 38,856 75,360 137,280

Unitprice:


Sawdust collection services in hours BDT14.20 BDT14.77 BDT15.36

Waste acceptance in tons BDT18.00 BDT18.00 BDT18.00

Compost sales in tons BDT50.00 BDT52.50 BDT55.13

Total sales:


Sawdust collection service in hrs BDT 190,848 BDT 198,509 BDT 206,438

Waste acceptance in tons BDT 191,520 BDT 466,560 BDT 933,120

Compost sales in tons BDT 738,800 BDT 1,890,000 BDT3,969,360

Total Sales BDT 1,121,168 BDT 2,555,069 BDT 5,108,918

Directunitcosts:


Sawdust collection service in hrs $0.71 $0.74 $0.77

Waste acceptance in tons $0.90 $0.90 $0.90

Compost sales in tons $7.00 $7.35 $7.72

Costof sales:


Sawdust collection service in hrs BDT 9,542 BDT 9,925 BDT 10,322

Waste acceptance in tons BDT 9,576 BDT 23,328 BDT 46,656

Compost sales in tons BDT 103,432 BDT 264,600 BDT 555,710

Subtotal direct cost of sales BDT 122,550 BDT 297,853 BDT 612,688

Profitability projections:Projected profit and loss account:

Details Year:1 (BDT) Year:2 (BDT) Year:3 (BDT)

Sales 1,121,168 2,555,069 5,108,918

Direct Cost of Sales 122,550 297,853 612,688


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Other Costs of Goods 0 0 0

Total Cost of Sales (122,550) (297,853) (612,688 )

Gross profit 998,618 2,257,215 4,496,230

Gross Margin % 89.07% 88.34% 88.01%

Expenses:Payroll 374,053 766,326 1,422,040

Sales and Marketing and Other exp. 12,000 24,000 48,000

Depreciation 165,384 325,384 645,384

Rent 0 40,000 100,000

Utilities 18,000 36,000 72,000

Insurance 18,000 36,000 72,000

Payroll Taxes 56,108 114,949 213,306

Maintenance and Repair 4,800 9,600 20,000

Other 24,000 48,000 96,000

Total operating expenses (672,345) (1,400,259) (2,688,730)

Profit Before Interest and Taxes 326,273 856,956 1,807,500

Interest Expense (57,217) (52,956) (48,223 )

Taxes Incurred (67,264 ) (201,000 ) (439,819)

Net profit 201,792 603,000 1,319,458

Net profit/sales 18.00% 23.60% 25.83%

Projected cash flow statement:


Cash received:

Cash Sales 448,467 1,022,028 2,043,567

Cash from Receivables 542,495 1,366,516 2,768,762

Subtotal cash received 990,962 2,388,544 4,812,329

Expenditures from operations:

Cash Spending 374,053 766,326 1,422,040

Bill Payments 357,477 843,317 1,684,617

Subtotal Spent on Operations 731,530 1,609,643 3,106,657

Additional cash spent:

Long-term Liabilities PrincipalRepayment

60,859 65,258 69,976

Purchase Other Current Assets 0 0 0

Purchase Long-term Assets 0 800,000 1,600,000


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Dividends 20,000 30,000 40,000

Subtotal Cash Spent 812,388 2,504,901 4,816,633

Net Cash Flow 178,574 (116,357) (4,303)

Cash balance 259,474 143,117 138,814

Projected balance sheet:


Assets

Current Assets:Cash 259,474 143,117 138,814

Accounts Receivable 130,206 296,731 593,320

Inventory 13,494 32,796 67,463

Other Current Assets 0 0 0

Total Current Assets 403,174 472,644 799,597

Fixed Assets: 826,920 1,626,920 3,226,920

Accumulated Depreciation (165,384) (490,768) (1,136,152)

Total Fixed Assets 661,536 1,136,152 2,090,768

Total Assets 1,06

4,71

01,608,

796

2,890,

365

Liabilities and Capital:

Current Liabilities:

Accounts Payable 35,957 72,301 144,387

Current Borrowing 0 0 0

Other Current Liabilities 0 0 0

Subtotal Current Liabilities 35,957 72,301 144,387

Long-term Liabilities 789,141 723,883 653,908

Total Liabilities 825,098 796,184 798,294

Paid-in Capital 150,000 150,000 150,000

Retained Earnings (112,180) 59,612 622,612

Earnings 201,792 603,000 1,319,458

Total Capital 239,612 812,612 2,092,070

Total Liabilities and Capital 1,064,710 1,608,796 2,890,365

Net Worth 239,612 812,612 2,092,070


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Ratio Analysis:

o Profitability Ratio:Details Year:1 Year:2 Year:3

Gross profit as a %of

sales

89.07% 88.34% 88.01%

Net profit as a % ofsales

18.00% 23.60% 25.83%

ROCE 84.22% 74.20% 63.07%

o Liquidity Ratio:details Year:1 Year:2 Year:3

Current ratio 11.2:1 6.54:1 5.54:1

Acid test ratio 10.84:1 6.08:1 5.07:1

Investment criteria:

Calculation ofPayback Period:

Assumed payback period of the project

Year Cash Flow Cumulative Cash flow

0 (10,00,000) (10,00,000)

1 259,474 259,474

2 143,117 402,591

3 138,814 541,405

4 350,000 891,405

5 600,000 1,491,405


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Yearecoverytheduringloash

ecompletethee oreloash-Investmentecoveryompletebe oreYeareriodayback !

600,000

891,405-10,00,0004eriodayback !

= 4.18 years (app.)


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Scenario Analysis(Amount in tk)

Particulars Best Case Average Case Worst Case

Initial Investment 1000000 1000000 1000000

Unit Selling Price 55 52 50Demand(in tons) 90000 80000 70000

Revenues 4950000 4160000 3500000

Variable Cost 2500000 2300000 2000000

Fixed Cost 661536 661536 661536Depreciation 165384 165384 165384

Profit 1623080 1033080 673080

Sensibility Analysis

Particulars 2011 2012 2013If 15% increase in sales

Sales 1121168 1289343 1482744

Cost of Goods Sold 122550 297853 612688Selling & Admin Exp. 374053 766326 776236

Profit 624565 225164 93820

If 15% decrease in sales

Sales 1121168 952993 810044

Cost of Goods Sold 122550 297853 612688Selling & Admin Exp. 374053 766326 776236

Profit 624565 (111186) (578880)


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Risk is an indispensible part of a business. In our recycling plant business there is also some

potential risks. They are:

y Business risk;

y Financial risk.

Business risk: business risk is related to our business condition. We will have some business

risks. They are given below:

-Our market demand may fail;

RISK ANALYSIS:


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Break-even Analysis:

Monthly Units Break-even 2,180

Monthly Revenue Break-even Tk.62,905

Assumptions:

Average Per-Unit Revenue Tk.28.85

Average Per-Unit Variable Cost Tk.3.15

Estimated Monthly Fixed Cost Tk.56,029

Scenario and sensitivity analysis


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Like other organization, we need to develop business ethics policies, ethics are the broad

guidelines that we need to exercise in all area.

BUSINESS ETHICS:


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We have developed our code of ethics, which is given below-

->Responsibilities of the marketers.

->Marketings professional conduct must be guided.

->Honesty and Fairness

->Organizational relationship

->Not engaging in to illegal actions.

->Providing necessary information to the customers.

->Better relationship with the labor.

->Adherence to all laws and regulation.

The project is very environmental friendly. Our project deals with the recycling of used paper,

bags and etc.

To discuss the environmental impact of the project it can be divided into six sectors.

Economic Sector: In our country our business will add a new dimension. We will be able to

create employment opportunity for the unemployed.

Govt. Sector: To operate our business efficiently, we have to follow the local laws, regulation,

tax system imposed by the government.

Tech. Sector: The technical environment is perhaps the most dramatic force now shaping ourdestiny.

ENVIRONMENTAL IMPACT:

CONTRIBUTION TOWARDS ECONOMY:


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Web links:

www.google.com

www.wikipedia.com

www.boi.gov.bd

www.wiley.com

www.pakistanfertilizer.com

Text Reference:

Project Management by Prasanna Chandra -6th edition

Marketing Management by Philip Kotler-12th edition

Human resources management by Wendell French-3rd edition

Project management by Jack R. Meredith and Samuel J.Mantel

Bangladesh Labor and Industrial law by Prof. A.A Khan

Bangladesh Investment handbook 2007 by BOI

Documents

Midcity New Ppr