SEA-BUCKTHORN LEAF TEA PROJECT

BUSINESS PROPOSAL

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CONTENT1

Content

MARKETDomestic market Foreign market

FINANCE Investment Sales Profit

MARKETING Introduction campaign Marketing strategy

INTRODUCTION Project outcome Team Basis

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BASISPROJECT INTRODUCTION 1

PROJECT NAME: SEA-BUCKTHORN LEAF TEA PROJECT

MISSION:

Mongolian food industry volume: Import - 412 million dollars Increase - 18%

Tea market volume: Total 5 million dollars Domestic tea production increase: 26%

Project reach:

First phase: Mongolia and JapanSecond phase: World market

TO INTRODUCE A NATIONAL BRAND TO THE WORLD MARKET

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VALUE COMPARISONPROJECT INTRODUCTION1

BASIS:

1. Coffee and brown tea uses are decreasing, but healthy tea use is increasing. (Mongolia,

Japan)

2. It prevents from cardiovascular diseases, radio wave poisoning and even cancer

3. It contains several types of vitamins and minerals, therefore it is able to satisfy daily

vitamin requirements.

4. We will provide user-friendly packaging, make it easy to use

Line of activity

Mission To introduce the most vitamin-rich product to the world market andopen a new potential export gateway for Mongolian economy

MANAGEMENT TEAM PROJECT INTRODUCTION1

Management team

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Sea-buckthorn leaf tea manufacturing | Foreign trade

Foreign Trade Specialist E. Yeruult

CEO B. Bilegtsaikhan

Sales & Marketing Manager G. Janchiv

Accountant A. ErdeneExport Manager A.

LkhagvasurenFood Technologist- 1,

Factory Worker-4

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OUTCOMEPROJECT INTRODUCTION1

PROJECT OUTCOME

NEW PRODUCT

• To satisfy daily vitamin requirements

• To introduce a new production line to Mongolian tea manufacturers, that will be used to produce this type tea

ECONOMY

• A new Mongolian brand will emerge

• Export our product to the world market

• 10+ permanent new jobs will be created

SOCIAL IMPACT

• Increased healthy tea consumption • Healthy way of living, beauty-

benefits

HIGH PROFIT MARGIN

• Net capital: 329 million tugrik • Foreign investment: 179 million tugrik• Net profit in the first year is 90 million

tugrik. • Investment payback period is 2 years.

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SEA-BUCKTHORN GROWING LOCATIONPROJECT INTRODUCTION1

Sea-buckthorn grows in several countries around the world, but the best one grows in Mongolia, plus healthy tea consumption is increasing, which gives us an opportunity to export our products to the world market.

Export price (1 ton sea-buckthorn price)

2011 year

Hungary $ 6,772

New Zealand $ 4,383

Import price (1 ton sea-buckthorn price)

2011 year

Netherlands $ 3,158

Great Britain $ 2,138

France $ 2,059

World average $ 994

Export countries

2010 year 2011 year

Total 1,560,000 924,829

Vietnam 230,796 456,882

Spain 173,222 124,488

Netherlands 39,654 51,454

Thailand 276,648 292,005

Import countries

2010 year 2011 year

Total 674,680 1,876,318

China 334,206 351,796

Russia 224,957 249,952

Germany 115,516.80 128,352

Sea-buckthorn export and import countries and E&I volume ($)

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RAW MATERIAL RESEARCHMARKET RESEARCH2

Raw material characteristics

A Japanese company conducted a research on purity of sea-buckthorns, that grown in Russia, Xinjiang and Uvs province of Mongolia, guess what? Sea-buckthorn from Uvs province turned out to be the best one, so one of the Japanese companies now is importing sea-buckthorn juice called “Yellow Doctor” from a Mongolian company Jivertiin Orgil LLC.

Technological characteristics

Grown sea-buckthorn should be used for juice production, because grown sea-buckthorn contains a large amount of fruit flesh, but wild sea-buckthorn, that contains a small amount of flesh with high vitamin-content can be used for tea production as a flavor.

Yellow Doctor juice, it is now being exported to the Japanese market

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JAPANESE MARKETMARKET RESEARCH2

# Total population 126.434.964 (10th)

1 GDP $4.770 trillion (2014)

2 GDP growth -1.8% (2014)

3 GDP per capita $37.540 (26th)

4 Yearly tea consumption 118000 tons

5 Yearly tea consumption per

person

2.5 liters

The Japanese agricultural sector accounts for about 1.4% of the total country's GDP.Only 12% of Japan's land is suitable for cultivation.Japan has a highly developed tea culture, which makes it a desirable location for tea export.

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PRODUCTMARKETING PLAN3

Sea-buckthorn leaf tea (It is made of sea-buckthorn leaves)

Mineral & Vitamin

Health benefits Target market

Sea-buckthornleaf

The leaf contains a lot of healthy stuffs like vitamin A, E, B1, B2, B6, C, also omega 3 and 6 to shield us against radiation

• Sea buckthorn leaves and flowers are used for treating arthritis, gastrointestinal ulcers, gout, and skin rashes caused by infectious diseases such as measles. A tea containing sea buckthorn leaves is used as a source of vitamins, antioxidants, protein building blocks (amino acids), fatty acids and minerals; for improving blood pressure and lowering cholesterol; preventing and controlling blood vessel diseases; and boosting immunity.

• Users looking for health drinks

• Women for beauty purpose

• Office workers• Japanese

consumers• Excessive

computer users

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SWOT ANALYSISMARKETING PLAN3A

DV

AN

TAG

E

Danger

• Economic recession • Purchasing power decline • Foreign currency risk• Competitors: There are

several imported products

MARKET OPPORTUNITY

Opportunity• Government sponsored “Sea-Buckthorn

Program” • Increasing eco-product use• Japan-Mongolian Economic Partnership

Agreement • Japanese people are very interested in

the sea-buckthorn leaf tea, because of its high vitamin and mineral content

Advantage

• Highly nutritious eco-product

• Highly skilled team and distinct marketing

• User-friendly packaging

Disadvantage

• 57% short of the net investment, lacking current asset

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FACTORY LOCATIONMARKETING PLAN3

PLAN DRAWING LOCATION

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HUMAN RESOURCEMARKETING PLAN3

Board

（5）

CEO

Foreign Trade Specialist

（1）

Export Manager

（1）Accountant (1)

Sales Manager

（1）

Technologist

（1）

Factory Manager(1)

Factory Worker (3)

TEAM MEMBER CREDENTIALS:

• Business Economics • Marketing Management • Foreign Relations • Law & Economics • Foreign Trade Management • Factory Technology

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INVESTMENT FINANCIAL PLAN 4

PLAN TUGRIK PERCENT

Net capital 84,636,514 24%

Operating cost 90,186,615 26%

Project execution 23,010,000 7%

Net loan financed investment 197,833,129 57%

Net self financed investment 150,000,000 Factory compound

Net investment 347,833,129 100%

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INVESTMENT FINANCIAL PLAN 4

STARTUP PHASE INVESMENT (MONGOLIAN TUGRIK)

Expenditure sheet Total price Note

PROJECT EXECUTIONBusiness travel 5,150,000

Business service 1,980,000Equipment installation, operational training 15,880,000

CONSTANT OPERATION Operating cost 58,286,615

PROCUREMENT Basic equipment and machinery total price 72,686,514

All equipment 62,713,774

Transportation cost 5,972,740From factory in China to

Ulaanbaatar

Factory address nameplate 4,000,000Necessary tools and devices 11,950,000

84,636,514

TOTAL 197,833,129 Startup investment

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INCOME STATEMENTFINANCIAL PLAN4

INCOME STATEMENT MNT – MONGOLIAN TUGRIK

2015 (MNT) 2016 (MNT) 2017 (MNT)

Income

Working period -

4 months 12 months 12 months

110,880,000 395,640,000 400,680,000

Total 110,880,000 395,640,000 400,680,000

Raw material cost 28,030,464 99,380,736 100,654,848

Salary 39,350,000 85,800,000 85,800,000

Individual income tax,

health insurance tax 4,328,500 4,544,925 4,772,171

Depreciation &

amortization cost 522,615 2,639,205 2,771,165

Electricity 1,200,000 1,260,000 1,323,000

Heating 500,000 1,500,000 1,575,000

Water supply 160,000 480,000 480,000

Internet 78,000 234,000 245,700

Marketing cost 1,250,000 15,000,000 15,000,000

Miscellaneous cost 5,000,000 5,000,000 5,000,000

Net operating cost 80,419,579 215,838,866 217,621,884

Profit before tax 30,460,421 179,801,134 183,058,116

Tax 3,046,042 39,564,000 40,068,000

Net profit after tax 27,414,379 140,237,134 142,990,116

Thank you for your attention!