Village Scale Coco Foods Processing Plant Pre Feasibility Study

VILLAGE-SCALE COCO FOODS PROCESSING PLANT BUSINESS OPPORTUNITY PROJECT SUMMARY

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Partnerships in Local Enterprise Development and Governance Sustainability (PLEDGES) Program BUSINESS OPPORTUNITY PROJECT SUMMARY VILLAGE-SCALE COCO FOODS PROCESSING PLANT PROJECT CONCEPT: The Project adopts the concept of a Village-Scale Coco Foods Processing Plant with a daily capacity of only 1,000 nuts as the most affordable and viable initial phase of a fully integrated community coconut central. At this initial scale, the 300,000 coconuts raw material requirement can be supplied by as low as 20 hectares at the average annual production of 15,000 per hectare of a fully planted and productive coconut farm. The Project shall adopt the “wetdry” process that eliminates the conventional copra making phase (see process flow diagram at the back page). The Project shall involve available local technologies that are adapted to local conditions. A major departure from conventional practice is the use of biomass, e.g. rice hull and/or corncobs, as fuel for all cooking and drying operations. Such a set-up allows the full recovery of the economic value of the coconut shell and husk, which are partly (in some cases fully) consumed in copra-drying and edible oil production processes. Instead of the traditional practice that takes about 3 days of copra drying, the “wet-dry” process produces coconut oil and aflatoxin-free sapal meal within 24 hours. The main product lines at this initial stage include: beverage from the nutrient-rich coconut water; gata (fresh coconut milk), virgin oil and sapal feed ingredients from the meat; and charcoal from the cocoshell. The coconut husk supply shall initially be sold as fuel to household users and delicacy makers. After attaining stable operations of the initial product lines, the village-scale plant shall expand operations and/or be replicated in other villages, and the cluster shall evolve the fully integrated municipal-level coconut central. The central shall at this point incorporate the decorticating facilities to convert the coconut husk to produce coir and peat, and grinding equipment to produce coco flour from the sapal byproduct. DAILY PRODUCTION: PRODUCTS AND BY-PRODUCTS VOLUME (1000 coconuts per day, 25 days per month) Sapal, Pressed Dry, for sale to livestock/poultry raisers @ 30% of granulated meat (kg)

DAILY VOLUME 132

Pure Coconut Milk for sale to food processors @ 33% of total volume (liters)

103

Virgin Oil @ 66% of pure milk volume, 60% yield (liters)

122

Coco Protein (Whey) @ 4% of volume of pure coconut milk processed to oil (kg) Coco Uncola: @ 8oz or 239mL per bottle (Cases, 24 bottles)

2 42

Charcoal: @130 gm per shell and 33% yield (kg)

43

Coconut husk, initially for sale to native delicacy makers (pcs)

1,000

ANNUAL OPERATING INCOME: PhP 1.15 million ESTIMATED TOTAL PROJECT COST: PhP 2.41 million RETURN ON INVESTMENT RATE (R0I) /PAYBACK PERIOD: 47.7% p.a. /2.1 years FOR MORE INFO, PLEASE CONTACT: SOPREX Foundation MSU-IIT Campus, Tibanga, Iligan City 9200 Tel./Fax: (063)223-8481/223-8077 Cell Phones: 0918933172 (Maya); 09189420065 (Yesnoy)

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PRODUCTION PROCESS FLOW DIAGRAM WHOLE NUT

HUSKS

DEHUSKING

COCONUT WATER

SPLITTING

BEVERAGE PRODUCTION

SCOOPING

BOTTLED COCO UNCOLA

COCO MEAT

COOKING IN OIL

GRANULATING

CHARCOAL

EXPELLER EXTRACTION

DEFATTED DRIED MEAT (SAPAL)

EXPELLER EXTRACTION

COPRA MEAL

CRUDE COCONUT OIL (CNO)

COCO SHELL

CHARCOALING

FRESH GATA

LOW HEAT BOILING

VIRGIN OIL

COCO WHEY

Table 1. ESTIMATE OF TOTAL PROJECT COST &FUNDING SOURCES ITEM

I. FIXED ASSETS COST: Land and Land Improvements Land: 500 sqm @ P150 Land Improvements: 500 sqm @ P200 Sub-Total Buildings Production Plant: 75 sqm @ P3,500 Administrative Office: 12 sqm @ P5,000 Sub-Total Plant Machinery & Eqpt. Inc. 5% installation/start-up Transport Equipment: 1 service pick-up Office Equipment, Furn./Fixtures: 1 Lot Sub-Total

AMOUNT (PhP) EQUITY GRANT/ CLIENT LOAN

TOTAL

% SHARE

75,000 75,000

100,000 100,000

75,000 100,000 175,000

3.1% 4.2% 7.3%

-

262,500

262,500

10.9%

60,000 60,000

262,500

60,000 322,500

2.5% 13.4%

670,614 670,614 120,000 120,000 50,000 50,000 185,000 1,153,114 1,338,114

27.9% 5.0% 2.1% 55.6%

II. PRE-OPERATING EXPENSES & OTHER ASSETS Business Organization & Related Expenses 25,000 Feasibility Study & Detailed Engineering 100,000 Engineering Construction Supervision 50,000 Training & Technology Transfer 100,000 Travel & Miscellaneous Expenses 50,000 Sub-Total 325,000

25,000 50,000 150,000 50,000 275,000

50,000 100,000 100,000 250,000 100,000 600,000

2.1% 4.2% 4.2% 10.4% 4.2% 24.9%

III. INITIAL WORKING CAPITAL (2 months)

469,548

469,548

19.5%

TOTAL % Share

-

510,000 1,897,662 2,407,662 21.2% 78.8% 100.0%

Table 2. PROJECTED ANNUAL INCOME GROSS SALES INCOME Coconut Pure Cream Milk @ 30.00 per liter Coco Uncola @ 3.50 per bottle Virgin Oil: @ 25.00 per liter Sapal @ 5.00 per kg Coco protein (whey): @ 60.00 per kg Charcoal: @ 5.00 per kg Coconut husk @ 0.10 per pc TOTAL LESS: PRODUCTION COST DIRECT COST OF PRODUCTION Direct Materials: Whole Nut 3.50 per piece Cooking Fuel (Rice Hull) 10 per sack of ricehull Beverage flavoring & other ingredients 0.50 per bottle Other processing supplies 20.00 per day Packaging Supplies Pure Coconut Cream 1.00 per liter Virgin Oil 1.50 per liter Coco Uncola Bottle Caps 0.25 per bottle Sapal 5.00 per 50 kg sack Sub-total packaging Total Direct Materials Direct Labor: Factory Workers: 3 @ P90/day. Add: 15.0% SSS, etc. Total Direct Labor: TOTAL DIRECT COST OF PRODUCTION PRODUCTION OVERHEAD Indirect Labor: Mechanic/Driver: 1 @ PhP185/day. Add: 15.0% SSS, etc. Total Indirect Labor Utilities: Power: 30 kwhrs/day @ P4.00 Water: 240CM/yr @ P5/CM Telephone/Fax Total Utilities Repairs & Maintenance: 2 % per year on Fixed Assets except land Depreciation Exp.: 15 years ave. ecolife of Fixed Assets except land Miscellaneous @ P100 per month Total Production Overhead

PESOS 924,000 1,054,393 914,760 198,000 36,960 64,350 30,000 3,222,463

1,050,000 60,000 150,628 6,000 30,800 54,886 75,314 3,960 164,959 1,431,587

81,000 12,150 93,150 1,524,737

55,500 8,325 63,825 36,000 1,200 5,000 42,200 25,262 84,208 1,200 216,695

TOTAL COST OF PRODUCTION GROSS PROFIT LESS: SELLING EXPENSES & ADM. OVERHEAD Salaries & Wages: General Manager: 1 @ P8,000/mo. Bookkeeper/Property Custodian: 1 @ P7,000/mo. Secretary/Cash Clerk: 1 @ P5,000/mo. Add: 15.0% SSS, etc. Total Salaries/Wages & other benefits Other Administrative Overhead: 2% of sales Total Selling & Adm. Overhead OPERATING INCOME (NET BEFORE INTEREST & TAXES) ROI (% Per annum) PAYBACK PERIOD (Years)

1,741,432 1,481,031

96,000 84,000 60,000 27,000 267,000 64,449 331,449 1,149,582 47.7% 2.09

Table 3. SCHEDULE OF PLANT MACHINERY & EQUIPMENT 1. Dehusking/Splitting/Scooping/Comminuting and Cocowater Collection Dehusking/splitting/scooping tools: 2 sets @ PhP1,000 Motorized coconut granulator: 1 unit Cocowater collection utensils: 2 sets @ PhP1,000 Sub-Total 2. Coconut Cream and Virgin/Edible Oil Production Screw-press Expeller: 1 unit Cooking Vats: 80-liter SS or Aluminum, 2 units @ PhP2,500 Ricehull-fired Stove: 1 unit @ PhP18,000 Cooking Equipment/Utensils: 1 Lot @ PhP50,000 Freezer: 1 Unit Sub-Total 3. Beverage Production Ice-maker/Chiller: 1 unit Mixing/Pasteurizing Vat: 100-liter SS, 2 units @ PhP5000 Ricehull-fired Stove: 1 unit @PhP18,000 Manual Bottle Capping Equipment: 1 Unit Bottles and Cases: 100 cases @ PhP125/case Sub-Total 4. Other Machinery & Equipment Portable Charcoal Retort: 1 unit Materials handling/eqpt./tools: 1 set Heavy-duty Weighing Scales: 1 Set Maintenance & Repair Tools: 1 Lot Sub-Total TOTAL

2,000 83,780 2,000 87,780 212,400 5,000 18,000 50,000 25,000 310,400 150,000 10,000 18,000 10,000 12,500 200,500 10,000 10,000 10,000 10,000 40,000 638,680