Transcript Alameda Organic Oat Processors

Organic Oat Processors
Prepared by:
Jesse Coleman
Cody Hansen
Megan Hall
Rachel Li
Industry Overview
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In 2003, organic oats make up about
48707 acres of prairie farmland
Organic oats are experiencing
approximate growth of 20% growth,
which is expected to increase
Operations
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Land will be purchased, building and
storage facilities will be constructed.
To obtain financial support from local
producers or companies.
Production will run 288 days per year
to achieve 7000 tonnes in the first
year, and reach 324 days production
for 11048 tonnes in year 5.
Organizational Structure
Board of Directors/Investors
General Manager
Administration
Head Miller
Assistant Miller
Quality Assurance
Labour
Grain Manager
Facility
Product Flow
Average Day, Week, Year
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Plant would be open 21 hours a day, and
run 17 hours.
6 days per week
Employees will be scheduled around 3 shifts
per day, operating 6 hours per shift
One Hour Lunch Break
5733 hours of operation in a year(48 weeks)
4 weeks of holidays per year
Certified Oats
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HACCP- prevent any future problems
Saskatchewan Organic Certification
Agency- make sure proper organic
rules are being follow
Saskatchewan Food Inspection
Agency- follow the procedures
Human Resources
Plan
Job Descriptions
General Manager
 Look for potential employees
 Report directly to the Board of Directors
 Overall responsibility for all aspects of the operation
 Give direction of the purchasing of the key materials
Administration
 Accounting and administrative
 Receive orders and setup shipment, as a back up GM
Head Miller
 Experience in operating any kinds of oat milling
operations
 Maintain all aspects of production, shipping and
receiving at optimum
Job Descriptions
Quality Assurance
 Responsible for quality control and quality assurance
 Performing technical service and support for the
customer base
Grain Manager
 Familiar with the raw grain
 Easily recognized the grain quality and milling
characteristics
Assistant Head Miller
 Running evening or night shift as back up to the Head
Miller
Labors
 Three labors maximum
 Bagging, warehousing and outbound shipments of grain
Training
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Training will be provided for the employees
upon joining Organic Oat Processors .
Certain courses will be taken to work at
certain job in the facility.
All laborers required:
– WHIMIS
– First Aid
– HACCP
Human Resources
Strategy
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Offer above average salaries
Increase with inflation and possibility
of bonuses
Christmas parties and staff/family BBQ
to ensure high company morale.
Everyone can get a Company jacket
Employment Cost at
Farm
Staff
position
General
manager
Head
miller
Administratio
n
Quality
assuranc
e
Grain
manager
Assistant
head
miller
Labor
Number
1
1
1
1
1
1
3
Annual
salary
65000
55000
40000
40000
40000
40000
84000
Benefits
(18%)
11700
9900
7200
7200
7200
7200
151200
E.I
(1.95%)
1267.5
1072.5
780
780
780
780
1638
CPP
(4.95%)
3217.5
2722.5
1980
1980
1980
1980
4158
Comp.
(5%)
3250
2750
2000
2000
2000
2000
4200
Total
cost
84435
71445
51960
51960
51960
51960
245196
Marketing Plan
Promotion
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Organic Oat Processors will be marketing
their product to larger companies that are
not in the area, or in the province.
Local media ads will not be needed.
The company will hire an advertising
company to be sure that their target
customers are informed of their product,
how to contact them and how to get the
product.
Place
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The market for organic oats is a very small
one in Saskatchewan.
Will be marketing to large companies, areas
such as Michigan (Kellogg’s), and Chicago
(Kraft)…
To move product into those areas or to
grocery stories across Western Canada,
trucking will be the main mode of
transportation.
Segmentation, Targeting,
Positioning
Segmentation
 Large retailers: Kraft, Robin Hood.
 Could also target the individual
consumer.
 Possibly address the potential of
ordering product through the internet
Segmentation, Targeting,
Positioning
Targeting
 Target the large retail consumers.
 These groups would purchase the
most amount of product.
 Companies like Kraft, Robin Hood, and
Kellogs
Segmentation, Targeting,
Positioning
Positioning
 You would most likely try to market
your product as being of very high
quality. Promoting the health and
consistency of your product to set it
above the competition.
 This will allow you to bring a premium
and make the consumer feel more at
ease about buying your product.
Market Analysis
The Market
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Growing industry
Organic oat can be made into many
different food products.
Possibilities are endless for this product if
properly marketed.
Also there’s a strong demand for organic
foods in Europe which opens up a large new
market for organic oat’s.
Market Analysis
Competition
 Two major companies involved with the
mailing of organic oats in North America are
Grain Millers and LaCrosse Milling.
 Grain Millers recently purchased the
Popowich mill located in Yorkton. Locally
this will be the only competition here in
Saskatchewan.
 Other large milling companies include
General Mills, ConAgra Grain Processing
Group, and Can Oat Milling Product Inc.
Financial Reports
Sales Revenue
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For a 2008 projection, Oat Processors
could receive up to 6,160,000 dollars
Looking further down, there could be
revenues reaching over 11,000,000
Best and Worst Case
Scenario
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We factored in a price swing of 20% in
either direction. The numbers show
that a 20% decrease in price would
produce a negative net income. This
would translate into a loss of
1,632,059 with a IRR less than zero.
Where as best case scenario would
bring a net income of 120,000, and an
IRR of 62%.
Sensitivity Analysis
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Looking at price as a critical variable,
we discovered that the price would be
able to move from a 34.1% IRR
(Internal Rate Of Return) to a 0% IRR
by fluctuating price 14%. This means
that if the product price moved down
from $650.00/tonne to a 0%IRR
($560.00/tonne) the price sensitivity is
14% of the predicted sales price.
Cost of Oats
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3,001,250 Raw Product
(245.00/tonne)
4,697,679 Total Cost of Goods Sold
(671.10/tonne)
Sales Revenue
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4,550,000 Finished Goods Revenue
420,000 By-Product Revenue
=4,970,000 Total Sales
Gross Profit
-
4,970,000
4,697,679
= 272,321 First Year Projections
Vs.
2,837,024
Ten Year Projections