Transcript Slide 1
Theresa Maximnuk Kirby Poirier Sara Wielgosz Tyler Wilson Introduction Proposing a Pasta Processing Plant to produce Whole Wheat Pasta Plant will be established in Swift Current, Saskatchewan Funded by private Saskatchewan Investors and a Bank Operating Loan Using Home-Grown Prairie Durum wheat to make a value-added product Operations Plan Organizational Structure Board of Directors - 5 Investors Manager Sales Manager Secretary Production Staff Lot Location #1 #4 Site Plan Prairie Pride Pasta’s Floor Plan Process Flow Finished product Storage Room Business Cycle Business Hours – 8:00 to 4:30 Daily Plant workers stay extra hour Optimum – 7 hours a day production Durum delivered to plant every 2 weeks Potential of plant 21,000 kg/week Total Production - 1,209,600 kg per year Standards & Regulations Set out by Canadian Food Inspection Agency Prairie Pride Pasta must follow food processing regulations HACCP program present ISO 9001:2000 recognized business Investment Requirements Capital Budget Summary Land $43,240 Building Costs $267,650 Equipment $846,500 Working Capital $85,197 Total Capital Required $1,242,587 Human Resource Structure Prairie Pride Pasta’s Employees Operations Manager – $70,000 Sales Manager – Base $45,000 plus 1% commission – potential of $60,000 Secretary - $35,000 Plant Labourers – $12.00 per hour Marketing Plan The 4 P’s Product Pricing Market based competitive price Promotion Whole Wheat Pasta (Long and Short) Health Food Product, Low Carbohydrates, Highly Nutritious Place Independent, Locally owned, corner stores Segmentation, Targeting & Positioning Potential Targets Segmentation Large Scale Grocery Chain, Independent Grocery stores, Specialty Stores Variety of Customers that shop at different locations and store types Positioning Convince customer to pay premium price for quality product SWOT Analysis Human Resource Physical Resources Location, Modern Equipment, and Facility Financial resources Sales Manager is key! Bank loan and private investors External Opportunities & Threats Market trends Grain prices New products Market Analysis Whole wheat market increasingly growing Conventional market gong down due to trends Target markets – Health food conscious people Customers willing to pay premium Product features – high nutrient, mineral, fibre, low-carb Marketing Strategy Sales and Profit Objective “25% pre-tax profit by selling 75% of the plant’s production capacity” Channels of Distribution Using Wholesaler/Distributor to distribute product to stores RBR Food Brokerage Ltd in Calgary Marketing Budget Packaging - Design and Costs $5,000 Sponsorship & Donations $5,000 Office Supplies – Marketing purposes $3,000 Product Brochures $2,000 Sales & Marketing Manager Expenses$51,800 Total Marketing Budget $66,800 Financial Plan Financing Long Term Debt $500,000 Owner's Equity $744,411 Total Financing $1,244,411 Dividend Policy Dividend paid if: Cash flow – (working capital + 15%) Dividend Policy Schedule 2008 12,924 2009 144,870 2010 230,908 2011 284,389 2012 2013 340,736 361,952 2014 2015 368,658 372,944 Production Costs Year 2014 2006 - Breakdown of $1.19 $1.64 Production production Cost Durum, 0.21, 13% Operating Operating and and Marketing Marketing Costs, 0.35, Costs, 28% 0.61, 38% Overhead, 0.21, 22% Boxes, 0.03, Durum,2% 0.25, 20% Packaging Boxes, 0.05, Materials, 4% 0.2, 13% Overhead, 0.43, 24% Direct Packaging Materials, Direct 0.23, 18% 0.15, Labour, 10% Labour, 0.10, 8% Sensitivity Analysis 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Worst Case Base Case Critical Variables Direct Labour Quantity of Sales Penne Quantity of Sales Spaghetti Best Case Selling Price IRR Best and Worse Case Scenario Prairie Pride Pasta ??? Feasible under current financial model Main obstacle: achieving sales quantity Internal Rate of Return – 24.6% Hiring bold and exciting sales manager Sales figures reflect growth that Prairie Pride Pasta will take into the future “Prairie Pride Pasta is looking to become a recognizable, reputable, as well as profitable business in the value-added sector of Saskatchewan’s economy”