Transcript Slide 1

Theresa Maximnuk
Kirby Poirier
Sara Wielgosz
Tyler Wilson
Introduction
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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
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Business Hours – 8:00 to 4:30 Daily
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Plant workers stay extra hour
Optimum – 7 hours a day production
Durum delivered to plant every 2 weeks
Potential of plant
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21,000 kg/week
Total Production - 1,209,600 kg per year
Standards & Regulations
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Set out by Canadian Food Inspection
Agency
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Prairie Pride Pasta must follow food
processing regulations
HACCP program present
ISO 9001:2000
recognized business
Investment Requirements
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Capital Budget Summary
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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
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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
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Product
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Pricing
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Market based competitive price
Promotion
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Whole Wheat Pasta (Long and Short)
Health Food Product, Low Carbohydrates, Highly
Nutritious
Place
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Independent, Locally owned, corner stores
Segmentation, Targeting &
Positioning
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Potential Targets
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Segmentation
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Large Scale Grocery Chain, Independent Grocery
stores, Specialty Stores
Variety of Customers that shop at different locations
and store types
Positioning
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Convince customer to pay premium price for quality
product
SWOT Analysis
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Human Resource
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Physical Resources
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Location, Modern Equipment, and Facility
Financial resources
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Sales Manager is key!
Bank loan and private investors
External Opportunities & Threats
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Market trends
Grain prices
New products
Market Analysis
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Whole wheat market increasingly growing
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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
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Sales and Profit Objective
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“25% pre-tax profit by selling 75% of the
plant’s production capacity”
Channels of Distribution
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Using Wholesaler/Distributor to distribute
product to stores
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RBR Food Brokerage Ltd in Calgary
Marketing Budget
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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
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Long Term Debt $500,000
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Owner's Equity $744,411
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Total Financing $1,244,411
Dividend Policy
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Dividend paid if:
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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 ???
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Feasible under current financial model
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Main obstacle: achieving sales quantity
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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”