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”