2. Executive Summary
2
Introduction
Purpose & Objectives
Business Plan
Manufacturing Process overview
Struture of Co-operative
Technical Analysis
Marketing Analysis
Porter‘s Five Forces
Financial information
Conclusion
Kurkur Papad Cooperative Society
3. Introduction
3
Co-operative Name: Kurkur Papad Cooperative Society
Location: Jhajjar, Gujarat
Year of Formation: 2014-15
No. of Members: 80 Women
Capacity in a year: 180 Kg / Member
Share in Co-operative: Rs. 1200 / Member
Total Equity of its Members: Rs. 96,000
Bank Loan @12%: Rs. 5,64,000
Structure of Co-operative: Two Tier (Village and Dist
Kurkur Papad Cooperative Society
4. PURPOSE & OBJECTIVES
4
Ensure regular market and remunerative prices
Increase in household income
Promote local food and livelihood security
Promote home value-addition through processing of floor
Invest
cooperative
income
from
value-addition
and
diversification to improve living standards of the
local community by establishing health care, education, credit
and transport infrastructure
Kurkur Papad Cooperative Society
5. Business Plan
5
Forming a Co-operative Society with women who are poor and wanted
to do something for their livelihoods generation
Co-operative Society with two tier structure: Village level and District
level
Dist. Union will provide raw materials to village level
District Union is also responsible for packaging and marketing of
produce
If Co-operative Society will make the profit, it will be divided in its
active members as patronage refund
Kurkur Papad Cooperative Society
7. Struture of Co-operative
7
Kurkur Papad Cooperative Society has three tier structures:
Dist. Co-operative
Dist. Co-operative
Union
Union
Vill:1
Vill:1
Vill:2
Vill:2
Vill:3
Vill:3
Vill:4
Vill:4
Vill:5
Vill:5
Vill:6
Vill:6
Structure – Organization Level
Kurkur Papad Cooperative Society
Vill:7
Vill:7
Vill:8
Vill:8
8. Technical Analysis
8
Easy Availability of Raw material.
Scattered suppliers across Himmatnagar, Indore, Dahod, Rajkot, low
switching costs between suppliers and low concentration of sellers.
Suitable Agro-climatic availability for sun drying component of the
manufacturing process; 320 days of bright sunlight in a year.
Easy availability of capital through member contribution, government
subsidies of up to 25% on a loan amount of 10lac and above for setting up of
business unit.
Strong infrastructural support in the state of Gujarat
Kurkur Papad Cooperative Society
9. Marketing Analysis
9
Large number of buyers and sellers
Large number of competitors and relative size, each vying for the share in total value
pie.
Low Entry Barriers, less barriers in raising of capital, low uncertainty in the industry
Quality & Quantity of raw materials assured
Increasing demand to the extent that the industry is unable to meet it through its current
capacity
Latent demand for Handmade and Semi handmade Papad
Transparency in quality through appropriate grading criteria and fairness in quantity
measurement
Kurkur Papad Cooperative Society
10. Porter’s Five Forces Model
10
Threat of New Entrants
Threat of New Entrants
Low Entry Barriers
Low Entry Barriers
Economies of Scale
Economies of Scale
Access to distribution channels
Access to distribution channels
Cost Disadvantages other than Size Related
Cost Disadvantages other than Size Related
Moderate Reactions from Competitors
Moderate Reactions from Competitors
Resources of existing participants
Resources of existing participants
High Supplier Power
High Supplier Power
Moderate Buyer Power
Moderate Buyer Power
Profitability of buyers
Profitability of buyers
Switching costs
Switching costs
Availability of
Availability of
Information
Information
Large number
of competitors
in the market
Local producers,
Lijjat, Bikajiwala,
MDH, Shakti Bhog
Handmade Papad as substitute
Handmade Papad as substitute
No complements
No complements
Kurkur Papad Cooperative Society
Product differentiation
Product differentiation
Information available to buyers
Information available to buyers
Switching costs
Switching costs
Proportion of revenue
Proportion of revenue
represented by sales
represented by sales
11. Financial Analysis
11
1. Total number of members in co-operative are 80 women who are contributing Rs. 1200
per member
2. Total equity of members in co-operative is Rs. 96,000
3. Kurkur Papad Cooperative Society is financing 20% by member equity and 80% by
bank loan.
4. Kurkur Papad Cooperative Society invest in fixed assets Rs. 60,000 and other start-up
expenses is Rs. 6,00,000
5. So, Total required of fund is Rs. 6,60,000 which will be financing by its members and
by bank loan where Gujarat government provided 25% subsidy.
6. In first year, total cash inflow goes on Rs. 13,01,760 and cash outflow on Rs.
10,22,080
7. Net Present Value at the discount rate of 15% of the project is (-40064) and IRR is
Kurkur Papad Cooperative Society
12. Financial Analysis……Cont…
12
Kurkur Papad Cooperative Society are generating total revenue in 1 st year Rs.
13,16,060.
After deducting interest and taxes , Kurkur Papad Cooperative Society have
net profit of Rs. 2,44,864 in 1st year.
In one quintal raw materials, Co-operative is producing Papad of 50 kg,
Khakra of 20 kg, Chaurafali & Mathia 10 kg and Pickles 8 kg with the selling
price respectively Rs. 100,100,100 and 130 per Kg.
So, average total price of produce in quintal is Rs.9040.
Whenever average variable cost of one quintal RM Pickles is Rs. 7555 per
quintal.
Contribution margin is 1485 and contribution ratio is 0.16
Fixed cost of project is Rs. 60,000.
So, Break Even Point (BEP) is 3,65,000 approximately which Cooperative
will achieve in 3rd year.
FINANCIAL ANALYSIS
Kurkur Papad Cooperative Society
13. 13
As the demand of home made food in rowing, the food industry faces a positive supply
pressure.
This coupled with recent freedom provided by the government would create a
favourable environment for the co-operative.
The company is already doing sufficiently well and also took several initiatives for
further improvement.
It should try to adopt newer technologies to stay ahead of the competition.
In addition to this, it should constantly look for adding to the value provided to
customers.
This requires a dedicated marketing and consumer research activity set.
The company should also work on strengthening its internal operations and try to
develop new business models (such as integration).
Kurkur Papad Cooperative Society