1.

0 Statement of Objectives:

Palm Oil is the vegetable oil which is produced from high quality Palm Oil fruits
mainly in Malaysia and Indonesia. Palm Oil is an option for the edible consumers of
Bangladesh and it is also an innovative value added product of Palm Oil fruits.

Palm Oil demand continues to grow because it is the most versatile of all vegetable
oils. This is because Palm Oil, kernel oil can be processed to form a wide range of
products with different melting points, consistencies and characteristics.

1.1 Short-term Goals:

To offer quality products at a competitively lower price to capture market
share.
To create a demand for edible oil as a best taste option.
To persuade the target customers regarding the benefits of Palm Oil that will
bring familiarity among customers.

1.2 Long-term Goals:

To expand its operation beyond Dhaka in the year 2020.
To set up new industrial unit in the west region of Bangladesh by the year
2020.
To ensure sustainable development of the nation by creating newer utility of
quality Palm Oil fruits.

2.0 International Readiness Assessment:

2.1 Management Commitment:

Management commitment mainly implies direct participation by the highest level

executives in a specific and critically important aspect or program of an
organization. To import palm oil from Malaysia and Indonesia our management will
mainly focus on:

1) setting up and serving on a quality committee,

2) formulating and establishing quality policies and objectives,
3) providing resources and training,
4) overseeing implementation at all levels of the organization, and
5) evaluating and revising the policy in light of results achieved.

2.2 Product Readiness:

Palm Oil is worlds new edible oil innovation.

Palm Oil is commercially and technically viable edible oil option for
Bangladesh which is best taste comparing to Soybean.
Cholesterol and lactose free oil which is helpful for lactose intolerant people
and also free from allergy.

Page | 1
 No artificial sweetener, color and flavor and no animal ingredients,
preservative used in Palm Oil.
Palm Oil is vegan friendly and Non-GMO (Genetically Modified Organism)
product

2.3 Personnel Readiness:

In our business we will employs a number of people to support the overall business
operations.

Firm

Head of Head of Head of Sales

Procurement Processing and
and storage Unit Administration

Admin Marketing Finance

Manager Manager
Manager Manager Manager

Supervisor Supervisor Assistant Assistant Assistant

Staff Staff Staff Staff

At the initial phase, the operation of Palm Oil is monitored by three department
heads. One is head of procurement and storage, another is head of production and
the other is head of sales and administration. The needs of staffs can be illustrated
below based on the organizational structure:

Unit wise Staff Requirement 2018 2019

Procurement and Storage Unit
Head 1 1
Manager 1 1
Supervisor 2 2
Staff 5 8
Processing Unit
Head 1 1

Page | 2
Manager 1 2
Supervisor 4 5
Staff 20 25
Sales and Admin. Unit
Head 1 1
Manager 3 3
Assistant 6 8
Staff 10 15
Total 55 72

2.4 Operational Readiness:

Processing:
We will import Palm Oil from Malayasia. The processing of Palm Oil will be done in
the own operational plant in Narayanganj because of the convenient transport and
communication. The operation of Palm Oil would consist of three phases
procurement and storage, refining and packaging phase.

Procurement and storage

The pre-processing is run by the procurement and storage unit. The procurement
unit is responsible for purchasing 3000.0 MT of Palm Oil and other ingredients in FY
2018 and 3300.0 MT of Palm Oil in FY 2019 and adds 300-400 MT each succeeding
years. The storage unit stores the raw-materials in own 1000.0 MT capacity cold
storage.

Refining phase
The refining phase transforms the unrefined Palm Oil into refined Palm Oil which is
the finished product. The production unit produces 2200-2500 MT Palm Oil in FY
2018.

Packaging
In this phase produced Palm Oil is packed in bottle of 250 ml, 500 ml, 1 litre, 3 litres
and 5 litres.

Placement of Order
The distributors and dealers can place orders by using order form or through
internet. The customers can place orders only through the website.

Delivery
Palm Oil is delivered in 1 dozen retail pack or 50 bottles wholesale pack. The local
dealers are responsible for home delivery with extra commission.

Billing
Palm Oil distributors are required to make payment within 45 days. Accounts
payable would be paid within next year.

Page | 3
2.5 Financial Readiness:

Financial readiness of import marketing plan for Palm Oil will be as follows:

Initial Investments:

Amounts in BDT
Startup Expenses:
License & approval 50,000
Patent & trademarks 50,000
Product development cost 60,000
Infrastructure development 500,000
Others 50,000
Total Startup Expenses 710,000
Startup Assets:
Land & registration 10,00,000
Building 600,000
Machinery & equipment 15,00,000
Vehicle 10,00,000
Cash requirement 20,00,000
Other short-term assets 200,000
Total Startup Assets 63,00,000
Total Requirement 70,10,000

Source of Fund:

Means of finance Amount in BDT % of Total

Equity 49,07,000 70%
Debt 21,03,000 30%

Loan Schedule:

Loan taken (Amount in BDT) 21,03,000

Date of loan taken July 1,2018
Repayment years 05
No. of installment per year 12
Interest rate 15%
Monthly loan installment 50,030

Income Statement:

Particulars FY2019 FY2020

Operating Revenues:
Sales Revenue 108,000,000.00 118,800,000.00

Page | 4
Less: Cost of Goods Sold 86,400,000.00 93,852,000.00
GROSS PROFIT 21,600,000.00 24,948,000.00
Less: Operating Expenses
Salaries 1,100,000.00 1,584,000.00
Marketing Expenses 4,500,000.00 5,500,000.00
Office Rent & Utilities 2,400,000.00 2,640,000.00
Depreciation 410,000.00 410,000.00
Insurance & Others 250,000.00 300,000.00
Total Operating Expenses 8,660,000.00 10,434,000.00
INCOME FROM OPERATIONS 12,940,000.00 14,514,000.00
Less: Interest Expense @ 15% 600,360.00 600,360.00
NET INCOME BEFORE TAX 12,339,640.00 13,913,640.00
Less: Income Tax @ 40% 4,935,856.00 5,565,456.00
NET INCOME AFTER TAX 7,403,784.00 8,348,184.00

Some Financial Indicators:

Rate of exchange USD 1.0 = BDT 80.0
Palm Oil import price assume BDT 55.0/kg
The main Palm Oils price subjected to be increased 5% each year
The entire cost and basic price subjected to be increased 5% each year

3.0 Product and Customer Analysis:

3.1 Overview:

Edible oil is plant, animal, or synthetic fat used in frying, baking, and other types of
cooking. It is also used in food preparation and flavoring. There are a wide variety of
Edible oils from plant sources such as olive oil, Palm Oil , soybean oil, canola oil
(rapeseed oil), corn oil, peanut oil and other vegetable oils, as well as animal-based
oils like butter and lard. We are planning to import Palm Oil in Bangladesh.

3.2 Features and Benefits of Palm Oil:

Palm Oil is extracted from two types of oil Palm Oil fruit: Elaeis guineensis, which is
common in African regions, and Elaeis oleifera, which is found in South America.
Palm Oil also known as red Palm Oil contains high amounts of saturated fat,
vitamins, and antioxidants.

Palm Oil is business model is entirely production or manufacturing-based. Palm Oil

is production process transforms and adds value to the quality Palm Oil fruits and
produces edible oil.

Page | 5
As the name suggest, Palm Oil is derived from the fruits of oil Palm Oils and is
mostly rich in saturated and monounsaturated fats, with the very small amount of
polyunsaturated fat present in it. All these factors make Palm Oil a good option for
cooking. Red Palm Oil, the unrefined form of Palm Oil, is considered to be the best
option as it is rich in Vitamin E, Coenzyme Q10, and other nutrients. Palm Oil is
Original vegetable oil.

3.3 Labeling and Packaging:

Labeling and packaging of edible oil will be as follows:

Poly Packs Pet Bottle
100 ml 500 ml
200 ml 1 liter
500 ml 2 liter
1 liter 5 liter

3.4 After Sales Service, Warranty, Non-Warranty:

Individual after sales service is not required in Edible oil industry. However
business to business transaction, after sales service may require in some scale.
Due to perishable nature of the product, no warranty service is required
unless damage of the product i.e. packaging fault.

Page | 6
4.0 Industry and Market Analysis:

4.1 Size of the Market, Country and Volume:

Total edible oil consumption is forecast to rise 2.7 percent to 2.4 MMT in MY 2017/18
owing to increased population, rising income levels, changing consumer behavior,
and increasing oil use as an ingredient in various feeds. Palm Oil will constitute 1.5
MMT of consumption; soy oil, 0.9 MMT. Other minor edible oils such as
mustard/rapeseed oil, rice bran oil, sesame oil, sunflower oil are not included in this
report.

Per capita consumption of edible oil is 11.25 kg per year. Most households prefer
soybean oil for cooking purposes, but such oil is often blended with Palm Oil. Edible
oils sold in bulk constitute 75% of the market, a segment in which Palm Oil
dominates, while soybean oil is the dominant oil in the bottled vegetable oil market.

Besides general cooking purposes, Palm Oil is also the dominant oil for food
processing industries (13%) and shortening/Vanaspati (fully or partially
hydrogenated vegetable cooking oil) industries (20%); it is also used in the paint
industry. Increases in fast food consumption as well as higher incomes in rural areas
have driven consumption of Palm Oil-soy oil mixes as well.

On March 02, 2017, wholesale prices for bulk soybean oil were BDT 90 - 91 ($1.12
1.13) per liter; bulk retail soybean oil was selling for BDT 95- 96; super-Palm Oil
(Palm Oilolein) was selling for BDT 76 - 80 per liter.

Increasing income and population growth have fueled the consumption of

vegetables oils, particularly Palm Oil and soybean, in a country that suffers from a
large deficiency of domestic production of oilseeds.

Bangladesh, which has a population of 16 crore, consumed 23 lakh tonnes of

vegetable oil in fiscal 2015-16, up 11 percent year-on-year, according to a report
released by the US Department of Agriculture this month.

Page | 7
The import of vegetable oils rose 10 percent year-on-year to 20.4 lakh tonnes in fiscal
2015-16, according to the USDA.

Import and consumption are rising because of gradual improvement in the overall
standards of living, said Bishwajit Saha, general manager of City Group, one of the
biggest commodity processors and marketers in Bangladesh.
People's tendency to have fast food is rising in addition to increasing household
consumption.

Some industrial sectors also use vegetable oil, particularly Palm Oil, for making
snacks such as potato chips and Bombay mix, a traditional snack, according to Saha.
Sweetmeat makers use edible oil, while the paint industry requires vegetable oil too,
he added.

The per capita oil consumption now stands at nearly 11 liters a year, which was 8
liters five years ago, said Shoeb Md Asaduzzaman, head of sales and marketing of
Bangladesh Edible Oil, a leading marketer of cooking oil.
People now have more diversified food habits than in the past because of rising
income.

The domestic production of oilseeds is rising but still remains much lower than
demand.
Locally, oilseed production rose 10.67 percent to 9.34 lakh tonnes in fiscal 2014-15
from a year earlier, according to Bangladesh Bureau of Statistics.

Demand for edible oil is set to increase in the coming decade with demand from
developing countries set to surpass that of developed ones. Particular mention has
been made about the economies of China, India, and Bangladesh, where edible oil is
a basic commodity with growing demand.

Page | 8
According to recent FAO report, global oil seed production is expected to grow by
c.23% by 2020 with US remaining as the main producer, followed by Brazil, China,
Argentina, India etc. Total production is expected to be within 505 million metric ton
(M MT). Global vegetable oil production is set to reach 186 M MT within 2020 with
output growth of c.30%. Malaysia and Indonesia will jointly constitute 45% of raw
material sourced, while majority of the rest will be catered by China, Argentina and
Brazil.

4.2 Trends:

The import pace for edible oils in MY 2016/17 is estimated to grow to 2.1 MMT,
which includes 620 thousand MT soybean oil, and 1.5 MMT Palm Oil. Rising
domestic consumption for diverse uses will nudge imports up to 2.2 MMT in MY
2017/18, up 0.7 percent over the current year. For the import forecast is Palm Oil, 1.5
MMT. Bangladesh also imports soybean and mustard, crude Palm Oil, and crude
Palm Oil in seed form to be crushed and sold locally.

Bangladesh mostly imports raw materials from Indonesia, Malaysia and from Brazil.
A look into import level indicates uprising demand from 2012 to 2016, followed by
increasing import in the following years.

Page | 9
Domestic Palm Oil Market
Import Trend of Palm Oil In Bangladesh
1650

1600

1550

1500

1450
2015 2016 2017

Palm Oil is the dominating edible oil market since 2003. In 2012, Palm Oil occupied
about 64 per cent market share among the three major edible oils. Palm Oil is
imported both in crude and refined forms. Crude Palm Oil (CPO) and crude Palm
Oil olein (CPL) are refined in local refineries for marketing the refined products. The
imported refined Palm Oil and refined Palm Oil olein are used by vanaspati
manufacturers and food processing industries. Its import and consumption quantity
has now exceeded one million tons, which is likely to grow further to 1.5 million
tons in near future.

Malaysia and Indonesia are the two major supply sources of Palm Oil for
Bangladesh market. During January-August 2013, the total import of Palm Oil was
875,809 tons of which 357,228 tons or about 41 per cent was Malaysian Palm Oil
(MPO) and 518,581 tons or about 59 per cent was Indonesian Palm Oil. The import
quantity of Malaysian Palm Oil during January-August period of 2013 was higher by
95.62 per cent compared to January-August period of 2012. This increase in import of
Malaysian Palm Oil in 2013 has been due to active presence of MPO suppliers in
Bangladesh market and shifting of supply sources from Indonesia to Malaysia by
some of the Singapore-based trading houses, which are active in Bangladesh market,

Page | 10
also contributing to increase of Malaysian Palm Oils import share in the country in
2013.

4.3 Tariffs:

To import Palm Oil from abroad, we have to give 15% VAT and 4% Advanced Trade
VAT.

5.0 Competitive Analysis:

Our Firm offers Palm Oil in Bangladesh market in first phase. The domestic market
of edible oil is less competitive but the firm faces huge competition from the existing
edible oil brands which are offering the substitute product.

Rupchanda is the largest edible oil brand of Bangladesh. The daily demand of
oil is 37.5 million and the company can meet only 20% of it. So it grabs about
40% of total supply.
Teer is the second largest edible oil plant in Bangladesh. The market share of
Teer had increased to 35% from 20%.
Fresh is the third largest edible oil producer in Bangladesh has a daily
processing capacity of 1 lakh litres of oil although it only processes 40,000
litres daily.

5.1 Price:

Our company will offer competitive pricing for Palm Oil in target market.

Palm Oil positions itself in the market on the basis of low price and high quality
edible oil. The product positioning map shows the unique positioning of Palm Oilo
relative to its competitors.
Our Price:

Per Liter: BDT 60

Competitors Price: BDT 62-65

5.2 Competitive Benefits from Other Palm Oil:

Cholesterol and lactose free oil which is helpful for lactose intolerant people
and also free from allergy.
No artificial sweetener, color and flavor and no animal ingredients,
preservative used in Palm Oil.
Palm Oil is vegan friendly and Non-GMO (Genetically Modified Organism)
product

Page | 11
5.3 Distribution Channel:

Majority of edible oil is traded in loose form in two wholesale commodity market in
the country namely Moulavibazar in Dhaka and Khatunganj in Chittagong.

5.4 Competitors Modus Operandi:

Loosely-packed edible oils occupy about 75% of the market share in the country,
while the bottled edible oils take up the remaining 25%. Palm Oil dominates in the
loose oil market. Majority of edible oil is traded in loose form in two wholesale
commodity market in the country namely Moulavibazar in Dhaka and Khatunganj
in Chittagong. The local manufacturers have many wholesale buyers concentrated in
these two commodity market and the wholesalers pay and take a Delivery Order
(DO) for a future date with quantity information only. The wholesalers sell the DOs
to retailers or to any other traders and the bearer of DO finally take the delivery. This
is in well conformity with future market (speculation) and very much practiced in
commodity marketing system for many years.

6.0 Markets Entry Strategy:

Palm Oils market entry strategy will follow both direct and indirect distribution
channel.
Sales team will use firms covered van to distribute the product to the dealers.
It will use different specific day for specific zone.
Then the secondary distribution channel leads by the dealers distribute the
product by using their own resources. Agreement will be sign up with dealers
about the terms and conditions of the distribution business.
Our management will also make strategic alliance with super stores and
restaurant to sell Palm Oil.

7.0 Target Markets:

Geographic location: Dhaka city for first 5 years (see Appendix A5).

Demographic: Social classmiddle class and high end consumer.

Prospective buyers: Around 2,500,000 (75% of total Dhaka city population fall under
Palm Oils target customer segments)

Page | 12
8.0 Schedule of Activities:

Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr-

Activities 17 17 17 17 18 18 18 18
Trade License and Import
License
Procurement of Land
Application for Loan
Developing Processing Unit
Recruitment of Employees
Machinery Import and
Installation
Contact with Prospective
Suppliers
Import of Palm Oil
Standard Testing and
Approval from BSTI
Initiation of Packaging on
Test Basis
Promotional Activities
Appoint Dealers
Packaging of Palm Oil
Distribution in the Market

Page | 13