Project Proposal For Setting up Green Tea (KAHWA) Manufacturing

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Executive Summary This is a project proposal is for the manufacturing of Green Tea (KAHWA) in Kashmir. Kahwa is a traditional green tea from the mountains Kashmir Valley. It has various health benefits among which the most prominent is its lack of caffeine. This is the primary aim for us to promote this product for the UK market since as per the statistics an average working person consumes at least one cup of caffeine (tea) on a daily basis. 1) Foundations for this Project a) Increasing the demand for Green Tea in the UK The history of tea drinking can be traced to the hill tribes of Kashmir where Tea leaves have probably been utilized and drunk for centuries. In a fast growing consumer era, to meet the instant demands of the customers, tea is another commodity that has increased demand. Keeping pace with the fast lifestyles, there is a growing market for instant tea supplies. Currently there are four types of instant teas available in the market. 1. Instant tea soluble in cold water 2. Instant tea soluble in hot water 3. Instant green tea soluble in cold water 4. Chemically treated tea soluble in cold water The current annul demand for the respective powders are as follows; TYPE OF INSTANT TEA Instant tea soluble in cold water Instant tea soluble in hot water Instant green tea soluble in cold water TOTAL DEMAND DEMAND IN MT 16,000 2,000 6,000 35,000 lsbm/MRPP 2

Chemically treated tea soluble in cold water 11,000

Global Instant Tea Demand

Instant tea in cold water

11,000 , 30%

Instant tea in hot water

16,000 , 46%

Green tea in cold water Chemically treated tea

6,000 , 15%

2,000 , 9%

Currently, there are almost no arrangements to meet global demand for instant green tea from Kashmir. The only factory in Kashmir has a contribution of 1,000 tons of instant green tea, which is only 4% of the total global demand.

b) Raw Material Broken Mixed Fanning's (BMF) are raw materials that are used to manufacture instant green tea, which is obtained from green tea leaves processing. The total tea production for year 2009 was 100,000 Metric tons. The BMF made out of this is approx. 10,000 tons. The factory currently operating in Kashmir uses 3,000 tons. There is a balance of 7,000 tons available that can be used to set up the Kashmir tea-manufacturing factory. Therefore there is ready stock of raw material available for the project.

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c) Political Environment Since the Kashmir economy has suffered a great deal in the past, this project is promising in the sense that it shall create employment opportunities and additional revenue to the state. The governing authority of Kashmir has given their consent for this project seeing its benefits. The initial foundation for the project has already been laid and it is down a few paper formalities before kick-start of the project.

d) Technology Monopoly in this market exists in Kashmir due to lack of technical knowledge. This is one of the main reasons for investors not being interested in this business in the past. However, we have acquired full knowledge of the production process and know what procedures to follow to make this project a success.

2) Market Analysis a) Vendors Amongst the major global tea vendors, a very few supply instant tea (Nestle, Unilever etc.). Kashmir provides only 4% of the global demand for tea out of which green tea has not yet been exported. Hence, there is tremendous scope to grow this industry.

b) Buyers At present the buyers that purchase tea directly are a handful. Amongst these Nestle and Unilever are the most prominent buyers. The global average market price for quality instant tea is around GBP 4/Kg. Europe is amongst the main distributors for tea. More so a reason for us to develop a market need for green tea (KAHWA) in the UK. lsbm/MRPP 4

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CAPITAL COSTS

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From the above costing and investment planning, we can deduce that the full investment cost should be recovered within a year of the companys commencement. Schedule To establish the setup the Kashmir factory will approximately require a period of 12 month and a detailed plan will be afforded at a later date.

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Investment Various investment options can be considered for this project such as bank loans, venture capitalists and private investors. Details to be provided at a later stage. Conclusion In view of the above discussion, this project will be highly lucrative for prospective investors since it has low investment costs and risk factors attached to it and promises a high return on investment.

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Project Diary

5th December 2010 We discovered how Melissa Caf operates and the scope for introducing a new product for the UK market. 9th December 2010 We discovered a new product for Melissa Caf London (Green Tea KAHWA Instant Mix). 11th December 2010 We carried out a market analysis researching statistics for consumption of tea and the scope of introducing KAHWA Mix for the UK market. 16th December 2010 We commonly agreed on a budget plan for the project and scanned the Kashmir market for appropriate vendors. 19th December 2010 We designed our development activity logs and roster chart. We also reviewed the project status to fill the necessary gaps. 21st December 2010 We looked at miscellaneous documents like the project schedule and budget.

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