Sample Automated Factory Set-Up Proposal

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Automated Factory for the Mixing and Packaging of Bio-Plant and Pro-Plant 100% Organic, Liquid, Microbial Bio-fertilizers.

Note: Some of the actual figures and the name of the country where this proposal has been used have been removed for reasons of confidentiality. This proposal will give interested investors an idea of how the factory could help the country to phase out chemical agriculture.

1. Purpose
Overall Purpose: The overall purpose of the factory is to enable a country to phase out 100% chemical farming, and to change to bio-chemical farming and then to 100% organic farming, with all the economic, social, agricultural, health, and environmental benefits, which this entails.
By moving away from 100% chemical farming, farmers (and countries) will be able to increase their crop yields above what chemicals can achieve while lowering their costs and restoring the fertility of the soil. In addition, farmers will hardly be affected by fluctuations in the world price of oil as the bio-fertilizers are 100% organic and chemical-free.

2. The Location
We are interested in (name of country) for the location, not just because of the potential market in the country for the bio-fertilizers, but also because it would serve emerging markets in other countries in the region.
Because we are offering a bio-fertilizer Credit Fund to the governments of some of these neighbouring countries, we expect to create a large customer base for the factory in the coming 12 months. As an indication of the interest in the Credit Fund, discussions are being finalized now with the governments of (names of countries) for the purchase of US$XXX million of the bio-fertilizers over the next 5 years using the Credit Fund proposal.

3. Type of Factory
While there are two possible kinds of factories that could be set up, namely a bio-fertilizer production factory and a repackaging factory, only the repackaging factory would work, as explained below.
In the case of a repackaging factory, we would make the bio-fertilizers in Bangkok in large quantities, and send them over in 200-litre or 1,000 litre containers. The price would be cheaper than the price for one-litre bottles at US$X.XX per litre. At the factory the bio-fertilizers would be poured into bottles or other sizes of containers, and then sold to the farmers in (name of country) and other countries in the region. The label can be adapted to the country.
The advantage of a repackaging factory is that the cost of the factory is very low. If labour costs are low, you can even start off with a hand-bottling factory, which is cheap, simple, and quick to build. Nothing fancy is needed at all. The most complex item will be a fork lift truck. But once the volume reaches 15 containers per month, you would probably need an automated bottling machine, which is made in Bangkok. If local labour is cheap, a hand-bottling factory could provide 30 containers a month with double shifts. A hand-bottling factory would be much cheaper.
There are two reasons why the repackaging factory would be the option to choose:

a) Expertise
The bio-fertilizers are made with advanced bio-technology processes. If the factory were a production factory the person in charge of the factory would have to have very deep knowledge of bio-technology and microbiology, and their application to bio-fertilizer. In comparison it is very simple to operate a Urea or NPK factory. Furthermore, without the required depth of knowledge, the quality of the bio-fertilizers in a production type of factory would always fall short. Besides, the company President, does not want to give away the secret of his production method as it took him years of research to create the advanced processes.

b) The Cost
A hand-bottling or automated bottling factory would be much cheaper than a production factory. The laboratory in a production factory alone would cost at least US$500,000, and in the case of a full lab, which could be used to serve an analysis purpose for the whole of Africa, up to US$20 million.
In the case of a repackaging factory, many of the items needed can probably be obtained locally and do not have to be sent from Thailand. This will keep the costs down. Automated bottling machines are made in Thailand. The factory building has to be open-air because of the temperature needed by the micro-organisms, and does not need to be expensive.
The bio-fertilizers will be of great benefit to the farmers, the environment, and the people in (name of country) and beyond, and will be a very profitable operation. In addition, it will enable (name of country) to change over from 100% chemical farming to bio-chemical farming and then to 100% organic farming over 3-5 years.

4. Area of Land Needed for the Factory
The size depends on the forecast capacity of the factory. The demand will increase when farmers see the effects, so it is advisable to choose a large area of land that allows for future expansion.
A building of 1,000 – 2,000 sq. meters capacity will cater for 10-20 containers/month. A 20-foot container contains 640 cases x 20 litres, with 4 litres per hectare at the low local rate of consumption. A building of 5,000 – 10,000 sq. meters capacity will cater for 50-100 containers/month. We recommend that the factory is built to cater for at least 50 containers per month while having extra land for future expansion.

5. Production Equipment Needed
30 large tanks (plastic) able to hold 6 tonnes each. These are where the bio-fertilizers will
be poured into and mixed.
30 three-horse power mixers to mix the bio-fertilizer in the tanks; one per tank.
A control mixer to mix the bio-fertilizers when they are poured into each container from the 200-litre drums of bio-fertilizer.
Bottling and labeling machinery. The machinery shown on the quotation will cater for 100 containers per month.
Plastic bottles and packaging material.
A laboratory. The factory can start to operate without this being operational at the beginning. This would serve quality control when the production volume is very large.

6.  Additional Requirements
There needs to a loading bay where the bio-fertilizers that have been packaged in bottles
and/or drums can be loaded onto a lorry. A fork lift vehicle will be needed to carry the pallets of bio-fertilizer boxes. Two fork lift trucks would be needed, especially in case one breaks down. The loading bay should be wide enough for at least two lorries at one time – one delivering and one collecting bio-fertilizer.
There needs to be a road from the edge of the factory property to the loading bay.
There needs to be a storage area for:
storing the bio-fertilizer that will arrive from Thailand in container loads of drums. One container holds 80 x 200-litre drums. If the capacity of the factory will be 100 containers, then there will need to be a storage area for up to 100 x 80 drums (80 drums per container). So, the factory needs to be spacious.
packing materials, namely, enough cardboard boxes, 1-litre plastic bottles, labels, and plastic packaging material for up to 100 containers per month (1,600,000 litre bottles, 80,000 cardboard boxes).
storing up to 80,000 boxes of packed bio-fertilizers on pallets while waiting to be collected by lorries.
Extra space should be available for future expansion. If the government wishes to benefit from Artemis & Angel Co. Ltd.’s over 100 chemical-free products based on bio-technology that have enabled Vietnam to create such a successful tiger prawn farming industry, then create a large area to store the company’s over 100 products, which would be manufactured in Thailand and distributed in (name of country).
An area should be designated for a spacious laboratory.
There should be an area for 3 offices for:
The General Manager.
The Administration Department
The Sales Department
There should be a maintenance area for the preventive maintenance and repairing of machinery, air-conditioners, etc.
A staff area for the staff that should include:
A staff canteen and kitchen.
A staff relaxation room with a television.
Toilets for male and female staff.
Locker rooms: 1) male staff; 2) female staff.
Training Room.
A room with a bed for anyone who gets hurt or falls ill at work.
A security post at the entrance of the factory.
An air-conditioning system in some areas of the factory.

7. Costs
In total, the production equipment, a stock of bottles and packaging material, and staff facilities will cost US$3.7 million, including shipping. The land, building, and air-conditioning are not included. The lab can be set up later as it is very complicated. The factory can get going without the lab. If this amount is acceptable, we would fine-tune the quotation.
At least 50% should be transferred so that the bio-fertilizers can start to be created and the machinery can be built.
It will take 1-2 months to set up the factory once it has been built and the equipment is present.

8. Price of the Bio-fertilizers
Bio fertilizers: US$X.XX CIF per litre in 200 litre-drums.
100 containers X 80 drums x 200 litres = 1,600,000 litres x US$X.XX per litre = US$XX,000,000.

9. Moving Forwards With the Project
There should be enough investors to raise the money needed, which includes the cost of building the factory and buying the bio-fertilizers until they are sold.
Once the decision has been taken to go ahead with the project, a Project Committee should be created to manage the project.
The location should be chosen, and a construction company chosen either to build the factory or to adapt an existing disused suitable building.
The committee should make a timeline for the project and co-ordinate with Artemis & Angel Co. Ltd. regarding obtaining the bottling machine and the other equipment, and transferring the funds.
Marketing activities should start once the decision has been taken to go ahead with the project. Sales should start even before the factory has been built.
The 50% deposit payment should be transferred to Artemis & Angel Co. Ltd. for the production of the bottling machine, sourcing the equipment, and then for producing the initial bio-fertilizer.
Once the factory has been built and the equipment has been shipped to (name of country),
Artemis & Angel Co. Ltd. will start to set up the factory together with the company that made the bottling machine.

Business Plan

1. Executive Summary
Artemis & Angel Co. Ltd. produces two liquid, 100% organic, microbial bio-fertilizers called Bio-Plant and Pro-Plant; a full range of bio-tech prawn farm products; and pro-biotic supplementary feed for livestock and poultry. The bio-fertilizers enable a country to phase out chemical agriculture gradually and over a 3-year period that chemical farmers can accept, by enabling the farmers to change to bio-chemical farming and then to 100% organic farming. If the chemical farmers wish to do so, they can change straight to 100% farming, but usually they prefer bio-chemical farming as the intermediary stage.
The company President, Somkiet Panjanapongchai, created the bio-fertilizers using his discoveries of processes in bio-technology that he made when producing the wide range of bio-tech prawn farm, products in the 1980’s. He has extensive experience and knowledge about how to transform agriculture from chemical agriculture to 100% organic agriculture. Our agent in (name of country) has compiled an extensive list of customers/potential customers, dealers, and agents to market and distribute the bio-fertilizers.
The Feasibility Plan shows the projected profit per month in the first year based on 10 containers will be around US$691,219 while after 12 months the profit should be about US$8,294,628. This profit will increase as the bio-fertilizers gain more publicity. The repackaging will, therefore, clearly be a profitable operation.

2. Artemis & Angel Co. Ltd. Company Profile
2.1 Introduction
Artemis & Angel Co., Ltd. was founded in 1984 by the company President, Somkiet Panjanapongchai. From 1984 until mid-2009 it was called Artemis & Angelio Ltd.
The company has two factories: one for producing granular or powder bio-organic NPK3 and NPK4, and one for producing the liquid bio-fertilizers, Bio-Plant and Pro-Plant, as well as prawn farm products.
The main office is in central Bangkok. The factory is an hour’s drive from the centre of town.
The company has bio-fertilizer agents in about 30 countries in Africa, the USA, the Caribbean, South America, Asia, S.E. Asia, and China.

2.2 The Meaning of the Company Name
Artemis represents the goddess of Nature in Greek Mythology. She was concerned with matters of the outdoors, animals, and environmental protection. She was practical, adventurous, athletic and preferred solitude. She symbolizes regenerative earth power over all living things.
Angelio means “messenger” and “Messenger of God”.

2.3 Company Ownership
Artemis & Angel Co. Ltd. is a limited liability company. Mr. Somkiet Panjanapongchai is the company President while the company is owned by Somkiet and his wife, Mrs. Wattana Panjanapongchai.

2.4  The Products
The company manufactures:
1. Two advanced bio-technology, 100% organic, liquid, microbial bio-fertilizers called Bio-Plant and Pro-Plant. They lower the cost of food production, increase the crop yield
above what chemical fertilizers can achieve, restore the soil’s fertility by infusing it with a huge amount of fast-multiplying micro-organisms, and produce healthy, chemical-free food. In bio-chemical farming the bio-fertilizers enable farmers to halve the amount of chemical fertilizers they use while still increasing the crop yield above what chemicals can achieve.
2. Granular or powder bio-organic NPK3 and NPK4, which can be used to replace Urea and NPK.
3. A full range of bio-technology, chemical-free products for prawn farmers to raise prawns and operate a prawn farm. Our products have played a major role in the development of the black tiger prawn industry in Thailand and Vietnam since the mid-1980’s.
Both the prawn farm products and bio-fertilizers are the result of Somkiet’s research in the field of bio-technology. Bio-Plant and Pro-Plant were created on the back of the success of the prawn farm products with the desire to provide an alternative to chemical fertilizers, which would not only restore the fertility of the soil and increase food production, but also to improve the well-being of farmers. Many aspects of his work in agriculture are not considered possible by “experts”, though farmers welcome the benefits of it nevertheless.

2.5 Credit Fund
The company also provides a US$25 million Credit Fund to governments to enable a country to provide farmers throughout the country with the bio-fertilizers on credit so that the country can make the transition from 100% chemical farming to bio-chemical farming, and then to 100% organic farming.

2.6 Overall Goal
Our overall goal in agriculture is to leave a legacy in each country where we have agents – to enable the country to phase out chemicals in agriculture and replace 100% chemical farming with 100% organic farming, with bio-chemical farming being an interim strategy to achieving this goal.

2.7 New Opportunity for (name of country)
Artemis & Angel Co. Ltd. believes that there is an untapped market opportunity in (name of country) for these two bio-fertilizers as almost all farmers are practising chemical farming. We aim to use the factory to provide a large amount of the bio-fertilizers for a low price in order to start the change from chemical agriculture to bio-chemical farming and 100% organic farming. Within 3 years of effective marketing and publicity, name of country) should be at the point of all farming being bio-chemical farming and 100% organic farming, with the majority being 100% organic farming. Chemical farming should have been phased out by then.
There is growing recognition globally as well as in (name of country) that chemical agriculture is not sustainable, and that it causes the soil to deteriorate to the point at which it cannot be used for agriculture anymore. Apart from not being able to provide the levels of food production that countries need to achieve for food security, chemical agriculture also pollute the waterways and the water supply in towns. In addition, people are becoming more conscious about their health. Poor health affects a country’s economic development negatively. Bio-Plant and Pro-Plant provide the chance to phase out chemical agriculture and to improve these aspects of life in (name of country).
Bio-technology is still very new in agriculture in (name of country). The two bio-fertilizers provide a chance to modernize agriculture. Chemical agriculture is old-style technology. The future of agriculture is in bio-technology, and these two bio-technology bio-fertilizers provide a path to that future.
We have already field tested the bio-fertilizers in (name of country), and the tests were successful, just like the tests have been successful in several other countries, including names of nearby countries). In name of a nearby country) the government is buying a very large amount of the bio-fertilizers in order to phase out chemical agriculture and replace it with bio-chemical farming first and then change it to 100% organic farming over 3-5 years.
We understand that there are no serious competitors to Bio-Plant and Pro-Plant in (name of country).

2.8 Keys to Success
Artemis & Angel Co. Ltd.’s keys to success include:
Consistent high quality in the production and packaging of the bio-fertilizers.
Well-maintained equipment and a smoothly running operation in the bio-fertilizer repackaging factory.
Maintaining and increasing the referral networks to generate new and repeat sales.
Continuous relationship-building, personal support, and training for the farmers, dealers, and agents.
Good planning and communication between the factory and Artemis & Angel Co. Ltd. in Bangkok so that the bio-fertilizers are ordered well in advance and arrive in time.
The bio-fertilizers and factory are effective in helping (name of country)’s farmers to export their produce in increasing amounts to the European and regional markets.
The bio-fertilizers make farmers want to give up chemical farming and to change to bio-chemical farming and/or 100% organic farming.

3. Marketing
3.1 Market Analysis Summary
The bio-fertilizer repackaging factory will serve at least (name of country) and the neighbouring countries of (names of countries). The overall market for the bio-fertilizers is immense as agriculture in each country is at least 95% chemical, and chemical farmers in each of these countries are suffering from the effects and rising costs of chemical agriculture.
In bio-chemical farming alone, chemical farmers can halve the amount of chemical fertilizer they use while still increasing their crop yield by 5%-10%. If they also use pro-Plant to spray the leaves, and soak or mix the seeds with Bio-Plant and also prepare the soil with organic matter mixed with Bio-Plant, the crop yield will increase by about 30% while the expenses drop by about one third.
We expect, therefore, to be able to attract a lot of farmers in each country. Our focus will be the chemical farmers, which make up over 95% of the farmers in each country.

3.2 Market Segmentation
Our market segmentation scheme is fairly straightforward, and focuses on all agricultural sectors. The bio-fertilizers are effective with every kind of crop in every kind of soil – both alkaline and acidic.
After sales service, developing relationships, and training farmers are an important part of our marketing strategy. For example, whenever bio-fertilizers are sent to the factory, a representative from Artemis & Angel Co. Ltd. in Bangkok will travel to (name of country) to train new customer-farmers how to use the bio-fertilizers effectively. The local agents will keep in contact with the existing customers and extend the customer base. Building long-term relationships with customers is one of the key-success factors mentioned earlier.

3.3 Target Market Segment Strategy
We have an in-depth understanding of the needs and problems of chemical farmers in (name of country) as well as generally.
The main target is the chemical farmers, which make up 95% + of all the farmers in (name of country). We have conducted field tests so that farmers can see professional data about the effectiveness of the bio-fertilizers. This is in addition to field test results from other countries. Our agents will answer their questions and fears about the effectiveness and efficiency of our products.
The company cannot be successful quickly by just waiting for the customers to come to order, so we will focus on the dealers who already have their own network of agents. If necessary, we will carry out field tests for area dealers so that they can make recommendations to their network agents and directly to the farmers.
The company’s focus and marketing message will be not only the benefits for the farmers’ crop yields, savings, and income, but also the assistance we provide to help the farmers to change from chemical agriculture to bio-chemical farming and 100% organic farming.

3.4 Competition
We do not seem to have any serious liquid, 100% organic bio-fertilizer competitors. Granular organic fertilizer is not as effective as our liquid bio-fertilizers because it uses old-style granule technology, which the bio-technology of these two liquid bio-fertilizers replaces.
Also, in terms of shipping costs, one container of Bio-Plant and Pro-Plant is equivalent in fertilizer terms to about 35 containers of granular fertilizer being sent to (name of country). This makes our price more competitive.

3.5 Competitive Edge
Our competitive edge is the effectiveness of the bio-technology of the two bio-fertilizers, their superior crop-yield and cost-effectiveness compared to chemical fertilizers, their ability to enable the farmers to halve the amount of chemical fertilizer they use while increasing their crop yield, and the after-sales service, which we will provide. In close-knit communities like in (name of country), reputation is extremely important, and word-of-mouth advertising is invaluable.

3.6 Marketing Strategy and Implementation Summary
3.6.1 Emphasize Customer Service
We will provide guidelines in person for our agents about the standard of customer service that we expect from them. We will exemplify this standard.

3.6.2 Build a Relationship-Oriented Business
We will build long-term relationships with the agents and farmers, not just sell the bio-fertilizers.

3.6.3 Focus on Target Markets
We will hold a meeting for the dealers in each province in order to introduce the bio-fertilizers and to encourage them to work with us.
With a marketing strategy focusing on bio-chemical farming as a way of phasing out chemical agriculture, the dealers can carry on selling their chemical fertilizers but they would also market the bio-fertilizers. This will enable them to have a foot in future of (name of country)’s agriculture while still running their old-style chemical agriculture business. As the farmers in their area change over, the dealers will be ready to adapt to the changing needs and wishes of their customers.
We will carry out such meetings around the country.

3.7 Marketing Strategy
The overall marketing plan for Artemis & Angel Co. Ltd. is based on the following fundamentals.
The segment of the market we plan to target, namely chemical farmers.
The channel planned to be used to reach the chemical farmers; namely, by holding many meetings with the fertilizer dealers in each area and region;
The repackaging factory in (name of country) will enable us to meet new requests for the bio-fertilizers straight away.

3.8 Promotion of the Bio-fertilizers
The bio-fertilizers will be promoted best by holding meetings with the dealers.
If necessary, we will arrange a small number of field tests per province in order to show all of the dealers in that province the effectiveness of the bio-fertilizers.
We will also assist the dealers by holding meetings with their farmers in their villages, with the dealer present.
We will promote the Credit Fund with provincial governments.
We do not plan to advertise in magazines and newspapers, or on television, radio, and billboards as this approach is not effective with farmers.

3.9 Sales Strategy
The direct sales force will consist of our agent with assistance from his sales team.
The agent will manage the direct sales through personal sales calls and direct visits to dealers. This market is a long term, repetitive business where relationships are a key component to success.
We will promote the benefits of the bio-fertilizers, and the company’s wish to help the farmers to increase their crop yields and lower their costs by changing over to bio-chemical farming.
We will encourage the dealers to see the benefits for their business of promoting bio-chemical farming and not just 100% chemical farming.
We will show integrity and a very good customer service attitude in order to develop the company’s reputation.

3.10 Pricing
We will provide a commercial credit policy for business customers with a net 3-month limit for up to 3 containers; a net 6-month limit for up to 7 containers. Credit for over 7 containers will be decided on a case-by-case basis.
The price of US$XX CIF per litre is very competitive with the cost of chemical farming, and enables the farmers to save around 40% in bio-chemical farming (around 33% if foliar spraying is carried out to increase the yield by 20%).
In the case of 100% organic farming, the savings will be higher than 33%.
A 20-foot container of 12,800 litres @ US$XX CIF per litre will cost US$XXX,X00.

3.11 Sales Forecast
By the time the factory opens, we expect to have orders for … containers.
If a provincial government takes advantage of the US$25 million bio-fertilizer Credit Fund, we expect to have a much higher amount of orders as the farmers will be able to obtain the bio-fertilizers for 0% credit until they harvest their crops whereupon they will have to pay back what they have been given.

3.12 Marketing Support
Artemis & Angel Co. Ltd. in Bangkok has two experts in agriculture with an abundance of experience in marketing the bio-fertilizers and in providing assistance to farmers, namely Mr. Somkiet Panjanapongchai and Mr. Peter McAlpine.
Both Mr. Somkiet Panjanapongchai and Mr. Peter McAlpine will train the farmers and hold meetings for dealers when a sale is made. They have both opened up the business in other countries.
Mr. Somkiet Panjanapongchai will be devoted to the production and training responsibilities while Mr. Peter McAlpine will focus on the sales and marketing, and training farmers. The local Country Agent will take care of the day-to-day running of the business in (name of country).

4. The Financial Plan
The following section shows in detail that the bio-fertilizer repackaging factory will be profitable and will repay its costs within 1 year. This includes the cost of the building.

4.1 Key Points
We have investors to cover the 80% investment required above the 20% that the government is kindly considering providing.
We believe that the sales volume is realistic because we have over 1year to carry out marketing activities before the bio-fertilizer repackaging factory will open.
Our operating costs are very low.
The demand for the bio-fertilizers will increase rapidly as they are publicized.

4.2 Projected Revenue and Expenses
The Feasibility Plan shows the projected profit per month in the first year based on 10 containers will be around US$700,000 while after 12 months the profit should be about US$8,400,000.
The total monthly income will be about US$1,920,000 while the income at the end of Year 1 will total about US$23,040,000.
The operating expenses per month, excluding the purchase of the bio-fertilizers will be US$204,781, of which is US$159,955 for the packaging materials.
The depreciation cost is calculated at a high 20% of the building and contents. Because the factory is a repackaging factory, the main item of depreciation is the bottling machine.

4.3 Cash Flow
The difficult period will be the first few months, when the bio-fertilizers and packaging
material have to be bought and salaries paid for.
Many of the sales will probably be made with a Letter of Credit with payment received
after 3 months and 6 months. This will probably mean that most payments will be received in March – April, and June-July. If there are few cash payments for containers to begin with, then there may be a cash flow problem. Artemis & Angel Co. Ltd. in Bangkok will accept the Letters of Credit, of course.
The packaging material has to be paid for. If this can be bought on credit until there is
sufficient cash flow, it will alleviate the problem.
The factory will need financial advice about how to deal with the cash flow problem until
the revenue stream has started to flow.

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