1

INTRODUCTION

Project Rationale
The project is envisioned to create a program for the farmer, non working
house wifes in the locality of village by expanding the irrigable area for a regular
and continuous production schedules among the farmers in the village.
The project will be constructed in Barangay Palusapis Science City of
Muoz, Nueva Ecija, where 90% of its residents are rice farmer and where 30% of
village lands are planted of banana trees.
The project aims to have banana processing facilities for the farmer and
non working housewife of the Barangay. Project helps the village and can be
known as the one of the mango and banana processing in the Nueva Ecija.
The increased economic activities in the village will necessitate the
employment of 50-60% of its residents who are non-working housewife and
farmer.
Primarily, this project will fund of Local Government Unit. This project
requires about Php.4,500,00.00 to construct the necessary features and
equipment.
2

The existence of a Barangays Officials shall help to facilitate the
maintenance, management and operations of the Project.















3

MARKETIG ASPECT

There is no doubt that the market of tilapia fingerlings remains bright.
Banana, being as popular as an economic in agriculture is faced with problems
and sufficient supply and quality fruit. Most of banana farm in Central Luzon just
to scout quality source banana. In Nueva Ecija, the demand and supply gap
remained unfilled.
A.Market Assessment
Demand and Supply Analysis
Banana is one of the most common and widely grown fruit
crops in the Philippines. It is also one of the countrys major dollar
earners, and has consistently ranked next to coconut oil and
prawns in terms of value earnings during the last five years.
Banana has various uses. The ripe fruit is pureed, candied,
and preserved in various forms when not eaten fresh. Its extract is
used in the manufacture of catsup, vinegar,and wine. The unripe
fruit is powdered and chipped.
In rural areas, the young leaves are pounded to suppress
bleeding and treat wounds. The leaves are also widely used as
4

packing materials for fruits and vegetables in market centers.
Banana fiber is manufactured into rope, sack, and mat. Sheets of
paper and paper boards are also made from banana peel.
Banana blossom is exported dried.
Competitor Analysis
Philippine is one of the worlds largest banana exporters.
Large contiguous areas are devoted for commercial production in
four provinces in Mindanao, namely Davao del Norte, Davao del
Sur, South Cotabato, and Misamis Oriental.
Consumer/Client Analysis
Target consumer will be children and old, who was a good
buyer, that can make bought a banana product like chips, catsup
and jam and other more products came from the processing
project.
B.Marketing Program
The proposed project marketing program are composed of Product
Feature/Design, Pricing Scheme, Promotion and Advertisement Strategy,
Product Distribution Strategies, and Target Market Share and Profit
Objectives

5

Product Feature/Design
The proposed project will feature the banana products like
Banana puree, Banana Chips and Banana jam.
Pricing Scheme
The proposed project will classify its product based on the
sizes (small, medium and large). All transaction shall be done on
cash on pickup basis or cash on delivery basis. These sizes will
be sold as follows:
Size of Banana Puree Price per Piece
25g Php. 20
50g Php. 35
100g Php. 65
Size of Banana Chips Price per Piece
25g Php. 10
50g Php. 17
100g Php. 30
Size of Banana Jam Price per Piece
250ml Php. 85
500ml Php. 120

Promotion and Advertisement Strategies
Marketable size of banana products will be packed using
transparent or durable plastic packs and glass bottle. The finished
product will put in box to prevent the accidents in transportation of
finish product safely.
6

Product Distribution Strategies
The proposed project will primarily serve the banana products
requirement of Banana Growers Cooperative of Science City
Munoz farmer-members. Any production excesses will be sold to
non-coop members. Job orders will be accept accepted in a case
basis, depending on the availability of disposable banana.
Target Market Share and Profit Objectives
The proposed project target the market share at 30% supply
in municipality market in Nueva Ecija and 5% supply in nationwide
market in Philippines.








7

TECHNICAL ASPECT

Strictly, the project will comply with recommended to techno guide for
modern banana processing operation. To ensure operational effectiveness, the
support agencies (BAS, PhilMech) and/or consultant(s) will be tapped from time
to time for such purpose.
Plant/Farm Description
The proposed project is developmental-oriented for the
Municipality of Science City of Munoz, Nueva Ecija, envisioned to
produce banana by-products and to help the banana growers of
Science City of Munoz. The project put in Brgy Palusapis Science
City of Munoz near at the large population of the banana growers.
The main row material of proposed project is banana.
Banana has Dietary fiber, fats, protein, vitamin A, Calcium, Vitamin
C, Iron and Calories good for the human.




8

Production Schedule
The proposed project produces a Banana product (Puree, Jam and
Chips). The banana chip are producing every day, banana puree are
produce thrice a week and the banana jam produce twice a week.
Target Volume Yearly
2013 2014 2015 2016 2017 2018
Puree 8640 9072 9525.6 10001.88 10501.97 11027.07
chips 10080 10584 11113.2 11668.86 12252.3 12864.92
jam 12960 13608 14288.4 15002.82 15752.96 16540.61











9

Production Process (es)
Banana Puree









Recieving/
Sorting
Washing Sanitizing Peeling
Slicing Treatment Cooking Bottling
Sealing Storing
10

Banana Chips

Banana Jam


Recieving/
Sorting
Washing Sanitizing Peeling
Slicing Treatment Soaking Sweating
Frying
Quality
Control
Sealing Storing
Recieving/
Sorting
Washing Sanitizing Peeling
Slicing Treatment Sweating Cooking
Bottling
Quality
Control
Sealing Storing
11

Fixed Assets and Facilities
The proposed projects have a fixed assets and facilities like
buildings, delivery car, land, office equipment and processing equipment
and facilities.
Raw Materials and Other Key Inputs
The main row material of proposed project is banana. Banana has
Dietary fiber, fats, protein, vitamin A, Calcium, Vitamin C, Iron and Calories
good for the human.
Waste Disposal System
The proposed project waste material can be decomposed. It can
be use for organic fertilizer making and it can useful for banana growers
member of the Science City of Munoz.






12

ORGANIZATION AND MANAGEMENT ASPECT

Management during the Operating Period
Types of Organization
The proposed project will be held be held by a C.E.O. or
Manager who will be acting as the banana inspector. Under the
supervision of manager will be 0ne (1) accountant, one (1)
salesman, one (1) equipment maintainer-operator and one (2)
Production ire/researcher
Organizational Set-up






Job Description and Job Specification
Chief Executive Officer. The highest ranking executive in a
company whose main responsibilities include developing and
implementing high-level strategies, making major corporate
decisions, managing the overall operations and resources of a
Chief Executive Officer or
Manager
Sales/Seller Production/Researcher

Finance/Accountant
Equipment Maintainer Workers
BAS PhilMech
13

company, and acting as the main point of communication
between the board of directors and the corporate operations. The
CEO will often have a position on the board, and in some cases is
even the chair.
Finance/Accountant. An accountant is a practitioner of
accountancy or accounting, which is the measurement, disclosure
or provision of assurance about financial information that helps
managers, investors, tax authorities and others make decisions
about allocating resources.
Production/Researcher. A programme researcher provides support
to the producer and production team. Researchers contribute
ideas for programmes, source contacts and contributors and
collect, verify and prepare information for business.
Sales/Seller. The provider of the goods or services completes a sale
in response to an acquisition or to an appropriation

or to a request.
Worker/Laborer. A laborer or labourer is a person who does one of
the construction trades, traditionally considered unskilled manual
labor, as opposed to skilled labor.


14

Personnel Compensation and Fridge Benefits
The proposed project will have fringe benefits for all of
employee of the project. They must have a life assurance,
PhilHealth, SSS and etc.
Project Timetable
The proposed project processes will start at 7:00am to 5:00pm
Monday to Friday. And if have improvement of facilities or production
and additional product will proposed in the project it will acquired in
Saturday and Sunday.









15

FINANCIAL ASPECT

With its existing fixed assets the proposed project will require an operating
capital of at least Php 1000000 for a start. This will be used to initially finance its
proposed Banana Processing Project (Phase of its proposed overall Village-
Based Banana Production Project).
Total Project Costs
The budgetary requirement of the proposed project will is estimated as follows;
Particulars 2014 2015 2016 2017 2018 2019
Sales Of
Product
1344480
0
14117040 148228
92
1556403
6
1634223
8.
1715935
0.

Pre-Operating
Expense


Preparation Of
Feasibility Study
130,000.
00

Business
Permit
38,350.0
0
38,350.00 38,350.
00
38,350.0
0
38,350.0
0
38,350.0
0
Land 750,000.
0

Building 1,400,00
0

Machine 120,000
Training Of
Staff
27,000
Delivery Truck 120,000
Contingency 245,535.
00



Operating
16

Expense
Raw
Materials(Bana
na)
2018250 2078797.5 214116
1.
2205396
.
2271558
.1
2339704
.9
Other
Ingredients
113000 124300 136730 150403 165443.
3
181987.
63
Salaries And
Wages
528,000 528,000 528,000 554400 554400 554400
Fringe
Benefits
11520 11520 11520 11520 11520 11520
Packaging
Materials
319600 335580 352359 369976.
9
388475.
79
407899.
58
Depreciati
on:
Equipment

56,000.00

56,000.
00

56,000.0
0

56,000.0
0

56,000.0
0
Depreciatio
n: Utensils
6444 6444 6444 6444 6444
Repair And
Maintenance

108,820.
00

108,820.00

108,820
.0

108,820.
0

108,820.
0

108,820.
0
Electricity
And Water
264,000 264,000 277200 277200 291060 291060
Fuel And Oil 79200 79200 83160 87318 91683.9 96268.0
95
Advertising
Expenses
50,000 50,000 50,000 50,000 50,000 50,000
Sss And
Philhealth
10,000 10,000 10,000 10,000 10,000 10,000
Utilities
Expense
60,000 60,000 60,000 60,000 60,000 60,000
Contingenci
es
178119.5 185633.07
5
191069.
7
197373.
9
203270.
25
208705.
21


Total
Expenses
6,571,39
4.
3,936,644.
58
4,050,8
14
4,183,20
2
4,307,02
5.
4,421,15
9.

Net Income 6,873,40
5.
10,180,395
.4
10,772,
077.85
11,380,8
34.47
12,035,2
13.02
12,738,1
90.93

3740509.
5
3898294.5
7
401246
4.146
4144852
.129
4268675
.4
4382809
.4

17

Financing Scheme and Sources
The proposed project will be financed through loan and coop
equity. About 90% of capital will be financed from outside sources and
10% of capital from internal sources. The budgetary allocation and/or
percentages contribution are presented as:
Items Amount Percentage
ACEF Loan P5940,000.00 90%
Coop Equity Counterpart P660,000.00 10%
------------------------------------- -------------------------------------
TOTAL CAPITALIZATION P6,600,000.00 100%










18

List of Financial Assumptions
1. Sales volume is expected to increase by 5% yearly.
2. Since mushroom processing are build, other mushroom growers will be
encourage to sell their products therefore Yearly production should
increase at 3%.
3. Selling prices are assumed to increase by two pesos a year
4. Other ingredients for processing are projected to increase 10% yearly.
5. SSS and Phil Health are expected to increase by 5% on the fifth year.
6. Price contingency are assumed to increase at 5%
7. Employees salaries and wages are expected to increase 5% every 3years.
8. Electricity and water are expected to increase 5% every 2 years.
9. Fuels, oils and lubricants are expected to increase 5% every 2 years.
10. Packaging materials are projected to increase 5% yearly
11. Tools were accounted for using the replacement method in which the
cost of tools is capitalized when originally purchased and as replacement
tools are purchased, they are charged as current expense. All other assets
under Property, Plant, and Equipment, except land are depreciated using
the straight line method.
12. One fourth of Mushroom raw materials are come from the processing
plant.
13. 5kg are assumed to increase of mushroom supply during cold
season(dec-feb) and rainy season(jun-july)





19

Projected Financial Statements
Initial cash balance of the project is equivalent to the cash deposit
of the cooperative. With the financing support from donor agencies and
loaning institution, start-up operating capital of the project is therefore
budgeted 1ooooooo. The projected income, cash flow and balance
sheet statements of the proposed project over its three-year lifespan are
estimated are estimated and summarized as follows:











20

Projected Income Statement
Particulars

2014 2015 2016 2017 2018 2019
Sales of
Product

13444800 14117040
148228
92
1556403
6.6
1634223
8.43
17159
350.3
5
Pre-Operating
Expense
Preparation FS

130,000.00
Business
Permit

38,350.00 38,350.00
38,350.
00
38,350.0
0
38,350.0
0
38,35
0
Land

750,000.00
Building

1,400,000
Machine

120,000
training of
Staff

27,000
delivery truck

120,000
Contingency

245,535.00
Operating
Expense
raw
materials(Bana
na)

2018250 2078797.5
214116
1.425
2205396
.268
2271558.
156
23397
04.9
Other
ingredients 113000 124300 136730 150403 165443.3
18198
7.63
salaries and
wages

528,000 528,000 528,000 554400 554400
55440
0
Fringe
benefits

11520 11520 11520 11520 11520 11520
Packaging
materials

319600 335580 352359
369976.
95
388475.7
975
40789
9.587
4
Depreciatio
n:
Equipment


56,000.00

56,000.
00

56,000.0
0

56,000.0
0

56,00
0.00
Depreciatio
n: Utensils

6444 6444 6444 6444 6444
Repair and
maintenance


108,820.00

108,820.00

108,820
.00

108,820.
00

108,820.
00

108,8
20.00
Electricity and
water

264,000 264,000 277200 277200 291060
29106
0
21

Fuel and oil

79200 79200 83160 87318 91683.9
96268
.095
Advertising
Expenses

50,000 50,000 50,000 50,000 50,000
50,00
0
sss and
philhealth

10,000 10,000 10,000 10,000 10,000
10,00
0
utilities
expense

60,000 60,000 60,000 60,000 60,000
60,00
0
contingencie
s

178119.5
185633.07
5
191069.
7213
197373.
9109
203270.2
577
20870
5.210
6


Total
expenses

6,571,394.
50
3,936,644.
58
4,050,8
14.15
4,183,20
2.13
4,307,02
5.41
4,421,
159.4
2


NET INCOME

6,873,405.
50
10,180,395
.43
10,772,
077.85
11,380,8
34.47
12,035,2
13.02
12,73
8,190.
93









22

Projected Cash Flow Statement
Particular Year 0 Year
1
Year
2
Year 3 Year
4
Year 5
Beginning
Cash
Balance
2,830,885 12,674,9
45
23,040,973
.5
34,004,12
1
45,582,32
9
57,820,812.7
3
Cash Flow:
Sales
Receipt
13444800 1411704
0
14822892 15564036.
6
16342238
.4
17159350.35
Cash
Outflow

Raw
Materials(B
anana)
2018250 2078797.
5
2141161.4
2
2205396.2 2271558.
15
2339704.9
Other
Ingredients
113000 124300 136730 150403 165443.3 181987.63
Salaries And
Wages
528,000 528,000 528,000 554400 554400 554400
Fringe
Benefits
11520 11520 11520 11520 11520 11520
Packaging
Materials
319600 335580 352359 369976.95 388475.7
97
407899.9
Depreciatio
n:
Equipment

56,000.0
0

56,000.00

56,000.00

56,000.00

56,000.00
Depreciatio
n: Utensils
6444 6444 6444 6444 6444
Repair And
Maintenan
ce

108,820.0
0

108,820.
00

108,820.00

108,820.0
0

108,820.0
0

108,820.00
Electricity
And Water
264,000 264,000 277200 277200 291060 291060
Fuel And Oil 79200 79200 83160 87318 91683.9 96268.095
Advertising
Expenses
50,000 50,000 50,000 50,000 50,000 50,000
Sss And
Philhealth
10,000 10,000 10,000 10,000 10,000 10,000
Utilities
Expense
60,000 60,000 60,000 60,000 60,000 60,000
Business
Permit
Renewal
38,350.00 38,350.0
0
38,350.00 38,350.00 38,350.00 38,350.00
23

Contingenc
ies
178119.5 185633.0
7
191069.72
13
197373.91
0
203270.2
57
208705.2106

Total Cash
Outflows
3600740 3751011.
5
3859744.4
25
3985828.2
1
4103755.
15
4212454.213
Netcash
Flow
12,674,9
45
23,040,9
73
34,004,121 45,582,32
9
57,820,81
2
70,767,708.
87














24

Financial Analysis
5.5.1 Benefits and Cost (B/C) Schedule and Measure of project worth
GB GC NB ANB DNB at
12%
DNB at
60%
YEAR
2014-0 374051
0
-
3740510
-3740509.5 -3740509.5
2015-1 14117040 389829
5
1021874
5
6478236 9123879.84
4
4924855.42
5
2016-2 14822892 401246
4
1081042
8
2102917
3
8618006.89
9
5251843.35
4
2017-3 15564036.6 414485
2
1141918
4
2222961
2
8127949.95
3
5582670.74
6
2018-4 16342238.4
3
426867
5
1207356
3
2349274
7
7672967.56
9
5945223.60
8
2019-5 17159350.3
5
438280
9
1277654
1
2485010
4
7249752.44
6
6341784.54
6

IRR 278%
Payback
period
0.4Years
NPW@12% 7249752.44
6




















25

Financial Sensitivity Test

A. Assumption #1

What if the gross Cost increase by 5% during the Actual Operation
period(year1-5); Gross benefits remain the same forecasted








B. Assumption #2
What if there will be a 5% shortfall in Gross Benefits yearly due to drop in its
selling Gross costs remain the same as budgeted price

YEAR GB GC NB DNB@12% DNB@60%
0 0 4377867 -4377867 -4377867 -4377867
1 12772560 4567983 8204577 7325515 5127861
2 13411188 4758505 8652683 6897866 3379954
3 14785835 4897543 9888291 7038291 2414134
4 15525127 5112492 10412634 6617417 1588842
5 16301383 5311001 10990382 6236238 1048124
IRR 194%












YEAR GB GC NB DNB@12% DNB@60%
0 0 4596760 -4596760 -4596760 -4596760
1 13444800 4796382 8648418 7721801 5405261
2 14117040 4996430 9120610 7270894 3562738
3 15564037 5142420 10421616 7417901 2544340
4 16342238 5368117 10974121 6974253 1674518
5 17159350 5576551 11582799 6572391 1104622

IRR 194%
26

c. Assumption 3
What if there will be 1% a shortfall in gross benefits and 1% cost overrun during
the actual operating period (simultaneous occurrence)
YEAR GB GC NB DNB@12% DNB@60%
0 0 4596760 -4596760 -4596760 -4596760
1 12772560 4796382 7976178 7121587 4985111
2 13411188 4996430 8414758 6708193 3287015
3 14785835 5142420 9643414 6863992 2354349
4 15525127 5368117 10157010 6454963 1549837
5 16301383 5576551 10724832 6085558 1022800
IRR 180%

Financial Feasibility Findings
The project is financially feasible based on the IRR that is 278%, since
it is greater than hurdle rate. It is also acceptable based on the Net
present worth of 7,249,752 pesos since it is positive.








27

SOCIO-ECONOMIC ASPECT

The project will benefit not only Muoz Banana Processing Cooperative,
Inc. (MBPCI) farmers-members but also the Nueva Ecija banana growers in
general. Likewise, the community residents and the banana consumers will be
benefited in items of increased banana product supply to reduced banana
product prices.
Since the general goal and objective of the cooperative is upgrade the
standard living of its farmer-members, the proposed project will help boost the
income-generating capacity of its primary beneficiaries. With assured source of
banana and technical assistance, this will encourage MBPCI members to
engage in banana farming or multi-cropping in one season to augment their
income from crop cropping.
The project can be likewise tapped as training ground and orientation for
enterprising individuals and as venue for banana technology improvement
researches.