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Feasibility Study of the Bangus Business

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Thursday, 30 June 2011 15:11 MASICAP TEAM 2011 RATIONALE The coconut palm provides a substantial export income for many tropical countries, as well as food and drink for home consumption and fuel and shelter. Of the exported products, copra, the dried kernel, is a major source of vegetable oil and coconut oil, and shredded and dried kernel is widely used in the bakery and confectionery trades as desiccated coconut. Copra cake, left after oil extraction, is a valued animal feed, especially for dairy cattle.

The leading coconut producer nations are (in order) the Philippines, Indonesia, India, Sri Lanka, Thailand and Malaysia.

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In the Philippines, coconut industry is the oldest and most strategic agricultural industry, providing vital economic support to rural communities in the country. It affects the lives of 3. 4 million farmers directly deriving their income from coconuts and another 23 million Filipinos indirectly depending their livelihood on it. Coconut remains a top agricultural export, annually earning an average of US$631. 50 million (1999–2003).

It is planted in 3. 278 million hectares all over the country, dominating the landscape in 86% of all provinces, with 77% of all municipalities regarding it as a major crop.

In addition, more than 60 percent of Philippine copra and coconut oil exports come from Mindanao. Most of the country’s coconut oil mills are based in Mindanao. Coconut oil, desiccated coconut, fresh coconut and copra are the primary products of coconut, while its by-products include copra meal, activated carbon, coconut shell charcoal and coconut coir and coir dust.

Coconut end products include detergents soaps, shampoo, cosmetics, margarine, cooking oil, confectionery, vinegar, and nata de coco. Its intermediates include oleo chemicals such as fatty acids and fatty alcohols. According to the Philippine Coconut Authority, the region’s export shipment of copra meal for 2009 amounted to 31, 500 metric tons which is equivalent to110, 250, 000 nuts or 1, 102, 500 hectares of coconut plantation. On the other hand, the copra importation for the same year amounted to 52,156. 08 metric tons which shows that there stills a need for coconut plantation.

In addition, aside from copra, there are still different products that can be produced out of coconut which was mentioned earlier. The great demand of coconut is highly imposed by the different products that it can produce. Thus, it is among the investment opportunities being pushed through. Objective The project aims to increase coconut plantation in the region to meet the local and international demand in the market. Project Description The Coconut (Cocos nucifera) (Filipino: Niyog) (Visayan: Lubi ) is the only species in the genus Cocos of the Family Arecaceae (palm family), subfamily Cocoideae.

It is called the “Tree of Life” because of the various products and by-products derived from its various parts from root to fruit. The coconut palm grows throughout the tropical world. It thrives in a hot, moist climate, on sandy loam soils, and is highly tolerant of salinity, thus it is usually found on tropical shorelines. Its biophysical limits are: an altitude of 520 to 900 m; a mean annual temperature of 20 to 28 degrees Celsius; and a mean annual rainfall of 1000 to 1500 millimeters.

The coconut palm has a natural preference for sandy, well-aerated and well-drained soils, but it has considerable ability to adapt to soils of heavier texture. In the region, SOCCKSARGEN are mostly earning its livelihood through coconut industry. Coconut trees are abundant along coastal areas of SOCCKSARGEN area (600 meter above sea level). Projected sales for one cropping cycle is Php 12, 570. 00. According to the Philippines Coconut Authority, the region’s export shipment of copra meal for 2009 amounted to 31, 500 metric tons which is equivalent to 110, 250, 000 nuts or 1, 102, 500 hectares of coconut plantation.

On the other hand, the copra importation for the same year amounted to 52,156. 08 metric tons which shows that there stills a need for coconut plantation. In addition, Philippine Coconut Authority signed a memorandum of understanding with the China National Technical Import and Export Corporation (CNTIC) last February 25, 2004 which guarantees that all coco coir fiber produced in the country will be absorbed by the China market. Aside from that, there are still value added products such as detergents soaps, shampoo, cosmetics, margarine, cooking oil, confectionery, vinegar, and nata de coco.

Coconut palms are propagated by seedlings raised from fully mature fruits. Fully mature nuts are picked and not allowed to fall from the tree. It is tested by shaking to listen for water within. Underripe nuts, spoiled nuts, those with no water, and those with insect and disease damage are discarded. Nuts are planted in the nursery or stored in a cool, dry, well-ventilated shed until it can be planted. It is reproductively mature at 5 to 7 years, is less sensitive to adverse environmental conditions, and is expected to live for over 50 years.

The process of planting coconut includes land clearing, lay-outing, holing, planting, maintenance (wedding, watering and fertilizer application), replanting, and harvesting. A hectare of land can be planted with 100 trees having a planting distance of 10 meter by 10 meter. Every tree can generate an average of 63 nuts per year. The total project cost amounted to Php  38, 161. 62. Gross Profit Rate and Net Profit Rate are 64% and 59% respectively while the Return on Investment, without considering the land in the total project cost, is 78%.

The cost of investment will be recovered approximately after 1 year, 3 months and 2 days, indicating that the proposed project is worth investing. Current Market Trends and OpportunIties Philippines is the world’s largest producers of coconut products. About twenty-five percent (25%) of cultivated land were planted with coconut trees and it is estimated that between twenty-five percent (25%) and thirty-three percent (33%) of the population was at least partly dependent on coconuts for their livelihood.

Historically, the Southern Tagalog and Bicol regions of Luzon and the Eastern Visayas were the centers of coconut production. In the 1980s, Western Mindanao and Southern Mindanao also became important coconut-growing regions. Coconut occupies 3. 116 M ha, distributed in Mindanao (1. 591 M ha), Luzon (0. 860 M ha), and Visayas (0. 665 M ha). The growing passion of landowners to engage in coconut farming is contributed to the potential use of coconut trees. As stressed, coconut is the most versatile tree in the world and is known as “the tree of life”.

From its leaves down to its roots, there can be many uses of a coconut tree. Hence, there is hope in coconut farming. Many farmers have engaged in planting coconut trees in their farms, as its coconut meat is potential for copra. As such, driven by the spirit of entrepreneurship, many entrepreneurs have taken advantage of the opportunity of further processing coconut husks, the waste in producing copra, into a more useful product. The Philippine Coconut Authority (PCA) main objective is to increase coconut production to continuously supply the growing demand worldwide.

Some of their interventions in achieving their objectives are establishment of model coconut farms, technology and farm development assistance, credit support, market assistance, institutional networking and linkaging and other interventions. FINANCIAL REQUIREMENTS Particulars| Amount| Land Development Cost| 33,158. 84| Working Capital (1 Cropping Cycle=3 months)|  | Farm Inputs| 1,512. 39| Direct Labor| 2,459. 86| Overhead Expense| 402. 03| Operating Cost| 628. 50| Subtotal| 5,002. 78| TOTAL PROJECT COST| 38,161. 62| *Note: TPC excludes Land Cost|  |

Underlying Assumptions * Number of trees per hectare is 100 having a distance of 10 meter by 10 meter * Allowance for mortality is 10% * Nuts harvested/tree in a year is 63 * A kilo of copra is equivalent to 3. 5 nuts * Prevailing Price of Copra is P 27. 00 * Selling price of coconut husk is P 0. 27/piece PROJECTED SALES per Cropping Cycle|  | Particulars| Amount| Sales|  | Copra (450 kilo X P 27. 00/kilo)| 12,150. 00| Coconut Husk (1575 nuts X P 0. 27/nut)| 420. 00| Gross Sales| 12,570. 00| Less: Cost of Sales|  | Farm Inputs|  | Fertilizer|  |

Ammonium Sulphate| 430. 75| Muriate of Potash (0-0-60)| 1,081. 65| Subtotal| 1,512. 39| Direct Labor|  | Weeding| 191. 44| Watering| 287. 16| Harvesting| 500. 00| Hauling| 300. 00| Dehusking| 315. 00| Splitting| 157. 50| First Drying| 236. 25| Scooping| 236. 25| Second Drying| 236. 25| Subtotal| 2,459. 86| Overhead Expense|  | Water| 402. 03| Depreciation Expense| 165. 79| Subtotal| 567. 82| Total| 4,540. 07| Gross Profit| 8,029. 93| Less: Operating Cost (5% of the Gross Sales)| 628. 50| Net Income before Tax| 7,401. 43| Return on Investment (Ave.

Net Income/TPC)| 78%| Gross Profit Rate (Gross Profit/Total Sales)| 64%| Net Profit Rate (Net Profit/Total Sales)| 59%| Payback Period (TPC/Ave. Net Income + Amortization + Depreciation)| 1 year, 3 months, and 2 days| For Inquiries, please contact:National Economic Research and Business Assistance CenterSOCCSKSARGEN (Region 12)Ground Floor, RA Bldg. , South Osmena St. , General Santos CityTelefax No. 083-5528250Email Address: [email protected] org;Visit: www. investinr12. net| | | | | | Last Updated on Friday, 12 August 2011 09:06 INFORMATION MATERIALS NERBAC 12 One Stop Shop * Bus. Reg. & Licensing – Unified Form * Region 12 Investment Profile * R12 Investors Assistance Network * Project Briefs * Industry Briefs * Business Ideas taken from www. dti. gov. ph * SMILE Program * Pre-Investment Studies INDUSTRY PROFILES * Bamboo Industry Profile * Banana Industry Cluster * Coffee Industry Cluster * Mango Industry Cluster * Muscovado Industry Cluster * Pangasius Industry Cluster ONLINE DIRECTORIES * Aquamarine * ICT * Exporters Directory * Directory of DTI 12 Officials BLOGS * Write a blog View all Blogs * Your Profile DOWNLOADABLES * Unified Forms * Pangasius Conference 2010 Presentation Materials * Reg. Foreign Investments * 1st Region 12 Economic Briefing * Export Performance Data * Business Opportunity Seminar (BOS): Support to Industries * 2nd Region Investment Conference Presentations * Free Trade Area Presentation Materials * BOS-Hydro Power Presentation Materials LINKS * NERBAC 12 Web Links * Consumer Welfare 12 * SMED Councl Region 12 * SMED Council Gensan * OTOP Philippines * Department of Trade and Industry

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Feasibility Study of the Bangus Business. (2016, Oct 02). Retrieved from https://graduateway.com/feasibility-study-of-the-bangus-business/

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