Business plan progect.

1. Golam Mowla. Bangladesh. +8801717658341.

2. Executive summary:
The last century has been the era of technological advancements but at the cost of
Mother Nature. Now is the time to re-think and re-define this century for ensuring a
beautiful sustainable green world for us and our future generations. We, GREENNAF
Company Pvt Ltd want to redefine this century as the age of ‘e’ where ‘e’ delineates
green sustainable solutions. In our country synthetic plastic bags and sacks have been
banned since 2002 but in actuality, these synthetics are thriving in the marketplace. Our
target is to replace synthetic plastic derivative sacks and bags with light weight ‘Green’
Kenaf bio-sacks and bags as eco-friendly alternatives.
GREENNAF Company Pvt Ltd is the first low-cost, eco-friendly, biodegradable,
recyclable and reusable household and industrial bio-sack and bag and wood-chip
substitute producer from Kenaf in Bangladesh. It is a multistage company that will
cultivate Kenaf and process its fibers in a plant to produce bio-sacks and bags i.e. e-bags
and e-sacks. To meet the deficit demand of 11,350 metric tons of raw materials for
chip-board industries, GREENNAF will supply the Kenaf stem chips and hence also
reduce deforestation.
Due to high competition and favorable costs, the current allied fiber sack
market is being downtrodden by synthetic plastic derivative sacks. GREENNAF’s
high yield state-of-the-art manufacturing plant will be able to significantly lower cost of
production and hence bring down the overall price of e-sacks and e-bags to give it a
competitive edge with synthetic sacks. Our aim is not to alienate the current allied fiber
sack industry but to act as a complementary industry alongside it. About 15000 sacks are
needed a day in eight northern districts but the five mills can hardly supply two-thirds of
the demand. (Dr ABM Abdullah, Executive Director, JDPC).

3. Importance of our Project:
Kenaf e-sacks and bags are environment friendly products and a natural
alternative with inherent advantages. They are completely biodegradable, whereas the
toxic effects of synthetics are so serious that several western countries have banned it for
use in food products. Production of synthetic bags and sacks deplete non-renewable
natural resources (Petroleum), is harmful to both human beings and the environment, and
adds tons of carbon emissions into the air annually.
GREENNAF’s e-sacks can be used for packing a wide range of industrial and
agricultural goods such as grains, oil seeds, salt, sugar etc. Even then, there exists a huge
supply deficit in the existing market of the country as demand is greatly exceeding supply
of allied fiber bags. GREENNAF aims at meeting the deficit supply. GREENNAF will
also supply the Kenaf stem chips and hence also reduce deforestation.The e-sacks and
bags are light-weight, have higher tensile strength than poly-sacks and are much more
durable than synthetics.
Related project in the Bangladesh or in the world:
Although this type of business firms are not available in Bangladesh but it has
various application in some other countries of the world. “Indian allied fiber company”
is a big competitor in this sector. Recently this company has entered into the Brazilian
market and capture 70 % market share.
USA, China, Pakistan are also the big threats in this sector because they are the
biggest exporters of fiber sakes and bags in the world.
Project proposal:
In a nut shell, this is a eco friendly business firm which will
produce e-bag, sacks and wood chips that will reduce deforestation.

4. Organizational structure:
Every organization follow a structure to operate their business effectively and
efficiently. It represents a chain of command for every personnel in the organization.
Our organizational structure would be as follows --------

5. Feasibility Analysis:
(A) Technology analysis:
GREENNAF will cultivate Kenaf in 6 hectares of land in Northern part of
Bangladesh and use its fibers to make its products. The envisaged plant will
produce 2,400,000 pieces of e-bags and e-sacks in 2011. The plant will operate
two shifts, 8 hours each shift and for 300 days a year. Inputs required for the
plant include electricity and water. Total power requirement is 40 kW (or about
200,000 kWh) and annual water consumption is estimated to be 2500 m3.
(B)Financial analysis:
The estimated project cost is BDT 21,104,100. It is an all equity
business. The NPV of the project from 5-year financial projection is BDT
21,753,218. The payback period of our total initial investment is 1.80 years and
2.02 years in case of discounted payback period. Our IRR is 43%. The stress
testing shows positive NPV in all the three cases- base (BDT 18,032,005.08),
best (BDT 39,061,278.84) and worst (BDT 2,720,752.74). The social cost-benefit
analysis also reveals positive social NPV of BDT 24674533.70 at 19.18 %
discount rate and the social IRR of the project is 67%.
(C) Environmental analysis:
GREENNAF’s e-sacks are hydrocarbon-free and treated with non-toxic vegetable
oils which do not produce off flavors and tastes when in contact with edible materials and
are totally safe for storing edibles. The e-sacks and bags are light-weight, have higher
tensile strength than poly-sacks and are much more durable than synthetics. The low
extensibility of Kenaf results in the retention of the shape and size of the bags and sacks.
The fiber absorbs water and hence minimizes the problems of drying of packed
commodities.

6. Cost benefits analysis:
(A) Production and Co st details:
Production can reach 16 to 20 tons/hectare of fibers in 160 days of growth
and up to 25 tons/hectare under favorable conditions. 400,000 plants can be planted per
hectare. GREENNAF plans to acquire 6 hectares of land around North Bengal area.
Next, the process of manufacture of e-bags essentially involves the following
operations:
Weaving of the sack from the fiber, (b) Cutting of the sack into required sizes by
heavy duty cutter, (c) Stitching by electrically operated stitching machines, (d) Testing,
(e) Pressing and (f) Packing and forwarding.

7. (B) Benefit analysis of the project:

8. Financial Analysis:

9. Social benefit from the project:
1) Employment benefit
2) Kenaf bale storage benefit
3) Carbon absorption
4) Reduction of synthetic uses
5) Oxygenation by kenaf
6) Reduce deforestation
7) Recyclable and reusable in house hold.
Environmental effect:
Our proposed products e bag and e sack are very eco friendly. Their will
be no negative impact on the environment because our product is completely bio
degradable , hydrocarbon free and treated with non toxics vegetables oils which
do not produce off flavors and tastes when in contract with addible matireals and
are totally save for storing edibles.
Value engineering:
Value engineering (VE) is a systematic method to improve the "value" of
goods or products and services by using an examination of function. Value, as
defined, is the ratio of function to cost. Value can therefore be increased by either
improving the function or reducing the cost. It is a primary tenet of value
engineering that basic functions be preserved and not be reduced as a consequence
of pursuing value improvements. Value engineering uses rational logic (a unique
"how" - "why" questioning technique) and the analysis of function to identify
relationships that increase value.

10. Marketing management application of the project:
Product:
Kenaf Is The Fiber That Can Change The World! We will grow two
varieties of Kenaf: Tainung and Everglades 41. Because Kenaf grows so fast, its
unique characteristic is that it stores an abundance of carbon in the cells, which
makes Kenaf the best in sequestering carbon dioxide and saving the
environment (Source: Dr. Toru Aoi, Japan).
Price:
The firm will use market-penetration pricing by setting a low price in order to
penetrate the market quickly which will result in high sales revenue and subsequent cost cutting
further. Our prices will be lower than the price of synthetics to give us a competitive edge.
Product price list:

11. Place:
We have a very effective channel of distribution .For various target market we are applying
various coverage procedure. Our procedures are as follows-------
Promotion:
We will follow the following promotional tools ----------------
S.W.O.T ANALYSIS:
Strength
• Kenaf is a labor intensive industry. There is a good supply of relatively low cost labor
in the country
• GREENNAF has lot of potential of providing employment especially in the
northern region of Bangladesh
• Kenaf is an eco-friendly and biodegradable product. With the pressure from
green movement, it is expected to sustain through consumer's preference.

12. • GREENNAF is a big player entering the market. Kenaf e-sacks and bags are a
new concept. We can get the first mover advantage.
• We shall cultivate Kenaf and use their fibers to make the e-sacks and this will
greatly reduce cost of production and give us a competitive edge as raw materials
are not being purchased from outside at a higher market price
• GREENNAF has strong management team.
Weakness:
• Continuation and enforcement of existing laws regarding synthetic product ban
is needed to optimize new entry barriers
• Changing the attitude and perception toward green and innovative products may
require more time than anticipated
• Availability of labor at a lower and competitive wage rate to attain
economies of team production
• Foreign trade relation needs to be developed and improved to expand the target
market beyond its existing market horizon
• To sustain the economies of scale, stable growth rate of demand is needed until
maturity stage of produce life cycle
• Skilled labor force is needed to carry out the production process.
Opportunity:
• G R E E N N A F ’ s business can lead to diversified
value added products.
• N o r t h Africa and Middle East is one of the major importers of sacks, and
new markets inThailand and Malaysia are emerging.
• G R E E N N A F aims to accomplish Total Quality Management so as to
build quality in the products.
• B a n g l a d e s h government has raised cash subsidy from 7.5% to 10 % on all
items of allied-fiber products without any covenant.
• I n the past imports of allied fiber bags from Bangladesh to India were
subject to an Indian import duty of 6 % which has been abolished.
• E x p o r t s provide a sound market. Demand is
steadily climbing.
• E c o -concerns have accelerated the demand for biodegradable sacks and bags
on the global market in recent times, giving rise to the exports of allied fiber sacks
and bags from Bangladesh.
Threats:
• One of the major threats faced by GREENNAF is from Indian allied fiber
industry, which has already penetrated Brazilian market
India enjoys the benefit of lower container freight rates as compared with
• Bangladesh for shipments to several important markets
• Indian export subsidies amount to 20 % for sackings while in Bangladesh it is only
10%.

13. • Low awareness of people about the harmful impacts of synthetic products on the
environment.
• The government can set the minimum price level for the GREENNAF’s products
and this may hamper with our cost leadership strategy
• High dependency on labor.
STP(segmenting, Targeting and Positioning):
Market Segmentation and Targeting:
The local market of e-sack has been segmented depending on demographics
(type of industry, location) and the international market depending on geographic,
political and legal factors. The firm has segmented the market of consumer e-
bag using geographic, demographic and psychographic variables.
Market positioning:
The firm has chosen functional positioning as its product solves
problems, like - scarcity of natural fiber sacks in high demand market and
reduce different types of pollution by reducing use of synthetics. Moreover,
in the long run it will reduce the use of paper bag which will check
deforestation. Thus, this business is environment friendly in several of ways.
So, our positioning strategy on consumers’ mind will be: “Save Nature…
Save Money”.

14. Competitor Analysis:
Porter’s Generic Strategy:
GREENNAF aims to create substantial cost advantage over the synthetics producers Also,
the product’s distinctive features and inherent advantages will cause customer to prefer the
e-sack and bags over synthetics.
Cost Leadership Strategy:
: Cost Cutting: The firm will:
1.Use low wage labor.
2.Perform its manufacturing process efficiently by using state-of-the art machinery
and technology.
a Cost Elimination : The firm will:
1.Cultivate its raw materials in its own firm
2. Employ efficient and low cost distribution channel
Differentiation:
The firm’s drivers of differentiations are-
T Economic: It will improve its product’s economic performance by cutting buyer’s
overall cost of using product
o Psychological:
1. Product variety (40, 50 and 80 kg sack; consumer level bags)
2. Product appearance (First e- sack and bag in market with our
distinct logo).

15. LET SEE-----------
OUR ADVERTISING STRATEGY