Supervised by: Syed Afzal Moshadi Shah

Group Members: - Zaka Ul Hassan

- Nouman Sarfaraz

Business Idea:•Plantation of Olive Trees in Pakistan•Providing consultancies

Climatic Requirements for Olive Cultivation

Factors Standard Climate Pakistan Climate

Temperature 5-45oC 10-45oC

Rainfall 700-800mm More than 500mm

Humidity 75-90% 70%

Altitude 400-1700meter 100-3000meter

Chilling Req. 400-2000 hrs 400-2100 hrs

Slope upto 20o 10o-50o

Olive Growing Environment

Marginal / Barren landsMarginal / Barren Land

Market consumption and production World Wide

Country Production in Tons (2009) Production % Consumption

Spain 1,199,200 41.2% 20%

Italy 587,700 20.2 30%

Greece 332,600 11.4 9%

Syria 168,163 5.8 3%

Tunisia 150,000 5.2 2%

Turkey 143,600 4.9 2%

Morocco 95,300 3.3 2%

Table 1 – World Olive Production & Consumption Countries

Market consumption in PakistanTable 2 - Import of Olive Oil in Pakistan

Year Quantity (tons) Value in (Mn PKR.)

2004-05 461 59.9

2005-06 746 105

2006-07 1463 172.2

2007-08 2008 358

2008-09 2768 380Source: Federal Bureau of Statistics (2009)

Source: Edible oils in Pakistan

50 Mn naturally grown wild olive trees in marginal areas

7 Mn wild olive trees grafted by support of PODB and IAO

900 acre olive orchards establish in different region of KPK, Balochistan and Potohar

Pakistan Government Actions

Pakistan is world's 4th largest importer of edible oils

Edible oil imports forecast 2.16 Mn metric tons 2011/12

Demand of edible oil is increasing at the rate of 6 to 8 % per annum

Pakistan Edible Oil Usage

Source: USDA Reports (2011)

Olive Orchard

Olive Plant Varieties:HARDY

Arbequina Leccino PendallinoSevallinoAscolanaCoratina

SENSTIVEFrantoioManzanillaKoroneiki

MODERATEPicholine

Features•Forms

Generally olives are being use in three forms:Olive OilTable Olive Olive Cake (waste after olive extraction use for fertilizer)

•Plant benefitsGenerate energy 2.5 times more than other woodsAsh used for fertilizing gardens and plantsWood is being use for making handicrafts

•Oil GradesOlive oil has four grades:Extra virgin olive oilOlive Pomace oil Sulphonated oil Technical oil

BenefitsProducts can be made

•Cosmetics•Health and beauty •Personal Care•Herbal Medicine•Edible products eg.

•Pickles, jams, sauces, extract vinegar, breads, confectionary, and traditional Pakistani Sweets.

 Nutritional Importance of Olive

Vitamins E, K, and A Used as a balm Massaged onto the body Help against wrinkles and delaying the effects of old age Help combat against strokes, heart-disease, High blood pressure, diabetes

Table Olive

Product OptionsOlive Oil Seeds Tasbeegh

Traditional Sweet BurfiDried Olive Powder BreadMedicine From Olive

Financial CostingOlive orchard on 40 kanal which is 5 acre.

Basic Description:835 Plants on 5acre (167/acre spacing of 4x6 meter)

Capital Cost:We have taken the costing of 5 acre area for the plantation of Olive plants.

Equipments Cost PKR.

9 Water Tanks 45,000

Land Bore 40,000

Hard Plastic Pipe 11,880

One Electric Motor 10,000

Total 106,880

Table 3 – Irrigation equipments

Irrigation System Installation Cost:

Material No. of Unit Per Unit PKR. Total

Olive Plants 835 30 25,050

Fertilization 6 2,000 12,000

Land Preparation Labor 3 7,000 21,000

Irrigation System 1 106,880 106,880

Total 164,930

Table 4 – Plants Installation Cost

Initial Cost:

No. of Months Per Month Total

Manpower 12 7,000 84,000

Electricity (April, May, June) 3 3,000 9,000

Electricity Per Month 9 500 4,500

Other Expenses 12 500 6,000

Fertilizer 6 2,000 12,000

Total 115,500

Annually Running Cost

Table 5 – Input Cost

Return

Estimated Production:We have estimated the production of olives by 95% of successive rate.

Table 6 – Production of Olives Per Tree

Year Olives-kg/Tree Olives-kg /5 Acre

Year 1 0.0 0.0

Year 2 0.0 0.0

Year 3 0.0 0.0

Year 4 4.5 3,556

Year 5 6.5 5,135

Year 6 8 6,320

Year 7 11 8,690

Year 8 12 9,480

Year 9 13 10,270

Year 10 15 11,850

Preparation of Table Olive

Cost of producing Table Olives

Packaging PKR./kg

Bottle 35

NaOH 1

Nacl 1.66

Vinegar 40

Labor 2

Utility Expenses 2

Total 81.66

Price Per Kg

Selling Cost PKR./kg

Retail Price 500

COST

Manufacturing Cost (81.66)

Retailer Margin 20% (100)

Sales man Margin 5% (25)

Profit 293.34

Preparation of Oil

Cost of producing Olive Oil

Packaging PKR./ltr

Bottle 35

Transportation 2.81

Labor 2

Utility Expenses 2

Total 41.81

Profit Per ltr

Selling Cost PKR./ltr

Retail Price 500

COST

Manufacturing Cost (41.81)

Retailer Margin 20% (100)

Sales man Margin 5% (25)

Profit 333.18

Projected Cash Flow Analysis Table Olives:

Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Olive kg 0 0 0 0 2,133 3,081 3,792 5,214 5,688 6,162 7,110

Manufacturing Cost 0 0 0 0 184,181 261,594 319,655 435,775 474,482 513,189 590,603

Total Cost 164,930 115,500 115,500 115,500 549,681 377,094 435,155 551,275 589,982 628,689 706,103

Revenue 0 0 0 0 799,875 1,155,375 1,422,000 1,955,250 2,133,000 2,310,750 2,666,250

Net Profit -164,930 -115,500 -115,500 -115,500 250,194 778,281 986,845 1,403,975 1,543,018 1,682,061 1,960,147

Income -164,930 -280,430 -395,930 -511,430 -261,236 517,045 1,503,890 2,907,865 4,450,883 6,132,944 8,093,091

Cumulative Cost 164,930 280,430 395,930 511,430 1,061,111 1,438,205 1,873,360 2,424,635 3,014,617 3,643,306 4,349,409

Cumulative Revenue 0 0 0 0 799,875 1,955,250 3,377,250 5,332,500 7,465,500 9,776,250 12,442,500

NPV @ 0%NPV @ 5%NPV @ 10%NPV @ 15%

12309703972180278157136385157

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

0 1 2 3 4 5 6 7 8 9 10

Cumulative Cost

Cumulative Revenue

Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Olive ltr 0 0 0 0 444 642 790 1,086 1,185 1,284 1,481

Manufacturing Cost 0 0 0 0 18,579 26,837 33,030 45,416 49,545 53,674 61,931

Total Cost 164,930 115,500 115,500 115,500 134,079 142,337 148,530 160,916 165,045 169,174 177,431

Revenue 0 0 0 0 166,641 240,703 296,250 407,344 444,375 481,406 555,469

Net Profit -164,930 -115,500 -115,500 -115,500 32,561 98,366 147,720 246,428 279,330 312,233 378,038

Income -164,930 -280,430 -395,930 -511,430 -478,869 -380,502 -232,782 13,645 292,976 605,208 983,246

Cumulative Cost 164,930 280,430 395,930 511,430 645,509 787,846 936,376 1,097,292 1,262,337 1,431,511 1,608,942

Cumulative Revenue 0 0 0 0 166,641 407,344 703,594 1,110,938 1,555,313 2,036,719 2,592,188

Projected Cash Flow Analysis Olive Oil:

NPV @ 0%NPV @ 5%NPV @ 10%NPV @ 15%

184730814747671192541975345

Brand Name: Potohar Olives

Target Market:

- Upper and Middle class

Marketing Strategy:-Push Strategy (in the beginning)

Give away high margins to Retailers (20% of the price) and Sales Staff (5-15% of the price)

Low price entry strategy:

Product Competitor Rate PKR./ltr Our Rate PKR./ltr

Extra Virgin Olive Oil 726.25 500.00

Pomace Olive Oil 479.12 440.00

Table Olive 725.11 500

The proposed project would require following staff members

First three yearsManager - 1Gardeners - 1 to 3

Fourth year onwardManager - 1Gardeners - 1 to 3 Machine operators - 1Labor - 2

SWOT Analysis

Strengths:

High profit margin

Suitable with Pakistan’s climate

Barren / marginal land can be utilized

It can be cultivated on the fertile land along with

other crops as well

Whole plant right from the seed to fruit is

beneficial and useful

Religious importance

Opportunities:

Growing tastes and preferences

Can be exported to neighboring countries

Huge free barren land

Can develop a strong national and international

brand.

Weakness:

Lack of Awareness (both producers and

consumers/ customers)

Government level subsidy not availed

Threats:

Big players response

Strong brands loyalty

Government policies

Thanks for your patienceAny Question???