COMMERCIALIZING  A  HANDWASHING  DEVICE    IN  RURAL  VIETNAM  

Global  Young  Leaders  Programme    Ho  Chi  Minh  City,  Vietnam:  November  2010  

Table  of  Contents  

•  Executive  Summary              1  

•  Overview              3  

•  The  Case  for  Commercialization          11  

•  Business  Plan                

•  Business  Model            22  

•  Sales  &  Marketing  Strategy          38  

•  Operational    Plan            58  

•  Risk  Management            68  

•  Management  &  Governance            73  

•  Financials              83  

•  Recommendations            92  

•  Conclusion              93  

•  Appendix              94  

Execu@ve  Summary  

¨  With  a  lack  of  hygiene  awareness  in  Vietnam  and  the  importance  of  the  proper  enabling  environment  to  drive  behavior  change,  the  proposed  enterprise  has  identified  a  market  opportunity  for  a  hand  washing  device  “HWD”  to  be  commercially  distributed  throughout  the  country.  

¨  Considering  a  target  market  initially  comprised  of  individuals  earning  US$50-­‐US$70/month,  the  device  will  be  marketed  as  an  essential  household  item  and  priced  at  US$6.  

¨  With  potential  strategic  partnerships  along  the  entire  supply  chain,  the  operation  is  forecasted  to  sell  975,000  units  over  the  next  5  years,  in  3  distinct  phases:  pilot,  growth  &  optimization,  and  expansion  stages.  

Execu@ve  Summary  (2)  

¨  A  mutually  beneficial  partnership  with  the  Vietnam  Women’s  Union  will  allow  the  device  to  gain  exposure  to  local  households  through  its  13  million  members,  whilst  providing  positive  social  and  monetary  value  in  return.  

¨  With  an  estimated  capital  requirement  of  US$  752,500  over  the  5  years,  the  potential  added  value  to  the  soap  market  is  projected  to  reach  over  US$3  million.  NPV  for  the  enterprise  is  estimated  at  US$50,000,  with  a  payback  period  of  7  years.  

¨  The  venture  is  expected  to  improve  the  living  standards  of  Vietnam’s  rural  communities,  while  providing  a  sustainable  business  model  for  the  success  of  all    stakeholders  involved.  

i.  Vietnam:  Country  Background  ii.  Objective  

Overview  

Vietnam:  Country  Background  

¨  Population  :  85.7  million  ¨  Per  capita  income  rose  from  US$220  in  1994  

to  US$1,052  in  2009  

¨  Life  expectancy  is  currently  estimated  at  71.94  years  and  the  under-­‐five  mortality  rate  is  23  per  1000  live  births  

¨  Avian  flu  is  an  ongoing  threat  in  addition  to  other  potential  infectious  pandemic  outbreaks  

Rapid  economic  development  with  ongoing  risks  of  pandemics  

Vietnam:  Country  Background  (2)  

¨  70%  of  population  resides  in  rural  areas  ¨  Large  inequalities  exist  between  urban  

and  rural  areas  in  income,  infrastructure  and  resources  

¨  Public  investment  in  water  and  sanitation  is  low  compared  with  other  sectors.    (e.g.    US$10  million  per  year  on  average)  

Investment  in  rural  areas  is  CRITICAL  

Hygiene  and  Sanita@on  in  Vietnam

¨  Lack  of  access  to  water  supply,  sanitation  and  hygiene  is  a  global  challenge  and  is  associated  with  2.2  million  deaths  per  year  in  the  world  

¨  In  Vietnam,  economic  costs  to  health  due  to  poor  sanitation  is  estimated  at  US$262  million  per  year  

¨  In  rural  Vietnam  :  ¤  58%  of  people  have  access  to  clean  water  

¤  18%  of  households  have  hygienic  latrines  

Poor  hygiene  and  sanitation  creates  negative  impacts  on  health,  preventable  economic  loss  

Need  for  Hand  Washing  with  Soap  

¨  Only  6.1%  of  people  practice  hand  washing  with  soap  before  eating  

¨  Similarly  low  percentages  of  people  wash  hands  with  soap  before  and  after  baby  changing,  handling  animals,  toilet  use  and  food  preparation    

¨  Effective  hand  washing  with  soap  in  Vietnam  would  reduce  the  annual  0.9  million  deaths  from  Scabies,  Helminthes,  Hepatitis  A  and  Trachoma  by  up  to  34%  

Washing  hands  with  soap  significantly  reduces  disease  

¨  The  threat  of  pandemic  flu  is  ongoing  and  the  risks  to  countries  like  Vietnam  have  only  increased  with  high  population  densities  and  human-­‐animal  contact.    Further  outbreaks  are  expected  over  the  next  five  years.  

¨  Global  studies  show  that  hand  washing  with  soap  when  handling  animals  is  critical  in  preventing  and  containing  infections.  

¨  Vietnam  is  one  of  a  handful  of  countries  that  has  the  highly  pathogenic    H5N1  avian  influenza.  One  of  the  key  messages  for  prevention  of  avian  flu  is  hand  washing  with  soap  

 

Pandemic  Flu  Preven@on  

The  need  for  hand  washing  with  soap  would  increase  exponentially  in  the  event  of  an  outbreak.  

Business  Plan  Objec@ve  

Hand  Washing  Behavior

Market  Opportunity  

Income  generation

＋ Improvement  of  livelihoods  

Lower  child  mortality  rates  

Hygiene  improvement  /  promotion  

＝

 A  commercially  viable  solution  to  rural  hygiene  challenges  

 

Why  a  Hand  Washing  Device?  

A  commercial  model  that  addresses  a  serious  social  issue  and  benefits  several  stakeholders  

• Achieve Goals • Positive Social Impact

• Revenue Stream • Brand Awareness & Trial

• Increased Income • Sense of Purpose

• Improved Hygiene • Family Wellbeing

Customer Distribution

Partners

Public & Private

Partners Supplier

i.  Value  Proposition  ii.  Introducing  the  Hand  Washing  Device  iii.  Venture  Concept  iv.  Social  Benefits  v.  Market  Opportunity  

The  Case  for  Commercializa@on  

Value  Proposi@on  

¨  A  hand  washing  device  that  provides  a  solu@on  to  a  public  health  issue  using  a  commercial  model,  which  effec@vely  leverages  both  the  public  and  private  sector.  

 ¨  Providing  an  aYrac@ve  financial  incen@ve  to  sell  the  device  

has  the  poten@al  to  make  the  social  venture  sustainable.      ¨  The  business  model  will  have  a  posi@ve  social  impact  on  the  

lives  of  the  Vietnamese  people  through  promo@on  of  hand  washing  with  soap.  

Introducing  the  Hand  Washing  Device  

¨  Improves  hygiene  of  rural  households  ¨  Helps  the  Vietnamese  government  to  

measure  the  impact  of  its  hand  washing  initiative  

¨  Provides  an  educational  tool  to  support  the  hand  washing  initiative  

¨  A  trendy  lifestyle  product  designed  by  award-­‐winning  design  house  IDEO  

¨   Creates  a  communication  platform  for  an  FMCG  MNC  in  rural  households    

Product  Features  

¨  Removable  lid  ¨  Easy  to  open  &  close  lever  

¨  Perforated  tap  to  conserve  water  

¨  Handles  for  easy  carriage  

¨  Detachable  basin  for  easy  filling  

¨  Bar  soap  holder  ¨  Different  color  options  for  lid  &  base  

¨  Drainage  for  used  water  

Social  Benefits:  Health    

¨  Reduces  Infectious  Disease  ¤  Hand  washing  with  soap  is  essential  for  reducing  risk  of  seasonal  

and  pandemic  flu  outbreaks    ¤  Hand   washing   with   soap   has   been   shown   to   reduce   diarrheal  

disease  by  47%,  and  respiratory  infections  by  34%  ¤  Diarrheal  disease   is   the  2nd  most   common  cause  of   child  deaths  

globally  n  UNICEF  estimates  one  child  dies  due  to  diarrhea-­‐related  causes  every  30  seconds,  every  day    

Hand  washing  with  soap  saves  lives!  

Social  Benefits:  Economic  

¨  The  Water  &  Sanitation  Program  (WSP)  estimates  annual  financial  losses  due  to  poor  sanitation  of  $780  million  

¨  Proposed  social  enterprise  builds  capacity  for  a  sustainable  future  commercial  venture  

¨  Creates  jobs  at  all  stages  of  the  value  chain  

¨  Reduces  absenteeism  at  both  school  &  work  

Economic  empowerment  for  local  women  

Market  Opportunity  

¨  75%  of  Vietnam’s  population  are  rural  dwellers  with  a  need  for  the  hand  washing  device:  ¤  Approx  64million  people  –  16  million  households    

¨  Hand  washing  with  soap  ¤  Domestic  soap  market  is  US$39  million,  growing  10%  per  year  

¤  Hand  washing  initiative    is  changing  behavior  

¨  Potential  for  nationwide  distribution  through  Women’s  Union  network  

¨  New  product  lines  and  expansion  into  new  markets  

Potential  market  for  hand  washing  device:  US$96  million  

Soap  Market  Poten@al  

¨  975,000  households  reached  in  5  years  ¨  Bar  soap  will  be  purchase  by  each  household  to  complement  

the  hand  washing  device  

 1  bar/  month  

1  bar/  quarter  

1  bar/  6  months  

1  bar/  year  

Soap  Sales  Volume  

25  million  bars   8  million  bars   4  million  bars   2  million  bars  

Soap  Sales  Revenue  

USD  7.5  million  

USD  2.4  million  

USD  1.2  million  

USD  0.6  million  

Vietnam  Hand  Washing  Ini@a@ve  

¨   Running  from  2006  through  2011.  Led  by  the  Ministry  of  Health  and  supported  by  Women’s  Union  (WU),  NGOs,  &  private  sector  partners  

¨  To-­‐date,  over  3.2  million  contacts  reached    

The  foundation  for  creating  a  market  for  a  hand  washing  device  has  been  laid  

Venture  Concept  

Women’s  Union   Rural  Households  “Happy  Team” Social  Enterprise  

   

Province  Level  

District  Level  

Community  Level  

A  social  enterprise  that  seeks  to  improve  public  health  in  Vietnam  through  a  commercially  viable  business  model  

i.  Business  Model          ii.  Production  Plan          iii.  Sales  &  Marketing  Strategy      iv.  Risk  Management  

Business  Plan  

i.  Strategy  ii.  Key  Partners  iii.  Value  Proposition  for  Key  Partners  iv.  Business  Model  Design  v.  Critical  Success  Factors  

Business  Model  

Strategy  

 

 

 

 

¨  Phased  Approach:  A  transition  period  from  a  non-­‐profit  to  commercial  venture  

¨  Pilot  Phase:  Launch  covers  limited  geographic  areas,  but  commercially  driven  in  order  to  verify  the  operation  model  and  to  obtain  market  segment  insights  

¨  Transition  of  Ownership:  Aim  to  complete  the  transition  right  after  the  first  pilot  phase.  Depending  on  the  situation,  it  may  be  required  to  add  additional  phases  before  transitioning  into  the  for-­‐profit  business

Social  Benefits  of  HWD  

                                   Phase  3  Pilot  Phase  

Phased  approach:  From  non-­‐profit  to  profit  

Phase  2  

Partner  Steering  Committee/  Board  

Social  Venture  

Manufacturer  

Women  Union  

Funding  

Participating  

Place  Order  

Distribute  

Train/Manage  

Sell  Pay  

1  

WU  Happy  Team  

End  Consumer  

1  

2  

3  

FMCG,  NGO,  donors    provide  start  up  

funding  

Entity    that  manages  product    manufacturer,  Women’s  Union  Relationship    (Sales  channel)    

Women’s  Union  in  different  tiers  

Key  Partners  &  Business  Model  Diagram  

2  

3  

¨  Promotes  gender  rights  and  women’s  issues  

¨  13  million  members  

¨  Leverage  members  network  to  sell  HWD  

¨  NGO  specializing  in  supply  chain  and  demand  creation  

¨  Lead  the  project  during  the  pilot  phase  

¨  Leverage  know-­‐how  of  market  dynamics  across  rural  Vietnam  

WOMEN’S  UNION   IDE  

¨  Leverage  distribution  network  to  further  market  HWD    

¨  New  product  line  and  revenue  stream  for  manufacturer  

MANUFACTURER  

Key  Partners  

Key  Partners  (2)  

¨  Provides  insights  into  the  personal  care  market  in  Vietnam  

¨  Provides  in-­‐kind  product  for  promotion  which  will  boost  HWD  sales    

¨  Mutually  beneficial  relationship  with  HWD  

¨  Provides  start-­‐up  capital  

¨  Offers  management  and  financial  know-­‐how  

¨  Insights  into  corporate  governance  

FINANCIAL  INVESTORS   FMCG  PARTNER  

Value  Proposi@on  for  Key  Partners    

   Outcome      Contribution  

Women’s  Union   • Improve  hand  hygiene  and  decrease  incidence  of  disease  • Increase  members’  income  • Preparation/Pilot  for  self-­‐funded  initiatives    

• Create  the  demand  for  HWD  • Sales  network  • Sponsorship/financing  initiatives      • Channel  and  distribution  support  

Water  and  Sanitation  Program    

•   Achieve  Hand  Washing  Initiative  objectives  

• Start-­‐up  funding  • Oversight  until  Nov  2011  • Manage  relationship  with  Ministry  of  Health  

WaterSHED   • Achieve  Hand  Washing  Initiative  objectives    • Test  case  for  other  countries  

• Start  up  funding  • Oversight  

Value  Proposi@on  for  Key  Partners  (2)  

   Expectation      Contribution  

International  Development  Enterprises  (”IDE”)  

• Achieve  Hand  Washing  Initiative  objectives  in  a  commercially  viable  way    

• Start-­‐up  funding  • Project  ownership  • Business/sales  training  to  WU  members  • Supply  chain  management  

FMCG  MNC   • Branding  • Increase  soap  sales  • Increase  market  share  • Meaningful  CSR  initiative  

• Start-­‐up  funding  support  • Product  donation  for  co-­‐branding  promotion  • Sales  training  • Market  intelligence  

Business  Model:  Pilot  Phase  

Leveraging  WU  members  network  to  initiate  HWD  pilot  project  to  rural  customers  

Formed  by  IDE,  and  other  stakeholders.  Responsible    for  reviewing  progress,  milestones  and  fund  usage.    

In  charge  of  daily  operation  and  project  execution  including  supply  chain  management  and  WU  liaison  

Steering  Committee  

Women  Union  Members  

Rural  Households  

HWD  Initiative  (Department  within  IDE)    

Delivering  an  affordable  product  to  the  end  user  and  gathering  feedback  in  terms  of  design  and  function  prior  to  Phase  2  

Pilot  Phase:  Implementa@on  Strategy  

Execute  Contract  With  

Partners  

Form  Steering  

Committee  

Finalize  Design  of    Product  

Manufacture  Products  

Design  Sales  &  

Distribution  Processes   Develop  

Sales  Training  With  

Partners  

Develop  Implementation  

Plan  with  Partners  (WU)  

Build/Lend  Warehouse  Facilities   Execute  

Implementation  with  

Partners  (WU)  

Raise  Startup  Funds    

Organize  Management  

Team  

Deliver  &  Store  Inventory  

Manage  Project  

Today   6  months  3  months  

Pilot  Phase:  Steering  CommiYee  

Steering  Committee  ¨  Includes  representatives  from  WU,  IDE  and  other  partners  in  the  HWD  Initiative  

¨  To  seek  financial  sponsorship  from  IDE,  FMCG  MNC,  WSP  and  other  NGOs  to  fund  HappyTap  Initiative  

¨  To  leverage  on  WU  members  to  promote  HWD    

¨  To  negotiate  and  manage  relationship  with  manufacturers  

IDE  Role  and  Deliverables  ¨  IDE  to  lead  pilot  project  –  HWD  Initiative  

¨  IDE  together  with  WU  or  third  party  will  provide  training  to  the  sales  force  

¨  Upon  success  of  the  project,  the  HWD  will  be  introduced  to  more  rural  customers  in  Vietnam  via  introduction  of  Phase  2  

 

Pilot  Phase:  Role  of  Women’s  Union  

¨  Women’s  Union  Support  for  various  aspects  is  critical:  ¤  Political:  The  program  can  become  a  showcase  for  the  Women  ‘s  Union  

¤  Health:  Lobby  Women’s  Union  to  use  HappyTap  as  a  measurement  of  success  of  the  Hand  Washing  Initiative  

¤  Financial:  Commission  scheme  to  Women’s  Union  and  the  HappyTeam  

¤  Strategy:  Convince  Women’s  Union  that  the  initiative  can  be  a  test  case  to  set  up  future  sustainable  social  business  entities  

 *        Assumption:  230,000  units  are  sold  for  the  first  2  years;  $0.50  hourly  pay/$  600  annual  pay.  $0.25  per  device  

sold  goes  to  Women’s  Union  

Margin   Revenue   Translate  into  Work  hours  

Translate  into  Headcount  Cost/Per  Annum  

10%   $57,500*   115,000   48  

Pilot  Phase:  Cri@cal  Assump@ons  

¨  The  sales  agent  makes  enough  income  to  support  and  endorse  the  program  

 

¨  The  Happy  Team  will  treat  the  sales  of  HWD  as  a  significant  income  stream    

¨  Sales  should  increase  income  by  14%-­‐20%  to  make  the  Happy  Team  viable    

Retail  Price   Margin     No.  of  Monthly  Sales   Income   %  of  income*  

$6   18%   6   $6   12%  

$6   18%   7   $7   14%  

$6   18%   8   $8   16%  

$6   18%   9   $9   18%  

$6   18%   10   $10   20%  

$6   18%   12   $12   24%  

*Use  $  50  as  average  monthly  income  (between  VND955K  in  TG  Province  and  VND828K  in  HY  Province);  Source:  Result  of  the  survey  on  Household  Living  Standards  2008,  General  Statistic  Office,  Vietnam    

iWash  Ltd  

Continue  to  leverage  on  WU  members  network  to  market  HWD  to  rural  households  

IDE   FMCG  MNC  

HWD  Pte  Ltd  

Women  Union  Members  

Rural  Customers  

Manufacturer  Women’s  Union  

Other  Financial  Investors  

Submit  the  fund  raising  proposal  to  partners  investment  department  

Work  with  IDEO  to  develop  other  personal  care  products  

Invite  Pilot  Phase  partners  to  participate  in  the  new  share  holding  structure  

Business  Model:  Phase  2  &  3  

Phase  2  &  3:  Ra@onale  

¨  Start  up  capital  provided  by  the  aforementioned  investors    ¨  Women’s  Union  will  provide  access  to  its  members  network  

¨  Manufacturer  will  help  brand  the  products  to  make  it  more  attractive  for  rural  customers    

¨  MNC  will  provide  market  intelligence  and  strategic  planning  for  the  company  

¨  IDE  will  promote  and  facilitate  the  successful  launch  of  HWD    

¨  IDE  and  Women  Union  will  continue  to  train  the  sales  staff  

Alignment  of  shareholder  interests  is  key  

Business  Model  Roadmap  

•  Steering  Committee  with  Project  management  Office    

•  Raise  fund  and  transforming  to  a  share  holding  structure  

Pilot  Phase  (1  Year)     Phase  2  (1  Year)   Phase  3  (3  Years)  

•  Corporate  Governance  •  Preparation  for  Initial  Public  

Offering    

•  Secure  funding    support  for  the  initial  launch  of  HWD  

•  Leverage  WU  network  an  effective  sales/distribution  network  

•  Expand  from  rural  areas  to  urban  areas    

•  Expand  from  Vietnam  to  other  countries    

Management  &  Governance    

Business  Model  

•  Promote  HWD  into  rural  household  commercially  

•  Create  a  social  venture  with  key  stakeholders  in  Vietnam  

•  To  continue  to  grow  via  introduction  of  new  hygiene  and  public  health  products    e.g.  septic  tank  

Objective  

•  Utilize  the  proven  business  model  and    network  resources  to  expand  from  HWD  to  other  households  products  that  bring  social  economic  benefits  to  rural  households    

Cri@cal  Success  Factors  

Pilot  Phase  (1  Year)   Phase  2  (1  Year)   Phase  3  (3  Years)  

1.  Funding  Support  for  start  up  

2.  Endorsement  from  WU  HQ  to  make  HWD  a  measurement  of  success  for  HW  initiative    

3.  Women  Union  Performs  in  distribution  and  sales  network  

4.  The  sales  force  makes  money  

5.  Provide  good  quality  and  distribution  capability  

6.  Project  management    

1.  Intention  for  WU  to  set  up  a  social  enterprise  under  JV  structure    

2.  Optimize    the  sales/  distribution  network  

3.  Demonstrate  the  successful  business  case    so  to  get  the  interests  from  the  potential    investors    

4.  Buy  in  from  the  Investors  and  Sound  Business  Plan  

1.  Introduce  HWD  to  all  parts  of  Vietnam  

2.  New  product  introduction  3.  Replicate  Business  Case  

regionally  

i.  Opportunity  ii.  Target  Market                iii.  Value  Proposition  &  Brand  Strategy  iv.  Sales  Process  v.  Implementation  Strategy  vi.  Sales  Projections    

Sales  &  Marke@ng  Strategy  

¨  Potential  market  for  hand  washing  device  is  $96  million    

¨  Leverage  powerful  nationwide  partners  to  drive  sales  

   

¨  First  year  sales  will  surpass  100,000  units  

 ¨  Exclusive  co-­‐branding  for  private  partner  

Sales  Opportunity  

Market  Research  Focus    

¨  Current  hand  washing  situation  in  Vietnam?  

¨  What  are  the  hygiene  risks  associated  with  hand  washing  without  soap?  

¨  What  are  some  of  the  effective  ways  to  promote  hand  washing  behavior  change?  

¨  What  are  a  few  of  the  possible  solutions?  

¨  What  should  be  the  target  market?  ¤  Geographic    

¤  Demographic      

¨  What  would  be  a  good  user-­‐friendly  design?    

¨  What  is  the  potential  market  demand?  

Market  Research  Key  Findings    

¨  Low  hygiene  standards:  ¤  In  rural  areas,  only  8.6%  of  the  population  has  a  water  source  inside  

the  household  

¨  Rural  women’s  aspirations:  ¤  Children’s  wellbeing  and  future  is  a  primary  motivation    

¤  Desire  to  provide  better  lives  for  the  family  

¨  Demand  of  device  in  rural  areas:  ¤  No  access  to  water  near  latrine  or  kitchen  

¤  Need  for  a  clean  water  source  

¤  Easy  reminder  to  hand  wash  

¨  Critical  hand  washing  junctures  ¤  Toilet  use,  food  preparation,  baby  changing,  animal  handling  

 

 

Target  Market  

¨  Monthly  income  US$50-­‐US$70  per  capita  

¨  Rural  households  with  children  under  5  

¨  Potential  institutional  customers  ¤  Rural  health  stations/hospitals  

¤  Universities,  schools  

¨  Potential  corporate  customers  

¨  Commercial  farms,  private  hospitals,  etc  

 

 

¨  Nationwide    

¨  Rural  areas  

¨  Commune  level  

Consumer    Demographics   Geographical  Focus  

Visual  Iden@ty  

Price  Point  

¨  Focus  groups  and  field  research  conducted  by  WSP,  IDE,  IDEO,  and  GIFT  showed  that  end-­‐user  willingness  to  pay  for  the  device  is  $5  -­‐  $7  

¨  HappyTap  will  be  marketed  as  more  than  just  a  hygiene  product  and  to  reflect  that  price  point  is  set  at  $6  

Price  point  must  reflect  true  economic  value  

Vietnam  Women’s  Union  

¨  Engage  Vietnam  Women’s  Union  to  take  ownership  of  the  sales  process  in  year  one  ¤  In  line  with  their  mission  to  empower  Vietnam’s  women  to  

work  creatively,  improve  their  material  lives,  &  nurture  happy  families  

¤  A  national  network  that  includes  13  million  members  and  spans  all  63  provinces,  500  districts,  and  11,000  communes  

¤  Already  a  key  partner  in  executing  the  ongoing  Vietnam  Hand  Washing  Initiative  

Women’s  Union  is  the  ideal  distribution  partner

Vietnam  Women’s  Union  

¨  As  well  as  having  extensive  reach,  the  WU  is  an  influential  and  trusted  body  for  women  nation-­‐wide  

¨  Although  not  it’s  main  function,  the  Women’s  union  has  been  successful  in  a  number  of  commercial  ventures  ¤  Domestic  &  regional  tourism  

¤  Rural  sanitation  marketing  &  latrine  sales  ¤  Microfinance  

¨   After  trial  phase  WU  will  have  option  to  set  up  a  new  venture  ¤  Expand  coverage,  product  lines,  and  sales  force  

Project  will  build  capacity  within  Women’s  Union  for  future  commercial  ventures

The  Happy  Team  

¨  Within  each  commune  WU  has  a  15  member  executive  board  ¤  These  are  the  champions,  the  sales  agents  –  The  Happy  Team!  

¨  In  exchange  for  the  benefits  attached  to  HappyTap,  a  project  partner  will  provide  WU  training  to  equip  the  Happy  Team  with  the  “sellers  toolkit”  ¤  Commercial  knowledge  

¤  Sales  &  Bookkeeping  skills  

¨  Innovative  distribution  model  means  $1.25  incentive  per  device  can  be  offered  to  WU  ¤  $0.25  to  the  organization  

¤  $1  to  the  individual  (12%-­‐24%  increase  in  monthly  household  income  based  on  sales  agents  current  average  earning  of  $50/month)  

Distribution  partnership  is  a  win-­‐win!

The  Sales  Process  

✚

5  6  

1.  Manufacturer  Ships  product  to  Women’s  Union  

2.  Coordination  /support  from  IDE  

3.  Women’s  Union  sends  product  out  to    Happy  Team  

4.  Happy  Team  promotes  and  sells,  receives  incentive  

Women’s  Union  can  finance    purchase  of  HappyTap  

¨  WSP  ¤  Feature  in  hand  washing  

initiative  campaign  

¨  Private  Partner  ¤  Mention  in  TV  commercials  

¨  Women’s  Union  ¤  Radio  loudspeaker  throughout  

region    

¨  Women’s  Union  ¤  Hand  washing  activities  

¤  Monthly  meetings  &  other  scheduled  events  

¤  Household  visits  

¤  Internal  communications  

¨  Private  Partners  ¤  Grass-­‐roots  activation  

Mass  Media  

Low  cost,  High  impact

The  Marke@ng  Mix  

Direct  Marketing  

Private  Marke@ng  Partner  Support  

INPUT   BENEFITS  

PRIVATE  SECTOR  PARTNER  

§   Seed  Funding  §   In-­‐kind  product:  

§   100,000  Soap  bars  §   Training  for  the  Happy  Team  §   Integra@on  into  exis@ng  marke@ng  campaign    

§   Exclusivity  §   Brand  Awareness  §   Trial  §   Increased  Penetra@on  §   Future  sales  §   Posi@ve  Social  Impact:  

§   Follows  Hindustan  Lever  “Shak@”  model  

 

Contribute  to  community  and  boost  sales

Co-­‐Branding  Opportunity  

Women’s  Union  and    

private  partner    enjoy    

co-­‐branding  on  HappyTap  

 

 

✚

First  50,000  units  will  be    

offered  with  two  free  soap  bars  

 

 

Achieve  brand  association  and  encourage  product  trial  

SOAP SOAP

Implementa@on  Strategy:  Pilot  Phase  Objec@ves  ¨  After  the  Pilot  Phase,  we  expect  to  

collect  the  following  market  data  

¨  Differences  between…  ¤  Northern  Region  (Hung  Yen)  and  

Mekong  River  Delta  Region  (Teng  Giang)  

¤  Income  levels  of  end  user  

¤  Household  with  kids  and  without  kids  

¤  Product  as  a  whole  or  only  top  portion  

¤  Household  where  water  infrastructure  is  available  or  not  available  

Implementa@on  Strategy:  Pilot  Phase  Ini@al  Target  Area  

• 2  provinces          (Teng  Giang,  Hung  Yen)  • 4  districts        (2  in  each  province,  TBD)  • All  communes  under  selected    districts  (around  80  comm.  total)  

• Total  120,000  households  

WU  Province  

Social    Enterprise  

Women’s  Union  Rep.  

WU  Province  

WU  Dist.  

WU  Dist.  

WU  Dist.  

WU  Dist.  

WU  

Com.  WU  

Com.   ・・・ WU  Com.  

WU  

Com.  

Selection  Principles  

¨  Align  with  Women’s  Union  

¨  At  least  two    regions  

¨  North  and  South  

¨  Handwashing  initiative  ongoing  

Implementa@on  Strategy:  Sales  Area  Expansion  

¨  Phase  2  ¤  By  adding  new  districts  within  the  same  province  

¤  For  new  province,  start  in  2  districts,  then  expand  to  all  remaining  districts  within  the  province.  

¤  Expand  to  adjacent  districts/provinces  first  

¨  Phase  3  ¤  Nationwide  

¤  Different  Countries  (i.e.  Cambodia,  Laos)  

Plan  to  reach  600,000  households  by  Phase  2,  3,360,000  by  Y5  

Sales  Forecast  –  Assump@ons  

¨  Penetrate  2  new  Provinces  each  year  in  Yr  1  and  Yr  2  ¤  Thereafter,  3  new  Provinces  in  Yr  3  and  Yr  4  respectively,  and  4  new  

Provinces  in  Yr  5  

¨  8  districts  will  be  targeted  in  each  province,  starting  with  2  in  the  first  half  of  the  year,  and  6  in  the  second  half  

¨  Within  each  district,  20  communes  will  be  targeted  

¨  There  are  on  average  1,500  households  in  each  commune  

¨  8  sales  agents  will  be  appointed  in  each  commune  to  create  awareness  of  the  HWD  

Over  3  million  households  will  be  reached  by  Year  5  

Sales  Forecast  –  Assump@ons  (2)  

¨  Through  the  sales  agent  network,  it  is  estimated  that  48  households  will  be  reached  every  month  by  each  sales  agent;  in  4  months,  all  our  target  market  in  one  commune  will  be  reached  

¨  Market  Penetration    

 (calculated  as  %  of  households  buying  one  HWD  out  of  the    total  no.  of  households  reached  in  each  commune)    

By  end  of   Yr  0.5   Yr  1   Yr  1.5   Yr  2   Yr  2.5   Yr  3   Yr  3.5   Yr  4   Yr  4.5   Yr  5  

Base   20%   28%   29%   30%   31%   32%   33%   34%   35%   36%  

Best   25%   32%   33%   34%   35%   36%   37%   38%   39%   40%  

Worst   10%   13%   14%   15%   16%   17%   18%   19%   20%   21%  

Sales  Volume  Projec@ons  

¨  No.  of  HWD  sold  (Cumulative)  

   

 

By  end  of   Yr  0.5   Yr  1   Yr  1.5   Yr  2   Yr  2.5   Yr  3   Yr  3.5   Yr  4   Yr  4.5   Yr  5  

Base   24,000   105,600   159,600   246,000   316,800   448,800   539,400   678,600   788,400   975,600  

Best   30,000   128,400   184,800   288,000   364,200   521,400   615,600   780,000   896,400   1,117,200  

Worst   12,000   51,600   75,600   120,000   154,800   223,800   437,400   513,600   572,400   675,600  

Pilot   Phase  2   Phase  3  Phases  

Huge  market  potential:  1  million  units  will  be  sold  by  Year  5    

i.  Supply  Chain    ii.  Sourcing  &  Fulfillment  i.  Distribution  &  Logistics  ii.  Inventory  Management  iii.  Partner  Selection  Criteria  

     

Opera@onal  Plan    

Supply  Chain  

Partners  

Manufacturer  

End    User  Enterprise  

HappyTap  

Soap  

Soap  +  HappyTap  

Production  Order+  Mold(1  time)  

Monetary  Input   Payment  for    purchase  

$$$  

Revenue  

$$$  

$$$  

$$$  

Sales  training  

WU  

Revenue  

$$$  

Soap  +  HappyTap  

Happy  Team  

Enterprise  takes  ownership  of  product  until  sale  is  made  

Sales  and  Opera@ons  Plan  (S&OP)  

¨  S&OP  is  the  alignment  of  demand,  supply  and  financial  resources    

¨  Benefits:  ¤       Maximize  Utilization  of  Plant  and  Equipment  

¤       Minimize  Costs/Maximize  Profits  

¤       Minimize  Changes  in  Production  Rates  ¤       Minimize  Changes  in  Workforce  Levels  

¤       Minimize  Inventory  Investment        

Demand  and  supply  should  be  aligned  

Produc@on  Capacity  

Production Capacity vs Sales Forecast

05000

1000015000200002500030000350004000045000

Y0-Q1

Y0-Q2

Y0-Q3

Y0-Q4

Y1-Q1

Y1-Q2

Y1-Q3

Y1-Q4

Y2-Q1

Y2-Q2

Y2-Q3

Y2-Q4

Y3-Q1

Y3-Q2

Y3-Q3

Y3-Q4

Y4-Q1

Y4-Q2

Y4-Q3

Y4-Q4

Y5-Q1

Y5-Q2

Y5-Q3

Y5-Q4

Production Capacity Sales Forecast

Production Capacity

Increased Production Capacity

Sales Forecast

PILOT PHASE PHASE I PHASE II

Forecast  shows  additional  capacity  is  available  

HappyTap  Product  Requirements  

¨  High  Quality  ¨  Low  cost  

¨  Flexible,  highly  durable    

¨  UV  Resistance  for  permanent  outdoor  application  

¨  Possible  Transparency  of  water  container  

¨  Water  tightness  

¨  Color  modification  

HappyTap  Assembly  

No   Name   Weight  (gram)  

Proposed  Material  

1   Water  Container   776   HDPE/PP  

2   Container  Lid   222   PP  

3   Container  Stand   660   PP  

4   Valve  Spout   48   PP  

5   Valve  Spray  Bar   10   PP  

6   Valve  Handle   10.1   PP  

7   Valve  Nut   2   open  

8   Valve  Ball   5   open  

9   Valve  Washer   2.6   open  

10   Valve  Core   2.5   open  

11   Valve  Connector  1   30   open  

12   Valve  Connector  2    

52   open  

Design  and  product  features  have  not  been  finalized  

Distribu@on  Model  

Province Level

District Level

Commune Level

Women’s  Union   Households  Happy  Team Production  

Distribu@on  and  Logis@cs  

¨  Program  Owner  instructs  production  to  manufacture  HappyTap  

¨  Products  are  manufactured  and  stored  at  factory  

¨  Products    are  distributed  to  Women  Union’s  district  headquarters  

¨  Women  Union  district  headquarters  store  inventory  for  sale  and  remain  in  charge  of  distribution  to  communal  headquarters  

¨  Happy  Team  sales  force  is  expected  to  manage  transportation  from  communal  headquarters  to  the  end  users    

Enterprise

Production Program Owner Province WU District WU Commune WU

Happy Team End User

Inventory  Management    

¨  Ownership:  Social  enterprise    

¨  Storage:    ¤  Mass  Inventory:  at  production  site  

¤  Inventory  for  frontline  sale:  at  targeted  WU  district  office  

¨  Inventory  Management:    ¤  District  WU:  maintains  sufficient  inventory  for  sales    

¤  Province  WU:  consolidates  districts’  orders  to  Social  enterprise  

¤  Social  enterprise:  manage  production,  inventory  and  distribution  flow  

¤  Production:  distribute  product  by  owner’s  order                                *  Above  flow  applicable  to  all  phases    

Inventory

Production Enterprise

Production Social enterprise Province WU District WU Commune WU

Happy Team End User

Manufacturing  Partner  Selec@on  Criteria  

¨  Required  ¤  Manufacturing  experience  in  plastic  products  ¤  Ability  to  meet  production  capacity  and  quality  standards  ¤  Scalability    and  expansion  capacity  of  workforce  and  

production  ¤  Established  distribution  network  ¤  Ability  to  meet  the  security,  privacy  and  intellectual  property  

requirements  ¤  Availability  of  storage  space  ¤  Humanitarian:  No  usage  of  child  labor  in  the  entire  

production  process  

 

¨  Preferred  ¤  Ability  to  support  the  required  cost  for  catalogues  and/or  

shelf  space  and  more  ¤  Ability  to  support  the  chain  with  education  and/or  

information  ¤  CSR  friendly  processes  used  throughout  production  ¤  Company  Website  

Risk  Management  

i.  Risks  &  Mitigation  ii.  Contingency  Plan  iii.  Exit  Strategy  

     

Risks  &  Mi@ga@on  

¨  Ownership  Structure  ¤  Phase  2  &  3  are  contingent  

on  the  success  of  Pilot  Phase  

¨  Potential  Social  Issue    ¤  Negative    association  with  

multi  level  marketing  

¨  Sales  &  Marketing  ¨  Contingent  on  WU  sales  &  

marketing  capability  

¨  Monitor  sales  progress  closely  and  make  appropriate  adjustments  

¨  Seek  legal  advice  from  local  law  firms  and  WU  

¨  Provide  regular  training  and  monitoring    

Risks   Mitigation  

Risks  &  Mi@ga@on  (2)  

¨  Secure  strong  investor  with  long  term  social  view  

¨  Collect  market  feedback  and  fine  tune  design  for  newer  version  

¨  Need  to  structure  deal  to  take  into  account  future  production  

¨  Business  Partners  ¨  Value  proposition  may  not  be  

well  understood  by  pure  financial  investors  

¨  Usability  ¨  The  product  may  not  be  user  

friendly  which  may  result  in  poor  sales  

¨  Manufacturer  won’t  produce  small  quantities  for    pilot  

Risks   Mitigation  

Con@ngency  Plan  

¨  Women’s  Union  ¤  Success  or  failure  is  contingent  on  Women’s  Union  commitment  on  the  

program  

¤  Besides  relying  on  Women’s  Union,  we  need  to  seek  other  avenues  to  distribute  HappyTap  commercially  

¤  We  may  need  to  consider  OEM  model  and  develop  our  own  sales  channel  

¨  Distribution  Network  ¤  Ensure  the  Happy  Team  is  properly  incentivized.    We  provide  an  opportunity  

for  women  to  increase  their  monthly  household  income  by  25%  if  they  manage  to  sell  10  units  of  HappyTap  

¤  Provide  regular  training  and  monitoring  of  sales  target  

¤  Besides  WU,    need  to  actively  explore  other  distribution  network  concurrently  

Exit  Strategy    

¨  IDE  to  exit  upon  commercialization  of  HappyTap  

 

¨  Investors  to  exit  via  trade  sale  

 ¨  In  the  event  that  HappyTap  does  not  take  off  after  Pilot  

phase,  IDE  will  continue  to  house  the  project  through  the  current  organization  structure  or  spin  off  a  new  entity  under  the  IDE  umbrella  

i.  Objectives  of  Governance    ii.  General  Governance  Principles  iii.  Corporate  Governance  &  Management  

 �

Management  and  Governance  

Governance  Objec@ves  

Governance  plays  the  key  role  of  setting  and  monitoring  the  direction  of  the  organization,  so  as  to  ensure:  

¨  To  administer  the  Plan  and  the  Funds  in  a  prudent  and  cost  effective  manner.    

¨  To  prudently  invest  the  Funds  for  long-­‐term  growth  at  a  minimum  level  of  risk.    

¨  To  meet  the  objectives  and  expectations  of  the  key  stakeholders.  

¨  Organization  works  at  a  high  level  of  professionalism  both  internally  and  externally  

¨  Organization  remains  financially  sound  and  sustainable  

¨  Legal  compliance  

 

Governance  Principles  

¨  Compliance  with  all  national  laws  relevant  to  the  business.  

¨  Fulfilling  socially  obligations  :  ¤  Product  safety.  ¤  Commitment  towards  the  community.  

¤  Commitment  towards  the  partners  and  the  stakeholders.  

¨  Management  and  finance  transparency  and  disclosure.  

¨  Safeguarding  of  interests  of  various  stakeholders  (shareholders,  board  of  directors,  community  council,  manufacturer  and  employee  etc.)  

¨  Protect  the  reputation  of  all  the  key  shareholders.  

¨  No  political  payments  /  bribery  

¨  All  funding  will  only  be  used  for  the  intended  project  

Corporate  Governance  &  Management:    Pilot  Phase  Governance  Structure  

Steering  Committee  Organization  

•  Ownership  of  project  as  a  leader  (IDE)    

•  Ownership  of  HWDs  until  sales  point  

•  Oversight  of    manufacturing  &  mold  creation  

•  Oversight  of  link  between  manufacturer  &  Women’s  Union  

a.  Transport  &  Storage  at  (Provincial,  District,  Community)  

b.  Inventory  management  

c.  Payment  Process  

d.  Assurance  of  Key  Success  Factors  

e.  Happiness  of  end  users  

f.  Training  of  A  team  

Steering    

Committee    Leader:  

 IDE  

Manufacturer  

WSP  

WATERSHED  FMCG  MNC  

Women’s  Union  

Phase  2:  Proposed  Ownership  Structure  

New  Entity  setup  -­‐  HappyTap  Ltd.    p  With  the  successful  roll-­‐out  of  pilot  

phase,  IDE  will  set  up  the  new  entity.  Shareholders  &  Ownership  p  Women’s  Union  is  offered  sweat  equity  

in  new  company  with  contribution  of  sales  and  marketing  efforts  and  network  resources  

p  Women’s  Union  takes  the  lead  in  the  new  entity.  

p  Other  potential  shareholders  are  FMCG,  Manufacturer  and  other  social  investors.    

 The  proposal  is  only  based  on  current  assumptions.  Ownership  structure  is  expected  to  be  re-­‐aligned  after  Phase  II.  

Ownership  Concentration  Ratio  

Phase  2  &  3:    Proposed  Organiza@on  Structure  

Management  of  system  and  processes  ¨  To  ensure  stable  and  transparent  processes  are  conducted  

¨   Have  system  and  objectives  established  that  are  met  in  alignment  of  the  shareholders  interest    

Key  Management  Tools    ¨  Organization  Management  

¤  Define  reporting  line  and  escalation  rules  ¤  Create  RASIC  chart  (Responsible,  Approve,  Support,  Inform,  Consult)  to  

definite  job  responsibilities  on  departmental  and  individual  level  ¤  Organize  regular  meetings  on  Board  level,  management  level  and  department  

level  to  facilitate  information  flows  and  create  action  plans  to  adjust  business  plans  and  timelines  

 

Phase  2  &  3:    Management  System  and  Monitoring  

Key  Management  Tools    ¨  Process  Management:    

¤  Operations  guidelines  /  SOP  documentation  on  departmental  level  ¤  Define  Reporting  system  

¨  Operations  and  Performance  Management    ¤  Sales  Report,  Stock  Report      ¤  Market  Penetration  Analysis  ¤  Finance  Balance  Sheet  /  cost  and  profitability  analysis  

¨  HR  Management  ¤  Staff  Skill  requirement  and  training  development  ¤  Staff  engagement  survey  ¤  Staff  annual  assessment  

Phase  2  &  3:    Management  System  and  Monitoring  

Phase  2  &  3:    Management  Role  of  the  Board  It  is  proposed  that  the  board  of  directors  will  consists  of    6  members  :  4  non  

executive  directors  and  2  executive  directors.  ¨  4  of  the  executive  directors  are  shareholders  of  the  HappyTap.  

¨  2  of  the  non  executive  directors  are  from  Women’s  Union.  

Selection  of  the  Non  executive  Directors:    ¨  As  the  women’s  union  played  a  big  role  in  the  sales  of  the  product,  engagement  of  the  

communal  interests  and  distribution  of  the  products.  It  is  hence  essential  that  that  the  women’s  union  has  a  role  in  the  BOD.  

¨  Women’s  union  shall  act  as  a  voice  of  the  communal  and  align  their  interests  to  the  interests  of  the  share  holders.  

Overall  Roles  of  the  Board  :    ¨  They  will  appoint  one  CEO  whose  remuneration  is  decide  by  the  board.    

¨  The  board  ensures  that  all  there  is  equal  rights  for  all  shareholders.  

¨  Exercise  accountability  to  shareholders  and  be  responsible  to  relevant  stakeholders  

 

 

Phase  2  &  3:    Management  Role  of  Chief  Execu@ve  

¨  Develop  strategy  proposals  for  recommendation  to  the  Board  and  ensure  that  agreed  strategies  are  reflected  in  the  business.  

¨  Develop  annual  plans,  consistent  with  agreed  strategies,  for  presentation  to  the  Board  for  support.  

¨  Plan  human  resourcing  to  ensure  that  the  Company  has  the  capabilities  and  resources  required  to  achieve  its  plans.  

¨  Develop  an  organisational  structure  and  establish  processes  and  systems  to  ensure  the  efficient  organisation  of  resources.  

¨  Be  responsible  to  the  Board  for  the  performance  of  the  business  consistent  with  agreed  plans,  strategies  and  policies.  

¨  Lead  the  executive  team,  including  the  development  of  performance  contracts  and  appraisals.  

¨  Ensure  that  financial  results,  business  strategies  and,  where  appropriate,  targets  and  milestones  are  communicated  to  the  investment  community.  

¨  Develop  and  promote  effective  communication  with  shareholders  and  other  relevant  constituencies.      

Financial  Plan  

i.  Key  Points    ii.  Pricing  Structure  iii.  Capital  Requirement  iv.  Financial  &  Volume  Projections  v.  Scenario  Analysis  vi.  Recommendations  &  Conclusions  

�

Key  Points  

¨  Financially  attractive  business  proposition  for  the  sales  agent  ¤  Additional  12%  -­‐  24%  income  to  one  household    

¨  Financially  sustainable  business  venture  ¤  NPV:  US$  50,000  ¤  Initial  Capital  Requirement:  US$326,500    

¨  Huge  potential  for  soap  market  ¤  Soap  Sales  Revenue:  US$  2.4-­‐7.5million    

Pricing  Structure  

¨  Retail  Selling  Price                                                $6.00    

¤ Manufacturing  Cost    $3.57  ¤  Transportation      $0.97  ¤ Women’s  Union  Margin    $0.25  ¤ HappyTap  Margin    $0.21  ¤  Sales  Agent  Margin    $1.00    

 Pushing  sales  through  the  sales  agent  incentive!  

Capital  Requirement  

¨  Initial  Capital  Requirement:                                          $326,500      

¤ Molds:        $103,000  ¤  50,000  units:      $  178,500  ¤ Management:      $      20,000  ¤ Branding:      $      20,000  ¤ Others:        $            5,000  ¤ Year  5  additions      $  426,000  

2011-­‐2016  Projec@ons  

¨  Profit  &  Loss  Projections:    

   

Year  1   Year  2   Year  3   Year  4   Year  5  

Revenue   633,600   842,400   1,216,800   1,378,800   1,782,000  

Trade  Margin   126,720   168,480   243,360   275,760   356,400  

COGS   376,992   501,228   723,996   820,386   1,060,290  

Gross  Profit   129,888   172,692   249,444   282,654   365,310  

Marketing    &  Transport  

102,432   144,612   208,884   236,694   305,910  

Net  Profit   27,456   28,080   40,560   45,960   59,400  

Financial  Evalua@on:  Summary  

¨  7-­‐year  funding  required:    $    752,500  ¤  Initial  Capital:        $    326,500  ¤ Additional  Capital:    $    426,000  

p  Net  Present  Value:    $50,000    ¨  Payback  Period:  7  years  

 High  growth  rate*  of  74%  p.a.  is  achieved  

*Growth  rate  is  calculated  as  the  Compound  Annual  Growth  Rate  for  the  5-­‐year  period.  

 

Sales  Volume  Projec@ons  –  Base  Case

0%  

10%  

20%  

30%  

40%  

50%  

0  

200,000  

400,000  

600,000  

800,000  

1,000,000  

1,200,000  

Yr  0.5   Yr  1   Yr  1.5   Yr  2   Yr  2.5   Yr  3   Yr  3.5   Yr  4   Yr  4.5   Yr  5  

%  M

arke

t  Pen

etratio

n  

No.  of  H

WD  sold  

By  the  end  of  each  period  

Sales  Projections   Market  Penetration  

Volume  Projec@ons  Sensi@vity  Analysis

¨  Best  Case  

¨  Worst  Case  

0%  

10%  

20%  

30%  

40%  

50%  

0  

200,000  

400,000  

600,000  

800,000  

1,000,000  

1,200,000  

Yr  0.5   Yr  1   Yr  1.5   Yr  2   Yr  2.5   Yr  3   Yr  3.5   Yr  4   Yr  4.5   Yr  5  

%  M

arke

t  Pen

etratio

n  

No.  of  H

WD  sold  

By  the  end  of  each  period  

Sales  Projections   Market  Penetration  

0%  

10%  

20%  

30%  

40%  

50%  

0  

200,000  

400,000  

600,000  

800,000  

1,000,000  

1,200,000  

%  M

arke

t  Pen

etratio

n  

No.  of  H

WD  sold  

 Under  the  worst  case,  market  penetration  rate  of  21%  is  

maintained      

Scenario  Analysis  

HWD  Volume   Sales  Agent   NPV   Soap  Volume  

Best  Case   1,117,000   USD  8/mo   423,000   28,750,000  

Base  Case   975,000   USD  6/mo   50,000   25,000,000  

Worst  Case   675,000   USD  3/mo   (48,000)   17,500,000  

-5

0

5

10

HWD Volume Sales Agent NPV Soap Volume

% Change

Best

Base

Worst

Recommenda@on  

 

 

 

 

 

 

¨  Due  to  the  benefit  earning  all  parties  a  win-­‐win  ;  better  health  and  hygiene  to  villagers,  extra  income  to  women  in  rural  areas,  accomplishment  of  IDE  and  public  partners  mission,  business  opportunity  and  brand  recognition  for  plastic  manufacturer  and    FMGG,    recommendations  are:  

 

¨  Women’s  Union  resources  can  be  extensively  utilized  to  contribute  to  the  success  of  the  project.  

 

¨  Project  to  be  broken  into  phases  as    to  ensure  efficiency  and  reduce  risk  of  failure.  

Conclusion  

¨  This  enterprise  has  the  ability  to  raise  considerable  hygiene  awareness  amongst  Vietnam’s  poorest  communities,  whilst  providing  a  sustainable  social  investment  platform  for  the  region.    

 ¨  Furthermore,  sales  agents  commissioned  to  distribute  the  products  are  

also  able  to  create  income  for  their  households.    ¨  In  addition  to  the  social  and  monetary  value  created  in  the  rural  

population,  the  venture  is  able  to    significantly  propagate  interest  in  the  lagging  local  soap  market.    

 ¨  As  a  result,  the  soap  industry  will  greatly  benefit  from  additional  revenue  

creation.  

Appendices  

i.  Key  Assumptions  ii.  Payment  Process  iii.  Financial  Spreadsheets  Attached  

�

Key  Assump@ons  

p  Year  zero  is  based  on  the  6  month  pilot  phase  for  testing  and  redesign  

p  Molds  purchased  in  year  zero,4  &  5:  production  capacity  per  mold  up  to  400,000  

p  Sufficient  production  capacity  in  delivering  sales  until  year  5  

p  COGS  comprise  of  labor,  raw  material,  injection  molding  press  time,  packaging,  other  overheads  and  manufacturer’s  profit  margin  

p  Marketing  expenses  amount  to  1%  of  sales  

Key  Assump@ons  

¨  HWDs  will  be  distributed  every  month  to  the  WU  

¨  Happy  Team  sales  agents  current  income  on  average  is  $50/month  which  

allows  for  sufficient  incentive  of  $6/mo  from  HappyTap  sales    

¨  Minimal  storage  space  is  required  and  WU  office  will  be  leveraged  

¨  Just-­‐In-­‐Time  inventory  

¨  Assumed  tax  free  entity  

¨  NPV  is  based  on  initial  funding  amount  

¨  Discount  rate  10%  up  to  15  years  

Payment  Process:  Phase  1  

Production  Program  Owner  

WU    Province  

WU  District  

Happy  Team   End  User  

WU  Commune  

COD  

Consignment  (30  days  credit)  50%  deposit  and    50%  upon  delivery  (30  days  credit)  

Payment  Process:  Phase  2  &  3  

COD  

Consignment  (sellers  pay  for  goods  sold  on  a  monthly  basis)    

Payment  with  credit    for  1  month  curtained  period  

Production  Program  Owner  

WU    Province  

WU  District  

Happy  Team   End  User  

WU  Commune  

Payment  with  credit    for  1  month  curtained  period