A PROPOSED INSTALLATION OF FOG HARVESTING

FACILITY AS AN ALTERNATIVE SOURCE

OF WATER AT BARANGAY TABON,
DALAGUETE, CEBU

February 28, 2018

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Table of Contents
Section
1 EXECUTIVE SUMMARY 1
2 DESCRIPTION OF SERVICE 1
3 TECHNOLOGY CONSIDERATIONS 2
4 SERVICE MARKETPLACE 2
5 MARKETING STRATEGY 2
6 ORGANIZATION AND STAFFING 3
7 PROJECT TIME TABLE 5
8 FINANCIAL PROJECTIONS 7
9 FINDINGS AND RECOMMENDATIONS 11
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EXECUTIVE SUMMARY
Water is essential for every living thing on earth. However, the increasing number
of population demands more water sources for their daily activities that caused water
scarcity seriously felt especially by those living in mountainous places. Barangay Tabon,
a barangay of Dalaguete is one of the 250 communities of the entire country that has no
access to enough water supply due to its upland location. Nevertheless, with the
presence of fog the proponents were inspired to seek a solution to the problem through
the installation of a Fog Harvesting Facility.
The goal of the proposed project is to determine the feasibility of installing a fog
harvesting facility at Barangay Tabon, Dalaguete, Cebu. The business will run as a
cooperative named Cebu Fog Water Cooperative whose members are the households
of the barangay who are also the initial target market for this project. Five Board of
Directors together with the mandated committee would organize it. The initial funds
needed to start its operation will be ₱ 3,462,011.00. The land needed to construct the
fog harvesting facility and the small office will be the contribution by some members of
the cooperative. The service will be available for eight hours daily; however, the fog
harvesting facility will continue to collect water 24 hours daily. The water collected will
initially be stored in the water tanks where the galvanized iron water pipes are connected
to the automatic water machine located in every sitio. The automatic water machine will
dispense the water with the use of its timer equivalent to one gallon at ₱ 1.00. This price
is expected to remain constant for the first five years or as determined by the assembly.
Cebu Fog Water Cooperative (CFWC) is expected to earn a substantial income
averaging 12.4% of the investment in five years and its payback period discounted at
12% of 3.8 years. Water, being one of the necessities, yet a scarce resource plays a
vital role in the economic growth and development particularly to the residents in
mountain barangays to improve their way of living. In the light of the findings, the
implementation of this project will also benefit its members’ to develop the habit to save,
to earn interest on its share capital and patronage refund and to be self-sufficient in their
pursuit of economic prosperity. Its expansion would further benefit not just the residents
of Barangay Tabon, but most probably other mountainous barangays in Cebu and even
other provinces.

DESCRIPTION OF SERVICE
The said facility is entirely dependent on the fog harvesting technology that will
be constructed at Barangay Tabon, Dalaguete, Cebu having an altitude of 695 meters
above sea level. Fog harvesting involves the use of simple, flat, rectangular nets of
polypropylene Raschel mesh with an area of 40 square meter supported by a post at
both ends and installed perpendicular to the direction of the wind. The proponents based
the facility on the fact that one can accumulate water from fog particles. Fog is a mass of
water vapor condensed into water droplets as it passes through the mesh. It will then
form into water droplets that will drip down into the gutter through the PVC tubes leading
to the cistern for storage. It could potentially supply water for multiple uses in
mountainous areas at altitudes of approximately 400 meters to 1200 meters where fogs
are frequent. The proposed project does not only focus on implementing a water facility,
but also focused on distributing of water in line with the primary goal of making water
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accessible to every household in the barangay. An automated water machine will be

installed for the distribution to the consumers by inserting coins into the machine.
TECHNOLOGY CONSIDERATION
The facility relies on fog harvesting technology that collects fog water through the
mechanisms of impaction, direct interception, and Brownian diffusion. As fog passes
through the mesh, the mesh deposits fog particles, accumulating and eventually running
down the mesh into gutters leading to the tank. Fog collection is like an aerial spring; the
piping and delivery system is no different from a standard spring-fed gravity water
supply. The success of fog harvesting depends on the use of two-layered 35% Raschel
mesh as it captures fog particles and promotes the run-off of water down to the gutter
minimizing fog waste. Such type of mesh is both hydrophilic and hydrophobic which is
considered the best to use for attracting and shedding fog particles.
In the fog harvesting process, air humidity, area of the mesh, mesh efficiency,
wind speed, and the daily discharge of the automatic water machine will be the basis for
computing the estimated volume of water to be collected and the capacity of the
automatic water machine. Thus with these considerations and experimentation
conducted, the proponents calculated the service capacity of 2, 649, 024 gallons.
SERVICE MARKETPLACE
Initially, Barangay Tabon, a mountainous Barangay in the Municipality of
Dalaguete, Cebu is currently experiencing water crisis. As an upland Barangay which
never never had an access to any water source. Therefore, the proposed project aims to
provide a solution to the water scarcity; so that, the target market is the households of
Barangay Tabon, Dalaguete, Cebu initially. There are also mountainous areas in Cebu
and even other provinces who are experiencing the same crisis. This project will address
such dire need through the installation of one automatic water machine for each sitio of
the barangay.
MARKETING STRATEGY
The target market of the proposed Cebu Fog Water Cooperative is the
households of barangay Tabon being its captured market. Recommending this project to
be a cooperative ensures full cooperation among the households. In the long run, this
cooperative is intended to provide more services to the households by converting it to a
multi-purpose cooperative which will soon be engaged in marketing the members’
produce with a trucking service and providing a loan facility. In addition, the members
likewise will benefit in a form of patronage refund and interest on their share capital.
Therefore, advertisement need not be extensive and costly since all members are
expected to patronize the service offered.
The Cebu Fog Water Cooperative must distinguish itself from the competitors in
order to penetrate the market. The survey revealed that few of the households have
existing water pipe connections from the neighbouring town, Badian, which is expensive
yet the supply is not regular to cater their daily needs. Due to its distant locations, the
residents do not have an easy access, thus they still need to spend more time, effort and
cost in carrying the water. The fog harvesting facility will provide daily water need with
minimal manpower since the distribution is through an automated water machine. Thus,
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no intermediaries, transportation cost, and distribution cost are needed, resulting in

savings and service efficiency.
ORGANIZATION AND STAFFING
The proponents suggest forming a water service cooperative, initially. A
cooperative is a duly registered association of persons with a common bond of interest
who have voluntarily joined together to achieve a lawful, common, social or economic
ends. It is an advantageous form of business organization because it exists and
operates for the benefit of its patron members. Cebu Fog Water Cooperative (CFWC)
will hire one over-all manager, one cashier and five caretakers.
General Manager
He is responsible for overseeing the day-to-day activities of the business. He will
monitor the facility to ensure that it is functioning well and make sure that the caretakers
are doing their job well.
Cashier
He is responsible for collecting the cash from the automatic water machine. The
cash collected will be turnover to the treasurer daily. In addition, he is also tasks to
monitor the patronage record of the members based on the receipts of their transactions.
Caretaker
He is responsible for maintaining the good quality of the facility. He checks and
maintains the condition of the tubes, pipes, mesh, and automatic water machine to avoid
dysfunction of the services provided. Also, he is responsible to watch over and repair the
facility whenever there is damage or malfunctioning. Furthermore, he is to monitor
through the water meter the water flow efficiency and subsequently makes a report to
the manager.
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ORGANIZATIONAL CHART

GENERAL ASSEMBLY

Mediation and Education and Election Audit Ethics

Board of Directors
Conciliation Training Committee Committee Committee
Committee Committee

Treasurer Secretary

Manager

Cashier Caretakers
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Project Time Table

MONTH 1 2 3 4 5 6 7 8 9 10 11 12
ACTIVITY
WEEK 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Pre-feasib

General Project Planning by the

General Project Planning by the temporary officers
temporary officers

Sourcing of Funds

Securing and Surveying of Lands

contributed by the members for Fog
Collectors
general
GeneralAssembly
Assembly and Election
and of
Election
ofOfficers
Officers

Registration of Cooperative

Securing Permits and Licenses

Canvassing, Ordering and Delivery of

Tools, Equipments and Supplies

Construction of Office Building

Construction of the Facility & Test Run

Recruitment, Hiring, Orientation and

Training of Employees

Normal Business Operations

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Activities for Fog Collector Construction

MONTH 1 2 3 4
ACTIVITY
WEEK 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Purchase Materials
Site Preparations
Excavate Foundation for Post
Build Components (post drains,cables, etc.)
Raise Post
Install Mesh
Tension Mesh
Install and connect pipe networks to collector
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FINANCIAL PROJECTIONS
The proposed water facility requires an estimated project cost of ₱ 4,407,011.00. It
consists of pre-operating expenses amounting to ₱ 50,966.00; property, plant, and equipment
amounting to ₱ 4,264,293; and working capital of ₱ 91, 752.00.The financial projection of the
proposed study is shown in the table below. The figures shown are account for the projected
financial statements and financial analysis of the study for the next five years.

Revenue Projections
2,760,000.00

2,740,000.00

2,720,000.00

2,700,000.00

2,680,000.00

2,660,000.00

2,640,000.00
2019 2020 2021 2022 2023

Revenue Projection

Expense Projections
1,900,000.00
1,890,000.00
1,880,000.00
1,870,000.00
1,860,000.00
1,850,000.00
1,840,000.00
1,830,000.00
1,820,000.00
2019 2020 2021 2022 2023

Expenses Projection
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8

Net Surplus Projections

870,000.00
860,000.00
850,000.00
840,000.00
830,000.00
820,000.00
810,000.00
800,000.00
2019 2020 2021 2022 2023

Net Surplus

Total Assets
9,000,000.00
8,000,000.00
7,000,000.00
6,000,000.00
5,000,000.00
4,000,000.00
3,000,000.00
2,000,000.00
1,000,000.00
-
2019 2020 2021 2022 2023

Total Assets
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9

Total Liabilities
320,000.00

315,000.00

310,000.00

305,000.00

300,000.00

295,000.00
2019 2020 2021 2022 2023

Total Liabilities

Total Members' Equity

9,000,000.00
8,000,000.00
7,000,000.00
6,000,000.00
5,000,000.00
4,000,000.00
3,000,000.00
2,000,000.00
1,000,000.00
-
2019 2020 2021 2022 2023

Total Members' Equity

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FINANCIAL ANALYSIS
Net Profit Rate
Net Profit Ratio measures the capability of an entity to earn a profit in relation to its
sales. It is the percentage of net income to the net sales of the entity which indicates the share
of the entity of its net sales.

Net Profit Ratio

33%

32%

31%

30%

29%
2019 2020 2021 2022 2023

Revenue Projection

The net profit or net surplus indicates an average of 31 percent of the revenue.
However, the net surplus will be deducted by the statutory funds required, after which the
remaining amount will be distributed to the members, a minimum of 30 percent as a patronage
refund and the balance as an interest on share capital.
Return on Investment
Return on investment measures the capability of an entity to earn a profit in relation to
its assets. The relative value of net income over the average assets indicates the
management's capability to use its capital effectively.

Return on Investments
16%
14%
12%
10%
8%
6%
4%
2%
0%
2019 2020 2021 2022 2023

Return on Investments
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The decreasing return on investment indicates that the contributions are increasing
every year with a slight increase in income. The decreasing results indicate that the entity is not
able to utilize the annual increase in assets to gain more profit. Thus, the entity own idle assets
that must be invested; thereby, it must consider expansion to solve this matter and gain more
profit while helping people at the same time.
Discounted Payback Period
The payback period is the period for the net cash inflows from operations to compensate
with the initial investment financed by both the creditors and investors. It is a simple way to
evaluate the risk associated with a proposed project.

Discounted Payback Period

4,000,000.00
3,500,000.00
3,000,000.00
2,500,000.00
2,000,000.00
1,500,000.00
1,000,000.00
500,000.00
-
2019 2020 2021 2022 2023

Balance to be Recovered Present Value of Net Cash Inflows

Based on the present value of 1 at 12% of net cash inflows, the entity can compensate
its capitalization from members at approximately 3 years and 10 months. This is a good
indicator and a solid proof that the proposed project is feasible and profitable since it can pay
back the assets it used for less than five years. This means that after 3.80 years, the entity is
now ready to expand its geographical scope.
FINDINGS AND RECOMMENDATION
Based on the data presented in the previous chapters, the summary of findings are in
this section. This section contains brief descriptions of every aspect tackled.
Technical
 It involves the use of simple, flat, rectangular nets of Polypropylene Raschel
mesh supported by a post at both ends and installed perpendicular to the
direction of the wind

 Since part of the project is the construction of the fog collectors, the tools, and
materials needed are the following: Raschel mesh, metal poles, ropes, PVC
pipes, PVC tubes, electric drill, welding machine, ladder, shovel, and digging bar.
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 The service flow involves the harvesting of the fogs, storing of the water, and its
distribution. The computation of service capacity considers the factors such as
the quantity discharge of the automatic machine that will be installed in every
sitio and the number of hours operation of the service capacity.
Marketing

 The initial target market of the proposed project is the households at Barangay
Tabon, Dalaguete Cebu

 Since there is a high demand for water and no direct competitors in the said
barangay, the entity will incur lesser costs in the advertising since the consumers
are themselves members of the cooperative. Thereby, their patronage is
expected.

 The water distribution will be done through the automatic water machine installed
per sitio for an easy access to every household. Furthermore, the pricing of the
water is relatively very cheap compared to the cost of obtaining water from the
neighboring barangay for it is exclusive of its transportation cost.
Management

 The business organization for this proposed project is a water service

cooperative.

 It will hire a manager, one cashier, and five caretakers.

 The employees’ compensation is on a per day bases. They would work for eight
hours a day on weekdays except for caretakers who will also work during
weekends, but on a routinary basis.
Legal and Taxation

 Registration to Cooperative Development Authority, National Water Resource

Board, Bureau of Internal Revenue, and Application for Public Convenience.

 The entity shall secure Barangay Clearance and Mayor's Business Permit

 It will be exempted from national, city, provincial, municipal, and local taxes of
whatever name and nature as provided by the RA 9520 Sec. 60-61.
Financing

 It requires an estimated project cost of ₱ 4,407,011.00 to initially operate its

service

 Pre-operating expenses amounting to ₱ 50,966.00; property, plant, and

equipment amounting to ₱ 4,264,293.00; and working capital of ₱ 91, 752.00.00

 The cooperative must have an authorized capital stock of ₱ 5,000,000.00 with a

paid-up capital of ₱ 4,407,011.00 that comprises of ₱ 3,462,011.00 cash receipts
from subscription and ₱ 945,000.00 worth of land as a contribution from the
members.
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Financial

 The net surplus of the proposed project for the five years of operations is ₱
859,321.00, ₱ 830,124.92, ₱ 822,489.49, ₱ 833,227.55, and ₱ 825,135.63,
respectively.

 The return on investment for the five years are 0.15, 0.14, 0.12, 0.11, and 0.10,
respectively.

 The payback period of the proposed project is 3.8 years in which the entity can
recover the capital invested

 The break-even point in sales and in gallons is ₱ 1,869,507.00, ₱ 1,839,867.00,

₱ 1,858,966.00, ₱ 1,860,093.00, and ₱ 1,880,119.00 respectively.
Socio-Economic Desirability

 Will not only benefit the prospective implementors, but also the agricultural
industries, related industries, competitors and the government.

 Having a healthy competition encourages competitors to improve their products

and services to the public
Strength, Weaknesses, Opportunities, and Threats

 Three strengths of the proposed project such as no direct competitor at the target
market, not requiring large cost of advertisement, and the business is easy to
manage

 The proposed project's large-capitalization requirement and unavailability of

construction materials locally are its weaknesses

 The threats are the presence of El Niño, Department of Science and

Technology’s plan of implementing a new source of water, and frequent
occurrence of typhoons
CONCLUSIONS
In view of the findings presented in the previous chapter, the proposed installation of fog
harvesting technology as an alternative source of water at Barangay Tabon, Dalaguete, Cebu is
feasible and profitable. Moreover, the proponents concluded that the business is economically
and socially desirable.
RECOMMENDATIONS
Overall, the proponents recommend the implementation of the proposed project.
However, to enhance profitability and develop its sustainability, the researchers, further
recommend the following:
1. Since potable water is also a need of the people in the Barangay, it is highly
recommended to purify the water by chlorination and purifier in the supply plant. This
can be a preventive measure to avoid a widespread of water-borne diseases. Moreover,
the sale of potable water can increase the cooperative’s revenue in the end.
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2. It is highly recommended that the entity will expand to other upland barangays where
the occurrences of fogs are frequent such as Barangay Mantalongon in Dalaguete,
Barangay Busay in Cebu City and Barangay Magsaysay in Balamban. This can
contribute to having more money for further innovation of fog harvesting facility and
could help such barangays in providing an alternative source of water.
3. Due to time constraints, unavailability of materials and funding needed, the proponents
could not resolve some technical issues such as finding an alternative mesh that is
locally available or the occurrence of climate change. Therefore, there is a need for
further research and development for the perfection of the technical aspect of the
proposed project.
4. Since the proposed project gears towards translating early-stage technologies into
market-ready products, the implementers can avail the Department of Science and
Technology (DOST) Startup Research grant. The entity can use the fund to overcome
research and development roadblocks, strengthen intellectual property, the
establishment of initial market traction and refinement of the business model.