CHAPTER 1

PROJECT SUMMARY

Name of the enterprise

JM CASSAVA PRODUCTION will be the enterprise name. JM comes from
the first letter of the proponents’ name which is Jayson and Melanie. The
proponents intended to choose this name which symbolizes fairness in the
business.

Location
The proposed site will be established at Purok Gemelina, Homelot,
Pangasinan, Pantukan, Compostela Valley Province. The area is accessible to
transportation facilities that are essential for the easy flow of all the transactions of
the business. Electrical power and water supply exists in the project site.
Project long Range Objectives
The proponents expected that after five or more years, the business will
become more productive, could generate more income and pursue more flour
processors in the entire Philippines upon making them one of the biggest
producers of good quality of cassava.

Highlights of the Project

History
This project was built-up due to its existing demand in the market as a
substitute food in times of rice shortage.

Nature of the Industry

Cassava is one of the most in demand product in the local market. Aside
from being a promising substitute as staple food, it can also divert into new
products like flour and kakanins. There will be more demand for this product
because it is not only for food consumption but it also used to cure some
diseases. It can also provide employment to individual who certainly need job.

Project Potential
The project has a great potential because of its many uses. It serves as
human food, as starch, and an animal ingredient in making feeds.

Investment cost
The proposed project will need the total amount of 980,285.814. This
amount will be used in purchasing raw materials, tools, equipments and office
supplies. It also includes Land rental, transportation cost, labor and other
expenses.

Mode of Financing
 The proponent will acquire loan from the Rural Bank of Montevista (RBM),
Pantukan Branch since it facilitates credit with an interest of 5%.

Major Assumption and Summary of Finding and Conclusion

1. Market Feasibility
Cassava production has an edge in terms of market to the high demand of
flour processor and other uses of this product. This product is a promising
substitute as a staple food in times of rice shortage. Aside from the fact that there
were only producer of the product since the flour processing industry are far from
the area of production.

2. Technical Feasibility
This project will follow the recommended agronomic management
practices in growing cassava. In this regard, all the necessary procedures and
management should be followed and applied. The production process involve
land preparation, preparation of planting materials, planting, crop protection,
weeding, application of fertilizer, harvesting and distribution.
In addition, proper care and maintenance of the farm area are needed in
order to attain higher yield. Proper amount of fertilizer and pesticides will be given
attention in order to prevent pest and diseases infestation.

3. Financial Feasibility
The total investment of the project will be 980,285.814 of which Php
600,000.00 will be loaned from the Rural Bank of Montevista (RBM), Pantukan
Branch with an interest of 5%. The remaining 380,285.814 will be the proponents’
investment. The collateral of this loan will be the land title of one of the
proponents.

4. Socio-Economic Feasibility
The project has a positive effect to the society as well as in the economy
as whole. It can provide financial opportunities to the neighbouring households.
5. Management Feasibility
Supervision and leadership are necessary to make the venture viable.
One of the proponents will assumed as the manager of the project. He will
conduct regular monitoring of activities in the farm and will keep tracking
behaviour of the project in its entire operation. He will receive an amount of
15,000.00 every month.
The labourer does the activities in the production process. The contractual
worker will only be hired during the preparation of the site and during harvesting
period. On the otherhand, the caretaker will serve as the regular worker in the
project.
 CHAPTER II
MARKET STUDY
Product Description
Cassava (Manihot utilissima) is locally known as “Balinghoy or Kamoteng-
kahoy”. It is a woody shrub, the root of cassava is long and tapered with a firm
homogeneous flesh encased in detachable rind about 1mm thick, rough and
brown on the outside. The flesh can be chalked-white or yellowish. Cassava root
are very rich in starch and contain significant amount of calcium (50mg/100g) ,
phosphorus (40mg/100g) and vitamin C (25mg/100g). It is cultivated as annual
crop in tropical region for its edible starchy tuberous roots as a major source of
carbohydrates. The bitter variety of Manihot is used to treat diarrhea, headache
and pain and also cooked and eaten. It is also use to treat irritable bowel
syndrome.
Indeed, cassava is the third largest source of carbohydrates for human
food consumption in the world.

Demand Analysis

Historical Values of the Demand of Cassava for the Past Ten Years

Year Demand %increase/decrease

2001 1,852,371.51 N/A
2002 1,815,917.88 -1.97
2003 1,784,489.5 -1.73
2004 1,876,015.44 5.13
2005 1,890,347.76 0.76
2006 2,004,668.88 6.05
2007 2,027,685.84 1.15
2008 2,047,035.36 0.95
2009 1,911,535.44 -6.62
2010 1,967,967.84 2.95

Supply Analysis
Historical Values of the Supply of Cassava for the Past Ten Years
Year Supply %increase/decrease

2001 1,652,035.88 mt N/A

2002 1,625,738.73 mt -1.59
2003 1,622,241.72 mt -0.22
2004 1,640,519.58 mt 1.13
2005 1,677,563.82 mt 2.26
2006 1,756,856.13 mt 4.73
2007 1,871,137.81 mt 6.50
2008 1,941,574.59 mt 3.76
 2009 2,043,719.41 mt 5.26
2010 2,101,454.16 mt 2.82
Demand-Supply Analysis
Year Demand Supply Gap
2001 1,852,371.51 1,652,035.88 200,335.63
2002 1,815,917.88 1,625,738.73 190,179.15
2003 1,784,489.5 1,622,241.72 162,247.78
2004 1,876,015.44 1,640,519.58 235,495.86
2005 1,890,347.76 1,677,563.82 212,783.94
2006 2,004,668.88 1,756,856.13 247,812.75
2007 2,027,685.84 1,871,137.81 156,548.03
2008 2,047,035.36 1,941,574.59 105,460.77
2009 1,911,535.44 2,043,719.41 -132,183.97
2010 1,967,967.84 2,101,454.16 -133,486.32

Price Analysis
The price will depend on the supply and demand of cassava. The higher
the demand, the lower the supply therefore the price is higher. The lower the
demand, the higher the supply therefore the price is lower.

Factors affecting the Market

Competition
Competition is one of the factors that will affect the market. If there will be
more competitors, the production will be affected.

Season
Season depends upon the supply and demand of cassava. The lower the
supply of cassava, the price will increase.

Marketing Programs

The Market
The product which is cassava will be sold directly to the local market and
to the ultimate consumer.

Proposed Price
The proposed price of cassava will be Php 7.00 per kilo. It is assumed to
be fixed from the first year until its fifth year of operation.

Product Management
Harvested cassava crop will be brought to the storage house for cleaning.
It will be placed in sacks and will be transported to the designated market outlets.
 Distribution System
The products are handled down directly to the buyer. No middleman
involve during the marketing process. The producer will be the one to deliver the
products. Payment will be done by cash or delivery basis.

PRODUCER

JULU SAN MIGUEL

DCORPORATION

Fig.1. Distribution Channel of Cassava Production

CHAPTER III
TECHNICAL FEASIBILITY
The Product
The product is cassava or locally known as “kamoteng-kahoy” or
balanghoy. It is a perennial shrub which sometimes reaches the size of all small
trees. Its stems vary in color from pale to dirty white or brown marked by
numerous node formed by scar left by fallen leaves. Pale to dark green leaves are
fan-shaped with5 to 9 lobes. Roots of cassava plant are few and swallow and
some become storage roots, these are clustered around the base of the plant and
extent about 60 cm all sides. It is for this root which contain from 15% sparely.
This is cultivated under favourable condition. A single root may weigh as 4 kilos.
The number of root per plant at harvest varies from 2 to 7 each averaging 27 cm
long from 4.5 to 7.4 cm in diameter.
Cassava is essential part of diet more than a half billion people. Cassava
roots are high in calories and leaves are good source of protein and vitamins A
and B subsistence farmer have long appreciated benefit of cultivating cassava.
The plant can grow in poor soil on marginal lands with minimal amount of fertilizer,
pesticides and water because the root can be harvested any time from 8 to 24
months after planting. They are important safeguard against unexpected food
shortage.
Product Process

1. Site selection
Cassava is a tropical and sub-tropical plant. It grows with more or less
evenly distributed rainfall through the year. This study will select an open field
area with clay loam soil. The selected area will not prone to water logging. This
cassava crops will be planted at rainy season.

2. Land Preparation
A total of herbicide round up will be applied at the rate of 4 to 5 hectare,
ten days before land preparation.
There is no clear rule as to how many plowing or harrowing, but it
depends on the kind of soil and the intensity of weed population. In any case,
plow the soil to a depth at least 16 cm to provide good soil conditions of the root
development and better water retention in the soil.

3. Preparation of planting Materials

In preparation of planting materials, this production will select only fresh,
mature and healthy stems. It is fresh when latex comes out within six seconds
after cutting. It is healthy when it is pest free and diameter of stem is not less than
1.5 cm and at least 8 months old.

4. Planting
The planting distance of cassava is 50 cm between hill and 75 cm
between rows with two seeds pieces/ hill and at a depth of 25 cm. Seed pieces
are laid out flat during the dry season, slanting during the rainy season.
Replanting maybe done 6-10 days after planting.

5. Crop Protection
The cassava is infested with fish scale. The population of the pest will
increase rapidly causing yield losses reaching as high as 20%. The most
immediate form of control will be the use of chemical pesticides. However in this
production, the treat of chemical pesticides to planting materials will be at
minimal amount because this may result to a dangerous side effect to a node.
The cutting stored for more than 5 days will not be used anymore because it is
already infested with pest.

6. Controlling of rodents
Clean the surrounding thoroughly and continue baiting with chronic
rodenticides to prevent the build up and increase of the population up to 7 days
before harvest.

7. Keeping weeds under control

Shallow cultivation should be done as soon as the weeds have
germinated, pass between the furrow a 60 cm wide wood or soike-tooth harrow
to control weeds. This cultivation may do two times during the first 30 days after
planting. Selective hand weeding in the furrows should also be done in the same
period to control further growth of the weeds.

8. Fertilizer Application
Apply fertilizer based on the soil analysis. First application will be at
planting and the second application will be 2 months after planting.

9. Harvesting
Cassava is highly perishable crops. It started to deteriorate as early as 1
to 3 days after harvest. This crop will be harvested at full maturity which will be 7
to 8 months after planting. It will not be harvested during heavy rain or when soil
is too wet. This is because roots will have high water content which will be
difficult to store. This may also result to low yield and poor eating quality. On the
other hand, leaving the roots long in the soil exposed them to pest.
 SITE SELECTION LAND PREPARATION

PREPARATION OF
PLANTING
PLANTING
MATERIALS

CROP PROTECTION CONTROLLING OF RODENTS

KEEPING WEEDS FERTILIZER APPLICATION

UNDER CONTROL

HARVESTING GRADING AND SORTING

Fig.2. Production Process

Project Area

The proposed area will be located at Purok Gemelina, Homelot,

Pangasinan, Pantukan, Compostela Valley Province. It is near along the highway.
The area is 1 hectare (10, 000) and it will be rented ₱18,000.00 per year.
Project Location

TO MATI TO TAGUM

THIS SITE

KNP

PLANT LAYOUT

50x70cm 50x70cm
 Raw Materials and Supplies

Table 1. Schedule of Purchased of Tools and Equipment

Description Unit Quantity Cost/Unit Total cost

Shovel Pcs 3 400.00 1,200.00
Knapsack Pcs 4 1,800.00 7,200.00
sprayer
Slashing bolo Pcs 3 2,500.00 750.00
Tumbling bolo pcs 4 500.00 2,000.00
Total ₱11,150.00

Table 2. Schedule of Purchased of Office Supplies

Items Unit Quantity Cost/Unit Total cost
Ledger Pcs. 1 25.00 25.00
Journal Pcs. 1 25.00 25.00
Record Book Pcs. 3 50.00 150.00
Yellow pad Pcs. 5 18.00 90.00
Pilot pen Pcs. 10 21.00 210.00
White ink Bottle 1 19.00 19.00
Pencil Pcs. 10 7.00 70.00
Ruler Pcs. 2 10.00 20.00
Paper clips box 1 13.00 13.00
Stapler Pcs. 2 20.00 40.00
Calculator Pcs. 2 150.00 300.00
Folders Pcs. 5 5.00 25.00
Envelope Pcs. 5 4.00 20.00
Total ₱1,007.00

Table 3. Bill of Materials on Farm Shed

Description Unit Quantity Price/Unit Total Cost
Material
Requirement
Post (coco bdft 48 12 576
lumber) 4x4x6
Girt 4x4x8 Bdft 10.66 12 127.92
4x4x12 Bdft 16 12 192

Top cord 2x3x8 bdft 12 12 144

Bottom cord bdft 16 12 192
2x3x12
Braces 2x3x12 bdft 4 12 48
Purlins 2x3x12 bdft 46 12 1,152
Lumber sticks bdft 45.38 12 544.56
 1x2x8
Horizontal bdft 48.01 12 576.12
studding 2x2x8
Vertical bdft 42.67 12 512.04
studding
G.I sheet Pcs. 12 260 3,120
gauge 31 (8ft)
G.I nails Kilo 1 80 80
Plain G.I sheet Kilo 2 280 560
3x8
Common nails Kilo 3 60 180
#4
#3 kilo 3 60 180
#2 kilo 3 60 180
Amakan 4x8 Pcs. 10 120 1,200
Hollow Blocks Pcs. 175 7 1,225
Cements Bags 10 205 2,050
Corrugated Pcs. 22 135 2,970
bars 8mm
Mixed sand Load 1 700 700
Labor cost 5,711.174
Total Cost ₱22,228.814

Table 4. Schedule of Purchase of materials and supplies for year 1

No. Of
Description Quantity Unit Cost Total cost
Application
Planting
materials
890 bundle 300/bundle 1 267,000
Cassava
cuttings
Herbicides
2 galloon 1,000/gal 2 4,000
Round-up

Pesticides
5 Pack 240/pack 1 1,200
Bavistin 50 DF

Fertilizer
Complete(14- 4 Bags 1,300/bag 1 5,200
14-14)
Organic 20 Bags 300/bag 1 6,000

Other materials
Big Basket 30 Pcs. 50/pc - 1,500
Weighing 1 Pc. 12,500/pc - 12,500
scale

Total Cost 297, 400

 Table 5. Schedule of Purchase of materials and supplies for year 2

Description Quantity Unit Cost No. Of Total

Application Cost
1. Pesticide
s 5 pack 240/pack 1 1,200
Bavistin
50 DF
2. Fertilizer
Complete 4 Bags 1,300/bag 1 5,200
(14-14-14) 6,000
Organic 4 bags 300/bag 1

Total Cost 12,400

Waste Management Disposal

A propose project will provide a 6x6 m compost pit. Segregation of
garbage should be recommended. Only the biodegradable will put on compost pit
while the non biodegradable will put in sacks.

Labor Requirements
Table 6
Direct Labor Labor Cycle Labor Cost Total cost
Required
1. Land
Preparation
Plowing Contractual 1 3,500/ha 3,500
Harrowing Contractual 2 2,500/ha 5,000
Furrowing Contractual 1 1,500/ha 1,500
Off-Barring 3MD w/ 2 300/day 1,800
carabao
Hilling-up 3MD w/ 1 300/day 900
carabao

2. Planting 6 MD 1 150/day 900

3. Harvesting 6 MD 1 150/day 900
4. Hauling 6 MD 1 150/day 900
5. Caretaker 4MD 150/day 216,000
6. Office 500
supplies
7. Furniture’s 2,300
8. 12,000
Transportation
cost
9. 1 person 180,000
Management (manager)
fee
Total Cost ₱426,000

Table 7. Schedule of Labor Requirement (Year 2-5)

Direct Labor Required Cycle Labor Cost Total Cost

1. Land preparation
Plowing contractual 1 3,500/ha 3,500
Harrowing contractual 2 2,500/ha 5,000
Furrowing contractual 1 1,500/ha 1,500
Off-baring 3 MD’s w/ 2 300/day 1,800
carabao
Hilling-up 3 MD’s w/ 1 300/day 900
carabao
2. Planting 6 MD’s 1 150/day 900
3. Harvesting 6 MD’s 1 150/day 900
4. Hauling 6 MD’s 1 150/day 900
5. Caretaker 4 MD’s 150/day 216,000
6. Office Supplies 500
7. Transportation 12,000
8. Management fee 15,000/month 180,000
Total Labor Cost ₱423,900
 Estimated Cost of Production on Its First Year in Operation
Particular
Fixed cost
Farm building 22,228.814
Furniture’s 2,300
Direct labor 246,000
Administrative Salary 180,000
Land Rental 18,000
Tools and equipment 11,150
Total Fixed cost 479,678.814
Variable cost
Office Supplies 1,007
Materials and supplies 297,400
Electricity 10,000
Repair and maintenance 10,000
Water supply 10,000

CHAPTER IV
FINANCIAL FEASIBILITY
A. Major Assumptions
1. Land rental will be fixed for five years at ₱18,000.00
2. Management fee will be fixed for five years at ₱180,000.00
3. Office supplies will be fixed for five years at ₱1,007.00
4. The area has a capacity of 26,666 hills in one hectare with spacing of
75cmx50cm.
5. Selling price of cassava root crop is ₱7.00 per kilo and it will be fixed for
five years of the operation.
6. Price of input requirement such as labor, supplies and materials will be
fixed for five years of operation.
7. There will be 159,996 kilos expected yield of cassava on the first year of
operation.
8. Tax is 10 percent of the net income.
9. The maturity of cassava will star on its 8th month during the first year of
operation.

JM CASSAVA PRODUCTION
Projected Cash Flow
(Year1 to Year5)
Cash flow Year1 Year2 Year3 Year4 Year5
from
operating
activity
Net Income 181,723.5 455,728.5 461,128.5 461,938.5 462,708
Depreciation - 445.76 445.76 445.76 445.76
Net cash 181,723.5 456,174.26 461,574.26 462,384.26 463,153.76
provided by
 operating
activities
Cash flow
from investing
activity
-Farm 22,228.914 -
building
Net cash 22,228.814
provided by
investing
activities
Cash from
financing
activities
-investment 380,285.814
Loan 600,000
Loan 120,000 120,000 120,000 120,000 120,000
repayment
Net cash
provided by 860,285.814
financing
activity
Net income 1,019,780.5 367,174.26 341,574.26 342,384.26 343,153.76
cash
Cash balance 0 1,019,780.5 1,335,954.76 1,697,529.02 2,039,913.28
beginning
Cash balance 1,019,780.5 1,355,954.76 1,697,529.02 2,039,913.28 2,383,067.04
end

JM CASSAVA PRODUCTION
Projected Income Statement
(Year1 to Year5)
Year1 Year2 Year3 Year4 Year5
Sales 1,119,972 1,119,972 1,119,972 1,119,972 1,119,972
Less: Operating
Expenses
Tools and 11,150
Equipment
Materials and 297,400 12,400 12,400 12,400 12,400
supplies
Direct labor 246,200 246,200 246,200 246,200 246,200
Land rental 18,000 18,000 18,000 18,000 18,000
Administrative 180,000 180,000 180,000 180,000 180,000
salary
Expenses
Interest Expense 150,000 144,000 138,000 137,000 136,000
Furniture’s 2,300 - - - -
Office supplies 1,007 1,007 1,007 1,007 1,007
Transportation 12,000 12,000 12,000 12,000 12,000
Total operating 918,057 613,607 607,607 606,707 605,852
cost
Net income before 201,915 506,365 512,365 513,265 514,120
tax
Less:10% income 20,191.5 50,636.5 51,236.5 51,326.5 51,412
 tax
Net income/loss 181,723.5 455,728.5 461,128.5 461,938.5 462,708

JM CASSAVA PRODUCTION
Projected Balance Sheet
(Year1 to Year5)
Year1 Year2 Year3 Year4 Year5

Current asset 1,019,780.5 1,355,954.76 1,697,529.02 2,039,913.28 2,383,067.04

Fixed asset

Farm building 22,228.814 22,228.814 22,228.814 22,228.814 22,228.814

Depreciation - 445.76 891.52 1,265.28 1,711.04
Total Fixed 22,228.814 21,783.054 21,337.294 20,963.534 20,517.774
Asset
Total asset 1,042,009.314 1,377,737.814 1,718,866.314 2,060,876.814 2,403,584.814
Liability and
owner’s equity
Liabilities

-Loan 600,000 480,000 360,000 240,000 120,000

Loan 120,000 120,000 120,000 120,000 120,000
Repayment
Total liability 480,000 360,000 240,000 120,000 0

Owner’s equity

JM’s capital 380,285.814 562,009.314 1,017,737.814 1,478,866.314 1,940,804.814

Add: Net 181,723.5 455,728.5 461,128.5 461,938.5 462,708

income
Total owner’s 562,009.314 1,017,737.814 1,478,866.314 1,940,804.814 2,403,584.814
equity
Total owner’s 1,042,009.314 1,377,737.814 1,718,866.314 2,060,876.814 2,403,584.814
equity and
liabilities

Financial Analysis

Average Rate of Return = Average net income

Average net investment

= 404,645.4
1,075,940.814

= 0.38
= 38%

Payback Period in Year = Future value

 (1+r) n

Year 1 = 1,019,780.5 = 894,544.30

(1.14)1
Year 2 = 1,355,945.76 = 1,043,363.16
(1.14)2
Year 3 = 1,697,529.02 = 1,145,783.74
(1.14)3
Year 4 = 2,039,913.28 = 1,207,792.42
(1.14)4
Year 5 = 2,383,067.04 = 1,237,670.27
(1.14)5

Break-even Volume Analysis = Total Cost

Selling price

Year 1 = 918,057 = 131.151kgs

7
Year 2 = 613,607 = 87,658.14kgs
7
Year 3 = 607,607 = 86,672.43kgs
7
Year 4 = 606,707 = 86,672.43
7
Year 5 = 605,852 = 86,550.29
7

The above shows the break-even volume analysis, which depicts the
volume to be produced that can cover all cost but without gain and loss. The
result shows the output is greater than the break even volume through the year
which indicates that the business can already earn a profit.

Break-even Selling Price = Total Cost x Selling price

Sales
Year 1 = 918,057 x 7 = 5.74
1,119,932
Year 2 = 613,607 x 7 = 3.84
1,119,972
Year 3 = 613,607 x 7 = 3.84
1,119,972
Year 4 = 607,607 x 7 = 3.80
1,119,972
Year 5 = 605,852 x 7= 3.79
1,119,972
Return on Owners Investment
 ROI = Net Income
Total Capital Investment
Year 1 = 181,723.5 = 0.19
980,285.814
Year 2 = 455,728.5 = 0.46
980,285.814
Year 3 = 461,128.5 = 0.47
980,285.814
Year 4 = 461,938.5 = 0.47
980,285.814
Year 5 = 462,708 = 0.47
980,285.814

CHAPTER V
SOCIO-ECONOMIC STUDY

Contribution to the Government

In the operation of the business, the government is expected to access the
business and compute the taxes. For this, 10% of the total net income will be
paid annually, environmental clearance from the DENR and DTI permit are
secured.

Contribution to the Household

The Cassava production can generate income not only on the part of the
business but also to those unemployed individuals who certainly need job. They
can be hired as laborer in this project. The supplies of raw materials will also be
benefit since the demand for their good will increase.

Contribution to the Environment

Cassava production has a positive effect to the society because it is a
beneficial firm.

CHAPTER VI
ORGANIZATION AND MANAGEMENT STUDY

Form or Ownership
The project consists of two owners. Since there are two owners then the
business will be operated as partnership.
Organizational Chart

MANAGER

LABORER
(CARETAKER AND
CONTRACTUAL)

The manager will carefully manage all the activities in the project. He will
serve as the initiator responsible for the improvement of the project. He will be in-
charge in the production and in the marketing aspect.

The laborers do the activities in the production process. The contractual

worker will only be hired during the preparation of the site in planting and during
harvesting period. The caretaker, on the other hand, will serve as the regular
worker in the project. They will be the one who will take care of the products and
in charge for the production so that the buyer will be satisfied of the product.

REFERRENCES
*BUREAU OF AGRICULTURAL STATISTICS (BAR)
*DEPARTMENT OF AGRICULTURE (DA)
*FOOD AND AGRICULTURAL ORGANIZATION