2.

0 BUSINESS IDEA
Palmo is the vegetable oil brand which is produced from high quality palm fruits imported from
Malaysia.
Palmo is an option for the edible consumers of Bangladesh and it is also an innovative value
added product of palm fruits. The edible oil industry of Bangladesh has encountered problem due
to huge shortage of supply.
Also the price and the quality of the edible oil are not reasonable enough. Palmo identifies these
top problems as opportunity and combines solutions into one direction which is producing edible
oil from palm fruits to introduce vegetable oil in Bangladesh market as an offering.

2.1 Product offerings

Palmo original— Original vegetable oil.

Palmo markets its products in 4 bottle sizes: 500ml, 1 Liter, 3 Liters and 5 Liters (see Appendix
A3)

2.2 Features and unique selling proposition

 Palmo palm oil is world’s new edible oil innovation.

 Palmo palm oil is commercially and technically viable edible oil option for Bangladesh
which is best taste comparing to Soyabean. (see Appendix A4)
 Cholesterol and lactose free oil which is helpful for lactose intolerant people and also free
from allergy.
 No artificial sweetener, color and flavor and no animal ingredients, preservative used in
Palmo.
 Palmo is vegan friendly and Non-GMO (Genetically Modified Organism) product. (see
Appendix
A2)

2.3 Business model:

Palmo’s business model is entirely production or manufacturing-based. Palmo’s production

process transforms and adds value to the quality palm fruits and produces edible oil.
Palmo will:
 Produce oil in its own operational plant using eco-friendly production process.
 Sell oil in 4 bottle sizes in the local market.
3 .0 GOALS AND OBJECTIVES

3.1 Vision statement:

Palmo’s vision is to make a safe oil consumption platform to create a healthy nation.

3.2 Mission statement:

Palmo’s mission is to be the most successful edible oil producing company in the Bangladesh at
delivering the best customer experience in markets we serve. In doing so, Palmo will meet
customer expectation of highest quality; leading technology; competitive pricing; individual and
company accountability; best-in-class service and support; flexible customization capability;
superior corporate citizenship; financial stability. We seek to produce healthy financial rewards
for investors as we provide opportunities for growth and enrichment to our employees.

3.3 Short-term goals:

 To offer quality products at a competitively lower price to capture market share.
 To create a demand for edible oil as a best taste option.
 To persuade the target customers regarding the benefits of palm oil that will bring
familiarity among customers.

3.4 Long-term goals:

 To expand its operation beyond Dhaka in the year 2015 and further goes for export.
 To set up new industrial unit in the west region of Bangladesh by the year 2018.
 To ensure sustainable development of the nation by creating newer utility of quality palm
fruits.

3.5 Objectives:
 To attain 20% growth rate by the year 2014.
 To attain net profit margin of 25% in year 2017.
 To achieve BDT 20,000,000 free cash flow by the year 2015 to setup another operational
plant by the year 2018.
 To utilize 1200 tonnes of palm fruits by the year 2018.
 To repay loans by the year 2020 and lever up the firm with 25% debt by the year 2025.

4 .0 MARKET POTENTIAL
As there is 49% gap between the demand and supply of edible oil in Bangladesh this sector
needs more supply of edible oil. The total demand of edible oil is 16,570,000 tonnes (per head
1120 ml) and supply is 13,326,000 tonnes including the imported edible oil. Whereas the present
and projected scenario of Dhaka Metropolitan City estimated by Palmo is:

2011 2012 2013 2014

Milk Demand (tonnes) 1302,728 1307,572 1312,493 1317,493
Milk Supply (tonnes) 1148,337 1150,710 1153,122 1155,572
Demand-Supply Gap (tonnes) 154,391 156,862 159,371 161,921
4.1 Palm oil emergence factors: Palm oil—
 can be introduced to fulfill the demand-supply gap
 is more affordable for greater range of consumers
 can also serve the heart, diabetics and allergic patients which is big portion in the demand
but vulnerable soya bean oil
 with different flavors is cheap and better quality than available flavored milk

4.2 Growth prospect:

 The edible oil market growth rate is 20% according to industry analysis.
 We are happy that private companies are coming up with big plans in this sector. There is
still a huge scope for growth for every player as together we are only catering to one-fifth
of the market.
 Edible oil industry is going to be a thrust sector.
 The government is encouraging agro-processed business. According to FAO all over the
world value added oil products’ consumption is increasing.

5.0 COMPETITOR ANALYSIS

Palmo offers edible oil in Bangladesh market in first phase. The domestic market of edible oil is
less competitive but the firm faces huge competition from the existing edible oil brands which
are offering the substitute product.
 Rupchanda is the largest edible oil brand of Bangladesh. The daily demand of oil is 37.5
million and the company can meet only 20% of it. So it grabs about 40% of total supply.
 Teer is the second largest edible oil plant in Bangladesh. The market share of Teer had
increased to 35% from 20%.
 Fresh is the third largest edible oil producer in Bangladesh has a daily processing
capacity of 1 lakh litres of oil although it only processes 40,000 litres daily.

5.1 Competitive forces analysis:

Porter’s five forces analysis has been conducted to evaluate competitive edge of Palmo from its
existing and potential competitors (see Appendix A12). The analysis shows:
 Bargaining power of suppliers (palm fruits and other ingredients) is low.
 Bargaining power of buyers is high because the consumers get several options.
 Threat of new entrants domestically is high as the market is quite lucrative and oil
demand– supply gap is huge.
 Threat of substitute although very high.
 The intra-industry rivalry is domestically low because the demand is quite high than the
supply.
5.2 Assessment:

Among the competitors Rupchanda is the biggest by holding 20% of demand so it grabs almost
40% of total supply. Teer and Fresh are holding sizeable portion of the market. Palmo has
competitive edge in price and taste. It gets the first mover advantage over all potential edible oil
brands. Besides, competitive analysis reveals the market is lucrative in all terms of forces that
indicate opportunity, profitability and sustainability. The competition among competitors is fair
because all operate to make Bangladesh edible oil industry a self sufficient one which is still a
gigantic task.