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Submitted To: Sir S.S.Patil business Faculty for International Pumba
and large-scale farmers. The plant trade is believed to generate a large volume of economic activity with an estimated value of US$ 110 year.000 ayurvedic healers practising in South Africa and using ayurvedic plants as their materia medica. There are reports of over 100. As supply diminishes and prices increase. including: · small. the potential opportunities for cultivating ayurvedic ayurvedic plant products have increased substantially. · current market players. The declining supply of ayurvedic plants and the associated products is likely to generate significant economic and welfare losses considering the large number of people who either consume or trade these plants. · conservation authorities. with reports of up to 80% of blacks in South Africa making use of traditional medicines. supply. A decline in the availability of a culturally important and easily accessible consumer good is likely to generate significant losses for the user community. Observations of the market indicate that most of the plants are harvested from wild populations and are not cultivated. with traders reporting acute shortages and price increases.INTRODUCTION Ayurvedic medicine is widely used in South Africa. · health authorities. intensive harvesting of wild stocks is a serious threat to biodiversity in the region with over 700 plant species traded in South Africa. potential and limitations within the ayurvedic plant market and current marketing practices for the purposes of providing information and support for a wide range of decision-makers. Furthermore. · communities and individuals which own or have access to ayurvedic plant . · policy-makers at all levels of government. The current demand for numerous popular plant species used for traditional medicines exceeds supply. Additional losses would also occur as potential income-generating opportunities associated with a growing local demand and international demand are not realised. The loss of incomeearning opportunities for people active in the plant trade will also represent a serious loss to those involved in the trade. The question arises as to why the higher prices have not stimulated the cultivation of high value ayurvedic plants in South Africa? The market study aims to describe the demand. · forestry authorities.
The province is consequently an area of active plant harvesting. the survey needed to provide information for a wide range of applications. The other provinces in South Africa also have an active trade in ayurvedic medicines. As this study is one of the first comprehensive market surveys on ayurvedic plants undertaken in southern Africa. the secrecy of trade attributed to the conflict between of plant traders and conservation authorities. and the past discrimination of ayurvedic medicine. largely due to the informal nature of the trade.resources. with Durban forming the hub of the regional plant trade. it aims to provide information that would be useful for a number of purposes. trade and consumption. As there is little known about the South African market. and specifically on Durban (a city with some 4 million people) (Figure 1.1). . and · various commercial interests. This study has had a spatial focus on the KwaZulu-Natal province in South Africa. KwaZulu-Natal has a large black population (of some 6 to 7 million black people) with an active trade in ayurvedic medicine.
. urban consumers indicated that ayurvedic medicine was more expensive than the subsidized western health services provided by the government. On the contrary. they would have to continue to use ayurvedic medicine. Consumers indicated that ayurvedic medicine was not an inferior good and demand is unlikely to decline should income levels and welfare increase in the future. The value of raw products consumed is considerable. around one-third of the value of the annual maize harvest in the province (one of the largest crops in the province). The demand for ayurvedic plants is likely to remain buoyant in the future. Consumers also indicated that western medicine was not an alternative to ayurvedic medicine and that irrespective of price. a massive demand is generated in terms of both number and mass of plants used. The black population in Durban indicated that they relied on both health care systems. essential for the welfare of black households.1: The spatial location of South Africa. the province of KwaZulu-Natal and Durban city Scope for Ayurvedic Plant formulation in South Africa The increasing demand along with the diverse and increasing growth of medical herbs in South Africa. As ayurvedic medicine is based almost entirely on the use of ayurvedic plants. This implies that ayurvedic medicine is a basic consumer good. yet they reported that they would be likely to either maintain or increase the frequency of use in the future. The demand for ayurvedic medicines The demand for ayurvedic medicines and services is considerable. relative to the demand for western health care services. the Ayurvedic practice there is gaining more and more popularity and is seen to be flourishing highly lately. with 60% of the health care services demanded coming from western health care systems and 40% of the services demanded coming from ayurvedic medicine.Figure 1. In KwaZulu-Natal. the value of the trade in raw products are worth US$ 13 million (R 60 million) a year. There are a wide range of ailments and needs which cannot be adequately addressed by western medicine. Households were estimated to be spending between 4% to 8% of their annual incomes on ayurvedic medicine services.
these areas could supply a range of products to the markets in the long term. This indicates that South African society has failed to openly discuss and develop a thorough understanding of the demand for ayurvedic medicine. woodlands and thickets on private property that have not been intensively harvested in the past. exist in such small quantities that management of existing stocks is unlikely to meet market demand. has resulted in a decline in the available plant stocks. Consequently. Some popular plants have become extinct outside of protected areas in the province. and the use of substitute plants. is likely to increase the demand for ayurvedic medicine products in the future. and/or some plants becoming unavailable in certain markets. However. the volumes of plant resources available and the harvesting strategies which may be applied need to be investigated. and the growing international demand for South African ayurvedic products. With effective management. there has been an increase in the application of destructive harvesting techniques. In addition. The plant stocks and the harvesting of these stocks are not managed and little cultivation takes place. with the size of the products decreasing. There are however options for sustaining the supply of plants to markets. showing that there has been considerable ignorance regarding the demand for ayurvedic medicine and the associated plants in South Africa. This market study has been pioneering in terms of developing a broad understanding of consumer demand. there has been little investment at a formal level in society to address any issues associated with consumer demand. In addition. there are limited forest areas available and consequently management of existing stocks is unlikely to supply the quantities demanded by the market. supply becoming increasingly irregular. including neighbouring provinces and other countries. A wide range of plant species is showing indications of unsustainable use. The scarcity of popular plants has led to their under-supply in the market. In terms of forest species. There are extensive areas of grasslands. The supply of popular plant products to the market is declining. The supply of ayurvedic medicines The ayurvedic medicine market is based on ayurvedic plants which are generally harvested from wild plant stocks throughout the province and within the broader region. the most popular plants. which aim at maximizing the harvest from the declining plant stocks in order to maintain income levels in the short term. imports into the province. with considerable increases in product prices. The combination of high demand and the lack of any significant resource management or production. .The AIDS pandemic in the region. irrespective of their habitat. distances to stocks increasing. The supply of ayurvedic plants is clearly not sustainable with the current harvesting strategies.
While the processing and packaging may not be in a sophisticated form. Street traders and gatherers identified 70 plant products which they considered important trade products (listed in Table 7. Plants can be used for their . Products are packaged using recycled waste materials.The cultivation. Fast-growing species could be supplied in sufficient quantities within a few years. the specificity of use of plants and the mixing of various plants for particular treatments is highly developed. Over 400 species of plants are regularly traded in the markets within KwaZulu-Natal [Cunningham 1988]. 1 The plants can be used individually or in sophisticated mixtures depending on the illness or condition to be treated. and are only prepared and prescribed by indigenous healers. Up to 11 different plant species may be used for these more sophisticated mixtures. and alternative products from these plants need to be investigated. Access to resources is variable. Some mixtures are relatively well-known recipes. then it is likely that it would loose its importance for a trader. A wide range of wild harvested medicinal plants are traded in the market. management and enrichment planting of high value plants is therefore an important strategy to meet consumer demand and to reduce the impacts of the market on biodiversity. Types of products Products are traded as parts of a single species or as mixtures of plant parts from many species. while the remaining products were not mixtures but were sold as individual species. and this is likely to determine the importance of plants to traders. The plant products/parts sold and their relative proportions traded in the street markets are illustrated in Table 7. such as 'ntelezi' and 'ubulawu'. The success of cultivation trials undertaken to date have shown good potential for this strategy.1). Three of the products were popular mixtures of different plant parts from at least 18 plant species. Should some plant be relatively scarce. the slow-growing popular trees are unlikely to supply the bark quantities demanded in the short term. and are prepared for self-medication while other mixtures are complex and secret.2. and with few controls regarding quality. However. Regular monitoring would provide a more accurate assessment of importance. The plants are traded either in the raw form or with limited processing. 18 The survey of perspectives regarding important trade items must be considered a snap-shot of the market as surveys were only carried out once for each of the two street markets in Durban.
Eriospermum cooperi. ugebeleweni 14 10 Sclerocarya birrea umganu bark G 4 15 10 Mixture of plants . Berkheya spp. and the vegetation type (biome) where the plants are found] (Grassland and woodlands = G. Dr imea sp.. root G/F 19 indungulu 10 9 Secamone gerrardii Iphophoma root F 5 11 10 Clivia miniata Umayime whole plant F 4 12 10 Dioscorea dregeana Isidakwa tuber F 4 13 10 Dioscorea sylvatica ingwevu.Adenia intelezi mix of many 4 gummifera. ubangalala roots F 3 22 11 Ornithogalum umababaza bulb F 3 longibracteutum .1: The plants most frequently demanded by consumers [ranked according to the number of traders who identified the plants as important. Forests = F) IMPORTANT SPECIES FOR TRADE PART NUMBER OF NUMBER RANK BOTANICAL NAME ZULU NAME BIOME USED TRADERS 1 1 Scilla natalensis Inguduza bulb G 47 2 2 Alepidea amatymbica Ikhathazo root G 40 3 2 Ocotea bullata Unukani bark F 40 4 3 Warburgia salutaris Isibhaha bark G/F 37 5 4 Eucomis autumnalis Umathunga bulb G 35 6 5 Curtisia dentate Umlahleni bark F 33 7 6 Haworthia limifolia Umathithibala whole plant G 29 8 7 Boweia volubilis Igibisila bulb G 28 9 8 Siphonochilus aethiopicus isiphephetho. A major pharmaceutical company anticipates trading ten species of plants. Urgineasp. Wholesalers sell a smaller range of plant products. Cephalaria natalensis. ufudu tuber G 4 intelezi.. Disocor ea spp. with frequent use of substitute products from exotic species or from synthetic products. Table 7. 16 11 Acacia xanthophloea umkhanyakude bark G 3 17 11 Adenia gummifera impindamshaye stem F 3 18 11 Burchelia bubaline umqonga root F 3 19 11 Callilepis laureola impila root G 3 20 11 Harpephyllum caffrum umgwenya bark F 3 21 11 Maytenus sp. Clivia spp..chemical or magical properties or for a combination of both properties. Foeniculum plant parts vulgare.. Kalanchoe spp..
Sideroxylon inerme Ochna natalitia Mixture of plants Acacia caffra Acridocarpus natalitius Albizia suluensis Albuca fastigiata Balanities maughamii Capparis brassii Cryptocarya myrtifolia Ekebergia capensis Gasteria croucheri Gladiolus sp. Helinus integrifolius Heteropyxis natalensis Hydnora Africana Hypericum aethiopicum Hypoxis latifolia Kniphofia spp. Helichrysum spp. Euclea divinorum Gunnera sp. Pulicaria scabra Sansevieria aethiopica Schotia brachypetala Stangeria eriopus Turbina oblongata Turraea obtusifolia Turraea floribunda Typha latifolia Urginea altissima Vernonia neocorymbosa umgadenkawu usehlulamanye ingwavuma uvelabahleke isiqunga isigqiki semikhovu umshekisane igobhe. umavumbuka unsukumbili ilabatheka icacane inwele umpumelelo uguqa. nhlanhlemhlophe intshungu uzekane isigobo isithaphuka intelezi umgxamu imfingo ubhoqo inswazi. Encephalartos spp. ugobo uzaneke uqhume umalala amasethole umadlozane ubulawu umtholo umabophe inyazangoma umaphiphintelezi umgobandlovu qwaningi umkhondweni mnyamathi impundu umlunge imphepho ubhubhubhu uhuze umafumbuka.23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 12 12 12 12 12 12 12 12 12 12 12 12 12 12 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 Albizia adianthifolia Cassine papillosa Cassine transvaalensis Celosia trigyna Dietes sp. Haemanthus albiflos Hippobromus pauciflorus Jasminum angular Mimusops caffra. Lycopodium clavatum Macaranga capensis Maesa lanceolata Momordica foetida Polygala hottentotta Protoasparagus sp. uswazi uvuma ibhuma umahlokolothi uhlunguhlungu bark bark bark whole plant root stem root root bulb root stem and leaves bark bark root root bark bulb bark stem bark bark whole plant bulb whole plant stem bark root whole plant bulb bulb whole plant bark roots and bark leaves and stem whole plant root whole plant root bark tuber tuber root root root bulb leaves and stem F F G G F F G G F F G F F G F F G G/F G/F F F F G G F G G G G G F F F G/F G G G G G F G F F G G G 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 .
The marketing of ayurvedic ayurvedic plant products Over 400 species of plants are marketed in large quantities within KwaZulu-Natal. the processing and development of products is extremely limited. chunks of the large as to be unmanageable. mm) Whole sections (40 cm . Whole sections (40 cm . While the mixing and prescription of plant products is sophisticated.10 cm long Thick bark originating from the main 10 cm -3 cm wide). The Bulbs 14% diameter).Table 7.2. Fresh Tubers 6% tuber.5 mm) damaged.5 cm in The larger the bulbs the better.10 Roots which are mature but which cm long). 13% plants The plants should be mature.2: Plant products/part sold Relative Plant parts Form in which the product Preferred characteristics/qualities proportion of traded is sold of the products the market Chunks (30 cm . slices or chopped (2 tubers are preferred. dried or bottled with various liquids.can be easily chopped. Freshness is Roots 27% 5 mm long).10 The fresher the leaves and stems Leaves and cm long). trunk of old trees. Age of the Bark 27% or ground to a powder (<1 harvested product is not critical. Whole Live for planting or dried The fresher the plants the better. or ground to a more important in roots. chopped (10 mm . There is little processing and value-added to . chopped. cm .5 mm) A range of plant parts usually Mixtures should be freshly prepared Mixtures of chopped into 1 cm to 3 cm using plants which have the ideal various pieces and sold fresh (moist characteristics indicated above. or ground to a and they should not be too woody. chopped (10 mm . 4% plant plant parts have not been species dried). sliced or chopped outer covering should not be (2 cm . Younger stems are better 10% stems 5 mm long). powder (<1 mm) Whole (40 cm .the better. powder (<1 mm) Whole (15 cm .10 cm in Tubers should be mature but not so diameter).
Consumers and traders in plant products could benefit considerably through the development of both the products and markets. either as selfmedication or through healers' prescriptions. The conditions in the markets are generally poor. There are several regulatory mechanisms (associated with first world standards for medicines and biodiversity priorities) in place but are not being implemented at present. The legislation is not currently applied to the ayurvedic medicine industry due to the informal nature of the trade. The simple plant products are marketed to consumers. The lack of storage facilities and trading infrastructure frequently results in the spoiling of raw material resulting in wastage and/or a decrease in product quality. but it is also critical for the welfare of all the people employed in the industry. Both the healers and consumers have indicated that they are concerned about the quality of the products purchased in these markets. Most of the value is added when medicines are prescribed by an ayurvedic healer. This legislation may limit investment in the formal cultivation of plants for the ayurvedic medicine industry. Importantly. In KwaZulu-Natal there are between 20 000 and 30 000 people who derive an income trading ayurvedic plants in some form. Most of the policy has been developed to limit the marketing of plants. there is a legislation in place which requires the registration of products traded as medicines. The entire industry is dominated by simple technology. These regulatory mechanisms could however threaten any development emerging from within the industry that may occur with . most of the people involved are black rural women. and by making use of available resources. There is little differentiation in product quality and packaging. Overall. the production of plants for local markets may have to be limited. The supply of quality plant products is not only critical for the welfare of millions of consumers. Unless the current legislation is changed.products. The ayurvedic plant industry therefore plays a critical role in empowering a large number of rural women. There is currently no certification of ayurvedic medicines traded. the marketing of ayurvedic plants is poorly developed. with most products sold in the raw form. very little policy has been developed to support the marketing of ayurvedic plants. The products are marketed within the residential areas dominated by black consumers or in transport nodes throughout urban and rural areas. who are the most marginalized group in South African society. The most sophisticated product form is a mixture of ground plants. with almost all the consumers indicating that they would prefer more modernized and hygienic conditions. Institutional support for the marketing of ayurvedic plants In terms of policy support. however.
. little investment is made at an industry level. On the other hand. the completion of this task is unlikely to be achieved in the short to medium term. with healers largely relying on their own or their mentors' experiences. especially the healers. with over 400 plant species traded. training and extension regarding ayurvedic plant markets. with product development being pursued by major pharmaceutical companies. Market information systems are poorly developed. while little or no investment is being directed to maintain or increase the benefits which the current market is already delivering to society. Market resources are wasted through inefficient coordination of trade activities. In terms of the healers. Furthermore. However. One research group in South Africa is presently developing a pharmacopoeia for ayurvedic medicine. With high levels of illiteracy and few business skills. This will help in the development of products for the market by understanding the quantities required for various treatments. The lack of sharing limits the development of the ayurvedic healing profession. This is particularly problematic given the already short supply of plants and the inability of the current market players to absorb costs. with most investment directed at seeking commercially useful chemicals within ayurvedic plants. As a result of a largely negative policy environment. At the market level. there has been little development due to competition and the under-developed capacity of most market players. There is acute competition within the markets and this limits the sharing of knowledge between market players. as they focus largely on healing issues. there has been insignificant education. their associated products. wealthy corporations are unlikely to be as negatively impacted by the existing regulations due to their ability to comply with the high standards stipulated by authorities. resulting in considerable inefficiency within the markets. However.limited resources and which may not meet the required standards of existing legislation. There are few efforts directed at developing the current markets. There is an imbalance in support for ayurvedic medicine. The lack of development within the ayurvedic medicine market in South Africa has also resulted in little information being developed that is useful to the market players. infrastructure and market players. there are numerous healers' organizations which serve the healers' interests. Some efforts have been directed at training market players in the cultivation of ayurvedic plants but it is insignificant relative to the market size. most research and development support from government and business has been directed at bio-prospecting and pharmacological investigations. There is no literature available at present which healers can use as a reference for administering ayurvedic medicine. the industry has been unable to develop.
availability of a wide range of cultivation. robust nature of ayurvedic plants which require few agricultural inputs. demand is relatively unresponsive to price changes. The opportunities associated with consumer demand in the ayurvedic medicine market include: • • • • • • • • • • • strong probability of a growing demand. there are few accepted alternatives. processing. consumers prefer more modem and hygienic packaging. availability of bark products from logging operations in other parts of South Africa. dynamic nature of ayurvedic medicine and adaptability. availability of plant supply from changing land-use. These are summarized below and form the basis for making recommendations for further action in the markets. a large demand for new agricultural opportunities on commercial farms. The opportunities on the supply side of the ayurvedic medicine market include: • • • • • • • • • • availability of scarce ayurvedic plants in remote locations. . dispensing locations and retail outlets. and marketing expertise in other sectors. and different standards required by different consumer groups. a culturally entrenched demand. willingness to pay high prices for more scarce items. availability of progressive farmers with access to resources. Opportunities and constraints in the ayurvedic plant markets There are a number of opportunities and constraints which have been identified in the market study. availability of ayurvedic plants on commercial farmlands. and redistributed farms. access to international examples of medicine production for traditional markets. ayurvedic medicine is a basic consumer good. consumers prefer better quality products.The combination of a negative policy environment and the limited capacity of market players to cooperate and promote their own development has resulted in an industry which is large but grossly underdeveloped. availability of ayurvedic plants on managed communal lands. subsistence farms. widespread demand for ayurvedic products in African and northern hemisphere countries.
local extinctions are resulting in a decline in the genetic variation within high value species. common property or open access rights regimes in large areas which frequently promote resource degradation. an established market system that could provide communication mechanisms for any proposed market developments. a large number of plant gatherers with appropriate knowledge that could promote the cultivation of plants for the market. • • • • • • • • • • • • . no government recognition of the opportunities offered by ayurvedic plants to promote development. competition which is likely to increase and reduce returns for the lower end of the market. bureaucratic controls concerning the formal trade of ayurvedic medicines. absence of a coherent strategy for transforming the industry into one which is sustainable. an almost total reliance on wild harvested plants for the trade. in quantity and quality.• • • • • • wide range of sites for product distribution. ability to supply specific species at times of the year when they are usually not available. business and government. ranging from the farm gate to urban processing factories. competition within the industry that undermines rather than develops the industry. and several organizations have experience in ayurvedic medicine markets and in the cultivation of ayurvedic plant species in farming and nursery systems. documentation and establishment of accepted guidelines for use and dosages of ayurvedic plants. which may limit product development to only highly sophisticated operations with massive financial resources. diminishing product development opportunities due to limited access to sufficient plant stocks. The constraints facing the ayurvedic plant market include: • • • • a policy environment which is negative towards the industry. vested interests within existing government departments to maintain the status quo. an industry with aggressive competition within and between market segments. resulting in the industry having limited lobbying ability. supply of plant products is irregular. declining plant populations which results in many high value species becoming increasingly inaccessible. government departments who may facilitate market development already face severe budget constraints within existing priorities. a narrow perspective of ayurvedic medicine in academia.
lack of information regarding financial feasibility discourages financing institutions from supplying credit. and research funds are directed at bioprospecting.• • • • • • • • • • • • forest resources are extremely limited and will provide few of the scarce species in the future. . generating large costs in the trade.a fluctuating supply of grassland and savannah species in the short term. distances between major markets and various plant sources are large. Potential future scenarios for the ayurvedic plant industry There are a number of scenarios which could develop in the South African ayurvedic plant markets. many high value species are slow-growing. there is little knowledge of the financial opportunities in cultivating and managing stocks of ayurvedic plant species.an increase in the number and diversity of market players. there are inefficient market information sharing systems in the industry.diverse cultivation potential of ayurvedic ayurvedic plants. depending on the relationship between a range of fixed and variable factors in the market. .an increase in the price of scarce plants. The . . determine how the market will change in the future. business skills are poorly developed in a number of the sectors. there are few skills in the sustainable use of ayurvedic plant resources. . literacy of a large number of market players is poor. there is little known of the condition of plant stocks on privately owned farms. with few resources focused on developing the existing industry. there are variable factors which will.majority of the current market players having limited business skills in the short term. there are few production initiatives in the province.a declining supply of forest species in the short term. .a negative policy environment in the short term. In contrast to the fixed factors. creating limitations for developing the industry. . and . to a large extent. The fixed factors include: -a large and growing local and international demand for ayurvedic plants.
Such a scenario.responses of government departments (Health. The study identified three potential scenarios which could develop depending on the actions of key role players in the markets. certification. Agriculture. and distribution would occur for the middle and upper end of the market. standards. with different prices suited the consumers' budgets.Industry driven intervention . while most of the current market players continue to compete for a decreasing share to a declining stock of popular plants. Numerous market players could develop a range of different quality products for a wide range of consumers. Consequently. . processing. Cultivation.No intervention .the continuation of the status quo . and distributed for the upper end of the market with a small number of large business interests benefiting. processed. Biodiversity and health care would be negatively impacted. Scenario 3 .is likely to offer large benefits to large and intermediate companies and to a limited number of current market players. The possible scenarios are as follows. provincial. and local political leaders to the ayurvedic medicine industry.quantities demanded for different levels of processing. and promote .collaboration between progressive current market players and skilled business interests . . The variable actions of these key players include: . Biodiversity and health care would be negatively impacted. A narrow range of species would be cultivated.this could see the development of a wide range of processed products from simple rural products to sophisticated industrial products. Trade and Industry.where there is limited investment in promoting the supply of popular plants to the current market players. and . but supply is likely to decline as the consumption of cheap products continues at the lower end of the market.collaboration between current market players. government and business interests .key variable factors are driven by the actions of the different market players and the associated authorities. Small-scale traders and gatherers are likely to continue to trade in wild plants. and packaging. Scenario 2 .responses of national. . is likely to promote the growth of the industry.Collaborative intervention . Scenario 1 .degree to which the current market players cooperate to develop a common vision and to lobby for government support. and Environment and Tourism) to the ayurvedic medicine industry. large commercial interests are likely to cultivate high value plants and trade processed products.response of formal business to the opportunities in the industry.
Owner will be contributing 24% which he will be bringing from India. FINANCIALS: How to raise the funds? Our company is a private limited company. from rural resource management and production through to corporate bioprospecting and marketing. Health care would also benefit.Basically. Detail about raising the Funds are listed below. . Furthermore. 1. Current investments by both government and big business are supporting the development of this scenario. At the same time. As the current consumers and current market players are largely from the least developed sector of South African society. The most likely scenario to develop without market interventions is number 2. Investment in resource management is also more likely in this scenario. consumer welfare. especially at the lower end of the market. The costs of this scenario will be borne largely by the current consumers who will lose access to basic consumer goods through price increases and scarcity. should be developed. The development of the ayurvedic medicine market in South Africa will promote economic growth. people's development. South Africa needs to focus on achieving the development of both the existing market players and corporate entrants. To maximize the benefits to the greatest number of beneficiaries. current legislation supports the development of the corporate sector by excluding the less developed market players from producing more commercialized ayurvedic plant products. The challenge facing the South African community is to capitalize on the market opportunities and to overcome the market constraints in the ayurvedic plant industry through achieving a greater balance in the distribution of development resources in public and private sector. we are private limited company so we don’t have right to raise fund from Initial Public Offer(IPO) in stock market. and biodiversity conservation. the opportunities for large-scale corporate involvement at the upper end of the market and in international markets. this will only be achieved if development takes place across the whole spectrum of the market. it is essential to initiate market interventions which promote the welfare of the current consumers and market players. However. 20% of funds will be contributed by the owner from India.development at a broad scale. where big business enters the market and leads market development to suit its own objectives. and market players will lose access to trade products. Planned Investment:.
This will give us a micro figure about the daily expenditure and sales. Explain to the employees per hour expenditures that we incur. and hence the necessity for time management. Similarly after sales of our goods or services. we may also divide the total amount of sales by the number of working days.we are also going to borrow 20% amount of total fund from bank as long term basis. This will give us concrete figure of the total amount that has been spent. 3. Hence. We may also take a risk and make long term agreements regarding the quality and quantity of materials that are being supplied to our manufacturing process. implies the usage of policies and internal rules that help you to reduce the cost of a particular management process. COST CONTROL:Cost Control Definition There is no exact rule or definition of cost control. cheap and assured supply of raw materials. Daily Updates: One of the best ways to start controlling costs it to have daily updates of production. and sales. Time Planning: Time is money! Well divide the amount of wages that will give out with the number of work hours per month. It will definitely help us to zero down on all possible cost problems that we incur. all possible long and short term expenditures. We will come up with new process and procedures to reduce costs. Long term loan:. By the term change. This uniformity will ensure a timely. I also mean that we will be upgrading and improving all possible business operations.We will be dividing all these expenditures. Inventory cost: We will try to carry only that much inventory will is necessary so it will help to reduce our inventory carrying cost Profits and Break Even Analysis 1st year: loss of 16500 USD . We pay the half yearly interest and annual principle payment.2. The term. Cost control methods target the reduction of cost and maintenance of quality and quantity of a particular production process or service generation. Uniformity: Cost control management is all about deriving the best outputs in a least cost. We will try to bring changes to business model according to our competitors actions and markets status. Interest rates: We will try to take loan at least possible rates from other banks and money lenders by negotiating from them. Review and Modify Business Model: The business model must be subject to small and big changes. by the number of working days.we have chosen a black person because government provides subsidies in tax if we have black person as a partner. It will help us in reducing interest cost.we will set up a highly efficient and specialized stores department which will oversee all purchases. Investors: We have five investors for our project who will be contributing 40% of the total fund raising and collaborator will be contributing 16 % of the funds who will be black person from southafrica. cost control. even the ones such cost of machinery or insurance.
2nd year: profit of 163000 USD 3rd year: profit of 449500 USD 4th year : profits of 711500 USD 5th year : profits of 1106750 USD We have total investment of 510000 USD and from above data it can be interpreted that we were at break even at the end of third financial year BREAK EVENANALYSIS INVESTME NT 1ST YEAR LOSS 2ND YEAR PROFIT 3RD YEAR PROFIT 510000 USD -16500 USD 163000 USD 449500 USD (WE ARE AT BREAK EVEN AT THE 86000 USD END OF THIRD YEAR) AS THERE ARE NO OTHER AYURVEDIC COMPANIES IN SOUTHAFRICA WE MADE HUGE PROFITS YEAR BY YEAR AND OUR SALES RAISED ALMOST BY 40 PERCENT EACH YEAR. .
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