BUSINESS MANAGEMENT

SCBT33115

NAME: THINISHA A/P SATHIS KUMAR

ID: S17080578

SUBMISSION DATE: 05.06.2020

1.0 Executive summary

TS Paint company is a dynamic paint Producing Company; employing the state of the art
facilities for production and sale of high qualities Architectural paint and coatings for private
and industrial users. The commercial manufacture of paints is simply the mixing of paint
constituents in a quality-controlled ratio that meets standard and can be faithfully produced in
commercial quantities. Its constituents are Dispersion medium- water, Binder- resins,
pigment-colorants, fillers- calcium and kaolin, Antifungal agents, and Marble dust which are
the texture coats. TS Paint manufacture textured paint, interior paint, exterior paint, roof
paint, wood and metal paint, primer, sealer, undercoat, industrial paints, and other painting
tools such as paintbrush, rollers, spray paint and disinfectants.

Product

TS Paint is in the paint manufacturing industry to service a wide range of clients and of
course to make profits, which is why we will ensure we go all the way to give our clients and
potential clients options. TS Paint is made from vegetable roots such as Curran which is
Gaelic for carrot is a material made from nano-cellulose fibers of root vegetables. It can be
used for different applications such as paints and coatings. Its raw material base is waste
streams produced by the food industry. Because the discarded products such as carrots or
sugar beets would otherwise be thrown away, there is no direct competition with food crops
for scarce land. The manufacturing of Curran leads to a lower carbon footprint, as it uses
vegetable waste and less water, requires fewer chemicals, and does not emit toxic gases.
While the exact method of production is secret, nanofibres are extracted from the vegetables
and then combined with high-tech resins. The paste can be molded into different shapes.
Furthermore, TS Paint odor is from flowers and vegetable extraction. Once TS Paint is
applied the specific area will be a very nice odor and a pleasant smell.

Location

The head office and manufacturing plant of TS Paint is situated at C, 70 Padang Temusu,
Sungai Petani, Kedah. The factory has covered 1800 square meters of land. The whole land
area is divided into 3 sections which are the clerical office, manufacturing plant & storage
section. The advantages of choosing this location are all the facilities such as electricity
supply, water supply; disposal facility of wastage is good in this location. There are also
complementary industries, which can fulfill the need for spare parts or any other supportive
items. As it is a reserved industrial area, the advantages provided by the state government
can easily be taken.

Furniture & Office Equipment

Vehicles for transportation: TS Paint will be using ‘Trucks’ for transportation. TS Paint has
not bought any of the vehicles for transportation and depend on the local transportation
services. Besides, for the sizes of the truck such as small, medium, large per the requirement
as well as convenience. TS Paint does not own any of the vehicles for transportation. They
are using hired vehicles for the transportation of raw materials and finished products.

Raw materials

TS Paint is made from vegetable roots such as Curran which is Gaelic for carrot is a material
made from nano-cellulose fibers of root vegetables. It can be used for different applications
such as paints and coatings. Its raw material base is waste streams produced by the food
industry. Because the discarded products such as carrots or sugar beets would otherwise be
thrown away, there is no direct competition with food crops for scarce land. The
manufacturing of Curran leads to a lower carbon footprint, as it uses vegetable waste and less
water, requires fewer chemicals, and does not emit toxic gases. While the exact method of
production is secret, nanofibres are extracted from the vegetables and then combined with
high-tech resins. The paste can be molded into different shapes. Furthermore, TS Paint odor
is from flowers and vegetable extraction. Once TS Paint is applied the specific area will be a
very nice odor and a pleasant smell.

Process

i. Preassembly & Premix

ii. Dispersing the pigment
iii. Thinning the paste
iv. Quality Control
v. Blending
vi. Tinting
vii. Treating Wastages
1) Preassembly & Premix: The first step in the manufacturing process is preassembly and
premix. In this step, the liquid raw materials for example vegetable root of Curran, resins,
solvents, oils, alcohols, and/or water are "assembled" and mixed in containers to form a
viscous material to which pigments are added. At this stage, the particles are rather large
(250 pm) and not consistently mixed. The premix stage results in the formation of an
intermediate product which is referred to as the base or mill base dispersion. Then it is sent to
grinding operations.

2) Dispersing the pigment: This process occurs in three stages for example wetting, grinding,
and dispersion. The wetting process begins in the premix step when the pigment is charged to
the liquid vehicle. Grinding is the mechanical breakup and separation of the pigment particle
clusters into isolated primary particles. The goal of pigment grinding is to achieve fine,
uniformly-ground, and smooth, round pigment particles that are permanently separated from
other pigment particles.

3) Thinning the paste: Material let down, or thinning, is the process by which a completed
mill base dispersion is let down or reduced with solvent and binder to give a coating which is
designed to provide a durable and serviceable film that is easily applied to the surface. The
volume of the paint may increase significantly at this point depending on the final product
specifications.

4) Tinting (Shading): Tinting is the process of adjusting the color of completed mill based
dispersions. Normally, an operator will collect a sample of the paint or ink once it exits the
milling equipment. This sample will be taken to the laboratory and compared to the desired
color standard. Various combinations of pigments, solvents, resins, and pastes are added to
the material to meet the color requirements.

5) Blending (Mixing): Blending operations occur once the necessary additions have been
made to the completed mill base dispersion. Blending is the process of incorporating the
additions into the material to meet the desired product specifications.

6) Quality Control: a) Examining Viscosity: For examining the viscosity, the ford cup is fed
fully with the paint. Then, the paint flows from the hole of the ford cup. One experienced
observer notices the time limit of the flow of paint. If the paint flows very quickly then, the
paint is thin and it flows slowly than, the paint is thick. b) Examining Consistency: To test the
consistency, the examiner spreads the paint on the hegment gauge. Then, as per the
requirement of paint specifications, he detects the steadiness or consistency of the paint. Ford
cup Segment gauge.

7) Treating Wastages: A manufacturer has an in-house wastewater treatment facility that

treats all liquids generated on-site, even stormwater runoff. The facility is monitored 24 hours
a day, and the Environmental Protection Agency (EPA) does periodic records and systems
check of all paint facilities. The liquid portion of the waste is treated on-site to the standards
of the local publicly owned wastewater treatment facility; it can be used to make low-quality
paint.  Waste solvents can be recovered and used as fuels for other industries. A clean paint
container can be reused or sent to the local landfill.
2.0 BUSINESS CONCEPT

Objectives for TS Paint Company are:

 In 3-5yrs time, TS Paints will become a household name in the Malaysian coating
industry and readily chosen over competitors wherever builders think of quality
coating at right pricing, artistic coating innovations, customer/environmentally
friendly operations. We would achieve all this by adopting effective and well-defined
growth strategies. Moreover, Superb market positioning policy and efficient
marketing and distribution strategy. Besides, Great quality controlled production, and
the best customer, employee, distributor, supplier motivational incentive programs in
the industry.
 To generate reasonable turnover with manufacturing and sale capacity of over 7
million liters of paints annually. This will enable us to become sustainable, create
more jobs, and expand our operations. We achieve this by selling to diverse markets,
ensuring customers' loyalty, and optimal use of our facilities.
 Customer satisfaction. We shall go the extra mile to ensure that all our customers are
happy. We intend to do this by taking the time to understand their needs and assisting
them to make a better decision. Effective listening, empathy, and rapt attention to
customers shall be our watchword.

Vision

To establish a leading indigenous paint industry in Malaysia that will be environmentally

friendly and compete favorably with other leading paint industries in the world through
techno-managerial excellence.

Mission

Bringing technology to the surface by surpassing the needs of our customers through the
production of quality paint products and provision of services unrivaled in the paint industry.
Key to success

Innovation is where TS company will develop innovative ways to produce and sell and will
be ahead in technology, quality, design, and packaging.

High/effective distributor base- TS Paint company products will have a wide geographical
spread through effective distributors and will be able to convey their vision and mission with
a passion to their distributors.

Customers- one must invest in developing a strong brand name and strategies to induce
strong brand loyalty.

High production capacity- TS Paint Company will have a commercially feasible production
capacity. Being bigger means better access to materials, credit, and producing at lower costs
due to economy of scale.

Skilled human resources- TS Paint Company will hire qualified personnel for crucial
positions and also have a good employee development plan.

Market feasibility

The Indian paint industry is a Rs 49 billion sector. GDP growth is higher, the paint sector will
benefit and vice versa. Highly price sensitive & cyclical. Demand arises in Festive Season.
Change in demand patterns over the years.
3.0 MARKET ANALYSIS

Market Segmentation

TS Paint will focus on two markets within the industry, the residential segment including
apartment buildings and the commercial segment which includes buildings used for
professional purposes. The company can handle any size building that needs its services. It is
the goal of the company to eventually have approximately one-third of all business coming
from the commercial segment since this generates the greatest cash flow. Furthermore, this
segment has the lowest percentage of variable costs. Initially, the company will focus on the
two segments in just the Kedah area. However, by the end of the three-year projections, the
company expects to be serving entire Malaysia.

Target Market Segment Strategy

Each of the two market segments has differing needs and trends. The following sections go
into detail about how the company will fact them.
Targeted customers

Our market can be segmented based on psychographics:

Economy homeowners/renovators- these are homeowners/builders of low budget buildings.

Their buildings are normally residential houses in mass government-assisted housing,
sparsely developed areas, or rural settings.

Middle-class homeowners/renovators- this group have middle-class income and building

budgets. Their buildings are mostly commercial or residential houses found in city centers
and newly developing urban areas. This segment is easily the most important group targeted
by most paint companies.

Luxury homeowners/renovators- these are homeowners/builders with high means and

building budgets. These are mostly high rise commercial buildings, hotels, mansions, and
detached or semi-detached buildings that can be found in city centers and luxury estates.

SWOT analysis

Strength

The industry shall have a staff strength of twenty (10) with a production capacity of
300drums (one drum = 20 liters) a day for aStart.I t is an internally controlled factor. It
enhances the performance of the company. Some of the strengths are, It has a strong brand
name and positive reputation in the minds of customers so far them it's a great strength of the
company. It provides a wide range of colors (52 two-tone colorways). All products are
uniquely water-based.

Weakness

TS Paint has a zero distributor base. Will set aside 1-3 months before factory production
commences (pre-launch period) to marketing effort dedicated to distributor acquisition. These
efforts will include adverts on national magazines, online adverts, and face to face marketing
by 3 company trained marketers, headed by myself. The weakness of the industry will result
from the epileptic power supply, short supply, or scarcity of fuel needed by the industry.
Unfavorable government economic policies and programs like heavy taxation or multiple
taxations.

Opportunities
The opportunity for the industry lies in its feasibility and viability. Since almost everybody in
Malaysia is embracing the culture of clean and green, decoration and beautification, and with
the company's environmentally friendly philosophy, entire Malaysia is the market for the
products. The privatization policy of the federal and state governments has created a
favorable climate for private sector investment. Another opportunity being that the World
Bank assisted rural electrification and water schemes has created favorable environments that
cottage industries can utilize to advantage.

Threats

The emergence of substitute products- initially paints controlled a 100% share in the coating
industry but now haste contends with substitutes like epoxy premixes, stone veneer, metal
boards, tiles, and sandblasting. Global warming, this may result from some environmental
outbreaks caused by climatic change nowadays. This may affect the color pigments and other
chemicals used in paint production. This is an anticipated future trend; every precautionary
measure shall be taken to remedy the situation

Main Competitors

The main competitors for TS Paint include Deluxe, Nippon Paint, and Asian Paints.

Each of these competitors can achieve a high degree of profitability through marketing, and
volume. They pose a significant threat to TS Paint because of their deep pockets and their
desire to acquire other painting competitors. TS Paint will compete with these rivals through
the use of greater marketing and better service.

Promotion Strategy

The company will be engaging in an aggressive marketing program that will include mailers,
phone solicitation, TV, radio, billboards, and other platforms to generate service awareness
and value proposition. However, as stated elsewhere, the company's immediate goal will be
to generate enough profit to pay for such expenses. The marketing plan will go into effect
starting in year three. Before this, the company will use more modest marketing tools such as
the mailer, promotion of word-of-mouth marketing, and advertisements.
Pricing Strategy

The company will price each project based on time, material, and a flat 5-10% profit margin,
depending on the segment. In the first year or two, depending on sales, the company will
focus more on getting the contracts than on maintaining its pricing structure. Therefore, the
profit margin may be a little low for the first year or two.
4.0 MANAGEMENT TEAM

Chief Executive
Officer

Financial GM Operations Business

Controller Manager

Supplier Side Business logistic Regional Marketing

Manager Manager manager manager

Purchase Planning Regional Logistics

Imports
Manager manager Manager

Management Team

TS Paint will have the Financial Controller, then people who work on GM Operations which
id divided into supplier side manager and the business logistic manager. The supplier side
manager will be divided to purchase manager and imports. Also, the Business logistic
manager is divided into planning manager and regional logistics manager. Finally, the
Business Manager and will be divided into Regional managers and marketing managers.
Moreover, a full-time manager will be hired to oversee the daily operations at TS Paint. The
candidate whose name is withheld due to his current employment commitment has had three
years of managerial experience in the definite industry in Penang. This person's
responsibilities will include managing the staff, ordering inventory, dealing with suppliers,
developing a marketing strategy, and perform other daily managerial duties. We believe that
our candidate has the right experience for this role. A profit-sharing arrangement for the
manager may be considered based on the first-year operational results.
5.0 MARKETING PLAN

Advertisement

Marketing plan for online advertisement. This is usually the easiest and most neglected
means. We will have an aesthetically designed website that fully describes our products and
benefits. We will also have our presence in social media like Facebook and Twitter for easy
interaction with our customers. Moreover, Magazine adverts- we will make few magazine
adverts, mostly at the pre-launch of our products. This means the advert is effective but might
be above our advert budget at the beginning.

The site to site marketing

This is also a major way the industry markets its products. Trained marketers working for our
distributors market building sites in different cities without catalogs, color chart, paint
sample, and other promotional materials

Strategic alliances

We will develop a multitude of commission agents who earns substantial commissions on

sales made as a result of their introduction. We prefer businesses or individuals relevant to
building or seen as an authority on the product type. Our chief target will be painters and
contractors.

Showrooms

We will have key distributors in every city set up a showroom/studio space that will be
tastefully furnished.

Promotion Strategy

The company will be engaging in an aggressive marketing program that will include mailers,
phone solicitation, TV, radio, billboards, and other platforms to generate service awareness
and value proposition. However, as stated elsewhere, the company's immediate goal will be
to generate enough profit to pay for such expenses. The marketing plan will go into effect
starting in year three. Before this, the company will use more modest marketing tools such as
the mailer, promotion of word-of-mouth marketing, and advertisements.
Pricing Strategy

The company will price each project based on time, material, and a flat 5-10% profit margin,
depending on the segment. In the first year or two, depending on sales, the company will
focus more on getting the contracts than on maintaining its pricing structure. Therefore, the
profit margin may be a little low for the first year or two.
 6.0 FINANCIAL PLAN

Break-even Analysis

The Break-even Analysis gives the reader an idea of how many projects TS Paint must bid
for, prep, paint, and complete each month to cover costs. Because TS Paint is providing
customized service with many projects having unique requirements, the estimates of revenue
and cost are somewhat arbitrary. Furthermore, the company experiences a high degree of
seasonality in its contracts which may result in several unprofitable months during the late
fall, winter, and early spring periods.

Fixed costs are based on running costs estimated by the officers of the company and include
payroll for all employees. Variable costs are based on a 26% estimate of the average sales per
unit. The average revenue estimate is based on the consensus of the principal officers who
have had many years of experience in the industry and on the realistic assumption of the
types of contracts the company will get in the beginning and the requirements needed to
complete such projects.

BREAK-EVEN ANALYSIS
Monthly Revenue Break-even $17,755
Assumptions:
Average Percent Variable Cost 26%
Estimated Monthly Fixed Cost $13,126

Projected Profit and Loss

The following table and chart show the projected Profit and Loss for TS Paint.
PRO FORMA PROFIT AND LOSS
YEAR 1 YEAR 2 YEAR 3
Sales $336,500 $480,505 $629,048
Direct Cost of Sales $87,730 $131,703 $155,755
Production Payroll $84,075 $111,000 $172,000
Other Production Expenses $0 $0 $0

TOTAL COST OF SALES $171,805 $242,703 $327,755

Gross Margin $164,695 $237,803 $301,293
Gross Margin % 48.94% 49.49% 47.90%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $30,000 $30,000 $30,000
Advertising/Promotion $3,600 $5,000 $10,000
Travel $2,400 $3,500 $4,000
Miscellaneous $2,400 $3,000 $3,000

TOTAL SALES AND MARKETING $38,400 $41,500 $47,000

EXPENSES
Sales and Marketing % 11.41% 8.64% 7.47%
General and Administrative Expenses
General and Administrative Payroll $60,000 $78,000 $96,000
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $1,200 $1,200 $1,200
Leased Equipment $0 $0 $0
Utilities $1,800 $1,800 $1,800
Insurance $3,600 $3,600 $3,600
Rent $24,000 $24,000 $24,000
Payroll Taxes $26,111 $32,850 $44,700
Other General and Administrative Expenses $0 $0 $0

TOTAL GENERAL AND $116,711 $141,450 $171,300

ADMINISTRATIVE EXPENSES
General and Administrative % 34.68% 29.44% 27.23%
Other Expenses:
Other Payroll $0 $0 $0
Consultants $0 $0 $0
Bookkeeper and acountant $2,400 $2,500 $2,750
TOTAL OTHER EXPENSES $2,400 $2,500 $2,750
Other % 0.71% 0.52% 0.44%
Total Operating Expenses $157,511 $185,450 $221,050
Profit Before Interest and Taxes $7,184 $52,353 $80,243
EBITDA $8,384 $53,553 $81,443
Interest Expense $574 $350 $117
Taxes Incurred $1,983 $15,601 $24,038
Net Profit $4,627 $36,402 $56,088
Net Profit/Sales 1.38% 7.58% 8.92%

Projected Cash Flow

The following table and chart are the Cash Flow for TS Paint.
PRO FORMA CASH FLOW
YEAR 1 YEAR 2 YEAR 3
Cash Received
Cash from Operations
Cash Sales $168,250 $240,253 $314,524
Cash from Receivables $163,833 $238,362 $312,574

7.0 OPERATIONS AND MANAGEMENT

Company Locations and Facilities

TS Paint will be located 5km from the center of the town which is near the industrial area.
This location is a building that I purchase for this company. It is not very far from my house
where I can monitor the company most of the time. I do keep all the records related to the
business location for tax purposes. Before I chose this location I make sure that it meets my
basic requirements, such as including a place to wash out your brushes, test, and mix colors
and is large enough to store your equipment. This location is strategic enough for all the
targeted customers to find the company.

Equipment

The equipment needed are regenerators for the solvent used with the paint, paint mixing
room, penetrate inspection, preparation area, disperser on the shaft, filtering pumping trans
filling press, pumps and filters, blending mixer, and stationary disperser.

Future Plans

TS Paint primarily plans to consolidate its dominant position in India by launching new
products in line with the market developments in both decorative paints as well as industrial
coating segments. As far as product innovation is concerned, it is looking at water-based
paints. The company aims to be in the list of top five decorative paints company in the world.
With this aim, the company is constantly looking for both organic as well as inorganic growth
opportunities in existing and new markets. The rural sector also needs to be penetrated more
with products suiting their needs. They may need to reposition certain brands in the rural
market to achieve maximum impact. The company is focusing on further improving the
operations of all of its subsidiaries in India and abroad and has already launched E-Strides, an
ERP initiative through which all the overseas ventures are being covered for sharing of global
knowledge, best practices, and better control on operations. Introducing water-based Paints,
broadening of distribution network, adding more choices for shades and effects, enhancing
quality is some broad aspects Paint working on. Demand will grow proportionally with the
growth in real estate and industrial growth.