PRODUCTION FEASIBILITY OF TARO STARCH:

INPUTS FOR MANUFACTURING PLANNING AND DESIGN

_________________________________

A Project Feasibility Study

Presented to the Faculty

of the College of Engineering

Eastern Visayas State University

Tacloban City

_________________________________

in Partial Fulfilment

of the Requirements for the Degree

Bachelor of Science in Industrial Engineering

_________________________________

Authors

DENISE JADE O. GABISAN

MARK KEN C. TORLAO

PATRICK JOSEPH A. SUMEGUIN

Adviser
ENGR. FRANCIS ADRIAN P. POLIDO

January 2023
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Chapter I
INTRODUCTION

Starch is a carbohydrate made up of several glucose molecules linked together by

glycosidic linkages. All green plants manufacture this polysaccharide as an energy storage.

It is the most frequent carbohydrate in the human diet, and it is abundant in basic foods.

Potatoes, corn, rice, and cassava are common examples. It is either utilized as it is harvested

from the plant, known as "native starch," or it undergoes one or more changes to achieve

certain qualities, known as "modified starch." Pure starch is a white powder with no taste

or odor that is insoluble in cold water or alcohol. It is made up of two kinds of molecules:

linear and helical amylose and branching amylopectin. Starch includes 20 to 25% amylose

and 75 to 80% amylopectin, depending on the plant.

Starch has clearly evolved from its original position as a food to that of an essential

medication. Starch is widely used in medicine because of its adhesive, thickening, gelling,

swelling, and film-forming capabilities, as well as its easy availability, low cost, and

regulated quality. To believe that starch is still useful, starch has shown to be a "friend" of

the formulator in such a way that it may be used in the construction of diverse drug delivery

systems with the ability to accomplish the formulator's desire for targeted or shielded

distribution of bioactive chemicals. Cornstarch, wheat starch, and potato starch are well-

known and dependable excipients that are employed as insoluble diluents in the

formulation of tablets and capsules, powders for sachets, while maintaining a disintegration

function.

In general, starch is extracted from potatoes, corn, rice, and cassava, among other

foods. However, starch extraction from Taro (Colocasia esculenta) tuber has not been
 2

extensively reported, thus, the purpose of this study was to test the feasibility of extracting

starch from taro and experiment it. In summary, this study showed that taro starch may be

introduced into the current market of research, and therefore it can be shown superior and

more effective than other natural starches and can be further improved via other studies.

Background of the Study

Taro has been discovered to contain 70–80% starch in the form of minute granules.

Because its starch granules are so small, taro is very digestible. Taro starch may be used as

a better integrant than other traditional starches, according to recent analyses of starch

properties. Starches have long been utilized in pharmaceutical formulations as excipients.

The most popular and standardized starches are maize, potato, and wheat. Native starches

have long been utilized in dermatological powders, as well as tablets as fillers and

integrands. Modified starches have also been used as filler-binders in tablet technology.

Taro starch may be introduced to the region as a research project, and more research

on this starch might be done to emphasize it. Taro is used in a variety of industrial processes

in addition to food production. The microscopic size of taro starch granules makes them

suitable for cosmetic compositions that use aerosol dispensing systems, such as face

powder and dusting treatments. Despite the uses, this starch is not extracted or used on a

significant basis anywhere. Taro starch can be brought to the proponents' notion because

of this study activity and receive attention in the production feasibility.

In the Philippines, the practice of cultivating taro is uncommon because most

farmers cultivate rice in their fields. The process of preparing land is essentially the same

as preparing a field of rice paddies. The Philippines still has a lot of room to grow in terms

of taro production for food. Particularly, in cities and metropolitan areas, current output
 3

falls short of the demand. This is since the current manufacturing and marketing systems

do not match the demand patterns. If utilization is based on processed tubers rather than

directly using fresh tubers, food uses can be increased. Due to this, it allows for more

effective taro product promotion and shipping to far-off locations.

Statement of the Problem

The study was conducted to determine the project feasibility of the Taro Starch in

Region VIII, District 1 and Tacloban City. Specifically, the study sought to answer the

following questions:

1. What is the market potential of production feasibility of DMP’s Gaway Starch in

terms of the following components;

a. Market Description

b. Market Analysis

c. Demand Analysis

d. Supply Analysis

e. Gap Analysis

f. Market Share

g. General Marketing Aspect

h. Proposed Marketing Program

i. Projected Sales

2. What is the technical capability of the production feasibility of DMP’s Gaway

Starch in terms of the following components:

a. Product Description
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b. Production Process

c. Plant Capacity and Schedule

d. Raw Materials and Supplies

e. Machineries and Equipment

f. Furniture and Fixtures

g. Plant Location

h. Plant Layout

i. Facilities Design

j. Utilities

k. Waste Disposal Method

l. Personnel Requirements

m. Total Production Cost

3. What is the organization and management responsibility of the production

feasibility of DMP’s Gaway Starch in terms of the following components:

a. Form of Organization

b. Organization Structure

c. Job Analysis

d. Salary Structure and Employee Benefits

e. Company Policies

f. Company Registrations

g. Project Timetable

4. What is the financial viability of the production feasibility GMP’s Gaway Starch

in terms of the following components:

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a. Financial Assumptions

b. Total Project Cost

c. Source of Financing (70% - 30%)

d. Supporting Financial Schedule

e. Capital Contribution Table

f. Amortization Schedule

g. Projected Financial Statements

i. Cash Flow Statement

ii. Statement of Financial Performance

iii. Statement of Financial Position

h. Financial Analysis

i. Net Profit Rate

ii. Gross Profit Rate

iii. Accounting Rate of Return

iv. Internal Rate of Return

v. Discounted Cash Payback Period

vi. Return of Investment

5. What is the socio-economic desirability of the production feasibility of DMP’s

Gaway Starch in terms of the following components:

a. Employee Generation;

b. Tax Paid to the Government;

c. Increase in the Supply of Goods and Services;

d. Increase in the Demand for Raw Materials and Laborers; and

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e. Extension Program as Social.

Significance of the Study

The purpose of this study was to determine that taro starch can be an alternative

raw material to further products that require starch.

Customers. The study can provide the customers a lesser price of a product that

requires starch because taro has many resources that can be a raw material.

Entrepreneurs/Investors. To stay on top of trends, make smarter industry

decisions, and keep their organization competitive; To get information that can be utilized

to make investment decisions.

Other Proponents. The study would serve as reference in their study of related

literature and will give additional information, concepts, or ideas to support their research.

Scope & Limitation

The study aimed the general households of District 1 (Alangalang, Babatngon,

Palo, San Miguel, Sta. Fe, Tanauan, Tolosa and the City of Tacloban, the capital of the

province and the acknowledged Regional Center of Region 8). The study aimed only

bakeries because bakeries are some of the customers that need the raw material.

Conceptual Framework

The figure shows the conceptual framework of Taro Starch. Marketing Potential

has three (3) components which are Existing Competitor, Demand and Supply. Then,

proceed to Production Feasibility with 2 components which are Technical Capacity and

Product Design & Specification. Then proceed to Manufacturing that has 2 components,
 7

which are Process Planning and Design Capacity. Then the study determined the Financial

Viability, Organization & Management Responsibility, and Socio-Economic Viability.

Lastly, the study produced the Feasibility Study, Taro Starch.

Figure 1. Conceptual Framework

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Definition of Terms

Financial Viability. The capacity to generate enough money to cover operational

expenses, debt obligations, and, when relevant, to allow for development while maintaining

service standards.

Market Potential. A forecast of prospective income for a certain product or service

at a given point in time; A target market or a market segment can be included in the market

size, which can be measured in terms of total value or units of a specific product.

Organization and Management Responsibility. The work delegated to

subordinates by management; It is a moral obligation to accomplish the appointed task. In

other terms, "responsibility" is described as "an individual's commitment to carry out

assigned duties to the best of his/her abilities."

Project Feasibility. The examination of a project's numerous components to assess

its viability; Before starting a project, a corporation might assess its feasibility to identify

problems, develop ways to overcome them, and eventually attract investors.

Socio-Economic Desirability. Examines the potential effects of a proposed project

on the social system in the project environment.

Taro Starch. A white, edible powder derived from the crushed root of the Asian

and Pacific Islander plant Colocasia esculenta; Taro flour is used to produce poi, a starchy

paste. The starchy concoction has also been employed as an adhesive.

Technical Capability. A company's or organization's capacity to obtain new

technologies and technical resources for research and development techniques and

processes.
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Chapter II

REVIEW RELATED LITERATURE AND STUDIES

This chapter presented the related literature and studies after a thorough and depth

search by the proponents. This contained studies, research, ideas, and local and foreign

literature relevant to the current study. These past studies and published literature were all

considered by the proponents to be helpful in strengthening this current research.

Related Literature

Colocasia esculenta L., sometimes known as taro, has been grown for thousands of

years. Taro, a root vegetable with Asian origins, is grown in tropical and subtropical areas,

although it was once a common food in the Pacific Islands, particularly in Hawaii, New

Zealand, and Indonesia to the west. It is a fast-growing herbaceous plant that grows from

a huge corm and can reach a height of 4 feet (1.5 meters). It was purposefully introduced

into many tropical and subtropical places to be utilized as a food crop and animal fodder,

and it has since escaped from farmed areas into natural areas, where it has grown invasive

(Langeland et al., 2008). It has a number of characteristics that let it survive as a weed. It

may reproduce both sexually and vegetative through seeds and corms, tubers, and root

suckers, and it can grow in a wide range of substrates and habitats, from full sun to deep

shade (Safo-Kantaka, 2004). Invasiveness varies with cultivar in this extremely variable

species: in Australia, for example, the purple-stalked decorative garden cultivars are the

most invasive (Queensland Department of Primary Industries and Fisheries, 2011).

Colocasia esculenta L. can be found growing primarily in humid forests and wet

regions such as mangrove forests, riverbeds, along creeks, ponds, and waterways
 10

(Langeland et al., 2008). It may also be spotted in forested areas, sides of roads, and

disturbed nearby areas deserted farmlands (Acevedo-Rodrguez and Strong, 2005). The

starchy corm or underground stem of the taro plant, Colocasia esculenta (L.) Schott, is the

main reason for its cultivation in tropical regions. According to Kreike et al. (2004), it is

one of the most significant staple food crops in the Pacific Islands and is widely farmed

throughout the South Pacific, Asia, and Africa. Taro is often vegetative propagated by

taking stem cuttings or suckers, used particle bombardment to introduce the glucuronides

gene into taro, although the efficiency of transformation was relatively low.

The physicochemical properties of taro starch harvested at various maturities were

studied. Taro starch's composition, physicochemical, and thermal properties are all

influenced by its maturation stage. While the amylose concentration declines with maturity,

the phosphorus content increases. The change in amylose and amylopectin content causes

major changes in the granules' molecular structure, which is reflected in their

monomolecular wetness and surface energy, which increase significantly with maturity.

All composition and structure modifications result in considerable changes in thermal and

functional qualities. In this regard, the gelatinization temperature, water absorption

capacity, swelling power, and water solubility index all grow dramatically with age

(Himeda et al, 2012).

Related Studies

Carbohydrates can be found in abundance in taro corms. Approximately 21-26% of

their fresh weight is made up of starch (Lebot et al., 2011). Small size granules provide a

smooth textured starch gel and promote rapid digestion (Nip, 1997). Additionally, corms
 11

provide a passable source of dietary fiber. Sucrose is the major sugar, and then there is

glucose, fructose, mannose, and xylose. Maltose and a trace amount of raffinose were also

found in some types (Mbfonget al., 2006). The protein level is low, ranging between 4.5

and 7% on a dry weight basis (Olayiwola et al., 2012). Taros are also rather good suppliers

of certain vitamins and phenolic compounds (Champagne et al., 2010) discovered high

levels of -carotene, thiamin, riboflavin, and ascorbic acid.

Fresh taro can be made into starch, which substantially enhances its ability to be

stored, and is then widely used in the food industry as a raw material for processed meals

with starch as their primary ingredient. Additionally, as taro dries up, some of the starch it

contains are transformed into resistant starches (Arici et al., 2016). These resistant starches

are a desirable ingredient for creating functional foods since they demonstrate a

cholesterol-adsorbing capability and a lower glycemic index than native taro starch

(Simsek and El, 2012). So, in terms of storability, practicality, and functionality, converting

fresh taro into flour is advantageous.

The starch content of taro is comparable to or even higher than that of potatoes,

sweet potatoes, cassava, and other similar crops. Taro corm starch (70–80%) is thought to

be the least expensive ingredient for the food industry because of its many possible uses in

cuisine, including as a stabilizer, emulsifier, fat substitute, and filling agent. Recent

research has focused on infant foods, new packaging materials, and geriatric foods with

resistant starch inclusion. Additionally, taro starch's superior qualities make it more

adaptable in terms of behavior than native starch following alteration (Singla et al, 2020).

The decrease in breakdown viscosity for the starches obtained from HMT, HPT,

and OPT modifications was connected to the stability of the starch paste during the heating
 12

and stirring process. As a result, the viscosity or breakdown viscosity decreases. The

decreased viscosity breakdown on taro starch obtained by OPT modification could be

attributed to increased crystalline matrix regularity and the creation of a complex between

amylose and fat during the modification process. This conclusion agreed with a previous

study that used a similar strategy on potato and cornstarch. While the decreased breakdown

viscosity of starch achieved through HMT modification could be attributed to the regularity

of the crystalline matrix and the development of amylose-lipid complexes, which reduces

granular swelling capacity and improves pasta stability during heating. This outcome was

consistent with another study on sweet potato that used a similar strategy. In contrast, the

starch changed by HPT modification had the lowest breakdown viscosity. This could be

because the heating in an autoclave formed a layer outside of the starch granules. This

conclusion agreed with a previous study on cassava and pinhao starches that used a similar

method (Wulandari et al, 2018).

The current food industry requires top-notch ingredients like starches that can

withstand a variety of processing conditions. One of the potential options is to change

starch to create resistant starch, which is more durable and resistant to various conditions

like heat, acid, and shear stress (RS). Due to its thermostability, RS's advantageous features

might be seen as a superior ingredient in functional food items, especially for steamed and

cooked dishes. Therefore, the study came to the conclusion that two cycles of autoclave-

cooling (4°C and -20°C) were the most efficient alteration for raising RS concentration.

Furthermore, at a lower cooling temperature (20°C), a more heat-and shear-stable material

was produced. Furthermore, the starch granule morphologies changed as a result of SC

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processing. These traits point to a viable substitute thermostable ingredient that is

advantageous for the creation of functional food items (Wardana et al, 2019).

The starch extracted from taro corms was utilized as an alternate source for RS

synthesis for the first time in literature. Taro starch was converted into RS3-rich starch

using the following steps: heating, autoclaving, enzymatic debranching (with pullulanase),

retrogradation, and drying twice. Taro resistant starch in vitro starch hydrolysis rate was

lower than native taro starch, suggesting a lower eGI. Taro resistant starch's reduced eGI

value makes it excellent for food formulation, especially for diabetics and others who want

to manage their weight. Due to ability to decrease cholesterol, taro starch's in vitro bile acid

binding capacity was identified as a potential health benefit (Simsek and El, 2012).

Corms of the taro cultivars studied can be regarded significant sources of starch and

minerals in the human diet, including potassium, calcium, phosphorus, and magnesium.

They also contain a fair amount of zinc, iron, and copper. Corms of the cultivar 'NT 01'

were the most valuable source of Fe, whereas corms of the cultivar 'Numkowe' were the

richest source of Zn. Corms of all taro cultivars studied were somewhat low in Mn. The

crude protein values were rather low, implying that taro as a food commodity should be

paired with other protein-rich food sources. We must also consider the extended vegetative

time (taros were harvested almost a year after planting), which most likely had an impact

on the chemical makeup as well as the nutrient value. The findings may be useful in

breeding operations aiming to improve the quality of future cultivars (Andrej et al, 2014).
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Chapter III
METHODOLOGY

This chapter presented the discussion of the study methodology and procedures

used to answer the problem that was engaged in the research. Specifically, study included

the research design, the locale of the study, respondents of the research, the research

instruments, and the data gathering procedure, methods of analysis.

Research Design

The study utilized the experimental and descriptive-analysis method of research to

draw the feasibility of the DMP Gaway Starch. Taro starch is a condiment that uses the

taro puree as the main ingredient in producing the product. Experimental method was used

to determine the feasibility of the product in terms of taste, color, odor, consistency, life

span, etc. Several experimentations were done using the different ratio of ingredients to

achieve the perfect result of the finished product. Descriptive analysis was used because it

determines the nature of the DMP Gaway Starch and its production by analyzing the

feasibility of the product in terms of its market, technical or facilities planning and design,

financial, management and socio-economic details.

This research is a system-based project study which determines the composition,

structure, substructures that occur within the technical operation of the project; determines

the individual parts and units integration of the facilities design; considers the market status

of the project that will elevate the profitability of the product and the growth of the industry,

and strains the environment of the industry that tends to destroy the system apart; analyzes

the management structure that best makes the system works and regulates and financial
 15

statement of the project that will support all the expenses and other costs that could be

incurred to realize the operation of the project and the socio-economic concern of the study

in line with government's thrusts.

Locale of the Study

The geographical site of the target market was the 1st District of Leyte in Eastern

Visayas or Region VIII where the scope municipalities included Babatngon, Palo, Sta. Fe,

Alang-alang, San Miguel, Tanauan, and Tolosa, and the City of Tacloban. In order to get

the households supply of starch to different municipalities in the 1 st district, proponents

based on the statistical data available for demand and supply of starch in region and the

supply commodities from the households of 1 st District and Tacloban City.

Research Respondents

The respondents of this study were selected households in 1 st district of Leyte and

Tacloban City to determine the demand of starch and production volume supplied to

determine the supply of starch based on statistical annual commodity reports. Furthermore,

interview to research adviser for consultation related to the financial, technical, managerial

and socio-economic study of the production of the product was also designed.

Data Collection

The following were the tools used in gathering data or information:

a. Statistical data from the Philippine Statistics Office (PSA). for the

demand for starch based on households in District 1 of Leyte and

Tacloban City.
 16

b. Annual Commodity Reports from Department of Trade and Industry

(DTI) Region VIII and the Philippine Statistics Office (PSA) on starch

based on production volume produced in Tacloban City and District 1

of Leyte and consumption rate of starch.

c. Other solicit of needed information relevant to the study on the different

aspects of the study to the following agencies: Department of Trade and

Industry (DTI) Region 8, Department of Science and Technology

(DOST), and the Philippine Statistics Office (PSA).

The data were retrieved and tabulated using appropriate statistical tools to come up

with an analysis.

Methods of Analysis

To be able to analyze the data gathered by the proponents to determine the

production feasibility of DMP Gaway Starch, the following methods were employed:

Market Feasibility. The data gathered from the commodities report of PSA were

carefully tabulated, analyzed and interpreted. The following are the analytical tools which

determined the market feasibility of DMP Gaway Starch:

Market Share. To be able to identify the market share of the product, the demand

and supply projections were computed first. Afterwards, the Demand-Supply Gap was

identified to solve the Market share. If Demand is greater than the supply, it signifies that

the market aspect of the product is feasible.

Demand and Supply Projection. To determine the demand and supply projection,

mathematical computations were involved. There are four methods used. Under these
 17

methods, the regression lines are derived and standard deviations of each are computed for.

Step 1. Compute for the expected values using the four methods:

1. Arithmetic straight line: 𝒀𝒄 = 𝒂 + 𝒀𝒊 − 𝟏

𝒀𝒊 𝟏
2. Arithmetic geometric curve: 𝒀𝒄 =
𝟏 𝒓

3. Statistical straight line: 𝒀𝒄 = 𝒂 + 𝒃𝒙

4. Statistical parabolic: 𝒀𝒄 = 𝒂 + 𝒃𝒙 + 𝒄𝑿𝟐

Step 2. Compute for the standard deviations of each methods using the formula:

∑(𝒚𝒊 − 𝒚𝒄)𝟐
𝜹=
𝒙

The one which yields the smallest standard deviations is most likely to give

the most reliable forecast. But for clear suggestion, we will minimize time through

representations.

Where:

Ye = initial value (1st year)

Yi = value for the year past

Thus, it is advisable to reconsider the projected trend the statistical parabolic

would yield in the light of other factors which may or may not make the projections

realistic. In general, if the method yielding the smallest standard deviation appears

to be unrealistic, then the one which yields the next smallest standard deviation may

be favored.

In contradiction, time is relevance, so we ended up demonstrating the four

methods in to one derivation, thus proponents used:

Arithmetic straight line: 𝒀𝒄 = 𝒂 + 𝒀𝒊 − 𝟏

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Gap Analysis. To determine the market share of the product, the formulas are as

follow:

Gap Analysis = Demand - Supply

𝑨𝒏𝒏𝒖𝒂𝒍 𝑷𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒐𝒏
Average Market share =
𝑫𝒆𝒎𝒂𝒏𝒅 𝑺𝒖𝒑𝒑𝒍𝒚 𝑮𝒂𝒑

Technical Feasibility. The technical aspect of the study was based on the existing

technology of starch and data available at the Department of Science and Technology and

University of the Philippines for the study of Starch Production.

Product Design Requirements. The proponents utilize guidelines based on

product manual for starch for product design requirements as benchmark for what is offered

in the market retail

Production Process. Description of the process was illustrated using flowcharts.

Plant Size and Production Schedule. To determine the rated annual volume of

production of the taro starch, time study will be utilized first to know the standard time of

producing one 250g pack of taro starch. The identified standard processing time per pack

will be used as the input for the capacity computation of the plant with the consideration of

other factors.

Production Cost. To identify the cost of producing one unit of taro starch, the

formula is computed as follows:

𝑪𝒐𝒔𝒕𝒔 𝒐𝒇 𝑮𝒐𝒐𝒅𝒔 𝑴𝒂𝒏𝒖𝒇𝒂𝒄𝒕𝒖𝒓𝒆𝒅

1. Unit Production Cost (1 year) =
𝑽𝒐𝒍𝒖𝒎𝒆 𝒐𝒇 𝑷𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒐𝒏

2. Selling Price = Unit production cost x Profit Margin

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Plant Location. The ideal location of a plant must conform to the

following factors:

1. The accessibility to, and availability of, raw materials sources.

2. The availability of cheap or moderately priced utilities such as

power,water, or fuel.

3. The combined cost of transporting raw materials and fuel to the plant
site.

4. The proximity to distributing outlets.

5. The availability of skilled and unskilled workers.

Plant Layout. To come up with a sound plant layout, the following principles

mustbe accounted for:

1. Principle of Over-all Integration

2. Principle of Minimum Distance Moved

3. Principle of Flow

4. Principle of Cubic Space

5. Principle Satisfaction and Safety

6. Principle of Flexibility

Management Feasibility. The following were the analytical tools used to

identifythe management feasibility of the product.

Form of Ownership. The form of ownership that will best suit the character

and nature of the DMP Gaway Starch Production, and assets and capability of the

owners will be based on the evaluation of the nature of each of the four types of industry

organization namely:
 20

1. Sole Proprietorship,

2. Partnership, or

3. Corporation

Project Schedule. In order to determine the time allocated per activity to

complete the project, the researchers utilized the Gantt Chart.

Financial Feasibility. The following were the analytical accounting tools used in

determining the financial feasibility study.

a. Total Project Cost

1. To be able to identify the total expenses that will be incurred in the

establishmentof the project, the following accounting formula used is:

Total Fixed Capital + Total Working Capital = Total Project cost

2. To identify the Total Fixed Capital, the formula used was:

Building + Machinery + Furniture and Fixture = Total Fixed Capital

3. To compute for the Total Working Capital the formula used is:

Total Working Capital = Raw Materials Purchases + Direct Labor Cost

+ Manufacturing Expenses + Operating Expense

b. Supporting Schedule
1. For the Interest Payment for year 1, it was computed as:

Interest Payment (Year 1) = P (1)

2. To identify the annual cost of the purchased materials, the formula is:

Annual materials purchases = Total direct materials + Total Indirect

Materials + Freight In
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3. To compute for the annual sales, the formula is:

3.1. Annual Net Sales = (Production Volume + Selling price

per piece +Annual Gross Sales) - Returns and

Allowances

3.2. Accounts Receivables = Annual Net Sales - Cash Sales

4. To compute for the Labor Cost, the formula is:

Labor cost = Direct labor + Indirect labor + Administrative Salaries

5. The depreciation rate was computed using the formula:

Depreciation = V = P(1-R)n

Where:

V = future value

P = present value

R = depreciation rate

N = # of years

6.To compute the expenses on the manufacturing of the product, the

formula used is as follows:

6.1. Total manufacturing expense = cash manufacturing Expense +

Plant depreciation

6.2. Cash Manufacturing Expenses = Indirect materials + Indirect

labor cost + Plant fringe benefits + Utilities + Repairs and

maintenance + Plant insurance + Plant Supplies

7. The operating expenses were computed as follow:

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7.1. Total operating expense = Cash operating expense + Office

depreciation

7.2. Cash Operating Expenses = Administrative salaries +

Office fringe benefits + Office supplies +

Permits and licenses + Advertising and

promotion + Miscellaneous expenses

8. To identify the costs of goods manufactured, the formula used was:

Cost of goods manufactured = (Raw materials Inventory Beg. –

Raw materials Inventory End.) + (Raw Materials

Used + Direct Labor Cost + Manufacturing

Expense + Work-inprocess Inv. Beg.) – Working

process Inv. End

9. To know the annual costs of goods sold, the formula used was:

Annual cost of goods sold = (Cost of Goods Manufactured +

Finishedgoods Inv. Beg.) – Finished

goods Inventory End.

10. The computation for the variable cost is as follow:

Variable costs = Direct material cost + Direct labor cost +Indirect

material cost +Indirect material cost +Plant

fringe benefits + Plant supplies + Utilities+

Office supplies +Miscellaneous expense

11. The computation for the fixed cost is as follow:

Fixed cost = Administrative salaries + office fringe benefits +

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Plant insurance +Repairs and maintenance + Plant and

Office depreciation + Permits and licenses + Advertising

and promotion

c. Projected Financial Statements

1. The income statement is computed as follow:

Net Income After Tax = (Gross sales - Sales and Returns

allowances – Costs of Goods Sold-Operating Expenses-Interest

Expense-Income Tax

2. To compute the cash flow, the formula is:

2.1. Net Cash Flow = (Net Income Before Tax + Depreciation -

Increase in Account Receivable - Increase in Raw Materials

Inventory)-Fixed AssetsPurchase + (Cash Receipt from Loan +

Cash Receipts from Partners – Payments to Loan-Payments to

Partners)

2.2. Cash Balance End. = Net Cash Flow – Cash Balance Beg.

3. To identify the balance sheet, the formulas are:

3.1. Total Asset = Total Liabilities Owner's Equity

3.2. Total Asset = Current assets + Fixed assets – Accumulated

depreciation

3.3. Total Liabilities Owner's Equity = Total Liabilities + Total

Owner's Equity

d. Financial Analysis

1. Test of Profitability shows the operational performance and

 24

efficiency of theproject.

2.1. Average Net Profit Margin = 𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑵𝒆𝒕 𝑰𝒏𝒄𝒐𝒎𝒆 𝑨𝒇𝒕𝒆𝒓 𝑻𝒂𝒙
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑵𝒆𝒕 𝒔𝒂𝒍𝒆𝒔

2.2. Ave. Asset Turnover = 𝑨𝒗𝒆. 𝑵𝒆𝒕 𝑺𝒂𝒍𝒆𝒔

𝑨𝒗𝒆. 𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔

2. Test of Capital Investment: Evaluate the jurisdiction for investing in the

project.

3.1. Ave. Return on Investment = 𝑨𝒗𝒆. 𝑵𝒆𝒕 𝑰𝒏𝒄𝒐𝒎𝒆 𝑨𝒇𝒕𝒆𝒓 𝑻𝒂𝒙

𝑻𝒐𝒕𝒂𝒍 𝑷𝒓𝒐𝒋𝒆𝒄𝒕 𝑪𝒐𝒔𝒕

𝑻𝒐𝒕𝒂𝒍 𝑷𝒓𝒐𝒋𝒆𝒄𝒕 𝑪𝒐𝒔𝒕

3.2. Invested Recovery Period =
𝑨𝒗𝒆.𝑵𝒆𝒕 𝑰𝒏𝒄𝒐𝒎𝒆
 25

Chapter IV
RESULTS AND DISCUSSION

This chapter contained the data gathered with corresponding analysis and

interpretation to arrive and seek answers to the achievement of objectives.

PROJECT SUMMARY

A. Name of the Enterprise

DMP Manufacturing Plant. The name of the enterprise is obtained from the

proponent’s name “Denise”, “Mark”, “Patrick”. Whereas the products name is

“DMP Gaway Starch,” which was been obtained from the main raw material of the

product -Taro. It was agreed by the proponents because of its catchy sound which

will give the people the curiosity about the product.

B. Location

Maharlika Highway, Brgy. Pawing, Palo, Leyte

C. Project Rationale

Starch is a carbohydrate that is composed of many glucose molecules joined

by glycosidic bonds. This polysaccharide is produced by all green plants as a form

of energy storage. It is the type of carbohydrate found most frequently in the human

diet and is widely present in staple foods. In the modern era, it is one of the most

significant foods and biological materials utilized for a wide range of purposes

globally. It is utilized in the culinary sector as a thickener, preservative, and

enhancement agent for baked goods, confections, pasta, soups, sauces, and

mayonnaise. The market demand for industrial starches, which has significant
 26

usage in various food applications, increases along with the market need for

processed and ready-to-eat meals, boosting the total market.

Starch is frequently derived from a variety of foods, including potatoes,

wheat, corn, rice, and cassava. The aim of this study was to examine the viability

of extracting starch from Taro and evaluate it because starch extraction from Taro

has not been widely reported. In conclusion, this study demonstrated that taro starch

may be put into the existing research market, proving it superior and more efficient

than other natural starches and allowing for further advancement through other

studies. The proponents were, as well, trying to raise awareness to the feasibility of

Taro starch that can be marketed as a new product which can serve as income

generating project, specially, to places where taro roots are mostly planted.

DMP Manufacturing Plant aimed to satisfy a great portion of the unsatisfied

demand of market. The project proposed a health product that will satisfy the

customers’ needs from taros where it expects to establish a name in the food agent

production and stable status in industry to introduce other kind of starch, to gain

new distribution channels and retailers from nearby towns and to provide job

opportunities.

D. Project Objectives

The company will be approached on product differentiation strategy

wherein the new concept of our product, “Taro Starch”, stand outs to our target

market. This will distinguish what we sell from what our competitors do, as well as

focusing in our customers is our primary start to increase brand loyalty, sales, and

growth. The company will also envision that during the first five years of operation,
 27

it will give an increasing income to the proponents, more job employment and

facilitate an environmental friend industry more specifically as follows:

1. To adequately supply Eastern Visayas with a low-cost but high-quality

taro starch to be used in households and related establishment;

2. To allocate the use of taro roots, which is abundant in our region as

starch;

3. To generate employment for the people within the vicinity of the plant

location (Tacloban City); and

4. To the government, in its programs in establishing a cost efficient,

competitive, sustainable production that is harmonious with nature and

ensure long term economic productivity.

E. Feasibility Criteria

1. Market Potential

a. Gap Analysis

a. A range from 35% to 45% gap from the market demand to supply per

year must be attained to highlight the gap between the market's

requirements and the fulfillment of goods and services to be able to

focus on the capacity of demand for the Taro starch product and

maximize production-distribution capabilities.

b. Market Share

- To meet the feasibility criteria for unsatisfied demand for Taro Starch,

the deficit rate should be within the range of 20% to 40% to ensure a

significant market share, and the selling price of the product should be
 28

lower than that of the existing alternatives in the market, considering the

industry's utilization of unique raw ingredients.

c. General Marketing Aspect

- To create a feasible marketing program for Taro Starch not more than

Php 25,000 in cost, the researchers should conduct market research to

identify the target customers by analyzing available statistical data on

household population of chosen market scope and demographic patterns

to be used to specify the market, such as the consumption rate and

quantity supplied of starch in kilos, with no higher than 40% deficit and

where it can develop effective advertising strategies and promotional

campaigns that resonate with the target audience, leading to increased

product awareness and sales from price range of Php 25 to Php 30 to

make it competitive.

d. Projected Sales

- The projected Sales for Taro Starch are expected to be highly feasible,
given its status as the most widely used food thickening agent globally.

Furthermore, the inclusion of a new organic ingredient, which not only

enhances its taste but also offers substantial health benefits, is likely to

drive customer demand. Statistical data should consist of growth rate of

at least 5% - 15% increase quantity sold per year, with annual gross sales

increasing from Php 40 million to Php 60 million pesos to indicate a

promising market potential, with a constant increase of at least 4% - 5%

increase of sales.
 29

2. Technical Capability

a. Production Process

- The feasibility criteria for the production process of Taro Starch include the

availability of a cool, dry, and well-ventilated storage facility to store taro

roots for up to six months. The process should be designed to accommodate

the processing time of 8 hours per shift. Furthermore, efficient machinery

and equipment should be in place to handle the various operations involved,

such as peeling, cutting, grinding, steaming, separation, drying, refining,

and packaging, ensuring a smooth and uninterrupted production flow.

b. Raw Materials

- Feasibility criteria for the raw materials for Taro Starch production include

ensuring a consistent and steady supply of taro from local farms in Region

VIII, where taro is the third most produced crop. The required quantity of

taro to purchase is approximately 74,880 kgs per month, enabling the

production of 1,684,803 packs of 250g taro starch, which entails 2,880 kgs

of taro as daily production requirement to produce 1,350 packs of 250g taro

starch per day. Additionally, the company must establish a system to

directly source fresh taro roots from Samar Island farmers especially in

Eastern Samar where majority of commodity grows and being harvested

every month and accommodate walk-in suppliers to maintain an adequate

buffer stock.
 30

c. Machinery and Equipment

- Feasibility criteria for the machinery and equipment for Taro Starch

production include ensuring ease of cleaning for the machines, floors, and

the entire plant, while also providing ample space to prevent cross-

contamination and personal injury. Additionally, the selection of modern

equipment known for its high-quality production efficiency is essential for

the successful operation of the DMP Manufacturing Plant. The use of

stainless-steel machinery for the initial years until the cash payback period

further ensures durability and quality in the production process. All

machines and spare part must be 100% available in the Philippines with

corresponding technicians in the city who can repair, when needed, with a

budget of 800,000 – 2.5 million pesos cost for all machines and equipment

to acquire.

d. Plant Location

- The strategic location of the proposed DMP Manufacturing Plant must be

in Tacloban City for easy accessibility to potential customers, suppliers, and

workers, ensuring efficient distribution of raw materials and delivery of the

final product. The proximity to basic utilities such as electricity, water, and

fuel should provide significant advantage for the machinery and equipment

for Taro Starch production, ensuring smooth operations and reducing

potential logistical challenges. The chosen location must satisfy the criteria

for a suitable site, considering factors like accessibility, proximity to

 31

sources of supplies and resources, cost-effectiveness, and availability of

necessary resources such as labor, power, water, and raw materials.

e. Plant Facility and Design

- focuses on the demand for a product or service and maximum production-

distribution capabilities. It includes constructing a one-floor facility

covering 600 square meters with a high-quality building construction to

ensure its intended useful life and considering a total land area of 1,500

square meters with an estimated cost between Php 3 – 4 million, including

a separate budget of 4 million maximum for the building construction.

f. Labor Requirements

- This includes hiring initially thirty (30) well-equipped employees across the

Administrative, Production, and Quality Control & Maintenance

departments, ensuring commitment to the company's goals and regulations.

Direct Labors minimum requirement are at least High School graduates,

with 6 months or more experience in the food manufacturing, while the

indirect labors must at least be a college graduate of Management,

Technology, Engineering or any related to the field of position. All position

must possess good communication skills, can work under pressure and

minimal supervision, and have good personality with no derogatory record.

Future employees of the company will undergo the standard hiring process

from recruitment to selection with corresponding employee benefits,

training, and development.

 32

3. Organizational Analysis

a. Form of Ownership

- For Taro Starch, it includes establishing a strong partnership agreement that

outlines decision-making processes and resolves partner disputes, while

also obtaining the necessary standard process of forming a type of

ownership from the Securities and Exchange Commission, duly signed by

all partners to ensure legal compliance and adherence to business entity

standards.

b. Permits and Licenses

- The feasibility of obtaining registration and licenses for Taro Starch can

be assessed based on the total cost involved, which amounts on not

exceeding to ₱50,000. Meeting this financial requirement will

determine the feasibility of acquiring the necessary permits and licenses

for the business - Barangay Certificate, Municipal Registration,

Regional Registration, Documentary Stamp, Environmental Inspection

and Monitoring Fees, DTI Registration, BIR Certificate, FDA

Certificate, and Building Permit

c. Officers and Key Officers

- The feasibility criteria for the officers and key personnel of the taro starch

plant will be based on their qualifications and ability to fulfill their

designated roles and responsibilities effectively and preferably locals as to

where the plant location is located, ensuring a comprehensive understanding

of the plant's operations and processes, as mentioned in Labor

 33

Requirements. The selected individuals should possess relevant experience

and expertise in the field, enabling them to contribute to the successful

functioning of the plant. Future employees of the company are 100% will

undergo the standard hiring process from recruitment to selection with

corresponding employee benefits, training, and development.

4. Financial Viability

a. Source of Financing

- A local national bank should be chosen only with a maximum of 10%

interest per annum payable in 5 years but with 25% - 30% loanable

amount range from its total project cost of Php 18.5 million

b. Loan Amortization

- The feasibility of obtaining the required financial resources for Taro

Starch appears promising, as the partners have successfully raised

30.00% of the total capitalization through equity-financing, and they

plan to secure the remaining 70.0% through debt-financing.

c. Net Profit

- The net profit rate for Taro Starch should show consistent growth over

the 5-year projection from 20% to 30%, indicating improved

profitability. This trend suggests that the company's ability to generate

profit from its sales has been steadily increasing and is likely to continue

in the future.
 34

d. Gross Profit Rate

- This must provide gross profit rate for Taro Starch demonstrates

consistent growth over the five-year period, indicating the company's

ability to effectively generate profit from its sales with increasing

percentages, from 50% to 70% in range to suggest improved efficiency

in managing costs and maximizing sales revenue. This trend reflects a

positive outlook for Taro Starch's profitability and underscores its

potential for sustained financial success.

e. Accounting Rate of Return

- The industry's accounting rate of return (ARR) should achieve a range

of 50% to 70% during the first five years of operations to indicate a

viable investment opportunity for DMP Manufacturing.

f. Internal Rate of Return

- The feasibility of the Taro Starch project's Internal Rate of Return (IRR)

will be deemed satisfactory if it is beyond the required rate of return of

25%, indicating its attractiveness for investment. However, if the IRR

falls below the acceptable rate of return, it is advisable to discontinue

the project.

g. Discounted Cash Payback Period (DCPP)

- The feasibility criterion for the Discounted Cash Payback Period

(DCPP) for Taro Starch is that the industry should achieve a cash

payback from the capital invested within 2 - 3 years of operations to

 35

make DMP Manufacturing an indication as a favorable investment to

make.

h. Return of Investment (ROI)

- The return of investment (ROI) of the industry from year one to five of

operations should be between 20% to 30%. DMP Manufacturing should

guarantee return of investments between the parameters to imply good

indication that the proposed business is profitable.

5. Socio-economic Desirability

- The business should contribute to the growth of the economy by

providing employment possibilities for locals, which will not only

increase local income but also lower the unemployment rate and should

put paying taxes to the government first, with an annual contribution

equivalent to 30% of income before taxes.

- As the region's first starch producing factory, it will initially start

producing after the project is completed with currently only one in

operation in the location area and only 30 work positions can be hired,

the construction of the DMP Manufacturing Plant, worth Php 7 million

- 7.5 million (building and land), will result in the creation of a facility

that must produce taro starch of the highest standards of food quality

offered to potential customers in the city/region.

- In the development of the manufacturing plant, it requires the business

to employ numerous laborers with at least 20.0% of its project cost

 36

which should be allocated to the initial run of the plant operations in

2024.

F. Highlights of the Project

1. History

Many different foods, including potatoes, wheat, corn, rice, and cassava,

can be used to make starch. Since there hasn't been much information about

starch extraction from taro, the purpose of this study is to evaluate its viability.

The proponents seek to meet a sizable amount of the market's unmet demand.

The project offers a healthy product that will meet the needs of the locals in

Taros, where it hopes to build a reputation for itself in the food agent industry

and achieve a stable position that will allow it to introduce other types of starch,

acquire new distribution channels and retailers from nearby towns, and create

jobs. As a result, this study reveals that taro starch may be incorporated into the

current research market, proving it superior and more effective than other

natural starches and enabling further development through more studies. The

proponents are also working to increase knowledge of the viability of taro starch

as a novel product that may be sold to generate cash, particularly in areas where

taro roots are often planted.

2. Project Timetable

DMP Manufacturing Plant will start its operations in the year 2024.

Hence, the whole year of 2023 will be allocated for the completion of the study,

standardizing the operations and activities to be performed down to the

 37

construction of the plant, hiring of potential human resource up to the start of

operations.

3. Nature of the Industry

Starch is one of the most significant thickening agents utilized today for

a wide range of applications around the globe. It is utilized in the culinary sector

as a thickener, preservative, and enhancement agent for baked goods,

confections, pasta, soups, sauces, and mayonnaise. The global demand for

industrial starches, which have significant usage in these food applications,

rises along with the consumption of processed foods, pushing the entire market.

Cornstarch and potato starch are the only starches currently available in Region

8. Taro has remained a subsistence plant in most cultures and can serve as an

inspiration for taro starch manufacturing as a result of breeders' lack of attention

to the plant.

High-quality protein and a rich amount of phosphorus, potassium,

calcium, and easily assimilated iron can be found in taro starch. Additionally,

it contains a very fine grain, ingestible starch, a high ash content, and it has the

potential to be a good source of oil. It is a great source of fiber and nutritious

carbs, both of which help with digestion and promote healthy weight loss.

Because of its rich vitamin C, B6, and E content, it also supports immune

system health and free radical protection.

4. Mode of Financing

The investment of the proponents through equity financing and the

borrowing from a bank through debt financing will make this investigation
 38

possible. To cover the estimated cost of the project, the proponents will be the

ones to raise their own money and put it into the partnership. The bank will be

contacted for the balance.

5. Investment Costs

The money that must be invested in order to make the project a reality

is 21,000,000 PHP. With this sum, 17.86% will go toward the land, 17.71% will

go toward the building, 9.74% will go toward machinery and equipment, 17.7%

will go toward delivery equipment, 0.32% will go toward furniture and fixtures,

0.21% will go toward pre-operating costs, and the remaining 36.45% will go

toward working capital.

 39

MARKET STUDY

a. Product Description

Nowadays, starch is one of the most important foods and biological materials used

for a variety of purposes around the world. In the food industry, it is used as a food or

additive to thicken, preserve and improve baked goods, confectionery, pasta, soups,

sauces, and mayonnaise (Egharevba, 2019). As the consumption of processed and ready-

to-eat foods increases, so does the market demand for industrial starches, which has

important applications in these food applications, thereby driving the overall market.

In Leyte District I, the present starches in the market are corn starch and potato

starch. Thus, a new variant of starch has been formulated, made up of taro. Breeders paid

little attention to the plant, and as a result, taro has remained a subsistence plant in most

cultures, and it was the inspiration for taro starch production. The nutritional value of taro

is higher than most other root crops. Taro starch contains high-quality protein and is a

good source of phosphorus, potassium, calcium, and readily available iron. It also has a

very fine grain, digestible starch, rich ash content, and can be a good source of oil. It is an

excellent source of fiber and good carbohydrates, which both improve digestive function

and aid in healthy weight loss. Its high levels of vitamin C, vitamin B6, and vitamin E also

help maintain a healthy immune system and fight off free radicals.
 40

Figure 2. Product Logo

Package:

250 grams per bag

Storage:

It keeps product away from water, humidity high temperature to avoid the moisture

absorption.

Ingredients:

Water & Taro

Uses:

The product is used in a variety of food products for a variety of purposes

including thickening, gelling, increasing stability and replacing or enhancing more

expensive ingredients. It is preferred because of its availability, relatively low cost, and

unique performance. It is a white, tasteless, odorless powder, insoluble in cold water or

alcohol. It can also be converted into sugar,for example through malting, and fermented
 41

into ethanol in the production of beer, whiskey, and biofuel. It is processed into many of

the sugar used in processed foods. It can also be mixed in warm water to form a paste and

used as a thickener, hardener, or binder.

b. Demand Analysis

The demand for starch in 1st District and Tacloban City has been increasing with

regard to consumer growth. The demand for starch for the past five years was determined

by the proponents as shown table 1. The population data of the market were gathered as

the consumption rate to determine the estimated number of consumers.

To determine the amount or volume of starch through commodities report from

PSA, as observed on the table, the demand of starch increases every year.

Table 1. Historical Demand of Starch

Household Consumption
Year Total Demand Growth Rate
Population Rate (kg)
2016 114,208 77.06 2,306,365.99
2017 115,310 77.06 2,331,266.80 1.07%
2018 116,425 77.06 2,356,515.00 1.08%
2019 117,553 77.06 2,382,116.38 1.09%
2020 118,693 77.06 2,408,076.88 1.10%
Average Growth Rate 1.08%
Source: Commodities Report, Philippine Statistics Office (PSA)

The proponents determined the projected demand for five years, as shown on Table

2. It is assumed that the increased of population will be 1.08% per year.

 42

Table 2. Project Demand of Starch

Year Annual Demand (in kg)

2024 2,514,273.24
2025 2,541,546.18
2026 2,569,114.95
2027 2,596,982.76
2028 2,625,152.87
Statistical Tool Used: Statistical Straight Line

c. Supply Analysis

District 1 and Tacloban were supplied for several years and are currently being

supplied with starch through importing products from manufacturers outside the region.

The historical supply of starch for the past five years is shown on table 3. The data

were gathered from the commodities reported. The table shows that there is a decreasing

supply of starch over the past 3 years. This tends that many manufacturers or suppliers of

starch are having distress due to pandemic as a result of producing starch to markets.

Table 3. Historical Supply of Starch

Year Qty Supplied Total (kg) D1+Tac % Total Supply (kg) Growth Rate
2016 201.36 6,280,284.27 26.21% 1,645,819.03
2017 201.86 6,170,310.64 26.24% 1,618,832.74 -1.64%
2018 200.25 6,150,339.62 26.27% 1,615,449.76 -0.21%
2019 197.79 6,087,599.62 26.30% 1,600,837.02 -0.90%
2020 201.02 6,098,670.09 26.33% 1,605,647.32 0.30%
Average Growth Rate -0.61%
Source: Commodities Report, Philippine Statistics Office (PSA)

The projection of supply of starch for five years is shown on table 4. There is a decrease

in the supply of starch each year. The decrease of supply affects the consumption capacity of

the consumers, this tends to have scarcity poverty of the marketable stabilization.
 43

Table 4. Projected Supply of Starch

Year Annual Supply (in kg)

2024 1,566,626
2025 1,557,019
2026 1,547,472
2027 1,537,983
2028 1,528,552
Statistical Tool Used: Statistical Straight Line

d. Demand-Supply Analysis

Supply and demand are dependent on each other. The law of supply and demand

states that more demand at low supply implies high pricing of commodities and greater

supply indicates lowering cost at any rate.

Table 5 shows the gap between the demand and supply of starch, wherein, the

demand of the consumers is higher than the supply of starch. Hence, an unsatisfied demand

occurred. This unsatisfied demand will be supplied by the project at its capacity. Even

though there are lots of manufacturers supplying the market, this gap is a pointer that the

product will have its share in the market.

Table 5. Demand – Supply Gap Analysis

Year Demand Supply Deficit Gap

2024 2,514,273.24 1,566,625.7 947,647.52
2025 2,541,546.18 1,557,019.4 984,526.77
2026 2,569,114.95 1,547,472.0 1,021,642.95
2027 2,596,982.76 1,537,983.1 1,058,999.63
2028 2,625,152.87 1,528,552.5 1,096,600.42
 44

DEFICIT GAP
1,150,000

1,100,000

1,050,000

1,000,000

950,000

900,000

850,000
2024 2025 2026 2027 2028

Figure 3. Projected Demand – Supply Gap

The graph represents a gap analysis of taro starch production from the year 2024 to

2028. The y-axis indicates the deficit, or the gap between the desired production level and

the actual production. The deficit values are presented in kilograms, likely representing the

quantity of taro starch in some standardized unit of measurement.

In 2024, the deficit is 947,648 units, indicating that the actual production falls short

of the desired level. Over the next four years, the deficit gradually increases, with values

of 984,527 units in 2025, 1,021,643 units in 2026, 1,059,000 units in 2027, and 1,096,600

units in 2028. From analysis, researchers concluded that the current production of taro

starch is insufficient to meet the demand, and the deficit is projected to worsen over time

if no action is taken to address the shortfall for the next 5-year projection.
 45

e. Market Share

One of the factors considered in determining the feasibility of a project is the market

share of the project. The market share is based on the proposed capacity of the production

and the demand-supply gap. As shown on Table 6, the share percentage increases every

year. This means that the demand of the people will continually be supplied by the product

and attract more consumers in the future, making it competitive in the industry.

Table 6. Market Share

Year Demand Deficit Gap Market Share

2024 2,514,273.24 947,647.52 37.69%
2025 2,541,546.18 984,526.77 38.74%
2026 2,569,114.95 1,021,642.95 39.77%
2027 2,596,982.76 1,058,999.63 40.78%
2028 2,625,152.87 1,096,600.42 41.77%
Average Market Share 39.75%

f. General Marketing Aspect

The major factors that will shape trends over the long term can provide insight as

to how future trends may occur are shown as follows:

1. DEMAND – the demand for starch depends on the several factors enumerated

as follows:

a. Consumer’s Income – As income of consumers increase significantly,

they tend to increase their consumption of starch. However, as the sales

decreases, the company will decrease its production of the starch to

avoid large costs and inventory.

b. Price of Related Goods – An increase in the price of substitute products

such as corn starch will increase the demand of taro starch by

 46

establishing a competitive price, environment-friendly and quality

products.

c. Marketing Tools – Advertising, credit policies and promotions are

considered by the company because introducing the product into the

market will pave way to customers’ interest and awareness.

d. Quality – Customers will continue patronizing the product when they

know taro starch possesses same quality to other existing starches. Thus,

the company will be exerting full effort and focus in consistent and

improving quality.

e. Consumer’s Taste and Preferences – restaurants, bakeries, local markets

etc. are becoming more satisfied about the quality for their products

such as food, detergents, etc.; as a result, the demand for the taro starch

will increase substantially.

f. Consumer’s Expectation of Future Prices – When the consumers expect

higher price in the future for the price of taro starch, the tendency for

consumers is to buy more taro starch immediately to maximize the

purchasing power of their money. In the same manner, demand for taro

starch will decrease if the consumers expect prices to decline in the

future. With that, DMP Gaway Starch will exert full effort to provide an

affordable and competitive price at present and in future without losing

its quality.

g. Number of Consumers – An increase in the number of consumers means

more demand of taro starch.

 47

2. SUPPLY – Many starch companies are supplying the industry with variety of

starch. This will significantly affect the market. Supply of the starch might be

affected by:

a. Technology – In order to satisfy the demand, the company will adopt

technologies for easier and faster product of the product. Cost and life

span of each machine and equipment employed will be the top

consideration.

b. Number of Producers – It is difficult to enter in the market when there

is an existing product that consumers are patronizing. However, the

customers are always attracted with something new and with good

marketing strategy. This will become the opportunity of DMP Gaway

Starch to introduce not only something new but a useful product that

will captivate the interest of most customers.

c. Sources and Cost of Production Factors – The company will ensure least

cost production without affecting its quality.

d. Cost of Inputs Used – As the price of the input or cost of production of

taro starch decreases, it will tend to increase the quantity supply because

the profitability of the DMP Gaway Starch increases.

e. Expectation of Future Price – When the suppliers of DMP Gaway Starch

expect higher prices in the future supplies/commodities, possibly, they

will keep their goods and when the price rises, they will release them.

Inversely, the supply to produce taro starch decreases if the producers

 48

expect prices to decline in the future. With that, the DMP Gaway Starch

will look for suppliers at least cost but at very good quality.

f. Price of Related Products – An increase in the price of taro starch may

likely encourage the suppliers to shift their production in higher level

because this will provide them more profit.

g. Number of Firms in the Market – As the number of firms in the

manufacturing sector of starches increases, the supply of goods and

services for this area rises.

3. PRICES – The consumers are looking for products that have least cost but with

a good quality. The DMP Gaway Starch aims to produce a starch with an

affordable price but with a high and consistent quality since it is what the

consumers demand. This will become one of the competitive edges of the

company compared to other existing firms.

SWOT ANALYSIS

In the market today, competition is very tight. DMP’s Gaway Starch is a new

competitor in the starch industry in the market that can analyze its industry market strategic

position of the taro starch. The crop has been included under "other" roots, bulbs, and tubers

because taro production in the Philippines is still modest when compared to that of sweet

potato and cassava. In terms of production and area among the root crops grown in the

Philippines, it comes in third place. Given the nutritive value and market potential of this

crop, this is terrible. However, a new poll reveals a significant rise in overall production.

Paddy, dry land, and circumstances in between paddy and dry land cultures are all used to
 49

grow taro. Within an area, the technique varies from farm to farm and frequently from

region to region. The analysis is shown as follows:

Table 7. Market Environment of Taro Starch

INTERNAL ENVIRONMENT
STRENGTHS
 Cheap Labor
 Odorless
 Environmental-Friendly
 Availability of Raw Material
(Taro)
 Huge Starch Demand
 Ease of Implementation
 Easy to acquire technical and
managerial skills
 Location Accessibility
EXTERNAL ENVIRONMENT
OPPORTUNITIES
 Government support for
manufacturing industries
 Opening of industries that uses
starch as raw material.
 Ease of access for all required
materials
 To gain potential investors of
innovating the taro starch
 To expand the industry because of
its great potential in the market
WEAKNESS
 Water- intensive production process
 Considerable Competition
 Not known by most of the consumers
THREATS
 Downturn in economy
 Price Erosion
 Existing companies offering existing
starch.
 New entrants in the industry
 Companies with existing famous and
strong marketing strategies in the
same field
 Inconsistent number of consumers
because of being new in the market
 Compete with the existing starch
companies
 50

 STRENGTH

The main raw material for the production process of taro starch is fresh taro

(gaway) acquired from the local farms or markets. Starch is produced for different

kinds of purposes, it may be for food, detergent, etc. However, due to increase of

consumers of the commonly used starch, which is corn starch, the price of starch

increases. Nevertheless, taro can be produced as starch with the same quality of

corn starch with affordable price.

Taro starch can be utilized because of its many different uses, such as for

cooking purposes, cleaning purposes, detergent, etc. As main raw material, taro

starch can be easily accessed at very least cost. Compared to existing starches, the

taro starch is very organic because of its raw material used. As we know, starch

consumers increase, which makes the taro starch the best alternative or rather the

appropriate product to utilize. In this way, DMP Gaway Starch could contribute in

saving our environment.

 WEAKNESSES

Taro starch will be new to the market. Some of the customers might doubt

the quality and effectiveness. As compared to the existing starches, taro starch will

have a long-term proposal in the market. With that, the industry will have a very

difficult start up. Loyalty of the customers will be difficult to attract because of

strong marketing strategies and quality of existing starches had, which provided in

the previous years in the market by most of manufacturing firms of starches. It will

be one of the weaknesses of DMP Gaway Starch because competition in such area
 51

is already very tight. Most of consumers are sticking to products that are already

known. However, the industry will ensure to overcome all of these weaknesses.

 OPPORTUNITIES

As enumerated in Table #, the taro starch of DMP Gaway Starch will be the

very first taro starch in District or possibly in whole Region VIII. Due to low start-

up cost, simple design and market growth, it can be expected to have a fast growth

once the product hits the market because also of its very competitive price. With

this, many organizations and potential investors will support and contribute in the

production of the taro starch. In the same manner, many customers, will be attracted

with the new concept of the product.

Also, many job opportunities can be provided to the people around the area

of the industry, local markets and farmers for the taro who will supply DMP’s

Gaway Starch Industry. To summarize, taro starch will be an opportunity to the

agricultural and manufacturing sector, unemployment, and the environment. Thus,

the product will fit well into the industry because it could fit into multiple niche

markets and will be able to compete with the competitors because of the price and

simplicity.

 THREATS

In this area, the main threat of taro starch is the existing starches offered in

the market for a very long year. The industry is new to the market, as well as its

product. Customers’ perception about taro made product is one of the most difficult

to change and will become one of the top challenges that attracts loyalty of the

customers.
 52

Primarily, there will be limited or insufficient number of suppliers because of being

new at the market which might affect the production process. As other industry

joins the market, price erosion and the supplier dependence are possible. If the

supplier of DMP Gaway Starch Industry starts to demand more money, it will be a

problem to look for other suppliers.

Marketing Strategies

Figure 4. Marketing Strategy Model of DMP Manufacturing

Effective marketing techniques are crucial for both business-to-business (B2B) and

customer sectors, and we, at DMP Company, are aware of this. To increase reach and

engagement, our integrated strategy combines targeted approaches with individualized

message, eventually resulting in growth and success for our customers.

We provide our clients a holistic strategy to enhance their marketing efforts by

combining B2B and customer marketing methods. Our staff at DMP Company is dedicated

to producing quantifiable results and fostering development in today's competitive

industry, whether their goals are to create solid B2B alliances or increase client loyalty.
 53

g. Factors Affecting the Market

Product

The name of the product is taro starch. It will be introduced to the areas of

Leyte District I to know the demand of the consumers. The team will let the

respondents to try the product in order to witness the legitimacy of taro starch, and

at the same time, it will give us the benefit of having the idea on how to improve

and innovate the imperfections of the products (if there is a present imperfection's

detected). In this case, we will also have the basis if the product will be produced

right after the analysis and computation of the gathered data.

Price

Consumer demand is important; however, price should also be considered.

The price of the product will depend on the expenses/cost of production, the

competitors, and on the target market of the product. That is why the product’s price

will be based on the calculation of all the gathered data.

Thus, the team had formulated an idea to make a survey about the

competitors and the customers’ preference, and the team will calculate all the cost

of production. This will help the team to formulate an amount of pricing according

to the calculations (see Production Cost, page).

Table 8. Comparative Pricing per 250g (Php)

Cornstarch Potato Starch Cassava (Tapioca) Starch DMP’s Gaway Starch

31.95 35.25 25.96 28.50
Note: Competitor’s Price is based on retail price
 54

On the table above show that DMP’ Gaway Starch is at retail price of Php

28.50, which put as 2nd most affordable price among competitors. This would entail

that the product is at edge not only in terms of its availability of raw material and

abundance of nutrients but also into pricing strategy. The company used cost-based

pricing in the determination of price of the product.

Place

The distribution of the DMP Gaway starch will be direct to retailers, where

the delivery transportation of the company will transport the products from the

manufacturing plant to the selected retailers across the market coverage.

Figure 5: Distribution Channel of DMP Manufacturing Plant

Promotion

Having a strategy to promote the product is one of the priorities of the team.

Since the team is flexible enough to engage with e-commerce and physical industry,

it had come up with the idea to introduce the product in both ways. The team will

give introductory offers such as flyers, social media posts, or physical word of

mouth; also, the team will post samples for those interested consumers who want

to try the product, and lastly, the team will try to engage with digital marketplace

to spread the product’s existence.

 55

o Flyers and Posters

The flyer and posters are some of the most versatile, effective, and

cost-effective marketing tools. Businesses have been promoting their

products, services, and special offers through this sort of marketing for a

long time. By distributing these, the business can inform potential clients

about the products. This contains information about the products, a phone

number, and the company's address.

o Tarpaulin and Signages

Using signage and tarpaulins that can clearly portray your message

is one of the most efficient ways to reach your target audience. Signs and

tarpaulins can be utilized to successfully alert people to goods or service

that they might not have known that it existed otherwise. This strong ability

to stick in people's thoughts can be quite beneficial for small-to-medium

enterprises looking to increase brand awareness. More information about

the goods will be retained and remembered by the customer as they can read

or view more text or an image.

o Digital Marketing

This is the current trend where it is the promotion of brands to

connect with potential customers using the internet and other forms of

digital communication. This includes not only email, social media, and

web-based advertising, but also text and multimedia messages as a

marketing channel.
 56

Furthermore, the following table shows the marketing budget for the

company’s promotional activities and efforts. The budget is one time only until

supply lasts.

Table 9. DMP Manufacturing Marketing Budget

Promotional Tools
Tarpaulins (4 pcs. including installation, and fees) ₱4,000.00

Signage (3 pcs. including installation) ₱6,000.00

Flyers (bundle printing and labor cost) ₱15,000.00
TOTAL ₱25,000.00

h. Projected Sales

The projected sales will be based on the proposal capacity if production

sales are multiplied by the price of the product of the total volume of production,

100% of the output will be filled for 250g packs, the table below shows the

projected sales for 5 years.

Table 10. Quantity 250g packs of Taro Starch Produced per Year

Taro Starch Year 1 Year 2 Year 3 Year 4 Year 5

250g 1,684,803 1,769,043 1,857,495 1,950,370 2,047,888

Table 11. Projected Sales

Production Year 1 Year 2 Year 3 Year 4 Year 5

Volume (kg) 898,560 898,560 898,560 898,560 898,560
Selling Price 28.66 28.63 28.51 28.40 28.29
No. of
1,684,803 1,769,043 1,857,495 1,950,370 2,047,888
250g packs
Annual Gross
43,455,893.18 49,920,986.53 52,639,017.07 55,092,260.07 57,626,347.35
Sales (Php)
*Note: Selling price of Taro Starch will increase based on production volume.
 57

Table 11 indicates that the production volume remains consistent at 898,560 kg

throughout the years. The selling price shows a slight decline over time, with Year 1 at

28.66 Php and Year 5 at 28.29 Php. Despite the slight decrease in selling price, the table

demonstrates a steady growth in annual gross sales, with figures ranging from

43,455,893.18 Php in Year 1 to 57,626,347.35 Php in Year 5. Researchers analyze that

there is a positive trend in sales performance over the projected period, likely driven by

factors such as market demand and effective pricing strategies for the taro starch.
 58

TECHNICAL STUDY

A. The Product

The name of the product is DMP Gaway Starch. The product will be available in a

250g starch packs. The product is a specialty starch that is produced from taro. The texture

of the product is dull white in color, DMP Gaway Starch is stiff in texture and somewhat

sweet in taste. High in fiber, this flour contains more carbohydrates but less protein than

common starches.

Figure 6. Taro Starch Sample Nutritional Facts

The product will be an all-purpose starch that helps with texture, viscosity, gel

formation, adhesion, binding, moisture retention and can be used as a fat substitute. It also

can be used as an emulsifier, stabilizer, and a clouding or glazing agent. However, its main

use is a thickening agent for food. It holds moisture well, brings a richness of flavor, and

aside from their basic nutritional uses, starches are used in brewing and as thickening

agents in baked goods and confections. It also can be used for laundry, as locally term
 59

(gawgaw) as thickening for bedsheets and throw pillows. The following figure shows the

product design of DMP Gaway Starch.

Figure 7. DMP Gaway Starch Packaging

B. Production/Manufacturing Process

The process of taro production starts with preparation of the taro roots. From the

supplier, the roots will be delivered to the storage room for raw materials. Taros need to be

stored in a cool, dry, well-ventilated container to last taro roots up to six months. Before

processing them, wash and weigh the roots. The manufacturing process of Taro Starch is

divided into a series of operations shown below:

 60

Table 12. Process Flow & Description of DMP Manufacturing Plant

Process Description

Taro roots will be received from suppliers. Upon receiving, the

quality control officer will get a sample to test if they are in good
Storage
condition and will be accepted by the plant. If accepted, it will be
stored in a room and be ready for production.

To start the production, a worker will get taros the storage room and
Peeling
transport it to the production area by using a trolley. The raw material
will be manually put to the peeling machine. In this process, these
taro roots will be peeled at the same time cut into pieces to be ready
Cutting for the next process.

The cut taro will be added with water since it is gluten- free and now
Grinding be grinded to breakdown into gluten and starch components as to be
formed as slurry. After passing through a grinding, the taro particles
are caught in the screen while the starch will pass through. Any left
Wash
taro particles are later used to make animal feeds as to solid waste
Screening
management practice.

Steaming The slurry will next be processed to steaming acting as centrifugation

as the water and starch are completely separated. The water will be
Separation disposed, and the left wet starch will be prepared for drying.

The wet starch will be put into a drying machine to rid out the
Drying
moisture and attain the level of dryness, achieving the powder texture.
Once dried, the powdered taro starch will be further refined in a
Refining reefing process to attain the finer particles and cool down prior into
packaging.
When the taro starch is completely cooled and inspected, it will now
be packed manually with the product’s name, list of ingredients, and
Packaging expiration date. The packaging material used is polypropylene. A
quality inspector will check if the measurement is correct and if
package is with a good seal.

Storage and After the product packaging, it will be stored and be ready to be
Distribution shipped to the market.
 61

Figure 8. Process Chart of Taro Starch

Table 13. Process Experimentation

Sample 1 Sample 2 Sample 3

Qty. Qty Qty
Volume Volume Volume
Phase Procedure of Time of Time of Time
of of of
Taro (in Taro (in Taro (in
Water Water Water
(in mins) (in mins) (in mins)
(in L) (in L) (in L)
kg) kg) kg)
Begin by
thoroughly washing
the taro roots under
1. Washing 2.133 5.254 4.57 2.133 3.3 5.23 2.133 4.305 5.15
running water to
remove any dirt or
debris. This will
 62

ensure that the

starch extracted is
clean and pure.
Use a knife or a
vegetable peeler to
remove the outer
skin of the taro
2. Peeling roots. Make sure to 1.544 3.804 6.91 1.544 2.85 7.57 1.902 2.855 7.49
remove all the skin,
as it is not used in
the starch extraction
process.
Take the peeled taro
roots and grate
them using a fine
grater or a food
3. Grafting 1.094 3.022 3.68 1.094 2.068 4.34 1.452 2.073 4.26
processor with a
grating attachment.
Grate the taro into
small, fine shreds.
Transfer the grated
taro into a blender
or a food processor.
Add enough water
to create a slurry-
like consistency.
4. Blending 1.004 2.902 7.87 1.004 1.948 8.53 1.362 1.953 8.45
Blend the mixture
for a few minutes
until the taro shreds
are broken down
further, releasing
more starch.
Pour the blended
taro mixture into a
large bowl. Allow it
to settle for a few
minutes, during
5. Separation 1.124 1.782 4.53 1.124 0.828 5.19 1.482 0.833 5.11
which time the
starch will begin to
separate from the
water and sink to
the bottom.
Starch Appearance
Carefully pour off
the water from a
6. Sublimation bowl, leaving 0.732 22.76 0.778 20.42 0.783 17.34
behind the settled
starch at the bottom.
Once the water has
been poured off, use
a fine-mesh strainer
to separate any
remaining water
7. Separation 0.724 0.659 2.64 1.004 0.700 2.32 1.082 0.705 0.98
from the starch.
Gently press the
starch against the
strainer to remove
excess moisture.
Spread the
separated starch
onto a flat surface,
such as a baking
sheet or tray. Allow
8. Drying it to air dry in a 0.664 - 59.88 0.944 - 55.54 1.022 - 51.46
well-ventilated area
for several hours or
until it becomes
completely dry.
This will remove
 63

any remaining
moisture from the
starch.

Once the starch is

completely dry, use
a grinder equipment
to grind it into a
9. Grinding 0.644 9.98 0.788 7.93 1.0 5.15
fine powder, thus,
to ensure a smooth
and consistent
texture.
Total 18.155 122.82 12.472 117.07 13.507 105.39

Table 14. Sample of Evaluation

Sample Taro Roots Starch Vol of Water Lead Time Remarks
1 2.133 kg 0.64 kg 18.16 L 122.82 mins -
2 2.133 kg .79 kg 12.47 L 117.07 mins -
3 2.133 kg 1.0 kg 13.51 L 105.39 mins Desirable

Analysis based on the Three Samples Evaluation

Researchers provide sample evaluation, on Table 2, of homemade taro root into

starch, three different samples were analyzed and compared. In Sample 1, with 2.133 kg of

taro root, 0.64 kg of starch was obtained in 18.16 liters of liquid, taking approximately

122.82 minutes. Sample 2 yielded 0.79 kg of starch from the same amount of taro root,

with 12.47 liters of liquid, and the process took about 117.07 minutes. However, it was

Sample 3 that stood out as the most desirable option. With 2.133 kg of taro root, 1.0 kg of

starch was obtained in 13.51 liters of liquid, and the process was completed in 105.39

minutes. This sample showcased a higher starch yield compared to the other two samples,

while also requiring less liquid and a shorter processing time. Therefore, based on these

results, sample 3 appears to be the most favorable in terms of starch production efficiency.
 64

C. Plant Size and Production Schedule

A total of 600 sqm will be occupied by the proposed project based on the

dimensions of the facilities and machineries in the proposed manufacturing plant. The

average maximum annual capacity is 1,684,803 packs of taro starch or 898,560 kg. The

plant will operate in one (1) shift on an eight-hour work period in six (6) days operation.

The production is assumed to increase annually as the demand also increases. Furthermore,

the plant will increase its production volume at approximately 5% yearly with and optimal

plant utilization of 45.51% in 5-year production range. Table below shows the annual

production capacity of the plant.

In terms of maintenance and reliability, DMP Manufacturing Plant will benchmark

the standard maintenance procedure of known flour manufacturing companies which is bi-

monthly. This means that every two months, a maintenance shutdown will observe to

allocate repairs of any machine breakdowns, cleaning of pipe, seepage of septic tank,

deodorizing the machines, tightening the screws, jigs, and bearings and other more

maintenance measures in order to ensure productivity of the company. In every

maintenance shutdown, there will be change shift of the workers direct to taro production

as rotation. Meanwhile the workers in the management will work routinely from 8AM –

5PM, Mondays to Saturdays with 12nn – 1pm as lunch break. For workers in production,

breaks will be 30 minutes per 2-hour interval, thus 9:30 – 10:00AM and 3:00 – 3:30PM.

This applies to middle management personnel as well who are directly assigned to the

production line such as production supervisor and quality control engineer.

 65

Table 15. Expected Annual Production

Kg of Unit
Volume of Taro Percentage
Taro per Price of Raw
Year Production Required in of
Kilo of Taro Materials
(in kgs) kgs Utilization
Starch per kg
2024 421,200.66 2.1333 898,560.00 20.65 18,554,854.93 44.45%
2025 442,260.69 2.1333 943,488.00 20.65 19,482,597.68 44.92%
2026 464,373.73 2.1333 990,662.40 20.65 20,456,727.56 45.45%
2027 487,592.41 2.1333 1,040,195.52 20.65 21,479,563.94 46.04%
2028 511,972.03 2.1333 1,092,205.30 20.65 22,553,542.14 46.69%
Average Utilization Rate 45.51%

Table 16. Production Schedules

WORKERS MON TUE WED THU FRI SAT SUN
MORNING SHIFT (7:30 AM – 5:30 PM)
Production Workers 8 8 8 8 8 8 0
Production Quality
2 2 2 2 2 2 0
Inspector
Utility Worker 1 1 1 1 1 1 0
Logistics Personnel 2 2 2 2 2 2 0
Production Supervisor 1 1 1 1 1 1 0
Quality Control Engineer 2 2 2 2 2 2 0
REQUIRED 16 16 16 16 16 16 DAY-OFF

D. Raw Materials and Supplies

The main supply of the proposed project, which is taro, will be purchased from

direct local farms across the whole Region VIII. Taro is ranked 3rd as having the greatest

number of crops produced in the region, especially in Eastern Samar. Thus, availability of

raw material is a feasible criterion where to have a steady supply of raw material for the

plant. A kilo of taro would need 2.133 kgs of raw material at 97.09% average production

capacity. This entails a need of 74,880 kgs to taro starch to produce per month that will

create 1,684,803 packs of 250g.

 66

Fresh taro roots will be supplied directly from the farmers and will be delivered to

the plant for processing and afterwards, the outputs will be delivered to selected retail of

every municipality of District 1 and Tacloban City. The company will also accommodate

walk- in suppliers as for buffer stock. Daily requirement is 2,880 kgs of taro, in which, the

company truck can payload up to 6000 kg, thus frequency of purchase is every 2 days from

the local farmers (Tuesday, Thursday, Saturday), and thus, the distribution frequency is

every other day from the purchasing days (Monday, Wednesday, Friday).

Table 17. Monthly Raw Materials Needed

RAW MATERIAL COST
Raw Material Unit Cost (₱) Quantity Monthly Cost (₱) Annual Cost (₱)
Taro (Gaway) 20.65 74,880 1,546,237.91 18,554,854.93
Table 18. Inventory Analytics

Taro
Average daily unit raw material used 360 kg of Taro
Delivery lead time 2 days
Economic Order Quantity 407 kg of Taro Starch
Safety stock 205 kg of Taro Starch
Re-order point (ROP) 914 kg of Taro Starch

Table 19. Annual Inventory of Production Supplies

Production Materials
Item Quantity Unit Price Total Annual Cost
Personnel
Uniform 50 pieces ₱350 ₱17,500.00 ₱17,500.00
Rubber Shoes 30 pairs ₱120.00/pair ₱3,600.00 ₱3,600.00
Coat 1 Bundle (20pcs) ₱3,800.00/bundle ₱3,800.00 ₱3,800.00
Apron 1 Bundle (20pcs) ₱2,000.00/bundle ₱2,000.00 ₱8,000.00
Gloves 2 Boxes (1,000) ₱1,800.00/box ₱3,600.00 ₱43,200.00
Hair Net 2 Box (1,000) ₱1,600.00/box ₱3,200.00 ₱38,400.00
Packaging (replenish every 3 months)
Packaging Bag 105.3 mt ₱2.12/bag ₱217,800.00 ₱892,800.00
Total Cost ₱ 1,014,500.00
 67

Table 20. Annual Inventory of Office Supplies

OFFICE MATERIALS
Item Quantity Unit Price Total Annual Cost
Replenish every 3 months
Bond Paper 3 reams ₱190.00/ream ₱2,280.00 ₱9,120.00
Ink 6 bottles ₱250.00/bottle ₱6,000.00 ₱24,000.00
Ballpen 3 boxes (100pcs) ₱72.00/box ₱864.00 ₱3,456.00
Clumps 3 boxes (60pcs) ₱50.00/box ₱600.00 ₱2,400.00
Folder 50 packs ₱4.00/pack ₱800.00 ₱3,200.00
Stapler Staple 15 pieces ₱75.00/piece ₱4,500.00 ₱18,000.00
Wire 60 boxes ₱7.00/box ₱1,680.00 ₱6,720.00
Total Cost ₱ 66,896.00
Table 21. Maintenance and Sanitation Supplies

Item Quantity Unit Cost Amount

Broom 4 ₱50.00 ₱200.00
Utility Mop 2 ₱105.00 ₱210.00
Dustpan 4 ₱65.00 ₱260.00
Dishwashing Liquid 2 (1L/bottle) ₱50.00 ₱100.00
Sponge 10 ₱5.00 ₱50.00
Tissue Paper 15 ₱13.00 ₱195.00
Hand Sanitizer 5 (1L/ bottle) ₱85.00 ₱425.00
Trashcan 6 ₱960.00 ₱5,760.00
Total Cost ₱7,200.00

E. Machinery and Equipment

During equipment selection and installation, adequate consideration and provision

must be given to ease of machine, floor and plant cleaning. Ample space should be

available for movement of workers and for prevention of microbial or physical cross-

contamination of final products, and prevention of personal injury.

The plant is supposed to be supplied with modern equipment known to have the

highest quality production efficiency. DMP Manufacturing Plant will have a few of
 68

machineries and equipment which are all made from stainless steel for their first few years

of operation until the cash payback period.

Table 22. List of Machines

Machine Image Quantity Unit Price Total Price

Peeling and
Cutting 1 ₱134,620.55 ₱134,620.55
Machine

Wash
Screening 1 ₱187,457.00 ₱187,457.00
Machine

Grinding
1 ₱11,730.14 ₱11,730.14
Machine

Heater and
Dryer 1 ₱120,195.75 ₱120,195.75
Machine

Refining
1 ₱389,102.00 ₱389,102.00
Machine

Total Cost ₱ 843,105.44

Note: Based on 500kg of starch machine capacity (MRU = 360kg/450kg = 80%)
 69

Table 23. Annual Depreciation Cost of Machines

USEFUL RESIDUAL
MACHINE PRICE DEPRECIATION MONTHLY
LIFE VALUE (10%)
Wash Screening
₱187,457.00 20 ₱18,745.70 ₱8,435.57 ₱702.96
Machine
Peeling & Cutting
₱134,620.55 20 ₱13,462.06 ₱6,057.92 ₱504.83
Machine
Boiling Machine ₱11,730.14 20 ₱1,173.01 ₱527.86 ₱43.99
Boiler & Dryer
₱120,195.75 20 ₱12,019.58 ₱5,408.81 ₱450.73
Machine
Grinding Machine ₱389,102.00 20 ₱38,910.20 ₱17,509.59 ₱1,459.13
₱843,105.44 ₱37,939.74 ₱3,161.65

Table 24. List of Equipment

EQUIPMENT PRICE QUANTITY TOTAL COST
Generator ₱116,154.00 1 ₱116,154.00
Office Aircon ₱8,600.00 5 ₱43,000.00
Trash Bin ₱2,000.00 20 ₱40,000.00
CCTV Camera ₱20,000.00 20 ₱400,000.00
CCTV Monitor ₱14,850.00 3 ₱44,550.00
Emergency Kit Cabinet ₱1,500.00 2 ₱3,000.00
Fire Extinguisher ₱12,500.00 10 ₱125,000.00
Fire and Smoke Detector ₱340.00 15 ₱5,100.00
Weighing Scale ₱1,350.00 1 ₱1,350.00
Pushcart Trolley ₱14,550.00 12 ₱174,600.00
Packaging Sealer ₱4,000.00 16 ₱64,000.00
Office Computer ₱21,000.00 6 ₱126,000.00
Printer ₱7,000.00 3 ₱21,000.00
₱223,844.00 ₱1,163,754.00

Table 25. Annual Depreciation of Equipment

USEFU RESIDUAL
EQUIPMENT PRICE DEPRECIATION MONTHLY
L LIFE VALUE
Generator ₱116,154.00 10 ₱11,615.40 ₱10,453.86 ₱871.16
Office Aircon (5) ₱8,600.00 10 ₱860.00 ₱774.00 ₱64.50
Trash Bin ₱2,000.00 10 ₱200.00 ₱180.00 ₱15.00
CCTV Camera
₱20,000.00 10 ₱2,000.00 ₱1,800.00 ₱150.00
(20)
CCTV Monitor
₱14,850.00 10 ₱1,485.00 ₱1,336.50 ₱111.38
(3)
 70

Emergency Kit
₱1,500.00 10 ₱150.00 ₱135.00 ₱11.25
Cabinet (2)
Fire Extinguisher
₱12,500.00 10 ₱1,250.00 ₱1,125.00 ₱93.75
(10)
Fire and Smoke
₱340.00 10 ₱34.00 ₱30.60 ₱2.55
Detector (15)
Weighing Scale ₱1,350.00 10 ₱135.00 ₱121.50 ₱10.13
Pushcart Trolley ₱14,550.00 10 ₱1,455.00 ₱1,309.50 ₱109.13
Packaging Sealer ₱4,000.00 10 ₱400.00 ₱360.00 ₱30.00
Office Computer
₱21,000.00 5 ₱2,100.00 ₱3,780.00 ₱315.00
(6)
Printer (3) ₱7,000.00 5 ₱700.00 ₱1,140.00 ₱95.00
Total Cost ₱223,844.00 ₱22,545.96 ₱1,878.83

Table 26. List of Transportation

VEHICLE QUANTITY UNIT PRICE TOTAL PRICE

Delivery Truck 1 ₱1,250,000.00 ₱1,250,000.00

Total Cost ₱1,250,000.00

Table 27. Annual Depreciation of Transportation

USEFUL RESIDUAL DEPRECIA-
VEHICLE PRICE MONTHLY
LIFE VALUE TION
Delivery truck
(6,000 kg ₱1,250,000.00 20 ₱125,000.00 ₱56,250.00 ₱4,687.00
payload)
Total Cost ₱56,250.00 ₱4,687.00

To reduce acquisition costs without compromising the quality of the products or

services, the company would strategically purchase machinery and equipment from direct

suppliers in Manila. Although less expensive than other points of sale from other nations,

freights should be anticipated.

 71

F. Plant Location

DMP Manufacturing Plant will be located at Brgy. Pawing, along Maharlika

Highway, Palo Leyte. This is a very strategic location for the business considering that it

is along the highway that makes it accessible to potential customers, suppliers and workers.

This location gives near access to basic utilities, such as electricity, water and fuel which

is advantageous. Since it is located along the road, distribution of raw materials from

suppliers and delivering of the final product is not difficult.

The location of the plant was chosen using the location evaluation approach, where

a number of characteristics, including accessibility, proximity to sources of supplies and

resources, cost, and ground moisture, were taken into account to identify the most attractive

and suitable location. The distance from the location to Tacloban City's downtown is

around 20 minutes. The planned location of the factory is convenient for access to

neighboring labor, power, enough quantity of water, and raw materials. The owner is ready

to sell the land, and the proposed site is affordable.

Location Evaluation Strategy

In order to weigh the factors under the two chosen locations, analysis is done based

on the cost of the land, distance between location A to identified suppliers and market,

distance between location B to identified suppliers and market and the distance to the main

road. The score is based on a rating from 1-5, where (1) is very poor, (2) is poor, (3) is

moderate, (4) is excellent and (5) is very excellent. Where:

Location A (Maharlika Highway, Brgy. Pawing, Palo, Leyte)

Location B (Brgy. 95 Caibaan, Maharlika Highway, Tacloban City)

 72

Table 28. Location Evaluation Strategy

Raw Site Score Weighted Score

Location Factor Weight Location Location Location Location
A B A B
Land Cost 25 4 3 100 75
Proximity to the market 15 4 3 60 45
Proximity to Supplier 25 4 3 100 75
Availability of Labor 10 4 4 40 40
Utilities 10 4 4 40 40
Accessibility 15 4 3 60 45
TOTAL 400 320

The proponents used the Location Evaluation Strategy to assess and evaluate the

top selected choices of the location. This method was used to know the exact and optimum

location of the company. As shown in the table above, location A, which is located at

Maharlika Highway, Brgy. Pawing Palo, Leyte, is the optimum choice for the location of

DMP Manufacturing Plant.

Figure 7. Location Map of DMP Manufacturing Plant

 73

G. Plant Layout

Plant layout must be considered very carefully because we do not want to constantly

redesign the facility. Some of the goals in designing the facility are to ensure a minimum

amount of materials handling, to avoid bottlenecks, to minimize machine interference, to

ensure high employee morale and safety, and to ensure flexibility. The layout will permit

an orderly flow of material through the plant during processing, give enough elbowroom

for workers during processing and the cleaning of equipment, and prevent cross-

contamination between raw materials and finished products. Interruptions in the sequence

of flow of raw material (taro) and intermediate products during processing will be minimal.

The position of the offices and rooms in the layout was identified with the help of

affinity diagram. The diagram was used in order to minimize travel time of the employees

and take consideration the relationship of each office. Below is representation of the

affinity diagram.
 74

Figure 10. Activity Relationship Diagram

The proportion of each rating indicates how many A, E, I, O, U and X should be placed in

a relationship diagram. Since there are 28 relationships in the diagram, hence the value of

each rating in the relationship diagram is:

Table 29. Activity Relationship Diagram Proportion

Rating Proportion
A&X 2
E 3
I 4
O 6
U 13
Total 28

To indicate the clones of the facilities and offices present in the plant, closeness

rating should be done. In identifying the closeness of each facility, it was assumed that,

A= 100, E= 80, I= 60, O= 40, U= 20, X= 0

To calculate the closeness rating, simply add the closeness rating value.
 75

Table 30. Total Closeness Rating (TCR)

DEPARTMENT A E I O U X TCR
Production Floor 1 2 2 0 1 1 420
Administrative Office 0 1 1 0 5 0 240
Quality Control & Maintenance Office 0 1 1 2 3 0 280
Plant Manager Office 0 0 1 5 1 0 280
Locker Room & Lounge Area 0 0 2 1 4 0 240
Comfort Room 0 0 1 1 4 1 180
Finished Goods (FG) Storage Room 0 1 1 2 3 0 280
Raw Material (RM) Storage Room 1 1 0 1 4 0 300

Each facility and offices are placed with respect to closeness priority, from highest

to lowest. The arrangement will be based on the closeness ratings. Based on the table above,

the first facility to be placed is the production area which is the highest TCR.

Table 31. Physical Arrangement

Rank Department
5 8
1 Production Floor
2 RM Storage
3 FG Storage 4 1 7 6
4 QC&M Office
5 Plant Manager Office 2 3
6 Administrative Office
7 Locker Room & Lounge
Area
8 Comfort Room

Therefore, the layout and arrangements of the departments of DMP Manufacturing

Plant is based on the TCR and the relationship rating which is the A, E, I, O, U and X.
 76

Figure 11. DMP Manufacturing Plant Layout

H. Facilities Design

DMP Manufacturing Plant will be having a one floor facility, as shown in the plant

layout with the inclusion of the Production Floor, Administrative Office, Quality Control

& Maintenance Office, Plant Manager Office, Locker Room & Lounge Area, Comfort

Room, Finished Goods (FG) Storage Room, and Raw Material (RM) Storage Room. The

plant will cover a 600 square meter, which is 40% of the total land area and has an estimated

building cost of ₱ 3,719,864.54 as shown in the bill of materials. The company will make

sure that the construction of the building will be of high quality as intended to its useful

life. The estimated cost for the land area is the following.

Land Cost: ₱ 2,500 per square meter

Land Area: 1,500 square meters
Cost: ₱ 3,750,000

The following are the building estimates for the construction of DMP

Manufacturing Plant.
 77

Table 32. Bill of Materials

Item 100 Clearing

A. Materials Quantity Unit Unit Cost Total
- - - - -
B. Labor Quantity No. of Days Rate/day Total
Construction Foreman 1 5 ₱500.00 ₱2,500.00
Skilled Worker 0 0 ₱300.00 -
Unskilled Worker 5 5 ₱260.00 ₱6,500.00
₱9,000.00
C. Equipment Expenses Quantity No. of Days Rate/day Total
- - - - -
Direct Cost ₱9,000.00
OCM 10% ₱900.00
Contractors Profit 8% ₱720.00
VAT 12% ₱1,080.00
Sub Total ₱11,700.00
Item 102 Excavation
A. Materials Quantity Unit Unit Cost Total
Safety Helmet 20 pcs. ₱280.00 ₱5,600.00
Gloves 10 pairs ₱400.00 ₱4,000.00
Shovel 10 pcs. ₱250.00 ₱2,500.00
₱12,100.00
B. Labor Quantity No. of Days Rate/day Total
Skilled Worker 1 5 ₱300.00 ₱1,500.00
Un-skilled Worker 5 5 ₱260.00 ₱6,500.00
₱ 8,000.00
C. Equipment Expenses Quantity No. of Days Rate/day Total
Backhoe (includes fuel &
1 3 ₱16,000.00 ₱48,000.00
lubricant)
₱48,000.00
Direct Cost ₱68,100.00
OCM 10% ₱6,810.00
Contractors Profit 8% ₱5,448.00
VAT 12% ₱8,172.00
Sub Total ₱88,530.00
Item 407 Concrete Works
A. Materials Quantity Unit Unit Cost Total
Portland Cement 790 bags ₱250.00 ₱197,500.00
Sand 43.9 cu.m. ₱650.00 ₱ 28,535.00
Gravel 3/4 87.6 cu.m. ₱1,200.00 ₱105,120.00
₱331,155.00
 78

B. Labor Quantity No. of Days Rate/day Total

Skilled Worker 4 40 ₱500.00 ₱ 80,000.00
Un-skilled Worker 15 40 ₱300.00 ₱180,000.00
₱260,000.00
C. Equipment Expenses Quantity No. of Days Rate/day Total
- - - - -
Direct Cost ₱591,155.00
OCM 10% ₱59,115.50
Contractors Profit 8% ₱47,292.40
VAT 12% ₱70,938.60
Sub Total ₱768,501.50
Item 404 Reinforcing Steel
A. Materials Quantity Unit Unit Cost Total
12mm dia. RSB 546 pcs. ₱250.00 ₱ 136,500.00
10mm dia. RSB 1,831 pcs. ₱140.00 ₱256,340.00
no. 16 G.I. tie wire 200 kg ₱75.00 ₱15,000.00

14" Steel Cutter Blade 200 pcs. ₱650.00 ₱130,000.00

₱ 537,840.00
B. Labor Quantity No. of Days Rate/day Total
Skilled Worker 3 30 ₱500.00 ₱ 45,000.00
Un-skilled Worker 10 30 ₱300.00 ₱90,000.00
135,000.00
C. Equipment Expenses Quantity No. of Days Rate/day Total
Electronic Bar Cutter 2 15 ₱350.00 ₱10,500.00
₱10,500.00
Direct Cost ₱683,340.00
OCM 10% ₱68,334.00
Contractors Profit 8% ₱54,667.20
VAT 12% ₱82,000.80
Sub Total ₱888,342.00
Item 704 Masonry
CHB Layering
A. Materials Quantity Unit Unit Cost Total
4" CHB 7,794 pcs. ₱14.00 ₱109,116.00
12mm dia. RSB 295 pcs. ₱250.00 ₱73,750.00
10mm dia. RSB 265 pcs. ₱140.00 ₱37,100.00
Portland Cement 336 bags ₱260.00 ₱87,360.00
Coarse Sand 25.1 cu.m. ₱850.00 ₱21,335.00
Sand 15.73 cu.m. ₱650.00 ₱10,224.50
Gravel 3/4 4.05 cu.m. ₱1,200.00 ₱4,860.00
 79

no. 16 G.I. Tie Wire 35 kg ₱75.00 ₱2,625.00

14" Steel Cutter Blade 10 pcs. ₱650.00 ₱6,500.00
Plastering
A. Materials Quantity Unit Unit Cost Total
Portland Cement 365 bags ₱260.00 ₱94,900.00
Fresh Sand 21.2 cu.m. ₱650.00 ₱13,780.00
₱461,550.50
B. Labor Quantity Unit Unit Cost Total
Skilled Worker 4 40 ₱500.00 ₱80,000.00
Un-skilled Worker 15 40 ₱300.00 ₱180,000.00
₱260,000.00
C. Equipment Expenses Quantity Unit Unit Cost Total
Electronic Bar Cutter 2 10 ₱350.00 ₱7,000.00
₱7,000.00
Direct Cost ₱ 728,550.50
OCM 10% ₱72,855.05
Contractors Profit 8% ₱58,284.04
VAT 12% ₱87,426.06
Sub Total ₱947,115.65
Item 1003 Ceiling Works
A. Materials Quantity Unit Unit Cost Total
2"x3"x10 Coco Lumber 389 pcs. ₱70.00 ₱27,230.00
1/4"x4'x8' Hardiflex 85 pcs. ₱500.00 ₱42,500.00
Assorted CW Nails 16.9 kg ₱75.00 ₱1,267.50
₱70,997.50
B. Labor Quantity No. of Days Rate/day Total
Skilled Worker 4 15 ₱500.00 ₱30,000.00
Un-skilled Worker 10 15 ₱300.00 ₱45,000.00
₱75,000.00
C. Equipment Expenses Quantity No. of Days Rate/day Total
- - - - -
Direct Cost ₱145,997.50
OCM 10% ₱14,599.75
Contractors Profit 8% ₱11,679.80
VAT 12% ₱17,519.70
Sub Total ₱189,796.75
Item 414 Formworks & Scaffolding
A. Materials Quantity Unit Unit Cost Total
1/4"x4'x8' Ord. Plywood 30 pcs. ₱350.00 ₱10,500.00
2"x3"Coco Lumber 150 bd.ft. ₱14.00 ₱2,100.00
 80

Assorted CW Nails 20 kg ₱75.00 ₱1,500.00

₱14,100.00
B. Labor Quantity No. of Days Rate/day Total
Skilled Worker 2 10 ₱300.00 ₱6,000.00
Un-skilled Worker 2 10 ₱260.00 ₱5,200.00
₱11,200.00
C. Equipment Expenses Quantity No. of Days Rate/day Total
- - - - -
Direct Cost ₱25,300.00
OCM 10% ₱2,530.00
Contractors Profit 8% ₱2,024.00
VAT 12% ₱3,036.00
Sub Total ₱32,890.00
Item 411 Painting
A. Materials Quantity Unit Unit Cost Total
Concrete Neutralizer 10 gals. ₱420.00 ₱4,200.00
Acrylic Latex Primer 20 gals. ₱680.00 ₱13,600.00
Acrylic Gloss Latex Paint
30 gals. ₱650.00 ₱19,500.00
(color Verify-premix)
Roller Brush w/ pan 6" 10 set ₱135.00 ₱1,350.00
4" Paint Brush 10 pcs. ₱65.00 ₱650.00
2" paint Brush 5 pcs. ₱40.00 ₱200.00
Sandpaper 50 ft ₱25.00 ₱1,250.00
₱40,750.00
B. Labor Quantity No. of Days Rate/day Total
Skilled Worker 4 20 ₱500.00 ₱40,000.00
Un-skilled Worker 15 20 ₱300.00 ₱90,000.00
₱130,000.00
C. Equipment Expenses Quantity No. of Days Rate/day Total
- - - - -
Direct Cost ₱170,750.00
OCM 10% ₱17,075.00
Contractors Profit 8% ₱13,660.00
VAT 12% ₱20,490.00
Sub Total ₱221,975.00
Item SPCL-4 Septic Vault
A. Materials Quantity Unit Unit Cost Total
Portland Cement 8 bags ₱260.00 ₱2,080.00
Fresh Sand 3 cu.m. ₱650.00 ₱1,950.00
Gravel 3/4 4 cu.m. ₱1,200.00 ₱4,800.00
10mm dia. RSB 32 pcs. ₱140.00 ₱4,480.00
 81

No.16. G.I. Tie Wire 10 kg ₱75.00 ₱750.00

4" CHB 74 pcs. ₱14.00 ₱1,036.00
₱15,096.00
B. Labor Quantity No. of Days Rate/day Total
Skilled Worker 2 10 ₱500.00 ₱10,000.00
Un-skilled Worker 4 10 ₱300.00 ₱12,000.00
₱22,000.00
C. Equipment Expenses Quantity No. of Days Rate/day Total
- - - - -
Direct Cost ₱37,096.00
OCM 10% ₱3,709.60
Contractors Profit 8% ₱2,967.68
VAT 12% ₱4,451.52
Sub Total ₱48,224.80
Item 1002 Plumbing
A. Materials Quantity Unit Unit Cost Total
Toilet Bowl with Flush 1 sets ₱6,500.00 ₱6,500.00
Floor Drain (4" x 4") 1 sets ₱63.00 ₱63.00
Water Faucet 2 sets ₱126.00 ₱252.00
4" dia. Sanitary Pipe Sch.
2 lgs. ₱365.00 ₱730.00
40
3" ф Orange Pipe (Storm
3 lgs. ₱175.00 ₱525.00
Drain)
2" Dia Sanitary Pipe Sch.
3 lgs. ₱147.00 ₱441.00
40
4" x 4" WYE 3 pcs ₱107.00 ₱321.00
3" x 2" TEE 2 pcs ₱77.00 ₱154.00
2" x 2" TEE 3 pcs ₱28.00 ₱84.00
4" x 90 deg. Elbow 2 pcs ₱52.00 ₱104.00
2" P-trap 1 pcs ₱54.00 ₱54.00
4" clean out 1 pcs ₱51.00 ₱51.00
4" End cap 2 pcs ₱49.00 ₱98.00
Solvent Cement 1 cans ₱141.00 ₱141.00
1" Slum Blue TEE 2 pcs ₱33.00 ₱66.00
1" x 90 deg. Elbow 3 pcs ₱31.00 ₱93.00
1" G.I. Pipe sch. 40 3 lgs. ₱795.00 ₱2,385.00
1" Union Patient 2 pcs ₱72.00 ₱144.00
1/2" Gate Valve 1 pcs ₱337.00 ₱337.00
Teflon Tape 5 pcs ₱22.00 ₱110.00
₱12,653.00
B. Labor Quantity No. of Days Rate/day Total
Skilled Worker 2 10 ₱500.00 ₱10,000.00
Un-skilled Worker 5 10 ₱300.00 ₱15,000.00
₱25,000.00
 82

C. Equipment Expenses Quantity No. of Days Rate/day Total

- - - - -
Direct Cost ₱37,653.00
OCM 10% ₱3,765.30
Contractors Profit 8% ₱3,012.24
VAT 12% ₱4,518.36
Sub Total ₱48,948.90
Item 1101 Electrical
A Materials Quantity Unit Unit Cost Total
14mm² Wire THHN
95 m. ₱160.00 ₱15,200.00
Stranded
Bulb Socket 25 pcs ₱15.00 ₱375.00
Duplex Convenience
12 pcs ₱259.00 ₱3,108.00
Outlet
DPA Panel, w/ main 60
AT, 1P 220V Brs. 3-
1 set ₱6,900.00 ₱6,900.00
15At,1P,220V CB; 2-
20AT,1P,220V CB
Pull Box (12 x 12 x 6)
1 pcs ₱950.00 ₱950.00
Plastic/ Metal
Meter 1 pcs ₱3,000.00 ₱3,000.00
Ground Rod 16mm ø x
1 pcs ₱1,200.00 ₱1,200.00
2.40 m.
Electric tape (big) 10 rolls ₱46.00 ₱460.00
4" x 4" junction Box w/
20 pcs ₱43.00 ₱860.00
cover
2" x 4" Utility box w/ cover 25 pcs ₱32.00 ₱800.00
Single Switch 25 pcs ₱170.00 ₱4,250.00
3-gang switch 12 pcs ₱260.00 ₱3,120.00
G.I. Tie Wire #16 3 pcs ₱79.00 ₱237.00
Tox & Screw #8 200 pcs ₱3.50 ₱700.00
₱41,160.00
B. Labor Quantity No. of Days Rate/day Total
Skilled Worker 2 10 ₱500.00 ₱10,000.00
Un-skilled Worker 5 10 ₱300.00 ₱15,000.00
₱25,000.00
C. Equipment Expenses Quantity No. of Days Rate/day Total
- - - - -
Direct Cost ₱66,160.00
OCM 10% ₱6,616.00
Contractors Profit 8% ₱5,292.80
VAT 12% ₱7,939.20
Sub Total ₱86,008.00
Item 403 Roof System Works
 83

A. Materials Quantity No. of Days Rate/day Total

Purlins 2 x 6 " x 20' 40 pcs ₱650.00 ₱26,000.00
Assorted CW Nails 20 dozen ₱75.00 ₱1,500.00
G.I Corrugated Sheet 36 pcs ₱420.00 ₱15,120.00
3" dia. Roof Gutter
8 pcs ₱150.00
Strainer ₱1,200.00
₱43,820.00
B. Labor Quantity No. of Days Rate/day Total
Skilled Worker 4 10 ₱500.00 ₱20,000.00
Un-skilled Worker 5 10 ₱300.00 ₱15,000.00
₱35,000.00
C. Equipment Expenses Quantity No. of Days Rate/day Total
- - - - -
Direct Cost ₱78,820.00
OCM 10% ₱7,882.00
Contractors Profit 8% ₱6,305.60
VAT 12% ₱9,458.40
Sub Total ₱102,466.00
Item 967 Tiling Works
A Materials Quantity No. of Days Rate/day Total
40x40cm Tiles 460 pcs ₱55.00 ₱25,300.00
Cement Mortar 7 bag ₱250.00 ₱1,750.00
White Cement 35 bag ₱70.00 ₱2,450.00
Adhesive 8 pcs ₱505.00 ₱4,040.00
₱33,540.00
B. Labor Quantity No. of Days Rate/day Total
Skilled Worker 2 15 ₱500.00 ₱15,000.00
Un-skilled Worker 5 15 ₱300.00 ₱22,500.00
₱37,500.00
Equipment Expenses Quantity No. of Days Rate/day
C. Total
- - - - -
Direct Cost ₱71,040.00
OCM 10% ₱7,104.00
Contractors Profit 8% ₱5,683.20
VAT 12% ₱8,524.80
Sub Total ₱92,352.00
Miscellaneous Expense (5%) ₱193,013.05
TOTAL PROJECT COST ₱3,719,864.54
 84

I. Utilities

Utilities pertains to the necessities of the plant needed to avail and use in order to

conduct operations. This entails overhead cost that is monthly consumable of the company.

The following table shows the matrix of utility usage of DMP Manufacturing Plant monthly

and annually. The company will resource on electricity, water supply, internet, and

gasoline for fuel.

Electricity

Electric power will be supplied by LEYECO II with consumption rate of ₱ 17.034

kw/h. The project is estimated to spend ₱34,068.00 monthly based on the electric

consumption of machineries and equipment, lighting fixtures and ventilation.

Water

The water supplier of the company will be Prime Water Leyte. The plant uses water

in the production process daily. With a minimum of ₱38 per cubic meter, the estimated

monthly water consumption will be ₱15,200.00.

Internet

The internet service provider will be PLDT with a monthly cost of ₱2,000 with 100

Mbps speed. This serves as the online communication both internal and external concerns

of the company.

Gasoline

At budget ₱68.31 per km, the estimated transportation cost will be ₱36,000.00

monthly. The 26 liters will be for the company car handled by Plant Manager, and the 500

liters is estimated for the 2 company trucks for supply and distribution.
 85

Table 33. Utilities Expense

Utility Consumption Unit price (₱) Monthly Annually

Electricity 2,000 Kw 17.034 kw/h 34,068.00 408,816.00
Water 400 cu. m. 38 cu. m 15,200.00 182,400.00
Internet 100 Mbps package bundle 2,000.00 24,000.00
Gasoline 526 L 68.44/L 36,000.00 432,000.00
Total 1,047,216.00

J. Waste Disposal

The company will mainly have the following waste:

1. Wastewater from production use;

2. Peeled Skin;
3. Slurry; and
4. Garbage from offices and Personnel Requirements.

When garbage is not properly disposed of, safety is constantly jeopardized. All

firms must adhere to correct waste disposal methods in order to avoid cost reduction in

total production costs, which leads to additional environmental deterioration. The

organization's legal responsibility to continually decrease waste and keep the working

environment safe for both employees and customers is garbage disposal.

The wastes of DMP Manufacturing Company are categorized as follows with its

corresponding method;

Taro Peels - can be used for fertilizer for farms or for planting new taros

Wastewater - waste will be handled in a sludge drying bed, where the water will be

utilized for irrigation and the sludge will be processed into fertilizer for farmers in

the surrounding region.

 86

Slurry – can be turned into an animal feed or if still good; it can be produced as

food jam (halaya).

Garbage - color-coding segregation container will be purchased, into which all

rubbish will be dumped separately based on categorization and for convenience of

collection based on the scheduled day and time.

DMP Manufacturing Plant will exercise proper disposal of these wastes. The

company will have practiced proper drainage of the wastewater produced from the wash

screening procedure. The process is organic thus the effluent is non-hazardous. The peeled

skins and slurry produced in the work in process will be disposed in a sack and later turn it

as animal feed or fertilizer by the utility worker at the end of production. Trashes will be

collected by the utility worker every day and be disposed in a garbage bin with adequate

segregation of biodegradable, non-biodegradable, recyclable and hazardous wastes as it

will be disposed by the garbage collectors of the City of Tacloban every week.

The company will practice proper 5S and 3R working environment methods to

further optimize the use of resources. Daily 5S is observed by the employees, and paper

recycling will be a must policy, as well as reusable plastics and bottles to conserve the

environment. During operations, the waste disposal process shall be carefully enforced.

This is to guarantee that all workers and operators follow and support waste management,

hence avoiding or minimizing accidents/incidents during operation. The management will

turn all conceivable wastes into resources that will increase the operation's efficiency. As

a result, DMP Manufacturing Company will follow all conventional waste management

norms and regulations.

 87

Table 34. Color-Coding Scheme for Garbage

Color of Garbage Bins Type of Garbage

Green Biodegradable Wastes
Blue Non-biodegradable Wastes
Yellow Recyclable Items (plastics and bottles)
Red Hazardous Wastes

K. Personnel Requirements

As a food processing industry, DMP Manufacturing Plant needs employees that can

commit to its goals and regulations. To achieve this, well -equipped employees are to be

hired. The following are the proposed number of employees to employ in respective areas.

Table 33 shows that there are three (3) classified departments in the establishment;

administrative department, production department, and quality control and maintenance

department, provided with a job description and several personnel per position.

Table 35. Labor Requirement

Position No. of Employees

Plant Manager 1
Administrative Department
Personnel Supervisor 1
Finance Supervisor 1
Administrative Staff 1
Marketing Staff 1
Logistics Personnel 2
Production Department
Production Supervisor 1
Production Quality Inspectors 2
Production Operators 8
Quality Control & Maintenance Department
Maintenance Supervisor 1
Quality Control Engineers 2
Utility Worker 2
 88

Delivery Personnel 2
Driver 1
Security Guard 2
Total 30

For administrative department: ten (10) positions are needed; plant manager (1),

personnel supervisor (1), finance supervisor (1), administrative staff (2), marketing staff

(1) and logistic personnel (4), a total number of nine (9) personnel required. In production

department: five (5) positions are needed namely, production supervisor (1), production

quality inspector (2), production operators (8), with a total number of eleven (11) personnel

required. Lastly on quality control and maintenance department: seven (7) positions are

needed; maintenance supervisor (1), quality control engineers (2), utility worker (2), driver

(3), and security guard (2), a total number of ten (10) personnel required. To sum up, there

will be twenty-two (22) positions with a total number of 30 personnel.

 89

L. Production Cost

The following table shows the production cost schedule of DMP Manufacturing

Plant, wherein, it determines the cost per unit of manufacturing of taro starch and price

determination of the product to the retail market. Mark up cost is 50% of total cost per unit.

Schedule 1. DMP Manufacturing Plant Production Costing

DMP MANUFACTURING PLANT

Production Cost
Particulars 2024 2025 2026 2027 2028

Units to be produced (packs) 1,684,803 1,769,043 1,857,495 1,950,370 2,047,888

Desired Beginning Inventory - 168,480 193,752 205,125 215,549

Total 1,684,803 1,937,523 2,051,247 2,155,494 2,263,438

Desired Ending Inventory 168,480.26 193,752.30 205,124.72 215,549.44 226,343.76

Units to be sold 1,516,322.37 1,743,770.72 1,846,122.48 1,939,944.93 2,037,093.81

Direct Materials 19,569,354.93 20,497,097.68 21,471,227.56 22,494,063.94 23,568,042.14

Direct Labor 1,542,991.48 1,620,141.05 1,660,644.58 1,702,160.69 1,744,714.71

Manufacturing Overhead 1,496,018.86 1,611,696.36 1,694,300.96 1,777,210.37 1,863,865.23

Total Variable
Manufacturing Cost 22,608,365.27 23,728,935.09 24,826,173.10 25,973,435.01 27,176,622.07

Variable Cost per Unit 13.42 13.41 13.37 13.32 13.27

Depreciation-Building 66,957.56 66,957.56 66,957.56 66,957.56 66,957.56

Depreciation-Machines and
Equipment 62,231.52 62,231.52 62,231.52 62,231.52 62,231.52

Insurance Premium 214,578.53 214,578.53 214,578.53 214,578.53 214,578.53

SSS, PhilHealth, PAG-IBIG 48,514.90 50,940.64 53,487.68 56,162.06 58,970.16

Utilities 1,047,216.00 1,099,576.80 1,154,555.64 1,212,283.42 1,272,897.59

Total Fixed Manufacturing
Cost 1,439,498.51 1,494,285.05 1,551,810.92 1,612,213.09 1,675,635.36

Fixed Cost per Unit 0.85 0.84 0.84 0.83 0.82

TOTAL COST PER UNIT 14.27 14.26 14.20 14.14 14.09

SELLING PRICE PER
UNIT 28.66 28.63 28.52 28.40 28.29
 90

MANAGEMENT AND ORGANIZATION STUDY

This chapter discussed the plant human resource requirements that will perform the

designated duties and responsibilities to utilize plant’s operations. Specifically, it contained

the form of organization, organizational chart, officers and key personnel and the project

timetable.

A. Form of Ownership

DMP Manufacturing will be the name of the business organization. The product

that the company makes is called “DMP Taro Starch,” a product defined by abundance and

sustainability.

The business will be structured as a general partnership, allowing each partner to

act independently, pool resources, reduce start-up costs, and streamline procedures. The

partners will devote an equal amount of time and money to the business, have complete

faith in each other's business judgment, and be ready to assume the risk of being totally and

personally liable for its debts and liabilities. Additionally, each partner should keep in mind

that there is no standard procedure for resolving partner disputes. That is, unless a specific

partnership agreement specifies otherwise, no one partner's decision should be deemed to

be binding upon any other partner. As a result, it is essential to build a robust decision-

making strategy within the firm.

To launch the company lawfully, Gaway Manufacturing will apply for business

licenses and licenses from the appropriate government bodies. The company will apply for

a Certificate of Registration (COR) and TIN at the Bureau of Internal Revenue, register the

company name with the Securities and Exchange Commission (SEC), receive a pre-
 91

registered Taxpayer Identification Number (TIN), receive barangay clearance, pay the

annual community tax and obtain the Community Tax Certificate (CTC) from the City

Treasurer's Office (CTO), obtain the business permit to operate from the Business Permit

and Licensing Office (BPLO), and obtain bar (PAG-IBIG).The product will also be

registered in Food and Drugs Administration (FDA) to ensure the food safety and quality

standards.

B. Registration and Licenses

Security Exchange Commission (SEC)

The organization will be registered in the Security Exchange Commission (SEC).

Verification and reservation of the partnership name will be done in SEC. Accomplishment

Registration data sheet of partnership will be given and followed by the filing of complete

documents with the SEC. Filing fees and other requirement fee will be given to SEC upon

registration of the partner.

Building Permit

For the construction of the building. The organization will get its building permit

to the City Engineering Office. Building Permit Forms, Electrical Permit Forms, Sanitary

Permit Forms, complete sets of Detailed Plans, Proof of Property and Permit Billboard with

the following content: Bill of Materials and Specification (5 copies) — signed and sealed

by an engineer or an architect at every page Locational Clearance Photocopy of PTR # and

PRC license of all concerned engineers and architects will be submitted for the issuance of

building permit.
 92

Leyte Electric Cooperative II (LEYECO II)

For the electrical supply of the plant, the organization will register in LEYECO II

for the electricity. Upon registration Brgy. Clearance, ID photos, Valid IDs will be

submitted to the office of Leyeco II. Payment for connection will be given to the said office.

Leyte Metropolitan Water District (LMWD)/ Prime Water

Registration for water supply will be done in Leyte Metropolitan Water District or

also known as Prime Water. During the registration, the proponents will submit Brgy.

Clearance, ID photo, community tax certificate. Payment for inspection and seminar will

also be given to the said office.

Fire Safety Inspection Certification

The building used by the organization will be inspected by the bureau of Fire

protection to certify that the building is safe from fire.

Mayor’s Business Permit

Upon Registration, the organization will secure a Business Permit to the Business

Permit Licensing Division (BPLD) of the city. Barangay Clearance for the barangay,

location clearance from the office of planning and development, Fire Safety Inspection

Certificate and photocopy of certificate of registration from SEC will be presented to the

BPLD for the issuance of the Mayor’s Permit.

Food and Drugs Administration (FDA)

The organization will register in Food and Drugs Administration (FDA) for the

license to operate and for registration of the product. For the license to operate, a petition
 93

form and joint affidavit of undertaking will be submitted to the FDA. The company will

also attend a seminar on license of establishment. Additional documents such as proof of

registration, proof of occupancy of business address and floor plan and vicinity map will

also be submitted to the FDA office. For the registration of the product. Application form,

license to operate form from the FDA, Product labels, Product documents, Certificate of

analysis and Product sample will be submitted to the FDA office.

Bureau of Internal Revenue (BIR)

The organization will be registered in the Bureau of Internal Revenue (BIR) and

will get Tax Identification Number. A form for partnership will be submitted together with

the other documents of partners, a business permit from the issued by the Mayor, certificate

of registration from SEC and community tax certificate will be given to BIR as the

requirements for registration and TIN.

Sanitary and Health Permit

To ensure that the company and its employees are clean, safe and healthy, the

organization will get a Sanitary and Health permit from the City Health Office. The plant

premises will be inspected, and employees will undergo physical examination.

Department of Trade and Industry (DTI)

The Organization will register the name of the business in Department of Trade and

Industry in accordance with the law. Documents such as Accomplishment registration Data

Sheet, Article of Partnership and other needed documents will be summited to DTI for the

registration.
 94

Social Security System (SSS)

As mandated by the government, the company will register its employees in Social

Security System, also known as SSS. A copy of Employer Registration (R1), Employment

Report (R-1A), SEC registration and original copy of article of partnership will be

submitted to SSS.

PAG-IBIG Fund

The organization will register its employees to Home Development Mutual Fund

as mandated by the government. Upon registration, Accomplishment Membership

Registration (M1-1), Employer Data Record, Business permit, SEC registration, SSS

Registration and Remittance form will be submitted to the office of Home Development

Mutual Fund.

Philippine Health Insurance (Phil-Health)

In accordance to the Republic Act 7875, which is called the National Health

insurance Act of 1995, the company will register in the Philippine Health Insurance also

known as Phil-Health. The company will submit Employer Data Record or ER1 form and

business permit as a requirement for registration.

Table 36. Licenses and Permits Breakdown of Costs

Licenses & Permits Cost

Security Exchange Commission (SEC) ₱400.00
CEDULA ₱75.00
Barangay Clearance ₱1,000.00
Bureau of Internal Revenue (BIR) ₱1,000.00
Building Permit ₱3,000.00
Fire Safety Inspection Certification ₱1,340.00
 95

Sanitary and Health Permit ₱615.00

Business Permit ₱2,000.00
Department of Trade and Industry (DTI) ₱500.00
Food and Drugs Administration (FDA) ₱6,900.00
TOTAL ₱18,075.00

NOTE: Assumed that the installation fee of LEYECO II and LMWD is covered in the Utility Cost.

C. Organizational Chart

The company's organizational chart is presented below. Owner, operation manager,

human resource manager, quality control manager, accounting manager, administrative

staff, safety officer, sales staff, production staff, maintenance staff, security staff, and a

corporate driver will make up the organization.

Figure 12. Organizational Chart of DMP Manufacturing

 96

D. Officers and Key Personnel

For the plant to perform its designed operations, they will be needing enough

manpower. It is important that each employee knows and understands what his/her duties

and responsibilities are. Below are the job positions that the plant will be needing so as

with their qualifications and responsibilities.

Table 37. Manpower Requirements of the Plant

Position Job Qualification Job Specification

 At least a degree of BS
Management, Industrial
Engineering or equivalent
 Have at least 1 years of
experience in operation
management
 Excellent in oral and
written communication
skills
 Excellent computer skills
Plant Manager and proficient in word,
excel, access and outlook
 Male of Female
Personnel  Must be a graduate of BS
Supervisor Psychology or equivalent
 Formulates strategies
to improve business
performance
 Manages operation
process to ensure that
all operations are
carried on in a proper
and cost-effective
way
 Oversees inventory,
budget and managing
cost
 Oversees activities
on the production
personnel to ensure
effective and
efficient work
operation
 Is responsible for
recruiting, staffing,
training and
managing the human

 Good in both oral and
communication written
skills
 Excellent computer skills
and proficient in word,
excel, access and outlook
 With pleasing personality
 Male or Female
 Must be a degree holder of
Bachelor of Science in
Accountancy
 Hardworking and with
pleasing attitude
 Excellent computer skills
Finance
and proficient in word,
Supervisor
excel, access and outlook
 Must have at least 6-
month experience in
related field
 Must be college graduate
Logistics
or Industrial Management,
Personnel
97
resources of the
business
 Establishes all the
job position
description and
specification for
company recruitment
purposes
 Ensures personnel
and management
practices conform to
the company
regulation
 Keeps a detailed
record of the
company transactions
 Prepares balance
sheets, process
invoices, and record
accounts payable and
receivables
 Prepares monthly,
quarterly and annual
financial reports
 Executes financial
audits
 Tracks bank deposits
and payments
 Maintains a balanced
and minimal product
inventories to avoid
 98

Supply Chain, or any spoilage and

related field damages
 Has good communication  Maintains a good
and analytical skills quality product
 Keen in numbers and  Conducts product
knowledge in inventory is sampling for
a plus outgoing products
prior to distribution
 Keep distribution
channel in good
connection and stable
stocks distribution
 Concerns with
 At least a degree holder of designing and
business management, controlling the
engineering courses such process of production
as Industrial Engineering, and redesigning
Mechanical Engineering business operations
and Electrical Engineering in the production of
or any business-related goods or services
Production course.  Involves with the
Supervisor  Excellent in both oral and responsibility of
written communications ensuring that
skills business operations
 Preferably with experience are efficient in terms
on the job position of using as few
resources as needed
and effective in
meeting customer
requirements

 Must be a bachelor’s
degree in Chemical or
Production Food Technology or a
Quality science related field
Inspectors  Preferably with experience
in manufacturing or
production
 Male or Female
 Must be graduate in any
engineering courses
preferably Industrial
Engineering and Chemical
Quality Control Engineering
Engineer  Excellent computer skills
and proficient in word,
excel, access and outlook.
 Must have at least 6-
month experience in
related field
 Female
Administrative
 Must be graduate in any
Staff
business course
99
 Manages entire
production system
from (in the forms of
raw materials, labor,
and energy) into
outputs (in the form
of goods and/or
services), and until
product is delivers
 Primary responsible
in ensuring the
products quality and
the meeting the
standards set by the
company
 Ensures products
meet the quality set
by the company
 Makes a quality
inspection of raw
materials, prefinished
and finished products
 Performs clerical
work

 With pleasing personality
 Excellent computer skills
and proficient in word,
excel, access and outlook.
 Keen to detail
 Hard working
 Male/ Female
 At least bachelor’s degree
in accounting or finance
 With at least 1 year of
experience in related field
 Strong mathematical and
analytical skills
 Excellent computer skills
Budget
and proficient in word,
Officer/Cashier
excel, access and outlook
100
 Prepares
communication
letters to manager,
partners and to all
employees
 Handles office task
like creating reports
and presentations,
scheduling meetings
and reordering office
supplies
 Schedules
appointments
 Creates record and
report of the
employees’ working
hours and salaries,
sales, expenditures
and payments
 Manages and
prepares financial
records and
statements
 Checks of payroll
records
 Reconciling
accounts. Closing
monthly records and
reports. Handling
reimbursement

 Male or Female
 Must be graduate in any
business course
 With pleasing personality
 Excellent computer skills
and proficient in word,
Marketing Staff
excel, access and outlook.
 Must have at least 6-
month experience in sales
 Keen to detail
 Hard working
 Male or Female
 Should have certification
for medical and clinical
training
 Must have at least 6-
month experience on the
position
 Certificate in occupational
Maintenance health and safety
Supervisor  Experience in writing
reports and policies for
health and safety
101
 Is responsible in
dealing with business
transactions to clients
 Is responsible for
distributing, selling
and promoting in the
different potential
market
 Develops positive
relationship with the
customers
 Ensures that the
worker is following
the safety protocols
of the company
 Makes safety and
contingency plan for
the employees
 Is responsible in
giving trainings on
first aid to workers in
case of accidents
 Incorporates health
promotion strategies
to minimize the
accidents
 Creates accidents and
incidents report if
there it happens

 At least high school
graduate, college level or
vocational
 With least 6- month
experience is same
industry
 Has a knowledge in
Production
operating machines in the
Operators
production
 Keen to details
 Open-minded, honest and
can work with overtime
hours
 Hard working and
physically fit
 Male
 At least high school
graduate or college level
 With at least 1-year
experience
Security
 Hardworking and
physically fit
 Good Character
 Must have security license
102
 Prepares safety
manual and safety
protocols for the
company
 Conducts and create
risk assessment plan
 Operates different
skill processes in the
production
 Performs the record
process making of
the output products
 Secures the safety of
the establishment as
well as the workers
and employees
 Acts as the inspector
or checker and serve
as the information
personnel
 Patrols the vicinity
from time to time
 103

 Male  Responsible for the

 At least High School distribution of the
graduate or college level products to its
Driver  A licensed driver 2,3 and 4 customers, in the
 Clean driving record market or to any
 Must have at least 1 years retailing stores
in driving experienced
 Male / Female  Sweeps plant
 High School Graduate premises (office,
with diploma production and
 Have knowledge in outside building)
housekeeping  Empties trash bins
Utility Workers  At least 21 yrs. old and regularly
above  Checks electrical
appliances if unplug.
 Cleans and disinfects
toilet and washrooms
 Cleans windows

E. Project Timetable and Compensation Structure

The company will start its operations in January 2024. Hence, the year of 2023 will

be allocated on the feasibility of the company to the construction phase, recruitment and

selection of personnel with corresponding salaries, acquisition and procurement of

supplies, and other related activities to start a manufacturing plant. The following figures

show the compensation structure and project timetable for DMP Manufacturing in Gantt

Chart.
 104

2023 2024
Activities
Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Jan
1. Completion of a Project Feasibility Study
2. Business registration at the SEC
3. Application, processing and approval of
the business name, and necessary local
permits and licenses
4. Application, processing, approval, and
release of bank loan
5. Recruitment and selection of personnel
6. Intensive training of personnel
7. Site development, construction of
facilities and amenities
8. Acquisition of production and office
equipment
9. Publicity and promotional activities
10. Procurement of prospective suppliers
through a contract
11. Commencement of operations

Figure 11. Project Timetable of DMP Manufacturing

 105

Schedule 2. DMP Manufacturing Compensation Structure

Deductions
Net Annual
Position No. of Employees Daily Salary Cost Monthly Cost Annually SSS Philhealth Pag-Ibig Income Total
Pay
ER EE ER EE ER EE Tax Deduction
Plant Manager 1.00 1,750.00 45,500.00 546,000.00 578,264.15 3,353.35 3,353.35 682.50 682.50 100.00 100.00 9,100.00 13,235.85
Administrative Staff 2.00 420.00 21,840.00 262,080.00 281,782.79 804.80 804.80 163.80 163.80 100.00 100.00 - 2,137.21

Personnel Supervisor 1.00 750.00 19,500.00 234,000.00 251,670.35 1,437.15 1,437.15 292.50 292.50 100.00 100.00 - 1,829.65
Production Supervisor 1.00 750.00 19,500.00 234,000.00 251,670.35 1,437.15 1,437.15 292.50 292.50 100.00 100.00 - 1,829.65
Production Quality Inspector 2.00 400.00 20,800.00 249,600.00 268,355.04 766.48 766.48 156.00 156.00 100.00 100.00 - 2,044.96
Production Operators 8.00 380.00 79,040.00 948,480.00 1,019,709.15 728.16 728.16 148.20 148.20 100.00 100.00 - 7,810.85
Quality Control Engineer 2.00 750.00 39,000.00 468,000.00 503,340.70 1,437.15 1,437.15 292.50 292.50 100.00 100.00 - 3,659.30
Maintenance Supervisor 1.00 750.00 19,500.00 234,000.00 251,670.35 1,437.15 1,437.15 292.50 292.50 100.00 100.00 - 1,829.65

Utility Worker 2.00 380.00 19,760.00 237,120.00 254,927.29 728.16 728.16 148.20 148.20 100.00 100.00 - 1,952.71
Finance Supervisor 1.00 750.00 19,500.00 234,000.00 251,670.35 1,437.15 1,437.15 292.50 292.50 100.00 100.00 - 1,829.65
Marketing Specialist 1.00 420.00 10,920.00 131,040.00 140,891.40 804.80 804.80 163.80 163.80 100.00 100.00 - 1,068.60
Cashier 1.00 420.00 10,920.00 131,040.00 140,891.40 804.80 804.80 163.80 163.80 100.00 100.00 - 1,068.60
Logistics Personnel 2.00 450.00 23,400.00 280,800.00 301,924.42 862.29 862.29 175.50 175.50 100.00 100.00 - 2,275.58
Delivery Personnel 2.00 380.00 19,760.00 237,120.00 254,927.29 728.16 728.16 148.20 148.20 100.00 100.00 - 1,952.71

Driver 1.00 400.00 10,400.00 124,800.00 134,177.52 766.48 766.48 156.00 156.00 100.00 100.00 - 1,022.48

Security Guard 2.00 600.00 31,200.00 374,400.00 402,632.56 1,149.72 1,149.72 234.00 234.00 100.00 100.00 - 2,967.44

Total 30.00 9,750.00 410,540.00 4,926,480.00 5,288,505.10 18,682.95 18,682.95 3,802.50 3,802.50 1,600.00 1,600.00 9,100.00 48,514.90
 106

FINANCIAL STUDY

A. Total Project Cost

Schedule 3. DMP Manufacturing Project Cost

1. Fixed Assets Acquired

Building 3,719,864.54
Delivery Vehicle 1,250,000.00
Land 3,750,000.00
Furniture & Fixtures 267,000.00
Machinery & Equipment 2,006,859.44 10,993,723.98

2. Pre-Operating Expense
Pre-Investment Studies & Investigation 43,666,79
Legal Permit Expenses 18,075.00 61,741.79

3. Working Capital (3 months)

Cost of Sales
Direct Materials 5,410,258.70
Direct Labor 385,747.87
Indirect Materials 270,349.00
Factory Overhead 103,655.72 6,170,011.29

Selling Expense 44,260.35

Administrative Expense 1,230,262.59 7,444,534.23

3,500,554.29
TOTAL PROJECT COST 18,500,000.00
 107

B. Financing Scheme

DMP Manufacturing Plant will be financed in two (2) ways;

1. Equity

• Out of the three (3) partners, each partner will generate and contribute

the equal share of the profit and loss in which garners 30.0% of the total

project cost. These sum up the initial equity - cash or cash equivalent.

2. Loans

• The remaining 70.0% will be loaned from a trusted local bank in

Tacloban City, in which, each partner is entitled to 10% loan share.

Table 38. Partners’ Corresponding Capital Contribution

Partners Capital Contribution (Cash) Partner Share

Sumeguin, Patrick Joseph A. ₱ 1,850,000.00 10.0%
Torlao, Mark Ken C. ₱ 1,850,000.00 10.0%
Gabisan, Denise Jade O. ₱ 1,850,000.00 10.0%
Total ₱ 5,550,000.00 30.0%

Schedule 4. Loan Amortization Schedule

Annual
Year Interest (10%) Principal Present Value
Payment
12,950,000.00
2024 3,416,177.38 1,295,000.00 2,121,177.38 10,828,822.62
2025 3,416,177.38 1,082,882.26 2,333,295.12 8,495,527.50
2026 3,416,177.38 849,552.75 2,566,624.63 5,928,902.87
2027 3,416,177.38 592,890.29 2,823,287.09 3,105,615.78
2028 3,416,177.38 310,561.58 3,105,615.77 0.00

The loan made in making the project is assured of mode of payment of 5 years

with 10% interest per annum.

 108

C. Basic Financial Assumptions

The following are the basic financial assumptions that will be used in the DMP

Manufacturing Plant:

a. The annual number of units sold is assumed to increase by 5% per year;

b. The ending inventory is 10% of the next year annual number of units sold;

c. Raw materials are assumed to increase every year by 5%;

d. Direct Materials are assumed to increase every year by 5%;

e. Direct Labor is constant every year;

f. The indirect material is assumed to increase every year by 5%;

g. The factory overhead increases by 2% every year;

h. Depreciation and Indirect Labor are constant every year;

i. Utilities Expense is assumed to increase every year by 5%;

j. Salaries Expense is constant every year;

k. Advertising Expense will increase by 5%;

l. Office Supplies Expense will increase by 5%;

m. Repairs and Maintenance will remain constant every year;

n. Fuel and Oil will increase by 5% every year;

o. Interest Expense is 10% of the total loan;

p. Tax rate is assumed to be 30%; and

q. VAT is 12% of the total value added on taxes.

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D. Projected Financial Statements

a. Income Statement
Schedule 5. Statement of Financial Performance
DMP Manufacturing Plant
2024 – 2028

2024 2025 2026 2027 2028

Sales
43,455,893.18 49,920,986.53 52,639,017.07 55,092,260.07 57,626,347.35
Less: Cost of Sales
21,641,034.80 24,860,651.29 26,214,230.50 27,435,945.52 28,697,920.98
Gross Profit
21,814,858.37 25,060,335.24 26,424,786.57 27,656,314.56 28,928,426.37
Less: Operating
Selling Expense
Expense 177,041.40 177,945.15 178,894.08 179,890.47 180,936.67
Indirect Materials
1,081,396.00 1,135,465.80 1,192,239.09 1,251,851.04 1,314,443.60
Administrative
Expense 4,921,050.36 5,133,237.07 5,356,033.12 5,589,968.97 5,835,601.61
Total Expense
6,179,487.75 6,446,648.02 6,727,166.29 7,021,710.48 7,330,981.88
Income Before Interest and Tax
15,635,370.62 18,613,687.22 19,697,620.28 20,634,604.08 21,597,444.50
Interest Expense
1,295,000.00 1,082,882.26 849,552.75 592,890.29 310,561.58
Income Before Tax
14,340,370.62 17,530,804.96 18,848,067.53 20,041,713.79 21,286,882.92
Income Tax
5,019,129.72 5,259,241.49 5,654,420.26 6,012,514.14 6,386,064.88
Net Income
9,321,240.90 12,271,563.47 13,193,647.27 14,029,199.65 14,900,818.04
 110

b. Cash Flow Statement

Schedule 6. Statement of Cash Flows
DMP Manufacturing Plant
2024 – 2028
Pre- Operating 2024 2025 2026 2027 2028
Investment 5,550,000.00
Loan 12,950,000.00
Sales 43,455,893.18 49,920,986.53 52,639,017.07 55,092,260.07 57,626,347.35
Total 18,500,000.00 43,455,893.18 49,920,986.53 52,639,017.07 55,092,260.07 57,626,347.35
Land 3,750,000.00
Building 66,957.56
Delivery Vehicle 56,250.00
Furniture & Fixtures 48,060.00
Machineries & Equipment 60,485.70
Pre- Operating Expenses 61,187.50
Cost of Sales 21,641,034.80 24,860,651.29 26,214,230.50 27,435,945.52 28,697,920.98
Selling Expenses 177,041.40 177,945.15 178,894.08 179,890.47 180,936.67
Administrative Expenses 4,921,050.36 5,133,237.07 5,356,033.12 5,589,968.97 5,835,601.61
Payment (Loan) 2,121,177.38 2,333,295.12 2,566,624.63 2,823,287.09 3,105,615.77
Interest Expense 1,295,000.00 1,082,882.26 849,552.75 592,890.29 310,561.58
Tax Payment 5,019,129.72 5,259,241.49 5,654,420.26 6,012,514.14 6,386,064.88
Less: Depreciation Expense 177,316.13 177,316.13 177,316.13 177,316.13 177,316.13
Total 4,042,940.77 34,997,117.52 38,847,252.37 40,642,439.21 42,457,180.34 44,339,385.35
Net Cash 14,457,059.23 8,458,775.66 11,073,734.15 11,996,577.86 12,635,079.74 13,286,962.00
Add: Beginning Cash 14,457,059.23 22,915,834.89 33,989,569.04 45,986,146.90 58,621,226.64
Ending Cash 14,457,059.23 22,915,834.89 33,989,569.04 45,986,146.90 58,621,226.64 71,908,188.64
 111

c. Balance Sheet
Schedule 7. Statement of Financial Position
DMP Manufacturing Plant
2024-2028
Particulars Pre- Operating 2024 2025 2026 2027 2028
ASSETS
CURRENT ASSETS
CASH 14,457,059.23 22,915,834.89 33,989,569.04 45,986,146.90 58,621,226.64 71,908,188.64
INVENTORY - 2,404,559.42 2,762,294.59 2,912,692.28 3,048,438.39 3,188,657.89
NON-CURRENT ASSETS
PROPERTY, PLANT & EQUIPMENT 10,993,723.98 10,993,723.98 10,816,407.85 10,639,091.72 10,461,775.58 10,284,459.45
TOTAL ASSETS 25,450,783.21 36,314,118.29 47,568,271.48 59,537,930.90 72,131,440.61 85,381,305.98

LIABILITIES
CURRENT LIABILITIES
TAX PAYABLE - 5,019,129.72 5,259,241.49 5,654,420.26 6,012,514.14 6,386,064.88
LOAN INTERST PAYABLE - 1,295,000.00 1,082,882.26 849,552.75 592,890.29 310,561.58
TOTAL CURRENT LIABILITIES 6,314,129.72 6,342,123.75 6,503,973.01 6,605,404.42 6,696,626.45
NONCURRENT LIABILITIES
LOAN PAYABLE 12,950,000.00 10,828,822.62 8,495,527.50 5,928,902.87 3,105,615.78 -
TOTAL LIABILITIES 12,950,000.00 17,142,952.34 14,837,651.25 12,432,875.88 9,711,020.20 6,696,626.46
OWNER'S EQUITY
PATRICK JOSEPH A. SUMEGUIN 1,788,812.50 4,895,892.80 7,963,783.67 11,262,195.49 14,769,495.40 18,494,699.91
MARK KEN C. TORLAO 1,788,812.50 4,895,892.80 7,963,783.67 11,262,195.49 14,769,495.40 18,494,699.91
DENISE JADE O. GABISAN 1,788,812.50 4,895,892.80 7,963,783.67 11,262,195.49 14,769,495.40 18,494,699.91
TOTAL OWNER'S EQUITY 12,500,783.21 19,171,165.95 32,730,620.23 47,105,055.02 62,420,420.41 78,684,679.52
TOTAL LIABILITIES AND OWNER'S EQUITY 25,450,783.21 36,314,118.29 47,568,271.48 59,537,930.90 72,131,440.61 85,381,305.98
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E. Financial Analysis

Net Profit Rate

The net profit ratio is a profitability ratio that measures the amount of net income

earned with each peso of sales generated by comparing the net income and net sales of a

company. In other words, the profit margin ratio shows what percentage of sales is left over

after all expenses are paid by the business.

Table 39. Net Profit Rate of DMP Manufacturing Plant

NET PROFIT RATE

Year Net Profit Sales Rate
2024 9,321,240.90 43,455,893.18 21.45%
2025 12,271,563.47 49,920,986.53 24.58%
2026 13,193,647.27 52,639,017.07 25.06%
2027 14,029,199.65 55,092,260.07 25.46%
2028 14,900,818.04 57,626,347.35 25.86%

Table above shows that the proposed DMP Company can convert at an average of

24.65 % of their sales into profit from Year 1 to increase until Year 5. This entails that

every hundred-peso investment, there is ₱24.65 guaranteed net profit.

Gross Profit Rate

Gross profit margin is a profitability ratio that calculates the percentage of sales

that exceeds the cost of goods sold. In other words, it measures how efficiently a company

uses its materials and labor to produce and sell products/services profitably.
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Table 40. Gross Profit Rate DMP Manufacturing Plant

GROSS PROFIT RATE

Year Gross Profit Sales Rate
2024 21,814,858.37 43,455,893.18 50.20%
2025 25,060,335.24 43,455,893.18 57.67%
2026 26,424,786.57 43,455,893.18 60.81%
2027 27,656,314.56 43,455,893.18 63.64%
2028 28,928,426.37 43,455,893.18 66.57%

Table above shows that for every peso of sale DMP Manufacturing Plant generates,

it earns 50.20% in gross profits in Year 1 and will continue to increase until Year 5 with

earnings of 66.57%. Average gross profit rate is at 59.78%

Accounting Rate of Return (ARR)

In capital budgeting, the accounting rate of return is used to determine whether to

move forward with an investment. The figure shows project's accounting profit over the

project's starting investment. If the metric produces a percentage greater than a hurdle rate

employed by the corporation as its minimal rate of return, one would approve the project.

Accounting Rate of Return

Particular Investments 2024 2025 2026 2027 2028 Average
Initial Investment 18,500,000.00
Profit/(Loss) 9,321,240.90 12,271,563.47 13,193,647.27 14,029,199.65 14,900,818.04 12,743,293.87

ARR= Average Income

Initial Investment
= 12,743,293.87
18,500,000.00
= 68.88%

Figure 14. Accounting Rate of Return

Internal Rate of Return (IRR)

The interest rate at which the net present value of all the cash flows from a project

or investment equals zero is known as the internal rate of return. The desirability of a

project or investment is assessed using IRR. A new project is attractive if its IRR is higher
 114

than the needed rate of return for the company. The project should be abandoned if IRR is

lower than the acceptable rate of return.

Internal Rate of Return
Particulars Value 2024 2025 2026 2027 2028 Total
Initial Investments 18,500,000.00
Net Cash Flow 8,458,775.66 11,073,734.15 11,996,577.86 12,635,079.74 13,286,962.00
Discount Factors at 9% 1.000 0.917 0.842 0.772 0.708 0.650
Present Value 7,760,344.64 9,320,540.49 9,263,559.24 8,951,009.03 8,635,613.63 43,931,067.03
Net Present Value 1 25,431,067.03

Discount Factors at 10% 1.000 0.909 0.826 0.751 0.683 0.621

Present Value 18,500,000.00 7,689,796.05 9,151,846.41 9,013,206.51 8,629,929.47 8,250,158.02 42,734,936.46
Net Present Value 2 24,234,936.46

IRR= R1+ NPV1*(R2-R1)

(NPV2-NPV1)
= 10% 21.26%
= 31.26%

Figure 15. Internal Rate of Return

Discounted Cash Payback Period (DCPP)

The DCPP is a capital budgeting method used to assess a project's profitability. By

discounting future cash and considering the time value of money, a DCPP calculates how

long it will take to recover the initial investment.

DISCOUNTED CASH PAYBACK PERIOD

Net Cash Inflow Present Value Factor 10% Discounted Cash Flow Cumulative Discounted Cash Flow
2024 8,458,775.66 0.909 7,689,796.05 7,689,796.05
2025 11,073,734.15 0.826 9,151,846.41 16,841,642.46
2026 11,996,577.86 0.751 9,013,206.51 25,854,848.97
2027 12,635,079.74 0.683 8,629,929.47 34,484,778.44
2028 13,286,962.00 0.621 8,250,158.02 42,734,936.46

DCPP = 1 year + Initial Investment - Discounted Cash Flow Year 1

Discounted Cash Flow Year 2
= 1 1.18
= 2.18

Figure 16. Discounted Cash Payback Period

From the analysis, DMP Manufacturing Plant ensures a cash payback from the

capital invested after 2.18 years (2 years, 2 months, and 5 days), which is a good investment

indicator.
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Return of Investment (ROI)

ROI is a performance metric used to assess an investment's effectiveness or to

compare the effectiveness of several distinct investments. ROI calculates the rate of return

on an investment in relation to the cost of the investment.

Return on Investment
Average Net Income
ROI =
Total Investment
12,743,293.87
=
45,518,195.56
ROI = 28.00%

In every peso invested for assets, it has an average return on investment of 0.28 centavos per annum.

Figure 17. Return of Investment

From the figure above, this shows that in five (5) years, DMP Manufacturing Plant

can guarantee at an average of 28.00% return of investments. This implies good indication

that the proposed business is profitable.

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SOCIO-ECONOMIC STUDY

The Manufacturing plant project will have an impact to the society in economic

terms. Some of these include the following:

A. Employment and Income Generation

People in the area who are looking for work will finally find one if the project is

approved and established. Numerous job possibilities will be created by this project, mainly

in the industrial sector but also in the management sector, the security and welfare sector,

and the health and safety sector.

With this, production employees who are known to travel abroad to support their

families' needs will no longer be required to do so because there will soon be employment

vacancies there. The region's unemployment and underemployment rates will substantially

change if the project is successful (decrease).

B. Taxes Paid to the Government

The project will give direct benefit to the District 1 and City of Tacloban and to the

general public because of respective income taxes. With 30% income tax rate, the city will

receive an annual tax payment ranging from ₱3,633,799.42 to ₱7,019,289.35.

However, if the partnership of this project is for the exercise of a profession or what

is called the general professional partnership, it will mean another thing. According to R.A

No. 9339, Section 24 or the National Internal Revenue Code, general professional

partnerships are exempted from payment of income tax provided that no part of income of

which is derived from engaging in any trade or business.

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C. Increase in the Supply of Goods and Services

The region's first starch- producing factory will finally start producing after the

project is completed. Such a service's availability will unsettlingly rise. Since there is

currently only one in operation in the area, and only a small number of people can be

accommodated, the construction of the DMP Manufacturing Plant will result in the creation

of a second production facility, one that will produce taro starch to the highest standards

of food quality ever offered to potential customers in the city/region.

As a result, this project will serve people of all ages who depend on condiments as

an essential component of their diet. There is a chance of demand given this notable

disparity. Likewise, there needs to be an enough supply of the fundamental raw materials

and supplies that are all necessary for the manufacturing plant since a production facility

is suggested for the city.

D. Increase in the Demand for Raw Materials and Laborers

If the project will be implemented, its development will require the business to

employ numerous laborers. With a manufacturing cost totaling to ₱ 27,052,937.91 and

32.5% of which is allocated to the laborers, the laborers will earn an aggregate income of

₱ 8,798,953.86 (Salaries plus employee benefits).

In addition, the suppliers of raw materials in the city will be readily assured with

demand because the raw materials used in the construction and development of the project

will be sourced out locally

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E. Extension Activities

The project can be scaled down into any type of business, where it can be created

in a household, starch is simple to make. The project might be a component of a social

obligation to provide livelihood in remote areas so that residents can support their daily

needs and increase the total household income. Starch production can currently be done

with inexpensive or repurposed containers. The company produces pure organic starch

without the use of any additional chemicals.

The fact that taro can be purchased anywhere in the region suggests that beginning

a business from here might be incredibly economical, giving communities a fair share and

opportunities for fresh learning benefits organizational development within the business.

This implies that there is still hope for a change, and that overcoming these obstacles

contributes to the advancement of the country regardless of one's own circumstances.

Perfectionism will never serve as a roadblock to progress.

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Chapter V

SUMMARY OF FINDINGS AND CONCLUSION

Summary of Findings

Market Potential

1. The study's findings revealed a 39.75% market gap deficit, indicating that District

1 and Tacloban City are potential markets for taro starch.

2. The plant anticipates a five-year average production utilization of 97.09%. As a

result, the plant can maximize taro starch production to close the market share gap

or even take market share from competitors.

3. There is a yearly increase of market demand for taro starch in District 1 and

Tacloban City

4. A constant increase in supply has been observed in the market coverage for starch

in the region.

5. The product will offer consumers benefits because it is a good food additive agent.

6. The plant will establish many promotional techniques to attract potential clients,

these include print advertising, social media, word-of-mouth marketing, and radio

advertising.

Technical Capabilities

1. Producing taro starch is feasible from a technical standpoint. The tools and

machinery needed are obtainable on the market.

2. There is constant increase of production capacity to indicate a sustainable

production is projected for DMP Manufacturing.

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3. There are adequate raw materials in the area to support the plant's operations and

continue to meet market demand.

4. Since they are unable to undertake actual testing for all the benefits it offers, the

proponents have just benchmarked the nutritional information to the currently

available product.

5. The facility is projected to begin operations at 97.1% productivity, with a monthly

production capacity of 74,880 kg of taro starch.

Organizational Development
1. DMP Manufacturing Plant will be employing a total of 30 committed employees

who will be well equipped in delivering the objectives of the plant and meet the

demand of the starch industry and achieving customer satisfaction.

2. The budgeted number of employees will undergo hiring process throughout the

2023 project planning prior the plant’s initial operation by 2024.

3. The organization is owned by the proponents as partnership with equal

capitalization.

4. All proponents are general partners thus, all the profit and loss of the company

incurs will be held responsible by the owners.

5. The organization will be divided by 3 departments consisting of administrative,

production and quality control and maintenance.

Financial Viability

1. The study of the company is believed to be viable as the projection guarantees a

return of investment of average of 29.33%.

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2. The net profit and rise significantly as years pass by which indicates the project is

profitable at a profit rate of 24.5%.

3. In a span of less than 2.88 years, the proponents can have their capital invested cash

payback.

4. Assets are utilized well in the furtherance of the business and financial obligations

of the entity are paid on time.

Socio-Economic Desirability

1. The establishment will be the region's first starch producer.

2. Since the company will be relying on the local farmers in the area for most of its

raw materials, it will encourage them to keep growing taros and therefore promote

agricultural agriculture.

3. The industry will help the economy and or those who are unemployed, there will

also be employment opportunities.

Conclusion

Market Potential

The study's findings revealed a 39.75% market gap share, indicating that District 1

and Tacloban City are potential markets for taro starch. This suggests that the factory can

produce a certain amount of product that will satisfy the unmet demand and turn a profit.

Following the start of operations, the plant anticipates a five-year average production

utilization of 97.09%; as a result, the plant can maximize taro starch production to close

the market share gap or even take market share from competitors to alter the starch
 122

consumption game and become a competitive starch manufacturer in the 1st District of

Leyte and Tacloban City. Furthermore, the product offers consumers’ benefits because it

is a good food additive agent. Like how the plant established many promotional techniques

to attract potential clients, these include print advertising, social media, word-of-mouth

marketing, and radio advertising.

Technical Capabilities

Producing taro starch is feasible from a technical standpoint. The tools and

machinery needed are obtainable on the market. There are adequate raw materials in the

area to support the plant's operations and continue to meet market demand. These are the

materials required for production. Since they are unable to undertake actual testing for all

the benefits it offers, the proponents have just benchmarked the nutritional information to

the currently available product. The facility is projected to begin operations at 97.1%

productivity, with a monthly production capacity of 35,100 kg of taro starch. This capacity

is intended to rise yearly as the product's market gap widens in order to sustain supply.

Organizational Development

Per plan, DMP Manufacturing Plant will be employing a total of 53 committed

employees who will be taring, well equipped in delivering the objectives of the plant and

meet the demand of the starch industry and achieving customer satisfaction. The

organization is owned by the proponents as partnership with equal capitalization. All

proponents are general partners thus, all the profit and loss of the company incurs will be

held responsible by the owners.

 123

Furthermore, the organization will be divided by 3 departments consisting of

administrative, production and quality control and maintenance. The budgeted number of

employees will undergo hiring process throughout the 2023 project planning prior the

plant’s initial operation by 2024.

Financial Viability

The study of the company is believed to be viable as seen in the projections made

as the project guarantees a return of investment of average of 29.33%. The net profit and

rise significantly as years pass by, meaning, the project is profitable and can pay all the

necessary obligation it has. Also, in just a span of less than 2.88 years, the proponents can

have their capital invested cash back. A large amount of its assets is composed of cash,

which implies that the company is liquid as well as solvent. Assets are utilized well in the

furtherance of the business and obligations of the entity are paid on time.

Socio-Economic Desirability

The initiative will result in the establishment of the region's first starch producer,

as there are currently none. Since the company will be relying on the local farmers in the

area for most of its raw materials, this will benefit not only the product's consumers but

also them. Additionally, there may be more farmers in the area, which will encourage them

to keep growing taros and therefore promote agricultural agriculture. The initiative will

help the economy once it is launched. For those who are unemployed, there will also be

employment chances. The province's unemployment rate will drop as a result.

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BIBLIOGRAPHY

Singla, D., Singh, A., Dhull, S. B., Kumar, P., Malik, T., & Kumar, P. (2020). Taro starch:

Isolation, morphology, modification and novel applications concern-A

review. International Journal of Biological Macromolecules, 163, 1283-1290.

Dai, L., Qiu, C., Xiong, L., & Sun, Q. (2015). Characterization of corn starch-based films

reinforced with taro starch nanoparticles. Food chemistry, 174, 82-88.

Deka, D., & Sit, N. (2016). Dual modification of taro starch by microwave and other heat

moisture treatments. International Journal of Biological Macromolecules, 92, 416-

422.

Ahmed, A., & Khan, F. (2013). Extraction of starch from taro (Colocasia esculenta) and

evaluating it and further using taro starch as disintegrating agent in tablet

formulation with overall evaluation. Inventi Rapid: Novel Excipients, 2, 1-5.

Das, A., & Sit, N. (2021). Modification of taro starch and starch nanoparticles by various

physical methods and their characterization. Starch‐Stärke, 73(5-6), 2000227.

Sit, N., Misra, S., & Deka, S. C. (2014). Yield and functional properties of taro starch as

affected by ultrasound. Food and Bioprocess Technology, 7(7), 1950-1958.

Simsek, S., & El, S. N. (2012). Production of resistant starch from taro (Colocasia esculenta

L. Schott) corm and determination of its effects on health by in vitro

methods. Carbohydrate polymers, 90(3), 1204-1209.

 125

Matthews, P. J., Agoo, E. M. G., Tandang, D. N., & Madulid, D. A. (2012). Ethnobotany

and ecology of wild taro (Colocasia esculenta) in the Philippines: Implications for

domestication and dispersal. Senri ethnological studies, 78, 307-340.

Ramsden, L., & Ling, C. Y. (1998). Variability of non-starch polysaccharides in

taro. Tropical agriculture.

Briones, M. F., Jazmin, P. F., Pajarillaga, B. E., Juvinal, J. G., De Leon, A. A., Rustia, J.

M., & Tuates Jr, A. M. (2020). Biodegradable film from wild taro Colocasia

esculenta (L.) Schott starch. Agricultural Engineering International: CIGR

Journal, 22(1), 152-155.

Kaushal, P., Kumar, V., & Sharma, H. K. (2015). Utilization of taro (Colocasia esculenta):

a review. Journal of Food Science and Technology, 52(1), 27-40.

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APPENDICES

Capacity Baseline

Notes Cost of Sales

Variable Overhead Breakdown

Summary of Depreciation Expense

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Summary of Operating Expenses

Summary of Expenses
Raw Mat 18,554,854.93
Production Supplies 1,014,500.00
Office Supplies 66,896.00
Machine Dep 37,939.74
Equipment 22,545.96
Vehicles 56,250.00
Building 66,957.56
Permits and Licenses 18,075.00
Compensation 5,288,505.10
Marketing Expense 158,966.40
Utilities Expenses 1,047,216.00
Furniture and Fixture 48,060.00
PRODUCT COST 26,380,766.69

Owner’s Equity Schedule

Profit and Loss Distribution Schedule

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Activity Relationship Diagram

TOTAL 100%

The proportion of each rating indicates how many A, E, I, O, U and X should be place

in a relationship diagram. Since there are 28 relationships in the diagram, hence the value

of each rating in the relationship diagram are:

Rating Proportion
A&X 2
E 3
I 4
O 6
U 13
Total 28
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Inventory Control

Taro Starch Experimentation Process

Researchers conducted a spontaneous process in manufacturing taro starch and

underwent several trials. The experimentation process of taro starch is divided into series

of operation in creating the prototype to which are enumerated below:

Duration/
Diagram Process Description
Time Frame

Washing Wash the fresh taros to remove dirt 10 mins

around it.

Removing the skin, and guiding it along

the taro's flesh, keeping the cuts as 20 mins
Peeling
shallow and close to the skin as possible.
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Using the grating machine, mincing the

taro into strips or small pieces for easier 20 mins
Grating
blending

Mixing water and the minced taro into a

large container and mixing it using a 15 mins
Blending
blending machine.

Separating the used water from minced

taro using cheese cloth or separation 20 mins
Separation
machine.

Evaporation of liquid from solid starch.

Sublimation Incubating the mixture to quicken the 24 hrs.
separation of starch from water.

Separate the starch from used water. The

Separation 30 mins
used water will undergo proper disposal.

Drying the starch from the used water

Drying 20 mins
using dryer machine.

Cutting the starch into more pulverize for

Grinding 20 mins
better quality.

Total: 30.5 Hrs.

FINISHING

To print the logo and design for the

Labeling 10 mins.
packaging.

This is done to ensure that the product is

Quality Control at its required quality and no leak will be 10 mins
made. Once there is a leak identified, then
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the product will be considered as reject

immediately

Once, the quality of product is approved,

Packaging they are ready for packaging. There will 15 mins
be 1 kg, 500 mg and 250 mg.

The product is then transported to the

Storing -
warehouse.

The final product is then shipped to the

Shipping -
prospective customers

Total: 35 mins

This table shows the procedure of taro into starch. There are 9 major elements of

producing taro starch. Consists of 8 operations and 1 delay. With these elements, it takes

30.5 hrs. to produce taro starch. Also, the finishing process has 5 elements. Consists of 2

operations, 2 Transportations and 1 Inspection. With these elements, it takes 35 mins to

finish the taro starch product.

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Aerial View of DMP Manufacturing

Notes to Production System

The project plans to produce a product that is viable in the field. After determining

the market size and area, supply and demand, the research potential and technical feasibility

should be analyzed. This stage involves the machinery, materials, location and human

resources of the company required to meet the needs of the market. The researchers

estimated the total cost of the project and cited major funding costs.

The estimated cost of the project should be as low as possible so that the seed money

can be recouped as quickly as possible. The objectives of the technical aspect are to
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determine the extent to which the project meets technical reliability standards, is

representative of the size and structure of the company, and identifies the equipment

required for the company's operations.

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Other Computations
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Process Documentation