Dhiraj Bajgain

Anish Basnet
Amar Khatri
Dhulikhel Biofertilizers Sudarshan Lamichhane
Raj Prateek Rai
 
 
 Business Introduction

• Bio-fertilizers are substances that contain microorganisms, which when added to

the soil increases the crop yield and promotes plant growth.
• Natural form of fertilizers.
• Bio-fertilizers add nutrients through the natural processes
• They play a very important role in improving soil fertility by fixing atmospheric
nitrogen and also produce plant growth substances in the soil.
 Why biofertilizers?
• Prolonged use of chemical fertilizers degrades the soil and affects the crop yield. 
• enhance the water holding capacity of the soil
• adds essential nutrients such as nitrogen, vitamins and proteins to the soil.
• Biofertilizers are purely natural
• do not affect the chemical intake of the plants which in turn is keen for producing
plants healthy for consumption
• Biofertilizers are cost-effective.
• Biofertilizers do not cause any type of pollution.
• They reduce the risk of plant diseases
Biofertilizers in the market trend
Growth in the organic food industry
Goals and Mission
 Goals
• To be the number one
supplier for biofertilizers
• To transform the
business into a franchise
• To be the foundation of
the agricultural realm of
the nation
• To inspire younger
generations to work on
their realistic ideas for a
better future for the
society
Mission
• To secure the supply
chain of the farmers
within the area of reach
• To maintain a positive
annual revenue number
• To garner the trust of the
agricultural workers
through high efficiency
of our product
• To keep improving the
product until it has
reached it biochemical
potential
 Strengths Weakness Opportunities Threats
• We can provide • No brand equity and • A relatively less • Lack of skilled
products with image in the early competitive market workers in the area
quality above the phase • Easy availability of • Farmers demand is
expectations of • Farmers are not raw materials to give quick results
Nepalese accustomed to using • A lesser known new • Society will question
agriculture industry organic fertilizers market and may trash talk
• Eco friendly • Starting out as a • Futuristic move about the kind of
fertilizers fresh new business • Can thrive in business we have
• Strong supply chain with little or no seasonal times started
management connections • Opportunities
• Price, value to the • People are less during the time of
customers and concerned about economic blockade
qualitative products the eco- friendly by external sources
• Biotechnology aspects and are if it arises
advances within our more driven • People are more
products making it a towards the easy health conscious
unique and inorganic ways and prefer organic
advanced fertilizer means of harvest
with scientific back • Government
up subsidies
• New technological
innovativeness in
the production
phase
Business Model Canvas
PESTEL ANALYSIS
Political Economic Social Technological Environmental Legal

Nepal Communist Party Unemployment Employment Effectiveness Fertility and National

(NCP) aims for agriculture rate of Nepal: in agriculture : of machines productivity of fertilizer
self-sufficiency 1.14% (2076). 64.54% (2076) and soil policy, 2059
  Hence cost of labor   equipment.   and
Politically unstable low. Working Water national
condition of country   condition of pollution agricultural
  Raw material cost labor. leading to policies
Restrictions along the     eutrophication 2061
Nepal-India border Change in interest Awareness in  
  rate: Base rates are farmers about Guideline
Corruption: government will revised on importance for Organic
be more inclined toward quarterly basis and benefits and
import of chemical   of organic Biological
fertilizers. Purchasing power fertilizer Fertilizer
  of consumers is compared to Regulation,
Amount of organic fertilizer low due to low chemical 2069
government buys from economic growth fertilizer.  
farmers. and GDP (1033$).  
Porter’s Five forces Matrix
SN Competitive Force Importance (1 Threat to Weighted
to 5)(1= not Industry (1 score(Col
important, 5= to 5)(1=low, 3= 3x Col 4)
very important) medium, 5=  
high)
 

1. Rivalry among companies 1 3 3

 

2. Bargaining power of suppliers 3 3 9

3. Bargaining power of buyers 4 4 16

4. New entrants 2 1 2

5. Substitute 4 3 12

  Total     42
 Marketing Strategy

• Target Market
– Terrace farming customers, farmers and nursery in kavre
district.

• Customer’s motivation to buy

– Cheap
• Rs. 44 per kg of chemical fertilizer
• Rs. 42 per kg of organic fertilizer
– Increases the fertility and productivity of soil
– Environmental friendly
– Safe to use
 Marketing strategy

• Advertising and Promotion

– Free product to customers at the introduction phase

– Word of mouth advertisement by satisfied clients
– 5 days credit will be extended for those who regularly buy
product
– Free delivery for volume purchases
– Use of posters
– Radio and newspapers
 Marketing strategy

• Location

– Dhulikhel, Kavre in the village area

• chicken manure is easily available from the poultry
• factory will be far away from residence area
• land and construction cost are cheap
• close to its target market
• near the transportation hub (Araniko highway and BP
highway)
 Pricing

• Selling price is based on the “Cost Plus method”.

Unit Factory selling Retailer selling

production cost price price
• Rs. 31.95 • 20% over the • 10% profit
unit product markup
cost • Rs. 42.17
• Rs. 38.34
Financial Analysis
 Total Capital Requirement

Particular Amount (in Rs)

Fixed capital 13,51,000

Pre operating expenses 19,500

Working capital 5,11,188

Total capital 18,81,688

Cash Flow Statement
Particular Pre-operating (in Rs.) 1st year (in Rs.)
Cash Inflow
     
Equity 7,64,376  
Loan 11,17,312  
Sales   69,70,140
Total cash from sales(excluded AR for ½ month)   68,98,015

Total cash inflow 18,81,688 68,98,015

     
Cash Outflow    
Pre-operating expenses 19,500  
Purchase of fixed assets 13,51,000  
Direct costs less depreciation   50,70,000
Administrative expenses less deprecation   3,30,000

Selling and distribution costs   24,000

Interest in inventories   2,71,563
Interest expenses   1,67,596.8
Loan amortization   2,23,462.4
Total cash outflows 13,70,500 60,86,622.2

     
Net cash flow 5,11,188 8,11.392.8
     
Cash balance in the beginning   5,11,188
Cash balance at the end 5,11,188 13,22,580.8
Balance Sheet
Particulars Pre-operating 1st years (in Rs)
(in Rs)

ASSETS    
     
Cash 5,11,188 13,22,580.8
Inventories   2,71,563
Accounts receivable   72,125
Total current assets 5,11,188 16,66,268.8
     
Total gross fixed assets 13,51,000 13,51,000
Less accumulated depreciation   13,275
Net fixed assets 13,51,000 13,37,625
     
Pre operating expenses 19,500 19,500
     
Total assets 18,81,688 30,23,363.8
     
LIABILITIES    
     
Long term loan payable 11,17,312 8,93,849.6
     
Owners equity    
Equity capital in the beginning 7,64,376 7,64,376
Accumulated profit   12,18,043.2
Total owners equity 7,64,376 19,82,419.2
Total liabilities and equity 18,81,688 30,23,363.8
 Financial Parameters

Breakeven Return on Return on

Percentage Investment Equity
• 7.4% • 40.3% • 61.4%