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"Meat Production and packaging"

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Bolor Bat-Erdene

on 17 September 2013

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Transcript of "Meat Production and packaging"

"Meat Production and packaging" business plan
Presenter: Bolor Bat-Erdene
1. Agenda

Company Description
Industry Analysis
Market Analysis
Marketing Plan
Management team and company structure
Operation Plan
Product design and development plan
Financial projection
Risks, assumptions and conclusion
Question and Answer

2. Demand for the meat

Meat is Mongolian major product for food
Ulaanbaatar citizens consume 92,000 ton meat each year.
Which is, 91.2 kilogram meat is consumed per capita, per year. (world average is 41,6 ton)
Unfortunately, less than 10% of the meat is fulfilling basic food & health standard
5-13% of those meat is produced in meat factory (92% of them is exported)
Question and Answer
Thank you!

9/17/2013

Market Analysis cont’d

9/17/2013


Marketing mix (4P)
Promotion
A-Action
Make it possible to find everywhere
Acceptable price


Market Analysis cont’d

9/17/2013

Marketing mix (4P)

Promotion
Brand new company using AIDAS approach
A- Attention
Heavy mass media advertisement and boards
To use Mongolian well known cook celebrities
Distributing our meat in private schools, high-end restaurants, hotels and resorts
Use this link as our advertisement



Market Analysis cont’d

9/17/2013

Marketing mix (4P)
Price
Cost based pricing
Butchered meat from partner “Survaa” LLC
- horse is from T 400,000 to T800,000 depending the weight;
- sheep is from T60,000 to T150,000 depending the weight;
- cow is from T450,00- T600.000 depending the weight as well
Industry Analysis cont’d


- Seasonal trend
- Winter season
150С into minus 35 0С (60…220F)
- Summer season
00 into 26.70С (500…800F),

Industry Analysis cont’d

Nature of competitors
- Direct competitors
“Just Agro” LLC ; “Makh Treid” LLC and “Nomin Holding”
- Product competitors
Direct raw meat selling in black markets, family/ relatives and shops
- Subsidiaries
Prepared frozen buuz , cooked and vacuumed meats & dishes, Korean dupu 7 vigitables


4. Industry Analysis

9/17/2013

There are 32 butchering company in Mongolia
Most known ones:
Makh Impex Corporation, Makh Market LLC, Makh Expo LLC, Khatansuikh Impex LLC, Darkhan-Makh Expo LLC, Mon Gema LLC, Dorniin Govi LLC, Taij Trade LLC, Erdenet Progress LLC and Baatruudiin Tenger LLC.


Company Description cont’d


We guarantee our product
All responsibility will be on our company
Feedback service
Give back the money


Company Description cont’d

Packaging

Targeted general Ulaanbaatar consumers
270 thousand families in Ulaanbaatar
Income in average of T4555,400 ($ 347,12) per month
Expense of T548,400 ($ 342,75) per month including food, utility and other expenses.
40% of the basket product is spend on meat purchasing (T119,360)
Average price of meat is T 7,865 ($4.91) per kilo that is approximately 16 kilogram meats per mouth is used


8. Challenges and Risk

9/17/2013


Risks:
Supply shortage of live stock.
Deceases and supply of spoiled meat
Possibility to loose intellectual properties
8. Challenges and Risk

9/17/2013

Challenges:
Persuade Mongolian consumers
Keep the cost stable is challenging due to supply bargain.
Be competitive in high demand low supply seasons due to governmental release of stored meat.


Operation Plan cont’d

9/17/2013

Facilities and equipment
Equipments are:
- Automatic programmed saw with capacity of cutting and producing 500 carcass meats in a shift;
- All meat production and packing facilities will be equipped and maintained as keeping the office in -200С to keep our products fresh;
- Automated vacuum packing equipment with capacity of packing 800 packages in one shift;
- Automated labeling and stamping equipment
To supply our products we are purchasing 7 trucks with refrigerator.
 


Operation Plan cont’d

9/17/2013

Facilities and equipment
Planning to rent 2 floored building of 2000 square meter in Baruun-Urt sum, Sukhbaatar province which was build up in 2008 as a meat production facility and still haven't been used. First floor will be dedicated for meat cutting and packing. Second floor for bio-chemical testing, office and cafeteria for employees.
In Ulaanbaatar, our company is renting 200 square meter office building at the first floor near to the center of Ulaanabaatar, to make it easier to supply our products to anywhere in Ulaanbaatar.



Operation Plan cont’d

9/17/2013

General approach cont’d
10 year operational plan


7. Operation plan

9/17/2013

General Approach

"SB" LLC purchases butchered horse, cow and sheep meats from its long-term partner company "Survaa"LLC.
Further our company will cut the meats and package
All these procedures will be done within one day before its delivery to contract partners
All the products will be butchered, produced and packed one day earlier of its delivery in supermarkets, shops and service entities
All the butchering, producing and packaging of the product will be done within local and global standard implementation


Market Analysis cont’d

9/17/2013

Marketing mix (4P)

Distribution
- B2B distribution
Contract based distribution with popular Mongolian restaurants like Seoul Restaurant, Bull Hotpot, Buffalo and so on
Also, hotels, resorts and private schools will be our main supply chain.



Market Analysis cont’d

9/17/2013

Marketing mix (4P)

Promotion
S-Satisfaction
We are highly sure that our product will gain big trust from customer due to our highly concern in high quality production, tasty meat resource, easy to notice and understandable labeling and most importantly feedback service from customers.
Feedback service
Guarantee for our product
“Give the money back” approach


Market Analysis cont’d

9/17/2013


Marketing mix (4P)

Promotion
D-Desire
cooperate with INFO television magazine and with several cooking programs
reveal that our company supplies meat for high-end restaurants, hotels, resorts and private schools



Market Analysis cont’d

9/17/2013


Marketing mix (4P)
Promotion
I-Interest
have own short documentary film
sponsor Mongolian movies


Market Analysis cont’d

9/17/2013

Marketing mix (4P)

Price
Afterward cost of the product is:
- Horseflesh: T4,580+ 10%+300= T5,338
- Beef: T4,000+10%+300= T4,700
- Mutton: T4,830+10%+300= T5,613
 


Market Analysis cont’d

9/17/2013

Marketing mix (4P)

Price
Additional cost will be included as follows:
1. 10% addition on initial price per kilogram due to the meat production, transportation cost, taxation, salary for employees and storage. (historical data of meat production survey)
2. T300 addition basing on packaging cost (labeling on each meat T100, vacuuming the meat T200-taken as an average)


Market Analysis cont’d

9/17/2013

Marketing mix (4P)
Price
From this we can calculate that initial cost for meat purchasing per kilogram is as follows:
1. Horseflesh- T600,000/ 131 kilo (52.5 % of 249 kilogram) = T4,580
2. Beef- T525,000/ 131 kilo (53% of 247 kilogram)= T4,000
3. Mutton- T105,000/ 21.73 kilo (53% of 41 kilogram)= T4,830


Market Analysis cont’d

9/17/2013

Marketing mix (4P)
Product
The meats will be packed in neatly sliced forms with mixture of meat and fat (preferably with less fat) by 1-5 kilograms.
The packaging and meat production standardization will be fulfilled in global and local scale.
Qualified packaging with easy to understand labelling


Market Analysis cont’d

9/17/2013


Goal:
- To gain the customers' trust in frozen and packed meat
- To persuade customer, change their purchasing behavior and make them use specifically our product

Market Analysis cont’d

Buyer behaviour
- Prize for the product should be general
- Packaging
- Quality
- Relies on technology
- Near their homes
- Inability and no willingness to cut the meat in peaces

5. Market Analysis

Market segmentation
The very possible segmentation is:
1. General public
- Black Market visitors
- Supermarket visitors
- Direct purchasing from herder
2. Organizations
- Public entities
- Private entities


Industry Analysis cont’d

Financial Proposition

9/17/2013

UB consumes 97,000 ton each year that our company is aiming to supply 16,000 ton each year
Start-up expense of around $400,000 it was calculated to earn $23,006,601.9 in very first operational year(due to no loan based operation with good strategical approach in terms to save the cost)
Partnership- $200,000 from each of them
The return of the equity is calculated as 57.5%.
Company Description cont’d

9/17/2013

Key partners:
- “Survaa” LLC butchery company in Sukhbaatar
- Packaging and labelling raw material supply from Chinese company
- Government
- Chain supermarkets and private food service entities

Company Description cont’d

9/17/2013



Current status:
On research level
Legal status:
Partnership


Company Description cont’d

Speed and delivery
“Just-in-time” strategic approach
The order will be produced a day before the contracted date
No inventory
Trip on the road takes from 6 hours (summer) to 8 hours (winter)


Company Description cont’d

Fulfilled standards
MNS 5998:2009 for butchery standards,
MNS 2456:2009 for meat cutting factory standard and
MNS 2457:2009 for packaging
ISO 9000 and ISO 9001 standard

Company Description cont’d

Product uniqueness
Taste
Sukhbaatar province is known by its taste and fast horses
High standard fulfillment (clean)
Meats will be produced in high standardized facility that fulfilled global standard



Company Description cont’d

Company Mission Statement:
"To supply tasty and fresh meat for Mongolian household with high standardized packaging in cleanest working environment."
Company Vision Statement:
"Become leading meat brand in Mongolian meat industry further holding Mongolian meat export industry."
3. Company Description


“SB” LLC is meat production and delivery company
Provide tasty meats produced in high standardized professional factory in Sukhbaatar province
“SB” LLC will supply horseflesh, beef and mutton into Ulaanbaatar meat market



Resource

9/17/2013

Presenter: Bolor Bat-Erdene

17 September 2013

“Meat Production and Packaging” Business Plan

Operation Plan cont’d

9/17/2013

Business location
Basic Operation Plan



Operation Plan cont’d

9/17/2013

General approach cont’d
10 year operational plan


Management team and company structure cont’d

9/17/2013

Company structure
"SB"LLC is newly established company with current small range of operation.

Tenuunbileg Khosbayar.
Future Graduate of law (2014); at Mongolian National University.
Great experience of management of small businesses and
Have big range of business skills.


Management team and company structure cont’d

9/17/2013

2. Board of directors


6. Management team and company structure

9/17/2013

1. Management team
Market Analysis cont’d

9/17/2013

Marketing mix (4P)

Price

Competitor based pricing
Profit calculation per kilogram

Market Analysis cont’d

9/17/2013

Marketing mix (4P)
Price

Meat average outcome, weight and price


Market Analysis cont’d

9/17/2013

Product competitor
(Narantuul,Tsaiz, Bayanzurkh, Bars, Kharkhorin, Mercury, Saruul, Bumbugur, Shonkhor)



Market Analysis cont’d

9/17/2013

Direct competitor analysis


Industry Analysis cont’d

- Overall trend
Meat produced and packed in factory. (in thousand of tons)



Company Description cont’d

9/17/2013

Unable to sell in big size, 1-3 kilogram vacuumed package with good labeling



Management team and company structure cont’d

9/17/2013

3. Board of advisors
Market Analysis cont’d

9/17/2013

Marketing mix (4P)
Distribution
Chain supermarkets in Ulaanbaatar
As of December 2012,
40,9 million live stock
2230.4 thousand of them horse,
2584.6 cow,
305.8 thousand camel,
18 million 141.4 thousand sheep and
17 million 558.7 thousand goat.
The number of live stock compared with last year, increased by 12.6%

Batjargal Bat
Operation Department
In charge for controlling, regulating, directing and heading in Sukhbaatar office.
•Graduate of Law (MBA); at Mongolian National University
•Assistance of parliament member Batzandan Jalbasuren
•Great experience on meat distribution and production


1. Management team
Oyuntsetseg Tumurbaatar
Financial Department
In charge for all financial accounting and audition
•Graduate of Corporate Finance and Accounting; at Bringham Young University-Hawaii
•Auditor in Deloitte, Mongolia
•Fluent English, Russian and work experience
1.Management Team
Bolor Bat-Erdene
Marketing Department
In charge for marketing activities, selling and supply chain as well as feedback activities
•Future graduate of Marketing (2014); at Raffles International Institute. Mongolia
•Fluent English, Russian and Intermediary level Japanese
Direct Competitors
Full transcript