BUSINESS PROJECT FOR PARTENERSHIP

ACQUISITION, PRESORTING, PACKING AND DEPOSITING/SELLING CENTER FOR FRUITS AND VEGETABLES
1. Objectives
Our purpose is to become the first logistic platform specialized in collecting and selling in hypermarkets seasonal agricultural products, made in Romania.
Our objective is to introduce fresh Romanian products on the large stores’ shelves. We are all familiar with the idea that ripe fruits and vegetables are tastier than those reaped prematurely and ripen inside deposits or silos. Products will be sold under the brand PRODROM(Romanian Products) and will have a sufficiently short shelf-life – as we will insure our products’ freshness. Products that remain unsold after that period expires will be taken and transformed into cans, that will be sold out-season under the same brand.
2. Project Description
2.1 The activity will be logistics. Contracts will be signed with agreed agricultural producers for estimated quantities according to clear contractual needs. These products will be taken into a deposit where they will be prepared for selling: sorted, packed in adequate quantities for consumption and delivered according to a contractual relationship with the wholesalers, store chains. The products will be packed and labeled – in this way, the risk for these products to be mixed with others from the store they end up in, is eliminated.
2.2 Investment Description
- Logistic software and hardware infrastructure (computers, barcode readers, security system etc.)
- Construction (approx.1000 sqm) organized so that it can insure the specialized compartments for acquisition, presorting, packaging, depositing and delivery.
A special compartment for optimum depositing climate conditions is needed.
To adapt the shed and obtain authorizations we will acquire a used water purification system.
- Labeling, packaging, washing machines, etc.
2.3 Suppliers, Clients
Suppliers will be agreed with at the time contracts with supermarkets are signed. Products are bought according to the contracted quantities so that the optimum flow in terms of acquisition, packaging and delivery is insured. Products will be paid for at delivery and the transport will be our responsibility. These conditions will help us gain a strong position when negotiating prices with the producers.
Clients: hypermarkets. The delivery process will be negotiated, depending on the estimated quantity, directly to the market or to the chain’s logistic platform.
2.4 The Price and the Promoting Strategy
The prices will be contracted, at acquisition, at the average level of the year before, estimated so that they insure the producers’ interest.
2.5 Staff
- Manager : also responsible for selling the products
- Operation Manager : responsible for insuring the logistic resources (Transportation, package supply and expenditures)
- Executive Key Accountant – in direct relationship with the buyer
- 2 agronomists, responsible with taking over the products and the relationship with the suppliers.
- 10 unskilled workers for the deposit labor.
3. Project Duration and Main Stages:
The project will start in 2011 and the first products will be sold in 2012
Stage 1 – technical documentation completion, feasibility study, business plan – 45 days
Stage 2 – construction project, authorizations and approvals, financing documentation elaboration – 75 days
Stage 3 - a. construction and logistic infrastructure execution – 120 days
b. Acquisitions and installation of technical equipments, installations, utilities – 120 days
the a. and b. sub stages are parallel so the necessary period of time for Stage 3 is 120 days.
Stage 4 – methodological working system completion, staff training, others – 60 days
Project execution time: 300 days.
4. Estimated Investment Cost
4.1 Shed (administration office, acquisition center, packing shed, deposit) = 420 000 euro
4.2 Installations (associated ), logistic infrastructure, necessary equipment = 250 000 euro
4.3 Software, licenses, approvals, specialized trainings, technical consultancy = 150 000 euro
4.4 Administrative costs for 1 year (salaries, transportation, marketing, promotion, sales) = 200 000 euro
4.5 Working Capital (crediting, financing, product acquisition) = 500 000 euro

TOTAL PROJECT COST = 1 520 000 euro
(The working capital does not represent a cost, it is a hedge for the acquisition costs and it is covered by the products’ sale with our own trade markup)
5. Turnover (estimated for 12 months of activity) = 7 000 000 euro
Annual profit rate = 15%
Annual gross profit = 1 050 000 euro
Acquisition/ packing/delivery capacity = 20 tons per day (minimum)
Trade markup (packing, transportation - included) = 50%



6. Financing will be:
A. Private investment,
B. Bank credit line,