Establish an integrated unit for pineapple waste treatment in Nghean Province, Vietnam

The Diagram 1: Pineapple waste cycle (see the attached file) shows how pineapple waste is treated. The waste taken from pineapple processing factory is transported to 1) the factory of pineapple waste processing for castle feed and to 2) the factory for pineapple waste processing into organic fertilizer. All products from these factories (1+2) are transported to farmer’s farm. The farmers use pineapple waste for raising castle and planting pineapple. Castle waste is also for planting pineapple. After harvesting, pineapple fruits again are taken to the pineapple processing factory to process. All of these made a cycle. This help to create jobs and improve living standard for ethnic people.
Because of shortage of capital, at the first stage of the plan I suggest that two factories 1) Pineapple waste processing factory for castle feed and 2) Pineapple processing factory into organic fertilizer be established.

Customers:
1) The target customers of the pineapple waste processing factory for organic fertilizer are farmers who are planting pineapple and other tropical fruits like orange, bananas… in Nghean Province. Further more, when production is stable the markets should be expanded to farmers in some surrounding provinces.
After processing at the factory, organic fertilizer will be packed in 25 — 30kg bags and transported to the farmers’ fields. For the farmers who use the organic fertilizer for planting pineapple and have buy-back contract with the Export-oriented pineapple processing factory, they have to pay half when getting fertilizer. The half rest will be paid via the Export-oriented pineapple processing factory when they sell pineapple fruits in harvest season.
For farmers who use organic fertilizer for planting other tropical fruits like orange, bananas… they have to pay totally when getting fertilizer.
One of our products’ advantages is price and service. Because, products are processed in site, materials are available and manpower is people who are living surrounding the factories. Distance of transportation is near within 50km.

2) The target customers of the pineapple waste processing factory for castle feed are farmers who raise castle in Nghean Province. There is milk factory in Nghean Province, therefore, lots of castle is raised in here. We can also sell the products to the Castle Farm in Tuyen Quang — a biggest castle farm in the North of Vietnam. Further more, the demand of feed from pineapple waste is high in Japan and Korea. The export of this product is also calculated in project.

There are two fertilizer factories in Nghean Province. These factories' products supply mainly to farmers in here. They are potential competitors. However, our advantage is that our product is solely produced from pineapple waste.
Because this is an integrated unit, therefore, it requires some partners to participate in processing cycle. The first partner is the Export-oriented pineapple processing factory where supply pineapple waste. If this business plan is accepted, I have to sign a contract with the Export-oriented pineapple processing factory to buy all their pineapple waste. The second partner I think about is Castle Farm in Tuyen Quang who will buy castle feed from our factory. I also contacted with some customers from Korea and Japan who care about castle feed from pineapple waste, and they are ready to corporate to do business.
When this plan in start-up step, the first thing I have to do is to establish a joint stock company. I will call for some friends and relatives to become shareholders. They will share their money and experience so that this plan can move forwards.

Financial analysis: making profit
I. Total invested capital for two factories: €170000
1. Fixed capital: €133000
- Equipment line: €64000
- Civil capital: €27000

• Production workshop (400m2 x 2): €25000
• Concrete yard: €11000
• Electrical system outside the production workshop: €6000

2. Working capital: €37000

II. Making profit
1. Variable production cost for one ton of castle feed/organic fertilizer (to produce one ton of castle feed is nearly the same as to produce one ton of organic fertilizer)
- Pineapple waste: €0.65/ton x 8 tons = €5.2
- Electricity: €0.1KWh x 128KWh = €12.8
- Coal: €40/ton x 0.7 ton = €28
- Wood: €15/m3 x 0.02m3 = €0.3
- Water for sanitary: €0.8/m3 x 1.5m3 = €1.2
- Salary (6 persons/shifts): €1.5/person x 2 shifts = €18
- Administrative cost: €1.5/person x 2 persons = €3
- Bags: €0.25/bag x 35 bags = €8.75
- Transportation cost: €1/ton = €1
- Other costs: €1
Total cost: €79.25

2. Product estimated price: €98/ton
(Capacity: 5 tons/day x 7 months/year)
- 5x 30 x 7 = 1050 tons of products/year
- Total cost: €79.25 x 1050 = €83212.5
- Estimated product price: €98 x 1050 = €102900
Total interest/year: €19687.5
For the first year of production (7 months), the total interest will be €19687.5
For the second year of production (9 months), the total interest will be €25312.5
For the third year of production (12 months), the total interest will be €35750

If possibble, I will calculate to buy pineapple waste from other factories to ensure that in the first year of production, the capacity of the two factories will be 100% in 12 months.

When the plan is implemented, it will help to solve unemployment in here. Estimated 150 people will be recruited. What’s more, more than ten thousands people who are farmers have annually jobs by planting pineapple and raising castle; their living standards will be improved.
However, the most important thing that I think this business plan brings forwards is environment protection. By treating pineapple waste, water source polluted will be erased. In addition, this business plan helps ethnic people to change their daily jobs: cutting down trees and hunting into planting and raising castle stably. It also protects natural resources by creating jobs to ethnic people.
In a short-term, as explained above, because of shortage of capital, two factories (process pineapple waste into organic fertilizer and castle feed) are established. In the year of 2007, to diversify products, the Export-oriented pineapple processing factory has plan to process lychee and passion fruit. As a result, I have to think about how to treat waste from lychee and passion fruit into organic fertilizer.
In a long-term, instead of selling castle feed to the Castle Farm in Tuyen Quang (200km far from our factories), a Castle Farm will be established for raising cows for milk. Its product will be sold to the Milk Factory in Nghean Province.