Business plan - vresto.eu: Αναστασιάδης Π....

Business plan:

10 Hectares plant of

ALOE VERA BARBADENSIS MILLER

Loan required:2720000 euro

Aug. 12, 15 1

What is Aloe Vera Aloe Vera (or Aloe Barbadensis Miller) is a plant - it’s that simple! It is a

member of the onion and lily family but grows two to three feet tall with large

thick leaves. Aloe flourishes in hot dry climates such as the Caribbean, Far

East and parts of America and Greece. It takes around four years until it is

ready for harvest and then, just like any vegetable juice, it must be stabilized

before it can start to oxidize and loose its goodness.

It’s not a fad or 'the latest thing in health care' although many spurious

products have recently appeared on the market.

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Aug. 12, 15 2

It’s not a fad or 'the latest thing in health care' although many spurious

products have recently appeared on the market.

It’s not a 'miracle cure' although after reading many articles on the subject

you'll be forgiven for thinking that is exactly what it is! You can find it

mentioned in the bible (Numbers 24:6, John 19:39, Psalms 45:8) and dotted

through the history books where it is said to have been used by Cleopatra,

Alexandra the Great and in the film Gerry McGuire.

It can be applied to the skin topically or taken internally as a drink. If you go

on holiday to the Caribbean you will see large leaves being sold on the beach

to relieve sunburn and offered as a drink to alleviate indigestion but how can it

be so many things to so many people? The answer is in its contents.

The rich gel inside an Aloe plant is made up of over 75 different ingredients

even though 95% of it is water. These nutricients include :

Vitamins - including C, E, Beta Carotene, B12 Minerals - including magnesium, manganese, zinc, copper, chromium,

calcium, sodium, potassium, iron. Amino Acids - 20 out of the 22 required by the body as the building

blocks for protein and 7 out of the 8 that the body cannot manufacture itself

Sugars - including long chain polysaccharides that help boost the immune system

Enzymes - to help break down and digest food Plant Sterols - that act as powerful anti-inflammatory agents Lignin - a woody substance that helps Aloe penetrate the skin Saponins - soapy substances with an anti-microbial effect Anthraquinones - powerful natural painkillers Salycylic Acid - anti-inflammatory, helps break down dead tissue

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Common Pests and Diseases Aloe rust

Phakopsora pachyrhizi

Symptoms

Small, pale yellow spots on leaves which expand and turn

brown; orange spore masses may be present on underside of

leaf; leaves may drop from plant

Cause

Fungus

Comments

Disease emergence favors cool temperatures and high humidity

Management

Disease is self limiting and requires no treatment

Basal stem rot

Fusarium spp.

Symptoms

Base of plant turning reddish brown to black and rotting

Cause

Fungi

Comments

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Aug. 12, 15 4

Fatal disease of aloes; disease emergence favors cold, damp

conditions

Management

Pieces of plant may be saved by taking cuttings above rotted

portion

Bacterial soft rot

Pectobacterium chrysanthemi

Symptoms

Watery, rotting leaves which are darker in color; young leaves

wilting and collapsing; leaves bulging due to gas formation

inside

Cause

Bacterium

Comments

Bacteria survive in plant debris in the field; disease emergence

favored by hot, wet weather

Management

Fatal disease; avoid over-watering plants

Main characteristics of an Aloe Vera plant We plant up to 1000 plants per stremma(1/10 of an hectare)

Every leaf weights from 600 gr to 1,3 klgr

Today’s sale price for aloe leaves from merchants is between 0.9 and

1.5 euros.

Despite the sale of leaves a mature stremma of aloe can produce over

5000 offsets yearly

From each plant we collect 6 to 12 leaves yearly.

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Aug. 12, 15 5

A very consistent plant of one stremma of aloe vera produces from 3 to

6 metric tons yearly.

With the new offsets you can extend your cultivation.

Alternatively you could sell to increase per stremma return.

Executive summary Aloe Vera Farming Greece (AVFGR) is an Aloe Vera farming business that

will be located in Greece.

It will be a star-up agricultural firm.

The initial products are Aloe Vera leaves and offsets. Leaves are expected to

be very popular among other medicinal plants in the near future, because of

their multi use in preventive medicine and skin care.

Also their global demand is expected to rapidly expand and many people will

rush to get into this new business and market.

Mission AVFGR aims to offer high-quality Aloe Vera products at a competitive price.

The consultants of this business believe that there is a current untapped

market opportunity because existing providers are too diversified to serve the

increasing needs in gel and leaves of the commercial nutraceutical products

segment and the incorporation of greater scientific controls over the plant to

do on-line supervising of the plant to prevent threats.

Keys to success High level of quality

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Aug. 12, 15 6

Adapt new technologies to control the plant and reconfigure needs.

Competence between the front line sales people by:

Applying revolutionary methods for distribution and marketing

giving as bonus a percentage of the final dividend, depending on

the volume of the sales performed above the target sales

volume .

Company Konstantinos Anastasiadis, chief Executive Officer and Administrator.

Seeking positions for:

Finance officer

Sales manager

Plant engineer

Startup costs

For a 10 hectares (100 stremma) cultivation of Aloe Vera on horizon

of 10 years, the startup cost covering years 1-7 will be 2.000.000 euros

including land purchase of 10 hectares in Greece(mainland , or island) with its

necessary plant installations.

Personnel Plan

Fixed cost : 82000 euro/yearly (including contributions)

o Chief executive : 35000 euro/yearly

Finance officer : 12000 euro/yearly

o Plant engineer : 15000

o Sales manager : 20000 euro/yearly +bonus

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Aug. 12, 15 7

Variablel cost :68500 euros/yearly (including

contributions)

Wages :68500 euro/yearly

Personnel costs 150500 euro/yearly

Bonus policy

Bonuses will be given on separate agreements of sales. The bonus on

each sale agreement will be equally split between the manager and sales

force team.

The bonus will be computed as the 10% of the gross margin for the

estimated year sales, and the amount will be depended on the volume sold by

the agreement minus taxes.

Products Leaves

Collected 4 times a year

Offsets

Collected once a year.

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Aug. 12, 15 8

Table 1: Stremma return of Aloe Vera Barbadensis Miller

The financial plan

General assumptions Plan year 1 2 3 4 5 6 7 8 9 10 11

1 Investment return 16% 16% 16% 16% 16% 16% 16% 16% 16% 16% 16%

2 Tax rate 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13%

3 Year sales 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

4 Return as table 1 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

5 Weather disaster upon estimation

Table 2: General assumptions

Work Labour Total expences Leaves Offsets

Leave return Leaves and Offsets

YEAR Expences days cost euros kgr kgr euros return euros

0

2250

5 150 2400 0 0 -2400 -2400

1 200 10 300 500 0 100 -500 -400

2 200 10 300 500 200 500 -300 200

3 200 15 450 650 1000 1500 350 1850

4 200 15 450 650 2000 3000 1350 4350

5 200 20 600 800 3000 5000 2200 7200

6 200 20 600 800 4000 8000 3200 11200

7 200 30 1000 1200 5000 12000 3800 15800

8 200 30 1000 1200 5000 12000 3800 15800

9 200 30 1000 1200 6000 12000 4800 16800

10 200 30 1000 1200 7000 12000 5800 17800

Totals 4250 215 6850 11100 33200 66100 22100 88200

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Aug. 12, 15 9

Start-up capital needs 1. Real estate and installations = 1.000.000 euro

2. Cost of planting 1st-4th year = 1.720.000 euro

Description Cost Amount in Euros

1 Land+buildings+equipment Fixed 1000000

2 Startup planting Variable 1720000

Total 2720000

Table 3: Loan analysis

Yearly loan repayment of 2.720.000euro over 10 years at 10%.

Total interest= 1593400 euro.

Total repayable capital= 4313400 euro.

Purchase of land In southern Greece within a region suitable for aloe, we can now days, buy

10 hectare for 300.000-600.000 euro depending on if it is on main land or on

island, which both are very good investment opportunities by their own,

regarding the land prices in Greece 5 years ago, which were at least three

times that.

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Aug. 12, 15 10

Installations

Description Euro

Store house 150.000

Hedging 15.000

Machinery 20.000

Ground formatting 15.000

Working establishment 200000

Water drilling 10000

Water tank 7000

Electric pump 1000

Generator 1000

Piping 70.000

Miscelaneous 10000

Totals 499.000

Table 9: Installation, machinery and equipment costs, prices roughly

estimated from Greek market with a 10% maximum flexibility.

Figure 5: Store house model of 150 sq.meters with capacity of 100 tons of leaves.Plant need 10 of those.

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Figure 6: Model of plant establishments with office and house.

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Capital amortization Distribution Management Loan Net profit

Year Income expenses Expenses Installment Balance Tax(13%) after tax 0 -240000,00 100000,00 82000,00 431340,00 -853340,00 -110934,20 -742405,80

1 40000,00 100000,00 82000,00 431340,00 -573340,00 -74534,20 -498805,80

2 20000,00 100000,00 82000,00 431340,00 -593340,00 -77134,20 -516205,80

3 185000,00 100000,00 82000,00 431340,00 -428340,00 -55684,20 -372655,80

4 435000,00 100000,00 82000,00 431340,00 -178340,00 -23184,20 -155155,80

5 720000,00 100000,00 82000,00 431340,00 106660,00 13865,80 92794,20

6 1120000,00 100000,00 82000,00 431340,00 506660,00 65865,80 440794,20

7 1580000,00 100000,00 82000,00 431340,00 966660,00 125665,80 840994,20

8 1580000,00 100000,00 82000,00 431340,00 966660,00 125665,80 840994,20

9 1680000,00 100000,00 82000,00 431340,00 1066660,00 138665,80 927994,20

10 1780000,00 100000,00 82000,00 1598000,00 207740,00 1390260,00

Totals 8900000,00 1100000,00 902000,00 4313400,00 2584600,00 335998,00 2248602,00

Table 4: The above table indicates how the amount of 2720000 euro is

amortized with 10% interest rate and also the accumulated net profits over the

project:

“11 years over 10 hectares of Aloe Vera Barbadensis Miller”.

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Break-even Analysis Loan

Year Farming Labour Distribution Management Installment Total

1 225000 15000 100000 82000,00 431340,00 853340

2 20000 30000 100000 82000,00 431340,00 663340

3 20000 30000 100000 82000,00 431340,00 663340

4 20000 45000 100000 82000,00 431340,00 678340

5 20000 45000 100000 82000,00 431340,00 678340

6 20000 60000 100000 82000,00 431340,00 693340

7 20000 60000 100000 82000,00 431340,00 693340

8 20000 100000 100000 82000,00 431340,00 733340

9 20000 100000 100000 82000,00 431340,00 733340

10 20000 100000 100000 82000,00 431340,00 733340

11 20000 100000 100000 82000,00 431340,00 733340

7856740

Table 5: Projected marginal costs at break-even, for years 1-11

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Figure 1:Break-even point through the years 1-11

Projected Profit & Loss

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1 2 3 4 5 6 7 8 9 10 11

Break-even

Year Euros

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Figure 2: Projected net profits over 11 years of operation

Year

-1000000

-500000

0

500000

1000000

1500000

1 2 3 4 5 6 7 8 9 10 11

Net profits by year

Year Net Profit

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Projected Gross margin yearly

Leaves offsets

YEAR kgr euro Totals

0 0 0 0

1 0 10000 10000

2 20000 50000 70000

3 100000 150000 250000

4 200000 300000 500000

5 300000 500000 800000

6 400000 800000 1200000

7 500000 1200000 1700000

8 500000 1200000 1700000

9 600000 1200000 1800000

10 700000 1200000 1900000

3320000 6610000 9930000

Table 6: Table indicating the projected gross margin for years 1-11.

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Aug. 12, 15 17

Figure 3: Income by product over 10 years of operation

Figure 4: Total Income over 10 years of operation

0

200000

400000

600000

800000

1000000

1200000

1400000

1 2 3 4 5 6 7 8 9 10 11

Income

Year Leaves Offsets

0

500000

1000000

1500000

2000000

1 2 3 4 5 6 7 8 9 10 11

Total income

Year Income in euros

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Aug. 12, 15 18

Projected Cash Flow

YEAR 0 1 2 3 4 5 6 7 8 9 10 Cash from funding b/f 1720000 866660 213320 1320 4320 7320 57655 281185 964715 1648245 2453475

Cash from sales 10000 70000 250000 500000 800000 1200000 1700000 1700000 1800000 1900000

Additional funding

Total cash 1720000 876660 283320 251320 504320 807320 1257655 1981185 2664715 3448245 4353475

Expences

Purchaces

Land 1000000

Capital refund 431340 431340 50000 0 250000 453040 679845 679845 679845 658145

Tax 34625 34625 34625 34625 34625 34625

Cultivation

Expences 225000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000

Labour cost 15000 30000 30000 45000 45000 60000 60000 100000 100000 100000 100000

Management cost 82000 82000 82000 82000 82000 82000 82000 82000 82000 82000 82000

Distribution 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000

Net Cash flow 853340 663340 282000 247000 497000 749665 976470 1016470 1016470 994770 336625

Cash Balance 866660 213320 1320 4320 7320 57655 281185 964715 1648245 2453475 4016850

Table 7:Projected cash flow for cultivating 10 hectares of Aloe Vera over 11

years.

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Projected Balance Sheet YEAR 0 1 2 3 4 5 6 7 8 9 10

Assets

Current

Cash b/f 866660 203320 -68680 -245680 -492680 -742345 -918815 -735285 -51755 653475 2116850

Cash from sales 10000 70000 250000 500000 800000 1200000 1700000 1700000 1800000 1900000

Total cash on hand 866660 213320 1320 4320 7320 57655 281185 964715 1648245 2453475 4016850

Real Estate-buildings-machinery 1000000 1000000 1000000 1000000 1000000 1000000 1000000 1000000 1000000 1000000 1000000

Total assets 1866660 1213320 1001320 1004320 1007320 1057655 1281185 1964715 2648245 3453475 5016850

Liabilities

Borrowing 2720000 2448000 2176000 1904000 1632000 1360000 1088000 816000 544000 272000 0

Capital

Paid in 272000 544000 816000 1088000 1360000 1632000 1904000 2176000 2448000 2720000

Earnings -853340 -

1506680 -

1718680 -

1715680 -

1712680 -1662345 -1438815 -755285 -71755 733475 2296850

Other liabilities

Total liabilities & capital 1866660 1213320 1001320 1004320 1007320 1057655 1281185 1964715 2648245 3453475 5016850

Table 8 : Projected Balance sheet of 10 hectares of Aloe Vera cultivated for 11 years

Management expenses

Estimated yearly at 82.000 euro. Is the fund necessary to engage a team of

professionals to organize-synchronize production-sales, as an on-line

business using information technology, with the unique target to comply with

the initially set assumptions table 2, lines 3-4.

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Aug. 12, 15 20

In collaboration with distribution expenses this fund creates the basic tool to

achieving that target.

Net profits Estimated at 2.248.602 euro (table 4) is the net profits over 11 years of

cultivation with capital amortized. The whole amount is the outcome of the

11th year.

From this net profit we must pay various expenses (such as sales bonuses,

petrol for generator, electricity, telephone, municipality fees, etc) the rest will

give us the net product of the investment of 2.720.000 euro returned at 10%

interest rate over 11 years of cultivation.

A yearly based 224.860euro /year -24.860(various expenses) = 200.000 euro,

in average after tax and capital with interest returned.

Market analysis - Aloe Vera Demand

Aloe Vera is among the few medicinal plants by virtue of their extensive medicinal, nutraceutical and other uses enjoy a major chunk of the market across the globe. The major markets for Aloe Vera and its extracts are Australia, US and the entire Europe. Despite the ideal climatic conditions for the cultivation of Aloe Vera, we have not been able to exploit. The reasons are simple: lack of cultivation and processing know-how. Given the exponentially growing demand for it in the international market, Aloe Vera presents the finest commercial opportunity among the various medicinal plants. Also India is among the few countries gifted with the unique geographical features essential for cultivation of Aloe Vera and other high potential medicinal plants. Yet the country has not realized and reaped the full potential of such plants. The reason is simple: lack of the requisite expertise. Fortunately, the technology is now accessible to individual and corporate entrepreneurs to make the most of aloe through mainstream cultivation.

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Aug. 12, 15 21

A conservative estimate puts the monetary value of current global trade in medicinal plants at over US$60 billion with Aloe Vera holding ¼ of this demand estimating US$15 billion sales globally. With the increasing interest in ‘natural’ products across the world and the resultant upsurge in the demand for medicinal plants, this trade is expected to grow up to 5 trillion by the year 2050. Aloe Vera is among the few medicinal plants by virtue of their extensive medicinal, nutraceutical and other uses enjoy a major chunk of the market across the globe. The major markets for Aloe Vera and its extracts are Australia, US and the entire Europe. A recent study carried out to identify the plants to focus on, in order to posit ion the Indian medicinal plants sector on its growth path with a long-term up to the year 2020, has identified 45 plants. Given the exponentially growing demand for it in the international market, Aloe Vera presents the finest commercial opportunity among the various medicinal plants. Also, India is among the few countries gifted with the unique geographical features essential for cultivation of Aloe Vera and other high potential medicinal plant

Aloe Vera is among the few medicinal plants by virtue of their extensive medicinal, nutraceutical and other uses enjoy a major chunk of the market across the globe. The major markets for Aloe Vera and its extracts are Australia, US and the entire Europe. Despite the ideal climatic conditions for the cultivation of Aloe Vera, we have not been able to exploit. The reasons are simple: lack of cultivation and processing know-how. Given the exponentially growing demand for it in the international market, Aloe Vera presents the finest commercial opportunity among the various medicinal plants. Also India is among the few countries gifted with the unique geographical features essential for cultivation of Aloe Vera and other high potential medicinal plants. Yet the country has not realized and reaped the full potential of such plants. The reason is simple: lack of the requisite expertise. Fortunately, the technology is now accessible to individual and corporate entrepreneurs to make the most of aloe through mainstream cultivation. A conservative estimate puts the monetary value of current global trade in medicinal plants at over US$60 billion. With the increasing interest in

Business plan:




Aug. 12, 15 22

‘natural’ products across the world and the resultant upsurge in the demand for medicinal plants, this trade is expected to grow up to 5 trillion by the year 2050. Aloe Vera is among the few medicinal plants by virtue of their extensive medicinal, nutraceutical and other uses enjoy a major chunk of the market across the globe. The major markets for Aloe Vera and its extracts are Australia, US and the entire Europe. A recent study carried out to identify the plants to focus on, in order to posit ion the Indian medicinal plants sector on its growth path with a long-term up to the year 2020, has identified 45 plants. Given the exponentially growing demand for it in the international market, Aloe Vera presents the finest commercial opportunity among the various medicinal plants. Also, India is among the few countries gifted with the unique geographical features essential for cultivation of Aloe Vera and other high potential medicinal plant

Target markets segmentation strategy Make offers

o to Industries using Aloe Vera leaves as their raw material, such as

GNLD, forEverLiving, e.t.c

o Pharmaceutical firms.

o Cosmetic firms.

Establish a business for selling Aloe Vera leaves in Greece.

Create an e- shop for leaves and suckers.

Summarizing

Aloe Vera planting can be a highly profitable investment assuming a vast

management and marketing policy that will perform sale of the 100% of the

whole estimated production.

Investment has minimum risk assessment and a relatively easy to maintain

business process with low managerial costs.

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Aug. 12, 15 23

Aloe vera plant, is a portable pharmacy. If you just consider that drinking aloe

vera gel could potentially even shrink tumors or grow up new hair when

applied on human head, imagine the future of demand when people will get

more familiar with these fascinating health opportunities that aloe vera could

bring to their lives.

Financially speaking this proposal estimates an average ROI at 20%.

Finally this proposal can be amended by the writer to fit needs, if any of the

general assumptions will change abruptly, during the estimated development

period.

Planning the future: The cost for a basic gel processing plant. For a large plant machinery designed to handle special daily volume units

from aloe leaves and working hours. Only as an example, a farm of 100

stremmas would produce 55,000 kg of aloe vera daily. The equipment needed

to handle the volume that would cost between 400,000 and 600,000 euro.

For a small unit of compute 60-100000 euro (Ready key).

Figure 7: Aloe Vera gel

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Vocabulary

Offsets or offshoots: offspring plants grown as by products, around the mother

plant.

Appendices

Contents What is Aloe Vera

Common Pests and Diseases

Main characteristics of an Aloe Vera plant

Executive summary

Mission

Keys to success

Company

o Startup costs

o Personnel Plan

Products

Financial plan

o General assumptions

o Start-up capital needs

o Purchase of land

o Capital amortization

o Break-even Analysis

o Projected profit and loss

o Projected Gross margin yearly

o Projected cash flow

o Projected balance sheet

o Management expenses

Market analysis - Aloe Vera Demand

Target market segment strategy

Summarizing

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Vocabulary

Figures Figure 1:Break-even point through the years 1-11

Figure 2: Projected net profits over 10 years of operation

Figure 3: Income by product over 10 years of operation

Figure 4: Total Income over 10 years of operation

Figure 5: Store house model of 150 sq.meters with capacity of 100 tons of leaves. Plant need 10 of those.

Figure 6: Model of plant establishments with office and house.

Figure 7: Aloe Vera gel

Tables Table 1: Stremma return of Aloe Vera Barbadensis Miller

Table 2: General assumptions

Table 3: Loan analysis

Table 4: 2000000 euros, loan amortization and accumulated net profits

for 10 years over 10 hectares of Aloe Vera Barbadensis Miller.

Table 5: Expenses through years 1-11

Table 6: Gross margin yearly

Table 7:Projected cash flow for cultivating 10 hectares of Aloe Vera

over 11 years

Table 8: Projected Balance sheet of 10 hectares of Aloe Vera over 11 years of operation

Dated: 12-8-2015

Written by:

Konstantinos P. Anastasiadis

Business consultant (M.Sc.)

Athens-Greece, Mobile: 6982043751, Web site: vresto.eu

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