Business Plan on Grease Manufacturing

Topics: Manufacturing, Lithium-based grease, Lubricant Pages: 44 (12668 words) Published: April 17, 2013
Executive Summary
SWIFT GREASE PVT. LTD., is grease manufacturing organization. It is established with a vision to provide good quality grease to all its customers and to ensure that all industries that use cheap quality grease, to reduce cost and compromise with life of the machinery, will also use good quality grease and need not compromise with the life of machinery at same prices. The factory of SWIFT GREASE Pvt. Ltd. will be situated at Jeetpur, Bara, Nepal and all its official operation will be directed from Kathmandu. The company will produce the grease, whose quality is equivalent to that of international standards and prices will be much more competitive than of international brands. The company will limit its market to the boundary on Nepal for the first five year of its operation. All industries and individuals who require grease are the company’s main customers. The market size of grease is around 3000MT, and company have adopted conservative approach and forecasted its sales in first year to be only eight percent which ultimately in five year is estimated to increase to ten percent. There are various marketing strategies which company will adopt. It includes the mix of newspaper advertisement, TV commercial, FM advertisement, market surveys and many more. For the same, company has set aside a budget of Rs 1,162,000. The selling price has been calculated on the basis of cost plus pricing method which is prevalent in grease industry. SWIFT GREASE Pvt. Ltd. will be manufacturing only lithium base grease, the production process is given in details in section 4.1 of the report. The total fixed asset required in the industry is around Rs 20,778,000, the depreciation such calculated is around Rs 111,217 per month and Rs 1,334,600 per year. The machinery will be imported from Indian company named FREGMAIRIES Engineering. The planned production for first year is eight percent of total market demand which sums to 240 MT per year. To obtain this target, the company has to produce 800 KG per day. The plant will be operating in single shift. Some of the raw materials required will all be procured from India and China. Thus while calculating the cost of raw material per unit sums up to NPR 98.875. Total number of labor of employees who will be required in this industry sums up to twenty one and the cost of labor per month thus sums up to Rs 298,000. The factory overhead expenses sums up to Rs 551,217 which leads the cost of production per unit grease to be Rs 128.35. The company will add the markup percent of 23.07% and thus the selling price after addition of interest and other cost sums up to Rs 175.00 per unit. The plant is estimated to be in operation within less than one year. The total pre operating expenses sums up to Rs 84,000. The total fixed assets required for office is Rs 18,95,000, the depreciation of which is around Rs 3,96,000. The administrative expense is around Rs 73,700. Total capital requirement for the company is Rs 38,307,013. Financial plan includes that 58.23% of equity which sums up to Rs 22,307,013 and 41.76% of loan is to be raised, it sums up to Rs 1,600,000. Company has decided to have term loan of 5 years. For the first year the break-even percent is around 62 percent, which further reduces in course of time. The return on investment, similarly, increases from 12.47% to 23.64% in due course of time.

1. Company Overview
2.1. Vision
To be the leading Nepal-based independent manufacturer of high quality, lithium based and other specialized grease. 2.2. Mission
To manufacture and supply superior quality grease products which provide which provide value added performance for our customers. We are dedicated to a professional sales force with technical support, and continuous improvement of our people, products and services. 2.3. Values & Culture

Swift Grease is actively developing a culture that is supported by values and behaviors that respect the company's...
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