A feasibility study on Romero Repellent

Executive Summary. Market. The group shall establish a manufacturing business and shall be named CDHerbs, Inc. CDHerbs, Inc. shall pioneer the production of chemical-free mosquito coil. This product is made up of Romero (a medicinal herb which thrives in semi-temperate countries like the Philippines), starch, and sawdust, and shall be known as Genie Katol. From the survey conducted, CDHerbs foresees that Genie Katol will be widely accepted by the current mosquito coil users, as 89.5% of those surveyed are most willing to try this new product. A supply-and-demand analysis was also conducted by the group using primary sources only, since secondary data from government offices and existing companies were not made available to the group. The respondents were randomly chosen from the B to D classes in Metro Manila because these classes compose the target market of the company. The result of this analysis shows that there is space in the market for Genie Katol. Genie Katol shall be sold for P 380 per case -- a relatively competitive price when compared to the current price of P 400 per case of Katol. The cases will be sold directly to wholesales, as well as selected retailers. Moreover, the promotional strategy that will be adopted will be via AM radio stations. Technical. The three basic ingredients of Romero repellent are starch, sawdust and Romero plant -- its flowering tops, leaves and stems. The starch will be sourced from outside suppliers for P 710 per sack. The sawdust will also be sourced from outside suppliers within Metro Manila for free. Meanwhile, CDHerbs will provide for their own Romero plant requirement. The company will have a plant in Pagsanjan, Laguna. The plant is the site of the main office, the Romero plantation and the factory. An extension office in Caloocan will serve as a venue for transacting business directly with customers as well as suppliers. The manufacturing process starts with raw materials gathering. It then proceeds to raw materials preparation. This includes grinding of dried Romero plant parts, and cooking of starch. The raw materials prepared including the sawdust are then mixed through machine mixers. The resulting mixture is automatically transferred to the molding trays which are subsequently placed in the oven baking. The trays after baking are left to cool for some time and afterwards delivered from the work in process department to the packaging department for wrapping and encasing. One case of Genie katol contains 60 boxes (the standard number in the market) and each box in turn contains 12 coils -- 2 coils more than the current standard number of 10 pieces per box. The finished goods are either transported to the extension office in Caloocan, or delivered directly to wholesalers and selected retailers within Metro Manila using the company\u27s own delivery truck. Financial. Initial costs will be spent for land, plant construction, machines, equipment and tools, and other regular costs for setting up one\u27s own business such as business permits, licenses, and filing fees. An initial investment of P 8,779,400 is required to meet the necessary expenditures. The capital shall be 70% equity and 30% debt. The financial ratios obtained by the company through assumptions are very impressive. The company was able to register an average return on investment (ROI) of 20.79% for the five-year period. The payback period for the company\u27s investments is approximately three years. The company will also declare dividends from time to time. As the business expands, the company\u27s results of operations will become more aggressive and competitive. Thus, the investor will definitely get more than what he could ask or hope for