Welcome Sunflower Oil Mills Limited

26 Jul 2017

 

Wellcome Sunflower Oil Mills Limited.

Bangladesh is importing edible oil from 1.8 million to 2.0 million ton/year. About 50% of this quantity is palm oil and 30% Soybeen. Rest 20% are sunflower, canola, rapeseed, corn oil etc. The recent study of WHO shows that sunflower oil is the best oil in the World for human consumption. The population is growing very fast in Bangladesh and about 6%-8% oil consumption is growing every year. The middle class population is growing day by day. They are educated and health conscious. It is well known that ALL DISEASE START FROM OIL AND WATER.

Refined-Sunflower-Oil

People are changing their foods and eatery habits. To be healthy —SUNFLOWER IS THE BEST OIL EVER.

Sunflower is a (Helianthus annusl) is a newly introduced oil seed crop in Bangladesh. It is gaining popularity among the consumers and farmers. As consumption is going up, the farmers are also being encouraged to grow up sunflower oil seeds. Its oil content is from 39-50%.It is more than any oil seed. Its extraction is also easy. In the last year, the production of sunflower seed were more than 40 000MT.The quality of seed in Bangladesh is very good. From 1.0 Kg of seed we can get from 500-600ml. of oil. The cultivation is growing very fast because sunflower plantation does not need irrigation. Our weather is very suitable for better yield of seed. Early sowing (October-November) produces 2500kg seeds/ha. It is the best ever result derived from Ishwardi, Pabna. Now seacoast are the best place where water is salty and no irrigation is possible.

The sponsors of the project have got a number of valid reasons for taking up the project with sophisticated technology as follows.

Establish an industrial unit which is not exist at present  in Bangladesh.

Vast market of the products in the country.

Increasing market demand of the products

Minimum labor cost.

Govt.  priority and patronization in setting up agro-based industries.

Opportunity to serve the mass level people with health products.

High viability of the project.

generate employment for skilled, semiskilled and unskilled worker and to make worker self-sufficient.

create opportunity to income for women.

establish enough backward linkage industries, this will inspire the entrepreneurs to set up similar industries to            boost up this sector.

contribute to GDP.

earn a reasonable rate of return on investment to benefit the sponsors.

With this point of view, the sponsors of Sunflower Oil Mills Company Limited have decided to establish a most modern full cycle including extraction, refining, dezodorization, winterization sunflower oil mill with capacity of 50MT of seed/24 hours. The finished product (refined sunflower oil) will be approx. 20MT 24MT/24 hrs.

managementaspect

Sponsors of the company

The sponsoring directors of the company are five and their distribution of shares is as follows:

Sl.#

Name of the Sponsor

Position

% of share holding

1

Ratnendu Bhattacharjee

Chairman

2

Dr. Ashok Kumar Gupta

Managing Director

3

Sadhan Kumar Das

Director

4

Md. Harun

Director

5

Julfiquar Ali Jowel

Director

Total

 

Table 2: Sponsors of the Company

Background of the Sponsors

Ratnendu Bhattacharjee, aged 38, is the Chairman of the company. He has completed Masters from National University, Dhaka, Bangladesh. He is well experienced in business management and earned considerable success

Having been closely associated with different business activities, has acquainted considerable experience in business management.

Dr. Ashok Gupta

Dr. Ashok Gupta, aged 49, is the Managing Director of the company. He has completed Masters in Business Administration (MBA) from International University of Fundamental Studies (I.U.F.S). St. Petersburg, Russia. He has also completed DBA.

He is a Academician at   International   Informatization   Academy,   Moscow Russia on 2016 and Member of IIA, United Nation. He is a visiting   professor   (Honorary)    at Stamford University Department of Marketing from 2003.

Below is snapshot of his involvement in commercial  and social activities in different organization in Bangladesh and abroad. 

In Bangladesh:

  • Managing Director of Bangladesh Trading Corporation
  • Managing Director of Global Energy Ltd.
  • Founder & Chairman of Nature Power Ltd.
  • Land  Lord  &  Trustee  of  Stamford  University Bangladesh  51,  Siddeshwari, Dhaka.
  • Chairman Euro Asia Housing & Development Ltd.
  • Founder- Chairman -An initiative for the welfare of physically & mentally handicapped- SOS, Signature of sacrifice (NGO).
  • Founder, President-First Aerobatic Holistic clinic in Bangladesh.
  • Founder- Liberty club in Barisal.

In Abroad:

  • Chairman, Russian  of Bangladesh Education &Cultural Center.
  • Author, V.V. Putin The Top Man OF the Planet.
  • In 1993, Elected as chairman chamber of commerce (SPB) St. Petersburg, Russia.
  • In 1995, Elected as the president of chamber of commerce organized by NBR in CIS Countries, Moscow (Russia).
  • In 2000, Elected C.E.O Electrification Project. Siberia for East Asia under the president program of Russian Federation.
  • In 2000, Elected Adviser, young lawyer Association of Russian Federation, Under the Ministry of Law.
  • In 2002, Elected C.E.O, International Land Housing, and Reform committee of Russian Federation, Under the President Department of Russian Federation.

He has experience in Electrification, Water Purification, Micro-Credit and  Forestation.

Sadhan Kumar Das

Sadhan Kumar Das, aged 43, is one of the Directors of the company. He has completed Masters of Commerce in Management from Dhaka University, Bangladesh in 1996.

he has adequate business experience in management aspects. The experience that he earned during his business activities is expected to be worthwhile to the proposed project’s management.

Md. Harun

Md. Harun, aged 49, is one of the Directors of the company. He has completed Bachelor of Arts (B.A).

He is well experienced in business management and earned considerable success. He is hardworking, honest and energetic.

Julfiquar Ali Jowel

Julfiquar Ali Jowel, aged 61, is one of the Directors of the company. He has completed Bachelor of Arts (B.A) from Dhaka University, Bangladesh.

He has long experienced in business management and involved in different social activities. He has great know in this line of business. Due to his knowledge, hardworking ability and honesty, known as successful businessman.

Management of the Company

Managing Director (MD) will look after all activities of the company. General Manager (GM) will be responsible for day-to-day activities of the company. The Board of Directors headed by MD will manage the overall affair of the company and they will be guided by the memorandum of Article of Association.

The directors of this company are well experienced which will be helpful to run the unit in respect to input procurement, qualitative & quantitative production, quality control and marketing of finished goods. MD, DMD and other directors are well educated and have an adequate experience in manufacturing business. So, they would be able to mobilize their part of equity for investment in the project.

The kingpins of management are professional personal who are highly qualified and widely experienced in their respective professional fields. They are enjoying appropriate freedom for decision-making.

Manpower Requirement

The project will generate employment opportunity of Eighty (80) people. Two wings, namely, Administration and Technical will cover accounts, procurement, production and marketing in addition to general administration of the project. There will be separate target based sales team.

Management and Organization

The overall management authority of the company is vested by the board of directors of the company, which has been constituted. A brief introduction of the promoters already been incorporated in this chapter.

The board will formulate policy decision, review and monitor action program and progress of operational performances periodically and give decision on such matters. The board also will delegate its authority to a body of executive, forming executive committee end to the chief executive and other senior executives to enable to make on the spot business decisions for day-to-day operation.

The company will depend on heavily on the hired technical and professional management personnel who should be carefully recruited. A very strong term of professional management personnel having wide experience will be recruited as the project will need sufficient experienced and skilled professional to run such project. As such, the company will be in advantageous position to mobilize necessary quality personnel.

The organizational structure may be conceived following line and stag method. The chief executive, the senior executives at all levels should have defined job responsibilities to realize the objectives and goals set.

Authority of recruitment and promotion up to mid-level executives may rest with the board and the chief executive may have the authority to recruit junior and non-executives as well as other employees with the assistance of unit head / departmental head. Decent and respectable remuneration package has to be offered to the services of highly qualified and experienced professional.

Strong staff committees will be formed to co-ordinate management efforts at all levels effectively and to establish vertical and horizontal integration of the management efforts and communications system.

An appropriate MIS is considered essential for dissemination of eventual information at various management and executive levels, Inventory control is another area where strong and efficient management effort is needed.

Total of 80 employees will be recruited for operation of the project.

technical aspects

The Project

The project has been design to produce sunflower oil and by product Oil Cake, Husk and Liquid Technical Soap.

Project Capacity and Product Mix

The Edible Oil plant will start operation at a lower production capacity to allow time for market penetration and skill development of production workers. Thus, production will start at 80% of installed capacity during the first year of operation, and then will grow to 90% and 100% of full capacity in the second year, and third year and then after.

The annual attainable capacity of the proposed project based on three shift operation (8 hour per shiftX3=24 hours) per day and working for 300 days in a year the unit will be able to produce the refined sunflower oil around 7603MT (8 211 240 Litres per annum.), Oil cake 6220MT., Liquid Soap-259MT/yr., Process Loss86MT/yr.

The designed capacity and list of product of the project is given below:

Sl

#

Product Name

Capacity

(MT/year)

1

Edible Oil

7603

2

Oil Cake

6220

3

Husk

3110

4

Liquid Soap

259

Table 4: Product Capacity

Material Cost

The basic raw material required for the production of edible oil is Sunflower seed. This oil seed is grown in 18 Districts of Bangladesh. Barisal, Patuakhali, Comilla, Rajshahi, Pabna, Gazipur, Natore, Dinajpur and others. Its production yields are very high about 2500Kg/Hector. In 2015 only in Patuakhali district 45000 Hactor lands were cultivated Sunflower. Only in Patuakhali production was 29000MT. All over Bangladesh production of sunflower seed was about 300000MT (data supplied by Khamar Bari, Dhaka). Whereas our annual demand is about 15000MT/year. Sunflower cultivation need no irrigation. Sunflower production is growing in Bangladesh in salinity coastal area. FAO is very much encouraging the cultivation of sunflower for climate change.

Materials and chemicals, the raw and auxiliary materials details are given in the below table.

Raw Material Cost

SL

No

Name of the Product

 

Yearly

Requirement (MT)

Price (MT)

Total Amount Per Year

1

Sun Flower Oil Seed

51,840

32,375

1,678,320,000

 

Location

The project will be located in sonargoan, Narayangonj. The project is established on own premise at Village-Mozerchar, Mohajompur, Union-Jampur, Thana-sonargoan, District-Narayangonj. Total area of the land is 18900 sft (43.6 decimal) of which 10,000 sft  will be built area for production and administration. The value of the land has been estimated BDT 21,600,000@ BDT 1500/- per sft and land development cost is BDT 10,800,000/-@ BDT 750/- per sft. The project land is developed in a way to ensure the availability of various infrastructure facilities and to make it fully free from flood.

The project site enjoys an excellent communication network covering many districts including the Capital City. The proposed site is enjoying all the infrastructure and utility facilities such as power, water, gas and road communication. The location is commercially viable. It will also ensure the availability of labor at low wages. Registered office of the company located at Dhaka.              

Area of Project and Factory Building

The factory area of the building is 10,000 sft. Consisting of raw material, packing section, warehouse, constructed quarters and finished goods warehouse. All the civil works such as main factory buildings, boundary walls gate, internal road, drainage, water supply system etc. have been built. The total cost of the above civil works is BDT              15,000,000/-. Cost of electrical installation has been included with the cost of respective buildings. The building will be made by steel structure size: 40m X 20m X 7m = 800m².           

Source of Technology

Manufacturing companies in India, China, Korea and these in European countries have long years of work experience in supplying edible oil producing equipment and machinery. But Russia is the largest producers of Sunflower Oil in the World, it also produces very good quality of machinery and equipment

Machinery

The principal production equipment and machinery required for producing sunflower edible oil are vacuum cleaner, storage silos, screw conveyors, elevators, automatic weightier, intermediate silos, roller mills, screw presses, settling tank, filter press, degumming tank, deodorizing tank, laboratory equipment, etc.

The project will be equipped with new, most modern & sophisticated complete and balanced machinery with all auxiliaries and equipment’s. All machinery (both local and imported) of the project has been acquired from local supplier. So, no import tax was given to any of the machinery.

For the selection of proposed, machinery quotation from different local indenters have been procured on the basis of performance considering versatility durability, cost benefit and improved operational performance of machinery. Total cost of local and imported machinery stands at BDT 120,000,000/-. List of machinery is given below:

 Technical Service and Quality Control

Technology of sunflower oil processing is not very familiar in the country. The technologist and experts will come from supplier company and train of manpower. Moreover, the sponsors will recruit necessary technical personal for smooth operation of machinery and quality control products.

Erection and Installation

Erection & installation of all machinery have been done under the direct supervision of expert/engineers from supplier company. The sponsors will make agreement with supplier in this regard.

 Production Process

Oil milling is an old technology which was started with very traditional mortar and pestle crushing. This was followed by hydraulic extraction, the screw pressing, and in the 20th century, by chemical extraction.

Mechanical extraction is common in developing countries while solvent extraction is more widely used in developed countries and in countries which are large producers of oil seeds. The oil mill for the anticipated project is to employ mechanical extraction and batch refining. The technological process of producing edible oil from sunflower seeds involves the following operations:

a)    Seed cleaning and preparation

b)    Oil extraction (Pressing)

c)     Oil refining and

d)    Winterization

e)    Dezodorization

f)     Bottling & packing.

 Quality Control

Now-a-days quality and price are the pre-conditions for marketing product in the competitive local/world market. The high quality raw materials are required for producing products for the local and export market. Considering the above paint in view, the project has been planned to be equipped with most-modern quality control equipment and systems.

Manpower

The company has very competent human resource pool. Manpower required for the plant is both for administrative activities and production. The total manpower required is 80 persons. Of this production workers are 41 while the rest are administrative and supervisory staff.

The requirement of technical, managerial, personnel and worker with their wages is given below. Total expense for wages and other facilities for the first year operation including MD, CEO,  and other high official has been estimated BDT 16,770,000/-. Total yearly wages for mid-level official and worker of head office and factory has been estimated BDT 13,416,000/-. Rest of the amount will be kept for the wages of MD, CEO, CFO,CMO, festival bonus, profit bonus and other incentive. The personnel have been recruited for three shift operation of 8 hours each shift per day. Detail of manpower estimate is given below:

 Utility

The major inputs required for the edible oil plant are electricity, water and fuel oil. Electricity is used to produce motive power to production equipment, provide power to sockets, lighting systems and other auxiliary equipment. Water is required for steam generation, drinking and general purposes. Fuel oil is required as a source of energy for steam generating equipment. Annual requirement of utilities at full production capacity is shown in the below Table.

 Safety Provision

The plant will be adequately equipped with safety provision like firefighting equipment’s. First Aid medical etc. cost had been estimated at BDT 200,000/- for the purpose

Operative Life of the Project

Oil milling is an old technology which was started with very traditional mortar and pestle crushing. Though, the technology is new in Bangladesh but proposed setup with the new equipment is expected to perform smoothly at least 15 years without major BMR.

  Marketing aspects

  Selling Price

Unit selling price has been estimated on the basis of raw material and overhead cost. Also consider prevailing mark price which is most important this. Promotional price will be offered at beginning of marketing and special moment in a year.

Name of the Products

Unit Price

Edible Oil (ltr)

200

Oil Cake (kg)

50

Husk (kg)

30

Liquid Technical Soap (ltr)

100

Table 10: Product Selling Price

Product Description And Application

Sunflower is a plant of the genus “Helianthus” cultivated for its seed. Sunflower oil is pale yellow semi-drying or drying fatty oil expressed from the seeds of the common sunflower and used chiefly in foods, soaps, varnishes, and paints. Sunflower oil is finding wide application both at home and foreign market.

Past Supply and present Demand

Refined sunflower oil is edible and is considered equal in quality to olive oil. Cruder sunflowers oil is used for making soap, candles, varnishes and paints. Sunflower oil is supplied to the Bangladesh market exclusively (100%) from import. Since the domestic production data does not show any figure, the import statistics obtained from the customs Authority is used to estimate the current unsatisfied demand. In addition, it is believed that the quantity of oil produced in Bangladesh from sunflower seed ZERO since Palm Oil and Soyabeen Oil are the two dominant in import in the market.

Projected Demand

The demand for edible oil is directly related with the growth of population, income and price. Considering the three factors, demand is forecasted by taking 6%-8% annual growth rate. The present demand in domestic market is 80000MT/yr. which only 4% of total import of edible oil in Bangladesh(present import of edible oil is about 2 000 000MT/year. Our production capacity is only 7603MT/year. THERE IS NO SUNFLOWER OIL MILL IN BANGLADESH.

Pricing and Distribution

The price for one liter of edible sunflower oil at Dhaka ranges from BDT 260/- to BDT 270/- in retail. We like to market the sunflower oil at BDT 200/- per Liter.

The product will reach consumers through retail shops who will receive the product from agents of the factory.

Government Policy

All products are complaints with the government policy. The company required BSTI approval for all types of products. Besides that, Halal Certificate from Baitul Mukaram Mosque will be obtained for all products. Government also give 3 year tax holiday.

 Sales Promotion

The company will take a number of effective ways and means, as follows, to motivate and encourage the products promotional efforts:

Offer of attractive incentives to the sales personnel.

  • Offer of incentives to the members of the distribution channel that is the direct sellers of the products to consumers
  • Offers of special price discounts to the channel members on target achievement
  • Offer of training courses to channel members to develop selling skills Invitation to channel members to visit places of interest at company cost

There may be many other strategies that the company would adopt to enhance the sales promotional activities depending on situation.

 

 

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