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A GLOBAL / COUNTRY STUDY AND REPORT
ON “A GLOBAL COUNTRY REPORT ON LEGAL AND
POLITICAL SITUATIONS AND BACKGROUND OF THE COUNTRY THAT SUPPORT THE DEVELOPMENT OF
BUSINESS IN BURMA”
Submitted to Kalol Institute of Management
IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ASMINISTRATION
In
Gujarat Technological University
UNDER THE GUIDANCE OF Ms. Nidhi Desai
Submitted by
ROLL NO:- KIM – MBA – 099 TO 154 (DIV – C)
Batch: 2011-13
MBA SEMESTER III
Kalol Institute of Management MBA PROGRAMME
Affiliated to Gujarat Technological University Ahmedabad
November, 2012
2
PREFACE
In Today’s scenario of business, International Business plays a vital role for the
entrepreneurs.
During several decades, International Business has been growing considerably
in India. Enterprises are going internationally to earn more revenue for the
business. Enterprises are spanning their wings strategically for increasing the
business.
Before going internationally, managers need to find the pros & cons for the
particular country and need to evaluate the country strategically.
In spite of our best efforts there may be errors or omissions and commissions,
which may please be excused.
3
ACKNOWLEDGEMENT
Apart from our efforts, the success of this report depends largely on
encouragement & guidelines of many others. We take this opportunity to express
our gratitude to the people who have been concerned in the successful
completion of this project.
We would like to show our gratitude to Dr. Tejas Dave, Programme Co-
ordinator, Kalol Institute of Management, for giving a wholesome feed-back &
valuable guidance to complete the project.
We express our sincere gratitude to our co-ordinator Ms. Hetal Jani, & our
guide Ms. Nidhi Desai, without their valuable guidance & inspiration; we would
not able to finish this project. We are grateful to them for their prolonged interest
in our work and excellent guidance. We are thankful to respondents for giving
their time to contribute their opinions to us.
We are also thankful to the entire KIM family for their cooperation and support.
We are extremely thankful to our parents for giving their constant and precious
guidance, support and motivation during the course of completion of our project.
The friends, who always bear and motivate me throughout this project, we are
thankful to them to also.
4
EXECUTIVE SUMMARY
The main aim behind preparing the global country report was to study the
environment of a country and turn challenges into opportunities through forming
country specific strategies. The global country report on Burma includes
economic, social, cultural, technological, infrastructural, and environmental
background of it. The SWOT analysis is a necessary element of the research for
preparing of any level of strategic plan. The PESTEL analysis is done to know
the macro-environment of Burma and to use it as a strategic tool to understand
market growth or decline, business position, potential and direction for operations
in Burma.
In This Report we have covered Overview of Country, Economical Overview,
SWOT & PESTEL Analysis of country and Business model of Comparison
between Gujarat, India & Burma.
In this report we have covered how many opportunities in Business in Burma.
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TABLE OF CONTENTS
PART
SR.
NO
INDEX PAGE
NO
PREFACE
ACKNOWLEDGEMENT
EXECUTIVE SUMMARY
1 OVERVIEW OF COUNTRY
1.1 Introduction of Country 2
1.2 Demographic 3
2 ECONOMY OF BURMA
2.1 Economic Overview 7
2.2 Existing Trade & Business 8
3 SWOT ANALYSIS
3.1 Strengths 11
3.2 Weaknesses 12
3.3 Opportunities 13
3.4 Threats 14
4 PESTEL ANALYSIS
4.1 Political Analysis 16
4.2 Economical Analysis 17-19
4.3 Social Analysis 20-23
4.4 Technological Analysis 24-27
4.5 Ecological Analysis 28-30
4.6 Legal Analysis 31
5 SCOPE OF BUSINESS
5.1 Growing Industries 35-41
6
6 Business plan
6.1 FORESTRY INDUSTRY 43-58
6.2 TEXTILE INDUSTRY 59-81
6.3 SOFT DRINK INDUSTRY 82-89
6.4 COCONUTS INDUSTRY 90-112
6.5 RUBBER INDUSTRY 113-134
6.6 HANDICRAFT INDUSTRY 135-140
6.7 TRANSPOTATION INDUSTRY 141-154
6.8 TOURISUM INDUSTRY 155-174
BIBILOGRAPHY 175
1
CHAPTER:- 1
OVERVIEW
OF
BURMA COUNTRY
2
1.1 Background History of Burma
Burma is situated in Southeast Asia and is bordered on the north and north-
east by China, on the east and south-east by Laos and Thailand, on the south
by the Andaman Sea and the Bay of Bengal and on the west by Bangladesh
and India. It is located between latitudes 09 32'N and 28 31'N and longitudes
92 10'E and 101 11'E.
The civilization in Burma started in the 1st Century. The first Empire was
established in 11th Century in the Pyu Kingdoms. The second Empire was
established in the mid of 16th Century by King Bayintnaung. The third and the
last Empire was established in 1752 by King Alaungpaya. In the 19th Century,
Burma was invaded by British. During the Second World War, Burma was
taken over by Japanese for almost three years.
Burma developed as a sovereign state on 4th January, 1948 named as the
Union of Burma. Sao Shwe Thaik was the first president and U Nu was its first
Prime Minister. Burma became an independent country, after the elections
held in 2010, named as the union of Burma. At present, the president of
Burma is Thein Sein.
Burma Profile
Capital Naypyidaw
Largest City Yangon (Rangoonis)
Official Language Burmese
Area 676,578 km2
Population 545,84,650 (2012 est)
Currency Kyat
GDP 5.5% (2011)
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1.2 DEMOGRAPHIC DETAIL OF BURMA
Population of Burma is approximately 54,584,650 (July 2012 est.) .
There are various languages spoken in Burma like Chinese, Kachin, Kayian, Shan and also Cantonese, mandarin, Hindustani, Urdu, British English.
Population Concentration of various ethnic groups:- There are nine major
ethnic groups:
1. Bama - 89%
2. Shan - 9%
3. Kayin - 7%
4. Rakhine - 3.5%
5. Chinese - 2.5%
6. Mon - 2%
7. Kachine - 1.5%
8. Kayah - 0.75%
9. Other - 4.5%
Religions
1.Buddhism : 89%
2.Christianity : 4%
3.Islam : 4%
4.Others : 2%
5.Hinduism : 1%
With the exception of the Chinese, Indian, and Bengalis, each minority group
occupies a relatively distinct area.
4
POPULATION OF BURMA 54,584,650 (July 2012 est.)
POPULATION OF INDIA 1,220200000 (1.22billion) (2012 est.)
AGE STRUCTURE OF BURMA (2011 Est.)
AGE STRUCTURE OF INDIA (2011 Est.)
POPULATION GROWTH RATE OF BURMA (2011 Est.) Population growth rate 1.07%
NET MIGRATION RATE (2011 Est.)
Net migration rate -0.3migrant(s)/1000
population
URBANIZATION Urban population
34% of total population (2010)
Rate of urbanization
2.9%annual rate of change(2011-15 est.)
RURAL
Rural population 66.10% of population (2010)
Age group Percentage Male Female 0-14 27.5% 7,560,859 7,278,652 15-64 67.5% 18,099,707 18,342,696 65year and above
5% 1,184,291 1,533,599.
Age group Percentage Male Female 0-14 29.7% 187,450,635 165,415,758 15-64 64.9% 398,757,331 372,719,379 65year and above
5.5% 30,831,190 33,998,613
5
MAJOR CITIES – POPULATION Rangoon 4.259 million
Mandalay 1.009 million
Nay Pyi Taw (capital) 992,000 (2009)
GENDER RATIO At birth 1.06 male(s)/female Under 15 years 1.04 male(s)/female
15-64 years 0.99 male(s)/female 65 years and over 0.77 male(s)/female Total population 0.99 male(s)/female (2011 est.)
)
INFANT MORTALITY RATE (2011 Est.) Total 47.74 deaths/1000 live births Male 54.51 deaths/1000 live births Female 40.57 deaths/1000 live births
HEALTH EXPENDITURES OF BURMA
2% of GDP (2009)
6
CHAPTER 2
ECONOMY
OF
BURMA
7
2.1 Economy of Country
Population : 53,999,804
Population Rate : 32.7%
GDP : $ 82.72 billion
: 5.5% growth
Unemployment : 5-year compound annual growth
: 5.7%(2010),4.9%(2009)
Inflation (CPI) : 8.9%
FDI Inflow : $756.3billion
Fiscal year : 1 april and 31st March
Trade Organisation : WTO ASEAN
Labor Force : 32.53 Million in (2011)
Public Debt : 8.145 Billion in (2011)
LITERACY OF BURMA (2008 Est)
Total literate population 91.9% Male 94.7% Female 89.2%
Reasons for high literacy rate in Burma
Children who are in age 5-10 require to go to school. Educations of
middle schools are free and high schools have fees charged.
Universities and post secondary educational facilities are in Yangon and
Mandalay which are major cities of Burma.
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2.2 Existing Trade & Business
Types of the Business Organization can apply for Import &
Export Business
The following are the types of the Business Organization can apply to the
Directorate of Trade of registration for Import and Export business are under:
Partnership Firms
Co-operative Societies
Sole-proprietor
Limited Companies
Foreign Companies registered under the Burma Companies Act
Registration of Importer and Exporter
The following are the documents required for the registration of importer and
exporter:
Application Form with Letter Head of Company
Original Copy of MOA and AOA
Registration Form of Exporter and Importer
Company Registration Office copy for the issuing Certificate of
registration.
Certificate of Membership of UMFCCI
Certificate of Company Registration with Two copies
Form 26 certified copy which is recognized by Company Registration
Office
9
Licensing Authority of Import& Export
The right to issue import and export license and permits is assigned to
Directorate of Trade & Department of Border Trade under the Ministry of
Commerce.
Directorate of Trade is sanctioned to issue import and export overseas trade.
Department of Border Trade is sanctioned to issue import and export license
for cross border trade.
Export Commodities of Burma
The main commodities exports by Burma are as under:
Jade & Gems
Pulses & Beans
Natural Gas
Rubies
Rice
Sapphires
Wood
Commodities Prohibitions for Export
At present, following are the commodities that are prohibitions for export by
overseas and border trade are as under:
Agricultural Products – Sesame Oil, White Sugar, Cotton
Forest Product – Rubber
Marine Products – Shrimp bran
Minerals & Metals – Petroleum, Gems & Jewellarys, Diamond, Gold,
Bronze, Silver, etc.
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CHAPTER :- 3
SWOT ANALYSIS
OF
BURMA
11
3.1 STRENGTHS
In Burma more number of people working in agriculture sector, so that
labour force high in agriculture activity.
The Burma is blessed with natural scenic beauty & contains more than
2000 kms coastline with beautiful beaches.
There are 40 national parks, wildlife sanctuary & protected area under the
forestry ministry & also fifteen national parks have been registered in
ecotourism sites.
In Burma, many family living in rural are so they have not paid more
money for electricity so they have use the wind power energy for the
power creation and buttery charging.
In Burma transportation facility provide at cheapest rate.
Burma’s people are more aware on education therefore literacy rate is
high. (91.9% literacy rate in Burma and 74.04% literacy rate in India.)
Burma export following commodities Jade and Gems, Clothing, Rice, Fish,
Pulses and Beans, Wood Product, Natural gas.
The procedure starting new business easy same as India because not
compulsory registration for the new business so that time saving and not
require more time to start new business.
Telecommunication services are well development in Burma.
As compared to India the rate of commercial tax is less in Burma.(2 % in
Burma and 8 % in India.)
Burma has big industry of mining, timber, biodiversity and oil and gas and
make easily trading with other country.
Burma’s people are using natural resources for performing their arts and
crafts.
Burma offers variety of sport activities for tourism such as sky diving, bird
watching, and water rafting. In Burma tourist shopping specially like
handicrafts. Gems & clothes.
12
3.2 WEAKNESSES
The conflict between the ethnic groups in some parts of the country.
The Burma workforce lack expertise & exposure to a competitive market
environment. In Burma’s people also lack of technical knowledge
especially for infrastructures.
Underdeveloped financial sector.
In Burma, general state health services are very poor.
Limited economic diversification.
The country has manpower to support tourism industry for example there
are 6,000 people who have got guide license, but only 300-400 are
working because of the limitation of available work and tourists.
For the moment Burma is the place unlike most other tourist destinations.
Travel is sometime unpredictable because the essential infrastructures
such as efficient good management, transport, communication and hotels
are still far from near complete.
Myanmar is a difficult country to sum up in terms of weather since it has a
varied terrain with tropical beaches, lowland plateaus and the shoulders of
the Himalayas. However, it is considered as a 12 year destination.
Lack capital to undertake the necessary programs to develop tourism.
Travellers to Burma can visit only officially designated tourist areas.
Permission is needed for treks to remote parts of the country. The process
of permission takes about seven days.
13
3.3 OPPORTUNITIES
Different kinds of water resources project has been constructed in Burma.
This types of resources project like a ground water taking out projects,
river pumping projects, clean gates. Those infrastructures were
implemented with especially for irrigation in combination with hydropower
generating for industrial and domestic water supply environmental
sustainability.
Mobile Industry is one of the growing industries in Burma.
Potential for investment in a range of sector. As it modernizes and
liberalizes its economy, Burma offers opportunities for investors both
foreign and domestic to different sector.
Potential for renewal source of energy.
Burma’s strategic location between region’s two emerging economic
superpowers and between asian sub regions provides enormous
opportunities to benefit for region economic activity.
Burma’s people have a liking towards handcrafts. But only a few
handicrafts are available there. Therefore there is an opportunity of
promoting the variety of handicrafts from Gujarat especially Kutchch.
Good investment potential in health sector.
14
3.4 THREAT
Uncertainties about socio-economic stability and a lack of definite signs of
reform deter some foreign investors.
The economic malaise of the past three decades has fuelled an extensive
black market in the country.
Risk from economic reform and liberalization.
Risk from climate change.
In Burma literacy rate is high but higher education awareness is low.
Tension from internal ethnic conflicts
Negative images that are exaggerated or presented in their own point of
view by international media such as the issues of human rights and travel
advisory.
In 2009 Daw Aung San Suu Kyi, speaking in the context of the junta's
promotion of 1996% 2010 as 'Visit Myanmar Year', argued that it was too
soon for visitors to come "pouring in" to Myanmar.
Many NGOs urge the international community to boycott the country. They
argue that revenue from tourism supports the Government financially, and
holidaying in the country could be interpreted as approval of the military
regime. Furthermore, forced labor was used to build some of the tourist
infrastructure and tourists are kept away from large parts of the country,
where repression of minorities is occurring.
.
15
CHAPTER:- 4
PESTEL ANALYSIS
16
4.1 Political Analysis
Burma Government Structure
Under the new consitution, the president and two vice-presidents will be
selected by the parliament.
Legislative Branch
The newly approved constitution is now known as bicameral parliament. The
Upper House is known as House of Nationalities and the members of Upper
House is 224. The Lower House is known as House of Representatives and
the members of Lower House is 440. In each house, there is atleast 25%
members are appointed by the military.
Judicial System
Mixed legal system of common law and cutomary law is in place, but the
judiciary system is not independent and a fair public trial is not guaranteed.
The new constitution provides for a
President U Thein Sein
36 Union Minitsers
Union Attorney - General
Vice President U Nyan Tun
Vice President U Sal Mauk
Khan
17
Political Parties
Primary Opposition Party – National League for Democarcy
Primary Pro-regime Party – National Unity Party
Pro-regime socio-political organization – Union Solidarity &
Development Association
4.2 Economical Analysis
Gross Domestic Product (G.D.P.) :
Gross domestic product (GDP) is a value of all final goods and services
produced within a country in a given period of time .
Burma’s G.D.P. is $74.36 Billion in 2009 and it increased in 2010 by
$78.34 Billion and it was increased in 20011 by $82.72 Billion.
Per Capital Growth in Burma :
The Per Capital Growth in 2009. It was at 74.36 in burma and it published
by world bank report in 2012. The Percentage Growth rate of GDP per
capital depend on Constant local currency. The Gross Domestic Product
Dividend by Mid Year Population.
[Source:http://www.kedingeconomics.com/bu/GDPburma.Capitagrowth.A
nnual.Percentwb.data.html]
Purchasing Power Parity of Burma :
The most common PPP exchange rate comes from comparing a basket
of goods and services in a country with an equivalent in the united states.
Burma’s economy share of world total GDP, adjusted by Purchasing
Power Parity, was 0.10 percent. In 2015 Burma’s share of world total
GDP is forecasted to be 0.11 %
18
Inflation rate (consumer prices) :
Considering the impact of inflation on the cost of living rising price make it
more difficult for consumers to buy product unless their incomes rise at
the same or faster pace.
Inflation rate at 8.9% in (2011 )
Inflation rate at 7.7% in (2010 )
The Inflation Rate of Burma is 7.7% in 2010 after that it is increased by
8.9 % in 2011.
The Average Inflation in Burma was reported at 7.87 percent change in
2009, according to the International Monetary Fund (IMF).
Source: CIA World Factbook - information in this page is accurate as of
July 26, 2012
Monetary Policy :
The international Monetary Fund will look into the country’s progress on
the monetary and fiscal policy and assess the 2 year old Aquino
administration by short staff visit which is commence. The most accurate
forecasters agree on that Monetary authorities are trying to curb foreign
investment in the kyat arguing that Asia’s best performing currency has
strengthened too much.
The economic momentum has built up from easing of monetary policy
may boost the country is growth in2011 is 6.14% and up to 10.5% is
2010. And the govt.’s success in containing the budget deficit has been
given monetary authorities considered latitude.
Budget :
Budget of Burma prepares at the end of the year at 31st march at the end
of every year.
A Budget is the monetary or quantitative expression of business plans to
be pursued in the period of time. This data is given of (2009) and (2011).
19
Revenues: $2.016 billion(2011)
Expenditures: $4.272 billion (2011)
Revenues : $1.142 billion(2009)
Expeditor : $ 2.354 billion (2009)
Exchange rates:
kyats (MMK) per US dollar –
815 (2011)
970 (2010)
1,055 (2009)
1,205 (2008)
1,296 (2007)
One of the first steps in being able to forecast future values of a currency
is to understand how exchange rates change in value.
Source : CIA World Factbook - Unless otherwise noted, information in
this page is accurate as of July 26, 2012.
Unemployment Rate :
Unemployment means the number of people actively looking for a job
divided by the labor force.
Unemployment related to labor force, participation rate and employment
rate.
The Unemployment Rate of Burma is 5.7% in 2010 and it is decreases in
2011 is 5.5%.
We can see in the Graph it is not continuously decreasing by every year
in 2006 to 2011. It is not stable, it is going fluctuating.
On the basis of rank it’s rank is 145th of Unemployment Rate in the world.
20
FDI Policy and Objectives in Burma
Burma fully recognizes the advantages of FDI for its economic
development. The government has been actively encouraging FDI in
Burma. Its main foreign investment policy and objectives are as follows:
The main components of the policies as under:
Adoption of a market-oriented system for allocation of resources.
Support of private investment and entrepreneurial activity.
Opening of the economy for foreign trade and investment..
Investment in Burma
Burma is valuable place for investment due to following reasons:
Foreign Company get 5 years tax free due to investment in
Burma & permission to continue the running business for 70
years.
Being a developing country, it has less import duties & is not
subject to quotas.
Educated labor is available at fewer wages.
It has known business configuration and commercial laws.
It is also a member of ASEAN.
4.3 SOCIAL ANALYSIS
Myanmar (Burma) Culture
Myanmar is located between China and India.
Therefore Myanmar culture is similar to china and Indian culture. There are
also own style of cultures be seen in Myanmar.
The culture is mostly affected due to war created in the years 1962-1988.
Most of the culture is related by Buddhism, but also there are influence from
some religions like; Christian, Islam, and Hindu.
21
Language
The mother tongue of the Burma is BURMESE. And it is an official
language.
Burmese language is related to Chinese and Tibetan language.
Burma’s religious book written in the THERAVADA BUDDHISM
language.
Religion
Different religious person lives in BURMA.
Many religion people are lives in Burma.
Buddhist Religious people stressed other
Christian and Muslim people. They are give
pressure to non-Buddhist people that they are join army or government job.
Festival in Myanmar (Burma)
Thingyan festival is the Burmese New Year.
Now Burma is become rather develop country in all the sense but the festival
they celebrating old tradition.
The people of Burma is festival familiarize, therefore they celebrate one
festival at least every month of the year. Some are religions festivals, others
seasonal festival like; Thadinkyut (light festival) marks the end of the Buddhist
lent. Thingyan (water Festival) for dry season and they are celebrating New
Year in 1st January.
Buddhism 89%
Christianity 4%
Islam 4%
Others 2%
Hinduism 1%
22
Traditional Music in Burma
Music is also influenced by the China and India. Another thing is that a Burma
king attacked and captured Ayuddaya, Thailand. And the culture of Thailand
came into Myanmar. Thai music contains as parts of Burma music.
Flute Royal Drum
To consider the facts about Burma music, it is mixed with from some
countries. To study music, there are so many unclear facts about Burma
music. Burma music has separate musical instrument and tunes. Although the
technology is not much developed, there was a history of each instrument,
which was handed down by words.
There is a lot of musical instrument of many ethnic groups originally made by
Burma people. Music and tune followed in several regions in Myanmar.
Traditional Food
The people of Burma are mostly eating non-sticky rice and Fish in their
meal.
All curries are called “Hin” in Burma. We can point out the fact that they
also call rice and mashed potatoes “Hin”.
23
Art
Myanmar traditional art is not art of drawing models. The artist can draw freely
to express his concept. The colours are used in painting those are natural
things-trees, lime, earth, sand, rock, bones, animals, smoke, charcoal and
egg.. It is also important to hand down traditional Burma lacquer ware art to
the posterity.
Education
The education system is operated by the government agency in Burma.
Universities and professional institutes are run by two separate entities:
1. The Department of Higher Education of Upper Burma
2. The Department of Higher Education of Lower Burma
Headquarters are in Yangon and Mandalay.
Nearly all schools are government-operated, but there has been a recently
increasing in privately funded English language schools. Schooling is
compulsory until the end of elementary school, probably about 9 years old,
while the compulsory schooling age is 15 or 16 at international level.
There are main four international schools in Burma:
1. The International School Yangon (ISY)
2. Crane International School Yangon (CISM)
3. Yangon International School (YIS)
4. International School of Myanmar (ISM)
International schools and College Board are acknowledged by WASC.
Marriage
Individual boy and girl usually find their own marriage partners. An
arrangement for the marriage may be made by the parents.
If the parents oppose the marriage, often the children elope then after
the parents condone the marriage.
24
When a man asks a woman's parents for their answer, it is common
practice for him to bring a gift for the woman.
Wedding ceremonies are relatively simple except among wealthy
families. After speeches by the parents, members of the families and
guests share pickled tea. Polygamist is rare. Far that, wealthy and
powerful men having an informal second wife.
http://www.everyculture.com
4.4 Technological scenario:
The growth in productive sector such as agriculture, industry, energy,
transport and other service sector made progress in human development by
positive contribution to employment opportunities, increase, personal income,
greater social wealth and improved services.
Intellectual Property Rights
The Burma Merchandise Marks Act, 1889
The provisions of this Act are inclusive of relative provisions from the
Penal Code. Penalties relating to false trade description, selling goods
to those goods with false trade description and unintentional
contravention of laws relating to marks and description are mentioned
in this Act.
Current and future technological development in different
sectors:
food science and technology
biotechnology
materials science and technology
Information technology
marine science and technology
25
Food process and storage technology:
In Burma there are constructed solar dryer for protection of seasonal
fruits (ex. Mango). Some experiment doing for the preserving lime.
Microbiology test are doing for the milk. And microbiology test of kidney
cleaning water.
Burma people have a long tradition of preparing food in their own way
and the history of traditional food may be as old as the culture and arts
of its people.
Environmental technology:
Total Land use status of Burma:
Land category % of land area
Forest 46.96%
Other woodland 29.73%
Other land 20.50%
Inland water bodies 2.81%
Total 100%
Green development initiative:
Nature and biodiversity conservation:
Permanent forest estate cover about 24% of country area and there are
32wildlife sanctuaries, 1nature reserve and 3 national park, have been formed
and managed in Burma.
Forest sector:
Forest plantation, nation-wide tree planting programs doing in Burma. Private
plantation and community forest are also available in Burma. Watershed
plantation and dry zone greening programs are also prefer for the better
environment condition.
26
Industrial and energy sector:
Target to create a low carbon society. To encourage people to reduce and
recycle and use energy efficiently. The improve appropriate technologies for
recycling processes. In industrial sector there are to need change the raw
materials for energy friendly product. And make process design for less waste
and energy efficiency.
It technology:
The development of IT in Burma by year 2011-2012
Computer applications were developed not only in the private sector
but also in government sector:
The private sectors initiates
e-commerce
The government sector
initiates e-government
e-banking Smart schooling
e-shopping e-passport
e- media e-visa
e-reservation TEDI(trade electronic data
interchange)
e-entertainment
Medicine and Health Care
The use of conventional forms of medicine remains important, especially
among the ethnic minorities. Few young people, however, receive training
in these forms of medicine by an age group of traditional healers and
many traditional practices and the knowledge of traditional remedies are
being lost. Serious health problems are reaching crisis proportions, and
nontraditional health care by the public and private sectors has
deteriorated.
27
Tunnelling Technology
The Burmese military files acquired by DVB reveal a long-term interest
in building tunnels inside the country. They include thousands of
essays, articles and photographs on tunnelling technology.
Burma is building a series of Hydro electric hydro electric projects
around the country, and for this tunnel technology is a necessity.
Banking sector:
In the year of 2010, Burma economic bank started launching a quick-cash
online banking services. The new facilities provided to customers in
exchanging cash with the use of smart card. Burma has also introduced a ban
network system in some six banks in a country to interlink with private and
state bank. All banks are internally work on transaction and trading.
Global net and MNC companies developed local information technology
system for the banking. There are 15 domestic private banks and 13
representative offices of foreign banks and 3 representative offices of foreign
insurance companies in Burma. According to the change in the economic
requirements of the country, the central Bank rate has been increased from
10 % to 12% since April 1, 2006. Agricultural liberalization speeded up after
the elimination of the government procurement system of the main agricultural
crops such as rice, pulses, sugarcane, cotton, etc.
28
4.5 Ecological Analysis
RESOURCE ACCOUNTING & ENVIRONMENT STATISTIC
NATURAL RESOURCES
Burma’s people dependent on the natural resources for their livelihoods &
traditionally maintained the natural resource management & there stability.
Burma is also rich for their natural resources like petroleum, timber, tin,
antimony, zinc, copper, tungsten. Lead, coal, some marble, limestone,
precious stones, natural gas, & hydropower.
Burma is also fames for their hardwoods’. According to the most recent
UN World Development Report, Myanmar has an estimated natural
Myanmar forest area of 43% down from 12% from 10 years ago, and is
ranked 33rd among the world's top 100 countries.
Biodiversity:-
According to the report, Burma has unparalleled large amount of animal
and plant life. Almost all of the country is located inside the indo Burma
biodiversity hotspot and one of the world’s 34 “richest and most threatened
reservoirs of plant and animal life” as identified by Conservation
International.
Forests:-
Burma is home to Asia’s most large area in whole tropical forest
ecosystems. May different forest ecosystem exist in Burma like delta
mangroves, lowland tropical reain forest in Tennasserim division, teak
forests, semi deciduous forest further north and sub alpine in northern
kachin state among others..
Coastal area:-
Burma has 2832 k.m. Long coastline larger from the country is exact west
to southeast form the way of Bengal to Andaman Sea with this stretch
alluvial huts and sheltered muddy area are home to mangrove trees and
shrubs.
29
Keystone protect coastal regions from the impacts of storms and also
serve like habitat to crawfish, shrimp, crops and numerous other aquatic
animal on other side fish and other aquatic foods, communities collect non
timber forest product like wild fruits and vegetables from mangroves.
Watersheds and freshwater sources:-
Burma is in main five rivers. Its name is Irrawaddy, the Chindwin, The
Salween, the Sittaung and the Tenasserim, endangered species in a
Irrawaddy dolphin and blyth’s river frog can be found in some of these
waterways.
Minerals:-
Burma is rich mineral resource like tungsten, tin, zinc, silver, copper, lead,
coal, goal, and industrial minerals. Antimony, limestone, and marble
deposits also dot the landscape. Gemstones like diamonds, rubies, jade,
and sapphires can also be found in Burma.
Oil and Gas
liberalize the economy was the development of the Yadana gas field in the
Andaman Sea and the construction of a gas pipeline through ceasefire
and conflict areas in Mon State and Tenasserim Division in eastern
Burma.
The CIA World Fact book cites Burma’s gas reserves at only 283.2 billion
cubic meters as of the beginning of 2010, but the actual proven reserves
are likely higher than cited by both sources due to recent onshore gas
discoveries.
ECONOMY& INDUSTRY
Burma is one of the resource rich countries. Burma is considered an
agricultural country before the 2nd world war. In Burma garnet economic
drivers are like natural gas, mining, timber & power generation plant. however
suffers from pervasive government controls, inefficient economic policies,
corruption and widespread poverty.
30
POLLUTION
Air pollution:-
In yangon air pollution is 87.50%.
The main source of air pollution in Yangon is vehicles. But concrete roads
also increase the levels of dust and coarse particles in the air.
travelling to any heavily polluted urban centres in Burma.
Food pollution:-
Eating in Burma restaurants is the biggest risk factor for contracting
traveler's diarrheal. Ways it includes eating only freshly cooked food and
avoiding shellfish and food that has been sitting around in dining table.
Peel all fruit, cook, and vegetables and soak salads in iodine water for the
least 20 minutes. Eat in busy Burma restaurants with a high turnover of
customers in Burma.
Water pollution:-
In yangon water pollution is 50.00%.
The number one rule is be careful of the water and especially ice in Burma
. If you don't know for certain that the water is safe, assume the worst.
Reputable brands of bottled water or soft drinks are generally fine,
although in some places bottles may be refilled with tap water in Myanmar.
Only use water from containers with serrated seal hot tops or corks take
care with fruit juice, particularly if water may have been added.
Milk should be treated with suspicion as it is often unpasteurised, though
boiled milk is fine if it is kept hygienically. Tea or coffee should also be OK,
since the water should have been boiled.
CLIMATE
Burma divided their climate in to the different three categories like cold
season, Rainy season, & summer. In all three climates also face with
different time like summer is March to mid may, rainy fall start in mid may
to the end of October and cold season start with November to end of the
February.
31
In Burma generally enjoy the tropical monsoon. In Burma whether climate
change or different from the place to place due to the differing
topographical situation. In Burma average highest temperature generally
during summer month is 43.3 degree
Burma is very hot in summer season. In Burma also different climate with
different place like north zone, south zone, waste zone, east zone and
central zone also with different seasons.
4.6 Legal Analysis
Tax Structure
In Burma, there are fifteen kinds of taxes and duties charged by the
government. These taxes and duties are collected by the concerned
department.
In Ministry of Finance & Revenue, there are two main departments which are
as under:
Custom Department
Custom Department is in charge of levying custom duties.
Internal Revenue Department
Internal Revenue is liable to collect five kinds of taxes and administers
the larger portion of the State Revenue dealing with direct & indirect
taxes.
32
Types of Taxes and Duties and Their Administering
Departments
Type of Taxes Administering Department
Taxes charged on income and
ownership
Income Tax
Profit Tax
Internal Revenue Department
Internal Revenue Department
Taxes charged on domestic products
and public consumption
Excise duty
Commercial tax
License fees on imported
goods
State Lottery
Tax on transport
Sales proceeds of stamps
General Administration Department
Internal Revenue Department
Trade Directorate
Internal Revenue Department
Road Transport Administration
Department
Internal Revenue Department
Customs Duties
Custom Duties
Customs Department
Taxes charged on utilization of state
owned properties
Water & Embankment Tax
Taxes on land
Tax on extraction of forest
product
Tax on extraction of mineral
Tax on Fisheries
Tax charged on rubber
General Administration Department
General Administration Department
Forest Department
General Administration Department
Fishery Department
Forest Department
33
Present Tax Rates
The rates differ from taxpayer to taxpayers which are as under:
Taxpayer Rate
Companies incorporated in Myanmar under Myanmar
Companies Act
Business/Trade Income
Rental income from movable or immovable
property
25%
25%
Enterprises operating under MFIL 25%
Non-resident foreign organizations such as branch of a
foreign company
35%
Capital Gains
Resident companies
Non-resident companies
10%
40%
Income earned by resident foreigner 15%
Salary Progressive rates
ranging from 3 %
to 30% (At 30%
on income
exceeding Kyat
500,001)
Business Income, Property Income, Professional Income,
income from other sources & income from undisclosed
sources of Individual
Progressive rates
ranging 5% to
35% (At 35% on
income exceeding
Kyat 2,000,001)
Commercial Tax: In Burma, there is no value added tax in Burma.
Excise Duty: In Burma, Excise Duty is charged on alcoholic drinks.
Custom Duty: In Burma, Custom Duty is charged under the Customs Tariff of
Myanmar, 2007, at rates ranging from 0% to 40%
34
CHAPTER 5
SCOPE OF BUISNESS
35
Growing Industries
DEVLOPING INDUSTRY& SECTOR
Energy, oil & Gas
Information technology
Airlines industry
Automobile industry
Tourisum industry
Health sector
Banking sector
DEVLOPED INDUSTRY& SECTOR
Telecommunication
Fishing
Major forms of energy in Burma
1. Coal energy
2. Wind energy
3. Oil and gas
4. Renewable energy
Coal energy
The coal reserves are estimated at 489million tons. In 2011, there are
692thousand tons of coal were produced. Among them 52% was used for
cement and steel companies and 42% for power generation and etc
In Burma recently only two mines are operating one is KALEWA COAL
DEPOSITE MINE and second is MAMMA COAL MINE.
KALEWA COAL MINE is one of the giant mine with an annual production
capacity 13000 tones as the only major operating coal mine.
36
Wind energy
In Burma many families live in rural area without electricity so they use
such energy to charge their battery.
A small wind turbine system with a capacity ranging from 50 W to 10kW &
rotor diameter ranging from about 0.5 m to 7 m are primarily used in
battery charging.
Renewable energy:
Burma has also renewable energy resources such as hydro, biomass,
wind, solar, and other types of renewable energy. The government
launched the project for bio-diesel production aiming 8 million acres.
Opportunity:
There is a huge availability of natural resources
Renewable energy also helps the industries to reduce cost of energy in
Burma.
Government policy regarding entering in Burma is liberal so any one can
start business.
Challenges:
There is a lot of competition in Burma especially in energy sector.
Majorly burmes people are less aware regarding pollution reduction
programme.
37
Telecommunication:
Major players of telecommunication industry
Red link communication .co. ltd
Myanmar posts and telecommunication
Shenzhen run fast technology co. Ltd
Opportunity:
Still Burma is at developing stage so it is also easy to enter in Burma and
can match the demand and supply of telecommunication products.
In Burma wi-max and Wi-Fi technology can also be easily developed there
because of heavy users.
Challenges:
There is certain rules and regulation for entering in telecommunication
which must be followed.
Intellectual property right regarding telecommunication are quite stringent.
38
INFORMATION TECHNOLOGY
Technological development
With the development of technology it helps in human development by
positive contribution to employment opportunities, increase, personal income,
greater social wealth and improved services.
There are certain rules followed with technology like
Intellectual Property Rights it includes
Current and future technological development in different
sectors:
Food science and technology
Biotechnology
Materials science and technology
Information technology
Marine science and technology
Opportunity:
Better scope for establishing IT companies because of easy availability of
technical labour at a lower cost.
Challenges:
There is certain rules and regulation in it sector which must be followed by
each and every IT industry.
Lot of entry barrier related to registration in IT industry
Airlines industry
Airlines industry is develop in Burma. The international airlines of Burma with
regular flights between to Singapore, Kuala Lumpur, Bangkok, Hongkong,
Kunming, Dacca and Jakarta.
39
Major players in airlines
Air began
Air KBZ
Asian wings airways
Air Mandalay
Myanmar airways international
Yangon airways
Opportunity:
Mostly all airlines cost is high than the service provided by them so any
airlines business can easily capture whole market by providing efficient
service.
Challenges:
In Burma climate change with place to place so, climate change is main
challenge in aviation sector.
As compared to Indian aviation sector Burma has less rate of aviation
sector.
Automobile Industry
Major Player in automobile
Dongfeng auto. myCo. ltd.
Honda
Tata
Kia motor
Opportunities
The Burma government is encouraging foreign companies to invest in the
Burma to help develop the economy.
One of the main industry in the Burma is mining sector which uses dump
and trucks and heavy duty machineries
40
Challenges
The main challenge for foreign vehicle manufactures is the affordability
factor of their trucks.
Local comapnies may unable to purchase brand new commercial vehicle
especially highcost brands like Japanese or European.
Foreign companies also find it difficult to make large investment due to the
frequent changes.
Burma also faces scarcity of skilled engineers as about 70% of the current
workforce come from the agriculture sector.
Tourism:-
Tourism industry was established in 1992 by government but also some
private enterprises are also helping to develop tourism industry. Tourism
industry is being slowly developing there are 794505 visitors are being visiting
in every year.
Major players of travel agency
Travel-myanmar.net
Gulf travel & tour co. ltd
Asia whale travels & tours
Gracious Myanmar travel ltd
Santa maria travels & tours
Sm tours & transport
Types of tourists in destification
Cultural tourism = jangon, bangon, manadav, mrauboo, bago.
Eco= tourism popa mount Victoria
Marire tourism =mjeik archipelago
Beach tourism =nagapali, chaungtha, nauresaung
Opportunities
This Tourism industry is slowly developing sector so it is easy to capture
local attraction of Burma people.
Government of Burma is also support in tourism because of large profit in
tourism sector.
Tourism in Burma has developed mainly by the government but the private
enterprises do exist catering to a wide range to tourists.
41
Challenges
In Burma there is a big threat of terrorism.
Some are is high risk area so the government cannot give the permission.
Burma’s government not promote tourism industry.
Banking sector
The central bank of Burma has liberalized the financial organizations for
competition, efficiency and integration into the regional financial system. As of
end of December 2007, there are 15 domestic private banks and 13
representative offices of foreign banks and 3 representative offices of foreign
insurance companies in Burma. According to the change in the economic
requirements of the country, the central Bank rate has been increased from
10 % to 12% since April 1,2006. Agricultural liberalization speeded up after
the elimination of the government procurement system of the main agricultural
crops such as rice, pulses, sugarcane, cotton, etc.
Major players in banking sector
1. Kanbawza bank ltd. ( KBZ)
2. Yoma Bank
3. Tun foundation Bank
4. Myanmar may flower bank
5. Ayayarwady bank(AYA)
Opportunities
Burma has provided 24 hours banking facility so our country can also
provide such facility there with high efficiency.
Challenges
In Burma banking sector is underdeveloped so some facility not provide by
the all bank in Burma.
In Burma many privet bank are there so more competition in banking
sector.
Changes with the privet and government banking sector.
42
CHAPTER 6
Business plan
43
6.1) Overview of Forestry Industry and
Business Plan of Wooded Articles.
CHAPTER 1: INTRODUCTION OF THE FORESTRY INDUSTRY
Burma is rich in vast varieties of natural resources, both renewable and non-
renewable. Among them, the forest resource is one of the most critical and
principal suppliers for the livelihood of the people and the national economy
as well. There are various types of forests such as tidal, beach and dune, and
swamp forests; tropical evergreen forests; mixed deciduous forests; dry
forests; deciduous dipterocarp forests; and hill and temperate evergreen
forests. Indeed, Burma is home to the best quality teak which is one of the
most valued and sought after tropical timbers in the world. Moreover, it is
asserted that extensive and beautiful natural teak stands can be seen only in
Burma today.
There is evidence that the fundamental cause of the Anglo-Burmese War
during the 19thcentury was based on conflicts over the extraction of Burma
timber, teak in particular. In Burma at present, 70 percent of the population
residing in rural area has to depend heavily on forests for their basic needs.
Moreover harvesting and utilization of NWFPs support the rural people for
their sustenance and for generating side income. Forests have been providing
Burma ethnic groups and people living in remote areas with posts, poles,
fence and household materials, fuel wood, fodder, and food as well as wildlife
for hunting. As for the national economy, timber export alone recently
contributed to around 10 percent of the total export earnings. Additionally,
forests give benefits to other economic sectors such as agriculture, livestock,
energy and tourism.
44
Biodiversity distribution of Burma forest resources is influenced by a wide
range of
locations between latitudes 9° 58'N-28° 29'N and longitudes 92° 10'E-101°
10'E, topography traversing from North to South through three major mountain
ranges and four major river systems, and climatic factors principally of the
tropical monsoon type with three distinct seasons: the hot season from mid-
February to mid-May; the rainy season from mid-May to mid-October; and the
cool season from mid-October to mid-February.
A. LABOUR LAW IN BURMA
Labour Law Burma Forest Industry
Employment Restriction Act. 1959
Employment Statistics Act. 1948
Employment and Training Act.1950
Factories Act. 1 951
Minimum Wages Act, 1949
Payment of Wages Act. 1936
Shops and Establishments Act, 1951
Social Security Act. 1954
The Leave and Holidays Act. 1951
Trade Disputes Act, 1929
45
CHAPTER 2 S.W.O.T ANALYSIS FOR FORESTRY
INDUSTRY
Strengths:-
Burma forestry sector are fair climate and soil, relative extent of forest
cover, explicit forest policy and law.
The covering almost half of the country’s total land area with forest.
The law and policy encourage reservation and preservation of natural
forests and also encourage forest plantation.
Burma produce a wide range of wood and wood products from
firewood to more or less high class furniture.
Teak is recognized as one of the most valuable timbers in the world,
and Burma produces the best quality teak.
Weakness:-
The forestry sector are lack of proper land-use policy.
Unless a clear-cut land-use plan is endorsed in the country, conflicts
between
forest conservation and other different and unlimited aspirations will
continue.
Constraints including policy, economic, financial, social and
environmental factors also prevent the practice of the MSS.
Pre-harvesting, harvesting and post-harvesting technologies in the
forestry sector are still low compared to other developing countries
such as Malaysia. This causes higher wastage and lower value added
production.
46
Opportunities:-
The forestry sector are sizable international markets to supply forest
products, prospects to induce FDI, and application to monopoly
practice.
Burma is located between two growing and giant markets, China and
India because of Both are log-hungry countries.
Forest products demanded by China are enormous and expected to
continue.
other countries such as Thailand, Republic of Korea, Australia and
Japan are major Asia-Pacific importers of solid wood forest products.
There is room to invite foreign investment in value-added product
production. Another potential benefit for the Myanmar forestry sector is
exercise of monopoly practice especially in teak export.
Controlling supply could create maximum earnings with minimum use
of resource.
Threats:-
Burma forestry sector are poverty levels, global competition, current
economic sanctions by western countries, and both illegal and legal
overexploitation.
In Such competition from technologically advanced countries finished
product technology development of natural-resource rich countries like
Burma and encourages only the export of raw forms of forest products.
Burma economic sanctions, shrinking potential export sectors like
garments force the forestry sector to conduct more extraction and
export for necessary foreign exchange.
In Burma Another challenge in sustainable forest management is
Overexploitation.
Illegal logging as well as shifting cultivation in uncontrollable areas is
the most important concern in deforestation.
47
CHAPTER 3 PESTEL ANALYSIS FOR FORESTRY
INDUSTRY
Political factors:-
Tax Policy:-
Corporate tax:-
Resident companies in corporate tax on 10% tax rate.
Non-resident companies are corporate taxed only on income derived from
sources within Myanmar. In non-resident companies in corporate tax rate is
40%.
Personal tax:-
Resident foreigners are taxed on all income derived from sources within
Myanmar. Foreigners who reside in Myanmar for at least 183 days during an
income year are considered resident foreigners. In a tax rate is 10% in a
capital gain.
Non-resident foreigners are taxed only on income derived from sources within
Myanmar. Foreigners who reside in Myanmar for less than 183 days during
an income year are considered non-resident foreigners. in tax rate is 40% of
capital gain tax.
Commercial tax:-
There is no value added tax in Myanmar. Commercial tax is levied as a
turnover tax on goods and services.
Employment law:-
There is no restriction on the number of expatriate employees.
Economic factors:-
Foreign investment:-
Exemption from income tax for up to three consecutive years for an
enterprise engaged in the production of goods or services.
tax holidays for the first five years
50% income tax relief on revenue from products sold overseas for the
next five years.
50% income tax relief on reinvestment obtained from export sales for
the following five years.
48
Interest rate:-
10% (per annum) interest rate provide a central bank.
As Burma is a tax free country so there is no tax charge for wood
industry.
In a industry area total labour force is 32.53 million (2012), and in wood
industry for a 7% for a labor force.
Social factor:
Burma people are educated and are well represented in all of the major
professions, as well as organizations.
Forestry technology is perhaps more kindred to engineering than to
forestry in its function and consequently in its educational
requirements.
Technological factor:
In burma technology is one the leading exporters of teak wood
products in the whole nation. Specializing in manufacturing of teak
wood decking for so many years. like Teak Logs, Teak Wood
Veneer (Thickness from 0.1 mm to 3.0 mm ) Teak Wood Decking (
Straight Grains and Free From Black Stripes )
In wood product for most Profitable utilization of timber is usually an
essential requirement for organization.
wood conversion plant to be successful, its product must be
competitive in price and quality with other wood-using industries
throughout the world as well as with industries using other types of raw
material.
Legal factor:
In industry ,partnership firms will be easily start with organization,
because it is not compulsory to get registration process.
Those with a responsible and long term strategy to engage with
Myanmar would be advised to understand how a creative partnership
between business, industry and the education and training sector will
need to be at the centre of any engagement over the next decade.
49
CHAPTER 4: STRUCTURE, FUNCTIONS AND BUSINESS ACTIVITIES
FUNCTIONS AND BUSINESS ACTIVITIES OF SELECTED INDUSTRY
1. Forms of Business (Sole proprietorship, partnership Etc.):
Forms of Business Wood articles
Sole Proprietorship
Partner ship
HUF
Co-operative
Transportation & Communication System needed for specific
products:Modes of Transportation
Modes of Transportation Wooden articles
Railway
Road
Sea
The modes of transportation for raw material as well as for finished products
for Wooden articles is all railway, roadway and waterway.Modes of
Communication
Modes of Communication Wooden articles
Telephonic
Post
50
CHAPTER 5: BUSINESS PLAN FOR THE START
SHOWROOM OF WOODEN PRODUCTS
INITIAL PHASE
Name of sales outlet:
Cedar wood products
“Between reason and the season”
The Cedar wooden products will be a partnership firm consisting of four
partners, from these two partners two will be going to Burma to setup a
shop like getting license from the government, finding a strategic
location for shop and then buying it on rent and hiring employee from
Burma.
From these four partners, two will settle down as among these both
will learn to speak Burmese language. The two staying in India will
handle export license and will be exporting products by purchasing it
from wood products and placing them order and delivering the same to
Burma .
51
Marketing Objectives:-
To be globally recognized company to produce and market the best world
class quality wood products by adopting world class latest environment
friendly technology and to build strong brand loyal customer base for the
years to come plus to build trust and healthy relations among our employees,
our investors, our society.
Product adaption or Modification
Core Competency
Our core competency is providing strong and safe wood to the customer
which helps the consumer reducing expenses and helpful to fulfill your
expectation.
Entry in Burma
For, forest industries we are start our business in five major city of burma,
coming next five years. Our Business start form the south region of the burma
than after we start our business West, North, East and Central region for next
five years in Burma.
1) First year we start business at YANGON city. (South)
2) Second year we start business at TAUNGOO city. (Central)
3) Third year we start business at MAWLAMYINE city. (East)
4) Forth year we start business at MANDALAY city. (north )
5) Fifth year we start business at PATHEIN city. (wast)
52
Starting business in YANGON.
We are going to start our business in the YANGON city. For that we are
having planned to buy the land in the middle Yangon. In Yangon area having
more population and good development of forest in this area that’s why wood
industry starting in Yangon. It is the main area was people of our targeting
market are visiting regularly. Also this is the main posh area of Yangon city.
Products
The following list of products will be sold at shop in Burma at initial stages:
Wooden strong trunk
Wooden utensil
Wooden hanger
Wooden photo frame
Wooden gifts
Wooden lamps
Wooden baskets
Wooden pen holders
Wooden boxes
Wooden mirror frame
Wooden spoon
Wooden diner sets
Wooden clocks
Wooden fences
Wooden flowers ports
Phase-I
In the first phase, the main objective would be to make aware the
people of Burma about products and our firm.
In this phase we will export little stock of products were we need to hire
a shop for keeping the stock.
To make people aware about the wooden products we will be opening
temporary small stalls near market place, substations, etc.
53
Table -1.1
The business partners will invest their own capital
Particular Person Amount
1 Partner-1 2,00,000
2 Partner-2 2,00,000
3 Partner-3 2,00,000
4 Partner-4 2’00’000
Human resource:
The human resource agency will be contacted for hiring employees.
For employees that need to be hired on temporary basis a contract
company supplying human resource will be contacted.
Labour laws
In Burma, labour law is law for labour relating to their employment.
In Burma labour law is commenced from about 1830 with the growth of
plantation industry.
This department researches, monitors, and enforce safety and health
standards in factories. Its inspectors are authorized to fine employers who
breach minimum safety and health standards, and who commit other
transgressions such is not complying with trade disputes awards, or not
remitting social security contributions.
WORKING HOURS AND LEAVES
Shops, companies, trading centers, services enterprises, and entertainment
hours 8 hrs a day, 48 hrs a week factories, Workers in a private enterprises
are granted the following leaves and holidays 6 days casual leaves, 30 days
medical leaves, 10 days earned leaves and 21 public holidays in a year with
wages.
54
Table -1.2
Particular Designation No. Of
Person
Education
Qualification
Skills
Required
Salary (per
month)
1. Marketing
manager
2 Master
degree
(MBA,PGDM)
(Marketing)
Having
experience Of
1year
-Having Good
Leadership
Skills,
Managing
Team.
-Taking
Decision
Regarding All
The Marketing
Activity
Including
Stocks Also.
Rs.45, 000
2. Sales
executive
5 12th pass out
having
experience of
1 year,
Bachelors
degree
(Pursuing/
completed)
working for
part time
basis or for a
temporary
basis
-Good
communication
skill,
-He/She
should know
Norwegian and
English
language
17,000/- Rs
3 employees 6 10th or 12th
pass having
experience of
shop keeping
or in shop
seling.
Good
communication
skill,
-He/She
should know
Norwegian and
English
language.
7,000/- Rs
Total - 13 Rs.2,17,000
55
Marketing strategies for phase-1
We are making a small stall outside the mall or near the entrance of the
mall.
We are also exhibiting the products outside the railway station water
way etc where the contact of people are more so that we can spread
more awareness regarding our shop.
As well as we are also available our products like wooden boxes,
wooden gifts and wooden frames according to the art, so that Burmese
people are getting more variety of it and keeping more collection of
such products.
Pricing of Products:
Wooden strong trunk :- kyat 1000 – 10,000
Wooden utensil :- kyat 500 – 5000
Wooden hanger :- kyat 200 - 1000
Wooden photo frame :-kyat 50 - 500
Wooden gifts :- kyat 50 - 1500
Wooden lamps :- kyat 100 - 5000
Wooden baskets :- kyat150 - 2500
Wooden pen holders :- kyat 100 - 500
Wooden boxes :- kyat 200 - 3000
Wooden mirror frame :- kyat 250 - 1550
Wooden spoon :- kyat 5 - 100
Wooden diner sets :- kyat 350 - 5550
Wooden clocks :- kyat 175 – 3750
Wooden fences :- kyat 250 - 2500
Wooden flowers ports :- kyat 100 – 3000
56
Promotion:
We will advertise our product through exhibition, banners and also through
internet. Our product is very new for decorative purpose in Burma market
so we can cater a large market in Burma.
Phase-II
In first phase the stalls were opened for 5 months in next phase i.e. on
second stage we will we will rent a shop where we can keep stock and
also we can sell products.
The pricing of products will remain same.
The two partners will handle store and two partners will handle export
and purchasing stock from wooden products.
Human Resource:
Table -1.3
Particular Designation No. Of Person
Education Qualification
Skills Required Salary (per month)
1. Sales executive
3 Bachelors degree (Completed)
-Good communication skill, -He/ She should know Norwegian and English language -Handle showroom and attract customers.
Rs.20,000/-
2 employees 4 12th pass Handle shop and attract customer.
8000/-
Total 7 Rs.92, 000
57
MARKETING STRATEGY FOR PHASE-ll
• In this phase the objective would be to attract local people about shop
and products which can be done through newspaper advertisement
and hoardings.
• Contact with popular Advertisement agency in Burma for advertisement
of our services in Yangon and Mandalay cities.
• We will provide a discount coupon to every customer and this discount
will be redeemed on the next purchase.
• We are also connected with the people by internet that is, we are
making our own website so that Burmese people as well as the other
countries are also connecting with us
Financial
Table-1.4 Projected profit and loss account quarterly: (Phase I)
Particulars Amount (Rs.)
Sales (including closing stock) 9,00,000
(-)Purchases (includes Purchase expenses) 2,50,000
Gross Profit 6,50,000
(-)Operating expenses:
Salary and incentives 4,22,000
Rent 1,25,000
Advertisement expenses 50,000
Other Expenses (Electricity expenses, telephone expenses, taxes, export-import expenses, discount coupon, etc.)
45, 000
Net Profit / Loss 8,000
58
Table – 1.5 Projected Profit and loss Account for a year
(Phase II)
Particulars Amount (Rs.)
Sales (including closing stock) 63,00,000
(-)Purchases (includes Purchase expenses) 27,00,000
Gross Profit 36,00,000
(-)Operating expenses:
Rent 5,30,000
Salary and incentives 9,50,000
Advertisement expenses 2,00,000
Other Expenses (Electricity expenses, telephone expenses, taxes, export-import expenses, discount coupon, etc.)
9,50,000
Net Profit 9,70,000
59
6.2) Overview of Textile Industry and
Business Plan
INTRODUCTION OF THE TEXTILE INDUSTRY
(both of cotton and imported silk from Yunnan) and clothing (cotton
ginning, spinning, weaving, garment making, etc) for local use have
been developing throughout Myanmar textile.
During the colonial period, indigenous textile and indigenous-clothing
cottage industry survive in spite of the English made quality textile/cloth
importation and English marketing in Myanmar, especially after the
open of Suez Canal in 1869.
After independence, during 1950s and early 1960s it developed with the
support of the government. Myanmar had exported quality nylon fabrics
to the neighboring countries, even to Thailand. Almost all of the textile
factories were owned by the then renowned private companies. Then,
the Socialist regime started Since the times of Myanmar Kings,
household/cottage industry of textile in 1962 and the government
nationalized the private enterprises and business, including micro
businesses in 1964. Since that time, till 1989, private sector, except small
businesses and street vendors, died down. Former textile factories
became State Owned Enterprises (SOEs) under the Ministry of Industry
No.1 micro-“State-Enterprises” re
After the present regime assumed power in 1988, market oriented
economic reforms were introduced. Private garment factories (especially
the CMP industries) have been set up since 1994, starting with just 25
factories, located in Yangon. But, it grew up to 291 in 1999, within the
span of 5 “reforms.
60
Major players of textile industry
Major Exporters and Importers of Apparel 1999
$USbi[19]
Exporters Importers
China 30.08 United States 58.79
Hong Kong 22.37 Germany 20.77
United States 8.27 Japan 16.4
Mexico 7.8 Hong Kong 14.76
Germany 7.44 UK 12.53
Turkey 6.52 France 11.58
Swot analysis
threat
weakness
Strength
opportunity
61
Strengths
Availability of most user of the cotton product.
Geographically situated at ideal location for exporting (near end users).
To get a good margin for exporting cotton clothes.
The Burme people are using cotton clothes so having chance to exporting
Cotton cloth in future.
Weaknesses
The major weakness for the textile is R&D and electricity in the country.
The textile product development technology is another weakness for the
Company.
The technological drawback, as compared to some major foreign player is
another Weakness for the company.
Opportunities
The textile industry has much opportunity of exporting in the present market
conditions. This is because the cotton and silk products are become a need for
everyone and still contains a lots of scope for customization. .
from its huge market Since the country has the maximum number of outlets
and also the maximum no. Of firms in Burma but having electricity problem in
burma it can very easily go for extension at any point of time, and can
introduce any new products, which will get support network.
Free trade agreements having India and all Asian country for the textile
product and development.
Threats
Having the electricity problem in the country so the other exporter are also
take part in the exporting the cotton product in Burma.
The other foreign players come in Burma with more advanced technology is
the biggest treat for the exporting
The supply is also a big issue in the country, because the brume people
always preferred the cotton cloth for every festival and functions they can not
fixed it price so, some time had operated in loss also. it is the biggest problem
because the maximum part of their cloth is been exported.
62
Five force model
Rivalry inside the Industry
bargaining power of supplier
Substitutes
bargaining power of
buyer
Threat of new
entrants
63
Rivalry inside industry:-
The competition level is low because having the electricity problem in Burma so not
having chance to the outsider start the business using new technology and machinery
in Burma.
Threat of substitutes :
IN Burma substitutes is lower because brume’s people are always preferred cotton
cloth like lungi ,kurta , skaps , they not preferred polyester ,jute , nailon .
Buyer power:-
Buyers bargaining power is high because they always preferred cotton cloth not other
product.
Supplier power:-
Supplier bargaining power is low because the people of Burma always preferred cotton
cloth so not chance to the supplier to supply other product and getting profit.
64
Pestel analysis
Political factor:-
Tax Policy:-
Corporate tax:-
Resident companies in corporate tax on a worldwide basis, and as such, income from
sources outside of Myanmar is taxable. in resident companies in corporate tax rate is
10%.
Non-resident companies are corporate taxed only on income derived from sources
within Myanmar. In non-resident companies in corporate tax rate is 40%.
Personal tax:-
Resident nationals are taxed on all income derived from sources within and outside
Myanmar. Resident foreigners are taxed on all income derived from sources within
Myanmar. Foreigners who reside in Myanmar for at least 183 days during an income
year are considered resident foreigners. In a tax rate is 10% in a capital gain.
Non-resident foreigners are taxed only on income derived from sources within
Myanmar. Foreigners who reside in Myanmar for less than 183 days during an
income year are considered non-resident foreigners. In tax rate is 40% of capital gain
tax.
Political factor:-
Economical facto
Social facto
Technological Factor
Environmental Factor
Legal Factor
65
Commercial tax:-
There is no value added tax in Myanmar. Commercial tax is levied as a turnover tax
on goods and services. The commercial tax is an additional tax upon certain
commercial transactions, but it has not been expanded to the concept of a value added
tax. It applies only to the specific transactions listed in the Commercial Tax Law.
Employment law:-
There is no restriction on the number of expatriate employees. However,
foreigners cannot be appointed as directors in companies formed under the
CA and owned by Myanmar citizens.
The Myanmar Special Economic Zone Law (2011) and Dewier Special
Economic Zone Law (2011) order special rules applicable to foreign
employees, work permits, and minimum percentages of employees which
must be citizens.
Myanmar has been a member of the International Labour Organization (ILO)
since 1948.
In Burma, there are fifteen kinds of taxes and duties charged by the
government. And few industry paid tax and duties. But Textile industry not
paid tax and duties.
There is no minimum requirement for share capital of Textile industry.
In industrial area run smoothly without much of government interference.
This helped the business organization to work on proper long term planning
with good political support and progress well in Textile industry.
The tax system in the country also discourages export of finished products
because there is a 10 percent lump sum tax on all items of export by the
private sector.
Economic factors:-
Labour force:-
labour force is still largely skewed towards agriculture with a 70% share,
relative to 23% in services and 7% in industry, reflecting Myanmar’s primarily
agricultural economy.
66
Foreign investment:-
Companies registered under the MFIL which have obtained MIC permits are
entitled to the following special benefits and tax incentives. The benefits and
incentives are granted by the MIC at its discretion.
Exemption from income tax for up to three consecutive years for an enterprise
engaged in the production of goods or services. Incentives under the Myanmar
SEZ Law include:
tax holidays for the first five years
50% income tax relief on revenue from products sold overseas for the next
five years.
50% income tax relief on reinvestment obtained from export sales for the
following five years.
Interest rate:-
10% (per annum) interest rate provide a central bank.
- Minimum Bank Deposit Rate 8%(per annum).Maximum Bank Lending
Rate 13%(per annum)
In a industry area total labour force is 32.53 million (2012), and in wood
industry for a 7% for a labor force.
In burma, employment is easy available and that the more efficiently work for
Textile industry.
67
Social factor:
Burma people are educated and are well represented in all of the major
professions, as well as organizations.
Technology is perhaps more kindred to engineering than to Textile in its
function and consequently in its educational requirements.
Technological factor:
In burma technology is one the leading exporters of teak Textile products in
the whole nation. Specializing in manufacturing of teak Textile decking for so
many years.
In Textile product for most Profitable utilization of Cotton is usually an
essential requirement for organization.
Textile conversion plant to be successful, its product must be competitive in
price and quality with other Textile industries throughout the world as well as
with industries using other types of raw material.
The professional wood technologist is the key to maintaining this competitive
position.
Legal factor:
In industry ,partnership firms will be easily start with organization, because it
is not compulsory to get registration process.
In industry no limit for requirement for share capital.
Commercial tax is no value added tax payable for business.
Those with a responsible and long term strategy to engage with Myanmar would be
advised to understand how a creative partnership between business, industry and the
education and training sector will need to be at the centre of any engagement over the
next decade.
68
Business plan
Marketing Plan
Vision:-
The firm utilized future goal add want to achieve that a vision is make to fulfill
the customer requirement and create great image in customer mind
Mission:-
Mission focuses the Burma industry action and define specific strategies needed to
adjusted goal
We want to Export cotton finished Products in Burma. We are Building or starting our
ageny of Arvind Mills in Burma and one Agency in Ahmedabad. And taking the
goods from Arvind Mills. In Burma there is growing a Textile industries and it is also
increasing their economy. And the main benefit is that the Burmese People are
Wearing a cotton clothes in the festivals. So that’s why we are targeting some textile
industries. We Exporting 10000 meter cotton clothes per month and as per demand
also by targeting companies. We cover the whole market of Burma by exporting
cotton clothes to this company.
(1) A1 GARMENT COMPANY LIMITED
(2) THY GARMENT COMPNY LIMITED
(3) MYANMAR FASHION DESIGNER GROUP (MFDG)
(4) SHINE LAUNDRY LIMITES
69
Import And Export Rules And Regulation
Import / Export Licensing system of Burma
Law Governing Licensing
The main law governning the authorization of licensing is contained in the Control of
Imports and Exports ( Temporary ) Act, 1947, which has been amended when
necessary and which is still in force. This law is administered by the Ministry of
Commerce which, from time to time, issues necessary orders, notification, directives,
pertaining to all export / import matters including issuance of licences and permits as
well.
Licensing Authority
The authority to issue export / import licences and permits is delegated to Directorate
of Trade and Department of Border Trade under the Ministry of Commerce.
Directorate of Trade is authorised to issue export / import licences and permits for
export / import by overseas. Department of Border Trade is authorised to issue export
/ import licences for cross border trade.
Registration
All private business enterprises, both local and foreign, co - operative societies, joint -
venture organizations, desirous of carrying on export / import business are required to
apply to the Directorate of Trade for registration as exporter / importer.
Limited companies inclusive of foreign companies or
branches registered under Myanmar Companies Act;
(D) Co-operative societies registered under the Co-operative
Societies Law;
70
Amendment of certificate
4. Alteration, addition or amendment is allowed upon payment of Kyats 300
per entry.
Registration of Exporter/Importer
Registration
1. The following individual/enterprises desirous of carrying on export/import business
may apply to the, Directorate of Trade for registration as exporter/importer:
(A) A citizen or associate citizen or naturalized citizen
if the applicant is a sole proprietor;
(B) Partnership firms;
(C) Limited companies inclusive of foreign companies or
branches registered under Myanmar Companies Act;
(D) Co-operative societies registered under the Co-operative
Societies Law;
Term of registration, registration fee and extension fee
2. Term of registration, registration fee and extension fee for
exporter/importer are as follows:
(A) Terms of registration 1 year,2 years or 3 years
(B) Registration fee or extension
fee for one year Kyats 15,000/-
(C) Registration or extension
fee for two years Kyats 20,000/-
(D) Registration or extension
fee for three years Kyats 30,000/-
71
Application for extension of certificate
6. (A) Application shall be made prior to expiry of the term of registration;
(B) If applied after the expiration, the following penalty
shall be paid in addition to the relevant extension
fee:
(i)Within one month from the expiry- Kyats 500/-;
(ii)Within two months from the expiry- Kyats 1000/-;
(iii)Within three months from the expiry- Kyats 1500/-;
Cancellation of registration
8. As mentioned earlier in Para 5, the exporter/importer Shall, at the expiry of
registration, apply for extension. The registration will be cancelled if he fails to apply
for extension after three months from the date of expiry.
Export / Import licences
Generally every export / import by private business enterprises and State Enterprises
are subject to export / import licence / permit issued by the licensing authorities
concerned. The validity of export / import licence / permit issued by the Directorate of
Trade is normally six months from the date of issue, and can be extended for three
months period at a time.
72
ORGANISATIONAL STRUCTURE OF ARVIND TEXTILE
COMPANY
The new structure was focused on the business processes andthe
customer. The new structure at the top management level is the same. Five area Retail
,supply, wholesalers, warehouse, storage Industry/Commercial, cotton and silk
arecustomer centred and come under the director (marketing). Textile industry along
with two new departments IT & Supply Chainand R&D are under the director
(exportig). Each industry would have itsown HR, IS, finance, logistics, sales,
engineering, etc..
The major change is the introduction of the territories covering asmaller
geographical area and focusing on specific customer segments. Inretail cotton product
in the new structu exporting new designed product and better quality that make the
important of the product and creat the image in the customer mind
SOME SALIENT FEATURES OF THE NEW STRUCTURE ARE:
Highly empowered work force
Decentralized decision making
De-linking of authority from hierarchical levels
Orientation towards internal and external customers
Regular market research and customer surveys
Conscious brand building efforts
73
HUMAN RESOURES DEPARTMENT
Human Resource
Human Resource in Burma
Manager 1
distributer 1
Agent 1
Employees 3
Human Resource in Ahmedabad
Manager 1
Distributer 1
Agent 1
Employees 3
Labour laws
In Burma labour law is commenced from about 1830 with the growth of plantation
industry.
Trade Union Act (1926)
Trade Disputes Act (1929)
Workmen’s Compensation Act (1926)
Payment Act (1936)
Shop And Office Employee Act (1951)
Leave And Holiday Act (1951)
Minimum Wage Act (1949)
Social Security Act (1954)
74
These Workers have to work 10 to 12 hours in a day and in a peak day they work 1 to
2 o’clock in textile company. If Company fire the employee than they have to give 3
times of the salary to that person. The majority of female workers are more but the
problem is Insecurity, Rapping, Kidnapping, Robbery etc. so that’s why company has
to close at 7 O’clock in evening otherwise give a transportation services to them.
Social Security Office prepared a law for the temporary workers to pay a 120 to 200
kyat wages by company per day But company do not do they give only 80 to 100
wages to them.
This department researches, monitors, and enforce safety and health standards in
factories. Its inspectors are authorised to fine employers who breach minimum safety
and health standards, and who commit other transgressions such is not complying
with trade disputes awards, or not remitting social security contributions.
Working Hours
Typical working hours are as follows:
The Working peoples takes payment 9000 to 10000 kyat in a month. But they work
overtime for that 1 hour they get 25 to 30 kyat in a day. Every company has a policy
to give honor bonus 1000, 2000 or 3ooo kyat to employees. In underground mines 8
hrs a day and 40hrs a week.
The workmen’s compensation act stipulates for compensation to be paid by the
employer if a worker not covered by the social security act 1954 suffers injury
resulting in temporary or permanent disability or death in the course of performing his
duties.
Wages and Salaries
In private enterprises, wages and salaries are negotiated between the employer and
employees. A factory worker can earn from about k9000 to k10000 in a month,
depending on his skill level.
75
UNIQUE SELLING PREPOSITION[USP]
Textile exporting through manufacturer two reportable segments, namely downstream
silk and exploration and production.downstream in other product marketing sector,
textile exporting has a strong market share in cotton sales specifically in urban
markets and second highest market share in silk sales all over burma. It has been
pioneer in this market with several retail initiatives such as.
PRODUCT
Imports
textile imports products depending upon the domestic demand supply scenario.
Textile is on a regular basis imports its product requirements mainly from the Middle
East. Occasional there are import requirements of cotton , silk , woolen cloth. In
Burma there is no more Textile company so that is the opportunity for us to gain a
profit margin. And mostly company importing the cotton product at a great margin
from china, USA, Thailand and more.
Exports
Textile industry exports products from its production department on a regular basis.
The products which are exported regularly are cotton ,silk Products exports are done
on both cash and credit basis.
Both import and export of products are done through tender. Tender invitations are
only sent to counterparties who are registered with burma Companies interested in
registering with burma for buying/supplying products.
76
PROMOTION
To gain mindshare and market share of Burma is chanting a new marketing mantra:
Fuse online marketing plans with offline advertising. To promote its new launch
design
We are planning to tie-up with other sports channels and programs soon for the
purpose of minimized the cost of advertising.
Promotion Activity
Launching
of product
Initial phase
of product
In growth
phase
Price reduction
√ √
Give to same extra %(5% extra)
same extra %
PRICE
The price decided after the profit margin that is 45 kyat per meter for the importing
companies which includes all the type of taxes costs and expenses like transportation
cost, revenue cost etc.
PLACE
We have planned to doing exporting in Yangon area because most of population in
this area and having proper industrial development in this area. And it is nearest to
most of our targeting companies.
77
SEGEMENTATION, TARGETING, POSITIONING (STP)
SEGMENTATION
The Arvind mill is cloth producing company and making cotton cloth arvind mills is
a company related to cotton ,silk ,woolen , polyester, with services related to them.
they producing quality product with different types of design which are useful for
special movement.
TARGETTING
Arvind mill is not target any high class or middle class customers As we know that
the burme people always like cotton cloth & other product like silk such kind of
design which is used by everyone. So it is not that kind of company which targets any
special customer. Other than these some of the products are marketed and they target
youths. And this companies are situated in Yangon Area. This is contract basis and if
we collect more than that demand which is getting by companies than we decided to
give commission on by order size. We are targeting some of the companies which is
given below:
(1) A1 GARMENT COMPANY LIMITED
(2) THY GARMENT COMPNY LIMITED
(3) MYANMAR FASHION DESIGNER GROUP (MFDG)
(4) SHINE LAUNDRY LIMITES
POSITIONING
The third and final part of the SEGMENT - TARGET - POSITION (STP) process is
'positioning.' Positioning is undoubtedly one of the simplest and most useful tools to
marketers. After segmenting a market and then targeting a consumer, you would
proceed to position a product within that market.
Positioning is all about 'perception'. As perception differs from person to person, so
do the results of the positioning map e.g what you perceive as quality, value for
money, etc, is different to my perception. However, there will be similarities.
78
Modes of Transportation System
Modes of Transportation INDIA TO BURMA
Air
Sea
The modes of transportation for exporting in Burma of cotton clothes is by
Waterway, Airway.
SOURCES OF FINANCE
We get the finance from credit and cash also. We pay a 70% amount of purchasing
cotton clothes in cash and remaining part is on credit. And when get the profit from
exporting goods to targeting companies than give the remaining amount to Arvind
mills. And also to pay the salaries to agency or other people like employees, agents,
manager etc.
79
PRO FORMA FINANCIAL STATEMENT & BUDGET
Cost of Project
(Rs. In ten
thousand)
Transportation charges 200
Cotton clothes 40
Warehouse charges 1.7
Employee expense 2
Admin and selling expenses 2
Preliminary expenses 2
Research and development
expenses 10
Tax charge 3
Duck charge 1
TOTAL 261.7
After studying country and industry, cost of project and proposed means of finance
for the project are in the above tables. The total cost of exporting in the Burma onaly
supply of raw material of cotton product ..
Sales Realisation
Year 1 2
Exporting 25000 30000
Production(TPA) 20000 23000
Capacity utilisation 70% 80%
Sales realisation
(Rs. in ten thousand) 180000.00 210000.00
80
PRO FORMA ANNUAL PROFIT/LOSS STATEMENT (1 TO 2 YEARS)
Profitability Estimates (Estimates of Working Results) (In Ten
thousands)
Year 1 2
A. Sales realization 180000.00 210000.00
B. Cost of production
Raw materials 147420.00 168480.00
Power 0.00 0.00
Wages and salaries 231.4670 242.5600
Factory overheads 0.50 0.53
Transportation Expenses 2000.00 2200.00
Administration expenses 1000.00 1100.00
Advertisement Expenses 42.00 37.80
Selling expenses 689000.00 766000.00
D. Gross profit before interest 1052477.02 1224306.74
Interest on term loans 12.00 12.00
Inerest on bank borrowing 9.58 10.95
G. Operating profit 1052447.84 1224276.20
H. Preliminary expenses written off 0.20 0.20
I. Profit/Loss before tax 1052447.64 1224276.00
J. Provision for tax 315730.93 367280.12
K. Profit after tax 736716.71 856995.87
L. Retained profit 736716.71 856939.71
N. Net cash accruals 736724.51 856947.51
This is the agreement of exporting cotton product of two years. The profit after tax is
increasing. Net cash accruals is also increasing for 2 years as 736724.51, 856947.51
respectively which shows that the company will grow.
81
Projected Balance Sheets
At the end
of the
construction
period Years
1 2
Liabilities
Share capital 468 468 468
Reserves and surplus 73.67 85.70
Secured loans
Term loans 100 100.00 93.75
Working capital advance 73.71 84.24
Unsecured loans
State Govt. loan 0 0 0
Current liabilities & Provisions
Suspense Account 0 736643.04 1593570.73
Trade credit 614.25 702.00
Total 568.00 737972.67 1595004.42
Assets
Fixed assets
Gross block 426.35 426.35 426.35
Less: Accumulated depreciation 7.60 15.19
Net fixed assets 426.35 418.75 411.16
Investments
Current assets, loans and advances
Raw materials 614.25 702.00
Finished goods 36.86 42.12
Cash & bank balances 139.65 736864.16 1593805.42
Total 568.00 737972.67 1595004.42
82
6.3) Overview of Soft drink Industry and
Business Plan
INTRODUCTION OF SOFT DRINK INDUSTRY
A Soft Drink is also called (Soda, Coke, Soda pop, Fizzy drink, Minerals) is
Beverage that typically contains water, usually a flavoring agent and
sweetness. The sweetness may be sugar, fruit juice or some combination of
these. Soft drinks are called “soft” in contrast to “Alcoholic Drinks”. Widely
selling soft drink are cola, cherry, lemon-lime, orange, grape, vanilla,
gingerale, fruit punch.
The term Soda water was coined in the year 1798. The “soda fountain”
patented by Samuel Fahnestock. The first marketed soft drinks in the Western
world appeared in the 17th century. They were made of water and lemon juice
sweetened with honey. In 1676, the Compagine-Limonadiers Company of
paris was created monopoly for the sale of lemon soft drinks. Before 1970
companies used aluminum cans and after 1970 companies were used plastic
bottles to keep soft drinks.
Coke and Pepsi is major player in the non-alcoholic sector. These two
companies are introduce different flavor of non-alcoholic beverage and given
high growth to soft drink industry. The Data monitor found that total market
value of soft drinks reached 367.1 billion in 2009 further, There are three
major players in the soft drink industry in global market. And Coca-Cola is
king of the soft drink industry. Coca-Cola covers a global market share of
around 50%, other PepsiCo covers around 21% and Cadbury Schweppes
covers around 7% market shares. Other than smaller companies like as Cott
Corporation and National Soft Drink Company covers the remaining market
share.
INTRODUCTION OF SOFT INDUSTRY IN BURMA
A growing number of consumers in Burma. Moreover, consumers are not
limited only local people but foreign visitors are visit to country. In 2012 more
than 550000 visitors landed in Burma Airport. Burmese people want to cool
soft drinks when they want to refresh and enjoy themselves.
Three major companies are producing and distributing soft drinks in Burma:
(1) Burma Golden star Co. Ltd
(2) Pinya Manufacturing Co. Ltd
(3) Loi Hein Co. Ltd
83
SWOT ANALYSIS
Strength:
The cost of living in Burma is low
Burma has growing number of consumers for soft drink
The law and Policy are encourage the fruit and other agriculture
Development of Retail and Wholesale market
Government give subsidies for agriculture business
Burma has lots of land for growing crop and fruit
Weaknesses:
Burma’s small population limits its market size
High taxation policy for foreign marketers
Very long process for ISO certificate
Garbage and Environment problems
Opportunities:
Renewable Resources
Renewable Technology
Corporate Social Responsibility initiatives
Well establish market niche
Threats:
Competition
Difficult to compete with other local soft drink companies
High level of cost
Local customers are more preferred local soft drinks brand
Follow well establish corporate ethics and workplace right policy
Threats for change of rules and regulation because of changing
Ministry of Industry.
84
PESTL ANALYSIS
Political:
New political party change new set of rules and regulation for the
marketers.Resident companies’ corporate tax rate is 10% and non-
Resident companies corporate tax rate is 40%.
All the soft drink manufacturers are under the control of Food and Drug
Administration (FDA).
Economic:
50% income tax relief on revenue from products sold overseas for the
next five years.
Burmese standard of living is increasing therefore they consume soft
drink products.
The government provides insurance against political risk for both
domestic and foreign firms which positively affect international
business.
Social:
Burma is socially very adoptable and every person or business group
will effortlessly will be able to adopt the culture of Burma and establish
a new business venture in Burma.
Social media outlets (i.e. Facebook, Twitter,) keep consumers directly
connected to the brand.
There life style and trend are encourage to consume the soft drink
products.
Technology:
New tech advancement in manufacturing and quality improvement
concepts are improving bottling operations efficiency.
Advance Packaging Technology in Burma increase the utility of
employees and capital, which increases productivity.
Environment:
Burma’s hottest climate helps to selling cool soft drink products.
85
Business Plan of Fresh soft drink pvt ltd.
General Plan:
Company Name - Fresh Soft Drink pvt ltd.
Tag Line - “Sweetness In Every Drop”
Fresh soft drink Company’s Products
1. Fresh Orange
2. Fresh Mango
3. Fresh Masala Soda
4. Fresh Lemon
5. Fresh Lime
Target Customers
Wholesaler
Mall
Multiplex
General public
Retail shop
Pricing Strategy (1 IND RS = 16.50 Burma Kyats)
Distribution
Channel Members
Price of 200 ml
(Rs.)
Price of 600 ml
(Rs.)
Price of 1
ltr.(Rs.)
Wholesaler 8 14 19
Multiplex/Mall 8 14 19
Retailer 9 16 21
Customer 10 18 25
Raw Material Supplier
Purchase Fruits from Farmers
Purchase Sugar from Sugar Producers
Purchase raw material of Glas.
86
Marketing Plan:
We are Introduce our products to public and give product awareness for using
Advertising media.
Advertising Media:
Television advertisement
Banner
Holdings
Display of Purchase
Human resource:
The human resource agency will be contacted for hiring employees.
For employees that need to be hired on temporary basis a contract
company. supplying human resource will be contacted.
Do campus interview for recruiting employee.
87
Human resource Department
Particular Designation No. Of
Person
Education
Qualification
Skills Required Salary (per
month)
1. Marketing
manager
1 Master degree
(MBA,PGDM)
(Marketing)
Having
experience Of
1year
-Having Good
Leadership Skills,
Managing Team.
-Taking Decision
Regarding All The
Marketing Activity
Including Stocks
Also.
Rs.50, 000
2. Sales
executive
10 12th pass out
having
experience of
1 year,
Bachelors
degree
(Pursuing/
completed)
working for
part time basis
or for a
temporary
basis
-Good
communication
skill,
-He/She should
know Norwegian
and English
language
-Handle stall and
attract customers.
15,000/- Rs
3 Finance
manager
1 Master degree
M.B.A. with
finance
specialization,
Having
experience Of
1year
Good analytical
skills, taking
effective decision
regarding finance.
Also logical skills
required.
50,000/- Rs
88
4 H.R.
manager
1 Master degree
M.B.A with
human
resource
specialization
Good
communication
skill,
-He/She should
know Burmese
and English
language, human
observation skills,
Conflict handling
skills. Good
relation maintain.
25,000/- Rs
5 Employees 40 8,000/- Rs
53
89
Financial plan
Projected profit and loss account quarterly: (Phase I)
Projected Profit and loss Account for a year(Phase II)
Particulars Amount (Rs.)
Sales (including closing stock) 95,00,000
(-)Purchases (includes Purchase expenses) 30,00,000
Gross Profit 65,00,000
(-)Operating expenses:
Rent( include rent of Godown in India) 6,00,000
Salary and incentives 25,00,000
Advertisement expenses 3,00,000
Other Expenses (Electricity expenses, telephone expenses, taxes, export-import expenses, discount coupon, etc.)
11,50,000
Net Profit 19,50,000
Particulars Amount (Rs.)
Sales (including closing stock) 12,00,000
(-)Purchases (includes Purchase expenses) 3,00,000
Gross Profit 9,00,000
(-)Operating expenses:
Salary and incentives 6,00,000
Advertisement expenses 1,00,000
Other Expenses (Electricity expenses, telephone expenses, taxes, export-import expenses, discount coupon, etc.)
30, 000
Net Profit / Loss 2,70,000
90
6.4) Overview of Coconut Industry and
Business Plan
INTRODUCTION OF COCONUT INDUSTRY IN BURMA
The coconut palm is a member of the family Arecaceae. It is the only accepted
species in the genus Cocas. The term coconut can refer to the entire coconut
palm, the seed, or the fruit, which, botanically, is a drupe, not a nut. The
spelling cocoa nuts an archaic form of the word. The term is derived from
16th-century Portuguese and Spanish coco, meaning "head" or "skull" ,from the
three small holes on the coconut shell that resemble human facial features.
Found throughout the tropic and sub tropic area, the coconut is known for its
great versatility as seen in the many domestic, commercial, and industrial
uses of its different parts. Coconuts are part of the daily diets of many people.
Coconuts are different from any other fruits because they contain a large
quantity of "water" and when immature they are known as tender-nuts or jelly-
nuts and may be harvested for drinking
The importance of the palm lies in the fact that not only does it supply food,
drink and shelter, but it also provides raw material for number of important
industries. It is also essentially a crop of the small landholder who obtains
cash for the purchase of necessities of life by the sale of coconut and coconut
products.
The coconut has also the singular feature of yielding under suitable
conditions, the valued nuts almost at monthly intervals all through its life of
about 80 years.
The coconut industry is, therefore, a unique tree among the economic plants
of the tropics. The coconut industry is intimately connected with the economic
and domestic life of the inhabitants of the coconut growing countries. It
provides employment and perhaps the only source of livelihood to tens of
thousands of people.
91
SWOT ANALYSIS
Strength:-
The climate is favorable for coconut industry for plantation of coconut.
Easy availability of raw material for manufacturing.
Favorable geographic position because the supply firm place in
concentrate on supply area.
The establishment of business modern commercial policy apply .
The fim leading position in market.
Weaknesses
the mix marketing inadequate to condition of cmpitition.
Existence of some coconut brands similar to those of competitor.
Lack of satisfactory personnel motivation.
Opportunity
The opportunity for firm’s location close to deliver and consumers.
Protecting commercial macroeconomic policy which favorable to the
firm.
Growing demand cased by intensification of milk consumption.
Threats
Seasonal demand of some product of coconut .
Existence of big number of substitute .
threat
weakness
Strength
opportunity
92
STRUCTURE, FUNCTIONS AND BUSINESS ACTIVITIES
ORGANIZATION STRUCTURE OR INDUSTRY STRUCTURE
The extension activities of each unit is presented in detail in the annexure.
Although extension units are established in different ministries, there is
uniformity in the organizational structure of the units. Each structure is headed
by a Director General. There are directors within the structure (technical and
non technical ). Each director is supported by deputy directors and assistant
directors handling different technical subject matter.
They also bridge the farming community with the mother organization. Each
mother organization maintains formal and informal linkages and networks with
relevant stakeholders to strengthen their services to the targeted audience. It
is an area to be further strengthened to expand sustainable partnerships
locally and globally.
Monitoring and evaluation mechanisms is another area to be well defined and
focused for each stratum. Method of recruitment of the staff and the
educational qualifications required for recruitment are in line with the national
policies.
Direct recruitment for managerial level positions command a recognized
university degree and the middle level technical officers require a two year
diploma in the identified fields. Applicants who fulfill the basic educational
qualifications are to sit for a written examination conducted by an
independent body, the department of examination of Burma. The successful
candidates are to face an interview.
93
1. Unorganized or organized
Organized Structure
Type
Coconut
Industry
Unorganized
Organized
For coconut industry the organized structure type is unorganized as well as
organized having proper management structure
2. Type of Organization Structure:
In Coconut industry types of organized structure as under:
Type of Structure Coconut
Industry
Centralized
Decentralized
Type of Organization Structure can be Centralized as well as Decentralized,
for Coconut Industry it is decentralized where all the level of employees can
participate in decision making in the organization
94
3. Hierarchy & Departments in selected company
FUNCTIONS AND BUSINESS ACTIVITIES OF SELECTED
INDUSTRY
1. Forms of Business (Sole proprietorship, partnership Etc.):
Forms of Business Burma Coconut Industry
Sole Proprietorship
Partner ship
HUF
Co-operative
Chairman
C.E.O
Manager Manager Manager Manager
Finance
Manager
Marketing
Manager
Production
Manager
HR Manager
Employee Employee Employee Employee
95
The forms of business for coconut industry there is Sole Proprietorship where
business is run by single individual, partnership where there is more than two
individuals running the firm.
Modes of Transportation
Modes of
Transportation
Burma Coconut Industry
Railway
Road
Sea
The modes of transportation for raw material as well as for finished products
for coconut industry is all railway, roadway and waterway.
Modes of Communication
Modes of
Communication
Burma Coconut Industry
Telephonic
Post
The modes of communication for coconut industry is all Telephonic, E-mail
and Post.
96
Primary Activity
COCONUT FARMERS
Coconut Garden Homestead Garden
Harvesting Tender
Coconuts from
selected Palms by Climbers
Recycling Husk Recycling Husk
Minimal Processing, Partial
Dehusking
Tender Coconuts (Women SHG)
Transportation of Minimally
Processed Tender Coconuts
Chilling and Storage at the
cold storage infrastructure
created in the
Agricultural Wholesale market
Retail Outlets
Consumer
97
COMPARATIVE POSITION
COMPARATIVE POSITION OF APPAREL INDUSTRY OF BURMA
AND INDIA
Particulars Burma Coconut Industry Indian Coconut
Industry
Technology Comparatively low Comparatively high
Pricing Less High
Communication Fixe Line Services, Mobile
Handsets, Internet, Calling
Facilities, Postal Services
and Courier Services
Fixe Line Services,
Mobile Handsets,
Internet, Calling
Facilities, Postal
Services and Courier
Services
Transportation Roadways, Railways, Sea Roadways, Railways,
Sea
Distribution Manufacturer to user Manufacturer to user
Usage Festival, Regular Bases Festival, Regular Bases
Purchase Pattern Direct & Indirect Direct & Indirect
Target Market All All
Raw Material
Availability
Easily Available Easily Available
Natural Resources Favorable Favorable
98
THE PRODUCT
Desiccated Coconut for Bakery & Confectionary
Coir Mats & Carpets for Cleanliness
Coco Pots & Poles for Horticulture
Coconut Ornaments & Handicrafts
Coconut Oil for Culinary & Body Care
Coconut Milk Powder and Cream for Cooking
Coir Brushes and Brooms for Cleaning
Activated Carbon for Air and Water Purification
b. Product feature preference:
Coconut Products
Our Coconut Products widely used for cooking in different forms like coconut
milk, powder, coconut biscuits, coconut oils, coconut pickle, coconut sweets
etc. it is also used to add taste in various cuisines. We manufacture this
coconut products using quality coconuts, our team of professionals use high-
end technology to process this coconut in order to maintain nutritional value
and freshness. This is extensively used in various culinary and non-culinary
purposes due to its high quality and medicinal value.
Coconut Oil
We offer Coconut Oil widely used for cooking purposes and culinary
purposes, unique aroma. These are manufacture using premium coconut
material based advanced technologies under the supervision of experienced
professionals. This coconut oil is highly demanded in the market. These
products are easily available in the market; clients can avail from us at
affordable price.
99
Semi Husked Coconuts
Specifications
Type semi husked
Colour brown / light brown
Weight approx. 500gms to 600gms
Nut size 12 to 13 inches
Packing 25 coconuts per bag
20 ft container approx. 900 bags
40 ft container approx. 1800 bags
Coconuts Shell
We provide coconut shell product for our clients coming from distinctive
industries. The coconut shell obtained from coconut are largely utilied for
developing several products like shell handicrafts, shell charcoal, shell
poeder, shell based activated carbon and even more. The coconut shell
activated carbon is widely used in environmental and industrial processes.
Clients can make these coconut based products in different grades as per
industry requirements.
Coconut Powder & Chips
We finest quality Coconut Chips and Powders at affordable rates for our
clients. Due to the quality of our products and our prompt services, we have
established a high reputation as one of the most reliable Coconut Chips &
Powder supplier.
100
Coconut Chips :
We offer coconut shell chips in both small and bulk quantities to customers
throughout the country. The coconut chips are utilized in culturing orchids as
these reduce application of fertilizers and resist fungal growth. The coconut
shell chips are a natural resource comprising of the following features.
Calorie- 5000 -6000 Moisture- 5 - 10%
Replaces regular barks Stable pH Superior aeration & water retention capacity Coconut Powder :
We are the traders of excellent quality coconut powder that is an essential
ingredient of food industry. The coconut powder is used in preparations of
several recipes like meat, fish, poultry, beverages, confectionery, vegetable
dishes, and many more. Our provided coconut powder posses following
features
Calorie- 5000 -6000 Moisture- 10 - 15%
Mesh 80,100,200
Coconut Charcoal
We expertise in providing finest quality Coconut Charcoal & Activated Carbon
to the customers according to their instructions. We offer the Coconut
Charcoal and the Activated Carbon at competitive rates for our clientele
throughout the globe.
Coconut charcoal is obtained through the carbonization of good quality raw
matured shells within limited air supply. Further, these are thoroughly
inspected for finest quality and excellent performance. Our Coconut Charcoal
range possesses features like:
Calorie- 5000 -6000
Moisture- 1 %
101
Activated Carbon :
We efficiently cater to the requisites of different manufacturers relating
Activated Coconut Charcoal Product by imparting them with the charcoal of
diverse specification in respect to volatile matter, moisture content, size, ash,
and color. We supply any quantity of Activated Coconut Charcoal Product with
Size 2/4, 4/8, 5/10, 8/16, and various other sizes.
Activated Carbon Specification:
Volatile Mater - Less than 10%
Fixed Carbon 70% - 78%
OPPORTUNITIES IN FUTURE
1. MARKETING PLAN
B. Marketing Objectives
To be globally recognized company to produce and market the best world
class quality Coconut oil by adopting world class latest environment friendly
technology and to build strong brand loyal customer base for the years to
come plus to build trust and healthy relations among our employees, our
investors, our society.
102
B SEGEMENTATION, TARGETING, POSITIONING (STP)
Major segmentation bases for consumer market (coconut
indystry)
Sr.
No
Segment
Sub-
Segment
Criteria
1 Geographic
Region North, South, East and West
Density of area Major metropolitan areas, small cities, towns, villages
City Size Urban, Sub-urban, Rural
Climate Temperate, hot, humid, rainy
2
Demographic
Age All
Sex Male, female
Marital status Single, married, divorced, living together, widowed
Occupation Professional, blue-collar, white-collar, agricultural, military
Income Under $25,000, $25,000-$34,999, $35,000-$49,999,
above 50000 5500$50,000-$74,999, $75,000-$99,999,
$100,000 Psychological Needs-
motivation
Shelter, safety, security, affection, sense of self-worth
3 Attitudes Positive attitude, negative attitude
Sociocultural
Social Class Upper, Middle, Lower
4 Culture Culture, Subculture, and Cross-Culture
Use-Related
Rate of Usage Heavy vs. Light,
5 Awareness
Status
Aware vs. Unaware,
Brand Loyalty Brand Loyal vs. Brand Switchers
Usage-
Situation
Location Home, friend’s home, in-store, hotel
6 Person Self, family members, friends, all
Targeting
Targeting Segment: House hold Geographic: All regions of the country Demographics: All Age, Family size, Gender, Income, Education of the
country. Brand Tagline: the company and its management completely believes in the brand Tagline “Healthy heart”.
103
Suruchi proteins pvt. Limited
C:-Product adaption or Modification
Core Competency
Our core competency is providing healthy coconut oil to the customer which
helps the consumer reducing cholesterol and helpful to heart disease patients.
D:-Entry in Burma
For, coconut industries we are start our business in three major city of
Burma coming next three years. Our Business start form the south
region of the Burma than after we start our business East and Central
region for next three years in Burma
1) First year we start business at YANGON city. (South)
2) Second year we start business at TAUNGOO city. (Central)
3) Third year we start business at MAWLAMYINE city. (East)
104
Starting business in YANGON.
We are going to start our business in the YANGON city. For that we are
having planned to buy the land in the middle Yangon. In Yangon area having
more population and good development.
E:-Media Mix
Media used in the Advertising are the
I. Print ad
1. Hoardings
Full time hording will placed at the
manufacturing and selling units of the firm.
2. Newspaper
Print ad will published to the local news paper
related to the coconut oil.
105
F:-Sales Promotion
Sales Promotion for Coconut oil industry
Promotion Activity
Launching
of product
Initial
phase of
product
In
growth
phase
Price reduction
√ √
Give to same extra %(5% extra)
same extra %
√
Price reduction:-
Price reduction will be providing to the consumer in high context at the
launching of the product and initial phase of product. As the time will reduce
the product price 90 kyat. The Price reduction will be provided on coconut oil.
The margin of the Price reduction will as par the price of the product and its
category.
Give to same extra %( 5% extra):-
We will be providing to the consumer in high context at the launching of the
product that time give to same extra % . Our companies provide a 5% extra
for coconut oil.
G:-METHODS OF PAYMENT
Coconut Industry:
Payment Method Coconut Industry
Cash
Credit
106
Whole seller:
In Burma coconut industry the whole seller are in market. We are planning to
produce a coconut oil after production process & see the output of oil. So we
will use method of payment as credit as well as cash payment, where credit
will be for period of 15 days.
Retailer:
In the coconut industry in burma the whole seller to retailer are in market. We
are planning to produce a coconut oil after production process & see the
output of oil. So we will use method of payment as credit, as well as cash
payment, where credit will be for period of 15 days.
Customer:
In the coconut industry in Burma , the customers are in market. We are
planning to produce a coconut oil after production process & see the output of
oil. So s we will use two method of payment as shown in above table namely,
cash & credit, where customers are pay the cash at a time purchase the
goods.
107
PRO FORMA FINANCIAL STATEMENT & BUDGET
Cost of Project
(Rs. In Ten
Thousand)
Land and site development 250
Building 100
Plant and machinery 49.35
Miscellaneous fixed assets 2
Preliminary expenses 2
Pre-operative expenses (
including interest during
construction) 20
Contingency margin 5
Working capital margin 139.65
TOTAL 568
After studying country and industry, cost of project and proposed means of
finance for the project are in the above tables. The total cost of the project will
be 568 in ten thousands. cost for land and site development, building, plant
and machinery and other fixed assets will be 250,100,49.35,2 respectively.
Preliminary expense and pre-operative expense will be 2 and 20 respectively.
Installed Capacity
Basic Assumptions Installed capacity in Tin 30000
Year Capacity utilization
2012 70%
2013 80%
Onwards
108
Installed Capacity of the factory is 30000 per Tin. Utilization for the three
years will be 70%, 80%, production will 21000 and 24000 respectively.
Price 900
Cost 780
The proposed means of finance
The proposed means of finance
(Rs. In Ten Thousand)
Share capital 468
Term loans 100
State government's special incentive loan ( Repayable in 6 installments after 12 years) 0
568
The proposed means of finance is in ten thousands rupees. The share capital
is 468.The term loan is 100 and there is no State government's special
incentive loan.
Sales Realisation
Year 2012 2013
Installed capacity(TPA) 30000 30000
Production(TPA) 21000 24000
Capacity utilisation 70% 80%
Sales realisation (Rs. in ten thousand)
1890000.00 2160000.00
Installed capacity of the factory will be 30000 Tin per annum. Capacity
utilization for the next three years will be 70%, 80%. Total production will be
21000, 24000 Tin for the two years. Sales revenue for two years will be
1890000, 2160000, respectively.
109
Working Capital Requirements
(Rs. in Ten Thousand)
Item Norms in months
Years
2012 2013
Raw materials(including consumables) 0.5 614.25 702.00
Stock-in-process 0.03 36.86 42.12
Finished goods 0.03 36.86 42.12
Book debts 1 0.00 0.00
Total current assets 687.96 786.24
Less: Margin for working capital from long-term sources(25% of total current assets) 0 0.00 0.00
Less: Trade credit for raw materials and consumable stores 0.5 614.25 702.00
Net Working Capital 0 73.71 84.24
110
PRO FORMA ANNUAL PROFIT/LOSS STATEMENT
Profitability Estimates (Estimates of Working Results) (In Ten
thousands)
Year 2012 2013
A. Sales realization 1890000.00 2160000.00
B. Cost of production
Raw materials 147420.00 168480.00
Power 0.00 0.00
Wages and salaries 102.48 112.73
Factory overheads 0.50 0.53
Transportation Expenses 2000.00 2200.00
Administration expenses 1000.00 1100.00
Advertisement Expenses 42.00 37.80
Selling expenses 689000.00 766000.00
D. Gross profit before interest 1052477.02 1224306.74
Interest on term loans 12.00 12.00
Inerest on bank borrowing 9.58 10.95
F. Depreciation 7.60 7.60
G. Operating profit 1052447.84 1224276.20
H. Preliminary expenses written off 0.20 0.20
I. Profit/Loss before tax 1052447.64 1224276.00
J. Provision for tax 315730.93 367280.12
K. Profit after tax 736716.71 856995.87
L. Retained profit 736716.71 856939.71
M. Add: Depreciation 7.60 7.60
Preliminary expenses written off 0.2 0.2
N. Net cash accruals 736724.51 856947.51
This is projected estimates of Coconut for two years. The profit after tax is
increasing. Net cash accruals is also increasing for 2 years as 736724.51,
856947.51 respectively which shows that the company will grow.
111
Projected Balance Sheets (Rs. in Ten Thousand)
Particulars
At the end of the
construction period Years
2012 2013
Liabilities
Share capital 468 468 468
Reserves and surplus 73.67 85.70
Secured loans
Term loans 100 100.00 93.75
Working capital advance 73.71 84.24
Unsecured loans
State Govt. loan 0 0 0
Current liabilities & Provisions
Suspense Account 0 736643.04 1593570.7
3
Trade credit 614.25 702.00
Total 568.00 737972.67 1595004.4
2
Assets
Fixed assets
Gross block 426.35 426.35 426.35
Less: Accumulated depreciation 7.60 15.19
Net fixed assets 426.35 418.75 411.16
Investments
Current assets, loans and advances
Raw materials 614.25 702.00
Stock-in-process 36.86 42.12
Finished goods 36.86 42.12
Book debts 0.00 0.00
Cash & bank balances 139.65 736864.16 1593805.4
2
Misc. expenditure & losses
Preliminary expenses 2.00 1.80 1.60
Total 568.00 737972.67 1595004.4
2
112
This is projected balance sheet of Coconut for two years. In the initial year
reserves and surplus is less but it increases in the second year because
Coconut is getting profit. Here for Coconut trade creditors are increasing.
From the total assets net fixed assets are decreasing and Coconut there are
no debtors. Cash & bank balance is increasing year by year..
OPERATIONAL PLAN
Salary calculation
Designation No. of Person Salary
C.E.O 1 840000
MD 1 720000
General manager 1 600000
Manager
Finance Manager 1 180000
Marketing Manager 1 180000
HR Manager 1 180000
Production Manager 1 180000
Admin Staff
Accountant 4 384000
Clerk
5 360000
HR Executive 2 192000
HR Assistant 3 216000
Sales executive 2 192000
Assistant 3 216000
Labor Force
Supervisor 8 768000
Worker 48 4032000
Plant sweeper 6 288000
Cleaner 6 360000
Security 6 360000
Total 10
0
10248000
113
6.5) Overview of rubber industry and
business plan of MRF Tyres
INTRODUCTION OF RUBBER INDUSTRY
Rangoon (Mizzima) – Burma expects to export 95,000 tons of rubber in the
2012-2013 fiscal year, 10,000 tons more than last year, an official of the
Myanmar Rubber Planters and Producers Association (MRPPA) said.
The largest buyer of Burma’s rubber is China. Burma also exports rubber to
Singapore, Malaysia, Indonesia, Vietnam, Korea and India. Presently, the
price of rubber is a little low, although prices will increase toward the end of
the year, said Khaing Myae, the secretary of Myanmar Rubber Planters and
Producers Association.
“Burma sells rubber to any country that wants to buy. Our association has
arranged for any person inside the country to sell rubber to foreign countries,”
said Khaing Myae.
Naing Lwin Tun, a rubber plantation owner in Mawlamyaing, said he
anticipated rubber prices to be higher by December.
In Burma, rubber is grown year round except for Mandalay, Magway [Magwe]
and northern Sagaing Region.
114
A 110-pound bag of “ribbed smoked sheet (RSS)”rubber is now selling at 950
kyat per pound (about US$ 1.15). High quality RSS1 is 1,100 kyat per pound.
The price of RSS5 is 950 kyat per pound in domestic market.
For export, the current prices are US$ 2,600 per one ton of RSS; $2,700 per
one ton of RSS3; and $2,800 per one ton of RSS1. Last year, the price of
rubber RSS ranged from $4,800 to $5,800 per one ton in the global
market.The Myanmar Rubber Industry Association said Burma has a total of
125 million acres of rubber plantations, mainly in Mon State, Tenasserim
provinces, Karen, Bago, Rangoon and other regions, of which two-thirds of
the cultivated area is in Mon State.
In rubber cultivation and production, Burma ranks ninth in the world. Thailand
ranks NoBurma’s rubber production reached 100,000 tons in the fiscal year
2011-12.
In 2005-06, rubber production was around 60,000 tons, local media reported
on Wednesday.
The country's rubber export increased by 20,000 tons, reaching 70,000 tons in
2011-12 from 50,000 tons in 2005-06, fulfilling a 2011-12 target.
To further increase rubber output, a two-day workshop on rubber growing
techniques will be launched in Rangoon on Sept. 15, using local and foreign
experts.
Rubber production is increasing in Tanintharyi region, Kachin, Kayin and
Shan states, where planting of rubber is being transformed from a small scale
to a commercial scale, officials said.
Burma exports rubber mainly to China, Malaysia, Singapore, Vietnam,
Thailand, Indonesia, South Korea and India.In Burma, rubber is grown year
round except for Mandalay, Magway [Magwe] and northern Sagaing Region.
The Myanmar Rubber Industry Association said Burma has a total of 125
million acres of rubber plantations, mainly in Mon State, Tenasserim
provinces, Karen, Bago, Rangoon and other regions, of which two-thirds of
the cultivated area is in Mon State.
115
SWOT ANALYSIS
Strength :-
Rubber is unique product because of it charge high price for
their product, consumer can’t get those product elsewhere.
Rubber industry use the superior technology for meet the
consumer need
In the Burma agriculture sector is widely so agricultural vehicles
is more use than the demand of tyre product .
Law and policy encourage the business.
threat
weakness
Strength
opportunity
116
Weaknesses :-
The cost of rubber per unit is high.
Lack of propriety technology and patent negative input on rubber
industry.
Large capital requirement for production, research process,
other sponsorship require of huge amount of money.
Product range id mainly concentrate on their condition.
Opportunities
Innovation is the one opportunity to rubber industry , it helps to
meet customer’s needs.
Improvement in technology to better customer need with new
improved product and service.
Technology build competitive barriers against rivals.
The economy of Burma has projected 6.3% in 2013 and
agricultural sector has 38.2% in 2011 shows increase the need
of domestic supply of tyre.
Threats
Economic level goes down the effect of rubber industry business
by decreasing number of potential customer.
Political rules and regulation increase the risk for industry
because government change the business rules that negative
effect.
117
PESTEL ANALYSIS
Political Factors:-
Tax policy :- In paying tax in foreign currency, the tax is payable either in
monthly or quarterly installments in advance under provisions of Income Tax
Law.
The commercial tax is computed on the sale proceeds of the goods produced
within the State and sold domestic and abroad, and in the case of goods
imported, the tax is charged on the landed cost. The rate of taxes varies
depending on the type of goods.
In border trade, if the goods are imported from abroad, the commercial tax, at
the rates contained in Schedules according to the types of goods, shall be
levied with the currency used in import transaction.
The government may grant tax exemptions and reliefs to any taxpayer or on
any kind of commodity or service. It may also prescribe the maximum amount
of sale or service-receipt not chargeable to tax threshold
Political factor:-
Economical facto
Social facto
Technological Factor
Environmental Factor
Legal Factor
118
Empolyeement law
Important Laws: Myanmar Labor Law, Social Security Act, Trade Union Act, Workmen’s Compensation Act, Factory Act and Leave and Holiday Act.
• No minimum wage requirement except some specific industries (rice milling, cheroot and cigar rolling etc.)
• Hiring can be done through permission from Department of Immigration
• No work permit system. A company can sponsor a stay permit for its foreign employee of 3 or 12 months
• No requirement on number of Burmese to expatriates but in practice, foreigner can be hired in some positions that Burmese cannot perform.
Economic Factors:-
The import duty on natural rubber is more and less as on finished tyres of
the issue of tax structure. Due to increase cost of raw materials tyre
manufacturing companies profit is changing. As the material is based on
natural rubber, crude and steel. The government give the promisen to the
foreign direct investment to do the business in the country.
Exemption from income tax for up to three consecutive years for an
enterprise engaged in the production of goods or services. Incentives
under the Myanmar SEZ Law.
Social Factors:-
Presently the time is change and population is also increase day by day so
the small family also demanding for 2/4 wheelers for individuals. The sales of
tyres has gained more for the company. From the upper class families with
more than 1car per family observed to be increasing demand of tyres
exponentially. Cultures has also change so in one family the couple also
living then they want their separate vehicles for their comfort. So the tyres
company gain profit to provide better quality of tyres provide to the
automobile company so increase the demand of tyres.
119
Technology Factors:-
Now in this competitor world if the industry has to gain the profit for their
industry and industry related product then think different form the others to
increase the product and develop the latest technology for the industry to do
the better work for the industry. Now the technology change very fast in this
world so industry should also walk with the world to make better in their work.
Legal factor :-
In industry no limit for requirement for share capital.
Commercial tax is no value added tax payable for business.
Those with a responsible and long term strategy with Myanmar would
be advise to understand how a creative partnership between business
,industry and the education and training sector will need to be at the
center of any engagement over the next decades.
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MARKETING PLAN
Vision:-
The firm goal in future to fulfill customer satisfaction as per their expectation
and provide quality service.
Mission:-
Mission of the Burma industry to build a strategy to fulfill the goal .
Name of company :- Amoco tyre
Plan :- we plan to opening the tyre franchise in Burma tyres take from the
MRF TYRE LTD and supply the tyre to automobile company as per the
requirement and take order of various automobile company.
Area of opening franchise:- The area of establishment of franchise
easy to supply and low cost of transportation .so franchise opening in
yangoon.
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4 P’S OF MARKETING
PRODUCT
Types of tyres :-
Radial Tyres
Cross ply Tyres
Tube Tyres
Tubless Tyres
Eco Tyres
PRICE
Price of tyres decides as per different range of tyre and different
quality of tyre. The tyre price is between the 1700-2000kyts.
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PLACE
We have plan to supply tyre to automobile company establish in near area of
yangoon which are easy to transportation and less time to reach at company
and low transportation cost .
PROMOTION
The promotional scheme offer to automobile company . We provide the
discount when compny purchase bulk tyres .Promotion through the
advertising ,hoardings , news paper.
DISTRIBUTION CHANNEL
Distribution of tyres using through distribution channel .supply of tyres to
automobile company though the tempo because of fast transportation and
low cost.
Sales strategy
Sales is our business are client services.
12 hours service availability.
Quality services at good value.
Provide good quality service as customer expectation and their need for
customer satisfaction.
Reliability in all seasons.
COMPANY
DISTRIBUTER
CUSTOMER
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HUMAN RESOURES DEPARTMENT
Human Resource
Human Resource in Burma STAFF
Manager 1
Distributer (driver) 2
Go down employees 2
Employees 2
Maximum working hours
An employee is not allowed to work for more than 12 hours within a day except in the following circumstances:
a. Accident or threat of accident; b. Work that is essential to:
i. the life of the community; ii. national defence; or iii. security;
c. Urgent work to be done to machinery or plant; or d. An interruption of work which was impossible to foresee.
Employers that require their employees to work more than 12 hours
(maximum 14 hours) a day are required under section 40 of the Employment
Act.
Wages and salaries
In frenchies wages and salaries of employees. A employees can earn from
about k5000 to k6000 in a month, depending their working level.
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Leaves and Holidays
Workers in a private enterprises are granted the following leaves and holidays
6 days casual leaves, 30 days medical leaves, 10 days earned leaves and 21
public holidays in a year with wages.
FINANCE DEPARTEMENT
PRO FORMA FINANCIAL STATEMENT & BUDGET
Cost of Project
Rs (in
thousands)
Land & building 100
Furniture 20
Go down Rent(year) 50
Expenses 2
Transportation charge 30
Administrative charge 20
Wages & Salaries 90
Selling expenses 35
Purchase expenses 23.5
TOTAL 370.5
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6.6) Overview of Handicraft Industry and
Business paln
HANDICRAFT
Introduction
Handicrafts are unique expressions and represent a culture, tradition and
heritage of a country. The Handicraft Industry is one of the important
productive sectors. Various attempts have been made to define this broad
and diversified industry. The following definition strives to cover diversity and
complexity of Handicraft Industry.
Defining Handicrafts:
Definition According to United Nations Educational, Scientific and Cultural
Organization/Information Technology Community (UNESCO/ITC)
International Symposium on “Crafts and the International Market: Trade and
Customs Codification”, Manila, Philippines, October 1997:
Handicrafts can be defined as products which are produced either completely
by hand or with the help of tools. Mechanical tools may be used as long as
the direct manual contribution of the artisan remains the most substantial
component of the finished product. Handicrafts are made from raw materials
and can be produced in unlimited numbers. Such products can be utilitarian,
aesthetic, artistic, creative, culturally attached, decorative, functional,
traditional, religiously and socially symbolic and significant.
Definition according to Govt. of Burma:
Handicraft can be defined, which is made by hand; should have some artistic
value; they may or may not have functional utility.
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FIRM AND PROMOTERS
Firm:
The firm namely Sarvottam Handicrafts, Naypyidaw will be a sole proprietorship
firm and will function from Naypyidaw under the concerned by us.
Promoter:
Decision for entrepreneurship is promoted by 5 major reasons. These are:
Moreover, it is an Idea/Innovation that leads towards Entrepreneurship i.e.; idea
comes first and entrepreneurship follows afterwards.
Personal
Characteristics
Personal
Environment
Personal Goals
Business
Environment
Idea
Decision to Behave
Entrepreneurially
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Industry Analysis
Burma is a country of rich culture, history and traditions. India is one of
the major producer and supplier of Handicrafts products in the world.
India has been major producer and supplier of handicrafts products since
very long time. Before the industrial development, this art and industry
was a potential economic advantage for the country.
During recent years, the importance of handicrafts has been surged due
to their cultural and financial values. The small-scale industries including
handicrafts can play a major role in the development of the economy of
both developed and the developing countries equally. The 90-95% of the
total industrial products of the world is produced in small workshops run
by less than 100 people. For instance, Japan, which is at the peak of the
economic development, has considered 84% of its industries as small
and medium scale industries. In countries such as Burma and China,
handicrafts are as high as the mechanized products in quality and
volume, and are a major source of their foreign earnings. These countries
are focusing on the development of handicraft industry, in order to
strengthen the economy.
The Burma handicrafts industry is highly labour intensive, cottage based
and decentralized industry. The industry is spread all over the country
mainly in rural and urban areas. Most of the manufacturing units are
located in rural and small towns, and there is huge market potential in all
Burma cities and abroad. Handicraft industry is a major source of income
for rural communities employing over six million artisans including a large
number of women and people belonging to the weaker sections of the
society.
The Handicraft sector is highly creative sector and produces large variety
of crafts products. This industry is localized segment of the domestic and
international market. In Burma the production of craft products are done
on both large and small scale. Because of low capital investment people
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can start their business on small scale. Through this flexibility the
demand and supply can be managed Hough Burma Handicraft industry is
considered a cottage industry, but it has evolved as one of the major
revenue generator over the years. There has been consistent growth of
15% over few years and the industry has evolved as one of the major
contributor for export and foreign revenue generation.
There is huge demand for the Burma Handicraft products in both national and
international market. To match the demand and supply with quality, there is
need to have greater technological support and innovativeness with the
uniqueness in industry.
Key Facts of Burma Handicrafts Industry
Burma’s rich cultural diversity and heritage provides a unique and huge
resource for developing craft products.
The Burma Handicraft Industry is showing continuous growth rate of 15%
every year.
Handicrafts industry is one of the important segments of decentralized sector
in Burma.
Major parts of industry operates in rural and semi urban areas throughout the
country and has potential Burma and International market with around 67000
exporters to tap the market.
According to the national census of handicrafts, undertaken by the National
Council for Applied Economic Research the value of handicrafts produced
last year were of Rs 26, 213 Crores.
This Industry provides huge employment opportunities to artisans that include
women and people belonging to backward and weaker society. This is one of
the major sources of income there.
Burma’s contribution in world market is 1.2%
The total exports of crafts items: - Rs. 134129.2 millions.
Industry’s share in Burma's exports:- 1.51 %
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In spite of having diversified products, some part of Burma market are still
untapped and market is price sensitive.
Products are high priced in big and metro cities, which are beyond, reach of
people belonging middle and lower middle class.
Craft producers have to compete on price, quality and delivery for different
segments.
There is poor promotion for craft products in national market.
There is lack of awareness about new traditions and among craftsmen and
there is need of technological support and training.
Classification:
Handicrafts industry comprises diversified products portfolio and there is large
variety available in market. Handicrafts products can be distinguished into
following:
Metal ware, Wood ware, Hand printed textiles, Embroidered and crocheted
goods, Shawls, Carpets, Bamboo products, Zari goods, Imitation jewellery,
Paintings, Earthenware, Jute products, Marble Sculpture, Bronze Sculpture,
Leather Products and other (are u going to produce all these ) miscellaneous
handicrafts.
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SWOT Analysis
Strengths:
Large, diversified and potential market.
There is large product variety and range is available because of diversified
culture.
It has strong, diversified and supportive retail infrastructure.
Diversified product range that service different market.
Cheap labour rates that result to competitive price.
Need low capital investment.
There is flexible production flexibility.
Low barriers of new entry.
Easy creation and development of production centres.
There is no need for macro-investment.
Industry provides potential sources of employment.
Products are high value added, and handicrafts have various applications.
It is the potential source of foreign revenue because of higher export.
Weaknesses:
Lack of infrastructure and communication facilities.
Unawareness about international requirements and market.
Lack of co-ordination between government bodies and private players.
Inadequate information of new technology.
Inadequate information of current market trends.
Less interest of young people in craft industry.
Lack of skilled labour.
Still confined to rural areas and small cities and untapped market.
Lack of promotion of products.
Opportunities:
Rising demand for handicraft products in developed countries such as USA,
Canada, Britain, France, Germany, Italy etc.
Developing fashion industry requires handicrafts products.
Development of sectors like Retail, Real Estate that offers great requirements
of handicrafts products.
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Development of domestic and international tourism sector.
E-Commerce and Internet are emerged as promissory distribution channels to
market and sell the craft products.
Threats:
Competition in domestic market.
Quality products produced by competing countries like China, South Africa.
Better Trade terms offered by competing countries.
Increased and better technological support and R and D facility in competing
countries.
Possible Initiatives should be taken to overcome the
limitations of industry
The primary objective is to create an environment that helps the industry to
compete on the global basis.
To build the environment that will focus on: Wealth Creation, Infrastructure
Development, Training, Technological Development, and Poverty Alleviation
etc. to enhance the sector performance.
Awareness should be increased among craftsmen and customers through
Trade Events, Seminars, Craft Forums and advertisements.
More training centres should be opened to provide proper training to craft
persons.
There should be more trade shows to facilitate craft producers to access the
market.
Transportation infrastructure should be improved to access the untapped
market that would be beneficial to reduce the transportation cost.
Promotion of cultural tradition and heritage.
Promotion of Burma Tourism to attract the foreign customers.
Developing technologies to recycle natural resources to produce new
products and ensure waste minimization, product durability and reliability.
Promoting Partnership and collaboration with private sector.
There should be market platform for craft producers belonging to rural areas
to market their products.
Development of electronic platform by using internet to provide information,
database, and marketing and distribution solution.
Increased Private participation in industry.
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Wooden Handicraft Industrial Overview
Wooden handicrafts are specialized skills passed on from one generation to the next.
The term 'wooden handicrafts' refers to a wide range of wooden items carrying
utilitarian and artistic value that are made by hand, or with the use of simple tools.
Burman wooden handicrafts reflect unmatched workmanship, fine designs, and
subtle elegance. This makes Burma one of the chief exporters of wooden handicrafts
in the world market.
According to the classification of Burman industries, a small scale industry is defined
as an industry that is:
Not registered under the Factory Act.
Investment in fixed assets does not exceed Rs 60 lakhs.
Small scale industries are classified into two categories:
Modern small scale industries like power looms etc.
Traditional industries like handlooms, sericulture, khadi, coir, and handicrafts.
Wooden handicrafts fall in the category of small scale traditional industries.
Role in Burma Economy
The wooden handicrafts industry plays an important role in the Burma economy. This
industry requires low capital investment and other resources. The wooden handicraft
sector provides a high ratio of value addition, and has emerged as one of the major
sources of foreign exchange earnings for Burma.
Burma wooden handicrafts are much sought after the world over, and form an
important export commodity of Burma. Although Burma's handicraft exports show a
consistent increase of fifteen percent every year, its share in the international market
is not more than two percent.
The Burma wooden handicraft sector is the second largest employment provider
(after agriculture). It employs about six million artisans. Women constitute a large
section of the handicrafts industry, including people belonging to the weaker sections
of society.
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MARKET ANALYSIS
Marketing Channel
Most producers do not sell their goods directly to the final users; between them
stands a set of intermediaries performing a variety of functions. These intermediaries
constitute a marketing channel. The marketing channels just not only serve the
markets but they also make markets.
Currently, the existing marketing channel of the wooden handicraft manufacturers is
as follows:
Strategic Marketing Plan:
Wooden handicraft is being an unbranded commodity, so as such the manufacturers
incur no promotional expenditure. Sometimes they just increase the commissions or
the margins of these, if the targets are achieved enormously.
But in order to differentiate the product and capture the existing market and to
develop strong customer base, some strategic marketing plan is necessary to be
designed and implemented.
Various strategies that will be used being a new entrant are:-
Steady supply with timely delivery to fulfil the demand of the domestic area as
well as outside area and good quality would be one of the strategic strength
of the marketing plan.
Manufacturers
Distributors
End Users
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Apart from good quality good designs are an important factor. These designs
will be based on traditional pattern so that it can impress foreign customer.
Besides from these efforts e-commerce is also a promotional tool for
marketing of this product. So I will do online selling also in order to promote
my product.
So orders will also be taken online apart from fax and telephonically.
Technical Analysis
Process involve in manufacturing of wooden handicraft:
A lot of skill and hard work goes into every piece of Burma wooden handicraft. It
mirrors Burma culture, and each handicraft is a masterpiece in its own right. Let's
take a peek at the actual process which goes into creating a piece of wooden
handicraft.
Raw wood available in the form of logs is cut into planks of desired thickness
and length.
The piece of wood is then seasoned to obtain a texture which is favourable
for carving.
Decorative patterns are first drawn on the wood with a pencil.
The design is then carved into the wood with a carving tool.
Craftsmen inlay the wooden handicraft with metal, bone, or wood which gives
off a contrast effect, enhancing the intricacies of the carved design.
Different pieces of carved wood are joined together to make complete,
functional objects.
A protective coating is applied with a suitable wood finish.
Production Time
Wood carving is a time consuming process. The time needed by Burman craftsmen
to create carved wooden handicrafts may range anywhere from a week (for small
items) to a few months (for large items which require elaborate carving techniques.
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Production Tools
Burma craftsmen have a wide range of tools at their disposal, depending on the
stage of production. Some of them are as follows:
Saws: Powered by an electric motor, Band saws are used to cut off scrap
wood effortlessly. Chain saws are used to cut logs for large carvings.
Drills are primarily used to drill holes, and they are available with several
attachments to perform sanding, sawing, mixing paint etc.
Lathes are used to turn wood. They are used to make spherical, cylindrical or
round objects. They are handy while making vases, bowls, and plates.
Primarily used for whittling and chip carving, Carving knives are also used to
make the surface of the wood smooth.
Wood-carving chisels have a sharp flat edge which is used to cut into the
wood. They are available in bent, straight, and spoon shapes.
U-gouges have curved cutting edges which form a 'u' shape, hence the name.
Craftsmen use them to remove large pieces of unwanted wood, to define large
shapes, and to round out the edges.
Machinery Involved
S. No. Particulars No. Rate Amount
1 Chemical treatment plant 1 200000 200000
2 Seasoning plant 1 300000 300000
3 Surface planner 9 30000 270000
4 Grinder(small) 5 2500 12500
5 Grinder(big) 5 7000 35000
6 Driller 2 1500 3000
7 Band show (aara machine) 1 25000 25000
8 Gaze machine 3 30000 90000
9 Ziksha machine 1 3000 3000
10 Sanding machine 1 30000 30000
Total: 968500
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Location and site development
The area for setting up a handicraft manufacturing unit is decided after
surveying all the potential areas. The location of plant will be in RIICO
industrial area in Naypyidaw.
The rate of land is Rs 500sq meters (one side road plot), of area 2,000sq
meters or 21529sq ft.
Structure and Civil works:
S. No. Particulars Size Area Rate Amount
1 Factory shed 30”*60” 1800 200 3,60,000
2 2 stock room 18”*20” 360 200 72000
3 Guard room 8”*10” 80 200 16000
4 Power room 8”*10” 80 200 16000
5 Boundary wall 220000
6 Washroom 6”*8” 48 200 9600
5 labour quarters -
7 Room 12”*10” 120 200 24000*5=120000
8 Washrooms 6”*8” 48 200 9600*5=48000
9. Office room 15”*12” 180 200 36000
10. Fire fitting 39200
Total 9,36,800
Utilities
The important utility used in handicraft manufacturing is power.
Other necessary utilities used in plant are: -
Fans – 2
Tubelights-20
Computer with laser printer
Furniture comprise of – office table, cello chairs.
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Materials
Babool/Aakashiya: This is available in Rajasthan and some part of Gujarat. The
rates of babool are Rs.20 / sq ft
Shisham: Most of wooden handicraft is made of shisham wood. The highest
demand is of shisham made wooden handicraft. This is available in Gujarat,
U.P. & Bihar. This is made available by local wholesale timber merchant. The
rates are Rs. 30/sq ft.
Pine: Rs. 25 /sq ft. These are less demanded.
Teak: Rs. 80 /sq ft
Mango: Rs. 25 /sq ft
Only Shisham will be used to manufacture wooden handicraft because it is
more in demand and suitable for these type of handicrafts.
Labour Requirements
Handicraft is a labour intensive product and it is all depend upon labour only
and all kind of labour requirements are there like in this we need skilled , semi
skilled and unskilled workers. So total requirements are as follows:
Employees Number Salary (Rs.)
Per day Per month Annually
Production
Supervisor 1 - 5000 60000
Accountant 1 - 5000 60000
Skilled Workers 5 150 4500 54000*5 =
2,70,000
Semi skilled
Workers 8 125 3750
45000*8 =
3,60,000
Unskilled
workers 3 100 3,000
36000*3 =
1,08,000
Peon 1 - 2,500 30,000
Guard 1 - 2,500 30,000
Total 20 9,18,000
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Strategy to appoint & retain employees
On time payment is a best retention strategy. So I will give on time
payments to retain my skilled worker.
Medical facility to all worker and employees.
Occasional bonus to skilled workers.
Housing facility: I will provide labour quarter to skilled worker who are
not from local areas.
I will provide employment to their spouses based upon their ability.
FINANCIAL ANALYSIS
Cost of Project
Particulars Cost in Rs
Land & Site development 10,63,600
Building 9,36,800
Plant & Machinery 9,68,500
Other Fixed Assets 2,30,000
Preoperative Expenses 2,71,995
Preliminary Expenses 1,94,282
Provision for Contingency 1,94,282
WC Margin 26,189
Total 38,85,648
Means of Finance
Particulars Cost in Rs.
Promoter's Capital 12,95,203
Long/ medium Term Loan from Banks 25,90,445
Total 38,85,648
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Basic Assumptions underlying Financial Projections
The profitability and other projections may be prepared on the basis of following
assumptions:-
1.) The construction period will last for one year.
2.) The company would work for 360 days per year on a 1 shift basis. The
installed capacity on this basis works out to 12000.
3.) The company will start commercial production on July 1, of year 1. The
expected capacity utilization will be 60% in first year, 65% in the second year,
and 70% for the third year and so on.
4.) Wages and salaries are expected to be Rs 918000.
5.) Factory overheads expenses will be Rs 32880 for the first year.
6.) Administration expenses will be Rs 360000 per annum.
7.) The term loan will be repaid in 14 equal half-yearly instalments, with the first
instalment due at the end starting of first operating year. The interest rate on
the outstanding term loan will be 12%.
8.) The bank finance for working capital will cost 12% interest rate.
9.) The depreciation rates for company law purposes are as follows:
Building : 3.34%
Plant and Machinery : 8%
Miscellaneous Fixed assets : 5%
11. The depreciation rates for the income tax purposes are as follows, under the
written down value method:
Building : 10%
Plant & Machinery & Miscellaneous Fixed assets: 33.33%
12. The income tax rate applicable is 30%. Further 10% of Gross Total income will be
allowed as deduction for newly set up industrial undertaking under sec. 80I for 10
years from the initial year.
13.) The current assets requirements are expected to be as follows:-
Raw materials : 30 days
Stock-in-process : 1 day
Finished goods : 4 day
Book debt : 7 days
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14.) The suppliers of raw material will provide trade credit for 15 days.
15.) The salvage value is assumed to be 5% of Fixed Assets.
16.) The corporate tax rate is 30% p.a.
SALES FORECASTING
SALES FORECAST
Year 2013 2014 2015
Sales 3288000 3562000 3836000
3288000 3562000
3836000
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
1 2 3
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6.7) Overview of Transportation Industry and Business
plan for road Transportation
CHAPTER 1: INTRODUCTION OF THE TRANSPORTATION INDUSTRY
History of Burma Road Transport
The history of road transport started with the transport of goods. In the 18th Century, the
industrial countries were transporting raw materials and workers to factories and from
them finished goods were conveyed to ports and consumers. Steam engines were
invented in the 19th Century, and introduction of steam-powered rollers had led to the
flourishing of smooth gravel roads. The road transport sector developed with high
acceleration after the advent of tarred roads together with the petrol- and diesel-powered
engines in the 20th Century. For military purposes networks of transnational motor roads
came into being continent-wise in Europe, America, Africa and Asia in addition to
domestic roads. Moreover, the role of the transport commissions and administrative
boards, road and bridge rules and laws, financial matters of the central and local
governments, insurance and live saving, mechanical and technical sectors, traffic police
and energy and communication become wider and more important. The following table
shows some countries of the world that enjoyed sustainable development in the road
transport sector during the 50-year period from 1939 to 1988 as they built roads for
political, economic,
in Burma
Inland Water Transport History
The present IWT's forerunner was set up in 1865. At that time, the organization
functioned as a private enterprise under the name of Irrawaddy Flotilla Company Limited
IFCL. The IFCL was nationalized on June 1, 1948 after gaining independence from the
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British Colonial Rule. Under the plan to practice new administrative order, 'Inland Water
Transport Board' was renamed 'Inland Water Transport Corporation' on March 1, 1972.
The present name of 'Inland Water Transport (IWT)' has been used on April 1, 1989.
History of Burma Railways
The history of Burma Railways dates back to the colonial era of Burma. The idea of
introducing a Railway transport system in Burma germinated in the year 1880. The British
rulers planned a railway route between Phitsanoluk in northern Thailand (erstwhile
Kingdom of Siam) and Moulmein in Burma. Unfortunately, the idea ended in fiasco for
dearth of funds for the project.
Then in early 1939, when the Japanese forces gained control over entire South East
Asia, they took initiative for building the railway link. Their sole intention was to use the
railway as supply line for transport
travel agent
History of Air Transport
Burma Legislation for civil aviation was established in the year 1934 and subsequent
regulation in the year 1937 known as Burma Aircraft Act 1934 and Burma Aircraft Rules
1937 respectively. After the independence, these laws were substituted by the Union of
Burma (Adaptation of Laws) Order 1948. Now the Act and Regulation is current and
143
formed as the primary Legislation in Burma as amended up to 20 August 2004. The office
of the Department of Civil Aviation has existed since 1934 and after Independence in
1948, the Department contracted the senior aircraft surveyors of Air Registration Board,
United Kingdom to discharge the obligation and responsibilities of civil aviation activities
in Burma such as Flight operation and Airworthiness up to 1963. Various Senior Aircraft
Surveyors from 1952 up to 1963 took office in Burma. Since then National Inspectors
discharge the regulatory function in the area of Airworthiness and Flight Operation.
Also after independence, Burma engaged International Aero audio Limited (IAL) for the
civil aviation radio communication services in Burma. In the year 1957 Burma terminated
the services of the IAL and from that day onwards Burma nationals taken full
responsibilities of aviation communication services in Burma. On 8th August 1948, Burma
became the member of the International Civil Aviation Organization (ICAO).
As the Union of Burma is a member state of the International Civil Aviation Organization
(ICAO) and has the responsibility to ensure the safe and efficient conduct of civil aviation
within her airspace by implementing the standards and recommended practices
prescribed by the ICAO. The Government of the Union of Burma carries out its
responsibilities for civil aviation by means of national legislation in the form of the Burma
Aircraft Acts and the Burma Aircraft Rules, for both international as well as national
requirements, and discharges its functions through the Department of Civil Aviation
(DCA).
http://www.elegantBurmatours.com/detail-information/transportation.html
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S.W.O.T ANALYSIS FOR TARNSPORTATION
INDUSTRY
STRENGTH:
A geographical location of Burma is assets for marine and air
transportation sub sectors.
Facility convention for maritime cargo to be signed.
Performance and growth of maritime sub sector.
All transportation sub sector are modernized element.
The marine and air facility are at globally high standards existence of
established regulatory agencies.
WEAKNESSES:
Poor strategic road development plan to utilize Burma location in the
air sector.
Highly bureaucratic systems.
Poor quality services to transport sector by some public services
entities.
High cost of doing business in transport sector.
High energy cost and dependence on important petroleum.
Lack of adequate investment.
OPPORTUNITIES:
The potential for establishment of Burma as a major logistics junction
for Land, Air, and Water transport sectors.
Continued interest of private sector for investment in sectors.
Availability of modern technology to establish more efficient and
financially beneficial sectors.
Opportunities to integrate economic, social, and environmental
strategies through regulations.
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THREATS:
Competition from other countries in the region in provision of transports
services.
Rising capital and operating costs.
Changes in international regulation requirements.
Brain drain of skilled persons including from transport sector.
PESTEL ANALYSIS
Political Factors:
- State regulation of the public transport sector presents many limitations
possible negative impact on the public transport industry.
Economic Factors:
- Petrol prices have on average been increasing and they are likely to. grow
until the petrol runs out possible positive impact on the public transport
industry
- Consumer confidence has decreased as a result of the economic downturn
and people are seeking savings in their everyday life possible positive impact
on the public transport industry .
- Increase in the average disposable income of both families and individuals
indicates that more people can afford to buy and use a private car possible
negative impact on the public transport industry.
- Increase in number of people, who own private cars possible negative
impact on the public transport industry.
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Social Factors:
- Growing population and numbers of visitors/tourists/immigrants imply
increasing demand for transport services possible positive impact on the
public transport industry.
- Ageing of population, partially caused by the ‘baby-boomer’ generation
entering the retirement stage, will significantly influence the new trends as
transportation is an important means for elderly people to maintain mobility
and social contact (House of Representatives Standing Committee on Health
and Ageing, 2005) possible positive impact on the public transport industry
- Greater focus on environmental issues and sustainable development puts
environmentally-friendly electric trains in an advantageous position possible
positive impact on the public transport industry .
Technological Factors:
- Rapid development in communication and computer technologies, e.g.
increasing use of videoconferencing, tele-working and the Internet enables
people to work at home.
- The office (Australian Telework Advisory Committee [ATAC], 2005) possible
negative impact on the public transport industry.
147
BUSINESS PLAN
CHAPTER 2: STRUCTURE, FUNCTIONS AND BUSINESS ACTIVITIES
1. Unorganized or organized
2. Type of Organization Structure:
Type of Structure Industry
Centralized
Decentralized
Type of Organization Structure can be Centralized as well as Decentralized, for
Transportation Industry it is decentralized where all the level of employees can
participate in decision making in the organization.
2.2 FUNCTIONS AND BUSINESS ACTIVITIES OF SELECTED INDUSTRY
1. Forms of Business (Sole proprietorship, partnership Etc.):
Forms of Business Burma transportation
Industry
Sole Proprietorship
Partner ship
HUF
Co-operative
Organized Structure Type Industry
Unorganized
Organized
148
CHAPTER 3 : BUSINESS PLAN FOR THE START AGENCEY
OF ROAD TRANSPORTATION
NAME : Raj travel pvt. Agency.
Product adaption or Modification
Core Competency
Our core competency is providing good road transportation facility to the customer in
Burma. Also provide the facility for import and export to the road way in business
developed in Burma.
HUMAN RESOURCE DEPARTMENT
Labour laws
In Burma, labour law is law for labour relating to their working condition.
In Burma labour law is commenced from about 1830 with the growth of plantation
industry.
This department researches, monitors, and enforce safety and health standards in
factories. Its inspectors are authorised to fine employers who breach minimum safety
and health standards, and who commit other transgressions such is not complying
with trade disputes awards, or not remitting social security contributions.
Working Hours
Typical working hours are as follows:
Shops, companies, trading centers, services enterprises, and entertainment hours 8 hrs
a day, 48 hrs a week factories, oil fields, and mines 8 hrs a day, 44 hrs a week
factories engaged in continuous process 48 hrs a week. In underground mines 8 hrs a
day and 40 hrs a week.
149
The workmen’s compensation act stipulates for compensation to be paid by the
employer if a worker not covered by the social security act 1954 suffers injury
resulting in temporary or permanent disability or death in the course of performing his
duties.
Leaves and Holidays
Workers in private enterprises are granted the following leaves and holidays 6 days
casual leaves, 30 days medical leaves, 10 days earned leaves and 21 public holidays in
a year with wages. In addition, women workers in private enterprises covered by the
security Act 1954 are granted maternity leave with paid wages.
Table -1.1
The business partners will invest their own capital
Particular Person Amount
1 Partner-1 10,00,000
2 Partner-2 10,00,000
3 Partner-3 10,00,000
4 Partner-4 10’00’000
150
Table -1.2
Particula
r
Designatio
n
No. Of
Perso
n
Education
Qualificatio
n
Skills
Required
Salary
(per
month)
1. Marketing
manager
2 Master
degree
(MBA,PGDM
)
(Marketing)
Having
experience
Of 1year
-Having Good
Leadership
Skills,
Managing
Team.
-Taking
Decision
Regarding All
The
Marketing
Activity
Including
Stocks Also.
Rs.20, 000
2. drivers 4 12th pass out
having
experience
of driving
they have
license of
diving
also(Pursuin
g/
completed)
working for
part time
basis or for a
temporary
basis
-Good
communicatio
n skill,
-He should
know
Burmese and
English
language
10,000/-
Rs
151
3 Conductors 4 12th pass out
(Pursuing/
completed)
working for
part time
basis or for a
temporary
basis
Good
communicatio
n skill,
-He and
English
language
-Handle
customers.
7,000/- Rs
4 Other
employees
for
transportatio
n
4 10th or 12th
pass having
experience
of driving.
7,000/-Rs
Total - 13 Rs.1,36,00
0
152
MARKETING DEPARTMENT
PLACE
Entry in Burma
For, transportation industries we are start our business in three major city of
Burma, coming next three years. Our Business start form the south region of
the Burma than after we start our business West, North, East and Central
region for next three years in Burma.
1)First year we start business at YANGON city.
2) Second year we start business at MANDALAY city.
3) Second year we start business at MAWLAMYINE city.
Starting business in Yangon.
We are going to start our business in the Yangon city. It is the main area was people
of our targeting market are visiting regularly. Also this is the main posh area of
Yangon city. Besauce the Yangon is the covered the major population.
PRICE
ROUTE PRICE IN KYAT
YANGON -- MANDALAY 25
YANGON -- MAWLAMYINE 27
YANGON -- HPA AN 17
YANGON -- MAGWE 23
YANGON -- MYINGYAN 29
ROUTE
YANGON -- MANDALAY YANGON -- BAGAN
YANGON -- MAWLAMYINE YANGON -- TAUNGGYI
YANGON -- HPA AN YANGON -- BAGO
YANGON -- MAGWE YANGON -- PYINMANA
YANGON -- MYINGYAN YANGON -- PYI
153
YANGON -- BAGAN 24
YANGON -- TAUNGGYI 13
YANGON -- BAGO 35
YANGON -- PYINMANA 29
YANGON -- PYI 27
PROMOTION
We will advertise our road services through exhibition, banners and also
through internet. Our service is very new for decorative purpose in Burma
market so we can cater a large market in Burma.
Segmentation:
Our segmentation is middle, upper, and lower class people. We are targeting
those people who are found of regularly using the road transportation service
and also provide this service for the party, function, marriages, for using the
transport the one place to another place in Burma.
154
FINANCIAL ANALYSIS
Financial plan
Projected profit and loss account quarterly: (Phase I)
Projected Profit and loss Account for a year(Phase II)
Particulars Amount (Rs.)
Capital (partners) 35,00,000
Sales (including closing stock) 30,00,000
(-)Purchases (includes Purchase expenses) 15,00,000
Gross Profit 50,00,000
(-)Operating expenses:
Rent( include rent of Godown ) 5,00,000
Salary and incentives 10,00,000
Advertisement expenses 2,00,000
Other Expenses (Electricity expenses, telephone expenses, taxes, export-import expenses, discount coupon, etc.)
10,00,000
Net Profit 23,00,000
Particulars Amount (Rs.)
Capital ( partners) 50,00,000
Sales 2,00,000
(-)Purchases (includes Purchase expenses) 30,00,000
Gross Profit 22,00,000
(-)Operating expenses:
Salary and incentives 2,50,000
Advertisement expenses 1,00,000
Other Expenses (Electricity expenses, Fuel expenses, service expense of vehicles, taxes, export-import expenses, discount coupon, etc.)
4,00,000
Net Profit / Loss 15,00,000
155
6.8) Overview of tourism industry and business plan
Introduction of Tourism
The concept of Tourism has been derived from the Latin word “TOMOS” &
Hebrew word “TORAH”.
Tourism in reality is not an industry but an activity. It is defined as an activity
that takes place when people move to some other place for leisure.
Although many of us have been tourists at some point in our lives, defining
what tourism actually is, can be difficult.
Tourism is the activity of persons travelling to and staying in places outside
their usual environment for not more than one consecutive year for leisure,
business or other purpose.
Tourism is a dynamic and competitive industry that requires the ability to
constantly adapt to customers changing needs and desires, as the customer’s
satisfaction, safety and enjoyment are particularly focus of tourism
businesses.
Sectors
The tourism industry is divided into five different sectors:
Accommodation Food and Beverage Service Recreation and Entertainment Transportation Travel Services
http://www.go2hr.ca/bc-tourism-industry/what-tourism
156
Introduction of Tourism in Burma
Burma sits at the crossroads of Asia’s great civilizations of India and China,
and looks out onto the vast Indian Ocean next to Thailand. One of South-east
Asia’s largest and most diverse countries, Burma stretches from the sparkling
islands of the Andaman Sea in the south right up into the Eastern Himalayan
Mountain Range.
Burma offers all the traditional delights of Asia in one fascinating country.
Virgin jungles, snow-capped mountains and pristine beaches, combined with
a rich and glorious heritage spanning more than two thousand years.
Spectacular monuments and ancient cities a attest to a vibrant that is still
home to 135 different ethnic groups.
The country’s tourism infrastructure boasts five star properties, intimate
boutique hotels and family guest houses in all the major centers, as well as
stunning mountain and beach resorts. Burma also boasts one of the lowest
tourist crime records in the world, so visitors can rest assured their holiday will
be care free from start to finish.
Wherever you go in Burma, whether it be cruising down the mighty
Ayeyarwaddy River in style, drifting over the ancient city of Bagan by hot air
balloon, or searching for that elusive tiger on the back of an elephant, from
Mountain trekking and rafting in the far North to World Cass diving in the
Mergul Archipelago. But above all, Burma offers the warmest welcome in
Asia.
http://tourismBurma.org/left-mainmenu-39/executive-committee-member
157
Why Tourism is found beneficial in Burma?
Burma has seen a steady growth in tourist arrivals and tourism receipts year
by year as a result of the joint efforts of the public-private sectors of the
tourism industry.
As per the information provided by the Union Ministry of Tourism of Burma,
that daily arrival of tourist is 600 to 700. However, in January and February
2012, they received 1800 tourist daily. They received (175,930) tourist during
the first four months of 2012. There is a 36.5% growth comparing with
(128,910) of the same period in last year.
So, above data indicates positive growth of Burma Tourism Sector in the
years to come.
Burma government providing favourable investment opportunities in tourism
sectors for Foreign Investors also support new developments and businesses
to boost tourism industry.
www.investinBurma.com/investing-in-Burmas-tourism-industry
158
PEST Analysis of Tourism Industry in Burma
Political
In Burma, the political condition is favorable for the Business
organization, because of the Same Governing Party rules for a long
time.
In Burma, the taxation is not high.
In Burma, government supports the investors to invest in the tourism
industry in order to experience favorable investment opportunities.
Burma government improving the capacity of tourism personnel both
from the public and private sectors by giving necessary intensive
trainings to enhance their skills, knowledge and service quality.
Burma government is upgrading the existing destinations and
identifying the new destinations and attractions.
Burma government
Burma government establishes Tourism Planning Committees at the
state/regional level in priority with high tourism arrivals.
Economical
In Burma, the money market is cheaper.
In Burma, the demand of the tourism sector has increased since the
last couples of years.
Increase of tourist helps in better efficiency of economy.
Business cycle of the tourism industry will grow or increase year by
year because of the increasing tourist year by year.
Social
Different languages, cultures, traditions, cuisines.
Burma offers all the traditional delights of Asia in one fascinating
country
Respect & Entertainment of Guest Embedded in Culture itself.
159
Technological
Increasing role of web & internet
Facilitates online booking
Efficiency of economy
Providing customers with easy payment facility via online and use of
credit cards and Wi-Fi facility on the go, easy recharge of mobile
phones etc.
SWOT Analysis of Tourism Industry in Burma
Strengths
Pleasant Weather Ideal Geographical Location Visitors can rest assured as it has the lowest tourist crime records in
the world Favourable investment opportunities by the Burma Government Diversity of tourism products & destinations.
Weaknesses
Lack of proper Marketing & Advertisement Lack of adequate Infrastructural support Funds constraining the development of the region Lack of tourism related data and analysis process Poor Infrastructure.
Opportunities
Eco-tourism is gaining popularity Adventure sports & tracking Substantial growth in visitors and potential visitors interested in Burma Emerging market segments seeking new destinations and experience. Use of e-commerce in direct marketing.
Threats
Environmental Factors also impose a threat. Exploration of new tourist sports and hubs Stiff Competition among various Tourism Industry Natural Disasters Increasingly competitive global tourism
160
Providing Services in Tourism Industry in Burma
1. Active Members Tour Operator & Travel Agents
2. Allied Members Hotels & Resort Tour Guides Restaurants Transport
3. Associate Members River Cruises Gems & Souvenir Shops Air
4. Affiliate Members
http://Burmatourism.org/member/member.htm
AMAZING SIGHTSEEING PVT LTD
Introduction
“Tourism is the only business that actively brings cultures together. It is
through experiencing other cultures that we come to understand one another.”
Our Customers are given the chance to share their unique experiences with
others. We genuinely want the day of our customers to be exceptional and
filled up with lasting memories.
AMAZING Sightseeing Pvt Ltd Stands for Quality:
Become captivated by the extensive knowledge of our expert guide.
Travel in comfort and luxury on board our fleet of brand new air-
conditioned, environmentally-friendly coaches (fully equipped with
reclining seats, DVDs, and most also have washrooms on boards).
We offer courtesy pick up points from hotels.
Come and speak directly to us.
VISION & MISSION
Vision: “To get a place among the list of top tour operators in Burma”.
Mission: “To provide best tour packages covering all the attraction
places at affordable prices”.
161
LEGAL PROCEDURE
Being a foreign Company, we need to obtain the PERMIT to Trade before
Registration to start a business in Burma.
Then, we need to apply for Registration and obtain the Certificate of
Commencement to start a private limited company in Burma.
Documents required to be attached with the application of Registration are
as follows:
2 sets of MOA and AOA duly stamped & printed in the local language
used in Burma and English.
Declaration of registration along with legal & official edition of the
documents.
Translation certificate of a competent translator.
Minimum Share Capital requirement will be 300,000 Kyat (being a Service
Sector)
162
ATTRACTIONS IN BURMA
Burma is still less famous but has many attractions and towns waiting to be
discovered by you. Take a look towards the Products (Tours) and the tour for
yourself. Just select the tour and enjoy the holiday. Leave the rest to the
professional guide along with you to make your visit a better and a memorable
one.
All the tours include the following:
Air Conditioned Coaches.
English Speaking Guide.
Admission Fees
Lunch
All the tours exclude the following:
Personal expenses such as drinks, tips.
Other service not mentioned on the tour.
163
PRODUCTS
TOUR 1 - EXPLORE BAGAN
Bagan is a spectacular plain stretching away
from the Ayeyarwaddy River, dotted with
thousands of 800-year old temple ruins.
Although human habitation at Bagan dates
back almost to the beginning of the Christian
era, Bagan only entered its golden period with
the conquest of Thaton in 1057 AD.
Shwezigon Paya
Gubyaukhyi Temple at Weltkyi-Inn
Ananda Pahto
Gubyaukgyi Temple at Myinkaba
Manuha Temple
Lacquerware Workshop
TOUR 2 – KYAUK GU U MIN WITH
SUNSET BOAT RIDE
Travel by boat to the KYAUK GU U MIN, a cave
teple on the banks of the Irrawady, with notable
sandstone carvings and a colossal Buddha
images. Continue downriver back towards Bagan, watching life along the
riverbanks.
TOUR 3 – MOUNT POPA
A curiously cylindrical hill rising sharply
from the surrounding plain, Mount Popa is
considered to be the home of Burma’s
most important spirits. Visitors ascend up a
winding covered staircase encircling the mountain, observed by the curious
monkeys that populate the area. At the top is a monastery and temple
complex, with shrines to the 37 spirits and a spectacular view over the region
164
TOUR 4 – TREKKING EXPERIENCE TO MOUNT POPA
Explore the sacred mountain shrine of
MOUNT POPA, a curiously cylindrical hill
rising sharply from the surrounding plain and
the home of the spirits, before venturing into
the countryside for soft trekking.
http://www.visit-mekong.com/myanmar/tours/excursions.htm
Tour Name Price per Pax
Tour 1 - Explore Bagan 975
Tour 2 - Kyauk Gu U Min with sunset boat ride 690
Tour 3 - Mount Popa 560
Tour 4 - Trekking Experience to Mount Popa 930
Price List
Booking Terms & Conditions
Price: Prices are based on known costs w.e.f. April 2012.
Reservations: are required. Please book as soon as possible.
Food and drink: In the interest of safety we ask that no hot food or drinks
are carried on board the coach. You may be asked to dispose of these
items before being permitted to board the coach.
Amendments: Amendments by you only can be made to coach tours,
please call us 24 hours prior to departure time and date.
Personal Insurance: is not included.
Refund and compensation policy: In the event that a venue is not visited
due to unforeseen circumstances, an amount, equal to the value of the
admission will be refunded in full.
Payment: Full Payment is required at the time of booking.
Credit Cards: Cardholders must be present at the time of presenting the
ticket.
Entrance Fees: Tour Prices are inclusive of Entrance Fees
165
General Business Plan
Firstly, we need to get the company registered
Then, look for an office of almost around 2000 sq. ft. along with a good
parking space.
Get the office furnished according to the requirement.
Get the electric fittings done properly such that it does not create problems
in future.
Contact Placement Agency (like Naukri.com) which can help us recruits
the required staff.
Buy computers, printers and the required extensions necessary for
handling the business on a smooth path.
Also get a local telephone connection.
Contact the Internet Service Providers for the best plans they can provide
us.
Always have internet connection from 2 Internet Service Providers, which
can work as an alternate for the other.
Once the required staff is recruited, they should be given necessary
training according to their job profile.
166
Location of our Office
Our Office is situated in Bagan as many attraction places are located nearby.
Competitors
Next Myanmar Tours Co. Ltd., Yangon
Silver Drums Travels & Tours, Yangon
All Asia Exclusive Travel Co. Ltd., Bagan
Grand Lotus Travels & Tours, Yangon
Seven Star Tours, Bagan
Many others also.
http://tripcook.com/cc--Myanmar--Tour_Operators--mm8
Marketing Plans
Distributing Brochures and Displaying Banners
Advertisement in Radio, Television and Newspapers
Organizing Events at different places (i.e. Institute, for Corporate
Members)
Target Population
Target population are Tourists and Local people of the country.
Promotion Strategy
Hotel Concierges are the best people to promote our Company. They
promote our products to all the guests staying at that particular hotel.
Promotion on Social Media Network like Facebook, Twitter, etc.
Giving more commission to our agents.
Bringing attractive offers in the tours.
Discounting the rates during the festive season.
167
Supply Chain Management
Attraction Places
(Supplier)
Amazing Sightseeing
Pvt. Ltd
Online Booking
through the Website
Clients (Tourist)
Phone Bookings Hotel Concierge
168
Personnel Management
1 Managing Director from India & 1 Managing Director from Burma
The Managing Director will manage all the activities from India to Burma.
Handle all the legal activities related to license for starting business, hiring
people for business, guide the people for marketing, managing funds, and
taking major decision for the expansion of the business.
1 Marketing Manager from Burma
The Marketing Manager will guide the customer care representative on
how to attend the calls and also provide the product knowledge.
4 Tourist Guide from Burma
The tourist guides from Burma are more aware of the history of Burma
which helps them explain the tourists better. The tourist guide should know
multiple languages which will help guide all the tourists from different parts
of the world. (English being the must)
Other Employees
3 Sales Representatives, 3 Reservations Staff, 1 Account Head, 2 Account
Assistant, 1 Web Designers, 1 IT Expert, 1 Counsellor, 1 House-Keeping
and 6 Drivers.
Salary Structure
No. of
Employees
Designation Hiring
Country
Salary (Rs)
1 Managing Director India 50,000
1 Managing Director Burma 50,000
1 Marketing Manager Burma 40,000
4 Tourist Guide Burma 20,000 Per
Employee
3 Sales
Representative
Burma 12,000 Per
Employee
3 Reservation Staff Burma 15,000 Per
Employee
1 Accounts Head India 20,000
2 Accounts Assistant Burma 15,000 Per
Employee
1 IT Expert Burma 22,000
1 Web Designer India 18,000
1 Counsellor Burma 8,000
169
1 House-keeping Burma 7,000
6 Drivers Burma 10,000 Per
Employee
Note:
Petrol Allowances: Should be given extra per month Rs. 1500 for
Sales Representatives.
Incentives: Should be given extra as per the targets achieved by
Reservation Staff.
Training Programme:
First, explain the staff about the company i.e. what are the company’s
objectives and how can we work together to fulfil them.
We have many products (tours) in our company. Explaining the staff about the
products and updating them with the products in detail along with the changes
in the tours and their rates as per the situation. Our website even needs to be
updated on the daily basis as we also have clients (tourist) which collect
details from our website and book their trips. The details of the tours and rates
should remain the same as that on our website and with the customer care
representatives (Reservation Department).
All the staff should be asked to learn the back office system of the company
thoroughly as it’s the body of the company in which all the data is stored,
linked and updated.
All the staff should be given their personal log in IDs which helps the company
in case of any mistake or error.
All the calls received by the Reservations Department should be recorded,
which helps in case of any mistake in the bookings made by the staff.
170
Financial Plans
Investment for business
Particulars Amount (Rs.)
Office Rent (Furnished) (2000 Sq. Ft.) 70,000 p.m.
Computers and Printers 4,50,000
Electrical Fittings 3,00,000
Telephone (Ext) 1,20,000
4 Bus Coaches on Rent 75,000 p.m. per coach
3 Air Conditioner 27,000 per A.C.
1 Refrigerator 20,000
2 Internet Service Provider – Deposit 30,000 per provider
2 Placement Agency 4,000 p.m.
Designation
No. of
Employees
Salary per
Employee
Total
Salary
Managing Director 2 50,000 100,000
Marketing Manager 1 35,000 35,000
Tourist Guide 4 20,000 80,000
Sales Representative 3 12,000 36,000
Reservation Staff 3 15,000 45,000
Accounts Head 1 20,000 20,000
Account Assistant 2 15,000 30,000
IT Expert 1 22,000 22,000
Web Designer 1 18,000 18,000
Counsellor 1 8,000 8,000
Drivers 6 10,000 60,000
House Keeping 1 7,000 7,000
461,000
Salary Sheet
Total Salary per Month
171
Sales
Pax Rates
Total
Sales Pax Rates
Total
Sales Pax Rates
Total
Sales
Explore Bagan 403 975 392925 480 975 468000 558 975 544050
Kyauk Gu U Min with sunset boat ride 434 690 299460 570 690 393300 620 690 427800
Mount Popa 465 560 260400 510 560 285600 558 560 312480
Trekking Experience to Mount Popa 248 930 230640 240 930 223200 310 930 288300
1183425 1370100 1572630
Commission to Agents
Sales 530100 616500 716100
Commission 53010 61650 71610
Tours
October November December
Sales
Pax Rates
Total
Sales Pax Rates
Total
Sales Pax Rates
Total
Sales
Explore Bagan 713 975 695175 756 975 737100 868 975 846300
Kyauk Gu U Min with sunset boat ride 682 690 470580 644 690 444360 806 690 556140
Mount Popa 558 560 312480 588 560 329280 744 560 416640
Trekking Experience to Mount Popa 310 930 288300 336 930 312480 372 930 345960
1766535 1823220 2165040
Commission to Agents
Sales 758880 756840 902100
Commission 75888 75684 90210
March
Tours
January February
172
Particulars October November December January Februay March
Income:
Profit & Loss B/f 0 (610857) (914973) (848300) (450026) 6812
Sales:
Tour 1 479570 571200 737800 922250 1066240 1032920
Tour 2 312480 410400 491040 535680 504000 647280
Tour 3 376650 413100 527310 502200 544320 652860
Tour 4 285200 345000 463450 641700 483000 570400
Commission from Suppliers 59768 75540 95449 117738 98700 121768
Total (A) 1513668 1204383 1400076 1871268 2246234 3032040
Expenses:
Commission to Concierge (40%) 174468 208764 266352 312220 311707 348415
Commission to Agents (30%) 130851 156573 199764 234165 233780 261311
Diesel Expenses (Rs. 42/km) 859320 831600 859320 859320 776160 859320
Bus Coach Rent (Rs.50000*4) 200000 200000 200000 200000 200000 200000
Office Rent (with Furniture) 70000 70000 70000 70000 70000 70000
Salary Expenses 461000 461000 461000 461000 461000 461000
Incentives 5816 6959 8878 10407 10390 11614
Petrol Allowance 4500 4500 4500 4500 4500 4500
Software Installation 5000 5000 5000 5000 5000 5000
Internet Expenses 20000 20000 20000 20000 20000 20000
Charges to Technical Service
Provider 25000 25000 25000 25000 25000 25000
International Call Charges 27000 24500 25000 19000 17800 15000
Registration Expenses 30000 0 0 0 0 0
Placement Agency 4000 4000 4000 4000 4000 4000
Promotional Expenses 30000 28000 26100 23800 27300 26400
Advertisement Expenses 20000 16500 16500 16500 16500 16500
Electricity Expenses 18500 18500 18500 18500 18500 18500
Staff Welfare Expenses 6000 6000 6000 6000 6000 6000
Telephone Expenses 2070 1690 1920 1570 1700 1610
Admin. Expenses 3500 3500 3500 3500 3500 3500
Interest on Loan 27500 27271 27042 26813 26583 26354
Depreciation 0 0 0 0 0 62800
Total (B) 2124525 2119357 2248376 2321294 2239421 2446825
Net Profit/ (Loss) [(A) - (B)] (610857) (914973) (848300) (450026) 6812 585216
Profit & Loss A/c for the year ending 31st March, 2013
Break-even point is achieved during the fifth month of the commencement of
the business.
173
Liabilities Amt. (Rs.) Assets Amt. (Rs.)
Share Capital 1000000 Computers 346875
Printers 69375
Loan from Financial
Institution (13.75%) 2280000 Telephone Extensions 111000
Air Conditioner 76950
Refrigerator 19000
Electric Fittings 285000
Software Installation 330000
(360000-30000)
Profit & Loss Balance 585216 Cash & Bank Balance 2567016
3865216 3865216
Balance Sheet as on 31.03.2012
Deposit to Internet Service
Provider (30000*2) 60000
Loan Repayment Schedule
Opening Bal. Principle Interest Installment
Closing Bal.
October 2400000 20000 27500 47500 2380000
November 2380000 20000 27271 47271 2360000
December 2360000 20000 27042 47042 2340000
January 2340000 20000 26813 46813 2320000
February 2320000 20000 26583 46583 2300000
March 2300000 20000 26354 46354 2280000
161563
Depreciation Chart
Assets Opening Bal. Dep. Rate Depreciation Closing Bal.
Computers 375000 15% 28125 346875
Printers 75000 15% 5625 69375
Telephone Extensions 120000 15% 9000 111000
Air Conditioner 81000 10% 4050 76950
Refrigerator 20000 10% 1000 19000
Electric Fittings 300000 10% 15000 285000
971000 62800 908200
174
Particulars October November December January Februay March
Receipts:
Opening Balance 0 1383143 1064027 1115700 1498974 1940812
Share Capital 1000000 0 0 0 0 0
Total Sales 1453900 1739700 2219600 2601830 2597560 2903460
Loan from Financial Institution 2400000 0 0 0 0 0
Commission from Suppliers 59768 75540 95449 117738 98700 121768
Total Receipts (A) 4913668 3198383 3379076 3835268 4195234 4966040
Expenses:
Computers 375000 0 0 0 0 0
Printers 75000 0 0 0 0 0
Telephone Extensions 120000 0 0 0 0 0
Air Conditioner 81000 0 0 0 0 0
Refrigerator 20000 0 0 0 0 0
Electric Fittings 300000 0 0 0 0 0
Deposit to Internet Service Provider 60000 0 0 0 0 0
Software Installation 360000 0 0 0 0 0
Commission to Concierge 174468 208764 266352 312220 311707 348415
Commission to Agents 130851 156573 199764 234165 233780 261311
Diesel Expenses 859320 831600 859320 859320 776160 859320
Bus Coach Rent 200000 200000 200000 200000 200000 200000
Office Rent (with Furniture) 70000 70000 70000 70000 70000 70000
Salary Expenses 461000 461000 461000 461000 461000 461000
Incentives 5816 6959 8878 10407 10390 11614
Petrol Allowance 4500 4500 4500 4500 4500 4500
Internet Expenses 20000 20000 20000 20000 20000 20000
Charges to Technical Service Provider 25000 25000 25000 25000 25000 25000
International Call Charges 27000 24500 25000 19000 17800 15000
Registration Expenses 30000 0 0 0 0 0
Placement Agency 4000 4000 4000 4000 4000 4000
Promotional Expenses 30000 28000 26100 23800 27300 26400
Advertisement Expenses 20000 16500 16500 16500 16500 16500
Electricity Expenses 18500 18500 18500 18500 18500 18500
Staff Welfare Expenses 6000 6000 6000 6000 6000 6000
Telephone Expenses 2070 1690 1920 1570 1700 1610
Admin. Expenses 3500 3500 3500 3500 3500 3500
Interest on Loan 27500 27271 27042 26813 26583 26354
Repayment of Loan 20000 20000 20000 20000 20000 20000
Total (B) 3530525 2134357 2263376 2336294 2254421 2399025
Closing Cash Balance (A) - (B) 1383143 1064027 1115700 1498974 1940812 2567016
Cash & Bank A/c
175
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