Business plan of chocolate industry
Chocolate is a processed delicacy made from the beans of the cocoa tree. The cocoa tree, native to the tropical Amazonian forests, is an evergreen tree of the cola family. Chocolate is a mixture of roasted cocoa, cocoa butter, and very fine sugar. Unsweetened (or bitter) chocolate is available in squares and is the natural rich chocolate ground from the cocoa beans. It has a full-bodied flavor and is ideal for baking and cooking. Sweetened chocolate with various other ingredients are also increasingly available.
Pure chocolate bars contain more than 60% cocoa. The only ingredients in a good chocolate bar are: Cocoa paste, sugar, cocoa butter and milk. Depending on the ingredients can be distinguished by the following types of chocolates, with addition, without addition, with filler, for diabetics and white. Chocolate without additions is made from cocoa powder, sugar and cocoa butter. Chocolate with additions is made from cocoa powder, sugar and cocoa butter and different flavor components, such as milk, nuts, fruits, coffee and alcohol etc.
White chocolate is formed from a mixture of sugar, cocoa butter, and milk solids, although its texture is similar to milk and dark chocolate, it does not contain any cocoa solids, thus not officially qualifying as chocolate. Lester’s is a manufacturer of authentic Chocolate. Our products will be positioned at the high end of the market in terms of quality. We are a new entrant to the Chocolate manufacturing industry. But, we expect to grow into a business that has a broader appeal. Lester’s has several objectives that it will achieve within the next three years. The first is a formidable increase in sales by 2010.
Lester’s would also like gross margins to be above 55%. Lester’s also hopes to increase the number of outlets in the coming years. Lastly, we aim to become known as the premier Chocolate producer in Malaysia with an ever-expanding geographic distribution area. Lester’s plans to introduce two main lines of products. The flagship product is our premium chocolate that would be known for its uniqueness and quality ingredients. It will be introduced targeting the high end market with no compromise on quality and extra efforts in bringing in superior taste experience.
While there are many competitors at the mid price point, both local and international, there are few direct competitors at Lester’s low price and high price point. This is quite advantageous for Lester’s, providing us with additional breathing room to establish ourselves at the premier brand of Chocolate producer in Malaysia. Lester’s will reach profitability and forecast a modest net profit in three years. The commensurate profit margin will be achieved from sales. The financials within the plan further reinforce the exciting nature of this business. Current situation
Basic corporate info Lester’s SDN BHD is going to be a young and growing Malaysian company once it is established. We are entirely focused on production of high quality chocolate for Malaysia. The management team has a long experience of working in chocolate industry. One day they decided to join hands and form a good chocolate manufacturing company. That is when we came up with the idea of launching Lester’s. Our main office is located in Kuala Lumpur, Malaysia. We are planning to operate on 100,000 square feet factory premises at Bukit Angkat, Cheras, and Selangor.
We are going to produce a large assortment of chocolate products. We plan to offer about 130 different types and flavors of chocolates, such as plain chocolate, bar chocolate, mini chocolate, gift packs etc. Special attention will be given to our premium chocolate produced from high-end quality ingredients and in special conditions. Services that we’ll be providing will include making, supply and maintenance of chocolate products. Our shops will offer retail and wholesale. Delivery could be requested for wholesale purchases. Also, we’ll be selling our products through retail chains such as, Carrefour, Jasco etc.
We are going to distribute our products in Malaysia, Singapore, Dubai and few Middle East countries as well. Our distribution outlets/offices will be located in major cities of Malaysia like Kuala Lumpur, Putra Jaya, Malacca and Johor Bauru. We hope to satisfy every customer’s demand and keep their faith in us. Core Competencies The main goal of our company is to produce top quality products at reasonable price. Bearing it in mind we can figure out our competitive benefits as follows. Malaysia is the third wealthiest country in Southeast Asia with a population of around 25 million people.
About 61% of its population makes up the middle to upper income group of consumers. The Malaysian economy has a firm foundation in a mixed economy that comprises strong manufacturing, service and agricultural sectors. Malaysia’s annual growth rate was 7. 1 % in 2004 and the expected growth rate for 2005 is 6 %. In 2004 the GDI per capita was USD 4,500. Market Analysis Market Size Agriculture is still an important sector in the Malaysian economy. Even though its share of the GDP is falling as the country develops, agriculture still accounts for approximately 9% of the GDP.
The food processing companies range from small family-owned businesses to large companies, which are listed on the Kuala Lumpur Stock Exchange or operate as subsidiaries of foreign or multinational companies. Most of the companies serve much localized markets, while a few medium to large companies dominate the market on a nationwide basis. The small local companies account for 64% of the total number of companies, where only 5% are multinational companies. The average size of the food processing companies is close to 40 employees.
The industry is very dynamic and the major industries include the production of refined sugar, wheat flour and baked products, non-alcoholic beverages, edible oil, dairy products, confectionery and snacks, fish and seafood products, beer, canned pineapple, and processed meat. The dominant sector is oils and fats, reflecting the importance of palm oil processing, where Malaysia is the world leader with 50% of output and 60% of export. In 2003 the Malaysian exports of vegetable oil products were close to USD 4. 48 billion. Market Structure The food production in Malaysia is relatively small compared to other countries in the region.
Today the country is dependent on import of both processed food and several agricultural raw materials. Labor shortages and run-down machinery has been factors preventing substantial development in the industry. But the government wants the industry to develop and is willing to support such development with financial resources. Some of the major food processing companies in Malaysia include Nestli?? , Fraser & Neave, Yeo Hiap Seng, Mamee-Double Decker, Lam Soon Berhad, and A. Clouet & Co. Another foreign group expanding its businesses is Groupe Danone, locally known as Britannia Brands (Malaysia) Sdn. Bhd.