Husk Paper Products Business Plan

HuskPaper Products

Executive Summary

Our society relies on paper products everyday

for various tasks. Most of these products rely

on heavy deforestation to be manufactured.

The world’s forests are slowly disappearing

because of heavy deforestation. Husk Paper

Products is a company that is dedicated to

reducing deforestation and improving the

health of the environment. We work to reach

that goal by manufacturing household paper

products from an alternative and unique

material: corn husks and stalks.

Since we manufacture paper products, our

main competitors are big paper companies

that are already well-established in the paper

market. We will compete with these companies

by focusing our marketing and distributing to

eco-friendly consumers, specifically LOHAS

consumers. LOHAS is an acronym for Lifestyle of

Health and Sustainability, which describes an

eco-friendly market. Husk Paper Products will

attract consumers by emphasizing the eco-

friendliness and low prices of our products. We

plan to do small scale advertising in order to

establish our consumer base. We will launch a

national advertising campaign once we’ve a

secured a spot in the market. We estimate to

have a revenue of about $31 million by year

five with our products being sold at about

1000 stores nationwide. Husk Paper Products

requests $5 million for initial funding in order to

cover start up costs.

Husk Paper Products is nothing without its

outstanding executive officers. They are

dedicated not only to the company but to the

eco-friendly cause the company is supporting.

Jazmine Wong is the driving force behind the

company as its CEO. Bernard Deleon does

his best to advertise Husk’s products as the

Marketing Director. Alejandro Ramos crunches

numbers daily as the Chief Financial Officer to

make the company a profit.

Company Profile

To reduce world-wide deforestion by providing high quality and inexpensive paper

products that benefit both the environment and our customers.

We searched far and wide to find a suitable

substitute. We finally found it in corn waste, which

can be made into paper using the same processes

as tree-based paper and is more readily available

than trees. We use only corn waste to create

household paper products of the same quality as

leading manufacturers and suppliers of household

paper products. We believe we will make an

impact on the paper industry and become leaders

in the green movement.

Husk Paper Products was founded by three

individuals who were concerned about the

impact society has on the environment,

especially on the world’s forests. Billions of trees

are cut down annually fill our need for paper

products, ranging from printer paper to paper

towels and beyond. With that in mind, we

began with one goal: to reduce society’s heavy

dependence on trees for paper produ cts.

MISSION STATEMENT

COMPANY HISTORY

Jazmine Wong has always been one to take the role of a

leader. In 2008, she was elected vice president of MDHS Class of 2011.

During her time as VP, she helped promote and fundraise money for

the organization, as well as improve school spirit. Joining the Digital

Safari Academy during her Junior year in high school, she presented

a video and song for the Speaking of I.D.entity project, showcasing

her creative ability as well as her charisma and confidence. As a

developing philanthropist, Jazmine has also worked as an intern for

a non-profit organization called Sustainable Contra Costa, which

focused on promoting green lifestyles and programs in the community.

With intense drive and focus Jazmine has helped a fledgling company

spread its wings and take flight.

Alejandro Ramos is a man defined by his accomplishments

as a leader. He served as president for the class of 2011 during the

2009-2010 school year. He worked hard to raise funds and organize

class events that his peers would enjoy. He’s now stepped down from

his presidential role, but continues to participate in his high school’s

student government. He previously worked for the Bay Point Garden as

a garden leader, helping raise different plants and teach after school

classes on gardening. He left his job at the garden to focus solely on his

role as Chief Financial Officer for Husk Paper Products and now works

diligently to further the success of Husk Paper Products.

Bernard Deleon joined the Digital Safari Academy in mid-2008.

His major project was the Legacy of Imperialism, in which he and

three other group members devised a plan to provide safe and clean

water to Zimbabwe and to slow down the Cholera epidemic. Bernard

also made a music video paying homage to John Legend’s hit, “Stay

With You”, and he wrote a spoken word piece and performed on the

stage for the Speaking of I.D.entity project. He also participated in the

We Are Mt. Diablo documentary project about school diversity. He is

now Husk Paper Products’ Marketing Director, aiming to promote and

attract customers to make greener choices.

EXECUTIVES

COMING SOON

COMING SOON

COMING SOON

Product Data Sheet

You will no longer have to rely on paper products

made from trees. Husk Paper Products is proud to

present household paper products made from

a unique material: corn husks and stalks. M ade

using the same processes as paper products

produced from trees, paper from corn waste is

equally functional to current tree-based paper,

without the detrimental effects to forests. Husk

Paper Products provides an environmentally

friendly alternative to help reduce heavy

deforestation.

FEATURES• It dries

• It wipes

• It cleans

• It’s green

CONSUMER BENEFITS• Same quality as leading brands

• Reduces reliance on trees

ENVIRONMENTAL BENEFITS• Reduces deforestation

• Source material is readily available

Market Analysis

OPPORTUNITY ASSESSMENT

Husk Paper Products is proud to introduce paper

made purely from the husks and stalks of corn.

Made with the same processes as leading

brands in the paper industry, our products offer

an eco-friendly alternative to household paper

products currently found on the market. Husk

Paper Products’ main goal is to provide high

quality household paper products while reducing

heavy deforestation for the production of paper.

The worlds forests are being depleted for the

production of paper products. According to

Paper Chase by Sam Martin, each year over 4

billion or 35% of the world’s trees are cut down

and used in the production of paper products.

The NRDC has stated that the production of

paper products accounts for 42% of the trees cut

down annually, worldwide. Although new trees

are planted to replace these, the harvest of trees

has outpaced the growth of new trees.

This means that sooner or later we won’t have

enough trees to supply the demand for paper. This

presents an opportunity for our paper products

because they are made from an agricultural waste

that is more renewable and readily available than

the depleting resource of trees.

The market for eco-friendly products has been on

the rise. According to the Mintel Research Group,

35% of US consumers are willing to pay more for

eco-friendly products. Not only that but in 2008,

the “Green” industry grew 6%, out performing the

US economy as a whole. This presents a viable

market opportunity for Husk Paper Products as we

would be appealing to the rising demand for green

products from an increasing number of eco-friendly

consumers.

Our society uses paper products every day.

The paper industry alone generates over $200

billion dollars a year. According to a 2000 report

by PaperCom Alliance, the paper industry has

increased 30% in six years and is expected to

continue to grow. This growth in the paper industry

implies that there is an increasing demand for paper

products. This increasing demand for paper products

creates an opportunity for our product to succeed.

CUSTOMER PROFILE

Husk Paper Products hopes to one day provide eco-

friendly household paper products for all, regardless

of socioeconomic standing. However, we understand

that we simply cannot jump into such a wide market

all at once. For this reason we are focusing our efforts

on the smaller but booming LOHAS market. The

LOHAS market is valued at $209 billion and has about

41 million consumers, or about a 19% of the United

States’ adult population, as shown in the chart below.

This chart also defines the percentage of consumers

for groups such as Naturalites, who are interested

mostly in only natural and organic consumer goods

and Drifters, who are interested in eco-friendly goods,

but do not make many natural/organic purchases

due to cost. Therefore the LOHAS market is a very

good entry point for our product because it has a

large number of consumers that will buy products

based almost completely on their eco-friendliness.

LOHAS consumers do not fit into any one

demographic group; they are instead defined by

their socially conscious decisions in their purchases

of goods. That being said, there are still certain

demographic trends among LOHAS consumers.

About 60% of all LOHAS consumers are female, as

shown by a survey we conducted in 2010 in Todos

Santos Plaza and by a report from market-insider.

com. Young people between the ages of 18-34 are

most likely to buy LOHAS products since they have

grown up exposed to environmental awareness.

Conventionals29%

Drifters21% Naturalites

14%

LOHAS19%

Unconcerned17%

BREAKDOWN OF CONSUMER TYPES

Most LOHAS consumers are college educated

individuals that fall into the middle class income

range, making approximately $36K a year. We

plan to distribute our household paper products

to natural food chain markets and national

supermarkets, such as Whole Food’s and

Safeway. As a result, our geographic areas will

be centered around these stores. Natural food

markets tend to be located in wealthy suburban

areas and largely populated cities while national

supermarkets can be found in many suburban

areas throughout the nation.

LOHAS consumers are socially conscious

individuals that define themselves by their

values on social and environmentVal issues. They

exercise those values when choosing goods and

services, believing that buying green products

is “cool”, giving them a feeling of satisfaction.

LOHAS consumers are known to exhibit

loyalty to brands whose ideals on environmental

and social issues line up with their own. They tend to

be very insensitive to price; 80% of LOHAS consumers

are willing to pay up to 20% more for LOHAS

products.

COMPETITIVE ANALYSIS

The paper industry has many competitors, but

only the big corporations survive. Husk Paper

products main competitors are companies that

are well established and have many more years

of experience. These companies include Seventh

Generation, Georgia-Pacific, and Kimberly Clark.

Seventh Generation Inc. is a company that

produces paper products from 100% recycled

paper. Their paper products include towels, tissue,

toilet paper, and napkins. Not only is Seventh

Generation Inc. selling the same products we

are, but also providing alternatives to using paper

products made from virgin wood pulp. This is in

direct competition with Husk Paper Products,

wood fibers and some recycled fibers to produce

their products, but is not an eco-friendly company.

Husk Paper Products provides products that offer the

same quality as Kimberly-Clark’s while being eco-

friendly.

These companies are well established and it will

be a challenge competing against them. Our

company will differentiate itself and succeed

due to the fact that we use agripulp to create

paper products, instead of virgin wood pulp or

recycled wood fibers. Our products will appeal to

LOHAS consumers and eventually to the rest of the

consumer market by providing the same quality and

reliability as brands such as Kleenex and Bounty.

HUSK PAPER PRODUCTS

SEVENTH GENERATION

GEORGIA-PACIFIC KIMBERLY-CLARK

STRONG § § § §ABSORBANT § § § §COMFORTABLE § § § §ECO-FRIENDLY § §CHEAP §MATERIAL VIRGIN AGRIPULP USED PAPER VIRGIN WOOD PULP VIRGIN WOOD PULP

COMPETITIVE MATRIX

This comparative matrix highlights the different qualities of paper towels and tissues as well as stating the main source material for each company.

both as a paper company and an eco-friendly

company. We will be competitive because we are

using virgin agripulp, which is of higher quality than

reused wood fibers.

Georgia Pacific, one of the largest paper

companies in the world, is another competitor to

Husk Paper products. They own Angel Soft toilet

paper, Brawny paper towels, and other various

brands that present competition for our products.

Georgia Pacific’s products are known to be of high

quality and inexpensive, the only drawback being

that they are not eco-friendly. Husk Paper Products

hopes to compete because of the fact that we

provide the same high quality paper, without the

environmental costs.

Another competitor to Husk Paper is Kimberly-Clark,

which produces and sells general household items.

Among these items are several tissue and paper

towel brands, such as Kleenex, Cottonelle, and

Scott. These are top selling, high quality products

that present competition for our products. Kimberly-

Clark uses

Marketing Plan

PRODUCT

Husk Paper Products will be manufacturing

disposable towels and tissues made of absorbent

paper. Made from corn husks and stalks,

our products will feature the basic functions

of household paper products such as high

absorbency, softness, and effective wiping and

drying ability. Our products will be bleached

with non-chlorine bleach and environmentally

safe products, giving them that bright white

color that customers expect. We will be using

biodegradable plastic material to package

our products in order to further emphasize our

dedication to the environment.

PRICE

Husk Paper Products has determined that our

target price will be about 25% less than our

leading competitor, Seventh Generation. All

od our products are sold by the case and are

priced accordingly. Our paper towels will be

sold at $54.00, toilet paper at $64.80, and tissues

at $60.00. We will be offering our customers the

option of buying our products in large quantities

of buying our products in large quantities through

our website and select stores. By buying online,

customers have the option of receiving special

discounts, limited to online purchases only.

PLACEMENT

Our target customers are general consumers

who may have an interest in buying eco-friendly

products. We will be distributing our products

to one natural food store to attract consumers

who are more into being eco-friendly and one

national supermarket chain to appeal to the

general consumer. The natural food store is

Whole Foods, which is known to serve LOHAS

consumers, while the national supermarket chain

Is Safeway, which serves the general public but

has eco-friendly tendencies.

PROMOTION

We understand that our product is difficult to

differentiate and promote when there are

companies that have already established

themselves with high quality products, such as

Charmin and Brawny. With that in mind, we plan

to attract our target customers by reminding

them of the benefits they are receiving by

purchasing our product. It’s crucial that our

customers understand that our products are

made from an already pre-existing waste,

reducing the amount of waste that goes out into

the environment, while also creating something

that is much needed in our society. We will be

doing in-store and direct mail advertising to build

up our consumer base in our first years and shift

towards a larger advertising campaign once

we’ve established ourselves.

Life Cycle Analysis

AQUISITION

Husk Paper Products will primarily be using corn

waste to manufacture its paper products. Corn

waste is usually disposed of by being burned in

the fields, which causes CO2 and smog emissions

that are known to be health and traffic hazards.

Our use of the corn waste will reduce the CO2

and smog emissions from this method of disposal.

We will acquire our stock from farms in the

midwest after annual harvests. We will also be

using water to manufacture our paper products,

which we will acquire through pipelines leading

to our factory.

MANUFACTURING

The corn waste has to be pulped before it can be

used to make paper products. It will be pulped

using the Kraft process, which uses chemicals to

convert the corn waste into pulp. After the corn

waste has been pulped, it will be sent to a paper

machine to be shaped, pressed, and dried into

large rolls of paper. Several additives will be used to

give our paper products their wet strength. While the

Kraft process is not as eco-friendly as mechanical

pulping, which uses machines to pulp the plant, it

results in higher quality paper which is needed to

make high-quality tissue paper.

- famers harvest corn

- we bale corn husks/stalks

- reduce CO2 emmissions

from corn burning

- corn husks/stalks go through

a pulping process producing

various paper products

1

2

3

TRANSPORTATION

We will be transporting our paper products from our

factories in the midwest to various stores throughout

the nation by trucks and trains. These vehicles add

to air pollution by burning fossil fuels as their energy

source. We will do our part to help reduce air

pollution by relying on trucks that run on biodiesel.

USING

Our products will be used by individuals and

businesses for hygienic and cleaning purposes.

Consumers will benefit socially when they use our

product by knowing that that they have done

their part to help the environment. The use of our

products will promote awareness of the heavy

deforestation that occurs as we will put fun facts

on our packaging. The products will not create

any health problems for any individual unless used

irresponsibly (I.e attempting to ingest, starting a fire

with it, etc.)

- product is shipped to

store locations

- fossil fuels are used in

vehicles that transport

products

- product is used by

consumers

- product is thrown away

or composted

- product ends up in a landfill

- product goes to a

sewage treatment plant

- product is composted

4

5

DISPOSING

Most of our products will end up in landfills

and sewage systems once used. They will

be biodegradable, however, so they will not

contribute greatly to the amount of garbage in

the world.

4

Financials Projections

SALES AND REVENUE

Husk Paper Products plans to distribute paper

products to about 20 stores in the first year in

order to establish ourselves. Since we will be

selling to these buisnesses, we will be selling

our products in cases. The prices are as follows:

Toilet Paper - $64.80, Paper Towels - $54.00,

and Tissue - $60.00. These stores will be located

throughout California, as the large majority of

LOHAS consumers live in there. We will expand

to 1,000 stores throughout the nation by year

five and estimate to have a revenue of $31M.

We took into consideration store location,

number of stores in the U.S, average number of

consumers per store, and average consumption

of household paper products in order to arrive to

these conclusions.

OPERATIONS BUDGET

For the purposes of this project, it is assumed that the

operations budget for our company comprises 10%

of our revenue and is composed of the following

individual items:

• Electricity

• Salaries

• Rent for floorspace

• Upkeep of machinery

• Insurance

• Advertising

0

100000

200000

300000

400000

Q1 Q2 Q3 Q4

0

150000

300000

450000

600000

Q1 Q2 Q3 Q4

Total Quarterly Revenue Quarterly Revenue for Products

Toilet Paper Paper Towels Tissues

COST OF GOODS

For the purposes of this project, it is assumed that

the cost of goods for our company’s product

comprises 85% of our revenue and is composed of

the following individual items:

• Raw material (corn husks and stalks)

• Chemical additives for paper

products

• Manufacturing Costs

• Distribution

• Waste Disposal

ADVERTISING AND MARKETING

Husk Paper Products has, on average, 900k to spend

on advertising and marketing. We plan to do small

scale advertising to attract consumers, as large

scale national advertising would cause losses. We

will advertise in store, through the weekly ads of the

stores selling our products, and by mailing samples

to household. We Will eventually begin advertising

through magazines and other publications by year

four of business.

SOURCES AND FUNDS NEEDED

Husk Paper Products will be requesting at least $5

million in funding to start up. Funds will initially be

used to rent space for our factory, the acquisition

of raw materials for Husk Paper Products, buying

the machinery required, and hiring, training, and

paying workers. Our next step would be to hire

distribution companies to distribute our goods and

to buy shelf space in our target stores. It is expected

that $5 million will cover these costs, but our

executive officers are prepared to invest their own

money in the event that more funding is needed.

Financials Projections

Earnings Projection - 4 QuarterEarnings Projection - 4 QuarterEarnings Projection - 4 QuarterEarnings Projection - 4 QuarterEarnings Projection - 4 Quarter

2011 - Q1 2012 - Q2 2013 - Q3 2014 - Q4

Operations (fixed costs)

$752,700 $758,100 $766,200 $777,000

Cost of Goods (variable costs)

$22,950 $68,850 $137,700 $229,500

Paper Towels (36, 2 packs = 1 case)

Wholesale Price $54.00 $54.00 $54.00 $54.00


Production Units (per case) 500 1,500 3,000 5,000


Revenue (price x units)

$27,000 $81,000 $162,000 $270,000

Toilet Paper (36, 4 packs = 1 case)

Wholesale Price $64.80 $64.80 $64.80 $64.80


Production Units (per case) 500 1,500 3,000 5,000Toilet Paper (36, 4

packs = 1 case)


$32,400 $97,200 $194,400 $324,000

Tissues (100 boxes = 1 case)

Wholesale Price $60.00 $60.00 $60.00 $60.00


Production Units (per case) 10 20 50 70



$600 $1,200 $3,000 $4,200

Total Quarterly Revenue $60,000 $179,400 $359,400 $598,200

Profit Margin (revenue - costs)

$715,650 $647,550 $544,500 $408,300

Total Earnings $715,650 $1,363,200 $1,907,700 $2,316,000

Earnings Projection - Five YearEarnings Projection - Five YearEarnings Projection - Five YearEarnings Projection - Five YearEarnings Projection - Five YearEarnings Projection - Five Year

2011 2012 2013 2014 2015

Operations (fixed costs)

$3,054,000 $3,270,000 $3,540,000 $3,810,000 $4,350,000

Cost of Goods (variable costs)

$459,000 $2,295,000 $4,590,000 $6,885,000 $11,475,000


Wholesale Price $54.00 $54.00 $54.00 $54.00 $54.00


Production Units 10,000 50,000 100,000 150,000 250,000



$540,000 $2,700,000 $5,400,000 $8,100,000 $13,500,000


Wholesale Price $64.80 $64.80 $64.80 $64.80 $64.80


Production Units 10,000 50,000 100,000 150,000 250,000



$648,000 $3,240,000 $6,480,000 $9,720,000 $16,200,000


Wholesale Price $60.00 $60.00 $60.00 $60.00 $60.00


Production Units 150 600 2,000 6,000 20,000



$9,000 $36,000 $120,000 $360,000 $1,200,000

Total Annual Revenue $1,197,000 $5,976,000 $12,000,000 $18,180,000 $30,900,000

Profit Margin (revenue - costs)

$2,316,000 $411,000 $3,870,000 $7,485,000 $15,075,000

Total Earnings $2,316,000 $1,905,000 $1,965,000 $9,450,000 $24,525,000

0

10000000

20000000

30000000

40000000

2011 2012 2013 2014 2015

0

5000000

10000000

15000000

20000000

2011 2012 2013 2014 2015

Total Annual Revenue Annual Revenue for Products

Toilet Paper Paper Towels Tissues