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Bangladesh: Potato price fall in 8 Northern districtsfrustrates
farmers, traders
- The Daily Star, October 20, 2008
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we see this as
an opportunity because,
Available Raw Materials
Existing Process
Existing market
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R-tech ltd.
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agenda
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4000 tons Market 40.4 crore
China, France and South Korea 45% to 80% of the weight of
tablets
industry
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industry
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15% import duty + 40% of other
charges
Avg cost: Tk. 102/kg R-Tech price: TK. 95 per kg Annual savings:
TK. 700,000 (per 100
tons)
trends
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competitors
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r-tech ltd.
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VisionTo develop the backward linkage
sector based on potato starch
Mission Provide high quality pharmaceuticalgrade potato starch
at a competitive price tothe pharmaceutical companies of
Bangladesh
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r-tech ltd.
# Type : Public Limited Company# Total Investment : BDT
170,600,000
# Source of funds : SharesLong term loans# Number of shares :
100,000
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location
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what we offer
Pharma grade starch 20% amylase content
Average granule size 25 m Scope of value-addition Easily
customizable Higher temperature tolerance
Byproduct (Animal Feed)
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marketing
details
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Insights4.3
3.5 4
1.5
0
1
2
3
4
5
Quality Timeliness Consistent
Supply
Others
Facts in choosing a supplier (5point scale)
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SWOT
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strengths
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weakness
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opportunity
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threat
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segment : pharmaceutical
target : 240 pharma cos
4000 tons/yearlow pricequality
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positioning
China
FranceR-Tech
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branding
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marketing mix
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value creation
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why potato?
Source: http://www.wikepedia.com
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why pharma?
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value price
cost based pricing approach 37% mark up BDT 95 per kg Higher
value in terms of cost and
quality
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value delivery
Own distribution Others distribution channel:
R-tech distribution channel:
Manufacturer Agent Local AgentPharmaceutical
Company
ManufacturerPharmaceutical
Company
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value promotion
Personal selling Sales executive Corporate presentation+
exhibition Corporate dinner Relationship management
Direct marketing email, website, mail, brochure, greeting
cards etc.
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Operations
details
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Supply
factors solutions
fluctuations contractual farming farmer's financing
ability advance payment
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inventory
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Productionprocess
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Productionprocess
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Productionprocess
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Productionprocess
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factory layout
Production Floor Plan
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Financial
Details
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assumptions
Market Growth (KG) 13%Market Share Growth 15%Tax Holiday 7
years
Salary Growth 11%
Wastage 10%Inflation 10%
Interest Rate 14.6%
Change in Exchange Rate 4.76%
Change In Price 4%
By Product 80%
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Capital structure
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profit after taxes
-
10.00
20.00
30.00
40.00
50.00
60.00
70.00
1 2 3 4 5
NetIncomeinMillionBDT
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Indicators
worst case normal case
NPV 22,717,338 31,781,319
IRR 18.19% 25%
*WAAC : 16.48%
*Balance sheets & details have been added with the
report
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Payback
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risk management
& future plans
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risks
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future plans
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milestones
Year 1 Year 2 Year 3 Year 4 Year 5
Gestationperiod: 4monthsYear end sales:920 tons
Total Sales:1050 tons Total Sales:1200 tons Total Sales:1400
tons Achievemarket shareof 25%Year end sales:1600 tons
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takeaways
Booming pharma industry needs backward linkage A market of
BDT40.4 crore High quality @ lower price (competitive advantage)
r-tech has the opportunity to be the pioneer
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Thank you!
