Chapter I

Management Study
A. Management of the Project
Kakao toh, Grafted Cacao Seedling Nursery is a project in which its
primary concern is the production of grafted cacao seedlings that will be sold as
planting materials. In order for this to happen, the following undergraduate
students, studied the different aspects of the project namely Beren, Reden B. for
the Management Study, Cominguez, Rachel Marie L. for the Market Study,
Grande, Jenny A. for the Technical Study, and Bellen, Jenane May G. for the
Financial Study.
A.1.Type of Business Organization
The proposed project will be in a form of a partnership.
Partnership is an arrangement in which parties agreed to cooperate to advance
their mutual interest. In this case, the proponents will be the partners who will
contribute equally to a common good.
Figure 1 shows the organizational chart that will be observe in the
business.The proposed project will be manage by the General Partner as the
manager and the rest will become the Limited Partner who will contributes capital
only. It will also need a Production officer, five nursery workers and two drivers
who will be responsible for the day-to-day operation of the project.

Figure 1
Organizational Chart
General
Partner

Limited Partner

Production Officer

Nursery Workers/
Grafters

Drivers

Figure 1 shows the organizational chart that will be observe in the

business.The proposed project will be manage by the General Partner as the
manager and the rest will become the Limited Partner who will contributes capital
only. It will also need a Production officer, five nursery workers and two drivers
who will be responsible for the day-to-day operation of the project.

Table 1 shows the duties of each personnel with respect to their positions
and qualifications.
Table1
Positions and Duties
Unit
Management
Personnel

Time to be
Devoted to the
Project

Manager

Permanent

Production Regular
Officer

Duties

Qualifications

Compensation

Assumes direct
responsibilities
and accountability
of business
operation and
administration.
Continuously
develops ways
and means of
carrying out tasks
more efficiently
and effectively in
their project.
Communicates
with the
Production Officer
for the update of
the business
operation.
Maintains
cooperation and
productivity of the
business.
Plans, organizes,
directs, controls,
motivates, trains
and effectively
communicate with
workers.
Conducts regular
monitoring and
projects status,
checkup of tools
and equipment
and keep the
nursery workers

Has a
college
degree in
Business &
Agriculture.
Has
technical
expertise in
managing
cacao
nursery
Hardworking,
honest,
sincere and
committed to
work

Php.
12,000.00
per month

Has a
college
degree in
Agriculture.
With full
knowledge in
grafting
cacao
seedlings.
Has a
technical
know-how in
the three

Php.
10,000.00
per month

informed of all
Events and
developments of
the business.

methods of
grafting
cacao.
Hardworking,
honest,
sincere and
committed to
work.

Table 2 shows the skilled labors needed in the proposed project with their
qualifications.
Table 2
Labor Requirement
Labor Skills
Required
Nursery Workers/
Grafters

Drivers

Number of
Labor
Required
5

Qualifications

Compensation

High school or college Php.

graduate
6,000.00 per
Has the full knowledge &
month
expertise in managing
cacao nursery & keeping
records
Has the technical knowhow in the three methods
Hardworking,
honest,
sincere and committed to
work
At least high school Php.
graduate
6,000.00 per
Has Professional drivers
month
License
Honest,
sincere,
hardworking
and
committed to work
Has the technical knowhow in the three method
4

of grafting.

A.2. Recruitment Program

The proposed project will hire its Production Officer from Bicol University
agriculture graduate. As for the nursery workers and drivers, they are coming
from the residence of Sitio Nagsipit, Tabaco City. A job hiring will be conducted in
the Barangay Hall but only five nursery workers and two drivers will be hired.
A.3. Training Program
The nursery workers and drivers will be under the Production Officer. He
will be in charge in training the newly hired workers. The drivers are also part of
the operation in the nursery, not only in the delivery of the seedlings but also in
the daily activity inside the nursery because they are included in the training on
the methods of grafting.
A.4. Fringe Benefits
In every business has its own way to motivate their employees. The
project will grant benefits to the employees like clothing allowance for nursery
workers and drivers, 13th month pay and overtime pay in which it is 25% of the
salary per hour rate.
A.5. Facilities

The business compound is compose of the Office, employees quarter,

nursery shed and garage. There is a separate comfort room for the manager and
the employees. Furthermore. The Office building is approved by the BFP for
safety.

B. Project Timetable and Schedule

Figure 1 shows the activities involved and the time allocated to each
activity. It shows that it will take six months for the project to materialize. One
month is for project conceptualization. It will take two months to gather data and
three months for making the feasibility study. After preparing the feasibility study,
it will take another two months to acquire funds for the project. Preparing the
plant site and securing licenses will take one month. It will also task one month to
procure the tools needed. Finally, at the end of the year, implementation and
monitoring of the project will concern.

Chapter II
Market Study
A. Demand
A.1. Historical Demand
Table 3 shows the area planted with cacao in the Bicol Region
from the year 2000-2004. It shows that there is a continuous expansion of
potential land area used for planting cacao trees in the region.
Table 3
Area Planted With Cacao
(Region V, 2000-2004)
Year
2000
2001
2002
2003
2004

Area Planted
(hectare)
344
344
344
347
355

Source: BAS
Table 4 presents the historical average of the annual demand for cacao
seedlings in Region V for the past five years. The data used is Bureau of
Agricultural Statistics (BAS) for the area planted in Bicol Region and the plant
capacity per hectare which is 920 trees as computed for the demand for each
year. It shows that for the past three years the demand for seedlings is constant
and it has increased in the next two years. It is assumed that there is a
corresponding increase in the demand for seedlings in relation to the continuous

expansion of potential land area for cacao planting in the region. It proves that
the demand for cacao seedlings will continue to increase in the next succeeding
years.
Table 4
Historical Demand for Cacao Seedlings
(Region V, 2000-2004)
Year
2000
2001
2002
2003
2004
1
Appendix A

Total Demand
(Seedlings)1
316 480
316 480
316 480
319 240
326 600

A.2. Projected Demand

Table 5 shows the projected demand for cacao seedlings in the Region V
for the year 2005-2019. The project is based on the computation of the projected
expansion of land area suitable for cacao farming in the region. There is an
increasing demand for cacao seedlings, which is favorable to the proposed
project.
The Arithmetic Straight Line Method was used to determine the
projected demand. The factor considered in using the method is that the
proposed project will operate at full capacity. This means that the project is
selling the product at the maximum production but only 25.30% of the demand
are supplied.
9

Table 5
Projected Demand for Cacao Seedlings
(Region V, 2005-2019)1
Year
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
1
Appendix A

Total Demand
(Seedlings)1
329 130
331 660
334 190
336 720
339 250
341 780
344 310
346 840
349 370
351 900
354 430
356 960
359 490
362 020
364 550

A.3. Current and Potential Buyers

A good quality grafted cacao seedlings grown in nurseries are the
best planting materials for high-yielding and productive cacao trees. Grafted
seedlings offer true-to-type plant, which improve the production of high quality
and internationally cacao beans.
The project mainly focuses on the propagation and selling of four
month old grafted cacao seedlings with at least eight mature leaves as planting
material. The users of the product are the cacao farmers or coconut grower in the
10

Bicol area like Mr. Esflana of Sto. Domingo who owns a one hectare cacao farm.
(Appendix B)
B. Supply
There is no data available for the historical supply of cacao seedling
because there has been no existing cacao nursery in the Bicol region that is
concern with selling cacao seedlings as planting materials. Cacao growers and
coconut farmers in the region are accustomed to planting cacao seeds directly in
the field, hence, they are facing problems in looking for seedlings that can be
readily planted to become productive trees.
It shows that the great demand for cacao seedlings is not meet. This
indicate that the proposed project is feasible since it will be the first cacao
nursery in the region that will sell seedlings to meet the great demand.
C. Competitive position
The proposed project will be the first cacao nursery in the Bicol
Region.The current price of the seedlings of the nurseries in the country
particularly in Davao and Laguna is Php. 30.00 each.
The introductory price of the seedlings will be Php. 35.00 each. It is 17 %
higher than the prevailing price offered the competitors outside the region due to
the difference between the sold seedlings they offer. Furthermore, the projected
price will increase 5% annually together with the continuous rise in the prices of
farm inputs as based on cost-plus pricing.

11

C.1. Quality of the Product

The project competitors produces cacao seedlings grown mainly for
its beans. A tree planted by seeds will bear fruits after four to five years. It will
yield 50-70 pods per year. Each pod contains 40-60 beans. While the proposed
project will engage in the production of grafted cacao seedlings. It will sell a fivemonth old, 20-40cm tall grafted seedlings as planting materials. The seedlings
will have at least 8 mature leaves with more than 20 cm. scion shoot growth, with
no twisted stems, bent collars or bent roots planted in a 30cm x 10 cm black
plastic bag. Grafted cacao seedlings offer true-to-type seedlings which achieve
earlier higher quality yields. A grafted cacao tree will bear fruit within one and half
to two years. It will yield to 100-150 pods per year which has 70-90 beans. Trees
planted by seeds and by grafting have the same average life span of 35 years,
underlying the principles of equal management and planting conditions.

Plate 1
Grafted Seedlings

12

C.2. Marketing Program

Kakao Toh, Grafted Cacao Seedling Nursery is a firm mainly
operates to produce high quality cacao seedlings. In order to retain the quality,
the nurseries are built to stores and keep harmful pest and direct sunlight.
Furthermore, the firm has a delivery unit in which there are two drivers who are
alternately do the task. They are in charge to deliver the seedlings safely to the
customers and collect payment.
The firm sells its products by accepting orders through walk in customers,
phone calls and online ordering. It accepts payment during delivery and
installment basis with down payment which is at least 35% of the Total Order
Cost. Furthermore, payments for the succeeding months can be deposited to
BPI.
C.3. Promotion
A signage KAKAO TOH GRAFTED CACAO NURSERY will be made
and display above the entrance gate of the nursery to promote the entity. This is
shown in the Plate 3.

13

Plate 3
The Signage for the Project
The nursery will be advertised through the internet, in the regional
newspapers, and local radio stations. The project will also conduct seminars for
cacao farmers in the region related to the methods and practices on the proper
way of transplanting cacao seedlings and how to improve the income from the
cacao trees to encourage sale. This will be done quarterly.
C.4. Market Problems
A farming type of business entails more risks, either natural or manmade.
These problems can decrease the production of seedlings and affect the sales of
the business. Therefore, these problem are inevitable, so the project must be
ready to see to it that these problems are prevented. The following are the
problems that the business might encounter and the corresponding preventive
measures the business could undertake to eliminate these risks:
1. Typhoon. Secure and strong nursery sheds with strong frames and
hard foundation must be built. The simple style nursery design will be
followed but steel poles and cement posts as frameworks will be used.
Black cloth that is elastic and adjustable will be used as shades to be built
on both sides of the nursery and supported with aluminum tie wires for
roofing.
2. Flood. Roofing with steel poles as partitions supported with aluminum
wire should be used as based for seedlings.
3. Pests and Diseases. The attack of pests and the spread of diseases
could be avoided by enclosing the nursery with a thin black cloth on the
14

roof and on both sides. The right application of recommended and trusted
high grade pesticides and insecticides could be used in case these risks
are inevitable. A quarantine area will be built to isolate or remove the
infected seedlings. Proper handling of tools will be observed, including the
purchase of alcohol as disinfectant.
4. Increasing prices of fertilizer and pesticides. Organic fertilizer and
the use of compost pit and bio-fertilization will avoid unnecessary
expenses in dealing with the increasing prices of fertilizer and pesticides.
To eliminate the risks that might be faced in the operation, preventive
measures must be followed. With this, the project will determine if it can afford
this project would entail.
The proposed project has the capacity to cope with the cost of these risks
by observing preventive measures, having a flexible budget system and a higher
amount of contingency allowance, which constitutes 5% of the total assets,
working capital, and pre-operating expenses of the entity.
D. Contribution to Philippine Economy
Kakao Toh, Grafted Cacao Seedlings Nursery is a firm that produces high
quality cacao seedling which can be sold as a planting material for all cacao
farmers in the Bicol Region. It helps farmers in the region earn profit from cacao
trees along with the pooling of employment of five nursery workers and two
drivers. It also contributes 30% of net income as business tax to the government.
Lastly, it caters to the need of the country for minimization of cacao beans
importation that would give a potential tax return to the government.
15

Chapter III
Technical Study
A. Products
Cacao "Theobroma cacao" is a small (4-8m or 15-26 ft tall) evergreen
tree in the family of Sterculiaceae adapted to the climate of the deep tropical
region. It is a tree crop that is highly suitable under different production system
like monocrop, intercrop, and agro forestry with an effective fruit bearing life of 30
years. Planting of cacao is considered as an economic powerhouse that has
increasingly become recognized for its potentially positive environment role
(cacaoweb.net).
Raising cacao in the nurseries is one way of raising healthy planting
materials. It will make cacao become pest free and grow robustly. It enhances
resource use efficiently and minimizes harmful effects of inappropriate water or
nutrient since cacao seeds are sensitive to nutrient imbalance and toxicity.
The most common way of propagating cacao is by seeds. Planting by
seeds will help preserve genetic diversity among crops. A tree planted by seeds
will bear fruits after four to five years. It will yield 50-70 pods per year. Each pod
contains 40-60 beans. The other way is by vegetative propagation. It is a
technique used to produce a cloned plant usually done by side grafting, top
grafting or patch budding. Grafted cacao seedlings offer true-to-type seedlings
which achieve earlier higher quality yields. A grafted cacao tree will bear fruit
16

within one and half to two years. It will yield to 100-150 pods per year which has
70-90 beans. Trees planted by seeds and by grafting have the same average life
span of 35 years, underlying the principles of equal management and planting
conditions.
Any tree, as long as it is healthy, with pods of the right age and with good
quality seed fan be used as a source of rootstock. The cacao plant raised from
seed to become the base or anchor from which the scion is grafted (Plate 1). The
scion is the bud wood stick or bud patch collected from an accredited budwood
garden used to graft onto the rootstock (Plate 2). It will offer a true-to-type
seedling, which achieves earlier higher quality yields. Thus, a genetic copy or
clone of an improved cacao tree is produce.

Plate 1
Seedling Rootstock

Plate 2
Budwood

At present Cacao's main use is as a source material for Cocoa powder

and Chocolate. A by-product of this multi-billion dollar industry is the cocoa butter,
expressed from the roasted seeds. Cacao butter is heavily used in the cosmetic

17

and pharmaceutical industries. Cacao butter is used by the pharmaceutical

industry, though some herb shops and pharmacies still supply Cacao seed
shells, sold as a diuretic tea. Yet, Cacao has some interesting properties that
might warrant further research. Cacao pigment, which is extracted from the
husks, has shown anti-HIV properties.
B. Manufacturing Process
The proposed project will involve the processes of a nursery
establishment and management, like the preparation of potting mixes, seed
sowing, and grafting and seedling distribution. The farming process chart is
presented in figure 2.
B.1. Nursery Construction
In constructing the nursery, the following guides are followed:
1. Mark out and clear the area.
2. Mark out the four corners, the entrance, fence line and water
supply inlet.
3. Remove trees, rubbish and other obstacles.
4. Plough the land and level it off. Leveled off land facilities good
management.
5. Provide 2 m access pathway through center.
6. Install drain and drain outlets.
7. Install perimeter fence.
8. Check, repair. Or install water supply. An electroconductivity
meter can be used.
18

9. Mark out positions and install nursery poles with wire frame as
framework.
10. Place a black shade cloth side roof for sun, wind and rain
protection.
11. Mark out nursery beds and access pathways by ropes.
12. Provide area for planning and record keeping.
B.2. Preparing the Potting Mixes
Plotting Bags
It is recommended to plant seeds directly in the bags. Whose size will
depend on the duration the seedlings will stay in the nursery. Table 6 shows the
criteria that can be used to determine the bag size.
Plastic bags with perforations are preferred because they are durable,
easy to maintain, and provide drainage that will make soil moist enough for good
seedling growth. The bag must be able to withstand the hazards of transportation
like wear and tear in case the seedlings remain for more than four months in the
nursery.
Table 6
Bag Dimensions
Months
in the
Nursery
>3
4-5
<6
>6

Length

Width

Gauge

(inches)

(inches)

(unit)

10
12
15
16

7
8
9
10

150
200
250
250

Color
Black
Black
Black
Black

Weight of Bag
& Soil (kg)
2.7
4.7
6.8
9.0
19

Figure 3

20

Plotting Soil
21

A soil-based plotting mixes can be used to ensure seed viability. It is

composed of 10% dried manure blended with 10% organic matter and 80% is the
sieved soil. Organic matter can be rice husk, cacao pod husk, coffee pulp,
banana peel trash or sugar cane bagaas. These can be collected at the site.
Sieved soil is a top soil which can supply all the major and minor nutrient
elements for a period of 45-60 days with good texture and structure. It is a soil
free of lumps, stone, and other small pieces. A cement mixer can be usd to
thoroughly mix the mixtures.
Sterilization. This is eliminating potentially harmful disease pathogens
and pests that exist in the soil
Solarization. The spreading mix onto clear plastic sheets and covered
with clears plastic and leaving it under the sun for a day or two.
B.3. Preparation of Seeds
Seed Selection
For rootstock, any tree can be used as source of seeds. Pods will
be bought from cacao growers in the region. The number of pods required can
be calculated by dividing the number of seeds required by 40 average bean
yield/pod.
The steps in seed preparation are:
1. Selecting pods that are ripe and healthy. Pods 3-4 weeks from
harvesting can be used. This can result to seedlings with maximum vigor and

22

foliage production. Pods at this stage will be full grown with an approximate
length and width of sixth inches and three inches respectively. The color of the
pod will be green or brown depending on the type as they have not started
changing color.
2. Open the pods using a wooden mallet.
3. Remove seed from pods and separate seeds from the placenta and the
pulp.
4. Discard any flat seed, damaged seed or very small seed.
5. Rub the seed in sawdust or coconut fiber to remove the pulp outside of
the seeds.
6. Wash the seeds in water and drain.
7. Place the seeds on to a tray in a shaded and cool area, protected from
wind and rain.

Plate 3
23

Healthy Pods
B.4. Seed Pre-Germination
Pre-germinating the seeds before plating into bags will render better
results.
1. Places the seeds in a single layer on clean jute bags out of the wind,
sun or rain. Cover them with another jute bag.
2. Record the date when the seeds were placed in the tray and the date
when germination started.
3. Every day for four days, inspect the seeds to look for the ones that have
germinated. When a white button emerges at one end of the seeds, they can be
planted to the bags straight away. Discard seeds with long shoots or pig tails.
They can result to stem and collar deformation and root problems.

Plate 4
Seeds with Pig Tails
B.5. Seed Sowing

24

Place the pre-germinated seeds, with the root tip pointing down, into the
potting mix in the bag. Make a small hole about 1 cm deep for this leave about
half of the seed poking out of the potting mix. Fine sprays are used to water the
potting mix.
Seedling Losses. Fifteen percent of the seeds planted are expected to be
of inferior quality, so they are removed.
Culling. This is removing the rejected plants 14 days after planting,
repeated regularly. Post grafting culling includes seedlings which have seedling
blight, are defoliated, with weak stems, underdeveloped leaves, few leaves and
those that appear to be runts.
B.6. Budwood Collection
Budwood must be collected from accredited budwood garden. Make sure
that the budwood is of the right age and thickness for the rootstock. They should
be properly selected from healthy trees. They must be used within two days from
collection, stored and transported in moist and cool condition.
B.7. Grafting
There are three methods of clone production, namely: side grafting, top
grafting and patch building. Side grafting, is the most reliable method. It involves
fusing the budwood stick (usually one bud with one-third leaf intact) in a narrow
cut low on the stem. The budwood must be green or brown in color. The method
of side grafting will be observed in the nursery.

25

Plate 5
Side Grafted Method

The following are the steps for side grafting:

1. Preparing the plant. Plants (rootstock) are prepared by tipping and
trimming the leaf. The typical height is approximately 20 cm.
2. Budwood stick or the scion, is inserted into the rootstock. The scion is
bound with grafting tape.
26

3. Build grafting tents. Clear, clean plastic bags measuring five sq. m. are
used for 400 plants and 15 sq m for 1200 plants. Make sure that the tent is well
sealed to keep the air humidity in the tent. Plants are watered thoroughly before
grafting and placing them inside the tent. A second layer shades is installed over
the tent in addition.
To ensure grafting success in the nursery, the following should be
observed:
1. Perform the right way of budwood collection.
2. Use a sharp knife exclusively for grafting.
3. Clean the knives and secateurs and other tools with alcohol before and
after grafting to minimize disease transfer.
4. Do not place tools on the ground.
5. Avoid grafting during very hot and very dry periods.
6. Rootstock must be at the right age and condition for grafting.
7. Manage shade and water carefully.
Plants stay in the closed tent for 21 days and are allowed to rest for 10-15
days inside the open tent. The grafted seedlings need to stay for three months
with the nursery after grafting.
Marking Grafted Seedlings

27

This is done by making tags on plant bags or on the stems of the plant for
identification. It will serve as a basis for plant recording and distribution. It is also
important to have a white board system to record row location, number of bags
per row, dates planted, dates grafted, plants culled and others. This is a good
and efficient record keeping, management, organization and planning. It must be
displayed at the nursery for easy reference.
B.8. Plant Transportion
A tri-wheeled truck will be used for seedlings transport. Loading of plants
will be on single layers with wooden partition between the top and bottom layer to
avoid crushing those at the lower layer. They will be covered with thin cloth to
protect them from wind and sun exposure.
B.9. Farming Schedule
Figure 4 shows the different activities done in raising seedlings in a
nursery, together with the corresponding timetable for each activity. It takes one
week to prepare and sterilize the potting mixes. Bag filling and collecting of pods
can be done simultaneously for one week. It takes three to seven days for the
seeds to germinate. The pre-germinated seeds will be planted in the bags filled
with soil and will be grown for two months. Culling will be done two weeks after
planting and repeated regularly for two months. Another week will be for the
preparation of the rootstock for grafting, at the same time, collecting for budwood
stick. Then, grafting follows which will be done for one week. Grafted seedlings
will be covered in the tents for three weeks. There will be an additional two

28

weeks for plant resting and one week for hardening-off of plants before transport.
Planting will start on the month of January of the operating year and will end at
the 7th month of the fiscal year.
B.10. Culture and Maintenance Requirement
The proper way of culture and care must be observed in the nursery from
the preparation of planting media, seed propagation, grafting, up to plant
distribution.

29

30

B.10.1. Controlling pH of Potting Mix

The best pH range for cacao is 6-7. If pH is < 5.5, a 10 g builders lime
will be added in 10 liters of water, and 100 ml of the mixture will be added into the
pot. If the pH is >7.5, iron sulfate will be added at 3 grams per liter of water and
flood each pot. A field test kit will be used to check for pH level.

Plate 9
Field Test Kit

B.10.2. Water Application

A watering will be done in the morning and afternoon everyday wetting the
top 7-8 cm or 5% of the seedlings bag volume. One day before grafting, plants
are fully watered. Plants are also carefully watered after grafting to prevent the
leaves from wetting. When plants are mature, watering will be done every other
day. Careful watering will ba observed to prevent seedling damage and disease
in the nursery.

31

B.10.3. Plant Pests and Diseases

The most common pests are insects such as thrips, mites, aphids, and
mirids which cause leaf and stem distortion and leaf drop. This can be treated by
foliar sprayings for the first eight weeks and by adding natural insecticides.
Diseases in the nursery include seedling blight, seedling rots and vascular streak
dieback. Controlling weeds can be done by hands and by spraying the plants
with insecticides.
B.10.4. Fertilizers Application
If the soil used in the nursery meets the criteria for good potting mixes,
then the used of fertilizers can be minimized. 15 g of 14-14-14 or 30 g of
ammonium sulfate is applied weekly to the seedling. If after two months from
planting the seedlings show signs of micronutrients (NPK) deficiency, then each
bag will be treated with 10g of complete fertilizer (12-24-12 or 10-15-10).
B.10.5. Shade Management
To ensure healthy seedlings, the sides and roof of the nursery are
checked if they are properly shaded. It should have an initial shade of 80% and
after the first whorl of leaves has hardened, the shade shall be reduced
gradually. Reduce light to 50% from six to eight weeks from germination. Grafted
seedlings are under the tent for a month with two layers of shade cloth is
removed. Removed shades from seedlings two weeks before transport.

32

C. Plant size and Production Schedule

The site for the nursery can accommodate 120 000 plants with 40 plants
per sq m nursery floor. Bags will be arrange in beds with a width of 2.5-3 ft. The
length of the seedbed is equal to the length of the nursery. There will be 1.6 ft
gap between beds. Each bed will contain six bags in a row 6.9 ft space between
seedlings. A 2m. access pathway will be allocated at the center. There will be an
additional 25 sq. m. for potting mix preparation, bag filling, work planning and
recording and other nursery related operation.
Within the operating year, planting and harvesting will be done seven
times. Twenty thousand seeds will be planted every month. Of the 20,000 seeds
planted, a 95% germination rate or 19,000 seedlings is expected. From these,
10% are culled leaving 17,100 seedlings. Then, 80% success rate or 13,680
seedlings will be obtained after grafting. There will be a 5% or 685 seedling loss
reducing the number to 12,996. A monthly production of 12,996 seedlings is
expected starting June of the harvest period. The proposed project will yield to
90,972 yearly (Appendix D).
D. Tools and Equipment
Table 7 shows the tools needed for the whole farming activity. It includes
the tools to be used from seed preparation and propagation, grafting, seedling
care and distribution. The equipment used in the nursery is the water pump
which is the source of water for watering the seedlings. Tools and equipment
requirement also includes those needed in the maintenance of the nursery.

33

Table 7
Tools and Equipment
Quantity
1 unit
1 unit
1 unit
5 units
5 units
5 units
5 units
2 units
5 units
1 unit
5 units
2 units
5 units
2 units

Description
Tri-wheel Truck
Cement Mixer
pH & Electro conductivity Meter
(HANNAH)
Measuring Tape (3m, CRESTON)
Wooden Mallet
Pruning Secateurs (CRESTON)
Grafting Knives
Spray Tank
Water Can
Wheel Barrow
Trowel (8 ELTORO)
Pail
Aluminum Trays
Bolo

E. Plant Location
The proposed project will be situated at Sitio Nagsipit, Tabaco City which
is one of the upland barangays of Tabaco City. The place is characterized with
rich fertile soil and it enjoys the refreshingly cool evenings of upland climate. It
has pronounced warmness and humidity throughout the year with no distinct dry
period but with a very pronounced maximum rainfall from November to January.
The terrain is generally flat with an elevation of 5 m. and 13m. Above sea level.
The place is a 3000 sq.m land which is highly suitable for cacao nursery.

34

Figure 5
Plant Location

35

F. Farm Layout
The nursery should be located in close proximity of the field. This will
facilitate easy transfer of seedlings to the permanent site and to water source
(Figure 6).
Size of the Nursery
The size of the nursery will depend on the following:
1. Number of seedlings in the nursery
2. Length of time the seedlings will stay in the nursery.
3. Number of culls that will be allowed.
4. Number of seedling losses.
The last two factors will determine the extra space needed to grow the
required number of seedlings in the nursery.

36

Figure 6 Farm Layout

37

G. Structures
Nursery
A good choice of nursery design provides an environment that
allows cacao seedlings to develop quickly into healthy plants ready for field
plating. There are seven nursery design that can be built depending on the
materials in the construction and on the budget allocated for the project.
The project will employ the simple backyard nursery style. The
foundations will be made of bamboo pole and log posts. Barbed wires will be
used for the frames and support for the roofs. Black cloth used for roofing
purposes.
Office Building
The office building is built for the purpose of administering and
selling of seedlings. It is also for entertaining customers or farmers in assessing
the selling of seedlings.
Furthermore, the total cost of construction for nursery shed and office
building is Php. 222 163.00 and Php. 37 410.00, respectively.
H. Raw Materials
Farm Inputs and Sources
Table 8 presents the farm inputs needed in every cycle production.
It also includes the place or stores where they can be bought. Selection is based

38

on their proximity to the nursery to minimize fuel expense and ensure affordability
of the input.
Table 8
Farm Inputs and Sources
Quantity
500 pcs.
17 100 pcs.
1 200 kg.
48 sacs
20 000
180 sacs
3 420 m.

Description
Cocoa Pods
Budwood Stick
Thiodan ( green label)
14-14-14 Fertilizer
Polyethylene Bags
Rice Hull
Grafting Tape

Source
Cacao growers in Albay
UP Los Baos, Laguna
Sunrise Commodity Tabaco City
Sunrise Commodity Tabaco City
Montex Tabaco city
Palay Farmers in Tabaco
Lucky Educational Supply
Tabaco City

I. Utility
A nursery is a farming type of business which requires sufficient amount of
fresh water. About 1,800 liters or 1.8 cubic meters will be consumed per day or
720kwh per production cycle converted to electricity by using the 1hp electric
water pump. Electricity is also needed for lighting the work planning area of the
nursery and the entrance gate.
Fuel is of great importance for the transport and collection of farm inputs. An
average of 15 L. if diesel is needed in every cycle. The project
Utility requirement for one cycle is itemized with its corresponding cost in
Table 10.

39

Table 9
Utility Requirement
Description
1 hp. Electric Water Pump
Lights
Fuel

Consumption
(per cycle)
720 kw.
384 kw.
15 L.

Total
Consumption
6 552.60
400.52
735.00

J. Waste Disposal
The weeds accumulated during weeding will be used for compost. It will
be used to potting soils as organic fertilizers to reduce the expenses allotted for
fertilizers and it will be very helpful to the healthy growth of the seedlings. The
sacks of fertilizers will be practically utilized as storing medium of the weeds.

40

Chapter IV
FINANCIAL STUDY
A. Total Project Cost
The business needs Php. 2,997,367.67 to cover the first year production
operation. It require to purchase the nursery tools and equipment, water pump for
drainage facility, fixtures and furniture, and office equipment. It needs to construct
nursery shed for the growing and production of grafted seedling. As for
administering and selling of seedlings, the office building requires constructing for
entertaining customers or farmers in assessing the selling of seedlings. It will be
budgeted for the first year as 25% for fixed assets, 74% for working capital, and
1% for pre-operating expenses. As to the second up to fifth year, the costs are
assumed to increase because of fluctuation of prices in the market. The total
project cost is presented in Table 10.
These are the following financial assumptions before it arrived in the
following projections:
1. These cost are set in their prevailing market price
2. The cost of farm inputs, packaging, utilities, advertising and maintenance
expense are expected to increase by 5% annually.
3. Salaries is remained the same in next five years.
4. The cost of renting the land is remained the same in next five years.
5. Cost of advertising and maintenance is assumed to increase by 5%
annually.
6. The selling price of seedlings is projected to increase by 5% annually.
7. The fixed assets are depreciated over its useful life in a straight line basis
less of its scrap value, if there is.
41

8. Other fixed assets that are fully depreciated must be disposed and
acquired another.
9. Ending inventory in units is equal to 10% annual production cost. It will be
computed based on its farm unit cost.
10. 70% of sale is assumed to be collected during the year and the remaining
on the other year.
11. 70% of purchases (farm inputs, miscellaneous and packaging expense)
are to be collected during the year and then remaining on the other year.
12. As to the payment of loans, it will be paid after one year of issued loan
plus the interest incurred.
13. Tax expense is to be paid on the next year.
Partners are required to contribute an equal capital of P 150,000.00 each
or total of P 600,000.00 as an initial capital of the partnership. The P
800,000.00 is still in application of loan. The total cash of P 1,400,000.00 will
be financed the 100% of purchasing and constructing fixed assets, 27% of
total working capital and 100% of pre- operating expenses.

Table 10

42

Partners are required to contribute an equal capital of P 150,000.00 each

or total of P 600,000.00 as an initial capital of the partnership. The P 800,000.00
is still in application of loan. The total cash of P 1,400,000.00 will be financed the
100% of purchasing and constructing fixed assets, 27% of total working capital
and 100% of pre-operating expenses.

B. Sources of Financing and Amortization Schedule

43

The 42.86% of the investment which is P 1,400,000.00 of proposed

project will be provided by the partners equal investment and the 57.14% will be
borrowed from Land Bank Tabaco Branch as a proposed source. The amount of
P 800,000.00 will be borrowed and will be incurred by the 12% interest. This loan
is unsecured and is still in process of application. Amortization Schedule is
presented in Table 12.
Table 11
Amortization Schedule
Outstanding
Year
2015
2016
2017
2018
2019
2020

Principal
160 000
160 000
160 000
160 000
160 000

Interest Payable
96 000
76 800
57 600
38 400
19 200

Balance
800 000
640 000
480 000
320 000
160 000
0

It still need a contingent allowances to be finance if there is other

expenses to be made, need in addition to fluctuating prices, or uncertain event
like typhoons and landslides. It will budgeted as 5% of the total project cost as
shown in Table10.

C. Projected Financial Statement

C.1. Projected Income Statement

44

The proposed business a producing seedling entity provided in

constructing an income statement of a manufacturing company. In the first year
of operation, it earns an income after tax of P 451,934.48. The net income every
year incurs a tax of 30%. It is shown in Table 12.

C.2. Projected Cash Flow Statement

The 70% of sales will be collected in the first year and will be added in
total investment. All other expenses incurred and assets purchased and
constructed are paid during the year. The ending balance of cash will be
accumulated. The P 50,000.00 of ending cash balance is still on hand and the
remaining is deposited in bank. It is shown in Table 13.
C.3. Projected Statement of Financial Position
Total asset for the first year comprises of P 1,678,452.93 of current assets
and P 681,383.65 of noncurrent assets or fixed assets. There is a portion of
loans to be paid next year that it will included in noncurrent asset. As for the
partners capital, there is an equal share of net income after taxes. It is presented
in Table 14.

Table 12

45

Table 13
46

Table 14
47

Table 15
48

D. Financial Analysis
49

D.1. Safety Analysis

50

51

52

D.2. Profitability Analysis

53

54

55

D.3. Liquidity Ratios

D.4. Leverage Ratios

56

D.5. Activity Ratios

57

D.7. Break-even Analysis

58

The proposed business needs to earn at least a net income of

P200,000.00 in a year. It is computed in Table.

The cash payback period is to be computed as follows:

59

60

Appendices
Average Annual increase = Present Year Initial Year
No. of Years 1
= 335 Ha 344 Ha
5 -1
= 11 = 2.75 Ha
61

62

63

64

65

66

Appendix F

67

Appendix G

Appendix H

68

Appendix I

Appendix J
Purchase of Office Equipment
Quantity
1

Description
Computer Set

Price
P 22,900.00

Appendix K

69

Appendix L

70

Fertilizer (per cycle) = 15 g/bag x 20000 bags x 8 sprays

=2400000 g/ 1000g/kg
= 2400 kg / 50 kg/sack
= 48 sacks
2
Pesticide (per cycle )= 12 g/bag x 20000 bags =
3
Rice Hull (per cycle) = 450 g/bank x 20000 bags = 900000 g/ 1000
= 9000 kg/ 50 kg per sack= 180 sacks
4
Grafting Tape (per cycle) = 20 cm/seedlings x 17100 seedlings
= 342000 cm/ 100 = 3420 m
Appendix M

Appendix N

71

Appendix O

72

Appendix P

1 Water Consumption
No. of plants x bag volume x 5% watered = volume of water
20000 bags x 1.8 L x 5% = 1800 L/ 1000L = 1.8 cu. m./ day
Electric Water Pump (1 hp= 750 watts) Consumption
Daily Water Consumption: 1.8 cu. m.
No. Of Days per Cycle: 120 days
Daily Rate Consumption / No. Of Hours x No. of Days per Cycle
1.8 cu. m. / 8 hrs.x 120 days
=960 hrs. x750 watts/ 1000 = 720 kw 13.00 (rate) = 9360 per run
65520per year

73

74

Appendix Q

75

Appendix R

Appendix S

Appendix T

76

Appendix V

Appendix W
Determination of Farm Unit Cost

77

Appendix Y

78

Appendix Z

Appendix AA

Appendix AB

Appendix AC

79

80

Appendix AD
81

Bibliography

www.agriskmanagementforum.org/content/major-pest-diseasescacao-symptoms.

www.bas.gov.ph/agfishtech-home/crops/206-plantation-crops/1277cacao

www.bicol.da.gov.ph

www.businessdiary.com.ph/2191/cacao-production-guide

www.business.inquirer.net/127335/shortage-of-cacao-both-a-threatand-an-opportunity

www.cacaophil.org

www.orchid.ph/files/phils-cacao-nursery-manual-2011.pdf

www.pcard.dost.gov.ph

www.secredearth.com/ethnobotany/plantptofiles/cacao.ph

www.slideshare.net/chandankumarka/pest-disease-of-cacao

www.successalliance.org

www.sunstar.com.ph/cagayan-de-oro/business/2013/08/26phcacao-growers-urged-step-production-299718
82

www.thefarmersvoice.org/uk/practical.php

www.thefilipinoentrepreneur.com

www.wikipedia.com

83

Articles of Partnership

The agreement, made on January 12, 2015 is between Beren, Reden B.,
Bellen, Jenane May G., Cominguez, Rachel Marie L. and Grande, Jenny A.

1. The above-named persons, all of legal ages, formed a partnership to

cooperate under the name of Kakao Toh, Grafted Cacao Seedling Nursery,
located at Sitio Nagsipit, Tabaco City. The partnership shall engage in
production of grafted cacao seedling which shall be sold as a planting
material in the Bicol Region.
2. This agreement shall run for a term of ten years, beginning January 12, 2015,
or of a shorter term if agreed upon in writing by all partners.
3. The initial investment shall be Php. 150 000.00 equal contribution by each
partner. The investment are partnership property.
4. The partner having the title of the general partner shall give his time, skill, and
attention to the operation of this partnership and shall engage in no other
business enterprise unless permission is granted in writing by the other
partners.
5. The salary of the managing partner shall be Php. 12 000 per month. Neither
partner may withdraw cash or other assets from the business without the
express written permission of the partner. All profits and losses of the
business will be share 25% equally among partners.
84

6. Upon dissolution of the partnership due to the termination of this agreement,

the written permission by each of the partners, or the death or incapacitation
of one or all partners, a new contract may be entered into by the partners.
The sole continuing partner may also purchase the other partners interest in
the business at a price that shall not exceed the balance in the terminating
partners capital account. The payment shall be made in cash in equal
quarterly installments from the date of termination.

The assets of the partnership left after the liabilities are paid will be divided in
proportion to the balance in each partners account on that date.

________________________

_______________________

Beren, Reden B.

Bellen, Jenane May G.

Date: January 12, 2015

________________________
Cominguez, Rachel Marie L.

Date: January 12, 2015

Date: January 12, 2015

_______________________
Grande, Jenny A.

Date: January 12, 2015

85

CURRICULUM VITAE

Reden B. Beren
Zone 1 Mariroc Tabaco City
09076835144
redCPA12@gmail.com

PERSONAL INFORMATION
Date of Birth
Place of Birth
Age
Gender
Nationality
Religion
Status
Fathers Name
Occupation
Mothers Name
Occupation
Language known

:
:
:
:
:
:
:
:
:
:
:
:

November 12, 1993

Tabaco City
20
Male
Filipino
Roman Catholic
Single
Tadeo Beren
Carpenter
Angelita Beren
Deceased
Filipino and English

EDUCATIONAL BACKGROUND
School
College

Daniel B. Pena Memorial Foundation

Year Graduated
2010-Present

Ziga Avenue, Tabaco City

High School

Mariroc High School

2006-2010

Tabaco City
Elementary

Mariroc Elementary School

2000-2006

Tabaco City

86

Jenane May G. Bellen

Zone 7 Cobo, Tabaco City
09482076428
bellen_jenmay @gmai.com

PERSONAL INFORMATION
Date of Birth
Place of Birth
Age
Sex
Nationality
Religion
Status
Fathers Name
Occupation
Mothers Name
Occupation
Language known

:
:
:
:
:
:
:
:
:
:
:
:

May 15, 1995

Baranghawon, Tabaco City
19
Female
Filipino
Roman Catholic
Single
Jose Dante B. Bellen
Technician
Evangelina G. Bellen
Direct Seller
Filipino and English

EDUCATIONAL BACKGROUND
School
College

Daniel B. Pena Memorial Foundation

Year Graduated
2011- Present

Ziga Avenue, Tabaco City

High School

Tabaco National High School

2007-2011

Panal, Tabaco City

Elementary

Tabaco South Central Elementary School

2001-2007

Ziga Avenue, Basud, Tabaco City

87

Rachel Marie Cominguez

Zone 3 Panal, Tabaco City
Contact No.: 09307501811
Email: rmcominguez13@gmail.com

Personal Data:
Age
Date of Birth
Place of Birth
Civil Status
Citizenship
Height
Weight
Religion
Gender
Fathers Name
Occupation
Mothers Name
Occupation
Language

:
:
:
:
:
:
:
:
:
:
:
:
:
:

19 years old
December 13, 1994
Bacolod, Tabaco City
Single
Filipino
5ft 1in
45 kg.
Christian
Female
Mario B. Cominguez
Government Employee
Raquel L. Cominguez
Homemaker
Bicol, Filipino& English

Educational Attainment:
Te r t i a r y

D a n ie l B . P e a M e mo r i a l C o ll e g e F o u n d a t i o n
Tabaco City
Bachelor of Science in Accountancy
June 2011 Present

Secondary

Ta b a c o N a t i o n a l H i g h S c h o o l
Panal, Tabaco City
2007 2011

Elementary

Ta b a c o N o r t h we s t E le m e n t a r y S c h o o l
Panal, Tabaco City
2001 2007

88

Jenny A. Grande
Zone 1 Burabod Malinao Albay
09493610540
Jennygrande80@gmail.com

PERSONAL INFORMATION
Date of Birth
Place of Birth
Age
Gender
Nationality
Religion
Status
Fathers Name
Occupation
Mothers Name
Occupation
Language known

:
:
:
:
:
:
:
:
:
:
:
:

April 13, 1995

Tarlac City
19
Female
Filipino
Roman Catholic
Single
Jose S. Grande
Junior Mechanic
Mercedes A. Grannde
Housewife
Ilocano, Filipino and English

EDUCATIONAL BACKGROUND
School
College

Daniel B. Pena Memorial Foundation

Year Graduated
2011-Present

Ziga Avenue, Tabaco City

High School

Saint Rose Catholic School

2007-2011

Sta. Rosa St. Paniqui Tarlac

Elementary

Oloybuaya Elementary School

2001-2007

Oloybuaya Gerona Tarlac

89

ACKNOWLEDGEMENT

First and foremost, our utmost gratitude to Mr. Rafael Kallos, Ph.D. who
shared this insights in our proposal and helped us gain fruitful ideas in pursuing
our feasibility study.
The researchers are deeply indebted to several generous individuals who
help make this study a success. Specific acknowledgement is given hereby to
the following person.
To the Department of Agriculture for accommodating the proponents
and for giving them valuable information for the proposed project.
The researchers family, namely: Mr Tadeo Beren and Ms. Cynthia Beren
father and sister of Red, Mr. Jose Dante B. Bellen and Mrs. Evangelina G.
Bellen parents of JM, Mr. Mario B. Cominguez and Mrs. Raquel L. Cominguez
parents of RM, and lastly Mr. Jose S. Grande and Mrs. Mercedes A. Grande
parents of Jen, for the love, moral and financial support that helped immensely in
accomplishing this task.
To our friends, namely: Jovanie Broso, Enrique Caberos, Carmelle Mae
Apita, Liezyl Competente, Mildred Gratila, Ivy Apuli, Liezel Balingbing,
Jobelle Barcellano and Karen Pramoso who willingly helped us gather
information without any cost.
This dissertation would not be possible without the guidance and help of
several individuals.

90

Above all to God Almighty for all the guidance, strength, knowledge and
blessing he bestowed on us.

91