Benefits of Banana Ketchup

Chapter I
INTRODUCTION
Bananas are among the world’s most commonly consumed fruits. They
are primarily composed of carbs, and contain decent amounts of several
vitamins, minerals, and antioxidants. This fruit contributes to improved heart and
digestive health when consumed regularly as a part of a healthy lifestyle. Many
thought that Cavendish bananas that are rejected for export are just food for
livestock. Bananas that are sold in the market are often consumed raw because
people are not aware that those can be processed into a very useful condiment.
(Wilf, 2013)
Food in the Philippines is evolving. Under pressure to satisfy taste buds,
eyes, stomachs and budgets, products like banana ketchup have become
popular. Banana ketchup is a staple Filipino dipping sauce. It is a Filipino
condiment made from mashed banana, sugar, vinegar, and spices. It is sweeter
than tomato ketchup and is used on many dishes like omelettes, hotdogs,
burgers, fries and other meats. Banana catsup is also a vital and distinct
ingredient in Filipino-style spaghetti. It is probably more popular and more
consumed than tomato ketchup. A lot of Filipino dishes are best eaten with this
sweet condiment. There are many dipping products that are available in the
market and most don’t have enough time and knowledge to make banana sauce.
(Dave, 2012)
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The idea of making home-made banana ketchup is applicable since there
are a lot of banana plantations in the neighboring towns and cities. Since banana
producers export “quality green, clean and fresh bananas” and cast-offs are sold
domestically at a low price, it is much easier to get supplies for the main raw
material, the Cavendish banana.
1.1. The Need
This study will satisfy the need of consumers for healthy and appealing
taste of banana ketchup, as well as the need of retailers and wholesalers for
more accessible and competitive supply of it. This will also help in fulfilling the
need of banana plantations in neighboring towns to dispose Cavendish bananas
that are not qualified for export.
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1.2 Objectives of the Study
Generally, the study aims to determine the feasibility and viability of
establishing Lami-a Banana Sauce in Kalandagan, Tacurong City.
Specifically, the study seeks to achieve the following:
1.2.1. Management Aspect
a. Identify the number of employees needed for the operation of this
project and their respective positions;
b. Determine the amount of wages the employees must receive; and
c. Identify the employees’ benefits that must be given.
1.2.2. Marketing Aspect
a. Know the historical demand and supply of Banana Sauce;
b. Know the projected demand and supply of Banana Sauce;
c. Determine the market gap;
d. Forecast the sales for the next five years; and
e. Determine the market share.
1.2.3. Technical Aspect
a. Determine the best location for the proposed study; and
b. Be acquainted with the equipment needed and the production process.
1.2.4. Financial Aspect
a. Determine the liquidity, solvency, and profitability of Lami-a Banana
Ketchup.
1.2.5. Socio-Economic Aspect
a. Determine the social benefits that can be contributed by the project.
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1.3 Significance of the Study
The results of this project feasibility study will serve as a guide for the
investors for projections and planning for investments and expansion for the
same type of business. It will serve as a reference for students who will conduct
related study in the future. It will also serve as an insight for the proponents in
considering various opportunities that will come up after graduation. The
feasibility of the proposed project will determine whether the proponents can
invest on it in the future.
1.4 Scope and Delimitation
This study is limited to processing of Cavendish bananas from raw to
banana sauce and selling it to retailers and end users. The Lami-a Banana
Ketchup will process bananas from mashing and slicing to flavouring,
cooking,and packaging and bottling.
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1.5 Methodology
Data Gathering Instrument
Data needed for this study were acquired through reliable published
sources in books, magazines, and the internet, interviews and survey
questionnaires. The survey questionnaire was formulated to gather data on the
demand for banana ketchup. The survey questions were conveyed by the
proponents with the help of the adviser.
Data Gathering Procedure
Upon approval of the adviser and campus director, the questionnaires
were given to randomly selected respondents in stratified areas in Sultan
Kudarat. Inquiries were made from Department of Science and Technology,
Department of Trade and Industry, and Department of Labor and Employment.
Sampling Technique
Simple random sampling was used to determine the number where a
group of subjects called sample. Business sector was selected to participate in
the study from the province of Sultan Kudarat. Each sample is chosen entirely by
chance and each member of the population had an equal chance of being
chosen. The number of samples was computed using Slovin’s formula with a
margin of error of 0.10. There are 94 wholesale and retail establishments in
Sultan Kudarat which results to 49 samples (refer to Schedule 42).
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Projection Method
There are four methods available namely; Arithmetic Straight line,
Arithmetic Geometric Curve, Statistical Straight Line and the Statistical Parabolic.
Statistical Parabolic resulted to a lowest Standard Deviation for both supply and
demand (refer to Schedule 43 and 44), therefor, this method was used in
computing the projections on supply and demand of banana sauce.
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1.6. Review of Related Literature
History of Banana Ketchup / Banana Catsup
The origin of banana ketchup in the Philippines dates back to World War II
when there was a shortage of tomatoes on the islands. Today, Banana Ketchup
is practically more popular than tomato ketchup and much cheaper to produce.
Many fast food restaurants use banana ketchup rather than tomato due to the
price difference. A common name for banana or tomato ketchup is “Catsup”.
(Dave, 2012)
Health Benefits of Bananas
Heart disease is the world’s most common cause of premature death.
Bananas are high in potassium, a mineral that promotes heart health and normal
blood pressure. One medium-sized banana contains around 0.4 grams of this
heart-healthy mineral. According to a large analysis of many studies, daily
consumption of 1.3 to 1.4 grams of potassium is linked to a 26% lower risk of
heart disease.
In addition, bananas contain antioxidant flavonoids that have also been
associated with a significant decrease in the risk of heart disease. Unripe, green
bananas contain considerable amounts of resistant starch and pectin, which are
types of dietary fiber. Resistant starch and pectin acts as prebiotic nutrients,
which support the growth of beneficial gut bacteria. They pass down to the colon
where they are fermented by beneficial bacteria that form butyrate, a short-chain
fatty acid that promotes gut health.
There are mixed opinions on whether bananas are good for diabetics or
not. It is true that bananas are high in starch and sugar, and therefore one might
7
expect them to cause a large rise in blood sugar, but due to their low glycaemic
index, moderate consumption of bananas should not raise blood sugar levels
nearly as much as other high-carb foods. However, diabetics should avoid eating
large amounts of well-ripened bananas. After eating foods rich in sugar and
carbs, diabetics should always make sure to monitor their blood sugar levels
carefully.
On a different note, people sometimes seem to consider banana
consumption as a risk factor for constipation, while other studies indicate that
bananas may actually have an opposite effect, at least in some people.
Bananas are mainly composed of carbs. Unripe bananas may contain
decent amounts of resistant starch, which functions like fiber, promoting colon
health and healthy blood sugar levels. They contain a number of vitamins and
minerals in decent amounts. These include potassium, vitamin B6, and vitamin
C. Like other fruits, bananas contain several healthy antioxidants, which are
responsible for many of their health benefits. These include dopamine and
catechin. Bananas may be beneficial for heart health due to their high amount of
potassium and antioxidants. (Arnarson, 2015)
The Supply of Bananas
According to Wilf, bananas are both a major staple in the global tropical
zone as well as an important cash crop and significant fruit varietal available for
American and European consumption. They are the fourth most important crop
8
worldwide for developing countries, where they provide an important starch
source, especially in Africa and Asia.
The vast majority of bananas grown today are for consumption by the
farmers or the local community, with only 15% of the global production of the fruit
grown for export. Bananas are of significant economic importance elsewhere,
such as the French Caribbean and Central America. In the French Caribbean
(Guadeloupe and Martinique), banana farming represents a huge industry, where
about 260,000 plantains are produced each year. Ecuador, Costa Rica, the
Philippine Islands, and Colombia account for two-thirds of the exported banana
crops. Of the bananas grown for export, almost all are desert bananas grown for
markets in the United States and Europe, of which the “Cavendish” banana
varietal is of supreme importance. Exported bananas are often picked in an
unripened state, which makes for much easier transport to their countries of
destination as “green” bananas are more resistant to spoilage and bruising than
ripened fruits. Upon the end of their journey, the immature fruit are placed in
special rooms filled with ethylene gas, which ripens the fruit to maturity.
The local market proved to be the center of commerce for the early
banana trade; bananas were produced on small farms by indigenous persons.
Those bananas not immediately consumed by the farmers were sold in local
markets to other members of the community. Visiting merchants thus first gained
access to bananas through these local marketplaces, and ship small bunches to
overseas markets, and the banana’s journey of global production, trade, and
consumption had begun.
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Underdeveloped mass markets were perhaps the greatest factor limiting
the banana’s ascendancy to a world commodity. Bananas reached Europe and
America, but in small numbers and at specific ports. Simultaneous with the
spread of the Cavendish varietal across the Indian and Pacific Oceans, small-
scale banana exports from Cuba continued to make their way into the North
Atlantic ports of the United States. The imports into the U.S. continued to
gradually increase over the next few decades, especially with the end of the
American Civil War, but remained an exotic fruit in American cuisine well into the
1870s. Another element in the banana’s rising demand lay in the
overall status of fruits in the national economy. Bananas flourished in the fruit-
positive culture, and were cited in various cookbooks, pamphlets, and popular
literature as a healthy food. For instance, ripe bananas became associated with
gastrointestinal health, and various experts noted their importance to human
digestion.
The banana’s popularity also sprang from its unique physique. Concern
for public health lay at the heart of American society in the late eighteenth and
early nineteenth century, so much so that public policy reflected a new
awareness of pathogens with the rise of the germ theory. In an era when growing
awareness of disease, especially bacteria and viruses, and disease transmission,
dominated public health discourse, bananas offered the perfect food. The
banana peel, with its ensured sterility, offered consumers a food that was both
germ-free as well as nutritious.
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Thus, factors leading to a rise in the demand for bananas during the end
of the nineteenth and beginning of the twentieth century included its safety from
contamination, along with its relatively low price, its relatively high caloric content,
and its overall status as a healthy food. For these reasons, bananas also enjoyed
a rise in Europe, though not at the same scale as the American plantain mania.
Regardless of their relative scale, the foreign demand for banana consumption in
led to a dramatic increase in banana production in tropical countries of the New
World.
The increasing demand for bananas, and the lucrative banana trade, as
exemplified by the UFC, had massive effects on the production of plantains on
Caribbean, Central American, and South American farms. Small-scale cultivation
gradually gave way to more intense production to maximize yield and minimize
loss. Banana traders increasingly influenced the development of harvesting
practices that both limited varietals to breeds deemed desirable for European
and American markets as well as those timed to produce during the peak
seasons of banana consumption, March through June. Gradually, one breed of
bananas began to stand out as a particularly profitable fruit, the Gros Michel or
“Big Mike.”
As consumption, production, and trade grew, so did a demand for better
shipping technologies that could meet the requirements of the foreign markets.
That is, banana shippers now needed new ways to shield the notoriously fragile
fruit. Even with the greater resistance to bruising offered by the Big Mike’s thick
peel, banana traders still needed extra protection for the banana’s journey from
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production to consumption. Steamships, with their steady power supplies, offered
guarantees against the weather systems that could waylay the vessels that relied
on the sail. Steamers, also because of their inexorable energy, could also hold
and carry larger quantities of fruit than the clipper. Fruit shipments, therefore,
were both larger than ever and much less likely to be delayed en route, allowing
for more consumable, that is, unspoiled, product to reach the marketplace.
Additional boons to the shipping industry arrived with the burgeoning refrigeration
industry, allowing a substantial reduction in fruit spoilage. By the 1920s, the
export of desert bananas was a lucrative, well established business for the
United Fruit Company and other fruit corporations. A major upheaval in the
industry, however, sparked by an unprecedented environmental disaster,
loomed.
The switch from polyculture to monoculture in banana plantations had
important consequences. Perhaps the most obvious was a massive upswing in
banana production. As the desert banana dominated the overseas banana trade,
plantations turned to intensively managed crops of one kind of plantain, the Gros
Michel, for their harvests. At the end of the nineteenth century, the Big Mike was
the dominant varietal, indeed oftentimes the only varietal, grown on plantations
throughout South and Central America. The result was an unprecedented growth
in banana exports during the early twentieth century.
Today, the Cavendish banana remains the dominant banana varietal
exported. However, it, too is in danger of commercial extinction. A strain of
fusarium wilt, known as “Tropical Race Four,” is diffusing from Southeast Asia
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across the tropical band, spread by both anthropogenic and natural means. The
Cavendish is vulnerable to this strain of Panama Disease, and its commercial
extinction, like its predecessor, seems likely. Yet, the danger of Panama
Disease, and its ilk, is not solely the burden of the desert banana, and thus the
relatively small (15% worldwide) portion of bananas grown worldwide.
Banana diseases at epidemic levels threaten not only the monoculture
plantations, but also the smaller, diverse banana crops propagated by small-
scale farmers throughout the world. If a disease manages to evolve past a
resistant breed’s natural defenses, it may be able to “jump” the barrier from non-
resistant types to affect even resistant varieties of the fruit. Thus, an epidemic
disease may be commercially devastating, but it is potentially of even greater
danger to the millions of bananas grown for subsistence around the world. If
epidemic disease jumps readily from banana-type to banana-type, humans
around the tropical world face potential starvation on a massive scale. A
worldwide, pan-plantain epidemic may be inconvenient for Americans and
Europeans, but fatal for millions in Africa, India, and Southeast Asia. The
banana’s future, and those of its cultivators, remains unknown. (Wilf, 2013)
During the American years – 1900-1940, approximately – the Filipinos fell
in love with American ketchup. In 1941, however, the Japanese attacked and
took over the Philippines. Suddenly, all American imports ceased and anything
American was destroyed.
This caused a major ketchup shortage and thus a market opportunity for
an entrepreneurial Filipino. Unfortunately, tomatoes don’t grow well at all in the
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Philippines. Any edible tomatoes we get are imported and that certainly wasn’t
an option during the Japanese occupation any more than was importing good
ketchup. So this entrepreneurial Filipino came up with a way to create ketchup
out of bananas. Thee dyed it red, bottled it, and sold it throughout the country
from early 1942 until the end of the war in 1945.
At that point the Americans returned for less than a year and the
Philippines became an independent republic in 1946. National pride was high
and the banana ketchup had caught on. It was cheaper, made in the Philippines,
and satisfied the need for the red sauce. Over the 75 years since then, American
ketchup has been reintroduced, but banana ketchup still reigns supreme in the
Filipino hearts and kitchens.
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1.7. Definition of Terms
Catechins -refers to a type of disease-fighting flavonoid and
antioxidant are the keys to tea’s health benefits.
Dopamine -is a neurotransmitter released by the brain that plays a
number of roles in humans and other animals.
Glycemic index -is a relative ranking of carbohydrate in foods according
to how they affect blood glucose levels.
Pectin -is a naturally occurring substance (a polysaccharide)
found in berries, apples and other fruit. When heated
together with sugar, it causes a thickening that is
characteristic of jams and jellies.
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Chapter II
MANAGEMENT ASPECT
This part of the study presents the form of business organization,
organizational structure including the employees’ wages and benefits, hiring
process and project time table.
2.1. Form of Business Organization of Lami-a Banana Ketchup
Processing
The project will adopt limited partnership type of business organization.
The life of a partnership may be established as a certain number of years by the
agreement. With proper provisions, the partnership's business may continue and
the termination or withdrawal of the partnership will be a documentation issue
that does not impact on-going operations of the partnership.
In Lami-a Banana Ketchup Processing, the partners are the agents. As
such, one partner may legally bind the partnership to a contract or agreement
that appears to be in line with the partnership's operations. Although partners
may limit a partner's ability to enter into contracts on the company's behalf, this
limit only applies if the third party entering into the contract is aware of the
limitation. It is the partners' responsibility to notify third parties that a particular
partner is limited in his or her ability to enter into contracts.
A limited partnership has two classes of partners and is often used when
investors will not be actively involved in the business and do not want to risk their
16
personal assets. Lami-a Banana Ketchup will have one general partner who
maintains unlimited liability. The liability of other partners is limited to the amount
of their investments.
2. 1.1 Trade Name
Figure 2.1. Lami-a Banana Ketchup Processing Logo
The proponents decided to name the proposed project as LAMI-A
Banana Ketchup Processing. Lami-a is a Cebuano word which means delicious.
The color orange and yellow stands for sweetness because banana sauce is
known to be sweet. The round shape symbolizes that in order for it to continue,
the unity of the partners are needed. The main ingredient, banana and the catsup
were used to give emphasis that Lami-a produces banana ketchup.
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2.2. Organizational Structure
Manager
(1)
Bookkeeper
(1)
Operations Finance and Administration
Chemist Laborer Cook Cash Sales Driver Utility Security

(2) (1) Collector Agent (1) (2) Guard
(1)
(1) (2)
(1)
Helper
(4)
Figure 2.2. Organizational Chart of Lami-a Banana Ketchup Processing
The production for Lami-a Banana Ketchup will be managed by manager
as hired by the partners. Bookkeeper is accountable for recording and keeping
accounts of the business. The laborers are those persons who will be
responsible for peeling, grinding, cooking bananas and packaging processed
banana ketchup. The chemist will perform tests according to the quality
standards of the products. One driver will be assigned to deliver the banana
ketchup to retailer stores and wholesalers together with helpers and also with
cash collector or sales agent for receiving payments and issuing official receipts.
In order to secure the business facilities two security guards will have shifting
hours to avoid theft.
18
19
2.3. Personnel Requirements
Table 2.1. Personnel Requirements and Description

Position No. of Qualification Description
Personnel
Manager 1 Must be a graduate of Business He/she performs managerial,
Management or Business financing and marketing duties.
Administration.
Can handle the day to day
operation of the business and
possess good interpersonal skills.
Bookkeeper 1 Atleast 20 years old. Must be a The Part time Bookkeeper keeps
Certified Bookkeeper with at least the book of the entity, record
1 year experienced in and update the business
bookkeeping. transaction three times a week
Cook 1 Atleast 20 years old and has a He/she will be in-charge of
degree in Food Technology or preparation and packaging of
other related courses. the products, together with the
helpers.
Chemist 1 Atleast 20 years old. Must have a The part time chemist performs
degree in Chemistry with atleast 1 laboratory tests to produce
year experience in any food catsup according to established
manufacturing company. standards and guidelines and
ensure that materials are used in
right quantities.
Helper 4 At least 20 years old male and has They will perform peeling;
experience in operate machines for grinding
and packaging.
Laborer 2 Male, must be at least 23 years Helping the drivers in delivering
old, physically fit, the banana ketchup to retailer
stores and wholesalers.
Sales 1 A graduate of any business He/she is responsible for the
Agent course. Must be expert in sales daily sales operation of the
talk and attracting customers. business.
Cash 1 Has a degree in any Business Responsible for collecting
Collector Courses, at least 21 years old, payments and issuing receipts.
male
Driver 1 At least 30 years old, having two In-charge in delivering the
years of experience of driving with banana ketchup to retailers and
driver license. wholesalers.
Security 2 25 to 40 years old, must be 5’5 in Responsible to secure the safety
Guard height, skilled and physically measure of the entity location.
healthy. Work seven days a week with 8
Must be a member of any security hours shifting.
agency.
Utility 2 Male. At least 18 years old, must In-charge in maintaining
be diligent and hard working. cleanliness inside the business
premise.
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Table 2.1 presents the positions, number of personnel, qualifications and
the job description for Lami-a Banana Ketchup Processing.
Table 2.2. Positions, Wage, Salary of Personnel

Position Monthly Annual 13th Month Total Annual
Salary Compensation Pay Compensation
Manager ₱ 15,000.00 ₱ 180,000.00 ₱ 15,000.00 ₱ 195,000.00
Bookkeeper ₱ 7,000.00 ₱ 84,000.00 ₱ 7,000.00 ₱ 91 ,000.00
Cook ₱ 8,000.00 ₱ 96,000.00 ₱ 8,000.00 ₱ 104,000.00
Laborer (2) ₱ 6,000.00 ₱ 144,000.00 ₱ 12,000.00 ₱ 156,000.00
Helper (4) ₱ 6, 000.00 ₱ 288,000.00 ₱ 24,000.00 ₱ 312,000.00
Cash Collector ₱ 6,500.00 ₱ 78,000.00 ₱ 6,500.00 ₱ 84,500.00
Sales Agent ₱ 6,500.00 ₱ 78,000.00 ₱ 6 ,500.00 ₱ 84,500.00
Driver ₱ 6,500.00 ₱ 78,000.00 ₱ 6,500.00 ₱ 84,500.00
Security Guards (2) ₱ 7, 500.00 ₱ 180,000.00 ₱ 15,000.00 ₱ 195,000.00
Utility (2) ₱ 6, 000.00 ₱ 144,000.00 ₱ 12,000.00 ₱ 156,000.00
Chemist ₱ 10,000.00 ₱ 120,000.00 ₱ 10,000.00 ₱ 130,000.00
Table 2.2 presents the monthly salary of employees, their 13th month pay
and their total annual compensation.
Table 2.3. Fringe Benefits

Employer-Employee
Position Phil Health Social Security EC Total Contribution

ER EE Tot EE ER ER EE
ER Total Total
al
Manager ₱187.50 ₱187.50 ₱375 ₱1,105 ₱545 ₱1,650 ₱30 ₱1,135 ₱545 ₱3,705
Cook ₱100 ₱100 ₱200 ₱589.30 ₱290.70 ₱880 ₱10 ₱599.30 ₱290.70 ₱1,970
Laborer ₱200 ₱200 ₱400 ₱884 ₱436 ₱1,320 ₱20 ₱904 ₱436 ₱3,060
Helper ₱400 ₱400 ₱800 ₱1,768 ₱872 ₱2,640 ₱40 ₱1,808 ₱872 ₱6,120
Driver ₱100 ₱100 ₱200 ₱478.80 ₱236.20 ₱715 ₱10 ₱488.80 ₱236.20 ₱1,640
Utility ₱100 ₱100 ₱200 ₱442 ₱218 ₱660 ₱10 ₱904 ₱436 ₱3,060
Cash Collector ₱100 ₱100 ₱200 ₱478.80 ₱236.20 ₱715 ₱10 ₱488.80 ₱236.20 ₱1,640
Sales Agent ₱100 ₱100 ₱200 ₱478.80 ₱236.20 ₱715 ₱10 ₱488.80 ₱236.20 ₱1,640
Source: Social Security System and PhilHealth (refer to Appendix 13 and 14 )
Table 2.3 presents the employee and employer contribution in Social

Security System and PhilHealth.
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2.4 HIRING PROCESS/ FLOWCHART
Recruitment
Requisition
Formulation of
Selection Criteria
Advertisement for
the Job vacancy
Receive Application
for the Job
Categorize No
Application
Suitable for the Criteria?

Send Thank You
Letter or E-mail
Yes No
Job Interview
Suitable for the Criteria?
Yes
Job Offer
Figure 2.3. Hiring Process/ Flowchart
The diagram shows the flowchart in hiring employees. The entity will have
the recruitment requisition and will set its selection criteria. In order to inform the
interested applicants, the entity needs to advertise for the offered job. After
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receiving all applications, they will categorize the applications to whether their
qualifications are suitable or not for the job. Those who are qualified will undergo
interview that will be conducted by the hiring officer. After the interview the
officer-in-charge will assess the result in order to choose the deserving
applicants who will be hired. Those who were not hired will receive a letter of
thanks through mail or E-mail.
2.5 Project Time Table of Activities (Gantt Chart)
Table 2.4. Project Time Table of Activities

Activities Month
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th
Preparation of feasibility
study
Planning of Legal Entity
Registering and
Licensing the business.
Preparation of document
for bank loan.
Loan processing.
Public bidding
Preparation of building
plan
Construction of building
Acquisition and
Installation of equipment
Hiring of employees
Advertisement
Start of the business

operation
Table 2.4 presents the flow of the operating activities of Lami-a Banana
Ketchup Processing. There are twelve (12) activities within sixteen (16) months.
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Every activity has its corresponding number of month/s to be accomplished. This
table is important to know its priorities and to avoid time wasting. It will help the
proponents to determine which activity they should focus to establish the Lami-a
Banana Ketchup Processing successfully.
On the first five months, the feasibility study will be prepared to enable the
proponents to gather data and information. Assuming this study is feasible, the
planning of legal entity will be made on the fourth and fifth month. The fifth month
will include registering and licensing of the business and preparation of business
plans and documents needed for bank loan. The 6 th and 7th month will be
allocated for the processing of loan. When the loan is granted, public bidding and
preparation of building plan will be done on the 8th month. The proponents
allotted five months for the construction of building. The 13th to 15th month was
apportioned for the acquisition and installation of equipment, hiring of employees
and advertisement before the business operation starts on the 16th month.
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Chapter III
MARKETING ASPECT
3.1 Market Description
The Lamia-a Banana Ketchup Processing will provide for the unsupplied
gap of banana ketchup in Sultan Kudarat. The primary target of this business is
the wholesalers and retailers in the municipalities of Sultan Kudarat. Banana
ketchup market in Sultan Kudarat is unsaturated. There is no existing banana
ketchup processing in Sultan Kudarat and majority of the supply for banana
ketchup is provided by NutriAsia and Del Monte.
3.2 Analysis of Demand
Table 3.1 Historical Demand

Demand
Year
( in tons)
2012 1,690.23
2013 1,732.82
2014 1,776.49
2015 1,821.26
2016 1,867.16
Source: Philippine Statistics Authority, Department of Trade and Industry
The demand for banana ketchup presented above covers the five-year
period 2012 to 2016. For the historical demand, the average consumption of
individuals per year which is 3.1 kg., rate of the population who are at the age
bracket who can consume catsup89%, the rate of ketchup users94% of the
total population and the percentage of ketchup users who consume banana
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ketchup83% were used for the computation. The demand in 2012-2016 was
computed using Statistical Straight Line method which obtained the lowest
standard deviation.
Table 3.2 Projected Demand

Projected
Year Demand
( in tons)
2017 1,914.13
2018 1,962.21
2019 2,011.39
2020 2,061.67
2021 2,113.06
Source: Philippine Statistics Authority, Department of Science and Technology
The baseline data for the demand computation is the demand computed in
2016. The demand was projected through Statistical Parabolic method which
obtained the lowest standard deviation for demand. (refer to Schedule )
3.3 Analysis of Supply
Table 3.3 Historical Supply

No. of Existing Supply
Year
Competitors (in tons)
2012 2 347.28
2013 2 365.52
2014 2 397.32
2015 2 418.2
2016 2 434.88
The historical supply is based on the actual supply of banana ketchup in
Sultan Kudarat in 2011. That data for the 5 years supply were derived on the
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GDP percentage for banana production: 1.064% for 2016, 1.060% for 2015,
1.061% for 2014, 1.072% for 2013 and 1.068% 2012.
Table 3.4 Projected Supply

No. of Existing Supply
Year
Competitors (in tons)
2017 2 453.98
2018 2 469.75
2019 2 483.51
2020 2 495.27
2021 2 505.02
The projection for the five-year supply was made through the use of the
Statistical Parabolic method which acquired the lowest standard deviation for
supply. The projections were based on the supply computed for 2016. (see
Schedule )
3.4 Analysis of the Market Gap
Table 3.5 Market Gap

No. of Supply Market Share
Demand
Year Existing ( in Market Gap % Actual (in
( in tons)
Competitors tons) ( in tons) tons)
2017 2 1,914.13 453.98 1,460.15 20 292.03
2018 2 1,962.21 469.75 1,492.46 20 298.49
2019 2 2,011.39 483.51 1,527.88 20 305.58
2020 2 2,061.67 495.27 1,566.40 20 313.28
2021 2 2,113.06 505.02 1,608.03 20 321.61
Source: Department Trade and Industry, Department of Science and Technology
The difference between the projected demand and projected supply
results to the market gap wherein the proposed entity can obtain 20% market
27
share based on its capacity to produce. The large amount of the market gap
serves as an implication that there will be a potential market for Lami-a Banana
Ketchup for the next five years.
3.5 Analysis of the Market Share
Market Share
NutriAsia Del Monte Lami-a Banana Ketchup Processing Unsupplied Portion
20%
40%
20%
20%
Figure 3.1 Market Share
The pie shows that a major portion of the market is supplied by NutriAsia
which has 40% market share and Del Monte supplies 20%. Lami-a Banana
Ketchup Processing’s production capacity can cater a 20% market share that will
lead the unsupplied portion to be at 20%.
28
3.6 The Competitors
There are two competitors of Lami-a Banana Ketchup processing, the
NutriAsia and Del Monte which are both large-scale corporations which supplies
an aggregate of 60% of the total demand in Sultan Kudarat. The competitors
distribute their products through the malls in the neighboring provinces where the
wholesalers and retailers from Sultan Kudarat buy.
3.7. Threats, Opportunities, Weaknesses and Strengths
It is important to determine the threats, opportunities, weaknesses and
strength of the company. Threat explores the external environment that could
affect the company. Opportunities are lists of untapped markets for business
development. Weaknesses are controlled internally which the company must
address to improve.
3.7.1. Threats
There are existing competitors to where customers have brand
loyalty. The Lami-a Banana Ketchup Processing will provide samples to
the target market to take customers’ interest.
There are insects and pests that can destroy the production of
banana and will affect the supply of bananas. The Lami-a Banana
Ketchup Processing should address this by getting supplies for banana
from several suppliers. Also, when the supply for Cavendish banana runs
out, the company may sort to using Lakatan or Saba which can also be
used as main ingredient for banana ketchup.
29
Land disputes may affect the supply of banana. The Lami-a
Banana Ketchup Processing will have more than two suppliers of banana
in order to sustain the volume of production for banana ketchup.
3.7.2. Opportunities
There are abundant sources of Cavendish banana in Sultan
Kudarat and in neighboring provinces. The Lami-a Banana Ketchup
Processing will contract to the banana production companies to supply
banana for ketchup processing.
The Sultan Kudarat has a high demand for banana ketchup. The
business will produce banana ketchup to meet the demand for banana
ketchup.
The small percentage of unsupplied portion can be an implication
that no other investors will venture in banana ketchup processing business
after Lami-a is established. This is an opportunity for Lami-a Banana
Ketchup Processing to increase its market share.
3.7.3. Weaknesses
The entity’s equipment is not as technologically advanced as the
competitors’ equipment.
3.7.4. Strengths
The location of the business is accessible to customers
especially for the wholesalers and retailers in Tacurong City. In addition,
there will be a display outlet in Town Square Arcade. Lami-a also offers
delivery service for bulk purchases.
30
Since the competitors penetrate Sultan Kudarat through their
supply sold in malls in neighboring provinces, Lami-a Banana Ketchup
Processing’s delivery service for bulk order makes it advantageous over
competing manufacturers which are far and do not offer delivery services.
3.8 The Marketing Mix
3.8.1 Product
20 g
100 g 200 g
320g
550g
1 kg
4 kg
2 kg
Figure 3.2 Products
The business will process banana ketchup and will be packed in sachet,
pouch, bottles and gallons. The banana ketchup to be manufactured will be
sweet, and sweet and spicy. The ketchup will be packed in 15g sachets, 100g
and 200g pouch, 320g and 550g bottles, and 1kg, 2kg and 4kg gallons.
31
3.8.2 Price
The average selling price are as follows:
Table 3.6 Prices

Product Price
20 gram Sachet ₱1.50
100 gram pouch ₱4.75
200 gram pouch ₱9.50
320 gram bottle ₱12.75
550 gram bottle ₱19.50
1kg gallon ₱41.50
2kg gallon ₱79.75
4kg gallon ₱135.75
3.8.3 Place
The Lami-a Banana Ketchup Processing factory and office building
will be located at Barangay Kalandagan, Tacurong City. The display outlet
will be located at Town Square Arcade Building, Gen. Lim Street, near
National Highway, Tacurong City.
3.8.4 Promotion
To guarantee that the Lami-a Banana Ketchup will be introduced
well and that the consumer will be persuaded to buy it, the company shall
make promotions most especially in its introductory stage which include
the following:
1. Advertisement
Within its introductory stage, the company shall post tarpaulins,
give leaflets and make advertisements in the local radio networks of
Tacurong City and different municipalities of Sultan Kudarat.
32
2. Samples
Before the business starts its operations; samples of banana
ketchup in sachets will be distributed to consumers in order to attract
customers by the product’s appealing taste. In order to prove that it
compliments food well, it will be given with cocktail hotdogs.
3.9 Channel of Distribution
Lami-a Banana
Ketchup
Processing
Wholesalers
Retailers
Final Consumers
Figure 3.3 Channel of Distribution
The bananas will be processed into banana ketchup, packed and bottled,
and will be sold to wholesalers and retailers, therefor; wholesalers who buy from
the entity will also be its competitor. The company will compete with wholesalers
in order to pursue some retailers to buy directly from Lami-a. The retailers will
sell the ketchup directly to final consumers.
33
3.10 Existing Market Practices
The payment for banana producers will be made one to two weeks after
the bananas are picked up from the plantation. The company will grant credit
sales to wholesalers and retailers and offer trade discounts of 2/10, n/30 to
encourage prompt payment and volume rebates to attract voluminous purchases.
3.11 Sales Forecast
Table 3.7 Sales Forecast

Market Share Recoverable Ratio Price per
YEAR (in tons) (80%) (in tons) Ton SALES
2017 292.03 233.62 ₱ 48,000.00 ₱ 11,213,917.77
2018 298.49 238.79 ₱ 50,400.00 ₱ 12,035,181.42
2019 305.58 244.46 ₱ 52,920.00 ₱ 12,936,838.49
2020 313.28 250.62 ₱ 55,566.00 ₱ 13,926,190.26
2021 321.61 257.29 ₱ 58,344.30 ₱ 15,011,132.90
The basis for the sales forecast is the share of Lami-a Banana Ketchup in
the market gap. The proponents assumed that 80% of the banana ketchup
produced will be sold. The average price is approximately ₱48.00 per kilogram or
₱48,000.00 per ton which will be increased by 5% every year. The increase will
compensate for the expected decrease on the demand for banana ketchup and
avoid substantial amount of decrease in the annual sales. Based on the survey,
30% of the total sale will be from retailers and 70% of total sales will be from
wholesalers.
34
14
Chapter IV
TECHNICAL ASPECT
4.1 Product Description
The Lami-a Banana Ketchup Processing will produce red-orange colored
sweet and spicy ketchup made from minced banana pulp which will be packed in
appropriate containers; sachets, pouches, bottles and gallons. Cavendish
banana and Lakatan will be made as ketchup because of abundant resources in
Sultan Kudarat and other neighboring provinces. The bananas must be well
selected to avoid spoilage and the produced banana ketchup must be approved
by BFAD.
Lami-a Banana Ketchup can be used as a dipping condiment for fried
eggs, hot dogs, fries, fish, pork and chicken and ingredient for Filipino style
sphagetti, afritada, menudo and many other dishes.
In order to cater the needs of extended households, restaurants, fast food
and burger and fries chains, 1 kg, 2 kg and 4 kg gallon banana ketchup will be
produced. There will also be 320 g and 550g bottle, 200g and 100g pouch, and
20g sachet for the consumption of households.
Although banana ketchup has quite a large amount of sugar, there are still
chances of spoilage due to storage temperature or container damage. An
unopened container which is tightly sealed and free from any kind of bacteria or
molds will remain fresh even when stored at room temperature. Keeping it in a
pantry or refrigerator will also keep the freshness of the banana ketchup.
32
According to Byron Johnson, the standard shelf life of unopened banana
ketchup is two years starting from the manufacturing date. When kept in a pantry
or refrigerator, you can add a few more months. It is fine to use ketchup after the
best before date as long as it still tastes fine and there are no indications of
molds, discoloration and other strange masses.
Ketchup’s shelf life decreases drastically when opened. When it is stored
in a refrigerator, it can last for three to six months; two to six months when kept in
a pantry; and one to two months when stored in room temperature.
For the maintenance of quality, the factory at which the ketchup will be
produced are sanitized, the floors are of concrete for flushing, and the pipes used
in conducting the pulp to the kitchens are porcelain-lined to prevent discoloration
from the iron and to ensure cleanliness. The tubes which carry the ketchup from
the cooking mixer to the receiving tank, finishing machine, and bottler are silver-
plated.
During the development of the product, the help of FDA and DOST will be
sought in order to adhere with the standards for food manufacturing.
The formula of processing banana ketchup will be based on the formula
used by the Department of Trade and Industry (DTI) which contains 40 calories
with 0 kcal from fats and is rich in Vitamin A which plays a critical role in vision
and skin health and Vitamin B6 which is important for brain development. The
percentage of the acceptability of banana ketchup formulated by DTI is 100% but
to be conservative, the proponents decided to decrease it to 80%.
33
4.2 Manufacturing Process
Washing Peeling Grinding and Mixing
Bottling, Packaging and Cooking

De-aeration
Labelling
Figure 4.1 Manufacturing Process
Before any other processes, the ripe bananas will be segregated and
washed in the washing area in order to remove unwanted stains and dirt. After
washing, the bananas will be individually peeled in the peeling area. The peeled
bananas will be put into the cantilevered v-blender for grinding and mixing of
ingredients. After mixing all the ingredients, the mixture will be transferred to the
cooking mixer where it will be cooked. Once cooked, the banana ketchup will be
transferred to finishing area where it will be homogenized and sterilized before
being transferred to the packaging and bottling area where they will be packaged
34
into pouch and sachets, bottles and gallons. After the banana ketchup are
packaged and bottled, they will be transferred for de-aeration in order to remove
oxygen content of the banana sauce that may cause spoilage. The de-aerated
banana sauce will be transferred to quality control section where they will be
checked individually whether they were manufactured, packed and bottled
according to the specifications of FDA and DOST.
4.3 Raw Materials
Ripe Cavendish banana and Lakatan are the raw materials for the banana
ketchup, which are the most available type of bananas in the province.
4.4 Sources of Raw Materials
The raw materials will be sourced out from Delinanas Development
Corporation in Tacurong City, Lapanday Foods Corporation in Lambayong and
Stanfilco in Maguindanao. In case of shortage of supply of bananas from the
contracted suppliers, bananas will be bought from small scale banana farmers
and nearby banana plantations in Bagumbayan and other places in Sultan
Kudarat.
35
4.5 Plant Location and Layout
The proposed business will be located at Barangay Kalandagan,
Tacurong, Sultan Kudarat. The plant and and office building will be erected in a
1.2 hectare land where there will be a garage for the delivery truck and
guardhouse. The office building will be separated from the factory for sanitary
purposes.
36
Figure 4.2 Plant Location
37
Figure 4.3 Plan Layout
38
Figure 4.4 Office Building Layout
39
Figure 4.5 Office Building Front Elevation
Figure 4.6 Office Building Rear Elevation
40
Figure 4.7 Office Building Right Side Elevation
Figure 4.8 Office Building Left Side Elevation
41
Figure 4.9 Office Building Floor Plan
42
Figure 5.10 Office Building Plumbing Layout
43
Figure 4.11 Office Building Lighting and Power Layout Plan
44
Figure 4.12 Factory Building Layout
The factory where the banana ketchup will be manufactured will be consist
of manufacturing area for washing, peeling, grinding and mixing, cooking, de-
aeration, bottling and packaging and storage area for bottles. There will also be a
warehouse for raw materials and finished products. A sprinkler system will be
installed and fire exit will be made in order to help in fire emergency situations.
45
Figure 4.13 Factory Building Floor Plan
46
Figure 4.14 Factory Building Front Elevation
Figure 4.15 Factory Building Rear Elevation
47
Figure 4.16 Factory Building Right Side Elevation
48
Figure 4.18 Factory Building Sprinkler Layout
49
4.6 Machinery and Equipment
sTable 4.1 Office Equipment

Office Equipment Quantity Unit Cost Total Cost Residual Value Useful Life Annual Depreciation
Air conditioner 3 29,500.00 88,500.00 8,850.00 10 7,965.00
Computer set 4 32,900.00 131,600.00 13,160.00 5 23,688.00
Telephone 3 3,400.00 10,200.00 1,020.00 5 1,836.00
Water dispenser 2 4,490.00 8,980.00 898.00 5 1,616.40
Electric fan 3 2,025.00 6,075.00 607.50 5 1,093.50
Exhaust fan (small) 2 1,100.00 2,200.00 220.00 5 396.00
Exhaust fan (industrial) 2 7,650.00 15,300.00 1,530.00 5 2,754.00
Printer with Scanner 4 6,965.00 27,860.00 2,786.00 5 5,014.80
CCTV Camera 5 3,960.00 19,800.00 1,980.00 5 3,564.00
Total 310,515.00 47,927.70
Office equipment are those assets used for operating functions of the
company.
Table 4.2 Machineries

Machinery Quantity Unit Cost Total Cost Residual Value Useful Life Annual Depreciation
Cantilevered v blender 1 94,500.00 94,500.00 9,450.00 15 5,670.00
Cooking mixer machine 1 91,800.00 91,800.00 9,180.00 15 5,508.00
Generator Set 1 125,800.00 125,800.00 12,580.00 15 7,548.00
Deaerator 1 76,500.00 76,500.00 7,650.00 15 4,590.00
Bottling machine 1 91,800.00 91,800.00 9,180.00 15 5,508.00
Packaging machine 1 30,600.00 30,600.00 3,060.00 15 1,836.00
Bottle Labelling Machine 1 16,320.00 16,320.00 1,632.00 15 979.20
Total 527,320.00 31,639.20
Machineries are those properties of the company necessary for the
manufacturing process and its business operations.
50
Table 4.3 Furniture and Fixtures
Furniture and Fixtures Quantity Unit Cost Total Cost Residual Value Useful Life Annual Depreciation
Long Table 4 15,000.00 60,000.00 - 5 12,000.00
Cabinet 5 3,450.00 17,250.00 - 5 3,450.00
Desk and chairs 4 5,450.00 21,800.00 - 5 4,360.00
Monoblock Chairs 10 500.00 5,000.00 - 5 1,000.00
Sala set 1 24,000.00 24,000.00 - 5 4,800.00
Total 128,050.00 - 25,610.00
Furniture and fixtures are used by staff and management for daily
transactions and for keeping necessary documents.
Table 4.4 Factory Equipment

Factory Equipment Quantity Unit Cost Total Cost Residual Value Useful Life Annual Depreciation
Knives 10 540.00 5,400.00 - 5 1,080.00
Large mixing tubs 4 663.00 2,652.00 - 5 530.40
Weighing scale 2 15,000.00 30,000.00 - 5 6,000.00
Total 38,052.00 7,610.40
Factory equipment are those small scale assets that are used for the
manufacturing process.
4.7 Utility
Utilities are those needed for company operations for communication,
electricity, water and fuel.
Table 4.5 Utilities

Monthly Total Consumption
Description Installation Total Cost
Consumption (Annually)
Electricity- Factory P 40,000.00 P 480,000.00 P 9,000.00 P 489,000.00
Electricity- Office P 10, 000.00 P 120, 000.00 P 9, 000.00 P 129,000.00
Water-Factory P 12,000.00 P 144,000.00 P 8,500.00 P 152,500.00
Water-Office P 2,000.00 P 24, 000.00 P 8,500.00 P 32, 500.00
Communication P 3,000.00 P 36,000.00 P 2,000.00 P 38,000.00
LPG P 105,000.00 P 105, 000.00 P 105, 000.00
Fuel P 15,000.00 P 180,000.00 P 180,000.00
Total P 1, 126, 000.00
Source: Sukelco, Tacurong, Water District Tacurong, PLDT website
51
4.8 Waste Disposal
The banana peelings are not included in processing banana ketchup.
These will be separated from banana flesh. The waste can be made as banana
vinegar because of its bitter and sour flavor with an underlying sugar taste or
making it an organic fertilizer through decomposition and drying. The alternative
of making banana vinegar is a good choice. However, this may cause additional
amount for the equipment to be used and the existing suppliers of banana
vinegar, especially in the area of President Quirino have surplus which indicates
that the supply for banana vinegar is greater than the demand for it and there are
no more market gap. Aside from that, there are municipalities in Sultan Kudarat
that are producers of sugarcane and coconut vinegar that are more palatable
than banana vinegar which has a touch of bitter taste.
The alternative of making organic fertilizer with the use of banana peelings
and selling it to organic farmers will be more cost-efficient because banana
peelings can be made as dry potassium or compost organic fertilizer without the
use of much equipment. On the vacant spaces at the outside the factory but
within the business premises, banana peelings can be dried during sunny days.
During rainy seasons, a compost pit may be made for the decomposition of
banana peelings.
The process of making organic fertilizers outside the factory will not affect
the manufacturing process and quality of banana ketchup. Aside from compost
pits are covered, dried banana peels are not foul-smelling. The compost pits will
also be located at the back of the office building which is far from the factory
52
facilities, thus bacteria from compost will not affect the quality of the banana
ketchup produced.
Aside from being able to efficiently use the wastes, those alternatives are
eco-friendly. Compost will be sold to organic farmers for P8.00 per kilogram while
dry potassium fertilizer will be sold for P15.00 per kilogram.
53
Chapter V
FINANCIAL ASPECT
5.1 Total Project Cost
Table 5.1 Total Project Cost and Source of Fund

Description Amount (in Php)
Land Acquisition 600,000.00
Building 5,085,269.27
Factory Equipment Acquisition 38,052.00
Machinery and Equipment Acquisition 527,320.00
Transportation Equipment Acquisition 1,525,000.00
Office Equipment Acquisition 310,515.00
Furniture and Fixture Acquisition 128,050.00
Working Capital 1,054,645.00
Contingency (5%) 463,442.56
Total 9,732,293.83
Source of Fund
Description Percentage Amount (in Php)
Equity 59% 5,732,293.83
Liability 41% 4,000,000.00
Total 100% 9,732,293.83
For the Breakdown of Working Capital, see Schedule 4.
5.2 Summary of Basic Financial Assumptions
1. Assumption on Capital
a. The project cost is assumed to be; 59% equity and 41%.
b. The loan will be obtained through Land Bank of the Philippines with a 5-
year term and 8% simple annual interest payable annually.
54
2. Assumption on Sales
a. It is assumed that the market share is in metric tons.
b. It is assumed that selling price for wholesalers will be 2% less than the
selling price for retailers.
c. It is assumed that selling price will increase by 5% annually.
d. The market share is assumed to be the plant's capacity to produce during
the year.
e. It is assumed that sales to retailers and wholesalers will be 30% and 70%
of total sales respectively.
f. Sales discount will be availed by 50% of total sales.
g. Sales discount is 2% of total sales.
h. Sales return is 2% of total sales.
i. Other income includes:
Banana peels: 60% compost and 40% dry potassium fertilizer. Compost is
₱8.00 per kilo and dry potassium fertilizer is ₱15.00 price per kilo. In every
production day, 25 kilograms of banana peelings will be removed. There will
be 250 production days in a year.
j. Allowance for doubtful accounts is 5% of Accounts Receivable.
k. Bad Debts expense is 5% of credit sales.
l. Credit Sales and Purchases is 30% of total sales.
3. Cost of Sales Assumptions
a. Direct Materials will increase by 2 annually.
55
b. Work-in-process, ending is 10% of total goods put into process.
c. Finished Goods, ending is 20% of total goods available for sale.
d. Packaging price will increase by 3% on the second and third year and
5% on the fourth and fifth year.
e. Increase in labor rate is 5% annually.
f. Repairs and Maintenance is estimated at 5% of acquisition cost of
asset.
4. Selling and Administrative Expense Assumption
a. Expenses are expected to increase by 2% annually.
b. Promotional Expenses will only be on the first year of operations.
5. Profits and Withdrawals
a. Profits and losses are deemed equal and withdrawals are expected to be
0% of net income annually for the first five years.
5.3 Projected Financial Statements
5.3.1 Projected Statement of Financial Position
The Total Assets of the Lami-a Banana Ketchup Processing is
composed of the current and non-currents assets. The current asset of the
entity is composed of the cash in bank, ₱751,398.48 in the first year of
operation 2018; ₱ 1,331,420.26 in 2019; ₱2,536,602.76 in 2020; ₱
4,168,913.86 in 2021; ₱ 6,222,490.77 at the end of 2022 (see Schedule
56
17); net accounts receivable, ₱ 2,503,128.87 in 2018; ₱ 2,685,016.88 in
2019; ₱2,884,791.75 in 2020; ₱ 3,103,885.88 in 2021; ₱ 3,344,238.86 in
2022 (see Schedule 37); inventory, ₱ 1,281,226.07 in 2018; ₱
1,616,808.90 in 2019; ₱ 1,734,052.25 in 2020; ₱1,817,853.27 in 2021; ₱
1,898,640.73 in 2022 (see Schedule 13).
The noncurrent assets of the entity is the Property Plant and
Equipment, composed of the furniture and fixtures, Office Equipment,
Factory Equipment, Transportation Equipment, Land, and Office and
Factory Building. The total amount of Property, Plant and Equipment
amounted to ₱ 7,847,190.35 in 2018; ₱ 7,480,174.44 in 2019; ₱
7,113,158.52 in 2020; ₱ 6,746,142.60 in 2021; ₱ 6,379,126.69 in 2022
(see Schedule 6, 7, 8 and 9).
The Salvage Value of the Office and Factory Building is 20% of the
cost while in other Property, Plant and Equipment is 10% of the cost,
using straight line, as the method of depreciation over the useful life of the
Assets (see Schedule 6, 7, 8 and 9).
The only liability of the entity is loan acquired payable in 5 years,
with 8% interest payable annually. The partners will not make withdrawals
until the loan is paid. The Partners’ total Equity in the year 2018 amounted
to ₱ 7,715,381.54; ₱ 9,426,441.55 in 2019; ₱ 11,348,572.92 in 2020; ₱
13,622,370.03 in 2021; ₱ 16,309,189.84 in 2022 (see Schedule 18).
57
5.3.2 Projected Statement of Financial Performance
The Sales of the Lami-a Banana Ketchup Processing in 2018,
amounted to ₱8,782,908.31; ₱ 9,421,111.87 in 2019; ₱ 10,122,076.30 in
2020; ₱ 10,890,827.65 in 2021; ₱ 11,734,171.46 in 2022 (see Schedule
12). The cost of sales is ₱3,294,581.33 in 2018; ₱ 4,392,835.83 in 2019;
₱ 4,772,765.55 in 2020; ₱ 5,015,391.65 in the year 2021, ₱ 5,240,461.29
for the year ending 2022 (see Schedule 13).
The general and administrative expenses, which comprise of the
rent sfor display outlet utilities, advertising, promotional salaries, employee
benefits, office supplies, bad debts, permits and licenses, depreciation
expense and repair and maintenance expense attributable to the
operation of the business is amounted to ₱ 2,335,344.53 in 2018;
₱2,327,904.61 in 2019; ₱ 2,411,408.84 in 2020; ₱2,499,154.41 in 2021; ₱
2,591,396.15 at the end of the year 2022. The finance cost in 2018 is
amounted to ₱ 320,000.00; ₱256,000.00 in 2019; ₱ 192,000.00 in 2020;
₱128,000.00 in 2021; ₱ 64,000.00 in 2022 (see Schedule 14).
The income tax expense is computed as 30% of income after the
deduction of general and administrative expenses and finance cost, ₱
849,894.73 in the year 2018; ₱733,311.43 in 2019; ₱ 823,770.59 in 2020;
₱ 974,484.48 in 2021; ₱1,151,494.20 in 2022 (see Schedule 16).
58
The net income after tax is amounted to ₱ 1,983,087.71 in 2018; ₱
1,711,060.00 in 2019, ₱ 1,922,131.38 in 2020; ₱ 2,273,797.11 in 2021;
and ₱ 2,686,819.81 in the year 2022 (see Schedule 15).
5.3.3 Projected Statement of Cash Flows
The net cash inflows of operating activities in the first of operation is
amounted to ₱33,310.92 in 2018; ₱ 1,380,021.78 in 2019; ₱ 2,005,182.50
in 2020; ₱ 2,432,311.10 in 2021; and ₱ 2,853,576.91 in 2022. The cash
used or outflow in investing activities is caused by the acquisition of
Property, Plant and Equipment in the year 2018 which amounts to
₱8,214,206.27.
The net cash inflows in Financing Activities in the year 2018 is
amounted to ₱8,932,293.83 and in year 2019-2022 is the loan
prepayments amounted to ₱ 800,000 each year. The total net cash inflows
of the Lami-a Banana Ketchup Processing is amounted to ₱751,398.48 in
2018; ₱ 580,021.78 in 2019; ₱ 1,205,182.50 in 2020; ₱ 1,632,311.10 in
2021; ₱ 2,053,576.91 at the end of 2022.
The cash balance at the end of the five years operations 2017,
2018, 2019, 2020 and 2021 are as follows; ₱751,398.48, ₱1,331,420.26,
₱2,536,602.76, ₱4,168,913.86 and ₱6,222,490.77 (see Schedule 24).
5.3.4 Projected Statement of Changes in Equity
The total initial investment of partners of the Lami-a Banana
Ketchup Processing in 2018 is amounted to ₱5,732,293.83 and increased
59
by the net income after tax earned in 2018, ₱1,983,087.71. The net
income for the year 2019, 2020, 2021 and 2022 are: ₱1,711,060.00,
₱1,922,131.38, ₱ 2,273,797.11 and ₱ 2,686,819.81 to which withdrawals
are 0% of annual net income. The Partners’ Equity in 2018 is ₱
7,715,381.54, ₱9,426,441.55 in 2019, ₱11,348,572.92 in 2020,
₱13,622,370.03 in 2021 and ₱16,309,189.84 in 2022 (see Schedule #4).
5.4 Analysis of Financial Statements

Ratios are calculated from the financial statements to provide users
relevant information about the firm’s liquidity, solvency and profitability.
5.4.1. Analysis of Liquidity
Liquidity ratios are used to determine a company’s ability to meet
its short-term debt obligations. Investors often take a close look at
liquidity ratios when performing fundamental analysis on a firm. Since a
company that is consistently having trouble meeting its short-term debt is
at a higher risk of bankruptcy, liquidity ratios are a good measure of
whether a company will be able to comfortably continue as a going
concern.
A. Working Capital
Working Capital measures the portion of capital that is used
in the day-to-day business operations, calculated as the current
assets minus the current liabilities. On the first year of operations,
₱3,068,191.19 is the working capital, in 2019 ₱4,346,267.11,
60
₱5,835,414.40 in 2020, ₱ 7,676,227.43 in 2021 and ₱9,930,063.16
in 2022. This shows that the company has the ability to pay its
currently maturing debts (see Schedule 39).
B. Current ratio
Current ratio helps investors and creditors understand the
liquidity of the company and easily that company can pay off its
obligations and generally, having a high current ratio is favorable.
The current ratio of the company signifies that it has current assets
which have an average of 5.36 times its current liabilities (refer to
Schedule 19).
C. Quick Asset or Acid Test Ratio
Quick Asset or Acid Test Ratio signifies the company’s
ability to pay its short-term liabilities with only its quick assets.
Quick assets are current assets that can be converted to cash
within 90 days or in the short-term. The quick ratio determines that
for every peso of its current liabilities, the company has an average
of 4.16 for five years (see Schedule 19).
5.4.2. Analysis of Solvency
A. Debt to Equity Ratio
The debt to equity ratio is a solvency ratio that compares a
company's total debt to total equity. Higher debt to equity ratio
means that the company utilizes more credit financing than
61
investment financing and usually it entails higher risk when there is
a high debt to equity ratio. The company has an average of .30
debt to equity ratio which means that it is more dependent on the
partners' investments rather than its financial loans (see Schedule
20).
B. Equity Ratio
The equity ratio highlights the importance of a solvent and
sustainable business because it shows how much of the total
company assets are owned outright by the investors. In other
words, after all of the liabilities are paid off, the investors will end up
with the remaining assets. An equity ratio of .78 means that the
partners of the company have 78% claims over its total assets (see
Schedule 20).
C. Debt Ratio
Debt ratio is a solvency ratio that measures a firm's total
liabilities as a percentage of its total assets. In a sense, the debt
ratio shows a company's ability to pay off its liabilities with its
assets. Having a debt ratio of 0.22 means that the company must
sell 22% of its total assets to pay its current and non-current
obligations (see Schedule 20).
5.4.3. Analysis of Profitability
A. Gross Margin Ratio
62
Gross margin ratio is a profitability ratio that compares the
gross margin of a business to the net sales. This ratio measures
how profitable a company sells its inventory or finished goods. In
other words, the gross profit ratio is essentially the percentage
mark-up on inventory from its cost. This means that out of the
company's sales, an average of 56% can be earned from the sale
of banana catsup and allotted to pay for its operating and financing
cost (see Schedule 21).
B. Profit Margin Ratio
The profit margin ratio directly measures what percentage of
sales is made up of net income. In other words, it measures how
much profits are produced at a certain level of sales. The company
has an increasing trend of profit ratio, signifying that it efficiently
manages it operations and has an average of 21% (see Schedule
21).
C. Return on Assets
The return on assets ratio is a profitability ratio that
measures the net income produced by total assets by comparing
net income to the average total assets. In other words, the return
on assets ratio or ROA measures how efficiently a company can
manage its assets to produce profits during a period. This means
that for every peso the company has invested, a 13% income is
produced (see Schedule 21).
63
D. Return on Equity
The return on equity ratio or ROE is a profitability ratio that
measures the ability of a business to generate profits from the
owner's investment in the company. In other words, the return on
equity ratio shows how much profit each peso of the partner's
contribution is earned. Based on the analysis of the company's
ROE, an average of .27 pesos is earned for every peso invested by
the partner (see Schedule 21).
5.4.4. Other Performance Analysis
A. Times Interest is Earned Ratio
This ratio indicates how many times the company can pay
the interest from the loans payable with its income before tax, that's
why evidently the larger ratios are considered more favorable. In
this case, the company has an average of 24.61 times higher than
its interest expense which denotes that it can easily pay its interest
with its operating income (see Schedule 19).
64
Chapter VI
SOCIO-ECONOMIC ASPECT
From the start, banana ketchup was a hit. Not only was it relatively easy to
make, but the addition of banana slices gave the sauce a sweeter taste,
something that all Filipinos with a sweet tooth enjoy ketchup all the more. And
unlike the Americans who mostly put ketchup on burgers and fries, Filipinos
came to smother just about everything from hot dogs to tortang talong or
eggplant omelet in banana ketchup.
The Lami-A banana ketchup will be help in providing the need to supply
the demand for ketchup. In the firm’s production, the business will help the
community by producing employment, helping the poor people in earning small,
yet helpful, income for their basic needs. At first, employee needed is limited but
as the production grows, labor force necessarily increases. It can help the
banana industries dispose the bananas that are not qualified for export by buying
those and processing them in banana catsup. It will not only help in the economic
status of Tacurong City but also the whole province of Sultan Kudarat by
providing jobs.
Businesses pay a significant portion of all taxes in the Philippines,
including income tax, property tax and employment tax. Having more businesses
in the local economy can boost tax income for local governments, bringing in
more money to repair roads, develop schools and improve public services. By
establishing Lami-A Banana Ketchup Processing, the partners and employees
65
pay those taxes mentioned above which will the help the local and the national
government.
Chapter VII
CONCLUSION AND RECOMMENDATION
Marketing Aspect
The market gap for banana ketchup is 40% to which 20% will be supplied by
Lami-a Banana Ketchup Processing. The market share is based on the company’s
capacity to produce. The recipe to be used is from the Department of Trade and Industry
which has and 80% acceptability.
Technical Aspect
The location of the plant and the display center in Tacurong City is accessible to
target customers. The factory building is suited for food preparation wherein sanitation is
prioritized. The products will be quality-checked before bringing it out to the market.
Socio-Economic Aspect
The proposed business will bring about job opportunities especially in the area of
business. It will be able to help the government by paying taxes.
Financial Aspect
In its first five years of operation, the business has positive working capital and
enough current assets to finance its maturing debt. An average of 22% of the sales is
the net income. The current ratio of the company signifies that it has current
66
assets which have an average of 5.36 times its current liabilities. The company
has an average of .30 debt to equity ratio which means that it is more dependent
on the partners' investments rather than its financial loans
Conclusion and Recommendation
Based on the aspects that have been presented, the proponents conclude
that Lami-a Banana Ketchup Processing is viable supported by its feasibility
study.
It is being recommended by the proponents to invest in this endeavor. It is
further recommended that auxiliary researches be made to substantiate its
feasibility.
67
BIBLIOGRAPHY
A. BOOKS
BRIGHAM, EUGENE F. (2012) Financial Management: Theory and
Application
CABRERA, MARIA ELENITA B. (2013) Management Accounting
WILF, MARK (2012) Minnesota Vikings
B. FEASIBILITY STUDY
DEPARTMENT OF TRADE AND INDUSTRY (2017) A Feasibility Study
on the Production of Home-Made Banana Ketchup
DANTE, MAGANDINGAN AND SAROSAS (2017) A Feasibility Study on
SMD Cassava Granules Processing
C. WEBSITES
EAT BY DATE (2014) Retrieved Nov. 20, 2017 from
http://www.eatbydate.com/ other/condiments/ketchup-shelf-life-expiration-
date/
THE LONGEST WAY HOME (2015) Retrieved Nov. 20, 2017 from
http://www.th elongestwayhome.com/blog/food-around-the-
world/filipino/food-from-the-philippin es-banana-ketchup/
68
APPENDICES
69
70
Appendix 2
Republic of the Philippines

SULTAN KUDARAT STATE UNIVERSITY
College of Business Administration
Tacurong Campus, Tacurong City
NOMINATION OF GUIDANCE COMMITTEE
We, RUTH D. AGUILAR, JOHNEDEL F. BULOSAN, JASPER D. GREGORIO,

and CHARLENE A. LOYOLA, students of SULTAN KUDARAT STATE
UNIVERSITY hereby nominated the following as adviser and members of our
feasibility study advisory committee.
LOVINA P. COGOLLO,MMBM
Adviser
MANOLO B. MERCADO, MBA MARIBETH P. SALABAN,

MBA
Member Member
We, hereby certify our willingness to act as adviser / members of the advisory
committee.
Adviser

MBA
Member Member
Endorsed:
ANNIE D. FRANCISCO, MS MA. JEANELLE B. ARGONZA, PH.D.

Campus Research Coordinator College Dean
_______________ _______________
Date signed Date Signed
Approved:
REYNALDO H. DALAYAP JR., Ph.D.

Campus Director
_____________________
71
Date Signed
72
Appendix 3-A

APPLICATION FOR FEASIBILITY STUDY OUTLINE DEFENSE
Name: AGUILAR, RUTH D. Course: BS

Accountancy
I have the honor to apply for outline defense for my study entitled:
“ESTABLISHMENT OF "LAMI-A BANANA KETCHUP PROCESSING”
Time: 11:00 AM
Date: March 30, 2017
Venue: Faculty Room I
LOVINA P. COGOLLO, MMBM

Adviser

MBA
Member Member
Endorsed:
ANNIE D FRANCISCO, MS MA. JEANELLE B. ARGONZA, PH.D.

_______________ _______________
Approved:

Campus Director
_____________________
73
Appendix 3-B
Date Signed

Name: BULOSAN, JOHNEDEL F. Course: BS Accountancy
Time: 11:00 AM

Adviser

MBA
Member Member
Endorsed:

_______________ _______________
Approved:

Campus Director
_____________________
Date Signed
74
75
Appendix 3-C

Name: GREGORIO, JASPER D. Course: BS Accountancy
Time: 11:00 AM

Adviser

MBA
Member Member
Endorsed:

_______________ _______________
Approved:

Campus Director
_____________________
Date Signed
76
Appendix 3-D

Name: LOYOLA, CHARLENE A. Course: BS Accountancy
Time: 11:00 AM

Adviser

MBA
Member Member
Endorsed:

_______________ _______________
Approved:

Campus Director
_____________________
Date Signed
77
Appendix 4

Tacurong City Campus
City of Tacurong
APPROVAL OF FEASIBILITY STUDY OUTLINE
Name: AGUILAR, RUTH D. Course: BS Accountancy

BULOSAN, JOHNEDEL F. Course: BS Accountancy
GREGORIO, JASPER D. Course: BS Accountancy
LOYOLA, CHARLENE A. Course: BS Accountancy
Thesis Title: “ESTABLISHMENT OF LAMI-A BANANA KETCHUP

PROCESSING”.
APPROVED BY THE ADVISORY EXAMINING COMMITTEE
Name Signature Date

Adviser
MANOLO B. MERCADO, MBA
Member
MARIBETH SALABAN
Member
JOHANNA LYN P. MALICAD, CPA
Financial Analyst
MARJORIE P. LUMOGDANG, MAT-ENG
English Critic
Endorsed: Recommending Approval:

Approved:

Campus Director
78
Appendix 5

____________________
Date
CERTIFICATION OF STATISTICIAN
This is to certify that the Feasibility Study entitled ESTABLISHMENT OF
“LAMI-A BANANA KETCHUP PROCESSING, AT BARANGAY
KALANDAGAN, TACURONG CITY, SULTAN KUDARAT authored by RUTH D.
AGUILAR, JOHNEDEL F. BULOSAN, JASPER D. GREGORIO, and
CHARLENE A. LOYOLA was evaluated/checked the statistical analysis and
interpretation by the undersigned.
Issued on this day of 2018.
SUSIE
DAZA
Statistician
Note: This certification should be submitted to the Research Chairman prior to
the approval/reproduction of this manuscript.
79
Appendix 6

____________________
Date
CERTIFICATION OF ENGLISH CRITIC
This is to certify that the Feasibility Study entitled ESTABLISHMENT OF
“LAMI-A BANANA KETCHUP PROCESSING”, AT BARANGAY
KALANDAGAN, TACURONG CITY, SULTAN KUDARAT authored by RUTH D.
AGUILAR, JOHNEDEL F. BULOSAN, JASPER D. GREGORIO, and
CHARLENE A. LOYOLA was evaluated/checked the grammar by the
undersigned.
Issued on this day of 2018
MARJORIE P. LUMOGDANG, MAT-

ENG English Critic
80
81
Appendix 7

____________________
Date
CERTIFICATION OF FINANCIAL ANALYST
This is to certify that the Feasibility Study entitled ESTABLISHMENT OF “
LAMI-A BANANA KETCHUP PROCESSING”, AT BARANGAY
KALANDAGAN, TACURONG, SULTAN KUDARAT authored by RUTH D.
AGUILAR, JOHNEDEL F. BULOSAN, JASPER D. GREGORIO and
CHARLENE A. LOYOLA was evaluated/checked the financial aspect by the
undersigned.
Issued on this day of 2018.
JOHANNA LYN P. MALICAD,

CPA Financial Analyst
82
83
Appendix 8-A

APPLICATION FOR FS FINAL DEFENSE EXAMINATION
Name: Ruth D. Aguilar

Degree/Major: BS Accountancy
Title: A FEASIBILITY STUDY ON THE ESTABLISHMENT OF “LAMI-A
BANANA KETCHUP PROCESSING
Please write X whether: (X) First ( ) Second ( ) Third
Date: October 27, 2017 Time: 3:00 PM Venue: CS LAB I
Advisory Committee
Name Signature Date
Adviser
Member
MARIBETH P. SALABAN
Member
Financial Analyst
English Critic
ANNIE D. FRANCISCO, MS MA. JEANELLE B. ARGONZA,

PH.D
Approved:
REYNALDO H. DALAYAP, JR., Ph.D.

Campus Director
84
85
Appendix 8-B

Name: Johnedel F. Bulosan

Advisory Committee
Name Signature Date
Adviser
Member
MARIBETH SALABAN
Member
Financial Analyst
English Critic
ANNIE D. FRANCISCO, MS MA. JEANELLE B. ARGONZA, PH.D

Approved:

Campus Director
86
Appendix 8-C

Name: Jasper D. Gregorio

Advisory Committee
Name Signature Date
Adviser
Member
MARIBETH SALABAN
Member
Financial Analyst
English Critic
ANNIE D. FRANCISCO, MS MA. JEANELLE B. ARGONZA,

PH.D
Approved:

Campus Director
87
Appendix 8-D

Name: Charlene A. Loyola

Title: Establishment of “Lami-a Banana Ketchup Processing”
Please write x whether: ( ) First ( ) Second ( ) Third
Date: Time: Venue: SKSU Tacurong Campus
Advisory Committee
Name Signature Date
Adviser
MANOLO B. MERADO
Member
MARIBETH SALABAN
Member
Financial Analyst
English Critic

Approved:

Campus Director
88
89
Appendix 9

Report on the Result of Final Defense
(Action taken by the Advisory Committee. Please indicate whether passed or

failed)
Signature Date Remarks
Approved:

Campus Director
90
Appendix 10

APPLICATION FOR FEASIBILITY STUDY FINAL PRINTING & BINDING
This is to certify that the Feasibility Study entitled “A PROJECT

FEASIBILITY ON ESTABLISHIMENT OF LAMI-A BANANA KETCHUP
PROCESSING” AT BARANGAY KALANDAGAN, TACURONG CITY, SULTAN
KUDARAT” was thoroughly reviewed by the guidance committee and
recommended for final printing and binding.
MARJORIE P. LUMOGDANG, MAT-ENG JOHANNA LYN P. MALICAD,

CPA
English Critic Financial Analyst
_________________ _________________
Date Signed Date Signed
MANOLO B. MERCADO, MBA MARIBETH

SALABAN
Member Member
_________________
_________________
Adviser
____________________
Date Signed
Recommended Approval:

________________ _________________
Approved:
REYNALDO H. DALAYAP, JR., Ph.D
91
Campus Director
Appendix 11 _________________
Date Signed
Land Sale Contract
The Researcher of the business agrees to purchase from BALACHIKAN

LEBPAS, the land located at BARANGAY KALANDAGAN, TACURONG CITY,
SULTAN KUDARAT and it has an area of 1.9 hectares. The owner agrees to sell
the land when the proposed business is being pursued.
The following terms and conditions apply to this contract:

1. Price: the buyers agree to purchase the land describe above, paying a
total purchase price of 1,600,000. The buyer will pay the owner of the land
in full amount.
2. Title: when purchase price has been paid. Buyer agrees to provide seller
with the title. The buyer agrees to remove seller from any liability with
regard to `issues that arise after the date of the title transfer.
3. Taxes: All taxes on the land shall be the responsibility of buyer as of the
date of this contract.
The undersigned, agree to this contract and all its terms.
BALACHIKAN LEBPAS
Seller
Date signed:
Lami-a Banana Ketchup Processing

Proposed Business
92

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Chapter I

are primarily composed of carbs, and contain decent amounts of several

digestive health when consumed regularly as a part of a healthy lifestyle. Many

Food in the Philippines is evolving. Under pressure to satisfy taste buds,

popular. Banana ketchup is a staple Filipino dipping sauce. It is a Filipino

ingredient in Filipino-style spaghetti. It is probably more popular and more

material, the Cavendish banana.

1.1. The Need

need of banana plantations in neighboring towns to dispose Cavendish bananas

that are not qualified for export.

Generally, the study aims to determine the feasibility and viability of

establishing Lami-a Banana Sauce in Kalandagan, Tacurong City.

Specifically, the study seeks to achieve the following:

1.2.1. Management Aspect

a. Identify the number of employees needed for the operation of this

project and their respective positions;

b. Determine the amount of wages the employees must receive; and

c. Identify the employees’ benefits that must be given.

1.2.2. Marketing Aspect

a. Know the historical demand and supply of Banana Sauce;

b. Know the projected demand and supply of Banana Sauce;

c. Determine the market gap;

d. Forecast the sales for the next five years; and

e. Determine the market share.

1.2.3. Technical Aspect

a. Determine the best location for the proposed study; and

b. Be acquainted with the equipment needed and the production process.

1.2.4. Financial Aspect

a. Determine the liquidity, solvency, and profitability of Lami-a Banana

1.2.5. Socio-Economic Aspect

a. Determine the social benefits that can be contributed by the project.

considering various opportunities that will come up after graduation. The

invest on it in the future.

1.4 Scope and Delimitation

This study is limited to processing of Cavendish bananas from raw to

Ketchup will process bananas from mashing and slicing to flavouring,

cooking,and packaging and bottling.

Data Gathering Instrument

sources in books, magazines, and the internet, interviews and survey

questionnaires. The survey questionnaire was formulated to gather data on the

proponents with the help of the adviser.

Data Gathering Procedure

Upon approval of the adviser and campus director, the questionnaires

were given to randomly selected respondents in stratified areas in Sultan

Kudarat. Inquiries were made from Department of Science and Technology,

Department of Trade and Industry, and Department of Labor and Employment.

Simple random sampling was used to determine the number where a

group of subjects called sample. Business sector was selected to participate in

margin of error of 0.10. There are 94 wholesale and retail establishments in

Sultan Kudarat which results to 49 samples (refer to Schedule 42).

There are four methods available namely; Arithmetic Straight line,

computing the projections on supply and demand of banana sauce.

History of Banana Ketchup / Banana Catsup

price difference. A common name for banana or tomato ketchup is “Catsup”.

Health Benefits of Bananas

Heart disease is the world’s most common cause of premature death.

heart-healthy mineral. According to a large analysis of many studies, daily

consumption of 1.3 to 1.4 grams of potassium is linked to a 26% lower risk of

In addition, bananas contain antioxidant flavonoids that have also been

fatty acid that promotes gut health.

On a different note, people sometimes seem to consider banana

bananas may actually have an opposite effect, at least in some people.