JRN TOMATO SAUCE AND PASTE

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 Located in Lubaga

P.O. BOX 7654, Kampala, Uganda

Website: www.jrntomatosauce-paste.co.ug

Email: tomatosaucepaste@googlemail.com

Tell: +256786779581

BUSINESS OWNERS

TURYAMUREEBA JULIUS BABAU/18D/U/M1311

AMUSE RASUL BPHM/18E/FS/A0128

MUYINGO NOAH BABA/18E/U/A0129

APRIL , 2020

BUSINESS LOCATION

JRN TOMATO SAUCE AND PASTE

Located in Lubaga

P.O. BOX 7654, Kampala, Uganda

Website: www.jrntomatosauce-paste.co.ug

Email: tomatosaucepaste@googlemail.com

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FOUNDERS

TURYAMUREEBA JULIUS

Tel: +256772762238

Email. juliusgodcares@gmail.com

AMUSE RASUL

Tel: +256775991118

Email: amuserasul01@gmail.com

Tel: +256703014422

Email: ngomuo@gmail.com

INTRODUCTORY PAGE
Business description

JRN Tomato Sauce and Paste Company Ltd is a limited company by shares that will initially be
run by three shareholders. The company will operate under food industry since it deals in tomato
sauce and paste is usually used commonly on snacks and some food staffs and therefore will
follow laws and regulations under the ministry. JRN Tomato Sauce and Paste Company Ltd will
manufacture tomato sauce and paste which is product from tomatoes and commonly used in
hostels and restaurants in their food flavors especially snacks like chips, sausages, chaps and
other food staffs. The company therefore will manufacture quality tomato sauce and paste
products and sold at fair and competitive price which will satisfy and meet our customers’
demands.

Financial highlight

The company requires about Ushs. 20,000, 000/= to facilitate the commencement of the
business. This capital will involve Ushs.5, 000,000/= loan from bank (25% of the total capital).
The owners (three) will contribute the 75% of the starting Capital on an equal basis meaning
every member to contribute 25% (5,000,000/=).

Statement of confidentiality

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This plan is confidential and is a property of the owners; Turyamureeba Julius, Amuse Rasul and
Muyingo Noah. It is authorized only for use by the person to whom it is transmitted and any
reproduction of any of its contents without the priority of consent of the company is prohibited.

TABLE OF CONTENTS
INTRODUCTORY PAGE.............................................................................................................iii
1.0EXECUTIVE SUMMARY........................................................................................................1
1.1 Introduction (JRNTOMATO SAUCE AND PASTE)...............................................................1
Vision & Mission.............................................................................................................................1
1.2 Financial Requirement...............................................................................................................2
1.3 Market Aspects..........................................................................................................................3
1.4 Competition Aspects..................................................................................................................3
1.5 Management Aspect..................................................................................................................4
Swot Analysis..................................................................................................................................4
2. 0 INDUSTRY ANALYSIS.........................................................................................................4
3.0 BUSINESS DESCRIPTION.....................................................................................................8
3.1 Introduction................................................................................................................................8
4.0 MARKETING OVERVIEW:..................................................................................................10
4.1 Current Market Situation:........................................................................................................10
4.2 SWOT analysis:.......................................................................................................................10
4.3 Marketing Strategy..................................................................................................................12
4.4.1 Segmentation:.......................................................................................................................12
4.4.2 Target Market:......................................................................................................................13

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4.5 Market Positioning...................................................................................................................13
4.6. Promotion...............................................................................................................................13
4.7. Advertising.............................................................................................................................14
4.8 Marketing Research.................................................................................................................14
5.0 PRODUCTION PLAN............................................................................................................15
6.0. MANAGEMENT PLAN........................................................................................................17
6.1. Personnel Plan........................................................................................................................17
6.2. Composition............................................................................................................................17
6.3. Organizational structure..........................................................................................................18
7.0 ASSESSMENT OF RISKS.....................................................................................................19
8.0 FINANCIAL OVERVIEW.....................................................................................................20
8.1 Break even analysis.................................................................................................................20
8.2 Projected income statement for the first three years...............................................................22
8.3 Projected balance sheet as at the end of each of the three years..............................................22
9.0
APPENDIX…………………………………………………………………………………………
………………………………..........24
9.1 projected cash flow..................................................................................................................23

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1.0EXECUTIVE SUMMARY
1.1 INTRODUCTION (JRNTOMATO SAUCE AND PASTE)

Tomato sauce and paste in an improved product from tomatoes. Tomatoes are used for various
culinary preparations and are known to improve taste in sauce or salads. They are widely grown
in almost all the areas of Uganda. Therefore, they have a high demand throughout the year.
Tomatoes are one of those foods that actually increase in its nutrient-load when cooked, and
tomatoes in their cooked form are powerful anti-oxidant and anti-cancer foods. Like most
(naturally) brightly-colored foods, tomatoes are high in lycopene, a carotenoid, which increases
immune response, prevents heart disease, helps clear free radicals from the blood, and is
essential for proper cell-to-cell communication. Since cancer is essentially long-term
miscommunication between cells as they reproduce, this is the function that purportedly makes
lycopene an anti-cancer substance. Tomatoes are also high in vitamins – Vitamins A, C, and K in
this case – as well as a whole plethora of minerals. It's important to eat them with a good quality
oil or animal fat, as the carotenoids are fat-soluble and can only be absorbed and used by the
body if there are sufficient sources of fat present.

Since tomatoes is one of the most perishable fruits and therefore very hard to preserve it for long,
JRN Tomato Sauce and Paste Company Ltd have come up with an idea to make tomato sauce
and paste which will help to preserve tomatoes with its importance as explained above.

Vision & Mission

Vision

Our Vision is to become the number one processor of high quality tomato sauce and paste that
match with the customer’s expectations in Uganda

Mission

To provide customers with the best value and quality tomato sauce and paste products that gives
satisfaction to our customers.

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1.2 Financial Requirement

The company requires about Ushs. 20,000, 000/= to facilitate the commencement of the
business. This capital will involve Ushs.5, 000,000/= loan from bank (25% of the total capital).
The owners (three) will contribute the 75% of the starting Capital on an equal basis meaning
every member to contribute 25% (5,000,000/=). The money will be used to purchase what is
required for the start of the business like leasing of land for the first ten years, furniture and
fittings, acquiring operating license, chemicals as well as procuring equipment used in the
process of tomato sauce and paste.

Production process

Tomato Paste

The process of making tomato paste involves selecting ripe tomatoes for preparation of tomato
products. The tomatoes are heated in the steam-jacked kettle until they soften, and then pressed
through a pulping machine to separate the juice from the seeds and skin. Tomato juice is
normally bottled or canned.

Tomato Sauce

The manufacture of tomato sauce involves concentration of the juice, addition of juice extracts,
salt and then boiling to attain 30oc35oc degrees of concentration. After adding vinegar, which
acts as a preservative, the tomato source is bottled for sale.

Business description (Briefly about our business idea)

JRN Tomato Sauce and Paste Company Ltd is a limited company by shares that will initially be
run by three shareholders. The company will operate under food industry since it deals in tomato
sauce and paste will usually used commonly on snacks and some food staffs and therefore will
follow laws and regulations under the ministry.

JRN Tomato Sauce and Paste Company Ltd will manufacture tomato sauce and paste which is
product from tomatoes and commonly used in hostels and restaurants in their food flavours
especially snacks like chips, sausages, chaps and other food staffs. The company therefore will
manufacture quality tomato sauce and paste products and sold at fair and competitive price
which will satisfy and meet our customers’ demands.

2
Competition Aspects

JRN Tomato Sauce and Paste Company Ltd we expect stiff competition from both the existing
companies producing tomato sauce and paste like MACDO Food Factory and Mac dough Foods
(U) Ltd and also from new entrants since the industry is growing every day. But we are strong
enough to cope up with any kind of competition as the company will make quality tomato sauce
and paste products at a fair price compared to our competitors after studying very well the
market. And also another advantage the company will have is that it will be run by skilled and
knowledgeable personnel who have business experience and therefore knows well how to market
compared to other competitors in the market.

1.3 Market Aspects

Since food industry is on rapid growth in Uganda especially around the city and other towns,
there is high demand of tomato sauce and paste as it used on snacks like chips. The market for
tomato sauce and paste is ready or available especially in restaurants, hotels and therefore, our
company will distribute its tomato sauce and paste products through different marketing channels
like supermarkets, wholesale, retail shops where our customer will be able to buy our tomato
sauce and paste products at a fair price.

Competition Aspects

There is no business without competition and therefore JRN Tomato Sauce and Paste Company
Ltd we expect stiff competition from both the existing companies producing tomato sauce and
paste like MACDO Food Factory and Mac dough Foods (U) Ltd and also from new entrants
since the industry is growing every day. But we are strong enough to cope up with any kind of
competition as the company will make quality tomato sauce and paste products at a fair price
compared to our competitors after studying very well the market. And also another advantage the
company will have is that it will be run by skilled and knowledgeable personnel who have
business experience and therefore knows well how to market compared to other competitors in
the market.

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1.5 Management aspect

The company will be run by well skilled personnel starting with its partners (Mr. Turyamureeba,
Mr. Amuse Rasul and Mr. Muyingo Noah) who have skills and knowledge about business (they
all have bachelor’s degrees in business administration) and it will employ other staffs who will
help in the operation of the businesses especially in technique areas like production process and
in other areas.

SWOT Analysis

The company’s strength will lie in management who are well equipped with managerial skills
that will help to smoothly run the company, the company will also in position to process quality
tomato sauce and paste products at a fair price. The company’s weakness will be as the company
will be new it may not capture the market in the first instance; there is also lack of enough capital
that may affect the company. Among the company’s opportunities is the ever growing food
industry that will provide market for the company’s products. And finally the company’s threats
will be the competition from other companies processing tomato sauce and paste.

2. 0 INDUSTRY ANALYSIS

Overview of the sector

Uganda is the number one vegetable fruit producing nation in Africa. The country is suitable and
has abundant potential to produce tomatoes and a host of other vegetables. The fertile soils and
conducive climate guarantee tomato production for the greater part of the year. Despite this great
production potential, the processing of fruits and vegetables is low and is mainly limited to
extraction of juice, drying, bottling and labeling.

Most fruits and vegetables can be produced organically in Uganda but maximum benefits and
guaranteed results can be realized if modest investments are put into the enterprise. This profile
presents a case for tomatoes farming and processing. It presents and analyses the viability and
profitability of an integrated enterprise of tomatoes produced on 500 hectare nucleus farm under
irrigation. It also presents the viability and profitability of a minimum of 2.8 million to 3.6

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million US dollars, excluding investments in the working capital and cash reserves of the
businesses, in the processing of fruits and vegetables.

Currently the demand for fruits and vegetables like tomatoes from Uganda has been moderate
and high for organic and value added products. However, most companies or producer
associations exporting fresh fruits and vegetables from Uganda are small to medium with little or
no investment capacity to scale up the production and take advantage of the market demand, and
hence have been unable to explore the export of value added products currently on demand in
Europe and other International markets. Most of the current exports have been in raw fruits and
vegetables and largely to the wholesale markets where competition is growing and prices going
down. Besides, access to financial credit to facilitate investment has been limited for such
companies; yet it requires some substantial capital to invest in appropriate infrastructure, if they
are to take advantage of the value added market for fruits and vegetables, which attracts high
demand and prices.

Currently, there are over 15 companies exporting fresh fruits and vegetables largely to the EU
and, to a less extent, to the COMESA region, although the latter is largely informal. On average,
the existing companies each exports 2 – 15 tons of fresh fruits per week, largely to the wholesale
markets in Europe.

Uganda’s competitiveness rests with soils, climate, irrigation opportunities, government policies
and labor factor prices. Uganda has unmatched comparative advantage for growing fruits and
vegetables due to its warm, less humid tropical climate, plentiful rainfall and vast opportunities
for irrigation. Soils of pH 5 to 6.5 are most ideal for the fruits (such as oranges, mangoes and
pineapples) and vast areas of this type obtain in Uganda. These soils are rare in the world.
Uganda's climate is summer all year round: moderate temperatures (15 -30ºC) throughout the
year with a bi-modal rainfall pattern. The soils have low levels of contamination due to
prolonged periods of minimal use of chemical fertilizers, pesticides and herbicides creating
natural quasi-organic conditions in most areas. The November to February harvest period in
Uganda coincides with the northern hemisphere winter – a period of peak demand for fresh fruits
and vegetables in Europe.

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Suitable Government owned land free of squatters, for commercial estate type production, is
available at Odina former citrus farm (950 hectares) and Labori former irrigation scheme (800
ha). Finally Government policy is highly supportive to fruit production as a strategic export. All
schemes put together provide a total of over 3000 hectares (Odino, Ongino, Labori, and
Mobuku). One additional point which favours Uganda is the fact that, overtime, the key
European countries re-exporting fruit products into Africa will increasingly have to produce
without EU subsidies.

There is plenty of land in the country that can be devoted to tomatoes farming. The government
owned irrigation schemes can provide ample land. Besides there is an increasing number of out
growers complimenting the raw material supply effort. The out growers however may be
supported with skills, implements. An investor in tomatoes farming has the option of irrigating
the fruit farms to ensure all year round production.

The demand for fresh fruits on a year-round basis is increasing, and consumers are willing to
pay higher prices for out-of-season fresh fruits. Given EU market entry barriers, Uganda would
rather target domestic, border and regional markets. Currently, there is an existing trade within
the region supplying Southern Sudan, Kenya and Rwanda. The current production levels of fruits
are yet to satisfy the domestic, border and regional demand. It is strategic to strengthen the
existing trade which is not satisfied and yet expanding.

Over one third of the country (Uganda) has unmatched resource endowment for growing fruits,
particularly the Eastern Region. These include soils, climate, water bodies for irrigation, factor
prices for land, labor save to a greater extent know-how and entrepreneurship.

The preferred location for fruit processing factory would be in the central region of the country
being at the Centre of strategic production areas to allow raw materials from all areas to
converge at the Centre. Location of the plant in the central region will allow access to markets,
access to production areas and infrastructure.

Competition

There are currently no large-scale domestic producers of tomato paste in Uganda. But however,
big competitors who already exist in the market are

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1. MACDO Food Factory located in Kitintale Kampala, Uganda
2. Macdough Foods (U) Ltd, Mutungo Zone 8, Kitintale, Nakawa Division, Kampala, Uganda

Competition will most likely come from other tomato farmers and imported products.
Although over 2,000 farmers may produce tomatoes throughout Uganda, raw tomato
products tend to be more expensive than paste in Uganda due to high costs and wastage rates
from bringing raw product to market. Since raw paste and tomatoes are substitutable goods, in
local markets, paste and tomatoes will compete.

Pricing

A major strategy of JRN Tomato Sauce and Paste Company Ltd is to offer the fairest market
prices to our farmers to ensure a high volume quality inputs for the factory and drive down the
cost of production. The marginal cost of paying above-market prices for tomatoes produced in
our network is lower than the marginal cost of running the paste factory below capacity,
thus providing us with a continued incentive to pay a fair price for our raw material. JRN
Tomato Sauce and Paste Company Ltd will strive to keep its gross margin at the minimum
required to cover costs of the raw inputs, operating costs and overhead, and to show a
reasonable profit. However, an effort will be made to accumulate sufficient reserves to permit
JRN Tomato Sauce and Paste Company Ltd to continue to expand and allow more farmers
access to our economies of scale and to end consumers. Operating costs will be kept to a
minimum.

Selling prices will be based on market information about the price levels of competitors and
prevailing retail operating margins. Working closely with our key partners we aim to develop
long term supply agreements to align our production forecast with retailers’ respective growth
strategies.

Our competitive edge

Our competitive edge will lie in the vertically integrated value chain that offers the most
advanced inputs with the support and training to maximize the full potential of our
network farmer’s small holding and offers access to guaranteed pricing. This will place

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JRN Tomato Sauce and Paste Company Ltd in a uniquely unoccupied territory in Kampala and
Uganda large.

Key competitive advantages

1. Reduced Input costs:
JRN Tomato Sauce and Paste Company Ltd will act as a bulk purchaser of inputs on behalf of
our smallholder farmers, realizing a significant discount in purchase price of cultivation
inputs and passing 100% of those cost savings along to the farmer. Why is this sustainable:
While a competitor can replicate these savings, the trust and goodwill built with our
community of farmers over these years are not easily replicable.
2. Vertical integration:
One stop shop for farmers and training to optimize inputs
3. Local Ugandan brand: Consumer support
4. Skills acquisition for staff: from manufacture to businessman
As a result, we will appeal to the target markets of many of our competitors while offering
services superior to each of the components of the value chain.

3.0 BUSINESS DESCRIPTION

3.1 Introduction

JRN Tomato Sauce and Paste Company Ltd is a limited company by shares that will initially be
run by three shareholders. The company will operate under food industry since it deals in tomato
sauce and paste will is usually used commonly on snacks and some food staffs and therefore will
follow laws and regulations under the ministry.

JRN Tomato Sauce and Paste Company Ltd will manufacture tomato sauce and paste which is
product from tomatoes and commonly used in hostels and restaurants in their food flavors
especially snacks like chips, sausages, chaps and other food staffs. The company therefore will
manufacture quality tomato sauce and paste products and sold at fair and competitive price
which will satisfy and meet our customers’ demands.

3.2 Company Ownership

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JRN Tomato Sauce and Paste Company Ltd is a limited company by shares and will be owned
by three shareholders namely; …………………………. but later the company will invite other
partners to buy some shares for expansion purposes.

3.3 Company Locations and Facilities

JRNTomato Sauce and Paste Company Ltd will be located in Natete which is found in Lubaga
division, Kampala Uganda.

P. O. Box 7654, Kampala, Uganda

Website: www.jrntomatosauce-paste.co.ug

Email: tomatosaucepaste@googlemail.com

3.4 Current status

JRNTomato Sauce and Paste Company Ltd will be a new company to exist among businesses of
the same nature around the Kampala city. It will operate under laws governing the food industry
in Uganda

3.5 Legal form

JRN Tomato Sauce and Paste Company Ltd will be private ownership and it will follow all the
procedures to be registered and getting license to be operating in the sector.

3.6 Office and requirements

The land or offices of the business will be leased for the first 10 years and office requirements
will be bought to fit the standards of the business venture.

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4.0 MARKETING OVERVIEW:
4.1 Current Market Situation:

Currently in Uganda, the national economy and marketplace are undergoing rapid changes and
transformation. A large number of reasons could be attributed to these changes; one of the
reasons in these changes in Uganda Market situation is Globalization, and the subsequent and
resulting explosive growth of global trade and the international competition. The other reason for
these changes in the Uganda Market situation is the technological change. This is an important
factor because the technological competitiveness is making, not only the Uganda market, but
also the global marketplace competition. In Uganda’s Marketing situation, the market success
goes to those companies that are best matched to the current environmental imperatives. Those
companies that can deliver what the people want and can delight the Uganda customers are the
market leaders. Today the companies are operating in such a marketplace where survival of the
fittest is the law. In order to win, the companies are coming out with various new and evolving
strategies because Uganda market is also changing very fast. It is to capture the Uganda market,
that the domestics companies and the Multi-National Companies are using all of their Resources.
In order to get the current market share of tomato paste and sauce we surveyed among 50 people
of Uganda and asked their preference for tomato paste when they are taking food and snacks.

4.2 Marketing Opportunities

Analyzing the current market situation we found that there are few but strong competitors exist
in market. But our product will be of high quality compared to our customers but a fair price.
Our product is qualitative & good for health. That’s why we think that our products will be
demandable in the market.

4.3 SWOT analysis:

SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. It involves specifying
the objective of the business venture or project and identifying the internal and external factors
that are favorable and unfavorable to achieving that objective. The technique is credited to Albert
Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from

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Fortune 500 companies Components and strategies of SWOT analysis A SWOT analysis must
first start with defining a desired end state or objective. A SWOT analysis may be incorporated
into the strategic planning model. An example of a strategic planning technique that incorporates
an objective-driven SWOT analysis is Strategic Creative Analysis (SCAN). Strategic Planning,
including SWOT and SCAN analysis, has been the subject of much research.

 Strengths: attributes of the person or company those are helpful to achieving the objective.

 Weaknesses: attributes of the person or company those are harmful to achieving the objective.

 Opportunities: external conditions those are helpful to achieving the objective.

 Threats: external conditions which could do damage to the business’s performance.

Here we have given SWOT of our pineapple juice:

1.      Strength:

 Quality product.
 The Product has a great nutritional value.
 Well distributional channel.
 Skilled management  system,
 Proper accounting system.
 Foresighted marketing department.

2. Weakness:

 lack  of experience
 Shortage of capital
 Small scale production

3. Opportunities:

 High demand
 A developing market
 A market vacated by  ineffective competitor

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 Favorable government rules and regulations

4. Threats:

 Strong competitor
 Economic instability
 Price wars with competitors
 High taxation rate
4.4 Competitions

The key competitor(s) against JRN Tomato Sauce and Paste Company are the existing and
upcoming businesses of the same nature, some of the already existing tomato paste manufacturer
are MACDO Food Factory located in Kitintale Kampala and Macdough Foods (U) Ltd, Mutungo
Zone 8, Kitintale, Nakawa Division and Trust foods company, these will give the company hard
time to easily penetrate market. However, the company will provide quality and standardized
tomato paste products that will out compete or give a competitive advantage over its competitor.

This competitive edge will be embodied with marketing orientation that will give the business a
competitive edge over all other competitors. Our marketers work as a team and have it in mind
that the more sales of our services of the organization is the responsibility of the entire company
right from the top executive to the last person in the company.

4.5 Marketing Strategy

4.5.1 Segmentation:

A market segment is a group of people or organizations sharing one or more characteristics that
cause them to have similar product and or service needs. A market segment is a group of people
or organizations sharing one or more characteristics that cause them to have similar product and
service needs. We will segment our market according to the basis of location, income, & weight.

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4.5.2 Target Market:

A marketer can rarely satisfy everyone. Not everyone likes the same thing. Therefore marketers
start by dividing up the market into segments. They identify and profile distinct group of buyers
who might prefer or require varying product and service mixes by examining demographic
psychographic, geographic, technological and behavioral differences among buyer. Then the
marketer designed which segments present the greatest opportunities, which are its Target
markets. We will segment our total local market into 4 parts according to the consumers’
affordability, and our main target is to enter into this segmented market and satisfy all the
consumers. Our target market is total local market.

 4.6 Market Positioning

 In marketing, positioning has come to mean the process by which marketers try to create
awareness and positioning in the minds of their target market for its product, brand, or
organization. It is the relative competitive comparison of their product occupying in a given
market as perceived by the target market. Our tomato paste and sauce will help to maintain good
health which create a value in consumer mind about this product motivate them to buy
frequently. Frequent ads on TV, internet and radio channels will help to reach our message to our
targeted consumers. Then we will have print and billboard ads in respect of our product and
market.

4.7. Promotion

The company will design promotional strategies to ensure that customers know of the existence
of a new business and to persuade them to ask for further information about the same business or
visit the businesses branches or its head office. The businesses through the sales Manager will
design radio advertisements, televisions, brochures, posters, flyers, as well as putting
advertisements in Newspapers for example; The Daily Monitor, New Vision, Bukkede for the
central people, Rupiny for the North and Eastern clients and Orumuri for the Westerners.

The business will also promote its products through ensuring high quality products such that
whoever takes it does not actually miss it next time. This will be made in order to maintain the
image the customers will have seen in us.

13
The business will also design caps and T-shirts which will be given to large scale buyers so as to
build clientele and business image. The company will engage in corporate social responsibility
by offering to the sick and the Needy Children some support.

4.8. Advertising

Television, Radio, Newspapers, business cars, flyers, posters, participating in trade shows are
some of the ways the company will advertise its products both persuasively and informatively
with their associated benefits like increased sales.

4.9. Personal Selling

The business will have its salesman, employees who are well versed with communication,
customer care and public relations skills. The sales will always make frequent visits to customers
to collect information about our performance -areas to maintain and areas of improvements so
that the company can perform better and better. The information sought will be based on product
quality, delivery terms, price as well as recommendations.

4.10. Sales Promotion

This will also be used as tools to improve and increase the market share. It will be done through
things like packaging, after sales services, gifts, samples, reduced prices and direct personal
contract with containers. Therefore, JRN Tomato Sauce and Paste Company will aim producing
what its customers want and in time the company will have what it takes to serve our customers
basing on the information got from them.

4.11 Marketing Research

During the initial phase of the marketing plan development, several focus groups will be held to
gain insight into prospective customers. These focus groups will provide helpful insight into the
decision making processes.  An additional source of dynamic market research is a feedback
mechanism based on a suggestion card system. The suggestion card has several statements that
customers are asked to rate in terms of a given scale. There are also several open ended questions
that allow the customer to freely offer constructive criticism or praise.

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5.0 PRODUCTION PLAN
The company plan to produce 1000 tons in our first six months of operation and with time we
hope to double the number of tomato sauce and paste to 2,000 tons.

Like other products, tomato sauce and paste follows intensive production process of which JRN
Tomato Sauce and Paste Company Ltd will follow. After the final stage of production (packing),
we will distribute the finished tomato sauce and paste to the retail shops, wholesales,
supermarkets which sell to the final consumers of our product.

Tomato sauce and paste production process

Tomato paste processing facilities require a constant supply of fresh tomatoes, and it is vitally
important that the tomato processing line constantly operates at maximum capacity. If capacity
drops below a certain threshold, or even worse, if paste cannot be made all day every day, then
production has to stop completely while all the machinery is cleaned. This can lead to a lot of
wastage, both of the fresh tomatoes waiting in trucks outside, and the tomatoes in the facility in
various stages of processing.

Receiving: Fresh tomatoes arrive at the plant in trucks, which are directed to the offloading area.
An operator, using a special tube or boom, pipes a vast quantity of water into the truck, so that
the tomatoes can flow out from the special opening at the rear of the trailer. Using water allows
the tomatoes move into the collection channel without being damaged.

Sorting: More water is continuously pumped into the collection channel. This water carries the
tomatoes into the roller elevator, rinses them, and conveys them to the sorting station. At the
sorting station, staff removes material other than tomatoes (MOT), as well as the green, damaged
and discolored tomatoes. These are placed on a reject conveyor and then collected in a storage
unit to be taken away. In some facilities, the sorting process is automated

Chopping: The tomatoes suitable for processing are pumped to the chopping station where they
are chopped.

Cold or Hot Break: The pulp is pre-heated to 65-75°C for Cold Break processing or to 85-95°C
for Hot Break processing.

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Juice Extraction: The pulp (consisting of fiber, juice, skin and seeds) is then pumped through
an extraction unit composed of a pulper and a refiner - these are essentially large sieves. Based
on customer requirements, these mesh screens will allow more or less solid material to pass
through, to make a coarser or smoother product, respectively.

Typically, 95% of the pulp makes it through both screens. The remaining 5%, comprised of
fiber, skin and seeds, considered waste and is transported out of the facility to be sold as cattle
feed.

Holding Tank: At this point the refined juice is collected in a large holding tank, which
constantly feeds the evaporator.

Evaporation: Evaporation is the most energy-intensive step of the whole process – this is where
the water is extracted, and the juice that is still only 5% solid becomes 28% to 36% concentrated
tomato paste. The evaporator automatically regulates juice intake and finished concentrate
output; the operator only has to set the Brix value on the evaporator’s control panel to determine
the level of concentration.

As the juice inside the evaporator passes through different stages, its concentration gradually
increases until the required density is obtained in the final “finisher” stage. The entire
concentration/evaporation process takes place under vacuum conditions, at temperatures
significantly below 100°C.

Aseptic Filling: Most facilities package the finished product using aseptic bags, so that the
product in the evaporator never comes into contact with air until it reaches the customer. The
concentration is sent from the evaporator directly to an aseptic tank it is then pumped at high
pressure through the aseptic sterilizer-cooler (also called a flash cooler) to the aseptic filler,
where it is filled into large, pre-sterilized aseptic bags. Once packaged, the concentrate can be
kept up to 24 months.

Some facilities choose to package their finished product under non-aseptic conditions. This paste
will go through an additional step after packaging it is heated to pasteurize the paste, and then
kept under observation for 14 days before being released to the customer.

16
Packaging and presentation

Uniformity

The packaging material in a lot will each contain tomato paste of the same commercial type, and
will have a uniform net weight.

Packaging

The packaging material will be such as to ensure adequate protection against humidity
during storage and transport of the product.

The material used inside the package will be food grade and acid-resistant so as to
protect the quality of the product.

The container will protect the product from any form of contamination.

Labeling

Retail containers

Labeling of tomato paste will be done in accordance with the requirements of US 7. In addition,
the following specific provisions will apply: name of the product; name and address of the
manufacturer; list of ingredients; net weight in grams or minimum volume in milliliters or liters;
date of manufacture; and best before date.

6.0. MANAGEMENT PLAN

6.1. Personnel Plan
The owners or shareholders are the first employees of the company (Mr. Turyamureeba Julius,
Mr. Amuse and Mr. Muyingo Noah). The company plan to employ more five staff at
commencement and according to the laid down strategies the number is expected to increase
with growth and expansion of the business in order to serve the needs of the customers
maximally.

17
All the strategies laid down at achieving success of the company thus in employing the
employees, on the going key management skills will be considered that is human skills,
conceptual skills, technical skills and above all faithful decision makers.

6.2. Composition

The company will have a well-trained and skillful management staff that will streamline the
operations or service/product delivery to the general public. The staff will consist of the
following; managing director, general manager, sales managers, cashiers, store stock controller
and support staff.

6.3. Organizational Structure

For the company’s proper operations in service or product delivery, the organizational structure
will be formed starting from shareholders who are businesses owners, managing director and
other positions as shown below.
Directors

Operation manager

Human Resources Accountant Sales Manager

Support staff

7.0 ASSESSMENT OF RISKS

Financial Farmer counterparty risk:

18
JRN Tomato Sauce and Paste Company places considerable amount of trust in its network of
farmers. Because our farmers receive all inputs on credit, JRN Tomato Sauce and Paste
Company goes through an intensive farmer evaluation process to rank farmers on their
suitability for inclusion to our network. We believe that this is important to establish trust
with our farmers in order for them to produce high yielding, high-quality tomatoes and become
our greatest advocates and marketing tools for further network expansion. JRN Tomato
Sauce and Paste Company is looking to mitigate this risk by partnering with local
microfinance institutions such as JRN Tomato Sauce and Paste Company to roll-out or credit
scheme.

Pricing risk:

JRN Tomato Sauce and Paste Company covers pricing risk by agreeing with farmers on a
set risk-weighted average price in advance of the growing season. By offering one set
price, JRN Tomato Sauce and Paste Company can plan processing production and also manage
price volatility of our most important production input.

8.0 FINANCIAL OVERVIEW

8.1 Break even analysis

JRN Tomato Sauce and Paste Company will adopt a break even analysis as a technique for
forecasting. This analysis will be useful for decision making. It will identify the point at which
the revenue from sales is just enough to cover running costs of the business. The breakeven point
analysis shall be based on figure forecasted for the first year in operation.

The forecasted figures and the calculations both in units and revenue is as follows;
Forecasted sales revenue 12,000,000
Forecasted sales unit 100,000
Forecasted variables costs 5,000,000
Fixed costs 4,500,000
Units selling = Total sales
Total sale units

19
12,000,000
= 1200/=
100,000
Variable cost per unit
Total variable costs
Total sales unit

5,000,000 = 50/=
100,000

Contribution per unit

= Unit selling price - variables cost per unit
= 1200-50
= 1195/=

Breakeven point (units) =

Total fixed costs

Contribution
4,500,000
1195
= 377 units
Breakeven point (sales) = Break even units * Unit selling price
= 377 * 1200
= 452,400/=

The firm shall even if it sells 377 units and the expected revenue is 452,400/= sales Revenue
Total revenue
120,000 BEP 2 Total cost

20
452,400---------------------- Variable cost

45,000 Margin of safety FC (fixed cost)

0 377 100,000 Level of activity

8.2 Projected income statement for the first three years

Details 2019 (Shillings) 2020 (Shillings) 2021 (Shillings)

Revenue 1,200,000 1,4000,000 4,500,000
Cost of sales _ _ _
Purchase 350,000 400,000 430,000
Opening stock _ 600,000 800,000
Closing stock (50,000) (160,000) (210,000)
Gross profit 900,000 1,100,000 1,200,000
OPERATING
EXPENSES
Administrative
Salaries and wages 1,000,000 1,200,000 1,400,000
Maintenance costs 300,000 400,000 400,000
Telephone 100,000 100,000 100,000
Stationery 200,000 300,000 300,000
Staff motivation 300,000 400,000 400,000
Rent 600,000 600,000 600,000
Food staffs 500,000 900,000 800,000
Selling and
distribution
Promotion and 400,000 600,000 900,000
advertising
Transport 200,000 300,000 300,000
Packaging 300,000 400,000 5,000,000

Commission 100,000 200,000 300,000

EBT 5,000,000 5,600,000 6,000,000

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 Tax 30% ( 4,500,000) (1,680,000) (1,800,000)

EAT 3,500,000 3,920,000 4,100,000

8.3 Projected balance sheet as at the end of each the three years

Details 2019 (shillings) 2020 (shillings) 2021 (shillings)

NONCURRENT
ASSETS
Mixer 250,000 242,500 235,000

Cooling machine 80,000 77,600 75,200

Other equipments 100,000 99,800 99,600

Total noncurrent asset

CURRENT ASSET

Cash 300,000 700,000 980,000

Receivables 845,000 631,300 471,200

TOTAL ASSETS 1,345,000 1,751,200 1,861,000

CAPITAL AND
LIABILITIES
EQUITY

Ordinary shares 1,000,000 1,000,000 1,000,000

Noncurrent Liability

Bank loan 1,000,000 600,000 300,000

Current liability 2,000,000 1,600,000 1,300,000

Total capital and (655,000) 151,200 561,000

22
liability

9.0 APPENDIX
9.1 projected cash flow

Projected Cash Flow

Mon Mo Mon Mon Mo Mon Mon Mon Mon Mo Mon Mon
th 1 nth th 3 th 4 nth th 6 th 7 th 8 th 9 nth th 11 th
2 5 10 12
Cash
Recei
ved
Cash
from
Opera
tions
Cash 1,15 1,2 1,30 1,30 2,30 2,45 2,45 2,60 2,60 3,75 3,75 3,75
Sales 0000 25 0 0 0 0000 000 0 000 000 0 0
000 000 000 000 0 000 0 0 000 000
Subto 1,15 1,2 1,30 1,63 2,30 20,4 2,44 2,46 2,86 3,75 30,7 3,75
tal 0 25 0 0 000 5000 5,00 0,00 0,00 0, 5000 0,00
Cash 000 000 000 000 0 0 0 0 0 000 0 0
from
Opera
tions
Addit
ional
Cash
Recei
ved
Sales 0. 0 0 0 0 0 0 0 0 0 0 0 0
Tax, 00
VAT, %
HST/

23
GST
Recei
ved
New 0 0 0 0 0 0 0 0 0 0 0 0
Curre
nt
Borro
wing
New 0 0 0 0 0 0 0 0 0 0 0 0
Other
Liabil
ities
(inter
est-
free)
New 0 0 0 0 0 0 0 0 0 0 0 0
Long-
term
Liabil
ities
Sales 0 0 0 0 0 0 0 0 0 0 0 0
of
Other
Curre
nt
Asset
s
Sales 0 0 0 0 0 0 0 0 0 0 0 0
of
Long-
term
Asset
s
New 0 0 0 0 0 0 0 0 0 0 0 0
Invest
ment
Recei
ved
Subto 10,1 10, 14,3 16,3 20,3 20,4 24,4 24,6 28,6 30,7 30,7 30,7
tal 5000 225 0000 0000 00 50 50 0000 00 50 50 50
Cash 0 000 0 0 000 000 000 0 000 000 000 000
Recei
ved
Expe Mon Mo Mon Mon Mo Mon Mon Mon Mon Mo Mon Mon
nditur th nth th 3 th 4 nth th 6 th 7 th 8 th 9 nth th 11 th
es 1 2 5 10 12

24
Expe
nditur
es
from
Opera
tions
Cash 1,40 140 1400 1400 140 1800 180 1800 200 220 220,
220
Spend 0,00 00 000 000 00 0 00 00 0 00 00 000 000
ing 0 00 00 00 00 0 00000
Bill 163 488 4900 5012 505 5171 578 5879 592 631 6687
668
Paym 00 3 00 00 800 00 600 00 3 00 8 00 00200
ents 00 0 0
Subto 1416 188 18,9 1901 190 2317 237 2387 259 283 2868 286
tal 30 830 00 20 58 0 1 0 86 0 90 230 18 0 7 0 82 0
Spent 0 000
on
Opera
tions
Addit
ional
Cash
Spent
Sales 0 0 0 0 0 0 0 0 0 0 0 0
Tax,
VAT,
HST/
GST
Paid
Out
Princi 0 0 0 0 0 0 0 0 0 0 0 0
pal
Repay
ment
of
Curre
nt
Borro
wing
Other 0 0 0 0 0 0 0 0 0 0 0 0
Liabil
ities
Princi
pal
Repay
ment
Long- 6000 600 6000 6000 600 600 600 6000 600 600 6000 600

25
term 0 00 0 0 00 00 00 0 00 00 00 00
Liabil
ities
Princi
pal
Repay
ment
Purch 0 0 0 0 0 0 0 0 0 0 0 0
ase
Other
Curre
nt
Asset
s
Purch 0 0 0 0 0 0 0 0 0 0 0 0
ase
Long-
term
Asset
s
Divid 0 0 0 0 0 0 0 0 0 0 0 0
ends
Subto 1476 194 1950 1961 196 2377 243 2447 265 289 2928 292
tal 30 830 00 20 58 0 10 86 0 90 23 0 18 0 7 0 820
Cash
Spent
Net (,61 (92 (520 (331 642 (332 640 1210 207 183 1463 146
Cash 300) 580 000) 200) 000 100) 0 0 700 200 000 800
Flow 0 0 0
Cash 6238 531 4792 4461 452 4193 420 4212 442 460 4749 489
Balan 70 29 90 800 60 0 9 0 03 0 40 01 0 33 0 60 64 0
ce 0

26