Pumpkin Meadows Processing Ltd. Kara Forge Genevieve Hamoline Genevieve Hamoline Jim McQueen Laura Shymko.

Pumpkin Meadows Pumpkin Meadows Processing Ltd.Processing Ltd.

Kara ForgeKara Forge

Genevieve HamolineGenevieve Hamoline

Jim McQueen Jim McQueen

Laura ShymkoLaura Shymko

IntroductionIntroduction Our business plan outlines the Our business plan outlines the

development and feasibility of development and feasibility of Pumpkin Meadows Processing Ltd.Pumpkin Meadows Processing Ltd.

The goal of our company is to find a The goal of our company is to find a market for non-carving pumpkins, market for non-carving pumpkins, made into puree, unable to bring in made into puree, unable to bring in premium pricingpremium pricing

Mission StatementMission Statement

To provide a high quality, Saskatchewan To provide a high quality, Saskatchewan made, value-added product to wholesale made, value-added product to wholesale distributors within 2000 km of the plant distributors within 2000 km of the plant in an environmentally friendly way, by a in an environmentally friendly way, by a

company whose objectives include company whose objectives include growth and diversification.growth and diversification.

Business OrganizationBusiness Organization Private corporationPrivate corporation Seasonal operationSeasonal operation Process 400,000 lbs. raw pumpkin in Process 400,000 lbs. raw pumpkin in

year oneyear one Expand to 540,000 lbs. raw pumpkin by Expand to 540,000 lbs. raw pumpkin by

year six year six Purchase pumpkins for $0.10/lb. from Purchase pumpkins for $0.10/lb. from

MaxCore Ltd.MaxCore Ltd.

Site PlanSite Plan

18 miles north of Moose Jaw on 18 miles north of Moose Jaw on highway #2highway #2

Plant built on old barn site.Plant built on old barn site. Significant advantagesSignificant advantages

– Highway accessHighway access– Located along “veggie corridor”Located along “veggie corridor”– Excellent water supplyExcellent water supply

LocationLocation

Farm locationFarm location

Future home of building site for Pumpkin Meadows Future home of building site for Pumpkin Meadows Processing Ltd.Processing Ltd.

Operations PlanOperations Plan

Processing of PumpkinsProcessing of PumpkinsUnload

Wash

Inspect forDefects

Destem

Dispose ofStems

Quarterer /Slicer

Steam Cook Pulper Finisher

Package Puree

Dispose of Rind& Other Waste

Freeze

Transport toWholesalers

EquipmentEquipment

Zwilling J.A. Henckels ~ 4 pc. Chef’s setZwilling J.A. Henckels ~ 4 pc. Chef’s set

World’s Finest Cutlery Since 1731World’s Finest Cutlery Since 1731

Processing of PumpkinsProcessing of PumpkinsUnload

Wash

Inspect forDefects

Destem

Dispose ofStems

Quarterer /Slicer

Steam Cook Pulper Finisher

Package Puree

Dispose of Rind& Other Waste

Freeze

Transport toWholesalers

EquipmentEquipment

Quarterer/Slicer

Processing of PumpkinsProcessing of PumpkinsUnload

Wash

Inspect forDefects

Destem

Dispose ofStems

Quarterer /Slicer

Steam Cook Pulper Finisher

Package Puree

Dispose of Rind& Other Waste

Freeze

Transport toWholesalers

EquipmentEquipment

Steam Blancher-Cooler

Equipment

Saskatoon Boiler Model OTS-G15L Low Pressure Steam Saskatoon Boiler Model OTS-G15L Low Pressure Steam BoilerBoiler

EquipmentEquipment

Model 18 Pulper/Finisher

Processing of PumpkinsProcessing of PumpkinsUnload

Wash

Inspect forDefects

Destem

Dispose ofStems

Quarterer /Slicer

Steam Cook Pulper Finisher

Package Puree

Dispose of Rind& Other Waste

Freeze

Transport toWholesalers

Equipment CostsEquipment Costs

Boiler 11,000.00Steamer 10,000.00Pulper/Finisher 20,272.00Quarterer/Slicer 1,500.00Cooler 4,086.90Knives and Tools 500.00Cutting Tables 1,500.00

Water tanks 3,900.00Water filter 392.00

Washing Equipment 1,000.00Total $54,150.90

Capital Budget SummaryCapital Budget Summary

Land 1,000Buildings 121,850Equipment 54,151Working Capital 19,193

Total Capital Required 196,194

Variable Operating ExpensesVariable Operating Expenses

Communications 1,800Salaries (SG &A) 44,000Benefits (SG &A) 4,303Marketing Expenses 9,500Office Expenses 2,000Packaging Costs 26,334Transportation Costs 3,591Interest - LT Debt 7,040

Total Expenses $98,568.00

Human Resource Management

Organizational StructureOrganizational Structure

P la n t W o rke rs

P la n t F o re m an

G e ne ra l M a na g er A ccou n ts M a na g er

B o a rd o f D ire c to rs

Human Resource ManagementHuman Resource Management

General ManagerGeneral Manager Accounts ManagerAccounts Manager Plant ForemanPlant Foreman Full-time Plant WorkersFull-time Plant Workers Part-time Plant WorkersPart-time Plant Workers

Marketing PlanMarketing Plan

Product FeaturesProduct Features

Saskatchewan grownSaskatchewan grown 100% pure frozen pumpkin puree100% pure frozen pumpkin puree No substitution of squash or carrotsNo substitution of squash or carrots Produced from the finest, hand-picked Produced from the finest, hand-picked

productsproducts Minimal pesticide use on raw materialsMinimal pesticide use on raw materials

The MarketThe Market

Pumpkin puree market is very stablePumpkin puree market is very stable New entry is difficultNew entry is difficult Demand is seasonalDemand is seasonal

– peak consumption between October and peak consumption between October and DecemberDecember

Demand for ready-to-eat baked goods Demand for ready-to-eat baked goods is increasing is increasing

Target MarketTarget Market

CustomersCustomers– wholesale distributors who supply wholesale distributors who supply

bakeries, restaurants, and grocery store bakeries, restaurants, and grocery store bakeriesbakeries

– further processed into ready-to-eat further processed into ready-to-eat productsproducts

Competitive AnalysisCompetitive Analysis

$0.65 $0.69

$1.56

$0.48

$0.00$0.20$0.40$0.60$0.80$1.00$1.20$1.40$1.60$1.80

Daw n Foods Grocery Store Organic(Nutters)

PumpkinMeadow s

Competitors

$/lb

Past PerformancePast Performance

Previous attempts at processing puree have Previous attempts at processing puree have occurred in Saskatchewan.occurred in Saskatchewan.

Assumptions that have been made:Assumptions that have been made:

– Simple process Simple process

– Major drawback - MarketingMajor drawback - Marketing

– Success is dependent on a successful Success is dependent on a successful marketing managermarketing manager

Marketing BudgetMarketing Budget

Website Construction 500.00Magazine Advertising 2,000.00

SK Food Processors NewsletterFood Center Publications

Tradeshows 6,500.00Booth RentalTransportaion CostsAccommodations

Direct Mail 500.00

Total Marketing Expenses $9,500.00

Financial PlanFinancial Plan

Financial BudgetFinancial Budget

$88,000.00

$112,000.00

Equity Financing(56%)

Long Term BankLoan (44%)

Total required = $200,000Total required = $200,000

Financial SummaryFinancial Summary

Required rate of return was 20%Required rate of return was 20% 10-year projection showed an internal rate 10-year projection showed an internal rate

of return of 27.8%of return of 27.8% Positive net income in year 1Positive net income in year 1 Cash flow of $28,000 in year 1Cash flow of $28,000 in year 1 Dividends paid out in year 2Dividends paid out in year 2 Break-even volume - 365,000 lbsBreak-even volume - 365,000 lbs

Financial ResultsFinancial Results

Year 2003 2005 2008 2011 2012

Revenues $191,520 $223,886 $282,973 $300,293 $306,299COGS $72,968 $98,850 $108,992 $108,950 $109,245Gross Margin $118,552 $125,036 $174,051 $191,343 $197,053Expenses $98,568 $105,103 $116,418 $120,970 $122,452Net Income B4 Taxes $19,983 $19,932 $57,632 $70,373 $74,601Income Taxes $3,821 $3,811 $11,019 $13,455 $14,264Net Income $16,163 $16,121 $46,613 $56,918 $60,338Dividends $0 $8,047 $17,904 $26,754 $28,459

Critical VariablesCritical Variables

Critical Variable Base Case IRR = 20% Allowable Change

Selling price of puree (per lb) $0.48 $0.45 6%Volume of puree produced (lbs) 399,000 365,645 8%Price paid for raw pumpkin (per lb) $0.10 $0.25 150%

Sensitivity AnalysisSensitivity Analysis

0

10

20

30

40

50

60

Selling Price (per lb) Yearly Increase inProd'n (lbs)

Buying Price of RawPumpkin (per lb)

Critical Variables

Proj

ecte

d In

tern

al R

ate

of R

etur

n

Base Case

Worst Case

Best Case

ScenariosScenarios

* using the selling price as the critical variable

Scenario - Selling Price (15%)

NPV IRRAverage Annual

Cash FlowsAverage Annual

Net Income

Best Case 159,398 48.3% $38,771 $68,389Base Case 42,612 27.8% $22,005 $37,735Worst Case (76,381) 5.5% $5,239 $7,081

ConclusionConclusion

Future AlternativesFuture Alternatives Canning Canning Processing other vegetablesProcessing other vegetables Organic productionOrganic production Contracting pumpkin production Contracting pumpkin production

from other producersfrom other producers Rental of processing plantRental of processing plant Utilization of the Food CenterUtilization of the Food Center

ConclusionsConclusions

Feasible providing a market is foundFeasible providing a market is found IRR exceeds required rate of returnIRR exceeds required rate of return Pumpkin Meadows Processing Ltd. Pumpkin Meadows Processing Ltd.

may lead the waymay lead the way