Ancel G. Celajes
Mark Arvin N. Romero
Ben Jay F. Herran
Ma. Lichelle A. Figuracion
Daniel O. Toralba Jr.
Nora D. Ramos
Adviser
EXECUTIVE SUMMARY
Utilization of Scrap Vegetable in the Production of Crayons in the
Province of Rizal
Threading the long stretch of 2024 kilometers of Southern Luzon
sits
Rizal
Province;
the
regions
provider
academically
and
CHAPTER I
INTRODUCTION
that are similar to those of the wax crayons. Some of these companies
produce special type of crayon which is made from soap, wax, resins and
limp blast and is used in drawing on stones or plate for reproduction in
lithography. Crayons are manufactured in various shapes, such as round,
hexagonal or square and in different sizes. The most common shape
however, is cylindrical.
Being toxic is not just the only problem of todays commercial
crayons but also the texture of the color on the paper surface which can
be seen roughly. Some artists used some techniques to eradicate the
problem by scratching it with the edge of a ruler or any material that can
be used to make it glossy and smooth and other way, is by applying oil on
the art work surface. Another problem of todays crayola is that, it can
break easily when it is hold tightly by the children.
But crayons are nowadays continuously being developed to make
solutions to the said problems. Crayons now can be produced through
substitute raw materials and some additives to make it more convenient to
use, and one of the raw materials used by the researchers in order to
produce a more non-toxic, more glossy and more durable crayons are
vegetables like patola (sponge gourd) and talong (eggplant). Patola
and Talong in Filipino term are possesses an edible oil which contains
phosphorous which can make paper surface smooth and glossy.
CHAPTER II
MARKETING
A. Product
This project is focused on the production of crayon through the use
of vegetables such as eggplant and sponge gourd. In the province of
Rizal, patola and talong can be found anywhere and its easy to plant such
kind of vegetable. It catches the attention of the researchers because
talong and patola rots easily, thats why the researchers think on how it
will be utilized instead of being thrown and became waste. The extract of
said vegetables will be part of the main component of the product. While
the pulp of it can be converted into an organic paper in just one way
process; the researchers will probably produce two (2) products.
Some manufacturers said that the crayons they are producing are
non toxic but the consumers didnt know what true behind the products
are. Through this product the mind of those people will rectify by
knowing that a crayon can be possibly made using scrap vegetables.
Instead of throwing it away it can be use can be utilized in another
commodity. This crayon has less chemical content because it is compose
of 50% paraffin wax, 40% extract from patola and talong and 10%
sampaguita aroma. While some other commercial crayons have more
chemical which is a big menace in the heart of child, because children are
the major users of crayons. The researchers were concerned to their
customers, not only to them but also to the economy. This time we have a
sluggish economy, we have to conserve our nature by recycling some
waste products which can be transformed and used as new product will be
able to contribute for the development of our economy.
B. Target Market
Many factors are considered before the proponents came up with
the succeeding decisions. The proponents came up with the scope, which
will be included in the business operation. They decided to distribute it
within the province of Rizal. This is in lieu with the idea that,
right product in the right geographic area at the right time. Localizing
the kind of product and sales effort including the sales promotion will
post the major advantage with respect to geographic segmentation as
adhered upon by the chosen market-coverage strategy.
Target markets are the buyers of the goods. They can be the present
product users or they can be the prospective buyers being the target of
marketing organizations.
Market shall not mean palengke but people with needs to
satisfy capacity or money to spend and willingness to buy.
Area Coverage:
Agriculture is a giant industry of Rizal. As a matter of fact, its
major income depends on the Provinces agricultural sector, which is
60%, included in 60% is the farming industry which yields the rich soil of
Rizal. Palay serves as the number one (1) among the list of the most
harvested plant in the Province. Aside from palay, some vegetables were
also included such as talong, patola, upo, okra, and other backyard
veggies. Corn and pineapple were also harvested there.
Like what is mentioned, patola and talong were included in the list,
it is the pinpoint of the researchers in setting Rizal as the no. 1 source of
the raw materials. Being abundant is the reason why these veggies can be
ignored and vested daily. The researchers would like to utilize them in a
way of producing crayon.
In utilizing these scraps, the researchers believed that it will make
Rizal the first producer of organic crayons which are non-toxic. This is in
lieu with the idea that, right product in the right geographic area at the
right time.
Customers:
Target customers will be the preschoolers and grade school
students and those in the secondary level of education. The researchers
projected eight percent (8%) of their prospective customers were in grade
school, five percent (5%) and three percent (3%) will be preschoolers and
high school students, respectively. The projected rates for target
customers were based from the enrolment report in the Department of
Education (Rizal and Antipolo Districts) as of August 8, 2008.
Preschool
Grade School
High School
Total/TM* per Head
*TM - Target Market
Public Private
7,502
1,876
283,610 84,439
134,978 53,991
426,090 140,306
Total
9,378
368,049
188,969
566,396
Grand
Rate
Total
5%
469
8%
29,444
3%
5,669
35,582
Preschool
Grade School
High School
Total/TM per
Head
Increase
Grand Increase in
Public
Private Total
Rate Total
Rate
TM per
Head
7,502
1,876
9,378
5%
469
102%
478
283,610 84,439 368,049
8% 29,444
102% 30,033
134,978 53,991 188,969
3%
5,669
104%
5,896
426,090 140,306 566,396
35,582
35,582
566,396
6.3 %
36,407
accessible coloring material. Refer to the table below about the result on
the said survey:
Table 2.1
Users of Different Coloring Materials
Coloring
Grade
Nursery
High
Kindergarten
materials
Total
school
school
Crayons
16
21
20
11
68
Oil pastel
None
11
Total
25
25
25
25
100
Water
color
Color
pencil
Poster
color
Table 2.2
Average Growth Rate in the Population of Students
2008
Average
Annual
Growth Rate
Growth
Projected
Population as
of 2009
Preschool
6,263
2%
125.26
6,388
Grade school
192,908
2%
3,858.16
199,766
High school
94,748
4%
3,789.92
98,538
Total
293,919
7,773.34
304,692
Supporting Details:
Average growth rate of preschool and grade school is computed as
follows:
Preschool and Grade School :
Private
1%
Public
Total Percentage
3%
4%
2%
Private
3%
Public
5%
Total Percentage
8%
4%
Present Competitors:
According to the information gathered by the researchers, the most
dominant crayon-producing company in Rizal as well as here in the
Philippines is Amspec Corporation- the makers of crayola- with the total
market share of forty percent (40%). Included in the list of existing
competitors are CE Corporation (Joy Crayon), Venus Commercial
(Corola Crayon), Joaquin Commercial (JC Crayon), Lehao Corporation-a
China based Corporation- (Lehao Crayon), Sunrise Corporation (Kiddy
Crayon) and some small makers of crayons. Kapitan Kulay opts to get the
6.3% of the unsatisfied portion of the total market share.
Below are the pie charts showing the distribution of shares in the
total market share;
Figure 2.1
40%
40%
Crayola - Amspec
Corporation
Joy Crayon - CE
Corporation
Unsatisfied Customers
20%
JC Crayon
Joaquin
Commercia
l
Projected
Market
Share
Multiply:
Unsatisfied
Customers'
rate
Share in
the Total
Market
Share
Corola
Crayon
Kiddy Crayon
Lehao
Crayon
Kapitan
Kulay
Venus
Commercial
Sunrise
Corporation
Lehao
Corporation
URSBBICIDYE
Others
7.10%
8.75%
8.32%
8.20%
6.30%
1.33%
20%
20%
20%
20%
20%
20%
1.4200%
1.7500%
1.6640%
Figure 2.1.1
1.6400%
1.2600%
0.2660%
D. Projected Production
The product will be produced four (4) times in a month. Per
production, the output will be 1875 boxes containing 8 sticks per box.
250 kilos of paraffin wax will be utilized in the monthly production.
Below is the supporting computation of the projected production in
5 years.
Boxes per production
Multiply: No. of production in a month
Total Production per month
Multiply: No. of production a year
Projected Annual Production
1,875
4
7,500
6
45,000
Table 2.3
Projected Annual Production
Year
Annual Production
2009
2010
2011
2012
2013
45,000
46,035
47,094
48,177
49,285
E. Projected Sales
The projected sales of Kapitan Kulay will be based on the
projected annual production (see Table 2.3). The mark-up of the product
price, one peso and seventy centavos (Php1.70), is the difference between
the stated price per box, which is eight pesos (Php8.00), and the
production cost per box that is six pesos and thirty centavos (Php6.30).
The mark-up rate per box is 26.98% which represents the gross income
per box of Kapitan Kulay.
Table 2.4
Projected Annual Sales
Annual Production
Multiply: Cost per Box
Projected Annual Sales
2009
45000
8
360000
2010
46035
8
368280
2011
47094
8
376752
2012
48177
8
385416
2013
49285
8
394280
F. Marketing Strategies
This part of research serves as the game plan of the business to
attain its predetermined objectives. It is defined as the marketing logic
where businesses hope to achieve its marketing objectives. This part
contains the specific strategies for the target market, the marketing mix
(pricing, place, people, product and promotion) and also marketing
budget that contains the computation for the beginning expenses of the
business.
Practices of Competitors
Nowadays, people are so idealistic about business aspects. Some
products produced are commonly under food and service category. There
are many business establishments that mostly produce product that are
non-food, most improved and hi-tech (from high technology product).
Ordinarily, one of the products produced are crayons which are mostly
seen in bookstores nationwide. Tarpaulins and flyers are used to promote
their products. In spite of the circumstances, some competitors still exist
in the market to compete with products that also appear in the same
bookstore. The products of the two competing business are the same in
nature but has different characteristics and appearance.
G. Marketing Expenses
The expenses incurred by the project are cheaper due to the
accessibility of the materials in the production site. Eggplant and sponge
gourd can be found anywhere and has a lower commercial value because
our country is one of the exporters of sponge gourd and eggplant.
Aside from the expenses in buying the main ingredients, there
should be expenses for transportation. Electricity expenses are also
included on the said product. It must include also the wages that will be
given to the three (3) workers. The other miscellaneous expenses are
yielded for the development of the product such as secondary ingredients.
H. Production Cost
In order to come up into a proper pricing, the proponents consider
the cost incurred in producing the veggie crayon.
Below are the following data in the production cost:
Direct Materials
3.98
6,844
1,875
Direct Labor
0.32
6.30
CHAPTER III
B. Steps
Crayon can be easily made as long as the raw materials and
equipments to be used are available. It must also be included that the
space is enough to make the production faster with fewer work forces.
Here are the steps showing the production of Vegetable Crayon:
Stage 1 - Extracting
1. Collection of scrap vegetables
2. Drying
3. Manual Extraction
4. Filtration
5. Extract
Stage 2 Making Crayons
1. Heating of Wax
2. Mixing of coloring pigment, scent and extract
3. Molding
4. Cutting
5. Collating
6. Packaging
C. Monthly Schedule
Effective production must entail not only the product itself but also
the time frame and the number of products that will be produced within a
certain period of time or in one way, how long the production will be.
The production of the veggie crayon can be allotted into eight (8)
hours per production, four productions a month.
With this schedule of production, ideal output of the business is
expected.
D. Labor
Labor is the most important factor of production, whereas, it
involves people who work on with the product.
The business will need three (3) workers in the production of the
veggie crayon. They will work on what the schedule referred to. Each
worker will receive a minimum salary of two hundred pesos (200) per
production and eight hundred pesos a month. The business will not apply
the minimum wage law for the reason that Rizal Province is a rural area.
If the income will increase by the following years, there will also be an
increase in the salaries of the workers.
F. Raw Materials
In the production of veggie crayons the following materials were
used:
1. Eggplant and sponge gourd extract
2. Sampaguita scent
3. Colouring pigments ( dye)
4. Paraffin wax
Accessibility of the raw materials is a major consideration made by
the researchers. Paraffin wax and other materials are available in the
public market. While the eggplant and sponge gourd can be found
anywhere here in Rizal, especially those who have backyard garden.
G. Plant Location
The main production of the veggie crayon will be made in the
Business Incubation Center and Innovation and Development for Youth
Entrepreneurs (BICIDYE) of the University of Rizal System Binangonan
Campus.
Chapter IV
Organizational Structure
B. Organizational Structure
The organization can be classified as functional type of business
organization wherein works are divided according to the functional needs.
It applies the principle of division of labor. The labor is divided based
on their area of specialization. Each labor is assigned to a certain field to
be able to produce quality product.
Every major decision regarding the operation of the business will
follow a certain channel of approval, first from the production team to the
BICIDYE then to the Dean followed by Chancellor and lastly, to the
President.
Production team is concerned with the production of the veggie
crayon. They need to manipulate the place, time, quality, quantity and for
the productivity of any other output including the paper made from the
pulp of the vegetables used.
The marketing is assigned to the promotion and selling activities.
They were concerned about the customer of the product, consistency of
market share and formulation of efficient channels of distribution. The
proponents preferred to use a single- levelled channel of distribution from
manufacturer to retailer then to consumers.
C. Qualification of Officers
The University will choose and designate those people who will be
qualified for the aforementioned field. They will be chosen according to
their knowledge on the position listed on the preceding chapters.
URSB-personnel, who have considerable knowledge about the
management/production of the business efficiently and effectively, will
hold the position of the management.
A professor, who has a solid background about the marketing
aspects, will be designated to manage the marketing teams function.
A CPA-Professor, who has a solid experience in dealing with the
pressure of finance, will head the Finance Department.
Workers should be bonifide students of the University and are duly
certified as those who belong to the indigent families of the community.
D. Office Equipment
The business will be using one (1) computer set that will be
essential for the document processing and also for the communication
processes. There are some furniture and fixtures such as tables and chair
E. Administrative Expenses
There will be no administrative expenses because those instructors
composing different teams gave their time and expertise through their
professions. In this venture without any pecuniary considerations, just
respect and gratitude in accordance with the memo, they signed stated
that no additional compensation for their designation. They will only
do this for the sake of the University.
F. Schedule of Activities
This schedule of activities shows the pre-operating activities of the
business and the specified time each activity should be accomplished.
The purpose of this is for the proponents to choose what right kind in
order to complete the activities on the time. This is also to help them to
realize if they are doing in accordance with the plan.
Table 4.1
Schedule of Pre-operating Activities
Activities
Conducting Research and Finding
Months
September October
Feasible Location
Raising of Funds
November
Purchasing Activity:
Equipment
Materials
Finding of Potential Workers
Training of the Workers
Start of the Normal Operation
December
December
December
January
GANTT CHART
Months
Activities
September
Conducting Research and Finding Feasible Location
Raising of Funds
Purchasing Activity:
Equipment
Materials
Finding of Potential Workers
Training of the Workers
Start of the Normal Operation
October
November
December
January
Figure 4
ORGANIZATIONAL STRUCTURE
PRESIDENT
CHANCELLOR
DEAN
BICIDYE
RESEARCHERS
Financial Team
Marketing Team
Production Team
CHAPTER V
FINANCIAL PLAN
2009
360,000
2010
368,280
2011
376,752
2012
385,416
2013
394,280
283,500
288,849
294,303
299,860
305,525
76,500
79,431
82,449
85,556
88,755
14,400
10,000
1,500
750
14,400
10,500
1,500
750
14,400
11,000
1,500
750
14,400
11,500
1,500
750
14,400
12,000
4,500
1,500
50
50
50
50
150
1,656
8,000
1,000
39,144
1,600
1,700
1,400
1,720
1,000
49,631
1,000
52,049
1,000
54,956
1,000
53,485
2010
2011
2012
2013
Assets:
Cash
243,144
295,175
333,324
402,980
417,135
Accounts Receivables
84,456
80,000
85,000
70,000
86,000
1,656
1,600
1,700
1,400
1,720
Office Supplies
1,500
1,500
1,500
1,500
4,500
Computer
15,000
15,000
15,000
15,000
30,000
750
750
750
750
1,500
2,500
2,500
2,500
2,500
7,500
50
50
50
50
150
344,144
391,775
434,824
489,780
541,765
5,000
3,000
4,000
4,000
2,500
(10,000
)
Drawings
339,144
388,775
440,824
485,780
539,265
344,144
391,775
434,824
489,780
541,765
Capital
Auxiliary Data:
Cost of Goods Manufactured and Sold
2009
2010
2011
2012
2013
Direct Materials
Add: Packaging
Total Material Cost
Add: Direct Labor
Cost of Goods
179,100
90,000
269,100
14,400
183,219
90,900
274,119
14,731
187,433
91,800
279,233
15,070
191,743
92,700
284,443
15,417
196,153
93,600
289,753
15,772
283,500
288,849
294,303
299,860
305,525
2009
2010
2011
2012
2013
Capital Beginning
300,000
339,144
388,775
430,824
485,780
39,144
49,631
52,049
54,956
53,485
339,144
388,775
440,824
485,780
539,265
485,780
539,265
Capital Statement
Total
Less: Drawings
Capital End
10,000
339,144
388,775
2009
2010
430,824
Packaging
90000
Multiply: packaging
Total Package Cost
90000
2011
2012
2013
90000
90900
91800
92700
900
900
900
900
90900
91800
92700
93600
which serves as the researchers base year; year 2009 is the base year
because 2008 is a fiscal year.
Here are the following computations:
Return on Investment (2009)
ROI = Net Income / Average Total Asset
= 39,144 / 344,144
= 0.11
Return on Investment (ROI) measures the overall efficiency of the
firm in the management of the assets and in generating profit.
Net Profit Margin shows how much part of the net sales was
recognized as net income. Net income is the pure profit of the business
after deducting all the operating expenses incurred.
CHAPTER VI
Business Assumptions