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PROJECT SUMMARY

A. Name of the Cooperative Proponent

The project proponent is the FATIMA (VIGAN) MULTI-PURPOSE

COOPERATIVE with CDA registration No. 371.

B. Location
The cooperative proponent is located at Pantay Daya, Vigan City, Ilocos Sur.

C. Description of the Project

The proposed business project concerns with the manufacturing and selling of

different jars, trophies, and other souvenirs. The business aims to improve the quality of life

of producers and to lift the socio-economic condition of the people.

D. Project Long-range Objectives

This proposed business project may be used as an accessible manufacturing and

selling station for producer members of Fatima (Vigan) Multi- Purpose Cooperative.The

marketing of the products will be opened to students who will be willing to sell the products

in order to help them to have something for their school.

E Market Share, Market Projection, Market Price

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E.1.Market Share

The FVPMC center will cater not only the city of vigan but also the whole

province of Ilocos sur. It is prospected that there will be a big market for ceramics

products.

E.2. Market Price

The cooperative will offer a cheaper price compared the price of the

competitors.

F. Methods of Financing

The proposed project will be financed by the Fatima (Vigan) Multi-Purpose

Cooperative with a total capital requirements of 967,730.00

G. Feasibility Criteria
The proposed business is feasible based on surveys and studies conducted on its area

of operation. There is a big demand for services of the Ceramics production because there is

only one competitor here in Vigan.

H. SUMMARY AND CONCLUSION

A.MARKET FEASIBILITY
The Gap between demand and supply is seemingly demandable to

cover up its investments, because based on the number of buyers and users of

ceramics produced and a single manufacture ceramic in Vigan we can

conclude that there is a big demand. The propose business will serve this
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target namely the tourist, students and different municipalities of Ilocos sur.

B.TECHNICAL FEASIBILITY

The machineries, equipments and facilities are accessible with the

necessary facilities and manpower.

C.FINANCIAL FEASIBILITY

Since the business will be starting into high amount it will be finance

by Fatima (Vigan) Multi-Purpose Cooperative. On the financial analysis the

statements of financial condition operation, cash flows, capital requirement,

profitability test, and major assumptions are included. This business is surely

having a good financial health as shown on its accounting/financial

statements.

D.SOCIO-ECONOMIC FEASIBILITY

These propose business would be expected to help the economy

through the increase in employment rate, and additional government funds.

The enterprise major concerns are to preserve the environment. We will

provide jobs for the unemployed of the area. The salaries and wages of the

workers are used for their everyday living such as foods, shelter, clothing, and

education etc.

E. SUMMARY OF THE ORGANIZATION AND MANAGEMENT OF THE

BUSINESS
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I. MARKET ANALYSIS

A. Nature of the Product / Business

The proposed project which is the FVMPC Ceramics Production and

Marketing Business will be manufacturing ceramics to create jars, printed mugs,
lamps (Madonna or Aladin or Nightingale), table signs, and other souvenir items.

The objective of putting up the proposed business is to establish a production

and a market center for ceramics displays, souvenirs, house decors and tokens. The
business aims to improve the quality of life of producers and to lift the socio
economic condition of the people. This will also help the government in its aim to
lower the unemployment rate and to promote our local industry.

A.1. Ceramics Products

1. Jars ( small, medium and big)

2. Printed mugs
3. Lamps
4. Table signs

A.2. Target users of the product Ceramics Making Center

The final output will eventually be sold to tourist, foreigners coing from other
countries like Americans, Chinese or Koreans, and residents of Ilocos Sur like
students. Being mainly focused to the residents of Vigan City, it is also open to
residents outside Vigan City or municipalities in Ilocos Sur and also extends to
residents outside Ilocos Sur or what we call local tourists.

A.3. Areas of Dispersion

The areas of dispersion of our proposed project will be mainly at Vigan City,
Ilocos Sur. This will be the main target of the ceramics center. It will so be open to all
other Municipalities in Ilocos Sur.

A.4. Competitor
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There is only one strong competitor that could be a threat to the project
proposed but since it will be run as a cooperative, it will sure offer lower mark up on
the goods to be sold.

B. DEMAND AND SUPPLY

B. DEMAND

• The major consumers or expected buyers of the products are as follows:

a. Tourist
b. Residents of Vigan, Caoayan, San Vicente, Bantay and, Santa Catalina
c. Graduating Students

Table 1

Annual Volume of Domestic Demand for the Past 5 Years

YEAR ANNUAL DEMAND (units)

Jars
Small Medium Big Mugs Lamps Table Sign
2005 216 324 432 108 180 540
2006 238 356 475 119 198 594
2007 261 392 523 131 218 653
2008 287 431 575 144 240 719
2009 316 474 632 158 264 791
1,319 1,978 2,637 659 1,099 3,297

Table 1 shows the volume of Domestic Demand for jars in the past 5 years as
gathered by the researchers.

Table 2

Annual Volume of Domestic Demand for the 5 Years

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YEAR ANNUALDEMAND(units)
Jars
Small Medium Big Mugs Lamps TableSign
2010 348 521 695 174 290 870
2011 382 574 765 191 319 957
2012 421 631 841 210 351 1,053
2013 463 694 925 231 387 1,158
2014 509 763 1,018 254 425 1,274
2,122 3,183 4,244 1,061 1,773 5,312

It is assumed that the future demand for jars will increase by 10 % based on the
trend during the past 5 years.

C. SUPPLY
Table 3
Annual Volume of Domestic Supply for the Past 5 Years

YEAR ANNUAL Supply (units)

Jars
Small Medium Big Mugs Lamps Table Sign
2005 316 474 632 158 263 790
2006 348 521 695 174 289 869
2007 382 574 765 191 318 956
2008 421 631 841 210 350 1,051
2009 463 694 925 231 385 1,157
1,929 2,894 3,858 965 1,606 4,823

Since it was observed that there was over supply on the past 5 years, we will just add
1% of additional items base on the projected domestic demand for the next 5 years just to
cover an adjustment of demand just enough not to over stock products which might not be
sold for designs no longer fit the current trend of fashion.

Table 4

Annual Volume of Domestic Supply for the Next 5 Years

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ANNUAL Supply (units)

Jars
YEAR Small Medium Big Mugs Lamps Table Sign
2010 351 526 702 176 293 879
2011 355 531 709 177 296 887
2012 359 537 716 179 299 896
2013 362 542 723 181 302 905
2014 366 548 730 183 305 914
1,793 2,684 3,581 896 1,494 4,482

D. Price Analysis

Any amount left will be for future business expansion.

PRICE STUDY
PRODUCTS Competitors average price Selling price of our product
JARS small 150.00 100.00
JARS medium 200.00 150.00
JARS big 300.00 200.00
Printed Mugs 60.00 50.00
Lamps 100.00 80.00
Table Sign 300.00 250.00

The company will maintain the pricing strategy for 5 years. It is projected that
increase in operating cost will be covered by the increasing demand in the product and no
need for any price increase for the next five years in order to maintain good pricing image
and in order to maintain customers who might be willing to put trust and patronage our
product.

E. MARKETING PROGRAM STRATEGY

The marketing program presents the techniques and strategies of the business. The
future of any business establishments depends on the effectiveness of its marketing programs
and the process of implementing such program. This will include the price, product, and
place/channel of distribution, promotion, and service for the development of the business.
We decided to advertise our product through walk-in, e-mail companies with the some line of
the business and after a year if the business is successful they can advertise it in television.

• Product Strategy

The product strategy should also consider how the product is developed, the benefits
of the consumer gets from the product, and the most will be satisfaction of the consumers.
 Page |9

Since the product is Ceramics, packaging is easy. It has to be neatly placed in a box
suitable to its size. The labelling shall be the carrier of the product name and types. This is
being done to promote the product.

The package will be designed and labelled with the use of computers. The Ceramics
will be sold per piece, per consumers, per dozen, wholesale foe businessman, retailer for the
stall and will also sold the final consumer with the use of the store business.

• Price Strategy

The price of the product will depend on the price of raw materials such as ready mix
clay (white clay), Vigan clay, gas kiln (LPG tank), glaze, the technology used, operation
labor cost, service, and utilities such as electric.

The following cost shall depend on the following:

 The product must be affordable and at a reasonable price.

 Most of the competitive buyers are willing to buy because of the design and quality of
the product can give to the consumer.

• Channel of Distribution

The place or channel of distribution refers to the route as to where the products move
from the producers to the consumers-end users. The four levels as from producers and
wholesalers to retailers to the final consumer and other level is from producers to the
consumers, the delivery of the finished product will be systematized. In order to minimize the
waste of the time, the partner will make sure that the distribution will be on the first come
first served basis. The business will use both level of distribution wherein the manufacturing
and store will be located at one place.

• Promotional Strategy

The products that are introduced to the market must need to be recognized and must
get the consumers attention for the business to be a successful one.

 Radio advertising- to advertise the different service of the proposed project.

 Streamers- to advertise about the different activities that the project should to
conduct. One of the activities is Seminar.
 Delivery services- offer delivery services for rent depending upon the volume and
quantity of the ceramics and a souvenirs made.

• Service Strategy
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Ceramics Making Center will be operating 240 days per year. For the consumers to
consider this product, the manufacturing of the product will be open from 8 o’clock in the
morning up to 7 o’clock in the evening Monday to Friday.

II. TECHNICAL ANALYSIS

After determining the market size and area, product demand and growth, the potential
and technical feasibility of the project is analyzed.
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These aspects contains the description of the product, production process, production
schedule, machinery and equipment, raw-materials, plant location, production cost, labor
requirements and waste disposal. All of these considerations are to be discussed.

A.The Production Process

The manufacturer will produced Ceramics souvenirs, house decors and tokens. The
quality of the product should be unique. The manufacturing process involves machine
technology. The production starts from gathering of raw materials. Ready mix clay is
reformulated clay body composed of clay, silica, feidspar and ball clay. Ready mix Clay,
deflocullant (sodium silicate) water, mold, firing and kiln are the main materials of the
product. After the materials have been gathered the production can be easily designated to
attract costumers.

B.Machineries and Equipment

For the first year, the business will install some machinery. It is listed according to
type, department and section. The machinery that will be installed will be capable of making
a high quality of product. All types of machines that will be use are all brand new.

Office Manufacturing Equipment Requirements:

TABLE 6

Furniture, fixture and equipments

 P a g e | 12

EQUIPMENTS QUANTITY COST PER UNIT

TOTAL COSTSUPPLIER

Heat Press 1 12,000.00 12,000.00 Manila

Gas Kiln 1 150,000.00 300,000.00 Manila
Electric Potter Wheel 1 45,000.00 45,000.00 Manila
Glaze 1 30,000.00 30,000.00 Manila
Plaster Mold 2 10,000.00 20,000.00 Manila
Framing Machine 1 40,000.00 40,000.00 Manila
Ready Mix Clay 45 800.00 36,000.00 Manila
Vigan Clay (bags) 50 300.00 15,000.00 Bulala, Vigan
Paint (gallon) 5 450.00 2,250.00 Vigan Paint Center
Paint Brush 6 80.00 480.00 Vigan Paint Center
Multi cab 1 150,000.00 150,000.00 Manila
Total 650,730.00

Furniture and Fixtures:

FURNITURE & FIXTURES

QUANTITY COST PER UNIT
TOTAL COST
SUPPLIER

Office Table 7 2,000.00 14,000.00 Mike's dep't store

Chairs 10 200.00 2,000.00 Mike's dep't store
Computer 1 30,000.00 30,000.00 Mike's dep't store
Electric Fan 3 2,000.00 6,000.00 Mike's dep't store
Total 52,000.00

C. Supplies:
 P a g e | 13

OFFICE QUANTITY COST TOTAL SUPPLIERS

SUPPLIES PER COST
Masking Tape 50 pcs. 35.00 1,750.00 National Bookstore, Vigan City
Balpen 1 box 250.00 250.00 National Bookstore, Vigan City
Cutter 4 pcs. 12.00 48.00 National Bookstore, Vigan City
Stapler 5 pcs. 75.00 375.00 National Bookstore, Vigan City
Bond paper 2 rim 120.00 240.00 National Bookstore, Vigan City
Calculator 3 pcs. 200.00 600.00 National Bookstore, Vigan City
receipts 1 rim 320.00 320.00 Vigan Printing Press, Vigan City
3,583.00

The table show the facilities and supplies needed by the Ceramics Making Center.
The supply required to increase the 5% yearly.

D. Manufacturing Supplies/ Raw materials

RAW MATERIALS QUANTI COST PER TOTAL

Ready Mix Clay (bags) 45 800 36,000
Vigan Clay(bags) 35 350 12,250
Mold(pcs) 20 1,500 30,000
Paint(gallons) 15 300 4,500
Deflocullant(gallons) 10 650 6,500
Total Raw Materials 89,250.00

The raw materials to be purchased above will be able to produce finished 1,000 units.
The related breakdown is shown below:

Percentage of Productionof the Total RawMaterials

Jars
Small 12% 15
Medium 18% 23
Big 24% 30
Printedmugs 6% 8
Lamps 10% 12
Table signs 30% 37
125

E. The utilities requirements of the business are the following:

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Utilities/ factory overhead cost per month Cost

Electricity 2,500
Water 1,500
Telephone 1,500
Total 5,500

F. Labor Requirements

Manpower Requirement and Cost

Job title Number Salary/Monthly Total Salary for a Year
Manager 1 9,000.00 9,000.00 108,000.00
Cashier 2 6,000.00 12,000.00 144,000.00
Clerk 1 5,500.00 5,500.00 66,000.00
Skilleds Worker 5 6,600.00 33,000.00 396,000.00
Total 9 32,700.00 59,500.00 714,000.00

G. Waste Disposal

The waste materials of the business will be properly regulated to conform to the City
ordinance of Vigan City on which the project or business will be located.

FVMPC
CERAMICS
PRODUCTION

CASHIER

CLERK

SKILLED
WORKER
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ORGANIZATION AND MANAGEMENT ANALYSIS

A.Forms of Business/Ownership
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The FVMPC CERAMICS PRODUCTION AND BUSINESS shall owned and

managed by the Fatima (Vigan) Multi-Purpose Cooperative.

B. Organization and Structure of Cooperative

B.1. GENERAL ASSEMBLY:

The general assembly is composed of all the members entitled to vote and is the

highest governing-body of the cooperative.

POWERS OF THE GENERAL ASSEMBLY

Subject to the Provisions of the Cooperative Code of the Philippines and the rules issued

there under, the general assembly duly assembled shall have the following powers:

a.) To adopt and amend its Articles of Cooperation and By-laws, in accordance

With law;

b.) To elect, appoint or remove for cause any member of the Board of Directors,

Officer or Committee member of the Cooperative;

c.) To review, modify, reject or approve developmental plans and programs of the

Cooperative;

d.) To review and pass upon the reports of the Board of Directors, Officers and

Committees;

e.) To review, modify, reject or approve any substantial change in the financial and

operational policies of the Cooperative;

f.) To adopt a Cooperative seal; and exercise all other powers as may be authorized

by law and the Constitution.

 P a g e | 17

B.2. BOARD OF DIRECTORS

The Board of Directors shall direct, control and supervise the business, the property of

the Cooperative and may, by resolution, exercise all such powers of the Cooperative as are

not reserved for the general assembly under this By-laws and the Cooperative Code of the

Philippines.

B.3. COMMITTEES

B.3.1. AUDIT COMMITTEE

An audit committee is hereby created and shall composed of 3 members to be elected

during a general assembly meeting and shall hold office for a term of two (2) years until their

successors shall have been elected and qualified. Within then (10) days after their election,

they shall elect from among themselves a Chairman, Vice-Chairman and a Secretary. The

committee shall provide internal audit service, maintain a complete record of its inventory,

and submit an audited financial report quarterly or as may be required by the Board and the

general assembly.

B.3.2. ELECTION COMMITTEE

An election committee is hereby created and shall be composed of 3 members to be

elected during a general assembly and shall hold office for a term of two (2) years until their

successors shall have been elected and qualified. Within ten (10) days after their election

they shall elect from among themselves a Chairman, Vice-Chairman and a Secretary.
 P a g e | 18

The committee shall promulgate rules and regulations which shall govern and conduct

of elections; pass upon the qualifications of candidates; supervises the conduct of elections,

canvass and certify in writing the returns; proclaim the winning candidates; and hear and

decide all election protests. Election protests filed by members of the Election Committee

shall e decided by the Board of Directors.

B.3.3. EDUCATION AND TRAINING COMMITTEE

An education and training committee is hereby created and shall be composed of 3

members to be appointed by the Board of Directors and shall serve for a term of two (2)

years, without prejudice to their reappointment.

The committee shall be responsible for the planning and implementation of the

information, educational and human resources development programs of the Cooperative for

its members, officers and the Communities within its area of operation.

B.3.4. CONCILIATION COMMITTEE

A conciliation committee is hereby created and shall be composed of 3 members to be

elected during a regular general assembly meeting. Within ten (10) days after their elections

they shall elect from among themselves a Chairman, Vice-Chairman and a Secretary who

shall serve for a term of two (2) years or until their successors shall have been elected and

qualified.

B.3.5. CREDIT COMMITTEE

 P a g e | 19

The credit committee shall be composed of 3 members elected at the Annual General

Assembly for a term of two (2) years or until their successors are elected and qualified.

Within ten (10) days after their election, the members shall elect from among themselves a

Chairman, Vice-Chairman and a Secretary.

B.3.6. OTHER COMMITTEES

By a majority of all its members, the Board of Directors may form such other

committees, as may deem necessary for the smooth operation of the Cooperative.

B.3.7. OFFICERS OF THE COOPERATIVE

The cooperative shall have a Chairman, Vice-Chairman, Treasurer and a Secretary who

shall serve according to the functions of their respective offices.

C. Specific Department

The proposed project entitled FVMPC CERAMICS PRODUCTION AND

MARKETING BUSINESS is handled by the separate department.

D. PERSONAL REQUIREMENTS OF THE BUSINESS

 D.1. Manager
Job Description:
She/he shall mange the entire operation in making Ceramic products. She/he shall
implement good internal control of the business. Give instruction to the subordinates. She/he
should plan the formulation of personnel, policies, programs and activities directed toward
meeting the goal set forth by the organization. And lastly, he/she will be responsible for the
job assignment and continuing development of all the staff.
 P a g e | 20

Job Specification:
a. The manager is responsible to the General Manager of the Cooperative for the operation
of the business.
b. Must supervise his/her staff’s daily activities.
c. Must endorse checks and received payments.
d. To schedule for the purchasing of materials and other product inputs.
e. To monitor transactions.
f. To monitor the maintenance of the office/ building on its surroundings.
g. He/she is expected likewise the gen. manager the status of the operation and financial
reports about the project every month and attends all meetings.

 D.2.Cashiers
Qualification:
a. He/she must be at least a college graduate especially in Cooperative Management
Graduate.
b. He/she must be having a worked experience.
c. He/she must be honest, hardworking and must not have been convicted of any civil and
administrative cases.

Duties:
a. He/she records all the transactions
b. Keeping all documents of Cooperative safe

 D.3.Clerk
Qualification:
a. He must be at least a high school graduate.
b. He must be able to write and read weighing scale
c. He must be honest, hardworking and must not have been convicted of any civil and
administrative cases.
d. He must not be addicted to any vicious habits like gambling etc.

Duties:
a. Help the customers on delivery on the sold animals.
b. He should clean every now and then the cage of the animals.
c. Reports to the manager about any observation regarding about the daily operation of the
business.

 D.5 Skilled Laborer

Qualification:
a. Able to make ceramics product with minimum supervision
b. With enough and adequate knowledge on ceramic production
Duties:
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c. Create products base on the current design base on management initiative or clients
desire

SOCIO-ECONOMIC ANALYSIS

The socio-economic desirability of a project must be considered by every business

establishment and not only the profit to be realized. Society and economy must be derived
from net positive gains from the project for it will contribute to uplift the socio-economic
condition. The socio-economic analysis determines what are the benefits and contributions of
the proposed project to the consumers specially its contributions to the improvement of the
standards of living, community development and other factors pertaining socio-economic
aspects of the project. Therefore, this study will briefly explain the effect of the project to
the:

• Employment and Income

The business is in need of people to work for the operation of it. Qualified and
educated persons for higher positions and for lower positions are any men which can perform
the job as utility of labourers. Providing these lower positions will decrease the number of
men who are jobless. Proper compensation and benefit must be provided to support their
families too. And if the business will continue to progress them more workers will be hired in
order to meet the increasing demand for the product. Therefore, as a job provider, the
business is a greatly help in improving the standard of living of particular individuals.

• Government

The proposed business is to be implemented by a cooperative, therefore, it is

exempted to any taxes and it can’t give revenues to the government, what it can only
contribute is in terms of Community development through providing Financial assistance to
those who are in need members through loans for providential and productive purposes and
such other services.

• Demand for the Products

In the study of the demand and supply of the products, the demand is higher
compared to supply, therefore, the existing of the business is a help to meet the increasing
number of demands implementing a price that is lower compared to the other suppliers.

• Other Contributions

To the Cooperative, the proposed business will be the main source of income of it
which will lead to the provision of more services that will extent to the members.
 P a g e | 22

To the members, since the cooperative will be earning more income, expectedly the
return of investment of members will increased. Members who will patronize the business
will received more benefits. To the consumers, this business will provide them a lower
price that will lessen their burdens in terms of the prices of the products.

FINANCIAL ANALYSIS

On the table below, it is shown the comparison of prices scheme of competitors along
with out planned pricing strategy. Our pricing is geared with the present strategy of
cooperatives. It is not profit oriented but will only put mark up on the products enough to
cover the cost of materials, production or manufacturing costs, operating expenses,
administrative cost, selling expenses and other maintenance and miscellaneous expenses.
 P a g e | 23

Any amount left will be for future business expansion.

PRICE STUDY
PRODUCTS Competitors average price Selling price of our product
JARS small 150.00 100.00
JARS medium 200.00 150.00
JARS big 300.00 200.00
Printed Mugs 60.00 50.00
Lamps 100.00 80.00
Table Sign 300.00 250.00

The company will maintain the pricing strategy for 5 years. It is projected that
increase in operating cost will be covered by the increasing demand in the product and no
need for any price increase for the next five years in order to maintain good pricing image
and in order to maintain customers who might be willing to put trust and patronage our
product.

A. Major Assumptions

Assumptions are made for the analysis of financial projection. It includes the
assumed expenses revenues and other accounts affecting the balance sheet on statement
of financial conditions, income statement or statement of operation and cash flows
statement. Given below are the assumptions made.

a. The business proposed will only rent a space on its proposed location. On its
projected 5 years operation, no business expansion will take place and will as a
lessee.
b. Projected sales were based on the table shown on the preceding topics regarding
the future domestic demand on the product for the next 5 years.
c. Our company will on put 25% mark up on our product. It is just enough to cover
all the operating expenses of the business. Patronage refund will be declared
only after five years base on the net income to be declared by the Cooperative
with due regards to the plans of the business to retain enough funds for future
expansion.
d. The projection on salaries and wages, 10% will be the yearly increase and
additional staffs are not yet included in the projections for this will be further
determined by the management.
e. Cost of Sales includes the following:
a. raw materials
b. indirect materials
c. direct labor ( includes the salaries of skilled
workers)
d. factory overhead (it includes the depreciation of
equipments used in the production)
 P a g e | 24

 Depreciation expenses of machineries and equipment, furniture

and fixtures and motor vehicles were assumed to have a 20% salvage
value. The useful life of machineries and equipments, furniture and
fixtures and motor vehicles were 15 years, 10 years and 15 years
respectively. Depreciation expenses were computed on a straight line
method.
 Sales were assumed to be on cash sales. It was on the plan of
the proposed project to not extend yet sales on credit on the first 5
years to easily recover the cost of investment and to avoid at the
moment the risk of uncollectible. But the proposed project will be
open to the possibility of determining the necessity and right time of
extending credit if circumstances would permit.
 All the expenses were assumed to increase up to 10% only to
cover inflation on the value of the money.
 There were no major additions on the property like equipments,
furniture and fixtures and so with the delivery truck during the
projected 5 year period. This is on the ground that properties were
properly maintained by the management. Though there are unexpected
circumstances that could either necessitate addition and disposal of
properties but in order to be conservative at the moment, we assumed
that the business would run smoothly and effectively.

Estimated Cost of the Project/ Initial requirements of the Business

As start up capital, the business will start or will need the amount of P
967,730.00 as a project cost to cover up the pre-operating cost and fixed costs. The
details are shown below:
 P a g e | 25

For Merchandise Inventory P 250,000.00

Land -
Building -
Delivery Truck 150,000.00
Furniture and Fixtures 52,000.00
Equipments 500,730.00
Total Fixed Costs 952,730.00
Add: Pre-Operating Costs
Registration of Feasibility Study 5,000.00
Registration and Other Organization Cost 6,000.00
Permits and Licenses 3,000.00
Other miscelleneous expenses 1,000.00
15,000.00
Total Project Cost P 967,730.00

B. Source of Capital

Fatima (Vigan) Multi-Purpose cooperative will provide for the funding or capital of
the proposed ceramics making center.

C. Projected Statement of Operation/Income Statement

 P a g e | 26

INCOME S TATEMENT
For the Year 2010 2011 2012 2013 2014

Sales 2,364,670.00 2,646,040.00 2,910,810.00 3,202,140.00 3,522,520.00

Les s : Cos t of Sales
Inventory, beginning - 216,950.90 229,698.16 52,242.19 118,917.05
Purchas es (net) 940,445.10 949,762.80 959,401.80 1,415,689.86 1,477,571.05
Freight In 18,808.90 18,995.26 19,188.04 28,313.80 29,551.42
Total Purchas es 959,254.00 1,185,708.96 1,208,287.99 1,496,245.85 1,626,039.53
A dd: Production Cos t
Direct M aterials 522,469.50 527,646.00 533,001.00 538,356.00 543,711.00
Direct Labor 313,481.70 316,587.60 319,800.60 323,013.60 326,226.60
Overhead 313,481.70 316,587.60 319,800.60 323,013.60 326,226.60
Total Production Cos t 1,149,432.90 1,160,821.20 1,172,602.20 1,184,383.20 1,196,164.20
Total Goods A vailable for Sale 2,108,686.90 2,346,530.16 2,380,890.19 2,680,629.05 2,822,203.73
Les s : Inventory, End 216,950.90 229,698.16 52,242.19 118,917.05 4,187.73
Cos t of Sales 1,891,736.00 2,116,832.00 2,328,648.00 2,561,712.00 2,818,016.00
Gros s Profit 472,934.00 529,208.00 582,162.00 640,428.00 704,504.00
Les s : Operating Expens es
Selling Espenses:
A dvertis ement Expens e 2,000.00 2,200.00 2,420.00 2,662.00 2,928.20
Trans portation Expens es 5,000.00 5,500.00 6,050.00 6,655.00 7,320.50
Fuel & Lubricant Expens es 3,000.00 3,300.00 3,630.00 3,993.00 4,392.30
Telephone/Internet Expens es 500.00 550.00 605.00 665.50 732.05
Administrative Expenses:
Salaries and W ages 318,000.00 349,800.00 384,780.00 423,258.00 465,583.80
Supplies Expens es 3,583.00 4,299.60 5,159.52 6,191.42 7,429.71
Rent Expens es 24,000.00 24,000.00 24,000.00 24,000.00 24,000.00
Permit, Taxes and Licens es 3,000.00 3,300.00 3,630.00 3,993.00 4,392.30
Training & Seminar Expens es 5,000.00 6,000.00 7,000.00 8,000.00 9,000.00
Othe Operating Expenses:
Pre-Operating Cos t 15,000.00
Power, Light and Power 5,500.00 6,600.00 7,920.00 9,504.00 11,404.80
Repairs and M aintenance 1,000.00 1,200.00 1,440.00 1,728.00 2,073.60
Emloyees Benefit 27,000.00 29,700.00 32,670.00 35,937.00 39,530.70
Depreciation of Furniture 4,160.00 4,160.00 4,160.00 4,160.00 4,160.00
M is celleneous 1,000.00 1,010.00 1,020.10 1,030.30 1,040.60
Total Expens es 417,743.00 441,619.60 484,484.62 531,777.23 583,988.56

Net Income/Net S urplus 55,191.00 87,588.40 97,677.38 108,650.78 120,515.44

D. 4Allocation of Net Surplus

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2010 2011 2012 2013 2014

Allocation of Net Surplus
General Reserve Fund (10%) 5,519.10 8,758.84 9,767.74 10,865.08 12,051.54
Cooperative Education and Training Fund:
Due to Apex (5%) 2,759.55 4,379.42 4,883.87 5,432.54 6,025.77
Local (5%) 2,759.55 4,379.42 4,883.87 5,432.54 6,025.77
Optional Fund (10%) 5,519.10 8,758.84 9,767.74 10,865.08 12,051.54
Interest on Share Capital (35%) 19,316.85 30,655.94 34,187.08 38,027.77 42,180.40
Assumptions:
Patronage Refund (35%) 19,316.85 30,655.94 34,187.08 38,027.77 42,180.40
Net Surplus as Allocated 55,191.00 87,588.40 97,677.38 108,650.78 120,515.44

E. Projected Statement of Cash Flows

STATEMENT OF CASH FLOWS
For the Year 2010 2011 2012 2013 2014

Cash Inflows:
Initial Investment 967,730.00
Cash sales 2,364,670.00 2,646,040.00 2,910,810.00 3,202,140.00 3,522,520.00
3,332,400.00 2,646,040.00 2,910,810.00 3,202,140.00 3,522,520.00
Cash Outflows
Total Selling, Administrative &
Operating Expenses 413,583.00 437,459.60 480,324.62 527,617.23 579,828.56
Cost of Production 1,857,030.40 2,082,126.40 2,293,942.40 2,527,006.40 2,783,310.40
Merchendise Invenotry 216,950.90 229,698.16 52,242.19 118,917.05 4,187.73
Equipment and Furnitures 702,730.00
3,190,294.30 2,749,284.16 2,826,509.21 3,173,540.68 3,367,326.69
Net Inflows(Outflows) 142,105.70 (103,244.16) 84,300.79 28,599.32 155,193.31
Cash at the Beginning - 142,105.70 38,861.54 123,162.33 151,761.65
Cash at the End 142,105.70 38,861.54 123,162.33 151,761.65 306,954.96

F. Projected Statement of Financial Position/Balance Sheet

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BALANCE S HEET
For the Year 2010 2011 2012 2013 2014

Current Assets:
Cash 142,105.70 38,861.54 123,162.33 151,761.65 306,954.96
M erchendise Inventory 216,950.90 229,698.16 52,242.19 118,917.05 4,187.73
Total Current Assets 359,056.60 268,559.70 175,404.52 270,678.70 311,142.69

Fixed Assets:
M achinery and Equip ment 500,730.00 500,730.00 500,730.00 500,730.00 500,730.00
Less: Accumulated Dep reciation 26,705.60 53,410.60 80,116.20 106,821.80 133,527.40
Net 474,024.40 447,319.40 420,613.80 393,908.20 367,202.60
Furniture and Fixtures 52,000.00 52,000.00 52,000.00 52,000.00 52,000.00
Less: Accumulated Dep reciation 4,160.00 8,320.00 12,480.00 16,640.00 20,800.00
Net 47,840.00 43,680.00 39,520.00 35,360.00 31,200.00
M otor Vehicles 150,000.00 150,000.00 150,000.00 150,000.00 150,000.00
Less: Accumulated Dep reciation 8,000.00 16,000.00 24,000.00 32,000.00 40,000.00
Net 142,000.00 134,000.00 126,000.00 118,000.00 110,000.00
Total Fixed Assets 663,864.40 624,999.40 586,133.80 547,268.20 508,402.60

Total Assets 1,022,921.00 893,559.10 761,538.32 817,946.90 819,545.29

Liabilities:
Interes t on Share Capital 19,316.85 30,655.94 34,187.08 38,027.77 42,180.40
Patronage Refund Payable 19,316.85 30,655.94 34,187.08 38,027.77 42,180.40
Due to Apex - CETF 2,759.55 4,379.42 4,883.87 5,432.54 6,025.77
Total Liabilities 41,393.25 65,691.30 73,258.03 81,488.08 90,386.57
- - - - -
Equity
Home Office Equity 967,730.00 805,970.70 663,860.94 709,296.12 699,029.87
Statutory Res erves:
General Res erve Fund 5,519.10 8,758.84 9,767.74 10,865.08 12,051.54
CETF - Local 2,759.55 4,379.42 4,883.87 5,432.54 6,025.77
Optional Fund 5,519.10 8,758.84 9,767.74 10,865.08 12,051.54
Total Reserves 13,797.75 21,897.10 24,419.35 27,162.70 30,128.85
Total Equity 981,527.75 827,867.80 688,280.29 736,458.82 729,158.72
Total Liabilitites & Equity 1,022,921.00 893,559.10 761,538.32 817,946.90 819,545.29

G. Financial Statement Analysis

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Average Net Cash Flow = 182,800.31

Ratio = 5.29

2 Return on Investment - measures the earning power the project will provide to the
Net Surplus 120,515.44
Total Equity = 729,158.72

Ratio = 0.17

Analysis:

This means that in 2014 the total equity earned 17% already.

3 Return on Assets - measures the earning power of the total assets utilized in the
Net Surplus 120,515.44
Total Assets = 819,545.29

Ratio = 0.15

Analysis:
This means that by 2014 the total assets used in managing the affairs of the
project earned 15%.

4 Profit Margin - measures the percentage of net income earned from sales.
2010 2011 2012 2013 2014
Net Surplus 55,191.00 87,588.40 97,677.38 108,650.78 120,515.44
Total Sales = 2,364,670.00 2,646,040.00 2,910,810.00 3,202,140.00 3,522,520.00

Ratio = 0.02 0.03 0.03 0.03 0.03

Analysis:
This means that as a percentage of sales, profit was 2% in 2010, 3% in 2012
to 2014.

5 Current Ratio - measures how well the cooperative is being able to meet currently
2010 2011 2012 2013 2014
Current Assets 359,056.60 268,559.70 175,404.52 270,678.70 311,142.69
Current Liabilities = 41,393.25 65,691.30 73,258.03 81,488.08 90,386.57

Ratio = 8.67 4.09 2.39 3.32 3.44

Analysis:
This shows that the project is very liquid in that P8.67 is available for every
peso of current liability in 2010, P4.09 in 2011 P2.39 in 2012, P3.32 in
2013and P3.44 in 2014.

Appendix A
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Definition of Terms:

1. Ready Mix Clay – is pre-formulated clay body composed of clay, silica, feldspar, and
ball clay

2. Deflocculates – it is a base material, usually sodium silicate or sodium bicarbonate,

used to thin a slip

3. Glaze – is a semi-vitreous material applied to the ceramic ware, which forms a glossy
bond when fired at maturing temperature

4. Glaze firing – is the process where bisque fired articles are applied with glaze and
fired at maturing temperature

5. Kiln – is a refractory chamber where ceramic articles are fired

6. Plaster mold – is a material formed to produce quantities of desired identical clay

products

Appendix B

FATIMA (VIGAN) MULTI – PURPOSE COOPERATIVE

Pantay Fatima, Vigan City
CDA CONFIRMATION NO.371
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VISION

We envision a model successful and multi-millionaire cooperative that is owned and

managed by active, supportive, trusted, responsible and self-reliant officer, management staff
and members in order to improve the economic, socio, political and spiritual status of the
member and to make help the community a better place live in through cooperativism.

MISSION

1. To strengthen membership and capital build-up program.

2. To promote the cooperative as a way of life for improving the social and economic well-
being at the people.
3. To expand and strengthen the members self-government to improve society and/ or
economic well-being under a truly just, democratic society.
4. To establish, expand and strengthen program and services that supports and enhances
education, environmental protection and youth involvement.
5. To establish a good working relationship between and among members, officers and
management staff.
6. To top and strengthen coordination or collaboration with local and foreign institution for
financial, technical, educational and research for the cooperative and community
development.
7. To review, update and modify policies and systems in order to make it more relevant for
the growth at the cooperative.
8. To continue giving education to the members.

Appendix C

Fatima (Vigan) Multi- Purpose Cooperative

CDA Confirmation No. 371

History of Fatima (Vigan) Multi- Purpose Cooperative

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Abridged from the original version by Rolando R. Repato

The Fatima (Vigan) Multi- Purpose Cooperative traces its history from Pantay Fatima, a tiny
place and remote barangay of Vigan City. Its is known as the home of the nuns belonging to
the Order of Saint Benedict, a religious congregation which has made Pantay Fatima its
home after World War II.

The union itself began in October 1968, a time when the nation was faced with an
economic crisis that was felt even in the country sides.
With their apostolic missions in the barrio, the Reverent Mother Benedict Dhiel, a German
national, saw the needs of building the community through cooperatives. In the beginning the
idea seamed unacceptable considering the barrio’s “Kanya- kanya” culture.

The idea reached his Excellency Juan Sison, the Archbishop of Nueva Segovia. And
as if by heavenly design, the Field Secretary of the Knights of Columbus, Mr. Augusto G.
Mer who active in the organization of credit unions, was in town. The OBS sisters called a
barrio meeting to discuss the possibility of putting up credit union. Many of the barrio folks,
numbering about thirty come for different reasons. Some liked the idea, but most came out of
curiosity. Unexpectedly only twenty five (25) people which was the legal requirements in the
organization of a credit union; some of the Sister joined to complete the group. Their labour
was compensated when the cooperative was usefully launched with the members coming
from all walks of life, and with an aggregate initial capital of Four Hundred Twenty Two
Pesos (P422.00), the Fatima (Vigan) credit union, Inc. was born.

The first year of operation was rewarding. The vision of Rev. Mother of Benedict
Diehl, OSB was fulfilled with materials, spiritual and moral enlistment of the barrio
residents. Since the baby credit union could not yet affords to pay the services of its officers
and staff, most of them where paid gratis. However, the initial success of the union was more
than enough compensation to keep them inspired and get going.
This success of the union was good news that spread like wildfire in the neighbouring
barrios. The Saint Benedict Institute (SBI) provided the credit union with an office space in
its building for free.

In retrospect, the hardships and perseverance undergone by the union in its beginning
years have definitely paid off. It attracted people from all not only from the barrios of Vigan
but also the neighboring towns. Membership swelled in numbers and sprouted like
mushrooms. It was slow but sure walks. Eventually, the union was able to extend not just
loan but other services like saving and time deposits, youth savers clubs and the mortuary
aid.

In1985, AFTER SEVENTEEN YEARS OF OPERATION, THE Fatima (Vigan)

Credit Cooperatives, Inc attained the status of being in the elite circles of millionaire
cooperatives. With a million in its coffers, it yielded financial gains as seen by a recorded
average growth rate of 10-12%.
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In 1992, the total assets of the cooperative had more than P7 million and growing. This
growth inspired the Sisters of the Benedictine Community to establish a cooperative of their
own. Thus, on September 17, 1990 the Sisters withdrew some of their money from the Union
amounting to P9000.00 and put up the Queen of Peace Multi-Purpose Cooperative, Inc at
their new mother house in Nagtangan, Damortis, and La Union. The move was meant to
uplift the lives of the people living around their convent as a part of their apostolate.

In October 1993, the Fatima (Vigan) Credit Cooperative celebrated its Silver Jubilee
Anniversary. The year was marked with more achievements. Apart from the numerous
awards the FVCCI was given in the past, it was also cited by the National Economic
Protectionism Association (NEPA) as one of the Most Outstanding Entrepreneurial
Cooperative in the Ilocos Sur, a joint undertaking of the Cooperative Development Authority
(CDA) and the Ilocos Sur Federation of Cooperative (ISFC).

The Cooperative continued to grow. With only an asset of Twelve Million, the FVCCI
hit the one million mark with its 1,165,062.49 income in 1996.Aside from the financial gains,
the coop lab also experienced some transformations. After 27 years of being led by old
timers, the chairmanship in the Board of Director was assumed by a young member
belonging to the build to the third generation. Driven by vitality and aggressive of youth, the
new management courageously employed non- traditional leadership style. It paved way too
many changes, the major of which was the remaining of the union from Fatima (Viagn)
Credit Cooperative Inc. (FVMPC) to Fatima (Vigan) Multi-purpose Cooperative.

The new coop. promised new hopes, opportunities and better services. New load
services were introduced to meet the needs of the members. Among these services were the
cell phone loan, salary loan, and appliances loan. A consumer’s department store was opened
to cater to the daily needs of the members. Three scholars were sent to college by the
cooperative in the fulfilment of its commitment to education. The FVMPC also established
the first ever cooperative library in the province- The Dr. Jose P. Rizal Memorial Koop
Library- The library served everyone, especially the students of the locality. The year also
marked the first ever award that catapulted FVMPC to fame. FVMPC bagged this year’s
award for the “Search for Most Outstanding Cooperative in Ilocos Sur and Region I”
sponsored by the Cooperative Development Authority (CDA).

After 29 years of operation, the FVMPC stands firm in its commitment to sustain the
development it achieved. It will continue to work for the benefit of its members, adhere to
Cooperative principles without compromise, and continue to be the most Liquid cooperative
in Ilocos Sur.
For all that it is now; the Cooperatives owe everything from God, through this
instrument, the Rev. Mother Escolatica Alber, OSB, and all the sisters and nuns who lived
the Congregation’s guiding motto----“ORA ET LABOR.
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