Southern Philippines Agri-business and Marine

And Aquatic School of Technology

College of Agricultural Sciences
Matti, Digos City

Ayala Agricultural Development Corporation

Darong Ranch Employees Multi-Purpose Cooperative
Darong, Sta. Cruz, Davao del Sur

PRODUCTION

OF

QUALITY COCONUT

PLANTING MATERIAL

Johnmark L. Gulles
III- BSA
 SUMMARY

Ayala Agricultural Development Corporation Darong Ranch Employees Multi-

Purpose Cooperative is located at Darong, Sta. Cruz, Davao del Sur. This MPC produces
different products, such as copra, whole nut, coconut seedling, Cardava banana,
Brahman cattle and other coconut by-products. Due to the demand, they are working to
improve their coconut seedling production. Skilled workers who are knowledgeable in
seed nut selection and nursery management should be hired. The facility should be
improved, e.g. proper arrangement of the seedlings according to variety and proper
spacing for the convenience of the workers to attain quality production. Coconut
seedling production is the main scope of this business plan.
Coconut is one of the main crops grown in our country. And there are products
now arise out of this coconut plant. But most of the coconut trees are already old, and
it affects the productivity of the plant. Establishing a coconut nursery helps farmers to
select good quality seedlings to be used as planting material, as replacement of these
old-grown coconut trees.
The nursery is placed in proper location where the accessibility is easy. It is
being managed by Nemesio C. Belonias as to supervise the whole production period.
Only two (2) men are needed for the maintenance and monitoring, for seedlings is not
so laborious in terms of care. Before sowing the seed nuts, these should be properly
selected. Seed nuts should be disease-free, undamaged by insects and rodents,
physiologically mature, without deep punctures or cuts, water content create “sloshing
sound” when shaken, ungerminated and resembles the distinct appearance of the
specific variety. It is much better if the persons who will take-charge for the care and
maintenance have the knowledge of seed nut selection and nursery management.
The varieties in this nursery are Tagnanan Tall, Baybay Tall, Java Tall and
Tacunan Green Dwarf. Tagnanan Tall is the most common variety and has the highest
number of seedlings in the nursery. But all of these varieties are PCA-recommended
and NSIC-registered. The sources of these seed nuts are the Ayala Agricultural
Company itself, Darong Agricultural and Development Association and the PCA Seed
Farm. Customers (farmers/coconut growers) can assure that they can purchase good
quality and recommended variety of coconut seedlings.
The business has 20,000 seedlings in the nursery, that is: 11,945 Tagnanan Tall;
3,315 Baybay Tall; 3,200 Java Tall; and 1,540 Tacunan Green Dwarf. Seed nuts are
bought for the following prices: Tagnanan Tall for 10.00php each and the rest of the
varieties for 15.00php each seed nut. And when sold, Tagnanan Tall is at 25.00php per
seedling and the rest of the varieties at 35.00php each. Out of these 20,000 seed nuts,
it is estimated to have 85% germination or 17,000 seedlings grown successfully and
16,000 seedlings are projected to be sold. Seed nuts are grown and after six (6)
months, not more than, seedling should be sold to be planted. The capital requirement
for this business is about 380,000.00php, including direct and indirect costs and it will
give you a profit of approximately 90,000.00php per harvest.
 GOALS

The goals of the business include producing high-yielding and disease and insect
pest resistant varieties of coconut. This business also wants to help farmers to purchase
recommended varieties of coconut planting material. Through establishing coconut
nursery, it helps heighten the coconut industry in the country.

MANAGEMENT AND ORGANIZATION

Employees Required for Each Activity

ACTIVITY NUMBER OF LABORERS

1. Supervision 1
2. Land Clearing 3
3. Plowing 1
4. Harrowing 1
5. Sowing 2
6. Constructing the Nursery Building 2
7. Maintenance and Monitoring 2
8. Harvesting 5

The whole duration of the coconut seedling production will be supervised by

Nemesio C. Belonias, the Cooperative Manager. There are two (2) hired employees who
will take charge on maintenance and monitoring. Persons involved on the rest of the
activities will be hired laborers only.
Supervisor’s salary will be 3,000php per harvest. For land clearing, each person
will be paid 165.00php per day (regular rate). For plowing, 700php will be paid for the
laborer until the activity is done, as well as in harrowing. For sowing, the person in-
charge for maintenance and monitoring can be hired for this activity with regular rate.
In harvesting the seedlings, another 5 persons will be hired as laborer with the same
rate. For the construction of the nursery building, two men are hired for this activity
and will be paid 300.00php per day.
 MARKETING PLAN

The product of this business is coconut seedling. Customers can choose varieties
such as Tagnanan Tall, Baybay Tall, Java Tall and Tacunan Green Dwarf. Varieties
being produced must have longer productive life, high yielding and has high resistance
in disease and insect pests. The customers are the coconut growers and other walk-in
farmers. Customers will buy coconut seedlings from the business for they will produce
good quality and PCA-recommended and NSIC-registered varieties.
Coconut seedlings have the following prices: Tagnanan Tall- 25.00php; Baybay
Tall- 35.00php; Java Tall- 35.00php; and Tacunan Green Dwarf- 35.00php. Customers
are able to buy up to 1,000 seedlings or 25,000php to 35,000php.
The nursery is located within the area of AADC Darong Ranch Employees Multi-
Purpose Cooperative at Darong Sta. Cruz, Davao del Sur. The area is accessible for any
vehicle. Seedlings will be easily transported and it avoids damages. Suppliers of seed
nuts are from farmers within the cooperative and in PCA Seed Farm. Customers are
from both neighboring farms and provinces. It is said that good products will sell its
self. By establishing a good name through quality products, business will attract more
customers. Putting signboards and streamers, telling people that there is available
coconut seedlings in your farm will also help.
Customers might be men or women as long as they are interested on coconut
farming and are willing to buy coconut seedlings. They are mostly of legal age and able
to plant and manage a coconut farm. They should be treated as the most important
element and the boss of the business.
There might be many other coconut nurseries in other places which are not
known, whether they are getting bigger or smaller. Even customers who are going to
our competitors are not known as well. The important thing is that you focus on
producing quality seedling and to build good relationship with the customers you have.
And to attract more customers, promotion of coconut farming on potential places will be
held.
Comparing their products with the products of their competitors, the price might
be the same but the quality of our variety is better. In terms of accessibility, our
business is also accessible. Therefore, this business doesn’t need to be changed, yet it
only needs to be improved. Improvements may include hiring of skilled workers
especially on maintenance and monitoring. Arrangement of seedlings according to
varieties should be made as well as proper spacing for the convenience of the workers
to attain quality production of coconut seedlings.
 THE WORK PLAN

Seasonal Requirements Work Plan for 6 months of Coconut Seedling Production (Labor)

TASK No. of No. of Periods Rate of Period Total Cost

Laborers (php)
1. Slashing 3 1 day 165.00php/person/day 495.00
2. Plowing 1 (pakyaw) 700.00php 700.00
3. Harrowing 1 (pakyaw) 700.00php 700.00
4. Constructing 2 2 days 300.00php/day 1,200.00
the Nursery
Building
5. Sowing 2 6 days 165.00php/person/day 1,980.00
6. Maintenance 2 Whole period 15,840.00
and Monitoring (total of 48 165.00php/person/day
days)
7. Harvesting 5 1 day 165.00php/person/day 825.00
Total Labor Cost=
21,740.00

Seasonal Requirements Work Plan for 6 months of Coconut Seedling Production

(Material)

MATERIAL No. of Units Rate per Unit Total Cost

1. Tagnanan Tall 11,945 pcs. 10.00php/pc. 119,450.00
2. Baybay Tall 3,315 pcs. 15.00php/pc 49,725.00
3. Java Tall 3,200 pcs. 15.00php/pc. 23,100.00
4. Tacunan Green Dwarf 1,540 pcs. 15.00php/pc 48,000.00
5. Ammonium Sulfate 19,200.00
(As, 21-0-0) 1,200 kg. 16.00php/kg.
6. Potassium Chloride 36,400.00
(KCl, 0-0-60) 1,300 kg. 28.00php/kg.
7. Sodium Chloride 24,000.00
(NaCl, common salt) 1,200 kg. 20.00php/kg.
8. Insecticide 1L 820.00php/L 820.00
Total Material Cost= 320,695.00
Total Direct Cost (Labor + Material)= 341,235.00

START-UP CAPITAL

START-UP CAPITAL PHP

A.) Investment
 a.) Total Money for Nursery Buildings 3,000.00
b.) Total Money for Tools 7,380.00
Total Investments (a + b)= 10,380.00
B.) Working Capital
c.) Total Money for Raw Materials 320,695.00
d.) Total Money for Wages 21,740.00
e.) Total Money for Rent of Land 2,000.00
f.) Total Money for Other Costs (water and transportation of seed 21,940.00
nuts)
Total Working Capital (c + d + e + f)= 366,375.00
Total Start-Up Capital (total investment + total working capital)= 376,755.00

PROJECTED INCOME STATEMENT

Projected Income Statement for Two Harvests

First Harvest Second Harvest

SALES 473,080.00 456,000.00
Less Direct Material 320,695.00 320,695.00
Less Direct Labor 21,740.00 20,540.00
GROSS PROFIT 130,645.00 114,765.00
Indirect Costs
Rent for Land 2,000.00 ―
Water 1,800.00 1,800.00
Owner’s Salary 3,000.00 3,000.00
Stationary (Transportation of Seedlings) 20,140.00 20,140.00
Furniture and Building 10,380.00 ―
Depreciation 988.00 988.00
Others 1,000.00 1,000.00
TOTAL INDIRECT COSTS 39,308.00 26,928.00
NET PROFIT (Gross Profit – Total Indirect 91,337.00 87,837.00
Costs)

Projected Sales

A. Prices
 Product Price per Seedling
Tagnanan Tall 25.00php
Baybay Tall 35.00php
Java Tall 35.00php
Tacunan Green Dwarf 35.00php

B. First Harvest (16,000 Seedlings Sold out of 20,000 sown)

Product No. of Seedlings Price per Seedling Total Cost

Sold
Tagnanan Tall 8,692 25.00php 217,300.00
Baybay Tall 3,073 35.00php 107,555.00
Java Tall 2,937 35.00php 102,795.00
Tacunan Green 1,298 35.00php 45,430.00
Dwarf
Total Seedling Sold= Total Sales= 473,080.00
16,000

C. Second Harvest (15,000 Seedlings Sold out of 20,000 sown)

Product No. of Seedlings Price per Seedling Total Cost

Sold
Tagnanan Tall 8,650 25.00php 216,250.00
Baybay Tall 3,085 35.00php 107,975.00
Java Tall 2,679 35.00php 93,765.00
Tacunan Green 1,086 35.00php 38,010.00
Dwarf
Total Seedlings Sold= Total Sales= 456,000.00
15,500

CASH FLOW PLAN

*Two Harvests in a Year

 First Harvest Second Harvest (July)
(January)
Sources of Cash Sales
Cash at the Start of the Month 91,337.00
Cash In from Sales 473,080.00 456,000.00
Total Cash In 473,080.00 456,000.00
Uses of Cash
Cash Out for Direct Material Costs 320,695.00 320,695.00
Cash Out for Direct Labor Costs 21,740.00 20,540.00
Cash Out for Indirect Labor Costs 3,000.00 3,000.00
Cash Out for Tools 7,380.00 ―
Cash Out for Rent of Land (good for 2,000.00 ―
1 yr.)
Cash Out for Transportation of 20,140.00 20,140.00
Seedlings
Cash Out for Water Payment 1,800.00 1,800.00
Cash Out for Nursery Building 3,000.00 ―
Any Other Cash Out 1,988.00 1,988.00
Total Cash Out 381,743.00 368,163.00
Net for the Harvest 92,537.00 87,837.00
Cash at the End of the Month 91,337.00 179,174.00

BREAK EVEN ANALYSIS

A. First Harvest
Break Even Point Sales Level

I. Calculate Gross Profit

Total Sales in Your Business 473,080.00

Less
Total Direct Costs 342,435.00
(Direct Material Costs and Direct Labor Costs)
GROSS PROFIT 130,645.00

II. Calculate Gross Margin

Gross Margin= Gross Profit ÷ Total Sales 130,645.00

473,080.00

GROSS MARGIN= 0.27 or 27%

III. Calculate Total Indirect Costs

Indirect Costs
Rent for Land 2,000.00
Water 1,800.00
Owner’s Salary 3,000.00
Stationary 20,140.00
Furniture and Building 10,380.00
Depreciation 988.00
Others 1,000.00
Total Indirect Cost 39,308.00

IV. Break Even Point Sales Level

Total Indirect____ 39,308.00__

Costs Gross Margin 0.27
Break Even Point Sales Level= 145,585.00

Break Even Point Price Level

I. Calculate Total Cost

 Direct Cost + Indirect Cost = 381,743.00

II. Calculate Total Yield

Total Yield
= Number of Products Produced in Their Units of Measurement
e.g. kg.
Total Yield= 16,000pcs. (seedlings)

III. Calculate Break Even Point Price Level

Break Even Point Price Level= _Total Cost of Manufacturing a Good____

Total Yield or Total Production of the
Good
= _381,743.00php_
16,000pcs.
Break Even Point Price Level= 24.85php/pc.

B. Second Harvest

Break Even Point Sales Level

V. Calculate Gross Profit

Total Sales in Your Business 456,000.00

Less
Total Direct Costs 341,235.00
(Direct Material Costs and Direct Labor Costs)
GROSS PROFIT 114,765.00

VI. Calculate Gross Margin

Gross Margin= Gross Profit ÷ Total Sales 114,765.00

456,000.00

GROSS MARGIN= 0.25 or 25%

 VII. Calculate Total Indirect Costs

Indirect Costs
Rent for Land ―
Water 1,800.00
Owner’s Salary 3,000.00
Stationary 20,140.00
Furniture and Building ―
Depreciation 988.00
Others 1,000.00
Total Indirect Cost 26,928.00

VIII. Break Even Point Sales Level

Total Indirect____ 26,928.00_

Costs Gross Margin 0.25
Break Even Point Sales Level= 107,712.00

Break Even Point Price Level

IV. Calculate Total Cost

Direct Cost + Indirect Cost = 368,163.00

V. Calculate Total Yield

Total Yield
= Number of Products Produced in Their Units of Measurement
e.g. kg.
Total Yield= 15,500pcs. (seedlings)

VI. Calculate Break Even Point Price Level

 Break Even Point Price Level= _Total Cost of Manufacturing a Good____
Total Yield or Total Production of the
Good
= _368,163.00_
15,500pcs.
Break Even Point Price Level= 23.75php/pc.

THE BALANCE SHEET

ASSETS
Current Assets Pesos
1. Cash (Total Net Income of Two Harvests) 179,174.00
Total Current Assets 179,174.00
Fixed Assets
1. Buildings 3,000.00
2. Tools 7,380.00
Total Fixed Assets 10,380.00
Total Assets (Total Current + Total Fixed) 189,554.00

LIABILITIES
Current Liabilities Pesos
1. None 0
Total Current Liabilities= 0
Long Term Liabilities 0
Total Long Term Liability 0
Total Liability (Total Current + Total Long Term) 0

OWNER’S EQUITY PESOS

(Total Assets – Total Liability) 189,554.00 – 0 = 189,554.00
Total Liability Plus Owner’s Equity 189,554.00

PRFOIT AND LOSS STATEMENT

A. First Harvest
 TOTAL SALES 473,080.00
Less Direct Material Costs 320,695.00
Less Direct Labor Costs 21,740.00
Gross Profit 130,645.00

Less Indirect Costs

Rent for Land 2,000.00
Water 1,800.00
Owner’s Salary 3,000.00
Stationary 20,140.00
Furniture and Building 10,380.00
Depreciation 988.00
Others 1,000.00
Total Indirect Costs= 39,308.00
Net Profit= 91,337.00

B. Second Harvest

TOTAL SALES 456,000.00

Less Direct Material Costs 320,695.00
Less Direct Labor Costs 20,540.00
Gross Profit 114,765.00

Less Indirect Costs

Rent for Land ―
Water 1,800.00
Owner’s Salary 3,000.00
Stationary 20,140.00
Furniture and Building ―
Depreciation 988.00
Others 1,000.00
Total Indirect Costs= 26,928.00
Net Profit= 87,837.00
RAW DATA

Rent of Land: 2,000.00php/year

Tools and Building Material

Item No. of Units Price per Unit Total Cost

Hoe 5pcs. 420.00 2,100.00
Spade 5pcs. 350.00 1,750.00
Bolo 5pcs. 200.00 1,000.00
Rake 3pcs. 250.00 750.00
Sprinkler 5pcs. 60.00 300.00
Wheel Barrow 1pc. 1,300.00 1,300.00
Plastic Twine 1kg. 180.00 180.00
Net 100m. 20.00 2,000.00
Bamboo Poles 40pcs. 25.00 1,000.00
Total Amount for Tools and Building Material= 10,380.00

Seed Nuts
Variety No. of Pieces Price per Piece Total Cost
Tagnanan Tall 11,945 10.00 119,450.00
Baybay Tall 3,315 15.00 49,725.00
Java Tall 3,200 15.00 48,100.00
Tacunan Green 1,540 15.00 23,100.00
Dwarf
Total Amount for Seed Nuts= 240,275.00

Fertilizer and Insecticide

Particular No. of Units Price per Total Cost
Unit
Ammonium Sulfate (AS, 21-0-0) 1,200kg. 16.00/kg 19,200.00
Potassium Sulfate (KCl, 0-0-60) 1,300kg. 28.00/kg 36,400.00
Sodium Chloride (NaCl, common salt) 1,200kg. 20.00/kg. 24,000.00
Insecticide 1L 820.00/L 820.00