Mufunga Business Plan 21082016

BUSINESS PLAN
FOR
MUFUNGA
DRAFT REPORT
AUGUST 2016
Private & Confidential
MUFUNGA DESIGN BUSINESS PLAN
Contents
SECTION A: GENERAL EXECUTIVE SUMMARY .......................................................................... 5
1.1 Business Concept .................................................................................................................... 5
1.2 Opportunity and Strategy ........................................................................................................ 5
1.3 Ownership, Directors and Management Team........................................................................ 5
1.4 Market Analysis ...................................................................................................................... 6
1.5 Strategic Marketing Plan......................................................................................................... 6
1.6 Conclusion .............................................................................................................................. 6
2. THE ENTITY ................................................................................................................................. 7
2.1 Vision ...................................................................................................................................... 7
2.2 Mission.................................................................................................................................... 7
2.3 Values ..................................................................................................................................... 7
2.4 Objectives ............................................................................................................................... 7
2.4.1 Long Term Objectives .................................................................................................... 7
2.4.2 Short Term Objectives .................................................................................................... 7
2.5 Ownership ............................................................................................................................... 8
2.6 Location .................................................................................................................................. 8
SECTION B: CURRENT OPERATIONS ............................................................................................. 9
3. Mufunga Design.............................................................................................................................. 9
3.1 Products and Services ............................................................................................................. 9
3.2 Manufacturing Process............................................................................................................ 9
3.2.2 Golf T-Shirt Manufacturing ............................................................................................ 9
3.3 Process Automation .............................................................................................................. 10
3.4 Operating Time ..................................................................................................................... 10
3.5 Distribution and Warehousing .............................................................................................. 10
3.6 Machinery and Equipment on hand ...................................................................................... 11
3.6.1 Clothing Department ..................................................................................................... 11
Error! Not a valid link. ............................................................................................................... 12
3.6.2 Engraving/ Memorial Plaques and Tombstone Departments ........................................ 13
Error! Not a valid link. ............................................................................................................... 13
3.6.3 Wood Artistry Department............................................................................................ 13
4. Organisational Structure ............................................................................................................... 15
4.1 Organogram .......................................................................................................................... 15
4.2. Management.......................................................................................................................... 15
4.2.1 Director (Nandi Mufinga) ............................................................................................. 15
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4.3 Training and Development.................................................................................................... 16

4.3.1 Internal Training .................................................................................................................. 16
4.3.2 External Training ................................................................................................................. 16
4.4 Technical Partner .................................................................................................................. 18
5. Current Customers ........................................................................................................................ 19
5.1 Schools .................................................................................................................................. 19
5.2 Private Companies ................................................................................................................ 19
6. Current Financial Analysis............................................................................................................ 20
6.1 Historical Statement of Financial Position.................................................................................. 21
6.2 Historical Statement of Comprehensive Income......................................................................... 22
6.3 Statement of Cash Flow .............................................................................................................. 23
6.4 Operational Expenses.................................................................................................................. 24
6.5 Historical Financial Statements Analysis ................................................................................... 25
7. Operational Challenges ................................................................................................................. 26
7.1 Lack of Working Capital....................................................................................................... 26
7.2 Lack of a retail shop to cater for small quantity consumers.................................................. 26
SECTION C: RESEARCH AND ANALYSIS ..................................................................................... 27
8. Ideal Operational Process.............................................................................................................. 27
9. Market Research and Analysis ...................................................................................................... 28
9.1 The Industry .............................................................................................................................. 28
9.1.1 Current status of the Clothing Industry ......................................................................... 28
9.1.2 Current Status of the Sub-Sectors in Manufacturing .................................................... 28
9.2 Customers / Market Segmentation ............................................................................................ 29
9.2.1 Government Ministries and Parastatals ......................................................................... 29
9.2.2 Retailers ........................................................................................................................ 29
9.2.3 Private Companies and Individuals............................................................................... 30
9.2.4 Mines............................................................................................................................. 30
9.3 Market Size and Trends ............................................................................................................ 30
9.3.1 Imports and Exports ...................................................................................................... 30
9.3.2 Local Production ........................................................................................................... 32
9.5 Pricing ................................................................................................................................... 32
9.5 Competition........................................................................................................................... 32
9.6 SADC and SACU ................................................................................................................. 32
10. SWOT Analysis ........................................................................................................................ 33
10.1 Addressing SWOT ................................................................................................................ 33
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11. Products........................................................................................................................................... 35
11.1 Risk Identification ..................................................................................................................... 35
SECTION D: PROPOSED STRUCTURE ........................................................................................... 36
12. The Factory ............................................................................................................................... 36
12.1 Products and Services ........................................................................................................... 36
12.4 Operating Time ..................................................................................................................... 38
12.5 Distribution and Warehousing .............................................................................................. 38
13. Organisational Structure ........................................................................................................... 39
13.1 Organogram .......................................................................................................................... 39
13.2 Management Team................................................................................................................ 40
13.2.1 General Manager ........................................................................................................... 40
13.2.2 Supervisors .................................................................................................................... 40
13.2.4 Marketing and Sales Manager....................................................................................... 40
13.3 Workforce and Payroll .......................................................................................................... 41
13.4 Training and Development.................................................................................................... 41
13.5 Technical Partner .................................................................................................................. 41
14. Strategic Marketing Plan........................................................................................................... 41
14.1 Overall Strategy .................................................................................................................... 42
14.2 Target Clientele ..................................................................................................................... 42
14.2.3 Private Institutions ........................................................................................................ 42
14.2.4 Retail shop .................................................................................................................... 42
14.2.5 Security Firms ............................................................................................................... 42
14.3 Estimated Market Share ........................................................................................................ 43
14.4 Pricing ................................................................................................................................... 43
14.5 Marketing Tools .................................................................................................................... 43
15. Financial Plan............................................................................................................................ 45
15.1 Funding Strategy ................................................................................................................... 45
15.2 Assumptions.......................................................................................................................... 46
16. Financial Projections ................................................................................................................. 47
16.1 Monthly Statement of Comprehensive Income..................................................................... 47
16.2 Monthly Statement of Financial Position.................................................................................. 47
16.3 Annual Statement of Comprehensive Income....................................................................... 49
16.4 Annual Statement of Financial Position.................................................................................... 49
16.5 Annual Statement of Cash Flows .............................................................................................. 50
16.6 Sales Analysis ........................................................................................................................... 52
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16.6 Sales Analysis Cont… .............................................................................................................. 53

16.7 Key ratios .............................................................................................................................. 54
17. Other Issues............................................................................................................................... 55
17.1 Regulatory and Legal Issues ................................................................................................. 55
SECTION A: GENERAL EXECUTIVE SUMMARY

1.1 Business Concept
Mufunga Designs CC is manufacturing company that is located in Prosperita industrial area in the city of Windhoek.
The strategic geographic location gives it numerous advantages mainly in respect of adequate operational space
and the area is easily accessible by road for the transportation of raw materials as well as finished products.
Mufunga Designs a wholly owned Namibia company and is operating but on a small scale. Its main business focus
is to manufacture the following items:
• Clothing design and manufacturing;

• Embroidery ;
• Peak cap manufacturing;
• Tombstone construction and engraving
• Memorial Plaques
• Leather and wood engraving
• Solid wooden doors manufacturing.
The company is planning to expand and fully operate on all the business units on a full scale.
1.2 Opportunity and Strategy
The Namibian Government has through its policies and national strategic documents been trying to promote the
manufacturing sector and value addition in Namibia. Documents such as Vision 2030, NDP4, NDP5, Growth at
Home and Harambee Prosperity Plan all support the establishment of a functional manufacturing industry in
Namibia. It is upon these national development programmes that Mufunga would want to establish and grow its
business in order to be part of the efforts to meet these national strategic goals. More than 50% of clothing products
are imported from other countries.
Mufunga is a young company with modern state of the art machinery that will enable them to produce high quality
and durable products.
1.3 Ownership, Directors and Management Team

The ownership and directorship of the entity is as follows:
Entity Shareholding
Nandi Mufinga 50%
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Jomo Katenga 50%
The management is led by the General Manager who is assisted by the Production Managers and a Marketing
team.
1.4 Market Analysis

In 2015, Namibia’s manufacturing sector contributed about 13% per cent of GDP. Namibia manufacturing is
inhibited by a small domestic market, dependence on imported goods, limited supply of local capital, widely
dispersed population, small skilled labour force and high relative wage rates, and subsided competition from South
Africa.
Namibia has dynamic and robust opportunities that it can offer to manufacturing enterprises, such as access to
SACU market, good communications (air and road), good infrastructure, and modern and an efficient financial
service. The SADC free trade area should also create opportunities within the southern African region. Namibia
also has preferential access to the European Communities under the interim EPA, which has been applied
provisionally since December 2007.
1.5 Strategic Marketing Plan

The aim of the Mufunga Designs is to increase and develop dependency on the local products by the market.
Clothing manufacturing is a labour intensive production process and thus employment creation is one of the major
benefits of the factory. The company is profit driven and will utilise the majority of the marketing tools at its disposal
to reach a broader market share nationally as well as regionally.
1.6 Conclusion
Mufunga Design will take advantage of the growth in the Namibian manufacturing industry in both the private and
public sector through an aggressive marketing strategy of the SBU’s. Clothing Manufacturing will be the strategic
market penetration position of Mufunga Design and this will be the rallying point to establishing a niche in the
market. Mufunga Design is well positioned to develop and execute on this business plan that will provide attractive
returns for suitable investors.
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2. THE ENTITY
Mufunga Designs CC is a Namibian registered company incorporated in 2011 by Nandi Mufinga as the 100%
shareholder. The company specializes in manufacturing and designing of sports and corporate attire and
curriculum development for all training within the field of clothing design and manufacturing. The entity’s vision,
mission, values, goals and objectives are set out below. The company was being run as a family business by Nandi
Mufinga and as such it has not grown to its full potential. The company has machinery worth over N$ 3 million that
is not being utilized.
The owner of the company has decided to take the company to a new level through fully utilizing the existing
capacity and even expanding the capacity for Mufunga Designs to be a major player in the clothing design and
manufacturing sector.
The owner intends to bring in a new partner Jomo Katenga who is going to be 50% shareholder to help him
transform the company and enable it to reach its full potential.
2.1 Vision
The entity aims to be a leader in the manufacturing sector.
2.2 Mission
To offer quality services and products for all clientele and branding the company to be consistent with quality.
2.3 Values
The business values of the entity are embedded in the following statements:
• Continuous improvement in service and product delivery to exceed customer expectations;

• Innovation in order to achieve our desired outcome;
• Integrity and frankness in our business operations;
• Teamwork and employee development; and
• Occupational health and safety.
2.4 Objectives
In line with the business philosophy, the entity’s objectives are as follows;
2.4.1 Long Term Objectives

• Gain and maintain market share;
• Develop business synergies;
• Constantly utilise marketing strategies to attract broad based clientele selection; and
• Become socially responsible.
2.4.2 Short Term Objectives

• To market the products in Namibia and SADC region in line with the business vision;
• Enter into long term contracts with new customers;
• Establish local and foreign partners in brand design and production;
• Introduce new products into the market; and
• Apply strict financial controls.
2.5 Ownership
The shareholder of the entity is as follows:
Name Percentage Holding
Nandi Mufinga 50%

Jomo Katenga 50%
Mufunga Design is a 100 per cent Namibian Owned Company incorporated under the Close Corporations Act of
Namibia in 2011.
2.6 Location
The entity is located in Windhoek at Prosperita Industrial Park. The site houses the workshop and the small
administration building. The entity intends to find a place to build a workshop and the administration offices will
then be relocated at this workshop. The current premises will be used for the Clothing Department. All the other
departments will be housed at the new workshop premises
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SECTION B: CURRENT OPERATIONS
3. Mufunga Design
Mufunga Design currently operates in Prosperita and is involved in the production of school and sports attire and
embroidery. The current production is mainly on clothing and the company intends to re-launch with other business
units in the market. It is actually operating at 50% operating capacity of the clothes production line. Machinery for
the other departments is already purchased though there is need to add more machinery in order to increase
capacity to desired levels.
3.1 Products and Services
Mufunga Designs is currently in the manufacturing of corporate golf shirts and school uniforms only. They also
do on a once off basis caps, embroidery, gun stock, wooden doors, handbags embroidery, tombstones and
memorial plaques.
3.2 Manufacturing Process

3.2.2 Golf T-Shirt Manufacturing
Below is the manufacturing process for the Corporate T Shirts at Mufunga Designs garment and textile factory.
Figure 1- Corporate T-shirt Manufacturing process
Pattern and sample
Prepare Placket
Prepare Collar
Attach Collar and

Tape
Attach sleeves
Close and Hem

sleeves and bottom
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The manufacturing process of Corporate Golf T-shirts at Mufunga Design comprises of pattern making and
sampling of the respective products. The placket and collar are prepared then attached and taped. The sleeves
are attached and then closed and hemmed at the bottom.
3.3 Process Automation
The entity is not automated and utilises machinery which requires significant human intervention for its
operational processes.
3.4 Operating Time
The operating time of the factory is from 08:00 hours to 17:00 hours.
3.5 Distribution and Warehousing
Mufunga Design currently does not have warehousing and there is mainly done from the production line to the
customer.
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3.6 Machinery and Equipment on hand
Though operating at less that 20% of its potential capacity the company has huge machinery that can
make it a big clothing manufacturing company. Machinery at hand is as follows:
3.6.1 Clothing Department
Fig 1 : Heavy Duty Embroidery Machines
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Table 1: Clothing Department Machinery Inventory List
Department Quantity Replacement Value

School and Sports Attire Value
Plain Sowing Machines Clothing 12 6,000.00 72,000.00

Overlockers Clothing 3 12,000.00 36,000.00
Coverseams Clothing 3 25,396.67 76,190.00
Buttonhole Machine Clothing 1 55,000.00 55,000.00
Button-sew-on machine Clothing 1 27,000.00 27,000.00
Blindstitch machine Clothing 1 22,000.00 22,000.00
Straight Knife cutting machine Clothing 1 9,500.00 9,500.00
Roundknife cutting machine Clothing 1 6,500.00 6,500.00
Vaccum table Clothing 1 28,000.00 28,000.00
Industrial Steam Irons Clothing 2 1,250.00 2,500.00
Cutting Table Clothing 1
334,690.00
Embroidery
8 Head Embroidery machine Clothing 1 580,000.00 580,000.00
Peak Cap and hat manufacturing
Multi Needle Sewing Machine, 12 Needles Clothing 1 26,000.00 26,000.00

Single Needle Machine Clothing 2 20,000.00 40,000.00
Hydraulic (Electric) Studding Machine Clothing 1 18,000.00 18,000.00
(A) Front Cap Pressing Machine Clothing 1 85,000.00 85,000.00
(B) Final Cap Press & Steamer Clothing 1 115,000.00 115,000.00
Twin Needle Machine with Needle Feed Clothing 2 22,000.00 44,000.00
Single Needle Cylinder Bed Clothing 1 18,000.00 18,000.00
Heavy Duty Top and Bottom Feed Lockstitch Machine Clothing 2 24,000.00 48,000.00
Needle Postbed Machine Clothing 1 18,000.00 18,000.00
2 Needle Postbed Machine Clothing 1 24,000.00 24,000.00
Cap Holding Machine Clothing 1 30,000.00 30,000.00
2 Head( 9 Needle) Embroidery Machine Clothing 1 325,000.00 325,000.00
791,000.00
Total 1,705,690.00
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3.6.2 Engraving/ Memorial Plaques and Tombstone Departments
The company already has equipment worth over N$500,000 for the engraving department. The same
machinery will be used for both departments.
Fig 2: Heavy Duty Engraving Machinery
Table 2: Engraving Department Machinery Inventory List
Department Quantity Replacement V

Value
1325 Laser Engraving Machine Engraving 1 520,000.00 520

Rotary Device Engraving 1
520
3.6.3 Wood Artistry Department
The department already has equipment worth over N$ 600,000 . The equipment is almost new.
Fig 3: Wood Artistry Equipment
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Table 3: Wood Artistry Department Machinery Inventory List
Department Quantity Replacement Value

Value
1325 CNC Machine Wood Art 1 660,000.00 660,000.00

1325 Laser Engraving Machine Wood Art 1 -
Rotary Device (Laser) Wood Art 1
Rotary Device ( Industrial) Wood Art 1
Plainer (Industrial) Wood Art 1
Industrial Bench Saw Wood Art 1 12,800.00 12,800.00
Mellow Machine Wood Art 1
Skill Saw Wood Art 1
Drills Wood Art 2
Jiigsaw Wood Art 1
Rotor Wood Art 1
672,800.00
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4. Organisational Structure
4.1 Organogram
Director
(Nandi Mufinga)
Operators x 10 Carpenter x 1
4.2. Management
Currently the business was owner managed. It was being run as a family business and the company need to
bring in a new partner and run the business professionally. The business staff mainly comprise of Nandi Mufinga
who is the director and a number of support staff in the form of 10 operators and 1 carpenter.
4.2.1 Director (Nandi Mufinga)
Nandi Mufinga has over 25 years in garment making and clothing design. A holder of a National Diploma in Clothing
Design at the Peninsula Technikon in Bellville South Africa, Nandi has worked in a number of companies at
managerial level. He has also worked as a Lecture at Electric Affairs Fashion College and the Peninsula Technikon.
In 1999 he formed a company called Victory Wear which specialises in training in textile industry. The company
conducted an intensive training programme for a total of 30 Namibian citizens in areas of garment manufacturing
and clothing design. The company was granted manufacturing status by the Ministry of Industry and
Trade. In 2004 Victory wear was selected to represent Namibia at International Fashion and Textile
conference in Mozambique. In 2012 Nandi went on to create Mufunga Designs, which is a company
specializing in manufacturing and designing of sports and corporate attire and also curriculum
development for all training within the field of clothing design and manufacturing. Mufunga Designs
trained 16 Namibian Citizens for a full year under the employment scheme of the Social Security
Commission. They also trained 100 women for the Trade and Industry in the Hardap and Karas Region.
4.3 Training and Development
4.3.1 Internal Training
The company carries out on the job training for all its new employees. New staff undergoes intensive internal
training before they commence with their work. The company has established standards on how to do work and
these are taught to its employees to enable the company to continue to produce high quality products.
4.3.2 External Training
Mufunga Designs trained 16 Namibian Citizens for a full year under the employment scheme of the Social Security
Commission. They also trained 100 women for the Trade and Industry in the Hardap and Kara’s Region.
4.3.2.1 The Hardap and Karas Region Training
The training aimed to train Learners to become self-supportive and on successful completion become competent
and skilled Entrepreneurs to start their own successful small businesses and with the acquired skills ensure
sustainability.
This is in line with the Governments objective of minimising unemployment, eliminating poverty, capacitating
especially women and youth with relevant skills and expertise to advance both socially and economically and to
equally share in Namibia’s economic wealth and prosperity.
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The course ended on a high note when our Deputy Minister Mrs Lucia Witbooi opened the certificate ceremony
with an encouraging and motivational speech.
Above, the dignitaries who attended were as follows:
Rev.Dr.Biwa,Hon. Lucia Witbooi, Deputy Minister of Gender; Hon. Dawid Boois Governer of the //Karas Region
and Mr. Nandi Mufinga (Training coordinator
Annexure 1 attached contains the detailed training course report.
Training Development will be one of the core activities of the company. This is evidenced by the creation of a full
fledged training department. It is the vision of the company to be an important partner with the Government of
Namibia in its vision to empower previously disadvantaged groups in Namibia such as women and making them
self-sustainable.
This is in line with the Vision 2030 and Harambee programs goals set by the Government of Namibia.
4.3.2.2 Bursaries
The company is planning to make available bursaries for two students pursuing a Bachelors Honours Degree in
Arts specializing in Fashion studies.
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4.4 Technical Partner
The entity does not have a technical partner in the provision of technological expertise and standardisation of the
machinery.
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5. Current Customers
Currently Mufunga Design is operating on one strategic business unit of schools and sports attire manufacturing.
5.1 Schools
Mufunga Design manufactures school attire for the different schools in Namibia. The attire comprises of uniforms
and sportswear for the different learners in Namibia. Currently the company manufactures the products and
distributes to various retail shops in the market as per orders from the distributors.
5.2 Private Companies
The company has made inroads in the private sector with the supply of corporate golf t-shirts and sportswear. The
company manufactures clothing apparel for the corporates with embroidery logos for the different companies.
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6. Current Financial Analysis
The company was being run as a family business and as such there have not been proper financial statements
that have been prepared.
Below are the statement of financial position, statement of comprehensive income and statement if Cashflows for
the last financials that were prepared as at 30 November 2015:
6.1 Historical Statement of Financial Position
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6.2 Historical Statement of Comprehensive Income
22
6.3 Statement of Cash Flow
23
6.4 Operational Expenses
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6.5 Historical Financial Statements Analysis
The company hasn’t been producing financial statements since November 2015. The available financial
information is not sufficient for a proper analysis of how the business has been performing.
The following points are worth noting though:
- The company made profits during the period covered by these financial statements.
- The balance sheet shows the company is a going concern and is solvent
- Shareholders loans indicate how much the owner has contributed to enable the company to grow.
- Equipment worth N$ 1.4 million shown on the balance sheet
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7. Operational Challenges
The current operational challenges faced by the entity are as follows:
7.1 Lack of Working Capital
The company currently has dormant machinery in place that is not being utilised due to the lack of capital and this
has hindered the growth of the entity. Expansion of the company is imminent but is based on the recapitalisation
as this will increase the growth in terms of employment and other strategic business units being fully operational.
7.2 Lack of a retail shop to cater for small quantity consumers
Walk-in customers and small companies contribute to the income of the organization and a retail shop at the factory
can achieve this income. Some customers need a finished product due to the nature of their business.
SECTION C: RESEARCH AND ANALYSIS
8. Ideal Operational Process
Mufunga Design manufacturing faces frequent trend changes, rising material and labour costs and increasing
global competition. Mufunga Design is under considerable pressure to achieve profitable growth while delivering
high quality products at reduced lead times, whilst also addressing the growing expectation for improved
environmental sustainability, employee working conditions and fair wages.
Operational excellence is an ideal match for the complex challenges of the industry. Manufacturing industry around
the globe can achieve enhanced business performance and profitable growth through rapid productivity
improvements, reduced defects and increased flexibility. In addition, Mufunga Design will create a safer, more
engaging and satisfying work environment that significantly reduces attrition rates and contributes to better overall
business outcomes.
The ideal operational process for Mufunga Design takes into account of the following:
• Improve performance and quality and reduce operational costs and lead times through enhanced sewing
efficiency, improved material utilization, fewer defects and optimized man-to-machine ratios.
• Increase flexibility and responsiveness and ensure timely delivery of merchandise by accelerating
approval and changeover times, creating equitable workload distribution and streamlining sample-
making.
• Accelerate growth and avoid unnecessary capital outlay by reducing work-in-process inventory,
optimizing plant capacity and generating greater free cash to accommodate expansion.
• Create a culture of continuous improvement to proactively address social compliance and safety
conditions and drive employee engagement and satisfaction, leading to reduced attrition and long-term
viability.
• Improve supplier performance and gain competitive advantage through assessments that identify
potential areas of change and quantifiable plans for enhanced quality and service that can lead to
increased business with key customers.
• Drive competitive advantage and energize profitable growth by launching new products faster, at lower
development costs, and with flexible, efficient production processes.
• Boost financial performance by embedding a management process and discipline that empowers
employees to improve their part of the business on a daily basis in alignment with the organization’s
strategic direction.
The above if implemented in a work environment will increase the operational efficiency of the Mufunga Design.
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9. Market Research and Analysis
9.1 The Industry
In 2015, Namibia’s manufacturing sector contributed about 13% per cent of GDP. Namibia manufacturing is
inhibited by a small domestic market, dependence on imported goods, limited supply of local capital, widely
dispersed population, small skilled labour force and high relative wage rates, and subsided competition from South
Africa.
Namibia has dynamic and robust opportunities that it can offer to manufacturing enterprises, such as access to
SACU market, good communications (air and road), good infrastructure, and modern and an efficient financial
service. The SADC free trade area should also create opportunities within the southern African region. Namibia
also has preferential access to the European Communities under the interim EPA, which has been applied
provisionally since December 2007.
9.1.1 Current status of the Clothing Industry
The local textile has been undergoing a major transformation to establish in the market due to the hiccups which
have been prevalent in the market case in point being the Ramatex debacle and the formation of the Namibian
Garment Marketing Company Pty Ltd which aimed to access the North American market through the Africa Growth
and opportunity Act (AGOA). AGOA was extended in Africa and is still operational and the local industries can
access the market if they meet requirements that are needed by the North American market in terms of labour,
occupational health and safety and other necessary specifications that are required by the target market.
The rebirth of the garment and textile industry has been determined mostly by the need to substitute on the
importation of products from South Africa, China and other countries especially in the product range of the following
items;
• Industrial Clothing;
• Medical Clothing ;
• Uniforms; and
• Protective Clothing.
The industry is mainly targeting the local market in the production of garments and has not exploited the SACU
and SADC market to gain a larger market share. The SADC and SACU protocols on free trade can be
advantageous to the Mufunga Design sector. The local industry is mainly spearheaded by the small to medium
scale enterprises (SMEs) which have a foothold in the market.
9.1.2 Current Status of the Sub-Sectors in Manufacturing
It has been established that the country has a number of manufactured products which have potential for
expansion. The key existing products identified are: paint, tiles and slabs, tables, beds, cupboard, school and office
furniture, kitchenware, beer, carbonated water and soft drinks, steel windows and door frames, polished diamonds,
hand-woven carpets, field shoes, textiles and clothing, as well as salt (coarse, fine, rock and table) amongst others
items. There are a number of possible markets to which the existing products that are currently being produced
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although not at their optimal levels, could be exported. These markets include: the SADC, the EU, the US, Australia,
as well as East Asia. The sub sector industries have the potential of engaging in the production.
Table 1-Sub sector and contribution to employment
Sub Sector Number of Employees
Textiles 699
Clothing and Dyeing of Fur 10483
Paper and Production 458
Publishing Printing and Reproduction 592
Food and Beverages 13262
Chemicals and Chemical Products 538
Rubber and Plastic Products 507
Other Non-Metallic Products 1484
Basic Metals 1469
Fabricated Metal Products 1210
Furniture Manufacturing 1149
Table 3 indicates that in terms of the sub-sectors, contributions to manufacturing employment, the Food and
Beverages Sub-sector is the major employer, followed by clothing, dressing and dyeing of the Fur Sub-sector,
other Non-metallic Products and then the Basic Metal Sub-sectors.
9.2 Customers / Market Segmentation
The market segments for textile products are as follows:
a. Government Ministries and Parastatals.

b. Retailers and wholesalers;
c. Private companies and individuals; and
d. Mines.
9.2.1 Government Ministries and Parastatals
Ministries and Parastatals where the respective staff wear uniforms or safety gear will be a potential market the
clothing industry. Therefore, the main clientele in this category will be all the Ministries which utilise uniforms for
their daily operations. Although Ministry of Education staff does not wear uniforms, schools do and since
government schools fall under the Ministry of Education, this Ministry is a potential client for the textile industry.
9.2.2 Retailers
These two groups are responsible for supplying the public with their needs. The company in the short term will
target retail shops for the sale of their products as they will be setting up the company’s retail outlets.
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9.2.3 Private Companies and Individuals
These are the ultimate consumers of the textile products and mainly obtain these products from retailers and
wholesalers. Private companies however sometimes go directly to the manufacturers especially where they require
uniforms to be made for their staff in large quantities. The main companies which require this service are security
guards, banks, retail shops and any other organisation where the staff wear a uniform.
9.2.4 Mines
Occupational safety is a pre-requisite in mines and with the growth of the industry; safety plays a pivotal role in
assuring the welfare of the workers. Most companies need high quality safety clothing to reduce accident
incidences. Therefore, the textile industry needs to cater for this market which as special needs.
9.3 Market Size and Trends
Most government institutions have personnel who require uniforms within a period of time. The active personnel
in the security forces have a need for uniforms during their yearly tenures. Currently the defence forces have active
personnel of more than 10, 000, the police force 14,800 and the nurses are more than 4,000. The medical
institutions have nursing and medical staff which have a need for uniforms throughout the year and the yearly
recruitment of staff especially trainee nurses’ warrants the demand for uniforms annually. The increased population
growth and also results in an increased recruitment for the government in the security forces.
According to the Namibia Security Guards and Workers Union, the number of security guards has increased
significantly from the 5,000 to more than 7,000 between the years 2010 to 2013 and of these numbers 3,000 are
affiliated to the workers union. This increase in personnel is a positive for the textile industry since it results in an
increase in demand for the uniforms in this market segment.
9.3.1 Imports and Exports
The table below shows the trade statistics for textiles and clothing in Namibia from 2010 to 2015.The table shows
the net exports and the net imports between this 5 year periods.
NAMIBIA TRADE STATISTICS ON TEXTILES AND CLOTHING WITH THE ROW FOR THE PERIOD 2009 TO 2013 BY
COMMODITY AND VALUE (N$).
HS and 2011 2012 2013 2014 2015
commodity
Export Imports Export Imports Export Imports Export Imports Export Imports
descriptions
s s s s s
Total 229,37 2,021,83 165,21 1,592,85 170,66 1,749,11 179,61 1,763,19 214,02 2,123,65
6,680 8,675 7,068 8,310 9,159 2,067 7,535 4,377 6,880 4,313
Source: Namibia Statistics Agency (NSA)
The table shows the increase in imports of textiles and clothing from year 2011 up to 2015.This shows the
increase in the requirements in terms of clothing industry which is a positive sign for growth for the company.
30
31
9.3.2 Local Production
The local production is very low with more than 80% of the local consumption being imported. Statistics could not
be obtained on the exact size of the local market.
9.5 Pricing
The pricing structure of the items offered will be in line with the market prices. As a penetration strategy into the
market, Mufunga Design should offer discounted prices for the bulk purchases in the short and the long term and
revert back to the market prices as the business progresses.
9.5 Competition
Most products (>80% of local consumption) consumed in the local market are imported, mainly from South Africa
and China. However, there is now a huge cry by local suppliers for customers to buy from local suppliers, especially
when the clients are in the public sector. A case in point is when the Ministry of Health and Social Services decided
to procure nurses’ uniforms from China in 2014. Cabinet and the public criticized this decision and the Ministry had
to reverse this decision and look for local suppliers for these uniforms.
Local suppliers include Dinapama, Tuhafeni Garment Factory and Palm Garments. These are all situated in
Windhoek, and currently, there is no local dominant textile manufacturer in the country.
Government, through the Ministry of Trade and Industry, is still trying to resuscitate the Dantago Clothing CC in
Arandis which was shut down in the first half of 2014. The main challenge that this factory faced was that it was
reliant on one customer, and when this customer cancelled the contract with the factory, it had to close shop.
9.6 SADC and SACU
The SADC and SACU protocols on trade between member countries will be utilized by the company to gain access
to the regional market. The protocol reflects on free trade between the member countries in the clothing and
garment industry. According to Article 3,of the Trade Protocol all the punitive barriers with regard to trade in
garments have been removed and the member countries can trade between them without so many restrictions.
32
10. SWOT Analysis
STRENGTHS WEAKNESSES
• Mufunga Design already has staff that is • Lack of Funding ;

operating at the factory and they have working • Lack of storage and warehousing space; and
experience in their particular fields; • No technical partner in the field.
• Increase the creation of employment in
Windhoek;
• Conveniently situated in the capital city and
access to most towns and cities; and
• Mufunga Design is owned by a PDI and as
such will utilise the market knowledge and
experience to gain market share.
OPPORTUNITIES THREATS
• New investments opportunities in terms of the • Exchange rate fluctuations ;

manufacturing sector. • Market competition;
• Synergies development with various • Inflation;
companies locally and regionally; • Cheaper imports from China and South Africa;
• The use of computer aide design(CAD) and
software will enhance the operations and • Change in raw materials.
efficiency of the business;
•
10.1 Addressing SWOT
Weaknesses Mitigation of Swot
Lack of Funding Comprehensive proposal to a funding institution

showing the growth five year plan...
33
Lack of storage and warehousing space; Construction/Leasing of warehousing and storage at

the manufacturing for the raw materials and finished
products.
No technical partner in the field. To conduct a search for a technical partner in the
industry who will assist the organisation
Threats Mitigation of Threats
Market Competition Implementing stringent control measures to enable

price cuts and undercut on competitors;
Implement a customer service plan that undercuts
the competition and is exclusive to the factory
customers.
Recession and Inflation Adjusting the prices in relation to the inflation;

Adjusting to low cost materials during the recession.
Exchange rate fluctuations Consider exchange rate hedging
Engage the government to cushion the industry by

Cheaper imports from SA and China increasing the tax on imported products.
Consider the stoking of raw materials at the

Change in raw materials manufacturing site in case of raw material shortages.
34
11. Products
11.1 Risk Identification
Though the owner may be aware of the risks that may be there in the line of business with regards to business
risk, industry risk including regulatory risk there do not have a risk identification process of mechanism in place.
The owners are however aware that once the company is fully operational there is needs to come up with a risk
management policy for the company and ensure that it is strictly adhered to.
35
SECTION D: PROPOSED STRUCTURE
12. The Factory

12.1 Products and Services
Mufunga Design is to be set up due to the following reasons;
a. To decrease the dependency in importation of textile finished products in the market;

b. To set up a factory which increases the efficiency of the industry;
c. To add value to the finished products and increase the market share; and
d. To create employment and increase skills transfer for the youth.
Mufunga Designs has designed strategic business units that will be operating independently at the factory and
these will enhance production.
STRATEGIC BUSINESS UNITS

Unit Type Expected Outcome Growth Analysis
Clothing Department (This This is the core business unit for the The machinery is already in
department includes the following business and has been the place and the growth of this
units : operational unit for the past couple of business unit will be
- Clothes Manufacturing years. The next 5 years will embrace determined by an increased
- Embroidery the growth of this unit from merely a working capital and employee
- Peak Cap Manufacturing sports and corporate wear clothing to turnover thus requirements for
a more competitive textile and an overhaul of the current
clothing manufacturing unit. status quo to increase the
production potential of the
unit. Marketing will be the
driving force behind the
rejuvenation of the unit and
the target will be on quality
and brand awareness. Quality
assurance plays a pivotal role
in developing the brand and
this will be the focal point for
growth of the SBU.
Embroidery Embroidery is in line with customer First year projections for this
expectations and initial production of business will be minimal as
goods with embroidery will be part of the market will be having so
the operational plan for the many choices in terms of
Embroidery Business Unit. This unit competition. Brand awareness
will enhance growth in income for the and quality control will
whole business though on a smaller determine the growth in the
percentage value. market and how the business
will generate income from this
business unit. The business
will utilise all the marketing
tools at hand to aggressively
market this SBU to be
associated with a high quality

product that surpasses the
competition.
Peak Cap Manufacturing This business unit is determined by Peak Cap manufacturing is a
the market forces and quality of the volume driven business unit
product. Mufunga Design is one of for the company to get a larger
the few Namibian companies market share and increase the
manufacturing this type of cap. potential profit of the business.
The company will utilise
aggressive marketing tools to
encompass the market to gain
and maintain the market
shares
Memorial Plaques and Tombstones Granite Tombstones will be another Granite Tombstones are a
This Department Covers the business unit for the company and preserve for quality and
following units: this will be determined by quality. longevity this is the essence of
- Memorial Plaques customer satisfaction. Market
- Tombstones engraving driving force will be based on
quality samples that
customers can fathom on their
bereavement and are willing to
procure for their usage. From
the first year of funding
Mufunga Design will target a
broad market share through
newspaper adverts and
website showing the various
designs that the company can
provide.
Wood Artistry Department Carpentry will be a major income Construction is on the rise in
This covers the following units: generating business unit for the Namibia and this signifies
- Wooden doors and organisation for growth and growth in terms of carpentry
furniture manufacturing positioning in the market work being done all over
- Door Design buildings and all dwelling
- Gun Stock manufacturing places.
Engraving Department Letter house posters and beautiful Very appealing products
This covers the following units: women handbags. Hand bags may which will be greatly accepted
- Leather Engraving have security features which make by women. Demand for
- Handbag Engraving them less valuable to thieves. fashionable goods is a day to
day thing hence the company
expects high demand of these
products.
37
The table above shows the different strategic business units the business will pursue in the next five (5) years and
beyond to increase the market share and growth of the company.
12.4 Operating Time

The production process is from 08:00 hours in the morning till 17:00 hours and extra shifts can be introduced as
the demand increases.
12.5 Distribution and Warehousing

Storage of the materials is essential before the product is distributed in the impending market. The company will
have a warehouse which will ensure that the inspection is done as per the requirements of the customers. The
storage area will also act as the raw material storage area to increase throughput in production.
38
13. Organisational Structure

13.1 Organogram
The company has an organisational structure which is already in place but a production increase in the organisation will increase the staffing at the company as follows;
Board of Directors
General Manager
Supervisor- Clothing Supervisor Engraving Supervisor- Wood Supervisor- Memorial Quality Control Marketing & Sales
Department Artistry (CNC Plaques & Tombstones Officer Manager
(Laser Engraving) Engraving)
Designer/ Graphic & Leather &

Parttern CNC Tombstone
Maker Designer Designer
Operators/ Laser Carpenters Mould Sales Team

Machinist Operators Maker
39
13.2 Management Team
Mufunga Design will be managed by experienced staff that will be responsible for the everyday operations of the
company. They form the top echelon of the company and delegate the necessary duties to the lower management.
13.2.1 General Manager
General Manager will oversee the operations of the garment and textile factory. The incumbent is responsible for
all the aspects of the business, which include everything from monitoring profit and loss to ensuring that efficient
services are provided for all the clientele for the factory. The incumbent is also responsible for all the strategic
planning for the factory and will report directly to the board of directors. The incumbent will have a sit in the board
of directors for easier decision transmission.
Typical work activities will include some or all of the following:
• Planning the financial and other sources around a budgetary framework;

• Liaising with the staff from stake holding bodies ,council departments and commercial organisations;
• Adapting services and functions in response to changing commercial requirements and developments;
• Liaising with strategic alliances and other stakeholders (corporate companies, government institutions);
• General public relations;
• Undertaking the strategic business development of the entity and its functions including property
development, estate management, allocation of resources and equipment and the infrastructure
supporting the operations; and
• Overseeing the management and monitoring the strategic plan of the entity.
The Managing Director coordinates all the managerial responsibilities and ensures the efficient operation of the
factory.
13.2.2 Supervisors
The Supervisors will have the responsibility of having a comprehensive master production plan that ensures the
smooth flow of the different production lines. The incumbents will be experienced in Auto-CAD systems for the full
automation of the factory. The incumbents will be responsible for the maintenance of Materials Requirement
Planning systems for the production process and conduct health and safety protocols for the entity in line with
international standards. The incumbents will coordinate the machinery and equipment standards to be in line with
the International Standards Organisation for improved quality and attract the market.
13.2.4 Marketing and Sales Manager
The manufacturing sector is highly competitive industry and marketing will have a major impact on the profitability
and operation of the business. The company will employ an efficient and effective marketing manager with the
responsibility of steering the company into a major player in the textile industry in Namibia and the region. The
Marketing Manager will be responsible for the overall marketing plan in the short and long – term marketing
strategies for the business. The Marketing Manager will also be responsible with the setting up of direct meetings
with the current and prospective customers on the advantages of using the company. The Marketing Manager will
report directly to the General Manager.
40
13.3 Workforce and Payroll
The workforce and payroll is represented by the table below and this staff will be gradually retrenched as
automation of the machinery takes over. The automation of the machinery will result in the redundancy and the old
machinery being obsolete in terms of efficiency. New automated machinery will increase the efficiency and
maintain the standards of the products.
13.4 Training and Development
Mufunga Design will utilise the Auto CAD system for which the training will be provided. The training will be
conducted on site to allow for the staff to have knowledge of the systems. Customer service will also be a major
training aspect of the garment and textile factory to maintain customer satisfaction within the retail shops that will
be established by the entity.
The company will need to engage a technical partner in the production of Gun Stock.
13.5 Technical Partner
For the technological and standardisation purposes the Mufunga Design entity will require the services of a
technical partner who will assist in the growth of the company to meet regional and international standards and
increased their market share.
At a minimum the technical partner should have the following attributes;
a. The partner will have the experience and is technological advanced in garment and textile manufacturing;
b. The partner will provide training and development in new product lines; and
c. The partner will provide the entity with the new manufacturing methods and increase awareness on quality
assurance in production;
These are the main attributes the technical partner will provide for Mufunga Design for an efficient operational
system. The partner will be offered a percentage of approximately 10% of the total revenue and this percentage
can be negotiated between the proponents.
14. Strategic Marketing Plan
41
14.1 Overall Strategy
The aim of the Mufunga Design is to increase and develop a dependency on the local products by the market.
Clothing manufacturing is a labour intensive production process and thus employment creation is one of the major
benefits of the factory. The company is profit driven and will utilise the majority of the marketing tools at its disposal
to reach a broader market share nationally as well as regionally.
The entity understands that regional customers can only be reached via electronic media and for this reason a
website that is distinctive of the entity with its affiliated site developed and implemented. The entity will have a
number of strategic partners from which it can obtain customers especially in the private and public sector where
it can get customers.
14.2 Target Clientele

14.2.1 Ministry of Health and Social Services
Meetings with the relevant ministerial authorities will be conducted by the entity and samples provided showing
the quality of the product. The entity will engage the ministry on the basis of partnership between the ministries.
14.2.2 Ministry of Safety and Security
The entity will utilise its relationship that exists between the MoD and MSS to facilitate meetings with the entity
on the supply of uniforms for the police and prison services.
14.2.3 Private Institutions
Pricing will play an important part in luring the private sector to the consumption of the products with emphasis
being on quality and affordability. Aggressive marketing will be done by the company to penetrate the market and
favourable contracts offered to the market .Standardisation of the products will be factored into the products to
allow for a favourable market advantage.
14.2.4 Retail shop
Establishing retail shops will be part of Mufunga Design’s plan in the provisioning of their products to the market.
Quality assurance is the basis of penetrating the retail market in garment manufacturing and they are requirements
for branded products by the retail shops. Mufunga Design will rebrand all its products if it wants to enter the retail
shops market. Mufunga will open 1 shop in Windhoek at the beginning of year 1. In the following year they are
going to open 2 more shops in Katima since that where most of their schools clients are situated. In the third year
they will open 2 more shops in the Northern Region in Oshakati and Ongwediwa.
14.2.5 Security Firms
42
Mufunga Design already has a small niche in the security gear it provides for the privates security companies.
The entity will penetrate more of the market by conducting rebranding of the company products.
14.3 Estimated Market Share
The business is expected to achieve a market share of more than 20% if the technological systems are
implemented and with the introduction of the retail, a substantial increase in the market share.
14.4 Pricing
The pricing structure of the services offered will be in line with market current prices. As a penetration strategy into
the market, the garment and textile factory will offer discounted prices for bulk purchases in the short term and
revert to the market prices as the business progresses.
The prices will be cost based and a mark-up on the cost determining the end product price with the result being
compared to the market for reasonableness.
14.5 Marketing Tools
Channel Description
Print Media Mufunga Design factory will have brochures and

services that will be offered at the factory.
Visual media in the form of DVD’s will be made

Visual Media available to the companies and organisations in
throughout Namibia and also part of the “Buy
Namibia” campaign.
Merchandise Merchandise bearing Mufunga Design name and

logo T-shirts, caps, neck ties, scarves, key holders
and other items shall be distributed.
43
Web-Based Marketing Web –based advertising is an effective marketing tool

in the industry as it reaches out to regional and
international customers. Mufunga Design will have a
website with the following items:
• Products and services being offered by the

company;
• Prices for the products;
• GPS location of the company and any retail
shops in the different areas;
• International standards being offered by the
company on their products; and
• Company profile and achievements.
44
15. Financial Plan

15.1 Funding Strategy
The company will seek for a loan from Development Bank of Namibia to help expand capacity as well as for the
working capital requirements that come with the increased capacity.
The company has the following machinery already:
Wood Artistry Department N$ 672,800.00
Engraving Department N$ 520,000.00
Cap Manufacturing N$ 720,000.00
Embroidery Department N$ 580,000.00
Clothing Department N$ 300,000.00
Total Value N$ 2,792,800.00
Mufunga needs financing to fund its short term working capital requirement as well as for capital expenditure in the
form of machinery and machinery to support increase in activities and capacity of the company. The breakdown of
the funding requirement is as below:
Working Capital: N$ 2,702.292.00 (Sufficient to cover 3 months

purchases and operational expenditure for 3
months)
Capital Expenditure N$ 5,656,590.00 (To purchase additional plant

and machinery and equipment)
Total N$ 8,358,882.00
The company will approach Development Bank of Namibia to apply for the above loan.
45
15.2 Assumptions
Selling prices to increase at the inflation rate every year
Average inflation assumed to be 5%
Purchases to increase by the inflation rate
Salaries will increase by 7% per annum.
Operational costs to increase at the inflation rate
Rent to increase at 10% per annum
60% of sales to be cash while 40% is on credit over 30 days
Interest rate is assumed to be at 10.75% per annum
The company to hold inventory equivalent to 3 months sales at all the times.
Property Plant and equipment will be depreciated as follows:
- Plant and Machinery 10%
- Computer Equipment 33 1/3 %
- Furniture and Fittings 10%
- Motor Vehicles 10%
- Office Equipment 10%
46
16. Financial Projections

16.1 Monthly Statement of Comprehensive Income
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
N$ N$ N$ N$ N$ N$ N$ N$ N$ N$ N$ N$
Sales 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000
Less Cost of Sales ( 1 073 508) ( 1 073 508) ( 1 073 508) ( 1 073 508) ( 1 073 508) ( 1 073 508) ( 1 073 508) ( 1 073 508) ( 1 073 508) ( 1 073 508) ( 1 073 508) ( 1 073 508)
Gross Profit 1 201 492 1 201 492 1 201 492 1 201 492 1 201 492 1 201 492 1 201 492 1 201 492 1 201 492 1 201 492 1 201 492 1 201 492
Gross Profit % 53% 53% 53% 53% 53% 53% 53% 53% 53% 53% 53% 53%
Operational Expenditure ( 377 370) ( 377 020) ( 376 667) ( 376 311) ( 381 551) ( 375 588) ( 415 222) ( 374 853) ( 374 480) ( 374 104) ( 373 725) ( 373 342)
Salaries and Wages 113 333 113 333 113 333 113 333 113 333 113 333 113 333 113 333 113 333 113 333 113 333 113 333
Marketing 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000
Motor Vehicle Fuels 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000
Motor Vehicle Repairs 5 275 5 275 5 275 5 275 5 275 5 275 5 275 5 275 5 275 5 275 5 275 5 275
Motor Vehicle Licences 5 600
Depreciation 24 851 24 851 24 851 24 851 24 851 24 851 24 851 24 851 24 851 24 851 24 851 24 851
Rent 52 000 52 000 52 000 52 000 52 000 52 000 52 000 52 000 52 000 52 000 52 000 52 000
Electricity and Water 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000
Insurance 35 530 35 530 35 530 35 530 35 530 35 530 35 530 35 530 35 530 35 530 35 530 35 530
Telephone and fax 4 800 4 800 4 800 4 800 4 800 4 800 4 800 4 800 4 800 4 800 4 800 4 800
Finance Costs 74 882 74 532 74 178 73 822 73 462 73 099 72 733 72 364 71 991 71 615 71 236 70 853
Consultancy Fees 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000
Printing and Stationery 3 000 3 000 3 000 3 000 3 000 3 000 3 000 3 000 3 000 3 000 3 000 3 000
Teas and Cleaning 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000
Travel and subsistance 15 000 15 000 15 000 15 000 15 000 15 000 15 000 15 000 15 000 15 000 15 000 15 000
Bank Charges 13 000 13 000 13 000 13 000 13 000 13 000 13 000 13 000 13 000 13 000 13 000 13 000
Entertainment 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000
Repairs and maintainance 3 200 3 200 3 200 3 200 3 200 3 200 3 200 3 200 3 200 3 200 3 200 3 200
Accounting Fees 4 500 4 500 4 500 4 500 4 500 4 500 4 500 4 500 4 500 4 500 4 500 4 500
Donations 40 000
Profit before tax 824 122 824 472 824 825 825 181 819 941 825 904 786 270 826 639 827 012 827 388 827 767 828 150
Tax ( 261 027) ( 261 027) ( 261 027) ( 261 027) ( 261 027) ( 261 027) ( 261 027) ( 261 027) ( 261 027) ( 261 027) ( 261 027) ( 261 027)
Profit after tax 563 095 563 445 563 798 564 154 558 914 564 877 525 243 565 612 565 985 566 361 566 740 567 123
16.2 Monthly Statement of Financial Position
47
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10
N$ N$ N$ N$ N$ N$ N$ N$ N$ N$
ASSETS
NON CURRENT ASSETS

Property, Plant & Equipment 1 034 216 8 078 604 8 005 911 7 933 219 7 860 527 7 787 834 7 715 142 7 642 450 7 569 757 7 497 065 7 424 373
Cost 1 410 000 8 527 080 8 527 080 8 527 080 8 527 080 8 527 080 8 527 080 8 527 080 8 527 080 8 527 080 8 527 080
Depreciation ( 375 784) ( 448 476) ( 521 169) ( 593 861) ( 666 553) ( 739 246) ( 811 938) ( 884 630) ( 957 323) ( 1 030 015) ( 1 102 707)
CURRENT ASSETS
Inventory 2 305 816 2 841 940 2 829 325 3 220 525 3 220 525 3 220 525 3 220 525 3 220 525 3 220 525 3 220 525
Accounts Receivable 124 000 910 000 910 000 910 000 910 000 910 000 910 000 910 000 910 000 910 000 910 000
Short Term Investments 267 431 1 083 601 1 495 957 2 288 312 3 056 237 3 779 423 4 622 605 5 425 784 6 228 960
Cash and Bank Balance 3 276 277 638 277 638 277 638 277 638 283 238 277 638 317 638 277 638 277 638 277 638
127 276 3 493 454 4 297 009 5 100 564 5 904 119 6 702 074 7 464 399 8 227 585 9 030 767 9 833 947 10 637 122
TOTAL ASSETS 1 161 492 11 572 058 12 302 920 13 033 783 13 764 646 14 489 909 15 179 541 15 870 035 16 600 525 17 331 012 18 061 495
EQUITY AND LIABILITIES
EQUITY
Member Contributions 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000
Retained Earnings 97 147 660 242 1 223 686 1 787 484 2 351 639 2 910 553 3 475 430 4 000 673 4 566 285 5 132 270 5 698 631
Revaluation Reserve 1 460 490 1 460 490 1 460 490 1 460 490 1 460 490 1 460 490 1 460 490 1 460 490 1 460 490 1 460 490
102 147 2 125 732 2 689 176 3 252 974 3 817 129 4 376 043 4 940 920 5 466 163 6 031 775 6 597 760 7 164 121
NON CURRENT LIABILITIES

Member Loans 870 346 870 346 870 346 870 346 870 346 870 346 870 346 870 346 870 346 870 346 870 346
Deferred Tax
Interest Bearing Borrowings 7 822 587 7 778 700 7 734 421 7 689 744 7 644 668 7 557 957 7 511 699 7 465 028 7 417 938 7 370 427
870 346 8 692 933 8 649 046 8 604 767 8 560 090 8 515 014 8 428 303 8 382 045 8 335 374 8 288 284 8 240 773
CURRENT ASSETS
Short Term Portion of Loan 497 213 501 667 506 161 510 696 515 271 519 887 524 544 529 243 533 984 538 768
Accounts Payable 189 000 49 330 49 330 49 330 49 330 49 330 49 330 49 330 49 330 49 330 49 330
Taxation Payable 217 184 434 369 651 553 868 738 1 085 922 1 303 107 1 520 291 1 737 476 1 954 660 2 171 845
189 000 763 727 985 366 1 207 044 1 428 763 1 650 523 1 872 323 2 094 165 2 316 048 2 537 974 2 759 942
TOTAL LIABILITIES 1 059 346 9 456 660 9 634 412 9 811 811 9 988 853 10 165 536 10 300 626 10 476 210 10 651 422 10 826 258 11 000 715
TOTAL EQUITY & LIABILITIES 1 161 493 11 582 391 12 323 588 13 064 785 13 805 982 14 541 579 15 241 545 15 942 373 16 683 197 17 424 018 18 164 836
48
16.3 Annual Statement of Comprehensive Income

Year 1 Year 2 Year 3 Year 4 Year 5
N$ N$ N$ N$ N$
Sales 27 300 000 28 665 000 30 098 250 31 603 163 33 183 321
Less Cost of Sales ( 12 882 098) ( 13 507 498) ( 14 218 796) ( 14 970 183) ( 15 763 980)
Gross Profit 14 417 902 15 157 502 15 879 454 16 632 980 17 419 341
Gross Profit % 53% 53% 53% 53% 52%
Operational Expenditure ( 4 550 232) ( 5 140 129) ( 5 843 656) ( 6 102 019) ( 6 409 015)
Salaries and Wages 1 360 000 1 455 200 1 557 064 1 666 058 1 782 683
Marketing 48 000 50 400 52 920 55 566 58 344
Motor Vehicle Fuels 108 000 113 400 119 070 125 024 131 275
Motor Vehicle Repairs and Maintanance 63 300 66 465 69 788 73 278 76 942
Motor Vehicle Licences 5 600 5 880 6 174 6 483 6 807
Depreciation 298 210 298 210 298 210 270 210 270 210
Rent 624 000 1 104 700 1 695 170 1 864 687 2 051 156
Electricity and Water 108 000 113 400 119 070 125 024 131 275
Insurance 426 354 447 672 470 055 493 558 518 236
Telephone and fax 57 600 60 480 63 504 66 679 70 013
Finance Costs 874 768 819 103 757 149 688 198 611 458
Consultancy Fees 48 000 50 400 52 920 55 566 58 344
Printing and Stationery 36 000 37 800 39 690 41 675 43 758
Teas and Cleaning 12 000 12 600 13 230 13 892 14 586
Travel and subsistance 180 000 189 000 198 450 208 373 218 791
Bank Charges 156 000 163 800 171 990 180 590 189 619
Entertainment 12 000 12 600 13 230 13 892 14 586
Repairs and maintainance 38 400 40 320 42 336 44 453 46 675
Accounting Fees 54 000 56 700 59 535 62 512 65 637
Donations 40 000 42 000 44 100 46 305 48 620
Profit before tax 9 867 670 10 017 373 10 035 798 10 530 961 11 010 326
Tax ( 3 132 322) ( 3 305 733) ( 3 311 813) ( 3 475 217) ( 3 633 408)
Profit after tax 6 735 347 6 711 640 6 723 985 7 055 744 7 376 918
16.4 Annual Statement of Financial Position
49

N$ N$ N$ N$ N$
ASSETS
NON CURRENT ASSETS

Property, Plant and Equipment 7 278 988 6 406 680 5 534 372 4 690 064 3 845 756
Cost 8 527 080 8 527 080 8 527 080 8 527 080 8 527 080
Depreciation ( 1 248 092) ( 2 120 400) ( 2 992 708) ( 3 837 016) ( 4 681 324)
CURRENT ASSETS
Inventory 3 220 525 3 376 875 3 554 699 3 742 546 3 940 995
Accounts Receivable 910 000 955 500 1 003 275 1 053 439 1 106 111
Short Term Investments 8 485 419 15 870 421 23 236 020 31 016 814 38 094 047
Cash and Bank Balance 277 638 471 752 525 216 543 334 562 522
12 893 581 20 674 547 28 319 210 36 356 133 43 703 674
-
TOTAL ASSETS 20 172 569 27 081 227 33 853 582 41 046 197 47 549 430
EQUITY AND LIABILITIES
EQUITY
Member Contributions 5 000 5 000 5 000 5 000 5 000
Retained Earnings 6 832 494 13 544 134 20 268 119 27 323 862 34 700 781
Revaluation Reserve 1 460 490 1 460 490 1 460 490 1 460 490 1 460 490
8 297 984 15 009 624 21 733 609 28 789 352 36 166 271
NON CURRENT LIABILITIES

Member Loans 870 346 870 346 870 346 870 346 870 346
Deferred Tax 526 108 1 176 226 1 826 343 1 547 721 1 269 099
Interest Bearing Borrowings 7 274 123 6 707 202 6 027 834 5 271 725 4 430 207
8 670 577 8 753 774 8 724 522 7 689 792 6 569 653
CURRENT ASSETS
Short Term Portion of Loan 548 464 610 417 679 369 756 109 841 517
Accounts Payable 49 330 51 796 54 386 57 105 59 960
Bank Overdraft -
Taxation Payable 2 606 214 2 655 616 2 661 696 3 753 839 3 912 029
3 204 007 3 317 829 3 395 451 4 567 053 4 813 507
TOTAL LIABILITIES 11 874 585 12 071 603 12 119 973 12 256 845 11 383 160
TOTAL EQUITY AND LIABILITIES 20 172 569 27 081 227 33 853 582 41 046 197 47 549 430
16.5 Annual Statement of Cash Flows
50

N$ N$ N$ N$ N$
CASH FLOWS FROM OPERTAING ACTIVITIES
Profit before taxation 9 867 670 10 017 373 10 035 798 10 530 961 11 010 326
Adjustments for:
Depreciation 872 308 872 308 872 308 844 308 844 308
Interest Received - -
Interest Paid 874 768 819 103 757 149 688 198 611 458
Tax Paid - ( 2 606 214) ( 2 655 616) ( 2 661 696) ( 3 753 839)
Operating profit before working capital changes 11 614 746 9 102 569 9 009 640 9 401 770 8 712 253
Working capital changes: ( 4 146 196) ( 199 384) ( 223 010) ( 235 291) ( 248 266)
(Increase) Decrease in Account Receivable ( 786 000) ( 45 500) ( 47 775) ( 50 164) ( 52 672)
Increase(Decrease) in Accounts Payable ( 139 671) 2 466 2 590 2 719 2 855
(Increase) Decrease in Inventory ( 3 220 525) ( 156 350) ( 177 825) ( 187 847) ( 198 449)
Cash generated from operations 7 468 550 8 903 186 8 786 630 9 166 479 8 463 987
Interest Received - - -
Interest paid ( 874 768) ( 819 103) ( 757 149) ( 688 198) ( 611 458)
Net cash inflow from operating activities 6 593 782 8 084 083 8 029 481 8 478 281 7 852 529
CASH FLOW FROM INVESTING ACTIVITIES
Additions to plant and equipment ( 5 656 590) - - - -

Loans to shareholders - -
Net cash utilised in Investing activities ( 5 656 590) - - - -
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from loans raised 8 358 882 - - -

Repayment of loans ( 536 295) ( 504 967) ( 610 417) ( 679 369) ( 756 109)
Net cash utilised in financing activities 7 822 587 ( 504 967) ( 610 417) ( 679 369) ( 756 109)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 8 759 779 7 579 116 7 419 063 7 798 912 7 096 420
CASH AND CASH EQUIVALENTS: OPENING 3 278 8 763 057 16 342 173 23 761 236 31 560 149
CASH AND CASH EQUIVALENTS :CLOSING 8 763 057 16 342 173 23 761 236 31 560 149 38 656 569
51
16.6 Sales Analysis

CLOTHING DEPARTMENT Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
School and Sports Attire
Units 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000 1 000
Unit Cost N$ 440 440 440 440 440 440 440 440 440 440 440 440
Amount N$ 440 000 440 000 440 000 440 000 440 000 440 000 440 000 440 000 440 000 440 000 440 000 440 000
Peak Cap
Units 10 000 10 000 10 000 10 000 10 000 10 000 10 000 10 000 10 000 10 000 10 000 10 000
Unit Cost N$ 80 80 80 80 80 80 80 80 80 80 80 80
Amount N$ 800 000 800 000 800 000 800 000 800 000 800 000 800 000 800 000 800 000 800 000 800 000 800 000
Embroidery
Units 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000
Unit Cost N$ 25 25 25 25 25 25 25 25 25 25 25 25
Amount N$ 100 000 100 000 100 000 100 000 100 000 100 000 100 000 100 000 100 000 100 000 100 000 100 000
Total sales: Clothing N$ 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000
ENGRAVING
Leather Engraving
Units 50 50 50 50 50 50 50 50 50 50 50 50
Unit Cost N$ 7 000 7 000 7 000 7 000 7 000 7 000 7 000 7 000 7 000 7 000 7 000 7 000
Amount N$ 350 000 350 000 350 000 350 000 350 000 350 000 350 000 350 000 350 000 350 000 350 000 350 000
Hand Bag Engraving

Units 100 100 100 100 100 100 100 100 100 100 100 100
Unit Cost N$ 50 50 50 50 50 50 50 50 50 50 50 50
Amount N$ 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000
Total sales: Engraving N$ 355 000 355 000 355 000 355 000 355 000 355 000 355 000 355 000 355 000 355 000 355 000 355 000
52
16.6 Sales Analysis Cont…

WOOD ARTISTRY Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Furniture Design
Units 20 20 20 20 20 20 20 20 20 20 20 20
Unit Cost N$ 7 000 7 000 7 000 7 000 7 000 7 000 7 000 7 000 7 000 7 000 7 000 7 000
Amount N$ 140 000 140 000 140 000 140 000 140 000 140 000 140 000 140 000 140 000 140 000 140 000 140 000
Engraved Doors
Units 20 20 20 20 20 20 20 20 20 20 20 20
Unit Cost N$ 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000 9 000
Amount N$ 180 000 180 000 180 000 180 000 180 000 180 000 180 000 180 000 180 000 180 000 180 000 180 000
Total sales: Wood Artistry 320 000 320 000 320 000 320 000 320 000 320 000 320 000 320 000 320 000 320 000 320 000 320 000
MEMORIAL PLAQUES AND TOMBSTONE ENGRAVING

Memorial Plaque Printing
Units 50 50 50 50 50 50 50 50 50 50 50 50
Unit Cost N$ 1 200 1 200 1 200 1 200 1 200 1 200 1 200 1 200 1 200 1 200 1 200 1 200
Amount N$ 60 000 60 000 60 000 60 000 60 000 60 000 60 000 60 000 60 000 60 000 60 000 60 000
Tombstone Engraving
Units 50 50 50 50 50 50 50 50 50 50 50 50
Unit Cost N$ 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000 4 000
Amount N$ 200 000 200 000 200 000 200 000 200 000 200 000 200 000 200 000 200 000 200 000 200 000 200 000
Total sales: Memo Plaques 260 000 260 000 260 000 260 000 260 000 260 000 260 000 260 000 260 000 260 000 260 000 260 000
Sales Summary
Clothing Department 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000 1 340 000
Engraving 355 000 355 000 355 000 355 000 355 000 355 000 355 000 355 000 355 000 355 000 355 000 355 000
Wood Artistry 320 000 320 000 320 000 320 000 320 000 320 000 320 000 320 000 320 000 320 000 320 000 320 000
Memorial Plaques and Tombstone Engraving
260 000 260 000 260 000 260 000 260 000 260 000 260 000 260 000 260 000 260 000 260 000 260 000
Total Sales 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000 2 275 000
53
16.7 Key ratios
Ratio Year 1 Year 2 Year 3 Year 4 Year 5
Gross Profit Ratio 53% 53% 53% 53% 53%
Net Profit Ratio 45% 43% 42% 42% 42%
Debt /Equity Ratio 0.79 0.40 0.25 0.17 0.12
Cashflow to capex 1.713851 0 0 0 0
Interest Cover (times) 15 16 18 20 24
54
17. Other Issues

17.1 Regulatory and Legal Issues
The following regulatory authorities’ laws, rules and regulations would have to be adhered to applicable to the
company. The regulatory authorities will be the custodians of the successful operation of the manufacturing
company; the regulations will be part of the mission statement for Mufunga Design.
Ministry of Finance- this regulatory body will be responsible for all the taxation and levies that are needed by the
company. Mufunga Design will liaise with customs and excise staff on the duties levied on the raw materials and
machinery.
Ministry of Health and Social Services-Mufunga Design will have to adhere to NOSA standards and those set
up by the ministry in terms of health and safety issues.
Ministry of Labour-this regulatory body will be responsible for the welfare of the employees and Mufunga Design
will employ and use its employees according to the labour act in place and if any changes arise the entity will
conform and perform in line with the Labour Act.
Registrar of Companies- the entity will be registered as a private company according to the registrar of companies
and the regulations therewith.
55

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BUSINESS PLAN

4.3 Training and Development.................................................................................................... 16

16.6 Sales Analysis Cont… .............................................................................................................. 53

SECTION A: GENERAL EXECUTIVE SUMMARY

• Clothing design and manufacturing;

1.2 Opportunity and Strategy

1.3 Ownership, Directors and Management Team

Nandi Mufinga 50%

Jomo Katenga 50%

1.4 Market Analysis

1.5 Strategic Marketing Plan

• Continuous improvement in service and product delivery to exceed customer expectations;

2.4.1 Long Term Objectives

2.4.2 Short Term Objectives

Name Percentage Holding

Nandi Mufinga 50%

SECTION B: CURRENT OPERATIONS

3.1 Products and Services

3.2 Manufacturing Process

Figure 1- Corporate T-shirt Manufacturing process

Pattern and sample

Attach Collar and

Close and Hem

3.3 Process Automation

3.4 Operating Time

3.5 Distribution and Warehousing

3.6 Machinery and Equipment on hand

3.6.1 Clothing Department

Fig 1 : Heavy Duty Embroidery Machines

Table 1: Clothing Department Machinery Inventory List

Department Quantity Replacement Value

Plain Sowing Machines Clothing 12 6,000.00 72,000.00

8 Head Embroidery machine Clothing 1 580,000.00 580,000.00

Peak Cap and hat manufacturing

Multi Needle Sewing Machine, 12 Needles Clothing 1 26,000.00 26,000.00

3.6.2 Engraving/ Memorial Plaques and Tombstone Departments

Fig 2: Heavy Duty Engraving Machinery

Table 2: Engraving Department Machinery Inventory List

Department Quantity Replacement V

1325 Laser Engraving Machine Engraving 1 520,000.00 520

3.6.3 Wood Artistry Department

Fig 3: Wood Artistry Equipment

Table 3: Wood Artistry Department Machinery Inventory List

Department Quantity Replacement Value

1325 CNC Machine Wood Art 1 660,000.00 660,000.00

4.2.1 Director (Nandi Mufinga)

4.3 Training and Development

4.3.1 Internal Training

4.3.2 External Training

4.3.2.1 The Hardap and Karas Region Training

Above, the dignitaries who attended were as follows:

Annexure 1 attached contains the detailed training course report.

4.4 Technical Partner

5.2 Private Companies

6.1 Historical Statement of Financial Position

6.2 Historical Statement of Comprehensive Income

6.3 Statement of Cash Flow

6.4 Operational Expenses