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DIFCO Project Proposal Final Draft
DIFCO Project Proposal Final Draft
DIFCO Project Proposal Final Draft
PROJECT BRIEF
Contact Persons:
Name: Manuel D. Orapa
Designation: Chairperson
Contact Number: 0907- 325- 7672
II. BACKGROUND
a. Organization Overview
● To adopt such other plans that may help foster the welfare of the
III. RATIONALE
Sale
(385,944pcs x12 pesos/unit) Php 4,631,328.00
Less: Cost of Sales
Direct Materials
385,944pcs x Php 8 Php 3,087,552.00
Direct Labor and Overhead
0.57% of Income
Costs 26,398.57
Net Income
Php 1,517,377.43
Divide by number of
members ÷ 302
Average Income per
member Php 5,024.43
*Based only on estimated maximum capacity of the Hollow Block Maker Machine for one
(1) year
Refer to Table 2. Class Size of 4” was chosen in estimating the annual sales to forecast
their maximum annual income capacity as it is the most common and in demand class
size of hollow block.
Table 2. Market Price of Hollow Block
Class Size Price per unit (Php)
4” 12
6” 14
The proposed Hollow Block Maker Machine will be able to perform all the
major phases of the production process with little to no manual labor; save all the
repetitive expenses mentioned above.
V. PRODUCTION
The production process will only utilize one machine - the Hollow Block
Maker Machine
Direct materials such as sand, cement and water must be supplied for
the production of hollow blocks. These materials will be mixed together and
the machine operator shall make the necessary procedure to come up with
the desired output – high quality concrete hollow blocks with two varying class
sizes (4” and 6”).
The assigned sales person will then sell the produced concrete hollow
blocks open to the market in their local area and even to their target
construction companies.
Activities 1 2 3 4 5 6 7 Person/Agency
Project Proposal
Preparation DIFCO
Construction of the
Proponent
Machine
Start of Business
DIFCO
Operation
VIII. MARKETING
a. Product
This project will pave the way for the market and operation expansion
of the Cooperative. As they were mainly focused on agriculture and lending
services, they want to widen their scope of operation and venture on the
construction industry by producing concrete hollow blocks.
It will not only give the Cooperative another avenue for revenue, but it
will also impose another channel in conducting business relating to
construction that will surely provide assurance to the continuance of their
business operation regardless of agricultural seasons.
Competitors under the same industry in their area is minimal and the
acquisition of an equipment that will help them for mass production will be
an advantage to the cooperative as construction companies opt to make
bulk orders of concrete hollow blocks.
The cooperative is not only relying on the outside source but also from
the members itself. The Hollow Block Maker Machine can increase
livelihood in the area, provide for a new way to earn from the already
existing products and services, as well as introduce high volume and
quality products to the market which in turn would attract investment in the
industry.
b. Target Market
The primary target market of the product that the Hollow Block Maker
Machine are the construction companies with an ongoing construction
activity within the vicinity of the Cooperative.
Locals who are also constructing housing projects and even the
members who patronize the Cooperative’s by-products are also seen as
target buyers of the produced concrete hollow blocks.
c. Demand
According to Hollow Concrete Block Market Size & Share Analysis
- Growth Trends & Forecasts (2023 - 2028), the hollow concrete block
market is projected to register a CAGR of over 5% during the forecast
period. Meanwhile, Market Research for the Philippine Construction
Industry says that the construction industry is projected to grow 21.2%
from 2020 to 2023, and then a further 9.6% until 2025.
The rising demand for the hollow concrete block market due to
increasing construction activities globally is expected to drive the
market’s growth. The growing awareness among consumers for
lightweight materials in modern architecture is likely to deliver
opportunities for the hollow concrete block market over the coming
years.
Considering all the above facts and factors, the usage and
demand of hollow concrete block in commercial construction and
residential-related applications are expected to grow in the forecast
period. Table 4 presents the projected demand for next three years.
*400,000 x 1.13%
** according to Market Research for the Philippine Construction Industry
***600, 000 x 1.13%
d. Supply
Demand – Supply
102,000 64,000 48,000
Gap
f. Market Share
Using the annual production volume of the machine and the total
demand, the percentage share of 85%, 84%, and 86% was achieved. It
indicates percentage share in the market. Table 6 shows the market
share.
*based on best estimate for actual production benchmarked from the same industry
Percentages are rounded off to two decimal places.
g. Pricing Strategy
The Cooperative will sell products based on the competitive pricing
strategy. The selling price is assumed to increase to 3% annually based on
the inflation rate (according to Philippines Statistics Office last February 7,
2020) in the province of Davao de Oro. Table 7 shows the projected prices.
h. Channel Distribution
j. Marketing Strategy
The project intends to tap the immediate market (which consists of the
cooperatives members) by promoting its income generating functionality.
External clients such as but not limited to contractors, builders and developers
will primarily be engaged through both an online and a physical presence.
Lastly the Hollow Block Maker Machine shall be promoted as a time and
energy efficient method – of which we can offer its service to others.
Furthermore, this Hollow Block Maker Machine would help us save time and
effort – of which we can offer its service to others.
Projected sales resulting from the construction of the project are based
on production volume and selling price of the product. Selling price is
assumed to increase by 10% every year. Table 8 indicates the projected sales
of the business for three (3) years.
*with a production estimate of 385,000 pieces per year, selling at the proposed selling
price of 12 pesos per piece. Selling price is multiplied by 10% (10% price increase per
year and inflation rate)
Upon the release of the proposed project, the Department of Labor and
Employment (DOLE) will monitor and evaluate the project annually within
three (3) years through the following actions:
Upon the approval of the proposed project, the Cooperative will be able to
start the construction of the Hollow Block Maker Machine. The project will benefit
the metal work establishment who will fabricate and install the equipment. Finally,
upon its completion, the members of DIFCO and the residents of Carmen, Davao
del Norte as a whole, can also take advantage of having a hollow block supplier in
their community as it means that aside from suppling quality by-products, the
cooperative can also provide employment as it will need additional workforce for
this business operation.
To ensure the sustainability of the project, the association should observe the
following:
quality product.
Approved by:
RAYMUNDO G. AGRAVANTE
Regional Director
DOLE Region XI
ALLAN R. BABAN
Provincial Head ADELA JADE C. TALDO
Davao de Oro Field Office Budget Officer