Feasibility Study on Tuna Longganisa

JE ENTERPRISE
A FEASIBILITY STUDY ON TUNA LONGGANISA
OCTOBER, 2013

Summary of the Findings
I. Background of the Study
The project aims to manufacture a nutritious tuna sausage branded as JE Homemade Longganisa, the first of its kind in Cagayan de Oro City. Tuna is an excellent source of heart-friendly niacin, free radical-scavenging selenium and muscle-building protein. Some of the selenium are found in the form of selenoneine, which has antioxidant properties. Tuna is also a very good source of energy-producing vitamin B6 and thiamin. In addition, it is a good source of anti-inflammatory omega-3 fatty acids (including eicosapentaenoic acid or EPA, and docosahexaenoic acid or DHA), phosphorus, magnesium and potassium.
The project proponents are Maeline M. Awitin, Jessa E. Bernaldez, Hope C. Cagalitan, Jean Stephanie C. Dayondon, Rafael France L. De La Cruz, Efrenita B. Magallon, and Ijeanwa I. Tambis. They are graduating students of Bachelor of Science in Business Administration, major in Financial Management at Lourdes College, Cagayan de Oro City for SY 2013-2014.
The proposed business is located in Macasandig, Cagayan de Oro City. The location has a total area of 300 square meters and is a real property of one of the proponents. Initially, only 72 square meters shall be occupied by the business.

II. Marketing Feasibility
The proposed product is based on the market opportunity discovered by the proponents about a different kind of sausage coming from fish, especially tuna. The demand of the product is taken from the total number of households in the second district of Cagayan de Oro City. Based on the five- year projection (2013-2017), the total households in the second district of the city would reach 1,100,712; the total demand would then reach to 45,696,336.The projected demand-supply gap analysis provides 42,678,096 units of sold tuna sausage, which is 93 % of the total demand.
Despite the presence of several competitors selling similar products, tuna sausage will capture an initial market share of 45%. The proponents used the cost-based pricing of the product with 15% mark up. It is sold in a package of 5 pieces at P37.00
In terms of advertising and promotion, the project will utilize leaflets, tarpaulins, banners and social media. Likewise, the marketing manager will establish connection with existing companies in Cagayan de Oro and neighboring towns to offer corporate accounts with special discounts so that JE Enterprise could supply tuna sausage in their respective canteen. School canteens are also target of distribution through consignment with canteen administrators.

III. Production/Technical Feasibility
Today, consumers are very health- conscious. They are very selective on the kind of food they purchase and eat. Organic food is always a top priority as tuna fits the bill because of its nutrients. The product provides a good source of high quality protein and other essential vitamins and minerals. It is filled with Omega-3 fatty acids which help maintain a healthy heart by lowering blood pressure, good brain function and development of vision and nerves of infants during pregnancy. It decreases the risk of depression, dementia, diabetes and arthritis.
The production process: wash the ground fish, drain and set aside for a while. Prepare and measure the other ingredients. In a mixing bowl, combine all ingredients except for the sausage casing. Mix all ingredients properly. Tie one end of the sausage casing and slowly fill the casing with the mixture and then tie the other end. Put the packages in a refrigerator one day before the distribution.
Production schedule is based on the volume ordered in advance by customers and on the projected seasonal increase of demand.
The proposed project site is at Macasandig, Cagayan de Oro City. The location is strategic because it is adjacent to the market and near the source of raw materials. Utilities required for the project are readily available. The plant has an area of 72 square meters and fully-sanitized based on the requirements of the City Health Department and the Department of Environment and Natural Resources (DENR).
Tools, implements, and equipment needed for the project are locally available. The materials may cost P 20,205.00
All proponents will share manpower hours for the project.
Proper waste management will be strictly observed based on the guidelines of the city health authorities.

IV. Management and Personnel Feasibility
It will be a business partnership composed of seven (7) general partners. The organization set up follows a line function. The business shall have an initial capital of P 15,000.00. Each partner shall contribute P21,430.00 for the business
The General Manager shall be the head of the organization. He is tasked to increase management effectiveness by recruiting and selecting right people for the right job, disciplining line managers, communicating values, crafting strategies, assigning accountabilities, planning, monitoring, and control. Under him are the following key personnel: The Marketing Officer is responsible for the marketing of the product to the right market, develops annual marketing plan and budget, and develop/request training for the sales force. The Chief Financial Officer shall supervise the finance unit and is the financial spokesperson for the organization. He is responsible for looking for financial sources. The Production Officer oversees the production process, draws up production schedule, estimates production costs and sets quality standards. The Administrative Officer is the Human Resource Officer of the business. He organizes meetings, arranges appointments, forecasts and manages the office budget, keeps personnel files, and supervises utility and contractual guards of the plant.

V. Financial Feasibility
The proponents shall invest P 150,000.00 as the initial capital of the business. The contribution of each partner would come from his own pocket. The proponents have assumed that the selling price of the product, market share, general administrative expenses and the selling expenses will increase by five percent (5%) annually.
An analysis of the Financial Statement of JE Enterprise indicates that Rate of Return on sales is maintained at ten percent (10%) annually within five-year period projection. It shows that the business is growing over time.
The Gross Profit Ratio shows a constant nineteen percent (19%) per annum figure, indicating a stable gross profit margin over time. Relative to the short-term solvency and liquidity of the business, its Current Ratio shows an increasing figure from 3.972 % to 9.843 % within the five-year period projection. This means a strong financial position of the business. With regards to the Working Capital of the firm, the financial statement analysis shows an increasing working capital of the business from year one to year five of projected operation. On the Measures of Stability, the financial paper indicates that the business has more assets than debts. Finally, regarding the Equity Ratio of the firm, the financial paper shows an increasing percentage within the five-year projection period. Overall, the business, as assumed, is stable and profitable.

VI. Socio-Economic Feasibility Going into business means investing in an activity that provides quality goods and services needed by the community. Aside from this, the business shall pay its taxes and other legal requirements to the government, which in return, will add to the infrastructure budget for the construction of farm-to-market roads and school buildings, etc. The business, as the need arises, will hire additional manpower to augment its present workforce in order to meet the increasing demand of the product over time. Likewise, the business will provide marketing opportunity to the retailers of the product. As the firm grows, it will go into franchising to enable other interested parties to replicate the business in other areas of the country. JE Enterprise will also fulfill its corporate social responsibilities by providing medical and related health services to the community, put up recreational facilities, conduct livelihood trainings and entrepreneurial assistance to the deserving groups of the community.

References
• Armstrong, Kotler P. Marketing: An Introduction 7e. Pearson Education Singapore, Pte.,Ltd. 2010
• Batra SK, Kazmi, SHH. Advertising and Sales Promotion, 2e.Excel Books, New Delhi. 2008
• Cuyugan H.Jorge. A Business Planning Manual, Booklore Publishing Corporation.2010
• Hooley, G. Saunders, J et al. Marketing Strategy and Competitive Positioning 4e. Pearson Education, Philippines. 2010
• Je JY, Lee KW, Lee MH et al. Antioxidant and antihypertensive protein hydrolysates produced from tuna liver by enzymatic hydrolysis. Food Research International, Volume 42, Issue 9, November 2009, Pages 1266-1272
• Ueshima H, Stamler J. Elliott P et al. Food omega-3 fatty acid intake of individuals (total, linolenic acid, long-chain) and their blood pressure: INTERMAP study. Hypertension. 2007Aug; 50(2):313-9. Epub 2007 Jun 4.
• Yamashita Y, Yabu T and Yamashita M. Dictionary of the strong antioxidant selenoneine in tuna and selenium redox metabolism, World J Boil Chem. 2010 May 26; (5) 144-50

References: • Armstrong, Kotler P. Marketing: An Introduction 7e. Pearson Education Singapore, Pte.,Ltd. 2010 • Batra SK, Kazmi, SHH. Advertising and Sales Promotion, 2e.Excel Books, New Delhi. 2008 • Cuyugan H.Jorge. A Business Planning Manual, Booklore Publishing Corporation.2010 • Hooley, G. Saunders, J et al. Marketing Strategy and Competitive Positioning 4e. Pearson Education, Philippines. 2010 • Je JY, Lee KW, Lee MH et al. Antioxidant and antihypertensive protein hydrolysates produced from tuna liver by enzymatic hydrolysis. Food Research International, Volume 42, Issue 9, November 2009, Pages 1266-1272 • Ueshima H, Stamler J. Elliott P et al. Food omega-3 fatty acid intake of individuals (total, linolenic acid, long-chain) and their blood pressure: INTERMAP study. Hypertension. 2007Aug; 50(2):313-9. Epub 2007 Jun 4. • Yamashita Y, Yabu T and Yamashita M. Dictionary of the strong antioxidant selenoneine in tuna and selenium redox metabolism, World J Boil Chem. 2010 May 26; (5) 144-50