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Saturday, May 20, 2006

VC circle

The weblog is written by Sahad P.V., a business journalist based in New Delhi, India. He was an assistant editor with Business Today, India's leading business magazine, and had also previously worked with Business Standard and India Today Group Online. For those seeking information on VC funding this site is a virtual treasure house. Click at http://www.vccircle.com/blog

1 comment:

arun said...

SECTOR

· Food Processing Industry

FUNDS

· $ 280 Million (Rs 1120 Crore) or more.

SEQUENCE

· $ 40 Mn (Rs 160 Crore) from 01 Jan 2012 to 01 Jan 2014.
· $ 240 Mn (Rs 960 Crore) or more utilised in equal amounts of $ 40 Mn from 01 Jan 2014 till 01 Jan 2016.

COMPETITION

· No competition on the scale visualised, exists in the area.

PROFITABILITY ANALYSIS

· The land in the plains of North Bihar is very fertile due to the silt deposited by the rivers flowing from the Himalayas to the Bay of Bengal over the yrs.
· Global warming (melting of the Himalayan glaciers) guarantees the high level of ground water in the area.
· The potential of agriculture related entrepreneurship holds promise of great profits.
· The Food processing industry is guaranteed success due to the effects of Globalisation and increase in population across the world, and an increase in the number of working women.
· Since no such enterprise has been implemented in North Bihar on this scale, it is not possible to get (the required) exact figures.

ASSUMPTIONS

· With many well documented and proven success stories across the world, and the residents of Bihar too being clearly aware of their situation; it is assumed that the efforts of the ‘Art of Living’ (HH Sri Sri Ravi Shankar) will be effective in North Bihar.
· It is also assumed that the security arrangements instituted will be effective.
· Many incentives from the Govt of India and the Govt of Bihar can be safely assumed, once the enterprise gets established.







EXECUTIVE SUMMARY

· Inspire the residents of the area of interest to set up their own Food Processing Units --FPUs-- through the efforts of the ‘Art of Living’ (HH Sri Sri Ravi Shankar) the world’s largest NGO.
· The FPUs will prepare Pickles, Sauces, Daliya, Cornflakes, Sattu, and all sorts of processed food products including Chips, Sauces and fruit juices.
· The plan is to set up Seven (or more) Packaging Parks all across the identified (flood free) areas in North Bihar, from where the guidance will be given and the products of the FPUs will be attractively packaged.
· The Packaging Parks (each raised on funds of $ 35 Million) will consist of structures built on neighbouring plots of land (since a single large piece of land will not be possible); minimum 200m x 200m in area, or larger as per the requirements. All these structures will preferably be clustered together.
· The Marketing of the Packaged produce will be carried out by the Marketing Department in the HQ of the enterprise in Pune, communication being maintained over Internet, and telephone.
· Residents of the area will be given guidance regarding the available Govt incentives and the rules relating to Registration and Licensing of their FPUs from experts from these Packaging Parks.
· For produce requiring Packaging immediately upon preparation, members of the FPU could come inside the Packaging Park premises (after thorough checks) along with the Raw Material required for their produce.
· All activity will be computerised and FPUs will be responsible for their produce.
· FPUs could be given loans of up to Rs 40 Lakh ($ 0.1 Mn) each to facilitate their production activity on researched Legal terms.
· At $ 0.1 Mn per FPU, total 100 FPUs will be supported (for total expenses of $ 10 Mn); over two years.
· All FPUs will get profits commensurate to their production, and the principal (and Interest) of the loan amount given to the FPUs will be recovered in steps.
· The structures will be two Cold storages, all types of food packaging plants; a Vehicle park (with complete repair facilities); the Office Area; a Medical Inspection Room and a Shopping Complex. Other structures revealed from experience and research will also be incorporated.
· Systems of a Brigade HQ of the Indian Army, duly modified, will be applied and enforced in the Packaging Parks.
· The first such Packaging Park will be raised in Madhubani district of Bihar in the identified area by the proposer, Major Arun Kumar Jha (originally from the district, though born and brought up in Pune district in Maharashtra) from 01 Jan 2012 to 01 Jan 2014.
· Six other Packaging Parks with similar systems will be raised in other identified areas of North Bihar from 01 Jan 2014 to 01 Jan 2016. The enterprise will start showing the desirable results by 01 Jan2020.
· The staff, all from outside Bihar, will execute the laid down instructions researched in the preparation period by the proposer.
· The staff (Officers, Clerks, Drivers and Doctors) of all components of the enterprise (the HQ, the Packaging Parks and the Staff Selection Centre in Pune) will all be healthy males between 35 to 50 yrs, and will be changed/transferred after three to five yrs, based on the requirements. Their pay will be credited into the most convenient bank account given by them. They will all be specialists in their respective fields.

THE FINAL OPERATIONS

Vehicles of the concerned Packaging Park will collect the processed food products from the most convenient location of individual FPUs at pre-arranged timings, and get them to the Packaging Park. Since every FPU will be responsible for its product, two representatives of an FPU will accompany the products of the concerned FPU in order to expedite their Packaging. The vehicles of the Packaging Park concerned will subsequently deliver the Packaged produce to places given by the Marketing Dept in the HQ in Pune. Profit percentages for the costs of Packaging and Marketing can be worked out by the Accounts Department in the Packaging Park in North Bihar, and by the Accounts Department in Pune. All dealings with individual FPUs will be computerised and appropriate systems put in place. The required systems will evolve through experience.

EXIT OPTIONS FOR THE VC

· After the project gets consolidated (by approx 01 Jan 2020) it can be gone in for a strategic sale/merger with or acquisition by some Indian multinational.
· Otherwise also, once the project gets established; it will start yielding exceptionally high returns.

BENEFITS

Major benefits will be: -

· A decrease in migrations from Bihar.
· Profits of all concerned parties.
· Rising of the general economy of Bihar.
· A definite rise in the agricultural production of India.
· Immense Media Mileage to the acquiring Indian multinational.


THE TEAM

· Brigadier Ashok Kumar Bali. Aged 55 yrs; Brigadier Ashok Kumar Bali is an MSc Electronics and an MSc in Defence Studies. He also holds an MBA in HRD and has undergone a three-year course of the Indian Army called the Master of Management Sciences. He has put in 33 yrs of military service, and will be the Chairman of the enterprise headquartered in Pune.
· Two other (Civilian) Specialists. Partnership of two other Civilian Specialists will be sought after the enterprise is confirmed VC funding (in the preparation period).


GAINING THE RELEVANT EXPERIENCE

· The proposer has experience of 15 yrs active service in the Indian Army.
· He realises that starting from the bottom will be too time consuming, and might not guarantee success.
· He plans to gain experience in the Food Processing Industry relevant to the area of operations, and the execution of these plans till 01 Jan 2012.
· For this purpose, he will be requiring a sum of $ 0.2 Mn (Rs 80 Lakh) from the Venture Capitalist/ Angel investor by 31 Oct 2008.
· In that event, he will apply for premature discharge from service by Monday, 29 Dec 2008.
· He will get premature discharge (without Pension) by 31 May 2009 in that case.
· The proposer is prepared to sign any considered legal document to guarantee his motivation.

ABOUT THE PROPOSER

· The proposer has been born and brought up in Lonavla in Pune district of Maharashtra, and has completed more than 15 yrs of active service in the Indian Army.
· The proposer has survived a SEVERE Head Injury in a road traffic accident while undergoing a Military Course in the Infantry School, Mhow (MP) in Nov 1993, and has presently lost most of the hair on his head. So, he genuinely feels that he is DESTINED for this project.
· However, he retains all his earlier faculties, and Destiny has brought him under the influence of HH Sri Sri Ravi Shankar who exhorts his followers to contribute their abilities for the benefit of the society to which they belong.
· Even after the SEVERE Head Injury (in Nov 1993), the proposer has continued in service for these almost 14 more years (and remembers fluently, the FOUR languages that he knew prior to his accident) and has gained considerable insight into the practical management systems practiced in the Indian Army. He is convinced that the required systems will evolve with experience.