1.
Executive Summary Name of the Company: EKOLOGI
Today, the world faces two major problems: First, the organic wastes, which
represent 53% of the total amount of garbage worldwide. This constitutes a major
problem since tons of garbage is dumped everyday without being used to benefit
the population. Second, the reason why EKOLOGI emerges is the farming current
situation, which, due to the increase of the demand of fertilizers, has become a
growing market. The demand of the market is not satisfied in 69%, the farming
industry needs fertilizers according to it’s consume and the growth of the world
population.
How can these two major problems be put together in one idea?
EKOLOGI takes advantage of the organic wastes as raw material to obtain Biofertilizers, which are generated by means of Biodigesters; but what strengths and
advantages does using a Biodigester as a technology to produce Biofertilizers
have?
A Biodigester is a low cost, clean and efficient technology, adapted through an
oxygenation system and dynamic aeration, which produces Bio-fertilizers 70%
faster and more efficient than any other Biodigestion system in Mexico lowering the
time of production. Ekologi uses biodigesters to produce the Biofertilizers, different
from the traditional Biodigestion system, since they are easy to install in anyplace,
a park, an industrial zone, urban forest or a dessert: In other words, Ekologi makes
the production plants adaptable to different locations because the Biodigesters are
simple, easy to handle and with a 20 year life span.
A Bio-Fertilizer is competitively, more effective, than any chemical fertilizer; it
generates a greater farming production, contributing to a greater amount of
nutrients in the field; it can be used in any green area, such as a garden, a plant, a
park, green roofs, etc. (unlike the chemical fertilizers, which have to be stratified
according to its use); it is ecological, which is one of the strengths of the product.
Today the Bio-Fertilizers respond to two broad sectors of the market: 1.The
farming sector that takes care of the current demand of food and agricultural
products where natural fertilizers are necessary. It is a new way of increasing the
agricultural production in a sustainable and exponential manner, assuring long
term farming by means of the use of completely natural fertilizers that provide
fertile soil, strengthen the field against droughts and improve the quality and
characteristics of any farming. There is 69% of dissatisfied demand in Mexico. 2.
The Home-Business sector that responds to the current ecological tendency,
involves retailers who seek for new ways of taking care of the environment, both at
home and at any green place: garden, plants, a greenhouse, green roofs, etc.
Therefore, the Bio-fertilizers EKOLOGI, provide a new environmental way to
maintain and fertilize any green area, avoiding plagues, increasing its quality and
growth and creating a more ecological environment at a low price.
The expansion towards other two sectors of the market is considered as well: The
private and the Government sectors. Companies invest a lot of resources in the
maintenance of their green areas, so does the Government in urban parks, forests
and green areas. They are major clients of good quality Bio-Fertilizers for their
green areas and new constructions. Both sectors require a low cost maintenance
through efficient Bio-Fertilizers that give a more ecological appearance, turning it
into a green and sustainable image.
In a market of expansion, the EKOLOGI’s bio- fertilizers are the first products from
a stream of environmental and technological products that will be introduced to the
green market, generating better strategies and training for the professional
development of the EKOLOGI’s team. We will also create a data base of major
clients who want to get the bio fertilizers as wholesalers and a data base of
independent distributors that want to market EKOLOGI’s products. That is why we
own a place where the first bio digestion devices are made and where the first pilot
productions of bio-fertilizers are performed
EKOLOGI, bases their processes of production and operations, under sustainable
schemes, in such a way that the biodigesters, used for the generation of our main
product, are totally ecological, since they do not need supplies like gas, electricity
or fuel. This is how EKOLOGI uses totally friendly technologies towards the
environment. In the production plant, the processes are optimized since our main
raw material for Bio-Fertilizers is the organic wastes; they are received already
separated; by means of a win-win strategy, Ekologi contributes to the elimination of
the organic wastes of the city or community where the production plant settles, and
Ekologi generates Bio-Fertilizers derived from them.
In the present time, EKOLOGI’s team is formed by: An Industrial and Systems
Engineer who leads the organization; two Mechathronic Engineers who are
responsible for streamlining the production processes; A BS in Communication
Science and a Graphic Designer who are responsible for the marketing and
promotion of the project at an ecological innovation level,. They are also
responsible for attracting the audience for a more sustainable world; an Economist
responsible for the sustainability in the finances, development and professional
training of the team; a Lawyer who is responsible for the project registration
process. An entrepreneurial team which seeks for growth and success and is
responsible, as leaders, for the change, the innovation and the sustainability they
will offer the world.
2. Economic Sector, The Company and its products.
2.1 Product: Bio-Fertilizers.
The main product of EKOLOGI is the Bio-Fertilizer which is a group of
micronutrients, and macronutrients as a result of a natural degradation process of
the organic matter, by means of a Biodigestion system. The three types of raw
material (enriched soil, manure, organic wastes) by means of a Biodigestion
system can constitute a Bio-Fertilizer.
Bio-Fertilizer components.
A Bio-Fertilizer, is made up by 4 types of elements and molecules




Nitrogen
Carbon
Oxygen
H2O
These four components provide a suitable atmosphere for the microbial activity of
degradation of the organic matter. Through the control and monitoring of the four
mentioned components, the degradation process can be accelerated. The various
degrees of control lead to various types of Biodigestion; this is where the dynamic
aeration system emerges. This system can accelerate de Biodigestion by means of
the control of the action of the oxygen in the process.
Carbon and Nitrogen are two essential elements for the nutrition of any living
organism, and must be in suitable proportions for a good Biodigestion. The
microorganisms of a Bio-fertilizer use carbon to obtain energy, and nitrogen for the
protein synthesis; therefore, when this fertilizer is used in farming or a green area,
it provides a greater growth in the flora as a result of a greater contribution of these
nutrients.
Oxygen is an essential element for the aerobic decomposition and the survival of
micro biota of compost, so if this molecule did not exist, the aerobic organisms
would start to die, becoming an anaerobic process, which is slower. This is why the
"dynamic aeration" provides constant oxygen, accelerating the Biodigestion
process as a result.
The aeration must be balanced with the maintenance of the humidity, since the
water (H2O) is another essential element for the survival of the microorganisms
that participate in the Biodigestión. This process, the aeration, is controlled
altogether with the humidity degree, obtaining a humidity degree of 50% when
initiating the process, and of 30% or 40% when finalizing the process. The
Biodigester allows the Bio-Fertilizer, not to lose the ideal humidity degree, and at
the same time the “dynamic aeration” system maintains a suitable balance
between humidity and aired.
Compared to any other chemical fertilizer, there is no match for the Bio-Fertilizer in
terms of the benefits that it offers. The Bio-Fertilizer is completely natural and
sustainable, it improves the soil structure and increases the profitability and
efficiency of farming; increases the growth and quality of any sown field, which is
necessary when there are droughts or major demand of food; it avoids the erosion
of the soil which is a solution to the problems that the chemical fertilizers present.
The Bio-Fertilizer provides nutrients to the flora, strengthening it against plagues,
droughts and insects.
The benefits the Bio-Fertilizers offer are effective due to the components they are
made of, such as micronutrients and macronutrients that fertilize and provide
components that enhance the quality and growth of any green area.
The next chart shows the micro nutrients that are contained in the compost and in
the Bio-fertilizer.
Multifunctional product.
A Bio-Fertilizer is a multifunctional product; since it comes from organic
components and does not contain chemical substances, it becomes totally natural;
this feature allows it to be used in a myriad of areas, ranging from 25 million
hectares of farming in Mexico, to the hundreds of urban parks, forest, green areas
of companies, green gardens, roofs, and any type of plant and/or flora. This
represents a great advantage, because unlike the tens of classifications of
Chemical Fertilizers, a Bio-fertilizer can be used in any of the mentioned areas.
The technology used in the production of the Bio-Fertilizers, represent a great
advance in advantages and timing, because unlike other processes of traditional
Biodigestion, they are produced by means of adapted Biodigesters through the
Dynamic Biodigestion system, which represents seventy percent less time in their
production and they surpass clearly in quality the chemical and similar fertilizers. In
the present time, the Bio-Fertilizers can be used in any green area as we
mentioned above. There is no limit in terms of usage; therefore, the Bio-Fertilizers
represent a new way of fertilizing, an increase in the farming production, the
maintenance and preservation of green areas in an economic, fast and efficient
manner.
Raw material.
The bio-degradation uses 3 kinds of raw materials to obtain the Bio-Fertilizers

Enriched earth Enriched Soil

Manure

Organic wastes
The following table shows the organic waste that is used in the Biodigestion
Waste
Brown
Green
Wood sawdust, wood shavings
Perennial leaves
Dry leaves
Straw and hay
Dry grass and pruning waste
Trees pruning
Flora and Organic kitchen
wastes
Herbivore animal dung
Fruits and vegetables wastes
Leaves
Green weeds
Green grass
The amounts of the three types of raw material, are stratified in 1/3 of each type, in
relation to the size of the container where the Biodigestion is carried out, that is to
say, we use 1/3 of organic wastes, 1/3 of soil, and 1/3 of manure; this mix provides
an suitable combination of macronutrients and micronutrients that allow to fertilize
any green area in a more productive way. The stratification of the 3 types of raw
material is based on a balanced combination of components in order to have a bio
fertilizer with better quality and effectiveness that responds to the field and green
areas needs.
The total amount of required raw material corresponds to the following equation.
Amount of Type of Raw material:
((X Total capacity of Capacity measured in kg)/3) (X Total Number of Containers.
Benefits of the Product.
In the Farming Sector.
The BioFertilizer, provide a great benefit in the field, because they increase the
exponential growth of the agricultural product, that is, it increases the rate of
growth in more than 50% in any sown field like maize, vegetables, vineyards, etc.
This way, the use of chemical fertilizers is avoided, making sure to have an
agricultural product with the best characteristics and guaranteeing fertile grounds in
the long term. It is also important to mention that EKOLOGI’s products strengthen
the fields against plagues, droughts and any other adverse situations.
Other Benefits:

It retains the humidity of the ground.

It allows a better oxygenation of farming.

It controls the erosion.

It improves the structure of the ground.

Generation of a sustainable cycle of organic matter.

Greater need for fertile soil, and with greater nutritional production.

The plants improve their quality.

We help to preserve the environment and foster the use of natural resources

It does not kill the bacterial flora of the ground as it happens with Chemical
Fertilizers.
In the Household Sector.
The use of the Bio-Fertilizer is applicable in any green area of a city, improving the
appearance of any green place, such as a greenhouse, a garden, potted plants,
trees, green roofs etc. This is an important point to make. The Bio-Fertilizers are
multifunctional, they can be used in a myriad of areas, in addition, they provide the
necessary nutrients to improve the conditions of these areas, to increase its growth
in times of drought, as well as to avoid the formation of plagues and bugs.
Private and Public Sectors.
Our products improve the company’s image. It is important and it is even more
important when they invest in maintaining their green areas; the benefit is twice as
effective because our products are easy to use, so there is no need to hire people
to apply these products in the garden. Using the Bio-Fertilizer is as simple as
pouring the materials from the bag and observe the results since the very first
days. The Bio-Fertilizers EKOLOGI improve the image of a company due to the
visible results in their green areas. This is an important fact, since image is a pillar
of the present societies, investing in environmental products improves the business
image and the work ambiance for its employees. The fact of using eco-friendly
products makes a company socially responsible and committed to their
environment.
In the public sector, our products as in the private sector, improve the image that
the government offers the society. Nowadays, the Mexican government has
promoted several programs such as The Green City Plan, by which it improves the
appearance of green areas. However, there is still so much to do about it. Our
products enhance any green area in terms of growth, quality and appearance. The
government improves the conditions of parks, roads, traffic islands, zoos, new
public buildings, and in this way, it invests in the quality of people's lives and in
reducing pollution. This is how EKOLOGI’s products generate benefits and
eliminate organic trash 100%.
2.2 S.W.O.T. Analysis.
STRENGTHS.

The Biodigestores used in the Biodigestion process, allow a production 70%
faster compared to the production systems of conventional Biodigestion.

EKOLOGI’s production processes eliminate any organic waste completely,
eliminating a pollution problem at the same time.

The technology used for the production, is friendly with the environment
since it does not require supplies such as, gas, gasoline, or electricity.

Technology of profitable production that at least does not require of
maintenance or renovation in 20 years. This reduces production and replacement
costs, allowing lower prices of Bio-Fertilizers for the client.

Technology of production (Biodigesters) easy to produce, with capacity of
installation and replication in any type of zone. It has a cost of manufacture of $40
dlls per unit.

We have started production processes on a pilot basis in 2 pilot productions,
participating and distributing products in an initial stage.

Operations are based on a sustainable system of supplies for efficient
operations, and a greater productivity.

Products of immediate incorporation to the environment.

Beneficial products in four market sectors with high potential and growing
demand.

Entrepreneurial, visionary, competitive and efficient work team, which has
expertise and skills in multidisciplinary areas.

Competitive prices by over 70% compared to formal and informal
competitors.
OPPORTUNITIES.

• Bio-fertilizers are to have great success due to the shortage of oil, which
will prevent the generation of chemical fertilizers.

The fertilizer market has not been able to supply the demand of fertilizers in
69%, based on statistical data of the INEGI, for Mexico, and with a tendency of
demand growth both in Mexico and in the world.

33% of the raw material used in the process, corresponding to the organic
wastes, represents 52% of the total wastes world-wide. This project has the
possibility to enter a myriad of zones and take advantage of these wastes and
generate Bio-Fertilizers.

Currently most of the competition does not supply products to the retailing
sector, which allows EKOLOGI to focus its efforts on it.

There is a large market in Mexico, with increasing needs that comprises four
segments: agriculture, private, public and Business-Home.

Exponential growth estimates for environmental businesses, with
comparable growth to the aerospace, pharmaceutical and biotechnological
industry.

Growing environmental market in the four action sectors of EKOLOGI.

Reduction of taxes for companies with social and environmental action.
WEAKNESSES.

Company in consolidation stage.

There are just a few people in the work team.

There is not capital available right now to begin the full-scale operation.

The company has not been incorporated.

The brands haven´t been registered by IMPI yet, nor the patents that have
renewals of the aerobic bio digesters.

• There is no capital for the production of the hermetic metallic packs for the
bio fertilizers.
THREATS.
 Risks of infringement or implementation of the idea before EKOLOGI’s
Project starts operation (One year).

Risk of facing legal issues derived from the use of the idea.

Chemical products are very used in agricultural sectors where EKOLOGI
intends to impact with its products.

There is a possibility to implement the business model and the
implementation of bio- digesters and EKOLOGI’s technology at a massive
scale.

Risks in the exporting costs of the products.

Economic recessions that could affect the company.

High interest rates in Mexico, in the access to programs of Financing, which
could generate debts for the company.

There is a risk of suffering from lack of organic waste, or that these could be
managed by governmental entities.

Humidity and odors are produced in the bio digestion process when there is
no control over the process.
3. Market Research and Analysis.
3.1 The Clients.
The market to which EKOLOGI’s efforts are directed is divided into 2 main sectors:
The commercial sector and the industrial sector.
The Commercial sector comprises consumers with the following characteristics:

Age: 23 to 59 years old.

Gender Males and Females.

Marital Status: Single, Married.

Socioeconomic level “C and C+” C+, B, A.

Level of Education: High School or upper education.

Housing characteristics: Houses with all the basic services.

Geographic unit: Local market (State of Mexico, Federal District).

Geographic conditions: sub-humid temperature land areas, sub humid
areas with summer rains, limited ecosystems.

Type of Population: Megalopolis, urban.

Reference Groups: Family, coworkers, friends.

Social class: Upper middle, High.

Personality: Assertive, practical, imaginative, open, casual, experienced,
self-reliant, dependable, relaxed, smart.

Culture: High.

Family Life Cycle: Unmarried young person, unmarried middle-aged,
young married couples without children, married with children.

Reasons for Purchasing: Consistency, innovative products, membership

Frequency of Use: Potential user and first time.

Attempt to use: Frequent.

Rate of Use: Medium and small.

Loyalty: No specific preferences.

Willingness to Purchase: Users willing to buy and indecisive users.
The second identified market is the industrial sector, which is distinguished by the
following characteristics:
 Core business: Agricultural industry.

Size of the Company: Micro, small and medium companies.

Technology: Dura and hybrid.

Condition: Potential clients and first time.

Installed capacity: Between 60% and 90%.

Purchasing Function: Negotiating price, credit, date, freight and warranty.

Frequency Exponential trend purchases from February to June.

Shopping area structure: person responsible for the supplies.
3.2 The Market.
The International Fertilizer Industry Association, in its article Technological
Development in the use of Fertilizers, estimates that the energetic diet per capita
world-wide will be increased 9% towards 2030. Due to the increase of population,
food for 8.2 billion people will be demanded; therefore fertilizers with a controlled
and slow Nitrogen release will be needed. However, these technologies are not
available for small and medium farmers.
In the international market 65 million tons of chemical nutrients are marketed.
These chemical fertilizers showed a dropping tendency during 2009 in spite of a
slight increase in the prices during the last quarter of the year.
the International Fertilizers Association, considers a world-wide production
between 197 and 215 million tons of chemical fertilizers in the years 2011-2012,
with a surplus of only 5% in production as opposed to demand, as well as
increases in the costs of the supplies for the nitrogen based fertilizer production,
due to the high prices of petroleum, since the natural gas is the main component of
such fertilizers.
In agreement with the report on Historical Statistics of Mexico 2009 of the
manufacturing sector, issued by the National Institute of Statistic, Geography and
Computer science, from year 2000 on, in Mexico, the nitrogen based fertilizer
production, like Nitrate of Ammonium, Anhydrous Ammonia and Urea has stopped
and so, diminishing the total chemical fertilizer production in 51%; from 1.459.799
tons in 2000, to 750.712 tons in 2008.
In the inform "Mexican Market" National Association of Fertilizers Retailers, it is
stated that since 2001, Mexico imports 100% of the urea and ammonium nitrate
that was traded in 2005, 2, 800,000 tons by ship and around 130,000 tons by train
were imported, which makes a total of 2,930,000 tons that represents the 70% of
the total of the traded fertilizers. (National Association of Fertilizers Retailers).
The imports sector has increased in the last two years, according to the Mexican
agriculture, livestock, rural development, and fishing and feeding Department
(SAGARPA); the demand of fertilizers in Mexico is covered by the imports, mainly
made in china, Ukraine, Canada and USA, causing a disintegration of the
fertilizers industry in Mexico with such cost for the manufacturers.
Mexico occupies the eleventh place in imports of fertilizers at a world-wide level.
The imports during 2008 were located in 2.2 million tons, whereas the exports were
located in 531,897 tons.
In agreement with data obtained from SAGARPA, the costs of chemical fertilization
represented; in average 27, 3% of the total costs of maize production in 2007,
which increased the price of the products. The Biweekly Report of Prices of
Fertilizers January 2012 of the National System of Information and Integration of
Markets (SNIIM), organ of the Secretariat of Economy, weighs the prices of the
Urea between $7.250 and $9.900 per ton and did ammonium phosphate between
$9.672 and $36.146 per ton.
Of the 21, 4 million hectares that are farmed annually in Mexico, only 10, 2 million
are fertilized, which represents 47, 7% of the sown surface. This is an excellent
opportunity for EKOLOGI to get a market niche.
The effects of chemical fertilizers on the sowing land, are harmful in the long run
because of the intensive chemical fertilizer used, it creates a total unbalance of the
ground, making it unable to support the vegetal matter that grows in it, causing
erosion.
The repeated application of chemical fertilizers eliminates essential microbes that
are very necessary for a healthful and living ground. Since the plants are not
capable of obtaining the nutrients from these dead soils, they only rely on the
chemical fertilizers to survive.
Chemical fertilizers need water to release their nutrients; this means that the
nitrogen, phosphorus and potassium are dissolved into water agents, polluting
them and affecting negatively the life in the lakes where the chemical fertilizers
release their nutrients in a very accelerated way on the grass, providing a superior
excessive growth before the roots can pick them up; this makes the grass weak
and it requires frequent mowing. Therefore, Ekologi produces and markets BioFertilizers that do not generate the harmful effects of chemical fertilizers.
In order to determine the market size in the business and industrial sector, the
technique of the chain rule has been used. Which segments and limits the number
of potential clients?
In the business sector and considering the consumers preferences, a potential
market of 346,662 people has been calculated, while in the industrial sector, the
figure of 180 companies.
The difference between this markets size is determined by the preference for the
non polluting organic products. This is considered as part of a consumer’s culture,
regarding the current demands from industries and households in terms of
environment care.
Offer and Demand Projection in Mexico.
Based on the data of INEGI and ANACOFER, which is the chamber of the fertilizer
industry that holds 65% of the most important fertilizer producers, we were able to
know the level of the fertilizer production at a national wide. We have to emphasize
that based on the offer and demand analysis, in 2008, in Mexico the 31% of the
demand used to be produced at a national level, which tells us a very important
data about the potential of the unsatisfied demand that exists.
By using this method of simple linear regression, we were able to analyze and
quantify the market projection in a very precise way based on the trends of the
offer and demand, being able to calculate an unsatisfied demand of 4,507,570 tons
in 2012, and coming to a point of 6,041,404 tons of unsatisfied demand in 2015,
based on this data, we analyze the potential market, and we are able to see a
growing market with new needs and more effective solutions that avoid the
pollution of the agricultural crops, and that these solutions involve fertilization at a
low price. The ongoing increase in the chemical fertilizers due to the oil lack will be
produced at a lower level, and the doors will be opened to the bio fertilizers as the
main source of world fertilization.
In the following table, the historical data are taken from 2008 like referring
departure for the demand projection, supply and not covered demand of fertilizers.
Year
Demand (in tons)
Supply (in tons)
Not covered
demand (in tons)
2008 (Historical
Data)
3,483,564
1,079,905
2,403,659
2009
4,050,870
1,077,074
2,973,796
2010
4,618,176
1,133,122
3,485,054
2011
5,185,482
1,189,170
3,996,312
2012
5,752,788
1,245,218
4,507,570
2013
6,320,094
1,301,266
5,018,828
2014
6,887,400
1,357,314
5,530,086
2015
7,454,700
1,413,362
6,041,404
3.3 Market Entry and Growth.
Entry Strategy.
The Company’s operations have begun in the Technological University of Mexico
(UNITEC) facilities, Campus Ecatepec, located in Avenida Central 345, Col. Ejidos
de Tulpetlac, Ecatepec de Morelos, in the State of Mexico. The first composting
facility and the administrative offices were set up in this location.
We are getting the organic wastes around 5 km of distance from this location, in
order to start the composting production cycle, generating a compost production
volume that will be sold and promoted in fairs and entrepreneurial expos about the
environment, agricultural industries, pymes and entrepreneurs. We expect to get
contacts and potential clients in both sectors. Within these events, the product is
offered in a kilogram of compost presentation, metallic and hermetic packing with a
price of $15.00.
The main factor that allows Ekologi to enter in the market is the creation of a
portfolio of industrial clients with a demand of Bio-Fertilizer of more than 1.000
kilograms a month at an affordable price; in this case, the price per ton is reduced
to $12, 50 per kilogram. In this way, we achieve periodic sales of six tons a month
to support the production costs.
Growth Strategy.
The next stage consists of both evaluating the client’s satisfaction in both sectors;
mainly following up on the clients of the industrial sector, since they are the main
clients in whom EKOLOGI is interested.
Finally, if we want to take the products to the business sector, we need to create a
retail distribution channel. We can do that through the big box retail outlets like
home depot, Sam’s club and Wal-Mart, at a regional level first; in this case the
price for the products on the shelves will be $20 per kg of compost. In this way, we
will reach a bigger market portion that is willing to obtain the product. Therefore,
the product positioning in the market is improved.
The growth of the company is sustained, according to the projection of the not
covered demand of chemical fertilizers which is of 4.507.570 tons for 2012.
3.4 The competition and its advantages.
Vermiorganics: Company with 24 years of experience in the organic (worm
humus) fertilizer production. The ripening process lasts 90 days. They have nine
distribution centers in the center and north of Mexico. Only wholesale purchases
Minimum purchase: one ton.
Compostera de Occidente: A Company that has produced compost for 15 years;
8.000 tons per year. Only wholesale they only have a plant and distribution center
in Guadalajara, Jalisco. The compost ripening is completed in 45 days.
CompostaMex: A Company that has used organic wastes for the production of
compost for 15 years. The company's production technique is through the dynamic
aerobic turn around that is made in great soil extensions; it requires the product to
be in constant movement in an open area. This process requires approximately 14
weeks concluding. The compost that is offered is the result of organic wastes of
agave and cane, which limits the amount of nutrients to be supplied The product is
only provided in bulk, without packing and from 100 tons as a minimum sale; this is
why they are only focused on wholesale and do not have branches. The price per
kilogram is $50.00.
Green Fish: Company with 12 years of experience in organic fertilizer production
derived from organic wastes of diverse species of fish, with presence in the north
of Mexico and the south of the United States. They only take wholesale orders,
from 100 kilograms.
Farmacia Agroquímica de Mexico: Company with 17 years of experience in the
production of bactericidal and nitrogen based chemical fertilizers. They have 300
distributors throughout the Mexico. Their products are packed up. The company is
oriented to the business and industrial sectors, with prices from $50, 00 per liter of
nitrogen based chemical fertilizer.
We can say the main strengths of the direct and indirect competition of Ekologi are:
greater experience in the present market; there are already in the market; they
count on plants and infrastructure for the fertilizer production.
Within the advantages that Ekologi has over the competition and the main one is
the faster process of production of bio-fertilizers in the Mexican market, which is
three weeks. Also, EKOLOGI is focused on retail and wholesale, covering a portion
of the market that has not been paid attention to.
3.5 Market share.
The estimated demand for EKOLOGI’s products has been calculated using the
chain rule method, and we have the next calculations:
In the commercial sector:
 They have the Demographic characteristics mentioned before: 2, 311.079
people.
 They have the psychographic characteristics (15%): 346, 662 people
 They are interested in the product (15%): 51.999 people.
 They are willing to consume the product (15%): 7.799 people.

Estimated Annual Demand (12 kg per year x ready) 93, 588 Kg.
In the industrial sector:
 They have demographic characteristics: 257.
 They have the need for fertilization (70%): 180.
 People that are willing to buy the product (20%) 36.
 Estimated Annual Demand (12 tons per year x willing) 432.000 kg.
3.6 Evaluation of the market in times of implementation.
In order to measure all production and marketing efforts of EKOLOGI, we selected
some parameters that reflect the actual market results.
 We evaluate the number of sales in each distribution channel, making a
comparison between the estimated demand, sales forecast and actual
sales. This way, decisions can be made, based on the level of production of
the compost and renewed strategies can be established for each of the
sectors.

We determine the profile of the visitors in fairs, tradeshows and in
entrepreneurial events as well as in environmental events where EKOLOGI
attends. This is with the purpose of creating sale tactics that are aligned with
each kind of public and also with the purpose of identifying new market
niches and prospects.

We explore to depth the characteristics, preferences, activities and uses that
our frequent clients shows towards our products in order to detect areas of
opportunity and satisfy our customers' needs.

We evaluate the level of participation of potential and real clients in the
social networks like Face book and YouTube, to measure the positioning of
the brand in electronic means.

We compare the rate of use and the effectiveness of mass media with the
client, like the company’s Web site, telephone and email, to manage the
improvement in customer service.

We measure the response level and participation in organized events by
EKOLOGI as lectures, entrepreneurial events, and environmental
encounters, in order to know the willingness and the interest of the potential
and real clients in the company’s products and mission.
4.0 Marketing plan.
4.1General Marketing Strategy.
Our main strategy is to present the benefits of organic compost as fertilizer,
highlighting its low market price, accessibility and rapid production process,
listening to and identifying customer needs, presenting a reasonable solution.
4.2 Price Policies.
 • Introduction prices: The price to enter the market in fairs and tradeshows is
$15.00 per kilogram of compost in sealed and metallic bag presentation.

Industrial Volume Discount Policy: for orders of more than one ton, $ 12.50
per bulk kilogram. In case the client requires the order to be sent to him by
land, the following costs are applied and they will have to be paid
independently. These costs apply for one to five tons of Bio-Fertilizer
shipments.
Destiny
Cost per Service
Urban zone Federal
District
$1,500.00
Metropolitan zone State
of Mexico
$1,500.00
Pachuca, Hidalgo
$3,500.00
Puebla, Puebla
$5,000.00
Jalapa, Veracruz
$6,500.00
Guadalajara, Jalisco
$7,500.00
Tampico, Tamaulipas
$7,500.00
Saltillo, Coahuila
$11,000.00
Cancún, Quintana Roo
$22,000.00
Ensenada, Baja
California
$30,000.00
The prices do not include special taxes, or services; 24 hrs are considered
for loading and unloading in the delivery destination; these prices are
determined based on a greater comfort for the final client; since the
production plants of EKOLOGI, are adaptable and replicable plants in a
great amount of places, the cost of transport is lower. The price for the
center and metropolitan area of Mexico City is an example of this. The cost
represents 2.4 % of the total gross cost of the product. Therefore, this
determines the low and affordable cost for the client. In the case of zones
within Mexico, the installation of economic production plants based on
sustainable systems of supplies, are foreseen, just like the ones which
operates in Mexico City. This condition will allow the cost of transport of the
product to be reduced because of the closeness of the zone of production
and the client.
4.3 Sales Tactics.
The professional development of the force of sales is a priority for EKOLOGI, since
the sales representative must count on specific abilities to take care of the
commercial sector in fairs and trade shows and on the other hand, with the
industrial clients. Therefore, we seek to listen to the customers to identify their
needs and provide an effective alternative solution to the products of the company.
Thus, certain tactics have been determined regarding the decision making or
negotiation with customers.

Active Listening: if the customers search a particular solution by their own
initiative, using the products of EKOLOGI, the sales rep asks and listens to
the current status of their situation, obtaining answers about the kind of
space the customer wants to fertilize, the type of vegetation, characteristics
and prices of products currently used, and thus the sales representative
builds a real benefit EKOLOGI compost package, meeting the customer's
stated needs.

Alternative Closing: it presents the product of a kilogram of compost to the
potential client, highlighting its benefits and price. Finally it asks if you want
that presentation or if you prefer a different one, depending on the
availability of inventory, and also offers a discount or promotion to buy a
product of greater volume.

Negotiation of Terms: For industrial customers, the sales rep presents
alternatives of wholesale price, freight, delivery time and place, everything
under an atmosphere of interest in providing the client the best service from
EKOLOGI; the conditions are always focused on a win-win basis.
4.4 Policy of warranty service
In order to increase and maintain customer satisfaction, EKOLOGI has established
various post-sale policies:
 Registration: After making the purchase, the customer offers to provide
personal information such as name, age, address, telephone and email,
giving a proper notice of privacy to protect your information. With this data,
the company may contact the customer to give notice of promotions, events,
discounts, courses offered by the EKOLOGI Foundation and any valuable
information that allows better use of products and continue in the long-term
relationship. The clients will be able to get in touch with the company by the
information printed on the pack of the product.
 Confirmation phone calls: they are primarily made for industrial customers,
in order to verify that the requested compost was correctly delivered on the
agreed conditions, reaffirming the commitment to the customer service by
the company.
 Scheduled Phone calls: these are performed three times a year to thank the
industrial customer's preference, to check the proper functioning of products
and solve any situation if it is necessary; these also works for any problems
that haven’t been detected before.
 Customer Service Customer Service: EKOLOGI has a call center customer
service that makes it available to answer any questions, addressing a
complaint or receive any suggestions or wishes from the clients. . This
service is also available online through the website, email and social
networks of EKOLOGI.
The following are warranty policies for EKOLOGI’s products.

• The Warranty of the goods is limited to that specified by the manufacturer,
if it is not specified, it is limited to two months from the date of delivery, and
it is only against manufacturing defects.

The area of Customer Service is the only authorized department to receive
goods that have warranty.

Staff Customer Service area, without exception, it is required to physically
check the goods.

The guarantee by defects of production of compost organic EKOLOGI is
exclusively the replacement of the product.

All organic merchandise corresponding to compost in guarantee will have to
be accompanied by the invoice or note sent in the day of the purchase.

The Order of Inspection, is the only document that will endorse the reception
of compost, therefore the client will have to demand this document when
giving any merchandise to the area of Customer Service, by such reason
The guarantee will not be valid in the following cases:


When the product had been used in conditions different from the normal
ones.

When the product had not been operated in agreement with the
specifications of the instructive packing or of industrial use.

When the product had been altered by no authorized people.

Where there is no invoice or receipt.
4.5 Advertising and promotion .
We have selected the following type of media, in order to let the audience know our
product. The objective is to position the brand in most of the mass media and to
get closer to more market segments.

Leaflets: they have characteristics and benefits of the product, images,
prices, and the contact with the company. This leaflet is a regular sheet
printed in bond paper. Three kinds of inks are used. These are to be
delivered in tradeshows and in commercial fairs.

Guide paper: this is a regular sized couché paper sheet, which contains
specific information of how to use the compost in plant pots, trees and in
gardens.
Banners and Infrastructure: They were created based on ecological
designs in the EKOLOGI headquarters, to provide and inner and outer
identity. The purchasing of advertising infrastructure for green fairs, events
and exhibits, will be in accordance with the project and will comprise
sustainable materials, providing a coherent and ecological image for the
clients.

 Web page: this is our main presentation of the company using it; we can
find all the information of EKOLOGI’s products and its use. There will be
news about the environment and green technology. . We can also find the
company’s history, achievements and projections, as well as the contact
with the members of the same firm.
 Social Networks: EKOLOGI counts on three profiles in social networks:
Facebook, that allows the direct interaction with the clients of the company,
as well as with Institutions and Foundations of the same industry;
Promotions campaigns can be easily created and the market can be
informed in an effective way. YouTube, which is the platform where the
promotional and institutional videos of the company are stored and
published and TWITTER, that will allow an interaction with the clients in real
time, spreading promotions, and benefits of the EKO-FERTILIZER. This is
low-cost advertisement for EKOLOGI.

Green ecological fairs: EKOLOGI participates in an entrepreneurial and in
an environmental way to present the products at wide market sectors and to
generate commercial and business contacts. Examples of these fairs are
The Green Expo, Expo Enverdecer, and National PYME week, among
others.


Expo Earth Alive EKOLOGI: event organized and sponsored by
EKOLOGI, where associations focused on the environmental care meet to
generate contacts, to offer workshops and seminaries that promote the
participation of the society.
Public Relations: This mainly goes in two ways. First, the strategic
alliances with the Administration of the Chapultepec Forest (Bosque de
Chapultepec) and the Netzahualcóyotl Greenhouse, who will provide a free
spot within their facilities to promote and sell the EKOLOGI products, as
well as the installation of the first production plant of Eko-Fertilizer.

Collaboration with a Journalistic Agency: will work altogether with the
Agency of Environmental Journalism Blue Planet, in order to promote the
events in which EKOLOGI participates, as well as notes and reports about
the innovative products that the company develops.

Participation in radio programs: EKOLOGI’s team will be in regular radio
programs as well as in the web in order to communicate the company’s
philosophy, the products and the service. · . We will host our participation
in radio programs like Zona Verde de Radio Red 1110 AM, Ecología,
Cultura y Algo Más de XEKG 820 AM en ABC Córdoba Radio, Ecología,
Música y Algo Más de econciencia.com y La Voz del Mayab de
radioecológica.com.
P.O.P Material Promotionally: will be delivered at fairs and difusion
locations of EKOLOGI. There will be 3 information spots: product and
slogan, EKOLOGI logo and contacts, social networks and EKOLOGI web
page. All the promotionals are created with recycled material, economic
and useful for the client. They are high quality and have an attractive
design; they generate interest and provide the clients identity towards
EKOLOGI.



20% discount: this is applied when 2 kg of compost are bought, the 5th kg
is free.
Green Clients: When the person decides to get an EKOLOGI’s product,
he can have free access to activities and courses that are developed by
the same company; this is a plus, because the client is aware of the
difference this makes regarding a more ecological life-style.
4.6 Distribution.
Two channels of distribution have been determined for EKOLOGI products:
 Direct marketing: The sales force will contact the industrial clients and
generate sales promotion in fairs and in tradeshows. It allows a better
communication and accessible prices. Its main disadvantage is the high cost
of control of sales and low penetration in the market.

Retail this channel helps EKOLOGI a lot, because it can be used to supply
the products to more complex market segments by three big box retail
outlets: Wal-Mart, Sam’s Club and Home Depot. These were chosen by the
target market. It will allow to generate a great sales volume, distribution and
growth in the company, as well as to ease up the sales process. Its main
disadvantage is the increase in prices for the end user and the product is
exposed directly to the competition.
5. Design and Development Plans.
5.1 Present State of Development and Pending Tasks.
EKOLOGI is a project that was design and created in January 2011. First, we
came up with the business idea in order to create and design a business plan,
company logos and the first pilot production. We actually marketed the first Biofertilizers EKOLOGI. We have conducted customer satisfaction surveys to prove
the effectiveness of the product. The results were excellent since the product went
beyond the clients expectations.
In may 2011, the company was registered in UNITEC’s business incubator in
campus Ecatepec, and after that, we registered the business plan in the
entrepreneurial contest of UNITEC in 2011 “give life to your idea” During the
contest we got good results from teachers, managers, as well as from people who
work for the secretariat of economy, coparmex and others that assessed the
project. In the final stage of the contest, the project was presented to the different
deans of Unitec campi as well as to directors, obtaining the first place and the
opportunity to participate in the James McGuire’s contest which is organized by
Laureate International Universities to take place in April, 2012.
In November 2011, EKOLOGI participated in the national Pymes week which is
held in the convention center of BANAMEX organized by the secretariat of
economy. It is the most important event in the country to strengthen the growth of
the small and medium enterprises. This event helped us get our second pilot test
of EKOLOGI in the first EKOLOGI’s production plant that was implemented within
UNITEC’s premises, as well as the production of the first EKOLOGI’s bio digesters
and marketing material. We were able to sell all the Bio-fertilizers EKOLOGI.
During the development of the PyME week, we were able to consolidate a contacts
data base which includes suppliers, distributors and prospects that represent an
excellent opportunity for the growth and the strength of the company.
Up to now, EKOLOGI continues with the ongoing business planning and pilot
operations. The team gets together for weekly meetings and it is being
consolidated as a comprehensive, sound, entrepreneurial work team, conformed
by 7 people. The planning for the beginning of courses and programs of
environmental action has been done as well, collaborating with International
Institutions like Rotary International through the Division Rotaract International, in
the planning of the programs of social-green action. These positions EKOLOGI as
a company committed to its environment through concrete actions.
EKOLOGI anticipates the growth and expansion, beginning with the Installation of
the second sustainable production plant in the Forest of Chapultepec. The
objective is to install 9 plants in the Valley of Mexico. We anticipate the legal
registration of EKOLOGI Mexico in April 2012. The paper work and the legal
registers have already begun through the website "Tuempresa.gob.mx" that eases
up the registers for Pymes. In the production area, the third formal production has
been considered for the beginning of its distribution in February of 2012.
5.2 Risks and Difficulties
EKOLOGI as a company in its initial stage, can be found exposed to various
situations that can affect its development.
Management of Wastes. AN IMPORTANT FACTOR IS RELATED TO THE MANAGEMENT
OF THE ORGANIC WASTES; TODAY IN SPITE OF BEING DUMPED IN THOUSANDS OF TONS
IN MEXICO AND WORLDWIDE , THE GOVERNMENT HAS JUST BEGUN WITH PLANS OF
MANAGEMENT OF THESE WASTES , EMPHASIZING THESE PLANS IN SANITARY FILLINGS ,
AS WELL AS IN THE RELATION COST - BENEFIT ON THE PART OF COMPANIES FROM THE
COLLECTING-W ASTES SECTOR. NOWADAYS, THIS IS ONE OF THE STRONGEST
SECTORS SINCE IT GENERATES PROFITS FROM THE MENTIONED WASTES . HOWEVER,
MOST OF THE PROFITS IN MEXICO ARE OBTAINED FROM THE INORGANIC WASTES , SINCE
A VERY FEW COMPANIES TAKE ADVANTAGE OF THE ECONOMIC POTENTIAL THEY COULD
GENERATE FROM THE ORGANIC WASTES .
Management and Company Development: AS
A COMPANY, THERE CAN BE
SHORTCOMINGS IN THE GROWTH AND DEVELOPMENT OF
EKOLOGI,
WHICH CAN
AFFECT THE OBJECTIVITY AND DECISION MAKING AS WELL AS THE PERFORMANCE OF
THE PROJECT ACTIVITIES. IN ORDER TO BE PREPARED FOR THIS , THE FOUR DIRECTORS
EKOLOGI HAVE ON LINE TRAINING THROUGH HARVARD BUSINESS PUBLISHING.
THIS IS A HARVARD MANAGE MENTOR TRAINING PROGRAM (E-TRAINING) TO INCREASE
THE PERSONNEL ADMINISTRATIVE SKILLS OF THE KEY MANAGERS OF EKOLOGI.
OF
Deficiency in Productive Operations: EKOLOGI requires the production of
technology to obtain the Bio-Fertilizers. If big amounts of product have to be
delivered to major clients, the lack of compliance with the delivery time or the loss
of raw material may represent a risk and may lead to lose these clients. This is not
good for the company, since it is in a consolidation stage and clients are very
important. In order to avoid the lack of product, each production is planned three
weeks in advance. This is 70% faster compared to traditional Biodigesters,
strength for EKOLOGI and an advantage for the client.
Legal registries: As a company, it is required to obtain the corresponding legal
registry, the lack of capital can represent a short term risk, because different clients
require of invoicing and to verify the conducted payments, which can represent a
limit since the lack of legal constitution generates distrust before clients. Today
EKOLOGI has initiated the legal process of registries and permissions on Line “Tu
empresa.gob.mx” website that accelerates the legal processes and facilitates these
proceedings for small and medium companies, and it is endorsed by the Secretary
of Economy.
Organization and Lack of Teamwork The lack of an Internal Organization, is
another problem EKOLOGI could face; the almost nonexistent Organizacional
structure, the lack of a correct systematization of its operations and activities,
constitute a risk any company that is not well-structured runs; where the job
profiles are not clear en there is no consistency at work. This is why in EKOLOGI;
teamwork is focused on the encouragement of three major operation principles:
motivation, ongoing communication and results. Each area of EKOLOGI is formed
by entrepreneurs according to the area, with experience in that field and with
values that identify an entrepreneur, such as the vision of growth, responsibility,
teamwork, leadership that lead EKOLOGI to a business success.
5.3 Improvement of the Product and New products
 EKOLOGI Bio-Fertilizers are the first in a series of environmental and
technological products to be introduced to the green market. As business
objectives, improvement and innovation of products and technology are the
principles that make the following tangible:
 As short and medium term objectives, we want to create a specialized area
for innovation and designing of new products To achieve this goal with each
new product that is introduced to the market, technical and market studies
will be conducted in order to ensure that each product meets environmental
requirements that are expected by the demand, and it is in line with market
needs. It is also expected to have a budget.
 In the production area, there is a specialist who is in charge of the Quality
Assurance. We have a quality program that meets the standards
established by the Secretariat of the Environment. This program is
applicable to both EKOLOGI processes and products.
 For the improvement and timely delivery of the product to the customer,
processes has been established through Gantt charts where timing is
controlled and subject to improve
 Now days, some adaptations are being made to the bio digesters, in order
to have an increase in the quality of the fertilizers. For example, the usage
of the methane gas as a source of energy.
Quality Assurance Program.
Quality Control.
EKOLOGI, among its objectives, seeks to provide increasingly higher quality,
which will improve the results of organic fertilizer and at the same time will offer a
product of higher quality that will meet the following parameters:
Quality in Suitable Time.
Currently there are several Bio digestion processes, which normally last three
months, limiting the productivity of a plant. Due to innovative technology, EKOLOGI
Bio digesters reduce the time of the process to three weeks.
Final Product Quality.
The final product is obtained in the process of bacterial Bio digestion called Biocompost or fertilizer. The soft material is dark brown or blackish and it is similar to
the leaf land or soil. When the compost is obtained, optimum conditions are
verified, such as texture, color and temperature.
Insects Control.
Waste like all organic matter attracts insects. If the production of the compost is
controlled, there is no insect development in any of its stages. To prevent the
development and presence of insects, it is necessary to immediately start
composting as soon as the waste enters the plant:
5.4.
Concept
Partial
Additional Equipment
$2,500
Improvements to the Premises
$2,500
Decoration and Remodeling
Salaries
$2,000
Machines
$30,000
Tools
$25,000
Machinery Spare parts
$16,660
Computers
14,000
Printers
9,000
Others (projector and screen)
11,000
Furniture
$55,000
Office Equipment
$3,000
Cost of Installation
$5,000
Cash
$10,000
Van Down payment
$150,000
Spare parts
$2,000
Raw material
$12,090
Land line contract
$2,500
Electricity contract
$2,500
Water and Sewage Contract
$2,500
Deposit of Rent (1 month)
$4,000
Professional Fees
$500
Licenses, Permits and Patents
$12,000
Public notary
$500
Public Registry of the Property
$500
Advertising
$7,000.00
Promotion:
$18,000.00
Total
$399,750
5.5 Intellectual property
Today in the entrepreneurial competitive context and in the environmental business
competitiveness that is being developed, it is necessary for us to have intellectual
property records to ensure the picture property, technology and EKOLOGI patents.
As a first step, we will do all the paper work before the Mexican Institute of
Intellectual Property IMPI, which is responsible for managing and protecting
intellectual property rights of various items such as patents, trademarks,
advertisements, trade names, certificate of invention, appellations of origin,
consultation documents, bibliographic data of patents, utility models and industrial
designs and layout designs of integrated circuits.
Each item has to be registers. EKOLOGI will register the following elements:

Name of the Company: EKOLOGI Mexico

Advertising Slogan Registry: Technology, Innovation Sustainability

Registry of the Industrial design of Sustainable Plant and patents of the
modifications made to the technology used for the generation of BioFertilizers.

Registry of products brands, as well as of the design of each prototype of
Packing.

Document registry of Business plans that assure the Intellectual property
EKOLOGI.
Once the registration document is delivered, the IMPI conducts a search and study
of similarities with other slogans, concepts, logos and so on. In order to ensure that
the record is unique, and thus able to obtain rights to the prototype design, slogan
Logo or implemented idea.
A signature to ensure privacy and confidentiality of the project property is required
before giving presentations of the project or before participating in tradeshows.
6. Plan of Operations and Production.
6.1 Operating Cycle.
The operating cycle to obtain the Bio-Fertilizer is integrated by six main phases: 1.
- Construction of Machinery and Biodigesters EKOLOGI, 2. - Process of
Biodigestion, The most important phases of the process, there is a section to detail
the phase of quality assurance.
1- Construction of Machinery and Biodigesters EKOLOGI.
To obtain the Bio-Fertilizers, the process begins with the assembly and creation of
the Biodigestion technology (Biodigesters). This device has to have the following
features. (A picture is shown below):

Main lid: Main entrance where the raw material for the Bio-Fertilizer is
introduced.

Secondary PVC Lid: Entrance of the Aerator Device, level of Bio-Fertilizer
oxigenization.

Removal Slot: It releases the final Content of the Biodigester.

Main Container: It is where the process of Biodigestion is carried out, by
means of the system of Dynamic Biodigestion.

Oxygen Holes:
Holes that allow oxygenazation to perform Aerobic
Biodigestion Process.
Each Biodigester EKOLOGI has a one square meter area. This eases up its
transportation and implementation in places where efficient solutions are needed
and where there are potential market sectors.
An additional device, is used in the process of Biodigestión, it is called aerator,
which purpose is to control the aeration factor and the level of oxygen in the BioFertilizer. Thanks to this system it is possible to accelerate the Biodigestion
process, from 3.5 months to only 3 weeks, 70% less time of production, compared
to conventional processes of Biodigestion. This thanks to that the presence of
greater level of oxygen in the Biodigestion, allows that the more oxygen there is,
the greater amount of aerobic organisms to perform a faster Biodigestion,
degrading the raw material, at greater speed.
The aerator device has wings that allow penetrating easily in the organic matter in
degradation, allowing maintaining an ideal balance between humidity, ventilation
and obtaining a greater oxygen presence.
In the initial stage of EKOLOGI, the aerators will be used for the control of
oxygen. Nevertheless, the development of automated Biodigesters has been
projected making the Biodigestion process more effective.
DIAGRAM
OF
OF A LINE
AUTOMATED
BIODIGESTERS
In this diagram a
line of biodigestores
is observed, which
will work without the
use of the aerator
since the control of
oxygenation would
take place
automatically,
making this process
more efficient.
2-Biodigestion Process.
The Biodigestion process is a method by which a Bio-Fertilizer is obtained; the
organic wastes are placed in a stratification of thin layers, introducing the organic
wastes, the soil and the manure in proportions of 1/3 per each type of raw material
into the Biodigester.
When the Biodigesters reaches its maximum level of content, mixing begins until
getting a homogeneous mix; at the same time the content has to be moistened in
case it is dry for ideal conditions. The level of humidity is one of the most important
parameters in the quality of the Bio-Fertilizer.
Later, the Biodigesters sealing is carried out, this is the moment when the
Biodigestion begins. Once the raw material is already in the process of
Biodigestion, the microorganisms metabolism needs free oxygen for its
subsistence and development, that is why the content of the Biodigestor is mixed
every 24 Hours through the aerator, eliminating lumps and moving the content to
obtain an excellent level of oxygenation and an effective Biodigestion. . Likewise,
the content will begin to increase the temperature to reach temperatures between
60 and 70 ° C in the center, due to the processes of molecules breaking and
catalytic reactions.
The high temperature indicates good Biodigestion, and should be monitored to
remain constant. The temperature increase depends on the type of Biodigestion
that took place in the plant EKOLOGI process; bio digesters allow temperature to
control for the proper development of the processes.
The process finishes, when the temperature has been stabilized and the material is
at room temperature. In this moment, the Bio-Fertilizer shows some characteristics
such as dark brown color, soil like scent, and it is easy to observe that the three
types of raw material are totally degraded, turning into a Bio-Fertilizer.
The potential of this process is extremely great, because apart from allowing the
production of our main product, the Bio-Fertilizer, it has the capacity to offer
EKOLOGI and other companies, a more sustainable operation since the
Biodigestion also produces Biogas, which can be used in substitution of petroleum,
as fuel for automobiles, power plants, and radically obtaining a decrease in the
cost of energy supplies, and taking the world to a sustainable revolution.
EKOLOGI has considered within their program of sustainable operation, to take
advantage of the Biogas potential, as a new sustainable product in the future.
3- Operation of Sustainable Plant.
The production plant EKOLOGI includes the Biodigestion process, described
above and will work under the following model:
1. Waste reception.
The process starts in the Plant facility with a control of the received waste which is
based on the sustainability system. The trucks dump fresh waste in the reception
sites, where the primary physical treatment starts.
2. Physical Treatment.
It consists of three operations: screening, separation and grinding-homogenization.
Screening removes large wastes, which may damage the operation of the
equipment.
Once the organic materials have been separated correctly, they are passed to the
crushing and homogenization equipment, which is usually done by special mills.
The process described above is performed when the mixed waste, organic and
inorganic material, is received. Nowadays, due to the separation of wastes
programs and programs implemented by EKOLOGI, the waste will be received
already separated so it can be used in the Biodigestion process as soon as it is
received in the plant.
3 Biodigestion Process (Described).
It begins inside the Biodigesters with a 70% reduction in time of operation, from 3.5
months to 3 weeks, compared to conventional processes. The Biodigestores work
without gas, electricity or fuels, turning the production into a sustainable process.
4. Quality Assurance and Packing.
Once the process of Biodigestion has finished, the content of the biodigesters is
poured in the revision site for quality inspection. Four fundamental parameters are
measured; they are level of humidity, level of homogenization of the Bio-Fertilizer,
and Carbon and Nitrogen presence. After their revision, they are packed in
hermetic sealing bags; this assures the quality and non-contamination of the
product at this point and when the client opens the bag and re-seals it. Expandable
materials are used to assure the resistance of the product in the packaging and
distribution. Hybrid packaging made of recycled paper and plastic are used.
5. – Distribution.
The distribution Biofertilizers pass through the 3 main distribution channels for
agricultural market sector in agricultural areas are distributed through larger
packaging capacity of 40kg each, based on the needs of customers greater
consumption.
6.2 Geographic location, Facilities and Improvements.
Talking about a production facility, many times it may sound as a symbol of
"pollution", "garbage," technological progress and growth However, this is not true,
because we are a symbol of sustainability, and we provide a bio technological
growth to the country.
EKOLOGI production facilities operate in a sustainable way, and because
Biodigestores Devices do not require electricity, fuel and maintenance for at least
25 years, you can set up a production facility almost "anywhere", the place does
not influence in the effectiveness. We have the opportunity to create one of the first
sustainable productive-industrial systems and easy to settle anywhere. This is why
EKOLOGI has an expected expansion into 9 production facilities in the Federal
District and in the State of Mexico, to satisfy the growing demand in key strategic
locations within the State of Mexico.
The first sustainable production plant is currently located in Unitec Campus
Ecatepec premises. This is one of the most productive centers and also one of the
most populated municipalities where the first productions of Bio-fertilizers are
carried out.
As mentioned before, thanks to the active participation of EKOLOGI by EKOLOGI’s
Foundation, we have begun the plan to install the 2nd production facility in the
Bosque de Chapultepec. This forest generates thousands of kilograms of waste,
including the one that comes from restaurants, visitors, the cut down of trees and
the pruning of gardens, which represents a big problem because garbage lands do
not accept this waste. This is a big opportunity for an EKOLOGI production facility,
which will reduce the organic waste.
100%, and improve the responsible image towards the environment of
Chapultepec’s forest. EKOLOGI ensures the raw material for Bio-.fertilizer
production. This is a benefit for the place where an EKOLOGI plant is installed; the
waste problem is eliminated, giving in return a sustainable plant for the sake of the
country's growth in terms of sustainability, turning Mexico into a green country.
Nowadays the UNITEC Business Incubator provides a space for projects in
incubation and their development since there are offices and infrastructure to start
up operations. This is a major advantage while EKOLOGI can be consolidated.
6.3 Strategy and Plans.
1º Production Plant.
It is located in the Municipality of Ecatepec within the UNITEC premises. This fact
allows the beginning of operations, the construction of Biodigesters devices and
the adequacy of processes to obtain better quality. There have been two pilot
productions in this plant. It has an installed capacity of 1,200 units per month,
which can be expanded to 28,000 units per month.
Suppliers.
We already have an agenda of the different addresses of the raw material
suppliers for the construction of the bio-digesters and the processes of bio
digestion since pilot production number one. We also have agendas of printing
agencies in order to accelerate the marketing and advertising processes, planning
the strategy, generating the designs and getting in touch with the suppliers as well
as getting the best negotiation in terms of costs.
Available offices and facilities.
The business incubator program backs us up in terms of offering offices,
computers, and means of communication, internet and resources to initiate
operations. We are able to hold meetings, come up with action plans for every
single process. We also receive training in legal, administrative, planning and
marketing topics, given by experts in the field.
Expansion to 9 plants of sustainable production.
Due to the social activity of EKOLOGI, through the EKOLOGI foundation, there
have been open doors to collaborate with international and also important
institutions, such as.
Bosque de Chapultepec Management, Rotary International. In sustainable
programs which contribute to the improvement of the environment, especially
where the plant is located and its surroundings as well. It is considered the
expansion to nine sustainable plants that allow an improvement of the environment
as well as the parallel growth of EKOLOGI.
Beginning of distribution and commercialization.
With EKOLOGI participation in various national important events including the
National pymes Week 2011, some contacts have been made with independent
distributors, the agricultural market and with large national retailers such as Home-
Depot. We got in touch with these institutions in order to distribute directly to stores
to position the product at a national level, and provide bio-fertilizers, to large
agricultural producers, consolidating EKOLOGI sector, and providing the
opportunity to export to countries with large agricultural and environmental
demands.
6.4 Regulatory and Legal aspects.
In diverse governmental instances, it is necessary to obtain diverse licenses,
regulatory permissions, regulations that are described next:
For the product.
An agency will verify that everything is in order and that EKOLOGI is in compliance
with the norms and regulations. We also will intend to comply with the quality
standards of ISO-9000, and others like: NOM-083-SEMAR-03-20-OCT-04 Solid
Waste Disposal, NMX-AA-015-1985 quartering method.
Legislation and Federal Labor Law.
The firm is going to be incorporated as a Micro industrial limited liability company,
which will be regulated by the general law of trading companies and by the federal
law in order to encourage the micro industry and other areas.
We chose this way of business incorporation because the share holders are only
liable to their own contributions to the firm, the management is held by one or more
managers that could be partners or people who don’t belong to the company and
due to all this, it is possible to have a division of labor by work fields, and each
work field will have a boss who will be a partner, the minimum number of partners
is 2 and our company holds 7 which means that it is the best adapted company.
Various permits will be held by the help of a notary public, who will perform the
initiation and consolidation of the necessary arrangements in the Government and
in the Secretariat of Finances in which we comply with the tax provisions as
income tax law, the asset tax law and its regulations, VAT law, as well as we will
comply with the annual tax return in which EKOLOGI will report income and
expenses of the fiscal year. Additionally, there are other general safety and
hygiene laws that hold a variety of obligations on employers, in order to emphasize
the health, safety and a proper environment in the workplace.
EKOLOGI will begin operations with the implementation of the provisions of federal
labor law, it will also comply with the days that the employees need to rest at
home, vacations for workers, overtime payment, as well as compliance with the
provisions arising from this law.
7. - General Plan
7.1 Organization
EKOLOGI will be constituted based on the present organization chart. It is a
comprehensive team, formed by competitive people and suitable within their area
of operation.
 General Director in the fullfilment of objectives, goals development,
competitiveness that makes EKOLOGI a strong company. He will have
three key directors.
 “Director of Finances and Human Force”, who will develop sound finances,
and economic sustainability of the project. This director will work altogether
with a “Coordinator of Professional Development”, in charge of offering the
EKOLOGI team, qualification and leadership programs as well as
developing programs in order to make the company more efficient and
competitive.
 “Director of Production”, will carry out the effective development of the
production plant. He will work together with a “Coordinator of Raw Material
and Quality Assurance”, to make the production more effective, when
providing supplies on time and form. He will also collaborate with a
“Coordinator of Production and Environmental Technology”, who will
organize and make the production plant work as well as be involved in the
improvement of products and adjustment of the product to new clients.
There will be three operators in the production plant, who will construct the
biodigesters, and develope the process of dynamic aeration and
Biodigestion. Finally they will carry out the packaging and distribution of
the Eko-Fertilizers.
 “Director of Marketing research”, who will develope and execute the
diffusion strategies, marketing, and positioning of the Eko-fertilizing, by
phisical and electronic means. He will altogether work with a Coordinator
of Communication and Multimedia Design, that will elaborate the design of
digital means of diffusion and forms and will execute the strategies in
social networks and mass media.
7.2 Key Managers in the Administration.
Ekologi, is a company, in which each member of the organization, must fulfill
three initial conditions: pro activity in order to face complex situation, resolution of
problems based on the growth of EKOLOGI and the society; leadership is
fundamental since we are the entrepreneurs who have and will have the
responsibility to guide the economic, social and labor path of Mexico. It is also
fundamental that in their role of leaders, they take the company and the team to a
major level of responsibility to confront the new ways, borders and challenges of
the following years. Finally, the level of experience and values that each member
has is substantial, because from it derives the knowledge and experience applied
to EKOLOGI to strengthen the team and the growth and innovation of EKOLOGI,
opening new marketing horizons, being involved in the technological growth of
the country and the competitiveness and strength of EKOLOGI. The three
elements are conjugated to carry out a professional, human and social
development.
The positions that will carry out the most important management activity are the
following: General Director, as leader and creator of conditions, he makes things
happen, leading the company towards sustainability. The Director of Marketing,
fundamental in the creation of strategies and actions directed to the green
market, agricultural market and new markets. He directs and works altogether
with the Design and Communication area; The Director of Production is
fundamental, since he is in charge of the coordination’s of production and quality
assurance as well as the operating processes of the production plant. The
production on time and in form depends on him as well as the operation of the
plant. Finally the Human Factor and Financing Director who must be a person
committed to the economic and financial growth of EKOLOGI. He is responsible
for the professional development of the team. The analysis of economic factors
being feasible and convenient for the company, depend on him. He is also
responsible for adapting the economic and external conditions to a growth.
The profile of the people who will direct EKOLOGI, as well as the mission of the
corresponding position, the aptitudes and abilities that are looked for as leaders.
Position Profile Description
Position: GENERAL DIRECTOR.
GENERAL DESCRIPTION
MISSION
To Supervise and organize under the principle of leadership, growth, vision and
EKOLOGI expansion, making smart choices that lead to EKOLOGI position as a leading
national company in the sector, carrying an effective communication between areas of
the Company, encouraging EKOLOGI Community leadership, to the company and to the
Communities under Social Responsibility
Position Description and Features
 To develop the work plan for next year, setting objectives and goals to achieve
short, medium and long term goals
 To convene Meetings and report to the Board and Members of the Company's
current situation
 To take prompt and intelligent decisions based on an analysis that helps to
coordinate and update the different areas
 To implement strategies of communication, motivation and leadership.
 To be up-to-date in the news about the competition and of new technological
forms, to develop action plans.
 To create intelligent, dynamic, creative and profitable a company.
 To achieve competitive advantage for the company, same should be reflected in
higher financial remuneration necessary to remain a leader in its field
 To be responsible for the area or areas, in terms of not being supervised by a
Director
 Establishment of agreements and strategic alliances with other companies, and
institutions that promote growth and fulfillment of the objectives of EKOLOGI.
 Building leadership and motivation programs for the community EKOLOGI.
SKILLS AND QUALIFICATIONS
Bachelors In Business Administration. Industrial Engineering Bachelors in International
Business or related field
Person with principles and ethics, with responsibility for business-critical information of the
company.
Attitude and leadership skills, motivation and communication, entrepreneurship, character
and ability to make decisions in stressful situations
Comprehensive skills and abilities in the areas of the Company, with extensive knowledge
of each functional area.
Position: Production Director.
GENERAL DESCRIPTION
MISSION
We direct, coordinate and handle all production processes in order to achieve quality,
efficiency, and constant innovation in products and processes to perform and make a profit
to the Company
Position Description and Features
 To Organize and manage the production, planning, control and monitoring production
processes EKOLOGI.
 To be responsible for the smooth running of the plant and the effectiveness and
efficiency of processes and innovations and their dependents
 He creates and evaluates ideas or proposals in the production process and new
products.
 •To implement new studies based on the expansion and EKOLOGI Infrastructure
 To perform feasibility studies for new products, processes and innovations.
 To create and organize training programs for new technologies and processes
related to EKOLOGI
SKILLS AND QUALIFICATIONS
Compatible major: Industrial and Systems Engineering Mechatronics Engineering
Environmental, Engineering Biotechnology Engineering. Minimum 1 year experience in the
industry or similar. Availability and Flexibility of Schedules
The production manager must have a management and financial profile, and a
comprehensive knowledge of all areas of EKOLOGI; This includes the ability to hire
personnel, materials, services, communications, labor relations, permits, reservations,
schedules, insurance and general management and administration of such operations
reliably and securely.
Leadership skills, ability to work under pressure, Extensive analytical and problem solving.
Position: Marketing Director.
GENERAL DESCRIPTION
MISSION.
To plan and implement development strategies and the distribution of goods, in order to
perform and make a profit to the Company.
Position Description and Features.




To lead the process of distribution and dissemination of the Goods and programs
generated by the company and at the same time plan and implement strategies
to comply with the above.
Planning of distribution channels, logistics and sales.
To identify market opportunities to achieve benefits in the areas related to the
product, price, distribution, promotion and business relationships.
He collects and analyzes information domestically, internationally,
governmentally and from other segments. He studies and plans stages of
distribution, marketing and sale of products.
To understand the level of customer satisfaction related to the product and
service of Marketing research the rise of surveys to consumers and retailers
implemented the direct and deep interview to them and the consultation to
experts. Esos métodos también los emplea para identificar las necesidades de
los consumidores y captar quejas y sugerencias. To perform and implement
studies to let you know with more detail the characteristics and expectations of
consumers to design products and services focused on them.
ACADEMIC REQUIREMENTS, ATITTUDES AND SKILLS.
Related Careers: Bachelor in Marketing, Market Research Accountant, Bachelor in
Communication Sciences, Engineering Sales, minimum 1 year experience in the industry or
similar. Availability Schedule Flexibility The Marketing Director must possess skills such as
creativity, leadership, adaptability to change, with words, decision making, teamwork,
analysis and synthesis of information, and overview of the market, as well as a second
language management.
POSITION PROFILE DESCRIPTION: CFO AND CHRO.
GENERAL DESCRIPTION.
MISION.
To organize and manage processes and activities related to performance, training, and control of
any member of EKOLOGI, as well as search and development of Human Capital Talent, same
state Financial Planning Company, and the search for the best road to solvency, liquidity and
growth in the economy of the Company.
Position Description and Features.
•Recruitment of staff according to the required profile.
•To create and promote a healthy living from the company to create programs for living, leisure
and closer relations among EKOLOGI member.
•To coordinate the legal benefits of workers, as well as monitoring attendance and punctuality.
•to perform the payroll of the members of EKOLOGI.
•To develop and publicize regulations.
•To evaluate the performance of workers, as well as the granting of awards or promotions while
maintaining communication across departments.
• He is responsible for planning, registration and financial reporting.
• Maintenance and improvement of the quality of financial procedures and protocols in the
company.
• Responsible and catalyst of new financial activities to be carried out.
The CFO should implement good and pioneering strategies to ensure an efficient use of financial
resources of the company to take advantage of them.
• Supervision of management control: definition of procedures, design of budget processes.
ACADEMIC REQUIREMENTS, ATITTUDES AND SKILLS.
RELATED CAREERS: Accounting, finances, economy, minimum 1 year experience in the
industry or similar. Schedule flexibility availability professional principles and ethics, creative, and
responsive, and visionary leader, with analytical capacity.
7. 3 Remuneration to management and owners.
Pay rolling.
Initially the payroll is established based on the responsibilities of each position, as
well as on other factors that are cover other physical and mental activities,
condition of work as well as the experience and added value, we also consider
bonuses to people how have generated important changes in the productivity and
the achievement of the company’s goals, however, the wages shown in the next
chart are related to the initial wages, because based on the trends of EKOLOGI’s
growth, the wages will have an increasing trend of growth of the 5% in the first
year.
We also consider the special and additional projects that the person makes, then,
these are considered additional ones to his wage, finally, as a cooperation and a
team work strategy, we give training and professional development programs to all
the employees of EKOLOGI in order to follow the growth and development goals
for the for the team.
The company will have to pay taxes, social security, it’ll also give credits for
employees to buy a house and earnings to each employee in accordance with the
Federal Labor law, and the company will pay employees holidays and overtime
work. It is important that the company complies with the law properly applicable to
the Mexican Social Security Institute (IMSS), and Institute of the National Housing
Fund for Workers (INFONAVIT), and the National System of Retirement Savings
(CONSAR), as well as other provisions provided by the Federal Labor Law.
Additionally, there is another general safety and hygiene rules of a variety of
obligations on employers, in order to emphasize safety, environmental hygiene and
an appropriate environment in the workplace.
Talking about contracts, we have the work collective contract and the individual
contracts that will be performed with each employee.
7.4 Policies of investors and shareholders; duties and rights.
EKOLOGI is going to be constituted as a Micro Industrial limited liability company
and because of that we give the next policies related to the general law of trading
companies.
Article 61: No limited liability company shall have more than 50 partners.
Article 62: the owner’s equity will establish the contract; it is going to be divided
into non marketable securities which could have the same value or same
categories. This is the most adequate way of corporation for companies in their first
phase, it allows the reduction of tax payment and in their law articles, it is said that
other partners can join in order to increase the investment in the company.
7.5 Employment policy and other related agreements.
EKOLOGI, in its growing stage, is looking for the best talent in every area,
developing trained people who not only is seeking for an employment but goes
beyond, i.e. people who want to grow along with the company. That is why
EKOLOGI offers job positions in the most varied way, internally (within current
employees) or externally (within the labour market in general) the following
guidelines are to be applied:
• We will assume our obligations according to the stipulated by the pertinent laws
based on a policy of equal opportunities within the company.
•Ekologi will reserve the right to cover a position without having it announced
previously whenever it considers that an employee fulfills the requirements for the
vacant position and, at the same time, to have demonstrated the qualities,
experience and aptitudes required for that position.
• The company also reserves the right to offer positions to certain employees in a
department or functional area, offering both professional growth and equal
conditions to be able to obtain the appointment.
During the search of new members of EKOLOGI team, the process of selection
and hiring will not begin until the need of the vacancy is assessed based on the
strategic targets of the department and if the budget has been approved; the
following methods of selection will be followed.
• Centers of personnel evaluation: They will be used mainly to choose the
directive positions, supervision and professional or expert personnel. The
evaluation center will perform a great variety of aptitude tests, a test of
personality, communications drills, presentation, teamwork and leadership, as
well as a formal interview with the candidate altogether with the directive team of
EKOLOGI.
• Tests: For the manual positions, administrative and directive, the suitable tests
will be made. These will consist of personality and aptitude and ability tests. In the
cases that tests are performed, the candidates must also pass a formal interview
conducted by the directive team of EKOLOGI.
• Interviews: In some cases the selection can be only made based on the
interview. There can be more than one interview. Whenever it is possible, the
interview will be performed by people of different sex and religion. The interviews
will be conducted by, at least, two people: The General Director or from the
corresponding Area and the Human Factor Director One second interview will be
made if it were necessary.
Appointment:
Once the tests are performed and the corresponding interviews conducted, the
Director of Human Resources, and corresponding director will choose a candidate
within the five later workable days. In order to provide the new member of the
organization a greater integration and success, he will go through a period of test
and formation during the thirteen first weeks in the position and close to the team;
he will receive the programs of professional development and as much actual
qualification as on line, managed by the Coordination of professional Development
of EKOLOGI.
7.6 Counseling and Professional Services Team.
EKOLOGI will hire external professional services through Outsourcing in order to
carry out the initial tests for the certification of the Bio-Fertilizers, as well as for
certain market research and advertisement campaigns and /or some other
professional service to reduce or control the cost of operation. It was found in a
study conducted by the Outsourcing Institute, that companies reduced costs in
90% by means of external services or consultancy.
The parameters to consider in an external professional service will be:







Identify the function that the contracted company is going to do. If it is of
vital for the company, if it is what distinguishes it or it is not.
To handle the difficult functions or situations out of control of our
organization, more easily.
To consider the time and volume of the contracted operation.
The confidentiality of the contracted operation
The time that the external company will take to implement the operation in
order to guarantee the quality and time for the clients.
To establish the operation reports, both the content and the frequency in
order to give feedback in the quality and effectiveness of the results
obtained by means of these external services.
The degree of experience, professionalism and quality of this company.
8. Project Schedule.
The execution of the Project starts with a work plan, in which the goals and the
strategies are established, and with the help of these, we will have a growth in the
second sustainable production facility , and for obtaining that, we give
responsibilities to the work team. From this point, the legal registrations will be
started and the execution of the production operation plan will also be started,
which has the processes of the bio digestion and the settlement in the operation
center as well as in the production facility, as well as the inspection of the quality
and the packaging and the marketing plan that has the strategies of promotion
physically, like the one that is performed by the social networks, electronic media
and web pages, this is related to the logistic plan in which a set of delivery dates
are established to deliver products to big box retail out lets and products to self
service stores as well as directed products to whole sale clients of the agricultural
sector; in order to have a functional cycle, we make an inspection over the times
and results of the operation cycles.
9. Miscellaneous.
EKOLOGI mainly faces the risk that the competitors develop similar technology to
generate the compost in a very short period of time, which is going to turn the
advantage of the company into an opportunity for the competitors that are
considered new ventures. We also hold the risk of an increase of the EKOLOGI’s
production costs; this is due to the likely.
Volatility in prices that the soil will have as main raw material of the compost, as
well as there is the probability that the exporting costs have changes.
When the business is executed, there is a problem of imitation of the business
model by the competitors, and because of this, EKOLOGI is making different
production and trading strategies that meet the needs at the time that these appear
in the market.
EKOLOGI’s growth is based on the need for the industries to naturally fertilize their
farmland without creating long-term damage on the ground, and for the growing
consumer that tends to acquire natural products and improve the environment in
cities and community green spaces.
10. Financial plan.
10.1 Present and projected state of losses and profits.
Total of Sales
Year
Cost of Sales
Total of
Expenses
Net utility
(after taxes)
2012
$1,167,795
$191,882
$747,399
$148,534
2013
$1,477,436
$238,567
$738,574
$325,192
2014
$1,943,442
$292,742
$735,331
$594,990
2015
$2,445,763
$348,835
$729,591
$ 912,421
2016
$2,997,840
$407,337
$793,926
$1,167,795
In this table of Income statement, it is possible to observe very important aspects,
pointed out as follows:

The volume of sales in a five year period increases at an average rate of 26
% annually, a maintained and moderate growth as a result of the efforts of
marketing research and sales, when placing the products in the retail
distribution channel and maintaining and increasing the portfolio of industrial
clients.

The cost of sales for the first two years has an increase average of 25%
annually, but from the third and fourth year, it decreases to 19% and 16%
respectively. In this way, the increase in volume of the sales appears which
improves the efficiency of the production resources.

The expenses throughout the period stays relatively stable, as a result of the
use of the financial resources, which is intended to simplify the
administrative processes as well as the monthly fixed expenses. The
objective is to maximize the profits.

Finally, the increase in the utility is of 18% in the second year, 82% for the
third year, as a result of the increase in volume of sales and decrease of
expenses, 53% for the fourth year, and 27% for the fifth. The objective is to
show the profitability of the project, it does generate profits throughout a
period of time.
10.2 Present and projected general balance sheet
Year
Working
capital
Fixed
assets
Deferred
assets
Total of
Assets
Total of
Liabilitie
s (Long
Term)
Total of
Capital
Capital
total
Passive
and
Total of
Capital
Capital
total
Passive
and
Year
Working
capital
Fixed
assets
Deferred
assets
Total of
Assets
Total of
Liabilitie
s (Long
Term)
2012
$274,013
$149,693
$57,000
$480,706
$270,312
$210,394
$480,706
2013
$550,593
$130,727
$57,000
$738,320
$202,734
$535,586
$738,320
2014
$1,096,9
72
$111,760
$57,000
$1,265,7
32
$135,156
$1,130,5
76
$1,265,7
32
2015
$1,960,78
1
$92,793
$57,000
$2,110,57
5
$67,578
$
$2,110,57
2,042,997
5
2016
$3,147,5
23
$73,827
$57,000
$3,278,3
50
$0.00
$3,278,3
50
$3,278,3
50
Per each $1,00 of investment in the Total Assets:

$0.57 corresponds to boxes, banks and receivables for 2012 and $0.96
projected for 2015; this way, most of the assets of the company are liquid.

$0.31 corresponds to the fixed assets of the company for 2012 and $0, 03
projected for 2015.

$0.12 correspond to incorporation expenses for 2012 and $0.01 projected
for 2015.
The origin of the investment of Assets has been per each $1.00:

$0.56 has been contributed by long term creditors in 2012 and $0.00
projected for 2015, releasing the payment of the credit in the long term.

$0.44 has been contributed by the company for 2012 and $1, 00 projected
for 2015.
10.3 Projected Cash Flow
Year
Cash at the
beginning
of the year
Cash +
Income
Total of Cash
Expenditures
Cash at
the end of
the year
Generated
real cash
flow
2012
$ 227,646
$ 1,528,372
$ 1,457,622
$ 70,750
$ 60,750
2013
$ 70,750
$ 1,466,631
$ 1,200,855
$ 336,526
$ 265,775
2014
$ 336,526
$ 1,927,796
$ 1,397,064
$ 867,258
$ 530,732
2015
$ 867,258
$ 2,428,858
$ 1,581,953
$ 1,714,163
$ 846,905
2016
$ 1,714,163
$ 2,979,252
$ 1,811,098
$ 2,882,317
$ 1,168,154
The increase in the cash flow is very accelerated, because in the second year
337% of increase is achieved, 99% for the third year, 59% for the fourth and 37%
for the fifth year. Thus the liquidity of the project is demonstrated.
10.4 Equilibrium Point Graph
The Equilibrium point will be reached in 26 months (approximately).
10.5 Gross and Operative margin, Potential Profits and Durability.
Operative
Total of
margin
Expenses
(MB Expenses)
Potential
Profits
$747,399
$228,514
$148,534
2013 $1,477,436 $238,567 $1,238,869
$738,574
$500,295
$325,192
2014 $1,943,442 $292,742 $1,650,700
$735,331
$915,369
$594,990
2015 $2,445,763 $348,835 $2,096,928
$729,591
$1,367,337
$ 912,421
2016 $2,997,840 $407,337 $2,590,503
$793,926
$1,796,577 $1,167,795
Total of
Sales
Year
Cost of
Sales
2012 $1,167,795 $191,882
Gross
margin
(Sales Cost)
$975,913

Since the cost of sales represents in average 15% of the total sales, the
gross margins that are obtained for the 5 year period projected increase at
an average rate of 27% annually.

Since the production strategy focuses on maintaining the operation
expenses at the minimum, they are reduced from 76% in the first year to
59%, 44%, 34% and 30% in the following four years, providing an attractive
operative margin for every period.

Finally, the durability of the company is reflected in the projected potential
profits, 18% in the second year, 82% in the third, 53% in the fourth, and
27% in the fifth year.
Fixed, Variable and Semivariable Costs
Table of Variable Costs per unit at retail
Concept
Amount
$
Soil
,333 kg
$0.40
Manure
,333 kg
$0.66
Organic wastes
,333 kg
$0.00
Labeling + Packing
1
$4.50
Total
$5.56
Table of Variable Costs per unit at wholesale
Concept
Amount
$
Soil
13, 32 kg.
$16.00
Manure
13, 32 kg.
$26.40
Organic wastes
13, 32 kg.
$0.00
1
$2.00
Labeling + Packing
Total
$44.40
Table of Fixed Costs per unit
Concept
Fixed cost Retail
Fixed cost Wholesale
$
$10.44
$ 405.60
10.8 Period of time to reach the equilibrium point:
The equilibrium point is reached in 26 months (approximately); the balance of the
initial investment with the generated net profits is reached. In conclusion, the
recovery is obtained thanks to positive cash flow that is in a constant and
significant increase.
10.9 Period of time to reach a positive cash flow.
A positive cash flow is reached from the second month of operations in 2012, as a
result of sales that surpass the considered expenses.
11. Business proposition.
11.1 Financing.
It is required a financing of $400,000 to develop the project. The interest rate
considered for the payment of the credit is of 4, 8%, Total Annual Cost (CAT) of 57,
6%, in a 60 month term (three years).
The fixed monthly payment (to the capital and interest) is of $5,631.50.
The participation of external investors is not planned since the capacity of payment
of the project, supports the payment of a bank credit. Therefore, it has been
decided to use a bank financing.
This option of credit is provided by a Financial Society of Limited Object, HYR
PYME that has the lower interest rate in the market, focused on agro-industrial
projects.
11.2 Capitalization and Use of the funds.
Concept
Partial
Additional Equipment
$2,500
Improvements to the Premises
$2,500
Decoration and Remodeling
Salaries
$2,000
Machines
$30,000
Tools
$25,000
Machinery Spare parts
$16,660
Computers
14,000
Printers
9,000
Others (projector and screen)
11,000
Furniture
$55,000
Office Equipment
$3,000
Cost of Installation
$5,000
Cash
$10,000
Van Down payment
$150,000
Spare parts
$2,000
Raw material
$12,090
Land line contract
$2,500
Electricity contract
$2,500
Water and Sewage Contract
$2,500
Deposit of Rent (1 month)
$4,000
Professional Fees
$500
Licenses, Permits and Patents
$12,000
Public notary
$500
Public Registry of the Property
$500
Advertising
$7,000.00
Promotion:
$18,000.00
Total
$399,750
Return on the investment.
Internal rate of Return
Net Present value
Payback
85.21%
$2, 235,133
2 years 2 months
The VPN is the perfect indicator that allows us to identify the viability of an
investment project by calculating the present value of the projected cash flow in the
future; in Ekologi the positive result of $2.235.133, is the figure in 5 years that the
company would generate after recovering its initial investment; this allows us to
identify the sustainability of the project, because it foretells an increase in its
development as well as an increase in the employment sources, which will bring,
as consequence, an increase in the enterprise and professional development in the
State of Mexico to be expanded to other states of Mexico.
Another form to calculate the same is to watch the Internal Rate on Return (TIR)
that would be the type of interest in which the VPN becomes zero. If the TIR is
high, we are before a profitable enterprise project that supposes a return on the
investment comparable to high types of interest which cannot be possibly found in
the market. Nevertheless, if the TIR is low, we could find another destination for
our money. In the case of our project, we reached a TIR of 85.21%, a very effective
rate, compared to other options in the market, which is translated in a return on
investment in 2 years 2 months.
Also, there are two financial reasons that reinforce the economic and financial
potential of the project:
Index of Profitability.
Net Profit/ Shareholders' Equity
2012
$148.534/$210.394 =
0, 70
2015
$1.167.775/$210.394
=
5, 55
In 2012, per each $1, 00 invested in the company, $0, 70 of profit will be received
whereas in 2015, the profit will be of $5.55.
Debt Ratio.
Total Liabilities / Total Assets
2012
$270.312/$480.706 =
0.56
2015
$0, 00/$3, 278.350
=
0, 00
In 2012, each $1.00 invested in assets is guaranteed by external creditors ($0.56),
whereas in 2015, the total assets will be guaranteed by the Company. This
demonstrates the autonomy of the project in five years.
The sustainability of Ekologi, is a concept that has to be printed in both internal and
external processes, in the values and financial investments, in the manufacture of
its products, in the strategies of expansion and growth, in the social responsibility
through social and ecological programs, through the work of the partners and
employees; everything put together to form an effective, sustainable company with
potential growth; this is Ekologi, the company formed for the society, for the
environment, for the technological growth, and for a more ecological and
sustainable world.