Serovic Stores Inc Investment Plan - Essay Example

Insert SHUKA FOOD, PROCESSORS COMPANY LIMITED. 27473, 673364, OLDYORK, NEWYORK. ZIRKOV KUZMANOVIC, DIRECTOR SEROVIC STORES INC. RUSSIA. 45621, MOSCOW. It is a great thing talking to me about your company and your prospects to invest into new ventures in Moscow. I am pleased to propose a viable and profitable venture that you can invest. This project proposal seeks to provide the Russian market with a new product having assessed and analyzed some similarities between the American market and the Russian market (Lonkila). With knowledge of the gap in the Russian market. My company deals with food processing majorly pork and chicken. We have been in the market in the USA for 5years building a steady market and provided the best products in the market. This document contains estimated costs of the project and can undergo adjustment when you make the decision to invest in it. Sincerely, PukipsMavelyne, President Marketing Shuka Food Processors Co. Ltd SHUSEROVISFOOD, PROCESSORS COMPANYLIMITED. +734-4375635344, +734-5749893462. 020-27473, 020-673364, OLDYORK, NEWYORK. Project Pre-history The food productivity in Russia has been decreasing over some time. Russia is one of the largest food market importing country and the food processing sector being unaffected by the crisis is growing tremendously. This industry is being supported by the economic situation: the rise in real wages and growing food expenditure (Morrison). The European for Reconstruction and Development revised the growth projections for Russia increasing them by slightly above 0.3% and considering this change there is the need to increase production of processed food products in the market. Serovic Stores Inc. Russia is a mainstream food store in Russia and could do better-adding food and poultry products to its shelves. Sourcing these products from the Shuka Food Processors Co. LTD would allow the store to provide more products. These are new to the Russian market and beat the competition by having the healthiest and most delicious range of products gracing their shelves. The purpose of Shuserovis Food Processors Company limited to start the partnership to conquer the Russian processed food market. Consequently, it is in order to make an impact in the rich Russian market Shuka Food Processors Co. LTD needs Serovic Stores Inc. The investment in this lucrative venture would be a significant success for both companies that couple together. The partnerships are to come up with an enterprise for food production in Moscow to serve the Russian market. There market gap is owing to the increasing demand for food in China due to population growth, hence reducing the export of food products to Russia (Schweitzer). Currently, it means that the Russian economy has an additional order of about 15000 tons per year. The production capabilities of agricultural produce, in this case, is in the approximation of 35000tons per year, and approximately 75% of the total raw material will be from the Russian farmers.The projection of Investment benefits is 40.2million USD per year. Project specification: Owners - Shuka Food Processors Company limited &Serovic Stores Inc. Russia (Proposed partners) Industry: Food processing Place: - Russia, Moscow Objectives Shuserovis Food Processors Company limited, require introducing new processed food products to the Russian market to beat the competition and to earn profits. The company aims at promoting cutting age technology in food processing and also providing the healthiest and cost efficient products to suit the Russian market. The product should excite the Russian population, and satisfies the demand available. Goal Shuserovis Food Processors Company Limited will be the leader in the Russian food processing market. Serovic Stores Inc. Russia, a leader in the Russian market, and Shuka Food Processors Co. Ltd a leading company in the American and European market, are to create a formidable partnership that will beat the competition in Russia. Serovic Stores Inc. Russia is a mainstream food store in Russia dealing with food and beverages currently seeking to introduce a new product to the market. The aim of ShukaFood Processors Co. Ltd is to processing and supply of the most innovative and healthy pork and poultry products. ShukaFood Processors Co. Ltd is a result of a merger of two companies ShupPorks co. And Kenchick Chicken co. The two were giants in the food industry (Brebbia, Magaril and Khodorovsky). The company has set the standards for innovative and successful pork and chicken processing. Its products - internationally known - by the trademark "farmers choice" have been present in both the American and European market for 5years now. The company is among the ten largest food companies in the world with presence in 76 countries, 51 industrial units, and 38 commercial offices it ranks as a leader in the food industry. Across Europe and America the market share is as follows: Across Europe Produce market share Pork 29% Beef 22% Dairy products 9% Poultry products 36% The company was voted the best food processing company twice in the USA and also has in the limelight as the most innovative food processing company in Europe. It has been a leader in developing new products and cutting age technology in food production. Companies association with the clients is an excellent relationship with its customers and suppliers producing food stores both for wholesale and retail stores. ISO 9001, ISO 14001 and QHAS18001 are among the Quality, Environment and food safety Standards being its management standards (Blokdijk) .The company has12 pork industries, seven beef processing plants, four dairy plants and nine poultry processing plants. Products undersupply by Shuserovis Food Processors Company Limited Processed dairy products Processed pork Processed beef products Processed poultry products Office location proposed – Moscow, Russia. Legal structure – the new company after formation will jointly run under two directors elected by each partner. Shareholders – Serovic Stores Inc. Russia and Shuka Food Processors Co. Ltd Financial requirements The summary of the financial condition is in the table below. SN Particular Number Per each (USD) Total (USD) 1 Dairy processing plant 2 102500 205000 2 Poultry processing plant 1 600000 600000 3 Pork processing plant 1 400000 400000 4 Beef plant 2 100000 240000 5 Initial costs (approx.) _ _ 1000000 6 Other costs _ _ 2300000 7 Total costs _ _ 3444500 Share contribution amounts 50% to for each partner Part 2 Cultural analysis Processed food is currently one of the fastest growing industries in the Russian market.In the preceding few years; the growth of the area has been tremendous from a volume of 6% to slightly under 15% in less than 2years by 2014. In the recent year, there has been an increasing acceptance of processed food products in the Russian market owing to introduction though in small quantities (McCarthy, Puffer and Shekshni︠a︡). A workable example of such foods would be the cheese that has been increasing in popularity and has seen an increase in value by around 10% in current value in recent years. This improved demand in processed food products is creating a market that can be very profitable. Economic analysis Currently the current economic situation for the Russian market, having recovered from the inflation where most of the industries suffered substantially the economic situation is favorable to launch such markets (Lohlein). Russia has become one of the largest foods importing Economy and using this economic situation would also promote the demand for processed for food significantly. Competitive analysis Kachestvennyeprodukt ZAO led the food processing sale accounting for less than 10% in 2014. The product provides processed food under a number of brands ranging from dairy products, poultry products, and beef products. These products are, however, insufficient to serve the market and usually causing severe shortages. It is also true that our products are more innovative and available in enough quantities. Ranked second and third are Talosto ZAO and IceBit ZAO, both recording a mere under 5%, leaving the market widely unexploited. Russia ranks top when it comes to the economy across the world with a population of more than 140 million people. Further, more than a half of this population lives in urban centers (DaVanzo and Grammich). As a result, it is a very viable market for foodstuffs undergoing processing. Just over 10% of this population lives in Moscow and St, Petersburg is the two largest markets. With around 80,000 restaurants between them these fast-food restaurants are a target market and can account for 41% of the total market demand. Summary Shuka Food Processors Co. Ltd is confident that the proposed partnership to conquer the Russian food market will address the urgency of the rising need of food. The latter has undergone processing in Russia. Most importantly it will be a long-term profitable venture for the two businesses. We are open for any inquiries into the matter and look forward to discussing the opportunity further. To effect a deal the following procedure will apply: Submission of questions and suggestions Approval or submission of a counter proposal Further negotiations on the terms and conditions The documents preparation was with due diligence and consideration of to some of your specification. We declare this document to be binding and free of any omissions or errors. We, therefore, agree to hold this offer open until 12th Dec, 2015. Thank you for your interest Sincerely, PukipsMavelyne, President Marketing Shuka Food Processors Co. Ltd Works Cited Blokdijk, Gerard. ISO 9000, ISO 9001 100 Success Secrets. [S.l.]: Gerard Blokdijk, 2008. Print. Brebbia, C. A, E. R Magaril, and M. Y Khodorovsky. Energy Production and Management in the 21St Century. SOUTHAMPTON: WIT Press, 2014. Print. DaVanzo, Julie, and Clifford A Grammich. Dire Demographics. Santa Monica, CA: Rand, 2001. Print. Lohlein, Daniela. An Economic Analysis Of Public Good Provision In Rural Russia. Frankfurt is Main: Peter Lang, 2003. Print. Lonkila, Markku. Networks in the Russian Market Economy. Basingstoke [UK]: Palgrave Macmillan, 2011. Print. McCarthy, Daniel J, Sheila M Puffer, and S. V Shekshni︠a︡. Corporate Governance In Russia. Cheltenham, UK: Edward Elgar, 2004. Print. Morrison, Claudio. A Russian Factory Enters The Market Economy. London: Routledge, 2008. Print. Schweitzer, Glenn E. Swords into Market Shares. Washington, D.C.: Joseph Henry Press, 2000. Print. Read More