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Business Plan for Introducing Erythritol in Indonesia - Assignment Example
In the modern world, increasingly sedentary lifestyles have meant increased incidences of obesity and diabetes. To fight these lifestyle diseases, scientists are constantly in search for products that are good to the palate but do not add to the waistline…
Unlike other sugar substitutes, it is made from naturally occurring substances and hence is largely free from side-effects.
Indonesia is an archipelago of 13,367 islands with a total land area of 1,907,950 square kilometers. The reforms undertaken by Indonesian government since the 1997 economic crisis have resulted in very conducive environment for establishing a new business. The low cost of labor in Indonesia makes setting an Erythritol production factory a very profitable enterprise. Besides, with increasing consumer awareness in Indonesia, it will also be profitable to market and sell this zero-calorie, no side-effect sugar substitute in Indonesia.
Although Indonesia is not an easy place to start a new business Indonesian government encourages foreign investment in Indonesia. Considering the low cost of labor, it would be cheaper to setup a factory in Indonesia rather than importing Erythritol from outside. According to www.doingbusiness.org, it takes an average of 97 days and a minimum capital of IDR 20,000,000 (USD 2500) to obtain the required licenses to launch a new business in Jakarta. Another 40,000,000 (USD 5000) is needed to obtain the required permits and registrations for a warehouse. Hence the main costs would be of building the factory and buying/leasing equipments. Unfortunately, in Indonesia this cost could be prohibitive.
Another hurdle in setting up a factory in Indonesia is the long time it takes to get all the requir ...