Case Study on Large Enterprise Finance!

Case Study on Large Enterprise Finance!

M/s. Emerald Oil Industries Ltd. registered as a private limited company with the Registrar of Joint Stock Companies and Firms (RJSCF) in July 2008, having its factory at Sherpur, is the pioneer of its kind for extracting edible oil from rice bran for 100% local utilization by substituting imported products. Mr. Syed Monowarul Islam, Chairman and Mr. Syed Hasibul Gani Galib, Managing Director of the company are looking after the overall operation, management and marketing of the project. The complete plant and machinery has been imported from India. The supplier’s experts have installed the plant and trained a group of local technicians to operate the plant under their direct and indirect supervision. At present about 350 persons are engaged in the production process of the factory. Total estimated fixed cost of the project is Tk.79.86 crore. The project is availing Tk. 50.00 crore as term loan from XYZ Bank and working capital limit of Tk.5 crore. The project is both labor & capital intensive. Rice Bran Refined Edible Oil producing factory belongs to large size manufacturing industry. The plant has bran unloading, preparatory, solvent extraction, oil refinery, & DOC packing section. The project is intensively dependent on local raw materials which are very much available. Major portion of production input is rice bran. The final output is Rice Bran Refined Edible Oil. The production capacity of the project after BMRE would be 50 MT/day i.e. 15,000 MT/year. Other information is given below.

Case Study on Large Enterprise Finance!

• Bangladesh, being the 4^th largest rice producer in the world, has unique competitive strength in producing rice bran oil from rice
• As per specialist opinion, average oil consumption in daily food menu for sound health should be 30 gram per person i.e. 11 KG per year. As such, total demand for oil consumption of the country is 18 lac MT whereas M/s. Emerald Oil Industries Ltd. has a production capacity after BMRE of 15,000 MT/year which is less than 1% of the total demand for edible
• Being nutritionally superior, containing more micronutrients, having better protection for heart & related blood vessel, more stable at higher temperature, anti- viral capability, longer shelf life, less sticky, economical, securing better taste & flavor to food items; rice bran oil have superior competitive advantages over its substitute
• The target customers for the project are rural and urban residential and commercial users, food processing industrial sector of the Besides, the project also plans to export its products abroad in near future and as such market risk are relatively low for the project.
• Being a nontraditional project and pioneer of its kind for producing Rice Bran Refined Edible Oil from rice bran, M/s. Emerald Oil Industries Ltd. is successfully manufacturing & supplying the same in the brand name “Spondon” at its rated capacity which is substituting imported edible oils saving the huge foreign currency and creating ample opportunity for the nation to be self-dependable in edible oil production by securing alternative use of rice bran which is currently has no or little uses. Simultaneously, the project is enabling the rural and urban consumers to fulfill their demand for health-friendly and hazard-free edible oil at a competitive price. This project has also created job opportunity that is necessary for our economy.

• Case Study on Large Enterprise Finance!

   

• Requirement: Critically analyze the case and identify the success factors.