MEWTWO COMPANY

BUSINESS PROPOSAL

Proponents:
Alquizola, Emmanuel
Enopia, Brendaline C.
Olegario, Kevin

March 12, 2017

 EXECUTIVE SUMMARY

The innovation of Coffee Go 13 in 1 instant coffee is founded by Mewtwo Company

which cater to local coffee consumers. Coffee, a brewed drink prepared from roasted coffee
beans, which are the seeds of berries from the Coffee plant, is highly consumed by Filipinos.
The capability of the country to produce coffee beans locally such as the variety Robusta
and Excelsa makes way for the company to produce affordable high quality and affordable
coffee. The production of local coffee provides opportunity for our local coffee farmers to
improve their method of farming and increase yields of coffee beans. This also provides
opportunity for the employment of our local coffee experts.

Mewtwo Company, located in Cebu City, is a new business providing high-quality, full
service distribution of instant coffee, specifically Coffee Go 13 in 1, who also supplies to
each own and other coffee houses and local Philippine market. The principal owners are
Kevin Olegario, Brendaline Enopia and Emmanuel Alquizola, whose combined experience
brings office management, high levels of customer service. At this time, the company are
seeking additional equity capital to compliment our own investment and are seeking to
arrange a bank line for inventory and receivables financing. We have firm commitments to
distribute several high-quality new age beverage products, and have verbal commitments
from independent retailers throughout the Philippine market to carry our product.

The nature of the project is to promote coffee production in the Philippines through
increased coffee processing activities to provide for the local coffee market. Part of this
project is the roast and invest, which means that as the company buys the beans from the
native producers, the company also invest on the farmer by giving fertilizers and seeds.The
objectives of the project, among others, are: i) to add value to Filipino coffee; ii) train Filipino
coffee roasters to improve their skills; iii) create jobs; iv) strengthen coffee consumption in
Philippines; and v) contribute to the sustainability of the Philippine coffee industry.

Although instant coffees of different brands, usually imports, are widely distributed,
Mewtwo company assures high quality, affordability and health benefits of locally produced
Coffee Go 13 in 1, instant coffee from coffee bean to a cup of coffee. The company plans to
produce different promotion materials to introduce Coffee Go 13 in 1 to the public.

The initial budget is estimated to be 138,000,000 php. Sales projections for the
Mewtwo Company are estimated to begin at approximately 140,000,000Php the first year,
increasing to approximately 160,900,000Php in Year 2 and approximately 180,800,000Php
in Year 3. Our net profit is projected at approximately 200,150,000 Php the first year,
increasing to 220,300,000Php by the end of the third year of operation.

Distinguishing characteristics of our business will be the combination of management

experience, sales and distribution experience, high-quality, innovative products and
exceptional customer service. In particular, what really sets up apart is that we assure high
quality coffee beans and affordable instant coffee product compared to imported products.
In addition, Mewtwo Company has an exclusive contract to distribute a new, groundbreaking
product that would enable us to gain immediate access to a majority of the potential
customer base.
 RATIONALE

The consumption of coffee is relatively high in the Philippines. The country, which is
located in the tropical zone, has been known to produce coffee beans since 19th century.
However, the export of coffee is higher than import in 2011, according to Department of
Agriculture. Due to inevitable consumption of coffee, Mewtwo Company proposed production
of affordable coffee for Filipinos, CoffeeGo 3 in 1 instant coffee. The company plans to utilize
our own coffee beans to support our coffee growers in the country.

ORGANIZATIONAL INFOMATION

About the Company

Mewtwo company is the premier specialty coffee company in the Philippines. The
company was founded in 2016 in Cebu City by Emmanuel Alquizola, Brendaline Enopia and
Kevin Olegario. They were coffee lovers who decided to brew their own coffee and decided
to do it in large scale. Mewtwo Company offers superior quality coffees by sourcing the best
quality coffee beans in the Philippines, adhering to strict high-quality and taste standards,
and controlling product quality through its unique direct store delivery selling and
merchandising system. Mewtwo company is committed to strategically growing its business
through many channels while maintaining the extraordinary quality of its coffees.

Mission

It has always been, and will always be, about quality. Were passionate about ethically
sourcing the finest coffee beans, roasting them with great care, and improving the lives of
people who grew them. We aim to provide the perfect and delicious coffee products and to
earn the loyalty of customers and to create extraordinary coffee experiences.

Vision

To be a leader in the coffee industry by committing to a culture of quality, excellence,

integrity, and passion for all things brewed.

Organizational Chart
 Job description and Responsibilities

Investment Department

The role of the Investment Management department is to manage funds in a prudent

manner consistent with its fiduciary obligation to benefit plan participants and institutional
clients. Department responsibilities include selecting investment managers, monitoring
performance, screening investments and managing the Positive Social Purpose Lending
Program.

Technical Department
User-friendly assistance for individuals having technical problems with electronic devices.
The technical support team is composed of individuals that are familiar with the ins and outs
of a device. With this knowledge, they are able to troubleshoot most problems that a user
experiences. Information on how to reach technical support is usually provided with the
packaged materials included with a device. Technical support may be provided over the
phone, through email, or with a live-chat interface.
Marketing department
A marketing department promotes your business and drives sales of its products or services.
It provides the necessary research to identify your target customers and other audiences.
Production department
Production is the functional area responsible for turning inputs into finished outputs through
a series of production processes. The Production Manager is responsible for making sure
that raw materials are provided and made into finished goods effectively.
Human resources department
A human resources department is a critical component of employee well-being in any
business, no matter how small. HR responsibilities include payroll, benefits, hiring, firing, and
keeping up to date with state and federal tax laws. The manager of the human resources
department is responsible for ensuring that department employees are well-versed in their
areas of expertise. The various disciplines of HR require expertise in compensation,
benefits, safety, payroll, recruiting and training.

PROJECT DESCRIPTION

Objectives:

To open and operate a successful instant coffee beverage distributorship in the

Philippine market, employing three to five hundred employees the first year.
to add value to Filipino coffee;
train Filipino coffee roasters to improve their skills;
create jobs;
strengthen coffee consumption in Philippines; and
contribute to the sustainability of the Philippine coffee industry

Methods:

The Mewtwo company will carry a variety of quality products that will enable us to
provide full service delivery to espresso stands and coffee markets. Our underlying
philosophy in selecting products is to choose lines that will bring consistent quality,
competitive prices, and product satisfaction to our customers. We have personally
researched and sampled our product that we offer to ensure the quality we guarantee.

Sales literature to be distributed to both current and potential customers will include
brochures, fliers, newsletters, as well as other print media such as print advertisements. Our
marketing team is highly skilled in graphic design and desktop publishing, and has quality
design and printing equipment to publish professional pieces at a low cost.

Mewtwo company will purchase raw materials directly from local producers.
Because this eliminates the broker or "middle man," this allows us to operate on a 25-30%
profit margin, while providing our customers with competitive prices. To further reduce costs,
The Coffee Go Warehouse plans to share product shipments out of Cebu with distributors
operating in Manila, Davao and Zamboanga. The Coffee Go Warehouse plans to send a
cargo to Cebu on a bi-weekly basis to pick up product, thus cutting costs by an average of
5%.
 Within the first year of business, Mewtwo company intends to open a retail/wholesale
store and high-quality showroom. Products will be available for purchase by both our
wholesale customers who may need product between delivery days, as well as retail
consumers interested in purchasing product for their home use. We will also offer a
showroom that will feature equipment, supplies, trade resources, and information on
marketing services with examples of marketing and promotional material available to
customers.

With the addition of the product showroom, Mewtwo Company will offer customers
quarterly product and training demonstrations that will be presented by trained beverage
experts from the industry.

The company also plans to hold semi-annual trade shows for current or potential
customers. These trade shows will allow customers the opportunity to sample products, talk
to manufacturers, learn about new industry trends, review marketing material, and network
with other business owners in their market.

Plant Layout
 Instant coffee is made from coffee beans that have been roasted and ground. The
ground beans are then extracted with hot water to recover the coffee flavour and aroma. The
process is similar to using a coffee percolator. The coffee extract is then dried in one of two
ways: spray-drying and freeze-drying. In spray-drying the coffee extract is sprayed into a
stream of hot air at the top of a tall cylindrical tower. As the droplets fall, they dry, becoming a
fine powder by the time they reach the bottom. The powder may then be texturised into
granules to facilitate dosage and dissolution. The quality of the aroma and flavour are
preserved thank to the very fast drying occurring during this process. Spray-drying is the
most commonly used drying process. In freeze-drying, the coffee extract is frozen to about
40C and cut into granules. The frozen granules are then dried at low temperature and under
vacuum. The quality of the aroma and flavour are protected by the very low temperature and
gentle drying conditions.Finally, the soluble coffee is packaged into either glass jars or
sachets.

Business plan
Staffing and Administration:

The Mewtwo company will be owned and operated by its founders, initially working
with a small number of employee base that will cover sales and delivery. The company will
be managed by the three founding partners, whose individual areas of expertise cover many
of the functional aspects of the business.

The organizational structure is very simple. Emmanuel Alquizola will be responsible

for the routing, distribution management and delivery systems. Kevin Olegario and
Brendaline Enopia will be responsible for customer service, accounting, shipping and the
general administration of the business. Together they will be responsible for product
selection and sales and marketing.

The support staff at the office and warehouse, as well as the delivery personnel will
report to Brendaline and Kevin. Because Emmanuel will be spending a majority of his time
in the trade, Kevin and Brendaline will be able to support any day-to-day needs that the
personnel may have. However even when Emmanuel is out of the office, he will be in
constant contact via computer or phone.

The goal of the company is to have a team of committed associates who empower
each other so that the customer's expectations can be exceeded. Our goal is to offer career
opportunities, advancement opportunities and a level of income and benefits that is
competitive within the region and job classification. It is our long-term goal to be the
preferred employer within our niche of the instant coffee distribution industry.

(a) Personnel (General)

Initially we expect to be able to handle business needs with Kevin, Brendaline and
Emmanuel, one administrative assistant, and two product delivery/sales personnel. As
business continues to grow, we intend to hire additional employees one at a time and pay
premium, over market labor rates to attract and retain quality help. Not only will we train our
employees to deliver excellent service, we will give them the flexibility to respond creatively
to client requests. In addition, we will continually monitor our clients' level of satisfaction with
our service through surveys and other convenient feedback opportunities.
To ensure our personnel are meeting our expectations, we will hold a minimum of
quarterly meetings with all employees so that results can be reviewed and future plans can
be discussed. At least twice a year, a refresher course will be required on product knowledge
and how to exceed our customer's expectations.

(b) Sales and Delivery

In order to deliver high quality, personalized service we will carefully select all
employees - with extra attention given to sales reps and delivery personnel who will deal
directly with customers. We will carefully review references not just from past employers or
manufacturers, but also from retailers whom these sales reps have served. We will also
make sure that each employee understands our way of delivering quality service to each
customer. We will have immediate back-up support available by phone from our office for
more difficult service issues. We will also give employees enough latitude so that they can
respond immediately to almost any customer request or complaint - which in this industry
usually means granting immediate credit for damaged merchandise, and adding additional
merchandise to an order.

Monitoring and Evaluation:

Strategic Goal Indicators Sources of verification

1. To enhance the (a) Updated statistics on (a) Annual Review
transparency of our coffee trade, production, (b) Monthly Coffee Market
coffee market prices, consumption, etc. Report
(b) Statistical quality (c) Monthly, quarterly, and
(c) Studies and reports on annual statistics
relevant aspects of the coffee (d) Specific studies and
economy reports
(d) Market Expansion and (e) Regular progress report
diversification on implementation of plan
2. To promote a (a) Action plan to encourage (a) Annual Review
sustainable coffee increased coffee consumption (b) Specific studies and
sector and market development Reports
(b) Volume of consumption in (c) Regular progress report
coffee on implementation of plan
(c) Implementation of coffee
quality standards
Plant Layout
 Product design

Figure 1. Front cover of Coffee Go Figure 2. Bront cover of

13 in 1 sachet Coffee Go 13 in 1 sachet

Budget proposal

PROJECT FINANCE

Start-up

Costs
Permits and Licenses 100,000.00
Business Plans 22,500.00
Insurance Deposits 5,000.00
Marketing 100,000.00
 Website 50,000.00
Rent Deposit 200,000.00
Office Supplies 5,000.00
Signs 150,000.00
TOTAL 1,087,500.00

Factory Equipments

Costs
500,000.0
Extractor 0
250,000.0
Evaporator 0
Membrane Filter 50,000.00
Bag Filter 250.00
450,000.0
Freeze Dryer 0
1,250,250.
TOTAL 00

Raw materials (annual basis)

Quantity Unit Cost Total Costs

Coffee beans 1 11,500.00 20.7 M
creamer 1 15,000.00 56.7 M
water 1 7,500.00 57.9 M
TOTAL 135.3 M

Equipments

Equipments Costs
Extractor 500,000.00
Evaporator 250,000.00
Membrane Filter 50,000.00
Bag Filter 250.00
Freeze Dryer 450,000.00
TOTAL 1,250,250.00

The total starting budget is approximately 137.63 million pesos.

 Quality control

Risk Analysis

Risk identification, assessment and prioritization are vital steps in developing an

appropriate risk management strategy for each country. Failure to prioritize risks can result
in inappropriate focus being made on only some risks. One risk which is considered by the
company is the inability to meet project timelines which is shown below.
 Another risks are increase in the cost of high quality Arabica or Robusta coffee beans
could reduce our gross margin and profit, Disruptions in the supply of green coffee could
result in a deterioration of our relationship with our customers, decreased revenues or could
impair our ability to grow our business, and the coffee industry is highly competitive and if we
cannot compete successfully, we may lose our customers or experience reduced sales and
profitability. Green coffee is our largest single cost of sales.

Coffee is a traded commodity and, in general, its price can fluctuate depending on:
weather patterns in coffee-producing countries, economic and political conditions affecting
coffee-producing countries, including acts of terrorism in such countries, foreign currency
fluctuations, and trade regulations and restrictions between coffee-producing countries and
the Philippines. In addition, supply is affected by many factors in the coffee growing
countries including weather, political and economic conditions, acts of terrorism, as well as
efforts by coffee growers to expand or form cartels or associations. If we are unable to
procure a sufficient supply of green coffee, our sales would suffer. Furthermore, the coffee
markets in which we do business are highly competitive and competition in these markets is
likely to become increasingly more intense due to the relatively low barriers to entry. The
industry in which we compete is particularly sensitive to price pressure, as well as quality,
reputation and viability for wholesale and brand loyalty for retail. To the extent that one or
more of our competitors becomes more successful with respect to any key competitive
factor, our ability to attract and retain customers could be materially adversely affected.
 SWOT Analysis

Nescafe Kopiko 76oC

Easy to prepare coffee, available
Drink-to-go coffee
Strengths in Hazelnut, Mocha, and
Guaranteed effective and trusted
Cappuccino

Too much caffeine that leads to

Presence of preservatives that are
palpitations to most of the
unhealthy for long term
Weaknesses customers
consumption
Most customers dont like its
No nutritional benefits
artificial taste

The brand is famous in social

Because the brand is already
media so it is not hard to
established, has more connections
Opportunities advertise especially that the
and platforms considered for
major consumers are students
advertising the product
who are social media users

The increase of health-conscious The increase of health-conscious

Threats individuals may decrease the individuals may decrease the
demand for the product demand for the product

Conclusion

Production of coffee in the Philippines needs boosting due to high consumption of

processed coffee beans in the Philippines. This document has proposed research to
assessed the needs for coffee. The proposed research will achieve the following goals: (1)
open and operate a successful instant coffee beverage distributorship in the Philippine
market, employing three to five employees the first year, (2) obtain a minimum of 100
regular customers in the Philippines the first year of operation, (3) Achieve first year sales of
80,000,000Php.Maintain an average gross margin of 25 percent, (4) and produce a net
profit of at least 18,000,000 Php by the end of the third year of operation.