The total Project Cost of P 63,923.00 will be used to finance the establishment or expansion of a 1 hectare Seaweed Farm per cooperative. An estimated 63% of the total Project Cost or equivalent to P 40,423.00 will be used to finance the construction of a farm house/drying facility, farm equipment, 3 months working capital requirements, contingency and administrative and selling expenses. The remaining 37% or equivalent to P 23,500.00 represents labor equity from the cooperative.
The cooperative is projected to produce 4 at of dried seaweeds/cropping season of 3 months. Details of Project Cost and estimates is presented below:
| Qty | Unit | Unit Cost (P) | Total Value (P) | Loan (P) | Equity (P) | |
| FIXED INVESTMENT | ||||||
| Farm House/Dry Facilities | 1 | unit | 15,000 | 15,000 | 15,000 | 0 |
| Weighing Scale | 1 | pc | 2,000 | 2,000 | 2,000 | 0 |
| Farm Equipment | 10,130 | 10,130 | 0 | |||
stainless steel knife | 5 | pcs | 50 | 250 | 250 | 0 |
crow bar | 2 | pcs | 200 | 400 | 400 | 0 |
bolos | 5 | pcs | 100 | 500 | 500 | 0 |
sledge hammer | 1 | pc | 300 | 300 | 300 | 0 |
rattan basket | 4 | pcs | 60 | 240 | 240 | 0 |
water baskets | 4 | pcs | 160 | 640 | 640 | 0 |
face mask/snorkel | 5 | sets | 900 | 4,500 | 4,500 | 0 |
flashlight | 2 | pcs | 150 | 300 | 300 | 0 |
outrigger boat | 1 | pc | 3,000 | 3,000 | 3,000 | 0 |
| sub total | 27,130 | 27,130 | 0 | |||
| WORKING CAPITAL, 1 cropping (3 nos) | ||||||
| Farm Materials | 7,800 | 7,800 | 0 | |||
mangrove stake, 1m | 7,000 | pcs | 1 | 7,000 | 7,000 | 0 |
polyrope, #5 | 20 | roll | 40 | 800 | 800 | 0 |
| Seedlings | 102 | kg | 5 | 512 | 512 | 0 |
| Labor | 470 | md | 50 | 23,500 | 0 | 23,500 |
| Overhead Exp | 3 | no | 600 | 1,800 | 1,800 | 0 |
| Sub total | 33,612 | 10,112 | 23,500 | |||
| CONTINGENCY, 5% wc | 1,681 | 1,681 | 0 | |||
| ADMIN/SELL EXP | 3 | no | 500 | 1,500 | 1,500 | 0 |
| TOTAL PROJECT COST | 63,923 | 40,423 | 23,500 | |||
| % age | 100% | 63% | 37% | |||
A projected P 163,840.00 income from sales is generated from 16,384 kgs. of dried seaweeds from four (4) cropping season harvest. A Net Income of P 18,865.00 is realized from Year 1 operations. This is increased to P 55,067.00 in Year 5.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Income from sales, 4 harvests | 163,840 | 163,840 | 163,840 | 163,840 | 163,840 |
| Less: Cost of Sales | 132,912 | 101,200 | 101,200 | 101,200 | 101,200 |
Farm Materials/seedstock | 31,712 | 0 | 0 | 0 | 0 |
Labor | 94,000 | 94,000 | 94,000 | 94,000 | 94,000 |
Overhead Exp | 7,200 | 7,200 | 7,200 | 7,200 | 7,200 |
| Gross Margin | 30,928 | 62,640 | 62,640 | 62,640 | 62,640 |
| Less: Admin/Sell Exp | 6,000 | 6,000 | 6,000 | 6,000 | 6,000 |
| Savings before Interest | 24,928 | 56,640 | 56,640 | 56,640 | 56,640 |
| Less: Interest Charges, 15% | 6,063 | 5,164 | 4,130 | 2,941 | 1,573 |
| NET INCOME (SURPLUS OR SAVINGS) | 18,865 | 51,476 | 52,510 | 53,699 | 55,067 |
An important characteristic of cooperatives is that they share earnings equitably. Instead of dividends, cooperatives distribute interest and patronage refunds. The interest is lower than the normal returns to investment, so speculation is discouraged. Patronage refunds are distributed in proportion to transactions of members with their cooperatives. This way, members are rewarded for patronizing the cooperative.
The earnings or income or net surplus belongs to the members. They may decide to forego interest and patronage refund in favor of more reserve capital funds which an existing business activity can utilize in this case, Seaweed Farming.
Under the Philippine R.A. 6938 or the Cooperative Code of the Philippines, the earnings is allocated for the Reserve Fund, Educational Fund, Interest on Paid up Capital and Patronage Refund. Based from the above computation of Net Income (Surplus of Savings), the fund allocations is computed below:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Reserve Fund, 20% | 3,773 | 10,295 | 10,502 | 10,740 | 11,013 |
| Educational Fund, 10% | 1,886 | 5,148 | 5,251 | 5,370 | 5,507 |
| Interest, 12% on paid up capital | 600 | 600 | 600 | 600 | 600 |
| Patronage Refund | 6,259 | 16,043 | 16,353 | 16,710 | 17,120 |
It is also important to note that one guiding principle of a cooperative is continuing education for members which can utilize allocation to the Education Fund. This means that the coop member or officer can attend seminars or special courses for the betterment of the cooperative.
Cash generated fro Year 1 operations total to P 227,763.00 from equity infusion, loan from the banks or financing institutions, and income from the sale of 16,384 kgs of dried seaweeds. After deducting all cash expenses including payment of principal and interest, the cooperative realizes net reserves of P48,650.00 at the end of the year. This increases to P 220,651.00 in Year 5.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| CASH INFLOW | 227,763 | 163,840 | 163,840 | 163,840 | 163,840 |
| Equity | 23,500 | 0 | 0 | 0 | 0 |
| Loan | 40,423 | 0 | 0 | 0 | 0 |
| Income | 163,840 | 163,840 | 163,840 | 163,840 | 163,840 |
| CASH OUTFLOW | 179,112 | 118,590 | 118,590 | 118,590 | 118,590 |
| Farm House/Dry Facilities | 15,000 | 0 | 0 | 0 | 0 |
| Weighing Scale | 2,000 | 0 | 0 | 0 | 0 |
| Farm Equipment | 10,130 | 0 | 0 | 0 | 0 |
| Farm Materials/seedstock | 31,712 | 0 | 0 | 0 | 0 |
| Labor | 94,000 | 94,000 | 94,000 | 94,000 | 94,000 |
| Overhead Exp | 6,531 | 6,531 | 6,531 | 6,531 | 6,531 |
| Contingency, 5% WC | 1,681 | 0 | 0 | 0 | 0 |
| Adein Expenses | 6,000 | 6,000 | 6,000 | 6,000 | 6,000 |
| Debt Service | |||||
Loan Repayment | 12,059 | 12,059 | 12,059 | 12,059 | 12,059 |
Principal | 5,995 | 6,895 | 7,929 | 9,118 | 10,486 |
Interest | 6,063 | 5,164 | 4,130 | 2,941 | 1,573 |
| NET CASH FLOW | 48,650 | 45,250 | 45,250 | 45,250 | 45,250 |
| ADD: CASH BEG | 48,650 | 93,900 | 139,151 | 184,401 | |
| CASH, END | 48,650 | 93,900 | 139,151 | 184,401 | 229,651 |
The Project exhibits high profitability. For instance, the Net Profit Margin for the Year 1 operations is 28% and Gross Profit Margin is 34%. The Return on Investment is 79%. After 1 year and 3 months the original investment cost of P P63,923.00 is recovered.
| Net Profit Margin | 28% |
| Gross Profit Margin | 34% |
| Return on Investment | 79% |
| Payback Period, year and months | 1.39 months |
| 1. | Species to be planted | = | G. firma |
| G. fastigiata | |||
| G. cylindrica | |||
| G. tenuispitata. | |||
| 2. | 1 Plot, 100 m2. Planting requirements, monoline method: | ||
| 1 plot: 10m × 10 m | = | 100 m2 | |
| no of 10 m length line | = | 32 | |
| line size | = | # 5 | |
| Number of mangrove stakes | = | 70 | |
| distance between the lines and plants | = | 30 cm | |
| seedlings, initial weight | = | 100 grams | |
| Number of seedlings in one line | = | 32 | |
| Total seedlings | = | 1,024 | |
| 100 Plots, 100m2 | = | 1 ha | |
| 1 participating cooperative | = | 1 ha | |
| 6 participating cooperatives | = | 6 ha | |
| 3. | 1 Ha Production and Harvest, monoline method | ||
| Seedling, initial weight | = | 100 grams/seedling | |
| 1,024 seedlings, initial weight | = | 102.4 kg | |
| Seed plants, weight after 45–50 days (less seedling mortality and other factors | = | 400 grams/plant | |
| Production/plot after 45–50 days | = | 409.60 kg wet | |
| Production/ha after 45–60 days | = | 40,960 kg wet | |
| Production/ha @ 10:1 ratio | = | 4,096 kg dry or 4 tons dry | |
| 4. | Farm House, indigenous materials | = | p15,000 |
| 5. | Weighing Scale | = | 2,000 |
| 6. | Farm Equipment | = | 10,130 |
| stainless steel knife, 5* P50 | = | 250 | |
| crow bar, 2* P200 | = | 400 | |
| bolos, 5* P100 | = | 500 | |
| sledge hammer, 1* P300 | = | 300 | |
| rattan baskets, 4* P60 | = | 240 | |
| water baskets, 4*P160 | = | 640 | |
| face mask/snorkel, 5* P900 | = | 4,500 | |
| flashlight, 2* P150 | = | 300 | |
| outrigger boat, 1*P3,000 | = | 3,000 | |
| 7. | Working Capital/Cropping Period, 3 mos | = | 16,624 |
| Farm Materials | = | 8,312 | |
| mangrove stake 1m, 7,000 pcs*P1 | = | 7,000 | |
| polyrope #5, 20 rolls m *P40 | = | 800 | |
| Seedlings, 102.4 kg* P5 | = | 512 | |
| In the subsequent croppings, seedlings can be sourced from the present farm. Other raw materials can be recycled. | |||
| Labor, 470 mandays*P50 | = | 23,500 | |
| site prep/seedling gathering, 25md*P50 | = | 1,250 | |
| construction/planting, 25md*P50 | = | 1,250 | |
| farm care/maintenance, 180md*P50 | = | 9,000 | |
| harvesting, 100md*P50 | = | 5,000 | |
| drying, 100md*P50 | = | 5,000 | |
| packing, 40 md*P50 | = | 2,000 | |
| Overhead Expenses | = | 1,800 | |
| repairs and maintenance | = | 131 | |
| depreciation | = | 669 | |
| boat @P3,000/5 years= 600 | = | 150 | |
| farmhouse, @ P15,000/8 years=1,875 | = | 469 | |
| weighing scale, @P2,000/10years=200 | = | 50 | |
| miscellaneous, gunny sacks, etc. | = | 1,000 | |
| 8. | Contingency, 5% WC | = | 1,681 |
| 9. | Admin/Sell Expenses/mo. (honoraria) | = | 500 |
| 10. | One cropping production, dried | = | 4,096 kg |
| 11. | Selling price, Year 1, dried/kg | = | P 10.00 |
| 12. The Federation shall have available 24,576 kgs dried seaweeds/cropping representing harvests from 6 cooperatives. Only 1 buyer will be contracted for the whole produce. | |||
| 13. Interest is estimated @ 15% of the loan payable in 5 years. Interest payments is based on a diminishing balance of the principal. | |||
