Purchase and Export Report of

Banana

College of Agriculture, Baramati

&
Van Hall Larenstein, the Netherlands

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Submitted by -

 Ashwin Walhekar
 Bhagyashree Bhosale
 Sameeran Kalbhor
 Shivam Ghongade

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 Table of Contents
Chapter 1..........................................................................................................................................7

Export / Purchase of Mango for Europe..........................................................................................7

1.1 Introduction: -........................................................................................................................7

1.2 Company’s Description: -......................................................................................................7

Chapter 2..........................................................................................................................................7

Purchase Plan...................................................................................................................................7

2.1 Order specification: -.............................................................................................................7

2.2 State and Industry Selection: -.............................................................................................11

2.3 Supplier Selection: - (long list and short list)......................................................................12

Chapter 3........................................................................................................................................14

Supply chain..................................................................................................................................14

3.1 Back end: -...........................................................................................................................14

3.2 Front end: -..........................................................................................................................15

3.3 Risk Analysis: -....................................................................................................................16

Chapter 4........................................................................................................................................19

Export Plan....................................................................................................................................19

4.1 Company description: -......................................................................................................19

4.2 Goals and Objective: -.........................................................................................................20

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 4.2.1 Goals of company.........................................................................................................20

4.2.2 Objective of company...................................................................................................20

4.2.3 Goals for export............................................................................................................20

4.2.4 Objective for export......................................................................................................20

4.3 Product Description: -..........................................................................................................21

4.1 Products research and development: -.................................................................................26

4.2 New intellectual property protection: -................................................................................28

4.3 New foreign market analysis: -............................................................................................28

4.4 Industry Profiles: -...............................................................................................................34

4.4.1 Current market trends...................................................................................................34

4.4.2 Broadly identified direct Customers.............................................................................34

4.4.3 Competitive analysis.....................................................................................................35

4.4.4 Overall competitive conditions.....................................................................................37

4.4.4 Existing competitors.....................................................................................................37

4.4.5 Unique Selling Attributes.............................................................................................40

4.4.6 Existing sources of production and channels of distribution........................................40

4.4.7 Marketing practices......................................................................................................41

4.5 Market entry strategies: -.....................................................................................................43

4.5.1 Target customer profile.................................................................................................43

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 4.5.2 Who will they be?.........................................................................................................43

4.5.3 Demographic characteristics.........................................................................................43

4.5.4 Actual end users............................................................................................................44

4.5.5 Purchase decision making.............................................................................................44

4.5.6 Total market size and future growth potential..............................................................44

4.5.7 Future potential.............................................................................................................45

4.6 International law: -...............................................................................................................58

4.6.1 Dispute resolution consideration..................................................................................58

4.6.2 Language consideration................................................................................................59

4.6.3 Contract terms and condition........................................................................................59

4.6.4 RISK MANAGEMENT...............................................................................................62

Chapter 5........................................................................................................................................66

Financial Analysis.........................................................................................................................66

5.1 BALANCE SHEET: -..........................................................................................................66

5.2 Details of shares / Name of shareholder: -...........................................................................70

5.3 Short –term burrowing: -.....................................................................................................71

5.4 Trade payable: -...................................................................................................................72

5.5 Short term- provisions: -......................................................................................................73

5.6 Long term- provisions: -......................................................................................................73

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 5.7 Other Expenses: -.................................................................................................................74

Chapter 6........................................................................................................................................77

Bibliography..................................................................................................................................77

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Chapter 1.

Export / Purchase of Mango for Europe

1.1 Introduction: -

This assignment focuses on formulating an Export-Purchase plan strategy for an Indian company
exporting its products to European countries; it was allotted to the students of College of
Agriculture, Baramati, as a part of 3+1 course. We selected ‘Banana’ product of INI farm Pvt.
Ltd. for Export & Purchase with European countries. This report consists of our research finding
about the company and its product potential to expand business in European Union and acquire
new market. Since Banana is an exotic commodity in Europe, we believe that there will be more
possibility to expand the market in other European countries. Therefore, we are formulating an
Export-Purchase strategy based on our finding and research.

1.2 Company’s Description: -

INI farm is an agro based industry situated in Baramati Taluka, The business of INI is built on the
principles of cooperation and partnerships. They work with their employees, farmers, investors and
customers to build a “Healthy-Sustainable-Socially Impactful-Business”.

Chapter 2.

Purchase Plan
2.1 Order specification: -

1. Product- Banana
2. Variety: Grand Nain (G9)
3. Packing material: Corrugated Top Bottom - Premium, Vacuum Bag with foam separators
4. Quantity: 40 tones (varies according to season and demand)
5. Grade:
A. Extra Class: Superior quality, free from defects such as slight superficial defects which
don’t affect general appearance of product and keeping quality in package

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6. Size:  15-21 cm and girth is 12-13 cm.
7. Shape: Curved shape
8. Stage and colour: Unripe fruits shows green to yellow colour
9. Labeling- Corrugated fiber board’s should be labeled with following information
I. Name and the address of the Logistics – (not found)
II. Product Mango- Banana
III. Variety- GRAND NAIN
IV. Grade- Extra class and Class 1, Class 2
V. Country of origin- India
VI. Trade name- INI Farms Pvt. Ltd.
VII. Delivery Address:
1) Meher banana supplier- Malinagar, Solapur, 
Akluj-413101, Maharashtra, India
2) Sunshine banana supplier- 45, Ganesh Colony, Jalgaon, Maharashtra - 425003

VIII. Delivery Date: Day/month/year/ throughout the year.

10. Storage:

Temperature: 13.3-14.4°C
Relative Humidity: 90-95%.
Storage Period: 4-6 weeks

11. Retail Price:

1. 10-12 Thousands Rs per Ton of Grand Nain
2. 9-11 Thousand Rs per Ton of Cavendish

12. Consumer Price:

1. Grand Nain: 45 Rs/dozen
2. Cavendish: 40 Rs/dozen

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13. Quality Attributes:

Grade Grade requirements Grade tolerances

designation
1 2 3
Extra class Bananas shall be of superior quality. They must 5% by number or weight of
be characteristics of the variety and/or bananas not satisfying the
commercial type. The fingers must be free of requirements of the grade, but
defects, with the exception of very slight meeting those of for Class I
superficial defects, provided these do not affect grade or, exceptionally, coming
the general appearance of the produce, quality, within the tolerances for that
the keeping quality and presentation in the class.
package.
Class I Bananas shall be of good quality. They must be 10% number or weight of
characteristics of the variety and/or commercial bananas not satisfying the
type. The following slight defects of the fingers, requirements of the grade but
however, may be allowed, provided these do not meeting those of Class II or,
affect the general appearance of the produce, exceptionally, coming within the
quality, the keeping quality and presentation in tolerances of that grade.
the package.
- slight defects in shape and colour;
- slight defects due to rubbing and other
superficial defects not exceeding 2 sq.cm. Of the
total surface area, the defects must not affect the
flesh of the fruit.
Class II This includes bananas which do not qualify for 10% by number or weight of
inclusion in the higher classes, but satisfy the bananas not satisfying the
minimum requirements. The following defects requirements of the grade, but
may be there, provided the bananas retain their meeting the minimum
essential characteristics as regards the quality, the requirements.
keeping quality and presentation.
- defects in shape and colour provided the product
remains the normal characteristics of bananas;
- skin defects due to scrapping, scabs, rubbing,
blemishes or other causes not exceeding 4 sq.cm.
Of the total surface area;
The defects must not affect the flesh of the fruit.

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14. Label and packaging:

(a) For Export : For packaging bananas, telescopic boxes of 5

ply strength and of the following dimensions need to be used-
Telescopic card board fiber boxes and other materials-
Top = 48.25cm X 31.75cm X 20.25cm -5 ply
Bottom= 47.50 X 31.25cm X 19.75cm -5ply
Gap plate= 3 ply
Foam sheet or foam pad= 20mm thick, 38cm X 25cm size
with 10 mm holes Weight of final packed box is approximately
13.0 Kg
(b) For Domestic: Bananas are transported as full bunches
in trucks and are ripened at the destination and then cut into hands
and transported in plastic crates.

15. Payment terms: Along with the dispatched goods invoice statement is given with truck
driver. When the customer receives the delivery, he inspects the quality and quantity of
produce according to invoice statement. After delivery he hands over payment cheque (name
of produce, amount and price of produce, cash to be paid to producer) to truck driver, which
is later collected by INI, cheque is deposited and amount is withdrawn from respective bank.
[CITATION APE18 \l 1033 ]

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2.2 State and Industry Selection: -

We know, after mango banana is most important fruit crop in India due to some attributes like
availability throughout the year, taste, variety range, nutritive values it has become favorite
among all classes and second most important fruit crop of India.

[CITATION NHB18 \l 1033 ]

 Production and Productivity-

Note – Given Data is in Area (000’ HA), Production (000’ MT), Productivity (HA/MT)

Table 1: Productivity of Maharashtra.

STATE AREA (HA) PRODUCTION (MT) PRODUCTIVITY

(HA/MT)

2008 2009 2010 2008- 2009- 2010- 2008- 2009- 2010-

-09 -10 -11 09 10 11 09 10 11

Maharashtr 80.00 85.00 82.00 4960.0 5200.0 4303.0 62.00 61.17 53.50
a 0 0 0

[CITATION NHB18 \l 1033 ]

 Maharashtra State-

State Districts

Maharashtra Jalgaon, Solapur, Dhule And Buldhana.

[CITATION APE18 \l 1033 ]

 Important Cultivars- Grand Nain (G9), Cavendish Banana.
 Available Season- All over the Year.

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 Land-Banana can be grown on Rich loamy, deep soil with pH range 6.5 – 7.6 which is most
favored for banana farming. Soil for banana should have good drainage, adequate fertility
and moisture. Saline soil is not suitable for banana cultivation. A soil which have high
nitrogen content, adequate phosphorous level and plenty of potash which is rich in organic
matter and neither too acidic or nor alkaline is best for banana. As banana is basically a
tropical crop so it can be successfully grown in temperature ranging between 15ºC – 35ºC
and with relative humidity 75%-85%.
 Labor-There are many intercultural operations performed in banana which are useful for
successful growth of orchard i.e. Weed control, Desuckering, Intercropping, propping, leaf
removal, earthing up, bunch covering, removal of male bud flower thus labors are required
in banana farm to perform this types of operations the availability of farm labors in
Maharashtra is high and for various types of works as compared to work the wages are at
equal level. Wages given to labor are as follows
 Male labor-200-220/Day.
 Female labor-150-160/Day.

2.3 Supplier Selection: - (long list and short list)

Before selecting the supplier, the list of suppliers through long list and short list there are types
of supplier available in market-

1. Farmers
2. Company owned Farms
3. Merchants
4. Contract Farmers

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 Farmers

Company INI
Owned Merchants
Frams Farms

Contract
Farmers

Figure 1: Possible suppliers of INI farms.

 Long list
Here is a list of potential suppliers. We have made an analysis on basis of different
advantages and disadvantages of the particular in relation to their capacity of suppling
and our needs.
 Farmer: In banana the availability is all around the year but it will be better to buy in
bulk if we consider farmers in this condition not all the farmers available have big farms
which can sustain our demand.
 Contract farmer: They are one of the potential suppliers because if we want to have a
stable rate of supply and also a stable cost it is better to go with option even if the farms
are small there is more assurance by the farmers in consideration to supply
 Merchants: They have good contact with growers and also are able to supply bigger
quantities they can also be one of the potential suppliers, cost can be an issue sometimes
because in peak demand period they have more controlling power and may demand for
higher prices but this can be overlooked by the higher return in the export market.
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  Company owned farms: This is also one of the potentially best ways for supply since
most of the things are managed by the company. In terms of cost this is a best way since
most of the costs are transparent.

 Short list
We have given more emphasis on two important points that are supply assurance and
price incurred. On this basis we can select the top three possible suppliers.
 Company owned farms: The best possible way to procure will be exploiting the
company farms since they have more advantage over the traditional ways which are:
1. Costs in supply are transparent and manageable.
2. Assurance of supply is highest.
3. Quality product is assured.

 Merchants: The next best possible way is merchants they have the following advantages
1. Potential for supply is higher
2. When purchasing in bulk quantities possibility of bargaining
3. The company doesn’t need to waste resources for scouting for possible suppliers if a
comfortable merchant is available.
 Contract farmers: We are also considering contract-based farmer here since a contract is
fixed the farmers are needed to follow standard practices for production it assures better
quality
 Since prices are also fixed during the contract the risk of irregular fluctuation in prices is
lowered down.

Chapter 3.

Supply chain
3.1 Back end: -

 Contract farmers and company owned farms: For the procurement of banana the
company has this source which make the most of the back end of the company
 Having a variety of options for procurement reduces the risk for shortage of procurement.
The company provides various facilities to its farmer to maintain their trust with the
company and also this helps them in procurement of good quality of produce which is
important for fetching good prices.

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3.2 Front end: -

1. Processing plant: After the procurement the produce is directly brought to the company
processing plant where activities like cleaning, grading and sorting are done.

2. Cold storage: After proper processing the produce is brought for storage since the
product is easily perishable it is stored in cold storages.

3. Logistics: When orders are received the company moves their product through transport
to the destination i.e. from the storage to the ports or airports.

4. Importer: the produce is received by the importers at particular destinations and they
move the produce further.

5. Retailers: They receive the product from the importers and make them available to the
consumers.

6. Consumers: The chain ends with the consumers.

Figure 2:Supply chain of INI farms. [CITATION INI18 \l 1033 ].

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3.3 Risk Analysis: -

Here are some possible risks which the company may face

F
a
tm
h
PrS
e
lR d
k
sic
y
o
uM
g
In

Figure 3: Different types of risks.

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 1. Production Risk

There can be two types of risks in production in which one can be in farm and other in company.
The farm risk is related to probability of production that will be lower than desired yield this can
be due to various infesting pests and viral diseases. Not proper intercultural operations and some
suddenly arising weather conditions like drought that can affect banana yield, improper irrigation
facilities and failure in working of farm equipment’s. Another major risk is in company that
some small mistakes while grading and sorting are done by labors and those line workers that
can affect the quality of final product, improper handling of the raw material before process.

Some approaches to manage production risk-

 In Farm-
 The company can help the farmers to adopt risk moderating practices like drip irrigation
and modern equipment’s to overcome these problems.
 As we are doing contract farming so we can guide farmers in proper way to improve
practices and increase production.
 Company can help in crop insurance scheme of government for farmers to overcome loss
due to adverse conditions.

 In Company-
 Company can manage some training programs to workers under guidance of technicians
and officers so they can successfully carry out assigned tasks.
 The work should be limited and divided so overtime or extra work can avoided.
 Proper and timely maintenance of machinery to avoid delay in work like packaging,
washing, grading etc.

2. Market Risk-

Market risk includes the risk arises when price received by our product is less than expected
price. The market risk can arise due to growing number of competitors entering in market if
product can’t meet the desired standards of quality also due to fluctuation of prices in similar
product or due to wholesalers and retailers who are profit oriented.

 Approaches to Manage Marketing Risk-

 Company can create deep connection between core target customers or consumers to
overcome on the risk.

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 Dependence on single market can be reduced through marketing our product through
different channels.
 Updating new products, packing, and application solutions to reach new markets without
taking on more than they can effectively manage risk.
 Increase direct marketing efforts to capture a higher price.

3. Financial Risk-

 As all the business functioning in agriculture have major seasonality risk which
directly effects financials of the company for eg-during certain period of the year
there is great flucuation in the prices of raw material due to which the further
financial planning is affected.
 During the initial start of the export business the financial requirements are more so
the company has to decide on which points to focus the most.
 To create a good supplier profile it is necessary for the company to clear the bills as
early as possible to gain trust in the market.
 It is adviseable to start small and slowly gain pace in the business to get well versed
with the exports and build a good profile in the market which the people will trust.
 To coverup all the financal risk the comapny need to workout a good plan with each
of its financial details which helps the company to stay in limit and function
properly

4. Institutional Risk-

 With every change in the institution functioning in the country it directly affects the
business functioning in the country.
 As agriculture being a prominent business in India most of the institutions focus on
improving the overall agriculture situation in the county by introducing various policies,
tax reliefs and various other exclusions for the business in agriculture sector.
 But changes in certain economic policies also affect the business at a great extent.
 Obtaining licences and changes in other regulations introduced by the new government
can create difficulties for the company to comply by this regulation.

5. Physical Risk-

 As the company own multiple assets like trucks, warehouses, processing facilities they
are open to physical risks which are inevitable in nature. Other natural calamities are also
included in this type of risk which cannot be controlled.[ CITATION big18 \l 1033 ]

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Chapter 4.

Export Plan
4.1 Company description: -

INI farms is a total export-oriented company which focuses on producing quality fruits for
competing in the international market it is currently active in Pomegranate and Banana they are
present in the market under the brand name of KIMAYE.

It is located in Daund the region which is near to the main pomegranate and banana growing
districts.

They manage their own farms to ensure proper quality and on time supply, they have also
adopted contract farming and also help other quality growers by making proper market available
to them.

For both the fruits the company has best in class processing facility and they disseminate
excellent knowledge to their growers and maintain a well-managed supply chain to supply best
quality products over the market.

INI provide over 20% more premiums to farmers over prevailing market price which makes it
the only program with such high premiums.

The company is more farmers centric and believes in the overall development of the farming
community as a whole with same belief for the company.

[CITATION INI18 \l 1033 ]

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 4.2 Goals and Objective: -
4.2.1 Goals of company

1. Company has set its goal on becoming one of the best suppliers of Indian banana over
the international market.
2. It also has a goal to lead the Indian horticulture in way which brings prosperity to the
farming community.

4.2.2 Objective of company

1. To develop strong infrastructure to support better procurement.

2. Increase the number of products under their kimaye brand.
3. Create a suitable supply chain for the fluctuating market.

4.2.3 Goals for export

1. Create a particular niche in the market with special kimaye brand.

2. Enter into potential international markets

4.2.4 Objective for export

1. Research the international market

2. Formulate strategies for entry into potential markets.
3. Study the requirements of the market and make possible changes into the business
system for continue growth.

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4.3 Product Description: -

Domestic and international product

A) Unique selling attribute

Figure 4: Quality attributes of banana.

[CITATION INI18 \l 1033 ]

B) Typical profile of end users

 Costumer: Typically, banana is distributed once it is imported like any other fruit, but
there are several other industries which need banana as a raw material for preparation of
their products one best example is banana puree which is considered as good baby food,
it is also used by beverage companies for making flavoured shakes. In our condition we
have chosen complete banana fruit which can be either sent for direct distribution or can

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 also be used by the processing companies to make other products. So the end customers
will be food processing companies, retail shops and super markets.
 Consumer: Usually banana is favoured by most of the population, there is little to no
hassle while eating it can be consumed by everyone and prices also are not lavish making
it possible for everyone to buy and consume. With cost benefits and easy to consume it is
one of the most fully nutrition packed fruits currently available

C) Product modification

The company has not yet decided to follow any product modification.

D) Seasonality and life cycle

 Seasonality

 Banana is available all around the year and does not have any seasonal barrier. So the
export cycle continues with the production

Table 2: Seasonality of banana.

[CITATION APE18 \l 1033 ]

 Shelf life

 Since banana is climacteric fruit it continues to ripe fast after the harvesting the typical
total shelf life of an unripe banana is 28 days under normal condition.

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 Intellectual property protection

Protection Intellectual property Company

Trade Product name, logo INI Farms Ltd.

mark has its own brand
and trademarks
for its products
which cannot be
copied by others.

Copy right Writings, arts, photography, films, ads, web Other companies,
content etc. processers and
labellers can’t
copy the design,
Packaging
material, style
and other up
gradation made
by INI Farms
LTD.

Patent It is the form of intellectual property. They have no

patent for Banana
product.
Special processes, practices and operations.

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Growth potential

 Domestic market: Due to continuously increasing urban population in India which has a
diverse choice when it comes to food with variety fruits in their food basket there is lenient
increase in the fruit consumption in India. Banana has seen a continuous increase in the area
under production also the speciality of banana is that it is available all around the year and
has conquered a special place in the Indian consumer.

Table 3 Area production and productivity of leading banana growing states in India.

[CITATION APE18 \l 1033 ]

 According to the data there are many Banana growing states in India who are engaged in
production of export quality Bananas.
 Beside growing banana in traditional methods farmers prefer towards export quality
which made India largest producer of Banana which is an important commercial crop
taken in India.
 Banana can be grown in tropical and subtropical regions of India. It is advantage to
country as there is plenty accessibility of produce for export.
 If we interpret, this properly there is an opportunity for India to become leading exporter
of Banana in whole world.

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 Table 4: Major banana producing countries in world.

 India is the world’s largest producer of Banana which has major share 29.19% in total
production. Most of the produce is exported the major destination are UAE, Saudi
Arabia etc.
[CITATION APE18 \l 1033 ]
 The main problem with Indian agriculture is it still is not advanced and due to which
most of the production is not competitive in terms of quality.

Table 5: Export of banana from 2007 to 2008.

Year Qty.(MT) Value (Rs. Lac.)

2007-08 16,662.54 2,607.95

2008-09 30,401.46 5,545.47

2009-10 54,319.24 13,025.45

2010-11 57,539.29 10,232.22

2011-12 45,573.24 9,154.22

[ CITATION dgc18 \l 1033 ]

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4.1 Products research and development: -

 INI Farms (KIMAYE) is now focusing on organic productivity to decrease harmful effect
of chemicals.

 The team of INI farms is always trying to develop more efficient ways of producing their
existing products. This has become one of the key strengths of the organization.

 Company conducts research in order to improve fruit varieties, conducting taste-panels

and monitoring the use of agrochemicals in the growing process.

  This department oversees agronomy practices, product safety methods, packaging,

pesticide management and quality assurance, by establishing policies, providing training
and performance.

 R &D which has major role in development and helps in Continuous improvement
through research and innovation.[ CITATION ban18 \l 1033 ]

 Company is usually involved in guiding the farmers which is what makes it different
from other companies in India, it seeks to continuously take more and more number of
farmers under guidance so they can exploit their potential

 It provides various kind of services to the farmers who are involved with them which can
be considered as a new and quite needed approach in the current agriculture situation.

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  Developing new types of attractive packing to attract more and more sales

Figure 5: Packing of banana from INI [CITATION packaging \l 1033 ].

 The above image indicates the efforts taken by INI in making kimaye a different brand
than those already available in the market, this packaging is used for baby banana

Figure 6: Unique Telescopic cardboard fiber boxes [ CITATION packaging \l 1033 ].

 Instead of using traditional cartons for packaging purpose the company uses vibrant
colored easily distinguishable packaging material, thinking in a broader sense this kind of

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 changes indicates the effort the company is trying to make to enter new destinations and
their commitment.

4.2 New intellectual property protection: -

 Copyrights- Company has its own copyright protection registered, as they have full
right to change the display of product, make modifications and they can suit file case
against any company who are trying to copy their product or product modifications and
procedure or supply chain process under the act of copyright protection as per present
government.

 Patent: It is the restricting of other companies to copy the INI Farms (KIMAYE)
processing and its brand name. If any corporation use the products developed by the INI
Farms without permission, they can take legally action on that company. Once the new
product is developed, it will be register as per new government act.

 Trade Secrecy – trade secrets is the key of success of every institution it is confidential
part of company which includes information in the form of process, procedure and
supply chain which is strength of company on which success is based. Company has
legal bonds with their employees to not share any information which are top class secret[
CITATION ban18 \l 1033 ]

4.3 New foreign market analysis: -

1. Rationale for exporting country

I. Climatic factor affecting the domestic production

 UAE is a country located in the gulf region which can be considered as an adverse
region for domestic growers in the country itself. Due to this it is expected that the
country depends more on imports of basic food requirements and this holds true
in the case of UAE.
 UAE is constantly focusing on the domestic production to be increased but since
climate cannot be controlled which is a prerequisite for Agriculture the efforts are
seen to be failing.[ CITATION agr14 \l 1033 ]

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 II. Heterogeneity in the overall population
 UAE is a home to different nationality people which creates a wide market to
different types of products for different types of people.
 Also, there is a steady increase in the population. This can be seen as an
opportunity for placing the products in the market.

Figure 7: Country wise population in UAE [CITATION population \l 1033 ].

III. Superior network of supermarkets and hyper markets

 Unlike traditional markets super market is more concerned with the product
quality it been recorded that in UAE the supermarket structure has seen to
improve well.
[CITATION dub16 \l 1033 ]

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2. Rationale for exporting

I. Increased health awareness

 With globalization and dispersion of knowledge in the world more and more
people are getting in touch with the latest information about the major changes
happening around.
 One such benefit of globalization has seen in increasing demand of people for
fresh vegetables and fruit.
 Much of the increasing demand is also co related with the rising health
consciousness of the people.
[ CITATION sil15 \l 1033 ]
II. To claim the opportunity of providing fruits at a competitive prices
 Currently UAE imports most of its banana from the Philippines.
 If overall production is considered India ranks first but currently the production is
not export focused because banana enjoys good margins in the domestic market
and hence is supplied to the domestic market.
 Considering prices at a domestic level and prices at the international level export
market will have more scope with difference in the currency there are chances for
increased margins in the international market.
III. Ease of doing agricultural business in UAE
o The major imports in the country are in terms of food since not much of the land
in UAE is utilized for farming
o Due to its location it has various suppliers for agro products, the government in
UAE is in place certain benefits for the exporters to increase its food security.
o The government has a different authority which foresees the pricing of basic
agricultural commodities and makes sure all of them are in control.
[ CITATION eco18 \l 1033 ]

30 | P a g e
 3. COUNTRY PROFILE

I. Political
 Tolerant and stable market.
 Compared to other gulf countries UAE is more open minded and has tolerant
culture making it easy to do business in UAE compared to its other counterparts.
 More and more focus if given to make the provision for food security in the
UAE.
 The recent visit of Indian prime minister to UAE was after 34 years in August
2015 this led to intense development in cooperation in between India and UAE.
 India is the largest trading partner of UAE.
 UAE is the second largest export destination for India.
 Food products account for the main exported products from India.
 Indian population make the largest expatriates in UAE.
[ CITATION eco181 \l 1033 ]

II. Economical
 Previously oil and gas made most of UAE’s economy but today UAE has
managed to diversify its economy.
 Currently 71% of UAE’s income comes through non-oil sectors.
 UAE has a stable economy.
 The UAE is considered a stable economic growth market in the Middle East and
is not directly threatened by any global crises at the moment.
 According to the inflation rate chart, the inflation has the last couple of years been
under control, compared to the high inflationary pressure in 2007 and 2008. The
control of the inflation rate is indispensable in securing that laborers still find it
economically favorable to live and work in the UAE.
 There is an estimated US$ 8 billion UAE investment in India of which around
US$ 4.03 billion (Mar. 2016) is in the form of foreign direct investment, while the
remaining is portfolio investment. UAE is the tenth biggest investor in India in
terms of FDI. UAE’s investments in India are concentrated mainly in five sectors:
Services (10.33%), Construction Development (9.97%), Power (9.54%), Air
Transport (8.44%) and Hotel & Tourism (7.82%).
[ CITATION eco181 \l 1033 ]

III. Social

31 | P a g e
  UAE has a mix of different cultures and nationality which has impacted on the
overall social life of UAE.
 It has integrated various modern practices of lifestyle and is developed in all
terms.
 With variety of people living in UAE there are varieties in the lifestyle of people.
 UAE is also more concentrated on tourism specially luxury tourism.
 The per capita income of people is UAE is higher with which they are more
attracted towards healthy life style.
 With higher income available and stable inflation rate the population in UAE
enjoy multi cuisine of their choice.
 The heterozygous nature of the people living in the country has a direct demand
for different products.
[ CITATION soc18 \l 1033 ]

IV. Regulatory environment

There are different kinds of certificate required while importing goods into UAE
of which some of the required certificates for agriculture are given below:

A. Phytosanitary certificate: This is to certify that the plant(s)

 Product(s) described have been inspected and/or tested according to appropriate
official procedures, are considered to be free from quarantine pests, and conform
to Phytosanitary regulations of the importing contracting party including those for
regulated, on‐quarantine pest.

B. Country of origin certificate

 Health certificate: The goods are prepared under sanitary condition and fit for
human consumption Original documents are required at the time of the imports
the company can send their documents to the banks also Original invoice, bill of
lading and packing list is required to accompany the above‐referenced certificates
to meet documentation requirements of the Customs Authority for the release of
the shipment.

C. Custom procedures for agro products

 A precondition for the clearance of an import of any agricultural food product into
Dubai (the primary port which will be used for export into UAE) is the Import
Certificate from the Dubai Municipality.
 Similar Food Control and Environment Laboratories provide this function in each
Emirate. Also, for any food product that is to enter the UAE, there must be a
license granted to the consignee to trade in foodstuffs. Imports of agricultural

32 | P a g e
 products must be approved by the Food Control Section of the Public Health
Department of the Dubai Municipality.
[ CITATION imp18 \l 1033 ]

V. Fiscal taxation system

 As UAE is a GCC free trade area member, it therefore faces similar tax norms, rates
and procedures as the wider GCC. The customs duties for most items are calculated
on Cost, Insurance and Freight (CIF) value at the rate of 5%. CIF value will normally
be calculated by reference to the commercial invoices covering the related
shipment
 Customs duty is calculated based on the value of imported goods declared by the
importer or his agent.
 In addition to custom duty, UAE will be introducing a standard VAT rate of 5%
across GCC countries
 Effective as of 1 January, 2018. According to the VAT law basic food items will be
subject to a standard VAT rate of 5%. VAT is due on the goods and services
purchased from abroad. In case the recipient in the State is a registered person with
the Federal Tax Authority for VAT purposes,
 VAT would be due on that import using a reverse charge mechanism. In case the
recipient in the State is a non-registered person for VAT purposes, VAT would be
paid on import of goods from a place outside the GCC.
[ CITATION tax17 \l 1033 ]

VI. Infrastructure
 The infrastructure in UAE is one of the most modern in the middle east region it
serves as one of the most important import, export and re-export destination in the
world
A. Roads
 The UAE’s extensive road network connects each of the seven emirates and links
major transportation hubs and population centers. The road network also links the
UAE with neighboring Oman and Saudi Arabia, facilitating trade.
B. Aviation
 There are 7 international airports throughout the country and the UAE is home to
two major international airlines, Emirates and Etihad, as well as the two leading
low-cost airlines in the region, Air Arabia and fly Dubai. The emirate of Dubai in
particular has long focused on leveraging aviation to drive economic growth.
 The growth of aviation capacity throughout the country is set to continue with
expansions planned at several of the country’s airports, the biggest of which is the
development of Al Maktoum International at Dubai World Central, which, once
complete, will be the world’s largest airport.
C. Ports
 The UAE’s strategic location has not only allowed the country to become a global
aviation hub, but also a center for maritime activity and transportation. The

33 | P a g e
 country has numerous port facilities catering to general cargo, container shipping,
and the oil and gas industry.
 Most ports are located on the country’s Western coast, including the Port of Jebel
Ali, the world's largest man-made harbor and the biggest port in the Middle East.
The ports of Fujairah and Khor Fakkan are located on the Eastern coast and offer
direct access to the Indian Ocean without the need to navigate the Strait of
Hormuz.
D. Railways
 The Dubai Metro is the first urban train network in the GCC. Currently, the Dubai
Metro consists of 75km of track between its two lines and cost $8bn to construct.
An additional two lines are planned for the future.
 Etihad Rail will cover a network of approximately 1,200 km of track stretching
across the Emirates.
E. Telecommunications
 Infrastructure in the UAE is not just about transportation. Telecommunication
infrastructure in the country has been steadily developed and the
telecommunications sector accounts for a significant portion of the economy.
[ CITATION uni18 \l 1033 ]

4.4 Industry Profiles: -

4.4.1 Current market trends

 Fresh fruits are always in demand by the people and banana makes a good part of
this demand.
 Bananas are increasingly sold as whole fruit or can be processed for puree of
banana this is rapidly increasing among the consumers.
 India produces different types of varieties which are preferred by the Arabian
people, thus India has the ability to fulfill the need of people according to their
demand for variety, size, shape, color and quality etc.
 Awareness among youth that Bananas contain high amounts of rutin, a compound
that helps to maintain strong, flexible blood vessels.

4.4.2 Broadly identified direct Customers

1. Importers or Agents

 The company exports the produce to agents or importers. The agents who
approaches the exporters with different documents in which invoice is main

34 | P a g e
 which contains quality, detail of orders, after brief discussion and cooperation of
exporters rates and quantity is decided.

 After receiving the produce the importer repacks and makes changes as per the
demand of market and sell under own brand name. Importer has responsibility
send though within proper time.

2. Customers

 The main customers in UAE are Supermarkets, distributors.eg. Lulu

Hypermarket, Union Coop and Geant Hypermarket are the main customers on
whom the total population is depend of country. This mall is located in residential
areas for ease of consumers. For e.g. - Dubai, Abu Dhabi and Sharjah.

 Main features of Supermarkets and Hypermarkets-

1. Home Delivery Service.

2. 24x7 hrs. Supply.
3. Hypermarkets have extensively laid out counters.
4. Sprawling parking spaces & play areas for children.
5. Food court, Money exchange and bank counter.

4.4.3 Competitive analysis

  In India there are many companies who exports banana

Rank Competitors of INI Farms 7.99%

1. Fair Export India Pvt. Ltd.: 9.31%

2. Mayi Industries: 5.56%

3. Ambadi Food: 3.59%

 Comparison between INI Farms and Fair Export India Pvt. Ltd its competitor for competitive
analysis on the basis of strength.

35 | P a g e
 Fair Export India Pvt. Ltd INI Farms

Well established (Est year 1992) Availability of raw material throughout year

Higher overall export (9.31%) High rate of growth

Range of product available Have a startup attitude

 Comparison between INI Farms and its competitor Fair Export Pvt. Ltd farms for
competitive analysis on the basis of weaknesses.

Fair Export Pvt. Ltd INI Farms

Steady growth Percentage. Less product range.

Lack in ground level experience. Limited export destinations.

Less emphasis on farmers.
Less man power.

4.4.4 Overall competitive conditions

 In India there are many banana producing states which create an immense competition in
the domestic market at the same time in the export market there are many exporters who
are offering the same product.
 Not only domestic competition but international competition also acts as a prominent
factor in the international market.
 At this stage the exporter who is offering quality goods at a competitive price will be
more preferred
 One more factor is important which delivery of goods is regular
 The whole agricultural business is controlled by one major governing factor that is the
climate of the particular country during adverse conditions the competition will seem to

36 | P a g e
 decrease and only those who could make out of this conditions will compete in the
market.
 The fluctuation in supply will depend on all this factors and to sustain from this factors
different strategies have to be laid
 In terms of banana there is a good competition in the current export destination we have
choose

4.4.4 Existing competitors

Strengths, Weaknesses, Opportunities and Threats (SWOT) in the foreign market place:-

 Strengths: -

India is the largest producer of banana in the world. More than 27% of total banana production
takes place in Maharashtra and Gujarat states.

 Rainfall and humidity are quite less particularly in Maharashtra and also to some extent
in Gujarat state, resulting in lesser incidence of insects, pests and diseases compared to
Central and South America and South East Asian countries.[ CITATION APE18 \l
1033 ]

 A superior cultivar namely Grand Naine, well accepted in international market is being
cultivated in sizeable area in Maharashtra and Gujarat states.[ CITATION APE18 \l
1033 ]

 Banana is cultivated in sufficient average and in different agro-climatic conditions and

thus is in a position to meet the large demands from importing countries on a continuous
basis, provided planting and cultivation is well planned.[ CITATION ind06 \l 1033 ]

 Transfer of technology is easy as growers have organized themselves by forming

cooperatives/ associations and have branded their product as “Mahabanana”.

 Agro Export Zone for promoting exports of banana has been established in Maharashtra
in Jalgaon area.[ CITATION APE18 \l 1033 ]

37 | P a g e
 Post-harvest handling facilities are available at a small scale at Navsari and Borsad in
Gujarat state Banana Export Facility Center with mechanical handling system has been
set up at Saavada in Jalgaon and Basmantnagar in district Hingoli in Maharashtra state.

 India exports banana to UAE and Saudi Arabia without hurting the shelf-life of the fruit.[
CITATION con17 \l 1033 ]

 Weakness: -

 Exports of table bananas from India have stuck up because of the fact that
Philippines is able to supply in large quantities at cheaper rates with the
advantage that large banana plantations are owned by multinational companies and
are organized in a better way. Thus, we will have to organize properly and cut down on
costs for accelerating exports of banana.
 India is the world’s largest banana producer with a 23% share or 10.4 million tons of the
world production of 48.9 million tones. But India is absent in the world banana trade
which is estimated at 14 million tons worth $ 4.7 billion a year.
[ CITATION APE18 \l 1033 ]
 At present export of banana from India is limited to Gulf countries. Entire banana trade in
the world is through shipping by sea.
 The efficiency of Indian farmers to manage farms is quite less compare to other exporting
countries and immense amount of efforts are needed to change this.
 Proper infrastructure at current in terms of cold chain and logistics is still a point of
consideration in India.
 Some of the other big export companies have setup their business and are running
efficiently due to early arrival in the business they act as a competition.
 Opportunities: -

 To increase the sell by contracting with importers to ensure them will provide good
quality of produce according to their standards.
 Consumers are used to buying and consuming year-round temperate crops so bananas are
the good option to meet their demand.
 Company has opportunity to expand their global market for banana in India as well as in
overseas countries by developing communication relation.
 Market for Banana is quite promising in the UAE. Bananas import into the UAE
increased by 32.4%.

38 | P a g e
  Relation in between both the countries is good and various agreements have been made
by them to increase the import export business.
 More demand and higher prices for the same product in the international market
compared to the domestic market.
 Ease of doing business is more in UAE compared to any other middle east countries
 UAE also functions as a major re-export destination in the Middle East which may
increase the demand.
[ CITATION con17 \l 1033 ]

 Threats: -

 Threats from new entrants and existing rivalry exist. The companies like freshtrop fruits
and kaybee is well established in the export business.
 Unfavorable climatic condition like drought, excessive rain effect on the banana
production in such cases we could not fulfill the demand of international market as per
their requirement.
 Changes in the international policy and increased trade barriers.
 Unpredictable changes happened in the country and international market such as
demonetization and GST. It has great effect on the company and national economy.
 Certain epidemic diseases can cause bans on imports by the importing country on product
from the export country which has already happened in the case of banana from Kerla
due to spread of nipha virus.
 Various certificates and regulations are needed to be followed which makes the procedure
long and may cause loss of opportunities.
 Disputes may occur while doing business in an entirely new destination which should
also be worked out.

4.4.5 Unique Selling Attributes

1. Good shelf life of 10 to 12 weeks

2. Finger length of 7.5++ inches.

3. Available throughout the year.

39 | P a g e
 4. Color: - Ripe-Yellow, Unripe-Green.

5. Bananas are of Cavendish family.

4.4.6 Existing sources of production and channels of distribution

Figure 7: Supply chain of banana.

 Farmers, contract farmers and company owned farms: -For the procurement of
banana, the company has this source which make the most of the backward end of the
company. Having a variety of options for procurement reduces the risk for shortage of
procurement. The company provides various facilities to its farmer to maintain their trust
with the company and also this helps them in procurement of good quality of produce
which is important for fetching good prices.
 INI Farms: -After the procurement the produce is directly brought to the company
processing plant where activities like cleaning, grading and sorting are done. After proper

40 | P a g e
 processing the produce is brought for storage since the product is easily perishable it is
stored in cold storages. When orders are received the company moves their product
through transport to the destination i.e. from the storage to the ports or airports.
 Importer: -The produce is received by the importers at particular destinations and they
move the produce further.
 Retailers: -They receive the product from the importers and make them available to the
consumers.
 Consumers: - The chain ends with the consumers.

4.4.7 Marketing practices

Consumers mostly buy the value-added products and see the brand loyalty of the product. To
initiate our product into the market we can do marketing practices like advertising, creating
awareness, benefits.

1. Advertising is the best way to sell our product and lot of people prefer to buy products by
seeing an advertisement.

2. Creating awareness in the people about the product and tell the valuable things which is used
to their daily life and health consciousness.

3. Benefits of banana fruit are easy to digest, free from fat and cholesterol. it helps in reducing
risk of heal diseases when used regularly and is recommended for patient suffering from high
blood pressure, arthritis, ulcer, gastroenteritis and kidney disorders. These all benefits create
higher demand in the market.

1) Letter of credit. (L.C.)

Letter of credit is another type of payment term opted by importers and exporters, it is a safe
mode of payment in international trade for both exporter and importer. So LC is one of the safe
types of mode of payment in international trade. Letter of credit is an assurance given by the
buyer’s bank to remit the amount to the seller through seller’s bank on maturity, as per the terms
and conditions of document based on the contractual agreement between buyer and seller. Now
in simple words, If LC opened on your name, you will receive amount though the buyer’s bank
on the agreed time. All Letter of Credits for export import trade is handled under the guidelines
of Uniform Customs and Practice of Documentary Credit of International Chamber of
Commerce (UCP 600).

41 | P a g e
There are various types of letters of credits like Revocable, Irrevocable, Confirmed,
Unconfirmed, Clean & Documentary, Fixed, Revolving, Transferable, Back to Back etc. Most
common and safe LC is Irrevocable Letter of Credit.[ CITATION let19 \l 1033 ]

Figure 8: Letter of Credit.

4.5 Market entry strategies: -

4.5.1 Target customer profile

 Banana processing companies

 Supermarkets
 Importer
 Distributors

42 | P a g e
4.5.2 Who will they be?

 Super marketers like Lulu hyper market, Union coop, Geant casino, hyper panda,
Spinneys
 Smoothie making companies Barakat fresh for banana smoothie

4.5.3 Demographic characteristics

 The United Arab Emirates witnessed significant population increase during the past few
years because of major growth in the various economic sectors, which lead to influx of
workers from diverse cultural and religious background.
 From 4.1 million in 2005 to roughly 9.5 million in 2018. Out of this, the number of
UAE citizens is around 11.5% and the remaining 88.5% made up of Expatriate workers.
The largest group of non-UAE nationals are South Asian 59.4% (includes Indians
38.2%, Bangladeshi 9.5%, Pakistani 9.4%, others 2.3%), Egyptian 10.2%, Philippine
6.1%, other 12.8%.
 Female’s citizens and non-citizens account for 28% percent of the UAE'S population due
to the high level of male foreign workers. The majority of the UAE population falls in
the age group of 25 to 54 year old. A large part of this can be attributed to the expatriate
population of working men and women who fall in the age category.
 Population is heavily concentrated to the northeast on the Musandam Peninsula, the
three largest Emirates - Abu Dhabi (2.9 million), Dubai (2.7 million) and Sharjah (1.4
million), are home to nearly 75% of the population. 
[ CITATION population \l 1033 ]

4.5.4 Actual end users

 Asians are well known with banana as a fruit if we observe the demographic character of
UAE, we can see that most of the population residing in the UAE is Asian in which
Indians account for the most
 As banana is favored by most of the Asian population and is comparatively not a luxury
fruit it can be consumed by most of the people
 Banana is traditionally considered as a heathy fruit by the Asians and since devoured by
the Asians
 Banana is also used as food for babies since it is considered as a whole food and easy to
prepare for feeding
 Bananas contain three natural sugars – sucrose, fructose and glucose – giving you a fat
and cholesterol-free source of energy.

43 | P a g e
  As such, bananas are ideal, especially for children and athletes, for breakfast, as a
midday snack or before and after sports.

4.5.5 Purchase decision making

 Unlike other fruits in banana there are comparatively a smaller number of varieties and
factors for making a decision will depend of the type of people their tastes and for some
the quality
 It is also easy to consume a banana which does not require complex instruments for
peeling or cutting
 When fruits are bought normally banana are considered by everyone since it is available
all-round the year
 Banana is mostly recommended for all the people since it is considered as a whole food
 During fasting fruits and mainly banana is consumed by the people which can also be a
decision-making point for the buyers.

4.5.6 Total market size and future growth potential

 UAE for banana is mostly depended on Latin American countries, Ecuador, Philippines
and India
 Latin America and Ecuador are one of the most competitive counties in terms of the
banana trade
 In 2006 UAE imported banana in which the Philippines import accounted for around
95% and the Indian imports accounted to a mere 5 % but this rate has been seen to
continuously increasing
 The value of banana imported during the year 2005 was 49,509 tons and the
corresponding value was USD 22.9 Million.
 The quantity imported during the year 2006 was 210,379 and the corresponding value
was USD 34.54 million. The major exporting country was Philippines
with 95% of market share.

44 | P a g e
 Table 6: Imports of banana by UAE.

[ CITATION APE06 \l 1033 ]

4.5.7 Future potential

 India ranks 1st in the production of banana which accounts to 30% of the world
production but negligible amount of it was exported previously
 In the recent years the export of Indian banana to the gulf countries is increasing
 According to export numbers released by Apeda, India exported 65,844 tons of bananas
in 2013-14 against 45,573.23 tons in the previous financial year.
 Also, India has a huge potential for the exports of banana but is lagging due to high
demand for banana locally
 The main potential to the gulf countries rise due to the distance from Indian to the gulf
countries is less.
[CITATION gha18 \l 1033 ]
 New foreign market product description

a. Typical usage by the end users

45 | P a g e
  The end product is not processed and is simply raw banana. It is usually consumed
when it is ripped and colored yellow
 For baby feeding it is smashed so that it is consumable by infants with no teeth’s
 Also shakes and smoothies can be prepared from the whole raw banana
 Mostly eaten as a healthy snack or before or after sport activities
 It can also be consumed during fasting period to gain energy

b. Competitive advantages
 Potential of high production
 Good international relation in between India and UAE
 Comparatively close than other major exporting countries
 Member of SEDEX (company)
 Prominent and well known company
 High demand and mostly a common man’s fruit.

c. Product modification
 Currently no major modification is required but if modification is made in the
packaging in terms of making a highlighting statement on the packaging by which the
product can be recognized in the market can help in retaining costumers in the
market.

d. Product characteristics
1. Finger length: The edible part in banana is the finger a suitable length of the finger is
selected by the company which is around 7.5++ inches.

2. Shelf life: In normal storage the product can be kept for around 10-12 weeks.

3. Sweetness: Banana is preconditioned to be sweet the brix reading for kimayae banana is
18 brix.

4. Color: When the banana is available for sale it should be yellow in colour, which means
adequate ripening of the fruit which is suitable for consumption. Green colour banana can
also be sold according to the buyer’s requirement banana is an ethylene sensitive fruit so
it continues ripening even after harvest since we have to send the product to the export
market it is better to harvest it at the green stage Also green banana are used for preparing
banana chips which can be also considered.

e. Quality characteristics
The Bananas shall be of superior quality, the varietal characteristics must be present in
the banana. The fingers of banana must be free from deficiencies, very slight and

46 | P a g e
 superficial defects are accepted, the rubbing percent should not more than 2 sq.cm of the
total surface area they must not affect the flesh of the fruit.

f. Product specification standards

1) HACCP: Hazard Analysis and critical control points

HACCP Certification Number of INI Farms:

Registration Number: 4411214390122

HACCP certification is an international standard defining the requirements for effective control
of food safety. HACCP certification gives commitment to the customers for producing or trading
in safe food.

It is built around seven principles:

 Conduct Hazard Analysis of biological, chemical or physical food hazards

 Determine critical control points
 Establish critical control limits, for example, minimum cooking temperature and time
 Establish a system to monitor control of Critical Control Points
 Establish corrective actions
 Establish procedure for verification to confirm that the HACCP system is working
effectively
 Establish documentation and record keeping

[CITATION oss18 \l 1033 ]

2) FSSAI- Food Safety and Standards Authority of India

47 | P a g e
FSSAI Act is related to the Food Safety and Standards Authority of food and to regulate their
manufacture, storage, distribution, sale and import, to ensure availability of safe and wholesome
food for human consumption.

The main objectives of FSSAI:

 To promote general awareness about food safety and food standards.

 To provide scientific advice and technical support.
 To provide training program to food entrepreneurs.
 To set procedure and guidelines for accreditation of laboratories.
[CITATION fss06 \l 1033 ]

3) ISO certification

ISO Certification Number of INI Farms:

Registration Number: 4428114390122

ISO International Standards make sure that products and services are safe, reliable and of good
quality. They help to give various strategic tools that reduce the costs by minimizing waste and
errors and increasing productivity. Companies are able to access new markets, level the playing
field for developing countries and facilitate free and fair global trade.

48 | P a g e
The main objectives are as follows

 Proper documentation and records

 Systematic control over the process
 Smooth operation
 Absence of error
 Reduced reduction rate
 Consistency in output
 Improved customer satisfaction
 Trust is earned from clients
 Increased return on investment
 Marketing opportunities

[ CITATION wha18 \l 1033 ]

4) GLOBALG.A.P. Certified-

GLOBALG.A.P. Certificate Number of INI Farms:

Registration Number: 4052852035637

GLOBALG.A.P. is a farm assurance program, translating consumer requirements into

Good Agricultural Practice. EurepGAP is a common standard for farm
management practice created in the late 1990s by several European supermarket chains
and their major suppliers. GAP is a condensation for Good Agricultural Practices. It is
now the world's most widely implemented farm certification scheme. Most European
customers for agricultural products now demand evidence of EurepGAP certification as a
prerequisite for doing business.

Objectives of GLOBALG.A.P. Certified-

i. To assure that food has been grown using recognized level of Quality and Safety.
ii. Ensures that it has been produce sustainability in that way to respect health.

49 | P a g e
 iii. The safety and good health of workers involved and provides animal welfare.
iv. To give higher revenue to farmers farm.
v. To improve hygiene and farm safety

 Labelling, packaging, marking, language

 Packaging (a) For Export: For packaging bananas,

telescopic boxes of 5 ply strength and of the
following dimensions need to be used-
Telescopic card board fiber boxes and other
materials-
Top = 48.25cm X 31.75cm X
20.25cm -5 ply
Bottom= 47.50 X 31.25cm X
19.75cm -5ply
Gap plate= 3 ply
Foam sheet or foam pad= 20mm
thick, 38cm X 25cm size with 10 mm holes
Weight of final packed box is approximately
13.0 Kg
(b) For Domestic: Bananas are
transported as full bunches in trucks and are
ripened at the destination and then cut into
hands and transported in plastic crates.

 Languages used for packaging For labelling Arabic language must be there
on packs, for convenience the Arabic English
is preferred.

 Units of measurement
 Kilo-grams
 Tons/M. T
 Labeling requirements  Product type
 Product name
 Lot Identification Number
 Batch code
 Net Weight in metric units
 Certification details
 Name of manufacturer & Country of
Origin.
 Storage conditions

50 | P a g e
  Name of exporter

Seasonality and life cycle of the product or service

 Season-Banana is available all around the year and does not have any seasonal barrier. As
soon as procurement of raw material is done the export cycle is carried out through the year.
 Storage and Life Cycle-
Banana is stored at 13.3-15ºC temps.
Relative Humidity 90- 95%
Storage Period 4-6 weeks
Banana is climatic fruit it continues to ripe fast after harvesting the typical total shelf life of
an unripe banana is one month under storage conditions.

 Foreign intellectual property protection

Types of What can be protected Maintenance When to apply

protection of rights

Copyrights Packaging design and No fee is At any time

Labeling information, required after
style used by company registration.

Patents Unique practices used in Pay annual fee Before launching

Diced mango production for the duration product into the market
or processes which are of 20 years.
carried out during the
process.

Trademark Logo &the brand name Pay fee after Before or after launching
that is registered and every 10 years the mark into the market
trademark used by Daulat for renewal
Agro Pvt. Ltd.

Trade secrecy Secret techniques, N.A. N.A.

knowledge, processes,

51 | P a g e
 formula which is an
advantage to the business
of company

 Pricing strategies

a. Export cost analysis

 There is no fixed cost while exporting it depends on various factors and changes from
exporter to exporter. For the profitable working of the firm it is necessary to work out
the export cost. It is usually worked out by calculating the expenses incurred in the
process.
 Basic factors that contribute to the cost are: -
1. Raw material cost
2. Labour
3. Taxation
4. Transport
5. Packing
6. Storage and warehousing
7. Export procedure cost
8. Customs cost
9. Sampling and testing

b. Pricing constraints
 In a competitive market it is necessary to have a competitive price for the product we are
offering. There are different companies which bring the same product to the export
market the exporter should work out the competition and asses what the competition is
offering.
 It is also necessary to study how individuals in the foreign market perceive price of the
product.

c. Legislation
Currently there is no legislative control on the price of fruits.

d. Current market pricing

 The banana retail price were 4.83AED in year 2017 currently the prices prevail from 6.52
to 7.80 this is due to continuous increase in the demand for fresh fruits around UAE.

 Sales and promotion strategies

52 | P a g e
 a. Pricing Strategies

INI farms subjects to exports banana to importer in efficient way. After getting a required order
from importer, INI Farms starts to complete it by packaging of banana in Telescopic card board
fiber boxes and other materials, weight of final product box is about 13-15kg/box. As order
specifications of the importer are completed all packed is exported through cargo from Jhawarlal
Nehru port, Mumbai. As, banana is perishable fruit and has lifecycle up to 35 days. The banana
is transported within 20 days. INI farms exports banana in bulk quantity at 13ºc temp throughout
the transport. For efficient service company has done some contracts with international logistics
agencies such as FedEx, DSV.

b. Promotional methods

Promotions are the part of marketing that specifically involves communicating company or
product information to targeted customers. Today’s world is based on three major steps
Advertising, Public relations and personal selling. Maintaining goodwill with the public is an
important long-term strategy for both small and large companies the evolution of the Internet and
related technologies has given rise to digital and collaborative promotional methods. Email
marketing, online advertising and mobile advertising have all become major and suitable
components of promotional campaigns. INI Farms is collaborated with Future Group which
helps in table promotion and online is done by APEADA.

c. Advertising Availability

Successful advertising can be done through new media forms to promote a product. But,
traditional advertising forms still work which is major part of company’s advertising includes
Billboards, Newspapers and magazines etc.

Company is also advertising in through different channels they registered in various e-commerce
sites like and APEDA. When the company officers participate in international exhibition they
distributed pamphlets, flyers.

d. Promotion Tools

The four main tools of promotion are advertising, sales promotion, public relation and direct
marketing. Promotion helps to communicate the company’s message across the consumer.

53 | P a g e
As company is working together with Future Group which is key promotional way in domestic
market and we send banana samples to importers with clear specifications.

Sales Promotion activity can have many objectives for example, to grip attention of new
customer, reward the existing customer, and increase consumption of occasional users. Sales
promotion is usually targeted at the brand switchers.

Public Relations are much different than the Ads they are more realistic and influence position of
the product. It consists News articles, events and stories so can be believed easily public relations
are much more cost-effective tool than any other promotional activities.

e. Promotional Quotes
“Building-KIMAYE’S-Healthy-Sustainable-Socially Impactful-Society”.

Figure 9: Promotional quotes of INI.

f. Performance bonds and guarantee documents

A performance bond is issued to one party (exporter and Importer) of a contract as a guarantee
against the failure of the other party (Importer or Exporter) to meet obligations specified in the
contract. It is also referred to as a contract bond. A performance bond is usually provided by a
bank or an insurance company to make sure a contractor completes chosen orders.

54 | P a g e
[ CITATION che18 \l 1033 ]

g. Communication

INI Farms has registered on linkedin.com & has its own website also so Importers or buyers can
communicate them through email and also contact numbers are provided company has regional
offices where one can register their complaint regarding product and modifications.

https://www.linkedin.com/company/ini-farms/

http://www.inifarms.com/contact-ini.html

 Logistics & Transportation: -

a. Timelines between order processing and delivery: -

 Generally, the season is throughout the year as most of the population in UAE love eating
bananas. As, there are some religious festivals celebrated whole year in which bananas
has major ethics and values.
 Some major festivals Eid Al Fitr and Eid Al Adha are celebrated with great enthusiasm in
the UAE which has more values of fruits in which people prefer bananas during fasts.
 So, generally company starts getting orders from month of June to October end.
 INI Farms starts contacting the supervisors of particular areas so they can visit the farms
to procure all raw materials from the contract farmers and also contract other merchants if
they require in bulk. After getting order from the importer it requires about 12 hrs. from
field to the processing unit.
 After banana reaches it is kept to normal the temperature and next day processing starts
like washing, cleaning etc. after packing and packaging is done on same day and it is
ready to fly 3rd day morning reaches to Chattrapati Shivaji International Airport,
Mumbai. From where it would be ready to fly for Dubai International Airport.
 It takes around 7 hrs. to reach the airport then importer collects all produce from airport
and further sends for storage and distributes as per the demand.
 And for remaining year produce is sent in small amount as per the market demand.

b. Negotiated delivery terms – Incoterms: -

 While negotiating delivery terms INI Farms prefer DAP Delivery at Port Incoterm.

c. Requirement & Availability of warehouse: -

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 Company has 800MT cold storage at processing plant which is the largest in vicinity. The
storage house is well built and equipped with modern technologies which help to avoid
entry of other damaging factors. For preservation of produce temperature of storage
house is maintained between 12ºC - 14ºC.

d. Inventory Control Method: -

 FIFO (First in- First Out) - It is the important principle in Inventory management in
which seller sells his oldest stock first not newest stock. As our product is perishable so it
is most applicable principle which can help to avoid unsellable spoilage.

e. Freight Insurance Requirements: -

 It gives protection against the loss or damage of ships, cargo, terminals, and any transport
like sea by which the property is transferred, or held between the points of origin and the
final destination.
 Generally, INI Farms prefers Marine insurance which covers losses due to following-
Natural disasters like cyclone, earthquake, lightning, etc., Man-made disasters like theft,
violence, and piracy of ships, Collision, overturning or derailment of land conveyance
Sinking or stranding of ships, Expenses such as survey fees, forwarding costs, and
reconditioning costs.

f. Methods of transport: -
 The banana is perishable product and required cold temperature between 12ºC - 14ºC to
maintain the quality of product and reduce spoilage of goods. Our product is being
exported through ship ways. After packaging is completed the telescopic card board
boxes are transferred to refer container in which well temperature is maintained and
transported to Jawaharlal Nehru port, located in Mumbai. All legal process is completed
and then containers loaded in cargos and are exported. Totally care is taken that to reach
safely within time to desired destination.

g. Usage of professional service intermediaries: -

 Person or consultant who acts as mediator link between two parties who arranges
business deal is called as service intermediaries.
 INI Farms don’t use such service for their business as they are one of the major exporters
of Banana from India and has own contracts with supermarkets and Importers.

h. Documentation: -
1. Commercial Invoice -It consists of

56 | P a g e
 i) Information on the exporter and the importer (name and address)
ii) Date of issue
iii) Invoice number
iv) Description of the goods (name, quality, etc.)
v) Unit of measure
vi) Quantity of goods
vii) Unit value
viii) Total item value
ix) Total invoice value and currency of payment. The equivalent amount must be
indicated in a currency freely convertible to Euro or other legal tender in the
importing Member State
x) The terms of payment (method and date of payment, discounts, etc.)
xi) The terms of delivery according to the appropriate Incoterm
xii) Means of transport
2. Customs value Declaration- It also consist legislation
3. Freight documents- It depends on means of transport, here waterways
i) Bill of lading
4. Freight Insurance
5. Packing list
6. Certificate of Inspection
7. Customs Import Declaration
8. Lab test report
9. Health certificate
10. Phytosanitary certificate
11. Shipping bill for export

This are the major documents required for export in UAE.

i. Packaging & marking requirements: -

The following information is MANDATORY on the food label:

1. Brand name
2. Product name: a summarized description of the food product.
3. Food ingredients: arranged in a descending order according to the weight or volume. All
ingredients should be listed.
4. Production & expiration dates of all products, except those which are exempted from
displaying the validity or expiration dates, such as fresh produce.
(The only accepted format of dates is: dd/mm/yyyy, for products with a shelf life
longer than 3 months.)
5. Name of the food manufacturer, packer, distributor or importer
6. Net weight or volume.

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 7. Country of origin should be declared clearly and should be specific. For e.g. Is not a
country of origin!.
8. Product’s barcode
9. Lot number.
10. The language of the label should be Arabic and English.
 The minimum requirement for the Arabic information on the label or sticker are:
a. Product name.
b. Food ingredients.
c. Country of origin.
d. Storage conditions (if applicable).
e. Instructions for use (if applicable).
f. Nutritional information (if applicable).
11. Storage conditions.
12. Mentioning the ingredients which may cause hypersensitivity
13. Instructions for using the product.

[ CITATION imp18 \l 1033 ]

4.6 International law: -

4.6.1 Dispute resolution consideration

In this case we are following Arbitration some of the reason to choose this are as follow

 Quickness: Definitely, arbitration is quicker than litigation. Process of arbitration can be

completed as fast as the concerned parties’ desire. Under Arbitration Act, the arbitrators
have to make the award within four months from the date of completion of all
proceedings. Usually, arbitration is settled within a period of four months to one year.
 Inexpensiveness: Total incidental expenditure in arbitration is always much lower than
litigation. Arbitration fees are around 2% of the claim value or less in institutional
arbitration.
 Promotes Goodwill: As the arbitrator is chosen by both the parties, based on their faith
and his competence, arbitration becomes a normal process of goodwill. Arbitration
proceedings and its outcome do not disturb the existing friendly relations between the
exporter and importer.
 Choice of Appropriate Arbitrator: As the arbitrator is chosen by both the parties and
name incorporated in contract, which has the knowledge of customs and procedures of
international trade, so separate expert witness for educating the judge does not arise.
 Privacy: Arbitration proceedings are not open to public. Arbitrator’s award is not
published in any newspapers. This preserves privacy of the parties. So, trade secrets as
well as disputes arising from the contracts do not become public.

58 | P a g e
  Venue: As arbitration does not require to be present at a specific place any one the
exporter or the importer can decide where should the procedure take place

4.6.2 Language consideration

English can be used for the procedure as it is easier for both to follow.

4.6.3 Contract terms and condition

i. Incoterms
An incoterm represents a universal term that defines a transaction between importer and
exporter, so that both parties understand the tasks, costs, risks and responsibilities, as well
as the logistics and transportation management from the exit of the product to the
reception by the importing country.
Incoterms deal with distributing responsibilities and obligations between two parties.
The buyer and seller pre-define the responsibilities and obligations for transport of the
goods.
The various things that are worked to be worked out are:
 Point of delivery: here, the incoterms defines the point of change of hands from seller to
buyer.
 Transportation costs: here, the incoterms defines who pays for whichever transportation
is required.
 Export and import formalities: here, incoterms defines which party arranges for import
and export formalities.
 Insurance cost: here, incoterms define who takes charge of the insurance cost.

 Our choice of incoterm

DAP (delivery at place)

..

59 | P a g e
 Figure 10: DAP Incoterms.

 If we look at the above figure it explains about cost and risk that are involved the
international business
 In DAP most of the risk are obligated to the seller so he has to work out how is he
going to fulfill the terms
 He has to bare all of the cost till the goods are delivered at the buyers decided place.
 This gives the seller opportunity to have control over the cost which is involved but at
the same time it increases the risk which the seller has to bare.
 These risks are high in a developing country but this is not the case for UAE.
 Here the company has to bear certain risks but this can be counter by saving cost.
 The buyer can also counter this incoterm since it gives the buyer very less influence
over the cost this can be true for some buyers.[ CITATION how16 \l 1033 ]

a. Currency of payment and exchange rate

 Indian rupee is used for payment purpose the current rate of exchange for the AED to
INR is 1AED =19.39 RS
 The whole process will be bank guided since letter of credit method is used for payment
which also reduces risk.

b. Method of payment

60 | P a g e
  Letter of credit will be used for payment purpose.
 It is the best possible way to build a good relation with the buyer and also decreases the
risk in business since for a new export destination not always confirmation with the
importer will be possible.
 Accurate and correct guidance and documents are required while doing this transaction
which will help in smoothing the transaction.

c. Product standard
 According to the given specification in the export product standards are laid and included
in the contract.
 Colour of the banana will be green for increased shelf life after import.
 After ripening the colour will change to yellow.
 Around 7.5 ++ inches length of the finger.
 Sweetness will be 18 brix.

d. Insurance
 Since the export destination is far away insurance is followed this reduces the risk and,
in any uncertainty, helps in minimizing the loss.

e. Warranties
 No warranties are included in the contract

f. Product liability
 According to the law laid down by the government of UAE the person who is responsible
for distributing and suppling the goods are liable
 As banana are not pre-packed when exporting during exports proper care is taken to make
sure nothing dangerous is encounter in the order.
 In this case it is decided to supply banana to retailers and distributors the company is not
liable in any instance

4.6.4 RISK MANAGEMENT

1. Country risk

 Political risk: Comparing to other countries in the Middle East UAE is considered as
more open-minded country. Trade relations of India and UAE are strong and seem to be
continuously improved.

61 | P a g e
  Economic condition: previously the whole economy was considered to be oil centric but
in the previous years it has diversified. After the diversification of the economy now the
country is more stable than ever.

2. Commercial risk

While entering in a new destination the commercial risk is high, proper precautions are
needed to make sure everything is under control. Including bonds and making proper
contracts which make both the parties assure of the deal is important. In depth analysis of
the market and the potential buyers is needed to ensure no such problem arises.

3. Currency risk

 The fluctuation in the currency exchange may have a good or a bad influence on the
business, it needs professional advice to make the company secure of such risk. The
lowering in value may occur due to certain factors in the country so it important for the
seller to sell in such countries which this risk is minimum.

4. Internal risk

 This risk is very important and should be given more emphasis. Considering the
production, it is important to have all the factors worked out. For different kinds of task,
it is important to have sufficient amount of employs. It is very important to have a good
working attitude among each and every personnel in the company. Unions and strikes are
one of the major risks that a company can face. The current technological advancements
are taking place at a higher pace it is important for the company to stay update with this
advancement and make proper use if they lack in this it may lead to loss of opportunities
in certain cases.

5. Marketing risk

 There are several other countries who grow banana and also export them when a
particular market is open for export everyone has their own offers this competition may
lead to decrease in price since in every country the cost of production may vary. So in a
international market the company faces such kind of marketing risk which may lead to
the receiving lower prices.

A. EQUITY AND LIABILITIES

1 Shareholder funds
a. Share capital
7,251,070 6,929,410

62 | P a g e
 b. Reserves and surplus
148,529,099 150,462,848
c. Total
155,780,169 157,392,258

3 Non-current liabilities

Long term borrowings 21,874,986 40,297,612

Other long term liabilities 2,097,222

Long term provisions 5,642,933 4,391,381

Total 29,615,141 44,688,993

4 Current liabilities
a. Short term borrowings
b. Trade payables 275,061,225 139,346,585
• Due to small
enterprises
152,254 1,890,877
• Due to others
157,870,496 193,762,808

c. Other current liabilities 56,179,476 83,227,201

d. short term provisions

998,567 3,966,772

TOTAL 498,562,018 422,194,243

Total Equity and Liabilities 683,957,328 624,275,494

B. ASSETS

1 Non-current assets
a. Fixed assets
1. Tangible assets 266,401,902 203,957,273
2. Intangible assets
3. Capital work in progress
4. Intangible assets under 14,770,771 14,582,345
development

63 | P a g e
 b. Deferred tax assets
c. Long term loan and advances 60,000 1,362,565
d. Other non-current assets
0 75,000

0 0

5,983,116 6,358,698

41,586,206 64,216,702

308,801,995 290,552,583

Total

2 Current assets
a. Inventories
b. Trade receivables 50,104,833 93,390,877
c. Cash and cash balances
d. Short term loans and advances
e. Other current assets 176,523,655 148,580,710

55,354,011 57,134,953

11,658,573 8,017,292

61,514,261 26,599,080

355,155,333 333,722,912
TOTAL

Total of all Above 683,957,328 624,275,495

64 | P a g e
Chapter 5.

Financial Analysis

Consolidated Balance sheet as per 31 Mar, 2018.

5.1 BALANCE SHEET: -

STATEMENT OF PROFIT AND LOSS

Particulars For the year ended For the year ended

31st march, 2018 31th March, 2017

A CONTINUING OPERATIONS

1 Revenue from operations 0

 Sale of Goods 769,036,526 771,323,448

 Other operating income 34,539,245 26,952,730

2 Other Income 9,141,789 3,472,057

Total 812,717,560 801,748,235

65 | P a g e
 Expenses
a. Cost of material consumed
b. Changes in inventories and 475,128,739 640,644,111
work in progress.
c. Employee benefit expenses
d. Depreciation and amortization 42,052,590 16,835,897
expenses.
e. Amortization and biological 81,174,504 84,434,250
asset.
f. Other expenses 30,614,396 14,334,963

8,646,472 10,491,573

268,017,826 7,390,239

TOTAL 919,866,62 994,714,304

3 Loss Before Tax 107,149,062 192,966,070

 Share capital

As at 31th As at 25th
March,2018 July, 2017

Particulars Number of Rs. Number of Rs.

shares shares
a. Authorized
Equity 600,000 shares 600,000 6,000,000 600,000 6,000,000
of 10 each with voting
rights
b. 2,00,000 preference
share of Rs 10 each 200000 20,00,000 2,00,000 20,00,000
Issued Subscribed and fully
paid up capital :

Equity 525,448 shares of 10 5254,48 5,254,480 525,448 5,254,480

66 | P a g e
 each with fully paid up

167,493(0.001%) 167,493 1,674,930 167,493 1,674,930

compulsorily convertible
non-cumulative preference
shares of Rs 10 each.

32,166 (0.001%) 32,166 3,21,660 32,166 3,21,660

compulsorily convertible
non-cumulative preference
shares of Rs 10 each

TOTAL 7,251,070 6,929,410

Reconciliation of the number of shares and amount outstanding at the end of the reporting
period:

As at 31th As at 25th
March,2018 July, 2017

1. Equity share of Rs Number of Rs. Number of Rs.

10 each shares shares
a. Shares Outstanding at
beginning of the year 525448 5,254,480 525,448 5,254,480
b. Share issued during
year -- -- -- --
c. Share outstanding at
the end of the year 525,448 5,254,480 525,448 5,254,480
2. 0.001% compulsorily
convertible non-
cumulative
preference shares.

67 | P a g e
 a. Shares Outstanding at 167,493 1,674,930 98,872 988,720
beginning of the year

b. Share issued during -- -- 68,621 686,210

year.

c. Share outstanding at 167,493 1,674,930 167,493 1,674,930

the end of the year

3. Compulsorily
convertible non-
cumulative
preference shares

a. Shares Outstanding at -- -- -- --
beginning of the year

b. Share issued during 32,166 321,660 -- --

year.

c. Share outstanding at 32,166 321,660 -- --

the end of the year

5.2 Details of shares / Name of shareholder: -

Particulars of shareholder holding more than 5% of shares or class of shares

As at 31st March, 2018 As at 25th July, 2017

Class of share and /Name of Number % holding Number of % holding

shareholder of shares in that shares in that
hold class of hold class of

Equality shares of Rs 10
each, fully paid by-

Unilazer alternatives 155,521 29.60% 155,521 29.60%

ventures(LLP)

68 | P a g e
Pankaj Khandelwal 128,304 24.42% 128,304 24.42%

Purnima Khandelwal 84,485 16.08% 84,485 16.08%

Avishkaar Venture trustee 83,318 15.86% 83,318 15.86%

PVT. Ltd.

5.3 Short –term burrowing: -

Particulars As at 31st March. 2018 As at 25th March, 2017

In Rs. In Rs.

Secured

Working capital loan from 70,000,000 27,500,000

finance company

Unsecured

Working capital loan from 205,061,225 111,846,585

finance company

Total 275,061,225 139,346,585

5.4 Trade payable: -

Particulars As at 31st March, 2018 As at 31st March ,2017

In Rs In Rs
a. Total outstanding due of
micro and small 1,452,254 1,890,877

69 | P a g e
 enterprises.
b. Total outstanding due of
creditors other than micro
and small enterprises
157,870,496 193,762,808

Total 159,322,750 195,653,685

5.5 Short term- provisions: -

Particulars As at 31.03.2015 As at 25.07.2014

Provision In Rs In Rs

Provisions for employees

benefit.
a. Provisions for 833,739 579,292
Gratuity
b. Provision for leave
encashment 164,828 148,095

Other provisions-
a. Provisions for sales
return. -- 3,239,385

TOTAL 998,567 3.966,772

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5.6 Long term- provisions: -

Particulars As at 31.03.2015 As at 25.07.2014

Provision In Rs In Rs

Provisions for employees’

benefit.
c. Provisions for 4,982,029 3,709,941
Gratuity
d. Provision for leave
encashment 660,904 681,440

Other provisions-
b. Provisions for sales
return. -- --

TOTAL 5,642,933 4,391,381

5.7 Other Expenses: -

Particulars As at 31st March. 2018 As at 31th March, 2017

In Rs. In Rs.

Labor expenses 26,496,379 35,570,695

Freight and handling 145,801,458 119,550,188

charges

Business promotion 2,034,905 4,543,959

expenses

Lease rent 19,065,246 32,287,800

Repair and maintenance 29,838 8,369

a. Building 1,120,660 1,476,868

71 | P a g e
 b. Machinery 4,738,235 6,624,647
c. Others

Electricity and fuel expenses 4,709,288 5,513,062

Travelling 5,800,639 9,640,813

Communication expenses 2,163,359 2,940,537

Legal and professional fees 5,892,934 8,799,821

Insurance 1,218,974 1,484,956

Auditors remuneration 1,865,780 1,418,000

Printing and expenses 537,826 860,548

Rates and taxes 342565 807016

Provision for doubtful debts 24,821,002 6,841,378

Bank charges 1,206,562 871,183

Sundry balances 2,663,874 2,542,510

Fixed assets 11,242,469 --

Loss on sale of asset -- 1,567,201

Foreign exchange loss -- 1,195,755

Provision of doubtful 2,61,064 5,909,139

receivables

Miscellaneous expenses 6,004,769 3,800,656

TOTAL 26,8017,826 254,255,065

72 | P a g e
Chapter 6

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