Chris Zemlak Heather Sherstobitoff Heather Sherstobitoff Jason Kuchinka Jason Kuchinka Kimberly Russell Kimberly Russell Jennalee Ecklund

Introduction  Natural beef slaughtering and processing plant  Federally Inspected  Located in Saskatchewan  Producer owned  Slaughtering 31,200 head a year

Location & Distribution of Cattle in Sask.

Operations Plan

SitePlan

Slaughter

Processing

Carcass Traceability  Producers sign affidavits  Random testing  Each carcass traced from arrival at plant and put into bar-coded boxes  This system uses CCIA tag numbers as references to trace back each box to the producer it came from

Capital Budget

Cost of Goods Sold

Gross Revenue

Producer Payments  Receive $500/head upon delivery of cattle  Once SNBP receives payments from customers producers get paid the remaining amount owing:  Total carcass value- $500 initial payment- SNBP 6% fee – Cost of goods sold

Cattle Hooks  SNBP is a custom slaughtering plant  One hook = the right to slaughter one animal/year  Leased for $100  Minimum of 50  Last for 4 years  Can also purchase shares – entitles investor to 200 hooks

Human Resource Plan

Organizational Structure

Salaries  President$100,000  Management$80,000  Supervisors$50,000  Clean Up Supervisor$30,000  All Employees are entitled to 3 weeks vacation and benefits in addition to their yearly pay.

Wages  Office Staff $10/hr  Slaughter Employees$11/hr  Processing Employees$14-$17/hr  Floor Workers$9-$10/hr  Maintenance Employee$17/hr  Yearly Cost for all employees including benifits 2.68 million

Classes of Shares  A - $50,000  200 hook spaces  Voting Rights  Preferred Shares  B - $100  Common Shares

Marketing Plan

Market Analysis Number of steers marketed in the Maple creek area in 2004

Customer  Cattle producers within 250 km  Have to be will to change management practices  SNBP must demonstrate that greater revenues can be achieved

Producer Profits Comparison of producers options: What does it cost to feed these animals to fat weight??

Producer Profits Difference in gain not using implants Value of animal at various premiums

Producer Profits Producer revenue after all facts are considered:

Competition

Yearly Objectives  Year 1  10 weeks of production at 65% capacity  Year 2  Full year production at 80% capacity  Year 3  Maximum capacity reached and sustained

Marketing Mix  Product  Natural Beef, which contains no hormone implants or antibiotic use  Price  Sold for a premium of 5-35%  Place  Vancouver, Quebec, and Ontario  Promotion  Producer owned, ensuring excellent raising conditions and beef quality

Channels of Distribution  Demand on time delivery  Producer is responsible for making delivery arrangements to plant  Delivery of boxed beef is transported by trucking company  Company is responsible for all transactions of boxed beef from loading bay to retailers

Selling & Advertising  Product and advertising aimed at domestic retailers  Informative web page to inform retailers on health issues  Distinguish natural beef by advertising techniques  Create positive company image

Marketing Managers  Manager 1  Responsible for all selling and advertising beef  Face to face sales visits with retailer managers  Arranging contracts with grocery stores  Manager 2  Meetings with producers  Attract producers to SNBP

 Reduced fluctuations in producers revenue due to premium status  Continually growing market for healthier food products  Current direct competition in Maple Creek area for cattle producers is low  Location of plant supports good brand development and image  Large market potential in urban centers Opportunities

 Producers not wanting to change management strategies  Larger upfront cash payment at auction marts and traditional sales channels  Government increasing regulations on natural beef standards  Changes in consumption trends  Cattle disease outbreaks – BSE, Foot and Mouth Disease Threats

Marketing Budget

Financial Plan

Financing Budget  Total Financing Required = $10,053,767  Financing:  Long term bank debt = $5,895,000  Owner Equity (Class A & B Shares) = $3,250,000  Revenue from initial leased hooks (60% of total hooks leased) = $1,440,000  Total Financing = $10,585,000  Year 2 – Meat Processing Investment Rebate

Financial Summary

Risk Analysis  No true critical variables  Producer accepts most of the risk  Processing fee is most critical variable but SNBP has control over this

Questions