Executive summary
Bangladesh is an agriculture-based country. For many years Bangladesh produced Large amounts of vegetables. Every season our farmers Produce different types of vegetables.I am Mr.Eram Islam. My business plan is to Good Agricultural Product like vegetables export from Bangladesh to Europe and Middle East markets. My company name is “Green veg export Ltd”.For this business,I will procure vegetables from local farmers ,then it will be processed and Export the product to foreign countries and Earn foreign currency. For this business, I need a large amount of capital, office, staff, and Storeroom. and most importantly some legal documents and membership.For Export business I must follow some procedures, including product sourcing, Storing, sorting, washing, packing, shipping, loading, unloading, Customs clearance, Product delivery, and payment.
Business Description
Different types of Vegetables and their Destination
Bangladesh is one of the most vegetable-exporting countries in the world.Approximately 70 items of vegetables are exported from Bangladesh worldwide. Initially, my goal is to export a small number of vegetables, and then I will be expanding the business a few years later. My target export vegetables are Potato, Cabbage, Cauliflower, Carrot, Brinjal, Green chilli, Coriander leaf, Teasel gourd, Bitter gourd, Bottle gourd, Turnips, Radish, Bean, Ladies finger, Pumpkin etc.
My target export destination is Europe and the Middle East market. Some European countries are Germany, the United Kingdom, France, Italy, Netherlands, Spain, Belgium, Sweden, Denmark, Greece, etc., and some Arabic countries like KSA, UAE, Kuwait, Qatar, Oman, Bahrain, and Jordan.
Marketing
1.Buyer Communication
Buyer finding is one of the most challenging acts for export business. i can contact the buyer following this way:
1)Trade Fairs and Exhibitions: To attend international trade fairs and exhibitions that focus on agriculture and food products.
2. Chambers of Commerce: To get membership in chambers of commerce and many trade associations which must be related to agriculture and exports. If I continue a good relationship with this association, it can help me to get potential buyers.
3. Export Development Agencies: Liaise with authorised agencies and export development councils such as the Bangladesh Agro-Processors Association and Export Development Bureau which can help in finding potential buyers by providing knowledge about the export market.
4. Participant Conferences: Attending business conferences and seminars which help to build a good network with the buyers.
5. Professional Website:create a professional website.This website will have a list of all export products.There will also be commercial document,approvalsVegetable quality,vegetable origin details.Finally the contact medium must be added in the website.The website information will be updated regularly.
6. B2B Platforms: Register on B2B marketplaces such as eWorldTrade, Alibaba,Global Sources: DHgate, EC21, Etsy,mkWholesale. Using these platforms I can find, list products, and connect with buyers globally.
2.Deal with buyer
To ensure that my vegetables follow the international standard of the target market.Proper packaging should be done so that it maintains freshness during transit and tries to completely fulfil the buyer’s requirements.
3.Terms and Conditions
1.Pricing: the price of the product must be such that the buyer and seller agree.The price of the product must be competitive.The price must be determined in such a way that covers all costs.
2. Payment Terms: Always try this type of payment system which is easy to transition. The most popular transition system is Letters of Credit (LC).Using this payment system, importers send money to exporter accounts through the banking system, which is very safe and secure for buyer and seller. The bank acts as a Third party.
Management
- Documents
Exporting vegetables from Bangladesh to worldwide markets requires a variety of documents to ensure compliance with international trade regulations and to facilitate smooth transactions. Here are the key documents typically needed:
1 Trade License: A valid trade licence from the local municipal authority is required to conduct business legally.
2. TIN Certificate: For export business Tin certificate needed. The National Board of Revenue(NBR) provides this tax identification number(TIN).
3. Proforma Invoice: An initial invoice provided by the exporter to the buyer, detailing the goods, quantities, prices, and terms of sale.
4. Commercial Invoice: A detailed invoice that includes the description of goods, quantities, prices, terms of sale, and payment terms.
5. Certificate of Origin: Issued by a recognized authority such as the Chamber of Commerce, this certificate verifies the country of origin of the exported goods.
6. Export Permit: Specific permits may be required for certain vegetables, especially if they are subject to export controls or quotas.
7.Phytosanitary Certificate: This certificate Issued by the Department of Agricultural Extension in Bangladesh confirms that the vegetables meet the importing country’s health and safety standards.
8.Quality Certificate: Certificates from recognized quality control agencies verifying that the vegetables meet specified quality standards.
9. Inspection Certificate: Issued by inspection agencies confirming that the goods meet the buyer’s specifications.
10. Letter of Credit (L/C): A financial document issued by the buyer’s bank to the exporter, guaranteeing payment upon receipt of the goods.
11.Insurance Certificate: A document proving that the shipment is insured against loss or damage during transit.
12. Customs Declaration Form: A form required by the customs authorities, detailing the goods being exported and their value.
13. Packing List: A document that itemises the contents of each package, including the weight, dimensions, and type of packaging used.
14. Bill of Lading (B/L): A shipping document issued by the carrier that details the goods being shipped to the port of origin and the port of destination.
- Initial stage of business management
- Office Setup
➤Office space rent
➤Furnishing.
➤ Equipment (computers, phones, printers)
- Infrastructure
➤Renting or building a warehouse, cold storage units, equipment.
➤Packing and Processing Equipment.
➤Cleaning,sorting,grading, packing instruments.
- Operational
➤Salary for all employees in my office.
➤The container charge,Freight charge and Transport cost.
- Procurement Costs
➤Purchasing vegetables from local farmers or local suppliers.
- Marketing and Sales
➤ Marketing and Promotion,Trade fair,Advertising, and other promotional
activity.Sales And Distribution,Establishing sales network,Distributor agreements.
Operations
1.Sourcing of vegetables:
Sourcing is the process of Scratch, Analysis, and dealing with the suppliers who provide products for a business purpose. It is related to identifying the best sources from which to obtain these products, negotiating terms and conditions, and also confirming the quality and reliability of the suppliers.
Sourcing of vegetables for export is related to some key steps which are to provide better quality vegetables, agree to some terms, and conditions and have successful delivery to international markets. There are some a comprehensive method for sourcing vegetables for export:
- Market Research
➤Identify Demand: To analyse which types of vegetable demand are higher in international markets.
➤Analyse Competitors: To analyse how many competitors are in this market and decide a proper price for surviving in the market.Must follow many tricks and strategies to survive with the competitor.
- Supplier
- Search for supplier:
.Local Farms and Cooperatives.
➤Online Directories.
➤Government agencies.
- Supplier Verification
➤Quality Checks
➤Certifications
➤ Reputation
- Establishing Contracts
➤Negotiations: Discuss and agree on pricing, delivery schedules, payment terms, and
quality standards.
➤Contracts: A detailed contract paper should documented with all terms and
conditions, including penalties for any compliance
- Quality Assurance
➤Standards: Always keep the product to an international standard.
➤Inspections: My employees regularly inspect the farm. Also monitor the different
stages of vegetables from harvesting to packaging
➤Training: should provide training facilities for farmers and workers so that they are
skilled in handling and packaging to meet export standards.
2.Sorting and grading
Sorting: Select good quality vegetables, free from disease, pests, and physical damage.
Grading: vegetables should be graded by size, weight, and ripeness and must ensure uniformity in each package.
3.Cleaning and Pre-Cooling
Washing: use clean water for washing vegetables. Wash vegetables clearly so that they remove soil, pesticides, and contaminants.
Drying: Ensure vegetables are dried properly after washing to prevent excess moisture, which can lead to spoilage.
Pre-Cooling: Vegetables should be stored in a cool place immediately after harvesting to maintain freshness. This is called pre-cooling. Pre-cooling of vegetables to remove field heat and extend shelf life.Common methods of pre-cooling include hydro cooling, vacuum cooling, or forced-air cooling.
4.Packing
To deliver fresh and undamaged vegetables to various destinations, the export vegetables need to be properly packaged. So pack the products properly, not only will it keep the quality of the product but it will also abide by international standards and regulations.
Packaging Materials
Use hardy and ventilated boxes which are made of materials like cardboard or plastic. packing should be properly done so that the box can be easily handled and transported. Each Box should have a pressure capacity of at least 4-5 tons.
Use liners such as plastic or wax paper and padding materials like foam or paper to protect vegetables from contusion
Packing Process
Layering: Packing the vegetables with enough padding otherwise, they will get damaged. Keep the product at a temperature between 37 and 41 degrees depending on packaging and texture to prevent many types of rotten
Ventilation: Stocking produce in properly ventilated packaging will promote airflow and prevent internal humidity traps and ethylene gas from causing your produce to ripen too quickly.
Label packages with details like the type of vegetable, weight, grade, and date of packing. Include barcodes or QR codes for traceability and inventory management. Ensure labels completely with the importing country’s regulations, including language, nutritional information, and origin.
5.Storage
Storage of vegetables normally after packing of the product. Once the vegetables are packed, they should be transferred to a freezer. Storage temperature and humidity can be different for specific types of vegetables to prevent spoilage and maintain freshness.Leafy Greens: 0-3°C (32-38°F),Root Vegetables: 0-5°C (32-40°F),Tropical Vegetables: 12-14°C (54-56°F)
6. Shipment process
- Local Transport
It should arrange a reliable transport to move the vegetables from the processing unit to the port of export.Must be used refrigerator trucks necessary to maintain the cold chain.
- Customs Clearance in Bangladesh
➤Submit Export Declaration:Should submit the export declaration documents to the Bangladesh Customs Authority.
➤inspection: The customs authority will inspect the shipment to verify that it is complete.
➤Payment of Duties and Taxes: Pay any applicable export duties and taxes.
➤Obtain Export Permit: Ensure all required export permits and clearances are obtained.
- Booking Shipping Space: The shipping container should be booked for storing vegetables. The container must be refrigerated so that the product can not rancid.
- Loading for Shipment
Load the vegetables into refrigerated containers to maintain the required temperature during transit.Ensure that the containers are pre-cooled before loading.
7.Delivery to Buyer
After the product reaches the destination, the product is cleared by the national customs service. A final quality check at the time of delivery to ensure that the vegetables arrive in good condition. The customer receives the product and takes this product to the customer’s storeroom in a refrigerated vehicle.
8.Payment
There are a few ways to pay money from seller to buyer. These are Letter credit(L/C), Advanced payment,Documents against payment, and open account. Some payment terms follow during the transaction.
First of all, The seller sent the performance invoice to the buyer. The details of the product profile can be listed there. It includes Vegetable type, Its gross weight, price, delivery term, payment method, etc.
The buyer applies to the bank to open the letter of credit(L/C) and Submit all Documents. The documents needed for an open Letter of credit (L/C) are a Purchase order, Trade License, Tin Certificate, VAT certificate, Import registration Certificate, L/C amount, and L/C application form.
After 2-3 days the Bank verifies all documents and opens the Letter of credit. The buyer’s bank issues an L/C in favour of the exporter, guaranteeing payment upon fulfilment of certain conditions.Finally the buyer bank releases payment to the exporter bank.
Financial statement
Source of funding
Starting a vegetable export business from Bangladesh requires significant capital, and finding the right source of financing is crucial. To take loan 7 crore from the bank 10% interest for 3 years.
Initial cost
| Cost | Amount(BDT) |
| Business Registration | 10,000 |
| Export Licence | 10,000 |
| Other certificate/Documents | 30,000 |
| Cold storage instrument | 300,000 |
| Packaging equipment & material | 200,000 |
| Transport vehicle | 100,000 |
| Office Setup | 200,000 |
| Stuff & Employee Salaries | 250,000 |
| Equipment for cleaning, sorting,grading | 300,000 |
| Total | 1,500,000(BDT) |
Calculation:
Export 200 metric tons of mixed vegetables annually.
Average selling price in Europe: $3500 per metric ton.
Production cost per metric ton: $1,000.
Exchange rate: 1 USD = 113 BDT
| cost | Per metric ton cost | 300 metric ton cost |
| Production cost | $1000 | $300,000 |
| Processing and packing | $400 | $120,000 |
| Logistics & freight | $400 | $120,000 |
| Regulatory compliance | $100 | $30,000 |
| Marketing & Sales | $150 | $45,000 |
| Total cost | $2,050 | $615,000 |
| Total cost (BDT) | 231,650 (BDT) | 69,495,000 (BDT) |
Total Selling per metric ton vegetable $3,500
300 metric ton vegetable total selling = ($3500*300)
=$1,050,000
=118,650,000
Net Profit=(Total sell-(Total cost+investment cost)
=118,650,000-(69,495,000+1,500,000)
=47,655,000 BDT
First-year annual Profit= 47,655,000 BDT
Bank loan= 7 core with 10% interest for 3 year
Interest=principal amount ×interest rate×time
=(70,000,000×0.1×3)
=21,000,000 BDT
Total pay amount of bank 3 Year=(70,000,000+21,000,000)
=91,000,000 BDT
Total pay amount of bank 1 year =30,333,333 BDT
Total merginal profit =(Net profit- Bank lone)=(47,655,000-30,333,333)
=17,321,667 BDT
| Year | 1st year | 2nd year | 3rd year | 4th year | 5th year |
| Annual profit (BDT) | 17,321,667 | 18,821,667 | 18,821,667 | 49,155,000 | 49,155,000 |
| Total | — | — | 153,275,001 | — | — |
5 years total income approximately 15 core,32 lac,75 thousand 1 taka only.
To improve the marginal profit, a few things needed.First of all the export product amount is increased,then provide premier quality product,and reduce the production cost.
SWOT Analysis(Strength,Weakness,Opportunity,Threat)
Strength
Bangladesh is a tropical country. Our land is very fertile and we find different types of vegetables all the time. On the other hand, our country’s labour cost is much cheaper than other countries. It has a great impact on production costs. Nowadays Bangladesh farmers are more conscious of their profession, The Government and many NGO provide technical and financial help. Also, many private institutions can be involved in agriculture development. At this moment Bangladesh’s agricultural product has high demand in the European market. Vegetable exports are a great chance to increase our foreign reserves. It also creates employment.
Weakness
Our country has two major ports but unfortunately, the infrastructure of these ports is not adequate for exporting large-scale products. Product transport, storage, loading, and unloading facilities are inadequate.
On the other side, the European market is more strict in product quality and standards. The technology is not advanced in our country. Our country’s farmers use old methods of farming.Vegetable export business is a very recent concept in Bangladesh, we should work on branding and marketing.
Opportunity
Day to day the demand for fresh vegetables is increasing in the European market. At this time organic vegetables are more popular in Europe. Bangladeshi farmers can take a chance on organic farming. It is a potential sector for the country. International relations and agreements should be developed between European Union countries and Bangladesh for the development of vegetable export business. Apply modern technology in agriculture and increase production.
Threat
One of the major challenges in vegetable export is competitors. There are some highly competitive countries such as India, China, and some African countries. Political issues are a great threat to export business. Recently, the Russia-Ukraine war has had a great negative impact on the international Trade market. Climate change is an important issue all over the world, especially in low-lying countries. Climate change has had a major impact on the agricultural sector. Droughts, floods, storms, and other natural disasters disrupt agricultural production.
Appendix
-Market research report:To communicate the buyer for product export.
-Regulatory certified authority:To provide the permission of a business to also certify the product.
-Financial planning and template:Details of investment cost,production cost and marginal profit.