Chapter 1

SUMMARY OF THE PROJECT

A. The Enterprise
A.1 Name of the Enterprise
The

cooperative

is

named

ThermaBlocks

Producers

Cooperative

(TPC)after the name Therma South, Inc.(TSI) which isthe Aboitiz Company initiating
this community-based social enterprise for Barangay Binugao, Toril, Davao City and
Barangay Inawayan, Sta. Cruz, Davao del Sur.
ThermaBlocks is compounded from Therma- and Blocks.
Firstly, Therma- is derived from the Latin term thermaeor Greek term
thermerelating to the presence of heat. The termis an allusion to fly ash or Coal
Combustion Product (CCP) that TSI generates as a by-product from its coal power
plant. TPC aims to generate an innovative, Green Technology (GreenTech) product
using such waste by-product as its primary raw material.
Secondly, the term -Blocksis suffixed as an allusion to the Construction
Industry, specifically the Concrete Products Sector to which TPC will operate as a
cooperative. More so, the term-Blocksspecifically refers to hollow blocks, the
GreenTech product that TPC will primarily produce for the Davao Market.
Put together, ThermaBlocks Producers Cooperative is a community-based,
social enterprise that produces hollow blocksprimarily from coal-generated flyash.

A.2 Corporate Logo of the Enterprise

TPCs logo features four important
aspects of the company: (1) the leaves, (2)
house, (3) the buildings, and (4) the inclined
Figure 1.1 TPCs Company Logo

arrangement.

Firstly, the leaves allude to the fact that TPC is a GreenTech company that
offers environmentally friendly product. Leaves are representative of new beginnings,
the same as how TPC will be the first cooperative to offer hollow blocks mixed with
coal-combustion products.
Secondly, the house alludes to the fact that TPC is a community-based, social
enterprise. That is to say, it will primarily operate in both Barangay Binugao and
Inawayan. Its green color alludes to the core and nature of TPC which is unlocking
growth for these communities as a Corporate Social Responsibility (CSR) project of
TSI.
Thirdly, the buildings allude to the target market of TPC which are large-scale
private construction and real estate firms and government units. But lastly and most
importantly, its inclined arrangement (with the house placed first and inclines
diagonally towards buildings) alludes to its prioritization of growth: to start with
community-based growth. The inclined midrib of the leaves is a symbol of TPCs
dedication to inclusive growth that focuses on smaller communities and eventually
rippling such growth to the bigger society.

A.3 Overview of the Enterprise

As a BUSINESS ENTERPRISE:
TPC aims to generate sustainable profits that allow the cooperative to grow.
Furthermore, it operates to provide innovative, high-quality, GreenTech products to
the larger society. Specifically as a cooperative, it is targeted to improve the lives of
its members through seminars and trainings, financial assistance, and convenient
access to good concrete products.
As a GREEN TECHNOLOGY ENTERPRISE:
TPC aims to forward environmentalism through converting fly ash (TSIs
waste product) to high-quality concrete hollow blocks available to the Davao market,
most especially to the members of the cooperative. Given the rising trend of
environmental protection, TPC seeks to capitalize on its GreenTech products in order
to boost its market demand.
As a COMMUNITY-BASED, SOCIAL ENTERPRISE:
TPC aims to provide value to the two barangays its chosen beneficiaries
through employment opportunities, numerous trainings and seminars, availability of
affordable, high-quality products, and its 6% community development fund. It gives
high regard to unlocking growth especially for local rural communities. Increasing the
economic activity in these barangays improves the propensity for future investment
especially for multinational companies, specifically real estate and construction
companies.

B. Location
AHCs office and plant site are both located along the national road of
Inawayan, Sta. Cruz, Davao del Sur which is approximately 20-24 kilometers away
from downtown Davao City. The location was chosen primarily because of its
proximity to the source of fly ash and target beneficiary barangays.
The transportation would be convenient given that the target location is along
the national highway. The location also offers visibility of the plant site. The roads are
cemented and delivery trucks will be available to deliver the products to customers
located anywhere in Davao. Other factors considered for choosing this location
include level of competition, existence of local labor market, and plans for future
growth.Fora detailed discussion on the factors considered, see Chapter 2: Marketing

Inawaya
n

Aspect, A.2: Place.

<insert site map>
C. DescriptionDefinition of the Project
The project proponents of this Project Feasibility Study (PFS) are fifth year
BS-Accountancy students from Ateneo de Davao University, namely:
1.
2.
3.
4.

Venus Derla
Ralph Alonzo Tobias
Rikk Nicholson M. Nalzaro
Hazel Bergantinos

5.
6.
7.
8.

Sean Ezekiel Ao
John Paul S.Juaban
EllahGaudicos
Angelene Aries Amar

9.

The engagement team is composed of potential future management

consultants, technically trained in numerous fields like Financial, Management and

Cost Accounting, Capital Budgeting, Economics, Marketing, Strategic Management,
Business Law, Information Technology, and Finance.Furthermore, the team has a
member with a Minor in Finance, and some of the members have already competed in
a national equity research competition. More so, one of the members have also
competed in a national-level, simulated Management Advisory engagement hosted by
SyCipGorresVelayo& Company (SGV & Co.), one of the leading auditing firms in
the Philippines.
10. NAME

11. POSITIONS TAKEN

13. Project Leader

12. Venus Derla

15. Head, Organization and Management Aspect

17. Vice-Head, Technical Aspect
19. Assistant Project Leader

18. Ralph Alonzo Tobias

21. Head, Proofreading, Editing and Copy-reading

23. Vice-Head, Socio-Economic Aspect
25. Communications Officer

24. Rikk Nicholson M.

Nalzaro

30. Angelene Aries Amar

27. Head, Marketing Aspect

29. Vice-Head, Organization and Management
Aspect
31. Head, Company Research
33. Vice-Head, Marketing Aspect
35. Head, Socio-Economic Aspect

34. Hazel Bergantinos

40. EllahGaudicos
44. Sean Ezekiel Ao

37. Head, Defense

39. Vice-Head, Proofreading, Editing and Copyreading
41. Head, Technical Aspect
43. Vice-Head, Company Research
45. Head, Financial Aspect

46. John Paul S. Juaban

47. Vice-Head, Financial Aspect
48.
Figure 1.2 Internal Organizational Structure
49.

The feasibility study aims to establish whether a community-based,

social enterprise generating fly-ash-mixed hollow blocks in Barangay Binugao, Toril,

Davao City and Inawayan, Sta. Cruz, Davao del Sur is market-wise, technically,
financially, and socio-economically feasible or not. The results of the study are
reasonably derived from extensive analysis over a span of approximately three
months.
50.

The feasibility study focuses on Davaos Construction Industry,

specifically the Concrete Products Sector. Such sector, and reasonably the industry as
well, have not yet reached its full potential. Qualitative research shows that while
Davao is one of the relatively developed cities in the Philippines, it is still
economically growing. According to the Department of Trade and Industry, real
estate was the top investment for the first three quarters of 2015. Therefore, a
continuous demand can be expected aside from the fact that the firm is able to
compete with its unique product.
51.

An extensive industry analysis is provided through a comparative

Product Life Cycle Analysis as well as a Porters Five Forces Analysis (See Chapter
2: Marketing Aspect, C.1.1& C.1.2 Factors affecting Demand: Product Life
Cycle Analysis,andFactors affecting Demand: Porters Five Forces Model
respectively).

52.

The enterprise is encouraged and recommended for three important

reasons: (1) it forwards redistributive inclusive growth, (2) it is environmentally

relevant, and (3) it unlocks numerous opportunities to multiple sectors of the
community.
53.

Firstly, it forwards redistributive inclusive growthspecifically

because it is a CSR project of Therma South Inc. As a community-based, social

enterprise, its financial and non-financial benefits are primarily and largely targeted to
such barangaysinstead of private firms. While most of the Filipino taxes are largely
fueled to few developed cities in the Philippines, a cooperative is non-taxable in terms
of business income. By implication, the enterprise forwards inclusive growth by
ensuring that growth is no longer as exclusive as it is in status quo to those already
relatively developed communities.Instead, the enterprise redistributes the potential
taxes directly from source to local, rural communities that have lower economic
activities.
54.

Secondly, it is environmentally relevantas to how it converts fly ash

by-products into high-quality concrete products. TPCs unique component is fly ash,
a by-product of coal-fired power plants which is already classified as waste without
any specific purpose for the plant anymore. Converting such Coal-Combustion
Product (CCP) contributes to waste disposal management thats crucial especially
given that fly ash is a waste product that only increases either a company storing costs
or the worlds global trash, if ever its disposed of. Waste management, among other
initiatives, is part and parcel of environmental activism thats already a rising trend in
the global world.

55.

Lastly, the enterprise unlocks numerous opportunities to multiple

sectors of the community. Beyond the employment and technical training made
available to two selected barangays, the enterprise generates high-quality products
that are easily accessible to the Davao market especially to close-proximity buyers
situated near the plant site. Its community development fund directly provides cash
benefits to barangay units as part of its Ash to Cash (ATC) Program,pledging 6% of
its net income to be donated to the two barangays. The reserve and expansion funds
also allow the members of the cooperative to push for greater growth through
expanded operations in the future. Lastly, private institutions and government
agencies are provided GreenTech products that are of high-quality and at reasonable
costs.
56. D. Long-range Objectives
57.

Within the next ten years, the cooperative aims to:

1. Obtain and maintain a major share in the Davao market

2. Positively contribute to the well-being of people in BarangayBinugao and
Inawayan
3. Expand the community-based social enterprise to the next adjacent barangays
(Barangay Sirawan and Darong) after the fifth year of operations
4. Maintain business profitability and expand operations
5. Promote fly-ash products as viable construction materials and spread awareness of
its environmental benefits

58. <insert specific objectives on size, capacity of production, volume of sales, net worth,
role in industry and economy>
59. E. Feasibility Criteria
60.

E.1 Market Feasibility

61.

There is market feasibility.

62.

There is ample demand in the Davao market (on average, theres a 5%

excess of demand over supply) and competition exists in the industry powered by the
growing Davao and Philippine market. The market can achieve competitive position
through four key determinants on product, price, place, and promotion, specifically:

Product it is innovative and unique, environmental, has outstanding compact

strength, and allows private firms to apply for tax breaks

Price the products arerelatively affordable,adapting a competitive pricing

strategy that sells at the industry price average of Php 14.00

Place theconvenience of the location for deliveries, proximity to target
beneficiaries, and visibility to prospective buyers contribute to market

feasibility and competitive positioning, among other reasons

Promotion a penetration strategy will be implemented which lowers the
initial price, coupled with advertising,capitalization on potential taxbreaks and
incentives for buyers, and constant communication with Therma South Inc.
and the Department of Trade and Industry
63.

Aspect.

A more detailed analysis is available in Chapter 2: Marketing

64.

E.2 Technical Feasibility

65.

Important considerations under technical feasibility are the following:

(1) continuous availability of fly ash and (2) existence of machinery needed.
66.
67.

E.3 Financial Feasibility

There is financial feasibility.(right????????????)

68.

Important considerations to determine financial feasibility are the rate

of return, payback period, and risk involved. Methods of financing were also
considered.
69.

<Explain in a concise manner if feasible or not>

70.

<Guide questions: it the project profitable? Is the project risky?

maam rhea morales>

71.

Furthermore, the project has a lot of risks (strategic, operational, legal,

market, political) but almost all potentially pervasive and probable risks are related to
being a start-up company. These risks, however, can be effectively mitigated through
company policies. A detailed risk analysis was performed using a Risk Matrix
Analysis (see Chapter 4: Financial Aspect, Risk Matrix Analysis).
72.

<Guide questions: Whats the rate of return? Is there availability of

sources of funding? maam rhea morales>

73.

A more detailed analysis is available in Chapter 4: Financial Aspect.

74.

E.4. Socio-economic Feasibility

There is socio-economic feasibility.(right????????????)

75.

76.

Considerations were (1) environmental impacts of the project (2)

effects to the livelihood and well-being of the people in Barangay Binugao and
Inawayan.
77.

<Explain in a concise manner if feasible or not>

78.

<Guide question: does the project provide benefits to the people of the

community? maam rhea morales>

79.

A more detailed analysis is available in Chapter 5: Socio-Economic

Aspect.
80.

E.5 Organization and Management Feasibility

There is socio-economic feasibility.(right????????????)

81.

82.

Considerations were (1) organizational structure, (2) staff training, and

(3) operations efficiency.

83.

<Explain in a concise manner if feasible or not>

84.

<Guide

question:

whats

the

appropriate

business

organization/structure? Are there available training program for staff? maam rhea
morales>
85.

A more detailed analysis is available in Chapter 6: Organizational

Aspect.

86. F. Highlights

87.

F.1 History of the Project

88.

The project feasibility study was initiated through the assistance of the

Department of Trade and Industry (DTI).The communications officer was introduced

to ___________, the Assistant Regional Director (ARD) of the Region XI Office of
DTI, via the efforts of Mr. ArrielNengasca, _____________, and Mr. Romeo ______,
_____________.
89.

DTI oriented the engagement team ofTherma South Inc.s plans of

disposingtheir waste product, fly ash, and in putting up a community-based, social

enterprise as its CSR project. The team was referred to Mr. Jason Magnaye, CSR head
of TSI, who requested for a group of researchers whodperform a project feasibility
study on such CSR initiative from _________, Region XIs Regional Director.
90.

After a series of procedures to formalize the engagement, the group

accepted the task not only for the compliance of their Management Consultancy
requirement but with the intentof contributing to the people of Barangay Binugao and
Inawayan.
91.

The engagement is to last for approximately three months, ending on

the month of September. Data were obtained through numerous firms and agencies in
Davao City such as the Davao City Investment and Promotion Center, City
Engineers Office, ThermaSouth Inc.,Safecon Industries Inc., Sun Star Davao, among
others.
92.

F.2 Nature of the Industry

93.

Description.The

construction

industry

has

been

stable,

growingindustry in Davao City. Davao is an urbanizing region with several real estate
companies funneling their investments to the region, other major businesses like
malls, hotels, offices, putting up their own buildings, and with the government
investing in good infrastructure. Thus, demand for construction supplies and services
are relatively stable and on the rise.
94.

Role in the Economy.According to London-based Timetrics

Construction Intelligence Center (CIC), the Philippine construction industry is

expected to grow by 50% by 2020. The competitiveness of firms operating in the
construction industry could help facilitate this growth by providing the best and most
affordable means of putting up infrastructure. This also means that the project could
contribute to this growth by providing a unique product with superior quality and less
cost. Costs of building infrastructure then will be significantly lower without
compromising the durability of the materials used.
95.
96.

Products/Product Lines. <please provide answers>

F.3 Problemsof the Industry
97.

One of the biggest threats to the industry is an economic slowdown.

The level of demand for infrastructure depends on the peoples disposable income
level and the governments budget allocation. Higher economic productivity means
more purchasing power for the people and more tax collections for the government.
The same holds true on the converse. Thus, the construction industry is highly
dependent on the economic condition of its target market.

98.

On the other hand, there is a growing trend of transforming the world

into a greener place. Environmentalist campaigns are pushing for green technology
and needless to say, greener infrastructure. This incentivizes the industry to adjust to
changing preferences of the people. Developing the fly ash concrete industry could be
a potential venture in response to this global trend.
99.
100.
101.
102.
103.
104.
105.

F.4 Mode of Financing

<Sources and availability????>
F.5 Investment Cost and Initial Working Capital
<answer lacking>
G. Major Assumptions and Summary of Findings and Conclusion
G.1 Market
Up to this day, there are no existing fly ash concrete products

manufacturers in the Philippines. This makes it impossible to obtain data which could
exhibit the level of demand for fly ash concrete products. However, data relevant to
ascertaining demand for concrete products in general is obtainable. According to Dr.
Maria Lourdes Monteverde of Philippine Integrated Real Estate Service, the demand
for hollow blocks is said to be booming especially that more and more real estate
investors and construction companies are trying to penetrate the Davao City market.
More details are presented in later chapters.
106.

G.2 Technical

107.

There is technical feasibility.

108.

As previously mentioned, ThermaBlocks Producers Cooperative offers

concrete products mixed with fly ash. The supply of fly ash will come from Therma
South which generates 140 to 150 tons of fly ash daily. This amount is more than
enough to supply the needs of the entity. Therefore, as long as Therma South is in the
business of generating energy, there is a continuous supply of fly ash available for
ThermaBlocks.
109.

The most common means of making hollow blocks is through manual

labor. That is why there is an initial doubt as to the availability of machineries needed.
After scouting around the city, the proponents have found a supplier of said
machineries, that is, the Davao Diamond Industrial Supply located at F. Bangoy
Street, Davao City. Therefore, the entity is assured that the machineries needed for
production are immediately available in the market.
110.

More details are available in Chapter 3: Technical Aspect.

111.

112.

G.3 Financial
Capital. Membership fees will be minimal: this is to encourage

participation in the cooperative. The major source of capital will then initially be from
grants of TSI and subsequently from retention of income.
113.

Financing. Cash outflow for the first year will be close to 5 million.

Around half of such outflow, however, will be financed by TSI: these items would be
the initial working capital requirement, the cost of the land, and the cost of

machinery. For the balance that will not be covered by such grant, the cooperative
will then have to incur long-term debt to avoid having a negative cash balance.
Expansion for subsequent years will either be funded by appropriated portions of the
fund balance, and debt funded in the worst case.
114.

Profitability. As per projections, the profitability of the enterprise

would settle on an average of 55%.

115.

Trends in Income and Cash Flows.The income of the cooperative will

be stable for the first two years - parts of the retained earnings will be used to pay off
incurred debt. For subsequent years, income and cash inflow will see a marked
increase as debt will not cut into the income as much as in previous years. The
cooperative will then use such increase in cash to fund expansion in terms of number
of employees and number of machineries
116.

G.5 Socio-economic
117.

The project assumes that the business will continuously be able to be

profitable so as to maintain its donations to the beneficiary barangays and also to be a

good source of income for the members of the cooperative. We also expect the project
to contribute to the welfare of the environment by eventually reducing the carbon
emissions released to the earths atmosphere.
118.

G.6 Organization and Management

119.

The cooperative expects to hire a total of 23 personnel. Fourteen of

which belong to the Production and Processing staff, while the rest belong to the
Sales and Administrative Staff. The assumed minimum wage is Php 317.