PART IV: OPERATIONS STRATEGY
Facility, Tax Optimization, Supply Chain & Quality
CONFIDENTIAL - For Board Review Only
Manufacturing Facility Location Analysis
Selected Location: KEZAD (Khalifa Economic Zone Abu Dhabi)
KEZAD Advantages
Operational Benefits
- 1,000 sqm facility at $40-50/sqm annually
- 15-minute access to Khalifa Port
- 99.9% power reliability with backup
- HACCP-compliant infrastructure
- 7-14 day fast-track licensing
Tax & Financial Benefits
- 0% corporate tax on manufacturing/export
- 100% foreign ownership
- No import duties on machinery
- Full profit repatriation
- 50-year renewable lease
Facility Scoring Summary
| Location | Cost | Logistics | Tax Benefits | Licensing | Total Score |
|---|---|---|---|---|---|
| KEZAD (Selected) | 95/100 | 95/100 | 100/100 | 95/100 | 96.3 |
| JAFZA Dubai | 70/100 | 90/100 | 100/100 | 85/100 | 86.3 |
| Dubai Industrial City | 80/100 | 75/100 | 100/100 | 80/100 | 83.8 |
Facility Design and Specifications
State-of-the-art chocolate manufacturing facility showcasing premium quality manufacturing, international standards compliance, and advanced technology integration
Facility Layout: 1,000 sqm
Production Zone (600 sqm)
- Chocolate processing: 350 sqm
- Coffee roasting: 150 sqm
- Packaging line: 100 sqm
Support Areas (250 sqm)
- QC laboratory: 80 sqm
- Raw material storage: 100 sqm
- Finished goods: 70 sqm
Admin & Facilities (150 sqm)
- Offices: 60 sqm
- Staff facilities: 40 sqm
- Utilities/HVAC: 50 sqm
Production Capacity
| Product Category | Daily Capacity | Annual Capacity (250 days) | Year 3 Utilization |
|---|---|---|---|
| Chocolate Products | 4,000 kg | 1,000 tonnes | 85% |
| Coffee (Roasted) | 480 kg | 120 tonnes | 75% |
Dual Entity Tax Optimization
Structure Overview
Parmida UAE will operate through a dual entity structure: Free Zone (FZ) for manufacturing and Mainland for local sales, maximizing tax benefits while maintaining market access.
Free Zone Entity (KEZAD)
- Activities: Manufacturing, export, international sales
- Tax Rate: 0% corporate tax
- Benefits: No import duties, full repatriation
- Revenue Allocation: 70-80% of total revenue
Mainland Entity (Dubai)
- Activities: UAE domestic distribution, retail
- Tax Rate: 9% on profits > AED 375k
- Benefits: Local market access, sponsorship
- Revenue Allocation: 20-30% of total revenue
Tax Savings: $10.8M over 5 Years
Effective Tax Rate: 2.5% (vs 9% if fully mainland)
Mechanism: Transfer pricing for intercompany sales at arm's length prices, allocating majority of profits to 0% tax FZ entity
Compliance: Full adherence to UAE transfer pricing regulations and OECD guidelines
Supply Chain Strategy
Professional coffee roasting equipment for specialty coffee production ensuring freshness and quality control
Raw Material Sourcing
| Material | Primary Sources | Monthly Volume | Lead Time | Cost/kg |
|---|---|---|---|---|
| Cocoa Beans | Ghana (60%), Ecuador (40%) | 40 tonnes | 45 days | $3.50 |
| Green Coffee | Brazil, Ethiopia, Colombia | 8 tonnes | 30 days | $5.20 |
| Milk Powder | New Zealand, EU | 12 tonnes | 30 days | $4.80 |
| Sugar | Regional suppliers | 15 tonnes | 14 days | $0.65 |
Supplier Strategy
- Dual Sourcing: Minimum 2 suppliers per critical input to mitigate risk
- 3-Month Inventory: Safety stock for cocoa and coffee beans
- Quality Certifications: All suppliers must have Rainforest Alliance, Fair Trade, or equivalent
- Payment Terms: NET 30-45 days for established relationships
Quality and Compliance Roadmap
HORECA (Hotels, Restaurants, Cafes) environment showcasing premium coffee service and professional presentation standards that Parmida will target
Required Certifications
HACCP
Timeline: Month 4-6
Cost: $15k
Priority: Critical (mandatory)
Halal Certification
Timeline: Month 5-7
Cost: $8k
Priority: Critical (70%+ market)
ISO 22000
Timeline: Year 1-2
Cost: $25k
Priority: High (export capability)
Quality Control Framework
| Stage | Tests | Frequency | Acceptance Criteria |
|---|---|---|---|
| Raw Material Incoming | Moisture, impurities, sensory | Every batch | Per supplier specifications |
| In-Process | Temperature, particle size, pH | Hourly | Process control limits |
| Final Product | Microbiology, sensory, packaging | Every production run | Product specifications |
| Shelf Life | Accelerated aging, sensory | Monthly | 12-month shelf life validation |
Regulatory Compliance Timeline
Critical Path for Approvals
- Day 1-30: Entity formation (FZ + Mainland), initial licensing applications
- Day 30-90: Facility lease finalization, HACCP documentation preparation
- Day 90-150: Facility construction, equipment installation, HACCP audit
- Day 150-180: Halal certification, Dubai Municipality approval, trial production
- Day 180-210: Final inspections, commercial production authorization