fruit grading & packing (rs. 2.2 million)

8/11/2019 Fruit Grading & Packing (Rs. 2.2 Million)

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Pre-Feasibility Study

(Fruits Processing & Packaging Plant)

Small and Medium Enterprises Development Authority

Ministry of Industries & ProductionGovernment of Pakistan

www.smeda.org.pk

HEAD OFFICE

4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road,Lahore

Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7

[email protected]

REGIONAL OFFICE

PunjabREGIONAL OFFICE

SindhREGIONAL OFFICE

Khyber PakhtunkhwaREGIONAL OFFICE

Balochistan3rdFloor, Building No. 3,Aiwan-e-Iqbal Complex,

Egerton Road Lahore,

Tel: (042) 111-111-456Fax: (042) 36304926-7

[email protected]

5thFloor, BahriaComplex II, M.T. Khan Road,

Karachi.

Tel: (021) 111-111-456Fax: (021) 35610572

[email protected]

Ground FloorState Life Building

The Mall, Peshawar.

Tel: (091) 111-111-456Fax: (091) 5286908

[email protected]

Bungalow No. 15-AChaman Housing Scheme

Airport Road, Quetta.

Tel: (081) 2831623, 2831702Fax: (081) 2831922

[email protected]

Note: All SMEDA Services / information related to PM's Youth Business Loan areFree of Cost

December, 2013
mailto:[email protected]:[email protected]:[email protected]://d/Cloud/02-FEB-2014/Downloads/[email protected]://d/Cloud/02-FEB-2014/Downloads/[email protected]://d/Cloud/02-FEB-2014/Downloads/[email protected]://d/Cloud/02-FEB-2014/Downloads/[email protected]://d/Cloud/02-FEB-2014/Downloads/[email protected]://d/Cloud/02-FEB-2014/Downloads/[email protected]:[email protected]:[email protected]


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Pre-Feasibility Study Fruits Processing & Packaging Plant

Table of Contents

Contents

1. DISCLAIMER .......................................................................................................... 2

2. PURPOSE OF THE DOCUMENT ........................................................................ 3

3. INTRODUCTION TO SMEDA ............................................................................. 3

4. INTRODUCTION TO SCHEME ........................................................................... 4

5. EXECUTIVE SUMMARY ...................................................................................... 4

6. BRIEF DESCRIPTION OF PROJECT AND PRODUCT .................................. 5

7. CRITICAL FACTORS ............................................................................................ 5

8. INSTALLED AND OPERATIONAL CAPACITY .............................................. 5

9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT .................................... 6

10.POTENTIAL TARGET MARKETS AND CITIES ............................................. 6

11.PRODUCTION PROCESS FLOW ........................................................................ 6

12.PROJECT COST SUMMARY ............................................................................... 6

12.1) PROJECT ECONOMICS .................................................................................................................... 712.2) PROJECT FINANCING ...................................................................................................................... 712.3) PROJECT COST ............................................................................................................................... 712.4) SPACE REQUIREMENT .................................................................................................................... 812.5) MACHINERY AND EQUIPMENT ......................................................................................................... 812.6) OFFICE EQUIPMENTS...................................................................................................................... 912.7) FURNITURE &FIXTURES ................................................................................................................. 9

12.8) RAW MATERIAL REQUIREMENTS .................................................................................................... 912.9) HUMAN RESOURCE REQUIREMENT .............................................................................................. 1012.10)REVENUE GENERATION ................................................................................................................ 1012.11)OTHER COSTS .............................................................................................................................. 10

13.CONTACTS ........................................................................................................... 11

14.ANNEXURES ......................................................................................................... 12

14.1) INCOME STATEMENTS................................................................................................................... 1214.2) BALANCE SHEET ........................................................................................................................... 1314.3) CASH FLOW STATEMENTS............................................................................................................ 1414.4) USEFUL PROJECT MANAGEMENT TIPS ........................................................................................ 1514.5) USEFUL LINKS............................................................................................................................... 16

15.KEY ASSUMPTIONS ........................................................................................... 17


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1. DISCLAIMER

This information memorandum is to introduce the subject matter and provide a

general idea and information on the said subject. Although, the material included

in this document is based on data / information gathered from various reliable

sources; however, it is based upon certain assumptions which may differ fromcase to case. The information has been provided on as is where is basis without

any warranties or assertions as to the correctness or soundness thereof. Although,

due care and diligence has been taken to compile this document, the contained

information may vary due to any change in any of the concerned factors, and the

actual results may differ substantially from the presented information. SMEDA, its

employees or agents do not assume any liability for any financial or other loss

resulting from this memorandum in consequence of undertaking this activity. The

contained information does not preclude any further professional advice. The

prospective user of this memorandum is encouraged to carry out additional

diligence and gather any information which is necessary for making an informed

decision; including taking professional advice from a qualified consultant /

technical expert before taking any decision to act upon the information.

For more information on services offered by SMEDA, please contact our website:

www.smeda.org.pk

SMEDA Services / Information related to PMs Youth Business Loan areFREE OF COST - 2
http://www.smeda.org.pk/http://www.smeda.org.pk/


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2. PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential

entrepreneurs in project identification for investment. The project pre-feasibility

may form the basis of an important investment decision and in order to serve this

objective, the document/study covers various aspects of project conceptdevelopment, start-up, and production, marketing, finance and business

management.

The purpose of this document is to facilitate potential investors in Fruits

Processing & Packaging Plant by providing them with a general understanding of

the business with the intention of supporting potential investors in crucial

investment decisions.

The need to come up with pre-feasibility reports for undocumented or minimally

documented sectors attains greater imminence as the research that precedes

such reports reveal certain rules of thumb; best practices developed by existingenterprises by trial and error, and certain industrial norms that become a guiding

source regarding various aspects of business set-up and its successful

management.

Apart from carefully studying the whole document one must consider critical

aspects provided later on, which form basis of any Investment Decision.

3. INTRODUCTION TO SMEDA

The Small and Medium Enterprises Development Authority (SMEDA) wasestablished in October 1998 with an objective to provide fresh impetus to the

economy through development of Small and Medium Enterprises (SMEs).

With a mission "to assist in employment generation and value addition to the

national income, through development of the SME sector, by helping increase the

number, scale and competitiveness of SMEs" , SMEDA has carried out sectoral

research to identify policy, access to finance, business development services,

strategic initiatives and institutional collaboration and networking initiatives.

Preparation and dissemination of prefeasibility studies in key areas of investment

has been a successful hallmark of SME facilitation by SMEDA.

Concurrent to the prefeasibility studies, a broad spectrum of business

development services is also offered to the SMEs by SMEDA. These services

include identification of experts and consultants and delivery of need based

capacity building programs of different types in addition to business guidance

through help desk services.



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4. INTRODUCTION TO SCHEME

Prime Ministers Youth Business Loan program, for young entrepreneurs, with anallocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to providesubsidised financing at 8% mark-up per annum for one hundred thousand(100,000) beneficiaries, through designated financial institutions, initially by theNational Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).

Small business loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8years inclusive of 1 year grace period, and a debt : equity of 90 : 10 will bedisbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh, KhyberPakhtunkhwah, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir andFederally Administered Tribal Areas (FATA).

5. EXECUTIVE SUMMARY

Fruits Processing & Packaging Plant, which would extract pulp of Apple, Peach,Guava and Plum, is proposed to be located at Peshawar, while Quetta, Gilgit,

Swat, Karachi, Lahore, Multan, Rawalpindi, and Quetta are also suitable where

basic infrastructure is available for easy transportation of raw material and finished

goods. The finished product is pulp of Apple, Peach, Guava and Plum.

The proposed project will have the installed capacity of 1,810 Tons/ year on the

basis of daily shift of 8 hours whereas the operational capacity will be 724 tons per

year on 8 hours shift per day, on a processing contract basis.

The total Project Cost is Rs. 2,197,000/- including the Capital Cost of Rs.1,437,000/- and the Working Capital of Rs. 760,000/-. Given the cost assumptions

IRR and payback are 38%, and 2 years respectively, hence making the project

viable. Apart from being a profitable business, the project will also create new

business opportunities for fruits growers and traders etc.

The most critical consideration or factors for success of the project are:

Multiple sources for availability of raw material (Apple, Peach, Guava and

Plum).

Processing contract with farmers or traders, preferably with advance

payments for procurement and remaining payment as cash on delivery.

Strict Quality assurance of process and products as per HACCP standards.



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6. BRIEF DESCRIPTION OF PROJECT AND PRODUCT

The project is related to setting up Fruits Processing & Packaging Plant with

following detail:

Technology: The proposed facility will have semiautomatic mechanical

facility for Washing, Sorting/Grading in addition to extraction of their pulpsand its packaging facility.

Location: The unit can be installed anywhere in Pakistan where the raw

materials are easily accessible from Fruit markets. While Gilgit and Quetta

are also highly desirable, Peshawar is the current choice.

Product: The unit would produce fruit pulp, processing and adding value to

raw apple, peach, guava and plum, which will come from different regions

of Pakistan.

Target Market:Within Pakistan, existing Industrial units with fruit

processing facilities hold enormous potential for marketing fruit pulp. An

enormous export markets for Pakistani fruits and their value added products

exist in the USA, the Europe, Middle East, Far East, India and Sri Lanka.

Employment: The proposed project will provide direct employment to 5

people.

Profitability: Financial analysis shows the unit shall be profitable from the

very first year of operation.

7. CRITICAL FACTORS

The following factors should be considered thoroughly:

Processing contract with farmers and traders for value added business

opportunities.

Availability of raw material (Apple, Peach, Guava and Plum).

Awareness about HACCP standards and Strict Quality assurance of

process and products.

8. INSTALLED AND OPERATIONAL CAPACITY

The installed capacity of the project will be 1,810 Tons per year whereas theproject will start working with an initial operating capacity of 724 Tons per year with

an annual growth rate of 5%.



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9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

The unit can be installed anywhere in Pakistan where the raw materials (fresh

fruits) are easily accessible. But the most appropriate area for installing Fruits

Processing & Packaging Plant should be that areas in which the raw material,

apple, peach, guava and plum, are in abundance which will minimize thetransportation cost. Khyber Pakhtunkhwa particularly is famous for the production

of horticultural crops including apples, peaches, guava and plums etc.

10. POTENTIAL TARGET MARKETS AND CITIES

Initially, fruits will be processed to cater the demands of small and large juice

manufacturers located in major cities of Pakistan like Karachi, Lahore Islamabad

etc. After domestic needs are fulfilled, it will be exported to the different countries.

The main export markets for Pakistani processed fruits are including USA, Europe,

Middle East, Far East, India and Sri Lanka.

11. PRODUCTION PROCESS FLOW

12. PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial viability

of Fruits Processing & Packaging Plant under the Prime Ministers Small Business

Procurement ofFruits

Washing

Grading/Sorting Pulping

Preservation

Finishing Packaging

Market



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Loan. Various cost and revenue related assumptions along with results of the

analysis are outlined in this section.

12.1) Project Economics

All the figures in this financial model have been calculated for installed capacity of

1,810 Tons per year with an initial operating capacity of 724 Tons per year.

The following table shows internal rate of return, payback period and net present

value of the project.

Table 1 - Project EconomicsDescription Details

Internal Rate of Return (IRR) 38%

Payback Period (yrs) 2

Net Present Value (NPV) 6,106,170

12.2) Project Financing

Following table provides details of the equity required and variables related to

bank loan;

Table 2 - Project FinancingDescription Details

Total Equity (10%) Rs. 219,700

Bank Loan (90%) Rs.1,977,300

Markup to the Borrower (%age/annum) 8%

Tenure of the Loan (Years) 8Grace period (year) 1

12.3) Project Cost

Following requirements have been identified for operations of the proposed

business:

Table 3- Project CostCapital Investment Amount (Rs.)

Machinery and Equipment 1,265,000

Office Equipment 78,000

Furniture & fixtures 94,000

Total Capital Cost 1,437,000

Initial Working Capital 760,000

Total Project Cost 2,197,000



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12.4) Space Requirement

The area has been calculated on the basis of space requirement for production

area, management building, stores, and Grounds. However, the Units operating in

the industry do not follow any set pattern. Following table shows calculations for

project space requirement on rental basis.Table 4: Space Requirement

Space Requirement (in ft.) Sqft Amount(Rs.)

Processing Hall 1,320

Quality Store/Laboratory 120

Management Building 288

Store 1,600

Grounds/Open Space 1,500

Total Area 4,828 216,000

The building will be on rental basis with rent paid on yearly advance basis. Total

investment in building and infrastructure is calculated to be approximately Rs.

216,000 per annum.

12.5) Machinery and Equipment

Following table provides list of machinery and equipment required for an average

Fruits Processing & Packaging Plant working at small scale in order to extract fruit

pulps from selected fresh fruits.

Table 5: List of Machinery and Equipment

Description QuantityCost

Rs/unitTotalRs.

Sorting Machine 01 170,000 170,000

Washing Tub (Steel) 01 45,000 45,000

Elevator 01 175,000 175,000

Pulper 01 155,000 155,000

Finisher 01 175,000 175,000

Tanks 02 110,000 220,000Pump 01 35,000 35,000

Shrinking Machine 01 150,000 150,000

Installation Charges** 01 140,000 140,000

Total 10 1,265,000

Note: ** Installation Charges are included in machinery and equipment cost.



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Fruits Processing & Packaging Plant is semi automatic processing facility, which

will receive fruits initially at sorting tables through washing facility. It transfers fruits

to washing tub and after grading, the fruits to be transferred to pulper for pulp

extraction. Extracted pulp would then be transferred to tanks through vessels and

preservatives would be mixed in it through shrinking machine. Electric pump

installed adjacent to tanks would be used to fill pulp in drums.

12.6) Office Equipments

These following Office Equipments will be required:

Table 6: Office Equipment CostsQuantity Cost Amount

Computers 01 40,000 40,000

Printer 01 35,000 35,000

Telephone 01 3,000 3,000

Total 03 78,000

12.7) Furni ture & Fixtures

Table 7: Furniture & FixturesQuantity Cost Amount

Chairs 08 5,000 40,000Tables 03 18,000 54,000

Total 11 94,000

12.8) Raw Material Requirements

As already mentioned that our four major end products produced are; Apple Pulp,

Peach Pulp, Guava Pulp and Plum Pulp. Following table shows raw material

requirement to process fruits for one month based on already defined operational

capacity:

Table 8: Cost of MaterialUnit Rate Qty Rs./Month

Apple Kg 35 33,280 1,164,800

Peach Kg 35 24,960 873,600

Guava Kg 30 16,640 499,200

Plum Kg 30 8,320 249,600



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Preservatives Rs. Per Kg 2 83,200 166,400

Packing Material Drums 750 694 520,500

Total 3,474,100

12.9) Human Resource Requirement

Table 9: Human Resource RequirementDescription No. of

EmployeesSalary per

month

Skilled Labor 04 44,000

Security Guard 01 10,000

Total Staff 05 54,000

Salaries of all employees are estimated to increase at 10% annually.

12.10) Revenue Generation

Table 10: Revenue Generation

Product UnitSalesPrice

(Rs./Unit)

First YearProduction

First YearSales

Revenue(Rs)

Pulp (Apple) 120 KG Drum 7,800 2,412.80 18,819,840

Pulp (Peach) 120 KG Drum 7,200 1,809.60 13,029,120

Pulp (Guava) 120 KG Drum 7,200 1,206.40 8,686,080Pulp (Plum) 120 KG Drum 7,200 603.20 4,343,040

Total SalesRevenue

44,878,080

12.11) Other Costs

Table 11: Other CostsProduct Rs./Month

Electricity 60,000

Water 4,500

Communication 3,500Total 68,000



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14. ANNEXURES

14.1 INCOME STATEMENTS

Projected Income Statement YEAR- 1 YEAR- 2 YEAR- 3 YEAR- 4 YEAR- 5 YEAR- 6 YEAR- 7 YEAR- 8 YEAR- 9 YEAR- 10

SALES

Pulp: Apple 18,819,840 20,701,824 22,772,006 25,049,207 27,554,128 30,309,541 33,340,495 36,674,544 40,341,998 44,376,198

Pulpe: Peach 13,029,120 14,332,032 15,765,235 17,341,759 19,075,935 20,983,528 23,081,881 25,390,069 27,929,076 30,721,983

Pulp: Guava 8,686,080 9,554,688 10,510,157 11,561,172 12,717,290 13,989,019 15,387,921 16,926,713 18,619,384 20,481,322

Pulp: Plum 4,343,040 4,777,344 5,255,078 5,780,586 6,358,645 6,994,509 7,693,960 8,463,356 9,309,692 10,240,661

44,878,080 49,365,888 54,302,477 59,732,724 65,705,997 72,276,597 79,504,256 87,454,682 96,200,150 105,820,165

COST OF SALES

Apple 13,977,600 15,375,360 16,912,896 18,604,186 20,464,604 22,511,065 24,762,171 27,238,388 29,962,227 32,958,450

Peach 10,483,200 11,531,520 12,684,672 13,953,139 15,348,453 16,883,298 18,571,628 20,428,791 22,471,670 24,718,837

Guava 5,990,400 6,589,440 7,248,384 7,973,222 8,770,545 9,647,599 10,612,359 11,673,595 12,840,954 14,125,050

Plum 2,995,200 3,294,720 3,624,192 3,986,611 4,385,272 4,823,800 5,306,180 5,836,797 6,420,477 7,062,525

Preservatives 1,996,800 2,196,480 2,416,128 2,657,741 2,923,515 3,215,866 3,537,453 3,891,198 4,280,318 4,708,350

Packing Cost 6,240,000 6,864,000 7,550,400 8,305,440 9,135,984 10,049,582 11,054,541 12,159,995 13,375,994 14,713,594

COST OF GOODS SOLD 41,683,200 45,851,520 50,436,672 55,480,339 61,028,373 67,131,210 73,844,331 81,228,765 89,351,641 98,286,805

Electricity Expanse 720,000 792,000 871,200 958,320 1,054,152 1,159,567 1,275,524 1,403,076 1,543,384 1,697,722

Payroll Expanses 648,000 712,800 784,080 862,488 948,737 1,043,610 1,147,972 1,262,769 1,389,046 1,527,950

Deprecition Expanse 143,700 129,330 116,397 104,757 94,282 84,853 76,368 68,731 61,858 55,672

Machine Maintenance Expanse 210,000 231,000 254,100 279,510 307,461 338,207 372,028 409,231 450,154 495,169

Rent Expanse 216,000 237,600 261,360 287,496 316,246 347,870 382,657 420,923 463,015 509,317

Telephone Charges 42,000 44,100 46,305 48,620 51,051 53,604 56,284 59,098 62,053 65,156

Water Charges 54,000 56,700 59,535 62,512 65,637 68,919 72,365 75,983 79,783 83,772

TOTAL OPERATING EXPANSES 2,033,700 2,203,530 2,392,977 2,603,703 2,837,566 3,096,631 3,383,198 3,699,811 4,049,292 4,434,758

EARNINGS BEF ORE INT EREST & T AXES 1,16 1,18 0 1,310,838 1,472,828 1,648,682 1,840,058 2,048,755 2,276,727 2,526,106 2,799,217 3,098,602

FINANCIAL EXPENSES

Financial Charges on Long term loan 158,184 145,529 129,219 111,605 92,581 72,035 49,846 25,882 - -

TOTAL FINANCIAL EXPENSES 158,184 145,529 129,219 111,605 92,581 72,035 49,846 25,882 - -

PROFIT BEFORE TAX 1,002,996 1,165,309 1,343,608 1,537,077 1,747,477 1,976,719 2,226,881 2,500,224 2,799,217 3,098,602

Tax 60,180 69,919 80,617 92,225 104,849 118,603 133,613 150,013 167,953 185,916

PROFIT AFTER TAX 942,816 1,095,390 1,262,992 1,444,852 1,642,629 1,858,116 2,093,268 2,350,211 2,631,264 2,912,686

Retained Earnings at the beginning of year - 942,816 1,566,798 2,282,095 3,095,452 4,015,654 5,052,456 6,216,666 7,520,243 8,976,401

Dividend 471,408 547,695 631,496 722,426 821,314 929,058 1,046,634 1,175,105 1,315,632

Retained Earnings at the end of year 942,816 1,566,798 2,282,095 3,095,452 4,015,654 5,052,456 6,216,666 7,520,243 8,976,401 10,573,455



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14.2 Balance Sheet

Projected Balance Sheet YEAR-0 YEAR - 1 YEAR - 2 YEAR - 3 YEAR - 4 YEAR - 5 YEAR - 6 YEAR - 7 YEAR - 8 YEAR - 9 YEAR - 10

ASSETS

Current Assets

Cash & Bank Balance 360,000 (3,602,579) (3,628,432) (3,646,704) (3,656,110) (3,654,104) (3,638,000) (3,552,217) (3,497,383) (3,041,241) (2,556,577)

Raw materials stock 400,000 4,111,057 4,522,163 4,974,380 5,471,817 6,018,999 6,620,899 7,282,989 8,011,288 8,812,417 9,693,658

W.I.P - 136,597 150,257 165,283 181,811 199,992 219,992 241,991 266,190 292,809 322,090

Finished goods stock - 935,200 1,028,720 1,131,592 1,244,751 1,369,226 1,506,149 1,656,764 1,822,440 2,004,684 2,205,153

Receivables - 3,739,840 4,113,824 4,525,206 4,977,727 5,475,500 6,023,050 6,625,355 7,287,890 8,016,679 8,818,347

Total Current Assets 760,000 5,320,116 6,186,533 7,149,757 8,219,997 9,409,613 10,732,089 12,254,881 13,890,425 16,085,348 18,482,671

Fixed Assets

At Cost less: Acc. Depreciation 1,437,000 1,293,300 1,163,970 1,047,573 942,816 848,534 763,681 687,313 618,581 556,723 501,051

TOTAL ASSETS 2,197,000 6,613,416 7,350,503 8,197,330 9,162,813 10,258,147 11,495,770 12,942,194 14,509,006 16,642,071 18,983,722

Current Liabilities

Current maturity of long term loan 250,565 268,180 287,204 307,749 329,939 325,771 - - -

Accounts Payable - 3,473,600 3,820,960 4,203,056 4,623,362 5,085,698 5,594,268 6,153,694 6,769,064 7,445,970 8,190,567

Non current Liabilities - 3,473,600 4,071,525 4,471,236 4,910,565 5,393,447 5,924,206 6,479,465 6,769,064 7,445,970 8,190,567

Long term Loan 1,977,300 1,977,300 1,492,479 1,224,299 937,096 629,346 299,408 26,363 - - -

EQUITY

Paid up Capital 219,700 219,700 219,700 219,700 219,700 219,700 219,700 219,700 219,700 219,700 219,700

Retained Earnings - 942,816 1,566,798 2,282,095 3,095,452 4,015,654 5,052,456 6,216,666 7,520,243 8,976,401 10,573,455

Total Equity 219,700 1,162,516 1,786,498 2,501,795 3,315,152 4,235,354 5,272,156 6,436,366 7,739,943 9,196,101 10,793,155

TOTAL LIABIL ITIES & EQUITY 2,197,000 6,613,416 7,350,503 8,197,330 9,162,813 10,258,147 11,495,770 12,942,194 14,509,006 16,642,071 18,983,722



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14.3 Cash Flow Statements

Projected Cash Flow Statement YEAR- 0 YEAR- 1 YEAR- 2 YEAR- 3 YEAR- 4 YEAR- 5 YEAR- 6 YEAR- 7 YEAR- 8 YEAR- 9 YEAR- 10

OPERATING ACTIVITIES

Net Profit - 1,002,996 1,165,309 1,343,608 1,537,077 1,747,477 1,976,719 2,226,881 2,500,224 2,799,217 3,098,602

Add:

Depreciation - 143,700 129,330 116,397 104,757 94,282 84,853 76,368 68,731 61,858 55,672

Net profit before working capital changes - 1,146,696 1,294,639 1,460,005 1,641,834 1,841,759 2,061,573 2,303,249 2,568,956 2,861,075 3,154,274

Working Capital changes

Raw materials stock (400,000) (3,711,057) (411,106) (452,216) (497,438) (547,182) (601,900) (662,090) (728,299) (801,129) (881,242)

W.I.P - (136,597) (13,660) (15,026) (16,528) (18,181) (19,999) (21,999) (24,199) (26,619) (29,281)

Finished goods stock - (935,200) (93,520) (102,872) (113,159) (124,475) (136,923) (150,615) (165,676) (182,244) (200,468)

Accounts payable - 3,473,600 347,360 382,096 420,306 462,336 508,570 559,427 615,369 676,906 744,597

Accounts receivable - (3,739,840) (373,984) (411,382) (452,521) (497,773) (547,550) (602,305) (662,535) (728,789) (801,668)

Working capital changes (400,000) (5,049,095) (544,909) (599,400) (659,340) (725,275) (797,802) (877,582) (965,340) (1,061,874) (1,168,062)

Tax - (60,180) (69,919) (80,617) (92,225) (104,849) (118,603) (133,613) (150,013) (167,953) (185,916)

Cash provided by/ used in operations (400,000) (3,962,579) 679,811 779,988 890,269 1,011,636 1,145,168 1,292,054 1,453,602 1,631,248 1,800,296

FINANCING ACTIVITIES

Long term loan 1,977,300 - (234,255) (250,565) (268,180) (287,204) (307,749) (329,939) (325,771) - -

Owner equity 219,700

Dividend paid - (471,408) (547,695) (631,496) (722,426) (821,314) (929,058) (1,046,634) (1,175,105) (1,315,632)

Ca sh p ro vided b y/ u sed in Finan cing a ct iv it ie s 2,197 ,00 0 - (705,664) (798,260) (899,676) (1,009,630) (1,129,064) (1,258,997) (1,372,405) (1,175,105) (1,315,632)

INVESTING ACTIVITIES

Capital Expenditure (1,437,000) - - - - - - - - -

Cash prov ided by/ used in Invest ing act ivi t ies (1,437,000) - - - - - - - - - -

Net Cash Flow 360,000 (3,962,579) (25,853) (18,272) (9,407) 2,006 16,104 33,057 81,197 456,142 484,664

Cash balance B/ F - 360,000 (3,602,579) (3,628,432) (3,646,704) (3,656,110) (3,654,104) (3,638,000) (3,604,943) (3,523,746) (3,067,604)

Cash balance C/ F 360,000 (3,602,579) (3,628,432) (3,646,704) (3,656,110) (3,654,104) (3,638,000) (3,604,943) (3,523,746) (3,067,604) (2,582,940)



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14.4 Useful Project Management Tips

Required spare parts & consumables: Suppliers credit agreements and

availability as per schedule of maintenance be ensured before start of operations.

Energy Requirement: Should not be overestimated or installed in excess andalternate source of energy for critical operations be arranged in advance.

Machinery Suppliers: Should be asked for training and after sales services

under the contract with the machinery suppliers. They must be communicated

about the timely availability with clear mutual understanding of the required time

period.

Quality Assurance Equipment & Standards: Whatever means required

products quality standards need to be defined on the packaging and a system to

check them instituted, this improves credibility.

Marketing

Product Development & Packaging: Expert's help may be engaged for

product/service and packaging design & development.

Ads & P.O.S. Promotion: Business promotion and dissemination through

banners and launch events is highly recommended. Product brochures from good

quality service providers should be developed.

Price - Bulk Discounts, Cost plus Introductory Discounts: There should be

no compromise on quality due to pricing pressure. Price during introductory phase

may be lower and used as promotional tool. Product cost estimates should be

carefully documented before price setting. Government controlled prices shall be

displayed.

Human Resources

Adequacy & Competencies: Skilled and experienced staff should be

considered an asset even to the extent of offering share in business profit.

Performance Based Remuneration: Attempt to manage human resource cost

should be focused through performance measurement and performance based

compensation.

Training & Skill Development: Encouraging training and skill of self &

employees through experts and exposure of best practices is route to success.

Least cost options for Training and Skill Development (T&SD) may be linked with

compensation benefits and awards.



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14.5 Useful Links

Prime Ministers Office

www.pmo.gov.pk

Small & Medium Enterprises Development Authori ty (SMEDA)

www.smeda.org.pkNational Bank of Pakistan (NBP)

www.nbp.com.pk

First Women Bank Limited (FWBL)

www.fwbl.com.pk

Government of Pakistan

www.pakistan.gov.pk

Ministry of Industries & Production

www.moip.gov.pk

Government of Punjab

www.punjab.gov.pkGovernment of Sindh

www.sindh.gov.pk

Government of Khyber Pakhtunkhwa

www.khyberpakhtunkhwa.gov.pk

Government of Balochistan

www.balochistan.gov.pk

Government of Gilgi t Baltistan

www.gilgitbaltistan.gov.pk

Government of Azad Jammu &Kashmir

www.ajk.gov.pk

Trade Development Authority of Pakistan (TDAP)

www.tdap.gov.pk

Security Exchange Commission of Pakistan (SECP)

www.secp.gov.pk

Federation of Pakistan Chambers of Commerce and Industry (FPCCI)

www.fpcci.com.pk

State Bank of Pakistan (SBP)

www.sbp.org.pk

http://www.pmo.gov.pk/http://www.pmo.gov.pk/http://www.smeda.org.pk/http://www.smeda.org.pk/http://www.nbp.com.pk/http://www.nbp.com.pk/http://www.fwbl.com.pk/http://www.fwbl.com.pk/http://www.pakistan.gov.pk/http://www.pakistan.gov.pk/http://www.moip.gov.pk/http://www.moip.gov.pk/http://www.punjab.gov.pk/http://www.punjab.gov.pk/http://www.sindh.gov.pk/http://www.sindh.gov.pk/http://www.khyberpakhtunkhwa.gov.pk/http://www.khyberpakhtunkhwa.gov.pk/http://www.balochistan.gov.pk/http://www.balochistan.gov.pk/http://www.gilgitbaltistan.gov.pk/http://www.gilgitbaltistan.gov.pk/http://www.ajk.gov.pk/http://www.ajk.gov.pk/http://www.tdap.gov.pk/http://www.tdap.gov.pk/http://www.secp.gov.pk/http://www.secp.gov.pk/http://www.fpcci.com.pk/http://www.fpcci.com.pk/http://www.sbp.org.pk/http://www.sbp.org.pk/http://www.sbp.org.pk/http://www.fpcci.com.pk/http://www.secp.gov.pk/http://www.tdap.gov.pk/http://www.ajk.gov.pk/http://www.gilgitbaltistan.gov.pk/http://www.balochistan.gov.pk/http://www.khyberpakhtunkhwa.gov.pk/http://www.sindh.gov.pk/http://www.punjab.gov.pk/http://www.moip.gov.pk/http://www.pakistan.gov.pk/http://www.fwbl.com.pk/http://www.nbp.com.pk/http://www.smeda.org.pk/http://www.pmo.gov.pk/


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CASH FLOW ASSUMPTIONS

Accounts receivable cycle (in days) 30

Accounts payable cycle (in days) 30

WIP (Days) 1

Finished Goods (Days) 7Raw Materials Inventory (Days) 30

Cash on Hand 360,000

REVENUE ASSUMPTIONS

DescriptionPer KGPrice Price Per 120 KG Share

In 120Kgs Amount

Apple65 7,800 50% 2,412.80 18,819,840

Peach60 7,200 30% 1,809.60 13,029,120

Guava60 7,200 20% 1,206.40 8,686,080

Plum60 7,200 10% 603.20 4,343,040

Total 5,429 44,878,080

Sale price growth rate (10%) OR(times) 1.1

Products in Pieces 120 KG Each Drum

COST OF GOODS SOLD ASSUMPTIONS

COGS Year 1 ShareCost Per

KG Kg Amount

Apple 40% 35 399,360 13,977,600

Peach 30% 35 299,520 10,483,200

Guava 20% 30 199,680 5,990,400

Plum 10% 30 99,840 2,995,200

Others (Preservatives) 100% 2 998,400 1,996,800

Others (Drums for packing) 750 8,320 6,240,000

COGS Growth Rate (9%) OR (times) 1.09



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EXPENSES ASSUMPTIONS

Electricity Expenses Per/Year(RS) (60,000/Month) 720,000

Water Charges (4,500/Month) 54,000

Telephone Charges (3,500/Month) 42,000

Machine maintenance Cost /year (Lump sumprovision) 145,000

Growth in maintenance cost (3%) OR (times) 1.03

Rent (12 months* 18,000/Month) 216,000

FINANCIAL ASSUMPTIONS

Project Life (Years) 10

Debt 90%

Equity 10%

Interest rate on long term loan 8%

Debt tenure (years) 8

Grace Period (Years) 1

fruit grading & packing (rs. 2.2 million)

Documents