Pre-Feasibility Study
Prime Minister’s Small Business Loan
Scheme
(Bakery and Confectionery Business)
Small and Medium Enterprises Development Authority
Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan e Iqbal, Egerton Road,
Lahore
Tel 92 42 111 111 456, Fax 92 42 36304926-7
helpdesk@smeda.org.pk
REGIONAL OFFICE
PUNJAB
REGIONAL OFFICE
SINDH
REGIONAL OFFICE
KPK
REGIONAL OFFICE
BALOCHISTAN
3rd Floor, Building No. 3,
Aiwan e Iqbal, Egerton Road
Lahore,
Tel: (042) 111-111-456
Fax: (042)6304926-7
helpdesk.punjab@smeda.org.pk
5TH Floor, Bahria
Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 5610572
helpdesk-khi@smeda.org.pk
Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 9213046-47
Fax: (091) 286908
helpdesk-pew@smeda.org.pk
Bungalow No. 15-A
Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 831623, 831702
Fax: (081) 831922
helpdesk-qta@smeda.org.pk
September 2013
Pre-feasibility Study
Bakery and Confectionery
Table of 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 & PRODUCT ................................................ 4
7
CRITICAL FACTORS...............................................................................................5
8
INSTALLED & OPERATIONAL CAPACITIES .......................................................... 5
9
POTENTIAL TARGET MARKET ..............................................................................5
10 PROJECT COST SUMMARY ..................................................................................5
10.1
Project Economics .........................................................................................6
10.2
Project Financing ...........................................................................................6
10.3
Project Cost ...................................................................................................7
10.4
Space Requirement .......................................................................................7
10.5
Machinery and Equipment Requirements ...................................................... 8
10.6
Furniture & Fixtures and Other Equipments ................................................... 9
10.7
Raw Material Requirements........................................................................... 9
10.8
Human Resource Requirement ................................................................... 10
10.9
Revenue Generation.................................................................................... 10
10.10
Utilities and Other Costs .............................................................................. 11
11 ANNEXURE ...........................................................................................................12
11.1
Income Statement ....................................................................................... 12
11.2
Statement of Cash Flow .............................................................................. 13
11.3
Balance Sheet ............................................................................................. 14
11.4
Useful Project Management Tips ................................................................. 15
11.5
Useful Links ................................................................................................. 16
12 KEY ASSUMPTION ............................................................................................... 17
12.1
Raw Material Assumptions .......................................................................... 17
12.2
Sales Assumptions ...................................................................................... 24
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Pre-feasibility Study
Bakery and Confectionery
1 DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the said matter. 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 from
case 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
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Pre-feasibility Study
Bakery and Confectionery
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 concept
development, start-up, and production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in Bakery and
Confectionery 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 thumb rules; best practices developed by existing
enterprises by trial and error, and certain industrial norms that become a guiding
source regarding various aspects of business set-up and it’s 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) was
established 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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Pre-feasibility Study
Bakery and Confectionery
4 INTRODUCTION TO SCHEME
Prime Minister’s ‘Small Business Loans Scheme’, for young entrepreneurs, with
an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide
subsidised financing at 8% mark-up per annum for one hundred thousand
(100,000) beneficiaries, through designated financial institutions, initially through
National Bank of Pakistan (NBP) and First Women Bank Ltd. (FWBL).
Small business loans with tenure upto 7 years, and a debt : equity of 90 : 10 will
be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh,
Khyber Pakhtunkhwah, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and
Federally Administered Tribal Areas (FATA).
5 EXECUTIVE SUMMARY
Bakery & Confectionery business is growing in both urban and semi-urban areas.
This pre-feasibility study encompasses the bakery business located in
commercial neighborhood surrounding and middle income residential localities.
Major products include cakes, snacks, sweets, nimko, biscuits, bread and
general confectionery items, which will be sold to target customers of vicinity.
The sales outlet will be supported by an in house production facility. Selections of
adequate product mix and business location, supported by marketing efforts are
the critical success factors.
This Bakery & Confectionery business will be started as sole proprietorship with
an investment of Rs. 2.04 million. This project is based on 90% debt and 10%
equity ratio. Projected IRR and Payback of this project are 57% and 2.76 years
respectively. The business will provide employment opportunity to 06 individuals
including the owner manager.
6 BRIEF DESCRIPTION OF PROJECT & PRODUCT
The proposed Bakery & Confectionery shop is a small scale project with a
production area and sales out-let. It will be equipped with basic machinery and
fixtures. The production area will require covered area of 2,700 sqft and the
outlet will be established on 900 sqft. The sales outlet will remain open for
business for 16 hours per day around the year.
Product mix will include cakes, snacks, sweets, nimko, biscuits, bread and
general confectionery items. This merchandise will be prepared and acquired
according to the demand of local customers and in quantities directly proportional
to expected sales.
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Bakery and Confectionery
Out of total sales revenue 70% will come from bakery items and balance 30%
from general confectionery items. Maximum sales are expected during Eid
Seasons and in winters. First year revenues of the project are estimated to be Rs
11.24 million. It is expected that production growth rate will be 5% per annum
along with 10% per annum increase in sales price.
7 CRITICAL FACTORS
•
•
•
•
•
•
Background knowledge and experience of the entrepreneur in the bakery
business.
Induction of trained human resource for production of requisite items.
Maintenance of Quality and hygiene standards.
Pricing strategy & understanding requirements of the target customers.
Decor presentation and layout of the shop and products.
Locational considerations for easy access of the customers.
8 INSTALLED & OPERATIONAL CAPACITIES
As mentioned the sales of bakery items is 70 % of total sales revenue. The
installed capacity of bakery depends on the variety of the products being
produced. Installed capacity of major production items is cakes 23,758 pounds,
40,470 pieces of snacks, 11,812 pounds of sweets and nimko, and 11,800
pounds of mixed biscuits.
Starting capacity utilization is 70% of the installed capacity growing at the rate of
5% per annum.
9 POTENTIAL TARGET MARKET
Areas having presence of middle income groups in the smaller cities will be ideal
location for opening sales outlet of the business. Ideally production facility of the
workshop should be located alongside the sales outlet; however, if the rental
costs are a constraint, production facility can be established at a distant
economical location. In such a case, higher transportation costs may need to be
factored in.
Smaller cities with growing middle income group such as Sargodha, shekhupura,
Gujrat, Sukkur, Hyderabad, Nowshehra, Charsadda, Khuzdar and Gilgit are
some of the prospective cities for setting up this business.
10 PROJECT COST SUMMARY
A detailed financial model has been developed to analyze the commercial
viability of [the project] under the Prime Minister’s Small Business Loan Scheme.
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Pre-feasibility Study
Bakery and Confectionery
Various cost and revenue related assumptions along with results of the analysis
are outlined in this section.
The projected Income Statement, Cash Flow Statement and Balance Sheet are
attached as annexure.
10.1 Project Economics
All the figures in this financial model have been calculated for estimated sales of
Rs. 11.24 million in the year one. The capacity utilization during year one is
worked out at 70% with 5% increase in subsequent year’s up to the maximum
capacity utilization of 95%.
The following table shows internal rates of return and payback period.
Table 1: Project Economics
Description
Details
Internal Rate of Return (IRR)
51%
Payback Period (yrs)
2.76
Net Present Value (Rs.)
4,134,165
Project returns are based on the margins of the items sold. Profitability of the
business is highly dependent on raw material cost. Moreover, in bakery or food
item businesses the probability of wastage is higher, hence reducing of wastage
through demand and supply analysis will play a vital role in profit maximization. In
this regard, efficient supply chain management will be an appropriate strategy for
this venture.
Another crucial factor for the success of this project is to maintain the hygienic
standards and clean environment to avoid customer complaints.
10.2 Project Financing
Following table provides details of the equity required and variables related to
bank loan;
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Bakery and Confectionery
Table 2: Project Finance
Description
Details
Total Equity (10%)
Rs. 204,144
Bank Loan (90%)
Rs. 1,837,298
Markup to the Borrower (%age/annum)
8%
Tenure of the Loan (Years)
7
10.3 Project Cost
Following fixed and working capital requirements have been identified for
operations of the proposed business.
Table 3: Capital Investment for the Project
Description
Amount Rs.
Capital Cost
Plant and Machinery
1,124,000
Furniture, Fixture and Office Equipment
Motor Vehicles
270,000
45,000
Pre-operating Cost
120,000
Total Capital Cost
1,559,000
Working Capital
Raw Material Inventory
106,692
Up-front Building Rent
225,000
Cash
150,000
Total Working Capital
481,692
Total Project Cost
2,041,442
*Pre-paid Building and Shop Rent (for 1 Kanal @ Rs. 75,000 per month) 3 Months Rent
as Security and 1 Months Advance Rent calculated.
10.4
Space Requirement
Space requirements for the proposed bakery and confectionary unit mainly
include the production hall, store room and a retail outlet. For this purpose it is
recommended that a rented place of maximum 3.600 sqft (i.e. 2,700 sqft for
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Pre-feasibility Study
Bakery and Confectionery
production space and 900 sqft for outlet) would be acquired on rent basis in the
vicinity of newly developing housing societies in the major cities. The production
space and bakery outlet could be acquired at separate places. However, it
should be ensured that both the facilities are located closely for easy supply of
produced goods to the outlet.
Table 4: Space Requirement
Estimated Area
(Sqft)
Description
Production Space
2,700
35,000
900
40,000
Outlet Space
10.5
Monthly Rent (Rs.)
Machinery and Equipment Requirements
Plant, machinery and equipment for the proposed project are stated below.
Table 5: List of Plant Machinery and Equipment
Sr. No
Description of Item
Req. Qty
Unit Cost (Rs.) Total Cost (Rs.)
1
Flour Sifter
1
125,000
125,000
2
Mixer (60 Kg or 40 Ltr
Capacity
1
250,000
250,000
3
Cross Sheeter
1
200,000
200,000
4
Oven (8x8 ft)
1
350,000
350,000
5
Dyes
30
75
2,250
6
Deep Freezer
1
50,000
50,000
7
Fryer and Burner
2
15,000
30,000
8
Ceiling Machine
1
1,500
1,500
9
Moving Trolleys
2
10,000
20,000
10
Trays
30
200
6,000
11
UPS and Batteries
2
20,000
40,000
12
Misc. Tools &
Equipments (Pans,
Knives and others)
1
50,000
50,000
Total
1,124,750
The required machinery is easily available in the local markets. Used and new
machinery can be purchased from different markets in Lahore and Gujranwala.
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Pre-feasibility Study
Bakery and Confectionery
These requirements are based on the proposed production plans as mentioned
elsewhere.
10.6
Furniture & Fixtures and Other Equipments
In addition to the above plant machinery and equipment, following necessary
items will be required for the proposed venture.
Table 6: Furniture & Fixture and Other Equipment
Sr. No
Description of Item
1
Production Tables
2
Chairs & Other
Furniture
3
Cost of Renovation
and Interior
Designing
4
Air conditioner
5
Req. Qty
2
Unit Cost (Rs.) Total Cost (Rs.)
5,000
10,000
10,000
10,000
125,000
125,000
1
45,000
45,000
Vertical Freezer
1
30,000
30,000
6
Weighing Scales (For
Cash Counter &
Production)
1
5,000
5,000
7
Micro Wave Oven
1
10,000
10,000
8
Sign Board
1
10,000
10,000
9
Miscellaneous
1
25,000
25,000
Total
270,000
10.7 Raw Material Requirements
There is large number of raw materials required for production of different
varieties of bakery and confectionary products. The complete details of raw
materials along with recipe of different products are enclosed as Annexure 12.1.
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Pre-feasibility Study
Bakery and Confectionery
10.8 Human Resource Requirement
Table 7: Human Resource Requirement
Description
No. of Employees
Salary/ Month
(per person)
Owner Manager
1
25,000
Master Chef
1
20,000
Salesmen
2
10,000
Helpers
2
10,000
Total Staff
6
The owner of the business is recommended for personally managing the
operations of the proposed venture. Additionally, above HR composition shall be
engaged in order to manage the operational affairs of this project under the
supervision of the owner. The appropriate experience for Chef and Salesmen
would be required.
10.9 Revenue Generation
Following table provides the details of sales revenues for year one:
Table 8: Sales Revenue (1st Year)
1st Year Sales Revenue (Rs.)
Product Mix
% age of Sales
Bakery Sales
70%
8,645,315
General Item Sales
30%
2,593,595
Total Sales
11,238,910
The above sales revenues are based on following key operational assumptions:
Table 9: Operational Assumptions
No of Working Days
355
No. of Working Hours/day
16
No. of Shifts/day
2
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Pre-feasibility Study
Bakery and Confectionery
10.10 Utilities and Other Costs
An essential cost to be borne by the company is the cost of electricity and gas.
The electricity expenses are estimated to be around Rs. 50,000 per month,
whereas, gas expenses are estimated to be Rs. 45,000 (including both natural
gas and LPG). Considering the non availability or low pressure of natural gas
alternate burning fuels i.e. LPG, wood or kerosene oil may need to be
considered. The advance procurement of raw materials and packing material for
at least 03 days along with 02 days finished goods stock level will be maintained
for uninterrupted sales of goods, at the production and outlet facility.
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Pre-feasibility Study
Bakery and Confectionery
11 ANNEXURE
11.1 Income Statement
Income Statement
Year 1
11,238,910
Year 2
13,419,982
Year 3
15,747,024
Year 4
18,405,275
Year 5
21,437,705
Year 6
24,892,570
Year 7
27,401,857
Year 8
30,142,043
Year 9
33,156,247
Year 10
36,471,872
7,681,843
236,667
240,000
20,708
345,139
8,524,357
2,714,552
9,172,615
263,123
264,000
24,727
412,118
10,136,583
3,283,398
10,763,159
288,758
290,400
29,015
483,580
11,854,911
3,892,113
12,580,085
316,888
319,440
33,913
565,213
13,815,538
4,589,737
14,652,764
347,756
351,384
39,500
658,337
16,049,741
5,387,964
17,014,179
381,630
386,522
45,866
764,433
18,592,630
6,299,940
18,729,288
419,092
425,175
50,489
841,491
20,465,535
6,936,322
20,602,216
459,895
467,692
55,538
925,641
22,510,983
7,631,060
22,662,438
504,671
514,461
61,092
1,018,205
24,760,868
8,395,379
24,928,682
553,807
565,907
67,202
1,120,025
27,235,623
9,236,249
780,000
78,000
900,000
360,000
56,195
15,600
7,800
112,389
143,975
12,000
855,942
85,594
990,000
396,000
67,100
17,119
8,559
134,200
143,975
12,000
939,278
93,928
1,089,000
435,600
78,735
18,786
9,393
157,470
143,975
12,000
1,030,727
103,073
1,197,900
479,160
92,026
20,615
10,307
184,053
143,975
12,000
1,131,080
113,108
1,317,690
527,076
107,189
22,622
11,311
214,377
143,975
12,000
1,241,204
124,120
1,449,459
579,784
124,463
24,824
12,412
248,926
143,975
12,000
1,362,049
136,205
1,594,405
637,762
137,009
27,241
13,620
274,019
143,975
12,000
1,494,660
149,466
1,753,845
701,538
150,710
29,893
14,947
301,420
143,975
12,000
1,640,182
164,018
1,929,230
771,692
165,781
32,804
16,402
331,562
143,975
12,000
1,799,873
179,987
2,122,153
848,861
182,359
35,997
17,999
364,719
143,975
12,000
2,465,959
248,594
2,710,489
572,909
2,978,164
913,949
3,273,836
1,315,901
3,600,427
1,787,537
3,961,166
2,338,774
4,338,285
2,598,037
4,752,455
2,878,605
5,207,646
3,187,733
5,707,923
3,528,326
Earnings Before Interest & Taxes
248,594
572,909
913,949
1,315,901
1,787,537
2,338,774
2,598,037
2,878,605
3,187,733
3,528,326
Interest expense on long term debt (Project Loan)
Interest expense on long term debt (Working Capital Loan)
Subtotal
Earnings Before Tax
139,611
139,611
108,983
122,676
122,676
450,233
104,337
104,337
809,612
84,475
84,475
1,231,426
62,964
62,964
1,724,573
39,668
39,668
2,299,105
14,439
14,439
2,583,598
2,878,605
3,187,733
3,528,326
Tax
NET PROFIT/(LOSS) AFTER TAX
108,983
5,023
445,210
43,942
765,670
107,214
1,124,213
192,414
1,532,159
307,321
1,991,784
368,399
2,215,199
442,151
2,436,454
519,433
2,668,300
604,581
2,923,744
Balance brought forward
Total profit available for appropriation
Dividend
Balance carried forward
108,983
108,983
108,983
554,193
554,193
554,193
1,319,863
1,319,863
1,319,863
2,444,076
2,444,076
2,444,076
3,976,234
3,976,234
3,976,234
5,968,019
5,968,019
5,968,019
8,183,217
8,183,217
8,183,217
10,619,671
10,619,671
10,619,671
13,287,971
13,287,971
13,287,971
16,211,716
16,211,716
Revenue
Cost of sales
Cost of goods sold 1
Operation costs 1 (direct labor)
Operating costs 3 (direct electricity)
Operating costs 4 (direct water)
Operating costs 5 (direct gas)
Total cost of sales
Gross Profit
General administration & selling expenses
Administration expense
Administration benefits expense
Building rental expense
Electricity expense Outlet
Travelling expense
Communications expense (phone, fax, mail, internet, etc.)
Office expenses (stationary, entertainment, janitorial services, etc.)
Promotional expense
Depreciation expense
Amortization of pre-operating costs
Miscellaneous expense 1
Subtotal
Operating Income
68%
2%
2%
76%
7%
1%
8%
3%
1%
0.14%
0.07%
1%
1%
0.11%
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Pre-feasibility Study
Bakery and Confectionery
11.2 Statement of Cash Flow
Cash Flow Statement
Year 0
Operating activities
Net profit
Add: depreciation expense
amortization of pre-operating costs
Deferred income tax
Finished goods inventory
Equipment inventory
Raw material inventory
Pre-paid building rent
Accounts payable
Cash provided by operations
Financing activities
Project Loan - principal repayment
Additions to Project Loan
Issuance of shares
Cash provided by / (used for) financing activities
Investing activities
Capital expenditure
Acquisitions
Cash (used for) / provided by investing activities
NET CASH
Cash balance brought forward
Cash available for appropriation
Dividend
Cash balance
Cash carried forward
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
(331,692)
108,983
143,975
12,000
(120,061)
(33,445)
(22,500)
321,451
410,403
445,210
143,975
12,000
5,023
(20,855)
(40,744)
(24,750)
62,939
582,798
765,670
143,975
12,000
43,942
(23,878)
(51,676)
(27,225)
67,488
930,296
1,124,213
143,975
12,000
107,214
(27,245)
(65,403)
(29,948)
77,356
1,342,162
1,532,159
143,975
12,000
192,414
(31,046)
(82,617)
(32,942)
88,574
1,822,517
1,991,784
143,975
12,000
307,321
(35,335)
(80,258)
(36,236)
100,343
2,403,594
2,215,199
143,975
12,000
368,399
(25,824)
(96,775)
(39,860)
74,461
2,651,575
2,436,454
143,975
12,000
442,151
(28,409)
(117,098)
(43,846)
81,782
2,927,009
2,668,300
143,975
12,000
519,433
(31,248)
(141,689)
(48,231)
90,489
3,213,030
2,923,744
143,975
12,000
604,581
(34,372)
816,396
530,538
59,583
5,056,446
1,837,298
204,144
2,041,442
(204,028)
(204,028)
(220,962)
(220,962)
(239,302)
(239,302)
(259,164)
(259,164)
(280,674)
(280,674)
(303,970)
(303,970)
(329,199)
(329,199)
(106,692)
(225,000)
-
-
-
(1,559,750)
-
-
-
-
-
-
-
-
-
-
(1,559,750)
-
-
-
-
-
-
-
-
-
-
150,000
150,000
150,000
150,000
206,376
361,836
690,995
1,082,998
1,541,843
2,099,624
2,322,376
2,927,009
3,213,030
5,056,446
150,000
356,376
356,376
356,376
356,376
718,212
718,212
718,212
718,212
1,409,206
1,409,206
1,409,206
1,409,206
2,492,205
2,492,205
2,492,205
2,492,205
4,034,048
4,034,048
4,034,048
4,034,048
6,133,672
6,133,672
6,133,672
6,133,672
8,456,047
8,456,047
8,456,047
8,456,047
11,383,056
11,383,056
11,383,056
11,383,056
14,596,086
14,596,086
14,596,086
14,596,086
19,652,532
19,652,532
19,652,532
13
Pre-feasibility Study
Bakery and Confectionery
11.3 Balance Sheet
Balance Sheet
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
150,000
106,692
225,000
481,692
356,376
120,061
140,137
247,500
864,074
718,212
140,916
180,881
272,250
1,312,259
1,409,206
164,795
232,557
299,475
2,106,033
2,492,205
192,039
297,960
329,423
3,311,627
4,034,048
223,085
380,576
362,365
5,000,074
6,133,672
258,420
460,834
398,601
7,251,527
8,456,047
284,244
557,610
438,461
9,736,362
11,383,056
312,653
674,708
482,307
12,852,724
14,596,086
343,901
816,396
530,538
16,286,921
19,652,532
378,273
20,030,804
Fixed assets
Machinery & equipment
Furniture, fixtures and Office Equipment
Office vehicles
Total Fixed Assets
1,124,750
270,000
45,000
1,439,750
1,012,275
243,000
40,500
1,295,775
899,800
216,000
36,000
1,151,800
787,325
189,000
31,500
1,007,825
674,850
162,000
27,000
863,850
562,375
135,000
22,500
719,875
449,900
108,000
18,000
575,900
337,425
81,000
13,500
431,925
224,950
54,000
9,000
287,950
112,475
27,000
4,500
143,975
Intangible assets
Pre-operation costs
Total Intangible Assets
TOTAL ASSETS
120,000
120,000
2,041,442
108,000
108,000
2,267,849
96,000
96,000
2,560,059
84,000
84,000
3,197,858
72,000
72,000
4,247,477
60,000
60,000
5,779,949
48,000
48,000
7,875,427
36,000
36,000
10,204,287
24,000
24,000
13,164,674
12,000
12,000
16,442,896
20,030,804
321,451
321,451
384,390
384,390
451,879
451,879
529,235
529,235
617,809
617,809
718,151
718,151
792,612
792,612
874,394
874,394
964,884
964,884
1,024,466
1,024,466
1,633,270
1,633,270
5,023
1,412,308
1,417,332
48,965
1,173,007
1,221,972
156,179
913,843
1,070,022
348,593
633,169
981,762
655,914
329,199
985,113
1,024,313
1,024,313
1,466,464
1,466,464
1,985,897
1,985,897
2,590,478
2,590,478
204,144
108,983
313,127
2,267,849
204,144
554,193
758,337
2,560,059
204,144
1,319,863
1,524,007
3,197,858
204,144
2,444,076
2,648,220
4,247,477
204,144
3,976,234
4,180,379
5,779,949
204,144
5,968,019
6,172,163
7,875,427
204,144
8,183,217
8,387,361
10,204,287
204,144
10,619,671
10,823,815
13,164,674
204,144
13,287,971
13,492,115
16,442,896
204,144
16,211,716
16,415,860
20,030,804
Assets
Current assets
Cash & Bank
Finished goods inventory
Raw material inventory
Pre-paid building rent
Total Current Assets
Liabilities & Shareholders' Equity
Current liabilities
Accounts payable
Total Current Liabilities
Other liabilities
Deferred tax
Long term debt (Project Loan)
Total Long Term Liabilities
Shareholders' equity
Paid-up capital
Retained earnings
Total Equity
TOTAL CAPITAL AND LIABILITIES
-
1,837,298
1,837,298
204,144
204,144
2,041,442
14
-
Pre-feasibility Study
11.4 Useful Project Management Tips
Technology
•
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
and alternate 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
•
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 & Point of Sales Promotion: Business promotion and dissemination
through banners and launch events is highly recommended. Product
broachers from good quality service providers
•
Price - Bulk Discounts, Cost plus Introductory Discounts: Price should
never be allowed to compromise quality. 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 master chef
should be considered an investment even to the extent of offering share in
business profit.
15
Pre-feasibility Study
11.5 Useful Links
Prime Minister’s Office, www.pmo.gov.pk
Small and Medium Enterprise Development Authority, www.smeda.org.pk
National Bank of Pakistan (NBP), www.nbp.com.pk
First Women Bank Limited (FWBL), www.fwbl.com.pk
State Bank of Pakistan (SBP), www.sbp.org.pk
Government of Pakistan, www.pakistan.gov.pk
Ministry of Industries & Production, www.moip.gov.pk
Ministry of Education, Training & Standards in Higher Education,
http://moptt.gov.pk
Government of Punjab, www.punjab.gov.pk
Government of Sindh, www.sindh.gov.pk
Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk
Government of Balochistan, www.balochistan.gov.pk
Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk
Government of Azad Jamu Kashmir, www.ajk.gov.pk
Security Commission of Pakistan (SECP), www.secp.gov.pk
16
Pre-feasibility Study
Bakery and Confectionery
12 KEY ASSUMPTION
12.1 Raw Material Assumptions
Plain & Dry Cakes
Plain cakes
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Units of
measure
Quantity
Rate
Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Butter
Kg
280
450
125,959
21.73%
303
225
225
102.058
Sugar
Kg
50
60
2,986
3.86%
333
40
40
18.144
Maida
Kg
373
50
18,661
28.97%
393
300
300
136.078
Baking powder
Kg
12
60
746
0.97%
12
10
10
4.536
Eggs
Pcs
11,594
7
81,157
34.77%
7,261
9
360
163.293
Flavor
Ltr.
1
500
311
0.05%
1
0.5
1
0.227
Cream and Honey
Kg
124
400
49,762
9.66%
100
100
45.359
279,581
100.00%
Raw material:
8,302
1036
Plain fruit cakes
Units of
measure
Quantity
Rate
Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Butter
Kg
316
450
142,012
24.498%
162
250
250
Sugar
Kg
50
60
3,030
3.920%
178
40
40
Raw material:
17
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Pre-feasibility Study
Bakery and Confectionery
Maida
Kg
316
50
15,779
24.498%
211
250
250
Baking powder
Kg
13
60
757
0.980%
6
10
10
Fruit Chunks
Kg
379
60
22,722
29.397%
66
300
300
Sougi
Kg
63
80
5,049
4.900%
66
50
50
Eggs
Pcs
3,865
7
27,052
11.759%
3,888
3
120
Flavors
Ltr.
1
500
316
0.049%
0.32
0.5
0.5
216,716
100%
4,578
1020.5
Dry cakes
Units of
measure
Quantity
Rate
Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Butter
Kg
357
450
160,629
22.167%
545
225
225
Sugar
Kg
63
60
3,807
3.941%
545
40
40
Maida
Kg
436
50
21,814
27.094%
545
275
275
Baking powder
Kg
16
60
952
0.985%
22
10
10
Eggs
Pcs
14,492
7
101,446
35.468%
16,364
9
360
Flavor
Ltr.
8
500
3,966
0.493%
1.09
5
5
Cream + Honey
Kg
159
400
63,458
9.852%
100
100
356,072
100.000%
Raw material:
18,023
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
1015
Sweets & Nimko
Nimko
Raw material:
Units of
measure
Quantity
Rate
Cost
%
ingredients
18
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Pre-feasibility Study
Bakery and Confectionery
Baison
Kg
485
90
43,639
68.293%
491
700
700
Dry Fruit
Kg
139
160
22,166
19.512%
123
200
200
Channey
Kg
69
120
8,312
9.756%
61
100
100
Nimko Masala
Kg
17
150
2,598
2.439%
25
2525
25 25
25
Sweets
Units of
measure
Quantity
Rate
Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Khoya
Kg
1,801
400
720,290
33.816%
1,050
350
350
Maida
Kg
1,158
50
57,880
21.739%
263
225
225
Eggs
Kg
21,300
7
149,100
15.459%
131
4
160
Ghee
Kg
772
175
135,054
14.493%
53
150
150
Sugar syrup or
Sugar
Kg
772
800
617,391
14.493%
919
150
150
1,679,716
100%
2,415
Raw material:
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
1035
Chicken Bread
Units of
measure
Quantity
Rate
Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Maida
Kg
416.02
50
20,801
14.648%
336.00
150
150
Oil
Ltr
55.47
190
10,539
1.953%
33.60
20
20
Yeast
Kg
5.55
180
998
0.195%
1.68
2
2
Sugar
Kg
69.34
60
4,160
2.441%
33.60
25
25
Salt
Kg
5.55
8
44
0.195%
3.60
2
2
Chicken
Kg
970.70
275
266,943
34.180%
480.00
350
350
Raw material:
19
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Pre-feasibility Study
Bakery and Confectionery
Onion
Kg
346.68
40
13,867
12.207%
720.00
125
125
Masala
Kg
138.67
84
11,648
4.883%
84.00
50
50
Cheese
Kg
277.34
800
221,875
9.766%
180.00
100
100
Mayonnaise &
Ketchup
Kg
138.67
90
12,480
4.883%
120.00
50
50
Mix Vegetable
Kg
416.02
80
33,281
14.648%
120.00
150
150
596,639
100.000%
2,112
1024
1024
Qty
Ingredients
For Making 1
Kg (gms)
2,840
Fresh Cream cakes
Units of
measure
Quantity
Rate
Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Butter
Kg
491
450
221,135
12.207%
545
80
125
Sugar
Kg
393
60
23,588
9.766%
545
100
100
Maida
Kg
491
50
24,571
12.207%
545
100
125
Baking powder
Kg
8
60
472
0.195%
22
2
2
Eggs
Pcs
16,103
7
112,718
15.625%
16,364
4
160
Flavor
Ltr.
8
500
3,931
0.195%
1.09
2
2
Fresh Cream
Kg
2,005
300
601,486
49.805%
510
510
987,899
100.000%
Raw material:
* Assume 20% extra cost for this type of Cakes
18,023
Qty
Ingredients
For Making
1 Pound
(gms)
1024
1,185,479
Pastries & Puff etc
Raw material:
Butter
Units of
measure
Quantity
Rate
Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Kg
315
450
141,526
12.207%
545
100
20
Qty
Ingredients
For Making 1
Kg (gms)
125
Qty
Ingredients
For Making
1 Pound
(gms)
Pre-feasibility Study
Bakery and Confectionery
Sugar
Kg
252
60
15,096
9.766%
545
100
100
Maida
Kg
315
50
15,725
12.207%
545
100
125
Baking powder
Kg
5
60
302
0.195%
22
2
2
Eggs
Pcs
10,306
7
72,139
15.625%
16,364
4
160
Flavor
Ltr.
5
500
2,516
0.195%
1.09
2
2
Fresh Cream
Kg
1,283
300
384,951
49.805%
510
510
632,256
100.000%
18,023
1024
-
100.000%
407
1030
Bread
-
Biscuits etc
Units of
measure
Quantity
Rate
Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Butter
Kg
873
450
392,828
16.393%
303
170
170
Sugar
Kg
770
60
46,215
14.465%
333
150
150
Maida
Kg
1,797
50
89,863
33.751%
393
350
350
Baking powder
Kg
26
60
1,541
0.482%
12
5
5
Eggs
Pcs
47,925
7
335,475
34.716%
7,261
9
360
Flavor
Ltr.
10
500
5,135
0.193%
1
2
2
871,056
100%
8,302
Raw material:
Snacks
Per Piece
Chicken Drum stick Leg Piece
45.5
161,525
Chicken Leg Piece
21
Qty
Ingredients
For Making 1
Kg (gms)
1037
Qty
Ingredients
For Making
1 Pound
(gms)
Pre-feasibility Study
Bakery and Confectionery
63
268,380
21
111,825
35
62,125
17.5
155,313
21
74,550
Chicken Shami
Chicken Sandwich
Chicken Patties
Chicken Bread roll
22
Pre-feasibility Study
Bakery and Confectionery
Chicken Pizza
Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty Ingredients
For Making 1 Kg
(gms)
50
46,529
19.417%
336.00
200
200
69.79
190
13,261
1.456%
33.60
15
15
Kg
4.65
180
838
0.097%
1.68
1
1
Sugar
Kg
93.06
60
5,583
1.942%
33.60
20
20
Salt
Kg
18.61
15
279
0.388%
3.60
4
4
Chicken
Kg
1,395.87
275
383,865
29.126%
480.00
300
300
Onion
Kg
930.58
40
37,223
19.417%
720.00
200
200
Masala
Kg
186.12
84
15,634
3.883%
84.00
40
40
Cheese
Kg
465.29
800
372,233
9.709%
180.00
100
100
Mayonnaise &
Ketchup
Kg
232.65
90
20,938
4.854%
120.00
50
50
Mix Vegetables
Kg
465.29
80
37,223
9.709%
120.00
100
100
933,607
100%
2,112
Units of
measure
Quantity
Rate
Maida
Kg
930.58
Oil
Ltr
Yeast
Raw material:
4,793
23
1030
Pre-feasibility Study
12.2 Sales Assumptions
Description
Fresh Cream Cakes
Fresh cream
Fresh fruit
Chocolate Cakes
Butter cream cakes
Total
Fresh & Chocolate
Pastries
Donuts
Cream puff
Cream roll
Total
Bread (Out Sourced)
Bread, Bun, Rusk Etc.
Total
Dry cakes
Dry cakes
Fruit cakes large
Fruit cakes small
Plain cakes large
Plain cakes small
Total
Snacks
Chicken pizza large
Chicken pizza medium
Chicken pizza small
Chicken bread
Chicken drum stick leg
piece
Chicken leg piece
Chicken shami
Chicken sandwich
Chicken patties
Chicken bread roll
Total
Units
Sales per
Day (Qty)
Pounds
Pounds
Pounds
Pounds
10
5
5
5
3,550
1,775
1,775
1,775
8,875
180
180
180
180
639,000
319,500
319,500
319,500
1,597,500
Pounds
5
1,775
180
319,500
Pounds
Pounds
Pounds
5
3
3
1,775
1,065
1,065
5,680
180
180
180
319,500
191,700
191,700
1,022,400
Kgs
10
3,550
110
390,500
390,500
Pounds
Pounds
Pounds
Pounds
Pounds
10
3
5
3
5
3,550
1,065
1,775
1,065
1,775
9,230
180
140
140
120
120
639,000
149,100
248,500
127,800
213,000
1,377,400
Pcs
Pcs
Pcs
Pcs
5
10
14
8
1,775
3,550
4,970
2,840
380
200
100
380
674,500
710,000
497,000
1,079,200
Pcs
10
3,550
65
230,750
Pcs
Pcs
Pcs
Pcs
Pcs
12
15
5
25
10
4,260
5,325
1,775
8,875
3,550
40,470
90
30
50
25
30
383,400
159,750
88,750
221,875
106,500
4,151,725
24
Sales Per
Year (Qty)
Sales Price
/ Unit (Rs.)
Annual
Sales (Rs.)
Pre-feasibility Study
Description
Units
Sales per
Day (Qty)
Sales Per
Year (Qty)
Sales Price
/ Unit (Rs.)
Annual
Sales (Rs.)
Sweets & Nimko
Nimko
Gulab Jaman
Chum Chum
Kalakand
Burfi
Moti Choor
Pateesa
Total
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
2
3
3
2
3
3
1
15
710
1,065
1,065
710
1,065
1,065
355
5,325
400
375
375
375
375
375
375
284,000
399,375
399,375
266,250
399,375
399,375
133,125
2,280,875
Biscuits
Cake Rusk
White Biscuits
Coconut Biscuits
Macaroon Coconut
Almond Macaroon
Cheese Finger
Salty Zeera Plus
Plain Khatai
Baker Khani
Finger
Jam Wafer
Special Biscuit
Chocolate Biscuits
Round Almond Biscuit
Total
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
2
1
1
1
1
1
1
1
1
1
1
1
1
1
15
710
355
355
355
355
355
355
355
355
355
355
355
355
355
5,325
320
320
320
320
320
320
320
320
320
320
320
320
320
320
227,200
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
1,704,000
25