Marble Mosaic Development Center

Pre-Feasibility Study
(Marble Mosaic Development Center)
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 Complex, Egerton Road, Lahore Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
helpdesk@smeda.org.pk
REGIONAL OFFICE Punjab 3rd Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road Lahore, Tel: (042) 111-111-456 Fax: (042) 36304926-7 helpdesk.punjab@smeda.org.pk REGIONAL OFFICE Sindh 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 35610572 helpdesk-khi@smeda.org.pk REGIONAL OFFICE Khyber Pakhtunkhwa Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 111-111-456 Fax: (091) 5286908 helpdesk-pew@smeda.org.pk REGIONAL OFFICE Balochistan Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 2831623, 2831702 Fax: (081) 2831922 helpdesk-qta@smeda.org.pk
Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost December, 2013
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 AND PRODUCT ............................................................ 4 7. CRITICAL FACTORS ..................................................................................................................... 5 8. INSTALLED AND OPERATIONAL CAPACITY ........................................................................ 5 9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT ............................................................... 5 10. POTENTIAL TARGET MARKETS .............................................................................................. 5 11. PRODUCTION PROCESS FLOW ................................................................................................. 6 12. PROJECT COST SUMMARY ........................................................................................................ 7 12.1) PROJECT ECONOMICS .............................................................................................................. 7 12.2) PROJECT FINANCING ................................................................................................................ 7 12.3) PROJECT COST......................................................................................................................... 7 12.4) SPACE REQUIREMENT .............................................................................................................. 8 12.5) MACHINERY AND EQUIPMENT................................................................................................... 8 12.6) OFFICE EQUIPMENT .................................................................................................................. 8 12.7) RAW MATERIAL REQUIREMENTS .............................................................................................. 9 12.8) HUMAN RESOURCE REQUIREMENT.......................................................................................... 9 12.9) REVENUE GENERATION ............................................................................................................ 9 12.10) OTHER COSTS ........................................................................................................................ 10 13. CONTACT DETAILS OF EXPERTS / CONSULTANTS ......................................................... 10 14. ANNEXURES.................................................................................................................................. 11 14.1) 14.2) 14.3) 14.4) 14.5) INCOME STATEMENT (WITH10 YEARS PROJECTIONS) .......................................................... 11 CASH FLOW STATEMENT (WITH 10 YEARS PROJECTIONS) .................................................. 12 BALANCE SHEET (WITH10 YEARS PROJECTIONS) ................................................................ 13 USEFUL PROJECT MANAGEMENT TIPS .................................................................................. 14 USEFUL LINKS......................................................................................................................... 15
15. KEY ASSUMPTIONS .................................................................................................................... 16
Marble Mosaic Development Center
1.
DISCLAIMER
This information memorandum is to introduce the subject matter and provide a general idea and information on the 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 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 exercised 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 visit our website: www.smeda.org.pk
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
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, production, marketing, finance and business management. The purpose of this document is to facilitate potential investors in Marble Mosaic Development Centerbusiness 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 & 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 decisions.
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 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.
4.
INTRODUCTION TO SCHEME
Prime Ministers Youth Business Loan 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 bytheNational Bank of Pakistan (NBP) and theFirst Women Bank Ltd. (FWBL). Youth business loans from Rs. 0.1 million to 2.0 million with a tenure upto 8 years, inclusive of 01 year grace period and a debt : equity of 90 : 10 will be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan, Gilgit Baltistan, Azad Jammu &Kashmir and Federally Administered Tribal Areas (FATA).
5.
EXECUTIVE SUMMARY
Marble Mosaic Development Centeris proposed to be located at or near the marble processing clusters and in areas where basic infrastructure is available for easy transportation of raw material and finished goods. The products include Field Tiles, Split Face Tiles and Artisan Mosaic etc. The proposed project will have installed capacity of 23,088 sq. ft/ year on the basis of a daily shift of 8 hours, whereas,the operational capacity will be 19,856 sq. ft/year. The total Project Cost is Rs. 2.17 million, including the Capital Cost of 0.18 millionand the Working Capital of 1.99 million. Given the cost assumptions, IRR and payback are 82% and 1 year respectively.
6.
BRIEF DESCRIPTION OF PROJECT AND PRODUCT
Technology: This proposed unit will require split face machine for stone splitting and hand tools like tile nippersto produceMarble Mosaic, Field Tiles and Split Face Tiles. Location: The centerwill be located at or near marble processing clusters at Gujranwala, Lahore, Lasbela, Multan,Karachi, Peshawar, Rawalpindi, Rawat, Risalpur, Quettaor in areas where basic infrastructure is available for easy transportation of raw material and finished goods. Product: Initially, the center will process Field Tiles, Split Face Tiles, Artisan Mosaics (Borders, Medallions, Carpets and Rugs, Frames, and Kitchen Backsplash. Target Market: All major cities across Pakistan. Employment Generation: The proposed project will provide direct employment to 04 persons. Profitability:Financial Analysis shows that the center will be profitable from the very first year of the operation.
7.
CRITICAL FACTORS
The following factors should be considered thoroughly: Efficient and cost effective procurement system of raw material. Market knowledge and trends about the international and domestic market. Availability, training, and retention of skilled labour. Availability of electricity, water supplyand proximity to variety of supply sources and markets. Know-how about mesh mounted products. Effective marketing campaign.
8.
INSTALLED AND OPERATIONAL CAPACITY
Installed capacity of the project will be 23,088 sq. ft/ year on the basis of daily shift of 8 hours, whereas the production capacity of year 01will be19,856 sq. ft./year.
9.
GEOGRAPHICAL POTENTIAL FOR INVESTMENT
The Marble and Granite industry of Pakistan has a total estimated reserve of around 160 million tons.The marble and onyx mines of Pakistan are mainly located in Balochistan (Chaghi, Lasbela, Loralai, Mastong, and Naal),Khyber Pakhtunkhwah /FATA (Bunair, Mardan, Mohamand and Swat), Chitral, and Sindh (Dadu, Johi range). The major marble processing clusters are concentrated in Gujranwala, Islamabad,Rawalpindi, Karachi, Lasbela, Lahore, Peshawar, Swat, Buner, NowsheraandRisalpur. As the production is dependent upon the easy availability of marble and onyx, therefore, the project should be established in or aroundmarble and onyx mines. Resources like skilled labour, utilities, infrastructure and transportationare also easily available in these cities.
10. POTENTIAL TARGET MARKETS

Marble mosaic products are famous worldwide for their application in construction industry as well as for decorative purposes. Promising export markets for onyx mosaic are Central Asian Republics, United States of America, and Australia. Domestic market also carries a great untapped potential for marble mosaicwith a target market comprising architects, builders, corporate customers, domestic consumers and exporters of Faisalabad, Gujranwala, Hyderabad, Islamabad/Rawalpindi, Karachi, Kohat, Lahore, Lasbela, Nowshehra, Peshawar, Sargodha, Sialkot, and Quetta.
11. PRODUCTION PROCESS FLOW

Tesserae Sorting Colors Dimensions
Tesserae Procurement
Tesserae Storage
Split Face
Quality Inspection
Drying
Pasting on Mesh in Grids Pasting on Mesh in Grids Pasting on Mesh as per Designs
Tesserae Splitting
Packing
Filed Tiles
Quality Inspection
Drying
Checking in Grids Cutting and Shaping as per Design
Artisan Products
Quality Inspection
Drying
Designs
The Tesserae will be a combination of various colors and types of stones cut into different finishes and dimensions. The project will utilize four main types of finishes as per requirement i.e., tumbled, polished, unpolished, and split. Though the dimensions of Tesserae are demanded as per product design, but the recommended dimensions for this project are limited to the following: Tesserae of 1 length x 1 width x 1 cm thickness for Field Tiles. Tesserae of 1 length x 1 width x 1 cm thickness split into two for Split Face Tiles. For Artisan Mosaic, the common dimension of 1cm Length x 1 cm Width x 1cm thickness, however, dimension of 1.5cm, and 2cm are also used as per design requirement.
12. PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial viability of the Marble Mosaic Development Center.Various costs 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 23,088 sq. ft/ year with initial capacity utilizationat 19,856 sq.ft in year 0, reaching 20,779 sq. ft from the second year of operation. The following table shows internal rates of return and payback period. Table 1: Project Economics Description Internal Rate of Return (IRR) Payback Period (yrs) Net Present Value (NPV) 12.2) Project Financing Following table provides details of the equity required and variables related to bank loan: Table 2: Project Financing Description Total Equity (10%) Bank Loan (90 %.) Markup to the Borrower (%age/annum) Tenure of the Loan (Years) Grace period (year) 12.3) Project Cost Following requirements have been identified for operations of the proposed business. Table 3: Project Cost Project Cost Furniture & fixtures Office equipment / Machinery & Equipment Total Capital Cost Initial Working Capital Total Project Cost
Details 82% 1 Rs.32,576,715
Details Rs. 216,852 Rs. 1,951,664 8% 8 1
Amount (Rs.) 30,000 152,500 182,500 1,986,016 2,168,516
12.4) Space Requirement Following table shows total rental space requirement for the project on the basis of Rs 15/sq. ft. Table 4: Space Requirement Space Requirement (in ft.) Management building Production Area Store Grounds Total
Sq. ft 100 450 150 300 1,000
Total investment in building and infrastructure rent is calculated to be approximately Rs.180,000 per annum, which is reflected in the working capital. 12.5) Machinery and Equipment Following table provides list of machinery and equipment Table 5: List of Machinery and Equipment Description Split Face Machine(Local) Tile Nippers (Imported) Grids Total Quantity 01 02 05 08 Cost Rs/unit 110,000 10,000 2,500 Total Rs. 110,000 20,000 12,500 142,500
Split face machine will be operated manually for splitting the Tesserae into required sizes. Tile nippers are required to shape the Tesseraes as per the basic designs for Artesian Mosaic, whereas the Field Tiles will be pasted into the grades for 05 basic shapes. 12.6) Office Equipment The only office equipment required is a basic specifications computer to study and review different designs of mosaic. Table 6: Office Equipment Cost Computers Total Quantity 01 Cost Amount (Rs.) 10,000 10,000 10,000
12.7) Raw Material Requirements Following table shows raw material requirements: Table 7: Cost of Raw Material Description Unit Tesserae Sq. Ft Glue Sq Ft Mesh Sq Ft Others Total Cost of Material Per Month Table 8: Unit Cost of Goods Sold Description Artisan Mosaic Split Face Field Tiles Average Cost per Unit
Rate 287 14.5 14.5
Qty 1,655 1,655 1,655
Rs./Month 474,985 23,998 23,998 1,761 524,742
Unit sq. ft. sq. ft. sq. ft. sq. ft.
Rate (Rs) 330.21 320 310 317.064
12.8) Human Resource Requirement Table 9: Human Resource Requirement Description Skilled Labor
No. of Employees 04
Salary per month (Rs.) 44,000
The abovetable provides details of human resource required to run such a project on the basis of 312 days of operation per annum.Salaries of all employees are estimated to increase at 10% annually. 12.9) Revenue Generation Table 10: Revenue Generation Product Artisan Mosaic Split Face Field Tiles Total Sales Revenue Unit Sq. Ft Sq. Ft Sq. Ft Sales Price (Rs./Unit)* 2,000 500 350 First Year Production 2,780 8,538 8,538 19,948 First Year Sales Revenue (Rs) 5,560,000 4,269,000 1,684,800 12,817,300
Note: Figures are rounded off to the nearest decimal place
12.10) Other Costs Table 11: Utilities Product Electricity Water Communication Total Cost Rs./Month 15,000 6,000 3,000 24,000
13. CONTACT DETAILS OF EXPERTS / CONSULTANTS

Majoka Traders Business: Blades for Marble Machinery, Air Compressors, and Generator Contact Person: Mr. Waseem Chiragh Contact Detail: House No. 31, Asad Park, Phase II, Ahmed Block, Chuk No. 50, Shumali, Sargodha, Punjab. Cell No: 0333-3385278 Sohb Marble Mosaic Training Centre For Women Business: Marble Mosaic, Tesserae, and Trainings on Mosaic Contact Person: Mr. Abdul Nasir Contact Detail: Street No. 5, Akram Colony, Hub, Lasbela, Balochistan. Cell No: 0345-8100631 Mr. Mehtab Afridi Dimension Stone Center PCSIR Labs University Road, Peshawar 0345-9112690 N-Traders Business: Marble Machinery, and Marble Stone Supply Contact Person: Mr. Ilyas Contact Detail: Plot No. 100-110, Sector B, Street No. 2, Marble City Gadani, Lasbela, Balochistan. Cell No. 03462332552 Mr. Toufique Ahmad Pakistan Stone Development Company, Islamabad Islamabad Chamber of Commerce & Industry Building, Islamabad
10
Marble Mosaic Manufacturing Facility
14. ANNEXURES
Income Statement (With10 Years Projections)
YEAR- 1 SALES Artisan Mosaic Split Face Field Tiles Total Sales COST OF SALES Artisan Mosaic Split Face Field Tiles Total Cost of Goods Sold OPERATING EXPENSES Electricity Expense Payroll Expenses Deprecition Expense Machine Maintenance Expense Rent Expense Communication Charges Water Charges Amortization of Preliminary Expenses Total Operating Expenses EARNINGS BEFORE INTEREST & TAXES FINANCIAL EXPENSES Financial Charges on Long term loan Total Financial Expenses Profit Before Tax Tax PROFIT AFTER TAX Retained Earnings at the beginning of year Dividend Retained Earnings at the end of year YEAR- 2 YEAR- 3 YEAR- 4 YEAR- 5 YEAR- 6 YEAR- 7 YEAR- 8 YEAR- 9 YEAR- 10
5,559,590 6,115,549 6,727,104 7,399,815 8,139,796 8,953,776 9,849,154 10,834,069 11,917,476 13,109,223 4,268,971 4,695,868 5,165,455 5,682,001 6,250,201 6,875,221 7,562,743 8,319,017 9,150,919 10,066,011 2,988,280 3,287,108 3,615,819 3,977,400 4,375,141 4,812,655 5,293,920 5,823,312 6,405,643 7,046,208 12,816,841 14,098,526 15,508,378 17,059,216 18,765,138 20,641,651 22,705,816 24,976,398 27,474,038 30,221,442 918,027 2,732,142 2,646,762 6,296,931 180,000 528,000 9,125 3,650 50,000 36,000 72,000 4,500 883,275 5,636,635 156,133 156,133 5,480,502 1,166,651 4,313,852 0 4,313,852 954,748 2,841,427 2,752,633 6,548,808 198,000 528,001 8,669 3,468 52,500 37,800 75,600 4,500 908,537 6,641,180 143,642 143,642 6,497,537 1,496,638 5,000,899 4,313,852 2,156,926 7,157,825 992,938 2,955,084 2,862,738 6,810,761 217,800 528,002 8,235 3,294 55,125 39,690 79,380 931,527 7,766,091 1,032,656 3,073,288 2,977,247 7,083,191 239,580 528,003 7,824 3,129 57,881 41,675 83,349 961,441 9,014,584 1,073,962 3,196,219 3,096,337 7,366,519 263,538 528,004 7,432 2,973 60,775 43,758 87,516 1,116,921 3,324,068 3,220,191 7,661,179 1,161,597 3,457,031 3,348,998 7,967,627 1,208,061 3,595,312 3,482,958 8,286,332 1,256,384 3,739,124 3,622,277 8,617,785 1,306,639 3,888,689 3,767,168 8,962,496
289,892 318,881 350,769 385,846 424,431 528,006 528,007 528,008 528,009 528,010 7,061 6,708 6,372 6,054 5,751 2,824 2,683 2,549 2,421 2,300 63,814 67,005 70,355 73,873 77,566 45,946 48,243 50,656 53,188 55,848 91,892 96,487 101,311 106,377 111,696 0 0 0 0 0 993,998 1,029,435 1,068,013 1,110,020 1,155,768 1,205,602 10,404,621 11,951,037 13,670,176 15,580,046 17,700,485 20,053,344 0 0 17,700,485 5,417,670 12,282,815 34,505,116 5,443,963 41,343,969 0 0 20,053,344 6,241,170 13,812,173 41,343,969 6,141,408 49,014,735
127,544 110,158 91,381 71,101 49,200 25,546 127,544 110,158 91,381 71,101 49,200 25,546 7,638,547 8,904,426 10,313,240 11,879,936 13,620,976 15,554,500 1,895,991 2,339,049 2,832,134 3,380,477 3,989,842 4,666,575 5,742,555 6,565,377 7,481,106 8,499,458 9,631,135 10,887,925 7,157,825 10,399,931 14,094,030 18,292,448 23,051,353 28,432,758 2,500,450 2,871,278 3,282,688 3,740,553 4,249,729 4,815,567 10,399,931 14,094,030 18,292,448 23,051,353 28,432,758 34,505,116
11
14.2)
Cash Flow Statement (With 10 Years Projections)

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 Add: Depreciation Amortization (Pre-operational Expenses) Net profit before working capital changes Working Capital changes Raw materials stock W.I.P Finished goods stock Accounts payable Accounts receivable Working capital changes Cash provided by/ used in operations FINANCING ACTIVITIES Long term loan Owner equity Dividend paid Cash provided by/ used in Financing activities INVESTING ACTIVITIES Capital Expenditure Cash provided by/ used in Investing activities Net Cash Flow Cash balance B/ F Cash balance C/ F
0 0 -9,000 -9,000 -1,590,840 -1,590,840 0 0 0 0 -1,590,840 -1,599,840 1,951,664 216,852 0 2,168,516 -182,500 -182,500 386,176 0 386,176
5,480,502 6,497,537 7,638,547 9,125 4,500 5,494,127 960,797 960,797 -20,635 -141,277 524,744 -1,068,070 255,559 4,583,036 -156,133 8,235 8,669 0 4,500 6,510,706 7,646,782 -25,835 -24,842 -25,835 -24,842 -825 -858 -5,877 -5,651 21,829 20,990 -106,807 -117,488 -117,135 -128,229 4,896,933 5,622,561 -201,229 -217,328
8,904,426 10,313,240 11,879,936 13,620,976 15,554,500 17,700,485 20,053,344 5,751 6,372 6,054 7,432 7,061 6,708 7,824 0 0 0 0 0 0 0 8,912,250 10,320,673 11,886,996 13,627,684 15,560,873 17,706,539 20,059,095 -32,690 -33,998 -31,433 -29,061 -30,224 -26,869 -27,944 -32,690 -33,998 -29,061 -30,224 -31,433 -26,869 -27,944 -1,130 -1,004 -1,044 -1,086 -893 -928 -966 -7,150 -7,436 -7,734 -6,357 -6,611 -6,875 -6,112 27,621 28,726 25,537 26,559 23,611 24,555 22,703 -129,236 -142,160 -156,376 -172,014 -189,215 -208,137 -228,950 -140,408 -153,778 -168,459 -184,580 -202,284 -221,728 -243,085 6,432,793 7,334,760 8,338,060 9,453,263 10,692,014 12,067,141 13,574,839 -234,714 -253,491 -273,770 -295,672 -319,326 0 0
-2,156,926 -2,500,450 -2,871,278 -3,282,688 -3,740,553 -4,249,729 -4,815,567 -5,443,963 -6,141,408 -156,133 -2,358,155 -2,717,777 -3,105,992 -3,536,180 -4,014,324 -4,545,401 -5,134,893 -5,443,963 -6,141,408 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4,426,902 2,538,777 2,904,784 3,326,801 3,798,581 4,323,736 4,907,861 5,557,120 6,623,178 7,433,431 386,176 4,813,078 7,351,856 10,256,640 13,583,441 17,382,021 21,705,758 26,613,619 32,170,739 38,793,918 4,813,078 7,351,856 10,256,640 13,583,441 17,382,021 21,705,758 26,613,619 32,170,739 38,793,918 46,227,349
12
14.3)
Balance Sheet (With10 Years Projections)

YEAR-0 YEAR - 1 YEAR - 2 YEAR - 3 YEAR - 4 ASSETS 14,002,065 698,589 23,212 158,918 1,421,601 16,304,385 148,647 YEAR - 5 YEAR - 6 YEAR - 7 YEAR - 8 YEAR - 9 YEAR - 10
Current Assets Cash & Bank Balance Raw materials stock W.I.P Finished goods stock Receivables Total Current Assets Fixed Assets At Cost less: Acc. Depreciation Intangible Assets Up Front Building Rent Pre-operational Expenses Worth TOTAL ASSETS Current Liabilities Current maturity of long term loan Accounts Payable Total Current Liabilities Non Current Liabilities Long Term Loan EQUITY Paid up Capital Retained Earnings Total Equity TOTAL LIABILITIES & EQUITY
215,176 1,581,840 1,797,016 182,500 180,000 9,000 2,168,516
4,978,212 621,043 20,635 141,277 1,068,070 6,829,237 173,375
7,779,413 645,884 21,461 146,928 1,174,877 9,768,563 164,706
10,656,487 671,720 22,319 152,806 1,292,365 12,795,696 156,471
17,820,925 726,532 24,140 165,274 1,563,761 20,300,633 141,215
22,166,563 755,593 25,106 171,885 1,720,138 24,839,285 134,154
27,098,078 785,817 26,110 178,761 1,892,151 29,980,918 127,447
32,179,739 817,250 27,155 185,911 2,081,367 35,291,421 121,074
38,802,917 849,940 28,241 193,348 2,289,503 42,163,949 115,021
46,236,349 883,937 29,370 201,082 2,518,453 49,869,191 109,269
4,500 7,007,112
9,933,270
12,952,167 16,453,032 20,441,848 LIABILITIES AND EQUITY 234,714 567,563 802,277 1,533,107 253,491 590,266 843,757 1,298,393 273,770 613,877 887,647 1,044,902
24,973,440
30,108,364
35,412,496
42,278,969
49,978,461
1,951,664
524,744 524,744 1,951,664
217,328 545,734 763,062 1,795,531
295,672 638,432 934,104 771,131
319,326 663,969 983,295 475,459
690,528 690,528 -
718,149 718,149 -
746,875 746,875 -
216,852 216,852 2,168,516
216,852 4,313,852 4,530,703 7,007,112
216,852 7,157,825 7,374,677 9,933,270
216,852 10,399,931 10,616,782 12,952,167
216,852 14,094,030 14,310,882 16,453,032
216,852 18,292,448 18,509,299 20,441,848
216,852 23,051,353 23,268,204 24,973,440
216,852 28,432,758 28,649,610 30,108,364
216,852 34,505,116 34,721,968 35,412,496
216,852 41,343,969 41,560,821 42,278,969
216,852 49,014,735 49,231,586 49,978,461
13
14.4)
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: Training and after sales services to be sought 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 Sales & Distribution Network:Strong contacts with the civil works contractors focusing upon house constructions for middle class people and owners of retail shops. Price - Bulk Discounts, Cost plus Introductory Discounts: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: Recruitment of skilled and experienced staff. 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 to best practices is a route to success. Least cost options for Training and Skill Development (T&SD) may be linked with compensation benefits and awards.
14
14.5)
Useful Links Prime Ministers Office, www.pmo.gov.pk Government of Pakistan, www.pakistan.gov.pk Ministry of Industries & Production, www.moip.gov.pk Small & Medium Enterprises Development Authority (SMEDA), www.smeda.org.pk State Bank of Pakistan (SBP), www.sbp.org.pk National Bank of Pakistan (NBP), www.nbp.com.pk First Women Bank Limited (FWBL), www.fwbl.com.pk Pakistan Institute of Fashion Design (PIFD), www.pifd.edu.pk Government of Punjab, www.punjab.gov.pk Government of Sindh, www.sindh.gov.pk Government of KhyberPakhtunkhwa, 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 Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk Securities & ExchangeCommission of Pakistan (SECP), www.secp.gov.pk Federation of Pakistan Chambers of Commerce and Industry (FPCCI), www.fpcci.com.pk
15
15. KEY ASSUMPTIONS

PRODUCTION ASSUMPTIONS Maximum Capacity Utilization Maximum Capacity Utilization (Year-1) At 100% capacity, the following will be the per day production break-up; Artisan Mosaic Split Face Field Tiles Total production per day Artisan Mosaic Split Face Field Tiles Total production per year OPERATING ASSUMPTIONS Annual Production Capacity(Artisan Mosaic) year 1 Annual Production Capacity (Split Face) year 1 Annual Production Capacity (Field Tiles) year 1 Total Production Capacity (Year 1) Growth Rate in Production (3%) OR (times) Hours operational per day Days operational per month Days operational per year ECONOMY RELATED ASSUMPTIONS Electricity growth rate (10%) Pay roll growth (10%) CASH FLOW ASSUMPTIONS Accounts receivable cycle (in days) Accounts payable cycle (in days) WIP (Days) Finished Goods (Days) 14.00% 43.00% 43.00% 100% 14.00% 43.00% 43.00% 10.36 31.82 31.82 74 3,232 9,928 9,928 23,088 100% 86%
2,780 8,538 8,538 19,856 1.03 8 26 312
10% 10%
30 30 1 7
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Raw Materials Inventory (Days) Cash on Hand REVENUE ASSUMPTION Sales price per unit in year 1 Artisan Mosaic Split Face Field Tiles Sale price growth rate (10%) EXPENSES ASSUMPTIONS Electricity Expenses Per/Year(RS) Water Charges Communication Charges Machine maintenance Cost /year (% of total machinery cost) Growth in maintenance cost 3 %) OR (times) Pre-paid land rent (12 months) Tasserae Glue Mesh Others Raw material cost growth rate Rent growth rate Communication Charges Growth Rate Communication Charges Growth Rate
30 215,176
OR (times)
2,000 500 350 1.1
(15,000/Mont h)
180,000 72,000 36,000 2% 1.03 180,000
5 5% 5% 5% 5%
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COST OF GOODS SOLD ASSUMPTIONS COGS Year 1 Artisan Mosaic Split Face Field Tiles COGS Growth Rate (4%) OR (times) FINANCIAL ASSUMPTIONS Project Life (Years) Debt Equity Interest rate on long term loan Debt tenure (years) Grace period (year) Debt payments per year
14% 330.25 43% 320 43% 310 1.04
10 90% 10% 8% 8 1 1
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Pre-Feasibility Study