Pre-Feasibility Study

(Bakery and Confectionery)

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
REGIONAL OFFICE
Sindh
REGIONAL OFFICE
Khyber Pakhtunkhwa
REGIONAL OFFICE
Balochistan
3
rd
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
5
th
Floor, Bahria
Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 35610572
helpdesk-khi@smeda.org.pk
Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 111-111-456
Fax: (091) 5286908
helpdesk-pew@smeda.org.pk
Bungalow No. 15-A
Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 2831623, 2831702
Fax: (081) 2831922
helpdesk-qta@smeda.org.pk


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December, 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 PROJ ECT & PRODUCT ..................................... 4
7 CRITICAL FACTORS ..................................................................................... 5
8 INSTALLED & OPERATIONAL CAPACITIES ................................................ 5
9 POTENTIAL TARGET MARKET .................................................................... 5
10 PROJ ECT COST SUMMARY ........................................................................ 6
10.1 PROJ ECT ECONOMICS ............................................................................. 6
10.2 PROJ ECT FINANCING ............................................................................... 6
10.3 PROJ ECT 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 CONTACT DETAILS OF EXPERTS & CONSULTANTS ............................. 11
12 ANNEXURES ............................................................................................... 12
12.1 INCOME STATEMENT ............................................................................. 12
12.2 STATEMENT OF CASH FLOW .................................................................. 13
12.3 BALANCE SHEET ................................................................................... 14
12.4 USEFUL PROJ ECT MANAGEMENT TIPS .................................................... 15
12.5 USEFUL LINKS ...................................................................................... 16
13 KEY ASSUMPTION ..................................................................................... 17
13.1 RAW MATERIAL ASSUMPTIONS ............................................................... 17
13.2 SALES ASSUMPTIONS ............................................................................ 24


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 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 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, production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in Bakery and
Confectionery Business by providing them 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 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) 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 pre-feasibility studies in key areas of
investment has been a hallmark of SME facilitation by SMEDA.
Concurrent to the pre-feasibility 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 Ministers Youth Business Loan, 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 by the
National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).
Small business loan up to Rs. 2 million with tenure up to 8 years inclusive of 1
year grace period, and a debt : equity of 90 : 10 will be disbursed to SME
beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwah,
Balochistan, Gilgit Baltistan, Azad J ammu & Kashmir and Federally Administered
Tribal Areas (FATA).
5 EXECUTIVE SUMMARY
Bakery and 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 the 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 NPV, IRR and Payback of this project are Rs. 8.29 million
51% and 2.77 years respectively. The business will provide employment
opportunity to 06 individuals including the owner manager.
6 BRIEF DESCRIPTION OF PROJECT & PRODUCT
The proposed Bakery and 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 sq.ft. 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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Pre-feasibility Study Bakery and Confectionery
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.
Location considerations for easy access of the customers.
8 INSTALLED & OPERATIONAL CAPACITIES
As mentioned, the sales of bakery items are 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 23,785 pounds,
40,470 pieces of snacks, 6,035 kgs of sweets and nimko, and 5,325 kgs 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 an
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, Quetta, Khuzdar and Gilgit
are some of the prospective cities for setting up this business.
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Pre-feasibility Study Bakery and Confectionery
10 PROJECT COST SUMMARY
A detailed financial model has been developed to analyze the commercial
viability of Bakery and Confectionery business under the Prime Ministers Youth
Business Loan. 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 annexures.
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 years up to the maximum
capacity utilization of 95%.
The following table shows internal rate of return, payback period and net present
value of the proposed venture.
Table 1: Project Economics
Description Details
Internal Rate of Return (IRR) 51%
Payback Period (yrs) 2.77
Net Present Value (Rs.) 8,288,026

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 the reduction 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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Pre-feasibility Study 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) 8
Grace Period (Year) 1

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 1,124,750
Furniture, Fixture and Office Equipment 270,000
Motor Vehicles 45,000
Pre-operating Cost 120,000
Total Capital Cost 1,559,750
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 Production Facility and Shop Rent (for 3,600 sq. ft. @ Rs. 75,000 per month)
3 Months Rent as Security and 1 Months Advance Rent calculated.
10.4 Space Requirement
The space requirement for the proposed bakery and confectionary unit mainly
includes the production hall, store room and a retail outlet. For this purpose it is
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Pre-feasibility Study Bakery and Confectionery
recommended that a rented place of maximum 3,600 sqft (i.e. 2,700 sqft for
production space and 900 sq.ft 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
Description
Estimated Area
(Sqft)
Monthl y Rent (Rs.)
Production Space 2,700 30,000
Outlet Space 900 45,000
10.5 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

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Pre-feasibility Study Bakery and Confectionery
The required machinery is easily available in the local markets. Used and new
machinery can be purchased from different whole sale markets including Lahore,
Karachi, Peshawar, Gujranwala, etc. 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
Req. Qty Unit Cost (Rs.) Total Cost
(Rs.)
1 Production Tables 2 5,000 10,000
2
Chairs & Other
Furniture
10,000 10,000
3
Cost of Renovation
and Interior
Designing
125,000 125,000
4 Air conditioner 1 45,000 45,000
5 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
The raw materials are 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 13.1.





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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 to personally manage 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. 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 (1
st
Year)
Product Mix 1
st
Year Sales Revenue (Rs.)
Bakery Sales
8,645,315
General Item Sales
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. 500,000 / year (including both
natural gas and LPG at 100% capacity utilization). 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. 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.
11 CONTACT DETAILS OF EXPERTS & CONSULTANTS


Prof. Dr. Salim Ur Rehman
National Institute of Food Science and
Technology
University of Agriculture, Faisalabad
Phone:041-9200161-70/3011
Fax: 041-9201439
Mobile: 0300-6681047

Principal Scientific Officer
Food and Biotechnology Research
Centre
PCSIR Labs
Ferozpur Road, Lahore
Ph: 042-99230688-95

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Pre-feasibility Study Bakery and Confectionery
12 ANNEXURES
12.1 Income Statement


Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue 11,238,910 13,419,982 15,747,024 18,405,275 21,437,705 24,892,570 27,401,857 30,142,043 33,156,247 36,471,872
Cost of sales
Cost of goodssold1 7,681,843 9,172,615 10,763,159 12,580,085 14,652,764 17,014,179 18,729,288 20,602,216 22,662,438 24,928,682
Operationcosts1(direct labor) 236,667 263,756 290,148 319,179 351,113 386,240 425,175 467,692 514,461 565,907
Operatingcosts3(direct electricity) 240,000 264,000 290,400 319,440 351,384 386,522 425,175 467,692 514,461 565,907
Operatingcosts4(direct water) 20,708 24,727 29,015 33,913 39,500 45,866 50,489 55,538 61,092 67,202
Operatingcosts5(direct gas) 345,139 412,118 483,580 565,213 658,337 764,433 841,491 925,641 1,018,205 1,120,025
Total cost of sales 8,524,357 10,137,216 11,856,301 13,817,829 16,053,098 18,597,240 20,471,618 22,518,780 24,770,658 27,247,723
GrossProfit 2,714,552 3,282,766 3,890,722 4,587,445 5,384,607 6,295,329 6,930,239 7,623,263 8,385,589 9,224,148
General administration & selling expenses
Administrationexpense 780,000 858,000 943,800 1,038,180 1,141,998 1,256,198 1,381,818 1,519,999 1,671,999 1,839,199
Administrationbenefitsexpense 78,000 85,800 94,380 103,818 114,200 125,620 138,182 152,000 167,200 183,920
Buildingrental expense 900,000 990,000 1,089,000 1,197,900 1,317,690 1,449,459 1,594,405 1,753,845 1,929,230 2,122,153
Electricity expenseOutlet 360,000 396,000 435,600 479,160 527,076 579,784 637,762 701,538 771,692 848,861
Travellingexpense 56,195 67,100 78,735 92,026 107,189 124,463 137,009 150,710 165,781 182,359
Communicationsexpense(phone, fax, mail, internet, etc.) 15,600 17,160 18,876 20,764 22,840 25,124 27,636 30,400 33,440 36,784
Officeexpenses(stationary, entertainment, janitorial services, etc.) 7,800 8,580 9,438 10,382 11,420 12,562 13,818 15,200 16,720 18,392
Promotional expense 112,389 134,200 157,470 184,053 214,377 248,926 274,019 301,420 331,562 364,719
Depreciationexpense 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975
Amortizationof pre-operatingcosts 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000
Miscellaneousexpense1
Subtotal 2,465,959 2,712,815 2,983,274 3,282,258 3,612,764 3,978,110 4,360,624 4,781,088 5,243,600 5,752,362
OperatingIncome 248,594 569,951 907,448 1,305,188 1,771,843 2,317,220 2,569,616 2,842,175 3,141,990 3,471,786
EarningsBeforeInterest & Taxes 248,594 569,951 907,448 1,305,188 1,771,843 2,317,220 2,569,616 2,842,175 3,141,990 3,471,786
Interest expenseonlongtermdebt (Project Loan) 152,495 139,611 122,676 104,337 84,475 62,964 39,668 14,439 - -
Subtotal 152,495 139,611 122,676 104,337 84,475 62,964 39,668 14,439 - -
EarningsBeforeTax 96,099 430,340 784,772 1,200,851 1,687,368 2,254,256 2,529,947 2,827,736 3,141,990 3,471,786
Tax - 3,034 40,216 102,628 184,973 298,351 354,987 429,434 507,997 590,446
NET PROFIT/(LOSS) AFTER TAX 96,099 427,306 744,556 1,098,224 1,502,395 1,955,905 2,174,961 2,398,302 2,633,992 2,881,340
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Pre-feasibility Study Bakery and Confectionery
12.2 Statement of Cash Flow






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 96,099 427,306 744,556 1,098,224 1,502,395 1,955,905 2,174,961 2,398,302 2,633,992 2,881,340
Add: depreciationexpense 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975
amortizationof pre-operatingcosts 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000
Deferredincometax - 3,034 40,216 102,628 184,973 298,351 354,987 429,434 507,997 590,446
Finishedgoodsinventory (120,061) (20,864) (23,889) (27,257) (31,061) (35,352) (25,844) (28,433) (31,276) (34,404)
Equipment inventory - - - - - - - - - - -
Rawmaterial inventory (106,692) (33,445) (40,744) (51,676) (65,403) (82,617) (80,258) (96,775) (117,098) (141,689) 816,396
Pre-paidbuildingrent (225,000) (22,500) (24,750) (27,225) (29,948) (32,942) (36,236) (39,860) (43,846) (48,231) 530,538
Accountspayable 321,451 62,939 67,488 77,356 88,574 100,343 74,461 81,782 90,489 59,583
Cashprovidedbyoperations (331,692) 397,519 562,897 905,446 1,311,574 1,785,298 2,358,727 2,597,904 2,876,116 3,167,259 4,999,875
Financing activities
Project Loan- principal repayment - (204,028) (220,962) (239,302) (259,164) (280,674) (303,970) (329,199) - -
AdditionstoProject Loan 1,837,298 - - - - - - - - - -
Issuanceof shares 204,144 - - - - - - - - - -
Cashprovidedby/ (usedfor) financingactivities 2,041,442 - (204,028) (220,962) (239,302) (259,164) (280,674) (303,970) (329,199) - -
Investing activities
Capital expenditure (1,559,750) - - - - - - - - - -
Acquisitions
Cash(usedfor) / providedbyinvestingactivities (1,559,750) - - - - - - - - - -
NET CASH 150,000 397,519 358,869 684,484 1,072,273 1,526,134 2,078,053 2,293,934 2,546,916 3,167,259 4,999,875
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Pre-feasibility Study Bakery and Confectionery
12.3 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
Current assets
Cash& Bank 150,000 547,519 906,388 1,590,872 2,663,144 4,189,278 6,267,331 8,561,265 11,108,182 14,275,440 19,275,315
Finishedgoodsinventory 120,061 140,925 164,814 192,071 223,132 258,484 284,328 312,761 344,037 378,441
Rawmaterial inventory 106,692 140,137 180,881 232,557 297,960 380,576 460,834 557,610 674,708 816,396 -
Pre-paidbuildingrent 225,000 247,500 272,250 299,475 329,423 362,365 398,601 438,461 482,307 530,538 -
Total Current Assets 481,692 1,055,217 1,500,444 2,287,717 3,482,598 5,155,352 7,385,251 9,841,664 12,577,958 15,966,412 19,653,756
Fixed assets
Machinery& equipment 1,124,750 1,012,275 899,800 787,325 674,850 562,375 449,900 337,425 224,950 112,475 -
Furniture, fixturesandOfficeEquipment 270,000 243,000 216,000 189,000 162,000 135,000 108,000 81,000 54,000 27,000 -
Officevehicles 45,000 40,500 36,000 31,500 27,000 22,500 18,000 13,500 9,000 4,500 -
Total FixedAssets 1,439,750 1,295,775 1,151,800 1,007,825 863,850 719,875 575,900 431,925 287,950 143,975 -
Intangible assets
Pre-operationcosts 120,000 108,000 96,000 84,000 72,000 60,000 48,000 36,000 24,000 12,000 -
Total IntangibleAssets 120,000 108,000 96,000 84,000 72,000 60,000 48,000 36,000 24,000 12,000 -
TOTAL ASSETS 2,041,442 2,458,992 2,748,244 3,379,542 4,418,448 5,935,227 8,009,151 10,309,589 12,889,908 16,122,387 19,653,756
Current liabilities
Accountspayable 321,451 384,390 451,879 529,235 617,809 718,151 792,612 874,394 964,884 1,024,466
Total Current Liabilities - 321,451 384,390 451,879 529,235 617,809 718,151 792,612 874,394 964,884 1,024,466
Other liabilities
Deferredtax - 3,034 43,250 145,877 330,851 629,202 984,188 1,413,622 1,921,619 2,512,065
Longtermdebt (Project Loan) 1,837,298 1,837,298 1,633,270 1,412,308 1,173,007 913,843 633,169 329,199 - - -
Total LongTermLiabilities 1,837,298 1,837,298 1,636,304 1,455,558 1,318,884 1,244,694 1,262,371 1,313,387 1,413,622 1,921,619 2,512,065
Shareholders' equity
Paid-upcapital 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144
Retainedearnings 96,099 523,405 1,267,961 2,366,185 3,868,580 5,824,485 7,999,445 10,397,747 13,031,740 15,913,080
Total Equity 204,144 300,243 727,549 1,472,106 2,570,329 4,072,724 6,028,629 8,203,590 10,601,892 13,235,884 16,117,224
TOTAL CAPITAL AND LIABILITIES 2,041,442 2,458,992 2,748,244 3,379,542 4,418,448 5,935,227 8,009,151 10,309,589 12,889,908 16,122,387 19,653,756
Liabilities & Shareholders' Equity
Assets
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Pre-feasibility Study Bakery and Confectionery
12.4 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 overlooked 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: 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
brochures should be acquired from good quality service providers.
Price - Bulk Discounts, Cost plus Introductory Discounts: Price should
not be allowed to compromise on 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 and be retained on better terms, if necessary


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Pre-feasibility Study Bakery and Confectionery
12.5 Useful Links
Prime Ministers 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 J amu Kashmir, www.ajk.gov.pk
Securities & Exchange Commission of Pakistan (SECP),
www.secp.gov.pk
Ministry of National Food Security & Research, www.mnfsr.gov.pk
Punjab Food Authority, www.punjabfoodauthority.gov.pk









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Pre-feasibility Study Bakery and Confectionery
13 KEY ASSUMPTION
13.1 Raw Material Assumptions (at 100% capacity)

Plain & Dry Cakes
Plain cakes
Raw material:
Units of
measure
Quantity Rate Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
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
Flour (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
Flavour 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

279,582 100.0% 8,302

1,036

Plain fruit cakes
Raw material:
Units of
measure
Quantity Rate Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Butter Kg 316 450 142,012 24.498% 162 250 250

Sugar Kg 50 60 3,030 3.920% 178 40 40

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Pre-feasibility Study Bakery and Confectionery
Flour (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

Samolina (Sooji) Kg 63 80 5,049 4.900% 66 50 50

Eggs Pcs 3,865 7 27,052 11.759% 3,888 3 120

Flavours Ltr. 1 500 316 0.049% 0.32 0.5 0.5


216,716 100.00% 4,578

1020.5


Dry cakes
Raw material:
Units of
measure
Quantity Rate Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Butter Kg 357 450 160,629 22.167% 545 225 225

Sugar Kg 63 60 3,807 3.941% 545 40 40

Flour (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

Flavour Ltr. 8 500 3,966 0.493% 1.09 5 5

Cream +Honey Kg 159 400 63,458 9.852%

100 100


356,072 100.00% 18,023

1015


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Pre-feasibility Study Bakery and Confectionery
Sweets & Nimko
Nimko
Raw material:
Units of
measure
Quantity Rate Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Gram Flour (Baisn) Kg 485 90 43,639 68.293% 491 700 700

Dry Fruit Kg 139 160 22,166 19.512% 123 200 200

Chickpeas (Channey) Kg 69 120 8,312 9.756% 61 100 100

Nimko Masala Kg 17 150 2,598 2.439%

25 25 25 25 25 25

Sweets
Raw material:
Units of
measure
Quantity Rate Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Solidified wholemilk
(Khoya)
Kg 1,801 400 720,290 33.816% 1,050 350 350

Flour (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

1035


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Pre-feasibility Study Bakery and Confectionery
Chicken Bread

Raw material:
Units of
measure
Quantity Rate Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Flour (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

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


2,840

596,639 100.000% 2,112 1024 1024

Fresh Cream cakes
Raw material:
Units of
measure
Quantity Rate Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Butter Kg 491 450 221,135 12.207% 545 80 125

Sugar Kg 393 60 23,588 9.766% 545 100 100

Flour (Maida) Kg 491 50 24,571 12.207% 545 100 125

Baking powder Kg 8 60 472 0.195% 22 2 2

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Pre-feasibility Study Bakery and Confectionery
Eggs Pcs 16,103 7 112,718 15.625% 16,364 4 160

Flavour 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% 18,023

1024

* Assume 20% extra cost for this type of Cakes 1,185,479

Pastries & Puff etc
Raw material:
Units of
measure
Quantity Rate Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Butter Kg 315 450 141,526 12.207% 545 100 125

Sugar Kg 252 60 15,096 9.766% 545 100 100

Flour (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

Flavour 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


Bread

-

- 100.000% 407

1030


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Pre-feasibility Study Bakery and Confectionery
Biscuits etc
Raw material:
Units of
measure
Quantity Rate Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty
Ingredients
For Making 1
Kg (gms)
Qty
Ingredients
For Making
1 Pound
(gms)
Butter Kg 873 450 392,828 16.393% 303 170 170

Sugar Kg 770 60 46,215 14.465% 333 150 150

Flour (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

Flavour Ltr. 10 500 5,135 0.193% 1 2 2


871,056 100% 8,302

1037


Snacks

Per Piece


Chicken Drum stick Leg Piece 45.5 161,525


Chicken Leg Piece 63 268,380

Chicken Shami 21 111,825


Chicken Sandwich 35 62,125


Chicken Patties 17.5 155,313


Chicken Bread roll 21 74,550
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Pre-feasibility Study Bakery and Confectionery
Chicken Pizza
Raw material:
Units of
measure
Quantity Rate Cost
%
ingredients
Qty
Ingredients
Qty
Ingredients
in grams For
Making 1 Kg
Qty Ingredients
For Making 1 Kg
(gms)
Flour (Maida) Kg 930.58 50 46,529 19.417% 336.00 200 200
Oil Ltr 69.79 190 13,261 1.456% 33.60 15 15
Yeast 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

4,793

933,607 100% 2,112

1030

* Figure are rounded off at zero decimal
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Pre-feasibility Study Bakery and Confectionery
13.2 Sales Assumptions (at 100% capacity)
Description Units
Sales per
Day (Qty)
Sales Per
Year (Qty)
Sales Price
/ Unit (Rs.)
Annual
Sales (Rs.)
Fresh Cream Cakes

Fresh cream Pounds 10 3,550 180 639,000
Fresh fruit Pounds 5 1,775 180 319,500
Chocolate Cakes Pounds 5 1,775 180 319,500
Butter cream cakes Pounds 5 1,775 180 319,500
Total

8,875

1,597,500

Fresh & Chocolate
Pastries
Pounds 5 1,775 180 319,500
Donuts Pounds 5 1,775 180 319,500
Cream puff Pounds 3 1,065 180 191,700
Cream roll Pounds 3 1,065 180 191,700
Total

5,680

1,022,400

Bread (Out Sourced)

Bread, Bun, Rusk Etc. Kgs 10 3,550 110 390,500
Total

390,500

Dry cakes

Dry cakes Pounds 10 3,550 180 639,000
Fruit cakes large Pounds 3 1,065 140 149,100
Fruit cakes small Pounds 5 1,775 140 248,500
Plain cakes large Pounds 3 1,065 120 127,800
Plain cakes small Pounds 5 1,775 120 213,000
Total

9,230

1,377,400

Snacks

Chicken pizza large Pcs 5 1,775 380 674,500
Chicken pizza medium Pcs 10 3,550 200 710,000
Chicken pizza small Pcs 14 4,970 100 497,000
Chicken bread Pcs 8 2,840 380 1,079,200
Chicken drum stick leg
piece
Pcs 10 3,550 65 230,750
Chicken leg piece Pcs 12 4,260 90 383,400
Chicken shami Pcs 15 5,325 30 159,750
Chicken sandwich Pcs 5 1,775 50 88,750
Chicken patties Pcs 25 8,875 25 221,875
Chicken bread roll Pcs 10 3,550 30 106,500
Total

40,470

4,151,725




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Pre-feasibility Study Bakery and Confectionery
Description Units
Sales per
Day (Qty)
Sales Per
Year (Qty)
Sales Price
/ Unit (Rs.)
Annual
Sales (Rs.)
Sweets & Nimko

Nimko Kgs 2 710 400 284,000
Gulab J aman Kgs 3 1,065 375 399,375
Chum Chum Kgs 3 1,065 375 399,375
Kalakand Kgs 2 710 375 266,250
Burfi Kgs 3 1,065 375 399,375
Moti Choor Kgs 3 1,065 375 399,375
Pateesa Kgs 1 355 375 133,125
Total

15 6,035

2,280,875

Biscuits

Cake Rusk Kgs 2 710 320 227,200
White Biscuits Kgs 1 355 320 113,600
Coconut Biscuits Kgs 1 355 320 113,600
Macaroon Coconut Kgs 1 355 320 113,600
Almond Macaroon Kgs 1 355 320 113,600
Cheese Finger Kgs 1 355 320 113,600
Salty Zeera Plus Kgs 1 355 320 113,600
Plain Khatai Kgs 1 355 320 113,600
Baker Khani Kgs 1 355 320 113,600
Finger Kgs 1 355 320 113,600
J am Wafer Kgs 1 355 320 113,600
Special Biscuit Kgs 1 355 320 113,600
Chocolate Biscuits Kgs 1 355 320 113,600
Round Almond Biscuit Kgs 1 355 320 113,600
Total

15 5,325

1,704,000

* Figures are rounded off at zero decimal.

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