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U 4 YOU
Session 2008-10
Feasibility Report on
BAHAWALPUR
U 4 YOU
Session 2008-10
Feasibility Report on
DEDICATED TO
OUR PARENTS
&
RESPECTED TEACHER
MR JAVED IQBAL
U 4 YOU
Session 2008-10
Feasibility Report on
PREFACE
U 4 YOU
Session 2008-10
Feasibility Report on
ACKNOWLEDGMENT
We first thanks to Allah, The Almighty who bestowed knowledge,
health, vigor, to complete this report.
Life is a learning experience. We have learned the validity of this
statement time and time again. Every time we think we know something, we
look back a year later and realize how little we know and how much we
have learned. This Feasibility Report has convinced us again, not in the
learning but also in terms of the vast team of talented people that take part
in creating this report. We believe each person plays a piece of a puzzle to
make the complete picture, some pieces are bigger then others, but without
anyone piece the picture would not be completed.
We feel great pleasure and honor to express our gratitude from the
citadel of our hearts to the people whom we met, for their cooperation.
Their sympathetic behavior has an ever-lasting impression on the pages of
our memory.
We also give honor to (In charge of Project Appraisal) Mr. Javed
Iqbal who provide us an opportunity to get practical experience in fieldwork
and whose guidance remained with us during completing this report.
We are specially thankful to Ch Masood Majeed (owner of ASIA
Flour Mill located in state of small industries Bahawalpur)who provide us
necessary information and show us the working of flour mill.
We also wordless to pay our humble gratitude to our parent, who
have supported us to reach the point where we stand now and have been a
great and enormous source of inspiration for us throughout the life.
U 4 YOU
Session 2008-10
Feasibility Report on
TABLE OF CONTENTS
Sr#
Name
Page No
PROJECT SUMMARY
ASSUMPTIONS
EXECUTIVE SUMMARY
MANAGEMENT
10
11
12
13
14
10
15
11
16
12
Capacity Utilized
17
13
Raw Material:
18
14
18
15
19
16
20
17
21
18
22
19
23
20
Pre-Production Expenses:
23
21
24
22
Balance Sheet
25
U 4 YOU
11
Session 2008-10
Feasibility Report on
23
26
24
Financial ratios
27
25
Financial Plan
28
27
Market Analysis
29
28
Technical Analysis
30
29
31
30
Personel Analysis
33
31
SWOT Analysis
34
32
List of Machinery
35
33
34
Special Thanks
U 4 YOU
Session 2008-10
Feasibility Report on
PROJECT SUMMARY
Name of Project.
Location.
Nature of Industry.
Product range
Installed Capicity
1.M.FARHAN KHIZAR
2.Amir Fraz
3 humaira kanwal
Purpose of Loan.
Brief Description of Ma
chinery
Debt
60%
40,6870
00
Eqyity
40%
27,1250
00
total
67,8120
00
Names of loans
Picic
Long term loan
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Session 2008-10
Feasibility Report on
Name of machinery supplier
Introduction
Wheat is one of the most important products for all of region of the world. Without wheat
human life is uncompleted. It is become more important not only by the fact of
improvement international value. Its a first food item that an important for all over the
world. That business also important for a Pakistan. And last decades the flour mill are
increase due increase in demand of flour.
Proposed Location
The most feasible location for the plant would be in or near the wheat producing regions
of Punjab. This is advisable as transportation costs would be reduced and contact with
growers/farmers directly can be made. It is usually the case that the farmers are willing to
approach the manufacturing plant directly if it is located near to their lands. However, the
availability of trained personnel in the locality has to be kept in mind as well as the
availability of suitable residences because costs could rise if there was a problem in the
accessibility of the location from other urban area.
U 4 YOU
Session 2008-10
Feasibility Report on
Decide Location
When we make investment and open a plant than we first decide the location and study
some regard about the location. The best location of any plant is important and greater
effect on business. The business can run if all input is available. We decide location the
small industrial area of Bahawalpur followings factor should be examined.
1. Availability of raw material
The location that we decide, in that location the raw material of our plant is available.
And we also examined the input constraint. And study any short and fall of raw material
and how we can avoid that.
2. Availability of utilities
After the analyses of the raw material then we examine the utilities. For example power
water telecommunication road and other facilities. If the all facilities are available than
open a project other wise rejects.
3. Availability of labor
Then we examine labor. The workers are available for running a project.
Wage rate.
Training of employees.
Session 2008-10
Feasibility Report on
Name
We decide that the name of our flour mill is Bahawal Flour Mill.
Covered Area
The total area, which we want to establish a Flour mill, is 2 acres. The cost of one acre is
5million. The area required to the machinery building is 2kenal.
Miller.
2.
Manager.
3.
Shift Incharge.
4.
Rule man.
5.
Washer Man.
6.
Silk Man.
7.
Accountant.
8.
Packers.
9.
Others Helper.
Supervisors
These are also the permanent employee of the factory.10 to 15 employees are required.
Loaders
Loaders are the contractor employee of the company. 15to20 employees are required.
U 4 YOU
Session 2008-10
Feasibility Report on
Legal Procedure
Application for license to Establish Flour Mill
Applications for licenses shall be made in Form B (annexed herewith as annex A) to
the Licensing Authority of the district in which the applicant carries on or intends to carry
on business involving the purchase, sale or storage for sale of food grains in wholesale
quantities. To obtaining license applicant have to undertake on the application Form that
he agrees to abide the conditions of license given in Form A (annexed herewith as
annex B). If any applicant carries on such business or intends to carry on such business
in more than one district he shall apply to the District Magistrate of the district in which
he usually resides. A single application may include a request to carry on business in a
number of districts.
U 4 YOU
Session 2008-10
Feasibility Report on
9. Issuance of License
On receipt of application and on payment of a license fee of Rs. 10 for one district and
Rs. 2 for each subsequent district the licensing authority shall issue license.
10. Renewal of License
A license granted under this order shall, unless suspended, withdrawn or cancelled
continue to be in force for one year from the date of the issue of the said license but shall
be renewable annually by the licensee to the licensing authority by which the license was
granted and on payment of the renewal fee of Rs. 5 for the first district and Rs. 1 for each
subsequent district. Renewal of licenses shall be granted on the Renewal Endorsement
Form shown in Form C (annexed herewith as annex D). If any person fails to apply
and to deposit the renewal fee before the date when it is due to expire the license shall not
be renewed
Unless: A. the licensing authority is satisfied that there were good and sufficient reasons for the
delay; and
B. the licensee pays an extra fee of Rs. 5 for the first district and Rs. 1 for each
subsequent district.
U 4 YOU
Session 2008-10
Feasibility Report on
satisfaction of the licensing authority that the original license was lost or damage in a
bona fide manner.
Food Department
Food Department gives the permission of quota of wheat on the base of urban bodies live
in the district.
U 4 YOU
Session 2008-10
Feasibility Report on
ASSUMPTIONS
1.
2.
3.
4.
5.
6.
The entire capital outlay would be incurred one year prior to the
commencement of commercial operation.
7.
8.
Salvage value at the end of the life of the project represents recovery
of working capital original value of land, book value of land and book
value of building.
U 4 YOU
Session 2008-10
Feasibility Report on
EXECUTIVE SUMMARY
We are the fresh graduates of MSc A/c & Finance double specialization.
We are going to start a new business. We have made a research and seek
different type of investment opportunities in Bahawalpur region. As
Bahawalpur is an agricultural area having two major crops wheat and
cotton. We have decided to invest the flour mill because there is much
potential in this business and raw material is easily available.
As population is increasing day by day so the demand of flour is increasing
day by day so it is a very profitable project and it will contribute in the
industrial sector of Bahawalpur region.
United Flour Mill is a registered firm established with the objective of
providing flour and to fulfill the increasing demand of Bahawalpur region.
The two buy products are Maida and Bran. The mill is intending to starts it
operations initially with one plant in Chak 12BC Yazman road Bahawalpur.
It plans to expand its network latter in others Tehsils of Bahawalpur.
Initially United Flour Mill operates at 75% of the capacity. United Flour
Mill will starts its operations in September 2010.
U 4 YOU
Session 2008-10
Feasibility Report on
MANAGEMENT
CEO
GM
MD
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10
Session 2008-10
Feasibility Report on
Annexure - I
UNITED FLOUR MILL
Estimated Cost of Land
Sr.
No.
Description
Area in
Unit
Cost
Rs
("000")
Total
Cost
8,16
0
Marlas
1
120
Land
Registratioin & Legal Requirements 1% of cost of
Land
3
4
120
120
68,00
0
120
680
1,36
82
163
82
8,48
680
Annexure - II
UNITED FLOUR MILL
Estimated Cost of Civil Works
Sr. No.
1
2
3
4
5
6
Description
Machinery Hall(4 floor)
Ware House(single story)
office
garage
mchinery store
work shop
boundry wall
main gate
Total Cost of Civil Works
U 4 YOU
Type of
Unit of
Covered Rate Per Rs ("000")
Building Construction
area
Unit
Total Cost
RCC
RCC
RCC
RCC
RCC
RCC
Square feet
Square feet
Square feet
Square feet
Square feet
Square feet
11
10,880
5,440
2,720
2,720
2,720
2,720
1
1
700
400
550
350
350
350
130000
30000
Session 2008-10
7,616
2,176
1,496
952
952
952
130
30
9,792
Feasibility Report on
Sr.No. Description
Grinding Section
1 Ruler bodies(USSR type)(1000mm Ruler size with ruler)
8 700,000
2 Plant Shifter(4 Section each)
4 470,000
3 Bran Finisher
1 255,000
4 High Pressure Suction Fan
1 300,000
5 Battery Cyclone
1 300,000
6 Air lock with Cyclone with Dividing Walls
20 155,000
7 Main Pipe(size 24inch,lenth 50feet)
8 Purification Machine
1 450,000
9 Low Pressure Suction Fan
1 200,000
10 Cyclone with Pipe(size 4*8)
1
11 Flour,Maida,sujji,Chollar Packing Bin(Steel)
8 155,000
12 Conveyor Werm 9" Size(feet)
2000
1,000
13 Lift Pipe(4 inch with band,8 gage)
1500
1,000
14 Ruler Body Receiver with Happer
20
5,000
15 Production Pipe(5 inch, 16 gage)
1500
500
Cleaning Section
1 Washing Machine Full Size USSR type Steel
1 550,000
2 Elevators with belt with bucket 56 feet length
5 312,000
3 Seperater Polland Type
4 300,000
4 Scorer
2 270,000
5 Suction Fan with Cyclone with Suction Pipe
4 325,000
6 Cocle Salender Polland type
2 550,000
Others
Nut Bolt,Angle,Steel Sheet,Belt,Steel Jalli,Resham Jalli,etc
Total Cost of Machinery
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12
Session 2008-10
5,600
1,880
255
300
300
3,100
2,300
450
200
200
1,240
2,000
1,500
100
750
550
1,560
1,200
540
1,300
1,100
100
26,525
Feasibility Report on
Description
Land
Building
Machinery
Installation & Erection of Machinery
Insurance 10% of Cost of Machinery
Transportaion 10% of Machinery
Vehicles
Furniture and Fixture
Office Equipment
Pre-operating expenses
Interest during construction
Estimated fixed cost
Net Initial Net Working Capital
Total Estimated Cost of Project
LCY
FCY Total cost ("000")
8,486
8,486
9,792
9,792
26,525
26,525
5,305
5,305
2,653
2,653
2,653
2,653
1,400
1,400
900
900
3,320
3,320
2,580
2,580
1,846
65,459
2,352
67,812
"000"
67812
loan
equity
40687
27125
U 4 YOU
interest
60% 1845.964
40%
1846
13
Session 2008-10
Feasibility Report on
Current Assets:
Inventories:
a) Raw Material 5 Days Requirement:
I)Wheat
2
3
4
B.
134
b) Finished Goods
Total Cost of Inventory
Advances and Deposits, & Prepayments
Accounts Receivables (2% of Sales)
Cash 1% of Amount withdrawn from Bank for Inventory
Total Current Assets
2,721
2,855
4
1,613
21
4,494
U 4 YOU
2,141
2,352
14
Session 2008-10
Feasibility Report on
Annexure-VI
2009
Sales
COST OF SALES
Raw Material
Labor
Manufacturing Overheads
Depreciation
Total Cost of Goods Manufactured
Inventory Adjustment - Less
Cost of Sales
Gross Profit
OPERATING EXPENSES:
Administrative Expenses
General Expenses
Seling Expenses
Total Operating Expenses
Operating Profit
OTHER EXPENSES:
Financial Charges on:
Long Term Loan
Amortization of Pre-Production Expenses
Total Other Expenses
Profit Before Tax and Worker's Fund
2010
80,669
2011
95,010
100,985
16,536
15,439
22,450
2,576
57,001
5,700
51,301
29,368
17,633
18,527
23,356
2,576
62,093
509
61,583
33,426
18,742
22,232
24,263
2,576
67,814
6,272
61,541
39,444
3,780
1,750
4,033
9,563 #
19,804
4,536
2,100
4,750
11,386 #
22,040
5,443
2,520
5,049
13,012
26,431
6,103
860
6,963
12,841
5,493
860
6,353
15,687
4,882
860
5,742
20,689
12,841
5,136 #
7,705
15,687
6,275 #
9,412
20,689
8,276
12,413
36.41
24.55
15.92
9.55
22
35.18
23.20
16.51
9.91
21
Ratios:
1 Gross Profit/Sales
2 OperatingProfit/Sales
3 Pre-Tax Profit/Sales
4 Net Profit/Sales
5 Net Profit/Equity
39.06
26.17
20.49
12.29
22
Annexure-VI-A
Production at 100% Capacity
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15
Session 2008-10
Feasibility Report on
Crushing Of Wheat:
6400kg Kg of Wheat/day/machine
Flour
Maida
Bran
Total
No. of Machines
1
1
1
% Output
80
10
10
100
Quantity (000)
256
32
32
320
Annexure-VI-A
U 4 YOU
16
Session 2008-10
Feasibility Report on
2009
75%
Capacity Utilized
2010
80%
Quantity ("000")
2011
85%
Production of Flour:
a)
Number of Units Manufactured
Add: Opening Inventory
Total Units available for Sales
Less: Closing Inventory 10% of Production
Units Sold
192
192
19
173
205
19
224
21
204
218
21
238
22
217
24
24
2
22
26
2
28
3
25
27
3
30
3
27
24
24
2
22
26
2
28
3
25
27
3
30
3
27
Production of Maida:
b)
Number of Units Manufactured
Add: Opening inventory
Total Units available for Sales
Less: Closig Inventory 10% of Production
Quantity Sold
c)
Production of Bran:
Sales Revenue:
Description
Unit Price
a
Flour
b
Maida
c
Bran
Total Sales (a+b+c)
420
250
120
75%
72,667
5,407
2,595
80,669
Rupees
80%
85,585
6,368
3,057
95,010
85%
90,968
6,768
3,249
100,985
Annexure-VI-A
Raw Material:
Years
Capacity Utilized
U 4 YOU
2009
75%
17
2010
80%
2011
85%
Session 2008-10
Feasibility Report on
Quanity ("000")
Wheat 6400kg/day/Machines
240
256
272
Rs. ("000")
Wheat @ 40/kg
Packing material
Total Cost
9,612
6,924
16,536
10,253
7,380
17,633
10,894
7,848
18,742
Annexure-VI-A
UNITED FLOUR MILL
Estimated Cost of Labour
Labour Cost:
a) Direct Labor:
Sr. No. Milling Staff
1 Miller
2 Shift Incharge (Asst. miller)
3 Ruleman
4 Washing man
5 Silk man
6 Helper
7 Unskilled labour
Total
Add: Fringe Benefits (40% of Basic Salary)
Total Cost of Milling Staff
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18
No. of
Employees
1
1
2
1
1
8
12
26
Salary/Month
/Worker
35,000
25,000
20,000
25,000
22,000
24,000
25,000
176,000
Annual
Salary ("000")
420
300
480
300
264
2,304
3,600
7,668
3,067
10,735
No. of
Employees
1
2
1
2
2
1
3
1
Salary/Month
/Worker
35,000
25,000
20,000
23,000
22,000
26,000
15,000
14,000
Annual
Salary ("000")
420
600
240
552
528
312
540
168
Session 2008-10
Feasibility Report on
Add:
Total
Fringe Benefits (40% of Basic Salary)
Total Cost of Office Staff & Production Staff
13
180,000
3,360
1,344
4,704
Assumptions:
1 Direct labor will increase every year @ 20%.
Description
2009
1 Milling Staff
2 Office Staff & Production Staff
Total Cost of Labor
10,735
4,704
15,439
Years
2010
Rs ("000")
12,882
5,645
18,527
2011
15,459
6,774
22,232
Annexure-VI-A
Manufacturing Overhead Cost:
Description
Rs ("000")
a) Fixed Cost:
Power: @ 288/400/KW/Month
Insurance: @ 10% of Fixed Assets Cost
U 4 YOU
2,765
4,923
19
Session 2008-10
Feasibility Report on
40
979
140
8,847
18,119
18
18,137
Years
2010
Rupees ("000")
75%
80%
8,847
8,847
13,603
14,510
22,450
23,356
2009
Fixed Cost
Variable Cost
Total Cost of Manufacturing Overheads
2011
85%
8,847
15,417
24,263
Annexure-VI-A
Sr. No.
No. of
Employees
Designation
1 Manager
2 Accountants
3 Production Clerk
4 Cashier
5 Chowkidar/Gunman
U 4 YOU
1
2
2
1
3
20
Salary/
Month
40,000
30,000
20,000
25,000
15,000
Rupees ("000")
Annual
Salary
480
720
480
300
540
Session 2008-10
Feasibility Report on
6 Peon/Sweeper
Total
Add: Fringe Benefits @ 40%
Total Cost of Administrative Staff
1
9
15,000
145,000
58,000
203,000
180
2,700
1,080
3,780
General Expenses:
Sr. No. Description
1 Travelling Expenses
2 Printing & Stationary
3 Telephone, Telex, Postage
4 Rents, Rates and Taxes
5 Entertainment
6 Legal & Audit
7 Miscellaneous
Total
Designation
No. of
Employees
Manager
Accountants
Production Clerk
Cashier
Chowkidar/Gunman
Peon/Sweeper
1
2
2
1
3
1
10
Total
Add:
Fringe Benefits @ 40%
Total Administrative Salaries per Year
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21
2009
Rupees ("000")
2010
2011
480
720
480
300
540
180
2,700
1,080
3,780
576
864
576
360
648
216
3,240
1,296
4,536
691
1,037
691
432
778
259
3,888
1,555
5,443
Session 2008-10
Feasibility Report on
General Expenses:
Sr. No.
1
2
3
4
5
6
7
Total
Description
Travelling Expenses
Printing & Stationary
Telephone, Telex, Postage
Rents, Rates and Taxes
Entertainment
Legal & Audit
Miscellaneous
300
200
250
300
200
250
250
1,750
Rupees ("000")
360
240
300
360
240
300
300
2,100
432
288
360
432
288
360
360
2,520
4,033
Rupees ("000")
4,750
5,049
Selling Expenses:
Selling Expenses are assumed to be 5% of Sales Revenue
Sr. No.
1
Description
Selling Expenses 5% of Sales Revenue
Annexure-VI-A
Sr. No.
1
2
3
4
Description
Plant & Machinery
Building
Vehicles
Furniture & Fixture
Total
Note:-
Total Cost
(Rs.)
37,135
9,792
1,400
900
49,227
Rs. ("000")
1,857
490
140
90
2,576
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Session 2008-10
Feasibility Report on
2009
2,576
Years
2010
Rupees ("000")
2,576
2011
2,576
Pre-Production Expenses:
Sr. No.
1
2
3
4
5
6
6
Description
Rs. ("000")
Registration Charges
400
Sales Tax Registration Charges
300
Consultancy & Report Preparation Charges
350
Printing & Stationary
250
Conveyance Charges
280
Telephone & Postage
300
Salaries and Wages during Construction
700
Total Preproduction Expenses
2,580
AnnexureVII
Operating Years
2008
2009
2010
19,804
2,576
22,381
22,040
2,576
24,616
2011
SOURCES OF FUNDS:
Operating Profits
Add: Depreciation
Total Funds from Operation
Other Sources:
Long Term Loan
Paid-Up Capital
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40,687
27,125
23
Session 2008-10
26,431
2,576
29,008
Feasibility Report on
67,812
22,381
24,616
29,008
APPLICATION OF FUNDS:
Investment in Fixed Assets
Financial Charges during Construction
Pre-Production Expenses
Repayment of:
Long Term Loan
Bank Borrowings
Financial Charges On:
Long Term Loan
Bank Borrowings
PAYMENT OF:
Taxes
Dividends
57,713
1,846
2,580
6,103
-
4,069
-
4,069
5,493
4,882
6,275
10,000
438
25,664
3,344
18,347
21,691
3,000
138
4,811
5,136
5,000
573
65,277
2,535
2,535
10,914
11,467
2,535
14,002
20,271
4,345
14,002
18,347
Annexure-VIII
End of
Construction
2008
ASSETS:
CURRENT ASSETS:
Cash and Bank Balance
Short Term Investment
Accounts Receivable
Inventories:
Wheat
Finished Goods
Advances, Deposits and Prepayments
Total Current Assets
FIXED ASSETS:
Fixed Assets at Cost
Accumulated Depreciation on Fixed Assets
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Operating Years
2009
2010
Rupees ("000")
2011
2,535
3,000
-
14,002
3,000
1,613
18,347
8,000
1,900
21,691
18,000
2,020
134
4
5,672
481
2,850
4
21,950
513
3,105
4
31,868
545
3,391
4
45,650
59,559
-
59,559
2,576
59,559
5,153
59,559
7,729
24
Session 2008-10
Feasibility Report on
59,559
2,580
67,812
56,983
1,720
80,653
54,407
860
87,135
51,830
97,480
5,136
4,069
9,205
6,275
8,276
4,069
10,344
4,069
12,344
40,687
40,687
36,618
36,618
32,550
32,550
28,481
28,481
27,125
27,125
67,812
27,125
7,705
34,829
80,653
27,125
17,117
44,242
87,135
27,125
29,530
56,655
97,480
Annexure - XII
Years
1
2
3
4
5
6
7
8
9
10
Opening
Balance
40,687
36,618
32,550
28,481
24,412
20,344
16,275
12,206
8,137
4,069
Interest Principle
6,103
5,493
4,882
4,272
3,662
3,052
2,441
1,831
1,221
610
4,069
4,069
4,069
4,069
4,069
4,069
4,069
4,069
4,069
4,069
Closing
Balance
36,618
32,550
28,481
24,412
20,344
16,275
12,206
8,137
4,069
-
Annexure-XI
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Capital
Outlay
60,431
4,811
573
438
2,300
-
Operating
Worker's
Depreciation
Profit
Fund
19,804
2,576
22,040
2,576
26,431
2,576
26,431
2,576
26,431
2,576
26,431
2,576
26,431
2,576
26,431
2,576
26,431
2,576
26,431
2,576
-
IFRR
Taxes
5,136
6,275
8,276
8,276
8,276
8,276
8,276
8,276
8,276
30%
RATIOS
Netprofit margin ratio
net profit
net sale
year
net profit
sale
2010
7704.727
80668.71
2011
9412.266
95009.81
2012
12413.34
100985.3
9.551073
9.906625
12.29223
current asst
current liability
2010
21950.04
9205.197
2011
31868.3
10343.56
2012
45650
12344.27
2.384526
3.080981
3.69807
Current ratio
year
current asst
current liability
Current ratio
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Debt/equity ratio
total debt
totalequity
year
total debt
totalequity
2010
45823.61
34829.48
2011
42893.26
44241.74
2012
40825.26
56655.09
Debt/equity ratio
1.315656
0.96952
0.720593
Sponsors stake
27124.75
Amir fraz
Farhan khizar
Humaira kanwal
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10849.9
10849.9
5424.95
27124.75
27
40%
40%
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Feasibility Report on
Annexure - XIII
UNITED FLOUR MILL
Financial Plan
Rupees ("000")
Description
Total Fixed cost of the project
Initial Permanent working capital
Total cost of the project
Long Term Debt
Equity Participation
Total Capital Required
Debt/Equity Ratio
LCY
65,459
2,352
67,812
40,687
27,125
67,812
Debt-to-Equity Ratio:
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FCY
60 :
28
Total cost
65,459
2,352
67,812
40,687
27,125
67,812
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Market Analysis
Brief description of market:
Like every other industry, milling is subject to increased market pressures.
Customers demand consistent quality and product variety while production
efficiency must be maintained if not improved. A FOSS solution can prove an
important ally in walking such a tightrope.
Pakistan has a rich and vast natural resource base, covering various ecological
and climatic zones; hence the country has great potential for producing all
types of food commodities. Agriculture has an important direct and indirect
role in generating economic growth. The importance of agriculture to the
economy is seen in three ways: first, it provides food to consumers and
fibres for domestic industry; second, it is a source of scarce foreign
exchange earnings; and third, it provides a market for industrial goods
2004-05
21612
2005-06
21277
2006-07
23295
2007-08
20959
2008-09
23421
Present demand:
Present demand of flour is about 25525000 tons in this current year.
Demand supply gap:
The supply of flour is about 23225000 tons and demand is about 25525000 tons.
Retail price
The retail price of 20kg bag of floure is 560
The retail price of 20kg bag of maida is 760
The retail price of 20kg bag of bran is 240
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Distribution channel:
First of all our salse man collect the orders from whole sale dealers than from
whole sale dealer the shop keeper collect the flour than ultimate consumers
purchase from retail store
Strategic Recommendations
Initially, the product would be launched in the local market. The
preferred mode of distribution is going directly to the wholesalers.
There is an option of having no involvement of any distributor between
the manufacturer and the wholesaler in the city where manufacturing
is being done. By giving healthier profit margins to the wholesalers,
the wholesalers will hence promote the product. This strategy is
important to introduce such a product and to create an extensive
distribution and sales channel. The company will later expand into
other cities through a distributor network.
Technical analysis
Brief description of technical aspects:
There are five roll systems in a flour mill: break, sizing, midds (for middlings), low
grade, and residue.
In the break system, the kernel is opened, the bran flattened and the endosperm
broken into large chunks. Al-though some flour is produced here, the goal in the
break system is not to produce a lot of flour but to maximize separation of bran
from endosperm. Because the break rolls are at the beginning of the milling
process, the quality of the work done here effects each subsequent step, thus
determining both the yield of flour and the quality of that flour. If the rolls are too
aggressive, portions of the bran may be torn or ground into dust that will be
impossible to separate from the endosperm in later steps.
In the sizing system, rolls are used to further flatten and separate bran and germ
from the endosperm. Sizing rolls are either finely corrugated or smooth. Coarse
and fine sizings are produced on these rolls.
Most of the high quality flour is produced in the midds reduction system. Here the
rolls are either very finely corrugated or smooth.
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Each time stock passes between a pair of rolls, the resulting milled stock is run
through a purifier, primarily gyratory bolters with stacks of sieves with different
screen and cloth meshes. Vibration and air flow contribute to stratification and
separation of the material. The material which will pass through ("thrus") the
finest (bottom) sieve cloth in the purifier is flour. Each set of rolls thus has its own
flour "stream," identified by the roll the stock came from before arriving at the
purifier: 1st Break, 2nd Break, 1st Midds, Sizings, etc.
The "overs" of each sieve (particles not fine enough to pass through) are directed
to another set of rolls for further reduction, or to one of the residue streams: bran,
germ, shorts, or red dog. None of these end up in the flour. Indeed, any part of
the wheat that does not enter one of the flour streams will be one of these four
"by-products." These materials, unless there is a specialty market for them, are
generally sold as feedstock.
The separation by size, grade, etc. at each stage of the milling process creates
many dozens of "streams" which wind their way through the mill.
In the end, the various streams are blended and mixed to make various grades of
flour, then treated with the addition of malted barley, bleaching agents,
enrichments, etc. before packaging. If all the flour streams are combined and
blended, the resulting flour is "Straight Grade." 'Patent" is the flour from those
streams containing the least bran and germ particles, thereby the whitest and
lowest in ash. "Clear" flour, on the other hand, is from the "dirtier" flour streams.
While straight and clear flours will have more protein than the patent flour from
the same wheat on the same mill run, this additional protein is from the aleurone
and germ, not gluten from the endosperm.
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Wheat is weighted
on the Plate Form
Elevator 1
Elevator 2
Elevator 3
Elevator 4
Wheat goes to
Separators for
Clearing
Separator 1
Wheat goes to Bin
to send it for
Washing
Washing
Machine
Wheat goes to Bin
to send it for
Grinding
Roller Body
Sifter
Packing
Output is send to
Market
Separator 2
Separator 3
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3)Personnel analysis:
Factory staff:
S.NO
Type of
Staff
Number
required
Basic salary
per Person,
per month
Total
salaries per
year
skilled
14
30000
4068000
Un-skilled
12
25000
3600000
SWOT Analysis
Strengths:
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The labor to manufacture flour is easily available we can reach easily to low cost labor.
Moreover the location for our project is very attractive. We can avail maximum
advantage from this market.
Weaknesses:
Our weakness is that we are not producing flour up to the present demand
of the consumer. Because we have dependend on govt for wheat and electricity problem
is also our weakness.
Opportunities:
Pakistan is an agricultureal country, the production of wheat is very high.flour is
neccessry for all kind of people so, demand of wheat is repedly increases.also there is no
enough flour mills to fullfill the demand so, there is great opportunity to establish flour
mill.
Threats:
Competitive Structure of the market
The market of the flour mills is highly competitive; therefore if the entrepreneur is
not well responsive and fulfilling the demand of the consumer he/she may not be able to
capitalize the opportunity properly.and the qotta system is used the supply of wheat not
provided to flour mills according to their demands.
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List of machinery
Now we will discuss the process of converting Wheat into Flour
There are two section of working area in the Hafiz flour mill
1. Washing section.
2. Grinding section.
Now we will discuss these sections and what is happening in these sections in
detail.
WASHING SECTION
There are few machineries are used for the processing of flour. We will
discuss these machineries in detail one by one. Following are the machineries.
1. SEPRATOR.
2. ELEVATOR.
3. SCOLDER MACHINE.
4. LOW PRESSURE FAN.
5. WASHING MACHINE.
6. STORAGE BIN.
7. MAGNETIC MACHINE.
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1. Seprator
separator is the first machine which is used in the washing section and the
person who operate this machine is roll man.
First when the wheat pool, there are lot of dust and mummnies in the wheat.
This machines main function is that to separate the dust and mummnies from
the wheat.
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2. ELEVATOR
Elevator is the machine which is help full for lifting the wheat at each section. it is
just like the lift and performing the same function of lift. There are two types of
elevator are used in the mill. First is traditional elevator and other is new
technological elevator. Traditional way is that the wheat is lift through the simple
belt.
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Scolder Machine.
With the help of elevator the wheat is shift to the scorer machine.The scorer
machine is one of the most important machines. The main function which is
performed by this machine is to put out the outer layer of the wheat. This is
necessary to understand that this machine put out the outer layer of dry wheat. It
is necessary that the wheat is dry at least twelve hours and then put into the
scorer machine.
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Low
pressure
Fan
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WASHING MACHINE
Washing machine acutely performs three types of functions.
1. Wash with water.
2. Further put out the outer layer
3. To put out the stones.
Magnetic Machine
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Magnetic machine is used to catch the iron particles included in the wheat. In this
machine magnets are installed which help to catch the iron particles.
Grinding Section
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Ruler Body
Ruler body is the machine through which grinding of wheat takes place. This is
the first step of grinding. Wheat comes after the washing section firstly put into
the ruler body for the grinding purpose.
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Shifter
The other machine which is used in the grinding section is the shifter.
This machine main function is that it shifts the flour into different categories.
Categories means that special type of flour is separate from the bran and suji.
There are separate boxes for each item.
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PURIFIER
Purifier machine is used to make the suji.It is independent from the shifter.purifier
has different boxes and each box has show different effect which means that
from one box wastage material is stored and other boxes are for the preparation
of suji.
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Air Lock
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Air lock is used to cease the air because if the air is include in the production
then all the production may be destroy. So thats why air lock is used to cease
the air.
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High pressure fan has a same function as the low pressure fan but the main
difference is that the high pressure fan has a high voltage power full machine.
Battery Cyclones
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Battery cyclones is also help full for the cleaning and it take the pressure from the
low pressure fan and the high pressure fan.
Production worm
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Production worm is the line through which the final product is being passed at
the packing room.
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Special Thanks
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We bow our head, before ALLAH Almighty, who blessed us with potential and
stamina to complete our fesibility report on flour mill.
First of all would like to pay our special regards to Respected Sir Mr. JAVED
IQBAL who provides us guidance at each and every step, in completion of all
this fesibility report. We are especially thankful to those personalities who help us
in collecting data during the fieldwork and also in our practical work.
In this regard our thanks goes to:
Mr:Arsalan rabbani, Mr: Jawad-ul-hasan, Mr: Hunain khan, Mr: hasan
qureshi, Mr: Farzan rafi, mr: Shakeel ahmed, Mr: Mohsin shazad, Mr:
Adnan ch and all of our class fellows.
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