bakery & confectionery (rs. 2.04 million)

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

[email protected]

REGIONAL OFFICE Punjab

REGIONAL OFFICE Sindh

REGIONAL OFFICE Khyber Pakhtunkhwa

REGIONAL OFFICE Balochistan

3rd Floor, Building No. 3, Aiwan-e-Iqbal Complex,

Egerton Road Lahore, Tel: (042) 111-111-456 Fax: (042) 36304926-7

[email protected]

5th Floor, Bahria Complex II, M.T. Khan Road,

Karachi. Tel: (021) 111-111-456

Fax: (021) 35610572 [email protected]

Ground Floor State Life Building

The Mall, Peshawar. Tel: (091) 111-111-456


Bungalow No. 15-A Chaman Housing Scheme

Airport Road, Quetta. Tel: (081) 2831623, 2831702


Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost 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 PROJECT & PRODUCT ..................................... 4

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

8 INSTALLED & OPERATIONAL CAPACITIES ................................................ 5

9 POTENTIAL TARGET MARKET .................................................................... 5

10 PROJECT COST SUMMARY ........................................................................ 6

10.1 PROJECT ECONOMICS ............................................................................. 6

10.2 PROJECT FINANCING ............................................................................... 6

10.3 PROJECT COST....................................................................................... 7

10.4 SPACE REQUIREMENT ............................................................................. 7

10.5 MACHINERY AND EQUIPMENT REQUIREMENTS ........................................... 8

10.6 FURNITURE & FIXTURES AND OTHER EQUIPMENTS .................................... 9

10.7 RAW MATERIAL REQUIREMENTS ............................................................... 9

10.8 HUMAN RESOURCE REQUIREMENT ......................................................... 10

10.9 REVENUE GENERATION ......................................................................... 10

10.10 UTILITIES AND OTHER COSTS ................................................................. 11

11 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 PROJECT MANAGEMENT TIPS .................................................... 15

12.5 USEFUL LINKS ...................................................................................... 16

13 KEY ASSUMPTION ..................................................................................... 17

13.1 RAW MATERIAL ASSUMPTIONS ............................................................... 17

13.2 SALES ASSUMPTIONS ............................................................................ 24


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

All SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST - 2

http://www.smeda.org.pk/


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 it’s successful management.

Apart from carefully studying the whole document one must consider critical aspects provided later on, which form basis of any Investment Decision.

3 INTRODUCTION TO SMEDA The Small and Medium Enterprises Development Authority (SMEDA) was established in October 1998 with an objective to provide fresh impetus to the economy through development of Small and Medium Enterprises (SMEs).

With a mission "to assist in employment generation and value addition to the national income, through development of the SME sector, by helping increase the number, scale and competitiveness of SMEs" , SMEDA has carried out ‘sectoral research’ to identify policy, access to finance, business development services, strategic initiatives and institutional collaboration and networking initiatives.

Preparation and dissemination of 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.



4 INTRODUCTION TO SCHEME ‘Prime Minister’s 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 Jammu & 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.



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.



10 PROJECT COST SUMMARY A detailed financial model has been developed to analyze the commercial viability of Bakery and Confectionery business under the ‘Prime Minister’s 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 year’s 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;



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 All SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST - 7


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) Monthly 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 All SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST - 8


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. All SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST - 9


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 (1st Year)

Product Mix 1st 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



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



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 10Revenue 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 salesCost of goods sold 1 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 Operation costs 1 (direct labor) 236,667 263,756 290,148 319,179 351,113 386,240 425,175 467,692 514,461 565,907 Operating costs 3 (direct electricity) 240,000 264,000 290,400 319,440 351,384 386,522 425,175 467,692 514,461 565,907 Operating costs 4 (direct water) 20,708 24,727 29,015 33,913 39,500 45,866 50,489 55,538 61,092 67,202 Operating costs 5 (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 Gross Profit 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 expensesAdministration expense 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 Administration benefits expense 78,000 85,800 94,380 103,818 114,200 125,620 138,182 152,000 167,200 183,920 Building rental 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 expense Outlet 360,000 396,000 435,600 479,160 527,076 579,784 637,762 701,538 771,692 848,861 Travelling expense 56,195 67,100 78,735 92,026 107,189 124,463 137,009 150,710 165,781 182,359 Communications expense (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 Office expenses (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 Depreciation expense 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 Amortization of pre-operating costs 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 Miscellaneous expense 1

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 Operating Income 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

Earnings Before Interest & 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 expense on long term debt (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 - - Earnings Before Tax 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



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 10Operating 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: depreciation expense 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 amortization of pre-operating costs 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 Deferred income tax - 3,034 40,216 102,628 184,973 298,351 354,987 429,434 507,997 590,446 Finished goods inventory (120,061) (20,864) (23,889) (27,257) (31,061) (35,352) (25,844) (28,433) (31,276) (34,404) Equipment inventory - - - - - - - - - - - Raw material inventory (106,692) (33,445) (40,744) (51,676) (65,403) (82,617) (80,258) (96,775) (117,098) (141,689) 816,396 Pre-paid building rent (225,000) (22,500) (24,750) (27,225) (29,948) (32,942) (36,236) (39,860) (43,846) (48,231) 530,538 Accounts payable 321,451 62,939 67,488 77,356 88,574 100,343 74,461 81,782 90,489 59,583

Cash provided by operations (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 activitiesProject Loan - principal repayment - (204,028) (220,962) (239,302) (259,164) (280,674) (303,970) (329,199) - - Additions to Project Loan 1,837,298 - - - - - - - - - - Issuance of shares 204,144 - - - - - - - - - -

Cash provided by / (used for) financing activities 2,041,442 - (204,028) (220,962) (239,302) (259,164) (280,674) (303,970) (329,199) - -

Investing activitiesCapital expenditure (1,559,750) - - - - - - - - - - Acquisitions

Cash (used for) / provided by investing activities (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



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 assetsCash & 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 Finished goods inventory 120,061 140,925 164,814 192,071 223,132 258,484 284,328 312,761 344,037 378,441 Raw material inventory 106,692 140,137 180,881 232,557 297,960 380,576 460,834 557,610 674,708 816,396 - Pre-paid building rent 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 assetsMachinery & equipment 1,124,750 1,012,275 899,800 787,325 674,850 562,375 449,900 337,425 224,950 112,475 - Furniture, fixtures and Office Equipment 270,000 243,000 216,000 189,000 162,000 135,000 108,000 81,000 54,000 27,000 - Office vehicles 45,000 40,500 36,000 31,500 27,000 22,500 18,000 13,500 9,000 4,500 -

Total Fixed Assets 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 assetsPre-operation costs 120,000 108,000 96,000 84,000 72,000 60,000 48,000 36,000 24,000 12,000 -

Total Intangible Assets 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 liabilitiesAccounts payable 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 liabilitiesDeferred tax - 3,034 43,250 145,877 330,851 629,202 984,188 1,413,622 1,921,619 2,512,065 Long term debt (Project Loan) 1,837,298 1,837,298 1,633,270 1,412,308 1,173,007 913,843 633,169 329,199 - - -

Total Long Term Liabilities 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' equityPaid-up capital 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144 Retained earnings 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



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



12.5 Useful Links

• Prime Minister’s Office, www.pmo.gov.pk

• Small and Medium Enterprise Development Authority, www.smeda.org.pk

• National Bank of Pakistan (NBP), www.nbp.com.pk

• First Women Bank Limited (FWBL), www.fwbl.com.pk

• State Bank of Pakistan (SBP), www.sbp.org.pk

• Government of Pakistan, www.pakistan.gov.pk

• Ministry of Industries & Production, www.moip.gov.pk

• Ministry of Education, Training & Standards in Higher Education, http://moptt.gov.pk

• Government of Punjab, www.punjab.gov.pk

• Government of Sindh, www.sindh.gov.pk

• Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk

• Government of Balochistan, www.balochistan.gov.pk

• Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk

• Government of Azad Jamu Kashmir, www.ajk.gov.pk

• 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



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


ingredients Qty

Ingredients

Qty Ingredients


Qty Ingredients



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



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


ingredients Qty

Ingredients

Qty Ingredients


Qty Ingredients



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



Sweets & Nimko Nimko


ingredients Qty

Ingredients

Qty Ingredients


Qty Ingredients



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


ingredients Qty

Ingredients

Qty Ingredients


Qty Ingredients



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



Chicken Bread


ingredients Qty

Ingredients

Qty Ingredients


Qty Ingredients



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


ingredients Qty

Ingredients

Qty Ingredients


Qty Ingredients



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



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


ingredients Qty

Ingredients

Qty Ingredients


Qty Ingredients



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



Biscuits etc


ingredients Qty

Ingredients

Qty Ingredients


Qty Ingredients



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



Chicken Pizza


ingredients Qty

Ingredients

Qty Ingredients


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



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



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 Jaman 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 Jam 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.


bakery & confectionery (rs. 2.04 million)

Documents

lahore tel

project cost summary

head office

project economics

project financing

egerton road lahore

iqbal complex

khan road