PAGE 27PUNJAB Feed Mills

A Project on:

PUNJAB Animal Feed Mills

Submitted To:

Sir Labib ShahOwner: M.Amir Irshad BS. Commerce Session 2011-2015Table of Contents

1 Preface

2Dedications

3Acknowledgement

4Executive Summary:

5Company Profile

a. Address of Company

b. Location of Project

c. Product Range Mix

d. Installed Capacity

e. Capacity achieved

6Estimated Cost of Project

f. Fixed Cost

g. Initial Working Capital

7Means of Finance

8Names of Financiers

9Names of Civil Contractor

10Names of Machinery Suppliers

11Machinery Detail

12Machinery

13Implementation Schedule

14SWOT Analysis

15Market Analysis

16Technical Analysis

17Personnel Analysis

18Financial Analysis

19Schedule of Cost of Project

20Assumptions

21Project Return and Ratios, Means of Finance

22Project Visit Highlights

23End words

PrefaceProject Management is an integral part of Bs.commerce Specialization in Finance, because it gives us the practical knowledge of what we have learnt during our study period.Now a day the business environment keeps on changing everywhere. New dimensions of business are coming before us. These dramatic and dynamic changes in business world require the specialties about the all aspects of business of today. Because of these requirements business knowledge became important and business education becomes the need of time. The person with latest knowledge can survive in this vast field .The purpose of the project feasibility is to broaden the vision of practical experiences with theoretical knowledge as it increases ones capabilities to handle problems at various stages and the ability of decision.We have tried our best to collect the valuable information and its relevant facts regarding the animals feed mill plant. We also have visited the plant working at Industrial State SAMMA SATTA (food & feed mills) for making our project reliable and successful .This project concerning with animal food production namely PUNJAB ANIMAL FEED MILL.DedicationI would like to dedicate my efforts for this project to

ALLAH AlMIGHTY

&

MY parents without whom I would not be able to be here

AcknowledgementWe pay our humble gratitude, with humility and submission, to ALLAH, the Almighty, the Omniscient, the Omnipotent & the Omnipresent, who bestowed our potential to accomplish this task. The completion of this issue is, mere, the blessing of ALLAH and Holy Prophet Hazrat Muhammad (S.A.W).

Secondly, we must mention Sir Labib Shah for being kind enough to extend his baseline guidance in the completion of this project report.

We also thank everyone else including our respectable teachers and outspoken friends of the Department who helped in one way or another in the completion of this project.

Introduction

Title PUNJAB ANIMAL FEED MILLProject Assignment:

Each student of Bs.commerce (Finance) 8rd semester required preparing a solid Project Assignment. The Project assignment is given to increase our knowledge about Project Management.

Objectives:

1. SWOT analysis of Cattle Feed.

2. Identify and list down the all aspects and important points of Feed Industry.

3. What is a Production Process.

4. What is Cost of unit, Means of finance, Estimated income statement, Estimated Balance sheet, etc.

Approach to Project:

The Team of project will, analyze, summarize, and interpret the data, which are collected different primary and secondary sources.

Data Collection:

Both primary and secondary means of data will be used to collect the Data. Like Books, Internet, personal visits, teacher guidance etc.

Primary Sources:

The Team of Project personally visited the FOOD & FEED MILL for practical view: Unit selected is;

FIVESTAR FEED MILL SAMMA SATTAQuestionnaire:

Project Team has prepared a Questionnaire that contains 100 Questions and exists on 15 pages for Management of

FIVESTAR FEED MILL SAMMA SATTA.Data Preparation & Analysis:

After collection of all the data through both primary & secondary means, team will used MS. Word, MS. Excel, MS. Power point etc.Limitation:

Team has visited the various people but the information given by them is just based of approximation.

Name of Project PUNJAB ANIMAL FEED MILL

Location of the ProjectHead office: Haroonabad road Faqirwali

Tel:

0300-2762121

Contact Person: M.Aamir Irshad

( CEO)

E-mail:

amirgill121@gmail.com

City :

Faqirwali, District Bahawalnagar

Location : At Haroonabad road near Ghazi cotton industry Product : 1.Milky Wanda 2.Fat Wanda

Installed Capacity : The capacity of projected plant produces 364,454

Bags at 100% Efficiency per Year.

Cost of the Project

Fixed Cost

46,229,877

Initial Working Capital + 23,770,123 70,000,000 Means of FinanceDebt60% Equity40% Names of Lender UBL Ltd . Faqirwali .

Name of Owner M.Amir Irshad Bs.commerce 2011-15 Name of civil Contractor Akbar and Co Contractors Chishtian

Name of Machinery Supplier

Uzair & Co. Engineering Limited,Lahore

Implement Schedule

Over project is constructed with in months and the construction period is start for june 30th 2015. The estimated implementation Schedule is as follows.Selection, Purchase and the Registration of Land :

1st july to 20th JulyConstruction of Building : 25th July to 25th November.Arrival and installation ofMachinery :

10th July to 15th DecemberCompany ProfileAddress of Company:

At Haroonabad road near Ghazi cotton IndustryHead Office of Bahawal Animal Feed Mill is Located in the heart of Faqirwali city which is easily approachable by key regions of Punjab.

Location of the Project. Product RangeUnit will produce two basic types of Wanda for different categories of Animal i.e.

1. Punjab Milky Wanda for Milky Animals.

2. Punjab Fat Wanda

Installed CapacityInstalled capacity of our processing unit is 100 percent, which is 41tonns per day

Capacity AchievedCurrently the unit is achieving the capacity of 75 percent, which is 30 tonns per day

Estmated Cost of Project Total Estimated cost of project is

Fixed Cost

Rs. 46,229,877 Initial Working Capital Rs. 23,770,123 Total cost of project Rs. 70,000,000 MachinaryMixture

Market Analysis

The size of this sector is still growing. Animal feed mills have been set up around the areas where the livestock are kept in abundance. Feed is a major cost (about 70%) in livestock and dairy farming.The processing and manufacturing of feed along with the efficient use of feed by cattle also contribute to the cost of feed. The Agriculture sector contributes 30% of GDP and out of this sub sector Livestock alone contributes 18% to GDP. The demand for compound feed and Urea Molasses Blocks (UMB) is increasing day by day with the increase in awareness among farmers. No animal feeds a mill is operating in the surrounding areas of the project, therefore it is obvious that the project shall yield better results.

The trend for concentrate feeding to livestock is changing from the conventional concentrate feeding to a formulated compound feed. Nowadays, compound feed is used by many livestock and dairy farmers to get the maximum potential in terms of milk and meat. Compound feed and UMB are very beneficial as both provide all essential nutrients to the animal. PRODUCT MANUFACTURING PROCESS

The compound feed preparation process requires.

a) High accuracy and precision of weighing

b) feed ingredient handling and processing

c) Mixingd) Packinge) Labeling

A liquid storage and a direct-weight system for adding fat, molasses, and water is required.Grain processing is done through hammer mill grinding. Mixed feed is delivered in bags or bulk load out to livestock farms. Raw Material RequirementCattle are ruminant animals with four compartment stomach, capable of utilizing fibrousfeedstuffs (forages, roughage, and by product feeds) and Non-Protein Nitrogen (NPN) source like urea that humans cannot utilize. By producing a high-quality protein from these resources otherwise unusable by humans, cattle make a positive contribution to human nutrition in terms of meat and milk.

Product Demand Supply Gap% Surplus/Deficit

Motton 820723(97)(13)%

Beef9991087888%

Milk15044286241358090%

Target Market

The target markets of our project national market. Initially we will sell our product to target region of Multan, Lodharan, Bahawalnagar, Rahim yar khan and Bahawalpur.Punjab, the nutritional requirements are mainly met through fodder crops, shrubs, grasses, and agro industrial wastes. Punjab produces about 45 million tonnes of fodder from 2.03 million hectares of land with an average yield of 22 tones.Improving the quantity and quality of feeds could substantially enhance livestock production from the existing genetic pool of animals. The gap between the requirement and availability of nutrients could be minimized both through proper fodder research and extension policies in terms of better quality seed, seed rate and improved agronomic practices. The National Commission on Agriculture (NCA) 1988 suggested that "if all animals in milk receive full diet which meets their daily appetite without changing the feed mix i.e. maintaining the present poor nutritional requirement balance, this alone could increase milk yield by 100 per cent." Opportunity Rationale

Livestock production is an integral part of Pakistan's agriculture sector and plays a vital role in national economy. At present, livestock is contributing about 52% to the agricultural sector and 10.9% to the GDP. Pakistan is geographically located close to the Middle East and South-East Asia. Both of these regions are deficient in livestock products and depend upon import from other countries. The livestock industry in most of the developed world is highly subsidized. With reduction of subsidies in the wake of WTO, the local livestock sector should have better opportunities to compete. Livestock registered a strong growth of 4.30% over the last years impressive growth of 7.5% due to increase in the livestock and poultry products.The role of livestock in rural economy may be assessed by the fact that 30 to 35 million of the total rural population is engaged in livestock farming, having 2 to 3 cattle/buffalo and 5 to 6 sheep/goats per family deriving 30% to 40% of income from it.During year 2007-08, the total red meat production was 1.55 and 0.58 million tons for beef and mutton, respectively. The per capita consumption indicates a growing demand of meat in the years to come. Calves for Fattening may come from the dairy herd .Duping machine1400000400000

Chain convener15000050000

Hopper25500055000

Rotary chain12500025000

Mixture1150000150000

Evulator1130000130000

Pilot machine1250000250000

Roster1150000150000

Boilor19000090000

Cooler1100000100000

Grander machine1160000160000

Packing hoper1100000100000

Electronic Genrator1100000100000

Technical analysisMajor machinery of Pak Animal Feed Mill is brought from Germany and France. But wehave also acquired the local machinery which is easily available and economical in Pakistan.

Hooper Elevator and Grinding Machine, Motors,

Items of local Machinery

Sr.#Name of Machinery Qty

1Duping machine1

2Chain convener1

3Hopper2

4Rotary chain1

5Boilor4

6Cooler1

7Grander machine1

8Packing hoper1

9Electronic Genrator5

Items of foreign Machinery

Sr.#Items Qty

1Mixture1

2Elevator1

3Pilot machine1

4Roster1

Boiler

Elevator

Packing machine

Animal Feed ProcessA.Factory Staff Including Managerial, Technical, Skilled and un-skilled

Designation numberSalary PmAnnual Salary 2014

CEO1 65000780000

1G.M(Doctor)1 60000720000

2Techical manager2 500001200000

Financial manager1 50000600000

3Doctors6 350002520000

4Supervisor3 22000792000

5Shift Incharge1 16000192000

6salary& wages of workers300000036000000

7Machine Operator3 13000468000

8Security Guard3 8000288000

9Driver3 8000288000

Mali2 5000120000

10Sweeper2 6000144000

Total A44112000

Add Fringe Benefits

50% of total22056000

66168000

B. Administrative and General Staff

DesignationNumberSalary PMAnnual salary 2015

1Chief Accountant1 55000660000

2Assistant Accountant3 350001260000

3Office Boys2 10000240000

4Receptionist1 15000180000

Total B2340000

Add Fringe Benefits

50% of Total1170000

3510000

C. Sales Staff

DesinationsnumberSalary PMA.salary 2016

1marketing mangere1 50000600000

2Assistnats of M.M 3 350001260000

3Sale Manager1 40000480000

4Advertising 240000240000

Total C2580000

Add Fringe Benefits

50% of Total1290000

Deperciation on Office Equipment10%

Ending inventory10%

other munfaturig expenses

erection and installation chages of machinery10%

Depreciation on Motor Vehicle (Straight Line method)20%

Operating Assumptions

Telephone and Telex (per month) Rs. 3,000)4500

Administrative Expense growth rate 10%10%

Printing and Stationery (per month) Rs. 2,0002,500

Legal & professional charges (annual) Rs. 10,00010000

Traveling & conveyance (per month) Rs. 5,00060000

Marketing and Promotional Expenditures Rs. 5,00080000

Amortization of pre-operating expenses yrs. 5 15%

Tax rate 35%35%

Account payable10%

Dividend of profit40%

retained earning 60%

Accured Expense 5%of sale

Account Receiveable 10%of sale

Assumption of Revenue

Sale price per kg kg RS 20

Sale price per bag(37 kg) 700

Means of FinanceDebt 60%

42,000,000Equity 40%

28,000,000

70,000,000 Initial working capitalCurrent Assets Rs.

Cash 8000000

Account Recivable13,776,363

Raw material inventoru 3000000

Advances and Deposits 3993759

Total 28,770,122

Current liabilities

Account Payable2000000

Notes Payable3000000

Total5000000

Initial Working Capital 23,770,122

Cost of the project

Cost of The projectlocalForeignTotal

Land and it development1311000013110000

Building and civil worker1285000012850000

local Machinery820000820000

Foreign Machinery940000940000

Marine insurance,imoprt lience fee3%2820028200

Clearance and internal feesl frieght 20%188000188000

Import and Ipra Surcharge1%94009400

Furniture and Fixture226000226000

Vehicles 1222000012220000

Pre-production Expense324000 324000

Engineering and Technical Fee150000150000

Office Equipment103500103500

Others contigenies12737091273709

Intrest During Construction3,811,068 3,811,068

Total cost of the project 70,000,000

Income Statement

Income Statement

60%

70%

80%

For the year ended

2014

2015

2016

sales

137,763,632

174,500,601

201,134,903

Cost of Sales

82,109,813

90,724,066

100,086,974

Gross Profit

55,653,820

83,776,535

101,047,929

Operating Expense

a)Admenisrative&General expenses

4394000

4715600

5122312

b)selling expenses

1290000

1419000

1560900

Total operating expense

5684000

6134600

6683212

Operating Profit

49,969,820

77,641,935

94,364,717

Non operating expense

Financial Expense

7,560,000

6,064,570

4,536,000

Worker particaption fund

2,498,491

3,882,097

4,718,236

Worker welfare fund

999,396

1,552,839

1,887,294

Amortization

48600

48600

48600

Total non operating expense

11,106,487

11,548,105

11,190,130

Profit Before taxation

38,863,332

66,093,829

83,174,587

Income tax

13,602,166

23,132,840

29,111,105

Net Profit after tax

25,261,166

42,960,989

54,063,482

Dividend

10,104,466

17,184,396

21,625,393

Retained earnings

15,156,700

25,776,593

32,438,089

Balance sheet

As on2014201520162017

Rs.Rs.Rs.Rs.

Assets

Current Assets

Cash balance 23,770,122 4,787,438 63,218,229 47,911,841

Account recievble1377636320113490

ending inventory 15,307,070 22,348,323

Advances deposits & other

short term investment0

Cash &bank balance

Total current Assets 23,770,122 33,870,872 63,218,229 90,373,654

Fixed Assets

Fixed assets 45,905,877 45,905,877 42,610,427 39,314,977

Less:Acc. Dep. - 3,295,450 3,295,450 3,295,450

Net Fixed Assets 45,905,877 42,610,427 39,314,977 36,019,527

Pre-Production Exp. 324,000 324,000 275,400 226,800

Less Amortized - 48600 48600 48600

Net Pre-Production Exp. 324,000 275,400 226,800 178,200

Sub total

Total Assets 70,000,000 76,756,699 102,760,006 126,571,382

Liabilities and owner's equity

Current liabilities

Account payables 226,713.20

current maturity of L.T. loan0 8,400,000 8,400,000

Notes payable

intrest payable

Accrude expense

worker paticaption fund

Worker welfare fund

tax payable

Total Current liablities0086267138400000

Long Term Liabilities

UBL 42,000,000 33,600,000 25,200,000 16,800,000

Sub Total 42,000,000 33,600,000 25,200,000 16,800,000

Total liabilities 42,000,000 33,600,000 33,826,713 25,200,000

Owner's equity

Capital & reserves:

Capital 28,000,000 28,000,000 28,000,000 28,000,000

Retained earning 15,156,700 40,933,293 73,371,382

Sub Total 28,000,000 43,156,699 68,933,293 101,371,382

Total Liabilities & Equity 70,000,000 76,756,699 102,760,006 126,571,382

Cash flow statementFor the Year Ended2014201520162017

Rs.Rs.Rs,Rs.

Sources

Net profit before tax 38,863,332 66,093,829 83,174,587

Add:Dep. & Amort.3344050 3344050 3344050

Equity 28,000,000

Other Sources

Long Term Loans 42,000,000

increase in Current liabilities - 8,626,713 (226,713)

Decrease in Current assets29083434

Total 70,000,000 42,207,382 107148026.286291923.83

Uses

Fixed Asset 45,905,877

Pre-Production Exp. 324,000

Long Term Loans

Re-Payment of:.

Amounnt of loan paid 8,400,000 8,400,000 8,400,000

Financial charges

Workers particaption fund

Workers welfare fund

Tax Paid 13,602,166 23,132,840 29,111,105

Profit Distribute0 10,104,466 17,184,396 21,625,393

Dec in liability - -

Inc in Current asset029083434 - 42461813

Total 46,229,877 61,190,066 48,717,236 101,598,311

Net Cash Inflow/(Outflow) 23,770,122 (18,982,684) 58,430,790 (15,306,387)

Balance Opening0 23,770,122 4,787,438 63,218,229

Balance Closing 23,770,122 4,787,438 63,218,229 47,911,841

Net Present ValueWhere i 10%

YearYear1Year2Year3Year4

Cash Flow23770122(18982684)58430790(15306387)

PV21609202(15688169)4389985(10454468)

NPV21609202592103310311018(143450)

Internal rate of returnIRR=228%

Payback Period

Payback Period= Irrecoverable in 4 yearsPunjab Animal Feed Mill

Suggested marketing pattern should be as follows

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