Poultry Feed
description
Transcript of Poultry Feed
Feasibility Report A-1 Feed Industry
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PROJECT REPORT
“POULTRY FEED INDUSTRY”
Feasibility Report A-1 Feed Industry
SUBMITTED TO:
Mr. JAVAID IQBAL (Chairman)
SUBMITTED BY:
NAME ROLL NO
HASAN QURESHI (29)
RAHIQA FATIMA (21)
JAWAD UL HASAN (08)
Msc (Accounting & Finance) 3rd Semester
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Feasibility Report A-1 Feed Industry
It is stated that the student of Department of Commerce
presently in M.Sc (Accounting & Finance) 3rd semester have
given project on “POULTRY FEED INDUSTRY”
Department of Commerce is being aware of the importance of practical
training, requires every M.Sc (Accounting & Finance) student to make a
project Assignment.
We also have also visited a Poultry Feed Industry Named as SHAMIM
FEED INDUSTRY SAMA SATTA LINK ROAD,
BAHAWALPUR.
We have tried our best to collect the knowledge and information. It has
broadened out knowledge and vision about the market.
This Report is the Explanation of all work done by project Team.
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PREFACE
Feasibility Report A-1 Feed Industry
ToTO
Due to one person we are able to do such a works.
He has produce skills in our selves. We have
dedicated all our work to very
Intelligent Charming, Educated, And Lime light
For student The One and Best OUR Teacher:
Thank you Sir
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DEDICATED
Javaid Iqbal
Feasibility Report A-1 Feed Industry
Up and above everything, we are thankful to ALMIGHTY
ALLAH, the most Beneficent and merciful, and His Holy
Prophet (Peace be upon him) Who is forever a true torch of
guidance for whole humanity. We am greatly obliged to
“ALLAH” by Whom grace we have been able to complete this
Project Report successfully.
We also offer our thanks to Honorable Mr. Javaid Iqbal for
providing us a chance to work in such a Profitable Industrial
Project.
We also offer our thanks to Respect Parents for being supports
us in all means Financially and Mentally to complete our work.
We also thank to the General Manager Mr. Saqib Faheem
Butt, & officer of the Shamim Feed Industry Sama Satta Link
Road, BAHAWALPUR. to Help us in completing our work..
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ACKNOWLEDGEMENT
Feasibility Report A-1 Feed Industry
ContentsPage
#Executive Summary 07Name & Location of Project 09Objectives & Key Success Factors 12Introduction 14Management 15Project Scheduling Diagram 17Technical Analysis 18Market Analysis 23Economic Analysis 30Ratios 37Assumptions underlying Earning Forecast 42Projected Financial Statements 43Break Even Analysis 53Weighted Average Cost of Capital 55Internal Financial Rate of Return 56Auditing Plan 59Exit Strategy and Risk Assessment 60
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Table of Contents
Feasibility Report A-1 Feed Industry
Title: “POULTRY FEED INDUSTRY”
Project Assignment:
Each student of MSc. (Accounting & Finance) 3rd semester required preparing a sold Project Assignment. The Project assignment is given to increase our knowledge about “Project Management”.
Objectives:
1. SWTO analysis of Poultry 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.
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Executive Summary
Feasibility Report A-1 Feed Industry
Primary Sources:
The Team of Project personally visited the FEED INDUSTRY for practical view: Unit selected is;‘SHAMIM FEED INDUSTRY BAHAWALPUR’
Questionnaire:
Project Team has prepared a Questionnaire that contains 100 Questions and exists on 15 pages for Management of‘SHAMIM FEED INDUSTRY BAHAWALPUR’.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.
Time Frame:
Time period is allowed is one month 15/12/2009 to 18/01/2010.
Limitation:
Team has visited the various people but the information given by them is just based of approximation.
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Feasibility Report A-1 Feed Industry
‘A-1 FEED INDUSTRY’
Head office: “P.O. BOX. 1245 Small-Industries Bahawalpur”
Tel: 0622-88473
Fax: +92-62-88844, 88843
Contact Person: Hasan Qureshi
( CEO)
E-mail: jawad_hasan@ yahoo.com
Jawad ul Hasan
Branch: Sama Satta Link Road Bahawalpur.
“ Pakistan- Bahawalpur”
“ Small- Industries”
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Name of Project
Location of Project
CITY
LOCATION
Feasibility Report A-1 Feed Industry
1-Brailer Feed (for starter & finisher)
2-Layer Feed (for starter & finisher)
3-Breeder
The capacity of projected plant produces 361200 Bags at 100% Efficiency per Year.
Fixed Cost 36136892
Initial Working Capital +34999705
71136597
Debt 49%
Equity 51%
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PRODUCTS
Installed Capacity
Cost of Project
Means of Finance
Feasibility Report A-1 Feed Industry
Muslim Commercial Bank Ltd. Bahawalpur.
A- Hasan Qureshi
B- Jawad ul Hasan
C- Rahiqa Fatima
“Amin & Co. LDA Plaza, Lahore”
.
“Uzair & Co. Engineering Limited,Lahore”
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Names of Lender
Names of Sponsors
Name of Civil Contaractor
Name of MachinerySupplier
Feasibility Report A-1 Feed Industry
Implementation Schedule
Implementation Schedule
Sr.No. Activities Month Year
1Engineering studies and designing of civil works: 2010
Start January 2010
Complete February 2010
3 Construction of Building and Civil works: 2010
Start February 2010
Complete September 2010
4 Order for foreign machinery March 2010
5 Arrival of foreign machinery at sea port September 2010
6 Arrival of foreign machinery a site October 2010
7 Order for local machinery June 2010
8 Arrival of local machinery at site September 2010
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Feasibility Report A-1 Feed Industry
Current RatioCurrent Ratio 2.16 1.87 1.71
Gross Profit RatioG R O S S P R O F I T 12.15% 12.99% 11.54%
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Financial Ratios
Feasibility Report A-1 Feed Industry
Operating Profit Ratio
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Feasibility Report A-1 Feed Industry
OPERATING PROFIT 9.30% 10.26% 8.83%
Net Profit Ratio
6.87% 8.33% 7.39%
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Feasibility Report A-1 Feed Industry
Internal Rate of Return
IRR= 24%
Payback Period
2 YEARS.
Sponsor’s Stake
51%
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Introduction of Company
Feasibility Report A-1 Feed Industry
Shamim Group of Industries
Shamim Feed Industry
Shamim Ghee Mill
Shamim Oil Mill
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Shamim Feed Industry
Feasibility Report A-1 Feed Industry
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Market Analysis
Feasibility Report A-1 Feed Industry
Brief Description of Market
Role of feed and nutrition for livestock production is as essential as management or animal itself but its fiscal contribution surpasses all other aspects. A good nutrition plays a significant role for optimum production and in my opinion, on a scale of 1 to 10, it has rating of 7. Since last two decades science of nutrition, both in humans and animals, has taken centre-stage in the field of research, rather it is considered more important than pathological or medicinal aspects of production and life.To provide feed in Punjab Late Mian Mukhtar (elder brother of Mian Mumtaz) constructed a feed mill, Ani Feed in Gujranwala in 1967. The late Dr. Naseer Butt was the first full time veterinarian nutritionist; Dr. Abdul Ghafoor, Dr. Tariq Anjum and Dr. Zia Qureshi joined Ani Feed as his assistants. In 1968 Aftab Feed was built in Karachi by Mian Aftab; but later on changed its name to Mehran Feeds.
Shahzor group (now named as Sabir's) has erected and started Multan Feeds near Multan while Sharif Feed by Sharif's (Shahbaz Sharif family) has also commenced its commercial operation. Hi Tech and SB group are currently in the process to build new feed mills in Sahiwal, both feed mills are planned to manufacture 120 tons pellet feed per hour. Big Feed has also build a new feed mill tower at the old location and currently producing feed from new facility.
Some new feed mill plants are under construction in Punjab; Dawood Feed by Pakasia group near Pattoki and Khawaja Feeds in Multan, both of these plants are expected to start production within this year. OK Feed (Van Aarsen Pellet Mill C750) by OK Oil is being also constructed near Pattoki. Dr. Ghulam Nabi of Asia Feeds too is planning to build a new feed mill in Karachi along with Mr. Nabi Bakhsh of Sind Feeds, moreover Dr. Aslam of Islamabad group is planning for a new feed mill in Okara area. Younger brother of Dr. Sadiq, Mian Javed who recently separated from SB Poultry to start his own brand as Jadeed Chicks is also assembling a feed mill near Khanewal. These feed mills are expected to commence their operation in 2010.
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Feasibility Report A-1 Feed Industry
Feed Production in Pakistan of Last Five
Productions in Pakistan Province Wise
(tones)
Province Feed capacity 2003 2004 2005 2006 2007 2008 2009
Punjab 3600 1100 1251 1420 2180 2250 2600 3000
Sindh 1500 370 456 510 420 620 680 875
NWFP 250 90 100 100 120 130 80 50
Balochistan 120 66 84 97 97 100 50 50
Total Pakistan 5470 1625 1891 2127 2817 3100 3410 3975
The Demand of feed in last few years is increasing because the agriculture sector is
now growing and the demand of feed is also increasing.
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Present Demand
Distributuion Channel
Feasibility Report A-1 Feed Industry
The Demand & Supply gap is 4% which is increasing per year.
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Demand Supply Gap
Feasibility Report A-1 Feed Industry
The process of feed production is given below
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Technical Analysis
Feasibility Report A-1 Feed Industry
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List of Machinery
Feasibility Report A-1 Feed Industry
Hammer Mill
Mixer
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Feasibility Report A-1 Feed Industry
Elevator
Conveyor
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Feasibility Report A-1 Feed Industry
Strainer
Pellet Machine
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Feasibility Report A-1 Feed Industry
Working of Pellet Machine
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Feasibility Report A-1 Feed Industry
Packing Machine
Boiler
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Feasibility Report A-1 Feed Industry
5- RAW MATERIAL REQUIREMENT
Poultry Feed (For Bridder&Brialer)/50kg 50kg
Material Description
For one Bag Annual Bags Produced
Material in kg for annual Production
Unit cost
Annually Cost each Material
ItemsMaiz 13%
240,800
1,565,200 40 62,608,000Wheat 14% 1,685,600 23 38,768,800Rice 14% 1,685,600 13 21,912,800Sun Fiower 5% 602,000 30 18,060,000cotton seed Meal
2% 240,800 7 1,685,600
Soyabeen Seed
5% 602,000 20 12,040,000
Cynola seed 5% 602,000 20 12,040,000Na,Ca,Mg 6% 722,400 5 3,612,000Vit,Pro,nd other chemicals
5% 602,000 6 3,612,000
Fish,chicken wastage
11% 1,324,400 17 22,514,800
Grains 8% 963,200 8 7,705,600Minerls,Molasses
12% 1,444,800 13 18,782,400
Packing material (Bags)
1 240,800 3 722,400
Total Annual Cost
224,064,400
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Raw Materials Required
Feasibility Report A-1 Feed Industry
Poultry Feed For Layer
50kg
Material Description Require
d
Annual Bags
Produced
Requirement of
Material in unit for annual
Production
Unit cost
Annually Cost each Material
Items
Maiz 13% 782,600 40 31,304,000
Wheat 14% 842,800 23 19,384,400
Rice 14% 842,800 13 10,956,400
Sun Fiower 5% 301,000 30 9,030,000
cotton seed Meal 2% 120,400 7 842,800
Soyabeen Seed 5% 120,400 301,000 20 6,020,000
Cynola seed 5% 301,000 20 6,020,000
Na,Ca,Mg 6% 361,200 5 1,806,000
Vit,Pro,nd other chemicals 5% 301,000 6 1,806,000
Fish,chicken wastage 11% 662,200 17 11,257,400
Grains 8% 481,600 8 3,852,800
Minerls,Molasses 12% 722,400 13 9,391,200
Packing material (Bags) 1 120,400 3 361,200
Total Annual Cost 112032200
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Feasibility Report A-1 Feed Industry
Brief Description of Personnel
The personnel or the human resource depends upon the work and the total employees the personnel of a small feed unit and a big feed industry is different. So, the employees will be efficient and effective so that the feed industry can do better work.
Description NumberSalary per month Rs, Annual cost
CEO 1 60,000 720,000General Manager 1 40,000 480,000Financial Manager 1 40,000 480,000Export Manager 1 40,000 480,000Sectery 1 15,000 180,000Accountant 1 12,000 144,000clerks 4 8,000 384,000Computer operator 1 8,000 96,000Recepnicet 1 8,000 96,000Time Keeper 3 8,000 288,000Drivers 2 7,000 168,000security Guard 3 6,000 216,000Gate keeper 3 6,000 216,000Office Attendence 2 6,000 144,000Mali 1 6,000 72,000Sweepers 2 5,000 120,000TOTAL 4,284,000Add: Fringe Benefits @ 5% 214,200TOTAL ADMIN COST 4,498,200
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Personnel Analysis
Feasibility Report A-1 Feed Industry
Brief Description of Finance
In Financial Analysis we see the sources of finance and calculate the ratios of our
project that how much it is profitable for us and also we make financial statements to
know that how much it is feasible for us.
Cost of Project
The total cost of project is Rs. 69510128
Means of Finance
In the sources of finance we take Loan from MCB and the remaining is from the
Sponsors.
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Financial Analysis
Feasibility Report A-1 Feed Industry
Initial Net Working Capital
CURRENT ASSETS- A AmountCash 6 months 8,850,292Accounts Receivable 5% of sales 12,864,278Raw materials 1 months 18,205,233Finished Goods Inventory 3% production 5,863,441Marketables Securities 4,970,857spares & stores 98,916
Advances & deposits to supplier of Raw Material 1,000,000
Tools 100,000Total Current Assests 51,953,016CURRENT LIABILITIES-B Accounts Payable 3% material cost 6,553,884Accrued Expenses 3% material cost 6,553,884Dealers Deposits 100,000short -term bank borrowings 20% Inventories 3,745,544Total Current Liabilities 16,953,311INITIAL NET WORKING CAPITAL( A-B) 34,999,705
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Initial Working Capital
Feasibility Report A-1 Feed Industry
A-1 POULTRY FEED COMPANY BAHAWALPUR
PROJECT COST & MEANS OF FINANCE (in RS.)
COST OF THE PROJECT LOCAL FRGN TOTALLand & Land Devolpment 8,606,250 0 8,606,250Building & Civil Works 9,236,220 0 9,236,220Foreign Machinery MCB(FCL) 0 6,846,000 6,846,000
Marine insurance etc. 300,770 0 300,770
Customs Duty 12% Imported Machinary 821,520 0 821,520
Import and Iqra surcharges 1% Imported Machinary 68,460 0 68,460
Engineering /Technical Fees 2% Machinary 136,920 0 136,920Erection & Installation 1% Machinary 68,460 0 68,460Interest during construction 5,950,000 0 5,950,000Furniture & Fixture 511,100 0 511,100Vehicles 1,040,000 0 1,040,000Pre-production Expenses 2,251,192 0 2,251,192Contingencies 300,000 0 300,000
TOTAL FIXED COST: 29,290,892
6,846,000
36,136,892
Initial Net Working Capital 34,999,705 0 34,999,705
TOTAL COST OF THE PROJECT 64,290,59
76,846,00
071,136,59
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Cost of Project
Feasibility Report A-1 Feed Industry
A-1 POULTRT FEED INDUSTRY . BAHAWALPURFor the year ending Dec. 31, I II IIIEfficiency Assumed : 65% 70% 75% SALES a ) Bridder Feed 86,086,738 103,113,878 110,510,856b) Bria Feedler 86,086,738 102,131,841 109,458,372c) Layer Feed 85,112,074 101,946,435 109,259,665Total Sales 257,285,551 307,192,154 329,228,894Less: COST OF GOODS SOLD : Raw Materials 218,462,790 247,031,001 264,676,073Labour 6,582,600 6,780,078 6,983,480Manufacturing Expenses 3,779,755 3,953,676 4,069,624Excise Duty \ Sales tax 3% 7,718,567 9,215,765 9,876,867Royalty fee (Straight
line method)
0 0 0
Deprication 1,213,744 1,213,744 1,213,744
Cost of Goods Manufactured 237,757,456 268,194,264 286,819,787Add: Opening Inventory 0 11,726,882 12,628,950Less: Ending Inventory 11,726,882 12,628,950 8,198,110
COST OF G00DS SOLD 226,030,574 267,292,196 291,250,627
G R O S S P R O F I T 31,254,977 39,899,958 37,978,266Less : OPERATING EXPENSES Admin & General Expenses 3,287,831 3,717,777 3,983,333Selling Expenses 4,050,398 4,651,836 4,930,863Total Operating Expenses 7,338,229 8,369,613 8,914,196 OPERATING PROFIT 23,916,749 31,530,344 29,064,070Add: OTHER INCOME 0 0 0Less: NON OPERATING EXPENSES Financial Expenses 5950000 5,650,055 4,460,055Amortzn. of Prelim. Exp 281,399 281,399 281,399Workers participation fund 4% 956,670 1,261,214 1,162,563workers wekfore fund 4% 956,670 1,261,214 1,162,563Total Operating Expenses 8,144,739 8,453,881 7,066,579
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Income Statements
Feasibility Report A-1 Feed Industry
Profit Transferred to Profit& losss Appropriaion account 15,772,010 23,076,463 21,997,491
A-1 POULTRY FEED INDUSTRY . BAHAWALPURESTIMATED BALANCE SHEETS
Construction year I II III
ASSETSFixed Assets
Fixed Assets at cost 33,885,700
33,885,700
33,885,700
33,885,700
Less: Accumulated Dprcn. 01,213,7442,427,488 3,641,232
Net Fixed Assets 33,885,700
32,671,956
31,458,212
30,244,468
Preliminary Expenses: 2,251,1921,969,7931,688,394 1,406,995
Total Fixed Assets 36,136,892
34,641,749
33,146,606
31,651,463
Current Assets
Cash 8,850,29254,270,439
75,133,031
72,756,820
Marketable Securities 4,970,857 313,580 75,683 1,866,517
Accounts Receivables 12,864,27812,864,27
813,063,62
016,461,44
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Finished Goods Inventory 5,863,44111,726,88
212,628,95
08,198,110
Raw Material Inventory 18,205,23313,107,76
79,175,437 6,881,578
Stores & Spares 98,916 99,000 20,000 958,259Advances & Depostis 1,000,0001,419,142 30,000 968,259
Total Current Assets 51,853,01693,801,088110,126,721108,090,988
TOTAL ASSETS 87,989,908
128,442,837
143,273,327
139,742,451
LIABILITIES & EQUITY Long-term Liabilities Muslim Commercial Bank:
Outstanding Loan principal35,000,00
035,000,00
028,000,00
021,000,00
0
Total Long-term Liab.: 35,000,000
35,000,000
28,000,000
21,000,000
Current Liabilities
- Accounts Payable 6,553,8848,738,5129,881,240 10,587,043
- Accrued Expenses 6,553,8847,718,5679,215,765 9,876,867- Workers Partcpn. Fund 0 956,6702,217,884 3,380,447-Workers Welfare Fund 0 956,6702,217,884 3,380,447
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Balance Sheet
Feasibility Report A-1 Feed Industry
Provision for Taxation 0 1,892,641 4,661,817 7,301,516
- Bank Borrowings 3,745,54417,213,812
17,984,799
17,261,688
outstanding loan instalments 05,950,00012,650,055
11,460,055
Interest payable
Total Current Liabilities: 16,853,311
43,426,871
58,829,443
63,248,062
Total Liabilities 51,853,311
78,426,871
86,829,443
84,248,062
EQUITY
Equity 36,136,597
36,136,597
36,136,597
36,136,597
Balance c/d from Profit & loss appropriation account
013,879,369
20,307,287
19,357,792
Total Equity: 36,136,597
50,015,966
56,443,884
55,494,389
Total Liab. & Equity: 87,989,908
128,442,837
143,273,327
139,742,451
A-1 Poultry Feed Industry . BAHAWALPUR
E S T I M A T E D C A S H F L O W S
For the year ended, Const. Yr. I II III
SOURCES
Operating Profit 0 23,916,749 31,530,344 29,064,070
Add Back: Depreciation 0 1,213,744 1,213,744 1,213,744
Amortization 0 281,399 281,399 281,399
Funds from Operations 0 25,411,892 33,025,487 30,559,213
other income 0 0 0 0
Equity 36,136,597 0 0 0
Loan from Mcb 35,000,000 0 0 0
- Custom Debentures 0 0 0 0
Increase in Current Liab. 9,000,000 26,573,560 15,402,572 4,418,619
Increase in Bank Borrowings 3,745,544 13,468,268 770,987 -723,111
TOTAL SOURCES 83,882,141 65,453,720 49,199,046 34,254,722
APPLICATION OF FUNDS
Investment in Fixed Assets: 33,885,700 0 0 0
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Cash Flows
Feasibility Report A-1 Feed Industry
-Preliminary Exp 2,251,192 281,399 281,399 281,399
Financial Expenses 0 5,950,000 5,650,055 4,460,055
Repayment of : 0 0 0 0
Loan from Mcb 0 0 7,000,000 7,000,000
Workers Partcpn. Fund 0 956,670 1,261,214 1,162,563
-Workers Wel. Fund 0 956,670 1,261,214 1,162,563
provision for tax 0 1,892,641 2,769,176 2,639,699
profit distributed 0 0 0 0
Increase in current Assets: 43,002,724 5,888,425 10,113,397 19,924,655
TOTAL 79,139,616 15,925,805 28,336,454 36,630,933
Surplus/(Deficit) 4,742,525 49,527,914 20,862,592 -2,376,211
Cash Balance - Opening 0 4,742,525 54,270,439 75,133,031
Cash Balance - Ending 4,742,525 54,270,439 75,133,031 72,756,820
Strengths:
The labor to manufacture feed 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 feed up to the present demand of the consumer. Because we have dependend on govt for wheat & other raw materials like grains and rice and electricity problem is also our weakness.
Opportunities:
Pakistan is an agricultureal country, the production of feed is very high.feed is neccessry for the chicks(Brailer & Layer) so, demand of feed is repedly increases.also there is no enough feed mills to fullfill the demand so, there is great opportunity to establish feed mill.
Threats:
The market of the flour mills is highly competitive; therefore if the entrepreneur isnot well responsive and fulfilling the demand of the consumer he/she may not be able to capitalize the opportunity properly..
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SWOT ANALYSIS
Feasibility Report A-1 Feed Industry
Conclusion & Recommendations
We conclude that on the basis of field work and survey of feed mills that the feed is necessary product so its demand increase day by day. There is no chance to decrease the demand of feed. Pakistan is an agricultural country and it plays a very important role in our economy. Feed contributes 3.2% GDP in our economy. Availability of raw material is very easy. So, conclusion is that the feed mill is a profit motive business because no chance of decrease of demand.Our recommendation to new investors is that they must invest in feed mill because from the last year there is a great change or entrance of new poultry farmers in Pakistan. So, they step forward to come and invest or to start this business, and also contribute in the economic as well as social growth of Pakistan.
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Feasibility Report A-1 Feed Industry
Special Thanks
We bow our head, before ALLAH Almighty, who blessed us with potential and
stamina to complete our feasibility report on Feed 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 feasibility 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: Hunain khan, Mr: Farzan Rafi, Mr: Shakeel
Ahmed, Mr: Mohsin shazad, Mr: Adnan Ch., Mr: Farhan Khizer & Mr.
Amir Faraz and all of our Class Fellows.
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Feasibility Report A-1 Feed Industry
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