Professional Documents
Culture Documents
Small and Medium Enterprises Development Authority Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road, Lahore Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
helpdesk@smeda.org.pk
REGIONAL OFFICE Punjab 3rd Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road Lahore, Tel: (042) 111-111-456 Fax: (042) 36304926-7 helpdesk.punjab@smeda.org.pk REGIONAL OFFICE Sindh 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 35610572 helpdesk-khi@smeda.org.pk REGIONAL OFFICE Khyber Pakhtunkhwa Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 111-111-456 Fax: (091) 5286908 helpdesk-pew@smeda.org.pk REGIONAL OFFICE Balochistan Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 2831623, 2831702 Fax: (081) 2831922 helpdesk-qta@smeda.org.pk
Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost December, 2013
Table of Contents
1 2 3 4 5 6 7 8 9 10 11
DISCLAIMER .................................................................................................2 Purpose of the Document .........................................................................3 Introduction to SMEDA ..............................................................................3 Introduction to Scheme .............................................................................3 Executive Summary ....................................................................................4 Brief description of project & product ...................................................4 Critical Factors .............................................................................................5 Installed & Operational Capacities .........................................................5 Geographical Potential for Investment ..................................................5 Potential Target Markets / cities ..............................................................5 Production Process Flow ..........................................................................6
Breed Selection .......................................................................................................... 6 Characteristics of Breeds Recommended for Goat Fattening: ........................... 6 Project Economics ..................................................................................................... 7 Project Financing ....................................................................................................... 7 Project Cost ................................................................................................................ 8 Space Requirement ................................................................................................... 8 Machinery and Equipment ........................................................................................ 8 Human Resource Requirement ............................................................................... 9 Revenue Generation ................................................................................................. 9
11.1 11.2
12
13
Annexure ......................................................................................................10
Profit & Loss Statement ........................................................................................................ 10 13.1 Balance Sheet .......................................................................................................... 10 13.2 Cash Flow Statement .............................................................................................. 11 13.3 Useful Project Management Tips .......................................................................... 13 13.4 Useful Links .............................................................................................................. 14
1 DISCLAIMER
This information memorandum is to introduce the subject matter and provide a general idea and information on the said matter. 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 an as is where is basis without any warranties or assertions as to the correctness or soundness thereof. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA, its employees or agents do not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. The contained information does not preclude any further professional advice. The prospective user of this memorandum is encouraged to carry out additional diligence and gather any information which is necessary for making an informed decision; including taking professional advice from a qualified consultant / technical expert before taking any decision to act upon the information. For more information on services offered by SMEDA, please contact our website: www.smeda.org.pk
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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 prefeasibility studies in key areas of investment has been a hallmark of SME facilitation by SMEDA. Concurrent to the prefeasibility 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 Ministers Youth Business Loan Scheme, for young entrepreneurs, with an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide
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subsidised financing at 8% mark-up per annum for one hundred thousand (100,000) beneficiaries, through designated financial institutions, initially through National Bank of Pakistan (NBP) and First Women Bank Ltd. (FWBL). Small business loans upto 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 Pakhtunkhwa, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered Tribal Areas (FATA). SMEDA has been tasked with an advisory role in the implementation of PMs scheme by providing fifty (50) updated pre-feasibilities for referencing by SME beneficiaries and participating banks to optimally utilize their financial resources.
5 EXECUTIVE SUMMARY
The project is related to setting up Goat Fattening Farm in promising areas of Balochistan, where there abundance of fresh water and fodder. Total Cost Estimates is Rs. 2.19 million with fixed investment Rs. 1.39 million and working capital Rs. 0.79 Million Given the cost assumptions IRR and payback are 26% and 4.5 years respectively The most critical considerations or factors for success of the project are 1. Selection of Quality Goat 2. Farm Management Livestock in Balochistan has its potential in contributing to increased incomes to the farmers.
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Product (Breed): Farmers should select good quality goat breed that can yield maximum results for fattening. Through better management the weight gain of these selected breeds would be higher. Target Market: In addition to local markets in Karachi, Lahore and Islamabad an enormous export market exists in Middle Eastern countries, Iran etc. Employment Generation: The proposed project will provide direct employment to 4 people. Financial analysis shows the unit shall be profitable from the very first year of operation
7 CRITICAL FACTORS
Good husbandry practices Selection of annual breed Selection of healthy animals Strong linkages with exporters and Arthis in established markets.
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The farm can be established in goat rearing areas of the country where range grazing is available. Southern, Central and Northern parts of the Balochistan are suitable areas to establish goat farms. Major production areas in Balochistan include Kalat, Khuzdar, Kharan, Mastung, Noshki Mashkel, Sibi, Naseerabad, Jaffarabad, Kohlo, Dera Bugti, Killa Saifullah, Ziarat, Loralai, Zhob, Barkhan and Lasbela Districts
The farmers should not only select high quality breed that can bring maximum results for fattening, but also has to select most suitable animals from the selected breed. Through better management practices the weight gain of these selected breeds would be higher. The animals should be tagged on arrival to the farm. The information to be recorded should include breed of animal, live weight of animal, age of animals, date of purchase etc. 11.2 Characteristics of Breeds Recommended for Goat Fattening:
11.2.1 Barbai The barbari is a meat type breed. Its meet conformation is considered good. Triple kidding and early maturity are common features of this goat. 11.2.2 Chappar It is a small sized with black body. This breed is mostly found in mountainous areas of Balochistan. The meat conformation is considered to be medium to good. Average adult live-weight is 27 kg. 11.2.3 Nachi The Nachi is a meat type goat, medium sized and have black and brown colour. Its meat conformation is considered medium. They are found in parts of Average adult body weight is around 30-32 kg.
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Description Internal Rate of Return (IRR) Payback Period (yrs) Net Present Value (NPV)
Following factors influence the profitability of the proposed venture. Establishment of the farm in areas where cheap land is available, but still not very far from the animal markets. The farming should be done on scientific grounds taking care of Vaccination, Medicine etc. New feeding techniques including concentrate feeding and preparation of urea molasses blocks, wheat straw treatment should be used for better results. Well-trained/experienced staff adds in the efficiency of the farm.
12.2 Project Financing Following table provides details of the debt & equity required and variables related to bank loan; Description Total Equity (@ 10%) (Rs.) Bank Loan (@ 90 %.) (Rs.) Markup to the Borrower (%age/annum) Tenure of the Loan (Years) Grace Period (Years) Details 218,721 1,968,485 8% 8 1
7
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12.3 Project Cost Following requirements have been identified for operations of the proposed business. Table 1: Capital Investment for the Project Capital Investment Land Building/Infrastructure Furniture & fixtures Machinery & Equipment Pre-operating costs Total Capital Costs Initial Working Capital Total Project Cost 12.4 Space Requirement The total area required for Goat Fattening farm is estimated to be 10,884 sq.ft. that comprises of, owner's / management room, sheds for goats, open yard, and stores etc.
Table 2: Space Requirement
Amount (Rs.) 105,817 744,800 10,000 371,667 160,831 1,393,144 794,091 2,187,205
Item
Owners Room Shed Space Stores for Raw Material Attendants Room Open Paddock Total Cost
3,500
240 136 7,000
150
300 300 5
525,000
72,000 40,800 35,000 744,800
50
Total investment in building and infrastructure is calculated to be approximately Rs. 0.74 million. 12.5 Machinery and Equipment Following table provides list of machinery and equipment required for Goat Fattening Farm: Table 3: List of Machinery and Equipment Description Choppers Water Pump Unit Price/Unit Rs. Cost. Rs. 1 15,000 15,000 1 250,000 250,000
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Mangers Tubs Hand Cart Weigh Scale Misc Total 12.6 Human Resource Requirement
12 5 1 1 1
Table 4: Human Resource Requirement Description Owner Manager Attendants Total Staff No. of Employees 1 3 4 Salary per month 25,000 30,000 55,000
Total of 4 employees including owner of the farm would be required for effective management of the farm. Details of monthly salaries is reflected in the above mentioned table. 12.7 Revenue Generation After fattening of 315 goats for 120 days and attaining an average weight of 33 kgs. These goats would be sold in the market at Rs. 10,725.00 (Rs. 325 / Kg of live goat) per goat. Total revenue of Rs. 3.378 million is estimated for the first year. Sales First Year Price Production (Rs./Unit) (Goats) 10,725 315 First Year Sales Revenue (Rs) 3,378,375 3,378,375
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13 ANNEXURE
Profit & Loss Statement
Statement Summaries
Income Statement
Year 1 Revenue Cost of Goods Sold Feed & Vaccination Cost Cost of Goat Direct Labor Repair & Maintenance Utilities Total Cost of Sales Gross Profit General administration & selling expenses Administration expense Travelling & Comm. expense (phone, fax, etc.) Office vehicles running expense Office expenses (stationary, etc.) Depreciation expense Amortization expense Property tax expense Miscellaneous expense Subtotal Operating Income Other income Gain / (loss) on sale of assets Earnings Before Interest & Taxes Interest expense Earnings Before Tax Tax NET PROFIT/(LOSS) AFTER TAX Balance brought forward Total profit available for appropriation Dividend Balance carried forward 3,378,375 709,774 1,417,500 360,000 15,000 60,000 2,562,274 816,101 Year 2 3,842,902 780,751 1,559,250 396,000 17,063 71,500 2,824,564 1,018,338 Year 3 4,345,435 858,826 1,715,175 435,600 19,294 84,700 3,113,595 1,231,840 Year 4 4,888,614 944,709 1,886,693 479,160 21,705 99,825 3,432,092 1,456,522 Year 5 5,475,248 1,039,180 2,075,362 527,076 24,310 117,128 3,783,056 1,692,192 Year 6 6,108,323 1,143,098 2,282,898 579,784 27,121 136,893 4,169,794 1,938,530 Year 7 6,791,018 1,257,407 2,511,188 637,762 30,152 159,440 4,595,950 2,195,069 Year 8 7,130,569 1,383,148 2,762,306 701,538 31,660 175,385 5,054,037 2,076,532 Year 9 7,487,098 1,521,463 3,038,537 771,692 33,243 192,923 5,557,858 1,929,240 Rs. in actuals Year 10 7,861,453 1,673,609 3,342,391 848,861 34,905 212,215 6,111,982 1,749,471
SMEDA
309,000 60,000 7,500 112,647 32,166 16,892 538,205 277,897 277,897 163,383 114,513 22,903 91,611
339,900 66,000 8,250 112,647 32,166 19,215 578,177 440,161 440,161 149,579 290,582 58,116 232,465 91,611 324,076 324,076
373,890 72,600 9,075 112,647 32,166 21,727 622,105 609,735 609,735 131,436 478,299 95,660 382,639 324,076 706,715 706,715
411,279 79,860 9,983 112,647 32,166 24,443 670,377 786,145 786,145 111,786 674,359 134,872 539,487 706,715 1,246,202 1,246,202
452,407 87,846 10,981 112,647 32,166 27,376 723,423 968,770 968,770 90,506 878,263 175,653 702,611 1,246,202 1,948,813 1,948,813
497,648 96,631 12,079 112,647 30,542 749,545 1,188,985 1,188,985 67,460 1,121,525 224,305 897,220 1,948,813 2,846,033 2,846,033
547,412 106,294 13,287 112,647 33,955 813,594 1,381,474 1,381,474 42,501 1,338,973 267,795 1,071,179 2,846,033 3,917,211 3,917,211
602,154 116,923 14,615 112,647 35,653 881,992 1,194,541 1,194,541 15,470 1,179,071 235,814 943,256 3,917,211 4,860,468 4,860,468
662,369 128,615 16,077 112,647 37,435 957,143 972,097 972,097 972,097 194,419 777,677 4,860,468 5,638,145 5,638,145
728,606 141,477 17,685 112,647 39,307 1,039,721 709,750 709,750 709,750 141,950 567,800 5,638,145 6,205,945 6,205,945
91,611 91,611
13.1
Balance Sheet
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Statement Summaries
Balance Sheet
Year 0 Assets Current assets Cash & Bank Accounts receivable Finished goods inventory Equipment spare part inventory Raw material inventory Total Current Assets Fixed assets Land Building/Infrastructure Machinery & equipment Furniture & fixtures Office vehicles Office equipment Total Fixed Assets Intangible assets Pre-operation costs Legal, licensing, & training costs Total Intangible Assets TOTAL ASSETS Liabilities & Shareholders' Equity Current liabilities Accounts payable Total Current Liabilities Other liabilities Long term debt Total Long Term Liabilities Shareholders' equity Paid-up capital Retained earnings Total Equity TOTAL CAPITAL AND LIABILITI Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
SMEDA
Rs. in actuals Year 10
105,817 105,817
3,398,541
4,009,769
4,773,605
5,386,505
6,191,168
6,625,947
162,589 162,589
181,375 181,375
202,424 202,424
226,020 226,020
252,488 252,488
282,192 282,192
315,504 315,504
352,834 352,834
394,801 394,801
276,762 276,762
1,968,485 1,968,485
1,968,485 1,991,387
1,749,889 1,771,960
1,513,150 1,527,673
1,256,762 1,263,736
979,093 978,520
678,379 662,824
352,705 322,169
(45,517)
(60,499)
(75,480)
Note: Total assets value will differ from project cost due to first installment of leases paid at the start of year 0
13.2
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(0)
(0)
(0)
(0)
Statement Summaries
Cash Flow Statement
Year 0 Operating activities Net profit Add: depreciation expense amortization expense Deferred income tax Accounts receivable Finished good inventory Equipment inventory Raw material inventory Accounts payable Other liabilities Cash provided by operations Financing activities Change in long term debt Issuance of shares Purchase of (treasury) shares Cash provided by / (used for) financ Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
SMEDA
Rs. in actuals Year 10
(218,596) (218,596)
(236,739) (236,739)
(256,388) (256,388)
(277,668) (277,668)
(300,715) (300,715)
(325,674) (325,674)
(352,705) (352,705)
Investing activities Capital expenditure (1,393,114) Acquisitions Cash (used for) / provided by invest (1,393,114) NET CASH Cash balance brought forward Cash available for appropriation Dividend Cash carried forward 80,000
80,000 80,000
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12
Pre-Feasibility Study
13.3
Marketing Ads & P.O.S. Promotion: banners and graffiti. Business promotion and dissemination through
Price - Bulk Discounts, Cost plus Introductory Discounts: Price should never be allowed to compromise 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, where applicable.
Adequacy & Competencies: Skilled and experienced staff should be considered an investment and be retained on better terms, if necessary. Performance Based Remuneration: Attempt to manage human resource cost should be focused through performance measurement and performance based compensation. Training & Skill Development: Encouraging training and skill of self & employees through experts and exposure of best practices is route to success. Least cost options for Training and Skill Development (T&SD) may be linked with compensation benefits and awards.
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Pre-Feasibility Study
13.4
Useful Links Prime Ministers Office, www.pmo.gov.pk Government of Pakistan, www.pakistan.gov.pk Ministry of Industries & Production, www.moip.gov.pk Small & Medium www.smeda.org.pk Enterprises Development Authority (SMEDA),
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 Jammu & Kashmir, www.ajk.gov.pk Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk Federation of Pakistan Chambers of Commerce and Industry (FPCCI) www.fpcci.com.pk State Bank of Pakistan (SBP), www.sbp.org.pk National Bank of Pakistan (SBP), www.nbp.com.pk First Women Bank Limited (FWBL), www.fwbl.com.pk Ministry of National Food Security & Research, www.mnfsr.gov.pk Ministry of Education, Training & Standards in Higher Education, www.moptt.gov.pk Securities & Exchange Commission of Pakistan (SECP), www.secp.gov.pk Punjab Board of Investment & Trade (PBIT), 23-Aikman Road, GOR-I, Lahore Tel. 042-99205201, www.pbit.gop.pk Sindh Board of Investment (SBI), 1st Floor, Tower B, Finance & Trade Center, Shahra-e-Faisal, Karachi, Tel. 021-99207512-4, www.sbi.gos.pk All Pakistan Meat Exporters and Processors Association, Lahore, www.apmepa.com Punjab Agriculture and Meat Company (PAMCO), Lahore, www.pamco.bz
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Pre-Feasibility Study
Pakistan Agricultural Research Council (PARC), Islamabad, Tel. 0519203966 www.parc.gov.pk National Agricultural Research Centre (NARC), Islamabad, Tel. 0519255061, www.parc.gov.pk National Veterinary Laboratory, NARC, Islamabad, Tel. 051-9255108 Balochistan Agricultural Research Centre (BARC), Quetta, Tel: 0819213286-7, www.parc.gov.pk Southern-zone Agricultural Research Centre (SARC), Karachi, Tel: 02199261661, 99261561, www.parc.gov.pk Arid Zone Research Institute (AZRI), Bahawalpur, Tel: 0622-876833, www.parc.gov.pk Punjab Livestock & Dairy Development Board (PLDDB), 11- Shami Road, Lahore Cantt. Tel. 042-36676821, www.plddb.pk Faculty of Animal Husbandry, University of Agriculture, Faisalabad, www.uaf.edu.pk Faculty of Veterinary Sciences, University of Agriculture, Faisalabad, www.uaf.edu.pk Faculty of Veterinary and Animal Sciences, Lasbela University of Agriculture, Water & Marine Sciences, Lasbela, www.luawms.edu.pk Faculty of Veterinary Sciences and Animal Husbandry, Sindh Agriculture University, Tondojam, www.sau.edu.pk Gomal College of Veterinary Sciences, Dera Ismail Khan, www.gu.edu.pk KPK Agricultural University, Peshawar, www.aup.edu.pk Pir Mehr Ali Shah Arid Agricultural University, Rawalpindi, www.uaar.edu.pk University College of Veterinary & Animal Sciences, Islamia University Bahawalpur (IUB), www.iub.edu.pk University of Veterinary & Animal Sciences (UVAS), Out Fall Road, Lahore, www.uvas.edu.pk College of Veterinary & Animal Sciences, Jhang, www.uvas.edu.pk/other_campuses Bahauddin Zakariya University (BZU), Multan, www.bzu.edu.pk Animal Husbandry In-Service Training Institute (AHITI), Peshawar, Tel. 091-2960109, 9210309 Veterinary Research Institute (VRI), Ghazi Road, Lahore Cantt., Tel. 04299220140 Agribusiness Support Fund (ASF), Lahore, www.asf.org.pk Directorate of Livestock Farms, L&DD, Lahore, Tel: 042-99201126-7 Govt. Livestock Farm (GLF) Kallurkot District Bhakkar, Tel: 0453-200928
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Pre-Feasibility Study
Livestock Experiment Station (LES), Rakh Ghulaman, District Bhakkar, Tel: 0453-446134 Livestock Experiment Station (LES), Khizarabad, District Sargodha, Tel: 048-3019835 Research & Development Centre, Rakh Khairewala, District Layyah Livestock Experiment Station (LES), Khushab, Tel: 0454-215543 Livestock Experiment Station (LES), Chak Katora, District Bahawalpur, Tel: 062-2442589 Livestock Experiment Station (LES), Haroonabad, District Bahawalnagar, Tel: 063-2252960 Directorate of BLPRI, Kherimurat (Attock), L&DD, Punjab, Tel: 0572213422, 2212130, 2210781 Directorate of Small Ruminants, Multan, L&DD, Punjab, Tel: 061-9210417 Directorate of Livestock Training Centre (LSTC), Bahadurnagar, Okara, Tel: 044-2661393 Livestock Training Centre (LSTC), Sheikhupura, Tel: 056-9200056 Livestock & Fisheries Department, Government of Sindh, www.sindh.gov.pk Agriculture & Livestock Department, Government of KPK, www.khyberpakhtunkhwa.gov.pk Livestock Research Station, Jaba, Mansehra, (Jaba Sheep and Goat Farm), Tel: 0997-301866 Livestock & Dairy Development, Government of Balochistan, www.balochistan.gov.pk Bhagnari Cattle Cum Balochi Sheep Farm Usta Muhammad, Dera Allah Yar c/o L&DD Quetta, Tel: 081-9202564
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