Beruflich Dokumente
Kultur Dokumente
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, 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, Egerton Road Lahore, Tel: (042) 111-111-456 Fax: (042)6304926-7 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) 5610572 helpdesk-khi@smeda.org.pk REGIONAL OFFICE KPK Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 9213046-47 Fax: (091) 286908 helpdesk-pew@smeda.org.pk REGIONAL OFFICE BALOCHISTAN Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 831623, 831702 Fax: (081) 831922 helpdesk-qta@smeda.org.pk
September 2013
Pre-Feasibility Study
Table of Contents
1. DISCLAIMER .......................................................................................................................................... 3 2. PURPOSE OF THE DOCUMENT ......................................................................................................... 4 3. INTRODUCTION TO SMEDA .............................................................................................................. 4 4. INTRODUCTION TO SCHEME ........................................................................................................... 5 5. EXECUTIVE SUMMARY ...................................................................................................................... 5 6. BRIEF DESCRIPTION OF PROJECT & PRODUCT ........................................................................ 5 7. CRITICAL FACTORS ............................................................................................................................ 6 8. INSTALLED & OPERATIONAL CAPACITIES ................................................................................. 7 9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT ..................................................................... 7 10. 11. 12. 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10 12.11 13. 13.1 13.2 13.3 13.4 14. POTENTIAL TARGET MARKETS ............................................................................................... 7 PRODUCTION PROCESS FLOW .................................................................................................. 8 PROJECT COST SUMMARY ......................................................................................................... 8 PROJECT ECONOMICS ................................................................................................................ 8 PROJECT FINANCING..................................................................................................................10 PROJECT COST ..........................................................................................................................10 SPACE REQUIREMENT................................................................................................................10 MACHINERY & EQUIPMENT ........................................................................................................11 MACHINE MAINTENANCE ............................................................................................................11 FURNITURE .................................................................................................................................12 OFFICE EQUIPMENT ...................................................................................................................12 RAW MATERIAL REQUIREMENTS ...............................................................................................13 HUMAN RESOURCE REQUIREMENT ...........................................................................................16 REVENUE GENERATION AND PRODUCTION MIX ........................................................................16 ANNEXURE 1 .................................................................................................................................. 18 INCOME STATEMENT ..................................................................................................................18 BALANCE SHEET ........................................................................................................................19 CASH FLOW STATEMENT ...........................................................................................................20 USEFUL LINKS ............................................................................................................................21 KEY ASSUMPTIONS ..................................................................................................................... 22
Pre-Feasibility Study
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 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
Pre-Feasibility Study
2.
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, and production, marketing, finance and business management. The purpose of this document is to facilitate potential investors in Wooden Furniture Manufacturing Unit by providing them with 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 its 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 prefeasibility studies in key areas of investment has been a successful 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.
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Pre-Feasibility Study
4.
INTRODUCTION TO SCHEME
Prime Ministers Small Business Loans Scheme, 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 through National Bank of Pakistan (NBP) and First Women Bank Ltd. (FWBL). Small business loans with tenure upto 7 years, 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
The proposed project is for setting up a Wooden Furniture Manufacturing Unit. This unit will be capable of integrated wooden furniture manufacturing, from sourcing and cutting of wood to retailing of product to the end customer. The project will focus and cater to the growing needs of domestic wooden furniture market. Housing and construction industry has seen a steady growth over the last many years due to a number of factors. These include; development of new housing schemes, introduction of house financing schemes/loans by different banks, increased urbanization, a growing middle class and enhanced purchasing power of the public. All these factors have contributed directly and indirectly towards an increased demand for wooden furniture. The wooden furniture business venture entails a total investment of about Rs. 2.12 million. This includes a capital investment of Rs.1.09 million and a sum of Rs. 1.02 million as initial working capital. The project is financed through 90% debt and 10% equity. The Net Present Value (NPV) of the project is around Rs. 12.29 million with an Internal Rate of Return (IRR) of 61% and a payback period of 2.90 years. Higher return on investment and a steady growth of business is expected with the entrepreneur having some prior experience/education in the related field of business. The project will generate direct employment opportunity for 21 persons.
6.
This unit is capable of producing different sort of wooden furniture i.e. bed sets, dinning sets, sofa sets, misc. furniture (centre table & end tables for sofa set) and office furniture. Wood being the main raw material; the entire finished product predominantly depends on the acquired quality of wood. Detailed technical know-how about the
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Pre-Feasibility Study
quality of wood and the use of seasoned (dry) plays a vital role in the manufacturing of quality furniture. Wood obtained from the forest is of prime quality. Therefore, it is recommended to use dry wood from the forests for manufacturing of quality wooden furniture which is available from the forest reserves like Changa manga, Pakhowal, Kundian, Chicha watni, Bahawalpur and other social forests. Changa manga forest is the major source of wood for furniture. Furniture manufacturing units in Pakistan mostly use Sheesham wood. Other types of woods used in manufacturing furniture are; Teak wood, Walnut wood and Keekar wood. Besides this, substitute material like lasani, winboard are also used in the manufacturing of furniture. Other materials used in the furniture manufacturing process are nails, screws, glue/solution, spirit, lakh, thiner, lacquer, sealer, hardener, etc. These raw materials are easily available in the market. The demand for wooden furniture in domestic market is consistent throughout the year however, it significantly increases during the period of October to March because of the wedding season. The demand for the furniture almost doubles during this period, hence a good time to enter the market. Since strong competition already exists in the domestic market, manufacturing of high quality trendy designs and aggressive marketing is essential to get a prominent place in the market. Wooden furniture is preferred in the domestic market as well as in the international market due to its traditional appeal and durability despite the introduction of new/alternative materials in furniture manufacturing. Over the years entry into the global market has also become more competitive due to demanding factors like green furniture, multi-functionality, simplicity and neutral colors, Ready-to-assemble (RTA) and Do-it-yourself (DIY) furniture. Malaysia, Philippines, Indonesia and China have established strong brand names and have emerged as key market players.
7.
CRITICAL FACTORS
Ensuring availability of seasoned (dry) wood for high quality furniture manufacturing. Seasoned (dry) wood minimizes deforming that may occur due to dampness in wood. Selection of skilled and responsible labor is an important factor as it can improve quality of finished product by better craftsmanship & lower wastage. Specialized labor is recommended.
Pre-Feasibility Study
New designs and styles can build brand equity for the business. Creation of new designs and styles is vital for setting new trends as the market is quite competitive. Aggressive virtual marketing needs to be undertaken in the absence of a physical showroom. Though skilled labor is available in the market, additional manufacturing workload can be sub-contracted to save time and resources. The manufacturing unit will require selling directly to showrooms and direct clients, for which the owner would need to develop extensive knowledge of the market. Higher return on investment and a steady growth of business is expected with the entrepreneur having some prior experience/education in the related field of business. Easy access to raw material should be ensured.
8.
The proposed project is capable of manufacturing complete range of wooden furniture and other allied products to meet the demand of domestic market. Factory will work on 8 hours shift for 300 days. This unit is capable of producing different sort of wooden furniture i.e. bed sets, dinning sets, sofa sets, misc. furniture (centre table & end tables for sofa set) and office furniture. Total number of furniture items produced in year 1 would be 206 that is 60% of total production capacity. However, maximum production capacity of 341 furniture items will be achieved in year 10.
9.
The demand for wooden furniture is higher in densely populated cities of Pakistan i.e. Lahore, Multan, Karachi, Peshawar, Rawalpindi, Islamabad. Establishment of factory in the vicinity of established wooden furniture clusters i.e. Lahore, Chiniot or Gujrat gives the added advantage of easy availability of skilled labor.
Pre-Feasibility Study
these customers to establish the business and increase the customer base. Flourishing hotel and tourism industry can considerably increase the demand for wooden furniture. Large orders can be secured to supply wooden furniture to hotels and resorts. Wooden furniture retail clusters are found in most areas of almost all big cities of Pakistan where the manufactured furniture could be sold.
The unit is capable of producing different sort of wooden furniture. As this project predominantly involves craftsmanship of skilled labor, different type of products can be manufactured. However this particular pre-feasibility focuses on manufacturing of; bed sets, dinning sets, sofa sets, miscellaneous furniture (centre table & end tables for sofa set) and office furniture.
Pre-Feasibility Study
Details of proposed production mix offered by the project are provided in table below: Table 1 - Proposed Production Mix Percentage 40% 10% 25% 15% 10% 100% Table 2 - Proposed Production Mix Details Bed Set Dinning Sofa Set Misc. Set Furniture 20% 20% 20% 20% 30% 30% 30% 30% 50% 50% 50% 50% 100% 100% 100% 100%
Description Bed Set Dinning Set Sofa Set Misc. Furniture Office Furniture Total
The following table shows internal rate of return, payback period and net present value: Table 3 - Project Economics Description Internal Rate of Return (IRR) Payback Period (Yrs) Net Present Value (NPV)
Returns on the project and its profitability are closely linked with; entrepreneur having some practical knowledge about furniture manufacturing, proper selection of wood, hiring of skilled labor and selecting new designs & styles for successful operation of this business.
Pre-Feasibility Study
12.2
Project Financing
Following table provides details of the equity required and variables related to bank loan; Table 4 - Project Financing Description Total Equity (10%) Bank Loan (90%.) Markup to the Borrower (%age/annum) Tenure of the Loan (Years) 12.3 Project Cost
Following requirements have been identified for operations of the proposed business. Table 5 - Capital Investment for the Project Capital Investment Amount (Rs.) Land Building/Infrastructure Furniture & fixtures 69,000 Machinery & Equipment 827,000 Office Equipment 168,000 Pre-operating Cost 35,878 Total Capital Costs 1,099,878 Initial Working Capital 1,023,254 Total Project Cost 2,123,132 12.4 Space Requirement
The land sufficient for setting up the proposed wooden furniture manufacturing unit is approximately 2 kanals (7,200 sq. ft). The land would be acquired on lease preferably in the outskirts of the city. Covered area details of the factory are as follows; Table 6 - Factory Covered Area Details Description Factory Main Hall Carving Room Polish Room Store for un-finished products Store for finished product
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Pre-Feasibility Study
Office for factory admin officer & CAD operator Rooms for Labour Kitchen & Washrooms Total
It is recommended to start the proposed business on rent, this will ensure savings from the high capital cost. Such an area could be acquired for approximately Rs. 50,000 per month, hence total factory rent during year 1 would be approximately Rs. 600,000. 12.5 Machinery & Equipment
Machinery & equipment required for Wooden Furniture Manufacturing Unit can easily be purchased locally. Following table provides list of machinery required for the factory: Table 7 - Factory Machinery Details Machinery Description Unit Unit Price Total Cost Saw 18" 1 42,000 42,000 Saw 27" 1 70,000 70,000 Saw 30" 1 80,000 80,000 Cutter sliding 1 20,000 20,000 Cutter round 1 15,000 15,000 Gauge 14" 1 60,000 60,000 Gauge 18" 1 110,000 110,000 Planer / Shaper 12" 2 70,000 140,000 Spindle Moulder Machine 2 50,000 100,000 Chapaka 2 15,000 30,000 Hand Chapaka (jug saw) 2 15,000 30,000 Grinder 2 6,500 13,000 Drill machine 10 3,500 35,000 Compressor 2 16,000 32,000 Miscellaneous Tools (Hand Tools, Paint 1 20,000 20,000 Gun etc.) Installation costs for machines 1 30,000 30,000 Total Machinery and Equipment 827,000 12.6 Machine Maintenance
As technically advanced machines are not required in the manufacturing process, therefore, machine maintenance cost is low. The major maintenance cost is oiling and greasing of machines.
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Pre-Feasibility Study
12.7
Furniture
Following furniture will be required at the factory; Table 8 - Furniture Costs Unit 1 4 3 2
Description
Office Table Set for CAD Operator Visitors Chairs Table & Chair set for admin, store & production Fire Extinguishers Total Furniture & Fixtures 12.8 Office Equipment
Details for office equipment are as follows; Table 9 Office Equipment Costs Description Unit Cost/Unit (Rs) Computer with LCD 1 40,000 Printer 1 15,000 UPS 1.5 KW 1 30,000 Telephone Sets 2 1,500 Fax Machine 1 10,000 Generator 6 KVA 1 70,000 Total Office Equipment
Total Cost (Rs) 40,000 15,000 30,000 3,000 10,000 70,000 168,000
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Pre-Feasibility Study
12.9
As variety of material is used for the manufacturing of each type of furniture. Following table shows raw material requirement for each type of furniture: Table 10 Bed Set Cost
Costing Bed Set Superior Quality Raw Material Cost Description Wood (Cubic ft) Nails/Screws Glue/Solution Spirit (in Ltr.) Lakh (in kgs) Thinner (in Ltr.) Lacquer (in Ltr.) Wooden Frame for Matress Sealer (in Ltr.) Dressing Set Glass Tapestry Dressing St. (in Meters) Foam Channels, Handles Thinner (Butyl) Thinner (imported) Total No. of Unit 15 1 1 20 1.5 8 2 1 3 16 0.5 1 1 1 1 Rate / Total Unit Amount 2,000 30,000 350 350 300 300 60 1,200 350 525 120 960 300 600 5,000 5,000 285 855 200 3,200 250 125 150 2,500 160 240 150 2,500 160 240 46,165 Raw Material Cost Description Wood (Cubic ft) Nails/Screws Glue/Solution Spirit (in Ltr.) Lakh (in kgs) Thinner (in Ltr.) Lacquer (in Ltr.) Sealer (in Ltr.) Wooden Frame for Matress Dressing Set Glass Tapestry Dressing St. (in Meters) Foam Channels, Handles Thinner (Butyl) Thinner (imported) Total Costing Bed Set Fine Quality No. of Unit 12 1 1 15 1 4 2 2 1 16 0.5 1 1 1 1 Rate / Total Unit Amount 1,500 18,000 350 350 300 300 60 900 350 350 120 480 300 600 285 570 4,000 4,000 200 3,200 250 125 150 2,000 160 240 150 2,000 160 240 31,425 Raw Material Cost Description Wood (Cubic ft) Lasani Nails/Screws Glue/Solution Paint (in Ltr.) Thinner (in Ltr.) Lacquer (in Ltr.) Wooden Frame for Matress Dressing Set Glass Tapestry Dressing St. (in Meters) Foam COB (alternate for Hardner) Thinner (Butyl) Thinner (imported) Channels, Handles Total Costing Bed Set Normal Quality No. of Unit 3 5 1 1 1 10 1 1 16 0.5 1 1 1 1 1 Rate / Total Unit Amount 1,500 4,500 2,250 11,250 350 350 300 300 1,500 1,500 120 1,200 300 300 4,000 4,000 150 2,400 250 125 150 150 450 160 240 2,000 450 160 240 2,000 28,925
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Pre-Feasibility Study
Total
30,300
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Pre-Feasibility Study
Total
17,360
Total
34,410
Total
25,550
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Pre-Feasibility Study
12.10
The labor required for manufacturing process is easily available on daily wages, per unit basis and on permanent employment. It is recommended that only selective skilled labor be employed permanently while others should be hired on temporary basis or as and when required. Following permanent human resource is required at the factory. Table 15 - Factory Staff requirement details No. Monthly Salary Total Annual (Rs) Salary (Rs) Production supervisor 1 30,000 360,000 Carpenter 8 16,000 1,536,000 Machine man 1 16,000 192,000 Polish man 3 16,000 576,000 Carving 2 18,000 432,000 Helpers 2 10,000 240,000 Factory admin officer 1 15,000 180,000 Draftsman / CAD Operator 1 15,000 180,000 Purchaser/Store Officer 1 15,000 180,000 Gate Keeper 1 10,000 120,000 Total Production Staff 21 3,996,000 Description One production supervisor is sufficient for 30 laborers. Salaries of all employees are estimated to increase at 10% annually. 12.11 Revenue Generation and Production Mix
Expected production figures of proposed product mix during year 1 are given in table below: Table 16 Number of Furniture Sale during Year 1 Description Product Mix Total Units Sold Bed Set Superior 20% 8 Fine 30% 18 Normal 50% 36 Dinning Set Superior 20% 2 Fine 30% 5 Normal 50% 9 Sofa Set
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Pre-Feasibility Study
Superior Fine Normal Misc. Furniture Superior Fine Normal Office Furniture Superior Fine Normal Total Furniture Units
5 11 23 6 14 30 5 11 23 206
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Pre-Feasibility Study
13.
13.1
Revenue
ANNEXURE 1
Income Statement
Year 1 11,850,404 Year 2 15,451,801 Year 3 19,291,783 Year 4 24,022,142 Year 5 30,412,906 Year 6 39,186,588 Year 7 51,406,169 Year 8 68,639,336 Year 9 93,202,377 Year 10 128,522,393
Cost of sales Procurement Cost Direct Labor (Production Staff) Direct Electricity Total cost of sales Gross Profit General administration & selling expenses Administration expense Building rental expense for Factory Communications expense (phone, fax, mail, internet, etc.) Transportation cost Office expenses (stationary, entertainment, janitorial services, etc.) Marketing expense Professional fees (legal, audit, consultants, etc.) Depreciation expense Amortization of pre-operating costs Subtotal Operating Income Other income (interest on cash) Earnings Before Interest & Taxes Interest on short term debt Interest expense on long term debt (Debt facility : Bank 1) Subtotal Earnings Before Tax Tax NET PROFIT/(LOSS) AFTER TAX
660,000 600,000 66,000 53,642 3,300 59,252 25,000 145,600 7,176 1,619,970 1,026,237
726,000 660,000 72,600 69,121 3,630 77,259 26,250 145,600 7,176 1,787,636 1,838,657
798,600 726,000 79,860 89,948 3,993 96,459 27,563 145,600 7,176 1,975,198 2,612,123
878,460 798,600 87,846 118,351 4,392 120,111 28,941 154,427 7,176 2,198,303 3,715,782
966,306 878,460 96,631 157,552 4,832 152,065 30,388 154,427 7,176 2,447,835 5,317,746
1,062,937 966,306 106,294 212,223 5,315 195,933 31,907 154,427 2,735,341 7,656,474
1,169,230 1,062,937 116,923 289,130 5,846 257,031 33,502 164,645 3,099,245 11,073,640
1,286,153 1,169,230 128,615 398,085 6,431 343,197 35,178 164,645 3,531,534 16,157,256
1,414,769 1,286,153 141,477 553,302 7,074 466,012 36,936 164,645 4,070,368 23,756,442
1,556,245 1,414,769 155,625 775,378 7,781 642,612 38,783 176,474 4,767,667 35,178,859
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Pre-Feasibility Study
13.2
Balance Sheet
Projected Balance Sheet Year 0 Assets Current assets Cash & Bank Accounts receivable Finished goods inventory Raw material inventory Pre-paid building rent Total Current Assets Fixed assets Land Building/Infrastructure Machinery & equipment Furniture & fixtures Office vehicles Office equipment Total Fixed Assets Intangible assets Pre-operation costs Training costs Total Intangible Assets TOTAL ASSETS Liabilities & Shareholders' Equity Current liabilities Accounts payable Short term debt Other liabilities Total Current Liabilities Other liabilities Deferred tax Long term debt (Debt facility : Bank 1) Total Long Term Liabilities Shareholders' equity Paid-up capital Retained earnings Total Equity TOTAL CAPITAL AND LIABILITIES Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
250,000
173,749 173,749
12,208,637
18,140,062
26,356,095
38,854,567
57,648,613
84,838,968
126,029 126,029
274,495 274,495
355,016 355,016
453,723 453,723
585,803 585,803
771,495 771,495
1,035,933 1,035,933
1,416,463 1,416,463
1,968,585 1,968,585
2,774,796 2,774,796
1,910,819 1,910,819
(844,454) (844,454)
(6,229) (6,229)
1,613,777 1,613,777
4,354,162 4,354,162
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Pre-Feasibility Study
13.3
Projected Cash Flow Statement Year 0 Operating activities Net profit Add: depreciation expense amortization of pre-operating costs Deferred income tax Accounts receivable Finished goods inventory Equipment inventory Raw material inventory Pre-paid building rent Accounts payable Other liabilities Cash provided by operations Financing activities Debt facility : Bank 1 - principal repayment Additions to Debt facility : Bank 1 Issuance of shares Cash provided by / (used for) financing activities Investing activities Capital expenditure Acquisitions Cash (used for) / provided by investing activities NET CASH Year 1 826,384 145,600 7,176 (165,604) (138,255) (191,754) (351,791) (31,500) 126,029 226,284 Year 2 1,521,357 145,600 7,176 (238,054) (180,271) (54,611) (548,353) (38,115) 148,466 763,196 Year 3 2,230,809 145,600 7,176 (277,500) (86,816) (59,978) (853,175) (46,119) 80,521 1,140,516 Year 4 2,998,446 154,427 7,176 (277,500) (99,987) (70,908) (1,324,893) (55,804) 98,707 1,429,662 Year 5 4,154,084 154,427 7,176 (214,887) (129,746) (94,568) (2,053,400) (67,523) 132,080 1,887,641 Year 6 5,836,000 154,427 730 (176,919) (128,072) (3,176,297) (81,703) 185,691 2,613,858 Year 7 7,965,606 164,645 328,362 (244,921) (175,802) (4,903,890) (98,860) 264,438 3,299,577 Year 8 11,279,717 164,645 838,225 (343,615) (244,110) (7,557,153) (119,621) 380,530 4,398,618 Year 9 16,361,295 164,645 1,620,006 (487,622) (342,188) (11,625,324) (144,742) 552,122 6,098,192 Year 10 23,643,759 176,474 2,740,385 (698,636) (483,340) (17,853,188) 833,988 806,211 9,165,654
(623,254) (150,000)
(773,254)
(212,192) (212,192)
(229,804) (229,804)
(269,534) (269,534)
(291,905) (291,905)
(342,372) (342,372)
260,623 260,623
14,092
533,392
1,160,128
1,595,736
2,957,205
4,398,618
9,165,654
20 September 2013
Pre-Feasibility Study
13.4
Useful Links
Prime Ministers 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 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 Pakhtoonkhwa, 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 Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk Security Commission of Pakistan (SECP), www.secp.gov.pk Federation of Pakistan Chambers of Commerce and Industry (FPCCI) www.fpcci.com.pk State Bank of Pakistan (SBP), www.sbp.org.pk Furniture Pakistan, www.furniturepakistan.org Pakistan Institute of Fashion Design (PIFD), www.pifd.edu.pk
21 September 2013
Pre-Feasibility Study
14.
KEY ASSUMPTIONS
Table 18 Operating Assumptions
Factory Hours Operational per day Days operational per month Days operational per year Table 19 - Economy Related Assumptions Annual Electricity Price Growth Annual Salary Growth Rate Rent Growth Rate Annual Sale Price Growth Rate for own Customers Annual Raw Material Price Growth Rate for Wood Annual Raw Material Price Growth Rate other than Wood
8 25 300
Table 20 - Expense Assumptions Communication Expense 10% of Administrative Costs Transportation Expense 1% of Material Procurement Marketing Expense 0.50% of Revenues Table 21 - Cash flow Assumptions Initial Cash in Bank Accounts Payable Cycle in (Days) Accounts Receivable Cycle in (Days) Finished Goods Inventory in (Days) Raw Material Inventory of Wood in (Days) Raw Material Inventory other than Wood in (Days) Table 22 - Depreciation Expense Depreciation Rate for Machinery & Equipment (Annual) Depreciation Rate for Furniture & Fixture (Annual) Depreciation Rate for Office Equipments (Annual)
Table 23 - Financial Assumptions Project Life (Years) 10 Debt Equity Ratio 90 : 10 Interest Rate on Long Term Debt 8% Long Term Debt Tenure (Years) 7 Number of Payment/Year 12 Income Tax Rates Sole Proprietorship Tax Slabs
22 September 2013