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MILLITIANS ICE PLANT

IN THE NAME OF

THE MOST BENEFICENT AND MERCIFUL

THE COOLS 1 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

ON

SUPERVISED BY:

SIR. JAVAID IQBAL

GROUP MEMBERS:

SADIA KHAN 05

SEHRISH SABA 14
THE COOLS 2 DEPARTMENT OF
COMMERCE
MILLITIANS ICE PLANT

HUMAIRA SHAHZADI 62

M. SC ACCOUNTING & FINANCE


(3 rd
semester)

OUR PARENTS
AND
THE COOLS 3 DEPARTMENT OF
COMMERCE
MILLITIANS ICE PLANT

TEACHERS

ALL OUR

WELL WISHERS

AND SPECIALY

SIR JAVAID IQBAL

Almighty ALLAH is the entire source of knowledge and wisdom endowed to mankind
and His dearest Nabi, MUHAMMAD (PBUH) is a torch of guidance and knowledge for
humanity as a whole.

Everyone has a long list of individuals to whom he is indebted. We are no exception. We are
firstly, with humble gratitude bow our heads before Almighty ALLAH for giving us strength,

THE COOLS 4 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

courage, patience and inspiration, and enable us to complete this project. To work for this
project, was a difficult task, because it is about
Ice Manufacturing

We acknowledge with thanks and admiration, our dependence on all of our respondents on
their nice co-operation and giving us their loyal time. We feel Great pleasure and honors to
express our gratitude from the citadel of hearts to our respected and dignified instructor

SIR.JAVAID IQBAL
Without whose guidance it would have been difficult for us to achieve
Our objectives He provide us, his in-depth approach of the subject

Project Management

And taught us a lot of tell analysis techniques which we have applied during data analysis. His
sympathetic behavior has an ever lasting impression on the page of our memory.

THANKS:

Sr. No Description Page #

THE COOLS 5 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

1 Executive summary 7-10


.

2 Introduction 11
.

3 Market Analysis 11
.

4 Technical Analysis 12-17


.

5 Personnel Analysis 18
.

6 Financial Analysis 19-25


.

7 SWOT Analysis 25-26


.

8 Conclusion & Recommendations 26


.

THE COOLS 6 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

The Project:
Most of areas of Pakistan have long duration of summer due to
which demand for ice is high for more than six months of the
year. As Pakistan is a developing country and large portion of the
population cannot afford refrigerators for domestic use. Another
growing market for ice plants are industries linked to food
products i.e. fish, dairy, bakeries, restaurants etc. With this
growing demand a large number of ice plants are operating in the
country.

Bahawalpur is a hottest city of Punjab province of Pakistan. Our


proposed project is useful and beneficial in this city. Food
products industries fish, dairy, bakeries, restaurants are linked to
this industry. Mainly it produces for the general use at home. So
we generate the idea to set up a ice plant according to the
requirements of the people of this city. Depending on the facts
this area of opportunity has not been exploited we primarily
focused on developing an idea to set up a ice manufacturing plant
for people of this city named or to be known as MILLITIANS
ICE PLANT.

This project is related to setting up an ice plant of 20-tons


capacity per day to cater to the needs of the institutions such as
hotels, restaurants, bakeries, dairy, fish sellers etc. The proposed
project will manufacture ice blocks varying from 130 kg to 150 kg
in weight.

Location:
THE COOLS 7 DEPARTMENT OF
COMMERCE
MILLITIANS ICE PLANT

We set up our ice plant near Baghdad station at main road,


Bahawalpur. As ice is not easily available in this area and people
of this area bears a lot of transportation expenses to get ice, so
we select this area to set up our ice plant.

Products Range and Plant Capacity:

Years 2010 2011 2012 2013


capacit 40,000 4400 4840 53240
y 0 0
We are producing ice blocks only. The
proposed project has a capacity of producing 140 ice blocks on
the basis of 2 shifts of 12 hours. The maximum capacity of plant
is 40,000 per annum. Estimated capacity during:

Market Entry Timing:

The ice plant should be started up when the season begins


in mid April and closed when it end up in September. The peak
season is of four months i.e. from mid April to mid August. The
rest of the period i.e. two months is moderate season. The best
time to enter into this business is in the month of April.

Raw Material Requirement:

The basic raw material required for producing ice blocks is water,
common salt. These raw materials are readily available in the
local market. Replenishments needed during maintenance are
ammonia gas and compressor oil.

Machinery Requirements:

The main equipment required for running the ice plant is


compressor, capacitor, condenser, and electric motors, WAPDA
connection power transformer etc

THE COOLS 8 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

.
Name of civil contractors:

CH. NASIR ASSOCITATES

Machinery Suppliers:

AL-KARIM MACHINERY SUPPLIERS LAHORE.

Project Engineering:

The machinery of the proposed project will be purchased from


Lahore locally fabricated.
Implementation Stage:

Total time period for the starting of project is estimated to be 1


year from the date of approval of finance.
Sponsors:

The sponsors to this project of Ice Manufacturing Plant are a


group of three highly enthusiastic people who are committed to
providing ice at reasonable prices with equally perfect services.
The sponsors of the project are professionally qualified in their
fields namely Sadia Khan resident of Dera-Bakha Bahawalpur,
Humaira Shahzadi resident of Baghdad station Bahawalpur,
Sehrish Saba resident of One unit chowk, Bahawalpur. The
overall management and control of the firm will be actively
managed by its partners who will actively participate in
management decisions and control the affairs of the firm.

Cost of the Project:


The total cost of the project is estimated to be Rs. 10786178. The
fixed cost of the project is Rs. 10511478 which are financed
locally. The amount of initial permanent net working capital
required is Rs. 274700.

Means of Finance:

THE COOLS 9 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

Forty (40%) of the estimated cost of the proposed project will be


obtained through loan and the remaining 60%will be contributed
by the Owners.
Financial Plan:

The total cost of the project is estimated to be Rs (10786178).


Forty percent Rs (4314471)of the estimated cost of the proposed
project will be obtained through loan from Habib Bank Ltd and
the remaining 60% Rs (6471707) will be contributed by the
owners.

Implementation Schedule:

S.NO ACTI V I T IES MONTH YEAR


1 Order for Local Machinery November 2009

2 Arrival of Local Machinery at site December 2009


Construction of Building and Civil
3 Works: Start September 2009

Complete October 2009

4 Erection &Installation of Machinery Start December 2009


Complete January 2010

5 Order for Raw Materials February 2010

6 Start of Commercial Production March 2010

Financial Ratios:

The Debt Equity ratio (67%),(39%) , (20%), (8%) Net Profit


Margin ratio (39%) (34%) (43%) (42%) for the given three years
(2010) (2011) (2012) (2013) respectively. Ice manufacturing
Plants financial position is significantly strong as compared to the
industry because it earns a huge profit and short term liquidity
position is very good. So ice Plant has no bankruptcy chances.

THE COOLS 10 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

1) Market Analysis
Target Customers:

The target customers for ice plant can be divided into two categories:

Domestic users, such as people living in rural areas & suburbs of cities, where access to
refrigerators is difficult due to lower purchasing power.
Second category is institutional buyers, who buy in bulk, such as government
organizations, factories, hotels, restaurants, bakeries, fish sellers, dairy plants etc.

Description of Market:

Institutional buyers sell the bulk of the ice block production, in institutions related to food
industry. Business sectors, which utilize ice in the country, include the following:

For the protection of fish, Meat and also for Dairy Plants.

Other potential institutional buyers of ice are bakeries, confectioners, hotels which buy ice
blocks in bulk. There are approximately 70 different leading chain bakeries in different cities
of Pakistan, while approximately 145 fish retail outlets are operating in different major cities
of Pakistan, while more than 520 motels and hotels are operating in different areas of Pakistan.

Present Demand:

THE COOLS 11 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

In market our productions demand is maximum 150 ice blocks per day.

Demand Supply Gap:


Our production of ice blocks is 140 ice blocks per day and there is
demand of 150 ice blocks per day. So there is demand supply gap of 10 blocks.

Ex-factory price:
Our whole sale price is Rs. 180 per ice block

Retail price:
Our retail price is Rs. 200 per ice block.

Distribution Channal:
Ice blocks are supplied to supplier through vegans.

2) Technical Analysis:
Block ice is the most popular type of ice sold for a variety of
reasons. It melts more slowly than other types of ice and thus lasts longer. It can be placed in
open truck with only a tarpaulin to protect it from the elements and shipped to a location of
four hours away.
Its rectangular shape makes it easy to stack of up to 15 meters and store large amounts. Block
ice has merits of easy to transport and separate as well. Other types of ice have the tendency to
freeze into a solid mass, making it difficult to work with.

Manufacturing Process:

Production Process Flow

Cleaning of Sheet
Steel Ice Containers

Placing of Containers
in Water Tank
containing Nacl

Filling of Sheet Steel


Ice Containers with
water while vertically
floating in Nacl Tank

THE COOLS 12 DEPARTMENT OF


COMMERCE Extracting of Ice Blocks
from Sheet Steel
Containers
Movement of Ice Blocks
by hooks
MILLITIANS ICE PLANT

Temp Reduced to 17C to 20C

Delivery of Ice Blocks

Flow Chart:

THE COOLS 13 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

Ice cans are placed in can grids and moved to beneath the filling tank which automatically fills
each can with proper level of pre-cooled water and then stop. Potable water must be used to
make ice intended for human consumption.
The cans are then hoisted and carried to the brine tank and immersed inside. The brine, which
is a calcium chloride solution kept at a temperature of -10, is constantly circulated by
agitator in order to keep the temperature consistent throughout the tank.
Air is blown into the center of the can to induce a swirling motion. This causes any impurities
and air bubbles in the water to be collected in the center of cans. Prior to finish freezing, this
core is removed by a suction pump and replaced with fresh pre-cooled water.
The time required for the water to be frozen varies according to the size of cans being used,
150lbs. block requires 24 hours, 300 lbs. Takes 48 hours.
When the ice has completely formed, the grids are lifted up from the brine tank and moved to
place in the thawing tank. Using the warm water heats the can, until the ice allowed to be slid
out. The block ice is then removed from the can by a can dumper.
The empty cans are returned to filling tank for next ice making cycle. The ice is moved to ice
storage and stacked by an ice stacker, or it can be delivered to customer right away upon
requested.

List of Machinery:

Quanti
Description ty Cost/Unit TOTAL

Ammonia Compressor (8x8) , Driven Wheel 1 300,000 300,000


Ammonia Condensor Atmosphere type with 2" pipe
1200 ft 8 56,400 451,200
Electric Motor 100 H.P.1450 RPM 1 95,000 95,000
Brine Tank for 720 Ice cans, 4mm local made 1 25,000 25,000
Cooling Coil V-type 4" pipe & 1800 ft 1 318,000 318,000
Brine Agitator 18" Fan Metal 1 20,000 20,000
Accumulator for parallel supply of ammonia 1 10,000 10,000
Crane & Trolley with Railing Channel & Girder 1 40,000 40,000
Ammonia Valves for Complete Plant 1 16,000 16,000
Ammonia Pipes for Complete Plant 1 40,000 40,000
Oil Separator Buffer Type 1 16,000 16,000
4 gauge Suction, Discharge, Oil Pressure 4 1,000 4,000
Wood work for Ice Cans, Tank Cover 400 750 300,000
'Ice Cans of 1.5 mm British Gauge 400 2,600 1,040,000
Nuts, Bolt etc. 1 15,000 15,000
Receiver Fittings with all Safety Measure Ammonia
Inspection 1 45,000 45,000
Bends, Union, Nipples, Tee & flange etc. 1 6,550 6,550
Rubber pipes, Brass Valves 1 18,000 18,000
THE COOLS 14 DEPARTMENT OF
COMMERCE
MILLITIANS ICE PLANT

Water Fitting Complete 1 30,000 30,000


Electric Motor 7.5" 2 16,000 32,000
Switch Gins Starters & Switch board with local
Cable 1 95,000 95,000
Centrifugal Pump 2.5"x3" 1 25,000 25,000
Erection Charges of the Plant 1 60,000 60,000

Grand Total 3,001,750

Cooling coil Gas transfer pipe

Receiver Cool water pump

Condenser Raw
water pump

THE COOLS 15 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

Other Equipment

Other Equipment Details Quantity Cost/Unit TOTAL


Generator 100 KVA (Engine Bus) 1 175,000 175,000
Transformer 100 KVA 1 400,000 400,000
Water Bore Diameter 3 4 1 200,000 200,000
Total Equipment Cost 775,000

Furniture & Fixture

Description Qty Cost/Unit Total Cost


Tables 3 5,000 15,000
Chairs 12 1,500 18,000
Fans 4 1,800 7,200
Lights 12 350 4,200
Computer 1 20,000 20,000
Telephone 1 2,500 2,500

Total Furniture & Fixtures 66,900

Office Vehicle

Description Qty Cost/Unit Total Cost


Suzuki Pick-up 1 500,000 500,000
Motorcycle (Honda 70) 1 58,000 58,000
Bicycle (Chinese) 1 4,000 4,000

Total Vehicle Cost 562,000

LAND & BUILDING REQUIREMENT

Description Land Cost


Land Price Per Kanal 4,000,000
Total Land Requirement (Sq . ft) 4,500
Total Land Required in Kanals 1

Total Land Cost 4,000,000

THE COOLS 16 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

Input Requirement:

The basic raw material required for producing ice blocks is water, common salt. These raw
materials are readily available in the local market. Replenishments needed during maintenance
are ammonia gas and compressor oil.

Raw Material

Description 2,010 2,011 2,012 2,013


Ammonia consumption @ Rs. 26 21,840 24,960 28,080 31,200
Nacl consumption @ Rs. 85 5,950 6,800 7,650 8,500
Compressor oil for Rs. 19,600 22,400 25,200 28,000

TOTAL 47,390 54,160 60,930 67,700

Factory overhead:

a) FIXED
COSTS

-Power KW 600 10 72,000


-Insurance @ 0.50% on Fixed Assets 32,557
-Repairs
&Maintenance:
- Machinery @ 2.34% installed cost 70,241
- Building @ 1% construction cost 16,720
- Vehicles @ 5% of cost 28,100

Total Fixed cost 219,618

b) VARIABLE
COST

Power KW 25000 10 KW/Month 1,500,000


GAS 6 40000 Rs. 240,000
Total 1,740,000

THE COOLS 17 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

Water and Gas:

Equipment detail unit Cost/unit Total cost


Water Bore Diameter 3 4 1 200,000 200,000
GAS 6 40000 240,000

Electricity:

10% PER ANNUM.


2010 2011 2012 2013
Direct Electricity 1,500,000 1,650,000 1,815,000 1,996,500
Fixed Electricity
Expense 72,000 79,200 87,120 95,832

Technology involved:
Technology/Process Options

The machinery used for the ice plant is local. It includes compressor, condenser, water tank
suitable for 250-300 ice cans, brine agitator, accumulator for parallel supply of ammonia, crane
and trolley, oil separator, ice cans of size 11 x 22 x 48, electric motor 75 HP etc.

Merits & demerits of a particular technology

The local machinery is readily available in the market at a very reasonable price. One of the
Benefits of using locally manufactured machinery is availability of spare parts and its easier to
Find operators to operate these machines.

Machine Maintenance

The maintenance process starts after mid of October. Normally, it takes one month for the
overhauling of plant, during which the plant is closed for one month.

THE COOLS 18 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

3) Personnel analysis:
Factory staff:

S.NO Type of Staff Number Basic salary Total salaries


required per Person, per year
per month
1 Tank man 6 5,000 180,000

2 Machine 1 6000 36,000


Operator

ADMINISTRATION AND GENERAL STAFF

Description Qty Salary Monthly Annual


Salary Cost
Accounts Officer 1 7,000 7,000 42,000
Security Guard 1 6,000 6,000 36,000
Driver 2 5,000 10,000 60,000
Office Boy 1 3,000 3,000 18,000
Total
Administrative
Expenses 156,000

THE COOLS 19 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

4) Financial analysis:

Cost of Project

Description LOCAL FRGN TOTAL

Land Cost 4,000,000 0 4,000,000


Building/Infrastructure 1,672,000 0 1,672,000
Machinery & Equipment 3,001,750 0 3,001,750
Office Equipment 775,000 0 775,000
Furniture & Fixture 66,900 0 66,900
Vehicle 562,000 0 562,000
Pre-operating Costs 433,828 0 433,828

10,511,47
Total Capital Expenditure 10,511,478 0 8
Working Capital
Cash 200,000 0 200,000
Raw Material Inventory 67,700 0 67,700
Equipment Spare parts
Inventory 7,000 0 7,000

Total Working Capital 274,700 0 274,700

TOATL COST OF THE 10,786,17


PROJECT: 0 8
====== ====== ======

Means of Finance:

Description Percentage Amount in Rs


Debt 40% 4,314,471
Equity 60% 6,471,707

TOTAL DEBT & EQUITY 10,786,178


======

THE COOLS 20 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

Sponsors stake:
60%

Requirement of Initial Working Capital


A) CURRENT ASSETS Amount
Cash in Bank 200,000
Raw Material Inventory 67,700
Machine Spare parts Inventory 7,000
Accounts Receivable 0

Total Assets 274,700

B) Current Liabilities
Accounts Payable 0
Total Current Liabilities: 0

INITIAL NET WORKING CAPITAL (A


-B) 274,700

Assumptions underlying financial statements:

ESTIMATED INCOME STATEMENTS

For the year ending Sept. 30, 2011 2012 2013


Efficiency Assumed : 80% 90% 100%

SALES 6,400,000 7,200,000 8,000,000


COST OF GOODS SOLD :
Raw Material Cost 54,160 60,930 67,700
Direct Labor (Production Staff) 237,600 261,360 287,496
Direct Electricity 1,650,000 1,815,000 1,996,500
GAS 264,000 290,400 319,440
THE COOLS 21 DEPARTMENT OF
COMMERCE
MILLITIANS ICE PLANT

2,205,76 2,427,69 2,671,13


Total 0 0 6

4,194,24 4,772,31 5,328,86


GROSS PROFIT 0 0 4
OPERATING EXPENSES
Administration Staff 171,600 188,760 207,636
Machine Maintenance Cost 70,000 70,000 70,000
Fixed Electricity Expense 79,200 87,120 95,832
Communication Expense (Telephone,
Fax, Internet etc.) 33,000 36,300 39,930
Depreciation expense 711,798 711,798 711,798
Amortization of pre-operating costs 43,383 43,383 43,383
Selling Expenses 66,000 72,600 79,860

Total Operating Expenses 237,600 261,360 287,496

Operating Income (Earning Before 3,956,64 4,510,95 5,041,36


Interest & Taxes) 0 0 8
Interest expense on long term debt 604,026 604,026 604,026
3,352,61 3,906,92 4,437,34
Earning Before Taxes 4 4 2
Taxes 25% 838,154 976,731 1,109,336

2,514,46 2,930,19 3,328,00


Net Profit After Taxes 1 3 7

ESTIMATED BALANCE SHEETS

As on Sept. 30, 2010 2011 2012 2013


CURRENT ASSETS
Cash in Bank 274700 2419639 4619084 7395168
Raw Material Inventory 54160 60930 67700
Machine Spareparts Inventory 7000 7000 7000
Accounts Recievable 0 0 0

Total
Current
Assets 274700 2480799 4687014 7469868
FIXED ASSETS
Land Cost 4000000 4000000 4000000 4000000
Building & Infrastructure 1672000 1504800 1337600 1170400

THE COOLS 22 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

Machinery & Equipment 3001750 2551488 2101225 1650963


Other Equipment 775000 713840 707070 700300
Furniture & Fixtures 66900 56865 46830 36795
Vehicle 562000 477700 393400 309100

Total Fixed
Assets 10077650 9304693 8586125 7867558
INTANGIBLE ASSETS
Pre-Operational Costs 433828 390445 347063 303680
Total Intangible Assets 433828 390445 347063 303680

Total Assets: 10786178.3 12175937 13620202 15641105


===== ==== ===== =====
= == = =
LIABILITIES & EQUITY
Current Liabilities
Accounts Payable 0 0
Current maturity of long term
loan 539309 539309 539309
Total Current Liabilities: 0 539309 539309 539309

OTHER LIABILITIES
Long-term Liabilities 4314471 3235853 2157236 1078618
Total Long-term Liab.: 4314471 3235853 2157236 1078618

SHAREHOLDER'S EQUITY
Paid-up Capital 6471706.98 6471707 6471707 6471707
Retained Earnings 1929067 4451950 7551471
Total Equity: 6471706.98 8400774 10923657 14023178

Total Liab. & Equity: 10786178.3 12175937 13620202 15641105


==== ===== =====
== = =

THE COOLS 23 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

ESTIMATED CASH FLOWS

For the year ending Sept. 30, 2010 2011 2012 2013

Operating activities
Net profit 2572090 3363843 4132695
Add: Depreciation expense 711798 711798 711798
Amortization of pre-operating
costs 43383 43383 43383
Other Resources 0 0 0
Accounts payable 0 0 0
equity 4314471
Long term Loan 6471707
Total 10786178 3327270 4119024 4887875

Uses
Fixed Asset 10077650
Priliminary Exp. 433828
Long term Loan 539309 1078618 1078618
Repayment of:.
Financial Exp. 643022.4738 840961 1033173.745
Profit Distribute
Inc/(dec) in A/R 0
Total 10511478 1182331 1919579 2111792
Cash inflow / Outflow 274700 2144939 2199445 2776084
Balance Opening 274700 2419639 4619084
Balance Closing 274700 2419639 4619084 7395168

THE COOLS 24 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

Loan Repayment Schedule

Habib Bank
Name of the Bank Limited
Amount of loan 4,314,471
Date of sanction of loan 1/1/2009
Date of disbursement of
loan 3/31/2009
Payment of mark Quarterly
up/profit/interest Installments
Half Yearly six months
Payment of participle after the commercial
amount production
Rate of mark
up/profit/interest 20%
Period/Tenor of loan 4
Date of Commercial
production 3/31/2010
Date of Repayment of
Principal 6/30/2010
Due No. of Amount Principle Total Outstanding
Dates Days of mark up Installment Installment Principle
6/30/2009 0 4,314,471
9/30/2009 92 217,497 217,497 4,314,471
12/31/2009 92 217,497 217,497 4,314,471
3/31/2010 90 212,768 212,768 4,314,471
6/30/2010 91 215,133 539,309 754,441 3,775,162
9/30/2010 92 190,310 190,310 3,775,162
12/31/2010 92 190,310 539,309 729,618 3,235,853
3/31/2011 90 159,576 159,576 3,235,853
6/30/2011 91 161,349 539,309 700,658 2,696,545
9/30/2011 92 135,935 135,935 2,696,545
12/31/2011 92 135,935 539,309 675,244 2,157,236
3/31/2012 91 107,566 107,566 2,157,236
6/30/2012 91 107,566 539,309 646,875 1,617,927
9/30/2012 92 81,561 81,561 1,617,927
12/31/2012 92 81,561 539,309 620,870 1,078,618
3/31/2013 90 53,192 53,192 1,078,618
6/30/2013 91 53,783 539,309 593,092 539,309
9/30/2013 92 27,187 27,187 539,309
12/31/2013 92 27,187 539,309 566,496 0

THE COOLS 25 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

Financial Ratios:
RATIOS 2010 2011 2012 2013
Debt Equity Ratio 67% 39% 20% 8%
Net Margin (%) 34% 39% 43% 42%

Project Returns

Description
IRR 28%
Pay Back Period 1.143516173
Sponsors stake

Commentary:
Our Debt Equity Ratio is decreasing yearly and our Net Profit Margin is
increasing yearly. Which shows the company financially strong?

THE COOLS 26 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

5) SWOT Analysis
Strengths:

The labor to manufacture ice 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 ice up to the present demand of the
consumer. Because we have one unit to produced ice if we increase the plant in to 2 then we
increase the production.

Opportunities:

Most of areas of Pakistan have long duration of summer due to which demand
for ice is high for more than six months of the year. As Pakistan is a developing country and
large portion of the population cannot afford refrigerators for domestic use. Another growing
market for ice plants are industries linked to food products i.e. fish, dairy, bakeries, restaurants
etc. With this growing demand a large number of ice plants are operating in the country.

There are approximately 1,300 ice plants operating in the Punjab, catering to the needs of
different institutional and domestic buyers. The total installed capacity of ice plants in Punjab
is approximately 432,669-tons of ice blocks per day2. The need of ice blocks is increasing due
to economic growth, as major buyers are institutional buyers (dairy, bakery, hotel, etc.), who
buy in bulk.

Threats:
Competitive Structure of the market
The market of the ice plant is highly competitive; therefore if the entrepreneur is
not well responsive and fulfilling the demand of the consumer he/she may not be able to
capitalize the opportunity properly.

Selection of the wrong venue


Selection of the wrong venue can be a major hurdle in achieving the desired business
objectives. the clientele taste should be properly tracked.

Conclusion & Recommendation:


The location plays an important role, as finished ice blocks should be easily accessible

THE COOLS 27 DEPARTMENT OF


COMMERCE
MILLITIANS ICE PLANT

to dealers .
It is important that solid ice blocks are produced through proper freezing time
utilization as solid ice blocks are much heavier, more transparent and provides higher
price in the market.
Weather factor plays an important role, due to seasonal nature of the business i.e. In
summers the demand for ice blocks increases, while after mid September the
temperature starts changing & demand starts to fall, which means the entrepreneur
should reduce the production according to the demand of ice.
One of the most important aspects for success of any business is minimizing the cost of
production, in case of ice plant this can be achieved by proper training of workers,
which would ensure reduction in raw material wastage and better maintenance of
machinery etc.
It is advisable to run the plant on natural gas, rather than electricity, as the major
expense in production of ice is electricity. The use of natural gas instead of electricity
will reduce the electricity expense approximately by half.

In order to sell the ice blocks, it is recommended to develop a chain of dealers who buy the ice
Blocks on regular basis. The dealer deposits a guarantee in the shape of cash security, keeping
in view the number of blocks to be purchased on daily basis. In case the dealer is unable to
pick the agreed number of blocks on a particular day, the amount is deducted from his security.

THE COOLS 28 DEPARTMENT OF


COMMERCE