animal feed mill
DESCRIPTION
Fesibitity reportTRANSCRIPT
PAGE 27PUNJAB Feed Mills
A Project on:
PUNJAB Animal Feed Mills
Submitted To:
Sir Labib ShahOwner: M.Amir Irshad BS. Commerce Session 2011-2015Table of Contents
1 Preface
2Dedications
3Acknowledgement
4Executive Summary:
5Company Profile
a. Address of Company
b. Location of Project
c. Product Range Mix
d. Installed Capacity
e. Capacity achieved
6Estimated Cost of Project
f. Fixed Cost
g. Initial Working Capital
7Means of Finance
8Names of Financiers
9Names of Civil Contractor
10Names of Machinery Suppliers
11Machinery Detail
12Machinery
13Implementation Schedule
14SWOT Analysis
15Market Analysis
16Technical Analysis
17Personnel Analysis
18Financial Analysis
19Schedule of Cost of Project
20Assumptions
21Project Return and Ratios, Means of Finance
22Project Visit Highlights
23End words
PrefaceProject Management is an integral part of Bs.commerce Specialization in Finance, because it gives us the practical knowledge of what we have learnt during our study period.Now a day the business environment keeps on changing everywhere. New dimensions of business are coming before us. These dramatic and dynamic changes in business world require the specialties about the all aspects of business of today. Because of these requirements business knowledge became important and business education becomes the need of time. The person with latest knowledge can survive in this vast field .The purpose of the project feasibility is to broaden the vision of practical experiences with theoretical knowledge as it increases ones capabilities to handle problems at various stages and the ability of decision.We have tried our best to collect the valuable information and its relevant facts regarding the animals feed mill plant. We also have visited the plant working at Industrial State SAMMA SATTA (food & feed mills) for making our project reliable and successful .This project concerning with animal food production namely PUNJAB ANIMAL FEED MILL.DedicationI would like to dedicate my efforts for this project to
ALLAH AlMIGHTY
&
MY parents without whom I would not be able to be here
AcknowledgementWe pay our humble gratitude, with humility and submission, to ALLAH, the Almighty, the Omniscient, the Omnipotent & the Omnipresent, who bestowed our potential to accomplish this task. The completion of this issue is, mere, the blessing of ALLAH and Holy Prophet Hazrat Muhammad (S.A.W).
Secondly, we must mention Sir Labib Shah for being kind enough to extend his baseline guidance in the completion of this project report.
We also thank everyone else including our respectable teachers and outspoken friends of the Department who helped in one way or another in the completion of this project.
Introduction
Title PUNJAB ANIMAL FEED MILLProject Assignment:
Each student of Bs.commerce (Finance) 8rd semester required preparing a solid Project Assignment. The Project assignment is given to increase our knowledge about Project Management.
Objectives:
1. SWOT analysis of Cattle Feed.
2. Identify and list down the all aspects and important points of Feed Industry.
3. What is a Production Process.
4. What is Cost of unit, Means of finance, Estimated income statement, Estimated Balance sheet, etc.
Approach to Project:
The Team of project will, analyze, summarize, and interpret the data, which are collected different primary and secondary sources.
Data Collection:
Both primary and secondary means of data will be used to collect the Data. Like Books, Internet, personal visits, teacher guidance etc.
Primary Sources:
The Team of Project personally visited the FOOD & FEED MILL for practical view: Unit selected is;
FIVESTAR FEED MILL SAMMA SATTAQuestionnaire:
Project Team has prepared a Questionnaire that contains 100 Questions and exists on 15 pages for Management of
FIVESTAR FEED MILL SAMMA SATTA.Data Preparation & Analysis:
After collection of all the data through both primary & secondary means, team will used MS. Word, MS. Excel, MS. Power point etc.Limitation:
Team has visited the various people but the information given by them is just based of approximation.
Name of Project PUNJAB ANIMAL FEED MILL
Location of the ProjectHead office: Haroonabad road Faqirwali
Tel:
0300-2762121
Contact Person: M.Aamir Irshad
( CEO)
E-mail:
City :
Faqirwali, District Bahawalnagar
Location : At Haroonabad road near Ghazi cotton industry Product : 1.Milky Wanda 2.Fat Wanda
Installed Capacity : The capacity of projected plant produces 364,454
Bags at 100% Efficiency per Year.
Cost of the Project
Fixed Cost
46,229,877
Initial Working Capital + 23,770,123 70,000,000 Means of FinanceDebt60% Equity40% Names of Lender UBL Ltd . Faqirwali .
Name of Owner M.Amir Irshad Bs.commerce 2011-15 Name of civil Contractor Akbar and Co Contractors Chishtian
Name of Machinery Supplier
Uzair & Co. Engineering Limited,Lahore
Implement Schedule
Over project is constructed with in months and the construction period is start for june 30th 2015. The estimated implementation Schedule is as follows.Selection, Purchase and the Registration of Land :
1st july to 20th JulyConstruction of Building : 25th July to 25th November.Arrival and installation ofMachinery :
10th July to 15th DecemberCompany ProfileAddress of Company:
At Haroonabad road near Ghazi cotton IndustryHead Office of Bahawal Animal Feed Mill is Located in the heart of Faqirwali city which is easily approachable by key regions of Punjab.
Location of the Project. Product RangeUnit will produce two basic types of Wanda for different categories of Animal i.e.
1. Punjab Milky Wanda for Milky Animals.
2. Punjab Fat Wanda
Installed CapacityInstalled capacity of our processing unit is 100 percent, which is 41tonns per day
Capacity AchievedCurrently the unit is achieving the capacity of 75 percent, which is 30 tonns per day
Estmated Cost of Project Total Estimated cost of project is
Fixed Cost
Rs. 46,229,877 Initial Working Capital Rs. 23,770,123 Total cost of project Rs. 70,000,000 MachinaryMixture
Market Analysis
The size of this sector is still growing. Animal feed mills have been set up around the areas where the livestock are kept in abundance. Feed is a major cost (about 70%) in livestock and dairy farming.The processing and manufacturing of feed along with the efficient use of feed by cattle also contribute to the cost of feed. The Agriculture sector contributes 30% of GDP and out of this sub sector Livestock alone contributes 18% to GDP. The demand for compound feed and Urea Molasses Blocks (UMB) is increasing day by day with the increase in awareness among farmers. No animal feeds a mill is operating in the surrounding areas of the project, therefore it is obvious that the project shall yield better results.
The trend for concentrate feeding to livestock is changing from the conventional concentrate feeding to a formulated compound feed. Nowadays, compound feed is used by many livestock and dairy farmers to get the maximum potential in terms of milk and meat. Compound feed and UMB are very beneficial as both provide all essential nutrients to the animal. PRODUCT MANUFACTURING PROCESS
The compound feed preparation process requires.
a) High accuracy and precision of weighing
b) feed ingredient handling and processing
c) Mixingd) Packinge) Labeling
A liquid storage and a direct-weight system for adding fat, molasses, and water is required.Grain processing is done through hammer mill grinding. Mixed feed is delivered in bags or bulk load out to livestock farms. Raw Material RequirementCattle are ruminant animals with four compartment stomach, capable of utilizing fibrousfeedstuffs (forages, roughage, and by product feeds) and Non-Protein Nitrogen (NPN) source like urea that humans cannot utilize. By producing a high-quality protein from these resources otherwise unusable by humans, cattle make a positive contribution to human nutrition in terms of meat and milk.
Product Demand Supply Gap% Surplus/Deficit
Motton 820723(97)(13)%
Beef9991087888%
Milk15044286241358090%
Target Market
The target markets of our project national market. Initially we will sell our product to target region of Multan, Lodharan, Bahawalnagar, Rahim yar khan and Bahawalpur.Punjab, the nutritional requirements are mainly met through fodder crops, shrubs, grasses, and agro industrial wastes. Punjab produces about 45 million tonnes of fodder from 2.03 million hectares of land with an average yield of 22 tones.Improving the quantity and quality of feeds could substantially enhance livestock production from the existing genetic pool of animals. The gap between the requirement and availability of nutrients could be minimized both through proper fodder research and extension policies in terms of better quality seed, seed rate and improved agronomic practices. The National Commission on Agriculture (NCA) 1988 suggested that "if all animals in milk receive full diet which meets their daily appetite without changing the feed mix i.e. maintaining the present poor nutritional requirement balance, this alone could increase milk yield by 100 per cent." Opportunity Rationale
Livestock production is an integral part of Pakistan's agriculture sector and plays a vital role in national economy. At present, livestock is contributing about 52% to the agricultural sector and 10.9% to the GDP. Pakistan is geographically located close to the Middle East and South-East Asia. Both of these regions are deficient in livestock products and depend upon import from other countries. The livestock industry in most of the developed world is highly subsidized. With reduction of subsidies in the wake of WTO, the local livestock sector should have better opportunities to compete. Livestock registered a strong growth of 4.30% over the last years impressive growth of 7.5% due to increase in the livestock and poultry products.The role of livestock in rural economy may be assessed by the fact that 30 to 35 million of the total rural population is engaged in livestock farming, having 2 to 3 cattle/buffalo and 5 to 6 sheep/goats per family deriving 30% to 40% of income from it.During year 2007-08, the total red meat production was 1.55 and 0.58 million tons for beef and mutton, respectively. The per capita consumption indicates a growing demand of meat in the years to come. Calves for Fattening may come from the dairy herd .Duping machine1400000400000
Chain convener15000050000
Hopper25500055000
Rotary chain12500025000
Mixture1150000150000
Evulator1130000130000
Pilot machine1250000250000
Roster1150000150000
Boilor19000090000
Cooler1100000100000
Grander machine1160000160000
Packing hoper1100000100000
Electronic Genrator1100000100000
Technical analysisMajor machinery of Pak Animal Feed Mill is brought from Germany and France. But wehave also acquired the local machinery which is easily available and economical in Pakistan.
Hooper Elevator and Grinding Machine, Motors,
Items of local Machinery
Sr.#Name of Machinery Qty
1Duping machine1
2Chain convener1
3Hopper2
4Rotary chain1
5Boilor4
6Cooler1
7Grander machine1
8Packing hoper1
9Electronic Genrator5
Items of foreign Machinery
Sr.#Items Qty
1Mixture1
2Elevator1
3Pilot machine1
4Roster1
Boiler
Elevator
Packing machine
Animal Feed ProcessA.Factory Staff Including Managerial, Technical, Skilled and un-skilled
Designation numberSalary PmAnnual Salary 2014
CEO1 65000780000
1G.M(Doctor)1 60000720000
2Techical manager2 500001200000
Financial manager1 50000600000
3Doctors6 350002520000
4Supervisor3 22000792000
5Shift Incharge1 16000192000
6salary& wages of workers300000036000000
7Machine Operator3 13000468000
8Security Guard3 8000288000
9Driver3 8000288000
Mali2 5000120000
10Sweeper2 6000144000
Total A44112000
Add Fringe Benefits
50% of total22056000
66168000
B. Administrative and General Staff
DesignationNumberSalary PMAnnual salary 2015
1Chief Accountant1 55000660000
2Assistant Accountant3 350001260000
3Office Boys2 10000240000
4Receptionist1 15000180000
Total B2340000
Add Fringe Benefits
50% of Total1170000
3510000
C. Sales Staff
DesinationsnumberSalary PMA.salary 2016
1marketing mangere1 50000600000
2Assistnats of M.M 3 350001260000
3Sale Manager1 40000480000
4Advertising 240000240000
Total C2580000
Add Fringe Benefits
50% of Total1290000
Deperciation on Office Equipment10%
Ending inventory10%
other munfaturig expenses
erection and installation chages of machinery10%
Depreciation on Motor Vehicle (Straight Line method)20%
Operating Assumptions
Telephone and Telex (per month) Rs. 3,000)4500
Administrative Expense growth rate 10%10%
Printing and Stationery (per month) Rs. 2,0002,500
Legal & professional charges (annual) Rs. 10,00010000
Traveling & conveyance (per month) Rs. 5,00060000
Marketing and Promotional Expenditures Rs. 5,00080000
Amortization of pre-operating expenses yrs. 5 15%
Tax rate 35%35%
Account payable10%
Dividend of profit40%
retained earning 60%
Accured Expense 5%of sale
Account Receiveable 10%of sale
Assumption of Revenue
Sale price per kg kg RS 20
Sale price per bag(37 kg) 700
Means of FinanceDebt 60%
42,000,000Equity 40%
28,000,000
70,000,000 Initial working capitalCurrent Assets Rs.
Cash 8000000
Account Recivable13,776,363
Raw material inventoru 3000000
Advances and Deposits 3993759
Total 28,770,122
Current liabilities
Account Payable2000000
Notes Payable3000000
Total5000000
Initial Working Capital 23,770,122
Cost of the project
Cost of The projectlocalForeignTotal
Land and it development1311000013110000
Building and civil worker1285000012850000
local Machinery820000820000
Foreign Machinery940000940000
Marine insurance,imoprt lience fee3%2820028200
Clearance and internal feesl frieght 20%188000188000
Import and Ipra Surcharge1%94009400
Furniture and Fixture226000226000
Vehicles 1222000012220000
Pre-production Expense324000 324000
Engineering and Technical Fee150000150000
Office Equipment103500103500
Others contigenies12737091273709
Intrest During Construction3,811,068 3,811,068
Total cost of the project 70,000,000
Income Statement
Income Statement
60%
70%
80%
For the year ended
2014
2015
2016
sales
137,763,632
174,500,601
201,134,903
Cost of Sales
82,109,813
90,724,066
100,086,974
Gross Profit
55,653,820
83,776,535
101,047,929
Operating Expense
a)Admenisrative&General expenses
4394000
4715600
5122312
b)selling expenses
1290000
1419000
1560900
Total operating expense
5684000
6134600
6683212
Operating Profit
49,969,820
77,641,935
94,364,717
Non operating expense
Financial Expense
7,560,000
6,064,570
4,536,000
Worker particaption fund
2,498,491
3,882,097
4,718,236
Worker welfare fund
999,396
1,552,839
1,887,294
Amortization
48600
48600
48600
Total non operating expense
11,106,487
11,548,105
11,190,130
Profit Before taxation
38,863,332
66,093,829
83,174,587
Income tax
13,602,166
23,132,840
29,111,105
Net Profit after tax
25,261,166
42,960,989
54,063,482
Dividend
10,104,466
17,184,396
21,625,393
Retained earnings
15,156,700
25,776,593
32,438,089
Balance sheet
As on2014201520162017
Rs.Rs.Rs.Rs.
Assets
Current Assets
Cash balance 23,770,122 4,787,438 63,218,229 47,911,841
Account recievble1377636320113490
ending inventory 15,307,070 22,348,323
Advances deposits & other
short term investment0
Cash &bank balance
Total current Assets 23,770,122 33,870,872 63,218,229 90,373,654
Fixed Assets
Fixed assets 45,905,877 45,905,877 42,610,427 39,314,977
Less:Acc. Dep. - 3,295,450 3,295,450 3,295,450
Net Fixed Assets 45,905,877 42,610,427 39,314,977 36,019,527
Pre-Production Exp. 324,000 324,000 275,400 226,800
Less Amortized - 48600 48600 48600
Net Pre-Production Exp. 324,000 275,400 226,800 178,200
Sub total
Total Assets 70,000,000 76,756,699 102,760,006 126,571,382
Liabilities and owner's equity
Current liabilities
Account payables 226,713.20
current maturity of L.T. loan0 8,400,000 8,400,000
Notes payable
intrest payable
Accrude expense
worker paticaption fund
Worker welfare fund
tax payable
Total Current liablities0086267138400000
Long Term Liabilities
UBL 42,000,000 33,600,000 25,200,000 16,800,000
Sub Total 42,000,000 33,600,000 25,200,000 16,800,000
Total liabilities 42,000,000 33,600,000 33,826,713 25,200,000
Owner's equity
Capital & reserves:
Capital 28,000,000 28,000,000 28,000,000 28,000,000
Retained earning 15,156,700 40,933,293 73,371,382
Sub Total 28,000,000 43,156,699 68,933,293 101,371,382
Total Liabilities & Equity 70,000,000 76,756,699 102,760,006 126,571,382
Cash flow statementFor the Year Ended2014201520162017
Rs.Rs.Rs,Rs.
Sources
Net profit before tax 38,863,332 66,093,829 83,174,587
Add:Dep. & Amort.3344050 3344050 3344050
Equity 28,000,000
Other Sources
Long Term Loans 42,000,000
increase in Current liabilities - 8,626,713 (226,713)
Decrease in Current assets29083434
Total 70,000,000 42,207,382 107148026.286291923.83
Uses
Fixed Asset 45,905,877
Pre-Production Exp. 324,000
Long Term Loans
Re-Payment of:.
Amounnt of loan paid 8,400,000 8,400,000 8,400,000
Financial charges
Workers particaption fund
Workers welfare fund
Tax Paid 13,602,166 23,132,840 29,111,105
Profit Distribute0 10,104,466 17,184,396 21,625,393
Dec in liability - -
Inc in Current asset029083434 - 42461813
Total 46,229,877 61,190,066 48,717,236 101,598,311
Net Cash Inflow/(Outflow) 23,770,122 (18,982,684) 58,430,790 (15,306,387)
Balance Opening0 23,770,122 4,787,438 63,218,229
Balance Closing 23,770,122 4,787,438 63,218,229 47,911,841
Net Present ValueWhere i 10%
YearYear1Year2Year3Year4
Cash Flow23770122(18982684)58430790(15306387)
PV21609202(15688169)4389985(10454468)
NPV21609202592103310311018(143450)
Internal rate of returnIRR=228%
Payback Period
Payback Period= Irrecoverable in 4 yearsPunjab Animal Feed Mill
Suggested marketing pattern should be as follows
PAGE