Pre-Feasibility Study

Transcription

1 () Small and Medium Enterprises Development Authority Ministry of Industries & Production Government of Pakistan HEAD OFFICE 4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road, Lahore Tel: (92 42) , Fax: (92 42) REGIONAL OFFICE Punjab 3 rd Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road Lahore, Tel: (042) Fax: (042) helpdesk.punjab@smeda.org.pk REGIONAL OFFICE Sindh 5 th Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) Fax: (021) helpdesk-khi@smeda.org.pk REGIONAL OFFICE Khyber Pakhtunkhwa Ground Floor State Life Building The Mall, Peshawar. Tel: (091) Fax: (091) helpdesk-pew@smeda.org.pk REGIONAL OFFICE Balochistan Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) , Fax: (081) helpdesk-qta@smeda.org.pk Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost December, 2013

2 Table of Contents 1. DISCLAIMER PURPOSE OF THE DOCUMENT INTRODUCTION TO SMEDA INTRODUCTION TO SCHEME EXECUTIVE SUMMARY BRIEF DESCRITION OF PROJECT & PRODUCT CRITICAL FACTORS INSTALLED AND OPERATIONAL CAPACITIES GEOGRAPHICAL POTENTIAL FOR INVESTMENT POTENTIAL TARGET MARKET / CITIES CALF FATTENING PROCESS PROJECT COST SUMMARY PROJECT ECONOMICS PROJECT FINANCING PROJECT COST SPACE REQUIREMENT MACHINERY, EQUIPMENT AND FURNITURE RAW MATERIAL REQUIREMENTS HUMAN RESOURCE REQUIREMENT REVENUE GENERATION OTHER COSTS CONTACTS OF SUPPLIERS AND CONSULTANTS ANNEXURE PROFIT AND LOSS STATEMENT BALANCE SHEET CASH FLOW STATEMENT USEFUL PROJECT MANAGEMENT TIPS USEFUL LINKS KEY ASSUMPTIONS... 18

3 1. DISCLAIMER This information memorandum is to introduce the subject matter and provide a general idea and information on the subject. 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: SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 2

4 2. PURPOSE OF THE DOCUMENT 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, production, marketing, finance and business management. The purpose of this document is to facilitate potential investors in calf fattening farm 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 it s successful management. Apart from carefully studying the whole document, one must consider critical aspects provided later on, which form the basis of investment decisions. 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 pre-feasibility studies, a broad spectrum of business development services is also offered to 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. SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 3

5 4. INTRODUCTION TO SCHEME Prime Minister s Youth Business Loans Programme, for young entrepreneurs, with an allocated budget of Rs. 5.0 Billion for the year , is designed to provide subsidised financing at 8% mark-up per annum for one hundred thousand (100,000) beneficiaries, through designated financial institutions, initially by the National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL). Loans from Rs. 0.1 million to Rs. 2.0 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). 5. EXECUTIVE SUMMARY In calf fattening business, calves are raised on nutritionally balanced feed to get targeted weight gain in a specified time. These calves are grown in groups and each batch stays on farm for a period of 120 days. The expected live body weight gain ranges between grams/day. Higher yields are achievable with better farm management, and by selecting better quality breeds. Calves are raised in rural and semi-urban areas and sold in urban markets normally in livestock markets (Mandies). A farm of 180 calves per annum is suggested in this pre-feasibility study; however, farm will start its production at 80% capacity in first year of production. An estimated investment of Rs 1.82 million is required, out of which capital investment is Rs million and working capital is Rs million. The Internal Rate of Return (IRR), Net Present Value (NPV) & payback period of the project are 51%, Rs.9.85 million and 3.14 years respectively. The project is proposed to operate as a sole-proprietorship. 6. BRIEF DESCRITION OF PROJECT & PRODUCT Calf fattening venture suggested in this study is based on raising 180 calves per year at the farm premises. The calves, preferably males, between 9-12 months of age, are fed on nutritionally balanced concentrate ration or Total Mixed Ration (TMR) as major source of energy and protein for a period of 120 days to get higher body weight gain. Live weight of these calves is around 100 kg. If these calves are fed properly on formulated fattening feed, an additional weight up to kg can be achieved. The daily weight gain varies between 700 to 850 grams depending on the quality of feed given to them. The subject business can be set-up at any appropriate location with easy availability of fodder and water. There is a year-round market, however, the demand increases before occasions like Eid-ul-Fitr and Eid-ul-Azha. On these occasions, well fed animals are sold at SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 4

6 a premium price higher than usual weight based price. The proposed legal structure of the business entity is sole proprietorship. 7. CRITICAL FACTORS Background knowledge and related experience of the entrepreneur in calf fattening farm operations. Application of good husbandry practices such as timely feeding, watering and vaccination to ensure animal s health and disease-free environment. Awareness about the supply and demand of calves in the market both for beef purpose and sacrificial purpose. Efficient marketing of the project and bulk supply to wholesalers. 8. INSTALLED AND OPERATIONAL CAPACITIES In this pre-feasibility study, 180 young calves of 9 to 12 months of age are raised per annum in 3 production batches; each having 60 calves, raised for 120 days on Feed Lot Fattening system. The mortality is assumed to be 3% per annum. Since, project will operate at 80% of its installed capacity in first year of operations, hence 144 calves in 3 batches; each having 48 calves would be raised. 9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT Metropolitan cities like Lahore, Multan, Bahawalpur, Faisalabad, Rawalpindi, Karachi, Hyderabad, Quetta, Ziarat, Peshawar, D.I. Khan etc. are major markets of meat. The rural and peri-urban areas around these and other major cities across the country with abundant water and availability of fodder make a better choice for such farming; provided access to livestock mandies and veterinary services is ensured. 10. POTENTIAL TARGET MARKET / CITIES Apart from Sialkot, Jhang, Rahim Yar Khan, Bahawalnagar, Bahawalpur, Sahiwal in the Punjab, livestock markets in peri-urban locations of all cities of other provinces such as Karachi, Hyderabad, Nawabshah, Larkana, Dadu, Qila saifullah, Panjgur, Pishin, Quetta, Bannu, Laki Marwat, Kohat, Peshawar are primary markets, in addition to specially arranged locations for larger cities during Eid festival in the urban markets. Normally animals are sold on Live Body Weight basis; the price of fattened calves varies according to animals health and market conditions. Following are some of the target clients for farmers; Livestock traders Butchers SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 5

7 Contractors Slaughter house owners 11. CALF FATTENING PROCESS Selection of animals based on breed and age: There is no beef breed developed in country. It is recommended that calves (preferably male) of local cattle breeds such as Sahiwal, Cholistani and Red Sindhi may be selected, however, calves of Tharparkar, Rojhan, Dhanni, Lohani, Bhagnari may also be considered for fattening purpose. For sacrificial purpose, the cross bred calves of Brahaman, Angus and Charolais etc. are also considered. The Sahiwal and Cholistani male calves are raised for good meat production and dressing percentage i.e. 55%. After fattening, the fat to muscle composition is also acceptable. The carcass weight is desirable by meat traders and exporters. Selection of animals with excellent body score and health conditions: initial live body weight should be around 100 kgs at 9-12 months of age. Little emaciated animals may also be accepted for fattening as research shows that these animals respond efficiently in terms of feed efficiency. Housing: A good housing leads to good management practices and ultimately optimum production. Generally, housing should be: Less expensive Well ventilated, comfortable and dry with hygienic environment Easy drainage and removal of dung urine and waste material Protective from extreme environmental conditions Maximum sun exposure: axis of length to be east to west Availability of feed and water for 24 hours Planed so that future expansion may be possible when required Feeding: Adequate weight gain through the use of balanced feed purchased from well reputed companies or formulated accordingly. Animal should be fed Total Mixed Ration % of live body weight. Additionally, urea molasses blocks and salt blocks can help in better daily weight gains. Green fodder is offered at 5% of body weight (wet basis) to every animal. Watering: Daily supply of clean drinking water in clean troughs i.e. 15 to 20 liters of water consumption/animal/day maintains the production capacity of the animal. Due to TMR and salt offered, animal tends to consume more water. SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 6

8 Disease management: De-worming for endoparasitic infestations is necessary in each batch shortly after arrival at farm. Timely vaccination against infectious diseases should be done as a prophylactic measure. At a well managed farm, mortality should not exceed 2-3 % per annum in the fattened animals. Following is a tentative vaccination schedule; Table 1: Tentative Vaccination Schedule Disease Vaccine Time for vaccination Dose/ Administration Foot & Mouth Disease (FMD) FMD (VRI) February/March and September/October 5 ml sub cut. Black Quarter BQ March/April 5 ml sub cut. Haemorrhagic Septicemia (HS) HS (VRI) May/June & November/December 5 ml / 300 kg body wt sub cut. Anthrax Anthrax August 1 ml sub cut. (VRI: Veterinary Research Institute, Lahore) Record keeping for each batch: The animals should be ear-tagged on arrival at the farm. The information to be recorded includes breed of animal, initial live weight of animal, age of animals, date of purchase etc. The records for regular weight gain, medication and de-worming etc. are also important. Culling: Selection of good productive animals and regular culling of uneconomical animal. Regular technical assistance from the livestock professionals and experts. 12. PROJECT COST SUMMARY A detailed financial model has been developed to analyze the commercial viability of under the Prime Minister s Youth Business Loan. Various cost and revenue related assumptions along with results of the analysis are outlined in this section Project Economics Following table shows Internal Rate of Return, Net Present Value and Payback Period; Table 2 - Project Economics Description Details Internal Rate of Return (IRR) 51% Payback Period (yrs) 3.14 SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 7

9 Net Present Value (NPV) 9,849, Project Financing Following table provides details of the equity required and variables related to bank loan; Table 3: Project Financing Description Details Total Equity (10%) Rs. 181,676 Bank Loan (90%) Rs. 1,635,083 Markup to the Borrower (%age/annum) 8% Tenure of the Loan (Years) 8 Grace Period (Year) Project Cost Following table provides details of investment requirement; Table 4: Project Investment Capital Investment Amount (Rs.) Machinery & equipment 172,500 Furniture & fixtures 15,000 Pre-operating costs 60,395 Total Capital Costs 247,895 Total Working Capital 1,568,864 Total Investment 1,816, Space Requirement Following table shows calculations for project space requirement; Table 5: Space Requirement Space Requirement Space (Sq.ft) Management building 150 Shed for animals 1,500 Store (feed, medicines etc.) 240 Attendants room 136 Open paddock 3,000 Dipping bath 50 Total Infrastructure 5,076 The shed would be acquired on monthly rent of approximately Rs. 20,000 per month. SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 8

10 12.6 Machinery, Equipment and Furniture Following table provides list of machinery, equipment and furniture required for the proposed calf fattening farm; Table 6: List of Machinery, Equipment & Furniture Farm supplies Rate per unit No. Amount (Rs.) Chopper 30, ,000 Water pump 30, ,000 Movable weighing scale (4 x6 platform with the capacity of 1500 Kg) 50, ,000 Feeding mangers 5, ,000 Tubs 1, ,500 Hand carts 5, ,000 Miscellaneous farm utensils 15, ,000 Furniture 15, ,000 Total Machinery Cost 187, Raw Material Requirements Following table shows raw material requirements in first year of production; Table 7: Cost of Material Description Unit Rate (Rs.) No. Total Rs. Cost of calves Per calf 14, ,088,000 Feed per calf Per calf 13, ,977,472 Vaccination/ Medication Per calf ,800 Total Cost 4,094,272 Note: Figures have been rounded off to the nearest decimal place 12.8 Human Resource Requirement Two semi skilled persons are required for performing routine farm operation and husbandry practices; Table 8: Human Resource Requirement Description No. Monthly Salary Annual salary (Rs.) (Rs.) Farm labour 2 10, ,000 Total 240,000 SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 9

11 One trained person can easily handle animals Revenue Generation The revenues generated in first year of production are given in following table; Table 9: Revenue Generation Description Unit Sale Price Rs./Unit First Year Production (Units) Revenue in Year 1 (Rs.) Fattened calves sold Per calf 35, * 5,055,050 Total Revenue 5,055,050 * total 144 calves divided in three batches, each having 48 in first year of production with mortality loss of 1 3%per annum Figures have been rounded off to the nearest decimal place Other Costs An essential cost to be borne by the farm is vaccination and medication cost which is Rs. 200 per calf. Electricity expense is assumed to be Rs. 250 per animal. The transportation cost is Rs. 60,000 per annum. 13. CONTACTS OF SUPPLIERS AND CONSULTANTS Table 10: Contacts of Suppliers and Consultants Feed Suppliers Consultants Hi-Tech Feeds (Pvt.) Ltd. 1-A, Shadman Chowk Jail Road, Lahore Phone : ICI Pakistan Cattle Feed 63-Mozang Road Lahore Ph: National Feeds Ltd. 171 Shadman II Lahore. Ph: Alhalal Wanda Al-Halal Livestock Concern Company Super High Way, Jahanian Ph: Dr. M. Sarwar Dean, Faculty of Animal Husbandry Uni. Of Agriculture, Faisalabad Ph: Prof. Dr. Muhammad Younas Faculty of Animal Husbandry, University of Agriculture, Faisalabad, Pakistan Ph: Dr. Shaukat Ali Bhatti Institute of Animal Nutrition and Feed Technology, Uni. Of Agriculture, Faisalabad. Ph: Prof. Dr. Abdul Raziq Kakar Lasbela University of Agriculture, Water and Marine Sciences, Uthal, Lasbela, Balochistan. SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 10

12 Big Feed (PVT) Ltd. 2-A, Ahmad Block, New Garden Town, Lahore Ph: Ph: Dr. Tanveer Ahmad Pir Mehr Ali Shah Arid Agriculture University, Rawalpindi. Ph: Anmol Vanda c/o Livestock and Dairy Development Department, Govt. of Punjab, 16-Cooper Road, Lahore Free Landline: , Livestock Mandies Livestock and Dairy Development Department, Govt. of Punjab, 16-Cooper Road, Lahore. Toll free: , The animals may be procured from local calf breeders and livestock mandies scheduled in different districts such as Pattoki, Okara, Bahawalnagar, Lodhran, Vehari, Khanewal, Arifwala, Pakpattan etc. as per scheduled by Livestock and Dairy Development Department, Govt. of The Punjab Lahore. Free Landline: , Mr. Muhammad Younus Qureshi Chairman Red Cow Meat Products of Pakistan 125/ 13-B-1, Township, Lahore Ph: Meat Contractors/ Processors Punjab Agriculture and Meat Company (PAMCO) 5/8 Shaheen Complex, Egerton Road Lahore Ph: SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 11

13 14. ANNEXURE Income Statement 14.1 PROFIT AND LOSS STATEMENT Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Revenue 5,055,050 6,066,060 7,357,042 8,375,051 9,212,556 10,133,812 11,147,193 12,261,913 13,488,104 14,836,914 Cost of Sales Feed & Vaccination Cost 2,006,271 2,311,392 2,672,817 2,903,223 3,048,456 3,200,843 3,360,921 3,528,886 3,705,312 3,890,614 Cost of Calves 2,088,000 2,405,550 2,781,608 3,021,401 3,172,471 3,331,095 3,497,650 3,672,532 3,856,159 4,048,967 Direct Labor 240, , , , , , , , , ,907 Transportation / Freight 60,000 63,000 66,150 69,458 72,930 76,577 80,406 84,426 88,647 93,080 Repair & Maintenance 14,896 17,063 19,753 21,464 22,538 23,664 24,848 26,090 27,394 28,764 Utilities 35,750 42,900 52,030 59,230 65,152 71,668 78,834 86,718 95, ,929 Total cost of sales 4,444,917 5,103,904 5,882,757 6,394,215 6,732,932 7,090,369 7,467,833 7,866,344 8,287,364 8,732,261 Gross Profit 610, ,156 1,474,285 1,980,836 2,479,625 3,043,443 3,679,360 4,395,568 5,200,740 6,104,654 General administration & selling expenses Building rental expense 240, , , , , , , , , ,747 Communications expense (phone, mobile) 6,000 6,300 6,615 6,946 7,293 7,658 8,041 8,443 8,865 9,308 Professional fees (legal, audit, consultants, etc.) Depreciation expense 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 Amortization of pre-operating costs 12,079 12,079 12,079 12,079 12, Subtotal 277, , , , , , , , , ,805 Operating Income 332, ,169 1,145,497 1,622,583 2,088,977 2,629,257 3,226,013 3,899,164 4,656,992 5,508,849 Other income (interest on cash) Earnings Before Interest & Taxes 332, ,169 1,145,497 1,622,583 2,088,977 2,629,257 3,226,013 3,899,164 4,656,992 5,508,849 Interest expense on long term debt (Project Loan) 135, , ,174 92,853 75,177 56,034 35,302 12, Interest expense on long term debt (Working Capital Loan) Subtotal 135, , ,174 92,853 75,177 56,034 35,302 12, Earnings Before Tax 196, ,924 1,036,323 1,529,730 2,013,799 2,573,222 3,190,711 3,886,314 4,656,992 5,508,849 Tax - 13,592 77, , , , , , ,597 1,175,154 NET PROFIT/(LOSS) AFTER TAX 196, , ,374 1,376,284 1,763,540 2,207,417 2,670,533 3,192,236 3,737,395 4,333,695 Balance brought forward 196, ,144 1,677,518 3,053,802 4,817,342 7,024,759 9,695,293 12,887,528 16,624,923 Total profit available for appropriation 196, ,144 1,677,518 3,053,802 4,817,342 7,024,759 9,695,293 12,887,528 16,624,923 20,958,618 Dividend Balance carried forward 196, ,144 1,677,518 3,053,802 4,817,342 7,024,759 9,695,293 12,887,528 16,624,923 20,958,618 SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 12

14 14.2 BALANCE SHEET Statement Summaries Balance Sheet SMEDA Rs. in actuals Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Assets Current assets Cash & Bank 179, , ,871 1,050,301 2,189,075 3,763,727 5,841,380 8,488,063 11,777,210 16,096,142 25,637,819 Equipment spare part inventory 4,965 5,972 7,259 8,283 9,131 10,067 11,099 12,237 13,491 14,874 - Raw material inventory 1,364,757 1,650,930 2,004,501 2,286,164 2,520,525 2,778,864 3,063,714 3,377,706 3,723,912 4,105,632 - Total Current Assets 1,568,864 2,033,468 2,458,910 3,371,454 4,748,109 6,584,973 8,951,739 11,917,108 15,557,624 20,263,960 25,637,819 Fixed assets Land Building/Infrastructure Machinery & equipment 172, , , , ,500 86,250 69,000 51,750 34,500 17,250 - Furniture & fixtures 15,000 13,500 12,000 10,500 9,000 7,500 6,000 4,500 3,000 1,500 - Total Fixed Assets 187, , , , ,500 93,750 75,000 56,250 37,500 18,750 - Intangible assets Pre-operation costs 60,395 48,316 36,237 24,158 12, Total Intangible Assets 60,395 48,316 36,237 24,158 12, TOTAL ASSETS 1,816,759 2,250,534 2,645,147 3,526,862 4,872,688 6,678,723 9,026,739 11,973,358 15,595,124 20,282,710 25,637,819 Liabilities & Shareholders' Equity Current liabilities Accounts payable - 236, , , , , , , , , ,466 Total Current Liabilities - 236, , , , , , , , , ,466 Other liabilities Long term debt 1,635,083 1,635,083 1,453,511 1,256,868 1,043, , , , Total Long Term Liabilities 1,635,083 1,635,083 1,467,103 1,348,409 1,288,891 1,308,511 1,424,533 1,674,196 2,075,307 2,994,904 4,170,059 Shareholders' equity Paid-up capital 181, , , , , , , , , , ,676 Retained earnings - 196, ,144 1,677,518 3,053,802 4,817,342 7,024,759 9,695,293 12,887,528 16,624,923 20,958,618 Total Equity 181, , ,820 1,859,194 3,235,478 4,999,018 7,206,435 9,876,969 13,069,204 16,806,599 21,140,294 TOTAL CAPITAL AND LIABILITIES 1,816,759 2,250,534 2,645,147 3,526,862 4,872,688 6,678,723 9,026,739 11,973,358 15,595,124 20,282,710 25,637,819 Note: Total assets value will differ from project cost due to first installment of leases paid at the start of year 0 SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 13

15 14.3 CASH FLOW STATEMENT Statement Summaries Cash Flow Statement SMEDA Rs. in actuals Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Operating activities Net profit - 196, , ,374 1,376,284 1,763,540 2,207,417 2,670,533 3,192,236 3,737,395 4,333,695 Add: depreciation expense - 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 amortization expense - 12,079 12,079 12,079 12,079 12, Deferred income tax ,592 77, , , , , , ,597 1,175,154 Accounts receivable Finished good inventory Equipment inventory (4,965) (1,007) (1,287) (1,023) (849) (936) (1,032) (1,138) (1,254) (1,383) 14,874 Raw material inventory (1,364,757) (286,173) (353,571) (281,663) (234,361) (258,339) (284,850) (313,993) (346,206) (381,720) 4,105,632 Accounts payable - 236,962 40,261 42,035 29,060 22,876 24,576 26,422 28,420 30,594 (153,741) Other liabilities Cash provided by operations (1,389,787) 175, , ,072 1,351,738 1,805,292 2,327,436 2,917,198 3,582,113 4,318,933 9,541,676 Financing activities Change in long term debt 1,635,083 - (181,572) (196,643) (212,964) (230,640) (249,783) (270,515) (292,967) - - Issuance of shares 181, Purchase of (treasury) shares Cash provided by / (used for) financing act 1,816,759 - (181,572) (196,643) (212,964) (230,640) (249,783) (270,515) (292,967) - - Investing activities Capital expenditure (247,895) Acquisitions Cash (used for) / provided by investing acti (247,895) NET CASH 179, ,418 68, ,430 1,138,774 1,574,652 2,077,653 2,646,684 3,289,146 4,318,933 9,541,676 Cash balance brought forward 179, , ,871 1,050,301 2,189,075 3,763,727 5,841,380 8,488,063 11,777,210 16,096,142 Cash available for appropriation 179, , ,871 1,050,301 2,189,075 3,763,727 5,841,380 8,488,063 11,777,210 16,096,142 25,637,819 Dividend Cash carried forward 179, , ,871 1,050,301 2,189,075 3,763,727 5,841,380 8,488,063 11,777,210 16,096,142 25,637,819 SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 14

16 Technology 14.4 USEFUL PROJECT MANAGEMENT TIPS List of Machinery & Equipment (As per Section 12.5) Animal Selection: Selection of disease free animals with good breed characteristics, body conditions and health. Feed, Vaccination and Medication: Should be procured from reputed and reliable sources. Energy Requirement: Should not be overestimated or installed in excess and alternate source of energy for critical operations be arranged in advance Machinery Suppliers: Should be asked for after sales services under the contract with the machinery suppliers Quality Assurance & Standards: Whatever means required for animal production quality standards need to be defined on the ear tags and a system of record keeping to check them to improve credibility Marketing Product Development: Expert's help may be engaged for marketing of each batch of animal Ads & P.O.S. Promotion: Business promotion and dissemination through banners and launch events is highly recommended. Product broachers from good quality service providers Sales & Distribution Network: Expert's advise and distribution agreements are required with. 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. Human Resources List of Human Resource (As per Section 12.7) Adequacy & Competencies: Skilled and experienced staff should be considered an investment even to the extent of offering share in business profit. Performance Based Remuneration: Attempt to manage human resource cost should be focused through performance measurement and performance based compensation. SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 15

17 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 Useful Links Prime Minister s Office, Government of Pakistan, Ministry of Industries & Production, Small & Medium Enterprises Development Authority, National Bank of Pakistan (NBP), First Women Bank Limited (FWBL), Ministry of National Food Security & Research, Government of Punjab, Government of Sindh, Government of Khyber Pakhtunkhwa, Government of Balochistan, Government of Gilgit Baltistan, Government of Azad Jammu & Kashmir, Trade Development Authority of Pakistan (TDAP), Securities & Exchange Commission of Pakistan (SECP), Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Punjab Board of Investment & Trade (PBIT), 23-Aikman Road, GOR-I, Lahore Tel , Sindh Board of Investment (SBI), 1st Floor, Tower B, Finance & Trade Center, Shahra-e- Faisal, Karachi, Tel , All Pakistan Meat Exporters and Processors Association, Lahore, Punjab Agriculture and Meat Company (PAMCO), Lahore, Pakistan Agricultural Research Council (PARC), Islamabad, Tel National Agricultural Research Centre (NARC), Islamabad, Tel , National Veterinary Laboratory, NARC, Islamabad, Tel Balochistan Agricultural Research Centre (BARC), Quetta, Tel: , Southern-zone Agricultural Research Centre (SARC), Karachi, Tel: , , Arid Zone Research Institute (AZRI), Bahawalpur, Tel: , Punjab Livestock & Dairy Development Board (PLDDB), 11- Shami Road, Lahore Cantt. Tel , University of Agriculture, Faisalabad, Lasbela University of Agriculture, Water & Marine Sciences, Lasbela, SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 16

18 Sindh Agriculture University, Tondojam, Gomal College of Veterinary Sciences, Dera Ismail Khan, KPK Agricultural University, Peshawar, Pir Mehr Ali Shah Arid Agricultural University, Rawalpindi, University College of Veterinary & Animal Sciences, Islamia University Bahawalpur (IUB), University of Veterinary & Animal Sciences (UVAS), Out Fall Road, Lahore, Bahauddin Zakariya University (BZU), Multan, Animal Husbandry In-Service Training Institute (AHITI), Peshawar, Tel , Veterinary Research Institute (VRI), Ghazi Road, Lahore Cantt., Tel Agribusiness Support Fund (ASF), Lahore, Directorate of Livestock Farms, L&DD, Lahore, Tel: Livestock Experiment Station (LES), Dera Chahl Lahore, L&DD, Punjab, Tel: , Directorate of Livestock Training Centre (LSTC), Bahadurnagar, Okara, Tel: Livestock & Fisheries Department, Government of Sindh, Agriculture & Livestock Department, Government of KPK, Livestock & Dairy Development, Government of Balochistan, SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 17

19 15. KEY ASSUMPTIONS Table 11: Production and Revenue Assumptions Annual installed capacity (Calves) 180 Capacity utilization (%) 80 Maximum capacity (%) 100 Capacity utilization growth per year (%) 10 Annual production (calves) in first year 144 Number of calves fattened per production cycle 48 Number of production cycles per year 3 Fattening days 120 Table 12: Expense Assumptions 3 % per annum 1 Vaccination/ Medication cost (Rs. per calf) 200 Open Space per animal (Sq. ft) 50 Total Mixed Ration (TMR) requirement (% of live body weight) Price of TMR (Rs. per kg) 22 Green Fodder (Rs. per Kg) SMEDA Services / Information related to PM s Youth Business Loan are FREE OF COST - 18