PRE-FEASIBILITY STUDY ON GROWTH PROMOTING FOLIAR SPRAY (GPFS)

Transcription

1 PRE-FEASIBILITY STUDY ON GROWTH PROMOTING FOLIAR SPRAY (GPFS) Pakistan Council of Scientific and Industrial Research. PCSIR. HEAD OFFICE Constitution Avenue, Sector G-5/2, Islamabad. Pharmaceutical Research Centre Pakistan Council for Scientific and Industrial Research, Government of Pakistan Note: All Services / information related to PM s Youth Business Loan are Free of Cost April, 2014

2 1. DISCLAIMER The purpose and scope of this information is to introduce the subject matter and provide a general idea and information on the said area. All the material include in this document is based on data/information gathered from various sources and is based on certain assumptions. Although, due care and diligence has 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 from the presented information. PCSIR does not assume any liability for any financial or other loss resulting from this information in consequence of undertaking this activity. The prospective user of this memorandum is encouraged to carry out his/her own sources and gather any information he/she considers necessary for making an informed decision. 2. PURPOSE OF THE DOCUMENT The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs to facilitate investment and provide an overview about the product/technology business. The project pre-feasibility may form the basis of an important investment decision and in order to serve this objective, the document covers various aspects of product/technology business concept development, start up, and production, marketing finance and business management. 3. INTRODUCTION TO PCSIR LABORATORIES COMPLEX, KARACHI Karachi Laboratories Complex is functioning under the PCSIR Act of 1973 established in 953 as an autonomous body registered under the Society Act 1860 was reconstituted by an act of parliament in 1973, allowing it to play direct role in national development, having greater emphasis on providing R&D solutions to industrial problems, helping industry to manage and reduce waste and use indigenous material/processes/ technology, to increase their internal rate of return to be more competitive. At present Karachi Laboratories Complex possess a multifunctional R&D facility, comprising of following Research Centres: 1. Applied Chemistry Research Centre 2. Pharmaceutical Research Centre 3. Food & Marine Resources Research Centre 4. Centre for Environmental Studies 5. Applied Physics, Computer & Instrumentation Centre 6. Centre for development of Laboratory Equipment 7. Engineering Services Centre 4. EXECUTIVE SUMMARY The proposed GPFS process involves a total investment of Rs.5.5 million approx. The project will generate direct employment opportunity for five (05) persons. Higher return on investment and a steady growth of business in expected with the industrialist having some prior experience or education in the related field of business. This prefeasibility encompasses essential information regarding various aspects of starting a process in Pakistan.

3 5. INTRODUCTION TO SCHEME Prime Minister s Youth Business Loan, for young entrepreneurs, with an allocated budget of Rs.5.0 billion for the year , is designed to provide subsidized 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 Limited (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 Area (FATA). 6. BRIEF DESCRIPTION OF PROJECT & PRODUCT A growth promoting foliar spray is specially designed for growth promotion of cotton, soybean and peanuts. It contains adequate quantities of essential micronutrients besides nitrogen. Cotton is a major cash crop of Pakistan and it is grown on vast areas approximately 2,498 million hector. The soil of Pakistan has become deficient in micronutrients because of continuous agricultural practices. Nitrogen and phosphate fertilizers are usually added to the field, while micronutrient replenishment has seldom done. The yield of cotton crops in our country is low as compared to other countries. This foliar spray contains micronutrients in the form of chelates and therefore, are readily assimilated by the plants. It is available in the form of foliar spray which ensures its complete absorption through foliage. It contains following ingredients: Nitrogen 10% Iron 0.1% Zinc 0.1% Boron 0.02% Magnesium 0.01% Manganese 0.005% Copper 0.001% Molybdenum % Chelating agent It is our patented product. 7. CRITICAL FACTORS Lack of marketing and advertisement of the products in public and private sectors. Lack of awareness about intellectual property rights for the protection of process and products. Higher return on investment and a steady growth of business is closely associated with regular training and capacity building of the entrepreneur and employee. Higher prices make the quality products less reachable as compare to cheap and low grade products.

4 8. INSTALLED & OPERATIONAL CAPACITIES See the number 12 (PROJECT COST SUMMARY) 9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT Agricultural areas of Sindh, Punjab and production unit can be established in the suburbs/periphery areas of these provinces. 10. POTENTIAL TARGET MARKET Agrochemical Sector

5 11. PRODUCTION PROCESS FLOW Salts Reaction Vessel (Complex Fertilizer) Finished Product (GPFS)

6 12. PROJECT COST SUMMARY A detailed financial breakup is given to analyse the commercial viability of the products under the Prime Minister s Youth Business Loan scheme the project. Various cost and revenue related assumptions along with results of the analysis are outlined in this section. Name of Product / Activity: Growth Promoting Foliar Spray (GPFS) Capacity: 500 L / Batch Production Time per Batch: One Day Packaging Size: 12.1 Project Economics 500 ml bottles Production capacity 125,000 litres (250,000 bottles) per year. The following table shows Internal Rate of Return, Payback Period, Future Value and Net Present Value Table 1: Project Economics Description Details Internal Rate of Return (IRR) 80 % per year Payback Period (yrs) -- Net Present Value (NPV) Project Financing Following table provides details of the equity required and variables related to bank loan: Table 2: Project Financing Description Details Total Equity (10%) Rs.198,660/- Bank Loan (90%) Rs.17,87,940/- Mark-up to the Borrower (% age / annum) 8 % Tenure of the Loan (Year) 8 % Grace Period (Year) Project Cost Following requirements have been identified for the operation of the proposed business. A rental premise has been recommended for this project.

7 Table 3: Project Cost Capital Investment Amount (Rs.) Land area size of building 120 sq. yds On rent Rs.25,000/month Cost of furniture & fixture 115,000 Office equipment 100,000 Equipment & machinery 695,000 Bottle filling machine manual 100,000 Technology charges 400,000 Total Capital Cost: 14,35,000 Initial working capital (01 month) 551,600 Total Project Cost: 19,86,600 (1.986 million) 12.4 Space Requirement The area has been calculated on the basis of space requirement for production, management and storage. However, the units operating in the industry do not follow any set pattern. Following table shows calculations for project space requirement. Table 4: Space Requirement Space Requirement Sq. Yards Management Building 40 Processing Area 60 Open Area 20 Total Area: 120 Premises will be obtained on per month Permanent Equipments: Following table provides list of machinery and equipments required for process. Table 5: Permanent Equipments Equipment Description Quantity Cost Rs./Unit Total Rs. Reaction vessel 500 L , ,000 Dissolution tank 100 L 05 5,000 25,000 Top loading balance 01 20,000 20,000 Water bath 01 20,000 20,000 Storage drums 200 L 02 5,000 10,000 Glasswares - 50,000 50,000 Miscellaneous - 100,000 50,000 Total: 695,000

8 Technology (TBIC) i) Training on pilot plant production ii) Supervisory services & performance guarantee 12.6 Furniture & Fixture , , , ,000 Grand Total: 4,00,000 Following furniture and fixture will be required for the unit. Table 6: Furniture & Fixture Items Quantity Unit Price Total Office / Visitor Chairs 03 5,000 15,000 Office Tables 02 5,000 10,000 Stools 05 1,000 5,000 File cabinets 02 2,500 5,000 Airconditioners (Split) 01 40,000 40,000 Water Dispenser 01 15,000 15,000 Wooden racks 04 2,500 10,000 Accessories ,000 Total: 115, Office Equipments Office equipment comprises of necessary IT equipment items. Table 7: Office Equipments Details Quantity Cost Amount Computer/ Laptop 02 40,000 80,000 Printer/ Scanner 01 8,000 8,000 Fax/ Photocopier 01 10,000 10,000 Telephone 01 2,000 2,000 Total: 100, Raw Material Requirements The raw materials are easily available in local market. Table 8: Cost of Materials Unit Rate (Rs.) Amount for 500 L Chemicals 10,000 10,000 Electric / Gas/ Water 1,500 1,500 Cost per Unit Total: 11,500

9 12.9 Human Resource Requirement Following table provides details of human resource required fund this venture: Table 9: Human Resource Requirement Description No. of Employees Charges/ Batch/day (Rs.) Processing Production 01 1,000 Supervisor (M.Sc.) Chemist (B.Sc.) Electrician (Diploma holder) Helpers Total cost/batch Cost/month (20 batches) 2,800 56,000 Salaries of all employees are estimated to increase at 10% annually Revenue Generation Table 10: Revenue Generation Product Growth Promoting Foliar Spray * As per demand. Sales Price (Rs./unit) Rs.100/500 ml bottle 1 st Year Production Quantity 250,000 bottles* (250 days) 1 st year Sales Revenue (Rs.) 25,000,000 (approx million)