Pre-Feasibility Study Prime Ministers Small Business Loan Scheme

(Stone Crushing Plant)

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

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Table of Contents
1. DISCLAIMER .......................................................................................................................................... 2 2. PURPOSE OF THE DOCUMENT ......................................................................................................... 3 3. INTRODUCTION TO SMEDA .............................................................................................................. 3 4. INTRODUCTION TO SCHEME ........................................................................................................... 4 5. EXECUTIVE SUMMARY ...................................................................................................................... 4 6. BRIEF DESCRIPTION OF PROJECT &PRODUCT ......................................................................... 4 7. CRITICAL FACTORS ............................................................................................................................ 5 8. INSTALLED & OPERATIONAL CAPACITY .................................................................................... 5 9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT/SUITABLE LOCATION .......................... 5 10. 11. 12. 12.1 12.3 12.4 12.5 12.6 12.7 12.8 12.9 13. POTENTIAL MARKETS/CUSTOMERS ....................................................................................... 6 PRODUCTION PROCESS FLOW .................................................................................................. 6 PROJECT COST SUMMARY ......................................................................................................... 6 PROJECT ECONOMICS........................................................................................................ 7 PROJECT COST................................................................................................................. 7 SPACE REQUIREMENT ....................................................................................................... 7 MACHINERY AND EQUIPMENT ........................................................................................... 8 RAW MATERIAL REQUIREMENTS....................................................................................... 9 HUMAN RESOURCE REQUIREMENT ................................................................................... 9 REVENUE GENERATION ....................................................................................................10 OTHER COSTS ...................................................................................................................10 CONTACT-SUPPLIERS AND EXPERTS .................................................................................... 11

14. ANNEXURES .......................................................................................................................12 14.1 INCOME STATEMENT .........................................................................................................12 14.2 BALANCE SHEET................................................................................................................13 14.3 CASH FLOW STATEMENT ..................................................................................................14 14.4 USEFUL PROJECT MANAGEMENT TIPS .................................................................15 14.5 USEFUL LINKS ...............................................................................................................16 15. KEY ASSUMPTIONS ..................................................................................................................... 18

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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

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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 prefeasibility 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 Stone Crushing Plant 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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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 envisages the setting up a Plant for crushing stone. The stone crushing industry is an important industrial sector in the country engaged in producing crushed stone used as raw material for various construction activities such as construction of houses, cemented block units, tough tiles, roads, bridges, buildings and canals. For building and construction purposes, generally Hard Lime Stone is used. In addition, it is also used for decorative construction for its beauty and shaded colors. The Stone Crushing Plant could be seen in the vicinity of almost all major cities and towns of Pakistan. The total proposed project cost is Rs 2.2 million with total capital cost of Rs 1.78 million and 0.42 million as a working capital. Production capacity of the plant would be 600 Cubic ft per day with single shift of 8 hrs at 100%. A total of 05 employees will be working directly in the project. Given the cost assumption IRR is 34% with three (3) years payback period. The most critical considerations or factors for success of the project are:

Adequate supply of electricity. Establishment of the project near the reserves in order to reduce transportation cost.

6. BRIEF DESCRIPTION OF PROJECT &PRODUCT Technology: The proposed project of Crushing Plant consist of Jaw Crusher, Vibrating Screen to crush lime stone in different sizes of 3/4,1/2 and 3/8 inches.

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Location: The project will be located near lime stone deposit mostly available in Khyber Pakhtunkhwa, Texila and Margalla range. Product: This crush stone produced is used as a raw material in different construction activities like construction of hoses, Roads, Cement Block Units etc. Initially, the plant will be established at small scale and will be upgraded once the business turns sustainable. Target Market: The crushed limestone is used in construction of houses, roads and cement block units etc. The product produced will be supplied to contractors and builders all over Pakistan. Employment: The project will provide direct employment to 06 people. Profitability: Financial analyses show that the project will be generating income from the first year of its operation.

7. CRITICAL FACTORS The successful operation and sustainability of the proposed plant is dependent on many factors, are summarized as follows. Establishment of the project near the reserves in order to reduce transportation cost. Receiving raw material in time and timely supply of order. Careful pricing and margins to builders, suppliers and retail customers. Adequate supply of electricity.

8. INSTALLED & OPERATIONAL CAPACITY Total installed capacity of the plant will be up to 600 cu.ft per day in single shift of 8 hours. Initially, the plant will operate on 70% of capacity and crushing 420 cu. ft of lime stone per day in 8 hours shift. 9. GEOGRAPHICAL LOCATION Small scale stone crushing plants are being operated in most of the area across the country where lime stone resaves exist .The proposed location for setting up a small scale stone crushing plant largely depends on the availability of raw limestone and its transportation to the factory at low cost; however, for proposed plant it is recommended that the plant should be established in peripheries of Peshawar, Mansehra, Abbottabad, Mardan,
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POTENTIAL

FOR

INVESTMENT/SUITABLE

Pre-Feasibility Study

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Nowshehra, Kohat, Karak and D. I. Khan in Khyber Pakhtunkhwa along with Margalla and Taxila region in Punjab. While factors like availability of manpower, utilities and easy access to the target markets should also be examined carefully. 10. POTENTIAL MARKETS/CUSTOMERS Crush stone can be used in every type of construction and usage of crush stones has become double over the last 4 to 5 years. The growth in construction of housing, commercial buildings, block making units and other construction related projects clearly indicates that demand for crush stone is increasing day by day. Some of the target market/customers for stone crushing are: Builders and constructors Retailers/Traders dealing in construction materials Concrete prefabricated products/Blocks making units Tough tiles making units

11. PRODUCTION PROCESS FLOW

Stone Suppliers, Contractors/ Dealers

Storage of Raw Stones

Feeding in Crusher (Hammer Crusher)

Dumping & Storage

Delivery Conveyers

Vibrating Screen (Chaan)

12. PROJECT COST SUMMARY A detailed financial model has been developed to analyze the commercial viability of limestone crushing plant under the Prime Ministers Small Business Loan Scheme. Various cost and revenue related assumptions along with results of the analysis are outlined in this section. The projected Income Statement, Cash Flow Statement and Balance Sheet are attached as appendix
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12.1

Project Economics

All the figures in this financial model have been calculated for production of 420 cubic feet of limestone per day. The following table shows internal rates of return and payback period.
Table 1 - Project Economics Description Internal Rate of Return (IRR) Payback Period (yrs) Net Present Value (NPV) Details 34% 2.5 years 4,012,860

Returns on the scheme and its profitability are highly dependent on the availability of cheap raw material i.e. limestone which is possible by establishing the plant near to the source of limestone. Increase in transportation cost will reduce profit margins. Following table provides details of the equity required 12.2 Project Financing Description Total Equity (10%) Bank Loan (90 %.) Markup to the Borrower (%age/annum) Tenure of the Loan (Years) Details Rs. 200,000 Rs. 2,000,000 8% 7

12.3

Project Cost

Following are the requirements identified for the operations of the proposed business.
Table 1: Capital Investment for the Project

Capital Investment Land (lease amount) Building Machinery and equipments Furniture & fixtures Total Capital Cost Initial Working Capital Total Project Cost 12.4 Space Requirement

Amount (Rs.) 50,000 180,000 1,550,000 50,000 1,780,000 420,000 2,200,000

Total land requirement has been calculated on the basis of space required for machinery installation, dumping of raw stone and crushed stones. It is
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pertinent to mention here that the Plants operating in the industry do not follow any set pattern. Total land requirement for the proposed unit is up to 1 kanal. Total investment in leasing the required land is Rs 50,000 per year.
Table 2: Space Requirement

Space Requirement (in ft.) Office Store Open Space Total Area 12.5 Machinery and Equipment

Rs/Sq. ft 1,000 1,000

Sq. ft 120 60 3,440 3,620

Amount (Rs.) 120,000 60,000 180,000

Following table provides list of machinery and equipment required for a small scale limestone crushing unit to crush 420 cu. ft of stones per day.

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Table 3: List of Machinery and Equipments Replacement Capacity Description Year Units/Hr

Quantity

Cost Rs/unit

Total Rs.

Jaw Crusher Feed Conveyer Vibrating Screen Delivery Conveyers (4) Total

15 15 15 15

5 tons 40 ft 20 ft

1 1 1 4

700,000 250,000 300,000 75,000

700,000 250,000 300,000 300,000 1,550,000

Jaw crusher is main machine used in stone crushing plant with the maximum capacity of processing up to 52.5 cu. ft per hour. The Jaw Crusher will be of 24 inches diameter with 30 hp motor and suitable for feeding stones upto 7 inches. Vibrating Screen (L8 X 3W), with 10 hp motor, sieves four different categories of stone. One main conveyer of 40 feet with 5 hp motor will be required for feeding stones into jaw crusher and 4 conveyers of 20 ft each with 3 hp motor will be required for carrying the crush stones to the dumping/storage area. 12.6 Raw Material Requirements Limestone is the raw material for stone crushing plant and is to be obtained directly from reserves (Rock Stone Supplier). Following table shows raw material requirement to crush 420 cu. ft of stone per day in single shift of 8hrs and 131040cu. ft in 312 days per year:
Table 3: Cost of Material

Raw limestone Cost per Unit/Cu. ft

Unit Cu.ft

Rate/Cu. ft 5

Qty/Year 131,040

Total Cost 655,200 5

12.7 Human Resource Requirement

Table 4: Human Resource Requirement

Description

No. of Employees

Salary per month (Rs) 30,000 20,000 10,000 60,000

Machine operators Laborers Guard Total Staff

2 2 1 5

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12.8 Revenue Generation Sales Price Unit (Rs./Cu. ft) No. No. No. No. 25 26 26 12 First Year Production (Cu. ft) 32,760 32,760 26,208 39,312 First Year Sales Revenue (Rs) 819,000 851,760 851,760 393,120 2,915,640

Product inch crush inch crush 3/8 crush Powder (Khaka) Total Sales Revenue 12.9 Other Costs

Utilities: Major cost of the stone crushing unit is electricity cost. Total horse power of installed machines comes to 57 hp. Keeping power factor at 1.0 it is estimated that per month utility bill would be Rs 100,000. .

Repair & Maintenance: Repair and maintenance of the machinery is assumed to be 2% of total machinery cost Rs. 31000 per year. The monthly repair and maintenance cost would be Rs 2584/-for the proposed plant

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13.

CONTACT-SUPPLIERS AND EXPERTS 1. Muhammad Hanif (Manufacturer) SYS Engineering Near Marwat Petrol Pump, Nasir Pur GT Road Peshawar 0345-9128833 2. Fahim Gul Building Contractor and Stone Supplier Asad Anwar Colony Peshawar City 0333- 9194933 3. Muhammad Tariq (Supplier of machinery/Manufacturer) Sadiq Shahid Brothers Gawal Mandi Rawalpindi 051-5530453 0333-5112800

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14. ANNEXURES 14.1 Income Statement

YEAR- 1 SALES 1/2 inch crush 3/4 inch crush 3/8 inch crush Stone Powder (Khaka) 242970 COST OF SALES 1/2 inch crush 3/4 inch crush 3/8 inch crush Stone Powder (Khaka) COST OF GOODS SOLD Electricity Expanse Payroll Expanse (All Staff) Deprecition Expanse Machine Maintenance Expanse Rent Expanse 31,122 31,122 19,656 19,656 101,556 1,200,000 696,000 80,000 35,600 50,000 32,367 32,367 20,442 20,442 105,618 1,320,000 765,600 76,000 34,000 52,500 33,662 33,662 21,260 21,260 109,843 1,452,000 842,160 72,200 32,480 55,125 35,008 35,008 22,110 22,110 114,237 1,597,200 926,376 68,590 31,036 57,881 36,408 36,408 22,995 22,995 118,806 1,756,920 1,019,014 65,161 29,664 60,775 37,865 37,865 23,915 23,915 123,558 1,932,612 1,120,915 61,902 28,361 63,814 39,379 39,379 24,871 24,871 128,501 2,125,873 1,233,006 58,807 27,123 67,005 40,954 40,954 25,866 25,866 133,641 2,338,461 1,356,307 55,867 25,947 70,355 42,593 42,593 26,901 26,901 138,986 2,572,307 1,491,938 53,074 24,829 73,873 44,296 44,296 27,977 27,977 144,546 2,829,537 1,641,132 50,420 23,768 77,566 819,000 851,760 851,760 393,120 2,915,640 900,900 936,936 936,936 432,432 3,207,204 990,990 1,030,630 1,030,630 475,675 3,527,924 1,090,089 1,133,693 1,133,693 523,243 3,880,717 1,199,098 1,247,062 1,247,062 575,567 4,268,789 1,319,008 1,371,768 1,371,768 633,124 4,695,667 1,450,908 1,508,945 1,508,945 696,436 5,165,234 1,595,999 1,659,839 1,659,839 766,080 5,681,758 1,755,599 1,825,823 1,825,823 842,688 6,249,933 1,931,159 2,008,406 2,008,406 926,956 6,874,927 YEAR- 2 YEAR- 3 YEAR- 4 YEAR- 5 YEAR- 6 YEAR- 7 YEAR- 8 YEAR- 9 YEAR- 10

Projected Income Statement

Amortization of Preliminary Expanses TOTAL OPERATING EXPANSES EARNINGS BEFORE INTEREST & TAXES

10,000 2,071,600 742,484

10,000 2,258,100 843,486

10,000 2,463,965 954,116

10,000 2,691,083 1,075,397

10,000 2,941,534 1,208,449

3,207,605 1,364,504

3,511,815 1,524,919

3,846,936 1,701,180

4,216,020 1,894,927

4,622,423 2,107,958

FINANCIAL EXPENSES Financial Charges on Long term loan TOTAL FINANCIAL EXPENSES PROFIT BEFORE TAX INCOME TAX PROFIT AFTER TAX Retained Earnings at the beginning of year Dividend Retained Earnings at the end of year

158,400 158,400 584,084 58,408 525,676 -

140,648 140,648 702,838 70,284 632,554 525,676 262,838

121,475 121,475 832,641 47,396 785,245 895,392 316,277 1,364,360

100,769 100,769 974,628 68,694 905,934 1,364,360 392,622 1,877,671

78,406 78,406 1,130,042 92,006 1,038,036 1,877,671 452,967 2,462,740

54,255 54,255 1,310,250 119,037 1,191,212 2,462,740 519,018 3,134,935

28,171 28,171 1,496,748 147,012 1,349,736 3,134,935 595,606 3,889,064

1,701,180 187,736 1,513,444 3,889,064 674,868 4,727,641

1,894,927 226,485 1,668,441 4,727,641 756,722 5,639,360

2,107,958 269,092 1,838,866 5,639,360 834,221 6,644,005

525,676

895,392

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14.2
PROJECTIONS

Balance Sheet

Projected Balance Sheet YEAR-0 ASSETS Current Assets Cash & Bank Balance Raw materials stock W.I.P Finished goods stock 260,000 110,000 336,638 10,016 333 2,279 548,235 10,417 346 2,370 833,675 10,833 360 2,464 1,136,463 11,267 374 2,563 1,482,268 11,717 389 2,666 2,226,681 12,186 405 2,772 2,316,019 12,674 421 2,883 3,187,208 13,180 438 2,998 4,124,434 13,708 455 3,118 5,147,188 14,256 474 3,243 YEAR - 1 YEAR - 2 YEAR - 3 YEAR - 4 YEAR - 5 YEAR - 6 YEAR - 7 YEAR - 8 YEAR - 9 YEAR - 10

Receivables

20,248 390,248

242,970 592,235

267,267 828,635

293,994 1,141,326

323,393 1,474,060

355,732 1,852,773

391,306 2,633,350

430,436 2,762,433

473,480 3,677,305

520,828 4,662,543

572,911 5,738,072

TOTAL CURRENT ASSETS Fixed Assets At Cost less: Acc. Depreciation Intangible Assets Upfront Insurance 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 1,780,000 1,700,000 1,624,000 1,551,800 1,483,210 1,418,050 1,356,147 1,297,340 1,241,473 1,188,399 1,137,979

Pre-operational Expenses Worth TOTAL ASSETS LIABILITIES AND EQUITY Current Liabilities Current maturity of long term loan Accounts Payable TOTAL CURRENT LIABILITIES Non current Liabilities Long term Loan EQUITY Paid up Capital Retained Earnings Total Equity TOTAL LIABILITIES & EQUITY

50,000 2,220,248

40,000 2,512,235

30,000 2,642,635

20,000 2,853,126

10,000 3,087,270 3,370,822 4,069,497 4,119,773 4,958,777 5,870,942 6,876,051

239,656 8,463 248,119

258,828 8,802 267,630

279,534 9,154 288,688

301,897 9,520 311,417

326,049 9,901 335,949

352,133 10,297 362,429

10,708 10,708

11,137 11,137

11,582 11,582

12,045 12,045

1,980,000

1,758,097

1,518,441

1,259,613

980,079

678,182

352,133

220,000 220,000 2,200,000

220,000 525,676 745,676 2,512,235

220,000 895,392 1,115,392 2,642,635

220,000 1,364,360 1,584,360 2,853,126

220,000 1,877,671 2,097,671 3,087,270

220,000 2,462,740 2,682,740 3,370,822

220,000 3,134,935 3,354,935 4,069,497

220,000 3,889,064 4,109,064 4,119,773

220,000 4,727,641 4,947,641 4,958,777

220,000 5,639,360 5,859,360 5,870,942

220,000 6,644,005 6,864,005 6,876,051

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14.3

Cash Flow Statement

Projected Cash Flow Statement YEAR- 0 OPERATING ACTIVITIES Net Profit Add: Depreciation YEAR- 1 584,084 YEAR- 2 702,838 YEAR- 3 832,641 YEAR- 4 974,628 YEAR- 5 1,130,042 YEAR- 6 1,310,250 YEAR- 7 1,496,748 YEAR- 8 1,701,180 YEAR- 9 1,894,927 YEAR- 10 2,107,958

80,000

76,000

72,200

68,590

65,161

61,902

58,807

55,867

53,074

50,420

Amortization (Pre-operational Expenses)

(50,000)

10,000

10,000

10,000

10,000

10,000

Net profit before working capital changes Working Capital changes Raw materials stock W.I.P Finished goods stock Accounts payable Accounts receivable Working capital changes

(50,000)

674,084

788,838

914,841

1,053,218

1,205,203

1,372,152

1,555,555

1,757,047

1,948,000

2,158,378

(110,000) (110,000) -

99,984 (333) (2,279) 8,463 (242,970) (137,134) (58,408) 478,541

(401) (13) (91) 339 (24,297) (24,464) (70,284) 694,091

(417) (14) (95) 352 (26,727) (26,900) (47,396) 840,545

(433) (14) (99) 366 (29,399) (29,580) (68,694) 954,944

(451) (15) (103) 381 (32,339) (32,527) (92,006) 1,080,670

(469) (16) (107) 396 (35,573) (35,768) (119,037) 1,217,347

(487) (16) (111) 412 (39,131) (39,333) (147,012) 1,369,210

(507) (17) (115) 428 (43,044) (43,254) (187,736) 1,526,057

(527) (18) (120) 445 (47,348) (47,567) (226,485) 1,673,948

(548) (18) (125) 463 (52,083) (52,311) (269,092) 1,836,975

Cash provided by/ used in operations FINANCING ACTIVITIES Long term loan Owner equity Dividend paid Cash provided by/ used in Financing activities INVESTING ACTIVITIES Capital Expenditure Cash provided by/ used in Investing activities Net Cash Flow Cash balance B/ F Cash balance C/ F Cash Balance from BS

(160,000)

1,980,000 220,000 2,200,000

(221,903)

(239,656)

(258,828)

(279,534)

(301,897)

(326,049)

(352,133)

(262,838) (221,903) (502,493)

(316,277) (575,105)

(392,622) (672,157)

(452,967) (754,864)

(519,018) (845,067)

(595,606) (947,739)

(674,868) (674,868)

(756,722) (756,722)

(834,221) (834,221)

(1,780,000) (1,780,000) 260,000 260,000 260,000 256,638 260,000 516,638 336,638

191,597 516,638 708,235 548,235

265,440 708,235 973,675 833,675

282,787 973,675 1,256,462 1,136,463

325,806 1,256,462 1,582,268 1,482,268

372,280 1,582,268 1,954,548 2,226,681

421,471 1,954,548 2,376,019 2,316,019

851,189 2,376,019 3,227,208 3,187,208

917,226 3,227,208 4,144,434 4,124,434

1,002,755 4,144,434 5,147,188 5,147,188

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14.4 Technology

USEFUL PROJECT MANAGEMENT TIPS

List of Machinery & Equipment

(As per Section 12.6)

Required spare parts & consumables: Suppliers credit agreements and availability as per schedule of maintenance be ensured before start of operations 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 training and after sales services under the contract with the machinery suppliers. They must be communicated about the timely availability with clear mutual understanding of the required time period. Quality Assurance Equipment & Standards: Whatever means required products quality standards need to be defined on the packaging and a system to check them instituted, this improves credibility

Marketing Product Development & Packaging: Expert's help may be engaged for product/service and packaging design & development Sales & Distribution Network: Strong contacts with the civil works contractors focusing upon house constructions for middle class people and owners of retail shops. 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 12.8)

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.

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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. 14.5 USEFUL LINKS

Prime Ministers Office www.pmo.gov.pk Small & Medium Enterprises Development Authority (SMEDA) 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

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Stone Crushing

www.gilgitbaltistan.gov.pk Government of Azad Jamu Kashmir www.ajk.gov.pk Trade Development Authority of Pakistan (TDAP) www.tdap.gov.pk Security Exchange 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 Pakistan Institute of Fashion Design(PIFD) www.pifd.edu.pk Pakistan Fashion Design Council (PFDC) www.pfdc.org

17 September 2013

Pre-Feasibility Study

Stone Crushing

15. KEY ASSUMPTIONS Machinery Assumptions Year 1 Capacity Utilization Maximum Capacity Utilization Total Production of the unit per day (Cu. Ft) Total Production of the unit per month (Cu. Ft) Total Production of the unit per year (100%) Operating Assumptions Annual Production capacity (70%) Days operational per month Days operational per year Economy Related Assumptions Electricity growth rate Wage growth rate Cash Flow Assumptions Accounts Receivable cycle (in days) Accounts payable cycle (in days) Raw Material Inventory 30 30 30 10% 10% 131,040 26 312 70% 100% 600 15,600 187,200

Product mix Product Name inch crush inch crush 3/8 inch crush Stone Powder (Khaka) Percentage Share in Production 25% 25% 20% 30% Estimated Price /C. Ft (Rs) 26 27 27 13

Revenue Assumptions Production of the unit (Cu. ft/year) Crushed stone (Cu. ft) Sale price growth rate
18 September 2013

131,040 131,040 5%

Pre-Feasibility Study

Stone Crushing

Domestic Sales

100%

Expense Assumptions Machine maintenance (% of total machinery cost) Machine maintenance growth rate Pre-paid land rent (months) Cost of raw limestone (Rs/Cu. ft) Wastage margin Raw material cost growth rate Rent growth rate 2% 3% 12 5 10% 5% 5%

Financial Assumptions Project life (Years) Debt Equity Interest rate on debt Debt tenure (Years) Debt payments per year 10 90% 10% 8% 7 1

19 September 2013