bakery_and_confectionery_standardize.pdf

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Pre-Feasibility Study

Prime Ministers Small Business Loan

Scheme

(Bakery and Confectionery Business)

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

[email protected]

REGIONAL OFFICEPUNJAB

REGIONAL OFFICESINDH

REGIONAL OFFICEKPK

REGIONAL OFFICEBALOCHISTAN

3rd Floor, Building No. 3,

Aiwan e Iqbal, Egerton Road

Lahore,

Tel: (042) 111-111-456Fax: (042)6304926-7

[email protected]

5TH Floor, Bahria

Complex II, M.T. Khan Road,

Karachi.Tel: (021) 111-111-456

Fax: (021) 5610572

[email protected]

Ground Floor

State Life Building

The Mall, Peshawar.Tel: (091) 9213046-47

Fax: (091) 286908

[email protected]

Bungalow No. 15-A

Chaman Housing Scheme

Airport Road, Quetta.Tel: (081) 831623, 831702

Fax: (081) 831922

[email protected]

September 2013
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Pre-feasibility Study Bakery and Confectionery

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 CAPACITIES .......................................................... 5

9 POTENTIAL TARGET MARKET .............................................................................. 5

10 PROJECT COST SUMMARY .................................................................................. 5

10.1 Project Economics ......................................................................................... 610.2 Project Financing ........................................................................................... 6

10.3 Project Cost ................................................................................................... 7

10.4 Space Requirement ....................................................................................... 7

10.5 Machinery and Equipment Requirements ...................................................... 8

10.6 Furniture & Fixtures and Other Equipments ................................................... 9

10.7 Raw Material Requirements ........................................................................... 9

10.8 Human Resource Requirement ................................................................... 10

10.9 Revenue Generation.................................................................................... 1010.10 Utilities and Other Costs .............................................................................. 11

11 ANNEXURE ........................................................................................................... 12

11.1 Income Statement ....................................................................................... 12

11.2 Statement of Cash Flow .............................................................................. 13

11.3 Balance Sheet ............................................................................................. 14

11.4 Useful Project Management Tips ................................................................. 15

11.5 Useful Links ................................................................................................. 16

12 KEY ASSUMPTION ............................................................................................... 17

12.1 Raw Material Assumptions .......................................................................... 17

12.2 Sales Assumptions ...................................................................................... 24

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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 fromcase 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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http://www.smeda.org.pk/http://www.smeda.org.pk/http://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 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 conceptdevelopment, start-up, and production, marketing, finance and business

management.

The purpose of this document is to facilitate potential investors in Bakery and

Confectionery 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 guidingsource 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 businessdevelopment 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 throughNational 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

Bakery & Confectionery business is growing in both urban and semi-urban areas.

This pre-feasibility study encompasses the bakery business located incommercial neighborhood surrounding and middle income residential localities.

Major products include cakes, snacks, sweets, nimko, biscuits, bread and

general confectionery items, which will be sold to target customers of vicinity.

The sales outlet will be supported by an in house production facility. Selections of

adequate product mix and business location, supported by marketing efforts are

the critical success factors.

This Bakery & Confectionery business will be started as sole proprietorship with

an investment of Rs. 2.04 million. This project is based on 90% debt and 10%

equity ratio. Projected IRR and Payback of this project are 57% and 2.76 yearsrespectively. The business will provide employment opportunity to 06 individuals

including the owner manager.

6 BRIEF DESCRIPTION OF PROJECT & PRODUCT

The proposed Bakery & Confectionery shop is a small scale project with a

production area and sales out-let. It will be equipped with basic machinery and

fixtures. The production area will require covered area of 2,700 sqft and the

outlet will be established on 900 sqft. The sales outlet will remain open for

business for 16 hours per day around the year.

Product mix will include cakes, snacks, sweets, nimko, biscuits, bread and

general confectionery items. This merchandise will be prepared and acquired

according to the demand of local customers and in quantities directly proportional

to expected sales.

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Out of total sales revenue 70% will come from bakery items and balance 30%

from general confectionery items. Maximum sales are expected during Eid

Seasons and in winters. First year revenues of the project are estimated to be Rs

11.24 million. It is expected that production growth rate will be 5% per annum

along with 10% per annum increase in sales price.

7 CRITICAL FACTORS

Background knowledge and experience of the entrepreneur in the bakerybusiness.

Induction of trained human resource for production of requisite items.

Maintenance of Quality and hygiene standards.

Pricing strategy & understanding requirements of the target customers.

Decor presentation and layout of the shop and products.

Locational considerations for easy access of the customers.

8 INSTALLED & OPERATIONAL CAPACITIES

As mentioned the sales of bakery items is 70 % of total sales revenue. The

installed capacity of bakery depends on the variety of the products being

produced. Installed capacity of major production items is cakes 23,758 pounds,

40,470 pieces of snacks, 11,812 pounds of sweets and nimko, and 11,800

pounds of mixed biscuits.

Starting capacity utilization is 70% of the installed capacity growing at the rate of

5% per annum.

9 POTENTIAL TARGET MARKET

Areas having presence of middle income groups in the smaller cities will be ideal

location for opening sales outlet of the business. Ideally production facility of the

workshop should be located alongside the sales outlet; however, if the rental

costs are a constraint, production facility can be established at a distant

economical location. In such a case, higher transportation costs may need to be

factored in.

Smaller cities with growing middle income group such as Sargodha, shekhupura,Gujrat, Sukkur, Hyderabad, Nowshehra, Charsadda, Khuzdar and Gilgit are

some of the prospective cities for setting up this business.

10 PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial

viability of [the project] under the Prime Ministers Small Business Loan Scheme.

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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 annexure.

10.1 Project Economics

All the figures in this financial model have been calculated for estimated sales of

Rs. 11.24 million in the year one. The capacity utilization during year one is

worked out at 70% with 5% increase in subsequent years up to the maximum

capacity utilization of 95%.

The following table shows internal rates of return and payback period.

Table 1: Project Economics

Description Details

Internal Rate of Return (IRR) 51%

Payback Period (yrs) 2.76

Net Present Value (Rs.) 4,134,165

Project returns are based on the margins of the items sold. Profitability of the

business is highly dependent on raw material cost. Moreover, in bakery or food

item businesses the probability of wastage is higher, hence reducing of wastage

through demand and supply analysis will play a vital role in profit maximization. In

this regard, efficient supply chain management will be an appropriate strategy for

this venture.

Another crucial factor for the success of this project is to maintain the hygienic

standards and clean environment to avoid customer complaints.

10.2 Project Financing

Following table provides details of the equity required and variables related to

bank loan;

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Table 2: Project Finance

Description Details

Total Equity (10%) Rs. 204,144

Bank Loan (90%) Rs. 1,837,298Markup to the Borrower (%age/annum) 8%

Tenure of the Loan (Years) 7

10.3 Project Cost

Following fixed and working capital requirements have been identified foroperations of the proposed business.

Table 3: Capital Investment for the Project

Description Amount Rs.

Capital Cost

Plant and Machinery 1,124,000

Furniture, Fixture and Office Equipment 270,000

Motor Vehicles 45,000

Pre-operating Cost 120,000

Total Capital Cost 1,559,000

Working Capital

Raw Material Inventory 106,692

Up-front Building Rent 225,000

Cash 150,000

Total Working Capital 481,692

Total Project Cost 2,041,442

*Pre-paid Building and Shop Rent (for 1 Kanal @ Rs. 75,000 per month) 3 Months Rentas Security and 1 Months Advance Rent calculated.

10.4 Space Requirement

Space requirements for the proposed bakery and confectionary unit mainly

include the production hall, store room and a retail outlet. For this purpose it is

recommended that a rented place of maximum 3.600 sqft (i.e. 2,700 sqft for

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production space and 900 sqft for outlet) would be acquired on rent basis in the

vicinity of newly developing housing societies in the major cities. The production

space and bakery outlet could be acquired at separate places. However, it

should be ensured that both the facilities are located closely for easy supply of

produced goods to the outlet.

Table 4: Space Requirement

DescriptionEstimated Area

(Sqft)Monthly Rent (Rs.)

Production Space 2,700 35,000

Outlet Space 900 40,000

10.5 Machinery and Equipment Requirements

Plant, machinery and equipment for the proposed project are stated below.

Table 5: Lis t of Plant Machinery and Equipment

Sr. No Descr ipt ion of Item Req. Qty Unit Cost (Rs.) Total Cost (Rs.)

1 Flour Sifter 1 125,000 125,000

2Mixer (60 Kg or 40 LtrCapacity

1 250,000 250,000

3 Cross Sheeter 1 200,000 200,000

4 Oven (8x8 ft) 1 350,000 350,000

5 Dyes 30 75 2,250

6 Deep Freezer 1 50,000 50,000

7 Fryer and Burner 2 15,000 30,000

8 Ceiling Machine 1 1,500 1,500

9 Moving Trolleys 2 10,000 20,000

10 Trays 30 200 6,000

11 UPS and Batteries 2 20,000 40,000

12Misc. Tools &Equipments (Pans,Knives and others)

1 50,000 50,000

Total 1,124,750

The required machinery is easily available in the local markets. Used and new

machinery can be purchased from different markets in Lahore and Gujranwala.

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These requirements are based on the proposed production plans as mentioned

elsewhere.

10.6 Furniture & Fixtures and Other Equipments

In addition to the above plant machinery and equipment, following necessary

items will be required for the proposed venture.

Table 6: Furniture & Fixture and Other Equipment

Sr. No Descr ipt ion of Item Req. Qty Unit Cost (Rs.) Total Cost (Rs.)

1 Production Tables 2 5,000 10,000

2Chairs & OtherFurniture

10,000 10,000

3Cost of Renovationand Interior

Designing

125,000 125,000

4 Air conditioner 1 45,000 45,000

5 Vertical Freezer 1 30,000 30,000

6Weighing Scales (ForCash Counter &Production)

1 5,000 5,000

7 Micro Wave Oven 1 10,000 10,000

8 Sign Board 1 10,000 10,000

9 Miscellaneous 1 25,000 25,000

Total 270,000

10.7 Raw Material Requirements

There is large number of raw materials required for production of different

varieties of bakery and confectionary products. The complete details of raw

materials along with recipe of different products are enclosed asAnnexure 12.1.

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10.8 Human Resource Requirement

Table 7: Human Resource Requirement

Descr ipt ion No. of Employees Salary/ Month(per person)

Owner Manager 1 25,000

Master Chef 1 20,000

Salesmen 2 10,000

Helpers 2 10,000

Total Staff 6

The owner of the business is recommended for personally managing the

operations of the proposed venture. Additionally, above HR composition shall be

engaged in order to manage the operational affairs of this project under the

supervision of the owner. The appropriate experience for Chef and Salesmen

would be required.

10.9 Revenue Generation

Following table provides the details of sales revenues for year one:

Table 8: Sales Revenue (1st

Year)

Product Mix % age of Sales 1st

Year Sales Revenue (Rs.)

Bakery Sales 70% 8,645,315

General Item Sales 30% 2,593,595

Total Sales 11,238,910

The above sales revenues are based on following key operational assumptions:

Table 9: Operational Assumptions

No of Working Days 355

No. of Working Hours/day 16No. of Shifts/day 2

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10.10 Utili ties and Other Costs

An essential cost to be borne by the company is the cost of electricity and gas.

The electricity expenses are estimated to be around Rs. 50,000 per month,

whereas, gas expenses are estimated to be Rs. 45,000 (including both natural

gas and LPG). Considering the non availability or low pressure of natural gasalternate burning fuels i.e. LPG, wood or kerosene oil may need to be

considered. The advance procurement of raw materials and packing material for

at least 03 days along with 02 days finished goods stock level will be maintained

for uninterrupted sales of goods, at the production and outlet facility.

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11 ANNEXURE

11.1 Income Statement

Income Statement

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Revenue 11,238,910 13,419,982 15,747,024 18,405,275 21,437,705 24,892,570 27,401,857 30,142,043 33,156,247 36,471,872

Cost of sales

Cost of goods sold 1 68% 7,681,843 9,172,615 10,763,159 12,580,085 14,652,764 17,014,179 18,729,288 20,602,216 22,662,438 24,928,682

Operation costs 1 (direct labor) 2% 236,667 263,123 288,758 316,888 347,756 381,630 419,092 459,895 504,671 553,807

Operating costs 3 (direct electricity) 2% 240,000 264,000 290,400 319,440 351,384 386,522 425,175 467,692 514,461 565,907

Operating costs 4 (direct water) 20,708 24,727 29,015 33,913 39,500 45,866 50,489 55,538 61,092 67,202

Operating costs 5 (direct gas) 345,139 412,118 483,580 565,213 658,337 764,433 841,491 925,641 1,018,205 1,120,025

Total cost of sales 76% 8,524,357 10,136,583 11,854,911 13,815,538 16,049,741 18,592,630 20,465,535 22,510,983 24,760,868 27,235,623

Gross Profit 2,714,552 3,283,398 3,892,113 4,589,737 5,387,964 6,299,940 6,936,322 7,631,060 8,395,379 9,236,249

General administration & selling expenses

Administration expense 7% 780,000 855,942 939,278 1,030,727 1,131,080 1,241,204 1,362,049 1,494,660 1,640,182 1,799,873

Administration benefits expense 1% 78,000 85,594 93,928 103,073 113,108 124,120 136,205 149,466 164,018 179,987

Building rental expense 8% 900,000 990,000 1,089,000 1,197,900 1,317,690 1,449,459 1,594,405 1,753,845 1,929,230 2,122,153

Electricity expense Outlet 3% 360,000 396,000 435,600 479,160 527,076 579,784 637,762 701,538 771,692 848,861

Travelling expense 1% 56,195 67,100 78,735 92,026 107,189 124,463 137,009 150,710 165,781 182,359

Communications expense (phone, fax, mail, internet, etc.) 0.14% 15,600 17,119 18,786 20,615 22,622 24,824 27,241 29,893 32,804 35,997

O ff ic e e xp ens es (s ta ti on ar y, ent er ta in me nt , j an it or ial se rv ic es , et c. ) 0 .07 % 7 ,8 00 8,559 9,393 10,307 11,311 12,412 13,620 14,947 16,402 17,999

Promotional expense 1% 112,389 134,200 157,470 184,053 214,377 248,926 274,019 301,420 331,562 364,719

Depreciation expense 1% 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975

Amortization of pre-operating costs 0.11% 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000

Miscellaneous expense 1

Subtotal 2,465,959 2,710,489 2,978,164 3,273,836 3,600,427 3,961,166 4,338,285 4,752,455 5,207,646 5,707,923

Operating Income 248,594 572,909 913,949 1,315,901 1,787,537 2,338,774 2,598,037 2,878,605 3,187,733 3,528,326

Earnings Before Interest & Taxes 248,594 572,909 913,949 1,315,901 1,787,537 2,338,774 2,598,037 2,878,605 3,187,733 3,528,326

Interest expense on long term debt (Project Loan) 139,611 122,676 104,337 84,475 62,964 39,668 14,439 - - -

Interest expense on long term debt (Working Capital Loan) - - - - - - - - - -

Subtotal 139,611 122,676 104,337 84,475 62,964 39,668 14,439 - - -

Earnings Before Tax 108,983 450,233 809,612 1,231,426 1,724,573 2,299,105 2,583,598 2,878,605 3,187,733 3,528,326

Tax - 5,023 43,942 107,214 192,414 307,321 368,399 442,151 519,433 604,581

NET PROFIT/(LOSS) AFTER TAX 108,983 445,210 765,670 1,124,213 1,532,159 1,991,784 2,215,199 2,436,454 2,668,300 2,923,744

Balance brought forward 108,983 554,193 1,319,863 2,444,076 3,976,234 5,968,019 8,183,217 10,619,671 13,287,971

Total profit available for appropriation 108,983 554,193 1,319,863 2,444,076 3,976,234 5,968,019 8,183,217 10,619,671 13,287,971 16,211,716

Dividend - - - - - - - - - -

Balance carried forward 108,983 554,193 1,319,863 2,444,076 3,976,234 5,968,019 8,183,217 10,619,671 13,287,971 16,211,716

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11.2 Statement of Cash Flow

Cash Flow Statement

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 108,983 445,210 765,670 1,124,213 1,532,159 1,991,784 2,215,199 2,436,454 2,668,300 2,923,744

Add: depreciation expense 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975 143,975

amortization of pre-operating costs 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000

Deferred income tax - 5,023 43,942 107,214 192,414 307,321 368,399 442,151 519,433 604,581

Finished goods inventory (120,061) (20,855) (23,878) (27,245) (31,046) (35,335) (25,824) (28,409) (31,248) (34,372)

Equipment inventory - - - - - - - - - - -

Raw material inventory (106,692) (33,445) (40,744) (51,676) (65,403) (82,617) (80,258) (96,775) (117,098) (141,689) 816,396

Pre-paid building rent (225,000) (22,500) (24,750) (27,225) (29,948) (32,942) (36,236) (39,860) (43,846) (48,231) 530,538

Accounts payable 321,451 62,939 67,488 77,356 88,574 100,343 74,461 81,782 90,489 59,583

Cash provided by operations (331,692) 410,403 582,798 930,296 1,342,162 1,822,517 2,403,594 2,651,575 2,927,009 3,213,030 5,056,446

Financing activities

Project Loan - principal repayment (204,028) (220,962) (239,302) (259,164) (280,674) (303,970) (329,199) - - -

Additions to Project Loan 1,837,298 - - - - - - - - - -

Issuance of shares 204,144 - - - - - - - - - -

Cash provided by / (used for) financing activities 2,041,442 (204,028) (220,962) (239,302) (259,164) (280,674) (303,970) (329,199) - - -

Investing activities

Capital expenditure (1,559,750) - - - - - - - - - -

Acquisitions

Cash (used for) / provided by investing activities (1,559,750) - - - - - - - - - -

NET CASH 150,000 206,376 361,836 690,995 1,082,998 1,541,843 2,099,624 2,322,376 2,927,009 3,213,030 5,056,446

Cash balance brought forward 150,000 356,376 718,212 1,409,206 2,492,205 4,034,048 6,133,672 8,456,047 11,383,056 14,596,086Cash available for appropriation 150,000 356,376 718,212 1,409,206 2,492,205 4,034,048 6,133,672 8,456,047 11,383,056 14,596,086 19,652,532

Dividend - - - - - - - - - -

Cash balance 150,000 356,376 718,212 1,409,206 2,492,205 4,034,048 6,133,672 8,456,047 11,383,056 14,596,086 19,652,532

Cash carried forward 150,000 356,376 718,212 1,409,206 2,492,205 4,034,048 6,133,672 8,456,047 11,383,056 14,596,086 19,652,532

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11.3 Balance Sheet

Balance Sheet

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Current assets

Cash & Bank 150,000 356,376 718,212 1,409,206 2,492,205 4,034,048 6,133,672 8,456,047 11,383,056 14,596,086 19,652,532

Finished goods inventory 120,061 140,916 164,795 192,039 223,085 258,420 284,244 312,653 343,901 378,273

Raw material inventory 106,692 140,137 180,881 232,557 297,960 380,576 460,834 557,610 674,708 816,396 -

Pre-paid building rent 225,000 247,500 272,250 299,475 329,423 362,365 398,601 438,461 482,307 530,538 -

Total Current Assets 481,692 864,074 1,312,259 2,106,033 3,311,627 5,000,074 7,251,527 9,736,362 12,852,724 16,286,921 20,030,804

Fixed assets

Machinery & equipment 1,124,750 1,012,275 899,800 787,325 674,850 562,375 449,900 337,425 224,950 112,475 -

Furniture, fixtures and Office Equipment 270,000 243,000 216,000 189,000 162,000 135,000 108,000 81,000 54,000 27,000 -

Office vehicles 45,000 40,500 36,000 31,500 27,000 22,500 18,000 13,500 9,000 4,500 -

Total Fixed Assets 1,439,750 1,295,775 1,151,800 1,007,825 863,850 719,875 575,900 431,925 287,950 143,975 -

Intangible assets

Pre-operation costs 120,000 108,000 96,000 84,000 72,000 60,000 48,000 36,000 24,000 12,000 -

Total Intangible Assets 120,000 108,000 96,000 84,000 72,000 60,000 48,000 36,000 24,000 12,000 -

TOTAL ASSETS 2,041,442 2,267,849 2,560,059 3,197,858 4,247,477 5,779,949 7,875,427 10,204,287 13,164,674 16,442,896 20,030,804

Current liabilities

Accounts payable 321,451 384,390 451,879 529,235 617,809 718,151 792,612 874,394 964,884 1,024,466

Total Current Liabilities - 321,451 384,390 451,879 529,235 617,809 718,151 792,612 874,394 964,884 1,024,466

Other liabilities

Deferred tax - 5,023 48,965 156,179 348,593 655,914 1,024,313 1,466,464 1,985,897 2,590,478

Long term debt (Project Loan) 1,837,298 1,633,270 1,412,308 1,173,007 913,843 633,169 329,199 - - - -

Total Long Term Liabilities 1,837,298 1,633,270 1,417,332 1,221,972 1,070,022 981,762 985,113 1,024,313 1,466,464 1,985,897 2,590,478

Shareholders' equity

Paid-up capital 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144 204,144

Retained earnings 108,983 554,193 1,319,863 2,444,076 3,976,234 5,968,019 8,183,217 10,619,671 13,287,971 16,211,716

Total Equity 204,144 313,127 758,337 1,524,007 2,648,220 4,180,379 6,172,163 8,387,361 10,823,815 13,492,115 16,415,860

TOTAL CAPITAL AND LIABILITIES 2,041,442 2,267,849 2,560,059 3,197,858 4,247,477 5,779,949 7,875,427 10,204,287 13,164,674 16,442,896 20,030,804

Liabilities & Shareholders' Equity

Assets

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Pre-feasibility Study

11.4 Useful Project Management Tips

Technology

Required spare parts & consumables: Suppliers credit agreements and

availability as per schedule of maintenance be ensured before start ofoperations

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

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

Ads & Point of Sales Promotion: Business promotion and dissemination

through banners and launch events is highly recommended. Product

broachers from good quality service providers

Price - Bulk Discounts, Cost plus Introductory Discounts: Price shouldnever 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

Adequacy & Competencies: Skilled and experienced master chef

should be considered an investment even to the extent of offering share in

business profit.

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11.5 Useful Links

Prime Ministers Office,www.pmo.gov.pk

Small and Medium Enterprise Development Authority,www.smeda.org.pk

National Bank of Pakistan (NBP),www.nbp.com.pk

First Women Bank Limited (FWBL),www.fwbl.com.pk

State Bank of Pakistan (SBP), www.sbp.org.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 Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk

Government of Balochistan, www.balochistan.gov.pk

Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk

Government of Azad Jamu Kashmir, www.ajk.gov.pk

Security Commission of Pakistan (SECP), www.secp.gov.pk

16
http://www.pmo.gov.pk/http://www.pmo.gov.pk/http://www.pmo.gov.pk/http://www.smeda.org.pk/http://www.smeda.org.pk/http://www.smeda.org.pk/http://www.nbp.com.pk/http://www.nbp.com.pk/http://www.nbp.com.pk/http://www.fwbl.com.pk/http://www.fwbl.com.pk/http://www.fwbl.com.pk/http://www.fwbl.com.pk/http://www.nbp.com.pk/http://www.smeda.org.pk/http://www.pmo.gov.pk/


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12 KEY ASSUMPTION

12.1 Raw Material Assumptions

Plain & Dry Cakes

Plain cakes

Raw material:Units ofmeasure

Quantit y Rate Cost%

ingredientsQty

Ingredients

QtyIngredients

in grams ForMaking 1 Kg

QtyIngredients

For Making 1Kg (gms)

QtyIngredientsFor Making

1 Pound(gms)

Butter Kg 280 450 125,959 21.73% 303 225 225 102.058

Sugar Kg 50 60 2,986 3.86% 333 40 40 18.144

Maida Kg 373 50 18,661 28.97% 393 300 300 136.078

Baking powder Kg 12 60 746 0.97% 12 10 10 4.536

Eggs Pcs 11,594 7 81,157 34.77% 7,261 9 360 163.293

Flavor Ltr. 1 500 311 0.05% 1 0.5 1 0.227

Cream and Honey Kg 124 400 49,762 9.66% 100 100 45.359

279,581 100.00% 8,302 1036

Plain fruit cakes



ingredientsQty

Ingredients

QtyIngredients


QtyIngredients



1 Pound(gms)

Butter Kg 316 450 142,012 24.498% 162 250 250

Sugar Kg 50 60 3,030 3.920% 178 40 40

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Maida Kg 316 50 15,779 24.498% 211 250 250

Baking powder Kg 13 60 757 0.980% 6 10 10

Fruit Chunks Kg 379 60 22,722 29.397% 66 300 300

Sougi Kg 63 80 5,049 4.900% 66 50 50

Eggs Pcs 3,865 7 27,052 11.759% 3,888 3 120

Flavors Ltr. 1 500 316 0.049% 0.32 0.5 0.5

216,716 100% 4,578 1020.5

Dry cakes



ingredientsQty

Ingredients

QtyIngredients


QtyIngredients



1 Pound(gms)

Butter Kg 357 450 160,629 22.167% 545 225 225

Sugar Kg 63 60 3,807 3.941% 545 40 40

Maida Kg 436 50 21,814 27.094% 545 275 275

Baking powder Kg 16 60 952 0.985% 22 10 10

Eggs Pcs 14,492 7 101,446 35.468% 16,364 9 360

Flavor Ltr. 8 500 3,966 0.493% 1.09 5 5

Cream + Honey Kg 159 400 63,458 9.852% 100 100

356,072 100.000% 18,023 1015

Sweets & Nimko

Nimko



ingredientsQty

Ingredients

QtyIngredients


QtyIngredients



1 Pound(gms)

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Baison Kg 485 90 43,639 68.293% 491 700 700

Dry Fruit Kg 139 160 22,166 19.512% 123 200 200

Channey Kg 69 120 8,312 9.756% 61 100 100

Nimko Masala Kg 17 150 2,598 2.439% 25 25 2525 25 25

Sweets

Raw material: Units ofmeasure

Quantit y Rate Cost %ingredients

QtyIngredients

Qty

Ingredientsin grams ForMaking 1 Kg

Qty

IngredientsFor Making 1

Kg (gms)


1 Pound(gms)

Khoya Kg 1,801 400 720,290 33.816% 1,050 350 350

Maida Kg 1,158 50 57,880 21.739% 263 225 225

Eggs Kg 21,300 7 149,100 15.459% 131 4 160

Ghee Kg 772 175 135,054 14.493% 53 150 150

Sugar syrup orSugar

Kg 772 800 617,391 14.493% 919 150 150

1,679,716 100% 2,415 1035

Chicken Bread

Raw material:Units of

measureQuantit y Rate Cost

%

ingredients

Qty

Ingredients

QtyIngredients


QtyIngredients



1 Pound(gms)

Maida Kg 416.02 50 20,801 14.648% 336.00 150 150

Oil Ltr 55.47 190 10,539 1.953% 33.60 20 20

Yeast Kg 5.55 180 998 0.195% 1.68 2 2

Sugar Kg 69.34 60 4,160 2.441% 33.60 25 25

Salt Kg 5.55 8 44 0.195% 3.60 2 2

Chicken Kg 970.70 275 266,943 34.180% 480.00 350 350

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Onion Kg 346.68 40 13,867 12.207% 720.00 125 125

Masala Kg 138.67 84 11,648 4.883% 84.00 50 50

Cheese Kg 277.34 800 221,875 9.766% 180.00 100 100

Mayonnaise &Ketchup

Kg 138.67 90 12,480 4.883% 120.00 50 50

Mix Vegetable Kg 416.02 80 33,281 14.648% 120.00 150 150

2,840 596,639 100.000% 2,112 1024 1024

Fresh Cream cakes



ingredientsQty

Ingredients

QtyIngredients


QtyIngredients



1 Pound(gms)

Butter Kg 491 450 221,135 12.207% 545 80 125

Sugar Kg 393 60 23,588 9.766% 545 100 100

Maida Kg 491 50 24,571 12.207% 545 100 125

Baking powder Kg 8 60 472 0.195% 22 2 2

Eggs Pcs 16,103 7 112,718 15.625% 16,364 4 160

Flavor Ltr. 8 500 3,931 0.195% 1.09 2 2

Fresh Cream Kg 2,005 300 601,486 49.805% 510 510

987,899 100.000% 18,023 1024

* Assume 20% extra cost for this type of Cakes 1,185,479

Pastries & Puff etc



ingredientsQty

Ingredients

QtyIngredients


QtyIngredients



1 Pound(gms)

Butter Kg 315 450 141,526 12.207% 545 100 125

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Sugar Kg 252 60 15,096 9.766% 545 100 100

Maida Kg 315 50 15,725 12.207% 545 100 125

Baking powder Kg 5 60 302 0.195% 22 2 2

Eggs Pcs 10,306 7 72,139 15.625% 16,364 4 160

Flavor Ltr. 5 500 2,516 0.195% 1.09 2 2

Fresh Cream Kg 1,283 300 384,951 49.805% 510 510

632,256 100.000% 18,023 1024

Bread - - 100.000% 407 1030

Biscuits etc



ingredientsQty

Ingredients

QtyIngredients


QtyIngredients



1 Pound(gms)

Butter Kg 873 450 392,828 16.393% 303 170 170

Sugar Kg 770 60 46,215 14.465% 333 150 150

Maida Kg 1,797 50 89,863 33.751% 393 350 350

Baking powder Kg 26 60 1,541 0.482% 12 5 5

Eggs Pcs 47,925 7 335,475 34.716% 7,261 9 360

Flavor Ltr. 10 500 5,135 0.193% 1 2 2

871,056 100% 8,302 1037

Snacks

Per Piece

Chicken Drum stick Leg Piece

45.5 161,525

Chicken Leg Piece

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63 268,380

Chicken Shami

21 111,825

Chicken Sandwich

35 62,125

Chicken Patties

17.5 155,313Chicken Bread roll

21 74,550

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Chicken Pizza



ingredientsQty

Ingredients

QtyIngredients


Qty IngredientsFor Making 1 Kg

(gms)

Maida Kg 930.58 50 46,529 19.417% 336.00 200 200

Oil Ltr 69.79 190 13,261 1.456% 33.60 15 15

Yeast Kg 4.65 180 838 0.097% 1.68 1 1

Sugar Kg 93.06 60 5,583 1.942% 33.60 20 20

Salt Kg 18.61 15 279 0.388% 3.60 4 4

Chicken Kg 1,395.87 275 383,865 29.126% 480.00 300 300

Onion Kg 930.58 40 37,223 19.417% 720.00 200 200

Masala Kg 186.12 84 15,634 3.883% 84.00 40 40

Cheese Kg 465.29 800 372,233 9.709% 180.00 100 100

Mayonnaise &Ketchup

Kg 232.65 90 20,938 4.854% 120.00 50 50

Mix Vegetables Kg 465.29 80 37,223 9.709% 120.00 100 100

4,793 933,607 100% 2,112 1030

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12.2 Sales Assumptions

Description UnitsSales perDay (Qty)

Sales PerYear (Qty)

Sales Price/ Unit (Rs.)

AnnualSales (Rs.)

Fresh Cream CakesFresh cream Pounds 10 3,550 180 639,000

Fresh fruit Pounds 5 1,775 180 319,500

Chocolate Cakes Pounds 5 1,775 180 319,500

Butter cream cakes Pounds 5 1,775 180 319,500

Total 8,875 1,597,500

Fresh & ChocolatePastries

Pounds 5 1,775 180 319,500

Donuts Pounds 5 1,775 180 319,500

Cream puff Pounds 3 1,065 180 191,700

Cream roll Pounds 3 1,065 180 191,700

Total 5,680 1,022,400

Bread (Out Sourced)

Bread, Bun, Rusk Etc. Kgs 10 3,550 110 390,500

Total 390,500

Dry cakes

Dry cakes Pounds 10 3,550 180 639,000

Fruit cakes large Pounds 3 1,065 140 149,100

Fruit cakes small Pounds 5 1,775 140 248,500

Plain cakes large Pounds 3 1,065 120 127,800

Plain cakes small Pounds 5 1,775 120 213,000Total 9,230 1,377,400

Snacks

Chicken pizza large Pcs 5 1,775 380 674,500

Chicken pizza medium Pcs 10 3,550 200 710,000

Chicken pizza small Pcs 14 4,970 100 497,000

Chicken bread Pcs 8 2,840 380 1,079,200

Chicken drum stick legpiece

Pcs 10 3,550 65 230,750

Chicken leg piece Pcs 12 4,260 90 383,400

Chicken shami Pcs 15 5,325 30 159,750

Chicken sandwich Pcs 5 1,775 50 88,750Chicken patties Pcs 25 8,875 25 221,875

Chicken bread roll Pcs 10 3,550 30 106,500

Total 40,470 4,151,725

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Description UnitsSales perDay (Qty)

Sales PerYear (Qty)

Sales Price/ Unit (Rs.)

AnnualSales (Rs.)

Sweets & Nimko

Nimko Kgs 2 710 400 284,000

Gulab Jaman Kgs 3 1,065 375 399,375

Chum Chum Kgs 3 1,065 375 399,375

Kalakand Kgs 2 710 375 266,250

Burfi Kgs 3 1,065 375 399,375

Moti Choor Kgs 3 1,065 375 399,375

Pateesa Kgs 1 355 375 133,125

Total 15 5,325 2,280,875

Biscuits

Cake Rusk Kgs 2 710 320 227,200

White Biscuits Kgs 1 355 320 113,600

Coconut Biscuits Kgs 1 355 320 113,600

Macaroon Coconut Kgs 1 355 320 113,600

Almond Macaroon Kgs 1 355 320 113,600Cheese Finger Kgs 1 355 320 113,600

Salty Zeera Plus Kgs 1 355 320 113,600

Plain Khatai Kgs 1 355 320 113,600

Baker Khani Kgs 1 355 320 113,600

Finger Kgs 1 355 320 113,600

Jam Wafer Kgs 1 355 320 113,600

Special Biscuit Kgs 1 355 320 113,600

Chocolate Biscuits Kgs 1 355 320 113,600

Round Almond Biscuit Kgs 1 355 320 113,600

Total 15 5,325 1,704,000

25

Documents

bakery_and_confectionery_standardize.pdf