Pre-Feasibility Study
(Modified CA Cold Storage 1000 MT)
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 Complex, Egerton Road,
Lahore
Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
REGIONAL OFFICE PUNJAB
REGIONAL OFFICE SINDH
REGIONAL OFFICE
KPK REGIONAL OFFICE
BALOCHISTAN
3rd Floor, Building No. 3,
Aiwan-e-Iqbal Complex, Egerton Road Lahore,
Tel: (042) 111-111-456 Fax: (042) 36304926-7
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]
June 2017
Pre-Feasibility Study Modified CA Cold Storage
[Type here] i
Table of Contents
1 DISCLAIMER ................................................................................................................................. 1
2 EXECUTIVE SUMMARY ............................................................................................................... 2
3 INTRODUCTION TO SMEDA ........................................................................................................ 3
4 PURPOSE OF THE DOCUMENT .................................................................................................. 3
5 BRIEF DESCRIPTION OF PROJECT & PRODUCT .................................................................... 4
5.1 PRE-PROCESSING AND STORAGE PROCESS FLOW ......................................................................... 5 5.2 INSTALLED AND OPERATIONAL CAPACITIES .................................................................................... 6
6 CRITICAL FACTORS .................................................................................................................... 6
7 GEOGRAPHICAL POTENTIAL FOR INVESTMENT .................................................................... 7
8 POTENTIAL TARGET CUSTOMERS / MARKETS ...................................................................... 8
9 PROJECT COST SUMMARY ........................................................................................................ 8
9.1 PROJECT ECONOMICS .................................................................................................................. 8 9.2 PROJECT FINANCING .................................................................................................................... 8 9.3 PROJECT COST ............................................................................................................................ 9 9.4 SPACE REQUIREMENT ................................................................................................................ 10 9.5 MACHINERY & EQUIPMENT REQUIREMENT ................................................................................... 11 9.6 FURNITURE & FIXTURES REQUIREMENT ....................................................................................... 13 9.7 OFFICE EQUIPMENT REQUIREMENT ............................................................................................. 14 9.8 OFFICE VEHICLE REQUIREMENT .................................................................................................. 14 9.9 HUMAN RESOURCE REQUIREMENT .............................................................................................. 15 9.10 UTILITIES AND OTHER COSTS .................................................................................................. 15
10 CONTACT DETAILS.................................................................................................................... 16
10.1 MACHINERY SUPPLIERS ......................................................................................................... 16 10.2 RAW MATERIAL SUPPLIERS .................................................................................................... 17 10.3 TECHNICAL EXPERTS / CONSULTANTS ..................................................................................... 17
11 USEFUL WEB LINKS .................................................................................................................. 18
12 ANNEXURES ............................................................................................................................... 20
12.1 INCOME STATEMENT .............................................................................................................. 20 12.2 BALANCE SHEET .................................................................................................................... 21 12.3 CASH FLOW STATEMENT ........................................................................................................ 22
13 KEY ASSUMPTIONS ................................................................................................................... 23
13.1 OPERATING COST ASSUMPTIONS ............................................................................................ 23 13.2 PRODUCTION COST ASSUMPTIONS ......................................................................................... 23 13.3 REVENUE ASSUMPTIONS ........................................................................................................ 23 13.4 FINANCIAL ASSUMPTIONS ....................................................................................................... 23
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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
Document Control
Document No. PREF-NO: 141
Revision No. 01
Prepared by SMEDA-Sindh
Revision Date June, 2017
For information Provincial Chief (Sindh)
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2 EXECUTIVE SUMMARY
Modified Controlled Atmosphere (CA) Cold storage is proposed to be located at in
any of the major cities across Pakistan. This project is designed for storing fruits and
vegetables using different compartments of the unit for storing multiple products,
where relative temperatures for respective products can be maintained
Product(s) include Apple, Mango Citrus and other fruits and vegetables.
Capacity; Installed capacity 1000 MT and initial utilization 500 MT, 50%
Total Cost Estimates is Rs.180.26 million with fixed investment Rs.176.15 million
and working capital Rs.4.11 million.
Given the cost assumptions IRR and payback are 16 % and 5.71 years respectively
The most critical considerations or factors for success of the project are:
Most significant consideration(s)
Careful selection of good location and purchase of land at competitive price.
Effective marketing and distribution of the product particularly to the exporters,
industrial units and super store buyers.
Complete adherence to best agronomic practices is critical to the success of
this project; therefore, technical knowledge & experience of the entrepreneur
in the field of horticulture and in fresh fruit processing business is absolutely
necessary.
Ensure Energy efficient construction hence low operating/fuel costs due to
efficient insulation
Equally important factor(s)
Selection of quality fruits on the basis of best analysis of cost and revenues
for a given season; cost efficiency through better management.
Awareness about HACCP standards and Strict Quality assurance of process
and products.
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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.
4 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, and
production, marketing, finance and business management.
The purpose of this document is to facilitate potential investors in Modified CA Cold
Storage 1000 MT 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 basis of any Investment Decision.
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5 BRIEF DESCRIPTION OF PROJECT & PRODUCT
Establishment of controlled atmosphere cold storage provides refrigerated storage
and preservation facilities for several fruits, vegetables & flowers. Because of
technology advancements and logistic strategies, the controlled atmosphere cold
storage of perishable items has become an important stage in the distribution between
manufacturers/processors and retail locations. The controlled atmosphere cold
storage will ensure the increased availability and improved quality of high value
perishable fruits and vegetables for both export and local sale, which would otherwise
perish or deteriorate. Following key parameters must be addressed as per pre-
feasibility study under preparation
Technology: CA cold storage is a used for storing produce such as vegetable and
fruits in an atmosphere that is considerably different from normal air with respect
to CO2 and O2 levels. The CO2 and O2 levels within gas tight stores are monitored
and adjusted to preserve the storage items. Due to metabolic activity of the
respiring fruits and vegetables in the store and leakage of gases through doors and
walls, the gas mixture will constantly change. The gases are therefore measured
periodically and adjusted to the predetermined level by the introduction of fresh air
or nitrogen or passing the store atmosphere through a chemical to remove CO2.
Location: CA Cold Storage can be set-up in any major city with significant
population such as Karachi, Hyderabad, Lahore, Rawalpindi, Islamabad, Multan,
Peshawar and Quetta preferably near Sabzi Mandi or fruit & vegetables trading
hub. This business can also be done in all small second tier towns in addition to
suburban towns of large cities.
Product: In the proposed controlled atmosphere cold storage there would be a
capacity to store high end imported or local products which can be stored for a
duration of about 06 months and more. The proposed products would be Apple
and Kinow due to their storage life in CA cold storage up to six months.
Target Market: Target market would be Growers, whole sellers, retailers, hyper
stores, Importers and Exporters of fruit and vegetables.
Employment Generation: The proposed project will provide direct
employment to 09 people. Financial analysis shows the unit shall be profitable from
the very first year of operation.
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5.1 Pre-processing and storage Process Flow
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5.2 Installed and Operational Capacities
The proposed cold storage facility has a maximum storage capacity of storing 1,000 metric tons. It will be functional throughout the year. Proposed capacity utilization is 50%1 with annual growth rate of 10%. This growth rate would be capped at 95% in 5th year.
6 CRITICAL FACTORS
The main critical success factors that affect the decision to invest in the proposed business setup are:
Better insulation technology and compartmentalization of cold storage as
compared to the rest of the cold storages in Pakistan.
Energy efficient construction hence low operating/fuel costs due to efficient
insulation.
Compartmentalization i.e. compartments has the provision of storing different
commodities at their respective temperatures.
Complete adherence to best agronomic practices is critical to the success of
this project; therefore, technical knowledge & experience of the entrepreneur
in the field of horticulture and in fresh fruit processing business is absolutely
necessary.
Awareness about HACCP standards and Strict Quality assurance of process
and products.
Selection of quality fruits on the basis of best analysis of cost and revenues
for a given season; cost efficiency through better management.
Appropriate post-harvest arrangement for transportation of product to the
processing unit in case of ‘own stock’ business model.
Appropriate storage arrangement and internal control for processed fruits; cold
chain refer container arrangements for transportation to local and international
markets.
Properly trained seed staff should be engaged and comprehensive staff
training programs to be adopted for capacity building.
Careful selection of good location and purchase of land at competitive price.
Effective marketing and distribution of the product particularly to the exporters,
industrial units and super store buyers.
1 As suggested by KESTRAL
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7 GEOGRAPHICAL POTENTIAL FOR INVESTMENT
Pakistan produces a variety of fruits and vegetables like potato, apple, mangoes, dates, banana, cherries, kiwi, apricots, pomegranates, peas, carrots, etc. Pakistan's total annual production of fruits amounts to nearly 7 million tons and that of vegetables to approximately 7 million tons with approximately 4 million tons of potato production2. However, it is estimated that in Pakistan 35%3 of fruits & vegetables produced each year are lost because of poor harvest conditions. This loss if calculated approximately amounts to 4.9 million metric tons and its estimated local market value reaches somewhere near US $ 800 million. The major reasons for this loss are careless harvesting, rough handling, inadequate transportation, and storage facilities.
Pakistan’s Agricultural lands in Punjab, Sindh receive all four seasons and therefore throughout the year cultivation and harvesting of different vegetables, and fruits are scattered evenly across the year. The harvest calendar of various fruits and vegetables is given below
2 Pakistan Economic Survey, Ministry of finance
3 Sindh Board of investment
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8 POTENTIAL TARGET CUSTOMERS / MARKETS
Most of the existing local Cold Storage’s are constructed on locally developed
methods, which maintain a uniform temperature for all commodities stored. The goods
are not stored at their recommended relative storage temperatures and life, and
because of this, the quality of stored commodity is badly affected. Vegetables and
fruits require specialized post-harvest treatment, appropriate temperature and relative
humidity control for their proper & optimum storage, which most of the existing local
cold stores lack. Following are the potential customers of cold storage:
Growers Wholesalers and Traders
Importers and Exporters
Retailers and/or Hyper stores
9 PROJECT COST SUMMARY
A detailed financial model has been developed to analyze the commercial viability of this project. Various costs and revenue related assumptions along with results of the analysis are outlined in this section.
9.1 Project Economics
All the figures in this financial model have been calculated for estimated sales of Rs. -
35.28 million in the year one. The capacity utilization during year one is worked out at
50 % with 10 % increase in subsequent years up to the maximum capacity utilization
of 95 %.
The following table shows internal rate of return, payback period and net present value
of the proposed venture:
Table 9.1: Project Economics
Description Details
Internal Rate of Return (IRR) 16%
Payback Period (yrs.) 5.71
Net Present Value (Rs.) 41,436,370
9.2 Project Financing
Following table provides details of the equity required and variables related to bank
loan:
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Table 9.2: Project Financing
Description Details
Total Equity (100%) Rs.180,260,534
9.3 Project Cost
Following fixed and working capital requirements have been identified for operations of the proposed business:
Table 9.3: Project Cost
Description Amount Rs.
Capital Cost
Land (01 acre) 10,000,000
Building/Infrastructure 55,644,629
Machinery & equipment 103,640,950
Furniture & fixtures 448,150
Office vehicles 1,450,000
Office equipment 424,200
Pre-operating costs 2,823,000
Misc. & Contingency 1,716,079
Total Capital Cost 176,147,009
Working Capital
Equipment spare part inventory 2,000,000
Up-front Insurance Payment 613,525
Cash 1,500,000
Total Working Capital 4,113,525
Total Project Cost 180,260,534
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9.4 Space Requirement
The space requirement for the proposed Modified CA cold storage is approx. 01 acre
and estimated by considering various facilities including management office,
production hall, storage, open space, etc. Details of space requirement and cost
related to land & building is given below:
Table 9.4: Space Requirement
Description Estimated Area
(Sq.ft.)
Unit Cost (Rs.)
Total Cost (Rs.)
Office Block 1,000 1,400 1,400,000
Committee Room 500 1,400 700,000
Micro Lab, Lab & Office 600 1,400 840,000
Sorting & Grading Hall 10,000 1,400 14,000,000
Cold Storage 12,000 1,400 16,800,000
Machine Room 600 1,400 840,000
Lobby 480 1,400 672,000
Store 3,000 1,400 4,200,000
Dining 500 1,400 700,000
Kitchen 400 3,000 1,200,000
Masjid 500 1,400 700,000
Restrooms 600 3,000 1,800,000
Change Room 250 1,800 450,000
Guard Room 120 1,800 216,000
Total Building Cost 30,550 44,518,000
External Development
Pavement/driveway 8,000 80 640,000
Main Gate 1 100,000 100,000
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Grounds Landscaping 5,000 50 250,000
Weighbridge Platform 1 1,400,000 1,400,000
Overhead Water Tank (Gallons) 5,000 400 2,000,000
Underground Water Tank (Gallons) 10,000 70 700,000
Boundary Wall 836 3,400 2,842,400
Misc. & Contingency 3% 1,573,512
Design & Supervision Charges 3% 1,620,717
Total External Development 11,126,629
Total Building & External Development Cost
55,644,629
9.5 Machinery & Equipment Requirement
Plant, machinery and equipment for the proposed project are stated below:
Table 9.5: Machinery & Equipment
Description Quantity Unit Cost
(Rs.)
Total Cost (Rs.)
1.0 INSULATION CHAMBERS
1.01 Insulation material Polyurethane, CFC Free
20,585,000
1.02 Inter floor of ripening chambers 865,000
1.03 Assembling of panels, Inclusive of fitment of profiles, filing and caulking of silicon.
3,090,000
1.04 Sliding Doors 12 155000 1,860,000
1.05 Door for 40 feet container 1 125000 125,000
1.06 Door for Hino 2 70000 140,000
1.07 Humidification System 12 150000 1,800,000
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1.08 CO2 exhaust system with fresh air, Air to air heat exchanger including CO2 controller
12 600000 7,200,000
1.09 Ethylene Generator 4 325000 1,300,000
1.10 Dock for Hino 2 65000 130,000
1.11 Dock for 40 feet container 1 100000 100,000
2. REFRIGERATION SYSTEM OF COLD STORE
2.01 Condensing Unit (15 HP) 8 925000 7,400,000
2.02 Evaporator Unit 8 550000 4,400,000
2.03 Refrigeration system 8 150000 1,200,000
3. REFRIGERATION SYSTEM OF RIPENING CHAMBERS
3.01 Condensing Unit (15 HP) 4 1250000 5,000,000
3.02 Evaporator Unit 8 480000 3,840,000
3.03 Refrigeration system 4 250000 1,000,000
SUB TOTAL 60,035,000
Sales Tax 17%
10,205,950
TOTAL COST OF CA COLD STORAGE
70,240,950
B. SORTING & GRADING LINE
Feeder, Brush Washer, Drying, Sorting and Grading
10,000,000
Fork Lift 2 2200000 4,400,000
Generator 250KVA Turbo Type, 250KVA, 400 Volts, 50 Cycles, 1500 RPM, Power Factor 0.8
1 5,300,000 5,300,000
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Weigh Bridge 30 x 10 feet size, 60 tons capacity
1 1,800,000 1,800,000
Drums / Bins 14,000 850 11,900,000
Total 103,640,950
9.6 Furniture & Fixtures Requirement
Details of the furniture and fixture required for the project are given below:
Table 9.6: Furniture & Fixture
Description Quantity Unit Cost (Rs.)
Total Cost (Rs.)
Managers Tables along with side tables
2 20,000 40,000
Manager / Officers Chairs 2 7,500 15,000
Visitor Chairs 8 6,000 48,000
Officers Tables along with side tables 5 20,000 100,000
File Racks 2 15,000 30,000
Sofa Set 2 35,000 70,000
Split Air-conditioner 1.5 Ton 2 65,000 130,000
Misc. & Contingency 5% 15,150
Total 448,150
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9.7 Office Equipment Requirement
Following office equipment will be required for CA Cold Storage facility.
Table 9.7: Office Equipment
Description Quantity Unit Cost (Rs.)
Total Cost (Rs.)
Computers with LCD 2 75,000 150,000
Printer 1 20,000 20,000
Scanner 1 5,000 5,000
Networking Equipment & Accessories 150,000
Telephone Sets 8 2,000 16,000
Fax Machine 1 15,000 15,000
Water Dispenser 1 18,000 18,000
Electric Water Cooler 1 30,000 30,000
Misc. & Contingency 20,200
Total 424,200
9.8 Office Vehicle Requirement
Following office vehicle will be required for the project.
Table 9.8: Office Vehicle
Description Quantity Unit Cost (Rs.)
Total Cost (Rs.)
Car (1000 cc) 1 1,450,000 1,450,000
Total 1,450,000
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9.9 Human Resource Requirement
In order to run operations of CA Cold storage smoothly, details of human resources
required along with number of employees and monthly salary are recommended as
under:
Table 9.9: Human Resource Requirement
Description No. of Employees
Monthly Salary per
person (Rs.)
Monthly Salary (Rs.)
Manager Plant 1 75,000 75,000
Manager Finance & Admin 1 45,000 45,000
Cold Store Operator 2 20,000 40,000
Lifter Operator 2 18,000 36,000
Office Boy 1 14,000 14,000
Guard 2 14,000 28,000
Total 09 238,000
9.10 Utilities and other costs
An essential cost to be borne by the project is the cost of electricity and fuel. The
electricity expenses are estimated to be around Rs. 8,398,571 per year, whereas, fuel
expenses are estimated to be Rs.480,468 per year (for fork lift and burner). Revenue
Generation
Based on the capacity utilization of 50 % sales revenue during the first year of operations is estimated as under:
Table 9.10: Revenue Generation – Year 1
Description Rental Price Rs. (Incl Sorting and Grading) / kg /month
Rental Revenue (Rs.)
Fruits 06 35,280,000
Total 35,280,000
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10 CONTACT DETAILS
In order to facilitate potential investors, contact details of private sector Service Providers relevant to the proposed project be given.
10.1 Machinery Suppliers
Machinery Supplier - 1
Name of Supplier
/Organization Kold Kraft Refrigeration Ltd
Address Plot No 83-A, Sector 27 Korangi Industrial Area, Karachi
Phone Tel: +92 300-0302887 Fax Fax: +92-21-
35074858
E-mail [email protected]
Website www.koldkraft-refrigeration.com
Machinery Supplier - 2
Name of Supplier
/Organization
Frostec
Address Suite # 605, Ibrahim Trade Tower, Shahra-e-Faisal,
Karachi - Pakistan
Phone +92-21-34327620 Fax 92-21-34327619
E-mail [email protected]
Website www.frostecint.com
Machinery Supplier - 3
Name of Supplier
/Organization Helperco (Pvt) Limited
Address Room # 3, 3rd Floor Al-Hafeez Tower, Shahra-e-Faisal
Karachi-75530
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Phone 92-21-35660920-22 Fax
E-mail [email protected]
Website www.helpercopvtltd.enic.pk
10.2 Raw Material Suppliers
Raw Material Supplier
Name of Supplier
/Organization Wax (Polish) Al-Aziz Enterprises
Address 10-km,Lahore Road, Sargodha
Phone +92-300-9606642 Fax
10.3 Technical Experts / Consultants
Technical Experts / Consultants - 1
Name of Expert
/Organization Durrani Associates
Address Opposite Baqai University, Super Highway, Karachi
Phone 92-21-34410231 Fax
Technical Experts / Consultants - 2
Name of Expert
/Organization Dr. M. Aslam Pervez
Address Director Institute of Horticultural Sciences, Facility of
Agriculture, University of Agriculture Faisalabad
Phone +92-41-9201281 Fax
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Technical Experts / Consultants - 3
Name of Expert
/Organization Imtiaz Enterprises
Address 2 & 3, Karachi Market, New fruit Vegetable Market, Super
Highway, Karachi
Phone 92-21-36870451-3 Fax
Technical Experts / Consultants - 4
Name of Expert
/Organization
Pakistan Cold Chain Development Company
Address Address: 106 / 3 Block C, Model Town, Lahore
Post Code: 54700
Email [email protected]
11 USEFUL WEB LINKS
Links of Federal & Provincial Government, Semi Government and other (sector & Cluster based) Development organizations are to be given under this heading so to enable potential investors to get benefit from the services offered. Web links of various organizations are given as example however, links of only relevant organizations should be given;
Small & Medium Enterprises Development Authority
(SMEDA)
www.smeda.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
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Trade Development Authority of Pakistan (TDAP) www.tdap.gov.pk
Security 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
Punjab Small Industries Corporation www.psic.gop.pk
Sindh Small Industries Corporation www.ssic.gos.pk
Pakistan Horticulture Development and Export Company
(PHDEC) www.phdec.org.pk
Punjab Vocational Training Council (PVTC) www.pvtc.gop.pk
Technical Education and Vocational Training Authority
(TEVTA) www.tevta.org
Pakistan Readymade Garment Technical Training Institute www.prgmea.org/prgtti/
Livestock & Dairy Development Department, Government of
Punjab. www.livestockpunjab.gov.pk
Punjab Industrial Estates (PIE) www.pie.com.pk
Faisalabad Industrial Estate Development and Management
Company (FIEDMC) www.fiedmc.com.pk
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12 ANNEXURES
12.1 Income Statement
Calculations SMEDA
Income Statement
50% 60% 70% 80% 90% 95% 95% 95% 95% 95%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue 35,280,000 45,299,520 56,548,901 69,151,227 83,240,790 94,015,848 100,596,957 107,638,744 115,173,456 123,235,598
Cost of sales Per month/Kg
Ripening Cost of Orange 0.04 250,000 315,000 385,875 463,050 546,978 606,234 636,545 668,373 701,791 736,881
Ripening Cost of Apple 0.04 250,000 315,000 385,875 463,050 546,978 606,234 636,545 668,373 701,791 736,881
Labor Wages for Sorting & Grading 0.18 1,085,595 1,367,850 1,675,616 2,010,739 2,375,186 2,632,497 2,764,122 2,902,328 3,047,445 3,199,817
Production Labor 0.30 1,812,000 1,993,200 2,192,520 2,411,772 2,652,949 2,918,244 3,210,069 3,531,075 3,884,183 4,272,601
Machinery Maintenance 0.09 518,205 570,025 627,028 689,731 758,704 834,574 918,031 1,009,834 1,110,818 1,221,900
Electricity Cost 1.40 8,398,571 11,048,714 14,144,900 17,749,836 21,934,310 25,452,960 27,998,256 30,798,082 33,877,890 37,265,679
Fuel Cost 0.08 480,468 528,515 581,367 639,503 703,454 773,799 851,179 936,297 1,029,926 1,132,919
Total cost of sales 2.13 12,794,839 16,138,304 19,993,180 24,427,681 29,518,557 33,824,542 37,014,748 40,514,362 44,353,845 48,566,678
Gross Profit 22,485,161 29,161,216 36,555,721 44,723,547 53,722,233 60,191,306 63,582,209 67,124,382 70,819,611 74,668,920
64% 64% 65% 65% 65% 64% 63% 62% 61% 61%
General administration & selling expenses
Administration expense 0.17 ## 1,044,000 1,148,400 1,263,240 1,389,564 1,528,520 1,681,372 1,849,510 2,034,461 2,237,907 2,461,697
Administration benefits expense 0.01 52,200 57,420 63,162 69,478 76,426 84,069 92,475 101,723 111,895 123,085
Utilities (Electricity, Gas, Water etc) 0.07 419,929 552,436 707,245 887,492 1,096,715 1,272,648 1,399,913 1,539,904 1,693,895 1,863,284
Travelling expense 0.04 ### 214,200 235,620 259,182 285,100 313,610 344,971 379,468 417,415 459,157 505,072
Communications expense (phone, fax, mail, internet, etc.) 0.05 10% 285,600 314,160 345,576 380,134 418,147 459,962 505,958 556,554 612,209 673,430
Office vehicles running expense 0.04 0% 225,000 247,500 272,250 299,475 329,423 362,365 398,601 438,461 482,307 530,538
Office expenses (stationary, entertainment, janitorial services, etc.) 0.05 10% 285,600 314,160 345,576 380,134 418,147 459,962 505,958 556,554 612,209 673,430
Promotional expense 0.06 12% 342,720 325,584 309,305 293,840 279,148 265,190 251,931 239,334 227,367 215,999
Insurance expense 0.10 613,525 547,823 482,120 416,418 350,715 355,070 284,056 213,042 142,028 71,014
Professional fees (legal, audit, consultants, etc.) 0.02 5% 142,800 157,080 172,788 190,067 209,073 229,981 252,979 278,277 306,104 336,715
Depreciation expense 2.25 13,523,561 13,523,561 13,523,561 13,523,561 13,523,561 13,700,609 13,700,609 13,700,609 13,700,609 13,700,609
Amortization of pre-operating costs 0.09 564,600 564,600 564,600 564,600 564,600 - - - - -
Amortization of Contingency Cost 0.03 171,608 171,608 171,608 171,608 171,608 171,608 171,608 171,608 171,608 171,608
Miscellaneous expense 0.05 285,600 314,160 345,576 380,134 418,147 459,962 505,958 556,554 612,209 673,430
Subtotal 3.03 18,170,943 18,474,112 18,825,789 19,231,603 19,697,841 19,847,768 20,299,024 20,804,495 21,369,505 21,999,912
Operating Income 4,314,217 10,687,104 17,729,931 25,491,943 34,024,392 40,343,538 43,283,185 46,319,887 49,450,107 52,669,009
Earnings Before Interest & Taxes 4,314,217 10,687,104 17,729,931 25,491,943 34,604,392 40,343,538 43,283,185 46,319,887 49,450,107 52,669,009
Subtotal - - - - - - - - - -
Earnings Before Tax - 4,314,217 10,687,104 17,729,931 25,491,943 34,604,392 40,343,538 43,283,185 46,319,887 49,450,107 52,669,009
Tax 862,843 2,137,421 3,545,986 5,098,389 6,920,878 8,068,708 8,656,637 9,263,977 9,890,021 10,533,802
NET PROFIT/(LOSS) AFTER TAX 3,451,374 8,549,683 14,183,945 20,393,555 27,683,513 32,274,830 34,626,548 37,055,909 39,560,085 42,135,207
Pre-Feasibility Study Modified CA Cold Storage
June 2017 21
12.2 Balance Sheet
Calculations SMEDA
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 1,500,000 17,677,024 40,194,427 66,945,244 96,964,593 124,005,195 151,492,117 177,791,239 203,206,151 227,817,686 254,829,462
Accounts receivable 2,899,726 3,311,487 4,185,552 5,165,759 6,262,686 7,284,519 7,997,786 8,557,632 9,156,666 9,797,632
Equipment spare part inventory 2,000,000 2,100,000 2,205,000 2,315,250 2,431,013 2,552,563 2,680,191 2,814,201 2,954,911 3,102,656 -
Pre-paid insurance 613,525 547,823 482,120 416,418 350,715 355,070 284,056 213,042 142,028 71,014 -
Total Current Assets 4,113,525 23,224,572 46,193,035 73,862,463 104,912,079 133,175,513 161,740,884 188,816,269 214,860,721 240,148,022 264,627,095
Fixed assets
Land 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000
Building/Infrastructure 55,644,629 52,862,398 50,080,166 47,297,935 44,515,703 41,733,472 38,951,241 36,169,009 33,386,778 30,604,546 27,822,315
Machinery & equipment 103,640,950 93,276,855 82,912,760 72,548,665 62,184,570 51,820,475 41,456,380 31,092,285 20,728,190 10,364,095 -
Furniture & fixtures 448,150 403,335 358,520 313,705 268,890 224,075 179,260 134,445 89,630 44,815 -
Office vehicles 1,450,000 1,160,000 870,000 580,000 290,000 2,335,240 1,868,192 1,401,144 934,096 467,048 -
Office equipment 424,200 381,780 339,360 296,940 254,520 212,100 169,680 127,260 84,840 42,420 -
Total Fixed Assets 171,607,929 158,084,368 144,560,806 131,037,245 117,513,683 106,325,362 92,624,752 78,924,143 65,223,533 51,522,924 37,822,315
Intangible assets
Pre-operation costs 2,823,000 2,258,400 1,693,800 1,129,200 564,600 - - - - - -
Legal, licensing, & training costs 1,716,079 1,544,471 1,372,863 1,201,256 1,029,648 858,040 686,432 514,824 343,216 171,608 -
Total Intangible Assets 4,539,079 3,802,871 3,066,663 2,330,456 1,594,248 858,040 686,432 514,824 343,216 171,608 -
TOTAL ASSETS 180,260,534 185,111,811 193,820,505 207,230,164 224,020,010 240,358,914 255,052,068 268,255,235 280,427,470 291,842,554 302,449,409
Current liabilities
Accounts payable 1,227,335 1,511,081 1,837,323 2,211,692 2,640,524 3,005,384 3,279,107 3,578,861 3,907,183 3,999,095
Short term debt - - - - - - - - - - -
Other liabilities
Total Current Liabilities - 1,227,335 1,511,081 1,837,323 2,211,692 2,640,524 3,005,384 3,279,107 3,578,861 3,907,183 3,999,095
Other liabilities
Deferred tax 862,843 3,000,264 6,546,251 10,364,095 10,364,095 8,291,276 6,218,457 4,145,638 2,072,819 -
Total Long Term Liabilities - 862,843 3,000,264 6,546,251 10,364,095 10,364,095 8,291,276 6,218,457 4,145,638 2,072,819 -
Shareholders' equity
Paid-up capital 180,260,534 180,260,534 180,260,534 180,260,534 180,260,534 180,260,534 180,260,534 180,260,534 180,260,534 180,260,534 180,260,534
Retained earnings 2,761,099 9,048,626 18,586,057 31,183,689 47,093,762 63,494,874 78,497,137 92,442,437 105,602,018 118,189,780
Total Equity 180,260,534 183,021,633 189,309,160 198,846,591 211,444,223 227,354,296 243,755,407 258,757,671 272,702,971 285,862,552 298,450,314
TOTAL CAPITAL AND LIABILITIES 180,260,534 185,111,811 193,820,505 207,230,164 224,020,010 240,358,914 255,052,068 268,255,235 280,427,470 291,842,554 302,449,409
Liabilities & Shareholders' Equity
Assets
Pre-Feasibility Study Modified CA Cold Storage
June 2017 22
12.3 Cash Flow Statement
Calculations SMEDA
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 3,451,374 8,549,683 14,183,945 20,393,555 27,683,513 32,274,830 34,626,548 37,055,909 39,560,085 42,135,207
Add: depreciation expense 13,523,561 13,523,561 13,523,561 13,523,561 13,523,561 13,700,609 13,700,609 13,700,609 13,700,609 13,700,609
amortization of pre-operating costs 564,600 564,600 564,600 564,600 564,600 - - - - -
amortization of training costs 171,608 171,608 171,608 171,608 171,608 171,608 171,608 171,608 171,608 171,608
Deferred income tax 862,843 2,137,421 3,545,986 3,817,844 - (2,072,819) (2,072,819) (2,072,819) (2,072,819) (2,072,819)
Accounts receivable (2,899,726) (411,761) (874,064) (980,207) (1,096,927) (1,021,834) (713,267) (559,845) (599,034) (640,967)
Equipment inventory (2,000,000) (100,000) (105,000) (110,250) (115,763) (121,551) (127,628) (134,010) (140,710) (147,746) 3,102,656
Advance insurance premium (613,525) 65,703 65,703 65,703 65,703 (4,355) 71,014 71,014 71,014 71,014 71,014
Accounts payable 1,227,335 283,746 326,242 374,370 428,831 364,861 273,723 299,754 328,322 91,912
Cash provided by operations (2,613,525) 16,867,298 24,779,560 31,397,331 37,815,271 41,149,282 43,360,641 45,923,407 48,525,521 51,012,040 56,559,221
Financing activities
Issuance of shares 180,260,534 - - - - - - - - - -
Cash provided by / (used for) financing activities 180,260,534 - - - - - - - - - -
Investing activities
Capital expenditure (176,147,009) - - - - (2,335,240) - - - - -
Cash (used for) / provided by investing activities (176,147,009) - - - - (2,335,240) - - - - -
NET CASH 1,500,000 16,867,298 24,779,560 31,397,331 37,815,271 38,814,043 43,360,641 45,923,407 48,525,521 51,012,040 56,559,221
Cash balance brought forward 1,500,000 17,677,024 40,194,427 66,945,244 96,964,593 124,005,195 151,492,117 177,791,239 203,206,151 227,817,686
Cash available for appropriation 1,500,000 18,367,298 42,456,584 71,591,758 104,760,515 135,778,635 167,365,836 197,415,524 226,316,760 254,218,190 284,376,907
Dividend 690,275 2,262,156 4,646,514 7,795,922 11,773,440 15,873,718 19,624,284 23,110,609 26,400,505 29,547,445
Cash balance 1,500,000 17,677,024 40,194,427 66,945,244 96,964,593 124,005,195 151,492,117 177,791,239 203,206,151 227,817,686 254,829,462
Cash carried forward 1,500,000 17,677,024 40,194,427 66,945,244 96,964,593 124,005,195 151,492,117 177,791,239 203,206,151 227,817,686 254,829,462
Pre-Feasibility Study Modified CA Cold Storage
June 2017 23
13 KEY ASSUMPTIONS
13.1 Operating Cost Assumptions
Description Details
No. of Working Days in One Year 360
No. of Working Hours in One Day 24
13.2 Production Cost Assumptions
Description Details
Starting Storage Capacity Utilization 50%
Maximum Storage Capacity Utilization 95%
Capacity Utilization Growth Rate / Yr. 10%
13.3 Revenue Assumptions
Description Details
Rental Price /kg/month (Incl. sorting & grading) Rs. 06
Sale Price Growth Rate 07%
13.4 Financial Assumptions
Description Details
Debt 0%
Equity 100%
Required Rate of Return on Equity 10%