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  • Full Name Full Name Comment goes here.
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  • good day Mr Aadil Shekh

    as i am diwakar saini, manufacturer of ice burge of weight appox 45 to 50 kg per iceburge.

    we requir order to sell our ice burge at appropriate price.

    if possibe aid our business as your too.

    from
    diwakar Saini
    8266026667
    8800347755
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  • Hey Aadil Shaikh, this was my project... u did this very wrong...it was on real location based and my personal project.. did u asked me to update it publicly... its a request please remove it...
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  • good document
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  • tnx dear
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Ice factory Ice factory Document Transcript

  • 1 IN THE NAME OF THE MOST BENEFICENT AND MERCIFULALLANA INSTITUTE OF MANAGEMENT STUDIES 1
  • 2 ONSUPERVISED BY:GROUP MEMBERS: Mukhtar Kasmani 23ALLANA INSTITUTE OF MANAGEMENT STUDIES 2
  • 3 MMS FINANCE (4 th semester)ALLANA INSTITUTE OF MANAGEMENT STUDIES 3 View slide
  • 4 OUR PARENTS AND TEACHERS ALL OUR WELL WISHERS AND SPECIALYALLANA INSTITUTE OF MANAGEMENT STUDIES 4 View slide
  • 5 Almighty ALLAH is the entire source of knowledge and wisdom endowed to mankindand His dearest Nabi, MUHAMMAD (PBUH) is a light of guidance and knowledge forhumanity as a whole.Everyone has a long list of individuals to whom he is indebted. We are no exception. We arefirstly, with humble gratitude bow our heads before Almighty ALLAH for giving us strength,courage, patience and inspiration, and enable us to complete this project. To work for thisproject, was a difficult task, because it is about “Ice Manufacturing”We acknowledge with thanks and admiration, our dependence on all of our respondents ontheir nice co-operation and giving us their loyal time. We feel Great pleasure and honors toexpress our gratitude from the citadel of hearts to our respected and dignified instructor SIR.JAVAID IQBAL Without whose guidance it would have been difficult for us to achieve Our objectives He provide us, his in-depth approach of the subject “Project Management“And taught us a lot of tell analysis techniques which we have applied during data analysis. His sympathetic behavior has an ever lasting impression on the page of our memory. THANKS:ALLANA INSTITUTE OF MANAGEMENT STUDIES 5
  • 6Sr. No Description Page # 1 Executive summary 7-10 . 2 Introduction 11 . 3 Market Analysis 11 . 4 Technical Analysis 12-17 . 5 Personnel Analysis 18 . 6 Financial Analysis 19-25 . 7 SWOT Analysis 25-26 . 8 Conclusion & Recommendations 26 .ALLANA INSTITUTE OF MANAGEMENT STUDIES 6
  • 7The Project:Most of areas of India have long duration of summer due to which demand for ice ishigh for more than six months of the year. As in India demand for ice is more due toGOLAWALA during summer. Other growing markets for ice plant are industries linkedto FOOD PRODUCTS i.e. fish, dairy, packaged food, restaurants etc. With thisgrowing demand a large number of ice plants are operating in the country.Harnai is a small town next to Dapoli city of Ratnagiri state in India. My proposedproject is useful and beneficial in this town. Food products industries like fish, dairy,packaged food, restaurants are linked to this industry. Mainly it produces for the “ColdStorage” purpose. So we generate the idea to set up an ice plant according to therequirements of the people of this town as this town has a beach wherein the fishproducts are delivered daily in tons of volumes. Depending on the facts this area ofopportunity has not been exploited properly. We primarily focused on developing anidea to set up a ice manufacturing plant for business purpose or to be known as“X ICE PLANT”.This project is related to setting up an ice plant of 50-tons capacity per day to cater tothe needs of the associations such as fish sellers, hotels, restaurants, dairy, etc. Theproposed project will manufacture ice blocks varying from 130 kg to 150 kg in weight.ALLANA INSTITUTE OF MANAGEMENT STUDIES 7
  • 8Ice plant requirementsSpaceModern icemakers are compact in comparison with block ice equipment, but it is notalways possible to compare directly the space occupied by different types; forexample they may not be available in the same unit sizes. However some guidanceon the space requirements for icemakers with a nominal capacity of 50 tons a day isgiven in Table 1.Space required for an icemaker producing 50tons/dayType of ice Floor area m2 Height mBlock 190 (5000 sq ft approx) 5.0Rapid Block 30 3.5Tube 3.3 6.6Flake 2.7 3.7PowerAverage power and peak power requirements may be different, and both have to beconsidered at the planning stage. The average power relates to the energy consumedin making a ton of ice, and this is important in calculating operating cost. Peak poweris important to the designer since it will determine what electrical supply is required,and may also affect operating cost if a peak demand factor is applicable.The energy required to make a tons of ice is not constant. It varies widely dependingon a number of factors, the most important of which areType of ice unitsOperating temperatureMake-up water temperatureCooling water temperatureAir temperatureSize of plantUtilization of plantMethod of refrigerationEnergy consumption figures quoted by manufacturers for unspecified operatingconditions should be used only as a general guide. The values given in table 2 showhow energy requirements can increase considerably in warm climates.ALLANA INSTITUTE OF MANAGEMENT STUDIES 8
  • 9Energy required to manufacture ice kWh/ton of ice madeType of ice Temperate area Tropical areaBlock 40-50 55-70Flake 50-60 70-85Tube 40-50 55-70The values in Table 2 are for icemaker and refrigeration machinery only. Someadditional allowance must be made for conveyors, crushers and other equipment.WaterIn addition to water for making ice, water may be required for cooling, as in arefrigeration plant condenser, or for heating, as in a warm water defrosting system.The amount of water required for making ice is roughly equal to the amount of icebeing produced plus some allowance for wastage and for prevention of buildup ofsolids in the water circulating system.Fresh water for making ice for use with fish must satisfy the requirements for drinkingwater. In addition, the chemical composition of water for making ice must meet theequipment manufacturers requirements; hard water containing excessive amounts ofsolids may foul the icemaker and may also yield a soft wet ice. On the other handpure water may cause problems, particularly in flake ice plants, because the ice stickshard to the drum; the remedy is to fit a dosing device that puts 200-500 g salt intoeach tons of water to improve release of the ice without making the ice detectablysalty when used on fish.It is inadvisable to use shell and tube condensers in a refrigeration system wherecooling water is run to waste, unless a plentiful supply of cheap water is available,independent of the domestic drinking water supply; otherwise water costs may beprohibitive, since 15 tons of cooling water at 10°C or 60 tons at 25°C are required foreach tons of ice produced. Other factors can affect cooling water consumption, andmanufacturers precise figures should be used at the detailed planning stage.Air cooled condensers can be used on small plants, but for most commercialinstallations evaporative condensers, or shell and tube condensers with a coolingtower, are more likely to be supplied. Evaporative condensers and cooling towercooling systems normally use less than 1/2 tons of water for each tons of ice, plussome small additional allowance if an overspill is necessary to prevent build up ofsolids in the recirculated water.ALLANA INSTITUTE OF MANAGEMENT STUDIES 9
  • 10Block iceTapered rectangular metal cans filled with water are immersed in a tank containingrefrigerated sodium chloride brine. The dimensions of the can and the temperature ofthe brine are usually selected to give a 24 hour production time, and batches of cansare emptied and refilled in sequence during that period. Ice block weight can rangefrom 12 to 150 kg depending on requirements; 150 kg is regarded as the largest sizeof block one man can conveniently handle. A block ice plant requires continuousattention and is labour intensive. The icemaker and the store require a good deal offloor space and impose heavy loads on the building structure. For these reasons blockice plants are going out of use, and more modern automatic plants are replacingthem.Location:We would set up our ice plant 10-15 minutes walking distance from Harnai Beach,Harnai, Taluka-Dapoli, Dist-Ratnagiri - 415713. As ice is not easily available in thisarea and people of this area bears a lot of transportation expenses to get ice, so weare selecting this area to set up our ice plant.ALLANA INSTITUTE OF MANAGEMENT 10 STUDIES
  • 11 Years 2013 2014 2015 2016 2017 2018 Capacit 9600 1020 1080 1140 1200 12000 y 0 0 0 0 (In tons)Product’s Range and Plant Capacity:We will be producing block ice only. The proposed project has a capacity of producing350 ice blocks on the basis of 2 shifts of 12 hours. The maximum capacity of plant is12000 tons per annum. Estimated capacity during:Market Entry Timing:The ice plant should be started up when the season begins in mid Sep and closedwhen it end up in mid June. The peak season is of four months i.e. from March to midJune. The rest of the period is moderate season. The best time to enter into thisbusiness is in the month of March.Raw Material Requirement:ALLANA INSTITUTE OF MANAGEMENT 11 STUDIES
  • 12The basic raw material required for producing ice blocks is water, common salt. Theseraw materials are readily available in the local market. Replenishments needed duringmaintenance are ammonia gas and compressor oil.Machinery Requirements:The main equipment required for running the ice plant is compressor, capacitor,condenser, and electric motors, power etc.Name of civil contractors:XXXXMachinery Suppliers:XXXX.ALLANA INSTITUTE OF MANAGEMENT 12 STUDIES
  • 13Project Engineering:The machinery of the proposed project will be purchased from any experiencedengineer or a specialized ice making machine manufacturer.Implementation Stage:Total time period for the starting of project is estimated to be 1 year from the date ofapproval of finance.Sponsors:The sponsors to this project of Ice Manufacturing Plant are a group of two highlyenthusiastic people who are committed to providing ice at fair prices with equallyperfect services. The sponsors of the project are professionally qualified in their fieldsnamely Mukhtar Kasmani (MMS Finance) resident of Mumbra Thane, VinodChaudhary (Pharmacist) resident of Mumbra Thane. The overall management andcontrol of the firm will be actively managed by its partners who will actively participatein management decisions and control the affairs of the firm.Cost of the Project:The total cost of the project is estimated to be Rs. 10786178. The fixed cost of theproject is Rs. 10511478 which are financed locally. The amount of initial permanentnet working capital required is Rs. 274700.Means of Finance:Forty Percent (40%) of the estimated cost of the proposed project will be obtainedthrough loan and the remaining 60%will be contributed by the Owners.Financial Plan:The total cost of the project is estimated to be Rs (10786178). Forty percent Rs(4314471)of the estimated cost of the proposed project will be obtained through loanfrom Habib Bank Ltd and the remaining 60% Rs (6471707) will be contributed by theowners.Implementation Schedule:ALLANA INSTITUTE OF MANAGEMENT 13 STUDIES
  • 14 S.NO ACTI V I T IES MONTH YEAR 1 Order for Local Machinery November 2009 2 Arrival of Local Machinery at site December 2009 Construction of Building and Civil 3 Works: Start September 2009 Complete October 2009 4 Erection &Installation of Machinery Start December 2009 Complete January 2010 5 Order for Raw Materials February 2010 6 Start of Commercial Production March 2010Financial Ratios:The Debt Equity ratio (67%),(39%) , (20%), (8%) Net Profit Margin ratio (39%) (34%)(43%) (42%) for the given three years (2010) (2011) (2012) (2013) respectively. Icemanufacturing Plant’s financial position is significantly strong as compared to theindustry because it earns a huge profit and short term liquidity position is very good.So ice Plant has no bankruptcy chances.ALLANA INSTITUTE OF MANAGEMENT 14 STUDIES
  • 15 1) Market AnalysisTarget Customers: The target customers for ice plant can be divided into two categories: • Domestic users, such as ice cream sellers. • Second category is institutional buyers, who buy in bulk, such as exporting organizations, hotels, restaurants, fish sellers, dairy plants etc.Description of Market:Institutional buyers buy the bulk of the block ice production, in institutions related to foodindustry. Business sectors, which utilize ice in the country, include the following:For the protection of fish, Meat and also for Dairy Plants.Other potential institutional buyers of ice are bakeries, confectioners, hotels which buy iceblocks in bulk. There are more than 500 boats in Harnai Beach where as approximately 100boats arrive daily to deliver fishes. One boat requires minimum 15-20 blocks of ice as thefishing activity continues for around 1 week to even 1 month.Present Demand:In market our production’s demand is more than 1200 ice blocks per day. Which is alreadyserved by our competitors, but we are having location advantage and we can take over themarket.Demand Supply Gap:Our production of ice blocks is 350 ice blocks per day and there is demand of 1200 ice blocksper day. So there is demand supply gap of 850 blocks.Ex-factory price:Our whole sale price is Rs. 180 per ice blockALLANA INSTITUTE OF MANAGEMENT 15 STUDIES
  • 16Retail price:Our retail price is Rs. 200 per ice block.Distribution Channel:Ice blocks are supplied to supplier through trucks, tempo, bullock cart etc.ALLANA INSTITUTE OF MANAGEMENT 16 STUDIES
  • 17 2) Technical Analysis:Block ice is the most popular type of ice sold for a variety of reasons. It melts more slowlythan other types of ice and thus lasts longer. It can be placed in open truck with only atarpaulin to protect it from the elements and shipped to a location of four hours away.Its rectangular shape makes it easy to stack of up to 15 meters and store large amounts. Blockice has merits of easy to transport and separate as well. Other types of ice have the tendency tofreeze into a solid mass, making it difficult to work with.Manufacturing Process: Production Process Flow Cleaning of Sheet Steel Ice Containers Placing of Containers in Water Tank containing Nacl Filling of Sheet Steel Ice Containers with water while vertically floating in Nacl Tank Temp Reduced to –17°C to –20°C Extracting of Ice Blocks from Sheet Steel Containers Movement of Ice Blocks by hooks Delivery of Ice BlocksALLANA INSTITUTE OF MANAGEMENT 17 STUDIES
  • 18Flow Chart: Ice cans are placed in can grids and moved to beneath the filling tank which automatically fillseach can with proper level of pre-cooled water and then stop. Filtered water must be used tomake ice intended for human consumption.The cans are then hoisted and carried to the brine tank and immersed inside. The brine, whichis a calcium chloride solution kept at a temperature of -10 degree, is constantly circulated byagitator in order to keep the temperature consistent throughout the tank.Air is blown into the center of the can to induce a swirling motion. This causes any impuritiesand air bubbles in the water to be collected in the center of cans. Prior to finish freezing, thiscore is removed by a suction pump and replaced with fresh pre-cooled water.The time required for the water to be frozen varies according to the size of cans being used,150lbs. block requires 24 hours, 300 lbs. Takes 48 hours.When the ice has completely formed, the grids are lifted up from the brine tank and moved toplace in the thawing tank. Using the warm water, which heats the can until the ice allowed tobe slid out. The block ice is then removed from the can by a can dumper.ALLANA INSTITUTE OF MANAGEMENT 18 STUDIES
  • 19The empty cans are returned to filling tank for next ice making cycle. The ice is moved to icestorage and stacked by an ice stacker, or it can be delivered to customer right away uponrequested.List of Machinery:Description Quantity Cost/Unit TOTALAmmonia Compressor (8x8) , Driven Wheel 1 300,000 300,000Ammonia Condensor Atmosphere type with 2" pipe 1200ft 8 56,400 451,200Electric Motor 100 H.P.1450 RPM 1 95,000 95,000Brine Tank for 720 Ice cans, 4mm local made 1 25,000 25,000Cooling Coil V-type 4" pipe & 1800 ft 1 318,000 318,000Brine Agitator 18" Fan Metal 1 20,000 20,000Accumulator for parallel supply of ammonia 1 10,000 10,000Crane & Trolley with Railing Channel & Girder 1 40,000 40,000Ammonia Valves for Complete Plant 1 16,000 16,000Ammonia Pipes for Complete Plant 1 40,000 40,000Oil Separator Buffer Type 1 16,000 16,0004 gauge Suction, Discharge, Oil Pressure 4 1,000 4,000Wood work for Ice Cans, Tank Cover 400 750 300,000Ice Cans of 1.5 mm British Gauge 400 2,600 1,040,000Nuts, Bolt etc. 1 15,000 15,000Receiver Fittings with all Safety Measure AmmoniaInspection 1 45,000 45,000Bends, Union, Nipples, Tee & flange etc. 1 6,550 6,550Rubber pipes, Brass Valves 1 18,000 18,000Water Fitting Complete 1 30,000 30,000Electric Motor 7.5" 2 16,000 32,000Switch Gins Starters & Switch board with local Cable 1 95,000 95,000Centrifugal Pump 2.5"x3" 1 25,000 25,000Erection Charges of the Plant 1 60,000 60,000Grand Total 3,001,750ALLANA INSTITUTE OF MANAGEMENT 19 STUDIES
  • 20Cooling coil Gas transfer pipe Receiver Cool water pump Condenser Raw water pumpALLANA INSTITUTE OF MANAGEMENT 20 STUDIES
  • 21Other EquipmentOther Equipment Details Quantity Cost/Unit TOTALGenerator 100 KVA (Engine Bus) 1 175,000 175,000Transformer 100 KVA 1 400,000 400,000Water Bore Diameter 3” – 4” 1 200,000 200,000Total Equipment Cost 775,000Furniture & FixtureDescription Qty Cost/Unit Total CostTables 3 5,000 15,000Chairs 12 1,500 18,000Fans 4 1,800 7,200Lights 12 350 4,200Computer 1 20,000 20,000Telephone 1 2,500 2,500Total Furniture & Fixtures 66,900Office VehicleDescription Qty Cost/Unit Total CostSuzuki Pick-up 1 500,000 500,000Motorcycle (Honda 70) 1 58,000 58,000Bicycle (Chinese) 1 4,000 4,000Total Vehicle Cost 562,000LAND & BUILDING REQUIREMENTDescription Land CostLand Price Per Kanal 4,000,000Total Land Requirement (Sq . ft) 4,500Total Land Required in Kanals 1Total Land Cost 4,000,000ALLANA INSTITUTE OF MANAGEMENT 21 STUDIES
  • 22Input Requirement:The basic raw material required for producing ice blocks is water, common salt. These rawmaterials are readily available in the local market. Replenishments needed during maintenanceare ammonia gas and compressor oil.Raw MaterialDescription 2,010 2,011 2,012 2,013Ammonia consumption @ Rs. 26 21,840 24,960 28,080 31,200Nacl consumption @ Rs. 85 5,950 6,800 7,650 8,500Compressor oil for Rs. 19,600 22,400 25,200 28,000 TOTAL 47,390 54,160 60,930 67,700Factory overhead:a) FIXED COSTS-Power KW 600 10 72,000-Insurance @ 0.50% on Fixed Assets 32,557-Repairs &Maintenance:- Machinery @ 2.34% installed cost 70,241- Building @ 1% construction cost 16,720- Vehicles @ 5% of cost 28,100Total Fixed cost 219,618b) VARIABLE COSTPower KW 25000 10 KW/Month 1,500,000GAS 6 40000 Rs. 240,000 Total 1,740,000ALLANA INSTITUTE OF MANAGEMENT 22 STUDIES
  • 23Water and Gas:Equipment detail unit Cost/unit Total costWater Bore Diameter 3” – 4” 1 200,000 200,000GAS 6 40000 240,000Electricity: 10% PER ANNUM. 2010 2011 2012 2013Direct Electricity 1,500,000 1,650,000 1,815,000 1,996,500Fixed Electricity Expense 72,000 79,200 87,120 95,832Technology involved:Technology/Process OptionsThe machinery used for the ice plant is local. It includes compressor, condenser, water tanksuitable for 350-700 ice cans, brine agitator, accumulator for parallel supply of ammonia, craneand trolley, oil separator, ice cans of size 11” x 22” x 48”, electric motor 75 HP etc.Merits & demerits of a particular technologyThe local machinery is readily available in the market at a very reasonable price. One of thebenefits of using locally manufactured machinery is availability of spare parts and it’s easier tofind operators to operate these machines.Machine MaintenanceThe maintenance process starts after mid of July. Normally, it takes one month for theoverhauling of plant, during which the plant is closed for one month.ALLANA INSTITUTE OF MANAGEMENT 23 STUDIES
  • 24 3) Personnel analysis:Factory staff:S.NO Type of Staff Number Basic salary Total salaries required per Person, per year per month1 Tank man 6 5,000 1800002 Machine 1 6000 36,000 OperatorADMINISTRATION AND GENERAL STAFFDescription Qty Salary Monthly Annual Salary CostAccounts Officer 1 7,000 7,000 42,000Security Guard 1 6,000 6,000 36,000Driver 2 5,000 10,000 60,000Office Boy 1 3,000 3,000 18,000TotalAdministrativeExpenses 156,000ALLANA INSTITUTE OF MANAGEMENT 24 STUDIES
  • 254) Financial analysis:Cost of ProjectDescription LOCAL FRGN TOTALLand Cost 4,000,000 0 4,000,000Building/Infrastructure 1,672,000 0 1,672,000Machinery & Equipment 3,001,750 0 3,001,750Office Equipment 775,000 0 775,000Furniture & Fixture 66,900 0 66,900Vehicle 562,000 0 562,000Pre-operating Costs 433,828 0 433,828Total Capital Expenditure 10,511,478 0 10,511,478Working CapitalCash 200,000 0 200,000Raw Material Inventory 67,700 0 67,700Equipment Spare parts Inventory 7,000 0 7,000Total Working Capital 274,700 0 274,700 TOATL COST OF THEPROJECT: 0 10,786,178 ====== ====== ====== Means of Finance:Description Percentage Amount in RsDebt 40% 4,314,471Equity 60% 6,471,707 TOTAL DEBT & EQUITY 10,786,178 ======ALLANA INSTITUTE OF MANAGEMENT 25 STUDIES
  • 26 Sponsors stake: 60% Requirement of Initial Working CapitalA) CURRENT ASSETS AmountCash in Bank 200,000Raw Material Inventory 67,700Machine Spare parts Inventory 7,000Accounts Receivable 0Total Assets 274,700B) Current LiabilitiesAccounts Payable 0Total Current Liabilities: 0INITIAL NET WORKING CAPITAL (A -B) 274,700 Assumptions underlying financial statements: ESTIMATED INCOME STATEMENTSFor the year ending Sept. 30, 2011 2012 2013Efficiency Assumed : 80% 90% 100%SALES 12,600,000 14,175,000 15,750,000COST OF GOODS SOLD :Raw Material Cost 54,160 60,930 67,700Direct Labor (Production Staff) 237,600 261,360 287,496Direct Electricity 1,650,000 1,815,000 1,996,500GAS 264,000 290,400 319,440Total 2,205,760 2,427,690 2,671,136GROSS PROFIT 4,194,240 4,772,310 5,328,864 ALLANA INSTITUTE OF MANAGEMENT 26 STUDIES
  • 27OPERATING EXPENSESAdministration Staff 171,600 188,760 207,636Machine Maintenance Cost 70,000 70,000 70,000Fixed Electricity Expense 79,200 87,120 95,832Communication Expense (Telephone,Fax, Internet etc.) 33,000 36,300 39,930Depreciation expense 711,798 711,798 711,798Amortization of pre-operating costs 43,383 43,383 43,383Selling Expenses 66,000 72,600 79,860 Total Operating Expenses 237,600 261,360 287,496Operating Income (Earning BeforeInterest & Taxes) 3,956,640 4,510,950 5,041,368Interest expense on long term debt 604,026 604,026 604,026Earning Before Taxes 3,352,614 3,906,924 4,437,342Taxes 40% 838,154 976,731 1,109,336Net Profit After Taxes 2,514,461 2,930,193 3,328,007 ESTIMATED BALANCE SHEETS As on Sept. 30, 2010 2011 2012 2013 CURRENT ASSETS Cash in Bank 274700 2419639 4619084 7395168 Raw Material Inventory 54160 60930 67700 Machine Spareparts Inventory 7000 7000 7000 Accounts Recievable 0 0 0 Total Current Assets 274700 2480799 4687014 7469868 FIXED ASSETS Land Cost 4000000 4000000 4000000 4000000 Building & Infrastructure 1672000 1504800 1337600 1170400 Machinery & Equipment 3001750 2551488 2101225 1650963 Other Equipment 775000 713840 707070 700300 Furniture & Fixtures 66900 56865 46830 36795 Vehicle 562000 477700 393400 309100 Total Fixed Assets 10077650 9304693 8586125 7867558 INTANGIBLE ASSETS ALLANA INSTITUTE OF MANAGEMENT 27 STUDIES
  • 28Pre-Operational Costs 433828 390445 347063 303680Total Intangible Assets 433828 390445 347063 303680Total Assets: 10786178.3 12175937 13620202 15641105 ===== ==== ===== ===== = == = =LIABILITIES & EQUITYCurrent LiabilitiesAccounts Payable 0 0Current maturity of long termloan 539309 539309 539309Total Current Liabilities: 0 539309 539309 539309OTHER LIABILITIESLong-term Liabilities 4314471 3235853 2157236 1078618Total Long-term Liab.: 4314471 3235853 2157236 1078618SHAREHOLDERS EQUITYPaid-up Capital 6471706.98 6471707 6471707 6471707Retained Earnings 1929067 4451950 7551471Total Equity: 6471706.98 8400774 10923657 14023178Total Liab. & Equity: 10786178.3 12175937 13620202 15641105 ==== ===== ===== == = = ESTIMATED CASH FLOWSALLANA INSTITUTE OF MANAGEMENT 28 STUDIES
  • 29For the year ending Sept. 30, 2010 2011 2012 2013ALLANA INSTITUTE OF MANAGEMENT 29 STUDIES
  • 30 Operating activities Net profit 2572090 3363843 4132695 Add: Depreciation expense 711798 711798 711798 Amortization of pre-operating costs 43383 43383 43383 Other Resources 0 0 0 Accounts payable 0 0 0 equity 4314471 Long term Loan 6471707 Total 10786178 3327270 4119024 4887875 Uses Fixed Asset 10077650 Priliminary Exp. 433828 Long term Loan 539309 1078618 1078618 Repayment of:. Financial Exp. 643022.4738 840961 1033173.745 Profit Distribute Inc/(dec) in A/R 0 Total 10511478 1182331 1919579 2111792 Cash inflow / Outflow 274700 2144939 2199445 2776084 Balance Opening 274700 2419639 4619084 Balance Closing 274700 2419639 4619084 7395168 Loan Repayment Schedule Habib BankName of the Bank LimitedAmount of loan 4,314,471Date of sanction of loan 1/1/2009 ALLANA INSTITUTE OF MANAGEMENT 30 STUDIES
  • 31Date of disbursement ofloan 3/31/2009Payment of mark Quarterlyup/profit/interest InstallmentsPayment of participle Half Yearly six months afteramount the commercial productionRate of markup/profit/interest 20%Period/Tenor of loan 4Date of Commercialproduction 3/31/2010 Date of Repayment ofPrincipal 6/30/2010Due No. of Amount Principle Total OutstandingDates Days of mark up Installment Installment Principle 6/30/2009 0 4,314,471 9/30/2009 92 217,497 217,497 4,314,471 12/31/2009 92 217,497 217,497 4,314,471 3/31/2010 90 212,768 212,768 4,314,471 6/30/2010 91 215,133 539,309 754,441 3,775,162 9/30/2010 92 190,310 190,310 3,775,162 12/31/2010 92 190,310 539,309 729,618 3,235,853 3/31/2011 90 159,576 159,576 3,235,853 6/30/2011 91 161,349 539,309 700,658 2,696,545 9/30/2011 92 135,935 135,935 2,696,545 12/31/2011 92 135,935 539,309 675,244 2,157,236 3/31/2012 91 107,566 107,566 2,157,236 6/30/2012 91 107,566 539,309 646,875 1,617,927 9/30/2012 92 81,561 81,561 1,617,927 12/31/2012 92 81,561 539,309 620,870 1,078,618 3/31/2013 90 53,192 53,192 1,078,618 6/30/2013 91 53,783 539,309 593,092 539,309 9/30/2013 92 27,187 27,187 539,309 12/31/2013 92 27,187 539,309 566,496 0 Financial Ratios: RATIOS 2010 2011 2012 2013 Debt Equity Ratio 67% 39% 20% 8% Net Margin (%) 34% 39% 43% 42% Project Returns ALLANA INSTITUTE OF MANAGEMENT 31 STUDIES
  • 32DescriptionIRR 28%Pay Back Period 1.143516173Sponsors stakeCommentary: Our Debt Equity Ratio is decreasing yearly and our Net Profit Margin isincreasing yearly. Which represents the company is financially strong. 5) SWOT AnalysisStrengths:The labor to manufacture ice is easily available we can reach easily to low cost labor.Moreover the location advantage for our project is very much attractive. We can availmaximum advantage from this market.Weaknesses:ALLANA INSTITUTE OF MANAGEMENT 32 STUDIES
  • 33Our weakness is that we are not producing ice up to the present demand of the consumer.Because we have one unit to produced ice if we increase the plant in to 2 then we increase theproduction.Opportunities:Duration of summer doesn’t matter because the packaged food exporting business keeps ongoing for almost whole year and the fishing activities keeps going on for almost 7-8 months ayear. Due to which demand for ice is high for more than 7 months a year. Growing market forice plants are industries linked to food products i.e. fish, dairy, bakeries, restaurants etc. Withthis growing demand a large number of ice plants are operating in the country.There are approximately 1,300 ice plants operating in the Punjab, catering to the needs ofdifferent institutional and domestic buyers. The total installed capacity of ice plants in Punjabis approximately 432,669-tons of ice blocks per day2. The need of ice blocks is increasing dueto economic growth, as major buyers are institutional buyers (dairy, bakery, hotel, etc.), whobuy in bulk.Threats:Competitive Structure of the marketThe market of the ice plant is highly competitive; therefore if the entrepreneur is not wellresponsive and fulfilling the demand of the consumer he/she may not be able to capitalize theopportunity properly.Selection of the wrong venueSelection of the wrong venue can be a major hurdle in achieving the desired businessobjectives. The clientele taste should be properly tracked.ALLANA INSTITUTE OF MANAGEMENT 33 STUDIES
  • 34Conclusion & Recommendation: The location plays an important role, as finished ice blocks should be easily accessibleto dealers . • It is important that solid ice blocks are produced through proper freezing time utilization as solid ice blocks are much heavier, more transparent and provides higher price in the market. • Weather factor plays an important role, due to seasonal nature of the business i.e. In summers the demand for ice blocks increases, while after mid September the temperature starts changing & demand starts to fall, which means the entrepreneur should reduce the production according to the demand of ice. • One of the most important aspects for success of any business is minimizing the cost of production, in case of ice plant this can be achieved by proper training of workers, which would ensure reduction in raw material wastage and better maintenance of machinery etc. • It is advisable to run the plant on natural gas, rather than electricity, as the major expense in production of ice is electricity. The use of natural gas instead of electricity will reduce the electricity expense approximately by half.In order to sell the ice blocks, it is recommended to develop a chain of dealers who buy the iceblocks on regular basis. The dealer deposits a guarantee in the shape of cash security, keepingin view the number of blocks to be purchased on daily basis. In case the dealer is unable topick the agreed number of blocks on a particular day, the amount is deducted from his security.ALLANA INSTITUTE OF MANAGEMENT 34 STUDIES