Pre-Feasibility StudySSeeaa FFoooodd PPrroocceessssiinngg PPllaannttSmall and Medium Enterprise Development AuthorityGovernment of Pakistanwww.smeda.org.pkHEAD OFFICEWaheed Trade Complex, 1stFloor , 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA LahoreTel: (042) 111-111-456, Fax: (042) 5896619, 5899756Helpdesk@smeda.org.pkREGIONAL OFFICEPUNJABREGIONAL OFFICESINDHREGIONAL OFFICENWFPREGIONAL OFFICEBALOCHISTANWaheed Trade Complex,1stFloor, 36-Commercial Zone,Phase III, Sector XX,Khayaban-e-Iqbal, DHA Lahore.Tel: (042) 111-111-456Fax: (042) 5896619, firstname.lastname@example.orgTHFloor, BahriaComplex II, M.T. Khan Road,Karachi.Tel: (021) 111-111-456Fax: (021) 5610572Helpdeskemail@example.comGround FloorState Life BuildingThe Mall, Peshawar.Tel: (091) 9213046-47Fax: (091) firstname.lastname@example.orgBungalow No. 15-AChaman Housing SchemeAirport Road, Quetta.Tel: (081) 2831623,2831702Fax: (081) email@example.comSeptember, 2008
DISCLAIMERThe purpose and scope of this information memorandum is to introduce the subjectmatter and provide a general idea and information on the said area. All the materialincluded in this document is based on data/information gathered from various sources andis based on certain assumptions. Although, due care and diligence has been taken tocompile this document, the contained information may vary due to any change in any ofthe concerned factors, and the actual results may differ substantially from the presentedinformation. SMEDA does not assume any liability for any financial or other lossresulting from this memorandum in consequence of undertaking this activity. Therefore,the content of this memorandum should not be relied upon for making any decision,investment or otherwise. The prospective user of this memorandum is encouraged tocarry out his/her own due diligence and gather any information he/she considersnecessary for making an informed decision. The content of the information memorandumdoes not bind SMEDA in any legal or other form.DOCUMENT CONTROLDocument No. PREF-12Prepared by SMEDA-BalochistanApproved by Head of DepartmentIssue Date September, 2008Issued by Library Officer
Pre-feasibility StudyBAL-PREF-11/ September, 2008311 IINNTTRROODDUUCCTTIIOONN TTOO SSMMEEDDAAThe Small and Medium Enterprise Development Authority (SMEDA) was establishedwith the objective to provide fresh impetus to the economy through the launch of anaggressive SME support program.1iSince its inception in October 1998, SMEDA had adopted a sectoral SME developmentapproach. A few priority sectors were selected on the criterion of SME presence. In depthresearch was conducted and comprehensive development plans were formulated afteridentification of impediments and retardants. The all-encompassing sectoral developmentstrategy involved recommending changes in the regulatory environment by taking intoconsideration other important aspects including financial aspects, niche marketing,technology upgradation and human resource development.SMEDA has so far successfully formulated strategies for sectors including, fruits andvegetables, Marble and Granite, gems and jewelry, marine fisheries, leather and footwear,textiles, surgical instruments, urban transport and dairy. Whereas the task of SMEdevelopment at a broader scale still requires more coverage and enhanced reach in termsof SMEDA’s areas of operation.Along with the sectoral focus a broad spectrum of business development services is alsooffered to the SMEs by SMEDA. These services include identification of viable businessopportunities for potential SME investors. In order to facilitate these investors, SMEDAprovides business guidance through its help desk services as well as development ofproject specific documents. These documents consist of information required to makewell-researched investment decisions. Pre-feasibility studies and business plandevelopment are some of the services provided to enhance the capacity of individualSMEs to exploit viable business opportunities in a better way. This document is in thecontinuation of this effort to enable potential investors to make well-informed investmentdecisions.1For more information on services offered by SMEDA, please visit our website: www.smeda.org.pk
Pre-feasibility StudyBAL-PREF-11/ September, 2008422 PPUURRPPOOSSEE OOFF TTHHEE DDOOCCUUMMEENNTTThe objective of the pre-feasibility study is primarily to facilitate potential entrepreneursin project identification for investment. The project pre-feasibility may form the basis ofan important investment decision and in order to serve this objective, the document/studycovers various aspects of project concept development, start-up, and production, financeand business management.33 PPRROOJJEECCTT PPRROOFFIILLEEThe project involves processing of Seafood, including fish, shrimps, lobsters etc. fordomestic and international markets. Processing of fish involves primarily the applicationof preservation techniques in order to retain quality and increase shelf life of the product.It may also deal with value-adding to produce a variety of products. The qualityproduction will ultimately increase the product demand of sea food in Pakistan as well asin international markets.The major scope of processing activities will include post fish catch activities i-e pre-cooling/icing, grading, cutting and cleaning, packing, and freezing. Sea food processingunit can also provide processing services on rental basis to other exporters of sea food interms of provision of processing facility, provision of cold storages and transportationservice up to the port of exit. Beside this, local fish suppliers, dealers, contractors andboat owners will also be the potential rental costumers of the plant, where they can getprocessing services for their catch through paying a service charge as a rent..33..11 PPrroojjeecctt BBrriieeffThe project is about a Processing Plant which will process / freeze sea food (Fish andshrimps etc.) The final product will be supplied to the food markets of major cities ofPakistan that include Lahore, Sialkot, Islamabad, Karachi, Peshawar and Quetta. Exportquality products will be shipped to the international sea food markets of European Union,Japan, USA, and Russia. Beside this, restaurant chains and 5 star hotels across thecountry are also one of main consumers of the sea food. The processing plant would beused to process the sea food catch mainly coming from the Arabian Sea through fishingboats, launches and international fishing trawlers.As a source of white meat, consumption trend and level of fish is very low as comparedwith chicken. The prime reason for this low consumption is the scarce supply, low qualityand less availability of fish in the meat markets of major cities in Pakistan. Effectivesupply chain of fishery products in domestic markets can increase the demand of fish inlocal markets.The process would include undertaking value-added activities, which will increase thequality and shelf-life of sea food for the national and international market. The plantshould be located at the coastal area of Pakistan ideally near a fish harbor. Pakistani seafood products have significant demand in the international market, however, the export ofsea food products is far less as compare to the available potential. It has been observed
Pre-feasibility StudyBAL-PREF-11/ September, 20085that in order to increase the international export markets size, good quality sea foodproduction will require adequate physical infrastructure facilities like modern processingunits, cool chain, and other supply related logistics. Attaining international qualitystandards and getting quality certificates is a mandatory requirement in Sea foodprocessing industry33..22 SSeeaa ffoooodd–– AA ddeeffiinniittiioonnFish represents a valuable source of proteins and has a significant nutrient value in thedaily diet. Fish is an important part of the daily food intake of most of the countries in theworld and its importance in contributing to food security is rising significantly.The total food supply available from fisheries in live weight terms is estimated to beslightly higher than 16 kilos per year for each of the worlds inhabitants. Fisheries andaquaculture make an important contribution to the animal protein supplies of manycommunities in both the industrialized and developing worlds.Significant supply of fish exists along the Balochistan and Sindh coast. Some of thespecies with major production along Pakistan coast are as follows,Table No. 3.2.1S. No. Name S. No. Name1 Ribbon Fish 12 Conger Eel2 Silver Pomfret 13 Chinese Pomfret3 Black Pomfret 14 Indian Mackerel4 Lady Fish 15 Shells5 Red Snapper 16 Yellow Croaker6 Silver Croaker 17 Ark Shell7 Tiger Tooth Croaker 18 Green Mussels8 Razor Shell 19 Fan Shell9 Baigai 20 Baby Clam10 Crabs 21 Salted jelly Fish.11 Grouper 22 Tuna FishFish is a major component of the sea food that provides a source of vitamin-rich diet.Fish is very perishable food commodity that requires proper handling and preservation toincrease its shelf life and retain its quality and nutritional attributes.The principal components of the fish muscle - water, fat and protein - must be preservedwith little or no changes. The protein content is usually in the region of 15-20 percent,whereas the fat content varies widely from species to species and from season to season.It can be as low at 0.5 percent in lean starved fatty fish and can reach over 20 percent insome species. In lean fish the bulk of the fat is stored in the liver and not in the muscle.Water is the main constituent, with considerable variations, typically 80 percent in leanfish and 70 percent in fatty fish. Carbohydrates, minerals, vitamins and some waterextractable components are examples of other minor substances present.
Pre-feasibility StudyBAL-PREF-11/ September, 2008633..33 OOppppoorrttuunniittyy RRaattiioonnaalleeAfter minerals and agriculture, fishery is the third largest sector in playing a vital role inthe economy of Balochistan. Coastal belt of Balochistan provide a significant supply ofthe sea food to Pakistan and also have the potential to play an important role ininternational sea food market. Balochistan and Sindh coastal areas happened to be on themigration routes of the various varieties of marine species which have a considerabledemand in local as well as international marine food markets. There exist more than 30species of shrimps, 10 species of crabs, 5 species of lobster and about 70 commercialspecies of fish including sardine, Hilsa, shark, Mackerel, Butterfish, Pomfret, Sole, Tuna,sea bream, Jew fish and Cat Fish, Shark, and Eel.Pakistan’s exports of fishery products stand at about 0.25% of world exports. Accordingto estimates, Pakistan total export potential from this sector is near US$ 1.0 billion fromexisting natural resources. Pakistan share signifies that a wide growth opportunity exist inexport markets. Pakistan’s domestic consumption is termed as one of the lowest in theworld, at 1.6 kg per person per year (compared to world average of 16.2 kg per personper year), this figure also portrays tremendous growth opportunity for the localconsumption of sea food.Hence, most of the fish catch goes to fish meal that is treated as wastage to the product.Prime reason for the low national sea food consumption and low export share in sea foodexport market is attributed to the absence of proper processing, storage and transportationfacility in the coastal belt.Properly developed cool chain and fish processing plants will help to significantlydecrease spoilage and ultimately increase the supply of quality fish to local andinternational markets. Development of fishery can also play an important role inprovision of employment and growth opportunities to many small and middle sizecommunities along the coastlines.33..44 MMaarrkkeett EEnnttrryy TTiimmiinnggFish processing operations continues through out the year however it is recommendedthat plant should be ready for operation during the months of July to March so that it canavail full fish catch of the sea. As the peak fishing season starts from the months ofSeptember33..55 PPrrooppoosseedd BBuussiinneessss LLeeggaall SSttaattuussThe business can be started as sole proprietorship or partnership. Comparatively fewercomplications are involved in forming, administering and running the sole proprietorshipor partnership businesses.
Pre-feasibility StudyBAL-PREF-11/ September, 2008733..66 PPrrooppoosseedd PPrroodduucctt MMiixxThe sea food processing plant is designed to house and process the fish catch for exportmarket. In order to facilitate the fish suppliers on regional and national level, the plantalso has the capacity to provide processing facility on rental basis.Major operations of this processing plant will be grading, washing, cutting, blast freezingand packaging of fish catch from Balochistan and Sindh coastal areas. The final productwill be supplied through a cool chain to national and international markets.Rental value of the plant is one of the main contributing factors to the revenue. The plantcan offer its production and processing services to the local fishermen and investors onrental basis. The plant can charge production charges on per kilogram of the finalproduct.Project will also be facilitated through an internet website. The website of the companywill facilitate the national and international buyers in selecting the fisheries product oftheir choice and will enable them to streamline the supply of consistent product to the endusers/exporters in a given time frame.33..77 PPrroojjeecctt CCaappaacciittyyThe plant will store the fish catch and process the same in the same cycle. The plant willbe able to handle approximately 60 tones of fish catch of varying varieties in 24 hours.It will have a wider cold storage facility. Cold store of the project will be 10 times thesize of the processing plant i-e it should have the capacity to store the product order of 10days as such the cold storage of the plant will be of 600 tons capacity.33..88 PPrroojjeecctt IInnvveessttmmeennttThe total project investment is Rs. 120,521,267 which includes capital cost of Rs.91,416,722 and working capital of Rs. 29,104,545. It is assumed that the project would bepartially equity financed (50%) and partially debt financed (50%).33..99 RReeccoommmmeennddeedd PPrroojjeecctt PPaarraammeetteerrssTable 3.9.1CapacityHumanResource Technology/Machinery Locations60,000 tons/year 15 Imported / Local MadeGwadar, Pasni , Ormara, Jiwani,Damb, Karachi, Korangi,Gharo.Financial SummaryProject Cost IRR Pay Back Period NPVRs. 88 m 41% 4.1 Years Rs 100 m
Pre-feasibility StudyBAL-PREF-11/ September, 2008833..1100 RReeccoommmmeennddeedd LLooccaattiioonnssThe proposed location for the establishment of such a facility could be the areas with inthe proximity of Balochistan and Sindh coastal belt. If the project is closer to a fishharbor it will have an added advantage of being nearer to the raw material supply.The harbors and main landing points with their provincial location and relativeimportance are as follows,NAME PROVINCE Relative ImportanceKarachi Sindh **** H2 Korangi Sindh **3 Ibrahim Haidery Sindh *4 Shams peer Sindh *5 Hawks Bay Coast Sindh *6 Lath Basti Sindh *7 Manjhar Sindh *8 Sonari Sindh *9 Mubarrak Village Sindh *10 Kaitee Bandar Sindh **11 Shah Bandar Sindh **12 Kharo Chaan Sindh **13 Jatthi Sindh **14 Jhungi Sur Sindh **15 Badeen Sindh **16 Gwadar Balochistan *** H17 Pasni Balochistan *** H18 Ormara Balochistan ***19 Gaddani Balochistan **20 Bunda Wari Balochistan *21 Beroo Balochistan *22 Sonmiani Daam Balochistan **Legends: * meets local users requirements** Important*** Very important**** Most importantH = Fishing HarborThere are four fish harbors which are under different administrative control. However,recommendation can also be made on the basis of availability of the nearest sea port.
Pre-feasibility StudyBAL-PREF-11/ September, 20089Gwadar Port: With the operation of Gwadar port. The locations associated with Gwadar port arerecommended for establishing sea food processing plant. These areas are Pasni ,Ormara and Surbendar.Karachi Port and Port Qasim: The locations associated with Port Qasim and Karachi Port is recommended forestablishing sea food processing plant in Sindh. The areas are Korangi FishHarbour ( Ibrahim Haydery) and Gaddani.33..1111 KKeeyy SSuucccceessss FFaaccttoorrss Availability of vast range and variety of fish and marine food in Arabian Sea watersalong the Pakistan coast. Proposed areas for the processing plant have quite considerable number of skilledfishermen and boat owners. Significant number of suppliers exists for the production. Large and established world markets Growing trend in sea food consumption nationally and internationally. Rehabilitation in Afghanistan. 5-Stars hotels and restaurant chains are in continuous need of quality sea food supply. Improved technological changes available. Ample opportunity for exports. International recognition of the plant will boost the export orders.33..1122 SSttrraatteeggiicc RReeccoommmmeennddaattiioonnss The location plays an important role, as the facility should easily be accessible to thenearest port and towns. Effective supply and cool chain will increase the market accessibility. International quality certifications i-e HACCP, ISO can increase the productcredibility internationally. Emphasizing on excellent quality standards and producing quality assured productsand timely order fulfillment. New machinery should be purchased in order to increase the efficiency and lower themaintenance cost. Adapt to the rapid, social, economic and technological changes. Well-trained/experienced staff adding in the efficiency of the facility.
Pre-feasibility StudyBAL-PREF-11/ September, 20081044 CCUURRRREENNTT IINNDDUUSSTTRRYY SSTTRRUUCCTTUURREE44..11 WWoorrlldd FFiisshheerriieess TTrraaddee aanndd PPrroodduuccttiioonn::About 38% of world fish production is traded internationally. In 2001, total exports offish and fishery products were US$ 55.9 billions in value terms. About 74 percent ofworld fish production is used for direct human consumption, whereas the remainder(about 26 percent) is utilized for various non-food products, mostly for conversion tofishmeal and oil.In 2004, the per capita food fish supply was estimated at 13.5 kg, excluding China.Overall, fish provided more than 2.6 billion people with at least 20 percent of theiraverage per capita animal protein intake. The share of fish proteins in the total worldanimal protein supplies grew from 14.9 percent in 1992 to 16.0 percent in 1996. In 2003the percentage was 15%.The estimates for 2005 indicate that the total world fishery production was 142 milliontones, an increase of one million tones over 2004, and a record production. The totalamount of fish available for human consumption has increased to 107 million tones.China is the largest producer, with fisheries production of 47.5 million tones in 2004,16.9 million tones capture and 30.6 million tones aquaculture.Developing countries, supplied more than 50% of the world fisheries production. Shrimpis the main fish commodity traded in value terms, accounting for about 19% of the totalvalue of internationally traded fishery products. In 2001, more than 80% of the totalworld import value was concentrated in developed countries, in particular in Japan, theUSA and in several EU countries.Japan was the major importer accounting for about 23% of total import value. USA wasthe second main importer with a share of 17%, followed by Spain, France, Italy,Germany and the UK. (Source: FAO)
Pre-feasibility StudyBAL-PREF-11/ September, 200811Table No: 4.1.1World fisheries and aquaculture production and utilization2000 2001 2002 2003 2004 20051(Million tonnes)PRODUCTIONINLANDCapture 8.8 8.9 8.8 9.0 9.2 9.6Aquaculture 21.2 22.5 23.9 25.4 27.2 28.9Total inland 30.0 31.4 32.7 34.4 36.4 38.5MARINECapture 86.8 84.2 84.5 81.5 85.8 84.2Aquaculture 14.3 15.4 16.5 17.3 18.3 18.9Total marine 101.1 99.6 101.0 98.8 104.1 103.1TOTAL CAPTURE 95.6 93.1 93.3 90.5 95.0 93.8TOTAL AQUACULTURE 35.5 37.9 40.4 42.7 45.5 47.8TOTAL WORLDProduction131.1 131.0 133.7 133.2 140.5 141.6UTILIZATIONHuman consumption 96.9 99.7 100.2 102.7 105.6 107.2Non-food uses 34.2 31.3 33.5 30.5 34.8 34.4Population (billions) 6.1 6.1 6.2 6.3 6.4 6.5Per capita food fish supply(kg)16.0 16.2 16.1 16.3 16.6 16.644..22 PPaakkiissttaann FFiisshheerriieess TTrraaddee aanndd PPrroodduuccttiioonnAs a highly perishable commodity, fish has a significant requirement for processing.More than 60 percent of total world fisheries production underwent some form ofprocessing. The most important of the fish products destined for direct human
Pre-feasibility StudyBAL-PREF-11/ September, 200812consumption was fresh fish (a share of 53.7 percent), followed by frozen fish (25.7percent), canned fish (11.0 percent) and cured fish (9.6 percent).Pakistan has a total coastline of 1,090 km and a total fishing area of approximately300,000 sq. kms. Pakistan’s fishing waters are termed as highly rich in marine life with avast variety of species having commercial value. However, this potential is not reflectedin the export earning from fisheries sector. The exports of “Fish and Fish Preparation”were at $134.5 million (with a volume of 93,214 tons) in 2002-03.European Union countries, Japan and U.S.A are some of the big export market for seafood. Pakistan fisheries export’s ultimate aim will be to capture a bigger percentage inEU and US markets. However, the quality standard and restrictions for these markets arevery stiff. In order to meet EU and US quality standards, processing plants and supplychain management of Pakistan sea food products should be up to the these standards.Pakistan’s exports of fishery products stand at about 0.25% of world exports. In 2006Pakistan’s seafood exports registered more than 40 percent growth last year, reached $196.15 million up from $ 138.94 million exported during 2004-05. Pakistan exportedseafood worth $ 188 million during the financial year 2006-07, which was almost fourpercent less against $ 196 million of 2005-06. August-September is the peak period of theseason and before the ban Pakistan used to export over 90 percent seafood products to theEU in these months. Due to the EU ban, the shrimp exporters had explored some marketsin the Middle East, China and Korea44..33 TTaarrggeett MMaarrkkeettss ooff PPaakkiissttaann FFiisshheerriieess::European Union countries, Japan and U.S.A are some of the big export market for seafood. Pakistan fisheries export’s ultimate aim will be to capture a bigger percentage inEU and US markets. However, the quality standard and restrictions for these markets arevery stiff. In order to meet EU and US quality standards, processing plants and supplychain management of Pakistan sea food products should be up to these standards.The EU is a big market for Pakistani seafood and Pakistan is not getting a foreignexchange of $ 47 to $ 50 million since 2005-06. There are also some US restrictions onseafood exports, which needed to be lifted. The EU has banned seafood exports fromPakistan since April 2007. The action was taken after its inspectors’ visit to Pakistan.They found the industry’s food processing below their standards. The EU had also raisedcomplaints against fishing vessels, auction halls and processing units, which have still notbeen addressed by the fishermen community.The European countries are the largest buyers of Pakistani seafood, mainly shrimps, formore than two decades, sharing 53 percent of the total export to the world. Of the total 60percent are exported through the fish harbor auction hall.
Pre-feasibility StudyBAL-PREF-11/ September, 200813PAKISTAN TOTAL FISHERY PRODUCTS EXPORTSPERCENTAGE99.750.25Total World Fishery Products Export Pakistan Fishery Products ExportTable No: 4.3.1Catch of Fish on Mekran Coast BalochistanS.No SpecialGroup2001 2002 2003 2004 20051 IndianMackerels andSimilar Species163.27 173.82 314.79 18,855.17 18,539.92 Herrings Sardineof SimilarSpecies187.32 153.32 198.19 10742.19 19630.83 Eles ObranchesSharks ,Skates &Ray12.09 102.98 76.53 6589.20 5393.824 Cuttle Fish .29 2.27 2.11 124.63 99.045 Marine Lobsters 0.45 3.00 2.68 230.13 153.626 Marine Shrimps 0.74 6.39 6.42 317.80 546.557 Teleostean FlatFish70.71 52.38 34.39 3003.17 2160.568 Salmons ,Trout& SimilarSpecies4.60 15.76 N / A 409.09 430.959 Other MarineTelec Tean740.82 701.69 600.77 83873.03 65555.8610 Crabs N / A N / A N / A N / A 65.4211 Ivory Shell N / A N / A N / A N / A 66.741180.29 1211.63 1235.88 124144.40 112642.34
Pre-feasibility StudyBAL-PREF-11/ September, 20081444..33..11 PPrroobblleemmss ffaacceedd bbyy tthhee sseeccttoorr Lack of Processing Plants and technology:Sea food processing plants play a vital role in the development and economy of thefisheries sector. The fisheries industry can only attain its target production wheninternationally standardized quality of the fisheries product is produced.In the prevailing circumstances the industry is unable to produce quality product for theexport markets. One of the major reasons has been the absence of appropriate technology.There are quite few processing plants in the Balochistan and Sindh coastal belt. Theexisting processing plants also face problems attaining quality production certificates andtechnological up gradation. Most of the processing units in the country are equipped withlocal versions of the processing machinery with little or no calibration, high electricityconsumption and low quality productionThese plants have limited production capacity with Primitive technology. These plantsare most of the times incapable to process large fish catch and cannot facilitate largeorders placed by the importing firms.Another factor involved is the lack of skills among the processing workers, who have notbeen provided with required training on handling fish catch.This situation was mainly attributed to unorganized nature of private sector, lack of focusin Government policies and little institutional investment (in public and private sectorprojects) in this sector. Incapability of meeting cool chain system:As there is no proper cool chain established, therefore, there exists a parallel distributionsystem for the fresh fish reaching the processing plants. As an industry practice, theprocessing units acquire fish catch supplies either, directly from the boat owners in smalllots, or from the auction hall. This results in spoilage and degradation of fresh fish. As aresult, the final product fails to attain its target price. International Certifications:As part of the food product, export of sea food to international market is subject to therules and international certifications. Most of the sea food processors in Pakistan eitherdo not have the knowledge to get international certificate or do not comply to meet thecertification requirements. Therefore the final export product is sold at lower the marketrate.
Pre-feasibility StudyBAL-PREF-11/ September, 200815 Lack of Training and Development for Fisheries Sector:Fishing practices and processing is an interdependent process. The processing plantcannot convert a fish catch of low quality into acceptable quality grade. The processingindustry suffers as a whole due to lack of training and development for the fisheriessector.Product hygiene training for fishermen is a must for good quality processing. Due to lackof training and development in this area, the processing industry is not showing therequired results.Lack of skilled work force for sea food processing plant is also another issue that poseproblems for the processing industry.44..44 RReeggiioonnaall DDiissttrriibbuuttiioonnMore then 30,000 people are associated directly with fisheries sector employing about6200 fishing boats. All boats are wooden with inboard mechanized engines.Gwadardistrict annual production of fishery is more than 107,568 metric tons. Boatmanufacturing units are operating in Gwadar from very old times and still manufacturingwooden boats of various sizes and kinds, starting from small fishing boats to heavyfishing and cargo vessels. Town wise distribution of fish catch, boats and fishermen is asfollowing in the table 4.4.1.Table No: 4.4.1Annual Tehsil Wise fisheries catch from District Gwadar (2004-2005)S.No Town of the DistrictGwadarNo offishermenNo of FishingBoatsAnnual Production inMetric Tons1 Gwadar 7715 1102 315202 Surbander 3745 546 96833 Pasni 6466 1240 272704 Ormara 4796 860 157585 Pishokan 3468 438 964516 Jewani 4248 573 13693.TOTAL 40,438 4,759 107,568*Source: BCDA, SMEDA Survey.
Pre-feasibility StudyBAL-PREF-11/ September, 200816Table No: 4.4.2Number of Fishing Crafts On Balochistan Coast.Year No. Lanches No Mechanized Boats No. of Motorized Boats Total2005 72 1510 4556 613855 MMAARRKKEETT IINNFFOORRMMAATTIIOONN55..11 IInntteerrnnaattiioonnaall EExxppoorrtt MMaarrkkeettEuropean Union, Japan, and USA are the largest sea food consumers in the world.Whereas U.A.E, Russia, Malaysia, Thailand, Singapore and Indonesia are also theemerging export markets for the sea food processing industry. Sea food exports to theseregions are subject to the international quality certifications and a processing plant shouldbe able to meet the criteria set by the importing country. Product hygiene, processingtechnique and machinery are some of the major issues which must be catered to by theprocessing plant owner to export in these regions.Statistics for 2001, regarding international import and export markets is as followsTable No: 5.1.1World Import of Fisheries Products in Value. 2001S.No Country Share in the World Market Value in US Dollars1 E U 34%Japan 23%Developing Countries 18%USA 17%Others 8%50 BillionTable No: 5.1.2World Export of Fisheries Products in Value. 2001S.No Country Share in the World Market Value in US Dollars1 E U 21%Japan 1%Developing Countries 50%USA 6%Others 22%30 Billion
Pre-feasibility StudyBAL-PREF-11/ September, 20081755..22 LLooccaall SSeeaa FFoooodd MMaarrkkeettPakistan’s domestic consumption is termed as one of the lowest in the world, at 1.6 kgper person per year (compared to world average of 16.2 kg per person per year). Thisfigure indicates a huge potential for sea food sector in Pakistan. Quantity of processed seafood consumption in Pakistan is negligible. Frozen sea food supply to local markets ofPakistan cannot only increase consumption trends but also have the potential to bringnew business ventures in the supply chain.Karachi, Lahore, Islamabad, Quetta and Peshawar are some of the markets which show apotential for sea food supply. At present, only the Karachi markets have availability offresh sea food in terms of variety and quality because of existing supply chain andproduction. Lahore, Quetta, Peshawar and Islamabad can be target market if a cool chainsystem is attained.5-Star Hotels and restaurant chain owners in the said cities are also a potential market forlocal sea food supply. The supply can be increased through an effective cool chain andconsistent production of variety of sea food product.55..33 SSuuppppllyy CChhaaiinn ooff FFiisshheerriieess iinn PPaakkiissttaann::Focusing on Sea Fishing Supply Chain, Pakistan Sea Food distribution is similar to othercountries or Sea Ports in which following stakeholders are involved:Sea Food Supply Chain can be categorized into three different types:1. Sea Food distribution to different areas of Balochistan and Sindh from Harbor.2. Sea Food processing in Gwadar and Karachi for Export Market.3. Sea Food exports from Gwadar and Karachi port.Role of StakeholderFollowing are the stakeholders in the seafood supply: Fishermen Middlemen Local Mandi/ Market Processing Plant owners Transporters Middlemen Karachi Exporters Retail Shop keepers End User
Pre-feasibility StudyBAL-PREF-11/ September, 200818Above-mentioned stakeholders might vary according to supply of seafood items. Forexample if the Fish is directly distributed from Gwadar to different areas of Balochistanthen only first 3 stakeholders might be involved.55..44 IInntteerrnnaattiioonnaall QQuuaalliittyy CCeerrttiiffiiccaattiioonn,, HHAACCCCPP::Export to international market is dependent on the Quality and safety assurancecertifications. These certifications legitimize the export process of the processing plant.The certifications will help in getting market share to the EU, US and Japanese sea foodmarket. These certifications are issued after thorough inspection of the processesinvolved in the sea food processing plant. These will help in assuring product hygiene i-ethe final product is free from all Becteria’s and viruses.HACCP certification is the most important certificate for the sea food processing plant. Inorder to get a share in EU, US and Japanese markets following are some of the importantquality certifications that help in attaining a product share in the said markets.55..44..11 HHAACCCCPP CCeerrttiiffiiccaattiioonnThe HACCP system was introduced in the United States in 1971 by the PillsburyCompany in collaboration with the National Aeronautics and Space Administration(NASA) and the US Army Natick Research and Development Laboratories. Theseagencies had the initial responsibility for designing and manufacturing food products andhardware which were to provide 100 percent assurance that either the food productswould not be contaminated with pathogens, bacteria or viruses which could cause illnessor that the equipment would function with zero defects. The HACCP system has becomethe internationally recognized system for the management of food safety for allcompanies involved in the production, transformation, storage and distribution of foodfor human consumption. It has been adopted by the European Union (EU) for all foodprocessors and the Codex Alimentarius Commission as the principal food safety system(EU Directive 93/43/EEC; Codex Alimentarius – Alinorm 93/131, 1993)The HACCP process involves the identification of specific hazards throughout the entireprocess involved in the production of a food product and focuses on the preventativemeasures for their control to assure the quality and safety of the food. This includesanalysis of raw material sources and usage, processing equipment, operating practices,packaging and storage, together with marketing and conditions for intended use. There isless reliance on the traditional system of end product testing and food safety is built intothe product from conception through design and distribution.HACCP shifts the responsibility to the food producer to ensure that the product is safelyconsumable.The following is a list that is included (at a minimum) in the hazard analysis: Ingredients and raw materials: source, composition, handling, transportation, andstorage
Pre-feasibility StudyBAL-PREF-11/ September, 200819 Activities conducted in the process and handling system: steps identified on theflow diagram Equipment used in manufacture and processing: specific parameters important tocontrolling, reducing, or preventing hazards Equipment and facility sanitation Food product distribution: transportation, delivery, wholesale/retail practices, andintended useDocumentation of the hazard analysis includes a written summary providing relevantscientific references. In addition, the information should be summarized in a narrativestatement and listed on appropriate forms.Annexure I of the report gives the addresses of the HACCP certification issuing authorityand associated certifications for HACCP qualification.55..44..22 FFDDAA CCeerrttiiffiiccaattiioonn::The U.S. national regulatory authority for public protection and seafood regulation isvested in the Food and Drug Administration (FDA). The FDA operates an oversightcompliance program for fishery products under which responsibility for the productssafety, wholesomeness, identity and economic integrity rests with the processor orimporter, who must comply with regulations promulgated under the Federal Food, Drugand Cosmetic (FD&C) Act, as amended, and the Fair Packaging and Labeling Act(FPLA).55..55 SSeeaa FFoooodd PPrroodduucctt lliinneess::Sea food product lines mainly include frozen fish and shrimp products. Shrimps arecategorized as headless and head-on according to the market demand. Frozen shrimps aremostly packed into paper boxes and weight ranges from 2- 4 kg packs.Frozen fish is packaged according to the international requirements. Mainly the fishproduct is packed into 10kg cotton boxes with names and company brand on it, whereasfor national supply fish is packed into bags of weight ranging from 2 kg to 10 kg packs.55..55..11 QQuuaalliittyy aanndd PPrroodduucctt lliinnee::Sea food is a delicate and perishable food item. The quality of the product is defined byits Appearance. Freshness. Packaging.
Pre-feasibility StudyBAL-PREF-11/ September, 20082055..55..22 PPrroodduucctt GGrraaddeeTable: 22.214.171.124 Market Segmentation According to Grade and Quality PreferenceGRADE Description Target MarketAA The products in this grade signify thebest sea food in terms of its Size,quality, packaging and freshness.The species in this Grade are marked toget highest product price.AA grade products are marketed and geteasy accessibility to EU, USA, Japanesemarkets with good price.A The products in this grade are termed asthe best in terms of quality andfreshness.The species in this Grade are marked toget an acceptable export product price.A grade products are exported to the saidmarkets with comparatively lower pricesthose AA products. However goodpackaging and timely order delivery canincrease the final price.B The buyer of the product makes somecompromise on the quality. The fishcatch with a change in color or lackingsome freshness comes in grade.The final price of this product iscomparatively low; therefore the plantowner makes effort to save the catchfrom turning into B Grade.Export market will be focused for the Bgrade products however rates competitiveto the exports market also exists locally forthe B grade products.H Improper handling of the fish catch atsea or mismanagement in keeping thecool chain makes the fish turning into Hgrade. This grade has less chances ofgetting accessibility for the export.Whereas local fish markets of Pakistanis supplied mostly with H grade fish.Most of the H grade is also converted tothe fish meal that is treated as awastage.An effective cool chain after the processingcan make an H grade product highlyacceptable to the local market. Local retailmarkets will be the target market for the Hgrade.(Source: Industry analysis and experts opinion)55..66 TTaarrggeett CCuussttoommeerrssThe target customers for a Sea food processing Plant mainly include: International Export Markets of European Union, USA and Japan. The processing plant can also exploit the growing consumer market ofAfghanistan. Sea food supply market of Pakistan.
Pre-feasibility StudyBAL-PREF-11/ September, 20082166 TTEECCHHNNIICCAALLAANNAALLYYSSIISS66..11 FFiisshh SSppooiillaaggee::As soon as a fish dies, spoilage begins. Spoilage of fresh fish is a complex process and iscaused by a number of inter-related systems, some of which are suppressed by others.The factors which principally contribute to the spoilage are the degradation of proteinwith a subsequent formation of various products like hypoxanthine, trim ethylamine,development of oxidative rancidity and the action of micro-organisms.The first obvious way to avoid spoilage and loss of quality is to keep caught fish aliveuntil cooking and consumption. Fish begins to spoil immediately after death. This isreflected in gradual developments of undesirable flavors, softening of the flesh andeventually substantial losses of fluid containing protein and fat. By lowering thetemperature of the dead fish, spoilage can be retarded and, if the temperature is kept lowenough, spoilage can be almost stopped.66..11..11 FFoouurr PPhhaasseess iinn FFiisshh SSppooiillaaggee::The four phases of fish spoilage are as follows,Phase I(Autolytic changes,caused mainly byenzymes)Fish just caught is very fresh and has a sweet, seaweedy anddelicate taste. There is very little deterioration, with slightloss of the characteristic odour and flavour. In sometropical species this period can last for about 1 to 2 days ormore after catching.Phase II(Autolytic changes,caused mainly byenzymes)There is a significant loss of the natural flavour and odour offish. The flesh becomes neutral but has no off-flavours, thetexture is still pleasant.Phase III(Bacteriologicalchanges, causedmainly by bacteria)The fish begins to show signs of spoilage. There are strong off-flavours and stale to unpleasant smells. Texture changes aresignificant, flesh becoming either soft and watery or tough anddry.Phase IV(Bacteriologicalchanges, causedmainly by bacteria)Fish is spoiled and putrid, becoming inedible.66..22 CChhiilllliinngg PPrroocceessssChilling is the process of cooling fish or fish products to a temperature approaching thatof melting ice.The purpose of chilling is to prolong the shelf-life of fish, which it does by slowing theaction of enzymes and bacteria, and the chemical and physical processes that can affectquality. Reducing the temperature at which the fish is kept lowers the rate ofdeterioration. During chilling the temperature is reduced to that of melting ice, 0 °C/32 °.
Pre-feasibility StudyBAL-PREF-11/ September, 200822All species of fish, when properly chilled, will stay fresh for longer periods than thosethat are not preserved in any way. The use of chilling techniques such as ice, therefore,effectively prolongs the length of time of the catch. Products brought to market in a well-preserved condition will generally command higher prices, both at wholesale and retaillevels, and thus give better returns to the fishing operation.Most effective method employed for chilling process is a combination of ice and water.Ice is widely used for the purpose. For the purpose of fish handling, flake icerecommended for chilling process as the physical shape of the flake ice favors fish66..33 FFrreeeezziinngg::Freezing and frozen storage of fish can give a storage life of more than one year. It hasenabled fish processing plants to keep the product for long periods. Freezing allowed thestockpiling of fish during periods of low demand and high catching rates, as well aswidened the market for fish products of high quality.66..33..11 TTyyppeess ooff FFrreeeezzeerrssThe three basic methods of freezing fish are: Blowing a continuous stream of cold air over the fish - air blast freezers. Direct contact between the fish and a refrigerated surface - contact or platefreezers. Immersion in or spraying with a refrigerated liquid - immersion or spray freezers66..33..11..11 BBllaasstt FFrreeeezzeerrssThis is the most efficient and effective method of freezing. The method recommended inthis pre feasibility is Blast freezers. In this method, the use of air to transfer heat from theproduct being frozen to the refrigeration system is probably the most common methodused in commercial refrigeration. The natural convection of the air alone would not givea good heat transfer rate, therefore, forced convection by means of fans has to beintroduced. To enable the product to be frozen in a reasonable time the air flow rateshould be fairly high.Batch air blast freezers. Batch air blast freezers use pallets, trolleys or shelfarrangements for loading the product. The freezer is fully loaded, and when freezing iscomplete, the freezer is emptied and reloaded for a further batch freeze. Apart from thisdifference in mode of operation, the batch freezer gives rise to bigger fluctuations in therefrigeration load than continuous or batch-continuous freezers.Because of compatibility and efficiency in the present industry structure, freezingtechnology recommended for the proposed project will be batch air blast Freezers.
Pre-feasibility StudyBAL-PREF-11/ September, 20082366..33..11..22 PPllaattee FFrreeeezzeerrss::Plate freezers and air blast freezers are the types of freezer most commonly used forfreezing fish in industrial countries. Plate freezers do not have the versatility of air blastfreezers and can only be used to freeze regularly shaped blocks and packages.Plate freezers can be arranged with the plates horizontal to form a series of shelves and,as the arrangement suggests, they are called horizontal plate freezers (HPF). When theplates are arranged in a vertical plane they form a series of bins and in this form they arecalled vertical plate freezers (VPF).66..33..11..33 SSpprraayyiinngg wwiitthh aa rreeffrriiggeerraatteedd lliiqquuiidd (( LLiiqquuiidd NNiirrttooggeenn // ccaarrbboonnddiiooxxiiddee))::In this freezer, the product is brought into direct contact with the refrigerant.The fish on the stainless steel conveyor belt initially come into contact with the countercurrent flow of nitrogen gas at a temperature of about -50°C. Alternatively liquidcarbondioxide can also be sparyed on the fish as refrigerant at a temperature of about -50C. As the fish progress through the precooling stage of the freezer, the gaseous nitrogenpartially freezes the fish and up to 50 percent of the product heat is extracted. Theproduct then passes below the liquid spray where freezing is completed by the boilingliquid. The last stage in the freezer provides a few minutes for the fish temperature toreach equilibrium before the fish are discharged.
Pre-feasibility StudyBAL-PREF-11/ September, 200824This method is considered the most advance and expensive practice in freezingtechnology. This method is employed in those countries which have regular supply ofliquid nitrogen or liquid carbon dioxide66..44 PPaacckkaaggiinngg ooff FFrroozzeenn FFiisshh::After fish has been frozen, it can be subjected to many forms of deterioration betweenproduction and eventual consumption. Contamination from humans, animals, insect andatmospheric sources are possible. To prevent or reduce losses in product quality, it isessential that the frozen product is packaged in such a way as to provide an effectivebarrier with sufficient impact and compression strength to prevent damage. Thepackaging material must have adequate barrier properties to reduce losses due todehydration and pick-up of taints. The range of packaging material for frozen fish is verywide and is dependant on the form of the product being packed.For the export market in fisheries sector, primarily plastics and Cartons are employed forpackaging frozen fish products. However for local supply across Pakistan, the fishproduct can be packages in Bags as well. A brief of the packaging material is as follows,66..44..11..11 PPllaassttiiccss::The primary package in contact with the frozen product is generally a plastic derivedfrom a natural hydrocarbon source. The choice of which plastic wrapper is dependant onthe type of barrier required, and if the product is to be cooked or heated in the container66..44..11..22 CCaarrttoonnss::Cartons are also regarded as primary packages when used as a protective sleeve to theproduct. The boards for the cartons can be made of : Kraft boards. These are frequently used for packaging frozen foods and areusually made from fully bleached materials. They are strong, of good appearanceand are suitable for direct contact with food. Folding box boards. These usually have one fully bleached side which is suitablefor direct contact with food.66..44..11..33 BBaaggss::Due to its availability and cost effectiveness, frozen fish and shrimps can be packeddirectly into bags made from materials with good gas vapor and moisture barrierproperties. The level of sophistication can range from manual weighing and loading to ahighly sophisticated form-fill-seal technology where a specified weight, volume or countof product is filled into a formed bag which is heat sealed. Such equipment can be usedfor packing peeled shrimp and fish fingered.
Pre-feasibility StudyBAL-PREF-11/ September, 200825Fish CatchfromAuction Hall/BoatsReceivingandWeighing inPlantIcing /washingandSegregatinginto AA,A,Band H GradesPackagedProduct Lotsinto Cold StoreProcessingHall.Grading andPackagingProcessing HallRe-Packagingand GradingTransportation66..55 PPrroocceessss FFllooww CChhaarrttThe process flow chart for the Sea Food Processing Plant is given below66..66 RRaaww MMaatteerriiaall // MMaarriinnee FFiisshh CCaattcchh::Fresh fish of the sea can be termed as the raw material for the processing plant. The seafood processing starts from the fishing boats. Fresh fish catch from small boats operatingon daily basis along the sea are one of the major suppliers of the fresh fish for processingplants. Whereas deep water fishing vessels and trawlers also supply considerable amountof fresh fish for the processing plant.BLASTFREEZING
Pre-feasibility StudyBAL-PREF-11/ September, 20082677 MMAACCHHIINNEERRYY RREEQQUUIIRREEMMEENNTT FFOORR TTHHEE SSEEAA FFOOOODD PPRROOCCEESSSSIINNGG PPLLAANNTTFollowing are the basic machinery requirements for Sea food processing plant.77..11 MMaacchhiinneerryy aanndd EEqquuiippmmeennttAlthough the machine installation costs are included with the respective machine costsbut some of the installation costs would be borne by the owner of the plant such as Rs 2.5million as calculated for the project. Installation will require at least 4 months time. Oncethe machinery is purchased, the operation can be started after at most 6 months.Machinery / Description / Specifications Quantity UnitPrice/RupeesTotalFlake Ice Machine Capacity (25 T / 24 Hours)Storage Bin , Capacity ( 12 Tons)226,800,000525,00013,600,000.001,050,000.00Blast Freezers , Capacity (2T / 8 Hours) -30 C Bitzer 2 Stage Condensing Units. 2 Low Temperature Cooling Coils withControl Panels4 1,800,000 7,200,000.00Cold Store , Capacity ( 250 T , 50x 50x 15) -30 C Unit Capacity 4 x 2 Stage Condensing Unit. 4 Cooling Coils with Control Panels.4 2,240,000 8,960,000.00Individual Quick Freezing Machine (IQF Plant), PerHours Capacity, 500kg Shrimp/Fish @ -35 C1 14,000,000 14,000,000.00Central Air conditioning System Processing Hall1 800,000 800,000Tables and Racks 8,000,000Tube Well, Transformer & water pump etc. 1 1,800,000Generator 1 1,400,000 1,400,000Machinery Installation Cost 2,500,000Total Cost 55,510,000
Pre-feasibility StudyBAL-PREF-11/ September, 20082777..22 MMaaiinntteennaannccee CCoossttssMachine maintenance would be an on going process and is calculated to be Rs 50 perton processed. Since the machine is locally manufactured therefore availability of spareparts is not an issue.77..33 VVeehhiicclleeThe facility will require 2-open Trucks with 2-referigerated containers and a pickupshezor. To carry its final product for shipment the factory usually works on hiredtransportation. Whereas the factory truck will operate on daily basis to transfer fish catchfrom the near by areas to the plant in case of heavy fish landing. The Shahzor trucks isused for daily operations of the factory that include workers transportation and otherassociated jobs.Detail Quantity Unit Price TotalTruck 2 4,000,000 8,000,000Refer container 2 1,500,000 3,000,000Hyundai Shehzore 1 965,000 965,000Office vehicles cost 11,965,000Registration fee 1% 119,650Total Office Vehicles cost 12,084,650
Pre-feasibility StudyBAL-PREF-11/ September, 20082888 OOTTHHEERR OOFFFFIICCEE RREEQQUUIIRREEMMEENNTTSSTable 8.1 Office EquipmentOffice furniture cost Rs. 1,216,500 and Office Equipment costs Rs. 800,000 and would include acomputer, a fax, a telephone, and the intercom system.99 HHUUMMAANN RREESSOOUURRCCEE RREEQQUUIIRREEMMEENNTTThe manpower required for operating the Warehouse is as follows:TTaabbllee 99--11 HHuummaann RReessoouurrccee RReeqquuiirreemmeenntt DDeettaaiillssDescription No. Salary Total Monthly SalaryManager 1 40,000 40,000Accountant 1 20,000 20,000Office Assitant 1 12,000 12,000Store Keeper 1 15,000 15,000Generator Operator /Oiler 2 10,000 20,000Compressor Operator 2 10,000 20,000Helper 5 8,000 16,000Drivers 3 8,000 24,000Watchman 2 10,000 20,000Production Hall Supervisor 2 12,000 24,000Packaging / Loading Foreman 3 12,000 36,000Cold Store In charge 2 12,000 24,000Janitors 21100 LLAANNDD AANNDD BBUUIILLDDIINNGG RREEQQUUIIRREEMMEENNTT1100..11 LLaanndd RReeqquuiirreeddA total land of around 2 acres would be sufficient enough for the whole facility. Theaverage estimated cost of 2 acres land is Rs 2.46 million. However the land cost ofIndustrial Areas of other proposed locations might vary.1100..22 BBuuiillddiinngg aanndd IInnffrraassttrruuccttuurreeFor the facility, it is required to build structure comprising of heads shown with thebuilding costs in table 10.2.
Pre-feasibility StudyBAL-PREF-11/ September, 200829TTaabbllee 1100..22..11 BBuuiillddiinngg//IInnffrraassttrruuccttuurree CCoosstt DDeettaaiillssDetail Area in Sq.Ft. Rate/Sq.ft. Total CostManagement building 1,000 800 800,000Factory 8,000 800 6,400,000Godown 2,000 800 1,600,000Labour Quarters 900 800 720,000Boundry Wall 300 350 105,000Water Tank - - 120,000Cold Store 4,000 1,200 4,800,000Cafeteria 600 800 480,000Pavement/driveway 2,500 350 875,000Grounds 3,800 150 570,000Total Infrastructure 16,470,0001100..33 UUttiilliittiieess RReeqquuiirreemmeennttThe machinery setup will require electricity and ample water supply. A transformer and atube well with a water pump and water tank is already mentioned in the capital costdetails.1100..44 RReeccoommmmeennddeedd MMooddeeIt is recommended to acquire/buy the total land required as most of the machineryrequired needs fixed installation and cannot be moved easily once installed.
Pre-feasibility StudyBAL-PREF-11/ September, 2008301111 PPRROOJJEECCTT EECCOONNOOMMIICCSS1111..11 PPrroojjeecctt CCoossttCapital InvestmentLand 2,460,000Building/Infrastructure 16,470,000Machinery & equipment 800,000Furniture & fixtures 1,216,500Office vehicles 12,084,650Office equipment 57,310,000Pre-operating costs 1,083,519Total Capital Costs 91,424,669Working CapitalEquipment spare part inventory 79,063Raw material inventory 26,881,250Upfront insurance payment 644,233Cash 1,500,000Total Working Capital 29,104,5451111..22 PPrroojjeecctt RReettuurrnnssEquity ProjectIRR 46% 38%Payback Period (yrs) 4.37 4.19Total Project Investment 120,529,2141111..33 PPrroojjeecctt FFiinnaanncciinnggInitial Financing Rs.Debt 60,260,633Equity 60,260,633
Pre-feasibility Study Sea Food Processing PlantBAL-PREF-11/ September, 200831
Pre-feasibility Study Sea Food Processing PlantBAL-PREF-11/ September, 200832
Pre-feasibility Study Sea Food Processing PlantBAL-PREF-11/ September, 200833
Pre-feasibility Study Marble &Granite WarehouseBAL-PREF-06/January, 2005341122 KKEEYY AASSSSUUMMPPTTIIOONNSSTTaabbllee 1133--11 DDiirreecctt CCoossttss// TToonnDescription Cost/Ton in Rs.Direct Labor CostMachine Maintenance CostDirect Electricity CostDirect Water CostDirect Fuel (Tractor Diesel) CostTotal Direct Cost/TonTTaabbllee 1133--22 RReevveennuuee AAssssuummppttiioonnssFacility capacityPrice charged per Ton in year 1 (from Exports) 60,000Price charged per Ton in year 1 (Local market) 40,000Weighted average sale price 46,000TTaabbllee 1133--33 PPrroodduuccttiioonn RReellaatteedd AAssssuummppttiioonnssProduction capacity utilization 50%Production capacity utilization growth rate 8%Maximum capacity utilization 95%Cost of goods sold 1 34,000Cost of goods sold growth rate 8.0%Operating costs 2 (machinery maintenance) 100TTaabbllee 1133--44 EEccoonnoommiicc RReellaatteedd AAssssuummppttiioonnssInflation rate 6%Wage Growth rate 10%Electricity Growth Rate 6%Water Price Growth Rate 6%Vehicle Price Growth Rate 6%Office Equipment Price Growth Rate 6%TTaabbllee 1133--55 EExxppeennssee AAssssuummppttiioonnssAdministration Benefit Expense 10% of Admin ExpenseTraveling Expense 30% of Admin Expense
Pre-feasibility Study Marble &Granite WarehouseBAL-PREF-06/January, 200535Communication Expense 40% of Admin ExpenseOffice Expense 20% of Admin ExpensePromotional Expense 2% of revenueMachinery Insurance Rate 5%Vehicle Insurance Rate 5%Professional Fee (Legal, Audit etc) 1.5% of revenueBad Debt Expense 5% of revenuePre-Operational Expense Rs. 68,530TTaabbllee 1133--66 DDeepprreecciiaattiioonn RRaatteessBuilding/Infrastructure 5%Machinery and Equipment 10%Furniture & fixtures 10%Vehicle (tractor) 20%Office equipment 10%TTaabbllee 1133--77 CCaasshh FFllooww AAssssuummppttiioonnssAccounts Receivables Cycle (In Days) 60Accounts Payable Cycle (In Days) 30Cash on Hand Rs. 500,000Fish are caught from October to June, the peak being March to May. Ribbon fish, croakers, sole and some other species areexported to South Korea and China. Indian mackerel are exported to Thailand, Malaysia and Indonesia, while chilled fish areexported to Singapore and the Middle East.