FEASIBILITY REPORT ON 7 STARS CNG STATION PREPARED BY:SHEHARYAR ALI HABIB ULLAH KHAN MUHAMMAD ABDAL SAJJAD HUSSAIN

6056 6312 6140 6162

SUBMITTED TO: YOUSUF SHERJEEL

SUBJECT: MANAGERIAL COMMUNICATION

DATE:- 30-11-2011 Karachi.

AL REHMAN PSO STATION

TO WHOM MAY CONCERN

This to certify that the student of Iqra University named Mr. Sheharyar Ali, Mr. Habib Ullah Khan. Mr. Sajjad Hussain and Mr. Muhammad Abdal visit to our Al rehman pso station for their Project. It is pleasure to welcome your students and i assured them to provide all the necessary information relevant to the project.

________________
EMAAD BIN AQEEL MANAGER AL REHMAN PSO STATION

Feasibility Report on 7star CNG Station

To
From

MR. Yousf Sharjeel Istructor , Managerial Communication , Iqra University Sheharyar Ali ID6056, Muhammad Abdal ID6140,Habib Ullah Khan ID 6312,Sajjad Hussain ID 6162 Feasibilty report on 7 stars CNG station November 30, 2011

Sub DATE

We are submitting to you the Feasibility report on our project 7 star CNG station which is located at Nipa chorwangi. The purpose of the report is to inform you about our business 7 star CNG station. This report contains the complete information about CNG station business. If you have any questions concerning our project please feel free to contact Sheharyar Ali ID: 6056 head of the group mobile number 0300-2312407.

Yousf Sharjeel

Acknowledgement
First of all we would like to thanks, Our Almighty Allah, for giving us knowledge, courage and guidance from the start of our work, until we accomplish our research despite of all the hindrances and obstacles we had encountered. We would like to thank Mr.EMAAD BIN AQEEL Manager AL-REHMAN PSO station address plot number 7/d sector 2 lyari near truck stand karachi and Mr.MUJAHID in charge CALTEX station main university road karachi for providing us the useful information about our project 7star CNG station. Lastly, to our Instructor, Mr. Yousf Sharjeel, for giving us guidance and comfort to succeed

Feasibility Report on 7star CNG Station

TABLE OF CONTENTS Serial

1
2

DESCRIPTION
Mission Statement Executive Summary Introduction to Report Objective of the Report Scope of the Proposed Business Limitation of the Proposed Business Office Furniture Site Map Historic Background of Similar Projects Proposed Company Profile Direct Benefits In Direct Benefits Present Status of Current Proposed Business Target Client Size Proposed Location Land Area Marketing Strategy Proposed Equipment /Machinery Required Present Population to be Served Total Time Required Loan Justification of the Proposed Business

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

23 24 25 26 27 28 29 30 31 32 33

Employee Gender Ratio Salaries Proposed Capacity HRM or Communications Proposed Facilities Staff Training and Development Managerial Hierarchy Administration Hierarchy Total Estimated Cost Expected Loss Projection Expected Profit Projection Conclusion

Feasibility Report on 7star CNG Station

MISSION STATEMENT Our target is to provide the greatest purify compressed natural gas. We shall provide 24/7 services to our valued customers to give more facilites to our valued customers we shall provide the servies of tire shop as well as car wash station.

EXECUTIVE SUMMARY
Project Corporate Address of Project 7 Star CNG station Partnership Business Nipa Chorwangi besides NIPA building

We are the student of MBA 1st semester IQRA University. We are about to start a business of CNG Station. Its a very attractive business now a days every car is using CNG as fuel because it is cheaper then petrol and CNG has become the basic need of society and especially the public transport is also switching to the CNG from diesel. CNG station business is a business through which we can earn profit beyond the thinking. This is why we have selected this business to do. We shall start our business at university road near nipa chorwangi beside the building of national institute of management. CNG is environment friendly fuel since it unleaded and release less then 10% carbon mono oxide as compared to petrol and is an indigent our fuel commonly know as natural gas and sui gas. Natural gas is compared to high pressure for storage for this purpose a compressor and storage facility is installed, the vehicle torun CNG, is suitably unadifed to have a vehicle a storage cylinder, high has piping and filing system and other system like pressure regulator. We will just provide CNG .we ware following the single product approach. So the problem we will have to face the load shedding of Gas which has been increasing day by day due to deficiency of natural gas in our country ,this will badly affect our business .Second problem that we will have to face is the low pressure of gas from the side of sui southern gas company. And final problem that can hit our business very badly is the un certain situation of city Karachi in the terms of law and order situation. The whole machinery would be import from canada. The financial ratio of our company is increasing. Its mean that our company is prosper day by day. So the company is doing very well business and then is no change of loss Fixed Cost = 5 crore 72 Lac Mean of finance We shall get money from our resources and the remaining from Bank Bank dept = 1 crore 72 Lac Our resource = 4 crore Name of Bank We shall get loan from Industrial Development Bank of Pakistan Name of Partners Mr. Sheharyar Ali Mr. Habib Ullah Khan Mr. Abdal Mr. Sajad Hussain Solangi

Feasibility Report on 7star CNG Station

The detail of machinery gas compressor electric control panel storage cascade priority panel for vehicle CNG dispenser

Implementation Period The project is expected to be implemented with 6 to 8 months.

INTRODUCTION TO REPORT
The proposed project will consider setting up a new CNG station. The CNG station is located near NIPA chorwangi besides the building of national institute of management the project machinery will be imported from canada. The total estimated cost for the project is 5 crore 72 lac. The capacity of this project is too good due to its latest filling machines and compressor. It has a capacity of filling the 864000 vehicles per year. CNG pump will work 360 days of years there would be no holiday. The total Capital Cost of the project is estimated to be Rs. 5 crore 72 Lac.

OBJECTIVE OF REPORT
Main objective of report is to describe complete information about our business like What is our business? Why we are doing CNG station business? How much we can earn profit through this business? What are the threats of our business that can be dangerous for our business? How we will do marketing of our business? What is total estimate of our business?

So these are the main objective of our business. And report gives the answer of above all questions.

SCOPE OF THE PROPOSED BUSINESS

CNG Business is one of the fast-growing businesses nowadays. CNG is much cheaper then petrol and diesel thats why many people convert their vehicle into CNG, almost 50% vehicle in Pakistan has converted to CNG. It has a bright scope because many new cars have already cng kits installed and old vehicles are still switching to cng. Due to opening CNG station in each area of city Unemployment is decrease and many jobs are available for labor. It has a bright future because in gas is the national resource of Pakistan. The cng stations are working in Pakistan since many years.

LIMITATION OF THE PROPOSED OF BUSINESS

The proposed business faces the limitation is as follows. 1. Checking of cylinder 2. Too much legal process 3. Training is necessary for labor 4. shortage of gas 5. Too much cng stations 6. security risk 7. Clintons 8. fire risk

OFFICE FURNITURE
Furniture and fixtures mainly include tables, chairs, sofas, fans & lights, carpet, curtains and fire extinguishers. It is estimated that the furniture and fixtures of Rs.1 Lac would be purchased

SITE MAP
For setting up a CNG filling station, location is the prime factor. As per the requirements of the Government of Pakistan, the filling station must be situated in a commercial area. CNG filling stations are not allowed to be installed in the residential areas. A minimum of nine thousand (9000) square feet of land with at least 75 feet front opening is required for installing CNG filling station. An amount of Rs.17 million has been allocated for the acquisition of nine thousand square feet of commercial land in KARACHI in the area of GULSHAN iqbal on university Road.

Feasibility Report on 7star CNG Station

HISTORIC BACKGROUND OF SIMILAR PROJECT

CNG itself is a remarkable phenomenon that has been out in the market for more than 10 years now. Its obvious benefits are clean-burning fuel which does not emit many of the impurities that gasoline produces. In addition, it is much more fuel efficient in comparison to gasoline. Because of the clean-burning fuel, it increases the longevity of the vehicle and maintenance intervals are increased; whereas oil and filter changes are required every 3,000-4,000 miles on typical gasoline vehicles, natural gas vehicles require similar oil and filter changes every 9,000-10,000 miles. Natural Gas vehicles that are uniquely equipped with a clean burning fuel system (Compressed Natural Gas) enables you to save substantially at the pumps (almost half the cost of gasoline) while producing lesser emissions & pollutants to the environment.

PROPOSED COMPANY PROFILE

7 STAR C.N.G. STATION Address : Phone(s) : Fax(s): Email : City : Nature of Business : 7 Star CNG Station Nipa chorwangi beside NIPA building 92-021-2411714 , 92-021-2411713 2411714 7star@info.net Karachi Pakistan C.N.G. Filling Station

DIRECT BENEFIT
Those profit which we get from selling our product known as direct benefit. For instance if we are in business of CNG, so after selling the CNG, the profit we get is known as direct benefit. As well the people of Karachi and the people of GULISTAN-E-JAUHAR would get the get the direct form taking CNG from our station. Government of Pakistan would be get direct benefits, employees would get direct benefits from working in our station as well as the dealer and the supplier.

IN DIRECT BENEFITS
The indirect benefit from cng station is that would we take not from selling cng. 1. Rent from tuc shop 2. Rent from service station 3. Rent from tyre shop These are the indirect benefits which would we get from cng.

PRESENT STATUS OF PROPOSED BUSINESS

The Present Status Of cng stations Is Very Good. The Price of Petrol Is Increasing Day By Day So the People Are Converting Their Vehicle from Petrol to Cng as well as public transports is also switching from diesel or petrol to cng. It Is Cheaper than Petrol there fore it has bright business future. The Cng Kits are already installed in new cars. In Pakistan Many Cng Stations Are Opened and Running a Success Full Business.

TARGET CLIENT SIZE

The Target Client Size for the proposed business is vehicle running on the road. Every vehicle which have cng kit they are the client for such business.

PROPOSED LOCATION
The location for the proposed business is near to NIPA CHOWRANGI beside national institute of management. It is the best location for the cng station because after safari park there is no any cng station till Askari Park and it is very much needed to have at least one cng station over there. Therefore we have decided to open a cng station over there.

LAND AREA
The land area is 1000 GHz .there will be also a car wash service station and a tire shop and a tuc shop at the proposed area.

MARKETING STRATEGY
The marketing strategy would be very simple. Our marketing team has made a revolutionary idea for the success of the business. On serious note cng stations are very much popular and it doesnt need any marketing but we have made a strategy that we will give adds in print and electronic media as well as we will announce a scheme for customers on refilling cng kits a sample is shown in the chart.

REFILLING OF RS
1000 1500 2000 5000

FREE
CAR WASH CAR WASH +INTER CLEANING FULL SERVICE CAR WASH +OIL CHANGE

Feasibility Report on 7star CNG Station

PROPOSED EQUIPMENT AND MACHINERY

The main machinery at CNG station is compressor. The technology involved in machinery is very advance and technical. Pakistan is not to advance to produce or manufacture the compressor because Pakistan has no technology to manufacture it so the whole technology involved is imported from the Canada because Canada is very advance in technology and manufacturing high standard of compressor. Dispensing machine also imported from Canada. Compressor imported from Canada is very good in its function. It contains two generators one is run by the natural gas and other is run by electricity. So that in case of absence of electricity or Sui gas other generated can be used. This compressor converts the Sui gas into CNG with the help of 3 way pipelines and cooling tower then this compressed natural gas is transferred to Dispensing machine to vehicles and system is control by Control panel The major equipment required for cng station are: gas compressor electric control panel storage cascade priority panel for vehicle CNG dispenser Gas compressor

Electrical control panel

Storage cascade

Feasibility Report on 7star CNG Station

Priority panel for vehicle

CNG dispenser

EXPLAINATION
First of all it enters into the FILTERS for purification purpose and this consists of two filters. And then it enters into a TANK and then again enters into the MICRO FILTER for further purification and finally enters into the main compressor room. Here it is operated in a two ways, manually and Auto control. After these it enter into the four stage compressor machine for the purpose of cooling this is a complex stage and the main purpose of this machine is just only compress the gas in order to make high pressure the next step it movies to the priority panel from where it filled into the gas cylinder and finally reaches the vehicles through the help of dispenser.

PRESENT POPULATION TO BE SERVED

The present population that would be served by the seven star cng is 30 lac in which 12 lac would be from Gulistan-e-Jauhar as well as 18 lac from Gulshan-e-iqbal except of that we will provide cng to public transport.

TOTAL TIME REQUIRED

To fulfill all the formal and legal requirements, to get the license from government and to get the loan from banks it will several months. To purchase the land, to construct, to install the machinery and to setup all the thing it will take estimated 6 to 8 month.

LOAN
50% of total amount which is require opening a CNG station will be contributed by the 4 partners as ratio 4 :2:2:2 and rest 50% amount will be covered by taking the loan from bank against keeping the partners assets girvi.

JUSTIFICATION OF THE PROPOSED BUSINESS

With out fuel no vehicle can work whether it is on petrol, diesel or on CNG nowadays it is trend of CNG. More than 55% people of Karachi having vehicle on CNG due to cheaper than the other fuels. it is the need for vehicle and people to fill the CNG in their vehicle. it is one of the very important needs, so that is why we decided to open a CNG station.

EMPLOYEES GENDER RATIO

Only males will work on our business so the employee gender of female shall be zero. No female would work because we are not required female.

Feasibility Report on 7star CNG Station

SALARIES
Manager Cashier Labor Security Guard Sweeper Total per month Salary Rs: 20,000 Rs: 8000 Rs: 6000x16=128,000 Rs: 7000x3=21000 Rs: 300x2=6000 Rs: 157000

PROPOSED CAPACITY INCLUDING HRM AND COMMUNICATION

We shall hire 24 regular staff to operative our CNG station. We shall hire a professional instructor for training. We shall hire a legal advisory for legal matters of company .For the communication we shall build a website for the marketing purpose of the station as well as the taking comments of our valued customers. We shall provide the internet, telephone, fax machine for the communication and also provide the email address to our customers for feedback and complains.

PROPOSED FACILITES
We shall provide the following facilities to our valued customers Tuck shop Tire Shop Care wash service station Toilet facility Offer payer facility Water for drinking We shall provide the following facilities to our employees TA/DA facility for manager and technical staff Lunch shall be served to morning shift s employees Dinner shall be served to night shift s employees

STAFF TRAINING AND DEVELOPMENT

We shall hire a technical and professional instructor for our Gas loader boys who shall give them technical training to them. We shall send technical staff to technical training institute for increase the more technical ability on the expensive of Gas Station Company then they well be more able to look after CNG stations machinery .

MANAGERIAL HIERARCHY

PARTNERS

MANAGER

TECHNICAL STAFF

IN CHARGE

CASHIER

SECURITY

GAS LOADER BOYS

SWEEPER

The manager shall report to the business partners of 7star Cng Cashier shall directly report to the managers The technical staff would work under the manager Sweepers, Gas loader boys, security staff shall report to their in charge and the In charge would report directly to manager.

Feasibility Report on 7star CNG Station

ADMINISTRATIVE HIERARCHY
PARTNERS Mr. Sheharyar Ali Mr. Abdal Mr. Sajad Hussain Mr. Habib ullah Khan SHARES 40% 20% 20% 20%

Mr Sheharyar holds 40% shares of CNG business and the remaining each partners holds 20% shares of the business. Similarly Mr. Sheharyar will get 40% of profit from business and 20 % profit each remaining partners. The remaining partners cannot take decision without the approval and consensus of Mr. Sheharyar because he holds 40% shares of business and got authority similarly Mr. Sheharyar can take decision without the approval and without the consensus of remaining three partners. PARTNERS 1 Mr.SHEHARYAR ALI REBONESBALITY Is responsible for all human resources activities of CNG station.

Mr. HABIB ULLAH KHAN

He shall look after the legal matters of CNG station.

Mr. ABDAL

He shall look after the engineering department of station.

Mr. SAJAD HUSSAIN

He shall look after the finance matters of the CNG stations.

TOTAL ESTIMATED COST

Land price Office Furniture Different Taxes Construction Expenditure 4 Crore 1 Lac 2 Lac 2 Lac

License Expenditure Interior Expenditure Equipment / Machinery Expenditure Labor Cost Water and Gas Connection Expenditure TOTAL EXPENDITURE

1 Lac 3 Lac 1 Crore 30 Lac 5 Lac 5 Lac 5 Crore 72 LAC

Feasibility Report on 7star CNG Station

EXPECTED LOSS PROJECTION

Gas Load shedding. Low pressure of Gas from the side Sui Gas Company. Un certain law and order situation of city Un certain political stability. Un certain situation of country s economy Devalued of currency. Load shedding of electricity.

These are the threats that damage our CNG station and give loss to our business and can wind up our business within 6 month. So we must up keep save our business and have to be aware of these threats.

EXPECTED PROFIT PROJECTION

If every thing goes fine and we do sale of our CNG about 20 Lac per month and also get good rent of tuc shop, tire shop, as well as car washing station the total of these shop would be 1 Lac then we can get recover our invested money with in 3 to 4 years and after then we will be able to earn profit.

CONCLUSION
CNG Station business is one of the most successful businesses because there is a very high margin of profit and very low margin of loss in this sort of business. Although it is very hard to open a CNG Station because there is required a lot of investment, to get the license from the Government and many other formalities but we hope that we will open a CNG Station fulfilling all these legal formalities. We pray that God may help us in opening a CNG Station and we can run it very well and earn a very high margin of profit. Ameen