Star CNG Station

EXECUTIVE SUMMARY
THE PROJECT:The proposed project contemplates to set up a new CNG
station 1 kilomiter ahead from khan pur ada rahim yar khan.
The project machinery is locally available.

LOCATION:
The proposed project contemplates to set up a new CNG
station 1 kilomiter ahead from khan pur ada rahim yar khan..
The proposed project site enjoys the benefits of 1) easy
availability of Natural gas which is main raw material for CNG
Stations , 2) quick access to main road, 3) Lcated at main
road and enjoys the excess of CNG fitted vehicles, 5)
availability of Skilled and Un-Skilled labor, and 5) free from
environmental hazards like water logging and salinity and
floods.
SPONSORS:
Sponsors of this project are highly qualified and have good
command over the project .
MARKET AND PLANT CAPACITY:
This project has good market and on its demand bases
this project will going to get the sales of 36288000 Rs
in 1st year and sales of 52416000 Rs in 2nd year and
sales of 76230 in 3rd year.

Star CNG Station

PLANT CAPACITY:
The capacity of this project is too good due to its latest
filling machines and compressor its has a capacity of
filling the 864000 vehicles per year .

MATERIAL REQUIREMENT:
Basic requirement of this project is natural gas.

PROJECT ENGINEERING:
Machinery of this project would be purchased from the
Karachi from a local provider .

MANPOWER:
The project would create employment opportunities for
the following staff:
Detail

Total Nos.

Skilled Labor

Semi-Skilled Labor

CNG Administrative Staff

IMPLIMENTATION STAGE:
This project will start its operation form the april2009
Project started and completed at jan2009 march2008.
COST OF THE PROJECT:

Total

Rs. (000)

Fixed Cost

32161

Net Working Capital

1437
33598

Star CNG Station

FINACIAL PLAN:

EQUITY
Total

33598
33598

Star CNG Station

OPERATING RESULTS:
ITEMS

(000)
2009

2010

2011

Sales

36288

52416

76230

Gross Profit

14462

21260

34082

Operating Profit

13731

20366

33072

7324

10994

17982

Net Profit

FINANCIAL POSITION OF THE COMPANY:

ITEMS
Current Assets
Fixed Assets

(Rs. 000)

2009

2010

2011

7335

14782

28217

29958

28882

27806

FINANCIAL INDICATORS:
Project Cost

IRR %

33598

33

Star CNG Station

TERMS AND CONDITIONS:
1. Proposed name of the project need to be mentioned.
2. Sponsors contribution is fully indulge in this project.
3. Land will be purchased in transfer to the sponsors names.
4. Any further financial assistance will be provided by its
sponsors.
5. Accessories and utilities will be arranged as per the
contract by the contract of civil work himself.

Star CNG Station

INTRODUCTION
The proposed project contemplates to set up a new CNG station 1
kilomiter ahead from khan pur ada rahim yar khan. The project machinery
is locally available. The capacity of this project is too good due to its latest
filling machines and compressor its has a capacity of filling the 864000
vehicles per year. CNG pump will work 360 days of years there will not be
any stop.
The total Capital Cost of the project is estimated to be Rs. 33598000.
This total Cost of the project comprises of Fixed Assets Rs. 32161000
and Initial Net Working Capital of Rs.1437000

Star CNG Station

Management
The overall management and control of the firm will be actively managed
by its partners who will actively participate in management decisions and
control the affairs of the firm.
Partners Name
1. Majid ali
2. Jam Imran Ahmad
3. Rehan Majeed
The partners will contribute equally in the equity of the project and will
equally participate in the profit and loss of the firm's business.

Sponsors
The sponsors of the project are professionally qualified and have valuable
and extensive experience. They have got good trading contacts and
market reputation in the industry. Moreover, they are professionally
qualified in the field of business Management from the Islamia University
of Bahawalpur under BBA Program. The sponsors experience would assist
the firm in its smooth and profitable operations.
The sponsors are financially sound and capable to contribute their part of
equity in the proposed project.

Star CNG Station

The Sponsors detail is as under:-

1.

Name

Majid ali

Age

22 years

Address

Gulshan Usman Block u Street no 6

House no 10d
Rahim yar khan

2.

3.

Qualification

BBA(Finance)

Experience

In same industry of 2 years

Name

Jam Imran Ahmad

Age

22 Years

Address

Rahim Yar Khan

Qualification

BBA (Finance)

Experience

2 months internship at NRL.

Name

Rehan Majeed

Age

23 Years

Address

Stellite Town 15-A, Rahim Yar Khan

Qualification

BBA (Finance)

Experience

1 Years experience of Accountancy.

Star CNG Station

Technical Analysis
Location of the Project
-

The proposed project contemplates to set up a new CNG station

1 kilomiter ahead from khan pur ada rahim yar khan.

Easy availability of raw material

Access to the main road, Sources of Power, water, fuel etc.

Availability of transport & communication like telephone, telex,

Internet etc.

Availability of skilled and Un-Skilled manpower

Manufacturing Process
-

Natural Gas is one of the most valuable natural resources

abundantly available in our country. Compressed Natural Gas
(CNG) is produced when the natural gas is compressed into
cylinders to be used as a fuel in the automobiles. The
compressed natural gas has been used as an automobile fuel
since 1940, and over the years, the technology has been
modified and refined. In the recent years, the usage of CNG as
an automobile fuel has significantly increased because of its low
cost and environment friendly nature thats why it is also called
as Green Fuel, because it possesses less carbon and led
contents than petrol.

Star CNG Station

GROWTH
There has been a tremendous growth in the CNG sector over
the years. The total number of vehicles on CNG was 100,000
and CNG filling stations was 150 at the end of year 2000. The
number of CNG vehicles and CNG filling stations has increased
to 210,000 vehicle and 220 stations respectively and by the
year 2005 they have tremendously grown up to 670 CNG
Stations and 600,000 CNG fitted vehicles. At present, there are
more than 2000 CNG stations &2 million CNG fitted vehicles.
The
:growth in terms of percentage is given in the following table
:Growth Percentage of Vehicles
Year
No. Of Vehicles on CNG
CNG Filling Stations

2005
600,000
670

2008
2,000,000
2,000

increase %
67%
67%

10

Star CNG Station

MARKET ANALYSIS
Due to the increasing prices of petroleum products, the
trend
on

of

who

converting

rise.
were

gas

cars

However,
reluctant

due

to

there
to

have

built-in

fueling

enhancing
public

the

regarding

CNG
exist

convert

safety

manufacturers
CNG

to

system

has

large

number

of

a
their

vehicles

concerns.

started

from

Recently,

manufacturing

system.

confidence
the

fueling

in

safety

This
the

minds

concerns,

of
and

people

petrol

to

many

car

cars

with

the

change

been

has
the
now,

led

to

general
more

people are inclined towards purchasing these factory-fitted CNG fueling

.system cars

Total number of CNG stations in Pakistan is only 2000,

which

is

quite

low

for

meeting

the

growing

demand

of

CNG. Apart from these 2000 CNG stations, many new CNG stations are
.being setup across the country

11

Star CNG Station

Star CNG Station

Estimated Cost of Land

Sr.
No.

Description

Area in
Marlas

Annexure - I

Unit
Cost

Rs ("000"

Total Cost

Land

50

2,80000

1400

Registration & Legal Requirements

50

400

Stamp Duty

50

300

District Council

50

100

Development Charges

50

1300

Total Cost of Land

1410

12

Star CNG Station

Annexure - II

Star CNG Station

Estimated Cost of Civil Works
Sr.
No.

Description

Type of

Unit of

Covered

Rs ("000")

Unit

Total Cost

Building

Construction

Rcc

Square foot

160

710

113

Control room
Compressor and
cylinder storage room

Rcc

Square foot

310

710

220

shed

Kanopi

Square foot

1650

450

724

office

Rcc

Square foot

550

710

119

Tuc Shop

Rcc

Square foot

224

710

159

Rcc

Square foot

250

710

177

Mosque
Car wash and Cng
repair

Rcc

Square foot

768

710

545

flooring

Running feet

7388

150

1108

Lawn

Running feet

2500

50

125

10

area

Rate Per

250

Contingency
Total Cost

3542

13

Star CNG Station

Annexure - III

Star CNG Station

Estimated Cost of Machinery

Sr.No.

Description

Qty

Rupees
("000")
Unit
Cost

Rupees
("000")
Total Cost

Gas compressor(8 to 15 PSIG) outlet pressure of

3625 PSIG 50 vehicle per hour

7500

Electric Control Pannel

200

200

Storage Cascade

45

30

1350

Cng Dispenser UK model=h430h-wl Capacity

400m3/hr

900

1800

Electric cables with tape fitting panel

Cooling tower

Contingencies

7500

265
1

150

150
550

Total Cost of Machinery

1,1815

14

Star CNG Station

Annexure IV

Star CNG Station

Estimated cost of the Project
Sr.No.

LCY

Land

14105 -

14105

Building

3542 -

3542

Machinery

10715 -

11815

Installation & Erection of Machinery

370

370

Insurance 5% of Cost of Machinery

590

590

Transportation 2% of Machinery

12

12

Furniture and Fixture

250

250

Office Equipment

350

350

1127

1127

09

Pre-operating expenses

Estimated fixed cost

Add: Net Initial Net Working Capital
Total Estimated Cost of Project

FCY

Total cost
("000")

Description

32161
1437
33598

15

Star CNG Station

Annexure - V

Star CNG Station

Initial Net Working Capital Requirement

Rs. "000"
A.

Current Assets:

Account
receieveable 6% of
sales

Advances and Deposits, & Prepayments

2177
210

Total Current Assets

2387

B.

Possible Current Liabilities:

Accounts Payable for cost of gas

800

Accrued Power Expenses

150

Total current liabilities

950

Initial net working capital

1437

16

Star CNG Station

Annexure - VI

Star CNG Station

Estimated Income Statement
Less:

Years ending September 30 :

Sales
COST OF SALES
Raw Material
Labor
Manufacturing Overheads
Depreciation
Total Cost of Goods Manufactured
Gross Profit
OPERATING EXPENSES:
Administrative Expenses
General Expenses
Selling Expenses
Total Operating Expenses
Operating Profit
OTHER EXPENSES:
Financial Charges on:
Long Term Loan
Bank Borrowings
Amortization of Pre-Production Expenses
Total Other Expenses
Profit Before Tax and Worker's Fund
Worker's Fund
Profit/(Loss) Before Tax
Tax Provisions @ 45%
Net Profit

2009
36288

2010
52416

2011
76230

16800
528
3422
1076
21826
14462

24640
618
4822
1076
31156
21260

33878
723
6471
1076
42148
34082

65
485
181
731
13731

74
558
262
894
20366

87
642
381
1010
33072

376
376
13355
13355
6009

376
376
19990
19990
8995

376
376
32696
32696
14713

7324

10994

17982

17

Star CNG Station

ASSUMPTION UNDERLYING EARNING

FORECAST

PRODUCTION AND SALES

The purpose of compressor is to compress the gas enabling it to discharge

the gas for refueling. This compressor requires an input pressure of 8 or
15 PSIG (pounds per square inch gauge pressure) from the main gas
supply with the outlet pressure of 3,625 PSIG. With this discharge
.pressure, the equipment can refuel 50 vehicles per hour

Gas is filled into the vehicles with the help of dispenser. This dual hose
.dispenser is capable of handling two vehicles at a time
There are various foreign manufacturers providing the CNG filling station
equipment. In this feasibility report, a British origin compressor (Ham
worthy Compressor, Bellies & Marcum, UK, Model: H430H-WL Capacity:
400 m3/hr) has been selected. This equipment is selected because of its
low electricity consumption, higher outlet pressure, low maintenance,
durable working, longer periods between overhauls and good market
.repute and presence
Different gas pressures are available in different areas of Pakistan from
the main gas supply line. The pressure of 15 PSIG is not easily available
at every location. Where the gas pressure of 15 PSIG is not available, in
that situation, the model with inlet pressure of 8 PSIG is used, which has
been manufactured to operate at a lower gas pressure. However, the
.consumption of electricity increases

18

Star CNG Station

The total capacity of the selected equipment is 400M3/Hr with a total
.power load of 93 KW
Currently, the CNG cylinders with two different capacities are installed in
the CNG fitted cars. One type of cylinder has a capacity of 6kg and the
other has a capacity of 8k.
Price are assumed to be according with the current market price that is
imposed by Govt.

19

Star CNG Station

Based over these assumptions, following is the year-wise detail of
production, Sales and Sales Revenue of the proposed project:-

Annexure-V

Production
Capacity of 400m3/hr/filling unit
Filling units

No. of units

Filling/unit

50 cars

Total

Annual fi
864000
864000

20

Star CNG Station

Annexure-VI-A

Capacity Utilized
a)

Vehicles filled
Total vehicle filled

300/day
2009
vehicle
filled
108000

400/day
2010
vehicle
filled
144000

550/day
2011
vehicle
filled
198000

108000

144000

198000

Sales Revenue:
Description
a)

Cylinder capacity 7kg/car

Rupees 000

Unit Price
48 (2009)
52(2010)

36288
52416
76230

55(2011)

21

Star CNG Station

Annexure-VI-A

Raw Material:
2009

a)

Natural gas
Total

Rs 000
2010

2011

16800

24640

33878

16800

24640

33878

22

Star CNG Station

Annexure-VI-A

Labor Cost:
Direct Labor:
Sr.
No.
1
2

No. of

Salary/Month

Employees

/Worker

Skilled

10000

Annual
Salary
("000")
240

Semi skilled

6000

288

Discription

Total

528

Assumptions:
1

Direct labor will increase every year @ 17%.

Year Wise Wages of Labor:

Sr. No.
1

Labor cost

528

Years
2010
Rs ("000")
618

Total Cost of Labor

528

618

Description

2009

2011
723
723

23

Star CNG Station

Annexure-VI-A

Manufacturing Overhead Cost:

a)

Description

Rs
("000")

Insurance: @ 1% of Fixed Assets Cost

321

Fixed Cost:

Maintenance:
30
71

Maintenance of filler 15000/unit

Maintenance of Building @ 2% of Cost of Building

422

Total Fixed Cost

b) Variable Manufacturing Expenses:

3000

Electricity charges
Total Variable Cost

3000

Year ending Manufacturing Overheads as per Different Capacities:

Years
Description

2009

2010

2011

Rupees ("000")
Fixed Cost
Variable Cost
Total Cost of Manufacturing Overheads

422

422

422

3000

4400

6049

3422

4822

6471

24

Star CNG Station

Annexure-VI-A

Administrative And General Expenses:

Sr.
No.
1
2
3
4
5

Designation
Manager
Deputy manager
Clerk
Watchman
Peon/Sweeper

No. of
Employees
1
1
1
2
2

Salary/
Month
25000
10000
8000
6000
5000

Rupees
("000")
Annual
Salary
25
10
8
12
10
65

Total

General Expenses:
Sr. No.
1
2
3
4
6
7
Total

Description
Traveling Expenses
Printing & Stationary
Telephone, Telex, Postage
Entertainment
Legal & Audit
Miscellaneous

Year Exp.
("000")
75
30
80
200
20
80
485

Assumptions:
1
Administrative Salaries will increase @ 15% every year.

25

Star CNG Station

Year Wise Administrative Salaries:

No. of
Sr.
No.

Designation

Employees

Rupees ("000")
2009

2010

2011

Manager

25

29

33

Deputy manager

10

12

14

Clerk

10

Watchman

12

14

16

Peon/Sweeper

10

12

14

65

74

87

Total

General Expenses:
Sr.
No.

Description

Rupees ("000")

Traveling Expenses

75

Printing & Stationary

30

Telephone, Telex, Postage

80

Entertainment

200

Legal & Audit

20

Miscellaneous

80
Total

485

86

99

35

40

92

106

230

265

23

26

92

106

558

642

Selling Expenses:
Selling Expenses are assumed to be .5% of Sales
Sr.
No.
1

Description
Selling Expenses .5% of Sales Revenue

Rupees 000
181

262

381

26

Star CNG Station

Annexure-VI-A

Depreciation Schedule of Fixed Assets:

Sr. No.
1
2
3
4

Description
Machinery
Building
Furniture & Fixture
Office Equipment
Total

Total Cost (Rs.)

11687 15
3542 20
250
5
350
5

Rs. ("000")
779
177
50
70
1076

Note:- Depreciation will be constant over the life of assets.

Year Wise Depreciation:

Description

Years
2009

2010

2011
Rupees ("000")

Depreciation

1076

1076

Pre-Production Expenses:
Sr. No.

Description

1076

Rs.
("000")
350

Registration Charges

NOCs

Sales Tax Registration Charges

Consultancy & Report Preparation Charges

Printing & Stationary

45

Conveyance Charges

35

Telephone & Postage

45

Salaries and Wages during Construction

90

Total Pre- Preproduction Expenses

300
12
250

1127

27

Star CNG Station

Annexure-VII

Star CNG Station.

Cash Flow Statement
End of
Construction

SOURCES OF FUNDS:
Operating Profits
Add: Depreciation
Total Funds from Operation
Other Sources:
Long Term Loan
Bank Borrowings
Paid-Up Capital
Total Sources of Funds
APPLICATION OF FUNDS:
Investment in Fixed Assets
Financial Charges during
Construction
Pre-Production Expenses
Repayment of:
Long Term Loan
Bank Borrowings
Financial Charges On:
Long Term Loan
Bank Borrowings
PAYMENT OF:
Taxes
Dividends
Worker's Fund
Short Term Investment
Increase in Current Assets
(Other than Cash)
Total Application of Funds
Cash Surplus/(Deficit)
Cash at the Beginning of the
Year
Cash at the end of the year

Operating Years
2009

2010

2011

13731
1076

20366
1076

33072
1076

14807

21442

34148

14807

21442

34148

29934

1127

6009
4000

8995
5000

14713
6000

210

2177

967

1429

12186
2621

14962
6480

22142
12006

2327

4948

11,428

2327

4948

11,428

23434

33598
33598

31271
2327

28

Star CNG Station

Annexure-VIII

Star CNG Station

Balance Sheet
End of
Construction
ASSETS:
CURRENT ASSETS:
Cash and Bank Balance
Short Term Investment
Accounts Receivable
Advances, Deposits and Prepayments
Total Current Assets
FIXED ASSETS:
Fixed Assets at Cost
Accumulated Depreciation on Fixed Assets
Fixed Assets Net
Intangibles
Total Assets
LIABILITIES AND EQUITY:
CURRENT LIABILITIES:
Bank Borrowings
Taxes Payable
Dividend Payable
Worker's Fund Payable
Current Maturity of Log Term Debt
Total Current Liabilities
LONG TERM DEBTS:
Long Term Debt
Total long Term Debt
EQUITY:
Paid-Up-capital
Retained Earnings
Total Equity
Total Liabilities and Equity

Operating Years
2009
2010
Rupees ("000")

2011

2327
210
2537

4948
2177
210
7335

11428
3144
210
14782

23434
4573
210
28217

31034
31034
1127
33598

31034
1076
29958
751
46931

31034
2152
28882
376
53587

31034
3228
27806
66293

6009
6009

8995

14713

8995

14713

33598
33598
33598

33598
7324
40922
46931

33598
10994
44592
53587

33598
17982
51580
66293

29

Star CNG Station

Annexure-IX

BREAK-EVEN ANALYSIS
Commercial Break-even in the first operating year:

Items
Raw Material

Variable
Cost

( Rs. In '000' )
Fixed
Cost
Total Cost

16800

16800

528

528

3000

422

3422

1076

1076

550

550

Labor
Manufacturing
Overheads
Depreciation Expenses
Administrative & General
Expenses
Selling Expenses
Interest / Mark-Up Expenses

181

181

Amortization of Pre-Production Expenses

Total:

Sales value of Production:

19981

376

376

2952

22933

36288

2952

Break-Even Point
36288

X 100
19981

18%

30

Star CNG Station

BREAK-EVEN ANALYSIS
Cash Break-even in the third Operating Year:

( Rs. In '000' )
Fixed
Variable Cost
Cost

Items

Total
Cost

16800

528

16800
528

3000

422
550

3422
550

181
-

181
-

Worker's Participation Fund

Debt Payment

Tax

6009

6009

19981

7509

27490

Raw Material
Labor
Manufacturing Overheads
Administrative & General Expenses
Selling Expenses
Interest / Mark-Up Expenses

Total:

Sales from Operations:

Break-Even Point:

36288

7509
36288

19981

X 100

46%

31

Star CNG Station

Annexure-X

Weighted Average Cost of Capital

("000")

Nature of Fund

Amount

Interest Rate
%

After Tax
Rate %

Total
Interest

IN this project there is no long term debt so there would not be this annexure
participation.

32

Star CNG Station

Annexure - XIII

FAT Oil Mills (Pvt) Limited.

Financial Plan
Rupees ("000")
Description
Total Fixed cost of the project
Initial Permanent working capital
Total cost of the project

Long Term Debt

Equity Participation
Total Capital Required

LCY

FCY

Total cost

32161

32161

1437

1437

33598

33598

33598

33598

33598

33598

Debt/Equity Ratio

KEY SUCCESS FACTORS

33

Star CNG Station

:Few factors ensure the profitability of the project which is as follows

Location of the project will play a pivotal role in the successful running of the CNG
.station. The daily turnover of the cars largely depends on this important factor
Selection of proper equipment is another key for carrying out the successful
.operations of the proposed project
OPPORTUNITIES
:The project would have a number of opportunities
The project will provide cheaper fuel to its customers compared to the petroleum
.products which are already on the higher side
Government has exempted the imposition of sales tax and custom duties on the import
.of CNG kits and CNG plant and equipment
HDIP, a non-profitable organization working under the umbrella of Ministry of
Petroleum and Natural Resources, provides consultancy services to the interested
.parties for setting up the CNG filling stations
This project will reduce the import bill of petroleum products and promote the use of
gas fuel, as it is abundantly available in our country in this way it can save our foreign
.reserves
.Environment friendly / green fuel will protect the environment from deadly pollution
THREATS/CONSTRAINS
:The project will be facing the following threat
.Market saturation over a longer period of time due to a large number of entrants
Threat of increase in the prices of the natural gas by the government. The gap between
.the prices of Petrol and Gas is becoming narrower, since the last month
.Shortage of gas supply in winter season
.The under-table money for acquiring the NOCs is another threat for the project
ALTERNATIVE INVESTMENT OPPORTUNITY
The cost of land is the major portion of investment in this project. If any investor does
not have enough resources for the acquisition of land, he/she also has another
.alternative course of action to setup the CNG station without acquiring the land
The investor can make investments only in the purchase of CNG plant and equipment
and install this equipment with any existing petrol pump. In this case, the investment
for installing the CNG equipment will be made by the investor and the space will be
provided by the dealer/owner of the existing petrol pump. The investor will pay 15%
commission on the total revenue to the dealer/owner of the petrol pump. Moreover,
the investor can also avail lease facility from any leasing company on the purchase of
.CNG plant and equipment

34

Star CNG Station

35

Star CNG Station

APPENDICES

36

Star CNG Station

37

Star CNG Station

A list of some of the available equipment and machinery provided by HDIP is as

:follows
Table: Suppliers
Suppliers Name
Rix Services, New Zealand

Available Models

Compare UK Ltd, UK

,2JJS3G-178, FX-150, 3KX3G-40

6W5G-150
Gazpack 36, Gazpack37

Norwalk Company Inc. USA

C-75-3, C150-4, NQSV3

Sulzer Burckhardt Engg. Works

Switzerland
Hamworthy, Bellis & Morcom UK

C40111S, C50214S

Safe s.r.l Italy

Hurricane, Grimmer Industries,
USA
Chengdu Jinxing Chemical
Machinery and Equiment Factory,
China
Chonqing Air Gas Compressor
Factory, China

H430H-WL, H280H-WL, V130HWL

,SW75SE-F1-EM, SW110SE-F1-EM
,SW110-F1-EM, SW132-F1-EM
SW90F0, 35-EM
CNG90, CNG 125, CNG250

Unigas NewZealand

ZW-3.45/250JX, ZW-5.0/1-23,
-ZW
5.52/0.5-250JX
L-3.8/1-250, L-3/1-250, L-5/0.56,250
,L-2.9/0.56-250, L-4.65/0.56-250
W3.8/0.56-250, W-3.8/1-250
RHINO PAR-75VE 4-8
RHINO PAR-1-DE 4-82
RHINO-PAR 150DE4-10
Apollo VR-550

Compare Mahle GmbH, Germany

5409.2NG.EU

Sicom SRL , Italy

IFDE-23SE-650.250.20

Intermech Ltd. NewZealand

38

Star CNG Station

39