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ICE CREAM FACTORY
Institute Of Business Management
ICE CREAM FACTORY
Mohammad Ahsan 7710 Amit Ramzan 7233 7131
SUBMITTED TO Sir Mohammad Ali Sheikh
Institute Of Business Management
ICE CREAM FACTORY
TABLE OF CONTENTS
LETTER OF ACKNOWLEDGEMENT MANAGEMENT SPONSORS MARKET APPRAISAL
OVERVIEW OF LOCAL INDUSTRY MARKET SIZE DEMAND FOR ICE CREAM DEMAND AND SUPPLY GAP MARKET SEGMENT
5 6 6 7
7 9 9 9 11
MANUFACTURING PROCESSES HARDENING RAW MATERIALS USED SIZE OF THE FACTORY EQUIPMENTS LAYOUT OF THE FACTORY
12 15 16 17 18 20
ESTIMATED INCOME STATEMENT ESTIMATED BALANCE SHEET ESTIMATED CASH FLOW STATEMENT FINANCIALS
22 23 24 25
Institute Of Business Management
ICE CREAM FACTORY ECONOMIC ANALYSIS ECONOMIC RATE OF RETURN 26 26 ANNEXURES COST OF LAND COST OF CIVIL WORK COST OF MACHINERY LOCAL COST OF MACHINERY IMPORTED ESTIMATED COST OF PROJECT INITIAL WORKING CAPITAL ANNUAL PRODUCTION DETAILS OF PRODUCTION SALES AND SALES REVENUE BREAKEVEN WACC 27 27 27 28 28 29 29 30 31 33 33 BIBLIOGRAPHY 34 Institute Of Business Management Page 4 .
ICE CREAM FACTORY LETTER OF ACKNOWLEDGEMENT It is a matter of great satisfaction that all our efforts ended with this thorough report based on PROJECT APPRAISAL. Regards. Sidra Ahmed Mohammad Ahsan Amit Ramzan Institute Of Business Management Page 5 . Last but not the least. Here. which we will always carry with us ahead and make the most use of it wherever possible. this report came to a successful end due to the joint efforts and cooperation of all group members who worked hard to make it better. we would like to state that firstly. we would to thank Sir Mohammad Ali Sheikh whose guidance and teaching backed us all the way while preparing this report. His teachings are something. it was a blessing of The Almighty Allah that we completed this report without any barriers and shortcomings in between. Secondly.
iv. Mohammad Ahsan Sidra Ahmed Amit Ramzan Designation General Manager Deputy Manager Deputy Manager Deputy Manager SPONSORS The sponsors of the project are highly qualified and are well experienced in the business field. Sponsor’s names are mentioned below: i.ICE CREAM FACTORY MANAGEMENT The proposed project is being installed by mutual co-operation and the work will be managed by hard working management team. they have good business reputation in the industry. Mohammad Ahsan Sidra Ahmed Amit Ramzan Institute Of Business Management Page 6 . ii. Partners Name i. iii. Besides this. ii. Below mentioned are the names along with the designations who will be responsible for managing the entire project in an appropriate and effective manner. iii. iv. Sponsors are capable enough to help in this project in order to make it possible and viable too.
major raw materials for ice cream are butter. we can conclude that Punjab is one of the province that produces milk in an abundance amount. There are lots of ice cream manufacturers in Pakistan. Below mentioned chart depicts that how much each region produces milk. thus we have planned to purchase milk from Punjab. our proposed project will be beneficial as it is being setup in the country that is rated among top most milk producing countries. If we deeply look at the raw materials side. Thus. Pakistan has the market share of ice cream of around PRs8bn. purchasing milk from Punjab is a suitable decision for us. Institute Of Business Management Page 7 . 33bn of milk is produced annually in Pakistan.ICE CREAM FACTORY MARKET APPRAISAL OVERVIEW OF LOCAL INDUSTRY Looking at the local industry of ice cream that is a part of food & beverages industry. From the above graph. Around 20 million of milk was produced in Punjab in the year 2002 and this has been increase further. consumption of milk and sugar is now becoming a problem for Pakistan. milk and sugar. Punjab is one of the major milk-producing province in Pakistan. industries of Pakistan are no doubt facing a lot of problems. There are around 8 million farming households in Pakistan. Thus. Pakistan is rated 4th largest milk producer country. Due to the rise in the prices of milk and sugar. Pakistan is agricultural country so all the raw materials are easily available for it.
an ice cream generally comprises of the below mentioned items: PRODUCT Sugar Milk Solids Gelatin or other stabilizers Solid content Fat SNF QUANTITY 12%-15% 9%-11% 0. Rocco.5% 30%-40% 10% 10% The composition of milk and an isolated ice cream is given below: INGREDIENTS Protein % Fat % Carbohydrate Calories/100kg Source: Economic Review MILK ICE CREAM 4.25%-0.0 12.ICE CREAM FACTORY Historically POLKA is the oldest and largest company in this industry their aim was to make their product available everywhere in the Country.0 12. Hicco.0 20. Omore..0 208 Institute Of Business Management Page 8 . Gourmet and yummy. In local market. Now there are number of producers’ e.0 28.g. Walls took over polka and continued with this differentiation of availability.0 204 ISOLATED ICE CREAM 7. they have significant market share as well.
On the other side. Year 2010 2011 2012 2013 2014 2015 Total demand(millions) 172 219 267 271 275 280 Constant factors: This prediction is based on following assumptions. the demand of ice cream in Punjab province varies. the demand rate of ice cream is constant. DEMAND FOR ICE CREAM Ice cream is the easily available product in the market but when we analyze its growth in the current market.ICE CREAM FACTORY MARKET SIZE Pakistan has the market size of ice cream of around 70mn liters of the branded ice cream and if we look at the unbranded sector then the size can be doubled.6% per year (world bank report) Per person consumption is 1 liter per person and will be at 1. Institute Of Business Management Page 9 . Unilever. Looking at the production side. Population is growing at 1. we can see the upward trend which shows that there is a place in the market for expansion of existing companies and entrance of new companies. the production of igloo ice cream is around 2400liters/hour and the capacity utilization is around 78% on the single shift basis.5liters per person in 2013 (according to research report on ice cream culture in Pakistan) DEMAND AND SUPPLY GAP Production of ice cream usually depends on the need / demand of the particular product. whether it is summer or winter. one of the giant ice cream producers witnessed an increase in volume growth of 15%. In Karachi. Below mentioned is the production capacity of Punjab and Sind per annum.
LAHORE HOTELS & RESTURAUNT UNORGANIZED SECTOR TOTAL 10. LAHORE HICO.0 1.2 1.5 4.0 4. LAHORE MARILA.2 20. KARACHI KHAN FOOD INDUSTRIES.0 Institute Of Business Management Page 10 .8 0.0 4.ICE CREAM FACTORY PRODUCTION CAPACITY OF ICE CREAM (PER ANNUM) MILLION LITERS PUNJAB Walls YUMMY. LAHORE PIXIE.7 0.4 1.5 SINDH Walls IGLOO. ISLAMABAD BONNIS. SUKKUR HOTELS & RESTURAUNT UNORGANIZED SECTORS IN SIND 13.5 1.0 3.2 2.
RURAL AREAS: They are the people living in villages. Institute Of Business Management Page 11 . Cons. middle and upper) are customers for ice cream as they have different range in ice cream prices.ICE CREAM FACTORY Current demand for ice cream is around 170 million liters while its production from documented sector is around 60 million liters that means there is a huge market available though their need is satisfied by small producers but with good brand awareness this market can be captured. they mostly prefer KULFA. and others. All the classes (lower. URBAN AREAS: Currently they are real market for ice cream manufacturers. MARKET SEGMENT As our population is divided into rural and urban areas so their choices are different with respect to their areas. they are brand conscious and they prefer specific company’s ice cream. However. so to cater that market you have to come up with these types of products. one problem with them is that they are not brand conscious and mostly unbranded producers satisfy them. and their choice for ice cream is very different they want thick and very creamy ice creams. starts from 5 rupees to 50 rupees for one person. their choices are Choc Bar. mostly they are farmers by occupation.
000 gal (3. iii. iv.ICE CREAM FACTORY TECHNICAL APPRAISAL MANUFACTURING PROCESSES Ice-cream is readily and easily available in a variety of forms such as chocolate-dipped bars and in sandwiches form too. viii. ix.000 gal (18. BLENDING THE MIXTURE The milk will arrives at the ice cream factory in the refrigerated tanker trucks from the local dairy farms. Institute Of Business Management Page 12 . Premeasured and quantified amounts of eggs. x. vi.7851) stainless steel blenders. vii. Raw materials delivery & storage Blending the mixture Pasteurizing Homogenizing Cooling Adding flavors Continuous freezing Adding extra fruits and chunks Packaging Hardening RAW MATERIALS DELIVERY & STORAGE The first step is to arrange for the raw materials and store them at the suitable and perfect environment in order to protect them from any danger. Ice cream is part of food that is loved by everyone. and other additions are then further blended with the addition of milk for around eight to ten minutes. ii. Pipes will be used in order to bring the milk in the pre-measured amounts to around 1. The manufacturing process of ice cream comprises of ten steps that includes: i.925 1) storage silos that will be kept at the temperature of around 36°F (2°C). sugar. The milk will be then pumped into 5. v.
the hot mixture will be forced with the help of a small opening into the homogenizer. will be then piped to the pasteurization machine. Hot water of around 182°F (83°C) flows on the one side of the plates. sometimes as much as 2. which will be blended. the cold milk mixture will be piped from the other side. this process will thus helps in killing bacteria. Homogenizer is one of the high-pressure piston pumps. This will eventually. therefore the mixture is further blended as it is drawn into the pump cylinder on the down stroke and then forced back out on the upstroke. On the other side. Institute Of Business Management Page 13 . The mixture. which is made up of a thin stainless steel plates. HOMOGENIZING With the input of an intensive air pressure. breaks down the fat particles and will prevent them from separating from the rest of the mixture.000 pounds per square inch (141 kg per sq cm). The water will warm the mixture to the temperature of around 180°F (82°C).ICE CREAM FACTORY PASTEURIZING Pasteurizing is a process which will be done in order to kill the bacteria.
Source: http://www. liquid ammonia will be using as a freezing agent. When the mixture leaves the freezer. air is injected into it. In this manner. the mixture is thus cooled to 36°F (2° C). It is pumped into the continuous freezers that can freeze up to 700 gal (2. the mixture passes on the opposite side.000 gal (18. each stainless steel vats will be holding up to 300 gal (1. it has the consistency of soft-serve ice cream. While the ice cream is in the freezer. Then the mixture is pumped to 5. will flows on one side of the plates and at the same time. Flavorings are then piped into the vats and will be blended thoroughly CONTINUOUS FREEZING Now the mixture will be frozen.ICE CREAM FACTORY COOLING The mixture after the process of homogenizing will be then piped back to the pasteurizer where the cold water at approximately 34°F (1°C).136 1) of mixture.com/Volume-3/Ice-Cream. where it sits for around four to eight hours to allow the ingredients to blend. The temperature inside the freezers is kept at -40°F (-40°C).650 1) per hour.925 1) tanks in a room set at 36°F (2°C).html Institute Of Business Management Page 14 . ADDING FLAVORS The ice cream is then pumped to a stainless steel vats.madehow.
smaller hopper. An auger on the bottom of the machine turns the hoppers so that the chunks drop onto the star wheel in pre-measured amounts. The cartons move slowly back and forth through the tunnel for two to three hours until the contents are rock solid. The cartons move along the conveyer belt where they pass under an ink jet that spray-paints an expiration date and production code onto each carton. PACKAGING Automatic filling machines drop preprinted pint or half-gallon-sized cardboard cartons into holders. the ice cream must be hardened to a temperature of -10°F (-23°C). The cartons are then filled with premeasured amounts of ice cream at the rate of 70-90 cartons per hour. fitted with a star wheel. the star wheel pushes the food chunks into the ice cream. is located on the front of the feeder. The machine then places a lid on each carton and pushes it onto a conveyer belt. After the imprinting. Another.ICE CREAM FACTORY ADDING FRUITS AND CHUNKS If chunks of food such as strawberry or cookie pieces are to be added to the ice cream. The cartons are then stored in refrigerated warehouses until they are shipped to retail outlets. a heat tunnel that covers each cup with plastic shrink wrapping. The mixture then moves to a blender where the chunks are evenly distributed. the cartons move through the bundler. The conveyer system moves the ice cream cartons to a tunnel set at -30°F (-34°C). Constantly turning ceiling fans create a wind chill of -60°F (-5 1°C). HARDENING 9 Before storage and shipping. the frozen mixture is pumped to a fruit feeder. Institute Of Business Management Page 15 . The chunks are loaded into a hopper at the top of the feeder. As the mixture passes through the feeder.
butter. it is 2nd most important crop in Pakistan.ICE CREAM FACTORY RAW MATERIALS USED Raw materials required to manufacture ice cream varies from ice cream to ice cream. sugar remains there but other ingredients are also mixed to make different types of ice creams. Flavor: Food flavors are used in this all the flavors are easily available in the market and there is no hurdle to get those flavors. Pakistan is not only exporting milk but its products too. Institute Of Business Management Page 16 . and its consumption in ice cream depends upon the type of ice cream if it is kulfa or some other creamy ice cream than it will be used in large quantity. pista. Milk: Milk is the main ingredient in production of ice cream and fluctuation in its price and availability directly affects Ice cream’s price and production. Pakistan produces 33million liters of milk annually. more than all other cane producing countries except Brazil. Sugar: Sugar is used to make ice cream sweet. nowadays its increased prices and shortage causing trouble in ice cream production. Pakistan has 50 million animals that is huge quantity but most of the farmers don’t want to connect with the formal markets and this is the reason they don’t play significantly in economic growth of the country. following mentioned are some ingredients to produce ice cream. Butter: This is also related to milk. Dry Fruits: In some ice creams like “KULFA” dry fruits are used including almond. China. Pakistan grows about 1 million hectares of sugarcane. it is used in all types of ice cream. India and Thailand. this is also very famous in rural areas of the country. butter can be formed after processing of milk. main ingredients like milk. Cuba. Pakistan is the 4th largest milk producing country in the world.
three main dry ingredients compose all types of cones. therefore. for this they need pulp of that fruit too. to produce mango ice cream. Cones: For ice cream cone there is a need of cone with the ice cream.g. a large size unit will be more economical than a small size plant.ICE CREAM FACTORY Fruit Pulps: As ice creams are in different flavors and sometimes they are in flavor of different fruits. tapioca flour and sugar are chosen for baking quality. mango pulp is required. Institute Of Business Management Page 17 . SIZE OF THE FACTORY The size of the plant will be large as the size depends on the manufacturing process. E. Wheat flour. strength and sweetness respectively.
Mixing units Storage units Homogenizer Extrusion ice cream machines Moulding ice cream machines Filling ice cream machine Hardening ice cream machines Ice cream packaging machines Hardening ice cream machines Ice cream freezing machines Choko bar hardner Chocolate pot Ice cream churner Ice cream ageing machine Brine tank Surface cooler Filling and Packaging line We will use these machines in order to manufacture ice creams.ICE CREAM FACTORY EQUIPMENTS The machineries / equipments used in manufacturing of ice cream are listed below. The further details of the machinery are given below: Institute Of Business Management Page 18 .
STORING UNITS Storing units are further used to store the ice cream in order to protect it from any externalities. Institute Of Business Management Page 19 .ICE CREAM FACTORY MIXING UNITS Mixing units are used in order to blend the mixtures and to soften them.
II. which is situated in one of the vast milk production region of Pakistan i. On the other side.e. The Factory is near from the highway which will help us in delivering our finished goods to the other areas. III. we will hire skilled labor too.e. Institute Of Business Management Page 20 . Punjab at Sheikhupura Road near Highway. In order to save our transportation cost. the milk prices are increasing day by day. raw materials and the finished goods i.ICE CREAM FACTORY FREEZING UNITS LAYOUT OF THE FACTORY The plant will be constructed according to the decided Line Layout as minimum time will be taken in order to handle the equipment. RAW MATERIAL The basic raw material i. ice cream. The current milk price is Rs 50/lit which will further grow. LAND The Ice cream factory will be spread over land of 500 Marlas. we have selected Punjab. there are many unskilled labors that are readily available in the region.e. However. We have selected this region due to the milk production as milk is the major raw material that is used in manufacturing ice cream. milk is available in abundance in the area. LABOR Due to one of the main reason that is unemployment in the country. I. Punjab is known as one of the largest milk producing area and is top among the other provinces.
TRANSPORT FACILITY Transportation facilities will be used in order to bring the milk. some problems may arise. Due to the shortage of electricity. On the other side. Further. But negotiations and agreements are under consideration with LESCO in order to reduce any problems in future.ICE CREAM FACTORY IV. a large amount of water as well as energy is required. precautionary measures will be taken by the company as well in order not to over use the electricity. V. in house transportation facility will also be used in order to carry the material from one hardener machine to the store rooms. Institute Of Business Management Page 21 . sugar and other raw materials to the mill. UTILITIES For the manufacturing / production of ice cream.
ICE CREAM FACTORY FINANCIAL ANALYSIS ESTIMATED INCOME STATEMENT Rs in (000) 2012 1381500 572140 37195 209106 8315 826756 41338 785418 596082 3876 27630 31506 564576 37534 0 333 37867 526709 0 526709 2013 1540541 607900 40034 212846 8315 869095 2117 866978 673563 4264 30811 35074 638489 35774 0 333 36107 602383 0 602383 2014 1545096 607900 42872 216961 8315 876048 348 875700 669396 4690 30902 35592 633804 33731 0 334 34065 599739 0 599739 Sales COST OF SALES raw material labor manufacturing overhead depreciation Total cost of manufacturing less: inventory adjustments Cost of sales Gross profit OPERATING EXPENSES general & administrative expenses selling expenses Total operating expenses operating profit OTHER EXPENSES financial charges on loan bank borrowings Amortization of preproduction expenses total other expenses profit before tax tax provision net profit Institute Of Business Management Page 22 .
ICE CREAM FACTORY ESTIMATED BALANCE SHEET 2011 ASSETS CURRENT ASSETS cash & bank balances short term investments accounts receivables inventories Raw material Finished Goods Stores & Spares Advances Deposits & Prepayments Total current assets FIXED ASSETS fixed assets at cost less: accumulated depreciation fixed assets net intangibles total fixed assets TOTAL ASSETS 2012 2013 2014 3103 0 0 47025 0 200 300 488276 0 27630 28607 40922 220 330 1017294 0 30811 30395 43039 242 363 1521504 0 30902 30395 43387 266 399 50628 585985 1122144 1626853 339351 0 339351 1000 340351 339351 -8315 331036 667 331703 339351 -16630 322721 334 323055 339351 -24944 314407 0 314407 390979 917688 1445199 1941260 LIABILITIES & EQUITY CURRENT LIABILITY bank borrowings tax payable dividend payable current maturity of long term debt loans Total current liability LONG TERM DEBTS long term loans Total long term debt EQUITY paid up capital retained earnings total equity total liability & equity 0 0 0 0 0 0 0 0 48536 48536 0 0 25023 48536 73559 0 0 32842 48536 81378 234587 186051 137514 88978 234587 186051 156392 0 156392 156392 500374 656766 137514 156392 1047615 1204007 88978 156392 1584524 1740916 390979 891353 1415080 1911272 Institute Of Business Management Page 23 .
ICE CREAM FACTORY ESTIMATED CASH FLOW STATEMENT SOURCES OF FUNDS operating profit Add: back depreciation Total fund from operation OTHER SOURCES loans terms finance certificates 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 NBP loans term finance certificates bank borrowings Financial charges long term debts bank borrowings PAYMENT OF taxes dividends short term investments increase in current assets (other than cash) Total application of funds cash supplies cash at beginning of year cash at end of the year 2011 0 0 0 2012 564576 8315 572891 0 0 0 0 0 572891 0 0 0 0 0 0 37534 0 2013 638489 8315 646804 0 0 0 0 0 646804 0 0 0 48536 0 0 35774 0 2014 633804 8315 642119 0 0 0 0 0 642119 0 0 0 48536 0 0 33731 0 234587 0 0 156392 390979 311823 27528 1000 0 0 0 0 0 0 0 0 47525 387876 3103 0 3103 0 0 50184 87718 485173 3103 488276 0 0 7141 91451 529018 488276 1017294 25023 0 499 107790 504210 1017294 1521504 Institute Of Business Management Page 24 .
398 228119 152079 24864 liters 1381500 526709 12.ICE CREAM FACTORY FINANCIALS Total cost of project DEBT financing EQUITY Annual production Sales NI WACC NPV IRR BREAK EVEN 380198.64% 646044 64% 24.15% Institute Of Business Management Page 25 .
TAXES and considering ($1=86. EIRR( economic internal financial rate of return comes out 57%. ad its raw material also. we get from domestic resources . but removing tariff from imported machinery.5) AS shadow exchange rate.ICE CREAM FACTORY ECONOMIC ANALYSIS ECONOMIC RATE OF RETURN Since our project totally based on domestic resource. so there is not as such different In economic and financial rate of return. ECONOMIC COST OF PROJECT -339160 YEAR 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 CAPITAL OUTLAY -339160 CASH FLOWS 522707 639663 641620 642119 642119 629619 431379 431379 431379 431379 422804 433930 433999 433999 ECONOMIC RATE OF RETURN 57% Institute Of Business Management Page 26 .
83 119.ICE CREAM FACTORY ANNEXURES COST OF LAND S.83 100 57.26 93.15 TOTAL COST 20371 20371 959 14380 500 1125 93.64 1 UNIT OF CONSTRUCTION Sft Sft Sft Sft Sft Sft Sft (Rs in 000) UNIT COST 119.83 119.NO 1 2 3 4 5 6 DESCRIPTION purchase of land site preparation registration fees stamp duty district council fees transfer charges TOTAL COST OF LAND AREAS IN MARLAS 500 UNIT COST 350 Rs in (000) TOTAL COST 175000 60 50 5 20 100 175235 COST OF CIVIL WORK TYPE OF DESCRIPTION BUILDING office building RCC Production building RCC store for raw material RCC store for finished goods RCC cafeteria RCC Boundary walls Brick work security room / hut Brick work TOTAL COST OF CIVIL WORK AREAS COVERED 170 170 8 120 5 19.15 57798 SNO 1 2 3 4 5 6 7 Institute Of Business Management Page 27 .83 119.
ICE CREAM FACTORY COST OF MACHINERY LOCAL SNO 1 2 3 4 DESCRIPTION heat exchangers Homogenizers cooling pipes chiller TOTAL COST OF LOCAL MACHINERY QUANTITY 1 1 1 1 Rs (000) UNIT COST 150 150 100 170 TOTAL COST 150 150 100 170 570 COST OF MACHINERY IMPORTED SNO 1 2 3 4 5 DESCRIPTION GMF (cup filler.22 12086. Role 20) Techno ice Sedum Gram equipment 3M-Matric TOTAL COST OF IMPORTED MACHINERY UNIT COST 374770 140539 1874 468 2342 QUANTITY 1 1 1 1 1 Rs (000) EXCHANGE RATE 86 86 86 86 86 86 TOTAL COST 32230.354 161.248 201.398 Institute Of Business Management Page 28 .412 44719.164 40.
398 20 200 5000 5000 12500 1000 27528 329570.ICE CREAM FACTORY ESTIMATED COST OF PROJECT SNO 1 2 3 4 5 6 7 8 9 10 11 DESCRIPTION land building machinery local machinery imported inland charges erection & installation charges contingencies furniture & fixture vehicles reproduction expenses interest during construction TOTAL FIXED COST INITIAL WORKING CAPITAL TOTAL COST OF PROJECT (Rs in (000) TOTAL COST 175235 57798 570 44719.398 50628 380198.398 INITIAL WORKING CAPITAL CURRENT ASSETS Inventories raw material finished goods store & spares Total cost of inventory advances & deposits accounts receivables (2% of sales) cash TOTAL CURRENT ASSETS Rs in (000) AMOUNTS 47025 40922 200 88147 300 27630 661 116738 Possible current liabilities Less: bank borrowing 75% of inventories NET INITIAL WORKING CAPITAL REQUIREMENT 66110 50628 Institute Of Business Management Page 29 .
008 10.ICE CREAM FACTORY ANNUAL PRODUCTION ANNUAL PRODUCTION OF PRODUCTS Annual production of kulfa (2 ltr) Annual production of kulfa (1 ltr) Annual production of kulfa cup (1 ltr) Annual production of mango (2 ltr) Annual production of mango (1 ltr) Annual production of mango cup (1 ltr) Annual production of vanila stick Annual production of choc bar (1 ltr) ANNUAL PRODUCTION (IN Ltrs) 504 1.008 10.080 504 1.2012 2) operation efficiency of project assumed that 80% in first year of the operation and 85% in 2nd year 3) year end inventory is assumed that 5% of production of that particular year 4) we assumed to sell 100% of our production in local market selling prices assumed in accordance with the prevailing rates in the market Institute Of Business Management Page 30 .080 840 840 1) the above capacity is based on 365 working days per annum at 100% capacity and project would start operation on 12.
ICE CREAM FACTORY DETAILS OF PRODUCTION SALES AND SALES REVENUE a) production of sulfa (2 ltr) add: opening inventory Total available for sale less ending inventory Quantity sold 2012 403200 0 403200 -20160 383040 2013 428400 20160 4485600 -21400 427160 2014 428400 21400 449800 -21400 428400 b) production of kulfa (1 ltr) add: opening inventory Total available for sale less ending inventory Quantity sold 2012 806400 0 806400 -40300 766100 2013 856800 40300 897100 -42840 854260 2014 856800 42840 899640 -42840 856800 c) production of kulfa cup (1 ltr) add: opening inventory Total available for sale less ending inventory Quantity sold 2012 8064000 0 8064000 -403200 7660800 2013 8568000 403200 8971200 -428400 8542800 2014 8568000 428400 8996400 -428400 8568000 d) production of mango (2 ltr) add: opening inventory Total available for sale less ending inventory Quantity sold 2012 403200 0 403200 -20160 383040 2013 428400 20160 4485600 -21400 427160 2014 428400 21400 449800 -21400 428400 e) production of mango (1 ltr) add: opening inventory Total available for sale less ending inventory Quantity sold 2012 806400 0 806400 -40300 766100 2013 856800 40300 897100 -42840 854260 2014 856800 42840 899640 -42840 856800 Institute Of Business Management Page 31 .
ICE CREAM FACTORY f) 2012 production of mango cup (1 ltr) add: opening inventory Total available for sale less ending inventory Quantity sold 8064000 0 8064000 -403200 7660800 2013 8568000 403200 8971200 -428400 8542800 2014 8568000 428400 8996400 -428400 8568000 g) production of vanilla stick add: opening inventory Total available for sale less ending inventory Quantity sold 2012 672000 0 672000 -33600 638400 2013 714000 33600 747600 -35700 711900 2014 714000 35700 749700 -35700 714000 h) production of choc bar (1 ltr) add: opening inventory Total available for sale less ending inventory Quantity sold 2012 672000 0 672000 -33600 638400 2013 714000 33600 747600 -35700 711900 2014 714000 35700 749700 -35700 714000 SALES REVENUE LOCAL SALE kulfa (2 ltr) @ 250 kulfa (1 ltr) @ 130 kulfa cup (1 ltr ) @ 20 Mango (2 ltr) @ 250 Mango (1 ltr) @ 130 Mango cup (1 ltr) @ 20 Vanila stick @ 7 Choc bar @ 12 ANNUAL SALES 2012 95760 99593 153216 153216 153216 153216 153216 153216 1114649 2013 106779 111053 170856 170856 170856 170856 170856 170856 1242968 2014 107100 111384 171360 171360 171360 171360 171360 171360 1246644 1 2 3 4 5 6 7 8 Institute Of Business Management Page 32 .
47 0 0 171700 8315 3876 0 37534 333 221757 TOTAL COST 572140 37195.40% TOTAL 12.40% 16% TOTAL INTEREST 24397 25023 NATURE OF FUND NBP loan paid up capital Total Weighted average cost of fund WEIGHT weighted average cost of fund (debt) weighted average cost of fund (equity) AMOUNT 324587 156392 390979 * 60% 40% * * AFTER TAX RATE 10.ICE CREAM FACTORY BREAKEVEN Rs in (000) FIXED COST 572140 37194 37406 0 0 28 0 0 646769 1114649 [221757 / 1114649 646769] 0.24% 6.40% 16% 6.64% Institute Of Business Management Page 33 .2 209106 8315 3876 28 37534 333 868526 DESCRIPTION raw material labor manufacturing overheads depreciation administration & general expenses selling expenses interest amortization of preproduction expenses TOTAL sales value of production Breakeven point VARIABLE COST WACC Rs in (000) INTEREST RATE 16% 16% AFTER TAX RATE 10.
com/Market-Report/ice-cream-market-in-pakistanto-2014-458142.com/ci02024/Food. 2010. http://findarticles. Economic Review. http://www. "Ice cream industry in Pakistan". FindArticles.highbeam. http://www. http://www.com/p/articles/mi_hb092/is_n1_v29/ai_n28702661/ II.reportlinker. 29 Nov.html/coverage/Asia:Pakistan/mode/premi um/publisher/Datamonitor IV.com/doc/1G1-20457473.ICE CREAM FACTORY BIBLIOGRAPHY I.companiesandmarkets.html Institute Of Business Management Page 34 .com.asp III.
ICE CREAM FACTORY Institute Of Business Management Page 35 .