MILLITIANS ICE PLANT

IN THE NAME OF

THE MOST BENEFICENT AND MERCIFUL

THE COOLS

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

ON

SUPERVISED BY: SIR. JAVAID IQBAL GROUP MEMBERS: SADIA KHAN SEHRISH SABA
THE COOLS 2

05 14

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

HUMAIRA SHAHZADI

62

(3

rd

M. SC ACCOUNTING & FINANCE semester)

OUR PARENTS AND

THE COOLS 3 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

TEACHERS

ALL OUR WELL WISHERS AND SPECIALY SIR JAVAID IQBAL

Almighty ALLAH is the entire source of knowledge and wisdom endowed to mankind and His dearest Nabi, MUHAMMAD (PBUH) is a torch of guidance and knowledge for humanity as a whole. Everyone has a long list of individuals to whom he is indebted. We are no exception. We are firstly, with humble gratitude bow our heads before Almighty ALLAH for giving us strength,

THE COOLS

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT courage, patience and inspiration, and enable us to complete this project. To work for this project, was a difficult task, because it is about

Ice Manufacturing

We acknowledge with thanks and admiration, our dependence on all of our respondents on their nice co-operation and giving us their loyal time. We feel Great pleasure and honors to express our gratitude from the citadel of hearts to our respected and dignified instructor

SIR.JAVAID IQBAL
Without whose guidance it would have been difficult for us to achieve Our objectives He provide us, his in-depth approach of the subject Project Management And taught us a lot of tell analysis techniques which we have applied during data analysis. His sympathetic behavior has an ever lasting impression on the page of our memory.

THANKS:

Sr. No

Description
5

Page #

THE COOLS

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

1 Executive summary . 2 Introduction . 3 Market Analysis . 4 Technical Analysis . 5 Personnel Analysis . 6 Financial Analysis . 7 SWOT Analysis . 8 Conclusion & Recommendations .

7-10

11

11

12-17

18

19-25

25-26

26

THE COOLS

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

The Project:
Most of areas of Pakistan have long duration of summer due to which demand for ice is high for more than six months of the year. As Pakistan is a developing country and large portion of the population cannot afford refrigerators for domestic use. Another growing market for ice plants are industries linked to food products i.e. fish, dairy, bakeries, restaurants etc. With this growing demand a large number of ice plants are operating in the country. Bahawalpur is a hottest city of Punjab province of Pakistan. Our proposed project is useful and beneficial in this city. Food products industries fish, dairy, bakeries, restaurants are linked to this industry. Mainly it produces for the general use at home. So we generate the idea to set up a ice plant according to the requirements of the people of this city. Depending on the facts this area of opportunity has not been exploited we primarily focused on developing an idea to set up a ice manufacturing plant for people of this city named or to be known as MILLITIANS

ICE PLANT.
This project is related to setting up an ice plant of 20-tons capacity per day to cater to the needs of the institutions such as hotels, restaurants, bakeries, dairy, fish sellers etc. The proposed project will manufacture ice blocks varying from 130 kg to 150 kg in weight.

Location:
THE COOLS 7 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT We set up our ice plant near Baghdad station at main road, Bahawalpur. As ice is not easily available in this area and people of this area bears a lot of transportation expenses to get ice, so we select this area to set up our ice plant.

Products Range and Plant Capacity:

Years 2010 2011 2012 2013 capacity 40,000 44000 48400 53240
We are producing ice blocks only. The proposed project has a capacity of producing 140 ice blocks on the basis of 2 shifts of 12 hours. The maximum capacity of plant is 40,000 per annum. Estimated capacity during:

Market Entry Timing:

The ice plant should be started up when the season begins in mid April and closed when it end up in September. The peak season is of four months i.e. from mid April to mid August. The rest of the period i.e. two months is moderate season. The best time to enter into this business is in the month of April.

Raw Material Requirement:

The basic raw material required for producing ice blocks is water, common salt. These raw materials are readily available in the local market. Replenishments needed during maintenance are ammonia gas and compressor oil.

Machinery Requirements:
The main equipment required for running the ice plant is compressor, capacitor, condenser, and electric motors, WAPDA connection power transformer etc . THE COOLS 8 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Name of civil contractors:

CH. NASIR ASSOCITATES

Machinery Suppliers:
AL-KARIM MACHINERY SUPPLIERS LAHORE.

Project Engineering:
The machinery of the proposed project will be purchased from Lahore locally fabricated.

Implementation Stage:
Total time period for the starting of project is estimated to be 1 year from the date of approval of finance.

Sponsors:
The sponsors to this project of Ice Manufacturing Plant are a group of three highly enthusiastic people who are committed to providing ice at reasonable prices with equally perfect services. The sponsors of the project are professionally qualified in their fields namely Sadia Khan resident of Dera-Bakha Bahawalpur, Humaira Shahzadi resident of Baghdad station Bahawalpur, Sehrish Saba resident of One unit chowk, Bahawalpur. 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.

Cost of the Project:

The total cost of the project is estimated to be Rs. 10786178. The fixed cost of the project is Rs. 10511478 which are financed locally. The amount of initial permanent net working capital required is Rs. 274700.

Means of Finance:
Forty (40%) of the estimated cost of the proposed project will be obtained through loan and the remaining 60%will be contributed by the Owners. THE COOLS 9 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Financial Plan:
The total cost of the project is estimated to be Rs (10786178). Forty percent Rs (4314471)of the estimated cost of the proposed project will be obtained through loan from Habib Bank Ltd and the remaining 60% Rs (6471707) will be contributed by the owners.

Implementation Schedule:
S.NO 1 2 3 ACTI V I T IES Order for Local Machinery Arrival of Local Machinery at site Construction of Building and Civil Works: MONTH November December Start Complete 4 Erection &Installation of Machinery Start Complete 5 6 Order for Raw Materials Start of Commercial Production September October December January February March YEAR 2009 2009 2009 2009 2009 2010 2010 2010

Financial Ratios:
The Debt Equity ratio (67%),(39%) , (20%), (8%) Net Profit Margin ratio (39%) (34%) (43%) (42%) for the given three years (2010) (2011) (2012) (2013) respectively. Ice manufacturing Plants financial position is significantly strong as compared to the industry because it earns a huge profit and short term liquidity position is very good. So ice Plant has no bankruptcy chances.

THE COOLS

10

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

1) Market Analysis
Target Customers:
The target customers for ice plant can be divided into two categories: Domestic users, such as people living in rural areas & suburbs of cities, where access to refrigerators is difficult due to lower purchasing power. Second category is institutional buyers, who buy in bulk, such as government organizations, factories, hotels, restaurants, bakeries, fish sellers, dairy plants etc.

Description of Market:
Institutional buyers sell the bulk of the ice block production, in institutions related to food industry. Business sectors, which utilize ice in the country, include the following: For the protection of fish, Meat and also for Dairy Plants. Other potential institutional buyers of ice are bakeries, confectioners, hotels which buy ice blocks in bulk. There are approximately 70 different leading chain bakeries in different cities of Pakistan, while approximately 145 fish retail outlets are operating in different major cities of Pakistan, while more than 520 motels and hotels are operating in different areas of Pakistan.

Present Demand:
In market our productions demand is maximum 150 ice blocks per day.

Demand Supply Gap:

THE COOLS 11 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT Our production of ice blocks is 140 ice blocks per day and there is demand of 150 ice blocks per day. So there is demand supply gap of 10 blocks.

Ex-factory price:
Our whole sale price is Rs. 180 per ice block

Retail price:
Our retail price is Rs. 200 per ice block.

Distribution Channal:
Ice blocks are supplied to supplier through vegans.

2) Technical Analysis:
Block ice is the most popular type of ice sold for a variety of reasons. It melts more slowly than other types of ice and thus lasts longer. It can be placed in open truck with only a tarpaulin to protect it from the elements and shipped to a location of four hours away. Its rectangular shape makes it easy to stack of up to 15 meters and store large amounts. Block ice has merits of easy to transport and separate as well. Other types of ice have the tendency to freeze into a solid mass, making it difficult to work with.

Manufacturing Process:
Production Process Flow
Cleaning of Sheet Steel Ice Containers

Placing of Containers in Water Tank containing Nacl

Filling of Sheet Steel Ice Containers with water while vertically floating in Nacl Tank Temp Reduced to 17C to 20C Extracting of Ice Blocks from Sheet Steel Containers

THE COOLS

12
Movement of Ice Blocks Delivery by hooks of Ice Blocks

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Flow Chart:

Ice cans are placed in can grids and moved to beneath the filling tank which automatically fills each can with proper level of pre-cooled water and then stop. Potable water must be used to THE COOLS 13 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT make ice intended for human consumption. The cans are then hoisted and carried to the brine tank and immersed inside. The brine, which is a calcium chloride solution kept at a temperature of -10, is constantly circulated by agitator in order to keep the temperature consistent throughout the tank. Air is blown into the center of the can to induce a swirling motion. This causes any impurities and air bubbles in the water to be collected in the center of cans. Prior to finish freezing, this core is removed by a suction pump and replaced with fresh pre-cooled water. The time required for the water to be frozen varies according to the size of cans being used, 150lbs. block requires 24 hours, 300 lbs. Takes 48 hours. When the ice has completely formed, the grids are lifted up from the brine tank and moved to place in the thawing tank. Using the warm water heats the can, until the ice allowed to be slid out. The block ice is then removed from the can by a can dumper. The empty cans are returned to filling tank for next ice making cycle. The ice is moved to ice storage and stacked by an ice stacker, or it can be delivered to customer right away upon requested.

List of Machinery:
Description
Ammonia Compressor (8x8) , Driven Wheel Ammonia Condensor Atmosphere type with 2" pipe 1200 ft Electric Motor 100 H.P.1450 RPM Brine Tank for 720 Ice cans, 4mm local made Cooling Coil V-type 4" pipe & 1800 ft Brine Agitator 18" Fan Metal Accumulator for parallel supply of ammonia Crane & Trolley with Railing Channel & Girder Ammonia Valves for Complete Plant Ammonia Pipes for Complete Plant Oil Separator Buffer Type 4 gauge Suction, Discharge, Oil Pressure Wood work for Ice Cans, Tank Cover 'Ice Cans of 1.5 mm British Gauge Nuts, Bolt etc. Receiver Fittings with all Safety Measure Ammonia Inspection Bends, Union, Nipples, Tee & flange etc. Rubber pipes, Brass Valves Water Fitting Complete Electric Motor 7.5" Switch Gins Starters & Switch board with local Cable Centrifugal Pump 2.5"x3" Erection Charges of the Plant Quanti ty 1 8 1 1 1 1 1 1 1 1 1 4 400 400 1 1 1 1 1 2 1 1 1 Cost/Unit 300,000 56,400 95,000 25,000 318,000 20,000 10,000 40,000 16,000 40,000 16,000 1,000 750 2,600 15,000 45,000 6,550 18,000 30,000 16,000 95,000 25,000 60,000 TOTAL 300,000 451,200 95,000 25,000 318,000 20,000 10,000 40,000 16,000 40,000 16,000 4,000 300,000 1,040,000 15,000 45,000 6,550 18,000 30,000 32,000 95,000 25,000 60,000

THE COOLS

14

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Grand Total

3,001,750

Cooling coil

Gas transfer pipe

Receiver

Cool water pump

Condenser water pump

Raw

Other Equipment
Other Equipment Details Quantity Cost/Unit TOTAL

THE COOLS

15

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Generator 100 KVA (Engine Bus) Transformer 100 KVA Water Bore Diameter 3 4 Total Equipment Cost 1 1 1 175,000 400,000 200,000 175,000 400,000 200,000 775,000

Furniture & Fixture

Description Tables Chairs Fans Lights Computer Telephone Total Furniture & Fixtures

Qty 3 12 4 12 1 1

Cost/Unit 5,000 1,500 1,800 350 20,000 2,500

Total Cost 15,000 18,000 7,200 4,200 20,000 2,500 66,900

Office Vehicle
Description Suzuki Pick-up Motorcycle (Honda 70) Bicycle (Chinese) Total Vehicle Cost Qty 1 1 1 Cost/Unit 500,000 58,000 4,000 Total Cost 500,000 58,000 4,000 562,000

LAND & BUILDING REQUIREMENT

Description
Land Price Per Kanal Total Land Requirement (Sq . ft) Total Land Required in Kanals Total Land Cost Land Cost 4,000,000 4,500 1 4,000,000

Input Requirement:
The basic raw material required for producing ice blocks is water, common salt. These raw materials are readily available in the local market. Replenishments needed during maintenance are ammonia gas and compressor oil. THE COOLS 16 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Raw Material
Description
Ammonia consumption @ Rs. Nacl consumption @ Rs. Compressor oil for Rs. TOTAL 26 85 2,010 21,840 5,950 19,600 47,390 2,011 24,960 6,800 22,400 54,160 2,012 28,080 7,650 25,200 60,930 2,013 31,200 8,500 28,000 67,700

Factory overhead:
a) FIXED COSTS -Power KW -Insurance @ -Repairs &Maintenance: Machinery @ Building @ Vehicles @ Total Fixed cost b) VARIABLE COST Power KW GAS 25000 6 10 40000 KW/Month Rs. Total 1,500,000 240,000 1,740,000 600 10 0.50% 72,000 32,557

on Fixed Assets

2.34% 1% 5%

installed cost construction cost of cost

70,241 16,720 28,100 219,618

Water and Gas:

Equipment detail Water Bore Diameter 3 4 unit 1 Cost/unit 200,000 Total cost 200,000

THE COOLS

17

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

GAS 6 40000 240,000

Electricity:
10% Direct Electricity Fixed Electricity Expense PER ANNUM. 2010 1,500,000 72,000 2011 1,650,000 79,200 2012 1,815,000 87,120 2013 1,996,500 95,832

Technology involved:
Technology/Process Options The machinery used for the ice plant is local. It includes compressor, condenser, water tank suitable for 250-300 ice cans, brine agitator, accumulator for parallel supply of ammonia, crane and trolley, oil separator, ice cans of size 11 x 22 x 48, electric motor 75 HP etc. Merits & demerits of a particular technology The local machinery is readily available in the market at a very reasonable price. One of the Benefits of using locally manufactured machinery is availability of spare parts and its easier to Find operators to operate these machines. Machine Maintenance The maintenance process starts after mid of October. Normally, it takes one month for the overhauling of plant, during which the plant is closed for one month.

3) Personnel analysis:
THE COOLS 18 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Factory staff:
S.NO 1 2 Type of Staff
Tank man Machine Operator

Number required 6 1

Basic salary per Person, per month

5,000

Total salaries per year

180,000 36,000

6000

ADMINISTRATION AND GENERAL STAFF

Description
Accounts Officer Security Guard Driver Office Boy Total Administrative Expenses Qty 1 1 2 1 Salary 7,000 6,000 5,000 3,000 Monthly Salary 7,000 6,000 10,000 3,000 Annual Cost 42,000 36,000 60,000 18,000 156,000

4) Financial analysis:
THE COOLS 19 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Cost of Project
Description Land Cost Building/Infrastructure Machinery & Equipment Office Equipment Furniture & Fixture Vehicle Pre-operating Costs Total Capital Expenditure Working Capital Cash Raw Material Inventory Equipment Spare parts Inventory Total Working Capital TOATL COST OF THE PROJECT: ====== ====== LOCAL 4,000,000 1,672,000 3,001,750 775,000 66,900 562,000 433,828 10,511,478 200,000 67,700 7,000 274,700 FRGN 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL 4,000,000 1,672,000 3,001,750 775,000 66,900 562,000 433,828 10,511,478 200,000 67,700 7,000 274,700

10,786,178 ======

Means of Finance:
Description
Debt Equity TOTAL DEBT & EQUITY Percentage 40% 60% Amount in Rs 4,314,471 6,471,707 10,786,178 ======

Sponsors stake:
60%
THE COOLS 20 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Requirement of Initial Working Capital

A) CURRENT ASSETS Cash in Bank Raw Material Inventory Machine Spare parts Inventory Accounts Receivable Total Assets Amount 200,000 67,700 7,000 0 274,700

B) Current Liabilities Accounts Payable Total Current Liabilities: INITIAL NET WORKING CAPITAL (A -B)

0 0

274,700

Assumptions underlying financial statements:

ESTIMATED INCOME STATEMENTS

For the year ending Sept. 30, Efficiency Assumed : SALES COST OF GOODS SOLD : Raw Material Cost Direct Labor (Production Staff) Direct Electricity GAS

2011 80% 6,400,000 54,160 237,600 1,650,000 264,000 2,205,76 0 4,194,24 0

2012 90% 7,200,000 60,930 261,360 1,815,000 290,400 2,427,69 0 4,772,31 0

2013 100% 8,000,000 67,700 287,496 1,996,500 319,440 2,671,13 6 5,328,86 4

Total

GROSS

PROFIT

THE COOLS

21

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

OPERATING EXPENSES Administration Staff Machine Maintenance Cost Fixed Electricity Expense Communication Expense (Telephone, Fax, Internet etc.) Depreciation expense Amortization of pre-operating costs Selling Expenses Total Operating Expenses Operating Income (Earning Before Interest & Taxes) Interest expense on long term debt Earning Before Taxes Taxes

171,600 70,000 79,200 33,000 711,798 43,383 66,000 237,600 3,956,64 0 604,026 3,352,61 4 838,154 2,514,46 1

188,760 70,000 87,120 36,300 711,798 43,383 72,600 261,360 4,510,95 0 604,026 3,906,92 4 976,731 2,930,19 3

207,636 70,000 95,832 39,930 711,798 43,383 79,860 287,496 5,041,36 8 604,026 4,437,34 2 1,109,336 3,328,00 7

25%

Net Profit After Taxes

ESTIMATED

BALANCE

SHEETS

As on Sept. 30, CURRENT ASSETS Cash in Bank Raw Material Inventory Machine Spareparts Inventory Accounts Recievable Total Current Assets FIXED ASSETS Land Cost Building & Infrastructure Machinery & Equipment Other Equipment Furniture & Fixtures Vehicle Total Fixed

2010 274700

2011 2419639 54160 7000 0

2012 4619084 60930 7000 0

2013 7395168 67700 7000 0

274700 4000000 1672000 3001750 775000 66900 562000 10077650

2480799 4000000 1504800 2551488 713840 56865 477700 9304693

4687014 4000000 1337600 2101225 707070 46830 393400 8586125

7469868 4000000 1170400 1650963 700300 36795 309100 7867558

THE COOLS

22

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Assets INTANGIBLE ASSETS Pre-Operational Costs Total Intangible Assets 433828 433828 390445 390445 347063 347063 303680 303680

Total Assets:

10786178.3 ===== =

12175937 ==== ==

13620202 ===== =

15641105 ===== =

LIABILITIES & EQUITY Current Liabilities Accounts Payable Current maturity of long term loan Total Current Liabilities: OTHER LIABILITIES Long-term Liabilities Total Long-term Liab.: SHAREHOLDER'S EQUITY Paid-up Capital Retained Earnings Total Equity: Total Liab. & Equity:

0 539309 539309 539309 539309 539309 539309

4314471 4314471

3235853 3235853

2157236 2157236

1078618 1078618

6471706.98 6471706.98 10786178.3

6471707 1929067 8400774 12175937 ==== ==

6471707 4451950 10923657 13620202 ===== =

6471707 7551471 14023178 15641105 ===== =

ESTIMATED CASH FLOWS

THE COOLS 23 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

For the year ending Sept. 30, Operating activities Net profit Add: Depreciation expense Amortization of pre-operating costs Other Resources Accounts payable equity Long term Loan Total Uses Fixed Asset Priliminary Exp. Long term Loan Repayment of:. Financial Exp. Profit Distribute Inc/(dec) in A/R Total Cash inflow / Outflow Balance Opening Balance Closing

2010

2011

2012

2013

2572090 711798 43383 0 0 4314471 6471707 10786178

3363843 711798 43383 0 0

4132695 711798 43383 0 0

3327270

4119024

4887875

10077650 433828 539309 643022.4738 0 1182331 2144939 274700 2419639 1078618 840961 1078618 1033173.745

10511478 274700 274700

1919579 2199445 2419639 4619084

2111792 2776084 4619084 7395168

Loan Repayment Schedule

THE COOLS 24 DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT Habib Bank Limited

Name of the Bank

THE COOLS

25

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Amount of loan Date of sanction of loan Date of disbursement of loan Payment of mark up/profit/interest Payment of participle amount Rate of mark up/profit/interest Period/Tenor of loan Date of Commercial production Date of Repayment of Principal Due Dates 6/30/2009 9/30/2009 12/31/2009 3/31/2010 6/30/2010 9/30/2010 12/31/2010 3/31/2011 6/30/2011 9/30/2011 12/31/2011 3/31/2012 6/30/2012 9/30/2012 12/31/2012 3/31/2013 6/30/2013 9/30/2013 12/31/2013 4,314,471 1/1/2009 3/31/2009 Quarterly Installments Half Yearly six months after the commercial production 20% 4 3/31/2010 6/30/2010 Outstanding Principle 4,314,471 4,314,471 4,314,471 4,314,471 3,775,162 3,775,162 3,235,853 3,235,853 2,696,545 2,696,545 2,157,236 2,157,236 1,617,927 1,617,927 1,078,618 1,078,618 539,309 539,309 0

No. of Days 0 92 92 90 91 92 92 90 91 92 92 91 91 92 92 90 91 92 92

Amount of mark up 217,497 217,497 212,768 215,133 190,310 190,310 159,576 161,349 135,935 135,935 107,566 107,566 81,561 81,561 53,192 53,783 27,187 27,187

Principle Installment

Total Installment 217,497 217,497 212,768 754,441 190,310 729,618 159,576 700,658 135,935 675,244 107,566 646,875 81,561 620,870 53,192 593,092 27,187 566,496

539,309 539,309 539,309 539,309 539,309 539,309 539,309 539,309

Financial
RATIOS Debt Equity Ratio Net Margin (%) 2010 67% 34% 2011 39% 39%

Ratios:
2012 20% 43% 2013 8% 42%

THE COOLS

26

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT

Project Returns
Description IRR Pay Back Period Sponsors stake 28% 1.143516173

Commentary:
Our Debt Equity Ratio is decreasing yearly and our Net Profit Margin is increasing yearly. Which shows the company financially strong?

5) SWOT Analysis
Strengths:

THE COOLS

27

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT The labor to manufacture ice is easily available we can reach easily to low cost labor. Moreover the location for our project is very attractive. We can avail maximum advantage from this market.

Weaknesses:
Our weakness is that we are not producing ice up to the present demand of the consumer. Because we have one unit to produced ice if we increase the plant in to 2 then we increase the production.

Opportunities:
Most of areas of Pakistan have long duration of summer due to which demand for ice is high for more than six months of the year. As Pakistan is a developing country and large portion of the population cannot afford refrigerators for domestic use. Another growing market for ice plants are industries linked to food products i.e. fish, dairy, bakeries, restaurants etc. With this growing demand a large number of ice plants are operating in the country. There are approximately 1,300 ice plants operating in the Punjab, catering to the needs of different institutional and domestic buyers. The total installed capacity of ice plants in Punjab is approximately 432,669-tons of ice blocks per day2. The need of ice blocks is increasing due to economic growth, as major buyers are institutional buyers (dairy, bakery, hotel, etc.), who buy in bulk.

Threats:
Competitive Structure of the market The market of the ice plant is highly competitive; therefore if the entrepreneur is not well responsive and fulfilling the demand of the consumer he/she may not be able to capitalize the opportunity properly. Selection of the wrong venue Selection of the wrong venue can be a major hurdle in achieving the desired business objectives. the clientele taste should be properly tracked.

Conclusion & Recommendation:

The location plays an important role, as finished ice blocks should be easily accessible to dealers . It is important that solid ice blocks are produced through proper freezing time utilization as solid ice blocks are much heavier, more transparent and provides higher price in the market. Weather factor plays an important role, due to seasonal nature of the business i.e. In summers the demand for ice blocks increases, while after mid September the temperature

THE COOLS

28

DEPARTMENT OF COMMERCE

MILLITIANS ICE PLANT starts changing & demand starts to fall, which means the entrepreneur should reduce the production according to the demand of ice. One of the most important aspects for success of any business is minimizing the cost of production, in case of ice plant this can be achieved by proper training of workers, which would ensure reduction in raw material wastage and better maintenance of machinery etc. It is advisable to run the plant on natural gas, rather than electricity, as the major expense in production of ice is electricity. The use of natural gas instead of electricity will reduce the electricity expense approximately by half. In order to sell the ice blocks, it is recommended to develop a chain of dealers who buy the ice Blocks on regular basis. The dealer deposits a guarantee in the shape of cash security, keeping in view the number of blocks to be purchased on daily basis. In case the dealer is unable to pick the agreed number of blocks on a particular day, the amount is deducted from his security.

THE COOLS

29

DEPARTMENT OF COMMERCE