You are on page 1of 26

Pre-Feasibility Study

(Bakery and Confectionery)

Small and Medium Enterprises Development Authority


Ministry of Industries & Production Government of
Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton
Road, Lahore
Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7

helpdesk@smeda.org.pk
REGIONAL OFFICE
Punjab
rd

3 Floor, Building No. 3,


Aiwan-e-Iqbal Complex,
Egerton Road Lahore,
Tel: (042) 111-111-456
Fax: (042) 36304926-7
helpdesk.punjab@smeda.org.pk

REGIONAL OFFICE
Sindh
th

5 Floor, Bahria
Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 35610572
helpdesk-khi@smeda.org.pk

REGIONAL OFFICE
Khyber Pakhtunkhwa

REGIONAL OFFICE
Balochistan

Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 111-111-456
Fax: (091) 5286908
helpdesk-pew@smeda.org.pk

Bungalow No. 15-A


Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 2831623, 2831702
Fax: (081) 2831922
helpdesk-qta@smeda.org.pk

Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost
December, 2013

Pre-feasibility Study

Bakery and Confectionery

TABLE OF CONTENTS
1

DISCLAIMER .................................................................................................2

PURPOSE OF THE DOCUMENT ..................................................................3

INTRODUCTION TO SMEDA ........................................................................3

INTRODUCTION TO SCHEME .....................................................................4

EXECUTIVE SUMMARY................................................................................4

BRIEF DESCRIPTION OF PROJECT & PRODUCT .....................................4

CRITICAL FACTORS.....................................................................................5

INSTALLED & OPERATIONAL CAPACITIES................................................5

POTENTIAL TARGET MARKET ....................................................................5

10 PROJECT COST SUMMARY ........................................................................6


10.1

PROJECT ECONOMICS .............................................................................6

10.2

PROJECT FINANCING ...............................................................................6

10.3

PROJECT COST.......................................................................................7

10.4

SPACE REQUIREMENT .............................................................................7

10.5

MACHINERY AND EQUIPMENT REQUIREMENTS ...........................................8

10.6

FURNITURE & FIXTURES AND OTHER EQUIPMENTS ....................................9

10.7

RAW MATERIAL REQUIREMENTS ...............................................................9

10.8

HUMAN RESOURCE REQUIREMENT ......................................................... 10

10.9

REVENUE GENERATION ......................................................................... 10

10.10

UTILITIES AND OTHER COSTS................................................................. 11

11 CONTACT DETAILS OF EXPERTS & CONSULTANTS ............................. 11


12 ANNEXURES ............................................................................................... 12
12.1

INCOME STATEMENT ............................................................................. 12

12.2

STATEMENT OF CASH FLOW .................................................................. 13

12.3

BALANCE SHEET ................................................................................... 14

12.4

USEFUL PROJECT MANAGEMENT TIPS .................................................... 15

12.5

USEFUL LINKS ...................................................................................... 16

13 KEY ASSUMPTION ..................................................................................... 17


13.1

RAW MATERIAL ASSUMPTIONS ............................................................... 17

13.2

SALES ASSUMPTIONS ............................................................................ 24

1 DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the said subject. Although, the material included
in this document is based on data / information gathered from various reliable
sources; however, it is based upon certain assumptions which may differ from
case to case. The information has been provided on as is where is basis without
any warranties or assertions as to the correctness or soundness thereof.
Although, due care and diligence has been taken to compile this document, the
contained information may vary due to any change in any of the concerned
factors, and the actual results may differ substantially from the presented
information. SMEDA, its employees or agents do not assume any liability for any
financial or other loss resulting from this memorandum in consequence of
undertaking this activity. The contained information does not preclude any further
professional advice. The prospective user of this memorandum is encouraged to
carry out additional diligence and gather any information which is necessary for
making an informed decision; including taking professional advice from a
qualified consultant / technical expert before taking any decision to act upon the
information.
For more information on services offered by SMEDA, please contact our
website:
www.smeda.org.pk

All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

2 PURPOSE OF THE DOCUMENT


The objective of the pre-feasibility study is primarily to facilitate potential
entrepreneurs in project identification for investment. The project pre-feasibility
may form the basis of an important investment decision and in order to serve this
objective, the document / study covers various aspects of project concept
development, start-up, production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in Bakery and
Confectionery Business by providing them a general understanding of the
business with the intention of supporting potential investors in crucial investment
decisions.
The need to come up with pre-feasibility reports for undocumented or minimally
documented sectors attains greater imminence as the research that precedes
such reports reveal certain thumb rules; best practices developed by existing
enterprises by trial and error, and certain industrial norms that become a guiding
source regarding various aspects of business set-up and its successful
management.
Apart from carefully studying the whole document one must consider critical
aspects provided later on, which form basis of any Investment Decision.

3 INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was
established in October 1998 with an objective to provide fresh impetus to the
economy through development of Small and Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the
national income, through development of the SME sector, by helping increase
the number, scale and competitiveness of SMEs" , SMEDA has carried out
sectoral research to identify policy, access to finance, business development
services, strategic initiatives and institutional collaboration and networking
initiatives.
Preparation and dissemination of pre-feasibility studies in key areas of
investment has been a hallmark of SME facilitation by SMEDA.
Concurrent to the pre-feasibility studies, a broad spectrum of business
development services is also offered to the SMEs by SMEDA. These services
include identification of experts and consultants and delivery of need based
capacity building programs of different types in addition to business guidance
through help desk services.
All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

4 INTRODUCTION TO SCHEME
Prime Ministers Youth Business Loan, for young entrepreneurs, with an
allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide
subsidised financing at 8% mark-up per annum for one hundred thousand
(100,000) beneficiaries, through designated financial institutions, initially by the
National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).
Small business loan up to Rs. 2 million with tenure up to 8 years inclusive of 1
year grace period, and a debt : equity of 90 : 10 will be disbursed to SME
beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwah,
Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered
Tribal Areas (FATA).

5 EXECUTIVE SUMMARY
Bakery and Confectionery business is growing in both urban and semi-urban
areas. This pre-feasibility study encompasses the bakery business located in
commercial neighborhood surrounding and middle income residential localities.
Major products include cakes, snacks, sweets, nimko, biscuits, bread and
general confectionery items, which will be sold to target customers of the vicinity.
The sales outlet will be supported by an in house production facility. Selections of
adequate product mix and business location, supported by marketing efforts are
the critical success factors.
This Bakery & Confectionery business will be started as sole proprietorship with
an investment of Rs. 2.04 million. This project is based on 90% debt and 10%
equity ratio. Projected NPV, IRR and Payback of this project are Rs. 8.29 million
51% and 2.77 years respectively. The business will provide employment
opportunity to 06 individuals including the owner manager.

6 BRIEF DESCRIPTION OF PROJECT & PRODUCT


The proposed Bakery and Confectionery shop is a small scale project with a
production area and sales out-let. It will be equipped with basic machinery and
fixtures. The production area will require covered area of 2,700 sqft and
the outlet will be established on 900 sq.ft. The sales outlet will remain open for
business for 16 hours per day around the year.
Product mix will include cakes, snacks, sweets, nimko, biscuits, bread and
general confectionery items. This merchandise will be prepared and acquired
according to the demand of local customers and in quantities directly proportional
to expected sales.

Maximum sales are expected during Eid seasons and in winters. First year
revenues of the project are estimated to be Rs 11.24 million. It is expected that
production growth rate will be 5% per annum along with 10% per annum
increase in sales price.

7 CRITICAL FACTORS

Background knowledge and experience of the entrepreneur in the bakery


business.
Induction of trained human resource for production of requisite items.
Maintenance of quality and hygiene standards.
Pricing strategy & understanding requirements of the target customers.
Decor presentation and layout of the shop and products.
Location considerations for easy access of the customers.

8 INSTALLED & OPERATIONAL CAPACITIES


As mentioned, the sales of bakery items are 70 % of total sales revenue. The
installed capacity of bakery depends on the variety of the products being
produced. Installed capacity of major production items is cakes 23,785 pounds,
40,470 pieces of snacks, 6,035 kgs of sweets and nimko, and 5,325 kgs of mixed
biscuits.
Starting capacity utilization is 70% of the installed capacity growing at the rate
of
5% per annum.

9 POTENTIAL TARGET MARKET


Areas having presence of middle income groups in the smaller cities will be an
ideal location for opening sales outlet of the business. Ideally, production facility
of the workshop should be located alongside the sales outlet; however, if the
rental costs are a constraint, production facility can be established at a distant
economical location. In such a case, higher transportation costs may need to be
factored in.
Smaller cities with growing middle income group such as Sargodha, shekhupura,
Gujrat, Sukkur, Hyderabad, Nowshehra, Charsadda, Quetta, Khuzdar and Gilgit
are some of the prospective cities for setting up this business.

10 PROJECT COST SUMMARY


A detailed financial model has been developed to analyze the commercial
viability of Bakery and Confectionery business under the Prime Ministers Youth
Business Loan. Various cost and revenue related assumptions along with results
of the analysis are outlined in this section.
The projected Income Statement, Cash Flow Statement and Balance Sheet are
attached as annexures.
10.1 Project Economics
All the figures in this financial model have been calculated for estimated sales of
Rs. 11.24 million in the year one. The capacity utilization during year one is
worked out at 70% with 5% increase in subsequent years up to the maximum
capacity utilization of 95%.
The following table shows internal rate of return, payback period and net present
value of the proposed venture.
Table 1: Project Economics
Description

Details

Internal Rate of Return (IRR)

51%

Payback Period (yrs)

2.77

Net Present Value (Rs.)

8,288,026

Project returns are based on the margins of the items sold. Profitability of the
business is highly dependent on raw material cost. Moreover, in bakery or food
item businesses the probability of wastage is higher, hence the reduction of
wastage through demand and supply analysis will play a vital role in profit
maximization. In this regard, efficient supply chain management will be an
appropriate strategy for this venture.
Another crucial factor for the success of this project is to maintain the hygienic
standards and clean environment to avoid customer complaints.
10.2 Project Financing
Following table provides details of the equity required and variables related to
bank loan;

Table 2: Project Finance


Description

Details

Total Equity (10%)


Bank Loan (90%)

Rs. 204,144
Rs. 1,837,298

Markup to the Borrower (%age / annum)

8%

Tenure of the Loan (Years)

Grace Period (Year)

10.3 Project Cost


Following fixed and working capital requirements have been identified for
operations of the proposed business.
Table 3: Capital Investment for the Project
Description

Amount Rs.

Capital Cost
Plant and Machinery
Furniture, Fixture and Office Equipment
Motor Vehicles

1,124,750
270,000
45,000

Pre-operating Cost

120,000

Total Capital Cost

1,559,750

Working Capital
Raw Material Inventory

106,692

Up-front Building Rent

225,000

Cash

150,000

Total Working Capital

481,692

Total Project Cost

2,041,442

*Pre-paid Production Facility and Shop Rent (for 3,600 sq. ft. @ Rs. 75,000 per month)
3 Months Rent as Security and 1 Months Advance Rent calculated.

10.4

Space Requirement

The space requirement for the proposed bakery and confectionary unit
mainly includes the production hall, store room and a retail outlet. For this
purpose it is

recommended that a rented place of maximum 3,600 sqft (i.e. 2,700 sqft for
production space and 900 sq.ft for outlet) would be acquired on rent basis in the
vicinity of newly developing housing societies in the major cities. The production
space and bakery outlet could be acquired at separate places. However, it
should be ensured that both the facilities are located closely for easy supply of
produced goods to the outlet.
Table 4: Space Requirement
Estimated Area
(Sqft)

Description
Production Space
Outlet Space
10.5

Monthly Rent (Rs.)

2,700

30,000

900

45,000

Machinery and Equipment Requirements

Plant, machinery and equipment for the proposed project are stated below.
Table 5: List of Plant Machinery and Equipment
Sr. No

Description of
Item

Req. Qty

Unit Cost (Rs.)

Total Cost
(Rs.)

Flour Sifter

125,000

125,000

Mixer (60 Kg or 40
Ltr Capacity

250,000

250,000

Cross Sheeter

200,000

200,000

Oven (8x8 ft)

350,000

350,000

Dyes

30

75

2,250

Deep Freezer

50,000

50,000

Fryer and Burner

15,000

30,000

Ceiling Machine

1,500

1,500

Moving Trolleys

10,000

20,000

10

Trays

30

200

6,000

11

UPS and Batteries

20,000

40,000

12

Misc. Tools &


Equipments (Pans,
Knives and others)

50,000

50,000

Total

1,124,750

The required machinery is easily available in the local markets. Used and new
machinery can be purchased from different whole sale markets including Lahore,
Karachi, Peshawar, Gujranwala, etc. These requirements are based on the
proposed production plans as mentioned elsewhere.
10.6

Furniture & Fixtures and Other Equipments

In addition to the above plant machinery and equipment, following necessary


items will be required for the proposed venture.
Table 6: Furniture & Fixture and Other Equipment
Sr. No

Description of
Item

Req. Qty

Total Cost
(Rs.)

5,000

10,000

10,000

10,000

125,000

125,000

Production Tables

Chairs & Other


Furniture

Cost of Renovation
and Interior
Designing

Air conditioner

45,000

45,000

Vertical Freezer

30,000

30,000

Weighing Scales
(For Cash Counter
& Production)

5,000

5,000

Micro Wave Oven

10,000

10,000

Sign Board

10,000

10,000

Miscellaneous

25,000

25,000

Total

Unit Cost (Rs.)

270,000

10.7 Raw Material Requirements


The raw materials are required for production of different varieties of bakery and
confectionary products. The complete details of raw materials along with
recipe of different products are enclosed as Annexure 13.1.

10.8 Human Resource Requirement


Table 7: Human Resource Requirement
Description

No. of Employees

Salary/Month
(per person)

Owner Manager

25,000

Master Chef

20,000

Salesmen

10,000

Helpers

10,000

Total Staff

The owner of the business is recommended to personally manage the operations


of the proposed venture. Additionally, above HR composition shall be engaged in
order to manage the operational affairs of this project under the supervision of
the owner. Appropriate experience for chef and salesmen would be required.
10.9 Revenue Generation
Following table provides the details of sales revenues for year one:
st

Table 8: Sales Revenue (1 Year)


st

Product Mix

1 Year Sales Revenue (Rs.)

Bakery Sales

8,645,315

General Item Sales

2,593,595

Total Sales

11,238,910

The above sales revenues are based on following key operational assumptions:
Table 9: Operational Assumptions
No of Working Days
No. of Working Hours / day
No. of Shifts / day

355
16
2

10.10 Utilities and Other Costs


An essential cost to be borne by the company is the cost of electricity and gas.
The electricity expenses are estimated to be around Rs. 50,000 per month,
whereas, gas expenses are estimated to be Rs. 500,000 / year (including both
natural gas and LPG at 100% capacity utilization). Considering the non
availability or low pressure of natural gas alternate burning fuels i.e. LPG, wood
or kerosene oil may need to be considered. Advance procurement of raw
materials and packing material for at least 03 days along with 02 days finished
goods stock level will be maintained for uninterrupted sales of goods, at the
production and outlet facility.

11 CONTACT DETAILS OF EXPERTS & CONSULTANTS


Prof. Dr. Salim Ur Rehman
National Institute of Food Science and
Technology
University of Agriculture, Faisalabad
Phone:041-9200161-70/3011
Fax: 041-9201439
Mobile: 0300-6681047

Principal Scientific Officer


Food and Biotechnology Research
Centre
PCSIR Labs
Ferozpur Road, Lahore
Ph: 042-99230688-95

Pre-feasibility Study

Bakery and Confectionery

12 ANNEXURES
12.1 Income Statement
Income Statement
Year 1
11,238,910

Year 2
13,419,982

Year 3
15,747,024

Year 4
18,405,275

Year 5
21,437,705

Year 6
24,892,570

Year 7
27,401,857

Year 8
30,142,043

Year 9
33,156,247

Year 10
36,471,872

7,681,843
236,667
240,000
20,708
345,139
8,524,357
2,714,552

9,172,615
263,756
264,000
24,727
412,118
10,137,216
3,282,766

10,763,159
290,148
290,400
29,015
483,580
11,856,301
3,890,722

12,580,085
319,179
319,440
33,913
565,213
13,817,829
4,587,445

14,652,764
351,113
351,384
39,500
658,337
16,053,098
5,384,607

17,014,179
386,240
386,522
45,866
764,433
18,597,240
6,295,329

18,729,288
425,175
425,175
50,489
841,491
20,471,618
6,930,239

20,602,216
467,692
467,692
55,538
925,641
22,518,780
7,623,263

22,662,438
514,461
514,461
61,092
1,018,205
24,770,658
8,385,589

24,928,682
565,907
565,907
67,202
1,120,025
27,247,723
9,224,148

780,000
78,000
900,000
360,000
56,195
15,600
7,800
112,389
143,975
12,000

858,000
85,800
990,000
396,000
67,100
17,160
8,580
134,200
143,975
12,000

943,800
94,380
1,089,000
435,600
78,735
18,876
9,438
157,470
143,975
12,000

1,038,180
103,818
1,197,900
479,160
92,026
20,764
10,382
184,053
143,975
12,000

1,141,998
114,200
1,317,690
527,076
107,189
22,840
11,420
214,377
143,975
12,000

1,256,198
125,620
1,449,459
579,784
124,463
25,124
12,562
248,926
143,975
12,000

1,381,818
138,182
1,594,405
637,762
137,009
27,636
13,818
274,019
143,975
12,000

1,519,999
152,000
1,753,845
701,538
150,710
30,400
15,200
301,420
143,975
12,000

1,671,999
167,200
1,929,230
771,692
165,781
33,440
16,720
331,562
143,975
12,000

1,839,199
183,920
2,122,153
848,861
182,359
36,784
18,392
364,719
143,975
12,000

2,465,959
248,594

2,712,815
569,951

2,983,274
907,448

3,282,258
1,305,188

3,612,764
1,771,843

3,978,110
2,317,220

4,360,624
2,569,616

4,781,088
2,842,175

5,243,600
3,141,990

5,752,362
3,471,786

Earnings Before Interest & Taxes

248,594

569,951

907,448

1,305,188

1,771,843

2,317,220

2,569,616

2,842,175

3,141,990

3,471,786

Interest expense on long term debt (Project Loan)


Subtotal
Earnings Before Tax

152,495
152,495
96,099

139,611
139,611
430,340

122,676
122,676
784,772

104,337
104,337
1,200,851

84,475
84,475
1,687,368

62,964
62,964
2,254,256

39,668
39,668
2,529,947

14,439
14,439
2,827,736

3,141,990

3,471,786

96,099

3,034
427,306

40,216
744,556

102,628
1,098,224

184,973
1,502,395

298,351
1,955,905

354,987
2,174,961

429,434
2,398,302

507,997
2,633,992

590,446
2,881,340

Revenue
Cost of sales
Cost of goods sold 1
Operation costs 1 (direct
Operating costs 3 (direct
Operating costs 4 (direct
Operating costs 5 (direct
Total cost of sales
Gross Profit

labor)
electricity)
water)
gas)

General administration & selling expenses


Administration expense
Administration benefits expense
Building rental expense
Electricity expense Outlet
Travelling expense
Communications expense (phone, fax, mail, internet, etc.)
Office expenses (stationary, entertainment, janitorial services, etc.)
Promotional expense
Depreciation expense
Amortization of pre-operating costs
Miscellaneous expense 1
Subtotal
Operating Income

Tax
NET PROFIT/(LOSS) AFTER TAX

All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

12

12.2 Statement of Cash Flow


Cash Flow Statement
Year 0
Operating activities
Net profit
Add: depreciation expense
amortization of pre-operating costs
Deferred income tax
Finished goods inventory
Equipment inventory
Raw material inventory
Pre-paid building rent
Accounts payable
Cash provided by operations
Financing activities
Project Loan - principal repayment
Additions to Project Loan
Issuance of shares
Cash provided by / (used for) financing activities
Investing activities
Capital expenditure
Acquisitions
Cash (used for) / provided by investing activities
NET CASH

(106,692)
(225,000)
(331,692)

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

96,099
143,975
12,000
(120,061)
(33,445)
(22,500)
321,451
397,519

427,306
143,975
12,000
3,034
(20,864)
(40,744)
(24,750)
62,939
562,897

744,556
143,975
12,000
40,216
(23,889)
(51,676)
(27,225)
67,488
905,446

1,098,224
143,975
12,000
102,628
(27,257)
(65,403)
(29,948)
77,356
1,311,574

1,502,395
143,975
12,000
184,973
(31,061)
(82,617)
(32,942)
88,574
1,785,298

1,955,905
143,975
12,000
298,351
(35,352)
(80,258)
(36,236)
100,343
2,358,727

2,174,961
143,975
12,000
354,987
(25,844)
(96,775)
(39,860)
74,461
2,597,904

Year 7

2,398,302
143,975
12,000
429,434
(28,433)
(117,098)
(43,846)
81,782
2,876,116

(204,028)
(204,028)

(220,962)
(220,962)

(239,302)
(239,302)

(259,164)
(259,164)

(280,674)
(280,674)

(303,970)
(303,970)

(329,199)
(329,199)

1,837,298
204,144
2,041,442

(1,559,750)

(1,559,750)

150,000

397,519

358,869

684,484

1,072,273

1,526,134

2,078,053

2,293,934

Year 8

Year 9
2,633,992
143,975
12,000
507,997
(31,276)
(141,689)
(48,231)
90,489
3,167,259

Year 10
2,881,340
143,975
12,000
590,446
(34,404)
816,396
530,538
59,583
4,999,875

2,546,916

3,167,259

4,999,875

12.3 Balance Sheet


Balance Sheet
Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

150,000
106,692
225,000
481,692

547,519
120,061
140,137
247,500
1,055,217

Fixed assets
Machinery & equipment
Furniture, fixtures and Office Equipment
Office vehicles
Total Fixed Assets

1,124,750
270,000
45,000
1,439,750

Intangible assets
Pre-operation costs
Total Intangible Assets
TOTAL ASSETS

120,000
120,000
2,041,442

Year 10

906,388
140,925
180,881
272,250
1,500,444

1,590,872
164,814
232,557
299,475
2,287,717

2,663,144
192,071
297,960
329,423
3,482,598

4,189,278
223,132
380,576
362,365
5,155,352

6,267,331
258,484
460,834
398,601
7,385,251

8,561,265
284,328
557,610
438,461
9,841,664

11,108,182
312,761
674,708
482,307
12,577,958

14,275,440
344,037
816,396
530,538
15,966,412

1,012,275
243,000
40,500
1,295,775

899,800
216,000
36,000
1,151,800

787,325
189,000
31,500
1,007,825

674,850
162,000
27,000
863,850

562,375
135,000
22,500
719,875

449,900
108,000
18,000
575,900

337,425
81,000
13,500
431,925

224,950
54,000
9,000
287,950

112,475
27,000
4,500
143,975

108,000
108,000
2,458,992

96,000
96,000
2,748,244

84,000
84,000
3,379,542

72,000
72,000
4,418,448

60,000
60,000
5,935,227

48,000
48,000
8,009,151

36,000
36,000
10,309,589

24,000
24,000
12,889,908

12,000
12,000
16,122,387

19,653,756

321,451
321,451

384,390
384,390

451,879
451,879

529,235
529,235

617,809
617,809

718,151
718,151

792,612
792,612

874,394
874,394

964,884
964,884

1,024,466
1,024,466

1,837,298
1,837,298

3,034
1,633,270
1,636,304

43,250
1,412,308
1,455,558

145,877
1,173,007
1,318,884

330,851
913,843
1,244,694

629,202
633,169
1,262,371

984,188
329,199
1,313,387

1,413,622
1,413,622

1,921,619
1,921,619

2,512,065
2,512,065

204,144
96,099
300,243
2,458,992

204,144
523,405
727,549
2,748,244

204,144
1,267,961
1,472,106
3,379,542

204,144
2,366,185
2,570,329
4,418,448

204,144
3,868,580
4,072,724
5,935,227

204,144
5,824,485
6,028,629
8,009,151

204,144
7,999,445
8,203,590
10,309,589

204,144
10,397,747
10,601,892
12,889,908

204,144
13,031,740
13,235,884
16,122,387

204,144
15,913,080
16,117,224
19,653,756

Assets
Current assets
Cash & Bank
Finished goods inventory
Raw material inventory
Pre-paid building rent
Total Current Assets

Liabilities & Shareholders' Equity


Current liabilities
Accounts payable
Total Current Liabilities
Other liabilities
Deferred tax
Long term debt (Project Loan)
Total Long Term Liabilities
Shareholders' equity
Paid-up capital
Retained earnings
Total Equity
TOTAL CAPITAL AND LIABILITIES

1,837,298
1,837,298

204,144
204,144
2,041,442

19,275,315
378,441
19,653,756

Pre-feasibility Study

Bakery and Confectionery

12.4 Useful Project Management Tips


Technology

Required spare parts & consumables: Suppliers credit agreements and


availability as per schedule of maintenance be ensured before start of
operations.

Energy Requirement: Should not be overlooked and alternate source of


energy for critical operations be arranged in advance.
Machinery Suppliers: Should be asked for training and after sales services
under the contract with the machinery suppliers.

Quality Assurance Equipment & Standards: Required products quality


standards need to be defined on the packaging and a system to check them
instituted, this improves credibility.

Marketing

Product Development & Packaging: Expert's help may be engaged for


product/service and packaging design & development.

Ads & Point of Sales Promotion: Business promotion and dissemination


through banners and launch events is highly recommended. Product
brochures should be acquired from good quality service providers.

Price - Bulk Discounts, Cost plus Introductory Discounts: Price should


not be allowed to compromise on quality. Price during introductory phase may
be lower and used as promotional tool. Product cost estimates should be
carefully documented before price setting. Government controlled prices shall
be displayed.

Human Resources

Adequacy & Competencies: Skilled and experienced master chef should


be considered an investment and be retained on better terms, if necessary

All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

15

12.5 Useful Links

Prime Ministers Office, www.pmo.gov.pk

Small and Medium Enterprise Development Authority, www.smeda.org.pk

National Bank of Pakistan (NBP), www.nbp.com.pk

First Women Bank Limited (FWBL), www.fwbl.com.pk

State Bank of Pakistan (SBP), www.sbp.org.pk

Government of Pakistan, www.pakistan.gov.pk

Ministry of Industries & Production, www.moip.gov.pk

Ministry of Education, Training & Standards in Higher Education,


http://moptt.gov.pk

Government of Punjab, www.punjab.gov.pk

Government of Sindh, www.sindh.gov.pk

Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk

Government of Balochistan, www.balochistan.gov.pk

Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk

Government of Azad Jamu Kashmir, www.ajk.gov.pk

Securities
&
Exchange
www.secp.gov.pk

Ministry of National Food Security & Research, www.mnfsr.gov.pk

Punjab Food Authority, www.punjabfoodauthority.gov.pk

Commission

of

Pakistan

(SECP),

Pre-feasibility Study

Bakery and Confectionery

13 KEY ASSUMPTION
13.1 Raw Material Assumptions (at 100% capacity)
Plain & Dry Cakes
Plain cakes
Qty
Ingredients
For Making 1
Kg (gms)

Qty
Ingredients
For Making
1 Pound
(gms)

Units of
measure

Quantity

Rate

Cost

%
ingredients

Qty
Ingredients

Qty
Ingredients
in grams For
Making 1 Kg

Butter

Kg

280

450

125,959

21.73%

303

225

225

102.058

Sugar

Kg

50

60

2,986

3.86%

333

40

40

18.144

Flour (Maida)

Kg

373

50

18,661

28.97%

393

300

300

136.078

Baking powder

Kg

12

60

746

0.97%

12

10

10

4.536

Eggs

Pcs

11,594

81,157

34.77%

7,261

360

163.293

Flavour

Ltr.

500

311

0.05%

0.5

0.227

Cream and Honey

Kg

124

400

49,762

9.66%

100

100

45.359

279,582

100.0%

Raw material:

8,302

1,036

Plain fruit cakes


Units of
measure

Quantity

Rate

Cost

%
ingredients

Qty
Ingredients

Qty
Ingredients
in grams For
Making 1 Kg

Butter

Kg

316

450

142,012

24.498%

162

250

250

Sugar

Kg

50

60

3,030

3.920%

178

40

40

Raw material:

All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

Qty
Ingredients
For Making 1
Kg (gms)

Qty
Ingredients
For Making
1 Pound
(gms)

17

Flour (Maida)

Kg

316

50

15,779

24.498%

211

250

250

Baking powder

Kg

13

60

757

0.980%

10

10

Fruit Chunks

Kg

379

60

22,722

29.397%

66

300

300

Samolina (Sooji)

Kg

63

80

5,049

4.900%

66

50

50

Eggs

Pcs

3,865

27,052

11.759%

3,888

120

Flavours

Ltr.

500

316

0.049%

0.32

0.5

0.5

216,716

100.00%

4,578

1020.5

Dry cakes
Units of
measure

Quantity

Rate

Cost

%
ingredients

Qty
Ingredients

Qty
Ingredients
in grams For
Making 1 Kg

Butter

Kg

357

450

160,629

22.167%

545

225

225

Sugar

Kg

63

60

3,807

3.941%

545

40

40

Flour (Maida)

Kg

436

50

21,814

27.094%

545

275

275

Baking powder

Kg

16

60

952

0.985%

22

10

10

Eggs

Pcs

14,492

101,446

35.468%

16,364

360

Flavour

Ltr.

500

3,966

0.493%

1.09

Cream + Honey

Kg

159

400

63,458

9.852%

100

100

356,072

100.00%

Raw material:

18,023

All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

Qty
Ingredients
For Making 1
Kg (gms)

Qty
Ingredients
For Making
1 Pound
(gms)

1015

18

Pre-feasibility Study

Bakery and Confectionery

Sweets & Nimko


Nimko
Units of
measure

Quantity

Rate

Cost

%
ingredients

Qty
Ingredients

Qty
Ingredients
in grams For
Making 1 Kg

Gram Flour (Baisn)

Kg

485

90

43,639

68.293%

491

700

700

Dry Fruit

Kg

139

160

22,166

19.512%

123

200

200

Chickpeas (Channey)

Kg

69

120

8,312

9.756%

61

100

100

Nimko Masala

Kg

17

150

2,598

2.439%

25

Raw material:

25

2525

Qty
Ingredients
For Making 1
Kg (gms)

Qty
Ingredients
For Making
1 Pound
(gms)

25 25

Sweets
Units of
measure

Quantity

Rate

Cost

%
ingredients

Qty
Ingredients

Qty
Ingredients
in grams For
Making 1 Kg

Solidified wholemilk
(Khoya)

Kg

1,801

400

720,290

33.816%

1,050

350

350

Flour (Maida)

Kg

1,158

50

57,880

21.739%

263

225

225

Eggs

Kg

21,300

149,100

15.459%

131

160

Ghee

Kg

772

175

135,054

14.493%

53

150

150

Sugar syrup or Sugar

Kg

772

800

617,391

14.493%

919

150

150

1,679,716

100%

2,415

Raw material:

All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

Qty
Ingredients
For Making 1
Kg (gms)

Qty
Ingredients
For Making
1 Pound
(gms)

1035

19

Pre-feasibility Study

Bakery and Confectionery

Chicken Bread

Raw material:

Units of
measure

Quantity

Rate

Cost

%
ingredients

Qty
Ingredients

Qty
Ingredients
in grams For
Making 1 Kg

Flour (Maida)

Kg

416.02

50

20,801

14.648%

336.00

150

150

Oil

Ltr

55.47

190

10,539

1.953%

33.60

20

20

Yeast

Kg

5.55

180

998

0.195%

1.68

Sugar

Kg

69.34

60

4,160

2.441%

33.60

25

25

Salt

Kg

5.55

44

0.195%

3.60

Chicken

Kg

970.70

275

266,943

34.180%

480.00

350

350

Onion

Kg

346.68

40

13,867

12.207%

720.00

125

125

Masala

Kg

138.67

84

11,648

4.883%

84.00

50

50

Cheese

Kg

277.34

800

221,875

9.766%

180.00

100

100

Mayonnaise &
Ketchup

Kg

138.67

90

12,480

4.883%

120.00

50

50

Mix Vegetable

Kg

416.02

80

33,281

14.648%

120.00

150

150

596,639

100.000%

2,112

1024

1024

Qty
Ingredients
For Making 1
Kg (gms)

2,840

Qty
Ingredients
For Making 1
Kg (gms)

Qty
Ingredients
For Making
1 Pound
(gms)

Fresh Cream cakes


Units of
measure

Quantity

Rate

Cost

%
ingredients

Qty
Ingredients

Qty
Ingredients
in grams For
Making 1 Kg

Butter

Kg

491

450

221,135

12.207%

545

80

125

Sugar

Kg

393

60

23,588

9.766%

545

100

100

Flour (Maida)

Kg

491

50

24,571

12.207%

545

100

125

Baking powder

Kg

60

472

0.195%

22

Raw material:

All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

Qty
Ingredients
For Making
1 Pound
(gms)

20

Pre-feasibility Study

Bakery and Confectionery

Eggs

Pcs

16,103

112,718

15.625%

16,364

160

Flavour

Ltr.

500

3,931

0.195%

1.09

Fresh Cream

Kg

2,005

300

601,486

49.805%

510

510

987,899

100.000%

* Assume 20% extra cost for this type of Cakes

18,023

1024

1,185,479

Pastries & Puff etc


Units of
measure

Quantity

Rate

Cost

%
ingredients

Qty
Ingredients

Qty
Ingredients
in grams For
Making 1 Kg

Butter

Kg

315

450

141,526

12.207%

545

100

125

Sugar

Kg

252

60

15,096

9.766%

545

100

100

Flour (Maida)

Kg

315

50

15,725

12.207%

545

100

125

Baking powder

Kg

60

302

0.195%

22

Eggs

Pcs

10,306

72,139

15.625%

16,364

160

Flavour

Ltr.

500

2,516

0.195%

1.09

Fresh Cream

Kg

1,283

300

384,951

49.805%

510

510

632,256

100.000%

18,023

1024

100.000%

407

1030

Raw material:

Bread

All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

Qty
Ingredients
For Making 1
Kg (gms)

Qty
Ingredients
For Making
1 Pound
(gms)

21

Pre-feasibility Study

Bakery and Confectionery

Biscuits etc
Units of
measure

Quantity

Rate

Cost

%
ingredients

Qty
Ingredients

Qty
Ingredients
in grams For
Making 1 Kg

Butter

Kg

873

450

392,828

16.393%

303

170

170

Sugar

Kg

770

60

46,215

14.465%

333

150

150

Flour (Maida)

Kg

1,797

50

89,863

33.751%

393

350

350

Baking powder

Kg

26

60

1,541

0.482%

12

Eggs

Pcs

47,925

335,475

34.716%

7,261

360

Flavour

Ltr.

10

500

5,135

0.193%

871,056

100%

8,302

Raw material:

Qty
Ingredients
For Making 1
Kg (gms)

Qty
Ingredients
For Making
1 Pound
(gms)

1037

Snacks
Per Piece

45.5

161,525

Chicken Leg Piece

63

268,380

Chicken Shami

21

111,825

Chicken Sandwich

35

62,125

17.5

155,313

21

74,550

Chicken Drum stick Leg Piece

Chicken Patties
Chicken Bread roll

All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

22

Pre-feasibility Study

Bakery and Confectionery

Chicken Pizza
Cost

%
ingredients

Qty
Ingredients

Qty
Ingredients
in grams For
Making 1 Kg

Qty Ingredients
For Making 1 Kg
(gms)

50

46,529

19.417%

336.00

200

200

69.79

190

13,261

1.456%

33.60

15

15

Kg

4.65

180

838

0.097%

1.68

Sugar

Kg

93.06

60

5,583

1.942%

33.60

20

20

Salt

Kg

18.61

15

279

0.388%

3.60

Chicken

Kg

1,395.87

275

383,865

29.126%

480.00

300

300

Onion

Kg

930.58

40

37,223

19.417%

720.00

200

200

Masala

Kg

186.12

84

15,634

3.883%

84.00

40

40

Cheese

Kg

465.29

800

372,233

9.709%

180.00

100

100

Mayonnaise &
Ketchup

Kg

232.65

90

20,938

4.854%

120.00

50

50

Mix Vegetables

Kg

465.29

80

37,223

9.709%

120.00

100

100

933,607

100%

2,112

Raw material:

Units of
measure

Quantity

Rate

Flour (Maida)

Kg

930.58

Oil

Ltr

Yeast

4,793

1030

* Figure are rounded off at zero decimal

All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

23

Pre-feasibility Study

Bakery and Confectionery

13.2 Sales Assumptions (at 100% capacity)


Description
Fresh Cream Cakes
Fresh cream
Fresh fruit
Chocolate Cakes
Butter cream cakes
Total
Fresh & Chocolate
Pastries
Donuts
Cream puff
Cream roll
Total
Bread (Out Sourced)
Bread, Bun, Rusk Etc.
Total
Dry cakes
Dry cakes
Fruit cakes large
Fruit cakes small
Plain cakes large
Plain cakes small
Total
Snacks
Chicken pizza large
Chicken pizza medium
Chicken pizza small
Chicken bread
Chicken drum stick leg
piece
Chicken leg piece
Chicken shami
Chicken sandwich
Chicken patties
Chicken bread roll
Total

Units

Sales per
Day (Qty)

Sales Per
Year (Qty)

Sales Price
/ Unit (Rs.)

Annual
Sales (Rs.)

Pounds
Pounds
Pounds
Pounds

10
5
5
5

3,550
1,775
1,775
1,775
8,875

180
180
180
180

639,000
319,500
319,500
319,500
1,597,500

Pounds

1,775

180

319,500

Pounds
Pounds
Pounds

5
3
3

1,775
1,065
1,065
5,680

180
180
180

319,500
191,700
191,700
1,022,400

Kgs

10

3,550

110

390,500
390,500

Pounds
Pounds
Pounds
Pounds
Pounds

10
3
5
3
5

3,550
1,065
1,775
1,065
1,775
9,230

180
140
140
120
120

639,000
149,100
248,500
127,800
213,000
1,377,400

Pcs
Pcs
Pcs
Pcs

5
10
14
8

1,775
3,550
4,970
2,840

380
200
100
380

674,500
710,000
497,000
1,079,200

Pcs

10

3,550

65

230,750

Pcs
Pcs
Pcs
Pcs
Pcs

12
15
5
25
10

4,260
5,325
1,775
8,875
3,550
40,470

90
30
50
25
30

383,400
159,750
88,750
221,875
106,500
4,151,725

All SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

24

Description

Units

Sales per
Day (Qty)

Sales Per
Year (Qty)

Sales Price
/ Unit (Rs.)

Annual
Sales (Rs.)

Sweets & Nimko


Nimko
Gulab Jaman
Chum Chum
Kalakand
Burfi
Moti Choor
Pateesa
Total

Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs

2
3
3
2
3
3
1
15

710
1,065
1,065
710
1,065
1,065
355
6,035

400
375
375
375
375
375
375

284,000
399,375
399,375
266,250
399,375
399,375
133,125
2,280,875

Biscuits
Cake Rusk
White Biscuits
Coconut Biscuits
Macaroon Coconut
Almond Macaroon
Cheese Finger
Salty Zeera Plus
Plain Khatai
Baker Khani
Finger
Jam Wafer
Special Biscuit
Chocolate Biscuits
Round Almond Biscuit
Total

Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs
Kgs

2
1
1
1
1
1
1
1
1
1
1
1
1
1
15

710
355
355
355
355
355
355
355
355
355
355
355
355
355
5,325

320
320
320
320
320
320
320
320
320
320
320
320
320
320

227,200
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
113,600
1,704,000

* Figures are rounded off at zero decimal.