Post on 23-Nov-2021
Kamyab Jawan
Youth Entrepreneurship Scheme
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
REGIONAL OFFICE
Sindh
REGIONAL OFFICE
Khyber Pakhtunkhwa
REGIONAL OFFICE
Balochistan
3rd 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
5th Floor, Bahria
Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 35610572 helpdesk-khi@smeda.org.pk
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
Pre-feasibility Study Bakery and Confectionery
TABLE OF CONTENTS
1 DISCLAIMER ........................................................................................................... 2
2 PURPOSE OF THE DOCUMENT ............................................................................ 3
3 INTRODUCTION TO SMEDA .................................................................................. 3
4 INTRODUCTION TO SCHEME ................................................................................ 4
5 EXECUTIVE SUMMARY ......................................................................................... 4
6 BRIEF DESCRIPTION OF PROJECT & PRODUCT ................................................ 4
7 CRITICAL FACTORS .............................................................................................. 5
8 INSTALLED & OPERATIONAL CAPACITIES ........................................................ 5
9 POTENTIAL TARGET MARKET ............................................................................. 5
10 PROJECT COST SUMMARY .............................................................................. 6
10.1 Project Economics ............................................................................................ 6
10.2 Project Financing .............................................................................................. 7
10.3 Project Cost ...................................................................................................... 7
10.4 Space Requirement .......................................................................................... 8
10.5 Machinery and Equipment Requirements .......................................................... 8
10.6 Furniture & Fixtures and Other Equipment ........................................................ 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
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 2
1 DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the 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.
In case the document is intended to be used for loan application under any
specified loan scheme, respective scheme parameters are to be incorporated
accordingly. In doing so, financial results may vary from results shown in this
document.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk
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Small and Medium Enterprises Development Authority (SMEDA) 3
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 it’s 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.
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Small and Medium Enterprises Development Authority (SMEDA) 4
4 INTRODUCTION TO SCHEME
Prime Minister’s ‘Kamyab Jawan – Youth Entrepreneurship Scheme’, for young
entrepreneurs between the age group of 21 - 45 years, is designed to provide
subsidized financing through the National Bank of Pakistan, Bank of Punjab and
Bank of Khyber under the guidance and supervision of the State Bank of
Pakistan.
The loans will be disbursed to SME beneficiaries across Pakistan, covering;
Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan, Gilgit Baltistan and Azad
Jammu & Kashmir. The Program aims to provide 25% of the loans to women
entrepreneurs.
Loans provided through Kamyab Jawan Program are segregated in two tiers:
Tier 1 loans fall in the range of Rs. 100,000 to Rs. 500,000, with Debt:Equity
90:10 and 6% markup to borrower, and, Tier 2 loans are from Rs. 500,000 to Rs.
5 Million, with Debt:Equity 80:20 and 8% markup to borrower. Both loans are for
a period of upto 8 years with a grace period of 1 year.
Application forms are available both in branches and dedicated websites of
National Bank of Pakistan, Bank of Punjab and Bank of Khyber.
5 EXECUTIVE SUMMARY
Bakery and Confectionery business is growing in both urban and semi-urban
areas. This pre-feasibility study encompasses bakery businesses located in
commercial neighborhoods surrounded by 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. Selection of
adequate product mix and business location, supported by marketing efforts are
critical success factors.
This Bakery & Confectionery business will be started as sole proprietorship with
an investment of Rs. 3.61 million which includes a capital cost of Rs 2.51 million
and working capital of Rs 1.09 million. This project is based on 80% debt and
20% equity ratio. Projected NPV, IRR and Payback of this project are Rs. 11.00
million 45% and 3.01 years respectively. The business will provide employment
opportunity to 10 individuals including the owner manager.
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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 2,700 sqft and the outlet will be
established on 675 sq.ft. The sales outlet will remain open for business for 16
hours per day round 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 16.27 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
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. Apart from this, general items (i.e Spices, Ketchup, Shampoos,
Perfumes, Beverages, etc.) will also be sold in the bakery which is assumed to
be 30% of the bakery sales, each year.
Starting capacity utilization is 70% of the installed capacity growing at the rate of
5% per annum.
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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,
Sheikhupura, 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 Minister’s
‘Kamyab Jawan – Youth Entrepreneurship Scheme’. 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. 16.27 million in the year one. The capacity utilization during year one is
worked out at 70% with 5% increase in subsequent year’s 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) 45%
Payback Period (Years) 3.01
Net Present Value (Rs.) 11,003,071
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
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 7
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 (20%) Rs. 721,526
Bank Loan (80%) Rs. 2,886,105
Markup to the Borrower (%age / annum) 8%
Tenure of the Loan (Years) 8
Grace Period (Year) 1
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 970,000
Furniture, Fixture and Office Equipment 1,310,000
Motor Vehicles 45,000
Pre-operating Cost 185,000
Total Capital Cost 2,510,000
Working Capital
Raw Material Inventory 141,961
Up-front Building Rent* 345,000
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Cash 610,669
Total Working Capital 1,097,630
Total Project Cost 3,607,631
* 3 Months advance Rent (Production Facility and Shop @ Rs. 115,000 per month).
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 3,375 sqft (i.e. 2,700 sqft for
production space and 675 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
Description Estimated Area
(Sqft) Monthly Rent (Rs.)
Production Space 2,700 30,000
Outlet Space 675 85,000
10.5 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.)
1 Mixer (20 Kg or 20 Ltr Capacity)
2 100,000 200,000
2 Cross Sheeter 1 200,000 200,000
3 Oven (8x8 ft) 1 350,000 350,000
4 Dies 20 150 3,000
5 Deep Freezer 1 50,000 50,000
6 Fryer and Burner 2 16,000 32,000
7 Sealing Machine 1 3,000 3,000
8 Moving Trolleys 2 10,000 20,000
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 9
9 Trays 20 600 12,000
10 Misc. Tools & Equipments (Pans, Knives and others)
1 100,000 100,000
Total 970,000
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 Equipment
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 Unit Cost (Rs.) Total Cost (Rs.)
1 Production Tables 2 20,000 40,000
2 Chairs & Other Furniture
1 25,000 25,000
3 Cost of Renovation and Interior Designing
1 800,000 800,000
4 Air conditioner 2 110,000 220,000
5 Display Chillers 1 35,000 35,000
6 Display Counter 1 35,000 35,000
7 Weighing Scales (Outlet)
1 20,000 20,000
8 Weighing Scales (Production Facility)
1 50,000 50,000
9 Micro Wave Oven 1 15,000 15,000
10 Sign Board 1 20,000 20,000
11 Miscellaneous 1 50,000 50,000
Total 1,310,000
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Small and Medium Enterprises Development Authority (SMEDA) 10
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 1 25,000
Master Chef 1 35,000
Assistant Chef 1 25,000
Helpers- Production * 2 17,500
Salesmen 2 19,000
Helpers- Shop 2 17,500
Guard 1 18,000
Total Staff 10
* Production Staff will be hired as per capacity utilization of the production.
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:
Table 8: Sales Revenue (1st Year)
Product Mix 1st Year Sales Revenue (Rs.)
Bakery Sales 12,518,188
General Item Sales** 3,755,456
Total Sales 16,273,644
** General items are assumed to be 30% of the Bakery Sales each year.
The above sales revenues are based on following key operational assumptions:
Pre-feasibility Study Bakery and Confectionery
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Table 9: Operational Assumptions
No of Working Days 355
No. of Working Hours / day 16
No. of Shifts / day 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. 57,000 per month,
whereas, gas expenses are estimated to be Rs. 385,000 / 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 05 days 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
Small and Medium Enterprises Development Authority (SMEDA) 12
12 ANNEXURES
12.1 Income Statement
Calculations SMEDA
Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue 16,273,644 19,179,652 22,504,125 26,301,696 30,633,739 35,569,175 39,126,093 43,038,702 47,342,572 52,076,830
Cost of sales
Cost of goods sold 1 10,221,216 12,046,433 14,134,481 16,519,675 19,240,562 22,340,431 24,574,474 27,031,921 29,735,113 32,708,625
Operation costs 1 (direct labor) 504,000 594,000 696,960 814,572 948,737 1,101,589 1,211,748 1,332,922 1,466,215 1,612,836
Operating costs 3 (direct electricity) 210,000 247,500 290,400 339,405 395,307 458,995 504,895 555,384 610,923 672,015
Operating costs 4 (direct water) 37,800 44,550 52,272 61,093 71,155 82,619 90,881 99,969 109,966 120,963
Operating costs 5 (direct gas) 385,000 453,750 532,400 622,243 724,730 841,491 925,641 1,018,205 1,120,025 1,232,028
Total cost of sales 11,358,016 13,386,233 15,706,513 18,356,987 21,380,491 24,825,126 27,307,638 30,038,402 33,042,242 36,346,466
Gross Profit 4,915,628 5,793,419 6,797,611 7,944,708 9,253,249 10,744,050 11,818,455 13,000,300 14,300,330 15,730,363
General administration & selling expenses
Administration expense 1,812,000 1,993,200 2,192,520 2,411,772 2,652,949 2,918,244 3,210,069 3,531,075 3,884,183 4,272,601
Administration benefits expense 181,200 199,320 219,252 241,177 265,295 291,824 321,007 353,108 388,418 427,260
Building rental expense 1,380,000 1,518,000 1,669,800 1,836,780 2,020,458 2,222,504 2,444,754 2,689,230 2,958,153 3,253,968
Electricity expense Outlet 480,000 528,000 580,800 638,880 702,768 773,045 850,349 935,384 1,028,923 1,131,815
Travelling expense 162,736 191,797 225,041 263,017 306,337 355,692 391,261 430,387 473,426 520,768
Communications expense (phone, fax, mail, internet, etc.) 54,360 59,796 65,776 72,353 79,588 87,547 96,302 105,932 116,525 128,178
Office expenses (stationary, entertainment, janitorial services, etc.) 18,120 19,932 21,925 24,118 26,529 29,182 32,101 35,311 38,842 42,726
Promotional expense 162,736 191,797 225,041 263,017 306,337 355,692 391,261 430,387 473,426 520,768
Depreciation expense 232,500 232,500 232,500 232,500 232,500 232,500 232,500 232,500 232,500 232,500
Amortization of pre-operating costs 18,500 18,500 18,500 18,500 18,500 18,500 18,500 18,500 18,500 18,500
Subtotal 4,502,153 4,952,841 5,451,155 6,002,114 6,611,263 7,284,730 7,988,103 8,761,814 9,612,895 10,549,085
Operating Income 413,475 840,578 1,346,456 1,942,594 2,641,986 3,459,319 3,830,351 4,238,486 4,687,435 5,181,279
Earnings Before Interest & Taxes 413,475 840,578 1,346,456 1,942,594 2,641,986 3,459,319 3,830,351 4,238,486 4,687,435 5,181,279
Interest expense on long term debt (Project Loan) 239,545 219,306 192,705 163,896 132,696 98,907 62,313 22,681 - -
Subtotal 239,545 219,306 192,705 163,896 132,696 98,907 62,313 22,681 - -
Earnings Before Tax 173,930 621,272 1,153,751 1,778,698 2,509,289 3,360,412 3,768,038 4,215,805 4,687,435 5,181,279
Tax - 12,127 65,375 156,805 271,858 460,103 562,009 684,741 826,230 974,383
NET PROFIT/(LOSS) AFTER TAX 173,930 609,145 1,088,376 1,621,894 2,237,432 2,900,310 3,206,029 3,531,064 3,861,205 4,206,895
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Small and Medium Enterprises Development Authority (SMEDA) 13
12.2 Statement of Cash Flow
Calculations SMEDA
Cash Flow Statement
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Operating activities
Net profit 173,930 609,145 1,088,376 1,621,894 2,237,432 2,900,310 3,206,029 3,531,064 3,861,205 4,206,895
Add: depreciation expense 232,500 232,500 232,500 232,500 232,500 232,500 232,500 232,500 232,500 232,500
amortization of pre-operating costs 18,500 18,500 18,500 18,500 18,500 18,500 18,500 18,500 18,500 18,500
Raw material inventory (141,961) (42,081) (53,495) (67,847) (85,867) (108,464) (104,940) (126,978) (153,643) (185,908) 1,071,184
Pre-paid building rent (345,000) (34,500) (37,950) (41,745) (45,920) (50,511) (55,563) (61,119) (67,231) (73,954) 813,492
Accounts payable 427,613 77,207 88,598 101,550 116,275 131,704 97,028 107,305 118,730 78,178
Cash provided by operations (486,961) 775,962 845,907 1,318,383 1,842,658 2,445,731 3,122,511 3,365,961 3,668,495 3,971,073 6,420,749
Financing activities
Project Loan - principal repayment - (320,495) (347,096) (375,905) (407,105) (440,895) (477,489) (517,120) - -
Additions to Project Loan 2,886,105 - - - - - - - - - -
Issuance of shares 721,526 - - - - - - - - - -
Cash provided by / (used for) financing activities 3,607,631 - (320,495) (347,096) (375,905) (407,105) (440,895) (477,489) (517,120) - -
Investing activities
Capital expenditure (2,510,000) - - - - - - - - - -
Acquisitions
Cash (used for) / provided by investing activities (2,510,000) - - - - - - - - - -
NET CASH 610,669 775,962 525,412 971,286 1,466,752 2,038,626 2,681,617 2,888,472 3,151,375 3,971,073 6,420,749
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Small and Medium Enterprises Development Authority (SMEDA) 14
12.3 Balance Sheet
Calculations SMEDA
Balance Sheet
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Current assets
Cash & Bank 610,669 1,386,631 1,912,043 2,883,329 4,350,082 6,388,708 9,070,325 11,958,797 15,110,173 19,081,246 25,501,995
Finished goods inventory - - - - - - - - - -
Raw material inventory 141,961 184,043 237,538 305,385 391,251 499,715 604,655 731,633 885,276 1,071,184 -
Pre-paid building rent 345,000 379,500 417,450 459,195 505,115 555,626 611,189 672,307 739,538 813,492 -
Total Current Assets 1,097,631 1,950,174 2,567,031 3,647,909 5,246,448 7,444,049 10,286,169 13,362,738 16,734,987 20,965,922 25,501,995
Fixed assets
Machinery & equipment 970,000 873,000 776,000 679,000 582,000 485,000 388,000 291,000 194,000 97,000 -
Furniture, fixtures and Office Equipment 1,310,000 1,179,000 1,048,000 917,000 786,000 655,000 524,000 393,000 262,000 131,000 -
Office vehicles 45,000 40,500 36,000 31,500 27,000 22,500 18,000 13,500 9,000 4,500 -
Total Fixed Assets 2,325,000 2,092,500 1,860,000 1,627,500 1,395,000 1,162,500 930,000 697,500 465,000 232,500 -
Intangible assets
Pre-operation costs 185,000 166,500 148,000 129,500 111,000 92,500 74,000 55,500 37,000 18,500 -
Total Intangible Assets 185,000 166,500 148,000 129,500 111,000 92,500 74,000 55,500 37,000 18,500 -
TOTAL ASSETS 3,607,631 4,209,174 4,575,031 5,404,909 6,752,448 8,699,049 11,290,169 14,115,738 17,236,987 21,216,922 25,501,995
Current liabilities
Accounts payable 427,613 504,821 593,419 694,970 811,244 942,949 1,039,977 1,147,282 1,266,012 1,344,190
Total Current Liabilities - 427,613 504,821 593,419 694,970 811,244 942,949 1,039,977 1,147,282 1,266,012 1,344,190
Other liabilities
Long term debt (Project Loan) 2,886,105 2,886,105 2,565,609 2,218,513 1,842,608 1,435,503 994,608 517,120 - - -
Total Long Term Liabilities 2,886,105 2,886,105 2,565,609 2,218,513 1,842,608 1,435,503 994,608 517,120 - - -
Shareholders' equity
Paid-up capital 721,526 721,526 721,526 721,526 721,526 721,526 721,526 721,526 721,526 721,526 721,526
Retained earnings 173,930 783,075 1,871,451 3,493,344 5,730,776 8,631,086 11,837,115 15,368,178 19,229,383 23,436,278
Total Equity 721,526 895,456 1,504,601 2,592,977 4,214,870 6,452,302 9,352,612 12,558,641 16,089,705 19,950,909 24,157,805
TOTAL CAPITAL AND LIABILITIES 3,607,631 4,209,174 4,575,031 5,404,909 6,752,448 8,699,049 11,290,169 14,115,738 17,236,987 21,216,922 25,501,995
Liabilities & Shareholders' Equity
Assets
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 15
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
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 16
12.5 Useful Links
Prime Minister’s Office, www.pmo.gov.pk
National Youth Development Program , www.kamyabjawan.gov.pk
Small and Medium Enterprise Development Authority, www.smeda.org.pk
National Bank of Pakistan (NBP), www.nbp.com.pk
State Bank of Pakistan (SBP), www.sbp.org.pk
Bank of Khyber, www.bok.com.pk
Bank of Punjab, www.bop.com.pk
Government of Pakistan, www.pakistan.gov.pk
Ministry of Industries & Production, www.moip.gov.pk
Ministry of Federal Education and Professional Training, http://moent.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 Jammu Kashmir, www.ajk.gov.pk
Federation of Pakistan Chambers of Commerce and industry(FPCCI) www.fpcci.org.pk
Securities & Exchange Commission of Pakistan (SECP), www.secp.gov.pk
Ministry of National Food Security & Research, www.mnfsr.gov.pk
Punjab Food Authority, www.punjabfoodauthority.gov.pk
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 17
13 KEY ASSUMPTION
13.1 Raw Material Assumptions
Plain & Dry Cakes
Plain cakes
Raw material: Units of measure
Quantity Rate Cost % ingredients Qty
Ingredients
Qty Ingredients
in grams For Making 1 Kg
Qty Ingredients for Making 1 Kg (gms)
Qty Ingredients for Making
1 Pound (gms)
Butter Kg 280 450 125,959 21.73% 303 225 225 102.058
Sugar Kg 50 65 3,235 3.86% 333 40 40 18.144
Maida Kg 373 70 26,125 28.97% 393 300 300 136.078
Baking powder 12 60 746 0.97% 12 10 10 4.536
Eggs Pcs 11,594 8.33 96,615 34.77% 7,261 9 360 163.293
Flavour Ltr. 1 600 373 0.05% 1 0.5 1 0.227
Cream + Honey 124 500 62,202 9.66% 100 100 45.359
315,255 100.00% 8,302 1036
Plain fruit cakes
Raw material: Units of measure
Quantity Rate Cost % ingredients Qty
Ingredients
Qty Ingredients
in grams For Making 1 Kg
Qty Ingredients for Making 1 Kg (gms)
Butter Kg 316 450 142,012 24.498% 162 250 250
Sugar Kg 50 65 3,282 3.920% 178 40 40
Maida Kg 316 70 22,091 24.498% 211 250 250
Baking powder Kg 13 60 757 0.980% 6 10 10
Fruit Chuncks Kg 379 250 94,674 29.397% 66 300 300
Sougi Kg 63 200 12,623 4.900% 66 50 50
Eggs Pcs 3,865 8.333 32,205 11.759% 3,888 3 120
Flavour Ltr. 1 600 379 0.049% 0.32 0.5 0.5
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 18
308,023 100% 4,578 1020.5
Dry cakes
Raw material: Units of measure
Quantity Rate Cost % ingredients Qty
Ingredients
Qty Ingredients
in grams For Making 1 Kg
Qty Ingredients for Making 1 Kg (gms)
Butter Kg 357 450 160,629 22.167% 545 225 225
Sugar Kg 63 65 4,125 3.941% 545 40 40
Maida Kg 436 70 30,539 27.094% 545 275 275
Backing powder Kg 16 60 952 0.985% 22 10 10
Eggs Pcs 14,492 8.333 120,769 35.468% 16,364 9 360
Flavour Ltr. 8 600 4,759 0.493% 1.09 5 5
Cream + Honey Kg 159 500 79,323 9.852% 100 100
401,096 100.000% 18,023 1015
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 19
Sweets & Nimko
Nimko
Raw material: Units of measure
Quantity Rate Cost %
ingredients Qty
Ingredients
Qty Ingredients
in grams For Making 1 Kg
Qty Ingredients for Making 1
Kg (gms)
Baison Kg 485 100 48,488 68.293% 491 700 700
Dry Fruit Kg 139 400 55,415 19.512% 123 200 200
Channey Kg 69 150 10,390 9.756% 61 100 100
Nimko masala Kg 17 150 2,598 2.439% 25 25 25
116,890 100% 700 1025
Sweets
Raw material: Units of measure
Quantity Rate Cost %
ingredients Qty
Ingredients
Qty Ingredients
in grams For Making 1 Kg
Qty Ingredients for Making 1
Kg (gms)
Khoya Kg 1,801 500 900,362 33.816% 1,050 350 350
Maida Kg 1,158 70 81,033 21.739% 263 225 225
Eggs Kg 21,300 8.333 177,500 15.459% 131 4 160
Ghee Kg 772 200 154,348 14.493% 53 150 150
Sugar syrup or Sugar Kg 772 800 617,391 14.493% 919 150 150
1,930,634 100% 2,415 1035
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 20
Chicken Bread
Raw material: Units of measure
Quantity Rate Cost %
ingredients Qty
Ingredients
Qty Ingredients
in grams For Making 1 Kg
Qty Ingredients for Making 1
Kg (gms)
Maida Kg 416.02 70 29,121 14.648% 336.00 150 150
Oil Ltr 55.47 190 10,539 1.953% 33.60 20 20
Yeast Kg 5.55 500 2,773 0.195% 1.68 2 2
Sugar Kg 69.34 65 4,507 2.441% 33.60 25 25
Salt Kg 5.55 8 44 0.195% 3.60 2 2
Chicken Kg 970.70 310 300,918 34.180% 480.00 350 350
Onion Kg 346.68 30 10,400 12.207% 720.00 125 125
Masala Kg 138.67 80 11,094 4.883% 84.00 50 50
Cheese Kg 277.34 800 221,875 9.766% 180.00 100 100
Mayonnaise & Ketchup
Kg 138.67 140 19,414 4.883% 120.00 50 50
Mix Vegitable Kg 416.02 80 33,281 14.648% 120.00 150 150
2,840 643,967 100.000% 2,112 1024
Fresh Cream cakes
Raw material: Units of measure
Quantity Rate Cost %
ingredients Qty
Ingredients
Qty Ingredients
in grams For Making 1 Kg
Qty Ingredients for Making 1
Kg (gms)
Butter Kg 491 450 221,135 12.207% 545 80 125
Sugar Kg 393 65 25,553 9.766% 545 100 100
Maida Kg 491 70 34,399 12.207% 545 100 125
Backing powder Kg 8 60 472 0.195% 22 2 2
Eggs Pcs 16,103 8.333 134,188 15.625% 16,364 4 160
Flavour Ltr. 8 600 4,718 0.195% 1.09 2 2
Fresh Cream Kg 2,005 500 1,002,477 49.805% 510 510
1,422,940 100.000% 18,023 1024
* Assume 20% extra cost for this type of Cakes 1,707,528
Pastries & Puff etc
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 21
Raw material: Units of measure
Quantity Rate Cost %
ingredients Qty
Ingredients
Qty Ingredients
in grams For Making 1 Kg
Qty Ingredients for Making 1
Kg (gms)
Butter Kg 315 450 141,526 12.207% 545 100 125
Sugar Kg 252 65 16,354 9.766% 545 100 100
Flour (Maida) Kg 315 70 22,015 12.207% 545 100 125
Baking powder Kg 5 60 302 0.195% 22 2 2
Eggs Pcs 10,306 8.333 85,880 15.625% 16,364 4 160
Flavour Ltr. 5 600 3,019 0.195% 1.09 2 2
Fresh Cream Kg 1,283 500 641,585 49.805% 510 510
910,682 100.000% 18,023 1024
Bread
-
- 100.000% 407
1030
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 22
Biscuits etc
Raw material: Units of measure
Quantity Rate Cost %
ingredients Qty
Ingredients
Qty Ingredients
in grams For Making 1 Kg
Qty Ingredients
For Making 1 Kg (gms)
Butter Kg 873 450 392,828 16.393% 303 170 170
Sugar Kg 770 65 50,066 14.465% 333 150 150
Flour (Maida) Kg 1,797 70 125,808 33.751% 393 350 350
Baking powder Kg 26 60 1,541 0.482% 12 5 5
Eggs Pcs 47,925 8.333 399,375 34.716% 7,261 9 360
Flavour Ltr. 10 600 6,162 0.193% 1 2 2
975,779 100% 8,302 1037
Snacks
Per Piece
Chicken Drum stick Leg Piece 56 198,800
Chicken Leg Piece 105 447,300
Chicken Shami 28 149,100
Chicken Sandwich 49 86,975
Chicken Patties 28 248,500
Chicken Bread roll 42 149,100
Chicken Pizza
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority (SMEDA) 23
Raw material: Units of measure
Quantity Rate Cost %
ingredients Qty
Ingredients
Qty Ingredients in
grams For Making 1 Kg
Flour (Maida) Kg 930.58 70 65,141 19.417% 336.00 200
Oil Ltr 69.79 190 13,261 1.456% 33.60 15
Yeast Kg 4.65 500 2,326 0.097% 1.68 1
Sugar Kg 93.06 65 6,049 1.942% 33.60 20
Salt Kg 18.61 15 279 0.388% 3.60 4
Chicken Kg 1,395.87 310 432,721 29.126% 480.00 300
Onion Kg 930.58 30 27,917 19.417% 720.00 200
Masala Kg 186.12 80 14,889 3.883% 84.00 40
Cheese Kg 465.29 800 372,233 9.709% 180.00 100
Mayonnaise & Ketchup
Kg 232.65 140 32,570 4.854% 120.00 50
Mix Vegetables Kg 465.29 80 37,223 9.709% 120.00 100
4,793 1,004,610 100% 2,112 1030
* Figure are rounded off at zero decimal
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority(SMEDA) 24
13.2 Sales Assumptions
Description Units Sales Per Day (Qty)
Sales Per Year (Qty)
Sales Price / Unit (Rs.)
Annual Sales (Rs.)
Fresh Cream Cakes
Fresh cream Pounds 10 3,550 300 1,065,000
Fresh fruit Pounds 5 1,775 330 585,750
Chocolate Cakes Pounds 5 1,775 300 532,500
Butter cream cakes Pounds 5 1,775 350 621,250
Total
8,875
2,804,500
Fresh & Chocolate Pastries
Pounds 5 1,775 300 532,500
Donuts Pounds 5 1,775 250 443,750
Cream puff Pounds 3 1,065 250 266,250
Cream roll Pounds 3 1,065 250 266,250
Total
5,680 1,508,750
Bread (Out Sourced)
Bread, Bun, Rusk Etc. Kgs 10 3,550 180 639,000
Total
639,000
Dry cakes
Dry cakes Pounds 10 3,550 300 1,065,000
Fruit cakes large Pounds 3 1,065 260 276,900
Fruit cakes small Pounds 5 1,775 120 213,000
Plain cakes large Pounds 3 1,065 240 255,600
Plain cakes small Pounds 5 1,775 110 195,250
Total
9,230 2,005,750
Snacks
Chicken pizza large Pcs 5 1,775 350 621,250
Chicken pizza medium Pcs 10 3,550 240 852,000
Chicken pizza small Pcs 14 4,970 50 248,500
Chicken bread Pcs 8 2,840 550 1,562,000
Chicken drum stick leg piece
Pcs 10 3,550 80 284,000
Chicken leg piece Pcs 12 4,260 150 639,000
Chicken shami Pcs 15 5,325 40 213,000
Chicken sandwich Pcs 5 1,775 70 124,250
Chicken patties Pcs 25 8,875 40 355,000
Chicken bread roll Pcs 10 3,550 60 213,000
Total
40,470 5,112,000
Pre-feasibility Study Bakery and Confectionery
Small and Medium Enterprises Development Authority(SMEDA) 25
Description Units Sales Per Day (Qty)
Sales Per Year (Qty)
Sales Price / Unit (Rs.)
Annual Sales (Rs.)
Sweets & Nimko
Nimko Kgs 2 710 500 355,000
Gulab Jaman Kgs 3 1,065 500 532,500
Chum Chum Kgs 3 1,065 500 532,500
Kalakand Kgs 2 710 500 355,000
Burfi Kgs 3 1,065 500 532,500
Moti Choor Kgs 3 1,065 500 532,500
Pateesa Kgs 1 355 500 177,500
Total
15 6,035 3,017,500
Biscuits
Cake Rusk Kgs 2 710 525 372,750
White Biscuits Kgs 1 355 525 186,375
Coconut Biscuits Kgs 1 355 525 186,375
Macaroon Coconut Kgs 1 355 525 186,375
Almond Macaroon Kgs 1 355 525 186,375
Cheese Finger Kgs 1 355 525 186,375
Salty Zeera Plus Kgs 1 355 525 186,375
Plain Khatai Kgs 1 355 525 186,375
Baker Khani Kgs 1 355 525 186,375
Finger Kgs 1 355 525 186,375
Jam Wafer Kgs 1 355 525 186,375
Special Biscuit Kgs 1 355 525 186,375
Chocolate Biscuits Kgs 1 355 525 186,375
Round Almond Biscuit Kgs 1 355 525 186,375
Total
15 5,325 2,795,625
* Figures are rounded off at zero decimal.
* All the Figures assumed @ 100% production capacity