Pre-Feasibility Study
CLAY BRICKS MANUFACTURING KILN
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
[email protected]REGIONAL OFFICE
PUNJAB
REGIONAL OFFICE
SINDH
REGIONAL OFFICE
KPK
REGIONAL OFFICE
BALOCHISTAN
3rd Floor, Building No. 3,
Aiwan-e-Iqbal Complex,
Egerton Road Lahore,
Tel: (042) 111-111-456
Fax: (042) 36304926-7
[email protected]5TH Floor, Bahria
Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 5610572
[email protected]Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 9213046-47
Fax: (091) 286908
[email protected]
Bungalow No. 15-A
Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 831623, 831702
Fax: (081) 831922
[email protected]June 2015
Pre-Feasibility Study
Clay Bricks Manufacturing Kiln
Contents
1
DISCLAIMER ...............................................................................................................3
EXECUTIVE SUMMARY ..............................................................................................4
INTRODUCTION TO SMEDA ......................................................................................5
PURPOSE OF THE DOCUMENT ................................................................................5
BRIEF DESCRIPTION OF PROJECT & PRODUCT ....................................................6
5.1
PRODUCTION PROCESS FLOW ...............................................................................7
5.2
INSTALLED AND OPERATIONAL CAPACITIES ............................................................8
CRITICAL FACTORS ..................................................................................................9
GEOGRAPHICAL POTENTIAL FOR INVESTMENT ...................................................9
POTENTIAL TARGET CUSTOMERS / MARKETS....................................................10
PROJECT COST SUMMARY ....................................................................................10
9.1
PROJECT ECONOMICS.........................................................................................10
9.2
PROJECT FINANCING ..........................................................................................10
9.3
PROJECT COST ..................................................................................................11
9.4
SPACE REQUIREMENT .........................................................................................11
9.5
MACHINERY & EQUIPMENT REQUIREMENT ...........................................................12
9.6
FURNITURE & FIXTURES REQUIREMENT ...............................................................12
9.7
HUMAN RESOURCE REQUIREMENT ......................................................................13
9.8
UTILITIES AND OTHER COSTS ...............................................................................13
9.9
REVENUE GENERATION .......................................................................................13
10 CONTACT DETAILS..................................................................................................14
10.1
TECHNICAL EXPERTS / CONSULTANTS .................................................................14
11 USEFUL WEB LINKS ................................................................................................14
12 ANNEXURES .............................................................................................................16
12.1
INCOME STATEMENT ...........................................................................................16
12.2
BALANCE SHEET .................................................................................................17
12.3
CASH FLOW STATEMENT .....................................................................................18
13 KEY ASSUMPTIONS .................................................................................................19
13.1
OPERATING COST ASSUMPTIONS ........................................................................19
13.2
PRODUCTION COST ASSUMPTIONS ......................................................................19
13.3
REVENUE ASSUMPTIONS .....................................................................................19
13.4
FINANCIAL ASSUMPTIONS ....................................................................................19
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1 DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the said matter. 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
Document Control
Document No.
PREF-NO 125
Prepared by
SMEDA-Sindh
For information
Provincial Chief (Sindh)
[email protected]Revision
Revision Date
No. 1
June, 2015
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Pre-Feasibility Study
Clay Bricks Manufacturing Kiln
2 EXECUTIVE SUMMARY
Clay Bricks Manufacturing Kiln is proposed to be located at any densely
populated city such as Hyderabad, Larkana, Sukkur, Lahore, Rawalpindi,
Peshawar, Multan, Faisalabad etc where good quality of clay or mud and water
is available abundantly along with easy availability of trained and semi trained
workers. This business can also be undertaken in all small second tier towns, in
addition to suburban towns of large cities.
The proposed product line will consist of brick size of 9 x 4, which is
commonly used in construction of houses in some urban and almost all rural
areas of the country.
This proposed Pre-Feasibility study presents an investment opportunity for
establishing a Clay Bricks Manufacturing Kiln unit with a capacity of 10 cycles
per year initially and in each cycle, 0.5 million bricks of 9 x 4 will be prepared.
Initially the project is proposed to utilize 80% of production capacity.
The total project cost for setting up a Clay Bricks Manufacturing Kiln Unit is
estimated at Rs. 5.56 million out of which Rs. 4.84 million is capital cost and
Rs. 0.72 million is working capital. The project is proposed to be financed
through 50% debt and 50% equity. The NPV is projected around Rs. 7.15
million, with an IRR of 45% and a Payback Period of 2.22 years. The legal
business status of this project is proposed as a Sole Proprietorship.
The most critical considerations or factors for success of the project are:
Most Significant Considerations:
Accessibility of good quality of Mud / Clay to produce high quality
bricks.
Availability of burning material is also a very important factor.
Availability of well experienced clay bricks makers, Kiln burner and
operators.
Equally important Factors:
This project is not suitable in hilly regions where clay / mud are not
available easily.
This business is unsuitable in frequent rainy areas.
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Clay Bricks Manufacturing Kiln
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 prefeasibility studies in key areas of
investment has been a successful hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility 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.
4 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, and production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in Clay Bricks
Manufacturing Kiln Unit by providing them with 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.
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Clay Bricks Manufacturing Kiln
5 BRIEF DESCRIPTION OF PROJECT & PRODUCT
Clay bricks are used in a wide range of buildings from housing to factories, and
in the construction of tunnels, waterways, bridges etc. Their properties vary
according to the purpose for which they are intended, but clays have provided
the basic material of construction for centuries. The industry developed on
traditional lines, using hand-making processes for the most part.
Following key parameters must be addressed as per Pre-Feasibility study
under preparation:
Technology: This proposed unit use manual bricks making technique
which includes preparation of clay, moulding, drying and burning to produce
bricks of different sizes according to the demand.
Location: Processing unit can be set-up in any major city such as
Hyderabad, Larkana, Sukkur, Lahore, Multan, Rawalpindi, Peshawar,
Faisalabad, and Taxila where good quality of clay or mud, water and trained
or semi trained labours are easily available. This business can also be done
in all small second tier towns in addition to suburban towns of large cities.
Product: The unit would initially produce a brick size of 9 X 4, which is
commonly used in construction. But this kiln can also produce other brick
sizes like 12 X 6 along with roof and floor bricks of different sizes
according to the need and demands.
Target Market: Clay bricks are cheap and ideal building material which is
commonly used in construction, civil engineering works as well as for
constructions of sidewalls, footpaths, floors etc. This building material is
equally important for constructions in rural as well as in urban and semiurban areas.
Employment Generation: The proposed project will provide direct
employment to 86 people (contractual + salaried). Financial analysis shows
that the unit will be profitable from the very first year of operations.
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Pre-Feasibility Study
5.1
Clay Bricks Manufacturing Kiln
Production Process Flow
In Pakistan, manufacturing of clay brick is done manually. There are six major
steps involved in clay brick manufacturing Process. Production flow of its
process is given below:
5.1.1 Selection of Clay
The first and most important step in Clay Bricks Manufacturing Process is the
selection of good quality of clay. High quality of clay will produce good quality of
bricks. Low quality of clay may create different defects in the final product.
5.1.2 Clay Preparation
In clay preparation, there are three steps involved:
Tempering
Tempering is the addition of water in clay to make it soft and workable.
Crushing
After water is added, workers crush clay to make it homogeneous.
Sand Mixing
Before placing the clay into molds, the clay is coated with dry sand which
reduces crack effects in the bricks.
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Clay Bricks Manufacturing Kiln
5.1.3 Molding
Placing of clay in a specific hollow container, to produce a particular size of
bricks is called molding. There may be different sizes of molds to produce
different brick products according to the demand of buyers.
5.1.4 Drying
Drying is necessary to remove water which was added during the process of
clay preparation; otherwise this water content or moisture may create cracks in
bricks during burning process. Water is removed by using sun drying
technique. In hot summer days, drying is done in 4 to 5 days and in winter
season it may take 9-10 days.
5.1.5 Firing or Burning
After the particular stacking of raw bricks in the kiln as per the capacity, the
process of firing takes place. At this stage the temperature must remain
constant in particular kiln area to get best quality produce. Proper and efficient
burning techniques results in good quality of bricks and reduces breakage.
5.1.6. Cooling Process
After the completion of burning stage for a specific time and as well as for a
specific number of bricks or rows, the temperature must be slow down steadily
and the burning operator moves the fire to the next raw bricks. After cooling,
the prepared bricks will be ready to remove from Kiln for selling purpose.
5.2
Installed and Operational Capacities
The installed capacity of the proposed Clay Bricks Manufacturing kiln Unit is
0.5 million / cycle. The proposed brick size for this unit will be 9 x 4, which is
commonly used in construction. One may produce bricks of other sizes
according to the demand but profit margin is almost same. The project may
produce roof tiles or other bricks of different sizes as well as per the demand.
At initial stage, the production are 10 cycles / year and it will reach to 15 cycles
/ year at the rate of 2% per year increase and in each cycle there will be
production of 0.5 million bricks. The capacity utilization during year one is
worked out at 80% with 2% increase in subsequent years up to the maximum
capacity utilization of 90%.
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Clay Bricks Manufacturing Kiln
6 CRITICAL FACTORS
Following critical factors should keep in mind, before making investment in this
business.
The land area for kiln construction and office should be purchased,
whereas for preparation of raw bricks land can be acquired on rent
basis.
Availability of high quality clay to produce good quality bricks.
Selection of good land for soil.
Availability of trained labor to produce high quality bricks.
Availability of cheap burning material to make this business
profitable.
This project should not establish in heavy rainy areas.
7 GEOGRAPHICAL POTENTIAL FOR INVESTMENT
Construction activities and its output is an integral part of a countrys economy
and industrial development. The construction industry is often seen as a driver
of economic growth especially in developing countries. This industry can
mobilize and effectively utilize local human and material resources in the
development and maintenance of housing and infrastructure to promote local
employment and improve economic efficiency.
There are different types of construction options including reinforced concrete
structure, clay bricks, metal roof etc. Due to the soaring construction costs, low
cost construction options are in high demand in most of the rural and urban
areas of the country. The clay bricks are used in a large number of construction
projects including non-traditional / traditional housing, community centers,
warehouses and factories etc. It is also suitable for schools and other public
buildings especially in the rural areas.
Demand for such type mainly exists for housing projects in villages, towns,
urban, semi-urban and smaller cities. Additionally, in larger cities the low cost
construction materials are used in suburban housing schemes and in many
other public or private projects. The clay bricks manufacturing unit can be
established anywhere in the country or near the towns or cities where main
access to basic raw materials and requirements for this project are easily
available, like Hyderabad, Larkana, Sukkur, Lahore, Rawalpindi, Multan,
Faisalabad and Quetta.
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Clay Bricks Manufacturing Kiln
8 POTENTIAL TARGET CUSTOMERS / MARKETS
Market for the clay bricks exist almost in all over the country. Investors can
find demand of clay bricks round the year. Therefore, Clay Bricks
Manufacturing Unit can be established at any time of the year. Expected
potential customers are given below:
1. Contractors of construction industry.
2. Governments construction projects.
3. Building material suppliers.
4. Individuals of rural & urban areas.
9 PROJECT COST SUMMARY
9.1
Project Economics
All the figures in this financial model have been calculated for estimated sales
of 500,000 bricks in year one. The capacity utilization during year one is
worked out at 80% with 2% increase in subsequent years up to the maximum
capacity utilization of 90%.
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 (yrs.)
2.22
Net Present Value (Rs.)
9.2
7,159,368
Project Financing
Following table provides details of the equity required and variables related to
bank loan:
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Clay Bricks Manufacturing Kiln
Table 2: Project Financing
Description
Details
Total Equity (50%)
Rs.2,784,750
Bank Loan (50%)
Rs. 2,784,750
Markup to the Borrower (%age / annum)
18%
Tenure of the Loan (Years)
9.3
Project Cost
Following fixed and working capital requirements have been identified for
operations of the proposed business.
Table 3: Project Cost
Description
Amount (Rs.)
Capital Cost
Land
2,400,000
Plant and Machinery
1,417,000
Site/Office Renovation & Construction
950,000
Plant / Office Furniture
25,000
Preliminary Expenses
50,000
Total Capital Cost
4,842,000
Working Capital
Raw Material Inventory (clay, sand, firing material etc.)
Utilities office and Kiln (1 month)
15,000
Total Working Capital
727,500
Total Project Cost
9.4
712,500
5,569,500
Space Requirement
The space requirement for the proposed Clay Bricks Manufacturing Kiln Unit is
03 acres. Space for the manufacturing unit has been calculated on the basis of
considering various facilities including management office, production area
where kiln will be constructed, storage area, open space, etc. Details of space
requirement and cost related to land & building is given below:
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Clay Bricks Manufacturing Kiln
Table 4: Space Requirment for Kiln & Office construction and land cost.
Civil work/
Construction
Cost/sq.ft.
Estimated
Area
Description
Land (acres)
3 Acres
Bricks Kiln Construction
Total Cost
(Rs.)
2400,000
--
--
450,000
Storage area
500 sq. ft.
400
200,000
Office and staff facilities
500 sq. ft.
600
300,000
Total Cost
9.5
3,350,000
Machinery & Equipment Requirement
Plant, machinery and equipment for the proposed project are stated below:
Table 5: Machinery & Equipment
Description
Quantity
Unit Cost
(Rs.)
Molds
Iron Buckets
Shovels
Tractor & trolley
Tube well (small diesel engine)
100
100
100
1
1
600
350
500
1,200,000
72,000
Total
9.6
Total Cost
(Rs.)
60,000
35,000
50,000
1,200,000
72,000
1,417,000
Furniture & Fixtures Requirement
Details of the furniture and fixture required for the project are given below;
Table 6: Furniture & Fixture
Description
Quantity
Tables
Chairs
Sitting Benches
Electrical Fans
2
6
2
2
Total
5,000
8,00
2,500
2,600
Total Cost
(Rs.)
10,000
4,800
5,000
5,200
25,000
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June 2015
Unit Cost
(Rs.)
Pre-Feasibility Study
9.7
Clay Bricks Manufacturing Kiln
Human Resource Requirement
In order to run operations of Clay Bricks Manufacturing Kiln smoothly, about 80
contractual employees will be engaged for the preparation of raw bricks apart
from contractual employees, some human resources will be hired on monthly
salary basis, details are given as under:
Table 7: Human Resource Requirment
Description
No. of
Employees
Monthly
Salary
per
person
(Rs.)
Total
Monthly
Salary
(Rs.)
Annual
Salary
(Rs.)
Business Unit Manager/owner
20,000
20,000
240,000
Supervisor
15,000
15,000
180,000
Accountant
12,000
12,000
144,000
Guard / Chowkidar
12,000
12,000
144,000
Tractor Driver
12,000
12,000
144,000
Helper
12,000
12,000
144,000
Total
83,000
83,000
996,000
9.8
Utilities and other costs
An essential cost to be borne by the project is the cost of burning material. The
burning or firing material expenses are estimated to be around Rs.532,500 per
production cycle, whereas fuel expenses are estimated to be Rs. 85000 /
production cycle which includes fuel for small tube well and tractor.
Furthermore promotional expense being essential for marketing of Clay Bricks
Manufacturing Unit is estimated as 0.25% of Sales.
9.9
Revenue Generation
Based on the capacity utilization of 80% of the unit, sales revenue during the
first year of operations is estimated as under;
Table 8: Revenue Generation Year 1 (10 cycles/year)
Description
A Grade Brick
B Grade Brick
Wastage
No. of Units
Produced
/cycle
350,003
75,001
75,001
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June 2015
Sale Price /
unit (Rs.)
04
03
1.5
Sales Revenue
(Rs.)/cycle
1,400,011
225,002
112,501
Pre-Feasibility Study
Clay Bricks Manufacturing Kiln
Total
500,004
1,737,514
Gross Annual Sales
20,850,167
10 CONTACT DETAILS
In order to facilitate potential investors, contact details of private sector Service
Providers relevant to the proposed project be given:
10.1 Technical Experts / Consultants
Name of Expert/
Organization
Solangi Enterprises
Asghar Ali
Ali Khan Otho
Address
Contact
Number.
Phulji Road Dadu.
Bhan Saeedabad Town, Distt. Jamshoro
Bodla Bahar Colony, Sehwan Sharif.
0344-3239339
0300-3649733
0306-3253398
11 USEFUL WEB LINKS
Small & Medium Enterprises Development Authority
(SMEDA)
www.smeda.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
Trade Development Authority of Pakistan (TDAP)
www.tdap.gov.pk
Security Commission of Pakistan (SECP)
www.secp.gov.pk
Federation of Pakistan Chambers of Commerce and
Industry (FPCCI)
www.fpcci.com.pk
State Bank of Pakistan (SBP)
www.sbp.org.pk
Punjab Small Industries Corporation
Sindh Small Industries Corporation
Pakistan Horticulture Development and Export Company
(PHDEC)
Punjab Vocational Training Council (PVTC)
Technical Education and Vocational Training Authority
(TEVTA)
www.psic.gop.pk
www.ssic.gos.pk
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June 2015
www.phdec.org.pk
www.pvtc.gop.pk
www.tevta.org
Pre-Feasibility Study
Clay Bricks Manufacturing Kiln
Pakistan Readymade Garment Technical Training Institute
Livestock & Dairy Development Department, Government of
Punjab.
Punjab Industrial Estates (PIE)
Faisalabad Industrial Estate Development and Management
Company (FIEDMC)
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June 2015
www.prgmea.org/prgtti/
www.livestockpunjab.gov.pk
www.pie.com.pk
www.fiedmc.com.pk
Pre-Feasibility Study
Clay Bricks Manufacturing Kiln
12 ANNEXURES
12.1 Income Statement
Year 10
Projected Income Statement (Rs.)
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Revenue
Beginning Inventory
Ending Inventory
Gross Revenue
Sales on Credit
Sales on Cash
Bad Debt Expenses
Net (Adjusted Sales)
20,850,167
334,833
20,515,333
2,051,533
18,463,800
41,031
20,474,303
22,543,200
334,833
358,558
22,519,476
2,251,948
20,267,529
45,039
22,519,476
24,373,708
358,558
383,964
24,348,302
2,434,830
21,913,472
48,697
24,348,302
26,352,853
383,964
411,171
26,325,646
2,632,565
23,693,081
52,651
26,325,646
28,492,705
411,171
440,307
28,463,569
2,846,357
25,617,212
56,927
28,463,569
30,806,313
440,307
471,510
30,775,110
3,077,511
27,697,599
61,550
30,775,110
33,307,785
471,510
504,924
33,274,371
3,327,437
29,946,934
66,549
33,274,371
36,012,377
504,924
540,708
35,976,593
3,597,659
32,378,934
71,953
35,976,593
38,936,582
540,708
579,030
38,898,261
3,889,826
35,008,435
77,797
38,898,261
42,098,233
579,030
620,068
42,057,194
4,205,719
37,851,475
84,114
42,057,194
Cost of Sales
17,220,000
18,440,100
19,746,701
21,145,939
22,644,383
24,249,071
25,967,539
27,807,857
29,778,669
31,889,231
Material Cost
Labor (Production Staff)
Other Utilities
9,570,000
7,530,000
120,000
10,249,470
8,064,630
126,000
10,977,182
8,637,219
132,300
11,756,562
9,250,461
138,915
12,591,278
9,907,244
145,861
13,485,259
10,610,658
153,154
14,442,712
11,364,015
160,811
15,468,145
12,170,860
168,852
16,566,383
13,034,991
177,295
17,742,596
13,960,476
186,159
Gross Profit
Gross Profit Margin
3,254,303
16%
4,079,376
18%
4,601,601
19%
5,179,707
20%
5,819,186
20%
6,526,039
21%
7,306,832
22%
8,168,736
23%
9,119,592
23%
10,167,963
24%
996,000
10,000
239,200
283,400
51,186
1,095,600
10,000
215,280
311,740
56,299
1,205,160
10,000
193,752
342,914
60,871
1,325,676
10,000
174,377
377,205
65,814
1,458,244
10,000
156,939
414,926
71,159
1,604,068
150,745
456,419
76,938
1,764,475
135,671
502,060
83,186
1,940,922
122,104
552,266
89,941
2,135,014
109,893
607,493
97,246
2,348,516
98,904
668,242
105,143
1,579,786
1,674,517
1,688,919
2,390,457
1,812,697
2,788,904
1,953,072
3,226,635
2,111,268
3,707,918
2,288,169
4,237,870
2,485,392
4,821,440
2,705,234
5,463,503
2,949,646
6,169,946
3,220,805
6,947,158
471,119
397,282
309,002
203,452
77,255
1,203,398
103,010
1,100,388
1,993,175
246,135
1,747,040
2,479,902
343,480
2,136,422
3,023,183
478,296
2,544,887
3,630,663
630,166
3,000,497
4,237,870
793,861
3,444,009
4,821,440
968,932
3,852,508
5,463,503
1,161,551
4,301,952
6,169,946
1,381,981
4,787,965
6,947,158
1,654,005
5,293,152
91,699
145,587
178,035
212,074
250,041
287,001
321,042
358,496
398,997
441,096
General Administrative & Selling Expenses
Salaries
Lease Charges of Land - Quarry / Excavation
Plant/Office Miscellaneous Expenses
Amortization of Preliminary Expenses
Depreciation Expense
Maintenance Expense (Brick Kiln)
Marketing & Selling
Subtotal
Operating Income
Financial Charges (15% Per Annum)
Earnings Before Taxes
Tax
Net Profit
Monthly Profit After Tax
16
June 2015
Pre-Feasibility Study
Clay Bricks Manufacturing Kiln
12.2 Balance Sheet
Projected Balance Sheet (Rs.)
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
2,415,000
712,500
0
0
3,024,130
398,750
334,833
341,922
4,459,722
427,061
358,558
375,325
6,174,118
457,383
383,964
405,805
8,165,625
489,857
411,171
438,761
10,367,195
524,637
440,307
474,393
13,854,972
561,886
471,510
512,919
17,728,188
601,780
504,924
554,573
22,028,696
644,506
540,708
599,610
26,793,778
690,266
579,030
648,304
31,995,638
739,275
620,068
700,953
Total Current Assets
3,127,500
4,099,635
5,620,666
7,421,269
9,505,413
11,806,532
15,401,286
19,389,465
23,813,520
28,711,378
34,055,935
Fixed Assets
Plant Machinery & Facility
Factory Construction
1,417,000
950,000
1,275,300
855,000
1,147,770
769,500
1,032,993
692,550
929,694
623,295
836,724
655,966
753,052
590,369
677,747
531,332
609,972
478,199
548,975
430,379
494,077
434,841
Furniture & Fixtures
Vehicle
Total Fixed Assets
25,000
0
2,392,000
22,500
0
2,152,800
20,250
0
1,937,520
18,225
0
1,743,768
16,403
0
1,569,391
14,762
0
1,507,452
13,286
0
1,356,707
11,957
0
1,221,036
10,762
0
1,098,933
9,686
0
989,039
8,717
0
937,635
50,000
40,000
30,000
20,000
10,000
Total Assets
5,569,500
6,292,435
7,588,186
9,185,037
11,084,804
13,313,984
16,757,993
20,610,501
24,912,453
29,700,418
34,993,570
Owner's Equity
2,784,750
3,885,138
5,632,178
7,768,600
10,313,487
13,313,984
16,757,993
20,610,501
24,912,453
29,700,418
34,993,570
Long Term Liability
2,784,750
2,407,297
1,956,007
1,416,437
771,317
Total Equity & Liabilities
5,569,500
6,292,435
7,588,186
9,185,037
11,084,804
13,313,984
16,757,993
20,610,501
24,912,453
29,700,418
34,993,570
Assets
Current Assets
Cash & Bank Balance
Fuel Inventoriy (Diesel)
Finished Goods Inventory
Accounts Receivable
Intangible Assets
Preliminary Expenses
17
June 2015
Pre-Feasibility Study
Clay Bricks Manufacturing Kiln
12.3 Cash Flow Statement
Projected Statement of Cash Flows (Rs.)
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
0
0
0
-
1,100,388
239,200
10,000
(341,922)
313,750
(334,833)
986,583
1,747,040
215,280
10,000
(33,402)
(28,311)
(23,724)
1,886,882
2,136,422
193,752
10,000
(30,480)
(30,321)
(25,406)
2,253,966
2,544,887
174,377
10,000
(32,956)
(32,474)
(27,207)
2,636,627
3,000,497
156,939
10,000
(35,632)
(34,780)
(29,136)
3,067,888
3,444,009
150,745
(38,526)
(37,249)
(31,202)
3,487,777
3,852,508
135,671
(41,654)
(39,894)
(33,415)
3,873,216
4,301,952
122,104
(45,037)
(42,726)
(35,784)
4,300,508
4,787,965
109,893
(48,694)
(45,760)
(38,321)
4,765,082
5,293,152
98,904
(52,649)
(49,009)
(41,039)
5,249,360
(377,453)
(451,290)
(539,570)
(645,120)
(771,317)
(377,453)
(451,290)
(539,570)
(645,120)
(771,317)
Cash Flow From Operating Activities
Net Profit
Add: Depreciation Expense
Amortization Expense
(Increase) / decrease in Receivables
(Increase) / decrease in RM
(Increase) / decrease in FG Inventory
Net Cash Flow From Operations
Cash Flow From Financing Activities
Receipt of Long Term Debt
Repayment of Long Term Debt
Owner's Equity
2,784,750
Net Cash Flow From Financing Activities
5,569,500
2,784,750
Cash Flow From Investing Activities
Capital Expenditure
Factory/Office Furniture
Preliminary Operating Expenses
Raw Material Inventory (15 Days)
(2,367,000)
(25,000)
(50,000)
(712,500)
(95,000)
Net Cash Flow From Investing Activities
(3,154,500)
(95,000)
(47,500)
NET CASH FLOW
2,415,000
609,130
1,435,593
1,714,396
1,991,507
2,201,571
3,487,777
3,873,216
4,300,508
4,765,082
5,201,860
Cash at the Beginning of the Period
Cash at the End of the Period
0
2,415,000
2,415,000
3,024,130
3,024,130
4,459,722
4,459,722
6,174,118
6,174,118
8,165,625
8,165,625
10,367,195
10,367,195
13,854,972
13,854,972
17,728,188
17,728,188
22,028,696
22,028,696
26,793,778
26,793,778
31,995,638
18
June 2015
(47,500)
Pre-Feasibility Study
Clay Bricks Manufacturing Kiln
13 KEY ASSUMPTIONS
13.1 Operating Cost Assumptions
Description
Details
Shift Length
Number of shifts
Days operational per year
12 hours
01
330 days
13.2 Production Cost Assumptions
Description
Details
Raw Material Cost per unit of product
(Combine Average Price)
Increase in Cost Price
Production Capacity
Production Capacity Utilization
Rs.1.6
5%
500,000 units
80%
13.3 Revenue Assumptions
Description
Details
Price per unit (Combine Average Price)
Price per unit growth rate
Rs.4
6%
13.4 Financial Assumptions
Description
Details
Project Life
10 years
Debt Equity Ratio
50 : 50
Interest Rate on Long Term Debt
18%
Long Term Debt Tenure
5 years
Numbers of Payment / Year
12
19
June 2015
