1

PUNJAB Feed Mills

A Project on:

PUNJAB Animal Feed Mills

Punjab
Animal
Feed Mill

Submitted To:
Sir Labib Shah
Owner:
M.Amir Irshad
BS. Commerce
Session 2011-2015

PUNJAB Feed Mills

Table of Contents
1

Preface

Dedications

Acknowledgement

Executive Summary:

Company Profile

a. Address of Company
b. Location of Project
c. Product Range Mix
d. Installed Capacity
e. Capacity achieved
Estimated Cost of Project
f. Fixed Cost
g. Initial Working Capital
Means of Finance

Names of Financiers

Names of Civil Contractor

10

Names of Machinery Suppliers

11

Machinery Detail

12

Machinery

13

Implementation Schedule

14

SWOT Analysis

15

Market Analysis

16

Technical Analysis

17

Personnel Analysis

18

Financial Analysis

19

Schedule of Cost of Project

20

Assumptions

21

Project Return and Ratios, Means of Finance

22

Project Visit Highlights

23

End words

PUNJAB Feed Mills

Preface
Project Management is an integral part of Bs.commerce Specialization in Finance, because
it gives us the practical knowledge of what we have learnt during our study period.
Now a day the business environment keeps on changing everywhere. New dimensions of
business are coming before us. These dramatic and dynamic changes in business world
require the specialties about the all aspects of business of today. Because of these
requirements business knowledge became important and business education becomes the
need of time. The person with latest knowledge can survive in this vast field .The purpose
of the project feasibility is to broaden the vision of practical experiences with theoretical
knowledge as it increases ones capabilities to handle problems at various stages and the
ability of decision.
We have tried our best to collect the valuable information and its relevant facts regarding
the animals feed mill plant. We also have visited the plant working at Industrial State
SAMMA SATTA (food & feed mills) for making our project reliable and successful .This
project concerning with animal food production namely PUNJAB ANIMAL FEED

MILL.

PUNJAB Feed Mills

Dedication
I would like to dedicate my
efforts for this project to

ALLAH
AlMIGHTY
&
MY parents
without whom
I would not be
able to be here

PUNJAB Feed Mills

Acknowledgement
We pay our humble gratitude, with humility and submission, to ALLAH, the
Almighty, the Omniscient, the Omnipotent & the Omnipresent, who bestowed our
potential to accomplish this task. The completion of this issue is, mere, the blessing of
ALLAH and Holy Prophet Hazrat Muhammad (S.A.W).
Secondly, we must mention Sir Labib Shah for being kind enough to
extend his baseline guidance in the completion of this project report.
We also thank everyone else including our respectable teachers and outspoken friends
of the Department who helped in one way or another in the completion of this project.

PUNJAB Feed Mills

Introduction
Title PUNJAB ANIMAL FEED MILL

Project Assignment:
Each student of Bs.commerce (Finance) 8rd semester required preparing a solid
Project Assignment. The Project assignment is given to increase our knowledge about
Project Management.
Objectives:
1. SWOT analysis of Cattle Feed.
2. Identify and list down the all aspects and important points of Feed Industry.
3. What is a Production Process.
4. What is Cost of unit, Means of finance, Estimated income statement,
Estimated Balance sheet, etc.
Approach to Project:
The Team of project will, analyze, summarize, and interpret the data, which are
collected different primary and secondary sources.

Data Collection:
Both primary and secondary means of data will be used to collect the Data. Like
Books, Internet, personal visits, teacher guidance etc.
Primary Sources:
The Team of Project personally visited the FOOD & FEED MILL for practical view:
Unit selected is;
FIVESTAR FEED MILL SAMMA SATTA

PUNJAB Feed Mills

Questionnaire:
Project Team has prepared a Questionnaire that contains 100 Questions and exists on
15 pages for Management of
FIVESTAR FEED MILL SAMMA SATTA.
Data Preparation & Analysis:
After collection of all the data through both primary & secondary means, team will
used MS. Word, MS. Excel, MS. Power point etc.

Limitation:
Team has visited the various people but the information given by them is just based of
approximation.

PUNJAB Feed Mills

Name of Project
PUNJAB ANIMAL FEED MILL

Location of the Project

Head office:

Haroonabad road Faqirwali

Tel:

0300-2762121

Contact Person:

M.Aamir Irshad
( CEO)

E-mail:

amirgill121@gmail.com

City :

Faqirwali, District Bahawalnagar

Location :

At Haroonabad road near Ghazi cotton industry

Product :

1.Milky Wanda
2.Fat Wanda
Installed Capacity :
The capacity of projected plant produces 364,454
Bags at 100% Efficiency per Year.

PUNJAB Feed Mills

Cost of the Project

46,229,877

Fixed Cost
Initial Working Capital

23,770,123
70,000,000

Means of Finance
Debt

60%

Equity

Names of Lender
UBL Ltd . Faqirwali .

Name of Owner
M.Amir Irshad
Bs.commerce 2011-15

Name of civil Contractor

Akbar and Co Contractors Chishtian

Name of Machinery Supplier

Uzair & Co. Engineering Limited,Lahore

40%

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PUNJAB Feed Mills

Implement Schedule
Over project is constructed with in months and the construction period is start for june
30th 2015. The estimated implementation Schedule is as follows.
Selection, Purchase and the
Registration of Land :

1st july to 20th July

Construction of Building :

25th July to 25th November.

Arrival and installation of

10th July to 15th December

Machinery :

Company Profile
Address of Company:
At Haroonabad road near Ghazi cotton Industry
Head Office of Bahawal Animal Feed Mill is Located in the heart of Faqirwali city
which is easily approachable by key regions of Punjab.

Location of the Project

.

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PUNJAB Feed Mills

Product Range
Unit will produce two basic types of Wanda for different categories of Animal i.e.
1. Punjab Milky Wanda for Milky Animals.

2. Punjab Fat Wanda

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PUNJAB Feed Mills

Installed Capacity
Installed capacity of our processing unit is 100 percent, which is 41tonns per day

Capacity Achieved
Currently the unit is achieving the capacity of 75 percent, which is 30 tonns per day

Estmated Cost of Project

Total Estimated cost of project is
Fixed Cost

Rs.

46,229,877

Initial Working Capital

Rs.

23,770,123

Total cost of project

Rs.

70,000,000

Machinary

Mixture

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PUNJAB Feed Mills

Market Analysis
The size of this sector is still growing. Animal feed mills have been set up around the
areas where the livestock are kept in abundance. Feed is a major cost (about 70%) in
livestock and dairy farming.
The processing and manufacturing of feed along with the efficient use of feed by cattle
also contribute to the cost of feed.
The Agriculture sector contributes 30% of GDP and out of this sub sector Livestock alone
contributes 18% to GDP. The demand for compound feed and Urea Molasses Blocks
(UMB) is increasing day by day with the increase in awareness among farmers. No
animal feeds a mill is operating in the surrounding areas of the project, therefore it is
obvious that the project shall yield better results.
The trend for concentrate feeding to livestock is changing from the conventional
concentrate feeding to a formulated compound feed. Nowadays, compound feed is used
by many livestock and dairy farmers to get the maximum potential in terms of milk and
meat. Compound feed and UMB are very beneficial as both provide all essential nutrients
to the animal.

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PUNJAB Feed Mills

PRODUCT MANUFACTURING PROCESS
The compound feed preparation process requires.
a) High accuracy and precision of weighing
b) feed ingredient handling and processing
c) Mixing
d) Packing
e) Labeling

A liquid storage and a direct-weight system for adding fat, molasses, and water is
required.
Grain processing is done through hammer mill grinding. Mixed feed is delivered in bags
or bulk load out to livestock farms.

Raw Material Requirement

Cattle are ruminant animals with four compartment stomach, capable of utilizing
fibrousfeedstuffs (forages, roughage, and by product feeds) and Non-Protein Nitrogen
(NPN) source like urea that humans cannot utilize. By producing a high-quality protein
from these resources otherwise unusable by humans, cattle make a positive contribution
to human nutrition in terms of meat and milk.

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PUNJAB Feed Mills

Suggested marketing pattern should be as follows

Product
Motton
Beef
Milk

Demand
820
999
15044

Supply
723
1087
28624

Gap
(97)
88
13580

% Surplus/Deficit
(13)%
8%
90%

Target Market
The target markets of our project national market. Initially we will sell our product to
target region of Multan, Lodharan, Bahawalnagar, Rahim yar khan and Bahawalpur.
Punjab, the nutritional requirements are mainly met through fodder crops, shrubs, grasses,
and agro industrial wastes. Punjab produces about 45 million tonnes of fodder from 2.03
million hectares of land with an average yield of 22 tones.
Improving the quantity and quality of feeds could substantially enhance livestock
production from the existing genetic pool of animals. The gap between the requirement
and availability of nutrients could be minimized both through proper fodder research and
extension policies in terms of better quality seed, seed rate and improved agronomic
practices. The National Commission on Agriculture (NCA) 1988 suggested that "if all
animals in milk receive full diet which meets their daily appetite without changing the feed

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PUNJAB Feed Mills

mix i.e. maintaining the present poor nutritional requirement balance, this alone could
increase milk yield by 100 per cent."

Opportunity Rationale
Livestock production is an integral part of Pakistan's agriculture sector and plays a vital role
in national economy. At present, livestock is contributing about 52% to the agricultural
sector and 10.9% to the GDP. Pakistan is geographically located close to the Middle East
and South-East Asia.
Both of these regions are deficient in livestock products and depend upon import from other
countries. The livestock industry in most of the developed world is highly subsidized. With
reduction of subsidies in the wake of WTO, the local livestock sector should have better
opportunities to compete.
Livestock registered a strong growth of 4.30% over the last years impressive growth of
7.5% due to increase in the livestock and poultry products.
The role of livestock in rural economy may be assessed by the fact that 30 to 35 million of
the total rural population is engaged in livestock farming, having 2 to 3 cattle/buffalo and 5
to 6 sheep/goats per family deriving 30% to 40% of income from it.
During year 2007-08, the total red meat production was 1.55 and 0.58 million tons for beef
and mutton, respectively. The per capita consumption indicates a growing demand of meat
in the years to come. Calves for Fattening may come from the dairy herd .
Duping machine
Chain convener
Hopper
Rotary chain
Mixture
Evulator
Pilot machine
Roster
Boilor
Cooler
Grander machine
Packing hoper
Electronic
Genrator

1
1
2
1
1
1
1
1
1
1
1
1

400000
50000
55000
25000

100000

150000
130000
250000
150000
90000
100000
160000
100000

400000
50000
55000
25000
150000
130000
250000
150000
90000
100000
160000
100000
100000

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PUNJAB Feed Mills

Technical analysis
Major machinery of Pak Animal Feed Mill is brought from Germany and France. But
wehave also acquired the local machinery which is easily available and economical in
Pakistan.
Hooper Elevator and Grinding Machine, Motors,
Items of local Machinery
Sr.#

Name of Machinery

Qty

Duping machine

Chain convener

Hopper

Rotary chain

Boilor

Cooler

Grander machine

Packing hoper

Electronic Genrator

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PUNJAB Feed Mills

Items of foreign Machinery

Sr.# Items

Qty

Mixture

Elevator

Pilot machine

Roster

Boiler

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PUNJAB Feed Mills

Elevator

Packing machine

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PUNJAB Feed Mills

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PUNJAB Feed Mills

Animal Feed Process
A.Factory Staff Including Managerial, Technical, Skilled and un-skilled

1
2
3
4
5
6
7
8
9
10

Designation
number
CEO
1
G.M(Doctor)
1
Techical
manager
2
Financial
manager
1
Doctors
6
Supervisor
3
Shift Incharge
1
salary& wages of workers
Machine
Operator
3
Security Guard
3
Driver
3
Mali
2
Sweeper
2

Salary Pm
65000
60000

Annual
Salary
2014
780000
720000

50000

1200000

50000
35000
22000
16000
3000000

600000
2520000
792000
192000
36000000

13000
8000
8000
5000
6000
Total A

468000
288000
288000
120000
144000
44112000

Add Fringe Benefits

50% of total

22056000
66168000

B. Administrative and General

Staff

1
2
3
4

Designation
Chief
Accountant
Assistant
Accountant
Office Boys
Receptionist

Number

Salary PM

Annual
salary
2015

55000

660000

3
2
1

35000
10000
15000
Total B

1260000
240000
180000
2340000

Add Fringe Benefits

50% of Total

1170000
3510000

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PUNJAB Feed Mills

C. Sales Staff

1
2
3
4

Desinations
marketing
mangere
Assistnats of
M.M
Sale Manager
Advertising

number

Salary PM

A.salary
2016

50000

600000

3
1

35000
40000
240000
Total C

1260000
480000
240000
2580000

Add Fringe Benefits

50% of Total

Deperciation on Office Equipment

Ending inventory
other munfaturig expenses
erection and installation chages of machinery
Depreciation on Motor Vehicle (Straight Line method)
Operating Assumptions
Telephone and Telex (per month) Rs. 3,000
)
Administrative Expense growth rate 10%
Printing and Stationery (per month) Rs. 2,000
Legal & professional charges (annual) Rs. 10,000
Traveling & conveyance (per month) Rs. 5,000
Marketing and Promotional Expenditures Rs. 5,000
Amortization of pre-operating expenses yrs. 5
Tax rate 35%
Account payable
Dividend of profit
retained earning
Accured Expense
Account Receiveable

10%
10%
10%
20%
4500
10%
2,500
10000
60000
80000
15%

35%
10%
40%
60%
5%
10%

Assumption of Revenue
Sale price per kg
kg RS
Sale price per bag(37 kg)

20
700

Means of Finance
Debt 60%
Equity 40%

1290000

42,000,000
28,000,000
70,000,000

of sale
of sale

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PUNJAB Feed Mills

Initial working capital
Current Assets
Cash
Account Recivable
Raw material
inventoru
Advances and
Deposits

Rs.
8000000
13,776,363
3000000
3993759
Total

28,770,122

Total

2000000
3000000
5000000

Initial Working
Capital

23,770,122

Current liabilities
Account Payable
Notes Payable

Cost of the project

Cost of The project
Land and it development
Building and civil worker
local Machinery
Foreign Machinery
Marine insurance,imoprt lience fee
Clearance and internal fees
Import and Ipra Surcharge
Furniture and Fixture
Vehicles
Pre-production Expense
Engineering and Technical Fee
Office Equipment
Others contigenies
Intrest During Construction

local
13110000
12850000
820000
3% 28200
20% 188000
1% 9400
226000
324000
150000
103500
3,811,068

Total cost of the project

Income
Statement

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PUNJAB Feed Mills

Income Statement
For the year
ended
sales
Cost of Sales
Gross Profit
Operating
Expense
a)Admenisrative&General
expenses
b)selling
expenses
Total
operating
expense
Operating
Profit
Non operating
expense
Financial
Expense
Worker
particaption
fund
Worker welfare
fund
Amortization
Total non
operating
expense

60%

70%

80%

2014

2015

174,500,
601

2016
201,134,
903

90,724,066
83,776,535

100,086,974
101,047,929

137,763,632
82,109,
813
55,653,820

4394000
1290000

4715600
1419000

5122312
1560900

5684000

6134600

6683212

49,969,820

77,641,935

94,364,717

7,560,
000

6,064,
570

4,536,
000

2,498,
491
999,
396
48600

3,882,
097
1,552,
839
48600

4,718,
236
1,887,
294
48600

11,106,
487

11,548,
105

11,190,
130
83,174,
587
29,111,
105
54,063,
482
21,625,
393
32,438,
089

Profit Before
taxation

38,863,332

66,093,829

Income
tax

13,602,166

23,132,840

Net Profit after

tax

25,261,166

42,960,989

Dividend

10,104,466

17,184,396

Retained
earnings

15,156,700

25,776,593

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PUNJAB Feed Mills

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PUNJAB Feed Mills

Balance sheet
As on

2014
Rs.

2015
Rs.

2016
Rs.

2017
Rs.

Assets
Current Assets
Cash balance
Account recievble
ending inventory
Advances deposits &
other
short term investment
Cash &bank balance
Total current Assets
Fixed Assets

23
,770,122

4,787,438
13776363

63,218,2
29

47,911,84
1
20113490
22,348,3
23

63,218,2
29

90,373,6
54
39,314,9
77
3,295,4
50
36,019,5
27
226,80
0
48600
178,20
0
126,571,3
82

15,307,070

0
23,770,12
2

33,870,872

45,905,87
7

45,905,877

45,905,87
7

42,610,427

Pre-Production Exp.
Less Amortized

324,000
-

324,000
48600

Net Pre-Production Exp.

Sub total

324,000

275,400

42,610,4
27
3,295,45
0
39,314,9
77
275,40
0
48600
226,80
0

70,000,00
0

76,756,699

102,760,0
06

Fixed assets
Less:Acc. Dep.
Net Fixed Assets

Total Assets
Liabilities and owner's
equity
Current liabilities
Account payables
current maturity of L.T.
loan
Notes payable
intrest payable
Accrude expense
worker paticaption fund
Worker welfare fund
tax payable
Total Current liablities
Long Term
Liabilities
UBL

3,295,450

226,713.
20
8,400,00
0

0
33,600,000

8626713

8,400,000

8400000

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PUNJAB Feed Mills

42,000,000
Sub Total

42,000,000

Total liabilities
Owner's equity
Capital & reserves:

42,000,000

Capital

28,000,000

Retained earning

25,200,000

16,800,000

33,600,000

25,200,000

16,800,000

33,600,000

33,826,713

25,200,000

28,000,000

28,000,000

28,000,000

15,156,700

40,933,293

73,371,382

Sub Total

28,000,000

43,156,699

68,933,293

101,371,382

Total Liabilities & Equity

70,000,000

76,756,699

102,760,006

126,571,382

Cash flow statement

For the Year
Ended

2014
Rs.

Sources
Net profit before
tax
Add:Dep. &
Amort.
Equity
Other Sources
Long Term
Loans
increase in
Current
liabilities
Decrease in
Current assets
Total
Uses
Fixed Asset
Pre-Production
Exp.
Long Term
Loans
Re-Payment
of:.
Amounnt of loan
paid
Financial
charges
Workers
particaption

2015

2016

Rs.

Rs,

38,863,332

66,093,829

3344050

3344050

2017
Rs.

83,174,587
3344050

28,000,000

42,000,000
-

8,626,713

(226,713)

29083434
70,000,000

42,207,382

107148026.2

8,400,000

8,400,000

86291923.83

45,905,877
324,000

8,400,000

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PUNJAB Feed Mills

fund
Workers welfare
fund
Tax Paid
Profit Distribute

13,602,166

23,132,840

29,111,105

10,104,466

17,184,396

21,625,393

Dec in liability

Inc in Current asset

Total
Net Cash Inflow/
(Outflow)

46,229,877
23,770,122

Balance Opening
Balance Closing

0
23,770,122

29083434

42461813

61,190,066

48,717,236

101,598,311

(18,982,684)

58,430,790

(15,306,387)

23,770,122

4,787,438

63,218,229

4,787,438

63,218,229

47,911,841

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PUNJAB Feed Mills

Net Present Value
Where i 10%
Year
Cash Flow
PV
NPV

Year1
23770122
21609202
21609202

Year2
(18982684)
(15688169)
5921033

Year3
58430790
4389985
10311018

Internal rate of return

IRR=228%

Payback Period
Payback Period= Irrecoverable in 4 years

Year4
(15306387)
(10454468)
(143450)