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Natural Fruit

Juice Company
Ltd
A Project feasibility report
Feasibility report encompasses
of different type of analysis,
ratios and projected financial
statements to enhance the
investors best utilization of
capital in Natural fruit Juice
Company Ltd.
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PREFACE

Department of Commerce, the Islamia University of Bahawalpur has always
been admirable in its efforts to equip the future executives with arms of
creativity, flexibility and adaptability to meet the challenges offered by fast
changing business environment.
To achieve the above goals the department is providing both text and practical
knowledge to its students with its available resources. Text knowledge is very
well transferred to the students within the premises of the department;
Practical knowledge requires the kind co-operation of various business
organization of the country. Faculty members are always trying their best to
ask the students to explore the market by assigning different field activities
and to prepare a report.
This report has been written on the Natural fruit juice company ltd
Bahawalpur. We have done our best efforts to complete this report efficiently
and effectively with all abilities. We hope this report fulfills the criteria and
expectations of Department of Commerce. We have tried our best to make it
analytical as well as informative.
May Allah help us in this world.





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ACKNOWLEDGEMENT

Up and above everything, we are thankful to ALMIGHTY ALLAH, the
most Beneficent and merciful, and His Holy Prophet (Peace be upon him)
who is forever a true torch of guidance for whole humanity. We are greatly
obliged to ALLAH by whom grace we have been able to complete this
Project Report successfully.
We also offer our thanks to Honorable Sir Hafiz Muhammad Adnan
for providing us a chance to work in such a Profitable Industrial Project.
We also offer our thanks to our Parents for being supporting us in all means
financially and mentally to complete our work. We would like to pay our
special regards to Mr.Qasim Bhati for reference and the owner Mr.sajid of
juice pack company shaikupora for providing all the relevant Information
necessary to complete this report.











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Dedication

We dedicate this report to our parents and friends in recognition of
their worth and to our teachers who are the guiding force for us and it is
their efforts and hard work that showed us the path of success and
prosperity which would be there for us for the rest of our life.
Our thanks to all those who have generously contributed their
theoretical knowledge to this report including our teachers. Without their
understanding and support, completion of this work would not have
possible.

We hope people find this report useful and the subject matter adds
to their knowledge. Keep your dreams alive. Understand to achieve
anything requires faith and belief in yourself, vision, hard work,
determination, and dedication.









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TABLE OF CONTENTS

Sr.NO Name Of Contents Page NO.
1 Name of Project 05
2 Location & Site Selection 05
3 Project Location 05
4 Availability of Labor 05
5 Transportation cost 06
6 Office location 06
7 Utilities 06
8 Sponsors 06
9 Market and Plant capacity 06
10 Products Range 09
11 Man Power 09
12 Installed Capacity Of project 10
13 Production flow chart 11
14 Name of Lenders
15 Name of Civil Contractors
16 Market Analysis
17 Economic Analysis
18 Personal Analysis
19 Technical Analysis
20 Financial Analysis
21 SWOT Analysis
22 Recommendation
23 conclusion
24 Reference
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Name of Project
Natural fruit juice company Ltd
Location & Site Selection
Following factors are taken into account while selecting the location
for project.
Project Location:
The proposed locations for the Natural fruit juice company is Yazman
Road 12,B.c near Airport, Bahawalpur. The said project may be established in
industrial estate area or any other area of above said city.

Availability of Labor:
Adjacent with the area is the rural area that will provide cheaper and
hardworking raw man power for production.

Transportation cost:
The proposed location is a Yazman Road 12, B.c near Airport
Bahawalpur . The project will be situated over the Highway. The transportation
will be easy and the cost of transportation over the country will be less varying
with area to area.
Office location:
Registered Office will be with in the boundary of the factory.


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Utilities:
The area is now becoming industrial area. A lot of factories are situated in
the area. So, utilities are easily available there
Sponsors:
Abdullah Iqbal
Nazakat Hussain

Market and Plant capacity:-
Materials and inputs:
Water
Sugar
Pulp
Artificial flavor
Citric acid
Sodium benzoate

Project Engineering:-

Requirement of Plant and different Machinery for Juice.
Filler Machine
Packer Machine
Sealer Machine
Crowner Machine
palletize Machine


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Products Range:-
Apple juice:

Mango juice









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Peach juice


Grape juice








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Man Power:
The composition of manpower will be 30 highly skilled persons
to supervise technical operations, 70 skilled people to directly work on
production process.

Installed Capacity Of project:
The Plant and Machinery which we use is relatively more efficient and
effective. The chosen Plant & Machinery is capable of producing units per month.
70% starting capacity is proposed.

Production flow chart:

FRUIT







Years 2011 2012 2013
Estimated
Capacity
70% 75% 80%
Preparation of the
fruit
Pulp extraction
Added ingredients
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Name of Lenders:
The amount of loan will be taken from ALFALAH BANK. The amount of loan is
Rs. 63 million. The interest @ 16% per annum.
Name of Civil Contractors:
Mr. IQBAL HUSSAIN HASHMI
Civil contractor of Building department Bahawalpur. We met on 20.05.2010 at 1
p.m.
Name of Machinery Suppliers:


Filtration
Juice
Fill & Seal
Heat treatment
Cool
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Am Industriepark 210 21514 Buchan Germany
Phone +49 4155 49-0 Fax +49 4155 49-2724.

Introduction
To setup a plant for the manufacture of fruit juice from fruit pulp on Yazman road
12 b.c near airport Bahawalpur. The initial produce planned is Apple, Mango,
Grapes, Peach fruit juices. Later on more juices of more fruits can be added.

The main raw materials required are fruit pulp, treated water, sugar, citric acid,
fruit flavors and preservatives all of which are readily available. The technology
and machinery for this investment opportunity are readily available at a very
reasonable cost. Besides having the comparative advantage of being the major
producers of fruit and ready availability of the major raw material, i.e. fruit pulp.

The proposed locations of Yazman road 12 b.c near airport Bahawalpur have the
necessary infrastructure such as roads, electricity and telecommunications
available for the project. These juices can be sold both locally in the adjoining
areas of Bahawalpur, regional and national markets.



PROJECT PROFILE:


Project Brief:

1. Selection, Purchase and the Registration of Land in 1 Month.
2. Construct the Building in 2 months.
3. Purchase and installation of machinery in 2 months.
4. We produce five products of juice.
5. Commercial production starts from 1
st
January.




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Legal Status:

The legal status of business tends to play an important role in any
setup; the proposed Natural Fruit Juice manufacturing setup is assumed to
operate on partnership basis. The Reason being it is easy to setup and manage.

Name of Promoters:
Abdullah Iqbal
Nazakat Hussain

Market Analysis:
Target customers:
The target customers of the proposed project would be the upper, middle
and lower income groups of people.
Exports of Pakistan:









Countries Trade value $
World

152,920

United Arab Emirates

7,890

Saudi Arabia


6,695
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Demand Supply Gap in Pakistan:
The Gap of demand and supply of Natural Fruit Juice in Pakistan is 35%









Growth Percentage of Factories in Pakistan:










Description prices (Rs.)
All type of juices(250 ml) 16
All type of juices(500 ml) 36
All type of juices(1 litter) 91
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Retail Price:










Distribution Channel:
The excessive distribution of the product in local market will be
implemented for this purpose 5 sales person will be hired. The supply of product
is delivered to local distributor free of cost through companys own
transportation and it varies due to deals with other dealers through companys
own transportation or contract with Transportation Company depending on
supply quantity.


Factory

Wholesalers

Retailers

Consumer
Description Prices (Rs.)

250 ml juices

(24*15)360

500 ml juice bottles


(24*35)840
1 liter juice bottles (12*100)1200


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Economic Analysis:
Economic evaluation is considered prominent yardstick to measure the viability of
a project. This analysis is directed towards determining whether the project is
likely to contribute significantly to the development of the economy as a whole
and the contribution of the project would be great enough to justify the use of
available resources. This aspect is reviewed under the following:-
Initial Impact
In order to pursue a theory of balanced growth of the economy the current
government is putting an emphasis on industrialization of our inherently agrarian
economy. Industrialization of substantial dynamic benefits is important for
changing the traditional structure of our less developed economy, while providing
employment for a rapidly increasing labor force, and saving scarce foreign
exchange by import substitution and creating export potentials.
A capital expenditure creates incomes for people engaged in the fabrication of
capital goods, who in turns spend their incomes on consumer goods. An initial
original capital investment creates a wave of income and spending which has
multiplied effect on the national income, increasing it by several times, the
original investment. The initial original capital investment of Rs. 62 million in local
currency would have a healthy impact on the GNP of the country, the extent of
which depends on the degree of multiplied effect.

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It may have major contribution to the society benefits. There will be employment,
infrastructure improvements and that will be a factor to improve the living
standards of the peoples.
EMPLOYMENT OPPORTUNITIES:
The project would create employment opportunities for the following staff:
Detail Total Nos.
Skilled Labor 15
Factory Administrative Staff 14
Marketing Staff 02

BENEFIT COST ANALYSIS
The benefit/Cost ratio of the project is worked out in times which are considered
satisfactory. The NPV of the expected benefit and costs has been taken into
account for the calculation of this ratio.

Personal Analysis:
For the proposed project both skilled and unskilled labour is required which
is available at the selected area for the project. For the training of technical staff
the services of technical institution and experts are haired. A well mannered
process is adopt in hiring and retaining the efficient workers.

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Requirement of staff:
50 people will be employed in manufacturing area, 15 will be
Employed as Administrative staff, 8 will be employed as security guards and 5 will
be as helper in Godown.

Technical Analysis:
The partners will be engaged interning management of factory a part
from over all management their will be skilled workers, Managing Director,
Production Manager, Finance Manager, Accountant, Technical Staff, etc, who will
carry out the policies and decision made for the business.


Electricity & Gas, Fuel, Water
Electricity requirement capacity for the running of machinery is 10,000
kw/Month and also for other inputs is required.










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List of machinery:
Filler Machine:-






Packing Machine:-

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Sealer and label Machine:-

















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Crowner Machine:-



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palletize Machine:-


Financial Analysis:
Financial Analysis
Sr. No Cost of Project: Amount (Rs.)
1 Cost of Land 803000
2 Cost of Building 909650
3 Cost of Plant and Machinery 4270500
4 Cost of Furniture 722500
5 Cost of Vehicles 1955000
6 Legal Charges 7000
Total 8667650


1-Cost Of Land
Area Rate Legal charges Total
1Acer 8,00,000(par acar) 3,000 803,000
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2-Cost of Building
Construction size(Area Sq ft ) rate( Sq ft) Total
Process Hall 300 120 36000
Storage Godown 626 115 71990
Storage Godown 3168 75 237600
Factory Office 1264 65 82160
Other Services 860 65 55900
Parking Area 1404 40 56160
Storage of Finished goods 3168 30 95040
Ground for Expansion 7240 20 144800
Air Conditioning and electricity (internal) 130000
Total 909650

3-Machinary Cost:
Sr.No Name of
Machinary
Cost Deprecation
rate
Accumulated
Depreciation
Book
Value
1 Machine for
Sachet
1000000 15% 150000 850000
2 Shrink Wrapping 669000 15% 100350 568650
3 Misc Fitting 550000 15% 82500 467500
4 Printing Machine 950000 15% 142500 807500
5 Tools &
Equipment
800000 15% 120000 680000
5 Installation
Charges
100000 15% 15000 85000
6 Packing
Machinery
96500 15% 14475 82025
7 Electric
Generator
300000 15% 45000 255000
Total 4465500 195000 4270500

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5-Cost of furniture
Sr.No Cost Deprecation
rate
Book
Value
1 850000 15% 127500 722500


6-Cost of Vehicles
Sr.No Name of
Vehicles
Cost Deprecation
rate
Accumulated
Depreciation
Book
Value
1 Truck 1500000 15% 225000 1275000
2 Car 800000 15% 120000 680000
total 1955000

7-Legal charges
legal charges 7000











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Natural Juice
Balance Sheet
As on December,2011
Assets: Amounts Liabilities Amounts
Current Assets : Current liabilities :
Cash 21985 Accounts Payable 3850
Accounts Receivable 15 % 31001 Accrued Expenses
Packaging Raw materials 8% 1753 short term Loans @ 75% 57395
inventory 7400 Current Maturity of Loan
Finish goods inventory 10 %
production
1634 Notes payable 2500
Stores & Spares 1107 tax payable
Marketable securities 14200 sub total 63745
sub total 79080 Owners Equity & Liabilities
Fixed Assets : Capital & reserves:
Fixed Assets 86877650 Capital 83431940
Less: Acc. Dep. - Retained earning -
Net Fixed Assets 6015 Sub Total 83431940
Pre-Production Exp. Long Term Liabilities
Less Amortized - loan from bank 40% of the
project cost
3467060
Net Pre-Production Exp. Sub Total 3467060
Sub total 86883665 Total Debt & Equity 86899000
Total Assets 86962745 Total Equity & Liabilities 86962745







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Natural Juice
Balance Sheet
As on December,2012
Assets: Amounts Liabilities Amounts
Current Assets : Current liabilities :
Cash 31985 Accounts Payable 4850
Accounts Receivable 15 % 41001 Accrued Expenses
Packaging Raw materials 8% 2753 short term Loans @ 75% 67395
inventory 12800 Current Maturity of Loan
Finish goods inventory 10 %
production
1634 Notes payable 3500
Stores & Spares 4107 tax payable
Marketable securities 84200 sub total 75745
sub total 178480 Owners Equity & Liabilities
Fixed Assets : Capital & reserves:
Fixed Assets 96877650 Capital 93591940
Less: Acc. Dep. - Retained earning -
Net Fixed Assets 78615 Sub Total 93591940
Pre-Production Exp. Long Term Liabilities
Less Amortized - loan from bank 40% of project
cost
3467060
Net Pre-Production Exp. Sub Total 3467060
Sub total 96956265 Total Debt & Equity 97059000
Total Assets 97134745 Total Equity & Liabilities 97134745







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Natural Juice
Income Statement
For the year
2010 2011 2012
Sales 219973 257683 277166
Cost of good Sold:
Raw material consumed 12478 13802 14896
Labour 6300 6750 7200
Manufacturing expense 2965 3176 3388
Depreciation 6497 6497 6497
Cost Of Goods Manufactured 28240 30225 31981
Cost of Goods Sold : 28239 30225 31981
Gross Profit 191734 227458 245185
Operating Expenses:
General and Admin. Expenses 2508 2759 3035
Total Operating Expenses 2508 2759 3035
Operating Profit 189226 224699 242150
Other Income - - -
Total Other Income - - -
Profit before Non-Operating Expenses 189226 224698 242150
Non-Operating Expenses:
Financial Exp. 16597 12661 8768
Amortization of preproduction exp. 1504 1504 1504
Total Non-operating Exp. 18101 14165 10272
Net Profit before Tax 171125 210533 231878
Tax 68450 84213 92751
Net Profit after Tax 102675 126320 139127






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Calculate IRR


Cost of the Project -8667650
1 4666666
2 4227000
3 3676000
4 2234675
5 2457654
6 2454876
7 2679786
8 2875687
9 2986454
10 2875353
IRR 41%


Ratio Calculation:

Gross profit ratio
Gross Profit Ratio=Gross Profit/Sales
Year Gross Profit Sales Ratio
1 191734 219973 87.1625154
2 227458 257683 88.27047186
3 245185 277166 88.46142745

Operating Profit Ratio:
Operating Profit=Operating Profit/Sales
Year Operating Profit Sales Ratio
2010 189,226 219973 86.02237547
2011 224,699 257683 87.19977647
2012 242,150 277166 87.36641579




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Net Profit Ratio:
Net profit ratio=Net Profit/Sales
Year Net profit Sales Ratio
2010 102,675 219973 46.67618299
2011 126,320 257683 49.02147212
2012 139,127 277166 50.19627227


SWOT Analysis
Strengths
Almost 10 manufacturing units of juice are present in Pakistan.
Raw material required for juice manufacturing is available.
Machinery used in juice production is Germany manufactured.
There is cooperation between foreign machinery supplier and local
machinery supplier.
Weaknesses
Local machinery is not of good quality and there is constant
breakdown in local made machinery.
Supply of electricity is not on a regular basis which is a hurdle in
production.
Labor used to operate the machinery is unskilled and not technical.
Demand from the consumer side is not high enough to uplift this
industry.
There is no research and development in this area therefore
technological knowhow in low.

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Opportunities
Product range is not limited.
There is a possibility to export the product to your neighboring
countries.
Financial institution provides loans to small units to upgrade their
production technology.
The interest of local and foreign investors is increasing
Threats
High energy cost has always been a great concern for this industry.
The image of Pakistani products in international market is not on a
positive side because of its low quality.
Lack of training institutions in the country to put the industry on new
technological production basis.
Availability of international brand in local market is a threat for
local industry.

Recommendation:
Due to the customer complaint and the lack of guidelines to
prevent untrained sales staff from serving customers, the following
recommendations are made concerning compensating the customer, staff
training, monitoring new staff, and revising the guidelines
Compensation
Given that the customer has justifiably complained, we should give him his
money back
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Staff Training
In the light of the customer's complaint that our salesperson recommended
the wrong product to him, we should ensure that all sales staff complete
their product training before serving customers. This guideline should be in
our staff manuals and procedures.
Monitoring New Staff
In order to reduce the possibility of new salespeople making incorrect
recommendations to customers, they should always be accompanied by an
experienced salesperson for the first month of their service. This guideline
should also be in our staff manuals and procedures

CONCLUSION:
To conclude, it is evident that nothing obtained as main product or by-product,
from the proposed unit goes waste or has no outlet. All the products serve
directly of indirectly human needs as well as they are involved in the
development of overall economic outlook. Hence the market viability of the
project being based on local raw material will result in substantial saving in
valuable foreign exchange