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January, 2007
Pre-feasibility Study
DISCLAIMER
The purpose and scope of this information memorandum is to introduce the subject matter
and provide a general idea and information on the said area. All the material included in
this document is based on data/information gathered from various sources and is based on
certain assumptions. 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 does not assume any liability for any financial or other loss resulting from this
memorandum should not be relied upon for making any decision, investment or otherwise.
The prospective user of this memorandum is encouraged to carry out his/her own due
diligence and gather any information he/she considers necessary for making an informed
decision. The content of the information memorandum does not bind SMEDA in any legal
or other form.
DOCUMENT CONTROL
Document No. PREF-05
Prepared by SMEDA-Balochistan
Approved by Head of Department
Issue Date
Issued by Library Officer
BAL-PREF-05/January, 2007
Pre-feasibility Study
1 INTRODUCTION TO SMEDA
The Small and Medium Enterprise Development Authority (SMEDA) was established with
the objective to provide fresh impetus to the economy through the launch of an aggressive
SME support program.1i
Since its inception in October 1998, SMEDA had adopted a sector SME development
approach. A few priority sectors were selected on the criterion of SME presence. In depth
research was conducted and comprehensive development plans were formulated after
identification of impediments and retardants. The all-encompassing sector development
strategy involved recommending changes in the regulatory environment by taking into
consideration other important aspects including financial aspects, niche marketing,
technology up-gradation and human resource development.
SMEDA has so far successfully formulated strategies for sectors including, fruits and
vegetables, marble and granite, gems and jewelry, marine fisheries, leather and footwear,
textiles, surgical instruments, urban transport and dairy. Whereas the task of SME
development at a broader scale still requires more coverage and enhanced reach in terms of
SMEDA’s areas of operation.
Along with the sector focus a broad spectrum of business development services is also
offered to the SMEs by SMEDA. These services include identification of viable business
opportunities for potential SME investors. In order to facilitate these investors, SMEDA
provides business guidance through its help desk services as well as development of project
specific documents. These documents consist of information required to make well-
researched investment decisions. Pre-feasibility studies and business plan development are
some of the services provided to enhance the capacity of individual SMEs to exploit viable
business opportunities in a better way. This document is in the continuation of this effort to
enable potential investors to make well-informed investment decisions.
1
For more information on services offered by SMEDA, please visit our website: www.smeda.org.pk
BAL-PREF-05/January, 2007
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3 PROJECT PROFILE
The project is related to setting up Marble Processing Units in Quetta, Marble City
Gaddani, Loralai, Khuzdar and other promising areas of Balochistan. The document
highlights all the marketing, management, and financial aspects required for the
establishment and successful running of the project.
3. 1 Project Brief
The plant would process (cut to predefined sizes and polish) raw marble blocks and produce
marble strips/tiles and slabs. The project would not only focus the construction industry and
demand for marble within Quetta city, Marble City Gadani, Loralai, Khuzdar, but other
parts of the province as well. Once the facility starts at its full capacity, it could also supply
marble steps, strips, tiles, and slabs to other parts of the country.
The total project investment is Rs. 20.5 millions with a very healthy Project Internal Rate of
Return (IRR) of 30% against the Capital Cost (WACC) of 12%. The total project
investment would be paid back in approximately 3.99 years.
3. 2 Dimensional Stone – A definition
All natural stones including Onyx, marble, granite and slate, which can be cut to sizes,
polished and used for construction purposes, are referred to as dimensional stones. Each of
these stones represents a family of similar stones, with various combinations of different
minerals. The major distinction is made on the basis of their base minerals which are
Calcium compounds (calcareous) for marbles, Silica compounds (siliceous) for granite and
Shale clay for slate.
Dimensional stones are characterized by aesthetics/acoustics and practicality in use. Their
apparent occurrences have lent them to many uses for centuries particularly construction
and allied uses. Their different chemical, mineralogical, and physical properties determine
their appropriate extraction and processing requirements, in addition to bearing upon their
end use.
3.2.1 Marble
Marble is a crystalline, compact variety of metamorphosed limestone, consisting primarily
of calcite (CaCO3), dolomite (CaMg (CO3)2 or a combination of both minerals. Pure calcite
is white, but mineral impurities add color in variegated patterns. Extensive deposits are
located in Italy, India, Pakistan, Spain, Greece, Brazil, China, Afghanistan, Turkey, Great
Britain, and in the United States. Commercially the term marble is extended to include any
rock composed of calcium carbonate that takes polish including ordinary limestone. The
term is further extended in the loose designation of stones such as Onyx, alabaster,
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serpentine and other soft rocks. Specific gravity of marble ranges between 2.68 to 2.72,
determining the density of the stone.
Marble is a durable stone in dry atmosphere only when protected from rain. The surface of
marble crumbles readily when exposed to moist or acidic environment. Purest form of
marble is statuary marble, which is white with visible crystalline structure. The distinctive
luster of statuary marble is caused by the reflection of penetrated light from the surfaces of
inner crystals.
3. 3 Opportunity Rationale
Marble is included in the list of largest minerals extracted among chromite, coal, rock salt,
lime stone, china clay, dolomite, fire clay, gypsum, silica sand etc. Since 1990 mining &
quarrying has consistently contributed 0.5 percent to the Gross Domestic Product2.
Marble processing is gaining popularity due to increase in its usage in construction
industry. Today almost all the modern architectural designs of houses and plazas include
the final touch of beautiful shades of marble in exterior as well as interior portions. In
Quetta, there is a great demand for a fully equipped marble processing plant. The new plant
could not only explore the construction industry within the city which is on a boom since
past 5 years, but could also be able to full fill the orders from the adjoining areas. Moreover
Government of Balochistan has also announced establishment of marble city at Gaddani,
where number of incentives has been announced for the investors. So far 8 units have
already been commissioned, 50 under construction and 06 ready to start construction.
Expansion in this cluster will be more beneficial being the future gateway to the export
markets.
3. 4 Market Entry Timing
In Pakistan, the construction process is not affected by weather conditions however, in
some parts of the country, few areas of construction process is not feasible during the
extreme cold weather conditions where the temperature falls below 0 degrees but that again
do not affect the overall construction process. Therefore, extraction and processing of
dimensional stones is a round the year process.
3. 5 Proposed Business Legal Status
The business can be started as sole proprietorship or partnership because of great potential
involved. Furthermore, comparatively fewer complications are involved in forming,
administering and running the sole proprietorship or partnership businesses.
3. 6 Proposed Product Mix
The plant would process (cut and polish) raw marble blocks and would produce four types
of products i.e. marble steps, strips, slabs, and marble tiles. Strips are thinner in width and
are used floor borders, floor designs and stairs front facings. The slabs are wide / thicker
and are used for table tops, kitchen tops, washbasin tops, building front facings & floors.
2
ESP 1997-98
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The plant would produce tiles of various sizes from the slabs depending upon the
requirement of customers. Marble Steps are usually used for stairs.
3. 7 Production Capacity
The unit would have the capacity to process around 370,260 sq.ft. of marble and would
produce around 259182 sq.ft. of marble @ 70% capacity in one year, which includes slabs
around 107,375 sq.ft. & tiles/strips/Steps around 262,885 sq.ft.. The marble processing
industry has high rate of wastages i.e. almost 45%. The wastages may be reduced if
standardized raw material (Square blocks) is provided to the industry.
3. 8 Project Investment
The total project investment is Rs. 20.5 millions which includes Capital Cost of Rs. 18.41
million and working capital of Rs. 2.12 million. It is assumed that the project would be
partially equity financed (70%) and partially debt financed (30%).
3. 9 Recommended Project Parameters
Human
Capacity Resource Technology/Machinery Location
Quetta, Loralai,
Khuzdar, Marble
City Gadani &
other feasible
370,260 sq.ft./year 15 Local Made marble
processing areas
of Balochistan
Financial Summary
Cost Of Capital
Total Cost IRR NPV Pay Back Period (WACC)
Rs. 20.5 M 30% 25.19 M 3.99 Years 12%
3. 10 Suitable Location
It is suitable to establish the plant in Quetta, Loralai, Khuzdar, Marble City Gaddani, Hub,
and Chagai. However such a plant could be established in other parts of the country
provided the following main conditions are fulfilled such as: raw material and man power
availability, accessibility to markets, and reasonable trend of using dimensional stones in
construction industry.
3. 11 Key Success Factors/Practical Tips for Success
Large deposits of superior quality marble in the country with ample production.
Availability of large variety of types and colors.
Significant number of mines and processing units.
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Worldwide natural stone extraction is meanwhile estimated at 150 million tons per year.
Annual production after deduction of waste and cutting losses amounts to about 820 million
m² – referred to a slab thickness of 2 cm. The total production value is estimated at 40
billion US $.
With the exception of Spain, however, the strong global growth took place mainly outside
Europe. China now extracts around twice as much natural stone from its many quarries as
the previous market leader Italy. India also overtook Italy last year for the first time.
The weightings have therefore changed appreciably within only a few years. Besides China
and India, the »top ten« members Iran, Turkey, Brazil and the USA are among the winners
of the last five years, whereas Portugal and Greece had to accept setbacks.
The development in Turkey has been particularly rapid. Production and export have trebled
within five years. Last year, Turkey exported finished natural stone goods worth 429
million US $.
The world’s most important customer for finished goods is the USA. Stone products worth
1.72 billion US $ were imported in 2003, 18.3 % more than a year before. The most
important supplier was Italy, which increased its US exports by a total of 7.2 % to 535
million US $ within two years.
However, other countries expanded even more strongly in the same period, in both
percentage and absolute figures. For example, Brazilian deliveries of finished goods to the
USA rose by 101 % in value to 210 million US $. Turkey even increased its exports by 120
% to 183 million US $, India by 63 % to 152 million and China by 85 % to 140 million US
$. Germany also managed to increase its exports – at a low level – by 23 % to 12.25 million
US $, but the French (-10 %) and Canadians (-13 %) suffered losses. 3
INDIA
Statistics illustrate that India’s contribution to the world stone market is 10%, and the
country produces 27% of the world’s stone. The fact is: India is increasingly successful in
exporting natural stone and products of natural stone. Apart from a slight drop in 1998,
India’s natural stone exports rise every year. The annual growth has settled at about 15 per
cent for some years now. This means India is the third largest natural stone producer in the
world after Italy and China and plays an increasingly important role in world trade in
natural stones.
In figures: Natural stone production in India had already clearly exceeded the 3-million tons
mark in 2000. Domestic demand rose at the same time: 160,000 tons of natural stones
remained in the country in 2002. This is as much as 20 per cent more than the year before.
Besides raw blocks, rough slabs and standard tiles, gravestones were the country’s chief
export earner in the past years. This contrasts with the sale of raw blocks, which has
dropped by almost four per cent a year since 1998.
3
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CHINA
Natural stone imports to China are currently growing even more strongly than exports in
percentage terms. According to the Chinese customs statistics, these rose in value from 438
to 582 million dollars or almost 33 per cent from 2002 to 2003. By far the most important
natural stone region in China is Xiamen in the South-East of the country. Around 65 per
cent of the export volume in 2003 was attributed to this stone center.
The detailed figures show that Xiamen has succeeded in expanding its strong position in the
past years. Virtually all the region’s exports and imports are handled via the port of
Xiamen, which makes it China’s and possibly the world’s most important natural stone
port.
China has become a serious factor in the world markets in Marble & granite tiles especially
in gray, pink and other light colors. Its fast increasing presence has sharply accelerated the
trend of lower prices.
China exported natural stones and natural stone products for a record value of more than a
billion US dollars last year. This is shown by the latest customs statistics from the People’s
Republic. These indicate that natural stone exports increased by almost 20 per cent from
924 million dollars in 2002 to over 1.1 billion dollars in 2003. The increase in the previous
year was slightly less than 21 per cent. 4
ITALY
Italian natural stone exports have increased by 5.6 % in quantity and 2.7 % in value in the
first half of 2004. This is reported by Internazionale Marmi e Macchine Carrara s.p.a.
(IMM), with reference to the official export statistics issued by the Italian Statistics Office
ISTAT. The total export quantity of marble, granite and other processed solid stones
reached 1.53 million tons in the first six months of the current year 2004, compared with
1.45 million tons in the first half of 2003. The export value rose from 792 million euros to
813.1 million euros. The growth is attributed mainly to more exports of granite and granite
products. Marble even showed a slight drop for finished goods. Although not very
important, the export of raw marble increased appreciably in return.
GERMANY
Still the most important customer within the EU – also contributed to the overall positive
export result of the Italian natural stone sector. 435,000 tons of natural stone and natural
stone products worth 131 million euros crossed the Brenner Pass in the first six months of
the year 2004. For marble, IMM calculated a rise of 13.7 % in quantity and 10.7 % in value.
For granite, the growth of 8.5 % in quantity faced an increase of only 1 % in value, which
indicates a continuing drop in prices. Imports in Italy have grown more than exports.
1.24 million tons of natural stones (mainly rough blocks) worth 240 million euros were
4
http://www.stonecontact.com
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imported up to the end of June 2004. This corresponds to growth of 10.7 % in quantity and
3.7 % in value.5
USA
The natural stone market in the USA has grown strongly in the past years, with
consumption more than trebling between 1994 and 2003. The USA is meanwhile the
world’s second most important natural stone consumer after China in absolute figures.
The quantity of imports to the USA in 2003 rose by 39.2 % for granite and granite products
and 20.3 % for marble. Expressed in US dollars, however, the rise was »only« 28.9 and
11.7 % respectively. The average import price for both marble and granite dropped by more
than a tenth. This is attributed to that fact that cheaper stones are now also being
increasingly imported into the United States from Third World countries. Although this is
mainly at the expense of Italy, the traditional supplier country, Spain, Portugal, Greece and
other European countries are also adversely affected by this development.
The local production of natural stone has increased strongly in the USA, especially in the
last three years. Whereas only 1.20 million tons of rough slabs were quarried ten years ago,
this figure reached 2.25 million tons in 2003, almost twice as much.
As a result of increasing imports for block goods as well (1994: 94,000 t, 2003: 441,000 t),
the quantity processed in the USA itself has also risen markedly, namely from 1.1 million
tons to 2.5 million tons. Around 30 % of all today’s natural stone-finished goods in the
USA are created in its own production plants.
Marble is included in the list of largest minerals extracted among coal, Chromite, rock salt,
lime stone, china clay, dolomite, fire clay, gypsum, silica sand etc. Since 1990 mining &
quarrying has consistently contributed 0.5 percent to the Gross Domestic Product6.
Production of marble & granite has grown substantially at 18% in the last twenty five. It
has been accompanied with high quarry wastage ranging from 60-75% in addition to poor
quality, mainly due to uncontrolled blasting.
Processing industry is using wide array of technological options for basic as well as
finishing stage, all of vintage age. Due to technological imbalance, wastages are around
45% to 55%. Presently the processing industry relies upon local manufactured machinery
and equipment with a very few calibrated and high efficiency machines from reputable
local & international suppliers.
5
www.stonereport.com
6
ESP 1997-98
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4. 4 Regional Distribution
Mining of marble and granite is carried out in Balochistan, NWFP, and Sindh.
4.4.1 Balochistan Contribution to the Sector
Balochistan has nearly 254 mines in operation. Total estimated reserves of marble, onyx,
and granite in the province are around approximately 4.2 billion tons however; proper
survey of the deposits in the province has not been done hence actual reserves are much
more rather inexhaustible. The break down of reserves of marble, onyx, and granite,
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number of mines leased, leased area, and annual production in Balochistan are shown in the
table 4.4.1.
Description Reserves (MT) Mines Leased Leased Area (Acres) Annual Production
(MT)
Onyx 20 million 26 12,110 0.47
Marble 2.5 billion 218 48,080 2.84
Granite 1.5 billion 10 19,753 0.036
Total 4.2 254 79,943 3.346
The colors found in Balochistan are widely accepted in the local markets and have the
capability of international acceptance due to their similarity with the Italian stones, which
have widespread demand in the global markets. Balochistan onyx is one of the favorites in
the world markets and is used for facings, floorings and decorative items. Two onyx mine
in Balochistan (M/s Zehri corporation & Marble Industries Pvt. Ltd. - MIL) in Chaghi Dist)
are the only mines in the country which are properly equipped with modern mining
machinery where quarrying is done on advanced methods.
The province produces about 87% marble, 1% Granite and 12% slate. There are wide
varieties of marble and granite with huge reserves available in the province. Proper study
on reserves calculation for Granite has not been undertaken so far, however a study
conducted by a private consultant in the northern areas indicate 414 million tons of
marketable granite reserves in a single area8. Actual deposits of granite with multiple
shades can be manifold. There are four major clusters of processing units in NWFP and
FATA including Peshawar, Buner, Mardan/Swabi, and Mohmand/Khyber Agency.
According to the official estimates there are 148 processing units in the province.
Sindh also has good colors of granite widely spread in the area of Tharparker. There are 10
mines in operation; while reserves are not known as any efforts in this direction has not
been made so far. The mines are producing blocks in squared shape and are supplied to feed
the local industry. Sindh granite can compete in the international markets with India, as the
colors found in Sindh are better than the colors found in India. There is a big cluster of
7
Industry Estimate
8
2nd Segmite Int.Conf 1994 pp35-43
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processing units in Sindh at Karachi with over 180 medium size units. In addition there are
more than 600 units of small and micro sizes with 1-3 cutters in each unit 9.
In quarry production, Punjab has no contribution to the sector, as there are no mines
identified as yet that are capable of producing marble and granite. However deposits of
Slate and Limestone in the northern Punjab have been identified but no proper source can
be mentioned. Three significant sized clusters of processing units in the province exist at
Lahore, Rawalpindi and Islamabad. Number of processing units in these cities is 93, 112
and 51 respectively. In addition there are smaller clusters in Multan, Faisalabad,
Gujranwala, Sargodha, Sialkot and Gujrat.
5 MARKET INFORMATION
Major categories for usage of dimensional stones are architectural works, funeral trade and
sculptures etc. In the architectural work that include construction and structural works total
share of the dimensional stone is 70% while in the decorative, sculptures and memorial art
etc. its share is 30%. According to their peculiar characteristics, including weather effects,
color fading, load tolerance, edge cuts, water absorption, color choice, hygienic factor,
hardness etc; various type of dimensional stones are used in different locations and places.
Restricted choice of marble for external applications is due to its porosity. They hardly
sustain color and shine due to rainfalls and environmental pollution etc. Marble is preferred
over granite for special works that include sculptures, decorative items, fireplaces etc. due
to their comparative softness.
9
Market survey
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external flooring
7% internal flooring
other uses
30%
7%
special works
7%
funeral trade
11% externa facing
9%
5.2.1 Color
Color is the most important esthetic element that determines chances of marketability of the
product. Preferences for color of dimensional stone vary from market to market, from time
to time and for stone type. Presently various shades in white color of marble and white &
green in onyx are preferred in the European markets. Middle East and Far Eastern markets
are interested in white, black & beige colors in marble and green colors in onyx.
5.2.2 Pattern
The pattern is given by the weave i.e. by the spatial distribution of the elements comprising
the rocks. The pattern is derived from overlapping layers of different colors. Veined pattern
is caused by veins crossing the ground mass of rock. Either giving the material, a well-
defined direction or forming more or less uneven weave, in case of randomly arranged
veins. In the veined pattern, normally found in marble, cutting direction is very important as
this highly influences its appearance.
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applied in the load bearing areas and sharp corners while medium and especially the large
grain material is avoided to be used in the load bearing areas and sharp corners in the wake
of its breakage and cracks. The market segmentation according to pricing and quality
preference is shown in table 5.23.
Although color plays a dominant role in price determination but other attributes as
explained in the above table also play a vital role in the marketability of the dimensional
stones. If the product is rare in color and has fine grain and homogeneous pattern, then it
will attract discerning customers with price on the higher side. Those with medium grain,
common colors and homogeneous pattern are priced in the middle range, while in the same
category products with rare colors having large grain size and heterogeneous pattern are
also ranked in the medium price range.
10
Industry & Market Research
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5. 4. 1 S l abs
Slabs are large semi processed sheets of marble stone with varied sizes and thickness of 2
inches. They are further processed in the local industry or exported to the international
markets. Slabs are cut on gang saws from large blocks of marble and granite. This product
is used for tabletops, kitchen tops, wall facing, flooring and other allied purposes. Price of
slab varies with the quality of material and the size of the sheet.
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5. 5 Target Customers
The target customers for processed marble steps/strips/tiles and slabs includes individuals
and construction companies.
5. 6 Market Potential
Due to modern architectural designs, use of marble steps/strips/tiles and slabs in the
construction industry of the province is increasing, additionally there is huge demand in
Afghanistan also. The increase in demand of marble strips, tiles and slabs could be judged
easily from its supply from Karachi and areas of Punjab in spite of the presence of
reasonable number of marble processing units in Quetta and Loralai, from where the
customers can buy such products at comparatively low prices.
There is great potential for the manufacturing of decorative items including marble
handicrafts, Fire places, office table sets, sculptures etc.
Pakistan’s marble export is around estimated $20-30 million, which can be enhanced many
folds if standardized production measures are ensured. 11
11
APMIA
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6. 1 Machine Maintenance
All the spare parts and mechanical expertise is available in Karachi, Lahore, Faisalabad,
Gujranwala, Rawalpindi and Peshawar.
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8. 1 Recommended Mode
It is recommended to acquire/buy the total land required as most of the machinery requires
fixed installation and cannot be moved easily once installed.
Marble processing requires massive use of water for cutting of stones and electricity for
machinery. It is recommended that a separate transformer (at least 200 KVA) be installed.
Arrangements should be made for sufficient water storage / availability & recycling if
possible to reduce water losses.
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9 PROJECT ECONOMICS
9.1 Project Cost
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10 FINANCIAL ANALYSIS
10. 1 Project Cost
Capital Investment Rs. in actuals
Land 4,500,000
Building/Infrastructure 1,197,650
Machinery & equipment 12,570,000
Furniture & fixtures 27,000
Office vehicles -
Office equipment 43,200
Pre-operating costs 72,500
Training costs -
Total Capital Costs 18,410,350
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Revenue 14,446,562 16,732,983 18,921,070 21,311,490 23,920,644 26,766,175 28,403,289 30,107,486 31,913,936 33,828,772
Cost of goods sold 8,128,841 9,254,522 10,291,350 11,404,759 12,599,904 13,882,289 14,587,078 15,315,593 16,085,649 16,900,023
Gross Profit 6,317,721 7,478,461 8,629,720 9,906,731 11,320,740 12,883,886 13,816,211 14,791,893 15,828,286 16,928,749
Other income 23,415 75,910 158,131 250,336 363,235 513,582 699,615 904,322 1,127,824 1,396,041
Gain / (loss) on sale of assets - - - - - - - - - -
Earnings Before Interest & Taxes 3,711,321 4,912,192 6,129,402 7,474,640 8,969,132 10,655,478 11,738,185 12,874,165 14,079,704 15,383,131
Tax 669,466 957,265 1,251,256 1,576,295 1,937,371 2,344,205 2,582,401 2,832,316 3,097,535 3,384,289
NET PROFIT/(LOSS) AFTER TAX 2,373,560 3,393,939 4,436,271 5,588,684 6,868,860 8,311,273 9,155,785 10,041,849 10,982,169 11,998,842
Balance brought forward 2,373,560 5,767,499 10,203,771 15,792,455 22,661,314 30,972,587 40,128,372 50,170,221 61,152,390
Total profit available for appropriation 2,373,560 5,767,499 10,203,771 15,792,455 22,661,314 30,972,587 40,128,372 50,170,221 61,152,390 73,151,231
Dividend - - - - - - - - - -
Balance carried forward 2,373,560 5,767,499 10,203,771 15,792,455 22,661,314 30,972,587 40,128,372 50,170,221 61,152,390 73,151,231
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Assets
Current assets
Cash & Bank 600,000 1,741,528 5,849,470 9,963,623 15,069,965 21,253,492 30,104,739 39,856,716 50,575,442 62,206,998 77,397,117
Accounts receivable - 2,374,777 2,562,702 2,930,470 3,306,786 3,717,710 4,166,040 4,534,476 4,809,105 5,097,651 5,403,510
Finished goods inventory - 172,954 193,071 214,683 237,891 262,802 289,532 303,897 319,075 335,118 352,084
Equipment spare part inventory 19,192 22,900 26,676 30,954 35,792 41,259 45,104 49,254 53,785 58,733 -
Raw material inventory 875,549 1,034,785 1,193,942 1,372,184 1,571,564 1,794,347 1,942,896 2,101,436 2,272,914 2,458,383 -
Pre-paid annual land lease - - - - - - - - - - -
Pre-paid building rent - - - - - - - - - - -
Pre-paid lease interest - - - - - - - - - - -
Pre-paid insurance 628,500 565,650 502,800 439,950 377,100 314,250 251,400 188,550 125,700 62,850 -
Total Current Assets 2,123,241 5,912,595 10,328,662 14,951,863 20,599,098 27,383,860 36,799,711 47,034,331 58,156,020 70,219,733 83,152,710
Fixed assets
Land 4,500,000 4,500,000 4,500,000 4,500,000 4,500,000 4,500,000 4,500,000 4,500,000 4,500,000 4,500,000 4,500,000
Building/Infrastructure 1,197,650 1,137,768 1,077,885 1,018,003 958,120 898,238 838,355 778,473 718,590 658,708 598,825
Machinery & equipment 12,570,000 11,313,000 10,056,000 8,799,000 7,542,000 6,285,000 5,028,000 3,771,000 2,514,000 1,257,000 -
Furniture & fixtures 27,000 24,300 21,600 18,900 16,200 13,500 10,800 8,100 5,400 2,700 -
Office vehicles - - - - - - - - - - -
Office equipment 43,200 38,880 34,560 30,240 25,920 21,600 17,280 12,960 8,640 4,320 -
Total Fixed Assets 18,337,850 17,013,948 15,690,045 14,366,143 13,042,240 11,718,338 10,394,435 9,070,533 7,746,630 6,422,728 5,098,825
Intangible assets
Pre-operation costs 72,500 58,000 43,500 29,000 14,500 - - - - - -
Legal, licensing, & training costs - - - - - - - - - - -
Total Intangible Assets 72,500 58,000 43,500 29,000 14,500 - - - - - -
TOTAL ASSETS 20,533,591 22,984,542 26,062,207 29,347,005 33,655,838 39,102,197 47,194,146 56,104,863 65,902,650 76,642,461 88,251,535
Other liabilities
Lease payable - - - - - - - - - - -
Deferred tax - 669,466 1,382,700 1,382,700 1,382,700 1,382,700 1,106,160 829,620 553,080 276,540 -
Long term debt 6,075,416 5,099,884 4,017,044 2,815,092 1,480,925 - - - - - -
Total Long Term Liabilities 6,075,416 5,769,350 5,399,744 4,197,792 2,863,625 1,382,700 1,106,160 829,620 553,080 276,540 -
Shareholders' equity
Paid-up capital 14,458,175 14,458,175 14,458,175 14,458,175 14,458,175 14,458,175 14,458,175 14,458,175 14,458,175 14,458,175 14,458,175
Retained earnings - 2,373,560 5,767,499 10,203,771 15,792,455 22,661,314 30,972,587 40,128,372 50,170,221 61,152,390 73,151,231
Total Equity 14,458,175 16,831,735 20,225,675 24,661,946 30,250,630 37,119,490 45,430,762 54,586,547 64,628,396 75,610,565 87,609,407
TOTAL CAPITAL AND LIABILITIES 20,533,591 22,984,542 26,062,207 29,347,005 33,655,838 39,102,197 47,194,146 56,104,863 65,902,650 76,642,461 88,251,535
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BAL-PREF-05/November, 2004
Pre-feasibility Study Marble Processing Plant
Operating activities
Net profit - 2,373,560 3,393,939 4,436,271 5,588,684 6,868,860 8,311,273 9,155,785 10,041,849 10,982,169 11,998,842
Add: depreciation expense - 1,323,903 1,323,903 1,323,903 1,323,903 1,323,903 1,323,903 1,323,903 1,323,903 1,323,903 1,323,903
amortization expense - 14,500 14,500 14,500 14,500 14,500 - - - - -
Deferred income tax - 669,466 713,234 - - - (276,540) (276,540) (276,540) (276,540) (276,540)
Accounts receivable - (2,374,777) (187,925) (367,768) (376,316) (410,924) (448,330) (368,437) (274,628) (288,546) (305,859)
Finished good inventory - (172,954) (20,117) (21,612) (23,208) (24,911) (26,730) (14,366) (15,177) (16,043) (16,966)
Equipment inventory (19,192) (3,708) (3,776) (4,277) (4,838) (5,467) (3,845) (4,150) (4,531) (4,948) 58,733
Raw material inventory (875,549) (159,236) (159,157) (178,241) (199,381) (222,783) (148,549) (158,540) (171,477) (185,470) 2,458,383
Pre-paid building rent - - - - - - - - - - -
Pre-paid lease interest - - - - - - - - - - -
Advance insurance premium (628,500) 62,850 62,850 62,850 62,850 62,850 62,850 62,850 62,850 62,850 62,850
Accounts payable - 383,457 53,331 50,480 54,315 58,425 57,217 31,472 32,478 34,181 (113,227)
Other liabilities - - - - - - - - - - -
Cash provided by operations (1,523,241) 2,117,059 5,190,782 5,316,105 6,440,509 7,664,453 8,851,247 9,751,977 10,718,725 11,631,556 15,190,119
Financing activities
Change in long term debt 6,075,416 (975,531) (1,082,840) (1,201,952) (1,334,167) (1,480,925) - - - - -
Change in short term debt - - - - - - - - - - -
Change in export re-finance facility - - - - - - - - - - -
Add: land lease expense - - - - - - - - - - -
Land lease payment - - - - - - - - - - -
Change in lease financing - - - - - - - - - - -
Issuance of shares 14,458,175 - - - - - - - - - -
Purchase of (treasury) shares - - - - - - - - - - -
Cash provided by / (used for) financing activities20,533,591 (975,531) (1,082,840) (1,201,952) (1,334,167) (1,480,925) - - - - -
Investing activities
Capital expenditure (18,410,350) - - - - - - - - - -
Acquisitions - - - - - - - - - - -
Cash (used for) / provided by investing activities
(18,410,350) - - - - - - - - - -
NET CASH 600,000 1,141,528 4,107,942 4,114,153 5,106,342 6,183,527 8,851,247 9,751,977 10,718,725 11,631,556 15,190,119
Cash balance brought forward 600,000 1,741,528 5,849,470 9,963,623 15,069,965 21,253,492 30,104,739 39,856,716 50,575,442 62,206,998
Cash available for appropriation 600,000 1,741,528 5,849,470 9,963,623 15,069,965 21,253,492 30,104,739 39,856,716 50,575,442 62,206,998 77,397,117
Dividend - - - - - - - - - - -
Cash carried forward 600,000 1,741,528 5,849,470 9,963,623 15,069,965 21,253,492 30,104,739 39,856,716 50,575,442 62,206,998 77,397,117
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BAL-PREF-05/November, 2004
Pre-feasibility Study Marble Processing Plant
11 KEY ASSUMPTIONS
Table 13-1 Cost of Goods Sold per Unit of Production
COGS 1 Rs. 23
COGS growth rate 4%
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BAL-PREF-05/November, 2004
Pre-feasibility Study Marble Processing Plant
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BAL-PREF-05/November, 2004