FEASIBILITY REPORT

FEASIBILITY REPORT OF CEMENT PROJECT PORT LAND CEMENT

SUBMITTED TO: MR. ZIA UR - REHMAN SUBMITTED BY: SYED ABID HASSAN REG#53124

S.ABID HASSAN

Page 1

10/31/2011

FEASIBILITY REPORT

PART# 1: COST OF THE PROJECT

S.NO ITEMS 1 LAND AND LAND DEVELOPMENT 2 BUILDINGS FACTORY BUILDING OFFICE BUILDING FUEL TRUNCKROAD CONNECTION TOTAL COST(CIVIL WORK) 3 PLANTS AND MACHINERY MACHINERY INSURANCE, TRANSPORTATION, LOCAL TAXES INSTALLATION TOTAL PLAN AND MACHINERY 4 VEHICLES 5 FURNITURE AND FIXTURE 6 ADMINISTRATIVE EXPENSES 7 CONTINGENCIES 8 INTEREST DURING CONSTRUCTION 9 WORKING CAPITAL TOTAL PROJECTION AMOUNT (ALL FIG IN MILLION RUPEES) LOCAL CURRENCY FOREIGN CURRENCY 500 500

170 120 90 380

170

250 27.5 57 334.5 30 2 2.4 26 TO BE CALCULATED 3.2 1,243.70

0 20 27 57 30 2 2.4 26

250 7.5 30 277

3.2

THE AMOUNT OF CONTINGENCIES HAS BEEN PROVIDED @2.5% OF COST OF LAND & BUILDINGS, PLANTS & MACHINERY, VEHICLES AND FURNITURE.

S.ABID HASSAN

Page 2

10/31/2011

FEASIBILITY REPORT

WORKING CAPITAL
PARTICULARS INVENTORY PRODUCTION,MATERIAL, FUEL & AUXILLIARY PARTS & SUPPLIES FOR REPAIR&MAINT FINISH GOODS ACCOUNTS RECEIVABLE OTHER LIQUID ASSETS TOTAL BASIS OF COMPUTATION AMOUNT

1% ONE MONTH ONE MONTH 10 DAYS OF PRODUCTION

1 0.5 0.98 0.49 0.21 3.18

MEANS OF FINANCING: Debt-Equity will be 60:40 of total cost. The Foreign Currency loan will be obtained at 6%p.a. the local currency loan will be taken at 12%p.a. The project will be financed with foreign exchange up to 30% of the amount of the debt is to be raised for the project. The interest on local loan will be paid for 12 months and on foreign currency loan for six months. The foreign loan amount has already been converted into local currency on prevailing rate of foreign exchange. SCHEDULE OF IMPLEMENTATION: The project will be implemented over two and half year [i.e. 30 months]
ACTIVITY#

ACTIVITY

DURANTION 04 MONTHS 12 MONTHS 8 MONTHS

SEQUENCE

1 LAND AND LAND DEVELOPMENT 2 CONSTRUCTION AND CIVIL WORK 3 PROCURE OF MACHINERY ERECTION OF PLANT AND 4 MACHINERY

THIS ACTIVITY WILL START AFTER 1 AFTER 3 MONTHS OF START OF ACTIVITY 1 THIS ACTIVITY WILL START AFTER COMPLETION OF ACTIVITY 2 THIS ACTIVITY WILL START AFTER ACTIVITY 4

8 MONTHS

5 TEST, INSPECTION AND TRIAL RUN 3 MONTHS

Following information is also available:

Expenditure on land and building will mad 60%in 1st Quarter of year 1 and 40%

in the remaining period.

S.ABID HASSAN

Page 3

10/31/2011

FEASIBILITY REPORT

Expenditure on building will be made evenly over the period of construction. The total expenditure on plant and machinery and erection will be made as: (a) expenditure on procurement and receipt of machinery will be made as 40% in month 1, 40% in month 2 and 20% on receipt of machinery.(b) expenditure on erection will be made evenly over the period of erection.
Expenditure of procurement of vehicle and furniture and fixture will be made as:

20% in 2nd Quarter of Year 1. 20% of 2nd Quarter of Year 2 remaining before the commencement of commercial production. Administrative expenses will be incurred evenly over the implementation period. The amount of working capital will be provided on commencement of commercial products.

PART-2: DISTRIBUTION OF ADMINSTRATIVE COSTS, CONTENGENCIES AND INTEREST DURING CONSTRUCTION CEMENT PROJECT
Contengencies and administrative cost is to be distributed to all head except the distributable heads of accounts. Interest during construction on local currency loans will be distributed on civil works and plant and machinery and interest on foreign currency will be distributed on plant and machinery only.

S.ABID HASSAN

Page 4

10/31/2011

FEASIBILITY REPORT

PART-3: OPERATING RESULTS CEMENT PROJECT

Cement industry is minor-based industry. Its main Inputs are Limestone, Clay and Gypsum. Basic input must be available in the vicinity of the project. The methods of refining the raw mix before it charged to kiln used are: (1) Dry Process. (2) Wet Process. The Wet Process is used to wet the raw material: (i.e. Calcium Carbonate and Plastic clay. Wet process is expensive as compare to dry process.

1: OBJECTIVE:
The proposed project will have an installed capacity of 2000 tons per day. The project will use dry process, which is a cost-saving project.

2. THE ACTUAL PRODUCTION PROGRAMME:

YEAR 1 2 3 & THERE AFTER WORKING DAYS CEMENT PRODUCED 275 550,000.00 300 330 600,000.00 660,000.00

3: SELLING ACTIVITIES:
The 30% of the production will be exported. The remaining production will be consumed within the country. The cement will be made available in 50 Kg paper sacks / bags. The cement will be sold locally through the appointed dealers. At initial stage creation of its own organization is not considered appropriate. Only 10 days inventory will be maintained at the most as the holding of inventory for more than this time will reduce its strength.

S.ABID HASSAN

Page 5

10/31/2011

FEASIBILITY REPORT

4: RAW MATERIAL / INPUT:

The raw mix used to produce will consist of 58% of Limestone and 48% of Clay. The Gypsum is needed for the regulation of the setting time.
YEAR QUANTITY (TONS) LIMESTONE(58%) CLAY(41%) GYPSUM(1%) 1 2 3 & Thereafter 319000 348000 382800 231000 252000 277200 PRICE(Ton)

Lime 160/Ton Clay 50/ Ton Gyp 170/Ton

5: PACKAGING MATERIAL:
The cement will be packed in 50 Kg bag of Kraft Paper. It will cost Rs. 12 per Bag (Quotation taken from Pakistan Paper Sec Hub Chowki)
YEAR 1 2 3 & Thereafter CEMENT PRODUCED (TON) 550,000.00 600,000.00 660,000.00 NO OF BAGS 11,000,000.00 12,000,000.00 13,200,000.00

6: FUEL
Gas will be used and both electricity and gas is available in the area. Electricity will be used in offices. Total heating requirement at 100% capacity will be 13,200,000,000Kcal. (i.e. Re.0.00015 approx Rs. 1.98M)

7: STORES AND SPARES:

It will be 0.5% in 1st year, 0.75% in 2nd Year and 1% of cost of machinery in 3rd and subsequent years.

S.ABID HASSAN

Page 6

10/31/2011

FEASIBILITY REPORT

8: MAINTENANCE OF BUILDING:
It will be 0.5% in 1st year, 0.75% in 2nd Year and 1% of cost of machinery in 3rd and subsequent years. Insurance of the building will be covered from Habib Insurance @ 1% of the cost of building and machinery.

9: MAN POWER , SALARIES AND WAGES:

SR.NO PERMANENT STAFF NO AMOUNT OF SALARIES AND WAGES 35 20 25 25 225 30 200 560 6,300,000.00 7,200,000.00 4,500,000.00 10,500,000.00 27,000,000.00 3,600,000.00 24,000,000.00 83,100,000.00

1 ADMIN & GENERAL 2 ACCOUNTS 3 MARKETING 4 PRODUCTION MANAGEMENT 5 PRODUCTION 6 AUXILIARY SERVICE 7 QUARY 8 TOTAL

NOTE: Above amount include House Rent. 30 % of the strength will be provided with accommodation. A provision of 25% has to be provided for fringe benefits.

10: DEPRECIATION SCHEDULE:

S.ABID HASSAN Page 7 10/31/2011

FEASIBILITY REPORT

SR. NO

ITEMS 1 FACTORY BUILDING 2 HOUSING COLONY 3 PLANTS AND MACHINERY 4 VEHICLES 5 FURNITURE & FIXTURE

DEP RATE 5% 5% 10% 20% 15%

S.ABID HASSAN

Page 8

10/31/2011