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PRE – INVESTMENT

TECHNO – ECONOMIC

FEASIBILITY STUDY REPORT

ON

ISLAM AGROVET LIMITED

( BMRE PROPOSAL )

A – 111/1, BAZAR ROAD, SAVAR, DHAKA-1340, BANGLADESH

SUBMITTED BY :- JB. MD. JAHIRUL ISLAM

MANAGING DIRECTOR

PREPARED BY :-

ARISTOCRATE BUSINESS CONSULTANCY & SOLUTIONS

GLOBE CHAMBER, MOTIJHEEL C/A,

DHAKA – 1000

PH :- 01711-707552, 01674-999725

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TABLE OF CONTENTS

SL No. Description Page

1. Summary of the project 3 – 7

2. Project Introduction 8–10

3. Management Aspects 11–12

4. Technical Aspects 13 – 19

5. Market Analysis 20 – 31

6. Industry Analysis 32 – 33

7. SWOT Analysis 34 – 35

8. Project Benefits 36 – 37

9. Environmental Aspect 38 – 40

10. Financial Evaluation 41 – 42

11. Economic Aspect 43

Financial Analysis

12. Estimated cost of the project 45

13. Means of Finance 46

14. Working Capital Estimation 47

15. Earning Forecast 48

16. Financial Ratio 49

17. Sensitivity Analysis 50-51

18. Sales Estimation 52

19. Cost of Raw Materials 53

20. Cost of Goods Sold 54

21. Manpower 55

22. Depreciation 56

23 Assumptions 57

24 Administrative Staff 58

25. General , Administrative & Selling expenses 59

26. Financial Expenses on HPSM Investment 60

27. Financial Expenses on Working Capital 61

28. Total Financial Expenses 62

29. Break – Even Analysis 63

30. Projected Fund Flow Statement 64

31. Debt-Service Coverage Ratio 65

32. Interest Service Coverage Ratio 66

33. Cash Flow Statement 67

34. Projected Balance Sheet 68

35. Payback Period 69

36. Net Present Value (NPV) 70

37. Internal Rate of Return (IRR) 71

38. Benefit Cost Ratio (BCR) 72

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SUMMARY OF THE PROJECT

01.

Name of the project

:

ISLAM AGROVET LIMITED.

( A Sister concern of Jahir Group ).

02.

Location of the project

:

A-111/1, Savar Bazar Road, Savar, Dhaka-1340,

Bangladesh.

03.

Head Office

:

Evergreen Labongo (1

st

Floor), House # 15, Road # 04,

Sector # 04, Uttara, Dhaka-1230, Bangladesh.

Phone : + 88 02 8933196, 8933215, 7912953

E-mail : modinajahir@yahoo.com

04.

Corporate Structure

:

Private Limited Company.

Authorized Capital : Tk. 100.00 million.

Paid Up Capital : Tk. 10.00 million.

05.

Name of the Key Person

:

Jb. Md. Jahirul Islam.

Managing Director

06.

The Project

:

This is an existing composite agro based poultry,

cattle and fish feed producing mill located at Savar

Bazar Road, Savar, Dhaka-1340, Bangladesh under

the name and style of Islam Agrovet Limited (A

sister concern of Jahir Group) with the production

capacity of 8 MT/hour (Pellet & Mash Feed). The

company also hired a Feed Mill ( toll production

basis) named Oryza Agro Industries Limited,

situated at Gujikha, Gowripur, Mymensingh with a

production capacity of 10 MT/hour (Floating &

Sinking Fish Feed). The promoters would like to

expand their production capacity with the increased

production of 20 MT / hour to fulfill the huge demand

in the market. So they are planning to set up a new

unit by importing machinery from abroad. It is

needed to get long term and working capital financing

for this BMRE purpose. The BMRE cost of the

project has been estimated at Tk. 113.88 Crore.

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07.

Product mix & capacity

:

The existing project already producing different types

of agro products, such as poultry feed, cattle feed and

fish feed with 8 MT / hour at their existing factory and

10 MT / hour in their rented premises. They are going

to expand their business by producing more 20 MT /

hour as their BMRE investment plan. The annual

production capacity for both existing and BMRE

based on two shifts operation per day and the project

follows 300 working days in a year.

08.

Implementation Plan

:

The BMRE Proposal has been designed to be

implemented with financial assistance from

Commercial Bank and equity capital of the sponsors.

09.

Investment proposal

:

Sanction of HPSM Investment of Tk. 30.00 Crore and

Tk. 120.00 crore with 100% funded TR facility under

UPAS L/C / Bills/MPI/Bai Murabaha TR Mode

favoring M/s. Madina Trading Corporation and its

allied concern Islam Agrovet Limited.

10.

Machinery to be imported

:

The project will import brand new animal feed

producing machinery from abroad for BMRE

Purpose. The price of the imported machinery stands

at Tk. 30.00 Crore.

11.

Technical services and

quality control

:

The technologies involved in manufacture of agro

based products such as poultry feed, fish feed, dairy

feed are available in the country. A number of such

units have been in operation with usual as well as

advanced machinery and equipment for the last few

years. As such, skilled manpower has already been

developed in this sector. It is, therefore, expected that

no problem will be faced by the project regarding

smooth operation as well as proper quality control.

12.

Increasing awareness

and better farming

practices

:

The demand for poultry and fish feed has risen on

account of increasing awareness about the use of cost

effective and nutritious rich compound.

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13.

Erection and installation

:

The BMRE Machinery will be installed,

commissioned & taken into operation under direct

supervision of the erectors to be deputed by the

respective supplier. An amount of Tk. 13.00 lac has

been earmarked for the purpose of civil, mechanical

and electrical works for erection of the same.

14.

Employment generation

:

The BMRE project after implementation will create job

opportunities for 195 personnel of various categories.

15.

NPV & BCR

:

NPV @ 15% Tk. 28.02 Crore and BCR is 1.24.

16.

Contribution to GDP

:

The project will contribute Tk. 46.29 crore per annum

to the GDP.

17.

Debt service coverage

ratio (DSCR)

:

The debt-service coverage ratio of the project works

out to 2.08, 2.17 & 2.27 times during the first three

years of projected operation of the project.

18.

Break-even point (BEP)

:

The project is expected to break-even at 90% of the

rated capacity and 36% of the proposed capacity

utilization with sales volume of Tk. 107.99 crore.

19.

Financial rate of return

(FRR)

:

The project promises a financial rate of return about

26% if it is completed on schedule.

20.

Cash/fund flow statement

:

The cash flow statement based on the profitability

estimate is shown in financial aspect. The projection

indicates that the concern will have adequate cash

generation to meet all the operational expenses, pay for

its investment-obligation and a reasonable surplus to

pay dividend, etc.

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21.

Projected balance sheet

:

The projected balance sheet of the company is shown

in financial aspect. The concern is expected to maintain

a healthy financial position during the operational life.

22.

Sensitivity analysis

:

The critical variables to which the financial viability

of the project is sensitive have been identified to be

cost of production and price of output. Necessary

sensitivity has been made and the project withstands

the tests.

23.

Conclusion

:

The BMRE project proposal is found technically

feasible, socially and economically desirable,

financially rewarding and commercially viable. The

project proposal may, therefore, be considered suitable

for funding & investment.

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24. Profitability & Result of Financial Analysis :

The year – wise operating profit of the project on completion and the results of

financial analysis are shown as follows :

Tk. In ‘000

1

st

Yr 2

nd

Yr 3

rd

Yr 4

th

Yr 5

th

Yr

Net Profit 157304 172277 188190 204810 220746

25. Profit Margin

1

st

Year

2

nd

Year

3

rd

Year

4

th

Year

5

th

Year

Gross profit to sales

15.81%

15.75%

15.71%

15.87%

15.99%

Operating Profit to sales

14.84%

14.79%

14.76%

14.91%

15.02%

Net Profit to sales

6.73%

6.94%

7.16%

7.54%

7.88%

26. Assumption :

a ) Mark – Up : 10% on HPSM Investment and 10% on

Working Capital (TR facility under UPAS

LC/Bills/MPI/Bai Murabaha TR Mode)

b ) Repayment period of loan : 8 Years excluding grace period.

c ) Grace period : 18 months.

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PROJECT INTRODUCTION

Poultry feed, Fish feed and Cattle feed have a great demand in the local market

because of the increasing production in milk through milch cattle and increased

production and consumption of eggs through poults. With increased costs of

transportation, local sales of feeds have an added advantage. Cattle rearers are

increasingly becoming aware that scientifically produced and nutritionally balanced

cattle feed will give better yields in terms of milk and milk products even though the

cost may be marginally higher than the traditional feeds of grass and hay. Similarly

poults that are fed a scientifically manufactured diet are less likely to contract diseases

of different viruses and bacteria. The quality and quantity of eggs is also increased

considerably. Fish rearers are also aware that scientifically produced and nutritionally

balanced fish feed will give better yields.

Islam Agrovet Limited. is a private limited company established in 2015 intends to

manufacture Poultry, Cattle and Fish feed. The production capacity of the company is

8 MT/hour (Pellet & Mash Feed). The company also hired a Feed Mill ( toll

production basis) named Oryza Agro Industries Limited, situated at Gujikha,

Gowripur, Mymensingh with a production capacity of 10 MT/hour (Floating &

Sinking Fish Feed).

The composition of fish/cattle/poultry feed can be varied depending on the availability

of various raw materials. Balanced feed is essential for proper growth of cattle and

chicks and consequently to increase the output of milk, broiler/eggs. The per capita

consumption of milk and poultry products is very low in the north eastern region and

there is great need to increase the production. Development of dairy and poultry farms

is receiving increasing attention considering the nutritional requirements of the

population as well as large employment opportunities generated by these activities.

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Keeping in mind, the promoters of the project who are well versed in technology and

aware of the feed market, having almost all the affinities and avenue, decided to set up

such industry under the name and style as mentioned above. It is worth mentioning

that the maximum raw materials for the purpose are available here in Bangladesh, a

blessed with expected technology and manpower. So, it can be concluded that the pre-

assessed and explored market, efficient management, expected technical hands and

easy available raw materials shall make the project a viable one and shall be able to

earn foreign exchequer for the country.

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. 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.

The project already created a huge place in the local market. With this point of view

the sponsors are very much interested to expand their existing business.

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Methodology

1. Basic data would be analyzed at the very beginning of the Project.

2. The next step is to analyzing different technical aspects of a poultry, cattle and fish

feed mill Industry.

3. To analyze the market demand and prospect of such product.

4. Next step is to financial appraisal. In this step financial feasibility study of the

project will be accomplished. In this step Fixed Cost of the Business, Working

Capital Assessment, 5 years Forecasted Earning Forecast, Sales Revenue,

Forecasted Cash Flow, Forecasted Balance Sheet, Net Present Value (NPV),

Internal Rate of Return (IRR), Benefit Cost Ratio (BCR), Pay Back Period (PBP)

will be determined.

5. Final step is to assess the socio-economic and environmental implications of the

project.

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MANAGEMENT ASPECTS

Introduction

The BMRE feasibility study scheme has been made covering organizational, technical,

economic and financial aspects. The BMRE investment amount has been estimated at Tk.

113.88 Crore excluding working capital. Based on Financial Assistance from Bank and

sponsor’s equity, the viability tests as worked out in this feasibility report based on some

standard and acceptable parameters.

Equity mobilization

The sponsors are expected to be capable of mobilizing their part of equity required to be

invested in the project, which will be available from earnings of business concerns and past

savings.

Corporate Set-Up, Promoters and their background

The project is a Private Limited Company in the name & style of Islam Agrovet Limited.

The project is being promoted by a group of 3 (Three) persons. They are well educated as

well as have many years experience in in this line of business. Considering their

educational background and business experience, it is expected that they will be able to

implement the Project scheme satisfactorily & operate smoothly. The particulars of the

Board of Directors with position and extend of shareholding are as under:

Sl.

Name of The Directors

Status

Share

1.

Mrs. Sheuli Islam

Chairman

30%

2.

Jb. Md. Jahirul Islam

Managing Director

60%

3.

Zinat Zahan Sumaia

Shareholder

10%

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Legal structure of the proposed company :

The overall management during implementation and on completion of the project will be

vested with the Managing Director. He will assume overall responsibilities of running the

day to day operation and administration of the company with sufficient executive and

financial power. The Board of Directors of the project at the moment acquired sufficient

knowledge and skills in this line of business. He will be assisted by the expert Engineers

and technical personnel.

ORGANOGRAM

Project Manager

Chief Accountant

General Manager

Engineer

Labor

Accounts Dept.

Marketing

Helper

Shareholder

Managing Director

Chairman

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TECHNICAL ASPECTS

Purpose and design

The BMRE scheme has been designed on the basis of modern machinery and also locally

available raw materials. On completion of the expansion plan, it will generate employment

opportunity for 195 personnel in different level of job.

The BMRE cost of the project has been estimated at Tk. 113.88 crore. Details of fixed cost

have been shown in financial aspect.

Project Land & Location :

The project is located at Savar Bazar Road, Savar, Dhaka, Bangladesh. The market

value of the existing land has been estimated at Tk. 24.85 crore. The company also

planning to purchase new land of 760.78 decimal to expand their production capacity of

the business by installing new machinery. The BMRE Land cost has been estimated at Tk.

45.64 crore. All infrastructural facilities like power, communication, labor etc are

available at & around the project site. The site offers excellent opportunities in terms of

animal feed mill project. Thus the land is considered to be suitable and adequate to house

all facilities and establishment of this scheme.

Factory shed & other Civil Works :

The farm already constructed their factory building in the project land where the

production capacity is 8 MT/ hour. The existing factory construction cost has been

estimated at Tk. 1.36 crore. The firm also hired a feed mill at Gowripur, Mymensingh

where the production capacity is 10 MT/ hour. The farm will construct the extended part

of the factory building for BMRE purpose for accommodation of machinery room, raw

materials and finished goods room, firm’s office, guard room, internal road, boundary wall

etc. The BMRE cost of civil work construction has been estimated at Tk. 1.92 crore.

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Machinery and Equipment

The existing machinery of the project has been valued at Tk. 5.96 crore. The project will

require capital machinery for their expansion plan. For implementation of the BMRE

scheme, the project will require the high quality modern Machinery. The BMRE

machinery cost has been estimated at Tk. 30.00 Crore.

Performance, Technical suitability and Price reasonability of the proposed machineries

will be the first priority. The supplier of machineries will also assist for erection &

installation of plant and machinery. The detail list of existing and BMRE machinery and

their respective price is enclosed in price quotation.

Manufacturing/production process

The products under consideration are mainly related with the following prime

manufacturing procedures:

 Poultry feed manufacturing process;

 Fish Feed manufacturing process;

 Cattle Feed manufacturing process

The process of manufacture of poultry, cattle and fish feed is very simple and consists of

blending of the various ingredients. The selected ingredients are passed through a mixer if

it is in the right size else sent to disintegrator or pulveriser to reduce the size of the

particles to the required mesh size before sending it to mixer. The different powdered raw

materials are taken by night in a ribbon blended for uniform mixing. The vitamins,

minerals, mixer and other ingredients are added at this stage and when uniformly mixed, it

is packed chilling foil in various size of packet like 1 kg, 10 kg and 25 kg as per

customer’s demand. Liquid feed are also prepared in the same fashion in separate kind of

mixers.

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Animal feed manufacturing process

The technology involved in producing feed in this project is called "pre-grinding

procedure". The feed milling unit of the project will be operated by computerized

operation system with auto monitoring.

The main ingredient will be loaded into an intake pit. The ingredient will then go to the

bottom of the bucket elevator by the chain conveyer through grain cleaner, dust collector

etc. By the bucket elevator the grain will finally be stored into the silos. Then it will be

discharged to hammer mill for grinding and then carried to the bottom of another bucket

elevator. This bucket elevator will then carry the material to the storage bins.

The other ingredients will be dumped into the intake hopper, which will be passed by

chain conveyor to hammer mill. After grinding, the materials will be passed by chain

conveyor through dust collectors, fans, etc to bucket elevator, for storage to storage bins.

Other micro ingredients (vitamin, mineral etc) will be mixed in a pre-mix mixer. It will

then be stored in pre-mix storage bins. The stored ingredients will be moved to the

mixture machine. After mixing, all the ingredients will be discharged to the pellet mill. A

separate steam generation unit will supply steam at to the pellet mill.

After pelleting the product will be transferred to product bin. Then automatic weighing

and bagging will be done. Bags will then be stitched and carried to the finished goods

warehouses.

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Process flow chart : animal feed

Intake pit/hopper

Silo

Hammer mill

Storage bins

Mixer

Pre-mix storage bin

Steam

Pellet mill

Boiler

Fish feed

Dairy/cattle feed

Poultry feed

Product bin

Weighing & bagging

Warehouse

Market

LPG Storage Tank • Decanting Pumps & Transfer pumps • LPG Compressor • Pipes with structural steel support • Ball Valve • Decanting House • Cylinder Valve Testing Unit • Purging Gun •Fire fighting system • Water sprinkler systems LPG Storage Tank • Decanting Pumps & Transfer pumps • LPG Compressor • Pipes with structural steel support • Ball Valve • Decanting House • Cylinder Valve Testing Unit • Purging Gun •Fire fighting system • Water sprinkler systems LPG Storage Tank • Decanting Pumps & Transfer pumps • LPG Compressor • Pipes with structural steel support • Ball Valve • Decanting House • Cylinder Valve Testing Unit • Purging Gun •Fire fighting system • Water sprinkler systems LPG Storage Tank • Decanting Pumps & Transfer pumps • LPG Compressor • Pipes with structural steel support • Ball Valve • Decanting House • Cylinder Valve Testing Unit • Purging Gun •Fire fighting system • Water sprinkler systems LPG Storage Tank • Decanting Pumps & Transfer pumps • LPG Compressor • Pipes with structural steel support • Ball Valve • Decanting House • Cylinder Valve Testing Unit • Purging Gun •Fire fighting system • Water sprinkler systems

Feeds and feedings

Animals will be given standard diet to support minimum daily growth rate of at least 0.8

kg. Diet will be composed of 70% roughage and 30% concentrate. Roughage will be of

either urea treated straw (UTS) or urea molasses mixed straw (UMS) with or without green

grass. They will receive their feed twice daily, once in the morning and in the evening.

Fresh clean drinking water will always be provided for the animals.

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Preparation of concentrate feed mixture:

Composition of concentrate feed mixture will be prepared considering season of the year,

price and their nutrient content. However, a possible combination is as follows:

Ingredient

Percent

Grain (maize, rice, wheat)

50-55

Bran (rice meal feed, wheat bran)

20-30

Oil cake (sesame, mustard, coconut, soyabean)

25-30

Full Fat Soya

4-8

By-pass protein meal

3-7

Salt

0.5-1

Mineral mix

0.25-.5

Technical services and quality control

The technologies involved in manufacture of agro based products such as poultry feed, fish

feed, dairy/cattle feed, etc are available in the country. A number of such units have been in

operation with usual as well as advanced machinery and equipment for the last few years.

Since the technologies are familiar, relevant skilled & semi skilled manpower has already

been developed. Thus, necessary qualified & competent technical personnel and production

workers to the relevant posts of the project can be recruited locally during implementation

and operation of the project.

Moreover, for smooth operation of the machinery & equipment of the project and proper

control of quality of the products to be made, the suppliers of the machinery and equipment

will be responsible to arrange training of the technical personnel/experts recruited by the

sponsors within the scope of supply contracts during the installation and commissioning of

the plant.

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It is, therefore, expected that no problem will be faced by the project regarding smooth

operation of machinery and proper quality control of products. Besides, the project will

have its own quality control equipment.

Erection, installation and commission

The machinery and equipment will be installed, commissioned and taken into operation

under direct supervision of the erectors to be deputed by respective supplier. Project’s

technicians and experts will assist them. In order to realize smooth construction of the

plant, the supplier will send its skilled and competent technical personnel to the plant site

during implementation of the project.

UTILITIES

Electricity

The project will require a connected load of 250 KW and the maximum demand during

full swing operation has been worked out at 150 KW. The required power will be made

available from the connection of REB.

Water :

The daily requirement of water for the project will be met up by the shallow tube – well to

be sunk at the project site.

Safety Arrangement :

Adequate safety arrangements to meet the fire hazards and first hand medical aid box to be

purchased to mitigate any sort of accident of the employee. For this purpose , necessary

provisions for fire-fighting equipment’s has been incorporated in the list of local

machinery.

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Pollution control and waste disposal

The project will not generate any wastes, which may harmful. Thus, the project will not

create any threat towards environment pollution.

Moreover, if necessary, the promoters will arrange for an Environmental Impact

Assessment (EIA) Study to be carried out by a competent consultant and would obtain

necessary clearance from the Department of Environment and Pollution Control before

starting operation.

Quality Control :

Quality of the products is a main thing for marketing in the present competitive world

market. A number of quality control equipment’s and tools have been included in the

project for maintaining proper quality of production.

Repair & Maintenance :

Repair & Maintenance cost will be 0.5% for the building in every year . On the other

hand, for machinery it will be 0.5% , 1% , 1.5% of the machinery cost for the year of 1

st

,

2

nd

, 3

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and subsequent year of operation.

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MARKET ANALYSIS

Introduction

The growth of poultry, fish and cattle industry during the last few years is one of the

remarkable successes stories of Bangladesh. New technologies have been introduced, and

production has shot up in day old chick, broiler, egg, fish and cattle sectors.

The feed mill industry has a wide choice of utilizing various cereals, millets, agricultural

wastes, oilseed meals, various fish/silkworm meal and other available local material to

evolve formulations to meet the nutritional standards. The genetic potential for milk

production of the crossbreed cows and buffaloes can be fully exploited by providing

nutritious and palatable green fodder throughout the year. On an average, about 35-40 kg

of green fodder is required per day per adult animal. If the indigenous breeds are fed

adequately with the supplement of concentrated feed, their milk yield can be increased by

30%. On an average, even 10% improvement in feeding efficiency can increase the milk

output by 25% . In the case of poultry, about 2.1 kg of poultry feed is required to produce

1 kg of live weight broiler. Due to feed efficiency, a broiler takes 7-9 weeks to attain 1.8

kg weight.

The raw materials are available readily. The feed consists of three major group of

substances : carbohydrates, oils and proteins together with smaller amounts of minerals

and vitamins. The need for animal/poultry/fish feed has gone up substantially. There is a

good potential to set up a large scale feed production units to meet the local demand.

The products of the animal feed milling unit of the project will be poultry feed, fish feed and

dairy/cattle feed. These will be produced regularly as per capacity of the concerned machines

and equipments.

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Usages of the products/services

The demand for animal protein by the people of the country is mainly met by the fish and

poultry reared by the poultry/fish farms of the country. Now-a-days, the supply of fishes

from natural sources e.g., river, canals, moors is almost exhausted. In order to feed the

birds and fishes of poultry and fish farms feed meal is very much necessary. The success of

the poultry and fish farming sector primarily dependents on the feed industry. Good quality

feed is the most important input which influences greatly the profitability of the farms. It is

gathered that the market for poultry and fish products are increasing at a rapid rate of 15%

per annum. The demand for quality feed as a derived demand has been increasing at a

faster rate and it is regarded as the single most important factor determining the very

existence of the sub-sector.

Users

Feeds are required by the fish/Poultry/cattle farming industries. There are many fish/

Poultry farming projects in Bangladesh, which are the prospective institutional buyers of

the product to be produced by the proposed project. The fish/Poultry/cattle farming

industries are scattered throughout the country. As such, the users of feed are the public and

private sector fish/Poultry/cattle farming industries of the country. It has been gathered that

private sector fish/Poultry farming industries in number are much higher than the public

sector fish/ Poultry farming units. It is, therefore, identified that the private sector fish/

Poultry/cattle farming industries are the main users of fish feed to be produced by the

proposed project.

Target market:

Following are the target markets for the products :

-

Local markets.

-

Nearby cities/towns.

-

Other domestic markets.

-

Re-seller/wholesale markets.

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Feed Mills

Islam Agrovet Limited produces poultry feed, fish feed and cattle feed in its modern

mills and distributes them all over the country through its own distribution network.

Poultry Feed

With the rapid expansion of poultry related activities in the country, the necessity of

modern feed mills for commercial production balanced disease-free poultry feed was

strongly felt. To meet the demand for poultry feed, Islam Agrovet Limited has started

production in 2015 with an initial capacity of 8 Metric tons per hour with international

standard. Due to continuous increasing demand the company had commissioned feed mills

one after another and with its recent expansion the capacity now stands at 18,720 MT per

month.

High quality ingredients are used to produce feeds and the microelements are imported

directly from world- reputed manufactures to ensure quality. All ingredients and elements

are also tested in the firm’s quality control laboratory having sophisticated equipment.

The quality of each batch of feed is controlled and ensured. Apart from that regular trails

are also conducted in its own R&D farm to evaluate the performance of the product.

Fish Feed

Quality feed play a vital role for success of fish production and taking this into

consideration the firm have created facilities for producing quality fish feed side by side

with poultry feed. To meet the growing demand of quality fish feed our firm

commissioned a dedicated specialized fish feed mill for producing Sinking Fish Feed.

Cattle feed

Shortage of grazing land is the major problem for cattle feeding in Bangladesh. Successful

cattle production in Bangladesh will depend on compound feed in the coming future.

Providing a well balanced ratio at a reasonable price is increasingly complex due to

higher price of raw materials. Considering this factors Islam Agrovet Limited has started

production and marketing of cattle feed.

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Demand situation and demand forecasting:

The ideas for establishing the concerned project virtually sprang from the existing huge

demand for the products compared to the existing supplies. Inter-alias, it was also assumed

that, under the existing limitations/inhibitions, with the process of time, demand will further

outstrip the supplies. This situation might further aggravate if electricity supply can not cope

with the ever increasing need for the same. However, this will be evidenced from the

following facts and figures pertaining to existing demand and demand forecast.

Supply Situation and Supply Forecasting:

In the face of above existing demand and demand forecasting of the concerned products, the

supply is not increasing in equal momentum. Supply is increasing, but at a decreasing rate,

resulting which, with the passage of time, there will be a pressing need for increasing

production and supply of the concerned goods. However, this will be evidenced from the

following facts and figures pertaining to existing supply and supply forecast.

Demand Supply Gap:

From Demand and supply discussed above, the following inferences may be drawn:

-

Presently, there is a big gap between demand for the concerned products and supply of

them, and demand has outstripped the supply in big scale;

-

If compared to vast demand, production, vis-à-vis supply does not increase more than

proportionately, then, in near future the situation will aggravate further.

-

As a result, it is recommended, more and more entrepreneurs should be factually,

effectively and realistically encouraged to establish and operate more and more similar

type of industries/enterprise.

Competition & Competitors:

The terms ‘Competition’ and ‘Competitors’ are not very easy to understand and clarity.

These two not only depend on the numbers, but also depend on the quality of the products.

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Moreover, it is not always that demand creates supply, but many of the times, supply also

creates demand. However, in the concerned case, both are equally applicable.

Particularly, in absolute term, and in the present supply status of the concerned goods, there is

still no keen competition and numerous competitors. So, the scope for production and sale of

the concerned products are enormous. In this case. However, we have one absolute

advantage, which is that, we will produce and supply quality products in sizeable quantity.

That too, with unhindered supply through out the year. This will give us an advantage to

capture assumed markers and clients. In this situation, we need not to bother about

competition and competitors.

Pricing:

In Bangladesh markets, until and unless there is a strong seller syndicate, there are little

number of goods, supply of which dominates market price. We do not, and need not to be a

market leader or price market, rather it is enough that we remain to be a price taker. That is

enough for us. The prevailing market prices of our products are well accepted to us to make

normal profit, and that will be enough for us to well establish and promote our business,

Distribution Channel:

In order to facilitate sale of the proposed products of the project, the following sales channels

have been considered to be introduces simultaneously:

As shown above, the sponsors will have own sales channel and sell the product to the end-

users being one option. The second option would be to sell the product to the wholesalers and

Project Site

Own Sales Channel

Retailers/Consumers

Project Site

Own Sales Channel

Retailers/Consumers

Project Site

Own Sales Channel

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sell them to retailers and ultimate consumers. Primarily, the provision will be kept to sell the

products directly to the retailers and end-users from the project site.

Demand situation and demand forecasting:

Methodology of Demand Analysis:

The demand for feed is being met by local production and import. As such, it would have

been better to estimate the demand on the basis of apparent consumption, which is

represented by as C= L + (M-X) + S,

Where,

C= Domestic consumption

L= Local production

M= Import

X= Export

S= Stocks.

But, apparent consumption method could not be applied since availability of time series

data relating to local production could not be made available from any dependable source.

As per the research magazine “KHAMAR”, a monthly on fish and poultry, at present, there

are about 32 units having 9,00,000 tons of fish/poultry feed production capacity exists in

the country. In this vein, current annual local production of feed may be assumed to be

8,10,000 tons (9,00,000 x 0.9). For the sake of simplicity it may assume that import of

poultry/fish feed was 5000 tons in a year to the maximum. Based on the above facts and

aforesaid assumptions, the current demand for poultry/fish feed in the country is estimated

at 8,15,000 tons (8,10,000+5000).

Demand forecasting:

Due to gradual depletion of availability of fish from natural source dependence on poultry

and fishes reared up/cultivated by fish/poultry farms for animal protein has tremendously

increased. It is gathered that the market for poultry and fish products are increasing at a

rapid rate of 15 per cent per annum. The demand for feed since a derived demand has been

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increasing at a faster rate because feed is regarded as the single most important factor

determining the very existence of the sub-sector. As such, it may not be unwise to assume

that the demand for poultry/fish feed will also increase at the same rated. However, to be

on the conservative side it is assumed that demand for poultry/fish feed will increase 10

percent per annum.

Based on this, the demand for cattle/fish/poultry feed is projected in Table-I.

Table-I

Projected Demand for feed

(Estimated Demand MT)

YEAR

Feed required ( in. M. ton)

2015-16

896500

2016-17

978000

2017-18

1059500

2018-19

1141000

2019-20

1222500

Supply situation/supply forecasting:

The availability of nutritionally balanced and quality feed in the country is not very

satisfactory. Even the organized/registered farms can not often supply quality-balanced

feed. Most of the farm owners prepare the feed for their firms by collecting different

ingredients from various sources and mix them after grinding the ingredients manually. In

this process it is very difficult to maintain the required proportion of ingredients to ensure

quality, nutritional level, etc, as well as detoxification, minimization/removal of moulds

and harmful micro-organism. The farmers are shifting their preference to the industrial feed

in view of high feed conversion ratio (FCR), as the feed millers are expected to appoint

professionals and produce quality feed.

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Demand supply gap:

The gap between demand for and supply of poultry/fish feed is estimated below in Table-II.

Table-II

Estimated Supply gap

(In MT)

Year

Estimated demand

Existing supply

Supply gap

2015-16

8,96,500

8,15,000

81,500

2016-17

9,78,000

8,15,000

1,63,000

2017-18

10,59,500

8,15,000

2,44,500

2018-19

11,41,000

8,15,000

3,26,000

2019-20

12,22,500

8,15,000

4,07,500

List of Existing Feeds Mill and Production Capacity

Current production

( Ton/hour)

Sl.

No.

Name & address of

the organization

Plant

location

Mash

Pellet

Total

Total annual

production

(Ton)

Remarks

1

2

3

4

5

6

7

8

1.

Saudi Bangla Fish

Feed Ltd, 235 Outer

Circular Road,

Moghbazar, Dhaka

Kathali,

Bhaluka,

Mymensingh

0

3.00

14,000

Produces pelleted

feeds mainly for

fish, shirmp and

also for broilers

(25%).

2.

Aftab Bahumukhi

Farm Ltd., Islam

Chamber, 125/A,

(6

th

floor), Motijheel

C/A., Dhaka.

Bhagalpur,

Koliarcha,

Kishorgonj

1.00

14.00

15.00

90,000

Produces feeds

mainly for poultry

and dairy.

3.

Paragon poultry Ltd

5, Mohakhali, Dhaka.

Baniarchala,

Bhabanipur,

Gazipur

1.00

14.00

15.00

90,000

Produces feeds

for poultry.

4.

Quality Feeds Ltd,

House 15, Road 8,

Sector-3, Uttara,

Dhaka-1230.

Sirichala,

Bager Bazar,

Gazipur.

2.00

10.00

12.00

80,000

Process feeds for

poultry.

5.

Usha Feeds Ltd.

Amin Court (1

st

floor), 62-63,

Motijheel , Dhaka

Gazirchat,

Savar,

Dhaka.

3.00

6.00

9.00

60,000

Process feeds for

poultry.

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Current production

( Ton/hour)

Sl.

No.

Name & address of

the organization

Plant

location

Mash

Pellet

Total

Total annual

production

(Ton)

Remarks

1

2

3

4

5

6

7

8

6.

BRAC

Mohakhali, Dhaka.

Zainabazar,

Sreepur,

Gazipur.

2.50

8.00

10.50

45,000

Process feeds for

poultry.

7.

Agro Industrial Trust

(AIT) 445,Greenway

Bara Magh Bazar,

Dhaka.

Safipur,

Gazipur.

-

6.00

18,000

Produces feeds

mainly for poultry

and also for fish.

8.

Niribili Fish Feed

Mills Ltd./, Hotel

Niribili, Shaheed

Sarani, Cox's Bazar.

BSCIC I/E.,

Zilonga,

Cox's Bazar.

-

6,000

Produces feeds

for fish and

shrimp.

9.

Phenix Poultry Ltd.

Nurzahan Sharif

Plaza, 34, Purana

Paltan (3

rd

floor)

Dhaka.

Konapara,

demra,

Dhaka.

-

5.00

19,200

Process feeds for

poultry.

10.

Kazi Farms Limited

7, Satmasjid Road

(3

rd

floor)

Dhamnondi, Dhaka.

Mowna,

Sreepur,

Gazipur.

-

5.00

21,200

Process feeds for

poultry.

11.

M.M. Agha Limited

177 Khatungonj,

Chittagong

Khatugonj,

Chittagong.

-

5.00

24,600

Process feeds for

poultry.

12.

Denm Poultry

Complex Ptd. Ltd.

House -8, Lane-5,

Road-3, Block-K,

Halishahar Housing

Estate, Double

Mooring, Ctg.

North

Fatehabad,

Najirhat,

Hathazari,

Ctg.

3.00

0

3.00

7,200

Planning for a

pellet mill.

13.

BRAC-Renata Agro

Industries Ltd.

Seedstore

Bazar,

Bhulaka,

Mymensingh.

3.00

0

3.00

3,600

Own

consumption.

14.

BRAC feed mill

a. Manikgonj

a. Zigir,

Manikgonj,

2.00

8.00

10.00

16,000

Customer service

b.

Shealdanga,

Nilphamary

2.00

0

2.00

7,200

Customer service.

15.

United Food

Complex, 16

Dilkusha (2

nd

floor)

Dhaka.

Ganakbari,

Savar,

Dhaka.

1.00

0

1.00

1,800

Own

consumption.

a) Nabinagar

(Dhaka

1.50

0

1.50

1,080

Own

consumption.

16.

Proshika

1/1Ga, Sec-2,

Mirpur, Dhaka-1216.

b) Satkhania

(Ctg)

1.50

0

1.50

1,080

Own

consumption.

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Current production

( Ton/hour)

Sl.

No.

Name & address of

the organization

Plant

location

Mash

Pellet

Total

Total annual

production

(Ton)

Remarks

1

2

3

4

5

6

7

8

c) Rangpur

1.50

0

1.50

1,080

Own

consumption.

d) Fultala

(Khulna)

1.00

0

1.00

720

Own

consumption.

17.

Government - owned

Feed Mill

a.

Central Poultry Farm,

Mirpur, Dhaka.

Mirpur,

Dhaka.

1.00

0

1.00

2.160

Own

Consumption.

b.

Jessore Poultry Farm

0.50

0

0.50

180

Own

Consumption.

c.

Chittagong Poultry

Farm

1.00

0

1.00

360

Own

Consumption.

d.

Rangpur Poultry

Farm

0.50

0

0.50

180

Own

Consumption.

e.

Farmgate, Dhaka-

1215.

Ganakbari,

Savar,

Dhaka.

1.00

0

1.00

1,800

Own

Consumption.

f.

Sheikh

Fazilatunnessa

Women's Training

Inst.

Jiranibazar,

Gazipur.

1.00

0

1.00

360

Own

Consumption.

18.

Krishipannya Feeds

Ltd, House-47, Isha

Khan Avenue

Sector-6, Uttara,

Dhaka.

Shafipur,

Gazipur.

-

10.00

15,000

Customer service.

19.

Savar Co-operative

Poultry Feed, Bazar

Bus Stand, Savar,

Dhaka.

Bazar Bus

Stand, Savar,

Dhaka.

3.00

0.

3.00

6,000

Customer service

20.

Sharna Poultry Feed

Dighir Chala,

Chandana, Gazipur.

Dighir Chala,

Chandana,

Gazipur.

1.00

0

1.00

3,000

Own

Consumption.

21.

Euro-Bangla Poultry

Ltd, House 11, Road

21, Bolock-B,

Upashahar, Sylhet

Khadimnagar

Road, Sylhet

0

5.00

19,200

Own

Consumption.

22.

Ferdous Poultry

Farm

Rajendrapur,

Gazipur.

1.00

0

1.00

720

Own

consumption.

23.

Chowdhury Chicks

& Feed

Fouzderhat,

Ctg.

1.00

0

1.00

1,800

Customer service.

24.

Pocha Poultry feed

-

0

30,000

Customer service.

25.

Ismail Poultry Feed

-

0

18,000

Customer service.

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Current production

( Ton/hour)

Sl.

No.

Name & address of

the organization

Plant

location

Mash

Pellet

Total

Total annual

production

(Ton)

Remarks

1

2

3

4

5

6

7

8

26.

Mondol Feed

0

24,000

Customer service.

27.

Mandibagh Poultry

Feed

Mandibagh,

Sylhet

1.00

0

1.00

300

Own consumption

28

Salim Balanced Feed

Court Station

Road,

Rajshahi,

0.60

0

0.60

220

Own consumption

29

Nishindara Feed

Bogra

1.00

0

1.00

350

Customer service.

30.

United Feed Ltd.

Meghnaghat

Meghnaghat,

N-Gonj.

-

20.0

20.00

96000

Customer service.

30.

Nawrish Poultry

Feed Ltd.

Gazipur.

Gazipur

-

10.0

10.00

48000

Customer service.

31.

CP Bangladesh Ltd.,

Gazipur.

Gazipur

3.00

0

3.00

14000

Customer service.

32.

Jessore Feed Mills

Ltd.

N/A

-

30,000

Total :

900,000

Retaining and developing existing customers

The implementation of our marketing strategy should be a continuous process of creating a

plan to satisfy customers. This involves testing it and learning from it by recognizing what

is right and doing more of it, or changing what is wrong as soon as we realize it isn’t

working.

 Retaining and developing more sales from existing customers should be the first

priority, because this strategy has distinct advantages.

 Once company has achieved a reasonable number of customers, beware of

focusing only on developing new customers as a means of growing sales.

 To retain the existing customer we always keep in touch with them by e-mail, new

year wishes, Eid wishes and also give after sales service.

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Market Promotion:

For market promotion of the products, the company will adopt socially acceptable and

welfare friendly market promotion techniques and strategies. For attaining desirable success

in market promotion of products, the company will adopt the following techniques and

strategies, although the company is confident, in the face of quality products, it will need to

adopt at least minimum techniques and strategies:

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Regular advertisement in the mass medias and National dailies;

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Appointment of Sales Agent/Representative to popularize products;

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Establishment of effective distribution channel;

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Maintenance of quality of the products;

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Establishing and popularizing brand name of the products;

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Regular monitoring market promotion measures;

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Preparing annual plans for production, marketing and sale of products and their proper

and timely implementation; and

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Regular researching on product quality, marketing and sale, and on the basis of research

outcome, taking necessary and effective measures.

Conclusion

A detailed analysis and evaluations of the existing and proposed market demand

producers, consumers, economic competitiveness, Govt. Policy, availability of raw

materials, labor and assessment of other relevant factors, consideration and criteria will

revealed that the BMRE project’s success potentials are indeed & its feature is optimistic.

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INDUSTRY ANALYSIS

Major Players

The top industrial producers (CP, Paragon, Aftab, Quality and Kazi) meet 50% of total

estimated feed demand of 135,000 MT/month, while the other 50% is met by home mix

producers (25%) and low quality local level producers (25%). However, there is a major

difference in quality between the two different forms of feed since home mix producers

and local producers do not hire expert supervision or add the necessary additives or

vitamins and in some instances the raw materials, such as: maize and soy-bean are beyond

expiry dates contributing to lower quality.

The industry trend is shifting towards relatively higher-priced balanced feed manufactured

by mechanized feed millers due to high feed conversion ratio that leads to a greater

commercial benefit. Increased demand from the ready-mix feed segment is causing the

decline of home-mix feed market and exit of smaller, low quality producers having lower

economies of scale.

Among the major feed mill companies in Bangladesh, Agro Industrial Trust, Rupsha

Poultry Feeds Ltd., BRAC Poultry Feeds Ltd., Paragon Poultry Feeds Ltd., Surma Poultry

Feeds Ltd., Kazi Poultry Feeds Ltd., Provita Feeds Ltd., Aftab Bohumuki Farms Ltd.,

Narish Poultry Feeds Ltd., Saudi-Bangla Fish Feed Ltd., New Hope Feed Ltd., Aman

Feeds Ltd. are the major players. In a capital-intensive industry such as this, small local

players are facing a high entry barrier because achieving economies of scale is very

difficult.

Market

The growth opportunities for the feed market is immense. Feed market works as the

backward linkage of the poultry, livestock, and fisheries industries. According to DLS

(Department of Livestock services), the average growth rate for the poultry industry has

been 3.62% over the last ten years, whereas the combined growth rate for the three

industries is 3.49%, and it is forecasted to grow at this steady rate in foreseeable future,

which leads to the understanding that the market for the feed industry will continue to

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grow as well. The major portion of the increasing demand will have to be met by

mechanized feed millers whereas the home-mix producers will have to take care of the

rest. Ban on importing livestock from India might have a positive impact on demand for

feed as domestic cattle farms will have to be built to offset its effect.

Our average protein intake is 4.5 kg per person per year, whereas the number for Pakistan,

India, and Sri Lanka is respectively 38kg, 16kg, 12kg.

However, the disposable income of

the people of this country is on the rise and so is the demand for protein. This increase in

demand will boost up the production of poultry, cattle, fisheries and consequently, the

demand for feed. As the industry experts all agree that the market is increasing in size at a

minimum 10%-15% per annum, more players are entering the market for higher profit

opportunities. Accounting for challenges such as: industry & market risks, increasing Raw

Material Price, variability of demand with respect to seasons, technological innovation,

changes in government and global policies, and operational risks, this market is expected

to become more lucrative in the coming years.

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SOWT ANALYSIS

Strengths

Marketing

 The Company and parent group reputation is very high.

 Already a market challenger in Poultry, Cattle & Fish Feed market

 More Demand in Market and customer waiting to use our product.

 Competitive price with high quality product.

 Strong Marketing and channel all over the country.

 Efficient Marketing Team.

 Best Service and reply within 48 Hours.

 Our Factory is fully Healthy and Hygienic.

Finance

 Financially solvent so any time we can make decision.

 Financial strength of the company is very strong.

 It’s possible to make promotional expenses as sales increase.

Organization

 Management of the company is eager to build a strong organizational set-up to

build up the market.

 Skilled and experienced manpower in the production facility exists.

Weakness

 Low production Capacity in compare with market Demand.

 Limited land to extend the existing Plant.

 Limited budget in R & D.

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It would help if we made a list our own business’ strengths and weaknesses, getting input

from all staff including management as many of our employees as possible. Compare our

strengths and weaknesses with those of our main competitors. Check whether company

need to take corrective action to minimize weaknesses and identify where company can

exploit strengths that our competitors don’t have.

Opportunity

 Government has declared poultry/cattle/fish feed mill as a thrust sector.

 There exists 30% cash incentive from Government for export sales.

 Company can extend our product within the short period.

 To gain the more market share Company may extend another unit.

 Company may establish our own sales center in all Division.

 Recent shortage in fish/dairy/broiler/layer feed production in the country as a

whole can be considered as an opportunity to the growth of these products.

Threats

 Company has no standard Employees policy so any time they can switch.

 Many players may enter into the market.

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PROJECT BENEFIT

Project Benefits

The BMRE proposal will have indirect positive impact on surrounding area which is as

mentioned below:

 The expansion Plant will be set up on barren land; hence no displacement of

people is required.

 Substantial Socio-economic benefits.

 Good Techno-commercial viability.

 Around the project site semi-skilled and unskilled workmen are expected to be

available from local population in these areas to meet the manpower requirement

during construction and Operational phase.

 There will be employment opportunity for local people during construction and

operation phase.

 Infrastructural facilities will be improved due to the project.

 Secondary employment will be generated thereby benefiting locals.

 Project will have substantial benefits in savings of transportation cost

 Thus a significant benefit to the socio-economic environment is likely to be created

due to the project.

Employment Potential

The project shall provide employment potential under unskilled, semi-skilled and skilled

categories. The employment potential shall increase with the start of construction

activities, reach a peak during construction phase and then reduce with completion of

construction activities. During operation phase also there will be employment

opportunities, mainly in service sector, although its magnitude will be much less.

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The direct employment opportunities are extremely limited and the opportunities exist

mainly with the contractors and sub-contractors. These agencies will be persuaded to

provide the jobs to local persons on a preferential basis wherever feasible.

CSR and Socio-Economic Development

Islam Agrovet Limited not only carries out business but also understands the obligations

towards the society. The unit is aware of the obligations towards the society and to fulfill the

social obligations unit will employ semi-skilled and unskilled labor from the nearby villages

for the proposed project as far as possible. Unit will also try to generate maximum indirect

employment in the nearby villages by appointing local contractors during construction phase

as well as during operation phase. The Project Proponents will contribute reasonably as part of

their Corporate Social Responsibility (CSR) in and will carry out various activities in nearby

villages.

Moreover, unit has planned to carry out various activities for the up-liftment of poor people,

welfare of women and labors, education of poor students as part of CSR in the nearby villages

and therefore , during and after proposed project, unit will spent more than that required by

statutory norms every year towards CSR activities. The various CSR activates planned at

present by the unit is described below;

 Plantation along the road side and development of garden/greenbelt on government

barren land/common plots.

 Education aids and scholarship to poor students.

 Organize medical camp and providing support for the development and maintenance

of the health facilities.

 Financial support and assistance for the development and maintenance of the

infrastructure facilities.

 Participate and contribute in local social programs.

 Organize various types of training program for the community like training on

scientific agricultural practices, educational training, (training for tailoring,

embroidery), etc. which ultimately helpful for income generation.

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ENVIRONMENT MANAGEMENT PLAN

Introduction

The Environmental Management Plan (EMP) provides an essential link between predicted

impacts and mitigation measures during implementation and operational activities. EMP

outlines the mitigation, monitoring and institutional measures to be taken during project

implementation and operation to avoid or mitigate adverse environmental impacts, and the

actions needed to implement these measures.

The likely impacts on various components of environment due to the project during

developmental activities have been identified and measures for their mitigation are

suggested.

The EMP lists all the requirements to ensure effective mitigation of every potential

biophysical and socio-economic impact identified in the EIA. For each attribute, or

operation, which could otherwise give rise to impact, the following information is

presented:

 A comprehensive listing of the mitigation measures

 Parameters that will be monitored to ensure effective implementation of the action

 Timing for implementation of the action to ensure that the objectives of mitigation

are fully met

The EMP comprises a series of components covering direct mitigation and environmental

monitoring, an outline waste management plan and a project site restoration plan.

Therefore, environmental management plan has been prepared for each of the above

developmental activities.

EMP during Construction Phase

Environmental pollution during construction stage will be limited and for a temporary

period during the construction activity. Construction shall be planned in such a way that

excavated material shall be disposed safely. The manpower required for these activities

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shall preferably be employed from nearby villages so that avenues of employment will be

open to local people.

Directly or indirectly all the environmental components get affected due to the

construction activity. The following environmental protection and enhancement measures

are suggested for implementation by the contractor or the authority during the construction

as applicable.

Air Environment

During the construction phase, gaseous emissions are expected from the heavy

machineries deployed for construction. All other emission sources are intermittent.

Though the gaseous emissions are not expected to contribute significantly to the ambient

air quality, some generic measures to reduce fugitive and gaseous pollutants emissions

during construction phase from point area and line sources shall include the following:

 All equipment used during construction shall have valid certificate.

 The storage and handling of soil, sub-soils, top-soils and materials will be carefully

managed to minimize the risk of wind blown material and dust

 To avoid generation of air borne dust, water sprinkling shall be done.

 There will be no on-site burning of any waste arising from any construction

activities

Water Environment

Drinking water requirements during the construction phase by the contractors shall be met

from proposed bore wells on site. Construction laborers shall be provided with adequate

quantity of drinking water of potable quality. Sufficient and appropriate sanitary facilities

shall be provided in order to maintain hygienic conditions in the camps of construction

laborers. The wastes, such as, sanitary wastes shall be treated in STP of 10 m3/day

capacity. The solid waste generated shall be collected and disposed in an appropriate

manner either at a landfill site or used as compost to be used in lawns/gardening purpose.

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Health and Safety

 The movement of heavy equipment will be undertaken with proper precaution to

prevent any accidents on the road. Occupational risk shall be minimized at the

project site through implementation of a full proof safety system. Speed limit set

for movement of vehicles with 20 km/hr on village roads to reduce risks of

accidents or injuries.

 Safety training shall be provided to all construction workers on operation of

equipment. Security shall also be extended during non-working hours to ensure

there is controlled access to the machinery and equipment.

 The contractors shall also be vigilant to detect workers showing symptoms of

communicable diseases. Health check up of the contract labors shall be done/

recorded at times. All illness and incidents shall be reported and recorded.

Environmental Monitoring

Work of monitoring shall be carried out at the locations to assess the environmental health

in the post period. A post study monitoring program is important as it provides useful

information on the following aspects.

 It helps to verify the predictions on environmental impacts presented in this study.

 It helps to indicate warnings of the development of any alarming environmental

situations, and thus, provides opportunities for adopting appropriate control

measures in advance.

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FINANCIAL EVALUATION

Profitability potential of the project has been estimated for three years of operation to

assess the financial viability of the project. The financial projections include estimation of

sales, operating cost, administrative and selling expenses and financial overheads. The

statement showing earning forecast is shown in the financial aspect. The assumptions of

earning forecast are as follows :

(i) The factory will work on the basis of two shifts (8 hours each) operation per

day and 300 working days in a year.

(ii) The sales price of the existing and BMRE products have been considered at ex-

factory price.

(iii) The cost of raw materials as well as the selling price of the finished goods have

been kept constant throughout the projected years on the assumptions that any

increase in the price of raw materials will be off-set by the consequential

increase in selling prices.

(iv) An increment @ 5% per annum has been considered in the calculation of

wages and salaries and the amount of bonus is considered to be equal to two

months pay

(v) Depreciation has been charged on straight line method on the following rates ;

 Building 5%

 Machinery 10%

 Other Assets 20%

(vi) Capacity utilization has been assumed at 80%, 85%, 90%, 93% & 95% for the

first five years of operation.

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(vii) Economic life of the project has been assumed to be 25 years without any

major replacement.

(viii) The project is expected to break-even at 36% of the assumed capacity

utilization.

(ix) The projected balance sheet of the proposed company is enclosed in financial

aspect which shows a healthy financial position.

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FINANCIAL ANALYSIS

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