Project

Lemon MaltSoft Drink

Rubaid Ali5/28/2012

Lemon malt

Sir Adeel

Rubaid Ali

Roll no= 115

M.com eve Sec (B)

Department Of CommerceThe Islamia University of

Bahawalpur

2

ACKNOWLEDGEMENT

First and foremost, we are grateful to "ALLAH ALMIGHRY", most beneficent and

the most merciful who made us able to complete our given project successfully.

We would also like to pay tribute to the benefactor of humanity "HOLY

PROPHET"(P.B.U.H), who gave us complete knowledge on every aspect and field

of life.

In short of words, to express our modest gratitude and recognition to cuddly and

loveable 'PARENTS', who at each and every moment prays for our success, we are

also deeply thankful to our 'TEACHERS' to have taught us from childhood to still

especially 'SIR. Adeel', who taught us 'project management.'

Thank you all, without you this would have not been possible.

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Dedication

I dedicate this report to our parents and friends in recognition of their worth and to

my teachers who are the guiding force to me and efforts and hard work that showed

me the path of success and prosperity which would be there for me for the rest of my

life.

I thanks to all those who have generously contributed their theoretical knowledge to

this report including our teachers. Without their understanding and support,

completion of this work would not have possible.

I hope people find this report useful and the subject matter adds to their knowledge.

"keep your dreams alive. Understand to achieve anything requires faith and belief in

yourself, vision, hard work, determination, and dedication. Remember all things are

possible for those who believe". Merlin Olson.

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TABLE OF CONTENTs

# pagecontents06Project objective 07Executive Summary08Market Demographics08Industry Analysis09Situational Analysis11Introduction13Vision Statement14Mission Statement15Shared Values16Objective of Lemon malt 16Goals of Lemon malt17Technical analysis18Manufacturing process20Economic analysis

22Financial data

26Project audit

27Recommendation

27conclusion

5

PROJECT OBJECTIVE

The objective of this project is to give overview financial

Project of 'Lemon malt' to provide a broad selection of the drink beverage to potential

consumers in Pakistan. Analysis carried out on those who ready to drink beverages

market in terms of size and froth, covering different segments present in the market.

It includes introduction of the company and the product, internal external

environment, market and competitor analysis, and marketing mix.

6

EXECTIVE SUMMARY

I am fresh graduates of M.com with specialization in

Finance . I am going to start a new business. I have made a research and seek

different type of investment opportunities in Bahawalpur region. As Bahawalpur is

an industrial area having market potential in the field of soft drinks. I have decided to

invest in the drinks because there is much potential in this business and raw material

is easily available .

As population is increasing day by day so the demand of soft drinks is increasing day

by day so it is a very profitable project and it will contribute in the industrial sector of

Bahawalpur region.

Lemon malt company is a registered firm established with the objective of

providing soft drink and to fulfill the increasing demand of Bahawalpur region.. The

company is intending to starts it operations initially with one plant in near tool plaza

Multan road Bahawalpur .

It plans to expand its network latter in others cities of Pakistan. Lemon malt

company will starts its operations in September 2012.

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MARKET DAMOGRAPHICS

176,242,949(July, 2011est).

POPULATION

1.828%GROWTH RATE27.74births/1,000 Population BIRTH RATE

8 death/ 1,000 populationDEATH RATE 1.24 1.24 migrant/ 1000 populationNET MIGRATION RATE

37.2%(male 33,739,547 /female 31,868,0650-14 YEARS 58.6%(52,849,607/ female 50,378,198)15-64 YEARS

4.2%(male 3,475,927 /female 3,931,605

65 YEARS AND OVER

INDUSTRY ANALYSIS

176,242,949(July, 2011est).POPULATION 37.2%( 65,607,612)CHILDREN62.8%( 110,680,572)ADULTS

60%( 14,643,619)CHILDREN EQUITY40%(27,802,960)ADULTS EQUITY

42,446,579TOTAL TARGET MARKET

8

SITUATIONAL ANALYSIS

Beverages are a major consumer able item and there is a huge demand and potential

in this market. The people ready to drink beverage has grown year on year and as a

result, the pie is growing bigger every year.

MARKET ANALYSIS

The market analysis investigates both the internal and external environment. It is vital

that lemon malt carefully monitor both the internal and external aspects regarding it's

business as both the internal and external environment and their respective influences

will be decisive traits in relation to lemon malt success and survival in the soft drink

industry.

INTERNAL BUSINESS ENVIRONMENT

The internal business environment and its influence is that which is to some extent

within the business's control. The main attributes in the internal environment

communication channels. To effectively control and monitor the internal business

environment, lemon malt conduct environmental appraisals of the business's

operations and readily act upon any factors, which cause inefficiencies in any phase of

the production and consumer process

EXTERNAL BUSINESS ENVIRONMENT

The external business environment and its influences are usually powerful forces that

can affect a whole industry and, in fact, a whole economy. Changes in the external

environment will create opportunities or threats in the market place Fresh cola must

be aware off. Fluctuations in the economy, changing customer attitudes and values,

and demographic patterns heavily influence the success of Fresh cola's products on

the market and the reception they receive from the consumers.

9

SOCIAL AND CULTURAL FACTORS

The company have to be vary careful in the implementation of its promotional

campaigens, since the social cultural environment of Pakistan in very conservative

and any suggestive advertisements usually face a lot of negative reaction on the part

of the consumers.

SOCIAL FACTORS

Social factors include consumer's family, small groups and status. Family members

can affect buying beverage in such a way that if number of children is more in a

family than the elders, then the children choice can matter a lot at the time of soft

drink purchase. on the contrary, some times people go for the product that shows their

status in society.

CULTURAL FACTORS

Every group and society has its own culture. Cultural factors affect lemon malt

purchasing massively. Different communities and groups of people have reshaped

Pakistan's culture. In the recent years the Bahar/ Basant festival in Punjab specially

become important part of our culture in which sales of lemon malt go vary high. Soft

drink is purchased in bulk for the parties and other occasions.

INRODUCTION

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The proposed project contemplates to set up a new lemon malt unit near tool plaza

Multan Road, Bahawalpur. The total capacity of plant 5000 can per day. The project

shall be equipped with latest foreign manufacturing plant and Machinery.

The total Capital Cost of the project is estimated to be Rs. 9000000/-

This total Cost of the project comprises of Fixed Assets Rs. 5200000/- and

Initial Net Working Capital of Rs 3800000/-

The Cost of the Project is proposed to be financed by Equity. The funds shall be

provided Rs. 9000000/- in the form of Equity

Estimated cost of project

Fixed Cost Rs. 5200000Initial Working Capital Rs. 3800000

Financial Plan

Cost of the Project Local  Rs.Land and its Development 1500000Building and Civil Work 642000Machinery and Equipment 1600000Engineering and Technical Fee 100,000 Furniture and Fixture 100,000 Vehicles 600000 Preproduction Expense 400000 Office Equipment 78,000 Contingencies 100,000 Others 80000Total Fixed Cost 5200000Initial Working Capital 3800000Total Cost of the Project 9000000

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Cost of building and civil works

Factory Building Area Sq ft

Rate per Sq ft Cost

Office 1,08 900 97200

Bottle storage room 81 900 72900

washing 2,17 900 195300

packaging and labling 300 900 270000

ZFinished Product Storage Room 1,45

900 130500

Labs 54 900 48600

Total 905 814500

Furnishing 185500

Total 905 1000000  

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Lemon malt

Soft drink )lemon(Type Rubaid aliFounder

PakistanCountry of rigion2012Introduced

Bahawalpur Area servedLemon FlavorsBit malt, gormay lemon ,Related products

47Employees5000 cansServing per day

13

VISION STATEMENT

Our vision guides every aspect of our business by describing what we need to

accomplish in order to continue achieving sustainable growth.

People

Be a place to work where people are inspired to be the best they can be.

Portfolio

Bring to the country a portfolio of quality beverage brands that anticipate and satisfy

people's desires and needs.

Plant

Be a responsible citizen that makes a difference by helping build and support

sustainable communities.

Profit

Maximize long-term return to shareowners while being mindful of our overall

responsibilities .

Productivity

Be a lean and highly effective, fast moving organization.

14

MISSION STATEMENT

Mission statement is a statement of organization's purposes that what it wants to

accomplish.

In order to achieve mission of increasing market share and maintaining good

relations with our customers all over the world, we wish to create value for all the

constraints we serve, including our consumers, our bottlers, and our communities.

The lemon malt Company creates value by executing business strategy guided by

Customers is king Customer demand drives everything we do Brand lemon malt is

our best business .

15

SHARED VALUES

Our values serve as a compass for our actions and describe how we behave in the

market.

Leadership

The courage to shape a batter future

Collaboration

Leverage collective genius

Integrity

Be real

Accountability

If it is to be, it's up to me

Passion

Committed in heart and mind.

Diversity

As inclusive as our brands

Quality

What we do, we do well.

Objective of Lemon Malt

The company has sales based objective everything else )marketing plan, advertising

plan, production etc( is derived from this objective.

Currently the company's objective is to "increase the volume of sale up to the maximum level as much as possible during the current fiscal year."

GOALS OF LEMON MALT

"To increase sales volume and gain market leadership in Bahawalpur region.

Technical Analysis

Location of the Project

The project is proposed to set up at Multan Road, Bahawalpur. The site enjoys the

following advantages:-

- Easy availability of raw material

- Access to the main road, Sources of Power, water, fuel etc

- Availability of transport & communication like telephone, telex, Internet

etc.

- Availability of skilled and Un-Skilled manpower

- Free from other environmental hazards like water logging, floods, salinity

etc.

Manufacturing Process

LEMON MALT

The manufacturing of the fresh cola comprises of the following main steps:

Pumping the water Purification of water Mixing of sugar Sampling Add other ingredients and flavors sampling Filling the can and bottles Weights sample

a) PUMPING THE WATER

The first step of LEMON MALT manufacturing is pumping water from land through

water tube well and transferred to the purification plant.

b) purification of water.

After pumping the water from land the water is purified through heavy purification

plant. In purification process water is purified from sands and tocsin ingredients. The

purified water saved in the water tanks.

C) Mixing of sugarThe third step in LEMON MALT manufacturing is mixing the sugar in the purified

water.

Sampling

According to the policy of LEMON MALT the samples of sugar mix water are get to check the quality of mixture if its is according to the quality standard, Then the process is continue other wise provoked for meeting the international quality standards.

d) Add flavor and other ingredients.

The sugar mixed water come from sugar mixture tank and then flavors )LEMON( and other ingredients of LEMON MALT are added.

Sampling

According to the policy of LEMON MALT at the end samples of lemon malt are get

to check the quality of mixture if its is according to the quality standard, Then the

process is continue other wise provoked for meeting the international quality

standards.

e) Filling the can and bottles.

Now lemon malt is ready for filling in cans and bottles and now this product is ready

for packing.

Weight smples.

During the process weights are checked at every step to meet the international quality

standard of soft drink for this purpose the deal weight tester is used.

Packing of cans and bottles.

At the end the lemon malt bottles are packed in crotons. Now its ready for selling in

the market.

Economic Analysis

This analysis is directed towards determining whether the project is likely to

contribute significantly to the development of the economy as a whole and the

contribution of the project would be great enough to justify the use of available

resources. This aspect is reviewed under the following:-

INITIAL IMPACT

In order to pursue a theory of balanced growth of the economy the current

government is putting an emphasis on industrialization of our inherently agrarian

economy. Industrialization of substantial dynamic benefits is important for changing

the traditional structure of our less developed economy, while providing employment

for a rapidly increasing labor force, and saving scarce foreign exchange by import

substitution and creating export potentials.

A capital expenditure creates incomes for people engaged in the fabrication of capital

goods, who in turns spend their incomes on consumer goods. An initial original

capital investment creates a wave of income and spending which has multiplied effect

on the national income, increasing it by several times, the original investment. The

initial original capital investment in local currency would have a healthy impact on

the GNP of the country, the extent of which depends on the degree of multiplied

effect.

EMPLOYMENT OPPORTUNITIES

The project would create employment opportunities for the following staff:

Detail Total Nos.

Skilled Labor 50Semi-Skilled Labor 22Factory Administrative Staff 10Marketing Staff 05

Salary of staff

The salaries of the staff will be calculated on the basis of working hours in a week and

multiply total working hours with the wage of per hour then salary is calculated.

 Sr.No.  Types of Staff Basic Salary Per Month

 Total Salaries for the Year

1Admin&acc manager 30000 360000

2 Supervisor 15000 1800003 Shift Incharge 12000 288000

4Machine Operator 10000 240000

5 Lab assistant 10000 1200006 Filler 6000 1440007 Electrician 6000 720008 Driver 5000 1200009 Sweeper 4000 48000

10 Security Guard 6000 144000

  TOTAL  1716000

BENEFIT COST ANALYSIS

The benefit/Cost ratio of the project is worked out in times which are considered

satisfactory. The NPV of the expected benefit and costs has been taken into account

for the calculation of this ratio.

Financial data

Lemon malt (PVT)LTD COMPA NY . BAHAWALPUR

 

       (In Rs)

 

  ESTIMATED INCOME STATEMENTS  For the year ending Dec. 31,

  2013 2014 2015 2016  2017

           SALES    

Lemon malt   177,586,2

1953448

2131034 2308620 

2486206

      

Total Sales   177,586,2

1953448

2131034

2308620 2486206

Less:          

COST OF GOODS SOLD :

         

Raw Materials   64,086,7

704953

769040 833127 

897213

Labour   5,564,1

61206

66769 72333 

77897

Manufacturing Expenses  

11,286,8

124154

135441 146728 

158015

Excise Duty \ Sales tax 0.03

5,327,5

58602 63930 69257 

74585

Royalty fee (Straight line method)

-

-

-

 - -

Deprication   616,3

6779

7395

8011  8628

Cost of Goods Manufactured

  907048

997752

1088457

1179162 1269867

Less: Ending Inventory  

4,856,2

53418

58274

63130 67986

COST OF G00DS SOLD  

955610

1051171

1146732

1242293 1337854

G R O S S P R O F I T

  858486

944334

1030183

1116031  1201880

Less :          OPERATING EXPENSES

         

           

Admin & General Expenses  

4,428,4

48712

53140 57569 

61997

Selling Expenses   25,497,2

280469

305966 331463 

356960

Total Operating Expenses  

29,925,7

329182

359108 389034 

418959

           OPERATING PROFIT  

559230

615153

671076 726999 782922

Add:          

OTHER INCOME   -

-

-

 

Less:          NON OPERATING EXPENSES

         

Financial Expenses  

5,950,0

65450

71400  77350

83300

Amortzn. of Prelim. Exp

  269,6

2965

3235

3505  3774

Workers participation fund

4% 2,625,4

28879

31504 34130 

36755

workers wekfore fund 4%

2,625,4

28879

31504 34130 

36755

Total Operating Expenses  

11,470,4

126174

137645 149115 

160585

Profit   444526

488978

533431 577883 

622336

Lemon malt (PVT)LTD COMPA NY . BAHAWALPUR

ESTIMATED BALANCE SHEETS        (In Rs)  As on Sept. 30, 1 2 3 4 5ASSETS          Fixed Assets          Fixed Assets at cost

5200000 5200000 5200000 5200000 5200000

Less: Accumulated Dprcn.

- 80607 161215 24182 3 304333

Net Fixed Assets 5200000

5119393 5038785 4958177 4895667

Preliminary Expenses:

- (35266) (45266) (55535) (65222)

Total Fixed Assets 5200000

5084127 4993519 4902642 4830445

Current AssetsCash 2901280 3191408 3481536 3771664 4061792Marketable Securities

109936 120929 131923 142916 153910

Accounts Receivables

881168 969284 1057401 1145518 1233635

Finished Goods Inventory

301204 331324 361444 391565 421685

Raw Material Inventory

662485 728733 794982 861230 927479

Stores & Spares 12270 13497 14724 15951 17178Advances & Depostis

124047 136451 148856 161261 173665

Total Current Assets

4992394

5491626 5990866 6497105 6989344

TOTAL ASSETS 10192394

10575753 10984385 11399747 11819789

LIABILITIES & EQUITYCurrent Liabilities- Accounts Payable

835661 474728 1165125 1509250 1858058

- Accrued Expenses

356732 392405 428078 463752 499425

Total Current Liabilities:

713464 784810 856156 927504 998850

EQUITYEquity 9000000 9000000 9000000 9000000 9000000Balance c/d from

Profit & loss 80% - 355620 391182 4

26745 462306

Total Equity: 9000000

9355620 9391182 9426745

9462306

   Total Liab. & Equity:

10192394

10575753 10984385 11399747 11819789

SWOT ANALYSIS

STRENGTHS

1. Strong market image

2. High financial resources

3. Committed and competent staff

4. Own rent free building

5. Lower Cost management staf

WEAKNESSES

1. No promotional activities

2. No other incentive except salary

OPPORTUNITIES

1. Potential in market

2. Poll Price System

THREATS

1. New entrance

2. Economic instability

3. Tough competition

4. Political instability

PROJECT AUDIT

The company will have its internal audit committee, which will conduct the audit of the

various functions of the company as well as the environmental audit. The audit

committee of the company comprises the Chairman of the company and all the functional

heads of the various departments of the company.

The audit committee will be responsible for the edifice of the performance appraisal of

the various functions of the company. The audit committee will check the performance of

the accounts department, finance department, marketing department and also check the

performance of the human resources of the company. On the basis of the performance

determine by the audit committee various rewards will be announced for the employees.

The company will utilize its promotion and reward system as the motivation tool for its

employees. On the basis of the performance various monetary, stocks and training and

educational rewards will be announced for the employees of the company.

The company will strictly follow standards that will give the guidelines to the company

for the safe practices, so that no environmental hazards will be done. The company will

get its registration with the ISO – 14000 and will use this as its promotional tool in the

marketing campaign in the media. The company will regularly administer its standards

and will keep its system up to date, so that there will be no cause of the environmental

pollution and hazards by the operations of the company.

.

Recommendations

I recommend this project it will have more profit if it will diverse its according to the companies running its advertisements.

This business will earn more profit if it regularly increase its sale.

Conclusion

I conclude that this business will generate handsome cash flows in coming years and it will payback investment in 2 years.

Estimated cost

Fixed cost 5200000Initial permanent working capital 3800000

Total cost of project 9000000

Past experience: I am working at this project for the first

time. It may meet the all standards. And this project is according to my mental interest and taste.