Rose Water (Rs. 0.86 Million)

Pre-Feasibility Study
(Rose Water)
Small and Medium Enterprises Development Authority

Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road,
Lahore
Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
helpdesk@smeda.org.pk
REGIONAL OFFICE
Punjab
REGIONAL OFFICE
Sindh
REGIONAL OFFICE
Khyber Pakhtunkhwa
REGIONAL OFFICE
Balochistan
3rd Floor, Building No. 3,

Aiwan-e-Iqbal Complex,
Egerton Road Lahore,
Tel: (042) 111-111-456
Fax: (042) 36304926-7
helpdesk.punjab@smeda.org.pk
5th Floor, Bahria

Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 35610572
helpdesk-khi@smeda.org.pk
Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 111-111-456
Fax: (091) 5286908
helpdesk-pew@smeda.org.pk
Bungalow No. 15-A

Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 2831623, 2831702
Fax: (081) 2831922
helpdesk-qta@smeda.org.pk
Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost
May, 2014
Pre-Feasibility Studies
Rose Water Processing Unit (Rs. 0.86 Million)
TABLE OF CONTENTS
1. DISCLAIMER ..............................................................................................................2
2. PURPOSE OF THE DOCUMENT ................................................................................ 3
3. INTRODUCTION TO SMEDA...................................................................................... 3
4. INTRODUCTION TO SCHEME ................................................................................... 4
5. EXECUTIVE SUMMARY ............................................................................................. 4
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT ................................................... 4
7. CRITICAL FACTORS .................................................................................................. 5
8. INSTALLED & OPERATIONAL CAPACITIES ............................................................ 5
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT .................................................. 5
10.
POTENTIAL TARGET MARKETS / CITIES ........................................................... 6
11.
PRODUCTION PROCESS FLOW .......................................................................... 6
12.
PROJECT COST SUMMARY ................................................................................ 7
12.1. PROJECT ECONOMICS ............................................................................................ 7

12.2. PROJECT FINANCING .............................................................................................. 7
12.3. PROJECT COST ...................................................................................................... 8
12.4. SPACE REQUIREMENT ............................................................................................ 8
12.5. MACHINERY AND EQUIPMENT .................................................................................. 8
12.6. FURNITURE, FIXTURE AND EQUIPMENT .................................................................... 9
12.7. RAW MATERIAL REQUIREMENTS ............................................................................ 10
12.8. HUMAN RESOURCE REQUIREMENT ........................................................................ 10
12.9. REVENUE GENERATION ........................................................................................ 11
12.10. OTHER COSTS .................................................................................................... 11
13.
CONTACT DETAILS OF SUPPLIERS, EXPERTS/CONSULTANTS DEV.

INSTITUTIONS ..................................................................................................... 11
14.
ANNEXURE ......................................................................................................... 12
14.1.
14.2.
14.3.
14.4.
14.5.
15.
INCOME STATEMENT ............................................................................................. 12

BALANCE SHEET .................................................................................................. 13
CASH FLOW STATEMENT....................................................................................... 14
USEFUL PROJECT MANAGEMENT TIPS ................................................................... 15
USEFUL LINKS ...................................................................................................... 16
KEY ASSUMPTIONS ........................................................................................... 17
1.
DISCLAIMER
This information memorandum is to introduce the subject matter and provide a

general idea and information on the subject. Although, the material included in
this document is based on data / information gathered from various reliable
sources; however, it is based upon certain assumptions which may differ from
case to case. The information has been provided on as is where is basis without
any warranties or assertions as to the correctness or soundness thereof.
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, its employees or agents do not assume any liability for any
financial or other loss resulting from this memorandum in consequence of
undertaking this activity. The contained information does not preclude any further
professional advice. The prospective user of this memorandum is encouraged to
carry out additional diligence and gather any information which is necessary for
making an informed decision including taking professional advice from a qualified
consultant / technical expert before taking any decision to act upon the
information.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
2.
PURPOSE OF THE DOCUMENT
The objective of the pre-feasibility study is primarily to facilitate potential

entrepreneurs in project identification for investment. The project pre-feasibility
may form the basis of an important investment decision and in order to serve this
objective, the document / study covers various aspects of project concept
development, start-up, production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in Rose Water
Processing Unit by providing them with a general understanding of the business
with the intention of supporting potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally
documented sectors attains greater imminence as the research that precedes
such reports reveal certain thumb rules; best practices developed by existing
enterprises by trial and error, and certain industrial norms that become a guiding
source regarding various aspects of business set-up and its successful
management.
Apart from carefully studying the whole document, one must consider critical
aspects provided later on, which form the basis of any investment decision.
3.
INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was

established in October 1998 with an objective to provide fresh impetus to the
economy through development of Small and Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the
national income, through development of the SME sector, by helping increase
the number, scale and competitiveness of SMEs", SMEDA has carried out
sectoral research to identify policy, access to finance, business development
services, strategic initiatives and institutional collaboration and networking
initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment
has been a hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business
development services is also offered to SMEs by SMEDA. These services
include identification of experts and consultants and delivery of need based
capacity building programs of different types in addition to business guidance
through help desk services.
4.
INTRODUCTION TO SCHEME
Prime Ministers Youth Business Loan scheme, for young entrepreneurs, with
an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide
subsidised financing at 8% mark-up per annum for one hundred thousand
(100,000) beneficiaries, through designated financial institutions, initially by the
National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).
Loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years, inclusive of
1 year grace period, and a debt: equity of 90: 10 will be disbursed to SME
beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwa,
Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered
Tribal Areas (FATA).
5.
EXECUTIVE SUMMARY
Cultivation of ornamental flowers including rose flower is concentrated around big

cities such as Rawalpindi, Faisalabad, Lahore, Multan, Hyderabad and Karachi.
Accordingly, these cities present an opportunity for establishment of Rose Water
Processing Unit due to easy sourcing of rose petals.
The proposed project is a small sized simple steam distillation unit which would
take approximately 8 hours to complete a production cycle, from rose petal input
to rose water extraction.
The project will be producing rose water packed in pet bottles of 750 ml and 250
ml with a ratio of 60% and 40% respectively. Total installed production capacity
of rose water is 49,500 liters from 4.95 ton rose petals and 99,000 liters of water.
The total project cost for setting up a Rose Water Processing Unit is estimated at
Rs. 0.86 million out of which Rs. 0.63 million is capital cost and Rs. 0.23 million is
working capital. The project is proposed to be financed through 90% debt and
10% equity. The NPV is projected around Rs. 4.67 million, with an IRR of 57%
and a payback period of 2.51 years. The legal business status of this project is
proposed as a Sole Proprietorship.
6.
BRIEF DESCRIPTION OF PROJECT & PRODUCT
This project is about processing rose petals to extract water and its packing in
pet bottles of 750 ml and 250 ml.
The processing unit will have a capacity to process 4.95 tons of rose petals,
extracting 49,500 liters of rose water annually. The plant will operate on 70%
capacity in the first year and achieve maximum capacity utilization of 95% in the
6th year. The business will provide employment opportunity to 05 individuals

directly.
Keeping in view the scope and volume of Prime Ministers Youth Business Loan
scheme, the proposed model for processing of rose water is based on purchase
of rose petal from the market instead of self cultivation / harvest of rose plants.
All the expenditures that are required to be incurred for setting up of rose water
processing unit and purchase of raw material for start-up are included in the
capital cost of the project.
7.
CRITICAL FACTORS
Following factors play a critical role in the successful execution of the business
operations and impact profitability:
8.
Entrepreneurs background and technical know-how of the business.

Contract sourcing of good quality rose-petals on reasonable prices.
Ensure the quality of the finished product.
Effective marketing and distribution of the product particularly to the
wholesale buyers.
INSTALLED & OPERATIONAL CAPACITIES
Following table provides details of installed capacities and capacity utilization for
the first year of operations @ of 70%:
Product
750 ml Packing
250 ml Packing
9.
Unit
Bottles
Bottles
Installed Capacity
39,600
79,200
First Year Production

27,720
55,440
GEOGRAPHICAL POTENTIAL FOR INVESTMENT
The industry of growing flowers and other ornamental crops is mainly

concentrated around big cities like Karachi, Hyderabad, Lahore, Rawalpindi,
Islamabad, Multan, Faisalabad, and Quetta along with Pattoki, Sahiwal and
Hyderabad.
10.
POTENTIAL TARGET MARKETS / CITIES
Rose water is used in many medical, cosmetic and culinary products. Large
herbal medicine companies and pharmaceutical businesses are major buyers of
rose water. Additionally, due to traditional consumption of rose water for
household use, there is also a significant consumer market all across Pakistan.
11.
PRODUCTION PROCESS FLOW
Raw Material
Steam
Distillation
Water
Accumulation
Marketing &
Distribution
Bottling and
Packing
12.
PROJECT COST SUMMARY
A detailed financial model has been developed to analyze the commercial

viability of the Rose Water Processing Unit under the Prime Ministers Youth
Business Loan scheme. Various cost and revenue related assumptions along
with results of the analysis are outlined in this section.
The projected Income Statement, Cash Flow Statement and Balance Sheet are
attached as appendix.
12.1.
Project Economics
All the figures in this financial model have been calculated for a target production
of 49,500 liters, whereby; 34,650 liters of rose water will be produced in year one
at 70% of capacity.
The following table shows internal rate of return, payback period and Net Present
Value.
Table 1: Project Economics
Description
Internal Rate of Return (IRR)
Payback Period (yrs)
Net Present Value (NPV)
Details
57%
2.51
Rs. 4,665,191
Returns on the business and its profitability are highly dependent on the
efficiency in sourcing of good quality rose petal for extraction of fine rose water.
Rose water distribution is also very important in this regard, adequate marketing
with strong distribution network is required for its sale.
12.2.
Project Financing
Following table provides details of the equity required and variables related to
bank loan:
Table 2: Project Financing
Description
Total Equity (10%)
Bank Loan (90 %.)
Markup to the Borrower (%age/annum)
Tenure of the Loan (Years)
Grace Period (Year)
Details
Rs. 86,518
Rs. 778,659
8%
8
1
12.3.
Project Cost
Following requirements have been identified for operations of the proposed

business:
Table 3: Capital Investment for the Project
Capital Investment
Plant and Machinery
Furniture & Fixture
Office Equipment
Office Vehicle
Pre-operating Cost
Total Capital Costs
Working Capital
Equipment Spare Part Inventory
Raw Material Inventory
Upfront Building Rent
Cash
Total Working Capital
Total Project Cost
12.4.
Amount (Rs.)
253,000
50,000
36,000
250,000
46,743
635,743
3,163
16,239
84,000
126,031
229,433
865,176
Space Requirement
A total of 700 square feet area is required to start this business. Space for the
processing unit has been calculated on the basis of space required for production
area, management building, and store. However, the units operating in the
industry do not follow any set pattern. Following table shows calculations for
project space requirement.
Table 4: Space Requirement
Space Requirement
Sq. ft
Production Hall
Store
Total Area
400
300
700
Rental expense for the space required is assumed at Rs. 28,000 per month.
12.5.
Machinery and Equipment
Following table provides list of machinery and equipment required for an average
150 liters / shift of rose water.
Table 5: List of Machinery and Equipment
Description
Plant
Extraction Pot
Burner and Other
Accessories
Packing Cone 150 Liter
Total
Capacity
Units/8 Hr
150 Liter
150 Liter
-
Quantity
1
1
1
Cost
Rs/unit
120,000
35,000
18,000
Total
Rs.
120,000
35,000
18,000
150 Liter
80,000
80,000
253,000
Main equipment for this project is its extraction plant along with its accessories.
This Pre-feasibility study proposes 1 plant, with a capacity to produce 150 liters
of rose water per shift, from 300 liters of water and 15 kg rose petals input.
Extraction plant is locally manufactured and available in the market.
12.6.
Furniture, Fixture and Equipment
Following Furniture, Fixture and Office Equipment are proposed to be required to

establish a proper set-up:
Table 6: Furniture and Fixture
Quantity
1
1
Furniture set for Office

UPS (1500 Watts)
Total
Cost
Amount (Rs.)
15,000
15,000
35,000
35,000
50,000
Table 7: Office Equipment Costs
Computer
Printer
Telephone and Connection
Total
Quantity
1
1
1
Cost
Amount (Rs.)
25,000
25,000
10,000
10,000
1,000
1,000
36,000
Office vehicle required for the project is as follows:

Table 8: Office Vehicles
3 Wheel Vehicle
Number
1
Cost
250,000
Amount (Rs.)
250,000
One 3-wheel vehicle with carriage box would be sufficient for distribution of rose
water bottles in the market.
12.7.
Raw Material Requirements
Following table shows raw material cost per bottle.

Table 9: Cost per Bottle
750 ml Bottle
Rose Petals
Pet Bottle
Total
250 ml Bottle
Rose Petals
Pet Bottle
Total
Unit
Unit Cost (Rs.)
Qty
Cost (Rs.)
Kg
No.
45
10.50
0.075
1
3.375
10.500
13.875
Kg
No.
45
7.30
0.025
1
1.125
7.300
8.425
Table 10: Cost of Material
Product
Bottles
Cost (Rs.
/ Unit)
750 ml Packing
39,600
13.875
First Year
Production @
70% capacity
excl. Finished
Goods
inventory
27,181
250 ml Packing
79,200
8.425
54,362
First Year
Cost (Rs.)
377,136
458,000
Total
12.8.
835,136
Human Resource Requirement

Table 11: Human Resource Requirement
Description
No. of Employees
Owner / Manager
Helper
Salesman
Security Guard
Total
1
2
1
1
5
Salary per
Employee per
month
25,000
10,000
15,000
10,000
The above table provides details of human resource required to run the proposed
unit. Owner / Manager will look after the financial, marketing and distribution
10
matters. Salesman will distribute rose water in the market under the supervision
of the owner. Salaries of all employees are estimated to increase at 10%
annually.
12.9.
Revenue Generation
Table 12: First Year Revenue
Product
Bottles
Sales
Price
(Rs./Unit)
750 ml Packing
39,600
58
First Year
Production @
70% capacity
excl. Finished
Goods
inventory
27,181
250 ml Packing
79,200
30
54,362
Total Sales Revenue

12.10.
First Year
Sales
Revenue (Rs)
1,576,498
1,630,860
3,207,358
Other Costs
An essential cost to be borne by the unit is the marketing and office vehicle
running expenses, which are 10% and 7.5% of sales respectively.
13.
CONTACT
DETAILS
OF
SUPPLIERS,
EXPERTS/CONSULTANTS DEV. INSTITUTIONS
University
of
Agriculture,
Horticulture Hanif & Sons, 384 D, Salamat Pura, GT
Department, Faisalabad
Road,
Lahore.
Telephone:
042www.uaf.edu.pk
3654006, Fax: 042-36543084
Tel: +92-41-9200161-70
Fax: +92-41-9200764
PAMICO Technologies, P-124, Street No. 2,
Shahad Colony, Jhang Road, Faisalabad.
Tel: 041-2551911
Web: www.pamicotechnologies.com
11
14.
Rose Water Processing Unit (Rs.0.86 Million)
ANNEXURE
14.1.
Income Statement
Calculations
SMEDA
Income Statement
Revenue
Cost of sales
Cost of goods Sold
Operation costs 1 (direct labor)
Operating costs 2 (machinery maintenance)
Operating costs 3 (Electricity, Gas and Water Expense)
Total cost of sales
Gross Profit
Year 1
3,207,358
Year 2
3,850,063
Year 3
4,517,773
Year 4
5,280,526
Year 5
6,150,650
Year 6
7,141,995
Year 7
7,864,243
Year 8
8,650,667
Year 9
9,515,734
Year 10
10,467,307
835,136
240,000
12,650
319,200
1,406,986
1,800,372
1,002,485
264,000
13,915
376,200
1,656,600
2,193,463
1,176,344
290,400
15,307
441,408
1,923,458
2,594,315
1,374,950
319,440
16,837
515,896
2,227,123
3,053,402
1,601,515
351,384
18,521
600,867
2,572,286
3,578,364
1,859,642
386,522
20,373
697,673
2,964,211
4,177,784
2,047,702
425,175
22,410
767,440
3,262,727
4,601,515
2,252,472
467,692
24,651
844,184
3,589,000
5,061,667
2,477,720
514,461
27,116
928,603
3,947,900
5,567,834
2,725,492
565,907
29,828
1,021,463
4,342,690
6,124,617
General administration & selling expenses

Administration expense
Building rental expense
Office Vehicle Running Expenses
Communications expense (phone, fax, mail, internet, etc.)
Legal & Professional Charges
Office expenses (stationary, entertainment, janitorial services, etc.)
Marketing Expenses
Depreciation expense
Amortization of pre-operating costs
Amortization of legal, licensing, and training costs
Bad debt expense
Subtotal
Operating Income
Gain / (loss) on sale of office equipment
Earnings Before Interest & Taxes
600,000
336,000
240,552
30,000
18,000
320,736
62,500
9,349
16,037
1,633,173
167,199
167,199
660,000
369,600
288,755
33,000
19,800
385,006
62,500
9,349
19,250
1,847,260
346,203
346,203
726,000
406,560
338,833
36,300
21,780
451,777
62,500
9,349
22,589
2,075,688
518,627
518,627
798,600
447,216
396,039
39,930
23,958
528,053
62,500
9,349
26,403
2,332,047
721,355
721,355
878,460
491,938
461,299
43,923
26,354
615,065
62,500
9,349
30,753
2,619,640
958,724
14,400
973,124
966,306
541,131
535,650
48,315
28,989
714,200
64,489
35,710
2,934,790
1,242,994
1,242,994
1,062,937
595,244
589,818
53,147
31,888
786,424
64,489
39,321
3,223,269
1,378,246
1,378,246
1,169,230
654,769
648,800
58,462
35,077
865,067
64,489
43,253
3,539,147
1,522,520
1,522,520
1,286,153
720,246
713,680
64,308
38,585
951,573
64,489
47,579
3,886,613
1,681,221
1,681,221
1,414,769
792,270
785,048
70,738
42,443
1,046,731
64,489
52,337
4,268,825
1,855,792
1,855,792
Interest expense on long term debt (Project Loan)

Subtotal
Earnings Before Tax
64,628
64,628
102,570
59,168
59,168
287,035
51,991
51,991
466,636
44,219
44,219
677,137
35,801
35,801
937,323
26,685
26,685
1,216,310
16,812
16,812
1,361,435
6,119
6,119
1,516,401
1,681,221
1,855,792
Tax
NET PROFIT/(LOSS) AFTER TAX
102,570
287,035
6,664
459,972
27,714
649,423
63,098
874,225
104,946
1,111,363
126,715
1,234,720
150,780
1,365,621
183,744
1,497,477
218,658
1,637,134
12
14.2.
Rose Water Processing Unit (Rs.0.86 Million)
Balance Sheet
Calculations
SMEDA
Balance Sheet
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
126,032
3,163
16,239
84,000
229,433
244,052
26,362
27,901
3,653
21,442
92,400
415,809
495,836
29,003
32,253
4,219
27,677
101,640
690,628
907,226
34,388
37,446
4,873
35,584
111,804
1,131,322
1,496,238
40,267
43,355
5,628
45,593
122,984
1,754,065
2,296,548
46,977
50,071
6,500
58,236
135,283
2,593,615
3,315,080
54,627
57,696
7,508
70,537
148,811
3,654,260
4,444,642
61,669
63,442
8,672
85,350
163,692
4,827,468
5,690,154
67,869
69,786
10,016
103,274
180,061
6,121,161
7,200,546
74,656
76,765
11,568
124,961
198,068
7,686,565
9,223,185
82,122
84,441
9,389,749
253,000
50,000
250,000
36,000
589,000
227,700
45,000
225,000
28,800
526,500
202,400
40,000
200,000
21,600
464,000
177,100
35,000
175,000
14,400
401,500
151,800
30,000
150,000
7,200
339,000
126,500
25,000
125,000
45,946
322,446
101,200
20,000
100,000
36,757
257,957
75,900
15,000
75,000
27,568
193,468
50,600
10,000
50,000
18,378
128,978
25,300
5,000
25,000
9,189
64,489
46,743
46,743
865,176
37,395
37,395
979,704
28,046
28,046
1,182,674
18,697
18,697
1,551,519
9,349
9,349
2,102,414
2,916,061
3,912,217
5,020,935
6,250,139
7,751,054
9,389,749
11,957
11,957
14,360
14,360
16,878
16,878
19,767
19,767
23,079
23,079
26,823
26,823
29,646
29,646
32,745
32,745
36,183
36,183
37,744
37,744
778,659
778,659
692,190
692,190
598,545
598,545
497,128
497,128
387,292
387,292
268,341
268,341
139,517
139,517
86,518
102,570
189,088
979,704
86,518
389,606
476,123
1,182,674
86,518
849,578
936,096
1,551,519
86,518
1,499,001
1,585,519
2,102,414
132,464
2,373,226
2,505,690
2,916,061
132,464
3,484,589
3,617,053
3,912,217
132,464
4,719,309
4,851,773
5,020,935
Assets
Current assets
Cash & Bank
Accounts receivable
Finished goods inventory
Equipment spare part inventory
Raw material inventory
Pre-paid building rent
Total Current Assets
Fixed assets
Machinery & equipment
Furniture & fixtures
Office vehicles
Office equipment
Total Fixed Assets
Intangible assets
Pre-operation costs
Legal, licensing, & training costs
Total Intangible Assets
TOTAL ASSETS
Liabilities & Shareholders' Equity
Current liabilities
Accounts payable
Total Current Liabilities
Other liabilities
Deferred tax
Long term debt (Project Loan)
Total Long Term Liabilities
Shareholders' equity
Paid-up capital
Retained earnings
Total Equity
TOTAL CAPITAL AND LIABILITIES
778,659
778,659
86,518
86,518
865,176
132,464
6,084,930
6,217,394
6,250,139
132,464
7,582,407
7,714,871
7,751,054
132,464
9,219,541
9,352,004
9,389,749
13
14.3.
Cash Flow Statement
Calculations
SMEDA
Cash Flow Statement

Year 0
Operating activities
Net profit
Add: depreciation expense
amortization of pre-operating costs
amortization of training costs
Deferred income tax
Accounts receivable
Finished goods inventory
Equipment inventory
Raw material inventory
Pre-paid building rent
Accounts payable
Cash provided by operations
Financing activities
Project Loan - principal repayment
Additions to Project Loan
Issuance of shares
Cash provided by / (used for) financing activities
Investing activities
Capital expenditure
Acquisitions
Cash (used for) / provided by investing activities
NET CASH
(3,163)
(16,239)
(84,000)
(103,401)
Year 1
Year 2
Year 3
Year 4
Year 5
102,570
62,500
9,349
(26,362)
(27,901)
(490)
(5,203)
(8,400)
11,957
118,020
287,035
62,500
9,349
(2,641)
(4,353)
(566)
(6,235)
(9,240)
2,403
338,252
459,972
62,500
9,349
(5,385)
(5,193)
(654)
(7,908)
(10,164)
2,518
505,036
649,423
62,500
9,349
(5,879)
(5,909)
(755)
(10,008)
(11,180)
2,889
690,429
874,225
62,500
9,349
(6,710)
(6,716)
(872)
(12,643)
(12,298)
3,312
910,145
1,111,363
64,489
(7,650)
(7,626)
(1,008)
(12,302)
(13,528)
3,744
1,137,483
1,234,720
64,489
(7,042)
(5,745)
(1,164)
(14,813)
(14,881)
2,823
1,258,387
1,365,621
64,489
(6,200)
(6,344)
(1,344)
(17,924)
(16,369)
3,100
1,385,029
(101,418)
(101,418)
(109,835)
45,946
(63,889)
(118,951)
(118,951)
(128,824)
(128,824)
(139,517)
(139,517)
Year 6
Year 7
778,659
86,518
865,176
(86,468)
(86,468)
(93,645)
(93,645)
(635,743)
(45,946)
(635,743)
(45,946)
126,032
118,020
251,784
411,390
589,012
800,310
1,018,532
1,129,562
Year 8
Year 9
1,497,477
64,489
(6,787)
(6,979)
(1,552)
(21,687)
(18,006)
3,438
1,510,392
Year 10
1,637,134
64,489
(7,466)
(7,676)
11,568
124,961
198,068
1,561
2,022,639
1,245,512
1,510,392
2,022,639
14
14.4.
Useful Project Management Tips
Technology
Required Spare Parts & Consumables: Suppliers credit agreements and

availability as per schedule of maintenance be ensured before start of
operations.
Energy Requirement: Should not be overestimated or installed in excess and

alternate source of energy for critical operations are arranged in advance.
Machinery Suppliers: Training and after sales services should be sought

under the contract with the machinery suppliers.
Quality Assurance Equipment & Standards: Products quality standards

need to be defined on the packaging and a system to check them instituted.
This improves credibility.
Marketing
Product Development & Packaging: Expert's help may be engaged for

product/service and packaging design & development.
Ads & P.O.S. Promotion: Business promotion and dissemination through

banners and launch events is highly recommended. Product brochures from
good quality service providers
Sales & Distribution Network: Expert's advice and distribution agreements

are required with the distribution.
Price - Bulk Discounts, Cost plus Introductory Discounts: Price should

never be allowed to compromise quality. Price during introductory phase may
be lower and used as a promotional tool. Product cost estimates should be
carefully documented before price setting. Government controlled prices
should be displayed, where applicable.
Human Resources
Adequacy & Competencies: Recruitment of skilled and experienced staff.
Performance Based Remuneration: Attempt to manage human resource cost

should be focused through performance measurement and performance based
compensation.
15
14.5.
Useful Links
Prime Ministers Office, www.pmo.gov.pk
Small and Medium Enterprise Development Authority, www.smeda.org.pk
National Bank of Pakistan (NBP), www.nbp.com.pk
First Women Bank Limited (FWBL), www.fwbl.com.pk
Government of Pakistan, www.pakistan.gov.pk
Ministry of Industries & Production, www.moip.gov.pk
Ministry of Education, Training & Standards in Higher Education,

http://moptt.gov.pk
Government of Punjab, www.punjab.gov.pk
Government of Sindh, www.sindh.gov.pk
Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk
Government of Balochistan, www.balochistan.gov.pk
Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk
Government of Azad Jammu & Kashmir, www.ajk.gov.pk
Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk
Securities
and
www.secp.gov.pk
Federation of Pakistan Chambers of Commerce and Industry (FPCCI),

www.fpcci.com.pk
State Bank of Pakistan (SBP), www.sbp.org.pk
University of Agriculture Faisalabad www.uaf.edu.pk
Barani Agriculture Research Institute, Chakwal, www.barichakwal.org
Pakistan Agricultural Research Council (PARC) www.parc.gov.pk
Exchange
Commission
of
Pakistan
(SECP),
16
15.
KEY ASSUMPTIONS
Table 13: Operating Assumptions
Days Operational per Year (Days)

Accounts Payable (Days)
Accounts Receivable (Days)
Raw Material Inventory (Days)
Finished Goods Inventory (Days)
330
5
3
7
7
Table 14: Expense Assumptions
Marketing Expenses
Vehicle Running Expenses
Bad Debt Expenses
Electricity Expenses @70% capacity (Year 1)
Gas Expenses @70% capacity (Year 1)
Water Expenses @70% capacity (Year 1)
10% of Sales
7.5% of Sales
0.50% of Sales
Rs. 2,100 per month
Rs. 21,000 per month
Rs. 3,500 per month
17

Rose Water (Rs. 0.86 Million)

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Pre-Feasibility Study

Small and Medium Enterprises Development Authority

3rd Floor, Building No. 3,

5th Floor, Bahria

Bungalow No. 15-A

Rose Water Processing Unit (Rs. 0.86 Million)

POTENTIAL TARGET MARKETS / CITIES ........................................................... 6

PRODUCTION PROCESS FLOW .......................................................................... 6

PROJECT COST SUMMARY ................................................................................ 7

12.1. PROJECT ECONOMICS ............................................................................................ 7

CONTACT DETAILS OF SUPPLIERS, EXPERTS/CONSULTANTS DEV.

INCOME STATEMENT ............................................................................................. 12

Rose Water Processing Unit (Rs. 0.86 Million)

This information memorandum is to introduce the subject matter and provide a

Rose Water Processing Unit (Rs. 0.86 Million)

PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential

The Small and Medium Enterprises Development Authority (SMEDA) was

Rose Water Processing Unit (Rs. 0.86 Million)

Cultivation of ornamental flowers including rose flower is concentrated around big

BRIEF DESCRIPTION OF PROJECT & PRODUCT

Rose Water Processing Unit (Rs. 0.86 Million)

6th year. The business will provide employment opportunity to 05 individuals

Entrepreneurs background and technical know-how of the business.

INSTALLED & OPERATIONAL CAPACITIES

First Year Production

GEOGRAPHICAL POTENTIAL FOR INVESTMENT

The industry of growing flowers and other ornamental crops is mainly

Rose Water Processing Unit (Rs. 0.86 Million)

POTENTIAL TARGET MARKETS / CITIES

PRODUCTION PROCESS FLOW

Rose Water Processing Unit (Rs. 0.86 Million)

PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial

Rose Water Processing Unit (Rs. 0.86 Million)

Following requirements have been identified for operations of the proposed

Machinery and Equipment

Rose Water Processing Unit (Rs. 0.86 Million)

Table 5: List of Machinery and Equipment

Furniture, Fixture and Equipment

Following Furniture, Fixture and Office Equipment are proposed to be required to

Furniture set for Office

Table 7: Office Equipment Costs

Office vehicle required for the project is as follows:

Rose Water Processing Unit (Rs. 0.86 Million)

Raw Material Requirements

Following table shows raw material cost per bottle.

Unit Cost (Rs.)

Table 10: Cost of Material

Human Resource Requirement

Rose Water Processing Unit (Rs. 0.86 Million)

Total Sales Revenue

Rose Water Processing Unit (Rs.0.86 Million)

General administration & selling expenses

Interest expense on long term debt (Project Loan)

Rose Water Processing Unit (Rs.0.86 Million)

Rose Water Processing Unit (Rs. 0.86 Million)

Cash Flow Statement

Cash Flow Statement

Rose Water Processing Unit (Rs. 0.86 Million)

Useful Project Management Tips

Required Spare Parts & Consumables: Suppliers credit agreements and

Energy Requirement: Should not be overestimated or installed in excess and

Machinery Suppliers: Training and after sales services should be sought