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Pre feasibility Study

COLD STORAGE(Fruit & Vegetable)

Small and Medium Enterprise Development AuthorityGovernment of Pakistanwww.smeda.org.pkHEAD OFFICESmall and Medium Enterprise Development Authority, 6th Floor,LDA Plaza ,Egerton Road. Lahore, Pakistan Tel: 92-42-111-111-456 Fax: 92-42-6304926-7, Email: [email protected]

REGIONAL OFFICE PUNJAB6 Floor,LDA Plaza ,Egerton Road. Lahore, Pakistan Tel: 92-42-111-111-456 Fax: 92-426304926-7, Email: [email protected]

REGIONAL OFFICE SINDH5th floor, Bahria Complex-II, Moulvi Tameezuddin Khan Road, Karachi Tel: 92-21-111-111-456, 5610432, 5610536, 5610459, Fax: 92-21-5610572. Email: [email protected]

REGIONAL OFFICE NWFPGround Floor, State life Building, The Mall, Peshawar Cantt. Tel: 92-91-111-111-456, 92-919213046-7 Fax: 92-91-286908, Email: [email protected]

REGIONAL OFFICE BALOCHISTANBunglow No.15-A Chaman Housing Scheme, Airport Road, Quetta Tel: 92-81-831702, 92-81831623 Fax: 92-81-831922, Email: [email protected]

February, 2009

Pre feasibility Study

Cold Storage (Fruit & Vegetable)

TABLE OF CONTENT

1 2 3

INTRODUCTION TO SMEDA ...................................................................... 4 PURPOSE OF THE DOCUMENT ................................................................. 4 PROJECT PROFILE ...................................................................................... 4 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 PROJECT BRIEF ............................................................................................ 4 STORAGE OF POTATO ................................................................................... 5 OPPORTUNITY RATIONALE ........................................................................... 6 MARKET ENTRY TIMINGS............................................................................. 7 PROPOSED LOCATION ................................................................................... 7 PROPOSED BUSINESS LEGAL STATUS ............................................................ 7 LEGAL BENEFIT ............................................................................................ 7 PROPOSED CAPACITY ................................................................................... 8 PROJECT INVESTMENT .................................................................................. 8 PROPOSED PRODUCT MIX .......................................................................... 8 RECOMMENDED PROJECT PARAMETERS ..................................................... 8 KEY SUCCESS FACTORS/ PRACTICAL TIPS FOR SUCCESS............................. 8 STRATEGIC RECOMMENDATIONS ............................................................... 9

4 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT....................................................................................................... 9 4.1 SWOT ANALYSIS ........................................................................................ 9 4.1.1 Strengths and Opportunities.................................................................. 9 4.1.2 Weaknesses and Threats ....................................................................... 9 5 SECTOR & INDUSTRIAL ANALYSIS....................................................... 10 5.1 5.2 6 6.1 6.2 7 7.1 7.2 8 9 10 11 GLOBAL PERSPECTIVE ................................................................................ 10 LOCAL PRESPECTIVE .................................................................................. 12 MARKET POTENTIAL................................................................................... 13 TARGET CUSTOMER .................................................................................... 13 TRADITIONAL TYPE COLD STORAGE ........................................................... 14 PRE-FABRICATED COLD STORAGE .............................................................. 15

MARKET INFORMATION ......................................................................... 13

COLD STORAGE TYPES AND INFRASTRUCTURE.............................. 14

PRODUCT PROCESS FLOW...................................................................... 16 HUMAN RESOURCE REQUIREMENTS .................................................. 16 MACHINERY/EQUIPMENT DETAILS.................................................. 17 LAND AND BUILDING ............................................................................ 17

Pre feasibility Study

Cold Storage (Fruit & Vegetable)

11.1 11.2 11.3 12 12.1 12.2 13 14

LAND...................................................................................................... 17 INFRASTRUCTURE REQUIREMENTS ........................................................... 18 BUILDING LAYOUT ................................................................................. 18 PROJECT COSTS ...................................................................................... 19 ESTIMATED TIME FRAME FOR PROJECT COMPLETION ................................ 19

PROJECT ECONIMICS ........................................................................... 19

FINANCIAL ANALYSIS........................................................................... 20 KEY ASSUMPTIONS ................................................................................ 23 CAPACITY ............................................................................................... 23 OPERATIONAL CAPACITY ........................................................................ 23 REVENUE RELATES ASSUMPTION ............................................................ 23

14.1 14.2 14.3

Pre feasibility Study

Cold Storage (Fruit & Vegetable)

1 INTRODUCTION TO SMEDAThe Small and Medium Enterprise Development Authority (SMEDA) was established with the objective to provide fresh impetus to the economy through the launch of an aggressive SME support program. Since its inception in October 1998, SMEDA had adopted a sectoral SME development approach. A few priority sectors were selected on the criterion of SME presence. In depth research was conducted and comprehensive development plans were formulated after identification of impediments and retardants. The all-encompassing sectoral development strategy involved recommending changes in the regulatory environment by taking into consideration other important aspects including financial aspects, niche marketing, technology upgradation and human resource development. SMEDA has so far successfully formulated strategies for sectors including, fruits and vegetables, marble and granite, gems and jewelry, marine fisheries, leather and footwear, textiles, surgical instruments, urban transport and dairy. Whereas the task of SME development at a broader scale still requires more coverage and enhanced reach in terms of SMEDAs areas of operation. Along with the sectoral focus a broad spectrum of business development services is also offered to the SMEs by SMEDA. These services include identification of viable business opportunities for potential SME investors. In order to facilitate these investors, SMEDA provides business guidance through its help desk services as well as development of project specific documents. These documents consist of information required to make well-researched investment decisions. Pre-feasibility studies and business plan development are some of the services provided to enhance the capacity of individual SMEs to exploit viable business opportunities in a better way. This document is in the continuation of this effort to enable potential investors to make well-informed investment decisions.

2 PURPOSE OF THE DOCUMENTThe 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 various aspects of project concept development, startup, and production, finance and business management.

3 PROJECT PROFILE3.1 Project Brief

All fruits and vegetables require specialized post harvest treatment, appropriate temperature and relative humidity for their storage. Establishment of cold storage provides refrigerated storage and preservation facilities for several fruits, vegetables & flowers. Because of technology advancements and logistic strategies, the cold storage of perishable items has become an important stage in the distribution

Pre feasibility Study

Cold Storage (Fruit & Vegetable)

between manufacturers/processors and retail locations. The cold storage will ensure the increased availability and improved quality of high value perishable fruits and

Pre feasibility Study

Cold Storage (Fruit & Vegetable)

vegetables for both export and local sale, which would otherwise perish or deteriorate. This project is designed for storing of potatoes and apples/ kinnu but it can be used to store multiple products, stored in different compartments of the unit, where relative temperatures for respective products can be maintained. The major clientele of this business will be the export houses and the local trading and marketing units of potato and apple/ kinnu. The project will further aim at storing fruits & vegetables even during off-seasons. The project will ultimately assist the clientele in maintaining market price equilibrium throughout the year for potatoes. 3.2 Storage of Potato

The purpose of potato storage is to maintain tuber quality and provide a unifor m flow of tubers to fresh market and processing plants round the year. Good storage should prevent excessive dehydration, decay and sp