.

Acknowledgement
Appreciation goes to those who have contributed in making of this Project. These acknowledgements have a great importance for us. We know better than any one that our parents, our teachers and class fellows made this report possible. Our instructor Mr. Ali Rehman being gracious by nature has always been good and helpful to every student. His able-guidance and didactic efforts always stand us in good stead. We acknowledge the debt of gratitude from the citadel of our heart, because without his valuable guidance and instruction our present academic pursuit might not have been of much value. We are, and shall remain extremely beholden to him for all the time to come

Contents
Executive Summary Objective Mission Statement Vision Statement Goal Strategy Planning SWOT Analysis Project profile Industrial Analysis Physical resources Project Costs Annual Income report Monthly expense Report Organizational chart Conclusion

Page

5 6 6 6 6 7 7 8 9 13 14 15 16 18 19

Executive Summary
The project is about preparation of mineral water or manufacturing of healthy and fruitful water for public. This project tells us that how we can start new venture the project objectives the venture mission, vision, financial resources, SWOT analysis etc all will come in under consideration. Most importantly what would be project cost and what would be the preliminary expenses to start new venture. What strategies and plannings would be adopted to make the business more profitable all will be discussed, how much expenses occurred all the specific financial statements will be presents. The organizational structure will be show, and what type of tangible assets is required to start this venture. Business Legal Status During our study we got to know that manufacturing of mineral water can be started as a sole proprietorship or a partnership and even it can be registered under company law with Securities and Exchange Commission of Pakistan (SECP).

The objective of this project is primarily to put into practice what we have learnt from the classroom lectures. The project forms the basis of an important investment decision. In order to serve this objective, this study covers various aspects of project concept development, start-up, marketing, finance and business management. The study briefly discusses government policies and international scenario, which have some bearing on the project. The business we choose is a manufacturing of mineral water. We are a Pakistan-based manufacturer that produces quality drinking water by the brand name ABSHAR.

What is Mineral Water?

Is not subjected to any chemical treatment. Is obtained directly from natural or drilled sources from underground water. Is collected under conditions which guarantee the original natural bacteriological purity. Is bottled at the point of emergence of the source with particular hygienic precautions.

To

be

the

benchmark for prestige, natural spring water in the region helping to promote mineral water as the highest-quality, and purest, in Pakistan.

To provide the highest quality and most natural water in the region in a way that is cost-effective and convenient.

To become a best manufacturer among the top tenth at least in 5 years by the help of providing best mineral water to the end user.

Goal

STRATEGY
1. The qualitative and quantitative point of view. 2. Get the best mineral water manufacturer of the city. 3. Provide best and timely supply to our end user. 4. Maximum coverage in an ethical way. 5. Win to win situation for both(for our and our customer) 6. Provide best facilities to employees for their future

PLANNING
1. Office should be on center of the city(gulberg). 6

2. Hire vehicles for distribution. 3. Provide quality products to compete our competitors.

SWOT Analysis:
Internal analysis External analysis Internal analysis: Strengths:

100% balanced mineral water.

A highly ethical environment. Sophisticated and trained staff. Weakness: Distribution Market Price-Takers Customer Feedback

Goodwill

Strict competition in market. External analysis: Opportunities:

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offering discounted rates Targeting under developed areas to increase volume.

Clean water moving towards the need of todays pollutant environment.

Have great demand. Threats: Threat of new entrants. Discounted rates offer by competitors.

Government Legislations on environmental Issues

PROJECT PROFILE
Opportunity Rationale
Lahore is a very populous city. Pakistans population has soared up to 149.50 Million (according to government sources), and at least one-third of it is living below the poverty level. Majority of people have no access to clean water to drink or proper sanitation facilities. These posses serious threats to health of masses. Moreover the variable and harsh climate of Pakistan causes major viral diseases through out the year. This creates a great demand for clean water in Lahore. Due to these factors, a big investment opportunity exists in this sector. Therefore we decided to start with something which has increasing demand of clean water.

Products offered
The product range we would like to offer 600 ml bottles (24 bottles per carton) 1.5 liter bottles (12 bottles per carton) 6 liter bottles with carrying handle (4 bottles per carton) 20 liter bottle with stand

Project Investment
The total cost of the project is Rs. 10 millions (one crore).

Project Location
The location will be Lahore gulberg area.
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Key Success Factors

Some of the Key Success factors that will determine the success of this project include: Availability of regular supplies. A well trained technical staff. Availability of complete product range. Reasonable and competitive prices.(may be discounted rates)

INDUSTRY ANALYSIS
Sector Characteristics
The review of Pakistani Mineral water market shows that there are around 150 companies, which are registered with the Ministry of Health. Out of some 100 manufacturing units operating in the country include 10 multinational. Multinational mineral water companies have played a vital role to provide the base for the growth of the mineral water industry since the emergence of Pakistan. They have been enjoying the bulk of the business and are still enjoying after so many years, though their collective market share has dropped significantly.

Sub sector Information

The mineral water industry has experienced major growth in recent years. As per an estimate this industry is growing at 18 % annually. The Pakistans harsh climate provides more favorable business opportunities in this business.

Target customers
The Mineral Water industry is growing in Pakistan day by day. Restaurants Educational Institutions Hospitals Financial Institutions Home Delivery (specific areas only)

MAJOR COMPETITORS
9 Nestle Aquafina Sufi Aqua Safe Gourmet

What is the selected field? Competition Competition Competition

competition in the in quality of product. in supply. in price.

Product
100 % Pure Mineral Water Health Nutrient by Excellence Made on up-to-date technology To Maintain optimal levels of Hydration during exercise

Price
Relatively lower prices than competitors Prices according to segments (Income) Price schemes and patterns: according to competitor price changes

Placement
Product Distribution through distributors Efficient mode for the promotion of the product

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Factory

Agents

Retailers

Whole sellers

Retailers

They are trying to promote their product through Paper Billboards Paper Advertising: We will advertise in the newspapers on Sundays. The newspapers used are Nation 11

 News Dawn Jang

Why client will buy products from you and not from your competitors?

The client will buy product from us not from our competitors because we provide following facilities; 1. We work in ethical way. 2. Timely supply and daily booking. 3. Give one week credit facility on cheque to our valuable customer. 4. Provide cheque facility on full payment. 5. Return leakage.

PHYSICAL RESOURCES
LAND & BUILDING REQUIREMENT Land Requirement
Approximately 3000 sq/ft. will be required for installing and erecting a water plant. It is recommended that the land should be fully possessed. And the

Cost of land Cost of building

Rs. 1,000,000 1,500,000.

Equipment
Details of Office Equipment Rs. 2,00,000 3,00,000

Furniture and fixture Miscellaneous tools & equipments 12

Vehicles
Bought 5 vehicles (pick up Suzuki) and following is the detail expense of per vehicle; Monthly Cost per vehicle (300,000*5) Running & maintenance --Rs. 80000 Annually Rs. Rs.1500000 960,000

Utilities requirement
Electricity Telephone

PROJECT COSTS
The breakdown of total project cost is in the table below: Project Costs Rs. Land & building 25, 00,000 Cost of vehicles 15, 00,000 Raw material (empty bottles) 300,000 Plant & machinery 1,500,000 Office Equipment 5, 00,000 Preliminary Expenses 50,000 Total Cost 6,350,000

FINANCIAL RESOURCES
Project Costs Plant & machinery Land & building Vehicles Furniture & Fixture Miscellaneous equipments Raw material (empty bottles)
13 Rs. 1,500,000 2,500,000 1,500,000 200,000 300,000 300,000

Marketing expenses Advertisement expenses Debts Preliminary Expenses Total Project Cost Cash at bank Total

500,000 500,000 -----73, 00,000 50,000 7,350,000 26,50,000 10,000,000

HUMAN RESOURCE
Human resource requirement for the proposed project is as under: Positions Number Salary/month Annual salary Rs. Rs Administrative staff: General Manager 1 40,000 40,000 Other Managers 4 20,000 9,60,000 Assistants & others 10 8,000 9,60,000 Technical staff 10 8,000 9,60,000 Other subordinates 4 5,000 240,000 Grand Total: 3,160,000

ABSHAR ENTERPRISES Work sheet for estimated Annual income, Expenses & profit (loss)

Units sold (liters) 8,00,000

Rs. Rs.

9,00,000
(000) Rs. Rs.

10,00,000
Rs. Rs.

Income 11200 Sales income (Rs. 14/ liter) Cost of goods sold: Production cost (Rs.4.5/ liter) 3600 Carriage 50
14

12600 4050 60

14000 4500 70

Depreciation 150 Total production expenses 3800 Gross profit 7400 Other operating expenses: Salaries 3160 Telephone 300 Insurance 40 Office expenses 50 Sales promotion 400 Travel 50 Taxes and licenses 80 Miscellaneous Total operating expenses 4080 Net profit 3320

150 4260 8340 3160 360 45 55 450 60 90 4220 4120

150 4720 9280 3160 380 50 60 500 70 100 4320 4960

ABSHAR ENTERPRISES Estimated Monthly Expenses & Starting Costs July 1st, 2008

Estimated Monthly Expenses (1) Based on sales Cash Item of Rs.8,00,000 per year Rs. 60000 21000 4000

(2) How much needed to start business Rs. 120000 63000 12000

Salary of managers All other salaries and wages Rent Travel

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Advertising Delivery expenses Supplies Recurring inventory and purchases Telephone Other utilities Insurance Taxes Interest Running and Maintenance Legal and other professional fees Miscellaneous

40000 30000 80000 10000 25000 4000 5000 80000 10000

40000 90000 240000 30000 50000 8000 10000 160000 30000

Starting Cost Have to pay only Once Rs. Fixture and equipment: Telephone, Rs.5000; Computer,Rs.60000 Decorating and remodeling Installation of fixtures and equipment Starting inventory Legal and other professional fees License and permits Advertising and promotion for opening Accounts receivable Cash Other Total estimated cash you need to start with 65000 30000 15000 100000 10000 (Part of Advertising above) 500000 50000 1,623,000

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Organizational Chart

17

CEO

General Manager

Marketing Manager

HR Manager

Production Manager

Store Manager

Assistant Manager

Assistant Manager

Supervisor

Assistant Manager

Subordinate

Subordinate

Technical Engineer

Juniors

Plant & Machinery Operator

Other technical staff

Juniors

A Last Word

18

Finally, it can be concluded that ABSHAR ENTERPRISES will be a profitable project, because in this era of education people knows importance of clean water which avoids hundreds of diseases. The sale of mineral water has registered on average 200 percent annual growth in the past five years in Pakistan, where the middle class is also in a rush to join the corporate style of living which still provides 60 percent revenue to water selling companies and encourages them to maximize commercialization of drinking water. The business is growing in big cities like Lahore, Karachi, Islamabad, and Peshawar.

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