Feasibility Report

 Pre-Feasibility Study 

(Internet Café) 
Small and Medium Enterprises Development Authority 

Table of Contents 

 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 

 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 Internet Café 
business 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 it’s successful 
management. 
Apart from carefully studying the whole document one must consider critical 
aspects provided later on, which form 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 successful hallmark of SME facilitation by SMEDA. 
Concurrent to the prefeasibility studies, a broad spectrum of business 
development services is also offered to the 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 Minister’s Youth Business Loan’ program, 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 through 
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 
In this pre-feasibility study, the Internet cafe is proposed to be located in a 
commercial area which is in close proximity of students and business people of 
middle income groups. A range of services are to be provided including but not 
limited to internet surfing, audio/video chat, printing, scanning and fax services. 
Furthermore, projected workings of the business have been based on 16 hours 
of operations per day. 
The total initial cost for setting up an internet cafe is estimated at Rs. 1.54 million 
out of which capital cost is Rs. 1.24 million along with working capital of Rs. 0.30 
million. The project will be financed through 90% debt and 10% equity. The NPV 
is projected at around Rs. 6.01 million, with an IRR of 49% and payback period of 
3.24 years. The legal business status of this project is proposed as sole 
proprietorship. 
6 BRIEF DESCRIPTION OF PROJECT & PRODUCT 
In order to set-up an internet cafe, the entrepreneur needs to get a high 
bandwidth internet connection from a renowned service provider. The internet 
café is proposed to be established in a location that ensures high visibility and 
easy access to students and people belonging to the business community. The 
business can be established in any of the major cities of the country. 
In this pre-feasibility study, the internet café will be established in rented 
premises with an area of around 550 sq. ft, having good speed internet 
connection along with electricity & telephone connections with proposed 
investment of Rs. 1.54 million. The business is to provide internet, audio / video
chat, printing, scanning, fax and value added services to its clients primarily in 
middle income group. 
The internet café will remain operational for 16 hours a day. Initial sales volume 
is calculated at Rs. 2.14 million in the first year, with an annual growth of 10%, 
providing employment to 4 individuals. 
The venture is proposed to be established as a sole proprietorship. 
7 CRITICAL FACTORS 

Some of the key factors for operating a successful internet café are: 
• Background, experience and technical qualification of the entrepreneur 
and/or key staff. 
• Selection of an appropriate location, preferably close to middle income 
housing societies and private student hostels. 
• Availability of value added services such as video/audio chat, good printer, 
scanner & fax machine. 
• Uninterrupted power supply with good internet speed. 


8 INSTALLED & OPERATIONAL CAPACITIES 
The proposed project is based on 10 new computers installed in individual cabins 
along with provision of printer, scanner and fax machine to fulfill the requirement 
of the users. Additionally, two ACs will be installed in order to keep the 
environment comfortable for users so that they can stay for extended hours, as 
required, and spend time at the internet café. 
Entrepreneur involved in this business would fare better if adequately familiar 
with software / hardware installation, computer networking, troubleshooting and 
internet usage. 
9 POTENTIAL TARGET MARKETS / CITIES 
An internet café should be easily accessible and should be near or in a 
commercial area, preferably in close proximity of student hostels and business 
people belonging primarily to middle income groups. The proposed business can 
be opened in any of the cities across Pakistan. 


10 PROJECT COST SUMMARY 

A detailed financial model has been developed to analyze the commercial 
viability of Internet Café under the ‘Prime Minister’s Youth Business Loan’ 


program. Various costs 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 annexures. 

10.1 Project Economics 
Following table shows internal rate of return, payback period and net present 
value: 
Table 1 - Project Economics 

Description 

Details 

 Internal Rate of Return (IRR) 

49% 

 Payback Period (Yrs) 

3.24 

 Net Present Value (NPV) 

6,009,309 




Returns on investment and its profitability are highly dependent on the 
entrepreneur’s practical knowledge about software / hardware installation, 
computer networking and information technology. 
10.2 Project Financing 
Following table provides details of the equity required and variables related to 
bank financing; 
Table 2 - Project Financing 
Description 

Details 

Total Equity (10%) 

Rs. 154,500 

Bank Loan (90%.) 

Rs. 1,390,500 

 Markup to the Borrower (%age/annum) 

8% 

Tenure of the Loan (Years) 

8 

Grace Period (Year) 

1 





10.3 Project Cost 
Following requirements have been identified for operations of the proposed 
business. 
Table 3 - Capital Investment for the Project 
Capital Investment 

Amount (Rs.) 

Furniture & Fixtures 

361,000 




Internet Cafe Equipment 

809,000 

Pre-operating Cost 

75,000 

 Total Capital Cost 

1,245,000 

Initial Working Capital 

300,000 

Total Project Cost 

1,545,000 




10.4 Space Requirement 
Approximately 550 sq. ft. will be required for the Internet Cafe. It is recommended 
that the area should be acquired on rent. Rent cost for the proposed areas will be 
ranging between Rs. 20,000 to Rs. 30,000. Rent cost incorporated for financial 
analysis is Rs. 25,000 per month. One month advance rent along with three 
months of security deposit is also to be paid. 


10.5 Office Equipment Details 
The details of different equipment required for the project is given in the following 
tables: 
Table 4 – Internet Cafe Equipment Costs 

Equipment 

Quantity 

Cost per 
Unit (Rs.) 

Total 
Cost 
(Rs.) 

Computer 

11 

50,000 

550,000 

Hub 

1 

8,000 

8,000 

Computer Camera 

11 

2,000 

22,000 

Head Phones 

11 

1,000 

11,000 

UPS 

1 

150,000 

150,000 

Printer 

2 

20,000 

40,000 

Scanner 

1 

10,000 

10,000 

DSL Modem 

1 

8,000 

8,000 

Networking Cable (ft.) 

500 

20 

10,000 

Total Equipment 





809,000 




Additionally, some backup inventory of hub & DSL modem is recommended. 
10.6 Furniture & Fixture 
Details of furniture and fixture are as follows: 
Table 5 – Furniture & Fixture Costs 

Description 

Quantity 

Unit Cost 
(Rs) 

Total Cost 
(Rs) 

 Computer Tables and Cabins 

11 

10,000 

110,000 

 Computer Chairs 

11 

5,000 

55,000 

 Telephone sets 

2 

1,500 

3,000 

 Fax machine 

1 

15,000 

15,000 

 Sign Board 

1 

25,000 

25,000 

 Ceramic Tiles ( Sq. Ft) 

550 

60 

33,000 

 Air Conditioners 

2 

60,000 

120,000 

Total Furniture & Fixture Cost 





361,000 



10.7 Human Resource Requirement 
Internet café will run for 16 hours a day in two shifts (i.e. 8 hours per shift). Shift 
timing will be: 
Table 6 - Shift Schedules 

Shift 1 

9:00 am to 5:00 pm 

Shift 2 

5:00 pm to mid night 




Human resource requirement for the proposed project is as under: 
Table 7 - Staff Requirement (2 shifts) 

Positions Number Salary/Month 
(Rs.) 
Annual Salary 
(Rs.) 
Network Administrator 1 20,000 240,000 
Lab Assistant 2 15,000 360,000 
Cashier 1 10,000 120,000 
Total 4 720,000 


Salaries of all employees are estimated to increase at 10% annually.
10.8 Revenue Generation 
Expected revenue generation by the Internet Cafe during the first year is given in 
the table below: 

Table 8 - Expected Revenue Generation during Year-I 
Service Category Expected Sales Amount (Rs.) 
Internet Rate per Hour 50 
Sales from Internet Usage 1,872,000 
Sales from Printing 180,000 
Sales from Scanning 54,000 
Sales from Faxes 36,000 
Total Sales for the first year 2,142,000 



The annual sales growth rate is estimated at 10%.
Income Statement 
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 
Sales from Internet Hours 1,872,000 2,217,600 2,613,600 3,066,624 3,584,117 4,174,442 4,846,991 5,612,305 6,173,536 6,790,889 
Sales from Printing 180,000 198,000 217,800 239,580 263,538 289,892 318,881 350,769 385,846 424,431 
Sales from Scanning 54,000 59,400 65,340 71,874 79,061 86,968 95,664 105,231 115,754 127,329 
Sales from Faxes 36,000 39,600 43,560 47,916 52,708 57,978 63,776 70,154 77,169 84,886 
Total Sales 2,142,000 2,514,600 2,940,300 3,425,994 3,979,424 4,609,280 5,325,312 6,138,459 6,752,305 7,427,535 
Cost of sales 
Internet Connection 60,000 66,000 72,600 79,860 87,846 96,631 106,294 116,923 128,615 141,477 
Printing Charges 54,000 59,400 65,340 71,874 79,061 86,968 95,664 105,231 115,754 127,329 
Fax Charges 10,800 11,880 13,068 14,375 15,812 17,394 19,133 21,046 23,151 25,466 
Electricity Expense 300,000 330,000 363,000 399,300 439,230 483,153 531,468 584,615 643,077 707,384 
Total cost of sales 424,800 467,280 514,008 565,409 621,950 684,145 752,559 827,815 910,597 1,001,656 
Gross Profit 1,717,200 2,047,320 2,426,292 2,860,585 3,357,474 3,925,135 4,572,753 5,310,644 5,841,708 6,425,879 
General administration & selling expenses 
Administration expense 720,000 792,000 871,200 958,320 1,054,152 1,159,567 1,275,524 1,403,076 1,543,384 1,697,722 
Rent expense 300,000 330,000 363,000 399,300 439,230 483,153 531,468 584,615 643,077 707,384 
Printing & Stationary 60,000 63,000 66,150 69,458 72,930 76,577 80,406 84,426 88,647 93,080 
Entertainment 18,000 18,900 19,845 20,837 21,879 22,973 24,122 25,328 26,594 27,924 
Promotional expense 25,000 22,500 20,250 18,225 16,403 14,762 13,286 11,957 10,762 9,686 
Depreciation expense 341,867 341,867 341,867 384,373 384,373 404,320 453,527 453,527 453,527 510,489 
Amortization of pre-operating costs 15,000 15,000 15,000 15,000 15,000 - - - - - 
Janitorial Expenses 60,000 66,000 72,600 79,860 87,846 96,631 106,294 116,923 128,615 141,477 
Miscellaneous expense 36,000 39,600 43,560 47,916 52,708 57,978 63,776 70,154 77,169 84,886 
Subtotal 1,575,867 1,688,867 1,813,472 1,993,289 2,144,520 2,315,962 2,548,402 2,750,006 2,971,775 3,272,648 
Operating Income 141,333 358,453 612,820 867,297 1,212,954 1,609,173 2,024,351 2,560,638 2,869,933 3,153,231 
Earnings Before Interest & Taxes 141,333 358,453 612,820 867,297 1,212,954 1,609,173 2,024,351 2,560,638 2,869,933 3,153,231 
Interest expense on long term debt (Project Loan) 115,411 105,660 92,844 78,964 63,932 47,652 30,022 10,928 - - 
Subtotal 115,411 105,660 92,844 78,964 63,932 47,652 30,022 10,928 - - 
Earnings Before Tax 25,923 252,794 519,977 788,333 1,149,022 1,561,521 1,994,329 2,549,710 2,869,933 3,153,231 
Tax - - 11,998 40,750 94,853 159,804 246,366 359,927 439,983 510,808 
NET PROFIT/(LOSS) AFTER TAX 25,923 252,794 507,979 747,583 1,054,169 1,401,717 1,747,964 2,189,783 2,429,950 2,642,424 
11 ANNEXUREIncome Statement 

Balance Sheet 
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 
Current assets 
Cash & Bank 2 75,000 6 55,289 1 ,107,788 1 ,814,378 2 ,817,648 4 ,166,243 5 ,915,639 8 ,129,016 10,878,237 14,196,338 1 7,919,007 
Pre-paid building rent 2 5,000 2 7,500 3 0,250 3 3,275 3 6,603 4 0,263 4 4,289 4 8,718 53,590 58,949 - 
Total Current Assets 3 00,000 6 82,789 1 ,138,038 1 ,847,653 2 ,854,251 4 ,206,506 5 ,959,928 8 ,177,734 10,931,827 14,255,287 1 7,919,007 
Fixed assets 
Furniture & fixtures 3 61,000 2 88,800 2 16,600 1 44,400 7 2,200 4 60,738 3 68,590 2 76,443 184,295 92,148 - 
Cafe equipment 8 09,000 5 39,333 2 69,667 9 36,519 6 24,346 3 12,173 1 ,084,137 7 22,758 361,379 1,255,025 8 36,683 
Total Fixed Assets 1 ,170,000 8 28,133 4 86,267 1 ,080,919 6 96,546 7 72,911 1 ,452,727 9 99,201 545,674 1,347,172 8 36,683 
Intangible assets 
Total Intangible Assets 7 5,000 6 0,000 4 5,000 3 0,000 1 5,000 - - - - - - 
TOTAL ASSETS 1,545,000 1,570,923 1,669,304 2,958,572 3,565,797 4,979,416 7,412,655 9,176,935 11,477,501 15,602,459 18,755,690 
Current liabilities 
Total Current Liabilities - - - - - - - - - - - 
Other liabilities 
Deferred tax - - 1 1,998 5 2,747 1 47,601 3 07,404 5 53,770 913,697 1,353,680 1 ,864,488 
Long term debt (Project Loan) 1 ,390,500 1 ,390,500 1 ,236,088 1 ,068,860 8 87,752 6 91,613 4 79,194 2 49,144 - - - 
Long term debt (Working Capital Loan) - - - - - - - - - - - 
Total Long Term Liabilities 1 ,390,500 1 ,390,500 1 ,236,088 1 ,080,858 9 40,500 8 39,213 7 86,598 8 02,914 913,697 1,353,680 1 ,864,488 
Shareholders' equity 
Paid-up capital 1 54,500 1 54,500 1 54,500 1 ,091,019 1 ,091,019 1 ,551,756 2 ,635,894 2 ,635,894 2,635,894 3,890,918 3 ,890,918 
Retained earnings 2 5,923 2 78,716 7 86,695 1 ,534,278 2 ,588,447 3 ,990,164 5 ,738,127 7,927,910 10,357,860 1 3,000,284 
Total Equity 1 54,500 1 80,423 4 33,216 1 ,877,714 2 ,625,297 4 ,140,203 6 ,626,057 8 ,374,021 10,563,804 14,248,778 1 6,891,202 
TOTAL CAPITAL AND LIABILITIES 1,545,000 1,570,923 1,669,304 2,958,572 3,565,797 4,979,416 7,412,655 9,176,935 11,477,501 15,602,459 18,755,690 
Liabilities & Shareholders' Equity 
Assets 
11.2 Balance Sheet 

Cash Flow Statement 
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 
Operating activities 
Net profit 25,923 252,794 507,979 747,583 1,054,169 1,401,717 1,747,964 2,189,783 2,429,950 2,642,424 
Add: depreciation expense 341,867 341,867 341,867 384,373 384,373 404,320 453,527 453,527 453,527 510,489 
amortization of pre-operating costs 15,000 15,000 15,000 15,000 15,000 - - - - - 
Deferred income tax - - 11,998 40,750 94,853 159,804 246,366 359,927 439,983 510,808 
Pre-paid building rent (25,000) (2,500) (2,750) (3,025) (3,328) (3,660) (4,026) (4,429) (4,872) (5,359) 5 8,949 
Cash provided by operations (25,000) 380,289 606,910 873,818 1,184,378 1,544,734 1,961,815 2,443,427 2,998,365 3,318,101 3,722,669 
Financing activities 
Project Loan - principal repayment - (154,412) (167,228) (181,108) (196,140) (212,419) (230,050) (249,144) - - 
Additions to Project Loan 1,390,500 - - - - - - - - - - 
Issuance of shares 154,500 - - 936,519 - 4 60,738 1,084,137 - - 1,255,025 - 
Cash provided by / (used for) financing activities 1,545,000 - (154,412) 769,291 (181,108) 2 64,598 871,718 (230,050) (249,144) 1,255,025 - 
Investing activities 
Capital expenditure (1,245,000) - - (936,519) - (460,738) (1,084,137) - - (1,255,025) - 
Cash (used for) / provided by investing activities (1,245,000) - - (936,519) - (460,738) (1,084,137) - - (1,255,025) - 
NET CASH 275,000 380,289 452,498 706,590 1,003,270 1,348,595 1,749,396 2,213,377 2,749,221 3,318,101 3,722,669 
11.3 Cash Flow Statement 

11.4 Useful Project Management Tips 
Marketing 
• Ads & P.O.S. Promotion: Business promotion and dissemination through 
banners along with product brochures from good quality service providers is 
highly recommended. 
• Price - Bulk Discounts, Cost plus Introductory Discounts: Price during 
introductory phase may be lower and used as promotional tool. Price cost 
estimates should be carefully documented before price setting. 

Happiness of life: Business plan

Happiness of life: Business plan: Business Plan Training Video For PM's Youth... by smedas By smeda

Business plan

Business Plan Training Video For PM's Youth... by smedas By smeda

Smeda Loan

SMEDA has taken the initiative of developing pre-feasibility studies in eight (8) sectors, and as per directions of the Prime Minister, has made them available for the loan beneficiaries, through the SMEDA website, for the promotion of an entrepreneurial culture in Pakistan. To date, our website has recorded more than 700,000 downloads of the published pre-feasibility reports.

These prefeasibility studies provide a general understanding of the proposed business, and are structured like a business plan. However, to assist the prospective entrepreneurs / loan applicants, SMEDA will provide a template for business plan preparation and requisite guidelines for the loan applicants. 

Loan application Form

here is the loan application form
you can upload the form from here
here is the link


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prime minister loan News

Press Release: 100,000 Students to have Internship Opportunities through SMEDA Internship Program

Lahore, November 8, 2013

 

Over 100,000 students will have internship facility this year under the internship program developed by the Small and Medium Enterprises Development Authority (SMEDA) through a unique portal;”internship.smeda.org”, which was launched by Mr. Shafqat Hussain Naghmi, Federal Secretary Industries and Production today at a local hotel. Sardar Ahmad Nawaz Sukhera, Chief Executive Officer of SMEDA delivered address of welcome to the large number of participants representing academia and the business community.

 

Engn. Sohail Lashari, President LCCI, Mr. Arif Saeed, former Chairman Lahore Stock Exchange and Dr.  Mujahid Kamran, Vice Chancellor, Punjab University also addressed the ceremony.

 

Speaking as Chief Guest on this occasion, the Federal Secretary Mr. Shafqat Hussain Naghmi said that Pakistan, being the 6th largest country with over 60 percent of its population below the age of 30, was facing a great challenge of employment generation at mass level. The demographic projections show that this ‘youth bulge’ will continue to dominate the population for another 30–35 years. Therefore, in face of the perpetually shrinking job opportunities in both the private and public sectors, it is imperative to make quick interventions to enable the youth to become productive agents in the economy through channeling their energy, talent, and skills to right employment and training opportunities, he said and appreciated SMEDA to address this issue in its five year SME development Plan. He said that employment generation is the key agenda of present government and SMEDA was toeing this agenda amicably. He hoped that SMEDA’s internship portal will play significant role in this regard. He assured of the fullest cooperation of government to make SMEDA’s efforts successful in achieving its target.

 

Engn. Sohail Lashari, President LCCI, in his address, pledged to extend the whole hearted support of the business community to turn SMEDA’s internship portal into a real success story.

 

Mr. Arif Saeed, former appreciated SMEDA effort and hoped that the newly launched portal would gradually be developed as the most authentic employment source for the SMEs.

 

Vice Chancellor of the Punjab University Dr. Mujahid Kamran expressed gratitude to SMEDA for addressing an acute problem of the graduate students. He assured of his university’s close coordination to avail of the given facility for his students.

 

Earlier, CEO SMEDA Sardar Ahmad Nawaz Sukhera, in his address of welcome, apprised the participants about the five year SME Developed plan evolved by SMEDA. He was confident that the plan would open millions of the job opportunities for youth. He said that employment generation through entrepreneurship development was the main mission of SMEDA, which was being reflected through a number of new initiatives. SMEDA Internship Program, he said, was one of such initiatives.

 

CEO SMEDA told that there were 1,489,093[1] students enrolled in higher education institutions in Pakistan, whereas, the number of students enrolled in technical and vocational institutions in Pakistan during 2010-11, was 314,188[2]. A small number of these students, specifically from business schools manage to get an opportunity to undergo on-job training through internships of 4-6 six weeks; however, the majority of students do not even find such avenues so as to give them exposure to the operational side of businesses and to gain practical experience, he said. On the other hand, there are over 3.2 million SMEs and over 300 public sector organizations that require human resources for their growth and development; that signifies a huge market potential, he added.

 

CEO SMEDA said that the basic objective of SMEDA’s Internship Portal is to obtain demand requirements of the private sector and public sector organizations, and make them available through an e-platform for students. Once the demand is placed at the Portal, the information will be made available to students, who may directly apply for a position of their choice.

 

This is notable that SMEDA Internship Portal is a ‘No Cost’ e-platform for Private and Public sector organization, which provides an opportunity to access a large, diversified HR pool having the required skills, for strengthening their human capital in order to operationalize the Portal, SMEDA is already engaged with Industry, SMEs, Chambers of Commerce and Industry, Trade Associations and Public Sector Organizations to generate internship opportunities .

 

Mr. Adeel Rauf, SMEDA Board Member, Mian Misbahur Rehman and Mr. Farooq Iftikhar also attended the ceremony.

 

[1] Projected on the basis of weighted average growth rate of Students Enrolled in Higher Education Institutions from 2006-2010, Higher Education Commission of Pakistan

[2] National Vocational and Technical Training Commission

Prime Minister's Youth Business Loan Diary Form Loan

 Pre-Feasibility Study
(Dairy Farm)
Small and Medium Enterprises Development Authority
Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
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Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost
December, 2013

Table of Contents
1. DISCLAIMER .................................................................................................................................................. 2
2. PURPOSE OF THE DOCUMENT .................................................................................................................. 3
3. INTRODUCTION TO SMEDA ....................................................................................................................... 3
4. INTRODUCTION TO SCHEME .................................................................................................................... 3
5. EXECUTIVE SUMMARY ............................................................................................................................... 4
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT ................................................................................. 4
7. CRITICAL FACTORS .................................................................................................................................... 4
8. INSTALLED & OPERATIONAL CAPACITIES .......................................................................................... 5
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT ............................................................................... 6
10. POTENTIAL TARGET MARKETS ........................................................................................................ 6
11. PROJECT COST SUMMARY .................................................................................................................. 6
11.1. PROJECT ECONOMICS ............................................................................................................................... 6
11.2. PROJECT FINANCING ................................................................................................................................ 7
11.3. PROJECT COST .......................................................................................................................................... 7
11.4. SPACE REQUIREMENT............................................................................................................................... 7
11.5. MACHINERY AND EQUIPMENT ................................................................................................................... 8
11.6. RAW MATERIAL REQUIREMENT ................................................................................................................ 9
11.7. HUMAN RESOURCE REQUIREMENT ........................................................................................................... 9
11.8. REVENUE GENERATION ............................................................................................................................. 9
12. CONTACTS OF CONSULTANTS AND SUPPLIERS ......................................................................... 10
13. ANNEXURE ............................................................................................................................................. 11
13.1. INCOME STATEMENT ............................................................................................................................... 11
13.2. BALANCE SHEET .................................................................................................................................... 12
13.3. STATEMENT OF CASH FLOW .................................................................................................................... 13
13.4. USEFUL PROJECT MANAGEMENT TIPS .................................................................................................... 14
13.5. USEFUL LINKS ........................................................................................................................................ 14
14. 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

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 dairy farm 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 it’s successful management.
Apart from carefully studying the whole document, one must consider critical
aspects provided later on, which form 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 the 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 Minister’s ‘Youth Business Loan’, 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
Dairy Farm Project pre-feasibility has been developed to attract small investors.
Twelve animals (6 cows and 6 buffaloes) are raised on specific feed to gain high
milk yields. Dairy farming business involves housing, breeding, feeding, watering,
disease control and hygienic production of milk on farm.
A dairy farm with a herd of 12 animals (6 cows and 6 buffaloes) needs a total
investment estimated at Rs. 2.06 million out of which the capital cost of the project
is Rs.1.96 million for animal purchase and building construction. The rest is used to
meet the working capital requirement.
The project is expected to achieve revenue of Rs. 2.10 million in the first year with
projected IRR and Payback of project being 34% and 3.54 years respectively. The
farm will provide employment opportunity to 01 individual other than the owner /
manager. Legal status of the project is proposed as sole proprietorship.
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT
A dairy farm is proposed to be established on a rented land, with a constructed
structure having total area of 3,174 sq.ft. The proposed model involves 12 animals
(6 cows and 6 buffaloes) to achieve milk production of 35,040 liters by the end of
first year. Milk will be primarily sold to bulk buyers at the rate of Rs.60 per liter with
an annual price increase of 10%. However, the farm will also offer sale to domestic
individual consumers.

7. CRITICAL FACTORS
1. Background knowledge and related experience of the entrepreneur in dairy
farm operations.
2. Application of good husbandry practices such as;
• Selection of dairy breed: good local dairy buffalo breeds namely Nili-Ravi
and Kundi and cattle breeds such as Sahiwal, Red Sindhi, Tharparkar
and Cholistani. Crossbred cattle may also be considered as



crossbreeding is recommended for non-descript cattle with semen of
local high producing breeds like Sahiwal, Cholistani, Red Sindhi etc. or
exotic breeds like Holstein Friesian, Jersey etc.
• Selection of good dairy animals with excellent body condition and udder
health: average daily milk production of 10 liters or above for buffaloes
and 12 liters or above for cows in 2nd or 3rd lactation, essentially with no
disease history.
• Housing should be dry, comfortable and airy with proper drainage of
dung, urine and waste material.
• Feeding: Animal should be fed 1 kg of concentrate feed per 3 litres of
milk produced, hence animal with 10 litres of milk production would be
offered 3-3.5 kg of concentrate. Additionally, urea molasses blocks and
salt blocks can help in better milk production.
• Watering: Supply of clean drinking water in clean troughs i.e. 50 to 80
liters of water consumption/animal/day round the clock maintains the milk
production capacity of the animal.
• Breeding: Efficient and timely Artificial Insemination (AI) of good genetic
worth is a key to success in good breeding programs of herd.
• Disease management: Hygienic and clean milking twice a day (morning/
evening) lowers the chances of mastitis as udder health and hygiene is
most important in dairy animals. Follow the recommended vaccination
schedule especially for Foot and Mouth Disease.
• Female calf care and heifer management as it is very important in
maintaining dairy farm production.
• Selection of good productive animals and culling of uneconomical
animal.
• Record keeping for milk production, calving, AI, vaccination etc.
• Proper storage of milk preferably at temperature of 4 Oc and transported
at 11 Oc temperatures.


8. INSTALLED & OPERATIONAL CAPACITIES

Production capacity is based on project size. The Pre-feasibility study suggests
an initial herd size of twelve (12) animals which is economical to justify the
overhead cost. Initially, herd mix of 50% cows and 50% buffaloes is
recommended to obtain maximum milk production round the year. The dairy farm
will have the capacity to produce 35,040 liters of milk per annum.





9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

Dairy farm is a viable business proposition for both rural and peri-urban areas of
Pakistan. There is almost equal demand for milk in both developed and semideveloped
cities across the country, hence, from the demand point of view the said
project offers good investment opportunities for small scale investment in all
provinces of country.

10. POTENTIAL TARGET MARKETS

Domestic consumers, milk processors, dairy companies, milk collection companies
and contractors are the major clients of dairy farms.

11. PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial viability
of dairy farm project under the Prime Minister’s Youth Business Loan. 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 annexure.
11.1. Project Economics
All the figures in the financial model have been calculated for 12 dairy animals
consisting of cows and buffalos in equal proportion.
The following table shows internal rates of return and payback period;
Table 1: Project Economics
Description

Details

 Internal Rate of Return (IRR)

34%

 Payback Period (Year)

3.54

NPV

Rs. 3,631,914



Returns on the scheme and its profitability are highly dependent on the efficiency of
above mentioned critical factors. In case dairy farm project is not able to attain its
target milk production or implement effective husbandry practices, it will not be able
to cover the potential market and recover payments; hence, cost of operating the
business will increase.


 
11.2. Project Financing

Description

Details (Rs.)

Total Equity (10%)

205,696

Bank Loan (90%)

1,851,265

Markup to the Borrower (%age/annum)

8%

Tenure of the Loan (Years)

8

Grace Period (Years)

1



Following table provides details of the equity required and variables related to bank
financing;
Table 2: Project Financing
11.3. Project Cost

Following operational requirements have been identified for the proposed business.
Table 3: Capital Investment for the Project
Capital Investment

Amount (Rs.)

Land

79,752

Building/Infrastructure

210,000

Cows and Buffalos

1,500,000

Machinery & Equipment

66,300

Pre-Operating Costs

100,909

Total Capital Costs

1,956,961

Cash in Hand

100,000

Total Project Cost

2,056,961



11.4. Space Requirement

The area has been calculated on the basis of space requirement for shed area,
open paddock, servant rooms and stores. Following table shows calculations for
project space requirement;

Table 4: Space Requirement
Description

Area Sq.ft

Shed for Cows

600

Open Paddock for Cows

600

Shed for Buffalos

600

Open Paddock for Buffalos

600

Stores for Fodder, Concentrate & Machine

150

Utensils & Milk Storage

150

Servant Room, Washroom

90

Silage Bunker

384

Total

3174




Total investment in building and infrastructure is calculated to be approximately Rs.
0.21 million.

11.5. Machinery and Equipment
Following table provides list of machinery and equipment required for the proposed
dairy farm:
Table 5: List of Machinery and Equipment
Description Unit Rate (Rs.) Qty Cost (Rs.)
Calf Feeder 1,200 3 3,600
Teat Dip Cup 350 2 700
Maize Cutter 20,000 1 20,000
Water Pump 20,000 1 20,000
Freezer 22,000 1 22,000
Total
66,300


In addition to above, other equipment, such as fodder cutter, water pump and some
buckets etc. are required.

11.6. Raw Material Requirement
Following tables show raw material requirement to run the proposed dairy farm;
Table 6: Feeding Requirements for Cows
Description Kgs per animal per day Rs per Kg Amount (Rs.)
Silage 25.00 6.00 150.00
Concentrate 4.62 35.00 161.70
Total 311.70

Table 7: Feeding Requirements for Buffaloes

Description Kgs per animal per day Rs per Kg Amount (Rs.)
Silage 25.00 6.00 150.00
Concentrate 5.00 35.00 175.00
Total 325.00

11.7. Human Resource Requirement
One milkman will be required for milking and taking care of animals, whereas owner
/ manager will look after the overall business operations.


11.8. Revenue Generation
Table 8: Revenue Generation

Description Units Annual
Production
Rate
(Rs/Unit)
Annual Revenue
(Rs)
Milk Sales Liters 35,040 60 2,102,400


12. CONTACTS OF CONSULTANTS AND SUPPLIERS
Table 8: List of Consultants and Suppliers

Consultants Consultants
Dr. M. Sarwar
Dean, Faculty of Animal Husbandry
University of Agriculture, Faisalabad
Ph: +92-41-9920161-70
Prof. Dr. Muhammad Younas
Department of Livestock Management
Faculty of Animal Husbandry
University of Agriculture
Faisalabad, Pakistan
Ph: 041-9200161-170
Dr. Muhammad Abdullah
Dean, Faculty of Animal Production
University of Veterinary & Animal
Sciences, Lahore
Ph: 042 - 99211374
Dr. Nawaz Saeed
Director General (Extension)
Livestock & Dairy Development
Department (L&DD), Govt. Of Punjab, 16-
Cooper Road, Lahore,
Ph: 042-99201117



Feed Suppliers AI / Semen Suppliers
Hi-Tech Feeds,1-A, Shadman Chowk Jail
Road, Lahore Phone : +92-42-37564503
Fax : +92-42-37564508
Al - Haiwan Sires, 5-Km, Pakpattan Road,
Sahiwal, Tel. 040-4501271-72
Doctor’s Dairy Feeds
203/7, UC-3, Cattle colony, Bin Qasim,
Karachi.
Phone: +92-21-5081923-27
Altaf & Co. , Altaf & Co Plaza,16/1,Out Fall
Road, Lahore, Tel: 042-35763411-4,
www.altafandco.com
Alhalal Wanda
Al-Halal Livestock Concern Company
Super High Way Jahania
Tel. 065-2002373
Ghazi Brothers
B-35 KDA Scheme no 1, Mian Muhammad
Shah Road, Karachi.
Phone: 021-4543579, Fax: 021-4543763
ICI Pakistan Cattle Feed
63-Mozang Road Lahore
Tel. 042-36370042
Machinery Suppliers Animal Suppliers
Kurdson Industries
Sabri Road, Angoori Scheme,
Baghbanpura, Lahore
042-36843472
Local Animal Mandies (c/o Provincial
Livestock & Dairy Development
Departments) e.g.,Arifwala, Pakpattan,
Okara, Sargodha, Gujranwala etc.


Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue from sale of milk 2,102,400 2,417,760 2,780,424 3,197,488 3,064,259 3,523,898 3 ,241,986 2,796,213 3,215,645 3,697,992
Other Income - - 72,600 159,720 73,205 161,051 248,019 58,462 128,615 212,215
Total 2,102,400 2,417,760 2,853,024 3,357,208 3,137,464 3,684,949 3 ,490,005 2,854,674 3,344,260 3,910,207
Cost of sales
Cost of goods sold 1 1,394,373 1,533,810 1,687,191 1,855,910 1,701,251 1,871,376 1,646,811 1,358,619 1 ,494,481 1,643,929
Medicine, Vaccination & Insemination Charges 30,600 37,026 44,801 54,210 54,662 66,140 6 4,024 5 8,102 7 0,303 85,067
Operating costs 3 (direct electricity & fuel charges) 120,000 132,000 145,200 159,720 175,692 193,261 212,587 233,846 257,231 282,954
Total cost of sales 1,544,973 1,702,836 1,877,193 2,069,840 1,931,605 2,130,778 1 ,923,422 1 ,650,567 1 ,822,015 2,011,950
Gross Profit 557,427 714,924 975,831 1,287,367 1,205,859 1,554,171 1,566,582 1 ,204,107 1 ,522,245 1,898,257
General administration & selling expenses
Administration expense 240,000 264,000 290,400 319,440 351,384 386,522 4 25,175 4 67,692 514,461 565,907
Depreciation expense 6,630 6,630 6,630 6,630 6,118 6,630 6,630 6,630 6,630 6,630
Amortization of pre-operating costs 10,091 10,091 10,091 10,091 10,091 10,091 10,091 10,091 1 0,091 10,091
Subtotal 256,721 280,721 307,121 336,161 367,592 403,243 4 41,896 484,413 5 31,182 582,628
Operating Income 300,706 434,203 668,710 951,206 838,267 1,150,927 1,124,687 7 19,694 9 91,063 1,315,629
Earnings Before Interest & Taxes 300,706 434,203 668,710 951,206 838,267 1,150,927 1,124,687 719,694 9 91,063 1,315,629
Interest on short term debt - - - - - - - - - -
Interest expense on long term debt (Debt facility : Bank 1) 153,654 140,672 123,609 105,130 85,117 63,443 39,970 1 4,549 - -
Interest expense on long term debt (Debt facility : Bank 2) - - - - - - - - - -
Subtotal 153,654 140,672 123,609 105,130 85,117 63,443 39,970 14,549 - -
Earnings Before Tax 147,052 293,531 545,101 846,077 753,150 1,087,485 1,084,717 705,146 9 91,063 1,315,629
Taxable earnings for the year 147,052 293,531 545,101 846,077 753,150 1,087,485 1,084,717 705,146 991,063 1,315,629
Tax - - 14,510 49,411 35,472 85,623 85,207 3 0,515 71,159 119,844
NET PROFIT/(LOSS) AFTER TAX 147,052 293,531 530,591 796,665 717,678 1,001,862 999,509 6 74,631 9 19,904 1,195,785
13. ANNEXURE
13.1. Income Statement

Balance Sheet
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Current assets
Cash & Bank 100,000 263,773 368,446 707,627 1,329,304 1,837,528 2,658,926 3 ,454,083 3 ,844,248 4 ,852,032 6,184,381
Total Current Assets 100,000 263,773 368,446 707,627 1,329,304 1,837,528 2,658,926 3 ,454,083 3 ,844,248 4 ,852,032 6,184,381
Fixed assets
Land 79,752 79,752 79,752 79,752 79,752 79,752 79,752 7 9,752 7 9,752 7 9,752 79,752
Building/Infrastructure 210,000 210,000 210,000 210,000 249,930 249,930 249,930 2 49,930 2 49,930 2 49,930 249,930
Animals 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1 ,500,000 1 ,500,000 1 ,500,000 1,500,000
Revaluation Surplus/ (loss) - - ( 250,000) ( 250,000) ( 500,000) (750,000) (750,000) (750,000) (750,000) -
Net value of animals 1,500,000 1,500,000 1,500,000 1,250,000 1,250,000 1,000,000 750,000 7 50,000 7 50,000 7 50,000 1,500,000
Machinery & equipment 66,300 59,670 53,040 46,410 39,268 33,150 26,520 1 9,890 1 3,260 6 ,630 -
Total Fixed Assets 1,856,052 1,849,422 1,842,792 1,586,162 1,618,950 1,362,832 1,106,202 1 ,099,572 1 ,092,942 1 ,086,312 1,829,682
Intangible assets
Pre-operation costs 100,909 90,818 80,727 70,636 60,545 50,454 40,364 3 0,273 2 0,182 1 0,091 -
Total Intangible Assets 100,909 90,818 80,727 70,636 60,545 50,454 40,364 3 0,273 2 0,182 1 0,091 -
TOTAL ASSETS 2,056,961 2,204,013 2 ,291,965 2 ,364,425 3 ,008,799 3 ,250,815 3,805,492 4,583,928 4,957,372 5,948,435 8 ,014,063
Current liabilities
Accounts payable - - - - - - - - - -
Total Current Liabilities - - - - - - - - - - -
Other liabilities
Deferred tax - - 14,510 63,922 99,394 185,016 2 70,224 3 00,738 3 71,898 491,742
Long term debt (Debt facility : Bank 1) 1,851,265 1,851,265 1,645,686 1,423,044 1,181,924 920,790 637,982 3 31,702 - - -
Long term debt (Debt facility : Bank 2) - - - - - - - - - - -
Total Long Term Liabilities 1,851,265 1,851,265 1,645,686 1,437,555 1,245,845 1,020,184 822,999 6 01,925 3 00,738 3 71,898 491,742
Shareholders' equity
Paid-up capital 205,696 205,696 205,696 205,696 245,114 245,114 245,114 2 45,114 2 45,114 2 45,114 245,114
Gain/ (Loss) on revaluation of animals - - ( 250,000) ( 250,000) ( 500,000) (750,000) (750,000) (750,000) (750,000) -
Retained earnings 147,052 440,583 971,174 1,767,840 2,485,517 3,487,379 4 ,486,889 5 ,161,520 6 ,081,423 7,277,208
Total Equity 205,696 352,748 646,279 926,870 1,762,953 2,230,631 2,982,493 3 ,982,002 4 ,656,633 5 ,576,537 7,522,322
TOTAL CAPITAL AND LIABILITIES 2,056,961 2,204,013 2 ,291,965 2 ,364,425 3 ,008,799 3 ,250,815 3,805,492 4,583,928 4,957,372 5,948,435 8 ,014,063
Liabilities & Shareholders' Equity
Assets
13.2. Balance Sheet



Cash Flow Statement
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Operating activities
Net profit 147,052 293,531 530,591 796,665 717,678 1,001,862 999,509 674,631 919,904 1,195,785
Add: depreciation expense 6,630 6,630 6,630 6,630 6,118 6,630 6,630 6,630 6,630 6,630
amortization of pre-operating costs 10,091 10,091 10,091 10,091 10,091 10,091 10,091 10,091 10,091 10,091
amortization of training costs - - - - - - - - - -
Deferred income tax - - 14,510 49,411 35,472 85,623 85,207 30,515 71,159 119,844
Raw material inventory - - - - - - - - - - -
Cash provided by operations - 163,773 310,252 561,822 862,798 769,358 1,104,206 1,101,437 721,866 1,007,784 1,332,350
Financing activities
Debt facility : Bank 1 - principal repayment - (205,579) (222,642) (241,121) (261,134) (282,808) (306,281) (331,702) - -
Issuance of shares 205,696 - - - 39,418 - - - - - -
Purchase of (treasury) shares
Cash provided by / (used for) financing activities 2,056,961 - (205,579) (222,642) (201,703) (261,134) (282,808) (306,281) (331,702) - -
Capital expenditure (1,956,961) - - - (39,418) - - - - - -
Cash (used for) / provided by investing activities (1,956,961) - - - (39,418) - - - - - -
NET CASH 100,000 163,773 104,673 339,181 621,677 508,225 821,398 795,157 390,165 1,007,784 1,332,350
13.3. Statement of Cash Flow

13.4. Useful Project Management Tips
Management
• Knowledge of Business Operation: Background knowledge and related
experience of the entrepreneur is an advantage for starting this business.


Marketing
• 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.


13.5. Useful Links
• Prime Minister’s Office, www.pmo.gov.pk
• Government of Pakistan, www.pakistan.gov.pk
• Ministry of Industries & Production, www.moip.gov.pk
• Ministry of National Food Security & Research, www.mnfsr.gov.pk
• Ministry of Education, Training & Standards in Higher Education,
www.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 & Exchange Commission of Pakistan (SECP), www.secp.gov.pk
• Federation of Pakistan Chambers of Commerce and Industry (FPCCI)


www.fpcci.com.pk
• Punjab Board of Investment & Trade (PBIT), 23-Aikman Road, GOR-I, Lahore
Tel. 042-99205201, www.pbit.gop.pk
• Sindh Board of Investment (SBI), 1st Floor, Tower B, Finance & Trade Center,
Shahra-e-Faisal, Karachi, Tel. 021-99207512-4, www.sbi.gos.pk
• State Bank of Pakistan (SBP), www.sbp.org.pk
• National Bank of Pakistan (NBP), www.nbp.com.pk
• First Women Bank Limited (FWBL), www.fwbl.com.pk
• Pakistan Agricultural Research Council (PARC), Islamabad, Tel. 051-9203966
www.parc.gov.pk
• National Agricultural Research Centre (NARC), Islamabad, Tel. 051-9255061,
www.parc.gov.pk
• National Veterinary Laboratory, NARC, Islamabad Tel. 051-9255108



• Balochistan Agricultural Research Centre (BARC), Quetta, Tel: 081-
9213286-7, www.parc.gov.pk
• Southern-zone Agricultural Research Centre (SARC), Karachi, Tel: 021-
99261661, 99261561, www.parc.gov.pk
• Arid Zone Research Institute (AZRI), Bahawalpur, Tel: 0622-876833,
www.parc.gov.pk
• Punjab Livestock & Dairy Development Board (PLDDB), 11- Shami Road, Lahore
Cantt. Tel. 042-36676821, www.plddb.pk
• Faculty of Animal Husbandry, University of Agriculture, Faisalabad,
www.uaf.edu.pk
• Faculty of Veterinary Sciences, University of Agriculture, Faisalabad,
www.uaf.edu.pk
• Faculty of Veterinary and Animal Sciences, Lasbela University of Agriculture,
Water & Marine Sciences, Lasbela, www.luawms.edu.pk
• Faculty of Veterinary Sciences and Animal Husbandry, Sindh Agriculture
University, Tondojam, www.sau.edu.pk
• Gomal College of Veterinary Sciences, Dera Ismail Khan, www.gu.edu.pk
• KPK Agricultural University, Peshawar, www.aup.edu.pk
• Pir Mehr Ali Shah Arid Agricultural University, Rawalpindi, www.uaar.edu.pk
• University College of Veterinary & Animal Sciences, Islamia University
Bahawalpur (IUB), www.iub.edu.pk
• University of Veterinary & Animal Sciences (UVAS), Out Fall Road, Lahore,
www.uvas.edu.pk
• College of Veterinary & Animal Sciences, Jhang,
www.uvas.edu.pk/other_campuses
• Bahauddin Zakariya University (BZU), Multan, www.bzu.edu.pk
• Nestle Sarsabz Training Institute, Renala Khurd, Okara c/o Nestle Lahore, Tel:
0423-111-637-853
• Animal Husbandry In-Service Training Institute (AHITI), Peshawar, Tel. 091-
2960109, 9210309
• Veterinary Research Institute (VRI), Ghazi Road, Lahore Cantt., Tel. 042-
99220140
• Al - Haiwan Sires Training Institute, Jogi Chowk, Sahiwal, Tel. 040-4227196,
4221486, 061-6775708
• Altaf & Co Livestock Training Institute, Altaf & Co Plaza,16/1,Out Fall Road,
Lahore, Tel: 042-35763411-4, www.altafandco.com
• Solve Agri Pak Ltd, F-6/2, Main Link Road, Model Town, Lahore, Tel: 042-
35969602-3 www.solveagripak.com
• Dairy & Rural Development Foundation (DRDF), Lahore,
www.dairyproject.org.pk
• Agribusiness Support Fund (ASF), Lahore, www.asf.org.pk
• Directorate of Livestock Farms, L&DD, Lahore, Tel: 042-99201126-7



• Govt. Livestock Farm (GLF) Kallurkot District Bhakkar, Tel: 0453-200928
• Livestock Experiment Station (LES), Rakh Ghulaman, District Bhakkar, Tel:
0453-446134
• Livestock Experiment Station (LES), Khizarabad, District Sargodha Tel: 048-
3019835
• Research & Development Centre, Rakh Khairewala, District Layyah
• Livestock Experiment Station (LES), Khushab Tel: 0454-215543
• Directorate of Small Holder Dairy Development, Gujranwala, Tel: 055-9200410-
11, 9200194
• Buffalo Research Institute Bhunikey, District Pattoki, Tel: 049-4421887, 4420072
• Livestock Experiment Station (LES), Chak Katora District Bahawalpur, Tel: 062-
2442589
• Livestock Experiment Station (LES), Haroonabad, District Bahawalnagar, Tel:
063-2252960
• Livestock Experiment Station (LES), Dera Chahl Lahore, L&DD, Punjab, Tel:
042-99239818, 99239819
• Directorate of BLPRI, Kherimurat (Attock), L&DD, Punjab, Tel: 057-2213422,
2212130, 2210781
• Directorate of Small Ruminants, Multan, L&DD, Punjab, Tel: 061-9201311
• Research Centre for Conservation of Sahiwal Cattle (RCCSC), Jhang, Tel: 047-
9200329, 9200371, www.rccsc.com.pk
• Directorate of Livestock Training Centre (LSTC), Bahadurnagar, Okara, Tel: 044-
2661393
• Livestock Training Centre (LSTC), Sheikhupura, Tel: 056-9200056
• Livestock & Fisheries Department, Government of Sindh, www.sindh.gov.pk
• Agriculture & Livestock Department, Government of KPK,
www.khyberpakhtunkhwa.gov.pk
• Cattle Breeding & Dairy Farm, Harichand, District Charsadda, KPK, Tel: 091-
6640187
• Buffalo Breeding & Dairy Farm, D.I.Khan, KPK, Tel: 0966-923150
• Livestock Research Station, Jaba, Mansehra, (Jaba Sheep and Goat Farm), Tel:
0997-301866
• Livestock & Dairy Development, Government of Balochistan,
www.balochistan.gov.pk
• Government Dairy Farm Quetta, Tel: 081-9202564
• Bhagnari Cattle Cum Balochi Sheep Farm Usta Muhammad, Dera Allah Yar c/o
L&DD Quetta, Tel: 081-9202564
• Red Sindhi Cattle Farm Hub, Lasbela c/o L&DD Quetta, Tel: 081-9202564
• Govt. Feed Mill Quetta c/o L&DD Quetta, Tel: 081-9202564
• District Government Dairy Farm, Pishin c/o L&DD Quetta, Tel: 081-9202564
• District Government Dairy Farm, Nushki c/o L&DD Quetta, Tel: 081-9202564
• District Government Dairy Farm, Zhob c/o L&DD Quetta, Tel: 081-9202564



• District Government Dairy Farm, Loralai c/o L&DD Quetta, Tel: 081-9202564
• District Government Dairy Farm, Kohlu c/o L&DD Quetta, Tel: 081-9202564
• District Government Dairy Farm, Khuzdar c/o L&DD Quetta, Tel: 081-9202564
• District Government Dairy Farm, Kalat c/o L&DD Quetta, Tel: 081-9202564
• District Government Dairy Farm, Mastung c/o L&DD Quetta, Tel: 081-9202564
• District Government Dairy Farm, Panjgoor c/o L&DD Quetta, Tel: 081-9202564


14. KEY ASSUMPTIONS


Milk Sale Price (cow) Rs.

60

Milk Sale Price (buffalo) Rs.

60

Capacity Utilization (%)

100

Cow: Buffalo Ratio in the Herd

50:50

Purchase Price of a Cow (Rs.)

130,000

Purchase Price of a Buffalo (Rs.)

120,000

Sale Price of a Low Yielder cow (Rs.)

50,000

Sale Price of a Low Yielder buffalo (Rs.)

50,000

Sale Price of one year Male Calf (Rs.)

50,000

Milk Yield per Cow / day (liters)

12

Milk Yield per Buffalo / day (liters)

8