Auto Brick Business Plan (Business Plan)

TABLE OF CONTENTS SL NO.

SUBJECT

PAGE NO

1.

SUMMARY OF THE PROJECT

1-4

2.

MANAGEMENT ASPECT

5-19

3.

TECHNICAL ASPECT

20-41

4.

FINANCIAL SUMMARY

42-43

5.

SOCIO ECONOMIC ASPECT

6.

MARKETING ASPECT

45-56

7.

FINANCIIAL ANALYSIS

1-31

44

EXECUTIVE SUMMARY 1. Name of the project

: (Fully Automated Bricks Manufacturing)

2. Location of the project

:

3. Registered Office

:

4. Main Partner

:

5. Nature of the project

:

6. Brief Description of the Project: The project envisages setting up of an automatic brick-making factory of Tunnel Kiln technology to manufacture high quality, technically sound and marketable solid bricks. The machine’s manufacturing capacity would be 1,00,000 pcs per day capacity with 8 hours per day and 300 days per year operation capacity. Bangladeshi brick demand is mounting steep day by day parallel to rapid growth of real estate sector of Bangladesh. The project design combines a highly efficient tunnel kiln technology, with a unique technique of forming green bricks: granulated coal is injected for internal combustion. This approach results in lower energy usage, higher quality bricks and reduced pollution. Bricks of any size, shape and pigmentation can be produced at the plant with minor modifications. All bricks will be of uniform quality and will meet international standards for strength, quality and appearance. The sponsors intend to implement the scheme with financial assistance from Bank/Financial institution for acquisition of state of the art capital machinery, operating with efficient and expert management team along with their skilled workforce and a vision to excellence. It is anticipated that the project will go into commercial operation within 12 months from the date of opening of letter of credit. The proposed project, when implemented would fulfill to the following objects:a. Ensure development of new entrepreneur. b. Earn a good return on investment by way of value addition. c. Create a good number of employment opportunities. d. Generate adequate profit for the sponsors. e. Revenue to the national exchequer after expiry of Tax Holiday period of the project.

2

f. Ensure supply of quality products.

8. Total Cost of the Project. SL 01 02 03 04 05 06 07 08 09 10 11

Item Land & Land Development Factory steel structure & Civil Works Machinery & Equipments(Including L/C commission,Inter.freight etc.) Generator 1500KVA Cable, Cable Distribution System Excavator 0.5 cm 2pcs Pay Loader 1.5cm 2pcs Dumping Truck 5 Pcs Sub Station 1500KVA Local Material Furniture, Fixture& vehicles Total

Tk Cost in 000 130,000 47,694 209,576

387,270

9. I) .Means of Finance. (TK.in 000)

Against Total Estimated Cost of the Project

Long-term Loan Bridge Financing Owner's Equity Total

Against Total Cost of Machinery & Equipment

Tk Amount in 000

%

Tk Amount in 000

%

309,816

80%

167,661

80%

0

0%

0

0%

77,454

20%

41,915

20%

387,270

100%

209,576

100%

II) 1st. year

2nd. Year

3rd. year

4th. Year

44,610.49 8,922.10

46,309.36 9,261.87

47,612.29 9,522.46

48,049.56 9,609.91

Total Working Capital Requirement Margin against W/C Finance

3

W/C for Bank Finance

35,688.40

37,047.49

38,089.83

38,439.65

Capacity Utilization

1st. year 95%

2nd. Year 97%

3rd. year 98%

4th. Year 98%

Sales

185,538

197,421

199,920

199,920

Gross Profit

84,367

82,258

81,705

80,543

Operating Profit Net Profit Operating Profit to sales Net profit to sales (%) Investment service coverage

76,663 37,858 41.32% 20.40%

73,979 40,332 37.47% 20.42%

72,899 44,428 36.46% 22.22%

71,170 47,968 35.60% 23.99%

1.08

1.11

1.18

1.25

10. Operating Results: (in 000)

(Time)

10. a) Qty in pc annual, capacity 100,000 daily

Sales:(Net Sales after inventory adjustment Vat payment)

Unit/Price

Total Amount

(In taka)

(Tk.in 000)

6.5

185,250

28,500,000

Total Cost in “000”

Item-wise Unit Cost: Raw Materials Salaries & Wages for Factory Stuff Depreciation Utilities Stores & Spares Repair & Maintenance Tax & Insurance Financial Expense

Pcs Production

60918.75

28500000 2.14

8150.54

28500000 0.29

12863.50

28500000 0.45

25436.25

28500000 0.89

1047.88

28500000 0.04

1286.35

28500000 0.05

2038.10

28500000 0.07

38804.96

28500000 1.36 Total Cost

4

Unit Cost

5.28

11. Break-even- sales

:

TK 113157.11 Tk 118387.63 Tk 112168.50

12. Break-even- capacity of operation:

58 %

13. Internal Rate of Return (IRR)

17.03%

14.

:

58%

55%

Economic Aspects:

 Employment Generation

:

95 Person

 Cost per job created

:

Taka 4076.53 Thousands

 Contribution to GDP

:

Tk 101,273.87 Tk 102,051.36 Tk102,373.62

 Benefit cost ratio

:

1.65

5

MANAGEMENT ASPECTS

Type of the Organization: The organization is a Private Ltd THE PROMOTERS:

The project of………………… has been enlightened and experienced group …..(…..) persons residing at …... They intend to set up a Automatic Brick industry with the financial assistance from any financial institution. A pre-investment Feasibility report to this effect has been prepared about the project design, covering in details of its probable cost, profitability and other relevant aspects especially the, Managing Director and Directors of the company have sufficient business/ industrial experience. It is expected that as the Managing Director have already gathered sufficient knowledge in this line of production system as well as the technology involved in it and marketing approach of the products it will be an extra plus point for managing the project.

The management of the company is vested with Board of Directors of the company. The promoters of the project are as follows: MANAGEMENT ASPECTS BOARD OF DIRECTORS The proposed project will be promoted by the following seven directors. The status and the share of each director are stated below: Name of the Directors

Share Status @100 Tk each share

Share Value in BDT

TOTAL Table 4

6

CORPORATE SET UP

PERSONAL DETAILS AND NET WORTH STATEMENT Personal Details Pic Name

:

Father’s Name

:

Mother’s Name

:

Marital Status

:

Spouse Name

:

Children

:

Address

:

Business Address

:

Present Address

:

Permanent Address

:

7

Education

:

Profession

:

Nationality

:

Date of Birth

:

Age

:

TIN No

:

ID

:

Net Worth Amount in BDT Asset : Land Cash / Equivalent Gold House hold furniture Total Liability Bank Liability Personal Loan and liability Total Net worth (Total Asset- Total Liability)

8

Personal Details

Pic

Name

:

Father’s Name

:

Mother’s Name

:

Marital Status

:

Spouse Name

:

Children

:

Address

:

Business Address

:

Present Address Permanent Address

: :

Education

:

Profession

:

Nationality

:

Date of Birth

:

Age

:

TIN No

:

ID

:

Net Worth Amount in BDT Asset : Land Cash / Equivalent Gold House hold furniture Total Liability Bank Liability Personal Loan and liability Total Net worth (Total Asset- Total Liability)

9

Personal Details Pic Name

:

Father’s Name

:

Mother’s Name

:

Marital Status

:

Spouse Name

:

Children

:

Address

:

Business Address

:

Present Address

:

Permanent Address Education

: :

Profession

:

Nationality

:

Date of Birth

:

Age

:

TIN No

:

ID

:

Net Worth Amount in BDT Asset : Land Cash / Equivalent Gold House hold furniture Total Liability Bank Liability Personal Loan and liability Total Net worth (Total Asset- Total Liability)

10

Personal Details pic Name

:

Father’s Name

:

Mother’s Name

:

Marital Status

:

Spouse Name

:

Children

:

Address

:

Business Address Present Address

: :

Permanent Address Education

: :

Profession

:

Nationality

:

Date of Birth

:

Age

:

TIN No

:

Passport NO

:

Net Worth Amount in BDT Asset : Land Cash / Equivalent Gold House hold furniture Total Liability Bank Liability Personal Loan and liability Total Net worth (Total Asset- Total Liability)

11

Personal Details pic Name

:

Father’s Name

:

Mother’s Name

:

Marital Status

:

Spouse Name

:

Children

:

Address

:

Business Address

:

Present Address

:

Permanent Address

:

Education

:

Profession

:

Nationality

:

Date of Birth

:

Age

:

TIN No

:

Passport

:

Net Worth Amount in BDT Asset : Land Cash / Equivalent Gold House hold furniture Total Liability Bank Liability Personal Loan and liability Total Net worth (Total Asset- Total Liability)

12

Personal Details pic Name

:

Father’s Name

:

Mother’s Name

:

Marital Status

:

Spouse Name

:

Children

:

Address

:

Business Address

:

Present Address

:

Permanent Address

:

Education

:

Profession

:

Date of Birth

:

Age

:

TIN No

:

Passport No

:

Net Worth Amount in BDT Asset : Land Cash / Equivalent Gold House hold furniture Total Liability Bank Liability Personal Loan and liability Total Net worth (Total Asset- Total Liability)

13

Personal Details pic Name

:

Father’s Name

:

Mother’s Name

:

Marital Status

:

Spouse Name

:

Children

:

Address

:

Business Address Present Address

: :

Permanent Address

:

Education

:

Profession

:

Nationality

:

Date of Birth

:

Age

:

TIN No

:

Passport No

:

Net Worth Amount in BDT Asset : Land Cash / Equivalent Gold House hold furniture Total Liability Bank Liability Personal Loan and liability Total Net worth (Total Asset- Total Liability)

14

All these directors who are also holding the directorship of …….……….will add this new line of project ……………….as a sister concern of their group along with their other manufacturing unit. They have long and wide and deep experience in the prominent export oriented business of the country and by virtue of their strong entrepreneurial expertise they would carry on the project to the apex of success. A Total Quality Management approach would assure the fact as they are already an ISO standardized group. Hopefully they would further add greater value to country’s economy and environment by carrying the project rightfully and successfully. The group has a yearly turnover of BDT ………. and asset value of ……….. which is a stunning picture of the group’s immense capacity to successfully glorify in this field.

ORGANIZATION SET UP The overall management of the company would be vested to the board of Directors. The Chairman/Managing Director will be responsible to keep the board and management organized, informed and on task. As a chairman he would be the spokesperson of the company and lead the management and administration of the company under the board policy/guidelines of the board of directors. Besides, the management of the company will be assisted by a team of qualified and experienced professional personnel under the leadership of the Managing Director and the General Manager. He will exercise those powers which will be delegated to him by the board of directors from time to time.

15

ORGANIZATION CHART DESCRIVING ARRANGEMENT FOR MANAGEMENT

Board of Directors

Managing Director

General Manager

General Manager

Accounts Manger Production Manager Extruder

Production Manager

Commercial Manger

Engineer

Mixer M/Operator Supervisor Electrician Machine Operator

Marketing Executive

Junior Executive

Dryer operator Skilled worker

Fire Man

Skilled worker

Un- Skilled worker

Peon/Guard

Un- Skilled worker

16

Guard/Peon

TECHNICAL ASPECTS PRODUCTION PLANNING AND OPERATION TECHNIQUE The project envisages setting up of an automated solid,… hole and…. hole brick and hollow block brick making unit. The demand for building material is increasing day by day, brick is one of the pertinent objects that are of high demand and echo friendly brick making technology is also a burning issue. The sponsors intend to implement the scheme with financial assistance form Bank/ Financial institution with acquisition within 12 months from the date of opening of letter of credit for imported machinery with state of the art technology of higher quality machinery. Total fixed cost of the project has been estimated at BDT ………….. Our chosen technology is Tunnel Klin technology developed in Germany. In addition to kiln efficiency, the process technology employs a direct fuel injection technique to

17

create better thermal bonding and reducing fuel usage and thereby lowers CO 2 and other emissions. The Tunnel kiln can be made from firebricks or from green bricks. In the latter event, the green bricks get “cooked” during kiln operation. The inner kiln lining is made from standard bricks and then plastered over by refractory cement. The firing chamber can be filled manually or automatically with green bricks.12 colum base tunnel kiln usually …………… pcs production per day. The fuel, granulated coal, is fed into the firing zone in the kiln through stoke holes on the roof. Air required for the combustion process is forced from behind; and, as it reaches the line to be fired, it is already preheated from the previous firing zone thus reducing firing time and energy usage. The temperature in the firing zone is about 200-300° C. The process is extremely simple and is carried out manually. In addition to kiln efficiency, green bricks will be injected with pulverized coal, a technique commonly used in China to make bricks. This technique enables improved thermal bonding and reduces fuel usage, and hence CO2 and other emissions. Clay is premixed with granulated coal and then extruded to produce the green bricks. This is a unique process that is fundamental to the energy efficiency achieved in brick making in China. Almost 80% of the total energy required is injected into the bricks and only about 20% is fed externally into the firing chamber. Most of the fuel mixed into the bricks is almost completely burnt during firing. PRODUCTION CAPACITY The annual production capacity of bricks of the project based on two shifts operation of 8 hours each per day and 300 working days in a year and the daily production capacity is 1,00,000 pcs of solid brick. LAND AND LOCATION The project has been proposed to be located in Kapashiya adjacent to Dhaka city connected with good communication from water and road transport mode. The proposed site will be very near to electric power line. The area of land required …….. Bigha The land & land development has been estimated Tk 1300 lac.The land has been selected considering its suitability for setting up such a project. The site has all the logistical support like Power, Water, Drainage and Communication for setting the project having economical labor and raw materials available around the adjacent areas.

18

CIVIL WORKS The entire civil works of the project comprises 9369 smt. in total (Machinery room, Drying room, Tunnel kiln, Civil Construction of shed, Office room, Labor shed, Boundary etc.) constructions; it has been designed and will be supervised by a group of highly qualified Architect and Engineers. IMPORTED MACHINERY For implementation of the scheme, the project will require state of the art capital machinery from renowned Chinese suppliers. It will be a complete set of composition of basic operating machinery (Back process Unit + Baking Unit + Drying Unit) along with supporting unit including of electric cabinet and other supporting machinery and equipment. In selection of machinery, the quality and the cutting edge technology has been given priority. The machinery of the project has been proposed to be imported. The cost of imported machinery has been estimated at BDT 2,09,576 thousands.

MANUFACTURING PROCESS

19

20

21

22

23

24

25

26

27

28

29

30

31

32

Technical Plan flow chart 1、Process Flow Clay Fuel: Coal ↓ ↓ Bulldozer or loading machine Coal crusher ↓ ↓ Box feeder Belt conveyor ↓ ↓ Belt conveyor ←← ←←← ← ← ← ←← ←←← Coal box feeder ↓ Rolling crusher ↓ Belt conveyor ↓ Double shaft mixer ←←← ←←← ←←← ←← Water adding ↓ Belt conveyor ↓ Ageing room for material ↓ Box feeder ↓ Belt conveyor ↓ (Fine pulverizing double-roll grinder) ↓ (Belt conveyor) ↓ ┌→→→→→→→→→ (Intense mixer and extruder) ←←←←←←←←Water adding Belt ↓ Conveyor Belt conveyor for ↓ fault Vacuum extruder ←←←←←←←←←←←←←←Vacuum pump brick ↓ | Column cutter | ↓ └←←←←←←←←←←← Brick cutter ↓ Green brick distributing and transportation machine ↓ Stack green brick to drying car by labor ↓ Hydraulic ferry pusher ↓ Drying car into drying chamber ↓ Drying car’s trailer ↓ (Tunnel kiln) baking ↓ Take out the finished brick from kiln by labor ↓

33

Finished brick yard

Brief description of production Production Timing (Production hour in job process basis): Time Working hours/Year Working days/Year Working hours/Day

Raw material treatment 2400

Molding

Drying

Baking

2400

3600

3600

300 8

300 8

300 12

300 12

Table 4 Clay and coal material prepare and treatment By the Bulldozer or Loader to send the raw clay to the box feeder, the box feeder adopted the valve controller; it can control the feeding quantity according to the requirements. Then, the raw clay through the belt conveyor goes to the rolling crusher for primary pulverizing. Coal will be crushed by the coal crusher and being piled up. Then by labor vehicle or loading machine send the coal to coal feeder, which adopt valve controller, can control the coal feeding quantity according to requirement. Through the belt conveyor, coal powder will go to rolling crusher, together with the clay crushing, coal powder and clay will be mixing primary. After primary pulverizing, the clay will be sent to the double-shaft mixer. By water adding let the clay and the water are completely mixed round and uniformity. The water input quantity in this process will be around 90% of the total water required. Clay after the first time mixing will be sent to the ageing storeroom for 24-72 hours homogenization, which will make the water filter into the clay grains and make them more uniformed. This will improve the finished brick quality a lot. The clay will receive second time smash by the fine pulverizing double roll grinder in order to get the proper grain size. Then clay comes into the intense mixing and extruding machine, by water adding again and mix, extrude, cut up, so that to get a better molding quality.

Molding

34

Moisture content when molding is controlled to 18%-20%.The molding adopts JKR40/40F-25 double stage vacuum extruder. The ready raw material come from the intense mixer and extruding machine through the belt conveyor being sent to the vacuum extruder, the vacuum pump extract the air from the mud material. The vacuum extruder squeeze out the mud material from the extruder mouth then pass the auto column slitter and brick cutter , being cut into the required bricks. In order to let the surface of the brick more beautiful and combine with the mortar more fastness when establish the building, we can add embossing device on the forepart of the column cutter, thus the effectiveness will be better. Drying In order to save energy, reduce the CO2 emission and take full use of the heat, green bricks are dried by the tunnel drying chamber with small size cross section. Heat resource comes from the remaining heat of the Tunnel kiln. Green bricks come from the cutter then being put on the drying cart by man after bricks distributing and transferring machine, and then it will be sent to the drying chamber by the ferry pusher. The structure of the drying chamber is brick-concrete structure. There are heat supply system, adjusting system and humid exhaust system. In order to guarantee the brick’s quality, save coal fuel, we equip the control system temperature-supervise meter. When the heat is not sufficient or coal heat quality below standard, workers can discover in time and adopt measure accordingly, so that this can keep the brick quality steady and prevent the pollution by the leak heat. Take daily production 1,00,000 pcs for example, use tunnel type drying chamber

35

Picture: Clay brick plant show need about 1800m2, but traditional natural drying by sunshine need about 15000m2. So that it save big area of land for green brick drying, improve the worker’s working environment. And the brick production do not affect by the weather, brick’s quality and production quantity are both improved also. Compare to same capacity old type brick factory, it can save about 80% land area for the country.

Baking Dried bricks via the hydraulic ferry pusher are sent to the trail car. Then, the workers push the drying car onto the trail car, and then send to the Tunnel kiln for unloading, stacking and baking. Workers will pick out the dry waste when adobe stacking. The Tunnel kiln is with three centered arch structure. Kiln backing is mainly based on coal powder from outside, assist by the internal combustion. In order to easy control the baking temperature, guarantee finished brick quality, save coal energy, and avoid any additional damage of the kiln and equipment, we equip the temperature test, alarm and protection facility in the Tunnel kiln baking system. This will reduce the baking temperature too high or too low condition happens, prolong the kiln’s working life time, reduce unnecessary economy and energy expense, meanwhile will improve the factory’s work efficiency. Talk about the advantages of

36

Tunnel kiln, first is High energy efficient. Take one million standard brick for example, Tunnel kiln need about 100 ton coals for baking, with energy saving of 50-60% compare to the old technologies. Tunnel kiln require less land area, daily production capacity 300,000pcs’ Tunnel kiln need about 2800-3000m2 lands. Its operation easy, weather proof, the kiln can work whole year-round. Old traditional kiln can only work 5-6month. There are about 14 million hectare of land in Bangladesh, yearly abandon rate for the land is about 8000 hectare. There are over 4000 energy inefficient kilns in Bangladesh, each kiln consuming an average of 240 tons of coal to produce one million bricks. Almost all the coal being used is low-grade coal, each kiln there fore produce 760tones of CO2 per year. Total annual CO2 emissions from the 4000 kilns are, therefore, over 3.0 million tones. Above information shows the old technology kiln with high pollution and high cost of energy. New technology kiln will be beneficial for Bangladesh country.

ECHO FRIENDLINESS & POLLUTION CONTROL

We have adopted the state of the art automatic brick making technology the Tunnel Kiln which is a green technology with energy efficient and environment friendly features introduced by UNDP research in Bangladesh to reduce the pollution. The United Nations Development Program (UNDP) and the Global Environment Facility (GEF) have recently introduced energy efficient, smokeless brick-making technology to curb greenhouse gas emissions in Bangladesh. This new device, known as the Tunnel Kiln, was originally developed in Germany to replace the older, highly pollutant brick-making technology. It was later modified in China and remodeled to accommodate the specific needs of Bangladesh’s brick-making industry. As a result, brick-making technology in Bangladesh is now maximally efficient, eco-friendly and cost-effective. PRODUCTION PLANNING AND OPERATION Raw materials Raw material is clay. No impurity contained and its physical property and chemical composition should meet the baked brick’s requirement. .

37

Products Specification Name Clay brick Table 5

Dimension in inches 10×5×3

Type Solid & Hollow

Power Distribution The project will require a connected load of 1000 KW for production process and domestic use. The Maximum demand would be 1000 KW. Required power will be met from REB. Moreover, the project will procure Diesel generators for supply of power in case of power failure. The cost of generator has been considered with the cost of local machinery. Power

Kwh

Connected Load(KWH)

1000

Maximum Demand(KWH)

1000

Peak Hour

6

Off-Peak Hour

18

Table 6 The power distribution system would require low voltage distribution panel 2sets, QTJ startup cabinet 4sets, Operation box on site 3sets, Cable, electrical wire, tools etc. Water The project will require water pipe and accessories, valves, water tank steel plate, water pump etc. The cost of all these has been incorporated in the local machinery cost.

The Project

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The Proposed project has been designed to manufacture Auto Bricks, Blocks of different kinds/sizes which have wide market demand in the country as well as all over the world.

Production Capacity The annual rated capacity and product mix of the proposed project at 100% capacity utilization based on one shifts Operation per day and 300 working days per year has been given in the following table:

SL.NO. 01

Product Mix

Quantity (In pcs.)

Bricks

30,000,000

Total:

30,000,000

Raw materials Requirement Raw Materials:

39

Unit Price

Total Value

(In Taka)

(TK .in ‘000’)

8.00

240,000

240,000

SL.NO .

Quantity (In Cft.)

Unit Price(Tk.)

Total Amount (Tk.in ‘000,)

Clay

3750 Mt

11,500

43,125

Coal

2,100,000

10

21,000

Item

Total:

64,125

Logistic The project will carry procured raw materials through water and land with relevant mode of transport. And also they would deliver the finished brick by truck. The project would be situated beside river which would be good medium to transport for required clay and coal for production. Workforce The project would require an estimated 95 personnel for its operation. The personnel would comprise of 70 technical workers directly related to automated brickfield operation and 25 personnel for general and administration purpose totaling 95 personnel for the project.

A. TECHNICAL The requirement of technical personnel based on one shift operation per day has been estimated 70 personnel; the allocation of the personnel has been estimated on the basis of labor requirement of each process as below

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Factory Staff: .

(Amount Tk. In 000’) Position

No(s)

Factory Office Staff

10

Machine Room Staff

20

Dryer Staff

10

Klin Staff

30 70

Total

Salary/ Month 8, 444 8, 267 7, 500 8, 041

Total Salary 1,013.28 1,984.08 900.00 2,894.76 6792.12

B .Administrative Staff: SL.NO

Category

No.

Salary/month

Annually Salary (Tk.in’000,)

01. 02 03 04 05 06 07 08 09 10 11

CEO General Manager Manager (Admin & Personnel) Manager ( Marketing) Manager ( Finance & Accounts) Manager ( Commercial) Manager ( Production) Officer Sales & Marking Purchase Officer Stock Officer Commercial Officer Accounts & Finance Officer Asst. Sales Officer Asst. Marketing Officer Asst. Store officer Security inspector Total

1

40000

480

1

30000

360

1

15000

180

1

15000

180

1

15000

180

1

15000

180

1

15000

180

1

10000

120

1

10000

120

1

10000

120

1

10000

120

1

10000

120

1

10000

120

2

10000

240

9

10000

1080

1

10000

120

25

3900

Building and other civil works. To implement the proposed project Pretty Auto Bricks Ltd the sponsors of the project will construct Steel Structured building having measuring areas of …….smt.project will include

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Office building, factory building the total cost of building has been estimated at Tk………lac. The details of which is given below:

SL No 01 01

Items

Specifications

Rate/Smt.

Kiln

02

03 144.35mx 21m =3031sqm.

04

02

Drying Chamber

04

Silo Store & machine Room

05

Total:

Cost Tk. In ‘000’ 05

75mx42m= 3150sqm. 54.5mx58.58m= 3188.25sqm

Machinery and Equipments The cost of the proposed imported & local machinery and equipments of the project has been estimated Tk 209,576 thousands excluding duty, tax, internal freight etc. The details of machinery and equipments have been shown in the quotations enclosed here with.

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Land and Location The project will be located on a plot of land measuring …… Bigha at Kapashia,Gazipur, The cost of land is Tk. 130,000 thousands including registration, land development cost etc. The area of land is considered adequate for accommodating the present physical facilities of the project as well as its future expansion. The location of the project situated for the implementation of its functional operations since the necessary infrastructural facilities liked road, communications, power (Electricity supply) Gas, water supply together with the requisite manpower. Raw materials procurement & products/ services marketing facilities are available there. The location being within Gazipur industrial belt is very easily accessible by road transport without any inconvenience. The project location will enable the infrastructural provisions & electricity service connections to be effected ready at reasonable costs, thereby effecting economization in the project investment cost. Since, the project location is situated within Gazipur industrial belt, it is expected there shall be an adequate supply of locally available necessary factory workers & skilled technicians for the project.

Erection and Installation Erection and installation of machinery will be done by experts. An amount of Tk. ……..lac has been estimated for this purpose.

Furniture and Fixture& Vehicles Furniture, Fixture and vehicles of the project has been estimated at Tk…… lac. Internal Freight. An amount of Tk……. lac has been estimated for both imported and local machinery to reach the project site.

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Utilities I. Water: Water will be required the cost of which has been in corporate in the local machinery cost as Tk….. lac. Fuel and gas Tk 375,000 thousands.

ii. Electricity The total electricity to be required for the project has been estimated at 1000 kw at 100% capacity and it will get from Power Development Board. The related cost has been estimated at Tk 11 per unit.

Repair and Maintenance The cost of repair and maintenance for machinery has been estimated @ 0.5%,1% & 1.5% and onwards of it’s of machinery and equipments in 1st, 2nd, 3rd and subsequent years of operation.

Stores & Spares The stores & spares of machinery to be required has been estimated @ 0.5%,1% & 1.5% and onwards of its cost of machinery and equipments in 1st, 2nd, 3rd and subsequent years of operation

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FINANCIAL SUMMARY

Financial Evaluation The Profitability analysis on the proposed Project has been computed for 10 years of operation to assess the financial viability of the project. The financial projection that has been made includes estimate of sales, cost of goods sold, administrative and general expenses. The consolidated statement showing the result of the project in the earning fore cast statement at Annexure-iii

Assumption underlying the financial projections A. The capacity of the project is projected to be 95%, 97%, 98% of the rated capacity in the 1st three years and onwards. B. The cost of other accessories have been kept constant throughout the period on the assumption that increase in raw materials will be offset by increase in selling price of products. C. The rates of depreciation / amortization of various assets of the project are considered as normal rate that prevails in the industrial sector. D. Insurance premium is to be charged at 0.50% of the cost of the fixed assets and raw materials stocks. E.

Other expenses viz.power, fuel & lubricants etc. Are charged as per prevailing market price.

F. General and administrative expenses are estimated as per prevailing market price. G. Tax-Holiday for the project has been estimated to be 5 years.

Debt Service Coverage Ratio (DSCR) The details debt service coverage ratio may be seen at Annexure-x.

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Break-Even- Analysis The break-even- analysis has been carried out on the basis of cost & sales of projected operation. The project is expected to be break-even- at 58% of the rated capacity. The details of break-even- analysis has been given at annexure- xvii.

Cash flow statement The projected earning forecast statement indicates that the project will have sufficient fund generation at the end of the year. The project will be able to all its operational expenses, repay its debt obligation, provides substantial returns to the sponsors and build a reasonable reserve. The detailed of cash flow may be seen at Annexure-xi. Projected Balance sheet The projected balance sheet also shows that the project will be able to maintain health liquidity throughout the operational life. The derails of Balance sheet may be seen at Annexure-xii.

Internal are Rate of Return The internal rate of return has been computed following the DCF technique. The details are given in Annexure-xv.

Investment Period The investment period has been considered 7 years.

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SOCIO-ECONOMIC ASPECTS

Employment Generation: The project after implementation will create employment opportunity for 70 persons and the cost per job created will be Tk 4076.53 Thousands ADDITIONAL EMPLOYMENT GENERATION AND LABOUR INTENSITY : The proposed project expects to provide permanent employment throughout the year. Workers, Technicians, administrative and commercial staffs and effect payment of Tk. 187,88.20 thousands annually in the 5th year of projected operation to them in the form of wages and salaries. This will marginally alleviate the local unemployment situation and the employees again a livelihood for themselves and their families, besides, this, the proposed project will create huge indirect employment.

CONCLUSION As evaluation of the Socio-economic, Private & national benefits, which expected to accrue from the implementation of this project & continuous execution of its operational activities will easily highlight the rational & economic justification of establishing this unit. The Project is expected to generate very substantial financial returns for the promoters, all method of project appraisal & analysis, financial, management & economic evaluation justify the establishment & implementation of this unit. The unit will be able to pay to pay income tax, after expiry of tax holiday period. Such levies & taxes will help to enhance the Governments funds, available for public sector development expenditure.

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MARKETING ASPECT

Marketing Aspect: . Objective: The objective of this market study is to examine and investigate into demand pattern, sources and uses of Tiles, Bricks .The proposed project will be set-up for manufacturing of different sizes and types bricks. Brick has employed by most cultures through the ages to build everything from temples to castle, cottages to factories - even the “Great Wall” of China. Favored for its versatility and the readily raw material from which bricks are fashioned, clay, many ancient buildings such as those built by Romans still stand today!

MARKETING ASPECTS: INTRODUCTION: Modern development process has come to produce rapid urban growth. Hence one of the objectives of planned development is to improve the physical conditioning of living such as housing and water supply. But as people aspire for comfort rural community also needs to have access to such basic facilities of life. In fact poor countries have come to be regarded as rural slums and the rural to urban migration is an attempt to escape it. The program of development of physical infrastructure, therefore, covers both urban and rural communities in public and private sectors. The program consists of development of housing office and commercial buildings, site development for private housing, office & commercial buildings, city roads etc. In the Five years plan rather a comprehensive approach was for the first time taken to bring development to the door of people and steam urban migration. This consisted of the

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government policy of decentralization of administration and acceleration of development activities at upzilla level. This policy will require creation of necessary physical infrastructures there within the frame work of national physical plan and the demand for construction materials like bricks etc. will also increase. APPLICATION OF PRODUCTS / SERVICES: The Products of the project will be automatic bricks, to be produced from local clay. Automatic bricks have comparative advantage over hand made bricks in respect of unit price, size/smoothness in surface, bright in color hardness in strength and cheaper as compared to hand made bricks being produced by the brick fields situated in the rural areas. the initial cost of this type of project though high but the over –head working cost is less. As such this type of project can supply bricks at a relatively cheaper price. Furthermore it can cater to the large volume of Government/private institutions/organizations place orders. It may be mentioned here that some times various public works are interrupted due to shortage of bricks. This type of project of implemented may be able to solve this problem. Bricks are mainly used in constructing houses roads and bridges. Bangladesh is a developing economy and from 1976 onward the economy is striving forward, in both public and private sectors. With the development of trade and industry and overall expansion of the economy, construction sector has also exhibited considerable growth. It has already been mentioned here that bricks are mostly used in the construction of houses apartments, roads and bridges. Besides the private housing sector, the major users of bricks are the various governments. Semi-government and autonomous organization of which the following deserve special mention

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a) Public works department b) Roads and Highways c) Water and power Development d) Public health Engineering: e) Rural Electrification f) Pourashavas and others: g) Zilla parishad (i) Thanas h) Titas Gas etc.

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TARGET MARKET –EXPORT: Besides export potentiality, the aforesaid products will be marketed locally, as usual practices that prevail in the country.

PROSPECTIVE BUYERS OF BRICKS IN REAL ESTATE SECTOR: Besides, Prospective buyers of other sectors there are a good number of property developers are registered with REAL ESTATE AND HOUSING ASSOCIATION OF BANGADESH (REHAB). Out of which the largest/ medium standard, property developers who are regularly develop commercial space and apartment project is shown in TABLE-1

TABLE-1

LARGEST/MEDIUM STANDARD PROPERTY DEVELOPERS IN DHAKA CITY Sl. no 01

02 03 04 105 06 07

Name & Address ABC REAL ESTATES LTD. ABC (6th F1) 8, Kamal ataturk Avenue Banani C/A, Dhaka-1213. ADVANCED DEVELOPMENT CONSULTANTS LTD. House-15, Road-11/1, Block-B Banani C/A, Dhaka-1213. ADVANCED DEVELOPMENT TECHNOLOGIES 176, Gulshan Avenue North Gulshan, Dhaka-1212. AMIN MOHAMMAD FOUNDATION LTD. 764,Satmasjid Road, Amin Chamber Dhanmondi Dhaka. ASSETS DEVELOPMENT & HOLDING LTD. House -29, Road-39, Gulshan, Dhaka-1212. ATLANTIC DEVELOPMENT LTD. 168, Elephant Road (2nd F1) Dhanmondi Dhaka. BORAK REAL ESTATE (PVT) LTD.

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Large/Medium standard Medium

Large Large Large Large Medium

08 09 10 11 12 13 14

15 16 17 18 19 20 21 22 23

UTC Building, Level-5 8 Panthapath, Dhaka-1205 BUILDING DEVELOPMENT & DESINGN LTD. 36,Topkhana Road (2nd F1) Dhaka-1000. BUILDING TECHNOLOGIES & IDEAS LTD. Road-113/A, Plot No.3 & 5 Gulshan, Dhaka-1212 CONCORD REAL ESTATE & BUILDING PRODUCT LTD. 8, Mohakhali C/A, Dhaka DOM –INNO DEVELOPMENTS LTD. House-49, Road -17 Banani, Dhaka. EAST WEST PROPERTY DEVELOPMENT (PVT)LTD. 195, Motijheel C/A, (13th F1),Dhaka ESTERN HOUSING LTD. Islam Chamber (6th F1) 125/A Motijheel C/A, Dhaka. GREEN DELTA HOUSING & DEVELOPMENT (PVT) LTD. Meherba plaza (11th F1) 33, Topkhana Road, Dhaka-1000. MEGA BUILDERS LTD. 42, Satmosjid Road (2nd F1) Dhanmondi, Dhaka. NAGAR HOME 227, Lake Road, New DOHS, Mohakhali, Dhaka-1213 NAVANA REAL ESTATE LTD. House-35, Road-9A (New) Dhanmondi, Dhaka. PROPERTY DEVELOPMENT LTD. 12, R.K. Mision Road, GPO Box -83, Dhaka1212 RUPAYAN HOUSING ESTATE LTD. 72, Mohakhali C/A, Dhaka1212 SHELTECH (PVT.) LTD 122/1, Kakrail Road (3rd F1) Dhaka-1000. SUVASTU DEVELOPMETN LTD. 69/1, Panthapath, Dhaka. THE STRUCTURAL ENGINEERS LTD. 29/1 West panthapath Dhaka-1205 URBAN DESIGN & DEVELOPMENT LTD. House-68 Road -6/A Dhanmondi R/A, Dhaka.

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Medium Medium Large Large

Large Large Medium

Medium Medium

Medium Large Medium Large Large Large Medium

DEMAND/SUPPLY ANALYSIS (AUTOMATIC BRICKS): DEMAND ANALYSIS AT MICRO LEVEL: Bricks are heavy in weight and cannot be transported easily and cheaply to any long distance. Therefore, bricks and like designed ceramic bricks are sometimes brought in form distant places The plant under consideration will be located at Keranigonj and is expected to supply bricks to various parts of Dhaka, Manikganj and Gazipur District.The demand for bricks depends on the number on additional brick built houses As per census 1991 total household in Dhaka and Gazipur District stood at 125,487 of which about 50 & a/ has been assumed to be pucca houses . on the basis of the growth date of 5% per annum, the projected number of pucca houses has been estimated and is shown in Table –11

Table –11 ESTIMATED NUMBER OF PUCCA HOUSES

Year

No. of Houses 1,017,942 1,053,043 1,088,144 1,123,245 1,158,346 1,193,447 1,228,548

1999 2000 2001 2002 2003 2004 2005

It appears from table -111 that the additional number of pucca houses in Dhaka District will rise from 35101 Nos. on an average per annum. Assuming that each pucca house requires

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about 40,000 bricks on an average, the total number

of bricks to be required for the

additional pucca houses has been worked out 140 .40 crore. In addition to the demand for bricks in the private sector, huge demand for bricks comes from the real estate developers for construction of multistoried apartment/ commercial complexes. The apartment project was started in late 70’s in Dhaka city. Ispahani Group is the pioneer in this sector. But in early 80’s with the inception of Eastern housing Ltd. the business stared flourishing. Now this is a booming sector of the economy. A good number of real estate developers are now active in this business. During the last decade apartment project has got tremendous progress. World bank estimated the demand for housing in urban areas of Dhaka, Chittagong and Khulna for the period 1980 and 2000 as detailed in Table -111

Table -111 DEMAND FOR HOUSING Item

1980 Population

Dhaka Cittagong Khulna Total:

35 14 07 56

No.of Houses 05 02 01 08

2000 Population 93 40 23 156

No.of Houses 17 07 04 28

Demand for Housing 12 05 03 20

b/ Bangladesh urban Sector Memorandum, May, 1981 world Bank. The study shows that annually the number of houses required to be built in Dhaka comes to 60,000 units which is likely to be 12 times higher than the number of actual unit constituted per year. Assuming 40,000 Nos. of Bricks per house the total number of bricks to be required for apartment project comes to 800, 00 crore pcs. In addition to the residential household, various Government departments and agencies are using bricks. Empirical observation reveals that their requirement for bricks would not exceed 10% of the bricks required by household. Hence the total requirement for brick in both public and private sector would be as shown in Table-1V.

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Table-1V. TOTAL REQUIREMENT OF BRICKS Category

Demand in million Nos. 1,404 8,000 940 10,344

Household Apartment Government

It appears from Table – 1V. that annual requirement of bricks would be about 130 44 million Nos. EXISTING SUPPLY: At present the supply of bricks mostly comes from a bricks fields which produce bricks of inferior quality which are being sold at a higher price. Due to non- existence of adequate number of automatic brick manufacturing plant in the area, the household users and the government and private institutional users are to use mostly this grade of brick to meet their demand. As such the brick fields will not be the competitor of automatic brick plant rather he automatic brick plant will have comparative advantage over fields in respect of quality and price. MARKET SHARE: To what extent the proposed project will be able to win over the users by way of creating a market share for the product will depend on the efficiency of the sponsors to handle appropriate marketing strategies in the form of determination of product pricing, procurement of raw materials, maintenance of product quality adoption of promotional measures etc. so long as the sponsors of the project will be able to adopt suitable and appropriate marketing strategies it will create effective demand for the product.

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QUALITY: Maintenance of quality of bricks is considered to be one of the determinants for the successful marketing of the product. To have better market the quality of the product must be ensured otherwise it may not be able to compete in the local market. The users/ consumers for brick generally look forward to the following properties in bricks: -Proper size and thickness -Bright colour: -Smoothness of surface: -Strength: To maintain the above qualities, the project is required to be equipped with automatic machinery to be handled with efficient personnel. Since the project will be equipped with automatic machinery, it is expected that it will be able to produce quality bricks as per the requirement /standard of the users/consumers. OUT PUT PRICING: Next to product quality, determination of product pricing plays an important role in achieving the market share for the project. The prices of the product must be competitive to create a market share in the domestic market. To be competitive, the selling prices of bricks should be determined in such a way that it remains at per within the prevailing price structure. Otherwise it may be difficult for the project to sell their output in the domestic market if the prices are not maintained at a competitive level. The sponsors of the project are also required to adjust selling prices are not maintained at a competitive level. The sponsors of the project are also required to adjust selling prices form time to time with the changing prices of other existing units. Bricks to be produced from automatic machine being lower in respect of prices the project may able to enjoy a price advantage and to occupy a major share for his product

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AVAILABILITY AND PROCUREMENT OF RAW MATERIALS The basic raw material for use in the plant the sponsors of the project have managed to procure clay from local sources. Gas is an imported item and will be available form Titas Gas Transmission and Distribution Company Ltd. The project will not suffer or the production will not be interrupted /stopped due to shortage of raw materials. The sponsors of the project will be able to maintain the continuous flow of adequate quantum of raw materials for the project, so that the production is kept at regular and continuous level. PROPOSED MARKETING / DISTRIBUTION ARRANGEMENTS: The products of the project would be supplied to the market through the wholesalers / Distributors at manufacturer’s cost according to their order / direct sales from factory

and

from their own sales center, Dhaka. Retailers would get supply from the wholesale market / manufacturers sales Center / Factory. A Schematic diagram of the distribution channel has been shown as follows:

Table – V Channels of Distribution

Producers

Distributors / Agents / Wholesalers Retailers / Sales Centre

Consumers

PRICE COMPETITIVENESS: Much attention has been given of the pricing of the products. For such products, product quality and the price has equal role in penetrating in to the market. Depending on the cost of raw materials and other inputs required for production, selling price for the products

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proposed by the unit has been suggested. Special attention has been given to keep the price at a lower side in comparison to the existing market price.

The proposed price languish the existing Ex-Factory price may be stated in the following

Table – V1. Table – V1. PRICING OF THE PRODUCTS

Particulars

Ex-Factory Price

a) Solid Bricks (9.75”×4.75” ×2.75” various Types)

Proposed Ex-Factory Price 8.00/Pc

SALES PROMOTIONAL ASPECTS : Sales Promotion in our country are being done through advertising on the nature of products. For these products advertising has been proposed. Since the sponsors are having personal contacts in the wholesale market they with depend on personal selling approach as means of products promotion. To create mass awareness the proposed project is having a loan to advertise their product rough Radio, Television, Paper, Stickers, Calendars etc. after going in to commercial production.

CONCLUSION: A detailed analysis and evaluation, of the existing and projected worldwide market demand, producers and consumers, multiplicity of usage’s economic competitiveness and assessments of other relevant factors, considerations and criteria will reveal that the project’s success potentials is indeed present and that its future is optimistic.

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