Entrepreneurship Project

ENTREPRENEURSHIP

INTERM ASSIGNMENT

MBA(5) GP- 1

(Evening)

CALIDAD Engineering

SUBMITTED TO:

SIR HUMAYUN SHUJAH

SUBMITTED BY:

FAHIM AFRIDI

1432-310504

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Nature of business:

Fabrication, Manufacturing, Product Development and Reverse Engineering.

Statement of financing needed (Pk. Rs. 10 – 60 Million):

Machines and Equipment Cost: 8 Million

Workshop and Office Building Cost: 5 Million

Inventory Cost: 3 Million

Tooling and Hardware: 1 Million

Running Capital: 2 Million

Office equipment: 1 Million

Statement of confidentiality of report:

The information and data in this business plan are strictly confidential and are supplied on the

understanding that they will be held confidentially and not disclosed to third parties without the

prior written consent.

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Industry Analysis

Macro Environment (Economy, Culture, Technology and Legal):

Economy:

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal

political disputes and low levels of foreign investment. Between 2001-07, however, poverty

levels decreased by 10%, as Islamabad steadily raised development spending. Between 2004-07,

GDP growth in the 5-8% range was spurred by gains in the industrial and service sectors -

despite severe electricity shortfalls - but growth slowed in 2008-09 and unemployment rose.

Inflation remains the top concern among the public, jumping from 7.7% in 2007 to 20.8% in

2008, and 14.2% in 2009. In addition, the Pakistani rupee has depreciated since 2007 as a result

of political and economic instability. The government agreed to an International Monetary Fund

Standby Arrangement in November 2008 in response to a balance of payments crisis, but during

2009 its current account strengthened and foreign exchange reserves stabilized - largely because

of lower oil prices and record remittances from workers abroad. Textiles account for most of

Pakistan's export earnings, but Pakistan's failure to expand a viable export base for other

manufactures have left the country vulnerable to shifts in world demand. Other long term

challenges include expanding investment in education, healthcare, and electricity production, and

reducing dependence on foreign donors.

Although the economy of Pakistan is facing tough conditions but the sector growth is optimistic.

The demand of the Manufacturing the Engineering products are always there both in Private and

Govt. Sector, the military product development process is never ending and innovations always

are in the high end of demand. Since every walk of life is dependent of different engineering

products, so the activity may flow. Although the cost of raw materials and overheads has

increased immensely, and although the power shortfall is being witnessed throughout the

country, it creates opportunities for engineering manufacturing related products. For instance; the

increasing demand of manufacturing the spare parts of Gensets and the accessories.

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Culture:

Pakistan's culture is very diverse. This stems from the fact that what is now Pakistan has in the

past been invaded and occupied by many different peoples, including White Huns, Persians,

Arabs, Turks, Mongols and various Eurasian groups. There are differences in culture among the

different ethnic groups in matters such as dress, food, and religion, especially where indigenous

pre-Islamic customs differ from Islamic practices.

Increasing globalization has increased the influence of Western culture in Pakistan, especially

among the affluent, who have easy access to Western products, television, media, and food.

Many Western food chains have established themselves in Pakistan, and are found in the major

cities. At the same time, there is also a reactionary movement within Pakistan that wants to turn

away from Western influences, and this has manifested itself in a return to more traditional roots,

often conflated with Islam.

Technology:

The Manufacturing business involves the technological aspect quite a large. Engineering

manufacturing heavily depends on the technology available to utilization. When we talk about

this Sector, we require Industrial Technology which means Hi-tech Machines, updating of

existing machines, including new equipments according to the need and the most important the

expertise for such Machines and equipment. The availability of such machines and its substitute

parts is easy and expertise for Industrial Technology is easy to access here in Pakistan.

Accessories are easily available in local market for the production machinery and equipment.

The final Product of Industrial manufacturing itself becomes the inputs for other products of

Technologies.

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Legal:

The Govt. encourages manufacturing industry since they are one of the main consumers of such

products. The product development is one of the major requirements of Govt. to keep the

operations ongoing. The establishing manufacturing industries bring good revenues to govt.

treasures as well. The normal rate of taxes is applied to these industries.

Registrations of Trade Mark: Mandatory for Copy rights

NTN Registration: Mandatory

GST Registration Mandatory

ESSI and EOBI registrations: Mandatory for employees

Specific Industry Environment (Future outlook, Trends of industry, Growth Rate, Govt. Policies

and Competitor Analysis) Direct and Indirect:

Future Outlook:

The prospect of the Industry is enormous and growing. One fine example is of Military

Manufacturing Facilities; if we talk about the manufacturing of AL-Khalid Tanks which is

completed manufacture in Pakistan, there are thousands of components from assemblies and

parts. Later manufacturing of spare parts also possesses great importance. When we talk about

other sectors of the country, all the fields require Engineering Products, for instance Construction

Industry, Cement Plants, Pharmaceuticals Plants need to have such products to accomplish their

Projects and production. Both Fabrication and products are desired by the industries.

Trends of industry:

The trend of the industry moves up wards in recent years. Currently many activities are taking

place in other sectors like construction industry, Military Production, Cement Plants,

Pharmaceuticals Plants, Stone Crushing units and Power houses extensions. Some other mega

projects are also underway like Airport, Dams and Hospitals. Some entities are going for global

operation as well.

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Growth Rate:

The growth of industry in anticipated and the rate of growth is 5 % per year. New Innovation and

Product development is the main focus of the growth.

Govt. Policies

• The recommendations proposed in the SME Policy may be implemented /supported

through an SME Act 2006

• The SME Policy covers measures for promotion of ‘Entrepreneurship Culture’ and

support for growth of existing enterprises

• The SME Policy realizes the different approaches required for supporting Small

Enterprises as opposed to Medium Enterprises. Thus, wherever required,

• Separate policy measures are proposed for small and for medium enterprise growth.

• Women and other marginalized groups are proposed to receive special focus within the

SME Policy.

• SME development offers most viable option for private sector led growth that reduces

poverty and creates a large number of jobs all across Pakistan

• SME development must be at the center stage of all economic growth policies of Pakistan

• SME development in Pakistan will require decisive and concurrent measures in a number

of policy areas such as business regulations, fiscal, trade rules, labour, incentives and

support (Human Resource Development, Technology, Marketing, etc.) leading to an

‘SME Space’ in these domains

• SMEs face inherent disadvantages (because of their size) vis-à-vis large firms, which

need to be offset by government support mechanisms and incentives

• Effective implementation of the Policy framework will require ownership, commitment

and monitoring at highest level of the Government

• SME development requires provision of level playing field for smaller firms vis-à-vis

large enterprises

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• Private sector will be encouraged to play a key role in implementation of the SME Policy

including mobilization of capital and operational responsibility for implementing policy

measures.

• Financial support to enterprises will be, wherever possible, at a collective level, and will

essentially require resource commitment on behalf of the beneficiaries

Competitor Analysis (Direct and Indirect):

The Engineering Product manufacturing is highly Competitive. The manufacturing is a complex

process and every one can not involve in such business unless one has good Knowledge and

committed team. There are many factors involved in to keep one most competitive in the

Industry. The basic factor for the completion is the expertise you have to furnish your product to

the customers, the equipment and Machinery also play equal role for the competitiveness of the

business. When talking about Expertise it means that how much skilled labor is available for

your equipment and their approach towards the problem solution. Highly skilled labor and

Machinist give the edge on others in market.

The Indirect competition is also there in terms of foreign manufacturer/supplier. World has

turned into a Global Village and everyone has access to available information around the globe,

this creates more competition. Chinese manufacturers have many facilities to be competitive;

they have cheap raw material and good expertise along with Hi-Tech Equipment. All the world

tends to buy products from China, the Potential Market here also access these

suppliers/Manufacturers.

The only tool can be used for such competition would be “Time”. We can provide our products

with complete back up support (after Sales Services) and the need of the customer will be

satisfied at the earliest. We can ensure our customers the best products according to the world

standards with competitive prices. Sometimes customers go for the customization of the products

or alterations in ongoing product development, so this can be our area of competitiveness. By

implementing such strategies; the business can be much compatible and can surely compete in

the market.

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Market Segmentation Basis and Identification of Target Market:

The characteristics and need of customer is the basis for the particular segmentation. The

location of Customers is the basic segmentation for the business. There are many industries

which are engaged in manufacturing the consumer products; they consistently require the

engineering products to keep their operation on going. These industries also need some

engineered products for the input of their final finished product.

We will target Manufacturer, Entities engaged in product development and regular production.

Military establishments.

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Description of Venture

Mission Statement:

Providing quality Products and Services to Customer at the optimum cost.

History of venture:

The four Entrepreneurs having different expertise in the respective field has decided to form a

business of Manufacturing. The capital available was gathered for the formulation on larger

entity and to capture the most of the market share.

Location and size of business:

Our business address is Plot 72-B, Main Peshawar Road, Tarnol. Islamabad and it’s a small

medium size business (SME).

Product/Service Details:

a. Precision machining parts (all Metal)

b. Automation of the new/existing machine

c. Fabrication Of CNG Dispenser

d. Fabrication of CNG CASCAD

e. Fabrication of Industrial Racks

f. Fabrication of sound Proof Generator Canopies

g. Manufacturing and Fabrication of Steel Railings

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Service (s):

a. On site Fabrication services includes:

b. Installation of Railing systems

c. Installation of Glass Glazing

d. Installation of Steel Structure

e. Installation of Aluminum Glass Glazing

Office equipment and personnel:

a. MSC Engineers 02 (Operation)

b. BE Engineer 04 (production)

c. Sales and Marketing 04: (sales & Marketing)

d. Software Engineer 01 (Programming)

e. HR/Admin 04: (HR/Admin)

f. Diploma Holders (Supervisor) 05

g. Electrical Technicians 01

h. Skilled Machinists 05

i. Skilled Welders/Fabricators 4

j. Helper 03

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Background of entrepreneurs:

Mr. Awais Kiani has done BBA(hons) in marketing from intercollege larnaca Cyprus and now

doing his MBA in project management from Preston University, Islamabad. He has vast

experience in dealing with engineering firms and suppliers.

Mr. Usman Tahir has done BBA(hons) in HRM from Bahria University Islamabad and now

doing his MBA in Marketing from Preston University Islamabad. He has experience in HRM ,

Marketing & Management.

Mr. Fahim Ullah Afridi has done BBA(hons) in HRM from Sarhad University and now doing his

MBA in Marketing from Preston University Islamabad. He has experience of dealing with clients

and in HRM.

Mr. Raja Danish Nadeem has done BSc from Ajk University and now doing his MBA in

Marketing from Preston University Islamabad. He has experience in marketing products.

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Production Plan

Complete Manufacturing process (self or subcontracted):

1. Machining: Self/Subcontracted

2. Welding: Self

3. Fabrication: Self

4. Forging: Self/Subcontracting

5. Shearing: Self/Subcontracting

6. Bending: Subcontracting

7. Plastic Molding: Subcontracting

8. Dies Casting: Subcontracting

9. Sheet Metal Pressing: Subcontracting

10. Rubber Forming: Subcontracting

11. High Precision Machining: Self/Subcontracting

Physical plant layout:

The production area is 4000 sq. yards and is located in main Peshawar road, Tarnol, Islamabad.

Machinery and equipment (make, model, origin (local/imported), pictures:

a. Heavy Duty Turning Lathe (CNC)

b. Heavy Duty Milling Machine (CNC)

c. Forging Machine

d. Shearing Machine

e. Spot Welding machine

f. Shearing

g. Drilling Machine

h. TIG Welding Machine

i. Electric Arc Welding Machine

j. Tool Grinding Machine

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PNC 1100: Milling Machine

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TL-4 Haas Lathe Machine

TL-1 Haas Turning Lathe

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Milacron arrow 1000

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Herbert Hunt drill Grinder

Millermatic Welding Equipment

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Miller TIG Welding Diversion

Miller Dynasty 350

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Miller X SSW 90382

Details of suppliers of raw materials (names, location and brief information):

a. Malik Steel (Jinnah Road, Rawalpindi): MS Sheets

b. Sohail Brothers (Rawalpindi): MS Rod and thick Plates

c. Sardar Metal (Jinnah Road, Rawalpindi): SS Pipe , SS Sheet, Brass Rods,

Brass sheet, Copper Etc..

d. Amin Brother (Saddar, Rawalpindi): Tooling and Hardware

e. Shaheen Pipe (Gawalmandi, Rawalpindi) MS Pipe Round and Square

f. Ittefaq Steel (Jinnah Road, Rawalpindi) MS angle and channels

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