Housing Construction Company

7/23/2019 Housing Construction Company

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Submitted to:

Sir Rana Yasir

Submitted by:

Class:

BBA II

LETTER OF AUTHORIZATIO



Dear Reader,

I have been authorized by Mr. Rana Yasir to write a term report on the

marketing plan of the virtual launch of a new ousing !onstruction !ompany.

"his report deals with the launch of the ousing !onstruction !ompany, while

discussing the core concepts of marketing and applying them to the real world ."his

pro#ect report has given us the knowledge of the concepts, which were discussed

during the lectures by my respected teacher. "he report has been supported with valid

information, consisting of data being gathered through the ideal process of

interviewing ousing !onstruction companies and potential customers.

$incerely,

Contents

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&. Introduction'''''''''''''''''''.(

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!" Introdu#tion

!"! $eneral Brie%

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ousing !onstruction !ompany is gaining popularity in )akistan. "his sector is

attracting not #ust men but a lot of women into this business as well. ?omen are

entering this field, thinking it is an easy and part time business. <ut once they are

engaged in this work, they realize that it is a full time #ob.

1lthough a ousing !onstruction !ompanyfarm is a profitable and attractive venture,

the grower is still not rewarded properly in financial terms for his@her work. ither the

middleman or the shopkeepers make the profit. $hopkeepers en#oy the maAimum

margin.

"his preBfeasibility is being prepared by and is intended to provide general

information on the opportunity for an investor in the floricultural sector to establish a

backed by his own ousing !onstruction !ompany. "his would maAimize the profits

for the investor and make the product value added when sold on the shop as flower

basket, bouCuet, and bunch.

!"& 'ro(e#t Rationale

ousing !onstruction !ompany is a reasonably sound and paying business if

conducted in a proper way and on a proper scale. Demand for 1nimal -eed Mills is

growing tremendously as more and more people are becoming aware of the beauty of

flowers as decorative items. ?eddings, birthday parties, seminars, and other such

social gathering events are incomplete without floral decorations.

1 pro#ect that envisages one in 2ahore backed with two farms, one in the

outskirts of 2ahore and other in Murree ills, seems unreasonable as far as capitalinvestment is concerned, and unmanageable as far as geographic locations are

concerned.

<ut when we check the concept on business level, not only the pro#ect becomes

viable, but also the financial returns make it highly attractive. *nfulfilled demand in

posh localities of the city, easy availability of shops, easy availability of leased land,

year round demand and high profit margins are some of the factors that convince an

investor to come into this business.

& 'UR'OSE OF THE )OCU*ET

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"he ob#ective of the preBfeasibility study is primarily to facilitate potential

entrepreneurs to facilitate investment and provide an overview about housing

construction business. "he pro#ect preBfeasibility may form the basis of an important

investment decision and in order to serve this ob#ective, the document covers various

aspects of housing construction business concept development, startBup, production,

marketing, finance and business management. "he document also provides sectoralinformation, brief on government policies and international scenario, which have

some bearing on the pro#ect itself.

"his particular preBfeasibility is regarding ousing construction !ompanyE which

comes under !onstruction and Real stateE sector.

+ CRUCIAL FACTORS , STE'S I )ECISIO*A-I$

FOR I.EST*ET

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ousing can play a significant role in the economic growth of our country, as a source

of #obs and capital investment, as a secure vehicle for individual and family savings,

and as an essential contributor to personal happiness. $o before making any

investment decision, it is advisable to evaluate the associated risk factors by taking

into consideration certain key elements. "hese may include availability of resources,academic knowledge, and specific managerial and technical skill set.

"he development of a vibrant housing industry is based on an ample supply of

affordable land, with easy access to transportation and efficient distribution of

necessities such as energy and water.

+n the other hand a demand driver may be the desire of many families to modernize,

enlarge or otherwise renovate their homes. "his has been an important part of the

housing culture for many decades.

-inancial institutions are an important partner in the housing sector. "o broaden theconsumer base for home ownership, especially among lower income families, the

financial sector is greatly assisted by banks and financial institutions. -or the housing

industry, a well trained work force is essential. 1n added advantage for )akistani

housing industry is that skilled labour is available at fairly cheap rate.

/ 'RO0ECT 'ROFILE

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/"! O11ortunity Rationale

ousing is one of the basic human reCuirements, as every family needs a roof.

)roviding shelter to every family has become a ma#or issue as a result of rapid

urbanization and higher population growth. +n the other hand, the provision of house

has not kept pace with the above phenomenon and resulted in the deterioration ofliving condition, increased health hazarded and rapid growth of slums and sCuatter

settlements F4atchi 1badiesG. "he improvement of slums and katchi abadies and

provision of affordable housing to shelterless population will not only help alleviate

the urban and rural poverty but also increase the productivity of the low income

population through improved public health. "he present 5overnment is committed to

give priority to housing sector and has demonstrated its commitment by allocating

significant resources for its accelerated development, which would contribute to the

economy in the form of additional employment and support 0> H (> allied industries.

"he multiple effects of the housing and construction sector have the potential to create

maAimum employment opportunities besides generating industrial, commerce and

trade activities.

/"& 'ro(e#t Brie%

"he pro#ect under consideration will be for construction of residential houses of /

Marla F&,&%/ sC. ft.G, 9 Marla F&,/9/ sC. ft.G and &> Marla F%,%/> sC. ft.G within the

proposed locations. "he proposed sites for the construction are 8+1R "+?,

?1)D1 "+? and 612!I1 +*$I5 $+!I"Y.

/"+ *ar2et Entry Timin3

"hough the construction work is not dependent on the time but, as per industry norm,

the ideal timing for housing construction is from May to 8un and then from $eptember

to ovember. "he reason is rainy season during 8uly and 1ugust which causes delays

in construction process. During December to -ebruary the labour is mostly migrated

to rural areas for crop harvest. During harvest season labour is paid more in rural

areas this causes shortage of labour and conseCuently rise in daily wages.

/"/ 'ro1osed Business Le3al Status

"he proposed legal structure of the business entity is either sole proprietorship or

partnership. 1lthough selection totally depends upon the choice of the entrepreneur but this financial feasibility is based on a $ole )roprietorship.

/"4 'ro(e#t Ca1a#ity and Rationale

"he proposed pro#ect size is simultaneous construction of two houses at nearby

locations. "his will provide the minimum feasible size for the pro#ect and minimum

capital outlay for pro#ect initiation.

/"5 'ro(e#t In6estment

9



"he total cost of the pro#ect is Rs.7.:>0million.

/"7 'ro1osed Lo#ation

"he proposed locations for the construction of houses are as follows

• 0o8ar To9n

• A')A To9n

• .alen#ia To9n

/"; -ey Su##ess Fa#tors<'ra#ti#al Ti1s %or Su##ess

"he key success factors for housing !onstruction !ompany are careful selection of

construction site and a good architecture. "he investment in good construction

material and efficient use of labour are also very crucial. In short Cuality pays in the

long run.

/"= Strate3i# Re#ommendations

• "he construction industry is only profitable if the pro#ects are completed in

time.

• =uality of materials used ensures Cuality of houses built. $uperior Cuality is

the best competitive advantage these days.

• !areful selection of residential area counts towards selling price and timely

sales

• "he investment in good architectural design is worth it. 1 good look is the first

thing buyers would be looking for at the first place.

4 SECTOR , I)USTRYAALYSIS

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4"! Se#tor C8ara#teristi#s

"he construction sector in )akistan today is still at low ebb. "his can be #udged from

the fact that per capita consumption of cement in )akistan is one of the lowest among

the developing countries i.e. 9> kgs. ?ith public spending on the decline and most

pro#ects being funded under loans from international agencies, the fate of construction

sector seems to be hanging in balance. "his sector has a big vacuum in the market and

a lot has to be done yet.

4"& Sub se#tor In%ormation

1ccording to the latest available census of &::;, the total number of housing units,

throughout the country, was &:.0 million, 79.9 per cent housing was in rural areas and

0%.0 per cent in urban areas. "he overall housing stock comprised 0: per cent kucha

houses, (> per cent semiBpukka houses and %& per cent pukka houses. "he housing backlog, as estimated according to the &::; census, was (.0 million units. "he annual

additional reCuirement is estimated around />>,>>> housing units whereas the annual

production is estimated around 0>>,>>> housing units resulting in a recurring backlog

of %9>,>>> housing units annually. "he household size is 7.7 persons and the

occupancy per room is 0.0 persons. It is estimated that to make up the backlog and to

meet the shortfall in the neAt %> years, the overall housing production has to be raised

to />>,>>> housing units annually. "he usual privileges, concessions, eAemptions and

remissions have become applicable to this industry in accordance with the <oard of

Investment policy.

F Pakistan & Gulf Economist G.

"he construction sector registered a growth rate of 9.: percent against a target of /.(

percent and last years growth of 0.& percent. ousing and construction has been

identified as one of the ma#or drivers of growth and the government has taken various

budgetary and nonBbudgetary measures to boost this sector which has responded

positively despite higher input prices.

5.2.1 Government Policy Direction

!onstruction industry alone provides impetus to over (% other industries. 1s the

5overnment of )akistan aims at alleviating poverty and improving revenue collection,a focused attention to this industry can help in achieving both the ob#ectives. +n the

one hand it has the potential to offer new #ob opportunities and, on the other hand,

enhance revenue collection from other industries. Realizing this fact the 5overnment

of )akistan has took a number of measures for reviving the housing and construction

sector, which has been declared a priority industry.

• "he government has announced various incentives in the ational ousing

)olicy for providing affordable housing for the poor. 1 rapid growth in

housing finance will significantly contribute to the economy in the form of

additional employment and support a variety of allied industries.

:



• "hese measures includeJ the improvement in the availability of housing

finance by encouraging commercial banks to eAtend housing loans, the

reduction in interest rates from &9B&;K to 9./ to ;./K, streamlining of the

legal frame work for loan recovery of financial institutions, and the

enhancement of bank eAposure to housing finance from /K to &>K of net

advances.• "he maAimum housing loans per party limit has been increased from Rs./

million to Rs.&>.> million and the maAimum debtBeCuity increased from 9>L0>

to ;/L&/. "he maAimum loan tenure for housing finance has been increased

from &/ to %> years and the maAimum limit of lending for <-! has been

increased from Rs.%> million to Rs./> million.

• In the fiscal area, the measures taken include the enhancement of "aA credits

on borrowing under housing loans from financial institutions from

Rs.&>>,>>>@B or %/K of the income of the mortgager, to Rs./>>,>>>@B or (>K

of the income of the mortgager, whichever is less. "he limit of property

income for withholding taA has been raised from Rs.&>>,>>>@B to Rs.%>>,>>>@B."he rate of withholding taA on property income has been reduced from 9./K

to /K. !D on wires and cables has been withdrawn and eAcise duty on

cement has been reduced by %/K to lessen the cost of construction .

4"+ Le3al Issues Re3ardin3 Housin3 Industry

-ollowing government departments are involved in the ousing Industry.

• 2ahore Development 1uthority F-or more info please visit

httpL@@www.lda.gop.pk G.

•

?1)D1 "own housing $ociety

&>



5 *AR-ET IFOR*ATIO

5"! *ar2et 'otential

!onstruction industry in )akistan has been in the developing stage. In fact two

decades ago, the construction companies were better organized and played significant

role in the countrys development and progress. owever during the last twenty years

there has been considerable decline in the growth, ability and efficiency of the

construction companies. 2arge and established companies have been replaced with

small and medium size companies lacking in management, financial viability and

necessary eAperience to takeup sizable prestigious pro#ects of national importance

whereas in the period of seventies, )akistani companies eAecuted large pro#ects in

Middle ast and 5ulf after obtaining these pro#ects in International competition. "he

new housing policy F%>>&G by current government has proved to be a catalyst for

sustainable growth in construction industry in recent years.

5"& Tar3et Customers

"he target customers are the general public of upperBmiddle income group.

&&



5"+ Trade Statisti#s

1 brief overview of ma#or industry segments is as below.

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7 'RO)UCTIO 'ROCESS

"his section will include the production details of the pro#ect, which includes the raw

material reCuired, product miA, production capacity, production proportion of each

product etc.

7"! 'rodu#tion 'ro#ess Flo9

"he production process includes the following steps.

• )rocurement of 2and

• 1rchitecture Design

• Materials )rocurement

• rection of -oundations

• !onstruction of $tructure

• Installation of lectrical ?ire )ipes

• !onstruction of roof.

• )laster of cement

• $ewerage and water pipe installation

• !onstruction of floors and bathrooms

• )aints and electrification

7"& Ra9 *aterial Re>uirement

-ollowing raw materials will be usedL

7"+ *a#8inery Re>uirement

1ll the reCuired machinery like MiAer, 2ifts etc are available widely on rental basis.

7"/ 'rodu#t<'ro(e#t Standards And Com1lian#e Issues

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)lease check with the relevant authorities F2ike 2D1 for 8ohar "own and ?1)D1

!ooperative ousing $ociety for ?1)D1 "ownG for more specific details about the

!onstruction and !ompliance issues. "hese !ompliance Issues vary widely by

location and by size of plot. Detailed reCuirements can be obtained from concerned

authority upon reCuest.

7"4 Re#ommended House Layout

-or a 4 *arla house following layout is recommended,Ffront %/ feet lngth (/ feet G

Ground Floor

• % bedrooms F&0&% ftG N attached bathrooms F// ftG

• & kitchen F7; ftG

• 1 car porch F&/&> ftG

•

& "6 2ounge F&0&> N %; ftG• & Drawing Room F&&&0 ftG

• 6acant $pace F/ ft on front and / ft at backG

1st Floor

• % bedrooms F&0&% ftG N attached bathrooms F// ftG

• & store F7; ftG

• 1 stair room F&>&> ftG

• & "6 2ounge F&0&> N %; ftG

• & 2iving Room F9&0 ftG• "arries F/ -eetG

Doors and Windows

• ?indows 9 F(./(./G

• ?indows ( F%%G

• -ront Door & F9(G

• Room Doors &0 F90G

• <athroom Doors ( F9%.%/G

-or a 7 *arla house following layout is recommended, Ffront %; feet length />

feetG

Ground Floor

• % bedrooms F&&&%./ ftG N attached bathrooms F99 ftG

• & kitchen F&// ftG

• & $tore F&>9G


•& "6 2ounge F&9&>G

• & Drawing Room F&/&0 ftG

&(



• 6acant $pace F9 ft on front and 9 ft at backG

1st Floor

• % bedrooms F&&&%./ ftG N attached bathrooms F99 ftG

• & store F&>9 ftG

• & kitchen F&// ftG


• & "6 2ounge F&9&>G

• & 2iving Room F&>&0 ftG

• "arries F/ -eetG

Doors and Windows

• ?indows 9 F(./(./G

• ?indows ( F%%G


• Room Doors &0 F90G


•

-or a !? *arla house following layout is recommended, Ffront 0/ feet length 7/

feetG

Ground Floor

• % bedrooms F&(&( ftG N attached bathrooms F99 ftG

• & kitchen F&/&> ftG

• & store F&(&> ftG


• & "6 2ounge F&(%> ftG

• & Drawing Room F%>&/ ftG

• 6acant $pace F&> ft on front and 9 ft at back / ft 5alleyG

1st Floor

• % bedrooms F&(&( ftG N attached bathrooms F99 ftG

• & store F&(&> ftG

• & kitchen F&/&> ftG


• & "6 2ounge F&(%> ftG

• & 2iving Room F&/&/ ftG

• "arries F/ -eetG

Doors and Windows

• ?indows &0 F(./(./G

&/



• ?indows ( F%%G


• Room Doors &/ F90G


; LA) , BUIL)I$ RE@UIRE*ET

;"! Co6ered Area Re>uirement

"he reCuired space for office is (>> $C. -eet office

;"& Rent Cost

"he Rent !ost for office will be Rs. &%,>>> per month.

;"+ Re#ommended *ode

It is recommended to rent an office on the preferred.

;"/ Utilities Re>uirement

lectricity and two phone lines will be reCuired in office.

;"4 Suitable Lo#ation

"he office should be located near the construction sites for administrative purpose.

"he suitable location can be -aisal "own, 8ohar "own and 5arden "own.

&7



= HU*A RESOURCE RE@UIRE*ET

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!? FIACIALAALYSIS

!?"! 'ro(e#t Costs

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!?"& 'ro(e#ted In#ome Statement

!?"+ 'ro(e#ted Balan#e S8eet

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!?"/ 'ro(e#ted Cas8 Flo9 Statement

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!?"4 Cost o% Sales

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!! -EYASSU*'TIOS

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Housing Construction Company

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