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Star CNG Station
EXECUTIVE SUMMARYTHE PROJECT:-
The proposed project contemplates to set up a new CNG
station 1 kilomiter ahead from khan pur ada rahim yar khan.
The project machinery is locally available.
LOCATION:
The proposed project contemplates to set up a new CNG
station 1 kilomiter ahead from khan pur ada rahim yar khan..
The proposed project site enjoys the benefits of 1) easy
availability of Natural gas which is main raw material for CNG
Stations , 2) quick access to main road, 3) Lcated at main
road and enjoys the excess of CNG fitted vehicles, 5)
availability of Skilled and Un-Skilled labor, and 5) free from
environmental hazards like water logging and salinity and
floods.
SPONSORS:
Sponsors of this project are highly qualified and have good
command over the project .
MARKET AND PLANT CAPACITY:
This project has good market and on its demand bases
this project will going to get the sales of 36288000 Rs
in 1st year and sales of 52416000 Rs in 2nd year and
sales of 76230 in 3rd year.
PLANT CAPACITY:
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Star CNG Station
The capacity of this project is too good due to its latest
filling machines and compressor its has a capacity of
filling the 864000 vehicles per year .
MATERIAL REQUIREMENT:
Basic requirement of this project is natural gas.
PROJECT ENGINEERING:
Machinery of this project would be purchased from the
Karachi from a local provider .
MANPOWER:
The project would create employment opportunities for
the following staff:
Detail Total Nos.
Skilled Labor 2
Semi-Skilled Labor 4
CNG Administrative Staff 7
IMPLIMENTATION STAGE:
This project will start its operation form the april2009
Project started and completed at jan2009 march2008.
COST OF THE PROJECT: Rs. “(000”)
Fixed Cost 32161
Net Working Capital 1437
Total 33598
FINACIAL PLAN:
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EQUITY 33598
Total 33598
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OPERATING RESULTS: (“000”)
ITEMS 2009 2010 2011
Sales 36288 52416 76230
Gross Profit 14462 21260 34082
Operating Profit 13731 20366 33072
Net Profit 7324 10994 17982
FINANCIAL POSITION OF THE COMPANY: (Rs. “000”)
ITEMS 2009 2010 2011
Current Assets 7335 14782 28217
Fixed Assets 29958 28882 27806
FINANCIAL INDICATORS:
Project Cost IRR %
33598 33
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TERMS AND CONDITIONS:
1. Proposed name of the project need to be mentioned.
2. Sponsors contribution is fully indulge in this project.
3. Land will be purchased in transfer to the sponsors names.
4. Any further financial assistance will be provided by its
sponsors.
5. Accessories and utilities will be arranged as per the
contract by the contract of civil work himself.
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Star CNG Station
INTRODUCTIONThe proposed project contemplates to set up a new CNG station 1
kilomiter ahead from khan pur ada rahim yar khan. The project machinery
is locally available. The capacity of this project is too good due to its latest
filling machines and compressor its has a capacity of filling the 864000
vehicles per year. CNG pump will work 360 days of years there will not be
any stop.
The total Capital Cost of the project is estimated to be Rs. 33598000.
This total Cost of the project comprises of Fixed Assets Rs. 32161000 and
Initial Net Working Capital of Rs.1437000
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Star CNG Station
Management
The overall management and control of the firm will be actively managed
by its partners who will actively participate in management decisions and
control the affairs of the firm.
Partners Name
1. Majid ali
2. Jam Imran Ahmad
3. Rehan Majeed
The partners will contribute equally in the equity of the project and will
equally participate in the profit and loss of the firm's business.
Sponsors
The sponsors of the project are professionally qualified and have valuable
and extensive experience. They have got good trading contacts and
market reputation in the industry. Moreover, they are professionally
qualified in the field of business Management from the Islamia University
of Bahawalpur under BBA Program. The sponsors experience would assist
the firm in its smooth and profitable operations.
The sponsors are financially sound and capable to contribute their part of
equity in the proposed project.
The Sponsors detail is as under:-
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Star CNG Station
1. Name : Majid ali
Age : 22 years
Address : Gulshan Usman Block u Street no 6
House no 10d
Rahim yar khan
Qualification : BBA(Finance)
Experience : In same industry of 2 years
2. Name : Jam Imran Ahmad
Age : 22 Years
Address : Rahim Yar Khan
Qualification : BBA (Finance)
Experience : 2 months internship at NRL.
3. Name : Rehan Majeed
Age : 23 Years
Address : Stellite Town 15-A, Rahim Yar Khan
Qualification : BBA (Finance)
Experience : 1 Years experience of Accountancy.
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Star CNG Station
Technical Analysis
Location of the Project
- The proposed project contemplates to set up a new CNG station
1 kilomiter ahead from khan pur ada rahim yar khan.
- Easy availability of raw material
- Access to the main road, Sources of Power, water, fuel etc.
- Availability of transport & communication like telephone, telex,
Internet etc.
- Availability of skilled and Un-Skilled manpower
Manufacturing Process
- Natural Gas is one of the most valuable natural resources
abundantly available in our country. Compressed Natural Gas
(CNG) is produced when the natural gas is compressed into
cylinders to be used as a fuel in the automobiles. The
compressed natural gas has been used as an automobile fuel
since 1940, and over the years, the technology has been
modified and refined. In the recent years, the usage of CNG as
an automobile fuel has significantly increased because of its low
cost and environment friendly nature that’s why it is also called
as Green Fuel, because it possesses less carbon and led
contents than petrol.
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Star CNG Station
GROWTH
There has been a tremendous growth in the CNG sector over the years. The total number of vehicles on CNG was 100,000 and CNG filling stations was 150 at the end of year 2000. The
number of CNG vehicles and CNG filling stations has increased to 210,000 vehicle and 220 stations respectively and by the year 2005 they have tremendously grown up to 670 CNG
Stations and 600,000 CNG fitted vehicles. At present, there are more than 2000 CNG stations &2 million CNG fitted vehicles. The
growth in terms of percentage is given in the following table:
Growth Percentage of Vehicles:
Year 2005 2008 %increaseNo. Of Vehicles on CNG 600,000 2,000,000 67%
CNG Filling Stations 670 2,000 67%
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MARKET ANALYSIS
Due to the increasing prices of petroleum products, the
trend of converting cars to CNG fueling system has been
on a rise. However, there exist a large number of people
who were reluctant to convert their vehicles from petrol to
gas due to safety concerns. Recently, many car
manufacturers have started manufacturing the cars with
built-in CNG fueling system. This change has led to
enhancing the confidence in the minds of the general
public regarding the safety concerns, and now, more
people are inclined towards purchasing these factory-fitted CNG fueling
system cars.
Total number of CNG stations in Pakistan is only 2000,
which is quite low for meeting the growing demand of
CNG. Apart from these 2000 CNG stations, many new CNG stations are
being setup across the country.
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Star CNG Station
Star CNG Station Annexure - I
Estimated Cost of Land
Sr. No.
DescriptionArea in Unit
CostRs ("000")
Marlas Total Cost
1 Land 50 2,80000 14000
2 Registration & Legal Requirements 50 400 20
3 Stamp Duty 50 300 15
4 District Council 50 100 5
5 Development Charges 50 1300 65
Total Cost of Land 14105
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Annexure - II
Star CNG Station
Estimated Cost of Civil Works
Sr. No.
DescriptionType of Unit of Covered Rate Per Rs ("000")
BuildingConstructio
n area Unit Total Cost
1 Control room Rcc Square foot 160 710 113
2Compressor and cylinder storage room
Rcc Square foot 310 710 220
3 shed Kanopi Square foot 1650 450 724
4 office Rcc Square foot 550 710 119
5 Tuc Shop Rcc Square foot 224 710 159
6 Mosque Rcc Square foot 250 710 177
7Car wash and Cng repair
Rcc Square foot 768 710 545
8 flooring Running feet 7388 150 1108
9 Lawn Running feet 2500 50 125
10 Contingency 250
Total Cost 3542
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Annexure - III
Star CNG Station
Estimated Cost of MachineryRupees ("000")
Rupees ("000")
Sr.No. Description QtyUnit Cost
Total Cost
1Gas compressor(8 to 15 PSIG) outlet pressure of 3625 PSIG 50 vehicle per hour 1 7500
7500
2 Electric Control Pannel 1 200 200
3 Storage Cascade 45 30 1350
4Cng Dispenser UK model=h430h-wl Capacity 400m3/hr
2 900 1800
5 Electric cables with tape fitting panel 265
6 Cooling tower 1 150 150
7 Contingencies 550
Total Cost of Machinery 1,1815
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Annexure – IV
Star CNG Station
Estimated cost of the Project
Sr.No. Description LCY FCYTotal cost
("000")
1 Land 14105 - 14105
2 Building 3542 - 3542
3 Machinery 10715 - 11815
4 Installation & Erection of Machinery 370 370
5 Insurance 5% of Cost of Machinery 590 590
6 Transportation 2% of Machinery 12 12
7 Furniture and Fixture 250 250
8 Office Equipment 350 350
09 Pre-operating expenses 1127 1127
Estimated fixed cost - 32161
Add: Net Initial Net Working Capital 1437
Total Estimated Cost of Project 33598
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Annexure - V
Star CNG Station
Initial Net Working Capital Requirement
Rs. "000"
A. Current Assets:
1Account receieveable 6% of sales
2177
2 Advances and Deposits, & Prepayments 210
Total Current Assets 2387
B. Possible Current Liabilities:
1 Accounts Payable for cost of gas 800
2 Accrued Power Expenses 150
Total current liabilities 950
Initial net working capital 1437
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Annexure - VI
Star CNG Station
Estimated Income StatementYears ending September 30 : 2009 2010 2011
Sales 36288 52416 76230
Less: COST OF SALES
Raw Material 16800 24640 33878
Labor 528 618 723
Manufacturing Overheads 3422 4822 6471
Depreciation 1076 1076 1076
Total Cost of Goods Manufactured 21826 31156 42148
Gross Profit 14462 21260 34082
OPERATING EXPENSES:
Administrative Expenses 65 74 87
General Expenses 485 558 642
Selling Expenses 181 262 381
Total Operating Expenses 731 894 1010
Operating Profit 13731 20366 33072
OTHER EXPENSES:
Financial Charges on:
Long Term Loan - - -
Bank Borrowings - - -
Amortization of Pre-Production Expenses 376 376 376
Total Other Expenses 376 376 376
Profit Before Tax and Worker's Fund 13355 19990 32696
Worker's Fund - - -
Profit/(Loss) Before Tax 13355 19990 32696
Tax Provisions @ 45% 6009 8995 14713
Net Profit 7324 10994 17982
ASSUMPTION UNDERLYING EARNING FORECAST
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PRODUCTION AND SALES
The purpose of compressor is to compress the gas enabling it to discharge
the gas for refueling. This compressor requires an input pressure of 8 or
15 PSIG (pounds per square inch gauge pressure) from the main gas
supply with the outlet pressure of 3,625 PSIG. With this discharge
pressure, the equipment can refuel 50 vehicles per hour.
Gas is filled into the vehicles with the help of dispenser. This dual hose
dispenser is capable of handling two vehicles at a time.
There are various foreign manufacturers providing the CNG filling station
equipment. In this feasibility report, a British origin compressor (Ham
worthy Compressor, Bellies & Marcum, UK, Model: H430H-WL Capacity:
400 m3/hr) has been selected. This equipment is selected because of its
low electricity consumption, higher outlet pressure, low maintenance,
durable working, longer periods between overhauls and good market
repute and presence.
Different gas pressures are available in different areas of Pakistan from
the main gas supply line. The pressure of 15 PSIG is not easily available at
every location. Where the gas pressure of 15 PSIG is not available, in that
situation, the model with inlet pressure of 8 PSIG is used, which has been
manufactured to operate at a lower gas pressure. However, the
consumption of electricity increases.
The total capacity of the selected equipment is 400M3/Hr with a total
power load of 93 KW.
Currently, the CNG cylinders with two different capacities are installed in
the CNG fitted cars. One type of cylinder has a capacity of 6kg and the
other has a capacity of 8k.
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Star CNG Station
Price are assumed to be according with the current market price that is
imposed by Govt.
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Star CNG Station
Based over these assumptions, following is the year-wise detail of
production, Sales and Sales Revenue of the proposed project:-
Annexure-VI-A
Production Capacity of 400m3/hr/filling unit No. of units Filling/unit Annual filling
Filling units 2 50 cars 864000
Total 864000
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Annexure-VI-A
300/day 400/day 550/day
Capacity Utilized2009 2010 2011
vehicle filled
vehicle filled
vehicle filled
a) Vehicles filled 108000 144000 198000
Total vehicle filled 108000 144000 198000
Sales Revenue:
Description Unit Price Rupees ‘000’
a) Cylinder capacity 7kg/car 48 (2009) 36288
52(2010) 52416
55(2011) 76230
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Annexure-VI-A
Raw Material:Rs ‘000’
2009 2010 2011
a) Natural gas 16800 24640 33878
Total 16800 24640 33878
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Annexure-VI-A
Labor Cost: Direct Labor:
No. of Salary/Month Annual
Sr. No.
DiscriptionEmployee
s/Worker
Salary ("000")
1 Skilled 2 10000 240
2 Semi skilled 4 6000 288
Total 528
Assumptions:
1 Direct labor will increase every year @ 17%.
Year Wise Wages of Labor:
Sr. No. DescriptionYears
2009 2010 2011Rs ("000")
1 Labor cost 528 618 723
Total Cost of Labor 528 618 723
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Annexure-VI-A
Manufacturing Overhead Cost:
DescriptionRs
("000")a) Fixed Cost:
Insurance: @ 1% of Fixed Assets Cost 321
Maintenance:
Maintenance of filler 15000/unit 30
Maintenance of Building @ 2% of Cost of Building 71
Total Fixed Cost 422
b) Variable Manufacturing Expenses:
Electricity charges 3000
Total Variable Cost 3000
Year ending Manufacturing Overheads as per Different Capacities:
Description
Years
2009 2010 2011
Rupees ("000")
Fixed Cost 422 422 422
Variable Cost 3000 4400 6049
Total Cost of Manufacturing Overheads
3422 4822 6471
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Annexure-VI-A
Administrative And General Expenses:Rupees ("000")
Sr. No.
DesignationNo. of Salary/ Annual
Employees Month Salary1 Manager 1 25000 252 Deputy manager 1 10000 103 Clerk 1 8000 84 Watchman 2 6000 125 Peon/Sweeper 2 5000 10
Total 65
General Expenses:
Sr. No. DescriptionYear Exp. ("000")
1 Traveling Expenses 752 Printing & Stationary 303 Telephone, Telex, Postage 804 Entertainment 2006 Legal & Audit 207 Miscellaneous 80
Total 485
Assumptions:1 Administrative Salaries will increase @ 15% every year.
Year Wise Administrative Salaries:
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Star CNG Station
No. of Rupees ("000")Sr. No.
DesignationEmployee
s 2009 2010 2011
1 Manager 1 25 29 332 Deputy manager 1 10 12 143 Clerk 1 8 9 104 Watchman 2 12 14 165 Peon/Sweeper 2 10 12 14
Total 65 74 87
General Expenses:Sr. No. Description Rupees ("000")
1 Traveling Expenses 75
86 99
2 Printing & Stationary 30
35 40
3 Telephone, Telex, Postage 80
92 106
4 Entertainment 200
230 265
6 Legal & Audit 20
23 26
7 Miscellaneous 80
92 106
Total 485 558 642
Selling Expenses:
Selling Expenses are assumed to be .5% of Sales
Sr. No.
Description Rupees ‘000’
1 Selling Expenses .5% of Sales Revenue 181 262 381
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Annexure-VI-A
Depreciation Schedule of Fixed Assets:
Sr. No. Description Total Cost (Rs.) Rs. ("000")1 Machinery 11687 15 7792 Building 3542 20 1773 Furniture & Fixture 250 5 504 Office Equipment 350 5 70
Total 1076
Note:- Depreciation will be constant over the life of assets.
Year Wise Depreciation:
DescriptionYears
2009 2010 2011
Rupees ("000")
Depreciation 1076 1076 1076
Pre- Production Expenses :
Sr. No. DescriptionRs.
("000")
1 Registration Charges 350
2 NOCs 300
3 Sales Tax Registration Charges 12
4 Consultancy & Report Preparation Charges 250
5 Printing & Stationary 45
6 Conveyance Charges 35
7 Telephone & Postage 45
8 Salaries and Wages during Construction 90
Total Pre- Preproduction Expenses 1127
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Annexure-VII
Star CNG Station.Cash Flow Statement
End ofOperating YearsConstructio
n
2009 2010 2011
SOURCES OF FUNDS:
Operating Profits - 13731 20366 33072
Add: Depreciation - 1076 1076 1076
Total Funds from Operation - 14807 21442 34148
Other Sources:
Long Term Loan - - -
Bank Borrowings - - -
Paid-Up Capital 33598 - -
Total Sources of Funds 33598 14807 21442 34148
APPLICATION OF FUNDS:
Investment in Fixed Assets 29934 - - -Financial Charges during Construction
- - - -
Pre-Production Expenses 1127 - - -
Repayment of:
Long Term Loan - - - -
Bank Borrowings - - -
Financial Charges On:
Long Term Loan - - - -
Bank Borrowings - -
PAYMENT OF:
Taxes - 6009 8995 14713
Dividends - - - -
Worker's Fund - - -
Short Term Investment - 4000 5000 6000Increase in Current Assets (Other than Cash)
210 2177 967 1429
Total Application of Funds 31271 12186 14962 22142
Cash Surplus/(Deficit) 2327 2621 6480 12006Cash at the Beginning of the Year
- 2327 4948 11,428
Cash at the end of the year 2327 4948 11,428 23434
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Annexure-VIII
Star CNG StationBalance Sheet
End ofOperating Years
Construction2009 2010 2011
ASSETS: Rupees ("000")CURRENT ASSETS:Cash and Bank Balance 2327 4948 11428 23434Short Term Investment - - - -Accounts Receivable - 2177 3144 4573Advances, Deposits and Prepayments 210 210 210 210Total Current Assets 2537 7335 14782 28217FIXED ASSETS:Fixed Assets at Cost 31034 31034 31034 31034Accumulated Depreciation on Fixed Assets - 1076 2152 3228Fixed Assets Net 31034 29958 28882 27806Intangibles 1127 751 376 -Total Assets 33598 46931 53587 66293LIABILITIES AND EQUITY:CURRENT LIABILITIES:Bank Borrowings - -Taxes Payable - 6009 8995 14713Dividend Payable - -Worker's Fund Payable - - - - -Current Maturity of Log Term Debt - - - -Total Current Liabilities - 6009 8995 14713LONG TERM DEBTS:Long Term Debt - - - -Total long Term Debt - - - -EQUITY:Paid-Up-capital 33598 33598 33598 33598Retained Earnings - 7324 10994 17982Total Equity 33598 40922 44592 51580Total Liabilities and Equity 33598 46931 53587 66293
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Annexure-IX
BREAK-EVEN ANALYSIS
Commercial Break-even in the first operating year:
( Rs. In '000' )
ItemsVariable Cost
Fixed Cost Total Cost
Raw Material 16800
-
16800
Labor 528 528 Manufacturing Overheads
3000
422
3422
Depreciation Expenses -
1076
1076
Administrative & General Expenses
-
550
550
Selling Expenses 181 181
Interest / Mark-Up Expenses - - -
Amortization of Pre-Production Expenses 376
376
Total: 19981
2952
22933
Sales value of Production: 36288
Break-Even Point 2952
X 100 36288 -
19981
18%
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BREAK-EVEN ANALYSIS
Cash Break-even in the third Operating Year:
( Rs. In '000' )
Items Variable CostFixed Cost
Total Cost
Raw Material 16800 - 16800
Labor 528 528
Manufacturing Overheads 3000 422 3422
Administrative & General Expenses 550 550
Selling Expenses 181 - 181
Interest / Mark-Up Expenses - - -
Worker's Participation Fund - - -
Debt Payment - - -
Tax - 6009 6009
Total: 19981 7509 27490
-
Sales from Operations: 36288
Break-Even Point:7509
X 10036288 - 19981
46%
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Annexure-X
Weighted Average Cost of Capital
("000")
Nature of Fund AmountInterest Rate
%After Tax Rate %
Total Interest
IN this project there is no long term debt so there would not be this annexure participation.
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Annexure - XIII
FAT Oil Mills (Pvt) Limited.
Financial Plan
Rupees ("000")
Description LCY FCY Total cost
Total Fixed cost of the project 32161 - 32161
Initial Permanent working capital 1437 - 1437
Total cost of the project 33598 33598
Long Term Debt - - -
Equity Participation 33598 - 33598
Total Capital Required 33598 33598
Debt/Equity Ratio
KEY SUCCESS FACTORS
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Star CNG Station
Few factors ensure the profitability of the project which is as follows:Location of the project will play a pivotal role in the successful running of the CNG station. The daily turnover of the cars largely depends on this important factor.Selection of proper equipment is another key for carrying out the successful operations of the proposed project.
OPPORTUNITIES
The project would have a number of opportunities:The project will provide cheaper fuel to its customers compared to the petroleum products which are already on the higher side.Government has exempted the imposition of sales tax and custom duties on the import of CNG kits and CNG plant and equipment.HDIP, a non-profitable organization working under the umbrella of Ministry of Petroleum and Natural Resources, provides consultancy services to the interested parties for setting up the CNG filling stations.This project will reduce the import bill of petroleum products and promote the use of gas fuel, as it is abundantly available in our country in this way it can save our foreign reserves.Environment friendly / green fuel will protect the environment from deadly pollution.
THREATS/CONSTRAINS
The project will be facing the following threat:Market saturation over a longer period of time due to a large number of entrants .
Threat of increase in the prices of the natural gas by the government. The gap between the prices of Petrol and Gas is becoming narrower, since the last month .
Shortage of gas supply in winter season.The under-table money for acquiring the NOCs is another threat for the project.
ALTERNATIVE INVESTMENT OPPORTUNITY
The cost of land is the major portion of investment in this project. If any investor does not have enough resources for the acquisition of land, he/she also has another alternative course of action to setup the CNG station without acquiring the land.The investor can make investments only in the purchase of CNG plant and equipment and install this equipment with any existing petrol pump. In this case, the investment for installing the CNG equipment will be made by the investor and the space will be provided by the dealer/owner of the existing petrol pump. The investor will pay 15% commission on the total revenue to the dealer/owner of the petrol pump. Moreover, the investor can also avail lease facility from any leasing company on the purchase of CNG plant and equipment.
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APPENDICES
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A list of some of the available equipment and machinery provided by HDIP is as
follows:
Table: Suppliers
Supplier’s Name Available Models
Rix Services, New Zealand 2JJS3G-178, FX-150, 3KX3G-40,6W5G-150
Compare UK Ltd, UK Gazpack 36, Gazpack37
Norwalk Company Inc. USA C-75-3, C150-4, NQSV3
Sulzer Burckhardt Engg. Works Switzerland
C40111S, C50214S
Hamworthy, Bellis & Morcom UK H430H-WL, H280H-WL, V130H-WL
Safe s.r.l Italy SW75SE-F1-EM, SW110SE-F1-EM,SW110-F1-EM, SW132-F1-EM,
SW90F0, 35-EMHurricane, Grimmer Industries,
USA
CNG90, CNG 125, CNG250
Chengdu Jinxing Chemical Machinery and Equiment
Factory, China
ZW-3.45/250JX, ZW-5.0/1-23, ZW-
5.52/0.5-250JXChonqing Air Gas Compressor
Factory, ChinaL-3.8/1-250, L-3/1-250, L-5/0.56-
250,L-2.9/0.56-250, L-4.65/0.56-250,
W3.8/0.56-250, W-3.8/1-250Intermech Ltd. NewZealand RHINO PAR-75VE 4-8
RHINO PAR-1-DE 4-82RHINO-PAR 150DE4-10
Unigas NewZealand Apollo VR-550
Compare Mahle GmbH, Germany 5409.2NG.EU
Sicom SRL , Italy 650.250.20-IFDE-23SE
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39
