Potato Chips Manufacturing Unit in Pakistan

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PROPOSAL FOR
FEASIBILITY REPORT
ON
POTATO CHIPS MANUFACTURING UNIT
In partial fulfillment of
Entrepreneurship & Management of Innovations

SUBMITTED TO:-
Sir. A.R ZAKI
SUBMITTED BY: -
SEEMA BANO. 32
AMNAH ABBAS. 04
JAVERIYA HASSAN. 13

KARACHI UNIVERSITY BUSINESS SCHOOL(KUBS)
PROJECT PROFILE
The project describes setting up a Potato Chips Manufacturing Unit in any big city of Pakistan. The unit will produce a variety of flavored, premium quality potato chips in two standard packet sizes: 15gms and 25gms. There is huge demand of Potato Chips (Snacks Food Industry) in and outside Pakistan; therefore a sizeable production is required. The production capacity of is 150 kg per plant hour of finished potato chips, which is the minimum size for a Chips Manufacturing Unit. The unit will be working in two shifts.

Table 1 Project Cost
| Rupees|
Capital Investment Requirement| 36,886,430|
Working Capital Requirements| 26,650,806|
Total Project Investment Requirement| 63,537,236|

Table 2 Project Financing
| Percentage| Rupees|
Debt| 50%| 31,768,618|
Equity| 50%| 31,768,618|
Total Project Investment| | 63,537,236|

PAKISTAN POTATO PRODUCTION1
Pakistan is one of the largest potato producing countries, yet it has very limited adequate storage and processing facilities, due to which a substantial proportion of production is wasted. The combination of inadequate storage facilities and an under-developed processing industry leads to volatility in prices, given that not all of the excess production can be stored or processed for consumption during the off-season. The following analysis will illustrate the current state of the potato production in Pakistan. Pakistan annually produces about 2 million tons of potatoes. Though varying from year to year, area and production of potatoes in Pakistan have exhibited an increasing trend over the past 8 years (Table 3)

Table 3 Area and Production of Potatoes for the Period from 1999/00 to 2006/07 in Pakistan2

Punjab is the leading potato producing province followed by Khyber Pakhtunkhwa, Baluchistan and Sindh.

Table 4 Province-wise Production of Potatoes in Pakistan (2006/07 Ave)

_________________________________________
1www.Pakistan.gov.pk
2Agricultural Statistics of Pakistan, Ministry of Food, Govt. of Pakistan, Islamabad MARKET AND DEMAND ANALYSIS
Chips Manufacturing Plants Currently in Operation3
For a very long time, the snacks market of Pakistan comprised mostly of biscuits, corn-based and other non-potato snacks. It is only recently, with the advent of globalization and adoption of the western culture that potato crisps have become a major part of the snacks industry. The snacks market comprises of a few known local potato chips brands and a single international brand. Lays has been the largest player in this segment since it entered the market in 2007. By introducing innovative and trendsetting potato chips flavors backed with international quality, Lays became the growth catalyst for the natural potato chips category. Following are the major and leading Producers of Potato Chips (Crisps) in Pakistan.

Table 5 Leading Potato Chips Companies in Pakistan
Sr. No.| COMPANY NAME| BRAND NAME|
1| Standard Foods (Pvt.) Limited| Golden Chips|
2| Tripple EM (Pvt.) Limited| Super Crisps|
3| Kohinoor Smith (Pvt.) Limited| Smiths|
4| Consolidate| Kolson|
5| Trading Enterprises| Krincles|
6| PepsiCo Inc| Lay’s|

Situational Analysis and Specification of Objectives
This involves informal communication with customers, competitors, middleman and others operating in the industry. The starting point can be the existing players in the market to measure the preferences and purchasing power of the customers, determine the actions and strategies of the rivals and practices of the suppliers and intermediaries. Next depending on the cost and time...
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