Mini Cold Storage And Ice Fish Trading Pre Feasibility Study

MINI COLD STORAGE & ICE/FISH TRADING BUSINESS OPPORTUNITY PROJECT SUMMARY

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SOPREX Foundation SOPREX/MIND-BIOS Bldg., MSU-IIT Campus A. Bonifacio Ave. Tibanga, Iligan City. 9200 (063) 223-8077 / FAX: (063)2238481

Partnerships in Local Enterprise Development and Governance Sustainability (PLEDGES) Program BUSINESS OPPORTUNITY PROJECT SUMMARY

Mini Cold Storage & Ice/Fish Trading PROJECT CONCEPT/DESIGN: The Project involves the retail of block ice and trading of high-value fishes. For this purpose two (2) units of cold storage facilities shall be fabricated and installed in the Project site. One unit shall be used for storage of block ice with a capacity of 24 ice blocks or 3 MT at 125 kgs per block. The other unit, designed as walk-in to allow ease of product handling, shall be used for storage of fish with a maximum capacity of 1 MT. Fabricated all-steel, each cold store unit is estimated to weigh only 2 MT and is thus easily transportable to any remote place with road access. Using a V-type or belt-driven 3HP compressor for each cold store unit, the project can operate continuously during power outages by using a small stand-by diesel generating set of 7HP or more. For this reason, the Mini Cold Store can also be located in remote fishing villages where electricity is not available. The Project shall purchase block ice from ice plants in the capital city at the estimated price, delivered, of P130 per block and retail the ice to local consumers, primarily small-scale fishers at a mark-up of 25%. The Project shall also purchase the fish caught or harvested by the local fishers/fish farmers at an average cost of P60/kg and sell to consumers in nearby urban centers at a mark-up of 50%. OPERATING VOLUMES: BLOCK ICE – 24 blocks (3 MT)/day; FISH STORAGE: 1 MT storage, 1 MT/week ANNUAL GROSS INCOME: PhP 6.12 million ANNUAL NET INCOME BEFORE INTEREST & TAXES: PhP 1.11 million ESTIMATED TOTAL PROJECT COST: PhP 1.09 million COST OF COLD STORAGE UNITS: PhP 200,000 (3 MT Block Ice Storage) and PhP 150,000 (1 MT Fish Storage) RETURN ON INVESTMENT RATE (R0I) /PAYBACK PERIOD: 102.1% p.a. / 1.0 year FOR MORE INFO, PLEASE CONTACT: SOPREX Foundation MSU-IIT Campus, Tibanga, Iligan City 9200 Tel./Fax: (063)223-8481/223-8077 Cell Phones: 0918933172 (Maya); 09189420065 (Yesnoy)

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Schedule 1. I.

II.

III.

ESTIMATE OF TOTAL PROJECT COST

PRE-OPERATING EXPENSES 1 Consultancy Fee (FS/Detailed Engineering Plans Prep & Organizing/Training) 2 Business Licenses & Permits 3 Travel/Perdiems & Business Meetings 4 Miscellaneous Sub-Total FIXED ASSETS ACQUISITION 1 Land & Land Improvements a. Land: 100 sqm @ P1000/sqm b. Warehouse: 50 sqm @ P2,000/sqm Sub-Total Land & Land Improvements 2 Machinery and Equipment a. Ice Storage, 1 unit, 3HP Single Phase, 3MT (24 blocks) capacity b. Agri-Fishery Products Storage, 1 unit, 3HP Single Phase, 1MT capacity c. Diesel Engine, 10HP, 1 uint d. Ice Crusher w/ 1HP Electric Motor, 1 unit e. Materials Handling Tools/Equipment: 1 Lot Sub-Total Machinery and Equipment TOTAL FIXED ASSETS ACQUISITION INITIAL WORKING CAPITAL Cost of Sales Administrative/Selling Overhead TOTAL INITIAL WORKING CAPITAL TOTAL INVESTMENT REQUIREMENTS Schedule 2. A. 1 2 3 4 5 6

B. 1 2 3 4 5 6

50,000 5,000 10,000 5,000 70,000

100,000 100,000 200,000 200,000 150,000 50,000 5,000 1,000 406,000 606,000 382,329 28,131 410,460 1,086,460

BASIC ASSUMPTIONS

ICE STORAGE/RETAILING Days of Operation Per Year: Volume of Sales (No. of Ice Blocks): 24 blocks/day Unit Cost of Ice Blocks, delivered (Pesos per Block) Retail Gross Profit Margin (% of Purchase Price): Direct Labor Cost (% Commission of Sales): Ice Cold Storage Operations Overhead Expenses a. Energy: Diesel Engine Fuel & Oil Consumption (Pesos Per Day) b. Miscellaneous Expenses (Pesos Per Month) c. Repairs & Maintenance Factor (% Per Annum of Fixed Assets) d. Depreciation Factor (Average Economic Life in Years of Fixed Assets): FISH STORAGE/TRADING Days of Operation: No. of Cycles of Fish Buying/Trading @ 7 days/cycle Volume of Sales (No. of Kgs) @: 1,000 kgs. per cycle Unit Buying Price of Fish, 1st Class (Pesos/Kg) Wholesale Trading Gross Profit Margin (% of Buying Price): Direct Labor Cost (% Commission of Sales):

365 8,760 130 25% 2% 158 50 15% 5 365 52 52,143 60 50% 2%

7

C. 1

2 3 4

Fish Cold Storage/Trading Operations Overhead Expenses a. Energy: Diesel Engine Fuel & Oil Consumption (Pesos Per Day) b. Ice Consumption Rate During Transport to Market Outlets (% of Fish Volume) c. Miscellaneous Expenses (Pesos Per Month) d. Repairs & Maintenance Factor (% Per Annum of Fixed Assets) e. Depreciation Factor (Average Economic Life in Years of Fixed Assets): ADMINISTRATIVE/SELLING OVERHEAD EXPENSES Basic Monthly Salaries & Wages, Administrative & Selling Personnel: 1 Supervisor/Cashier 1 Bookkeeper/Clerk Total Basic Monthly Salaries & Wages, Administrative & Selling Personnel: SS & Other Employee Benefits (% of Basic Salary/Wage Rate) Utilities (Light, Water, Telephone) Cost per Month (Pesos) Other Administrative & Selling Overhead (% of Gross Sales)

158 33% 50 15% 5

12,000 6,000 18,000 15% 1,500 5%

Schedule 3. PROJECTED ANNUAL INCOME STATEMENT GROSS SALES INCOME: Sale of Block Ice Sale of Fish Total Gross Sales Income

AMOUNT (PhP) 1,423,500 4,692,857 6,116,357

Less: COST OF SALES: Direct Labor Block Ice Purchases Fish Purchases Ice Consumption, Fish Trading Energy Repairs and Manintenance Depreciation Total Cost of Sales

1,138,800 3,128,571 22,369 114,975 60,900 81,200 4,669,143

GROSS PROFIT ON SALES

1,447,214

Less: ADMINISTRATIVE & SELLING OVERHEAD EXPENSES Salaries & Wages (Basic): Utilities (Light, Water, Telephone) Other Administrative & Selling Overhead Expenses Total Administrative & Selling Overhead Expenses NET INCOME BEFORE INTEREST & TAXES (NIBIT) RETURN ON INVESTMENT (ROI) RATE (% p.a. on total project cost) PAYBACK PERIOD ON TOTAL PROJECT COST (YEARS)

122,327

248,400 18,000 71,175 337,575 1,109,639 102.1% 1.0