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Project Managment (Chip Board)
Project Managment (Chip Board)
Project Managment (Chip Board)
Investment
Ms.c(Accounting & Finance) 3rd
Prepared by ®
Fahad Saeed Malik
5/1/2009
~2~
Project Report
On
CHIPBOARD PLANT
Subject
Project Management
Submitted to
Submitted by
DEDICATION
To
The students of Pakistan, who are in the
hunt for a dazzling future in this country
that can endeavor their aptitude for
every difficulty in prospect
And
And
To my mother,
Whose unwavering faith in me
Has been the driving force in my life—
Her unconditional love and prayers
remain my unremitting source
Of strength.
Silver Star Chip Board Manufacturer
Ms.c (A/F) 3rd
~5~
Prelude
Project is a fundamental part of Ms.c (A/F) program because it
gives us practical knowledge of what we have learnt during our
study period. This report is written to fulfill the requirement of our
degree. Research project provides opportunities to have been
scrutiny and experience. This report process is valuable in course of
learning. This report is also a step of some chance of practical
experience form. In this report will be covering all vital information
and heir scanning exposures in the form of our observation.
In this report we have tried our level’s best efforts to cover and
elaborate necessary inferences suitable to enhance the knowledge.
We hope our efforts of transfer of knowledge through this report
will be information gaining for readers.
Acknowledgement
This work would not have been possible without the support and
encouragement of my Teacher, Javid Iqbal under whose supervision. We
chose this topic and began the Project.
Executive summation
Plant
Main Sponsors:
Fatima Group
Total 242,0176,09
30/06/2010
SWOT Analysis
Strengths:
Continuous availability & easy access of the raw material, which mainly comprise
Wood.
Availability of Labor and skilled craftsmen.
Latest technology of manufacturing Chipboard with high working efficiency and
trouble free operations.
Easy availability of spare parts.
Own Research & Development department for new design creations.
The life style of the people is improving and trends are continuously changing over
time and more people are now directed towards using the new style of furniture and as
well modern.
WEAKNESSES:
Strict controls over the Labor efficiency need to be observed to reduce the risk the
minimum level
THREATS:
6. Result of Projection:
The result of this Project is that, we are able to setting up a chipboard Manufacturing unit
and to evaluate its viability under present circumstances. Pakistan is its way to progress
and a numbers of commercial activities are in process.
Housing & construction sectors are declared as industry. With these developments these
sectors are growing drastically. The growth of allied industries is normal practice therefore
demand for chipboard has increased. Local industry is not able to cater the local demand and
every year a considerable quantity of chipboard is imported from different parts of the world to
meet the demand. Due to increase in population and need of constructing new houses it is
expected that demand for chipboard will rise ultimately. Chipboard industry is a growing
industry of Pakistan, which can contribute positively in the GDP. This industry has reasonable
potential to attract new markets abroad by providing high quality board.
One of the most common uses of chipboard is that it is the back piece, which provides Stiffness
on a scratch pad. Chipboard is the major input for the furniture industry and also used for kitchen
tops and work surface.
8. Justification of Production:
Local industry is not able to cater the local demand and every year a considerable quantity of
chipboard is imported from different parts of the world to meet the demand.
One of the most common uses of chipboard is that it is the back piece, which provides
stiffness on a scratch pad. Chipboard is the major input for the furniture industry and also
used for kitchen tops and work surface.
Afghanistan Development Program after the war has also contributed in opportunities to
enhance considerable export by taking part in the development of Afghanistan.
Construction business is a demanding area. Trade has open for
all the world economies from 2005 and it is visualized that demand will increase more in
future.
The demand of chipboard in Pakistan can be categorized into three broad groups of end users,
Furniture Manufacturers, Construction and Housing Industry. There could be a very small
percentage of other users.
Furniture Manufacturer
The furniture industry in Pakistan can be classified into following categories.
x Manually Operated Units
x Semi-mechanized units
x Mechanized Units
x High-tech Manufacturing Units
Chipboard and plywood are the major inputs for the furniture industry, which is the biggest user
of chipboard, accounts for approx. 60% of the total demand for the product. The wood used in
furniture making generally comprises Shesham, Chirh, Pine, Oak, Burmah, Teak, Plywood,
Kikar and Bamboos. Recently, chipboard is also extensively used for this purpose, which is
considered a healthy sign for the chipboard industry. Although the quality of chipboard so
far produced in the country has not improved up to the world standard, yet with the passage of
time for product’s diversified uses, easy to handle, economical and many other factors, the use of
chipboard is likely to increase.
Construction Agencies
The total world spending on the construction sector in a year is US $ 3.2 trillion against US $ 5.2
billion in Pakistan, according to a report compiled by the Lahore Chamber of Commerce and
Industry (LCCI). The growth rate of construction sector in Pakistan which stood at 5.70 percent
during the early 1990s, declined to (negative 4.92) percent in 1998-99, but then recovered to the
mark of 5.15 percent in 1999-2000.As per the information mentioned above it can be envisaged
that as the construction sector will improve it will ultimately improve the chipboard industry
positively.
By keeping in view increasing population growth rate, expanding demand and supply gap and
shortfall of 6 million housing units, it is expected that chipboard usage will increase to meet the
shortfall of 6 million housing units.
Others
These include Interior decoration firms, Railways and other Government Agencies. Chipboard
is demanded by these agencies for a variety of purposes. Small quantities of chipboard are
also in demand for miscellaneous purposes. For instance, bus body makers, packing firms, film
studios, PWD, WAPDA, Municipal Committees and improvement Trusts etc use it.
9. Marketing Activities:
The marketing of the project will be based on the following strong grounds:
x Contacts with end users and Contractor
x Advertisement
x Promotion schemes
x Point of purchase displays
It is assumed that by using all above mentioned methods, project will be able to fetch
considerable market share.
Pricing
Chipboard is available with or without lamination. Different rates are charged for both products.
Product will be provided to wholesaler at market prevailing rates, which could be different on the base
of product quality.
Distribution
The final product chipboard will directly supplied to wholesaler eliminating role of agencies. Distribution
network of product is illustrated below:
Banks:
Project profile
Opportunity Rational
Due to increase in population and need of constructing new houses it is expected that demand for chipboard will
rise ultimately. Chipboard industry is a growing industry of Pakistan, which can contribute positively in the
GDP. This industry has reasonable potential to attract new markets abroad by providing high quality board.
Banking policies for housing loans are also playing an important roll in the boost of the housing sector. The
construction style has absolutely changed and demand of chipboard and laminated board has significantly
increased. Afghanistan Development Program after the war has also contributed in opportunities to enhance
considerable export by taking part in the development of Afghanistan. Construction business is a demanding
area. Trade has opened for all the world economies from 2005 and it is visualized that demand will increase
more in future.
Project Brief
Gluing together wood particles with an adhesive, under heat and pressure makes chipboard. This creates a rigid
board with a relatively smooth surface. Chipboard is available in different densities i.e. 25mm, 19mm, 8mm, 5mm
and 3mm.
One of the most common uses of chipboard is that it is the back piece, which provides Stiffness on a
scratch pad. Chipboard is the major input for the furniture industry and also used for kitchen tops and work
surface.
parts of the world to meet the demand. Therefore it is right time enter into this industrial sector but for high
quality board definitely.
Project Investment
Total 242,0176,09
Proposed Location
Lower Punjab is best location for a chipboard manufacturing unit due to easy availability of raw material, cheap
labor force and excessive water availability. In chipboard industry mango and poplar wood are the main raw
materials. This industry needs excessive water in the manufacturing process. It is important to select the site
where raw material and water availability is easy. However the investor may consider other factors like easy
access to roads, availability of labor, transportation cost and infrastructure facilities etc. Before selecting the site.
Demography of Pakistan
The population of Pakistan was 32.5 million in 1947. Over the last fifty-five years, it has
increased by four folds reaching to a figure of 156 Million approximately. It is expected to 172
million marks in the year 2010. The demographic details of Pakistan’s population are given
below:
Population in 2009: 170 Million
Population Density: 200/sq. km
Population Growth (percentage): 2.18%
Population Doubling Time: 32 Years
Birth Rate: 29 per 1000 population
Population Growth
At present, the annual population growth rate is around 2.10 percent. Pakistan’s population will
be twice over in less than 32 years. Punjab is the most thickly populated area and Karachi is
the most densely populated city. Keeping in view the growth rate of population of the country it
is likely that housing requirements will enhance and automatically demand for the chipboard
will increase.
Housing Sector The housing and construction sector remained neglected in the past, which
resulted in housing backlog of over 4.3 million units according to 1998 census, which is now
projected to 6.0* million units. The annual additional requirement is estimated around 570,000*
housing
units whereas the annual production is estimated around 300,000* housing units, resulting in a
recurring shortfall of 270,000* housing units annually. It is estimated that in order to address
the backlog and to meet the housing shortfall in the next 20 years, the overall housing
construction will have to be increased to 0.82 million housing units annually
According to 1998 Population and Housing Census of Pakistan, there were over 19.3 million
housing units in the country as compared to 12.6 million enumerated in 1980, showing an
increase of 53.2 percent. The details are tabulated in the table appended herewith.
Housing Units
On the basis of World Bank’s recommended occupancy rate of 6 persons per house, the total
number of housing units in the country roughly required was 26 million up to the end of
2005, based on the population of 156 million at present. Every year, 0.3 million new houses
should be added to the existing stock by the public & private sectors. On the other hand, 10
percent houses of the total supply are depleted/destroyed/demolished every year, resulting
into decline in available housing units to 20.0 million housing units leaving a back log of 6.0
million housing units.
Government Policies
It is high time that government provides the necessary incentives so that this industry may
play its due role in the industrial development of the country. Further, this industry, on
attaining more dimensional growth, with government assistance, may be able to earn the
badly needed foreign exchange through export of its products. A beginning in this regard has
already been made with the export of our furniture to Saudi Arabia and Gulf States.
Government has granted relief to certain industries involved in housing and construction
projects. In order to boost the Pakistan’s economy, Construction Sector is being given
special incentives in the shape of reduction in withholding tax from 6% to 1%, which will
ultimately improve the business activities of the downstream industries like furniture,
Chipboard, and Construction material industries as well. By keeping in view increasing
population growth rate, expanding demand and supply gap and shortfall of 6 million housing
units, it is expected that chipboard usage will increase to meet the shortfall of 6 million
housing units.
At Present only 10 units are in laminated chipboard manufacturing. Most of these units have
average rated capacity of approximately 30,000 sheets per/month in 3 shifts. But this sector is
also under utilized and could not attain its average capacity. Imported fine raw material will
help in the quality improvement, which may increase export rate. In the open trade era,
production of high quality product could help in achieving the export targets and the sector
will grow accordingly. A beginning in this regard has already been made with the export
of our furniture to Saudi Arabia and Gulf States. Government has granted relief to
certain industries involved in housing and construction projects.
MARKET INFORMATION
Market potential
Pakistan is facing housing problem since its birth because of the migration of millions
of people from India to Pakistan. However situation is changing now. Many macro and
micro construction works are underway to meet the shortfall of 6.0 million houses
both by the private and public sector, which is a healthy sign for many industries
including chipboard industry. On the basis of all the factors relating to the growth rate of
population, housing industry and export potential, we can anticipate a reasonable growth
rate in demand of the chipboard and laminated board in coming future. On the basis of
the population growth and housing industry, 6% growth in demand till 2010 is
anticipated. The following table is showing the calculations.
Competitive Environment
Hamza Chipboard
Gohar Chipboard
Sahar Chipboard
Haidry Chipboard
Sun Chipboard
Sind Chipboard
Jehlum Chipboard
National Chipboard
The project could be very healthy for the allied industries like housing, furniture
and automobile industries by giving them their products at internal transfer rates,
which will ultimately reduce the cost of production of allied companies, and he nce
there would be
a positive impact on the consolidated profitability of the associated companies.
Target Customers
Exporters
The Pakistan government has been taking a number of steps to give a fillip to export.
But these efforts are mainly restricted to increase the traditional exports of agriculture
products and items being manufactured by big industrial units. These exports are
subject to “dordrumism” as a result of developing countries like Pakistan. The eleventh
September mishap is a concrete example.
Under such atmosphere, it is necessary that Pakistan should, along with taking steps for
safeguarding our traditional exports from the adverse effects of globalization etc, seek
other avenues to raise its exports. One of these avenues may be the development of our
woodwork and wood based industry, which has started to adopt a scientific
approach for its development.
As a result various items of wooden furniture in new design are in appreciable demand,
both domestically and internationally. Presently, we are exporting to Sri Lanka, Middle
East, Saudi Arabia, Afghanistan and some Gulf States various items of wooden
furniture.
Chipper
Flaker
Conveyers
Screening
Storage tank
Refiners
Glue blender
Glue Kitchen
Blade grinder
Sending machine