Detailed Project Report (DPR)

Step Engineering Ltd.

Establishment
of Warehouse Rack
Manufacturing
Plant

CORPORATE HEAD OFFICE

Step Engineering Ltd, A concern of Step media group Ltd

HOUSE- 07, ROAD - 23/B,
(LEVEL-3)
GULSHAN-1, DHAKA-1212
Abstract:
The global pallet racking market is growing at a rapid pace, mainly due to the rising demand
for efficient warehouse storage systems. The storage systems provide comprehensive intra-
logistics solutions for supermarkets and jumbo retailers. Due to the on goinggrowth of
ecommerce sectors worldwide, there is a huge demand for adjustable pallet racking and
drive-in racking systems equipped with a high storage capacity.

Besides, large grocery stores with different temperature storage zones that need heavy-duty
shelving racks adapted to the type of product stored, such as temperature-sensitive frozen
products, substantiate the market size. The market growth is directly related to the rising
landscape of international trades and the global economy. Therefore, the market is
forecasted to witness significant traction in the years to come. 

In this regard, the leading research firm Market Research Future (MRFR), states that the
global pallet racking market is projected to grow at a 7.8% CAGR during the forecast period
(2020-2027). The global supply chain is changing continually, which augments the demand
for integrated warehousing solutions, material handling, packaging, and transportation to
streamline operations in the long run. 

Favorable government trade policies provide significant expansion opportunities to the

existing vendors, increasing the demand for logistic services. Simultaneously, economic
reforms and government initiatives to strengthen manufacturing sectors attract vast
investments.

Bangladesh is a quick growing country of the world having the scope and opportunity to grow
its industrial sector in a massive scale throughout the country. In line with the Governmental
Export Processing Zones, private sector export processing zones are coming up creating
vast demand of the racking system. During the next 5/6 years we have a market size of
around 3000-3500 Crore and our inland supply is very minimal. Some foreign companies are
coming up to mitigate the demand threshold. So we have the ample scope to come forward
as we have ready market and the scope to flourish in line with the market demand.

Step Engineering Ltd wants to be a pioneer in preparing world-class racking system in

Bangladesh with its state of the art technology and efficient manpower.

Synopsis of the Project

1. Name of the Step Engineering Limited
Project:
2. Location of the Zamalpur EPZ. Zamalpur.
Project:
3. Head Office: House- 07, Road - 23/B, (Level-3)
Gulshan-1, Dhaka-1212
ii
4. The Project: The proposed project includes detailed plan on setting up of a
Warehouse Rack Manufacturing plant at Engineering
Zamalpur Export Processing Zone. For manufacturing Warehouse
Rack in Bangladesh which is now being imported from other
countries and Bangladesh is spending huge foreign currency
every year. Step Media engineering expects to meet 10% of
the total demand for warehouse rack in Bangladesh within next
five years.
5. Product Mix & The production capacity of the project has been estimated to be
Capacity: worth approximately BDT 100 crore per year
6. Implementation The project will be established with financial assistance from the
Plan: bank and equity capital of the sponsors
7. Investment Sanction of Long-Term investment of BDT 29.60 Crore for the
Proposal: establishment of the plant and building and BDT 36.21 Crore of
Working Capital for smooth operation of the business
8. Land: The project is located on a piece of land measuring 100decimal.
The value of the land has been estimated at BDT 2 crore including
cost of registration in the name of the company
9. Factory Shed and The value of the factory shed and other civil works has been
Other Civil Works: estimated at BDT 3.5 Crore including electrification, substation,
machinery room, office room, raw materials go down, boundary
wall etc.
10. Machinery to be Most of the machineries will be imported at a total cost of BDT 19
Imported: Crore
11. Technical Services The technologies involved in manufacturing of warehouse rack are
and Quality yet to be introduced in Bangladesh. Therefore, technical expert
Control: with required experience will be involved in the project.
12. Erection and Machinery will be installed, commissioned & taken into operation
Installation: under direct supervision of the erectors to be deputed by the
respective supplier. An amount of BDT Crore has been
earmarked for the purpose of civil, mechanical and electrical
works for erection of the same.
13. Employment Job opportunities for 50 personnel of various categories would be
Generation: created

iii
14. Contribution to The project will contribute BDT. 12 Crore per annum to the GDP
GDP:
15. Debt Service The debt-service coverage ratio of the project works out to 2.09,
Coverage Ratio 2.60, 2.90, 2.60, and 3.16 times during the first five years of
(DSCR): projected operation of the project
16. Break-even point The project is expected to break-even at 80% of the rated capacity
(BEP): utilization with sales volume of BDT 80 Crore
17. Cash/fund flow The cash flow statement based on the profitability estimate is
statement: shown in financial aspect. The projection indicates that the
concern will have adequate cash generation to meet all the
operational expenses, pay for its investment-obligation and a
reasonable
surplus to pay dividend, etc.
18. Projected Balance The projected balance sheet of the company is shown in financial
Sheet: aspect. The concern is expected to maintain a healthy financial
position during the operational life.
19. Sensitivity The critical variables to which the financial viability of the project
Analysis: is sensitive have been identified to be cost of production and price
of output. Necessary sensitivity has been made and the project
withstands the tests.
20. Conclusion: The project proposal is found technically feasible, socially and
economically desirable, financially rewarding and commercially
viable. The project proposal may, therefore, be considered
suitable for funding & investment.
21. Profitability & The year-wise i.e. 1st year to 5th year operating profit in BDT of the
Result of Financial project on completion and the results of financial analysis are
Analysis: shown as follows:
69,712,358.70 108,358,658.77 129,567,589.30 125,152,525.20 170,371,555.32
22. Assumption:
a) Repayment 5 Years excluding grace period
period
Term
Investment
b) Grace 12 months
Period
 23. Project Initiation Timeline:

Following chart illustrates the order of activities involved within the initiation stage of the
project. The initial year of the project has been divided in four quarters during which different
aspects of the setting up will be carried out.

Task Q1 Q2 Q3 Q4
Land Development
Factory Setup
Electrification
Raw Material Procurement
Trial Production
Commercial Production
 Table of Contents

Abstract

Synopsis of the Project.....................................................................................................................ii

Executive Summary.........................................................................................................................8

Introduction :
Introduction 12
Literature Review 12
Objective of the Study 13
Justification of The Project 13
Methodology 14

Importance Of Racking For Warehouse Storage:

Highlights of the Existing Businesses of the Promoters................................................................10

All About Step Engineering Ltd......................................................................................................12

Management of the Company...................................................................................................12

New Journey as a New Project..................................................................................................12

Justification of the project.........................................................................................................13

Industry Trends of warehouse racking

Demand Throughout the world

Growth in E-Commerce to Boost the Warehouse Racking Market

Business Environment of Warehouse Rack Manufacturing in Bangladesh...................................15

Evolution of Industrialization in Bangladesh.............................................................................15

Impact of industrialization in Bangladesh.................................................................................16

Establishment of Special Economic Zones in Bangladesh.........................................................18

 Rise in E-Commerce in Bangladesh............................................................................................20

Prospect of Warehouse Rack Manufacturing Facility...............................................................20

Management Aspect......................................................................................................................23

Board of Warehouse Manufacturing Business of Step Engineering Ltd...................................23

Company Overview....................................................................................................................25

Marketing Aspects.........................................................................................................................27

Benefits Offered.........................................................................................................................27

Market Needs............................................................................................................................28

Competitive Advantage.............................................................................................................28

Advertising and Promotion........................................................................................................28

Nationwide Connectivity...........................................................................................................28

Pricing Strategy..........................................................................................................................29
Technical Aspects...........................................................................................................................31

Types of Racking System by the type of load

•Warehouse management

Correct use of forklift trucks

•Control, maintenance, and periodic replacement

•Staff training and advice

Raw Material of Industrial Racking........................................................................................32

Profiling process.....................................................................................................................33

Welding process.....................................................................................................................34

Finish of the racking components.........................................................................................35

Packaging of uprights and beams..........................................................................................37

Product storage.....................................................................................................................37
Financial Aspects............................................................................................................................39

Project Cost Detail.....................................................................................................................39

Proposed Financing Source........................................................................................................40

Working Capital.........................................................................................................................40

Revenue Projection....................................................................................................................41

Profitability Ratio.......................................................................................................................41

Cost of Goods Sold.....................................................................................................................42

General, Administrative & Selling Expense...............................................................................42

Loan Repayment........................................................................................................................43

Statement of Cash Flow.............................................................................................................45

Breakeven Analysis....................................................................................................................46

SWOT Analysis...............................................................................................................................48

Concluding Remark........................................................................................................................50

Sales Revenue............................................................................................................................50

Net Profit....................................................................................................................................50

Pay Back Period..........................................................................................................................50

Risk & Mitigation........................................................................................................................51

Financial Risk..........................................................................................................................51

Financial Risk Mitigation........................................................................................................51

Business/Industrial Risk.........................................................................................................51

Business/Industrial Risk Mitigation:......................................................................................52

Management Risk..................................................................................................................52

Management Risk Mitigation:...............................................................................................52

Security Risk...........................................................................................................................52
Security Risk Mitigation.........................................................................................................52

Relationship Risk....................................................................................................................52

Relationship Risk Mitigation..................................................................................................53

Executive Summary
This Project Report entails a detailed description of establishment of a warehouse rack
manufacturing facility with a yearly capacity of producing BDT 100 crore worth of warehouse.

Industrialization is on the rise in Bangladesh, as we are steadily transitioning from an agrarian

economy to a manufacturing one. The government of Bangladesh have taken substantial steps
towards encouraging both local and foreign investment by establishing economic zones around
the nation. The industrial sector has historically been the sector that has driven growth as
countries have moved from low to middle income status. This is because industry can provide
high-wage employment for large numbers of workers and can raise social productivity by
producing high-value goods on a mass scale. Poor countries can earn valuable foreign exchange
by exporting manufactured products and the foreign exchange can be used to invest in newer
machines and technologies so that a rapid move up the technology ladder becomes possible.

Experts are expecting a significant surge in industrialization by 2025 in Bangladesh, with the
extensive rise in economic zones, both by the government and private entities. Moreover, the
global warehouse racking market is poised to grow by $ 1.35 bn during 2020-2024, progressing
at a CAGR of over 5% during the forecast period. The report offers an up-to-date analysis
regarding the current market scenario, latest trends and drivers, and the overall market
environment.

Increasing demand for storage and warehousing has been instrumental in driving the growth of
the market. However, fluctuations in raw material costs might hamper market growth. With the
development of extensive economic zones around the country, the total yearly market for
warehouse rack in Bangladesh by 2026 has been expected to reach over BDT 500 crore.
However, with efficient management and prudent growth strategy, the business of Step
Engineering Ltd. In delivering international standard warehouse rack is projected to acquire
over 10% worth of the market by 2026.

2.1 Objective of the Study

8
 Setting up of warehouse rack manufacturing plant is a phenomenon that will have strong impacts
over a number of issues which include Social, Economic and Environmental Impacts along with
Financial. The objective of this study is to analyze the different impacts along with financial viability
of the project.

 To determine the financial viability and feasibility of the project to be implemented.

 To determine the importance of location and land for warehouse rack manufacturing plant with
justification.
 To ascertain the capacity of the machinery & equipment to be used for the warehouse
racking manufacturing plant.
 To determine the Design, Drawing & Specification of the machinery & equipment to be
used in the plant

Justification of the project

The racking market in Bangladesh is growing at a rapid pace, mainly due to the rising demand
for efficient warehouse storage systems. The storage systems provide comprehensive intra-
logistics solutions for supermarkets and jumbo retailers. Due to the rapidly growing eCommerce
sectors ,different heavy and middle industries throughout the country ]in Bangladesh, there is
a huge demand for adjustable pallet racking and drive-in racking systems equipped with a high
storage capacity.

Besides, large grocery stores with different temperature storage zones that need heavy-duty
shelving racks adapted to the type of product stored, such as temperature-sensitive frozen
products, substantiate the market size. The market growth is directly related to the rising
landscape of international trades and the global economy. Therefore, the market is forecasted
to witness significant traction in the years to come.

9
 2.1 Methodology
For evaluating the various impact of the project, we have undergone a study where we have
taken the qualitative approach of research methodology. We have taken in-depth
interviews with different stakeholders of the project and analyzed the public data.
In addition, we have also analyzed the secondary data received from different published
sources and draw a conclusion based on valid economic and socio-political theory and
practice.
In this study we have focused on the following in addition
 Basic data have been analyzed.
 Different technical aspects of warehouse manufacturing plant Industry have been discussed.
 The market demand and prospect of such product has been taken into account.
 Financial appraisal has been done in details. In this step financial feasibility study of the
project will be accomplished. Cost of the Business, Financing Plan, Working Capital
Assessment, 5 years Earning Forecast, Sales Revenue, Sensitivity Analysis, Raw Material
Estimate, Cost of Goods Sold (COGS), Break- Even Analysis (BEP), Debt Service Coverage
Ratio (DSCR), Forecasted Cash Flow (CF), Projected Balance Sheet (BS), Internal Rate of
Return (IRR) has been determined.

MISSION.
“Our purpose is to develop industrial and commercial storage solutions with superior
standards of quality, integrity, with cost-effectiveness. We are assisting our clients in
creating a productive and efficient work environment.”
VISION.
“To be the preferred supplier of industrial and commercial storage solutions throughout
Bangladesh.”
VALUES.
The values the team at Step Engineering Ltd. Stand by include; Honesty, Loyalty,
Accountability, in addition to Continuous Improvement.

Importance Of Racking for Warehouse Storage:

warehouses are very important if you wish to increase your production and revenue, whilst preserving the quality of
your goods. In fact, many small firms don’t have a warehouse and store finished products in the same place where
they produce them; hence warehouses are a specifically designated storage location that help free up space in the
production area.
Let’s assume that a warehouse is full and there is no more space to store the products, .then It would be difficult to
construct another warehouse as that would take time and as a result affect production and revenues. Another option
could be to rent a new warehouse, but such a solution can only be temporary. So what is the most ideal solution to
tackling such an issue? The answer is: ‘optimum space utilization’. Through optimum space utilization, one can
effectively store goods in their existing warehouse without the need for much expenditure. How? This can be
achieved with the help of a warehouse racking system.
A warehouse racking system allows one to stack materials in horizontal rows with multiple levels. This aids in the
better management and utilization of warehouse space and also helps to organize cargo to streamline operations. So
why would a warehouse racking system be important and how is it beneficial? After that, let’s take a look at what
factors one needs to consider before installing a warehouse racking system.
Importance of warehouse racking system

 Optimized storage

Installing a warehouse racking system is highly efficient as it optimizes (or creates more space in) the warehouse.
This means more storage space and hence allows manufacturers to increase production. One can simply use forklifts
to reach these racks and either store or remove products. Pallet racking for warehouse storage is an ideal choice to use
the space efficiently.

 Safety

With the warehouse racking system, it is easier to improve and manage safety of both the products and employees.
These racks are customizable and hence they can be adjusted such that they meet the safety standards set, thus
creating a safe work environment. It is important to train employees who may be new to working with warehouse
racking systems, so that they can take safety measures while working.

 Quick access and convenience

A warehouse racking system can be arranged in such a manner that it can be quickly accessed and the access/storage
of goods is convenient.

 Better management

The warehouse management system helps to better manage and organize the storage of goods in a warehouse to
contribute to increased efficiency, quick access and convenience.
Factors to consider before installing the warehouse racking system:
There are various factors that one needs to consider before installing a warehouse racking system. They include:
● Budget for construction
● Floor utilization
● Storage utilization
● Adaptability
● Forklift access
● Safety regulations
● Scope for quick access and convenience

Market Summary

The global Warehouse Racking market is forecasted to grow at a rate of 3.5% from
USD 8.52 billion in 2019 to USD 11.02 billion in 2027. The increased demand for
capacity expansion in warehouses and storage facilities is expected to stimulate the
market over the forecast period. Growing demand and the need for systematic
storage and secure handling of materials should support the growth of the industry.

Increased awareness of the optimal use of space through supply channels, such as
distribution centers, storage services, and stockyards, is likely to foster growth in the
industry. Warehouse racking offers cost-effective and systematic storage operations
for bulky and fragile objects. Besides, the long service life of the metal rack frame is
expected to increase in popularity over the forecast period.

A well-established distribution network and a growing e-commerce industry in the

Bangladesh have contributed to the growth of the industry. Warehouses are thus
influencing the market on a positive note. Also, the acceptance of modern automated
equipment in storage systems has encouraged demand for direct access to racking
systems in the country.

Warehouse racking systems are mainly made from structural steel and other metals
such as iron and aluminum. Manufacturers' technical innovations to introduce a rigid
rack frame, pallets and fasteners have improved the lifespan of warehouse racks. The
above factors are likely to stimulate demand for products in heavy applications such
as industrial machinery and the automotive industry.

These systems are considered to be cost-effective and efficient warehouse

management techniques. Pallets used in structures can support heavy loads, are easy
to maintain, can be easily relocated, and restructured according to the dimensions of
the warehouse. The transfer of consumer preferences from traditional shelves to
racking structures to use and improve existing storage facilities should help the
market. These racking systems can be installed depending on the availability of
warehouse space and the desired form of storage. Besides, the possibility of
restructuring racks according to the dimensions of an object is likely to propel their
demand.

Warehouse pallet racks help in increasing the storage density of the products. The
costs related to the racking increases with an increase in storage density. Pallet
racking as gained traction in the past few years with people buying more stuff and
reduction in living space. An increase in demand for warehouse shelving has
augmented the market’s demand. Industrial warehouse shelving is also propelling the
demand.

Type Outlook:

In 2019, the selective pallet racking system became the most significant category by
type. It offers easy replacement of damaged parts and adjustments of metal beams
for different heights and pallet housings. A simple design structure coupled with a
layout for secure handling of objects in this type of racking met its request.
Direct access racking systems are gaining popularity as these products provide easy
access to objects. Forklifts and hydraulic machines allow easy access to objects
between the racks. However, the high cost associated with installing these racks is
likely to hamper the growth of their market.

Demand Throughout the world

Carrying Capacity Outlook:

Medium-Duty Racks are the most commonly used type of racks. It is generally
composed of the mainframe and a sub-frame. The sub-chassis can be combined in
several ways to reduce costs and increase load capacity. The medium-sized shelf has
a unique shape, reasonable structure, practical assembly and disassembly, free
adjustment of the layer height of 50 mm, no need for screws, and durable and robust
bearing capacity, extensively used in shopping malls, supermarkets, corporate
warehouses, and institutions.

End-Use Industry Outlook:

Retail application accounted for the largest share of rack system consumption in
2019 and is expected to grow at a CAGR of 3.7% over the forecast period. Growth in
the retail sub-segments, such as online retail, hypermarkets, supermarkets,
convenience stores, and food retail, is also expected to sustain growth in the sector.
The expansion of multinational retail companies in developing regions is also
expected to support the market.

Automotive applications accounted for a significant share in 2019 due to the need for
extensive and robust racking systems to store heavy and fragile items. The growth of
the automotive industry around the world has paved the way for the construction of
new warehouses. The growing demand for components in the automotive aftermarket
is expected to contribute to the expansion of warehouses, thus influencing the
industry on a positive note.

In 2019, the application of food and beverages represented the second-largest share
of the world market. Increased consumption of packaged and processed food
products in major regions, including Asia-Pacific and North America, is expected to
support industry growth over the forecast period. Rapid growth in the retail industry
due to increasing urbanization increased disposables, and changing consumer eating
habits is expected to boost demand for warehouses, which will have a positive impact
on the market.
Regional Outlook:

North America dominated the global warehouse Racking market in 2019. A well-
established distribution network, early adoption of racking systems, and continuous
innovations in optimizing storage space resulted in a strong demand for racking
structures in the region. The growth of the retail and food industries in the region is
the main contributor to the development of new warehouses, which in turn is
expected to stimulate demand for products.

In Asia-Pacific, the food and beverage and retail industries are expected to account
for significant consumption of racking systems during the forecast period. High
population growth rates in China and India, which in turn creates a high demand for
packaged food, is expected to stimulate the retail sector in these countries, thereby
positively impacting the warehouse racking market.
Highlights of the Existing Businesses of the Promoters

The promoters of Step Engineering Ltd. have been successfully running a portfolio of businesses

with a cumulative turnover of BDT 130 Crore in 2020. The portfolio of businesses owned and

run by the promoters include Printing, IT, Design, Branding to name a few. The business has

been growing steadily over the last the decade . The business is closely managed by a group of

professionals who constitute the board of the directors.

Across the entire company, operating models are being made effective, fast and simple to

continuously improve the competitiveness of the processes and structures by the promoters.

The promoters are committed to acting as responsible business and are dedicated towards

respecting the diversity of opinion and constructive exchange of ideas. Following are the key

metrics regarding the businesses currently run by the promoters:

 Over 1100 manpower all over the country.

 Highly educated and trained skilled people.

 15% female employees currently recruited.

 Over BDT 130 Crores of revenue.

 Dedicated employee salary fund.

Global Trends in
Warehouse Rack
Manufacturing
Segmentation:

The pallet racking market analysis is segmented into system type, racking system type,
frame load capacity, end-use industry, and region. The system type segment is sub-
segmented into conventional, mobile racking, shuttle racking, and hybrid/customized racking.
Among these, the hybrid/customized racking segment accounts for the largest market share
due to its multiple applications of customized racking in almost all small-scale and large-scale
warehouses.

The racking system type segment is sub-segmented into cantilever, selective, push back
racking, drive-in racking, pallet flow racking, carton flow racking, and others. Among these,
the selective racking segment accounts for the largest market share as this racking system
offers wide access to every location, giving users flexibility in storage and product
retrieval. Additionally, its low installation cost and benefits in space utilization boost the size
of the segment.

The frame load capacity segment is sub-segmented into Up to 5 Ton, 5–15 Ton, and above
15 Tons. The end-use industry segment is sub-segmented into automotive, food & beverage,
retail, manufacturing, warehouse & logistics, and others. Among these, the warehouse &
logistics segment accounts for the largest market share owing to the growing e-commerce
logistics market. The region segment is sub-segmented into the Americas, Europe, Asia
Pacific, and rest-of-the-world.

Regional Analysis

Asia Pacific dominates the global pallet racking market due to the increasing numbers of e-
trailers and growing eCommerce markets in the region. Besides, the strong presence of
major pallet racks providers and the rise in transportation and logistics infrastructure
development boost the region’s market share. 

Rapid industrialization in China, India, and other emerging economies in the region creates
significant growth opportunities. The APAC pallet racking market is projected to retain its
dominance throughout the assessment period.  

North America accounts for the second-largest market for pallet racking, heading with the
increasing trade activities between the region and most European and APAC countries.
Additionally, the growing demand from the burgeoning transportation and logistics (TPL)
industries and eCommerce sectors drives the market demand. 

The US, with its largest import-export sector, dominates the regional market. Moreover, vast
investments for developments and upgrades in the pallet racking industry increase the
region’s market share. The North American pallet racking market is anticipated to witness the
fastest growth during the forecast period. 

The European pallet racking market has emerged as a profitable market globally. Increased
demand for foreign goods has strengthened the trade relations of the region. Furthermore,
the vast adoption of pallet racking solutions for storage in industrial goods sectors in the
region increases the market share. Growing e-commerce businesses and manufacturing
sectors in the region boost the growth of the market. 

The rising demand for packaged food and beverages is one of the major factors that will drive market
growth. The purchase volume of products is increasing due to the increasing population and economic
growth across the world. The food and beverage industry is witnessing intense competition among food-
producing companies. This has induced companies to focus on offering better services such as faster and
in-time deliveries of products. As a result, these companies set up warehouses and warehouse storage
racks near the cities. This drives the need for racking to optimize warehouses, driving the market growth.
In current years, many large brands have started to establish an automated multi-dimensional racking system
for their warehouse management. Most of the brands now paying attention to the automation of their
warehouse racking system.
 Growth in E-Commerce to Boost the Warehouse Racking
Market:
With the advent of internet and smartphones around the nation, several local and global
ecommerce platforms have gained a formidable share within the market. Due to lack of proper
data, there are different estimation about the potential size of the future of ecommerce in
Bangladesh. Since timely delivery and adequate storage in warehouse is a prerequisite for
uninterrupted delivery of goods by large ecommerce platforms, they are expected to drive
demand for warehouse racks substantially

Technavio analysts highlight the following three market drivers that are contributing to the growth of the
global warehouse racking market:

 Increasing warehouse space optimization

 Rising demand for packaged food and beverages
 Growing e-commerce sales increasing the demand for warehouses
Technavio’s sample reports are free of charge and contain multiple sections of the report including the
market size and forecast, drivers, challenges, trends, and more.
Increasing warehouse space optimization

All companies cannot afford new warehouses for their requirements. The rents of multitenant distribution
warehouses have been increasing in the range of 13%–16% from 2013 to 2016 in the US. Due to this,
companies are trying to increase their warehouse storage capacity using the space that is already
available. It is observed that when the warehouse of a company exceeds the storage capacity by around
75% to 85%, the productivity level of the warehouse decreases.

Racking systems, such as drive in or drive through racks and mezzanine flooring warehouse racks, help to
utilize the space efficiently by increasing the storage density. As companies try to optimize their
warehouses, the need for racking which ensures optimal utilization of space goes up, thereby increasing
the warehouse racking market.
Rising demand for packaged food and beverages

With the rising population and economy in general, the number of products being purchased is increasing.
The global packaged food market is expected to grow to USD 2.74 trillion in 2021. Moreover, the rising
competition among food producing companies to provide better services like faster and on-time deliveries
of products has led to the need to set up warehouses near the cities.

According to Shakti Jakhar, a lead analyst at Technavio for warehouse and storage research, “The
rise in the consumption of packaged food and beverages is expected to increase the demand for
warehouses near the cities so that on-time delivery can be provided. This augurs well for the growth
of the global warehouse racking market during the forecast period.”

Growing e-commerce sales increasing demand for warehouses

Mass online retailers, such as Amazon, have increased the size and locations of their warehouse
distribution centers. To increase the speed of delivery, warehouses are required to be located close to
population centers. This has caused a major growth in the overall warehouse needs, especially in the
major metropolitan areas, such as Kansas City, in the US.

It is observed that e-commerce requires almost two to four times as much space as other warehouse uses.
Along with this, it is also observed that for every USD 900 to USD 1,200 million in new e-commerce sales,
there is a requirement of about 800-1,200 million sq. ft. of additional distribution space
Business Environment
of Warehouse Rack
Manufacturing in
Bangladesh
Business Environment of Warehouse Rack Manufacturing in
Bangladesh
Evolution of Industrialization in Bangladesh
After the liberation war in 1971, the country was left in dire states, the industrial development
was very slow. However, Readymade Garments (RMG) started during this period. And in this
sector, Bangladesh could lay claim to considerable success. Today garment export is the main
source of foreign exchange earnings. Its success was not necessarily influenced by government
policy but essentially by outside forces. It originated in the 1970s when the investors of other
South East Asian nations ventured to set up garment factories in Bangladesh and to work
around the export quotas imposed on their native countries by the United States. In the 1980s,
the Pharmaceutical Sector made advancement in Bangladesh. Itis one of the most developed hi
tech sector which is contributing in the country's economy. After the circulation of Drug Control
Ordinance-1982, its development accelerated. During the 80s, other sectors like tea
manufacturing, leather factories etc. also gained importance. In 1990s, sectors like
shipbreaking, steel, cement and cold storage goods etc. developed and gained momentum.
From 2000 to 2012, many industries started their journey successfully, and contributed to the
economic growth of Bangladesh. Among them are electronics, glass, aluminum, plastic, cycle,
and ceramic etc. industries. To sum up the whole thing, we can say that after 1971, Bangladesh
has been slowly and steadily turning its attention to develop its economy, through industrial
development, moving further away from the agricultural sector.

The industrial sector has historically been the sector that has driven growth as countries have
moved from low to middle income status. This is because industry can provide high-wage
employment for large numbers of workers and can raise social productivity by producing high-
value goods on a mass scale. Poor countries can earn valuable foreign exchange by exporting
manufactured products and the foreign exchange can be used to invest in newer machines and
technologies so that a rapid move up the technology ladder becomes possible. The average
productivity of industry is higher than in agriculture or most service-sector activities, so as
people move out of agriculture into industry, Gross Domestic Production (GDP)increases.
Bangladesh as a country with a poor land-person ration is unlikely to prosper through
agricultural growth alone. Agriculture is unlikely to deliver rapid growth in Bangladesh because
of the difficulty of setting up large-scale farms that can compete with countries that specialize
in agriculture such as Australia or Argentina. Bangladesh has natural resources but that can be
exploited, with the exception of natural gas. Thus, industrialization and specialization in
manufacturing is the obvious way in which Bangladesh can raise its per capita income and social
productivity. The industrial sector consists of manufacturing, together with utilities (gas,
electricity and water) and construction main industries, textiles and apparel, jute, sugar, tea,
leather, telecommunications, pharmaceuticals, cement, ceramics, shipbuilding, fertilizer, food
processing, paper newsprint, light engineering, etc.
Impact of industrialization in Bangladesh
Following are the primary and secondary consequences expected out of the increase in
industrialization in Bangladesh.

•Play a major role in economic development

•Provide a secure basis for a rapid of growth of income.
•Help in raising the standard of living
•Provide employment, meeting high income demands
•Brings in technological progress and change in the outlook of the people
•Has decreased the dependency on foreign resources

Since the 1990s, Bangladesh has done well in terms of increasing growth. It is apparent that the
modest growth that we had during the seventies and eighties has been overtaken by recent
growth, especially during the last few decades. Even though the growth is sustainable, it cannot
be taken for granted.

It is important to mention here that private sector investment used to be the main source of
overall growth. However, since 2010, the private sector input has stagnated, not increasing
much. The amount of overall growth, in relation to the level of private sector investment, is
linked to the latter. We are achieving growth rates now which are not compatible with the
number of investments we are making into the economy.

As the country moves upwards in regards to prosperity, technological innovation comes into
the picture, with capital-intensive factors being essential. The incremental capital output ratio
which we needed in the past to generate one unit of income is no longer applicable amidst the
current scenario. For example, farmers nowadays require various equipment in order complete
their tasks, which is a vast difference to common traditional methods. Thus, capital-intensity
has increased in all kinds of sectors in the country. The experiences of China and Korea show
that as they have increased their per capita income, their incremental capital output ratio has
increased. This is because labor becomes costly, therefore substitution of labor results as a
natural phenomenon, as more capital is utilized.

For a country to sustain its growth, the whole social fabric needs to be improved. Human
capital, education, health, social protection, alleviation of property, and infrastructure are
elements of that and investments are needed in each section. We need to mobilize our
revenues significantly. Bangladesh has miserably failed in revenue mobilization. Bangladesh's
tax-to-GDP ratio has been a matter of concern in the Five-Year Plans. In fact, since the Sixth
Five-Year Plan to present time, in spite of targets being set in the plans for an increase in the
tax-to-GDP ratio, it has actually decreased. It now stands at 9.2 percent, which is a huge
obstacle for the further development of Bangladesh. It must change in order for us to graduate
to an upper middle-class nation. The government might find it tough, therefore, to maintain a
credible fiscal policy. During the last 10 years, we have actually weakened our whole financial
system. All the indicators show that we are well below the previous levels of 2010 in regards to
the financial sector. That is not something
which can provide good support for an increase in Bangladesh's growth rate. These are
fundamental weaknesses we must work on.

Our current total annual foreign aid constitutes for about two percent of our total GDP. Our
total investment required in the economy is growing quickly. The government needs to spend
and invest a lot. Health, where 0.6 percent of our GDP is spent on, is something of note. In
industrial countries, this percentage is usually seven, eight or even nine percent. Bangladesh
spends about 2 percent of its GDP on education, which is again an indication of our nation's
resource- scarceness. We must be aware of the need to use our resources efficiently. We are
not getting the right quality of services, and in addition, the infrastructures which are being
invested on, are of low quality. We are, thus, not getting value for money. That is an area which
needs to be looked at.

The export-oriented faction of Bangladesh's industrialization is dominated by the presence of

the RMG sector. Bicycle export had made a mark, but stumbled soon. These cater to the
domestic market, usually not being efficient. That is one type of industrialization, where costs
are high and the overall quality is usually low. Tariff barriers are usually put onto goods coming
into Bangladesh, where high interest rates and customs duty are major obstacles. Bangladesh
has one of the highest tariff protections in the world. The average effective rate of protection is
at 27.5 percent, whereas, rates of other Asian countries linger at about 4 percent. We even
have high protection on biscuits, an industry where we have been active, locally, for more than
a hundred years.

We are at the first level of the industrial ladder. The garments sector is considered to be the
very first step of industrialization. Vietnam has now moved to the third level of industrial
ladder. This is the level which includes electronics. The second level, in between, is light
engineering related, manufacturing cycles being an example. Bangladesh has stumbled in the
second level, where we have not been able to make much advances. We do not have anything
to show for the third level. Thailand is producing 2 million units of cars every year, out of which
they are selling 800,000 units domestically and exporting the rest. They also export automobile
parts, on its own billion-dollar industry. Bangladesh is an import-oriented country. In our
country, 30,000 new cars get registered every year. So, there is a stark difference between
countries like Thailand and Indonesia and us.

We are at the bottom of the industrialization ladder and we have failed to move upward. We
have had some flickers of success, like the ship-building industry. Historically, the RMG sector
has been the industry which has been depended upon by almost all countries as the first step in
the path to industrialization. RMG was started in the United Kingdom, then moved to the
United States of America. It then caught on in Eastern Asia (Japan, Korea, China) before arriving
in Bangladesh. But Bangladesh has been stuck in the RMG sector for the last four decades in its
path to industrialization—we didn't move up the industrial ladder.
Establishment of Special Economic Zones in Bangladesh
The government recognizes that inadequate basic infrastructure and a severe shortage of
accessible land discourages greenfield investments and industrial development.

Bangladesh has one of the world’s most cost competitive, sizeable supply of labor, ideal for
labor- intensive production in sectors such as garments, footwear, leather products and toys.
However, despite large development success fueled by RMG, microfinance, and remittances,
three out of five Bangladeshi workers still find themselves in vulnerable employment. The
country also has one of the world’s highest population densities and some of the land is either
occupied or inundated by water. Coupled with an underdeveloped power sector, a challenging
land records and titling system, and the uncertainty associated with regulatory red-tape,
investors seek safe havens with quality infrastructure and services for their investments.
Bangladesh has a disappointing track record of attracting foreign direct investment (FDI),
especially compared to countries in East Asia. The supply of serviced land with improved
governance could potentially help attract more investment.

The Bangladesh Export Processing Zones Authority Act of 1980 was aimed to boost
industrialization and job creation through the promotion of trade and investment and it has
had some success.

The Act led to the establishment of the semi-autonomous Bangladesh Export Processing Zones
Authority (BEPZA), which leases serviced land to industrial tenants in eight export processing
zones (EPZs) across the country, primarily focused on the garment sector. Investors enjoy
several incentives of a fiscal (tax holidays, duty free imports, exemptions of dividend tax, etc.)
and non- fiscal (100 percent foreign ownership permissible, full repatriation of capital and
dividend, etc.) nature in addition to a host of support services aimed to help investors navigate
the formidable bureaucracy linked to doing business. In July 2017, BEPZA hosted 463 tenants in
both RMG and non-RMG sectors (like chemicals and footwear) —56 percent of which were fully
foreign-owned, 16 percent were joint ventures between foreign and domestic investors and the
remaining were local ventures. BEPZA estimates that in the two decades until FY2017, the EPZs
attracted US$4.3 billion of investment (average annual FDI inflows in Bangladesh are about
US$2 billion), contributed to US$59.4 billion of exports earnings (19 percent of the total in
FY2017) and employed 481,000 direct workers. The trend now is to move away from the EPZ
model, because it has weaker domestic linkages and instead cater both to the domestic and the
export market. The goal is also to crowd in more private participation in developing and
operating zones.

The Bangladesh Economic Zones Authority Act and the Bangladesh Hi-Tech Park Authority Act
—both of 2010—created two more agencies like BEPZA and these three agencies have
overlapping mandates.

The two new acts led to the creation of two new semi-autonomous agencies—the Bangladesh
Economic Zones Authority (BEZA) and the Bangladesh Hi-Tech Park Authority (BHTPA)—tasked
to oversee the expansion of economic zones (EZs) and hi-tech parks (HTPs) in the country.
These
new types of zones operate under different regulatory regimes from BEPZA, and allow for
production aimed both for domestic and foreign markets. BEZA aims to develop 100 EZs by
2025, including in underdeveloped regions. Unlike the EPZs that are publicly owned and
operated by BEPZA, BEZA and BHTPA would rely mainly on private capital and expertise to build
and operate the new zones but with important government oversight. Thus, Bangladesh has
today got three agencies that sometimes compete for the same investors although they come
with somewhat different rules and have different offerings. In addition, other agencies like the
Bangladesh Small and Cottage Industries Corporation also develops some industrial
infrastructure for manufacturers.

Bangladesh’s development agenda using special economic zones is affected by internal and
external challenges that the government will need to address.

These include:

Legal and regulatory mandates: The multitude of public agencies with sometimes overlapping
mandates offers choices to prospective investors but it is a complex and sub-optimal approach
to development. The legal framework for public private partnership based institutional
arrangements will need to be carefully laid out with a clear perspective on fiscal contingent
liabilities.

Governance and technical capacity: Apart from BEPZA that has nearly four decades of
experience, the new agencies tasked with the expansion of industrial infrastructure are young
institutions and it will take time to build the technical capacity to be effective regulators and
partners in negotiations with leading industry groups and foreign multinationals. Political
interference in site selection can be a threat to investment decisions and the ability of senior
management to handle such pressure will be crucial.

Safeguards management: Social and environmental safeguards management is constantly in

the focus and an area where the agencies and ministries will need to strengthen technical
capacity, probity and enforcement. The destructive forces of climate change are also having an
increasingly negative impact along rivers and coastal areas where many SEZs are situated due to
land scarcity.

Connections to the national investment climate: The attractiveness of Bangladesh as an

investment destination is dependent on the stability of its economic policies, the playing field
that the government offers investors, the overall governance situation outside the SEZs, and the
efficiency of transport and logistics networks connecting the SEZs to air- and sea-ports.
Prospect of Warehouse Rack Manufacturing Facility
Experts are expecting a significant surge in industrialization by 2025 in Bangladesh, with the
extensive rise in economic zones, both by the government and private entities. Moreover, the
global warehouse racking market is poised to grow by $ 1.35 bn during 2020-2024, progressing
at a CAGR of over 5% during the forecast period. The report offers an up-to-date analysis
regarding the current market scenario, latest trends and drivers, and the overall market
environment.

The market is fragmented, and the degree of fragmentation will accelerate during the forecast
period. Daifuku Co. Ltd., Honeywell International Inc., Interpol Holding AG, Kardex AG, KION
GROUP AG, Mecalux SA, Murata Machinery Ltd., SSI SCHAEFER Group, TGW LOGISTICS GROUP,
and Toyota Industries Corp. are some of the major global market participants. To make the
most of the opportunities, market vendors should focus more on the growth prospects in the
fast- growing segments, while maintaining their positions in the slow-growing segments.

Increasing demand for storage and warehousing has been instrumental in driving the growth of
the market. However, fluctuations in raw material costs might hamper market growth. With the
development of extensive economic zones around the country, the total yearly market for
warehouse rack in Bangladesh by 2026 has been expected to reach over BDT 500 crore.
However, with efficient management and prudent growth strategy, the business of Step
Engineering Ltd. In delivering international standard warehouse rack is projected to acquire
over BDT 70 crore worth of the market by 2026.
Management Aspect of
Warehouse
Manufacturing Plant
Management Aspect
Warehouse racking, also known as storage or pallet racking, is a material handling system
suitable for mass storage of goods unitized on skids or pallets. It allows efficient utilization of
space while providing easy access to stockpiled items for better inventory control. Racks are
used by manufacturers for mass storage of mostly non-perishable products when storage space
is not enough. Palletized products are usually stacked up to not more than three layers before it
becomes unsafe and prone to collapse. A racking system enables the manufacturer to store
palletized products for up to five to seven stacks high, depending on the available height.

Aside from finished goods handling, racking systems are also used for raw material and parts
storage. Selective racking can be designed so that the greatest number of items can be
accessed permitting high variety. Also, some distribution systems favor the use of FIFO or first-
in, first-out method of inventory control. Having a racking system provides access to the oldest
items in the warehouse inventory allowing them to be off-loaded first.

Board of Warehouse Manufacturing Business of Step Engineering Ltd.

The limited company focused on building warehouse rack would be run by an efficient
management team which will be supervised by the board of directors.

Step Media is practicing corporate culture and values to synchronize with our customers to
speak the same language. Being led by best people and technology, Step Media has become
one of the most respected, reputed and trusted company in Bangladesh.

There are several racking designs and configurations suited for a particular application. Storage
racks are generally divided into high-selectivity, low-density and low-selectivity, high-density
applications. Racking with high selectivity and low-density are selective, double deep, and very
narrow aisle racking systems. High-density applications are push-back, drive-in, and pallet flow.
Special systems are also possible which are basically modifications of the previous
configurations. Following is the short profile of the board members of Step Engineering Ltd.
 Mostafa Towhid Khan has a diverse professional portfolio. He
is highly experienced and has got the expertise in his line of
work to the highest level. It is to be mentioned that he had a
business set up in Moscow and get involved in direct printing
business from 1991 to 1997. He was also the member of
FESPA (Federation of European Screen Printers Associations).
So, he has got more than 8-year direct involvement with
foreign trading Europe and leading Step Media for more than
25 years of leader of the company.

Mostafa Towhid Khan

Managing Director

Mostafa Shahid Khan, a highly experienced person with

outstanding operational capabilities looks after the accounts
and factory operation of the company. He has 35 years of
professional experience in national and international arena.
His skill sets and experience covers Event management, Social
Marketing, Sports and Cultural activities etc. He is particularly
known for being committed to his duties and responsibilities.

Mostafa Shahid Khan

Director, Accounts &
Factory

Mustafa Zahid Khan is taking care of the administration and

factory production of the company. He has 30 years
professional experience having 15 years work experience of
national & international events organizing and activation. His
skill sets and expertise envelopes Marketing, Sports, Event
Management, Creative Idea, Branding & Communication.

Mustafa Zahid Khan

Admin & Factory Production
Company Overview
The Warehouse Rack manufacturing facility will be run as an independent limited company. The
experienced direction of the board of directors is expected to establish Step Engineering Ltd.
into the largest warehouse rack manufacturer in Bangladesh.

The table below shows the manpower requirement:

Table: Manpower Requirement

Serial Job Title Required

Number No.
1 Managing Director 1
2 Officer- Accounts 6
3 Officer- HR 8
4 Officer- Marketing 5
5 Factory Manager 2
6 Driver 4
7 Factory Supervisor 4
8 Supporting Staff 20

Figure: Organogram

Managing
Director

Head of Head of Head of Factory

Accounts Head of
Administration Procurement Managent
&Finance Marketing
& logustics

Operational Process

Over the past twenty years, many warehouse rack manufacturing facilities have switched from
conventional mechanism to automated machineries. The process starts with procurement of
raw materials. The steel case and pipes procured are then put into the profiling process which is
followed by welding the steel frame. The racking components are then packaged and stored
until those are sold.
Marketing Aspects
 Marketing Aspects
Marketing for industrial racks is very different to other forms of marketing. This type of marketing
must involve a deep understanding of customer’s challenges and business requirements.

Matching these challenges and requirements to our product benefits is the key to success. This will
position our products in a very different way to the alternatives –our competitors’ products. To achieve
this, we need to not only have quality products; we need to ensure the benefits delivered are truly
valued by our customers.

We will be articulating the value of Industrial rack to create marketing messages that will appeal to our
target market segments. That will catch their attention. And help you engage with them in a
memorable way.

Step Engineering Ltd will help other companies to manage their organizational capabilities,
rack and shelving help cut down on clutter while helping to maximize existing floor space in a
warehouse or DC. That will also allow companies to use that space in a safer and more
efficient manner—both of which can boost operational productivity. In a business
environment where labor and real estate are costly and hard to come by, these warehouse
mainstays continue to prove their worth. The companies can be more focused on
maximizing the capacity of existing floor space, more companies are asking their rack and
shelving suppliers to help them achieve that goal. Everyone is under an increasing amount of
pressure to get their products out the door as quickly as possible.

These are the some factor we will be focusing while marketing our racks
 When purchasing new or upgrading existing systems, more companies are factoring
worker safety into their plans. On a pick module, for example, safety gates help protect
personnel from potential fall hazards while allowing the safe transfer of materials onto
it.A proper rack system can help the companies to ensure safety to the workers
 Companies are also asking for new features that protect their investments, including
reinforcements that keep the rack from being damaged when hit by a forklift and nets
that prevent items from being “pushed” through the rack and onto the floor. So they
will more interested purchasing good quality industrial racks.
 companies are installing more pallet rack vertical frames, pallet race beams, and
shelving in different arrangements than they’ve historically used. So, where traditional
racking systems haven’t changed that much in recent years, where those structures
are placed and how they’re being used have changed significantly. We will encourage
them to shift from more traditional racking system to industrial racking system.

So we will need to consider what things are most important to the customers who will buy our
products and use our service. These may comprise:

 Reduction of risk – no quality issues;

 Function – no rework or downtime;
 Warranty – guarantee of support;
 Lead Times – no delays.

We will be selling large quantities of these products, we will include information about technical support,
customer service, delivery and availability. This will separate us from the pack and position our products as
leaders in their categories. We then need to go where your customers are. Market our products using mediums
that will appeal to these customers.

In order to maximize our launch, we will be needing to create a strong marketing strategy. It will guide
our marketing efforts and ensure that we get the biggest bang possible. When it comes to promoting our
new industrial products, here are 7 core tactics for the campaign.

Benefits Offered
The warehouse rack manufacturing plant will be making both adjustable pallet racking and drive-
in racking systems. The racking systems would be customized according to the needs of the
customers.

Aside from maximizing storage space, there are other benefits that make warehouse racking
feasible. These benefits can be quantified in terms of economic value or savings from leasing
additional storage space, less manpower effort, and higher throughput. On the other hand,
compliance with safety standards and quality management are other value-adding factors that do
not directly translate to savings. Enumerated below are the benefits of a warehouse racking
system.

Efficient storage space utilization: As mentioned earlier, racking takes advantage of the
available vertical space that is otherwise unused. Warehouses that are built to contain racks are
made with high ceilings to allow racks with higher bays.

Easy inventory organization: Racks can be addressed easily in comparison to stockpiling.

Storing goods with many distinct varieties is virtually impossible with stockpiling without
consuming large floor spaces. A type of racking system, known as selective racking, allows the
storing of different types of goods while keeping the consumed space to a minimum.

Fewer damaged goods: Racking systems are designed to contain goods without damaging
them. Palletized loads are not piled on top of each other which minimizes contact. Also, there is
no need to move goods from time to time to provide access to buried goods in a stockpile. Fewer
contact results in less damage.

Increased employee productivity: In a racking system, the empty pallet position can
easily be located and accessed. This allows the elimination of small unnecessary movements that
in time, stack up to significant losses.

Storage automation: Adapting a racking system is the first step to warehouse automation.
This is achieved by integrating smart conveyor systems and guided forklifts and cranes. This can
lead to significant savings in terms of manpower costs and can streamline the business process
especially for large distribution centers.

Increased safety: As long as properly designed, racking systems are safe. Beams and
columns can be made with structural steel and other high-quality materials. The steel frame,
which is missing in ordinary storage systems, serves as the backbone for supporting stacked
goods. Moreover,
The marketing tools we will be using to ensure the sales of the rack if our company

DEVELOP ENGAGING EBLASTS: When someone opts in to our email list, this is called “permission-
based marketing”. It’s a way to get our message in front of people who want to hear from us. Develop
an engaging, custom email blast (eBlast) announcing our new product. Include details, high-quality
images and a strong call-to-action.

MAKE A SOCIAL MEDIA ANNOUNCEMENT: There are many ways manufacturers can connect with
customers using social media. If we can develop a following prior to the new product launch, we will
make an announcement to our followers. They’ll be interested in the new release, and may help spread
the word.

CREATE A FEATURE ON THE HOME PAGE “The home page of our website should feature a link to
the new product’s page. This is an easy way to spread the word to new website visitors that may be
interested in the product.

SUBMIT A PRESS RELEASE: A press release is paramount to creating word of mouth buzz for any
new product launch.

PRODUCE A HIGH-QUALITY VIDEO DEMONSTRATION: If our customers would like to see the product in action,
put together a high-quality video demonstration. It can both engage customers and answer questions
that they may have about the product. Product releases can include links to YouTube.

PROMOTE THE PRODUCT AT A TRADE SHOW “Weill be showing our new industrial product launch with
a trade show promotion. This builds excitement and anticipation around a new product.

DESIGN A BEAUTIFUL PRODUCT BROCHURE: Whether we are supporting trade show efforts or passing them
out to local leads, a well-designed brochure can do wonders for our new product launch. Invest in the
product with a professionally designed sales tool.
racks can be fitted with safety devices such as motion or proximity sensors and alarms for
additional safeguards during loading and off-loading.

Clean and contaminant-free handling: By having better access, it is easy to clean goods and
storage spaces. Better segregation can be achieved to separate goods that can possibly
deteriorate or damage adjacent items.

Market Needs
Policy reforms that have improved the business landscape and ease of doing business
contribute to the market growth. Moreover, rapid globalization, alongside the growing
population and changing consumption patterns, has increased import-export activities in
countries worldwide. The rise of e-commerce over recent years has further boosted
transportation revenues.

There has been considerable growth across the supply and value chain as a whole. Vast
developments in logistic infrastructures are expected to continue till 2027. Automation in
supply chains and transportation and logistics industries has become a prevalent trend.
Strategic partnerships, especially between new suppliers & competitors and policy reforms,
alongside the increasing consumerism, increase the complexity of the already fragmented
supply chains.

Logistic leaders adapt changing landscape by improving collaboration skills, equipping their
teams with appropriate insights and eliminating existing system-wide silos. Pallet racking
provides access to a broad array of products and reduces supply chain waste and expenses,
delivering quality customer service with premium care.

Competitive Advantage
As Step Engineering Ltd will be one of the first businesses to introduce advanced warehouse
rack building plant in Bangladesh, they would be able to operate with substantial competitive
advantage over the rest of the warehouse rack manufacturers in Bangladesh. Moreover, the
promoters of the company are thoroughly connected with local and global FMCG brands which
will enable them to obtain orders and grow quickly.

Advertising and Promotion

Warehouse racking systems are required mostly by other businesses to maintain warehouse
storage of their own products. Therefore, the marketing efforts in this case has to focused on
building Business-to-Business relationship. Developing a B2B sales funnel with activated
channels such as in-person visits to email marketing, the warehouse racking system would be
marketed.

Nationwide Connectivity
With an extensive reach all around Bangladesh, the business of Step Engineering Ltd is expected
to flourish at a significant rate. The business builders of Step Engineering Ltd. are located in
almost every commercially viable city and district in Bangladesh, both within and outside FMCG
industry. The benefit of connectivity with large business districts and cities around Bangladesh,
puts Step Engineering Ltd and their warehouse manufacturing plant at a distinct advantage over
almost any other competitors.

Pricing Strategy
The pricing of the racking systems to be delivered would depend greatly on the customization
required by the client. For example, on average the standard racking system with a storage
capacity of 25 tons would be priced at BDT 5.5 lac. The pricing of the warehouse racking system
would be settled upon the requirement of the client.
Technical Aspects
 Technical Aspects
Types of Racking System by the type of load
After defining the keys for a quality industrial racking system, we break down the different types of non-
automated industrial racking according to the type of unit load they will have to support.
We divide these storage systems into two main groups: Pallet Racking and heavy loads and Picking
Solutions and light loads.

Types of Industrial Racking for pallets

Pallet racking is a type of industrial racking designed to support large loads that will be lifted by the
handling equipment.
We can divide pallet racking into 4 major categories: adjustable pallet racking, compact pallet racking, live
pallet racking and mobile pallet racking.

Adjustable Pallet Racking

Standard Adjustable Pallet Racking
Adjustable Pallet Racking is a type of industrial racking that stores pallets mechanically using forklifts.
The forklifts access the goods via the aisles that run parallel to the racking, and have direct and
immediate access to all the unit loads stored.
They have a standard aisle width and store a single pallet at the back of the racking, unlike the other 2
conventional systems outlined below.
Very Narrow Aisle Pallet Racking
Very Narrow Aisle (VNA) Pallet Racking is a compact version of adjustable pallet racking, creating a
higher density and capacity storage system without the need for more space.
This type of adjustable pallet racking is compacted by narrowing the aisles, resulting in a space saving
of over 40%. The minimum aisle width must be 1.5 m in this type of system.
To be able to work correctly in the warehouse with these VNA racking systems, special handling
equipment for VNA is required.

Double Deep Pallet Racking

Double Deep Pallet Racking is a conventional storage solution, but which shares common features with
compact racking.
In this type of industrial racking system, the pallets are stored at two depths, thus achieving higher
storage density. Unlike standard adjustable pallet racking, in double deep pallet racking the
operator does not have direct access to all the pallets stored.
Double deep pallet racking must also be used with special forklifts equipped with telescopic forks or a
pantograph mechanism to easily and quickly access the second pallet stored.
 
Compact Racking
Compact Racking is a high-density storage system that fully optimises warehouse space and height
by reducing the truck’s work aisles to the maximum.
In these types of warehouse racking systems, parallel aisles are generated inside the structure, where
forklifts can enter and move around for the pallet loading and unloading process.
Compact storage systems are suitable when the problem of space takes priority over direct access to or
selectivity of all the unit loads stored.
There are two main compact racking systems: Drive in and Drive Through.
 
Drive in Pallet Racking (LIFO)
The Drive In compact system is the most used. It only requires one access aisle for the forklift and works
according to the LIFO (Last in, First out) stock management method, where the last pallet in is the first
one to leave.
This type of compact storage is recommended in warehouses with homogeneous products that have low
rotation of material.
 
Drive Through Pallet Racking (FIFO)
Drive Through racking needs two work aisle accesses, one on each side of the racking. Works according
to the FIFO (First in, First out) method, where the first pallet in is the first one to leave.
FIFO is a storage system recommended for warehouses with high rotation products; however, space
optimisation is less than in Drive In racking.
Live Pallet Racking
Live pallet racking is a type of compact storage system that takes advantage of the forces of gravity
and pushing to optimise pallet storage.
Its peculiarity is that using these 2 forces, the pallets are moved inside the racking to their desired position.
The two main types of live pallet racking are the gravity FIFO Live Storage system and the Push-Back
LIFO system.
Gravity FIFO Live Pallet Racking system
FIFO Live Pallet Racking consist of a compact structure with roller beds at each height that allow the
pallets to slide easily thanks to a slight incline.
This type of system uses the FIFO method (First in, First out), where the loading area is at the opposite
end to the unloading area, with the pallets travelling that distance on a system of rollers that form
a slightly inclined rail.
It is the best system for warehouses that require perfect stock rotation and good use of the available
space.

Push-Back LIFO Racking

Push-Back LIFO Racking is a live storage solution for accumulation of pallets that uses the LIFO method
(Last in, First out) to manage the unit loads.
This type of pallet racking only has one loading and unloading area at the front of the structure, and the
pallets are stored by pushing the previous ones towards the back of the racking with a small controlled
force.
There are 2 types of Push-Back racking systems depending on the method of movement used: Push-
Back with shuttles and Push-Back with rollers.
 
Mobile Racking or Mobile Bases System
Mobile Racking is a storage solution in which the metal structure is mounted on mobile bases or a
chassis which are guided by rails fixed to the floor.
With this movement of the racking bays only one work aisle is opened for forklift access: the aisle to
work in.
This type of industrial racking has electric motors and remote traction elements that enable its movement
from one side to the other.
The characteristics of mobile racking makes it the ideal solution for cold stores, due to reducing the total
volume to be cooled.

Types of Picking Solutions or Shelving

Picking solutions or longspan shelving are storage solutions for generally less heavy and bulky
products, typically cartons, small items or other products.
This type of industrial racking operates without using handling or elevation equipment, although it is
possible to combine picking solutions with pallet racking systems, making them very versatile solutions for
a warehouse.
Picking Solutions are normally located in the warehouse in order preparation areas, filing spaces or
maintenance areas.

Longspan Shelving
Longspan Shelving allows the manual storage of medium and small-size products. This type of
racking is very versatile and adaptable to a wide variety of unit loads and allows direct and quick access to
all stored materials.
It is an easy to assemble system that allows adding various accessories to its basic structure to adapt
to the company’s needs, such as the solutions for the textile sector.
Multi-Tier Racking
Multi-Tier Racking is a type of manual industrial racking that makes it possible to optimise the available
space of a warehouse thanks to use of the height.
In this storage system, aisle levels at different heights are created which are accessed by stairs.
Carton Flow Rack Systems
Carton Flow Rack Systems are a high-density storage system for cartons and light unit loads. They
enable significant space savings and efficient stock control.
The various light unit loads slide along pulley rails or rollers with a slight incline.
You can see here the comparison between the different picking and shelving solutions.
AR Light Shelving
AR Light Shelving is a type of system similar to Longspan Shelving, but designed to store lighter and
smaller loads.
This shelving can be used both in an industrial warehouse and in offices and allows quick access to
the goods stored.
 
If you need any advice on the most suitable type of industrial racking for your warehouse, AR
Racking will be happy to help you.
Please request information by clicking here and our team will recommend the ideal system.

Manufacturing Process
The manufacturing process is the process that aims to transform a raw material into a finished
product, complying with the required quality and safety requirements. For manufacturing to be
competitive, it is important that the cost of the material, the manufacturing and the storage of
the final product are as profitable as possible.

Selective Racking: Selective pallet racking is characterized by having a high SKU count but offers
the lowest storage density. Conventional selective pallet racking can be visualized as large
shelves that have storage space for a single row of items. The racks can be arranged back-to-
back to improve storage density. It has low storage density because of the space consumed by
the aisles. This type is mostly seen in raw materials warehouses, parts storage spaces, and
distribution centers where there are many distinct types of products with low volume. Selective
pallet racking can be combined with other types to accommodate SKUs with high volumes.
Other properties of selective racking are its flexibility between FIFO and LIFO inventory
management, the operability of standard forklifts, accessibility for cleaning and inventory
accounting, and simple construction allowing easy reconfiguration. Selective racking has
different designs of frame and beam connections that are divided into teardrop and slotted
racks.

Teardrop Racks: Teardrop racking is a type of selective racking that has modified frame and
beam attachments that can be reconfigured and expanded easily without the use of machine
tools. Upside down teardrop-shaped holes is punched along the upright frames where pins
attached to the beams are inserted. As the pin falls into the tapered opening, friction secures it
in place without requiring additional fasteners. This connection has enough strength to be
comparable with permanent joints. Adding heavier loads causes more friction to fix the beam in
place. Wire decks are placed above the beams that become shelves for the pallets.
Appurtenances such as pallet supports, crossbars, ties, and anchors are added to further
strengthen the structure. Teardrop pallet racks are usually produced by roll forming wherein
metal sheets are cold-rolled into rectangular frames and beams.
Racking Production Process phases:

Raw Material of Industrial Racking

In the case of industrial racking, knowledge of the raw material, in this case steel, is key
because it provides the basis for using the appropriate quality of raw material for each
product.

To manufacture storage system components and according to each of their requirements,

different grades of steel are used in accordance with the following standards:

o EN 10025: Hot rolled steel products for structures.

o EN 10346: Continuously hot-dip coated steel flat products. Technical supply conditions.
o EN 10149: Hot rolled flat products made of high elastic strength steel for cold forming.
o EN 10139: Low carbon steel strips, uncoated for cold forming.
Profiling process

In this phase, a machine that produces rolled steel with advanced, robust and versatile technology
will help, through strict control of the profile dimensions, to ensure that the product is always
within the established quality parameters.

In a high quality and demanding profiling process, a full list of dimensions must be defined
for each manufactured article (beams and uprights in this case), which is continuously checked
during each production order. Each critical measurement must be controlled to ensure the
correct behavior of the product, both in the assembly of the installation and under the application
of the load.

In this part of the process, some industrial racking manufacturers implement a traceability
process in their components, identifying each component with a serial number that makes it
unique and easily identifiable.

Product traceability system is a process encompassed within the so-called Industry 4.0
philosophy.
Welding process

The weld between the profile of the beam and the connector is one of the critical components
of the industrial racking system. The automated manufacturing system provides uniform
welding with an excellent surface finish. Subsequently, if final control is carried out of all the
welded components, any possible defect in this operation is discounted.

For industrial racking systems, the welding process must comply with the ISO 3834-2
regulations on Quality requirements for the fusion welding of metal materials.
Finish of the racking components

The beams, uprights and frames must best adapt to the customer’s needs, the product
characteristics and/or environmental conditions. Consequently, the uprights and beams can
have one of the following finishes:

Pre-galvanized upright:

For those components which are more difficult to replace such as uprights and which are more
exposed to scratches. The pre-galvanized finish guarantees optimum resistance.

Paint finish:

The beams can be both pre-galvanized and have a paint finish, thus increasing the visual
contrast with respect to uprights and diagonals and therefore facilitating the work of the forklift
driver.

In cases in which the beams and some other accessories require a paint finish, an automatic
process will be implemented, where they receive prior to the degreasing phase a treatment
with a nanotechnological product of synthetic ceramic compounds and washing with 100%
osmosed water. This eliminates the possibility of the appearance of impurities which can cause
corrosion.

The paint is poured through an electrostatic application in an automated booth. For this reason,
it is sprayed with epoxy-polyester followed by oven compaction. Industrial racking that meets
the highest quality parameters usually has the a2 - s1, d0 paint certification according to UNE
EN ISO 13501 which regulates the fire reaction and resistance properties of construction
products and building elements.

Hot dip galvanized beams:

The beams can also be produced with a hot-dip galvanized finish, whose main characteristic is
its high resistance in extreme conditions, since the main advantage of hot-galvanizing a
component is to avoid rust and corrosion that humidity and environmental contamination can
cause industrial racking steel components.
 Packaging of uprights and beams

It is the final phase of the racking manufacturing process and is generally also automated to
ensure a uniform finish with excellent protection against accidental impacts during the handling
and transport phases.

In this phase the uprights and beams are stored in packages. Subsequently, each package is
packed with plastic, ensuring that the products arrive protected to their destination, avoiding
damage to the material during handling and transport. Finally, the packages are arranged
together for storage and delivery, using polyester strips.

Product storage

Finally, the finished product must be temporarily stored in a facility close to where the
manufacturing process is carried out. The stock management of the finished product may vary
according to the company, type of product or external factors affecting the market at the time.

Warehouse Management
Warehouse management implies where the warehouse is the building where the
different storage systems are installed and the main function of these is to maintain the
products in a controlled and orderly manner.

Warehouses are a basic and essential infrastructure in a diverse range of

industries, and the security inside them will largely depend on the state of any
storage system (adjustable pallet racking, compact pallet racking, etc.).
Therefore, it’s vitally important to require under consideration a series of key
factors to take care of a superb level of safety and quality within the warehouse
management.

We consider the seven key factor of warehouse management which is given below to
maintain safety in the warehouse:

Appropriate use of personal protective equipment for

warehouse management

 Warehouse operators must wear appropriate protective footwear, steel toe caps and soles,
and non-slip footwear.
 In very noisy warehouses, hearing protectors should be worn.
 The use of protective helmets will be necessary for high storage and the risk of falling objects.
 Safety glasses should be worn if the warehouse has cutting areas.
 The use of suitable protective gloves is recommended for handling various materials.

Correct use of forklift trucks

Keep the forklift in perfect condition and harmony: the siren, the horn, and the
warning light must work correctly.

The existing signage within the warehouse must be respected.

An elite cart used for transporting materials supplied for loading capacity or for
transporting people, and for qualified and authorized personnel.

Adequate signage in the warehouse

The warehouse must bear the following markings: the different operational
areas, safety areas, evacuation routes, and doors, machine areas, bathrooms,
warehouse plan, etc.

Other safety and prevention elements in the warehouse

In addition to the key factors described above, a completely safe warehouse

should have smoke detectors, a fire alarm system, emergency lights, a first aid
kit, defibrillators, and video cameras.

Correct design and use of the storage systems

One of the basic elements of a completely secure warehouse is that it depends
on companies like Master Rack & Furniture, which are dedicated to the
production, design, and installation of storage systems.

The proper functioning and safety of storage systems (adjustable shelves, rack
drive, or automated systems) are one of the key factors, for which aspects such
as raw materials, design of industrial shelves and their adaptation to inclement
weather and The seismographic conditions of each territory must be taken into
account.

Here, the responsibility lies with the engineering teams of the companies in the
sector who must combine all their experience with the latest structural
calculation technologies.

Also, the following aspects, among others, must be observed in the

daily use of storage systems:
 Cargo units stored at a height should be properly tied down and wrapped with film to prevent
loose objects from falling.
 Pallets must be properly supported on beams and/or sleepers.
 The free spaces necessary to place the load units in their locations must be respected.
 In the Drive-In storage system, ensure that the lift truck never passes under the stored
material.
 Let’s Know your loading capacity first and then maintain the maximum load weight of industrial
racks.

Control, maintenance, and periodic replacement

An installation must not only be safe when commissioning but also in good time
with the execution of control and maintenance work and the replacement of
damaged elements.

Maintenance tasks for the storage system should be planned. Start with a quick
daily inspection to check with the naked eye that nothing is out of place and
continue with extensive periodic technical inspections in collaboration with the
company supplying the warehouse management.

In this control phase, it is possible to identify every element of the structure of

the storage system that could have been damaged due to the daily operation of
the warehouse. The items that are typically hardest hit in the warehouse are
industrial shelving frames. However, beams can also be damaged by the impact
of forklift forks.
If these components are damaged, it will reduce the capacity of the shelf and
therefore pose a potential risk. Those responsible for maintenance should, with
the support of the manufacturer, determine whether the damaged component
needs to be replaced or whether its properties are still intact.

If the specialists confirm that the component is damaged, it should be replaced

with a new one that will restore the same original properties to the structure. For
the replacement process, the damaged planes must first be unloaded and made
unusable until the replacement is complete.

Regarding replacement, we do not recommend attempting repairs as there is no

evidence that tampering with damaged posts or beams will restore the original
properties of the structure. These measures may therefore pose a significant
risk to warehouse security.

Staff training and advice

People are the key to having a completely safe warehouse. Your initial training,
company orientation, and daily behavior ensure that all of the above key factors
are in place and that we have a warehouse and storage system in excellent
condition.
Therefore, it is essential to invest efforts in staff training and in creating a
connection that allows all levels of the company, from the manager to the
operator, have to work compliantly with the above direction to meet the
highest standards rate and ensure safety and quality.
Inside the warehouse, operators must know the properties and limitations
of their equipment and work tools, control the effects on the pallet racks
and know what to do if they are damaged. For more details please feel
free to contact us.

Most benefits of the pallet racking system:

Pallet Racking Solutions
Increasing your storage space in any warehouse area, the most important thing to consider in
warehouse management? The aim is so significant is it increases profit and efficiency. Your
company should make sure that your warehouse answer is humble, safe, and effective.

If your company’s present warehouse answer seems impractical and incompetent. Advance
can help you grow your storage space without expenditure too much, thanks to pallet racking
systems.

Space Saving – The pallet racking system used for the purpose of an expansion of storage
space, by designing the storage capacity with ultramodern pallet racking techniques.  Pallet
racking systems will swell your profits as you will able to store more with the same area of
land space.

Safety – Maximizing safe to stop accidents and avoid obligation is tremendously important as
a manager. By providing a solid safety that is simple to handle. Preemptive injuries will only
make any manager look like a true hero. Moreover, any pallet rack can be fixed to the floor
for even better constancy

Convenience – Vertical Pallet racking is one of the most suitable storage solutions on the
market. It is much cooler to bring down pallets with a forklift which will grow the efficiency of
your warehouse forklift operatives. Leveraging the right equipment in your warehouse will
improve your overall business.

7 ways to improve warehouse efficiency

Efficiency in the warehouse is extremely important for the success of a company and
educating warehouse efficiency is the leading importer of a warehouse manager. A good
storeroom is not only places everything in place and makes the shipping quick and precise,
but it also ensures supreme efficiency while saving time and money.

But with so many moving products, variations in demand and other change subtleties,
cumulative efficiency in a warehouse is often easier said than done. Amazingly, some
humble changes can be made a big optimistic impact on a company’s bottom line. Whether is
a multi-channel warehouse or a small warehouse, making some humble changes can easily
recover work competence. There are some obliging tips to improve your warehouse process.

1. Analyze your product usage patterns

It’s an obvious point to increase competence in the warehouse is to analyze your creation
usage patterns, store general items near the front of the warehouse for easy picking, which
move the loosest through the stocking and picking development.

And also store crops that are often sold together near one another, build a discrete area for
items to move at a slower rate to avoid intrusive with the undertaking of other items.
Maximizing the warehouse process by keeping the products you pick regularly in the most
available locations, could reduce eliminate portable time meaningfully.

2. Keep a check on warehouse layout

A good warehouse storage rack systems layout does match good warehouse efficacy to
provide a good warehouse situation. But a poor organization can rapidly make a well-
organized storeroom disorganized, it may decrease your employees’ efficiency and even lead
to a security issue.

Keep a check on the warehouse layout finished building an empathetic of practical areas,
material flow into those areas, and where you can move certain items? The efficient
warehouse layout is to confirm that there is sufficient space and make sure your employees
are following the correct events and the most effective routes.

3. Optimize the vertical space

Rather than expanding the ground level, consider improved use of the vertical space. By
adding taller storing units and using more particular lifting gear to pick and store items can
assist you to keep more items in each square meter. Besides, reflect the type of shelving or
racking used, store minor items on pallet racking wastes the space, and effortlessly make
items misplace. Thus you should use a variety of shelving or rack for unalike items

To ensure they are using space available to them in the most effective ways. Optimizing all
available space will surge efficiency, resultant in better efficiency.

4. Take advantage of technology

The application of warehouse technology delivers more discernibility through data, which
allows the employees to track real-time means and differences in inventory. Many options are
obtainable, bar code, radio frequency identification (RFID), WMS, and so on. These new
machineries are very obliging for increasing productivity and educating correctness.

Using barcode or RFID readers can track products and orders, recover accuracy, and reduce
picking errors. WMS can recover efficiency by signifying the best routes and picking
methods. Also, the system delivers automatic pick lists that can be sent to moveable readers
and plan to help remove mistakes and decrease wasted time and paper.

5. Training your employees

Making sure your workers get correctly trained, which are caused by fewer chances, and
ensure procedures are done right. Place them finished a strict training procedure upfront and
deliver them with specialized guidance if they need anything. Make training a significant part
of your warehouse racking system.

Even the most effective technologies lake value if your workers don’t understand them, keep
all team members on track with system features by implementing robust training programs.
Besides, properly inducement pay for employee’s performance can bring supreme
development in labor efficiency.

6. Show your KPIs

Make your KPIs shown to them all involved in the industrial warehouse racking system
management. Whether that is with is everyday reports or dashboards up on the screen in the
warehouse, just brand sure all workers and warehouse managers know and have admission
to that material.

Not only does it set the values initially, but it can also help classify problematic areas while
letting persons know when they are doing well. The most significant thing about consoles is
that they give instant feedback, you don’t need to wait until the end of the day to find out how
you did.

You can’t recover what you don’t measure, it’s still true in warehouse processes. The simple
act of measuring working metrics and reporting the results to your employees will result in
development even if you do nothing else with the data.

Once these things are recognized, then build regular feedback to the staff on individual and
departmental presentations. They’ll respond and bring higher efficiency for you.

7. Get feedback

Another way to increase warehouse competence is to get feedback from your employees.
The staff who work in the warehouse is the one who knows the warehouse process best.

Therefore, they are in the best location to direct you on how to advance warehouse
competence. And more importantly, asking the sentiments of your employees will deliver
them with a sense of their position in the warehouse operation. It will boost their morale and
lead to superior output.
 TRAINING
The training of workers and managers of a company on the potential risks that may
occur during use of a racking installations, is a legal requirement that makes it
compulsary for companies to train and the supply information on the use, risks and
safety of work equipment in general and storage systems in particular have
entrepreneurs.

If you are in any of the following circumstances:

 if you require a PRSES (Person Responsible for Storage Equipment Safety),

to ensure the safety of their shelves.
 If you need to have Visual Inspectors conducting internal periodic
inspections.
 If you need to raise awareness of warehouse workers on the proper use of
racking equipment and inform them about the risks involved with the use.
 If you want to gain autonomy and execute your own basic racking
maintenance.
Financial Aspects
Financial Aspects
Project Cost Detail
Particulars Quantity Unit Price Total
Land development 20,000,000.00 20,000,000.00
Steel Fabricated Building 35,000,000.00 35,000,000.00
Laser Machine 3 20,000,000.00 60,000,000.00
Bending Machine 5 6,375,000.00 31,875,000.00
Dye Machine 1 10,000,000.00 10,000,000.00
Chemical Treatment Plant 1 5,000,000.00 5,000,000.00
Power Coating Machine -
Germany 6 850,000.00 5,100,000.00
Painting Booth 6 2,500,000.00 15,000,000.00
Oven System 5 2,000,000.00 10,000,000.00
Punching Machine 2 12,750,000.00 25,500,000.00
Sharing Machine 1 5,100,000.00 5,100,000.00
Generator 1 5000000 5,000,000.00
Substation & Busbar system 20000000 20,000,000.00
Crane 1 3000000 3,000,000.00
Fire Fighting 5000000 5,000,000.00
Welding Machine 20 150,000.00 3,000,000.00
Other Equipment 1 10,000,000.00 10,000,000.00
Office decoration Furniture 10,000,000.00 10,000,000.00
vehicle -Covered Van 3 3,000,000.00 9,000,000.00
vehicle -Microbus 1 3,500,000.00 3,500,000.00
other utility 5000000 5,000,000.00
Total 296,075,000.00
Proposed Financing Source
Existing Proposed Grand Total
Bank
Particulars Equity Total Equity Bank Loan Total Equity Bank Loan Total
Loan

Land 20,000,000.00 20,000,000.00 20,000,000.00 20,000,000.00

Steel Fabricated Building 7,000,000.00 28,000,000.00 35,000,000.00 7,000,000.00 28,000,000.00 35,000,000.00

Machinery 47,143,750.00 150,860,000.00 188,575,000.00 47,143,750.00 150,860,000.00 188,575,000.00

Office Decorations and Furniture 5,000,000.00 5,000,000.00 10,000,000.00 5,000,000.00 5,000,000.00 10,000,000.00

Vehicles 2,500,000.00 10,000,000.00 12,500,000.00 2,500,000.00 10,000,000.00 12,500,000.00

Electrification Transformer .Busbar
System 10,500,000.00 19,500,000.00 30,000,000.00 10,500,000.00 19,500,000.00 30,000,000.00

TOTAL Fixed Cost 72,143,750.00 213,360,000.00 285,503,750.00 92,143,750.00 213,360,000.00 296,075,000.00

Working Capital 72,422,222.22 289,688,888.89 362,111,111.11 72,422,222.22 289,688,888.89 362,111,111.11

20,000,000.00 20,000,000.00 144,565,972.22 503,048,888.89 647,614,861.11 164,565,972.22 503,048,888.89 667,614,861.11

Working Capital
Particulars Tied Up Period Amount
Raw Materials 90 Days 130000000
Work-in-Process 3 " 4333333.333
Stores & Spares 90 " 130000000
Finished Goods 7 " 10111111.11
Receivables 60 " 86666666.67
Cash in Hand Lump-Sump 1000000
Total Funded working Capital At 100% Capacity. 362111111.1
Total Funded working Capital At 80% Capacity. 289688888.9

75
Revenue Projection
Item Quantity (Unit) Rate (BDT 1000/ Kg) Total
Average Rack (25-ton capacity) 1750 575000 1006250000
Total Sales at 100% production capacity in a
year 1006250000

Particulars 1st year 2nd Year 3rd Year 4th Year 5th Year
Sales at Rated Capacity 1,006,250,000 1,006,250,000 1,006,250,000 1,006,250,000 1,006,250,000
Capacity Utilization 70% 75% 80% 85% 95%
Sales at Assumed
Capacity 704375000 754687500 805000000 855312500 955937500

Profitability Ratio
PROFITABILITY RATIOS:

Gross Margin, Composite % 23.36% 27.04% 28.18% 27.67% 30.10%

Operating Profit Margin, % 15.00% 18.93% 20.25% 19.88% 22.83%
Interest Expense to Sales, % 5.10% 4.57% 4.28% 3.16% 2.46%
Net Margin to Fixed Cost % 69.24% 36.60% 43.76% 42.27% 57.54%
Net Margin to Sales % 9.90% 14.36% 16.10% 14.63% 17.82%
Return on Assets, % 9.83% 13.82% 14.67% 12.65% 14.90%
Return on Equity , % 42% 66% 79% 76% 104%
Cash Withdrawal/Dividend Payout Rate, %(Dividend/Net
10.00% 12.00% 14.00% 16.00% 18.00%
Profit)
Cost of Goods Sold
Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year
Raw Materials
Purchase 520,000,000.00 530,400,000.00 556,920,000.00 595,904,400.00 643,576,752.00
Wages of Supporting
Staff 6,000,000.00 6,120,000.00 6,426,000.00 6,875,820.00 7,425,885.60

Utilities 8,000,000.00 8,160,000.00 8,568,000.00 9,167,760.00 9,901,180.80

Stores & Spares 1,500,000.00 1,530,000.00 1,606,500.00 1,718,955.00 1,856,471.40

Repairs & Maintenance 2,200,000.00 2,244,000.00 2,356,200.00 2,521,134.00 2,722,824.72

Rent, Tax & Insurance 1,500,000.00 1,530,000.00 1,606,500.00 1,718,955.00 1,856,471.40

Other Manufacturing
Cost 650,000.00 663,000.00 696,150.00 744,880.50 819,368.55

Total 539,850,000.00 550,647,000.00 578,179,350.00 618,651,904.50 668,158,954.47

General, Administrative & Selling Expense

Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year
Director's Remuneration 5400000 5670000 5953500 6251175 6563734
Salaries & Allowance 28800000 28800000 30240000 31752000 33339600
Printing & Stationery 1800000 1890000 1984500 2083725 2187911
Postage,Telephone, Talex & Fax 900000 945000 992250 1041863 1093956
Travelling & Conveyance 1800000 1890000 1984500 2083725 2187911
Audit fee 1800000 1890000 1984500 2083725 2187911
Advertisement/Selling Expenses 10000000 10500000 11025000 11576250 12155063
Misc. Expenses 1200000 1260000 1323000 1323000 1389150
Total 50500000 52845000 55487250 58195463 61105236
Ll
It wil

Particulars of Proposed Term Loan Facility: Machinery & Building Structure LC Limit: To Import Capital

Machinery

A)
Facility
Structure:

Particulars of Proposed Term Loan Facility: Machinery & Building Structure LC Limit: To Import Capital Machinery
A)

USD
LC Limit: Sight/UPAS 2,218,529.41
(BDT 188,575,000.00)
To Import Capital
Machineries
Margin 10% Cash Margin at the time of Opening

B)
BDT 150,860,000.00 (Against
Term Loan
the Imported Machinery and Equipment
(Machinery)
mentioned in A)
Loan Period 5 Years
Grace Period 6 Months
Intt. Rate 9% to be calculated in simple rate
EMI Tk. 34.00 Lac (Approx)
Payment Term Monthly to be started after 6 months.
C)
Term Loan
BDT 28,000,000
(Building Structure)
Loan Period 5 Years
Grace Period 6 Months
Intt. Rate 9% to be calculated in simple rate
EMI Tk. 6.00 (Approx)
Payment Term Monthly to be started after 6 months.

D)
Term Loan BDT
(Others) 24,500,000
Loan Period 5 Years
Grace Period 6 Months
Intt. Rate 9% to be calculated in simple rate
EMI Tk. 5.00 Lac (Approx)
Payment Term Monthly to be started after 6 months.

Loan Repayment
Loan Amount
503,048,889
Interest Rate 9%
Grace Period Month 12
Repayment Period Yrs 5
Mode of Payments/Yr 4
Number of Installments 20

Y-1 Y-2 Y-3 Y-4 Y-5

Interest Paid 42,507,166 34,730,899 26,230,791 16,939,465 6,783,272
Principal Paid 83,540,930 91,317,197 99,817,305 109,108,631 119,264,825
Principal Remaining 419,507,959 328,190,761 228,373,456 119,264,825
TOTAL PAID 126,048,096 126,048,096 126,048,096 126,048,096 126,048,096

Opening Installments
Installment Number Closing Balance
Balance Principal Interest Total
1st 503,048,889 (20,193,424) (11,318,600) (31,512,024) 482,855,465
2nd 482,855,465 (20,647,776) (10,864,248) (31,512,024) 462,207,689
3rd 462,207,689 (21,112,351) (10,399,673) (31,512,024) 441,095,338
4th 441,095,338 (21,587,379) (9,924,645) (31,512,024) 419,507,959
5th 419,507,959 (22,073,095) (9,438,929) (31,512,024) 397,434,864
6th 397,434,864 (22,569,740) (8,942,284) (31,512,024) 374,865,124
7th 374,865,124 (23,077,559) (8,434,465) (31,512,024) 351,787,565
8th 351,787,565 (23,596,804) (7,915,220) (31,512,024) 328,190,761
9th 328,190,761 (24,127,732) (7,384,292) (31,512,024) 304,063,029
10th 304,063,029 (24,670,606) (6,841,418) (31,512,024) 279,392,423
11th 279,392,423 (25,225,695) (6,286,330) (31,512,024) 254,166,729
12th 254,166,729 (25,793,273) (5,718,751) (31,512,024) 228,373,456
13th 228,373,456 (26,373,621) (5,138,403) (31,512,024) 201,999,835
14th 201,999,835 (26,967,028) (4,544,996) (31,512,024) 175,032,807
15th 175,032,807 (27,573,786) (3,938,238) (31,512,024) 147,459,021
16th 147,459,021 (28,194,196) (3,317,828) (31,512,024) 119,264,825
17th 119,264,825 (28,828,566) (2,683,459) (31,512,024) 90,436,259
18th 90,436,259 (29,477,208) (2,034,816) (31,512,024) 60,959,051
19th 60,959,051 (30,140,445) (1,371,579) (31,512,024) 30,818,605
20th 30,818,605 (30,818,605) (693,419) (31,512,024) (0)
Statement of Cash Flow
A)Source of Fund1/Inflow of Fund Cons. 1st Year 2nd Year 3rd Year 4th year 5th Year
Equity 82,715,000.00 72,422,222.22
Term Loan 213,360,000.00
Working Capital Loan 289,688,888.89
Depreciation & Write off 8,355,437.50 8,355,437.50 8,355,437.50 8,355,437.50 8,355,437.50
Operating Profit 105,669,562.50 142,840,062.50 162,977,962.50 170,043,545.50 218,248,414.91
Total 296,075,000.00 476,136,111.11 151,195,500.00 171,333,400.00 178,398,983.00 226,603,852.41
B) Application of Fund:
Investment in Fixed Assets 213,360,000.00
Increase in Current Assets 362,111,111.11
Payments:
Principal of Term Loan 28,088,644.52 33,410,373.20 33,857,676.57 37,033,760.19 40,507,782.35
Interest on Term Loan 18,062,498.80 16,586,698.73 12,293,466.75 9,117,383.13 5,643,360.97
Interest on Working Capital Loan 17,894,705.00 17,894,705.00 17,894,705.00 17,894,705.00 17,894,705.00
Total 213,360,000.00 426,156,959.43 67,891,776.93 64,045,848.32 64,045,848.32 64,045,848.32
Surplus(A - B) 82,715,000.00 49,979,151.68 83,303,723.07 107,287,551.68 114,353,134.68 162,558,004.09
Opening Balance 0 82,715,000.00 132,694,151.68 215,997,874.75 323,285,426.43 437,638,561.11
Closing Balance 82,715,000.00 132,694,151.68 215,997,874.75 323,285,426.43 437,638,561.11 600,196,565.20
Breakeven Analysis
Variable
Particulers TOTAL Fixed Cost Cost
Raw Material 556920000 55692000 501228000
Director's Remuneration 5953500 2083725 3869775
Salaries & Allowance 30240000 10584000 19656000
Printing & Stationery 1984500 694575 1289925
Postage,Telephone, Talex & Fax 992250 347287.5 644962.5
Travelling & Conveyance 1984500 694575 1289925
Audit fee 1984500 694575 1289925
Advertisement/Selling Expenses 11025000 3858750 7166250
Financial Expenses 33410373.2 11693630.62 21716742.58
Depreciation 8355437.5 2924403.125 5431034.375
Misc. Expenses 1323000 463050 859950
Total 654173060.7 89730571.25 564442489.5

01) Operating Year : 3rd Year

02) Capacity Utilization : 0.8
03) Sales Revenue : 805000000
04) Total Cost : 578179350
SWOT Analysis

84
SWOT Analysis
SWOT analysis is significant for reviewing whether the supply chain and strategic direction of
the company properly addresses the company’s short-term, time-sensitive delivery
requirements, while also addressing its long-term cost objectives. Since the purpose of supply
chain management is to ensure timely delivery of parts, raw materials and finished goods, it
makes sense to use the SWOT analysis to accentuate the positives and address the negatives
within the company's supply chain.

We perform the analysis from one end of the spectrum. They either analyze their supply chain
by reviewing the attributes the company itself brings to the table, or they do it by reviewing the
attributes its vendor brings to the table. However, we’re going to bridge these two approaches
together and try to combine them into one assessment

Following is the SWOT analysis for the warehouse manufacturing plant to be established by
Step Engineering Ltd.

Strength:
· Strong Customer Relationship
· Proved latest technology
· High quality products
· Inventory pooling with manufacturing
· Established R&D facilities
· Market oriented product pricing
Weakness:
· Uncertain Cashflow
· High cost for advertising and sales promotion
· Dependence on imported raw material
Opportunities
· Booming demand
· Favorable industry trends
· Low cost of debt and equity fund available
Threats:
· Fast changing technology
· Adverse environment for Covid-19
· Improvement in competitors
Concluding Remark
Concluding Remark
Warehouse racking, also known as storage or pallet racking, is a material handling system
suitable for mass storage of goods unitized on skids or pallets. This allows efficient utilization of
space while providing easy access to stockpiled items for better inventory control.

Some of the benefits of racking systems are efficient space utilization, easy inventory
organization, fewer damaged goods, increased employee productivity, automation, safety, and
cleanliness.

Important factors to consider before investing in a racking system are the available floor area
and vertical space, pallet load weight and dimensions, target capacity, throughput, number of
SKUs, type of inventory management, and cost.

Racking with high selectivity and low-density are selective, double deep, and very narrow aisle
racking systems. High-density applications are push-back, drive-in, and pallet flow.

Sales Revenue

Estimated annual Sales Revenue of the Project is expected to be BDT. 70 Crore, BDT 75 Crore,
BDT 80 Crore, BDT 85 Crore and BDT 95.5 Crore in the 1st, 2nd, 3rd, 4th, and 5th year
respectively.

Net Profit

Net Profit of the Project is calculated after meeting up all operational and financial expenses
and taxes. In 1st, 2nd, 3rd, 4th, and 5th year of its operation, the Net Profit will stand at BDT 6.9
Crore, BDT 10.8 Crore, BDT 12.9 Crore, BDT 12.5 Crore and BDT 17 Crore respectively.

Pay Back Period

Pay Back Period for the project has been calculated and found below 5 years which is
satisfactory considering the nature of the business.
Risk & Mitigation
Financial Risk

Financial Risk may arise due to high leverage position and non-payment of credit facility.

Gross Margin,
23% 27% 28% 28% 30%
Composite %
Operating Profit
15% 19% 20% 20% 23%
Margin, %
Interest Expense to
5% 5% 4% 3% 2%
Sales, %
Net Margin to Fixed
69% 37% 44% 42% 58%
Cost %
Net Margin to Sales % 10% 14% 16% 15% 18%
Return on Assets, % 10% 14% 15% 13% 15%
Return on Equity , % 45% 70% 84% 81% 110%
Cash
Withdrawal/Dividend 9% 12% 14% 19% 21%
Payout Rate,
%(Dividend/Net Profit)          

Financial Risk Mitigation

After implementation of proposed setup, the company will generate sufficient surplus cash as
well as income to serve Interest.

Debt Service coverage ratio is quite satisfactory and cash generation will be excellent. So, the
debt servicing ability is outstanding against this extension.

Comments: Above analysis and ratios show the company’s liquidity, Debt Equity & Debt service
coverage is favorable for financing.

Business/Industrial Risk

Business Risk may arise due to decrease in production and adverse impact due to internal or
external sovereign, regulatory changes or political instability, Interest or Foreign Exchange Rate
fluctuation and increasing competition in world market.
Business/Industrial Risk Mitigation:

Step Engineering Ltd is one of the experienced incumbents within the design, printing, and
logistics industry of Bangladesh. The demand for warehouse rack is increasing among economic
zones and other industrial areas in Bangladesh.

Moreover, Step Media has a hard-earned reputation in the market. So, it is expected that the
business growth will be excellent and the warehouse rack manufacturing plant will be doing
very good and would be able to repay the bank liabilities at ease and in time.

Management Risk

Management Risk may arise due to adverse changes in key management personal & weak
decision-making capacity.

Management Risk Mitigation:

Step Media is a Limited Company and a going concern having efficient directors as its owner
and a highly efficient Management, sales & marketing team.

Security Risk:

Security risk arises due to Security/collateral coverage & support.

Security Risk Mitigation:

The warehouse rack manufacturing plant is going to be setup at entrepreneur’s own land having
electricity & water connection. The collateral is well covered against the proposed facility.

Relationship Risk

Relationship risk refers to Account conduct, utilization of limit, Compliance of covenants &
conditions & Personal deposits.
Relationship Risk Mitigation:

The company is banking with reputed Schedule Bank with satisfactory Transaction and also avails
credit facilities in different mode having satisfactory repayment behavior.