People are much tensed and want a solution to save their lives from this particular disease. For this purpose we are going to introduce an antipest’s wall paint in market. That will repel any pest like mosquito, fly, aunt or lizard from the coated wall for minimum 3 years.
Innovative Business Idea by Students of University of Lahore, Lahore Business School.
Group Members: Hassan Manzoor, Zahid Naveed, Mohsan Akram, Usman Ghani
ACKNOWLEDGEMENTS
Saying
of Prophet Muhammad (PBUH) “A person who is not thankful to his benefactor is
not thankful to ALLAH”. All and every kind of praises is upon ALLAH ALMIGHTY,
the strength of universe, who ever help in darkness & difficulties. All and
every kind of respect to His Holy Prophet Muhammad (PBUH) for unique,
comprehensive and everlasting source of guidance and knowledge. We would like to extend our gratitude to
Prof. Abdul Rehman for his invaluable
guidance, support and feedback during the course “Entrepreneurship” which
helped us to successfully complete the project.
New Business
Opportunity:
As
everybody is facing problem in today’s life regarding pests (Lizards,
Mosquitoes and flies etc.) in homes which causes serious diseases such as
Dengue, Malaria and allergies.
Dengue fever is increasingly becoming an epidemic
in Pakistan.
Due to the high cost of treatment, the disease spread more rapidly in 2011 than
in previous years. As of November 2011, it has killed over 200 people in the
last few months and over 14,000 are infected by this mosquito
born disease.
People
are much tensed and want a solution to save their lives from this particular
disease. For this purpose we are going to introduce an antipest’s wall paint in
market. That will repel any pest like
mosquito, fly, aunt or lizard from the coated wall for minimum 3 years.
Note:
We are advising our customers to only use this paint above 5 feet, where
children’s can’t reach, because mostly children lick the wall and this paint
include dangerous chemical which is highly harmful to health.
Introduction:
Relief from Pests for 3 years.
Durable Packing.
Competitive pricing.
Two coats satisfaction.
Generally
wall paints include these four components.
·
Pigments
·
Binder
·
Solvent
·
Additives
Pigments
are granular solids incorporated into the paint to contribute color, toughness,
texture, give the paint some special properties or simply to reduce the cost of
the paint. Alternatively, some paints contain dyes instead of or in combination
with pigments.
Pigments
can be classified as either natural or synthetic types. Natural pigments
include various clays,
calcium carbonate, mica,
silica’s,
and talc’s.
Synthetics would include engineered molecules, calcined
clays, blanc fixe, precipitated calcium carbonate,
and synthetic pyrogenic silica’s.
Hiding
pigments, in making paint opaque, also protect the substrate from the harmful
effects of ultraviolet light. Hiding pigments
include titanium dioxide, phthalo blue, red iron oxide,
and many others.
Binder is
the actual film forming component of paint. It is the only component that must
be present; other components listed below are included optionally, depending on
the desired properties of the cured film.The binder imparts adhesion,
binds the pigments together, and strongly influences such properties as gloss
potential, exterior durability, flexibility, and toughness.
Binders
include synthetic or natural resins such as cement, alkyds, acrylics,
vinyl-acrylics, vinyl acetate/ethylene (VAE), polyurethanes,
polyesters,
melamine resins, epoxy,
or oils.
Binders
can be categorized according to drying, or curing mechanism. The four most
common are simple solvent
evaporation,
oxidative cross linking, catalyzed/cross linked polymerization,
and coalescence.
Solvent
are to adjust the curing properties and viscosity
of the paint. It is volatile and does not become part of the paint film. It
also controls flow and application properties, and affects the stability of the
paint while in liquid state. Its main function is as the carrier for the non
volatile components. In order to spread heavier oils (i.e. linseed) as in
oil-based interior house paint, thinner oil is required. These volatile
substances impart their properties temporarily—once the solvent has evaporated
or disintegrated, the remaining paint is fixed to the surface.
Additives
are usually added in very small amounts and yet give a very significant effect
on the product. Some examples include additives to modify surface tension,
improve flow properties, improve the finished appearance, increase wet edge,
improve pigment stability, impart antifreeze
properties, control foaming, control skinning, etc. Other types of additives
include catalysts,
thickeners, stabilizers, emulsifiers,
texturizers, adhesion promoters, UV stabilizers, flatteners (de-glossing
agents), biocides to fight bacterial
growth, and the like.
We
are using the same formula for preparation of antipests paint with five
additional solvent chemicals that are Allethrin,
Resmethrin,
Anticoagulants,
Metal Phosphides
and Calciferols.
Allethrins
are a pair of related synthetic compounds used in insecticides.
They are synthetic pyrethroids, a synthetic form of a chemical found
naturally in the chrysanthemum flower. They were first synthesized in
the United States by Milton S. Schechter in 1949. Allethrin was the first parathyroid.
Resmethrin
is a parathyroid
insecticide
with many uses, including control of the adult mosquito
population.
Anticoagulants:
These are chemicals that cause internal bleeding in a rodent, as they block the
production of the coagulating factors. Some of the common anticoagulants used
in rat poisons are warfarins, indandiones and difethialone.
Metal
Phosphides: They are quick acting rat poisons that can kill a
rat in a matter of a few hours by attacking vital organs as well as the central
nervous system of the rat. Commonly used metal phosphides are zinc phosphide,
used as baits to kill rats, as well as aluminum phosphide, calcium phosphide
and magnesium phosphide which are fumigants.
Calciferols:
These are nothing but different forms of Vitamin D, namely Vitamins D2
and D3 also known as cholecalciferol and ergocalciferol,
respectively. They work by increasing the calcium concentration in the body of
a rodent, leading to calcification of organs and ultimately death. Calciferols
need to be added to rat poisons in high dosages for them to work effectively.
Mixture
of all these ingredients will be a product of antipests paint. We hope that
this product will have a high demand in Market than currently existing paint
products.
Profile
of Industry:
Currently, seven paint
companies in Pakistan named I.C.I Deluxe, Master, Berger, Nippon, Kansai, Black
horse and High level are at top in manufacturing different types of paint these
days.
There are 12 categories
of paint currently existing in the market which are as follows:
Emulsion paint is a
water-based paint used for painting interior or exterior surfaces.
Wood stain is a type of
paint that is very "thin," that is, low in viscosity, and formulated
so that the pigment penetrates the surface rather than remaining in a film on
top of the surface.
Lacquer is
usually a fast-drying solvent-based paint or varnish that produces an
especially hard, durable finish.
Enamel paint is
a paint that dries to an especially hard, usually glossy, finish.
A glaze is
an additive used with paint to slow drying time and increase translucency, as
in faux painting and Art Painting.
A roof coating is a fluid
applied membrane which has elastic properties that allows it to stretch and
return to their original shape without damage.
Finger-paint is a kind
of paint intended to be applied with the fingers; it typically comes in pots
and is used by small children, though it has very occasionally been used by
adults either to teach art to children, or for their own independent use.
Inks are
similar to paints, except they are typically made using finely ground pigments
or dyes, and are designed so as not to leave a thick film of binder.
Anti-climb paint is
a non-drying paint that appears normal while still being extremely slippery. It
is usually used on drainpipes and ledges to deter burglars and vandals from
climbing them, and is found in many public places.
Anti-fouling paint,
or bottom paint, prevents barnacles
and marine organisms from adhering to the hulls of
ships.
Primer is a preparatory
coating put on materials before painting.
Profile
of our Company:
Initially
2 sizes will be launched, which are:
Ø Quarter
(1 liter.)
Ø Gallon
(2.64 liter.)
But
in future we are planning to add a new packing, a seven liter large Gallon.
Vision:
Our
vision is to relieve whole world’s walls from pests.
Mission:
Ø Give
highest priority to health, safety, environment and ethical matters.
Ø We
will focus to save people from various diseases as well as innovative home
decoration.
Ø We
will stay at the forefront of innovation and technological development in the
paint industry.
Ø We
will achieve corporate success through an unwavering commitment to provide our
customers high quality products to their ultimate satisfaction.
Ø We
will vigorously promote and safeguard the interests of our employees, our
shareholders, our suppliers and all business associates.
Ø We
will play our role as a good corporate citizen and serve the community where we
do business.
Ø Achieve
the highest possible operating efficiencies and lowest costs, and expand the
business through selective capacity increase and new product launches.
Goals
and Objectives:
1.
To create awareness of our product
(Antipests Paint) through:
Free
exchange of information and products
o
Acknowledging the people with benefits
Antipests paint.
o
Electronic Media
o
Print Media
o
E-commerce
2.
To inaugurate outlets of our product in
different cities, to make our product easily available everywhere.
3.
To provide trained painters to our
customers, with some extra cost, that’s a unique feature and it will increase
the reputation of our company.
SWOT
analysis:
Strengths:
- New Innovative idea.
- Good for health.
- Inexpensive.
- New in Market.
- Others may copy idea easily.
- People are scared of dengue disease these days, so they will keen to buy our product.
Threats:
- Dangerous chemicals included in product, may cause child lead to death on licking the wall.
- May paint automatically remove from wall after a huge rain, which will create negative impression of our paint in customer’s mind.
Financial Highlights:
To start this business
we have to purchase a land as well as building. The current market value of
land is Rs. 8,000,000 and of building is Rs. 2200,000. Building needs to be
renovated and the renovation cost is Rs. 230,000. The company also needs
machinery and equipment. 3 high speed dispersers and 3 storage tanks are
required. Price of one high speed
disperser is Rs. 280,000 and price of one tank is Rs. 22000, thus total cost
Rs. 906,000 is required to purchase machinery and equipment. All fixed assets
are in excess capacity and would not require any increase or decrease even if
production increase and Rs. 250,000 fixed initial deposit is required to pay
expenses of company.
In the first month Jan
2012 of operations, we are expected to sale 8640kg paint. Amount of paint in
Kilograms is then expected to increase at 10% in second month Feb 2012 15% in
third month March 2012 and 25% till end of year 1, i.e. April 2012 to December 2012.
Further this percentage
will increase in next year by 15% and in year 2013 we are expected 40% more
sales in all months constantly. Marginal tax rate is 18% to check financial
feasibility of our project we have find out Net Present Value of both years.
Profit/Loss Estimation:
|
Initial cash flow
|
Oct-2011
|
|
Land
|
8,000,000
|
|
Building
|
2,200,000
|
|
Renovation cost of
building
|
230000
|
|
Machinery / Equipment
|
906000
|
|
Fixed initial deposit
|
250000
|
|
Total
|
11,586,000
|
The amount Rs.
11,586,000 is total required initially to start business.
|
|
% Increase in No. of Units
|
Number of Units
|
Sales
|
CGS
|
Profit before tax
|
Tax
|
Profit after tax
|
Free Cash Flows
|
|
Jan-12
|
|
8640
|
1894826
|
1445990
|
448836
|
245818
|
203017
|
42801
|
|
Feb-12
|
10%
|
9504
|
2084322
|
1590589
|
493733
|
270400
|
223333
|
47068
|
|
Mar-12
|
15%
|
10930
|
2396971
|
1829178
|
567793
|
310960
|
256832
|
54128
|
|
Apr-12
|
25%
|
13662
|
2996213
|
2286472
|
709741
|
388700
|
321041
|
67660
|
|
May-12
|
25%
|
17078
|
3745267
|
2858090
|
887176
|
485875
|
401301
|
84575
|
|
Jun-12
|
25%
|
21347
|
4681583
|
3572613
|
1108970
|
607344
|
501626
|
105718
|
|
Jul-12
|
25%
|
26684
|
5851979
|
4465766
|
1386213
|
759180
|
627032
|
132148
|
|
Aug-12
|
25%
|
33354
|
7314974
|
5582208
|
1732766
|
948975
|
783791
|
165185
|
|
Sep-12
|
25%
|
41693
|
9143717
|
6977760
|
2165957
|
1186219
|
979738
|
206481
|
|
Oct-12
|
25%
|
52116
|
11429646
|
8722200
|
2707447
|
1482774
|
1224673
|
258101
|
|
Nov-12
|
25%
|
65145
|
14287058
|
10902750
|
3384308
|
1853467
|
1530841
|
322627
|
|
Dec-12
|
25%
|
81432
|
17858822
|
13628437
|
4230385
|
2316834
|
1913551
|
403283
|
From above free cash
flows, we have found Net Present Value (NPV), of the project by forecasting
sales of 1st year 2012of our company. (At interest rate 10%)
N.P.V=
Rs.-7550952
N.P.V is negative which
means that our company will face loss in 1st year 2012.
|
Month
|
% Increase in No. of
Units
|
Number of Units
|
Sales
|
CGS
|
Tax
|
Profit after tax
|
Free Cash Flows
|
|
Jan-13
|
40%
|
114005
|
25002351
|
19079812
|
3243568
|
2678972
|
2678972
|
|
Feb-13
|
40%
|
159606
|
35003292
|
26711737
|
4540995
|
3750560
|
3750560
|
|
Mar-13
|
40%
|
223449
|
49004609
|
37396431
|
6357393
|
5250784
|
5250784
|
|
Apr-13
|
40%
|
312829
|
68606452
|
52355004
|
8900351
|
7351098
|
7351098
|
|
May-13
|
40%
|
437960
|
96049033
|
73297005
|
12460491
|
10291537
|
10291537
|
|
Jun-13
|
40%
|
613144
|
134468647
|
102615807
|
17444687
|
14408152
|
14408152
|
|
Jul-13
|
40%
|
858402
|
188256105
|
143662130
|
24422562
|
20171413
|
20171413
|
|
Aug-13
|
40%
|
1201763
|
263558547
|
201126982
|
34191587
|
28239978
|
28239978
|
|
Sep-13
|
40%
|
1682468
|
368981966
|
281577775
|
47868222
|
39535969
|
39535969
|
|
Oct-13
|
40%
|
2355455
|
516574753
|
394208885
|
67015511
|
55350357
|
55350357
|
|
Nov-13
|
40%
|
3297636
|
723204654
|
551892440
|
93821715
|
77490500
|
77490500
|
|
Dec-13
|
40%
|
4616691
|
1012486516
|
772649415
|
131350401
|
108486700
|
108486700
|
From 2nd free cash
flows table, we have found Net Present Value (NPV), of the project by
forecasting sales of 2nd year (2013) of our company. (At interest
rate 10%)
N.P.V=
Rs.144832770
N.P.V is positive in 2ND
year which means that our company will start earning revenue from 2nd
year 2013. Hence, this financial forecasting tells us that our project is
financial feasible.
Initial
Production Cost:
We
have estimate that our 8640kg paint will be sold in first month January 2012.
Thus here is the detail of first month product preparation.
|
Ingredients
|
Amount
|
Cost
per head
|
Total
cost
|
|
Titanium (25kg bags)
|
48
|
12500
|
600,000
|
|
Ceramic balls
|
500kg
|
530
|
286200
|
|
Razon
|
300kg
|
160
|
48000
|
|
Pests killer chemical
|
4320kg
|
90
|
388800
|
|
Empty Gallons 3.64 liter
|
1000
|
33
|
33000
|
|
Empty tins 1 liter
|
5000
|
18
|
9000
|
|
Total
|
1,446,000
|
||
This
material will be used to prepare 8640 kg Antipest paint, thus we can find out
total cost per kg.
Total cost per kg
(Before tax): 1446000/8640 = 167.36
Tax (18%):167.36*
0.18 = 28.4512
Total cost per kg
(After tax): 167.36+ 28.4512 =
4761.592
Profit percentage
= 12%
Price per k.g at 12% profit:
197.4861* 0.12 + 197.4861 = 221.1844
Hence final price of our product to retailer will
be:
Quarter
1 liter: Rs. 222
Gallon
3.64 liter: Rs. 810
Competitor
analysis:
|
Name of Company
|
Price including Tax
|
G.S.T 18%
|
Price excluding Tax
|
|||
|
|
Quarter
|
Gallon
|
Quarter
|
Gallon
|
Quarter
|
Gallon
|
|
Antipests paint
|
240
|
820
|
43.2
|
147.6
|
196.8
|
672.4
|
|
Master
|
300
|
1100
|
54
|
198
|
246
|
902
|
|
I.C.I Deluxe
|
400
|
1500
|
72
|
270
|
328
|
1230
|
|
Berger
|
350
|
1200
|
63
|
216
|
287
|
984
|
|
Nippon
|
350
|
1200
|
63
|
216
|
287
|
984
|
|
Kansai
|
350
|
1200
|
63
|
216
|
287
|
984
|
|
Black horse
|
310
|
1180
|
55.8
|
212.4
|
254.2
|
967.6
|
|
High level
|
300
|
1100
|
54
|
198
|
246
|
902
|
The price of paints
presented in this table is local price and it can be low or high at different
instances, but price of Antipests paint is quite low that nobody can compete
this price. Thus our company will rank at number one in competitor list in term
of price.
This bar chart is
showing those companies which have higher price, have longer bar, while those
who have lower price, have lower bar. And the Bar of Antipests Paint is lower than all others.
Bibliography:
v Estate
Advisor: M. Altaf 0321-8430718
v Descon
Chemical Ltd. Pakistan, 18 km, Ferozepur Road, Lahore,54760, Pakistan
042-35923721
v Rehan
Can Private Limited, 27 km, Ferozepur road, Lahore Pakistan 042- 35272733
v Black
Horse Pvt. Ltd Lahore Pakistan, Muhammad Asif 0300-9296283
