Entrepreneurship

Feasibility Study of Prefab Houses in Pakistan

M Ahsan Cheema Fazal Elahi Abrar Hussain Ahsan Arshad Nasir Khan

MB083052 MB083070 MB083016 MB091030 BB073044

Feasibility Study of Prefab Houses in Pakistan

Demand for Prefab Houses

Introduction of Housing Industry

The Housing Industry is the largest industry of Pakistan. Pakistan is one of the 20 countries of the world where Real Estate business is on top of the list. The turnover of just six housing projects in Pakistan is equal to the annual budget of the country 3,500 housing schemes are working in Pakistan

Many government departments launching a housing scheme like Revenue Department, district council, development agency, tax departments and CDA etc.

Conceptual Feasibility
Two big fish of the industry chose prefab houses.
Malik Riaz already had don a project of prefab houses in Bahria Town. Arif Habib is doing a project of prefab houses on area 1200 acre in Sindh. All area of 2005 earth quake is full of prefab houses.

Marketing Feasibility
In 1998 World Bank Housing shortage in Pakistan stood at 4.33 million units. In February 2010 World Bank Housing shortage in Pakistan has reached an exceptional high of 7.57 million units. Average One year Shortage (Demand and Supply Difference) (7.57 4.33) 3.24 / 12 = 0.27 million average one year shortage

Marketing Feasibility
Houses in Pakistan (2005)
Annual demand of housing .7 million units Annual constructing only 0.3 million units

Houses In Pakistan (2010)

Annual demand of housing 1.5 million units Annual constructing only 0.6 million units

Demand and Supply Gap

Annual Shortage (.7--.3 ) .4 Annual shortage (1.5 0.6) .9 million units

Growth is almost 100% after 5 years

Marketing Feasibility
Factors of Fast Increasing Growth in Housing Industry Normal Factors Previous years shortage added with new years. Population growth rate 2 to 1.57 in last 4 years. Special Factors 2005 Earthquake, 0.6 million houses had been damaged or destroyed 2010 Flood, some 1.74 million households have lost their homes in flood.

Prefab Houses Technical Feasibility

Features of Prefab Houses
Dry installation. No construction garbage caused. Environment protective. Materials adopted repeated use. Flexible size and easy to assemble. Disassemble with elegant appearance. Safe and durable.

Prefab Houses Technical Feasibility

Material Used in Prefab Houses
Ground Beam Frame Column Floor Beam Floor Perlaine Roof Truss Roof Perlaine Staircase Corridor board Rain Shelter External Wall Panel Internal partition wall panel Floor Plate Window Exterior Door Screw and nuts etc

Prefab Houses Technical Feasibility

Technical Parameter of standard prefabricated house:
1. Wind resistance: Grade 11(wind speed111.5km/h) 2. Earthquake resistance: Grade 7 3. Live load capacity of roofing: 0.5kn/m2 3. External and internal wall heat transmission coefficient: 0.35Kcal/m2hc 4. Second Floor Load Capacity: 150 kg/m2 5. Live load of corridor is 2.0kn/ m2

Prefab Houses Technical Feasibility

Prefab Houses Technical Feasibility

Prefab Houses Technical Feasibility

Prefab Houses Financial Feasibility

Material Cost for Twelve houses 500,000*12=60,00,000 Shipment Cost, Insurance and Some other Cost are 20% of the Material cost = 12,00,000 Office and Ware House Rent 40,000 per month 480,000 Annually Utilities 10,000 per month, 120,000 Annually Workers pay 21000 per month, 252000 Annually Technical People Commission 40,000 per House, 480,000 Annually All Cutting and Fitting Machines provided by Synergy Industry Technology Co. Ltd.China 300,000 Crain Rent for one House Construction 20000 for one house, 240000 Annually.

Prefab Houses Financial Feasibility

Sales price per unit = 1000000 variable cost per unit = 500000+100000+40000+20000=660000 Total fixed expenses = 300000+252000+120000+480000=1152000 Calculate break even point Calculation: Sales = Variable expenses + Fixed expenses + Profit 1000000Q = 660000Q + 1152000 + 0 340000Q = 1152000 Q = 1152000 /340000 Q = 3.38 Units

Pay back = Total Investment/Cash In Flow (4 sold every year) =9072000/4000000=2.268

Thank You . Any Question