Degree

Master of Business Administration

Faculty / School

Faculty of Business Administration (FBA)

Advisor

Dr. Rameez Khalid

Committee Member 1

Dr. Rameez Khalid, Assistant Professor & Academic Director PGD, Institute of Business Administration, Karachi

Project Type

MBA Research Project

Abstract / Summary

Pakistan being an agricultural country relies heavily on the export of its agricultural products including crops, fruits and vegetables to bring in valuable foreign exchange and help the country in improving its trade of balance. The largest volume of fruits exported consists of mangoes and citrus. Like all fruits, both mango and citrus are prone to spoilage after harvesting eventually leading to wastage.

One of the ways this wastage can be reduced is through the usage of cold storages. Cold storages provide optimal storage conditions thereby increasing the shelf life of the products and maintaining its quality for it to be exported. The design of a cold storage considers several factors such as its location, capacity, storage temperatures, humidity and throughput. These factors in turn depend on several key variables (type of produce to be stored, export destination, source of produce, storage requirements etc.) that need to be carefully analyzed in order to design an efficient cold storage. This report therefore assesses the feasibility of constructing a cold storage for the export of fruits and consists of the demand analysis, technical analysis and financial analysis.

Given the importance and the untapped export potential of mango and citrus fruits we first gauged the demand characteristics of these fruits in the international market which included identifying the key players and their roles in the supply chain, the top export destinations and the reasons behind the unrealized export potential. The market characterization allowed us to narrow down the scope of the study. Based on the industry wide practice, the business model was tweaked to a rent & export model. The technical analysis consisted of finalizing the various parameters in the design of the cold storage. It was decided that the cold storage would consist of two separate chambers for mango and citrus respectively and would be of a capacity of 135 tons for citrus and 94.5 tons of mango. The heat load calculations showed that 62.87 tons of refrigeration would be required for mango while 76.6 tons of refrigeration would be required for citrus.

The financial analysis estimated the initial cost to be of approximately PKR 72 million. The NPV and IRR of the project was PKR 7.6 million and 16.8% respectively. Based on this, it was concluded that it would be commercially, technically and financially feasible for Habibullah Associates to set up a cold storage facility for the export of mango and citrus.

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