Business Plan For Fisheries Processing and Exporting

Fisheries Processing and Export Business Plan
Table of Contents
1 INTRODUCTORY PAGE........................................................................................................................... 4
1.1 Name of the company................................................................................................................... 4
1.2 Name and Addresses of Principals ................................................................................................ 4
1.3 Nature of Business ........................................................................................................................ 4
1.4 Statement of Financing Needed ................................................................................................... 4
1.5 Statement of Confidentiality of Report ........................................................................................ 4
2 EXECUTIVE SUMMARY .......................................................................................................................... 5
3 INDUSTRY ANALYSIS.............................................................................................................................. 6
3.1 Pest Analysis.................................................................................................................................. 6
3.1.1 Political .................................................................................................................................. 6
3.1.2 Economic ............................................................................................................................... 7
3.1.3 Social ..................................................................................................................................... 8
3.1.4 Technology ............................................................................................................................ 9
4 DESCRIPTION OF VENTURE ................................................................................................................. 11
4.1 Our Mission ................................................................................................................................. 11
4.2 Our Business................................................................................................................................ 11
4.3 Our Product ................................................................................................................................. 12
4.4 The Entrepreneurs’ Background ................................................................................................. 12
5 PRODUCTION PLAN ............................................................................................................................. 14
5.1 Process Flow Chart ...................................................................................................................... 15
5.2 Machinery and Equipment.......................................................................................................... 16
5.2.1 Vehicles ............................................................................................................................... 16
5.3 Exporting ..................................................................................................................................... 16
6 OPERATIONAL PLAN ............................................................................................................................ 17
6.1 Technology Utilization ................................................................................................................ 18
6.2 Flow of orders ............................................................................................................................. 18
6.2.1 Signing of a Contract ........................................................................................................... 18
6.2.2 Documentation ................................................................................................................... 19
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6.2.3 Post Shipment Documents.................................................................................................. 20

6.2.4 How to Claim Duty Drawbacks............................................................................................ 20
6.2.5 Quoting Prices ..................................................................................................................... 21
6.2.6 Signing the Contract ............................................................................................................ 21
6.2.7 Terms of Delivery ................................................................................................................ 21
6.2.8 Packaging ............................................................................................................................ 21
6.2.9 Transport ............................................................................................................................. 21
6.2.10 Suppliers .............................................................................................................................. 21
7 MARKETING PLAN ............................................................................................................................... 22
7.1 Pricing Strategy ........................................................................................................................... 22
7.2 Competitors and Value Addition................................................................................................. 22
7.3 Market for exports ...................................................................................................................... 22
7.4 Distribution ................................................................................................................................. 23
8 ORGANIZATIONAL PLAN ..................................................................................................................... 25
8.1 Form of Ownership ..................................................................................................................... 25
8.2 Registration of the Company ...................................................................................................... 25
8.3 Registration of a Partnership ...................................................................................................... 25
8.4 Partnership Deed ........................................................................................................................ 25
8.5 Principal Partners ........................................................................................................................ 26
8.6 Authority of Principal Partners ................................................................................................... 26
8.6.1 CEO ...................................................................................................................................... 27
8.6.2 Finance Directors ................................................................................................................ 27
8.6.3 Sales/Marketing Director .................................................................................................... 27
8.6.4 Sales Analyst........................................................................................................................ 28
8.6.5 HR Director .......................................................................................................................... 28
8.6.6 Administrative Assistant ..................................................................................................... 28
8.6.7 Production & Inventory Control Manager .......................................................................... 28
8.7 Sources of Hiring Employees....................................................................................................... 29
9 ASSESSMENT OF RISKS ........................................................................................................................ 30
9.1 Competitors ................................................................................................................................ 31
10 FINANCIAL PLAN.............................................................................................................................. 32
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10.1 Project Cost ................................................................................................................................. 32

10.2 Project Returns ........................................................................................................................... 32
10.3 Project Financing ......................................................................................................................... 32
10.4 Pro Forma Income Statement ..................................................................................................... 33
10.5 Pro Forma Cash Flow Statement................................................................................................. 34
10.6 Pro Forma Balance Sheet ............................................................................................................ 35
10.7 Breakeven Analysis ..................................................................................................................... 36
10.8 Sources for Procurement of Finance .......................................................................................... 37
10.9 Summary of the Salient Terms of Financing ............................................................................... 37
11 EXIT STRATEGY ................................................................................................................................ 39
12 APPENDIX ........................................................................................................................................ 40
12.1 REGULATIONS ............................................................................................................................. 40
12.2 Network for Dealing with Regulations ........................................................................................ 42
12.3 Our Products ............................................................................................................................... 44
12.4 Miscellaneous ............................................................................................................................. 45
12.5 Process Flow Chart of a Sea Food Processing ............................................................................. 50
12.6 Questionnaire for Customers...................................................................................................... 51
12.7 Questionnaire for Entrepreneur ................................................................................................. 52
12.8 Analysis of Questionnaire ........................................................................................................... 54
12.9 Supplier Evaluation Questionnaire ............................................................................................. 58
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1 INTRODUCTORY PAGE
1.1 Name of the company

Alpha Fish Processing and Exports
Karachi Fish harbor, Pakistan.
1.2 Name and Addresses of Principals

Nabeela Saleh Zahri
Quetta, Pakistan.
Rabiya Anjum
Karachi, Pakistan.
Sidra Shahid
Karachi, Pakistan.
Sugandh Munir Banglani
Hyderabad, Karachi.
1.3 Nature of Business

Processing and export of fisheries.
1.4 Statement of Financing Needed

The total project investment is Rs. 120,521,267 which includes capital cost of Rs. 91,416,722
and working capital of Rs. 29,104,545. It is assumed that the project would be partially equity
financed (50%) and partially debt financed (50%).
1.5 Statement of Confidentiality of Report

This plan is strictly to be held as the ownership of the four entrepreneurs mentioned above. It is
written for the purpose of obtaining finance from banks and investors and all the data
contained therein is based on our research. The ideas presented our subject to originality of the
entrepreneurs, hence are their ownership and therefore cannot and should not be copied or
stolen.
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2 EXECUTIVE SUMMARY
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3 INDUSTRY ANALYSIS
Fishery plays an important role in the national economy. It provides employment to about
100,000 fishermen directly. In addition, another 400,000 people are employed in ancillary
industries. It is also a major source of export earnings. In July-May 2002-03 fish and fishery
products valued at US $ 117 million were exported from Pakistan. Federal Government is
responsible for fishery of Exclusive Economic Zone of Pakistan. Pakistan is endowed with rich
fishery potential. It is located in the northern part of the Arabian Sea and has a coastline of
about 1,120 km with a broad continental shelf and its Exclusive Economic Zone extends up to
200 n. miles from the coast. There are about 16,000 fishing boats in coastal area of Pakistan
which operate in shallow coastal waters as well as in offshore areas. These fishing boats
undertake fishing trips lasting for few hours to about 25 days depending upon type of fishing.
Total production from inland and marine waters is approximately 0.60 M. tons.
3.1 Pest Analysis
3.1.1 Political
There is no separate ministry for the fishery sector. The Ministry of Food, Agriculture and
Livestock (MINFAL) is the federal agency responsible for fisheries. For sustainable development
and management of marine fisheries resources, MFD promulgated the Exclusive Fishing Zone
(Regulation of Fishing) Act, 1975. Fisheries management is carried out through licensing,
indicating exploitable stocks and species, designating environmentally friendly fishing gear and
methods, and by enforcing restrictions with regards to closed season, closed areas, etc.
Pakistan also adheres to the guidelines of the FAO Code of Conduct for Responsible Fisheries.
The EU market effort is being coordinated by Karachi Fish Harbor Authority, Marine Fisheries
Department, Fishermen Cooperative Society, Sind government and the Ministry of Food,
Agriculture and Livestock.
There are no specific trading policies with regards to exportation. There are hundreds of
“cowboy” units in Pakistan that work on “so-called contractual” bases and dip the average
quality of the catch.
The local farmers also claim that the boats from Taiwan, China, Japan and Korea encroach their
waters and use giant fishing nets that result in depletion of fishing stocks for Pakistan. Fish and
fishery products are processed and exported to over 50 countries. About 30 – 35% of the fish
and fishery products are exported to European Union countries. Japan, U. S. A. China, Saudi
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Arabia, U. A. E. Malaysia, S. Korea, Hong Kong, Sri Lanka and Singapore are other major
importing countries.
Fish export has showed an increasing trend in the past many years, however, a substantial
decrease has occurred during 1998-99 which is attributed mainly due to glut in the
international market and because of financial crises in the Southeast Asian countries. Export of
seafood is facing many problems, most notably the following:
 Post harvest losses are high due to handling of fish catch on board and long voyage
time.
 Congestion at Karachi Fish Harbor. There are more than 16,000 fish boats operating in
Sind zone.
 The storage capacity is only 10,000 tons which is not sufficient to cater the future
requirements.
 Pakistan is exporter of raw material or semi processed fish / seafood.
3.1.2 Economic
3.1.2.1 Production
Pakistan is endowed with rich fishery potential. The total fish production of Pakistan is in the
order of 500,000 metric tons of which about 80% is marine fish. Shrimp constitute about 10% of
the marine catch. Most of the shrimp catch is frozen and exported to Japan, USA, UK,
Singapore, Belgium, France etc. The demand for shrimps is increasing in the world market
whereas; its production from natural sources in Pakistan is in stage of decline.
3.1.2.2 Employment
The fisheries sector in Pakistan offers direct employment to thousands of people. It provides
employment to about 400,000 fishermen directly. In addition, another 500,000 people are
employed in ancillary industries.
3.1.2.3 Exports
Pakistan exports reasonable quantity of shrimp, fish and its products and earns a substantial
amount of foreign exchange. Shrimp is the main export item both by weight (about 30 000 t)
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and by value (approximately US$ 73.2 million). It is exported mostly fresh; frozen either as
shell-on tails or as peeled and divined. The USA, Japan and the EU are the main importers.
Pakistan also exports fish meal, fish maws and shark fins, as well as growing quantities of chilled
fish, for which the main markets are Singapore and the Gulf. In recent years export of these
items has not shown any significant increase because of the increased quantities of fishmeal
required by the poultry industry. Out of the total installed processing capacity less than 40 per
cent is being utilized. Pakistan is exporter of raw material or semi processed fish / seafood.
Fish and fishery products are processed and exported to over 50 countries. About 30 – 35% of
the fish and fishery products are exported to European Union countries. Japan, U. S. A. China,
Saudi Arabia, U. A. E. Malaysia, S. Korea, Hong Kong, Sri Lanka and Singapore are other major
importing countries.
3.1.2.4 Economic Aid
Pakistan receives economic aid from several international sources as loans and grants. The
International Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB), etc
provides long term loans to Pakistan. Pakistan also receives bilateral aid from developed and
oil-rich countries.
3.1.3 Social
Fish is a major source of both livelihood and nutrition for millions of the world's poorest people.
An article illustrates that in 2001, more than 48 percent of the world population (close to 3
billion people) obtained 15-25 percent of their proteins from fisheries, and more than 400
million people received more than 50 percent of their proteins from fisheries (FAO, 2004). The
latter include the poorest people in coastal rural areas and small island developing states for
whom a decrease in fish catch often means an immediate loss in sources of food and calorie
intake.
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3.1.3.1 Ethics
The ethics of fisheries have been summarized it the table shown below:
Dimensions of the ethics of fisheries
Subject Objective
Ecosystem Ecosystem well-being
Fish stocks Conservation
Fisheries Responsible fisheries, sustainable development
Fishers Safety on board, freedom and well-being, just access
Fishing communities Eradication of poverty, cultural diversity
Other stakeholders Cross-sectoral equity, societal efficiency
Consumers Right to food, food safety
Politicians Transparent policies, public deliberation
Due to such vital importance of the fisheries sector, it is very important to use this resource at a
sustainable level. The findings of an FAO report indicate that during the next 25 years the world
population shall be doubled, the livestock population would shrink and most of the nations will
have to depend on oceanic resources to meet bulk of the animal protein demand. But
unfortunately the authorities have not taken any notice and therefore, not made plans to take
appropriate action to effectively overcome this problem.
The negligence in exploiting marine fisheries resources in Pakistan is highly regrettable. The
world market stood at 52 billion US$ in 1997 with Pakistan's share of less than 0.33 per cent.
Due to the changing eating habits and depleting natural resources, world seafood market is
termed as mainly 'sellers’ market'. The focus in fishing is shifting from already exploited regions
to under-exploited areas because of conservation and environment pressures.
3.1.4 Technology
There are many fishing techniques or methods for catching fish. The term can also be applied to
methods for catching other aquatic animals such as mollusks (shellfish, squid, and octopus) and
edible marine invertebrates.
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Fishing techniques include hand gathering, spear fishing, netting, angling and trapping.
Recreational, commercial and artisanal fishers use different techniques, and also, sometimes,
the same techniques. Recreational fishers fish for pleasure or sport, while commercial fishers
fish for profit. Artisanal fishers use traditional, low-tech methods, for survival in third-world
countries, and as a cultural heritage in other countries. Mostly, recreational fishers use angling
methods and commercial fishers use netting methods.
A commercial fishing enterprise may vary from one man with a small boat with hand-casting
nets or a few pot traps, to a huge fleet of trawlers processing tons of fish every day.
Commercial fishing gear includes weights, nets (e.g. purse seine), seine nets (e.g. beach
seine), trawls (e.g. bottom trawl), dredges, hooks and line (e.g. long line and hand line), lift
nets, gillnets, entangling nets and traps.
Modern trawlers make extensive use of contemporary electronics, including navigation and
communication equipment, fish detection devices, and equipment to control and monitor gear.
Just which equipment will be installed depends on the size and type of the trawler.
Navigational instruments, such as an autopilot and GPS, are used for maneuvering the vessel in
harbor and at sea. Radar can be used, for example, when pair trawling to keep the correct
distance between the two vessels. Communication instruments range from basic radio devices
to maritime distress systems and EPIRBs, as well as devices for communicating with the
crew. Fish detection devices, such as echo sounders and sonar, are used to locate fish.
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4 DESCRIPTION OF VENTURE
The fisheries industry in Pakistan is a major source of export earnings. In 2002-2003, fish and
fishery products valued at US $ 117 million were exported from Pakistan.
Pakistan is endowed with rich fishery potential. It is located in the northern part of the Arabian
Sea and has a coastline of about 1,120 km with a broad continental shelf and its Exclusive
Economic Zone extends upto 200 n. miles from the coast. Total production from inland and
marine waters is approximately 0.60 M. tons.
As a highly perishable commodity, fish has a significant requirement for processing. More than
60 percent of total world fisheries production underwent some form of processing.
Fish and fishery products are processed and exported to over 50 countries. About 30 – 35% of
the fish and fishery products are exported to European Union countries. However, due to
several issues, mainly concerned with complying with international standards, this figure has
dropped. (Source: www.pakissan.com)
In view of the above facts, it is evident that despite the issues faced by the fisheries sector in
Pakistan, fish processing and exporting still remains a highly attractive business with great
potential.
4.1 Our Mission
To be one of the leaders in hygienically processing and exporting fish business in Pakistan.
4.2 Our Business
Our business will deal with processing and exporting of various fish types, while maintaining
high standards of hygiene at all stages of the process.
Poor hygienic condition is one of the biggest problems faced by Pakistan’s fishing
industry. The conditions surrounding the port are very dirty. Sewerage water is dumped
in these waters and the same water is used to clean the fish. The processing units use
obsolete machinery, which adds to the unhygienic conditions that fish are exposed to.
Such unhygienic conditions at harbors and plants pose great risks to our venture as well
the industry as a whole.
Keeping in view the above facts, we intend to provide a healthy product by using technology
that assures relatively higher standards of hygiene as against other processing and exporting
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businesses in Pakistan. The goal of our business is to export hygienically processed fish of “AA
and A Grade”, which comply with international standards. By adopting hygienic and cleaner
methods of fish processing and storing, we can exploit the huge opportunity that exists in the
fisheries sector.
4.3 Our Product
We aim to begin by processing and exporting mainly the following types of fish:
o White pomfret
o Squid
o Soul fish
o Rohu
o Eel
o Deep sea shrimps
o Black tiger prawn
We plan on renting a fish processing unit on Karachi Fish Harbor. Karachi Harbor currently
handles 90% of fish and seafood catch in Pakistan and 95% of fish and seafood exports from
Pakistan.
The processed fish will be exported to several countries including European Union countries,
Japan, USA, China, Saudi Arabia, UAE, Malaysia, South Korea, Hong Kong, Sri Lanka and
Singapore. More than 75% of the product will go to EU countries, Japan and USA, since they are
main importers of fish products, while the rest will be exported to other countries.
4.4 The Entrepreneurs’ Background

The entrepreneurs are namely:
 Nabeela Saleh Zahri

 Rabiya Anjum
 Sidra Shahid
 Sugandh Munir Banglani
The entrepreneurs are graduates of Institute of Business Administration, a prestigious and

highly reputable business school of Pakistan. They have recently completed their BBA (Hons),
and all of them have had significant exposure to the corporate world, since interning was a
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compulsory requirement at IBA. However, these four are planning to implement their business
plan which they wrote as part of their Entrepreneurship course during their BBA days.
The entrepreneurs have sound knowledge of the business owing to their research in the sector
which they did when they were constructing their business plan.
Sugandh and Nabeela are majors in Finace, while Rabiya and Sidra are marketing majors thus,
the diversity in the team in balanced. Such set of skills will prove to be beneficial for their
venture.
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5 PRODUCTION PLAN
A number of steps take place from catching the fish at the harbor to exporting it to
international markets. However, we only deal with processing raw fish and exporting the final
product of the plant. The catch will be bought from fishermen on the Karachi Fish Harbor (KFH).
Purchases Process Export
• Fish is • Fish is • Fish is

procured brought to exported to
from local plant and international
fishermen processed markets
For consistent availability of fish, a contract system with the local fishermen will be maintained.
The personnel required in the plant will be hired locally as well. They will comprise of skilled as
well as semiskilled workers. Skilled workers will be needed for operating equipment whereas,
other non-technical activities will be handled by semiskilled workers.
The catch acquired from KFH will be brought to the processing plant. A 2 acre plant will be
rented in proximity of Karachi harbor to facilitate easy availability and transport of fish from the
harbor to the plant. The location will provide an added advantage of being near to the raw
material supply.
The plant will be upgraded by purchasing and installing high quality machinery and equipment
to ensure that the product processing meets international standards.
At the plant, the fish will undergo a process which will be partly done by machines and
equipment, and partly by skilled labor that possess good knowledge about factory processes.
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5.1 Process Flow Chart
The process flow chart for the Sea Food Processing Plant is given below
Icing/ washing Processing Hall.

Acquiring fish and segregating Grading and
fish packaging fish
Processing Hall. Packaged

Blast freezing Re-packaging product in cold
and grading fish store
Transportation
(Source: SMEDA Seafood Processing Plant Report)
Blast freezing is the most efficient and effective methods of freezing fish. It is prevalent in other
processing plants in Pakistan as well. In this process, high air flow is given to freeze the fish.
Packaging is done in several methods such as plastics, cartons and bags. Plastics and cartons are
be used for fish that is to be exported whereas, bags are employed for local supply. Hence, we
will require high quality material of plastics and cartons for packaging fish.
The fish categories will also be packaged in different forms. Frozen shrimps will be packed into
cartons and weight will range from 2- 4 kg packs. Frozen fish will be packaged according to the
international requirements which is 10 kg boxes.
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5.2 Machinery and Equipment
Machines needed in the processing unit along with their capacity are listed below:
Machinery/ Specifications Quantity
Flake Ice Machine, Capacity (25 T / 24 Hours) 2
Storage Bin, Capacity (12 Tons) 2
Blast Freezers , Capacity (2T / 8 Hours) -30 C 4
Cold Store , Capacity ( 250 T , 50x 50x 15) -30 C 4

Central Air conditioning System
(Processing Hall) 1
Tables and Racks
Generator 1
(Source: SMEDA Seafood Processing Plant Report)
Other office equipment would include office furniture, computer, fax and telecom system.
5.2.1 Vehicles
The venture will require 2 open trucks with 2 refrigerated containers. The shipment of final
product will be done by hired transportation whereas, the trucks of the business will be used to
bring raw material i.e. fish catch from the harbor to the plant.
5.3 Exporting
For export, once inspections are completed, the exporter compiles the requisite set of
documents and contacts a clearing agent to prepare a shipping bill, submitted with the
documents to the Customs Department. The Customs Department allows the clearing agent to
instruct the transporter to retrieve the container from the exporter and take it to the port gate
for inspection. Upon final approval, Customs authorizes a final physical inspection of the
container before it is sealed by the port customs authority or a bonded carrier. The exporter
pays the Export Development Surcharge to the Export Development Fund and the clearing
agent arranges container transfer to the terminal for loading onto the launches.
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6 OPERATIONAL PLAN
We have decided to upgrade, with the help of federal government, an already existing
processing plant and to incorporate the idea of Export Promotion Bureau to procure appliances
and equipments, and hot water pressure washing machine for cleaning of boxes and auction
halls and foot operated taps for up-gradation of Quality Control Laboratory to meet
International standards.
Furthermore we have decided to set up our office near the processing plant with a quality
control department and Research and Development. Quality control department will check the
quality of fresh fish after washing in the storage area and before forwarding it for further
processing. The fishery products are checked for any harmful or toxic products. After the
processing of one batch of products is completed, a sample would be again tested for quality
and standards in the quality control department. The people in the quality control will be from
the relevant field with relevant amount of experience.
There will be separate Research and Development department for latest information about
processes and technology available for the betterment of the business.
The day to day operations would be maintained from the office near the plant and for
continuous availability of raw material a contract system with local fishermen will be
maintained. All the production and operations of the company would be controlled by the
owners. However the procurement of raw materials will be on contractual basis only.
Furthermore we intend to operate our plant almost throughout the year. But we will make sure
that the plant is ready during the peak seasons of fish catch. According to SMEDA’s report on
Sea Food processing plant, the processing plants should be ready to operate during the months
of July to March so that we can avail the full catch of the season.
Washing, cutting and packaging would be the major operations that will be carried out in our
plant.
The shipping of the finished products would be done on the basis of number of orders made by
the clients and it shall be done on contractual basis. However later it will be done by the
business. For that purpose we are planning to buy vehicles and refrigerated containers for
fulfilling the consignments. Number of vehicles and containers would depend on the number of
orders placed by our clients.
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6.1 Technology Utilization
Since we want to meet the international standards for processed fish, we intend to implement
latest technology in our processing plant. With the help of Export Promotion Bureau, we will
implement a hot water pressure washing machine for cleaning of fish and boxes. This machine
will help us in ensuring the quality of fisheries that will be send for further processing. We
would be also up-grading foot operated taps for our Quality Control laboratory to meet the
international standards of quality and hygiene in our products. The machines that we will use
for fish processing would be Automatic Fish Fillet Machine and Pillow Packaging Machine.
Pillow Packaging Machine is touchable human-machine operation and use for various kinds of
packaging. Automatic Fish Fillet Machine is high yielding machine with comparatively small size
than the other machines operating in Pakistan. However due declining fish stocks, we would be
only be able to operate at approximately 40 percent of total capacity of the equipment
available for running the business.
The plant will also have its own packaging and cold storage facilities as mentioned earlier. This
will help us to maintain the quality of fish brought in for processing and the quality of fish after
it is being processed.
6.2 Flow of orders
Initially we will contract our potential clients through their Governments or export institutions
working in those countries. However later when we make a strong customer base with these
clients, we will develop proper channel for order placements and their consignment to our
valued customers.
6.2.1 Signing of a Contract

When prices are accepted then a contract is signed with the firm for supply of goods which
becomes binding on both the buyer & seller. Contract is a document, which normally contains:
i. Name of exporter
ii. Name of importer
iii. Item of sale
iv. Unit price
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v. Total quantity
vi. Terms of delivery (FOB, C&F, CIF etc.)* Inco terms deal with the questions related to the
delivery of the products from the seller to the buyer. This includes the carriage of products,
export and import clearance responsibilities, who pays for what, and who has risk for the
condition of the products at different locations within the transport process. Inco terms are
always used with a geographical location and do not deal with transfer of title.
vii. Terms of payment (There could be basically two arrangements for payment; first being
through direct funds transfer without involving any credit facility. This funds transfer could be
both before the shipment of goods or after the shipment of goods generally referred as Cash
Against Documents (CAD). Second arrangement is through the Letter of Credit (LC). The
customer’s bank provides a ‘letter of credit’, which promises to pay the supplier as long as the
terms are met. There are two types of LC, LC sight and LC Deferred payment. The payment may
be paid immediately at sight or at a later date).
viii. Mode of shipment (Sea, Air, Road)
ix. Currency in which transaction will be made.
x. Validity period of a contract & delivery period.
xi. Shipping marks if any.
xii. Arbitration clause.
6.2.2 Documentation
The following documents are normally used in exports: -
1. E-Form (Through authorized Commercial Bank).
2. Shipping Bill (Through authorized Clearing agents).
3. B/L or AWB (Through clearing agents)
4. Commercial Invoice
5. Packing List
6. Certificate Country of origin (Through Chamber) or
6(a) GSP (Through EPB)
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7. Textile quota Export license/visa document required for textile items under quota restraint
8. Pre-shipment certificate through EPB for certain textile item s for exports to management
textile item.
9. Export contract registration details
6.2.3 Post Shipment Documents

1. Textile quota Export license/visa document required for textile items under quota restraint
4th copy of shipping (through customs) bill to be used for rebates on bank/sales tax
refund/textile quota.
2. BCA (Bank Credit Advice) to be received from commercial banks after foreign exchange is
received. The BCA is considered proof for the purpose of rebates, refinance scheme etc.
6.2.4 How to Claim Duty Drawbacks

Duty Drawback is the most commonly availed incentive by exporters. It is the amount
reimbursed by the government to exporters as compensation for Customs Duty collected at the
time of import. For the purpose, CBR sets aside a certain percentage of customs duty collected
on imported raw material for incentivising export production. The following documents must
be in order when Exporter files the claim for export rebate and submits the file to the customs
rebate section
1. Bank Credit Advice ( B.C.A )
2. Bill of Lading (First Original).
3. Railway Receipt (Attested by the Railways).
4. Customs Signed Invoice with Two Photocopies.
5. Packing List.
6. Exchange Rate Certificate
7. Copy of Shipping Bill.
8. Photo Copy of Form “E”.
9. Laboratory Test Report. (if required)
10. Photocopy of SRO. (relevant to exporter’s product)
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11. Copy of Cross Border Certificate (In case of export through land route).
12.Sales Tax Return of clearing agent of previous month (if claim launched through
clearing agent)
6.2.5 Quoting Prices

In case of export, many things have to be considered for quoting prices, such as the cost
including, packing, insurance, credit, agent’s commission, documentation fee, marking charges,
transportation charges, export duties etc.
6.2.6 Signing the Contract

When prices are accepted then a contract is signed with the firm for supply of goods which
becomes binding on both the buyer & seller.
6.2.7 Terms of Delivery

When the exporter is making an offer, he quotes the price of his product. If the offer is
accepted then a contract is signed between the buyer and the seller. The contract includes
terms and conditions under which goods are delivered.
The buyer sitting in the overseas market is normally not interested to receive charge of goods
at one's factory site so we will give the buyer the charge of goods on FOB basis which means
free on Board at the seaport. It means that charges of the consignment are fully paid up to that
point and the rest of the freight will be paid by the buyer. This will make it clear as to who is
responsible for the goods if anything goes wrong.
6.2.8 Packaging
Packaging will be seaworthy, and we will have a contract with Pakistan Packing Institute which
will handle the packaging.
6.2.9 Transport
Transportation will be through the sea, as it will be most economical.
6.2.10 Suppliers
We will acquire our supply if fish from the local fish suppliers wholesale market. These goods
will undergo strict quality control procedures.
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7 MARKETING PLAN
7.1 Pricing Strategy

Since the number of firms is very limited in the industry, the entire industry works on more or
less the same strategy. Our company shall follow a cost-driven strategy. To maintain our
exports, we shall always kept our prices low as compared to our competitors. Our export share
in the world market is not likely to decrease over the next two years. The industry we shall
operate in is a tax free industry. This step was taken by the government long ago to encourage
private processing plant owners to improve the quality of their catch and exports.
7.2 Competitors and Value Addition

There has been lack of diversification and failure to introduce new and latest techniques of fish
processing over the last two decades. Firms like Super Fresh and Mahi Seafoods have worked
one for value addition. Now they not only process and package the fish but have also diversified
like they have introduced products like fish kebabs and fish koftas. This does not only meet the
need of local consumers but they have also export these products. There was little
diversification in 90s (that led to a negative growth) in the fishery products, however, in late
90s and mid 2000s, the growth rate was positive and this is because of diversification of fish
products like processed, marinated and ready to eat prawns and ready to fry prawns.
7.3 Market for exports

Pakistan’s exports of fishery products stand at about 0.25% of world exports. A rough estimate
based on maximum sustainable yield figures, existing value addition, and foreign benchmarks,
puts our total export potential from this sector at around US$ 1.0 billion from existing natural
resources. If we include the high potential area of aquaculture, our company can yield even
higher export earnings.
Previously, the consignments destined to EU, Japan and USA were in fresh or frozen form,
whereas to Sri Lanka these were in dried, salted form. This shows little value addition. Dried or
salted fish would not fetch a price as high as value added products would such as fish-minced
meat, fish pickle, fish kababs, fish cakes, fish flour etc. These products are made from fish
species which are usually used as trash in fishmeal reduction such as catfish, sardine, anchovy,
lizardfish, threadfin bream etc. We have good prospects for these products in Middle East, Far
East, Hong Kong, Singapore, U.K. etc.
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A rough estimate based on maximum sustainable yield figures, existing value addition, and
foreign benchmarks, puts our total export potential from this sector at around US$ 1.0 billion
from existing natural resources. If we include the high potential area of aquaculture, our
fisheries sector can yield even higher export earnings.
7.4 Distribution
The flow of the fish shall be channeled from boat owner/fish catcher to commission agent, to
wholesaler, to retailer, to consumer for local market. It shall go from commission agent to
exporter/processor to importer to consumer for export market.
Boat owner/fisherman  commission agent wholesaler  retailer  consumer

(Local marketing flow)
Boat owner/fisherman commission agent  exporter/processor importer
(Export marketing flow)
The system is that the owner lends his boat to the fish catcher, on profit sharing basis, generally
equally divided. Thus, if the catch is sold, hypothetically, for $255, the owner will deduct the
direct cost of such items as oil, ration to the crew, ice and salt. No depreciation, repair, or
replacement costs are included in it. If the cost, comes to $85 the remaining $170 will be
divided equally, $85 each by the boat owner and fish catcher. Since the boat remains in the
water for several days, the fish catcher takes a crew with him, which generally consists of his
family members. But if the family members are not available, he may hire crew and pay them
from his own share of earning.
The fish catcher shall bring his catch to the auction hall, where commission agent (called mole
holder) authorized by Fishermen Co-operative Society (FCS) awaits the arrival of the catch.
Only the authorized commission agent can process the sale and no fisherman can sell his
product directly to wholesaler, retailer, consumer, fish processor or exporter.
The commission agent shall arrange the auction for the catch. Purchasers assess the value of
the commodity, make their bids and the commodity goes to the highest bidder. The fisherman
shall pay 6.25 percent of the gross value of the commodity, which is divided equally by the
Fishermen’s Cooperative Society (FCS) and auctioneer.
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The fish shall be passed on from the catcher via the commission agent to the
processor/exporter to importer or the local wholesaler, then to retailer, and finally to
consumer.
The fish is generally brought to the auction hall/market on the fish harbor where the
processor/exporter or wholesalers purchase the catch. Almost all the processing units are
located in Karachi. Therefore, the catch meant for processing/export shall either purchased at
harbor, or shall be brought to Karachi immediately if purchased at other fish harbors. The
purchase made for local sale shall be bought by wholesaler who delivers it to the retailer in
local market which shall be ultimately sold to consumer.
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8 ORGANIZATIONAL PLAN
8.1 Form of Ownership

The organizational form of the business will be a Registered Ordinary Partnership (ROP)
between 5 people. An ROP is one in which the partnership agreement, including the details of
capital contributions, management and objects, must be in writing, and registered with the
Ministry of Commerce.
8.2 Registration of the Company

For registration, we will need to consult the Chamber of Commerce. We will have to become a
member of the Chamber of Commerce which will tell us if a certain name has been taken or
not, etc. There is a pro forma that needs to be filled. It requires information such as the scope
of business, nature of the business; which in our case is processing and services, company
profile and also the profile of the directors of the company, so on and so forth.
8.3 Registration of a Partnership

The registration of partnerships is not compulsory by law. It is optional and there is no penalty
for non-registration, but since it is a registered ordinary type of partnership, we plan to register
our business because there are disadvantages for not registering. If any dispute arises among
the partners or ex-partners they may not resolve the issue through the civil courts. An
unregistered firm cannot institute a suit to settle these disagreements. Neither can an
unregistered firm sue a third party for the enforcement of any rights arising from a contract,
e.g. the recovery of the price of goods supplied. Moreover, in order to become a member of
PFEA (Pakistan Fisheries Exporters Association) or Chamber of Commerce and gain the benefits
of these memberships, we have to register the company.
8.4 Partnership Deed

The mutual rights and obligations of all partners must be documented in the shape of a
“partnership deed”. This needs to be signed by all the partners and subsequent copies held by
each partner. At the time of registration, a copy of the deed has to be submitted with an
application to the Registrar of Firms in the concerned area. This document may also be referred
to as an “Article of partnership”.
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8.5 Principal Partners

The 4 partners will be the founding owners of the business namely:
 Rabiya Anjum
 Sidra Shahid
 Nabeela Saleh
 Sughand Muneer
All these 4 partners are graduates of the most renowned business institution of Pakistan IBA
(Institute of Business Administration). All the four have had remarkable academic performance
as well as a proven record of extra-curricular activities. They have all always worked as a strong
team on various projects in the four years of their education hence there all know how to work
in harmony. Moreover, together as a team they also participated and won various business plan
competitions at inter-university and international levels.
The 5th partner will be the investor who invests 50% of the capital in our business. All the other
four partners would have equal partnership and ownership rights and decision making
authority; however the 5thpartnerwould be just a sleeping partner.
8.6 Authority of Principal Partners

Alpha Fish Processing and Exports is a business that will be formed by five partners. All the
partners will have an active hand in running the business and will acquaint themselves
intimately with all aspects related to it. These partners will further hire employees to ensure
that the business is run efficiently. Apart from that a few experts will also be hired to gain a firm
foothold in the industry. The partners will be the owners looking after all the activities of the
business as Co-Founders and look into the financial aspects and the hiring of the management.
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This is a rough organizational chart that will be followed by Alpha Fish Processing and Exports:
BOARD OF
DIRECTORS (BOD)
- FOUNDING
PARTNERS
CEO /
PRESIDENT
SALES / PRODUCTION &

FINANCE HR
MARKETING INVENTORY
MANAGER MANAGER
MANAGER CONTROL
MANAGER
SALES ADMINISTRATI
ANALYST VE ASSISTANT PROCESSING
WAREHOUSE WATCHMA
& PACKAGING
WORKER N
STAFF
8.6.1 CEO
The CEO/ PRESIDENT of the company is one the four partners. He will be selected by the
method of voting by all partners. His responsibilities will include making decisions of particular
and major issues after holding a meeting. He will also represent the company at all levels
whether domestic or international and also at the Chamber of Commerce.
8.6.2 Finance Directors

The finance manager is one of the partners of the company. She is responsible for all the
accounting and book keeping activities of the company. She is also responsible for setting
budgets for the activities set by the Sale/ Marketing Manager and the Production and Inventory
Manager. She will look into the tax procedures and deal with it by hiring a tax consultant if
required. Sughand and Nabeela Saleh will be the Finance Directors.
8.6.3 Sales/Marketing Director

The sales/ Marketing Manager will handle all the issues associated with creating a good image
of the product and all the activities that will increase sales and procure more customers. The
responsibility of creating a reliable and superior image falls on her shoulders. She will be aided
by the sales analyst and make decisions accordingly. Moreover, she will also be responsible to
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conduct consumer research to keep the customer centric approach and perform efficiently.
Rabiya Anjum will be the Marketing Director.
8.6.4 Sales Analyst

The sales analyst will be an expert who will have atleast 3 years of experience in the fisheries
industry and is well acquainted with all the new techniques that will help the business incur a
profit. It will be his responsibility to predict accurate trends of consumer preference and
industry trends and advise the manager on the most feasible decision or course of action.
8.6.5 HR Director
The HR Director will be again one of the partners who will look into the hiring of all the labour
and will also look into the aspects of the business that have been outsourced. The HR Director
will also have to hire mid-level Marketing Manager, Finance Manager, HR Manager, Production
Manager and Inventory Control Manager who will all report to their respective directors. The
majorly outsourced branch is of the transportation of the goods to the warehouse from the
suppliers. It is the company's policy to retrieve the goods from our suppliers once they are
ready to ensure a reliable supply and lessen the burden on the supplier; thereby strengthening
our relationship with them. She will ensure that all the people employed in their respective
capacities are fully capable and are properly matched with the tasks assigned. He will also settle
any grievances that might occur amongst the employees as well as their compensation and
performance appraisals. Sidra Shahid will be the HR Director.
8.6.6 Administrative Assistant

The administrative assistant although will primarily work under the HR Manager, he will also do
secretarial work for the other managers and assist the sales analyst if required. He will do all
the administrative work and set up meetings and sort out schedules of the managers. He will
also be required to have a minimum of 3 years of experience to be eligible for the job.
8.6.7 Production & Inventory Control Manager

The inventory manager will be a highly skilled expert. He will also shoulder the responsibilities
usually done by a supply chain manager along with his respective duties. Therefore, he must
have a minimum of 3 years of experience. He should be well versed with the inventory system
that the company decides on using. He will be required to keep a close check on the level of
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inventory and to keep a good rapport with the suppliers for the product to be ready on time. He
will also need to maintain good communications with the transport and packaging companies
and will keep tabs on them more closely than the HR manager. He will have a ware-house
worker and a watchman who will report directly to him. The ware-house worker will keep a
visual check on the inventory and will be present for the loading and the unloading of the goods
in the ware-house. The watchman will be there to create a visual deterrence for theft because
there will be a security system set in the warehouse to guard the inventory.
Furthermore, his responsibilities will include deciding the schedule of production and making a
plan for it. Moreover, he would have to provide overall management of the ongoing production
operations including assisting in inventory control, scheduling, documentation, equipment
maintenance, calibration, shipping, and quality control/inspection. Furthermore, he would have
to assist in creation of efficient processes through hands-on development and training. Also he
would have to track quality of all processes through analysis of recorded data and formation of
additional test-points and lastly correlate results with requirements/specifications. This
manager will be hired and should have atleast 3 years of work experience. However; all the co-
founders will have an active involvement and control over the entire management and
production keeping themselves completely updated with the entire process.
8.7 Sources of Hiring Employees

The employees will be hired through ads in the newspapers. The applications received will be
reviewed, evaluated, interviewed and selected by the HR Manager.
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9 ASSESSMENT OF RISKS
The production conditions in Pakistani fish processing market are really unhygienic which, was a
major reason for ban of Pakistani fish products in 2007 by the European Union as the quality of
processed fish did not match their standards. Since then Pakistan has been facing problems in
increasing its seafood exports. Pakistani authorities requested the European Union officials to
visit the harbor in August last year. The EU officials promised to visit the country by the end of
the year, but then changed their plans without giving Pakistan any reason. However we are
planning to change this risk into an opportunity by investing into an already existing plant and
to upgrade it to the level matched with the European Union and international standards. This
would help us to be among the processing units that are exporting to the Japan, USA and
European Countries.
Another problem that can be faced would we be the dumping of solid waste and toxic materials
by chemical factories etc into the sea which, in return affect the quality of fish cached.
According to a Pakistan Council of Scientific and industrial Research (1999) study, huge amounts
of toxic metals have been found in marine life such as fish, lobsters, crabs and shrimps. The
metals include mercury, cadmium, chromium, lead, arsenic and zinc. Many of these metals are
carcinogens and can cause genetic deformities and other fatal diseases. Hence we have to take
extra care in processing the fish to meet the International standards for quality of the fishery
products.
Furthermore the markets for export are continuously expanded and diversified with increase in
demand for variety of fishery products. The diversification in demand has provided us with an
opportunity to cater to the expanded markets with competitive costs.
Additionally fish stocks in Pakistan are declining by15 percent every year because of the
widespread use of fishing nets and because of this the plants are only operating at 20 percent
of their total capacity which in turn is increasing their costs of maintaining the plants. According
to Faisal Iftikhar Chairman of Pakistan Fisheries Exporters Association the fish industry would
come to end within next five years if this continued. This will create a problem for capacity
utilization as currently. To avoid any such problems in the coming years of our business we are
planning to start a fish farm as well. However that could only be possible if we are able to
recover our costs of starting the business within appropriate time.
Moreover the exchange rates and regulatory environment of the importing countries will also
have an impact on our exports. Currently US dollar has depreciated because of which the
exports to USA would be expensive. However euro and Japanese yen have appreciated and if
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this trend continues then our exports would be cheap to these countries consequently making
it difficult for us to achieve the breakeven point on time.
9.1 Competitors
European Union, Japan and USA have developed markets for fish imports with Vietnam, China,
Indonesia and Canada as major fish exporters to these countries. Companies like Cafatex Corp
which is a Vietnam based seafood exporter and Dalian Fulejia Foodstuffs Co, Ltd, a Chinese fish
exporting in these markets. Hence for a newly developed fish exporting business, like ours, it is
difficult to penetrate into the market. Therefore we planned to keep our prices competitive
with higher range of products available to the consumers in these markets according to their
preferences. The preferences of the consumers were found out through a market survey
conducted in the markets of these countries.
Other competitors may also include the local fish exporting units which are already in the
market. These include 11 processing units that are exporting to European Union currently.
However these units are not listed with the European.
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10 FINANCIAL PLAN
The financial plan has been devised with the aid of SMEDA and he figures provided by them and hence
are as near to be realistic as possible.
10.1 Project Cost
10.2 Project Returns
10.3 Project Financing
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10.4 Pro Forma Income Statement
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10.5 Pro Forma Cash Flow Statement
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10.6 Pro Forma Balance Sheet
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10.7 Breakeven Analysis
Fixed Cost= 90341150

S.P (PER TON)= 46000
V.C (PER TON)= 9500
=
BREAK EVEN UNITS= 90341150 2475.1
46000 - 9500
Rupees In
thousands
Units
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10.8 Sources for Procurement of Finance

The sources for the procurement of finances will include:
 Angel investor or Venture Capitalist
An angel investor is an affluent individual who provides capital for a business start-up, usually in
exchange for convertible debt or ownership equity. Venture Capitalist funds money by owning
equity in the companies it invests in. 50% of the investment required will be financed by such
an investor in return for which this investor will have equal profit sharing in the business;
however as a sleeping partner.
 Letter of Credit
A letter of credit is a document issued mostly by a financial institution which usually provides
an irrevocable payment undertaking (it can also be revocable, confirmed, unconfirmed,
transferable or others e.g. back to back: revolving but is most commonly
irrevocable/confirmed) to a beneficiary against complying documents as stated in the credit.
According to this, a bank/DFI makes a written undertaking to pay the supplier if the actual
buyer fails to pay. This way, the business will not have to make advance or immediate
payments. This can be availed from the NBP, for example.
 Term loan
This will be a long term loan of 50% of the total investment required. This loan can be availed
from a bank/DFI. Repayment will be done in installments, with interest.
 Personal Guarantees
This basically entitles the owners of the business to personally repay the loans in the event of
default by the business. Once the business has become a success and has good business rating,
personal guarantees will no longer be required by the bank.
10.9 Summary of the Salient Terms of Financing

If the loan is obtained from a bank, the interest rate will be too high so getting a loan from an
investor is a better option. For obtaining a bank loan, we need to give something as a
guarantee; it can also be obtained on personal guarantee. If we have an order, a Letter of Credit
(LC) could've been our guarantee against which obtaining a loan will be very easy. However,
when we first set up the business, we won’t have any order at the time, in which case a
personal guarantee of the owners of the business will be required to get a loan. According to
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prudential regulations, the maximum exposure of a bank on a single SME should not exceed Rs.
75 million, and the bank should make sure that the loan has been properly utilized for the
purpose for which is was taken. If loan is not an option then we can easily assume that the
initial investment is being made by the partners.
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11 EXIT STRATEGY
The owners of Alpha Fish Processing and Export will exit this endeavor after they have created a
flourishing business that could be sold for a substantial profit. It is the owners' intention to run
this business until they are ready to retire or have decided to sell the business and start
another.
In the event the proposed plan is not successful the owners will implement necessary measures
to exit the business endeavor with minimal damage to the owners and investors. All equipment
and merchandise will be sold to cover any outstanding debts. Any remaining debt will be paid
by the owners in the form of monthly payments until all debts are paid in full. The owners will
consider themselves successful when they have acquired a market share of 12-15% and the
limits for achieving such a milestone is within 7-8 years after starting the business.
The success of the business will be monitored monthly in the first year and quarterly in
subsequent years. The owners are aware that it usually takes new businesses four years to start
turning a profit and that the business could operate at a loss during that time. The owners will
keep this in mind when evaluating the state of the business, and make adjustments when
possible to keep the business running with a positive cash flow.
Acceptable loss has been determined; if the business exceeds this amount and is unable to
compensate the owners, we will begin the process of closing the business and paying back
debt.
Moreover, the owners believe that the most likely exit will come from the sale of the Company
or licensing of its intellectual property to one of its strategic partners or to another enterprise.
This will be the option in the event of one or more of the partners wanting to continue the
business while the others not.
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12 APPENDIX
12.1 REGULATIONS
Exporters should take note of the following regulations when exporting from Pakistan:
 For size and weight maximums, an exporter must check with the destination country's
limits
 Dimensional weight or actual weight, whichever is greater, determines the shipment
tariff
 Foreign exchange rules and procedures apply to exports as determined by the State
Bank of Pakistan
EXPORT CONTROL REGULATIONS.
Exchange policies regarding exports cover all goods exported from Pakistan irrespective of
whether they are subject to license under the Export Trade Control Regulations or not.
Similarly, nothing in the Exchange policies relieves the exporters from the necessity of
complying with the Export Trade Control Regulations as laid down by the Government from
time to time. The Government of Pakistan has under the Export Trade Control Regulations
banned exports to Israel.
SHIPMENT LOST OR DAMAGED IN TRANSIT.
(i) If shipments from Pakistan are lost in transit for which payment has not already been
received, the Authorised Dealers must see that an insurance claim is made immediately the loss
is known. The triplicate copy of the relative export form should be endorsed with the narration
"Shipment Lost" under the stamp and signature of the Authorised Dealer and sent to the State
Bank under a separate covering letter giving the following particulars and bearing running serial
number:
(a) Name of the insurance company with which goods were insured.
(b) Amount of insurance and its currency.
(c) Place where claim is payable.
(ii) The Authorised Dealer who had certified the export form should pursue the matter with
the shipper and ensure that in each case the exporter has received the insurance claim and
produces encashment certificate, in cases where claims are paid in foreign currencies and
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Rupee payment certificate where settlements are made in Rupees. These certificates should be
forwarded by the Authorised Dealer to the State Bank giving reference of relative export
forms.
SHIPMENTS SHUT-OUT ENTIRELY.
(i) Where a shipment to be made by a particular vessel is entirely shut-out and reshipped
by another vessel, the exporter should apply on the prescribed form in duplicate to the
Customs for permission to alter the name of the vessel on the relative export form and the
shipping bill.
(ii) Where a shipment is entirely shut-out and is not being reshipped immediately by
another vessel, the exporter should give a notice to the Customs in the prescribed form in
duplicate. It will be the responsibility of the exporter concerned to produce to the Authorised
Dealer who had certified the export form, a copy of the shut-out notice duly certified by the
Customs within 21 days from the date of certification of the export form. On receipt of the
shut-out notice, the Authorised Dealer should treat the relative export forms as cancelled and
forward the shut-out notice to the State Bank.
Quantitative restrictions, exchange controls, and other direct state interventions into trade
have been largely eliminated; ordinary customs duties are now the primary trade policy
Instrument
CUSTOM PROCEDURE FOR EXPORTS
Exports play a vital role in the development of any economy. One of the initiatives taken by the
Government of Pakistan to enhance & boost exports, is to provide various export incentives as
well as streamlining export processes. Among other steps taken by Government, the
simplification of the export clearance procedure is considered to be a vital step in the
facilitation of the exporter. The following procedure has been explained in terms of various
stages of inspection, clearance and documentation required:
CLEARING PROCEDURE
Once the consignment to be exported arrives at the port, usually a clearing agent’s services are
sought so as to facilitate the procedure of clearing the consignments. The documents to be
provided by an exporter to the clearing agent are as follows:
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a) Packing list
b) Invoice
c) State Bank form
d) Letter of Credit or Contract
e) Certificate of Origin
However if the exporter is exporting for the first time, then the following documents have to be
provided in addition to those mentioned above:
a) Sales Tax Registration Certificate (copy)
b) NTN Number (certificate)
c) Export Registration Certificate (No longer required according to SRO 490(I)/2002 dated 5th
August, 2002)
Provided the above mentioned documents are complete, the clearing agent prepares the
shipping bill and files the documents with Custom department. A “machine number” is allotted
to the Shipping Bill, and the case is forwarded to the Port Gate. The consignment is allowed to
enter the port vicinity, and is registered at the gate according to the allotted number. The
Deputy Superintendent (D.S.) marks the consignment for examination to the inspector of the
examination hall. Once the inspector has examined the consignment, the case is marked to the
D.S. for approval. 2% Export Development Surcharge (EDS) of the invoice value shall be
deducted through receiving banks upon remittance of export proceeds against the Export
Development Fund (EDF). However, EDS has been waived off for small exporters and those who
exceeded their exports more than 10%. Provided the D.S. approves the case, it is forwarded to
the Superintendent with the examination report for final approval. The case if approved by the
Superintendent is marked to the D.S. for “Out of Charge”. The container is given a final physical
check and is sealed by the bonded carriers or the port customs authority.
12.2 Network for Dealing with Regulations
 P.F.E.A (Pakistan Fisheries Exporters Association)
As mentioned earlier, the association that Alpha Fish Proessing and Export has become
member of is Pakistan Fisheries Exporters Association (P.F.E.A) as not only does it help
in processing of fishery products; but also, the in the enhancement of export of them.
Therefore, for any regulation that has to do with the fisheries industry or is related to
the firms in the fishery sector Alpha Fish Processing and Export can deal with it with the
help of P.F.E.A which can help influence the regulation if it is working against the
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majority or force the implementation of a regulation which is in the benefit of the

majority.
 SMEDA (Small and Medium Enterprises Development Authority)
Regarding any regulations small and medium enterprises, Alpha Fish Processing and
Export will use the network created by its membership in SMEDA. For instance, for
facilitation of securing finance and any regulations in that regard, SMEDA would be
approached to deal with them.
 FPCCI (Federal Pakistan Chamber of Commerce and Industries)
The FPCCI has advocated and voiced the collective opinion, concern and aspiration of
the private sector and offered helpful advice and solid assistance to the Government in
its efforts to promote exports, encourage foreign investment and stimulate economic
activity in the country. The FPCCI has its fingers on the pulse of the economy and serves
as a bridge between the private sector and the Government.
The FPCCI is playing an active role in presenting problems of trade, industry and
environment and safeguarding the interests of the private sector through constant
dialogue with the Government. Moreover, among the many activities of FPCCI it also
facilitates in the exchange of information relating to trade, industry and economy with
foreign Chambers and Institutions. Hence for any sort of regulations that the
government imposes on the private sector, specifically relating to export sector, the
FPCCI and the network built with it can be approached to deal with such regulations.
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12.3 Our Products
White Pomfret
Squid
Soul Fish
Rohu
Eel
Deep Sea Shrimps
Black Tiger Prawn
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12.4 Miscellaneous
Seafood Exports of Pakistan

250
$ million 200
150
100
50
0
2004-5 2005-6 2006-7 2007-8
2008-9(Jul-Sept)
Period
Per Capita Consumption per Country 2005
100
Kgs
50
Country Name
Consumption Per Capita World Avg
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Total Marine catch. Pakistan.
510,000
490,000
470,000
450,000
Tonnes
430,000
410,000
390,000
370,000
350,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Year
Exports of Fish and Fish Preparations

(Million rupees)
14000
12000
10000
8000 Exports of Fish
and Fish
6000 Preparations
4000
2000
0
2003- 2004- 2005- 2006- 2007-
04 05 06 07 08
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Fish Production
(Thousand Tonnes)
Year Inland Marine Total
1990 113.2 369.8 483
1991 115.9 402.8 518.7
1992 121.6 431.5 553.1
1993 122.5 499.2 621.7
1994 139.5 418.6 558.1
1995 136.4 405.5 541.9
1996 160.2 395.3 555.5
1997 167.5 422.1 589.6
1998 163.5 433.5 597
1999 179.9 474.6 654.5
2000 176.4 438.4 614.8
2001 178.6 451 629.6
2002 183.3 454.5 637.8
2003 165.7 400.5 566.2
2004 170.5 403 573.5
2005 174.6 406 580.6
2006 179.9 425 604.9
2007 250 390 640
Source: Marine Fisheries Department, Karachi
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Fish Production
600
500
Thousand Tonnes
400
300
200
100
0
1 1
90 99 992 993 994 995 996 997 998 999 000 00 002 003 004 005 006 007
19 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2
Inland Fish Catch
Year Marine Fish Catch
Year Exports of Fish and Fish Preparations
2003-04 8805.6
2004-05 8259.1
2005-06 11624.5
2006-07 11419.1
2007-08 13327.5
Source: Marine Fisheries Department, Karachi
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12.5 Process Flow Chart of a Sea Food Processing
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12.6 Questionnaire for Customers
1. Age _______________
2. Occupation _______________
3. Country,City _______________
4. Do you consume seafood in your diet?
o Yes o No
Proceed further if your answer to question 4 is Yes.
5. How frequently do you buy seafood?
o Once a fortnight o Twice a week

o Once a week o More than twice a week
6. What quantity of seafood do you buy in a month?
o Less than 1 kg o 3-6 kg

o 1-3 kg o More than 6 kg
7. Where do you prefer to buy seafood from?

o Supermarkets o Open fish markets
8. Will you prefer to buy hygienically processed and packed seafood over loose seafood?
o Yes o No
9. If your answer to question 8 is Yes, which type of packing would you prefer?
o Cans
o Reusable plastic jars
o Other __________
10. Which variety of seafood do you purchase?*
11. What types of seafood are you familiar with?*
*We intend to preserve and export many types of seafood to different consumer markets e.g. EU, Japan,
USA and Russia. We have found through secondary research that different markets demand different
varieties; hence the options for this question would probably vary.
51 | P a g e
12.7 Questionnaire for Entrepreneur
Q 1 Do you have a Research and Development Department?
o Yes
o No
Q 2 Over the last five years how many times have you updated the technology?
o 1-2 times
o 2-3 times
o No (Since_________)
Q 3 in terms of weakness or problems rate the following from 1-5 with 5 being the worst.
o Transport ____
o Government ____
o Trawlers ____
o Hygiene ____
o Storage ____
o Technology ____
o Overfishing ____
Q 4 What is your production?
_________________
Q 5 What is the capacity of your plant?
_________________
Q 6 What is the present labor force?
_________________
Q 7 How much money have you spent to rectify the hygiene problem?
_________________
Q 8 What is your major export?
o Live
o Frozen
o Salted
o Canned
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Q 9 What is the most demanded product?
o Live
o Frozen
o Salted
o Canned
Q 10 Apart from fish which other sea food is most demanded?
o Lobster
o Crab
o Squid
o Shrimp
Q 11 What is the international demand for seafood?
_______________
Q 12 Do the trawlers fish all year?
o Yes
o No
Q 13 How many workshops have you attended in the last five years?
o 1-2
o 3-5
o More than 5
Q 14 Who trains your employees?
________________________________________________________________________
Q 15 What is the important reasons for the low demand in Pakistan for fish?
o Price
o Taste
o Difficulty in access
o Storage
o Cultural taste for meat
o Religious sect
Q 16 What is your procedure for processing of fish?
________________________________________________________________________________
53 | P a g e
12.8 Analysis of Questionnaire
There was a consensus on the Research and Development department in the industry as none of the
companies had one. The entire industry doesn’t have a privately owned R & D department that could
work in collaboration with the companies.
The next question was related to technology. Of all the five people questioned only one said that they
have improved their technology in the last five years but that too has been to improve the hygiene
condition of the plant. Otherwise there has absolutely been no technological improvement in the
industry in the last five years.
Graphic Rating of Problems in the Fishing Industry
Overfishing
Technology
Type Of Problem
Storage Facilities
Hygiene
Trawlers
Government
Transport
0 1 2 3 4 5
Intensity
In terms of problems facing the industry, the Transport industry showed no problem to the industry.
Firms have their own transporters so they do not face issues incase of fuel price hikes or strikes.
Government, however, received a rating of five and was marked as the chief problem facing the
industry. Every person interviewed gave the highest (very unsatisfactory) rating of five to the
government. The reason behind this was said to the incompetency of the government officials to
implement any kind of laws and regulations. Widespread corruption in the ranks of the government
54 | P a g e
officials and the subsequent governing bodies were also said to the cause of the rating. The factory
owners were so disgruntled by the attitude of the government that most of them wanted to submit
their own ratings beyond five when asked to rate the government.
Trawlers received an average rating of 3.6 from the interviewees. This showed that the trawlers were
only moderately responsible when it came to the problems facing the industry because the nature of the
problems facing the trawlers can be easily overcome through some governmental intervention.
However one factory owner gave the trawlers a rating of five and said that the trawlers were very much
responsible for the present condition of the industry since the deterioration of the hygienic condition
starts from the trawlers.
Hygiene received a very high rating from the people interviewed. The average rating of hygiene was 4.6.
The official of KFHA and two factory owners gave a rating of five to the hygienic condition. The rest gave
a rating of four.
The factory owners have their own Storage facilities, hence there is no problem regarding the storage of
the fish in the units. There is also a temporary storage facility in the harbor for fishes which have not
been auctioned. One factory owner gave a rating of three saying that in peak seasons the storage facility
is not enough to cater to the supply of fish hence more storage facility units should be built. However,
this is not feasible since most of the year there is under utilization of the storage facilities due to
significant decrease in landing.
Technology received a rating of 3.6 by three of the factory owners. One responded with four and the
KFHA official said five. The official however was referring to the condition of the trawlers. The
technological condition of the units is satisfactory.
Overfishing also received the highest rating of five. This was due to the fact that this was leading to
depletion of resources in Pakistani waters and can be disastrous for the fishing industry. The use of
banned net leads to the capture of very small fishes which can only be utilized for the poultry feed. This
combined with the fact that fishing takes place all year has exhausted the country’s fish resource.
55 | P a g e
Capacity Utilization
National Seafoods 37.50%

Name Of Company
Mehran Seafood 27.78%
Seagreen Enterprises 33.00%
Akhlaq Enterprises 55.00%
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%
The next two questions were related to the capacity utilization of the industry. Every single unit is
under- utilized at the moment. Most of them are working are working at around 30 % of their capacity.
One unit has a capacity of 60 tons and is storing only around 17 tons per day.
The question related to the rectifying the hygiene problem in the industry yielded a curious result.
Most of the owners said that the hygiene condition needed to be improved but when asked have they
done anything on their own, all of them said it is not their responsibility. This is the responsibility of
KFHA or the MFD. We asked that what if they worked with the fishermen to improve the condition as
that would lead to the lifting of European Union ban, they said that the government will not allow since
it would undermine their power
All the factories major output is frozen product. There are three levels of quality of fish final product.
The best quality fish is Live fish, next is fresh chilled. Both are transported by air. The next quality is
frozen product. This is the major product of all the units. The most demanded international product is
Live Fish because of its highest quality. One industry owner said that it is not difficult to transport it but
the fish taken off from the trawlers can only be used for freezing purposes. The transportation cost is
also paid by the client.
Every fisheries product is in demand. However they said that the most demanded fishery product after
fishes are the shrimps.
The international demand was said to be unlimited. Every kg of fish produced by the units is exported.
This was the reason why there is no competition in the industry.
All, except one said that fishing takes place all year long. This leads to overfishing of the fish. They also
said that the government has failed to stop the implementation of the regulation regarding overfishing.
56 | P a g e
All of the employees are trained by the company themselves. Workshops are also held by different
NGO’s and societies and attended by the owners and workers. But most of them said that this is useless
because the employees lack basic knowledge and imparting them with advanced methods acts as
counterproductive.
The reasons given for the low local demand were price, religion and staple diet. The price factor was
stated by two factory owners and the KFHA official. One stated the religious reasons because most
people treat seafood as not preferable for eating. Another Muslim sect considers fish without skin as
forbidden. Another reason given was that seafood is not our staple diet.
57 | P a g e
12.9 Supplier Evaluation Questionnaire
COMPANY NAME: DATE:
ADDRESS
CITY STATE
PHONE: FAX
EMAIL
Completed questionnaires are to be signed below by an Authorized Official of your
organization.
The information contained in this questionnaire is certified to be complete and accurate.
Supplier’s Signature and Printed Name Title
Date
58 | P a g e

Business Plan For Fisheries Processing and Exporting

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Fisheries Processing and Export Business Plan

6.2.3 Post Shipment Documents.................................................................................................. 20

10.1 Project Cost ................................................................................................................................. 32

1.1 Name of the company

1.2 Name and Addresses of Principals

1.3 Nature of Business

1.4 Statement of Financing Needed

1.5 Statement of Confidentiality of Report

3.1 Pest Analysis

3.1.2.4 Economic Aid

4.1 Our Mission

4.2 Our Business

4.3 Our Product

4.4 The Entrepreneurs’ Background

 Nabeela Saleh Zahri

The entrepreneurs are graduates of Institute of Business Administration, a prestigious and

Purchases Process Export

• Fish is • Fish is • Fish is

5.1 Process Flow Chart

Icing/ washing Processing Hall.

Processing Hall. Packaged

(Source: SMEDA Seafood Processing Plant Report)

5.2 Machinery and Equipment

Machinery/ Specifications Quantity

Flake Ice Machine, Capacity (25 T / 24 Hours) 2

Storage Bin, Capacity (12 Tons) 2

Blast Freezers , Capacity (2T / 8 Hours) -30 C 4

Cold Store , Capacity ( 250 T , 50x 50x 15) -30 C 4

Tables and Racks

(Source: SMEDA Seafood Processing Plant Report)

6.1 Technology Utilization

6.2 Flow of orders

6.2.1 Signing of a Contract

ii. Name of importer

iii. Item of sale

iv. Unit price

viii. Mode of shipment (Sea, Air, Road)

ix. Currency in which transaction will be made.

x. Validity period of a contract & delivery period.

xi. Shipping marks if any.

xii. Arbitration clause.

1. E-Form (Through authorized Commercial Bank).

2. Shipping Bill (Through authorized Clearing agents).

3. B/L or AWB (Through clearing agents)

6. Certificate Country of origin (Through Chamber) or

6(a) GSP (Through EPB)

9. Export contract registration details

6.2.3 Post Shipment Documents

6.2.4 How to Claim Duty Drawbacks

1. Bank Credit Advice ( B.C.A )

2. Bill of Lading (First Original).

3. Railway Receipt (Attested by the Railways).

4. Customs Signed Invoice with Two Photocopies.

6. Exchange Rate Certificate

7. Copy of Shipping Bill.

8. Photo Copy of Form “E”.

9. Laboratory Test Report. (if required)

10. Photocopy of SRO. (relevant to exporter’s product)

6.2.5 Quoting Prices

6.2.6 Signing the Contract

6.2.7 Terms of Delivery

7.1 Pricing Strategy