Pest Control Service [Rs. 6.03 million, May-2021]

Pest Control Service [Rs. 6.03 million, May-2021]
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1.51 MB
Date:
22 November 2021
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Pest control is the eradication or management of pests, a term used to desribe destructive organisms that adversely affect human life by attacking crops, animals, food, etc. Common examples of pests include cockroaches, mites, ticks, mosquitoes, bed bugs, lice, nematodes, thrips, and termites (Deemak).The human response to pests depends on the magnitude of the expected or actual damage and ranges from tolerance, through deterrence and management, to attempts for complete eradication. Pest control measures may be performed as part of an integrated pest management strategy.

There are many methods to control different kinds of pests. These include using Insecticides, Rodenticides, Fogging, Heat treatment, Fumigation and Termite control. This particular study covers details for setting up a business to provide pest control services using two methods; Fumigation and Termite control. Fumigation is used to kill insects including Bed bugs, Coakroaches, Spiders, Rodents, Mosquitoes and fruit flies. Termite Control is used for killing Termites. Target market for pest control services is vast; since it covers both urban and rural areas. The study covers two types of potential customers; households and corporate offices.

Fumigation is a practice of pest control, wherein pests, that live on the surface area for example Bed bugs, Coakroaches, Spiders, Rodents, Mosquitoes and fruit flies, are killed by suffocating them with a poisonous gas (includes chlorine and formaldehyde, along with small quantities of hydrogen per oxide and other oxidizing agents or glutaraldehyde).

Termite control is the practice of pest control wherein pests are killed by using a special chemical solution (includes borate, fipronil or hexaflumuron and water) which would be injected in the holes drilled in the floors and on walls after inspection of the service areas.

The proposed project will provide employment opportunities to 10 to 15 people including the Owner, Entmologist, Sprayer, Drill operator and Fumigator. High return on investment and steady growth of business is expected with the entrepreneur having some prior experience in the related field of business. The legal form of this project is proposed as “Sole propitership”. Further, the proposed project may also be established as “Partnership Concern”.

This “Pre-feasibility Document” provides details for setting up a Pest Control Service business. The service capcity for this kind of business is defined in term of covered area. The proposed business has a capacity of serving an area of 1,260,000 sq. ft. in a year. The initial capacity utilization in the first year of operations is estimated at 50%, serving 630,000 sq.ft. area.

The business will be set up in a rented building with area of 820 square feet. The project requires a total investment of PKR 6.03 million. This includes capital investment of PKR 5.67 million and working capital of PKR 0.36 million. It is proposed that the project shall be financed through 100% equity. The Net Present Value (NPV) of project is PKR 26.84 million with an Internal Rate of Return (IRR) of 64% and a Payback period of 2.28 years. Further, this project is expected to generate Gross Annual Revenues of PKR 7.70 million during 1st year, Gross Profit (GP) ratio ranging from 47% to 63% and Net Profit (NP) ratio ranging from 10% to 51% during the projection period of ten years. The proposed project will achieve its estimated breakeven point at capacity of 38% (483,320 sq.ft) with breakeven revenue of PKR 5.90 million.

The proposed project may also be established using leveraged financing. At 50% financing at a cost of KIBOR+3%, the proposed unit provides Net Present Value (NPV) of PKR 30.25 million, Internal Rate of Return (IRR) of 64% and Payback period of 2.28 years. Further, this project is expected to generate Net Profit (NP) ratio ranging from 5% to 51% during the projection period of ten years. The proposed project will achieve its estimated breakeven point at capacity of 44% i.e. (549,558 sq. ft.) with breakeven revenue of PKR 6.72 million.

 
 
 
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