In order to provide a student with job exposure and an opportunity of the transition of theoretical knowledge into real life experience, an internship is a must. A better balance between theory & practice can be gained through this program.
Through this Internship report an attempt has been made to assess the performance of Asian Dredgers Limited (ADL). Basically this report has been developed from the basis of secondary data. The sources of information are annual report of ADL, internet, newspaper, magazine etc. My experience also helps me to establish this report.
Now in Bangladesh a few companies are engaging in Dredging system. Asian Dredgers Limited is one of them. It is a new company which start its journey with the core objectives to help the nation to retrieve its old heritage of river transportation and thrive the economy as a whole by making all major rivers of the land navigable round the year. Its goal is to provide the best service for the best price while maintaining safety standards and not only profit maximization but also making employment opportunity in the country. As a part of social responsibility ADL tries to keep free the river from silt and remain its natural flow by dredging.
In this report I have focused about the company profile, financial aspect, contribution of the society and the county and the over all dredging system of Asian Dredgers Limited. This paper I have explained my best in respect of my real life experience gathered from different departments.
Bangladesh contains over 300 rivers; many of which are heavily silted and have not been dredged in nearly thirty years. The government plans to dredge the rivers in an effort to reduce potential flooding that inevitably follows regularly occurring natural disasters and to make the rivers more navigable. As the largest industrial conglomerate in Bangladesh Asian Dredgers Limited (ADL) decided to invest in the dredging project under a new emerging paradigm known as public-private partnership. ADL stepped up as a private sector supporter when the government searched for assistance, adding dredging to their many specialties. The dredges will create new employment opportunities in Bangladesh. With the decision to enter into the dredging industry ADL want to save our hard earning foreign currency. In the past, foreign contractors were the only ones to do these projects; now it can be done by the largest industrial corporation in Bangladesh.
Origin of the report:
Internship program is a pre-requisite for acquiring BBA degree. Before completion of the degree, a student must, undergo the Internship program. As the classroom discussion alone cannot make a student perfect in handling the real business situation, therefore, it is an opportunity for the students to know about the real life situation through this program.
The BBA (Bachelor of Business Administration) internship program is required course for the students who are graduating from the Business studies institute of Asian university of Bangladesh. It is a Three credits hour course. Students who have completed all the required courses are eligible for this course. In this internship program, I was attached to do my internship in Asian Dredgers Limited, Motijheel Branch, where I was given the opportunity to work in all the departments. During the period of these three months the objective of the program was to familiarize the student with the practical implementation of the knowledge provides the theoretical aspect of the practical life. Both the academic and the organizational supervisor assigned me on this project. The report is on “The Company Profile and the overall dredging process of Asian Dredgers Limited”.
Objectives of the report:
The main general objective is to gain practical job experiences for flourishing my career and view the application of academic knowledge in the real life.
Scope of this report:
The scope of the study is to have an idea about Asian Dredgers Limited. The report starts with the outline of the organization in focus, presenting the mission and vision of the organization. It accompanied by the global perspective and look into the future. SWOT analysis helps to assess the strength, weakness of the organization and also for evaluate the opportunities and threats of the organization. The scope of this report is limited to the overall description of the Company, its services, and its position in the market.
This report is the reflection of three months internship program at the Asian Dredgers Limited, Motijheel branch. Now a days Dredging sector is a fast growing sector in Bangladesh. The study is a survey type research. As an internee I had to collect data and information from that busy corporate environment. In order to prepare this report I have collected data and information both from primary sources and secondary sources.
A type of research conducted to clarify the problem definition and prepare for additional research to prove or disprove the hypothesis. Exploratory research again subdivided into three categories they are
- Literature Survey
- Experience Survey
- Case Study
The purpose of this research is to extend aid to the investigation in formulating the research hypothesis. For this reason, it is also called Formulating Research.
Conclusive research design is more applicable research design than exploratory research. Once the hypothesis is formulated, the stage is set to collect data and prove the hypothesis.
Descriptive research has been used to describe that existed in the market/field outside where the project study was conducted description of goods, customer, Business process, buying habits etc.
The most scientifically valid research is experimental research. The purpose of experimental research is to capture cause -and-effect relationship by eliminating competing explanation of the observed findings .In the study, Descriptive research is adopted because descriptive studies are accurate and very simple. The descriptive method is very effective to find out and know the characteristics of certain group as age, sex, educational level, occupation or income.
All items in any field of inquiry constitute a universe or population. A complete enumeration of all items in population is know as a cense inquiry. When the ‘Universe’ is small in size, this type of inquiry can be made, but when the research is done with a large number universe, sampling is used for collecting data required for the study. As in this study for collecting data required I had to meet with customer with questionnaire and as the numbers of customer are few in number used sampling as a technique of collecting data.
Different types of sampling:
Sampling is the process of selecting units (e.g. people, organizations) from a population of interest. Broadly there are tow types of sampling-
- Probability Sampling
- Non- Probability Sampling
This sampling technique utilizes some from of random selection. In order to have a random selection method, one must set up some process or procedure that assures that different units in the population have equal probabilities of being chosen.
Non-probability samples results from a process in which judgment of bias enters into the selection of members of a universe included in the sample.
For completion this research I have adopted “ Simple Random Sampling Method ” as the sampling technique.
Simple Random Sampling:
This type of sampling was basically used as it gives every unit in the population an equal and independent chance of being included in the simple random sampling , the method adopted was the use of random numbers . This sampling was mainly to find out the satisfaction level of the customers.
In this project I have used “Simple Random Sampling Method.”
Because this Random Sampling Method is enable-
- To give each unit of population an equal probability getting in to the sample.
- To give each possible sample combination on equal probability of being chooses
In this research I have choose 20 samples size out of total customer in Motijheel Branch. So the sample size 20 will be the maximum potential. It will help me to find out and solve the problem practically.
Data collecting Method:
There are number of tools to collect data. Some tools use to collect the primary data and some used to collect the secondary data. Data or facts are the raw materials for the research. The reliability of the research is mostly depends on its accuracy of data collection. There are two type’s data-
- Primary data
- Secondary data
The primary data is those types of data, which are collected from the root. It’s also called the raw data. There are various tools of collecting primary data.
- The observation tools
- The interview tools
- The questionnaire tools
The secondary data are those, which have already collected by some one else And wishes have been passed through the statistical process. This data can be collected by two sources:
- Internal tools
- External tools
Internal tools are includes:
- Palm lets
External data collection tools are includes:
- Website browsing
Direct data collection tools have used for my project. I have used here questionnaire tool to collect the data.
Limitations of the Report:
The main hindrance behind preparing this report and extensive one was time. To provide current information and to make the report read –worthy, support from various sources is a must. All of the employees & staffs of Asian Dredgers Ltd. were extended their support and tried their best for this research but it was very tough for me to manage time preparing this. While collecting the necessary data i.e. interviewing the customers, they didn’t disclose much information for the sake of the confidentiality of them. Last of all, Lack of personal experience to prepare this type of report is totally new to me as an intern.
Company profile / Organizational Profile:
Asian Dredgers Limited (ADL) is a dredging company registered under the companies Act. 1994. This dredging company formed in May 2010 with the core objectives to help the nation to retrieve its old heritage of river transportation and thrive the economy as a whole by making all major rivers of the land navigable round the year. Bangladesh is a delta with total area of nearly 144 thousand square kilometers. It has eight major and more than 30 branch rivers with nearly 3500 kilometers of inland and costal waterways. Asian Dredgers Ltd treats natural environment with the utmost care and with good reason. Yet human intervention in the natural world is unavoidable, to protect one selves from flood and ensure good land drainage, maintenance of water ways in canals, rivers and coastal areas and land reclamation, planed land development is our responsibility.
Asian Dredgers Ltd is a full service company capable of taking care of all the dredging and excavating needs. They have a competent staff of trained equipment operators, shareholders, mechanics and support crew. They believe we have the best hands in the portable dredging and material handling industry. Their goal is to provide the best service for the best price while maintaining safety standards. They specialized in land development, lake, river and coastal dredging. Within a short span of time since its inception it has been famed and widely entrusted as one of the leading dredging company in Bangladesh already having working experience with various Government, non-Government and private construction and development. The infrastructure so engaged in a constant search for the right balance between society’s demands with regards to safety environment on one hand and social economic interest on the other hand.
The Asian Dredgers Limited has already procured four modern dredgers from IHC Holland and in the process of assembling several other dredgers soon. With the decision to enter into the dredging industry we want to save our hard earning foreign currency. In the past, foreign contractors were the only ones to do these projects; now it can be done by the largest industrial corporation in Bangladesh. Asian Dredgers Ltd. extended a worldwide invitation to all renowned dredge manufacturers interested in supplying the new equipment. After evaluating all offers, ADL choose IHC Holland because of their reputation for manufacturing innovative, quality dredging equipment. ADL only buys the finest. They want the most modern equipment in the world and they found DSC to have the best design at a competitive price compared to other U.S. and European manufacturers. “Other contributing factors that led them to their selection include DSC’s fully automated equipment that uses PLC-touch screens to operate the dredge, deeper digging depths, furthest pumping distance without a booster, and increased production capabilities. With a digging depth of 23 meters and production capabilities exceeding 1500 cubic meters per hour, the dredge is said to be the most modern in design in the entire country of Bangladesh.
|Company Name||Asian Dredgers Limited|
|Corporate set up||Private Limited company|
|Act||Company Act 1994|
|Company type||Dredging Company|
|Objectives||The proposed project will set up a modern dredging of rivers and canals to different service rendering organizations.|
|Number of Employees & Staff||146|
|Fleet||Any place in the inland water of Bangladesh as per requirement|
|Head office||RezaPlaza, 56 Progoti Soroni, Block –J, Road-12, Baridhara|
|Branch office||SharifMansion (2nd Floor), 56-57 Motijheel C/A, Dhaka-1000, Bangladesh|
Equipments/ Main Components
|20 inch cutter suction dredger (IHC Holland Beaver 50c)||500 cum per hour 2800000 cum per year|
|10m work/crane boat with a crane of 44knm,||Bollard Pull 2.2 tons Maximum Speed 7.0 Knot|
|16m Accommodation Barge||Accommodation for 6 nos officer and 12 nos. crew|
|Floating and shore pipe||1500 meter|
|Portable Welding Set||1 set|
SWOT Analysis of ADL:
SWOT analysis is the compete study of an organization’s exposure and potential in perspective of its Strength, Weakness, Opportunity and Threat. It assists the organization to make their existing line of performance and also forecast the future to improve their performance in comparison to their competitors. It also helps the organization to understand the present situation of the business and also considered as an important tool for making changes in the strategic management of the organization.
Strength of ADL:
- ADL will plan to engage in a variety of corporate social activities in the country.
- ADL has latest Dredgers and modern dredging equipment.
- 7th largest Dredging Company in the world with 80 mn cu. capacity
- Mini Ratna – category 1- PSU
- Dominates maintenance dredgers in Bangldesh.
- Familiarity with Indian conditions and fleet suited to Indian ports (e.g. Low draught vessels for Haldia)
- Ports and DCIL both under MOS and hence highly coordinated business approach
- High technical competence, trained manpower, good quality top management
- Experienced top management for operating the business smoothly. The authority has employed some experienced people who have great experienced in this profession.
- To compete with the competitor ADL has satisfactory capital base for running the business
- Due to its careful decision low infection in loan exposure.
- Prospective IT infrastructure which help to maintain the online banking services.
Weakness of ADL:
- Market is saturated because many competitors already exist in the market so they have to face lots of competition.
- Lack of full fledged marketing set-up because of full capacity utilization in the past resulting from reserved market share
- High manning levels.
- Being a PSU , elaborate decision making process to withstand vigilance scrutiny
- As against the increasing global trend towards large vessels, dredger size is small
- Relatively lesser experience in international market and dredging.
- Operational inefficiencies
- High cost of repairs & maintenance
- Manual methods for MIS
- Comparatively lesser use of IT
Opportunities of ADL:
- Maintenance dredging is a perennial requirement for ports and India with its long coastline, resulting in good business potential
- Growth opportunities in dredging from new ports
- Value added services for ports
- Dredging opportunities in different parts of the country.
Threats of ADL:
- Overall liquidity crisis in market.
- Regulatory changes may erode dominant market share.
- Preferential treatment in case of government contracts, if removed, could impact growth and profit.
- Low quotes by foreign companies with depreciated equipment to capture market.
From the analysis we can easily find out the strength and weakness of Asian Dredgers ltd. which will help to compete with others Companies. It also helps to find out the opportunity and threats of ADL which is a external factor. Without considering this factor Company can’t compete in the market.
Admin and HRD of ADL:
Human resources are one of the key elements of success in case of any kind of business. Banking sector is not exceptional. So the authority believes that investment in human resources will ultimately return high dividend and also consider as intellectual property of the bank. The bank offer competitive complete package to the employees. They also identify the importance of well trained professional staff whose skill and commitment will help the Company to achieve the goal.
They also recognize the importance of employee’s participation in standardization and general well being of the company. They believe that their success depends on employees who are working for together in the interest of the client. The authority have follow the below policies for the development of human resources.
- ADL committed to nurture the employee relationship by continuous development of innovative rewards and incentive programs that focus on long and short term operational and strategic goals.
- Give emphasis on team work, training and philosophy of internal promotion to enhance the empowerment of employees.
- For free exchange of positive ideas within the workplace a policy is adopted for open, honest and two way communication.
- For maintaining human resources they reward them with performance bonus, overseas trip, promotions and increments reasonably.
Besides developing the human resources professionally with the view of Asian Dredgers Limited has established a library where all sorts of books including professional books are available so that the officers and executives can sharpen and updated their knowledge.
Providing training facilities to its executives or employees the authority has set up a training institute. This institution was established recently. This institute has already conducted a number of foundation and specialized courses for their existing and new employee.
This is a very much crucial department in every Company. That’s why ADL has some qualified and experienced Charter Accountant. Accounting department Records of all the transactions of every department and verifies all financial amounts and contents of transactions. If any discrepancy arises regarding any transaction this depart report to the concerned department.
Task of Accounts department:
Accounts play an essential role in this company. In private Company accounts department of ADL perform it’s very properly. The activities of accounts department are given below:
- Budgeting for ADL.
- Make salary statement and pay salary.
- Pay all expenditure on behalf of this Company.
- Make charges for different types of duties.
- Support for accounting treatment.
- Prepare statement for reporting purpose.
- Record all transaction in the general and subsidiary ledger.
- Record all transaction in the daily cash book.
- Prepare daily fund function, weekly position, periodic statement of affairs etc.
Appointment of Auditors:
ADL responsibility is to express an opinion on the financial statement based on their audit. They conducted their audit in accordance with law. The law required that they comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audits involve performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedure selection depends on the auditors judgment. Including the assessments of the risk and materials of the financial statements, whether due to fraud or error. In making those risk assessments the auditors considers internal control relevant to the equity preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity internal control. An audits also evaluating the appropriateness on accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. ADL believe that the audit evidence they have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Dredging Equipment at a glance:
About the dredger:
The IHC Beaver is well known for its robust construction, reliable operation and excellent performance. To date, IHC Holland has supplied more than 600 of these standard cutter suction dredgers worldwide.
The current range of standard, demountable cutter suction dredgers consists of basic models, with power outputs ranging from 300 to 1600 horse power. The IHC Beaver 1600 is just one type from this range. The hull consists of three pontoons, one main pontoons housing the engine room, and two side pontoons. All parts are dimensioned to allow the IHC Braver to be transported by road, raid or sea.
The dredger is equipped with a rapid connection-disconnection system for the pontoons, achieved using bolt at deck level, and coupling blocks at the bottom. Further salient features of the vessel are the compact dredge pump drive incorporating a reduction gear with integrated pump bearing and a fresh water engine cooling system, based on the well cooling principle . Various components are mounted in or on the main pontoon including the cutter ladder, two swing winches, ladder hoisting winch, control cabin, dredge pump, diesel engines and auxiliary power units, discharge line and the spuds with their actuator rams. The cutter and swing winches are powered by piston-type hydraulic motors.
Completely assembled and fully tested afloat before delivery
Simple, rapid assembly and dismantling
Ready for operation on arrival at site
Standard design, allowing early delivery and low price
Spare parts available from stock
Transportable by road, rail or sea
Reliable hydraulic system
Efficient fuel consumption
Wide range of optional equipment available
Length overall, ladder raised 33.20m
Length over pontoons 22.00m
Main pontoon: 13.00 x 2.95 x 2.46m
Side pontoons: 20.00 x 2.44 x 2.44m
Mean draught with full bunkers approx. 1.50m
Maximum standard dredging depth 14.00m
Internal diameter of suction tube 550mm
Internal diameter of discharge pipes 500mm
Total dry weight approx. 145t
Auxiliary power (cutter, winches, spuds)
Caterpillar 3406 CJWAC developing 345kW (469hp)
medium duty power at 1,800rev/min
Specific fuel consumption 208g/kWhr
Voltage 24V DC
Battery capacity 440Ah
Voltage (50Hz) 230/400V AC
Installed electrical power 12.50kVA
Type IHC 10-CB-AL-1455-180
Power at shaft 170kW (230hp
Maximum speed 30rev/min
Winches (ladder winch / swing winches)
Line pull, 1st layer 100/90kN
Max. line speed approx. 20/20m/min
Wire diameter 24/24mm
Drum diameter 445/445mm
All winches have independent hydraulic drive
The two swing winches are supplied with wires of 100m and
anchors of 720kg
Length (approx.) 18.50m
Weight (approx.) 5,250kg
Spud hoisting rams
Ram stroke 2.10m
Spud stroke (each time approx.) 3.35m
Swing width with 35° swing each side
At max. dredging depth 30.00m
At min. dredging depth 37.50m
Lifting power 30kN
Bureau Veritas Class I, X
X Hull dredger coastal area Engine installation
construction • MOT
Special tools are supplied for connecting and disconnecting pontoons
and cutter ladder, and for maintenance of dredge pump and diesel engine
Tilting facilities for spuds
Wedge piece for very small min. dredging depth
Increased dredging depth
Non-return valve, valve in discharge line, vacuum relief valve
Production Measuring Equipment
Bilge water separator
Air conditioning or central heating
Socially responsible business:
This dredger is innovative at many levels. These include projects with important with social and environmental objects: decreasing fuel consumption and noise pollution, reducing NOx emissions, form of sustainable dredging, environmentally friendly drilling and the creation of safe working environment for the crew. Innovation and sustainability go often hand to hand. The development and innovative technologies in a way of making socially responsible business.
Type IHC-1250-275-500, double walled
Power at shaft 922kW (1,254hp
Prime mover: Caterpillar 3512 B-SCAC developing 954kW (1,297hp)
continuous power at 1,600rev/min. Specific fuel consumption 202g/kWhr
Dredge pump driven via combined pump bearing block/clutch/reduction gearbox
for smooth operation and placement of the dredgers tug boat, crane boat, house boat and other accessories are required for each dredger. The brief justifications for the above ancillaries are as below:
For placing, shifting and supporting of dredger pipe lines as well as anchoring of the dredgers it is imperative to procure one crane boat for each dredger.
The dredgers do not have at all any accommodation for the staffs who are engaged to work over there. Moreover, there are some remote areas and isolated locations of the waterways river routes where no accommodation is available for the crews and officers who are to work intensively. Thus, for accommodation of crews and managerial supervisory levels, the proposal of procuring crew house boats and officer houseboats have been made.
The dredger, which is the main machinery, will import from abroad. The other ancillary equipment e.g. crane boat, accommodation barge, floating pipes, floater, shore pipe, welding sets etc. will be procured locally. As mentioned before, all the machinery and equipment will be purchased from reputed manufacture.
Core product/ service
The services will be dredging of the rivers for removal of silt from inland water ways of Bangladesh. There is a huge scope of obtaining contract from Bangladesh Inland Water Transport Authority, Bangladesh Water Development Board and other similar organizations.
Service mix and service rendering capacity:
The working time shall be two 8 hourly shift and 250 working days in a year.
Total annual 100% capacity of the project is summarized below:
|Item||Total cubic meter||Selling rate in Tk||Total sales in Tk|
|Dredging capacity per hour||800||130.00||—————|
|Working hour per day (effective)||14||—————–||—————–|
|Working day per month||24||————–||—————-|
|Working month per year||10||————–||————-|
The service rendering process is not very difficult and competent persons will be employed for the operation of the dredgers, workboat/crane boat. The dredge master and engineer will be trained by dredger Supply Company too.
Vessel Machinery and Equipment
The project will be equipped with completed and balanced machinery together with auxiliary components. The machinery and equipments will be imported/ procured, to ensure quality product. Some ancillary equipment will be procured locally.
In this regard the entrepreneurs have collected prices/quotations from several genuine companies/ agents and suppliers both for local and imported vessels/machinery. Considering quality and price competitiveness, the entrepreneurs plan to procure a 20 inch cutter suction dredger and 300 meter floating pipes from IHC Holland at a total C&F price of Euro 3,453,710.00
For the balance of the project, some ancillary craft including the crane boat, accommodation barge, shore pipes and other necessary accessories need to be procured locally. Competitive quotations have been obtained in this regard. Considering quality and price competitiveness, a crane boat, an accommodation barge, 1200 meter pipes, 15 nos. rubber hose pipes and some other accessories will be procured locally at a cost of Taka 5,50,00,000.
Technical Service and quality control
The technology, know how and the operation procedure involved in dredging is available in our country and the vessels will be procured from abroad. The procured dredger and workboat are from reputed manufacturer and of proven quality. Hence quality of service will be excellent and the project will be able to attract prospective work order and will warn sufficient revenue. In addition to this, experienced and capable will be recruited for running the fleet.
Erection and Installation:
The main vessels i.e. dredger , as mentioned before, will be imported and the crane boat, the pipes and accommodation barge will be procured locally, the supplier of the dredger will deport their expert engineer to install and commission the vessel. The supplier will also train our local people to ensure that smooth operation to the project is ensured.
Water: Required drinking water will be available from the nearest locality, where the dredger will be plying. However, water needed for other uses will be available from the river.
Power: the dredger, crane boat and the accommodation boat will have own power source. The power will be provided by own generator/engine in each vessel.
Lubricant and fuel: Estimated cost in this regard is Tk 6,12,50,00 for 100% utilization. For 70% utilization the estimated cost becomes Tk 4,28,75,000
The project is a service-based concern. The dredger fleet will be plied in any place in inland waterway as per the dredging requirement of the organization which offers tender for the purpose. The main technical person will reside in the accommodation barge of the fleet during operation. However, higher official and consultant will frequently visit the site to ensure proper and smooth completion of the contract and hence consumer satisfaction depends how delivery to be performed. Therefore the project will need to procure reconditioned car, jeep or microbus.
The total cost of the a new project has been estimated at Tk 3953.34 Lac including an initial net working capital of Tk 209.42 Lac. Detailed break up has been shown below. The const of the project is summarized below:
|SL. NO.||Descriptions||Price (In Lakh Taka)|
|1||Preliminary and Pre- operating Expenses||5.00|
|2||Importable Machinery (Dredger, Floating pipes, Spares & others)||2878.09|
|3||Duty, Tax, Insurance etc. @8%||230.25|
|4||Local Machinery ( Crane boat, Accommodation Barge, Shore Pipes etc.)||550.00|
|6||Contingency (FC Rate Fluctuation)||20.00|
|Total Fixed cost||37,33.34|
|Total Cost of the project||39,53.34|
|Total Cost of the Project||4162.76|
Means of Finance:
The above estimated cost of the project proposes to be financed as under:
Means of finance (Fixed cost) (TK in “000”)
Team loan 316,267
Sponsor’s equity (20%) 79,067
Debt Equity Ratio:
80:20 (Based on Fixed cost)
The implementations of the project will involve a capital outlay of Tk 3162.67 Lac that the promoter’s participation in equity has been estimated of Tk 790.67 Lac.
Cost of Service and Profitability:
Profitability potential of the project has been computed for ten projected years of operation to assess the financial viability of the project. The financial projection made include revenue estimate cost of service provided, estimated administrative and production expenses and financial overheads. The statement showing consolidated earning forecast is shown in this chapter.
Assumptions underlying the Warning Forecast
The main assumptions for the financial projection are as under:
- The project will operate 14 hours a day and 250 working days in the year.
- The cost of consumable items has been estimated on the basis of prevailing market prices.
- The cost of fuels and lubricating oils have been kept constant throughout the projected years of operation on the assumption that any increase in the price shall be offset by corresponding increase in the price of services to be rendered.
- Annual increment @ 5% has been considered in the calculation of wages and salaries and the amount of bonus is considered to be equal to one month of pay.
- Depreciation has been charged on straight-line method @ 20% annually on machinery and vehicle.
- Capacity utilization has been assumed at 70% fixed onward in the subsequent projected years of operation.
- Economic life of the project has been assumed to be 5 years without any major replacement.
Break Even analysis:
The break-even analysis has been carried out on the basis of cost and sales date of 4th year of operation. The project is expected to break even (Capacity Utilization) at 36.60%
Internal rate of return:
The internal rate of return computed following discounted cash flow technique works out to 39.31%
Cash flow statement:
The fund flow statement based on profitability estimate has been worked out. The project is expected to have comfortable cash position that will enable the unit to repay the bank dues in time.
Balance Sheet: Balance sheet is prepared to show the financial position of the project at different year-end.
The total project cost is Tk 3953.34 Lac. The fixed cost of the project is Tk 3733.34 lac. The project will create job opportunities for 20 percent. The financial analysis reveals that the project will be a profitable concern. The profitability ratios are satisfactory and the project will have sufficient liquidity to pay all its liabilities. The break-even analysis shows sound position and survivability of the project in sensitive market situation. The project is capable to afford a maximum cost of capital of 39.31% as indicated by internal rate of return. The project will be contribute to national economy throughout the facilitation of irrigation, fisheries, navigation etc. in view of the above facts it is found that the project is technically sound, financially and economically viable. Sensitivity analysis and project cost of the proposed Asian Dredgers Ltd. I have shown in the following pages:
Profit and loss account:
|Total income (2+3)|
|Pay and benefits to operational staff|
|Repairs & Maintenance|
|Spares & stores|
|Fuel & lubricants|
|Other Opnl. Exps.|
|Profit before extraordinary items (4 – 18)|
|Prior period adjustments|
|Provisions written back|
|Profit before tax (19-20-21-22)|
|Provision for current tax|
|Provision for deferred tax|
|Profit after tax (23-24-25)|
|Sources of funds|
|Reserves & surplus|
|Net worth (1+2)|
|Deferred tax liability|
|Application of funds|
|Net block ( 2 – 3)|
|Capital work in progress|
|Cash & bank balances|
|Other current assets|
|Loans and advances|
|TOTAL CURRENT ASSETS (8 to 12)|
|Current liabilities and provisions|
|Total current liabilities and provisions (15+16)|
|Net current assets (13 – 17)|
Cash flow statement
|Cash flow from operating activities:|
|Profit before Tax|
|Less/add: profit/loss on sale of assets|
|Less: extraordinary items|
|Operating profit before working capital changes|
|Increase (-) / decrease (+) in inventory|
|Increase (-) /decrease (+) in sundry debtors|
|Increase (-) /decrease (+) in other current assets|
|Increase (+) /decrease (-) in trade payables|
|Cash generated from operations|
|Less: interest paid|
|Income taxes paid|
|Cash flow before extra – ordinary items|
|Less: extraordinary items|
|Net cash from operating activities (a)|
|Cash flow from investing activities|
|Purchase of fixed assets|
|Proceeds from sale of equipments|
|Net cash from investing activities (b)|
Important data and rations
|Expenditure before Dep, int and Admn.|
|Operating profit (1-2)|
|Operating margin (3/1)|
|Gross margin (profit before Dep, int and tax)|
|Gross profit (5-6)|
|Profit before tax (7-8)|
|Profit after tax|
|Profit after tax to turnover (10/1)|
|Reserves & surplus|
|Net worth (12+13)|
|Current ratio (16/17)|
|Net working capital (16-17)|
|Net fixed assets|
|Capital employed (19+20)|
|Return on net worth (7/14)|
|Return on capital employed (7/21)|
|Debt equity ratio (15/14)|
|Earnings per share (10/no. Of shares)|
Prospects of Dredging in Bangladesh
Bangladesh is literally a land of rivers. A dense network of rivers, canals, creeks cover almost all parts of the country so well that it provides a cheap means of transport and communications and in certain areas, it is the only means of transport. The topographic, soil and climatic conditions in Bangladesh are such that costs of building and maintenance of roads and railways are very high compared to those of IWT (Inland Water Transport). Water transport is also a stable and reliable means of for the country both in times of peace and war and natural calamities e.g. flood, cyclone etc. Moreover IWT is rural in character in that it reaches many outlying rural populations that are impossible or very difficult to reach by roads and railway. An estimated 60% of the population in Bangladesh is below the poverty line and most of them lie in the rural areas. Development of IWT is therefore, very vital for effective and successful implementation of economic development of IWT is. Therefore, very vital for effective and successful implementation of economic development program and alleviation of poverty in the country.
In Bangladesh, the contribution of IWT of poverty reduction is significant. A substantial portion of the rural population has no access to road transport and is directly affected by availability of IWT service. The percentage of households which gave access to river transport is 25.1 percent. This is quite high for a 24000 km long network which is much shorter than the road network. Although the road network is 274000 km long, only 37% of household live within two kilometers (typically equivalent to a walk of 20-25 minutes) of an all-season road. Besides, the cultivated land is needed for the improvements of roads and railways while the inland waterway is the gift of nature. However, the rivers and canals are going to be reduced day by day due to stream flow reduction, reduction in cross boundary flow, silting up of off takes and reduction of tidal volume and the result is directly affecting the waterways. The length of IWT network has been declined to 6000 km (maintained by Bangladesh inland Water Transport Authority) (BIWTA), the rest 20000 used for irrigation, fisheries, drainage and flood control are maintained by Bangladesh Water Development Board (BWDB) during monsoon and 3800 km during dry season from 8400 km and 5200 km respectively as per the Bangladesh Integrated Transport sector study, 1998. Besides it is creating obstruction to the drainage capacity of flood water, which has adverse impact over the whole economy of the country. In this respect it is very much essential to improve the waterways for socio economic development of the country.
There are two types of dredging programs as taken by BIWTA for the improvement and creation of the navigability of the waterways, maintenance dredging and development dredging. Maintenance dredging is the dredging to be done every year in order to maintain the waterways used for watercrafts to ply. As per the hydrographic survey carried out in 1996 by BIWTA, the inter-ministerial Committee constituted by the Ministry of Shipping arrived at the maintenance dredging demand of 4.13 million cum for seven year period in 45 river routed. It is necessary to mention her that the dredging conducted in ferry routes is not Included in this estimation. At present, a sum of 2 million cum of dredging per year is carried out by BIWTA on an average at Aricha, Daulatdia, kazirhat, Mawa – Charjanajat basin and approach channel of ferry routes. Hence dredging demand per year is (5.9+2.0) =7.9 million cum. On the other hand, as per the report of the committee constituted by the Ministry of Water Resources in 1999, dredging demand of 62.27 million cum for the seven year period has been estimated for maintaining the navigability of the waterways. Based on this estimate the annual dredging demand is about 8.9 million cum. But those reports were prepared on the basis of the assessment made at least eight years ago. Therefore, it the extent of siltation occurred so far is taken into consideration the current annual maintenance dredging demand would averagely become 10 million cum.
Development dredging is the dredging conducted to excavate the dredge from a river almost dead in order to make the river alive with navigability of definite draft. On a requirements of 130 million cum maintenance dredging in last 13 years (10million cum per year). Only 47 million cum dredging has been carried out. Therefore, a number of rivers already silted up almost fully due to unavailability of maintenance dredging every year and need re-excavation to make those fully navigable with required draft for designated water craft. As a result, there is a need of huge quantity of development dredging beside the maintenance dredging in order to make the waterways navigable as maintained by BIWTA through the country. There is a huge requirements of dredging to remove silt from the rest of the rivers (20000 km) as maintained by BWDB for irrigation, fisheries, drainage and flood control purpose.
Present Dredging Capability of BWTA and others in the country
At present BIWTA has seven dredgers in the dredger fleet. Among those, two were procured in 1972 and the remaining five in 1975. The procurement year, lifetime, annual production capacity etc. have been shown below.
|Name of dredgers||Procurement year||Lifetime (as on 2009)||Excess of lifetime (as on current year i.e. 2010)||Approximate production capacity at present (in million cum)|
|Delta-1||1972||20 years||18 years||.30|
|Delta-11||1972||20 years||18 years||.30|
However, the first two is under refurbish and will be available for dredging in next year. According to the above assessment, the annual shortfall is 7.40 (10.0-2.6) million cum against the annual maintenance dredging demand of BIWTA has only 13 (only five are new and working with full capacity) nos. of dredgers with total capacity 6.5 m cum and there are two private companies who have 3 nos of dredgers with total capacity of 1.6 m cum (mostly old). Two other private companies have opened LC to procure 18 inch new cutter suction dredgers (capacity 1.5 million cum per year each) which will be available for dredging by August this year. One private company, which has a 16 inch CSD has procured another 18 inch new CSD and is available for dredging. Therefore, the total number of dredgers in the private sector is becoming 6 by August 2010 with an annual capacity of 6.1 million cum. However BWDB has own work to do. They are mandated to dredge almost 18000 km river used for the irrigation and fisheries purpose. Therefore, they can not provide any dredger for the dredging of inland waterways from now on. If the available private dredgers are engaged to dredge the waterways maintained by BIWTA, still there will be a shortfall fo 1.3 million cum maintenance dredging.
|SL. No.||Name of the Company||No. of Dredgers||Condition||Category||Present involvement|
|1||Ablul Momen Ltd.||2||New||16 inch & 18 inch CSD||One (16 inch) engaged till June 2010. Another will arrive at the end of March,2010|
|2||Bongo Dredger Ltd||2||Old||16 inch & 18 inch CSD||Both engaged in Mongla- Ghashiakhali canal till December 2010|
|3||SS Dredger & Engineers||1||New||18 inch CSD||Will be available from June 2010|
|4||Reza Construction Ltd||1||New||18 inch CSD||Will be available from August, 2010|
Therefore, the total number of workable dredgers in the country at the moment is 19
Present and future dredging Program
The government is formulating a 50-year mega plan to bring back navigability in rivers, including the Padma, the Meghna and the Jamuna, reports the BDT 310.00 billion mega plan will be implemented in there phases – short-term, mid –term and long-term. According to the mega plan, the navigability will be brought back by river training and removing silts from all rivers through capital dredging. According to the Water Resource Ministry, bringing back the navigability by river training and dredging 240km from the river Barahmaputra to the river, that includes the Padma, the Jamuna, and the Brahmaputra, ranges between 10 and 15 kilometers which would be reduced to 5 kilometers. This will recover an area five times bigger than the city of Dhaka.
It is to be noted that Prime Minister of Bangladesh is insisting on capital dredging and river training. In view of the same, a high level committee has been formed with the honorable prime minister as the chairman and finance, agriculture, planning water resources and shipping minister and a number of respective officials and dredging and dredger experts as the member of the committee in order to plan and monitor the overall dredging nad dredger experts as the member of the committee in order to plan and monitor the overall dredging activities of the country. The initial work for dredging the rivers will begin in next winter, and Bangladeshi experts would be involved in the mega plan and if needed, foreign experts would be hired.
According to an initiation report related to the mega plan, almost all of the 310 rivers in the country are heavily silted at their sources and main channels. The report has suggested implementation of the mega Jumuna. These rivers would be dredged in 20 percent spots at an estimated cost of BDT 1800.00 crore. The second phase of the plan includes the rivers Garai, Hincha,Mathabhanga, Kapotakkho, Arial Khan, Dhaleshwari, Karnafuli, Buriganga, Turag, Rangshi, Balu and others. The cost for their training and dredging has been estimated at BDT 1000.00 crore. The third phase of the plan includes 20 kilometers of th eGarai, 30 kilometers of the old Brahmaputra, 40 kilometers of the Turag and the buriganga and 20 killometers of the Arial Khan. The estimated cost in this phase is BDT 240.0 crore.
Several upcoming projects are:
- Capital Dredging on BIWTA
- Karnafully River Dredging project by CPA
- Garai River Restoration project by BWDB
- Dredging in the harbor area of Passur Channel of Mongla Port by MPA
- Widening and Development of navigility of Madaripur-Charmuguria-Tekerhat river route by dredging to be carried out by BIWTA
Asian Dredgers ltd. has huge dredging project but they have insufficient dredgers. That’s why they plan to buy new dredgers within a few days from IHC Holland Ltd. to maintain their present and upcoming project.
The modern business world is on the fastest flow of competition which is growing wider and wider. To have sustainability in this competitive world the organization are formulating new strategies and business plan with maximum efficiency levels in all sectors. Due to competition it is very difficult to build a strong base for a new Company. ADl creates employment opportunity. ADL has some problems but it is encouraging that they are trying to overcome these obstacles. To keep pace with current demand ADL should be more responsive. As a BBA student I have completed my internship from Asian Dredgers Limited. Based on the previous performance and the proper utilization of natural resources, I hope that ADL will be able to achieve its goal and would become a finest corporate citizen’s in the Dredging industry.
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