Project Report on Food Processing Unit free essay sample

Papad is a popular and tasty food item in the Indian diet since many centuries. It is essentially a wafer-like product, round in shape and made from dough of powdered pulses, spices, powdered chilly and salt. Variety of pulses and proportion of pulses and spices varies from region to region depending upon preferences of local people whereas certain varieties are popular on a larger scale. Traditionally this activity was confined to household papad making but in view of increasing demand and availability of machinery (mechanisation) it has now been developed in cottage and small scale sector. PRODUCT Papad is a favourite item with Indians and is used as taste enricher with the main course and as a snack item. Since it is made from pulses, it is easy to digest and nutritious as well. It is very easy to make instant food item and is either fried in edible oil or simply roasted before serving. We will write a custom essay sample on Project Report on Food Processing Unit or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Its shelf life is 2? to 3 months. This product can be made anywhere in the country. The note envisages location at an appropriate place in Assam. MARKET POTENTIAL Market for papad is steadily growing across the country. There are not much seasonal fluctuations but demand generally goes up by 10% to 15% during winter season. There are a couple of national brands but the market is predominantly controlled by the local brands. This activity is yet to pick up in Assam and thus prospects for a new entrant are bright, provided quality is good and prices are competitive. It can be sold through many outlets of provision and departmental stores. Before launching the product, a quick assessment of consumer preferences is advisable. Demand and Supply Papad manufacturing is primarily confined to the unorganised sector. There are some national brands like Lijjat, Leher, Haldiram etc. ut their products are costly and thus have limited market share. Bulk of the market is controlled by the local brands. Market for these products is growing steadily and there are not much seasonal fluctuations. Marketing Strategy Pricing is a critical aspect to compete with established brands and the product has to be pushed through with the help of retailers. A small delivery van is necessary. Requisite changes in the ingredients have to be made in line with regional likings. Farsan items can be sold in bulk packing of 2, 5 and 10 kgs. o the retailers who, in turn, would repack them in suitable quantity and sell. This is a standard practice in this industry as retailers from nearby centres prefer to buy them in bulk for selling in local market. MANUFACTURING PROCESS Papad can be manufactured from different varieties of pulses or there could be a combination of pulses as well. Adequate quantity of water is added in flour of pulses, common salt, spices and sodium bicarbonate and homogenous mixing is done to obtain dough. After about 30 minutes, small balls weighing around 7-8 grams of dough are made. These balls are then placed in papad making machine or papad press wherein these balls are pressed and circular papads are made as per the size of mould. These papads are then sun-dried but in this note drier with trolley is recommended as sun-drying may not be always feasible in Assam. Lot of 25 or 50 papads is then packed in polythene bags. CAPITAL INPUTS 1. Land and Building A plot of land of about 150 sq. mtrs. with built-up area of approximately 80 sq. mtrs. shall be adequate to house all the equipments leaving sufficient space for storage and packing. The location need not be at a prominent place as counter sales is not envisaged. The total cost of land is taken at Rs. 50,000 whereas the construction cost is assumed to be Rs. 2. 00 lacs. 2 . Plant and Machinery It is suggested to have annual rated production capacity with 300 working days and 2 shift working of 60 tonnes. To install this capacity, following machinery shall be needed: Item| Qty. | Price (Rs. )| Grinder with electric motor having 30-35 kgs/hr. capacity| 1| 22,000| Mixer of 20 kgs. per charge capacity with electric motor| 1| 20,000| Pedal-operated papad press| 2| 14,000| Drier with trolley and 48 trays with heating element of 9 KW| 1| 50,000| Extra aluminium trays| 50| 5,000| Sealing Machine| 2| 4,000| Water Storage tank| 1| 5,000| Laboratory Equipments| †¦. | 5,000| Weighing Scale| 1| 7,000| | Total| 1,32,000| The machinery suppliers in Guwahati are 1. Industrial Equipments (Lakhtokia) 2. Archana Machinery Stores (Aathgaon) Miscellaneous Assets Some other assets like aluminium top tables, furniture amp; fixtures, baskets, drums, storage racks, aluminium/stainless steel utensils etc. shall also be required for which a provision of Rs. 40,000/- is made. Utilities The total power requirement shall be 25 HP whereas water required for process and sanitation and other purposes shall be about 700-750 ltrs per day. The annual cost under this head at 100% capacity utilisation shall be around Rs. 50,000/-. Raw Material The all important raw material would be flour of pulses depending upon the product mix. Since annual requirement even at 100% will not be more than 60 tonnes, availability would not be a bottleneck. Other materials like salt, spices, edible oil, preservatives etc. shall be required in small quantity and they will be available locally. Packing material like different sizes of polythene bags and corrugated boxes shall also be available locally. MANPOWER REQUIREMENTS Particulars| Nos. Monthly Salary (Rs. )| Total Monthly Salary (Rs. ) | Skilled Workers| 2| 1800| 3600| Helpers| 4| 1200| 4800| Salesman| 1| 2000| 2000| | | Total| 10400| TENTATIVE IMPLEMENTATION SCHEDULE | Activity Period (in months)| Application and sanction of loan| 2| Site selection and commencement of civil work | 1| Completion of civil work and placement of orders for machinery | 4| Erection, installation and trial r uns| 1| DETAILS OF THE PROPOSED PROJECT Land and Building Item| Area (Sq. Mtrs)| Cost (Rs. )| Land| 160| 50,000| Building| 80| 2,00,000| | Total| 2,50,000| Machinery The total cost as spelt out earlier will be Rs. 1, 32,000/-. Miscellaneous Assets A provision of Rs. 40,000 as explained before is considered to be sufficient. Preliminary amp; Pre-operative Expenses Expenses like registration amp; establishment charges, trial run, interest during project implementation etc. will be around Rs. 40,000/-. Working Capital Requirement The rated production capacity of the project shall be 60 tonnes per year but it is assumed that it would operate at 60% in the first year. The working capital needs at this level shall be as under: (Rs. In lacs) Particulars| Period| Margin| Total| Bank| Promoters| Stock of Raw Materials| ? Month| 30%| 0. 28| 0. 20| 0. 08| Stock of Finished Goods| ? Month| 25%| 0. 40| 0. 30| 0. 10| Receivables| 1 Month| 25%| 0. 90| 0. 68| 0. 22| Other Expenses| 1 Month| 100%| 0. 20| | 0. 20| | | Total| 1. 78| 1. 18| 0. 60| Cost of the Project and Means of Financing (Rs. in lacs) Item| Amount| Land and Building| 2. 50| Machinery| 1. 2| Miscellaneous Assets| 0. 40| Pamp;P Expenses| 0. 40| Contingencies @ 10% on Building and Plant amp; Machinery| 0. 38| Working Capital Margin| 0. 60| Total| 5. 60| Means of Finance| | Promoters Contribution| 1. 75| Term Loan from Bank/FI| 3. 85| Total| 5. 60| Debt Equity Ratio| 2. 20 : 1| Promoters Contribution| 31%| PROFITABILITY CALCULATIONS Production Capacity and Build-up The annual installed capacity shall be 60 tonnes but in view of teething troubles and other difficulties like power failure, absenteei sm etc. the actual utilisation is taken at 60% and 75% respectively during first 2 years. Sales Revenue at 100%(Rs. in lacs) Product| Qty. (Tonnes)| Selling Price (Rs. )| Sales| Papad| 60| 32,000| 19. 20| Raw Materials Required at 100% (Rs. in lacs) Product| Qty. (Tonnes)| Rate per Ton| Value| Flour of Pulses| 58| 16,000| 9. 28| Edible Oil, Salt, Spices, Preservatives, etc. | | | 0. 60| Packing Material| | | 0. 70| | | Total| 10. 58| Utilities Annual expenditure on utilities even at 100% activity level is likely to be Rs. 50,000/- as explained earlier. Interest Interest on term loan of Rs. 3. 85 lacs is calculated @ 12% per annum considering a moratorium period of 1 year and then repayment in 3 years.