INTRODUCTION Fruits are an important source of energy for human beings but they are perishable items. Since many years various products are made from juice of fruits so that they can be consumed during off season as well. Fruit based beverages are relished when served, chilled, particularly during summers. These are delicious as well as nutritious containing the goodness of fresh fruit. This project deals with the product squash. Squashes are a concentrated form of fruit beverages. They are normally consumed after reconstitution with water to the extent of 5 to 7 times. They are preferred because of their ready to serve nature. They need no terminal processing except dilution with water to form a ready to serve beverage. They also have a good nutritive value and therefore are liked by one and all. Among squashes orange, mango, lemon and grapes are the most commonly consumed. MARKET POTENTIAL India is the second largest producer of fruits (45 million tones) and vegetables (90 1
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INTRODUCTION
Fruits are an important source of energy for human beings but
they are perishable items. Since many years various products are made from juice of
fruits so that they can be consumed during off season as well. Fruit based beverages
are relished when served, chilled, particularly during summers. These are delicious as
well as nutritious containing the goodness of fresh fruit. This project deals with the
product squash.
Squashes are a concentrated form of fruit beverages. They are normally
consumed after reconstitution with water to the extent of 5 to 7 times. They are
preferred because of their ready to serve nature. They need no terminal processing
except dilution with water to form a ready to serve beverage. They also have a good
nutritive value and therefore are liked by one and all. Among squashes orange,
mango, lemon and grapes are the most commonly consumed.
MARKET POTENTIAL
India is the second largest producer of fruits (45 million tones) and
vegetables (90 million tones). Fruits are liked by people of all age groups .But they
are available only during specific seasons. Due to high water or juice contents they
are perishable. Certain fruits require very careful and consequently costly
transportation. hence many down the-line products like squash, fruit juice
concentrates etc are made from fruits with preservatives which increase in disposable
incomes and changing life style, demand for them is steadily going up .The products
find placement in all stores and margin free shops. Despite various brands such as
kissan, Happy etc. being available in the market, on a national scale, many small scale
manufacturers have a market share because of the ever increasing market size and
demand for the product
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MARKETING STRATEGY
There are some established brands available in the market but they are
costly and hence people would prefer low cost, good quality products. It is possible to
introduce competitive pricing for a small scale unit due to its inherent features.
MANUFACTURING PROCESS
The manufacturing process for making fruit juice and squash is
standardized and not very complicated or time consuming.
In the first process, fully ripe and matured fruits are washed,
cleaned and then peeled. Thereafter juice is then processed, sterilized. In case of
squash, syrup of sugar along with preservatives is added to juice and this mixture is
stirred. To improve the flavor and colors are added and finally stirred to get a perfect
homogenous mix. After mixing all ingredients, the preservative meta-bi-sulphite is to
be added. The squash is then filled in washed and sterilized bottles leaving about one
inch space. Then they are closed with crown, capsuled and labeled. They are then
stored in a cool place. The product keeps well for one year without change in colour
or taste.
LOCATION OF THE UNIT
The unit can be set up in the area where there is near to market, where
the availability of raw materials is available in plenty.
POLLUTION CONTROL
There is no major pollution problem associated with this industry except for
disposal of waste which is to be managed appropriately.
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BASIS AND PRESUMPTIONS.
1. The unit proposes to work at least 300 days per annum
2. The wages for workers is taken as prevailing rates in this type of industry.
3. Interest rate for total capital investment is calculated at 12 percent per annum
4. The entrepreneur is expected to raise 30 percent of the capital as margin
money.
ORGANISATIONAL CHART
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ENTREPRENEUR
SKILLED WORKERS
CHEMIST/LAB ASSISTANT
UNSKILLED WORKERS
HELPERS
CAPITAL INPUTS
LAND AND BUILDING
Total requirement of built up area shall be around 150 square meters and
hence land measuring about 500 square meters will be adequate. Cost of land is
estimated to be 100000 where as that of civil work.
Table 3.1 Land and Building
Sl.No Particulars Area(square
meters)
Cost( Rs)
1 Land 500 100000
Building 150 200000
300000
PLANT AND MACHINERY
In view of size of the market and to ensure economic viability of the project, rated
production capacity of 100 tones per year with a shift working and 300 working days
is advisable. To install this capacity following machines shall be required.
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Table 3.2 Plant and machinery
Sl.no. Item Quantity Price(Rs.)
1 Fruit washing Tank 2 10000
2 Juice Extractors 2 90000
3 Stirrer 1 15000
4 Baby boiler 1 60000
5 Bottle washing and filling
machine
1 80000
6 Sealing machine 1 20000
7 Testing equipments like
salinometer, pipette etc.
10000
8 Working tables and other
equipments
30000
Total 315000
MISCELLANEOUS ASSETS
Many other assets like stainless steel utensils, plastics tubs etc. shall be needed.
A provision of Rs. 50,000 is made for the same.
UTILITIES
Power requirement will be Rs.1500 per month and water requirement will be Rs. 750
per month.
RAW MATERIAL
The all important raw material will be fresh, ripe and matured fruits. Other items
like sugar, salt additives and preservatives etc. shall be available locally. Packing
materials are also available.
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Table 3.3 Raw Materials Required at 100%
Sl.No Products Quantity(kg) Price/Kg Value
1 Fresh fruits(oranges,
pineapple, grapes etc.)
5000 20 1200000
2 Sugar 600 25 180000
3 Citric Acid 56 50 33600
4 Flavour, colours and other
preservatives
25 150 45000
Total 1458600
Table 3.4 Man power requirement
Sl.No Particulars Nos. Monthly
Salary(Rs.)
Total Monthly
Salary(Rs.)
1 Skilled worker 6 6000 432000
2 Semi-skilled
workers
2 3000 72000
3 Technician/ lab
assistant
1 7000 84000
4 Helpers 1 1000 12000
Total 600000
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Table 3.5 Other contingent expenses
Sl.no Other Contingent Expenses Per Month Rs/ Year
1 Postage and stationery 2000 24000
2 Transportation 2000 24000
3 Other expenses 500 6000
4 Telephone 1333 6000
5 Administrative expenses and
others
4167 5000
Total 120000
MACHINERY
Production capacity of 80 tonnes can be installed with investment under this
head to the extent of Rs 3.15 lakhs.
MISCELLANEOUS ASSETS
A provision of Rs. 50000 is adequate to have support assets.
SELLING EXPENSES
There will be competition from some national brands and local brands as well.
Hence, a provision @15% of sales income has been made towards selling commission
and publicity in local media.
INTEREST
Interest on working capital assistance from the bank is calculated at 14 % per annum.
Interest on term loan of Rs. 1006726 is calculated at 12 % per annum considering
repayment of loan in 5 years.
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DEPRECIATION
It is computed on the Written down value Method Basis at 10% on building and 20%
on machinery and miscellaneous assets.
PRE-OPERATIVE EXPENSES
It includes consultancy fee, project report, deposit with electricity
department etc. It costs Rs.50000
WORKING CAPITAL REQUIREMENT
Against installed production capacity of 80 tonnes per year, actual utilization in
the first year is expected to be 65%. At this level of activity, the working capital needs
will be as under.
Recurring Expenditure for one year.
Man power requirements - Rs. 600000
Utilities - Rs. 27000
Raw Materials - Rs. 1458600
Other Expenses - Rs. 120000
Total - Rs 2205600
Working Capital Margin (30%) = 2205600*30/100
= 661680
Bank Loan (70%) = 2205600*70/100
= 1543920
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Table 3.6 Working Capital Requirement
Sl.No Items Rs
1 Working Capital 2205600
2 Promoters (30%) 661680
3 Bank 1543920
Table 3.7 Cost of the project and means of financing
Sl.No Item Amount
1 Land and Building 300000
2 Plant and Machinery 315000
3 Miscellaneous assets 50000
4 Pre operative expenses 50000
5 Contingencies at 10%on land and Building
and Plant and Machinery
61500
6 Working Capital Margin 661680
Total 1438180
Means of Finance
Promoters contribution 431454
Term loan From Bank 1006726
Total 1438180
Debt equity Ratio 2.33:1
Promoters contribution 30%
Financial assistance in the form of grant is available from the Ministry of Food
Processing Industries, Govt of India, towards expenditure on technical civil works and
plant and machinery for eligible projects subject to certain terms and conditions.
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PROFITABILITY CALCULATIONS
Production capacity and Build-up
The rated production capacity of the plant will be 80 tones per year. But actual
utilization is restricted to 65% in the first year, 75 % in the second year and 80% there
after.
Table 3.8 Sales Revenue at 100 %
Sl.No Product Quantity Selling price
(Rs./Li)
Sales
1 squashes 60000 70 4200000
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PROJECTED PROFITABILITY
Table 3.9 Projected Profitability
No. Particulars 1st year 2nd year 3rd year 4th year 5th