PROJECT PROFILE FOR BISCUIT PLANT

Written by Startups Help

October 12, 2021

Introduction

Biscuit making is a conventional activity in many parts of the country. Despite the advent of modern, large capacity and automatic biscuit making plants, large section of people especially in semi-urban and rural areas still prefer fresh biscuits from local bakery as they are cheap and offer many varieties. These manufacturers are able to cater to some typical local palate as well. Thus, they are able to withstand competition from organised sector units.

     Objective

The primary objective of the model report is to facilitate the entrepreneurs in understanding the importance of setting up unit of biscuit plant. This model report will serve as guidance to the entrepreneurs on starting up such a new project and basic technical knowledge for setting up such a facility.

     Raw Material Availability

The basic raw material for the manufacture of biscuits is wheat flour. Major wheat producing districts in the state are Hosangabad (4.19 lakh MT production), Ujjain (3.85 lakh MT), Dhar (3.51 lakh MT), Indore (3.34 Lakh MT) etc.

     Suitable Location

The suitable recommended location of the biscuit plant is Hoshangabad, Ujjain, Dhar, Indore, Vidisha, Sehore etc. There is already a food park at Hosangabad,

     Market Opportunities

Market for biscuits is scattered all over the country. There are three distinct market segments viz. urban, semi-urban and rural. Urban and semi-urban markets are dominated by many national and regional brands but even then many local manufacturers have also carved a special niche as their products are fresh, they offer many varieties and they are cheaper.

     Project description

  1.         Applications

Biscuits are eaten by all sections of people across the board round the year. They are, thus, mass consumption items with number of varieties and shapes. The market is scattered. There are some dominant national and regional brands. Biscuits can be manufactured at a location which is close to the market.

     Capacity of the Project

The capacity of the project is 50 tonnes of biscuits per year.

     Critical success factors

Rural and certain semi-urban markets are mainly captured by small manufacturers. This note primarily suggests entering this market. Apart from domestic customers, there is a vast market at bus and taxi stands, railway stations, weekly hats or bazaars, highway eateries or dhabas and melas or fairs. A small delivery vehicle can take care of destinations located in the vicinity of about 50-60 km. Attractive margins to traders/retailers will be crucial.

     Manufacturing process

The process is conventional and easy. Wheat flour along with other ingredients is mixed with water and dough is prepared. Then it is kept at a normal room temperature for about couple of hours to allow proper fermentation. Then it is placed in biscuit moulding trays and these trays are placed in oven for baking. After requisite baking, trays are taken out, cooled and biscuits are packed. The process flow chart is as under:

PARTICULARSUnitQtyCost/unitTotal
LAND & BUILDING   13.45
LandSqM400250.001.00
Land Development    
Land Area 400500.002.00
Building    
Production Block    
Main Production AreaSqM1005,000.005.00
Store cum packing room & Sales CounterSqM505,000.002.50
Misc Handling AreaSqM1002,000.002.00
Contingencies 10% 0.95
PLANT & MACHINERY28.98
Flour SifterLS170,000.000.70
Dough Kneader 250,000.001.00
Electrically Operated Oven 1250,000.002.50
Biscuit Moulding Tray 7030,000.0021.00
Contingencies 15% 3.78
MISCELLANEOUS FIXED ASSETS   6.73
Furniture and FixtureLS140,0000.40
Sealing and wraping machineNo250,0001.00
Vehicles-Delivery LCVNo2200,0004.00
Weighing ScaleNo125,0000.25
OthersLS120,0000.20
Contingencies 15% 0.88
PRE-OPERATIVE EXPENSES   5.90
Establishment 1230,0002.30
Professional Charges 1200,0002.00
Security Deposits 1160,0001.60
TOTAL   55.06
  • Building

The building development cost will be around Rs 10.45 lakhs.

        Plant and Machinery

It is suggested to have installed production capacity to manufacture 105 tonnes of biscuits per year assuming working for about 330 days for 12 hours every day. This would require flour sifter, dough kneader, electrically operated oven, biscuit moulding tray and sealing and wrapping machine. All these machineries will cost around Rs. 28.98 lakhs.

     Miscellaneous Assets

The miscellaneous assets will cost around Rs. 6.73 Lakhs.

     Preliminary & Pre-operative Expenses

A provision of Rs. 5.90 lakhs would take care of pre-production expenses like establishment, professional charges, security deposits etc.

     Working Capital Requirement

ITEMSYear 1Year 3Year 5
STOCK OF RAW MATERIAL & PACKING MATERIAL2.593.983.98
SUNDRY DEBTORS10.2415.7515.75
TOTAL12.8219.7319.73
MARGIN3.214.934.93
MPBF9.6214.8014.80
INTEREST ON WC1.061.631.63

Means of Finance

EQUITYCAPITAL  35.00%20.39
MOFPISUBSIDY25%50.0025.00%14.57
TERMLOAN    
FINANANCIALINSTITUTIONS 10.00%40.00%23.31
-Payable half yearlyInstallments102.30  
TOTAL  100%58.26

Cash flow statement

PARTICULARSYear 1Year 3Year 5Year 7
SOURCESOFFUNDS    
EQUITYCAPITAL
SUBSIDY    
NETPROFIT1.219.068.237.47
(INTERESTADDEDBACK)    
DEPRECIATION3.873.873.873.87
PRELIMINARYEXP.W/O0.840.840.840.84
INCREASEINTERMLOAN
INCREASEINBANKBORROWINGS-WC9.621.48
TOTAL1 5.5415.2512.9412.18

Projected Balance Sheet

PARTICULARSYear1Year3Year5Year7
LIABILITIES    
EQUITYCAPITAL20.3920.3920.3920.39
RESERVES&SURPLUS12.3921.6533.6745.74
TERMLOAN21.0111.812.610.00
BANKBORROWINGS-WC9.6214.8014.8014.80
TOTAL63.4068.6571.4680.93

Projected Profit and Loss Account

PARTICULARSYear 1Year 3Year 5Year 7
NETREVENUEREALISATION37.5457.7557.7557.75
TOTALEXPENSES31.6243.9844.8145.57
GROSSPROFIT5.9213.7712.9412.18
DEPRECIATION3.873.873.873.87
INTEREST3.393.152.231.63
PRELIMINARYEXP.W/O0.840.840.840.84
PROFITBEFORETAX(2.18)5.905.995.84
RETAINEDPROFIT(2.18)5.905.995.84

Key Indicators

NET PRESENT VALUE at Current Inflation(Rs.in lakhs)54.85
INTERNAL RATE OF RETURN%21.79
AVERAGE DSCR1.97
BREAK EVEN POINT %80.23
PAY BACK PERIOD5.06

Manpower Requirement

PARTICULARSNOs.
SUPERVISORYSTAFF 
ProductionSupervisors2
Accountant1
WORKERS 
SkilledWorkers2
Semi-SkilledLabour4
Salesman2
Driver2
TOTAL13

Assumptions

Project&Financing
Contingencies onBuilding 10%
Contingencies onEquipment 15%
TermLoan 40%
Rate of Intereston TermLoan 10%
Subsidy Considered                                     Subjectto ceiling 25%
ExpectedtimeofInstallationMonths10
MoratoriumMonths6
CAPACITY
RatedCapacity PerAnnum                           80% ofInstalled capacityTPA105
NumberofOperationalDays                          DAYS 330
WorkingHours Perday                                    Hrs 12
CAPACITYUTILIZATION
YearI 65%
YearII 90%
YearIII 100%
SALESPRICE
WSPrice 55,000
OTHEREXPENSE
Commission 5.0%
MarketingExpenses 2.5%
POWER
ConnectedLoad                                              HP 40
DEPRICIATIONAS PERCOMPANY’S ACT
BUILDING 3.34%
PLANT&MACHINERY 10.34%
MISC.FIXEDASSETS 7.07%
LAND&SITEDEVELOPMENT 1.63%
MAINTENANCE
BUILDING 1.00%
PLANT&MACHINERY 2.00%
MISC.FIXEDASSETS 1.50%
LAND&SITEDEVELOPMENT 1.00%

Sources of Technology

Master Mechanical Works Pvt Ltd,75,Link Road,Lajpat Nagar 3,New Delhi-110024.

Nagpal Brothers,C-127,Phase 2, Mayapuri Industrial Area,New Delhi-110064.

Delight Engg.Works,Lane No. 8 Aslat pura,Moradabad-244001.TelNo.2498398/2491687, Fax:2494378.

Foodmac Engg. Pvt. Ltd. 37038, Sector2,Parwanoo-173220(HP).TelNo.233294/233295,Fax:233296.

KGN Engg., Plot No. 174,Old Airport Road, Secunderabad-500011. TelNo. 27952147.

The actual cost of projects may deviate on change of any of the assumptions.

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