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1.0 INTRODUCTION Betel nuts are consumed in large quantities across the country. It is a typical Indian habit and they are eaten by many purely as an addiction whereas some consume it assuming that it helps the digestive system. Apart from this segment, there is a very large market of pan shops literally scattered across the length and breadth of the country. Since last few years, many varieties of betel nuts and other after mints and mouth fresheners are introduced in the market. Consumption of plain betel nuts is being replaced by flavoured varieties of betel nuts and many pan shops also use it while making special pans. It is a working capital oriented activity requiring adequate funds. 2.0 PRODUCT Consumption of betel nuts is very common in India but over a period of time, plain betel nuts are replaced by flavoured varieties sold in small pouches. Many people eat it out of sheer habit whereas some eat it to stop tobacco addiction. But its consumption is increasing. 2.1 3.0 Compliance with PFA Act is necessary.
MARKET POTENTIAL 3.1 Demand and Supply:
Betel nuts in plain and other forms are consumed in the country since centuries. With the passage of time, many new varieties and flavours are introduced and being sold in huge quantities all over the country. Attractively packed pouches are available in the market like plain, sweet, mentholated, mixed with dry fruit and so on.
proper and adequate placement.0 CAPITAL INPUTS 5. The product is sold in cities.00 lac whereas construction cost would be approximately Rs. highways.0 MANUFACTURING PROCESS Betel nuts or areca nuts are cut into small pieces with the help of shredder and are soaked in sugar syrup for 72 hours and then syrup is drained.75 lacs.000 kgs. Working hours can always be increased. Cutting of nuts K Soaking in sugar syrup K Soaking in sugar syrup K Drying 5. Further. they are cut into small pieces and then are mixed with paste made of menthol. affordable price and lucrative discounts to retailers. Same process is repeated for additional 24 hours.1 Land and Building Total built up area requirement is about 150 sq. whereas packing room about 25 sq. towns. bus-stands and railway stations. To make mentholated betel nuts. theatres and many such places mainly through cigarette and pan shops/vendors. per year on single shift working basis is suggested with 300 working days per year.3.mtrs.mtrs.mtrs. cardamom and edible oil for about 72 hours. Hence. the promoters must be financially sound.3. Land may cost Rs. picnic spots. Key to success is adequate advertisement budget. 10 .mtrs. Production capacity of 30.1.2 Plant and Machinery Market is very vast but there is a competition as well. Balance area can be utilised for storage and a small office. and hence land requirement is around 250 sq. it is a working capital oriented activity. Then these pieces are dried in the drying chamber and suitably packed. cloves. Main production hall would require 75 sq. Then they are dried in a dryer and packed.2 Marketing Strategy: There are some big and established companies as well as many regional players in the market and most of them are doing fairly well. rural areas. 5. This would require following machinery. The process flow chart is as under. 4.
60. Even at 100% utilisation. In other words.75 0. Fill and Seal Machines Delivery Vehicle Gas-fired Furnace with Burners Qty.650 1.500 17. 2 2 4 1 1 Monthly Salary (Rs.25 11.0 MANPOWER REQUIREMENTS Particulars Skilled Workers Semi-skilled Workers Helpers Driver Salesman Nos. their annual requirement will not be more than 27 tonnes and hence no difficulty is envisaged in procurement. good quality areca nuts. Other materials like sugar.000 2.4 Utilities Power requirement shall be 30 HP whereas water required for washing areca nuts and for potable and sanitation purposes will be 1000 ltrs. storage racks.300 5.3 Miscellaneous Assets Amount 1.1.000 2.25 0. Main packing material will be pouches/ sachets rolls with colourful design and good quality printing. per day.250 2.250 1.30 3.20 0. 5. 5 LPG cylinders shall be required every month. shall be required in small quantity and availability will not be a problem. working tables. annual cost of utilities at 100% would be Rs.000 2.12 0.5 Raw Materials The all important raw material will be fully grown.) 2. weighing scale etc. 5. shall be required costing about Rs. cloves. 6 25 1 1 2 2 1 1 Total 5. in lacs) Item SS Soaking Tanks Shredder Knives Mixer Grinder. Adequate prior arrangements are advisable.22 Number of other assets like plastic tubs. 6. furniture & fixtures.35 4.20Kgs/Hr capacity Nut-cracker Tray Dryers with 48 trays Form.000/-.00 1. cardamom etc. menthol.20 lac. Outer packing shall be of corrugated boxes.) 4.500 3.(Rs.500 Total Total Monthly Salary (Rs.300 11 . edible oil.
8. interest during implementation.5 Working Capital Requirements The project would require following working funds during first year at 60% capacity utilisation.000 4. A provision of Rs. the total cost of machinery is estimated to Rs.60 9.35 Promoters 0.) 1.0 TENTATIVE IMPLEMENTATION SCHEDULE Activity Application and sanction of loan Site selection and commencement of civil work Completion of civil work and placement of orders for machinery Erection.60.80 3.11.22 lacs. 1.7.000 3. (Rs. trial run expenses and so on.0 DETAILS OF THE PROPOSED PROJECT 8.60 2.Mtrs) 250 150 Total 8.00. in lacs) Particulars Stock of Raw & Packing Materials Stock of Work in Process Stock of Finished Goods Receivables Working Expenses Period ½ Month ¼ Month ½ Month ½ Month 1 Month Margin 30% 30% 25% 25% 100% Total Total 1.20 2.2 Machinery Cost (Rs.1 Land and Building Particulars Land Building Area (Sq. installation and trial runs Period (in months) 2 1 4 1 8.75.90 12 .75 0.000 As discussed earlier in detail. 8. 8.35 0.000/-under this head is adequate.10 2.75.4 Preliminary & Pre-operative Expenses There will be many expenses under this head like market survey expenses.70 0.15 0.25 -6. registration.25 Bank 1.00 0.00 lac is to be made towards these.85 2. a provision of Rs.50 0.3 Miscellaneous Assets As spelt out before.65 1. travelling. establishment and administrative expenses.
50.25 5.000 (Rs.3 Raw and Packing Materials Required at 100% Qty.6 Cost of the Project & Means of Financing Item Land and Building Plant and Machinery Miscellaneous Assets P&P Expenses Contingencies @ 10% on Land and Building & Plant & Machinery Working Capital Margin Total Means of Finance Promoters' Contribution Term Loan from Bank/FI Total Debt Equity Ratio Promoters' Contribution (Rs.40 0.1 Production Capacity & Build-up As against the annual rated capacity of 30 tonnes.90 22. 9.30 71. 9. Govt.3.00.22 0.75 2.000 2. towards expenditure on technical civil works and plant and machinery for eligible projects subject to certain terms and conditions. Packing Materials 6.0 PROFITABILITY CALCULATIONS 9.00 lacs.000 50. Cardamom.30 : 1 30% Financial assistance in the form of grant is available from the Ministry of Food Processing Industries.000 17. which would be sold @ Rs. 9. of India.5 2 @ 15 paisa per sachet for 42 lac sachets Total Price/Ton (Rs. actual utilisation in the 1st year is taken at 60% and thereafter it is restricted to 75%.00 1. Hence sales value of 30 tonnes would be Rs.5 gms.00 Product Areca nuts Sugar Edible Oil Cloves.50 22. Menthol.20.43 0.75 11. in lacs) Amount 4.) 2.5 0.38 13 . etc. in lacs) Value 59.22 6. 120.8.72 15.22 2. (Tonnes) 27 2.60 1.2 Sales Revenue at 100% Each sachet would contain 7.
in lacs) No.0 PROJECTED PROFITABILITY (Rs.6 Interest Term loan of Rs. To take care of these expenses.9.00 75% 90.78 61.66 0.68 6.33 5.00 6.00 14 .20 lac.90 2.28 1. 10. Interest on bank finance for working capital is taken @ 14% per annum. free sampling.59 3. 9. hoardings etc.60 14. 9.80 0.08 0.50 lacs shall be repaid in 5 years including a moratorium period of 1 year with interest @ 12% per annum. the annual cost at 100% utilisation would be Rs.40 0.75 1st Year 2nd Year ---. display materials.33 -53.00 0.15 1. 9.99 8.11 1. a provision of 20% of sales value is made every year.7 Depreciation It is calculated on WDV basis @ 10% on building and 15% on machinery and other assets.14 1.78 18.77 1.60 8. A Particulars Installed Capacity Capacity Utilisation Sales Realisation B Cost of Production Raw and Packing Materials Utilities Salaries Stores and Spares Repairs & Maintenance Selling Expenses @ 20% Administrative Expenses Total C Profit before Interest & Depreciation Interest on Term Loan Interest on Working Capital Depreciation Profit before Tax Income-tax @ 20% Profit after Tax Cash Accruals Repayment of Term Loan 42.90 2.40 0.1. transportation.11 4. scroll type advertisement in local TV channel.72 2.96 77.30 Tonnes ---60% 72.4 Utilities As explained earlier.15.35 1.86 10.48 0.5 Selling Expenses There will be expenses like selling commission.23 12.53 0.80 0.
0 [A] Operating Leverage = Contribution/EBT = 15.57 ÷ 3.11. in lacs) No [A] [B] Particulars Sales Variable Costs Raw and Packing Materials Utilities (65%) Salaries (70%) Stores & Spares Selling Expenses (70%) Admn.52 15 .80 0.39 0.57 9.90 56.35 60% 42.[B] Fixed Cost Break-Even Point [D] ÷ [C] LEVERAGES Financial Leverage = EBIT/EBT = 8. Expenses (50%) Interest on WC [C] [D] [E] Contribution [A] .02 = 0.54 15.02 Degree of Total Leverage = FL/OL = 1.0 BREAK-EVEN ANALYSIS (Rs.08 0.42 0.00 12.46 Amount 72.46 ÷ 5.01 ÷ 5.11 = 1.11 = 3.47 1.48 10.
452003.80 -1. Works.52 2nd Yr 8.92 32% 4. Yaswant Niwas Road. 2371354 Wintech Taparia Ltd.90 0. 23. 2433950/2534586 16 . Delhi Jaipur Highway.94 1.44 2.58 4.35 3.75 3.35 9.09 3.10 5.45 11. 4. Indore.[B] Debt Service Coverage Ratio (DSCR) (Rs.75 5.33 1. 39kms Milestone.92 23. Mumbai 400 098 Septu (India) Pvt.55 lacs.59 1.80 4.50 0.85 -------------------------------------- Internal Rate of Return (IRR) (Rs.80 4.95 Particulars Cash Accruals Interest on TL Total [A] Interest on TL Repayment of TL Total [B] DSCR [A] ÷ [B] Average DSCR [C] ----------------------------------. Tel No.59 9.73 0.22 4th Yr 10.33 8.95 3rd Yr 9.2.35 21. 2.10 1.75 4.90 3. Ltd.14 Cost of the project is Rs.23 11.94 5.75 4. Pune Apurva Engg.20 2.23 3. Pimpri.31 0.65 2.24 4.13 1.49 3.122001. Boriwali.60 5th Yr 11. 3.41 0.98 2.50 46.28 24% 5.42 3. The IRR is around 26%. These machines are available from many sources.93 4. in lacs) 1st Yr 6. Tel No.88 20. Gurgaon. Marathe Corpn.95 28% 4.45 10..45 0.93 4. in lacs) Year 1 2 3 4 5 Cash Accruals 6. Some of them are 1. 25/1.45 3.80 8.90 10.90 3.41 10.
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