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Project Feasibility Report on Maize processing

in Himachal Pradesh

CONTENTS

INTRODUCTION

AN OVERVIEW OF INDIAN MAIZE

STATUS OF MAIZE PROCESSING

STATUS OF CORN STARCH INDUSTRY

STATUS OF MARKETING OF MAIZE PRODUCTS IN INDIA

6
7

CRITICAL FACTORS FOR SETTING UP A MAIZE PROCESSING


PLANT

INFRASTRUCTURE

FACILITIES

AND

INDUSTRY

DEVELOPMENT

SWOT ANALYSIS

FEASIBILITY OF MAIZE PROCESSING IN HIMACHAL


PRADESH

10

POTENTIAL ASSESSMENT FOR MAIZE PROCESSING

11

SOCIAL AND ECONOMIC IMPACT OF THE PROJECT

12

INCENTIVES AVAILABLE FOR MAIZE PROCESSING UNITS

13

SUGGESTED ACTION PLAN

1.

INTRODUCTION

1.1.

Background
Maize (Zea mays) is one of the important Kharif crops of Himachal Pradesh. The major
area under maize is rain fed and there is no substitute for this crop during rainy season.
The quality of maize grown in the state is very good. It is an important crop of the state
both as staple food as well as for feed. The farmers are compelled to sell their produce to
the traders at throw away prices due to lack of local demand and excess production. The
trends in production, consumption and marketing of this crop have drawn the attention of
the State Government for finding out the value addition locally. They planned to
promote processing of this crop in to value added products. Some efforts were also made
to set up a processing plant in the state but the same could not materialized.
A study to assess the feasibility of maize processing in the State with the following
objectives.

To assess the production and marketable surplus of maize.


To identify the suitable technology.
To assess the techno-economic feasibility and location for setting up processing unit.
The broad terms of reference for the study were as under:

1.2

Terms of Reference
1.

To assess the district wise production and marketable surplus of maize in the State.

2. To survey the existing resources / institutions / organization and various linkages


existing in various parts of the area.
3. To identify / recommend possible products of maize based on the quality.
4.

To identify / recommend suitable technologies for processing of maize and suggest


suitable locations for setting up such units, keeping in view the forward and backward
linkages including marketing.

5. To assess the financial implications and suggest means of finance and financing
pattern.
6. To assess techno - economic feasibility and financial viability of the project for
securing financial assistance from different sources such as loans from banks and
financial institutions and grant from Ministry of Food Processing Industries, GoI and
other agencies.

7. Identify the agencies and suggest strategies for implementation of the project.
The study was completed in two phases. The first phase of the study was conducted in
Maharashtra to identify suitable technology for processing of maize to value added
products. The technology followed by the existing units in the state were studied. Phase
II of the study was taken up in Himachal Pradesh to assess the marketable surplus of
maize and also ascertain the feasibility of setting up of maize processing unit(s).

1.4

Methodology
The primary data were collected from the existing units, traders of maize products,
farmers, consultants, suppliers of plant and machinery, units consuming maize products
as raw material and various officials of State Govt. Departments of Agriculture, Himachal
Pradesh Krishi Vishvavidyalaya, Industries and Pollution Control Board and some
professionals who have worked in this sector. The study was completed in two phases.
Phase I- The study covered the existing maize processing units at Dhule (Maharashtra),
Ahmedabad (Gujarat) and units consuming maize products at Baddi, Himachal Pradesh.
Phase II- Covered field study in four major maize producing districts in Himachal
Pradesh, namely Una, Hamirpur, Mandi and Kangra.
The owners of the existing maize processing units in Gujarat and Maharashtra and
farmers in Himachal Pradesh were interviewed individually and also group discussions
were held with farmers wherever possible. In addition, discussions were held with the
Indian Starch Manufacturing Association, Mumbai and Indian Maize Development
Association, New Delhi to know the common issues connected with the maize processing
industry.
The secondary data were collected from various Departments of State Government in H
P, like Director of Agriculture, Director Industries and State Pollution Control Board.

1.5

Reference Year
The year 2002-03 was taken as reference year for the study. However, some
data/information pertains to 2003-04. Vital and important inferences were made based on
the latest information/data.

1.6

Data Analysis
Data were analyzed using Lotus 123/ Excel work sheets. Other methods and procedures
followed in the study were discussed in the respective chapters.

1.7

Limitations of the Study

2.

Data availability from the secondary sources was sometimes not consistent
with actual field level data and from other sources.
The information collected from the owners of the units and farmers is based on
personal interviews and hence may not be comparable with the official
records/ books of accounts.

AN OVER VIEW OF INDIAN MAIZE (Zea mays)


Maize (Zea mays) is classified into dent, flint, waxy, sweet and pop corn categories. Dent
corn (Zea mays var. indentata) also known as field corn, containing both hard and soft
starch, becomes indented at maturity. Flint corn (Zea mays var. indurata) having hard,
horny, rounded or short and flat kernels; with the soft and starchy endosperm is enclosed
by hard outer layer. Both of these varieties are used for industrial purposes. Popcorn
(Zea mays var. everta) has small pointed and rounded kernels with very hard endosperm
which on exposure to dry heat popped or evereted by the expulsion of the contained
moisture and forming a white starchy mass many times the size of the original kernel.
Sweet corn (Zea saccharata or Zea rugosa) is distinguished by kernels containing a
high percentage of sugar in the milk stage and therefore suitable for table use.
Indian maize has white, red, purple, brown or multicoloured kernels and is
characteristically dent corn. The dent corn is useful for starch processing by wet milling
method. The area and production details of this cereal crop is given as under:

2.1

Production of Maize

The total area under maize cultivation in the world is 139 million hectares with a
production of 598 million MT ( mMT ). USA is the world's largest producer and exporter
of maize with an out put of 240 mMT from an area of 29 million hectares. Other major
producers are China (125 mMT), European Union (39 mMT), Brazil (37 mMT), Mexico
(19 mMT), Argentina (14 mMT) and India (11 mMT).

Among all cereals, maize occupies the fifth largest in area, fourth largest in output and
third largest in yield. India is the tenth largest producer with a production of 11.10 mMT
from an area of 6.6 million ha. The average yield in India is 1.77 MT/ha which is very
low as against 7 MT/ha in temperate areas of developed economies and 3.8 MT/ha of
global average.
Maize is cultivated in almost all states in the country. Bihar is the leading producer in
India followed by Rajasthan, Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Karnataka
and Himachal Pradesh. The crop is grown both in Kharif and Rabi seasons in India with a
share of 85 per cent and 15 per cent, respectively.
In Himachal Pradesh, it is grown only in Kharif season, mainly under rain fed conditions.
The total production of maize for the last three years in Himachal Pradesh is presented in
Annexure I. The data indicate that maize is a major Kharif crop in Himachal Pradesh
cultivated in an area of 3.0 lakh ha, which is over 70 per cent of the total cultivated area
of 4.30 lakh ha. The average annual production in the state is over 6.0 lakh MT, which is
more than 80 per cent of total Kharif production of 7.78 lakh MT of food grains. As per a
rough estimate based on a farm gate price of Rs.4/kg, the produce of the State is worth
Rs.240 crore per year.
Analysis of time series data for the last 10 years, reveal that there was not much variation
in the area under maize, but the production had suddenly declined during 2002-03 to
4.79 lakh MT from 7.68 lakh MT due to severe draught. Further, the CAGR indicates
that there was no growth in the area and production of maize in the State due to
stabilised cropping pattern. There was marginal increase in area and production in
Bilaspur district. Though not very significant, a negative CAGR had been observed in all
other districts, indicating that no further expansion in area is possible in these districts.
The major share of production comes from Mandi, Kangra, Chamba and Sirmaur
districts. The average yield of maize in Himachal Pradesh is 2.0- 2.5 MT / ha. Sirmour
district has the highest productivity of 2.3 MT / ha followed by Mandi with 2 MT / ha.
The productivity level of other districts range between 1.5-2.0 MT / ha, indicating
thereby the scope to improve the productivity by adopting improved agronomic
practices.

2.2

Utilisation pattern of maize

The major share of maize produced in the developed countries is either utilised for
production of ethanol or production of feed for livestock. Globally maize accounts for 15
per cent of the world's proteins and 19 per cent of the calories derived from food crops.
Maize produced in India is utilised for human consumption (33%), starch production
(9%), poultry feed (46.5%), brewery (0.5%) and animal feed (11%). There are no precise

data available on the utilisation pattern in Himachal Pradesh. However, the discussions
with farmers and policy makers indicate that only 20 per cent of maize is utilised for
human and animal consumption in the state. The remaining 80 per cent is supplied to the
processing factories especially poultry and animal feed plants located in other states.

2.3

Assessment of Market Surplus of Maize

The market surplus in respect of food grains in India as compared to other crops is quite
low between 5-10 per cent. But the consumption of maize in Himachal Pradesh for food
has declined over a period of time. The use of maize in daily diet has been replaced by
wheat and rice. The shift in consumption pattern is attributed to the increase in
purchasing power of the local people and prevalent public distribution system of
Government. The district- wise market surplus of maize arrived at by discussions with
farmers and Agriculture Department officials is given as under:
Table.1. Estimation of market surplus of maize in Himachal Pradesh
Assessment year 2002-03

S.No. District
1
2
3
4
Total

Una
Hamirpur
Mandi
Kangra

Production
(MT)
39,155
72,840
131,273
117,950
361,218

Market
Surplus (%)
60
60
75
60

Surplus (MT)
23,493
43,704
98,454
70,770
236,421

For the assessment year 2002-03, there was a market surplus of 2.36 lakh MT in 4 major
maize producing districts in the state, even despite of low production during this year due
to drought. Keeping in view the market surplus of 65 to 70 per cent, the average annual
surplus for the state works out to 4.0 lakh MT per annum.

2.4

Marketing of Maize in Himachal Pradesh

The marketing of food grains in the state is not strictly regulated. There are no operating
food grain markets in the state. As there are no notified markets, farmers sell the crop to
the local traders. In districts like Una, Kangra and Hamirpur, traders from adjoining states
collect maize from the farmers directly. These traders offer very low prices and also cheat
farmers in weighment. The maize purchased from the farmers in Himachal Pradesh is
supplied to animal and poultry feed units in adjoining states, like Punjab and Haryana.
The starch units of Punjab and Uttar Pradesh also procure raw material from this state
directly from the farmers and traders.

Himachal Pradesh supplies nearly 4.0-5.0 lakh MT of maize to other states every year
after meeting its own requirement of food and feed.

2.5

Farm Gate Price of Maize

The market price of Indian Maize fluctuate between Rs 350/- per quintal to Rs. 750/- per
quintal in different states and different seasons. The price is generally high for Rabi
season maize than Kharif season maize. The price fluctuation is due to seasonality of
production creating a demand and supply gap during off season. In order to reduce the
demand supply gap, maize is also imported from other countries.

Himachal Pradesh, the price fluctuation is not very wide. The price generally hovers
around Rs.350/- per quintal to Rs.500/- per quintal during peak and lean seasons,
respectively. The farmers in Una and Hamirpur districts get relatively higher price than
Mandi and Kangra districts. The main reason for this is that it is easier to transport the
produce from Una and Hamirpur to Punjab than from Mandi and Kangra. The districtwise farm gate prices at which the traders purchase maize are given in the Table below:
Table.2. Changes in farm gate price of maize in Himachal Pradesh

S.No District

1
2
3
4

2.6

Una
Hamirpur
Mandi
Kangra

Farm gate price (Rs./Qtl.)


Peak period
Lean
period Average
(Jan-Mar)
(Sep-Dec)
450
500
425
400
450
425
300
400
350
400
450
425

Problems in Maize Production in Himachal Pradesh

The maize crop in the state have some inherent problems, which limit its cultivation and
production. The important factors being

Rising income levels leading to a shift of consumer preference from coarse cereals
(maize) to fine grains (wheat and rice).
Increased monkey menace during the recent years compelling the farmers to switch
over to some other crops like paddy, vegetables etc., especially in irrigated areas.
Lack of systematic/ regulated marketing.
Negligible processing facilities.
Dependency on rain fed conditions.
Least preference by farmers in view of lower returns.
Unfavorable weather conditions like untimely rainfall and thunder storms causing
lodging of the crop.

Temperate climate of Himachal Pradesh does not favour its cultivation during Rabi
Season.

The above problems, though difficult to overcome, can be reduced considerably by


combined efforts of farmers, policy makers and Government departments through a
combination of developmental and policy measures. Spring season cultivation with
irrigation could be tried. Newer single cross hybrids should be tried.

3.

STATUS OF MAIZE PROCESSING

Maize is one of the staple foods of poor families. Traditionally, the grain is converted into
flour in mills for making bread. Immature cobs are roasted and eaten all over the country.
It is an important raw material for animal and poultry feed and corn flakes
manufacturing units. But the quantity of maize utilised by these units is limited as the
existing units are of small scale nature. They make only a few products having limited
demand. Hence, an alternative large scale unit which can process a large quantity of
maize to different value added products is required to be set up.

3.1

Methods of Maize Processing

Maize is usually processed by two distinct processes, namely wet milling and dry
milling. Dry milling produces grits, corn flour and minimum amount of corn meal. The
technology has been standardized by Central Food Technological Research Institute
(CFTRI), Mysore. The technical knowhow is available with CFTRI on price. The service
for turnkey project is also available with the institute. Dry milling units have a crushing
capacity of 10 MT/day with a project cost of Rs.20 lakh. Such units can be set up
anywhere in the state depending upon the availability of raw material, power and suitable
land.
3.1.1

Dry Milling

The maize kernels are screened, tempered with hot water/steam to loosen the germ and
bran. Then it is de-germinated to remove the germ. The husk is separated by means of
aspirators. The de-germed maize is dried to a moisture content of 15-15.5 per cent
followed by sifting. It then is subjected to milling to produce grits, meal and flour. The
germs separated is dried and passed through an expeller to produce the corn oil. The
different products that result from dry milling are as under :

S. No.
1
2
3
4
5
6

Product
Grits
Coarse meal
Germ
Fine meal
Flour
Hominy feed

Share (%)
40
20
14
10
5
10

CFTRI has developed a mini mill for dry milling of maize. The grits is the main product
of dry milling process, which is used as porridge by boiling domestically. The processing
units use grits for manufacture of products like ready-to-eat snacks (corn flakes), wall
paper paste and manufacture of glucose by direct hydrolysis. The process flow of dry
milling is as under:
Cleaning => Conditioning => Degerminating => Drying & Cooling => Grading &
Grinding => Sifting & Classifying => Purifying => Drying => Packaging
3.1.2

Wet Milling

Maize is generally processed to manufacture corn starch by wet milling method the world
over. The by-products of starch manufacture, like corn oil, corn steep liquor, gluten etc.
are the important value added products.

The grain is unloaded from the trucks directly in receiving area or stored in silos. The
material is fed to the cleaning section by a feed conveyor. The cleaning section is housed
in 3 floors, where the material is screened for debris such as sand, stones and any other
foreign particles. The clean material is then sent to steeping section. It is received in a
tank where it is washed with hot water first and subsequently steeped in water containing
sulfur-dioxide @ 0.2 per cent for 70 hrs at 52 oC. Steeping softens the kernels and also
removes some solubles. Sulphur dioxide act as preservative. The steep water produced in
this process is then concentrated and fortified with vitamins, minerals to produce corn
steep liquor. It is then subjected to primary and secondary grinding, wherein the germ and
husk are separated. The degermed maize is passed through a fibre washing section where
the fibre (husk) is separated by pressure washing. Now the mixture consists of gluten and
starch. The gluten is separated from starch by centrifugal separation. The starch slurry is
then passed through a 12 stage hydroclone washing system, wherein the starch is washed
and concentrated simultaneously. Starch slurry usually has a moisture content of 42 per

cent. The starch slurry thus obtained is diverted to various production lines for
manufacture of liquid glucose and modified starches such as dextrose, dextrose mono
hydrate etc. The wet starch is then dried by hot air by passing through a drier. The dry
starch has a moisture content of 11-12 per cent. The slurry containing gluten is passed
through a rotary vacuum filter in which a portion of the moisture is removed followed by
drying in a hot air drier. The dried gluten thus obtained has a moisture content of 12 per
cent. The gluten is mainly used for poultry feed.
The average recovery of various products and co-products of maize during the wet
milling are
Starch

3.1.3

- 60-62 %

Gluten -

8-9 %

Germ

6-7 %

Husk

22-24 %

Manufacture of Corn Flakes

The corn flakes is one of the important value added products manufactured out of yellow
and white maize. It is generally eaten as a breakfast cereal but the demand for this
product is limited to hotels and big cities. It is a product of dry milling, which is
manufactured by flaking of the major grain after extraction of germ. The flaked grain is
either roasted for manufacture of corn flakes, breakfast cereal or fried to manufacture
corn flakes served as snack foods. The raw flakes are also used for manufacture of beer.
There are only a few companies like Mohan Meakin, Gaziabad and Kellogs, whose
brands of corn flakes are very popular in Indian market. A brief process flow of corn
flakes is given as under:
Receiving => Cleaning & Polishing => Milling => Bran => Cooking under pressure =>
flavouring => Agitation (lump breaking) => Drying => Sweating => Flaking =>
Roasting/ Frying => Grading => Packing
The corn grains after cleaning and polishing are milled to remove the germ and bran.
Germ is utilised for extraction of corn oil. The bran is cooked under pressure in rotary
steam cooker and mixed with flavouring material. The cooking is completed when the
material turns out to a uniform translucent colour. The cooked material is carried to an
agitator or lump breaker and finally dried in drier to moisture level of about 15 per cent to

20 per cent. The dried material is kept in tempering tanks for few hours to permit the
residual moisture to become equally distributed, which is known as sweating. This is very
essential to have uniform pressing for the flakes. The tempered material is next passed
though a heavy duty flaking machine. The flakes are then immediately transferred to gas
fired rotary ovens for roasting. While rotating, the flakes are continuously carried forward
until they are dropped into conveyer. The roasted flakes are subjected to inspection,
preferably on conveyers or tables. Then properly roasted flakes are graded and transferred
to the packing bins immediately because flakes are hygroscopic. They are then packed in
water resistant polythene packages or food grade waxed paper packages.
A corn flakes unit of 300 MT per annum will require an investment of Rs.50 lakh. The
plant and machinery is available in India. As the demand for this product in the state is
limited, the units may have to market their products mainly outside the state.

3.2

Limiting Factors for Maize Processing in Himachal Pradesh

4.
4.1

Non availability of regular supply of required quantity of water in some districts.


Consumption of maize as a staple food by local population and limited preference
for processed products.
No organised marketing or bulk procurement and consequent lack of bulk
purchase scope for the industry.
Availability of maize in only one season.
Slow growth of demand for starch in the state
Poor rail connectivity
High transportation cost both for raw materials and finished goods due to hilly
terrain makes it less competitive.

STATUS OF CORN STARCH INDUSTRY


World Scenario

There has been a positive trend during the past two decade in the wet milling industry.
Corn has been the major source of starch (83%) followed by potato (6%), Cassava (6%),
wheat (4%) and rice (1%). Maize is utilised mainly for ethanol production in the
developed countries like US and EU, whereas in the rest of the world, it is either used as
a staple human food or manufacture of starch and its derivatives.
The global production of starch from all sources was 48.5 mMT in the year 2000. US
with the largest starch industry contributes 51 per cent followed by EU (17%) and the
rest by others. During the same period 39.4 mMT of starch was derived from maize,
whereas potato and wheat contributed 2.6 and 4.1 mMT, respectively.

The world demand for starch products is growing at an annual rate of 4 per cent. The
demand for starch syrups is higher than dry starches in developed countries, whereas in
developing countries, the situation is reverse. Due to the steady growing demand, the
total world output of dry starches and syrups were estimated to reach 71 mMT and 37
mMT, respectively by 2010.
EU is the major exporter of both native and modified starches, followed by US and
Thailand. The largest starch consumers are US, EU, China and India. The world per
capita demand for starch is 8.4 kg/annum, whereas India's per capita demand is 0.4
kg/annum.

4.2

Indian Scenario

The wet milling industry in India is limited to certain pockets such as Gujarat,
Maharashtra, Madhya Pradesh, Punjab, Karnataka and Chattisgarh. There are about 17
wet milling units with a crushing capacity of about 3400 MT of maize/day. The statewise number of wet milling units and the installed capacity is given in the Table.3.
below:
Table.3. Wet Milling units in India

S.
No.
1
2
3
4
5
6

Name of the State

No.
units

Gujarat
Maharashtra
Madhya Pradesh
Karnataka
Punjab
Chhatisgarh
Total

6
5
3
1
1
1
17

ofInstalled
capacity
(MT of maize/day)
1,350
1,050
450
300
100
150
3,400

The list of major starch producers in India is given in (Annexure II b). Gujarat is the
largest producer of starch, having six units with a total crushing capacity of 1350 MT of
maize per day, followed by Maharashtra with 5 units and capacity of 1050 MT and
Madhya Pradesh with 3 units and capacity of 450 MT maize. (Fig.1.)

The average processing capacity of the units in India is 200 MT of maize / day. There are
plants with as high crushing capacity as 400 MT/day. However, there is no plant in the
country with crushing capacity of less than 100 MT/ day. The selection of technology is
very important as regards to the viability of the unit is concerned. A unit in Buland Sahar,
Uttar Pradesh has been reported to have been closed due to improper selection of
technology.

4.3

Status of Maize Processing in Himachal Pradesh

Himachal Pradesh has no starch producing unit. There are few animal and poultry feed
units in Kangra and Una districts. A mini dry mill with CFTRI technology is proposed to
be set up in the Industrial area of Mandi District in near future.

5.

STATUS OF MARKETING OF MAIZE PRODUCTS IN


INDIA

The starch is the main product of a maize processing unit, which is consumed in various
other industries like food, pharmaceuticals, textiles, paper, hotels and restaurants, etc. The
other products include Gluten, Germ, Fibre (husk) and Corn Steep Liquor. Gluten has
great demand in animal feed industry because of its high protein content (70%). Germ is

expressed to extract germ oil which is a low cholesterol containing edible oil. Fibre,
mainly the husk, is used by animal feed manufacturers. It has demand in wet form itself
for animal feed. Corn Steep Liquor is one of the substrates for culture media for
manufacturing of antibiotics and other microbial production systems.
In India, Mumbai, Delhi, Ahmedabad and Kolkata are the major markets for processed
maize products. Other important markets include Bhopal, Hyderabad, Chandigarh,
Lucknow, Bangalore etc. Most of the starch manufacturers of Gujarat, Maharashtra,
Punjab, etc., have their marketing offices in Mumbai. Hence, Ahmedabad and Mumbai
are the major trading centres for corn starch in India.
Maize processors directly market their products to the consumers like pharmaceutical
industries, hotels, textiles, paper industries, etc. and through traders as well. Most of them
have their marketing offices in metros and big cities for direct sale. They also sell through
trading agencies as well. These traders restrict marketing of the products of one or a few
companies and prefer to procure different maize products from a single supplier.
Therefore, it is advisable for a maize processor to have processing facilities for starch and
its derivatives like liquid glucose, dextrose monohydrate, etc. Also, different industries
require different types of starch and the processor should be able to meet their demand to
compete in the market. Starch and Gluten have good export potential as well. India
exports these products to Sri Lanka, South East Asian countries, Bangladesh and South
Africa.
The consumption of starch in Himachal is very limited because of slow industrial
development and its requirement for food and hotel industry is met from other states.
Nearly 25 pharmaceutical units have been set up at Baddi in Solan district and each of
them consumes nearly 4-5 MT of starch per annum, which comes to nearly 200 MT of
starch requirement per year. Further, Dabur India has set up a manufacturing unit of
Glucose from Dextrose Mono Hydrate (DMH). The DMH is obtained from maize starch
through a series of process including Liquefaction, Incubation, Filtration, Ion Exchange,
Evaporation, Crystallization and Drying. Currently, this unit purchases about 20 MT of
DMH per day from maize processing units of Gujarat and Punjab. Its annual requirement
of this product is 2000 MT. A down stream DMH manufacturing unit can be set up easily
attached to a starch manufacturing unit. Similarly, Liquid Glucose (LG) also has good
demand in India and a LG manufacturing unit can also be set up along with a starch
manufacturing unit from maize. In addition, there are a few textile manufacturing units
located in the state which require low grade starch. This demand is being met from
Ahmedabad and Mumbai. The procurement price of such units goes up due to the
addition of transportation cost of Rs.2.0 to Rs.2.5 per kg of starch. Further, if the starch
units are set up in the state, they will get exemption from excise duty and sales tax to the
tune of about 18-20 per cent. Hence the maize processing unit if set up in the State will
not face any difficulty in marketing the main product, the starch.
The husk can be sold locally, but the unit may face difficulty in selling corn steep liquor
as there is no unit in the state which produce antibiotics and microbial products. Corn oil
can be marketed outside the state as there is good demand for it.

6. CRITICAL FACTORS IN SETTING UP A MAIZE


PROCESSING PLANT
6.1

Raw material

The viability of a maize processing plant depends upon the availability and
uninterrupted supply of raw material to the unit. On an average, a unit with a crushing
capacity of 100 MT/ day will require about 30000 MT of maize per year (assuming 300
days of operation of the plant). Hence, the availability of raw material is one of the
important consideration in deciding the location of maize processing unit. Keeping in
view the cropping pattern, consumption of the maize by local population and market
surplus as indicated in Table.1 in the preceding chapters, it should not be a problem for a
unit of above capacity to procure the raw material during Kharif season. The plant will be
able to procure major portion of its raw material requirement with in the radius of 200
km. The state produces mainly yellow dent corn which is most suitable for wet milling
for manufacture of starch and other by-products .
In Himachal Pradesh maize is mainly a Kharif crop. The harvesting is done in the month
of September- October. As mentioned earlier, the farmers sell major portion of their
produce immediately after harvesting. The remaining portion is released to the market
depending upon the demand and market trends till February to March. As the traders
procure maize from the farmers, the unit will be able to source the raw material from
traders for another 2-3 months. Hence, there will be difficulty in procuring local maize
for about 3-4 months during June to September. This can be overcome if the units
procure maize in bulk during the Kharif and store in silos for the lean months. The
possibility of obtaining it from adjoining states like Punjab and Haryana is also available.
States like Bihar and Punjab produce winter maize. The maize is generally packed in
gunny bags in bulk. The most common mode of transportation is by lorries.

6.2

Land

Land requirement of starch manufacturing unit is very high, as it requires large area to set
up plant and machinery and effluent treatment plant. There should be enough land for
disposal of treated waste water. A unit with crushing capacity of 100MT/day should have
at least 10 acres of land. However, if available at reasonable price, the unit may acquire
upto 15 acre of land to meet future expansion requirements. In our model, we have
assumed 10 acre of land for assessment of viability. As per the Industrial Policy

Guidelines and Incentive Rules- 1999, the land is also allotted by State Government to
the units on lease basis. The details of the terms and conditions for allotment of land is
presented at the end of document.

6.3

Water

The water requirement for the wet milling industry is relatively large with an average use
of 4 cum per MT of crushing per day. For a wet milling unit of 100 MT capacity,
therefore about 4 lakh litre of water/ day is required. The site where wet milling units are
set up should have a good source of water, preferably a perennial river. As the unit also
generate high amount of sewage water, which require to be disposed off properly. In case
the water is to be sourced from ground, the water table should be high and the areas
should fall in white category of unrestricted use.

6.4

Power

The average power requirement is about 170-250 units per day per MT of maize
crushing. The milling unit requires uninterrupted power supply and hence a DG set is
required as standby arrangement. Himachal Pradesh is reported to be surplus in power
and there should not be any problem in respect of power supply. The power tariff in the
state is also very reasonable, which help in viability of the unit.

6.5

Steam

The steam requirement is 1 ton / MT of maize crushing. The units manufacturing starch
by wet milling in states like Maharashtra and Gujarat, use coal for production of steam.
However, coal as a source of energy for boilers is not permitted in Himachal Pradesh.
Hence, oil fired boilers need to be installed. This may raise the cost of operation of the
unit to some extent.

6.6

Technology

The technology is indigenous except for starch-gluten separation and starch washing unit
which is imported through companies like Alfa Laval. The entire plant can be fabricated
by the fabricators at Ahmedabad and few other parts of the country. There are a number
of suppliers for setting up of the plant on turnkey basis. Some of which are listed in
Annexure III. A view of a maize wet milling unit is given in Fig.2. below:
Starch is usually manufactured from maize by a process known as wet milling. The wet
milling process is a complex process, which involves a series of operations, by which the
corn is separated into three parts, the outer hull or bran, the germ (the source of most of
the corn oil) and the endosperm (the source of gluten and starch). The critical
operations which have a direct bearing on the quality of the final product are

Raw material selection and cleaning - Good quality yellow dent corn without various
impurities will increase the quality of the final product.

Steeping - Germination of maize and the microbial growth are controlled by steeping.
Hydroclone washing - The simultaneous washing and concentration of starch to the
desired moisture and solid level increases the quality and marketability of the finished
product.
The different steps involved in the wet milling are presented below.

6.6.1

Receiving

The corn is transported to the unit in trucks in gunny bags and offloaded in receiving area
or in silos. The receiving area should be designed in such a manner that there is enough
space for smooth movement of expected number of vehicles. The grain is fed to the belt
conveyor which takes the maize grains to cleaning section.

6.6.2

Cleaning

The grain contain various impurities like cobs, stones, metal parts, dust, other foreign
matter etc. These unwanted materials are removed in cleaning section. The grain is
passed over perforated metals sheets, air blowers, electromagnets to remove the
impurities.

6.6.3

Steeping

The grain is fed into large steep tanks with hot water at 52 0C and steeped for 70 hr.
Generally, RCC steep tanks are used by the existing units in India. However, steep tanks
can also be fabricated by stainless steel but it increase the capital cost. The RCC tanks
should be designed in such a manner that it withstand the gravitational force, as well as
the weight of the material. Steeping mixture containing sulfur dioxide (SO 2) @ 0.2 per
cent concentration in hot water is added in the steeping tanks to prevent germination and
bacteria. The steeping conditions the grain for later steps by softening of the maize
kernels and loosen the bonds between germ, husk and endosperm. During the soaking
process, nutrients are absorbed into the water and this water is later evaporated to
concentrate the nutrients to get corn steep liquor or condensed corn fermented
extractives.
6.6.4

Grinding

The grinding process is completed in 2 stages. The grinders are made of stainless steel
with adjustable RPM with or with out pneumatic settings. There are a number of
manufacturers of grinding machines in India. In first stage, the steeped maize grains are
ground coarsely to loosen the husk and germ. The second stage grinding, known as fine
grinding, help in detaching the germ from the grain.
6.6.5

Germ Separation ( Degermination )

The pasty mix obtained after fine grinding is pumped to water filled settling troughs,
known as germ separators or degerminators. It is a 3 stage process where the slurry
containing soluble husk, gluten and starch are separated from germ. The lighter density
rubbery germ float on the top and is skimmed off. The germ is passed to germ drier
which is finally sent to oil extraction unit. The germ contains 45 per cent oil and the rest
is crude fibre and moisture. The starch manufacturers generally prefer to sell germ rather
than own oil extraction unit.

6.6.6

Fibre Washing Section

The slurry of husk, starch and gluten is ground for better recovery of starch. The fibre
washing is a 6 stage process which is carried out by DSM box. The husk is separated
from the soluble starch and gluten slurry by a counter current flow system. The husk is
sent to either drying section or used as animal feed in wet form. The husk is mainly
carbohydrate which also contains 8 per cent protein.
6.6.7 Thickening

The slurry of starch and protein is passed through a centrifugal concentrator to get the
concentrated slurry. This machine is also called as milk stream thickener.
6.6.8

Primary separation

The thickened slurry is passed through a high speed centrifuge to separate the heavier
starch from the lighter protein (Gluten).
6.6.9

Gluten thickening

The protein slurry is passed through a centrifuge to get concentrated slurry of gluten. The
gluten contains 65 per cent protein and is a good source of protein for the animals and is
used in animal feed preparation.
6.6.10 Rotary vacuum filter

The thickened gluten slurry is further concentrated to get gluten cake with 40 per cent
solids through a rotary vacuum filter. The cake is further dried by hot air and / or sun to
bring down the final moisture content to 12 per cent.
6.6.11 Hydroclone system

The starch slurry received from the primary separation is passed through a multi stage
hydroclone system ( Fig.3 ) which concentrate the starch slurry to 42 per cent solid level.
Alfa Laval is the main company supplying this system in India for starch units
6.6.12 Drying

The concentrated starch slurry is then dried by hot air application (175 0C) to 11-12 per
cent moisture content level.
The main product of wet-milling of maize is starch. Besides, it produces four major coproducts for the feed industry namely the steep water, husk (hulls or bran), germ and
gluten. These co-products represent about 25-30 per cent of the processed maize. The
starch is raw material for various ancillary industries like dextrose monohydrate, dextrins,
saccharin etc. For manufacture of further derivatives of starch, ancillary units need to be
attached with starch manufacturing units.
The wet milling has developed into an industry that seeks optimum use and maximum
value from each constituent of the maize kernel. In addition to starch and the various
other products, and edible corn oil, the industry has become an important source of welldefined specialised ingredients used in feed formulation industry.

6.7

Effluent Treatment Plant

Effluent treatment plant is an essential component of a starch industry. It should be set up


as per the norms of State Pollution Control Board. It has been made mandatory to set up a
ETP in all starch manufacturing units.

7. INFRASTRUCTURE FACILITIES AND INDUSTRIAL


DEVELOPMENT IN H.P.

7.1

Industrial Development in the State

The entire State is industrially backward, except some development on the periphery of
the State. The State has been classified basically into two categories, namely Industrially
developing areas and Industrially backward areas. The development blocks of Paonta
Sahib and Nahan in the district Sirmour and Nalagarh, Dharampur & Solan in the district

Solan, excluding backward panchayats as notified by the Government of HP from time to


time, would fall in the category of industrially developing areas. The rest of the State,
including backward panchayats in the industrially developing areas referred to above falls
in the category of industrially backward areas. Tribal areas of the State, as notified
from time to time have been treated as tax free industrial zones. This offers vast potential
and incentives for new entrants to set up various industries in the State. In addition, the
State has, by and large, clean environment and cool weather congenial for many
industries.
The industrial growth in the state has been mainly under small scale sector. It has about
196 medium and large scale units with a total investment of about Rs.2378 crore and
30,176 small scale units with an investment of about Rs. 710 crore. The district-wise data
on the number of units in medium and large scale sector are given in Annexure - IV. It
can be seen from the data that the district Solan is a fairly developed district in the state
with respect of number of units. The reasons for the same is its proximity to industrially
forward States like Punjab and Haryana and also nearness to important markets like
Chandigarh, New Delhi etc. Sirmaur and Una are another two districts where there is
some industrial growth quite obviously due to the same reasons specified above. Steel
and steel products, chemical and chemical products, food products and electronics are
some of the major industries of the state. Among the food products, fruit and vegetable
based units dominate the list. Processing of food grains especially maize is negligible,
rather nil.

7.2

Infrastructure Facilities

The infrastructure facilities available in the state are given below in a nutshell:
7.2.1

Railways

Himachal Pradesh being comprised of mainly hilly areas, railways network is very
limited. There is only 200 km of narrow gauge rail network between Shimla and Kalka
and Joginder Nagar to Pathankot. A Broad gauge line connecting Nangal-Talwara passing
through Una district is under construction.
7.2.2

Roads

The road network is fairly good in the state with 23,544 km of roads connecting all the
district headquarters and subdivisions as well as blocks. Three national highways
(No.20,21 &22) pass across the state.
7.2.3 Telecommunication

Whole of State has been provided with electronic exchanges and OFC network of nearly
about 6000 Km. The State has the latest state of the art telecom network and excellent
connectivity.

7.2.4 Air Links

Himachal Pradesh is approachable by air from New Delhi/ Chandigarh. There are 3
smaller airports in the state at Shimla, Kullu and Dharmasala. Various domestic air lines
operate regular flights from Delhi.
7.2.5

Power

Himachal Pradesh has number of hydel power units and is surplus in power. It supplies
electricity to other states as well. All indutries are provided required quantity of
electricity by State Electricity Board at reasonable rates.

8.

SWOT ANALYSIS

8.1

Strengths

Corn production in the country has been growing steadily over the past five years.
The anticipated production of maize during the year 2004-05 is estimated to be in the
range of 9-10 mMT.
GoIs initiative to increase the area of cultivation and production of maize during the
X five year plan period and its inclusion under the technology mission give impetus
to maize production in the State. Directorate of maize has set a target to raise the
output of maize to 18 mMT by the end of the tenth plan period mainly through
increase in yield to 23-24 q / ha.
Starch manufacturing from maize generates about 1 MT of by-products for every 2
MT of starch produced and these by-products are worth more per MT than maize
itself making the starch manufacture an economic venture.
Strong raw material base with total production of 6.0-7.0 lakh MT and 4.0-4.5 lakh
MT of market surplus.
Maize is becoming one of the cash crops for farmers, as a major part of it is usually
sold for market. Further, there is no substitute for it particularly in rain fed condition
and so the farmers will continue to grow maize.
Agro processing is one of the thrust areas for the Government of Himachal Pradesh. A
special package of incentives is available for the processing units set up in Himachal
Pradesh.
It will be the first maize processing plant in Himachal Pradesh, hence, shall not face
any difficulty in marketing its products.
The maize starch is a preferred product compared to its substitutes like potato starch
and tapioca starch.
The productivity of maize is high which can still be raised. Higher the productivity,
lesser will be the cost of production.

8.2

Weaknesses

8.3

Opportunities

8.4

Seasonal availability of maize in Himachal Pradesh. Since only Kharif crop is


cultivated , the local raw material will not be available in other seasons. To
run the plant during summer and rainy season maize grain has be procured
from other states or buffer stocks to be maintained by the processing units.
Competition for maize procurement by the poultry feed industry would limit
the raw material availability.
No organised market/ single place for bulk procurement. Maize has to be
procured from individual farmers or through middle men/traders which may
hamper the regular availability or may cause price fluctuations.

Backward linkage with farmers ( contract farming type arrangement ) is


possible as maize has become one of the cash crops in the state.
Demand for starch is high from varied users like food, pharmaceuticals,
textiles, paper, packaging etc.
The demand is likely to increase to 186 lakh MT by 2011-2012
Great export demand for corn gluten as a poultry feed in South East Asian
countries.
Substantial subsidies from the Govt. in the form of land , subsidised power,
water etc.
Corn starch is identified as one of the ingredients for manufacture of
biodegradable plastic. The demand for corn starch is expected to increase in
future.
Corn starch is a substrate for manufacture of alcohol, which has been
identified as an environment friendly fuel.

Threats

Maize is produced in HP only in Kharif season and mainly grown under rain
fed conditions.
Stiff competition from other producers within the country.

The strengths and opportunities of maize processing in Himachal Pradesh outweigh weaknesses and
threat.

9. FEASIBILITY OF MAIZE PROCESSING IN HIMACHAL


PRADESH
9.1

Technical Feasibility

The maize can be processed in to variety of products like grits, germ and flour by dry
milling and other products especially corn flakes at small scale level. Such units can be
set up any where in the state where maize is a major Kharif crop. The technology for such

units is available locally. But, in view of the high market surplus of maize grain in the
state, large scale units may be required to be set up to manufacture value added products.
The technology of maize processing is readily available in India, especially in States like
Gujarat, Maharashtra, Madhya Pradesh, Karnataka, Punjab and Uttar Pradesh, which can
be transferred easily to H.P. However, as discussed in the preceding chapters, there are
some limiting factors for wet milling, the most suitable method to utilise the large surplus
production of maize. Keeping in view the limiting factors, some ideal locations for
setting up of a wet milling unit in Himachal Pradesh are identified as under:
9.1.1

Baddi in Solan district

Baddi is one of the most developed growth centres for industrial development in
Himachal Pradesh. It is the most approachable location from Chandigarh. It is easily
approachable from all the maize growing districts of Himachal and also from major cities
of Punjab and Haryana. The infrastructure is fairly well developed at this location. The
units set up at Baddi can procure raw material from all of the maize growing districts of
the state. The land is available but high cost may be a limiting factor. Sufficient ground
water is available, which can be exploited for processing unit. There is ready market for
starch in Baddi itself and being close to Chandigarh and other important cities there
should not be any problem in marketing of the products.
9.1.2. Takarala in Una District

Due to close proximity to Punjab and Haryana, the Una district is in an advantageous
location. This centre is also well connected to all maize growing districts and also to the
potential markets like Chandigarh, New Delhi etc. Takarla in Amb Block has been
identified as one of the suitable locations for setting up of maize processing units. There
will not be any problem in acquiring the required area of land. Ground water is
sufficiently available which can be exploited easily for the unit. There will not be any
problem of sewage water disposal. The unit can procure raw material from all maize
growing districts of Himachal Pradesh during Kharif season, as the entire maize sold in
the state passes through Una. During Rabi season, the units can procure raw materials
from the adjacent states like Punjab, Haryana, etc. This is the only location in Himachal
Pradesh where broad gauge railway connection is available at Una.
9.1.3

Bhambla in Mandi District

Bhambla is a centrally located place for all the districts producing maize. The place is
situated in the border area of Mandi, Hamirpur and Una districts. It has been identified as
a growth centre for industrial development by the Government of Himachal Pradesh. The
place is well connected to procure raw material from Mandi, Hamirpur, Kangra, Chamba
etc. Some of the maize sales occurring in Una district may not come to this place, as the
competition from Punjab traders will be stiff there. However the site selection in
Bhambla may have to be made carefully as the requisite land area and water may not be
available at one place.
9.1.4

Balh Valley, Dist Mandi

Balh valley is another ideal location. It is located on NH21 (Chandigarh - Manali)


between Sunder Nagar and Mandi. This is a plain maize growing area. Some area of
maize cultivation is irrigated. The raw material can be procured locally during Kharif
season while from other districts/states could be procured during lean season. There may
be difficulty in getting a contiguous plot of land, but sufficient quantity of water is
available. There will not be any problem for sewage disposal.
9.1.5

Mataur, Dist. Kangra

Kangra is one of the major maize growing districts of Himachal Pradesh. The district is
also adjacent to other major growing districts like Chamba, Mandi and Hamirpur. The
cultivation in the district is only under rain fed conditions. The district is connected with
Punjab by narrow gauge railway line and by national highway. Mataur has been identified
as an ideal location for setting up maize processing units. The raw material can be
procured from Chamba and adjoining areas of Punjab. Sufficient land is available but the
high cost is a limiting factor. Both, ground and surface waters are available in plenty.

9.2

Financial Viability

The economics of a minimum viable unit are given in given below. Various technoeconomic parameters for the model maize processing unit are assumed keeping in view
the existing situation and market conditions. The techno-economic parameters assumed
are given in Annexure V (a). Even though, the MSP for procurement of maize for this
year is Rs 525 / quintal, we have assumed an average price of Rs.500/- per quintal in
consideration of the situation prevailing in H.P, field data collected and also the variations
in MSP announced year to year. A unit is considered viable if its IRR works out to greater
than 15 per cent at 15 per cent discounting factor. Further, the unit is considered as
bankable if its DSCR is greater than 1.5.

Unit for manufacture of maize starch by wet milling method


Techno-economic Parameters
S.No.
1
2
3

Particulars
Project cost
Cost of land per acre (Rs. lakh)
Installed capacity (Raw material)
TPD
No. of working days
Working hours/day
Installed capacity (MT corn /annum)
Recovery

Assumptions
1432.01
30
100
300
24
30000

i
ii
iii
iv

Starch
Gluten (protein)
Germ
Husk

Capacity utilisation

Yr1
50%
(Rs/Kg)

Yr2
70%

Yr3
90%
(Rs/MT)

Cost of maize
Procurement expenses

1000

5000

Consumables (Sulphur, packing


material, chemicals etc.)
Price realisation
Starch
Gluten (protein)
Germ
Husk
Power Consumption
Power load (KVA)
Power factor

5
0.50%
Rs./ MT
350

8
i
ii
iii
iv
9
i
ii
iii
iv
10

60.00%
5.00%
10.00%
15.00%

(Rs./Kg)
10
12
14
4

(Rs./MT)
10000
12000
14000
4000

800
0.8

i
ii

Lakh units /year


Cost of power (Rs/unit)
Steam consumption
Steam requirement (MT/Hr)
Cost per MT

46.08
3.5

iii

Cost of Steam (Rs. lakh/ year)

11
12

Interest on term loan


Interest on W.C.

12%
14%

13

Depreciation on Civil Works


Plant and Machinery
Misc. fixed assets

5%
10%
5%

14

Wage rate

15

Insurance of fixed assets

2.50%

16

Selling expenses - Commission


Selling expenses - Freight

0.50%
0.50%

4
500
144

100

17
18

Repayment period
Grace period
Income tax

8
1
30%

Years

Unit for manufacture of maize starch by wet milling method


Project Outlay

Sr.No.

Particulars

Land (acre)

Rate/qty.

10

( Rs. in
lakh )
Amount

300

Land
development

20

Sub Total
Building and
Civil Structures

320
250

Plant and
machinery

769.65

Misc. fixed
Assets

34.25

Prelim & Preoperative


expenses

Margin money
for working
capital

2%

Remarks

27.48

30.63

Lump sum amount

Steeping tanks 4 Nos. of 100


MT capacity each, Silo
storage, unit and office
buildings etc.

Total project
cost
Margin
Money
Bank loan

1432.01
25%

358
1074.01

Unit for manufacture of maize starch by wet milling method

Details of Plant and Machinery


S.No.

Particulars

Rs. in lakh
Number

Rate

Total
value

5.5

11

3
1

5
7

15
7

6
1

2.5
80

15
80

6
7

S.S. Coarse Grinder (36 inches dia, 700


RPM, 50-250 MT/day)
Degerminator/Separator (3 stage)
Fine Grinder (36 inches dia, 700 RPM, 50250 MT/day)
DSM box for fibre washing (6 stage)
Centrifugal Separators (separation of
protein and starch)
Hydro clone starch washing (12 stage)
Gluten thickner

1
1

80
80

80
80

7
8
9
10
11
12
13
14

Hydrolic press for gluten


Gluten drier
Starch pulveriser & Drier
Germ drier
Boiler oil fired (8 tonne steam/Hr)
Effluent treatment plant
D.G. set (500 KVA)
Miscelleneous equipments

2
1
1
1
1
1
1

10
15
50
20
40
200
25

20
15
50
20
40
200
25
75

15

Erection & Commissioning

2
3
4
5

Grand total

LS
5%

36.65
769.65

Unit for manufacture of maize starch by wet milling method

Calculation of Depreciation ( WDV )


Sr. No.

Particulars

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

( Rs. in Lakh
)
Year 8

Civil
Structures

250

237.5

225.625

214.344

203.627

193.445

183.773

174.584

Depreciation

12.5

11.875

11.281

10.717

10.181

9.672

9.189

8.729

Depreciated
cost

225.625

214.344

203.627

193.445

183.773

174.584

Plant &
Machinery

769.65

692.685

623.417

561.075

504.967

454.471

409.024

368.121

Depreciation

76.965

69.269

62.342

56.107

50.497

45.447

40.902

36.812

Depreciated
cost

692.685

623.417

561.075

504.967

454.471

409.024

368.121

331.309

237.5

165.855

Miscelleneous
fixed assets

30.63

29.099

27.644

26.261

24.948

23.701

22.516

21.39

Depreciation

1.532

1.455

1.382

1.313

1.247

1.185

1.126

1.07

Depreciated
cost

29.099

27.644

26.261

24.948

23.701

22.516

21.39

20.321

Unit for manufacture of maize starch by wet milling method

Assessment of manpower requirement


S.No.

Type of manpower

Number
of
persons

Salary
(Rs./month)/
wages (Rs./
day

Total

Managerial

(i)

Managing Director

30000

360000

(ii)

Administrative officer

25000

300000

(iii)

Plant Manager

17000

612000

(iv)

Procurement manager

15000

180000

(v)

Marketing manager

15000

180000

B
(i)

Permanent/ skilled staff


Clerk/typist

7500

180000

(ii)
(iii)

Attendent
Plant operator/
electrician

2
4

4500
5000

108000
240000

(iv)

Section incharges

10

4500

540000

(v)

Store keeper

3000

108000

(vi)

Boiler operator

4500

216000

(vii)
(viii)

Drivers
Security guards

2
3

4000
3000

96000
108000

100

3228000
1200000

9.2.1

Sub-total
Unskilled casual labour

40

Installed capacity

A plant of 100 MT of wet milling maize crushing capacity per day is considered as a
minimum viable unit. A unit of this capacity will produce the following products.
Particulars

Installed capacity
MTPD
TPA
Maize (raw material) 100
30,000
Finished products
Starch
60
18,000
Germ
10
3,000
Gluten
5
1,500
Husk
15
4,500
Total
27,000

The plant will function 3 shift per day and 8 hour per shift. Keeping in view, the nature of
activity the capacity utilisation of 50%, 70% and 90%, during first, second and third year
onwards can be achieved easily.
9.2.2

Project Cost

The project cost for setting up of a 100 MT wet milling of maize per day has been
assessed at Rs. 14.32 crore is given above and summarised as under:
S. No. Particulars
1
Land and land development

Amount (Rs lakh)


320.00

2
3
4
5
6

Building and civil work


Plant and machinery
Misc. Fixed assets
Preoperative expenses
Margin money for W.C.
Total

250.00
769.65
34.25
27.48
30.63
1432.01

9.2.3 Working Capital Requirement

The working capital requirement of the unit will be very high and is estimated as under.
As the raw material is seasonal in nature, there will be high inventories. The farmers will
be required to be paid immediately, hence, the creditors of one week are assumed. Starch
is marketed through traders and it takes one month to realise the sale proceeds. Keeping,
this in view a debtors of 30 day period is assumed. The working capital requirement of
the unit is estimated at Rs. 2.64 crore, Rs. 3.69 crore and Rs. 4.74 crore, during the first,
second and third years, respectively.
Unit for manufacture of maize starch by wet milling method

Assessment of Working Capital Requirement


S.No.

1
2
3
4

Particulars

Raw material
stock
Work in process
Finished goods
Debtors
Total current
assets
Creditors
(current
liabilities)

Working capital
gap

Margin money
for W.C.

Bank loan

9.2.4. Financial Viability

Period (days)

( Rs. in lakh )
Yr1

Yr2

Yr3

30

75

105

135

4
30
30

12.95
97.09
97.09
282.12

18.06
135.44
135.44
393.95

23.17
173.8
173.8
505.77

17.5

24.5

31.5

264.62

369.45

474.27

66.1558

92.36212

118.5684

198.47

277.09

355.71

25%

The cash flow statement and financial indicators are given below.
Financial indicator
NPW
IRR
BCR
DSCR

Estimated
Rs. 912.64
34.21%
1.1
1.63

Requirements
Should be +ve
15%
Should be > 1.0
Should be > 1.5

Unit for manufacture of maize starch by wet milling method


( Rs. in
lakh )

Income and Expenditure


Statement
Sr.No

Particulars

Yr1

Yr2

Yr3

Yr4

Yr5

Yr6

Yr7

Yr8

I
1

INCOME
Installed
capacity (MT)
Maize (raw
material)
Starch
Gluten (protein)

30000

30000

30000

30000

30000

30000

30000

30000

18000
1500

18000
1500

18000
1500

18000
1500

18000
1500

18000
1500

18000
1500

18000
1500

Germ
Husk
Total
Capacity
utilisation (%)
Products (MT)

3000
4500
27000
50%

3000
4500
27000
70%

3000
4500
27000
90%

3000
4500
27000
90%

3000
4500
27000
90%

3000
4500
27000
90%

3000
4500
27000
90%

3000
4500
27000
90%

Maize (raw
material)
Starch
Gluten (protein)

15000

21000

27000

27000

27000

27000

27000

27000

9000
750

12600
1050

16200
1350

16200
1350

16200
1350

16200
1350

16200
1350

16200
1350

Germ
Husk
Total
INCOME
Starch
Gluten (protein)

1500
2250
13500

2100
3150
18900

2700
4050
24300

2700
4050
24300

2700
4050
24300

2700
4050
24300

2700
4050
24300

2700
4050
24300

900
90

1260
126

1620
162

1620
162

1620
162

1620
162

1620
162

1620
162

210
90

294
126

378
162

378
162

378
162

378
162

378
162

378
162

2
3

Germ
Husk

Income per
annum
(Rs.Lakh)

II

EXPENDITUR
E
Raw material
Procurement
expenses
Consumables
Power

1
2
3
4
5
6
7

Steam cost
Wages
Insurance of
building, plant
and machinery
and stocks

Repair and
maintenance
(building and
P&M)

Administrative
Expenditure
Salary
Printing &
Stationery
T.A. &
Conveyance
Misc Expenses
(Staff welfare,
office
maintnence,
books/ magzines
etc.)

Sub-total
10

1290

1806

2322

2322

2322

2322

2322

2322

750
3.75

1050
5.25

1350
6.75

1350
6.75

1350
6.75

1350
6.75

1350
6.75

1350
6.75

52.5
80.64

73.5
112.9

94.5
145.15

94.5
145.15

100.8
12
21.23

129.6
12
19.39

129.6
12
17.71

94.5
145.1
5
129.6
12
14.82

94.5
145.1
5
129.6
12
13.57

94.5
145.15

72
12
23.25

94.5
145.1
5
129.6
12
16.2

32.28
10

32.28
10

32.28
10

32.28
10

32.28
10

32.28
10

32.28
10

32.28
10

10

10

10

10

10

10

10

10

15

15

15

15

15

15

15

15

67.28

67.28

67.28

67.28

67.28

67.28

67.28

67.28

6.45

9.03

11.61

11.61

11.61

11.61

11.61

11.61

6.45
12.9

9.03
18.06

11.61
23.22

11.61
23.22

11.61
23.22

11.61
23.22

11.61
23.22

11.61
23.22

129.6
12
12.43

Selling &
Distribution
expenses
Commission on
sales
Frieght
Sub-total

Total
Expenditure

1074.3

1463

1851.9

1852.2

1850.
7

1849.
3

1848.
1

1846.93

Gross Surplus
( PBDIT )

215.68

342.99

470.11

469.78

471.3

472.6
8

473.9
3

475.069

Depreciation

12.5

11.875

11.281

10.717

10.18
1

9.672

9.189

8.729

Interest on Term
Loan
Interest on W.C.

128.88

128.88

110.47

92.058

38.792

49.799

49.799

Total interest

156.67

167.67

160.27

141.86

Profit after
Depreciation
and Interest

46.509

163.44

298.56

317.21

55.23
5
49.79
9
105.0
3
357.9
7

36.82
3
49.79
9
86.62
2
378.1
2

18.412

27.785

73.64
6
49.79
9
123.4
5
337.6
7

Tax

49.032

89.569

95.163

101.3

107.3
9

113.4
4

119.439

Profit after
Depreciation,
Interest and
Tax

46.509

114.41

208.99

222.05

236.3
7

250.5
8

264.6
8

278.691

Surplus
available for
Repayment

215.68

293.96

380.54

374.62

370

365.2
9

360.4
9

355.63

Debt Service
Coverage Ratio

Coverage
Available
Debt

215.68

293.96

380.54

374.62

370

282.31

263.9

245.49

Value
DSCR
Average DSCR

1
1.673
1.628

1
1.041

1
1.442

1
1.526

227.0
8
1
1.629

360.4
9
190.2
5
1
1.895

355.63

128.88

365.2
9
208.6
6
1
1.751

49.799
68.21
398.129

171.841
1
2.07

All the financial indicators meet the requirement, hence a wet milling unit of 100 TPD of maize
crushing capacity in Himachal Pradesh will be a viable unit as well as bankable.

9.2.5

Sensitivity and Risk Analysis


Keeping all variables constant, the critical factors like number of shifts per day and
installed capacity were subjected to sensitivity analysis. The results are given as under:
Critical Factors IRR (%)

DSCR

BEP, %
(at 90% capacity)

Shifts per day


3
34.21
2
16.26
1
-2.40
Installed capacity (MTPD)
100
34.21
76
15.10
50
-0.55

1.63
0.99
0.35

40
57
110

1.63
0.96
0.33

40
61
122

It can be observed from the above sensitivity analysis that the wet milling unit should run
round the year at 3 shifts per day basis. The project will be viable even at 2 shift per day
of operation but it will not be bankable. If unit operate at 1 shift per day only, it will be
unviable.
The installed capacity of a wet milling unit of 76 MT corn/day is viable; but the plant and
machinery are designed for 50 MTPD and 100 MTPD only, hence, minimum 100 MTPD
of maize crushing capacity unit is considered as viable unit.
9.2.6

Break Even Analysis


The break even analysis is given in. A wet milling unit of 100 MTPD maize crushing
capacity will break even at 40 per cent of capacity utilization during first year of
operation.
Unit for manufacture of maize starch by wet milling
method
( Rs. In
Lakh )

Break Even
Analysis
Sr. No.

Particulars

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Installed Capacity
( tonnes )

27000

27000

27000

27000

27000

27000

27000

27000

Capacity Utilised
( tonnes )

13500

18900

24300

24300

24300

24300

24300

24300

Sales Revenue

1290

1806

2322

2322

2322

2322

2322

2322

Variable Cost

Raw material

750

1050

1350

1350

1350

1350

1350

1350

Procurement
expenses
Consumables

3.75

5.25

6.75

6.75

6.75

6.75

6.75

6.75

52.5

73.5

94.5

94.5

94.5

94.5

94.5

94.5

Power
Steam cost

80.64
72

112.9
100.8

145.15
129.6

145.15
129.6

145.15
129.6

145.15
129.6

145.15
129.6

145.15
129.6

Wages
Selling &
Distribution
expenses
Total Variable
Cost

12
12.9

12
18.06

12
23.22

12
23.22

12
23.22

12
23.22

12
23.22

12
23.22

983.79

1372.5

1761.2

1761.2

1761.2

1761.2

1761.2

Insurance of
building, plant and
machinery and
stocks
Repair and
maintenance
(building and P&M)

23.25

21.23

19.39

17.71

16.2

14.82

13.57

12.43

Administrative
Expenditure
Total interest

67.28

67.28

67.28

67.28

67.28

67.28

67.28

67.28

156.67

167.67

160.27

141.86

123.44

105.03

86.62

68.21

247.2

258.18

250.93

232.85

212.92

193.13

173.47

153.92

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.07

0.07

0.07

0.07

0.07

0.07

0.07

0.07

0.02

0.02

0.02

0.02

0.02

0.02

0.02

0.02

1761.2

Fixed Cost

Total Fixed Cost


Sales Revenue per
MT
Variable Cost per
MT
Contribution per
Unit

9.2.7

Break Even Point (


MT )

10898

11256

10874

10090

9226.5

8369

7516.9

6669.7

Break Even Point (


%)

40%

42%

40%

37%

34%

31%

28%

25%

BEP ( Sales
Revenue )

1041.4

1075.6

1039

964.16

881.64

799.7

718.28

637.33

Margin of Safety

19.27
%

40.44
%

55.25
%

58.48
%

62.03
%

65.56
%

69.07
%

72.55%

Repayment period
The repayment period of a maize wet milling unit is given below. The bank loan can be
repaid with in a period of 8 years including 1 year grace period.
Unit for manufacture of maize starch by wet
milling method

Repayment
Schedule
( Rs. In
Lakh )

Years

Bank
Loan
O/S at
the

Rate of
Interest
Surplus
available

12.00%
Payment
of

Repayme
nt

Total
Outgo

Beginnin
g of the
year

for
Repayme
nt

Interest

of
Principal

1074.006

215.675

128.881

128.881

2
3
4
5
6
7
8

1074.006
920.577
767.147
613.718
460.288
306.859
153.429

293.956
380.544
374.62
369.998
365.286
360.494
355.63

128.881
110.469
92.058
73.646
55.235
36.823
18.412

153.429
153.429
153.429
153.429
153.429
153.429
153.429

282.31
263.899
245.487
227.076
208.664
190.252
171.841

Bank
Loan
O/S at
the

Surplus
available

End of
the
year

after
Repayme
nt

1074.00
6
920.577
767.147
613.718
460.288
306.859
153.429
0

86.795
11.646
116.645
129.133
142.922
156.622
170.242
183.789

Equal
Instalmen
ts

153.429

9.2.8

Risk Analysis

9.2.8.1 Subjective Risk Analysis

Raw material procurement risk during off season

Risk of natural calamity like drought etc.

Marketing of starch and other by products

9.2.8.2 Objective Risk Analysis

We have assumed a very conservative capacity utilisation of 50%, 70% and 90% during
first 3 years. The project has been subjected to objective risk analysis as per the risk
variables table as per given below. Simulations have been carried out over 200 iterations
and the results are enumerated in the risk analysis table as per the analysis given below. It
can be seen from the risk analysis that all the parameters i.e. IRR, BCR, NPV and DSCR
are not influenced much. The probability of negative outcome in respect of IRR is
2%, which indicate that the risk of project becoming unviable is quite low. The
sensitivity analysis in absolute terms has been carried out and the results are found to be
satisfactory. It can be concluded from the above that the project is not sensitive to
identified risk variables.

9.3

RISK ANALYSIS RESULTS

Wet milling of maize

Expected value
Standard deviation
Minimum
Maximum
Coefficient of variation
Probability of negative outcome

Average DSCR
1.425
0.399
0.54
2.565
0.28
0.00%

IRR
28.38%
11.90%
2.18%
64.52%
0.419
0.00%

BCR
1.066
0.058
0.943
1.247
0.055
0.00%

Financing Arrangement

The project can be financed by institutions like Commercial Banks, term lending
institutions like IDBI, ICICI Bank, etc. The bank loan @75 per cent of project cost can be
extended by the bank. The margin money as per the Reserve Bank of India/ NABARD

guidelines will be required to be brought in by the beneficiaries. At present, the margin


money requirement for such projects is 25 per cent of project cost. Various incentives and
subsidies are available for the industry, which are described in Chapter 12. The
economics have been worked out with out considering the subsidies and hence the
viability will improve further when such incentives are tapped. The subsidy/ incentives
from Central/ State Government available to the unit are mostly routed through the
financing banks which can be adjusted against the last installment of repayment as backended subsidy. NABARD provides refinance assistance to the eligible banks for
extending loans to such units. Since the project cost of wet milling process is quite
high, consortium arrangement of financing will be an alternative.
The unit requires high quantum of working capital and hence the bank may be required to
sanction separate working capital limit to the unit.

10.

POTENTIAL ASSESSMENT FOR MAIZE PROCESSING

Maize is one of the important Kharif crops of Himachal grown over an area of 3.0 lakh ha
with annual production of 6.0 lakh MT and market surplus of 4.0 lakh MT per annum. At
present, the processing of maize to value added products is negligible. It was one of the
staple foods for the local people but its consumption has declined over a period of time.
Increased income levels and the PDS support available for rice and wheat by Government
of India have led to the reduction of consumption of maize by local people and thereby
leaving a huge market surplus. This surplus is tapped at cheaper rates by the neighbouring
states, as stated earlier. This potential can be tapped locally for processing in to value
added products in the state itself. Though, there is a huge potential, it may not be possible
to process the entire surplus maize to value added products with in H.P immediately as
market development would take time. Keeping these factors in view, the following
processing potential is suggested as feasible for the state to plan.
Particulars
Market
surplus
(lakh MT)
Processing (%)
Raw material (MT)
Wet milling - units
of capacity 30,000
MT/ annum
Other units - 500
MT/annum
E = Existing, N = New

2005-06
4

2006-07
4

2007-08
4

2008-09
4

10
40,000
1

15
60,000
1

25
100,000
1E+1N=2

35
140,000
2E+1N=3

20

20 E + 40 N =60 E + 20 N = 80 80 E + 20 N =
60
100

In view of the above potential, the investment requirement for the next 4 year is given as under:

Investment
2005-06
requirement (Rs crore)
Wet
milling 14.32
@Rs.14.32 crore/unit
Other units
10.00
@Rs.50 lakh/unit
Total

24.32

2006-07

2007-08

2008-09 Total

14.32

14.32

42.96

20.00

10.00

10.00

50.00

20.00

24.32

24.32

92.96

0.00

In a period of 4 years, 3 wet milling units can come up easily with an investment of Rs.
42.96 crore for which suitable locations are suggested in the report. Small scale units for
manufacture of corn flakes, poultry and animal feed units, dry milling units for
manufacture of grits and other products can be set up in all maize growing areas which
will require an investment of Rs. 50 crore.

11.

SOCIAL AND ECONOMIC IMPACT OF THE PROJECT

11.1 Environmental Issues


In order to bring down the cost of production, the units in Maharashtra and Gujarat use
coal fired boilers for steam generation. Himachal Pradesh State Pollution Control Board
(HPPCB) does not permit the installation of coal based boilers. Hence, the companies
will require to install oil fired boilers for the units.
The starch manufacture by wet milling process uses sulphur dioxide (SO2) as preservative
during the steeping process. The three main pollutants which are released into the
atmosphere during the wet milling process are volatile organic compounds, sulphur
dioxide (SO2) and particulate matter. The SO2 is released during the process of initial
steeping process and evaporation. The emission levels of these pollutants by maize
processing industry are usually quite low.
However, to mitigate the hazardous pollutants, an Effluent Treatment Plant (ETP) is made
mandatory for maize processing industry by the Government of India.. The treated water
can be utilised for agricultural purposes within the permitted BOD level of 30 PPM.
Financial support in the form of capital subsidy is also available from Ministry of
Environment and Forests, Government of India for the purpose.

11.2 Economic Impact

Maize wet milling unit will have positive economic impact, as it will utilise its own raw
material to produce value added product. It will reduce the dependence on other states for
import of starch and other maize products. The farmers of the State will be benefited as
there will be a ready market for their main Kharif season crop. The units importing starch
from other states will get their raw material with in state at a lower rates.

11.3 Employment opportunities


The wet milling unit will create both direct and indirect employment opportunities. The
manpower requirement of the unit is given in Annexure V (g). The unit will create
employment opportunities for around 70 skilled and unskilled workers directly. The chain
go on increasing down the line in procurement and marketing. The indirect employment
opportunities around the unit is estimated as under:
S.
No.
1
2
3
4

Particulars

Man
days/Day

Procurement and transport of raw30


material
Handling and transport of finished30
goods
Marketing of finished goods
200
Business opportunities around the unit 20
Total
280

It can be observed from the above Table that the indirect employment generation is four
times of the direct employment opportunities.

12.
12.1.

INCENTIVES FOR MAIZE PROCESSING UNITS


Schemes of Ministry of Food Processing Industries, GOI.

12.1.1 Grant Assistance for Capital Investment


The Ministry of Food Processing Industries is the nodal agency for development of
processed food sector in the country. The ministry has been operating several plan
schemes for the development of food processing industry since the inception of 8th Five
Year Plan. The schemes envisage higher quantum of financial assistance to difficult
areas including Himachal Pradesh. Grant assistance @25 per cent of the capital
equipments and technical civil work upto Rs.50 lakh in general areas and 33.33 per cent
upto Rs.75 lakh in difficult areas including Himachal Pradesh is available from the MFPI
to units under private, public and joint sectors. Maize processing is one of the eligible
activities for support from Ministry of Food Processing Industries.

12.1.2.Scheme for strengthening of backward linkages in food


processing industries
The objective of the scheme is to increase capacity utilisation of fruits & vegetables
processing as well as grain and coarse grain, by ensuring regular supply of raw materials
through contract farming, ensure remunerative price to farmers by creating direct linkage
between farmer and processor; provide high quality seeds / fertilisers /pesticides and
planting materials to farmers along with technical know-how etc. through the processor.
Under this scheme, Joint / Assisted / Private Sector / NGOs / Cooperatives / PSUs are
eligible for grant in the form of reimbursement upto 10 per cent of the total purchases
made by processors in a given year, limited to Rs. 10 lakh per year for a maximum period
of five years.
The processing companies would be required to supply high quality seeds / fertilisers /
pesticides and technology to contracted farmers, along with necessary extension work at
reasonable charge. The group of contracted farmers should not be less than 25 in number.
12.2 Incentives to Industrial Units in Himachal Pradesh
Various incentives are being given to the industrial units in H.P as per the Industrial
Policy Guidelines and incentive Rules - 1999, Department of industries, Government of
Himachal Pradesh ( Annexure IX ). The package of incentives available to the fruit,
vegetable and maize processing industries consuming atleast 60 per cent of their total
consumption from local produce per annum and located in industrially backward areas
(except produce of breweries, distilleries, non-fruit/ vegetable wineries and bottling plant
both for country liquor and Indian Made foreign liquor), are eligible for the following
incentives.

Land/shed shall be allotted on out of turn basis at a nominal price /rent to be


determined by the Government from time to time. While considering
allotment, such unit(s) shall get precedence even over units in priority sector.
GST exemption for a period of 10 years will be admissible to new industrial
units.
The GST on the raw material, processing and packaging material except
timber, shale and limestone used by the existing and new industrial unit(s) for
captive manufacturing within the State shall be leviable at a concessional rate
of 1 per cent upto 31-03-2009.
Central Sales Tax at a concessional rate of 1 per cent shall be leviable on the
goods manufactured by new & existing industrial units upto 31-03-2009.
Such new industrial unit(s) shall be exempted from the payment of electricity
duty for a period of 10 years. No electricity duty shall be charged on the
power generated from D.G.set/ hydel plant.
Such new industrial unit(s) shall be exempted from the payment of State
excise duty for a period of 7 years.
Period of these concessions will be to new industrial unit(s) from the date of
commencement of commercial production or from the date of notification

13.

issued in this regard, whichever is later. In case of existing unit(s), these


concessions, as eligible, would be available from the appointed day or the date
of notification, whichever is later.
Such new industrial unit(s) shall be eligible for a subsidy of 10 per cent in the
rate of interest on term loan for a period of 6 years subject to a ceiling of
Rs.10.00 lakh p.a., provided that the unit pays a minimum of 6 per cent
interest after availing the interest subsidy. In case the rate of interest after a
subsidy of 10 per cent falls below 6 per cent, the rate of subsidy shall be
reduced accordingly. This subsidy shall not be admissible on
defaulted/rescheduled installment(s) and the period of default shall be counted
for determining the period of eligibility.
Such new industrial unit(s) will be entitled to an investment subsidy @ 25 per
cent on cost of plant and machinery installed subject to a ceiling of Rs. 25.00
lakh. The sanction/disbursement shall be governed by erstwhile C.I.S.
Manual.
Any new industrial unit(s) except breweries, distilleries, non-fruit/vegetable
based wineries and bottling plants (both for Country Liquor and Indian Made
Foreign Liquor) in the tribal areas of the State, as notified from time to time,
shall be exempted from payment of any State taxes and duties (excluding
levies in the shape of cess, fees, royalties etc.) for a period of 10 years from
the date of commencement of commercial production or the date of
notification by the concerned department(s), whichever is later. As regards
other incentives, unit(s) in these areas shall be treated at par with the unit(s) in
industrially backward areas.
The Government may also grant project specific special package to any new
medium and large scale industrial unit proposed to be set up in the State which
has potential for substantial employment generation, both direct and indirect,
ancillarisation etc. on case to case basis, in the public interest.

SUGGESTED ACTION PLAN


The following action plan is identified by the study to promote maize processing in
Himachal Pradesh.

1.

The study report may be given wide publicity by the State Government through
Industries Department. The report may be circulated to the entrepreneurs and they
may be invited to explore the possibility of setting up maize processing unit in
Himachal Pradesh

(Deptt. of Agriculture/ Industries, HP)

2.

The findings of the study may be discussed among bankers, officials from
Government Departments including Director of Industries, Research Institutes and
entrepreneurs in a workshop to draw a time bound action plan for future.

(Deptt. of Agriculture/ NABARD/ SLBC, HP)


3.

In order to promote contract farming to ensure supply of maize to the


proposed unit, the state government may consider to amend the State Agriculture
Produce Marketing Act to allow contract farming as legal practice as suggested by
Government of India.

(Deptt. of Agriculture, HP/ HPMB)


4.

State Government may consider providing land to the entrepreneurs at


concessional rate, either on lease basis or freehold, as land cost is prohibitive in
setting up of such units.

(Deptt. of Industries, HP)


5.

As maize starch is used by other industrial units, like pharmaceutical, textile


etc., a comprehensive development plan to promote such units along with maize
processing unit need to be drawn by State Government.

(Deptt. of Industries, HP)


6.

Identification of suitable Rabi season varieties or for extended Kharif season


varieties is needed to extend the cropping season. for Himachal Pradesh.
(HPKV Palampur / Deptt. of Agriculture)

7.

The maize processing units require large land area and the high cost of land
may act as a limiting factor. The lease rental charged by State Government ranged
between Rs.400 per sq.mtr. to Rs.1000 per sq. mtr. at different locations identified for
setting up of the maize processing unit. The State Government may consider
providing land at a concessional lease rental at an uniform rate in all locations in
Himachal Pradesh for maize processing units.

(Deptt. of Industries, HP)

DISCLAIMER

Annexure -I

District-wise area production and productivity of maize in H.P.


Area ('000 ha), Production ('000 MT) and Productivity (q/Ha)

S.

District

No.
1
Bilaspur
2

Chamba

Hamirpur

Kangra

Kinnaur

Kullu

Mandi

Shimla

Sirmour

10

Solan

11

Una

12

Lauhal
Spiti

State Total

Particulars 1993-94 1994- 2000-01 2001-02 2002-03 CAGR


95
(%)
A
24.730
26.571 26.169 26.739 0.211
P
52.758
58.992 68.662 38.768 2.081
PR
21.334
22.202 26.238 14.499 1.865
A
28.857
24.583 27.875 28.665 -0.569
P
94.106
61.721 82.352 56.269 -3.929
PR
32.611
25.107 29.543 19.630 -3.379
A
32.604
30.834 32.328 30.151 -0.290
P
60.873
63.176 72.840 46.147 1.191
PR
18.670
20.489 22.532 15.305 1.486
A
58.018
57.804 58.858 58.685 0.242
P
98.841
106.317 113.217 68.040 -0.149
PR
17.036
18.393 19.236 11.594 -0.390
A
0.470
0.383
0.387
0.338
-3.604
P
1.001
0.878
0.987
0.545
-3.605
PR
21.298
22.924 25.504 16.124 -0.001
A
15.877
16.669 16.738 16.862 0.256
P
31.257
53.213 54.340 16.260 -0.134
PR
19.687
31.923 32.465 9.643
-0.389
A
54.536
48.487 48.758 48.681 -0.593
P
128.194
135.122 151.635 101.153 -0.453
PR
23.506
27.868 31.100 20.779 0.141
A
20.305
16.017 15.224 13.642 -4.002
P
47.281
32.736 40.408 20.495 -5.042
PR
23.285
20.438 26.542 15.023 -1.084
A
25.682
24.026 23.398 23.062 -0.933
P
57.632
69.547 69.392 53.665 1.062
PR
22.441
28.947 29.657 23.270 2.014
A
25.739
24.421 24.406 23.778 -0.613
P
54.726
49.620 57.521 38.634 -1.059
PR
21.262
20.319 23.568 16.248 -0.449
A
27.691
28.219 27.372 26.372 -1.599
P
43.039
52.233 56.737 39.155 -0.496
PR
15.543
18.510 20.728 14.847 1.121
A
0.041
0.038
0.042
0.049
-12.348
P
0.087
0.087
0.107
0.079
-3.344
PR
21.220
22.895 25.476 16.122 10.272
A
314.550
298.052 301.555 297.024 -0.628
P
669.795
683.642 768.198 479.210 -0.624
PR
21.294
22.937 25.475 16.134 0.004

Average
26.212
47.817
18.283
27.602
74.394
26.900
31.708
55.342
17.446
57.813
92.753
16.040
0.408
0.863
21.152
16.513
37.829
23.008
48.862
129.715
26.591
17.524
37.927
21.546
24.630
64.425
26.209
24.425
51.440
21.055
29.397
52.620
17.926
0.086
0.135
19.300
305.180
645.258
21.144

A :- Area, P:- Production, PR:- Productivity


Source: Director Agriculture, Shimla, H.P.

Annexure

II

List of major starch manufacturing units in India

S. Name ofAddress
the unit
No
.

Telephone

Existing Units
1 Maize
P.O. Kathwada Maize+91-79Poducts Products, Ahmedabad ,
2871581
Gujarat - 382430
2 Saahil
NR. Shailesh Park, B/H+91-76organics L.D.
Engg.
Hostel
Polytechnic, Ahmedabad,6304572
Gujarat-380015
3 Anil
Anil Road, Post Box+91-79Products No.10009, Ahmedabad
220322
Gujarat - 380 025
ext.252
4 Riddhi
Viramgaon, Ahmedabad,
Siddhi
Gujarat
starch
5 Kashyap Vapi,
Ahmedabad,
sweetners Gujarat
6 Ambuja Heemat
Nagar,
proteins Ahmedabad, Gujarat
Ltd
7 The KisanMumbai-Agra
Road,+91-256Sahakari (Bladi-Nyahalod Fata),
Starch
Deopur,
Dhule,270235
Mfg, Soc.Maharashtra - 424005
Ltd.
(MS)
8 Universal Jay
Palace,
Hawai244235,
starch
Mahal, Maharana Pratap244236
Chemical Sinh Marg, Dadanagar,
Allied
Dodaicha, Maharashtra Ltd.
425 498, India
9 sahayadri Sangli, Maharashtra

Fax

+
79-

E-mail & Website

Capacity
(MT
corn/day
)

91-sales@maizeproducts.co 400
m

2873232
+ 91-76- saahil@ad1.vsnl.net.in 200
http://www.saahil.com/
6307108
+91-79- darshan@anilproducts.c 300
om
2200731
100
100
250
+91-256- md@kisan-starch.com 200
271232 www.kisan-starch.com

bapusheb@hotmail.com 400
www.universalstarch.co
m
200

starch
10 Yaswant
starch
11 Tirupathi
starch
12 Rajaram
Brothers

Sirola, Maharashtra

200

Indore, Madhya Pradesh

200

Mhow Neemuch Road,(7422)


(7422)
Mandsaur,
Madhya221135/36/43 223294
Pradesh - 458 001
/

150

440
13 Kashyap Ratlam, Madhya Pradesh
sweetners
14 Riddhi
Gogak, Near Balgaon,
Siddhi
Karnataka
starch
15 Devji
Kolapur, Maharashtra
Agro Pvt
Ltd
16 Sukhjeet Sarai road, Phagwara,260216
starch andPunjab-144001
chemical
Ltd
17 Rajaram Komal Niwas, Kailash(7744)
Maize
Nagar,
Rajnandgaon225207,
Products Chhatisgarh - 491 441 224825,
501013,
503213,
223561
18 Santosh 71,New cloth Market,91-7991-79starch
Ahmedabad-380007
2141933
2160874
products
Ltd
19 Jaychandr Mhatre pen building,B91-2291-22a
Agrowing,II
floor,senapati
Industries bapat
24362210/ 2430596
9
Pvt.Ltd marg,Dadar(west),Mumb
ai-400028
24363418
Sub-total
Proposed units
1 DSQ
Origin Agro Starch,Diversificatio
Biotech Kadhur, Tamil Nadu
n
from
tapioca starch
to
maize
starch
2 Basant
Sangli, Maharashtra
New unit
Dada Patil

100
300
50
100

150

100

100

3600

Makka
Prakariya
Karkhana
Ltd.

Annexure

III

Major consultants/ Supplier of Technology of Wet Milling of maize in India

S. Consultant/
Telephone
No Suppliers (Name &(Office)
.
Address)

Fax/e-mail

Type
of
service offered

26231877, 6460506, 6478010

Turn
projects

National
Research26419904,
Development
26417821,
Corporation
(A26480767,
Government of India26432627
Entreprise),20-22,
Zamroodhpur
Community Centre,
Kailash
Colony
Extension, New Delhi
- 110 048
www.nrdcindia.com
M/s
Halani
&22870474
Associate,
4-A,
Morlidhar
Society,
Odhav, Ahmedabad 382415
M/s Geeli Machinery22201602
Works, 3/A, Mona
Estate, Opp. Anil22865409
Starch Mills, Anil(R)
Road,
Ahmedabad
-380 025
M/s
Shirke
Structurals Pvt. Ltd.

key

info@nrdcindia.com

d_halani@yahoo.com

Consultant

22203992

Manu.
&
Exporters
of
Starch
machineries
and spares

info@geelidewatering.com

Construction of
Maize silo and
Tower cabin

72-76, Mundhwa,
5

Pune - 411 036.


M/s J.M. Engineers/25833674

Manu.

Starch

Engi Fab Industries

machinery

Plot No. 143 Phase I,


Behind New Post
Office, GIDC, Batha,
Ahmedabad - 382 445
Alfa Laval (India)56382270
Ltd.
(Mumbai)

dilip.gaikwad@alfalaval.com

Mumbai-Pune Road,
Dapoli Pune - 411
nitin.gaikwad@alfalaval.com
012
27127721 &
27127711
(Pune)

Homepage:

Turnkey
project
suppliers
centrifugal
separators
hydroclone
washing
systems
starch units

and
of
and
for

Mr. Dilip Gaikwad


www.alfalaval.com
7

Mr. Nitin Gaikwad


SPECTRUM
0265Engineering Pvt. Ltd. 2642641/
2642643
Makarpura
Station
Road,
Maneja,2644592/
Vadodara
390013,
Gujarat
2332633
Decon System

Tel

10, Sargam, Rambaug27120792


Col
27121641

Paud Road, Pune- 411


038
Water Treatment and
Effluent Treatment (I)
Pvt. Ltd. B-115, 1st
Floor, Sonal Palace,
Phadk Raod
Dombili (E), Thane
Maharashtra - 421
201

E-Mail:- spectoms@ad1.vsnl.net.in

Suppliers
of
Feed
milling
Internet://www.vigorsoft.com/spectoms plants
&
equipments,
Material
handing
&
Storage
Systems, etc.
27121641
Suppliers
of
bulk material
E Mail - deconsys@pn3.vsnl.net.in
handlng
systems
and
equipments
Manufacturer
of
water
treatment and
effluent
treatment plant

Annexure

-IV

District-wise group-wise details of units in Medium & Large Scale Sector

Total No./ Group

Solan

Sirmour Kangra

Una

Shimla

Bilaspur

Mandi/ Total
Kullu

1. Food Products

17

--

--

27

2. Beverages

--

--

--

3. Textile/Spinning 21

--

--

--

--

23

4. Chemical & 20
Chemical Products

--

--

--

28

5. Engineering

--

--

--

--

--

--

11

6. Non Metallic 2
Mineral Products

--

--

--

--

--

--

7. Electronics

23

--

--

--

--

29

8. Steel & Steel 21


Products

--

--

--

--

32

9. Paper & Paper 11


Products

--

--

--

18

10. Cement

--

--

--

--

11. Leather & 2


Leather Products

--

--

--

--

--

--

12. Ceramic

--

--

--

--

--

--

13. Plastic Products 7

--

--

--

--

--

Total

31

196

11

142

Details of Incentives available to Industrial Units in H.P


(Extract from Industrial Policy Guidelines and Incentive Rules -1999, Department of
Industries, Government of Himachal Pradesh)
1. General Rules

All existing and new industrial units subject to fulfillment of such


requirements as may be specified by the Directorate of Industries from time to
time.
Industrial units located in industrially developing areas and industrially
backward areas shall be eligible for incentives and concessions only if it
employs atleast sixty five percent and eighty percent of its total manpower
employment from amongst the bonafide Himachalis, respectively. However,
in the self -employed ventures where the owner is running the unit without
employing any manpower, employment condition shall not be applicable.
The unit should be registered under the registration scheme of Government of
India in case of Village Industry, tiny, SSSBE, Small and Ancillary unit and
acknowledged/ registered by the Director of Industries in case of unit in
medium and large scale sector.
The incentives are provided under the discretionary powers of the State
Government.

Allotment of Land

Land/shed in industrial areas/estates developed/ acquired and transferred to


the Department of Industries shall be allotted by the Department of Industries
on lease hold/rental basis for the establishment of industrial unit(s) at
subsidised premium/rent in industrially backward areas and reasonable
premium/ rent in industrially developing areas, to be fixed by a committee
consisting of Secretary Industries to the Government of H.P., Director of
Industries & M.D.,HPSIDC. Adequate land appropriately located may be set
apart for development of social infrastructure and public utilities such as
banks, post offices, educational institutions, medical institutions, recreational
facilities, shops etc on commercial basis. For the purpose of industrial housing
for workers, land can be provided at concessional rate. A separate set of
guidelines shall be issued by the Government for allotment of land for these
purposes. Land in industrial areas shall be allotted on lease hold basis by the
Director of Industries, or any other officer authorised by him/her, for a period
of 95 years subject to a maximum area of 10,000 sq.meters and in case of area
exceeding 10,000 sq.meters, the same shall be allotted with the prior approval
of the Secretary (Industries) to the government of Himachal Pradesh. 30% of
the premium of land shall be payable at the time of allotment and balance in 5
equal annual instalments. The interest chargeable on delayed payment would
be 18% or as fixed by the Government from time to time. However, if any
party intends to make the entire payment in lump sum it may be accepted by
commuting the instalments but the terms and conditions of the allotment shall
remain the same.
The application for allotment of plot(s)/ shed(s) for industrial purposes shall
be made to the concerned General Manager, District Industries Centre/
member Secretary, Single Window Agency on a prescribed form along with
earnest money in the shape of a bank draft. The earnest money shall be
equivalent to 10% of the premium of land in the case of plot and Rs.10,000 in

3.

case of built up shed, which shall be refundable within three months in the
event of non allotment of plot/shed.
The land/shed for industrial purposes shall be allotted by a committee
constituted for the purpose on first come first serve basis unless the committee
for reasons to be recorded in writing decides otherwise. However, land for
units in priority sector may be allotted on out of turn basis. The plot/shed will
be provisionally allotted for a period of two years and possession handed over
to the applicant after entering into an agreement to lease out/rent out. The
allottee shall take steps to set up the unit within the stipulated period of 2
years before a regular lease deed/rent deed is entered into between the
Department and the allottee.
In case an allottee fails to take effective steps for the setting up of the unit
within the stipulated period, the provisional allotment shall be canceled and
the possession of the plot/shed shall be resumed. The earnest money along
with premium /rent paid by the allottee shall be forfeited. The Director of
Industries may, however, if satisfied extend the period of the provisional
allotment on the merits of each case.
Any plot resumed in industrial areas of Paonta Sahib, Kala Amb, Chambaghat,
Baddi and Barotiwala shall be re-allotted through open auction/inviting bids
from general public for industrial purposes.

Sales Tax Concessions

Village Industries/Tiny units: New Village industries with fixed capital


investment upto Rs.10 lakh and financed wholly by HPKVIB/ KVIC shall be
exempted from payment of sales tax for a period of 8 years in industrially
backward areas and in priority sector, and for a period of 5 years for units in
industrially developing areas. In respect of other new village industries and
tiny units, sales tax shall be leviable at a concessional rate of 25% of the
applicable rate on the sale of products upto Rs.60.00 lakh per annum for a
period of 8 years in industrially backward areas & in priority sector; and up to
sales turn over of Rs. 45 lakh per annum for a period of 5 years in industrially
developing areas. This concession will not be admissible to the produce of
breweries/distilleries, non fruit/vegetable based wineries and bottling plants
(both for Country Liquor and Indian Made Foreign Liquor).
Units in SSI/Medium and Large Sector. In case of units in SSI/medium and
large sectors, deferment of General Sales Tax for a period of 8 years on the
goods other than produce of breweries, distilleries, non-fruit/vegetable based
wineries and bottling plants (both for Country Liquor and Indian Made
Foreign Liquor) manufactured by the new industrial units set up in the
industrially backward areas and in priority sector; and for a period of 5 years
for units in industrially developing areas subject to furnishing of security/bank
guarantee to the satisfaction of the Excise & Taxation Department of
Government of Himachal Pradesh. The tax deferment during first 8 years or 5
years as the case may be shall become due for payment after a period of 5
years from its collection. This means that the tax collected in the first year
shall be payable in the 6th year, second year in the 7th year and so on.

4.

Power Concessions

5.

The eligible existing units shall have an option either to opt for the General
Sales Tax Concessions as provided in above for the unexpired period and
subject to their continuing eligibility under the previously applicable rules or
to continue to avail these concessions as per those rules. Such an option shall
have to be exercised by the 31st July, 1999 failing which they shall be covered
by the previously applicable rules.
The GST on the raw material, processing and packaging material except
timber, shale and limestone used by the existing and new industrial unit(s) for
captive manufacturing within the State shall be leviable at a concessional rate
of 1% upto 31-03-2009.
Central Sales tax at a concessional rate of 1% shall be leviable on the goods
manufactured by new and existing industrial units except produce of
breweries, distilleries, non-fruit/vegetable wineries and bottling plant (both for
country liquor and Indian Made Foreign Liquor) upto 31-03-2009.
Period of these concessions in case of new industrial unit(s) shall commence
from the date of commencement of commercial production or from the date of
notification issued by the Department of Excise & Taxation in this regard,
whichever is later. In case of existing unit(s), these concessions would be
available from the appointed day or from the date of notification, whichever is
later.
New industrial unit(s) in priority sector shall be exempted from payment of
electricity duty for a period of 8 years in the industrially backward areas and
for 5 years in industrially developing areas. Period of this concession will
commence from the date of commencement of commercial production or from
the date of notification of Department of MPP and Power, whichever is later.
The existing unit(s) availing this incentive shall continue to avail the same
under the previous rules for the unexpired period of its/their eligibility.
The existing eligible units availing power tariff freeze subject to their
continuing eligibility under the previously applicable rules shall continue to
avail the concession as per those rules.
No electricity duty will be charged from any industrial unit, new or existing,
on the power generated from its captive power generation set(s)/ hydel
plant(s).
The industrial units employing atleast 50 workers may be permitted on case to
case basis to build residential complexes for industrial workers within the
campus. The rate of power tariff to such residential complexes both new and
existing shall be as applicable to domestic consumers

Interest Subsidy

Subsidy in the rate of interest on term loan taken by tiny and SSI units from
financial institution(s) shall be given @ 4% subject to a ceiling of Rs.2.00 lakh per
unit per year for priority sector units set up in industrially backward areas for a period
of 6 years provided that the unit pays a minimum of 8% interest after availing interest
subsidy. In case rate of interest after subsidy falls below 8%, the rate of subsidy shall
be reduced accordingly. This concession shall also be admissible on term loan taken

from financial institution for expansion/ diversification. The subsidy shall be


disbursed through the concerned financial institution. This subsidy shall not be
admissible on defaulted/rescheduled installment(s) and the period of default shall be
counted for determining the period of eligibility.

6.

The existing unit(s), availing this incentive irrespective of their status, shall have an
option either to opt for this concession under these rules for the unexpired period and
subject to their continuing eligibility under the previously applicable rules or to
continue to avail this concession as per those rules. Such an option shall have to be
exercised by 31st July, 1999 failing which they shall be covered by the previously
applicable rules.

Capital Investment Subsidy


Tiny units in priority sector and coming into commercial production after the appointed
date in industrially backward areas shall be given a capital investment subsidy @ 10% of
fixed capital investment subject to a ceiling of Rs.2.5 lakh per unit. This subsidy will be
admissible on the creation of new assets only. The sanction/ disbursement shall be
governed by the erstwhile C.I.S. Manual.

7.

Price Preference
The products of tiny/SSI units manufactured in H.P. may be given a price preference of
upto 15% in the process of finalisation of rate contract(s) in respect of purchases affected
by the Government Departments, Semi-Government Organisations, Corporations and
Boards. For large and medium industries, the price preference may be upto 3%.

8.

Subsidy on the cost of preparation of feasibility report


New industrial unit(s) in tiny and small scale sector will be eligible for subsidy on the
cost of preparation of feasibility report @ 50% of its cost subject to a ceiling of
Rs.10,000/- in case of tiny unit(s) and Rs.20,000/- for SSI unit(s).

9.

Facility for quality, productivity, technical upgradation & Pollution


control devices
Government may provide common effluent treatment plant(s)/ pollution control devices
and common testing facilities in Industrial Areas/ Estates/ Growth Centres or in a cluster
of industries as a part of infrastructure.

10.

Special Package of Incentives to Fruit, Vegetable and Maize Based units


The fruit, vegetable and maize based units consuming atleast 60% of their total
consumption from local produce per annum and located in industrially backward areas
(except produce of breweries, distilleries, non-fruit/ vegetable wineries and bottling plant
both for country liquor and Indian Made foreign liquor), shall be eligible for the
following incentives.

Land/shed shall be allotted on out of turn basis at a nominal price /rent to be


determined by the Government from time to time. While considering allotment, such
unit(s) shall get precedence even over units in priority sector.

GST exemption for a period of 10 years will be admissible to new industrial units.

11

The GST on the raw material, processing and packaging material except timber,
shale and limestone used by the existing and new industrial unit(s) for captive
manufacturing within the State shall be leviable at a concessional rate of 1% upto 3103-2009.

Central Sales Tax at a concessional rate of 1% shall be leviable on the goods


manufactured by new & existing industrial units upto 31-03-2009.

Such new industrial unit(s) shall be exempted from the payment of electricity duty
for a period of 10 years. No electricity duty shall be charged on the power generated
from D.G.set/ hydel plant.

Such new industrial unit(s) shall be exempted from the payment of State excise duty
for a period of 7 years.

Period of these concessions as provided in Rule 8.2 to 8.6 above will be available to
new industrial unit(s) from the date of commencement of commercial production or
from the date of notification issued in this regard, whichever is later. In case of
existing unit(s), these concessions, as eligible, would be available from the appointed
day or the date of notification, whichever is later.

Such new industrial unit(s) shall be eligible for a subsidy of 10% in the rate of
interest on term loan for a period of 6 years subject to a ceiling of Rs.10.00 lakh p.a.,
provided that the unit pays a minimum of 6% interest after availing the interest
subsidy. In case the rate of interest after a subsidy of 10% falls below 6%, the rate of
subsidy shall be reduced accordingly. This subsidy shall not be admissible on
defaulted/rescheduled installment(s) and the period of default shall be counted for
determining the period of eligibility.

Such new industrial unit(s) will be entitled to an investment subsidy @ 25% on cost
of plant and machinery installed subject to a ceiling of Rs. 25.00 lakh. The
sanction/disbursement shall be governed by erstwhile C.I.S. Manual.

The incentives of price preference and subsidy on the cost of preparation of


feasibility report as provided under rule 7.5 and 7.6 shall also be available to such
unit(s).

The existing units under this category, unless specifically provided otherwise, shall
continue to be governed by the previously applicable rules.

Incentives Available to Units in Tax Free Zone


Any new industrial unit(s) except breweries, distilleries, non-fruit/vegetable based
wineries and bottling plants (both for Country Liquor and Indian Made Foreign Liquor)
in the tribal areas of the State, as notified from time to time, shall be exempted from
payment of any State taxes and duties (excluding levies in the shape of cess, fees,
royalties etc.) for a period of 10 years from the date of commencement of commercial
production or the date of notification by the concerned department(s), whichever is later.
As regards other incentives, unit(s) in these areas shall be treated at par with the unit(s) in
industrially backward areas.
Note:- The quantum & duration of package of incentives, concessions & facilities to
various categories of units are given in Annexure-II to V to these Rules.

12.

Project Specific Special Package :


Notwithstanding anything contained thereinbefore, the Government may grant project
specific special package to any new medium and large industrial unit proposed to be set
up in the State which has potential for substantial employment generation, both direct and
indirect, ancillarisation etc. on case to case basis, in the public interest.