4/17/2019 Dal Mill Project Business Plan Sample Checklist with Cost & Profit

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How to Start a Mini Dal Milling Business

Do you want to start a mini dal milling business? Are you searching for the dal mill business plan? This article includes a detailed
guide on how to start a dal mill business and sample project pro le with cost and pro t.

In India, dal milling is a pro table business. Depending on the production output, you can start this business at any size. Generally,
the large-scale operation ensures more pro tability. However, a mini dal mill also a nancially feasible business.

Di erent types of dals are the very important and essential food grains in India. Some of the most popular dals are Masoor, Green
Moong, Mung, Tur, Chana, Rajma, Urad, Lobia or black-eyed pea, Matar dal, Chickpea etc.

In our country, the dal milling is the third largest food processing industry after rice and wheat. Madhya Pradesh holds the rst
position in producing dal. The state accounts for 23% of total pulse production in the country. Other major pulses producing states
are Rajasthan, Maharashtra, Gujarat, Tamil Nadu, Odisha, Bihar and West Bengal.

The overall success and pro tability of a dal mill depend on the regular supply of raw materials. So, if you live in a dal producing
area where you can procure raw dal easily, you can start this business.

Step-by-step Guide for Starting a Dal Mill Project

Project Report Checklist

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In initiating the business, you must prepare the project report rst. A project report not only helps in getting the nance but also
helps in establishing the business properly without major mistakes. And you must talk to the professional industry experts for
preparing the report on behalf of you. And in that case, you will need to provide the su cient inputs to him or her.

First of all, you need to check whether you already have su cient space for establishing the plant or not. If you have your own
space then it is good, otherwise, you may think about getting the space on rent.

Secondly, determine whether you will start the project with your own capital or with bank nance. In the case of nance, you will
need to provide the collateral security to the banks.

Other important considerations are to determine the production quantity output and what speci c type of dal you will process.
Actually, the machinery price varies depending on these aspects.

Here in this article, we include a sample project report format to get some basic ideas.

Preparation of Dal Mill Project Report

Broadly, the project report has two major segments. One is the technical aspect and the other is the project economics.

Technical Aspects

Production Capacity: 159 kg/hr.

Number of Shifts: 2
Daily production capacity: 2.53 tonne
Capacity utilization: 70%
Working days per annum: 300
Annual Production: 6%
The loss during dehusking: 6%
Net Production: 500 tonne/annum

Infrastructure Requirement

Covered Area: 1000 Sq. ft.

Power requirement: 25 KW
Water: Minimal

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Project Economics

Fixed Capital (Rs. in lakh)

1. Land Own
2. Site Development = 0.45
3. Building (working shed 750 Sq.ft. = 4.87
4. Plant and Machinery = 1.84
5. Misc. Fixed Assets = 0.50
6. Preliminary/Pre-operative expenses = 0.30
Total = 7.96

Working Capital Requirement (Rs.in lakhs)

1. Raw material and Consumables 1 month = 9.23
2. Finished goods 1 week = 2.87
3. Working expenses 1 month = 0.42
4. Receivables 1 week = 2.93
Total = 15.45

Working Capital to be nanced as –

Margin Money = Rs. 3.86 lakh
Bank Finance = Rs 11.59 lakh

Term Loan(75%) = Rs. 5.97 lakh

Promoter’s Equity(25%) = Rs. 1.99 lakh
Total = Rs. 7.96 lakh

Cost of the Product & Pro t Percentage

A. Capacity Utilisation: 70%
B. Output (MT) : 500 MT/annum
C. Annual Revenue: Rs. 135.00 lakhs
The cost of various types of pulses varies. Hence, we have taken an average cost of Rs. 27,000 per tonne. The annual sales revenue
for 500 MT is estimated at Rs. 135 lakhs.

Return on Sales = 66%

Registration & Licensing

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Dal is a food grain item. So, initiating this type of project requires di erent types of registration and licensing. First of all, you will
need to register your business. If you want to operate the business as a proprietorship, then you only need a Trade License from
the local Municipal Authority. Otherwise, you can consider registering an LLP or Pvt. Ltd. or Ltd. company.

After registering, apply for MSME Udyog Aadhaar registration online. And then you will need FSSAI Registration and GST number.
This product doesn’t come under the BIS speci cation. Also, this type of factory operation doesn’t require any sort of NOC from
Pollution Control Board.

Finance Arrangement
This is one of the most important aspects. Depending on the project size, you will need to arrange the nance. Generally, banks
provide the loans. Otherwise, you can also consider the nance from rural cooperatives or venture capitalists.

On a macro level, this type of project requires two di erent types of investment. These are xed cost and working capital cost. If
you can arrange the xed capital, then it is better to apply for a cash credit or overdraft facility to a bank.

Location
The requirement of space depends on the total production output. You need to provide spaces for raw material storage, nished
goods storage, machinery operation and o ce operation. Also, you must have a toilet facility for the workers.

However, you need to select the location carefully, It is always better to select a location that has su cient distance from the
residential areas. If you establish the plant nearby residential places, your neighbors may feel disturbed.

Also, you must check the electricity and regular water availability at that speci c location. That space must have a wide entrance.
Also, check the nearby transport facility before selecting the space.

Dal Mill Machinery

1. Precleaner
2. De-huskers
3. Grader
4. Bucket Elevators
5. Aspirators and Blowers
6. Control Panels
7. Destoner
8. Pedal Mixer
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9. Packaging Unit

Actually, the total cost of plant and machinery varies depending on the capacity.

Raw Material for Dal Mill

The main raw material is di erent types of dal. Apart from that, you will need packaging consumables only. Generally, processed
dals are packed in 25 Kg bags for wholesale. For retailing, you can provide packaging in 1 Kg or 5 Kg max to max.

Dal Mill Technical Know How

If you are starting this business without any prior experience, then it is better to procure the technical know-how from Govt.
research centers. In India, CFTRI provides technical know-how and training both in exchange for fees. Here, you can check some
basic steps in manufacturing the pulses milling.

Basic processes in dal milling are cleaning, grading, conditioning, de-husking, splitting, and separation, polishing and bagging.
Major variation is involved with the de-husking process only. Sometimes you can use linseed oil during dry milling operation to
impart shine or better appeal to the milled dal.

The removal of the outer layer of husk and splitting the grain into two equal halves is known as milling of pulses. To facilitate de-
husking and splitting of pulses, you can use the alternate wetting and drying method.

Dal Mill Process Flow-chart

Pulses

Cleaning, cha s, dirt, etc.

Pitting

Pretreatment with Linseed Oil

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Conditioning

De-husking and splitting mixture of husk, small broken and powder

Grading

Polishing

Grade I pulses

Distribution
In our country, after preparing the goods, distribution is the most successful and proven way of marketing. In the initial days, you
can either send the nished packets to the retail counters or you can send the goods to the wholesalers. Currently, institutional
markets are also doing very good.

Also, you can consider keeping your products in the shopping malls and online marketplaces like Amazon. As your business grows,
you can consider several di erent ways to promote your dal mill business throughout the country.

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