ale PROJECT PROFILE Name of Unit : M/s. PRADEEP GURUNATH AROLKAR Promoter : Mr. Pradeep Gurunath Arolker Product : Rice Mill (Polish & Steam Boiled Rice) Factory Location : Plot No.B-25-26/13, Kundaim Industrial Estate, (Proposed) Kundaim, Ponda, Goa Office : C-02, Poonam Apts, Kaziwada, Ponda,Goa — Production Capacity : 4000 M.T. Mob: : 9423812249 Email : arolkarp@yahoo.co.in PAN No. : AFKPA6713R. . Project Cost : Rs. 152.25 lakhs “ 1,0 INTRODUCTION Paddy or rice grain consists of husk and brown rice, Brown rice, in tum, contains bran Which comprises the outer layer and the edible portion. Rice milling is removal or separation of husk (de-husking) and bran to obtain the edible portion for consumption. The process has to be accomplished with care to prevent excessive breakage of the kernel and improve recovery of paddy or rice. The extent of recovery during milling depends on many factors like variety of paddy, degree of milling required, the quality of equipment used, the operators, etc. Rice mill is a common activity and can be started in many parts of the country and considering the leverage of production of paddy in Goa and neighboring states, and increasing demand for consumption rice in Goa due to influx of people for better prospects and livelihood, this project report considers Goa as the prospective location.ae 1.1 OVERVIEW The production of rice in India has grown substantially with coverage of area of 43 million hectares with an output of 110 million tones. The export of non-basamati rice by India is highest in 2015-16 amounting to with export of 6.37 million tones in 2016-17 In recent times Goa, is witnessing increase in production of paddy due to Govt. support for farming activities. The consumption of rice is also increasing on account of floating as well as regular influx of people from neighboring states who are mainly consumer of rice. Thus the farmers are likely to get attracted towards growing rice in the fields and thus a big leap is expected in production of rice in Goa. A bright future awaits to food processing industry and the rice mill is one of the major area of growth. L.MISSION / © To purchase the produce of paddy growing farmers of Goa at the best price. ©, To facilitate hardship of Goan farmers in curtailing the cumbersome process of boiled rice ie. boiling, drying, processing in huller thereby subjecting the farmers to hardships, time and low quality processed boiled rice. LP. To give best quality rice by using state of art modem machinery for processing. © To restore the confidence of Goan farmers in paddy farming lost due to lack of quality processing facility in Goa. © To curtail import of polished rice in Goa from neighboring states vis-d- joa economy. a make Goa hub for quality polished and boiled rice with brand Goa. _©. To engage locals and provide gainful employment. © To increase production with timely adoption of new technology in the processing area and provide best price for the produce of the farmers thereby increasing area under farming.ve 2.0 PROMOTER’S PROFILE: ‘The promoter is a 45 yrs. youth highly educated with degree in Commerce (B.Com) and Post Graduate degree in Personnel and Labor Management . He is presently employed in an renowned company having multiple responsibility in personnel and labor management as well as marketing. He is an upcoming entrepreneur having vision to be a successful business man to become self reliant and be an employer and provide employment to locals. His long experience in marketing and management will be quite useful in successful management of the enterprise. The product selection is based on the market survey , availability of raw material, marketing and good infrastructure. 3.0 PRODUCTS 3.1 Applications What comes out during milling operation are husk, milled rice or edible portion, bran and the broken rice. Depending upon the type of rice mill, the by-products come out in mixed or separated form. Milling is usually done when paddy is dry (around 14% moisture content). Wet soft grains are powered and very dry brittle grains would break. 3.2. Availability of technical know-how and Compliances. CFTRI (Central Food Technological Research Institute), Mysore, has successfully developed the technical know-how. Compliance under the PFA Act (Prevention of Food Adulteration) is compulsory.We 4.0 MARKET POTENTIAL Rice is considered to be staple food diet in most parts of India including the Western, East and North-East states. Paddy is the most important agricultural commodity in these zone and the total area under cultivation is estimated to be around 80% of the total cultiv: growing area. Apart from every household, there are many bulk buyers like hospitals, caterers, restaurants, hostels, etc. The establishment of single window shopping at malls, in rice departmental stores, wholesalers, etc will be explored for marketing of the products. With proper efforts, it is possible to enter into a long term contract with big traders or contractors. Besides, the support price for paddy from the Govt. make the price competitive compared to other staple commodity. Thus, there is more market due to its prices and easy and regular availability. Marketing will also be undertaken through modem methods of e-marketing. For the purpose acceptance and delivery of goods at door steps to the customers as value added service will be introduce to manage the business in line with modern trend. 5.0 MANUFACTURING PROCESS The process is very well standardized. First of all, paddy is cleaned to remove unwanted matters like mud, stones, chaff etc. This cleaned lot is then fed to de-husker where with the help of rubber roller, husk is separated. The brown rice is then taken to huller where polishing is done by mild friction created within the polishing chamber. The resulting polished rice and bran are separated and collected. Recovery of edible rice is around 80%. By-products consti- tute about 15% whereas balance 5% is waste and process loss. The process flow chart is as under:5 1 POLISHED RICE Cleaning of Paddy ‘Screening for removal foreign particles, mud, weeds, etc De-husking Polishing ‘Screening for quality rice separation Final product fine rice / broken rice Packing & dispatch BOILED RICE Cleaning of Paddy Screening for removal foreign particles, mud, weeds, etc Steam Boiling I Mechanized Drying | De-husking Polishing Screening for quality rice separation eee L Final product - fine boiled rice / Broken rice t Packing & dispatch of boiled rice & broken rice.% 6.0 CAPITAL INPUTS 6.1 Land and Building An open plot of around 1000 sq.mtrs. is sufficient to meet the working requirement. The promoter has acquired a plot of 900 m2 from Goa IDC at Kudaim Industgrial estate for an estimated cost of Rs.15.00 lakhs on which the built-up area of 450 sq.mtrs. costing around Rs. 65.00 lacs would be developed. ~/6.2 Plant And Machinery The minimum viable capacity has to be processing of 4000 tons per year on | shift working and around 250 working days. It is proposed to install latest version of modem milling machinery and equipment which yields enough production with quality products and whole rice with minimum wastage. The following equipment is need to be installed: (Rs. in lacs) Item 1.De-husking Machine with rubber Rollers of 10 inches 2-Polishing Machine 3.Huller 58.00 4.Boiler 5.Parra boiled rice de-husking m/c. 6.Others is 7.Erection & Installation 2.00 Total 60.00 6.3 Miscellaneous Assets A provision of Rs.2.00,000/- would be required towards furniture and fixtures, storage facilities, electrification, ete.6.4 Utilities Total power requirement will be 35 HP whereas water requirements are minimal upto 2 m3. Annual expenditure under this head at 100% activity level could be Rs.150,000/-. 6.5 Raw Material Paddy is the only raw material required. The input-output ratio is 10:0.80 and to that extent, the quantum of paddy would go up. Thus even at 100% utilisation, the requirement will not be more than 4000 tonnes per year. Looking to the production of paddy in Goa, Karnataka, ‘Andhra Pradesh, Telengana, the Rice paddy farming states, supplies should not be a problem. But it is advisable to have long term supply arrangements in place and sufficient stock. 6.6 Production of Paddy in Goa. Goa’s average kharif and rabbi production is around 182945 m.tons and is on an upward trend due to overwhelming support of Govt. and availability of mechanized farming equipment to farmers from Agriculture Dept. at a subsidized rate. The total production of paddy in Goa is processed locally using traditional method i.e. rice huller. In the absence of rice mill with modem machinery for polished and para boiled rice, the farmers are compelled to process boiled rice which has a limited market compared to polished rice. Thus establishment of modem rice mill for polished as well as boiled rice would attract attention of farmers and they will be able to grow and market polished rice and fetch good price which is otherwise imported in Goa from neighboring states..al& 8 7.0 Manpower Requirement P .)_ Total Monthly Salary (Rs) Factory Supervisor 1 12,000 12,000 Skilled Worker 2 9,000 18,000 Unskilled workers 6 6,000 36,000 Total 9 66,000 Service benefits @10% 6,600 72,600 8.0 TENTATIVE IMPLEMENTATION SCHEDULE i Period (in m Application and sanction of loan Commencement of civil work 05 Completion of civil work and placement of orders for machinery 10 Erection, installation and trial runs 15 Total peri 14.0 months 9.0 DETAILS OF THE PROPOSED PROJECT 9.1 Land and Building Land admeasuring about 900 sq.mtrs. with built-up area of 450 sq mtrs. will be adequate. The Tespective cost would be Rs. 16.50 lac and Rs. 60.00 lacs. Respectively. 9.2 Plant and Machinery A detailed list is furnished above. The total cost under this head is taken at Rs. 60.00 lacs.+ ‘equipment. 9.3 Miscellaneous Assets A provision of Rs.2,00,000/- is earmarked.ie 9.4 Preliminary & Pre-operative Expenses Expenses like registration and legal fees, administrative and other charges, interest during implementation ec, are taken at Rs. 1,00,000/-, 9.5 Working Capital Requirement Capacity utilization in the first year is assumed to be 60% of the total production capacity of 4000 M.Tons and at that level total working capital needs are likely to be Rs. 20.00 lacs for purchase of raw material and stock of finish goods and rs.10.00 lakhs for other expenditure aggregating to Rs.30.00 lakhs comprising of bank loan of Rs.18.25 lacs and margin of Rs. 11.75 lacs as worked out here under. Besides, the availability of paddy during the limited period of harvesting for Rabi and Kharif crop involves bulk purchase and stocking. Thus the need for working capital is assumed at an bulk estimate with sustained consumption throughout the year. (Rs. in lacs) iculars Period Tot nk Promo Stock of RMs 2Month 30% 10.00 7.00 3.00 Stock of Finished %Month 25% 10.00 7.50 2.50 Goods Receivables I Month 25% 5.00 3.75 —1.25 Other Expenses 1 Month 100% 5.00 = 5.00. Total 30.00 18.25 11.7510 9.6 Cost of the Project and Means of Financing (Rs. in lacs) Item Amount Land 16.50 Building 60.00% Plant and Machinery 60.00 Miscellaneous Assets 2.00 Pre-op & Preliminary Expenses 2.00 Contingencies on Building and Plant & Machinery Working Capital Margin 11.756. Total 152.25 Means of Finance Promoters' Contribution - 15% 2.83 Loan from Bank/FI 129.42 Total 152.25 Promoters’ Contribution - W.C. 25-30% (Avg) - TL 15% 10.0 PROFITABILITY CALCULATIONS 10.1 Production Capacity and Build-up. The processing capacity is taken at 4000 tons per year on single shift working of 8 hrs/day for 250 days in a year. As explained earlier, processing of 4000 tons would on an average yield 3200 tons of edible rice with 80% recovery. The capacity utilization in the first year is taken at 60% whereas second year onwards, it is assumed to be 70%. | how Jenni) aHIG uW 10.2 Sales Revenue at 70! (Rs. in lacs) Produet Qty. Sales Value (Tonnes) Rice 2240 492.80 Husk/Bran, etc. 560 22.40. Total 515.20 Selling price of rice would vary depending upon the quality of inputs. Product-mix may vary and hence an average selling price of Rs. 22,000/- per ton is assumed. Similarly, price of husk and bran is also taken at Rs. 5,000/- which would fluctuate in line with quality of inputs, processing techniques etc. as explained earlier. 10.3 Raw Materials Required at 70% Different qualities of paddy is grown in the state/neighbouring states and the mill would Procure and process suitable good paddy from time to time. The annual requirement at 70% capacity shall be 2800 tonnes. Considering average price of Rs. 12000/- per ton, the yearly cost would be Rs. 336.00 lacs. 10.4 Utilities ‘The annual expenditure under this head at 70% activity level is estimated to be Rs. 1,00,000/-. 10.5 Interest Interest on term loan/W.C of Rs. 129.42 lacs is calculated @ 13% assuming repayment in 11 years including a moratorium period of | year and computed during the period.feet gle 10.6 Depreciation It is computed on WDV basis and rates assumed are 5% on building and 10% on machinery and miscellaneous assets. 11.0 PROJECTED PROFITABILITY (Rs. in lacs) No. Particulars Ist Year 2nd Year A- Installed Capacity -— 3000 Tonnes(finish goods) —- Capacity Utilization 60% 10% % Sales Realization 446.40 515.20 B Cost of Production Raw Materials 288.00 336.00 Utilities 0.90 1.00 Salaries 37 9.58 Stores & Spares 0.50 0.55 Repairs & Maintenance 0.60 0.66 Selling Expenses @ 5% 21.00 2.87 Administrative Expenses 2.00 2.20 Total 321.71 372.86 3 C Profit before Interest & Depreciation 124.69 142.34 Interest Loan 16.82 15.26 Depreciation 9.40 8.63 Net Profit 98.47 118.45 Income-tax @ 20% 19.69 23.69 Profit after Tax 78.18 94.76 Cash Accruals 88.18 103.39 Repayment of Term Loan 7 097 (132 months)13 D__ Percentage of Profit 22% 1.1 ANALYSIS (Rs. in lacs) No Particulars Amount 1A] Sales 446.40 Bi Variable Costs Raw Materials 288.00 Utilities (40%) 0.36 Salaries (40%) 3.48 Stores & Spares, 0.20 Selling Expenses (40%) 8.40 Admn Expenses (40%) 0.80 Interest on WC 237 304.41 Ic] Contribution [A] - [B] 141.99 12.0 SWOT ANAYLYSIS. a. STRENGTHS © Staple food of 80% people in India and world. © Ideal location (GIDC) with good infrastructure © Promoter is qualified in the field of management and marketing and well experience of over 10 years. © Easy accessibility to raw material in Goa & neighboring States. o Easy availability of work force. © Support from Govt. to farmers and food processing industry from State and Central.eh He b. Weakness ‘© Competition from processors of neighboring states. © Availability of good quality paddy. © Long time storage of paddy and its exposure to pests & rodents. © Constant change in price of paddy. ©. Opportunities © Die hard habits of rice eating population in India vis-d-vis Goa. © Growing Consumers for Rice in Goa. g © Lack of polish rice milling facility in Goa and use of modem machinery for processing will attract local farmers. (© Parra boiled rice processing would saves energy and time of farmers who are following traditional methods of steaming of paddy and natural drying. © Health benefits of para boiled rice. 4. Threats © Seasonal availability of paddy is subject to price fluctuations © Improper storage facility and threat of attack from pests © Non Availability of Standard quality paddy in Goa. © Paddy rates are in wholesale market is controlled by few dealers in neighboring states. (Mr. Pradip Gurunath Arolkar)