Agro Food Products Pvt Ltd
Post on 07-Apr-2015
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Agro Food Products Private LtdBusiness Report
Mr. Somnath Tapare 33, 22nd main, 10 cross, J P nagar, Bangalore, Karnataka-560078 India. Phone no. (080), 26631073. Mob No 08050998297 email@example.com www.agrofoodproduct.com
Table of Contents1. 2. 3.
Executive summary. Organization background. Marketing plan.3.1 3.2
Pricing. Selling strategy.
Financial plan.4.1 4.2 4.3 4.4 4.5 4.6 4.7
Land & building. Machinery. Manpower requirement. Working capital requirement. Cost of project. Profitability calculation. Break even analysis.
Risk management plan.
Decision making criteria.
6.1 Breakeven analysis.
1. Executive summary: Agro food products private ltd is a manufacturing company and going to start production of jaggery from sugarcane(not traditional method). I am Mr. Somnath Tapare the owner of company. Sugar industry in India is a well-developed industry and one of the largest after textiles. It provides rural employment opportunities and plays an important role in Indian economy. Jaggery is also manufactured from sugarcane juice and is very widely used not only in individual households but also in many eateries, restaurants, clubs and hostels and it has certain industrial applications as well. Compared to this, production of jiggery is very simple and the capital cost is also very limited. Due to its wide applications, the Market for jaggery is continuously growing. We are investing Rs 12 laces in this project. In which, as a proprietor of company I (Mr. Somnath Tapare) would investing Rs 4 laces. i. e. 33% of total capital and remaining 67% will take from bank i. e. 7.5 laces.
We are making more than 10 different products. Those products we are selling in urban, rural areas. Basically few products like chocolate are going to sale in urban area. India has good market for chocolate and it is growing day by day. What chocolate we are making? It will not create a problem for teeth.
Number of employees: S.No . 1 2 3 4 Designation CEO At factory On field i.e. for cane cutting Drivers No of person 1 12 10 2
Annual sales figures: Companys crushing capacity would be 20 tons/day. Company will have been operated 180 days in a year. From 1 ton of cane, 90 to 100 kg jaggery will make. In one season is 325 to 350 tons.
Companys target of sales of jaggery is 350 tons per annum Key product lines: Jaggery is a typical Indian product with several uses in daily food preparations and it is also used to make many sweet food preparations. This is a product with scattered market. Companys concern is not only produce jaggery, but also chikki and so many other, jiggery related products. Now days people dont bother about prepare food, so company also will make powder of it. R & D has going on for, how to make chocolate, hot chocolate, drinking chocolate and I am successes in it.
2.1 R & D: on products Chocolate Jaggery Dry fruit Jaggery Jaggery Candy Jaggery Cubes Jaggery Lad doo Jaggery Powder Jaggery Sugar Jaggery Syrup Kolhapuri Jaggery (chemical less jaggery) Natural Jaggery
Location of facilities:
Project is located at near to sugarcane farm. Proprietor has 15 acre his own land. In which, every year almost 10 acre sugarcane we are growing. Project is in Maharashtra and Maharashtra is leading sugarcane grower. We are getting raw material i. e. sugarcane in only 1 km radius. Other all facilities are available at the place i.e. water, labor etc Company structure: Agro Food Products private limited is sole proprietor company. We register it with state government. Proprietor is Mr. Somnath Tapare, MBA(Finance). Marketing plan: The demand for jaggery is steadily growing many folds in the urban, rural and semi-urban areas. There are several applications of jaggery and almost all Indian households use it on day-to-day basis. Market for jaggery is round the year whereas its production is only during the sugarcane season and thus factory works for around 6 to 7 months every year. Apart from individual households, it is used in large quantities in restaurants, road-side dhabas, other eateries, hostels and clubs and by caterers. It has shelf-life of more than couple of months.3.
Its production is undertaken at several places but Maharashtra, Uttar Pradesh, Bihar and Tamil Nadu are the leading manufacturers. In view of constantly growing market, it should not be difficult for a new entrant to enter and capture the market a. pricing: Cost-plus pricing:
In this method, first calculate the cost of the product, then includes an additional amount to represent profit. This pricing method we use only for retailer Otherwise, at government market there is fixed price for one season, i. e. one year.
selling of product: We are going to sale at local government market. Also we are selling in local retailer, urban big retailer
Capital inputs: 4.1 land and building: Where project will start, that is my own The built up area requirement is estimated to be 500 sq.mtrs. and the rate of construction is taken at Rs.1000/sq.mtr. Since the roofing could be of steel sheets. The cost of construction would be Rs.5 lacs. Land cost Rs. 100/sq.mtrs Particulars Area in sq mtrs Cost in Rs Land 1000 100000
4.2 Machinery: This is a seasonal activity and the plant generally runs from October to March-April. To produce more than 350 tons of jaggery every season, following machines shall be required: S.no 1 2 Particulars Sugarcane Crusher complete roller size 216mm x 8.5" length crushing capacity 25 ton in 24 hours Diesel engine Lister type TOPLAND Amt(Rs) 120000 20000
3 4 5 6 7 8 9 10
15 HP Open Pan furnace- 4 no Foundation Frame for crusher. Counter shaft , pulley for crusher and engine Water Pump Misc. nut bolts. Laboratory Equipments- 1 set Strong Iron Scrappers with Long handle Tank 5000 lit capacity- 2 no Total
80000 1000 500 3500 500 5000 2000 20000 2,52,500
4.3 Manpower requirement (salary): Particulars Labors at factory Rs150/day/person Labor on field Rs200/day/person Total No 12 10 For 6 month Amt in Rs 1800/day 2000/day 3800/day 5,92,800
4.4 Working capital requirement: Raw material is on 2 months credit, cost of it is Rs 1700/ton This is a seasonal business and sugarcane is available on credit. Main requirement is for post-sales for which a lump sum provision of Rs.2 lacs is made comprising margin of Rs. 60,000/- and bank finance of Rs. 140,000/-. Preliminary & pre-operating expenses: Capital requires for registration of firm, interest during implementation of project @ 14% on amount Rs 7.5 lacs is Rs 10500.
4.5 Cost of project and means of financing: Particulars Land & building Machinery Preliminary & pre-operating expenses Contingencies @ 5% building & Amt in lacs 6 2.52500 1.2 0.37625
machinery(252500+500000)*.05 Working capital margin Total Means of finance Promoters contribution Loan from bank Total Debt-equity ratio Promoters contribution
0.6 11.00125 3.50125 7.5 11.00125 2.14:1 36%
Financial assistance in the form of grant is available from the Ministry of Food Processing Industries, Govt. of India, towards expenditure on technical civil works and plant and machinery for eligible projects subject to certain terms and conditions. There is no tax on production of jiggery, because of it is agriculture product and in India no tax on agriculture products
4.6 Profitability calculation: Production capacity and build up: The installed production capacity of jaggery making would be 350 tones during the season and capacity utilization
of 90% is envisaged during first year and thereafter it is restricted to 95% Sales revenue: Product Jiggery quantity 350 tons Selling price 28000/ ton Total value 98 lacs
Raw material requirement: Product Sugarcane Soda ash Ganny bags Quantity 3600 tons 300 Rate in Rs 1700 500 Total value in lacs 61.2 3 1.5 65.7
Depreciation: Depreciation on building has been worked out @ 10% p.a. The depreciation on plant and machinery as well as miscellaneous assets is assumed @ 20% per annum. The method applied is WDV. Projected profitability: 2nd year, raw material price will Rs 1800/ton.
In Rs lacs No A Particulars Installed Capacity Capacity Utilization Sales Realization Cost of Production Raw and Packing Materials Utilities Salaries Stores and Spares Repairs and Maintenance Selling Expenses Administrative Expenses Total Profit before Interest & Depreciation Interest on Term Loan@14% Interest on Working Capital(1 lac @ 17%) Depreciation Tax octroi @ 7% Total Net Profit Repayment term loan 1st yr 350 tons 90% 88.2 58.5 0.90 5.928 1 0.5 1.3 0.5 68.628 19.572 1.05 0.17 1 6.174 8.394 11.178 2nd yr 350 tons 95% 93.1 59.85 0.95 6 1.1 0.55 1.4 0.6 70.45 22.65 0.84 0.975 6.174 7.989 14.661 1.5
4.7 BREAK-EVEN POINT ANALYSIS: No A B Particulars Sales Variable Cost Raw and Packing Materials Utilities (75%) Salaries (75%) Stores and Spares Selling Expenses (20%) Administrative Expenses (20%) Interest on working capital Total Contribution Fixed Cost Break Even Point (DC) Amt Amt in lacs 88.2
58.5 0.675 4.446 0.01 0.26 0.1 0.17 64.161 24.039 8.5 35%
C D E
In this project only one risk is there, i.e. shortage of sugarcane. Because of less rain fall, crop of sugarcane will be damage. Another risk is co-operative sugar factories. They are big competitor.
5.1 Management of risk: Project is located at such place, where big dam is there, so we can get sugarcane, but we will have to pay more transportation cost. S