PROJECT REPORTON

Make a business plan“JAM Production”

Supervisor:

Prof. Ritesh Srivastava

Dept. of Accounting

IGSM, Greater Noida

Submitted By:

Abhishek shahi

Section B

Roll NO: FT-09-706

Your Health Is Our Responsibility

ACKNOWLEDGEMENT

With profound sense of gratitude and

regard, we express our sincere thanks to

our guide and mentor Prof. Ritesh

Srivastava, for his valuable guidance and

the confidence he instilled in us, that

helped us in the successful completion of

this project report. Without his help, this

project would have been a distant affair.

His through understanding of the subject

and the professional guidance was indeed

of immense help to us.

It is difficult to pinpoint when people first made a fruit spread. Ancient civilizations were known to set a variety of foods in the sun to dry in order to preserve them for later use. One of the first recorded mentions of jam making dates to the Crusades whose soldiers brought the process back from their journeys in the Middle East.

Preserving foods was a home-based operation until the nineteenth century. Even today, millions of people make fruit preserves in their own kitchens. Whether in a home kitchen or in a modern food processing plants, the procedure is essentially the same. Fruits are chopped and cooked with sugar and pectin until a gel is formed. The jam or jelly is then packed into sterilized jars.

Spoilage prevention is a major concern for both the home and the commercial jam producer. An important innovation in food preservation occurred in 1810. Nicolas Appert, a French confectioner, determined that by filling jars to the brim with food so that all air is expressed out and then placing the jars in boiling water would prevent spoilage.

In the early 1800s in the United States, the country was experiencing a surge westward. Of the many legendary characters to emerge during this period was John Chapman, better known as Johnny Appleseed. A nursery-man from western Pennsylvania, Chapman walked through the Midwest planting apple orchards. His purpose was to provide crops for the coming pioneers.

One of those pioneers was Jerome Smucker of Ohio who used Chapman's apples to open a cider mill in 1897. Within a few years, he was also making apple butter. Smucker blended the apple butter in a copper kettle over a wood stove. He and

his wife ladled the apple butter into stoneware crocks. She then sold it to other housewives near their home in Wayne County, Ohio.

Fifty years earlier in Concord, Massachusetts, Ephraim Wales Bull finally achieved his goal of cultivating the perfect grape. His rich-tasting Concord grape became enormously popular. In 1869, Dr. Thomas Branwell Welch used the Concord grape to launch his grape juice company. When, in 1918, Welch's company made its first jam product, Grapelade, the United States Army bought the entire inventory. The company's trademark Concord grape jelly debuted in 1923.

After World War II, food scientists developed the process of aseptic canning: heating the food and the jar or can separately. For sensitive foods such as fruits, this allowed for high-temperature flash cooking that preserved taste and nutritional value.

When sugar prices soared in the early 1970s, high fructose corn syrup (HFCS) became a popular substitute. Several major food processing companies, including Archer Daniels Midland, Amstar CPC International, Cargill, H.J. Heinz, and Anheuser Busch opened HCFS plants.

The industry got real fillip around1930 in India. The processing industry has been of great help in overcoming regional and seasonal gluts and scarcities, and in stabilizing prices. Also, fruits and vegetables produced anywhere can now be made available all over the world in or out of seasons.

Our vision:

To provide a healthy and nutritious breakfast to the young Indian generation, who is leading and taking in India ahead. Provide them the real taste and benefit of fresh fruits. Also provide them a breakfast which takes very less time in preparation.

Our mission:

To become a market leader in fruit processing industry by our innovative products, capturing the taste of young India and continuously providing a quality product.

Our Product:

We are going to launch a new low calorie breakfast spread. The spread is reportedly filled with fruit bits and is available in two combinations. It is supposed to be low on calories and does not contain any artificial preservatives.

Investment Potential in Fruit Processing

Since withdrawal of excise duty on fruit and vegetable products there has been significant rise in the growth rate of the industry. The sector has registered a production growth of 13% overall, exports have been increasing continuously. The total investment approved so far exceeds Rs. 4309 crores (US$ 1.19 billion), out of which foreign investment is Rs. 788 crores (US $ 218.8 million).

The consumption of Jam & Jelly and pickles is around 5 kg. & 2.0 kg. Annually considering an average family size of 6 numbers in urban household area.

The country’s share in the world trade of processed fruits is still less than one percent. As such, abundant investment opportunities are there in the expanding domestic market and export arena. An increasing acceptance of new products with market development efforts is seen.

Changes in export-import policies and exchange rate adjustments have helped improving the export potential.

There is a good international demand for certain fresh fruits as well as processed fruits products. Fresh fruits identified as having good export potential are : Mango, Banana, Lichee and exotics like Passion fruit, grown in this area.

Target population:

Targeted at teenagers and the health-conscious youth.

Market potentiality: -

Due to the job opportunities brought by MNCs which have been coming to India after liberalization there has been significant rise in Income of middle class Indians. Most of the people working in MNCs and other companies are young. The young generation is very conscious about their health. But they hardly find time to work on it because of their busy corporate life. They are very concerned about their breakfast. Breakfast is the most important meal for them. Because there is at least 15 hours break between their dinner and lunch and breakfast is only meal which comes in between. They need to start their work with full of energy and maintain it through out the day, so they want their breakfast to be healthy and nutritious. They do not prefer parathas and other traditional breakfast due to high calories.

Our fruit jam would be a perfect substitute for their traditional break fast. It will provide them nutrition and low calories. It is very less time consuming so it will be fit for their busy schedule. Our product will provide two values to them.

Marketing objectives:

To achieve and maintain market share. Our business will attempt to gain a maximum Market Share or a percentage of a market.

To increase our product line or to develop range of products.

To increase profitability and revenues.

To prevent losses and declining sales.

To favorably position a product. It is concerned with the way in which consumers view our products relative to competitors.

To create competitive advantage

Production target:-

Installed Capacity: 1, 20,000 units in a year.

Basis & presumption:-Single shift of 8 hours per day200 days per year

Raw Materials:

All required materials are indigenously available. The annual consumption of materials is as follows for proposed production capacity.

Fruits & Vegetables: 31.5 tonesSugar: 4.6 tonesCitric Acid: 0.012 tonesSalt: 0.05 tonesPectin: 0.003 tonesColors: 72 litersEdible oil: 0.36 tonesSodium Benzonate: 0.072 tonesKMS: 0.036 tonesEssence: 0.14 tonesMasala powder: 0.27 tones

Utilities:-

Power: 235 Kw.Water: 2000 KiloliterSteam: 40 Tones

The ManufacturingProcess

The ingredients must be added in carefully measured amounts. Ideally, they should be combined in the following manner: 1% pectin, 65% sugar, and an acid concentration of pH 3.1. Too much pectin will make the spread too hard, too much sugar will make it too sticky.

Inspection

1 When the fruit arrives at the plant, it is inspected for quality, using color, ripeness, and taste as guides. Fruit that passes inspection is loaded into a funnel-shaped hopper that carries the fruit into pipes for cleaning and crushing.

Cleaning, crushing, and chopping

2 As the fruit travels through the pipes, a gentle water spray clears away surface dirt. Depending on whether the finished product is to be jam or jelly, paddles push the fruit and or just its juice through small holes, leaving stems and any other excess debris behind. Some fruits, such as citrus and apples may be manually peeled, cored, sliced and diced. Cherries may be soaked and then pitted before being crushed.

Pasteurizing the fruit

3 The fruit and/or juice continue through another set of pipes to cooking vats. Here, it is heated to just below the boiling point (212° F [100° C]) and then immediately chilled to just below freezing (32° F [0° C]). This process, pasteurization, prevents spoilage. For jelly, the pulp is forced through another set of small openings that holds back seeds and skin. It will often then be passed through a dejuicer or filter. The juice or fruit is transferred to large refrigerated tanks and then pumped to cooking kettles as needed.

Cooking the jam and jelly

5 Premeasured amounts of fruit and/or juice, sugar, and pectin are blended in industrial cooking kettles. The mixtures are usually cooked and cooled three times. If additional flavorings are to be included, they are added at this point. When the mixture reaches the predetermined thickness and sweetness, it is pumped to filling machines.

Filling the jars

6 Presterilized jars move along a conveyer belt as spouts positioned above pour premeasured amounts of jam or jelly into them.

When the fruit arrives at the plant, it is inspected for quality, using color, ripeness, and taste as guides. Fruit that passes inspection is cleaned, crushed, and pasteurized. Next, the premeasured mixture is cooked with added sugar and pectin until it reaches the appropriate thickness and taste. Then it is vacuum-packed in jars and labeled.

Metal caps are then vacuumed sealed on top. The process of filling the jars and vacuum packing them forces all of the air out of the jars further insuring the sterility of the product.

Labeling and packaging

7 The sealed jars are conveyed to a machine that affixes preprinted labels. According to law, these labels must list truthful and specific information about the contents. The jars are then packed into cartons for shipment. Depending on the size of the producer's operation, labeling and packaging is either achieved mechanically or manually.

Cost Sheet

ParticularsTotal Cost (1,20,000 units) Cost Per Unit

Material 15,63,400 13.02/-

Labor 27,20,000 22.66/-

Prime Cost 42,83,400 35.695/-

Factory Exp. 3,60,000 3.00/-

Factory Cost 46,43,400 38.695/-

Office Exp. 7,20,000 6.00/-

Office Cost(cost of production) 53,23,400 44.695/-

Selling and distribution cost

2,40,000 2.00/-

Cost of sales 56,03,400 46.695/-

Profit(33.33% of cost) 18,67,613 15.56/-

Sales 74,71,013/- 62.25/-

(a) Consumption of Raw Materials :

Sl.No. Items Qty. Rate Total Cost1. Fruit & Vegetables 31.5 ton 40/- per Kg. 12, 60,000.002. Sugar 4.6 ton 25/- per kg. 1, 15,000.003. Citric Acid 0.012 ton 500/- per kg. 6,000.004. Salt 0.05 ton 8/- per kg 400.005. Pectin 1 ton 1000/- per kg. 10,000.006. Colors 72 liters 500/- per lt. 36,000.007. Edible oil 0.36 ton 50/- per lt. 18000.008. Sodium Benzoate 0.072 ton 250/- per lt. 18,000.009. KMS 0.036 500/- per lt. 18,000.0010. Essence 0.10 ton 1000/- per lt. 1, 00,000.00

(b) Manpower:

Particulars Nos. Rate (P/M) Amount (P/Y)i) Supervisor 2 20,000/- 4, 80,000.00ii) Skill Worker 10 12,000/- 14, 40,000.00iii) Semi Skill Worker 10 8,000/- 8, 00,000.00 Total 27, 20,000.00

(d) Overhead:i) Printing & Stationary 10,000.00ii) Advertisement 7, 00,000.00iii) Internal travels 10,000.00 Total 7, 20,000.00

(b) Utilities:

i) LPG Gas Cylinder 1000 350/- 3, 50,000.00

MMARKETARKET STRENGTHSSTRENGTHS, , WEAKNESSESWEAKNESSES, , OPPORTUNITIESOPPORTUNITIES ANDAND THREATSTHREATS, , OFOF THETHE VENTUREVENTURE

Strengths:

With new product in the market, this helps the company to be market leader in terms of sales and market share.

Further this will help the company to established brand loyalty and the strong company identity.

The new low calorie product has unique quality which will provide value to the customers.

This will provide breakfast solution to consumers.

Weakness:

No experience; as this product is introduced for the first time in Pakistan

Opportunities:

1. Being an innovative product there is a hope that consumers will welcome then warmly.

2. Expansion into newer markets as per demand increases and market. 3. We will able to capture new market segment.

Threats:

Similar new products may penetrate. Imported products will also enter the market. Competitors can lower their prices. Competitors can add some value to their product. Competitors can speed up their promotions.

Comparative Cost Analysis

We are comparing our cost with another existing brand with same product Kissan fruit jam. Kissan fruit jam is a well established brand in Indian market. It has been marketed by HUL which is the biggest FMCG Company in India. Kissan fruit jam is capturing most of the market.

Competitive Edge to Our Product:

1. Our product has come up with new idea which Kissan has not thought of. Our product will attract consumers mind because of the health factor in it.

2. Our product is Rs.20 less than Kissan fruit jam. Consumers will attract towards it because of the price factor also.

3. Because of the use of good nutrition in it consumer will prefer it as their breakfast.

Threats:

1. Existing product has profit of big production so they can curtail their prices easily.

2. HUL has the most strong distribution network so we will have difficulties in covering the market.

3. There is a possibility that our product would not accepted by consumers.

Conclusion

Finally we are ready to launch our new product. To estimate its cost on every head we prepared the cost sheet. Cost sheet helped in cost cutting and knowing what is per unit cost. Cost sheet is very helpful in deciding the profit and finally the sales price. Through cost sheet along with the per unit material and labor cost we also know about per unit factory, office and selling cost which is very essential to know and we can not figure out these cost without the help of cost sheet.

If we are going to launch our new product in market we should prepare cost sheet before it.