Welcome to Technopreneur

Introduction

Bread is a fast and convenient food based on wheat. There are many varieties of bread depending upon the local demand like whole flour bread, brown bread, bread fortified with vitamins and minerals, milk bread and bread for diabetic patients. Its consumption is more in cities and towns where industrial working group population is more. Bread and biscuit consumption is increasing day by day and these are being increasingly used for various feeding programmes for children managed by voluntary agencies and State Departments of Health.

The raw material required for bread is wheat flour/ maida which is available in plenty in the country considering increase in wheat production from 26 million tonnes in early 1950 to 54 million tonnes as of today. The manufacture of bread is exclusively reserved for small scale sector.

Market Potential

With the changing socio-economic environment i.e. increased literacy rate (about 65%), higher per capita income, larger number of women going out for work to sustain family, higher living standards and increased tourist population, etc., one can expect atleast 5% growth rate in case of bakery products in coming years. According to an estimate, there are about 1 lakh SSI Units producing items worth Rs. 3000 crores annually. Our per capita consumption of bakery products is the lowest in the world i.e. 1.27 kg. whereas in advanced countries, it ranges from 50–70 kgs.

Keeping in view these facts, the manufacture of bakery products has substantial scope for development in smaller towns, villages and backward areas and can provide good number of employment opportunities at different levels.

Basis and Presumptions

(i) The scheme is based upon three shifts per day with installed capacity of 15000 loaves and 300 working days per annum.

(ii) The capacity utilization of plant is considered to be 70% with 3% overall wastages and other expenses. However, it will increase to 80% and 90% in 2nd and 3rd year respectively.

(iii) The construction of building and layout of plant is expected to meet the hygienic standards prevailing in other similar food processing Industries.

(iv) The yield of bread is about 910 numbers of breads (400gm.) taken from 280 kgs of Maida.

(v) The costs of machinery, raw material, finished product, salary, interest, etc. have been taken as prevailing in the market.

(vi) The water charges @ Rs 4.75/kl, include cost of pumping, processing and distribution of water.

Implementation Schedule

Sl. No.	Activity	Period (in Months)
1.	Arrangement of land, Registration, approval of loan and other formalities	2
2.	Site development, fencing and civil construction	1
3.	Machinery procurement	2
4.	Erection and commissioning	1
5.	Trial-cum-commercial production	1

Technical Aspects

Process of Manufacture

Dough is prepared by mixing all the ingredients together in the machine. The bowl is removed and mixing is done at intervals of 40 minutes. The mixed dough is fermented for two hours, knocked back and rested for 30 to 40 minutes. The dough is ready for dividing. The dividing is done as per the size of the loaf to be manufactured.

The divided dough pieces are panned and kept for final processing. When the dough attains a particular rising, they are baked for 40 minutes at 420ºF. Baked dough is cooled sufficiently, sliced and then wrapped.

Quality Control and Standards

The Bureau of Indian Standards has specifications for bread and the number is IS1483:1979.

Production Capacity (per annum)

Sl. No.	Item	Qty. (No.)	Value (Rs. in lakhs)
1.	Bread	45 lakhs	3,60,00,000

Motive Power

The approximate requirement for the unit of above capacity is 50KW.

Pollution Control

There is no major pollution problem in the manufacture of the above item.

Energy Conservation

Baking oven should be selected based on its performance of energy efficiency in terms of fuel/power because it involves high energy consuming process.

Financial Aspects
A. Fixed Capital

i ) Land & Building	Amount (Rs. in lakh)
1. Land 2000 sq mts @ Rs 3000 / sq mtr	60,00,000
2. Land Development, Fencing etc. Built-up Area	6,00,000
3. Factory Building, offices, laboratory, raw material storage, utility plant rooms, maintenance room etc, 1500 sq mts @ Rs 10,000 sq mtr Other Constructions	15,00,000
4. Misc. construction activity like road etc. in the factory premises	4,00,000
Total	85,00,000

ii) Machinery and Equipments

Sl. No.	Particulars	Indige-nous	Qty.	Amount (Rs. in lakh)
	1	2	3	4
	(a) Production Unit
1	Auto flour sifter with Ind. capacity to sift 2 bags per 5 minute complete with 0.373 KW motor and other accessories	Ind.	1	2,00,000
2	Raw water bore well, pump, piping process water with water measuring tank -do-(S.S.) capacity 1000 litres with all accessories	-do-	1	5,00,000
3	100 Kg capacity double -do-armed type dough kneader with 1.5 kW motor	-do-	2	7,00,000
4	M.S. extra tub	-do-	2	1,00,000
5	Single pocket slow speed -do-dough dividing complete with 1 KW motor	-do-	1	3,00,000
6	First prove rounder -do-table type with 0.746 KW motor	-do-	1	1,00,000
7	Conical umbrella type -do-rounder complete with 1.12 KW motor and suitable reducing gear box	-do-	1	3,00,000
8	Bread dough straight -do-through moulder with 1.5 KW geared motor and switches	-do-	1	3,00,000
9	Tunnel type final prover over all size 6' ×6' ×22' long double walled complete with recirculating fan (1HP) and with 1 HP automatic arrangement of mechanical pushing trollies through the tunnel	-do-	1	9,00,000
10	Proofing Racks-A set of 8 No. for final proofing	-do-	1	4,00,000
11	Oil, fired travelling type of oven having capacity of 1000 loaves charge having 1HP main drive motor, 3 HP recirculating fan, another 1 HP driven exhaust fan complete with medium pressure burner	-do-	1	12,00,000
12	Hot loaves collection table 6' diameter turntable having sunmica top driven by 1 HP motor		1	2,00,000
13	Slit conveyer for pan returned from oven to moulding area driven by 1 HP motor	-do-	1	4,00,000
14	Slicing machine output 500-600 loaves per hour with 0.746 KW motor	-do-	3	2,00,000
15	Wrapper sealing machine 8 simmer state 5 heaters 1.5 KW load	-do-	3	1,00,000
16	Bread cooling racks	-do-	8	2,00,000
17	Bread mould set of 3 Ind. pans with lid			2,00,000
18	Refrigerated cabinet for storing compressed yeast upto 200 kg capacity fitted with 1HP 3 phase motor	-do-		3,00,000
19	Coal fired baby boiler of capacity 200 kg Steam/hr complete with all fittings	-do-	1	4,00,000
20	6" cotton canvas conveyer driven by 0.37 KW motor	-do-	2	2,00,000
b)	Testing Equipment	-do-	L.S.	2,00,000
c)	D.G. set with electricals			6,00,000
d)	Energy Conservation Facilities/Equipment			Nil
e)	(1)Cost of power connection			2,00,000
	(2)Electrification and Installation charges @ 10% of the cost of machines and equipments			8,20,000
f)	Cost of Moulds/ Other Fixtures			2,00,000
g)	Cost of Office Equipments and Furniture, etc			5,00,000
Total				97,20,000
iii) Pre-operative Expenses				2,00,000
Total Fixed Capital i)+ii)+iii)				1,84,20,000

B. Working Capital (per month)

(i) Personnel

Sl. No.	Designation	No.	Salary	Total (Rs. in lakh)
1.	Manager	1	25,000	25,000
2.	Supervisor-cum-chemist	4	10,000	40,000
3.	Mechanical supervisor	1	7,000	7,000
4.	Finance and accountant	2		20,000
5.	Commercial staff	4		30,000
6.	Administration	2	6,000	12,000
7.	Skilled Workers	7	4,000	28,000
8.	Unskilled Workers	14	3,500	49,000
9.	Peon-cum-watchman	6	4,000	24,000
Total				2,35,000
Perks @ 22% of Salaries				52,000
Grand Total				2,87,000

(ii) Raw Materials

Particulars	Ind.	Qty. (tonnes)	Rate (per Kg.)	Amount (Rs. in lakh)
Flour	-do-	138	Rs. 8.50	11,73,000
Sugar	-do-	4.14	Rs. 18.50	76,000
Salt	-do-	2.1	Rs 5	11,000
Dry yeast	-do-	1.05	Rs 200	2,10,000
Chemical and additives	—	L.S.		1,00,000
Packaging materials	—	L.S.		3,00,000
Total				18,70,000
(iii) Utilities
Power		6000KWH	Rs 4/KWH	96,000
Fuel		L.S.		25,000
Water		—		5,000
				1,26,000

(iv) Other Contingent Expenses

Particulars	Amount (Rs. in lakh)
(i) Postage and Stationery	5,000
(ii) Telephone	10,000
(iii) Consumable stores	5,000
(iv) Repair and maintenance	17,000
(v) Transport charges	10,000
(vi) Advertisement sales and Publicity	30,000
(vii) Insurance	12,000
(viii)Taxes	-
(ix) Sales expenses	-
(x) Other Miscellaneous Expenses	20,000
Total	1,09,000

(v) Total Recurring Expenditure (per month)

(Rs 18,70,000 + 2,87,000 + 1,26,000 + 1,09,000) = 18,94,000

(vi) Working Capital for Bread Industry for one month-Recurring Expenditure = Rs 23,92,000

C. Total Capital Investment

	(Rs. in lakh)
(i) Fixed Capital	1,84,20,000
(ii) Working Capital	71,76,000
Total	2,55,96,000

Machinery Utilization

The baking of bread is considered to be bottleneck operations for achieving projected capacity and anticipated utilization of 90–95%.

Financial Analysis

(1) Cost of Production (per year)

S.No.	Particulars	Amount (Rs.)
(i)	Total recurring cost	2,87,04,000
(ii)	Depreciation on building @ 5%	1,25,000
(iii)	Depreciation on machinery and equipment @ 10%	9,02,000
(iv)	Depreciation on moulds and fixtures @ 25%	50,000
(v)	Depreciation on office equipment @ 20%	1,00,000
(vi)	Interest on total capital Investment @ 12%	30,72,000
	Total	3,29,53,000

(2) Turn over (per year)

Item	Qty.	Rate	Amount (Rs.)
Bread	45 lakhs	@Rs 8.0	3,60,00,000

(3) Net profit (per year) Rs. 3,60,00,000 -3,29,53,000 = (before income tax) Rs. 30,47,000

(4) Net Profit Ratio
		Net Profit per year × 100 ------------------------------
	=	Turn over per year

		3047000× 100
	=	---------------------
		3,60,00,000

	=	8.46%

(5) Rate of Return
		Net Profit per year × 100
	=	---------------------------
		Total Capital Investment

	=	11.9%

(6) Break-even Point

(i)	Fixed Cost	Amount (Rs.)
(a)	Depreciation (on machine and equipment,tools and fixtures and other equipment)	9,02,000
(b)	Depreciation on building	1,25,000
(c)	Interest on total investment	30,72,000
(d)	Insurance	1,44,000
(e)	40% of Salary	13,78,000
(f)	40% of Other Contingent Expenses	5,23,000
	Total	61,44,000

(ii) Net Profit (per year)		30,47,000
B.E.P.	=	Fixed Cost ×100 -----------------------
		Fixed Cost + Profit

	=	61,44,000 x 100 ------------------------
		61,44,000 + 30,47,000

	=	66.84%

Additional Information

For detailed technical information entrepreneurs may contact any SISI or Branch SISI located in the region.

Addresses of Machinery and Equipment Suppliers

1. M/s. Baker and Co. (P) Ltd.
Oomrigal Building,
Opp. Crawford Market,
Mumbai-400008

2. Nagpal Brothers (Regd.)
C-127, Phase-II,
Mayapuri Industrial Area,
New Delhi-110064
Ph. 25400407, 25402631

3. M/s. Mangal Engg. Works
Lahori Gate,
Patiala,
(Punjab)

4. M/s. J.SC. Dass and Bros.
33/8, Anath Nath Dev Lane,
Kolkata-700037

5. M/s. Ever Fresh Product
Ram Bagh,
Indore (M.P.)

6. M/s. New Engg. Industries
Firozpur Road,
Ludhiana.

7. M/s. Bijoy Engineers
Mini Industries, Arimpur,
Trichur - 680611 (Kerala)

8. Baker Enterprise
23, Behra Engg. Lane
Near Peeragarhi,
New Delhi - 110041

9. Flora Engg. Corp.
28-A, Phoolbag, Rampura,
New Delhi -110035
Phone: 25415335, 25411920.