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Product Code	:	219201005
Quality and Standards	:	Mandatory : PFA Act, 1954 Optional : ISI/Agmark
Production Capacity	:	Qty. : 1.92,00,000 Kg. Per annum Value : Rs. 3,69,10,000 per annum
Uploaded on	:	March 2007

Introduction

Spices play an important role in enhancing the flavour and taste of the processed foods. They are also used in the medicines because of their carminative, stimulative and digestive properties. India produces almost all the known spices and is the largest exporter of this commodity. Ground spices are extensively used in all types of curried dishes in India and abroad.

Although spices are traded chiefly in an unprocessed form, a small yet significant quantity enters international trade as spice powders. Curry powder is the foremost of those blends or mixes and sometimes consists of 20 or more spices designed to add the characteristic flavour of an Indian curry, which is appreciated all over the world. Apart from the overseas market, processed curry powder is becoming popular in the domestic market also. Hence the demand for unadulterated spices and curry powder in attractive handy packaging, is fast emerging.

Market Potential

India is one of the leadings exporters of spices. The export earnings from spices can be increased quite considerably if the export of spices is encouraged in processed form, which will bring more value addition to the unit price of whole spices. Further as it is a mass consumption item mostly used in culinary preparations or seasoning of food products, its domestic demand is increasing quite steadily due to improvement in purchasing power of people.

Basis and Presumptions

i) The scheme is based on two shifts per day of 8 hrs. each and 300 working days per annum.

ii) The rate of interest on total capital investment is taken as 12%.

iii) The break-even point has been calculated on full capacity utilization basis.

iv) The proposed project is made on purchased land and constructed factory premises.

v) For this industry, working capital has been considered for 03 months.

vi) The cost of machinery and equipments refers to a particular brand and the prices are approximate.

vii ) The provision made for raw materials, personnel, utilities and other expenses are based on standard operations and average output and costs are approximate. They are based on the local market conditions.

Implementation Schedule

Sl. No. Activity Duration

1. Preparation of project report, selection of site, registration as SSI unit 1 month

2. Availability of finance, selection of machinery and procurement of machinery 2-3 months

3. Erection and commissioning 3-4 months

4. Recruitment of labour and commercial production 3-4 months

5. Trial run 4-5 months

6. Commencement of production 6th month onwards

Technical Aspects

Process of Manufacture

The process of manufacture involves cleaning, drying, pulverizing, sieving and packing of spices such as chilli, pepper, tur meric, coriander etc. either individually or in combination with other spices. There are various formulations for curry powder, but the ingredients like red chilli, black pepper, cloves, coriander seed, cumin seed, fenugreek seed, ginger and turmeric are typically common. The proportion and the inclusion of spices in a particular mix depends upon individual manufacturers.

Quality Control and Standards

The following ISI specifications are available for ground spices:

i) Black pepper whole and ground IS:1778:1982

ii) Chilli powder IS:2445:1984

iii) Coriander powder IS:2444:1980

iv) Curry powder IS:1909:1961

v) Turmeric powder IS:2446:1980

vi) Method of sampling and test of spices and condiments IS:1797:1973

vii) Technology for spices and condiments IS:1877:1973

viii) Method of test for spices and condiments IS:1797:1985

Provisions have also been made in the scheme for a testing laboratory so that the unit will be able to test their products and maintain the quality as per PFA Act and 'Agmark' standards.

Production Capacity

Qty. : 192 Mt .per annum

Value : Rs.3,69,10,000 per month

Motive Power 75 HP

Pollution Control

There is no major pollution problem associated in the setting up of this type of industry. However, entrepreneur should seek guidance from concerned State Pollution Control Board in this regard.

Energy Conservation

Although the energy requirement is small, adequate care should be taken in electrical installations and optimal utilization of machinery.

Financial Aspects
A. Fixed Capital

(i) Land and Building

a ) Land:
500 Sq. mtr @ 3500 / Sq. Mtr Value:
b) Civil Construction
i) Boundary wall and gates and roads Value :
ii) Buildings construction
Factory shed, raw material and finished goods store, DG set, Bore well and water distribution, workers room, laboratory, security room and offices for staff and management. 400 Sq. mtr @ Rs. 9000 per Sq. Mtr. Value :
Total civil construction (i) + (ii) Value:
Total Land and building = (a) + (b) Value :

Rs. 17,50,000

Rs. 6,00,000

Rs. 36,00,000

Rs. 42,00,000

Ra. 59,50,000

ii) Machinery and Equipments

Sl. No. Description Qty. Rate
(In Rs.) Total
(In Rs.)

1 Micro pulveriser with 5 HP motor 2 2,50,000
5,00,000

2. Disintegrator with 7.5 HP 1 3,00,000
3,00,000

3 Hot air drier cabinet type electrically operated with temp. control device 2,50,000
2,50,000

4 Platform weighing scale capacity 300 Kg 1 50,000
50,000

5 Counter scale balance upto 5 kg 1 20,000
20,000

6 Sieving machine (locally fabricated) 2 25,000
25,000

7 Heat sealers for plastic bags electrically operated and form fill seal machine
3,50,000

8 Bore well and water distribution system, DG set and electrical cables etc.
10,00,000

Testing equipments LS 5,00,000
5,00,000

Office furniture and other equipments LS 5,00,000
5,00,000

Excise, sales tax, electrification and installation charges @ 40% cost of machinery and equipment
13,98,000

Total

48,93,000

(iii) Pre-operative Expenses
2,00,000

Total Fixed Capital (i) +(ii) + (iii)

1,10,43,000

B. Working Capital (per month)
(i) Personnel

Sl. No. Designation No. Salary Total
(in Rs.)

i) Factory Manager, shift supervisors, lab chemists 6
80,000

ii) Sales and marketing personnel, purchase and store, accounts and finance personnel 8
1,20,000

iii) Skilled & unskilled Workers 16
60,000

iv) Security and peons 6
20,000

Total

2,80,000

ii) Raw Materials including Packaging Requirements

Sl. No Particulars Qty.(Rs) Rate Rs/kg Amount
(In Rs.)

i) Chilli 6,000 100
6,00,000

ii) Turmeric 3,000 50
1,50,000

iii) Coriander 3,000 60
1,80,000

iv) Pepper 2,000 300
6,00,000

v) Ginger 2,000 100
2,00,000

vi) Packaging materials cartons, etc. LS C
3,00,000

Total

20,30,000

(iii) Utilities
Amount (In Rs.)

i) Electricity = 75 x 0.75 x 16 x 25 x 4
90,000

ii) Water Charges
5,000

Total

95,000

iv) Other Contingent Expenses
Amount (In Rs.)

i) Misc. expenses
30,000

ii) Postage and stationery
5,000

iii) Repair and maintenance
12,000

iv) Transportation charges
30,000

v) Advertisement and publicity
1,00,000

(vi) Insurance
8,000

Total

1,85,000

v) Total Recurring Expenditure (per month)
Amount (In Rs.)

i) Raw materials
20,30,000

ii) Personnel
2,80,000

iii) Utilities
95,000

iv) Contingent expenses
1,85,000

Total

25,90,000

C. Total Capital Investment

Amount (In Rs.)

(i) Fixed Capital 1,10,43,000

(ii) Working capital for 3 month 77,70,000

Total
1,88,13,000

Financial Analysis

i) Cost of Production (per year)
Amount (In Rs.)

(a) Total recurring cost/year
3,10,80,000

(b) Depreciation on machinery and equipment @ 10%
4,39,000

(c) Depreciation on Office Furniture @ 20%
1,00,000

(d) Interest on total capital investment @ 12%
22,58,000

Depreciation on civil construction @ 5%

2,10,000

Total

3,40,87,000

ii) Turnover (per year)

Item Qty. ( P.A.) Rate (Rs./kg)
Total (In Rs.)

Chilli powder 72000 Kg 169.67
1,22,18,000

Turmeric powder 36000 Kg 95.47
34,37,000

Coriander powder 36000 Kg 95.47
34,37,000

Pepper powder 24000 Kg 530
1,27,28,000

Ginger powder 24000 Kg 212
50,90,000

Total

3,69,10,000

Turnover (per year) = Rs. 3,69,10,000

(iii) Net Profit (per year Before Tax)

= Rs. 3,69,10,000 - 3,40,87,000
Rs. 28,23,000

(iv) Net Profit Ratio = 7.6%

(v) Rate of Return = 15%

(vi) Break-even Point

i) Fixed Cost
Amount
(In Rs.)

a) Total Depreciation
7,49,000

b) Interest on total investment
22,58,000

d) 40% of salary and wages
13,44,000

e) 40% of other contingent expenses
8,88,000

Total

52,39,000

(ii) Net Profit (per year)

= F.C. ×100
--------------
F.C. + P

B.E.P.

= 5239000 ×100
-----------------------
5239000 + 2823000

= 64.98%

Addresses of Machinery and Equipment Suppliers

1. M/s. Batliboi and Co. Ltd.
P.B. No. 1719,
M.G. Road,
Ernakulam,
Cochin-682016.

2. M/s. Jayems Engg. Works
M.G. Road,
Ernakulam -16.

3. M/s. Avery and Co. of India Pvt. Ltd.
Ballard Estate,
Mumbai.

4. M/s. Chemida India
69, Sumitha,
98, Cuffe Parade,
Mumbai-5.

5. M/s. Hindustan Furnaces
Marar Lane,
Trichur-1.

6. M/s. Kerala Scientific Glass Works
Industrial Estate,
Ollur.

7. M/s. P.R.S. Technology Pvt. Ltd.
Mumbai.

Raw Material Suppliers

Local Market.