POMEGRANATE ARIL EXTRACTION WITH MODERN TECHNOLOGY Presented to: Mr. Suresh Bhosale Faculty-Techno Faculty-Techno Economic Feasibility Report
Presented By: Trina Bhagat Rishika Mi M ittal
05 30
Meghraj Gawande 09 Sagar Shinde 38
Jyoti Jadhav 51
INTRODUCTION INTRODUCTION TO TO THE PROJECT We are a group of entrepreneurs, who are pursuing MBA in Agribusiness and want to set up a processing plant, in the Satara Satara district of Maharashtr Maharashtra a where we will concentrate mainly on Pomegranate aril extraction using modern technology. The cost of the project is around 2.3 crores.
Pomegranate
Botanical Name: Punica granatum
Family: Lythraceae
Origin: Native to the region of Persia and the Himala Himalaya yan n ranges anges of India India Deci Deciduo duous us shrub shrub or smal smalll tree tree grow growin ing g in betw betwee een n five and eight meters tall. The super fruit, loaded with important health benefits Major Cultivators: Cu ltivators: India, Iran, USA, Turkey urkey,, Spain, Spa in, Israel are leading growers in world.
Indian scenario
There is an increase from f rom 96.9 thousand ha in 2003-04 2003 -04 to 116.4 thousand ha in 2005-06; 2005-0 6; similarly, similarly, the production has increased from 664.9 thousand tons to 849.1 thousand tons. The total production of pomegranate is concentrated mainly in the Western Maharashtra, Karnataka, Andhra Pradesh, Gujarat ±
±
±
±
The area, production and productivity of pomegranate pomegranate in India YEAR
AREA (000 ha)
PRODUCTION ( 000tons)
PRODUCTIVITY (tons/ha)
2003-2004
9 6 .9
664.9
6.86
2004-2005
111.8
800.7
7.16
2005-2006
116.4
849.1
7.29
Source: Indian Horticulture Database, 2006
Pomegranate Pomegranate Aril An aril (or arillus) is any specialized outgrowth from the funicu funiculus lus (attachment point of the seed) (or hilum) that covers or is attached to the seed.
In pomegranate we can see these arils, which are the fruit part which we eat.
So, we are going to deal in extracting this aril and market it .
Nutritional Benefits Energy
285 28 5 kJ (6 (68 8 kc kcal al))
Carbohydrates
17.17 g
Sugars
16.57 g
Dietary fiber
0.6 g
Fat
0.3 g
Protein
0.95 g
Thiamine (Vit. B1)
0.030 mg (2%)
Riboflavin (Vit. B2)
0.063 mg (4%)
Niacin (Vit. B3)
0.300 mg (2%)
Pantothenic acid (B5)
0.596 mg (12%)
Vitamin B6
0.105 mg (8%)
Vitamin C
6.1 mg (10%)
Iron
0.30 mg (2%)
Medicinal Properties Extremely Extremely rich rich sourc source e of antio antioxidan xidants, ts, vitami vitamins ns C, E and A and vital fatty acids Ability Ability to to fight fight cancer cancer,, Diabet Diabetes es Strengt Strengthens hens the car cardiov diovascul ascular ar sys system tem Fights osteoarthritis Lowe Lowerrs bad bad choles choleste tero roll Currently Currently gained gained importance importance in Ayurvedi Ayurvedicc medicines.
Reasons for selection of pomegranate
Untapped market potential of pomegranate Aril Arils are Ready to eat. Their will be no issues of external appearance of fruit.
Medicinal values, Ayurvedic importance.
Line of machineries and equipments
Why Aril Extraction?
Market Potential is high
New Concept in Indian Market
Market for ready-to-eat Fresh fruits is increasing in National & International market. market.
Consumer friendly.
High export potential.
The Fresh-Cut Market
What? Fresh agricultural produce that has been only physically physically altered altered i.e. washed, washed, peeled, cut, etc. etc. while maintaining its farm-freshness. Why? The fresh-cut market is increasingly popular in todays fast-paced, health-conscious world, offering garden fresh produce thats ready to eat. According to US surveys surveys:: 81% of consumers address health issues through choice of food consumption. 76% report regularly buying fresh-cut products.
Our Planning of unit We are going to establish highly mechanized unit for extraction of Aril
We are concentrating on Domestic market (70%), Export Market (30%)
Under domestic market ,Metro cities, Agri retail chains, 5 star hotels will be contacted for market.
For Export market we are concentrating on European market.
DETAIL PROJECT REPORT
Title of Project Pomegranate Aril Extraction with Modern Technology
Objectives
To procure, extract and sell pomegranate arils in domestic and international market profitably. To provide hygienic and nutritive arils in convenient packages.
Background of Entrepreneurs Entrepreneurs
Names: Trina Bhagat, Meghraj Gawande, Rishika Mittal, Jyoti Jadhav, Sagar Shinde. Qualification: Qualification: All are MBA in Agri Business with good Management skills. They even have Horticultural and Biotechnological background to work efficiently efficient ly..
TECHNO FEASIBIL FEASIBILTY TY ANAL ANALYSIS
Location Of The Project
Land & Plant Layout
Selection Of Plant And Machinery
Raw Material
Market and marketing strategies
Manufacturing Manufacturin g Process/ Tech.
LOCATION OF THE PROJECT
For opening unit of pomegranate pomegranate Aril Extraction Extraction we have chosen place in Tal:Karad, Dist: Satara in Maharashtra.
Here one of partner has is own self owned land, which is road touch to NH-4. Total land is 1 acre.
Why Maharashtra?
Maharashtra is leading cultivator of pomegranate. Statistical data for pomegranate in MH for year 2005-2006 AREA (OOOha)
PRODUCTION (000tons)
PRODUCTIVITY (tons/hec)
91.0
593.6
6.5
State State Govt. and Agri Ag ri dept has various schemes, policies, subsidies for such processing units. Good availability of raw material, infrastructure, transportation.
Why Karad?
It has got strategic strategic position.
Contd..
Close to raw material area i.e. Solapur, Nashik, Ahmednagar Close to Pune i.e. 150km , Mumbai Mum bai is 300km So near to mark m arket et area, port for export with good connectivity of roads.
Land and Site development
Land area is around 1 acres. Its market market price is around 1 lakh to 1.5 lakh Site development includes internal roads, leveling & compound wall. Proper planned buildings is planned. Proper facility of Water is done with Bore wells MSEB power and communication facilities viz. Tele communication and Postal services are locally available at site.
Layout of the unit
Restroom
Toilet
Garden Administration In
P a r k i n g
Receiving and weighing Storage
Packaging & Dispatch Out
Processing
Plant and Machinery Extractor
Contd
Contd..
RAW MATERIAL
It will be procured directly from farmers of Satara, Solapur, Solapur, Nashik, Na shik, Ahmednagar Ahmedna gar.. For assured supply of raw material, we will go for contract farming. Local market and Pune market will also be contacted for raw material. B grade fruits will be used mostly. For packaging material it will be properly designed keeping in mind all necessary nece ssary things. Corrugated boxes will be taken from local market.
Pomegranate Varieties of Pomegranate
Mridula Bhagwa Ganesh Phule Arkata
Why these Varieties?
Good fruit size The average fruit weight is 250-300 grams. Arils are dark red in colour Varieties are recommended by Mahatma Ma hatma Phule Krishi Vidyapeeth, Rahuri and Maharashtra Pomegranate Pomegranate
Manufacturing Process for Aril Extraction The
fruit is fed inverted, either manually or mechanically, onto a conveyor of open-bottomed circular holders. The crowns are cut off and grips lift the fruit onto the next level
conveyor, pressing it down onto corolla-opening knives that longitudinally score the skin.
Flexible drums press down on the fruit causing it to open in
segments and eventually to flatten.
As the fruit is flattened, the arils fall out with the help of
oscillating air jets.
The untouched and undamaged arils are gravitationally water-
separated from other fruit parts such as peel or membrane, and
Packaging
250 gm Packets Packets Tray Details
Material
A-PET
Length
173 mm
Width
129 mm
Height
35 mm
Colour
Crystal Clear
1000 gm Packets Packets Tray Details
Material
A-PET
Length
227 mm
Width
177 mm
Height
60 mm
Colour
Crystal Clear
Use of Peels Dry peels of pomegranate are used with Tulsi leaves and ginger to prepare medicine for Cough. Peels of pomegranate are also used colouring cloths Peels are used in many ayurvedic medicines Tooth powder is also made. So , we can sell our by product to companies which deals in Ayurvedic medicines and cosmetic product.
Market
Market Market We are concentr concentrating ating on Export Export market and Domestic market too. Mostly Developed nations (European national) will be targeted. Under domestic market we will concentrate on all Metro cities, Big retail chains and 5 star hotels. For Urban market we will have small packets with low cost
Marketing Marketing Strategies Strategies Segmentation: We are targeting targeting Upper middle class and higher class customers. Targeting: Working families in all cities Positioning: Hygienic Arils in Consumer friendly packets Direct Marketing : Marketing Head will look for orders and sell the product. No out sourcing for marketing.
Promotional Promotional Activities For Domestic Market: Market: Hoarding in Metro cities Banners Stall in Food Festivals Advertisement in News paper, Magazines For Export: Advertisement on Internet Awareness among exporters exporters Awareness
Staff Details
Production Staff ±
Supervisor/Manager -1
±
Packaging Staff-2
±
Processing Staff-2
General Administration Staff ±
Accountant-1
±
Driver-1
±
Watchman-2
±
Sweeper-1
F INANCIAL INANCIAL
VIABILITY OF PROJECT
ASSUMPTIONS
Average purchase price of pomegranate as Rs. 40/kg (B class quality and even C class pomegranates pomegranates can be utiliz ut ilized ed here) All the popular varieties of pomegranate pomegranate grown in Maharashtra can be used as raw material in EAP process technology. The Average Average selling price of arils in India is assumed as Rs. 150/kg and export price of Rs. 200/kg.
Cost of the Project Sr.No.
Items
Amount in Rs.
1
Land(approx 2500ft)
1,00,000/-
2
Building
18,00,000/-
3
Plant and Machinery
200,00,000/-
4
Technical engineering &consultancy fees
2,00,000/-
5
Expenses on o n foreign technical for 1 month
2,00,000/-
6
Misc fixed assets(Electrical installation, furniture, generator, Diesel, Telephone installation, installation, firefighting firefighting equipment etc) etc)
5,00,000/-
7
Pre operative expenses
2,50,000/-
8
Provision of contingencies
5,00,000/-
9
Working capital margin(Approx w.c. requirement is Rs.2 Lacs)
50,000/-
Means of finance Items
Amount in Rs
Total cost of the project
236.00 lacs
Promoter s contribution
59.00 lacs
Bank Term loan
177.00 lacs
Cash Credit
2.00 lacs
Subsidies Available Available
By NHB: ±
±
Under Scheme, Development of commercial commercial Horticultural through through Production and Post Post harvest h arvest Managemen Managementt Subsidy avai available lable is is 20% of project project cost. Under Scheme, Capital Investment Investment Subsidy for construction & modernization of cold storagesubsidy available available is 25% of project cost.
Sales Projection
Minimum production capacity :3000 M.T. per year Average productivity :10 MT/ha Conversion ratio :30% of total production converted to aril production based on market situation
Sales Projection
Capacity of Unit =175 kg/hr(on an av. av. 2.5 kg of fruits converting converting to 1 kg arils)
Total working months= 5 months
Working hours per day= 15hrs(2-shift)
Efficiency of machinery= 95%
Total Production=175*15*25*5=328125 kg
Assumption Assumption : 30% 30% productio productionn- exports exports 70% produc productiontion- Domestic Domestic market market
Sales Projection
Export volume =328125*30%=98438 kg
Domestic market=328125*70%=229687 market=328125*70%=229687 kg
Total sales =Domestic + Export =(229687*159)+ (98438*200) Total =54140650= 541 lacs
Cost of Raw Material
Raw material required ±
Fruits required = 328 M.T. *(100/95)*2.75
=949 M.T. =950 M.T. Raw material cost=950*40,000 = Rs.380,00,000
Cost of Production Items
Amount in Rs.
Raw Material
380,00,000
Manpower
2,40,000
Fuel, lubricants and Electricity
2,50,000
Administration
4,50,000
Repairs and Maintenance
5,00,000
Packing and forwarding
2,25,000
Market promotion
5,00,000
Depreciation
20,00,000
Interest (term loan)
24,00,000
Interest on on working capital
30,000
Total cost
4,45,95,000=446 lacs Fixed= 38475000
Conversion Conversion Cost
Yearly operation cost = Rs 44600000
Less cost of raw material(fruit) = -Rs 38000000
Cost of managing the unit/year=Rs. 6600000
Total production/ year = 328125 kg
Cost of conversion of 1 kg fruit to arils =6600000/328125=20.11
Adding 15% as profit ,hiring charges =Rs 23.12/kg
Contd..
Total sales = Rs .541 lacs (as calculated before)
Profit before tax(PBT)= 541-446= 95 lacs
Debt Service Coverage Ratio(DSCR)
7 year repayment programme programme and a nd 1 year gestation Loan installment = 198/7 =28.28 lacs DSCR= Net surplus+ Depreciation Installment +Interest = 95 95+20 = 2.19 28.28+24 The DSCR for any financial institution to accept acc ept the project should be 1 : 1.75. The ratio of 1: 2.19 would be above a bove the minimum norm.
Debt Service Coverage Ratio(DSCR) YEAR
Net surplus
Depriciation
Loan installment
Interest
DSCR
1ST
95
24
20
28.28
2.199693956
2ND
101.86
23
18
28.28
2.337363495
3RD
110
22
16.2
28.28
2.509944312
4TH
117
21.5
14.58
28.28
2.643230213
5TH
119.14
21
13.1
28.28
2.683441558
AVG.
Profitability statement statement Particular
2nd YEAR
3rd YEAR
4th YEAR
5th YEAR
6th YEAR
Aril sales
541
550
560
575
575
TOTAL INCOME EXPENDITURE
541
550
560
575
575
-Raw Material Consumed POMEGRANATE FRUITS
380
385
390
400
400
-Direct Labour Cost -Power & Fuel -Administration -Packing & Forwarding Cost -Repairs & Maintenance -Depreciation
2.4 2.5 4.5 2.25 5.00 20.00
2.5 2.5 4.5 2.35 5.0 18.00
2.5 2.6 4.5 2.35 5.00 16.2
2.6 2.7 4.5 2.45 5.20 14.58
2.6 2.7 4.5 2.45 5.25 13.1
Cost sales
416.7
419.85
423.15
432.03
430.6
Operating Profit -Selling & Admn. Expenses
124.3 5.00
130.15 5
136.85 4.5
142.97 4.2
144.4 4.00
-Interest on Term Loan AND
24.00
23.00
22.00
21.50
21.00
working capital loan Profit Before Tax (PBT)
0.30 95.00
0.29 101.86
0.28 110.07
0.27 117.00
0.26 119.14
NET SALES
Internal Rate of Return IRR
Particulars Total revenue
Cons. Period 1st YEAR
2nd YEAR
3rd YEAR
4th YEAR
5th YEAR
541
550
560
575
575
Total Expenses Expen ses
416.7
419.85
423.15
432.03
430.6
Profit Before Tax
124.3
130.15
136.85
142.97
144.4
-20
-18
-16.2
-14.58
-13.1
2 4 .0 0
23.00
22.00
2 1 .5 0
21.00
Tax Tax (at 33.66%)
28.5
30.558
33.012
35.1
35.742
Profit after Tax
66.5
71.302
77.049
81.9
83.398
20
18
1 6. 2
14.58
13.1
Interest
2 4 .0 0
23.00
22.00
2 1 .5 0
21.00
Cash Profit
110.5
112.303
115.249
117.98
117.498
Adjust Depreciation Interest
Add Depreciation
Net Investment@15%
Benefit cost ratio ratio Benefit Cost Ratio= the net benefits per year/ Annual Operating cost = 95/65.95= 1.44 The BC Ratio is more than 1 and hence should be acce accept ptab able. le.
Break Even Point Analysis BEP
= Fixed Cost/Contribution (In % capacity utilization) = Fixed cost/ Sales - Variable cost = 6120000/ 54100000-38475000 = 39.1% The Break Even point point in terms of capacity utilization is 39.1 %. This BEP is a achievable target for for the project.
Sensitivity Analysis
The purpose of the sensitivity analysis or CVP analysis is to study the cushion available in the profitability of the project to withstand shortfalls in the expected results owing to uncertainties
Assuming that the raw material availability decreases due to Oily Oily spot spot disease in a particular year. The direct effect of this is the increase in the prices of raw material i.e. pomegranate pomegranate fruits. Considering this situation in mind we have assumed that the production cost increases increases by 10 %. In this scenario sce nario the various ratios for the financial viability of the project are calculated as follows.
Increased Increased raw raw material material costcost- Rs. 427,00,000 427,00,000
DSCR = 2.02
Benefit to Cost ratio = 1.30
IRR = 34 %
From all of the above ratios we can conclude that the project will be financially viable in case of any adversities.
Future Plans
Production of pomegranate pomegranate Aril Wine
Production of pomegranate Juice.
Pomegranate Dried Arils.
Increase the shelf life arils through modified atmospheric packaging technology.
Social Responsibility
Employment to local people. Source of assured income to the farmers farmers of dry land area. Help from SHG can be sought for cleaning, packaging & other administrative administrative work. This will be a source source of income for for the group members.
S WOT
ANALY SI S
STRENGTHS
The technology can give boost to the consumption of pomegranate. It may lead to increase in the th e profitability of pomegranate growers due to easier market access. Fruit is suitable in semi arid and arid regions with low consumption of water under drip and hence can upscale the economy of farmers farmers in dry land area in Maharashtra.
WEAKNESS
The technology is not introduced so far in India and no technocrat or skilled workers available. Have to depend on Israel for technological know how, spare, etc. Unaware of the th e market acceptability acceptability of Indian In dian consumers.
Contd..
Substantial Substantial amount has to be spent on marketing, advertisement and publicity. The shelf life of 10 days has to be extended further for tapping distant market. With existing existing shelf life the cold chain ch ain has to be maintained efficiently eff iciently..
OPPORTUNITIES
Scope to modify the technology to suit Indian situation and make it more cost effective. Can convert it into semiautomatic rather rather than fully automatic requiring requiring low labour and an d reduction of fixed assets value. The market of growing middleclass people in India, In dia, having more disposable income and awareness awareness of hygiene, can be tapped progressively progressively.. Export market market can be further fu rther explored. explored. Possible to tap health and pharmaceutical market. market.
THREATS
Acceptability of Indian fruits in foreign markets markets due to stricter codex codex norms may be in doldrums. Disease controlled controlled on pomegranate pomegranate crop and the vindictive propaganda in export market. A volatile price of imported spare parts and non availability of foreign technical know how.
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