This document provides details for starting a ready-to-serve beverage business. It discusses the market potential and demand for fruit juice-based beverages. The manufacturing process is described as blending preserved fruit pulps, sugar syrup, and other ingredients, homogenizing, bottling, and retorting. Capital requirements including land, buildings, machinery, working capital are estimated to be Rs. 11.90 lacs. The project is expected to be profitable with sales of Rs. 100 lacs at full capacity and costs of Rs. 57.5 lacs for raw materials, Rs. 4.5 lacs for utilities, and Rs. 22.5 lacs for selling expenses.
This document provides details for starting a ready-to-serve beverage business. It discusses the market potential and demand for fruit juice-based beverages. The manufacturing process is described as blending preserved fruit pulps, sugar syrup, and other ingredients, homogenizing, bottling, and retorting. Capital requirements including land, buildings, machinery, working capital are estimated to be Rs. 11.90 lacs. The project is expected to be profitable with sales of Rs. 100 lacs at full capacity and costs of Rs. 57.5 lacs for raw materials, Rs. 4.5 lacs for utilities, and Rs. 22.5 lacs for selling expenses.
This document provides details for starting a ready-to-serve beverage business. It discusses the market potential and demand for fruit juice-based beverages. The manufacturing process is described as blending preserved fruit pulps, sugar syrup, and other ingredients, homogenizing, bottling, and retorting. Capital requirements including land, buildings, machinery, working capital are estimated to be Rs. 11.90 lacs. The project is expected to be profitable with sales of Rs. 100 lacs at full capacity and costs of Rs. 57.5 lacs for raw materials, Rs. 4.5 lacs for utilities, and Rs. 22.5 lacs for selling expenses.
This document provides details for starting a ready-to-serve beverage business. It discusses the market potential and demand for fruit juice-based beverages. The manufacturing process is described as blending preserved fruit pulps, sugar syrup, and other ingredients, homogenizing, bottling, and retorting. Capital requirements including land, buildings, machinery, working capital are estimated to be Rs. 11.90 lacs. The project is expected to be profitable with sales of Rs. 100 lacs at full capacity and costs of Rs. 57.5 lacs for raw materials, Rs. 4.5 lacs for utilities, and Rs. 22.5 lacs for selling expenses.
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READY-TO-SERVE BEVERAGES
1.0 INTRODUCTION A variety of soft drinks are presently available in the market but majority of them are synthetic carbonated drinks. But gradually there is a distinct shift towards fruit juice based beverages and many brands like Frooty, Maaza, Treetop, Volfruit etc. are available in the market. These established brands have created awareness in the mind of consumers and a new unit can encash on this trend.
2.0 PRODUCT 2.1 Applications Beverages are very popular across the country and people from all age groups drink either hot or cold beverages regularly. Aerated soft drinks, still beverages made from fruit juice/pulp and soda water are the cold drinks. Fruit juice based beverages can be manufactured in many preferred locations like HP, Uttaranchal, UP, the North-East region, Karnataka, Maharashtra and so on.
2.2 Availability of Technology & Compliances
CFTRI, Mysore, has developed the process know-how. Compliance under the FPO & PFA Act is compulsory.
3.0 MARKET POTENTIAL
3.1 Demand and Supply Many established brands as stated above have created awareness amongst the consumers and many of them have started switching over to fruit juice based beverages from the aerated beverages. Large companies and brands are popular in urban areas.
191 3.2 Marketing Strategy Established brands would need quite some time to penetrate the vast and scattered market. This activity can be started in towns and small cities on a small scale so that products become price competitive. During winter, the demand would go down but otherwise, rest of the 8-9 months would witness steady demand.
4.0 MANUFACTURING PROCESS
The process of manufacture is simple and standardised. Preserved fruit pulps, sugar syrup, citric acid, preservatives, colours and flavours are blended according to the formulation, homogenised and bottled. The bottles are processed in retorts and cooled.
5.0 CAPITAL INPUTS
5.1 Land & Building A readymade shed of around 100 sq.mtrs. with adjacent washing area can accommodate the machines. Cost of such a shed is assumed to be Rs. 2.50 lacs.
5.2 Machinery Annual rated capacity of 2.5 lac ltrs with around 10-12 hours working everyday and 300 working days world require following machines: (Rs. in lacs) Particulars Qty Amount Homogeniser (200 kgs Cap) 1 0.75 SS Steam-jacketted Kettle 1 0.65 Bottle Washing & Filling Machine 1 0.60 Retort 1 0.75 Crown Corking Machine 2 0.30 Mixing Tanks 4 0.40 Baby Boiler (100 kgs Cap) 1 0.80 Total 4.25
5.3 Miscellaneous Assets
Other support assets like SS vessels, fruit-crates, weighing scale, working tables etc. would cost around Rs. 1.00 lac.
5.4 Utilities Power requirement shall be 15 kW whereas LDO shall be needed for boiler. Water required for washing of fruits and potable and sanitation purposes shall be around 15,000 ltrs. every day.
192 5.5 Raw and Packing Materials The all-important raw material shall be good quality preserved fruit pulp of different fruits for which prior arrangements are advisable. Other items like sugar, citric acid, preservatives, colours, flavours etc. shall be available locally. Good quality food grade plastic bottles and crates shall be the packing materials.
6.0 MANPOWER REQUIREMENTS
Particulars No Monthly Total Monthly Salary (Rs.) Salary (Rs.) Skilled Workers 2 2,500 5,000 Unskilled Workers 1 1,750 1,750 Helpers 5 1,500 7,500 Salesman 1 2,500 2,500 Total 16,750
7.0 TENTATIVE IMPLEMENTATION SCHEDULE
Activity Period (in months) Application and sanction of loan 2 Site selection and commencement of civil work 1 Completion of civil work and placement of orders for machinery 4 Erection, installation and trial runs 1
8.0 DETAILS OF THE PROPOSED PROJECT
8.1 Land and Building A readymade shed with adjoining washing area would cost Rs. 2.50 lacs as stated before.
8.2 Machinery Total cost of machinery is estimated to be Rs.4.25 lacs, as explained earlier.
8.3 Miscellaneous Assets
A provision of Rs. 1 lac would take care of other supporting assets.
8.4 Preliminary and Pre-Operative Expenses
An amount of Rs. 1.50 lacs would be adequate towards pre-production expenses.
193 8.5 Working Capital Requirement At 60% capacity utilisation in the first year, the working capital needs would be as under: (Rs. in lacs) Particulars Period Margin Total Bank Promoters Stock of Raw and ½ Month 30% 1.40 1.00 0.40 Packing Materials Stock of Finished Goods ½ Month 25% 2.00 1.50 0.50 Receivables ½ Month 25% 2.50 1.90 0.60 Working Expenses 1 Month 100% 0.45 -- 0.45 Total 6.35 4.40 1.95
8.6 Cost of the Project and Means of Financing (Rs. in lacs)
Items Amount Land and Building 2.50 Plant and Machinery 4.25 Miscellaneous Assets 1.00 Preliminary and Pre-operative Expenses 1.50 Contingencies @ 10% on building and machinery 0.70 Working Capital Margin 1.95 Total 11.90 Means of Finance Promoter's Contribution 3.50 Term Loan from Bank/FI 8.40 Total 11.90 Debt Equity Ratio 2.40 : 1 Promoters Contribution 29%
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.
9.0 PROFITABILITY CALCULATIONS
9.1 Production Capacity and Build-up As against the rated capacity of 2.50 lacs ltrs. every year, actual utilisation in the first year is assumed to be 60% and thereafter it is limited to 75%.
9.2 Sales Revenue at 100%
Considering selling price of Rs. 40/ltr; the annual sale at 100% would be Rs. 100.00 lacs.
194 9.3 Raw and Packing Materials Required at 100% (Rs. in lacs) Product Qty Rate/Ton Value (Tonnes) (Rs.) Assorted Fruit Pulp 70 40,000 28.00 Sugar, preservatives, flavours, colours etc. -- -- 12.00 Packing Material @ Rs.7/Ltr. -- -- 17.50 Total 57.50
9.4 Utilities Annual cost of utilities at 100% capacity utilisation would be Rs.4.50 lacs .
9.5 Selling Expenses
A provision of 22.5% of sales every year would take care of selling commission, transportation and advertisement in local media or hoarding etc.
9.6 Interest Interest on term loan of Rs.11.90 lacs is calculated @ 12% per annum assuming complete repayment in 4 years including a moratorium period of 1 year whereas on working capital from bank, it is calculated @ 14% per annum.
9.7 Depreciation It is calculated on WDV basis @ 10% on building and 20% on machinery and miscellaneous assets.
195 10.0 PROJECTED PROFITABILITY (Rs. in lacs) No Particulars 1st Year 2nd Year A Installed Capacity ---- 2.5 lac ltrs ---- Capacity Utilisation 60% 75% Sales Realisation 60.00 75.00 B. Cost of Production Raw and Packing Materials 34.50 43.10 Utilities 2.70 3.40 Salaries 2.01 2.35 Stores and Spares 0.36 0.48 Repairs and Maintenance 0.42 0.54 Selling Expenses @ 22.5% 13.50 15.90 Administrative Expenses 0.72 0.90 Total 54.21 66.67 C. Profit Before Interest & Depreciation 5.73 8.33 Interest on Term Loan 1.44 1.07 Interest on Working Capital 0.62 0.77 Depreciation 1.30 1.07 Profit Before Tax 2.37 5.42 Income-tax @ 20% 0.47 1.08 Profit After Tax 1.90 4.34 Cash Accrual 3.20 5.41 Repayment of Term Loan -- 4.00
11.0 BREAK-EVEN POINT ANALYSIS (Rs. in lacs)
No. Particulars Amount A Sales 75.00 B Variable Cost Raw and Packing Materials 43.10 Utilities (70%) 1.83 Salaries (70%) 1.41 Stores and Spares 0.36 Selling Expenses (70%) 11.20 Administrative Expenses (50%) 0.45 Interest on working capital 0.77 59.12 C Contribution 15.88 D Fixed Cost 9.87 E Break Even Point (D ÷ C) 62%
(Rs. in lacs) Particulars 1st Yr 2nd Yr 3rd Yr 4th Yr Cash Accruals 3.20 5.41 5.79 6.17 Interest on Term Loan 1.44 1.07 0.58 0.34 Total (A) 4.64 6.48 6.37 6.51 Interest on Term Loan 1.44 1.07 0.58 0.34 Repayment of Term Loan -- 3.90 4.00 4.00 Total (B) 1.44 4.97 4.58 4.34 DSCR (A) ÷ (B) 3.56 1.39 1.59 1.78 Average DSCR -------------------------- 1.89 ----------------------
