TOMATO SAUCE MANUFACTURING UNIT

1.INDRODUCTION

Tomato is one of most popular vegetables used for human consumption. Apart fromtheir use in food
preparations, tomato products like sauces, ketchups etc are used as tableenricher especially along with
fast food items like pizzas, burger, puffs etc. This is madefrom tomato juice and many other ingredients
and preservatives are added to it toenhance its shelf life and taste. These products are consumed by
people of all age groups and demand is going up.

2.PROCESS OF MANUFACTURE

Ripe and matured tomatoes are washed and graded. The graded tomatoes are then boiled in steam
kettles. The boiled tomatoes are then pulped and the juice is filtered out from seeds, fiber and solid
waste. Spices and condiments like ginger, garlic, clove, pepper, salt, sugar, vinegar etc are added. Allowed
preservatives are added to the sauce pulp. The sauce is quickly cooled and allowed to solidify into a thick
pulpy sauce. The sauce is then packed in sterilized bottles and pouches, sealed and stored for sale. The
recovery of juice varies depending on the quality and variety of tomato.

3.Technology Accessibility

IIFPT and its liaison offices at Guwahati and Bhatinda have all the technical knowhow on fruit and
vegetable processing including tomato ketchup. These technologies are available through training,
incubation and consultancy. The entrepreneur can first avail training or consultancy and then undergo
business incubation before venturing into the business. Other than IIFPT, NIFTEM, CFTRI and other
institutes also have the technical knowledge and training facilities.

4.Market Demand and Supply

The tomato based value added products such as puree, paste sauce and ketchup are extensivelyused in
daily consumption pattern both in rural and urban India. Due to increasing standards of living in the
cities and the rapid urbanization taking place in the rural areas, consumption of tomato based products
is expected to go up steadily. A large part of the world tomato crop is processed into tomato
paste/puree, which is subsequently used as an ingredient in many food Model DPR on Tomato
Processing products, mainly soups, sauces and ketchup. India has been exporting processed tomato in
the form of tomato paste and ketchup. Tomato sauce is being used with snacks like rolls, cutlets,
samosas, chops, soup, chowmin and other continental as well as chinese dishes. Bright mixture made
from tomato is used as important items with all modern food/snacks. The only ketchup and sauce
market in India is pegged at Rs 1,000 crore and growing at around 20% year-on-year. Therefore, there is a
big market for the processed tomato products. Tomato products are one of the chief ingredients in
ready-to-eat or fast food products. The major institutional customers of tomato paste are restaurants. At
present, the market of ketchup/puree, especially in the urban areas, is dominated by brands likes MEGGI
and KISSAN. However, the existing market can still accommodate micro or small scale units on their own
or under other’s brands

4.1 Marketing Strategy

The increasing urbanization and income offers huge scope for marketing of tomato based value added
products. Urban organized platforms such as departmental stores, malls, super markets can be attractive
platforms to sell well packaged and branded tomato ketchup and other products.Processors can also
have tie-up with hotels and restaurants for supply

4.2 Product Profile of the Unit

In the present model tomato processing unit, the targeted product output is Tomato Ketchup.Tomato
ketchup has huge demand in India and the existing market can still accommodate micro or small scale
units on their own or under other’s brand.

4.3 Raw Material Requirements for the Unit

A sustainable food processing unit must ensure maximum capacity utilization and thus requires an
operation of minimum 280-300 days per year to get reasonable profit. Therefore, ensuring uninterrupted
raw materials supply requires maintenance of adequate raw material inventory. The processor must
have linkage with producer organizations preferably FPCs through legal contract to get adequate quantity
and quality of raw materials which otherwise get spoiled. In the current model tomato processing
project, the unit requires 350 kg/day, 400 kg/day and 450 kg/day raw tomato at 70, 80 and 90 percent
capacity utilization, respectively

4.4 Location of the Proposed Project and Land

The entrepreneur must provide description of the proposed location, site of the project, distance from
the targeted local and distant markets; and the reasons/advantages thereof i.e. in terms of raw materials
availability, market accessibility, logistics support, basic infrastructure availability etc. The entrepreneur
must mention whether project is proposed in self owned land or rented/allotted land in any industrial
park or private location. Accordingly, he/she must provide ownership document, allotment letter/ lease
deed. Land clearance certificate must be from village authority/municipality or any other concerned
authority. The ideal locations for establishment of exclusive Tomato Processing Units are in the
production clusters of the major tomato growing states such as Andhra Pradesh, Madhya Pradesh,
Karnataka, Gujarat, Orissa, West Bengal, Telangana, Chattishgarh, Maharashtra and Bihar where
adequate quantities of surplus raw materials can be available for processing

5 Installed Capacity

The maximum installed capacity of the Tomato Processing Unit in the present model project is proposed
as150 tonns/annum. The unit is assumed to operate 300 days/annum @ 8-10 hrs/day. The 1st year is
assumed to be construction/expansion period of the project; and in the 2nd year 70 percent capacity,
3rd year 80 percent capacity and 4th year onwards 90 percent capacity utilization is assumed in this
model project.

5.2 Background of the Proposed Project

The entrepreneur must specify whether it is a new project or expansion of the existing project. If new
project is proposed then the reason to go in to the project and if expansion of the existing project, the
must specify what kind of expansion is proposed in terms of capacity, product, machines, civil
infrastructure etc.

6 Detailed Project Assumptions

This model DPR for tomato processing unit is basically prepared as a template based on certain
assumptions (Table 3) that may vary with capacity, location, raw materials availability etc. An
entrepreneur can use this model DPR format and modify as per requirement and suitability. The
assumptions made in preparation of this particular DPR are given in Table 3. This DPR assumes expansion
of existing unit by adding new tomato ketchup processing line. Therefore, land and civil infrastructures
are assumed as already available with the entrepreneur.

7 Detailed Project Assumptions

Parameter Value Assumed

Capacity of the processing unit : 150 MT/annum raw tomato

Utilization of capacity : 1st year implementation, 70% in 2nd year, 80%in 3rd year and 90% in 4th year
onwards.

Working days per year : 300 days

Working hours per day : 8-10 hrs

Interest on term and working capital loan : 12%

Repayment period : Seven years with one year grace period isconsidered.

Average prices of raw material : Rs. 20/Kg.

Average sale prices : Tomato Ketchup

Recovery rate : 65% of final ketchup per kg tomato

8.Fixed Capital Investment

8.1 Land & Building

The DPR is for FME scheme to upgrade/formalize existing micro enterprises which already has

land & built-up area. However, they can invest to expand the built-up area (Table 4) as required.

8.2 Land and Civil Infrastructures

i. Land 10000 Sq ft Assumed land already developed and has

6000 sq m built in area. So additional 1000 sq

ft can be built in @ Rs. 200/sq ft

Rs. 2.00 Lakhs

ii. Built-up processing area 6000 sq ft

iii. Storage area 1000 sq ft

Total Rs. 2.00 Lakhs

Machinery & Equipment: Rs. 18 Lakhs

S..No. Descriptions Power

requiredArea required (Sq.ft) Qty Amount (Rs.) in lakhs

1. Tomatoes Washer

Capacity : 100 kg /hr 210V 16 1 1.50

2. Blancher

Capacity : 15 kg /hr 1 KW 10 1 1.50

3. Fruit Pulper

Capacity : 100 kg /hr 2 HP 25 1 2.00

4. Pasteuriser with Boiler

Capacity : 500 lt /hr 2 KW 25 1 5.00

5. Mixing Tank

Capacity : 500 lt /hr 2 HP 25 1 1.00

6. Vacuum Pan/ Stem Kettle

Capacity : 500 lt /hr 5 HP 25 1 5.00

7. Ketchup Packing Machine

Capacity : 500 lt /hr 1 HP 10 1 2.00

8.4 Utilities and Fittings

i. Power Rs. 2.00 Lakhs

ii. Water

8.5 Other Fixed Assets

i. Furniture and Fixtures Rs. 1 Lakh

ii. Plastic trays capacity

iii. Electrical fittings

8.6 Pre-operative Expenses

Legal expenses, start-up expenses, establishment cost, consultancy fee, trial runs, & others Rs.67000
Total Pre-operative Expenses Rs.67000

8.7 Total Fixed Capital Investment

8.8 Working Capital Requirement

Working capital is critical input in tomato ketchup processing unit as raw materials are seasonaland
perishable thus need to maintain high inventories.

8.9 Working Capital Requirement (Rs. in Lakh)

Particulars Period

Year 2 (70%-105 MT)

Year 3 (80%-120 MT)

Year 4 (90%-135 MT)

8.10 On the basis of types of tomato ketchup

Tomato ketchup

No garlic no onion tomato ketchup

Sweet and spicy tomato sauce

Chilli tomato sauce

Organic tomato sauce

On the basis of its uses It can be used as a condiment for fritters, chicken etc

As an ingredient in preparing savoury dishes

As a table sauce for sandwiches, fries etc

As a salad dressing

As a sweetener for spicy dishes

With the fast food and Chinese takeouts

Used for street food preparations

9.Licences required

The license required to run this tomato ketchup making business is

Certificate under FSSAI regulations

IS : 3882 certificate

MSME registration
BSI certificate

NOC by state pollution control board

GST registration

10 .Target consumers

The target consumers for your tomato ketchup making business would be as follows:

Households: Households of all ages and working class make use of tomato ketchup as a table sauce for
the routine food cooked like with fritters, sandwiches, chapati rolls crackers, evening snacks etc

Fast food chains: The fast food chains make the most use of the tangy tomato ketchup which is more of
an essential requirement with burgers and pizzas without which the consumers sometimes lose the
delight in their taste

Take out food chains: The take out food chains specifically the Chinese, and burger and pizza joints,
street foods etc require supplying tomato ketchup sachets along with the food to meet all the possible
requirements of the consumers

Cafés: For the consumers aiming at healthy eating, diet consciousnesses etc the cafés make use of the
organic tomato ketchup along with salads as dressing.

Bakeries: The bakeries make use of the tomato ketchup as an side dip with curry puffs, samosas, puffs,
croissants etc

Street food stalls:The street food stalls like those of bhelpuri, Maggie etc also require tomato ketchup to
meet the requirements of all the target consumers with different tastes

Retail stores and supermarkets: The retails and supermarkets stock up on the tomato ketchup bottles for
the purpose of meeting the household requirement of consumers like kids, adults, teenagers older
people etc

Canteens: The canteens of various spaces like schools, colleges, commercial offices etc require ketchup
to serves along side with dishes as an optional condiments

Restaurants: The make use of tomato ketchup for the purpose of an optional condiments along with
other sauces like chilli sauce, Vinegar, mayonnaise etc to meet the different taste buds of the consumers.

10.1 Area required

The area required to set up this business is 500 sq ft

Raw materials required

The raw materials required to run this business is

Tomatoes

Water

Spices
Vinegar

Came or beet sugar

Glucose syrup

Manpower required

The manpower required to set up a tomato ketchup business is

skilled worker

unskilled worker

Moreover these workers must also be provided with ample trading in terms of the following:

Machinery usage

Equipment handling

Safety and precautions measures

10.2 Business model and growth

The business model of a tomato ketchup making business can be defined using these 4 variants:

Value proposition: The value which a tomato ketchup making business is likely to provide to you is:

Being an essential option in condiments and various quantity options at affordable prices you can expect
massive sales Large availability of raw materials and low cost production process the investment is
minimal and the business can be expanded.

10.3 Supermarkets

Competitor review: The competition in this business is quite aggressive with the already dominating
brands how ever it is easy to capture a local niche and cater to them. The competition to your tomato
ketchup making business is

Patanjali

Kisaan

Heinz

10.4 Maggie

10.4.1 Nestle Marketing strategy:

The marketing strategy that can be implemented by your tomato ketchup making business could be:

10.4.2 Advertising: Through TV commercials, digital billboards, celebrity endorsements, brand

10.4.3 Listings: on grocery and online shopping stores like amazon, big basket, grofers etc
Sales promotion: Buy one get one etc

11 Growth

The tomato ketchup making business has witnessed and has the potential for following growth
prospects.The Indian tomato ketchup market has been expected to grow at a CAGR of 6.9% untill 2020
and the global tomato ketchup up market at a CAGR OF 5.4%Infact the per capita consumption of
tomato ketchup in India stands at 1.3 kg in 2020 thereby increasing its production and distribution
prospects

12 Profit margin

The profits which a tomato ketchup making business is likely to yield is 25%.

13 Suggestions

Why don’t you get yourself some of that tomato ketchup dip and fries while we help you make a decision
whether or not to take up this business opportunity Firstly, because of the increasing working class and
ready-to-eat food the demand for tomato ketchup is increasing as an essential dressing on rolls,
sandwiches and and as a salad dressing for health conscious consumers Secondly, the affordability,
variance in quantity and flavours of tomato ketchup has increased the target consumers you’ll be
catering to Lastly, because of widely available raw material and at cost cutting prices this business is a
low investment opportunity

14 conclusion

We through our reliable expertise in the project consultancy and market research field, have demystified
the situation by putting forward the emerging business opportunity in the Tomato Products - Tomato
Ketchup, Sauce & Soup sector in India along with its business prospects. Through this report we have
identified Tomato Products - Tomato Ketchup, Sauce & Soup project as a lucrative investment avenue.