final sumer project

FEASIBILITY ANALYSIS OF SETTING UP A GROUNDNUT PLANT

TOLANI INSTITUTE OF MANAGEMENT STUDIES 0

FEASIBILITY ANALYSIS OF SETTING UP A GROUNDNUT

PLANT

A PROJECT REPORT Submitted by

VIKRAM DUTT (09009)

MAYUR THACKER (09107)

Batch-2009-11

To

Director (PGDM)

in partial fulfillment of the requirements of

Tolani Institute of Management Studies, Adipur

for the award of the degree of

Post Graduate Diploma in Management

Tolani Institute of Management Studies

Adipur – 370205

JULY 2010



Acknowledgement

Through this acknowledgement we express our sincere gratitude towards all

those people who helped us in the preparation of this project that has been a learning

experience. We express our sincere thanks to all the Professors who guided us through

the project report and gave us valuable suggestion and encouragement.

We would like to express our sincere thanks to Mr. Krishan Kumar Dhingra

(Managing Director) for his guidance and support throughout our training at JMD

Oils Pvt. Ltd.

We would also like to express our gratitude to Mr. Vinod Kumar (General

Manager), Mr. Harish Nair (Technical Manager), Ms. Alpa Puri (Executive

Commodities, Trading), and all other members for being so cooperative and

entertaining our queries.

We are also thankful to our honourable Director Mr. A.J. Bhambhani for

providing us an opportunity and Dr. Tejas Pujara sir who had guided us.

We are also thankful to the Management of JMD OILS PVT LTD. who has

welcomed us and had given all the important information step by step, which will

help us in our future profession.



DECLARATION

We hereby declare that the Project work entitled Feasibility Analysis of

Groundnut Plant at JMD Oils Pvt. Ltd. submitted to Tolani Institute of Management

Studies, Adipur, is a record of an original work done by us under the guidance of

“Ms. Alpa Puri (Executive Commodities, Trading)” and this Project work is not

submitted for the award of any other Degree / Diploma / associate ship / Follow ship

or similar award.

Declaration by:

Vikram Dutt _______________________

Mayur Thacker _______________________

Date:

Place:



LIST OF CONTENTS

NO TITLE PAGE NO.

Acknowledgement I

Declaration II

List of contents III

List of tables IV

List of Figures V

List of Abbreviations VI

Executive Summary VII

Objectives of the study VIII

1 Introduction

1.1 About the company 7

1.2 About the project 13

1.3 Industry 14

1.4 Literature review 16

2 Methodology 22

3 Analysis and Interpretation 25

4 Findings 40

5 Future Scope 41

6 Conclusion 42

7 Bibliography 43



LIST OF TABLES

Sr. No. Particulars Page No.

1 Export figure by APEDA 15

2 Raw Material 32

3 Production Programme 33

4 Machinery & Equipment 34

5 Utilities 34

6 Manpower 35

7 Cost of the project 36

8 Working Capital 36

9 Total cost of Project 37

10 Means of Finance 37

11 Project Profitability Analysis 38



LIST OF FIGURES

Sr. No. Table Title Page No.

1 Country Wise Production 14

2 Java type groundnut 17

3 Bold type groundnut 18

4 Huller Machine(Decorticator) 27

5 Grading Machine 29

LIST OF ABBREVIATIONS

Short form Full Form HPS Hand Peek Seed

APEDA Agricultural and Processed food products

Exporting Development Authority



EXECUTIVE SUMMARY

JMD produces edible commodities such as oils, ghee, salt and sugar. So,

company planned to establish a groundnut processing plant. The company gave us

chance to make a project on feasibility of groundnut through which groundnut oil can

be produced and other separate items of groundnut can also be launched in the

market. But, company mainly focused on sales of Kernel rather than making oil. We

have done the analysis of the Kernel. We have done the analysis of plant location for

JMD, Process Analysis, Technical analysis, Man power analysis, Financial Analysis.

Our plant visit and process analysis facilitated to study the entire market.

Through the whole study we have tried to give best suggestions to company.

Objectives of the Study

1) To analyse the market Technical and Financial Feasibility.

2) To study the feasibility of a plant for groundnut at JMD industrial area.



1. INTRODUCTION

1.1 About the company

JMD OILS PVT. LTD

Company Profile

Name of the company: JMD Oils Pvt. Ltd.

Constitution : A Closely held Private Limited Company

Name of Directors : Sh. Krishan Dhingra

Sh. Naresh Dhingra

Sh. Ramji Lal Sharma

Nature of Business : Manufacturing of edible oils and Ghee, Sugar, Salt.



History of JMD Oils Pvt. Ltd

The foundation of JMD group was laid by Late Sh. J R Dhingra, a social

activist and a religious and pious person. With his dynamic approach, guidance and

vision, the group, which was started with a Grocery shop, has achieved astounding

heights. Sh. J R Dhingra passed away in the year 2001 but his teachings, inspirations

and values have been well carried by his four sons namely Gulshan Kumar, Krishan

Kumar, Naresh Kumar and Sanjay Kumar. They further fragmented the JMD tree,

planted by their father and expanded, diversified and consolidated their position by

working and living jointly as a close fist.

JMD Group started the business of edible oils in the year 1987 as a

distribution unit. The promoters put their best efforts, vision and acumen in carrying

out the business. Thereafter they kept on adding multinationals and reputed

companies/brands who have shown their eagerness to be associated with the group

and promote their brand/business e.g. “ Vital”- (SM Dyechem), “Dalda Refined Oil” -

(Hindustan Lever Limited), “Sundrop, Crystal” - (Agro Tech Limited), “Sohna”-

(Markfed), “Saffola”- (Marico Industries Limited).

Meanwhile the group diversified into the business of manufacturing and

marketing of Dairy products and took franchise of “INDANA” brand in the year

1997. They took on lease the dairy plant of Foremost Industries (I) Ltd (Owner of

Indana brand) situated at Saharanpur. However in view of a high operational cost,

being old plant, the promoters discontinued the operation of the said plant and

outsourced the manufacturing the dairy operations.

Over a period of time, the group established its own market and presence in

the business of edible oils and dairy products. It has been making supplies to more

than 7000 retail outlets, Canteen Stores Departments (CSD), multinationals, five stars

hotels, restaurants, fast food centers, confectioneries manufacturers etc.



It had been outsourcing the manufacturing/refining of edible oils and dairy

products from outside jobbers. However at times there been a pressure in regard to the

quality and regularity of operations which was dependent upon the whims of the

jobbers.

As a process of backward integration the group took over a dairy plant in Dist.

Ballabhgarh (Haryana) in the year 2003. The said plant had milk processing capacity

of lakh later per day. After takeover, the promoters took the first step to reduce

operational/running cost and incurred huge capital expenditure. Thereafter they

increased the milk processing capacity to 3 lakh liters per day. Meanwhile the

company has also leased out its packing facilities for packing of fresh milk under the

brand of “Amul” catering to Delhi. The promoters put their best to convert a loss

making venture to a profitable enterprise.

In the year 2004, the group diversified and set up a plant for packaged

drinking water and aerated drinks under the brand name of „H2GO‟.Over a short

period of two years the brand has been well appreciated and well seen in the market.

It has acquired a high position in the market.

After settling the market and the production of dairy and packaged water, the

group conceived an idea to go for backward integration in edible oils. It decided to go

for establishing an edible oil refinery. Since more than 50 % of edible oils

consumption is met out of imports, the group decided to establish a plant near Sea

Port. Hence the group decided to set up a plant in Kandla, Dist: Gandhidham, Gujarat.

Accordingly it set up a plant with capacity of 800 TPD. The plant has been put to

operation in the year 2005.

Over a period of time the group has been interacting with a numerous

parties/customers comprising of multinationals, five star hotels, restaurants, fast food

centers, retailers, wholesale markets and direct consumers etc. Its products being

consumer products have a name in the household. Whereas there has been a boom in

real estate business. The group decided to operate as per the time and market



environment. After making a thorough study and research the group diversified and

entered into the business of Real Estate, housing project under the brand name of

„JTPL‟. The integrity and reputation of the promoters have paid rich dividends and

housing projects have begun with flying colours.

Company’s Mission

To provide continuous value through their products that will add verve to their

customers‟ life by making goods that are innovative, qualitatively par excellence and

capable of providing an amazing level of customer satisfaction. Helping their

customers get more out of life.

Company’s Vision

They keep their vision targeted at their mission and work with great passion in

achieving their prime objective of giving the customer more of life!

To achieve their aim, they are dedicated to continuously innovating in

technological inputs, service levels, creative marketing, pricing and cost efficiency.



Culture of company

Openness and flexibility in working style.

Open door policy means senior executives are approachable at any time i.e.

walk-the talk approach.

Lot of freedom and autonomy in work.

Congenial environment for young professional to experiment new ideas.

Positive and purposeful interaction at all level.

Easy accessibility of information. Free flow of communication.

Result oriented attitude is the order of the day.

Employee growth is performance based.

Environment of Continuous Learning.



Organisation Structure

Managing director

Commercial

Manager

Commercial Officer

Assistants

Excise Officer

Assistants

Factory Manager

H.R Manager

H.R Officer

Assistants

Security Officer

Security Supervisor

Security Gaurds

Civil Engineer

Supervisor

Helpers

Genral Manager

Accounts Manager

Accounts Officer

Accounts Assistants

Logistic Manager

Assistatn Manager

Assistatns

Transport Incharge

Assistatns/helpers/dri

vers

Genral Manager

Manager Instrumen

t

Technicians

Manager Mechanic

al

Engineers

Techinicians

Helpers

Manager Packing

Packing Superviso

r

Packing Operators

Helpers

Manager Refinery

Operators

Helpers

Manager QC/LAB

Chemists

Jr. Chemists

Helpers

Manager System

Assistants

Manager Vanspati

Operators

Helpers

Manager Store

Assistants

Helpers

Manager Purchase

Purchase Officer

Assistnats

Manager Electrical

Electricians

Jr. Electricia

n



1.2. INTRODUCTION

About the groundnut

India is the Second largest producer of groundnuts in the world. Indian

groundnuts are available in different varieties: Bolds or Runners, Java or Spanish and

have a rich nutty flavour, sweet taste, crunchy texture and a relatively longer shelf

life. Groundnuts in India are available throughout the year due to a two-crop cycle

harvested in March and October. On an average, India produces 7-8 million tonnes of

groundnuts every year. In fact, considering the current export figures, India has a

much larger potential to supply high quality groundnuts to the international buyer.

Groundnuts are a high value crop that can be marketed with little processing

and can be used in a wide range of products. They are the second largest source of

vegetable oil, the largest being Soya beans. The oil can be used for cooking, they can

be used as a base for confectioneries and they can be used to make groundnut butter.



1.3. INDUSTRY

China leads in production of groundnuts having a share of about 32.95% of overall

world production, followed by India (18%) and the United States of America (6.8).

COUNTRY WISE PRODUCTION

This figure is according to the Agricultural and Processed food products Exporting

Development Authority (APEDA).

0

2

4

6

8

10

12

14

16

Series 1

Series 1

Country Name

mill

ion

mat

ric

ton



Product Wise Export

Qty in MT. Value in Rs. Lakhs

Product: GROUNDNUTS

2006-2007 2007-2008 2008-09

Product Qty Value Qty Value Qty Value

Ground-nuts

HPS Kernels 152,560 48,318 228,587 90,014 289,879 117,110

Other Ground-

nuts HPS not

of seed quality

in shell not

roasted or

cooked

26,644 8,346 15,787 5,805 3,189 4,880

Other Ground-

nuts HPS

kernels

37,612 11,961 11,147 4,174 3,248 1,417

Ground-nuts

HPS of seed

quality in shell

not roasted or

cooked

2,677 934 2,088 762 1,034 332

Other

Groundnuts in

sell bot roasted

or cooked

31,858 10,262 11,977 4,650 536 159

Other Ground-

nuts of seed

quality

76.35 21.46 0.50 0.09 1.7 0.3

Total 251,428.35 79,846.46 269,587.50 105,407.09 297,890.7 123,900.93



This above Export figure shows that the demand of the Groundnut is increasing year

by year.

1.4 LITERATURE REVIEW

History of groundnut

It has been reported that South America was the place, from where cultivation

of Groundnut originated and spread in Brazil, Southern Bolivia and North-western

Argentina. Groundnut was introduced by the Portuguese from Brazil to West Africa

and then to South-western India in the 16th century. Groundnut is famous by

Mongphali in India. The groundnut belongs to the pea and bean family and is a

leguma but is considered as nut because of its high nutrition value.

Types of Groundnut

HPS (hand pick seed) is the main type of groundnut and in that there are two types of

groundnut:

(1) JAVA

(2) BOLD

Amongst these types of peanut JAVA is very famous. In every Groundnut

there are three part of it (a) Husk (b) kernel (c) chilka. It is very beneficial that

every part of the groundnut is used and there is not a single part of groundnut

which is of no use for the owner.



JAVA TYPE

Groundnuts of Java type are of light red color. They are little bit shinning.

These types of groundnuts are cultivated twice in a year (September- December and

May- June). These types of groundnuts hold one condition that if we purchase 20 kg

of shell, then 15 kg of groundnut must be there in 20 kg. If this condition is not

satisfied then we have to cut the payment of that much amount from the balance

payment. Java is exported 90% of the total production and remaining 10% is

consumed in India. 10% java type groundnut is consumed in Seed. Java type

groundnut is famous due to its more calories, protein and having the big proportion of

oil.

JAVA TYPE GROUNDNUT



BOLD TYPE

The pods are larger than those of the Java types and constriction is more well-

defined. The shell is thicker than that of Java types. The kernels are oval, larger than

those of the Java types and covered with light red-coloured skins which speedily

darken. Bold type groundnut is cultivated twice in a year (September- December and

May- June). In Bold type groundnut there is one condition is that if we purchase 20 kg

of shell then in that 14.5 kg of groundnut must be there if this condition is not

satisfied then we have to cut the payment of that much amount from the balance

payment. Out of the total production 60% of bold type groundnut is exported while

remaining 40% is consumed in India which is mainly used as Roasted groundnut.

Bold type groundnut is directly consumed in eating as it is good in taste.

BOLD TYPE GROUNDNUT



Uses of Groundnut

1) Mainly groundnuts are consumed in three ways i.e. Roasted groundnut,

Groundnut oil and Groundnut butter.

2) Java is mainly exported because it contains maximum quantity of the oil.

3) Bold is mainly consumed in the local market of country in different things like in

chikki, bhujiya, chevda etc. it is seen that bold groundnuts are very tasty.

4) The groundnuts are consumed in many ways and various forms. They may be

eaten raw, boiled, steamed or roasted. They are sometimes eaten as a sweetmeat

by coating them with sugar. In Western countries, they form an important

constituent of confections. They are used in nut chocolates, candies and

sandwiches.

5) A large number of food products are prepared from the groundnuts. The

groundnut flour is becoming increasingly popular in the Western country. It is by

far superior to wheat flour in nutritive value. Groundnuts may be used for

preparing nutritive and tasty milk. About one pound of lightly roasted nuts may be

soaked in water for about two hours. The skin of the nuts should be removed by

rubbing in water. The soaked nuts are made into a fine paste in a stone grinder.

The paste is mixed with water to the quantity of three times the bulk of the paste.

It should be strained through a thin cloth before use. The milk may be boiled

without loss of its food value. Sugar may be added to taste. In food value and

composition. The groundnut milk is similar to dairy milk and may be used as its

substitute.

6) The groundnut milk may be converted into curd. A small quantity of the cow milk

curd may be added to the milk and allowed to remain overnight to set. It tastes

like milk curd and possesses much of its qualities.

7) Groundnuts are often used as vegetables when the seeds are still tender. They may

also be taken in their germinated form. Germination not only renders the more

digestible. But also enhances their food value, especially in their vitamin B and C

contents.



Benefits of Groundnut

Nutrition Benefits of Eating Groundnuts are:

1) Groundnuts and groundnut products are very beneficial in the treatment of

hemophilia and other such inherited blood disorders. People suffering from

nose bleeding also benefit from eating groundnuts and it is also helpful in

reducing excessive menstruation bleeding in women.

2) Five main nutrients required by the body to maintain and repair the tissues

namely food energy, protein, phosphorous, thiamin and niacin. These five

nutrients are found in good quantity in groundnuts.

3) Groundnuts are rich vitamins and contain at least 13 different types of

vitamins that include Vitamin A, B, C and E. along with this, groundnuts are

also rich in 26 essential minerals like calcium, iron, zinc, boron, etc. these

help in brain function and development and also help to maintain strong

bones.

4) It is recommended that growing children, expecting women and nursing

mothers consume roasted groundnuts with jaggery and goat‟s milk. It is said

to provide resistance and immunity against dangerous infections like

Hepatitis and also Tuberculosis.

5) Groundnuts are rich in anti-oxidants and a chemical called resveratrol. These

help in reducing the risk of contracting cardiovascular diseases, cancer risk

and also help in anti-ageing, thus keeping the body young and fit.



Given here is the value of different nutrition in 100 grams of Groundnut.

Calcium - 93 mg

Carbohydrate - 16.13 gm

Copper - 11.44 mg

Fat - 49.24 gm

Fibre - 8.5 gm

Iron - 4.58 mg

Magnesium - 168 mg

Manganese - 1.934 mg

Phosphorus - 376 mg

Potassium - 705 mg

Protein - 25.80 gm

Sodium - 18 mg

Water - 6.50 gm

Zinc - 3.27 mg

Places where groundnuts are cultivated:

JAVA groundnut is cultivated mostly in the states like Gujarat, Maharashtra and West

Bengal. BOLD groundnut is cultivated in Gujarat and Rajasthan.

Major trading centres of groundnut and derivatives in India are:-

Kutch (Gujarat)

Rajkot (Gujarat)

Ahmedabad (Gujarat)

Gondal (Gujarat)

Junagadh (Gujarat)

Mumbai (Maharashtra)



2. METHODOLOGY

As Company maintains good relations with the other producers of groundnut

processing Plants in Gujarat. So, company gave us chance to visit some plants. We

have visited the plant of Madhav Seed Industries (Jamnagar), Tanna Agro Impex Pvt

Ltd (Jamnagar) and Kanaiya Enterprise (Anjar).

Madhav Seed Industries:

Madhav Seed Industries has Groundnut processing plant in Jamnagar. There

we met the manager of Madhav Seed Industries, Mr. Rajubhai Sonaiya. They have the

plant of removing kernel from the shell and grading it according to the requirement.

They used to sell the kernel to the exporter who exports the kernel directly to the

foreign countries. Wastage such as unopened shell and husk is also been sold in local

market. The capacity of the plant was 10 tons per day working 12 hours in a day.

They have two machines.

Tanna Agro impex plant:

In Tanna Agro Impex plant, (situated in Jamnagar in Gujarat) is fully equipped

to rollout the quality Groundnuts. They remove the red cover of the kernel, that

groundnut is known as blenched groundnut. This blenched groundnut is totally

exported, especially to Europe. They had the quality certificate from APEDA. They

have to work according to norms and regulation of the European countries. Safety and

cleanliness is given the first Preference to the company. They are having capacity of

10 tons per day working 8 hours in a day.

Kanaiya Enterprises:

Kanaiya Enterprises has Groundnut processing plant in Anjar (Kachchh). They

have the same process as Madhav Seed Industries is having. The capacity of the plant

is 10 tons per day working 12 hours in a day.



As we had seen the process of both Plants, the process of the Madhav Seed

Industries and Kanaiya Enterprise is given in the project and this same process is been

suggested by us to company in this project.

Details of Proposed Project

This project is regarding the feasibility of groundnut. We have done the study

regarding groundnut which include below points:

1) Where to establish the plant.

2) From where to purchase the groundnut.

3) Process of removing the Kernel from that Shell.

4) Process of grading related to the order of the customer

5) Process of packaging the finished goods

6) Loading of the finished goods

7) Process of Blench groundnut (future perspective).



3. ANALYSIS AND INTERPRETATION

Plant Location

The Groundnut market is spreading rapidly, so JMD Oils Pvt. Ltd. wants to

enter in the market. In India, Gujarat is among the largest producer of groundnut, it is

very beneficial to establish the plant in Gujarat. Now in Gujarat, the best quality of

groundnut is mostly cultivated in Kutch and Saurashtra. Groundnuts of Gujarat are

mostly exported to foreign countries. If the company is near to any port, it will be

very beneficial as the transportation cost will be less. In Kutch, there are two ports,

one is Kandla port and another is Mundra port. So, the plant should be established in

Kutch only rather than in Saurashtra. The availability of the raw material is high in

Kutch.

In Kutch, JMD Oils Pvt. Ltd. is already having its plant situated at Bhimasar

village. The benefit of this location is that it is near to port, the railway station is just

opposite to its gate. One more benefit is of easy availability of labour from Bhimasar

village.

Raw Material

1. It can be directly purchased from farmers.

2. It can be purchased from mediators (Agents).

3. It can be purchased through market yard.

If raw material is purchased from farmers, then it will cheaper than mediator

because he takes 1% commission from purchaser. Broker makes adulteration into the

material which causes loss for the company.



Rates of Groundnut

These rates are taken on the basis of current market price. Here are selling

price of the kernel:

JAVA

Rs.51.00/KG (40-50 condition)



BOLD

Rs.49/KG (40-50 condition)



Condition satisfaction procedure

We have to take the weight of 28.5 gm and count the number of kernels in it.

We can obtain the quality of the kernel through this way. At the time of purchase and

sales, also one condition of moisture in it, but we do not consider that thing because it

is totally based on nature.



We have done our whole study of the kernel 40-50. Because this type of

groundnut has high demand in market.

Process of remove the kernel through machine

After purchasing the raw material the kernel is removed from shell through the

huller machine:

HULLER MACHINE



First of all when raw material is introduced in the plant following process starts:

The shell comes into this machine

Husk (shell cover) are thrown out by the machine

Three things comes out from the machine

a. Kernel

b. Small Kernel

c. Dust particles and unopened kernel

Peanut is filled in bags for manual checking.

Bags are taken for manually checking.

Kernel are separated from any stone left, unopened shell in those

Bags. This work is mostly done by the labours.

Clean kernel are put into another machine which do grading

according to the requirement of the customer.



GRADING MACHINE

This is grading machine which separates the kernel according to the sizes.



THE PROCESS OF GRADING TO THE FINISHED GOODS

Small stones and dust are again separated from peanut manually.

Peanut is transferred to grading machine.

Setting of grading machine as per requirement.

Packed in bags of 50 kg.

Transportation.



Possibility of Wastage

There is a possibility of 37 % wastage of input (shell) which include dust, stones and

unopened shell.

Process of Tanna Agro Impex Pvt.Ltd.

Tanna Agro Impex Pvt. Ltd. is doing the business of more than one commodity.

We had visited the plant of blench groundnut. Blench groundnut Plant process is

given below:

1) Purchase the kernel from local market (java type).

2) Kernel is roasted at 95 degree Celsius for 15-17 minutes.

3) After that Material is process into cooling machine for 10-15 minutes.

4) Then material process in the blencher which throws the red cover of the

groundnut.

5) Materials are packed into the bags of 7kg, 10kg and 50kg according to the

order of customer.

There are of 15-20% wastage due to split (two part) of blench groundnut since

it is not accepted by the purchaser.



Financial Analysis

Materials and Inputs

Raw and Auxiliary Materials:

The principal raw material required by the Groundnut plant is shell (pod), which is

produced locally in Kutch and Saurashtra in Gujarat. During the process of removal of

kernels from the shell there is the weight loss of 30% of the input. Therefore, taking

this weight loss into account, the annual requirement for groundnut shell at 100 per

cent capacity utilization rate is estimated to be (20 tonnes per day working 350 days

in a year) 7,000 tones +wastage(0.3694 x 11,100 tonnes) = 11,100 tonnes shell.

Annual cost of shell at the rate of Rs.32 per kg will amount to Rs. 3,552 lakhs.

After getting the Groundnut from the shell it is graded as per the order given by the

customer and after that it is packed into the bag of 50kg capacity. The requirement

and the cost of the bag is Rs. 42 lakhs the calculation for the same is given below.

Sr. No.

Item

Total annual

Quantity ( In

tonnes)

Value (Rs. In

Lakhs)

Source

1 Shell 11,100

Rs. 32/kg

3,552 Directly

purchase, agent

through,

market yard

2 Bags (50 kg) 1,40,000 No.

Rs.30/bag

42 From local

market

TOTAL 3,594



Production Programme:

The annual production programme is formulated on the basis of the market forecast

and selected plant capacity. It is assumed that the plant will achieve 100% capacity in

the first year itself. This Calculation is for 40/50 groundnut.

Sr. No. Product Total Qty.

per year

(in tons)

SP Per

Kg (in

Rs.)

Sales

Revenue (Rs.

in Lakhs)

Capacity

Utilization

1 Groundnut 7,000 51 3,570 100%

2 Husk (by

product)

3,000 1.8 54

3 Unopened

shell

1,100 40 440

TOTAL 11,100 4,064

Source of Plant and Machinery:

The machinery and equipment required for groundnut production could be obtained

from the following companies:

1) JAY SHAKTI ENTERPRIES

ATKOT ROAD,

NEAR NEW BUS STAND

JASDAN :- 360050

Ph :- 02821 – 220182

Mo :- 098244 1148

2). UNISOFT PHERIPHERIALS

3, SHREYAS ANAND COMPLEX, 1ST FLOORT,

ASHRAM ROAD, NR. KUVADAVA ROAD,

RAJKOT, GUJARAT 360003



Machinery and Equipment:

The total cost of machinery and equipment is estimated at Rs.4,78,500. Detailed list

of machinery and equipment is given in below Table.

Sr no. Machinery No Amount (Rs.)

1 Huller machine (decorticator)

(capacity-10 tons)

2 3,68,000

2 Grading machine(capacity-10 tons) 2 98,000

3 Weight machine 1 12,500

TOTAL 4,78,500

Utilities:

The major utilities required by the plant are electricity. Annual electric

consumption of the plant and their estimated cost, at 100 per cent capacity utilization

rate is indicated in Table. The total annual cost of utilities is estimated at

Rs.11,30,960.

Sr. no Particulars Annual

Requirement

Total Annual

Expenses

Remarks

1 Electricity 2,01,600 units

(rate-5.60)

11,28,960

2 Oiling 2,000 It is outsource

to the party

TOTAL 11,30,960

Total HP (hoursepower) is required by the machine is 24HP and in one hour there are

requirement of 24 units of electricity in a day 576 units So, total requirement of the

electricity are 2,01,600 units (working 350 days in a year).



Man power Analysis:

Company can work in two shifts and requirement regarding the manpower is

given below. In this industry, usually male workers are paid fixed salary while female

workers are paid on the basis of total tonnes of output of their work. But in our

project, it will depend on the company‟s structure of payment.

The groundnut plant will create job opportunities for 46 persons. The factory will

be in the compound of JMD Oils Pvt. Ltd. near Bhimasar. So, it is easy to get worker

from the place it is also near to the Gandhidham and Bhachau. The detailed

manpower requirement and the estimated annual labour cost is given in the table. The

total cost of manpower is estimated Rs.41,98,000.

Sr. No. Description Req.

No.

Monthly Salary

(INR)

Annual Salary

(INR)

1 Quality Controller 1 20,000 2,40,000

2 Production Supervisor 2 12,500 3,00,000

3 Machine Operators 4 9,000 4,32,000

5 Purchaser Manager 1 20,500 2,46,000

6 Labour (male) 16 7,500 14,40,000

6 Labour (female) 22 Per bag 11 Rs 15,40,000

TOTAL 46 41,98,000



Transportation cost:

This cost is paid as per the agreement is taken place between two party.

Cost of the project

Fixed Capital

S no Item Value (Rs. In lakhs)

1 Land and Building 12.45

2 Machinery 4.78

3 Furniture & Fixture 0.50

Total 17.73

Land required is 743 square meters @ rate of 330/sq.mt and construction of building

is taken 10,00,000.

Working Capital

Sr. No. Item Duration Quantity (in

tone)

Value (Rs)

1 Raw Material stock 7 days 222 71,04,000

2 One month production

expenses (Utilities+ wages+

Salaries)

4,52,415

TOTAL 75,56,415



Total Cost of project

Sr. No. Particular Value (Rs.)

1 Fixed capital 17,73,190

2 Working capital 75,76,415

3 Preliminary and pre-

operative expenses

50,000

Total 93,99,335

Means of Finance

Sr. No. Particular Value (Rs) Remarks

1 Term Loan NIL NIL

2 Own investment 93,99,335 NIL

3 Subsidy NIL NIL



Project Profitability Analysis

Sr. No. Description Value (Rs.)

1 Sales Revenue 40,64,00,000

2 Manufacturing expenses 36,47,28,960

3 Selling & Distribution expenses ( per ton Rs.

100)

7,00,000

4 Administrative expenses NIL

5 Interest NIL

6 Depreciation 2,63,480

7 Gross profit 4,07,07,560

8 Income tax @ 34% 1,38,40,570

9 Net profit 2,68,66,990

Now,

Gross Profit = Gross Profit/ sales

= (4,09,71,040/40,64,00,000) *100

= 10.09%

Net Profit = (4,07,07,560/40,64,00,000)*100

= 10.01%



SWOT Analysis for the Company

As we have studied all the parts for establishing Plant. Now, SWOT Analysis for

company establishing the groundnut plant is as follows:

Strength

1) Company has good brand value innorth india.

2) Company has the good experiencein commodity market.

Weakness

1) First time enter into thiscommodities.

Threat

1)Threat of natural environment.

2) Threat of government policies.

Opportunity

1) Chances of getting new marketfor the organization.

2) Company has good location nearto the railway station and port.

3) Company has good employeesrelationship in the organation

SWOT analysis



4. FINDINGS

Place: We have found that JMD Oils Pvt. Ltd. is having the plant in Bhimasar

and have the sufficient land which can be efficiently utilised for groundnut processing

plant.

Product: Company has the opportunity to launch new products of groundnut

like roasted peanut and peanut butter. Indian market is adopting foreign trends, their

taste and preferences will attract towards peanut butter since, peanut butter is utilised

mostly in foreign countries.

By product: JMD Oils Pvt. Ltd. is already having the boiler and refinery plant.

There are requirement of coal and fuel for burners. But, husk of groundnut can be

utilised as burner. It helps in cost reduction.



5. FUTURE SCOPE

Company can also launch groundnut butter (known as peanut butter), roasted

groundnut and Blench groundnut. The Scope of roasted groundnut is wide in India.

Company can also sell to the local dealer by making its own brand in the market.

Scope of groundnut butter is wide in foreign market especially in US market.

Company can also directly export all products to the foreign countries.



6. CONCLUSION

After analysing all the technical and financial data of the groundnut plant, it is

observed that it is very beneficial for the company to establish the plant in JMD

complex. By doing this, company can have a different lines of product. Looking at

scenario, Groundnut commodity sector is booming in India and even Gujarat is

having the biggest market and producer of Groundnut. Highest export of groundnut is

through Gujarat in India. In this plant, investment is less but profit is high. So,

through the study we can conclude that company should establish the groundnut plant

in their premises only.



BIBLIOGRAPHY

Websites:

www.unisoftpheripherals.com

www.apeda.org

www.best-home-remedies.com/herbal_medicine/nuts_seeds/groundnut.htm

www.infobanc.com

final sumer project

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