6
COFFEE FL AVOURED MILK
PRODUCT CODE
: N.A.
QUALITY AND STANDARDS
: As per PFA Regulations
PRODUCTION CAPACITY
: 4,65,000 (crates) of 24 bottles (200 ml) of the
value of Rs. 418.5 lakhs per annum
MONTH AND YEAR
OF PREPARATION
: March, 2003
PREPARED BY
: Small Industries Service Institute,
H. Thangmawizwala Building, Republic Road,
Aizwal (Mizoram)–796001.
Phone No:0389-2323448
INTRODUCTION
Coffee beverage imparts refreshing
and stimulating effect and is extremely
popular throughout the world. Almost
entire consumption of coffee is in the
form of beverages, with or without milk
or cream, chilled or hot. Though the
consumption of coffee is increasing dayby-day in the country, no attempt has
so far been made to commercialize a
ready-to serve coffee beverage on a
large scale except limited efforts made
by a few co-operative milk marketing
societies in some States. The nonavailability of the cost of manufacture
of this product appears to be one of the
main reasons that the food industry has
not taken up its production in organized
way. This profile highlights the cost of
manufacture for ready to serve coffee
flavoured milk drink.
MARKET POTENTIAL
The availability of coffee flavoured
milk in the market compared to its
potential demand, is very small in
volume. As the nutritional awareness has
caught on among the consumers, the
demand for such drinks is increasing. It
is equally liked by all irrespective of age.
It could register good sale at airports,
bus stops, railway stations, restaurants,
hotels, picnic spots, college canteens,
etc. Hence the availability of market
would not be a big challenge for such
nutritional products.
B ASIS AND PRESUMPTIONS
1. The scheme is based on 75%
efficiency, 24 hrs. a day for 300
days a year.
2. Time period required to achieve
full capacity utilization is possibily
4-5 years.
3. Labour wages is as per the rates
prevailing in the area.
4. Interest rate for total capital
investment has been taken @14%
per annum for both fixed and
working capital.
36
COFFEE FL AVOURED MILK
5. Margin money is 25% of total
capital investment.
6. Pay back period of the project is
7 years.
7. Land cost and construction cost
have been taken @ Rs. 10/sq ft.
and Rs 300/sq. ft. respectively.
IMPLEMENTATION SCHEDULE
1. SSI Registration
2. Acquisition of land
3. Preparation of Project
report
4. Financial assistance
(From State Financial
Corporation, Bank)
5. Building construction
6. Arrangement of power
7. Acquisition of machinery
8. Installation of Machinery
9. Appointment of Staff
and labour
10. Trial production and
trouble shooting
11. Commercial production
Total time for the commen
cement of commercial
production
1 Week
1 Month
1 Month
3 Months
3 Months
1 Month
2 Months
1 Month
15 Days
15 Days
1 week
1 Year
TECHNICAL ASPECTS
Process of Manufacture
The fresh cow and buffalo milk
received is first standardized to its fat
content. The milk is then heated to 40ºC
and filtered through a double muslin
cloth. Then again heated to 60ºC and
stabilizers like TSC and DSHP added @
0.002%. This milk is then passed to
homogeniser for breaking the fat
globules and make uniformity in the
product. On the other side, the coffee
powder of 5% concentration is added to
hot water and filtered through a muslin
cloth. Finally homogenized milk, hot
coffee water and sugar syrup are mixed
in proper proportion and heated to 85ºC
and then sterilized at 115ºC for 30
minutes. The sterilized bottles are cooled
at room temperature and then stored in
wooden crates.
Quality Control and Standards
As per PFA Regulations.
Production Capacity (per annum)
Quantity : 4,65,000 (crates of 24 bottles
(200 ml)
Value
: Rs. 418.5 Lakhs.
Motive Power
80 HP
Pollution Control
As per the State Govt. Pollution
Control Board.
Energy Conservation
Proper insulation may be done to
avoid heat loss in heating equipments.
FINANCIAL ASPECTS
A. Fixed Capital
i) Land and Building
Land:
Amount (In Rs.)
10,000 Sq. ft. @ Rs10/Sq. ft. 1,00,000
Building:Production Hall 40' × 50' = 2,000 Sq. ft.
Store (R.M)
30' × 30' = 900 Sq. ft.
Store (F.P)
30' × 30' = 900 Sq. ft.
Laboratory
10' × 15' = 150 Sq. ft.
Office
10' × 15' = 150 Sq. ft.
W.C and Bath
10' × 5' = 50 Sq. ft.
4,150 Sq. ft. @ Rs. 300 per Sq. ft. 12,45,000
Total
13,45,000
COFFEE FL AVOURED MILK
B. Working Capital (per month)
ii) Machinery and Equipments
Sl. Particulars
No.
Qty.
Rate
(In Rs.)
Total
(In Rs.)
1. Water Treatment 1 No.
unit
50,000
50,000
Sl. Designation
No.
No
Salary
(In Rs.)
Total
(In Rs.)
1
6,000
6,000
b) Production Supervisor 2
3,000
6,000
c)
1
3,000
3,000
d) Accountant
1
3,000
3,000
e) Clerk-cum-Typist
1
1,500
1,500
f)
Skilled Worker
4
1,500
6,000
g)
Unskilled Worker
15
1,000
15,000
h) Peon
1
1,000
1,000
i)
1
1,000
1,000
a) Manager
2. Boiler
1 No. 1,25,000 1,25,000
3. S.S. Tank 1000
lts Cap
3 Nos
20,000
60,000
4. Plate heat
exchanger
1 Set
50,000
50,000
5. Homogeniser
(2000 ltrs/
Hr Cap.)
1 No. 1,50,000 1,50,000
6. Bottling Plant
(including bottle
washer, filter,
crown corking
m/c and
sterilizer of
100 Bottle/min)
1 set. 12,00,00012,00,000
Sales Supervisor
Watchman
Total
42,500
(ii) Raw Material (per month)
7. Testing
equipment
8. Weighing
balance
(i) Personnel
–
50,000
50,000
5,000
5,000
1 No.
Total
16,90,000
Erection and
Electrification
@ 10%
1,69,000
Glass bottle 8000 crates @
in wooden
Rs.90 per crate
crates
7,20,000
Cost of office
equipment,
tables, etc.
30,000
Total
iii) Pre-operative Expenses
Total Fixed Capital
26,09,000
Rs. 30,000
Particulars
1. Milk
2. Sugar
3. Instant
Coffee
Qty.
1,87,500 Lt.
1,425 Kg. 110/Kg.
1,56,750
L. S.
–
10,000
62 Cartons
of 50 gross
Carton
1200/
each
74,400
Total
(iii) Utilities
1. Water
3,000
2. Electricity
10,000
3. Fuel
15,000
Total
13,45,000
(iv) Other Contingent Expenses
Machinery and Equipments
26,09,000
1. Postage and Stationery
Total
39,84,000
28,25,650
Amount (In Rs.)
Land and Building
30,000
13/Lt. 24,37,500
1,47,000
Amount (In Rs.)
Pre-operative Expenses
Total
(In Rs.)
10,500 Kg. 14/Kg.
4. Stabiliser
(Trisodium
Citrate)
5. Crown Caps
Rate
(In Rs.)
28,000
Amount (In Rs.)
700
2. Telephone
1,000
3. Consumable Stores
2,500
37
38
COFFEE FL AVOURED MILK
Other Contingent Expenses
(In Rs.)
4. Transport Charge
10,000
5. Repair and Maintenance
5,000
6. Advertisement and Publicity
10,000
7. Insurance
2,000
8. Taxes
2,000
9. Miscellaneous Expenditure
5,000
Total
38,200
(v) Total Recurring Expenses
(per month)
Amount
(In Rs.)
1. Personnel
42,500
2. Raw Material
28,25,650
(3) Net Profit (per annum)
Turnover – Cost of Production
Rs. 4,18,50,000 – Rs. 3,69,87,000
= Rs. 48,63,000
(4) Net Profit Ratio
= Net Profit (p.a.) ×100
Turnover (p.a.)
= 48,63,000 × 100
4,18,50,000
= 11.6%
(5) Rate of Return on Total Capital Investment
= Net Profit (p.a.) × 100
Total Investment
= 48,63,000 × 100
98,52,700
3. Utility
28,000
= 49.3%
4. Other Contingent Expenses
38,200
(6) Break-even Point
Total
29,34,350
C. Total Capital Investment
Particulars
B.E.P = Annual Fixed Cost × 100
Annual Fixed Cost + Annual Net Profit
Annual Fixed Cost
Amount (In Rs.)
Fixed Capital
39,84,000
Working Capital for 2 months
58,68,700
Total
98,52,700
40% Salaries
2,04,000
40% Utilities
1,34,400
40% Contingencies
1,83,360
Total Depreciation
3,95,150
Total Interest
FINANCIAL ANALYSIS
a) Recurring expenses
3,52,12,200
b) Depreciation on building @ 5%
62,250
Depreciation on machinery @ 10%
d) Depreciation on bottles @ 20%
e) Interest on total capital
investment @ 14%
1,88,900
1,44,000
13,79,378
Total
3,69,86,728
or Say
3,69,87,000
(2) Turnover (per annum)
Item
Qty.
Coffee flavoured 4,65,000
milk in 200ml.
Crates of
Bottle
24 bottles
13,79,378
Total
(1) Cost of Production (per annum) Amount (In Rs.)
c)
Amount
(In Rs.)
Rate
(In Rs.)
Total
(In Rs.)
90/ 4,18,50,000
crate
or Say
22,96,288
22.96 lakhs
B.E.P = 22.96 × 100
22.96 + 48.63
= 32%
Addresses of Machinery Suppliers
1. M/s. Mistri Sant Singh and Sons
3794, Mori Gate,
Delhi-110006.
2. M/s. Mildon and Co.
Plot No. 101, Road No. B-16 MCD
Chakala, Andheri,
Mumbai-93.
3. M/s. Larsen and Toubro Ltd.
Ballard Estate, Douggel Road,
Mumbai-110001
COFFEE FL AVOURED MILK
4. M/s. Pioneer Mechanical Works
G.T. Road, Ambala,
Punjab.
5. M/s. Rita Agencies
No. 3, 1st Crescent Road,
Park Road,
Gandhi Nagar,
Chennai-20.
6. M/s. SSP Pvt Ltd.
19 DLF, Industrial Area-II
13/4, Mathura Road,
Faridabad-121003
7. M/s. B.Sen Barry and Co.
65/11, New Rohtak Road,
New Delhi-110005,
E-mail: senbarry @ vsnl. Com
Addresses of Raw Material Suppliers
Locally available.
39
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