1
BISCUIT PLANT
1.1
Introduction
Biscuit making is a conventional activity in many parts of the country. Despite the advent of
modern, large capacity and automatic biscuit making plants, large section of people
especially in semi-urban and rural areas still prefer fresh biscuits from local bakery as they
are cheap and offer many varieties. These manufacturers are able to cater to some typical
local palate as well. Thus, they are able to withstand competition from organised sector units.
1.2
Objective
The primary objective of the model report is to facilitate the entrepreneurs in understanding
the importance of setting up unit of biscuit plant. This model report will serve as guidance to
the entrepreneurs on starting up such a new project and basic technical knowledge for
setting up such a facility.
1.3
Raw Material Availability
The basic raw material for the manufacture of biscuits is wheat flour. Major wheat producing
districts in the state are Hosangabad (4.19 lakh MT production), Ujjain (3.85 lakh MT), Dhar
(3.51 lakh MT), Indore (3.34 Lakh MT) etc.
1.4
Suitable Location
The suitable recommended location of the biscuit plant is Hoshangabad, Ujjain, Dhar, Indore,
Vidisha, Sehore etc. There is already a food park at Hosangabad,
1.5
Market Opportunities
Market for biscuits is scattered all over the country. There are three distinct market segments
viz. urban, semi-urban and rural. Urban and semi-urban markets are dominated by many
national and regional brands but even then many local manufacturers have also carved a
special niche as their products are fresh, they offer many varieties and they are cheaper.
1.6
1.6.1
Project description
Applications
Biscuits are eaten by all sections of people across the board round the year. They are, thus,
mass consumption items with number of varieties and shapes. The market is scattered.
There are some dominant national and regional brands. Biscuits can be manufactured at a
location which is close to the market.
1.7
Capacity of the Project
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The capacity of the project is 50 tonnes of biscuits per year.
1.8
Critical success factors
Rural and certain semi-urban markets are mainly captured by small manufacturers. This note
primarily suggests entering this market. Apart from domestic customers, there is a vast
market at bus and taxi stands, railway stations, weekly hats or bazaars, highway eateries or
dhabas and melas or fairs. A small delivery vehicle can take care of destinations located in
the vicinity of about 50-60 km. Attractive margins to traders/retailers will be crucial.
1.9
Manufacturing process
The process is conventional and easy. Wheat flour along with other ingredients is mixed with
water and dough is prepared. Then it is kept at a normal room temperature for about couple
of hours to allow proper fermentation. Then it is placed in biscuit moulding trays and these
trays are placed in oven for baking. After requisite baking, trays are taken out, cooled and
biscuits are packed. The process flow chart is as under:
Mixing and Dough Making
Fermentation
Baking
Packing
1.10 Project component and cost
PARTICULARS
Project Profiles - MP Agros
Unit
2
Qty
Cost/unit
Total
Global AgriSystem Pvt. Ltd.
Your Partner in Agri-business
LAND & BUILDING
Land
Land Development
Land Area
Building
Production Block
Main Production Area
Store cum packing room & Sales Counter
Misc Handling Area
Contingencies
PLANT & MACHINERY
Flour Sifter
Dough Kneader
Electrically Operated Oven
Biscuit Moulding Tray
Contingencies
MISCELLANEOUS FIXED ASSETS
Furniture and Fixture
Sealing and wraping machine
Vehicles-Delivery LCV
Weighing Scale
Others
Contingencies
PRE-OPERATIVE EXPENSES
Establishment
Professional Charges
Security Deposits
TOTAL
400
250.00
13.45
1.00
400
500.00
2.00
SqM
SqM
SqM
100
50
100
10%
5,000.00
5,000.00
2,000.00
LS
1
2
1
70
15%
70,000.00
50,000.00
250,000.00
30,000.00
LS
No
No
No
LS
1
2
2
1
1
15%
40,000
50,000
200,000
25,000
20,000
1
1
1
230,000
200,000
160,000
5.00
2.50
2.00
0.95
28.98
0.70
1.00
2.50
21.00
3.78
6.73
0.40
1.00
4.00
0.25
0.20
0.88
5.90
2.30
2.00
1.60
55.06
SqM
1.10.1 Building
The building development cost will be around Rs 10.45 lakhs.
1.10.2 Plant and Machinery
It is suggested to have installed production capacity to manufacture 105 tonnes of biscuits
per year assuming working for about 330 days for 12 hours every day. This would require
flour sifter, dough kneader, electrically operated oven, biscuit moulding tray and sealing and
wrapping machine. All these machineries will cost around Rs. 28.98 lakhs.
1.11 Miscellaneous Assets
The miscellaneous assets will cost around Rs. 6.73 Lakhs.
1.12 Preliminary & Pre-operative Expenses
A provision of Rs. 5.90 lakhs would take care of pre-production expenses like establishment,
professional charges, security deposits etc.
1.13 Working Capital Requirement
(RS IN LACS)
ITEMS
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Year 1
3
Year 3
Year 5
Global AgriSystem Pvt. Ltd.
Your Partner in Agri-business
STOCK OF RAW MATERIAL & PACKING
MATERIAL
SUNDRY DEBTORS
TOTAL
MARGIN
MPBF
INTEREST ON WC
2.59
3.98
3.98
10.24
12.82
3.21
9.62
1.06
15.75
19.73
4.93
14.80
1.63
15.75
19.73
4.93
14.80
1.63
1.14 Means of Finance
EQUITY CAPITAL
MOFPI SUBSIDY
TERM LOAN
FINANANCIAL INSTITUTIONS
-Payable half yearly Installments
TOTAL
25%
50.00
10
10.00%
2.30
35.00%
25.00%
20.39
14.57
40.00%
23.31
100%
58.26
1.15 Cash flow statement
PARTICULARS
SOURCES OF FUNDS
EQUITY CAPITAL
SUBSIDY
NET PROFIT
(INTEREST ADDED BACK)
DEPRECIATION
PRELIMINARY EXP.W/O
INCREASE IN TERM LOAN
INCREASE IN BANK
BORROWINGS-WC
TOTAL
Year 1
Year 3
Year 5
Year 7
-
-
-
-
1.21
9.06
8.23
7.47
3.87
0.84
9.62
3.87
0.84
1.48
3.87
0.84
-
3.87
0.84
-
1
5.54
15.25
12.94
12.18
Year 1
Year 3
Year 5
Year 7
20.39
12.39
21.01
9.62
63.40
20.39
21.65
11.81
14.80
68.65
20.39
33.67
2.61
14.80
71.46
20.39
45.74
0.00
14.80
80.93
Year 3
57.75
43.98
13.77
3.87
3.15
0.84
5.90
5.90
Year 5
57.75
44.81
12.94
3.87
2.23
0.84
5.99
5.99
Year 7
57.75
45.57
12.18
3.87
1.63
0.84
5.84
5.84
1.16 Projected balance sheet
PARTICULARS
LIABILITIES
EQUITY CAPITAL
RESERVES & SURPLUS
TERM LOAN
BANK BORROWINGS-WC
TOTAL
1.17 Projected profit and loss account
PARTICULARS
NET REVENUE REALISATION
TOTAL EXPENSES
GROSS PROFIT
DEPRECIATION
INTEREST
PRELIMINARY EXP.W/O
PROFIT BEFORE TAX
RETAINED PROFIT
Year 1
37.54
31.62
5.92
3.87
3.39
0.84
(2.18)
(2.18)
1.18 Key Indicators
NET PRESENT VALUE at current Inflation (Rs. in lakhs)
INTERNAL RATE OF RETURN %
AVERAGE DSCR
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54.85
21.79
1.97
Global AgriSystem Pvt. Ltd.
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BREAK EVEN POINT %
PAY BACK PERIOD ( YEARS)
80.23
5.06
1.19 Man power requirement
PARTICULARS
SUPERVISORY STAFF
Production Supervisors
Accountant
WORKERS
Skilled Workers
Semi-Skilled Labour
Salesman
Driver
TOTAL
NOs.
2
1
2
4
2
2
13
1.20 Assumptions
Project & Financing
Contingencies on Building
Contingencies on Equipment
Term Loan
Rate of Interest on Term Loan
Subsidy Considered
Subject to ceiling
Expected time of Installation
Moratorium
CAPACITY
Rated Capacity Per Annum
80% of Installed capacity
Number of Operational Days
DAYS
Working Hours Per day
Hrs
CAPACITY UTILIZATION
Year I
Year II
Year III
SALES PRICE
W S Price
OTHER EXPENSE
Commission
Marketing Expenses
POWER
Connected Load
HP
DEPRICIATION AS PER COMPANY’S ACT
BUILDING
PLANT & MACHINERY
MISC. FIXED ASSETS
LAND & SITE DEVELOPMENT
MAINTENANCE
BUILDING
PLANT & MACHINERY
MISC. FIXED ASSETS
LAND & SITE DEVELOPMENT
Months
Months
TPA
10%
15%
40%
10%
25%
10
6
105
330
12
65%
90%
100%
55,000
5.0%
2.5%
40
3.34%
10.34%
7.07%
1.63%
1.00%
2.00%
1.50%
1.00%
1.21 Sources of technology

Master Mechanical Works Pvt Ltd, 75,Link Road, Lajpat Nagar 3, New Delhi- 110024

Nagpal Brothers, C-127, Phase 2, Mayapuri Industrial Area, New Delhi- 110064
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Global AgriSystem Pvt. Ltd.
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
Delight Engg. Works, Lane No. 8 Aslat pura, Moradabad-244001.
Tel No. 2498398/2491687, Fax: 2494378

Foodmac Engg. Pvt. Ltd. 37038, Sector 2, Parwanoo-173220 (HP).
Tel No. 233294/233295, Fax: 233296

KGN Engg., Plot No. 174, Old Airport Road, Secunderabad-500011. Tel No. 27952147
The actual cost of projects may deviate on change of any of the assumptions.
Project Profiles - MP Agros
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Global AgriSystem Pvt. Ltd.
Your Partner in Agri-business