8/2/2019 PPR Projct
1/39
A
PRODUCT PROJECT REPORT
ONBISCUIT
PREPARED BY:
HARIA NIRJA
ACADEMIC YEAR: 2009-2010
GUIDED BY
PROF. GAURAV MEHTA
FOR PARTIAL FULFILLMENT OF T.Y.B.B.A.
SUBMITTED TO:
SAURASHTRA UNIVERSITY
RAJKOT.
SHRI G.H. GOSRANI COM. (ENG. MED.) and
SHRI D. D. NAGDA B.B.A. COLLEGE,
JAMNAGAR
1
8/2/2019 PPR Projct
2/39
DECLARATION
The undersigned MISS. NIRJA HARIA a student of T.Y.B.B.A. hereby
places the submission of PRODUCT PROJECT REPORTon BISCUIT under the in
charge of Prof. Gaurav mehta of Shri D.D. Nagda B.B.A. College, Jamnagar.
I, undersigned declare that this PRODUCT PROJECT REPORT is Biscuit is
not previously submitted to any other college.
Place: Jamnagar HARIA NIRJA
Date: TYBBA
2
8/2/2019 PPR Projct
3/39
ACKNOWLEDGEMENT
In preparation of this report, I have received encouragement and
support from various persons. I would like to express heart full thanks and
gratitude to all these persons.
I am thankful to Prof. Gaurav Mehta for guiding me for this project report.
I am thankful to Small Scale Industrial Department, Jamnagar, which helped
me a lot to provide information and other reports for reference. I would like to
thank my friends who have been with me through out the preparation of this
project and from whom I received support, cooperation and encouragement
for preparation of my Product Project Report.
Thanking you.
Place: Jamnagar Nirja Haria
Date: TYBBA
3
8/2/2019 PPR Projct
4/39
PREFACE
In todays world, the managerial ability is so demanded in the company.
For doing the better managerial work, the person must have the knowledge of
management. This knowledge is not only based on theoretical but also on
practical. In short for being a good manager a person must have both the
knowledge.
I am extremely happy to submit this product project report on small-scale
industries as per the syllabus of T.Y. B.B.A of Saurashtra University for
particularly introducing the subject Entrepreneurship & Management of Small
Scale Business.
The main objective of this project report is to make students learn about
various factors that should be taken into consideration before setting up an
industry. In other words, it is purely, Entrepreneurship development & training
for the establishment of small-scale industry.
4
8/2/2019 PPR Projct
5/39
CONTENTS
NO. PARTICULARS
PAGE
NO.
1. Declaration 1
2. Acknowledgement 2
3. Preface 3
4. Project at a glance 6
5. Details about partners 7
6. Proposed location justification 8
7. Product details and market potential
1. Products 11
2. Market potential 12
8.
Production capacity & Manufacturing
process
1.Implementation schedule 14
9. Technical Aspects
1. Raw materials used
2.Manufacturing process 17
3.Energy conservation 19
4.Pollution control 19
5
8/2/2019 PPR Projct
6/39
10. Financial details
1. Land & Building 21
2. Plant & Machinery 22
1. Fixed capital 23
2. Working capital 24
3.Total capital investment 24
11.Financial provision & Sources of finance
25
1.Sources of finance 25
12. Sales, Cost of production & Profitability 26
1. Raw Material 27
2. Salary & Wages 28
3. Depreciation 29
4. Administrative expenses 30
5. Selling & distribution exp. 30
13. Profitability analysis 32
14. Break even point 33
15. Future plans 35
16. Conclusion 36
17. Bibliography 37
6
8/2/2019 PPR Projct
7/39
PROJECTAT AGLANCE
1. Name of the Unit: - L N M Biscuits
2. Constitution: - Partnership Firm3. Registered Office Address: - Sur. No 168
At-Moti Banugar
Tal: Jamnagar
Dist: Jamnagar
4. Factory Location: - Same As Above
5. Corresponding Address: - Same As Above
6. Telephone Number: - 0288-2552625, 0288-2565856
7. Promoters Of The Unit: - Rita Davda, Mr. Karan Davda
8. Category of Industry/
Sector: - Biscuit Processing
9. Government Formalities:-
A) Ssi No: - Applied For
B) Subsidy Regi: - Applied For
C) Noc from Pollution Board: - Applied for
7
8/2/2019 PPR Projct
8/39
DETAILS ABOUT PARTNERS
Promoters bio-data:
Name : Rita Davda
Age : 21 yrs
Address : 3, Patel Colony
Pandit Nehru Road,
Jamnagar
Educational
Qualification : Bachelor of Business Administration
Experience : Fresher
Miss. Rita Davda is a fresher and has just completed her graduation in BBA
with finance and marketing as specialized subjects. She does not have
experience in business but is capable of handling the business
Name : Mr. Karan Davda
Age : 26 yrs
Address : D/H Essar House
Swastik Society
Jamnagar
Educational
8
8/2/2019 PPR Projct
9/39
Qualifications: BBA, MBA in marketing
Experience : 6 months
PROPOSED LOCATION
JUSTIFICATION
Location of the plant:
The promoters have acquired a plot for its factory location at Moti Banugar in
Jamnagar district. The National Highway joining Rajkot road is very nearer
from the factory location. Industrially developed city commercial capital of
Saurashtra. In short, the industrial location of the proposed project is most
suitable and nearness of market.
ADVANTAGES OF THE PROPOSED LOCATION:
1. Monetary benefits:
As the industrial location of the Moti Banugar is declared as industrially
incentive area, under Gujarat State capital investment scheme, 2001-2010
the unit is eligible for following benefit/incentives
Capital interest location of the Moti Banugar is declared as industrially
incentive area, under Gujarat state capital investment scheme, 2001-2010
the unit is eligible for following benefits/incentives
9
8/2/2019 PPR Projct
10/39
The unit shall enjoy income tax benefit available to units in the backward
area.
2. Nearness to market:
The product proposed is mainly marketed in all the cities and towns of India.
As the industrial location of the projectis situated near Rajkot which is
situated in the centre of market and is connected by road, rail and air with all
the part of India, the unit shall be able to market its products in Gujarat and
neighboring states easily and conveniently.
3. Labour:
In the proposed unit 40 workers and office staff will be employed. As Rajkot is
at a short distance from the factory location, the unit shall get skilled labour
from Rajkot as well as Jamnagar and unskilled labour would be available from
local area.
4. Infrastructural facilities:
As the factory location is situated in the industrial area, which is developed
and still developing, the unit will get basic infrastructure facilities like
electricity, water, communication facilities, banking facilities, transportation
etc.
5. Transportation:
The national highway joining Rajkot road is very nearer from the factory
location. As the industrial location of the project is situated near Rajkot
which is situated in the centre of market and is connected by road, rail and
air with all the part of India.
10
8/2/2019 PPR Projct
11/39
INTRODUCTION
Bakery industry in India is the largest of the food industries with an annual
turnover of about Rs. 3000 Crores. India is the second largest producer of
biscuits after USA. The biscuit industry in India comprises of organized and un-
organized sectors. Bread and Biscuits form the major baked foods accounting
for over 80% of total bakery products produced in the country. The quantities
of bread and biscuits produced are more or less the same. However, value of
biscuits is more than bread.
The industry has traditionally been and largely continues to be in the
unorganized sector contributing over 70% of the total production. Bakery
products once considered as sick mans diet have now become essential food
items of the vast majority of population. Though bakery industry in India has
11
8/2/2019 PPR Projct
12/39
been in existence since long, real fillip came only in the later part of 20 th
century. The contributing factors were urbanization, resulting in increased
demand for ready to eat products at reasonable costs etc.
PRODUCTS
Chocolate biscuit
Butter biscuit
Almond biscuit
Pista biscuit
Marie biscuit
Pineapple cream biscuit Orange cream biscuit
Bourbon biscuit
12
8/2/2019 PPR Projct
13/39
MARKET POTENTIAL
The bakery units are unevenly spread among States. These are mainly
concentrated in the States of Maharashtra, West Bengal, Andhra Pradesh,
Karnataka and Uttar Pradesh. Industrially advanced States like Maharashtra
and West Bengal have very large number of bakery units. The per capita
consumption is very high in industrialized States like Maharashtra and West
Bengal. The Biscuits are becoming quite popular in rural areas as well. Nearly
55% of the biscuits are consumed by rural sector. The higher consumption of
biscuits in rural area could be attributed to its position as a snack, longer shelf
life and better taste which is liked by different cross sections of population.
There is no marketing problem as every shop is a market for biscuits.
13
8/2/2019 PPR Projct
14/39
Bakery products still remain the cheapest of the processed ready to eat
products in the country. The production of Bakery products has increased from
5.19 lakh tones in 1975 to 18.95 lakh tones in 1990 recording four-fold
increase in 15 years. Among the bakery products, biscuits occupy an
important place as they contribute over 33% of total products processed. Over
79% of the biscuits are produced by small scale sector consisting of both
factory and non-factory units. The growth rate for bakery products is
estimated at an average of 9.8% per annum. The demand for bakery products
will continue to increase in future. Encouraging trends in consumption of
bakery products by population of lower and middle income groups indicate
vast scope for consideration of nutritional enrichment of bakery products.
Basis and Presumptions:
1. The Project Profile has been prepared on the basis of Single Shift of 8
hours a day and 25-working days in a month at 75% efficiency.
2. It is presumed that in the first year, the capacity utilization will be 70%
followed by 85% in the second year with 100% in the subsequent years.
3. The rate of salaries and wages for skilled workers and others are on the
basis of the minimum rates in the State of Gujarat
4. Interest rate for the fixed and working capital has been taken @ 15% on
an average whether financed by the Bankers or Financial Institutions.
14
8/2/2019 PPR Projct
15/39
5. The margin money required is the minimum 30% of the total capital
investment.
6. The rental value for the accommodation of office, workshop and other
covered area has been taken @ Rs 20 per Sq.mtr.
7. The rates in respect of machinery, equipment and raw materials are
those prevailing at the time of preparation of the Project Profile and are
likely to vary from place to place and supplier to supplier. When a tailor
made project profile is prepared, necessary changes are to be made.
8. The pay back period may be 5-years after the initial gestation period.
9. The gestation period in implementation of the project may be to the
tune of 6 to 9 months which includes making all arrangements,
completion of all formalities, market surveys and tie-ups etc.
Implementation Schedule:
The implementation of the project includes various jobs/exercises such as
procurement of technical know-how, market surveys and tie-ups, preparation
of project report, selection of site, registration, financing of project,
procurement of machinery and raw materials etc., recruitment of staff,
erection/ commissioning of machines, trial production and commercial
production etc. In order to efficiently and successfully implement the project in
the shortest period, simultaneous exercises are carried out. Project
implementation will take a period of 8 months from the date of approval of the
scheme.
15
8/2/2019 PPR Projct
16/39
Breakup of activities with relative time for each activity is shown
below:
ACTIVITYPERIOD ( IN
MONTHS )
Scheme Preparation & approval 0-1
SSI Provisional Registration 1-2
Sanction of loan 2-5
Clearance from State Pollution Board 3-4
Placement of order for machinery and
delivery4-5
Installation of machines 6-7
Power connection 6-7
Trial run 7-8
Commencement of production 9 onwards
TECHNICAL ASPECTS
Raw materials used:
Raw Material is the most important thing in the production department. Raw
Material is necessary for production of goods in every manufacturing
company. The company is using the raw materials as follows:
16
8/2/2019 PPR Projct
17/39
Wheat Flour (Maida)
Sugar
Yeast
Salt
Vanaspati / Refined Edible Oil
Soya Fiber
Gluten
Preservatives
Emulsifiers
Improver and Vitamins
Process Of Manufacture:
The main product of the unit wafer biscuits can be manufactured after
obtaining raw materials like Maida, starch, soda, salt, color, preservatives,
Vanaspati, sugar, flavors etc. which are easily available in local markets.
17
8/2/2019 PPR Projct
18/39
The calculated amount of maida, starch, vanaspati, water etc. is mixed in a
mixer to form paste. The paste so formed will be poured into pre-heated
mould to bake wafer sheet. The other Ingredients like sugar, Vanaspati, colors,
essence are mixed in a planetary mixer to form cream. The cream so prepared
will be applied on the sheets to form sandwich. Thereafter the sandwich will be
cut into biscuits and packed in pouches.
PRODUCTION CAPACITY
Installed capacity:-
No.Name of theproduct
Monthlyproductionunits rate Qty.
Totalamount
18
8/2/2019 PPR Projct
19/39
1 Slice biscuit 12,195 10 12,195 1,21,950
2 Round biscuit 6,098 12 6,098 73,176
3 Cream biscuit 6,707 15 6,707 80,484
Total 25,0002,75,598
Installed capacity 100%
Utilized capacity:-
No.Name of theproduct
Monthlyproductionunits
rate Qty.Totalamount
1 Slice biscuit 10,000 10 10,000 1,00,000
2 Round biscuit 5,000 12 5,000 60,000
3 Cream biscuit 5,500 15 5,500 82,500
Total 20,500 2,42,500
Utilized capacity 82%
Table no. 2 production capacities
Energy Conservation:
The following steps may be taken for the conservation of energy:
19
8/2/2019 PPR Projct
20/39
Machinery and equipment parts, which are revolving and reciprocating
should be properly, lubricated from time to time with suitable lubricant
oil.
Lay-out of the unit should be in such a way that no back tracking of
material is there.
All electric switches may be turned off, when not required.
The entire transmission belt will be tightened before starting the work is
wherever applicable.
As far as possible, Solar Energy and day light will be used keeping all the
other lights off.
As far as possible, inductive load of motor will be reduced and high
power factor will be used with the aid of capacitors of appropriate sizes.
Pollution Control:
This industry may involve pollution to some extent for which State Pollution
Control Board has to be approached.
The minimum height of shed will be maintained with exhaust fans installed
for removing decongestion, proper ventilation, removal of cokes, fumes etc.
Quality control (ISO 9000)
20
8/2/2019 PPR Projct
21/39
Quality Control and Standards: As per FPO requirements. There is an all
round realization at every level that quality production of international
standard is the watchword for survival now. Consequently, the processor,
small or big, has started taking steps to improve quality right from the
selection of the raw material and that of the ingredients. Side by side steps
have also been taken by them to upgrade the hygienic and sanitary conditions
of the workers, plant and machinery so as to ensure quality of the finished
product.
The Agricultural and Processed Food Products Export Development
Authority (APEDA) gives subsidy to upgrade the laboratory facilities etc. It has
also brought out a book entitled ISO 9000 on The Food Industry a Practical
Guide. It deals with the entire spectrum of Quality Control, e.g.
documentation, installation, certification of quality management system etc.
FINANCIAL DETAILS OF THE PROJECT
21
8/2/2019 PPR Projct
22/39
1. Land :-
Area: - JamnagarTotal cost of land: -15, 00,000
Sr.no. Particulars
Squaremeter rate Total value
1 Open land 3,000 500 15,00,000
Total 15,00,000
Table no. - 3 land
2. Building:-
Particulars
Area( in sq.feet)
Rate( per sq.feet)
Total cost ofconstruction
shed 1,000 800 8,00,000
factory 1,500 300 4,50,000
go down 200 200 40,000
Office-room 250 300 75,000
compound 50 200 10,000
Total 13,75,000
Table no. - 4 building
3. Plant & machinery:-
Sl. No.DESCRIPTION
Amt. ( in
lakh)
22
8/2/2019 PPR Projct
23/39
1.
Manual Biscuit Machine (6 Plates) (Including
Creaming, Cutting and Support Tables,
Capacity creamwafer 25-30 Kg./Hrs., 15 KW) 175000
2.
Butter mixing machine (7-30 Kg./Hrs. Butter,
2 KW) 200000
3.
Sugar Grinding Machine(30-50 Kg./Hrs., 2
KW) 55000
4.
Planetary Mixer (3 Speed system, steel body,
capacity25 Kg. /Hrs. 2 KW.) 140000
5. Sealing (Packaging) Machine(1 KW) 80000
6. Working table with S.S./ Aluminum top 60000
7. Weighing Balance platformType 100000
8.
Aluminum vessels, Mats ups, Mugs, ladle,
spoons, gloves, etc. 90000
9.
Electrification and InstallationCharges @ 10%
of cost of Plant and Machinery 140000
10. Cost of Office furniture and Equipment etc
TOTAL 1150000
Table no. - 5 plant & machinery
4. Furniture & office equipment:-
No. Particulars Amt.
23
8/2/2019 PPR Projct
24/39
1 Air-conditioner 45,000
2 Furniture 2,00,000
3 Computer 32,000
4 Fax 10,000
5 Stationary 5,000
Total 2,92,000
Table no. -6 furniture & office equipment
5. Average total fixed capital & fixed cost of
project:-
No. Particulars Amount
1 Land 15,00,000
2 Building 13,75,000
3 Plant & machinery 11,50,000
4 Furniture & office equipment 2,92,000
5 Preliminary expenses 30,000
Total 43,47,000
Table no. -7 average total fixed cost & fixed cost of project
6. Working capital requirement :-
24
8/2/2019 PPR Projct
25/39
No. Particulars Amt (Rs.) Duration
1 Stock of raw materials 60,000 1 month
2 Work-in-progress 50,000 15 days
3 Bills receivable 55,000 30 days
4 Current expenses 50,000 30 days
Total 2,15,000
Table no.-8 working capital requirement
7. Total cost of the project:-
No. Particulars Amount(Rs.)
1 Total fixed cost 43,47,000
2 Total working capital for 1 month 2,15,000
Total 45,62,000
Table no: - 9 total cost of project
FINANCIAL PROVISION AND SOURCES OFFINANCE
25
8/2/2019 PPR Projct
26/39
1. Financial provision:-
Sr.
no.
Details AmountGSFC
loan
Bank
loan
Own
capital
Subsidy
1Land
15,00,00
04,67,500
10,32,50
0
2Building
13,75,00
01,10,000 2,00,000
10,65,00
0
3Machinery
11,50,00
01,00,000
10,00,00
050,000 23,000
4Furniture
2,92,000 2,92,000
5 Prelim.exp. 2,00,000 2,00,000
6Contingency
2,00,000 2,00,000
7Working
capital p.a.2,65,000 2,65,000
Total6,77,50
0
12,00,0
00
31,04,5
0023,000
Table no. -10 financial provisions
2. Details of source of finance:-
No. ParticularsInteres
t rateAmount
1 GSFC loan 18% 6,77,500
1 Bank (S.B.I.) 15% 12,00,000
2 Contribution 5% 31,04,500
4 Subsidy 23,000
Table no. -11 details of sources of finance
SALES, COST OF PODUCTION &
26
8/2/2019 PPR Projct
27/39
PROFITABILITY OF THE PRODUCT
1. Details of sales:-
No. Particulars Rate Quantit
y
Amount
1 Slice biscuit 10 10,000 1,00,000
2 Round biscuit 12 4,500 54,000
3 Cream biscuit 15 5,000 75,000Total sales per
month 2,29,000
Total sales per year
27,48,00
0
Note: -The Details of sales given here are taken on average basis.
Table no. -12 details of sales
2. Raw materials:-
27
8/2/2019 PPR Projct
28/39
No. ParticularsQty.Kg.
Rateper kg.
Amount(monthly)
1 Wheat flour (Maida) 1600 20 32,000
2 Sugar 100 34 3,400
3 Yeast 20 70 1,400
4 Salt 5 20 100
5Vanaspati/ refined edibleoil 15 52 780
6 Soya fiber 2 75 1507 Gluten 2 50 100
8 Improver & vitamins 6 500 3,000
Total 1750 40,930
Table no. -13 raw materials
3. Salary & wages:-
28
8/2/2019 PPR Projct
29/39
No. Particulars No. salar
y
Amount
1. Factory manager 1 9000 9000
1Supervisor cum
chemist/entrepreneur2 5,000 10,000
2 Skilled worker 4 4,000 16,000
3 Unskilled worker 8 3,000 24000
4 Salesman 5 4,000 20,000
5.Technician, Lab
Assistant
3 5000 15000
Total 94,000
Table no. -14 salary & wages
4. Interest (per annum):-
No. Particular AmountInterest(p.a.)
1 Bank (S.B.I.) 12,00,000 1,80,000
2 GSFC loan 6,77,500 1,21,950
Total 18,77,500 3,01,950
Table no. 15 interests
5. Electricity :-
57 H.P. *0.75*300*8 Hours*0.70 Capacity *1.8 = Rs:-12,927
29
8/2/2019 PPR Projct
30/39
6. Rent, taxes & insurance:-
The amt. of rent, taxes and insurance will be of 1, 50,000 (approx.)
7. Repairs & maintenance:-
The amt. of the repairing &maintenance will be of 1, 00,000 (approx.)
8. Depreciation :-
Sr.
no. Details Amount
Dep.
Rate Total
1 Building 13,75,000 10% 1,37,500
2 Machinery 11,50,000 15% 1,72,500
Total 3,10,000
Table no. 16- depreciation
9. Administration expenses:-
No. Particulars Amount
1 Accounting exp. 6,000
30
8/2/2019 PPR Projct
31/39
2 Printing & stationary exp. 1,500
3 Postage 1,500
4 Other 5,000
Total 14,000
Table no. - 17 administrative exp.
10. Selling & distribution exp. (per month)
No. Particulars Amount
1 Delivery van exp. 20,000
2 Advertisement exp. 10,000
3 Commission to salesman 5,000
Total 35,000
Table no. -18 selling & distribution exp.
11. Total cost of production
No. Particulars Amount (p.a.)
31
8/2/2019 PPR Projct
32/39
1 Raw materials 4,91,160
2 Salaries & wages 94,000
3 Interest 3,01,950
4 Electricity 1,55,124
5 Rent, taxes & insurance 1,50,000
6 Repairs & maintenance 1,00,000
7 Depreciation 3,10,000
8 Administrative exp. 1,68,000
9 Selling & distribution exp. 4,20,000
Total 21,90,234
Table no. 19 total working requirement
PROFITABILITY ANALYSIS
Particulars Amount
32
8/2/2019 PPR Projct
33/39
Total Annual Sales
LESS:- Cost of Production
27,48,000
21,90,234
Total profit 5,57,766
Table no. -20 profitability analysis
BREAK EVEN ANALYSIS
33
8/2/2019 PPR Projct
34/39
Break Even point is the situation or the level at which the level of the
production of the unit is such that all its costs are covered fully and there is no
profit. This is also known as No Profit, No Loss Situation.
BEP Analysis is must for every unit because it is to be represented to the
banks while applying for loans. A low break-even point is preferable because it
shows that a firm can over its cost within a short period of time.
BEP
Total Fixed Cost = 43, 47,000
Contribution = Fixed Cost + Profit
= 43, 47,000 + 5, 57,766
= 49, 04,766
There fore, BEP
= 88.63%
BEP = fixed cost x sales
Contribution
43, 47,000 x 27, 48,000
34
Fixed Cost
ContributionX 100=
Fixed Cost
ContributionX 100=
43, 47,000
49, 04,766X 100=
8/2/2019 PPR Projct
35/39
=49, 04,766
= 24, 35,549
Analysis:
Thus from the above calculation we can find out time period in whichBEP can be achieved.
Total Sales Time Period
27, 48,000 --------12 Months
24, 35,549 ------- ?
Time Period required for Achieving BEP: -
FUTURE PLANS
35
24, 35,549 x 12
27, 48,000=
= 10.64 months
8/2/2019 PPR Projct
36/39
The firm L & M biscuits Pvt. Ltd. has come up with the same strategies
and hopes and would decide to receive the best results in the economy as
soon as possible. The firm is on the upstream to its production cycle and will
produce best results in the future.
The main aim of the firm is to achieve a fresh start in the market and to
achieve maximum satisfaction level of the customer. The firm will look aside to
find a competitive mark in the society and to stay alive for a long period of
time.
There is scope for the diversification with the same production capacity and
machineries. Therefore future plans for the firm are:
Cookies
Wafers
Pudding
36
8/2/2019 PPR Projct
37/39
CONCLUSION
The entire study has been conducted to enlighten all the possibility of the
proposed investment proposal.
Under this report the dedicated efforts are made to cover to the maximum
extent all the possible factors. These include market potential for the product;
location of the plant, rising of the finance from various sources, profitability
analysis etc.
These factors have long lasting effect on the survival and growth of the
business under the competition.
37
8/2/2019 PPR Projct
38/39
BIBLIOGRAPHY
DESAI VASANT, PROJECT MANAGEMENT, SECOND EDITION, 1999,
HIMALAYA PUBLISHING HOUSE
www.nsicindia.com
www.niit.org
www.google.com(images)
38
http://www.nsicindia.com/http://www.niit.org/http://www.nsicindia.com/http://www.niit.org/8/2/2019 PPR Projct
39/39
Top Related