15

MUSTA R D/RAPESEED OIL

PRODUCT CODE : 211001023

QUALITY AND STANDARDS : As per ‘Agmark’ and PFA Specifications. The ISI
Specification for Mustard Oil is IS 546:1975
(2nd Revised)
PRODUCTION CAPACITY : Qty.: 9975 Tins (16 kg.) of Mustard Oil
Value : Rs. 70,82,250.00 per annum
Qty. 287 M.T. of Mustard Cake
Value : Rs. 12,91,500.00 per annum
MONTH AND YEAR : May, 2003
OF PREPARATION
PREPARED BY : Small Industries Service Institute
111 and 112, B.T. Road,
Kolkata-700035

INTRODUCTION B ASIS AND PRESUMPTIONS

Oil seed crop occupies an important The profile is drawn on the basis of
position in the agricultural and industrial the following presumptions:
economy of the country and accounts
for about 10 per cent of the total crop 1. Working : 8 hours
area. Mustard seed is one of the five hours/shift
major oil seeds from which edible oil is 2. No. of shift/day : 1
produced. Mustard oil is the medium of 3. Working days : 300
cooking in almost all the states of the
4. Total No. of : 2400
Eastern Region, especially in West
working hours
Bengal. It is also used for the purpose
of massage. Mustard oil cake (by- 5. Working : 75%
product) is the common cattle feed efficiency
which has got high nutritional value. It 6. Time period for : 3rd year from the
is also used as manure. achieving date of start of
maximum production
MARKET POTENTIAL capacity
Mustard oil has enormous demand utilisation
as one of the edible oils and used as 7. Labour charges : As per the
cooking medium especially in Northern, Minimum Wages
Easter n and North Easter n India. Act of State
Mustard oil is also used in preparation Government.
of pickles by the housewives and pickle 8. Margin Money : 25% of Capital
manufacturing units. Investment
90 MUSTA R D/ RAPESEED OIL

9. Rate of interest on : 15% Quality Control and Standards

fixed and working The quality of oil should conform at–
capital least to the quality and standards laid
10. Operative period : 10 years down in PFA Act. However, for better
of the project marketing of this product, the standards
may be maintained as per ‘Agmark’
Value of the machinery and
specification. The ISI specification is No.
equipment is estimated on the basis of IS:546:1975 (second revision). The
prevailing prices in the market. entrepreneur may approach the
appropriate authorities to get ‘Agmark’
IMPLEMENTATION SCHEDULE or ISI specification for better marketing
of the product.
Project implementation will take a
period of 8 months from the date of Production Capacity
approval of the scheme. Break-up of the
activities and relative time for each The estimated production capacity
per annum is as follows:
activity is shown below:
Mustard Oil : 159.6 MT
1. Scheme preparation 01month Mustard Cake : 287 MT
and approval Weight loss : 9.4 (approximately 2%
2. SSI provisional 1-2 months of the raw material)
registration Motive Power
3. Sanction of loan 2-5 months
Total motive power required including
4. Installation of Machinery 6-8 months plant, machinery and office fittings is 30
and power connection onwards HP.
5. Trial Run and Production 8 months
Pollution Control
TECHNICAL ASPECTS The extraction of oil does not need
any steps to be taken for the pollution
Process of Manufacture control as no effluents are responsible
for air and water pollution. However, the
The seeds are to be dried in sun (if
entrepreneurs are advised to take ‘No
these are not dried) and then cleaned
Objection Certificate’ from the State
by shakers to remove dust and foreign
Pollution Control Board before the
matter. The seeds are initially steamed
commencement of production.
and then passed through the expeller
and the process is repeated till the Energy Conservation
maximum oil is extracted out of the The fuel for the steam production in
seeds. The filtered oil is filled into the boiler is coal or oil (diesel) depending
containers which are subsequently upon the type of boiler. Proper care
scaled and labelled for marketing. On should be taken while utilising the fuel
an average 33 to 35 per cent of recovery for the production of steam. It should
of oil from the seed is made depending be fed depending upon the requirement
upon the quality of the seeds. of the steam in production. There should
 MUSTA R D/ RAPESEED OIL 91

be no leakage of steam in the pipe lines. Sl. Description Qty. Amount

While softening the seeds in the kettles, No. (In Rs.)
the over passing of the steam should Electrification and 35,000
installation charges
also be avoided for better oil recovery
@ 10% of the cost
and energy conservation. of machinery
and equipment
FINANCIAL ASPECTS Cost of belt, pulley, other 5,000
tools, fixture etc.
A. Fixed Capital Cost of office furniture and 15,000
furnishing
i ) Land and Building Amount (In Rs.) Total 4,08,000

1. Land - 350 sq. meter 1,05,000 iii) Preliminary and Pre-operative Expenses (Rs.)
@ Rs 300 per sq.m.
Legal expenses, establishment cost, 40,000
2. Covered area including work shed, 5,00,000 travelling,start-up expenses,
godown, store, etc. 250 consultancy fee, estimation fee,
sq.m. @ Rs 2000 sq.mtrs interest during construction, trial
with C.I.I. sheet roofing room expenses

3. Boundary wall and gate, etc. 50,000 Total Fixed Capital (i+ii+iii) 11,28,000

4. Toilet, bathroom, etc. 25,000

B. Working Capital (per month)
Total 6,80,000
i) Personnel

ii) Machinery and Equipment (a) Administrative and Supervisory

Sl. Description Qty. Amount Designation No. Amount

No. (In Rs.) (In Rs.)

1. Baby oil expeller No. 1 2 Nos. 1,86,000 a) Manager-cum-Chemist 1 2,500

extra heavy duty with
b) Store keeper-cum- 1 1,500
single steel gear set and
Accountant
long heating kettle
(Chamber size: 27” × 5”) c) Purchase-cum-Salesman 1 1,500
9 bolts capacity
110kg./hr. d) Chowkidar-cum-Peon 1 1,000

2. 25 HP Motor with 1 No. 20,000 (b) Technical Staff

starter and switch
a) Skilled Workers 2 3,000
3. Filter press frame 1 No. 35,000
type 14”×14”×14" b) Unskilled Workers 3 3,000
plates plunger pump
Total 9 12,500
and filter cloth

4. Ghani Bengal type 2 pair 45,000

Add-perks and benefits 15% 1,875

Total 14,375
5. Baby boiler 200 kg. 1 No. 35,000
capacity
ii) Raw Material Amount (In Rs.)
6. Oil storage tank 3 Nos. 9,000 a) Mustard seeds 38 tonnes 4,94,000
@ Rs.13000 per
7. Shaker screen with 1 15,000
tonne on average
blower
b) Tin Containers 16 kg. 29,050
8. Weighing scale blower 8,000
Cap. 830 Nos. @ Rs. 35
type 100 kg. capacity
per Container
92 MUSTA R D/ RAPESEED OIL

Raw Material Amount (In Rs.) MACHINERY UTILIZATION

c) Gunny bags 450 Nos. 9,000
@ Rs. 20 per bag It is estimated that 75% crushing
d) Labels for container 2,500 capacity of the expellers and filter press
Total 5,34,550 will be utilized. The power consumption
has also been calculated considering
iii) Utilities Amount average 6 hrs. per day working of the
(In Rs.)
machinery.
a) Power - 3000 KWH @ 4.50 13,500
per KWH
b) Water 500
FINANCIAL ANALYSIS
c) Fuel for boiler 4,000 1) Cost of Production (per year) Amount
Total 18,000 (In Rs.)
a) Total recurring cost 69,59,100
iv) Other Contingent Expenses Amount (In Rs.)
b) Depreciation on Building @ 5% p.a. 28,750
a) Stationery and postage 500
c) Depreciation on machinery and 40,800
b) Consumable store 1,000
equipment @ 10% p.a.
c) Telephone 1,000
d) Interest on total capital investment 4,30,000
d) Repairs and maintenance 2,000 @ 15% p.a.
e) Transport charges 6,500 Total 74,58,650
f) Advertisement and publicity 1,000
2. Turnover (per year) Amount (In Rs.)
g) Insurance charges 500
h) Other miscellaneous expenses 500 Mustard oil 9975 tins 70,82,250
@ Rs. 710 per tin
Total 13,000
Mustard cake 287 MT 12,91,500
v ) Working Capital (per month) @ Rs. 4500 per MT
(i+ii+ii+iv) Rs. 5,79,925
Total 83,73,750
vi) Working capital
×3
(for 3 months) 5,79,925× Rs. 17,39,775 3. Net Profit (per year) (Before Income Tax)
= Total Sales – Cost of production
C. Total Cost of the Project = 8373750 – 74,58,650
= 9,15,100
Amount (In Rs.)
a) Total fixed Cost including 1,12,8000 4. Net Profit Ratio
land, building, plant and
= Net profit per year × 100
machinery etc.
Turnover per year
b) Working capital margin @ 25% 4,34,980
= 915100 × 100
Total 1,56,2980 8373750
= 11%
D. Total Capital Investment
5. Rate of Return
Amount (In Rs.)
= Net profit per year
i) Fixed Capital 11,28,000 Total Investment
ii) Working Capital 17,39,775 = 9,15,100 × 100
(For three months) 28,67,775
Total 28,67,775 = 31.9%
 MUSTA R D/ RAPESEED OIL 93

6. Break-even Point Addresses of Machinery and

i ) Fixed Cost Amount (In Rs.) Equipment Suppliers
a) Depreciation on machine and 1) M/s. Punjab Engg. Works
equipment 40,800
32, Ram Krishna Samadhi Road,
b) Depreciation on Building @ 5% p.a. 28,750
Kolkata - 54.
c) Interest on total capital investment 4,30,000
2) M/s. S.P. Engg. Co.
d) Insurance charges 10,000
79/9, Latouche Road,
e) 40% of salary and wages 69,000
P.B. No. 218,
f) 40% of utilities and other expenses 86,400
Kanpur - 208 001.
Total 6,64,950
3) M/s. Lyallpur Engg. Co.
or Say 6,65,000
G.T. Road, P.B. No. 8,
ii) Net Profit (per year) Rs. 9,15,100 Gaziabad, U.P.
B.E.P. = Fixed Cost × 100 4) M/s. Delhi Iron and Steel Co.Pvt. Ltd.
Fixed cost+Net Profit
G.T. Road,
= 6,65,000 × 100 Gaziabad(U.P).
15,80,100
= 42.1% 5) M/s. Swastik Engg. Works
198, Panjara Pole Road,
A DDITIONAL INFORMATION Mumbai- 110004.
The project requires huge amount of 6) M/s. Parekh Machine Tools
working capital to stock the seeds during 5, Khetra Das Lane,
season to compete in the market. If the Behind Broadway Hotel,
entrepreneur is not in a position to Kolkata - 12.
manage sufficient working capital, he
should also crush the other seasonal Raw Material Suppliers
edible oil seeds available at different time
intervals. Available in Local Markets.