PROJECT REPORT

Of

FLOUR MILL

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Flour Mill.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : info@udyami.org.in
Contact : +91 7526000333, 444, 555
 Flour Mill

1. INTRODUCTION:

Wheat flour, also known as Atta in Hindi, is widely used product on daily basis in every
household. For making chapattis, bread, roti, naan, puri Wheat Flour is basic and essential
raw material. Most atta is milled from the semi-hard wheat varieties, also known as durum
wheat that comprises 90% of the Indian wheat crop, and is more precisely called Durum
Atta.

2. PRODUCT & ITS APPLICATION:

Wheat Flour or Atta is the predominantly used in food items in India, such as chapatti, roti,
naan and puri and in sweat items too like halwa, pakoda, etc. This is basic and most
essential product for daily consumption in every home in India.

3. DESIRED QUALIFICATIONS FOR PROMOTER:

Do not require any specific qualification.

4. INDUSTRY LOOKOUT AND TRENDS

Wheat is the most widely produced cereal all over the world, used for human consumption;
Contribution of wheat to energy intake is significant. Global wheat flour market is majorly
driven by rising consumption of bakery products fuelled by combined influence of growing
population, change in tastes of consumer and rise in disposable income of consumers
worldwide.

In last few years, there has been a rising demand for wheat flour due to changing trend in
food industry with innovations in food products and recipes coupled with changing taste of
consumers. Companies are launching new products, investing in expansion, and forming
strategic alliances to increase their market share. The major players in the wheat flour
market include Archer Daniels Midland Company (U.S.), Cargill Inc (U.S.), General Mills
(U.S.), Ardent Mills Corporate (U.S.) and ITC Limited (India).

5. MARKET POTENTIAL AND MARKETING ISSUES, IF ANY:

Whole wheat flour is used in making Chapaties, Puries, Parotha and other roasted cereal-
based products. Sooji / Rava is used in many sweetmeat products. Wheat flour or Maida is a
basic raw material for making Bread, Biscuits Cakes and other bakery products. Bran
separated on milling is used as cattle feed. The products sold under brand names are very
few. The concept for branded cereal flour products is now increasing.

6. RAW MATERIAL REQUIREMENTS:

Basic raw materials required are Wheat Blended of different types. For packing, gunny bags
will be required.

7. MANUFACTURING PROCESS:

Firstly, wheat is thoroughly cleaned such that all dust particles, stones and other foreign
matters will be removed. Clean wheat will be tempered before grinding by treating with
water so that the bran is separated from the endosperm. The tempered wheat is crushed
between corrugated rollers (Break rolls). The first break rolls are set relatively far apart to
grind the wheat lightly, while successive break yield finer and finer products. The first break
is separated by sieving or bolting in to very fine particles (flour), intermediate particles
(middling) and coarse particles (stock). The stock is then sent to second break rolls. This
process may continue through 5 to 6 breaks. The stock contains pieces of endosperm and
bran and the stock from the last break is principally bran. The middling contains endosperm,
bran and germ which are then successively classified and some of the bran removed is sent
to reduction rollers. These are smooth rollers, but like the break rolls they are graduated so
that successive reduction becomes finer and finer. After each reduction, sifters separate the
flour, middling and stock, this process is continued until most of the endosperm has been
removed as flour and most of the bran has been separated in the sifters.

8. MANPOWER REQUIREMENT:

The enterprise requires 12 employees as detailed below:

S.No. Designation No. Salary(Rs.) Total(In. Rs.)

1 Skilled Workers 2 10,000.00 20,000.00

2 Semi-skilled Workers 4 6,000.00 24,000.00
3 Miller-cum Chemist 1 10,000.00 10,000.00
4 Sales Supervisor 1 12,500.00 12,500.00
5 Store Keeper 1 15,000.00 15,000.00
6 Salesman 1 12,000.00 12,000.00
7 Accountant 1 11,000.00 11,000.00
8 Security Personnel 1 7,500.00 7,500.00
12 1,04,500.00
Total Annual Salary 12,54,000.00

9. IMPLEMENTATION SCHEDULE:

The project can be implemented in 13 months’ time as detailed below:

Sr. No. Activity Time Required

(in months)
1 Acquisition of premises 1.50
2 Construction (if applicable) 3.00
3 Procurement & installation of Plant & Machinery 1.5
4 Arrangement of Finance 1.50
5 Recruitment of required manpower 0.50
Total time required (some activities shall run concurrently) 7.00
 10. COST OF PROJECT:

The project shall cost Rs 115.35 lacs as detailed below:

S.NO.  PARTICULARS  TOTAL COST   MARGIN 25%  LOAN 
  
1 Land & Building - Owned/Rented ‐ 
2 Plant and Machinery 23.84 5.96 17.88 
3 Furniture & Fixture 1.15 0.29 0.86 
5 Pre- and Post-operative and 2.38 2.38 ‐ 
6 Margin for Working Capital 5.56 5.56 ‐ 
Total 32.93 14.19 18.74

11. MEANS OF FINANCE:

The proposed funding pattern is as under:

S.NO.  PARTICULARS     AMOUNT 

1 Own Contribution 14.19
2 Term Loan 18.74
Total 32.93

12. LIST OF MACHINERY REQUIRED:

A detail of important machinery is given below:

Value
Sr. No. Particulars UOM Qtty Rate (Rs) (Rs in
Lacs)
Plant & Machinery / equipment’s
a) Main Machinery
1 Single Bucket Elevator Nos 1 Rs 0.90 0.90
2 Reel Machine Nos 1 Rs 0.40 0.40
3 Rotary Separator Nos 1 Rs 1.00 1.00
4 Scourer Machine Nos 1 Rs 0.75 0.75
5 Intensive dampner Nos 1 Rs 0.40 0.40
 6 Rotometer Nos 1 Rs 0.25 0.25
7 De-Stoner without fan & cyclone Nos 1 Rs 0.75 0.75
8 Indent cylinder Nos 1 Rs 0.90 0.90
9 Screw conveyor 7 m 1500/m, 4.5 m 1500/m Nos 1 Rs 0.43 0.43
10 Dust cyclone with airseal dia 1120 Nos 1 Rs 0.17 0.17
11 Dust cyclone with airseal dia 960 Nos 1 Rs 0.15 0.15
12 L.P. Fan for Ist Cleaning Nos 1 Rs 0.30 0.30
13 L.P. Fan for Main Cleaning Nos 1 Rs 0.27 0.27
14 L.P. Fan for DE stoner Nos 1 Rs 0.23 0.23
15 L.P. Fan for final Cleaning Nos 1 Rs 0.25 0.25
Sr. No. Particulars UOM Qtty Rate (Rs) Value
16 Magnets 6”*12” Nos 2 Rs 0.02 0.04
17 Silogate Nos 3 Rs 0.02 0.05
18 Roller Mill body Nos 1 Rs 1.25 1.25
19 Rolls dia 250 * 1000 mm (Indian) Nos 2 Rs 0.38 0.76
20 Roll Grooving & spindle cutting Nos 2 Rs 0.03 0.06
21 Plansifter 8 feed /16 sec. Nos 1 Rs 1.50 1.50
22 Purifier Nos 1 Rs 0.60 0.60
23 Bran – finisher Nos 1 Rs 0.20 0.20
24 Pneumatic lifts Nos 4 Rs 0.18 0.72
25 Tripple worm 8 mt. Each Nos 1 Rs 0.02 0.02
26 L.P. Fan purifier Nos 1 Rs 0.25 0.25
27 Dust cyclone dia 1120 Nos 1 Rs 0.20 0.20
28 H.P. Fan Nos 1 Rs 0.45 0.45
29 Supper cyclone Nos 1 Rs 0.30 0.30
30 Bolting cloth Lot Rs 0.40 0.40
Misc. accessories such as inspection, cover &
31 Nos 1 Rs 0.15 0.15
joint range etc.
32 Electrical motors LS Rs 3.50 3.50
Electric pannel board fitted with starter main
33 switches, cables, cable fittings, volts and AMP LS Rs 2.50 2.50
meters, AC.B capacitors etc.
34 Reduction gears standard make LS Rs 0.75 0.75
35 V-Groove, Pulleys, Couplings, V-Belts etc. LS Rs 0.30 0.30
 erecting Material such as angle, Channel
36 LS Rs 2.00 2.00
Sheet, Iron etc.
Tools and other equipment required during
37 LS Rs 0.35 0.35
erecting
Consumable items such as Nut, Bolt, Gas, and
38 LS Rs 0.20 0.20
Welding Rods, Namda, Fevicol etc.
39 Weighing scale Nos 1 Rs 0.15 0.15
sub-total Plant & Machinery 23.84
Furniture / Electrical installations
1 Office furniture LS 0.7 0.70
Sr. No. Particulars UOM Qtty Rate (Rs) Value
sub total 0.70
Other Assets
1 preliminary and preoperative LS 2.38 2.38
sub-total Other Assets 2.38
Erection and Consultancy Charges LS 0.45 0.45
Total 27.37

13. PROFITABILITY CALCULATIONS:

i Cost of Production

S.No. Particulars In. Rs.

1 Total Recurring Expenditure 251.93
2 Depreciation on Plant and Machinery @ 15% 3.58
Depreciation of Furniture/Fixture & Office
3 Equipment @ 10 % 0.12
4 Finance Cost 7.91
TOTAL COST OF PRODUCTION (in Lacs) 263.53
ii Turnover
S.No. Particulars Qty) Rate (in Rs) In. Rs.

1 Maida 50% 720.00 23,000.00 1,65,60,000.00

2 Sooji 12% 172.80 25,000.00 43,20,000.00

3 Atta 20% 288.00 22,000.00 63,36,000.00

4 Chokar 18% 259.20 13,000.00 33,69,600.00

1,440.00
3,05,85,600.00
The basis of profitability calculation:

Profitability
(ii) Profit [ii-i] (In Lacs) 42.33
At 100% capacity utilisation
Percentage profit on sales 13.84%

This unit will have 2400 MT/Annum capacity. The growth of selling capacity will be increased
10% per year. (This is assumed by various analysis and study; it can be increased according
to the selling strategy.)

Energy Costs are considered at Rs 7 per Kwh.The depreciation of plant is taken at 15 % and
Interest costs are taken at 12 % depending on type of industry.
15. STATUTORY / GOVERNMENT APPROVALS

The Ministry of Food Processing Industries has been operating several plan schemes for the
development of processed food sector in the country during the 10th Plan. One of the
schemes relates to the Technology Up-gradation/ Establishment/ Modernization of food
processing industries.

The Indian food processing industry is regulated by several laws which govern the aspects of
sanitation, licensing and other necessary permits that are required to start up and run a food
business. The legislation that dealt with food safety in India was the Prevention of Food
Adulteration Act, 1954 (hereinafter referred to as "PFA"). The PFA had been in place for
over five decades and there was a need for change due to varied reasons which include the
changing requirements of our food industry. The act brought into force in place of the PFA is
the Food Safety and Standards Act, 2006 (hereinafter referred to as "FSSA") that overrides
all other food related laws.

FSSA initiates harmonization of India's food regulations as per international standards. It

establishes a new national regulatory body, the Food Safety and Standards Authority of India
(hereinafter referred to as "FSSAI"), to develop science based standards for food and to
regulate and monitor the manufacture, processing, storage, distribution, sale and import of
food so as to ensure the availability of safe and wholesome food for human consumption.
Entrepreneur may contact State Pollution Control Board where ever it is applicable.

Key Regulations of FSSA

A. Packaging and Labeling
B. Signage and Customer Notices
C. Licensing Registration and Health and Sanitary Permits

The scheme is implemented by agencies/ organizations such as Govt. / PSUs/ Joint

Ventures/ NGOs/ Cooperatives/ SHGs / FPOs / Private Sector / individuals etc.
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN assume no
financial liability to anyone using the content for any purpose. All the materials and content
contained in Project report is for educational purpose and reflect the views of the industry
which are drawn from various research material sources from internet, experts, suppliers and
various other sources. The actual cost of the project or industry will have to be taken on case
to case basis considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is intended for
general guidance only and must not be considered a substitute for a competent legal advice
provided by a licensed industry professional. SAMADHAN hereby disclaims any and all
liability to any party for any direct, indirect, implied, punitive, special, incidental or other
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Content, which is provided as is, and without warranties.