PROJECT REPORT ONPAPAD MANUFACTURING

UNIT

SUBMITED BY
INTRODUCTION
Papad is a popular and tasty food item in the Indian diet since many centuries. It is
essentially a wafer like product, round in shape and made from dough of powdered pulses,
spice, powdered chilly and salt. Variety of pulses and proportion of pulses and spices varies
from region to region depending upon preferences of local people whereas certain varieties
are popular on a larger scale. Traditionally, this activity was confined to household papad
making but in view of increasing demand and availability of machinery is has now been
developed in cottage and small scale sector.

OBJECTIVES
The objective of the profiles is to encourage and assist prospective entrepreneurs in MSME
sector in and guiding making them aware of the opportunities of this sector. It is also
being developed by the Directorate of the Food Processing Industries, Government of West
Bengal to help entrepreneurs with knowledge about raw materials availability, knowledge
of market, source of technology and plant and machinery suppliers. M/s ITV Agro & Food
Technologies Pvt. Ltd., New Delhi has helped in developing the project profile.

MARKET OPPORTUNITIES
Market for papad is steadily growing across the country. There are not much seasonal
fluctuations but demand generally goes up by 10% to 15 % during winter season. There are
a couple of national brands but the market is predominantly controlled by the local brands.
This activity is yet to pick up in West Bengal and thus, prospects for a new entrant are
bright, provided quality is good and prices are competitive. It can be sold through many
outlets of provision and departmental stores. Before launching the product, a quick
assessment of consumer preference is advisable.
 CAPITAL INPUTS
Land and Building

A plot of land of about 150 sq.mtrs. with built-up area of approximately 80 sq.mtrs.
shall be adequate to house all the equipments leaving sufficient space for storage and
packing. The location need not be at a prominent place as counter sales is not
envisaged.

PROJECT DESCRIPTION
Product & Its uses

Papad is a favourite item with Indians and is used as taste enricher with the main
course and as a snack item. Since it is made from pulses, it is easy to digest and
nutritious as well. It is a very easy to make instant food item and is either fried in
edible oil or simply roasted before serving . Its shelf life is 2.5 to 3 months. This
product can be made anywhere in the country. The note envisages location at an
appropriate place in West Bengal.

MANUFACTURING PROCESS

Papad can be manufactured from different varieties of pulses or there could be a

combination of pulses as well. Adequate quantity of water is added in flour of pulses,
common salt, spices and sodium bicarbonate and homogenous mixing is done to obtain
dough. After about 30 minutes, small balls weighing around 7-8 grams of dough are
made. These balls are then placed in papad making machine or papad press wherein
these balls are pressed and circular papads are made as per the size of mould. These
papads are then sun-dried but in this note drier with trolley is recommended as sun-
drying may not be always feasible in Assam. Lot of 25 or 50 papads is then packed in
polythene bags. CFTRI, Mysore, has successfully developed papad making press.

Plant and Machinery

It is suggested to have annual rated production capacity with 300 working days and 2
shift working of 60 tonnes. To install this capacity, following machinery shall be
needed:
 Item Qty. Price (Rs.)
Grinder with electric motor having 30-35 kgs/hr. capacity 1 70,000
Mixer of 20 kgs. per charge capacity with electric motor 1 65,000
Pedal-operated papad press 2 35,000
Drier with trolley and 48 trays with heating element of 9 1 1,50,000
KW
Extra aluminium trays 50 50,000
Sealing Machine 2 40,000
Water Storage tank 1 10,000
Laboratory Equipments -- 15,000
Weighing Scale 1 17,000
Total 4,52,000

5.0 Miscellaneous Assets

Some other assets like aluminum top tables, furniture & fixtures, baskets,
drums, storage racks, aluminum/stainless steel utensils etc. shall also be
required for which a provision of Rs. 40,000/- is made.

5.1 Utilities
The total power requirement shall be 25 HP whereas water required for process
and sanitation and other purposes shall be about 700-750 liters per day. The
annual cost under this headat100%capacityutilisationshallbearound Rs.50,000/-
.

5.2 Raw Material

The all important raw material would be flour of pulses depending upon the
product mix. Since annual requirement even at 100% will not be more than 60
tones, availability would not be a bottleneck. Other materials like salt, spices,
edible oil, preservatives etc. shall be required in small quantity and they will be
available locally. Packing material like different sizes of polythene bags and
corrugated boxes shall also be available locally.
6.0 MAN POWER REQUIREMENTS

Particulars Nos. Monthly Total Monthly

Salary (Rs.) Salary (Rs.)
Skilled Workers 2 4500 9000
Helpers 4 3000 12,000
Salesman 1 6,000 6,000
Total 27000

7.0 TENTATIVE IMPLEMENTATIONSCHEDULE

Activity Period (in
months)
Application and sanction of loan 2
Site selection and commencement of civil work 1
Completion of civil work and placement of
orders for machinery 4
Erection, installation and trial runs 1

8.0 DETAILS OF THE PROPOSEDPROJECT

8.1 Land and Building
Own/Rented

8.2 Machinery
The total cost as spelt out earlier will be Rs. 4,52,000/-.

8.3 Miscellaneous Assets

A provision of Rs. 40,000 as explained before is considered to be sufficient.
8.4 Preliminary & Pre-operative Expenses
Expenses like registration & establishment charges, trial run, interest during project
implementation etc. will be around Rs.40,000/-.

8.5 Working Capital Requirement

The rated production capacity of the project shall be 60 tonnes per year but it is
assumed that it would operate at 60% in the first year. The working capital needs at
this level shall be asunder:
(Rs. in lacs)
Particulars Period Total
Stock of Raw Materials ½ Month 0.50
Stock of Finished Goods ½ Month 0.40
Receivables 1 Month 0.90
Salary 1 Month 0.27
Other Expenses 1 Month 0.20
Total 2.27

Cost of the Project

(Rs. In lacs)
Item Amount
Land and Building Own/Rented
Machinery 4.52
Miscellaneous Assets 0.40
P & P Expenses 0.40
Contingencies @ 10% on Building and
Plant & Machinery 0.38
Working Capital 2.27
Total 7,97
PROFITABILITY CALCULATIONS
Production Capacity and Build-up
The annual installed capacity shall be 60 tones but in view of teething troubles and
other difficulties like power failure, absenteeism etc. the actual utilization is taken at
60% and 75% respectively during first 2 years.

Sales Revenue at 100%

(Rs. In lacs)
Product Qty. Selling Price Sales
(Tones) (Rs.)
Papad 60 32000 19.20

Raw Materials Required at 100%

(Rs. In lacs)
Product Qty. Rate per Value
(Tones) Ton
Flour of Pulses 58 16,000 9.28
Edible Oil, Salt, Spices,
Preservatives, etc. -- -- 0.60
Packing Material -- -- 0.70
Total 10.58

9.0 Utilities
Annual expenditure on utilities even at 100% activity level is likely to be Rs. 50,000/-
as explained earlier.

9.1 Depreciation
The method adopted is WDV and rates considered are 10% on building and 20% on
plant & machinery and miscellaneous assets.
10.0 PROJECTED PROFITABILITY
(Rs. in lacs)
No. Particulars 1st Year 2nd Year
A Installed Capacity ---- 60 Tones -----
Capacity Utilization 60% 75%
Sales Realization 11.52 14.40
B Cost of Production
Raw Materials 6.34 7.93
Utilities 0.30 0.38
Salaries 1.25 1.40
Stores & Spares 0.15 0.18
Repairs & Maintenance 0.18 0.24
Selling Expenses @ 10% 1.15 1.44
Administrative Expenses 0.18 0.24
Total 9.55 11.81
C Profit before Interest & Depreciation 1.97 2.59
Interest on Term Loan 0.43 0.29
Interest on Working Capital 0.17 0.21
Depreciation 0.59 0.50
Net Profit 0.78 1.59
Income-tax @ 20% -- 0.30
Profit after Tax 0.78 1.29
Cash Accruals 1.37 1.79
Repayment of Term Loan -- 1.20

11.0 BREAK-EVENANALYSIS (Rs. inlacs)

No Particulars Amount
[A] Sales 14.40
[B] Variable Costs
Raw Materials 7.93
Utilities (70%) 0.28
Salaries (70%) 0.98
Stores & Spares 0.18
Selling Expenses (80%) 1.01
Admn. Expenses (50%) 0.12
Interest on WC 0.21 10.71
[C] Contribution [A] -[B] 3.69
[D] Fixed Costs 2.10
[E] Break-Even Point [D] ÷ [C] 57%