Pomegranate Aril Extraction with

Modern Technology

Presented to:
Mr. Suresh Bhosale
Faculty-Techno Economic
Feasibility Report

Presented By:
Trina Bhagat 05 Meghraj Gawande 09
Rishika Mittal 30 Sagar Shinde 38
Jyoti Jadhav 51
INTRODUCTION TO THE PROJECT
We are a group of entrepreneurs, who are pursuing
MBA in Agribusiness and want to set up a processing
plant, in the Satara district of Maharashtra where we
will concentrate mainly on Pomegranate aril
extraction using modern technology. The cost of the
project is around 2.3 crores.
 Pomegranate
• Botanical Name: Punica granatum
• Family: Lythraceae
• Origin: Native to the region of Persia and
the Himalayan ranges of India
• Deciduous shrub or small tree growing in between
five and eight meters tall.
• The “super fruit”, loaded with important health
benefits
• Major Cultivators: India, Iran, USA, Turkey, Spain,
Israel are leading growers in world.
 Indian scenario
• There is an increase from 96.9 thousand ha in 2003-04 to
116.4 thousand ha in 2005-06; similarly, the production has
increased from 664.9 thousand tons to 849.1 thousand tons.

• The total production of pomegranate is concentrated mainly

in the
– Western Maharashtra,
– Karnataka,
– Andhra Pradesh,
– Gujarat
The area, production and productivity of pomegranate in India

YEAR AREA PRODUCTION PRODUCTIVITY

(000’ ha) ( 000’tons) (tons/ha)

2003-2004 96.9 664.9 6.86

2004-2005 111.8 800.7 7.16

2005-2006 116.4 849.1 7.29

Source: Indian Horticulture Database, 2006

 Pomegranate Aril
• An aril (or arillus) is any specialized
outgrowth from
the funiculus (attachment point of the
seed) (or hilum) that covers or is
attached to the seed.

• In pomegranate we can see these arils,

which are the fruit part which we eat.

•So, we are going to deal in extracting

this aril and market it .
 Nutritional Benefits
Energy 285 kJ (68 kcal)
Carbohydrates 17.17 g
Sugars 16.57 g
Dietary fiber 0.6 g
Fat 0.3 g
Protein 0.95 g
Thiamine (Vit. B1) 0.030 mg (2%)
Riboflavin (Vit. B2) 0.063 mg (4%)
Niacin (Vit. B3) 0.300 mg (2%)
Pantothenic acid (B5) 0.596 mg (12%)
Vitamin B6 0.105 mg (8%)
Vitamin C 6.1 mg (10%)
Iron 0.30 mg (2%)
Potassium 259 mg (6%)
 Medicinal Properties
• Extremely rich source of antioxidants, vitamins
C, E and A and vital fatty acids
• Ability to fight cancer, Diabetes
• Strengthens the cardiovascular system
• Fights osteoarthritis
• Lowers bad cholesterol
• Currently gained importance in Ayurvedic
medicines.
 Reasons for selection of pomegranate

• Untapped market potential of pomegranate

Aril
• Arils are Ready to eat.
• Their will be no issues of external appearance
of fruit.
• Medicinal values, Ayurvedic importance.
• Line of machineries and equipments
 Why Aril Extraction?
• Market Potential is high
• New Concept in Indian Market
• Market for ready-to-eat Fresh fruits is
increasing in National & International market.
• Consumer friendly.
• High export potential.
 The Fresh-Cut Market
• What?
Fresh agricultural produce that has been only
physically altered – i.e. washed, peeled, cut, etc. –
while maintaining its farm-freshness.
• Why?
The fresh-cut market is increasingly popular in today’s
fast-paced, health-conscious world, offering garden fresh
produce that’s ready to eat.
• According to US surveys:

81% of consumers address health issues through choice of food

consumption.
76% report regularly buying fresh-cut products.
 Our Planning of unit
•We are going to establish highly mechanized unit for extraction of
Aril

•We are concentrating on Domestic market(70%), Export Market

(30%)

• Under domestic market ,Metro cities, Agri retail chains, 5 star

hotels will be contacted for market.

•For Export market we are concentrating on European market.

DETAIL PROJECT REPORT
 Title of Project
“ Pomegranate Aril Extraction with
Modern Technology ”
 Objectives
• To procure, extract and sell pomegranate arils
in domestic and international market
profitably.

• To provide hygienic and nutritive arils in

convenient packages.
 Background of Entrepreneurs
• Names: Trina Bhagat, Meghraj Gawande,
Rishika Mittal, Jyoti Jadhav, Sagar Shinde.

• Qualification: All are MBA in Agri Business

with good Management skills. They even have
Horticultural and Biotechnological background
to work efficiently.
 TECHNO FEASIBILTY ANALYSIS
• Location Of The Project
• Land & Plant Layout
• Selection Of Plant And Machinery
• Raw Material
• Market and marketing strategies
• Manufacturing Process/ Tech.
 LOCATION OF THE PROJECT

• For opening unit of pomegranate Aril

Extraction we have chosen place in Tal:Karad,
Dist: Satara in Maharashtra.
• Here one of partner has is own self owned
land, which is road touch to NH-4.
• Total land is 1 acre.
 Why Maharashtra?
• Maharashtra is leading cultivator of pomegranate.
• Statistical data for pomegranate in MH for year
2005-2006
AREA (OOO’ha) PRODUCTION PRODUCTIVITY (tons/hec)
(000’tons)
91.0 593.6 6.5

• State Govt. and Agri dept has various schemes,

policies, subsidies for such processing units.
• Good availability of raw material, infrastructure,
transportation.
 Why Karad?
• It has got strategic position.
 Contd..
• Close to raw material area i.e. Solapur, Nashik,
Ahmednagar
• Close to Pune i.e. 150km , Mumbai is 300km
• So near to market area, port for export with
good connectivity of roads.
 Land and Site development
• Land area is around 1 acres.
• Its market price is around 1 lakh to 1.5 lakh
• Site development includes internal roads, leveling
& compound wall.
• Proper planned buildings is planned.
• Proper facility of Water is done with Bore wells
• MSEB power and communication facilities viz. Tele
communication and Postal services are locally
available at site.
 Layout of the unit

Restroom Toilet
Garden
Administration
In

P Receiving and weighing

a Packaging &
r Storage Dispatch
k Out
i Processing
n
g
Plant and Machinery

Extractor
Contd…
Contd..
 RAW MATERIAL

• It will be procured directly from farmers of Satara, Solapur,

Nashik, Ahmednagar.
• For assured supply of raw material, we will go for contract
farming.
• Local market and Pune market will also be contacted for raw
material.
• B grade fruits will be used mostly.
• For packaging material it will be properly designed keeping in
mind all necessary things.
• Corrugated boxes will be taken from local market.
 Varieties of Pomegranate
• Mridula
• Bhagwa
• Ganesh
• Phule Arkata

Why these Varieties?

• Good fruit size
• The average fruit weight is 250-300 grams.
• Arils are dark red in colour
• Varieties are recommended by Mahatma Phule Krishi
Vidyapeeth, Rahuri and Maharashtra Pomegranate
Growers Research Association ,Pune.
 Manufacturing Process for Aril Extraction

 The fruit is fed inverted, either manually or mechanically, onto a conveyor of
open-bottomed circular holders.


 The crowns are cut off and grips lift the fruit onto the next level conveyor,
pressing it down onto corolla-opening knives that longitudinally score the skin.


Flexible drums press down on the fruit causing it to open in segments and
eventually to flatten.


 As the fruit is flattened, the arils fall out with the help of oscillating air jets.


 The untouched and undamaged arils are gravitationally water-separated from
other fruit parts such as peel or membrane, and ready to be conveyed for
packing.
Packaging
 250 gm Packets
Tray Details

Material A-PET

Length 173 mm

Width 129 mm

Height 35 mm

Colour Crystal Clear

 1000 gm Packets

Tray Details

Material A-PET

Length 227 mm

Width 177 mm

Height 60 mm

Colour Crystal Clear

 Use of Peels
•Dry peels of pomegranate are used with Tulsi
leaves and ginger to prepare medicine for Cough.
•Peels of pomegranate are also used colouring
cloths
•Peels are used in many ayurvedic medicines
•Tooth powder is also made.
•So , we can sell our by product to companies
which deals in Ayurvedic medicines and cosmetic
product.
 Market
• Market – We are concentrating on Export market
and Domestic market too.
• Mostly Developed nations (European national)
will be targeted.
• Under domestic market we will concentrate on
all Metro cities, Big retail chains and 5 star
hotels.
• For Urban market we will have small packets
with low cost
 Marketing Strategies
• Segmentation:
We are targeting Upper middle class and higher class
customers.
• Targeting:
Working families in all cities
• Positioning:
Hygienic Arils in Consumer friendly packets
• Direct Marketing :
Marketing Head will look for orders and sell the product.
No out sourcing for marketing.
 Promotional Activities
• For Domestic Market:
 Hoarding in Metro cities
 Banners
 Stall in Food Festivals
 Advertisement in News paper, Magazines
• For Export:
 Advertisement on Internet
 Awareness among exporters
 Staff Details
• Production Staff
– Supervisor/Manager -1
– Packaging Staff-2
– Processing Staff-2
• General Administration Staff
– Accountant-1
– Driver-1
– Watchman-2
– Sweeper-1
Financial Viability of
project
 ASSUMPTIONS
• Average purchase price of pomegranate as Rs.
40/kg (B class quality and even C class
pomegranates can be utilized here)
• All the popular varieties of pomegranate grown
in Maharashtra can be used as raw material in
EAP process technology.
• The Average selling price of arils in India is
assumed as Rs. 150/kg and export price of Rs.
200/kg.
 Cost of the Project
Sr.No. Items Amount in Rs.
1 Land(approx 2500ft) 1,00,000/-
2 Building 18,00,000/-
3 Plant and Machinery 200,00,000/-
4 Technical engineering &consultancy fees 2,00,000/-
5 Expenses on foreign technical for 1 month 2,00,000/-

6 Misc fixed assets(Electrical installation, 5,00,000/-

furniture, generator, Diesel, Telephone
installation, firefighting equipment etc)
7 Pre operative expenses 2,50,000/-
8 Provision of contingencies 5,00,000/-
9 Working capital margin(Approx w.c. 50,000/-
requirement is Rs.2 Lacs)
10 Total 236,00,000/-
 Means of finance
Items Amount in Rs
Total cost of the project 236.00 lacs
Promoter’s contribution 59.00 lacs
Bank Term loan 177.00 lacs
Cash Credit 2.00 lacs
 Subsidies Available
• By NHB:
– Under Scheme, Development of commercial
Horticultural through Production and Post harvest
Management – Subsidy available is 20% of project
cost.
– Under Scheme, Capital Investment Subsidy for
construction & modernization of cold storage-
subsidy available is 25% of project cost.
 Sales Projection
• Minimum production capacity :3000 M.T. per
year
• Average productivity :10 MT/ha
• Conversion ratio :30% of total production
converted to aril production based on market
situation
 Sales Projection
• Capacity of Unit =175 kg/hr(on an av. 2.5 kg of
fruits converting to 1 kg arils)
• Total working months= 5 months
• Working hours per day= 15hrs(2-shift)
• Efficiency of machinery= 95%
• Total Production=175*15*25*5=328125 kg
• Assumption : 30% production- exports
70% production- Domestic market
 Sales Projection
• Export volume =328125*30%=98438 kg
• Domestic market=328125*70%=229687 kg
• Total sales =Domestic + Export
=(229687*159)+ (98438*200)
Total =54140650= 541 lacs
 Cost of Raw Material
• Raw material required
– Fruits required = 328 M.T. *(100/95)*2.75
=949 M.T. =950 M.T.
Raw material cost=950*40,000
= Rs.380,00,000
 Cost of Production
Items Amount in Rs.
Raw Material 380,00,000
Manpower 2,40,000
Fuel, lubricants and Electricity 2,50,000
Administration 4,50,000
Repairs and Maintenance 5,00,000
Packing and forwarding 2,25,000

Market promotion 5,00,000

Depreciation 20,00,000
Interest (term loan) 24,00,000
Interest on working capital 30,000
Total cost 4,45,95,000=446 lacs
Fixed= 38475000
Variable=6120000
 Conversion Cost
• Yearly operation cost = Rs 44600000
• Less cost of raw material(fruit) = -Rs 38000000
• Cost of managing the unit/year=Rs. 6600000
• Total production/ year = 328125 kg
• Cost of conversion of 1 kg fruit to arils
=6600000/328125=20.11
• Adding 15% as profit ,hiring charges =Rs 23.12/kg
 Contd..
• Total sales = Rs .541 lacs (as calculated before)
• Profit before tax(PBT)= 541-446= 95 lacs
Debt Service Coverage Ratio(DSCR)
• 7 year repayment programme and 1 year gestation
• Loan installment = 198/7 =28.28 lacs
• DSCR= Net surplus+ Depreciation
Installment +Interest
= 95+20 = 2.19
28.28+24
• The DSCR for any financial institution to accept the
project should be 1 : 1.75.
• The ratio of 1: 2.19 would be above the minimum norm.
Debt Service Coverage Ratio(DSCR)
Net Loan
YEAR surplus Interest Depriciation installment DSCR

1ST 95 24 20 28.28 2.199693956

2ND 101.86 23 18 28.28 2.337363495

3RD 110 22 16.2 28.28 2.509944312

4TH 117 21.5 14.58 28.28 2.643230213

5TH 119.14 21 13.1 28.28 2.683441558

AVG.
DSCR ---- ----- ---- ---- 2.474734707
 Profitability statement
Particular 2nd YEAR 3rd YEAR 4th YEAR 5th YEAR 6th YEAR
NET SALES
Aril sales 541 550 560 575 575
TOTAL INCOME 541 550 560 575 575
EXPENDITURE
-Raw Material Consumed
POMEGRANATE FRUITS 380 385 390 400 400
-Direct Labour Cost 2.4 2.5 2.5 2.6 2.6
-Power & Fuel 2.5 2.5 2.6 2.7 2.7
-Administration 4.5 4.5 4.5 4.5 4.5
-Packing & Forwarding Cost 2.25 2.35 2.35 2.45 2.45
-Repairs & Maintenance 5.00 5.0 5.00 5.20 5.25
-Depreciation 20.00 18.00 16.2 14.58 13.1
Cost sales 416.7 419.85 423.15 432.03 430.6
Operating Profit 124.3 130.15 136.85 142.97 144.4
-Selling & Admn. Expenses 5.00 5 4.5 4.2 4.00
-Interest on Term Loan AND 24.00 23.00 22.00 21.50 21.00
working capital loan 0.30 0.29 0.28 0.27 0.26
Profit Before Tax (PBT) 95.00 101.86 110.07 117.00 119.14
Provision For Taxation 28.50 30.558 33.021 35.1 35.742
Net Profit after Taxation (PAT) 66.50 71.302 77.049 81.9 83.398
 Internal Rate of Return
IRR

Particulars Cons. Period 1st YEAR 2nd YEAR 3rd YEAR 4th YEAR 5th YEAR
Total revenue 541 550 560 575 575
Total Expenses 416.7 419.85 423.15 432.03 430.6
Profit Before Tax 124.3 130.15 136.85 142.97 144.4

Adjust Depreciation -20 -18 -16.2 -14.58 -13.1

Interest 24.00 23.00 22.00 21.50 21.00

Tax (at 33.66%) 28.5 30.558 33.012 35.1 35.742
Profit after Tax 66.5 71.302 77.049 81.9 83.398
Add Depreciation 20 18 16.2 14.58 13.1
Interest 24.00 23.00 22.00 21.50 21.00
Cash Profit 110.5 112.303 115.249 117.98 117.498
Net Investment@15%

IRR = 39%
 Benefit cost ratio
Benefit Cost Ratio= the net benefits per
year/ Annual Operating cost
= 95/65.95= 1.44
The BC Ratio is more than 1 and hence should
be acceptable.
 Break Even Point Analysis
BEP = Fixed Cost/Contribution
(In % capacity utilization)
= Fixed cost/
Sales - Variable cost
= 6120000/
54100000-38475000
= 39.1%
The Break Even point in terms of capacity utilization is 39.1
%. This BEP is a achievable target for the project.
 Sensitivity Analysis
• The purpose of the sensitivity analysis or CVP
analysis is to study the cushion available in
the profitability of the project to withstand
shortfalls in the expected results owing to
uncertainties
• Assuming that the raw material availability
decreases due to “Oily spot” disease in a
particular year. The direct effect of this is the
increase in the prices of raw material i.e.
pomegranate fruits. Considering this situation
in mind we have assumed that the production
cost increases by 10 %. In this scenario the
various ratio’s for the financial viability of the
project are calculated as follows.
• Increased raw material cost- Rs. 427,00,000
• DSCR = 2.02
• Benefit to Cost ratio = 1.30
• IRR = 34 %
• From all of the above ratio’s we can conclude
that the project will be financially viable in
case of any adversities.
 Future Plans
• Production of pomegranate Aril Wine
• Production of pomegranate Juice.
• Pomegranate Dried Arils.
• Increase the shelf life arils through modified
atmospheric packaging technology.
 Social Responsibility
• Employment to local people.
• Source of assured income to the farmers of
dry land area.
• Help from SHG can be sought for cleaning,
packaging & other administrative work. This
will be a source of income for the group
members.
SWOT ANALYSIS
 STRENGTHS
• The technology can give boost to the consumption of
pomegranate.

• It may lead to increase in the profitability of

pomegranate growers due to easier market access.

• Fruit is suitable in semi arid and arid regions with low

consumption of water under drip and hence can upscale
the economy of farmers in dry land area in Maharashtra.
 WEAKNESS
• The technology is not introduced so far in India and
no technocrat or skilled workers available.

• Have to depend on Israel for technological know

how, spare, etc.

• Unaware of the market acceptability of Indian

consumers.
 Contd..
• Substantial amount has to be spent on marketing,
advertisement and publicity.

• The shelf life of 10 days has to be extended further

for tapping distant market.

• With existing shelf life the cold chain has to be

maintained efficiently.
 OPPORTUNITIES

• Scope to modify the technology to suit Indian situation

and make it more cost effective.
• Can convert it into semiautomatic rather than fully
automatic requiring low labour and reduction of fixed
assets value.
• The market of growing middleclass people in India,
having more disposable income and awareness of
hygiene, can be tapped progressively.
• Export market can be further explored.
• Possible to tap health and pharmaceutical market.
 THREATS
• Acceptability of Indian fruits in foreign markets due
to stricter codex norms may be in doldrums.

• Disease controlled on pomegranate crop and the

vindictive propaganda in export market.

• A volatile price of imported spare parts and non

availability of foreign technical know how.
Thank You