1 1.

READY TO EAT VEGETABLES Introduction

In most of the big cities, lifestyles are changing very rapidly. With working couples, life has become very fast and disposable income gas increased. This has resulted in many ready to eat items becoming popular during last few years. Ready to eat vegetables is one such item, which is gaining popularity in urban areas. With many Indians settling abroad, students go out for further studies and foreigners developing a liking for the Indian curried vegetables and other food items. There are fairly good chances of exports as well. The promoters must observe strict hygiene norms irrespective of the targeted market. 1.2 Objective

The primary objective of the model report is to facilitate the entrepreneurs in understanding the importance of setting up unit of Ready to Eat vegetables, technology and financial parameters of various components for preparation and submission of project proposal to bank for sanction of long term loan. This model report will serve as guidance to the entrepreneurs on starting up such a new project and basic technical knowledge for setting up such a facility. 1.3 Raw Material Availability

The raw material and there area and production in the state is given in the table below: Name of crops Potato Onion Tomato Brinjal Cabbage Cauliflower Pea 1.4 Market Opportunities Area 47602 35704 18254 13208 3349 7665 17278 Production 7.140 5.713 2.738 1.981 0.670 1.226 1.901 Yield 15.00 16.00 15.00 15.00 20.00 16.00 11.00

With change in lifestyle (nuclear families, working couples, more disposable income and less time to cook), more and more people, are opting for ready-to-eat food in a big way and , is estimated to be around Rs 50 crore and growing at 30 per cent a year. The sheer variety thats available on supermarket shelves and local kirana stores is mindboggling. MTR, ITC, Tasty Bite, Currie Classic and Kohinoor offer customers several ready-to-eat options in regional category to choose from: so the choice is from kharabath, palak paneer, bharwan baigan, Kashmiri rajma, avial and even the evergreen dal makhni.
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Costing as little as Rs 25 and going up to to Rs 150 (dal Bukhara), the ready-to-eat market has good potential to tap upon. Socio-economic changes like an increase in the number of professional women, greater exposure and other overall societal changes are some of the factors have reduced the time available for cooking. Hence women today seek alternatives, which are provided by the packaged meals segment. The packing of these products comprises layers of polyester and aluminium foil held together by special glue. In a country like India, where the population prefers fresh, cooked food, introduction of ready-to-eat meals was not an easy task. But with increase in awareness that ready-to-eat foods are natural and free from preservatives it is expected that the demand for ready to eat foods will increase in due course of time. With many Indian traveling within and outside the country, cans of such assorted vegetables are convenient as well as economical. Yet another growing market segment is the non resident Indians and many foreigners with whom Indian cuisine has become very popular. But thrust of this note is growing domestic market, as export market would need large production capacity. Exports can be thought of after settling down in the domestic market. But this product is still confined to big Indian cities and location has to be selected accordingly. Marketing will be very critical in view of presence of couple of competitors. Hence proper network of retailers, adequate publicity and appropriate placement are important. 1.5 1.5.1 Project description Applications

There is a possibility of many curried food items like chhole, rajma, mutter, paneer, palak panner, dum allo, malai kofta, navrattan korma, kashmiri dum aloo and so on and there could be some new varieties as well. These vegetables can be eaten with rice and chapattis. 1.5.2 Availability of know how and compliances

CFTRI, Mysore has successfully developed the technical know-how. Compliance under the PFA Act is mandatory. 1.5.3 Capacity of the Project

The proposed capacity of the unit is 1152 tonnes per year, but it can be increased in the coming years depending upon the success of the project.

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1.5.4

Critical success factors

As market share is dominated by few big companies it is proposed to attract investment from private sector for creating market awareness and brand building of the produce. Formulation of curried vegetables and dals play key role in success as the taste of the product has prime importance The products are mainly for export, strict hygienic conditions at each stage of plant operation is essential One HACCP professional to be employed at the beginning of the project itself Manufacturing process

1.5.5

It is simple and standardized. Vegetables and pulses are thoroughly washed in water and then they are cut in the required size or vegetables like potatoes and carrots are peeled and then cut. Then they are cooked in the steamed jacketed kettle. Simultaneously curry is prepared with ingredients like chopped tomatoes, onions, garlic, butter, chill, spices etc. and both are mixed homogenously. On cooling they are packed in the sterilized cans and cans are then exhausted sealed and labeled. The yield is 120% due to addition of many other ingredients and water. The process flow chart is as follows
Washing of vegetables and pulses Cutting/Peeling of Vegetables Cooking of Vegetables & Curry Preparation Mixing Of Vegetables and Curry Canning Packing and Labelling

1.6

Project component and cost

Major components of the projects and their costs are described in the table hereunder:

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1.7

Land and Building

Unit SqM Qty 1,000 1,000 SqM LS LS 500 10% 1 15% 1 15% 1 1 1 Cost/unit 625.00 1,500.00 5,000.00 50,000,000 2,000,000 1,410,000 500,000 240,000 Total 48.75 6.25 15.00 25.00 2.50 575.00 500.00 75.00 23.00 20.00 3.00 21.50 14.10 5.00 2.40 668.25

PARTICULARS LAND & BUILDING Land Land Development Land Area Building Production Block Building operations and other operations Contingencies PLANT & MACHINERY PLANT & MACHINERY Contingencies MISCELLANEOUS FIXED ASSETS Total Miscellaneous Asset Contingencies PRE-OPERATIVE EXPENSES Establishment Professional Charges Security Deposits TOTAL

1.8

Plant and Machinery

The total cost of the plant and machinery is Rs. 575 Lakhs. The main plant and machinery required for this project will be vegetable washer, abrasive peeler, rotary slicer, chopper, preparation table, aluminum trays, plastic crates, steam jacketed pans, straight line exhauster, can reformer, can seaming machine, two- crate vertical retorts, cooling tank etc. The other equipments required are (steam boiler (1.5 MT/ha), Steam pipelines and fittings, electrical installations and fittings, laboratory equipments, workshop equipments, material hadling equipments, fire fighting equipments, weighing scales etc. 1.9 Building

The main production block will cost around Rs. 27.50 lakhs. 1.10 Miscellaneous Assets A provision of Rs. 23 lakhs would take care of all the requirements. 1.11 Preliminary & Pre-operative Expenses A provision of Rs. 21.50 lakhs would take care of pre-production expenses like establishment, professional charges, security deposits etc.

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1.12 Working capital assessment

ITEMS RAW MATERIAL & PACKAGEING COST SUNDRY DEBTORS TOTAL MARGIN MPBF INTEREST ON WC Year 1 9.51 48.94 58.45 14.61 43.83 4.82 Year 3 17.00 87.48 104.48 26.12 78.36 8.62 Year 5 18.89 97.20 116.09 29.02 87.07 9.58

1.13 Means of finance

EQUITY CAPITAL MOFPI SUBSIDY TERM LOAN FINANANCIAL INSTITUTIONS -Payable half yearly Installments TOTAL 25% 14 50.00 10.00% 24.40 42.68% 7.32% 50.00% 100% 291.43 50.00 341.43 682.86

1.14 Cash flow statement

PARTICULARS SOURCES OF FUNDS EQUITY CAPITAL SUBSIDY NET PROFIT (INTEREST ADDED BACK) DEPRECIATION PRELIMINARY EXP.W/O INCREASE IN TERM LOAN INCREASE IN BANK BORROWINGS-WC TOTAL Year 1 31.97 62.35 3.07 43.83 141.22 Year 3 133.45 62.35 3.07 17.41 216.28 Year 5 155.28 62.35 3.07 220.70 Year 7 152.82 62.35 3.07 218.23

1.15 Projected balance sheet

PARTICULARS LIABILITIES EQUITY CAPITAL RESERVES & SURPLUS TERM LOAN BANK BORROWINGS-WC TOTAL Year 1 291.43 43.00 317.03 43.83 695.30 Year 3 291.43 187.95 219.43 78.36 777.17 Year 5 291.43 444.18 121.83 87.07 944.51 Year 7 291.43 715.12 24.23 87.07 1,117.85

1.16 Projected profit and loss account

PARTICULARS NET REVENUE REALISATION TOTAL EXPENSES GROSS PROFIT DEPRECIATION INTEREST PRELIMINARY EXP.W/O PROFIT BEFORE TAX TAXES PROFIT AFTER TAX DIVIDEND DIVIDEND TAX RETAINED PROFIT Year 1 261.00 163.62 97.38 62.35 38.97 3.07 (7.00) (7.00) (7.00) Year 3 466.56 267.69 198.87 62.35 34.22 3.07 99.23 99.23 99.23 Year 5 518.40 297.70 220.70 62.35 25.42 3.07 129.86 129.86 129.86 Year 7 518.40 300.17 218.23 62.35 15.66 3.07 137.16 137.16 137.16

1.17 Key indicators

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NET PRESENT VALUE at current Inflation (Rs. in lakhs) INTERNAL RATE OF RETURN % AVERAGE DSCR BREAK EVEN POINT % PAY BACK PERIOD ( YEARS)

815.73 22.54 2.53 58.13 4.58

1.18 Manpower Requirement

PARTICULARS SUPERVISORY STAFF MANAGER SUPERVISORS SALES MANAGER WORKERS SKILLED WORKERS SEMI SKILLED LABOURS HELPERS NO. 1 2 2 6 9 10

1.19 Assumptions
Project & Financing Contingencies on Building Contingencies on Equipment Term Loan Rate of Interest on Term Loan Subsidy Considered Subject to ceiling Expected time of Installation Moratorium CAPACITY Capacity Per Annum TPA Number of Operational Days DAYS Working Hours Per day Hrs Yield CAPACITY UTILIZATION Year I Year II Year III Year IV SALES PRICE W S Price Rs/MT OTHER EXPENSE Commission Marketing Expenses POWER Connected Load HP DEPRICIATION AS PER COMPANYS ACT BUILDING PLANT & MACHINERY MISC. FIXED ASSETS LAND & SITE DEVELOPMENT MAINTENANCE BUILDING PLANT & MACHINERY MISC. FIXED ASSETS LAND & SITE DEVELOPMENT 10% 15% 50% 10% 25% 10 6 1152 240 20 95% 50% 70% 90% 100% 45000 7.5% 2.5% 60 3.34% 10.34% 7.07% 1.63% 2.00% 3.00% 2.00% 1.50%

Months Months

1.20 Sources of technology

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Technology of the project related material handling equipment is available with indigenous companies and could be set up at competitive prices. Major suppliers are understated Techno Equipments, 31, Parekh Street, Girgaon, Mumbai 400 004 Raylons Metal Works, P B No 17426, J B Nagar, Andheri (E), Mumbai 400059 Auric Techno Services Pvt Ltd, C 101, Sgreenath Hermitage, Baner Rd, Pune 411008, Tel No 25898072/99113, Fax No 25899113 Container Industries, C-299, Ghatkopar Industries Estate, 72, LBS Marg, Mumbai 400080

The actual cost of projects may deviate on change of any of the assumptions.

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