Arabic Gum Project Report, Manufacturing Plan

Arabic gum project report, manufacturing process, and business plan: Arabic gum is also known as acacia gum, gum sudani, meska, chaar gund, or goond, and this natural emulsifier is derived from hardened sap from two kinds of acacia trees (Senegalia senegal (Acacia) and Vachellia (Acacia) seyal). Food and beverage companies use Arabic gum to emulsify their products. Arabic Gum distributes sugar evenly within the liquid and helps to prevent crystals from forming at the bottom of the container. In addition to its medicinal properties, Arabic gum contains high levels of dietary fiber, which can help treat stomach issues. Moreover, it is widely utilized in traditional lithography and printing. Dietary fiber and fiber rich foods account for the majority of consumer spending on food items, mainly owing to consumers’ increased purchasing power in baked goods and confectionery.

In addition to having high dietary fiber content, Arabic gum has a healthy effect on digestion and bowel movement. Constipation and irregular bowel movements can be treated effectively with arabic gum.In order to include this emulsifier as an ingredient in food products, many Arabic gum manufacturers are focused on securing regulatory clearance. Among the most integral production procedures in the pharmaceutical industry, powder encapsulation remains crucial. Besides being colorless, tasteless, odorless, and water-soluble, instantly soluble Arabic gum exhibits other key properties that are contributing to its market success. There is a tendency for the Arabic gum market to fluctuate with the weather. The variation in weather one year to another causes fluctuations in production and price for Arabic Gum, presenting a challenge to the growth of the market. Although the opportunity is high, there are limitations in the production process within each country.

A Guide To Arabic Gum Project Report, Manufacturing Process, And Business Plan

Arabic Gum Manufacturing Process — Arabic Gum (Image source: pixabay)

Market potential of Arabic Gum Manufacturing Business

In 2019, the size of the global Arabic gum market stood at 27.800 million Indian rupees and is expected to grow at a CAGR of 5.9% over the forecast period. Acacia gum, also called Arabic gum, is a natural emulsifier used in a wide range of applications, including cosmetics, pharmaceuticals, food and beverages, and paints. In most confectionery products, it is primarily used as a filling agent and thickening agent. Increasing awareness of the multi-functionality of Arabic gum and its therapeutic benefits is driving demand for the product. Throughout the world, the multiple functions of Arabic Gum to improve food quality have seen its wide-spread adoption for various applications. Arabic Gum also possesses some medicinal properties, such as the ability to reduce dental plaque and heal wounds, which are encouraging its use in the pharmaceutical industry, driving the growth of the market for Arabic gum worldwide.

Arabic gum numbers are on the rise, resulting in manufacturers seeking regulatory approval for the addition of emulsifiers to food products as a major ingredient. The pharmaceutical industry has long recognized power encapsulation as one of the most important processes. Arabic gum has the properties of tastelessness, odorlessness, colorlessness, and high-water solubility, which makes it ideal for encapsulating flavors, colors, and aromas. Acacia market share has held a strong position across the globe due to the increasing consumer demand for soluble Arabic gum leading manufacturers to design and release new products and Manufacturers are encouraged to release new formulations like instant soluble Arabic gum in response to consumer demand. The growing popularity of soluble Arabic gum in beverages is projected to boost the food and beverages segment during the forecast period.

Advantages of using Arabic Gum

100% natural, plant-based
No additive (clean label)
Suitable for most gums, enzymes, resins, starches and carbohydrates
Gold emulsifier (Gum senegal)
Niska toplinska vrijednost (1.7cal / g )
Low GI
Low viscosity at high concentrations
Rich in soluble dietary fiber (> 90%)
Stability – long service life
Stable over a wide pH range (3-9)
Industries using Gum Arabic
Bakery
Meat industry
Various food
Pharmacy
Chemistry
Various industry

Business plan for starting Arabic Gum Manufacturing

To start a small-scale Arabic Gum Manufacturing Business in India, you need to first draft a perfect business plan by considering the following points:

Basis and presumptions of Arabic Gum Manufacturing Business
Implementation schedule of Arabic Gum Manufacturing Business
List of approvals required to start Arabic Gum Manufacturing Business
Raw materials required for Arabic Gum Manufacturing Business
List of machinery and equipment for preparing Arabic Gum
Manufacturing process of Arabic Gum
Project economics of Arabic Gum Manufacturing Business

Basis and Presumptions of Arabic Gum Manufacturing Business

The Arabic Gum Manufacturing project profile relies on the following assessments:

Working hours/shift: 8 hrs.
No. of shift/day:1
Working days: 300
Labor expenses: According to State Government’s Minimum Wages Act.
Rate of interest: 15% per annum
Costs of machinery and equipment: Taken based on A particular dealer
Value of raw material: As per local market Packing material/others rate (on wholesale rate)
Land: owned
Building Construction charge: About Rs. 2000 per sq. ft.
Break-even point will be estimated on a full capacity utilization basis
Pay-back time is 7 years

Implementation schedule of Arabic Gum Manufacturing Business

The project implementation schedule

Project preparation: 0-1 month
Location selection, acquisition of 1-2 months land and land development
Loan Sanction: 1-3 months
Building construction: 3-4 months
Connection of electric supply and water: 4-5 months
Obtaining machinery: 5-6 months
Electrification and installation: 6-7 months
Recruitment of staff and workers: 7-8 months
Trial run can be initiated in 8-10 months
Commercial production could start from 10-11 months

List of approvals and permits required to start Arabic Gum Manufacturing Business in India

The next step to start Arabic Gum Manufacturing Business in India is acquiring the below list of licenses, permissions and registrations –

Register your business identity
MSME registration
GST registration
ROC
Get the PAN Card
Registration of firm
Shop Act License
FSSAI License
IEC Code
Export License
Fire and Safety
ESI
PF
No Objection Certificate from pollution board
Trade license from local municipal authority

Area required to start Arabic Gum Manufacturing Business

The location does not affect the business much. But it should be large enough to arrange various machinery and equipment. It should have a facility for the transport system.

Arabic Gum Manufacturing Process

The tree bark is mechanically separated from the Arabic Gum and continued with the process to extract the Gum.

Basic machines required for Arabic Gum Manufacturing Process

The below are the list of machinery required to start Arabic Gum Manufacturing Business:

Cleaner
Splitter
Pneumatic conveyor
Elevator
Cone mixer
Centrifugal roaster
Bagging
Rotary siever
Flaker machine
Cooler
Conical blender
Pneumatic dryer line
Others are the common machinery needed for the Arabic gum manufacturing.

Arabic Gum Project Report/Economics of Arabic Gum Manufacturing in India

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Land and Building Owned/Rented

Plant and Machinery: Rs. 11,47,000

Miscellaneous Assets: Rs. 1,90,000

Working capital: Rs. 10,56,000

Total: Rs. 23,93,000

Own Contribution (min 10%): Rs. 2,38,000

Subsidy @ 35% (Max. Rs 10 Lac): Rs. 4,68,000

Term Loan @ 55%: Rs. 7,35,000

Working Capital (Bank Finance): Rs. 9,50,000

Total: Rs. 23,93,000.

*Term loan: Term loan of Rs.7.35 Lakh is required for project cost of Rs. 23,93,000

Raw Material: Rs. 14,37,000.

Salary and wages

Supervisor: Rs. 25,000

Skilled (in thousand rupees): Rs. 80,000

Unskilled (in thousand rupees): Rs. 40,000

Total salary per month: Rs. 1,45,000

Total annual labour charges (in lacs): Rs. 17.40

Utility Charges: Rs. 40,000

Depreciation: Rs. 1,91,000

Repair and maintenance: Rs. 6,15,000

Packaging: Rs. 19,94,000

Cost of Production: Rs. 2,30,20,000

Cost of Sales: Rs. 2,24,83,000

Profit: Rs. 21,29,000.

How about this: Oregano Oil Manufacturing Project Report.

Profit in Arabic Gum Manufacturing business (pic source: pixaaby)

Break even point:

Fixed Cost x 100 / (Fixed Cost + Net profit): Rs. 251,49,000.

The conclusion of arabic gum manufacturing proces business

As a whole, the research provides a comprehensive overview of the scope, viability, and potential of the Trading industry, particularly financing, technical, and market potential. The project guarantees enough money to repay the loan, plus a good return on investment. Based on the social-economic impact analysis, this project is capable of creating employment of 5 and above. It will address the needs of the Trading and therefore contribute to the expansion and improvement of production of other companies and operations which seek to serve and support this industry. Therefore, employment and livelihood generation will continue to be cyclical. So, from all aspects, the project appears to be technically and socially viable as well as commercially viable.