Ghee Manufacturing Project Report and Plan

Introduction to Ghee Manufacturing Project Report, Business Plan: Did you ever think of the Ghee manufacturing business? Yes, it is a very simple process through which you can earn good profits. In this article, you can get all the details regarding the Ghee manufacturing project report, business plan.

Ghee is so much famous in the South Asian region. It is not only prevalent as cuisine but it also has a wide application in cosmetics industries and cultural aspects and rituals.

Ghee is categorized under a class of clarified butter. Being a dairy item, it can be made from cow milk for obtaining high-quality ghee. The quality of the finished product chiefly depends on the butter quality of butter, the type of milk used in the method, and also the duration of the boiling.

A guide to Ghee Manufacturing Project Report, Ghee Manufacturing Process, and Business Plan

Health benefits of Ghee: Ghee is excellently is used because of the healthy fat-soluble vitamins such as vitamins A, D, E, and K. Actually, these vitamins are vital for endorsing bone and brain health, and for improving the immune system. For vegetarians, Ghee provides around 9 K calorie energy/g and is the richest source of animal fat.

Ghee Manufacturing
Ghee Manufacturing

Apart from that, ghee alters fiber into butyric acid, which is good for gut flora. Also, it helps to enhance appetite, improving better health, and aid in losing weight. Ghee will get cooked at a higher point thus free radicals will not get released so simply such as other oil.

Business Plan for establishing Ghee Manufacturing Unit

This is a crucial step where one has to figure various aspects necessary to begin the business. 

Market research for ghee making business plan

Primarily, one has to conduct market research in your area. There are several types of ghee are available currently. Mainly they will be prepared from either cow milk ghee or non-cow milk ghee. Even, ghee has several flavors.

So, you must know the particular demand for several ghee varieties. Apart from that, you should have an idea about the various established ghee manufacturing brands in your region. Identify the packing and price of those packets. These aspects will guide you in crafting a proper business plan and beginning the manufacturing works.

Lastly, you can decide to prepare the business plan properly. Generally, a business plan must comprise executing summary, project expenses, financial analysis, and marketing strategies. If you are interested to begin a large-scale unit, you have the option of availing of loans from banks.

  • Market potential for Ghee Manufacturing Business
  • Implementation schedule of Ghee Manufacturing Business
  • Basis and Presumptions of Ghee Manufacturing Business
  • List of approvals required for Ghee Manufacturing Business
  • Area required for Ghee Manufacturing Business Unit
  • Raw materials required Ghee Manufacturing Business
  • List of machinery required for Ghee Manufacturing Business
  • Manufacturing process of Ghee
  • Project economics of Ghee Manufacturing Business in India
  • Profitability in Ghee Manufacturing Business

Market potential for Ghee Manufacturing Business

Ghee has a great market. It is a popular FMCG product. Ghee stands as the second-largest used up the dairy item in Asian countries chiefly, after liquid milk. Moreover, demand is growing rapidly across the globe. India is represented as the world’s largest producer of buffalo and cow milk and hence the largest consumer and producer of ghee.

The population with age-group 25-45 with children are high consumers of ghee. Thus, it’s a greatly worthwhile market for opening a systematized ghee manufacturing venture.

Basis and Presumptions of Ghee Manufacturing Business

The Ghee 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 5 – 7 years

Implementation schedule of Ghee Manufacturing Business

  • Market analysis and demand, applying for loan 0 – 1 month
  • Preparation of business plan 1 – 2 months
  • Financial support or investment 2– 4 months
  • Selection of location and establishment of unit 3 – 4 months
  • Power and water connection facility: 4 – 5 months
  • Building construction and shed development 5 – 6 months
  • Machinery and equipment purchase 6 – 7 months
  • Procuring raw materials and recruiting of manpower 8 – 9 months
  • Trial operations 10th month

List of approvals and permits required to start Ghee Manufacturing Business

The next step to start Ghee Manufacturing Business in India is acquiring the following 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

Note: These approvals may vary based on the area you would like to start the business.

Raw materials required for starting Ghee Manufacturing Business

In case if you miss this: Spirulina Manufacturing Project Report.

Cream Milk
Cream Milk (Image source: pixabay)

The main raw material is creamy milk. The cream will be separated from the milk to make ghee. Instead, directly you can have cream from which may begin the ghee-making process.

Machinery required for starting Ghee Manufacturing Business

Commonly, the machinery required for ghee preparation depends mainly on the manufacturing process one has planned. However, when the direct cream method is considered, you must have the below machinery.

  • Agitator
  • Steam heated double jacketed kettle made up of stainless steel
  • Steam control valve
  • Thermometer
  • Pressure and temperature gauges
  • Movable, hollow, stainless-steel tube centrally bored in the kettle
  • Weighing scale

Manufacturing process of Ghee  

Commonly, for a large-scale business, you have to do the production continually. A new process of ghee making has emerged called as pre-stratification method. Cream (ripened/unripe) is often useful for ghee-making. Ghee made using unripened cream stays for a longer duration. It is important to check the preparation method of ghee using the unripe cream.

The manufacturing process comprises two stages: Separating cream from milk and extracting the ghee from it. Often, this milk without cream called toned milk is sold. You can arrange a pasteurization set-up to improve the shelf life of the milk and by using automatic machine milk will be extracted. machine.

Packaging of processed Ghee

The final step while planning for the ghee manufacturing process is known as packaging. In this process, the packaging is performed with machines automatically that comprises a ribbon of flat packaging cardboard threaded into it. 

Ghee Manufacturing Project Report/Economics of Ghee Manufacturing Business in India

Fixed Capital

i) Land and Building   

Land Owned

Building 2000 sq. ft. @Rs. 2000 per Sq. ft: Rs. 4,00,000

Over Head Tank: Rs. 40,000

Total: Rs. 4,40,000

ii) Machinery and Equipments: Rs. 4,95,000

iii) Pre-operative Expenses: Rs. 25,000

Total Fixed Capital (i+ii+iii): Rs. 9,60,000.

Working Capital

i) Raw Materials

Full fat milk: Rs. 7,50,000

Polythene bags 75 kg @ Rs.120 per bag: Rs. 9,000

Plywood Boxes of 25kg capacity 300no’s @ Rs.100 per box: Rs. 30,000

Labels, gums and other packing aids L.S: Rs. 10,000

Total: Rs. 7,99,000

ii) Salaries and Wages

Manager cum Food technologist 1: Rs. 20,000

Sales man: Rs. 10,000

Skilled workers-2: Rs. 30,000

Helpers 10 no’s: Rs. 50,000

Total: Rs. 1,10,000

iii) Utilities: Rs. 11,300

iv) Other Contingencies: Rs. 13,700

Total working capital (i+ii+iii+iv): Rs. 9,34,000.

Total Capital Investment

a) Fixed Capital: Rs. 9,60,000

b) working Capital: Rs. 9,34,000

Total: Rs. 18,94,000

Source of Fund

Term loan: Rs. 7,20,000

working Capital Loan: Rs. 7,00,500

Own fund: Rs. 4,73,500

Total: Rs. 18,94,000

Total loan amount required: Rs. 14,20,500.

Cost of production

Total recurring expenditure: Rs. 9,34,000

Depreciation on Building and tank @ 5%: Rs. 1,833

Depreciation on machinery and equipments @ 10%: Rs. 2,917

Depreciation on hand tools@ 15%): Rs. 438

Depreciation on Office equipments @ 20%: Rs. 1,000

Interest on loan (15%): Rs. 17,756

Total production cost: Rs. 9,57,944

Say: Rs. 9,58,000.

Turnover per month

Total: Rs. 10,75,000

Net profit per month: Rs. 1,17,000

Annual profit without tax: Rs. 14,04,000

Break Even Point Analysis

1) Fixed Cost

Depreciation: Rs. 6,188

Interest: Rs. 17,756

40% of salary and wages: Rs. 44,000

40% 0f other expenses: Rs. 5,480

Total: Rs. 73,424

2) Net profit: Rs. 1,17,000

Profit in Ghee Manufacturing
Profit in Ghee Manufacturing (Pic spource: pixabay)

B.E.P = Fixed Cost x 100 / (Fixed Cost + Net profit) = 38.56%.


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