Iodized Salt Project Report, Business Plan

Introduction to Iodized Salt Project Report, Manufacturing Business Plan, and Making Process:

Do you plan to start an iodized salt production business? If yes, then here is the project plan for a small-scale Iodized Salt Manufacturing Business which consists of market demand, registrations, raw materials, machinery, production process, and project economics.

Iodized salt is the regular table salt mixed with iodine. Consumption of iodized salt avoids iodine deficiency for us. Therefore, it aids in protection from thyroid gland issues, even the endemic goiter. In many regions including India, iodine deficiency has been a great health concern. We can easily resolve this, with the regular intake of iodine salt in an appropriate quantity.

So, let us learn what is meant by iodized salt. Iodine is a micronutrient and dietary compound. Even, it is a vital trace mineral important for human development and growth. Salt is a popular medium for allocating iodine. Iodized salt production is performed by spraying it with a potassium iodate or using a potassium iodide solution. The production method is simple. Even, you can think to initiate on a small scale.

Iodized Salt Project Report, Manufacturing Business Plan, and Making Process

Iodized Salt Manufacturing Process
Iodized Salt (pic source: pixabay)

Market potential of Iodized Salt Manufacturing Business: Iodized salt comes is classified under the FMCG segment. So, the product is having a proper demand in the Indian retail market. Not only the domestic market but there is also an export scope for the iodized salt. India is the third-largest salt-producing nation in the globe after China and the USA. Some of the main importing regions are Malaysia, Nigeria, South Africa, Fiji, Mauritius, etc.

You can check several established manufacturers already. Hence cross verifies the packaging volume and costs to fix your product rate. And these will aid you in defining the price and other essential inputs.

Preparation of project report for Iodized Salt Manufacturing Business

For beginning this type of medium-scale unit, you have to design a customized project report or business plan. Broadly, you will have to illustrate the technical segment and the project finances. If you have some experience and knowledge previously, you can draft a plan of your own by specific market research. Otherwise, you can take suggestions from an expert in the same field.

In the business plan, you have to give the organization information, vision, mission, business goal. The technical part comprises the market opportunity, manufacturing method, raw materials, and QC aspects.

List of approvals required for starting Iodized Salt Manufacturing Business

The list of registrations, licenses, and permissions required to start an Iodized Salt Production Business is essential and is specific to each business. You will need to select the name of the company.

After having your business registered, apply for the MSME Udyog Aadhaar registration. Also, get the Trade License from the local Municipal Authority. You must plan to safeguard the brand name using Trademark Registration. Apply for an FSSAI license as the salt is a food-based product and get the BIS registration for using the popular ISI mark that could be printed on the packaging material.

Area required to establish an Iodized Salt Manufacturing Unit

In establishing the manufacturing plant, you must choose a space mainly. Commonly, the requirement of the specific location is based on the unit size and production quantity. However, you can begin as a small-scale unit is around 1000 sq. ft. of covered area.

Even, you need the most important power and water connection to your unit. It is recommended to design a floor plan before accommodating the machinery. You have to set up the electrical wiring to power the machinery.

List of machinery required for establishing Iodized Salt Production Plant

For initiating a medium-scale iodized salt production plant, you have to acquire the essential machinery.

  • Silos (stainless steel)
  • Belt Conveyor
  • Crushers (Roller/ball)
  • Packing Machines
  • Spraying chamber (SS) for Potassium iodate solution.
  • Mixers

Raw materials required for starting Iodized Salt Manufacturing Process

To initiate the unit, you will have to procure the essential raw materials. According to the 1987 BIS standards, to obtain 30 ppm of iodine, you have to add 50 ppm of potassium iodate. So, you require edible grade salt as the chief raw material. Also, you require technical grade Potassium iodate 40 ppm/25 ppm. Lastly, you require packaging materials such as polyethylene pouch bags and outer cardboard cartons that will be used for bulk packaging.

Recruiting manpower required for starting Iodized Salt production unit

For the production works, one must appoint efficient and expert employees. Broadly, you have to arrange a production team, an accounting section, and a marketing division. Though the specific manpower requisites depend on the business prototype, here we have listed the essential manpower requirements.

  • Production supervisor
  • Machine operator
  • Accountant
  • Factory executives
  • Marketing Head
  • Sales executive

The manufacturing process of Iodized Salt

First of all, add the raw salt to a conical-shaped hopper and smash it using a high carbon steel roll crusher to get the size of 2-3 mm. Then, convey this salt using an inclined conveyor to the discharge point at the ground. Spray the potassium iodate (0.1% aqueous solution) by mixing a bed of salt having a thickness of 10-15 cm, with the help of air pressure. This iodized salt is mixed using the horizontal mixer for uniform mixing of Iodine. Pack the finished item by taking it from the hopper in a particular quantity. Otherwise, you can even pack using one Kg poly pack and promote direct sales.

Potassium iodide is an unstable compound. Thus, you will have to include stabilizers (such as calcium carbonate) to decrease the loss of iodine, while using Potassium Iodide. The iodate, on the other hand, is stable till 560 °C. Except during extreme.

Iodized Salt Project Report/ Economics of Iodized Salt Manufacturing Business in India

In case if you miss this: Neem Oil Manufacturing Project Report.

Economics of Iodized Salt Production
Economics of Iodized Salt Production (pic credit: pixabay)

According to the project plan, you must acquire the proper finance. One has to make arrangements to invest in fixed and working capital. The fixed capital comprises plant and building expenses, purchasing machinery, and pre-operative costs. On the other hand, the working capital cost comprises raw materials, transport, utility, etc. It is recommended to initiate the project by availing bank loan or at least machinery hypothecation or avail overdraft option.

Fixed Capital

Machinery and Equipment: Rs. 7,33,960

Recurring expenditure

a. Raw Material per Month: Rs. 2,29,000

b. Salaries & Wages Per Month: Rs. 32,500

c. Utilities per Month (Power supply, water supply, etc): Rs. 15,218

d. Other Expenses Per Month:

Rent: Rs. 10,000

Postage and stationery: Rs. 1,000

Repairs and maintenance: Rs. 2,000

Traveling and transportation: Rs. 10,000 

Insurance: Rs. 500

So, in total: Rs. 23,500

Recurring expenditure per month = a + b + c + d = Rs. 3,00,218/-

Recurring expenditure per year: Rs. 36,02,616

Total Iodized Salt Manufacturing Project Cost: Plant & Machinery + Recurring Expenditure for one month (known as working capital) = Rs. 7,33,960 + Rs. 3,00,218 = Rs. 10,34,178

Means of Finance

Total Project cost Rs. 10,34,178

Promoter contribution 5 % (-) Rs. 51,709

Total Rs. 9,82,469

Cost of Production Per Annum:

Total recurring cost: Rs. 36,02,616

Interest on total investment @12.5%: Rs. 1,29,272

Total Depreciation on Machinery @10%: Rs. 73,396

So, the total cost of production per annum for the Iodized Salt Manufacturing business = Rs. 38,05,284

Turnover Per Annum: Total production 42 MT

One year production: 42 MT

And total 5.88 pockets, selling price @ Rs. 7.40 per packet

Total Selling value: Rs. 43,51,200.

Profit in Iodized Salt Manufacturing project report

Profit = Turnover – Cost of Production = Rs. 43,51,200 – Rs. 38,05,284 = Rs. 5,45,916

Percentage of profit on sales = Profit per annum X 100/Turnover = 5,45,916 X 100/ 43,51,200 = 12.54%.

Rate of Return

= Profit per annum X 100/Total Capital investment

= 5,45,916 X 100/10,34,178 = 52.78%.

Break-Even Analysis

Total Deprecation: Rs. 36,698

Interest on Investment: Rs. 1,25,000

Insurance: Rs. 2,400

40% of Salary: Rs. 1,56,000

40% of other Expenditure and Utilities excluding Insurance: Rs. 1,83,446

Total: Rs. 5,03,544

Profit per annum = Rs. 5,45,916.

Break-even Point:  

= Fixed Expenditure per annum X 100 / Fixed Expenditure per annum + Profit per annum

= 5,03,544 X100 / 10,49,460 = 47.98%.

Marketing strategies to promote your product

In our nation, retail distribution is the most active method of tapping the market. However, it demands proper planning, execution, and supervision. Besides that, one must check the proper employee who is well-versed with distribution fundamentals. Apart from this, food delivery apps, shopping malls, supermarkets, and e-commerce are also very feasible options in the present times. Moreover, you should inculcate a solid marketing strategy with backed-up active resources. We hope this article regarding the iodized salt production business will contribute to beginning your venture.

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