Papad Making Project Report – Cost, and Profit

Papad Making Project Report

Introduction

Before opening any business, you must make a project report and it essentially includes two segments: One is technical and the other is financial section. When it comes to the technical part, it includes the market, raw materials, machinery requirements, and the kind of technology required for production.

The next financial part includes all the financial resources and profit-associated aspects of the business. Also, add the break-even, return on investment, and payback period here. This will assist you in launching your unit and also aid in taking financial assistance or support from financiers, capitalists, or banks, or other financial organizations.

A step-by-step guide to Papad Making Project Report

Papad
Papad (Image credit: Pixabay)


Set up required in Papad making unit

For setting up the unit, initially, determine whether it is home-based or you need a space for large-scale operations. For home-based it’s very easy. But if you need some area, then find out the proper location and area for the unit which is decided based on the customers you have in mind. Besides, an adequate provision like power and water supply is needed even though you have manual machines to avoid interruptions or other issues.

License, permissions and registrations required to start Papad making business unit in India

After accomplishment of the above aspects, you must register your business and wait for the Food Safety Standards Authority of India (FSSAI) license as it’s a food category business and other approvals from govt. authorities as per your region. It’s important to verify the different licenses which differ from state to state.

Primarily, you must define the management design of your organization. And then as per the design, register your business.

  • Firstly, apply for MSME Udyog Aadhaar which is available as online registration.
  • Then, the important trade license from the local municipality should be applied.
  • The business comes under the food Industry category and requests consent from FSSAI which is also done online.
  • Nowadays it is a must to apply for GST registration.
  • Try to create a current account in any of the nearby banks.
  • Then it is important to apply for the BIS certification. The product must also conform to the PFA Act, guidelines
  • Moreover, it is essential to check the tax liabilities as well for this business.
  • AGMARK certification
  • Fire license
  • Mandi Act
  • Labor Laws such as the following: ESIC, EPFO, etc. 
  • CLU – for land
  • Electricity Bills

Location, Land and area required to start Papad making business

The unit could be established in a rented building. The monthly rent for this unit might be around Rs. 5000/month which will vary depending on the area chosen for the unit particularly.

Machinery required to start Papad making unit

For a new papad-making unit, machinery choice is very significant as diverse types of machinery available in the market based on the operation type, they are manual or automatic. However, it rests on your business which type of machinery you feel necessary to produce what type of quality and quantity in the market.

You can use a manual papad press machine. For the dough preparation, separate manual dough machines are used but on other hand, an automatic machine has various tiers like papad making, dough preparation, and dryer fitted inside. Apart from his, a weighing machine and sealing machine is important for packaging.

Raw materials required for Papad manufacturing

The most significant ingredient essential is pulse flour or whatever variety you are working on to produce in the market. So, based on that, you must procure the pulse flour and needed quantity of your product going to produce. Besides that, also obtain required edible oil, spices, and packaging material as per composition and also take care of expiry date for every component.

In case if you miss this: How To Start Custard Powder Making Business.

Procedure in Papad making business

There is a great possibility to make combinations of flours as desired and add the appropriate amount of water, salt, spices, and preservatives needed, mix it well to make a suitable dough.

After 30 minutes make small balls of about 7-8gm weight from the mix and using a machine, balls are pressed and circular papads are formed as per the size of the mold. Then, dry these papads under sunlight or using automatic machines. Although, machine dried papad appears better than sun drying and is done in less time. Finally, proceed for packing and usually 25-50 papads in polythene bags.

Estimation of the working capital 

The projected working capital of the unit is around Rs 3,23,000. The working capital is analyzed by taking into consideration labor charges, raw material costs required per month. The details are included in the financial investigation of the report.

Cost of the Papad making project

The total cost of the project is about Rs 9,82,000; which is obtained from the financial analysis.

S.NO.Particulars
Estimated Cost In Lakhs
1Plant & Machinery9.32
2Furniture & Fixtures0.2
3Other Assets0.3
 TOTAL AMOUNT Rs.9.82

Source of fund for Papad making business

The owner can avail of a composite loan of Rs. 8,18,000 from the Bank, which comprises

the Term loan for the fixed and working capital. The owner contribution is shown as about Rs. 2,05,000. 

Assumptions to cost and profit analysis

This project report is arranged based on the following expectations.

1. The unit is anticipated to operate 25 days every month on a single shift basis.

2. Working capital is assessed based on raw materials and other expenditures required per month.

3. Any change in the government or bank policy will make a corresponding difference in the project report.

Assumptions to cost and profitability statement

   
Sr No.      Description    Rate Amount
  A  Plant and Machinery  Qty.  Price         Cost   
1Grinder with electric motor having 30- 35 kgs/hr. capacity1   1,22,000   1,22,000  
2Shifter12,00,0002,00,000  
3Mixer of 20 kgs. per charge capacity with electric motor1   2,24,485   2,24,485  
4Pedal-operated papad press12,14,0002,14,000  
5Drier with trolley and 48 trays with heating element of 9 KW1   1,50,000   1,50,000  
6Sealing Machine15,0005,000  
7Weighing Scale117,00017,0009,32,485
  B  Furniture & Fixtures       
1Working Platform110,00010,000  
2Working Table25,00010,00020,000
  C  Other Assets       
1Computer125,00025,000  
2Printer15,0005,00030,000
Total amount: 9,82,485

                                                                                                                                    

PROJECTED COST AND PROFITABILITY STATEMENT (Rs. in lacs)
YEARSPROJECTED
Ist YEARIInd YEARIIInd YEARIVth YEARVth YEAR
 INCOME Sales – Papad  44.10  49.61  55.57  61.99  68.92
TOTAL AMOUNT Rs. …44.1049.6155.5761.9968.92
EXPENDITURE Raw Material Cost Packing Cost Rent, Taxes & Insurance Travelling & Transport Expenses Electricity Expenses Salary Repairs & Maintenance Telephone Expenses Stationery Expenses Administrative Expenses Other Factory overhead Marketing Expenses Insurance Interest Cost – Term Loan Depreciation  21.00 0.32 1.00 1.00 4.00 8.05 1.00 0.02 0.10 0.20 2.00 0.50 0.19 0.73 1.46  23.63 0.34 1.10 1.10 4.40 8.86 1.10 0.02 0.11 0.22 2.20 0.55 0.21 0.60 1.25  26.46 0.36 1.21 1.21 4.84 9.74 1.21 0.02 0.12 0.24 2.42 0.61 0.23 0.45 1.06  29.52 0.38 1.33 1.33 5.32 10.72 1.33 0.03 0.13 0.27 2.66 0.67 0.25 0.28 0.90  32.82 0.41 1.46 1.46 5.86 11.79 1.46 0.03 0.15 0.29 2.93 0.73 0.27 0.10 0.77
TOTAL AMOUNT Rs. …41.5745.6750.1855.1260.53
NET SURPLUS2.533.955.396.878.38
Add : Depreciation– 1.46– 1.25– 1.06– 0.90– 0.77
CASH ACCRUALS4.005.196.457.779.15
Interest on Loan0.730.600.450.280.10
CASH ACCRUALS BEFORE INTEREST4.735.796.908.059.26

Break even analysis

ANNEXURE “K”
BREAK EVEN POINT ANALYSIS
 
Particulars1st Year2nd Year3rd Year4th Year5th Year
Fixed Cost (Rs.in Lacs)20.2521.7023.3625.2227.31
Variable Cost (Rs.in Lacs)21.3223.9626.8229.9033.22
Total Cost (Rs.in Lacs)41.5745.6750.1855.1260.53
      
Sales (Rs.in Lacs)44.1049.6155.5761.9968.92
      
Contribution (Sales-VC) (Rs.in Lacs)22.7925.6528.7532.0935.70
      
B.E.P in %88.8884.6281.2678.6076.51
      
Break Even Sales (Rs. In Lacs)39.2041.9845.1548.7252.73
      
Break Even Point (Kgs per Year)18,66419,03919,50120,04320,658
      
Break Even Point (Kgs per Day)74.6676.1678.0080.1782.63

Where to market your product?

First of all, prepare a marketing policy and consider only local markets initially. Retail distribution is a good way to lay out your material. Also, you can opt for departmental stores, small stores, and shopping malls. Presently, you can consider online channels like big bazaar, Amazon, big basket, Flipkart, spencers, etc. In the food processing industry, papad making is a modest and easy business with low capital.

The conclusion of Papad Making Project Report

The project is organized based on reasonable and consistent estimates and expectations. The project can produce enough cash to pay the interest as well as repayment of the loan. The project is precisely feasible and financially worthwhile.

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