Starting a Sugar Mill Business in India
Do you plan to start a sugar milling business? Find here a comprehensive sugar mill project guide with investment, project expenses for an easy set-up.
The Sugar Industry in India stands as the second-largest rural-based agro-industry after the textiles. Because of the steep growth in crude oil prices, the sugar industry has observed an upswing in the last few years through the realization of better sugar costs. A sugar mill is also an eco-friendly factory as it gives the renewable source of energy by generation of electricity from its co-product bagasse and alcohol from molasses.
A sugar mill is classified under the category of medium to large scale segment in India. The Indian sugar industry is a critical business. First of all, it caters to the domestic market, the largest in the world, along with that, it aids 50 million farmers and their families. Also, a sugar processing plant is a very profitable and commercial venture opportunity for financiers. However, this is a cash-demanding business. It demands large capital investment and strategic development.
A step-by-step guide for starting a Sugar Mill business in India
Market potential of Sugar Mill business in India
Sugar has become one of the crucial food consumption items internationally especially in the urban parts. The future claim for sugar is projected to increase noticeably given the present demand for the national market.
Additionally, sugar is a vital ingredient in the numerous processed food businesses. The product has also a great call in the export market. Some of the major sugar importing nations are Indonesia, China, European Union, United States, United Arab Emirates, Bangladesh, etc.
Investment required to starting a Sugar Mill business in India
The project cost naturally depends on the projected production output. Broadly, there are two major investment parts in this industry. They are fixed capital investment and working capital investment. Generally, the fixed cost comprises land & building, acquiring plant & equipment, registration, licensing, permissions, and other initial expenses. The working capital comprises procuring raw materials, staffing, utilities, conveyance, and distribution expenditures.
The rough cost of unit and machinery for a sugar mill for 2,500 tones processing capacity will be 40 Cr to 50 Cr in INR. In addition to this, you must spend on land, housing, building, working capital, etc. The total speculation will be a minimum of 125 Cr for planning a sugar mill in India.
However, you can also think through starting a mini sugar mill based on your investment ability. And there are several financing support available in India. However, you should attain the eligibility of taking loans from the banks.
Business Plan Guide to Start a Sugar Mill business
While starting this business, you must have a business report or project plan in your hand. It is prudent to start the business under proficient guidance. Besides, try to collect as much data about the sugar industry.
Broadly, you will need to check out the specific necessities of space, water, power, manpower, etc. Besides, must estimate the business scale according to your investment capacity and risk-taking capability.
License, registration and permissions required to start Sugar Mill business in India
You must do the registration for the business first. It is sensible to select the right form of the organization as per the investment and management design. And plan for the registration by ROC in India. After that, you should get different types of licenses and permissions to start the factory from the Government agencies. Currently, GST registration is mandatory and must be done within a few days of registering your business.
Sugarcane is covered under the ECA Act (Essential Commodities Act) due to its perishable nature and the need for instruction on cane supply and value. Additionally, if you are considering export, you must even obtain the certifications. And here also, you have to take assistance from a professional.
Setting up a Sugar Mill Plant in India
As this is a cash-oriented business, it is essential to make every decision precisely. First of all, you must set up the unit close to the sugar-producing region. So, you can easily obtain sugar cane from the farmers or growers.
Moreover, the space requirement of the plant is determined by plant capacity. You must secure the land as per your business plan. Check the power and water supply provision. Even a mini sugar mill needs an adequate source of water source for its functioning.
Machinery required to start Sugar Mill business
Sugar milling is a cohesive process that comprises the operation of several machines simultaneously. Therefore, you must obtain the machines from a reliable machine supplier. Here we mentioned a few of the essential and required machinery.
- Mills tandem
- Vacuum filters
- Heat exchangers
- Vacuum evaporators
- Vacuum pans
- Fermentation Tanks
- Column still
- Electricity generators
- Fork lifters
- Alcohol tanks
- Molasses tank etc.
Raw materials, products and byproducts required to start Sugar Mill business
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The chief raw materials required for the production of sugar are firstly sugar cane, lime, sulfur, and polyethylene bags. You can get the sugar cane from closely located farmers. However, you must acquire a specific quantity of raw materials based on the plant capacity.
Not only the sugar, but you will also have two other byproducts that have commercial significance. They are molasses and filter cake or press mud. Usually, the distilleries and cattle feed producers need the molasses.
On the other hand, the cake obtained is rich in minerals, potash, and even phosphate, sulfites & organic materials which means rich manure. Hence, this is most appropriate for soils. Therefore, it is a very good source of organic manure for farming activities.
In case if you miss this: Seed Processing Business In India.
Procedure to start Sugar Mill Manufacturing Unit
The manufacturing process is not so easy. Therefore, you must appoint particular workers for the smooth functioning of the unit.
Step 1: Procuring the sugar cane
The first step is the collection and procuring of the sugar cane after harvesting. Generally, each ton of sugarcane yields about 100 kg of sugar. That means you can convert 10% of the total weight of the sugarcane into crystal sugar. An average yield/hectare is approximately 80 tons of sugarcane.
Step 2: Crushing the sugar canes
You must slice and shred the sugar canes for easing juice extraction in the crushing step. Generally, you can use 3 or more sets of three-roller mills to get the juice from sugarcane.
Step 3: Refinement of juice
The next step is the refinement of juice. You must separate the largest possible number of impurities at the initial stage. You can apply sulfur dioxide and lime for this step. Additionally, adjust the final pH to 8-8.5. Then evaporate the clear juice and make it concentrated for about 55-65% sucrose. Besides, you can obtain steam through the boilers.
Step 4: Crystallization
The next step is crystallization. Evaporate the concentrated juice until you get saturated sugar. As the syrup becomes saturated, sugar crystals are produced. The last stage is centrifugation. Here you obtain the finished sugar. Now the product is complete for packaging and distribution.
Staffing required to start Sugar Mill business
Manpower planning is a significant aspect of this business. Broadly, you must appoint employees for three specific departments. These are the sales team, production team, and accounting purposes. Additionally, you must determine the actual manpower needed for each division in the sugar mill operation.
Profit-margin in Sugar Mill business
In India, a sugar mill is included under the category of medium to large scale industrial sector. The Indian sugar industry is a typical industry and in addition, establishing a sugar processing plant is a lucrative and huge profitable venture for entrepreneurs to start with. However, in this business, you can earn 15-20% profits at the initial stages whereas the profits increases to 35-40% based on the quality of the product you produce. You can also earn from its byproducts. It is a constantly growing business in India. Profit margins in India are likely to rise by 8-9% every year for the Sugar Mill business.