1 1.

MANGO AND OTHER FRUITS AND VEGETABLES PROCESSING Introduction

Processing is one of the most effective solutions to reduce the wastages. In India processing of fruits and vegetables is extremely low and is below 2%. Value addition to the raw produce is only 7% compared to as much as 23% in China, 45% in the Philippines and 88% in the UK. Thus the processing (including value addition through post harvest management) industry holds tremendous potential not only for contributing to the GDP but also for generating employment in rural areas and business opportunities for entrepreneurs. Among various processing technologies (canning, dehydration, pickling, provisional preservation, bottling etc), freezing is one of the most popular methods for preservation of foods. Main advantages of freezing technology include: Preservation of produce for 9-12 months without changing the basic characteristics and nutritional value of the food No preservatives are used Cost of processing is relatively less as compared to canning, bottling etc. The product is hygienic Convenience and off season availability

On the other hand there are certain special requirements such as maintenance of cold chain all through the sales channel and high power requirement for freezing and storage. In last couple of years frozen mango pulp has become very popular in retail market. Even second rung cities like are becoming quite attractive and major players have set up distribution network in these cities. 1.2 Objective

The primary objective of the model report is to facilitate the entrepreneurs in understanding the importance of setting up such a unit, technology and financial parameters of various components for preparation and submission of project proposal to bank for sanction of long term loan. This model report will serve as guidance to the entrepreneurs on starting up such a new project and basic technical knowledge for setting up such a facility. 1.3 Raw Material Availability

The production of different fruits and vegetables in the state is given in the table below. Thus the availability of the raw materials would not be a problem.
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2004-05
Name of crops Banana Guava Papaya Potato Sweet Potato Onion Tomato Brinjal Cabbage Cauliflower Pea Area 14941 2763 684 47602 4192 35704 18254 13208 3349 7665 17278 Production 5.976 0.553 0.185 7.140 0.252 5.713 2.738 1.981 0.670 1.226 1.901 Yield 40.00 20.00 27.00 15.00 6.00 16.00 15.00 15.00 20.00 16.00 11.00

1.4

Market Opportunities

Refrigerated & frozen Foods showcase the fastest growing segment of the food and beverage industry - the entire chilled and frozen food market. 1.4.1 Market size and share of different companies

As per information compiled from the trade circles, the quantum of sale of various products in Indian market is as follows: Frozen peas, which is also the largest selling product in the market with annual sale of mere than 15,000 MT French fries (mostly imported) market is 2,500 MT Frozen mango products (pulp and cubes) 5000 MT Others 5,000 MT

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1.5

Project description 1.1.1 Manufacturing Process

Figure 1 Process flow diagram for mango cubes, fruits and vegetables cubes, sweet corn and baby corn etc.

Fruit and vegetable of desired quality Receiving roller conveyor Bucket elevator Washing machine De-stoning/De-podding Peeler remover Inspection / sorting conveyor Elevator Cutting machine/cubing machine Vibro distributor Transporting conveyor Selection table Blanching Hydraulic conveyor Pre cooling
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Freezing tunnel Transporting conveyor Feed conveyor Weighing and packing machine Pick up conveyor Storage
Process description for frozen vegetables
Procedure (in sequential order) Grower Storage Inspection Raw Receiving Peeling Cutting Grading Blanching Description Produce arrive at the plant for processing. Samples of the unprocessed produce are taken to be graded and for grower payment. Unprocessed produce is off-loaded from trucks and inspected to decide if it requires sorting. In case of mangoes, the produce is first ripened Unprocessed produce is pealed. Those products as may require cutting are cut according to buyer specifications. A special cutting equipment is proposed for the unit Pieces that are too small or misshapen are removed from the main processing line and used in other products. Product like peas and sweet corn require blanching at 160o-180oF for 1540 minutes to remove natural sugars, stabilize enzymes, and create a good texture. Blanched produce is pre-cooled at 0oF for 15 minutes before entering the freeze tunnel. Produce is quickly frozen for 30 minutes at -40oF. The frozen products are packaged into bags. Packages are stored in a cold storage warehouse until shipment to grocery stores, restaurants and other customers.

Pre-cool Freeze Tunnel Packaging Warehouse

Mango processing line (Freezing system 1000 MT/hr)

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Pre-cooling belt Freezing tunnel Air moto condensing plant with screw compressor for pre-cooler and injection refrigeration plant for freezing tunnel with 3 nos. double screw compressor

Packaging system 1.6 Transporting belt Inclined belt for feeding to weighing machine Weighing machine Form filling and sealing machine Pick-up conveyor Air compressor Capacity of Plant

The planned capacity of the unit is 2498 Mt per annum. 1.7 Project component and cost
AMOUNT 201.04 394.91 464.87 33.50 109.43 173.50 81.61 1458.88

PARTICULARS LAND BUILDING PLANT & MACHINERY MISC. FIXED ASSETS CONTINGENCIES PRE-OPERATIVE EXPENSES MARGIN MONEY FOR WORKING CAPITAL

1.8

Plant and Machinery

The main machineries required are following:

FEEDING CONVEYOR DEPODDER WASTE CONVEYOR GRAIN HANDLING SYSTEM INSPECTION CONVEYOR WASHER BLANCHER COOLER/CHILLER VIBRATOR INCLINED CONVEYOR WITH FOOD GRADE BELT PEELING CONVEYOR WITH WASTE DISPOSAL SYSTEM SHIFTING CONVEYOR FEEDING TO IFQ, TANK-PUMP FINISHER-TANK-PUMP PHE ( 5 STAGES) TANK- FILLING -PARKING

1.9

Building

The building development charges would cost around Rs. 394.91 lakhs.
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1.10 Miscellaneous Assets A provision of Rs. 33.50 lakhs would take care of all the requirements. 1.11 Preliminary & Pre-operative Expenses A provision of Rs.173.50 lakhs would take care of pre-production expenses like establishment, professional charges, security deposits etc. 1.12 Working Capital Assessment
RAW MATERIALS LABOUR COST FINISHED GOODS TOTAL MARGIN (%) MPBF (%) INTEREST ON WC LIMIT (14%) 48.59 2.96 188.69 240.23 72.07 168.16 23.54 54.45 3.58 214.00 272.04 81.61 190.43 26.66 54.45 3.58 214.17 272.20 81.66 190.54 26.68 54.45 3.58 214.49 272.52 81.76 190.76 26.71 55.66 3.72 219.91 279.29 83.79 195.51 27.37

1.13 Means of Finance

EQUITY SUBSIDY MFPI - Equipment TERM LOAN 679.44 50.00 729.44 1458.88 46.57 3.43 50.00 100

1.14 Cash flow statement

PARTICULARS SOURCES OF FUNDS INCREASE IN SHARE CAPITAL NET PROFIT (INTEREST ADDED BACK) DEPRECIATION PRELIMINARY EXP.W/O INCREASE IN TERM LOAN INCREASE IN WC Year 1 87.71 45.39 17.35 168.16 318.61 Year 3 217.90 45.39 17.35 0.11 280.75 Year 5 189.27 45.39 17.35 4.74 256.75 Year 7 165.66 45.39 17.35 228.40

1.15 Projected balance sheet

PARTICULARS LIABILITIES SHARE CAPITAL RESERVES & SURPLUSES TERM LOAN W.C TOTAL Year 1 679.44 (37.95) 729.44 168.16 1,539.09 Year 3 679.44 157.40 531.22 190.54 1,558.60 Year 5 679.44 408.40 266.93 195.51 1,550.27 Year 7 679.44 681.09 195.51 1,556.03

1.16 Profitability
PARTICULARS INCOME
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Year 1 1202.02
6

Year 3 1372.71

Year 5 1403.62

Year 7 1403.62

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EXPENDITURE VARIABLE FIXED GROSS PROFIT DEPRECIATION PROFIT AFTER TAXES RETAINED PROFIT

1051.57 938.79 112.78 150.45 45.39 -37.95 -37.95

1082.66 969.88 112.78 290.05 45.39 121.48 121.48

1108.16 995.38 112.78 295.46 45.39 129.15 129.15

1108.16 995.38 112.78 295.46 45.39 138.29 138.29

1.17 Key Indicators

NET PRESENT VALUE at current Inflation (Rs in lakhs) INTERNAL RATE OF RETURN % AVERAGE DSCR BREAK EVEN POINT % PAY BACK PERIOD ( YEARS) 56.91 22.45 2.26 71.42 4.99

1.18 Manpower Requirement

PARTICULARS PERMANENET STAFF MANAGER ( MARKETING) MANAGER ( OPERATIONS) TECHNOLOGIST/MANAGERS MARKETING/SALE EXE. ACCOUNTANT ELECTRICIAN/MACHANIC WATCHMAN/GUARD PROCUREMENT TECHNICAL STAFF PRODUCTION SUPERVISORY STAFF NO. 1 1 1 3 2 2 4 2 4

1.19 Assumptions
Project & Financing Contingencies on Building Contingencies on Equipment Term Loan Rate of Interest on Term Loan Subsidy Considered Expected time of Installation Moratorium CAPACITY Rated Capacity Per Annum Number of Operational Days Working Hours Per day CAPACITY UTILIZATION Year I Year II Year III OTHER EXPENSE Commission Marketing Expenses POWER Connected Load
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Subject to ceiling

50 lakhs Months Months TPA

10% 10% 50% 10% 25% 12 6 3000 210 3 shift 85% 95% 95% 10.0% 2.5%

90% of Installed capacity DAYS Hrs

KWH
7

150
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DEPRICIATION AS PER COMPANYS ACT BUILDING PLANT & MACHINERY MISC. FIXED ASSETS LAND & SITE DEVELOPMENT MAINTENANCE BUILDING PLANT & MACHINERY MISC. FIXED ASSETS LAND & SITE DEVELOPMENT

3.34% 5.28% 6.23% 1.63% 1.00% 3.00% 2.00% 1.00%

1.20 Selling and Raw material Price

Green Sales Rate per ton Domestic Bulk sales Retail sales Export sales Raw Material Cost (Landed Rs per kilo) Peas RS/MT 42000 50000 50000 8.00 Mango Dice 0 0 60000 12.00 Mango By -products Bits Pulp 0 0 65000 42000 0 45000 Sweet corn 45000 50000 50000 6.00 40000 50000 50000 9.00 50000 55000 60000 7.00 Mix Veg Baby corn

The actual cost of projects may deviate on change of any of the assumptions.

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