Profile No.

: 41 NIC Code: 47219

FOOD COLOURS

1. INTRODUCTION:

Dyes, color and pigments are one of the important sections of the chemical industry. For
making different food attractive to the consumer, it is required to make colored food items.
Natural pigments like chlorophyll, turmeric powder etc. has large use in the industry as it is
eco-friendly and it has very small side effect. Turmeric powder is used to make yellow color.
Beet powder is used for making red coloration in the food material and making red colored
soft drink and grape extract color is generally used for making soft drinks colors. There is
very good market demand of food color synthetic and natural. There is maximum demand of
natural food color. So we can predict that there is a good scope for a new entrepreneur.

2. PRODUCT & ITS APPLICATION:

A wide gamut of Orange Red Food Color: Their precise applications make these a preferred
market choice. Moreover, these are made using top grade inputs and advanced machinery
so as to maintain their top quality standards. Fresh & pure without additives have longer
shelf life derived from fruits like strawberries, oranges and apples. Food Colors, Liquid Food
Colors, Synthetic Flavouring Essence, Flavor Emulsions, Sugar Free Products, Syrups etc. Are
the major food colors. The project envisions setting up of a Natural food colors extraction
unit which will cater to domestic as well as global demand. The manufacturing facilities
proposed in this unit will be multipurpose and hence will be processing more than one raw
material. Annatto and Marigold being non-toxic in nature are widely acceptable food colors
for food products that include dairy products like butter, ghee, cheese, ice cream and
margarine as well as some oil and bakery products. They are also use d in preparation of
cosmetic accessories, pharmaceutical s, crayons, textiles, floor wax, shoe polishes etc. Yellow
color is extracted from Marigold flowers, while butter yellow color is extracted from Annatto
seed. Some known colors in markets are Tartrazine. Yellow, Sunset Yellow, Carmoisine.
Red, Ponceau Red, Amaranth. Red, Allura Red, Brilliant Blue, Indigo Carmine.

3. DESIRED QUALIFICATIONS FOR PROMOTER:

Successful running this project does not require any specific qualification.

4. MARKET POTENTIAL AND MARKETING ISSUES, IF ANY:

The Food Processing Industry is estimated to be worth around USD 67 billion and expected
to increase to USD 175 billion by 2025 The Processed Food sector has a potential of
attracting USD 33 billion investment About 6% of the total Indian produce is processed
There are over 25,000 registered units in the food sector with investments of Rs 840 billion
The natural food color industry market is growing at 10% - 15% annually. The rationale for
growth is increasing awareness among the developed countries like USA, UK, Germany,
Europe, Japan etc. about the harmful effects and consequences of using synthetic color.
Since the product is expensive, it is consumed in countries having high income strata .The
reason for accelerating demand of the natural food colors in international market is the
growing awareness of environmental hazards of synthetic colors and harmful impact of
chemicals used for manufacturing them. European countries have not only put total ban on
manufacturing of synthetic dye based colors and the products containing such colors but also
banned the imports of products from the countries using such colors. Food industry is the
major segment attracting investors. Natural color market products promise a good and vast
market for dye s. Due to foreseen pollution problems and environmental erosions, synthetic
dyes tend to be soon out of use at least in food preparations which will further give thrust to
Products like Annatto dyes the world market potential for food color is expected to increase
to 9000 MT by the year 2020. Global Natural food color market has touched to US $ 1 billion.
Encouragement for using Natural food colors in novel products like infant toys and crayons,
Organic textile printing, handmade paper etc.; India has a major agribusiness sector which
has achieved remarkable successes over the last three and a half decades. Unprocessed
foods are susceptible to spoilage by biochemical processes, microbial attack and infestation.
The right post harvest practices such as good processing techniques, and proper packaging,
transportation and storage (of even processed foods) can play a significant role in reducing
spoilage and extending shelf life. The industry consists of segments like processed fruits and
vegetables, cereal based products, dairy products, meat, poultry and fishery products,
beverages and confectionery. Gujarat is having well developed dairy industry manufacturing
butter, cheese, flavored milk, and lassi, shrikhand, yogurt and ice cream where both these
natural colors will find ready market. Large pool of Chemical, Pharma, cosmetics and textile
units which can generate demand for Natural colors in India.

5. RAW MATERIAL REQUIREMENTS:

Gujarat produced 17559 MT of Marigold Flowers from 2187 hectare of cultivated area in the
year 2004 - 2005. Marigold cultivation is increasing in the state as high value floriculture.
Activities along with other agriculture activities. Annatto seeds are cultivated in Gujarat
presently by a private sector Biot-tech company under buy back arrangement by supplying
tissue culture plants of Annatto - Bixa. Availability of canal irrigation will lead to development
of value added horticulture crops like Marigold and Annatto, and such processing unit will
provide ready market for growers in Gujarat. Recently cultivation of Annatto seed has started
in several parts of Gujarat that is basically done through contract farming. The adjoining
states of Rajasthan (mari - gold flowers) , Madhya Pradesh (Annatto seeds) and Maharashtra
would also help in getting the raw material in required quantum. Gujarat’s marigold
production is shown an escalating trend since 2002-03 to 2005 - 06 growing at an average
CAGR of 54% for the last 4 years. The extraction of natural food colors depends on the
coloring Content in the raw material. Different processes are used to extract the coloring
content from raw material that may vary from 4 to 7%. Suggested.

6. MANUFACTURING PROCESS:

There are two methods for extracting natural colors. One is the conventional method that is
batch type percolation which uses suitable organic solvent for extraction of the coloring
material from natural materials. While Super Critical Extraction (SCE) is the advance
technology used for extracting natural colors in the purest form. In India the technology for
SCE has been developed by Chemical Engineering Department IIT - Mumbai. Imported
technology can be sourced from Germany and Austria It can separate components in single
extraction process with use of process variables like temperature and pressure and can
process multiple commodities and even improve economic viability. Cold Percolation This is a
traditional method of extraction used by herbalists throughout the world and it's very simple.
Above a flask or vessel is suspended a cone or tube. The bottom of the tube has a
perforated base which holds ground herb in place. Solvent is poured into the top of the tube
where it soaks through the herb leaching out the extract and then falling out the bottom end
of the tube into the flask. If desired, the percolation tube can be wrapped in heating tape to
help facilitate the extraction. High Pressure - Supercritical/Sub critical Extraction This is the
most technologically advanced extraction system in the world. Super Critical Fluid Extraction
(SFE) involves taking gases, usually CO 2, and compressing them into a dense liquid. This
liquid is then pumped through a cylinder containing the material to be extracted. From there,
the extract laden liquid is pumped into a separation chamber where the extract is separated
from the gas and the gas is recovered for re-use. CO2's solvent properties can be
manipulated and adjusted by varying the pressure and temperature that one works at. The
advantages of SFE are the versatility it offers in pinpointing the constituents you want to
extract from a given material and the fact that your end product has virtually no solvent
residues left in it. (CO2 evaporates completely) The downside is that this technology is quite
expensive. There are many other gases and liquids that are highly efficient as extraction
solvents when put under pressure

7. MANPOWER REQUIREMENT:

The enterprise requires 10 employees as detailed below:

Sr. No. Designation Salary Salary ₹ Number Number Number Number Number

Year-1 Year-2 Year-3 Year-4 Year-5

1 Production Manager 18000 36000 2 2 2 3 3

2 Operators 12000 60000 5 5 5 7 7

3 Helpers 10000 100000 10 10 10 12 12

4 Admin Manager 15000 30000 2 2 2 2 2

 5 Accounts/Stores Assistant 12500 50000 4 4 4 4 4

6 Office Boy 9000 27000 3 3 3 3 3

Total 303000 25 25 25 30 30

8. IMPLEMENTATION SCHEDULE:

The project can be implemented in 9 months’ time as detailed below:

Sr. No. Activity Time Required (in months)

1 Acquisition of premises 2.00
2 Construction (if applicable) 2.50
3 Procurement & installation of Plant & Machinery 2.50
4 Arrangement of Finance 1.00
5 Recruitment of required manpower 1.00
Total time required (some activities shall run concurrently) 9.00

9. COST OF PROJECT:

The project shall cost ₹ 196.20 lacs as detailed below:

Sr. No. Particulars ₹ in Lacs

1 Land 20.00
2 Building 32.00
3 Plant & Machinery 72.00
4 Furniture, other Misc. Equipments 5.00
Other Assets including Preliminary /
5 7.20
Pre-operative expenses
6 Margin for Working Capital 60.00
Total 196.20

9. MEANS OF FINANCE:

Bank term loans are assumed @ 75 % of fixed assets.

Sr. No. Particulars ₹ in Lacs
1 Promoter's contribution 49.05
 2 Bank Finance 147.15
Total 196.20

10. WORKING CAPITAL CALCULATION:

The project requires working capital of ₹68.25 lacs as detailed below:

Sr. No. Particulars Gross Amt Margin % Margin Amt Bank Finance

1 Inventories 30.00 0.25 7.50 22.50

2 Receivables 15.00 0.25 3.75 11.25
3 Overheads 15.00 100% 15.00 0.00
4 Creditors - 0.00 0.00
Total 60.00 26.25 33.75

11. LIST OF MACHINERY REQUIRED:

Value
Sr. No. Particulars UOM Qtty Rate (₹)
(₹ in Lacs)
Plant & Machinery / equipments
a) Main Machinery
1 Glass lined reactors Nos 1 8.50 8.50
2 Stainless steel vessels Nos 2 15.00 15.00
3 Pulverize, Granulate Nos 1 9.50 9.50
4 Crystallizer, Centrifuge, Filters Dryers Nos 1 13.00 13.00

5 Utility Equipments 1 17.00 17.00

Installation, Taxes and Transportation 9.00 9.00

sub-total 72.00
Furniture / Electrical installations

a) Office furniture LS 1 150000 1.50

b) Stores Cupboard LS 1 250,000 2.50
c) Computer & Printer LS 1 100000 1.00
sub total 5.00
Other Assets
 a) Preliminary and preoperative 7.20
sub-total Other Assets 7.20
Total 84.20

12. PROFITABILITY CALCULATIONS:

Sr. No. Particulars UOM Year-1 Year-2 Year-3 Year-4 Year-5

1 Capacity Utilization % 60% 70% 80% 90% 100%

2 Sales ₹. In Lacs 180.00 210.00 240.00 270.00 300.00

Raw Materials & Other

3 ₹. In Lacs 140.11 163.46 186.82 210.17 233.52
direct inputs
4 Gross Margin ₹. In Lacs 39.89 46.54 53.18 59.83 66.48

Overheads except
5 ₹. In Lacs 24.67 26.21 29.30 30.22 30.84
interest
6 Interest @ 10 % ₹. In Lacs 14.72 14.72 9.81 7.36 5.89

7 Depreciation @ 30 % ₹. In Lacs 50.40 36.00 25.20 18.00 16.20

8 Net Profit before tax ₹. In Lacs -49.90 -30.39 -11.12 4.25 13.55

13. BREAKEVEN ANALYSIS:

The project shall reach cash break-even at 55.24% of projected capacity as detailed
below:

Sr. No. Particulars UOM Value

1 Sales at full capacity ₹. In Lacs 300.00

2 Variable costs ₹. In Lacs 233.52

3 Fixed costs incl. interest ₹. In Lacs 36.73

4 BEP = FC/(SR-VC) x 100 = % of capacity 55.24%