FEASIBILITY STUDY ON

PRODUCTION OF RASAPOSHA

Dr. Deval B Patel

College of Food Processing Technology & Bio Energy,
Anand Agricultural University, Anand
 OVERVIEW
• Introduction
• Product Identification & Selection
• Market Survey
• Marketing Feasibility
• Technical Feasibility
• Production Feasibility
• Financial Feasibility
• Environmental feasibility
• Socio- Economic Feasibility
• Conclusion
 INTRODUCTION
• To lead a healthy lifestyle carbohydrates,
proteins, calcium, vitamins and minerals
should be in the food in required amount.
• Most of the nutrition earned from meat, fish,
milk, eggs, vegetables and greenery can also
be achieved with a daily intake of Rasaposha,
which ensures a comprehensive nutritional
balance.
• Here both cereals and legumes are used to
formulate this product
• Type of the Product : Cereal based food
• Size of the Business : Medium Scale
• Target Market : Local Market
PRODUCT IDENTIFICATION & SELECTION
• Product Name: Rasaposha
• Major Ingredients: Maize (60%), Soy (35%),
• Minor Ingredients: Full Cream Milk Powder
(3%), Vitamin-mineral premix (0.44%)
• Packaging Material: Triple Laminated package
• Available Size: 200g.
• Shelf Life: 8 months
• Storage Conditions: Store in an air tight
container.
REASONS FOR SELECTION OF THE PRODUCT
• High demand for ready to use products
• Immense progression in the healthy food in current
situation
• To provide a supplement which contains energy, proteins
and all required micronutrients to specially children
• Utilize maize, corn, soy bean for developing value added
product
• High availability of raw materials (Local) & get
maximum usage
• To provide balance diet instead of high calorie instant
food without food additives
• Good Protein Source for vegetarians
• To reduce nutritional anaemia, third degree protein
energy malnutrition (PEM), underweight among children
 DAILY PROTEIN INTAKE PER CAPITA
• In Sri Lanka daily per take protein in capita
is 60 (Per person/per gram/ per day) is a
very law value when compared to USA (106)
Greece (133) like countries.
IRON DEFICIENCY ANEMIA (IDA) IN
INDIA
 MARKET SURVEY
Identifying: (Through a questioner)
• Customer preference of consuming Cereals
product
• Awareness of nutritional values of native tuber
crops
• Consumption & purchasing patterns of cereal food
• Preferred quantity size and awareness of
packaging
• Effective advertising media
 MARKETING FEASIBILITY
• MARKETING MIX
• PRODUCT
• High nutritional value
• Convenient size
• Precooked – Ready to use
• No chemical preservatives & additives
• Made from wholesome ingredients
PRICE Strategy
• Internal Cost Reduction
• Discounts & Allowances Promotional Pricing
Pricing Methods
• Cost plus pricing
• Competitive Based Pricing
PLACE
• Channels – Super markets, whole sellers, Retail
market
• Location
• Inventory
PROMOTION
• Consumer
• Advertising-TV, Internet, radio, Newspaper
• Event Sponsoring, Store Promotion
• Trader
• Personal Selling – [local industries] Sales
Promotions
 SWOT ANALYSIS
Strengths
•Cereal based products – high nutritional value
•Value added
•Ready to use
•No added artificial preservatives / additives
•Use of local raw material & availability
•Low production cost
•High profit margin

Weaknesses
•Not an established brand (lack of brand heritage)
Opportunities
•Increased awareness of consumers on healthy
foods
•High population of vegetarians
•Changing customer attitudes

Treats
•Already established cereal food brands
•Oil price and electricity is high
 SEGMENTING, TARGET GROUPS
IDENTIFICATION AND POSITIO
Geographic Segmentation
• Both Urban & Rural area
Psychographic segmentation
• Having busy lifestyle
• Having positive attitudes about Cereal food
Behavioural Segmentation
• More concern about health benefits & nutritional
value
• Seeking of Ready to use food
Demographic Segmentation
• Specially for children, [Other - Adolescent & elders]
• Low ,medium & high income
 Target Market Segments
• Growing children above 2 years
• Children in school age
• Pregnant mothers
• Health conscious adolescent and elders
• Vegetarian consumers
Position as
• Nutrias cereal food
• Rich in protein, calcium, zinc & iron
• Ready to use
• No added preservatives & additives
• Convenient pack size
 TECHNICAL FEASIBILITY
SITE SELECTION
• Raw material Supply –Transport cost reduction of raw
materials (Maize, Soy, Fullcream milk powder )
• Types of the market which going to achieve
• Amount of Capital
• Volume of Traffic
• Population Base (Less residential)
• Work Force Availability and Cost
• Road facilities
• Water Supply and Drainage facilities
• Waste Disposal and Effluent management
• Environmental Issues
• Away from: Flooding , Disease and infectious areas
Selected Site for the Factory – VV
Nagar, Anand Gujarat
 SITE MAP & BUILDING DESIGN
• Factory layout is designed according to rules
and specification of food processing plant
• Here consider,
• Separate warehouses for raw materials and
finished products
• Flooring design
• Expanding Facilities
• Area for Loading & Unloading
• Avoid cross contamination
• On site waste treatment design
FACTORY LAYOUT
 MACHINERY & EQUIPMENT

Dehuller Grain dryer & cooler

Mix mill-hammer mill

Fully Automatic Form Fill Seal Weigh Filler

LABORATORY EQUIPMENT

Laboratory Incubator
Laboratory Oven
 PRODUCTION FEASIBILITY
RAW MATERIAL
Maize
Mostly cultivate in Anuradhapura, Moneragala &
Badulla area Purchase from farmers directly / whole
grain sale market
Soybean
Mostly cultivate in Matale, Anuradhapura, Kurunegala,
NuwaraEliya, Mahaweli 'H',Monaragala, Badulla,and
Polonnaruwa disrtcts
Purchase from farmers directly / whole grain sale market
Full Cream Milk powder Purchase from Pelwatte Dairy
Industries Limited – Whole sale supplier
Vitamin – Mineral Premix
Purchase from chemical suppliers or import
 PROCESS FLOW CHART
• “Rasaposha” processing plant consist 3 major
areas for,
• 1.Cleaning & Dehulling
• 2.Processing & Milling
• 3.Blending & Packaging
HUMAN RESOURCE MANAGEMENT
 HUMAN RESOURCES REQUIREMENTS
• Job title No. of employees
• General Manager 1
• Human Resources Manager 1
• Sales and Marketing Manager 1
• Production Manager 1
• Production Executive 2
• Quality Assurance Manager 1
• Quality Assurance Executive 1
• Financial Assistant 1
• Marketing Executive 1
• Accountant 1
• Engineers 2
• Sales representatives 4
• Floor level workers 15
• Driver 4
• Security man 4
• Indirect workers 1
• Total 38
 FINANCIAL FEASIBILITY
• Total fixed assets 27,226,675.00
• Total working capital 5,731,705.00
• Working capital for 3 month 4298778.75
• Total Cost of project 31,525,454.00
• Total depreciation cost 1,917,048.00
• Total Cost of production per annum 70,697,508.00
 Price estimation of product – 200g pack
• Description Cost
• Raw material cost 9.70
• Packing material cost 12.45
• Labour cost 5.80
• Utilities 6.60
• Factory cost 34.55
• Depreciation cost 2.11
• Total production cost 36.66
• Sales & Marketing overhead expenses 3.00
• Financial overhead expenses 2.46
• Cost of product sold 42.12
• Profit margin (30%) 12.63
• Price without tax 54.75
• Tax (12%) 5 .00
• Price to retailer 60.00
• Retailer margin 5.00
• Consumer price 65.00
INCOME STATEMENT PROJECTIONS
 BREAK EVEN POINT (BEP)
• Selling price / Unit Rs. 60.00
• Variable cost / Unit Rs. 31.25
• Fixed Cost / per year Rs. 20,421,216.00
• Sales volume per year 1,230,769
Per Unit Contribution to
fixed Cost = Selling Price – Variable Cost of a
Unit
• = 60.00 – 31.25 = Rs. 28.75
Break even Point in Units = 𝐹𝑖𝑥𝑒𝑑 𝐶𝑜𝑠𝑡/𝑃𝑒𝑟
𝑈𝑛𝑖𝑡𝑠 𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑡𝑜 𝐹𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡
= 20421216/28.75 = 710303 units
 KEY ASSUMPTIONS
• 20 working days per month & 12 working hours per
day.
• Market return is very low and it does not affect the
profit margins severely.
• Price fluctuation of the raw materials within the first
year is negligible.
• Total daily production gradually increases year by
year.
• Government taxes will remain constant within next 3
years.
• 1 US $ (United States Dollar) = 133.82 LKR (Sri Lankan
Rupee)
• Electricity, water, fuel & telephone charges will not be
changed
• Depreciation rates are constant for all 3 years
 ENVIRONMENTAL FEASIBILITY
• Include effects on environmental resources
due to alterations or pollutants
• Business is planned to carry out under rules
and regulation enforced by of Central
Environmental Authority & municipal council.
Mainly should be consider about;
• Disposal of waste water
• Disposal of solid waste
• Conditions for releasing fumes from factory
• Proper disposing system should be
• conducted by the company in order
• to avoid environmental issues.
 SOCIO- ECONOMIC FEASIBILITY
Consumer
• Safe & nutrias product
• Reasonable price
Environment
• Effective waste disposal methods
• Employee
Creating job opportunities
• Giving sufficient wages
• Ensure employee safety
• Employee welfare
Society
• Involve to social activities
 CONCLUSION
• According to the market survey, there is potential
& growing market for the cereal based (Natural ,
nutrias product)
• NPV - Positive value, at each discount rate, the
initial investment will be recovered. Therefore,
the project should be accepted
• IRR - 20.2%, Since IRR > cost of capital, the project
should be accepted
• Payback period - 1 year & 8months
• B.E.P in terms of unit: - 710,303 units
• By considering all factors we can conclude that
establishing of a “Rasaposha” manufacturing plant
is feasible & profitable.