PROJECT WORK OF ECONOMICS PRODUCT: DESICCATED COCONUT POWDER COUNTRY: U.A.E.

Submitted By Harshdeep Singh Vikash Kumar Udit Bhaskar Nikita Vyas Mrinal Pati Vikky Srivastava Veerendra Singh

Project Coordinator Prof. Ashish Karnavat

CONTENTS

INTRODUCTION MARKET POTENTIAL GENERATING DEMAND BASIS AND IMPLEMENTATION SCHEDULE PROCESS MANUFACTURE COMPETITORS & THEIR PRICES COST ACCUMULATION FINANCIAL ANALYSIS EXPORT PROCEDURES SURPRISE ELEMENT BIBLIOGRAPHY

INTRODUCTION
Desiccated coconut is the dehydrated and shredded kernel produced from matured nuts. Desiccated coconut is produced in different grades depending on their fineness. The fine and medium grades are generally exported. The main concentrations of units producing desiccated coconut are in Kerala, Tamil Nadu, Andhra Pradesh, Karnataka, Orissa and Maharashtra. Desiccated coconut is not only a value added product but it being a labour intensive industry will also generate a large number of employment opportunities.

WHY U.A.E ?
TARGET MARKET:The uses of desiccated coconut powder in UAE is reflected by the daily diet or the consumption of the food by the people of UAE. Eating habits:U.A.E people are very fond of eating sweets ,cakes,bakery,products,curries,chutney & confectionary.

It is estimated that 30% of production goes to biscuit manufacturers, 10% to confectionery and 60% to bakeries, sweets and other products. Desiccated coconut is mainly used in the manufacture of sweets, cake-dressings, pastries, chocolates and biscuits. It is also used in curries and puddings in place of raw coconut.

Demand in U.A.E. :The demand of this product is determined in UAE by comparing the economy of India to UAE. The demand of this product in India is 8000MT/yr.

PLANT SET UP AND SCHEDULE

a) The unit proposes to work at least 300 days per annum on single shift basis. b) The unit can achieve its full capacity utilization during the 3rd year of operation. c) The wages for skilled workers is taken as per prevailing rates in this type of industry. d) Interest rate for total capital investment is calculated @ 12% per annum. e) The entrepreneur is expected to raise 20-25% of the capital as margin money. f) The unit proposes to construct own building. g) Costs of machinery and equipment are based on average prices.

Schedule:Project implementation will take a period of 8 months. Break-up of the activities and relative time for each activity is shown below: - Scheme preparation and approval : 01 month -SSI provisional registration : 1-2 months -Sanction of financial supports etc. : 2-5 months -Installation of machinery and power connection : 6-8 months -Trial run and production : 01 month

MANUFACTURING PROCESS
Dehusking of coconuts

Deshelling & disintegration

Drying

Sieving/grading

Packing

COMPETITORS AND THEIR PRICES

Zeal Associates - India Price: 2300 USD/MT Cresent Foods Private Limited - India Price: 2500 USD/MT Maruthi India Exports - India Price: 2414 USD/MT

PRICE QUOTATION FROM ONE OF OUR COMPETITOR

Dear Sir, With reference to your mail I am enclosing herewith quotations of desiccated Coconut Powder. Please see if the prices are suitable for you. Our desiccated coconut is of good quality. If the prices are suitable I can send you official invoice in order for your necessary action at your end. 1. Commodity: Desiccated coconut 2. Specifications: + Moisture content: 3% max. +Oil content: 60% min +Escherichia coli: Negative +Size: Fine and medium 3. Quantity: 11MT (In one 20FT container) 4. Packing: In 4 layer bags: 4 layers of Kraft paper and 1 HDPE inside. Or as per customers requirements 5. Price: USD 2532 / MT 6. Payment: By cheque or cash We are looking forward to receiving your reply soon and developing good business relations with you. Best regards, Akhtar jamal Director

COST ACCUMULATION AND PROFIT

PRODUCTION CAPACITY :

Quantity : Desiccated coconut (coconut powder) - 400 MT/YR Installation cap. : 20 lakh coconuts/annum Value:112.20 lakh Working cap. : 300 day/annum Optimum cap. : 70% utilization Manpower : 10 Utilities Motive Power : 100 KVA Water : 10 kL/day Fuel(LD for DG set) 80 L/day

FINANCIAL ASPECT

FIXED CAPITAL Land & Building Land 600 sq.m. : Amount (Rs. lakh) 1.80

Built up Area 300 sq. m.

Total cost of Land and Building :

9.00
10.8

MACHINERY AND EQUIPMENT DESCRIPTION

Amount (Rs. lakhs)

Wet coconut disintegrator, hot air drier with blower/vibratory sieving unit/grader, sealing machine, scrapping knives, baby oil expeller, coconut shell breaker, pulveriser, centrifugal sieving machine,

weighing machine, aluminium trays. : 9.00

Erection & electrification @10% cost of machinery & equipment :

0.90

Office furniture & fixtures :

-------

0.90 ---

PRE-OPERATIVE EXPENSIVE

Consultancy fee project report deposits with cemical department etc. 1.8

Total Fixed Capital(10.8+10.8+1.8)

21.6

RECURRING EXPENSES PER ANNUM

Personnel Designation (Rs.lakh) Factory Manager 2.4 Supervisor Office Assistant Skilled workers 1.2 Unskilled workers 1.2 Perquisites @15% 1.2

No. 01 02 01 02 04

Salary Per month 20,000 10,000 10,000 5,000 2,500

Amount

2.4 1.2

8.4

Total : 9.6

10

RAW MATERIAL INCLUDING PACKAGING MATERIALS ITEM

Amount (Rs.lakh) I)Coconut with husk 20lac Nos. @ Rs 7 each ii) Polythene bags 21600 kg 25.92 @ Rs120 per bag 0.60 iii) Plywood boxes of 25 Kg capacity 7200 Nos. @ Rs 100 per box iv) Labels, gums and other 1.40 packing aids L.S

140.00

7.20

Total:

-------

UTILITIES
Amount (In

Rs.lakh) i) Electricity 12000 KWH @ Rs 4 0.48 ii) Water 1000 KL @ Rs 2 0.02 iii) Fuel (fire wood) 1.20 Total
--------

1.70

OTHER CONTINGENT EXPENSES

Amount (In

Rs.lakh) i) Postage, stationery and telephone ii) Store consumables 0.12 iii) Repair and maintenance iv) Transportation v) Advertisement and publicity 0.60 vi) Insurance 0.12 vii) Misc. expenses

0.36
0.12 0.60

0.48

Total:

2.40

Total Recurring Expenditure 188.22 (9.6+174.52+1.70+2.40)

Working Capital Recurring Expenditure for 1 month Total Capital Investment Amount lakh) Fixed capital 21.60 Working capital 15.68 -------Total: 37.28

15.68

(Rs.

FINANCIAL ANALYSIS

Cost of Production (per annum) (Rs. lakh) Recurring expenses 188.22 Depreciation on building @5% Depreciation on machinery @10% 1.00 Depreciation on furniture @20% Interest on capital investment @ 15%

Amount

0.50 0.10 3.24

-------Total: 193.06

Cost of Transportation (per annum) Lakh) Finished coconut powder 15 MT/month @0.03/MT

Amount(Rs. 5.40

(Goods being transported from thiruvananthpuram , production site to Mumbai Port)

Cost of Export (per annum) Export cost of 280 MT i.e. 7200 CBM @245/CBM 17.64 TSC of 280 MT i.e. 7200 CBM @750/CBM 54.00 Shipment cost @5000/SC 0.60

Amount(Rs. Lakh)

------Total

Total Cost(per annum) Lakh) (193.06+5.40+72.24) Sale Proceeds (Turnover) per year Item Qty. (MT) Coconut 280

Amount (Rs.

270.70

Rate per MT 110000

Amount (Rs.lakh) 308.00

Net Profit per year = Sales - Cost of production = 308-270.70 = Rs. 37.30 lakh

Net Profit Ratio:

=
=

Net profit X 100 Sales 37.30 X 100

308

= 12.11% Rate of Return on Investment: = Net profit X 100

Capital Investment

=
=

37.30 X 100
37.285

100%

Annual Fixed Cost Amount (Rs. Lakh) All depreciation 2.20 Interest 2.95 40% of salary, wages, utility, contingency 48.72 Insurance 0.12
- Total: 53.99

Break even Point:

= = = Annual Fixed Cost X 100 Annual Fixed Cost + Profit 53.99 X 100 53.99 + 37.30 59.14%

Payback Period: = 38 lakhs recovered in first year of its operation. = 16 lakhs to be recovered in 2nd year of its operation to get the payback period. = 12 X 16 months 38 = 5 months = Payback Period =1 yr 5 months (app.)

PRICING STRATEGY

Monopolistic market

EXPORT PROCEDURE
NO STOPPAGE OF EXPORT CONSIGNMENT Procedures by person in charge of conveyance. Entry Outward LOADING WITH PERMISSION Procedures to be followed by Exporter Shipping Bill to be submitted by Exporter Excise formalities at the time of Export Duty drawback formalities

G R / SDF / SOFTEX Form under FEMA Other documents required for export RCMC certificate from Export Promotion Council Check in customs Examination of goods before export Let Export Order by Customs Authorities Processing under EDI system Conveyance to leave on written order

SURPRISE ELEMENT

30,000 kg coconut oil 60,000 kg coconut shell powder These by products are sold and distributed on a domestic region. Additional profit Item Qty(MT) Amount(Rs. Lakh) Coconut 30 Oil
Coconut 60 Shell powder

Price(per MT) 31500 9.45

1500

0.90 ----

-----Total 10.35

THANK YOU
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