A

Feasibility Report

On

Rice bran oil

Prepared by:-

Name: Roll No.

Narola Vaibhav L. 62

Sanghavi Nirav S. 93

Savaliya Nirupa J. 95

Savaliya Sneha B. 96

Shah Jigar M. 99

Shingala Sunita B. 102

Submitted To

Prof. V.B.shah Institute of management

Amroli

.

Acknowledgement

I take this opportunity to express my heartfelt gratitude to prof. Mahesh Trivedi for providing his guidelines and co-operation to me. I also extend thank to

Mr.Rakesh Patel for extending his assistance and providing me information during the tenule of the project and to these who have directly or indirectly helped me in completing this project I would also like to extend my obligation towards Prof. Mahesh Trivedi, Prof. V.B. Shah Institute of Management and other staff members of the Institute.

Project Content

1.Project at glance

2.Introduction

3.Manufacturing process

4.Types of Marketing

5.Financial Aspect

6. Financial Analysis

7.Cost of Project

8.Balance sheet

9.Depriciation Table

Project at glance

1. Product: - “Shree” Rice bran oil

2. Annual sales capacity:- 28,24,800 Rs.

3. Raw materials:-Brown Rice

4. Land & Building:- 500 sq. mt.

5. Employees:-

Managerial staff:- 3

Labour: - 25

6. Environmental pollution:- No

7. Location & site:- Sumul dairy road ,Surat

8. Net profit ratio:- 19.32%

9. Rate of return:- 26.63%

10. Break even point:- 43.77%

Introduction:-

Rice bran oil is the oil extracted from the germ and inner husk of rice it is notable for its very high smoke point of 490f (254c) and its mild flavor making it suitable for high temperature cooking method such as stir frying and deep frying it is popular as a cooking oil in several Asian countries including Japan and china.

It also contains a range of fats with 47% of its fats. Monounsaturated, 33% polyunsaturated and 20% saturated. The fatty acid composition of rice bran oil.

Fatty acid Percentage

Palmitic 15%

Stearic 1.9%

Oleic 42.5%

Linoleic 39.1%

Linolenic 1.1%

Arachidic 0.5%

Behenic 0.2%

So, rice bran oil is naturally free of Trans Fatty acids. It also rich in oleic and linoleic Fatty acids. Rice bran oil is the most important source of edible oil among the unconventional source, production of rice bran oil is currently estimated at about 2 lakes tones, rice is not only the oldest cultivated crop .

Why Rice Bran oil better than other oils?

1) “Shree” is golden colored edible oil refined through the latest PHYSICAL REFINING PROCESS. All other light colored edible oils are refined through the conventional CHEMICAL REFINING PROCESS using COUSTIC and ACIDS. It turns oil in light color but heavy dose of harsh chemicals destroys the health beneficial nutrients present in it.

2) “Shree” is a unique edible oil which is produced from oily layer(Rice

Bran) of nutritious brown rice. It has ideally balanced fat composition; hence it can be used regularly without change. Other refined oils do not have ideally balanced fat composition that is why these oils are advised to be changed after some time.

3) “Shree” has been produced under specific process conditions to ensure

International Food Safety standard besides retaining higher level of “Oryzanol”. Research has proven the health benefits of Oryzanol.

Benefits of consuming RICE BRAN OIL:

1) Contains Oryzanol that reduce Bad Cholesterol.

2) Rice bran oil is a healthy oil with uses in cooking, frying, as a salad dressing, baking, soap making, as even a supplements to horses, dogs and

Other animals.

3) Pure rice bran oil is a rich source of vitamin-E, anti-oxidant. Squalense (Vita-E) keeps your skin young and glowing.

4) 15% less absorption makes food less oily and hence lesser calories.

5) Fry food faster and save time and energy.

6) Longer shelf life.

7) High Smoke point, hence more stable for deep frying.

Objectives of Report :-

1) To know the profitability and feasibility for investing

2) To select a proper location by considering various effective factors

3) To decide the best manufacturing process.

4) To know the market condition and future growth prospects regarding the products to be manufacture.

5) To decide the technical feasibility of the project regarding materials and utilitization the availability of machinery and equipment and other factors by considering their types size and cost.

6) To estimating the financial condition of the project in future.

7) By estimating the operating cost, capital cost, profitability and capacity utilization.

8) To make the projection of required manpower with their required qualities on the basis of future organization structure.

Manufacturing Process :

It is mainly included major three Components

1. Raw material

2. Machinery

3. Production process

=>1.Raw material:

The whole production process is physical refine so, that they uses mainly brown rise for the production.

=>2.Machinery:

They uses following machinery for the production.

=>drying machine

=>pressing machine

=>Conveyers

=>Cabinet box

=>3.Production process:

It includes major three step of production process.

=>Oil processing process

=>Oil solventing proces

=>Oil refining process

1) Oil Pressing Process :

Rice bran oil should be drying and frying for fresh rice then store time is less than 3 days before pressing or it would become bad quality and affect the final oil quality.

It’s complete set of oil pressing equipment, which is automatically operated to save more labor and cost. Including to the following machinery and parts: electrical apparatus control, materials feeder, conveyer, frying machines, separator machine, medium boiler etc.

2) Oil solventing Process :

The second way to extract oil for using chemical solvent to dissolve oil content contained in cake or direct oil seeds, only for lower oil seeds,for example soybean, the oil is separated from solvent by vaporizing solvent out. In configuring the solvent extraction plant, pre- pressing may be involved in which case seeds are lighly pressed, and which leaves about 14% to 18% oil in the pressed cake, solvent extraction will further process these cakes and leave less than 1%oil in the final cake. This method results in higher yield, more oil, lower power consumption, lower wear and tear / maintenance and high extract, efficiency.

Thus, it could be used as complement equipment to extract the oil, which yiled are extra process.Certainly if the capacity is less than 50 tons, or it is high rate of output oil, this process could be saved.

3) Oil refinery process :

The crude vegetable oil from above mentioned two ways of extracting, oil pressing and / or solvent extraction, will be pumped into oil refinery units to produce cooking oil at various grades.

The main equipment of oil refinery is various kinds of vessels and tanks carrying on different tasks with additives. These tasks may include sedimentation, filtering, neutralization cremoving free fatty acids, degumming, deodorization, decolorization (bleaching), dawax etc. Different combination of steps and the treating degree of each step result in different grade cooking oil and salad oil.

Types of marketing

1) Door to Door marketing:

In this type they higher sales man and sales women for marketing the product they go door to door to create awareness about the product.

2) Print media:

In this type they print pamphlet and put them in a selected newspaper and they also give small advertisement in a newspaper and magazine.

3) Free sample:

They give certain free sample to create awareness of the product among the people.

4) Group marketing:

In this new way of marketing the awareness is spread through Group Company tell to one group and this group may tell to another group and follow. Thus awareness about the product is spread through group.

5) Discount and scheme:

They give some discount to lower and middle class people to spread awareness among them .they also provide such small pouch of packet while purchasing big one.

Location & site :-

On the basis of our concrete consideration regarding various locational factors such as infrastructure area of water, electricity and lab our environment and ecological factors and economic conditions of various locations we have decided to establish our project at Karnataka.

The total land require for this project is 500 square meter approximately, the price per square meter of land is 500 Rs.approximately value of the land is 2, 50,000 approximately. The marketing department of company located at sumul dairy road, Surat.

Name of suppliers :-

1. Supplier of raw material

1.1Thai edible oil co.Ltd. Ayudhaya, Thailand.

2. Supplier of Machinery

2.1Changsha Mill Machinery Co, Ltd.

Changsha City, Hunan Province

China.

Name of competitors :-

l. Tirupati Oil

2. Suffola Gold Oil

3. Rajhans Oil

Financial aspects :-

1) Fixed asset :-1.1] Land & building:-

We are decided to locate our plant in 500 sq. ft. mt. area. The rate of land per square meter of the land prevailing in this area is mention in below.

We are deciding to constract building as ground floor & first floor. It require for the main production plant, utilities & section etc.

Land 250000

Building 550000

8, 00,000

1.2] Machinery & equipment:-

At the stage of requirement/ or purchase of different equipment & machinery the following importance aspects are going to be taken into consideration.

--Economic

--minimum wastage

--fully utilized

--multi purpose

Equipment 775000

Electricity cost 70000

Office fixture & furniture 30000

Total 8, 75,000

1.3] Pre-operating exp

Deposit/Project Report

Of electricity 75000

Land & building 8,00,000

Machinery & equipment 8,75,000

Pre-operating exp. 75,000

Total fixed cost 17,50,000

2) Recurring exp. Per annum :- 2.1] Labour:-

The need of personnel is to be estimated on basis of load, requirement of skills, productivity of workers on similar job etc. production target can be achieved by running plant in 2 shifts each of 8 hours, the various requirement of the labour for the production are as under.

Designation no Salary Annual

Factory manager 3* 6800*12 2, 44,800

Worker 25* 2500*12 7, 50,000

Total 9, 94,800

2.2] Raw material & packaging material:-

Particular Qty. Rate Cost

Only servicing 525 1000 5, 25,000

Commercial-

Hydrochloric acid 21 6000 1, 25,000

Total 6, 50,000

2.3] Utilities

Power [5 KW] 1, 35,000

Water 24,000

Total 1, 59,000

2.4] Other exp

Repair & Maintenance 40,000

Insurance 50,000

Other (stationary) 10,000

1, 00,000

Labour 9,94,800

Raw material & packaging material 6,50,000

Utilities 1,59,000

Other exp 1,00,000

Total recurring exp 19, 03,800

3) Working capital require(25000*12) 3, 00,000

Total capital investment = W.C.R + Total fixed cost 20, 50,000

Financial analysis

1. Cost of production Amount

Recurring exp 19, 03,800

Dep. on building 5% 27,500

Dep. On machinery 10% 87,500

Dep. On furniture 20% 14,000

Int. on capital invest 12% 2, 46,000

Total 22, 78,800

2. Sales proceedsItem Qty. Per month rate Amount

Stabilized bran 525 2500 13, 12,000

Other bran 400 3782 15, 12,800

Total 28, 24,800

3. Net profit per year = sales – cost of production

=28, 24, 800 – 22, 78, 800

= 5, 46, 000

4. Net profit ratio = Net profit * 100

Sales

= 5, 46, 000* 100

28, 24,800

= 19.32%

5. Rate of return on investment = Net profit * 100

Capital investment

= 5, 46,000*100

20, 50,000

= 26.63%

6. Annual fixed cost:-

Dep

Building: 27500

Machinery 87500

Furniture 14000

Insurance 50000

Interest on C.I 246000

4, 25,000

7. Break even point: - Annual fixed cost*100

Annual fixed cost + profit

= 4,25,000*100

4, 25,000+5, 46,000

= 43.77%

Cost of project table:-

Land 250000

Building 550000

Machinery 875000

Fixed assets 70000

Preliminary Exp.

Pre operating exp. 75000

W.C.R. 300000

General other exp ______

21, 20,000

BALANCE SHEET

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

Capital 1170000 1225000 1535000 1550000 1960000

+Net profit 546000 570000 720000 870000 930000

-Drawing 88000 95000 110000 130000 150000

Creditors 72000 85000 95000 105000 115000

Loan 775000 75000 725000 700000 675000

W.C.finance 300000 300000 300000 300000 300000

2775000 2835000 3265000 3395000 3830000

Assets

Land

(500 sq m)

250000 250000 250000 250000 250000

Building 550000 550000 660000 660000 770000

Machinery 875000 875000 1050000 1050000 1225000

Furniture 70000 70000 85000 85000 95000

Stock on

Hand

230000 280000 330000 380000 430000

Investment 530000 580000 630000 680000 730000

Cash on

Hand

20000 40000 60000 70000 80000

Cash in

Bank

80000 90000 90000 110000 120000

Pre-operating exp.

75000

_______

-

_________

-

_________

-

________

-

________

27,75,000

28,35,000 32,65,000 33,95,000 38,30,000

Depreciation Table

Dep. Year-1 Year-2 Year-3 Year-4 Year-5

MC.1 17,500 17,500 17,500 17,500 17,500

MC.2 17,500 17,500 17,500 17,500 17,500

MC.3 17,500 17,500 17,500 17,500 17,500

MC.4 17,500 17,500 17,500 17,500 17,500

MC.5 17,500 17,500 17,500 17,500 17,500

MC.6 - - 17,500 17,500 17,500

MC.7 -

_______

-

______

-

_______

-

_______

17,500

_______

87,500 87,500 1,05,000 1,05,000 1,22,500