Feasibility report

1/16/2015

APR fruit processing and packaging Pvt. Ltd

Ramesh Ameta , Alipt Patel & Pramod mahunta

Table of contents
Sr no.
1

Topics
Objective of this Report

Page no.
3

Summary

Brief description of
project and product

GEOGRAPHICAL
POTENTIALFOR
INVESTMENT

Potential Target Markets

And Cities

Project Economics

Space Requirement

Furniture and fixtures

11

10

11

Revenue Generation

Projected Balance sheet

Key Assumptions

12

13

14

Objective of this Report

This information memorandum is to introduce the subject matter and provide a general idea and
information on the said subject. Although, the material included in this document is based on data
information gathered from various reliable sources; however, it is based upon certain assumptions
which may differ from case to case. The information has been provided on as is where is basis
without any warranties or assertions as to the correctness or soundness thereof. Although, due
care and diligence has been taken to compile this document, the contained information may vary
due to any change in any of the concerned factors, and the actual results may differ substantially
from the presented information.
The project pre-feasibility may form the basis of an important investment decision and in order to
serve this objective, the document/study covers various aspects of project concept development,
start-up, and production, marketing, finance and business management.
The purpose of this document is to facilitate potential investors in Fruits Processing & Packaging
Plant by providing them with a general understanding of the business with the intention of
supporting potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally documented
sectors attains greater imminence as the research that precedes such reports reveal certain rules
of thumb; best practices developed by existing enterprises by trial and error, and certain industrial
norms that become a guiding source regarding various aspects of business set-up and its
successful management.

Summary
Fruits Processing & Packaging Plant, which would extract pulp of Apple, Peach, Guava and Plum, is
proposed to be located at Dholera SIR which as all basic infrastructure is available for easy
transportation of raw material and finished goods. The finished product is pulp of Apple, Peach,
Guava and Plum.
The proposed project will have the installed capacity of 1,810 Tons/ year on the basis of daily shift
of 8 hours whereas the operational capacity will be 724 tons per year on 8 hours shift per day, on
a processing contract basis.
The total Project Cost is Rs. 2,197,000/- including the Capital Cost of Rs. 1,437,000/- and the
Working Capital of Rs. 760,000/-. Given the cost assumptions IRR and payback are 38%, and 2
years respectively, hence making the project viable. Apart from being a profitable business, the
project will also create new business opportunities for fruits growers and traders etc.
The most critical consideration or factors for success of the project are:
Multiple sources for availability of raw material (Apple, Peach, Guava and Plum).
Processing contract with farmers or traders, preferably with advance payments for procurement
and remaining payment as cash on delivery.
Strict Quality assurance of process and products as per FSSAI standards.

Brief description of project and product

The project is related to setting up Fruits Processing & Packaging Plant with following detail:
Technology: The proposed facility will have semiautomatic mechanical facility for Washing,
Sorting/Grading in addition to extraction of their pulps and its packaging facility.
Location: The unit can be installed anywhere in Dholera SIR where the raw materials are easily
accessible from Fruit markets due to Proper transportation facility.
Product: The unit would produce fruit pulp, processing and adding value to raw apple, peach,
guava and plum, which will come from different regions of Gujarat and all over India.
Target Market: Within India, existing Industrial units with fruit processing facilities hold
enormous potential for marketing fruit pulp. An enormous export markets for Indian fruits and
their value added products exist in the USA, the Europe, Middle East, Far East and Sri Lanka.
Employment: The proposed project will provide direct employment to 5 people.
Profitability: Financial analysis shows the unit shall be profitable from the very first year of
operation.

Critical factors
The following factors should be considered thoroughly:
Processing contract with farmers and traders for value added business opportunities.
Availability of raw material (Apple, Peach, Guava and Plum).
Awareness about FSSAI standards and Strict Quality assurance of process and products.

Installed and Operational Capacity

The installed capacity of the project will be 1,810 Tons per year whereas the project will start
working with an initial operating capacity of 724 Tons per year with an annual growth rate of 5%.

GEOGRAPHICAL POTENTIAL FOR INVESTMENT

The unit can be installed anywhere in Gujarat where the raw materials (fresh fruits) are easily
accessible. But the most appropriate area for installing Fruits Processing & Packaging Plant should be
that areas in which the raw material, apple, peach, guava and plum, are in abundance which will
minimize the transportation cost.

Potential Target Markets And Cities

Initially, fruits will be processed to cater the demands of small and large juice manufacturers
located in major cities of India like Ahmedabad, Surat, Mumbai, Bangalore etc. After domestic
needs are fulfilled, it will be exported to the different countries. The main export markets for
Indian processed fruits are including USA, Europe, Middle East, Far East, India and Sri Lanka .

Production Process Flow

Project Cost Summary

A detailed financial model has been developed to analyze the commercial viability of Fruits Processing
& Packaging Plant Loan. Various cost and revenue related assumptions along with results of the
analysis are outlined in this section.

Project Economics
All the figures in this financial model have been calculated for installed capacity of 1,810 Tons per year
with an initial operating capacity of 724 Tons per year.

The following table shows internal rate of return, payback period and net present value of the project.
Table 1 - Project Economics
Description

Details

Internal Rate of Return (IRR)

38%

Payback Period (yrs)

Project Financing
Following table provides details of the equity required and variables related to bank loan;
Table 2 - Project Financing
Description

Details

Total Equity (10%)

Rs. 219,700

Bank Loan (90%)

Rs.1,977,300

Markup to the Borrower

(%age/annum)

8%

Tenure of the Loan (Years)

Grace period (year)

Project Cost
Following requirements have been identified for operations of the proposed business:
Table 3- Project Cost Capital
Investment

Amount (Rs.)

Machinery and Equipment

1,265,000

Office Equipment

78,000

Furniture & fixtures

94,000

Total Capital Cost

1,437,000

Initial Working Capital

760,000

Total Project Cost

2,197,000

Space Requirement
The area has been calculated on the basis of space requirement for production area, management building,
stores, and Grounds. However, the Units operating in the industry do not follow any set pattern. Following
table shows calculations for project space requirement on rental basis

The building will be on rental basis with rent paid on yearly advance basis. Total investment in building
and infrastructure is calculated to be approximately Rs. 216,000 per annum.

Installation Charges
Through our estimate our Machinary and instalment charges comes to 1265000. Machinary includes
Pulper , Pump, Sorting Machines and tanks.

Fruits Processing & Packaging Plant is semi automatic processing facility, which will receive fruits
initially at sorting tables through washing facility. It transfers fruits to washing tub and after grading,
the fruits to be transferred to pulper for pulp extraction. Extracted pulp would then be transferred to
tanks through vessels and preservatives would be mixed in it through shrinking machine. Electric
pump installed adjacent to tanks would be used to fill pulp in drums.

Office Equipments
These following Office Equipments will be required:

Table 6: Office Equipment

Costs Quantity

Cost

Amount

Computers

01

40,000

40,000

Printer

01

35,000

35,000

Telephone

01

3,000

3,000

Total

03

78,000

Furniture & Fixtures

Furniture & Fixtures
Quantity
Chairs
08
Tables
03

Cost
5,000
18,000

Amount
40,000
54,000

Raw Material Requirements

As already mentioned that our four major end products produced are; Apple Pulp, Peach
Pulp, Guava Pulp and Plum Pulp. Following table shows raw material requirement to
process fruits for one month based on already defined operational capacity:

Office Equipments

Furniture and fixtures

10

Raw Material Requirements

As already mentioned that our four major end products produced are; Apple Pulp, Peach
Pulp, Guava Pulp and Plum Pulp. Following table shows raw material requirement to
process fruits for one month based on already defined operational capacity:

Human Resource Requirement

11

Revenue Generation

Other Costs

12

Projected Balance sheet

13

14

Key Assumptions

15

16

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