PROJECT REPORT

ON

RICE MILLING

WORKS:

Sy. No : 319/8,9,10 &11, YENUGULAPALEM (V),

PADMANABHAM MANDAL,
VISAKHAPATNAM DIST.
 TABLE OF CONTENTS

1. PROJECT AT A GLANCE
2. INTRODUCTION.

3. CONSTITUTION & SECTOR.

4. BACKGROUND OF PROMOTER DIRECTORS.

5. PROCESS.

6. RAW MATERIALS.

7. LOCATION AND ADVANTAGES.

8. MARKET STRATEGIES.

9. PROJECT COST.

10. DETAILS ON INDIVIDUAL HEADS OF PROJECT COST.

11. DETAILS ON INDIVIDUAL HEADS OF MEANS OF FINANCE.

12. UTILITIES AND SERVICES.

13. IMPLEMENTATION SCHEDULE.

14. FINANCIAL STATEMENTS

 1.PROJECT AT A GLANCE

1. Name of the unit. : LAKSHMI RICE MILL

2. Regd. Office. : Sy No 319/8,9,10 & 11, Yenugulapalem

(V), Padmanabham Mandal,
Visakhapatnam Dist

3. Line of Activity. : Dehusking of Paddy

4. Sector. : Small Scale

5. Constitution. : Proprietary.

6. Name of the proprietary. : Venni venkatarao

7. Project Cost & Means of Finance. :

(Rs in Lacs)
PROJECT COST AMOUN MEANS OF AMOUNT
FINANCE
Land OWN Promoter
Contribution :
Buildings 6.70 Capital 2.50
Plant & Machinery 10.00 Term 15.00
Working Capital 8.30 Working Capital 7.50
TOTAL 25.00 25.00
TOTAL

8. Promoters Contribution. : 10 %
9. Debt/Equity. 0.16:1
10. Power. : 30 HP
11. Installed Capacity. : 240 MT
 2.INTRODUCTION

India is one of the biggest producers of rice in the world next to China.
It accounts for about 31 percent of the area and 41 percent of the total
production of food grains in the country. It is a staple food of the people of
the southern and Northern Western States coastal areas and hilly areas.

The crop is grown in almost all the states of the country but its
cultivation is mostly concentrated in the states of Andhra Pradesh, West
Bengal, Tamil Naidu Uttar Pradesh, Bihar, Orissa, Madhya Praesh, Punjab,
Karanataka and Assam which account for more than 66 per cent of the total
paddy produced in the country.

Paddy milling industry is one of the largest agro based industries in the
country. There are reported to be 91,154 rice-milling units spread through
out the country. These units process 80 percent of the paddy produced in
the country. The other 20 percent is processed by traditional methods or
consumed in various form. With the introduction of high yielding varieties
that improved economic practices, the production of paddy is expected to be
increased in the years to come. There are still a larger number of units in the
country using the outdated technology like old hullers. The Central Food
Technological Research Institute Mysore has developed a technology for
processing of rice to secure an improved out turn rations from paddy to rice a
superior quality of milled products reduction of wastage, with better economic
returns to producers and processors.

Rice is the staple food for almost 65% of the population in India. Paddy
in its raw form cannot be consumed by human beings. It needs to be suitably
processed for obtaining rice. Rice milling is the process which helps in
removal of hulls and barns from paddy grains to produce polished rice. Rice
forms the basic primary processed product obtained from paddy and this is
further processed for obtaining various secondary and tertiary products.

Rice is one of the most important food crops of India in term of both
area, production and consumer preference. India is the second largest
producer and consumer of rice in the world. Rice production in India
crossed the mark of 150 million MT in 2013-14 accounting for 22.81%
of global production.
 3.CONSTITUTION & SECTOR

A proprietary concern by name and style of M/s LAKSHMI RICE

MILLis constituted to take up the project for Processing of Rice.
Sector:

The proposed unit comes under Micro Sector for which Registration was
obtained from DIC, Visakhapatnam

4. BACKGROUND OF THE PROMOTER

Mr.Venni Venkatarao S/o Sri V. Apparao , aged about 32 years is

residing at D No 1-1, Yenuu Palem, Pandrangi, Visakhapatnam
Dist 531162. He is a Graduate. He is an income tax assesse. He
owns property worth Rs 15 lacs near and around Padmanabham
Mandal. He can raise necessary funds as and when required. He is
the sole proprietary of the firm.

Name of the Promoter: Mr. Venni Venkatarao

D. O.B : 1984

Address : D. No : 1-1, Yenugu Palem,

Pandrangi,
L.Kota Mandal,
Visakhapatnam Dist 531 162
 5. PROCESS

Paddy may contain up to 5 per cent of foreign matter such as lumps of

soil, stones, stalk and chaff. Cleaning is done using vibratory screens and
air. Two types of rice mills are in used viz., the huller type and the automatic
sheller type. The huller mill is less costly than sheller mill but it gives less
yield of rice. Sheller mills essentially consists of cleaning sieves sheller,
aspirator, paddy separator, cone polisher and sorting sieve, modern rice mills
have rubber roller shellers, which results in the least breakage of rice.
The clean paddy is conveyed to the sheller for dushking, using vertical
bucket elevators. The husk is removed between the two rubber rollers or
cast iron rollers coated with cement of emery. Complete dehusking does not
take place here; about 5 to 20 percent paddy remains unhusked.
mixture is conveyed to the aspirator where the husk is sucked out using
a suction fan. Rice grain is collected in a chamber and paddy is discharged
at a third point and is sent back to the sheller for further dehusking.
Dehusked rice is conveyed to cone polisher or whitener, consisting of
an inverted truncated cone of cast iron coated with an abrasive emery
cement mixtures. During the process a lasts of heat is generated resulting
in breakage of grains. To prevent breakage the grains are usually passed
through a series of pearling cones. The degree of polishing may be
controlled to give partial or completely white rice. Now the Government of
India has laid down the limit of 3-5 per cent removal of bran from unpolished
or bran rice.
The polished rice is finally sieved to separate the bran from rice and to
separate broken from head rice (full grains). The rice is then graded in
various sizes for marketing. Apart from head rice (56%-65%) and broken rice
(5-10%) the following are obtained during milling of paddy, husk (15-25%)
bran (5-10%) polish (1-4%) and other foreign matter. (1-3%).
 During the paddy milling, rice is generally obtained about 60 to 70
percent, husk is obtained about 20 to 25 per cent, beside 5 per cent bran.
The bran contains about 14 to 16 per cent oil, which can be obtained through
solvent extraction process.
The basic rice milling processes consist of the following process.

Process

Pre Cleaning: Removing all impurities and unfilled grains from paddy
De-stoning: Separating small stones from paddy
Parboiling (Optional): Helps in improving the nutritional quality by
gelatinization of starch inside the rice grain. It improves the milling
recovery percent during deshelling and polishing / whitening operation
Husking: Removing husk from paddy
Husk Aspiration: Separating the husk from brown rice/ unhusked
paddy
Paddy Separation: Separating the unhusked paddy from brown rice
Whitening: Removing all or part of the bran layer and germ from
brown rice
Polishing: Improving the appearance of milled rice by removing the
remaining bran particles and by polishing the exterior of the milled
kernel
Length Grading: Separating small and large brokens from head rice
Blending: Mixing head rice with predetermined amount of brokens, as
required by the customer
Weighing and bagging: Preparing the milled rice for transport to the
customer
FLOW CHART
 6. RAW MATERIAL

The capacity of the proposed rice mill is 0.1ton per hour. Normally Rice
Mills are working 10 hours in a day and 250 day in a year.

Machine Capacity. : 0.1 x 8 x 300= 240 MTS

Operating Capacity 50%, 60%, 70%- 1st, 2nd, 3rd years

respectively

Operating Capacity in 1st year 300 MTS

The required raw materials are available abundantly near and around the
proposed area.

The capacity of the proposed rice mill is 0.1 ton per hour. Normally
Rice Mills are working 8 hours in a day and 300 day in a year.
 7.LOCATION AND ADVANTAGES

LAND: The proposed location of the Unit is situated at Sy No 319/8,9,10 &

11, Yenugulapalem (V), Padmanabham Mandal, Visakhapatnam Dist,
Andhra Pradesh. The site is located centrally notified backward area. The
location of the industry has considerable influence on the techno-economical
facility of the project. There are various factors contributing to the functioning
of an industry and following are the primary factors taken into consideration.

REASONS FOR THE SELECTION OF THE SITE:

1. Availability of labour at economically rate.

2. Adequate supply of electricity power.

3. Adequate supply of water throughout the year.

4. The site is well connected with road facility.

5. Banking facilities and Government supports.

6. Adequate Transport facilities for economical transportation of finished

product and
Spare parts.

7. Nearness to the Market.

 8. MARKET

Rice milling is an age old activity, which has gone, through many
phases of development from hand pounding, food pounding, hulling and
dehusking by energy disc sheller etc. to the latest method involving
dehusking by rubber roller sheller and polishing by modern mechanical
techniques.

One of the significant factors of paddy milling industry in India is that it

consists of large numbers of units having obsolete technology, which have
low economic value. With the adoption of new agriculture strategy, popularly
known as high yield, Variety program, introduced in the different parts of the
country, which envisages a need to modernize not only the existing rice mills
units, but to develop new modern mills based on the technology developed
CFTRO Mysore

Status of Rice Milling Units in India

Rice milling is the oldest and the largest agro processing industry of the
country. It has a turn over of more than Rs.25,500 crore per annum. It
processes about 85 million tonnes of paddy per year and provides staple
food grain and other valuable products required by over 60% of the
population. Paddy grain is milled either in raw condition or after par-boiling,
mostly by single hullers of which over 82,000 are registered in the country.
Apart from it there are also a large number of unregistered single hulling
units in the country. A good number (60%) of these are also linked with par-
boiling units and sun -drying yards. Most of the tiny hullers of about 250-300
kg/hr capacities are employed for custom milling of paddy. Apart from it
double hulling units number over 2,600 units, underrun disc shellers cum
cone polishers numbering 5,000 units and rubber roll shellers cum friction
polishers numbering over 10,000 units are also present in the country.
Further over the years there has been a steady growth of improved rice mills
in the country. Most of these have capacities ranging from 2 tonnes /hr to 10
tonnes/ hr

Global rice production in 2014-15 is 860 million tons while consumption

stood around 866 million tons. Andhra Pradesh & Telangana are one of the
major paddy cultivated state in India with 39.78 hectares with an output of
226 laksh tonnes. In Andhra Pradesh & Telangana rice is grown in 22
districts of which 18 districts are under high productivity group, with an yield
of mor than 2500 kg /ha.

Indian share in global rice production has been hovering in the range
of 19.50 to 24.52 % as shows the below given table. Indian share dipped
below 20 percent only in 2009-10. Production of rice in India is expected
to drop this year from 104.3 million MT to 101.80 million MT (including
11.11 million MT rabi production) due to lower kharif output pegged at
almost 90.69 million MT. Below given table shows the world rice
production and percentage share of India in total production:

Indias Rice Production in Global Context:

World Indian Production in Indias share

Year
Production million MT (In %)
2001-02 399 93.34 23.39
2002-03 380 71.82 18.90
2003-04 390 88.53 22.70
2004-05 405 83.13 20.53
2005-06 423 91.79 21.70
2006-07 427 93.35 21.86
2007-08 438 96.69 22.08
2008-09 459 99.18 21.61
2009-10 457 89.09 19.49
2010-11 449 95.98 21.38
2011-12 456 104.32 22.88
2012- 463 103 22.25
13*(Proj.)
1.3 Production of rice in major rice producing countries is as follows
(Source: USDA):
Qty in thousand MT

Countries 2008/09 2009/1 2010/1 2011/1 2012/13J 2012/13Fe

Bangladesh 3120 3100 3170 3370 3380 3400
Brazil 857 792 930 788 816 816
Burma 1120 1164 1052 1081 1075 1075
Cambodia 399 405 423 426 422 422
China 13433 13657 13700 14070 14300 14300
Egypt 467 456 310 425 470 470
India 9918 8909 9598 10432 9900 9900
Indonesia 3831 3637 3550 3650 3690 3690
Japan 802 771 772 764 775 775
Korea South 484 491 429 422 400 400
Nepal 285 301 268 297 290 300
Pakistan 690 680 500 650 680 680
Philippines 1075 977 1053 1070 1099 1099
Thailand 1985 2026 2026 2046 2050 2050
Vietnam 2439 2499 2637 2707 2771 2771
Others 3308 3530 3729 3714 3800 3795
United States 654 713 759 586 635 635
World Total 44870 44112 44909 46502 46555 46580

2.0 State-wise Production & procurement during last three years:

2011-12 2012-13 2013-14
Producti Procurem Producti Procurem Producti Procurem
on ent on ent on ent
Punjab 11.23 9.27 10.83 8.63 11.31 7.73
Haryana 3.62 1.81 3.47 1.68 3.96 1.98
U.P. 10.78 2.9 12.01 2.55 12.89 3.30
Bihar 3.59 0.89 3.32 0.88 4.75 1.53
A.P. 11.03 7.55 14.38 9.6 9.02 6.41
Orrisa 6.96 2.49 6.55 2.46 6.01 2.13
Tam
il 5.91 1.24 6.13 1.54 6.32 1.57
Nad
West
Beng 14.6 1.24 12.33 1.31 11.65 1.45
al
3.0 Year wise Paddy MSP has been as follows:

Marketing year Common Grade-A

1998-99 440 470
1999-2000 490 520
2000-01 510 540
2001-02 530 560
2002-03 550 580
2003-04 550 580
2004-05 560 590
2005-06 570 600
2006-07 580+Rs.40 bonus 610+40
2007-08 645+100 bonus 675+100
2008-09 850+50 880+50
2009-10 950+50 980+50
2010-11 1000 1030
2011-12 1080 1110
2012-13 1250 1280
2013-14 1340 1360
2014-15 1450

4.0 Domestic prices of rice

Monthly average rice price trend in domestic market from Oct. 2010 to
Sept.2012

2600
Average Rice Price Trend In Domestic
Market
2500
2400
Price in Rs per

2300
2200
quintal

2100
2000
1900
Oct Nov Dec Jan Feb March April May June July August
Sept
2010-Oct to 2011 Sep 2011 Oct to 2012 Sep
State wise Wholesale Prices Weekly Analysis for Rice Last week
February, 2014:
(Rs per qtl)
State Prices 24- Prices 16- Prices 09- Prices 24-
28 23 15 28
Feb Feb Feb Feb
AP 2013
3403.61 2013
3112.04 2013
3086.73 2012
2048.33
Assam 2485.4 2508.72 2494.15 2154.87
Gujarat 2530.53 2624.37 2651.15 2129
Jharkhand 2267.82 2363.38 2297.43 2167.57
Karnataka 3061.33 3097.11 3064.07 2173.43
Kerala 3349.99 3388.16 3552.21 2610.35
Maharashtra 5110.39 4830.2 5246.38 4008.45
Meghalaya 2744.19 3025 1953.75 2712.9
NCT of Delhi 1700 1600 1700 1500
Orissa 1689.43 1506.34 1748.01 2119.46
UP 1681.59 1688.05 1671.84 1433.67
West Bengal 2208.02 2212.38 2210.95 1924.39
Average 2686.02 2602.35 2739.58 2303.17
5. Indias
Rice Indias Export and Import of Rice
Trade

Year Export of Rice Import of Rice Share in

global
Quantity Value Quantity Value rice
(in (In (in (In export
2001-02 million
2.21 US$
665.5 million
neg US$
0.01 quantity
8.67
2002-03 5.06 1218.2 neg 0.23
19.62
2003-04 3.41 907 neg 0.06 13.05
2004-05 4.78 1506.5 neg na 17.21
2005-06 4.09 1405 neg 0.08 14.62
2006-07 4.75 1556 neg 0.09 16.28
2007-08 6.47 2927.5 neg 0.11
20.01
2008-09 2.49 2454 neg 0.11
8.94
2009-10 2.16 2365.7 neg 0.08
2010-11 2.47 2544.7 neg 0.20 8.60
6.86
2011-12 7.18 4940 0.001 1.16 18.89
5.1 Major export destinations of Indian export

S.No. Country Values in US$ Million

2012-13 2013-14
1 U ARAB EMTS 624.69 820.72
2 SAUDI ARAB 689.68 760.25

3 IRAN 446.2 600.31

4 NIGERIA 0.49 352.01
5 KUWAIT 239.9 295.47

6 IRAQ 36.36 167.3

7 UK 77.48 143.12
8 USA 55.34 119.95
9 SENEGAL 116.88

10 YEMEN REPUBLC 65.35 116.83

11 COTE D' IVOIRE 0.75 109.84

12 INDONESIA 2.37 109.62

13 EGYPT A RP 2.72 94

14 SOUTH AFRICA 13.27 91.54

15 BENIN 0.77 90.59

16 BANGLADESH PR 2.63 54.45
17 JORDAN 25.05 51.69

18 SINGAPORE 8.06 44.66

19 OMAN 8.17 42.58
20 NEPAL 10.03 42.35
 9. PROJECT COST & MEANS OF FINANCE

PROJECT COST AMOUN MEANS OF AMOUNT

FINANCE
PROJECT COST AMOUN MEANS OF AMOUNT
FINANCE
Land OWN Promoter
Contribution :
Buildings 6.70 Capital 2.50
Plant & Machinery 10.00 Term 15.00
Working Capital 8.30 Working Capital 7.50
Total 25.00 Total 25.00

Promoters Contribution. : 10 %
Debt/Equity. 3.49:1
 10. DETAILS ON INDIVIDUAL HEADS OF PROJECT COST

1. LAND: The promoter has taken land ,at Sy No 319/8,9,10 & 11,
Yenugulapalem (V), Padmanabham Mandal, Visakhapatnam Dist, Andhra
Pradesh. The procured land is having all location advantages for setting
up the proposed unit.

2. COST OF BUILDING: the promoter proposed to construct Mill and Raw

Material Godowns. The proposed building will be with R.C.C Structure,
Bricked wall with steel trussed AC sheet roofing. The estimated cost of civil
works is Rs. 10.00 Lacs
S. No Description Unit Price Amount
1 Mill 600 3,32,961.58

2 Toilets 6.00 Sq. m 600 38,746.80

6 x 10.763=64.578 Sq ft
5 Overhead Tank 2,00,000.00
6 Bore Wells 1,00,000.00
Total 6,71,708.00

3. NEW MACHINERY:

The total cost of the New Machinery is Rs.10.00 Lakhs. The abstract
of Plant & Machinery is as annexure:
S. No Description Qty Unit Cost Amount
1 Whitener Suri 1 2,15,000.00 2,15,000.00
2 Rice Grader 1 80,000.00 80,000.00
machine
3 Paddy Separator 1 1,64,000.00 1,64,000.00
4 Polishing machine 1 15500.00 15,500.00
5 Paddy Dehusker 25 2080.00 52,000.00
7 1 Hp Motor 4 4900.00 19,600.00
8 2 Hp Motor 3 6250.00 18,750.00
9 5 Hp Motor 1 9800.00 9,800.00
10 7.5 Hp Motor 1 16300.00 16,300.00
11 6 Synthetic Belt 109 Mts 215.00 23,435.00
12 6 Elevator Bucket 400 Nos 26.00 10,400.00
13 12 Hand Loom Belt 62.5 Mts 575.00 35,937.50
14 100 mm x 5 ply Belt 35 Mts 475.00 16,625.00
15 100 mm x 4 ply Belt 50 Mts 266.00 13,300.00
16 6211 K Bearings 20 Nos 425.00 8,500.00
NBC
17 6209 K Bearings 20 315.00 6,300.00
18 311 K Bush 60 95.00 5,700.00
19 6208 ZZ NBC 30 300.00 9,000.00
Bearings
20 309 K Bush 60 90.00 5,400.00
21 6209 ZZ NBC 30 350.00 10,500.00
Bearings
22 6203 ZZ MBC 200 85.00 17,000.00
Bearings200
23 Air Compressor 1 26500.00 26,500.00
24 S509 Block 20 260.00 5,200.00
25 S511 Block 20 350.00 7,000.00
26 Bright Rod 254 KGs 46.00 11,684.00
27 Silicon Carbide 108 KGs 130.00 14,040.00
28 Revo Machine 5 5100.00 25,500.00
29 Redmark Cylinder 14 795.00 13,650.00
30 SP Sheets 10 750.00 7,500.00
31 Motor Control Panel 1 1,37,858.00 1,37,858.00
Board
Total 10,00,000.00

11. INDIVIDUAL HEADS ON MEANS OF FINANCE

1. CAPITAL:
The promoter will introduce capital Rs 2.50 Lacs

2. TERM LOAN:
The Company desires to avail Term Loan of Rs. 15.00 lacs from Bank, to
meet part cost of the project cost, total project cost of Rs 25.00 lacs.
The amount would be repayable in 28 quarterly installments with a
 moratorium of six months from the date of commencement of commer-
cial production. However, the interest on the term loan would be payable,
as and when it is applied on the account. The details of the repayment
program are placed as an ANNEXURE
3. SUBSIDY:
The unit is eligible for subsidy @35% from KVIB UNDER PMEGP

12. UTILITIES AND SERVICES

POWER:

The unit requires 30 H.P. of power supply under L.T. Limits. No

problems are anticipated with regard to obtaining of power supply.
. WATER:
The unit requires 1,000 Liters of water per day, which is used for
domestic purpose. A provision is made for borewell and overhead tank in
the scheme under the head Civil Works.
EFFLUENTS:
There are no harmful effluents generated in the process. The unit
has to obtain clearance from Pollution Control Board.
TRANSPORTATION:

The proposed unit is located at Sy No 319/8,9,10 & 11,

Yenugulapalem (V), Padmanabham Mandal, Visakhapatnam Dist, Andhra
Pradesh. Railway Station is situated 4 KM. from the proposed location.
There is no problem for transportation of raw material and finished goods.
MANPOWER REQUIREMENTS:

The unit will be employing 6 Nos. of workers besides 4 Nos. of

administrative staff. All the above persons can be recruited locally without
any difficulties.

13. SCHEDULE OF IMPLEMENTAION

S.No Particulars Month Month

. Start Completio
n
01. Acquisition of Land Own Own
02. Development of Land own own
03. Civil Works factory Building, JULY 17 AUG 17
machinery
Foundation. Auxiliary building,
miscellaneous Building.
04. Plant & Machinery Indigenous JULY 17 JULY 17
Placement of Order
05. Arrangement for Power JULY 17 JULY 17
06. Arrangement for Water
07. Erection of Equipment AUG 17 SEP 17
08. Initial Procurement of Raw-Material SEP 17 SEP 17
09. Training of Personnel OCT 17 OCT 17
10. Trial Run NOV 17 NOV 17
11. Commercial Production DEC 17 DEC 17

ASSUMPTIONS UNDERLYING PROJECTIONS FOR COST OF

PRODUCTION AND PROFITABILITY STATEMENT

Capacity 0.1 Tons/Hours

No. Of Hours working in a day 8 hours

No. Of working days 300 days

Installed Capacity 0.1x 8 x 300 = 240 MTS

Operating Capacity is assumed as under:

1st Year 2nd Year 3rd year

Production 120 144 168

Capacity utilization 50% 60% 70%

Paddy required: 120 MTS/Annum

120x1000=1,20,000 KGS
120,000/80 = 1500 Bags
i.e., 1500 Bags/each bag 80 kgs

Cost of raw Material: 1500 x2185 = Rs. 32,77,500.00

Consumables are estimated of Rs.1,20,000

Power is calculated as under: 35 x 8 x 300 x .746 x 0.80 x .50 x

6.50=
Rs. 1,62,926.40
Wages are calculated as under:

Skilled 1 x 8000 = 8,000

Unskilled 3 x 6,000 = 18,000

-----------
26,000 x 12 = 3,12,000

Casual Labour 3750 @ 5 = 18,750

------------
3.30,750
-------------
Repairs and maintenance are estimated of Rs.60,000 Annum

Other factory inputs are estimated as under of Rs. 2,40,000

Salaries is calculated as under

Clerk 1 x 5000 = 2,000

Watch and ward 2 x 3000 = 6000

Accountant 1 x 5,000 =5,000

---------
13,000 x 12 = Rs.1,56,000

Adm. Expenses are estimated of Rs.1,80,000 per annum

Selling Expense are estimated of Rs. 2% on sale

Depreciation is calculated
Land. : NIL

Building. : 10%

Machinery. : 25%

Interested is calculated as under

Term Loan. : 12.50 %

Working Capital. : 12.75%

Sale income:

Rice. : 65%=78000 KGS=975bag@ 3500 = 34,12,500.00

Broken
Rice. : 10% = 12,000 kgs = 150 bags @1200 = 1,80,000

Bran. : 15% = 18,000 kgs = 225 bags @ 600 = 1,35,000

Husk. : 10% =12,000 kgs = 150 tons @ 3,000= 4,50,000

-------------------
41,77,500.00