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INTRODUCTION

1. 1INDUSTRY PROFILE

Biscuit industry is one of the major food and beverage industry under FMCG industry. It is
growing at a rapid rate in developing countries.

OVER VIEW OF THE INDIAN BUSCUIT INDUSTRY

Biscuit industry contribute Rs 8,000 crore to the FMCG industry and provide a vast
opportunity for growth, as the per capita consumption of biscuits is less than 2.1 kg 3kg in
our country. India It is classified under two sectors: organized and unorganized. Branded
/Organized to Unbranded/Un organized market share of biscuit has been 70% for
organized sector and 30% for unorganized sector. Apart from Big 3 (Britannia, Parle, ITC)
there are around 150 medium to small biscuit factory in India. The Industry is now facing
problem from increase of raw material price. With Government VAT up to 12.5% has
added to their woes .Biscuit consumption per capita in India has grown to 2.1kg per capita
in comparison to 10kg per capita consumption in USA, UK and Europe. India Biscuits
Industry came into limelight and started gaining a sound status in the bakery industry in the
later part of 20th century when the urbanized society called for readymade food products at
a tenable cost. Biscuits were assumed as sick-man's diet in earlier days. Now, it has
become one of the most loved fast food products for every age group. Biscuits are easy to
carry, tasty to eat, cholesterol free and reasonable at cost. States that have the larger intake
of biscuits are Maharashtra, West Bengal, Andhra Pradesh, Karnataka, and Uttar Pradesh.
Maharashtra and West Bengal, the most industrially developed states, hold the maximum
amount of consumption of biscuits Even, the rural sector consumes.
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 Biscuit industry in India in the organized sector produces around 60% of the total
production, the balance 40% being contributed by the unorganized bakeries. The
industry consists of two large scale manufacturers, around 50 medium scale brands and
small scale units ranging up to 2500 units in the country, as at 2000-01. The
unorganized sector is estimated to have approximately 30,000 small & tiny bakeries
across the country.
 The annual turnover of the organized sector of the biscuit manufacturers (as at 2001-02)
is Rs. 4,350 crores.
 In terms of volume biscuit production by the organized segment in 2001-02 is estimated
at 1.30 million tones. The major Brands of biscuits are - Britannia, Parley Bakeman,
Priya Gold, Elite, Cremica, Dukes, Anupam, Horlicks, Craze, Nezone, besides various
regional/State brands.
 Biscuit industry which was till then reserved in the SSI Sector, was unreserved in 1997-
98, in accordance with the Govt Policy, based on the recommendations of the Abid
Hussain Committee.

 The annual production of biscuit in the organized sector continues to be predominantly

in the small and medium sale sector before and after de-reservation. The annual
production was around 7.4 Lakh tones in 1997-98 in the next five years, biscuit
production witnessed an annual growth of 10% to 12%, up to 1999-00.

 The annual Growth showed a decline of 3.5% in 2000-01, mainly due to 100% hike in
Central Excise Duty (from 9% to 16%). Production in the year 2001-02 increased very
marginally by 2.75% where in 2002-03 the growth is around 3%.

 The Union Budget for 2003-04 granted 50% reduction in the rate of Excise Duty on
Biscuit i.e. from 16% to 8%. The Federation's estimate for the current year indicates a
growth of approximately 8% to 9%.

 However the average utilization of installed capacity by biscuit manufacturers in the

country has been a dismal 60% over the last decade up to 2001-02.
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 Though dereservation resulted in a few MNCs, i.e. Sara Lee, Kellogg’s SmithKline
Beecham, Heinz etc entering the biscuit industry in India, most of them, with the
exception of SmithKline Beecham (Horlicks Biscuits), have ceased production in the
country.

 On the other hand, import of biscuits, especially in the high price segment has started
from 1998-99, but however, the quantum of imports has not so far increased alarmingly
and has remained at around 3.75% of the consumption of biscuits in the country in the
year 2001-02. However, recent imports from china industries cheaper verities of biscuit,
needs to be examined with cautions, especially in the context of the price as the low
margin based domestic industry, which is operating at 60 % of the total installed capital.
An export of biscuits from India has been to the extent of 5.5% of the total production.
Exports are expected to grow only in the year 2003-04 and beyond.

 Biscuit is a hygienically packaged nutritious snack food available at very competitive

prices, volumes and different tastes. According to the NCAER Study, biscuit is
predominantly consumed by people from the lower strata of society, particularly
children in both rural and urban areas with an average monthly income of Rs. 750.00.

 Biscuit can he broadly categorized into the following segments: ( Based on production
of 2000 - -2001)
Glucose 44%
Marie 13%
Cream 10%
Crackers 13%
Milk 12%
Others 8%
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 In recognition of industry's obligations towards the community, being a part of it,

biscuit manufacturers supply biscuits to the social welfare agencies in all States for the
benefit of school children, senior citizens and other needy sections of the society. FBMI
Members have always responded positively to our appeal as also by the Government, to
rush truck loads of biscuits to the people affected by earthquakes, floods, famine etc.
Our industry has also participated in supplying biscuits to the people of war ravaged
Afghanistan and presently to the Iraqi people, under the aegis of the UN.
 As regards the consumption pattern is concerned surveys and estimates by industry
from time to time indicate the average consumption scenario in the four zones have
been more.

Northern States: 28%

Southern States: 24%
Western States: 25%
Eastern States: 23%

 Though India is considered as the third largest producer of Biscuits after USA and
China, the per capita consumption of biscuits in our country is only 2.1 Kg., compared
to more than 10 kg in the USA, UK and West European countries and above 4.25 kg in
south East Asian countries, Le. Singapore, Hong Kong, Thailand, Indonesia etc. China
has a per capita consumption of 1.90 kg, while in the case of Japan it is estimated at 7.5
kg.

 In view of the meager per capita consumption even as penetration of biscuits

manufactured by the organized sector, into rural areas in India, has been very good
during the last 10 years, as also in the metro and other cities, small towns etc. However,
in spite of this, the industry has not been able to utilize about half of their installed
capacities.

 Biscuit is a comparatively low margin food product in the PMCG (Packaged Mass
Consumption Goods) sector. The commodity is also price sensitive, as a consequence of
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which, even when the Excise Duty was doubled on biscuits in 2000-01 biscuit
manufacturers, including the major brands, were not able hike MRPs to the extent of the
steep increase in the Duty. Taxation, both Central Excise Duty as also State Sales Tax,
other miscellaneous levies i.e. turnover tax, local area tax, mandi taxes, purchase tax,
octroi etc, has been a major deterrent in the growth of the biscuit industry. The CII
Study Report has identified Biscuit as one of the products that should treated as "Merit
Good for the purpose of liberal tax policy both by the Centre and States.

 Besides lack of technology up gradation in manufacturing, packaging etc has also been
a factor affecting our industry, along with inadequate financial credit and support
particularly for the medium and small scale biscuit units.

 On the other hand, the Government of India has identified food processing industries as
a priority area to be encouraged for growth and development and created the Ministry
of Food Processing Industries (which was till then a Dept in the Ministry of
Agriculture), headed by an Ministry of State with Independent charge.

 The Food Processing Ministry has been rendering yeomen service to the industry, of
which biscuit manufacturing is an important part. The Ministry, with the objective of
enabling food processing Industries to undertake technology up gradation
diversification. expansion as also to set up new units has formulated scheme of Grants
and Financial Assistance.

 Other areas of concern to industries of food products like Biscuits include multiplicity
of food laws and their enforcing agencies in the Central and State Governments with
overlapping functions & implementation. At the persistent instance of industry
organizations including FBMI the Ministry of FPI took the initiative in evolving an
Integrated Food Act, harmonizing the existing multifarious legislations enabling better
compliance. The Draft Unfiled Food Bill 2002 has been prepared and now awaits
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approval by the Cabinet and the Parliament, which will fulfil an important need of the
industry and pave way for accelerated development and growth.

 Biscuit manufacturing as well as other bakery products like Bread etc are agro based
industries, with the major inputs - wheat flour/atta sugar, milk vanaspati/vegetable oil
etc all being agriculture produces.

 Industries such as Biscuit are also languishing as they are not able to achieve their
potentials for higher production, in the absence of the concrete food Processing Industry
Policy. FBMI in close coordination with other organizations and apex Chambers,
initiated to urge the Govt of India to formulate a comprehensive Policy Document, for
smooth growth and harmonious development of the industry. The Food Processing
Industry Policy, which has been evolved as a result of various workshops, deliberations
and representations by a large cross section of food processing industries, is yet to be
finalized. It is hoped that the Ministry of Food Processing Industries, GOI would initiate
action for implementation of the Policy expeditiously.

The process of biscuit manufacturing involves the following stages:

MIXING:
This is a process where all ingredients are put together in right proportion for dough
formation. These ingredients are then fed into Mixers where mixing is done
and dough is prepared for moulding/cutting .Major ingredients are flour, fat, sugar and
others as per the product one would like to have.
MOULDING:
In this section we laminate the dough into sheet, which then passes down to gauge rollers,
and sheet thickness is achieved for moulder/cutter. Here we have a cutter or moulder as
per the variety where one gets the shape and sizes of biscuits.
BAKING:
This is the area where we pass these moulded wet biscuit into baking oven.
The biscuits are baked on desired temperatures. Various type of heating are available now
days as per the convenience and cost. Different type ovens are available.
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High level of competition within the industry has lead to innovations in

several areas, thereby raising the overall capability levels in the sector. This
will facilitate sustained growth in the sector and help it to become globally.

SWOT ANALISYS

Strengths
 Brand building capabilities: Brand image of the company existing in the industry, every
company has a strong brand image to consumers.
 Diversified product range of the industry covering al segments.
 The depth of distribution
 Low and mid price range of the product.
 Industry catering to masses, as in most developing economies, increasing purchasing
power is aiding the shift to affordable options.

Weaknesses:
 Dependence on retailers and grocery stores for displaying diversified products on shelf.
 Lack of technology up gradation

Opportunities:
 Indian Biscuit Manufacturers’ Association (IBMA) estimates annual growth
of around 20% in next couple of years.
 The $220 Billion food industry is expected to grow to $300 Billion by 2015.

Threats:
 Per capita consumption of Biscuits in the country is only 1.8 kg as
compared to2.5 kg to 5.5 kg in South East Asian countries and European countries,
and 7.5 kg in USA.
 The Sales Tax or VAT rates for all machinery used should be lowered to the
concessional rate of 4%.
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3.1 ORGANIZATION PROFILE AND RESPONDENTS

PARSONS NUTRITIONALS Pvt. Ltd.

ABOUT PARSONS:
Parsons Nutritionals Pvt. ltd is a biscuit manufacturing unit with state of the art and
industrial benchmark facility with installed capacity of 20000MT/Year. Presently this unit
is engaged in manufacturing of 14000MT/Year biscuits for GlaxoSmithKline Consumer
Healthcare Ltd. We manufacture High energy Biscuits viz. Horlicks, Cornflakes biscuits,
Junior Horlicks Biscuits (Animal shaped) in 20 SKU’s varying from 35 gm to 500 gm in
different variants. The unit is ISO 9001:2000 certified and audited by GSK’s central
quality team. Our association with GlaxoSmithKline is 20years old, which speaks of our
ethical and transparent working.

Parsons Nutritionals Pvt. Ltd is a company registered under the companies act, 1956 by the
register of companies, NCT, Delhi vide registration no. U65311DL2002PTC115025
incorporated on 18th April, 2002. The company was promoted by Mr. Raj Deep Mann, Mr.
Swapan Deep Mann and Mr.Surinder Singh as promoters. The company waspromoted to
set up dedicated biscuit manufacturing unit for GSKCHL under contract manufacturing.
The company has been manufactured biscuit under the brand name of Horlicks & Boost for
GSKCHL since then. The biscuit manufactured by the unit are supplied throughout India
and other adjoining countries like Nepal, Bangladesh, and SriLanka & Middle East as it is
the contract manufacturing unit for GSKCHL. Seeing the past trends highest Quality
Management System (QMS) and Good Manufacturing Practices (GMP).In 2012 another
unit started in Bangalore for supply for southern states. Presently company having
dedicated production facility for biscuit and oats manufacturing for M/s GlaxoSmithKline
Consumer Healthcare Limited. In 2012 another milestone of the company had an
agreement with M/s Kraft foods for manufacturing of Biscuit under contract
manufacturing. The Project is in starting stage.
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PROMOTERS: Promoted by:

 Mr. S.S. Mann, (NDRI Graduate, year 1971)
 Raj Deep Mann,( M.tech RMIT University, Melbourne, Australia- Joined business in
Feb2000)
 Swadandeep Mann ( Bachelor of Engineering from Thapars, Patiala, MBA from Oxford
University, U.K)
 Surinder Singh- (Mechanical Engineer) with the group Since 1989, currently as
Executive Director Responsible for all technical and project activities.

QUALITY:
Quality is the key driver of business at Parsons. The company has outlined a well defined
quality management system to be followed at every stage. A stringent check on incoming
raw, in-process control and final inspection ensures flawless execution of all orders. The
dedicated team of quality auditors at the company can redefine quality control program as
per the requirement of the industry. Continuous quality improvement drive Parsons goal to
satisfy the customer's needs for compliance.

LIST OF MAIN EQUIPMENT

 Pneumatic Conveying System for Wheat Flour and Sugar
 Online Sugar Pulverisers
 Automatic Batching and Dispensing System for Wheat Flour and Sugar
 Automatic Chemical Batching and Dispensing System
 Automatic Chemical Batching and Dispensing System
 Mixers, Automatic Dough Feeder
 Rotary Moulding Machine
 Natural Gas Fired Oven
 Cooling Conveyor
 Metal Detectors
 Stacker & Packing Tables
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 High Speed Flow Wrap machines for Slugless

 Family Pack and Canteen Pack Machines
 Vertical FFS for Pillow Pouches
 Central HVAC for Packing Hall and Manufacturing Area and FDV for other Areas
 RO Plant for Process and Drinking Water
 Other Allied Service equipment like Generators, Compressors etc

The principle clauses of company EHS policy are:

1. The Company adopts eco-friendly production methods and practices

2. The company efforts to create environment all awareness among the employees
3. The company strives for continual improvement in the environment policies from time to
time.
4. The company complies with applicable legislative requirements.
5. The company complies with the local and national laws and regulations for occupational
health and safety.
6. The company spreads awareness about occupational healthy and safety awareness among
employees.

PRODUCT OR SERVICES:
Manufacture of biscuits and Oats and food products.

AREAS OF OPERATION:
South India as well as export to Nepal, SriLanka, Arab Contraries

COMPETITORS INFORMATION:
All biscuit manufactures like Pale-G, ITC, Sun feast, Britannia
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INFRASTRUCTURE FACILITY:
a) Pneumatic Conveying System for Wheat Flour and Sugar
b) Online Sugar Pulverize
c) Automatic Batching and Dispensing System for Wheat Flour and Sugar
d) Automatic Chemical Batching and Dispensing System
e) Automatic Chemical Batching and Dispensing System
f) Mixers, Automatic Dough Feeder
g) Rotary Moulding Machine
h) Natural Gas Fired Oven
i) Cooling Conveyor
j) Metal Detectors
k) Stacker & Packing Tables
l) High Speed Flow Wrap machines for Slugless
m) Family Pack and Canteen Pack Machine
n) Vertical FFS for Pillow Pouches
o) Central HVAC for Packing Hall and Manufacturing Area and FDV for other Areas
p) RO Plant for Process and Drinking Water
q) Other Allied Service equipment like Generators, Compressors etc.
SWOT ANALYSIS:

STRENGTH:
 Services: The strength of the company is,that it provides national and multinational
companies with manufacturing and packaging services at par with the best in the
industry.
 The companies main focus is to provide 100% customer satisfaction reduce product
launch time lines and accelerate custom packaging requirements.
 It provides services for wide range of products including food items, biscuits, oats,
cereals products and many more.
 Parsons Nutritionals adopts environmental management and occupational health and
safety management at par with international best policies. The company is committed to
promote the safety of the employee and to protect the environment.
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WEAKNESS:

 Attrition rate is high

 Transportation problem
 Connectivity problem (communication problem, signals, internet)
OPPURTUNITIES:

 Has a good brand name and a very good market share

 Attracting food manufacturing MNC because it has very good quality standards.
THREATS:

 Problem of localities because of isolate place.

FUTURE GROWTH AND PROSPECTS:

Plan to have more MNC for manufacturing all kind of food products.

1. To carry on the business of manufacturing, processing, packing, packaging, refilling,

blotting of all kinds food and food products, milk products, food stuff, provisions and
consumer products.
2. To manufacture, produce, process, prepare buy, sell and deal in soya milk, soya milk
products and preparations, soya bean based foods and soya oil solvent extracted or
otherwise including spray dried milk powder, cheese, curd, ice-cream, baby foods, proteins
foods and other preparation of soya cereals and lentils including flour and dal, soya snacks
food, soya sweets, soya cookies and chocolates, soya wearing food flavoured with fruits
and vegetables and soya beverages and other products and preparations of every kind
nature and description.
3. To manufacture, produce, process, prepare, buy sell and deal in all kinds of biscuits,
breads, cakes, pastries, confectionery, sweets, chocolates, toffees, breakfast foods, protein
foods, deitic products strained baby foods, tea and coffee, cereal products, wheat flakes and
provisions of all kinds.
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MISSION:
“To hone the efficiencies for ensuring consistent quality and customized solutions that
exceeds the needs and expectations of the customers.”

VISION:
"To become one of the world's leading organizations in contract manufacturing segment by
following international best practices, strategic operation management and rapid business
expansion.”