INTRODUCTION

India is an agricultural country and horticulture is developing rapidly.

There is ample scope for the food processing industries. India being a

country where the king of fruits mango is about 1/3 rd of the total production

of the world.

In India, mango as a raw material is available on a very large scale.

Mango is a base to produce hundreds of food products. It can be exported to

different countries. The product chosen in this project is mango sweet.

(Amba Wadi) It has got its own taste and can be manufactured with very

small fixed assets. Now-a-days the tendency of the people is to eat the ready

made, tasty, fresh and durable products. This Ambavadi can be marketed and

kept without any damage for at least 6 to 8 months without changing the

original taste.

The entrepreneur has his own farms of mangoes and that is the main

reason he is starting this project of manufacturing Ambavadi.

 REASONS FOR CHOOSING THE PROJECT

1. AVAILABILITY OF RAW MATERIAL

2. INCREASED DEMAND FOR READYMADE FOODS

3. GOOD OPPORTUNITIES FOR EXPANSION OF THIS BUSINESS.

4. NEED OF LESS INVESTMENT

5. KNOWLEDGE OF THE PRODUCT

 LOCATION OF THE UNIT

Location of the unit is in the farm itself at Vannali Tq.Degloor

Dist.Nanded.

Reasons for selecting the Location :

1. The raw material i.e. mangoes is available in the farm itself.

2. Labour Supply : Labour supply is easily available in the rural area of

the village.

3. The raw material and unit being in the same field, the transportation

cost will be minimum.

 LEGAL FORMALITIES

Certain legal formalities in relation to this project will be completed.

These are :

1. Unit registration under SSI.

2. An approval letter from DIC.

3. Power sanction letter from the MSEB

4. Permission from Labour Office Commissioner regarding rules of

wages, provident fund, safety etc.

5. Registration certificate from Foods and Drug department Maharashtra.

RAW MATERIAL FOR AMBAVADI.

1. Mangoes

2. Sugar

3. Edible Colours

4. Preservatives

PACKAGING MATERIALS.

1. 60 GMS. PP Bags.

2. 125 gms. PP Bags.

3. 250 gms. PP Bags

4. Printed cardboard boxes.

FINISHED GOODS.

There is only one product. i.e. Ambavadi.

 MANUFACTURING PROCESS

Ambavadi being food item, many precautions will have to be taken

while manufacturing to avoid any sort of fungal infection and other

damages. The machinery is very simple and the production will be done

batchwise.

PRODUCTION PROCESS

RAW MATERIAL

WASHING AND CLEANING OF RIPE MANGOES

TREATMENT OF ANTIFUNGAL SOLUTIONS

EXTRACTION OF PULP

CONCENTRATION OF PULP UPTO DEFINITE VISCOCITY

MIXING WITH COMMON SUGAR

DRYING AND PACKING

 ADVERTISING

Advertising attracts the customers and helps them to get the best

product. The advertisement of the product will be done as follows :

1. Stickers.

2. Local Cable Network.

3. Banners.

Apart from advertisement the manufacturer has to develop a very

good market network, districtwise through the distributors and dealers with

attractive discount.

Advertising along with the perfect marketing network helps to push

the product in the market very easily.

SWOT ANALYSIS.

STRENGTH

1. Demand of the new and tasty food product is too high in the market.

2. A class of people in the society is in search of new products, They do

not care for the cost of the product.

3. The process is very simple But it is very difficult to product mango

mawa from mango pulp on very small scale at home and it is time

consuming.

4. The quality of product and a new taste of the people helps for the

marketing.

5. The product being new in the market will have no competition.

WEAKNESS

I do not find any weakness in the prroduct as of now.

OPPORTUNITIES.

1. Instead of Kesar Ambavadi if it is pulverised in a very fine powder

form it can be used in the milkshake.

2. This product can be sold through any food shoppee.

3. The product has a long shelf life so that in attractive packing it can be

presented to relatives.

4. Being a natural product, it can be replaced for toffees for children.

THREATS.

1. As the cost of production is less, there is threat of new competitors in

the business.
 Specifications of Layout

Working Shade 250 Sqm.

Security Cabin 10 Sqm.

Scrap Room 30 Sqm.

Toilet Block 10 Sqm.

Total Builtup area 300 Sqm.

 Financial Statements

UTILITIES (MONTHLY)

Electricity bill and Telephone Bill 5000

Advertisement 2000
Packaging 3000
Transportation 3000

Total Utility 13000

For 4 months 52000

Over Heads (Monthly)

Repair and Maintenance 1000

Misc. Expenses 500
Total Overheads 1500

For 4 Months 6000

 FIXED ASSET

Building 7,00,000
Plant and Machinery 4,00,000
Electric & fittings 30,000
Furniture and Fixtures 50,000
Preliminary Expenses 20,000

Total Fixed Asset 12,00,000

Working Capital

Raw Material 1,60,000

Salary & Wages 54,000
Electricity bill and Telephone Bill 20,000
Travelling and Other Expenses 7000
Stock of finished goods 1,50,000
Packing Material 12,000
Sundry Debtors 1,50,000
Provision for contingencies 10,000
Transportation 12,000
Advertisement 15,000
Fuel (LPG Gas) 10,000
Total 6,00,000

Note :- Working capital assumed to be for a period of 4 Months. Sundry

debtors will be outstanding for a period at 15 days.
 COST OF PROJECT

Fixed Asset 12,00,000/-

Working capital 1,50,000/-
13,50,000/-

SALARY STRUCTURE
(MONTHLY)

Designation No. of Employees Salary / Wages

Semi skilled employees 2 5000
Watchman 1 2500
Employees 3 6000

Total 13,500

CAPITAL STRUCTURE
(MONTHLY)

Own Capital (20 % of Project cost) 2,70,000

Term Loan from Bank (65% of fixed asset) 7,80,000
Financial Asst. From DIC (25% of fixed asset) 3,00,000
Total 13,50,000
 Interest calculation for term loan and its repayment schedule

1. Amount of loan : Rs. 7,80,000

2. Rate of interest : 12% pa
3. Period of repayment : 7 years
4. No. of Installment ( per quarter ) : 26
5. Moratorium Period : 6 Months
6. Amount payable per installment : Rs. 30,000

Quarter Opening Installment Outstanding Interest Interest Total

balance paid balance (per quarter) (for year) amount
payable
1 780000 --- 780000 23400 23400
2 780000 --- 780000 23400 23400
3 780000 30000 750000 23400 53400
4 750000 30000 720000 22500 92700 52500
5 720000 30000 690000 21600 51600
6 690000 30000 660000 20700 50700
7 660000 30000 630000 19800 49800
8 630000 30000 600000 18900 81000 48900
9 600000 30000 570000 18000 48000
10 570000 30000 540000 17100 47100
11 540000 30000 510000 16200 46200
12 510000 30000 480000 15300 66600 45300
13 480000 30000 450000 14400 44400
14 450000 30000 420000 13500 43500
15 420000 30000 390000 12600 42600
16 390000 30000 360000 11700 52200 41700
17 360000 30000 330000 10800 40800
18 330000 30000 300000 9900 39900
19 300000 30000 270000 9000 39000
20 270000 30000 240000 8100 37800 38100
21 240000 30000 210000 7200 37200
22 210000 30000 180000 6300 36300
23 180000 30000 150000 5400 35400
24 150000 30000 120000 4500 23400 34500
25 120000 30000 90000 3600 33600
26 90000 30000 60000 2700 32700
27 60000 30000 30000 1800 31800
28 30000 30000 ---- 900 9000 30900
Total 780000 362700 1142700
Note:- Rate of interest is subject to change
 Interest calculation for Financial Assistance
and its repayment schedule
1. Financial Assistance : Rs. 3,00,000
2. Rate of interest : 4% pa
3. Period of repayment : 7 years
4. Moratorium Period : 3 years
5. Amount payable per installment : Rs. 75,000

Year Opening Installment Outstanding Interest Total amount

Balance paid balance payable
1 300000 00 300000 12000 12000
2 300000 00 300000 12000 12000
3 300000 00 300000 12000 12000
4 300000 75000 225000 12000 87000
5 225000 75000 150000 9000 84000
6 150000 75000 75000 6000 81000
7 75000 75000 000 3000 78000
Total 300000 000 66000 366000

Total Interest

Year Term loan Financial Total

assistance
1 92700 12000 104700
2 81000 12000 93000
3 66600 12000 78600
4 52200 12000 64200
5 37800 9000 46800
6 23400 6000 29400
7 9000 3000 12000
Total 362700 66000 428700

COST OF PRODUCTION

Salary and Wages 54,000

Raw Material 1,60,000
Utility 52,000
Overhead 6,000
Depreciation Machine (20%) 80,000
Building (10%) 70,000
Furniture (20%) 10,000
Total 4,32,000

Cost of Production for 4 months 4,32,000

 BREAK EVEN POINT

1. Net sales : 7,20,000

2. Production : 4,32,000
3. Variable cost :
Raw material (100%) 1,60,000
Wages (80%) 43,200
Power and fuel (90%) 9,000
Utilities (90%) 46,800
Other manufacturing expenses (100%) 6,000
Interest on term loan 18,540
Selling and Administrative expenses (10%) 4,700
Total variable cost 2,88,240

4. Contribution = Sales – Variable cost

= 7,20,000 - 2,88,240
= 4,31,760

6. Fixed cost
Wages (20%) 10,800
Power and fuel (10%) 1,000
Interest on term loan (80%) 74,160
Selling and Administrative expenses (90%) 42,700
Depreciation (100%) 1,60,000
Utilities (10%) 5,200
Total fixed cost 2,93,460
 Fixed cost
BREAK EVEN POINT (In %) = X 100
Contribution

293460
= X 100
431760

= 67.97 %

Break Even point (in sales) = BEP in % x quantity produced

= 67.97 x 6000
= 4,07,820

Net profit
Return on investment = X 100
Investment

1,83,300
= X 100
13,50,000

= 13.58%
 Assumptions

While working he following assumptions are considered

• Working days are 100.

• Working capital assumed for 1 month and debtors are outstanding for

30 days.

• Working hours are 8 per day.

• Working day per month are 25 days.

 List of Machinery

1. Pulper machine 40,000

2. Mava machine 55,000

3. Mixing machine 30,000

4. Vadi machine 90,000

5. Drier machine 65,000

7. S.S. Trays/ S.S. containers/

Knifes/ Gloves etc. 20,000

Total 3,00,000
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INDEX
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Sr. No. Title

1. Project At Glance

2. Introduction

3. Location of Unit

4. Legal Formalities

5. Manufacturing Process

6. Advertising

7. SWOT Analysis

8. Specifications of Layout

9. Financial Statements

10. Break Even Point

11. Assumptions

12. List of Machinery

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