A PROJECT REPORT ON ENTREPRENEURSHIP DEVELOPMENT

(Manufacturing of Caffeine from Tea waste)

SUBMITTED TO:MR.SAMANNAY BORUAH

Lect. Of BUSINESSDEPARTMENT OF BUSINESS ADDMINISTRATION, NERIM,GHY-28

SUBMITTED BY:GAUTOM SONOWAL

MBA 2nd SEM ROLL NO. 91 SESSION:-2011-13

ACCKNOWLADGMENT
AT THE VERY FRONT PAGE,I WOULD LIKE TO MY RESPECT AND SINCEREST TO Mr.SAMMANOY BORUAH FACULTY OF THE DEPT. OF MASTER OF BUSINESS ADMINISTRATION,NERIM,GHY FOR GIVINGME THE OPPORTUNITY TO DO THIS PROJECT AND ALL ENCOURAGEMENT. FINALLY , I ALSO THNKFUL TO ALL THOSE WHO HELPED ME AT ANYTIME DIRECTLYOR INDIRECTLY DURING THOSE TIME. THANKS ONCE AGAIN TO ALL

EXECUTIVE SUMMARY
1. NAME OF THE UNIT :-M/S LA2 CAFFEINE MANUFACTURERS 2. TYPE OF THE BUSINESS 3. LOCATION 4. LEGAL STATUS :- Manufacturing of Caffeine :- CHALAKOTOKY, DULIAJAN :-Sole proprietorship

5. NAME OF THE PRORITORSHIP:- GAUTOM SONOWAL 6. PROFILE OF THE PROMOTER:-The promoter of the project Sri Gautom Sonowal ,Age-22, is from Duliajan town, P.O.-Duliajan, Dist.Dibrugarh,Pin-786602(ASOM).He has completed his graduation in Bachelor of Business Administration and currently persuing MBA course from NERIM,GUWAHATI. 7. PRODUCT 8. TARGET MARKET :-Caffeine from tea waste :-Pharmaceuticals

9. CONCEPTION OF PRODUCT IDEA:- The promoter has conceived the idea of manufacturing of Caffeine based on the huge availability of raw materials nearby the area and the growing demand of Caffeine. 10. MARKET APPRAISAL:-The target for the product include the pharmaceuticals. 11.TECHNICAL APPRAISAL:-Raw Materials for the project proposed to purchased mainly from the Tea Factories and near by the local area.

TABLE OF CONTENT

ACKNOWLADGEMENT EXECUTIVE SUMMARY PROJECT AT A GLANCE INTRODUCTION MARKET SURVEY MANUFACTURING PROCESS FINANCIAL ANALYSIS PROJECT APPRAISAL MARKET APPRAISAL. TECHNICAL APPRAISAL MANAGERIAL APPRAISAL FINANCIAL APPRAISAL ANNEXURES BIBLIOGRAPHY..

INTRODUCTION
Entrepreneurs are the seeds of industrial development. An entrepreneur is a person who organises and manages a business undertaking and assumes risk for the sake of profit. Entrepreneurship development through promotion of micro, tiny and small enterprise has been accepted in our country as a strategy for achieving the twin objectives of solving the problems of unemployment and also rapid industrialisation. The north-east region has a vast potential for developing industries in various area . Just required only a little efficiency to do something with the great interest of mind.

Caffeine is widely used in pharmaceuticals. At present manufacturing capacity for caffeine in India is not sufficient to meet the growing demand. Caffeine has an excellent export potential. So keeping in view large scale increase in the demand of caffeine, the setting up of new plants is strongly recommended to meet the additional requirement. Regional research laboratory, Jorhat has developed a process for the production of caffeine from tea waste. The production of tea is estimated to be well over 640 ml. kg per year.In the processing of tea, 3-4 percent of the total amount comes out tea waste, which is being wasted at present by burning or as manure.Now tea waste is being utilized for manufature of caffeine.It contains 3-4 percent of caffeine.So manufactured from this tea waste the import of the material could be stopped.

USAGES
Caffeine is widely used in pharmaceuticals as free base and in mixtures, such as citrated caffeine and benzoate. Caffeine is very useful as stimulant of central nervous system and as a diudratic.it gives definite relief from fatigue and neuralgia. It is also used in headeches originating from eye strains. It is also used in cola beverages. It also a cardiac stimulate. Its most important psychological action is that on the kidney causing an increased secretion of urine. Caffeine is exerted in the urine unchanged but chiefly as dimethyl xanthine, methyle xathine, and xathine.There are still more applications of caffeine as medicine.

Considering the market demand for the product and to generate employment in this area, the promoter proposes to set up such a unit of manufacturing of Caffeine at Duliajan,Dist. Dibrugarh,pin-786602(Asom) In the name of M/S LA2 CAFFEINE MANUFACTURERS

PROPERTIES OF CAFFEINE
Caffeine or therine C4H10N4O2 occurs in tea,coffee,gurana,kola nuts and in small amounts in cacao. Caffeine is a white powder. It is soluble in boiling water and forms hydrates. The hydrates looses its water completely above 100 degree celsius. It is odoureless and has a very bitter taste.

MARKET SURVEY
Caffeine and its compound has been shown to have many uses in pharmaceutical and food industry. Caffeine is manufactured in India from tea waste abundance from the tea gardens of Darjeeling, Jalpaiguri and Assam.. As the production of soft drink increases the demand of caffeine is also likely to increase. The consumption of caffeine is estimated to be 90 tonnes per year whereas only 60 tonnes are produced at the present.

PROJECT AT GLANCE
1. NAME OF THE UNIT :-M/S DJ CAFFEINE MANUFACTURERS 2. CONSTITUTION :-SOLE PROPRIETORSHIP

3. NAME OF THE PROMOTER:- SRI GAUTOM SONOWAL 4. PROPOSEDD LOCATION :- CHALAKOTOKY GAON P.O.-DULIAJAN DIST.-DIBRUGARH PIN-786602

5. TOTAL PROJECT COST:TOTAL FIXED CAPITAL Land Building Plant and machinery Other fixed assets Miscellaneous Total Own 2,00,000 2,99,000 20,000 1000 5,20,000

TOTAL WORKING CAPITAL/MONTH

Raw material Salary and wages Utilities and overheads Total Working capital for 3 months Total 1,15,000 41,200 27,800 1,84,000 1,83,000 x 3 5,52,000

TOTAL CAPITAL INVESTMENT Total fixed capital =5,20,000 W.C. for 3 months=5,52,000 Total =10,72,000
6. MEANACE OF FINANCE:- SELF 7. RETURN ON INVESTMENT :- 58.32% 8. RETURN ON SALE :- 22.5% 9. BEP :- 51%

MANAGEMENT APPRAISAL
The unit will be managed by the promoter himself. He is technically qualified for this purpose. The other manpower will be appointed as follows -

Manager Chemists Plant supervisor Skilled workers Unskilled labor Accountant TOTAL

1 2 1 10 20 1 35

FINANCIAL APPRAISAL: TOTAL PROJECT COST= 10,70,000.00 (TEN LAKH SEVENTY THOUSAND ONLY) THE TOTAL PROJECT COST WILL BE COMPOSED OF SELF FINANCE.

PLANT CAPACITY = 0.14 Tones/day

=42.00 tones/annum

POLLUTION CONTROL:THERE IS NO MAJOR POLLUTION PROBLEM ASSOCIATED WITH THIS INDUSTRY EXCEPT FOR DISPOSAL OF WASTE WHICH SHOULDBE MANAGED APPROPRIATELY. THE ENTERPRISE IS ALSO ALLOWED BY THE POLLUTION CONTROL BORAD.

BASIC AND PRESUMPTION:-.

THE UNIT WILL BE REMAIN OPEN FOR 8(EIGHT)HOURS A DAY FOR 300 WORKING DAYS IN A CALENDER YEAR. THE PRICE OF THE RAW MATERIALS AND EQUIPTMENT IS AS PER PRESENT PRICE.

MANAGERIAL APPRAISAL:The promoter of this proposed project unit is Sri Gautom Sonowal, S/O- Mr. Dilip Kr. Sonowal. He is an educated youth. He has completed his Bachelor in Business Administration, and also persuing the MBA degree from NERIM, GHY .He is quite capable of managing of unit.

MANUFACTURING PROCESS
Caffeine is manufactured by extraction from tea or coffee.Commercially caffeine is manufactured from tea dust, sweepings and sticks.The process of manufacturing caffeine is shown below in a flow chart----

1000 gms of tea waste is taken in a vessel and 8000 gms of water is added,then

300 gms of lime water is added and the mixture is boiled for about 2 hrs,and then allow it to cool

The slurry is filtered and the filtrate is extracted with benzene in a counter current liquide extractor

The benzene is separated and distilled so that benzene is fully recovered and the crude caffeine is left as residue.

The amount of caffeine is 25 gms. Of 99% purity.

FINANCIAL ANLYSIS
1. PLANT ECONOMY
Rated plant capacity 00.14 tones/day 42.00 tones/annum CAFFEINE FROM TEA WASTE

2. LAND AND BUILDING Land(800 Sqm) Building Own 2,00,000

3. PLANT AND MACHINERY

Solid-liquid extractor 10 tons of total material Battery of strorage tanks 6 tanks each of tons capacity Condenser Extract storage tank of 6 tons Electric hoist 2 tons 40 lift Piping, fittings and valves etc. Instrumentation Steam boiler Installation and eraction Condenser Lime feed hopper Tea waste feed hopper 1.8 tonnes Total 30,000 20,000 5000 4000 20,000 25,000 25,000 40,000 30,000 50,000 30,000 20,000 2,99,000

4. OTHER FIXED ASSETS

Office equipment, furniture and other accessories Total 20,000 20,000

5. TOTAL FIXED CAPITAL

Land Building Plant and machinery Other fixed assets Miscellaneous Total Own 2,00,000 2,99,000 20,000 1000 5,20,000

WORKING CAPITAL REQUIREMENT/MONTH

6. RAW MATERIALS
Tea waste 500 @ 100 per ton Lime 100 @ 300 per ton Process water Benrol 10 tons@ 3000 Total 50,000 30,000 5000 30,000 1,15,000

7. SALARY AND WAGES/MONTH

Manager Chemists Plant supervisor Skilled workers Unskilled labor Accountant Plus perks @ 20% p.a. Total 1 no. 2 no. 1 no. 4 no. 8 no. 1 no. Total 4300 5000 3800 8000 12000 1900 35000 7000 41200

8. UTILTIES AND OVERHEADS

Power consumption 2000 Kwatt @ Rs 2.4 per Kwatt per hr Stationary,postage,telephone etc. Publicity and sales promotion Packing and other miscellaneous expenses Total 4800 3000 10,000 10,000 27800

9. TOTAL WORKING CAPITAL/MONTH

Raw material Salary and wages Utilities and overheads Total Working capital for 3 months Total 1,15,000 41,200 27,800 1,84,000 1,83,000 x 3 5,52,000

10. TOTAL CAPITAL INVESTMENT

Total fixed capital =5,20,000 W.C. for 3 months=5,52,000 Total =10,72,000

11.COST OF PRODUCTION
Working capital 1,84,000x12 Depreciation on Plant & Machinery @ 10% Depreciation on building @ 10% Total 22,08,000 29,900 20,000 22,57,900

12.TURNOVER/PER MONTH
42,OOO X 55.00=23,10,000

13. PROFITABILITY
Sales revenue =23,10,000 Cost of production = 22,57,900 Total = 52,100 (per month)

Profit per year=52,100 x 12 =6,25,200

14. PROJECTED RATIOS

Percentage return on sales turnover = profit X 100 Sales revenue = 52100 X 100 23, 10,000 = 2.25 X 100 = 22.5

Rate of return on total capital investment

= profit per year X 100 Total investment = 6,25,200 X 100 1072000 = 58.32%

15. TOTAL FIXED COST

Depreciation on Plant and Machinery =29,900 Depreciation on Building Electricity Total fixed cost =20,000 = 4800 = 54,700

B.E.P .=
=

Fixed cost Fixed cost+ profit 54700 54700+52100

= =

54700 /106800 51%

ANNEXURE-I Electric Hoist 2 tons 20 lift Lime feed hopper 0.9 tons Tea waste feed hopper 1.8 tonnes Solid-liquid extractor 8 tons of total material Battery storage tanks 4 tanks each of tons capacity Condenser Battery pump 200 gpm Broth feed tank 8 tons Extract storage tank 4 tons Liquid-Liquid extraction column Evaporator Intermediate Benzene 4 tons Main storage tank tank for Benzene 40 tons Benzene overhead feed tank 1 ton Benzene feed pump 10 gpm Steam boiler Other machinery Installation and Erection @ 10% Total 20,000 15,000 15,000 48,000 60,000 25,000 15,000 17,000 8,000 35,000 45,000 10,000 35,000 10,000 7,000 50,000 20,000 38,560 7,18,000

ANNEXURE II

SUPPLIER OF CHEMICALS
1. M/S Batra Chemicals Pvt. Ltd. 1/1/41, Singh sabha road, S. Mandi Kolkatta-203142 2. North-East chemicals & Fertilizers West bypass,tarajan, Jorhat-785001

SUPPLIERS OF PLANT AND MACHINERIES

1.M/S Mirch-mirex Ltd. Ismain building, Dr. Dadabhai Naroji Road, Kolkatta-1 2.Singh & Songs Ltd. Lahoti, Jorhat-785001.

ANNEXURE-III

To THE REGIONAL DIRECTOR, POLLUTION CONTROL BOARD.GUWAHATI. Subject: Application For the no objection certificate. Dated-xx.xx.xx Sir, With reference to the subject cited above I have the honour to inform you that i want to set up a manufacturing of Caffeine powder from tea waste plant at Chalakotoky Gaon in Duliajan . As per my research I have come to know that it wont have any detrimental affect in the environment. So I kindly request you to grant me a no objection certificate (NOC) for the plant. I will be thankful to you if you grant me the certificate. Yours faithfully, Gautom Sonowal Chalakotoky gaon, Duliajan(Asom)