1

1.1

DEHYDRATED ONION
Introduction

Onion is one of the most important commercial vegetable crops grown in India.

Both

immature and mature bulbs are used as vegetable and condiment. It contains vitamin B and
a trace of vitamin C and also traces of iron and calcium. The outstanding characteristic of
onion is its pungency, which is due to a volatile oil known as allyl-propyl disulphide. Onions
compared with other fresh vegetable are relatively high in food energy, intermediate in
protein content and rich in calcium and ribonflavin.
Onion is dried / dehydrated to largely increase its shelf life. Dehydrated onion is used mainly
for making soup in Europe and USA.
1.2

Objective

The primary objective of the model report is to facilitate the entrepreneurs in understanding
the importance of setting up unit of dehydrated onion. This model report will serve as
guidance to the entrepreneurs on starting up such a new project and basic technical
knowledge for setting up such a facility.
1.3

Raw Material Availability

The production of onion in Madhya Pradesh is quite significant. The area and production of
onion in the state in different years is given in the table below:
Year
2003-04
2004-05
1.4

Area (Ha)
31,001.00
35,704.00

Prod (MT)
465,015.00
571,264.00

Suitable Location

The unit should be located near to the Maharashtra onion belt so that the availability of the
raw material would not be problem.
1.5

Project description

Applications

As condiment for cooking

For vegetable and instant food

Other application where true tomato color and flavor are required

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Capacity of the Project

The rated capacity of the project is 300 MT per annum.
Manufacturing process
Raw onions are collected from market at the most economic prices. The onions should be
ripe, matured and are kept in storage.

The storage rooms and godowns are airy, well

ventilated, dry and at low temperature. The cold storage is kept at 0-40C and RH 50 55%
The onions are then cleaned. Spray washers are used for cleaning the onions. The cleaned
onions are surface dried by hot air and then the onions are peeled. Abrasion peeling method
is used for peeling the onions. The peeled onions are then sliced by rotating blade slicers.
The sliced onions are then dried or dehydrated. Drying is done in tunnel drier.
1.6

Project component and cost

Major components of the projects and their costs are described in the table hereunder:
1.7

Land and Building

Particulars
LAND & BUILDING
Land
Land Development
Land Area
Building
Production Block
Main Production Area
Store cum packing room & Sales Counter
Contingencies
PLANT & MACHINERY
Plant and Machinery
Contingencies
MISCELLANEOUS FIXED ASSETS
Misc. Assets
Contingencies
PRE-OPERATIVE EXPENSES
Establishment
Professional Charges
Security Deposits
TOTAL

1.8

Unit

Qty
800

250.00

Total
41.75
2.00

800

500.00

4.00

SqM
SqM

500
150
10%

5,000.00
5,000.00

LS

1
20%

5000000

LS

1
20%

750,000

1
1
1

1,039,000
100,000
640,000

25.00
7.50
3.25
60.00
50.00
10.00
9.00
7.50
1.50
17.79
10.39
1.00
6.40
128.54

SqM

Cost/unit

Plant and Machinery

The total cost of the plant and machinery is Rs. 60 Lakhs.

1.9

Building

The main production block will cost around Rs. 35.75 lakhs.
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1.10 Miscellaneous Assets

A provision of Rs. 9 lakhs would take care of all the requirements.
1.11 Preliminary & Pre-operative Expenses
A provision of Rs. 17.79 lakhs would take care of pre-production expenses like
establishment, professional charges, security deposits etc.
1.12 Working capital assessment
ITEMS
STOCK OF RAW MATERIAL & PACKING
MATERIAL
SUNDRY DEBTORS
TOTAL
MARGIN
MPBF
INTEREST ON WC

Year 1

Year 3

3.11
22.50
25.61
6.40
19.21
2.11

Year 5

5.19
37.50
42.69
10.67
32.02
3.52

5.19
37.50
42.69
10.67
32.02
3.52

35.00%
25.00%

47.23
33.74

40.00%

53.98

100%

134.94

1.13 Means of finance

EQUITY CAPITAL
MOFPI SUBSIDY
TERM LOAN
FINANANCIAL INSTITUTIONS
-Payable half yearly Installments
TOTAL

25%

50.00

10

10.00%
5.40

1.14 Cash flow statement

PARTICULARS
SOURCES OF FUNDS
EQUITY CAPITAL
SUBSIDY
NET PROFIT
(INTEREST ADDED BACK)
DEPRECIATION
PRELIMINARY EXP.W/O
INCREASE IN TERM LOAN
INCREASE IN BANK
BORROWINGS-WC

Year 1

TOTAL

Year 3

Year 5

Year 7

0.96

29.74

26.96

21.57

8.13
2.54
-

8.13
2.54
-

8.13
2.54
-

8.13
2.54
-

19.21
30.84

8.00
48.42

37.64

32.25

1.15 Projected balance sheet

PARTICULARS
LIABILITIES
EQUITY CAPITAL
RESERVES & SURPLUS
TERM LOAN
BANK BORROWINGS-WC

Year 1

TOTAL

Project Profiles - MP Agros

47.23
27.19
48.58
19.21
142.20

Year 3
47.23
52.21
26.98
32.02
158.44

Year 5
47.23
96.49
5.38
32.02
181.12

Year 7
47.23
133.62
(0.00)
32.02
212.86

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1.16 Projected profit and loss account

Particulars
INCOME
EXPENDITURE
VARIABLE
FIXED
GROSS PROFIT
PROFIT BEFORE TAX
RETAINED PROFIT

Year 1
120.00
108.37
69.63
38.73
11.63
(6.55)
(6.55)

Year 3
200.00
159.59
106.79
52.80
40.41
22.71
22.71

Year 5
200.00
162.36
106.79
55.58
37.64
22.09
22.09

Year 7
200.00
167.75
109.66
58.10
32.25
18.05
18.05

1.17 Key indicators

NET PRESENT VALUE at current Inflation (Rs. in lakhs)
INTERNAL RATE OF RETURN %
AVERAGE DSCR
BREAK EVEN POINT %
PAY BACK PERIOD ( YEARS)

147.88
24.03
2.27
80.02
4.45

1.18 Manpower Requirement

PARTICULARS
SUPERVISORY STAFF
ADMN/MKTG OFFICER & ACCOUNTANT
PRODUCTION SUPERVISORS
ADMINISTRATIVE STAFF
MAINTENANCE SUPERVISOR
SKILLED WORKERS
SEMI-SKILLED LABOUR

NO.
3
2
1
6
10

1.19 Assumptions
Project & Financing
Contingencies on Building
Contingencies on Equipment
Term Loan
Rate of Interest on Term Loan
Subsidy Considered
Expected time of Installation
Moratorium
CAPACITY
Rated Capacity Per Annum
Number of Operational Days
Working Hours Per day
CAPACITY UTILIZATION
Year I
Year II
Year III
SALES PRICE
W S Price
OTHER EXPENSE
Commission
Marketing Expenses
POWER
Connected Load

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Subject to ceiling
Months
Months
90% of Installed capacity
DAYS
Hrs

TPA

10%
20%
40%
10%
25%
10
6
200
240
14
60%
75%
100%
1,00,000
10.0%
2.5%

HP

240

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DEPRICIATION AS PER COMPANYS ACT

BUILDING
PLANT & MACHINERY
MISC. FIXED ASSETS
LAND & SITE DEVELOPMENT
MAINTENANCE
BUILDING
PLANT & MACHINERY
MISC. FIXED ASSETS
LAND & SITE DEVELOPMENT

3.34%
10.34%
7.07%
1.63%
1.00%
3.00%
2.00%
1.00%

The actual cost of projects may deviate on change of any of the assumptions.

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