NeeraThe Health Drink of Future

• Presented By• Dinesh Pratap Singh Rathore

[34066]• Narendra Choudhary

[34082]• Gaurav Chauhan [34128]

• Ravi Azad [34141]• Rohan Shukla [34146]

Summary • Neera is a sweet juice obtained by tapping unopened

inflorescence of the coconut palm.

Neera proposed to be the game

changer for coconut farmers

Neera can be promoted as Soft

Drink.

Processing Chain

Neera tapping done on coconut trees

Collected in vessels with anti fermenting chemicals

These vessels stored at 0-6 temperature

Pasteurization kills the germs

Centrifugation- To settles down the solid materials

and decolorizes the liquid to a colorless liquid known as Neera

Packaging and Shipping

Transported to Processing

Plant

Core Activities of the Neera Co-Operative:

• Distribution of saplings to the member farmers.• Collection of the sap from the co-operative members.• Processing and packaging of end product.• Marketing and distribution channel management.

Periphery Activities includes:

• Maintaining the staff for carrying out the activities• Capital Management• General Management• Encouraging more farmers to join the cooperative

Product Productive working day in a month

Daily Production(packets)

Quantity per packet

Price Revenue per day

Neera 25 12500 300 ml 25 312500By product

25 1000 1 kg 150 150000

Monthly P&LParticular Amount(Rs.)Sales revenue per month from Neera 78,12,500Sales revenue per month for by product 37,50,000Total sales revenue per month 1,15,62,500Sales cost & taxes 34,68,750Sales realisation per month 80,93,750Monthly expenses 64,75,000EBIDTA per month 16,18,750Depreciation 1,00,000Interest 1,26,479PBT per month 14,92,270

Basic Payments to farmers per month

5000

Monthly patronage Per farmer

2732

Total Income of Farmer per month

7732

Income of Coop. before Tax 1219589

Income of Coop. After Tax

1092923

Retention of Profit after Patronage Disbursement

546462

Assumptions:

• Area of Operation: Palakkad• Neera Plant capacity: 5000 litres • Operation efficiency of plant : 75%• Members are the coconut farmers (10 sapling to be provided to every month)• 4-5 Cluster of farmers with 20-30 farmers in one farmer group. (A total of

200 farmers)• Price of the product is same as the other players. (As the operations are

limited by the government licences)

ItemNormalized Cost

Units Cost per item Quantity Total Cost (Rs)1 Infrastructure       69,72,500   Cost of Land for Production Floor per ft sq 1000 2,500 25,00,000   Land for Storage Go Down per ft sq 1000 1000 10,00,000   Building Construction - Production Floor per ft sq 575 2,500 14,37,500   Building Construction - Storage Go Down per ft sq 575 1000 5,75,000   Misc Supplies and Material lump sum 100,000 1 100,000 2 Plant Machinery       65,35,000  Gravity separator . per machine 600000 2, 500 lph, 10-12000 rpm 12,00,000  Quick Chiller per machine 120000 2 2,40,000   Pasteurization Unit per machine 15,00,000 1 50,000   Measurement instrument per machine 15,000 3 45,000   Storage Tanks per tank 100,000 2 2,00,000   Diesel Generator  per machine 10,00,000 1 10,00,000  Packing Machine per machine 2600000 1 26,00,000   Laboratory Equipments Lump Sum 15,00,000 1 12,00,0003 Labor       12,40,000   CEO annual salary 360,000 1 360,000   Director of Marketing, Production annual salary 300,000 1 300,000   Director of Finance annual salary 180,000 1 180,000   Unskilled Laborers annual salary 80,000 5 4,00,0004 Recurring Charges       4,30,000   Electricity Rs / HP 22 5,000 1,10,000   Water cubic meters 700 100 70,000   Maintenance lump sum 100,000 1 100,000   Annual Insurance cost lump sum 100,000 1 100,000   Other Misc Expenses lump sum 50,000 1 50,000 5 TOTAL       1,51,77,500

Capital Structure and Investment

Total external financing would come from multiple sources

1) Land cost not eligible for loan from local bank

2) Regional bank indicated up to 75% loan could be achieved for machinery, construction

3) 25% government subsidy quoted by local bank, 33% subsidy available for ST, SC, and Women enterprises

4) Working Capital based on raw material required for 8 day production cycle, includes facility management cost

Source: Cost Assumptions, Local Region Bank Office Input

?C FINANCING – EXTERNAL INVESTMENT

Required External Investment (lakh Rs)

Actual project costs and required investment finalized during FPO set-up and business set-up

PRELIMINARY

Item Project Cost Local Farmers NABARD / Govt Funds

Project Cost 135.07 20 (14.8 %) 115.07(85.2%)

Working Capital4 16.7 - 8.35 (50%)

TOTAL 151.775 20(13.17%)

123.42(81.31%)

Performance as Economic Enterprise• Membership level

• Rate of growth in surplus generated• Rate of growth in net income per member• Rate of growth in output

• Cooperative level• Rate of growth in assets• Return on investment• Financial ratios• Coverage of range of member needs• Reduction in cost of services

Performance as Social Institution• Members Active Participation

• Regularity of election• Regularity of meetings of board• Percentage of women/youth members who attend meetings• Response to members’ grievances• Existence of members’ groups• Rate of growth of membership

Performance as Social Institution• Combating exploitation & Raising Income

• Timely and regular payments for produce• Coverage of weaker members• Membership skill improvement program• Responsiveness to feedback of members• Inspections and audits• Representation of different sections in decision making bodies• Investment in community development

Performance as Social Institution• Harmony in relations within the structure

• Unbiased ruling in case of disputes• Respect for the representatives of elected bodies• Frequency of meetings to sort out problems• Confidence in the board• Feeling of interdependence

• Ethics & Integrity• Approval of plans in general body meetings• Regular social audit• Evolution & circulation of a code of ethics• Openness in dealings and business transactions• Freedom of access to members to records/documents