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    A

    PRODUCT PROJECT REPORT

    ONBISCUIT

    PREPARED BY:

    HARIA NIRJA

    ACADEMIC YEAR: 2009-2010

    GUIDED BY

    PROF. GAURAV MEHTA

    FOR PARTIAL FULFILLMENT OF T.Y.B.B.A.

    SUBMITTED TO:

    SAURASHTRA UNIVERSITY

    RAJKOT.

    SHRI G.H. GOSRANI COM. (ENG. MED.) and

    SHRI D. D. NAGDA B.B.A. COLLEGE,

    JAMNAGAR

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    DECLARATION

    The undersigned MISS. NIRJA HARIA a student of T.Y.B.B.A. hereby

    places the submission of PRODUCT PROJECT REPORTon BISCUIT under the in

    charge of Prof. Gaurav mehta of Shri D.D. Nagda B.B.A. College, Jamnagar.

    I, undersigned declare that this PRODUCT PROJECT REPORT is Biscuit is

    not previously submitted to any other college.

    Place: Jamnagar HARIA NIRJA

    Date: TYBBA

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    ACKNOWLEDGEMENT

    In preparation of this report, I have received encouragement and

    support from various persons. I would like to express heart full thanks and

    gratitude to all these persons.

    I am thankful to Prof. Gaurav Mehta for guiding me for this project report.

    I am thankful to Small Scale Industrial Department, Jamnagar, which helped

    me a lot to provide information and other reports for reference. I would like to

    thank my friends who have been with me through out the preparation of this

    project and from whom I received support, cooperation and encouragement

    for preparation of my Product Project Report.

    Thanking you.

    Place: Jamnagar Nirja Haria

    Date: TYBBA

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    PREFACE

    In todays world, the managerial ability is so demanded in the company.

    For doing the better managerial work, the person must have the knowledge of

    management. This knowledge is not only based on theoretical but also on

    practical. In short for being a good manager a person must have both the

    knowledge.

    I am extremely happy to submit this product project report on small-scale

    industries as per the syllabus of T.Y. B.B.A of Saurashtra University for

    particularly introducing the subject Entrepreneurship & Management of Small

    Scale Business.

    The main objective of this project report is to make students learn about

    various factors that should be taken into consideration before setting up an

    industry. In other words, it is purely, Entrepreneurship development & training

    for the establishment of small-scale industry.

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    CONTENTS

    NO. PARTICULARS

    PAGE

    NO.

    1. Declaration 1

    2. Acknowledgement 2

    3. Preface 3

    4. Project at a glance 6

    5. Details about partners 7

    6. Proposed location justification 8

    7. Product details and market potential

    1. Products 11

    2. Market potential 12

    8.

    Production capacity & Manufacturing

    process

    1.Implementation schedule 14

    9. Technical Aspects

    1. Raw materials used

    2.Manufacturing process 17

    3.Energy conservation 19

    4.Pollution control 19

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    10. Financial details

    1. Land & Building 21

    2. Plant & Machinery 22

    1. Fixed capital 23

    2. Working capital 24

    3.Total capital investment 24

    11.Financial provision & Sources of finance

    25

    1.Sources of finance 25

    12. Sales, Cost of production & Profitability 26

    1. Raw Material 27

    2. Salary & Wages 28

    3. Depreciation 29

    4. Administrative expenses 30

    5. Selling & distribution exp. 30

    13. Profitability analysis 32

    14. Break even point 33

    15. Future plans 35

    16. Conclusion 36

    17. Bibliography 37

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    PROJECTAT AGLANCE

    1. Name of the Unit: - L N M Biscuits

    2. Constitution: - Partnership Firm3. Registered Office Address: - Sur. No 168

    At-Moti Banugar

    Tal: Jamnagar

    Dist: Jamnagar

    4. Factory Location: - Same As Above

    5. Corresponding Address: - Same As Above

    6. Telephone Number: - 0288-2552625, 0288-2565856

    7. Promoters Of The Unit: - Rita Davda, Mr. Karan Davda

    8. Category of Industry/

    Sector: - Biscuit Processing

    9. Government Formalities:-

    A) Ssi No: - Applied For

    B) Subsidy Regi: - Applied For

    C) Noc from Pollution Board: - Applied for

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    DETAILS ABOUT PARTNERS

    Promoters bio-data:

    Name : Rita Davda

    Age : 21 yrs

    Address : 3, Patel Colony

    Pandit Nehru Road,

    Jamnagar

    Educational

    Qualification : Bachelor of Business Administration

    Experience : Fresher

    Miss. Rita Davda is a fresher and has just completed her graduation in BBA

    with finance and marketing as specialized subjects. She does not have

    experience in business but is capable of handling the business

    Name : Mr. Karan Davda

    Age : 26 yrs

    Address : D/H Essar House

    Swastik Society

    Jamnagar

    Educational

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    Qualifications: BBA, MBA in marketing

    Experience : 6 months

    PROPOSED LOCATION

    JUSTIFICATION

    Location of the plant:

    The promoters have acquired a plot for its factory location at Moti Banugar in

    Jamnagar district. The National Highway joining Rajkot road is very nearer

    from the factory location. Industrially developed city commercial capital of

    Saurashtra. In short, the industrial location of the proposed project is most

    suitable and nearness of market.

    ADVANTAGES OF THE PROPOSED LOCATION:

    1. Monetary benefits:

    As the industrial location of the Moti Banugar is declared as industrially

    incentive area, under Gujarat State capital investment scheme, 2001-2010

    the unit is eligible for following benefit/incentives

    Capital interest location of the Moti Banugar is declared as industrially

    incentive area, under Gujarat state capital investment scheme, 2001-2010

    the unit is eligible for following benefits/incentives

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    The unit shall enjoy income tax benefit available to units in the backward

    area.

    2. Nearness to market:

    The product proposed is mainly marketed in all the cities and towns of India.

    As the industrial location of the projectis situated near Rajkot which is

    situated in the centre of market and is connected by road, rail and air with all

    the part of India, the unit shall be able to market its products in Gujarat and

    neighboring states easily and conveniently.

    3. Labour:

    In the proposed unit 40 workers and office staff will be employed. As Rajkot is

    at a short distance from the factory location, the unit shall get skilled labour

    from Rajkot as well as Jamnagar and unskilled labour would be available from

    local area.

    4. Infrastructural facilities:

    As the factory location is situated in the industrial area, which is developed

    and still developing, the unit will get basic infrastructure facilities like

    electricity, water, communication facilities, banking facilities, transportation

    etc.

    5. Transportation:

    The national highway joining Rajkot road is very nearer from the factory

    location. As the industrial location of the project is situated near Rajkot

    which is situated in the centre of market and is connected by road, rail and

    air with all the part of India.

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    INTRODUCTION

    Bakery industry in India is the largest of the food industries with an annual

    turnover of about Rs. 3000 Crores. India is the second largest producer of

    biscuits after USA. The biscuit industry in India comprises of organized and un-

    organized sectors. Bread and Biscuits form the major baked foods accounting

    for over 80% of total bakery products produced in the country. The quantities

    of bread and biscuits produced are more or less the same. However, value of

    biscuits is more than bread.

    The industry has traditionally been and largely continues to be in the

    unorganized sector contributing over 70% of the total production. Bakery

    products once considered as sick mans diet have now become essential food

    items of the vast majority of population. Though bakery industry in India has

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    been in existence since long, real fillip came only in the later part of 20 th

    century. The contributing factors were urbanization, resulting in increased

    demand for ready to eat products at reasonable costs etc.

    PRODUCTS

    Chocolate biscuit

    Butter biscuit

    Almond biscuit

    Pista biscuit

    Marie biscuit

    Pineapple cream biscuit Orange cream biscuit

    Bourbon biscuit

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    MARKET POTENTIAL

    The bakery units are unevenly spread among States. These are mainly

    concentrated in the States of Maharashtra, West Bengal, Andhra Pradesh,

    Karnataka and Uttar Pradesh. Industrially advanced States like Maharashtra

    and West Bengal have very large number of bakery units. The per capita

    consumption is very high in industrialized States like Maharashtra and West

    Bengal. The Biscuits are becoming quite popular in rural areas as well. Nearly

    55% of the biscuits are consumed by rural sector. The higher consumption of

    biscuits in rural area could be attributed to its position as a snack, longer shelf

    life and better taste which is liked by different cross sections of population.

    There is no marketing problem as every shop is a market for biscuits.

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    Bakery products still remain the cheapest of the processed ready to eat

    products in the country. The production of Bakery products has increased from

    5.19 lakh tones in 1975 to 18.95 lakh tones in 1990 recording four-fold

    increase in 15 years. Among the bakery products, biscuits occupy an

    important place as they contribute over 33% of total products processed. Over

    79% of the biscuits are produced by small scale sector consisting of both

    factory and non-factory units. The growth rate for bakery products is

    estimated at an average of 9.8% per annum. The demand for bakery products

    will continue to increase in future. Encouraging trends in consumption of

    bakery products by population of lower and middle income groups indicate

    vast scope for consideration of nutritional enrichment of bakery products.

    Basis and Presumptions:

    1. The Project Profile has been prepared on the basis of Single Shift of 8

    hours a day and 25-working days in a month at 75% efficiency.

    2. It is presumed that in the first year, the capacity utilization will be 70%

    followed by 85% in the second year with 100% in the subsequent years.

    3. The rate of salaries and wages for skilled workers and others are on the

    basis of the minimum rates in the State of Gujarat

    4. Interest rate for the fixed and working capital has been taken @ 15% on

    an average whether financed by the Bankers or Financial Institutions.

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    5. The margin money required is the minimum 30% of the total capital

    investment.

    6. The rental value for the accommodation of office, workshop and other

    covered area has been taken @ Rs 20 per Sq.mtr.

    7. The rates in respect of machinery, equipment and raw materials are

    those prevailing at the time of preparation of the Project Profile and are

    likely to vary from place to place and supplier to supplier. When a tailor

    made project profile is prepared, necessary changes are to be made.

    8. The pay back period may be 5-years after the initial gestation period.

    9. The gestation period in implementation of the project may be to the

    tune of 6 to 9 months which includes making all arrangements,

    completion of all formalities, market surveys and tie-ups etc.

    Implementation Schedule:

    The implementation of the project includes various jobs/exercises such as

    procurement of technical know-how, market surveys and tie-ups, preparation

    of project report, selection of site, registration, financing of project,

    procurement of machinery and raw materials etc., recruitment of staff,

    erection/ commissioning of machines, trial production and commercial

    production etc. In order to efficiently and successfully implement the project in

    the shortest period, simultaneous exercises are carried out. Project

    implementation will take a period of 8 months from the date of approval of the

    scheme.

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    Breakup of activities with relative time for each activity is shown

    below:

    ACTIVITYPERIOD ( IN

    MONTHS )

    Scheme Preparation & approval 0-1

    SSI Provisional Registration 1-2

    Sanction of loan 2-5

    Clearance from State Pollution Board 3-4

    Placement of order for machinery and

    delivery4-5

    Installation of machines 6-7

    Power connection 6-7

    Trial run 7-8

    Commencement of production 9 onwards

    TECHNICAL ASPECTS

    Raw materials used:

    Raw Material is the most important thing in the production department. Raw

    Material is necessary for production of goods in every manufacturing

    company. The company is using the raw materials as follows:

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    Wheat Flour (Maida)

    Sugar

    Yeast

    Salt

    Vanaspati / Refined Edible Oil

    Soya Fiber

    Gluten

    Preservatives

    Emulsifiers

    Improver and Vitamins

    Process Of Manufacture:

    The main product of the unit wafer biscuits can be manufactured after

    obtaining raw materials like Maida, starch, soda, salt, color, preservatives,

    Vanaspati, sugar, flavors etc. which are easily available in local markets.

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    The calculated amount of maida, starch, vanaspati, water etc. is mixed in a

    mixer to form paste. The paste so formed will be poured into pre-heated

    mould to bake wafer sheet. The other Ingredients like sugar, Vanaspati, colors,

    essence are mixed in a planetary mixer to form cream. The cream so prepared

    will be applied on the sheets to form sandwich. Thereafter the sandwich will be

    cut into biscuits and packed in pouches.

    PRODUCTION CAPACITY

    Installed capacity:-

    No.Name of theproduct

    Monthlyproductionunits rate Qty.

    Totalamount

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    1 Slice biscuit 12,195 10 12,195 1,21,950

    2 Round biscuit 6,098 12 6,098 73,176

    3 Cream biscuit 6,707 15 6,707 80,484

    Total 25,0002,75,598

    Installed capacity 100%

    Utilized capacity:-

    No.Name of theproduct

    Monthlyproductionunits

    rate Qty.Totalamount

    1 Slice biscuit 10,000 10 10,000 1,00,000

    2 Round biscuit 5,000 12 5,000 60,000

    3 Cream biscuit 5,500 15 5,500 82,500

    Total 20,500 2,42,500

    Utilized capacity 82%

    Table no. 2 production capacities

    Energy Conservation:

    The following steps may be taken for the conservation of energy:

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    Machinery and equipment parts, which are revolving and reciprocating

    should be properly, lubricated from time to time with suitable lubricant

    oil.

    Lay-out of the unit should be in such a way that no back tracking of

    material is there.

    All electric switches may be turned off, when not required.

    The entire transmission belt will be tightened before starting the work is

    wherever applicable.

    As far as possible, Solar Energy and day light will be used keeping all the

    other lights off.

    As far as possible, inductive load of motor will be reduced and high

    power factor will be used with the aid of capacitors of appropriate sizes.

    Pollution Control:

    This industry may involve pollution to some extent for which State Pollution

    Control Board has to be approached.

    The minimum height of shed will be maintained with exhaust fans installed

    for removing decongestion, proper ventilation, removal of cokes, fumes etc.

    Quality control (ISO 9000)

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    Quality Control and Standards: As per FPO requirements. There is an all

    round realization at every level that quality production of international

    standard is the watchword for survival now. Consequently, the processor,

    small or big, has started taking steps to improve quality right from the

    selection of the raw material and that of the ingredients. Side by side steps

    have also been taken by them to upgrade the hygienic and sanitary conditions

    of the workers, plant and machinery so as to ensure quality of the finished

    product.

    The Agricultural and Processed Food Products Export Development

    Authority (APEDA) gives subsidy to upgrade the laboratory facilities etc. It has

    also brought out a book entitled ISO 9000 on The Food Industry a Practical

    Guide. It deals with the entire spectrum of Quality Control, e.g.

    documentation, installation, certification of quality management system etc.

    FINANCIAL DETAILS OF THE PROJECT

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    1. Land :-

    Area: - JamnagarTotal cost of land: -15, 00,000

    Sr.no. Particulars

    Squaremeter rate Total value

    1 Open land 3,000 500 15,00,000

    Total 15,00,000

    Table no. - 3 land

    2. Building:-

    Particulars

    Area( in sq.feet)

    Rate( per sq.feet)

    Total cost ofconstruction

    shed 1,000 800 8,00,000

    factory 1,500 300 4,50,000

    go down 200 200 40,000

    Office-room 250 300 75,000

    compound 50 200 10,000

    Total 13,75,000

    Table no. - 4 building

    3. Plant & machinery:-

    Sl. No.DESCRIPTION

    Amt. ( in

    lakh)

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    1.

    Manual Biscuit Machine (6 Plates) (Including

    Creaming, Cutting and Support Tables,

    Capacity creamwafer 25-30 Kg./Hrs., 15 KW) 175000

    2.

    Butter mixing machine (7-30 Kg./Hrs. Butter,

    2 KW) 200000

    3.

    Sugar Grinding Machine(30-50 Kg./Hrs., 2

    KW) 55000

    4.

    Planetary Mixer (3 Speed system, steel body,

    capacity25 Kg. /Hrs. 2 KW.) 140000

    5. Sealing (Packaging) Machine(1 KW) 80000

    6. Working table with S.S./ Aluminum top 60000

    7. Weighing Balance platformType 100000

    8.

    Aluminum vessels, Mats ups, Mugs, ladle,

    spoons, gloves, etc. 90000

    9.

    Electrification and InstallationCharges @ 10%

    of cost of Plant and Machinery 140000

    10. Cost of Office furniture and Equipment etc

    TOTAL 1150000

    Table no. - 5 plant & machinery

    4. Furniture & office equipment:-

    No. Particulars Amt.

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    1 Air-conditioner 45,000

    2 Furniture 2,00,000

    3 Computer 32,000

    4 Fax 10,000

    5 Stationary 5,000

    Total 2,92,000

    Table no. -6 furniture & office equipment

    5. Average total fixed capital & fixed cost of

    project:-

    No. Particulars Amount

    1 Land 15,00,000

    2 Building 13,75,000

    3 Plant & machinery 11,50,000

    4 Furniture & office equipment 2,92,000

    5 Preliminary expenses 30,000

    Total 43,47,000

    Table no. -7 average total fixed cost & fixed cost of project

    6. Working capital requirement :-

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    No. Particulars Amt (Rs.) Duration

    1 Stock of raw materials 60,000 1 month

    2 Work-in-progress 50,000 15 days

    3 Bills receivable 55,000 30 days

    4 Current expenses 50,000 30 days

    Total 2,15,000

    Table no.-8 working capital requirement

    7. Total cost of the project:-

    No. Particulars Amount(Rs.)

    1 Total fixed cost 43,47,000

    2 Total working capital for 1 month 2,15,000

    Total 45,62,000

    Table no: - 9 total cost of project

    FINANCIAL PROVISION AND SOURCES OFFINANCE

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    1. Financial provision:-

    Sr.

    no.

    Details AmountGSFC

    loan

    Bank

    loan

    Own

    capital

    Subsidy

    1Land

    15,00,00

    04,67,500

    10,32,50

    0

    2Building

    13,75,00

    01,10,000 2,00,000

    10,65,00

    0

    3Machinery

    11,50,00

    01,00,000

    10,00,00

    050,000 23,000

    4Furniture

    2,92,000 2,92,000

    5 Prelim.exp. 2,00,000 2,00,000

    6Contingency

    2,00,000 2,00,000

    7Working

    capital p.a.2,65,000 2,65,000

    Total6,77,50

    0

    12,00,0

    00

    31,04,5

    0023,000

    Table no. -10 financial provisions

    2. Details of source of finance:-

    No. ParticularsInteres

    t rateAmount

    1 GSFC loan 18% 6,77,500

    1 Bank (S.B.I.) 15% 12,00,000

    2 Contribution 5% 31,04,500

    4 Subsidy 23,000

    Table no. -11 details of sources of finance

    SALES, COST OF PODUCTION &

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    PROFITABILITY OF THE PRODUCT

    1. Details of sales:-

    No. Particulars Rate Quantit

    y

    Amount

    1 Slice biscuit 10 10,000 1,00,000

    2 Round biscuit 12 4,500 54,000

    3 Cream biscuit 15 5,000 75,000Total sales per

    month 2,29,000

    Total sales per year

    27,48,00

    0

    Note: -The Details of sales given here are taken on average basis.

    Table no. -12 details of sales

    2. Raw materials:-

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    No. ParticularsQty.Kg.

    Rateper kg.

    Amount(monthly)

    1 Wheat flour (Maida) 1600 20 32,000

    2 Sugar 100 34 3,400

    3 Yeast 20 70 1,400

    4 Salt 5 20 100

    5Vanaspati/ refined edibleoil 15 52 780

    6 Soya fiber 2 75 1507 Gluten 2 50 100

    8 Improver & vitamins 6 500 3,000

    Total 1750 40,930

    Table no. -13 raw materials

    3. Salary & wages:-

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    No. Particulars No. salar

    y

    Amount

    1. Factory manager 1 9000 9000

    1Supervisor cum

    chemist/entrepreneur2 5,000 10,000

    2 Skilled worker 4 4,000 16,000

    3 Unskilled worker 8 3,000 24000

    4 Salesman 5 4,000 20,000

    5.Technician, Lab

    Assistant

    3 5000 15000

    Total 94,000

    Table no. -14 salary & wages

    4. Interest (per annum):-

    No. Particular AmountInterest(p.a.)

    1 Bank (S.B.I.) 12,00,000 1,80,000

    2 GSFC loan 6,77,500 1,21,950

    Total 18,77,500 3,01,950

    Table no. 15 interests

    5. Electricity :-

    57 H.P. *0.75*300*8 Hours*0.70 Capacity *1.8 = Rs:-12,927

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    6. Rent, taxes & insurance:-

    The amt. of rent, taxes and insurance will be of 1, 50,000 (approx.)

    7. Repairs & maintenance:-

    The amt. of the repairing &maintenance will be of 1, 00,000 (approx.)

    8. Depreciation :-

    Sr.

    no. Details Amount

    Dep.

    Rate Total

    1 Building 13,75,000 10% 1,37,500

    2 Machinery 11,50,000 15% 1,72,500

    Total 3,10,000

    Table no. 16- depreciation

    9. Administration expenses:-

    No. Particulars Amount

    1 Accounting exp. 6,000

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    2 Printing & stationary exp. 1,500

    3 Postage 1,500

    4 Other 5,000

    Total 14,000

    Table no. - 17 administrative exp.

    10. Selling & distribution exp. (per month)

    No. Particulars Amount

    1 Delivery van exp. 20,000

    2 Advertisement exp. 10,000

    3 Commission to salesman 5,000

    Total 35,000

    Table no. -18 selling & distribution exp.

    11. Total cost of production

    No. Particulars Amount (p.a.)

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    1 Raw materials 4,91,160

    2 Salaries & wages 94,000

    3 Interest 3,01,950

    4 Electricity 1,55,124

    5 Rent, taxes & insurance 1,50,000

    6 Repairs & maintenance 1,00,000

    7 Depreciation 3,10,000

    8 Administrative exp. 1,68,000

    9 Selling & distribution exp. 4,20,000

    Total 21,90,234

    Table no. 19 total working requirement

    PROFITABILITY ANALYSIS

    Particulars Amount

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    Total Annual Sales

    LESS:- Cost of Production

    27,48,000

    21,90,234

    Total profit 5,57,766

    Table no. -20 profitability analysis

    BREAK EVEN ANALYSIS

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    Break Even point is the situation or the level at which the level of the

    production of the unit is such that all its costs are covered fully and there is no

    profit. This is also known as No Profit, No Loss Situation.

    BEP Analysis is must for every unit because it is to be represented to the

    banks while applying for loans. A low break-even point is preferable because it

    shows that a firm can over its cost within a short period of time.

    BEP

    Total Fixed Cost = 43, 47,000

    Contribution = Fixed Cost + Profit

    = 43, 47,000 + 5, 57,766

    = 49, 04,766

    There fore, BEP

    = 88.63%

    BEP = fixed cost x sales

    Contribution

    43, 47,000 x 27, 48,000

    34

    Fixed Cost

    ContributionX 100=

    Fixed Cost

    ContributionX 100=

    43, 47,000

    49, 04,766X 100=

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    =49, 04,766

    = 24, 35,549

    Analysis:

    Thus from the above calculation we can find out time period in whichBEP can be achieved.

    Total Sales Time Period

    27, 48,000 --------12 Months

    24, 35,549 ------- ?

    Time Period required for Achieving BEP: -

    FUTURE PLANS

    35

    24, 35,549 x 12

    27, 48,000=

    = 10.64 months

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    The firm L & M biscuits Pvt. Ltd. has come up with the same strategies

    and hopes and would decide to receive the best results in the economy as

    soon as possible. The firm is on the upstream to its production cycle and will

    produce best results in the future.

    The main aim of the firm is to achieve a fresh start in the market and to

    achieve maximum satisfaction level of the customer. The firm will look aside to

    find a competitive mark in the society and to stay alive for a long period of

    time.

    There is scope for the diversification with the same production capacity and

    machineries. Therefore future plans for the firm are:

    Cookies

    Wafers

    Pudding

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    CONCLUSION

    The entire study has been conducted to enlighten all the possibility of the

    proposed investment proposal.

    Under this report the dedicated efforts are made to cover to the maximum

    extent all the possible factors. These include market potential for the product;

    location of the plant, rising of the finance from various sources, profitability

    analysis etc.

    These factors have long lasting effect on the survival and growth of the

    business under the competition.

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    BIBLIOGRAPHY

    DESAI VASANT, PROJECT MANAGEMENT, SECOND EDITION, 1999,

    HIMALAYA PUBLISHING HOUSE

    www.nsicindia.com

    www.niit.org

    www.google.com(images)

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    http://www.nsicindia.com/http://www.niit.org/http://www.nsicindia.com/http://www.niit.org/
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