product project report on bio coal

AProduct Project Report

OnBio Coal

Prepared by

xxxxBBA Semester 5Guided by

Mr. Rakesh Pandya

Academic Year2013 -2014

Submitted toShri K.M. Savjani & K.K. Savjani B.B.A. / B.C.A. College

Veraval- 362265

Affiliated to

Saurashtra University, RajkotDeclaration

I, undersigned xxxx , a student of B.B.A. semester-5 hereby declare that the product project work presented in this project report is my own work and has been carried out under the supervision of Professor Rakesh Pandya of Shri K.M. Savjani B.B.A. College , Veraval

This work has not been previously submitted to any other University for any examination.

Date:

Place: Veraval

_________________

AcknowledgementI express my deepest sense of gratitude towards our college lecturer Prof. Rakesh Pandya who guided me in preparing project report and without whose support my report would have been very difficult to complete it.

I am very thankful & heartily grateful to our college staff members and my classmates who have given me a true guidance during project report.

And at last but not least, I would be thankful to all the helping hands who directly or indirectly contributed their efforts in the preparation of my report.Date: Place: Veraval

Preface

I have a great pleasure in presenting this product project report on BIO COAL, which is the practical study in BBA semester-5 of Saurashtra University.

After passing 12th standard I opted for BBA because I found a great scope to learn management techniques through this course and having studied since past 2 years in FY and SY, my task was rather fulfilled.

This year of my BBA semester-5 has given me an opportunity to plan a project for myself so that I can set up a real plant in near future.

Thus the project report presented by me helps me to develop entrepreneurship skills.

Sr. No.ParticularsPage No.

1Introduction to SSI

2Introduction to Product & Project

2Project at a Glance

3Objective for setting up business

4Size of Business Organisation

Form of Business Organisation

5Back ground of Owner

6Proposed Location & justification of Location

7Proposed capital structure

8Organisation structure

9Implementation of schedule

10Product detail

11Manufacturing process

12Raw material & Machinery requirement & Suppliers details

13Staff & Labour requirement & Cost

14Market Analysis

15Financial details of a project

16Projected sales for 5 years

17Projected final accounts for 5 years

18Projected break even analysis for 5 years

19Projected cash flow statement for 5 years

20Projected fund flow statement for 5 years

21Project advancement & future prospects

22Conclusion

23Bibliography

Introduction to SSIIn todays era where global competition exists, there is a need for professional management in every sector. Hence, the economists always say that the S.S.I. is the only base or pillar of the Indian Economy. Most of the businesses carried out in India are on a small scale.

The S.S.I. is enjoying the success of department economy because it is the main part of the economy. It also provides the platform and opportunity to the new entrepreneur. It provides the employment opportunities, raw material or inputs to large scale and middle scale industries.

S.S.I. is the base for the middle and large scale industries. It also gives a chance to new entrepreneurs to start a unit with a limited capital and it would ultimately play a major role in sharing the development of the company.

The S.S.I. makes the perfect entrepreneurs through experience and provides high quality of development towards personality, skill and sense.According to the Government of India The industries whose investment in the plant and machinery is up to Rs. 1 crore is termed as Small Scale Industry.In India, the literacy and education is now increasing at a faster rate than before and so now more people have now started moving towards the industry from agriculture. These people can get self-development and self-esteem with the help of S.S.I. only.Introduction to product & project

This project is called Biomass Briquetting Plant and is simple a process of converting agro waste and forestry waste into biomass briquettes / bio-coal. The biomass briquetting is the best renewable source of energy for healthy environment and economy. It is a complete eco-friendly green energy project.

We cannot destroy the wastage totally. So the concept of this project is to produce the material as a bio-coal which is made from the wastage which ultimately produces the energy.

Bio-coal is widely used in any type of thermal application like steam generation in boilers, heating purpose, dying process & gasification place to replace existing conventional fuel like coal, diesel, petrol, kerosene etc.

Bio-coal is eco-friendly, renewable energy fuel, economical cheaper contain high density. Government is providing tax benefit and incentives. It has easy mobility and transportation.

Bio-coal is solid fuel. The process of converting biomass to solid fuel is also non-polluting. No addition of any binder/ chemical is required so it is 100% natural.

Use of bio-coal is increasing day by day and has very demandable market due to its fuel cost saving and pollution free characteristics. Project at a Glance

Name of the unit:- Krishna bio-fuels Address of Registered Office :- Plot no:- 21Veraval GIDC Area

District: - Gir Somnath

Contact Number :- 02876400200 Email ID:- [email protected] Type of Firm :- Sole ownership Size of Firm :- Small Scale Industry Products:- Bio Coal SSI Registration :- Applied for registration at DCI Grand Logo:-

Slogan or punch line:- Transferring agricultural waste into energyObjective for setting up business

Every business which is setup has its own objectives. The objective of setting up the bio-coal business is as follows:- The main objective of the business is to earn profit. To reduce pollution: -Now a day, there is problem of pollution so to reduce pollution and for the social responsibility bio-coal producing is done as it is free from pollution. To discharge social responsibility: - It is Eco-friendly product so it is beneficial to the society.

To cover the market: -It is globally red alert for fossil fuel like petrol, kerosene, natural gas, LPG, Lignite etc. So in future also there will be demand for bio-coal. To cover the cost: - The payback period of project is near by 2 years so it is fast and beneficial.

Size & Form of Organisation

There are three size of business organisation. They are

(1) Small Scale Industries(2) Medium Scale Industries

(3) Large Scale Industries

1) Small Scale Industries: - SSI, whose investment in plant and machinery is up to 1 crore and having employees less than 50.

2) Medium Scale Industries: - MSI, whose investment in plant and machinery is more than 1 crore & up to about 100 crore and having employees more than 50 but less than 100.

3) Large Scale Industries: - LSI, whose investment in plant & machinery is more than 100 crore and having employees more than 100.

Krishna Bio-fuels is SSI Industry as its investment is Rs. 4350000 which is less than 1 crore and its employees is 11 which is less than 50. Forms of business organisation

When two or more person come together to work on common goal. Authority and responsibility are assigned among them so it is called organisation.

The forms of business organisation includes:-

a) Sole proprietorship

b) Partnership

c) Co-operative society

d) Joint stock company

Private company

Public company

Krishna bio-fuels are sole proprietorship as there is only one owner.Background of Owner

Name :- Rughani Krishna Prafulbhai Age:- 24 Address:- Rughani opp. SBI bankJunagadh road

Veraval - 362266

Contact No:- 4268921211 Email ID:- [email protected] Educational Qualification:- MBA with finance Experience:- 1 year business experience in family business Contribution in the unit:- Rs. 4350000 Responsibility in the firm:- marketing , finance & human resources managementProposed Location & Justification of Location

We establish our office in that area where we easily get all the facilities. Our proposed head quarter is: -Krishna Bio-fuels

Plot no: - 21

Veraval GIDC Area

City: - Veraval

District: - Gir Somnath

The location of the industry plays an important role in the success or failure of the organisation. Thus a good location may reduce the cost of production and distribution helps in evaluating either the competitive strength or the profit margin of the business. Therefore site of the industry should be selected very carefully.

Krishna Bio-fuels which will be situated in Veraval GIDC Area, enjoys the following facilities:-

Availability of Raw material: - The raw material like saw mill waste, ground nut shells are available at Veraval city and near to it like Mangrol, Una, Kodinar et Availability of electricity: - For bio-coal industry electricity is important factor. There is easily availability of electricity by the GEB.

Availability of Transportation Facility: - There is easily availability of road transportation facility services which is very important for bio-coal industries.

Availability of Labour: - Adequate amount of labour is available to our location as there are many small villages near by area.Proposed Capital Structure

Sr. NoParticularAmount

1.Owned Capital4350000

2.Borrowed Capital-

Total Capital Investment4350000

Organisation Structure

Owner

Agents Operator

Agents

Of

Machine

Labour

Labour(For putting Raw Material)

(For loading finished goods)Implementation of Schedule

Sr. No.ParticularsTime Period

1.Acquisition of Land1 Month

2.Construction of Building6 Months

3.Instalment of Machinery2 Days

4.Arrangement of power4 Days

5.SSI Registration1 Month

6.Procurement of Raw material1 Day

7.Recruitment 5 Days

8.Trial Production1 Month

Total9 Months & 12 Days

Product Details

Bio-coal is used in thermal application like steam generation in boiler, kiln, heating purpose, dying process and gasification fuel like coal, diesel, kerosene etc. It is an industrial product. It is eco-friendly, economically cheaper than other sources, renewable energy fuel, contain high density.

Its selling is done in tonnes. And its transforms wastage into energy. It is pollution free as there is no sulphur or any hazardous material. It has lower ash content 2 to 5 % and there is no fly ash when burn. It consist high burning efficiency due to the low moisture. It is easily transported.

Bio-coal has high specific density (1200kg/m3) and bulk density (800kg/m3) compared to 60 to 180kg/m3 of loose biomass.Manufacturing Process

Raw Material Stage:- Firstly Raw Material like Saw mill waste and ground nut shells are chopped by cutter chipper cum grinder, if the raw material size is larger than 25mmIt the raw material has high moisture it should be reduced by sun drying. If the moisture level is higher than 15% there would be a requirement of dryer. Putting raw material into machine: - Raw material in desired size is transported by pneumatic system to holding bins fixed over briquetting press. By screw conveyor, material is discharged from bin to the press.

Machine process: - Material is compressed by ram through taper bored die. By compression temperature is raised & lignin come to the surface and binds the material by its natural binder.

Output Stage: - Briquetting are formed in shape of log and it is automatically pushed through cooling line to the storage point.

Raw material & Machinery requirement & Suppliers details

The Raw Material which we are using for preparation of bio-coal is: - Ground Nut Shell

Saw DustThis raw material we are using because this two material are easily available near to our industry area.

Sr. No.Name of raw materialQuantity Rate (per 20kg)Total amount

1Ground Nut Shell 4050000kg5010125000

2Saw Dust450000kg501125000

Total4500000kg11250000

Machinery is main things for the production of bio-coal. One Jumbo 90 size bio-coal briquetting machine is needed which cost Rs. 1600000 whose finished product shape is cylindrical. And one loader machine of Rs. 100000.

Suppliers details for Machinery:-

Jay Khodiyar Machine Tools

Samrat Industrial Area

Street No: - 2

Opp. Kaneriya Oil Industries Gondal Road Rajkot - 360004 Suppliers details for Raw Material: - Ashok Saw MillNear Garden opp. Old court

Veraval 362265 Mangrol Oil Mill

GIDC Area

Mangrol

Hari Om EnterpriseOpp. Raj Industries

Una Rahul Industries

Plot 32 B

GIDC Area

KodinarEtc. Are the suppliers of the raw material founded by our agents.Staff & Labour requirement & Cost

Proper functioning of any manufacturing organisation is depending up to its staff & labours ability. So personnel are the valuable assets of an organisation. If planning and other management activities has been done properly but its implementation is not properly than that plan fails to achieve the goals of the organisation. Thus proper implementation of the organisational plan is possible with effective staff & labour only.

Thus for the fulfilment of staff & labour requirement properly we required two operators and 9 labours with two shifts.

The two shifts are planned for working i.e.; for production process.

6 am to 2 pm

3pm to 11 pm

The personnel policy of our firm is experienced or fresher persons will be invited for getting job of operator who is having education till 12th standard or who can understand to operate machinery. And labour can be get with help of agencies or by personal approach.The recruitment and selection for operators can be done by advertisement in local newspaper or agencies and after that application is collected, selection of application and then personal interview and then final selection. For labour personal approach to firm or through agencies can be done without any application only with personal interview.

It is equally necessary for any firm to maintain the employees in the firm. The facilities such as drinking water and proper shed for rest and proper working condition is provided for staff and labour. For addition incentives such as over time are given, monetary incentives in the festivals like diwali, vijaya dashami, janmashtami etc.The cost of Staff & Labour (includes cost of both shifts) are as follows:-

Sr. No.DesignationQuantityRateRs.Total Amount (monthly)Annual Amount

1Operator27000 (per month)14000168000

2Labour9125 (per day)33750405000

Total Amount47750573000

Market Analysis

Market analysis is the basic and most important part of marketing management. It is helpful in marketing the goods and services of the organisation. Marketing includes all the resources and set of activities necessary to direct & facilities the flow of goods & services from producer to customers. To stay in competitive market situation market analysis is necessary. Market analysis includes:- Market Segmentation: - A firm cannot satisfy the all need of a customer. So the company have to target a group of people for a particular product like our firm is segmenting the industries which need fuel for thermal application. Even in geographical segmentation like with in Gujarat or near Gujarat area. If the product is done in Gujarat and supply in Kerala is difficult in cost wise.

Pricing Policy: - Price is the amount of money charged for a product or service. Price decision of product is important for any business.

In our firm we are deciding price by addition of expenses of raw material, fixed expenses, various expenses like transportation cost, processing cost, electricity, labour cost, maintenance etc + profit is the pricing policy of the business. Channel of distribution: - The operational success of a company depends not only on how will it performs in terms of production and sales but also how well its entire channel of distribution workers. There are two types of channel of distribution: - Direct channel

Indirect channel

Our industry is producing the industrial product so our channel of distribution is direct channel from producer to customer.

Packing & Labelling: - To pack the product is any hard or soft cover is called packing. Our product bio-coal is an industrial product. Its selling is done in tonnes. So it is difficult to pack it. It is openly loaded into trucks. Label means the simple tag mark of the product. It gives each & every information about the product to the customers. But our product bio-coal is not packed or no need to label as the use and information about our product is already with the industries.

Competitors Analysis: - Competitors Analysis means analysis of each & every aspect related to competitor action & reactions. Providing the competition is very necessary for the survival of business in the market. For providing competition, the competitor analysis is necessary.Competitor analysis has been done by the Krishna Bio-fuels by comparing the quality and price and other facility provided by the competitors. The competitors of Krishna Bio-fuels are as follows:- Hari Om Enterprise

Rahul Industries

Akash Fuels

Promotional Activities: - Sales promotion consists of short term incentives to encourage purchase or sales of a product or service. Wherever advertising and personal selling offers reasons to buy a product or service. Sales promotion offers reasons to buy now.

Krishna Bio-fuels is not doing any promotion activities as it is an industrial product and it is cheaper fuel. So it is not needed.Financial Details of a project

Capital investment means investment in fixed assets as well as for running of business. Finance is needed from stage of starting till its shut down stage. The capital required in Krishna Bio-fuels is as under:- Fixed Capital InvestmentSr. No.AssetsInvestment (in Rs.)

1Land1000000

2Building300000

3Machinery of Briquetting plant1600000

4Loader Machine100000

5Furniture50000

6Electricity Connection Deposit200000

Total Fixed Capital Investment3250000

Working Capital Requirement (Monthly)Sr. No.ParticularsAmount

1Raw material937500

2Labour & staff cost47750

3Electricity72250

4Cash 42500

Total 1100000

Total Capital Investment on fixed capital & working capital (monthly) is Rs. 4350000.Projected Sales for 5 yearsProjected sales for 5 years, as per the estimation are as under:-

YearQuantityRate Amount

1st year4000 Tonnes350014000000

2nd year4500 tonnes350015750000

3rd year5000 tonnes350017500000

4th year7500 tonnes350026250000

5th year9500 tonnes350033250000

Projected Final Account for 5 years

1st Year

Projected Trading A/C of Krishna Bio-fuels

Dr.

For the year ended on 31st March 2019

Cr.ParticularsAmountParticularAmount

To Purchase (raw material)11250000By Sales14000000

To Wages405000By Closing Stock1750000

To Gross Profit4095000

1575000015750000

Projected Profit & Loss A/C of Krishna Bio-fuelsDr.


Cr.ParticularAmountParticularAmount

By Gross Profit4095000

To electricity cost867000

To salary168000

To depreciationlandbuildingmachineryloaderfurniture100000

30000

320000

20000

5000

To Administration, selling & distribution cost400000

To Repair & Maintainance cost50000

To Net Profit2135000

40950004095000

Projected Balance Sheet of Krishna Bio-fuels Dr.


Cr.

LiabilitiesAmountAssetsAmount

capital4350000Land 1000000-dep. @10% 100000900000

Building 300000-dep. @10% 30000270000

Profit2135000Machinery 1600000-dep. @20% 3200001280000

Creditor15000Loader 100000-dep. @20% 2000080000

Furniture 50000-dep. @ 10% 500045000

Electricity Connection Deposit200000

Closing Stock1750000

Debtors1500000

Cash & Bank balance475000

65000006500000

2nd yearProposed Trading A/C of Krishna Bio-fuels

Dr.


Cr.

ParticularsAmountParticularAmount

To opening stock1750000By Sales15750000

To Purchase11500000



1785000017850000

Projected Profit & Loss A/C of Krishna Bio-fuelsDr.


Cr.ParticularAmountparticularamount

By gross Profit4195000


To Salary168000By interest received on electricity dep.2000


30000

320000

20000

5000


To repair & Maintainance75000


41970004197000

Projected Balance Sheet of Krishna Bio-fuelsDr.

For the Year ended on 31st March 2020


Capital4350000Land 900000

-dep. @10% 100000800000

Building 270000

-dep. @10% 30000240000

Profit2187000Machinery 1280000

-dep. @20% 320000960000

Creditor63000Loader 80000

-dep. @20% 2000060000

Furniture 45000

-dep. @ 10% 500040000



Debtors1500000


66000006600000

3rd YearProjected Trading A/C of Krishna Bio-fuels

Dr.




To Purchase12000000



1890000018900000

Projected Profit & Loss A/C of Krishna Bio-fuels

Dr.







30000

320000

20000

5000




43970004397000

Projected Balance Sheet of Krishna Bio-fuels

Dr.




-dep. @10% 100000700000

Building 240000

-dep. @10% 30000210000


-dep. @20% 320000640000


-dep. @20% 2000040000

Furniture 40000

-dep. @ 10% 500035000



Debtors2000000


Land-21000000

67500006750000

4th Year

Projected Trading A/C of Krishna Bio-fuels

Dr.




To Purchase18750000



2730000027300000


Dr.







45000

480000

30000

5000




65445006544500


Dr.




-dep. @10% 100000600000

Building 210000

-dep. @10% 30000180000


-dep. @20% 320000320000

Creditor 18000Loader 40000

-dep. @20% 2000020000

Furniture 35000

-dep. @ 10% 500030000



Debtors2000000


Land-2 1000000

-dep. @10% 100000900000

Building -2 300000-dep. @10% 15000285000

Machinery-2 1600000

-dep. @ 20% 160000 1440000

Loader-2 100000

-dep. @20% 1000090000

77500007750000

5th YearProjected Trading A/C of Krishna Bio-fuels

Dr.




To Purchase25000000



3605000036050000


Dr.







60000

640000

40000

5000




92120009212000


Dr.




-dep. @10% 100000500000

Building 180000

-dep. @10% 30000150000


-dep. @20% 320000-


-dep. @20% 20000-

Furniture 30000

-dep. @ 10% 500025000



Debtors3000000


Land-2 900000

-dep. @10% 100000800000

Building -2 285000

-dep. @10% 30000255000

Machinery-2 1440000

-dep. @ 20% 320000 1120000

Loader-2 90000

-dep. @20% 2000070000

96000009600000

Projected Break Even Analysis for 5 years

Break even analysis is a way of finding the amount or units of sales by which the firm can reach to no profit no loss situation. The projected break even analysis of Krishna Bio-fuels is as follows:-Sales at BEP (in Rs.) =

F

1 - V

SWhere, F = Fixed Cost V = Variable Cost

S = Sales1st YearSales at BEP (in Rs.) =

1560000 1 - 12055000 14000000

= Rs. 112296462nd YearSales at BEP (in Rs.) =

1585000 1 - 12330000

15750000

= Rs. 72998023rd YearSales at BEP (in Rs.) =

1610000 1 - 12855000

17500000

= Rs. 60657534th YearSales at BEP (in Rs.) =

2029000 1 - 20491000

26250000

= Rs. 92489825th Year Sales at BEP (in Rs.) =

2348000 1 - 27477000

33250000

= Rs. 13524479Projected Cash Flow Statement for 5 years

1st Year

Particulars Amount Amount

Opening balance42500

Inflow :-

Sales12500000

Debtors1500000

Total Receipts14042500

Outflow :-

Purchase11185000

Creditor65000

Salary168000

Wages405000

Administration cost400000

Electricity cost867000

Repair & Maintainance cost50000

Total Payment13140000

Closing balance902500

2nd YearParticulars Amount Amount


Inflow :-

Sales14250000

Debtors1500000

Interest received on electricity deposit 2000


Outflow :-

Purchase11437000

Creditor63000

Salary168000

Wages405000






3rd Year

Particulars Amount Amount


Inflow :-

Sales15500000

Debtors2000000



Outflow :-

Purchase11937000

Creditor63000

Salary168000

Wages405000




Land -21000000



4th year Particulars Amount Amount


Inflow :-

Sales24250000

Debtors2000000



Outflow :-

Purchase18732000

Creditor18000

Salary252000

Wages607500




Machine -21600000

Loader-2100000

Building-2300000



5th yearParticular Amount Amount


Inflow :-

Sales30250000

Debtors3000000



Outflow :-

Purchase24927000

Creditor73000

Salary336000

Wages810000






Projected Fund Flow Statement for 5 years

1st YearParticularsAmount Amount

Source:-

Capital43500004350000

Application:-

Land1000000

Building300000

Machinery1600000

Loader100000

Furniture50000

Electricity connection deposit2000003250000

Working Capital (source - application)1100000

2nd YearParticulars Amount Amount

Sources:-

Capital4350000

Net profit21350006485000

Application:-

Land900000

Building270000

Machinery1280000

Loader80000

Furniture45000



3rd YearParticular Amount Amount

Sources:-

Capital4350000

Net profit23550006705000

Application:-

Land800000

Building240000

Machinery960000

Loader60000

Furniture40000

Land-21000000



4th YearParticular Amount Amount

Sources:-

Capital4350000

Net profit34000007750000

Application:-

Land700000

Building210000

Machinery640000

Loader40000

Furniture35000

Land-21000000

Machine -2 1600000

Loader-2100000

Building-2300000



5th YearParticularAmountAmount

Sources:-

Capital4350000

Net profit51950009545000

Application:-

Land600000

Building180000

Machinery320000

Loader20000

Furniture30000

Land-2900000

Machine -2 1440000

Loader-290000

Building-2285000



Projected Advancement & Future Prospects

From this project we have seen that with in five years we have covered our investment as well as we have expand our business. From the six year we will make the old machine to work until it can and ofter that we will buy new machine to replace the old machinery.There will be always need of bio-coal due to rising price of other fuel for thermal application. It has bright future.

In the future aspect we would try to make a chain of small scale industries in the different places so that we can cover different geographical area. Conclusion

From the product project report of bio-coal we can say that it is the most profitable business as within 5 years we already covered our investment and also we have expanded our business.In the future also there will be great demand of bio-coal from the thermal application industries as other fuels are becoming costly day by day.

Thus this project report helps the students to start their own business.BibliographyWebsites:- www.jkbioenergy.com www.jkbriquettingplant.com www.jaykhodiyargroup.comBooks:- Management Accountancy

B. S. Shah Prakashan

Documents

product project report on bio coal