Detailed Project Report

COCONUT MILK PROCESSING UNIT

Prepared By
National Institute of Food Technology Entrepreneurship and Management-Thanjavur

Pudukkottai Road, Thanjavur Tamil Nadu

Ministry of food Processing Industries, Government of India

Website: http://www.niftem.ac.in

Email: pmfme@iifpt.edu.in

1
 Contents
Sr. No. Topic Page
1 Project at a Glance 3
2 General Overview and Introduction 4
3 Health Benefits and Nutritional Information 7
4 Cultivation, Bearing & Post-Harvest Management 9
5 Processing & Value Addition 12
6 Manufacturing process of the coconut milk 13
7 Location of the Proposed Project and Land 16
8 Market Demand and Supply for coconut Related Products 16
9 Marketing Strategy for coconut Products 17
10 Detailed Project Assumptions 17
11 Project Costing Sheet 19
12 Installed Capacity of the Manufacturing Unit 21
13 Expenditure, Revenue & Profitability analysis 23
14 Repayment Schedule 24
15 Assets Depreciation 25
16 Financial Assessment 26
17 Breakeven Analysis 27
18 Raw Material Requirements 28
19 Plant Layout 30
20 Machine Suppliers Data 31
21 Limitations of the DPR 31
22 Guidelines for the Entrepreneurs 32

2
 1. THE PROJECT AT A GLANCE
The Project at a Glance
1 Name of the Project Coconut Milk
2 Name of the entrepreneur/FPO/SHG/Cooperative
3 Nature of proposed project Proprietorship/Company/
Partnership
4 Registered office
5 Project site/location
6 Names of Partner (if partnership)
7 No of shareholders (if company/FPC)
8 Technical advisor
9 Marketing advisor/partners

60 MT/annum (55, 65, 75,85, 95

10 Proposed project capacity and 100% capacity utilization in
the 2nd, 3rd, 4th, 5th, 6th 7 7th
year onwards respectively
11 Raw materials matured coconut
12 Major product outputs Coconut Milk
13 Total project cost (Lakhs) 24.77
Land development, building & civil construction 6
Machinery and equipments 13
Utilities (Power & water facilities) 0.6
Miscellaneous fixed assets 0.8
Pre-operative expenses 0.60
Contingencies 1.20
Working capital margin 2.57
14 Working capital Management (In Lakhs)
Second Year 7.72
Third Year 9.12
Fourth Year 12.44
15 Means of Finance
Subsidy grant by MoFPI (max 10 lakhs) 8.67
Promoter’s contribution (min 20%) 4.95
Term loan % 11.15
16 Debt-equity ratio 1.60 : 1
17 Profit after Depreciation, Interest & Tax
2nd year 7.74
3rd year 9.16
4th year 11.95

3
 18 Average DSCR 2.18
Benefit Cost Ratio 1.112837864
Term Loan Payment 7 Years with 1 year grace period
Pay Back Period for investment 2 Years

The benefit to cost ratio is less.

As we ae having two major by products also.
A). Coconut Water – selling price 10 rs. * approx. 750 bottles. = 7500 profit per day
B). Coconut powder – selling price 200 rs. * approx. 160 Kgs = 32000 profit per day.

2. GENERAL OVERVIEW AND INTRODUCTION

2.1 INTRODUCTION

 A single coconut palm may yield 100 coconuts annually, and each fruit requires a year
to fully ripen. Mature coconuts, ovoid or ellipsoid in shape, 300–450 mm (12–18 inches)
in length and 150–200 mm (6–8 inches) in diameter, have a thick fibrous husk
surrounding the familiar single-seeded nut of commerce.

 For centuries, the coconut – fruit of the coconut palm (Cocos nucifera L.) – has been a
great source of versatility. Providing food, oil, milk and medicine, countries around the
world have been producing coconut products for income. It has probably been used by
humans for centuries.

 Today, it is a common visual of dreamy relaxation and increasingly, a symbol of health.

From the Asian tropics to South America, the coconut has certainly better market.
Today, the leading producers in the world are Indonesia, the Philippines and India.
Together, these countries account for over 75% of total coconut production globally.

4
 More recently, the coconut has become a common visual of dreamy relaxation and
increasingly, a symbol of health. In 2015, the global packaged coconut water market was
estimated to be more than $1 billion, with the United States and Brazil leading in
 consumption and growth. It is also interesting to note that ready to drink (RTD) coconut
milk beverages are growing in markets like China and the United States.

 The sales of coconut milk beverages in the United States have grown by three times
over the past four years to 60 million Litres.

2.2 ORIGIN, DISTRIBUTION AND PRODUCTION OF COCONUT

 The origin of coconut palm is the subject of controversy. Indian mythology credits the
creation of palm with its crown of leafy fronds to the sage Vishwamitra, to prop up his
friend King Trishanku when the latter was literally thrown out of heaven by Indra for his
misdeeds.

 The coconut (the fruit of the palm Cocos nucifera) is the Swiss Army knife of the plant
kingdom; in one neat package it provides a high-calorie food, potable water, fiber that
can be spun into rope, and a hard shell that can be turned into charcoal. What’s more,
until it is needed for some other purpose, it serves as a handy flotation device.

 No wonder people from ancient Austronesians to Captain Bligh pitched a few coconuts
aboard before setting sail. (The mutiny of the Bounty is supposed to have been triggered
by Bligh’s harsh punishment of the theft of coconuts from the ship’s store.)

 So extensively is the history of the coconut interwoven with the history of people
traveling that Kenneth M. Olsen, PhD, a plant evolutionary biologist at Washington
University in St. Louis, didn’t expect to find much geographical structure to coconut

5
 genetics when he and his colleagues set out to examine the DNA of more than 1300
coconuts from all over the world.

2.3 VARIETIES

 There are mainly two types of Coconuts trees–tall and dwarf. The tall grows up to 50-90
feet and starts bearing fruits after 7-10 years.

 Whereas, the dwarf grows up to 20-60 feet and begins fruiting after 4-5 years. Dwarf
varieties have an average life span of 40-50 years, while tall varieties live up to 90-100
years.

 Also, the tall varieties are cross-pollinated, and dwarf ones are self-pollinated.

 There are some hybrid varieties of coconuts as well, combining features of both. Tall x
Dwarf (TxD), Dwarf x Tall (DxT) are two main hybrids.

2.3.1 Important variety of Coconuts

Different Types of Coconuts That Grow Around the World:

 Malayan Yellow Dwarf Coconuts.
 Fiji Dwarf.
 Golden Malay.
 King Coconut.
 West Coast Tall Coconut.
 Macapuno Coconut.
 Panama Tall.
 Maypan Coconut.

6
 VHC1 Coconut
 East Coast Tall
 Tiptur Tall
 Dwarf Orange
 Green Dwarf

3. HEALTH BENEFITS AND NUTRITIONAL INFORMATION

HEALTH BENEFITS OF COCONUT.

 Studies have shown that the coconut kernel have a potential anti-diabetic activity useful
for preventing diabetes.

 At the same time, coconut milk can possibly have other anti-diabetic activities,
specifically the reversal of carbohydrate metabolizing enzymes, and the reversal of
pancreatic damage by an amino acid called arginine.

 Another study further shows that coconut milk contains a protein which displays
immune stimulatory activity.

 This protein has the potential to increase the levels of red and white blood cells,
platelets, neutrophils, monocytes, eosinophil, B-lymphocytes, T-lymphocytes and Hb,
all of which are important components in building the body’s immune system.

 Various researchers have exploited the health benefits of the tropical palm over the
years.

7
  It has got many health promoting applications. The traditional uses of coconut in
treatment of various diseases as listed below:
Diarrheal, Antipyretic, kidney inflammation, Diuretics, gonorrhoea treatment, Urogenital
inflammation caused by Trichomonas vaginitis, Antipyretic, Oral contraceptive, Treatment
of fever and malaria, Treatment of changes in the menstrual cycle. Recent researchers have
reported several properties of coconut including Anti-atherosclerotic effect, Antibacterial,
antifungal and antiviral effect, Anticaries effect, Antidiabetic effect, Antidermatophytic,
Antihypertensive effect, Anti-inflammatory effect, Antineoplastic effect, Antioxidant effect,
Antiparasitic effect, Antithrombotic effect, Cardio protective effect, Hepatoprotective effect,
Hypolipidemic effect, in reducing the risks of abdominal obesity, Renal protective effect,
etc.

3.1 NUTRITIONAL INFORMATION

Nutrition information table: values per 100g of edible portion

Nutrient Value % RDA Nutrient Value % RDA

Major Nutrients Major Nutrients
Energy 354 kcal 18% Fat 33.5 g 167%
Carbohydrates 15.2 g 12% Cholesterol 0 mg 0%
Protein 3.3 g 6% Dietary Fibre 9g 24%
Vitamins Minerals
Folate 26 pg 6.5% Sodium 20 mg 1.0%
Niacin 0.54 mg 3.0% Potassium 356 mg 7.5%
Pantothenic acid 0.30 mg 6.0% Calcium 14 mg 1.4%
Pyridoxine 0.05 mg 4.0% Copper 0.44 mg 48.0%
Riboflavin 0.02 mg 1.5% Iron 2.43 mg 30.0%
Thiamine 0.07 mg 5.5% Magnesium 32 mg 8.0%
Vitamin C 3.3 mg 5.5% Manganese 1.5 mg 65.0%
Vitamin A 0 IU 0.0% Phosphorus 113 mg 16.0%

8
Vitamin E 0.24 mg 2.0% Selenium 10.1 pg 18.0%
Vitamin K 0.2 pg <1.0% Zinc 1.1 mg 10.0%

4. CULTIVATION, BEARING & POST HARVEST MANAGEMENT

4.1 CULTIVATION & BEARING

Agro - climatic requirements Coconut is essentially a tropical plant but has been
found to grow under varying agro climatic conditions. The mean annual temperature for
optimum growth and maximum yield is stated to be 270C with a diurnal variation of 60C to
70C and relative humidity more than 60 %. The coconut palm thrives well up to an altitude
of 600 m above MSL. The coconut palm thrives well under an evenly distributed annual
rainfall ranging from 1000 mm to 3000 mm. However, a well distributed rainfall of about
2000 mm is the ideal rainfall for proper growth and higher yield.

Soil The coconut palm can tolerate wide range of soil conditions. But the palm does show
certain growth preferences. A variety of factors such as drainage, soil depth, soil fertility
and layout of the land has great influence on the growth of the palm. The major soil types
that support coconut in India are laterite, alluvial, red sandy loam, coastal sandy and
reclaimed soils with a pH ranging from 5.2 to 8.0.

Selection of Site Soil with a minimum depth of 1.2m and fairly good water holding
capacity is preferred for coconut cultivation. Shallow soils with underlying hard rock, low
lying areas subjected to water stagnation and clayey soils should be avoided. Proper supply
of moisture either through well distributed rainfall or irrigation and sufficient drainage are
essential for coconut.

9
Preparation of land Size of the pit depends on the soil type and water table. In laterite
soils large pits of the size 1.2m x 1.2m x 1.2 m may be dug and filled up with loose soil,
powdered cow dung and ash up to a depth of 60 cm before planting. In loamy soils, pits of
size 1m x 1m x 1m filled with top soil to height of 50 cm is recommended. While filling the
pits, two layers of coconut husk can be arranged at the bottom of the pit with concave
surface facing upwards for moisture conservation. After arranging each layer, BHC 10% DP
should be sprinkled on the husk to prevent termite attack. In laterite soils, common salt @ 2
kg per pit may be applied, six months prior, on the floor of the pit to soften the hard pans.

Spacing in general, square system of planting with a spacing of 7.5m x 7.5m is

recommended for coconut. This will accommodate 177 palms per hectare. However,
spacing of 7.5 to 10 m is practiced in various coconut growing regions of the country.

Planting Material & Planting Vigorous seedlings which are one-year-old, having
minimum of six leaves and girth of 10 cm at the collar level should be selected for planting
in the main field. Early splitting of leaves in the seedlings could be a criterion for selecting
good seedlings. However, 18 - 24-month-old seedlings are preferred for planting in water
logged areas. Planting the seedlings during May with the onset of pre-monsoon rain is ideal.

Varieties The tall varieties are extensively grown throughout India while dwarf is grown
mainly for parent material in hybrid seed production and for tender coconuts. The tall
varieties generally grown along the west coast is called West Coast Tall and along the east
coast is called East Coast Tall. Benaulim is the tall variety grown in Goa and coastal
Maharashtra. Laccadive Ordinary, Laccadive Micro, Tiptur Tall, Kappadam, Komadan and
Andaman Ordinary are some of the tall varieties. Chow hat Dwarf Orange, Chowghat Dwarf
Yellow, Chow hat Dwarf Green, Malayan Yellow Dwarf and Malayan Orange Dwarf are
some of the dwarf varieties grown in India. Ganga bondam is a semi tall type grown in
certain tracts of Andhra Pradesh.

10
Maintenance of Coconut Garden Regular manuring from the first year of planting is
essential to ensure good vegetative growth, early flowering and bearing and high yield.
Organic manure at the rate of 30 kg per palm per year may be applied with the onset of
south west monsoon when soil moisture content is high. Different forms of organic manures
like compost, farmyard manure, bonemeal, fish meal, neem cake, groundnut cake, gingelly
cake, etc. could be used for this purpose. Green manure crops like sunhemp, glyricidia,
dhaincha, etc. could also be grown as intercrops to incorporate in the coconut basins later.

Irrigation Coconut responds well to summer irrigation i.e., summer irrigation @ 40 litres
per palm per week will increase the yield of nuts by 50%. Under basin irrigation, 200 litres
per palm once in four days will be beneficial. In areas where water is scarce drip irrigation
system can be adopted. The quantity of water recommended for drip irrigation in coconut is
66 per cent of the open pan evaporation.

Coconut based cropping system: - to maximise the utilisation of soil and sunlight in
the coconut garden, intercropping can be adopted with a variety of crops like pineapple,
banana, elephant foot yam, groundnut, chillies, sweet potato, tapioca etc. up to 8-10 years.
During 10-22 years of age of the palms, crop like colocasia which can tolerate shade can be
cultivated. In older plantations, perennials like cocoa, pepper, cinnamon, clove and nutmeg
can be grown as mixed crops along with intercrops. Mixed farming by raising fodder
grasses such as hybrid napier or guinea grass along with leguminous fodder crops in coconut
garden has been found to be profitable which can support rearing of milch animals.

4.2 HARVESTING & POST HARVEST MANAGREMENT

 Coconuts are harvested at varying intervals in a year. The frequency differs in different
areas depending upon the yield of the trees.
 In well maintained and high yielding gardens, bunches are produced regularly and
harvesting is done once a month.

11
  Coconuts become mature in about 12 months after the opening of the spathe. It is the
ripe coconut which is the source of major coconut products.
 Nuts which are eleven months old give fiber of good quality and can be harvested in the
tracts where green husks are required for the manufacture of coiffure.
 Economic life of the coconut palm is about 60 years.

5. PROCESSING & VALUE ADDITION: -

 Edible Products of Coconut include Coconut water, coconut milk, coconut cream,
coconut oil, candy, desiccated coconut powder, coconut chutney, coconut laddoo &
bites, lemonade, Coconut burfi, Coconut milk drink, Coconut milk powder, Coconut

12
 yogurt, Coconut cheese, Coconut crisps, Coconut chips, coconut flour, coconut, jam,
coconut mayonnaise, etc. apart from these, tender coconut (snow ball – minimally
processed coconut) and Neera are high in demand. Coconut honey, coconut jiggery and
coconut sugar are high value products for niche market.

6. MANUFACTURING PROCESS OF COCONUT MILK.

The following processing method/sequence to be taken care while processing the coconut
milk.

Coconut milk refers to the oil-protein-water emulsions obtained by squeezing fresh grated
coconut kernel. The undiluted and diluted are referred to as coconut milk and concentrated
form as coconut cream. Coconut milk is obtained by extraction of fresh coconut wet
gratings with/without water. This is an instant product, which can either be used
directly/diluted with water to make various preparations such as fish & meat dishes, curries,
sweets, deserts, puddings, cocktails, cakes, cookies, coconut jam, ice creams etc. It can also
be used in the manufacture of bakery products and for flavouring food stuffs. Preserved
forms of coconut milk such as canned cream or milk and dehydrated whole milk are now
available in many coconut growing countries. Commercial production of these products has
been promoted in the Philippines, Thailand, Indonesia, Western Samoa, Sri Lanka and
Malaysia and to some extent in India. Indonesia is the leading exporter followed by Sri
Lanka, Thailand and Philippines.
Coconut milk and cream is produced from 10-13 months old mature coconuts when
the kernel is hard and thick. They are natural oil-in-water emulsions extracted from the
mature coconut kernel. The difference between coconut milk and cream is the amount of fat
in the products. It is important to categorize coconut milk products according to fat content.
The Codex Standards for Aqueous coconut products states that coconut milk should contain

13
at least 10% fat, 2.7% non-fat solids, and 12.7-25.3% total solids. While coconut cream
should contain at least 20% fat, 5.4% non-fat solids and 25.4-37.3% total solids.
To extract coconut milk for industrial manufacturing purposes, mature coconuts go
through deshelling and paring. Pieces of kernels are then sent into industrial scale cutters
and grinders. In integrated plants, the by-product coconut water is also collected by drilling
the coconut before deshelling, or halving the coconuts after deshelling. Next, grated coconut
kernel then goes into a series of screw presses to extract coconut milk. The residual kernel
from this first press is then mixed with water before it is pressed again to increase extraction
yield. Oil recovery yield can represent extraction yield. After extraction, coconut milk is
filtered to remove large contaminants. It can then be standardized to a pre-determined level
of fat and blended with other ingredients. Finally, coconut milk is pasteurized and
aseptically filled into packages for transportation to global markets.

Coconut Milk Coconut Cream

14
6.1 Flow Chart for Processing of Coconut.

15
 7. LOCATION OF THE PROPOSED PROJECT AND LAND
 Coconut prefers to grow under tropical and subtropical climate. Traditional areas of
coconut in India are the states of Kerala, Tamil Nādu, Karnataka, Andhra Pradesh, Orissa,
Goa, West Bengal, Pondicherry, Maharashtra and Islands of Lakshadweep and Andaman
and Nicobar.
 However, several states like Assam, Gujarat, Madhya Pradesh, Bihar, Tripura, Manipur,
Nagaland and Arunachal Pradesh have emerged as non-traditional areas for the
cultivation of coconut.
 Coconut is grown in more than 93 countries of the world and Indonesia, Philippines, India
are the major producing countries of the world.
 The ideal locations for establishment of exclusive coconut milk processing unit are in the
production clusters of coconut growing states.

8. MARKET DEMAND AND SUPPLY FOR COCONUT BASED

PRODUCTS
Global producers- Country, Area, Production, Productivity and global market share
Country Area % Share Production % Share Productivity
(million nuts) (nuts/ha)
Indonesia 3571 29.8 14804 20.5 4530
Philippines 3517 29.3 14735 20.4 4196

16
India 1975 16.5 20440 28.4 10119
Sri Lanka 440 3.7 3056 4.2 6623
Tanzania 128 1.1 554 0.8 1379
Brazil 250 2.1 2893 4.0 11923
Papua New Guinea 221 1.8 1483 2.1 6709
Thailand 202 1.7 809 1.1 4859
Others 1684 14.0 13321 18.5 5662
Total 11988 100.0 72095 100.0 5777

9. MARKETING STRATEGY FOR COCONUT MILK.

 Marketing strategy is a long-term, forward-looking approach and an overall game plan

of any organization or any business with the fundamental goal of achieving a
sustainable competitive advantage by understanding the needs and wants of customers.

 The increasing urbanization and income offer huge scope for marketing of fruit base
products. Urban organized platforms such as departmental stores, malls, super markets
can be attractive platforms to sell well packaged and branded coconut Based products.

10.DETAILED PROJECT ASSUMPTIONS

Detailed Project Assumptions

Parameter Assumption
Capacity of the Coconut milk Unit 60 MT/annum
1st Year Implementation,
55% in second, 65% in
third, 75% in fourth year,
Utilization of capacity
85% in fifth, 95% in sixth
& 100 % from seventh
year onwards
Working days per year 300 days
Working hours per day 10 hours
Interest on term and working capital 12%

17
 loan
Seven year with one year
Repayment period grace period is considered.
Average prices of raw material 25
Average sale prices per Kg 360 Rs/kg
1 kg coconut milk form
Coconut Milk 11.11 kg matured coconut

 This model DPR for manufacturing unit is basically prepared as a template based on certain
assumptions that may vary with capacity, location, raw materials availability etc.

 An entrepreneur can use this model DPR format and modify as per requirement and
suitability.

 The assumptions made in preparation of this particular DPR are given in This DPR assumes
expansion of existing unit by adding new line.

 Herewith in this DPR, we have considered the assumptions as listed below in the tables of
different costs, which may vary as per region, seasons and machinery designs and supplier.
1. COCONUT cost considered @ Rs. 25/- per kg.
2. WATER cost considered @ Rs. 0.25/- per kg.
3. Yield is considered as 9 %, which may vary depend on degree of maturation of the fruit, and
fruit purchase is assumed as a bulk & in that 5% approx. will be eliminated as a rejection
due to over ripened, decayed, diseased, rotten etc.
4. Machinery cost may also vary from vendor to vendor.

 Land and civil infrastructures are assumed as already available with the entrepreneurs.

 We took les sugar content as fruit is itself sweeter, cost can be reduced by increasing
sugar content.

18
19
11. PROJECT START-UP COSTING SHEETS
Land and Building.
Land and Civil Infrastructures
1. Land 550 sq. ft. Assumed land already developed and has
2. Built up processing area 441 sq. Ft. 500 sq. ft. built in area. Rs. 6.00 Lakhs
Total Rs. 6.00 Lakhs

 Land and civil infrastructures are assumed as already available with the entrepreneurs.
Still we have considered approx. 6 lac Rs. as a construction cost for safer side of the
entrepreneur.

Machinery and Equipment: - Rs. 13.0 Lacs

Amount
Sr. No Equipment Quantity Capacity (in
Lakhs)
1 De huller 1 300 kg/hr 2
2 Shell breaker 1 350 pcs/hr. 0.7
3 Pulveriser 1 100 Kg/hr 0.5
4 Coconut milk extractor 1 60-65kg/hr. 1.5
Filter
5 2 Suitable 0.2
6 Raw milk silo 1 300 Ltr 0.5
7 Homogenizer 1 200 LPH 1.5
8 Spout pouch packing machine 1 400 BPH 0.6
9 Retort Machine 1 400 PPH 3
10 S.S tub 1 Suitable 0.3
11 Vacuum Pump 1 Suitable 0.4
12 Oven 1 Suitable 0.8
13 S.S trolley and tray 1 150 kg 0.5
14 Accessories 1 Standard 0.5
TOTAL 13

20
Other costs: -
Utilities and Fittings: -
Utilities and Fittings
1. Water Rs. 0.6 Lacs total
2. Power

Other Fixed Assets: -

Other Fixed Assets
1. Furniture & Fixtures Rs. 0.8 Lacs total
2. Plastic tray capacity
3. Electrical fittings

Pre-operative expenses
Pre-operative Expenses
Legal expenses, Start-up expenses, 0.6 Lac
Establishment cost, consultancy fees, trials and
others.
Total preoperative expenses 0.6 Lac

Contingency cost to be added as approx. 1.2 Lac.

So total startup cost at own land & Premise may be somewhat similar to 25.37 lacs. This is
according to survey done at X location India. This may vary on location, situation and design
change over.

21
Working capital requirement (in Lacs)

Working Capital Requirement (Rs. in Lakh)

55% 65% 75%
Period
Particulars (Days) Year 2 Year 3 Year 4
Raw material stock 3 1.06 1.26 1.71
Work in progress 6 2.12 2.51 3.42
Packing material 10 0.48 0.57 0.77
Finished goods’ stock 5 2.15 2.54 3.46
Receivables 10 4.29 5.07 6.92
Working expenses 7 0.19 0.23 0.31
Total current assets 10.29 12.17 16.59
Trade creditors 0.00 0.00 0.00
Working capital gap 10.29 12.17 16.59
Margin money (25%) 2.57 3.04 4.15
Bank finance 7.72 9.12 12.44

12. INSTALLED CAPACITY OF THE COCONUT MILK

MANUFACTURING UNIT

The maximum installed capacity of the Coconut Milk manufacturing unit in the present
model project is proposed as 60 tons/annum or 200 kg/day Coconut Milk manufacturing.
The unit is assumed to operate 300 days/annum @ 8-10 h/day. The 1st year is assumed to be
construction/expansion period of the project; and in the 2nd year 55 percent capacity, 3rd
year 65 percent capacity and 4th year onwards 75 percent capacity utilization is assumed in
this model project.

22
Total Project Cost and Means of Finance (Rs. in Lakhs)
Amount
Particulars in
Lakhs
i. Land and building (20 x 32 x 12 ft -
LxBxH) 6
ii. Plant and machinery 13
iii. Utilities & Fittings 0.6
iv. Other Fixed assets 0.8
v. Pre-operative expenses 0.60
vi. Contingencies 1.20
vii. Working capital margin 2.57
Total project cost (i to vii) 24.77
Means Of finance

i. Subsidy 8.67
ii. Promoters Contribution 4.95
iii. Term Loan (@10%) 11.15

Manpower Requirement

Manpower Requirement
Annual
Total Monthly Salary (Rs.) No Wages Total Monthly Amount
Supervisor (can be the owner) 1 15000 15000 180000
Technician 1 12000 12000 144000
Semi-skilled 3 6000 18000 216000
Sales man 1 8000 8000 96000
Total 53000 636000

23
 13.EXPENDITURE, REVENUE & PROFITABILITY ANALYSIS.

Expenditure, Revenue and Profitability Analysis

60 MT
Year
Particulars
1st 2nd 3rd 4th 5th 6th 7th

Total Installed Capacity 367 MT

A (MT) coconut / yr 33 39 45 51 57 60
Capacity utilization (%) Under Const. 55% 65% 75% 85% 95% 100%
B Expenditure (Rs. in Lakh) 0
matured coconut (Av. Price
@ Rs. 25/Kg ) 0.00 105.88 125.13 144.38 163.63 182.88 192.50
Packaging materials 0.00 1.98 4.68 5.40 6.12 6.84 7.20
Utilities (Electricity, Fuel) 0.00 0.70 0.83 0.95 1.08 1.21 1.27
Salaries (1st yr only
manager’s salary) 1.80 6.36 6.36 6.36 6.36 6.36 6.36
Repair & maintenance 0.00 0.70 0.80 0.90 0.90 0.90 0.90
Insurance 0.30 0.30 0.30 0.30 0.30 0.30 0.30
Miscellaneous expenses 0.50 2.30 2.30 2.30 2.30 2.30 2.30
Total Expenditure 2.60 118.21 140.39 160.59 180.69 200.78 210.83
Total Sales Revenue (Rs.
C in Lakh) 0.00 132.00 156.00 180.00 204.00 228.00 240.00
Sale of coconut Milk (Av.
Sale Price @ Rs.400/kg) 0.00 132.00 156.00 180.00 204.00 228.00 240.00
PBDIT (Total exp.-Total
sales rev.) (Rs. in
D Lakh)/Cash Inflows -2.60 13.79 15.61 19.41 23.31 27.22 29.17
Depreciation on civil works
@ 5% per annum 0.30 0.29 0.27 0.26 0.24 0.23 0.23
Depreciation on machinery
@ 10% per annum 1.30 1.17 1.05 0.95 0.85 0.77 0.77
Depreciation on other fixed
assets @ 15% per annum 0.18 0.15 0.13 0.11 0.09 0.08 0.08

24
 Interest on term loan @
12% 1.16 1.12 1.07 1.03 0.97 0.57 0.91
Interest on working capital
@ 12% 0.00 0.93 1.09 1.49 1.49 1.49 1.49
Profit after depreciation and
E Interest (Rs. in Lakh) -5.54 11.06 13.08 17.07 21.15 25.56 27.18
Tax (assumed 30%) (Rs. in
F Lakh) 0.00 3.32 3.92 5.12 6.35 7.67 8.15
Profit after depreciation,
Interest & Tax (Rs. in
G Lakh) -5.54 7.74 9.16 11.95 14.81 17.89 19.02
Surplus available for
repayment (PBDIT-Interest
on working Capital-Tax)
H (Rs. in Lakh) 1.16 1.12 1.07 1.03 0.97 0.57 0.91
Coverage available (Rs. in
I Lakh) 1.16 1.12 1.07 1.03 0.97 0.57 0.91
Total Debt Outgo (Rs. in
J Lakh) 0.39 0.43 0.47 0.52 0.57 8.77 0.63
Debt Service Coverage
K Ratio (DSCR) 3.00 2.62 2.28 1.97 1.69 0.07 1.44
Average DSCR 2.18
Cash accruals (PBDIT-
L Interest-Tax) (Rs. in Lakh) -3.76 9.35 10.61 13.26 16.00 18.97 20.10
M Payback Period 2.5 Years
(on Rs. 25.37 Lakhs initial
investment)

14. REPAYMENT SCHEDULE

Ending
Year Beginning PMT Interest Principal Balance
1 11,14,816.16 1,54,646.39 1,15,940.88 38,705.51 10,76,110.65

2 10,76,110.65 1,54,646.39 1,11,915.51 42,730.88 10,33,379.78

3 10,33,379.78 1,54,646.39 1,07,471.50 47,174.89 9,86,204.89

4

25
 9,86,204.89 1,54,646.39 1,02,565.31 52,081.08 9,34,123.81

5 9,34,123.81 1,54,646.39 97,148.88 57,497.51 8,76,626.30

6 8,76,626.30 1,54,646.39 91,169.13 63,477.25 8,13,149.04

7 8,13,149.04 1,54,646.39 84,567.50 70,078.89 7,43,070.16

8 7,43,070.16 1,54,646.39 77,279.30 77,367.09 6,65,703.07

9 6,65,703.07 1,54,646.39 69,233.12 85,413.27 5,80,289.80

10 5,80,289.80 1,54,646.39 60,350.14 94,296.25 4,85,993.55

11 4,85,993.55 1,54,646.39 50,543.33 1,04,103.06 3,81,890.50

12 3,81,890.50 1,54,646.39 39,716.61 1,14,929.78 2,66,960.72

13 2,66,960.72 1,54,646.39 27,763.91 1,26,882.47 1,40,078.25

14 1,40,078.25 1,54,646.39 14,568.14 1,40,078.25 (0.00)

21,65,049 10,50,233 11,14,816 (11,14,816)

15.ASSETS’ DEPRECIATION (DOWN VALUE METHOD)

Assets’
Depreciation
(Down Value
Method) Amounts in Lakhs
1st 2nd 3rd 4 th 5th 6th 7th 8th
Particulars Yr Yr Yr Yr yr yr yr yr
Civil works 6.00 5.70 5.42 5.14 4.89 4.64 4.41 4.19
Depreciation 0.30 0.29 0.27 0.26 0.24 0.23 0.22 0.21
Depreciated
value 5.70 5.42 5.14 4.89 4.64 4.41 4.19 3.98

Plant &
Machinery 13.00 11.70 10.53 9.48 8.53 7.68 6.91 6.22
Depreciation 1.30 1.17 1.05 0.95 0.85 0.77 0.69 0.62
Depreciated
value 11.70 10.53 9.48 8.53 7.68 6.91 6.22 5.60

Other Fixed 1.20 1.02 0.87 0.74 0.63 0.53 0.45 0.38

26
 Assets
Depreciation 0.18 0.15 0.13 0.11 0.09 0.08 0.07 0.06
Depreciated
value 1.02 0.87 0.74 0.63 0.53 0.45 0.38 0.33

All Assets 20.20 18.42 16.81 15.36 14.04 12.85 11.77 10.79
Depreciation 1.78 1.61 1.45 1.32 1.19 1.08 0.98 0.89
Depreciated
value 18.42 16.81 15.36 14.04 12.85 11.77 10.79 9.90

16.FINANCIAL ASSESSMENT OF THE PROJECT

Benefit Cost Ratio (BCR) and Net Present Worth (NPW)

Particulars 1st Yr 2nd Yr 3rd Yr 4 th Yr 5th yr 6th yr 7th yr 8th yr

Capital cost (Rs. in

Lakh) 24.77 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Recurring cost (Rs.

in Lakh) 2.60 118.21 140.39 160.59 180.69 210.83 210.83 210.83

Total cost (Rs. in

Lakh) 27.37 118.21 140.39 160.59 180.69 210.83 210.83 210.83 1259.76

Benefit (Rs. in
Lakh) 0.00 132.00 156.00 180.00 204.00 240.00 240.00 240.00

Total Depreciated
value of all assets
(Rs. in Lakh) 9.90

Total benefits (Rs.

in Lakh) 0.00 132.00 156.00 180.00 204.00 240.00 240.00 249.90 1401.90

Benefit-Cost Ratio
(BCR): (Highly
Profitable project) 1.113

Net Present Worth

(NPW): 142.15

27
 17.BREAK-EVEN ANALYSIS

Sr. 2nd 4 th
No. Particulars 1st Yr Yr 3rd Yr Yr 5th yr 6th yr 7th yr 8th yr
Under
Capacity utilization (%) Const. 55% 65% 75% 85% 95% 100% 100%
Production MT/Annum 33 39 45 51 57 60 60
A Fixed Cost (Rs. in Lakh)
Permanent staff salaries 1.8 6.36 6.36 6.36 6.36 6.36 6.36 6.36
Depreciation on building @
5% per annum 0.30 0.29 0.27 0.26 0.24 0.23 0.22 0.21
Depreciation on machinery
@ 10% per annum 1.30 1.17 1.05 0.95 0.85 0.77 0.69 0.62
Depreciation on other fixed
assets @ 15% per annum 0.18 0.15 0.13 0.11 0.09 0.08 0.07 0.06
Interest on term loan 1.16 1.12 1.07 1.03 0.97 0.91 0.85 0.77
Insurance 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Total Fixed Cost (Rs. in
Lakh) 5.039 9.387 9.189 9.001 8.823 8.651 8.485 8.322
Sales Revenue (Rs. in
B Lakh) 0 132 156 180 204 228 240 240
C Variable Cost (Rs. in Lakh)
matured coconut fruits (Av.
Price @ Rs.25/Kg ) 0.00 105.88 125.13 144.38 163.63 182.88 192.50 192.50
Packaging materials 0.00 1.98 2.34 2.70 3.06 3.42 3.60 3.60
Casual staff salaries 0.00 4.86 4.86 4.86 4.86 4.86 4.86 4.86
Utilities (Electricity, Fuel) 0.00 0.70 0.83 0.95 1.08 1.21 1.27 1.27
Repair & maintenance 0.00 0.70 0.80 0.90 0.90 0.90 0.90 0.90
Miscellaneous expenses 0.50 2.00 2.00 2.00 2.00 2.00 2.00 2.00
Interest on working capital
@ 12% 0.00 0.93 1.09 1.49 1.49 1.49 1.49 1.49
Total Variable Cost (Rs.
in Lakh) 0.50 117.04 137.05 157.28 177.02 196.76 206.63 206.63
D Break Even Point (BEP)

28
 as % of sale - 12.00 10.00 8.00 8.00 7.00 7.00 6.00
Break Even Point (BEP) in
terms of sales value (Rs. in
Lakhs) - 15.84 15.60 14.40 16.32 15.96 16.80 14.40

18.RAW MATERIAL REQUIREMENTS FOR THE UNIT.

 A sustainable food processing unit must ensure maximum capacity utilization and thus
requires an operation of minimum 280-300 days per year to get reasonable profit.
Therefore, ensuring uninterrupted raw materials supply requires maintenance of
adequate raw material inventory.

 The processor must have linkage with producer organizations preferably FPCs through
legal contract to get adequate quantity and quality of raw materials which otherwise get
spoiled.

 In the coconut Milk manufacturing project, the unit requires 672 kg/day, 794 kg/day and
917 kg/day raw ripened fruit pulp at 55, 65 and 75 percent capacity utilization,
respectively.

 If there are shortages in supply, then the entrepreneur can use other seasonal seeds /
Spices for same purpose to achieve maximum capacity utilization for higher economic
efficiency.

 The fruit must be plucked from plant at mature stage; and then stored below 25°C
temperature.

29
a. Pie chart for better understanding of expenses of each head.

Amount in Lakhs (Rs.)

0.6
0.8 2
0.6
0.7
1.2
0.5
0.5
0.5 1.5

0.8
0.2
0.4 0.5
0.3
1.5

3 0.6

Dehuler Shell breaker Pulverizer

Coconut milk extractor Filter Raw milk silo
Homogenizer Spout pouch packing machine Retort Machine
S.S tub Vacuum Pump Oven
S.S trolley and tray Accessories Contingency
Water + Power Fixed Assets Pre-operative cost

30
19. TYPICAL COCONUT MILK MANUFACTURING UNIT LAYOUT

31
  The figures depicted here are in feet.

20.MACHINERY SUPPLIERS

There are many machinery suppliers available within India for Green vegetables base products
processing machineries and equipment. Some of the suppliers are:
1. Bajaj Process pack Limited, Noida, India
2. Shriyan Enterprises. Mumbai, India

21.LIMITATIONS OF THE DPR

i. This DPR has provided only the basic standard components and methodology to be
adopted by an entrepreneur while submitting a proposal under the Formalization of
Micro Food Processing Enterprises Scheme of MoFPI.

ii. This DPR is made to provide general methodological structure not for specific
entrepreneur/crops/location. Therefore, information on the entrepreneur, forms and
structure (proprietorship/partnership/cooperative/ FPC/joint stock company) of
business, background of proposed project, location, raw material base/contract
sourcing, entrepreneur’s own SWOT analysis, market research, rationale of the
project for specific location, community advantage/benefit, employment generation
etc. are not given in detail.

iii. The present DPR is based on certain assumptions on cost, prices, interest, capacity
utilization, output recovery rate and so on. However, these assumptions in reality
may vary across places, markets and situations; thus, the resultant calculations will
also change accordingly.

32
22.GUIDELINES FOR THE ENTREPRENEURS

i. The success of any prospective food processing project depends on how closer the
assumptions made in the initial stage are with the reality of the targeted
market/place/situation. Therefore, the entrepreneurs must do its homework as
realistic as possible on the assumed parameters.

ii. This model DPR must be made more comprehensive by the entrepreneur by
including information on the entrepreneur, forms and structure
(proprietorship/partnership/cooperative/ FPC/joint stock company) of entrepreneur’s
business, project location, raw material costing base/contract sourcing, detailed
market research, comprehensive dehydrated product mix based on demand, rationale
of the project for specific location, community advantage/benefit from the project,
employment generation, production/availability of the raw materials/crops in the
targeted area/clusters and many more relevant aspects for acceptance and approval
of the competent authority.

iii. The entrepreneur must be efficient in managing the strategic, financial, operational,
material and marketing aspects of a business. In spite of the assumed parameter
being closely realistic, a project may become unsustainable if the entrepreneur does
not possess the required efficiency in managing different aspects of the business and
respond effectively in changing situations.

iv. The machineries should be purchased after thorough market research and
satisfactory demonstration.

33
v. The entrepreneur must ensure uninterrupted quality raw materials’ supply and
maintain optimum inventory levels for smooth operations management.

vi. The entrepreneur must possess a strategic look to steer the business in upward
trajectory.

vii. The entrepreneur must maintain optimum (not more or less) inventory, current
assets. Selecting optimum source of finance, not too high debt-equity ratio, proper
capital budgeting and judicious utilization of surplus profit for expansion is must.

viii. The entrepreneur must explore prospective markets through extensive research, find
innovative marketing strategy, and maintain quality, adjust product mix to demand.

ix. The entrepreneur must provide required documents on land, financial transaction,
balance sheet, further project analysis as required by the competent authority for
approval.

x. The entrepreneur must be hopeful and remain positive in attitude while all situations.

34
 Contact Us
Director
National Institute of Food Technology Entrepreneurship and Management-Thanjavur

Pudukkottai Road, Thanjavur Tamil nadu

Ministry of food Processing Industries, Government of India
Phone No.: +91- 4362 - 228155, Fax No. : +91 - 4362 – 227971

Website: http://www.niftem.ac.in

Email: pmfmecell@niftem.ac.in

Call: 0130-2281089

35