HOW TO START NOODLES MAKING BUSINESS PLAN
Free Project
Report
Introduction :
Cereals like
wheat , rice, maize and millets are staple food grain for majority of
population around the world . These are the rich source of carbohydrates and
supply of calorie and other nutrients to the consumers. Apart from value
addition by processing to traditional products from these grains , development
of Newer products offers Variety, Convenience, Quality, Cost efficiency and
Scope for increasing nutritional value. In the developed countries many
convenience foods are prepared by extrusion process using extruder, as it
offers a large number of desired characteristic to be incorporated in the
product. NOODLES are a form of pasta that is becoming extremely popular in
India even as Continental and Italian delicacy. Instant Noodles is prepared by
means of an extrusion machine that is basically made of an stainless steel make
strips, either flat(rolled and Cut ) or Oval round(Extruded). The process is
quite simple and requires not much skilled labour. The machine itself is high
technology and provides the manufacturers to produce pasta with several
alternatives materials ( like Maida, Suji, Rava, Rice flour and so on ) and in
different shapes ( like Spaghetti, Fettuccini, Vermicelli, Maccaroni, Fusilli,
Penne, etc. ) of Pasta and Noodles. These products can be described as Hard,
Brittle pieces, Formed into different shapes by extruding , cutting and drying
tough dough made from semolina or farina mixed with water.
Market Potential & Scope of Noodles Making Business :
This type of
ready-to-eat food items is very popular in the developed countries because of
its versatility of form, composition and ease of preparation at consumer end,
which has made these products so widely, accepted world over. The popularity of
Pasta can be attributed to its sensory appeal, Versatility, Low Cost, ease of
preparation, Nutritional content and excellent storage stability as well as
increased consumer interest in ethnic foods in the Western world. The inherent
blandness of the product makes them congenial with many kinds of adjuncts such
as sauces, topping, flavorings, etc. enabling vermicelli Noodles to be used as
the basis of different dishes with infinite variations. These dishes are
consumed in place of potatoes, rice, bread. Italians are world leaders in the
consumption of products with 25 Kg/head/annum followed by USA at about 8.2
Kg/head. Australians and Japanese consume about 3.5 Kg. And 1.1 Kg /head
respectively. Although consumption in India is reported to be very low, viz.,
80 Gm/capita, their production has increased in the recent past, from 4.73 lakh
tones during 1990 to 6.46 lakh tones in 2001. With having Export Market Noodle
are projected to become more popular in many of the Asian countries with
increased availability of Western foods and higher disposable incomes. Due to
improving standard of living in the cities and the rapid urbanization taking
place in the rural areas , consumption of these products is widely expected to
go up steadily. At present the market of Noodles , specially in the urban
areas, is dominated by brands likes MAGGI & TOP RAMAN. Some medium &
Small companies are also engaged in its production . The presence of a demand
supply gap can be observed which may leads ample scope for a unit to come up in
this product sector to cater especially to the semi urban and rural sectors of
north India. Besides the boom in the food service sector including fast food
chain, has widened the demand potential for Noodles. Experiments have shown
that advertisement and publicity have influenced the pattern of consumption of
Noodles/ Pasta products. Besides, Noodles/ Pasta products have good export
potential especially in the Middle East/ Europe.
Basis & Presumption :
1. The
Project Profile has been prepared on the basis of Single Shift of 8-hrs. a day
and 25-working
days in a month at 75% efficiency.
2. It is
presumed that Ist year, the capacity utilization will be 70% followed by 85% in the next year
and 100% in the subsequent year.
3.
Depreciation on machinery & equipments has been taken @ 10% minimum . Depreciation on office furniture has been taken @ 20 % per annum.
4. The rates
quoted in respect of salaries and wages for skilled worker and others are on the basis of
minimum rates in the State of U.P.
5. Interest
rate for the fixed and working capital has been taken @ 12% on an average whether
financed by the Bankers or Financial Institutional.
6. The margin
money required is minimum (30% of the total capital investment).
7. The rental
value for the accommodation of office , workshop and other covered area has been
taken @ Rs. 30/- per Sq. mtr .
8. The rate
quoted 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 suppliers to suppliers. When a tailor made project profile is prepared,
necessary changes are to be made.
9. The pay
back period may be 5-years after the initial gestation period.
10. 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. Once all the above arrangements are made and quality/standards
achieved the 100% project capacity may be achieved at the end of three years.
However, a detailed PERT/CPM/chart with implementation period has been given in
the report.
11. To run
the unit the balance period of the year, other fruits products such as squashes
and juices can be prepared with addition
of a few machinery and equipments.
Implementation Schedule :
The
implementation of the project includes various jobs/exercises such as
procurement of technical know how, transfer of technology, 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 the slack period is curtailed to minimum
possible and as far as possible simultaneous exercises are carried out. In view
of above a CPM-PERT Chart has been illustrated below. According to which a
minimum period of 227 days is involved in finally starting the project on
commercial basis. By following this process a time period of 82 days can be
saved.
Noodles Manufacturing Process :
Noodles is
the term being used to designate products made from blend of flour , the major
component of which is rice flour, buck wheat flour , wheat flour, and from bean
, potato , mung bean and corn starch. The major manufacturing process is depend
on the presence or absence of gluten. Small amounts of nutrients may be added
but these do not affect the organoleptic qualities or processing properties of
the material. Water is added in the extrusion step and is removed by drying ,
except when it is sold as fresh product. Wheat flour noodles are usually
produced by sheeting and rolling , while other types are typically produced by
extrusion or batter cooking methods. The raw material for Rice noodles is
non-glutinous rice which is elastic and enables formation of dough that is easy
for extrusion. The Traditional noodles have been modernized and globalised in
the form of Instant Noodles. Both rice and wheat flour type instant noodles are
steamed and dried or steamed and fried after the cutting stage. The modern
instant noodle are steamed and fried in Hydrogenated Vegetable Oil , have a fat
content of about 20% and added salt and edible gum and a Shelf Life of 6-8
Month. Instant noodles are fast cooking, needing 2-3 minute boiling or
re-hydration in boiling water. Noodles manufactured in different size, hollow
as well as solid. The flavour and taste in the instant noodle is created during
the re-hydration in boiling water by adding a mix known as taste maker of
different flavour and taste having hydrolyzed vegetable protein, Sugar, spices,
onion powder, edible starch, oil, citric acid, caramel and salt and added
flavour.
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| NOODLES MAKING BUSINESS PLAN |
Quality Control & Standards :
The Bureau of
Indian Standards has laid down the following specifications for Noodles:
Makaroni,
Spaghetti , Vermicelli, and Egg Noodles ( 2nd Revision ) - IS 1485 : 1993
The details
of specification can be obtained from the Bureau of Indian Standards,
Manak Bhawan,
9, Bahadur Shah Zafar Marg , New Delhi-110 002.
The ISO 22000
and HACCP standards promises a team work which may guide the entrepreneurs
towards fulfillment of a commitment for quality of products.
Pollution Control :
There is no
major pollution problem associated with the project. The entrepreneurs may
however, contact the concerned State Pollution Control Board for detailed
guidance in the matter. Minimum height of shed will be maintained with exhaust
fans for removing decongestion and proper ventilation, etc.
Process Flow Chart For the preparation of Noodles
 |
| Process Flow Chart For the preparation of Noodles |
Production
(Target & Value):
NOODLES : 270
MT
VALUE : Rs.
81,00,000/-
Power
Requirement : 10K.W.
Water : 10,000 Ltrs./Day
Energy
Conservation :
The following
steps may be taken for the conservation of energy.
1. Machinery
& Equipment’s parts, which are revolving and reciprocating should be
properly, lubricated from time to time with suitable lubricant oil.
2. Lay out of
the unit should be in such a way in that no back tracking of material is there.
3. All
electric switches may be kept off, when not required.
4. The entire
transmission belt will be tightened before starting the work is wherever
applicable.
5.
Fluorescent tube with electronic Chokes may be used for energy saving. Further
recently developed compact fluorescent tubes called (CFT) of 10,15, watts
Philips/Glaux made may be used for energy saving and decoration. These self
ballasted fluorescent lamps are high efficiency replacements for ordinary
bulbs. For same light output, CFLEBs consume about one-fifth the power consumed
by ordinary bulbs, thereby saving a lot of energy. The savings get further
multiplied when CLEBs are used in air conditioned areas, since the saving of
energy by using CLEBs also corresponds to less heat dissipation reducing load
on air conditioners. The life of CFLEBs is about 8000/10000 hours i.e. about 10
times that of ordinary bulb.
The typical
payback period in terms of savings of energy bills and cost of ordinary lamps
is about 6 months operation. Unlike ordinary bulbs, these CFLEBs provide choice
of three colours designated A, B & C, to suit individual requirements.
Electronic
Ballast, with protection against high voltage spikes, along with high quality
CFLs make these composite CFLEBs (or self ballasted CFLs) Slim, lightweight,
efficient and reliable units.
6. As far as
possible Solar Energy and day light will be used keeping all the other lights
off.
7. 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.
Financial Aspects :
(A) Fixed
Capital :
1.Land and
Building (own) :
Land and
Building (rented)
On Rent @
Rs.50 /-Sq. meter
Covered Area
200 Sq. meter 10,000/-
Month
2. Noodle
Making Machine and Equipment
1. Steam Baby
boiler 50 kg/hr.
2. Vertical
type Powder Mixer 500 Kg Cap. with motor complete
3. Dough
Maker blade type 100 Kg.
4. Noodle
Making Extrusion machine cap. 150 Kg./Hr. power operated with Die-Head of diff.
Sizes with motor
5. Tray Dryer
with power operated
6. Tray-
wooden 100 2’x3’
7. Utensils
i.e. Bucket, plate, mugs etc.
8. Water storage
tank cap.500 lit (HDPE)
9. Weighing
balance 100 gm to 5 kg cap.
10. Weighing
Scales Platform type
11. Working
Tables Al Top
12. Pouch Packaging
Machine
13.
Laboratory equipt.
14. Pollution
Control Equip.
15. Office
furniture and fixtures
16.
Electrification & installation charges @ 5%
Total Cost of
Machinery & Equipments 14,65,000/-
3.
Pre-Operative Expenses : 25,000/-
Total Fixed
Capital = 14,90,000 say 15,00,000/-
(B) Working
Capital (Per month)
Total
Recurring Expenditure (per month):
1) Salary
& Wages 68,500/-
2) Raw
Material 4,11,500/-
3) Utilities 14,000/-
4) Other
Contingent Expenses 36,000/-
Total: 5,30,000/-
Working
Capital for three months: 15,90,000/-
Total Capital
Investment:
Fixed capital: 15,00,000/-
Working
capital for 3 months: 15,90,000/-
Total: 30,90,000/-
MACHINERY UTILIZATION:
In this
process of Noodles production, the bottle neck operation is drying of noodles.
Efforts should be so made that all machinery and equipments are properly
serviced at regular interests for maximum utilization of machines as the
process involves some manual operation also. It is expected that during first
year machine utilization will be 75% and during second year 85% and 100% in
subsequent years.
FINANCIAL ANALYSIS:
1. Cost of
Production (per annum):
Total
Recurring Cost per year 63,60,000/-
Depreciation
on Machinery & Equipment @ 10% 1,38,500/-
Depreciation
on Office Equipments & furniture @ 20% 4,000/-
Interest on
Total Capital Investment @ 12 % 3,70,800/-
Total: 68,73,300/-
2. Turn Over(
per annum):
Item cap. Per
month Per annum Rate Value
Noodles Pouch 200 Gm. 112500 1350000 6 /- packet 81,00,000/-
Net Sales
Realization(turn over) per Year : 81,00,000/-
3. Net Profit
per annum before Income Tax : 12,26,700/-
(Sales- cost
of production)
4. Net Profit
Ratio: = (Net profit /Turn over )x100
= 15.14%
5. Rate of
Return: = ( Net profit / Total
investment )x100
= 39.69%
XI. BREAK
EVEN ANALYSIS:
(1) Fixed
Cost (per annum)
(a) Total
Depreciation (on m/c. & equipment, dies, tools, furniture) : 1,42,500/-
(b) Rent :
1,20,000/-
(c) Interest
on borrowing:( Total Investment) : 3,70,800/-
(d)
Insurance : 24,000/-
(e) 40% of
salary : 3,28,800/-
(f) 40% other
contingent exp. without insurance 1,63,200/-
Total: 11,49,300/-
(2). Break
Even Point (B.E.P) = (Fixed Cost x 100)/(Fixed cost +
profit)
= 48.37%
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