Anda di halaman 1dari 29

SHRI SHIKHARJEE RICE OIL LLP

SHREE SHIKHARJEE RICE OIL LLP

PROPOSAL FOR SETTING UP OF AN


RICE BRAN OIL MANUFACTURING UNIT
AT VILLAGE AMAGARH, TEHASIL BARGHAT, DISTRICT SEONI, (MADHYA PRADESH)

PREPARED BY
ASKCA & ASSOCIATES
C HARTERED ACCOUNTANTS
1ST FLOOR, BUSINESS PARK ,
DURGA CHOWK , GONDIA (M.H .)441601
C ONTACT NO. 07182-232911, 8956590968

1 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

CONTENTS

I Introduction

II Executive Summery

III Identification of the project & Project Proponent

IV Need for the project and its importance to the country or region

V Demand Supply Gap

VI Import saves Indigenous Production

VII Export Possibility

VIII Domestic/Export Market

IX Employment Generation (Direct and Indirect) due to the project

X Raw Material

XI Process Manufacture

XII Extraction of oil

XII Method of Refining Oil

XIII Abstract of Project

XIV Component of Project Cost

XV Component of Means of Finance

XVI Viability of Project

XVII Implementation of Project

XVIII SWOT Analysis

XIX Conclusion

2 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

LIST OF FINANCIAL ANNEXURES

ANNEXURE - I. Project Cost Summary

ANNEXURE - II. Projected Balance sheet & Current Ratio Analysis

ANNEXURE - III. Profitability Statement

ANNEXURE - IV. Cash Flow Statement

ANNEXURE - V. Debt Service Coverage Ratio

ANNEXURE - VI. Break Even Analysis

ANNEXURE - VII. Internal Rate of Return

ANNEXURE - VIII. Working Capital Requirement

ANNEXURE - IX. Calculation of Production quantity & Raw Material requirement

ANNEXURE - X. Calculation of sales quantity & Sales Realization

ANNEXURE - XI. Term Loan Repayment Schedule

ANNEXURE - XII. Calculation of Power Requirement

ANNEXURE - XIII. Calculation of Direct Labor & Wages

ANNEXURE - XIV. Repairs & Maintaince

ANNEXURE - XV. Calculation of Depreciation

ANNEXURE - XVI. Calculation of Salary

ANNEXURE - XVII. Calculation of Administrative Expenses

ANNEXURE - XVIII. Calculation of Selling Expenses

3 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

INTRODUCTION

India rice bran oil market size was valued over USD 600 million in 2014 and is likely to be worth
more than USD 600 million by 2016. India has 1.4 million tons of RBO production potential of
which only around 900 kilo tons is only produced. SEA (Solvent Extractor Association) is working
on plants to help existing mills to upgrade their production process. Only 300 kilo ton is used for
direct consumption and rest is blended with different edibles and is sold in the market. SEA is
expected to increase its direct consumption levels in the domestic market by promoting
associated health benefits among consumers.

Global rice bran oil market size was estimated at over 1.2 million tons in 2015. Global
edible oil market size was estimated more than 165 million tons in 2015. India rice bran market
(RBO) size was dominant with an estimated production of more than 900 kilo tons in 2014.
China was the second largest market with an estimated production of around 200 kilo tons in
2014. Japan and Thailand were the other major market in 2014 with an estimated production of
over 80 kilo tons and 50 kilo tons respectively.

Increasing consumer health consciousness from edible oils to reduce cholesterol levels
is likely to support rice bran oil market growth up to 2023. It is globally promoted as premium
product with anti-oxidant properties and is available at competitive prices in comparison to
olive oil. It is also considered to have an optimal balance of MUFA and PUFA which is expected
to increase shelf life than that of sunflower refined products.

Approval of World Health Organization (WHO) and the American Heart Association is likely to
favor rice bran oil market growth. RBO is also used as food ingredients in many bakery products
with a ratio up to 20%. The products include cakes, biscuits, breads, cookies and pizza. It
improves the taste & chewing of the bakery products coupled with advantage in price reduction
and health benefits of lowering cholesterol level.

4 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

Abundant raw material availability in the form of rice particularly in Asian countries is
likely to result in stable rice bran oil market price trend over the forecast period. Production is
majorly concentrated in countries such as India, China, Japan, Thailand and Vietnam. In 2013,
The ICRBO (International Council of Rice Bran Oil) was formed in order to establish uniform
scientific standard and focus on value added products.

ICRBO also promotes uniformity in trade & commerce among its member countries
and also encourages & promotes improve communication among producers, local governments
and academic researchers. It also intends to sponsor training programs to members in technical
work & development to increase rice bran oil production and create awareness among edible
oil consumers about its health related benefits.

The Solvent Extractors Association (SEA) of India is on the ICRBO board and is promoting rice
bran oil in different parts of the country as a rich source of vitamin E and high oryzonal content
which lowers the cholesterol levels.

In 2015, Government of India lifted ban on RBO exports which is expected to boost the sales.
India is expected to export close to 10 kilo tons of
RBO in the fiscal year compared to an export based
limit of 2 kilo tons in the previous years. This
initiative is likely to fetch demand from countries
such as Japan, Thailand, New Zealand, Australia and
the U.S. Indian traders are expected to receive
large orders from Japan based firms following
removal of export limit. India has the potential to
export up to 50 kilo tons annually of rice bran oil. Growth in personal care & cosmetic industry
is also likely to favor RBO market growth over the forecast period. The Oryzol component
protects against the UV light and can be used as sunscreen agent. The ferulic acid in oryzol
helps in stimulating hair growth and also prevents skin ageing. It is also used as an ingredient in
soap manufacturing, particularly in Japan and the U.S.

5 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

1. Executive Summary
The proposed Rice Bran oil Plant will be located at Kh. No. 395,396/1,405, 407/1,407/2
& 410/2, Patwari Halka No.57 of village Amagarh,Tahasil Bargaht, District Seoni-480771
Madhya Pradesh. Total land acquired for this project by SHRI SHIKHARJEE RICE OIL LLP is 11.50
Acres duly diverted for Industrial use.

The proposed site is accessible by National Highway No.7 which is 15 km from proposed
site. Nearest Railway Station is Seoni about 15 Km, nearest Airport is Nagpur about 150 kms in
from existing site.

Nearest Major Cities are Jabalpur & Nagpur distance of about 160kms 150 kms
respectively of the existing site. Wainganga River is 25 km away towards East direction.
Proposed project costs tempted is of Rs.20.80 Cores.

The major raw materials required for the proposed Rice Bran Oil Plant are Rice Bran and
Husk which is amply available in the nearby area of plant.

It is proposed to provide adequate pollution control arrangements to all possible


sources of proposed project to meet stringent norms. Fugitiveust will be controlled by
providing pulse jet bag filters to all transfer points. Dusts collected in pulse jet bag filters will be
recycled to sinter plant. Major it of the solid wastes will be utilized for sinter manufacture.

Water requirement for the project will be sourced from under earth borewell water
supply. Industrial effluent generation will be very less. Effluent generated will be treated and
used for green belt development.

Green belt development is in progress. Suitable plants pieces will be planted all along
the internal road, raw material storage & handling, ash/dust prone areas. It is planned to plant
saplings considering the parameters as type, height, leaf area, crown area, growing nature,
water requirement etc. Green belt will be progressively developed on land.

6 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

2. Introduction of the Project/ Background Information


(i) Identification of Project and Project Proponent

M/s. SHRI SHIKHARJEE RICE OIL LLP (SSROL) incorporated in 2015 for setting up a Rice
Bran Oil plant (Solvent & Refinery) as a main object. The LLP is registered with registrar of
Company (under Ministry of Corporate Affairs) wide LLPIN No. AAF-1075 dated 30th October
2015.The firm is formed by the partners to chalk out an ambitious plan of establishing an Rice
Bran Oil Solvent and Refinery where there are existing as well as new emerging opportunities &
also government promotion to this sector.

The project proponents are well experienced in Rice bran Oil manufacturing sector as
they are already running mini Rice bran oil Plant and several rice mills. They are third
generation entrepreneurs in their family. All their plants & Rice mills are exist in Balaghat &
Seoni region of Madhya Pradesh.

Brief Description about the key proponents of the project is as follows


Sr No. Name Designation

1 Shri. Gyan Chand Chordia Designated Partner


2 Shri. Kirti Chordia Designated Partner

Shri. Gyan Chand Chordia


He joined business at very young age of 18 years and prove himself best in the market. He is
young, energetic and hardworking person. It is his vision and decisions that makes chordia
group in new height of success. He is graduate in the filed of commerce and has a thorough
knowledge of running industry. He get is basic traning done under the supervision of his
grandfather late shri Moolchandji Chordia who will be known as Industrial King in the area.
He is having detailed knowledge of manufacturing & processing of Rice Bran Oil with an
experience of around 22 years. He will be responsible for the overall management of M/s.
SSROL.

7 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

Shri. Kirti Chordia


To follow the foots of his brother Mr Gyan chordia, Kirti joined the business at the very young
age of 22 years just after completing his graduation. He has completed his graduation from Rani
Durgawati University of Madhya Pradesh. He is young, energetic and a hardworking person.
Since teenage, he is managing the day to day activities of the business. He get is managment
traning done under the supervision along with his parents, Grand Parent and started to look
after the trading and manufacturing activity of Rice, and Rice bran crude Oil. In M/s. SSROL, he
will be responsible for overall performance of the unit and will handle all the activities relating
to production of the unit. He will also be responsible to look after the acquisition of raw
materials, human resource and marketing.

About Chordia Group


Chordia Group is one of the reputed business group of Katangi Tehsil, Dist Balaghat. The
group was formed by Late Shri Moolchandji Chordia, which is also known to be Industrial King
in the area. To continue the business profile of the group son Mr. Nihal Chand Chordia join the
business in the year 1970 and same is carried on by third generation Mr Gyan Chordia & Kirti
Chordia. The group has alredy set up various rice mills in the area of Balaghat, Seoni and
Bhandara District. Apart from various rice industries, achievement of setting up of first Solvent
Plant in District of balaghat is in the name of chordia Group, Katangi in the name CHORDIA
EDIBLE OIL PVT LIMITED. The unit is successfully running and is managed by third generation.
Now with modernization of technology and availability of raw material in the area promoter
has decided to set up large unit for processing of rice bran with modern technology.

M/s. Shri Shikharjee Rice oil LLP (SSROL) has excelled in both physical and financial
performances within a short span of time of their in caption. The partners along with key
persons of the group are confident for the successful execution and operation of proposed
Rice Bran Oil Plant along with environmental conservation.

The proposed project will consume mainly Rice Bran, Husk & coal as raw materials and
produce Rice Bran Oil. All wastes will be suitably used for various purposes after treatment.

8 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

(ii) Need for the project and it importance to the country and or region

Due to Industrialization and development of technology numbers of rice mills are set
up in the nearby area. Rice bran is by-product of this rice mills (also called as Rice polish) and
can used earlier only as a cattle feed. With development of technology oil has been extracted
from this rice bran and is found to be healthier for human consumption. Hence need for
setting up of this unit arises.

Major benefit of rice bran oil as envised by various reports and organization is as
below:

1. Rice bran oil has the optimal balance of PUFA and MUFA. The saturated fatty acid
content in rice bran oil results in a longer shelf life than sunflower oil.

2. It is less greasy and has a higher smoke point making it the perfect cooking oil for frying
purposes.

3. Oryzanol, the natural antioxidant has proved to be good for the heart.

4. It is beneficial for skin and hair and can be used in cosmetics.

5. Rice bran oil reduces bad cholesterol without affecting good cholesterol, thus balancing
the cholesterol levels in the body.

6. Globally, rice oil has been proved to reduce the risk of colon cancer.

7. It is less sticky, has longer shelf life and is nutritionally superior.

8. The fatty acid composition of rice bran oil is close to that recommended by World Health
Organization.

9. A component of rice bran oil has anti-oxidant contents which protect us from free
radicals which are responsible for heart diseases, cancer and other diseases.

10. As stress become the major problem worldwide. Content of Gamma- oryzanol in rice
brain oil helps to reduce general stress. It prevent body from oxidative stress allied
disorders

9 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

11. The oryzanol content which is only found in rice bran oil has been found to have
protective effect against alchohol provoked liver damage. It is effectual against final
phase of chronic liver disease.

12. Rice bran oil consist high fraction of tecopherol and tecotrienol together as vitamin E
which best known for its anti oxidant properties. It can prevent and rapair cell damage.

13. As pollution is increasing day by day so vitamin E protects lungs from oxidative damage
cause due to environmental substance. It reduces platelets aggregation and platelets
adhisiveness to collagen even more than aspirin.

14. Around 2 Lakh people die of kidney diseases every year in India. One of the substance in
rice bran oil decreases calcium absorption that help to reduce the formation of certain
types of kidney stone.

15. Rice bran oil is called as heart oil in Japan and is considered as a health food in the US.
The presence of MUFA (mono unsaturated fatty acid) is what makes rice bran oil special.

16. Apart from this there are many other advantages of Rice bran Oil. A daily consumption of
this can make human body healthier and stronger.

SSROL Plant has location advantage too. Plant located at center of India at Village
Amagarh, Tahasil Barghat, District Seoni, Madhya Pradesh. The area is full of paddy and high
numbers of rice mills are already registered in the vicinity of seoni area. The District of seoni
is surrounded by Balaghat District, Mandla District, Chhindwara District and Nagpur District.
All this area together is known by Rice production Hub in India. About 65% of total rice
requirement in India is supplied by Rice Mills in this area. As paddy is main crop in the area
and Nos of paddy processing plant are registered in the area, we have advantage of getting
raw material easily as comparatively less transportation cost. Other location advantage of
SSROL plant has

10 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

There are no other oil extraction plants in existence at this location or nearby place;
hence it can utilize all raw material in this locality.

The proposed site is accessible by National Highway No.7 which is 15 km from proposed
site. Nearest Railway Station is Seoni about 15 Km, nearest Airport is Nagpur about 150
kms in from existing site.

Labor is available at cheap rates locally or from other parts of the district. Many of these
workers are skilled in agro-processing techniques due to the existing mills.

(iii) Demand & Supply Gap


Rice bran oil production in India has grown 32% in the period between 2004-2017.
India is the largest consumer of edible oils and produces 8.2 million tonnes and imports 11
million tonnes of edible oil to meet the annual domestic demand.

Rice is a staple diet for Indians. The demand for rice bran oil has boosted rice farming in India.
Rice bran oil is characterized by low price, health benefits and superior cooking properties.
India is the worlds largest rice bran oil producer and promotions for rice bran oil are happening
both at the domestic and global level. This can be expected to lead to a further surge in the
demand for rice bran oil.

As per data provided by Solvent Extractors Association of India, rice bran oils nutritional
benefits are superlative in comparison to other edible oils.

India is the worlds second biggest rice producer at 104.22 million tonne this year. India has
huge potential to scale up the production of rice bran oil. In the Union budget 2013-14, Indian
government has abolished the duty on exports of de oiled rice bran, a by product of milled rice,
used as a fodder. India exports 200,000 tonne of de-oiled rice bran every year. Vietnam is
Indias biggest buyer of de-oiled rice bran.

11 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

In 2004-05, the rice bran oil production in India was 680,000 tonne. The estimated production
volume for 2016-17 is 900,000 tonne. There is a potential to scale up this production to
14,60,000 tonne. The market for rice bran oil as a cooking oil is expected to grow by 15% to Rs
4,600 crore in 2016-17. Presently the market for rice bran oil is around Rs 4,000 crore. India has
the potential to produce and consume 18 lakh tonnes of rice bran oil in the future. The current
production of rice bran oil hovers around 80% of total production capacity. Rice mills in India
are scattered and an optimal transportation time is vital to maintain the quality of rice bran oil.
Recent research has focused on using pellitising machines to prevent deterioration in quality of
brans during transit.

Rice bran is the outer coating of the rice kernel. It is removed from the white portion of rice
through a process called as polishing. Polishing breaks up the coating into smaller particles
which begin to oxidise almost immediately. Rice bran contains 15-20% edible oil. Rice bran oil
has an ideally balanced fatty acid profile, is rich in natural antioxidants and has unique
nutraceuticals.

When the bran is exposed to damp atmosphere, it readily absorbs moisture, the enzyme
present in the bran becomes active and splits the oil into free fatty acids. The quantity of
unsaturated fatty acids [85%] is higher than that of saturated fatty acids [15%] in the rice bran
oil.

12 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

(iv) Import saves. Indigenous Production


Rice eating nations lead in the production of rice bran oil. Japan, Thailand, China,
South Korea are leading countries that produce rice bran oil. Japan has the latest technology
in rice bran oil processing. India imports edible oil worth Rs 55,000 crore every year to bridge
the gap between demand and supply of edible oils. According to the Solvent Extractors
Association of India, with full exploitation of rice bran oil, the country can reduce its edible oil
import bills by about Rs 3,000 crore a year.

Though demand of Rice bran oil in the market is rapidly enveloping but the
Transportation cost and distance criteria for immediate supply are the major factor.

(v) Export Possibility


Although India is a major importer of edible oils, the Centre has allowed bulk exports
of rice bran oil to help small rice millers realise better price as demand of this cooking oil
remains limited in the domestic market.

Japan has shown interest in buying rice bran oil from India - a country that depends on
import of edible oil for meeting nearly 60 per cent of its domestic consumption. Export of rice
bran oil will help India earn foreign exchange, thus reducing the rising import bill on account of
edible oil.

Talking to ET, BV Mehta, executive director of the Solvent Extractors' Association of


India (SEA), said: "Indian rice bran oil, known as 'heart oil' in Japan, may soon land on the coast
of Japan if everything goes well. Manufacturers of Japanese rice bran oil (they also call it rice
oil) have shown keen interest in the import from India. Some of the Japanese producers are
also looking for joint ventures with Indian companies for value-added products." In fact, a
seven-member Japanese team from Wakayama Prefectural government has recently met the
members of SEA to discuss the possibility of importing rice bran oil from India.

13 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

India is the second-largest producer of the oil after China and the country has the
potential to produce over 14 lakh tonne rice bran oil. Currently, it produces about 9 lakh
tonne, of which only 3 lakh tonne is used as edible oil. The rest is used by vanaspati industry or
blended with other oils.

Rice bran oil is gaining popularity across the world as it is rich in mono-unsaturated
fatty acids and has a higher cholesterol reducing power. It has the highest amount of oryzanol,
which has cholesterol lowering properties, unique micro nutrients and natural antioxidants
compared to other cooking oils. It reduces cholesterol absorption, blood platelet aggregation
and increases cholesterol excretion, thus reducing total cholesterol effectively.

The government has allowed bulk export of rice bran oil without any restriction on pack
size, a move likely to help paddy growers and rice millers. "Export of rice bran oil in bulk
(irrespective of any pack size) has been exempted from the prohibition on export of edible
oils.

In India, rice bran oil, which is available at Rs 110-115 per litre, is giving a tough
competition to olive oil. "After Adani Wilmar launched rice bran oil under its Fortune brand, it
has witnessed tremendous growth in the domestic market. In the current fiscal year, rice bran
oil is expected to grow 25 per cent. Olive oil industry is facing a big challenge from rice bran
oil," said AR Sharma, chairman of AP Solvex, the largest rice bran oil producer in the country.

14 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

(vi) Domestic/Export Markets

The market in India for Rice bran oil is well established and regular demand is fulfilled
to the possible extent by the various Rice bran oil manufacturing units in the country.

The Indian steel industry continued to show case trend so higher consumption of Rice
bran oil and continued to be an importer on account to increased demand for cooking oil in
the country. India's current per capita oil consumption is 2.64 bb//day per 1000 people is well
below the world average of 29.28 bbl/day per 1000 people. With rising income and education
level in country it is expected to increase the consumption for health oil i.e. Rice bran Oil.
Hence there is vast scope for increasing precipitate consumption of Rice bran oil.

(vii) Employment Generation (Direct and Indirect) due to the project

For the operation of proposed project direct & indirect employment requirement on
regular basis will be about 40 persons.

15 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

TECHNIQUAL ASPECTS

Raw material:

Rice bran is a byproduct of the rice milling process (the conversion of brown rice to white rice),
and it contains various antioxidants that impart beneficial effects on human health. A major rice
bran fraction contains 12%-13% oil and highly unsaponifiable components (4.3%). This fraction
contains to cotrienols (a form of vitamin E), gamma-oryzanol and betasitosterol; all these
constituents may contribute to the lowering of the plasma levels of the various parameters of
the lipid profile. Rice bran also contains a high level of dietary fibres (beta-glucan, pectin and
gum). In addition, it also contains ferulic acid, which is also a component of the structure of
nonlignified cell walls. However, some research suggests there are levels of inorganic arsenic (a
toxin and carcinogen) present in rice bran. One study found the levels to be 20% higher than in
drinking water.
Other types of bran (derived from wheat, oat or barley) contain less arsenic than rice bran, and
are just as nutrient-rich

Rice bran is used as a raw material for the solvent plant industry. Its oil is also used as a raw
material for candies and confectionery, dairy- based items, vanaspati, chemical industries, and
for making chewing gums. As rice bran oil is a fat free, its use as edible oil is also now widely
advocated on medical grounds for protection against heart diseases and malnutrition.

The Government of India has been concerned with the production of edible rice bran oil in the
country to reduce the large imports of edible oils. As per the grain and feed annual report, In
India the total production of rice during 2016-2017 was 106.5MMT.

16 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

For quite some time, the government of India has been concerned with the production of
edible rice bran oil in the country to reduce the large imports of edible oils. In India, the total
annual ( 1986-87) production of rice bran was about 26 lakh tons , but only 16% of it went for
edible oil production.Typically, rice bran contains 15-20 % oil. If all the available rice bran could
be utilized for oil extraction, roughly 6lakh tons per year of rice bran oil could be added to the
edible oil supply.

Process of manufacture:

Stage 1- processing occurs at the rice mill. As soon as the


bran and germ are removed from the kernel, Rice Bran Technologies
proprietary equipment begins the process of stabilization. A
combination of heat, water, and pressure are used to deactivate the
enzymes that cause rancidity in the rice bran. The stabilized rice
bran is dried and packaged for shipment.

Stage 2- processing uses the stabilized rice bran from the stage 1 processing. Water and
enzymes are added to the stabilized rice bran. The slurry is processed in a centrifuge to
separate the insoluble fiber fraction, called Ri-Fiber, and aqueous dispersible fraction,
called Ri-Solubles.

The products are dried and packaged in either bulk containers for finished food
manufacturers and humanitarian relief or in canisters for retail consumer sales. A third
product of the Stage 2 process, Ri-Balance, is extracted prior to the centrifuge process.
RiBalance contains both the insoluble and soluble extracts, but in a more bio-available
form.

17 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

Extraction of oil:

Using proprietary Rice Bran technology, the bran is fully stabilized and sent to an
extraction area where oil is removed, yielding two productsa high quality crude rice
bran oil and defatted rice bran. After extraction, food grade defatted bran is temporarily
stored in food grade silos until it can be packaged for edible applications.

Crude rice bran oil is further processed by refining, which removes the majority of free
fatty acids and provides oil with minimal processing suitable for a variety of animal or
agricultural applications.

18 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

METHODS OF REFINING OIL:

METHODS OF
OIL REFINING

CHEMICAL PHYSYCAL
REFINING REFINING

For the vast majority of edible grade applications however, refined oil is sent forward to
an absorptive vacuum bleaching step, which removes natural pigments and impurities
that cant be removed by the refining process. Edible oil bleaching typically leaves minor
flavor and odor compounds that must be removed by steam distillation before
packaging; however those customers that require de-waxed oil have their oil go through
a de-waxing process before distillation.

Steam distillation is the final step in the edible oil process and it is here that any off
flavors and residual free fatty acids left in the oil are removed. Once the oil has been
fully processed, it is ready for packaging into retail bottles, food service pails or bulk
drums. Larger customers have the option of purchasing tanker truck quantities of rice
bran oil.

19 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

The continuous solvent extraction process can broadly be divided into two types:

(a) Immersion type extractors, and


(b) Percolation type extractors.

The seoni extraction plant aquires Immersion type of extractor.


In a continuous extraction system, rice bran passes through the following phases to form crude
rice bran oil.

Oil fresh out of the seeds is mostly nutritious and healthy. The seeds rich in Essential Fatty
Acids (EF As) contain many valuable side components. By and large, they contain all the
essential vitamins and minerals needed for their own assimilation. Many of these
components are rich in antioxidants. As unprotected EF As go rancid quickly, the last thing
the oil manufacturers want is to have us purchase their oil in the grocery store, just to find
that it has gone rancid. To prevent this, they remove and alter them. By the time the oils we
eat have been through the refinement process, a radical change has taken place. These
processes are called degumming, neutralization, bleaching, winterization and deodorizing

20 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

ABSTRACT OF THE PROJECT

PROJECT: PROPOSAL FOR SETING UP OF AN RICE BRAN OIL MANUFACTURING UNIT.

NAME OF PARTNERS: GYAN CHORADIA AND KIRTI CHORADIA

NAME OF THE PROJECT: SHREE SHIKHARJEE RICE OIL LLP

LOCATION: AT VILLAGE : AMAGARH

TEHASIL : BARGHAT

DISTRICT : SEONI

STATE : MADHYA PRADESH-480771

ADDRESS OF THE HEAD OFFICE AND PLANT:

HEAD OFFICE: Ward No.14, Gandhi Chowk, Katangi, District Balagaht-481445

PLANT ADDRESS: At Village Amagarh, Tahasil Barghat, District Seoni-480771(M.P.)

CONSTITUTION: Limited Liability Partnership

CAPACITY UTILAISATION:

1. For Solvent Extraction Plant


Year 1 2 3 4 5 6 7
Capacity 65% 67% 69% 71% 73% 75% 80%
Utilization

2. For Refinary Plant


Year 1 2 3 4 5 6 7
Capacity 78% 80% 83% 85% 88% 90% 96%
Utilization

21 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

ANNUAL SALE REALISATION: RS.9462.48 lacs in first year

POWER UTILISATION: 750 KVA

COST OF PROJECT:
(1) Land and Building : 00.00
(2) Plant and Machinery : 1487.26 lacs
(3) Building : 415.19 lacs
(4) Infrastructure & Utility : 109.77 lacs
(5) Preliminary pre operative
Expenses : 75.00 lacs
(6) Margin maoney for working capital
(available with promoter) : 179.00 lacs

2266.22lacs

MEANS OF FINANCE: (RS. IN LACS)

(1) Partners capital : 606.22


(2) Term loan from bank : 625.00
(3) Unsecured loan : 535.00
(4) MOFPI grant : 500.00

WORKING CAPITAL FROM BANK: : 550.00 Lacs

LOAN PAYMENT PERIOD : 6 years

22 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

Man power requirements/ Employment Generation:

A. Administration:
Administrative Head - 01
Accountant - 02
Office Staff - 01
04 Nos.
B. Production:
Plant Incharge -01
Division In charge -03
Machine Operator -07
Semi Skilled Helper -09
Chemist -01
Electrician -01
Unskilled Workers -13
35 Nos

TOTAL PROJECT COST : 22.66 crore approx.

Components of Project Cost

Land:
The Land for the plant has been taken on a lease by SSROL wide registered lease deed
dated 24/08/2017. The unit shall be located at KH. No. 395, 396/1, 396/2, 407/1,409/2,
410/2, 395 Pl No. 57, Mouza Amagad Tehsil Barghat , Dist. Seoni. The area of land is
12.65 Acre .Necessary N.A. permission for commercial / industrial use has already been
applied & obtained by Lessor.

23 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

Site Development and Buildings:


The site development work includes site leveling & filling, fencing & cross drainage
work. As per estimates prepared by Chartered Engineer (Civil), the cost towards Site
Development and civil work (including Technical & Non Technical Civil Work), building,
power and Water is worked out to Rs.500.00 The breakup of cost to be incurred on
building and site development is as under:

Particular Amount (in Lacs) Amount (in lacs)

Land, Road & Site 100.00


Development(Non
Technical)

Building & Civil Work 315.19


(Technical)

Infrastructure & Utility

Power 50.00

Water 59.77 109.77

Total 524.96

Electrical Installation:
Electricity Installation includes cost of transformer, cables, MPSEB Deposit, Switches etc.
The estimated cost on this account is arrived at Rs. 50 Lacs.
Plant and Machinery

The cost of Plant & Machinery is estimated to be about Rs. 1487.26 Lacs including of all
taxes & transportation.

24 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

Margin Money for Working Capital:


The woking capital requirement for the project is worked out to Rs 550 lacs. Margin
money required for working capital is worked out to Rs 179 lacs in first year which is
32.54% of working capital requirement in the project. Considering partners margin to
the extent of Rs. 606.22 Lacs, the firm shall avail cash credit facilities from banks to the
extent of Rs. 550.00 Lacs.

Preliminary Preoperative Expenses:

A preliminary Preoperative expense is worked out to Rs 75lacs which included interest


paid to bank during moratorium period and other expenses for setting up of project.

Components of Means of Finance


Partners Capital:
The partners for the proposed project shall introduce capital to the extent of Rs. 606.22
Lacs.
The partners are resourceful enough to raise the required capital.

Term Loan from Bank:


It is proposed to avail the term loan of Rs. 625 Lacs from bank for the project. The term
loan component is worked out to be 43% of the plant and machinery, Water treatment
plant. The total repayment period of term loan shall be 72 Months excluding
moratorium period of 12 months.

Unsecured Loans
The part of the project cost to the extent of Rs 535 Lacs shall be made by way of
unsecured loans from the partners and their friends and relatives.

MOFPI GRANT:

The project is supported by Scheme of Ministry of Food Processing Industry to the


extent of Rs 500 lacs. Its a credit linked scheme of MOFPI which shall be disbursed in
two phase.

25 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

Viability of the Project :

Assumption to Profitability Estimates:

The projected profitability of the unit is based upon the following assumptions.

The SEP plant has a capacity of 240MT per day and the unit will be in operation for
303days in a year.

The unit will refine 40MT of extracted bran oil per day and the unit will work for 303
days in a year.

The installed capacity of the unit is 240 MT of bran oil refining per year

The capacity utilization is at 65% first year, 67% second year, 69 % third year, 71 %
fourth year, 73 % fifth year, 75 % sixth year and 80 % seventh year onwards for SEP
plant.

The capacity utilization is at 78% first year, 80% second year, 83 % third year, 85 %
fourth year, 88 % fifth year, 90 % sixth year and 96 % seventh year onwards for SEP
plant.

The main utilities is power, water, steam etc.The total power requirement is 750 kva.

The power charge is calculated considering the tariff fixed by MPSEB.

Repairs & Maintenance is provided @ 1% on building and 1% on Plant & Machinery

An administrative expense is provided in the profitability estimate. It includes rates


& taxes travelling expenses, postage telephone & telegram, printing & stationery,
other office expenses etc.

Income tax is provided considering the rates applicable to limited liability


partnership.

There is a profit of Rs. 87.45 lakhs in the first year of operation.

26 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

IMPLEMETATION OF THE PROJECT:

Phase I: Collection of all information, data, preparation of drawings and inviting quotations
etc. A detailed schedule in terms of bar charts is prepared for implementing the project. This
will be carried out within a period of 1months.

Phase II: Actual implementation of the project. This will take at least 4 months as a supply
period of the machines will take 2 months. Besides it will take around 1 to 1.5 months for
land development and building construction. The tentative date of trial production will be
February 2018 and commercial operation will be carried out within 30 days from the date of
trial production.

27 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

SWOT ANALYSIS:

STRENGTH WEAKNESS
*In recent days peoples are health concious and * The paddy production depends upon rainfall,so as
bran oil is good for health. the avaibility of rice bran can get affected.

*Ample availability of raw materials at competitive * The raw material - Rice bran and Huskbeing an
prices. agricultural produce, its availability is subject to
volatility in monsoon.
*Wide network of procurement of raw material and
selling of finished products all over the country. * Raw material prices might fluctuate depending
on the crop position in the country.
*Project is located in area having good availability
of raw material, water, power, etc

*Availability of dedicated & skilled labour


coupled with low labour cost

SWOT
ANALYSIS
OPPORTUNITIES
THREATS
* As there are no Rice Bran Oil extraction plant in
the area of operation and high numbers of rice *Any change in Govt. Policy with respect to
mill are operating in the area , the profit of plant Agro-based industry can have a major impact
will not affect.
on the business of the firm.

*Demand for the product will be certain and


revenue generating. *Change in consumer preferences to alternate
products .
*Support from Government
*Threat of substitutes
*Vast domestic market and own marketing
arrangements by the firm.

* Less no of refinery in the surrounding region.

28 PREPARED BY ASKCA & ASSOCIATES


SHRI SHIKHARJEE RICE OIL LLP

CONCLUSION:

India is the second largest producer of rice and consequently majority of the Indian population
consume rice as its staple food. As there is huge production of rice leads to larger avaibilty of
rice bran. Rice bran is rich in micronutrients like oryzanol, tocopherol, tecotrienols, phytosterols
hence its consumption is benefit for health and it can be use as substitute of other edible oils.

Advanced technologies can be effectively implemented in developing futuristic nutraceutical


and pharmaceutical products to combat the present higher incidence of coronary heart
diseases and many other ailments.
To conclude we can say that opening in emerging place is a good opportunity for business men.
It serves dual role in countries economy first social aspect is to develop country, generate
employment & second financial aspect is to generate good profit by giving better services.

29 PREPARED BY ASKCA & ASSOCIATES