_ Business plan_V.

01

M/s Shri * Food Products

WHEAT FLOUR MILL

PROPOSAL FOR
TERM LOAN & WORKING
CAPITAL ASSISTANCE
Business Plan

M/s Shri * P.Ltd

Survey No, , Andhra Pradesh.

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The Project
M/s Shri * Pvt Ltd is a private limited company incorporated in Andhra Pradesh, India promoted by
Mr. *2010. The promoters who have extensive experience in the Trading of Oil and Food Products
have conceived the idea of encashing their trading experience and going in for Food Processing
industry. The company is proposing to setup a Wheat Flour Mill of 120 Tons per day capacity along
with a Atta Chakki Plant of 30 Tons per day processing unit at Survey No, * just about 10
Kms from Hyderabad.
The unit proposes to produce Wheat Products such as Atta, Maida, Chakki Atta, Ravva and Bran
( By product ) of 150 Tons per day ( 120 + 30 ) to cater to the needs of Whole Sale and Retail
needs of South Indian Wheat Market. The required raw material is basically Wheat which is
available in plenty from various parts of northern and western parts of India.
Processed wheat products are staple food items in India .Consumption and Demand for the
products proposed for manufacturing by the company, is ever on increase due to increase in
population, increase in per capita consumption owing to various factors such as rise in
disposable income, increasing value of time, increasing demand for improved quality standard
and hygiene of the products and non-economics of small-scale chakkis in wheat segment.
The Company has obtained on long lease, 2_Acres of industrial land in
for implementation of the Project. The land has been
converted from agricultural area and is to be developed for setting up the production facilities
The total Investment of the project is estimated at Rs 578.00 Lacs which is proposed to be
financed by the promoters as well as term loan from Banks in 1 : 1.54 ratio.

Promoters
M/S Shri * Agro Products Foods Products has been promoted by Mr. *
.
 Mr.Kamal Kumar Mundada (Director)- S/o Late Sri Kishan Mundada started his career in
the year 1991 after his school education. He entered the family business run by his father
viz., M/s Mundada brokers who are commission agents for supply of crude edible oil
to oil refineries till 2006. Currently the business is handled by his cousins. For a couple of
years he assisted his young nephew who owns a proprietary concern ‘Anand
Agencies’, distributors of wheat products viz., Atta, Chikki Atta, Maida etc. He gained rich
experience assisting his nephew in the wheat products business. With this background, he
started his own business in 2007viz., ‘Shubham Agro Industries’, a partnership firm to
manufacture Chakki Atta at Kattedan industrial area. Presently the firm is clocking a
turnover of Rs 6.00 Cr to Rs. 7.00 Cr per annum.
 Ashish Mundada S/o Sri Kamal Kumar Mundada after completing his graduation (B Tech
in Electrical Engg) in the year 2006, started his career as a channel partner to market
the products of Idea Cellular. He did this business for a period of 2 years and
achieved a turnover of Rs 12 Cr each per year. He gave up this business and joined
as a partner of ‘Shubham Agro Industries’.

 Share Holding Pattern:

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(a) What is Maida?

Maida flour is finely-milled wheat flour variety which is used to make Indian breads such as
paratha and naan. It is also used in Central Asian and Southeast Asian cuisine. Maida is a refined
product of wheat. It is extracted from the inner white portion of the wheat after the outer brownish
layer is removed. After the flour is ground in a flour mill, it is passed through a fine mesh
(600 mesh per square inch) to obtain maida. Though sometimes referred to as "all-purpose flour"
by Indian chefs, it more closely resembles cake flour or even pure starch. In India, maida flour is
used to make pastries and other bakery items such as bread, biscuits and toast. Pastry flours
available in United States may be used as a substitute for maida.

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(b)What is Atta
Atta is the main ingredient of most varieties of Indian, Bangladeshi and Pakistani bread. It is
a whole wheat-flour made from hard wheat grown across the Indian subcontinent. Flatbread made
from atta, such as chapati, roti, naan and puri, are an integral part of Indian cuisine. Hard wheats
have a high content of gluten (a protein composite that gives elasticity), as such, doughs made
out of atta flour are strong and can be rolled out very thin. Atta is obtained from grinding complete
wheat grains. It is creamy brown in colour and quite coarse compared to other types of flour.
Since nothing is removed from true whole meal atta, all the constituents of the wheat grain
are preserved. Atta available in market varies in its fibre content from very low to whole of natural
fiber in wheat, around 12%.
(c) What is Ravva ?
Husk removed wheat is ground to form rava, and used extensively in south Indian cuisine, such as
in Karnataka and Tamilnadu, to make Rava dosa, Rava idli, upma, khichdi, and also sweets like
Rava Ladoo and Rava halwa also known as Rava Kesari. There is another form of rava known
as Chamba Rava, which is an extract of wheat flour. As this "Rava" is an extract of maida flour it
is much finer. Rava may be described as the residues of milled material, after the flour is ground
in a flour mill (Chakki). It is passed through a fine mesh till flour and rava are separated. Bombay
Rava is used in Southern parts of India to make delicious dish called upma. It is also used as an
additive in some Dosa items, especially the Rava Dosa.

(d)What is Chakki atta ?

Atta is obtained from grinding complete wheat grains. It is creamy brown in color and quite
coarse compared to other types of flour. Since nothing is removed from true whole meal atta,
all the constituents of the wheat grain are preserved. Atta available in market varies in its fibre
content from very low to whole of natural fibre in wheat, around 12%. Traditionally, atta is
made by stone grinding, a process that imparts a characteristic aroma and taste to the
bread. High bran content of true whole meal atta makes it a fiber-rich food. This may help to
regulate blood sugar as well have other health benefits. The temperatures attained in a chakki
produced by friction, are of the order of 110-125 deg C. At such high temperatures, the
carotenes present in the bran tend to exude the characteristic roasty smell, and contribute to the
sweetness of the atta. The various quality control parameters for the atta industry are Ash
Content, Moisture Content,

(f)What is Bran?
Bran is the hard outer layer of grain and consists of combined aleurone and pericarp. Along
with germ, it is an integral part of whole grains, and is often produced as a by-product of milling
in the production of refined grains. When bran is removed from grains, the latter lose a portion of
their nutritional value. Bran is present in and may be milled from any cereal grain,
including rice, corn (maize), wheat, oats, barley and millet. Bran should not be confused with chaff,
which is coarser scaly material surrounding the grain, but not forming part of the grain itself.
Wheat bran is fed to horses in the form of a warm porridge or mash. Bran mash is considered an
excellent way to get the horse to drink more water. It is also indicated for its laxative qualities.
Bran is widely used as a major component in foods for cows, buffaloes, goats, rabbits, guinea
pigs, etc. Bran is particularly rich in dietary fiber and essential fatty acids and contains significant
quantities of starch, protein, vitamins and dietary minerals. Bran is often used to
enrich breads (notably muffins) and breakfast cereals, especially for the benefit of those wishing
to increase their intake of dietary fiber. Bran may also be used for pickling (nukazuke) as in
the tsukemono of Japan. In Romania, fermented wheat bran is usually used when preparing
sour soups, called borscht.

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Wheat & Wheat Products– The Staple Food:

 Wheat (Triticum spp) is a grass, originally from the Fertile Crescent region of the Near
East, but now cultivated worldwide. In 2007 world production of wheat was 607 million
tons, making it the third most-produced cereal after maize (784 million tons) and rice (651
million tons).
 Globally, wheat is the leading source of vegetable protein in human food, having a higher
protein content than either maize (corn) or rice, the other major cereals. In terms of total
production tonnages used for food, it is currently second to rice as the main human food
crop, and ahead of maize, after allowing for maize's more extensive use in animal feeds.
 Wheat was a key factor enabling the emergence of city-based societies at the start of
civilization because it was one of the first crops that could be easily cultivated on a large
scale, and had the additional advantage of yielding a harvest that provides long-term
storage of food.
 Wheat grain is a staple food used to make flour for leavened, flat and steamed breads,
biscuits, cookies, cakes, breakfast cereal, pasta, noodles, and couscous and for
fermentation to make beer, other alcoholic beverages, or bio fuel. Wheat is planted to a
limited extent as a forage crop for livestock, and its straw can be used as a construction
material for roofing thatch. The husk of the grain, separated when milling white flour,
is bran.
 Wheat germ is the embryo portion of the wheat kernel. It is a concentrated source
of vitamins, minerals, and protein, and is sustained by the larger, starch storage region of
the kernel—the endosperm.
 Raw wheat can be ground into flour or - using hard durum wheat only, can be ground
into semolina; germinated and dried creating malt; crushed or cut into cracked wheat;
parboiled (or steamed), dried, crushed and de-branned into bulgur also known as groats.
 If the raw wheat is broken into parts at the mill, as is usually done, the outer husk
or bran can be used several ways. Wheat is a major ingredient in such foods as bread,
porridge, crackers, biscuits, Muesli, pancakes, pies, pastries, cakes, cookies, muffins,
rolls, doughnuts, gravy, boza (a fermented beverage), and breakfast
cereals (e.g., Wheatena, Cream of Wheat, Shredded Wheat, and Wheaties).

Nutrition
 100 grams of hard red winter wheat contain about 12.6 grams of protein, 1.5 grams of
total fat, 71 grams of carbohydrate (by difference), 12.2 grams of dietary fiber, and 3.2 mg
of iron (17% of the daily requirement); the same weight of hard red spring wheat contains
about 15.4 grams of protein, 1.9 grams of total fat, 68 grams of carbohydrate (by
difference), 12.2 grams of dietary fiber, and 3.6 mg of iron (20% of the daily requirement).

 Much of the carbohydrate fraction of wheat is starch. Wheat starch is an important

commercial product of wheat, but second in economic value to wheat gluten. The principal
parts of wheat flour are gluten and starch. These can be separated in a kind of home
experiment, by mixing flour and water to form a small ball of dough, and kneading it gently

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while rinsing it in a bowl of water. The starch falls out of the dough and sinks to the
bottom of the bowl, leaving behind a ball of gluten.

Background of Wheat in India

Wheat is a major food staple in India, and is crucial to India’s food economy and security. With
wheat production of 75 to 85 million tons annually and a large demand, India’s wheat economy is
now the second largest in the world. The marketed surplus from the production has also been
rising and it is estimated that about 60-70 percent of the production now comes to the market
(India, Directorate of Economic and Statistics 2010).

 Maida and Atta are required for daily human consumption directly, or indirectly by way of
bread, biscuits, sweets, cakes, confectioneries etc. However bran is the byproduct
produced in the process of manufacturing wheat products is used for making cattle feed.
 Major portion of atta is used for making Roti, part of daily staple diet in India. A part of atta
is also used for biscuits.
 Maida is mainly used for bread, biscuit, cakes, cookies sweets, confectionaries etc. and
Bread is popular snack food for lower middle-income group name as ‘Pav’. Premium range
of the bread is popular breakfast item among middle and upper income group in urban
areas
 Suji is used for daily human consumption in various forms and specially used for infant
foods

The Production Process: Technology

The processing of Wheat is done through running wheat in a roller system and the technology is
very conventional and time tested. Details of the processing together with a flow chart are
available else where in this report.

Market for Wheat Products: The Food Processing Industry:

India is the world's second largest producer of food next to China, and has the potential of being
the biggest with the food and agricultural sector. The processing food segment accounts for USD
29.4 billion, in a total estimated food market of about USD 91.7 billion. The food processing
industry is one of the largest industries in India. It currently ranks fifth in terms of production,
consumption, export and growth prospects.
The Government of India has identified the Food Processing Industry sector as a high priority
area. It has given a number of fiscal reliefs and incentives to encourage commercialization and
value addition to agricultural produce. As per a study conducted by McKinsey and Confederation
of Indian Industry (CII), the turnover of the total food market is approximately USD 69.4 billion out
of which value-added food products comprise USD 22.2 billion.
The total food production in India is likely to double in the next ten years and there is an
opportunity for large investments in food and food processing technologies, skills and
equipment. Godrej Foods, Reliance, Namdhari, ITC, Nestle, Ruchi Soya Industries, Tata Coffee,
Tata Tea, RPG group, Subhiksha are major players. The Indian food processing industry is
primarily export oriented. India’s geographical situation gives it the unique advantage of
connectivity to Europe, the Middle East, Japan, Singapore, Thailand, Malaysia and Korea. One
such example indicating India’s location advantage is the value of trade in agriculture and
processed food between India and Gulf region.

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Macro-Scene- Wheat Products:

Wheat is a cereal grain grown and consumed worldwide. Wheat is more popular than any other
cereal grain use in baked goods. Its popularity stems from the gluten that forms when flour is
mixed with water. Without gluten, raised bread is hard to imagine. Wheat is also preferred
because of its mild, nutty flavor. Both the factors account for wheat being the most widely grown
cereal grain in the world. Today, thousands of varieties of wheat are grown throughout the world,
most requiring fertile soil and a temperate climate. Major wheat growing countries include China,
India, France, and Russia. Recent projections by the International Food Policy research Institute
(IFPRI) indicate that, by 2020, two-thirds of the world’s wheat consumption will occur in
developing countries, where wheat imports are estimated to double by 2020.
As noted earlier in this report, wheat demand worldwide is calculated to rise by 40% from 1993 to
2020 to reach 775 million tons. The expected increase in demand is partly motivated by
population growth but also results from substitution out of rice and coarse grain cereals as
incomes rise and populations become increasingly based in urban areas. (Source: Multi
Commodity Exchange of India Limited) .
Growth in packaged Atta industry is driven by four factors viz. (i) Rise in disposable income, (ii)
Value of Time, (iii) Demand for improved quality and hygiene and (iv) Economic / Non Economy of
small scale Chakkis. However, the current position of wheat availability is very comfortable and
this is reflected by overflowing wheat stocks with the Food Corporation of India Therefore, with
the easy availability of wheat for the next few years, increasing urbanization, and rising income
levels, the demand for the flour milling industry is expected to grow rapidly in the future.
 The size of the Indian urban food market is estimated at Rs 350,000 Crore. The domestic
market for processed food is huge and fast growing. The retail boom will create a huge
demand for the food-processing sector in the coming years. Little wonder that 2007 has
been designated the Year of Food Technology.
 The private sector is yet to realize its full potential in the food-retailing sector, as the
market is still to explore. Though, it has now started discovering the money there is to be
made in the urban food retailing market. Urban centers have the potential of development
process. But they do not produce food as they lack agricultural land; on contrary the rural
areas do. In that sense, the urban areas provide an assured market for the food produced
by farmers. The urban food marketing system thus assumes considerable importance for
both feeding the urban population and helping farmers.
 There are certain distinct characteristics of urban food demand. The urban population
generally has a higher purchasing power. The rising average income is leading to greater
demand for high-value processed food. A considerable number of urban women work,
creating a demand for heat-and-serve foods.
 The urban population density is high and this demands a chain or a network of retail
outlets. Indian food retailing is poised for a quantum leap. Not only are newer names set
to dot the retail landscape but also such new formats, as hyper-and super-markets are to
emerge.
 The key drivers for increased demand in value-added processed food products are: a)
growth in consumer class; b) change in lifestyle characterized by expanding urban
population, increased number of nuclear and dual-income families; c) change in attitudes
and tastes with increasing modernization and to a lesser extent westernization of
tastes,particularly, of the youth; d) low penetration rates; and e) ability to offset seasonal
supply-and-demand effects in fresh products.
Technical Feasibility:

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Manufacturing Process & Technology:

The technology for food processing industry is not complicated and mostly related to engineering. Good
qualified and experienced team of management exposed to running hi-tech plants, is sure to have an edge
over the competitors. The machinery suppliers extend all the necessary technical supports such as
installation and upkeep.
Cleaning (preparatory) Section: The wheat contains many impurities like
In take & pre cleaningsand, metal pieces, dirt and gunny pieces. Wheat is cleaned before
processing to remove coarse impurities like stones, chafe, stitching threads,
woods, straws, dust etc. Conveyors, Elevator, Drum Sieve, Reel Machine,
Separator with aspirators, magnet, etc. are used in pre-cleaning which
improves the storability of the wheat.
.
Storage Silo Storage Silos: Cleaned wheat is stored in silos for the continuous process and
making a proper blend of wheat according to the requirement as needed for
the end product mix.

First Cleaning First Cleaning: pre cleaned wheat is further processed to remove foreign
ingredients that not only reduces the yield but also affects the taste and
colour of the finished goods. Auto weigher, flow balancer, Dry de-stoner,
intensive dampener, magnets are used in process and wheat is tempered at
this stage.

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Second Cleaning: By absorption of water at 1st cleaning stage cellulose layer

Second Cleaning of wheat expand, crack and get partly loose which is further tempered to
have constant moisture using Intensive Dampner, Flow Balancer, Scourer,
Volumetric Measure, Automatic Water Doser for smooth milling.

Grinding: For getting good extraction Gradual Reduction System of break

Grinding
is used to separate the bran and endosperm. This breaking of wheat
separating bran and endosperm is a mechanical process done by passing the
wheat through Rolls running at different speed to produce a cutting and
shearing action. Apart from Rolls Disc, Beat and impact Detachers are used
besides the elevators to move the product from one roll to another

Purification: Semolina and Middling produced at grinding stage are

Purification
separated from bran by air in Purifier Machines whereby a composite
fractions composed of endosperm with adhering bran are also separated.

Bran Finisher: Whatever flour remain in bran is cleaned using

Bran Finisher bran finisher and the remaining bran is packed.
,

Packaging: Since the process is of Gradual Reduction therefore at each

Packaging
stage end products are produced and sent pneumatically after sieving using
Bolting Cloth in service Machines and the finished product are packed for
delivery in market

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PROJECTED OPERATIONAL RESULTS

Detailed data on operational expenses and profits for the forthcoming 6 years of projected
operations have been worked out and given in the statement annexed. While working out
estimates, prices of inputs and selling prices of outputs have been kept at constant rates
assuming that any increase in inputs cost would be effect by proportionate increase in the selling
price. Marginal increase has been provided in other operational cost to cover effects of possible
inflation.

CASH GENERATION & REPAYMENT SCHEDULE

Based on the estimates of cash generation from the operations and considerations the need to
retain certain funds for meeting any other contingent situations, plans for repayment of the loan
has been worked out and enclosed as annexes. By the end of the third year the company shall be
self sufficient to meet the enhanced working capital limits /or /for expansion or diversification

PROJECTED CASH FLOWS

A projected cash flow statement of the company at the end of the projected 6 years of working
has been drawn up and given in the statement enclosed. The pictures emerges from a glance of
the date, spread for the 6 years i.e. Increasing levels of reserve accumulation and decreasing
borrowings on the one hand and increasing levels of current assets on the other with
comparatively very less amount blocked in fixed capital. The data also reveals a comparatively
high ratio of equity to debt depicting a growing strong capital base of the unit over loan funds in
the business.

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CONCLUDING REMARKS
GENERAL

From the foregoing detailed analysis of the proposal towards Term loan and working capital
finance for Shri * Pvt Ltd it can be concluded that the Company has been extremely careful and
selective in preparing its business program. It has drawn up the scheme after adequately studying
Wheat and Wheal products market in india. The plans have been made in such a way that the
salability of the market could be almost assured with least marketing cost. The firm has already
made a committed commission agents network in place thus the sale is firmly committed.

TECHNO ECONOMICAL ASPECTS

The Group are well experienced in procuring Wheat and trading in Wheat based products for the
last 5 years. The core founders are qualified and experienced persons and posses all required
technical know-how in selling their products and commercial expertise to run the business of a
day to day basis.. The founders would be on full time occupation with the company. A suitable
and broad based marketing network is already available which could be taken expanded further if
found necessary to achieve for proposed sales targets.

FINANCIAL ASPECTS

The Capital investment proposed is comparatively low and the founders have necessary resources
to bring in and organize the proposed capital. The financial assistance sought from Bank is well
within normal of lending. The projected operational results show reasonable profit generation by
the unit to enable it to meet its debt servicing obligations. A considerable part of cash generation
is also proposed to be ploughed back every year to supplement future working capital
requirement. Thus the venture is a thoroughly well planned organization and is a sound and
viable proposition.

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