Flour Mill Project

PROJECT PROFILE: ROLLER FLOUR MILL CALIDAD FOODS PRIVATE LIMITED (A subsidiary of Calidad India Pvt. Ltd.) Kohara Industrial Area, Mehlon Link Rd, Mehlon, Punjab -141112 Contact : +91-161-3292761 / +91-9646919700 Email : [email protected]

1 CONTENTS PROJECT PROFILE .......................................................... 2 INTRODUCTION .............................................................. 3 MARKET POTENTIAL ....................................................... 3 THE FUTURE ................................................................... 4 THE CURRENT MARKET TREND ...................................... 4 THE COMPETITION ......................................................... 5 CONSUMER INSIGHTS .................................................... 5 MAJOR CHALLENGES ..................................................... 5 BASIS & PRESUMPTIONS ............................................... 6 IMPLEMENTATION SCHEDULE ....................................... 6 TECHNICAL ASPECTS ...................................................... 7 PRODUCTION PROCESS FLOW ....................................... 8 FINANCIAL ASPECTS: Land & Building ............................ 8 FINANCIAL ASPECTS : Machineries & Equipments ......... 9 FINANCIAL ASPECTS : Total Fixed capital ..................... 11 FINANCIAL ASPECTS : Personnel Cost Expenses .......... 11 FINANCIAL ASPECTS : Raw material Expenses ............. 12 FINANCIAL ASPECTS : Utilities Expenses ...................... 12 FINANCIAL ASPECTS : Other Contingent Expenses ....... 12 FINANCIAL ASPECTS : Total Working Capital ................ 12 TOTAL CAPITAL INVESTMENT ....................................... 12 FINANCIAL ANALYSIS : Cost of Production .................. 13 TURNOVER .................................................................. 13 NET PROFIT & NET PROFIT RATIO ......................... 13 RETURN ON INVESTMENT & BREAK EVEN POINT 14 SUPPLIERS : Machineries & Raw Material ............. 15 ABOUT PROMOTER & PARENT CO. ...................... 16

2 (A) PROJECT PROFILE : WHEAT FLOUR (Atta) PRODUCT WHEAT FLOUR (Maida) SOOJI / RAVA & BRAN PRODUCT CODE : CDATA090311 ( for 1 Kg Atta Pack) CDATA090312 ( for 2 Kg Atta Pack) CDATA090313 ( for 5 Kg Atta Pack) CDATA090314 ( for 10 Kg Atta Pack) CDMDA09032x (for Maida Pack) CDSOJ09033x (for Sooji / Rava Pack) CDBRN09034x (for BRAN) QUALITY STANDARDS: The Product may be manufactured as per ‘AGMARK’ Specification. Also follow BIS laid down Specification for the Products: • IS: 1155 – 1968 (Wheat Atta). • IS: 1009 - 1979 (Maida) • IS: 1010 – 1968 (Sooji/Rava) PRODUCTION CAPACITY / PER ANNUM: ITEM QTY (MT) Atta 1800 Maida 4500 Sooji 1080 Bran 1620 MONTH & YEAR OF REPORT PREPARATION: JUN’2016 REPORT PREPARED BY: Project Management of Calidad India Pvt. Ltd In consultation with MSME-Development Institute, 11-AIDC, Karnal.

3 (B) INTRODUCTION There are 812 roller flour mills in our country producing approximate 25 million tons, of milled cereal products worth Rs. 1500 crores. Flour Mills can be installed with minimum capacity of 30 TPD of raw material crushing capacity per day to maximum 1000 TPD. The capacity suggested in this report is for mini flour mill i.e. 30 tons of raw material crushing capacity per day. ( C ) MARKET POTENTIAL As per CII – Mckinsey survey , it is estimated that by 2020 the market for branded Atta will grow up to Rs. 21000 crore from that of Rs. 7500 crore in FY 2004-05 . The Packaged Wheat Flour Market in India started breaking the old age traditions of grinding wheat at local Chakki mills by growing at a whooping compound annual growth rate (CAGR) of 19% and may likely to be double the current size by end of this decade, according to IKON Marketing Consultant’s latest pan India research report titled ‘The Indian Packaged Wheat Flour (Atta) Market – Breaking the Traditions’. However, the report noted that the wheat flour market largely dominated by local chakki mills in India; the branded packaged wheat flour segment is emerging rapidly in the country by offering better quality, nutrition and convenience. The Indian packaged wheat flour market comprises few national players and large number of regional and private label brands operating at pan India or restricted geographic market based on their size and capacity. In terms of volume, the packaged wheat flour market in India was more than 2,500 thousand tons during fiscal 2014-15, growing at healthy double digit CAGR of 15% over the past three years. The urban market dominates packaged wheat flour market in India. As per IKON’s estimate, urban market occupies more than 90% of the total market where as due to penetration of packaged food in rural India, rural consumers’ willingness towards the packaged wheat flour found considerably increased.

4 The annual per capita consumption of packaged wheat flour in India remained nearly at 1.85kg during fiscal 2014-15. However, urban market leads in per capita consumption of packaged wheat flour with almost 5.5kg, making the packaged wheat flour an urban phenomenon. North Central region is the major consumer of the packaged wheat flour in India. According to IKON’s estimation for fiscal 2014-15, in terms of value, the North-Central region comprises almost 44% of the overall India’s packaged wheat flour market. THE FUTURE The growing numbers of working women and their inclination towards the convenient food products; will enhance the future demands of packaged wheat flour in India. According to the IKON’s estimates, if the growth trajectory remains the same, the market of packaged wheat flour may likely to be more than double the current size by the end of current decade. The marketer needs to come up with new and innovative product packaging and product proposition for differentiating themselves and for sustainable long-term growth. It also expected that the consumers would eventually give more importance to its origin of ingredient and related convenience factors in case of Packaged Wheat Flour. Promoters of the Calidad Foods Pvt. Ltd. are highly optimistic about the packaged wheat flour market in India. The current growth figures looks promising, however the players with strong brand image, product quality, distribution network and constant R&D for product innovation capabilities are going to stay in the market. THE CURRENT MARKET TREND With the entry of large number of market players having better quality, fresh and convenience-packaged flour; the wheat flour consumption trends have been shifting towards the branded packaged atta. The rigorous advertising in print and visual media campaigning on quality, hygiene, health and convenience factors by the players are helping to heighten the sales of packaged wheat flour in the country.

5 THE COMPETITION The Indian packaged wheat flour market consist of plenty of brands each one is trying to distinguish themselves with origin of wheat, manufacturing process, quality, taste, textures and price to attract customers. Besides leading brands, there are more than 500 regional brands in India. Each flourmill has its own brand, sometimes even more than one brand of packaged wheat flour. ITC’s ‘Aashirvaad’ is the clear market leader among the national players in branded packaged wheat flour market in India with occupying more than 35% market share where as several regional brands (produced by flourmills serving region specific market) together occupy major 40% share of market. Shakti Bhog with wider penetration holds almost 12% , where as other national players such as Pillsbury, Nature Fresh and Annapurna occupies 10% market share. Whole wheat flour is used in making Chapaties, Puries, Parotha and other roasted cereal based products. Wheat flour or Maida is a basic raw material for making Bread, Biscuits Cakes and other bakery products. Sooji / Rava is used in many sweetmeat products. Bran separated on milling is used as cattle feed. The products sold under brand names are very few. The concept for branded cereal flour products is now increasing. The big giants like Hindustan Lever, NEPC Agro, Nirma etc. have jumped in to this lucrative industry. The above said statistic substantiate the Calidad’s Promoter’s planning to get into and penetrate the untapped 35% price sensitive market by offering at par quality, nutrition & better price convenience. CONSUMER INSIGHTS The urban consumers belonging to upper & upper-middle Class dominate the consumption of packaged wheat flour in India; among which working couple, young single living - health conscious family consumes highest packaged wheat flour in India. The various underlying factors driving the consumers for purchase of packaged wheat flour are, to fulfill the basic nutrition needs, for convenience and time saving, lack of storage of wheat in bulk and perceived high quality of packaged wheat flour. THE MAJOR CHALLENGES More than 70%, particularly health and quality conscious consumers prefer to buy specific brands of packaged wheat flour showing the brand loyalty. Due to varied geographical taste preferences and beliefs, to satisfy Indian consumer with standard offering remain the biggest challenge for marketers and so as the case with packaged wheat flour.

6 (D) BASIS & PRESUMPTIONS 1. It is presumed that the unit will run three shift per day and 300 working days per annum. 2. The following extraction rates are presumed: Ø Maida : 50 % Ø Sooji : 12% Ø Atta : 20% Ø Bran : 18% Extraction rates are only suggested. Miller can change according to demand, Wheat quality & climatic conditions. 3. Labour wages have been taken as per market rates & compliance to minimum wages 4. Different varieties of wheat may be blended for producing desired end product. 5. The rate of interest has been taken 14% on an average both for fixed investment and working capital. 6. The rates quoted in respect of Machinery/equipment raw materials are those prevailing at the time of preparation of report and are likely to vary from place to place and supplier-to-supplier and necessary changes are to be made as and when required. (E) IMPLEMENTATION SCHEDULE The approximate time required for various activities is given below. However, it may vary from place to place depending upon the local circumstances: - i. SELECTION OF SITE : 1 Month ii. SSI REGISTRATION : 15 Days iii. PROJECT REPORT PREPARATION : 1 Month iv. AVAILABILITY OF FINANCE : 4 Months v. PLANT & MACHINERIES PROCUREMENT, ERRECTION, COMMISSIONING and TRIAL RUN etc. : 8 Months

7 (F) TECHNICAL ASPECTS 1. PROD UCTION D ETAILS & PROCESS OF M AN UFACTURE : Wheat is first cleaned thoroughly to remove dust, stone and other foreign matters clean wheat is tempered before grinding by treating with water so that the bran is separated from the endosperm. The tempered wheat is crushed between corrugated rollers (Break rolls). The first break rolls are set relatively far apart to grind the wheat lightly, while successive break yield finer and finer products. The first break is separated by sieving or bolting in to very fine particles (flour), intermediate particles (middling’s) and coarse particles (stock). The stock is then sent to second break rolls. This process may continue through 5 to 6 breaks. The stock contains pieces of endosperm and bran and the stock from the last break is principally bran. The middling’s contain endosperm, bran and germ which are then successively classified and some of the bran removed are sent to reduction rollers. These are smooth rollers, but like the break rolls they are graduated so that successive reduction becomes finer and finer. After each reduction, sifters separate the flour, middling and stock, this process is continued until most of the endosperm has been removed as flour and most of the bran has been separated in the sifters. 2. Power requirement of the unit is 300 HP.

8 3. There are no pollution problems for unit except dust which may damage the plant and machinery and adversely affect the health of workers also, for this cyclones may be used to separate dust. 4. The Miller should be made aware about the energy requirement of the milling system and for this selection of motors should be proper. (G) FINANCIAL ASPECTS 1. LAND & BUILDING Ø Land – 2000 sq. Yard @ Rs. 2000/- per sq. Yard = Rs. 40,00,000/- Ø Built up area for the plant and Machinery including, Storage bins for wheat conditioning up with 3 stories (ground +2) having 36” height, 20000 sq. feet @ Rs. 1000/ sq. feet = Rs. 20000000 TOTAL COST OF LAND & BUILDING = RS 24000000

9 Qty Rate Price (Rs) 2. MACHINERY & EQUIPMENTS Sl. No. Description of Machines 1. Single bucket elevator without belt and bucket 7 44000 308000 2. Reel machine (3 segment) 1 34500 34500 3. Rotary separator with aspiration channel 2 96000 192000 4. Scourer machine with aspiration channel 2 68000 136000 5. Intensive dampener 1 45000 45000 6. Rotometer 1 20000 20000 7. De-Stoner without fan & cyclone 1 70000 70000 8. Indent cylinder 1 99000 99000 9. Screw conveyor 7 m 1500/m, 4.5 m 1500/m - - 40000 10. Dust cyclone with air seal dia 1120 2 19000 38000 11. Dust cyclone with air seal dia 960 3 18000 54000 12. L.P. Fan for 1st Cleaning 1 28000 28000 13. L.P. Fan for Main Cleaning 1 22000 22000 14. L.P. Fan for DE stoner 1 22000 22000 15. L.P. Fan for final Cleaning 1 24000 24000 16. Magnets 6”*12” 4 2000 8000 17. Silo gate 10 1650 16500 MILLING SECTION 18. Roller Mill body 3 120000 360000 19. Rolls dia 250 * 1000 mm (Indian) 6 35000 210000 20. Roll Grooving & spindle cutting 6 set 3200 19200

10 21. Plan sifter 8 feed /16 sec. 1 170000 170000 22. Purifier 1 55000 55000 23. Bran – finisher 1 19000 19000 24. Pneumatic lifts 14 set 17500 245000 25. Triple worm 8 mt. Each 3 set 1800 5400 26. L.P . Fan purifier 1 28000 28000 27. Dust cyclone dia 1120 1 19500 19500 28. H.P. Fan 1 49000 49000 29. Supper cyclone 2 sets 27500 55000 30. Bolting cloth lot 66000 66000 31. Misc. accessories such as inspection, cover & joint range etc. 14000 32. Electrical motors 600000 33. Electric panel board fitted with starter main switches, cables, cable fittings, volts and AMP meters, AC.B capacitors etc. 450000 34. Reduction gears standard make 160000 35. V-Groove, Pulleys, Couplings, V-Belts etc. 66000 36. Erection Material such as angle, Channel Sheet, Iron etc. 400000 37. Tools and other equipment required during Erection 80000 38. Consumable items such as Nut, Bolt, Gas, and Welding Rods, Namda, Fevicol etc. 38000 39. Weighing scales 4 set 10000 40000 40. Erection and Consultancy charges. 250000 41. Misc. 500000 TOTAL 5093900

11 3. Pre – Operative Expenses. Rs. 1000000 TOTAL FIXED COST ( 1+2+3) - Rounded off = Rs. 30000000 / - 4. WORKING CAPITAL ( PER MONTH ) : ( i ) PERSONNEL : Sl. No. Designation No. Salary/pm Total Salary 1. Miller–cum-Chemist. 1 25000 25000 ii. Plant Foreman 1 17500 17500 iii. Electrician 1 12500 12500 iv. Operator 3 10000 30000 v. Un-Skilled Workers 10 6250 62500 vi. Accountant 1 15000 15000 vii. Clerk / Store-keeper 2 10000 20000 viii. Sales Supervisor 1 15000 15000 ix. Peon 1 6250 6250 x. House-Keeper 2 6250 12500 xi. Security 2 6250 12500 Total : 228750 /- Pre-requisites @ 10 % of Total Salary : 28750 TOTAL EXPENSES UNDER PERSONNEL COST HEAD : RS. 257500 / -

12 ( II ) RAW MATERIAL / PER MONTH: Value (Rs.) Sl. No. Particulars Qty Rate i. Wheat blended of different category 750 MT 1500 11250000 ii. Gunny Bags 8200 20 164000 TOTAL EXPENSES UNDER RAW MATERIAL COST HEAD : RS. 11414000 /- ( III) UTILITIES / PER MONTH: i. Power : 300HPx.746x24X25x80% = 107424 KWH @ Rs. 7.40 per unit. = Rs. 794938 ii. Water 3000 Ltr. / per day ( from Bore-well ) Approx = Rs. 5062 TOTAL EXPENSES UNDER UTILITIES COST HEAD : RS. 800000 /- ( IV) OTHER CONTINGENT EXPENSES / PER MONTH: v Postage and Stationery / Telephone Charges / Consumables / Repair & Maintenance / Advertisement & Publicity / Transport / Misc. TOTAL EXPENSES UNDER OTHER CONTINGENT COST HEAD : RS. 200000 /- TOTAL WORKING CAPITAL / Month ( I+II+III+IV) = Rs. 12671500 / - Working Capital for Two Months = Rs. 25343000 5. TOTAL CAPITAL INVESTMENT : i. Fixed Capital = Rs. 30000000 ii. Working Capital for 02 months = Rs. 25343000 Total Capital Investment : Rs. 55343000

13 (H) FINANCIAL ANALYSIS ( I ) COST OF PRODUCTION / PER ANNUM : (Rupees)( i ) Total recurring cost per year : 152058000 / -( ii ) Depreciation on building @ 5% per annum : 1000000 / - ( iii ) Depreciation on machineries & equipment @ 10% Per Anuum : 509390 / - ( iv ) Interest on Loan Amount ( 80% of total Investment ) @14% PA : 6198416 / - TOTAL COST OF PRODUCTION PER ANNUM : Rs. 159765806 / - ( II ) TURNOVER / PER ANNUM : Item Values( i ) Maida 4500 MT @ Rs. 20,000 / MT : 90000000 / - ( ii ) Sooji 1080 MT @ Rs. 20,000 / MT : 21600000 / - ( iii ) Atta 1800 MT @ Rs. 19000 / MT : 34200000 / - ( iv ) Bran 1620 MT @ Rs. 14000 / MT : 22680000 / - TOTAL TURNOVER PER ANNUM : Rs. 168480000 / - ( II ) NET PROFIT ( before Income Tax ) / PER ANNUM : Profit = Sale / Turnover - Total cost of production = 168480000 - 159765806 NET PROFIT (before income tax) PER ANNUM : Rs. 8714194 / -

14 ( III ) RATE OF RETURN / RETURN ON INVESTMENT ( ROI ) ROI = NET PROFIT x 100 TOTAL INVESTMENT = 8714194 x 100 55343000 RATE OF RETURN / RETURN ON INVESTMENT : 15.75 % ( IV ) BREAK EVEN POINT ( BEP ) Fixed cost per Annum ( Rupees ) ( i ) Depreciation on machinery @ 10% p.a 509390 / - ( ii ) Interest on Total investment 6198416 / - ( iii ) 40% of Salary & wages 1236000 / - ( iv ) 40 % of Utilities Expenses 3840000 / - ( v ) 40 % of other contingent expenses 960000 / - Total Fixed Cost / P.A. = Rs. 12743806 / - BEP = Fixed cost x 100 ( Fixed Cost + Profit ) = 12743806 x 100 (12743806 + 8714194 ) BREAK EVEN POINT ( BEP ) : 59.39 %

15 ( I ) ADDRESSES OF MACHINERY & EQUIPMENT & RAW MATERIAL SUPPLIERS Machineries & Equipments Suppliers : • M/s Flour Tech. Engineers (P) Ltd., 16/5, Mathura Road, Faridabad –2 • M/s Mukul Brothers Engineering Works, P.O. Box. No. 325, Kisan Flour Mill Compound, Tirthankar Mahavir Marg, Meerut – 250002( UP). • M/s Northern India Flour Millers Corporation, 7, Maqbool Road, Amritsar – 143001(Pb). Raw Material Suppliers: • Raw materials are easily available in the local market

16 ( I ) ABOUT PROMOTER & THE PARENT COMPANY Birendr a Ku mar, Promoter -Director & CEO, Calidad India Pvt. Ltd., a Member ofInstitution of Engineers (India) is B. Tech (E & C) followed by Master Degree from BITS,Pilani with added credential of certified `` Master Black Belt ‘’ in `` 6-SIGMA ‘’ fromUniworld Inc., USA.Mr. Kumar has professional career of over 20+ years spanning across diverse manufacturingorganizations like HCL-HP, LG, Sahara & LS Industries. His valuable expertise &transcendent Management skills are an indispensable asset to brand’s manufacturing backedwith a vision that is unsurpassable. His areas of proficiency are in ``Manufacturing with corecompetencies in Quality Engineering from conceptualization to commercialization’’.About Calidad India Pvt. Ltd.Calidad India PVT. LTD., incorporated in March’2011 , an ISO 9001, ISO14001 &OHSAS18001 certified, Hi-Fashion lifetrend apparel manufacturing Co. with an un-compromised commitment to ``Deliver right product first time, every time ‘‘, is one of theleading suppliers of exhaustive range of Readymade Garments for Men’s, Kid’s & Ladieswear.Calidad India’s manufacturing facility is based at Ludhiana, Punjab (India), the Asianheartland of garment manufacturing with an associate manufacturing facility at Dhaliara(H.P.) – a tax holiday zone giving competitive edge to our brand-buyers & retailers. BesidesBesides being a manufacturing partner to brands like – Van Heusen, Louis Philippe, AllenSolly, Peter England, Beverly Hills Polo Club (BHPC), Westside, Swiss- Polo, Provogue,Splash & American Swan, Calidad India manufactures a limited but specialized apparelgarment range of it’s own brands `ZOUK , CALIDAD & LIFETREND ‘’ produced by it’sexperienced team, ensuring a blend of elegance & style.While pioneering the industry standards of social & environmental responsibility, besidesutmost safety at workplace, Calidad India leverages on Product Engineering & ProductQuality Assurance (PQA), Design Quality Assurance (DQA) & sub-vendor’s i.e. SupplierQuality Assurance (SQA) through systematic Quality Function Deployment (QFD) toadvance the business process.Besides highly experienced management, Calidad India’s dedicated workforce consisting ofskilled workers, production & Quality professionals having an eagle- eye, work `` Hands-in-Hand ‘’ to achieve the target.