You are on page 1of 77

COCONUT DEHUSKER BUSINESS PLAN

DISHA PROJECT

BUSINESS PLAN

Submitted to

NATIONAL INNOVATION
FOUNDATION (NIF)

For

The Commercialization
Of

“COCONUT DEHUSKER”

Innovated By

Mr. R. JEYASEELAN

1
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Submitted by

Team: VASS-IFIM

Team Coordinator: Surabhi Rastogi

Members : Samrat Ghosh

Avijit Sarkar

Vinny Bedi

Institute of Finance and International Management

#8P & 9P, KIADB Industrial Area,


2nd Phase Electronics City,
Bangalore – 560 100,
Karnataka

2
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

ACKNOWLEDGEMENT

This project has been written in simple and lucid style


for the better understanding and appreciation of study. It
has been compiled systematically to enable sure one to
evaluate detail of the project.
Needless to say we are deeply indebted to our innovator
Mr. R. Jeyaseelan for providing us the required information
and timely help during the course of this investigatory work.
We are very much grateful to NIF for giving us an
opportunity to develop this innovation and be a part of this
business plan competition.
This acknowledgement would fall short of completion if
we fail to mention Mr. P Vivekanandan, SEVA. We would
like to express our deep sense of gratitude for his constant
and cheerful encouragement.
No words can crystallize in expressing our respect and
gratitude towards our parents and siblings.
3
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

CONTENTS

Mission 8
Objective 8
Positioning Statement 8

1. Executive Summary 9

1.1 Innovators Detail 9


1.2 Developing the innovation 11
1.3 Recognition and Awards 12
1.4 The Product 12
1.5 Target Market 12
1.6 Price 13
1.7 Entry Barrier 13

2. Business Description 14

2.1 About the Business 14


2.2 Business idea 14
2.3 Product Description 14
2.4 Features and Benefits 15

3. Scouting Document 16

4. Evaluation Document 20

4.1 The Product and Technology 20

4.1.1 General Description of Innovation. 20


4.1.2 Salient features of the machine. 20
4.1.3 Functional and Operational Performance 21
4.1.4 Working Principle 21
4.1.5 Construction 22
4.1.6 Technical Specification 23

4
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

5. Market Analysis Summary 24

5.1 Marketing Strategy 24

5.1.1 Target Market 24


5.1.2 Mass diffusion in coastal areas. 24
5.1.3 Other Parts of the world 27

5.2 Product Positioning 28


5.3 Demand estimation – Market Research 28

5.3.1 Customer Feedback/Perception 28


5.3.2 Feedback of organizations contacted personally 29

5.4 Pricing Strategy 29


5.5 Promotion Strategy 30
5.6 Distribution Strategy 30
5.7 Sales Strategy 31
5.8 Location Plan 33
5.9 Competitive analysis 34

6. Financial Plans and Analysis 35

6.1 Bill of Material 35


6.2 Total overheads of the workshop 36
6.3 Costing 36
6.4 Estimate of working capital requirement 37
6.5 Financial Projections 38
6.6 Cost Benefit Analysis 40
6.7 Operating Costs 41
6.8 Projected Trading Account 42
6.9 Projected Profit & Loss Account 43
6.10 Projected Balance Sheet 44
6.11 Ratio Analysis 45
6.12 Return on Investment (ROI) 47
6.13 Internal Rate of Return (IRR) 47
6.14 Net Present Value (NPV) 47
6.15 Break-Even Analysis 48
6.16 Gannt Chart – Implementation Schedule 49
6.17 Successful declaration of the Project 50
6.18 Rights on Know-How and related Matter 50
5
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

7. Manufacturing Section 51

7.1 Advantages of our location 51


7.2 Production needs 51
7.3 Quality Control 52
7.4 Availability and reliability of the suppliers 53

8. Critical Risks Section 54

8.1 Internal Strengths 54


8.2 Weaknesses 54
8.3 Opportunities 54
8.4 External threats 54
8.5 Risk Analysis 55
8.6 Business Risks 55

9. Strategy for Technology Licensing 57

10. Future Products 58

Annexure:

Annexure I: Innovation Catalogue 60


Annexure II: List of organizations contacted through Email 63
Annexure III: List of organizations/customers contacted over phone/direct 66
Annexure IV: People contacted for the successful completion of the Bplan. 67
Annexure V: Layout, floor plan for the manufacturing area 69
Annexure VI: Technology Transfer document 70

Conclusion 73

Bibliography 74

6
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

List of Pictures
#1 Mnaual Coconut Dehusker 10
#2 Innovator at Work 11
#3 Opportunity for Women 19
#4 Labour at Work 22
#5 Future Products 58

List of Figures
#1 State wise production of coconuts 25
#2 Operating costs per thousand Coconuts 41
#3 Break-Even analysis 48
#4 Layout of the Manufacturing Area 69

List of Tables
#1 Production of coconuts in Kerala 25
#2 Production of coconuts in Tamil Nadu 26
#3 Production of coconuts in the World 27
#4 Sales forecast for two years 33
#5 Cost of production 38
#6 Risk Analysis 55

7
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

MISSION

The primary value of our business plan is to create a written outline


that evaluates all aspects of the socio-economic viability of our business
venture (manufacturing a coconut dehusking machine) including a
description and analysis of all business prospects. Endeavor has been put to
create a Business Plan, which has substance to do with the success or failure
of the business.

OBJECTIVE

To develop a promotional strategy for a new innovation to generate


public awareness for the availability of such type of coconut dehusking
machine in the market at a very reasonable cost.

POSITIONING STATEMENT

The ‘Coconut Dehusker’ is a mechanical device that efficiently and


conveniently dehusks coconuts to get rid off labour problem and also to

8
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

enhance the productivity. This machine is extremely beneficial for coconut


traders and industries.

1. EXECUTIVE SUMMARY

1.1 Innovators Detail

Mr.R. Jeyaseelan (44) has studied up to SSLC and owns a coconut garden and
mango orchard in Koomapatti village, Virudhunagar District. After finishing his
studies he has been looking after his 7-acre coconut and mango garden. In addition to
his own land, he collects coconuts from other farmer’s field on contract basis i.e., he
is entitled to harvest coconuts from other farmers on annual lease basis. All the
coconuts collected were given to local merchant who in turn will sell it to other states.
Jeyaseelan like others involved in coconut farming, employed daily wage labourers to
husk the coconuts.

Jeyaseelan as Captain of District Level Kabadi Team


Mr. Jeyaseelan in his leisure time plays “Kabadi” and he earned good name in his
village in this game. During festival times he will be representing Kabadi team to
nearby villages and help his team to win many matches. Later he has been selected
for the District level Kabadi team for the Virudhunagar District. By seeing his talent
he has been chosen as captain for the district level team.

His Job
Mr. Jeyaseelan wanted to dehusk coconuts by himself and promote direct selling
to other states. He started dehusking coconut through manual methods by hiring
labourers. He performs dehusking and packs the coconuts in gunny bags. He sends
lorry load of husked coconuts through agents at Madurai and from there to
Maharashtra, Gujarat and Andhra Pradesh.

Problems
Anybody involved in growing and selling coconuts would vouchsafe for the fact
that husking them is certainly one of the more tedious part of the job. Forty four year
old Mr. R. Jeyaseelan, from Ramasamiapuram (Taluka: Srivilliputhur, District:
Virudhanagar), felt that too. Problems usually faced by coconut dehuskers are:

9
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
1) It became increasingly difficult to get people to dehusk nuts
2) Injuries sustained by dehuskers to their hands and other parts of their body were
very common
3) It is more time consuming
4) Productivity gets affected.

Pic -1: Manual Coconut Dehusking

Origin of Idea
He felt that there must be some way of making coconut dehusking less time and
labour consuming. This search for a solution became a passion for him. He would spend
all his leisure time thinking about probable designs and mechanisms. He used to go to the
weekly market at Tilagarthidal, 80 kms away from his village to sell his coconuts. He
began to make frequent trips as he started spending more time there to pursue his ideas.
His expenses mounted and he ended up spending more than Rs. 1,00,000.
Jeyaseelan with the tenacity that he often showed while playing Kabadi continued
to focus on his ideas of devising a coconut-husking machine. Over the last 9 years,
between 1991 – 2000, he had good experience in all aspects of dehusking coconut,

10
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
engaging laborers in such a way so as to get maximum efficiency and output from this
venture. He devoted eight months to the problem of developing a mechanical husker.

1.2 Developing the Innovation


Initially he developed a three-blade model where one blade would be inserted
inside the husk of the nut and the other two blades would help in the process of peeling.
However, the entire process was time consuming and Jeyaseelan switched to a two-blade
model.
Efficiency increased and he decided to standardize this model. He fitted a 1.5 hp
motor that was coupled through a belt to a long, cylindrical metal rod. Two sharp blades
were fixed at the tip of the rod. The blades were three quarter of an inch long and placed
one inch apart. The rotating motion of the blades would husk the coconuts easily. A
switch was used to operate the machine. Initially, the switch could be turned only by
hand. He worked on it further and feet could then operate it.

Pic – 2: Innovator at Work

11
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

1.3 Recognition and Awards


• Jeyaseelan learnt about the National Grassroots Technological Innovation and
Tradition Knowledge awards 2001 organized by the National Innovation
Foundation (NIF) from SEVA, a local NGO.
• He won the Tamil Nadu state prize of Rs. 25,000. His machine was featured in the
local media.
• The award and the recognition made him a popular and respected figure in his
village and surroundings areas.

1.4 The Product

A low price, low operational and low maintenance cost offering for coconut
traders, coconut shop owners and industries using coconut as their raw material to obtain
the finished coconut based products i.e. to all those who dehusk the coconuts in a large
amount mostly in the Southern region and other parts of India. This product will be a
great help to dehuskers who have been seeking better options then the conventional
manual ways for dehusking coconuts.

USP of the product


Low price, low operational and low maintenance cost offering to dehuskers that

12
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
will increase efficiency and productivity. Risk factor and health problems as injuries in
hands and other parts of the body are minimized. This product is easy to use and effort
required as compared to the conventional manual way of dehusking is very less.

1.5 Target Market

This product is targeted mainly for the coconut traders in the southern region of
India where coconuts are grown in a large quantity and dehusking is a must for their
business. They transport huge quantities of coconut to the northern and various part of
India. The next important sector is the coconut shops (ex. 30,000 shops in Tamil Nadu
itself). Finally, industries, which use coconut as their raw materials to produce coconut,
based products like hair oil, coconut biscuits, cooking oil, and Coir pith etc.

1.6 Price

He fixed the selling price of the husker at Rs. 13,500. Since he was a member of
the coconut merchants association, he could convince many others to buy the machine.
He sold 30 pieces. Nobody tried to copy his design as he got his innovation patented with
the help of SEVA.

1.7 Entry Barrier


The conventional way of manually dehusking the nuts dominates the market in
the concerned regions. Coconut dehusking is mostly a family business and so old traders
may be reluctant to accept this product and hence may not invest. Labourers are more
comfortable with the existing method of dehusking and may take some time to get
familiarized with this innovation.

13
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

2. BUSINESS DESCRIPTION

2.1 About the Business


Coconut Dehusking is an important aspect in a coconut industry. Dehusked
nuts are sent to various large scale and small-scale industries using coconuts as their
raw materials for the final products. The husk of the nuts is not only used for
making ropes & mats but also as a fertilizer in the fields.
Coconuts are usually dehusked manually where the labourers faces a lots of
problems as it is tiring and also causes injuries in hands and other parts of the body.
Thus, dehusking mainly faces labour problems.
Mr. Jeyaseelan has developed a simple labour saving mechanical device called
'Coconut Dehusker'. The dehusking is done with the help of a motor and blades that
on rotation helps to dehusk the coconut easily to the desired level. This machine
helps to eliminate the labour problem, reduces the risk and also increases the
productivity to a considerable extent.

2.2 Business Idea


India is having a huge coconut industry, and so the prospects of this product
seem to be huge. The business lies in manufacturing of the “Coconut Dehusker”,
finding target markets and prospective customers and selling the product.

14
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

2.3 Product Description


The dehusker is of extremely robust construction with a bare minimum of moving
parts. Its speed of operation and simplicity is impressive as it takes only about six
seconds to dehusk a nut with 100% husk removal. The machine has been modified
with provision to dehusk all size nuts.

2.4 Features and Benefits

Fast and efficient - Dehusks a Nut in approx 15-20 seconds, 250 per hour. At 8
hr per day operation, production of over 2,500 nuts per day per unit is feasible.

Duration of operation - 24-hr/day Operation providing full production with


minimal downtime.

Portable - Great for use in factory or field.

Safe and reliable.

Robust Construction - All parts are built to the highest quality standards with
long life foremost on our mind. Hi-tensile Steel Blades Features a two-blade
separator made of high tensile steel, which is practically impossible to break.

15
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
Low Maintenance - The only required maintenance takes about 10 minutes: daily
check of all nuts and bolts, and oiling twice a day. Blade sharpening is not
necessary - they should last for years.

Easy and efficient - Easy to Operate Once installed, personnel can be trained to
operate the unit within half an hour. Frees Staff for Other Duties Valuable
employees can be assigned to other tasks, making the organization’s operations
more efficient.

Reduces Bodily Harm - Compared to the old manual methods, the unit
eliminates repetitive strain, gnarled hands, not to mention cuts from machetes and
spikes.

Reduces Down Time - All of the above adds up to greatly reduced downtime.

Powered by Electricity - The De-husker is powered by a mounted electric motor.

9 SCOUTING DOCUMENT (SD)

1. Category: Agricultural and Coconut business.

2. Name of the Innovator: Mr.R. Jeyaseelan

3. Title of the Innovation: Coconut Dehusking Machine

4. Occupation of the Innovator: Owner of a coconut garden and mango orchard,


coconut merchant.

5. Background of the Innovator: Mr.R. Jeyaseelan (44) has studied upto SSLC and
owns a coconut garden and mango orchard in Koomapatti village, Virudhunagar
District. After finishing his studies he has been looking after his 7-acre coconut
and mango garden. In addition to his own land he collects coconuts from other
farmers field on contract basis i.e., he is entitled to harvest coconuts from other
farmers on annual lease basis. All the coconuts collected were given to local

16
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
merchant who in turn will sell it to other states. Mr. Jeyaseelan in his leisure time
plays “Kabadi” and he earned good name in his village in this game.

Educational qualification: High School dropout.


Total Income: Rs. 15,000 per month.

6. Summary: This innovation relates to a device that is used by the coconut


merchants and also in coconut industries for continuous dehusking of the nuts in
large quantities.

Mr. Jeyaseelan has been working in the idea of developing mechanical device for
8 months during 1999 and he came out with few models. Initially he developed 3-
knife model. He has developed a simple labour saving mechanical device called
'Coconut Dehusker'. A 1.5 HP Electric motor is coupled through a belt to a long
cylindrical metal rod. The tip of the rod is fixed with two sharp blades at one side.
The blades are at 3/4' length.

Features of the Entry:

1. Novelty of the innovation, It is a specialized machine that is used by the


feature or subsystem. coconut merchants and also in coconut industries
for continuous dehusking of the nuts in large
quantities.
With this machine, the coconut is being dehusked
in a uniform manner and is neatly and
conveniently collected and recovered. This
machine consists regulatory method used in the
conveying system and peeling system to make the
coconut to be allowed to be dehusked one by one.
Another feature of this machine is that it is easy in
operation and maintenance.
Through the rotation of the input shaft, the entire
coconut is dehusked.
2. Comparison to current
conventional alternative by

a) Functioning Easier in operation, easier in maintenance, more


productivity, energy efficient, labour efficient.

17
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

b) Cost Cost of the machine is high but output in terms of


cost per kg reduces considerably.

c) Removal of drudgery Removes drudgery of cutting coconuts efficiently


at fast rate in coconut industries.

3 Limitations Dehusking huge amount (more than 10,000) nuts


a day in this machine (i.e. 6 such sets) is not
advisable since it is not economical. So the
innovator is into developing a new product
described under Future Products.

4. Specification
Capacity 250 nuts /Hr.
Shaft rotating 1420r/min
speed
Motor Power 1.5 H.P.
Weight 135 kgs.
Outside 48*48*30 inches
dimensions

5. Commercialization Innovator has sold 30 machines. Since he is a


member of the Coconut Merchants Association, he
a) How many has been could convince many others to buy the machine.
made/sold/used locally?
Very high for the coconut traders and industries
b) What is the diffusion where dehusking of coconut is required especially
potential? in Kerala and Tamil Nadu where the concentration
of coconuts is maximum.
6. Current and future This machine to be used in the coconut industries
application areas. is related to continuous dehusking of large
quantities of coconut in a continuous fashion.

7. Significance to women, This innovation can provide opportunity for the


handicapped and other women employment as they can work in the
marginalized sector. coconut industries.
8. IPR considerations Patent filed (with the help of SEVA)
9. References as provided by SEVA
the innovator/NIF, Scout/ Mr. P.Vivekanadan
Nodal Officer/ Collaborator 43-T.P.M. Nagar, Virattipathu,
Madurai-625010, Tamil Nadu.
Ph No. 04522380082.
Email: numvali@vsnl.com

18
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Any other reputed person of Mr. Raghuram – Rajapalayam


the village/town/city. Ph: 09843062898
Res. 04563 226208
10. Details of the scout: SEVA

Scout’s assessment of This proposal was initiated from SEVA only.


innovator’s keenness in
augmenting the innovation.

Scout’s assessment of Quite convinced. He has already sold 30 machines.


innovator’s competence in
augmenting the innovation.

Pic –3: Opportunity for women

19
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

4. EVALUATION DOCUMENT (EV)

4.1 The Product and Technology

4.1.1 General Description of the Innovation


A mechanical device to dehusk coconuts is developed by Mr. Jeyaseelan. It is a
simple labour saving mechanical device called “Coconut Dehusker”. He invented this
machine when he came across some labour problems in dehusking coconuts and also to
increase the productivity. The machine consists of a 1.5 HP Electric motor, which is
coupled through a belt to a long cylindrical metal rod. The tip of the rod is fixed with two
sharp blades at one side. The blades are at 3/4' length and at 1" interval. These blades
and rotation help to dehusk the coconut easily to the desired level. In the innovators
work spot there are six such sets. Each set is coupled to a 1.5HP electric motor. With the

20
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
use of this device the husk could be separated into 4 pieces still leaving some coir fibers
in the coconuts.

4.1.2 Salient Features of the machine


Coconut is dehusked into four or eight uniform pieces with 100% yield.
Low initial Cost (Rs. 13,500/-)
200 – 250 nuts can be dehusked per hour. In an average about 12,000 – 13,000
could be dehusked in a shift of 8 hours.
Processing Cost is less.
Less manpower to operate (6 labourers are needed per shift)
Less risky.
Machine is compact and made of iron.
Saves time on extra efforts to be put in dehusking the nuts manually. Rotation of
machine blades facilitates dehusking the nuts easily. (Dehusking one Nut – 20
Secs.)
A novel machine in terms of its cost effectiveness, efficiency, safety
considerations, new design of feeding, time saving and power transmission
system.

4.1.3 Functional & Operational Performance

• The two edged blade which are at 3/4' length and at 1" interval ensures dehusking
of the nuts to the desired level with minimum effort. This parameter not only
saves manpower cost but also improves productivity.
• A better grip on the coconut is provided by the Iron Plate, which acts as the
stopper that prevents the nut to slip away vertically.
• Well-optimized power transmission, which ensures less consumption of
electricity.
• The coconut dehusking capacity of this machine is 200-250 nuts per hour.
• If customer’s demand, provision for dehusking the coconuts could also be
incorporated without many changes in the power transmission and feeding and
dehusking system.
• The machine is fabricated in such a way that wastage of raw materials is
minimized.

21
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

4.1.4 Working Principle


The coconut-dehusking machine, works on the principle of conversion of
electrical energy from electrical motor into mechanical energy in terms of rotation of
the centrally mounted iron shaft. The power is being transmitted to the rotating shaft
from the electric motor through the Belt-drive. This rotation of machine blades
facilitates the dehusking process. A better grip on the coconut is provided by the Iron
Plate, which acts as the stopper that prevents the nut to slip away vertically.

22
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Pic – 4: Labour at Work

4.1.5 Construction
This machine consists of the following main parts:
a. Electrical motor.
b. Shafts.
c. Pulley, Flywheel & V belts.
d. Bearings with box
e. Centrally mounted rod, which acts as the cutter.
f. Iron Plate support.
g. Bolts and nuts.
h. Foundation.
i. Condenser
j. Motor Starter
k. Iron frame
l. Handle pipe
m. Steel cover.

A fitter, Welder, Electrician and a Painter are employed to assemble the machine
parts to make the machine ready for sale.

Power Transmission
The machine consists of Electric motor (1.5 HP) having a Pulley attached to the
flywheel, which is attached to another shaft through the V- Belt drive. The pulley is
mounted on the other end of the motor shaft and is attached with the flywheel through the
V-belt such that the power from the motor shaft is transferred to the driven shaft through
the V-belt.

Feeding and Dehusking Mechanism

23
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
The coconuts are fed into the machine manually by the labourer itself. The
person stands in front of the machine’s double-edged blade and feed the coconut into the
blade. The motor is started through the starter and the coconut is being dehusked by the
rotation of the rotating shaft. Generally four passes are made to totally dehusk the
coconut.

4.1.6 Technical Specification

• Electrical Motor
• Volts – 200/220
• Single Phase – 50 Hz.
• KW/HP - 1.5
• RPM – 1420
• Ampere – 8.5
• Power consumption- 12-units/ shift.

5. MARKET ANALYSIS SUMMARY

5.1 Marketing Strategy

5.1.1 Target Market


Coconuts are mostly found in the coastal areas of India, mainly in states of Tamil
Nadu & Kerala. The innovator targets “ J J Coconut Dehusker” in all parts of India, but
initially to start with it is targeted in states of Tamil Nadu and Kerala.

1. In Tamil Nadu itself there are around 3,000 coconut shops. These
shops sell dried dehusked coconuts to end consumers.

24
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
2. To Coconut traders who sell dehusked coconuts in a large amount to
large scale and small-scale industries across India. The innovator Mr.
Jeyaseelan is himself into this business, where he collects coconuts
from all parts of his and nearby villages, dries them under the sun, then
dehusks them and finally sells them to many parts of India. He dehusks
around 15,000 nuts on a daily basis. These types of traders constitute of
most of the market for this product.

3. Some Large-scale industries like those producing coconut hair oil,


coconut biscuits and sweets, cooking oil etc. use huge quantities of
coconuts for their raw material. These companies for dehusking
coconuts in large numbers can use this product.

5.1.2 Mass diffusion in the coastal areas of India

Coconut is usually grown in the coastal areas of India in the states of Tamil Nadu,
Kerala and Karnataka. Some production is also there in the other states including Andhra
Pradesh, Orissa, West Bengal, Goa and Maharashtra. The leader in the coconut industry
is Kerela.

Since Kerala is the major producer of coconuts, the whole coconut industry is
based mainly in Kerala like the oil producing industries, coir, mattresses, copra bazaars
etc. next comes Tamil Nadu having 25%. The comparative figures are shown below.

25
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Fig - 1: Statewise Production of Coconuts

So the main market for this dehusker is these two states. The dehusker also finds a
potential market in Karnataka and Andhra Pradesh having 14% and 9% share in
production.

Production of coconuts in Kerala.

Sl No. Place Production in


Tonne
1 Ernakulam 358 million
2 Thiruvananthapuram 635 million Nuts
3 Pallakad 252 million
4 Alappuzha 288 million
5 Kozhikode 903 million
6 Malappuram 626 million
7 Kannur 621 million
8 Kasaragod 469 million

Table - 1: Production of Coconuts In Kerala


Production of coconuts in Tamil Nadu

26
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Table –2: Production of coconuts in Tamil Nadu


Since majority of the market is in Kerala and Tamil Nadu, these two areas are the
target market for the “Coconut Dehusker”

5.1.3 Other Parts of the world

27
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Area and production of coconut in different coconut growing countries of the world.

Country Area Percentage Production Percentage


(in 000' ha) share million share
nuts
F.S. 17 0.15 40.00 0.07
Micronesia
Fiji 65 0.56 196.40 0.37

India 1796 15.51 13968.00 26.06


Indonesia 3745 32.35 13595.00 25.36

Malaysia 280 2.42 722.00 1.35

Papua 14 0.12 70.00 0.13


Papau New 260 2.25 960.00 1.79
Guinea
Philippines 3093 26.71 11935.00 22.27

Solomon 59 0.51 287.00 0.54


Islands
Sri Lanka 416 3.62 2546.00 4.75
Thailand 377 3.26 1130.00 2.11

Vanatu 96 0.83 346.00 0.65


Vietnam 190 1.64 1065.00 1.99
West Samoa 75 0.65 160.00 0.30
Others 1092 9.43 6576.55 12.27

Total 11578 100.00 53597.55 100.00

Table - 3: Production of Coconuts In the World


Coconuts are grown in other parts of the world but the maximum growth from
countries other than India are from Indonesia, Philippines, Sri Lanka and Thailand. Some
dehusking machines, much different from the one under study exists there, but is not used
to the optimum. Hence, if marketed properly, this product can gain considerable ground
in the foreign market.

28
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

5.2 Product Positioning


Positioning is an important method that focuses on positioning the product in
customers mind. After specifying our target as the coconut industries and traders
mainly in South India, we will first try to understand their psychology. A stringent
analysis will be done to understand the way the product could be made attractive to
them. Thereafter efforts will be made to inform the customers about the dehusking
machine by different advertisement and promotional strategies. By highlighting its
USP and showing live demonstrations the customers will be made to realize the
products benefits.

Post selling is an important phase that stresses on the customer retention


process. This will be done by considering upon the complains and difficulties faced
by consumers, and solving them through R & D.

5.3 Demand Estimation – Market Research

Over more than 45 organizations and coconut traders using the manual procedure
to dehusk coconuts were contacted through these means: -
1. One to one meeting
2. email and snail mail
3. Telephonic conversation
An innovation catalogue along with a covering letter (Annexure I) was sent to
some of them in order to create awareness about the new technology and generate
interest. Subsequent technology related queries were answered with the help of the
innovator.

5.3.1 Customer Feedback or Perception

The organizations contacted personally (ref: List of organizations contacted


personally) were asked different questions to ascertain their interest and willingness to
buy the machine. Their inputs, after showing them the video of the machine were
collected and analyzed under certain parameters listed below:

o Price
o Maintenance cost
o Technical reliability
o Effectiveness of dehusking
o Operating cost
o Operating life
o Size
o Labour charges

29
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
o Ease of use
o Effort required
o Health Problems

5.3.2 Feedback of organizations contacted personally


Most of the organizations gave a positive response. Their Name, Address and
Contact are listed in Annexure II & III.

What did companies comment about the future selling of the m/c?

The companies contacted personally were very much convinced and some even
wanted to buy the machine immediately. The companies from Kerala eg. Panniankara
Oil Mills, told that labour is very costly in Kerala and this machine will be a boon for
traders like them, as it will increase the profits by decreasing the cost of production.
The companies expressed that this type of machine will be of a great demand and
will capture the future coconut dehusking industry if marketed properly.

Will the proximity of m/c making any difference?

The companies by talking to our team and having the Innovation Catalogue
became got convinced, but they wanted to have a view of the working of the machine. So
during sales, the working of the machine has to be demonstrated to the customers for
their better understanding and judging.

5.4 Pricing

The innovator prices the product at Rs. 13,500, but it is recommended based on
the market study that an upward price revision could be considered. The pricing is done
taking into consideration the cost of raw materials, factory overheads and the profit. The
break-up is given later in this report.

30
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

5.5 Promotion Strategy


Promotion

The target markets and the prospective customers will be reached through
promotional strategies and advertising. Since most of the customers are farmers and from
the rural segment of India, the advertising has to be done in local dailies, village fairs,
and awareness programs. For the industries using coconuts as their raw material,
promotion has to be done through personal selling, advertising in magazines.

Concentrating on Tamil Nadu & Kerala.

Sector wise: -

Villages
- Local Newspapers
- Rural Fairs
- Personal visit with demonstration
- Local cable channels
- Pamphlets
- Also by word of mouth

Industries and urban coconut shops

- English, Hindi and newspapers in local languages.


- Personal Visit and demonstration
- Local channel advertisements
- Industrial tidings.

5.6 Distribution Strategy

After the customers have paid their advance or are ready to buy, the dehusker is
sent to the customers by the following means: -

Distribution centers

- For remote villages, one shop is made available for each


village for storing one machine and keeping 2 to 3 extra
depending on the demand.
- For a cluster of villages, one common shop is to be established
to the nearby market well connected to the villages.

31
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
Distribution to customers

- From factory to distribution centers: -


Only spare parts are taken to the distribution centers for the
ease and economical transportation of the product.

- From distribution centers to customers: -

- If customer is situated near to the distribution center, the


machine is assembled in the center itself, then transported to
the customer.
- If customer is situated far away from the distribution center,
then the partial assembling is done in the center and rest is left
for the customers place. This is for the ease and economical
transportation of the product.

In both the cases, a trained mechanic is sent for the proper assembling,
functioning and training the people who are involved in using it.

5.7 Sales Strategy

De-husking Machines are priced to be cost effective in the short as well as the
long-term. Since our main target market are the farmers and taking the fact under
consideration that they cannot make the full payment at a single go, they are allowed to
pay in installments. Proper distribution channels will be set up and sales force will be
given the required training. After sales service will also be provided.

Targeting villages for the coconut traders and shops.

Manpower needed:

Per village – 2
Total number of targeted villages in Tamil Nadu and Kerala – x
Total number – 2x

Skills required from the sales people:

1. Fluent in local language.


2. Convincing skills.

Training required:

About - Machine
- Marketing
32
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
- Convincing skills
- Good communications
- Fluency in Local languages

Things required to be carried by the sales personnel:

- Video clips
- One machine for demonstration (in fairs and in distribution
centers)
- Pamphlet
- Price catalogue with installment schemes.

Installment schemes:

Considering no advance payments, since farmers are not likely to pay any amount before
the real use of the machine starts.

# Scenario 1

Full payment after receiving the machine i.e. Rs. 14,000/-


So no installments

# Scenario 2

Half Payment i.e. Rs. 7,000/-


Rest half in a period of 6 months.
i.e. per month Rs. 1,230 (1,170 + 60 = 1,230 /-)

After Sales service:

Maintenance of this product is very low except for daily check of nuts and bolts, and
oiling twice a day. Blade sharpening is not necessary - they should last for years.
Still trained personnel will be sent for any technical problem for a period of six
months after installation.

33
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Sales Forecast

Year One Year Two


Quarter 1 2 3 4 5 6 7 8
Sales (No.
Of 8 8 8 8 10 10 10 10
Machines)
Price 14,560 16,016 16,016 16,016 16,744 16,744 16,744 16,744

Table - 4: Sales Forecast for Two Years

The prior analysis has been made based on the current market survey.

5.8 Location Plan


Location plan refers to the site that perfectly suits the business in terms of
establishment and growth. The following are the suitable requirements, which should be
kept in mind while selecting a location for starting this kind of coconut dehusking
business:

• A coastal area.
• Low cost of land.
• More coconut concentration.
• Availability of cheap labour.
• Adequate knowledge about the market.
• Availability of raw materials at nearby places to minimize the transportation cost.

The location of the innovator’s village was fulfilling all the above-mentioned
requirements to start the business. Therefore he has chosen his village site itself to
manufacture the machine. Besides all this, his established goodwill and relevant
experience regarding coconut trading helped him to step into this venture.

34
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

5.9 Competitive Analysis

In the present scenario, since there are no other manufacturers of a mechanical


coconut dehusker in the region, there is no direct competition from other manufacturers.
Although several machines have been patented over the last 70 years or so, it appears that
none have been successful. This innovation has got a bright prospect and will prove to be
a great help for the coconut dehuskers. However, there is an indirect competition from
the cheap labour available across the country.

35
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

6 FINANCIAL PLAN AND ANALYSIS

SL. Particulars Unit Qty. Cost


No. Rate (Rs.)
(Rs.)

1 Motor 3,000 1 3,000


2 Iron frame 1,800 1 1,800
3 Pulley Wheel Radius
a) Flywheel 5.6” 200 1 200
b) Small 1.32” 100 1 100
4 Bearing & Box 213 1 213
5 Shaft Inside Pipe 150 1 150
6 Handle pipe 100 1 100
7 Handle 50 1 50
8 Nuts & Bolts 6.25 40 250
9 Blade 125 2 250
10 Steel cover 1,350 1 1,350
11 Condenser 250 1 250
12 Starter (3 Pt. Or 2Pt. Starter) 1,350 1 1,350
13 Fabrication work with workers - - 650
salary (Each Machine)
14 Current Office work, Ordering, - - 900
Erection, Promoting etc.

TOTAL RM Cost 10,613

6.1 Bill Of Material

36
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

6.2 Total Overheads of the Workshop

Overhead Amount Remarks


Wages 5,000 Does not include Mr. Jeyseelan’s
remuneration
Rent for the workshop 1,250 One month
Electricity 1,450 Monthly bill validated
Telephone 600 Monthly bill validated
Salaries of sales force 1,600 One Month
Miscellaneous expenses 400 Monthly bill validated
Total Overheads Rs. 10,300

6.3 Costing of a “Coconut Dehusker”

Head Cost Reference


Raw Material Cost 10,613 Detailed Bill of Material (BOM) as above.
Factory overheads 1,287 Workshop overheads as above –
Apportioned on 8 machines (monthly
capacity)
Total Cost 11,900 -
Margin 2,100 -
Ex – Factory Price 14,000 Price as suggested by innovator is Rs. 13500
but it is recommended based on the market
study that an upward price revision could be
considered.

37
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

6.4 Estimate of Working Capital requirements

# Scenario One: Advance orders are available


(For calculation the price is taken as Rs. 14000 per unit)

Head Price/Cost in Rs. Remarks


Advance 56,000 For eight machines @ 50% advance
Total Cost 2,54,712 For 1st Quarter (for 24 machines)
Working Capital Gap 1,98,712

# Scenario Two: Advance order for only one Machine

Head Price/Cost(Rs). Remarks


Advance 7,000 For one machine @ 50% advance
Total Cost 2,54,712 For 1st Quarter (for 24 machines)
Working Capital Gap 2,47,712

# Scenario Three: No Advance order

Head Price/Cost(Rs.) Remarks


Advance 0 For one machine @ 50% advance
Total Cost 2,54,712 For 1st Quarter (for 24 machines)
Working Capital Gap 2,54,712

38
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

6.5 Financial Projections

Based on a conservative estimate, it is estimated that the sale in the first quarter
would be of 24 machines and thereon-same pace would continue for at least next three
quarters.
- The price of the machine is initially set as Rs. 14,000 per unit (original pricing
indicated by the innovator was Rs. 13,500). In addition, a tax of intra-state sales tax @4%
is considered, which will be passed on to the buyer. However, as suggested by the
market study that there is scope of upward price revision. Therefore it is recommended
that after the first quarter, price would be revised by 10% plus tax and after one year
another 5% plus tax.

- The cost of production is assumed to be growing with a rate of 5% pa.

Year One Year Two


Quarter 1 2 3 4 5 6 7 8
Cost of 11,900 11,900 11,900 11,900 12,495 12,495 12,495 12,495
Production
Price 14,560 16,016 16,016 16,016 16,744 16,744 16,744 16,744

39
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Table – 5: Cost of Production

Projections: For Second Year (Four Quarters)

Year Two
Quarter 1 2 3 4
Sales (No. Of 10 10 10 10
Machines)

Revenue 1,67,440 1,67,440 1,67,440 1,67,440


Cost of production 1,24,950 1,24,950 1,24,950 1,24,950

Total profit 42,490 42,490 42,490 42,490


NO Excise & Sales 6,698 6,698 6,698 6,698
Tax @ 4%

Tax 30% 10,738 10,738 10,738 10,738


Net Profit 25,054 25,054 25,054 25,054

Note: The income is assumed to be subjected with an average rate of 30%, which is a bit
higher. Making provision with higher rates would provide a cushion against the
unforeseen sales and cost variations.

40
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

6.6 Cost Benefit Analysis

Particulars Manual Coconut Dehusker

Objective: To dehusk Quantity 1,000 Nuts 1,000 Nuts


(Nos.)

Dehusking Speed (Rate in 150 Nuts ph. 200 Nuts ph.


Quantity per Hour) (an average estimate since (Given by Mr. Jayaseelan,
rate goes down with time also live demo seen when
due to fatigue and injuries) the team visited site)

Time Reqd. to dehusk 1000 Nuts. 6.6 Man-Hrs 5 Hrs.

Labour Charge per man-Hrs Rs. 10 Rs. 6.25

A) Total labour cost for Rs. 66 Rs. 31.25


dehusking 1000 nuts

Power consumption for Nil 1.66 unit


dehusking 1000 nuts

B) Power Charges for 1 Hr. Nil Rs. 5 (12 units @ Rs. 3)

Initial Fixed Investment Rs. 500 Rs. 14,000

41
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Financial Cost per hour (with Rs. 0.02 Rs. 0.72 per hour of
Interest of 12% p.a) processing (apportioned on
12*24*8)

C) Capital cost for dehusking Rs. 0.13 Rs. 3.6


1000 nuts.

D) Maintenance for 1,000 nuts Nil Rs. 6.25


(Rs. 2,880 p.a.)

E) Depreciation Cost (Operating Nil Rs. 3


life of 10 Years) (1,400 p.a.)

Total Operating Cost for 1000 Rs. 66.13 Rs. 49.10


Coconuts = A+B+C+D+E

Note: Dehusking quantity as given by the innovator.

6.7 Operating Costs


The operating cost as calculated in the above table of Cost Benefit Analysis is Rs.
49.10 for 1000 coconut, which is much better than the conventional manual method of
dehusking which comes to around Rs. 66.13.

R
U 70
P 60
E 50
E 40
S 30
20
10
0
Manual Coconut Dehusker

Fig - 2 - Operating Cost Per 1000 Coconuts

42
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

The innovator is not taking any loan and is investing the amount to set up the
business of his own. So he saves on paying the interest. The only source for him is the
advance collected.
The fund is utilized to manufacture the machine. The expense is on raw materials,
paying the over heads like electricity charges, welding and cutting, fitting and painting,
rent, wages and salaries, telephone and miscellaneous expenses.

6.8 PROJECTED TRADING ACCOUNT

Dr. Cr.
Date Particulars Amount Date Particulars Amount
To By
Purchases 3,62,520 Sales 5,12,512
Power 10,440 Closing Stock
Carriage
Inwards 1,000 -Raw Materials 90,630
Manufacturing
Expenses 9,000 -Work in Progress 45,315
Wages 60,000 -Finished Goods 48,048
Insurance on Raw
Materials 5,000
To Gross Profit 2,48,545

Total 6,96,505 Total 6,96,505

43
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

6.9 PROJECTED PROFIT & LOSS ACCOUNT

Date Particulars Amount Date Particulars


To By
Advertisement 4,800 Gross Profit b/d 2,48,545
Provision for
Doubtful Debts 9,600
Salaries to Sales
Force 19,200
Telephone
Charges 7,200
Legal Charges 5,000
Repairs &
Maintenance 2,880
Depreciation
On Shade 7,000
Provision for tax 7,300
Electricity 6,960
Printing &
Stationary 1,000
General Expenses 1,500
Net Profit 1,76,105

Total 2,48,545 Total 2,48,545

44
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

6.10 PROJECTED BALANCE SHEET

45
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Liabilities Amount Assets Amount

Capital 1,84,310 Fixed Assets


Creditors 1,20,000 Shade 70,000
Less Dep. 7,000 63,000
Overdraft 1,50,000 Loose Tools 15,000
Profit after Tax 1,23,275 Welding Machine 11,000

Outstanding Expenses 5,000 Current Assets


Prepaid Expenses 2,000
Cash 25,000
Bank 1,00,000
Debtors 1,92,192 1,82,592
Less prov: 9,600
Closing stock
Raw Materials 90,630
Work in Progress 45,315
Finished Goods 48,048

Total 5,82,585 Total 5,82,585

6.11 RATIOS ANALYSIS

Gross Profit Ratio

Gross Profit Ratio = Gross Profit * 100


Sales

= 2,48,545 * 100

46
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
5,12,512

= 48.4 %

Net Profit ratio


Net Profit Ratio = Net Profit * 100
Sales

= 1,76,105 * 100
5,12,512

= 34.36 %

Fixed Asset Turnover Ratio


Fixed Asset Turnover Ratio = Sales
Fixed Asset

= 5,12,512
89,000

= 5.75 times (approx)

Stock Turnover Ratio


Stock Turnover Ratio = Cost of Sales
Average stock

= 2,63,967
1,83,993

= 1.5 times (approx)

47
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Current Ratio
Current Ratio = Current Assets
Current Liabilities

= 4,93,585
1,25,000

= 4 (approx)

Quick Ratio
Quick Ratio = Current Assets – [Prepaid Expenses + Stock]
Current Liabilities

= 3,07,592
1,25,000

= 2.5 (approx)

6.12 Return On Investment (ROI)

Return on Investment = Net Profit before Interest, Tax and Dividend *100
Capital Employed

= 1,76,105*100
5,82,585

= 30 %

48
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

6.13 Internal Rate of Return (IRR)

Internal Rate of Return = Capital - Net Profit


Net Profit

= 1,84,310- 1,76,105* 100


1,76,105

= 4.6 % (approx)

6.14 Net Present Value(NPV)


Year-end cash inflows are – Rs. 2,50,000 ; Rs. 2,00,000 ; Rs. 1,50,000 ; Rs.
1,00,000 ; Rs. 50,000 in years 1 through 5. The opportunity cost of the capital may be
assumed to be 10 percent.

NPV = 2,50,000 + 2,00,000 + 1,50,000 + 1,00,000 + 50,000 - 5,82,585


(1 + .10) (1 + .10)2 (1 + .10)3 (1 + .10)4 (1 + .10)5

= 22,500

6.15 Break-Even Point (B.E.P)


Break-Even Point = Fixed Costs
Sales Price – Unit Variable Cost

= 89,000
14,560-9,093

= 16 units (approx)

49
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

In ‘000 Rs.

R Sales Line
60
e
v
e 48 Total Cost Line
n
u
e
36 BEP
&
244608
C 24
Fixed Cost
o
s 12
t
s

8 16 24 32 40

Number of Units

Fig – 3: Break Even Analysis

6.16 Gannt Chart – Implementation schedule

2004 2005

50
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Oct Nov Dec Jan Feb Mar April May June July Aug
From Project
Asgn. till the
Final Review
Analysis 14
Project
Assigned 14
Product Study
(FAB)
14 14
Planning
14 6
Market survey
(Mass
diffusion,
potential
customer, 6
licensee, target
market)
Select
Location 15

Setting up of
Manufacturing
Unit 15 15
Recruiting
sales force and
trained labour 15
Begin Mfrng.
(1st Qtr)
Batch – 1
Review
Analysis-I
5
Batch – 2
5
Review
Analysis-II 5 10

Batch – 3
10
51
Review
Analysis-III 10 15
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

6.17 Successful declaration of the Project


- Sales of 96 machines per year would be considered as excellent success.
- If technology is licensed during the currency of the project agreement, it shall also
be treated as success. However, there could be several ways, in which technology
could be licensed e.g. Exclusive vs. Non-exclusive, Regional licensing etc.

6.18 Rights on Know-How and related Matter


The rights on the technology as claimed in the patent application would be with
the innovator, Mr. Jeyaseelan. Only in case of technology licensing, it may change as per
the agreement signed by Mr. Jeyaseelan and the licensee.

52
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

7. MANUFACTURING SECTION

7.1 Advantages of the Location


• The innovator’s village is near to the coastal area, hence having more coconut
concentration.
• The land purchased for his manufacturing unit was lesser as compared to that of
urban areas.
• As it is a rural area, cheap labour is available to him.
• Since he was already engaged in the same occupation of coconut trading, he has
acquired sufficient knowledge about the market and also created goodwill for
himself.
• The raw material required for manufacturing the machine was available at nearby
places, it in turn reduces the transportation cost.

7.2 Production Needs

Components required for production

1. Raw Materials
1. Electrical motor.
2. Shafts.
3. Pulley and flywheel.
4. V belt.
5. Bearings with box
6. Centrally mounted rod, which acts as the cutter.
7. Iron Plate support.
8. Bolts and nuts.
9. Foundation.
10. Condenser
11. Motor Starter
12. Iron frame
13. Handle pipe
14. Steel cover.

2. Components for production


1. Welding machine
2. Paints
53
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
3. Cutting tools
4. Electrical wires
5. Electrical testing equipment

3. General Requirements:

a. Electricity.
b. Space for shade.
c. Warehouse.
d. Semi skilled labour.
e. Experienced personnel in welding, fitting and painting.
f. People having general idea about lathe machines, which is required
for some fabrication.
g. Also, good amount of inventory must be available to meet sudden
demand.

7.3 Quality Control


ISI certificate for the product has to be obtained from BIS (Bureau
of Indian Standards). For this, we should modify and develop the product to raise
it to the level of BIS standards. To get the certification from BIS the product
should meet certain requirements recommended by BIS. So this should be the first
priority before launching the product commercially.

The requirements include:

Rust Prevention:
The iron parts should be well painted so as to prevent it from getting
rusted.
Full Protection:
The machine should be placed in such a way that the electric motor and the
power transmission system get protected from water, sunlight and rain.

Proper Structure:
It should maintain its structure according to the specifications

Proper Standard
Its other components should also maintain a minimum level of standard.

54
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
We would also work towards getting an ISO certificate for the
organization. For this, the working environment and the labour
treatment should meet the requirements.

7.4 Availability and reliability of the suppliers


For the production of machines, the components to be used as their raw material
are available to the manufacturer by the suppliers that are present in nearby villages and
markets within reach. The innovator has good terms and contacts with the suppliers
because of his prior occupation in the same field, which makes him known about the
nature of market suppliers.

55
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

8 CRITICAL RISKS SECTION

8.1 Internal strengths


- It’s a new and unique invention in its own field.
- It has very low operating cost.
- It requires minimal of maintenance.
- Doesn’t require any sort of repairing for a long period.
- Saves effort & time.
- High productivity.
- Less labour consuming.

8.2 Weaknesses
- More investment is required as compared to manual operation.
- The machine is quite bulky & requires lot of space for
installation & operation.

.
8.3 Opportunities
- With the bulk production at the later stage the cost of production
will go down.
- The machine may acquire a better & sophisticated design & look.
- When the production will be very high, then this machine can be
made into a composite one by using six sets together which has added
advantages over this machine.

8.4 External threats

- Some other new innovations having better productivity & cost


efficiency may enter the market.
- The power supply becomes more costly.
- Lack of appropriate advertising to reach the target market may
lead to early death of the product.
- Proper education about the product & spread of word of mouth is
very important for the formation of good perception of the product.
- Others may also start manufacturing similar machine with little
variations.
- The market may get saturated after a long period of time.

56
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

8.5 Risk Analysis


Variables Range Range Most
(Min) (Max) likely
value
Quantity (per year) 10 70 50
Price (in Rs.) 13,500 14,500 14,000
VC (in Rs. Per unit) 9,450 66,150 47,250
FC (in Rs.) 75,000 1,00,000 89,000
Depreciation (in Rs.) 0.20 1.40 0.80
Tax (in percent) 0 0 0
Cost of capital (%) 5,50,000 6,00,000 5,82,585
Project life (period in years) 3 3 3
Preliminary + pre operating expenses - - -
Initial investment (in Rs.) 1,50,000 2,00,000 1,84,310

Table – 6: Risk Analysis

8.6 Business Risks


The possible business risks are:

Poor demand

Effort has been made to minimize any risk of poor demand especially in the initial
period. The plan is for the manufacturing of 8 machines per month for the
first period and then increasing it by an increment of 1 machine in every successive
period. Poor demand is an unlikely scenario as the production capacity for the
first two and half years as planned is very minimal. Any future plan for
expansion will be based on the interest generated and future orders that will be
received.
Demand will be properly studied and evaluated in every six months. In the
eventuality that demand doesn’t grow and it is not profitable even to carry on the
business with the existing capacity, the unit shall be closed down and all assets
that can be sold will be disposed of accordingly. Since this is a completely new
venture with a completely new product such risk will have to be taken up.

Competitors

At present there are no competitors that offer the same benefits as the product
offer, therefore in this regard the product is safe from any potential competitors
offering the same benefits like a manual system for dehusking coconuts. It is unlikely

57
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
that in the near future there will be players in the market offering manual coconut
dehusking machines. This argument is supported by detailed prior art that has shown
there are no other manual systems existing anywhere else.
The only risk is new players copying the design and giving the same offering in
the market. However this issue can be dealt with by filing design patents for the
various variants.

Manufacturing for own use

There is always a danger that traders may try to imitate the product and construct
the same for their own personal use. One possible reason being that the
cost involved with purchasing the machine from the innovator is too high.

Cost of the raw materials

The total cost of the raw materials for construction of the coconut dehusking
machine comes to around Rs. 11500. The Selling price is projected at around Rs. 13500,
which is a margin of around Rs. 2000. Raw materials are easily available both in the rural
areas and smaller towns and even in bigger towns.

Expertise of the innovator:


The innovator has perfected the innovation in a trial and error method.
Over the last 9 years between 1991 – 2000 he had good experience in all aspects
of dehusking coconut, engaging laborers in such a way so as to get maximum
efficiency and output from this venture. Though simple in design, fabricating the
machine still involves a lot of skill. Therefore sacrificing the time coupled with a
big margin to make errors would also act as a deterrent to the most skillful
labourer.
.
Help from purchaser:
Even if a person decides to imitate the product, he would still require some
reference. This would probably be a product purchased and installed by a trader,
nearest to him. Study of the machine by the prospective fabricator is bound to
elicit interest from the purchaser. Practically no customer would be willing to let
another party blatantly copy and fabricate the machine for which he has paid a
price.

58
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

9. STRATEGY FOR TECHNOLOGY


LICENSING
The innovation catalogue has already been mailed to the coconut traders and
coconut oil industries willing to buy the machine for a considerable reduction in the
processing cost.

The response has been quite encouraging. The detail is as follows:

a. Panniankara Oil Mills

Mr. T.B. Krishnadas


9/622 B, Cherooty Road
Calicut-673001
Kerala, India
Ph: +91-495-2366681, 2365244
Email: nideesh@lakshmioil.com, sales@lakshmioil.com, panniankara@lakshmioil.com
Website: http://www.lakshmioil.com

59
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

6 FUTURE PRODUCTS
The coconut dehusker, which has been discussed here; is having numerous
advantages on its own, but when a huge quantity of nuts needs to be dehusked, using a
single machine will not be very economical. This idea drove Jeyaseelan to think of
something innovative to improve the machine. He had been using six dehusker units. In
each unit, the motor was attached to the dehusking rod by a belt, which passed through a
pulley. Since the motor was frequently switched on and off, the belts had to be changed
frequently which was not very economical. The switch and the coil in the motor were
also subject to a lot of wear and tear. All these problems led to high recurring expenses.
He discussed these problems in the innovators association meeting (Regd. Organization
with 60 members promoted by SEVA). Manoharan, another innovator suggested that 8
units could be clubbed into a composite unit, which could be operated through a single
motor of 1.5 hp or 2 hp capacities by using a shaft, two flywheels and a gear mechanism.

Pic – 5: Future Product


Two innovators Manoharan and Balan worked with Jeyaseelan on improving the
dehusker. Attaching 2 hp motor and 2 flywheels he designed a composite unit. A central
shaft rotated the peeling blade. The speed of the shaft was stabilized through the two
flywheels. A gear and clutch mechanism was incorporated. The improved dehusker could
dehusk 1,000 nuts per hour. This model did not involve a separate switchboard and a belt.
Unfortunately the Tamil Nadu government has not yet officially recognized the
innovation.

60
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
Jeyaseelan is now in a process of standardizing the improved design of the
dehusker. He wants to patent this model, which incorporates 8 units. He plans to sell this
machine having eight units at about Rs. 50,000 to Rs. 60,000. Diffusion of this
innovation would be invaluable as millions of coconuts are dehusked (and all manually)
all over the world. We wish that the workers’ cooperatives or groups own the new
dehuskers so that benefits of the improved productivity reach the working class.

61
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Annexure I

INNOVATION CATALOGUE

Innovator: Mr. R. Jayasheelan


Product Mr. R. Jayasheelan
Development: Innovator & Proprietor
Incubation National Innovation Foundation
Assistance (A body supported by Dept. of Science & Technology, Govt. of India & IIM,
Ahmedabad)
Bungalow No. 1, Satellite Complex, Jodhpur Tekra, Premchand Nagar Road,
Ahmedabad – 380015, Website: www.nifindia.org
Product Features:
This Innovation is a simple labour saving mechanical device called 'J J Coconut Dehusker'. This machine
helps to eliminate the labour problem, reduces the risk undertaken while dehusking large quantities of
coconuts and also increases the productivity to a considerable extent.

Unique Features: Coconut is dehusked into four or eight uniform pieces with 100% yield.
Low initial Cost (Rs. 13500/-)
200 – 250 nuts can be dehusked per hour. In an average about 12000 – 13000
could be dehusked in a shift of 8 hours.
Weight – 135 Kgs.
Processing Cost is less.
Less manpower to operate (6 labourers are needed per shift)
Less risky, (Eliminates injuries in their hands and other parts of the body)
Machine is compact and made of iron.
Saves time on extra efforts to be put in dehusking the nuts manually. Rotation
of machine blades facilitates dehusking the nuts easily. (Dehusking one Nut –
20 Secs.)
A novel machine in terms of its cost effectiveness, efficiency, safety
considerations, new design of feeding, time saving and power transmission
system.

Product Enquiries: Samrat Ghosh


Mob: 09886229781 email: samrat_urs@rediffmail.com
62
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
Avijit Sarkar
Mob: 09886169135 email: avi4u_02@rediffmail.com
(Student: IFIM Business School, Bangalore)

Comparison between Manual and Machine


Dehusking

Particulars Manual Coconut Dehusker

Quantity per hour 150 – 200 250

Time Taken per coconut 19 - 24 secs. 15 – 18 secs.

Risk Factor Very High Nil

Electricity charges Nil 12 units @ Rs.3 = 36 /unit

Health Problems Injuries in hands and other Nil


parts of the body

No of labours involved 40 for 15000 nuts 6 for 15000 nuts

Labour Charges 60 / day 60 / day

Total labour cost 40 x 60 = 2400 60 x 6 = 360

Ease of use Difficult Easy

Effort required Very high Very less

Wastage in coir Few Nil

Other Features: -

Robust and reliable


Warranty of 3 yrs
Maintenance cost – greasing of the moving parts, changing of the condenser when
problem arises (Cost Rs. 250), Replacing switch and coil after regular intervals,
Changing of belts depending on the use.

63
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Cost: -
Price Rs. 13500/-
(One time or else part payment through installment schemes)

For further information, Contact:

DISHA – Shaping Innovations


National Innovation Foundation

Manish Saxena
National Coordinator, Business Development
Email: manish@nifindia.org
Ph. 98253- 16994

Manish Vaidya
National Coordinator, Value Addition and Research Development
Email: mvaidya@nifindia.org
Ph: 98253-16992

64
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Annexure II

List of organizations contacted through Email

S.No NAME EMAIL ADDRESS


1. Abri abrienterprises@rediffmail.com Contact Person : Ms. Monica
Formulation abriformulations@touchtelindia.net Malhotra
Pvt. Ltd G-115, Ist Floor, Kalkaji
New Delhi - 110 019, (India)
Tel : +(91)-(11)-51604333
Fax : +(91)-(11)-51604334

2. Amirtha amirtha_impex@yahoo.com, Mr. Natarajan D


Impex amirtha_impex@hotmail.com 55/44, Palani Andavar Koil
Street, Vadapalani
Chennai - 600 026, Tamil Nadu,
India
Tel : +(91)-(44)-
24800588/31035577/9444123036

3. BASTIAN suresh@cochinayurvedic.com No.33, New Municipal Double


SURESH cochinayurvedic@vsnl.net Storey Market,
COCHIN Lodhi Colony ,
AYURVEDIC New Delhi-110003
CENTER Phone : +91-11-24619367,
24691123
Fax : +91-11-24691735,
24643031

4. Gunbow ceo@gunbowmail.com Contact Person: Mr. Jai Krishnan


Trading Sambasivan
Company P.O. Bag No.4803, Cullen Road
Bazaar P.O.
Alappuzha (Alleppey) - 688 012,
Kerala, INDIA

65
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Tel: +(91)-(477)-
2244133/2244979
Tel. Fax: +(91)-(477)-2244550

5. sunjaya - hindi@pacific.net.id Mr. Theo Sukianto (Director)


coconut shell Jalan Raya Semarang-Demak
powder KM 16 Semarang - , Central
Java, (Indonesia)
Phone: + 62 - 24 - 6511864
Fax: + 62 - 24 - 6511865

6. Ganges ganges_7@vsnl.net 42/9,East End Park


Kolkata-700039, West Bengal,
(India)
Tel : +(91)-(33)-3095 9815
Fax : +(91)-(33)-24553238

7. Mr. P arjun@md3.vsnl.net.in Pullikede


Prabhakara Kollam – 691001
Nadar, Tel : 0474 – 742176/741776
Swamy Oil
Induatries
8. Frigmaires fe@vsnl.com P.O. Box 16353, Janata Industrial
International Estate
Lower Unit No. 8, Senapati
Bapat Marg, Opposite Pheonix
Mill
Maharashtra-400 013, (India)
Tel : +(91)-(22)-
24944108/24945624/24926159
Fax: +(91)-(22)-
24944108/22186046/22187750

9. mansarovar food@manasarovar.org Mr. N. Ramesh


farms 39, Alamelu Nagar, Kamarajar
Road
Coimbatore - 641 015, Tamil
Nadu, (India)
Tel : +(91)-(422)-2572591

10. Neptune neco@wilnetonline.net Contact Person : Mr. R. V.


Equipment - info@neptuneengg.net Panchal, Mr. Sandeep Dave
coconut fibres Address : 297, Phase-II,
Dediasan,

66
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Mehsana - 384 002, Gujarat


INDIA
Phone no : +(91)-(2762)-259331
Mobile no :(+91) - 98245 00979
Fax : +(91)-(2762)-252070

11. Gem Forgings gem.forgings@gems.vsnl.net.in, Mr. Shashank Garg


Private gem.forgings@vsnl.com Address :10/C, Middleton Row,
Limited 3rd Floor,
Calcutta,West Bengal - 700071,
India
Tel No. :+(91)-(33)-22177328,
22177329, 22177330
TeleFax. :+(91)-(33)-22177333,
22469130

12. HLL Debasis.ray@unilever.com Mumbai office


yashmi Ph : 022-22870622, 22827411

13. Dabur brhugar@bgl.vsnl.net.in Bangalore


Ph : 080-25592544, 25592570,
25091103, 25091104

67
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Annexure III

List of organizations/customers contacted over


phone/direct

Sl. No NAME PHONE NO ADDRESS


1. Mr. Raghuram 04563 – 226208 Rajapalayam,
09443162878 Near Madurai,
Tamil Nadu - 626133
2. Hemaraj Ookeda & Co. 64155 Gujarati street,
Kozhikode-673001.
3. Mr. P Prabhakara Nadar, 0474 – 742176 Pullikede
Swamy Oil Induatries 741776 Kollam - 691001
4. K.K.Achrekar & Sons. 61129/62424 P.B. NO. 156,
Gujarati Street,
Kozhikode- 673001
5. K. V. Moosakoya & Co, 366216/301834 9/526, Copra Bazaar,
Kozhikode-673001.
6. Parmanand Gulab Chand & Co 82847/61871 9/282, South Beach
Road, 6 South Beach
Road, Kozhikode-
673001
7. Solar Products traders. 365562 11/317-A- Court
Road, , Kozhikode-
673032.
8. C.B. Brothers 366981/306662 9/494, Koyassam
Koya Road, Copra
Bazaar, Kozhikode-
673001.

68
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Annexure IV
Important contacts for the successful
completion of the Business plan

1. Innovator – Mr. R. Jeyasaleen


S/O Ramiah Nadar, J.J. ILLAM,134. B. Kulalar Street,
Ramasamiapuram, P.O. Koomapatti Taluka: Srivilliputhur
Dist. – Virudhunagar – 626133
Tamil Nadu
Ph: 04563 – 82239
Mob: 09443556966

2. Collaborator – Mr. P. Vivekanandan


SEVA 43 – T.P.M Nagar,
Virattipathu,
Madurai 625010
Tamil Nadu.
Ph: 0452 – 2380082
Email: numvali@vsnl.com

3. Swati Chadha – Fellow, Business Development


NIF
Email: swati@nifindia.org

4. Mr. Manish Saxena - National Coordinator,


Business Development
Email: manish@nifindia.org
Ph. 98253- 16994

5. Manish Vaidya - National Coordinator,


Value Addition and Research Development
Email: mvaidya@nifindia.org
Ph: 98253-16992

69
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

6. Ranjan – Fellow, Business development.


NIF
email: ranjan@nifindia.org

7. Mr. Raghuraman – Ist Customer


Rajapalayam.
Tamil Nadu - 626133
Ph: 04563-226208
Mob: 09443162878

7. Kerala Bureau of Industrial Promotion


Nandavanam
Palayam
Thiruvananthapuram,
Kerala

Tel – 0471 – 2324287 / 311882


Email – bureau@vsnl.com
11. Coconut Development Board:
Govt. of India - Ministry of Agriculture,
Kera Bhavan, Kochi - 682 011
Kerala
Ph: 0484-2376265, 2377266, 2377267

12. NIF - Registered Office


National Innovation Foundation, India
B4, Ravi Niketan, Nehru Park
Vastrapur, Ahmedabad 380 015
Gujarat.

70
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Annexure V
Layout and Floor plan for the Manufacturing Area

WELDING
MACHINE

8 Feet 20 Feet

E PAINTING FITTING SHOP


N
T
T
18
R
A O Feet
N O
L
C 30
S
E Feet

P
FINISHED RAW O
W 11
GOODS MATERIALS E Feet
R

14 Feet 20 Feet 8 Feet

42 Feet
71
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

Fig – 4: Layout of the Manufacturing Area

Annexure VI

TECHNOLOGY TRANSFER DOCUMENT

Warning: The purpose of this document is to protect parties that wish to exchange
information and maintain confidentiality, for example, a university member
discussing his/her invention with an interested company. The agreement binds both
parties to secrecy and it is used to allow the parties to evaluate the intellectual
property for potential licensing without obligation.

Representative of Mr. R. Jeyaseelan (hereinafter "Innovator")


and_____________________________ (hereafter the "undersigned") have disclosed and
plan to continue to disclose to each other certain data, specifications, samples, materials,
research and information, including new product development initiatives, business plans,
and business objectives, (the "Information") regarding new product development work
involving: _________________________________________________

_________________________________________________

_________________________________________________

_________________________________________________

In the course of the parties' discussion, Innovator has and may disclose to the
undersigned for evaluation purposes only, and the undersigned may disclose to Innovator
for purpose of negotiating mutual development contracts, certain internally generated
data, materials, documents, specifications, samples, and/or other information which is
competitively sensitive, proprietary, and/or confidential to that party (the "Information").
In consideration of the disclosure of such information by each party to the other, the
parties agree as follows:

Each receiving party agrees to accept in strict confidence any and all Information
disclosed orally and/or in writing, or made available to it, by the disclosing party

72
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
respecting the Information and which is designated, either on its face or in a separate
writing mailed or otherwise provided by the disclosing party to the receiving party within
ten (10) days of any non-written disclosure, by the disclosing party as proprietary and
confidential. The reviewing party shall not disclose it to any third party, directly or
indirectly, without first obtaining the written consent of the disclosing party. In addition,
each receiving party hereby agrees not to chemically analyze, other than as required for
quality evaluation purposes and any information resulting from such analysis shall be
considered confidential Information subject to the terms of this Agreement, or otherwise
reverse engineer any materials or samples provided by the other disclosing party pursuant
to this Agreement.

Without limiting the foregoing in any way, unless otherwise signed, the parties
hereby agree to hold in strict confidence the terms of any agreement, formal or otherwise,
and any discussions respecting a future business relationship. Any public statements,
press releases, or broadcasts prepared, made, approved, or consented to by either party
hereto which discusses a possible relationship with the other party or any of the
Information, shall mutually be agreed to by both parties prior to publication, release or
broadcast.

The confidentiality obligations outlined in this Agreement shall not be binding on


each receiving party with respect to any Information which:

Is rightfully in the possession of the receiving party at the time of disclosures;

Is or becomes known to the public generally through no fault or other action of


the receiving party;

Is obtained lawfully by the receiving party, other than Information subject to an


obligation by the third party to keep such Information confidential; or

Is developed by the employees, agents, or representatives of the receiving party


independently and as a result of its own efforts, without the use of, or access to,
the Information received from the disclosing party.

In order to minimize the inadvertent disclosure of the Information, each receiving


party agrees to the following:

It will limit disclosure of the Information only to its employees, representatives,


agents or consultants who require the information for the performance of their
duties and in any event, disclosure to consultants shall only be made pursuant to a
confidentiality obligation respecting such disclosures to said consultants;

It will make reasonable efforts to transmit the Information to and receive the
Information from a representative to be designated by Innovator and the
undersigned.
73
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

It will destroy all written Information received from the disclosing party or which
incorporates or references any Information of the disclosing party at the request of
the disclosing party.

The parties hereto acknowledge that no remedy at law for damages may be adequate
to compensate for a breach of the provisions set forth in this Agreement and that any
party injured by such breach may be entitled to temporary or permanent injunctive relief
against any such breach, without the necessity of proving actual damages. The parties
agree that permanent or temporary injunctive relief shall in no way limit any other
remedies to which the injured party may be entitled as a result of any such breach.
Unless otherwise agreed in writing signed by both parties, each receiving party agrees
not to use any Information of the disclosing party for its own benefit for a period of five
(5) years after disclosure of such Information.
This Agreement contains the entire understanding hereto relative to confidentiality of the
Information. This Agreement shall be retroactively effective to the earlier of either

a) The date of first disclosure of Information by either party to the other


party hereunder,

Or

b) The first disclosure by Innovator of the same Information. This


Agreement may not be amended or supplemented except in a written
agreement signed by both parties. The terms and conditions contained
in this Agreement shall be governed by and construed in accordance
with the Innovator – Mr. R. Jeyaseelan.

Each receiving party recognizes and agrees that nothing in this agreement shall be
construed as granting any rights to a receiving party, by license or otherwise, to any
Information of the disclosing party, except as specified in this Agreement.
In order to indicate acceptance of this above-mentioned terms and conditions, the parties
have signed this letter I the space herein provided by an officer duly authorized.

ACCEPTED AND AGREED TO:

Company: _____________________________

Signature: ____________________________

Name: _________________________________

Title:________________________________

Date: ________________________

74
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

INNOVATOR – Mr. R. Jeyaseelan

Subject: Technology Transfer

Signature: ____________________________

Date: ________________________ 3340%

CONCLUSION

Impact of this innovation on workers who dehusk millions of

coconuts manually all over the world can be tremendous. Along

with a greater share of increased productivity, there is a chance for

higher income being given to workers. Involvement of women is

appreciable but whether opportunities for them will arise only when

piece rate wages go down, is an issue that needs further exploration.

A great amount of encouragement should be there from the

government of our country to help these types of innovations. NIF,

established by the Department of Science and Technology,

Government of India aims to recognize, respect and reward

grassroots technological innovators and outstanding knowledge


75
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT

experts. This, in turn, will help the production with ease, which

finally leads to the growth in the GDP of our country.

BIBLIOGRAPHY

Books:

Philip Kotler, Marketing Management

Khan, Managerial Accounting

Jain & Narang, Financial Management

S.N. Maheshwari, Management Accounting

Websites:

www.coconutdehusking.com

www.businessplan.com

www.google.co.in

www.nifindia.org

www.disha.scai.org.in

www.lakshmioil.com

Magazines:

Honeybee – Vol 15(2) June 2004

76
COCONUT DEHUSKER BUSINESS PLAN
DISHA PROJECT
Husking Millions of Coconuts Jeyaseelan’s Way

77