Modern Rice Mill KSIDC

PROJECT PROFILE


ON


MODERN RICE MILL







Prepared by:


Kerala State Industrial Development Corporation






Modern Rice Mill KSIDC
PROJECT PROFILE FOR MODERN RICE MILL



INTRODUCTION

Rice is a vital food material for more than half of the worlds population, the importance of
which as a food crop has been increasing with increase in population. It is estimated that the
rice requirement for Kerala is about 7500 tonnes per day whereas the production within the
state is grossly inadequate to meet the requirement. The productivity of paddy in the State at
the current level is sub optimal, meeting only 15% of the requirement, and the remaining
85% requirement is met from the neighbouring states of Tamil Nadu, Andhra Pradesh and
Karnataka.

Modern Rice Mills are scientifically up-to-date units, with most modern plant and
machinery. Rice produced in a Modern Mill would be of superior quality and thereby
finding greater customer acceptance. Further, the bye-product of such Mills, Rice bran, could
find great demand as raw material among solvent Extraction Plants.

MARKET

At present, the paddy milling capacity available in the State is about 3000-3500 Tons per day
giving an output of only about 2000 Tons of rice per day, leaving a huge gap which is being
met by Public Distribution System (PDS) and by import of paddy/ rice from other states. As
per figures from Rice Mills Owners Association, there are about 125 rice mills operating in
the State, out of which about 50% are modern sophisticated units with Whitener and Color
Sorter machinery and others are partially modernized or upgraded from the traditional Rice
Mills (by incorporating dryer systems). The remaining units are having a capacity to process
only about 10 Tons of paddy per week. Rice Mills in Kerala are meeting only 20% of the
States requirements and the balance is met by PDS and from other states. So the Demand-
Supply gap is huge and there is sufficient scope for more Rice Mills.


MANUFACTURING PROCESS

The manufacturing process employed in a Modern Rice Mill is continuous and fully
automatic, consisting of Paddy Cleaning, Par Boiling, Drying, Milling, Sorting and Packing.
The Cleaning section consists of raw paddy cleaners, de-stoner and dust blowers, where the
dust, mud, stones and immature paddy are removed to make it completely free from the
foreign materials. The next stage is a pre-milling process called Parboiling, which is the
partial cooking of the grain with husk, done to impart the required hardness to paddy grains
so as to withstand the pressure exerted during the Milling process. The parboiled paddy is
taken to the Drying section which consists of the Drying plant, Heat exchanger and Blower.
The steam produced by the boiler is used for drying the paddy in the drier. The drying time
Modern Rice Mill KSIDC
can be altered by adjusting the temperature of the drier. When the paddy is sufficiently dry,
it is taken to the Milling section. Milling is the process of removing husk from paddy by
application of force through a rubber roller. Milling section consists of a Rubber Sheller,
Cone Polishers, Bran Blower and Separator, De-stoner and a Vibrator machine. The paddy
husk is collected in a separate room and is used as the fuel for firing the boiler, or sold
loosely for making cattle feed, manure, etc.

The shelled paddy is then directed to the Paddy Separator, which will separate the unshelled
paddy and the rice. The unshelled paddy will again go back to the Rubber Sheller and the
shelled paddy is taken to the first Cone Polisher, where the rice bran is also removed from
the rice. This will then go to the Bran Blower and Separator, which will completely remove
the bran from the product. The bran will be collected in a separate room and will be sold to
the consumers directly. The hulled paddy is again taken to the second and third Cone
Polishers for polishing the rice. After polishing, the rice will move to the de-stoner and
vibrator, where stones and broken rice are completely removed from the product to make it
superior in quality. The rice collected at the end of the milling section then moves to the
Colour Sorter for removing the black and immature rice completely. The product is then
moved to the Packing Section for packing in different sizes of polythene and gunny bags,
weighed, stitched and taken to the store room for dispatch.


PROJECT PARAMETERS

Capacity
The processing capacity envisaged for a medium capacity Modern Rice Mill is 60Tons/day
(18000 TPA). Plant operation will be on a 2-shift basis of 8 hours/shift.

Land
An extent of around 1 acre of dry land is required for setting up a Modern Rice Mill.

Location
The project is proposed to be located at Palakkad District.

Raw Material & Utilities
Paddy is the raw material for the Modern Rice Mill. At 100% installed capacity, the total
Paddy requirement per annum would be 18000 Tons.

Plant & Machinery
The machinery/ equipments required for a Cold Storage Plant is as follows:

Sl. No. Particulars Rs. Lakhs
1 Cleaning Section 15.00
2 Par Boiling Unit 32.00
Modern Rice Mill KSIDC
3 Dryer System 30.00
4 Milling Section 60.00
5 Boiler & Accessories 30.00
6 Rice Colour Sorter 25.00
7 Packing Section 18.00
Total 210.00

The total cost of plant & machinery for a 18000TPA Modern Rice Mill would be around
Rs.210 Lakhs. However, the actual costs may vary depending upon the
manufacturer/supplier.

Manpower
The total manpower requirement for a 18000TPA Modern Rice Mill would be around 30
numbers. This includes managerial staff, skilled and unskilled labourers.

Cost of the Project
The total project cost for setting up a 18000TPA Modern Rice Mill would be in the range of
Rs.500-550 Lakhs, including cost of 1 acre land. The project implementation period would be
12 months.

Project Components
Cost
(Rs. Lakhs)
Land (1 acre) & Land Devpt 50.00
Building & Civil works (Total built-up area of 24700 sq. ft) 140.00
Plant & Machinery 210.00
Utilities 18.00
Technical Know how 5.00
Misc. Fixed Assets 25.00
Preliminary & Pre-operative expenses 26.00
Contingencies 20.00
Margin money 56.00
Total Project Cost 550.00

Means of Finance

The proposed means of Finance for the Project is given below:
Equity
Promoters contribution 200.00
Subsidy 15.00
Unsecured Loan 60.00
Term Loan
KSIDC/KFC/Banks/FIs 275.00
Total Project Cost 550.00
Modern Rice Mill KSIDC
The Debt-Equity ratio is 1:1.

Sales Turnover
The Revenue at optimum utilisation (80% from the 3
rd
year onwards) would be around Rs.
2670 Lakhs. The capacity utilisation for the first and second years of operation is assumed to
be 60% & 70% respectively.


FINANCIAL INDICATORS

The Profit after Tax is Rs.107 Lakhs.
The Break Even Point (BEP) for the project is 57%.
The Debt Equity Ratio (DER) for the project is 1:1
Average Debt Service Coverage Ratio (DSCR) is 3.11
The average Internal Rate of Return (IRR) for the project is 22%.


CONCLUSION

There is tremendous potential for marketing Sortex Rice in the State, mainly through
wholesale merchants at Palakkad, Alappuzha, Thrissur, Malappuram, Kozhikode and
Kannur. By setting up a Modern Rice Mill with large capacity, competitive price could be
quoted due to economies of scale. Marketing is not at all a problem once the quality
standards and distribution channels are established. There is also great potential for exports
to Middle East countries, as India is the major exporter of Rice to the Middle East.

The broken rice, rice bran and husk could be sold in domestic market. Rice bran finds good
buyers among solvent extraction units both within and outside Kerala. Rice bran also could
be sold to units manufacturing fodder viz. Milma, Lipton, Godrej, KSE Ltd, Kerala feeds etc,
to name a few.









Disclaimer:
The findings contained in this Project Profile are based on the initial information collated through primary and secondary
research, which is indicative in nature. Reference herein to any specific commercial product, process, service by trade name,
trademark, manufacturer, or otherwise, does not constitute or imply its endorsement, recommendation, or favoring by
KSIDC or any entities thereof.
Modern Rice Mill KSIDC