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ABSTRACT

The report focuses on the production of spices processing


and spices value added products in the district of Idukki
which major spices growing regions of south India. The
data for this study were gathered through informal surveys,
letters, personal interviews, site visits, and published reports.
Sources include exporters, government officials, spices board,
regulatory agency employees, private company owners and
employees, spices value added -industry owners and employees,
academics, trade publications, and government documents.

1.0Technical Feasibility
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We have working behind this project for a considerable


period of about 5years, for getting the maximum information about
spice industry. During this period we try to acquire maximum
knowledge about spices. Our study has brought to estimate the role
of spices in Pharmaceuticals, Cosmetics, Perfumes and Hygiene
products manufacturing industry. this study have also help us know
medicinal value of spices , chemical composition of spices,
cultivation , curing ,grading, etc and the important of spices in
food industry
We travel all over India to collect information about the raw
material that we use in the production of different spices value
added products. The enlighten knowledge acquired through years
of study and dedicated research help us to develop our technology
to start this project.

1.2Technology.

We are using three type of Technology in the production value-


added products.
1. simple distillation method
2. organic solvent extraction method
3. super critical extraction machine

Technology used
using super critical fluid Extraction Technology (CO2).

Advantages of Extracts/Oils/Oleoresins extracted by this


technology:-
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•CO2 leaves no solvent residue.
•CO2 extraction is environment friendly process..
•Low temperature during extraction process preserves
Fragrance/Flavour of the product..
• CO2 extracted products are more stable and therefore have longer
shelf life.
• CO2 extracted products are free of heavy metals and Pesticides.
super critical extraction machine

The reason of choosing CO2 as main solvent is because of its low


critical
pressure and temperature where the PC = 73.8 bar and TC = 31.03
OC. It is also inexpensive, and exhibits non-toxic and non-
flammable properties. Moreover, supercritical extraction using
CO2 are environmentally benign and efficient extraction technique
for solids. In addition, supercritical extraction does not produce
thermal degradation or solvent contamination of the product.

1.3List of spices used as raw material


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Cardamom
Pepper
Green pepper

To assess whether the production of spices and its value added


products is technically feasible. we go through these questions and
find our solutions The series of questions below is helpful in
deciding the technical requirements of the business:

1. Is Raw materials available in this locality?

The raw material that required for the production of our


range of products is from pepper and cardamom. Estimated
volume of pepper needed is 2000 kg /day and cardamom is
1000.The average cardamom arriving at 7 cardamom auction
centers at every week is nearly about 100 tons.60% of the total
production is not coming to the open market .In our case there no
scarcity of the raw material .Regarding the pepper major markets
are in the Idukki (dist) which is largest producer of pepper in the
country .

The series of questions below is helpful in deciding the technical


requirements of our business:

2. Is the cost of the raw materials satisfactory?

The raw material is purchased from the farmers directly .no


intermediates, commission agents are not there. So the cost of the
raw materials are satisfactory.

3 are the correct size and type of equipment available


for the expected production level and at a reasonable
cost?
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The equipment is needed for the production is distliters,co2


extracts, grading machine and boiler. Most of the machinery and
equipments can be manufactured and fabricated by local
workshops and are maintenance and repair here locality. so the cost
and quality is the best in the industry. rest of machinery and
equipments are easily available in the market at reasonable cost

4. Are suitable packaging materials available and


affordable?

The main packing material for spices is Polethene cover, Gute


gunny bag ,pp bags etc. these materials are easily available in
locations at affordable costs.

5.Are distribution procedures to retailers or other


sellers established?

Our company have already entered in to agreements with many


super stockiest and distributors in India and aboard. Many
enquiries have made to our company regarding the export of
spices and value added products last 6 months we established
business with more than 12 distributors.
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6. Is a suitable building available and what
modifications are needed?

The company registered office is located in Pulikkathotty P.O


which is direct access to Vannappuram- Venmoney-Pulikkathotty
road. The building is situated in 6 cents with 1750 sqft building. A
small factory building have construct.

7. Are services (fuel, water, electricity etc.) available and


affordable?
A well with Enough water , water connection from kerala water
authority and electricity is easily available and affordable at this
location

8. Are trained workers available and are their salaries


affordable?

The locality is available with trained workers because, we are


representing largest spices processing centers in kerala
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1.4 Production Process of cardamom and


value added products
We take the raw cardamom cleaned it by winnowing, sorted it out
the discolored and damaged capsule by manual labor and then put
it into mechanized sorting machine with mesh size about 6.5 mm
After removing the small sized capsules the remaining cardamom
set for local sale and export as graded or branded spice. Graded
cardamom is used in food industry the main customers are Gulf
countries. Essential oil from cardamom is produced by Distillation
technique. It is used in food and beverage industry, Perfumes, Spa
industry, Aroma Therapy Medical Application

Cardamom Oleoresin is produced by organic solvent


extraction technique Uses include manufacturing of Biscuits,
cakes. It contains oil some flavor of cardamom that means smell,
taste of real cardamom. Cardamom Extracts Co2 is superior to
Oleoresin contains oils and flavor of cardamom which have very
good demand in the food industry. The extract contains no solvent.
Spice drops from cardamom are the mixture of second grade oleo
resin, essential oil, emulsifying agent and carrier oil. Spice filling
powder is less in aroma contains high carbohydrate. Used in curry
powder as raw material

The oleoresins, containing all the volatile as well as non-volatile


constituents of the spices, most closely represent the total flavour
of the fresh spice, most closely represent the total flavour of the
fresh spice in a highly concentrated form.For this reason
oleoresins are the preferred spice extract used for flavouring
purposes. The oleoresins is produced by extraction of the dry
spices with an organic solvent / solvent mixture. Whilst the choice
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of organic solvent is wide, it is usually restricted to the proven
solvents such as ethylene dichloride, acetone, hexane, or alcohol.
Special attention is always paid to the final stage of preparation, to
strip off residual solvent to ensure that any residue in the oleoresin
is minimal (always less than 30 ppm

1.5Manufacturing Process of Oleoresin


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1.6 Distribution of raw material for various


stages of production
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1.7 Production Process of Pepper

Pepper

Products from Pepper

 Garbled pepper
 Dry white pepper
 Dehydrated dry green pepper
 Green pepper in Brine
 Steamed graded black pepper
 Oleoresin
 essential oil
 co2 extract
 spice filling powder

Production and Uses

Dehydrated dry green pepper is produced from immature berries.


Immature berries are collected from the local market
Steamed graded black pepper is prepared from bulk black pepper
which is sieved with a mesh size 4.25mm (TGEB) and sort out all
the damaged berries. Meshed Pepper is sterilized with hot steam
and dried again. Which is free of moulds and fungus and is get
black in colour. Steamed Black TGEB grade Pepper is of high
demand in USA and other European union.

Oleoresin from the pepper is obtained by solvent extraction of the


powdered dried pepper with a suitable solvent and subsequent
removal of solvent .It is used in meet product,.soop,snacks
etc.spice filling powder is used in curry powder
The spice derives its flavor from piperine compound. It is widely
used for food flavoring and preservation.
Black Pepper is widely used in traditional medicinal systems
including ayurveda, Siddha and Unani systems. It is used for
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manufacturing medicines curing illnesses and diseases like heart
disease, indigestion, constipation, insomnia, joint pains, liver
problems, sneezing etc.

1.8 Distribution of raw material for


dehydrated green pepper
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1.9 Distribution of raw material for black


pepper value added products
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2. Feasibility study on profitability


Cardamom
We are planning to purchase 1000kg of cardamom at an average
rate of 550 per Kg . Purchased cardamom is graded with mesh size
about 6 mm and above. Graded cardamom measuring 7 mm and
above is about 70% and the quantity of cardamom measuring 6-
7mm is 12% of the total raw material purchased. Cardamom 7 mm
and above is exported as graded cardamom and 6-7mm is exported
as branded spices
Total cost of raw material purchased =1000*550
Rs. 550000
70% of the raw material: 1000*70/100
Graded spices above 7mm= 700

Total expenses of the graded cardamom including Labor cost,


packing material, cargo,etc=30000

Average rate of graded cardamom per kg = 950 Out put


Total Income from graded spices = 700*950 A
=2625000

12% of the total raw material for branded spices: 5000*12/100

Total Quantity of Branded spices 6-7mm =120


Total expenses of the branded cardamom for exporting including
all costs =10000 Out put
Total sale from branded cardamom=120*900
B
=108000
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Balance Quantity of cardamom after grading is used for the
production oleoresin, essential oil, spice drops,co2 extraction, spice
filling powder etc.

1 kg of oleoresin ,1kg of essential oil, 1 kg of co2 extracts and 25


kg of spice filling powder can be made
Out put
Sales from oleoresin =1*7000=7000 C

Out put
Sales from essential oil= 1*17000= 17000
D

Out put
Sales from co2 extraction= 1*20000 =20000 E

Sales from spice filling powder =25*100=2500


Out put

Total Expenses for per day F

Purchase Manufacturing,
Expense processing& packing
No product name Quantity per kg expenses per day
1 cardamom 1000 550 550000
Graded
2 cardamom 700 30000 30000
branded
3 cardamom 120 10000 10000
4 oleoresin 1 700 700
4 essential oil 1 850 850
5 co2 extract 1 200 200
spice filling
7 powder 25 300 300
TOTAL 591750
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Total sales per day

No product name Quantity sales per kg per day sales


Graded
1 cardamom 700 950 665000
branded
2 cardamom 120 900 108000
3 oleoresin 1 7000 7000
4 essential oil 1 17000 17000
5 co2 extract 1 20000 20000
spice filling
6 powder 25 100 2500
TOTAL 819500

Per day Gross profit =819500-591750


=227750
Per month gross profit =227750*25
= Rs. 5693750
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2.1Feasibility study on profitability of green


pepper

Total Projected production volumes

1000kg of green pepper is purchased from the local market at the


rate of 85 rupees
Per kg
Total purchase cost for pepper = 1000*85=85000

Cleaning Waste 2% = 20 kg
Green pepper in brine =480*15=7200

Sale from Green pepper in brine = 165 * 480=79200 Out


put A

Green pepper reserved for the production of Dehydrated green


pepper
=500
Process loss = 367.5

Dehydrated green pepper =122.5 *600 = 97,500


Out
put B
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Total production expenses

purchase
N product Quantit production cost per daily
o name y cost per kg kg expenses
raw material
1 purchase 1000 85 85000
green pepper
2 in brine 480 15 7200
dry green
3 pepper 122.5 80 9800
4 total 102000

Total sales

sales from Daily


No product name Quantity per kg sales
green pepper in
1 brine 480 165 79200
dry green
2 pepper 122.5 600 73500
total 152700
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Total gross profit

Total sales-total expenses= 152700-102000


=50700
Total monthly gross profit=50700*25
=1267500

2.2 Feasibility study on profitability of black


pepper products

Total Projected production volumes and profitability calculations

2000kg of black pepper is purchased from the local market at the


rate of 380rupees Per kg
Total purchase cost for pepper = 2000*380
= 760000
After graded for garbled the following graded will be remain
800 kg of steamed black pepper and 400 kg of Garbled branded
pepper
500kg of white pepper available us as finished products .Immature
berries, dust etc will be up to5kg

800kg is sorted out and sieved with a mesh size 4.25mm (TGEB)
and sort out all the damaged berries. Then the pepper is steamed
Production cost for steamed black pepper=800*40
= 32000
Sales from steamed black pepper =800*550
Out put
= 440000 A
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Production cost for garbled black pepper mg -1 grade=400*5


=2000
Sales from garbled black pepper =400*475
Out put
= 190000
B

500 reserved for white pepper production


50 kg process loss
450 kg finished white pepper
production cost = 450*20 = 9000
Sales from white pepper = 450*680
Out put
= 306000
C

After the production steamed black pepper and branded pepper


balance quantity is ready for the production of different value
added products is .1 kg of essential oil ,1 kg of oleoresin ,1kg of
co2 extract, 150 kg of spice filling powder . Production cost for
oleoresin is 160, essential oil is 160 co2 extract and spice filling
powder is 5.
Production cost of oleoresin =1*160
=160

Out put
Sales from oleoresin =1 *9000 = 9000
D

Production cost of essential oil=1*160


20
=160

Sales from essential oil =1*15000 Out put


=15,000 E

Production cost for co2 Extract = 1*175= 175


Sales from co2 extract = 1*20,000
20,000 Out put

Production cost Spice filling powder =150*5=750

Spice filling powder = 150*75 Out put

11250 G
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Total production expenses

purchase
expenses production daily
No product name Quantity per kg cost per kg expenses
raw material
1 purchase 2000 380 760000
2 white pepper 450 20 9000
stamed black
2 pepper 800 40 32000
grabled
3 pepper 400 60 24000
4 oleoresign 1 160 160
5 essential oil 1 160 160
6 co2 extract 1 175 175
spice filling
7 powder 150 5 750
Total 826245

Total sales

Daily
No product name Quantity sales per kg sales
stamed black
2 pepper 800 550 440000
3 branded spices 400 475 190000
4 white pepper 450 680 306000
4 oleoresign 1 9000 9000
5 essential oil 1 15000 15000
6 co2 extract 1 20000 20000
7 spice filling powder 150 75 11250
Total 991250

Total gross profit


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Total sales-total expenses= 991250-826245


=165005
Total monthly gross profit=165005*25
= 4125125

3.0Market Feasibility
The client's business needs are analyzed, information about project
participants is collected, and the requirements for the system
are gathered and analyzed. The client's expectations for
system implementation are studied and the proposed solution
is offered.

3.1Products

Our range of products in general include Graded and branded


spices, Spice essential oils, Oleoresins, Spice filling powder.

3.2Features and Benefits of our products

Graded spices and branded spices are used in food industry. Spice
oils and oleoresins can be used to advantage wherever spices are
used, except in those applications where the appearance or filler
aspect of the spice is of importance. 1Kg of oleoresin is equivalent
to 100 kg of raw spice and the oleoresin contains all the goodness
of that spice. Spice extracts were developed to meet the new
demands of the Food Processing Industry. They have the
following advantages:
1.Consistency in flavour.
2.Not affected by Bacterial contamination.
3. longer shelf life.
4.Easy for storage and handling.
5.Full release of flavour during cooking.
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6.Can easily be blended to achieve the desired characteristics
7.Delicacy and freshness close to natural.
8.High potency of active components.
9.Pollution free process.
10.No residual solvent
11.No residual pesticide

3.3Market and need assessment feasibility


report

Review of spices Export performance of Spices during 2011-


12 Even though there is decline in the total export performance
from the country during FY 2014-15, the Spices export sector
attained an all time record both in terms of quantity and value
during the said period. Spices exports have registered substantial
growth during the last five years, registering an annual average
growth rate of 21% in value and 8% in quantity and India
commands a formidable position in the World Spice Trade
The total estimated export of Spices from the country during
2014-15 has crossed US$ 2000 Million mark. During this period a
total of 5,75,270 tons of spices and spice products valued
Rs.9783.42 crore (US$2037.76 Million) has been exported as
against 5,25,750 tons valued Rs.6840.70 crore (US$ 1502.85
Million) in 2010-11, registering an increase of 9% in quantity and
43% in rupee terms of value. The increase in dollar terms over the
previous year is 36%. The total export of Spices during 2014-15
has also exceeded the target in terms of both quantity and value.
Compared to the target fixed 5,00,000 tons valued Rs.6500.00
crore (US$1450 million) for the financial year 2014-15, the
achievement is 115% in terms of quantity and 151 % in rupee and
141% dollar terms. During this period, the achievement in export
earning is high and mainly due to the rigorous focus and initiatives
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taken by the Board for value addition and higher end processing of
Spices. The better unit price of most of the Spices during the year
also helped for achieving the all time record in the export earning

After examined the above spices export data and Graph shows
that the market conditions are favorable for our company to
start spices export business.

3.4 Size of the Market.

The spice market is one of the biggest trading markets in the


world, in which India is contributing 47% of the total spice trading
in terms of quantity. Yearly India’s exporting volume comes around
250,000 tons of spice with the value of US$ 480 million and 6225
tones of spice oil and oleoresin are exported every year. The value
of these things goes up to 500 cores. USA has been the major
market with 1850 ton followed by Germany, UK, Japan, France,
South Korea and Spain. The data above is the 60% of the total
demand and so the rest of the 40% is to be fulfilled.

India’s share in world trade of spices in terms of quantity


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3.5 Market Trends.

Spice industry shows 3% to 4% of growth every year. People


are more cautious about their health and money is not a matte, to
afford, or the purchase value of the individuals in and out of the
country is going up. Better products will have better value and who
produce better products - The industry grows.
We have many number of precedence showing growth by leaps and
bounds, that sets an inspiring example for us. Many of the spice
oils are marketed online; the internet system revolutionized the
spice trading. This year spice products and graded spices rate
shows positive notes Rs200 hike for one kg cardamom alone. It
seems very safe in investing in spice industry.

The value added products from spice having good demand.


The Indian government and its executing agency The Spices Board
of India is promoting industries based on spices and they give
priority to the production of value added products. New trends in
Oil massage, the Aromatherapy is gaining momentum world wide
exotic Spa oil blends having good Indian market but they are
shortage in production very little and the majority of it is exported
to Australia and France. They are very expensive, when we entered
into the market we can sell this exotic product in much cheaper rate
to the domestic market and international market.

3.6 Market Analysis.

These industries who manufacture similar products are very


few in numbers and their production capacity is not enough for
fulfilling the export demand. Moreover companies latest
techniques are also very rare, who can give competitive products.
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Many of the products have international as well as domestic


demands. Production from genuine and fresh raw materials is
possible because the selection is done at the growing spot itself.
All the bye products are sold in the market in different forms.

Fluctuation in prices is the only weakness and this can be


overcome by grading of spices Opportunities are wide since the
team has got clear idea about few new products which we will take
up and will have monopoly in this market. (Special Spa Oil Blends
etc)Many of the international companies are ready to payment in
advance for particular products. Thus stagnation of costly
production can also be avoided.

Shipping loss, transportation delay, fund transaction delay


microbial contamination which is all can be controlled with close
and export monitoring
3.7Current demand

Demand forecasting
For the calculation of the demand we used different survey
methods
Survey methods
we conduct direct interview with potential consumers, organization
who supply the spices products, hyper market companies spices
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trading companies etc. all of these companies agree to buy our
products on certain conditions

A)Quality should be maintained above 97 %( Right now


companies who are engaged in the production of value added
products are giving 92-95% purity)
B) Graded spices should be very rich in aroma
C) High quality packing materials
D)Full fill their orders in time

Opinion survey method


To know the demand we also use opinion survey method. In this
method we collect the opinion of those who have the knowledge of
the market. We approach spices board of India for this purpose. the
officers give very good support for our project and help us to
collect the data regarding the demand in various spices and its
value added products. The board also helps us to find the importers
of spices in different countries.
We also approach professional experts who are in touch with the
spices trading, marketing and exporting companies for the last
decades. They also give us valuable information about size, nature
and growth of the industry

3.8 Customer Profile.

Our main targeted area is the countries from European


union,USA and gulf countries. We also aim at domestic market
mainly the upper-class marketing centers, then north Indian market
too .Graded spice and value added spice products having national
and international demand. In India government of India appointed
a nodal agency The Spices Board of India, to look after the
cultivation, production, marketing and export of the spice from
India. The spice board of India arranges Spice Trade Exhibition to
attract the customers for the Indian Spices. It also publishes a
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fortnightly magazine called “ Foreign Trade Enquires/
Information Bulletin,” which give us detailed sketch of
requirement abroad with company name, address and e-mail ID
with phone number. We personally engaged in the market and find
out the potential buyers in USA, England, France, Holland and gulf
countries. We have discussion with Reliance hyper market,
Spencer’s plaza and hyper market, Lulu super market which have
both domestic and international outlet. And - Our range of products
includes the most wanted material in medicinal, beverage,
confectionary and food industries. All the tourist places have retail
outlet where many of our company products are of great demand.
Spa oils or other wise known as massage oil blends have an
upcoming demand and the utilities and the varieties are yet to be
exploited.

3.9 Consumer’s expectation

Consumers from the europium union, USA, gulf countries expect


very good quality. The spice oil we produce free from pesticides.
We take only quality spices form our grading and so the finished
products are absolutely free from contaminants and adulterations.
We keep the goodness of the product and MOP packing and
various other packing techniques. We are giving 99% purity against
92%, so we can fulfill customer’s needs.

3.10 Sales Strategy.

Sales are done in two ways – one is exporting and other is


domestic. Internationally we sell bulk quantities as per orders from
reputed companies through LC, for which we have special sales
executives in several countries who are working there for many
years. Small quantity can be sold through E banking and website
orders. In India we will have super stockiest in a southern state and
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few new centers in the north. Hyper markets and super markets are
also aimed by the company to do direct sales.

3.11 Distribution Channels


We are planning to sell our products through Wholesale and Retail,
hipper markets, mail order, through web, through different agents
in different countries, our own sales force, Independent
representatives, Bid on contracts etc

Hyper markets
1. Spencer’s
2. Reliance
3. Future Groups
4. Maxis
5. Spar foods hyper market

3.12 Pricing strategy

We are planning to adopt three pricing polices. In first phase the


pricing is below market price, in the second phase the pricing is
at market price and the third phase the pricing is above the
existing market market price
Pricing below market price-this policy is adopted due to the
tough completion for our new company with the established
company .it gives our company an opportunity to give
popularity and establishes itself. This pricing policy has been
found more successful in case of our new company
Pricing at market price- this policy is adopted when our
company gets reputation and good will .this is most reasonable
pricing strategy for a product which has been sold in a perfectly
competitive market .The products can be sold in any quantity at
the existing market
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Pricing above the existing market. This policy is adopted
when our Company achieve prestigious position in the world
spice market

3.13 Advertising

When considering domestic marketing. Advertising


have much important the Media like TV and magazines can be
utilized for this purpose. Same time we can use same type of
strategy in international market also. Air lifting and shipping the
main method of transporting. Airlifting is costlier than shipping
and the approximate are as follows.

3.14Competition

Competition will be there, but market demand and better quality


will favor products mobilized .Customer needs high quality and
more spicy products. Many of products don’t have competitors in
our country. Considering oleoresins and spa oils we are having
international standards Co2 distillation.The technique in which we
get the solvent as the end product. Many of our competitors are still
using oils solvent extraction system in which solvent residue up.
Many products now in market are not maintaining international
quality for each and every product. So by the entry of our
company to the market, the customer gets good quality products
from us.

3.15 List our major competitors


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Leading firm's supplying the flavours are Switzerland's Givaudan,
US firm International Flavors & Fragrances (IFF), Firmenich,
Symrise and Quest International, Eden botanicals etc.from India
the main competitors are synthate , Avt etc

Specialty of our products to overcome the competition

 30% discount from the international price


 99 % purity of the products
 Brand name of Indian spices
 Reputation of the locality(main spices like
cardamom,pepper,vanilla are produced in our locality)
 Fresh Appearance of spices
 Wide range of products

Strength: This is mainly an export unit but all the by products


after spice oils and few new products like paste and branded spices
will have a hot market in the whole and retail segment. Many of
our competitors are using old techniques for the production of
spice oil and oleoresign.we are using most modern extraction
technique. Instead of 92% purity we are giving 99 % purity. We
also selling our products 30% discount from the market price we
believe that this two factors are our main strength.
Weakness: The only weakness is we are the new comers

4.0 Legal feasibility


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Considering the legal feasibility our company is involved in the


business of spices processing and spices value added products
,which are ecologically harm less to the ecology . The solvent
used in the production procedure manufacturing essential oils and
oleoresin is organic solvents. There is no major pollution problem
associated with this industry except for disposal of waste which
should be managed appropriately. We are advised to take “No
Objection Certificate” from the State Pollution Control Board. so
there is no question of pollution

All the licenses are obtained from the local authorities in time

The company also acquired export license for export procedure

The company also have cardamom dealer licenses which allow


to participate in Cardamom auctions

At this level, the company believes that the proposal to start spices
processing and production of spices value added products is legally
feasible

5.0 Financial Feasibility
As per the project report we estimate a total capital
requirements of 2crores This amount is used for starting and
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managing exporting of spices and its value added products. The
financing is required for the maintenance, work on site preparation
and modifications, to setup factory buildings equipment and
machinery purchases, power connections, licences,raw material
purchase and to cover expenses in the first year of operations.

The large initial capital investment will allow the company to


provide its customers with a full featured spices exporting and
marketing company. The company expects 282660000 Income in
first year with a net profit of RS. 34785350. The company can
return the loan amount with in five years. The project has been
planned by a team of young people with technical qualification and
work experience to run this multi core project to a success story.
5.1Start-up costs

When a new spices processing and value added business is


started, it is likely that money will be required to buy or
convert a building and buy equipment to start production.
Additionally, it is necessary to buy a stock of packaging
materials and the initial raw materials and ingredients. The
start-up capital is the amount of money that is needed to buy
the facilities and equipment, to register and licence the
business and get the necessary hygiene certificates.
1 fixed capital 1800000
2 machinery and equipment 9505000
3 pre­operative expenses 1195000
  TOTAL 12500000
Total amount needed for start up is about 1.25 crores

5.2Working Capital
Working Capital includes the costs of raw materials,
packaging, staff training, product promotion Startup salary
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for 3 months, Preliminary Factory operating cost, Reserve
fund for Emergency purchase etc . that have to be made
before the business begins to generate income from sales of
the product

working capital include raw material purchase for 4 days,


Startup salary for 3 months, Preliminary Factory operating
cost, Reserve fund for Emergency purchase etc .thus we will
cover total investment of 75 lakhs.

WORKING CAPITAL

No. of
Days/Month
A raw material s Quantity rate/kg total
1 cardomom (25days) 4 1000 550 2200000
2 black pepper(2) 4 2000 380 3040000
Startup salary for 3
B months 1140000
Preliminary Factory
C operating cost 220000
Reserve fund for
D Emergency purchase 900000

7500000

5.2 Comparison of profit with repayment


Amount in
lakhs
35

The projected net profit shows that the investment of total


capital requirement of 2 crores is via able so that from
the first year itself the initial amount along with interest
can be easily returned.

6.0 Observations

An expert team is closely watching the market growth, market trends.


Customers profile, company pricing polices, introduction of new products,
through spice board, inquires from internet and other available data. The
team is eagerly watching Change in technology, Change in government
regulations, Change in the economy, Change in industry. The information are
collected and updated every 24 hours

6.1Conclusion
36

Our different range of products, their features and benefits played an


important role for the demand of our products. if we consider the total size of
the market and the shortage to be fulfilled ,this is very good time to enter in
this market. With our presence we believe that 5 % of the shortage will be
fulfilled by us on 2018. The growth of the spices industry, the current
demand, our government polices, support from the cardamom and pepper
farmers, large area cardamom and pepper cultivators also give us a very
good support to enter this market .

All the available data that we have examined and come to the conclusion
that we can find the market easily . The full part of the business, including
profitability and annual production chart being examined. The study shows
that the project is 100 % feasible . Although, due care and diligence has
been taken to compile this document, the contained information may vary
due to any change in any of the concerned factors, and the actual results may
differ substantially from the presented information
37

Feasibility Report

Prepared for

Nellikka Natural Products and Dry Food