PRODUCT PROFILE OF ROASTED RICE FLAKES

INTRODUCTION
Generally the beaten rice is a popular food for all kinds of human living in India. Most
people used this as a raw food in ancient times which is very easy to produce and
prepare at home. Now the people are making different kinds of recipes with this by
adding sweetness or spices. This is rich in fiber and carbohydrate and can be
consumed even by those suffering from diabetes, high blood pressure etc. Now the
medical journals are also encouraging the same. Another point to be remembered is
that paddy is available in plenty in India and hence the raw material has no shortage.

PRODUCT
India has introduced new methods to evolve the roasted flakes with different spices
and sweetness. This can be directly used as a snack or light food. This can easily
attract both small children and elders. Also one of the specialties is the easiness with
which the product can be prepared though it consumes a little time.

MARKET POTENTIAL
This product in the market is relatively new one. Hence it has tremendous scope. A
good quality product in attractive pack will give a boost in marketing the product. The
main scenario in rice flakes is that it is pure in nature and adding spices or sweets will
not contaminate it in any way.

TECHNICAL ASPECTS
The Process
The paddy is cleaned and stones are removed. It is soaked in water and boiled in a
boiler. When it is lowered its temperature is reduced a little and is pounded or pressed
mechanically to form flakes. It is sieved and roasted by adding the required flavors.
This product is packed and labeled indifferent weights.
 FINANCIAL ASPECTS
Fixed Capital
Land and building
It is estimated that a land of 5000 sqm is required with 2500sqm with buildup area.
Cost of land in urban area is calculated as Rs 20,00,000/- and the cost of construction
is taken as Rs 25,00,000/-
Plant and machinery
It is suggested to install a unit with annual production capacity of 2500MT based on
300 working days and 1 shift per day.
No ITEM QUANTITY PRICE(IN
LAKHS)
1 Avil mill 20 42.00
2 Roaster 20 35.00
3 Husk fired Furnace 5 25.50
4 Paddy soaking tanks 14 27.20
5 Sieves 10 14.00
6 Sealing machines 5 4.00
TOTAL 147.70

Furniture and fixing

A provision of Rs 4,50,000/- is provided for the working tables furniture and fixtures
storage facilities.

Utilities
Power requirement shall be 150 hp and daily water consuming is Rs7500 for 8000
liters.

Manpower requirement

Monthly salary Total Monthly salary

Particulars
(Rs) (Rs)
Skilled workers 20 6000 120000
Semi-skilled 20 5000 100000
Workers
Helpers 20 4000 80000
Sales man 10 6000 60000
Security Guard 3 8000 24000
Peon 2 4000 8000
Cleaning staff 4 4000 16000
 Accountant 1 15000 15000
Manager 1 35000 35000
TOTAL 458000

Details of project cost

A) Land and building

Particulars Area Cost(Rs)

Land 5000SqM 2000000
Building 2500SqM 2500000
TOTAL 4500000

B) Plant and machinery

A total cost of Rs 94.74 Lakhs is calculated in this head.
C) Miscellaneous assets
A provision of Rs4,50,000/- is provided to this project
D) Preliminary and preoperative expenses
This include some charges like registration, trial run expenses, interest during
implementation etc. and are covered with a provision of Rs150,000/-
E) Working capital requirement (with a capacity utilization of 60%)
Particulars Period Margin Promoters Bank Total
(Lakhs)
Stock of Materials 1 Month 30% 4.53 10.57 15.10
Stock of Finished ½ months 25% 5.5 16.50 22.00
Goods
Receivables 1 Month 25% 2 5.95 7.95
Working Expenses 1 month 100% 5 5.00
Total 17.03 33.02 50.05
Roundup 17 33 50

Cost of project
Amount
Item
(Lakhs)
Land and Building 45.00
Machinery 147.70
Miscellaneous assets 4.50
Preliminary & Preoperative Expenses 1.50
 Contingencies @10% on fixed assets 15.00
Working Capital 50.00
263.70
Means of Finance
Promoters contribution 52.70
Loan frombank Term loan Working capital 211.00
Total 263.70
Assumptions
a) Utilities: the annual expenditure towards power and water is estimated to be
Rs 200000/-
b) Selling expenses: Rice flakes will be sold through retailers. For this commission
andtransportation charges will be there. Hence a provision @ 12.5% is
provided.
c) Interest on term loan is calculated as 12% per annum assuming a repayment
period of 4years. Interest on working capital is taken as 14% per annum.
d) Depreciation. It is calculated assuming @10% on building and @20% on plant
and machinery
Raw material required per annum

Quantity Value
Product Rate/ price
(MT) (In Lakhs)
Paddy 2500 8900 222.25
Spices 250 4000 10.00
232.25

Sales Revenue at 100%

Sales
Product Quantity Selling price
(In Lakhs)
Roasted flakes 2000 12000 240.00
Rice Bran 250 2000 10.00
250.00
 Calculation of profit
No Particulars Year1 Year2 Year3 Year4
A Installed capacity 2500 MT
Capacity utilization 60% 70% 80% 100%
Sales realization 245 298 328 360

B Cost of production Year1 Year2 Year3 Year4

Raw materials 139.5 162.8 186.00 209.3
Utilities 36 42 42 54
Salaries 28.8 28.8 28.8 31.7
Stores &Spares 2 2 2 2
Repairs and 3 3 3 3
Maintenance
Selling expenses 19.1 19.1 19.1 19.9
Administrative 3.0 3.0 3.0 3.0
Expenses
Total 231.40 254.70 277.90 300.90

C Profit before 13.6 43.30 50.10 59.10

Interest and
Taxation
Interest on Term 8.3 8.3 6.3 4.3
loan
Interest on 3.6 3.6 3.6 3.6
working capital
Depreciation 10.9 10.9 10.9 10.9
Profit before tax (9.2) 20.50 29.30 40.30
Income tax @30% 0 6.15 8.79 12.09
Profit after Tax (9.2) 14.35 20.51 28.21
Cash accruals 1.7 25.25 31.41 39.11

CONCLUSION:
On the basis of the aforementioned financial data and profitability analysis combined
with the vast experience of our management in setting up the green field projects and
taking them to new heights, will surely help to earn good revenues. We will be able
to meet the obligations of Banks and other financial institutions timely as well as also
to generate sufficient cash profits which can further be utilized for our expansion plans.