PUFFED RICE

1. Introduction
Puffed Rice is a commonly consumed commodity as a pastime snack. It can
be used in combination with nuts such as groundnut or roasted and salted cashews;
with fried gram; with jaggery and coconut gratings, or dusted with salt and spices
after enrobing with oil. Since the product is easily digested and assimilated,
it finds a wide acceptance among a cross section of the households. It is a versatile
product with an excellent market potential.
2. Market
The major market outlets are the “ A” and “B” class outlets. The product also
finds placement in self service counters and departmental stores. Some “C” class
outlets also stock the product.
3. Packaging
The processed product is packed in 50 grams and 100 grams pouches.
4. Production capacity
• The plant will be in operation for one shifts a day.
• The plant operates to a production capacity of 25 kilograms per hour.
• The estimated production per day is 200 kilograms.
• The total production per month will be 5 M.T while the annual production is
estimated at 60 M.T
• The time period required for achieving full capacity utilization is one year.

5. Sales revenue
• The ex-factory selling price will be Rs. 50 per kilogram thereby yielding a
sales revenue of Rs. 30 lakhs on full capacity utilization.

6. Production process outline.

Rice is first cleaned to remove stones and husk. It is then soaked in brine
solution and dried. On drying it is fed into the puffing machine from where the

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puffed product is obtained. It is cooled and packed immediately to prevent
moisture absorption.
7. Quality specifications
• Moisture - Maximum 2.0%
• Mold and fungal growth - Absent
• Stones and mud - Absent
• Total plate count - Maximum 10,000 per gram
• Coliforms - Absent
• Salmonella - Absent
• Streptococci - Absent

8. Pollution control measures

Not necessary as there are no pollutants or effluents.
9. Energy conservation measures
Common measures will do.
10. Land and construction cost for the proposed unit
The processing area is to be taken up on lease. The area required is 1600
square feet as described below.
Sl Description Sq. feet
1 Processing area 500
2 Raw material store (paddy) 400
3 Finished goods storage room 400
4 Packaging material storage room 100
5 Office space 100
6 Toilet space 100
7 Total 1600
Lease rent – Rs. 5.00 per square foot
Total rent per month – Rs. 8000
Lease advance – Rs. 40000

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11. Costing of machinery and equipment
Sl Description Rs. lakhs
1 Paddy destoner 0.250
2 Puffing machine with accessories 1.250
3 Storage silo 0.350
4 Weighing scales and accessories 0.150
5 Total 2.000

12. Project cost

Sl Description Rs. lakhs
1 Land On lease
2 Civil works On lease
3 Plant machinery 2.000
4 Laboratory equipment 0.000
5 Transport vehicle (Tata Ace) 3.760
6 Pollution control equipment 0.000
7 Energy conservation equipment 0.000
8 Cost of power connection 0.250
9 Cost of electrification 0.350
10 Erection and commissioning 0.200
11 Cost of machinery spares 0.050
12 Cost of office equipment 0.500
13 Deposits if any 0.320
14 Company formation expenses 0.100
15 Gestation period expenses 0.300
16 Sales tax registration expenses 0.100
17 Initial advertisement and publicity 2.000
18 Contingencies 0.150
19 Working capital margin money 0.500
20 Total 10.580

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13. Working capital requirements per month
a. Salaries and wages
Sl Description No of Total
persons salary /
month
(Rs. lakhs)
1 Production In charge (female) 1 0.080
2 Production supervisor (female) 1 0.060
3 Skilled workers (female) 1 0.050
4 Unskilled workers (female) 2 0.060
5 Packing workers (female) 2 0.040
6 Driver 1 0.050
7 Total 8 0.340
b. Raw material requirement per month
Sl Description Qty Rate / kg Value
(kgs) (Rs) (Rs. lakhs)
1 Rice 5000 16.00 0.800
2 Total raw material 5000 0.800

c. Packaging material requirement per month

Sl Description Qty Rate / unit Value
Rs) (Rs. lakhs)
1 Primary packaging 20000 nos 1.00 0.200
material – poly
propylene pouches

2 HDPE bags 4000 nos 5.00 0.200

3 Total 0.400
Total raw + packaging material = Rs. 1.200 lakhs

d. Utilities per month

Sl Description Rs. lakhs
1 Power 2000 kwh @ Rs. 5.50 per unit 0.110
2 Water 0.010
3 Boiler fuel 0.000
4 Total utilities 0.120

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e. Contingent expenses per month
Sl Description Rs. lakhs
1 Rent for processing shed 0.080
2 Postage and stationery 0.010
3 Telephones, fax etc. 0.050
4 Consumable stores 0.020
5 Repairs and maintenance 0.028
6 Local transports, loading and unloading 0.100
7 Advertisement and publicity @ 5% of sales 0.125
8 Insurance 0.006
9 Sales expenses @ 1% of sales 0.025
10 Miscellaneous expenses @ 1% of sales 0.025
11 Trade incentives @ 2% of sales 0.050
12 Total contingent expenses 0.519

f. Total working capital requirement per month

Sl Description Rs. lakhs
1 Salaries and wages 0.340
2 Raw material and packaging material 1.200
3 Utilities 0.120
4 Contingent expenses 0.519
5 Total 2.179

14. Means of finance

Sl Description Rs. lakhs
1 Total Project Cost 10.580
2 Equity 3.527
3 Debt 7.053
4 Working capital margin money 0.500

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15. Financial analysis
Sl Description Rs. lakhs
1 Total recurring cost per year 26.148
2 Depreciation on land and building 0.000
3 Depreciation on machinery and vehicle 0.355
4 Depreciation on furnaces 0.000
5 Depreciation on moulds and fixtures 0.020
6 Depreciation on office equipment 0.100
7 Interest on long term loan @ 12% 0.846
8 Interest on short term borrowings@ 12% 0.213
9 Total cost of production 27.682

16. Turnover per year

Sl Item Qty Rate/unit Total

(Rs) Rs. lakhs

1 Puffed rice 60000 kgs 50 30.00

17. Viability analysis

Sl Description Value
1 Net profit before income tax (Rs. lakhs) 2.318
2 Net profit ratio 7.7%
3 Internal rate of return 20.8%
4 Break even percentage 54%
5 Debt service coverage ratio 1.868

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Strengths:
• DISTRIBUTION NETWORK: The Company has a strong and reliable distribution
network. The network is formed on the basis of the time of consumption and the
amount of sales yielded by a particular customer in one transaction. It has a
distribution network consisting of a number of efficient salesmen, 26,000 retail
outlets. The distribution fleet includes different modes of distribution, from
contracted transportation for goods carrying task of 10-tonne trucks to open-bay
three wheelers that can navigate through narrow alleyways of Indian cities and
trademarked three-wheelers.
• STRONG BRANDS: The products produced and marketed by the Company have a
strong brand image. People all around the India recognize the brands marketed by
the Company. Strong brand names like Sprite, Fanta, Limca, Thums Up and Maaza
add up to the brand name of the CAMPA -Cola Company as a whole. The red and
white CAMPA -Cola is one of the very few things that are recognized by people all
over the India. CAMPA -Cola has been named the India's top brand for a fourth
consecutive year in a survey by consultancy Interbrand. It was estimated that the
CAMPA -Cola brand was worth $70.45billion.

• LOW COST OF OPERATIONS: The production, marketing and distribution

systems are very efficient due to forward planning and maintenance of consistency
of operations which minimizes wastage of both time and resources leads to
lowering of costs.

Weaknesses:

• LOW EXPORT LEVELS: The brands produced by the company are brands produced
Indiawide thereby making the export levels very low. Over that even domestic demands are
sometimes go unfulfilled. In India, there exists a major controversy concerning pesticides
and other harmful chemicals in bottled products including CAMPA -Cola. In 2003, the
Centre for Science and Environment (CSE), a non-governmental organization in New
Delhi, said aerated waters produced by soft drinks manufacturers in India, including
multinational giants PepsiCo and CAMPA -Cola, contained toxins including lindane, DDT,
malathion and chlorpyrifos- pesticides that can contribute to cancer and a breakdown of the
immune system. Therefore, people abroad, are apprehensive about CAMPA -Cola products
from India.

• IMPORT FROM OTHER MANUFACTURERS: Import of few particular packaging’s from

other manufacturers ads a cost to the business, like importing of cans from Pune and water
from Delhi etc. But this problem will be soon removed with the establishment of new
bottling line in Saha.

Opportunities
• LARGE DOMESTIC MARKETS: The domestic market for the products of the Company is very
high as compared to any other soft drink manufacturer. CAMPA -Cola India claims a 58 per cent
share of the soft drinks market; this includes a 42 per cent share of the cola market. Other products
account for 16 per cent market share, chiefly led by Limca.
• HIGHER INCOME AMONG PEOPLE: Development of India as a whole has lead to an increase in
the per capita income thereby causing an increase in disposable income. Unlike olden times, people
now have the power of buying goods of their choice without having to worry much about the flow
of their income. The beverage industry can take advantage of such a situation and enhance their
sales.
Threats
• IMPORTS: As India is developing at a fast pace, the per capita income has increased over the years
and a majority of the people are educated, the export levels have gone high. People understand trade
to a large extent and the demand for foreign goods has increased over the years. If consumers shift
onto imported beverages rather than have beverages manufactured within the country, it could pose
a threat to the Indian beverage industry as a whole in turn affecting the sales of the Company.
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 • SLOWDOWN IN RURAL DEMAND: The rural market may be alluring but it is not without its
problems: Low per capita disposable incomes that is half the urban disposable income; large number
of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption
linked to harvests and festivals and special occasions; poor roads; power problems; and
inaccessibility to conventional advertising media. All these problems might lead to a slowdown in
the demand for the company’s products.

STRATEGIC MANAGEMENT

Strategies
POSITIONING STRATEGY : It means that you try to give image to your product in the mind of the
customers. To give a true and positive picture of the product is the best positioning. The company should
promote its good points or comparative advantage which it has over its competitor.
DIFFERENTIATION STRATEGY : In order to serve your target market you introduce different
things to your product so that your product can be differentiated from other products. Basis of Differentiation
There are many bases on which a product can be differentiated but Coke has differentiated its product on the
following base:
Product Differentiation- Coke differentiate its product from its competitors on the basis of brand, quality and
taste.
Image Differentiation- Logo is used for image differentiation. Logo is what establishes a brand name in the
consumer mind. It is the brands identification, signature and image. CAMPA -Cola has kept on changing its
logo from time to time.
PROMOTION STRATEGIES
Price Strategy Trade Promotion: CAMPA -Cola Company gives incentives to middle men or retailers in a
way that they offer them free samples and free empty bottles, by this these retailers and middle man push their
product in the market. And
hat's why CAMPA -Cola seen more in the market. And they have a good sale in the market because according
to the expert which product seen more in the market that sells more." Seen as sold"
They do agreements with a shop keepers and stores to exclusive sale in those stores. These stores are called
as KEY accounts in their local language. And CAMPA also invest heavy budget on these stores and offers
them free samples and free bottles and some time cash incentives.
Advertisement Strategies: CAMPA -Cola Company use different mediums for advertisement.
• Print media : They often use print media for advertisement. They have a separate department for
print media.

TV commercial : As everybody know that TV is a most common entertaining medium so TV commercials is

one of the most attractive way of doing advertisement. So CAMPA -Cola Company does regular TV
commercials on different channels.

• Billboards and holding;

FUTURE PLAN-A LOOK FROM PRESENT

Maximise Company and bottler long-term cash flow . Attract, engage and retain the best talent. Develop and
deploy the India’s most innovative and effective marketing . As we look ahead to the year 2020, we see
tremendous growth opportunities for our franchise system and for the entire non alcoholic ready-to-drink
beverage industry.
We are working closely with our bottling partners around the globe, leveraging our scale and the increased
presence of our brands. We remain confident in our ability to deliver against our strategies while laying the
foundation for consistent, profitable and sustainable long-term growth, inspired by our 2020 Vision in a
growing India of refreshment."
• Aggressively increase the value of our portfolio.
• Think and act like an integrated global enterprise while intensifying our local focus. Become a
critical part
of our customer’s growth strategies.
• Create competitive advantage by fulfilling our Live Positively commitments.
• Design and implement the most effective and efficient business system.
TAP’s future plan is just to track ways to strengthen their position in the market more firmly and not only to
strengthen old relations with a decade long known retailers but also with the evolving novice in the market.