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PROJE
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H Y PROCESSING
HONEY G

PURPOSE O
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This partticular pre-fe

easibility is re
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oney Process
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The obje
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dentification for investment and in o
order to serv
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various aspects of the projecct concept development, start-up, marketing
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Lucknow O Office: Sidhivin

nayak Building ,
27/1/B, Gokhlley Marg, Lucknow-226001
L 1

Delhi Officce : Multi Discip

plinary Trainin
ng
Centre, Gaandhi Darshan Rajghat,
New Delhi 110002

Email : inffo@[Link]
Contact : ++91 75260003333, 444, 555
 PROJECT AT A GLANCE

1 Name of the Entreprenuer xxxxxxxxxx

2 Constitution (legal Status) xxxxxxxxxx

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxxxxxxx
Mobile xxxxxxx

5 Product and By Product : HONEY

6 Name of the project / business activity proposed : HONEY PROCESSING UNIT

7 Cost of Project : Rs.46.73 Lakhs

8 Means of Finance
Term Loan Rs.32.06 Lakhs
Own Capital Rs.4.67 Lakhs
Working capital Rs.10 Lakhs

9 Debt Service Coverage Ratio : 2.13

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 28%

13 Employment : 10 Persons

14 Power Requirement : 40.00 HP

15 Major Raw materials : Raw Honey, Chemicals and consumables, packing material

16 Estimated Annual Sales Turnover (Max Capacity) : 225.86 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land Own/Rented
Plant & Machinery 34.12
Furniture & Fixtures 1.50
Working Capital 11.11
Total 46.73

MEANS OF FINANCE
Particulars Amount
Own Contribution 4.67

Working Capital(Finance) 10.00

Term Loan 32.06

Total 46.73
 HONEY PROCESSING

Introduction: Honey means the natural sweet substance produced by

honey bees from the nectar of blossoms or from secretions of plants which
honey bees collect, transform store in honey combs for ripening. It shall be
free from any foreign matter such as mould, dirt, scum, pieces of beeswax, the
fragments of bees and other insects and from any other extraneous matter.
Honey is among the most popular and widely used sweetener with enormous
health benefits. It is used by several cultures around the world serving as a
base for many traditional medicines, especially in Ayurveda. It is used in
strengthens immune system, preparing cosmetic products, health tonic and
food processing industries for preparing different types of drinks, bakery
products, sweets etc. Beekeeping is an ideal activity for development as a
subsidiary occupation providing supplementary income. Beekeeping is
feasible in areas where adequate bee flora available for a minimum period of 6
months. Honey produced by Indian hive bees is collected by modern extractor.
The extracted honey contains hemophilic yeasts, which causes fermentation
and destroy the quality of honey. To maintain the qualitative and quantitative
value of honey the processing in modern Honey Processing plant is essential.
Product & it’s Application: From centuries, honey has been used as a
natural sweetening agent and in the preparation of confectionaries. It has vast
application in the pharmaceutical industry, and it is also considered as a
medicine by Ayurved. It is popularly used as a household cure for cough and
hence used as vehicle for medicines in many popular brands of Cough Syrup.
It is a preferred consumable for people on dieting. Honey is also used for
making lozenges. However, it is mostly sold in glass Jars as pure honey. In
bottled honey normally moisture content of honey is reduced. Good quality
honey has high demand in the international market and it has the potential to
generate substantial foreign exchange for the Country.

Market Potential: Honey is a major consumable in the international

market both as a food item as well as in industries such as Pharmaceuticals,
Cosmetics and Confectionary. The demand is especially high for refined, high
quality honey free pesticides, insecticides and other agrochemicals. In the
domestic market very little amount of honey is use for personal consumption,
while majority is utilized by the pharmaceutical and confectionary industry.
With changing life style and increasing health consciousness, honey is been
increasing consumes as health food. This is likely to drive the domestic
demand in future.
As per the information available from Agricultural & Processed Food Products
Export Development Authority, India has exported 51547.31 MT of Natural
Honey to the world for the worth of Rs. 653.58 crore/ 101.32 USD Million
during the year of 2017-18 and the Major Export Destinations (2017-18) are
USA, Saudi Arab, U Arab Emts, Canada and Qatar.

Raw material: Only honey and basic packing material (bottle, lids and
labels) are required for raw material.
Machinery Requirement: Major machines and equipments are as
follows:

S Name Quantity Amount

No.
1. Receiving SS Tank Inner Shell made of 4 mm 2 874000
thickness SS 304 , Bottom cone & top lid open
25%. Outer shell made of 4 mm thickness, SS
304, bottom cone 4 mm thickness SS 304. Top
inlet, bottom drain with valves. Inside stirrer
can provide. Stirrer drive3.0 HP 20 rpm flange
mounted gearmotor (Non-FLP), Mounted on
SS 304 legs. Capacity 750 ltr.

2. Primary Filter Shell made of 2 mm thickness 1 56000

SS 304, bottom cone 2 mm thickness SS 304,
top lid open type with lock nuts, inside SS 304
1mm hole mesh can provided. Top inlet &
bottom drain with valve, Mounted on SS 304
legs. Capacity 25 Ltr.

3. Gear Pump With Motor Capacity: 130 LPMDiff. 1 95000

Head: Max. 10 kg/cm Motor: 5.0 HP (3.7
kw)Capaciy: 130 LPM

4. Bag Filter (Dual Type):Shell made of 3mm 1 157000

thickness SS 304, bottom dish 3 mm thickness
SS 304, top lid open type with lock nuts, inside
perforated basket with 100 microns filter
cloths. Top inlet, bottom drain & air vent with
valve. Mounted on SS 304 legs.

5. Moisture Reduction TankShell made of 3mm 1 965000

thickness SS 304, bottom cone 3 mm thickness
SS 304, top lid open type with lock [Link]
perforate plates with supports,and bottom hot
nozzle with heating chamber & 7.5 HP blowers
and top side suction 7.5 HP blowers & control
panel can provide.
6. Jacketed Storage TankInner shell made of 3 2 616000
mm thickness SS 304, Bottom cone 3 mm
thickness SS 304, top lid 25% open. Air vent
with value, top inlet & bottom drain with
valves can provided. Mounted on SS 304 legs.
Capacity: 1500 Ltr.

7. Modular FrameMaterial of construction 1 95000

(MOC): MS

8. Hot Water Boiler (Wood Fired)MOC: SS MS 1 157000

9. Semi-Automatic Single head Machine To fill 1 347000

viscous products I Premade
Pouches/Jars/Containers with piston operated
filling system. Model able single filling station
machine with adjustable tray. Feeding System:
Volumetric Piston Operated filling
systemProduction Speed: 8 to 20 fill/min
(depends on materials) Filling Range:+/- 2-3
gms No. of filling counter: Adjustable screw
system AirCompressor-3.0 HP

10. Other equipments and hand tools Ls 50000

Total Amount 3412000

Manufacturing Process: The industry of honey is not a simple sequential

chain of processing operations, although the normal consumer may consider it
in this way, at first sight. It should be noted that each processing step, from
the initial extraction to the packaging of the final food product, is the answer
to peculiar problems concerning the physicochemical and biological features
of different honeys.
In general, the following integrated steps are given below:

 Initial Extraction
 Dehumidification
 Liquefaction and mixture
 Heating
 Pasteurization
 Crystallization
 Final Packaging

Area: The industrial setup requires space for Inventory, workshop or

manufacturing area, space for power supply utilities and auxiliary like
Generator setup. Also some of the area of building is required for office staff
facilities, documentation, office furniture, etc. Thus, the approximate total area
required for complete industrial setup is 2500 to 3000Sqft.

Power Requirement: The power consumption required to run all the

machinery could be approximated as 40 Hp

Manpower Requirement: There are requirement of skilled machine

operators to run the machine set. Experience quality engineers are required
for desired quality control. Some helpers are also required to transfer the
material from one work station to other. Office staffs are required to maintain
the documentation. The approximate manpower required is 10 including 1
Supervisor, 2 Plant Operator, 2 unskilled worker, 1 Helper and 1 Security
guard. 3 Skilled worker including Accountant, Manager and Sales person.

Bank Term Loan: Rate of Interest is assumed to be at 11%

Depreciation: Depreciation has been calculated as per the Provisions of
Income Tax Act, 1961

Approvals & Registration Requirement:

Basic registration required in this project:

 GST Registration
 Udyog Aadhar Registration (Optional)
 Choice of a Brand Name of the product and secure the name with
Trademark if require.
 NOC from State Pollution Control Board

Implementation Schedule:
S No. Activity Time required
1. Acquisition of premises 1-2 Months
2. Procurement & installation of Plant & Machinery 1-2 Months
3. Arrangement of Finance 1.5-2 Months
4. Requirement of required Manpower 1 Month
5. Commercial Trial Runs 1 Month
Total time Required (some activities shall run 5-6 Months
concurrently)

FINANCIALS
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 6.52 11.32 17.61 23.41
Add: Additions 4.67 - - - -
Add: Net Profit 4.84 8.20 12.29 15.80 18.98
Less: Drawings 3.00 3.40 6.00 10.00 12.50
Closing Balance 6.52 11.32 17.61 23.41 29.90

CC Limit 10.00 10.00 10.00 10.00 10.00

Term Loan 28.50 21.37 14.25 7.12 - 0.00
Sundry Creditors 2.26 2.67 2.97 3.26 3.56

TOTAL : 47.27 45.36 44.83 43.80 43.46

APPLICATION OF FUND

Fixed Assets ( Gross) 35.62 35.62 35.62 35.62 35.62

Gross Dep. 5.27 9.75 13.57 16.82 19.60

Net Fixed Assets 30.35 25.87 22.05 18.80 16.02

Current Assets
Sundry Debtors 4.48 5.44 6.12 6.82 7.53
Stock in Hand 9.25 10.79 12.08 13.39 14.73
Cash and Bank 3.19 3.27 4.58 4.79 5.18

TOTAL : 47.27 45.36 44.83 43.80 43.46

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 134.52 163.11 183.58 204.49 225.86

Total (A) 134.52 163.11 183.58 204.49 225.86

B) COST OF SALES

Raw Material Consumed 96.90 114.46 127.18 139.90 152.62

Elecricity Expenses 2.36 2.66 2.95 3.25 3.55

Repair & Maintenance 4.71 4.89 5.51 6.13 6.78
Labour & Wages 11.09 11.64 12.81 14.73 16.94
Depreciation 5.27 4.49 3.82 3.25 2.77

Cost of Production 120.33 138.14 152.27 167.26 182.65

Add: Opening Stock /WIP - 6.02 6.97 7.84 8.73

Less: Closing Stock /WIP 6.02 6.97 7.84 8.73 9.64

Cost of Sales (B) 114.31 137.19 151.40 166.38 181.74

C) GROSS PROFIT (A-B) 20.21 25.92 32.18 38.12 44.12

15.02% 15.89% 17.53% 18.64% 19.53%

D) Bank Interest (Term Loan ) 3.48 2.84 2.06 1.27 0.49
ii) Interest On Working Capital 1.10 1.10 1.10 1.10 1.10
E) Salary to Staff 7.56 9.07 10.89 13.06 15.68
F) Selling & Adm Expenses Exp. 2.69 3.26 3.67 4.09 4.52

TOTAL (D+E) 14.83 16.28 17.72 19.53 21.78

H) NET PROFIT 5.38 9.65 14.46 18.59 22.33

I) Taxation 0.54 1.45 2.17 2.79 3.35

J) PROFIT (After Tax) 4.84 8.20 12.29 15.80 18.98

PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND

Own Contribution 4.67 -

Reserve & Surplus 5.38 9.65 14.46 18.59 22.33
Depriciation & Exp. W/off 5.27 4.49 3.82 3.25 2.77
Increase In Cash Credit 10.00
Increase In Term Loan 32.06 - - - -

Increase in Creditors 2.26 0.41 0.30 0.30 0.30

TOTAL : 59.64 14.54 18.58 22.14 25.40

APPLICATION OF FUND

Increase in Fixed Assets 35.62 - - - -

Increase in Stock 9.25 1.54 1.29 1.31 1.33
Increase in Debtors 4.48 0.95 0.68 0.70 0.71
Repayment of Term Loan 3.56 7.12 7.12 7.12 7.12

Taxation 0.54 1.45 2.17 2.79 3.35

Drawings 3.00 3.40 6.00 10.00 12.50

TOTAL : 56.45 14.46 17.27 21.92 25.02

Opening Cash & Bank Balance - 3.19 3.27 4.58 4.79

Add : Surplus 3.19 0.08 1.31 0.22 0.38

Closing Cash & Bank Balance 3.19 3.27 4.58 4.79 5.18
COMPUTATION OF MAKING OF HONEY

Item to be Manufactured Honey

Manufacturing Capacity per day 500 Kg

No. of Working Hour 8

No of Working Days per month 25

No. of Working Day per annum 300

Total Production per Annum 1,50,000 Kg

Total Production per Annum 1,50,000 Kg

Year Capacity HONEY

Utilisation

I 40% 60,000.00

II 45% 67,500.00
III 50% 75,000.00
IV 55% 82,500.00
V 60% 90,000.00

COMPUTATION OF RAW MATERIAL

Quantity of Unit Rate Total CostPer Annum
Unit
Item Name Raw Material Per Kg (100%)
Raw Honey 1,57,500.00 Kg 150.00 2,36,25,000.00
Chemicals & Consumables Lumsum 1,00,000.00
Packing material Lumsum 5,00,000.00

Total 2,42,25,000.00

Total Raw material in Rs lacs 242.25

Raw Material Consumed Capacity Amount (Rs.)

Utilisation

I 40% 96.90
II 45% 114.46 5% Increase in Cost
III 50% 127.18 5% Increase in Cost
IV 55% 139.90 5% Increase in Cost
V 60% 152.62 5% Increase in Cost
COMPUTATION OF SALE
Particulars I II III IV V

Op Stock - 3,000.00 3,375.00 3,750.00 4,125.00

Production 60,000.00 67,500.00 75,000.00 82,500.00 90,000.00

60,000.00 70,500.00 78,375.00 86,250.00 94,125.00

Less : Closing Stock(15 Days) 3,000.00 3,375.00 3,750.00 4,125.00 4,500.00

Net Sale 57,000.00 67,125.00 74,625.00 82,125.00 89,625.00

Sale Price per Kg 236.00 243.00 246.00 249.00 252.00

Sale (in Lacs) 134.52 163.11 183.58 204.49 225.86

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(15 Days requirement) 6.02 6.97 7.84 8.73 9.64
Raw Material
(10 Days requirement) 3.23 3.82 4.24 4.66 5.09

Closing Stock 9.25 10.79 12.08 13.39 14.73

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 9.25
Less:
Sundry Creditors 2.26
Paid Stock 6.99 0.70 6.29

Sundry Debtors 4.48 0.45 4.04

Working Capital Requirement 10.32

Margin 1.15

MPBF 10.32
Working Capital Demand 10.00
BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary
Supervisor 20,000.00 1 20,000.00
Plant Operator 15,000.00 2 30,000.00
Unskilled Worker 12,000.00 2 24,000.00
Helper 8,000.00 1 8,000.00
Security Guard 6,000.00 1 6,000.00

88,000.00
Add: 5% Fringe Benefit 4,400.00

Total Labour Cost Per Month 92,400.00

Total Labour Cost for the year ( In Rs. Lakhs) 7 11.09

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Manager 24,000.00 1 24,000.00
Accountant cum store keeper 20,000.00 1 20,000.00

Sales 16,000.00 1 16,000.00

Total Salary Per Month 60,000.00

Add: 5% Fringe Benefit 3,000.00

Total Salary for the month 63,000.00

Total Salary for the year ( In Rs. Lakhs) 3 7.56

COMPUTATION OF DEPRECIATION

Plant &
Description Land Machinery Furniture TOTAL

Rate of Depreciation 15.00% 10.00%

Opening Balance Leased - - -
Addition - 34.12 1.50 35.62
- 34.12 1.50 35.62
- -
TOTAL 34.12 1.50 35.62
Less : Depreciation - 5.12 0.15 5.27

WDV at end of Ist year - 29.00 1.35 30.35

Additions During The Year - - - -
- 29.00 1.35 30.35
Less : Depreciation - 4.35 0.14 4.49

WDV at end of IInd Year - 24.65 1.22 25.87

Additions During The Year - - - -
- 24.65 1.22 25.87
Less : Depreciation - 3.70 0.12 3.82
WDV at end of IIIrd year - 20.95 1.09 22.05
Additions During The Year - - - -
- 20.95 1.09 22.05

Less : Depreciation - 3.14 0.11 3.25

WDV at end of IV year - 17.81 0.98 18.80

Additions During The Year - - - -
- 17.81 0.98 18.80
Less : Depreciation - 2.67 0.10 2.77
WDV at end of Vth year - 15.14 0.89 16.02
 REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 32.06 32.06 0.88 - 32.06
Iind Quarter 32.06 - 32.06 0.88 - 32.06
IIIrd Quarter 32.06 - 32.06 0.88 1.78 30.28
Ivth Quarter 30.28 - 30.28 0.83 1.78 28.50
3.48 3.56
II Opening Balance
Ist Quarter 28.50 - 28.50 0.78 1.78 26.72
Iind Quarter 26.72 - 26.72 0.73 1.78 24.94
IIIrd Quarter 24.94 - 24.94 0.69 1.78 23.15

Ivth Quarter 23.15 23.15 0.64 1.78 21.37

2.84 7.12
III Opening Balance
Ist Quarter 21.37 - 21.37 0.59 1.78 19.59

Iind Quarter 19.59 - 19.59 0.54 1.78 17.81

IIIrd Quarter 17.81 - 17.81 0.49 1.78 16.03
Ivth Quarter 16.03 16.03 0.44 1.78 14.25
2.06 7.12
IV Opening Balance
Ist Quarter 14.25 - 14.25 0.39 1.78 12.47
Iind Quarter 12.47 - 12.47 0.34 1.78 10.69

IIIrd Quarter 10.69 - 10.69 0.29 1.78 8.91

Ivth Quarter 8.91 8.91 0.24 1.78 7.12

1.27 7.12
V Opening Balance
Ist Quarter 7.12 - 7.12 0.20 1.78 5.34
Iind Quarter 5.34 - 5.34 0.15 1.78 3.56
IIIrd Quarter 3.56 - 3.56 0.10 1.78 1.78
Ivth Quarter 1.78 1.78 0.05 1.78 - 0.00
0.49 7.12

Door to Door Period 60 Months

Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R

PARTICULARS I II III IV V

CASH ACCRUALS 10.11 12.69 16.11 19.05 21.75

Interest on Term Loan 3.48 2.84 2.06 1.27 0.49

Total 13.59 15.53 18.17 20.33 22.24

REPAYMENT
Repayment of Term Loan 3.56 7.12 7.12 7.12 7.12
Interest on Term Loan 3.48 2.84 2.06 1.27 0.49

Total 7.04 9.97 9.18 8.40 7.61

DEBT SERVICE COVERAGE RATIO 1.93 1.56 1.98 2.42 2.92

AVERAGE D.S.C.R. 2.13

COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day Hours 8

Electric Load Required HP 40
Load Factor 0.7460
Electricity Charges per unit 7.50
Total Working Days 300
Electricity Charges 5,37,120.00

Add : Minimim Charges (@ 10%)

(B) DG set
No. of Working Days 300 days
No of Working Hours 0.3 Hour per day
Total no of Hour 90
Diesel Consumption per Hour 8
Total Consumption of Diesel 720
Cost of Diesel 65.00 Rs. /Ltr
Total cost of Diesel 0.47
Add : Lube Cost @15% 0.07
Total 0.54

Total cost of Power & Fuel at 100% 5.91

Year Capacity Amount

(in Lacs)

I 40% 2.36
II 45% 2.66
III 50% 2.95
IV 55% 3.25
V 60% 3.55
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
assume no financial liability to anyone using the content for any purpose. All the
materials and content contained in Project report is for educational purpose and
reflect the views of the industry which are drawn from various research material
sources from internet, experts, suppliers and various other sources. The actual
cost of the project or industry will have to be taken on case to case basis
considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is
intended for general guidance only and must not be considered a substitute for a
competent legal advice provided by a licensed industry professional. SAMADHAN
hereby disclaims any and all liability to any party for any direct, indirect, implied,
punitive, special, incidental or other consequential damages arising directly or
indirectly from any use of the Project Report Content, which is provided as is, and
without warranties.