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Case Study 4 Mr. Vivek khanna 13 Jul 2015

 

Mr. Vivek khanna is from Arunachal Pradesh and holds masters degree in computer science with 10 years of experience in IT industry. He always had a dream of starting his own business venture but was confused about which industry to invest.

He reached NPCS for the Business Plan to identify potential projects in South India, mainly in Andhra Pradesh and was willing to make an investment of Rs.15 crores.

SOLUTIONS PROVIDED BY NPCS:

According to the NPCS research, Andhra Pradesh is endowed with many natural resources like fertile soil, perennial rivers, rich mineral deposits, good human resources, and a climate congenial for agriculture. The state is a leading producer of paddy, potato and coconut; hence activated carbon from saw dust & coconut, rice bran oil, frozen finger chips and modified potato starch has great potential. Four southern states put together account for 92% of the total production of coconut in the country where Andhra Pradesh accounts for 8.93%. Therefore there is availability of raw material for activated carbon. Andhra Pradesh has the second-longest coastline of 972 km (604 mi) among the states of India Government of India has delicensed salt industry by deleting provisions relating to Salt in the Central Excise & Salt Act, 1944 vide Finance Bill of 1996-97. Therefore Iodised Salt is one of the lucrative projects to venture. Andhra Pradesh is recognised as a pharmaceutical hub for manufacturing bulk drugs in the country. Pharmaceutical is a profitable sector to invest.

The research was done by NPCS to identify potential projects in South India, mainly in Andhra Pradesh and the identified projects are chosen for the investment limit of Rs.15 crores. There are lot of opportunities in South India to establish a new industry especially in Andhra Pradesh. Andhra Pradesh is India's fifth largest state (in terms of area) spreading over an area of 2,76,754 sq. kms., dominated by the production of food grains, agriculture is the primary sector of the state's economy.

We at NPCS identified some of the lucrative projects along with the cost estimation of each which can be ventured. The list of projects suggested by NPCS is:    

 

1.      RICE BRAN OIL: Andhra Pradesh ranks fourth in terms of the nation's rice-growing area (3.98 million ha). In Andhra Pradesh, rice is grown in 22 districts. Out of this 14 districts are falling under high productivity group, that is, yield more than 2500 kg/ha.

Since the applications and demand of rice bran oil is immense therefore the potential of the product is excellent. It is one of the imperative fields to endeavor.

 

2.      IODISED SALT FROM SEA WATER: The average annual production of salt in Andhra Pradesh is 40 tonnes per acre. Government of India has delicensed salt industry by deleting provisions relating to Salt in the Central Excise & Salt Act, 1944 vide Finance Bill of 1996-97.  In line with Government of India's Policy of liberalization and simplification of Procedures, the Salt Cess Rules, 1964, have been amended vide Notification No. GSR 639(E) dated 04.09.2001. Salt commissioner's organisation plays a facilitating role in overall growth and development of salt industry in the country.

The demand of the product in the market is immense and therefore its market position is splendid. Hence it is an excellent field to venture.

 

3.      COCONUT PROCESSING UNIT (COMPLEX): India is the third largest coconut producing country in the world. It contributes 15% of the area and 25% of the production of coconut in the world. Coir and coir products, milling copra and coconut oil are the major commercial products produced in the country. In India as much as 48% of the coconut production is used for edible and religious purposes, 10% as tender coconut, roughly 30% as milling copra for oil extraction, 8% for the manufacture of edible copra and the rest is processed into products like desiccated coconut and coconut cream. The production of coir and coir products constitutes 55% of the world output. India's export trade accounts for 30% of the total export trade in the world.

 

4.      I V FLUID (FFS TECHNOLOGY): World market growth is driven by population increases and constant up-scaling and sophistication of health care delivery. As part of this up-scaling, IV infusion therapy is becoming increasingly important in overall health care treatment regimens as new developments in antibiotics and other medications used in areas such as chemotherapy, burn centers, and renal/peritoneal dialysis centers favor intravenous use and application. The economic advantages of producing IV solutions locally emerging and medically in developing nations can result in an extremely short return on initial investment. Demand for IV solutions is so great that should production exceed local demand. Opportunities for national and export sales are unlimited in the foreseeable future.

 

 

5.      FROZEN FINGER CHIPS: Frozen Food in India industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2006-10, and forecast to 2015). The profile also contains descriptions of the leading players including key financial metrics and analysis of competitive pressures within the market. The food processing industry has been slated for accelerated growth. It is projected to be a futuristic industry and it is anticipated that, over the years, it will emerge as a leading player in the global markets. As a result, the industry is seen to be witnessing feverish activity. Therefore the scope for this product is very bright. An entrepreneur venturing into this project will find it very lucrative.

 

6.      MODIFIED POTATO STARCH: Starch, one of the most present biomaterials has witnessed significant developments over the years. The world market for starch, by consumption is expected to register healthy growth to reach 80 million metric ton by 2015. The Global starch market is likely to get respite from deceleration in its market growth, with growth poised to receive a new lease of life in the next few years, thanks to the growing consumption of liquid starches and modified starches. The modified starch market is projected to be the fastest growing segment over the period 2007-2015. Asia-Pacific represents the fastest growing market over the period 2007-2015. Growing employment opportunities, and subsequent increase in per-capita income over the last few years, particularly in China and India, have been driving the growing demand for starch in the region.

 

 

 


ABOUT NPCS

 

NIIR PROJECT CONSULTANCY SERVICES (NPCS) is a reliable name in the industrial world for offering integrated technical consultancy services. NPCS is manned by engineers, planners, specialists, financial experts, economic analysts and design specialists with extensive experience in the related industries.

Our various services are: Detailed Project Report,  Business Plan for Manufacturing Plant, Start-up Ideas, Business Ideas for Entrepreneurs, Start up Business Opportunities, entrepreneurship projects, Successful Business Plan, Industry Trends, Market Research, Manufacturing Process, Machinery, Raw Materials, project report, Cost and Revenue, Pre-feasibility study for Profitable Manufacturing Business, Project Identification, Project Feasibility and Market Study, Identification of Profitable Industrial Project Opportunities, Business Opportunities, Investment Opportunities for Most Profitable Business in India, Manufacturing Business Ideas, Preparation of Project Profile, Pre-Investment and Pre-Feasibility Study, Market Research Study, Preparation of Techno-Economic Feasibility Report, Identification and Section of Plant, Process, Equipment, General Guidance, Startup Help, Technical and Commercial Counseling for setting up new industrial project and Most Profitable Small Scale Business.

NPCS also publishes varies process technology, technical, reference, self employment and startup books, directory, business and industry database, bankable detailed project report, market research report on various industries, small scale industry and profit making business. Besides being used by manufacturers, industrialists and entrepreneurs, our publications are also used by professionals including project engineers, information services bureau, consultants and project consultancy firms as one of the input in their research.

Our Detailed Project report aims at providing all the critical data required by any entrepreneur vying to venture into Project. While expanding a current business or while venturing into new business, entrepreneurs are often faced with the dilemma of zeroing in on a suitable product/line.

 


And before diversifying/venturing into any product, wish to study the following aspects of the identified product:


• Good Present/Future Demand
• Export-Import Market Potential
• Raw Material & Manpower Availability
• Project Costs and Payback Period


We at NPCS, through our reliable expertise in the project consultancy and market research field, Provides exhaustive information about the project, which satisfies all the above mentioned requirements and has high growth potential in the markets. And through our report we aim to help you make sound and informed business decision.

 

The report contains all the data which will help an entrepreneur find answers to questions like:

• Why I should invest in this project?
• What will drive the growth of the product?
• What are the costs involved?
• What will be the market potential?


The report first focuses on enhancing the basic knowledge of the entrepreneur about the main product, by elucidating details like product definition, its uses and applications, industry segmentation as well as an overall overview of the industry sector in India. The report then helps an entrepreneur identify the target customer group of its product. It further helps in making sound investment decision by listing and then elaborating on factors that will contribute to the growth of product consumption in India and also talks about the foreign trade of the product along with the list of top importing and top exporting countries. Report includes graphical representation and forecasts of key data discussed in the above mentioned segment. It further explicates the growth potential of the product.

The report includes other market data like key players in the Industry segment along with their contact information and recent developments. It includes crucial information like raw material requirements, list of machinery and manufacturing process for the plant. Core project financials like plant capacity, costs involved in setting up of project, working capital requirements, projected revenue and profit are further listed in the report.


Reasons for buying the report:

• This report helps you to identify a profitable project for investing or diversifying into by throwing light to crucial areas like industry size, demand of the product and reasons for investing in the product.

• This report provides vital information on the product like its definition, characteristics and segmentation.

• This report helps you market and place the product correctly by identifying the target customer group of the product.

• This report helps you understand the viability of the project by disclosing details like raw materials required, manufacturing process, project costs and snapshot of other project financials.

• The report provides forecasts of key parameters which helps to anticipate the industry performance and make sound business decision.

 

Our Approach:


• Our research reports broadly cover Indian markets, present analysis, outlook and forecast.

• The market forecasts are developed on the basis of secondary research and are cross-validated through interactions with the industry players. 

• We use reliable sources of information and databases.  And information from such sources is processed by us and included in the report.

 

Our Market Survey cum Detailed Techno Economic Feasibility Report Contains following information:

 

 

Ø  Introduction

·         Project Introduction

·         Project Objective and Strategy

·         Concise History of the Product

·         Properties

·         BIS (Bureau of Indian Standards) Provision & Specification

·         Uses & Applications

 

Ø  Market Study and Assessment

·         Current Indian Market Scenario

·         Present Market Demand and Supply

·         Estimated Future Market Demand and Forecast

·         Statistics of Import & Export

·         Names & Addresses of Existing Units (Present Players)

·         Market Opportunity

 

Ø  Raw Material

·         List of Raw Materials

·         Properties of Raw Materials

·         Prescribed Quality of Raw Materials

·         List of Suppliers and Manufacturers

 

Ø  Personnel (Manpower) Requirements

·         Requirement of Staff & Labor (Skilled and Unskilled) Managerial, Technical, Office Staff and Marketing Personnel

 

Ø  Plant and Machinery

·         List of Plant & Machinery

·         Miscellaneous Items

·         Appliances & Equipments

·         Laboratory Equipments & Accessories

·         Electrification

·         Electric Load & Water

·         Maintenance Cost

·         Sources of Plant & Machinery (Suppliers and Manufacturers)

 

Ø  Manufacturing Process and Formulations

·         Detailed Process of Manufacture with Formulation

·         Packaging Required

·         Process Flow Sheet Diagram

 

Ø  Infrastructure and Utilities

·         Project Location

·         Requirement of Land Area

·         Rates of the Land

·         Built Up Area

·         Construction Schedule

·         Plant Layout and Requirement of Utilities

 

Project at a Glance

Along with financial details as under:

 

  •     Assumptions for Profitability workings

  •    Plant Economics

  •    Production Schedule

  •    Land & Building

            Factory Land & Building

            Site Development Expenses

  •    Plant & Machinery

             Indigenous Machineries

            Other Machineries (Miscellaneous, Laboratory etc.)

  •    Other Fixed Assets

            Furniture & Fixtures

            Pre-operative and Preliminary Expenses

            Technical Knowhow

            Provision of Contingencies

  •   Working Capital Requirement Per Month

             Raw Material

            Packing Material

            Lab & ETP Chemical Cost

           Consumable Store

  •   Overheads Required Per Month And Per Annum

         Utilities & Overheads (Power, Water and Fuel Expenses etc.)

             Royalty and Other Charges

            Selling and Distribution Expenses

  •    Salary and Wages

  •    Turnover Per Annum

  •   Share Capital

            Equity Capital

            Preference Share Capital

 

  •    Annexure 1:: Cost of Project and Means of Finance

  •    Annexure 2::  Profitability and Net Cash Accruals

                Revenue/Income/Realisation

                Expenses/Cost of Products/Services/Items

                Gross Profit

                Financial Charges     

                Total Cost of Sales

                Net Profit After Taxes

                Net Cash Accruals

  •   Annexure 3 :: Assessment of Working Capital requirements

                Current Assets

                Gross Working. Capital

                Current Liabilities

                Net Working Capital

                Working Note for Calculation of Work-in-process

  •    Annexure 4 :: Sources and Disposition of Funds

  •    Annexure 5 :: Projected Balance Sheets

                ROI (Average of Fixed Assets)

                RONW (Average of Share Capital)

                ROI (Average of Total Assets)

  •    Annexure 6 :: Profitability ratios

                D.S.C.R

                Earnings Per Share (EPS)

               

             Debt Equity Ratio

        Annexure 7   :: Break-Even Analysis

                Variable Cost & Expenses

                Semi-Var./Semi-Fixed Exp.

                Profit Volume Ratio (PVR)

                Fixed Expenses / Cost 

                B.E.P

  •   Annexure 8 to 11:: Sensitivity Analysis-Price/Volume

            Resultant N.P.B.T

            Resultant D.S.C.R

   Resultant PV Ratio

   Resultant DER

  Resultant ROI

          Resultant BEP

  •    Annexure 12 :: Shareholding Pattern and Stake Status

        Equity Capital

        Preference Share Capital

  •   Annexure 13 :: Quantitative Details-Output/Sales/Stocks

        Determined Capacity P.A of Products/Services

        Achievable Efficiency/Yield % of Products/Services/Items 

        Net Usable Load/Capacity of Products/Services/Items   

       Expected Sales/ Revenue/ Income of Products/ Services/ Items   

  •    Annexure 14 :: Product wise domestic Sales Realisation

  •    Annexure 15 :: Total Raw Material Cost

  •    Annexure 16 :: Raw Material Cost per unit

  •    Annexure 17 :: Total Lab & ETP Chemical Cost

  •    Annexure 18  :: Consumables, Store etc.,

  •    Annexure 19  :: Packing Material Cost

  •    Annexure 20  :: Packing Material Cost Per Unit

  •    Annexure 21 :: Employees Expenses

  •    Annexure 22 :: Fuel Expenses

  •    Annexure 23 :: Power/Electricity Expenses

  •    Annexure 24 :: Royalty & Other Charges

  •    Annexure 25 :: Repairs & Maintenance Exp.

  •    Annexure 26 :: Other Mfg. Expenses

  •    Annexure 27 :: Administration Expenses

  •    Annexure 28 :: Selling Expenses

  •    Annexure 29 :: Depreciation Charges – as per Books (Total)

  •   Annexure 30   :: Depreciation Charges – as per Books (P & M)

  •   Annexure 31   :: Depreciation Charges - As per IT Act WDV (Total)

  •   Annexure 32   :: Depreciation Charges - As per IT Act WDV (P & M)

  •   Annexure 33   :: Interest and Repayment - Term Loans

  •   Annexure 34   :: Tax on Profits

  •   Annexure 35   ::Projected Pay-Back Period And IRR