BUSINESS PLAN:
Commercialization of value added products of Mahua Plants
STATE- Chattisgarh
DISTRICT-Bijapur
Demography
Name of the General Info Unit Details of the General Info Unit
1. District Formation Date 01-05-2007
2. Location – Latitude 18.8608° N
3. Location – Longitude 80.7214° E
4. Languages 6 (Gondi,Halbi, Telgu,Dorli,Hindi,Marathi)
5. Total Area 6562.48 Sq. Km
6. Revenue village/ Total No. of Villages 584/699 Villages
7. Total Population 2,55,230
8. Male 1,28,663
9. Female 1,26,567
10. Sex Ratio 984:1
11. Population Density 39/Sq. Km
12. Decadal Population Growth Rate 8.76 %
13. Literacy Rate 40.90 %
14. Farmers 66504
15. Total Workers 1,34,525
16. Non Working 1,20,705
Demand & supply of Mahua plant
1. 75% of the tribal households in our country are engaged in Mahua flower collection
that is a population of around 7.5 millions is into this livelihood activity
2. Mahua flower is one of the top five minor forest produces in the country
3. Mahua is in demand throughout the year locally in Chhattisgarh. It has high demand in
Ranchi as well as the neighborhood states of Madhya Pradesh and Chhattisgarh
4. The estimated collection of Mahua is pegged at 85000 turns out of a potential of
490000 turns
5. India has about 16000 recorded plant species of Mahua of these 3000 are minor forest
produce. Mahua is found in all the forest types present in Chhattisgarh especially in the
southern and northern parts of the state Chhattisgarh
6. 35 percentage of the collection come from self planted own trees and rest from forest.
7. Mahua flowering happens for around 4 to 6 weeks between March to May. Rains
during this period affect the crop
8. The effective collection days per household are 20 days in a season. On an average,
one family member manages to collect 10 to 15 kgs of Mahua
9. In a day, collection from one Mahua tree varies from 1.5 to 3 quintals depending upon
the age and the birth of the tree
10. An average size tree yields about 5200 kg of flower in a season that last around a
month
11. A tree has an annual average yield of 62.5 kg of flower and 59 kg of gully as per one
study
List of utilities of the product and their usage in industries
1. Mahua (Madhuca longifolia) belongs to family sapotaceae and finds origin in
different regions of India, Sri Lanka, Myanmar and Nepal
2. It is a multipurpose tree which fulfills three fundamental needs of tribals i.e. Food,
Fodder and Fuel. Flowers of plant are edible and have high nutritive value majorly
high amount of sugars and subsequently having good amount of vitamins, proteins,
minerals and fats. Because of the higher amount of sugar, the flowers are utilized as a
sweetener in preparation of numerous traditional dishes like halwa, kheer, meethi
puri and barfi in mahua production belt of India
3. India is considered as a treasure of various medicinal and aromatic plant species
which are being utilized since ancient times
4. According to WHO (2003) approximately 65% of the world’s population integrate
the medicinal plant for treatment. Mahua is one of the naturally occurring plants
which possess numerous health benefits. Tribal people use mahua flowers for curing
of skin diseases, headache, pitta and bronchitis. Flower juice is supplemented to
lactating women for augmentation of breast milk
5. 90% of Mahua collection goes into the making of country alcohol and only 10% is
used for the medicinal and food products
Usage in Pharma industry
Product Use
Flower Juice High protein tonic
Roasted Flowers Cure cough and bronchitis
Flowers fried in ghee Cure piles acting as a cooling agent
Raw flowers Increases lactation
Usage in Food industry
Product Use
Juice Concentrates Sweetener in bakery and confectionary
Mahua Jam and Jelly Dessert
Citric Acid Flavouring agent
Antioxidant rich beverage Health Benefits
Migration Information
According to 2001 census, the population of Chhattisgarh was 17,614,928 out of
which out migration was 444,679. According to a report by Economic Times,
provisions have made for 3 lakh migrant workers to send them back to their states
from Maharashtra. Chhattisgarh government has estimated the inflow of migrant
workers to be of 1.7 lakhs. The majority of workers are blue collar workers.
SWOT analysis
Pharma industry
Strengths: Weakness:
1.People are becoming health 1.Limited supply of flowers
conscious
2.Less technological
2.Pharma industry is seeing a advancements
boom
3.Ayurvedic medicines are
preferred for zero side effects
Opportunities: Threats:
1.Market Expansion beyond the 1.Competitors in the market
district or state
2.Difficulty to acquire raw
2.Make a place in pharma material as majority goes for
industry in this pandemic times country alcohol production
Food industry
Strengths: Weakness:
1.The prices are very cheap 1.Limited supply of flowers
2.Multiple products with almost 2.Less technological
same raw material advancements
3.Can be made very easily
Opportunities: Threats:
1.Market Expansion beyond the 1.Competitors in the market
district or state 2.Difficulty to acquire raw
2.Can be preferred over material as majority goes for
chemically made products country alcohol production
PESTEL analysis
Pharma industry
•Growing political focus and pressure on healthcare
•Insurance sector boom in healthcare
Political
•Increase pressure on pricing
Factors
•Global economic crisis
•Reduction in individual disposable income
Economic
•Increase in number of buyers putting pressure on buyers
Factors
•Patient awareness is too high leading to high expectations
•More focus on customer service
Social •More price transparency
Factors
•Rapid develpoment in technologies
•Customized treatments
Technological
Factors •New digital opportunities
•Identify eco-opportunities in market
•Look after carbon footprint reduction
Environment •Environment protection against degradation
Factors
•Quality check
•Inconsistent markets
Legal Factors •Increased litigation
Food industry
• Wide regulation pertaining to cleanliness at production place
Political • Maintaining specific standards for storage and transportation
Factors
•Global economic crisis
Economic •Reduction in individual disposal income
Factors
•Health consciousness is increased
Social •Dietary restrictions
Factors
•Rapid develpoment in technologies
Technologic •New digital opportunities
al Factors
•Identify eco-opportunities in market
•Look after carbon footprint reduction
Environment
Factors •Environment protection against degradation
•Quality check
•Increased litigation
Legal
Factors •Meet safety standards
Product details
As Mahua plant has so many different uses, we will concentrate on our final
products to be:
1. Sweetener - Mahua can be used as a natural sweetening agent as it has a high
reducing sugar and nutrient content. Extraction of juice from the fresh flower and
its immediate processing yields a liquid concentrate which can be stored and used
as a sweetener.
2. Mahua Jam and Jelly - A sugar syrup from dry and fresh Mahua flowers acts as
a sweetening agent. This sweetener can be used further for making good quality
jams, candies, jelly, sauce, confectionery goods and also as a substitute for brown
sugar.
3. High protein tonic - The tonic is made by mixing powder of flowers with ghee
and honey. It is used to treat acute and chronic tonsillitis, pharyngitis, bronchitis,
rakthpitta and piles.
Shelf life will be of 6 months.
USP
Natural and healthy.
Vocal for local.
Cheap price but priceless benefits.
Supply chain
Forest Department, NGOs and Credit Institutions
Conservation,credit,training and other support
Tribes
Collection and drying
Mandi
Sell to end users of Mahua
Buyers(Us)
Buy Mahua and produce our end products
Retailer
Buy from us and sell it in the retail market
Strategy and growth plan
1. The Mahua plant is of great use. It has great potential in the pharma and the food
industry.
2. As we know 90% of Mahua plant usage is to make country alcohol and only 10%
is used to make the rest of the products that too only locally.
3. The effect of liquid consumption using Mahua in tribal society as well as locals is
often debated and Mahua is associated with something bad.
4. This will help us to create a good potential for establishing the market for non
alcoholic products of Mahua.
5. One of the major problems is the limitation of Mahua plants.
6. We can play a vital role in enhancing its production by advising NGOs and Forest
Department to use NREGA funds in order to plant more trees on private and
public lands.
7. Also, another issue is that of its storage. Most of the plants goes into waste because
they cannot be stored and preserved properly.
8. We can ask the NGOs and government organisations to provide proper storage
facilities to the tribes so that the plant do not get wasted.
9. We have to look after expanding the usage of Mahua for our products than just
country alcohol.
10.We have a great chance to expand the market commercially beyond the local
regions.
11.We have to invest in buying the plants for producing our value added products and
look at increasing the percentage of mahua consumption in making sweeteners,
jams, jellies and tonics.
12.As our government has asked everyone to use local products, we will have great
amount of buying hands.
13.Due to increase in number of health conscious people especially after this
pandemic, people will prefer natural products more over the chemically-driven
ones.
14.No one has attempted to commercialize the value added products of Mahua plant
before and we will be the first ones to explore the market potential of the products.
15.As the raw materials needed are very minimal and the benefits out of it is so many,
business will be appreciated at a large scale.
Marketing Plan
1. The customers
The customers for our products will be from a broader group.
The age group will be from 5-75 years of age.
The jams and jellies will be most attracted by smaller age group.
The sweetener will be used by women of 25-55 years of age.
The high protein tonic can be used by 5-75 years of age people after consulting
about the dosage from their doctor.
Target customers based on their lifestyle will mostly be from lower or middle class
families as our product don’t have a big brand associated with it.
According to location, the customers will mostly be from surrounding districts in
the beginning and then we can also target the surrounding states.
2. The competitors
The competitors will be from the well established brands in India.
For example:
Jams: Kissan, Tops
Jellies: Alpenlieble ,Tops
Sweeteners: Zevic, Splenda
High Protein Tonic: Nestle, Vitaprot
3. The speciality
The most special thing is it is natural. It is local and there is an increase hype in the
market for using local products. It is value for money.
4. Marketing channels
Social Media : Facebook Page, Instagram Account
Social media will help us build relationships with customers and widen your reach
with zero investments for marketing.
Direct mail and leafleting : To get a reach in the locality and to spread the word
using traditional marketing techniques.
Exhibitions and events : Will help to collect data of potential contacts and build
relationships with potential customers.
Technology
Raw materials:
Dried Mahua Flower (Madhuca Indica)
Fruit Pulp
Sugar
Pectin
Citric Acid
Sodium Benzoid
Potassium Metabisulphite
Fixed Assets:
Pulper
Juice Extractor
Mixer
Grinder
Slicer
Bottle Packaging Machine
Mode of delivery:
Tempo Service
Organization Structure
Owner
Operational Manager Marketing Manager Financial Manager
Production Inventory Advertisiting Accounting
Sales Manager
Manager Manager Manager Manager
Operational Manager:
He/She will look after all the operations of the business unit. It involves all the
proper functioning of machines and processing units. He/She will have production
manager working under him/her who will look after the proper work flow of
processing mechanism till final production is achieved. The operational manager
also have inventory manager under him/her, responsible for obtaining raw
materials and supplying final products to the sales team.
Marketing Manager:
He/She will look after the branding and maximizing sales of the product. The
advertising manager under him/her will look after increasing the reach of the
products through various advertising channels. The sales manager will look after
the product outflow and how to carry out proper sales by connecting to different
dealers and retailers.
Financial Manager:
He/She will look after the various sources of income for satisfying the operating
cost of business, look for various government monetary schemes and along with
accounting manager keep the financial records of the business.
Operational Plan
Purchase of raw materials (Inventory manager)
Cash outflow (Accounting Manager)
Receipt/Storage(Inventory Manager)
Preparation(Production Manager)
Food Testing(Operational Manager)
Waste Management(Operational Manager)
Packaging(Production Manager)
Dispatch(Sales Manager)
Distribution(Sales Manager)
Cash Inflow(Accounting Manager)
Financial Plan
Cost of investment:
Total – Rs.( 5,97,970 + 1,02,030 (miscellanous)) = Rs. 7,00,000
Fixed cost :
Particulars Cost(Monthly)*
1.Location/Area :
Warehouse Rs. 8,000 (on lease)
2.Machinery : *one time investment for next 5 years
Pulper Rs. 18,000
Juice Extractor Rs. 12,500
Mixer Rs. 25,000
Grinder Rs. 20,000
Slicer Rs. 20,000
Bottle Packaging Machine Rs. 1,50,000
3.Licensing : *one time investment for next 2 years
FSSAI Rs. 15,000
TIN number Rs. 10,000
Municipal health license Rs. 5,000
Fire license Rs. 2,000
5. 4.Salaries :
6. Managers(8) Rs. 96,000(Rs.12,000 each)
7. Chef(4) Rs. 40,000(Rs. 10,000 each)
Total Rs. 4,21,500
Variable cost:
Particulars: Quantity: Cost(monthly):
1.Labor :
Helpers 4 Rs. 20,000(Rs. 5,000 each)
Service boys 2 Rs. 10,000(Rs. 5,000 each)
2.Raw materials :
Mahua Flowers 375 kg Rs. 37,500 (Rs. 100 each)
Mahua Fruits 450 kg Rs. 45,000 (Rs. 100 each)
Sugar 450 kg Rs. 13,500 (Rs. 30 each)
Pectin 1 kg Rs. 1,500
Citric Acid 2 kg Rs. 120
Sodium Benzoid 1 kg Rs. 500
Potassium Metabisulphite 1 kg Rs. 100
Plastic containers 3750 Rs. 11,250 (Rs. 3 each)
Stickers 3750 Rs. 7,500 (Rs. 2 each)
3.Electricity(Assuming a 2000 kWh Rs. 24,000 (Rs. 12 each)
consumption of 2000 kWh
per month)
4.Marketing :
Leafleting 5000 Rs. 5000 (Rs. 1 each)
Exhibition/Events 1 stall Rs. 500
5.Miscellaneous - Rs. 1,02,030
Total - Rs. 2,78,500
Cost of goods sold:
Direct Labor + Raw Materials= Rs. 1,46,970
Returns:
Product Name Quantity(per day) Selling Price
Mahua Jam 25 Rs. 50
Mahua Jelly 25 Rs. 120
Mahua Protein Tonic 50 Rs. 180
Mahua Sweetener 25 Rs. 150
Total revenue per month - Rs. 5,10,000
Profit:
Particulars Amount
Sales revenue 510000
(-)COGS 146970
Gross Profit 363030
(-)Operating Expenses
1.Salary Expense 136000
3.Rent Expense 8000
4.Depreciation Expense 3068.75
5.Amortization Expense 1,333.33
6.Electricity 24,000
7.Marketing 5,500
Operating Profit 1,85,128
(-)Tax(30%) 55,538.4
(-)Interest(15% for 5 years) 12,371
Net Profit 1,17,219
Working capital:
Current Assets = Finished goods inventory = Rs. 5,10,000
Current Liabilities = Taxes + Interest Payable = Rs. 55,538.4 + Rs. 12,371
= Rs. 67,909
Working Capital = CA-CL
= 5,10,000-67,909 = Rs. 4,42,091
The company has more current assets than current liabilities, it has positive
working capital. Having enough working capital means that the company can fully
cover its short-term liabilities. This is a sign of a company’s financial strength.
Sources of investment:
Goverment grant - Dairy Entrepreneurship Development Scheme - In all cases,
25% of the outlay as back-ended capital subsidy subject to the applicable ceiling is
provided to the eligible stakeholders
25% of Rs. 7,00,000 = 1,75,000
Micro credit programme – Undertaken by SIDBI – Can provide upto 5000/-
MUDRA loans – The Mudra loan is given in three categories viz. Shishu (upto Rs.
50,000), Kishor (Rs. 50,001 to 5 lakh) and Tarun (above Rs. 5 lakh and upto 10
lakh).
Rs. 5,20,000 loan under Tarun
More options:
Angel investors
Impact investors in India - Lok Capital, Aavishkaar Venture Management,
Menterra Venture Advisors, Ankur Capital
Risk Mitigation Plan
1. Availability of Mahua plants:
Unsustainable harvesting and environmentally degrading practices while
collection of Mahua. Absence of quality standards and non-adherence to
quality .
Training should be given to the tribes for sustainable harvesting and of proper
practices to be followed for Mahua collection.
Lack of storage facilities lead to unavailability of Mahua plant throughout the
year.
More storage facilities should be provided locally by government or private players
to store Mahua and prevent it from wastage.
Plantation of Mahua trees are not encouraged leading to depletion of available
resources.
More plantation for Mahua trees should be encouraged by forest departments.
2.Perishibality of finished goods:
The lifetime for food products is 6 months. So, quick sales are required.
Quick sales of finished goods should be encouraged. Proper inventory management
should be undertaken. Produce neither less nor more. Gain optimization using sales
history and future demands.
Executive Summary
The business plan is for Bijapur district from Chhattisgarh district.
Mahua flower is one of the top five minor forest produces in the country. It is a
multipurpose tree which fulfills three fundamental needs of tribals i.e. Food, Fodder and
Fuel.
Flowers of plant are edible and have high nutritive value majorly high amount of sugars
and subsequently having good amount of vitamins, proteins, minerals and fats.
Chhattisgarh government has estimated the inflow of migrant workers to be of 1.7
lakhs.
We are targeting the pharma and food industry. The food industry is a good
opportunity to start business because of the culture and taste embedded in people
of India. It is not that affected in this pandemic situation as there is demand for
food always. People are becoming health conscious and prefer food products with
natural ingredients. Pharma industry is seeing a boom during this pandemic times.
Ayurvedic and natural medicines are preferred for zero side effects.
Our final products are:
1. Sweetener
2. Mahua Jam and Jelly
3. High protein tonic
Shelf life will be of 6 months.
USP of our products will be:
Natural and healthy
Vocal for local
Cheap price but priceless benefits
Forest department and NGOs helps the tribes to collect and process the Mahua and
sell it to end users in Mandi. We can buy Mahua from Mandi and produce our
products and then sell it to the retailer.
Mahua plant has great potential in the Pharma and Food Industry. Only 10% is
used to make value added products of Mahua, so we can work and commercialize
it on a larger scale.
The customers are from a broader group. The jams and jellies are attracted by
smaller age group. The sweetener will be used by women of almost all age group
and the high protein tonic can be used by people from 5 to 75 years of age after
consulting their doctor. Some of our competitors are Kissan, Alpenliebe, Nestle etc
We can use marketing channels like social media leafleting and can exhibit our
product at event
We will purchase the raw materials like Mahua flower, Mahua fruits, from the
mandi itself. We can then store the raw materials and start its preparation. After
finalising the products we will test it. We will pack our products and then dispatch
it and directly distribute it to the retailers.
The total cost of investment is Rs. 7,00,000. The net profit for one month is Rs.
1,17,219. The business makes positive working capital which is a sign of a good
financial strength. The sources of investment will be government grants up to Rs.
1,75,000, microcredit program which will provide Rs. 5,000 and Mudra loans upto
Rs. 5,20,000.
Some of the risks are the less availability of Mahua plants, which can be eliminated
by increasing the plantation of Mahua trees, increasing the storage facilities and
training the tribes for sustainable harvesting.
Another risk is the perishability of finished goods. The life span for food products
is 6 months so we have to manage the inventory in a very optimised way so that we
can sell quickly and gain benefits out of it.
References
District Information:
https://bijapur.gov.in/en/handicraft/
Population Information:
https://censusindia.gov.in/Data_Products/Data_Highlights/Data_Highlights_link/d
ata_highlights_D1D2D3.pdf
Mahua Plant Information:
https://www.longdom.org/open-access/phytochemistry-ethnomedical-uses-and-
future-prospects-of-mahua-madhuca-longifolia-as-a-food-a-review-2155-9600-
1000573.pdf
https://www.yumpu.com/en/document/read/36635221/study-on-mahua-sub-sector-
cgsirdgovin
Warehouse Information:
https://www.realestateindia.com/bijapur-property/warehouse-godown-for-rent.htm
Machinery Information:
https://dir.indiamart.com/impcat/bottle-packaging-machines.html
Government loans Information:
https://iidt.edu.in/Articles/49Startup-Govt-Schemes.pdf
