DETAILED PROJECT REPORT ON

EXTRUDED FOOD PRODUCTS

PREPARED BY

Ms. B. KAYALVIZHI
ASSISTANT DIRECTOR
BRANCH MSME DEVELOPMENT INSTITUTE,
MINISTRY OF MSME, GOVERNEMENT OF INDIA,
386, PATEL ROAD, RAMNAGAR
COIMBATORE-641 009
TAMILNADU

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 INDEX

No Description Page No

1 INTRODUCTION
1.1 Introduction 6
1.2 Overview of Products 7
2 NOMENCLATURE OF THE PRODUCT 8
3 COMMERCIAL DETAILS
3.1 HSN code of the product 11
3.2 NIC code of the product 12
3.3 Clusters already existing on the product 12
3.4 Possibility to create establish cluster on the product 12
3.5 Number of Industries Registered as MSME 13
3.6 Number of industries available in large scale Industries 14
3.7 Import Data 14
3.8 Export Data 16
3.9 Scope and Demand in Domestic market 19
3.10 Demand of the Export Market 23
4 TECHNICAL DETAILS
4.1 Sector in which the product is falling 25
4.2 End users of the products/sectors 25
4.3 Governing Indian specification 26
4.3.1 Importance of FSSAI registration and Licensing 26
4.3.2 Requirement for Extruded Foods Manufacturing 27
4.3.3 Food Safety Regulations and Standards of Noodles 29
4.4 Governing international specification 30
4.4.1 Codex Alimentarius 30
4.4.2 ISO 22000 30
4.4.3 HACCP 30
4.4.4 Halal 31
4.5 Qualitative parameters of the Product 31
4.6 Test Facilities Required for the Product 31
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5 PROJECT REPORT
5.1 Project Report – Noodle Manufacturing Unit 32
5.1.1 Introduction 32
5.1.2 Market Potential 32
5.1.3 Product Description 33
5.1.3.1 Product Uses 33
5.1.3.2 Raw Material 34
5.1.4 Implementation Schedule 34
5.1.5 Presumptions 34
5.1.6 License & Approvals 35
5.1.7 Manufacturing Process 35
5.1.8 Project Components 37
5.1.8.1 Land 37
5.1.8.2 Machinery & Equipments 37
5.1.8.3 Miscellaneous Assets 40
5.1.8.4 Power Requirement 40
5.1.8.5 Manpower requirement 41
5.1.9 Financials 41
5.1.9.1 Cost of Project 41
5.1.9.2 Means of Finance 42
5.1.9.3 Projected Balance Sheet 42
5.1.9.4 Projected cash Flow 43
5.1.9.5 Projected Profitability 44
5.1.9.6 Production and Yield 46
5.1.9.7 Sales Revenue 47
5.1.9.8 Working Capital Assessment 48
5.1.9.9 Power, Salary & Wages Calculation 49
5.1.9.10 Depreciation 50
5.1.9.11 Repayment Schedule 51
5.1.9.12 Financial Indicators 54
5.1.9.13 DSCR 55
5.1.9.14 Break Even Point Analysis 56

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5.2 Project Report – Pasta Manufacturing Unit 57
5.2.1 Product Introduction 57
5.2.2 Market Potential 58
5.2.3 Raw Material 59
5.2.4 Process Flow Chart 62
5.2.5 Basis ans Presumptions 62
5.2.6 Capacity Utilization, Production & Output 63
5.2.7 Premises / Infrastructure 64
5.2.8 Machinery & Equipments 65
5.2.9 Miscellaneous Fixed Assets 66
5.2.10 Total Cost of Project 67
5.2.11 Means of Finance 67
5.2.12 Term Loan 67
5.2.13 Term Loan repayment & Interest Schedule 68
5.2.14 Working Capital Calculations 71
5.2.15 Salary & Wages 71
5.2.16 Power Requirement 72
5.2.17 Depreciation Calculation 73
5.2.18 Repair & Maintenance 73
5.2.19 Projections of Profitability Analysis 74
5.2.20 Break Even Point Analysis 75
5.2.21 Projected Balance Sheet 76
5.2.22 Cash Flow Statement 77
5.2.23 Debt Service Coverage Ratio (DSCR) 78
5.3 Details of Test Facilities Available in India 79
5.4 Details of Raw Materials Suppliers 79
5.5 Details of Machinery Suppliers 79

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6 SCHEMES AND CONSULTANCY SERVICES
66.1 Existing schemes available and their details 80
66.2 Other Schemes 84
6.3 Schemes From Ministry of Food Processing 85
6.4 Details of Agencies who can provide Guidance 86
7 REFERENCES 89
8 Annexure – Machinery Quote 90

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 1. INTRODUCITON

1.1 Introduction

Extrusion is a mechanical process in which certain materials are forced, under

pressure, through a die opening to create products of a desired shape, size, and/or
texture. Extrusion enables mass production of food by a continuous, efficient system that
ensures uniformity of the final product. Food products manufactured using extrusion
usually have a high starch content. These include some pasta, breads, many breakfast
cereals and ready-to-eat snacks, confectionery, pre-made cookie dough, some baby
foods, full-fat soy, textured vegetable protein, some beverages, and dry and semi-moist
pet foods.

Food extrusion processing is a process in which a combination of food ingredients

such as maize, soy, wheat, sorghum and many others are forced to flow under pressure
through several conditions of mixing, heat application and shear, through a perforated plate
or die with a design specific to the food that is being shaped with desired ingredients. This
extrusion process formulates a new cooked food product loaded with intended nutrient
contents that is culturally acceptable.

Some of the common extruded foods of scope in India are Vermicelli, Noodles,
Pasta, etc.

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1.2 Overview of products

a) Vermicelli
Vermicelli is a type of fine pasta that is similar to spaghetti. The pasta features long
rounded pasta strands that tend to be slightly thinner than spaghetti and somewhat
thicker than angel hair pasta. In Italian, vermicelli literally means "little worms" and
reflects the pastas distinctive worm-like shape.

Vermicelli is made out of maida that is ground from very hard wheat. It is simply
maida, water, and a little salt. Vermicelli is a popular instant food product. It falls
under the category of extruded product and is made from wheat flour. At times
tapioca or soya bean or groundnut flour is also added. Thus, it is rich in proteins and
liked by people from all walks of life, irrespective of age.

b) Macaroni

Macaroni is a traditional food product that is formed by the use of dough, which is
made by the use of flour, water, and eggs after which it is formed into different
shapes. It can be simply put that macaroni is a dry pasta. Lastly, a curved macaroni
is mostly referred to as elbow macaroni, which is popular among young children.

c) Spaghetti

Spaghetti is long, thin pasta, is a popular Italian pasta, often served with a tomato
sauce sometimes called spaghetti sauce. The Italian word spago means string, and
spaghetti is the plural of spago — a description of what spaghetti looks like.
Spaghetti straps are very thin shoulder straps found on dresses and summery tops.

d) Noodles

Noodles are staple foods in many regions of the world. Their most likely origin is
China Noodles are a type of food, made from unleavened dough which is rolled flat
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 and cut, or extruded, into long strips or strings. Noodles can be refrigerated for short-
term storage or dried and stored for future use. Noodles are a form of pasta that is
becoming extremely popular in India even as Continental and Italian delicacy. Ready
to eat Noodles are prepared by means of an extrusion machine that is basically made
of an stainless steel make strips, either flat (rolled and Cut ) or Oval round
(Extruded). The process is quite simple and requires not much skilled labour. The
machine itself is high technology and provides the manufacturers to produce noodles
with several alternatives materials (like Maida, Suji, Rava, Rice flour etc.) These
products can be described as Hard, Brittle pieces, formed into different shapes by
extruding, cutting and drying, tough dough made from semolina or farina mixed with
water.

e) Pasta

Pasta refers to the staple food of traditional Italian cuisine made using dough,
water, eggs, vegetables, and oil. The dough is kneaded into various shapes,
some of which are known as penne, spaghetti, farfalle, fettuccine, barbine, etc.
Pasta is associated with several health benefits owing to a high concentration of
vitamins and minerals. Currently, the demand for pasta is gaining immense
popularity in India, particularly amongst the younger population, due to expansion
in food-service restaurants.

Pasta items were first introduced in Italy in the 13th century, it has only been possible
to manufacture efficient production equipment and high-quality ingredients since the
20th century. Today, most pasta is processed by continuous high-capacity extruders
operating on the principle of auger extrusion, where kneading and extrusion are
carried out in a single operation. Pasta processing types includes dry macaroni,
noodles, and spaghetti.

2. NOMENCLATURE OF THE PRODUCT

a) Vermicelli

Vermicelli (Italian: [vermiˈtʃɛlli]; lit. 'little worms', is a traditional type of pasta round in
section similar to spaghetti. In English-speaking regions it is usually thinner than
spaghetti, while in Italy it is typically thicker. In India and other countries of the Indian
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 Subcontinent, wheat vermicelli is known by various local names such as sev in
Gujarati, shavige in Kannada, sevalu or semiya in Telugu, and semiya in Tamil and
Malayalam. The term vermicelli is also used to describe various types of thin
noodles from Asia. In Vietnam vermicelli is the same as angel hair pasta or capellini.

In countries of the Indian subcontinent, vermicelli is available either as long strands or

cut into about 2 cm long pieces. Vermicelli is known by various local names such as
Semya in Telugu, semiya when made with wheat & sevai when made with rice
in Tamil, Seyemiyoo in Malayalam shavige in Kannada, shemai in Bengali seviyan in
Hindi, urudu and Punjabi, vaLavaT / shevaya, in Marathi, simei in Odia, sev in
Gujarathi, semige in Tulu.

b) Noodles
There is no systematic classification or nomenclature for Asian noodles; wide
differences exist between countries. There is a need to standardize noodle
nomenclature using a universal classification system. Classification below is based on
the current state of the knowledge.

 Based on raw material: Noodles can be made from Wheat flour alone or in
combination with buckwheat flour. Wheat flour noodles include Chinese and
Japanese type noodles. There are many varieties in each noodle type,
representing different formulation, processing and noodle quality characteristics.
Noodles containing buckwheat are also called soba, meaning buckwheat
noodle. These noodles are typically light brown or gray in color with a unique
taste and flavor
 Based on salt used: Based on the absence or presence of alkaline salt in the
formula, noodles can be classified as white (containing salt) noodles or yellow
(containing alkaline salt) noodles.
 Based on size: According to the width of the noodle strands, Japanese noodles
are classified into four types. Since the smaller size noodles usually soften
faster in hot water than the larger size, so-men and hiya-mughi noodles are
usually served cool in the summer, and udon and hira-men are often eaten hot
in the cool seasons.
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  Based on Processing: The simplest way to classify noodles based on
processing is hand- made versus machine-made noodles. Noodle processing
operations include mixing raw materials, dough sheeting, compounding,
sheeting /rolling and slitting. This series of processes remains constant among
countries for all noodle types. Noodle strands are further processed to produce
different kinds of noodles, and this can be a means of classification as given
below:
 Fresh: Noodle strands coming out of slitting rolls are cut into certain lengths for
packaging without any further processing
 Dried: Fresh noodle stands are dried by sunlight or in a controlled chamber.
Noodle shelf life is dramatically extended, but fragile noodles may have
handling problems.
 Boiled: Fresh noodle strands are either parboiled (90% complete cooking) or
fully cooked. Boiled noodles are re-cooked for another 1-2 minutes before
serving.
 Steamed: Fresh alkaline noodle strands are steamed in a steamer and
softened with water through rinsing or steeping.

c) Pasta

Pasta refers to the staple food of tradition Italian cuisine which is made using dough,
water, eggs, vegetables, and oil. The dough is kneaded into various shapes some
of which are known as penne, spaghetti, farfalle, fettuccine, barbine, etc. The size
and shape of the holes in the die determine the type of pasta.

Pastas are divided into two broad categories: dried (pasta secca) and fresh (pasta
fresca). Most dried pasta is produced commercially via an extrusion process, although
it can be produced at home. Fresh pasta is traditionally produced by hand,
sometimes with the aid of simple machines. Fresh pastas available in grocery stores
are produced commercially by large-scale machines.

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 Both dried and fresh pastas come in a number of shapes and varieties, with 310
specific forms known by over 1300 documented names. In Italy, the names of specific
pasta shapes or types often vary by locale. For example, the pasta form cavatelli is
known by 28 different names depending upon the town and region. Common forms of
pasta include long and short shapes, tubes, flat shapes or sheets, miniature shapes
for soup, those meant to be filled or stuffed, and specialty or decorative shapes.

3. COMMERCIAL DETAILS
3.1 HSN Code of the product

HSN stands for Harmonised System of Nomenclature code. It is mandatory for both
B2B and B2C tax invoices on the supplies of Goods and Services. This was
introduced in 1988 by the World Customs Organization (WCO). This was introduced
for a systematic classification of goods both national and international. This is a 6-digit
code that classifies various products. India has been using HSN codes since 1986 to
classify commodities for Customs and Central Excise. HSN codes apply to Customs
and GST.

The Harmonised System of Nomenclature code (HSN) for Pasta, Noodles, Spaghetti,
Macaroni, etc is classified under Chaper Head 19 with HSN Code 1902.

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3.2 NIC Code of the product

The National Industrial Classification Code (―NIC Code‖) is a statistical standard for
developing and maintaining a comparable data base for various economic activities.
This code has been developed with an intent to ascertain and analyse as to how each
economic activity is contributing towards national wealth.

The NIC classification (NIC - 2008) for manufacturing of Extruded products like
Noodles, Pasta etc., are classified under class 1074 with sub class classification as
10740.

3.3 Clusters already existing on the product if any

There are no existing clusters in the country.

3.4 Possibility to create / establish clusters on the product:

The extruded foods industry is found scattered all over the country, but still
opportunities for formation of cluster exist combining with other similar food products
like extruded snacks and other starch based food products. The Extruded food industry
can be established anywhere in the country after demand study & availability of
necessary infrastructure, manpower, raw material, etc.
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3.5 Number of industries registered as MSME in the manufacturing of the product:

There are 5,812 registeered MSMEs involved in the manufacturing of Extruded foods
like noodles, pasta, vermicelli, etc. the highest concentrationof industries is found in
the state of Maharatra, flowed by Uttar Pradesh.

Number of MSMEs Registered under NIC Code-1074

Manufacture of macaroni, noodles, couscous
State Name
and similar farinaceous products
MAHARASHTRA 1178
UTTAR PRADESH 951
BIHAR 529
RAJASTHAN 506
TAMIL NADU 392
MADHYA PRADESH 218
WEST BENGAL 214
PUNJAB 206
KARNATAKA 204
GUJARAT 197
HARYANA 175
ODISHA 160
DELHI 159
JHARKHAND 143
UTTARAKHAND 98
TELANGANA 92
ASSAM 85
ANDHRA PRADESH 58
CHHATTISGARH 56
KERALA 47
MANIPUR 30
JAMMU AND
24
KASHMIR
HIMACHAL PRADESH 22
TRIPURA 11
MIZORAM 10
PUDUCHERRY 8
DAMAN AND DIU 6
MEGHALAYA 6

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 Manufacture of macaroni, noodles, couscous
State Name
and similar farinaceous products
CHANDIGARH 6
GOA 5
NAGALAND 4
ANDAMAN AND
3
NICOBAR ISLANDS
LADAKH 3
SIKKIM 3
ARUNACHAL
2
PRADESH
DADAR AND NAGAR
1
HAVELI
LAKSHADWEEP 0
5812
Till-15/10/2021

3.6 Number of industries available in large scale Industries

Some of the popular brands in Extruded foods are

Nestle – Maggi
Unilever – Knorr and
Horlicks Foodles
ITC – Sunfeast – Yipe
Nissin – Top ramen
Weikfield pasta
Bambino

3.7 Import data

` According to World Trade Atlas, Global Trade Information Service data, the total
value of the world pasta import is 3,059 million Euros. The key nations that import
India's pasta or spaghetti are: Bangladesh, USA, Russia, Vietnam, Bhutan, South
Africa, Sri Lanka, Saudi Arabia, and Nepal.

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 Durum wheat which is the main raw material of pasta, is produced only in certain
areas of the world and the dependency to durum wheat increases yearly. This
situation causes the countries which have a large pasta consumption level but
cannot be able to produce enough pasta to meet the domestic demand to prefer
importing. Along with this some pasta producing countries also prefer importing in
an attempt to increase the variety.

HS Code : PASTA, WHETHER OR NOT COOKED OR STUFFED (WITH

1902 MEAT OR OTHER SUBSTANCES) OR
OTHERWISPREPARED, SUCH AS SPAGHETTI

S. 2021-22
Description 2018-19 2019-20 2020-21
No. (Apr-Jul)
Value Rs
1. 11,840.79 13,121.66 18,166.15 7,357.96
(in Lakhs)
India’s Total
359,467,461.19 336,095,445.61 291,595,770.04 127,327,834.86
Import

Source: Export Import Data Bank, Ministry of Commerce, Govt. of India.

The Country wise import data for the year 2020-21 and 2021-22 (Apr- Jul) is given in
the below table (Values are in Lacs)

S.No. Country 2020-2021 2021-2022(Apr-Jul)

1. NEPAL 6,703.80 3,265.82

2. ITALY 3,970.68 1,089.37
4. KOREA RP 3,062.68 860.52
5. SINGAPORE 1,086.55 367.04
6. INDONESIA 736.33 270.92
7. 241.35
THAILAND 599.96
8. CHINA P RP 170.80 86.56
9. VIETNAM SOC REP 87.06 36.92
10. LATVIA 143.00 36.53
11. TURKEY 169.72 32.98
12. MALAYSIA 75.06 24.70
13. SPAIN 45.48 12.24

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 14. AUSTRALIA 65.91 10.34
15. USA 15.76 7.77
16. UK 9.14 5.25
17. EGYPT A RP 4.51 4.84
18. BHUTAN 66.66 2.91
19. U ARAB EMTS 50.17 2.48
20. FRANCE 10.26 2.23
21. JAPAN 7.94
22. ETHIOPIA 0.01
23. MOROCCO 3.88
24. NIGERIA 35.93
25. PITCAIRN IS. 5.61
26. POLAND 0.01
27. TUNISIA 19.84

Total 18,166.15 7,357.95

3.8 Export data

Worldwide pasta exports from all countries totaled US$11.9 billion in 2020, Italy
takes the first place in world pasta export. Italy exported a total value of of 3.56
Billion US $.

PASTA, WHETHER OR NOT COOKED OR STUFFED (WITH

HS Code: 1902
MEAT OR OTHER SUBSTANCES) OR
OTHERWISPREPARED, SUCH AS SPAGHETTI

S. 2021-22
Description 2018-19 2019-20 2020-21
No. (Apr-Jul)
Value Rs
1. 17,827.21 19,694.48 32,804.04 6,884.49
(in Lakhs)
India’s Total
230,772,619.38 221,985,418.10 215,904,322.13 96,938,797.04
Export

Source: Export Import Data Bank, Ministry of Commerce, Govt. of India.

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The Country wise Export data for the year 2020-21 and 2021-22 (Apr- Jul) is given in
the below table (Value in Lacs)

S.No. Country 2020-2021 2021-2022(Apr-Jul)

1. USA 11,535.87 2,514.67
2. CANADA 4,758.57 917.78
3. BHUTAN 4,145.59 810.33
4. U ARAB EMTS 1,494.69 531.29
5. AUSTRALIA 2,470.95 346.98
6. NEPAL 1,493.34 251.35
7. UK 2,196.40 223.30
8. MALAYSIA 620.96 220.16
9. SINGAPORE 664.48 145.32
10. NETHERLAND 473.49 128.94
11. NEW ZEALAND 482.51 96.81
12. KUWAIT 167.88 72.20
13. GERMANY 269.84 45.72
14. ITALY 147.93 45.70
15. QATAR 146.66 43.84
16. OMAN 144.20 36.68
17. SAUDI ARAB 123.47 34.63
18. KOREA RP 24.66 33.17
19. TRINIDAD 44.90 29.68
20. BENIN 20.41 23.99
21. KENYA 76.37 21.84
22. CHINA P RP 24.21 20.96
23. HONG KONG 106.51 18.79
24. SOUTH AFRICA 131.09 17.94
25. FRANCE 26.37 17.83
26. BAHARAIN IS 88.08 16.93
27. PHILIPPINES 47.45 13.55
28. JAPAN 45.39 13.45
29. THAILAND 55.88 13.32
30. TURKEY 19.08 12.52
31. MAURITIUS 28.74 11.43
32. IRELAND 66.84 10.00
33. GHANA 14.51 7.91
34. ZAMBIA 31.20 7.43
35. SWEDEN 72.03 7.01
36. FINLAND 3.64 6.93
37. NIGERIA 49.63 6.37
38. CYPRUS 14.93 6.04
39. ISRAEL 8.88 5.77
40. SENEGAL 5.14 5.45
41. TANZANIA REP 28.24 5.31

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S.No. Country 2020-2021 2021-2022(Apr-Jul)
42. GUINEA 4.24 4.94
43. SRI LANKA DSR 9.30 4.82
44. PORTUGAL 1.62 4.56
45. BELGIUM 10.16 4.52
46. UGANDA 18.74 3.94
47. CZECH REPUBLIC 1.06 3.45
48. CONGO D. REP. 28.38 3.42
49. SWITZERLAND 35.56 3.27
50. MALDIVES 21.67 3.15
51. GAMBIA 4.77 3.15
52. MOZAMBIQUE 12.48 3.01
53. PANAMA REPUBLIC 2.27 2.96
54. VIETNAM SOC REP 4.94 2.91
55. CHILE 3.16 2.87
56. BANGLADESH PR 21.73 2.76
57. SIERRA LEONE 8.16 2.70
58. NORWAY 25.73 2.47
59. CONGO P REP 3.01 2.21
60. SEYCHELLES 2.06 2.21
61. EQUTL GUINEA 1.29 2.11
62. MALAWI 10.02 2.09
63. HUNGARY 0.16 2.08
64. GEORGIA 5.75 1.86
65. ANGOLA 10.81 1.83
66. MADAGASCAR 12.97 1.61
67. TOGO 16.16 1.35
68. GREECE 1.42 1.14
69. COTE D' IVOIRE 4.88 1.01
70. DENMARK 17.74 0.99
71. RWANDA 2.92 0.97
72. TAIWAN 1.75 0.93
73. NETHERLANDANTIL 3.76 0.92
74. CAMBODIA 4.56 0.84
75. SPAIN 13.28 0.75
76. LATVIA 0.29
77. BOTSWANA 9.61 0.29
78. KAZAKHSTAN 0.08 0.21
79. GABON 0.29 0.19
80. UZBEKISTAN 0.08 0.15
81. MYANMAR 0.13
82. BRUNEI 5.63 0.11
83. DJIBOUTI 0.07 0.02
84. POLAND 6.06 0.01
85. COMOROS 0.00
86. INDONESIA 0.00

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 S.No. Country 2020-2021 2021-2022(Apr-Jul)
87. IRAN 0.05
88. GUYANA 3.91
89. JAMAICA 2.87
90. LIBERIA 20.45
91. MALI 2.26
92. MALTA 0.00
93. MAURITANIA 1.70
94. EGYPT A RP 40.91
95. ETHIOPIA 0.03
96. FR GUIANA 0.03
97. FIJI IS 3.06
98. BURKINA FASO 0.01
99. BURUNDI 0.19
100. CAMEROON 1.61
101. CAYMAN IS 0.67
102. ARMENIA 0.40
103. AUSTRIA 1.87
104. PAPUA N GNA 0.42
105. REUNION 0.02
106. SUDAN 0.45
107 SURINAME 2.92
108 SLOVENIA 0.29
109 UKRAINE 0.55
Total 32,804.02 6,884.48

3.9 Scope and Demand in Domestic Market

Extruded Foods is one of the most preferred ready to cook item in both Indian and
foreign markets because of its speciality as it is ready to eat, Easy to prepare,
nutritious, Tasty and Low Cost which makes it a highly demanded product in the
market. With the rapid urbanization and growth of the economy.

Market Outlook
Noodles
Noodles market in India is one of the fastest growing industry globally driven by
steady economic growth and rise in disposable income of consumers. Rapid
urbanization and a large young population are also helping Noodles market to grow

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 further. Dried and Instant Noodles is the leading category in the Noodles market with
Convenience Stores being the leading distribution channel. Urbanization, rising
income levels, working couples, interstate migration and changing lifestyle of young
India are key drivers for the noodles market. The product was positioned as meal
which is filling and can be prepared in just a few minutes, thus offering both
convenience and time saving.

Noodles are value-added processed food items from flour. In addition, the product
occupies 45% market share in the processed cereal products in India. According to
the output and constitute, this is the largest segment in this sector of the processed
food market. Generally, this item is more popular in the northern parts of our
country. The product is an extruded product made of tapioca flour and maida. They
are long thread-like of 0.22 to 0.4 mm. thickness.

Trends in Indian noodle market

Addressing rural market: Noodles are primarily consumed in urban India and to
expand this market companies have introduced small sized and low cost products to
address the demand of rural market. The success of this effort is still to be seen.

Huge Rural market: rural India where close to 60% of Indian population resides is a
huge consumption market virtually un-penetrated by any player. Low cost products
with appropriate marketing can open up this huge market.

Some of the major reasons for its popularity are:

 Increasing population of the country.
 Rapid industrialization in the country.
 Increasing purchasing capacity of the people.
 The durability of the product.
 The changing eating habit of the population.
 Increasing preference for ready to eat food because of the increasing
numbers of working couples etc.

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Vermicelli Product Market
The demand of healthy and easy to prepare food products has reached sky high. This
makes the vermicelli making business an ideal business opportunity to grab on as the
demand for the same is in a highly growing trend. During Ramzan, the demand
reaches at the top as kheer made of vermicelli is consumed all on a daily basis after
daylong fasting. However, in compare to the other foreign countries, the consumption
rate of vermicelli is comparatively low, thus there is a huge opportunity to grow and
capture the market.

Urbanization has changed the lifestyles of not only urbanites but even of semi-urban
and rural areas. This along with increase in the purchasing power of people has
fuelled demand for many fast food or instant food items and vermicelli is one such
product. With the addition of groundnut or soya bean or tapioca flour, it also becomes
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a nutritive product and thus even health conscious people prefer it. Thus vermicelli
has, become a very popular instant food. Variety since last few years and its demand
is steadily growing. There are some established brands but the market is very large
and growing. A small-scale unit can compete with these brands, in the local market on
the price front because of low overheads, less transportation costs and reasonable
advertisement budget. Proper and adequate placement of product and thrust on
publicity at the point of sales would also be crucial.

Pasta Product Market

The global market for pasta can be classified into spaghetti, macaroni, and noodles. It
can also be bifurcated into fresh and dried pasta. While the former is prepared from
simple dough of eggs and flour, the latter is made from finely ground semolina flour
and water, and egg mostly. Fresh pasta has a comparatively shorter shelf life than
dried pasta and hence it is more expensive. Dried pasta generates accounts for a
dominant share vis-à-vis sales in the global market for pasta. The overall global pasta
market is expected to grow moderately in the upcoming years. Global Pasta Market is
projected to witness at the CAGR of 5.85% and it is projected to reach USD 32.78
Billion during the period of 2017 to 2023.

The global pasta market is being driven by a number of favorable factors. The
changing preferences of the consumers, resulting from the western influences and
urbanization in the developing regions, have contributed to the market growth.
Further, as a result of hectic lifestyle, the consumers prefer easy-to-make food
products. Since, pasta is a healthy carbohydrate-rich food and convenient to prepare,
the demand for different types of pasta products such as fusilli, macaroni and
vermicelli, has been on a surge. Moreover, manufacturers are introducing product
innovations such as gluten-free pasta, organic pasta and vegan pasta to attract a
larger consumer-base.

Geography-wise, the global market for pasta has been segmented into Asia Pacific,
Europe, North America, and the Rest of the World. Among them, Europe accounts for
maximum percentage share in terms of consumption and North America comes next.
Markets in China and India, emerging economies whose growth rate has surpassed
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 that of all other countries in the world, have proved to be tough ones to crack. Per
capita sales of pasta is low in India and China on account of lesser priced regional
staples such as rice and noodles. Besides the lack of affordability and cultural
preferences, the abundant availability of pasta is another factor hobbling the growth of
the Asian markets. Going forward, however, tables might likely turn due to rising per
capita income in emerging economies, particularly India and China. This, coupled with
rising urbanization, is anticipated to push substantial growth in the near future.

The spaghetti segment is projected to register the higher growth rate (5.77%) during
the forecast period of 2017 to 2023. Change in consumer lifestyle, increasing
disposable income, increase in health awareness, and rise in demand for
convenience food and consumption will have a positive impact on the market during
the forecast period. Packaged foods are convenient to carry, store, and use. Thus, all
these factors together will drive the market.

The primary factors catalyzing the growth of the pasta market in India include rising
urbanization, changing lifestyles and surging demand for ready-to-eat products. In
addition to this, the market is also influenced by an increasing women employment
rate coupled with rising disposable incomes.

Further, the health-conscious consumers are demanding food products with healthier
ingredients, which has led to a rise in the demand for pasta made with whole-wheat
and quinoa. Some of the other forces that have been proactive in maintaining the
market growth are longer shelf-life and ease of preparation.

3.10 Demand of the Export Market

The demand for pasta in nearly the whole world is increasing gradually. As we have
stated before the fact that pasta being an easy to prepare and cost efficient; also
high nutritional value of the durum wheat within the pasta and the fact that pasta
being a food which can be prepared with various sauces so that it would be
appropriate to palates of almost every culture are effective in this. According to the
data of International Pasta Organization (IPO) the country in which the pasta
consumption is at its peak is the production leader Italy. Pasta consumption per
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 capita in Italy is 26 kg. Venezuela follows Italy with 13.2 kg, Tunisia with 11.9 kg,
Greece with 10.6 kg and Switzerland with 9.2 kg. The pasta consumption per capita
in Turkey is 6.6 kg. As an addition to these, the amount of noodle produced in
homes and then consumed is not included in the records also affects the amount of
consumption. When we have a look at the total pasta production by countries, we
see that the biggest consumer country is USA with 2 million 700 thousand
tons. Italy follows USA with 1,524 million tons and Brazil with 1,191 million tons and
Russia with 1,128 million tons and Germany with 650 thousand tons.

Source:https://www.grandviewresearch.com/industry-analysis/pasta-noodles-market

Countries such as Italy, USA and Turkey produce pasta for export purposes as well
as domestic consumption. However, the other countries carry out their production in
order to meet their domestic demand. The great extent of world pasta production is
carried out in European Union. The leading producing countries are Italy, Germany
and Spain in European Union which has a share of 36.4 per cent in
production. Production share is 14.8 per cent in the non EU member European
countries. In this situation European continent meets more than half of world pasta
production with a ratio of 51.2 per cent. The second continent in pasta production
is America. In America continent which meets 38 per cent of world pasta production,
Middle and South America have 21.9 per cent and North America has 16.1 per
cent. While the 4.4 of the production is being carried out in Middle East, 4.3 per
cent of the production is being carried out in Africa continent. The share of the Asia

24 | P a g e
 continent in world pasta production is 1.8 per cent and Australia’s share is 0.4 per
cent. Middle East, Asia and Australia which have a small share in the production,
have a great potential for consumption. Thus they are being evaluated as the
markets which show promise by means of export.

4 TECHNICAL DETAILS

4.1 Sector in which the product is falling

Extruded foods like vermicelli, Noodles, Pasta, Etc., comes under cereal / grains
and again it can be classified into the Ready to Cook or Ready to eat food
products. Pastas are divided into two broad categories: dried (pasta secca) and
fresh (pasta fresca). Most dried pasta is produced commercially via
an extrusion process, although it can be produced at home. Fresh pasta is
traditionally produced by hand, sometimes with the aid of simple machines.
Fresh pastas available in market are produced commercially by large-scale
machines.

4.2 End users of the products /sectors

The end users of extruded foods are individuals through Retailers, Food Service
Providers - Restaurants, Cafeterias, and Hotels. The health-conscious
consumers are demanding food products with healthier ingredients, which
has led to a rise in the demand for pasta made with whole-wheat and quinoa.
Some of the other forces that have been proactive in maintaining the market
growth are longer shelf-life and ease of preparation. Pasta continues to
increase in popularity. Highly rated for its nutritional value, pasta is an ideal
meal for people who are paying more attention to their dietary intake. In
addition, people are finding less time to prepare meals, and pasta is easily
made. Pasta manufacturers are responding to this demand by introducing a
wide variety of dried and fresh pastas. One recent innovation is no-boil pasta
that is partially cooked at the plant, making this already easy-to-prepare food
even simpler to bring to the table at mealtime.

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4.3 Governing Indian specification:

The Bureau of Indian Standards (BIS), empowered by the Bureau of Indian

Standards Act,2016, operates product certification schemes by which it grants
licenses to manufacturers. The certification allows the licensees to use the
popular ISI mark, which has become synonymous with quality products for the
Indian and neighboring markets for over 55 years.

The Indian Standard IS 1485:1993 - Macaroni, Spaghetti, Vermicelli And Egg

Noodles – Specification- Second Revision is applicable to this category.

4.3.1 Importance of FSSAI Registration & Licensing

The manufacturers of noodles, have to apply for registration and license from Food
Safety & Standards Authority of India (FSSAI). The noodles as food items are regarded
as non-standardized food products by FSSAI and thus it is very important and
mandatory for a manufacturing company to have an FSSAI certification before it
commences its operations.

To operate as a food processing company, it is essential to obtain a food license,

which is relevant to the product. The FSSAI is a mark of certification and the central
government has the power to direct the state bodies to keep a check on the companies
which process such food items. FSSAI action is always coupled with complete
diligence and very swiftly conducts tests on the noodle-making brands of many big

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companies. It is important to understand the slabs crafted by the FSSAI to achieve
such a license.

1. To obtain a Basic Food License, the annual turnover of the company should be
less Rs.12 lakhs.
2. To be eligible for a State License, the turnover of the company should be above
Rs.12 Lakhs but less than Rs.20 Crores
3. For the Central License, the company should have a turnover of more than 20
Crores. The companies, which are involved in large quantity production of any
food items, have to obtain such a license.

4.3.2 Requirement for Extruded foods Manufacturing

Here are some of the requirement to obtain permission and a food license to
makes noodles in India.

 The authorities have to ensure that the noodle making company has a safe
and hygienic premises for manufacturing. This is the first step, which FSSAI
takes to ensure for the companies which are engaged in the manufacturing of
noodles. As per the law, the company has to fill out form B of FSSAI.
 The certificate of authenticity can be achieved when the required documents
to be submitted for FSSAI are complete. The company should be equipped
with all the documentation so that obtaining the certificate becomes a
relatively simpler task.
 The packaging system for the finished product should always be in
accordance with the standards set by the licensing authority. Packaging is an
important step as packing is the first thing the consumer would notice. The
packaging industry should make sure that the packs meet the expected
standards of quality. The companies, which are involved in the packaging of
the food products, are required to apply for a license which is relevant to their
area of specialization.

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  The professionals of the noodle making company should have the required
qualifications, which make them adept in conducting the manufacturing of
food products. Unless qualified engineers are present in the company, the
required task should not be undertaken. FSSAI approves their qualification
and demonstrates that the company is equipped with human expertise.
 The constant checking and testing of the product within the premise of the
noodle making factory is a right of the authorized licensing company. They
also conduct the quality testing of the taste-maker, so that the spices and
ingredients in the taste-maker are found to be safe for consumption. There
have been instances which can prove that even large companies in the
industry have to face these stringent laws and have to prove their quality. If
FSSAI is still not satisfied with the product, FSSAI has the right to place a ban
on it.
 The equipment used by the factory for the production of noodles should be
reliable and of supreme quality. This will ensure the safe production of the
product.
 Once the FSSAI is satisfied with the documentation in filing for the license,
they will further conduct an inspection to be sure of their answer. The
inspection is very stringent as they have to keep in mind all the laws and the
safety of the premises before giving the license to the company for producing
the required food item.
 The companies, if found violating the rules of FSSAI, are liable for
punishment.

When the license expires, the company will have to undergo the renewal procedure for re-
application of the license, but once the license is obtained, the food manufacturing
operators can operate with complete confidence and without any fear of rejection for the
quality of their product. The food processing industry in India is made to undergo stringent
laws so that public health is maintained.

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 4.3.3 Food Safety Regulations And Standards Of Noodles

In order to further strengthen the food safety norms, India's apex food regulator, Food
Safety and Standards Authority of India has issued gazette notification for instant
noodles, durum wheat maida, quinoa and pearl millet flour under the cereal and
cereal product category. These regulations may be called the Food Safety and
Standards (Food Products Standards and Food Additives) Twelfth Amendment
Regulations, 2017. Instant noodles As per the gazette notification, under the sub-
regulation relating to macaroni products, the standards for instant noodles have been
added. These standards will not be applicable to noodle seasoning.

Instant noodles are defined as, ―Instant noodles (not applied to noodle seasoning)
mean the product prepared from wheat flour, or rice flour, or flour of any other
cereals, millets and legumes covered or in combination thereof, or flour from tubers
and water as the main ingredient, with or without the addition of herbs, condiments
and seasonings, spices, iodised salt, sugar and wheat gluten by kneading the dough
and extending it, and starches, dried fruits and vegetables, or their products or
extracts, nuts, edible protein and egg powder, meat, poultry, marine or their products
(whose standards are prescribed in these regulations) may be added, if required.‖ It
added, ―Instant noodles can be characterised by the use of pregelatinisation process
and dehydration either by frying in any oil or fat covered by other methods, and the
product shall be presented as fried noodles or non-fried noodles.‖

Category Fried Noodles Non-fried Noodles

Moisture Not more than 10 per cent Not more than 13 per cent
Acid insoluble ash
(on dry basis) Not more than 0.3 per cent Not more than 0.3 per cent

Acid value Not more than 2 ---

FSSAI’s notice said it should conform to the following standards: With regards to food
additives, contaminants, toxins and residues, food hygiene and packaging and labelling
norms, the notice said that all the subjects should be dealt in accordance with the rules
and regulations prescribed in the FSS Act.
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4.4 Governing international specification:

4.4.1 Codex Alimentarius

The Codex Alimentarius Commission (CAC)is an international food standards body
established jointly by the Food and Agriculture organization (FAO) and the World Health
Organization (WHO) in May 1963 with the objective of protecting consumer's health and
ensuring fair practices in food trade. Codex standards are international food texts, i.e.
standards codes of practice, codes of hygienic practice, guidelines and other
recommendations, established to protect the health of the consumers and to ensure fair
practices in the food trade.

4.4.2 ISO 22000

ISO 22000 is a standard developed by the International Organization for Standardization

dealing with food safety. The ISO 22000 international standard specifies the requirements
for a food safety management system that involves interactive communication, system
management, prerequisite programs and HACCP principles.

ISO 22000 is a Food Safety Management System that can be applied to any organization
in the food chain, farm to fork. Becoming certified to ISO 22000 allows a company to show
their customers that they have a food safety management system in place. This provides
customer confidence in the product.

4.4.3 HACCP

HACCP certification is an international standard defining the requirements for effective

control of food safety It is a management system in which food safety is addressed through
the analysis and control of biological, chemical, and physical hazards from raw material
production, procurement and handling, to manufacturing, distribution and consumption of
the finished product. It is built around seven principles.

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4.4.4 Halal

Halal certification is a process which ensures the features and quality of the products
according to the rules established by the Islamic Council that allow the use of the mark
Halal. It is mainly applied to meat products and other food products such as milk, Extruded
Foods, canned food and additives.

4.5. Qualitative Parameters of the Product

The following parameters of cooked noodles are to be determined: volume increase

coefficient, water uptake (g/g), optimum cooking time (min), and cooking loss (%). Sensory
quality is evaluated on a scale of 1–5 for: odour, external appearance, flavour and mouth
feel, and total quality scores.

Pasta must have a clear and unmistakable amber yellow colour; it must be odourless; it
must taste slightly sweet; when broken it must make a dry sound and the fracture must
appear smooth and glassy with no air bubbles.

4.6. Test Facilities required for the Product

There is no specific national standard for instant noodles. However, FSSAI issued an
advisory listing out the parameters to be tested. The Consumer Voice test programme is
based on this advisory as well as Indian Standard IS: 1485: 1993 (for macaroni, spaghetti,
vermicelli and egg noodles) and the respective product claims. The tests were conducted
at an NABL-accredited laboratory.

The general tests Performed are on the below categories

1. Physiochemical Parameter – Moisture, Carbohydrate, Total protein, Fat, Saturated

Fat, Transfat, Energy, Acid Insoluble Ash, Sodium, Acid value of Extracted fat, Lead,
Arsenic, Mercury, Total Aflatoxin,

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 2. Microbiological Activity – E-Coli, Yeast and Mould, Staphylococcus aureus,
Salmonella
3. Sensory Attributes – Flavour, Texture, Cooking Time, etc.,
4. General Qualities – Physical Appearance, Colour, Size, etc,

A Food testing laboratory with Microbiology test and Chemical analysis has to be planned
in the processing area with necessary equipment’s for testing and evaluation.

5 PROJECTREPORT

5.1 NOODLE MANUFACTURING UNIT

5.1.1 Introduction

Noodles in various contents, formulations, and shapes have been the staple foods for
many Asian countries since ancient time. They can be made from wheat, rice, buckwheat,
and starches derived from potato, sweet potato, and pulses. Noodles based on wheat are
prepared mainly from three basic ingredients; flour, water, and salt. There exist two distinct
types of wheat flour noodles based on the presence and absence of alkaline salts,
regular salted noodles, and alkaline noodles. The basic process of dough mixing, sheet
forming, compounding, sheeting/reduction, and cutting are essentially constant for all
machine-made noodles. Noodle strands coming out of cutting rolls can be further
processed to produce different types of noodles.

5.1.1 Market Potential

Ready to eat noodles are making a niche for itself based on its popularity for being tasty,
nutritious, and quick to make. Although many would differ with the marketing strategy of
noodles on the grounds of nutrition, the market has never kept itself away from such
promotional campaigns.

According to the report ―Noodles Market Analysis & Forecast in India, 2018 to 2023:
Projecting a CAGR of Approx. 5.6%‖The noodles market in India was valued at INR 93.66
32 | P a g e
Billion in 2017, Following this, most companies focused on launching healthier versions of
noodles using vegetables, atta, and oats. A large part of the population comes from the
middle or lower- middle class. Therefore, price sensitivity plays a significant role in
hinderingthe growth of the noodles industry across the country. Most people in rural areas
are unaware of the various brands that are available unless they see them at their local
store. Hence, lack of a well-established distribution network acts as a challenge for the
noodles market in India.

5.1.3 Product Description

5.1.3.1 Product Uses

Despite being relatively low in some nutrients like fiber and protein, noodles contain
several micronutrients, including iron, manganese, folate and B vitamins. Some
noodles are also fortified with additional nutrients.

 Nutrition content: Basically, noodles are made up of salt, wheat flour and water.
The micro nutrients differ according to various brands of instant noodles. Withal,
noodles have low calories, protein, fiber,mineral and vitamins.

 Essential nutrients: Some noodles provide essential nutrients to the body. The
nutrients in noodles differ according to brands. Some brands include manganese
and Vitamin B complex such as thiamine and riboflavin. Literally the study
shows that more than 6000 instant noodle consumers showed 31% and 16%
greater intake of thiamine and riboflavin respectively.

 Low carbs: Rice noodles offers 44 grams of carbs per cup. It has higher
glycemic index which means body breaks it down into sugar quickly.

 Full for longer: One bowl of noodles keeps one full for longer time period as it
takes time to get digested.

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5.1.3.2 Raw Material

The main raw materials are wheat flour or maida and starch. Additionally, you will need
sugar, common salt, spices, garlic, ginger, Sodium Bicarbonate, etc. Actually, the
requirement of the ancillary ingredients depends on the specific taste and flavor you want
to provide in noodles.
Also, you need to packaging consumables. You need to pack the noodles in a moisture-
proof packing. And you need to provide a strong outer carton box for the bulk supply. So,
arrange the supplies accordingly.

5.1.4 Implementation Schedule

Time Required
S.No. Activity
(in Months)

1 Acquisition Of premises 1-2

2 Procurement & installation of Plant & Machinery 1-2

3 Arrangement of Finance 1-2

4 Requirement of required Manpower 1

Total time Required (some activities shall run

5-6 Months
concurrently)

5.1.5 Presumptions

 Production Capacity of noodle is 800 Kgs per day. First year, Capacity has
been taken @ 50%.
 Working shift of 8 hours per day has been considered.
 Raw Material stock is for 15 days and Finished goods Closing Stock has been
taken for 10 days.
 Credit period to Sundry Debtors has been given for 10 days.
 Credit period by the Sundry Creditors has been provided for 9 days.
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  Depreciation and Income tax has been taken as per the Income tax Act,1961.
 Interest on working Capital Loan and Term loan has been taken at 11%.
 Salary and wages rates are taken as per the Current Market Scenario.
 Power Consumption has been taken at 20 KW.
 Selling Prices & Raw material costing has been increased by 5% & 5%
respectively in the subsequent years.

5.1.6 LICENSE & APPROVALS

Obtain the GST registration.
 Additionally, obtain the UDYAM registration Number.
 Fire/pollution license as required.
 FSSAI License.
 Factory License
 Choice of a Brand Name of the product and secure the name withTrademark if
required.

5.1.7 Manufacturing Process

Noodle is a widely popular food item, with a distinct and delicious taste. However, the
process that goes into making instant noodles is not that easy. In here, we will see the
process of instant noodles manufacturing.

Step by Step process

 Knead and mix

As a first step, the wheat flour and water goes into the mixing machine in the
noodles manufacturing process. Here, dough is kneaded with about 0.3 to 0.4kg
water at a temperature of 20 to 30 degree Celsius, thus providing the dough with
textiform tissue generating elastic feature for the noodles.

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 Creating noodle belt:
Then the dough goes into two rotating rollers wherein two noodles belt is bought
together as one belt, helping to distribute the noodles evenly. The dough is also left
for a specific time to mature.
 Rolling
With the help of pressing rollers, the 10mm thick noodles is flattened repeatedly
using four rollers and finally becomes thin at 1mm thickness.
 Slitter
To add to the noodles manufacturing process, these noodles is then put into the
slitter, where with the help of roller blades these instant noodles are made even
thinner and wavy.
 Steamer
Then is the pregelatinization process in the steamer, where the instant noodles is
steamed for one to five minutes.
 Dipping bath
Then the steamed noodles are dipped in seasoning.
 Feeder
Then it is cut as long as 40-70cm then moulded using a round- or square- shaped
metal mould serving
 Dehydration process
Most of the noodles are dehydrated either by oil frying or air drying, thus giving rise
to fried or non-fried noodles. There are also the steamed noodles that are known as
Raw-type instant noodles.
 Cooler
Following the dehydration in the noodles manufacturing process, the noodles that
are at 100 degree Celsius is cooled with air.
 Check weight and detect metal
In case any metal is detected in the noodles or if the weight is beyond the preset
range, the product is then discarded.
 Packing
The ready instant noodles are then put into firm bags or containers as required
along with the garnish and seasonings and then sealed with aluminium foils.
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 Flow chart for Noodles Processing

Kneading

Belt Creatingeating

Rolling

Slitting

Steaming

Dewatering & Frying

Cooler

Detect Metal & Packaging

5.1.8 Project Components

5.1.8.1 Land

Land required 1000-1200 square feet approx.

Approximate rent for the same is Rs.20000-25000 per month.

Note: cost of the machinery is approx. Rs. 7,50,000 excluding GST and other transportation
cost.

5.1.8.2 Machinery & Equipment’s

The specific machinery requirement and the machine cost depends on the operation mode
(semi- automatic or fully-automatic) and unit size. Here, we put a basic list of machinery
requirements.

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 Vertical type powder mixer with motor complete- The machine is widely used for
the manufacture of dry powder, talcum powder, granules, spice and low-viscosity
paste and liquid in chemicals, pharmaceuticals, food and cosmetics industries.

 Dough mixer blade type- With a rotating bowl in a Spiral mixer the spinning motion
imitates hand kneading and rolling motions and gently mixes bread dough. This
allows it to develop the proper gluten structure, while not overworking the dough.

 Noodles making power operated machine with different size die-heads- This
equipment consists of cutting knife, folding part, conveying net, machine frame
and driving part. The main function is to cut the noodles in a certain length,
different length means different weight, after the folding process the noodle pieces
will be putted into the fried container more easily.
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 Noodle Dryer- Next, noodles can be dried in one of two ways: by frying or by hot
air drying. Fried instant noodles are dried by oil frying for 1–2 minutes at a
temperature of 140–160 °C (284–320 °F). The frying process decreases the
moisture content from 30–50% to 2–5%.

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  Packaging machine- A noodles packing machine is also a type of Flow
Wrap Machine that packs the raw noodles inside the pouch.It is also known as
Noodle packaging machine.

5.1.8.3 Miscellaneous Assets

S.No. Item Description Rate, Rs.

1 Electricity connection 50,000

2 Storage tank, collection tank etc. 20,000
3 Furniture and equipment’s 50,000

5.1.8.4 Power Requirement

The borrower shall require power load of 20 KW which shall be applied with Power
Corporation. However, for standby power arrangement the borrower shall also purchase
DG Set.

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5.1.8.5 Manpower Requirement

7-8 Manpower are required for the Noodles manufacturing unit.

Includes:
 Skilled Labour

 2-3 Unskilled Labour

 Helper

 1 Accountant

5.1.9 Financials

5.1.9.1 Cost Of Project

COST OF PROJECT
(in Lacs)

Own Bank
PARTICULARS AMOUNT Contribution Finance

25.00% 75.00%

Land & Building Owned /rented

Plant & Machinery 7.50 1.88 5.63

Furniture & Fixtures and Other Assets 1.20 0.30 0.90

Working capital 4.00 1.00 3.00

Total 12.70 3.18 9.53

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8.1.9.2 Means of Finance

MEANS OF FINANCE

PARTICULARS AMOUNT

Own Contribution 3.18

Bank Loan 6.53

Working capital Limit 3.00

Total 12.70

5.1.9.3 Projected Balance Sheet

(in Lacs)
PROJECTED BALANCE
SHEET
PARTICULARS 1st 2nd year 3rd year 4th 5th
year year year
Liabilities

Capital

opening balance 3.89 5.15 6.44 7.52

Add:- Own Capital 3.18

Add:- Retained Profit 2.22 3.75 5.79 8.08 10.75

Less:- Drawings 1.50 2.50 4.50 7.00 9.00

Closing Balance 3.89 5.15 6.44 7.52 9.27

Term Loan 5.80 4.35 2.90 1.45 -

Working Capital Limit 3.00 3.00 3.00 3.00 3.00

Sundry Creditors 1.08 1.27 1.47 1.68 1.92

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 Provisions & Other Liab 0.50 0.63 0.75 0.90 1.08

TOTAL : 14.27 14.39 14.56 14.55 15.27

Assets

Fixed Assets ( Gross) 8.70 8.70 8.70 8.70 8.70

Gross Dep. 1.25 2.31 3.22 4.00 4.66

Net Fixed Assets 7.46 6.39 5.48 4.70 4.04

Current Assets

Sundry Debtors 2.13 2.54 2.92 3.32 3.74

Stock in Hand 3.57 4.16 4.77 5.41 6.07

Cash and Bank 1.12 1.29 1.39 1.13 1.41

TOTAL : 14.27 14.39 14.5 14.55 15.27

6

5.1.9.4 Projected Cash Flow

(in
PROJECTED CASH FLOW Lacs)
STATEMENT
PARTICULARS 1st year 2nd year 3rd 4th 5th
year year year
SOURCES OF FUND

Own Margin 3.18

Net Profit 2.22 3.75 5.88 8.44 11.42

Depriciation & Exp. W/off 1.25 1.06 0.91 0.78 0.67

Increase in Cash Credit 3.00 - - - -

Increase In Term Loan 6.53 - - - -

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 Increase in Creditors 1.08 0.19 0.20 0.22 0.23

Increase in Provisions & Other lib 0.50 0.13 0.13 0.15 0.18

TOTAL : 17.74 5.13 7.12 9.58 12.50

APPLICATION OF FUND

Increase in Fixed Assets 8.70

Increase in Stock 3.57 0.59 0.61 0.64 0.67

Increase in Debtors 2.13 0.42 0.38 0.40 0.42

Repayment of Term Loan 0.73 1.45 1.45 1.45 1.45

Drawings 1.50 2.50 4.50 7.00 9.00

Taxation - - 0.09 0.36 0.67

TOTAL : 16.62 4.96 7.02 9.84 12.21

Opening Cash & Bank - 1.12 1.29 1.39 1.13

Balance Add : Surplus 1.12 0.17 0.10 (0.26) 0.29
Closing Cash & Bank Balance 1.12 1.29 1.39 1.13 1.41

5.1.9.5 Projected Profitability

PROJECTED PROFITABILITY STATEMENT (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

Capacity Utilisation % 50% 55% 60% 65% 70%

SALES

Gross Sale

Noodles 63.80 76.33 87.60 99.58 112.29

Total 63.80 76.33 87.60 99.58 112.29

44 | P a g e
COST OF SALES

Raw Material Consumed 36.00 42.24 48.96 56.16 63.84

Electricity Expenses 4.80 5.52 6.35 7.30 8.03

Depreciation 1.25 1.06 0.91 0.78 0.67

Wages & labour 5.64 6.20 6.82 7.51 8.26

Repair & maintenance 2.23 2.67 3.07 3.49 2.81

consumables 3.19 3.82 3.50 2.69 2.81

Cost of Production 53.11 61.52 69.61 77.92 86.41

Add: Opening Stock /WIP - 1.77 2.05 2.32 2.60

Less: Closing Stock /WIP 1.77 2.05 2.32 2.60 2.88

Cost of Sales 51.34 61.24 69.34 77.64 86.13

GROSS PROFIT 12.46 15.09 18.25 21.94 26.17

Salary to Staff 3.72 4.09 4.50 4.95 5.45

Interest on Term Loan 0.64 0.56 0.41 0.25 0.09

Interest on working Capital 0.33 0.33 0.33 0.33 0.33

Rent 3.00 3.30 3.63 3.99 4.39

selling & adm exp 2.55 3.05 3.50 3.98 4.49

TOTAL 10.24 11.34 12.37 13.50 14.75

NET PROFIT 2.22 3.75 5.88 8.44 11.42

Taxation 0.09 0.36 0.67

PROFIT (After Tax) 2.22 3.75 5.79 8.08 10.75

45 | P a g e
 5.1.9.6 Production and Yield

COMPUTATION OF PRODUCTION OF NOODLES

Items to be Manufactured
Noodles

machine capacity 200 KG per Hour

Operational capacity Taken 100 KG per hour

Total working Hours 8

machine capacity per day 800 KG

working days in a month 25 Days

working days per annum 300

machine capacity per annum 240000 KG

Production of Noodles

Production Capacity KG

1st year 50% 120,000

2nd year 55% 132,000
3rd year 60% 144,000
4th year 65% 156,000
5th year 70% 168,000

46 | P a g e
Raw Material Cost
Year Capacity Rate Amount
Utilisation (per (Rs. in
KG) lacs)
1st year 50% 30.00 36.00

2nd year 55% 32.00 42.24

3rd year 60% 34.00 48.96

4th year 65% 36.00 56.16

5th year 70% 38.00 63.84

5.1.9.7 Sales Revenue

COMPUTATION OF SALE

Particulars 1st year 2nd year 3rd year 4th year 5th year

Op Stock - 4,000 4,400 4,800 5,200

Production 120,000 132,000 144,000 156,000 168,000

Less : Closing 4,000 4,400 4,800 5,200 5,600

Stock

Net Sale 116,000 131,600 143,600 155,600 167,600

sale price per KG 55.00 58.00 61.00 64.00 67.00

Sales (in Lacs) 63.80 76.33 87.60 99.58 112.29

47 | P a g e
 5.1.9.8 Working Capital Assessment

(in Lacs)
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL
PARTICULARS 1st 2nd 3rd 4th 5th year
year year year year
Finished Goods

1.77 2.05 2.32 2.60 2.88

Raw Material
1.80 2.11 2.45 2.81 3.19

Closing Stock 3.57 4.16 4.77 5.41 6.07

COMPUTATION OF WORKING CAPITAL REQUIREMENT

TRADITIONAL METHOD (in Lacs)

Particulars Amount Own Bank Finance

Margin

Finished Goods & Raw Material 3.57

Less : Creditors 1.08

Paid stock 2.49 25% 0.62 75% 1.87

Sundry Debtors 2.13 25% 0.53 75% 1.60

4.62 1.15 3.46

WORKING CAPITAL LIMIT DEMAND ( from Bank) 3.00

48 | P a g e
5.1.9.9 Power, Salary & Wages Calculation

Utility Charges (per month)

Particulars value Description
Power connection required 20 KWH
consumption per day 160 units
Consumption per month 4,000 units
Rate per Unit 10 Rs.
power Bill per month 40,000 Rs.

BREAK UP OF LABOUR CHARGES

Particulars Wages No of Total

Rs. per Month Employees Salary

Skilled (in thousand rupees) 14,000 2 28,000

Unskilled (in thousand rupees) 9,500 2 19,000

Total salary per month 47,000

Total annual labour charges (in lacs) 5.64

BREAK UP OF Staff Salary CHARGES

Particulars Salary No of Total

Rs. per Month Employees Salary

Helper 7,000 2 14,000

Accountant 17,000 1 17,000

Total salary per month 31,000

Total annual Staff charges (in lacs) 3.72

49 | P a g e
 5.1.9.10 Depreciation
COMPUTATION OF DEPRECIATION (in Lacs)

Description Plant & Machinery Furniture TOTAL

Rate of Depreciation 15.00% 10.00%

Opening Balance - - -

Addition 7.50 1.20 8.70

Total 7.50 1.20 8.70

Less : Depreciation 1.13 0.12 1.25

WDV at end of Year 6.38 1.08 7.46

Additions During The Year - - -

Total 6.38 1.08 7.46

Less : Depreciation 0.96 0.11 1.06

WDV at end of Year 5.42 0.97 6.39

Additions During The Year - - -

Total 5.42 0.97 6.39

Less : Depreciation 0.81 0.10 0.91

WDV at end of Year 4.61 0.87 5.48

Additions During The Year - - -

Total 4.61 0.87 5.48

Less : Depreciation 0.69 0.09 0.78

WDV at end of Year 3.92 0.79 4.70

Additions During The Year - - -

Total 3.92 0.79 4.70

Less : Depreciation 0.59 0.08 0.67

WDV at end of Year 3.33 0.71 4.04

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 5.1.9.11 Repayment schedule
REPAYMENT SCHEDULE OF TERM LOAN
Interest 11.00%
Closing
Year Particulars Amount Addition Total Interest Repayment Balance
Ist Opening Balance
1st month - 6.53 6.53 - - 6.53
2nd month 6.53 - 6.53 0.06 - 6.53
3rd month 6.53 - 6.53 0.06 - 6.53
4th month 6.53 - 6.53 0.06 6.53
5th month 6.53 - 6.53 0.06 6.53
6th month 6.53 - 6.53 0.06 6.53
7th month 6.53 - 6.53 0.06 0.12 6.40
8th month 6.40 - 6.40 0.06 0.12 6.28
9th month 6.28 - 6.28 0.06 0.12 6.16
10th month 6.16 - 6.16 0.06 0.12 6.04
11th month 6.04 - 6.04 0.06 0.12 5.92
12th month 5.92 - 5.92 0.05 0.12 5.80
0.64 0.73
2nd Opening Balance
1st month 5.80 - 5.80 0.05 0.12 5.68
2nd month 5.68 - 5.68 0.05 0.12 5.56
3rd month 5.56 - 5.56 0.05 0.12 5.44
4th month 5.44 - 5.44 0.05 0.12 5.32
5th month 5.32 - 5.32 0.05 0.12 5.20
6th month 5.20 - 5.20 0.05 0.12 5.08
7th month 5.08 - 5.08 0.05 0.12 4.95
8th month 4.95 - 4.95 0.05 0.12 4.83
9th month 4.83 - 4.83 0.04 0.12 4.71
10th month 4.71 - 4.71 0.04 0.12 4.59
11th month 4.59 - 4.59 0.04 0.12 4.47
12th month 4.47 - 4.47 0.04 0.12 4.35
51 | P a g e
 0.56 1.45
3rd Opening Balance
1st month 4.35 - 4.35 0.04 0.12 4.23
2nd month 4.23 - 4.23 0.04 0.12 4.11
3rd month 4.11 - 4.11 0.04 0.12 3.99
4th month 3.99 - 3.99 0.04 0.12 3.87
5th month 3.87 - 3.87 0.04 0.12 3.75

6th month 3.75 - 3.75 0.03 0.12 3.63

7th month 3.63 - 3.63 0.03 0.12 3.50
8th month 3.50 - 3.50 0.03 0.12 3.38
9th month 3.38 - 3.38 0.03 0.12 3.26
10th month 3.26
3.26 - 3.26 0.03 0.12 3.14
11th month 3.14 - 3.14 0.03 0.12 3.02
12th month 3.02 - 3.02 0.03 0.12 2.90
0.41 1.45
4th Opening Balance
1st month 2.90 - 2.90 0.03 0.12 2.78
2nd month 2.78 - 2.78 0.03 0.12 2.66
3rd month 2.66 - 2.66 0.02 0.12 2.54
4th month 2.54 - 2.54 0.02 0.12 2.42
5th month 2.42 - 2.42 0.02 0.12 2.30
6th month 2.30 - 2.30 0.02 0.12 2.18
7th month 2.18 - 2.18 0.02 0.12 2.05
8th month 2.05 - 2.05 0.02 0.12 1.93
9th month 1.93 - 1.93 0.02 0.12 1.81
10th month 1.81 - 1.81 0.02 0.12 1.69
11th month 1.69 - 1.69 0.02 0.12 1.57
12th month 1.57 - 1.57 0.01 0.12 1.45
0.25 1.45

52 | P a g e
5th Opening Balance
1st month 1.45 - 1.45 0.01 0.12 1.33
2nd month 1.33 - 1.33 0.01 0.12 1.21
3rd month 1.21 - 1.21 0.01 0.12 1.09
4th month 1.09 - 1.09 0.01 0.12 0.97
5th month 0.97 - 0.97 0.01 0.12 0.85
6th month 0.85 - 0.85 0.01 0.12 0.72
7th month 0.72 - 0.72 0.01 0.12 0.60
8th month 0.60 - 0.60 0.01 0.12 0.48
9th month 0.48 - 0.48 0.00 0.12 0.36
10th month 0.36 - 0.36 0.00 0.12 0.24
11th month 0.24 - 0.24 0.00 0.12 0.12
12th month 0.12 - 0.12 0.00 0.12 -
0.09 1.45
DOOR TO DOOR 60 MONTHS
MORATORIUM PERIOD 6 MONTHS
REPAYMENT PERIOD 54 MONTHS

53 | P a g e
5.1.9.12 Financial Indicators

FINANCIAL INDICATORS

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
TURNOVER 63.80 76.33 87.60 99.58 112.29
GROSS PROFIT 12.46 15.09 18.25 21.94 26.17
G.P. RATIO 19.53% 19.77% 20.84% 22.03% 23.30%

NET PROFIT 2.22 3.75 5.88 8.44 11.42

N.P. RATIO 3.48% 4.92% 6.72% 8.47% 10.17%

CURRENT ASSETS 6.82 8.00 9.08 9.85 11.23

CURRENT LIABILITIES 4.58 4.89 5.22 5.58 6.00
CURRENT RATIO 1.49 1.63 1.74 1.76 1.87

TERM LOAN 5.80 4.35 2.90 1.45 -

TOTAL NET WORTH 3.89 5.15 6.44 7.52 9.27
DEBT/EQUITY 1.49 0.85 0.45 0.19 -

TOTAL NET WORTH 3.89 5.15 6.44 7.52 9.27

TOTAL OUTSIDE LIABILITIES 10.38 9.24 8.12 7.03 6.00
TOL/TNW 2.67 1.80 1.26 0.94 0.65

PBDIT 4.44 5.71 7.53 9.79 12.50

INTEREST 0.97 0.89 0.74 0.58 0.42
INTEREST COVERAGE
RATIO 4.57 6.38 10.24 17.00 30.02

WDV 7.46 6.39 5.48 4.70 4.04

TERM LOAN 5.80 4.35 2.90 1.45 -
FACR 1.29 1.47 1.89 3.24 -
54 | P a g e
5.1.9.13 DSCR

CALCULATION OF D.S.C.R

1st 2nd 3rd 4th 5th

PARTICULARS year year year year year

CASH ACCRUALS 3.46 4.82 6.70 8.86 11.42

Interest on Term Loan 0.64 0.56 0.41 0.25 0.09

Total 4.11 5.38 7.11 9.10 11.50

REPAYMENT

Instalment of Term Loan 0.73 1.45 1.45 1.45 1.45

Interest on Term Loan 0.64 0.56 0.41 0.25 0.09

Total 1.37 2.01 1.86 1.70 1.54

DEBT SERVICE COVERAGE

RATIO 3.00 2.67 3.83 5.37 7.49

AVERAGE D.S.C.R. 4.47

55 | P a g e
 5.1.9.14 Break Even Point Analysis

BREAK EVEN POINT ANALYSIS

Year I II III IV V

Net Sales & Other Income 63.80 76.33 87.60 99.58 112.29

Less : Op. WIP Goods - 1.77 2.05 2.32 2.60

Add : Cl. WIP Goods 1.77 2.05 2.32 2.60 2.88

Total Sales 65.57 76.61 87.87 99.86 112.57

Variable & Semi Variable Exp.

Raw Material Consumed 36.00 42.24 48.96 56.16 63.84

Electricity Exp/Coal Consumption at 4.08 4.69 5.40 6.21 6.83

85%
Wages & Salary at 60% 5.62 6.18 6.80 7.47 8.22

Selling & adminstrative Expenses 80% 2.04 2.44 2.80 3.19 3.59

Interest on working Capital 0.33 0.33 0.33 0.33 0.33

Repair & maintenance 2.23 2.67 3.07 3.49 2.81

Packaging 3.19 3.82 3.50 2.69 2.81

Total Variable & Semi Variable Exp 53.49 62.37 70.85 79.53 88.43

Contribution 12.08 14.24 17.01 20.33 24.15

Fixed & Semi Fixed Expenses

Electricity Exp/Coal Consumption at 0.72 0.83 0.95 1.10 1.20

15%
Wages & Salary at 40% 3.74 4.12 4.53 4.98 5.48

56 | P a g e
Interest on Term Loan 0.64 0.56 0.41 0.25 0.09

Depreciation 1.25 1.06 0.91 0.78 0.67

Selling & Administrative Expenses 20% 0.51 0.61 0.70 0.80 0.90

Rent 3.00 3.30 3.63 3.99 4.39

Total Fixed Expenses 9.86 10.49 11.13 11.89 12.73

Capacity Utilization 50% 55% 60% 65% 70%

OPERATING PROFIT 2.22 3.75 5.88 8.44 11.42

BREAK EVEN POINT 41% 41% 39% 38% 37%

BREAK EVEN SALES 53.53 56.42 57.48 58.41 59.34

5.2 PROJECTREPORT FOR PASTA MANUFACTRING

5.2.1 PRODUCT INTRODUCTION:

Introduction
Pasta refers to the traditional Italian cuisine's staple food that is made using dough,
water, eggs, vegetables, and oil. The dough is kneaded into different kinds, some of
which are known as penne, spaghetti, farfalle, barbine, fettuccine, etc. The pasta type
is determined by the size and shape of the holes in the die.

 The pasta dough is forced through holes between 0.8-0.5 mm in diameter to

produce vermicelli and capellini. Then the cutting machine slices the pasta into
10 inch (250 mm) lengths and coils it into curls. Spaghetti varies in diameter
from 1.5-2.5 mm and is left straight.

 On a separate unit, tortellini (filled pasta rings) are made. From a roll of
dough, the computer cuts tiny circles.On the circle of dough, a bucket of ricotta
cheese mixture drops a pre-measured volume of cheese. The dough is then
folded over and a circle is formed by connecting the two ends.

 Pre-measured amounts of cheese filling are dropped on a sheet of pasta at

pre-measured intervals to produce ravioli (filled pasta squares). As it passes
57 | P a g e
 along a conveyer belt, another sheet of pasta is put over this sheet. The two
layers then move into pre-measured squares under a cutting machine that
perforates the pasta.

In Penne Pasta, the high carbohydrate content provides the body with glucose that is
the key fuel for the brain and muscles. It is low in cholesterol and sodium. The whole
grain pasta offers a high nutritional value, which makes it more popular. In addition to
this, the form of sauce added will undoubtedly impact the nutritional value of the
meal.While pasta items were first introduced in Italy in the 13th century, it has only
been possible to manufacture efficient production equipment and high-quality
ingredients since the 20th century. Today, most pasta is processed by continuous
high-capacity extruders operating on the principle of auger extrusion, where kneading
and extrusion are carried out in a single operation.Pasta processing types includes dry
macaroni, noodles, and spaghetti.

5.2.2 MARKET POTENTIAL

Indian Pasta Market: Industry Dynamics, Share, Scale, Growth, Potential and
Forecast 2018- 2023,' India's pasta market reached a sales value of US$ 286.6
million in 2017, showing a CAGR of 17.1% in 2010-2017. In 2020, revenue in the
pasta segment is forecast to hit 11,881 million US dollars. The market is expected
to rise by 3.8 per cent annually (CAGR 2020-2025).

In 2020, the average per capita intake will stand at 6.5 kg. Rising urbanization,
changing lifestyles and increasing demand for ready-to-eat items are the primary
factors increasing the growth of the pasta market in India. In addition, a growing rate
of jobs for women, combined with rising disposable incomes, is also affecting the
sector.In addition, health-conscious customers are calling for food items with healthy
ingredients, which has contributed to an increase in the market for whole wheat
pasta. The market has been segmented into dry pasta, instant pasta and fresh
pasta on the basis of its form. Currently, the Indian pasta industry dominates dry
pasta, retaining much of the revenue from the market share.

58 | P a g e
5.2.3 RAW MATERIAL

The main raw materials are wheat flour or Maida and starch. Additionally, one
would need sugar, common salt, spices, garlic, ginger, Sodium Bicarbonate, etc.to
make a complete dish with veggies. A combination of water and semolina flour
makes pasta. Semolina is a coarse-ground flour of durum wheat from the middle,
or endosperm, amber-colored high protein hard wheat that is primarily grown for
pasta production. Semolina flour is quickly digested with a lower starch content and
a higher protein content than all-purpose flour.To produce some pasta,
rougher granulations of other high-quality hard wheat, is also used. Before being
delivered to pasta plants, the semolina and farina flour are fortified with B-vitamins
and iron.

Eggs, for color or richness, are often applied to the mixture. It is stipulated by federal
requirements that egg Pasta contain at least 5.5% egg solids.For color and taste,
vegetable juices can also be added, such as spinach, beet, tomato, and carrot. The
addition of herbs and spices, including garlic, basil, and thyme, has become popular
in recent years.

5.2.3.1 Wheat Flour/Maida

Semolina and all types of flour are used to make Noodles or pasta, but soft white
wheat flour is also preferred. The Pastaare elastic and chewy when cooked if solid,
high-protein flour is used. Maida is a white flour made of wheat from the Indian
subcontinent. Finely milled, polished and bleached without any bran, it closely
resembles cake flour. Maida is commonly used to make fast foods- noodles, pasta,
baked goods such as pastries, bread, sweets of different varieties, and traditional
flatbreads.

59 | P a g e
5.2.3.2 Starch

Pastas are made from different legume starches such as large bean, pea, cowpea,
bean, and various tuber or root starches such as potato, sweet potato, cassava, and
a number of grain starches such as maize, wheat, sorghum, are made from coarse
grain starches.

5.2.3.3 Salt

In pasta, sodium chloride is a significant component. In Asian pasta, the addition of sodium
chloride at 2-3% level could improve noodle texture by strengthening and tightening the
gluten network to increase viscoelasticity

5.3.2.4 Oil

Olive oil adds fat and taste, making it more supple and easier to roll out the dough. The
texture of the pasta dough can be corrected with a little added water, rendering the dry
dough smoother.

5.2.4 Process Flow Chart

5.2.4.1 Kneading and Mixing

The first step is the process of wheat flour Semolina and water being mixed into the mixing
machine. Here, the dough is kneaded with water and is then filled with tissue producing
elastic properties of the flour at a temperature of 20 to 30 Celsius.

5.2.4.2 Extrusion

Once the wheat flour, semolina with water, has been uniformly mixed, a stiff dough has
formed that pass through die under high pressure. A wide variety of pasta can be produced
by adjusting the shape of the die. During extrusion, a constant movement of screws that
causes pressure and friction against the wall of the chamber raises the temperature inside
60 | P a g e
the extrusion chamber. They maintain the chamber temperature within 50ºC the water of
20–the temperature is being circulated in water jackets around the extrusion cylinder and
head just to prevent damage to the gluten network, and to achieve good cooking in the
finished product. Immediately after coming from die a blast of hot air is allowed to pass
through to minimize strands sticking together before entering the pre-dryer.

5.2.4.3 Drying

The drying time will be important because when the pasta is too dried, it will break down
and the risk of spoilage will rise if it is dried too slowly. The amount of oxygen is often
regulated in the tank and laboratory technicians also test salmonella and other bacteria.
During the drying process, it is also important to treat the pasta carefully. Spaghetti is
one of the most delicate Pasta and hangs well above the ground.

5.2.4.4 Packaging

Fresh pasta is folded into transparent plastic containers in pre-measured quantities. As the
containers pass along a transport belt, each container is covered by a plastic sheet and
hot- pressed. At the same time, a tube sucks the container's air and replaces it for the
shelf-life of the product with a combination of carbon dioxide and nitrogen. At the top of the
containers are labels that list the type of Pasta, nutritional details, cooking instructions, and
date of expiration.

61 | P a g e
 Mixing of Ingredient

Kneading & Rolling

Extrusion

Dewatering

Packaging

5.2.5 BASIS & PRESUMPTIONS

 Production Capacity of Pasta is 50 kg per hr. First year, Capacity has been
taken @ 70%.
 Working shift of 8 hours per day has been considered.
 Raw Material stock is for 15 days and Finished goods Closing Stock has
been taken for 15 days.
 Credit period to Sundry Debtors has been given for 15 day
 Credit period by the Sundry Creditors has been provided for 7 days.
 Depreciation and Income tax has been taken as per the Income tax Act.
 Interest on working Capital Loan and Term loan has been taken at 11%.
 Salary and wages rates are taken as per the Current Market Scenario.
 Power Consumption has been taken at 8 KW.
 Increase in sales and raw material costing has been taken @ 5% on a yearly
basis.
62 | P a g e
5.2.6 CAPACITY, UTILIZATION, PRODUCTION & OUTPUT

COMPUTATION OF PRODUCTION OF PASTA

Items to be Manufactured
Pasta

Machine capacity Per hour 50 Kg

Total working Hours 8
Machine capacity Per Day 400 Kg
Working days in a month 25 Days
Working days per annum 300
Wastage Considered 2%
Raw material requirement 120000 Kg
Final Output per annum after wastage 117600 Kg
Final Product to be packed in 1 kg packet
Number of packets per annum 117600 1 Kg Packet

Production of Pasta
Production CapacityKG
1st year 70% 82,320
2nd year 75% 88,200
3rd year 80% 94,080
4th year 85% 99,960
5th year 90% 1,05,840

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 Raw Material Cost Year

Capacity Rate (per Kg) Amount (Rs. in

Utilisation lacs)

1st year 70% 18.00 15.12

2nd year 75% 19.00 17.10

3rd year 80% 20.00 19.20

4th year 85% 21.00 21.42

5th year 90% 22.00 23.76

COMPUTATION OF SALE

Particulars 1st year 2nd year 3rd year 4th year 5th year
Op Stock - 4,116 4,410 4,704 4,998

Production 82,320 88,200 94,080 99,960 1,05,840

Less: Closing Stock 4,116 4,410 4,704 4,998 5,292
Net Sale 78,204 87,906 93,786 99,666 1,05,546
Sale price per 50.00 53.00 56.00 59.00 62.00
packet
Sales (in Lacs) 39.10 46.59 52.52 58.80 65.44

5.2.7 PREMISES / INFRASTRUCTURE

The approximate total area required for complete factory setup is 2000-2500 Sq. ft.
for smooth production including storage area. It is expected that the premises will be on
rental.

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5.2.8 MACHINERY & EQUIPMENTS

Machine Name Description Machine Image.

Vertical type This machine is used
powder mixer
for mixing the
ingredients required to
make Pasta.

Dough mixer With a rotating

blade type
bowl in a Spiral
mixer the spinning
motion imitates hand
kneading and rolling
motions and gently
mixes Pasta dough.

Extruder An extruder for

pasta is a
machine to make
various types
of pasta by
squeezing pasta
dough through dies. By
By modifying die pasta die,
various pasta can be
manufactured.
Dryer machine The Dryer machine is
used for
remove the execs
water from
the steamed Pasta.

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 Pasta packaging Used for packaging
machine the Pasta
for marketing. It is
also a type of
Flow
Wrap Machine that
packs the
raw Pasta inside the
pouch.
Material These equipments
Handling are used for handling
Equipment’s of various materials in
the plant.

Machine Unit Rate Price

Vertical type powder mixer 1 25000 25000

Dough mixer blade type

1 33000 33000
(50 Kg/hr)

Extruder 1 450000 450000

Dryer machine 1 300000 300000
Pasta Packaging machine 1 180000 180000

Material handling
- 150000 150000
equipment’s

5.2.9 MISCELLANEOUS FIXED ASSETS

 Water Supply Arrangements

 Furniture & Fixtures
 Computers & Printers

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5.2.10 TOTAL COST OF PROJECT

COST OF PROJECT (in Lacs)

PARTICULARS Amount

Land & Building Owned/Rented

Plant & Machinery 11.38
Miscellaneous Assets 1.00
Working capital 3.89
Total 16.27

5.2.11 MEANS OF FINANCE

MEANS OF FINANCE

PARTICULARS AMOUNT
Own Contribution (min 10%) 1.63
Subsidy @35%(Max. Rs 10 Lac) 4.33
Term Loan @ 55% 6.81
Working Capital (Bank Finance) 3.50
Total 16.27

5.2.12 TERM LOAN: Term loan of Rs. 6.81 Lakh is required for project cost ofRs.
16.27 Lakh

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5.2.13 TERM LOAN REPAYMENT & INTEREST SCHEDULE

REPAYMENT SCHEDULE OF TERM LOAN

Interest 11.00%
Closing
Year Particulars Amount Addition Total Interest Repayme Balance
nt
1st Opening Balance

1st month - 6.81 6.81 - - 6.81

2nd month 6.81 - 6.81 0.06 - 6.81

3rd month 6.81 - 6.81 0.06 - 6.81

4th month 6.81 - 6.81 0.06 6.81

5th month 6.81 - 6.81 0.06 6.81

6th month 6.81 - 6.81 0.06 6.81

7th month 6.81 - 6.81 0.06 0.13 6.68

8th month 6.68 - 6.68 0.06 0.13 6.56

9th month 6.56 - 6.56 0.06 0.13 6.43

10th month 6.43 - 6.43 0.06 0.13 6.30

11th month 6.30 - 6.30 0.06 0.13 6.18

12th month 6.18 - 6.18 0.06 0.13 6.05

0.67 0.76
2nd Opening Balance

1st month 6.05 - 6.05 0.06 0.13 5.93

2nd month 5.93 - 5.93 0.05 0.13 5.80

3rd month 5.80 - 5.80 0.05 0.13 5.67

4th month 5.67 - 5.67 0.05 0.13 5.55

5th month 5.55 - 5.55 0.05 0.13 5.42

6th month 5.42 - 5.42 0.05 0.13 5.30

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 7th month 5.30 - 5.30 0.05 0.13 5.17

8th month 5.17 - 5.17 0.05 0.13 5.04

9th month 5.04 - 5.04 0.05 0.13 4.92

10th month 4.92 - 4.92 0.05 0.13 4.79

11th month 4.79 - 4.79 0.04 0.13 4.67

12th month 4.67 - 4.67 0.04 0.13 4.54

0.59 1.51
3rd Opening Balance

1st month 4.54 - 4. 54 0.04 0.13 4.41

2nd month 4.41 - 4.41 0.04 0.13 4.29

3rd month 4.29 - 4.29 0.04 0.13 4.16

4th month 4.16 - 4.16 0.04 0.13 4.03

5th month 4.03 - 4.03 0.04 0.13 3.91

6th month 3.91 - 3.91 0.04 0.13 3.78

7th month 3.78 - 3.78 0.03 0.13 3.66

8th month 3.66 - 3.66 0.03 0.13 3.53

9th month 3.53 - 3.53 0.03 0.13 3.40

10th month 3.40 - 3.40 0.03 0.13 3.28

11th month 3.28 - 3.28 0.03 0.13 3.15

12th month 3.15 - 3.15 0.03 0.13 3.03

0.42 1.51
4th Opening Balance

1st month 3.03 - 3.03 0.03 0.13 2.90

2nd month 2.90 - 2.90 0.03 0.13 2.77

3rd month 2.77 - 2.77 0.03 0.13 2.65

4th month 2.65 - 2.65 0.02 0.13 2.52

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 5th month 2.52 - 2.52 0.02 0.13 2.40

6th month 2.40 - 2.40 0.02 0.13 2.27

7th month 2.27 - 2.27 0.02 0.13 2.14

8th month 2.14 - 2.14 0.02 0.13 2.02

9th month 2.02 - 2.02 0.02 0.13 1.89

10th month 1.89 - 1.89 0.02 0.13 1.77

11th month 1.77 - 1. 77 0.02 0.13 1.64

12th month 1.64 - 1.64 0.02 0.13 1.51
0.26 1.51
th
5 Opening Balance

1st month 1.51 - 1.51 0.01 0.13 1.39

2nd month 1.39 - 1.39 0.01 0.13 1.26

3rd month 1.26 - 1.26 0.01 0.13 1.13

4th month 1.13 - 1.13 0.01 0.13 1.01

5th month 1.01 - 1.01 0.01 0.13 0.88

6th month 0.88 - 0.88 0.01 0.13 0.76

7th month 0.76 - 0.76 0.01 0.13 0.63

8th month 0.63 - 0.63 0.01 0.13 0.50

9th month 0.50 - 0.50 0.00 0.13 0.38

10th month 0.38 - 0.38 0.00 0.13 0.25

11th month 0.25 - 0.25 0.00 0.13 0.13

12th month 0.13 - 0.13 0.00 0.13 -

0.09 1.51
DOOR TO DOOR 60 MONTHS
MORATORIUM
PERIOD 6 MONTHS
REPAYMENT PERIOD 54 MONTHS

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5.2.14 WORKING CAPITAL CALCULATIONS

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Finished Goods
1.53 1.72 1.90 2.10 2.31

Raw Material
0.76 0.86 0.96 1.07 1.19
Closing Stock 2.28 2.57 2.86 3.17 3.50

COMPUTATION OF WORKING CAPITAL REQUIREMENT

TRADITIONAL METHOD (in Lacs)
Particulars Amount Own Margin Bank Finance
Finished Goods & Raw 2.28
Material
Less : Creditors 0.35
Paid stock 1.93 10% 0.19 90% 1.74
Sundry Debtors 1.96 10% 0.20 90% 1.76
3.88 0.39 3.50
MPBF 3.50
WORKING CAPITAL LIMIT DEMAND ( from Bank) 3.50
Working Capital Margin 0.39

5.2.15 SALARY & WAGES

BREAK UP OF LABOUR CHARGES

Particulars Wages No of Total

Rs. per Month Employees Salary

Machine Operator 15,000 1 15,000

Supervisor 20,000 1 20,000
Skilled (in thousand rupees) 12,000 2 24,000
Unskilled (in thousand rupees) 8,500 2 17,000
Total salary per month 76,000
Total annual labour charges (in lacs) 9.12

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 BREAK UP OF STAFF SALARY CHARGES

Particulars Salary No of Employees Total

Rs. per Month Salary
Administrative Staff 6,000 2 12,000
Manager 15,000 1 15,000
Accountant 12,000 1 12,000
Total salary per month 39,000
Total annual Staff charges (in lacs) 4.68

5.2.16 POWER REQUIREMENT

UTILITY CHARGES (PER MONTH)

Particulars value Description

Power connection required 8 KWH

consumption per day 64 units

Consumption per month 1,600 units

Rate per Unit 10 Rs.

power Bill per month 16,000 Rs.

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5.2.17 DEPRECIATION CALCULATION

COMPUTATION OF DEPRECIATION (in Lacs)

Description Plant & Machinery Miss. Assets TOTAL

Rate of Depreciation 15.00% 10.00%
Opening Balance - --

Addition 11.38 1.00 12.38

Total 11.38 1.00 12.38
Less : Depreciation 1.71 0.10 1.81
WDV at end of Year 9.67 0.90 10.57
Additions During The Year - - -
Total 9.67 0.90 10.57
Less : Depreciation 1.45 0.09 1.54
WDV at end of Year 8.22 0.81 9.03
Additions During The Year - - -
Total 8.22 0.81 9.03
Less : Depreciation 1.23 0.08 1.31
WDV at end of Year 6.99 0.73 7.72
Additions During The Year - - -
Total 6.99 0.73 7.72
Less : Depreciation 1.05 0.07 1.12
WDV at end of Year 5.94 0.66 6.60
Additions During The Year - - -
Total 5.94 0.66 6.60
Less : Depreciation 0.89 0.07 0.96
WDV at end of Year 5.05 0.59 5.64

5.2.18 REPAIR & MAINTENANCE: Repair & Maintenance is 3.0% of Gross Sale.

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5.2.19 PROJECTIONS OF PROFITABILITY ANALYSIS

PROJECTED PROFITABILITY STATEMENT (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th Year 5th year
5th year
Capacity Utilisation % 70% 75% 80% 85% 90%
SALES
Gross Sale
Pasta 39.10 46.59 52.52 58.80 65.44
Total 39.10 46.59 52.52 58.80 65.44
COST OF SALES
Raw Material Consumed 15.12 17.10 19.20 21.42 23.76
Electricity Expenses 1.92 2.21 2.54 2.92 3.21
Depreciation 1.81 1.54 1.31 1.12 0.96
Wages & labour 9.12 10.49 11.54 12.69 13.96
Repair & maintenance 1.17 1.40 1.58 1.76 1.96
Packaging 1.37 1.63 1.84 2.06 2.29
Cost of Production 30.51 34.37 38.00 41.97 46.14
Add: Opening Stock /WIP - 1.53 1.72 1.90 2.10
Less: Closing Stock /WIP 1.53 1.72 1.90 2.10 2.31
Cost of Sales 28.98 34.17 37.82 41.78 45.93
GROSS PROFIT 10.12 12.42 14.70 17.03 19.51
25.88% 26.65% 27.99% 28.96% 29.81%
Salary to Staff 4.68 5.62 6.63 7.42 8.16
Interest on Term Loan 0.67 0.59 0.42 0.26 0.09
Interest on working Capital 0.39 0.39 0.39 0.39 0.39
Rent 2.40 2.64 2.90 3.19 3.51
selling & adm exp 0.78 1.02 1.05 1.18 1.31
TOTAL 8.92 10.26 11.39 12.43 13.46
NET PROFIT 1.20 2.16 3.31 4.59 6.04
3.08% 4.64% 6.30% 7.81% 9.23%
Taxation - - - - 0.33
PROFIT (After Tax) 1.20 2.16 3.31 4.59 5.71

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5.2.20 BREAK EVEN POINT ANALYSIS

BREAK EVEN POINT ANALYSIS

Year I II III IV V

Net Sales & Other Income 39.10 46.59 52.52 58.80 65.44
Less : Op. WIP Goods - 1.53 1.72 1.90 2.10
Add : Cl. WIP Goods 1.53 1.72 1.90 2.10 2.31

Total Sales 40.63 46.78 52.70 59.00 65.65

Variable & Semi Variable Exp.

Raw Material Consumed 15.12 17.10 19.20 21.42 23.76
Electricity Exp/Coal Consumption 1.63 1.88 2.16 2.48 2.73
at 85%
Wages & Salary at 60% 8.28 9.66 10.90 12.07 13.27
Selling & adminstrative Expenses 0.63 0.82 0.84 0.94 1.05
80%
Interest on working Capital 0.385 0.385 0.385 0.385 0.385
Repair & maintenance 1.17 1.40 1.58 1.76 1.96
Packaging 1.37 1.63 1.84 2.06 2.29
Total Variable & Semi Variable 28.58 32.87 36.90 41.12 45.45
Exp
Contribution 12.04 13.91 15.81 17.88 20.20

Fixed & Semi Fixed Expenses

Electricity Exp/Coal Consumption 0.29 0.33 0.38 0.44 0.48
at 15%
Wages & Salary at 40% 5.52 6.44 7.27 8.05 8.85
Interest on Term Loan 0.67 0.59 0.42 0.26 0.09
Depreciation 1.81 1.54 1.31 1.12 0.96
Selling & adminstrative Expenses 0.16 0.20 0.21 0.24 0.26
20%
Rent 2.40 2.64 2.90 3.19 3.51
Total Fixed Expenses 10.84 11.75 12.50 13.29 14.15

Capacity Utilization 70% 75% 80% 85% 90%

OPERATING PROFIT 1.20 2.16 3.31 4.59 6.04
BREAK EVEN POINT 63% 63% 63% 63% 63%
BREAK EVEN SALES 36.57 39.51 41.67 43.85 46.00

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5.2.21 PROJECTED BALANCE SHEET

PROJECTED BALANCE SHEET (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Liabilities

Capital
opening balance 5.76 6.32 7.13 8.23
Add:- Own Capital 1.63
Add:- Retained Profit 1.20 2.16 3.31 4.59 5.71
Less:- Drawings 1.40 1.60 2.50 3.50 4.50
Subsidy/grant 4.33
Closing Balance 5.76 6.32 7.13 8.23 9.44
Term Loan 6.05 4.54 3.03 1.51 -
Working Capital Limit 3.50 3.50 3.50 3.50 3.50
Sundry Creditors 0.35 0.40 0.45 0.50 0.55
Provisions & Other Liab 0.40 0.50 0.60 0.72 0.86
TOTAL : 16.07 15.26 14.71 14.46 14.35
Assets
Fixed Assets ( Gross) 12.38 12.38 12.38 12.38 12.38
Gross Dep. 1.81 3.35 4.66 5.78 6.74
Net Fixed Assets 10.57 9.03 7.72 6.60 5.64

Current Assets
Sundry Debtors 1.96 2.33 2.63 2.94 3.27
Stock in Hand 2.28 2.57 2.86 3.17 3.50
Cash and Bank 1.26 1.33 1.50 1.75 1.95
TOTAL : 16.07 15.26 14.71 14.46 14.35

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5.2.22 CASH FLOW STATEMENT

PROJECTED CASH FLOW STATEMENT (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
SOURCES OF FUND

Own Margin 1.63

Net Profit 1.20 2.16 3.31 4.59 6.04
Depriciation & Exp. W/off 1.81 1.54 1.31 1.12 0.96
Increase in Cash Credit 3.50 - - - -
Increase In Term Loan 6.81 - - - -
Increase in Creditors 0.35 0.05 0.05 0.05 0.05
Increase in Provisions & Oth lib 0.40 0.10 0.10 0.12 0.14
Sunsidy/grant 4.33
TOTAL : 20.03 3.85 4.77 5.89 7.20
APPLICATION OF FUND
Increase in Fixed Assets 12.38
Increase in Stock 2.28 0.29 0.29 0.31 0.33
Increase in Debtors 1.96 0.37 0.30 0.31 0.33
Repayment of Term Loan 0.76 1.51 1.51 1.51 1.51

Drawings 1.40 1.60 2.50 3.50 4.50

Taxation - - - - 0.33
TOTAL : 18.77 3.78 4.60 5.64 7.00

Opening Cash & Bank Balance - 1.26 1.33 1.50 1.75

Add : Surplus 1.26 0.07 0.18 0.25 0.19
Closing Cash & Bank Balance 1.26 1.33 1.50 1.75 1.95

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5.2.23 DEBT SERVICE COVERAGE RATIO

CALCULATION OF D.S.C.R

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

CASH ACCRUALS 3.01 3.70 4.62 5.71 6.67

Interest on Term Loan 0.67 0.59 0.42 0.26 0.09

Total 3.68 4.29 5.05 5.97 6.76

REPAYMENT

Instalment of Term Loan 0.76 1.51 1.51 1.51 1.51

Interest on Term Loan 0.67 0.59 0.42 0.26 0.09

Total 1.43 2.10 1.94 1.77 1.60

DEBT SERVICE COVERAGE RATIO 2.58 2.04 2.61 3.37 4.21

AVERAGE D.S.C.R. 2.96

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5.3 Details of Test facilities available in India

Food testing labs in India function within the aegis of the Food Safety and Standards
Act, 2006 (FSS Act) that has consolidated the laws relating to food and established the
Food Safety and Standards Authority of India (FSSAI). The FSSAI lays down standards
along scientific lines for articles of food and regulates their manufacture, storage,
distribution, sale and import, and ensures availability of safe and wholesome food for
human consumption. The FSSAI notifies food testing labs accredited by NABL for the
purposes of carrying out analysis of food samples. The FSSAI establishes or recognises
one or more referral food laboratories to carry out its entrusted functions.

There are 220 Food tesing labs function in India under FSSA, 2006.
Details of Food testing labs and products can be viewed iin the below link
https://fssai.gov.in/cms/food-laboratories.php

5.4 Details of raw Materials Suppliers

Raw Materials are locally available

5.5 Details of Machinery Suppliers

1. VMW AdvanceEngineering
F-44, Sector 8, Sector 8, Noida - 201301, Dist. Gautam Buddha Nagar, Noida City,
Noida – 201301 Ph: 9312132280, 9319305080
2. M/s.Saraswathi Industries, 41-A, LGB Nagar, Krishnapuram, Saravanampatty,
Coimbatore, Tamil Nadu, IndiaPh. 0422 253 6283, Mob:9843712777
3. M/s. Technofeeder Private Limited, No.3, 2ndLakshmikanthan Nagar,
Radhakrishnan Nagar, Nemilicherry, Chennai, Tamilnadu – 600042. Ph:
9840691671.
4. M/s. Rising Industries
Teghoria, Loknath Mandir, Jhowtala, Ghosh Dutta Para,Sukantapally, Kolkata -
700157, West Bengal, India.

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6 SCHEMES AND CONSULTANCY SERVICES

6.1 Existing schemes available and their details

a. Udyam Registration
1. Any person who intends to establish a micro, small or medium enterprise may file
Udyam Registration online in the Udyam Registration portal
(https://udyamregistration.gov.in), based on self-declaration with no requirement
to upload documents, papers, certificates or proof.

2. On registration, an enterprise (referred to as - Udyam in the Udyam Registration

portal) will be assigned a permanent identity number to be known as - Udyam
Registration Number.

3. An e-certificate, namely, - Udyam Registration Certificate shall be issued on

completion of the registration process.

4. Registration is free of cost and paperless.

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 b. Credit Related Schemes

i. Prime Ministers Employment Generation Programme (PMEGP)

To encourage new entrepreneurs to set up micro-enterprises through credit-linked

subsidy support. Margin Money subsidy on Bank Loan ranges from 15% to 35% for
projects up to Rs. 25 lakhs in manufacturing and Rs. 10 lakhs in service sector. The
maximum cost of projects is Rs.25.00 lakh in the manufacturing sector and Rs.10.00
lakh in the service sector. Scheme applicable for any individual above 18 years of
age, SHGs, Charitable trusts, Registered Societies etc.

ii. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

The objective of this scheme is to provide Collateral free loan upto a limit of Rs. 200
lakhs to new as well as existing Micro & Small Enterprises. The corpus of CGTMSE is
contributed by Government of India and SIDBI.

iii. Credit Linked Capital Subsidy-Technology Up-gradation Scheme (CLCS -TUS)

The objective of this scheme is to facilitate MSMEs through institutional finance for
induction of well- established and proven technologies in the specific sub-
sector/products approved under the scheme. Upfront subsidy of 15% on institutional
Credit up to Rs.1.0 crore (i.e. subsidy cap of Rs.15.00 lakhs) for identified sectors/ sub
sectors/ technologies is provided in the scheme.

c. Infrastructure Support to Develop Clusters - Micro & Small Enterprises

Cluster Development Programme (MSE - CDP)

The scheme provides financial assistance for establishment of Common Facility

Centres (CFCs)/ establishment / up gradation of Industrial area /
Estate/Flatted/Factory Complex; [Infrastructure Development (ID) projects] Marketing
Hubs / Exhibition Centres by Associations; Thematic Interventions and Support to
State Innovative Cluster Development Programme for enhancing the productivity and
competitiveness of Micro and Small Enterprises. For establishment of Common
Facility Centers, the GoI grant will be restricted to 70% of the cost of Project of
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maximum Rs.20.00 crore. GoI grant will be 90% for CFCs in NE & Hill States, Islands
territories, Aspirational Districts / LWE affected Districts, Clusters with more than
50% (a) micro / village, (b) women owned, (c) SC/ST units. For Infrastructure
Development, the GoI grant will be restricted to 60% of the cost of Project (Rs.10.00
crore for Industrial Estate & Rs.15.00 crore for Flatted Factory Complex). GoI grant
will be 80% for Projects in NE & Hilly States, Island territories, Aspirational Districts /
LWE affected Districts, industrial areas / estates / Flatted Factory Complex with more
than 50% (a) micro
/ village, (b) women owned (c) SC/ST units.

d. Technology Up-gradation and Competitiveness Enhancing Schemes for

MSMEs

i. Design Clinic Scheme: The objective of Design Clinic Scheme is to promote

innovations in designing of the product and enhance the value addition of local
products and services. There is a provision of financial assistance of Rs.15 lakhs (GoI:
Units::75:25) for individual or up to 3 Micro units and Rs.25 lakhs (GoI: Units::75:25)
for more than 3 Micro units. For Small & Medium units, it is Rs..25 lakhs (GoI: Units::
60:40) for individual or up to 3 Units and Rs.40 lakhs (GoI:Units::60:40) for more than 3
Units.

ii. Lean Manufacturing Competitiveness Scheme (LMCS): The Lean

Manufacturing Competitiveness Scheme (LMCS) is an initiative to enhance the
Competitiveness of the manufacturing sector by imbibing a culture of continuous
improvement in order to increase the overall productivity of MSMEs through
application of various Lean Techniques to reduce waste and increase productivity.
Financial Assistance for Lean Intervention in MSMEs through Lean Consultants up to
Rs.36 lakhs (maximum) per mini cluster of 10 units for a period of 18 months or till
completion (GoI:Units::80:20; Rs. 28.8 lakhs: Rs. 7.2 lakhs).

iii. Financial Support to MSMEs in ZED Certification Scheme: The objectives of

the scheme include promotion of Zero Defect and Zero Effect (ZED) manufacturing
amongst MSMEs so as to promote adaptation of Quality tools/systems and Energy
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Efficient manufacturing, encourage to constantly up-grade their quality standards in
products and processes without impacting the environment.

iv. Building Awareness on Intellectual Property Rights (IPRs): The objective is to

enhance awareness of MSMEs about Intellectual Property Rights (IPRs) and to take
measure for the protecting their ideas and business strategies through Awareness
Programmes/Seminars, Workshops, Reimbursement for registration of IP,
International Co-operation & setting-up IP facilitation centre across the country.

v. Entrepreneurial & Management development of MSEs through Incubators:

The main objective of the scheme is to promote & support untapped creativity of
individual and to promote adoption of latest technologies in manufacturing as well as
Knowledge based innovative MSMEs (ventures) that seek the validation of their ideas
at the proof of concept level. The scheme also supports engagement with Enablers
who will advise such MSMEs in expanding the business by supporting them in design,
strategy and execution. The Enablers will play a pivotal role and would be integral
part of the business development. Host Institutes (HIs) shall be provided grant of up to
Rs. 1.00 Cr. for procurement and installation of relevant plant and machines including
hardware and software etc. in BI in order to strengthen the technology related R&D
activities and common facilities for incubates of BI. Grant in Aid to HI for developing
and nurturing the ideas up to max. Rs. 15.00 lakh per idea. For students, the
contribution will be Nil and for MSMEs/others, contribution will be 15 % of total project
cost.

e. Procurement and Marketing Support (PMS) to MSMEs

The objective is to create awareness and educate the MSMEs about various
marketing strategies and enhancing marketability of their products/services.
Assistance is available for a) Participation of Individual MSEs in domestic trade
fairs/exhibition across the country b) Organizing/Participation in trade fairs/exhibitions
(Regional/ National/International) by the Ministry/ Office of DC (MSME)/Government
organizations c) Capacity building of MSMEs in modern packaging technique

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 d) Development of Marketing Haats e) International/National Workshops/ Seminars f)
Vendor Development Programmes g) Awareness Programme.

Public Procurement Policy : To provide marketing support to Micro and Small

Enterprises (MSEs), Ministry of MSME has notified the Public Procurement Policy for
Micro and Small Enterprises (MSEs) : 2012 under the MSMED Act, 2006 which is
effective from 1st April 2012 and has become mandatory w. e. f. April 2015..
Amendment to this policy mandates 25% annual procurement from MSEs by Central
Ministries /Departments/Central Public Sector Enterprises (CPSEs) including 4% from
MSEs owned by SC/ST and 3% from MSEs owned by Women entrepreneurs.

More details about the schemes available at the website :www.dcmsme.gov.in

6.2 Other Schemes

a. Emergency Credit Line Guarantee Scheme (ECLGS)

The ECLGS aims to provide 100 percent guaranteed coverage to the banks, non-banking
financial institutions (NBFCs) and other lending institutions in order to enable them to
extend emergency credit to business entities that have suffered due to the Covid-19
pandemic and are struggling to meet their working capital requirements.It was unveiled as
part of the Rs 20 lakh crore comprehensive package announced by Finance Ministry on
13/05/2020, to aid Micro, Small and Medium Enterprises (MSMEs) sector in view of the
economic distress caused by the COVID-19 pandemic.

b. Pradhan Mantri MUDRA Yojana (PMMY)

Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Hon’ble Prime
Minister on April 8, 2015 for providing loans up to 10 lakh to the non-corporate, non-farm
small/micro enterprises. These loans are classified as MUDRA loans under PMMY. These
loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs.
The borrower can approach any of the lending institutions mentioned above or can apply
online through this portal www.udyamimitra.in . Under the aegis of PMMY, MUDRA has
created three products namely 'Shishu', 'Kishore' and 'Tarun' to signify the stage of growth
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/ development and funding needs of the beneficiary micro unit / entrepreneur and also
provide a reference point for the next phase of graduation / growth

6.3 Schemes From MInistry of Food Processing

Government initiatives for Food Processing Industry

100% Foreign Direct Investment in Processed Food Businesses With a view to promoting
strategic partnerships in the Indian food processing sector, the government has allowed
100% FDI in businesses dealing in processed foods. Indian brands can benefit from a
foreign player’s technology in manufacturing and processing. Food processing is also
recognised as one of the 25 areas of focus under Make in India, hence the automatic
approval route is open to foreign partners looking for investment in India’s food business.

a. PM Kisan Sampada Yojana

 This scheme is aimed at promoting entrepreneurs in setting up food processing

units, closer to agricultural areas.
 Development of cold storage facilities, specialised packaging units, warehousing
facilities, etc and other preservation facilities are eligible for grants under the
scheme.
 The scheme provides a grant in aid of 35% of the eligible project cost in most
states and 50% of the project cost in North-east and Himalayan states.
 The development of agricultural facilities under the scheme intends the benefits
investors, entrepreneurs, farmers, farmer organisations, and agriculture
cooperatives.

b. Creation of Mega Food Parks

 A mega food park is an integrated facility that provides for storage, processing.
Additionally, value additions to a large number of players in the food processing
industry. Under the Mega Food Park Scheme, the Government of India provides
financial assistance up to Rs. 50.00 Crore per Mega Food Park project.

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  Most food parks have the following services – tetra-packaging, food testing
laboratories, drying chambers for spices and agricultural produce, cold storage,
warehousing, packaging and printing facilities
 Thus, the food park provides financial incentives to investors. It also provides
convenience to processors and companies utilising its facilities, in addition to
generating employment and better services.

c. PM Formalization of Micro Food processing Enterprises

 This scheme aims at helping small micro-units engaged in the food processing
industry.
 Many businesses at the grass-root level such as chilli drying, spice packaging,
pickle, and papad making engage directly with farmers.
 Recognising the role of such micro-units, a 35% subsidy can be availed. It is by
such units on their project cost, up to a maximum of ₹10 lacs

6.4 Details of agencies who can provide guidance

i. Office of Development Commissioner(MSME), Ministry of Micro, Small and

Medium Enterprises (MSME), Govt. of India, Maulana Azad Road, Nirman Bhawan,
New Delhi - 110108 Tel: 011 -23022220/22221/22211/ 22209 / 22202 Fax : 011 -
23062315 /61726 / 61068 Web : www.dcmsme.gov.in
The Office of Development Commissioner (MSME) functions as an apex body
for formulating polices for the development of the sector MSME and is playing a very
constructive role for strengthening this vital sector through a network of 32 MSMEDIs,
27 Br. MSMEDIs, 4 MSME Testing Centre, 7 MSME Testing Stations, 18 MSME-
Technology Development Centre. To improve the productivity, competitiveness and
capacity building of MSMEs, the GOI has formulated /adopted polices and schemes
such as MSMED Act, 2006, CPPP for MSEs. MSE-CDP scheme, PMS, CLCSS,
Promotion of New Technology Centres under TCSP Scheme , etc.

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ii. CSIR-Central Food Technological Research Institute (CSIR-CFTRI),

CFTRI is one of the constituent laboratory under the aegis of the Council of Scientific and
Industrial Research (CSIR). It was established on 21 October 1950 in Mysore, Karnataka.
C.F.T.R.I. also has its resource centers in Hyderabad, Lucknow and Mumbai, rendering
technical assistance to numerous entrepreneurs. The institute has developed over 300
products, processes, and equipment types. It holds several patents and has published
findings in reputed journals. The institute develops technologies to increase efficiency and
reduce post-harvest losses, add convenience, increase export, find new sources of food
products, integrate human resources in food industries, reduce costs, and modernize.
CSIR-CFTRI has developed over 300 products, processes including equipment designs,
and most of these technologies have been released to over 4000 licensees for commercial
exploitation.

iii. National Institute of Food Technology,Entrepreneurship and Management

(NIFTEM)

NIFTEM is the brainchild of the Ministry of Food Processing Industries

(MoFPI)Government of India. MoFPI in its Vision document-2015, envisaged creation of a
world-class institution to cater to the various stakeholders such as entrepreneurs, food
processing industry, exporters, policy makers, government and existing institution.
NIFTEM will work actively for assisting in setting up food standards, businesses incubation
and can also include knowledge sharing. It would also be an apex institution

iv. The Indian Institute of Food Processing Technology (IIFPT)

IFPT is an educational institution functioning under the Ministry of Food Processing

Industries (MoFPI)[3] located at Thanjavur , Tamil Nadu. The Institute offers academic and
research programmes in the field of food processing technology. [4] The institute
has National Accreditation Board for Testing and Calibration Laboratories (NABL)
accredited food quality testing laboratory [5] which is also notified Food Safety and
Standards Authority of India (FSSAI) Referral Food Laboratory.[6] Food product
development laboratory, food microbiology laboratory, post harvest pest management

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laboratory, food processing incubation center, and food engineering laboratories are in its
main campus at Thanjavur. IIFPT is operating liaison offices at Guwahati,
Assam and Bathinda, Punjab . These liaison offices have facilities to give skill
development trainings, incubation and consultancy services to the farmers, entrepreneurs
and students in the field of value addition of agricultural produce and food processing
technologies. It was granted the Institute of National Importance status in 2021.

v. Agriculture and processed food production export Development Authority

(APEDA)

Agriculture and processed food production export Development Authority

(APEDA) is an apex body that promotes export trade of agricultural products in India. Set-
up by the ministry of Commerce and Industry, Government of India. APEDA is responsible
for export promotion of Fresh Fruits & Vegetables, Processed Food products, Livestock
products and Cereals. It provides the crucial interface between farmers, storehouses,
packers, exporters, surface transport, ports, Railways, Airways, all others engaged in
export trade and finally to the international market. Directly or indirectly, it offers services
that support farmers and exporters from different states in the country. It bridges the gap
between agricultural and processed food producers to reach to the exporters in
international markets.

vi. Food Industry Capacity & Skill Initiative (FICSI)

Food Industry Capacity & Skill Initiative (FICSI)—widely known as Food Processing
Sector Skill Council—is a Not-for-Profit Organization, registered under the Societies
Registration Act, 1860 and working under the aegis of Ministry of Skill Development
and Entrepreneurship. The organization is Promoted by the Federation of Indian
Chambers of Commerce and Industry (FICCI) with financial support by National Skill
Development Corporation (NSDC). FICSI has been granted the status of Awarding
Body by NCVET. FICSI has been set up as an autonomous industry-led body by
NSDC. It creates Occupational Standards and Qualification Packs, Develops
Training Materials and Tools, Conducts Train the Trainer Programs, Conducts Skill
Gap Studies and Assess and Certify trainees on the curriculum aligned to National

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Skills Qualification Framework (NSQF).As a skill council we accredit potential
training providers having training infrastructure as per our guidelines for
dissemination of training on our Qualification Packs. We are engaged in various skill
development initiatives of central/state Government & Ministers such as PMKVY,
GKRA, DDUGKY, ASAP, NULM, PMFME, B.Voc either as a project implementati on
agency or as an assessment agency.

vii. India Trade Promotion Organisation (ITPO)

India Trade Promotion Organisation (ITPO), headquartered at Pragati Maidan, is the

nodal agency of the Government of India under aegis of Ministry of Commerce and
Industry (India) for promoting country's external trade. ITPO is a Mini-Ratna Category-1
Central Public Sector Enterprise (CPSE)[7] with 100 percent shareholding of Government
of India.

viii. The Federation of Indian Export Organisations (FIEO)

The Federation of Indian Export Organisations represents the Indian entrepreneurs spirit
of enterprise in the global market, known popularly as "FIEO", this apex body of Indian
export promotion organizations was set up jointly by the Ministry of Commerce,
Government of India and private trade and industry in the year 1965. FIEO is thus a
partner of the Government of India in promoting India's exports.

7. REFERENCES

1. https://en.wikipedia.org/wiki/Food_extrusion
2. https://niftem.ac.in
3. https://www.iifpt.edu.in
4. https://commerce.gov.in/
5. https://foodprocessingindia.gov.in/
6. https://mofpi.gov.in/
7. https://www.grandviewresearch.com/industry-analysis/pasta-noodles-market
8. https://www.foodresearchlab.com
9. https://fssai.gov.in/
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 ANNEXURE

Machinery Quote

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