Ginger & Garlic Paste

Uploaded on : February 2019

Introduction

 

Ginger & garlic are important commercial crops cultivated throughout the country with major production in the states of Gujarat, Orissa, Maharashtra, Himachal Pradesh, Kerala, Haryana, Madhya Pradesh & Uttar Pradesh. Garlic is mainly used as a condiment in food preparations and is also used as carminative and gastric stimulant in many medicinal preparations. Processing of ginger is undertaken to dehydrate it and for preparing ginger candy. Ginger & garlic based products have wide applications in food processing as well as many other industries.

 

Objectives

 

The objective of the profiles is to encourage and assist prospective entrepreneurs in MSME sector in and guiding making them aware of the opportunities of this sector. It is also being developed by the Directorate of the Food Processing Industries, Government of West Bengal to help entrepreneurs with knowledge about raw materials availability, knowledge of market, source of technology and plant and machinery suppliers. M/s ITV Agro & Food Technologies Pvt. Ltd., New Delhi has helped in developing the project profile.

 

Raw Material Availability

 

Total production of spices in the country is estimated to be 5387092 MT / year out of which production in West Bengal is estimated to be 211128 MT/ year. Total production of ginger and garlic in the country is estimated to be 701990 MT and 1072400 MT respectively whereas production of ginger and garlic in West Bengal is estimated to be 94,417 tons and 40,000 ton respectively

 

Market Opportunities

 

Ginger and garlic are important commercial crops with versatile applications. As a condiment, ginger is used for flavouring many food products like tomato sauce or ketchup, salad dressing, meat sausages, gravies , pickles, curry dishes and so on. It is also used in many medicines as it help digestion and absorption of food and has antiseptic properties. Ginger and garlic-based products have very wide ranging applications in many industries like food processing, pharmaceutical , soft drink, meat canning, confectionary, tobacco processing etc. Total export of ginger and ginger products from India is estimated to be Rs. 20420.00 lacs / annum whereas export of garlic and garlic product is estimated to be Rs. 1415 lacs / annum.

 

Project Description

Product & ITS Uses

Many product can be manufactured from ginger and garlic like dehydrated ginger or garlic , ginger candy, garlic powder, ginger oil and oleoresins and so on. This note considers dehydration of ginger and garlic and manufacture of ginger candy. This activity can be taken up in many parts of the country including the West Bengal. However, this note considers WB as the preferred location in view of good market prospects.

Capacity

The proposed capacity of the plant is to process 90 MT / annum of ginger & 60 MT / annum of garlic.

Manufacturing Process

In case of dehydration of garlic cloves are separated manually and then dehydration is done in a drier at about 55-60° C temperature. As regards ginger, fresh ginger is soaked in water and washed and then outer skin is peeled off in a barrel drum. Skin peeling facilitates removal of moisture. Drying is done in the electrically-heated thermostatic-controlled drier. Drier is combined with steam heating arrangement. Drying temperature is in the range of 55-60C. Ginger, for producing candy, has to be rich in flavour, juice, fibreless and tender. After washing and peeling, ginger is cut in required sizes and boiled with small quantity of citric acid for about an hour under a pressure of 10 psig or for 6 hours under atmospheric pressure to improve its colour. Then the mixture is boiled with 30% sugar solution content (60 brix) and then small quantity of citric acid is added and the solution is boiled and kept till sugar penetrates in ginger . Finally it is boiled for about 5 minutes and the sugar solution is drained out and pieces of ginger are rolled in ground sugar, dried and packed. The process flow chart is as under:

Project Components & Cost

 

Land & Building

Land measuring around 250 sq. mtrs. with built up area of 200 sq. mtrs. shall be required. Land may cost Rs.1.25 lacs whereas cost of construction is assumed to be Rs.10.00l acs.

PLANT & MACHINERY

Requirement of machinery would depend upon the proposed production capacity. For dehydration or drying capacity of 90 tons per year of ginger and 60 tons annually, of garlic, following machine shall be needed:

Item	Qty	Price (Rs)
MS drier with thermostatic and arrangement for steam heating with all accessories and electrical	1	9,00,000/-
Skin peeling barrel drum with accessories	1	60,000/-
Baby boiler	1	2,10,000/-
SS steam jacketed kettle	1	1,50,000/-
SS steam jacketed kettle	1	1,80,000/-
SS utensils, weighing scales, aluminium trays, plastic tube, laboratory equipments etc.	1	15,00,000/-

Miscellaneous Assets

 

Other assets like furniture and fixtures, storage racks, working table, exhaust fans would cost about Rs. 1,80,000/-

 

Utilities

 

Power requirement shall be 30 HP whereas water requirement shall be 5000 ltrs. The cost of utilities is estimated at Rs. 3.00 lacs / annum.

 

Prel. & Pre Operative Expenses

 

Pre-production expenses like registration, establishment, administrative , and travelling expenses , market survey, trial runs, interest during implementation etc. would cost Rs. 2,40,000/-

 

Working Capital Assessment

 

The major requirement will be stocks of finished goods and receivables as can be seen from the estimates of first year.

 

Particulars	Period	Margin	Total	Bank	Promoters (Rs. in lacs)
Stock of Finished Goods	1 month	25%	5.63	4.22	1.41
Receivable	1 month	25%	7.42	5.56	1.86
Working expenses	1 month	100%	1.00	-	-
		Total	14.05	9.78	3.27

 

Project Cost & Means of Finance

 

Item	Amount (Rs. in lacs)
Land and Building	11.25
Plant and Machinery	15.00
Miscellaneous Assets	1.80
P & P Expenses	2.40
Contingencies @ 10% on Building and plant and machinery	2.62
Working capital margin	3.27
Total	36.34
Means of Finance
Promoters' contribution	14.53
Term loan from Bank / FI	21.81
Total	36.34
Debt Equity Ratio	1.5:1
Promoters contribution	40%

 

Financial assistance in the form of grant is available from the Ministry of Food Processing Industries, Govt. of India, towards expenditure on technical civil works and plant and machinery for eligible projects, subject to certain terms and conditions.

 

Projected Profitability

 

Production Capacity

 

The rated production capacity of the plant is 150 tons per year whereas actual capacity utilization is expected to be 60% and 75% during 1st year & 2nd year respectively.

 

Sales Revenue at 100%

 

Product	Qty (Tons)	Selling Price (Rs. / Ton)	Sales (Rs. in lacs)
Dehydrated Ginger	40	1,80,000	72.00
Ginger Candy	15	1,80,000	27.00
Dehydrated Garlic	20	2,50,000	50.00
Total			149.00

 

Raw Material Required at 100%

 

Product	Qty (Tons)	Rate (Rs. / Ton)	Value (Rs. in lacs)
Green Ginger	90	45,000	40.50
Garlic	60	81,000	48.0
Sugar	15	36,000	05.40
Citric Acid	-	-	0.54
Packing Material	-	-	7.20
		Total	101.64

 

Projected Profitability

 

			(Rs. in lacs)
S. No.	Particulars	1 st year	2 nd year
A.	Installed capacity	150 Tons
	Capacity Utilisation	60%	75%
	Sales Realisation	89.00	111.75
B.	Cost of Production
	Raw Materials & Packing material	60.96	76.20
	Utilities	1.80	2.25
	Salaries	3.60	4.50
	Stores and Spares	0.60	0.75
	Repairs and Maintenance	0.60	0.75
	Selling and Administrative Exp. @ 6%	5.34	6.67
	Total	72.90	91.12
	Profit before Interest & Depreciation	16.10	20.63
	Interest on Term Loan	1.57	1.96
	Interest on Working Capital	1.36	1.71
	Depreciation.	2.80	2.52
	Net Profit	10.36	14.44
	Income-tax @ 20%	3.10	4.33
	Profit after tax	7.26	10.11
	Cash Accruals	10.06	12.63
	Repayment of Term Loan	Nil	4.0

 

Break Even Point Analysis

 

S. No.	Particulars	Amount (Rs. in lacs)
(A)	Sales		111.75
(B)	Variable Costs
i.	Raw material and Packing Material	76.20
ii.	Utilities	2.25
iii.	Salaries	4.50
iv.	Stores and Spares	0.75
v.	Selling and admn. Exps (70%)	6.67
vi.	Interest on WC	1.71	94.08
(C)	Contribution (A) – (B)	17.67
(D)	Fixed Costs	7.25
(E)	Break Even Point	41%

 

Debt Service Coverage Ratio (DSCR)

   

Particulars	1st year	2nd year	3rd year
Cash Accruals	10.06	12.63	15.15
Interest on TL	1.57	1.96	1.81
Total (A)	11.63	14.49	16.96
Interest on TL	1.57	1.96	1.81
Repayment of TL	Nil	4.0	4.0
Total (B)	1.57	5.98	5.81
DSCR (A) / (B)	7.40	2.43	2.91
Average DSCR		4.24

   

Internal Rate of Return (IRR)

 

Cost of the project is Rs. 36.34 lacs				(Rs. in lacs)
Year	Cash Accruals	18%	20%	24%
1	10.06	8.99	8.37	8.18
2	12.63	9.06	8.76	7.70
3	14.31	8.71	8.28	7.49
4	15.15	7.78	7.30	6.40
5	15.15	6.57	6.09	5.15
Total		41.09	38.80	34.92

   

The IRR is around 22%

 

Manpower Requirement

 

Particulars	Nos.	Salary / month (Rs.)	Total Salary (Rs.)
Skilled Worker	2	7,500	15,000
Semi Skilled Workers	2	6,000	12,000
Helpers	2	5,000	15,000
Salesman	1	8,000	8,000
		Total	50,000

 

Assumptions

 

•  The plant will work for 300 days in a year. :

•  The operating capacity is 60% , 75%, 90 % during 1 st year , 2 nd year and 3 rd year respectively.

•  The interest on term loan is taken at 10% per annum and on working capital it is 12% per annum.

•  Price of raw material is taken at Rs. 45,000/ ton of ginger and Rs. 80,000/- ton of garlic.

 

Sources of Technology

 

CFTRI, Mysore, has successfully developed the technical know-how for the product.

BIS has laid down quality standard. The compliance under FSSAI act is a must.

 

Plant & Machinery Suppliers

 

Avity Agrotech and Industries
No.490-491, c-1 Chandan Complex,
G.I.D.C, Makarpura , Vadodara – 390010
Gujarat Ph. 0844 7570776

Yagnam Pulverier Private Limited

Plot no. R-869. Rabale M.I.D.C.,
Thane- Belapur Road, Navi Mumbai – 400701,
Maharashtra
Ph. 08447526964

 

Best Engineering Technologies

Plot. No. 69-A, No. 5-9-285/13,
Rajiv Gandhi Nagar, Industrial Estate,
Kukatpally, Hyderabad – 500037,
Ph. 08447523620

 

For further information please contact

Information Manager
TIMEIS Project
E-mail: timeis@ficci.com