Oleoresins & Spice Oil
Uploaded on : February 2019
Introduction
Oleoresins are the flavour extracts obtained by the solvent extraction of the ground spices. They have aroma of spice and possess the attributes which contribute to the taste such as pungency. All the spices contain essential oils in varying proportions which can be extracted by steam distillation. India is one of the leading producers of spices and instead of exporting raw spices, it is advisable to export value added products.
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
Raw spices like black pepper, ginger, turmeric, cinnamon and cardamom seeds shall be the main raw materials. Appropriate solvent needs to be identified. Total production of spices in the country is estimated to be 5387092 MT / year out of which production in the West Bengal is estimated to be 211128 MT/ year.
Market Opportunities
Oleoresins and spice oil have large domestic as well as export markets. They are consumed by a broad spectrum of manufacturers like confectionary, noodles, beverages, sauces, canned meat, soup powders, curries, poultry products and so on . Most of the end use industries are growing steadily and demand is bound to increase. With increasing preference for quality products, use of spices is rapidly replaced with oleoresins and spice oils. Exports of these processed products, instead of raw spices, would also results in considerable value addition. Total Export of spices oil and oleoresins from India during the year 2009-10, 2010-11 and 2011-12 is estimated to be Rs. 70875/-lacs, Rs. 91062/- lacs and Rs. 130438/- lacs respectively.
Project Description
Product & ITS Uses
The oleoresins and spice oil are preferred because of their microbiological advantages, uniformity in flavour and pungency, easy to store and transport. They have several applications like in the preparation of beverages, soup powders, confectionary, curries, noodles, sauces &, canned meat etc.
Capacity
The proposed capacity of the plant is to process 70 MT / annum of various spices.
Manufacturing Process
To start with, various raw spices are cleaned and then ground to the required mesh size. Then extraction is undertaken with the help of proper solvent. Solvents that can be used are hexane, acetone, ethylene dichloride or alcohol. Extraction is done by percolation of the solvent at room temperature through a bed of ground spice packed in SS percolator. Then the dark viscous extract containing not less than 10% of total soluble solids are drawn off and distilled under reduced pressure to remove the excess of solvent. The essential oil is obtained by steam distillation.
Project Components & Cost
Land & Building
A plot of around 300 sq. mtrs. with constructed area of 150 sq. mtrs. would be adequate for the contemplated production capacity. Land may cost Rs. 1.50 lacs whereas the cost of civil work is assumed to be Rs. 9.75 lacs.
Plant & Machinery
For the contemplated installed capacity of 1500 kgs. of spice oil and 3000 kgs. of Oleoresins per year with 12 hours working per day and 300 working days every year, following equipments shall be needed.
Particulars |
Qty |
Amount (Rs. in lacs) |
Hammer type disintegrators |
2 |
3.00 |
SS Percolator of 200 kgs. capacity |
2 |
2.40 |
Vacuum distillation still with 75/ 100 ltrs. Capacity with vacuum pump and other accessories |
2 |
31.50 |
SS storage tanks of 50 kgs. capacity |
2 |
2.10 |
Can sealer |
1 |
1.20 |
Baby Boiler |
1 |
2.40 |
Laboratory equipments |
- |
1.50 |
Total |
|
44.10 |
Miscellaneous Assets
Other assets like weighing scales, furniture and fixtures, working tables, storage racks etc. would need around Rs. 3.00 lacs.
Utilities
Power requirement shall be 15 HP whereas water requirement will not be more than 2000 ltrs every day. LDO or coal shall be required for boiler. Total cost of utilities is estimated to be Rs. 3.00 lacs / annum.
Prel. & Pre Operative Expenses
An amount of Rs. 4.50 lacs would take care of pre-production expenses like establishment and registration charges, travelling, administrative expenses, interest during implementation, trial runs etc.
Working Capital Assessment
At 60% capacity utilization in the first year, the working capital needs shall be as under: (Rs. in lacs)
Particulars |
Period |
Margin |
Total |
Bank |
Promoters |
Stock of raw material and packing material |
1 month |
30% |
3.60 |
2.60 |
1.0 |
Stock of Finished Goods |
½ month |
25% |
2.58 |
1.93 |
0.65 |
Receivable |
1 month |
25% |
6.30 |
4.73 |
1.57 |
Total |
|
|
12.48 |
9.26 |
3.22 |
Project cost & Means of finance
Item |
Amount (Rs. in lacs) |
Land and Building |
11.25 |
Plant and Machinery |
44.10 |
Miscellaneous Assets |
3.0 |
P & P Expenses |
4.50 |
Contingencies @ 10% on building and plant & machinery |
5.53 |
Working capital margin |
3.22 |
Total |
71.60 |
Means of Finance |
|
Promoters' contribution |
28.64 |
Term loan from Bank /FI |
42.96 |
Total |
71.60 |
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
As against the rated capacity, actual utilization in the first year is assumed to be 60% and thereafter, it is restricted to 75%
Sales Revenue At 100%
Product |
Qty (Tons) |
Selling Price (Rs. / kg.) |
Sales (Rs. in lacs) |
Spice Oil |
15 |
5000 |
75.00 |
Oleoresins |
30 |
2700 |
81.00 |
|
Total |
|
156.00 |
Raw Material Required At 100%
Various raw material required for the unit are given below:
Product |
Qty (Tons) |
Rate (Rs. / Ton) |
Value (Rs. in lacs) |
Spice |
70 Tonnes |
90,000 |
63.0 |
Alcohol / Acetone |
|
|
7.50 |
Packing Material @ Rs. 10 / Kg |
|
|
1.50 |
TOTAL |
|
|
72.00 |
Profitability Statement
S. No. |
Particulars |
1st year |
2nd year (Rs. in lacs) |
A. |
Installed capacity |
70 Tons |
|
|
Capacity Utilisation |
60% |
75% |
|
Sales Income |
93.60 |
117.00 |
B. |
Cost of Production |
|
|
|
Raw material & packing materials |
43.20 |
54.00 |
|
Utilities |
1.80 |
2.25 |
|
Salaries |
6.54 |
7.19 |
|
Stores and Spares |
0.60 |
0.75 |
|
Repairs and Maintenance |
0.90 |
1.12 |
|
Selling Expenses @ 10% |
7.56 |
9.45 |
|
Administrative Expenses |
1.50 |
1.90 |
|
Total |
62.10 |
76.66 |
C. |
Profit before Interest & Depreciation |
31.50 |
40.34 |
|
Interest on Term Loan |
5.15 |
4.19 |
|
|
Interest on Working Capital |
1.29 |
1.61 |
|
|
Depreciation. |
5.80 |
5.20 |
|
Profit before Tax |
19.33 |
29.34 |
|
Income-tax @ 30% |
1.93 |
2.93 |
|
Profit after tax |
17.40 |
26.42 |
|
Cash Accruals |
23.20 |
31.62 |
|
Repayment of Term Loan |
Nil |
8.00 |
Break Even Point Analysis
S. No. |
Particulars |
Amount (Rs. in lacs) |
|
(A) |
Sales |
|
117.00 |
(B) |
Variable Costs |
|
|
|
Raw material & Packing Material |
54.0 |
|
|
Utilities(70%) |
2.25 |
|
|
Salaries (60%) |
7.11 |
|
|
Stores and Spares |
1.12 |
|
|
Selling and Distribution Exps (70%) |
9.45 |
|
|
Admn Expenses (50%) |
1.90 |
|
|
Interest on WC |
1.61 |
77.52 |
(C) |
Contribution (A) – (B) |
|
39.46 |
(D) |
Fixed Costs |
|
11.72 |
(E) |
Break Even Point |
|
30% |
DEBT Service Coverage Ratio (DSCR)
Particulars |
1st year |
2nd year 30% |
3rd year (Rs. in lacs) |
Cash Accruals |
23.20 |
31.62 |
37.94 |
Interest on TL |
5.15 |
4.19 |
4.19 |
Total (A) |
28.35 |
35.79 |
42.13 |
Interest on TL |
5.15 |
4.19 |
4.19 |
Repayment of TL |
- |
8.0 |
8.00 |
Total (B) |
5.15 |
12.19 |
12.19 |
DSCR (A) /(B) |
5.50 |
2.93 |
3.45 |
Average DSCR |
3.96 |
||
Internal Rate of Return (IRR)
Cost of the project is Rs. 71.60 lacs |
(Rs. in lacs) |
|
Year |
Cash Accruals |
32% |
1 |
23.20 |
17.40 |
2 |
31.62 |
18.14 |
3 |
37.94 |
16.50 |
4 |
37.94 |
10.83 |
5. |
37.94 |
9.48 |
| Total | 72.35 | |
The IRR is around 32%.
Manpower Requirement
Particulars |
Nos. |
Monthly Salary (Rs.) |
Total Monthly Salary (Rs.) |
Skilled Worker |
1 |
8,000 |
8,000 |
Semi Skilled Workers |
2 |
7,500 |
15,000 |
Helpers |
4 |
6,000 |
24,000 |
Salesman |
1 |
7,500 |
7,500 |
|
|
Total |
54,500 |
Assumptions
• The plant will work for 300 days in a year.
• The operating capacity is 60% , 75%, 90 % during 1st year , 2nd year and 3rd year respectively.
• The interest on term loan is taken at 12% per annum and on working capital it is 14% per annum.
• Price of raw material and selling price of finish products is taken at Rs. 90 / kg and Rs. 5,000 / kg respectively.
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
www.avityagrotech.com.
Yagnam Pulverier Private Limited
Plot no. R-869. Rabale M.I.D.C.,
Thane- Belapur Road, Navi
Mumbai – 400701, Maharashtra
Ph. 08447526964
www.lithtechindia.com
Best Engineering Technologies
Plot. No. 69-A, No. 5-9-285/13,
Rajiv Gandhi Nagar, Industrial Estate, Kukatpally,
Hyderabad – 500037,
Ph. 08447523620
www.bestengineeringtechologies.com
Contact for more information
Information Manager
TIMEIS Project
E-mail: timeis@ficci.com
