49101238-finance-project-report-on-ice-plant.pdf 464m21

A Project Report TUBE ICE PLANT

Submitted to Prof. Pavathi IFIM Bschool

By Attada Ekalavya V.Harsha V.V.Hareesh Group 8, PGDM 2010-12, Section-B

January 3, 2011 TABLE OF CONTENTS 1

S. No. 1 2 3 4 5 6 7 8 9 10

CONTENTS INTRODUCTION MARKET POTENTIAL TUBE ICE MARKET ECONOMIC SIZE OF UNIT AND LAND REQUIREMENTS BASIS AND PRESUMPTIONS IMPLEMENTATION SCHEDULE BUSINESS PLAN SWOT TECHNOLOGY ASPECTS FINANCIAL ASPECTS

PAGE 3 3 4 4 5 5 5 6 7 8

INTRODUCTION 2

Visakhapatnam is a major port and the second largest city in the state of Andhra Pradesh on the east coast of India. Visakhapatnam fishing harbor is one of India's main fishing ports, has a dedicated harbor for the fishing industry and handles a large percentage of India's seafood exports. The fishing industry is also on the rise with both foreign and domestic exports of tuna doubling over the past decade. The tuna fishing season starts in November and ends by February. Last season, about 60 trawlers, 100 mechanized boats and nearly 1,000 small boats were engaged in the business from the Visakhapatnam fishing harbor. This harbor was once famous for tiger shrimp catches, which has a good market internationally. Over 100 trawlers and 800 mechanized boats were used for this. All types of fishing boats were used in the last season bringing about 12,600 ton tuna fish. Murthy told Business Standard that operators got Rs 100 on a kg. In the international market, a kg of A-grade fish (each fish weighs more than 20 kg) fetches Rs 300 while the B-grade variety gets Rs 150-170.“We are selling our product to a Kerala-based tuna export company due to lack of landing and storage facilities at Visakhapatnam. Last season, the average catch of each trawler was nearly 40 tones of tuna while for mechanized boats it was about 22 tons each, according to YGK Murthy, president of the Association of Indian Fisheries Industry (AIFI). Small fiberglass boats also caught around 8-10 tones of tuna each during the season. The volume of seafood exports through Visakhapatnam Port has increased to 26, 637 tone in 2001 – 02, according to the figures compiled by the Marine products Exports Development Authority (MPEDA). This document endeavors to provide information on various broad technical and financial aspects of a cold storage unit to enable the financing banks to finance for the formulation and implementation such projects.

MARKET POTENTIAL This is a project on Tube ice manufacturing of 20 Tons per day capacity, the location is within the Visakhapatnam Port Trust jurisdiction and close proximity to the Fishing Harbour, the daily consumption of Ice is 40 Tons per day and there are 5 units manufacturing Block Ice of Size 100kg and are able to satisfy the demand for ice up to 30 tons approximately. Setting up a plant would have continuous production as compared to batch production of Block Ice. The peak demand time is 4 AM – 9Am and 2PM – 6PM; the ice is used to store fish on the Fishing trawlers and for transportation within the country. Its ading areas are already running many such industries with full capacity and getting very good sales in the area with increasing demand. 3

TUBE ICE MARKET 1. Hotels, Restaurants, Bars, Flight Kitchens, Catering. 2. Concrete Cooling: Mixed into the cement to achieve a better process of hardening and thereby improving the cement quality. 3. Chemical Industry Processes: Is of better quality than actually the water it is made up of since the impurities present in the water are moved to the centre of the ice tube and discharged during defrosts ensuring that clean, crystal ice tubes are formed. Hence it improves the quality of the end product when used as a cooling agent during chemical reactions. Also it do not cause adverse effect on chemical/dye vessel thereby prevents damage to the vessel lining. 4. Food Production Processes: Used in poultry, red meat and sausage plants to retard heat build-up, bacteria and salmonella growth as well as to prevent water weight loss during shipment. It can also be used for preserving fruits and vegetables. 5. In the bakery industry it is used to mix ingredients, eliminate moisture and to keep yeast from working until the appropriate time. 6. Fishing Industry: Cooling fish on board fishing vessels. Maintaining the freshness of fish during storage and land transportation. 7. Cold Accumulation. 8. Mining, Construction and a variety of laboratory and medical applications.

ECONOMIC SIZE OF UNIT AND LAND REQUIREMENTS 1. Land to be allocated by VPT at the rate of Rs 275/Sq.mts., requested area for the project is 3000sq.mts. 2. Power to be sourced from APTRANSCO with a deposit of Rs. 5000 per KV, required power 100 KV. 3. Tube Ice machine to be ordered from the manufacturers, lead time 40 days after full payment. 4. Water is sufficiently available in the location itself through own Tube - Well.

5. As the unit is located just in side of the fishing harbour, therefore, adequate transport facility exists for transportation. 6. The skilled and unskilled labour will be easily available in the area itself & surrounding. Suitable housing facilities also 4

available in the area and hence, the factory staff will not face any housing problem.

BASIS AND PRESUMPTIONS The cost of production and profitability of the project for its first seven operating years is calculated which is presented later on. The various assumptions made for the calculation of cost of production and profitability is listed below: 1. The unit will work for 180 days on double shift basis in a year. 2. The capacity utilisation has been assumed at 60% in the first year, 70% in the second year, and 80% in the third year onwards. 3. The sales prices are considered at ex-factory basis, based on prevailing market prices. 4. The cost of raw materials has been assumed at F.O.R. work basis. Any increase in cost of raw materials will be ed over to the consumers of the finished goods. 5. The details of manpower and wages are on the basis of industry practice. 6. Employee’s benefits have been taken at 10% of wages and salaries, which include benefits, house rent, gratuity, paid leave etc. 7. Every year an increase of 10% / 5% has been assumed. 8. The interest on term loan has been taken @ 13.50% per year. 9. The sales expenses and sales commission have been taken @ 5% sales.

IMPLEMENTATION SCHEDULE The approximate time required for various activities is given below. However, it may vary from place to place depending upon the local circumstances and on the enthusiasm of the. Entrepreneurs: Selection of Site Preparation of Project Report

1 month 1 month 5

Registration as SSI/Other legal formalities Availability of Finance Machinery procurement, Erection and commissioning

15 days 3 months 2 months

BUSINESS PLAN Tube Ice will be provided to the fishermen. The facility will be located at place which is easily assessable. The Ice would be able to provide a wide range of storage of different fish at the same time. Skilled labour would be employed to provide best services.

SWOT ANALYSIS • • • •

STRENGTHS: Tube Ice plant gives better energy and cost efficiency than traditional Ice plants. WEAKNESS: As new entrant, and other competitors in market has already achieved their Break Even. OPURTUNITIES: Demand for Ice in the Market THREATS: Existing Competitors in the market

TECHNOLOGY 1. SALIENT FEATURES: • • • • • • • •

Capacities offered: 20 TPD Tube ice dimensions: 1 1/8” diameter Design/Engineering simplicity No requirement of skilled workers High durability, minimum maintenance High energy efficiency Prompt service Complete spare parts provided

2. MACHINE COMPONENTS: • •

Stainless steel tube ice machine. Water Distributors: Made up of elastic material which creates a continuous uninterrupted peripheral seal between the tube ends and water distributor. 6

• •

• •

•

• •

• •

Accumulator with insulation Refrigerant: Ammonia Float switch Freezer: Of high quality stainless steel for all water and ice surfaces providing corrosion resistance and easy to clean Cutter: Stainless steel cutters driven by gear motors are uniquely designed to produce both cylindrical and crushed ice simply by reversing the motor of the cutter using a switch on the control that controls this function Cutter Motors: Built with heavy duty design to give years of reliable ice-sizing service. Pumping Tank (Water Pumps): Centrifugal cast in iron pump large enough to circulate many times the quantity of water to be frozen producing crystal clear ice crystals. Heavy-duty compressor. Control : Gives use access to the automatic electrical system, which performs sequences for freezing and thawing precisely and dependably year after year.

3. ADVANTAGES: • • •

•

•

• •

• •

Highest electricity efficiency: Only 47 units per ton of ice versus more than 90 units for flake ice. Lowest operating cost: Production efficiency without brine solution cans etc; using direct refrigeration principles. Lowest space to production ratio: Only 100sq.ft. Required for 40 TPD machine making this machine one of the most sought after ice machines where land and building is expensive. Minimal maintenance: Machines are known to run with minimal or no maintenance due to inherent plant design and since only world class indigenous components is used. Flexible batch cycle: Ice batch in less than 20 minutes ensures no wastage of electricity and thus allows for production planning. Overall lowest investment: Net present value is greater than flake or block ice plant. Quality ice: The quality of ice is actually better than the water it is made since the impurities present in the water are moved to the centre of the ice tube and discharged during defrost ensuring that clean, crystal ice tubes are formed. On the other hand, block ice is manufactured using the outdated method of salt water brine chilling. Due to the leaking of ice cans, typically the block ice contains a high degree of salinity which has an adverse effect on the concrete structure. Uniform melt age: Being consistent in shape the tubes melt at an equal pace providing an uniform cooling medium. Variance in flake sizing: Using our customized on-line tube ice flakers, flake ice can be produced at a required thickness allowing for present and future variance in flake sizes. 7

•

Labour cost savings: Due to minimal manpower expense related to ice crushing and wastage along with accurate and consistent weight the overall labour expenses are significantly lower.

4. POLLUTION CONTROL •

There are no harmful effluents in the process. However, NOC may be taken from the concerned State Pollution Control Board.

5. ENERGY CONSERVATION •

Proper insulation heat/temperature.

should

be

given

to

avoid

loss

of

FINANCIAL ASPECTS Assets of company S.N o.

1 2 3 4 5 6 7 1 2 3 4 5 6 7

Discription Land and Building Land 3000 sq.mtr.@ Rs. 280 per sq. mtr. Machine Room 12m × 10m × 4m D.G. Room 8m × 4m × 4m Bore Well istration 10m × 4m × 3m Stair Case Furniture Machinery and Equipment Generator 125 KV High Pressure Pump-Cleaning Electricity ling / Control Station Misc Land levelling / Civil works Electricity Deposit Water Storage Tanks Tube Ice Plant Grand Total

Amount INR 2,110,000.00

INR 1,535,000.00

INR 3,645,000.00

8

RECURRING EXPENSES EMPLOYEES SALARIES Sl no.

Numb er

Designation

1

Manager

1

2

Maintenance Supervisor

1

3

Storekeeper

1

4

ant

1

5

Skilled Workers

1

6

Unskilled Workers

4

7

Watchman

2 Total Perquisites @ 15%

11

Salary 6,000.0 0 5,000.0 0 4,000.0 0 5,000.0 0 2,000.0 0 1,600.0 0 1,600.0 0 25,200. 00

Total DEPRECIATION Depreciation on building @ 8% Depreciation on machinery @ 10% Depreciation on Furniture @ 20% Interest on total investment @ 13.5%

Amount 6,000.00 5,000.00 4,000.00 5,000.00 2,000.00 6,400.00 3,200.00 31,600.00 8,280.00 INR 39,880.00 5.61 7.75 0.20

Total INSURANCE TOTAL RECURRING EXPENSES

31.87 45.43 INR 30,000.00 INR 69,880.00

VARIABLE EXPENSES Raw Material Water 5000 KL @ Rs. 10/KL Add back of Salt and Ammonia Utilities Power @ 80% Fuel Other Contingent Expenses Postage and stationery Telephone Consumable stores Repair and maintenance

INR 600,000.00

INR 318,432.00

INR 100,000.00

9

Transport Insurance Miscellaneous INR 1,018,432.00

TOTAL VARIABLE EXPENSES FIXED EXPENSES

INR 3,365,000.00

Machinery and Equipment Generator 125 KV Pump Suction High Pressure Pump-Cleaning Electricity ling / Control Station Electricity Deposit Water Storage Tanks Land and Building 20 TPD ICE Plant Installation / Erection

INR 2,110,000.00

Land and Building Misc Land levelling / Civil works Land Deposit TOTAL FIXED EXPENSES

INR 5,475,000.00

Fixed Capital Sl no. 1

Land and Building Land 3000 sq.mtr.@ Rs. 280 per sq. mtr.

2 3 4 5 6 7

Machine Room 12m × 10m × 4m D.G. Room 8m × 4m × 4m Bore Well istration 10m × 4m × 3m Stair Case Furniture

Total 1,400,000.00 120 Sq. Mts. 32 Sq. Mts. L.S. 40 Sq. Mts. L.S.

2500/Sq.Mts. 2500/Sq. Mts. 3000/Sq. Mts.

300,000.00 80,000.00 30,000.00 120,000.00 150,000.00 30,000.00

10

Total 8 9 10 11 12 13 14

Machinery and Equipment Generator 125 KV High Pressure Pump-Cleaning Electricity ling / Control Station Misc Land levelling / Civil works Electricity Deposit Water Storage Tanks Tube Ice Plant

1 1

5000 Lts 10 TPD Total GRAND TOTAL

2,110,000.0 0 800,000.00 60,000.00 50,000.00 100,000.00 500,000.00 25,000.00 18,00,000.00 1,535,000.0 0 3,645,000.0 0

Working Capital I Sl no. 1 2

Personnel Designation Manager Maintenance Supervisor

Numbe r 1 1

Salary 6,000.00 5,000.00

Total 6,000.00 5,000.00

11

3 4 5 6 7

Storekeeper ant Skilled Workers Unskilled Workers Watchman Total Perquisites @ 15%

1 1 1 4 2 11

4,000.00 5,000.00 2,000.00 1,600.00 1,600.00 25,200.00 Total

II 1 2

Raw Material Water 5000 KL @ Rs. 10/KL Add back of Salt and Ammonia

QTY 10

Rate 5,000.00 Total

III 1 2

Utilities Power @ 80% Fuel

Usage 115200

Rate 2.66 Total

IV 1 2 3 4 5 6 7

Other Contingent Expenses Postage and stationery Telephone Consumable stores Repair and maintenance Transport Insurance Miscellaneous

V

Working Capital (per month)

Total TOTAL CAPITAL Genral Reserve

4,000.00 5,000.00 2,000.00 6,400.00 3,200.00 31,600.00 8,280.00 39,880.00 Amount 50,000.00 10,000.00 60,000.00 Amount 306,432.00 12,000.00 318,432.00 Amount 2,000.00 3,000.00 15,000.00 15,000.00 20,000.00 30,000.00 15,000.00 100,000.00 518,312.00 INR 4,163,312.00 INR 836,688.00

Estimated Market Projections PRESENT MARKET S.no. 1

Discription

Ice Requirement in fishing harbour in tons

Requir ed

45

Availab le

30

12

2

PRESENT MARKET PRICING

Market Price / Ice Block 1 S.no.

20

Sale expected per Day in tons

ESTIMATED MARKET SALE Discription

Harbo ur

Plant

INR 130.00

INR 86.90

Qty

Rate

1

Sale expected per Day

10000

130

2

Discounted price PRODUCTION COST

10000

100

1

Productions

10000

Price INR 1,300,000.00 INR 1,000,000.00 INR 869,000.00

13