Model Detailed Project Report: Honey Processing Unit
Model Detailed Project Report: Honey Processing Unit
Model Detailed Project Report: Honey Processing Unit
Prepared by
Honey means the natural sweet substance produced by honey bees from the nectar
of blossoms or from secretions of plants which honey bees collect, transform store
in honey combs for ripening. It shall be free from any foreign matter such as mould,
dirt, scum, pieces of beeswax, the fragments of bees and other insects and from any
other extraneous matter. Honey is among the most popular and widely used
sweetener with enormous health benefits. It is used by several cultures around the
world serving as a base for many traditional medicines, especially in Ayurveda. It is
used in strengthens immune system, preparing cosmetic products, health tonic and
food processing industries for preparing different types of drinks, bakery products,
sweets etc. Beekeeping is an ideal activity for development as a subsidiary
occupation providing supplementary income. Beekeeping is feasible in areas where
adequate bee flora available for a minimum period of 6 months. Honey produced by
Indian hive bees is collected by modern extractor. The extracted honey contains
hemophilic yeasts, which causes fermentation and destroy the quality of honey. To
maintain the qualitative and quantitative value of honey the processing in modern
Honey Processing plant is essential.
2. MARKET POTENTIAL:
Honey is a major consumable in the international market both as a food item as well
as in industries such as Pharmaceuticals, Cosmetics and Confectionary. The demand
is especially high for refined, high quality honey free pesticides, insecticides and
other agrochemicals.
In the domestic market very little amount of honey is use for personal consumption,
while majority is utilized by the pharmaceutical and confectionary industry. With
changing life style and increasing health consciousness, honey is been increasing
consumes as health food. This is likely to drive the domestic demand in future.
As per the information available from Agricultural & Processed Food Products
Export Development Authority, India has exported 51547.31 MT of Natural Honey
to the world for the worth of Rs. 653.58 crore/ 101.32 USD Million during the year
of 2017-18 and the Major Export Destinations (2017-18) are USA, Saudi Arab, U
Arab Emts, Canada and Qatar.
3. PRODUCT DESCRIPTION
From centuries, honey has been used as a natural sweetening agent and in the
preparation of confectionaries. It has vast application in the pharmaceutical industry,
and it is also considered as a medicine by Ayurved. It is popularly used as a
household cure for cough and hence used as vehicle for medicines in many popular
brands of Cough Syrup. It is a preferred consumable for people on dieting. Honey is
also used for making lozenges. However, it is mostly sold in glass Jars as pure honey.
In bottled honey normally moisture content of honey is reduced. Good quality honey
has high demand in the international market and it has the potential to generate
substantial foreign exchange for the Country.
Only honey and basic packing material (bottle, lids and labels) are required for raw
material.
3.3 MANUFACTURING PROCESS
Initial extraction
Dehumidification
Heating
Pasteurization
Crystallization
Final packaging.
After the initial harvest, the material (e.g. honeycombs, frames) is introduced into
the so-called honey extractor: a container able to remove honey by means of the
centrifugal force. The operation has to be carried out into special rooms, with
possibility of heating. At the exit from the extractor, the honey is (a) collected by
gravity in tanks placed often on the floor (wax is separated from honey) and (b) sent
to the decanters with the aid of pumps from the same floor. The extraction must be
performed by a desired degree of purification with the aim of eliminating wax
particles and air bubbles, which are possibly mixed with honey during extraction.
The purification is carried out with two different techniques: decanting and filtration.
By the safety viewpoint, it should also be considered that extraction procedure (with
the collection and other processing steps) may affect negatively the quality of
produced honeys, with special reference to honey for medical purposes.
Consequently, physicochemical and microbiological features of the final product can
be assured on condition that a certain number of precautionary measures are taken
before the final commercialization.
The processed honey is immediately bottled in clean wide mouthed bottles. It is then
sealed by PP Caps. Bottles are wiped dry and labelled. Filled, sealed & labeled
bottles are then packed in labeled cardboard boxes.
4. PROJECT COMPONENTS
The approximate total area required for complete factory setup is 3000-4000 Sq.
ft. approximately smooth production including storage area.
4.2 Plant & Machinery
Note: Approx. Total Machinery cost shall be Rs 48.23 lakhs excluding GST and
Transportation Cost.
4.3 Power Requirement
The borrower shall require power load of 30 KW which shall be applied with Power
Corporation. However, for standby power arrangement the borrower shall
purchase DG Set.
Includes:
1 Plant Operator
4 Skilled Labour
8 Unskilled Labour
4 Administrative Staffs
1 Accountant
5. FINANCIALS
Term Loan of Rs. 37.07 lakh and Working Capital limit of Rs.8.7 Lacs
(in Lacs)
COST OF Own Bank
PROJECT PARTICULARS AMOUNT Contribution Finance
25.00% 75.00%
Land & Building Owned /rented
MEANS OF
FINANCE PARTICULARS AMOUNT
Total 61.03
5.3 Projected Balance Sheet
(in Lacs)
PROJECTED BALANCE SHEET
PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Liabilities
Capital
Assets
Current Assets
SOURCES OF FUND
Increase in Provisions & Oth lib 0.35 0.07 0.08 0.10 0.12
APPLICATION OF FUND
Closing Cash & Bank Balance 3.05 1.07 0.81 1.07 2.47
5.5 Projected Profitability
(in Lacs)
PROJECTED PROFITABILITY STATEMENT
PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
SALES
Gross Sale
COST OF SALES
Items to be Manufactured
Honey Processing
COMPUTATION OF SALE
Particulars 1st year 2nd year 3rd year 4th year 5th year
Finished Goods
Raw Material
Opening Balance - - -
FINANCIAL INDICATORS
PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
TURNOVER 167.04 196.06 222.07 249.64 279.74
GROSS PROFIT 25.51 31.90 39.15 45.76 53.36
CALCULATION OF D.S.C.R
REPAYMENT
Instalment of Term Loan 4.12 8.24 8.24 8.24 8.24
Interest on Term Loan 3.64 3.21 2.30 1.40 0.49
Net Sales & Other Income 167.04 196.06 222.07 249.64 279.74
Selling & adminstrative Expenses 80% 8.02 9.41 10.66 11.98 13.43
Total Variable & Semi Variable Exp 143.88 164.32 184.83 207.49 231.62
Selling & adminstrative Expenses 20% 2.00 2.35 2.66 3.00 3.36
7. ASSUMPTIONS
1. Production Capacity of Honey is 400 Kg per day. First year, Capacity has been
taken @ 60%.
3. Raw Material stock is for 10 days and Finished goods Closing Stock has
5. Credit period by the Sundry Creditors has been provided for 7 days.
6. Depreciation and Income tax has been taken as per the Income tax Act,
1961.
7. Interest on working Capital Loan and Term loan has been taken at 11%.
8. Salary and wages rates are taken as per the Current Market Scenario.
10. Increase in sales and raw material costing has been taken @ 5% on a yearly
basis.
Limitations of the Model DPR and Guidelines for Entrepreneurs
i. This model DPR has provided only the basic standard components and methodology to be
adopted by an entrepreneur while submitting a proposal under the Formalization of Micro Food
Processing Enterprises Scheme of MoFPI.
ii. This is a model DPR made to provide general methodological structure not for specific
entrepreneur/crops/location. Therefore, information on the entrepreneur, forms and structure
(proprietorship/partnership/cooperative/ FPC/joint stock company) of his business, details of
proposed DPR, project location, raw material base/contract sourcing, entrepreneurs own SWOT
analysis, detailed market research, rationale of the project for specific location, community
advantage/benefit from the project, employment generation and many more detailed aspects not
included.
iii. The present DPR is based on certain assumptions on cost, prices, interest, capacity utilization,
output recovery rate and so on. However, these assumptions in reality may vary across places,
markets and situations; thus the resultant calculations will also change accordingly.