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R K Hitech Centre Pvt. Limited

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R K Hitech Centre Pvt. Limited Powered By Docstoc
					              June 2005
     Report prepared by


R K Hitech Centre
Pvt. Limited
B-258, Lake Gardens, Kolkata - 700045
Phone : +91 (033) 24222159, 24178067
Mobile : +91 9830053132
E-mail : rkhc_pvtl@yahoo.co.in
  Proffiille on a 20 KL per day graiin based
  Pro e on a 20 KL per day gra n based
                   diisttiilllattiion uniitt
                   d s a on un                                 June 2005   R K H it ec h Ce nt r e
                                                                           Pvt. Limited
  suiittablle ffor iinsttallllattiion iin Westt Bengall
  su ab e or ns a a on n Wes Benga                                         B-258, Lake Gardens, Kolkata-700045
                                                                           Phone : +91 33 24178067, 24222159
                                                                           Mobile : +91 9830053132
                                                                           E-mail : rkhc_pvtl@yahoo.co.in


Introduction
  The R K Hitech Centre Pvt. Limited, a Management and Engineering
  Consultant firm, over the last one-decade has studied during various
  assignments most lucrative but neglected sector of post harvest
  scenario of India.
  Through disciplined and organized programmes for setting up various
  agro based processing industries in eastern & northeastern part of the
  Indian Subcontinent a fast pace regional growth and as well a good
  return on invest can be assured.
  With this vision and research on:
     • Potato & rice, production, internal demand, farmers’ price
       movement and suitability of alcohol production in West Bengal;
     • Surplus and boarder trade of potato & rice in West Bengal;
     • The demand of alcohol in West Bengal and other Eastern North
       eastern states;
     • Indian Govt. Policies on alcohol/ethanol.
 It is been visualised that a Co-operative owned distillery unit, with
 facilities to process cereals potato and vegetables containing starch
 sourcing its raw material from districts of Burdwan, Bankura and
 Hooghly in West Bengal can be established.
Market potential
 There is a shortfall of Indian Made Foreign Liquor (IMFL) in supply to
 West Bengal and other Northeastern states of India as much as that:
           Most of the Indian Liquor is manufactured in South and North.
           Indian liquor is categorized as beer, country liquor and Indian
           Made Foreign Liquor (IMFL).
           IMFL production includes wines, whisky, rum, vodka, gin and
           brandy. Draught beer has been recently introduced and has
           done well in the places in which it has been introduced.
           Canned beer is an even more recently introduced new
           beverage.
           Between 10 and 15 per cent of Indian people consume alcohol.
           Of all the alcoholic liquor the consumption Intake of Indian
           Made Foreign Liquor (IMFL) is growing at the considerable
           rate of 15 per cent a year.
           Whiskey manufacturers control 65 per cent of the Indian
           liquor market.
           The state of Kerala stands first in per capita consumption of
           liquor at 8.3 litres, followed by Punjab 7.9 litres.


                                                      1 of 7
  Proffiille on a 20 KL per day graiin based
  Pro e on a 20 KL per day gra n based
                   diisttiilllattiion uniitt
                   d s a on un                                 June 2005   R K H it ec h Ce nt r e
                                                                           Pvt. Limited
  suiittablle ffor iinsttallllattiion iin Westt Bengall
  su ab e or ns a a on n Wes Benga                                         B-258, Lake Gardens, Kolkata-700045
                                                                           Phone : +91 33 24178067, 24222159
                                                                           Mobile : +91 9830053132
                                                                           E-mail : rkhc_pvtl@yahoo.co.in


          Haryana, Punjab, Rajasthan, Uttar Pradesh, Kerela and most
          other Indian metropolises have alcohol industry
          establishments.
          The southern region of India has abundant consumption of
          alcohol.
  Against the present production of 1775.5 million litre the projected
  demand of Alcohol in India is as follows:
                           Year                  Alcohol demand in India
                                                     (Million Litre)
                         2003-04                          1969.2
                         2004-05                          2074.5
                         2005-06                          2187.0
                         2006-07                          2300.4

  This provides ample scope for a new unit in eastern part of India to
  meet both potable and industrial alcohol demand of this region.

Choice of project site at Burdwan
  The following are the considerations to decide Burdwan for the
  proposed project:
     Huge production of rice in this belt resulting in to marketable
     surplus of broken rice, the raw material for the proposed project
     Substantial generation of potato rejects; another source of raw
     material
     Growing demand in:
         West Bengal: Industrial, potable and ethanol-blended gasoline
         as automobile fuel use
         Bangladesh: Industrial and ethanol as automobile fuel use
         Bhutan: Potable use by Army Welfare and as prospective
         ethanol-blended gasoline automobile fuel for clean and green
         environment in the Kingdom.
Benefits of the proposed project in West Bengal
  Raw material can be procured on assurance from Bengal potato and
  grain farmers. The supply assurance will be through provision of
  support price by way of contract farming, improvement in farm yield
  through agro-technology transfer in the extension programme of
  contract farming.
Proposed capacity of the distillery
  The average per day distillation capacity can be 20 KL and annual
  capacity on 300 days working will be 6000 KL with the following
  combination of finished product:
                                                      2 of 7
 Proffiille on a 20 KL per day graiin based
 Pro e on a 20 KL per day gra n based
                  diisttiilllattiion uniitt
                  d s a on un                                 June 2005        R K H it ec h Ce nt r e
                                                                               Pvt. Limited
 suiittablle ffor iinsttallllattiion iin Westt Bengall
 su ab e or ns a a on n Wes Benga                                              B-258, Lake Gardens, Kolkata-700045
                                                                               Phone : +91 33 24178067, 24222159
                                                                               Mobile : +91 9830053132
                                                                               E-mail : rkhc_pvtl@yahoo.co.in




            1. Rectified Spirit/Industrial Alcohol.              20% 1200 KL
            2. Extra Neutral Alcohol/Potable                     40% 2400 KL
            Alcohol.
            3. Anhydrous Alcohol/Absolute                        10% 600 KL
            Alcohol.
            4. Ethanol as fuel.                                  30% 1800 KL
By-products
 Following by-products will also be obtained from the proposed
 distillery:
 High Protein animal feed (DDG)
 Unlike molasses based plants grain and potato based distillers give a
 by-product of the fermentation process which has good demand as high
 protein cattle feed. This is the non fermentable portion of grain mash
 containing 28% protein, unconverted carbohydrates & sugars.
 Carbon di Oxide (CO2)
 Carbon dioxide is produced in fermentation reaction, this is recovered
 and sold to users of refrigerants and to soft drink bottlers.
Raw material requirement
                                                  Rice Potato
                  Proportion of the route         80%    20%
                  Litr/day                       16000 4000
                  Starch %                        75%    18%
                  Qty required/litre alcohol (kg) 2.2     8.5
                  Total Raw material/day (MT) 35.20 34.00
                  Required per year (MT)         10,560 10200




                        The above quantity of rice/other grain and
                potato will be sourced from the farm sector of West Bengal.




                                                     3 of 7
  Proffiille on a 20 KL per day graiin based
  Pro e on a 20 KL per day gra n based
                   diisttiilllattiion uniitt
                   d s a on un                                 June 2005               R K H it ec h Ce nt r e
                                                                                       Pvt. Limited
  suiittablle ffor iinsttallllattiion iin Westt Bengall
  su ab e or ns a a on n Wes Benga                                                     B-258, Lake Gardens, Kolkata-700045
                                                                                       Phone : +91 33 24178067, 24222159
                                                                                       Mobile : +91 9830053132
                                                                                       E-mail : rkhc_pvtl@yahoo.co.in


Process


                                                                      Potato peeling
     Rice/grain
                                                                    cooking & mashing
      milling


                                                Mashing &
                                               Liquefactions
Steam
                                                                                Chemical yeast
Cooling
 water                                       Sacchrification
                                             & fermentation
Process
 water                                                Mash


                                                Distillation
                                               mash to ENA


              ENA/RS/TA                                                       Thin slops
                                                                           to fermentation
Bulk spirit receiver bonded area

                                                                            Decantation




                                    Biogas plant                                Wet cake
                                     For boiler                                 Cattle feed




                                                      4 of 7
  Proffiille on a 20 KL per day graiin based
  Pro e on a 20 KL per day gra n based
                   diisttiilllattiion uniitt
                   d s a on un                                  June 2005              R K H it ec h Ce nt r e
                                                                                       Pvt. Limited
  suiittablle ffor iinsttallllattiion iin Westt Bengall
  su ab e or ns a a on n Wes Benga                                                     B-258, Lake Gardens, Kolkata-700045
                                                                                       Phone : +91 33 24178067, 24222159
                                                                                       Mobile : +91 9830053132
                                                                                       E-mail : rkhc_pvtl@yahoo.co.in


Facilities required

                 Land                                : 6 acre (24000 sq. metre)
                 Building                            : 2500 sq. metre
                 Water                               : 150 m3
                 Steam                               : 20 MT
                 Power                               ; 200 kW




Proposed investment
  It is envisaged that the installed cost of the
  project will be about ……………………… INR 18.00 Crore.
  Working capital and contract farming fund.. INR 4.00 Crore
  Total Investment…………………………… INR 22.00 Crore

Mode of Finance
  The proposed enterprise can be a Limited company comprising of:
       • Farmers Cooperative (1st part having 55% holding in the
         new company)
       • Individual retail investors from Bengal (2nd part having
         45% holding)

   Debt : equity                                                            :       2:1
                                                                                  INR in
                                                                                   Crore
                                            Total equity :                         73.34
   Equity holding of the Cooperative (55%)               :                            40.34
   Equity holding by public (45%)                        :                            33.00
   Term loan from Financial Institution or Bank          :                           120.00
   Cash credit from bank                                 :                            26.66




                                                      5 of 7
  Proffiille on a 20 KL per day graiin based
  Pro e on a 20 KL per day gra n based
                   diisttiilllattiion uniitt
                   d s a on un                                   June 2005               R K H it ec h Ce nt r e
                                                                                         Pvt. Limited
  suiittablle ffor iinsttallllattiion iin Westt Bengall
  su ab e or ns a a on n Wes Benga                                                       B-258, Lake Gardens, Kolkata-700045
                                                                                         Phone : +91 33 24178067, 24222159
                                                                                         Mobile : +91 9830053132
                                                                                         E-mail : rkhc_pvtl@yahoo.co.in


Annual sales value
Based on the regulated price of India the total sales per annum will be as
follows:

                                                                       Gross sales per
        Year of                     Million
                 Production Level %                                       annum
       operation                    Litres
                                                                       INR in Millions
          1st                          70%                     4200       189.00
          2nd                          75%                     4500       202.00
          3rd                          85%                     4800       216.00
          4th
                                       90%                     5400          243.00
        onward
Profitability & cash flow
  At the end of 10th year, the total reserves and surplus will                               be
  INR 287.00 million against a share capital investment                                      of
  INR 73.34 million having no outstanding bank borrowing.
  The value of net fixed assets at the end of 10th year will                                 be
  INR 80.00 million and that of current assets will                                          be
  INR. 1255.59 lakhs.
  The operation of the proposed plant provides ample cash surplus                           for
  distribution of hand sum dividend even from 3rd year onward.
Break-even point
  Break-even point of the project is determined in the 2nd year at 75% of
  the installed capacity.
  The break-even point of the projection is at 38% of installed capacity in
  the 2nd year of operation when plant optimizes its production at 4500
  million litres.

Pay back period
  The entire capital investment excluding margin for working capital will
  be paid back within approximately 3 years and 6 months of operation.




                                                      6 of 7
  Proffiille on a 20 KL per day graiin based
  Pro e on a 20 KL per day gra n based
                   diisttiilllattiion uniitt
                   d s a on un                                 June 2005   R K H it ec h Ce nt r e
                                                                           Pvt. Limited
  suiittablle ffor iinsttallllattiion iin Westt Bengall
  su ab e or ns a a on n Wes Benga                                         B-258, Lake Gardens, Kolkata-700045
                                                                           Phone : +91 33 24178067, 24222159
                                                                           Mobile : +91 9830053132
                                                                           E-mail : rkhc_pvtl@yahoo.co.in



Internal rate of return
  IRR is calculated by Yield Method and works out to be 39.5%.
  On an average 39.5% net of tax (based on the Indian corporate taxes)
  will be earned on the invested amount (less of margin for working
  capital) in each year for 10 years, after allowing for the repayment of
  the sum originally invested.

Conclusion
  The installation of the proposed grain/potato based distillation unit
  is financially attractive, which is evident from the financial analysis
  as discussed above, provided best production facilities are installed.




                                                      7 of 7

				
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