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MINI DAL MILL

INTRODUCTION

India is the largest producer of pulses around 14.5 million tones annually. Pulses commonly
known as dal in India are an important component of both the vegetarian as well as the non-
vegetarian diet in India. Among the North Eastern States, Assam is the largest producer of
pulses.
THE PROJECT

Pulses constitute one of the main sources of protein in the Indian diet. There are different
varieties of pulses namely Chana, Mung, Masur, Urad and Tuvar dal. Of these, Mung and Masur
dal are predominantly consumed in the North Eastern States. The conversion of pulse grains into
dal through the process of milling. Wherein dal is split into smaller sizes rendering it convenient
for cooking. It is one of the important food processing industry usually in the medium and small-
scale sector, some quantity is also processed in the rural sector manually producing inferior
quality dal resulting in lesser revenue earning compared to milled dal.
MARKET POTENTIAL

The all India per capita consumption of pulses is about 2.8 kg per year. In the north-eastern
region, consumption of pulses is generally higher especially in States like Assam and Manipur.
Conservatively, taking the national consumption norm of 2.8 kg and considering the total
population of 365 lakhs in the north-eastern region, the demand for pulses is estimated at
1,02,000 tonne per year. There is no organized dal milling activity in the north-eastern region. In
rural areas, sometimes dal milling is carried out in rice hullers. However, generally raw dal is
processed in unit in nearby areas of West Bengal and milled dal re-enters the north-eastern
states. The total production of pulses in north-eastern region is about 85,000 tonne per year,
assuming that 80% of this quantity is available for dal milling, that the new tiny units process 15%
of the available dal, there is scope for over 15 tiny units with annual milling capacity of 700 tonne
of dal to be set up.
SUGGESTED CAPACITY

In assessing the proposed plant capacity due consideration is given to availability of raw material,
market and basic infrastructure like power etc. a typical dal milling until is envisaged to produce
500 MT per annum on the following basis:

Production Capacity : 159 kg/hr.
Number of Shifts : 2
Daily production capacity : 2.53 tonne
Capacity utilization : 70%
Working days per annum : 300
Annual Production : 6%
Loss during dehusking : 6%
Net Production : 500 tonne/annum

INFRASTRUCTURE REQUIREMENT
Covered Area : 750 Sq. ft.
Power requirement : 25 KW
Water : Minimal

RAW MATERIAL AND ITS AVAILABILITY
More than 80% of the total production of pulses in the North Eastern Region comes from Assam.
Pulses are grown in more or less all the North Eastern States. The state-wise production of
pulses is as under:
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State Tonne/Year

Arunachal Pradesh 5000
Assam 60000
Meghalaya 2000
Nagaland 7000
Tripura 5000
Mizoram 6000
Total: 85000/-
SUGGESTED LOCATION
A dal milling unit should be located in a urban/semi-urban area which has access to raw material,
skilled manpower and market. However, the following tentative suggestion can be taken into
consideration.

Assam Barpeta, Haflong, Mangaldoi, Nagaon,
Nalbari, Silchar
Manipur Imphal, Chandel Senapati
Nagaland Dimapur
Tripura Agartala
Sikkim Rumitek, Dentam, Brang, Somgochoo
PRODUCTION PROCESS

The important steps involved in the process are

1. Cleaning
2. Milling
3. Dehusking and cleaning
4. Weighing and Packing
PROJECT ECONOMICS
TOTAL CAPITAL REQUIREMENTS

A. Fixed Capital (Rs. in lakh)

1. Land Own
2. Site Development 0.45
3. Building (working shed 750 Sq.ft. 4.87
Raw material godown, finished product
Godown, Office room)
4. Plant and Machinery 1.84
5. Misc. Fixed Assets 0.50
6. Preliminary/Pre-operative expenses 0.30
Total (A): 7.96

B. Working Capital Requirement

Sl. No. Norms Amount
(Rs.in lakh)
1. Raw material and
Consumables 1 month 9.23
2. Finished goods 1 week 2.87
3. Working expenses 1 month 0.42
4. Receivables 1 week 2.93
Total (B): 15.45


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*Working Capital to be financed as

Margin Money Rs. 3.86 lakh
Bank Finance Rs 11.59 lakh
MEANS OF FINANCE

Term Loan(75%) Rs. 5.97 lakh
Promoters Equity(25%) Rs. 1.99 lakh
Rs. 7.96 lakh
COST OF PRODUCTION AND PROFITABILITY

A. Capacity Utilisation : 70%
B. Output (MT) : 500 MT/annum
C. Annual Revenue : Rs. 135.00 lakhs

The cost of various types of pulses varies from Rs. 20 to Rs. 30/Kg, so an average cost
of Rs. 27,000 per tonne is taken into consideration. The annual sales revenue for 500 MT
is estimated at Rs. 135 lakhs.
COST OF PRODUCTION
(Rs. in lakh)
1. Raw material and consumables 110.75
2. Utilities 3.34
3. Wages and Salaries 1.38
4. Plant Overheads and repairing & maintenance 0.35
5. Depreciation 0.70
6. Administrative Expenses 0.36
7. Interest 2.46
8. Selling expenses @ 5% of annual sales 6.75
Rs. 126.09 lakhs

Operating profit Rs. 8.91 lakhs
Return on Sales 66%
MACHINERY AND EQUIPMENT
The main equipments required are

1. Automatic Dal Mill plant with 25 HP Motor 1 No.
2. Weighing Scales 2 Nos.
3. Storage equipments 5 Nos.

The total cost of equipments have been estimated as Rs. 1.84 lakhs

MANPOWER REQUIREMENT & WAGES
Sl. No. Category Nos. Average Salary/
person/month(Rs)
Total monthly
Salaries(Rs)
1. Manager 1 3,500 3,500
2. Skilled Worker 1 2,000 2,000
3. Unskilled workers 4 1,500 6,000
Total: 11,500

Total Annual Salary Rs. 1.38 lakhs


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COST OF RAW MTERIAL & CONSUMABLES

The cost of raw material and consumables are as follows:

1. Dal (various quality) @ of Rs. 25,000/- Rs. 110.00 lakhs
2. Packing material (Lumpsum) Rs. 0.75 lakh
Total: Rs. 110.75 lakhs
COST OF UTILITIES AND OVERHEAD
The power requirement for the milling plant:
1. For running the automatic dal mill with 25 HP Motor : 18.65 Hwh
2. For internal lighting + general load : 6 Kw
24.65 KW
Say 25 KW

The total daily requirement of power
(26 Kw 16 hrs 2 shifts) 8) = 320 Kwh
The daily power bill (320 Kwh Rs. 4) = Rs. 1280/-
Total cost of power per annum (i.e. 300 working days) = Rs. 3.84 lakhs
PLANT OVERHEADS
Sl. No. Items Amount (Rs. in lakhs)
1. Repair and Maintenance
(a) 1% on cost of civil works
(b) 2% on Plant and M/c.
(c) 1% on Misc. fixed assets

0.05
0.03
0.01
Sub-Total: 0.09
2. Insurance on Plant Assets
2% on building, Plant & M/c. miscellaneous fixed assets
0.14
Total: 0.23
At 70% capacity utilization = 0.16%
BREAK EVEN POINT ANALYSIS
(Rs. in lakhs)
A. Variable Cost:
Raw Materials and consumables 110.75
Utilities 3.34
Selling Expenses 6.75
Total (A) 120.84

B. Semi-variable Cost
Wages and Salaries 1.38
Repair and Maintenance 0.35
Administrative Expenses 0.36
Depreciation 0.70
Interest 2.46
Total (B) 5.25

C. Sales Realisation 135.00
D. Contribution 14.16
E. Break Even Point = B/D x 70% 26%
MACHINERY SUPPLIERS
1. M/s. Archana Machinery Stores
A.T. Road, Guwahati
2. M/s. DIW Hindustan Industrial Works
Post Box No. 12, Dahanu Road
Dist: Thane (Maharashtra)