PROJECT REPORT

Of

JAGGERY MANUFACTURING

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding JAGGERY MANUFACTURING UNIT

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in

project identification for investment and in order to serve his objective; the document covers various
aspects of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : [email protected]
Contact : +91 7526000333, 444, 555
 PROJECT AT A GLANCE

1 Name of the Entreprenuer XXXXXXX

2 Constitution (legal Status) : XXXXXXX

3 Father's/Spouce's Name XXXXXXXX

4 Unit Address : XXXXXXXX

Taluk/Block:
District : XXXXX
Pin: XXXXX State:
E-Mail : XXXXX
Mobile XXXXX

5 Product and By Product : Jaggery

6 Name of the project / business activity proposed : Jaggery

7 Cost of Project : Rs12.77 lac

8 Means of Finance
Term Loan Rs.6.32 Lacs
KVIC Margin Money - As per Project Eligibility
Own Capital Rs.1.28 Lacs
Working Capital Rs.5.17 Lacs

9 Debt Service Coverage Ratio : 6.92

10 Pay Back Period : 5 Years

11 Project Implementation Period : 6 Months

12 Break Even Point : 25%

13 Employment : 12 Persons

14 Power Requirement : 40.00 HP

15 Major Raw materials : Sugar Cane

16 Estimated Annual Sales Turnover : 63.48 Lacs

16 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lacs)

Particulars Amount
Land Rented/Owned
Building & Civil Work 3.00
Plant & Machinery 3.28
Furniture & Fixtures 0.74
Working Capital Requirement 5.75
Total 12.77

MEANS OF FINANCE
Particulars Amount
Own Contribution @10% 1.28
Term Loan 6.32
Workign Capital Finance 5.17
Total 12.77

General Special
Beneficiary's Margin Monery 10% 5%
(% of Project Cost)
 Jaggery Extraction Unit

INTRODUCTION
Sugar industry in India is a well-developped industry and one of the largest after textiles. It
provides rural employment opportunities and plays an important role in Indian economy.
Jaggery is also manufactured from sugarcane juice and is very widely used not only in
individual households but also in many eateries, restaurants, clubs and hostels and it has
certain industrial applications as well. Manufacture of sugar involves many technical aspects
and the capital investment is also on the higher side. Compared to this, production of jiggery
is very simple and the capital cost is also very limited. Due to its wide applications, the
market for jaggery is continuously growing.

PRODUCTS
Jaggery is a typical Indian product with several uses in daily food preparations and it is also
used to make many sweet food preparations. This is a product with scattered market and
can be manufactured in the states like Maharashtra, UP, Gujarat, Bihar, Jharkhand etc.

MARKET POTENTIAL

The demand for jaggery is steadily growing many folds in the urban, rural and semi-urban
areas. There are several applications of jaggery and almost all Indian households use it on
day-to-day basis. Market for jaggery is round the year whereas its production is only during
the sugarcane season and thus factory works for around 6 to 7 months every year. Apart
from individual households, it is used in large quantities in restaurants, road-side dhabas,
other eateries, hostels and clubs and by caterers. It has shelf-life of more than couple of
months. Its production is undertaken at several places but Maharashtra, Uttar Pradesh,
Bihar and Tamil Nadu are the leading manufacturers. In view of constantly growing market,
it should not be difficult for a new entrant to enter and capture the market.
MANUFACTURING PROCESS

Jaggery manufacturing is done on a small scale by a group of farmers. The juice is extracted
from fresh sugarcane. Then it is filtered and boiled in wide, shallow iron pans with continous
stirring and, simultaneously soda or bhindi juice is added in required quantity. While
boiling,brownish foams come at the top which are continuously removed to get golden
yellow colour of jaggery. The consistency of the juice becomes thick and then it is poured
into the small to medium sized iron or aluminum cans where blocks of jaggery are formed
after cooling. Size of the blocks can vary from 1 kg. to 12 kgs. Finally, these blocks are
packed in gunny bags.
From 100 kgs. of sugarcane, 10 kgs. of jaggery is made. The process flow chart is as under:

• Juice Extraction
• Filtration and Boiling
• Cooling and Packing
The main raw material is sugarcane with minimum 19.0 Brix reading. The extraction of juice
from the sugarcane works out to about 45%. The states of Bihar and Jharkhand produce
large quantity of sugarcane and availability should not be a bottleneck. Other materials like
soda/bhindi juice shall be available locally. Gunny bags of different capacity shall be the
packing material.

CLARIFICATION OF JUICE:

• The sugar juice contains colloidal matter, inorganic salts, fiber, various nitrogenous
substances, lipids, gums, wax organic acid, inorganic acid, pectin etc. All these impurities
removed totally or partially in this clarification process.
• In the clarification process generally used two types of clarificants are used they
are Organic Clarificants and Inorganic Clarificants. In organic clarificants are form
 vegetable origin like Bendi, Sulkali and Doela. Inorganic clarificants used like Lime,
Hydrous Power and super phosphate.
• The screen juice taken in open pan and firing starts slowly so that dissolved air escaped
and gummy, colloidal substances get coagulated by the adding of clarificants as per
requirement. It comes at top surface of the juice know as scum and it is removing
continuously . In this process temperature requirement is 70oC to 800
• First added vegetable origin simultaneously small quantity of lime water is added to
reduce the acidity of juice but not to the extent to make juice neutrals because taste and
colour of gur produced will be inferior. In this lime process pH maintained 6.2 to 6.5. In
some cases super phosphate. P2O5, and 0.25% concentrated hydrous power are also
added to obtain good colour of Gur (jaggey). While juice temperature rising scum is
removed by perforated strainers.

CONCENTRATION OF JUICE:

After clarification completed by vigorous boiling, temperature of boiling mass is around 110
to 115o Boiling take place about 2 to 3 hours. The stage at which semi fluid material is
formed then it is transferred rectangular boxes or Bucket shape boxes as per requirement.
This mass is allowed to cool for solid form.

COMPOSITION AND SPECIFICATION OF JAGGERY (GUR):

• It contains all the nutrients and substances present in cane juice. The nutrient value of
jaggery is slightly higher than that of crystalline sugar because it contains all
constituents which are normally separated in molasses in manufacturing of sugar.
• Recovery of jaggery in the range from 8 to 12% that depending upon the total solids in
cane.
• Jaggery graded in the market according to basis of colour, taste, hardness and
crystalinity which is judged by visual appearance. While in practically graded of jaggery
should be consider sucrose %, reducing sugar, moisture and colour.

STORAGE OF JAGGERY:
Jaggery is consumed throughout the year in daily regular practice. The jaggery detoriates
faster in monsoon season when relative humidity is more than 70%. During this season gur
absorbs moisture from the atmosphere and becomes viscous and dark colour. Hence jaggery
blocks packed in gunny bags along with water proof sheet.
ORGANIC JAGGERY MAKING PROCESS:
In Manufacturing of organic Jaggery taking care from growing of sugar cane. In sugar cane
cultivation maximum used only natural organic fertilizers like cow dung.
The difference between organic and commercial jaggery making is mainly in clarification
process. In organic jaggery making process used only organic clarificants and little bit
of lime to decrease the acidity of juice. So organic jaggery colour having dark when compare
with commercial jaggery.

PLANT & MACHINERY

PARTICULARS QTY. RATE AMOUNT IN RS.

50000.00 100000.00
Double Roller Sugar Cane Crushers with 2HP Motors 2.00
10000.00 40000.00
Plastic Juice Storage Tanks 3x2x1 Mts 4.00

1.5 mts Iron Pan with 2-3 handles 1.00 25000.00 25000.00

Storage Tank 1.00 35000.00 35000.00

Strong Iron Scrappers with Long handle 4.00 2000.00 8000.00

Sealing Packing fillingMachine 1.00 5,000.00 5,000.00

Weighing scale 1.00 15,000.00 15,000.00

Misc tools and Equipments LS 1,00,000.00 1,00,000.00

TOTAL 3,28,000.00
PROJECTED BALANCE SHEET

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

SOURCES OF FUND

Capital Account 1.28 1.28 1.28 1.28 1.28

Retained Profit 11.46 24.18 37.96 52.54 67.78

Term Loan 6.32 4.74 3.16 1.58 - 0.31

Cash Credit 5.17 5.17 5.17 5.17 5.17
Sundry Creditors 0.84 0.98 1.12 1.19 1.26
Provisions & Other Liab 0.36 0.40 0.44 0.48 0.53

TOTAL : 25.43 36.75 49.13 62.24 75.71

APPLICATION OF FUND

Fixed Assets ( Gross) 7.02 7.02 7.02 7.02 7.02

Gross Dep. 0.83 1.59 2.25 2.83 3.33
Net Fixed Assets 6.19 5.43 4.77 4.19 3.69

Current Assets
Sundry Debtors 2.12 2.58 2.95 3.15 3.33
Stock in Hand 4.47 5.22 5.96 6.34 6.71
Cash and Bank 10.15 20.77 32.42 45.24 58.32
Deposits & Advances 2.50 2.75 3.03 3.33 3.66

TOTAL : 25.43 36.75 49.13 62.24 75.71

- - - - -
PROJECTED CASH FLOW STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

SOURCES OF FUND

Share Capital 1.28 -

Reserve & Surplus 11.46 14.13 17.23 18.23 19.05
Depriciation & Exp. W/off 0.83 0.76 0.66 0.58 0.50
Increase in Cash Credit 5.17 - - - -
Increase In Term Loan 6.32 - - - -
Increase in Creditors 0.84 0.14 0.14 0.07 0.07
Increase in Provisions 0.36 0.04 0.04 0.04 0.05

TOTAL : 26.26 15.06 18.07 18.92 19.67

APPLICATION OF FUND

Increase in Fixed Assets 7.02 - - - -

Increase in Stock 4.47 0.75 0.75 0.37 0.37
Increase in Debtors 2.12 0.46 0.37 0.19 0.19
Increase in Deposits & Adv 2.50 0.25 0.28 0.30 0.33
Repayment of Term Loan - 1.58 1.58 1.58 1.89
Taxation - 1.41 3.45 3.65 3.81

TOTAL : 16.11 4.45 6.42 6.09 6.59

Opening Cash & Bank Balance - 10.15 20.77 32.42 45.24

Add : Surplus 10.15 10.61 11.65 12.82 13.08

Closing Cash & Bank Balance 10.15 20.77 32.42 45.24 58.32
PROJECTED PROFITABILITY STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

A) SALES
Gross Sale 63.48 77.41 88.54 94.39 99.96

Total (A) 63.48 77.41 88.54 94.39 99.96

B) COST OF SALES

Raw Mateiral Consumed 36.00 42.00 48.00 51.00 54.00

Elecricity Expenses 3.44 4.01 4.58 4.87 5.16
Repair & Maintenance - 0.77 0.89 0.94 1.00
Labour & Wages 8.18 9.00 9.90 10.89 11.98
Depriciation 0.83 0.76 0.66 0.58 0.50
Consumables and Other Expenses 1.27 1.55 1.77 1.89 2.00
Cost of Production 49.72 58.09 65.80 70.17 74.64

Add: Opening Stock /WIP - 2.67 3.12 3.56 3.79

Less: Closing Stock /WIP 2.67 3.12 3.56 3.79 4.01

Cost of Sales (B) 47.05 57.65 65.36 69.95 74.42

C) GROSS PROFIT (A-B) 16.44 19.76 23.18 24.44 25.54

26% 26% 26% 26% 26%
D) Bank Interest (Term Loan ) 0.54 0.66 0.48 0.30 0.11
Bank Interest ( C.C. Limit ) 0.52 0.52 0.52 0.52 0.52
E) Salary to Staff 2.64 2.90 3.19 3.51 3.87
F) Selling & Adm Expenses Exp. 1.27 1.55 1.77 1.89 2.00

TOTAL (D+E) 4.97 5.63 5.96 6.21 6.49

H) NET PROFIT 11.46 14.13 17.23 18.23 19.05

I) Taxation - 1.41 3.45 3.65 3.81

J) PROFIT (After Tax) 11.46 12.72 13.78 14.58 15.24

COMPUTATION OF MANUFACTURING OF JAGGERY

Items to be Manufactured Jaggery

Manufacturing Capacity per day - 1.35 MT

-
No. of Working Hour 8

No of Working Days per month 25

No. of Working Day per annum 150

Total Production per Annum 202.50 MT

Year Capacity MT
Utilisation

IST YEAR 60% 122

IIND YEAR 70% 142
IIIRD YEAR 80% 162
IVTH YEAR 85% 172
VTH YEAR 90% 182

COMPUTATION OF RAW MATERIAL

Item Name Quantity of Recovery Unit Rate of Total Cost

Raw Material / MT Per Annum (100%)
MT
Raw Material Sugarcane 100% 2,000.00 10% 3,000.00 60.00

Total (Rounded off in lacs) 60.00

Annual Consumption cost ( In Lacs) 60.00

Raw Material Consumed Capacity Amount (Rs.)

Utilisation

IST YEAR 60% 36.00

IIND YEAR 70% 42.00
IIIRD YEAR 80% 48.00
IVTH YEAR 85% 51.00
VTH YEAR 90% 54.00
COMPUTATION OF SALE

Particulars IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Op Stock - 6 7 8 9

Production 122 142 162 172 182

122 148 169 180 191

Less : Closing Stock 6 7 8 9 9

Net Sale 115 141 161 172 182

Sale Price per MT 55,000.00 55,000.00 55,000.00 55,000.00 55,000.00

Sale (in Lacs) 63.48 77.41 88.54 94.39 99.96

COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day Hours 8

Electric Load Required 40
Load Factor 0.7460
Electricity Charges per unit 8.00
Total Working Days 300
Electricity Charges ( 8 Hrs Per day ) 5,72,928.00

Add : Minimim Charges (@ 10%)

(B) D.G. SET

No. of Working Days 300 days
No of Working Hours - Hour per day
Total no of Hour -
Diesel Consumption per Hour 8
Total Consumption of Diesel -
Cost of Diesel 65.00 Rs. /Ltr
Total cost of Diesel -
Add : Lube Cost @15% -
Total -

Total cost of Power & Fuel at 100% 5.73

Year Capacity Amount

(in Lacs)

IST YEAR 60% 3.44

IIND YEAR 70% 4.01
IIIRD YEAR 80% 4.58
IVTH YEAR 85% 4.87
VTH YEAR 90% 5.16
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Finished Goods
(15 Days requirement) 2.67 3.12 3.56 3.79 4.01
Raw Material
(15 Days requirement) 1.80 2.10 2.40 2.55 2.70

Closing Stock 4.47 5.22 5.96 6.34 6.71

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Total
Amount
Stock in Hand 4.47

Sundry Debtors 2.12

Total 6.59
Sundry Creditors 0.84

Working Capital Requirement 5.75

Margin 0.57

Working Capital Finance 5.17

BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary

Skilled Worker 8,000.00 4 32,000.00

Unskilled Worker 5,000.00 6 30,000.00

62,000.00
Add: 10% Fringe Benefit 6,200.00
Total Labour Cost Per Month 68,200.00
Total Labour Cost for the year ( In Rs. Lakhs) 8.18

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Manager 12,000.00 1 12,000.00
Accountant 8,000.00 1 8,000.00

Total Salary Per Month 20,000.00

Add: 10% Fringe Benefit 2,000.00

Total Salary for the month 22,000.00

Total Salary for the year ( In Rs. Lakhs) 2.64

COMPUTATION OF DEPRECIATION

Description Land Building/shed Plant & Furniture TOTAL

Machinery

Rate of Depreciation 10.00% 15.00% 10.00%

Opening Balance Leased - - - -
Addition - 3.00 3.28 0.74 7.02
- 3.00 3.28 0.74 7.02
Less : Depreciation - 0.30 0.49 0.04 0.83
WDV at end of Ist year - 2.70 2.79 0.70 6.19
Additions During The Year - - - - -
- 2.70 2.79 0.70 6.19
Less : Depreciation - 0.27 0.42 0.07 0.76
WDV at end of IInd Year - 2.43 2.37 0.63 5.43
Additions During The Year - - - - -
- 2.43 2.37 0.63 5.43
Less : Depreciation - 0.24 0.36 0.06 0.66
WDV at end of IIIrd year - 2.19 2.01 0.57 4.77
Additions During The Year - - - - -
- 2.19 2.01 0.57 4.77
Less : Depreciation - 0.22 0.30 0.06 0.58
WDV at end of IV year - 1.97 1.71 0.51 4.19
Additions During The Year - - - - -
- 1.97 1.71 0.51 4.19
Less : Depreciation - 0.20 0.26 0.05 0.50
WDV at end of Vth year - 1.77 1.46 0.46 3.69
REPAYMENT SCHEDULE OF TERM LOAN 11.5%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

IST YEAR Opening Balance
Ist Quarter - 6.32 6.32 - - 6.32
Iind Quarter 6.32 - 6.32 0.18 - 6.32
IIIrd Quarter 6.32 - 6.32 0.18 - 6.32
Ivth Quarter 6.32 - 6.32 0.18 - 6.32
0.54 -
IIND YEAR Opening Balance
Ist Quarter 6.32 - 6.32 0.18 0.39 5.92
Iind Quarter 5.92 - 5.92 0.17 0.39 5.53
IIIrd Quarter 5.53 - 5.53 0.16 0.39 5.13
Ivth Quarter 5.13 5.13 0.15 0.39 4.74
0.66 1.58
IIIRD YEAR Opening Balance
Ist Quarter 4.74 - 4.74 0.14 0.39 4.34
Iind Quarter 4.34 - 4.34 0.12 0.39 3.95
IIIrd Quarter 3.95 - 3.95 0.11 0.39 3.55
Ivth Quarter 3.55 3.55 0.10 0.39 3.16
0.48 1.58
IVTH YEAR Opening Balance
Ist Quarter 3.16 - 3.16 0.09 0.39 2.76
Iind Quarter 2.76 - 2.76 0.08 0.39 2.37
IIIrd Quarter 2.37 - 2.37 0.07 0.39 1.97
Ivth Quarter 1.97 1.97 0.06 0.39 1.58
0.30 1.58
VTH YEAR Opening Balance
Ist Quarter 1.58 - 1.58 0.05 0.39 1.18
Iind Quarter 1.18 - 1.18 0.03 0.39 0.79
IIIrd Quarter 0.79 - 0.79 0.02 0.55 0.24
Ivth Quarter 0.24 0.24 0.01 0.55 - 0.31
0.11 1.89
CALCULATION OF D.S.C.R

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

CASH ACCRUALS 12.29 13.48 14.44 15.16 15.74

Interest on Term Loan 0.54 0.66 0.48 0.30 0.11

Total 12.84 14.13 14.92 15.45 15.85

REPAYMENT
Instalment of Term Loan 1.58 1.58 1.58 1.89 1.89
Interest on Term Loan 0.54 0.66 0.48 0.30 0.11

Total 2.12 2.24 2.06 2.18 2.00

DEBT SERVICE COVERAGE RATIO 6.04 6.32 7.26 7.07 7.93

AVERAGE D.S.C.R. 6.92

BREAK EVEN POINT ANALYSIS

Year I II III IV V

Net Sales & Other Income 63.48 77.41 88.54 94.39 99.96
Less : Op. WIP Goods - 2.67 3.12 3.56 3.79
Add : Cl. WIP Goods 2.67 3.12 3.56 3.79 4.01

Total Sales 66.16 77.85 88.99 94.61 100.18

Variable & Semi Variable Exp.

Raw Material & Tax 36.00 42.00 48.00 51.00 54.00

Electricity Exp/Coal Consumption at 85% 2.92 3.41 3.90 4.14 4.38
Manufacturing Expenses 80% 1.02 1.86 2.13 2.27 2.40
Wages & Salary at 60% 6.49 7.14 7.86 8.64 9.51
Selling & adminstrative Expenses 80% 1.02 1.24 1.42 1.51 1.60
Intt. On Working Capital Loan 0.52 0.52 0.52 0.52 0.52
Total Variable & Semi Variable Exp 47.97 56.17 63.81 68.08 72.41

Contribution 18.19 21.68 25.18 26.54 27.77

Fixed & Semi Fixed Expenses

Manufacturing Expenses 20% 0.25 0.46 0.53 0.57 0.60

Electricity Exp/Coal Consumption at 15% 0.52 0.60 0.69 0.73 0.77
Wages & Salary at 40% 4.33 4.76 5.24 5.76 6.34
Interest on Term Loan 0.54 0.66 0.48 0.30 0.11
Depreciation 0.83 0.76 0.66 0.58 0.50
Selling & adminstrative Expenses 20% 0.25 0.31 0.35 0.38 0.40
Total Fixed Expenses 6.73 7.56 7.95 8.31 8.73

Capacity Utilization 60% 70% 80% 85% 90%

OPERATING PROFIT 11.46 14.13 17.23 18.23 19.05
BREAK EVEN POINT 22% 24% 25% 27% 28%
BREAK EVEN SALES 24.46 27.12 28.10 29.63 31.47
 DISCLAIMER

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