dpr on neem oil & neem cake manufacturing unit

financal projections and assumptions

1. ACHARYA N.G.RANGA AGRICULTURAL UNIVERSITY Agricultural college , naira By Ch.Eshwar sai prasad NA/2017-014 ELP unit : Commercial Vermiculture & Biofortified vermicompost production Detailed Project Report On Neem oil & Neem cake manufacturing unit

2. Introduction NEEM OIL : Neem oil is obtained from the crushing of neem seed kernals which has wide range applications in agriculture, pharmaceuticals, cosmetics etc., Azadirachtin is one of the main constituent of the neem oil. Neem seed oil is bitter with garlic/ sulphur smell and contains vitamin E and other essential amino acids. NEEM CAKE: Neem cake is the de-oiled residue that is used after Neem kernels are crushed for their oil. In this kernel, there are some nutrients such as NPK means nitrogen-phosphorus-potassium as well as tri terpenoids and iso prenoids . These nutrients are nematicidal in nature so the Neem cake ends up with these properties.

3. ENTERPRISE AT A GLANCE NAME OF THE ENTERPRISE Esh-Mart enterprises NAME OF THE PROMOTER & BACKGROUND Ch.Eshwar sai prasad , Age: 22 years B.Sc ( Hons ) Agriculture NAME OF THE PRODUCT Neem oil & Neem cake LOCATION OF THE UNIT Visakhapatnam (near rural areas) NUMBER OF WORKING DAYS PER YEAR 300 PRODUCTION CAPACITY 12600 l of neem oil & 18 tons of neem cake PROJECT COST Rs.6,40,650/- BENEFIT COST RATIO 1.38

4. MANUFACTURING PROCESS Collection of raw materials i.e., neem seed kernals Washing of procured neem seed kernals Drying of neem seed kernals Dried seeds are passed trough cleaner for separation of impurities Cleaned neem seed kernals are boiled in boiler After some rime neem seed kernals are passed into the cold press oil expeller for mechanical extraction , necessary temperature is maintained Neem oil is collected from oil expeller The leftover byproduct neem cake is collected and pulverized Oil is filtered through filter press Purified oil is collected Packing in bottles marketing Packed in bags

5. MARKETING ASPECTS Neem oil is also potent element in pest repellent, which ultimately favors the market growth since it encourages neem oil manufacturing. Rising demand from farming community majorly driving the over all growth of this market. During these present days the trend is shifting towards organic agriculture, organic products, fruits, vegetables as people are well conscious about their health.

6. COSTS & CAPITAL INVESTMENT S.No Particular No. of items Price per unit(Rs/-) Total amount (Rs/-) a) Land & building - - - b) Machinery Seed cleaner 1 45000 45000 Steam boiler 1 125000 125000 Cold press oil expeller 1 180000 180000 Oil press filter 1 50000 50000 Motor pump 1 15000 15000 Subtotal 415000

7. S.No Tools & equipment No. of items Price per unit(Rs/-) Total amount (Rs/-) c) Bag sewer 1 1500 1500 Bottle capping machine 1 6000 6000 Synthetic drums 15 300 4500 Buckets 3 200 600 Measuring jars 3 200 600 Sub total 13800 d) Furnitre Wooden table 1 4000 4000 Chairs 3 1500 4500 Sub total 9500 e) Electrification (wiring,lights) - - 6000 Sub total 6000 TOTAL FIXED CAPITAL INVESTMENT ( a+b+c+d+e ) 444300

8. B. Working capital investment (1 month) S.No Particular No. of items Price per unit(Rs/-) Total amount(Rs /-) a) Raw materials Neem seed kernals 3000kg 30/kg 90000 Bottles 1100 5/bottle 5500 Polythene bags 35 20/bag 700 b) Salaries Supervisor 1 20000 20000 Men 2 10000 20000 Women 2 8000 16000 Driver cum helper 1 8000 8000 C) utilities 29650 TOTAL WORKING CAPITAL ( a+b+c ) 189850

9.   C . Pre-operative expenditure S.No Particular Amount (Rs/-) a) Inaugural expenses 2000 b) trail run expenses 4500 TOTAL PRE OPERATIVE EXPENSES( a+b ) 6500 COST OF PRODUCTION (1 MONTH) S.No particular Amount(Rs/-) a) Total working capital investment 189850 b) Inrerest on total investment @14% 7474 c) Depreciation machginery @10% 3458 TOTAL 200782

10. Total project cost S.No particular Amount(Rs/-) A. TOTAL FIXED CAPITAL INVESTMENT 444300 B. TOTAL WORKING CAPITAL INVESTMENT 189850 C. TOTAL PRE OPERATIVE EXPENSES 6500 TOTAL PROJECT COST 640650 Sales revenue Profitability S.No Product Quantity sold Unit price(Rs/-) Amount(Rs/-) 1. Neem oil 1050 Lt 250/lt 262500 2. Neem cake 1500 kg 10/kg 15000 TOTAL 277500 S.No Particular Per month(Rs/-) Per year(Rs/-) a) Total sales 277500 3330000 b) Total costs 200782 2409384 Total ptofit (a-b) 76718 920616

11. FINANCIAL ANALYSIS Short run analysis : Net profit = Gross returns – Total costs = 3330000 – 2409384 = Rs.920616/-   Benefit-Cost Ratio = Gross returns / Total costs = 3330000 / 2409384 = 1.38

12. Net Profit Ratio = Net Profit / Gross returns * 100 = 920616 / 3330000 * 100 = 27 %   Rate Of Returns = Net profit / Total costs * 100 = 920616 / 2409384 * 100 = 38 %   BEP = Fixed costs * 100/ (Fixed costs + Net profit ) = 444300*100/ (444300 + 920616) = 32.5 %

13. Long run analysis Financial projection for 10 years YEAR Fixed costs (Rs/-) Variable costs(Rs/-) Total costs(Rs/-) Returns(Rs/-) net profit year 1 444300 2409384 2853684 3330000 476316.00 year 2 2409384 2409384 3330000 920616.00 year 3 2467104 2467104 3496500 1029396.00 year 4 2524824 2524824 3663000 1138176.00 year 5 2582544 2582544 3829500 1246956.00 year 6 2640264 2640264 3996000 1355736.00 year 7 2697984 2697984 4162500 1464516.00 year 8 2736384 2736384 4162500 1426116.00 year 9 2774784 2774784 4162500 1387716.00 year 10 2813184 2813184 4162500 1349316.00

14. Long run analysis : S.No parameter value A) Undiscounting techniques 1. Avetage rate of Returns (ARR) 44.50 % 2. Pay Back Period (PBP) 1.178 years B) Discounting techniques 1. Net present Worth (NPW) Rs.6169594/- 2. Benefit Cost Ratio (BCR) 1.366 3. Internal Rate of Returns (IRR) 13.84% 4. Profitabilty Index (PI) 9.63

15. S W O T WEAKNESSES Lack of consolidation of industry. Lack of awareness to farmers about the benefits of neem oil THREATS Fear of aflotoxin contamination Intense competetion from rival brands STRENGTHS Availabilty of good raw materials Availabilty o skilled labour Availabilty of good infrastructure OPPORTUNITIES Market expansion globally for neem oil Trend shifting towards organic agriculture SWOT

16. Presented by Ch.Eshwar prasad Chairman & Managing Director Esh -Mart enterprises References : J-Gate (consortium for e-resources in agriculture) ANGRAU manual on Agribusiness management Springer.com Agriculture economics by Subbareddy , Raghuram , Neelakantasasrhry , Bhavani devi

17. THANK YOU