Project report for Banana chips manufacturing

Introduction

We Indians are crazy when it comes about snacking and its varieties. Though we are known for our diverse cultures, the one thing which keeps us going is love for a variety of snacks from each state. We can say “divided by states, united by snacks”. The Indian chips market has shown remarkable growth in the past couple of years. The market is forecast to grow with a CAGR of more than 9% in the near future. Currently, the growing young population (below 15 years) represents a key segment for the potato chips market. Major factors driving the global demand of potato chips are growing urbanisation, the rise in disposable incomes and rapidly changing lifestyles. A busy lifestyle coupled with long working hours have forced people to shift from elaborate luncheons and meals to desk snacks and packaged foods. Snack companies are branching out from original recipes and launching line extensions that deliver interesting ingredients, flavours, and textures to consumers looking for new experiences or alternative ingredients for health reasons...

Product / Services & process

The product we are focusing is the banana chips -the ethnic snack of Kerala. In the banana processing sector, only 3-4% of the total production is processed. The banana processed products mainly consists of banana chips. Majority of the chips are produced from Nendran banana, however, Robusta and Monthan banana fruits are also being processed as chips to some extent in Maharashtra and Tamil Nadu states. Banana  chips  are  deep-fried  and/or  dried  slices  of  bananas.  They  can  be  covered  with sugar or honey or they can be flavoured with spices (tomato, Chilli, plain salted, Mexican, Italian etc.) or Variants of banana chips may be covered with chocolate, cream etc.

Market potential & Strategy

While fresh bananas are widely available, banana chips are not easily available in many  parts  of  the  country.  Making  chips  increases  the  shelf  life  of  the  product  in  times of abundant harvest and provide an opportunity to increases the income levels, perhaps if the farmers are able to find a market rather than go for distress sale. If the entrepreneur wishes to sell direct to the end customer, then the location with the highest traffic should be chosen. This will generally mean higher expenses in the form of rent. If the entrepreneur wishes to sell through shops, hotels or clubs, then the business can be started from the production site however the entrepreneur will have to accept a lower mark-up to allow for a margin to be made for the shop owner.By enhancing the disribution channel , we can tap into new markets and ptential markets. The health aspect of the banana chps can be a new strategy to increase the sales. One of the major benefits of consuming banana chips is their fiber content...

PROJECT REPORT

Banana chips manufacturing

address

Introduction

We Indians are crazy when it comes about snacking and its varieties. Though we are known for our diverse cultures, the one thing which keeps us going is love for a variety of snacks from each state. We can say “divided by states, united by snacks”. The Indian chips market has shown remarkable growth in the past couple of years. The market is forecast to grow with a CAGR of more than 9% in the near future. Currently, the growing young population (below 15 years) represents a key segment for the potato chips market. Major factors driving the global demand of potato chips are growing urbanisation, the rise in disposable incomes and rapidly changing lifestyles. A busy lifestyle coupled with long working hours have forced people to shift from elaborate luncheons and meals to desk snacks and packaged foods. Snack companies are branching out from original recipes and launching line extensions that deliver interesting ingredients, flavours, and textures to consumers looking for new experiences or alternative ingredients for health reasons.Indian Snacks Market is growing due to following factors growing middle-class population, lifestyle changes, rising urbanization, local availability and availability of snacks in small package Size, low Price and company’s strategies to focus on regional taste.

India is the largest producer of banana in the world and about 90% of banana produced is consumed domestically as fresh fruit. Merely 5% is consumed in processed form providing a good potential for future processing. About 2.5% is only processed purely as banana products and the rest as an ingredient in other foods. About 17 varieties of products could be made from banana. The primary product of banana in market is “fried chips and candy” which constitute around 31%, rest as banana puree 9%, banana pulp 3%, banana beer 3%, banana wafers 3%, banana powder 6% and others.Healthy snacks are likely to enhance a greater demand for low-calorie, healthy and fiber-rich snacks. The Indian snacks market in the year 2009-10 was estimated to be worth Rs. 150 billion with the organized segment accounting for half of the market share and growing at a rate of 15-20%. The share of unorganized sector on the other hand being roughly Rs. 75 billion with growth at a rate of 7-8%.

Product / Services & process

The product we are focusing is the banana chips -the ethnic snack of Kerala. In the banana processing sector, only 3-4% of the total production is processed. The banana processed products mainly consists of banana chips. Majority of the chips are produced from Nendran banana, however, Robusta and Monthan banana fruits are also being processed as chips to some extent in Maharashtra and Tamil Nadu states. Banana  chips  are  deep-fried  and/or  dried  slices  of  bananas.  They  can  be  covered  with sugar or honey or they can be flavoured with spices (tomato, Chilli, plain salted, Mexican, Italian etc.) or Variants of banana chips may be covered with chocolate, cream etc.

Market potential & Strategy

While fresh bananas are widely available, banana chips are not easily available in many  parts  of  the  country.  Making  chips  increases  the  shelf  life  of  the  product  in  times of abundant harvest and provide an opportunity to increases the income levels, perhaps if the farmers are able to find a market rather than go for distress sale. If the entrepreneur wishes to sell direct to the end customer, then the location with the highest traffic should be chosen. This will generally mean higher expenses in the form of rent. If the entrepreneur wishes to sell through shops, hotels or clubs, then the business can be started from the production site however the entrepreneur will have to accept a lower mark-up to allow for a margin to be made for the shop owner.By enhancing the disribution channel , we can tap into new markets and ptential markets. The health aspect of the banana chps can be a new strategy to increase the sales. One of the major benefits of consuming banana chips is their fiber content. Banana chips also serve as a source of iron, an essential mineral that benefits the health. Iron helps form hemoglobin and myoglobin, two proteins that provide tissues with a fresh supply of oxygen. Banana chips -- like whole bananas -- boost the intake of potassium.  There  exists  a  strong  demand  for  banana  chips  as  most  people  enjoy  eating snacks.

Project at a glance

Name & Address of Unit

Banana chips manufacturing

address

Details of unit
Phone : 122345
Constitution : Proprietership
Total project cost : *******
Fixed Capital : *******
Working Capital : *******
Total Bank loan : *******
Promoter(s) contribution : *******
Term loan : *******
Name & address of promoter(s)
Name : Your name
Designation : Founder

Project Feasibility Ratio

Debt Service Coverage Ratio (Average) :1.87
Current ratio (Average) :2.63
Year 1Year 2Year 3Year 4Year 5
Current ratio 1.53 2.06 2.62 3.19 3.76
Quick ratio 1.13 1.56 2.10 2.64 3.18
Interest coverage ratio 3.87 5.55 7.00 9.48 14.71
Debt equity ratio 2.863 2.080 1.528 1.020 0.542
TOL/TNW 3.02 1.45 0.79 0.43 0.21
DSCR 1.65 1.86 1.90 1.94 1.97
Gross profit Sales Percentage % 29.23 % 28.54 % 28.18 % 27.86 % 27.50 %
Net profit Sales Percentage % 10.84 % 10.56 % 11.10 % 11.57 % 11.90 %
BEP in % of installed capacity % 49.90 % 27.12 % 27.12 % 27.12 % 27.12 %
BEP in sales of Rs 2,620,800.00 1,840,695.65 1,972,173.91 2,103,652.17 2,235,130.43
Return On Capital Employed 0.26 0.34 0.34 0.33 0.33

Project Feasibility graph

Revenue v/s Expense Expense Splitup
 
Revenue
 
Expense
Net profit Sales % Quick ratio

Project Cost

Sl. no Item Amount Rs
1 Working Capital *******
Total *******

 

Working Capital Computation

Sl. no Item Amount Rs
1 Consumables / stock in hand *******
2 Work in progress *******
3 Finished goods *******
4 Working expense. *******
5 Receivables/Sundry debtors *******
6 Payables *******
7 Total working capital *******
8 Own Contribution *******

Total Yearly Expense

Sl. no Item Amount Rs
Total *******

Application of Fund

Sl. no Item Subsidy % No. Rate Amount Rs
Total Investment *******
Total Subsidy *******
Net Investment *******

Means of Finance

Sl. no Item Amount
1 Term Loan *******
2 Working capital Loan *******
3 Total loan *******
4 Term Loan contribution *******
5 Working capital contribution *******

Profitability Statement

Year 1(!*) Year 2 Year 3 Year 4 Year 5
Revenue from operation
Sales ***** ***** ***** ***** *****
Add :
Closing stock 0.00 0.00 0.00 0.00 0.00
Total ***** ***** ***** ***** *****
Less :
Opening stock 0.00 0.00 0.00 0.00 0.00
Stock purchase ***** ***** ***** ***** *****
Salary ***** ***** ***** ***** *****
Repairs and maintenance charges ***** ***** ***** ***** *****
gas ***** ***** ***** ***** *****
ELECTRICITY bill ***** ***** ***** ***** *****
Total ***** ***** ***** ***** *****
Gross profit ***** ***** ***** ***** *****
Less :
Rent ***** ***** ***** ***** *****
Telephone/Postal &internet charge ***** ***** ***** ***** *****
Total ***** 0***** ***** ***** *****
Depreciation ***** ***** ***** ***** *****
Interest on TL ***** ***** ***** ***** *****
Interest on WC ***** ***** ***** ***** *****
Total ***** ***** ***** ***** *****
Profit before tax ***** ***** ***** ***** *****
Income Tax ***** ***** ***** ***** *****
Profit after tax ***** ***** ***** ***** *****

Cash flow statement

Cash Inflow Pre operative period Year 1 Year 2 Year 3 Year 4 Year 5
Capital 0.63 0.00 0.00 0.00 0.00 0.00
Subsidy 0.00 0.00 0.00 0.00 0.00 0.00
Termloan ***** 0.00 0.00 0.00 0.00 0.00
Profit before tax with interest 0.00 ***** ***** ***** ***** *****
Increase in WC loan 0.00 0.00 0.00 0.00 0.00 0.00
Depreciation 0.00 ***** ***** ***** ***** *****
Increase in Current liability 0.00 0.00 0.00 0.00 0.00 0.00
Total Cash Inflow ***** ***** ***** ***** ***** *****
Cash Outflow
Fixed Assets ***** ***** ***** ***** ***** *****
Increase in Current asset 0.00 0.00 0.00 0.00 0.00
Interest on TL 0.00 ***** ***** ***** ***** *****
Interest on WC 0.00 0.00 0.00 0.00 0.00 0.00
Income Tax 0.00 ***** ***** ***** ***** *****
Decrease in Term loan ***** ***** ***** ***** *****
Drawing 0.00 0.00 0.00 0.00 0.00 0.00
Total Cash Outflow ***** ***** ***** ***** ***** *****
Opening balance ***** ***** ***** ***** ***** *****
Net Cashflow 0.00 ***** ***** ***** ***** *****
Closing balance 0.00 ***** ***** ***** ***** *****

Balance sheet

Liability Pre operative period Year 1 Year 2 Year 3 Year 4 Year 5
A. Share holders funds
Capital ***** ***** ***** ***** ***** *****
Reserve & Surplus 0.00 ***** ***** ***** ***** *****
B.Non current Liabilities
Termloan ***** ***** ***** ***** ***** *****
C.Current Liabilities
Working capital loan 0.00 0.00 0.00 0.00 0.00 0.00
Account payable 0.00 0.00 0.00 0.00 0.00
Total Liability ***** ***** ***** ***** ***** *****
Asset
A. Non current Assets
Fixed Assets ***** ***** ***** ***** ***** *****
B. Current Assets
Inventory 0.00 0.00 0.00 0.00 0.00 0.00
Trade receivables 0.00 0.00 0.00 0.00 0.00 0.00
Cash and cash equivalence ***** ***** ***** ***** ***** *****
Total Asset ***** ***** ***** ***** ***** *****

Repayment of Term loan

Year Installment Outstanding at the beginning Principal repayment Interest Amount paid Outstanding at the end
1 1 ***** ***** ***** ***** *****
1 2 ***** ***** ***** ***** *****
1 3 ***** ***** ***** ***** *****
1 4 ***** ***** ***** ***** *****
1 5 ***** ***** ***** ***** *****
| | | | | | |
| | | | | | |
5 56 ***** ***** ***** ***** *****
5 57 ***** ***** ***** ***** *****
5 58 ***** ***** ***** ***** *****
5 59 ***** ***** ***** ***** *****
5 60 ***** ***** ***** ***** *****

Debt Service Coverage Ratio

Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Receipts
a).Net Profit 0.00 0.00 0.00 0.00 0.00
b).Depreciation 0.00 0.00 0.00 0.00 0.30
c).Interest on termloan 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00
Repayments
a).Loan Principal 0.00 0.00 0.00 0.00 0.00
b).Interest on termloan 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00
DSCR 0.00 0.00 0.00 0.00 0.00

Depreciation

Particulars Rate Year 1 Year 2 Year 3 Year 4 Year 5
Building 0.00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Computers/ Printers /Photocopier/Electronic gadget 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Furniture & fixtures 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Racks & storage/Interior works 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
new item 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
new 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Air-conditioning 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Other investments 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Total less depreciation 0.00 0.00 0.00 0.00 0.00
Total written down value 0.00 0.00 0.00 0.00 0.00

Conclusion

The project as a whole describes the scope and viability of the Trading industry and mainly of the financial, technical and its market potential.The project guarantee sufficient fund to repay the loan and also give a good return on capital investment. When analyzing the social- economic impact, this project is able to generate an employment of 5 and above. It will cater the demand of Trading and thus helps the other business entities to increase the production and service which provide service and support to this industry. Thus more cyclic employment and livelihood generation. So in all ways, we can conclude the project is technically and socially viable and commercially sound too.

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