Project report for Mustard oil

Introduction

Mustard oil is extracted from mustard seeds, often has a pungent taste with an irritating aroma. There are three varieties of mustard oil available in the market includes B. nigra (black mustard), B. juncea (brown mustard), and B. hirta (white mustard). Traditionally a preferred oil for cooking, it is also used in different applications like aromatherapy, pharmaceuticals, & soaps, etc. It is extracted from two processes includes pressing the seeds used as cooking oil due to the presence of fatty oil and grinding of seed, processing it with water, and then filtered by the distillation process. The second method of extracting produces a light pungent oil used for other therapeutic segments as an essential oil. It is used in aromatherapy to stimulate the sweat glands and for its benefits on the skin.

Various functions of mustard oil such as appetizer, stimulant, hair vitalizer, anti-bacterial, anti-fungal, and others increase its demand in the market. It is considered an essential oil with lots of benefits to the skin and body is expecting to grow demand for personal care and cosmetics. Mustard oil is traditionally preferred as cooking oil and a substitute for other seed oil with higher benefits towards skin and health is expected to drive the global mustard oil market. The principal factor driving the mustard oil market is to substitute the other oil products like sunflower oil which has a major share in the oil market. The availability of low-cost substitutes and a variety of products is expected to fuel the market. French regions producing white mustard oil due to its sweeter taste are expected to register a higher market growth in terms of value and volume over the forecast period. 

Mustard oil having properties to produce warmness in the body helps to increase the blood flow is expected to register steady growth in the massage therapeutic segment in the global mustard oil market. The mustard oil market is further segmented based on regions, as North America, Latin America, Eastern Europe, Western Europe, Asia-Pacific excluding Japan, Japan, and Middle East & Africa. Based on regions, mustard oil has market demand is higher in Asia-Pacific regions which includes India, Thailand, and China due to its huge consumption in food. The North American market is expected to expand relatively higher CAGR due to its preference as an essential oil in various industrial applications.
 

Scope of the project

Mustard oil processing in India is an unorganized business. There are 7,000-9,000 oil extracting units out of which only 20 percent are registered in the organized sector. Mustard oil consumption is increasing at a rate of 20 percent every year. Demand for mustard oil comes from rural areas and is consistent owing to its multi-uses. The rapeseed-mustard varieties/hybrids contain 40-45 percent oil. But its recovery, realized by the mechanical crushing processor (oil expeller) – the largest segment of edible oil processing industries –, is up to 35 percent only. Under this process of oil extraction, a substantial amount of oil (5-10 percent) is left in the rapeseed-mustard seed meal. There is a strong need to focus on the marketing of mustard oil. It helps to segment and position the product in line with the need and demand. 

Marketing also creates a channel for products to reach consumers. Mustard oil has an extensive demand in northern and northeastern States. Mustard oil fully meets domestic demand without the need for imports non-existent. Rajasthan has over 20 markets for mustard, with Shriganganagar, Alwar, Jaipur, Kota, Udaipur, Hanumangarh, being the major ones. Mustard oil is positioned as a poor man’s oil. A repositioning of oil highlighting its health benefits and taste will make the consumer prefer the oil.
 

Product / Services & process

The unit is planning to proceed the best in class mustard oil.

Market potential & Strategy

 Mustard oil is positioned as a poor man’s oil. A repositioning of oil highlighting its health benefits and taste will make the consumer prefer the oil. Mustard oil processing in India is an unorganized business. There are 7,000-9,000 oil extracting units out of which only 20 percent are registered in the organized sector. Mustard oil consumption is increasing at a rate of 20 percent every year. Demand for mustard oil comes from rural areas and is consistent owing to its multi-uses. The rapeseed-mustard varieties/hybrids contain 40-45 percent oil. But its recovery, realized by the mechanical crushing processor (oil expeller) – the largest segment of edible oil processing industries –, is up to 35 percent only. Under this process of oil extraction, a substantial amount of oil (5-10 percent) is left in the rapeseed-mustard seed meal. 

There is a strong need to focus on the marketing of mustard oil. It helps to segment and position the product in line with the need and demand. Marketing also creates a channel for products to reach consumers. Mustard oil has an extensive demand in northern and northeastern States. Mustard oil fully meets domestic demand without the need for imports non-existent. Rajasthan has over 20 markets for mustard, with Shriganganagar, Alwar, Jaipur, Kota, Udaipur, Hanumangarh, being the major ones.

It has enormous demand as one of the edible oils and is used as a cooking medium especially in northern, eastern, and north eastern of India. The demand for Mustard Oil is increasing with time. Refined Ghani, filtered, double filtered mustard oil has given a new thrust to its market. Due to consumption in the household and pickle industries, it appears to be good scope for establishing the mustard oil industry. 

Mustard oil is usually sold in unattractive plastic bottles with red labels and caps, in canisters and tin cans, and even in loose to customers. Attractive packaging and advertisement will make the oil acceptable among consumers. This branding can be developed by having some popular brand ambassadors for the promotion of organized brands. Mustard oil is positioned as a poor man’s oil. A repositioning of oil highlighting its health benefits and taste will make the consumer prefer the oil. Mustard oil is usually sold in unattractive plastic bottles with red labels and caps, in canisters and tin cans, and even in loose to customers. Attractive packaging and advertisement will make the oil acceptable among consumers. This branding can be developed by having some popular brand ambassadors for the promotion of organized brands. Mustard oil is positioned as a poor man’s oil. A repositioning of oil highlighting its health benefits and taste will make the consumer prefer the oil.

Name & Address of Unit

Mustard oil

Address

Details of unit
Email : [email protected]
Phone : 00000
Constitution : Proprietership
Total project cost : *******
Fixed Capital : *******
Working Capital : *******
Total Bank loan : *******
Promoter(s) contribution : *******
Term loan : *******
Working capital loan : *******
Name & address of promoter(s)
Name : Your name
Address : Address
Phone : 00000
Designation : Proprietor
E-mail : [email protected]
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
Net profit Sales %
Quick ratio
Revenue v/s Expense
Expense Splitup
Sl. no Item Amount Rs
1 Building advance *******
2 Other equipments for weighing and packing *******
3 Oil Storage Tank *******
4 Filter press frame type 14” X 14” X 14’ plates plunger pump and filler cloth *******
5 Oil Expeller with Single Steel gear *******
6 Computer, printer and ups *******
7 Racks and furnitures *******
8 Electrification and Networking *******
9 Preliminary expenses *******
10 Working Capital *******
Total *******

 

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 *******
9 Working capital loan *******

Sl. no Item Rate Quantity Unit Total Rs
1 Mustard Oil ******* X 2400 Ton *******
Total *******

Sl. no Item Amount Rs
1 Rent *******
2 Salary *******
3 Electricity *******
4 Office expense *******
5 Mustard seeds *******
6 Marketing/Advertisement *******
Total *******
Sl. no Item Subsidy % No. Rate Amount Rs
1 Building advance ******* 1 ******* *******
2 Other equipments for weighing and packing ******* 1 ******* *******
3 Oil Storage Tank ******* 3 ******* *******
4 Filter press frame type 14” X 14” X 14’ plates plunger pump and filler cloth ******* 1 ******* *******
5 Oil Expeller with Single Steel gear ******* 2 ******* *******
6 Computer, printer and ups ******* 1 ******* *******
7 Racks and furnitures ******* 1 ******* *******
8 Electrification and Networking ******* 1 ******* *******
9 Preliminary expenses ******* 1 ******* *******
Total Investment *******
Total Subsidy *******
Net Investment *******
Sl. no Item Amount
1 Term Loan *******
2 Working capital Loan *******
3 Total loan *******
4 Term Loan contribution *******
5 Working capital contribution *******

Year 1(!*) Year 2 Year 3 Year 4 Year 5
Revenue from operation
Sales ***** ***** ***** ***** *****
Add :
Closing stock ***** ***** ***** ***** *****
Total ***** ***** ***** ***** *****
Less :
Opening stock ***** ***** ***** ***** *****
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 Inflow Pre operative period Year 1 Year 2 Year 3 Year 4 Year 5
Capital 0.63 ***** ***** ***** ***** *****
Subsidy ***** ***** ***** ***** ***** *****
Termloan ***** ***** ***** ***** ***** *****
Profit before tax with interest ***** ***** ***** ***** ***** *****
Increase in WC loan ***** ***** ***** ***** ***** *****
Depreciation ***** ***** ***** ***** ***** *****
Increase in Current liability ***** ***** ***** ***** ***** *****
Total Cash Inflow ***** ***** ***** ***** ***** *****
Cash Outflow
Fixed Assets ***** ***** ***** ***** ***** *****
Increase in Current asset ***** ***** ***** ***** *****
Interest on TL ***** ***** ***** ***** ***** *****
Interest on WC ***** ***** ***** ***** ***** *****
Income Tax ***** ***** ***** ***** ***** *****
Decrease in Term loan ***** ***** ***** ***** *****
Drawing ***** ***** ***** ***** ***** *****
Total Cash Outflow ***** ***** ***** ***** ***** *****
Opening balance ***** ***** ***** ***** ***** *****
Net Cashflow ***** ***** ***** ***** ***** *****
Closing balance ***** ***** ***** ***** ***** *****
Liability Pre operative period Year 1 Year 2 Year 3 Year 4 Year 5
A. Share holders funds
Capital ***** ***** ***** ***** ***** *****
Reserve & Surplus ***** ***** ***** ***** ***** *****
B.Non current Liabilities
Termloan ***** ***** ***** ***** ***** *****
C.Current Liabilities
Working capital loan ***** ***** ***** ***** ***** *****
Account payable ***** ***** ***** ***** *****
Total Liability ***** ***** ***** ***** ***** *****
Asset
A. Non current Assets
Fixed Assets ***** ***** ***** ***** ***** *****
B. Current Assets
Inventory ***** ***** ***** ***** ***** *****
Trade receivables ***** ***** ***** ***** ***** *****
Cash and cash equivalence ***** ***** ***** ***** ***** *****
Total Asset ***** ***** ***** ***** ***** *****
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 ***** ***** ***** ***** *****
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Receipts
a).Net Profit ***** ***** ***** ***** *****
b).Depreciation ***** ***** ***** ***** 0.30
c).Interest on termloan ***** ***** ***** ***** *****
Total ***** ***** ***** ***** *****
Repayments
a).Loan Principal ***** ***** ***** ***** *****
b).Interest on termloan ***** ***** ***** ***** *****
Total ***** ***** ***** ***** *****
DSCR ***** ***** ***** ***** *****
Particulars Rate Year 1 Year 2 Year 3 Year 4 Year 5
Building ***** ***** ***** ***** ***** *****
Less Depreciation ***** ***** ***** ***** *****
Written down value ***** ***** ***** ***** *****
Computers/ Printers /Photocopier/Electronic gadget 00 ***** ***** ***** ***** *****
Less Depreciation ***** ***** ***** ***** *****
Written down value ***** ***** ***** ***** *****
Furniture & fixtures 00 ***** ***** ***** ***** *****
Less Depreciation ***** ***** ***** ***** *****
Written down value ***** ***** ***** ***** *****
Racks & storage/Interior works 00 ***** ***** ***** ***** *****
Less Depreciation ***** ***** ***** ***** *****
Written down value ***** ***** ***** ***** *****
new item 00 ***** ***** ***** ***** *****
Less Depreciation ***** ***** ***** ***** *****
Written down value ***** ***** ***** ***** *****
new 00 ***** ***** ***** ***** *****
Less Depreciation ***** ***** ***** ***** *****
Written down value ***** ***** ***** ***** *****
Air-conditioning 00 ***** ***** ***** ***** *****
Less Depreciation ***** ***** ***** ***** *****
Written down value ***** ***** ***** ***** *****
Other investments 00 ***** ***** ***** ***** *****
Less Depreciation ***** ***** ***** ***** *****
Written down value ***** ***** ***** ***** *****
Total less depreciation ***** ***** ***** ***** *****
Total written down value ***** ***** ***** ***** *****

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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