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RKVY – PROPOSED PROJECTS BY AP FOOD PROCESSING SOCIETY

Ahara Technology Group

BUDGET PROPOSALS FOR

ANDHRA PRADESH FOOD PROCESSING SOCIETY(A Society of Government of Andhra Pradesh)

PROPOSED PROJECTS BY AP FOOD PROCESSING SOCIETY

RKVY

BUDGET PROPOSALS FOR 2013

ANDHRA PRADESH FOOD PROCESSING SOCIETY

(A Society of Government of Andhra Pradesh)

PROPOSED PROJECTS BY AP FOOD PROCESSING SOCIETY

2013-14

ANDHRA PRADESH FOOD PROCESSING SOCIETY (A Society of Government of Andhra Pradesh)



INTRODUCTION:

Rashtriya Krishi Vigyana Yojana (RKVY), even though a centrally sponsored scheme, has

been designed with an objective of providing freedom to each State government in deciding

it’s priorities in improvement of Agriculture and related filelds in all the relevant aspects.

Andhra Pradesh state has been progressing substantially in area and productivity in most of

the agriculture, horticulture, flooriculture, fisciculture, livestock farming, marine products

but not has been able to ensure commensurate progress in post harvest infrastructure,

adequate marketing facilities and value addition facilities for them.

It is in this context, the Commerce & Industries (Food Processing) department of

Government of Andhra Pradesh is proposing to focus on right interventions for addressing

this issue under RKVY.

The proposals for the year 2013-14 are detailed in the following pages.

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DETAILS OF EACH OF PROPOSAL



1. PROJECT ON RICE BRAN UTILISATION- RICE BRAN OIL PROCESSING UNITS

BACK GROUND

Andhra Pradesh is one of the leading rice growing states in the country. Rice is the most

important crop and will continue to be the growth engine for the state in the years to come.

Rice varieties like BPT – 5204, MTU -1010 and MTU – 1001 and JGL – 1798 are very popular

and have high export potential. Normally the state produces about 131.35 lakh tons. Out of

which about 100 lakh tons is required for consumption in the state, that means that we

have a surplus of about 30 lakh tons.

In Andhra Pradesh, the following 6 districts produce more than 10.00 lakh tons of Rice

(2010-11) and account for more than 55% of the total production of AP state.

1. Karimnagar - 13.51 lakh tons

2. Nalgonda - 13.24

3. East Godavari - 13.08

4. West Godavari - 14.91

5. Krishna - 10.91

6. Nellore - 10.05

Rice bran is one of the important components of rice grain. According to one estimate, the

value loss of rice bran can be as high as 60-70%, either due to faulty utilization or

underutilization of nutritive parts. Rice bran accounts for 10% of the weight of paddy milled

Andhra Pradesh, being one of the main rice producing states, has lot of scope to fully utilize

the bran part of Rice. Obsolete milling, storing and handling technologies followed in the

state reduces the possibility of getting quality products from Bran. Since, rice bran accounts

for 10% of the weight of paddy milled, Andhra Pradesh with a production of 131.5 lakh MT

of paddy is producing about 13 lakh MT of Rice bran and recovering a value loss of 60-70%

of this will help the farmers, consumers immensely. In rice milling, Rice bran value is either

underutilized or not utilized at all. One of the commonly followed methods of utilizing Rice

bran is to process rice bran into rice bran oil and de oiled rice bran. Traditionally, rice bran

oil is refined. Accordingly, It is proposed to encourage Rice bran processing units, preferably

as common units of Rice millers.

PRODUCT & MARKET

RBO is a kind of wellbeing and nutrition oil, it could be utilized as everyday cooking oil.

Specialists suggest that we should speed up development of rice bran oil, to let the

wholesome nutrition oil to come into daily life style of our people as quickly as possible.



RBO can go a long way in covering the gap between demand and supply of oil. It is

estimated that there is scope to produce 2-3 lakh tons of rice bran oil in the state. Earlier,

the oil was mainly used in production of Vanaspati or in blending with other cooking oils.

Due to the recent efforts in creating public awareness of RBO, its market potential as direct

use edible oil is increasing vis-à-vis other cooking oils like Sun flower oil, Ground nut oil, RBD

Palmolein oil.

India imports cooking oils at about 5 million tonnes per annum and as such there exists a

ready market for cooking oils produced with in the country.

PROCESS

The process flow of rice bran oil unit is as follows:

Rice Bran Collection

�

Preparation

�

Solvent Extraction

�

Sovent evaporation

�

Crude Rice bran oil

�

Refining

�

Refined Rice bran Oil

MAIN EQUIPMENT

1 Raw material bins, hopper, bucket elevators

2 Preparatory steaming Tank

3 Solvent extraction plant complete with vacuum distillation, vacuum

pumps, conveyors, motors, control panel of 10Mt/hr capacity

4 Solvent receiving, storage tank, pumping system

5 Storage tanks

6 Laboratory equipment

7 Edible oil refining plant with degumming, bleaching, refining facility

8 Boiler

9 Weigh bridge

10 Bagging machine



COST OF PROJECT

Item Amount in (Rs. In

Lakhs)

Land 5 acres 29.00

Technical Civil Work 157.00

Plant and Machinery 555.00

Supporting Equipments 144.00

Contingency 45.00

Preliminary and Pre- operative

expenses 30.00

Operating Capital 40.00

Total Project Cost 1000.00

MEANS OF FINANCE

Source Amount in Rs lakhs

Share Capital 400.00

Term Loan 450.00

Grant 150.00

Total 1000.00

PROPOSAL

Since payback period is long, it is proposed to provide viability gap funding in the form of

grant @ 20% of project cost subject to a maximum of Rs.150.00 lakhs to the units at an

estimated project cost of Rs.1000.00 lakhs. It is proposed to fund 4 units under the scheme

with a total project cost of Rs.4000.00 lakhs and a total subsidy of Rs.600.00 lakhs.

JUSTIFICATION FOR GRANT

Inspite of being one of the largest processor of paddy in the country, the value addition

from Rice bran is not taking place commensurate with availability with in the state.



Accordingly, the Government wants to use RKVY to use a cluster development process to

increase the processing of rice bran by providing the incentive to encourage the

entrepreneurs especially Rice millers/ Millers associations/ Coops to take up such units.

ELIGIBLE ITEMS FOR GRANT/SUBSIDY

The following are the eligible and ineligible items for grant under the proposal.

S.N

o

Item Eligible items for grant Ineligible items for

grant

1 Land Not eligible

2 Site development Not eligible

3 Civil works and buildings All the technical civil

works are eligible.

Technical civil works are

those directly required

for production /

processing / packing and

also those required to

house utilities such

power, Steam, ETP,

water storage structures

etc.

Non-technical civil

works are those not

related to production

such as compound wall,

gate, internal roads,

Office building, guest

house etc.

4 Plant & Equipment All the plant &

equipment directly

related to production is

eligible.

Miscellaneous

equipment, office

equipment, spares, first

charge of consumables,

Back up/spare

equipment.

5 Contingency Ineligible

6 Preliminary & preoperative

expenses

In eligible

7 Margin for working capital Ineligible

IMPLEMENTATION

The procedure for selection of eligible person/entity for project and release of grant will be

finalised by the Department of Industries and Commerce (FP), Government of Andhra

Pradesh.



2. SOYA MILK PROJECT

INTRODUCTION:

Soya bean is also called a wonder bean as it is highly nutritious and has got rich nutrients in

high proportion.

In Andhra Pradesh Soya is now cultivated in Adilabad, Karimnagar and Nizamabad districts.

The present production is more than 1, 00,000 MT per year. There are no soya processing

plants in Andhra Pradesh State and most of soya beans produced are purchased by Soya

processing mills of Madhya Pradesh.

The beans are used to prepare a Soya Milk. 1 kg of Soya bean seeds can give as much as

8litres of Soya Milk.

OBJECTIVE:

Objective of setting up Soya bean processing into soya milk is :

• Value addition

• Increased market for Soya cultivation

• Increased availability of nutritional foods for children and mothers

• Provide market and improve realisation to farmers

PROCESS:

The steps involved in Soya milk preparation are:

Step1: Cleaning of Soya seeds

Step2: DE hulling

Step3: Soaking for 8 – 10 hrs

Step4: Grinding while Mixing water in 1:8 proportion

Step5: Filtering the slurry to get Milk and paste



Step6: Boiling the milk

Step7: Storage

Step8: Packing

Soya Milk produced from above process is further processed to make Milk powders to mix

in coffee, Tofu - a kind of Paneer, flavoured milks etc.

In Soya processing, up to extraction of milk it is more like edible oil seed processing and

after milk is extracted, the processing is similar to dairy processing.

EQUIPMENT:

All the equipment has to be of Stainless steel to meet the hygiene standards.

The equipment includes storage bins, dehuller, soaking tank, Wet grinder, filter press,

homogeniser, pasteuriser, chiller, storage tanks, packing machine, crates, milk cans, boiler,

Chilled water system, walk in cold store etc.

COST OF PROJECT

S.No. Item Of Cost Amount InLakhs

1 Land 4 acres and site development 24

2 Building 1000 Sq Mitres & other

civil works

159

3 Equipment including utilities 297

4 Contingencies 20

TOTAL 500

The cost of plants for a smaller capacity such as 20,000 litres per day will cost Rs.2 crore

approximately excluding the land.The costs could go up depending on the sophistication

required. Most of the equipment are available in India and for large capacity plants some

equipment may have to be imported to ensure better quality.

The cost of preoperative expenses, margin money for working capital will be met by owners

either from contingency or from own sources.



PROPOSAL:

It is proposed to promote one unit under RKVY this year with a grant of 30% of the eligible

cost subject to a maximum of Rs.150.00 lakhs estimating the project cost at Rs.500.00 lakhs

in the backward region of North Telangana.

JUSTIFICATION FOR GRANT

Andhra Pradesh is one of the recent producer of Soya crop. But from many years it is one of

the main producer of milk and center of milk processing.

Keeping these in view, Andhra Pradesh Government would like to ensure production of

Soya Milk to ensure the state importance in all milk related industry.

This unit is expected to act as demontration unit for many such units, besides having

positive spin off on nutrition of children/pregnant mothers; encourage Soya farmers.

Accordingly, the Government wants to iprovide the incentive to encourage the

entrepreneurs especially farmers/farmer associations/ Coops/Exporters to take up such

units.


The following are the eligible and ineligible items for grant under the proposal.

S.No Item Eligible items for grant Ineligible items for

grant

1 Land Not eligible


3 Civil works and buildings All the technical civil

works are eligible.

Technical civil works are

those directly required

for production /

processing / packing and

also those required to

house utilities such

power, Steam, ETP,

water storage structures

etc.

Non-technical civil

works are those not





house etc.

4 Plant & Equipment All the plant &

equipment directly

Miscellaneous

equipment such as



related to production is

eligible.

office equipment,

spares, first charge of

consumables, Back

up/spare equipment.


6 Pre-operative expenses In eligible

7 Margin for working capital Ineligible

IMPLEMENTATION



Pradesh.



3. BIO FERTLISER UNIT

BACK GROUND

Organic Solid waste management by employing earthworms has multifarious role to play in

a developing country like India.Vermi-compost (compost produced by the activity of

selected species of earthworms) has been adjudged as the best source of organic

amendments to soil. Organic manure is of such high quality that it is superior to all other

types of organic manures in its physic-chemical and biological properties Using

vermicompost can fulfil the requirements for organically grown products. Based on the

benefits derived from using vermicompost in soils that do not allow composting otherwise,

it is recommended that vermicompost manufacturing units be encouraged to be set up in

Andhra Pradesh.

OBJECTIVES

1. Utilization of available organic wastes to produce quality organic fertiliser.

2. Increased job opportunities for the unskilled labour force.

3. Reduction in use of chemical fertilisers

4. Improving the soil texture and quality

5. Safe guarding the environment.

PROPOSAL

Khadi & Village Industries Commission has been encouraging the setting up of

vermicompost manufacturing units by providing financial assistance, which are village

industry oriented rather than farmer oriented. There has been good progress in this

programme. Accordingly, it is proposed to provide additional funding for these projects. The

Project Profile, including the financials are based on vermicompost Project normally

considered for financial assistance by KVIC.

RAW MATERIAL AVAILABILITY &PROMOTERS

Expected promoters are unemployed rural youth, family members of the progressive farms.

They are well aquatinted with the agriculture and most of their families maintain livestock.

Maintenance of the vermicompost unit will be with no more additional work to the farmer

in addition to his regular farming work. This activity will support his farming work and gives

additional income besides providing employment to additional people.



MAIN REQUIREMENTS

a. Land 4 acres

b. Civil works A

Workshed 2000 Sq ft

Bore well with water arrangements 1 Set

Vermi Beds 10 Nos

Office cum Stores 900 Sq Ft

c. Machinery

Shovels for mixing 50 Nos

sieving machine 3 Nos

sewing machine 2 Nos

Weighing Balance 1 no.

Tools & equipment 1 Lot

COST OF PROJECT

Item Amount in Rs.

a. Land Own

b.Civil works 15,42,500

c. Machinery 160,000

d. Preliminary & Pre-operative Cost 5,000

e. Furniture & Fixtures 6,417

f. Contingency/Others/Miscellaneous 0

g.Working Capital 7,86,083

Total Cost of Project 25,00,000

MEANS OF FINANCING

Description Amount in Rs

Own Contribution 250000

Term Loan 1375000

Grant 875000

Total cost 2500000



SALES & CAPACITY UTILISATION

At full capacity, revenue of Rs.36.00 lakhs is expected at a rate of Rs.6/kg.

MAN POWER

Particulars No. of workers

Skilled Workers 5

Helpers 12

Total 17

MAIN FINANCIAL INDICATORS

Parameter Based on 3rd

Year Projection

Average Debt Service Coverage Ratio 2.96

Break Even Sales in Rs. 928,942

Break Even Units 310

Current Ratio 0.69

Net Profit Ratio 41.52%

PROPOSAL

It is proposed to promote 29 units at 35% subsidy estimating project cost to be Rs 714.28

lakhs, and total subsidy amount to be at Rs.250.00 lakhs.

JUSTIFICATION

Increased use of chemical fertlisers is becoming unviable both on economic grounds as well

as environmental grounds. It is well recognised now that natural fertlisers such as vermi

compost will address both the problems.

Even with in Vermi Compost units, most of the government schemes are aimed at farmer

based units for self consumption. This is not increasing the use of Vermi compost based

fertilisers to the desired effect.

Accordingly, it is proposed to encourage village based commercial size Vermi compost units,

which will address use of local compost material as well as make available vermi compost

readily to the farmers whenever they require.




The following are the eligible and eneligible items for grant under the proposal.

S.No. Item Eligible items for grant Ineligible items for

grant

1 Land Not eligible


3 Civil works and buildings All the technical civil works

are eligible. Technical civil

works are those directly

required for

production/processing/pack

ing and also those required

to house utilities such

power, Steam, ETP, water

storage structures etc.

Non-technical civil

works are those not





house etc.

4 Plant & Equipment All the plant & equipment

directly related to

production is eligible.

Miscellaneous

equipment, office

equipment, spares, first

charge of consumables,

Back up/spare

equipment.


IMPLEMENTATION



Pradesh.

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