MAPCO LTD

[Mango Pulp Co. Ltd]

Hrishikesh Bhagat - 68

Arpan Goel - 76

Shrushti Kanoria - 83

Sana Malkani - 87

Ankit Sanghvi - 105

Hardik Shah - 107

Saneil Shah - 109

Mission Statement

Our mission is to become the top choice for mango pulp and promote mango pulp across

the globe, especially to the Non Resident Indian population. To translate this mission into

reality, we adhere to the highest quality standards, adopt state-of-the-art technology,

ensure authenticity of the recipes, value convenience of our consumers

PRODUCTS:

• Major products of processed mangoes include mango pulp/puree

and mango concentrate)..

• These products are used to produce juices, nectars, jams and

multi-fruit beverages.

• They are also used as flavoring and ingredients for processed

food products such as ice cream, yoghurt and bakery products.

• Production process involves washing, peeling, slicing, pulp

extraction, acidity adjustment, heating, cooling, packaging, and

storing.

1. The first process in production is that of washing the exteriors

of the mangoes and sorting them in accordance to the quality ie.

the grafted mangoes are differentiated from the totapuri variety

as they have to be further mixed in a certain ratio. This process

is labor intensive so that capital requirements are lowered.

2. After the point where the soft middle core comes into the

picture all the proceeding processes are handled by the

machine. This is so that the quality norms are maintained and

the middle core is not touched by hand. Therefore the peeling

process of separating the skin from the soft middle core is

machine oriented.

3. The process of cutting where the soft middle core is separated

from the hard seed is also machine oriented.

4. Pulping is method of liquefying the soft middle core which is

carried out by a machine much like the squeezer.

5. The sugar content in the pulp is maintained by implementing

the brix scale and emulsifying agents are added, sugar and

citric acid act like natural preservatives. The Ph balance ie. the

acidity is also calculated and maintained within a range of 3.8

– 4.1 at 20 C.

6. Heating of pulp up to 88 C – 90 C in steam jacketed kettle

eliminates all the micro organisms present in freshly extracted

mango pulp.

7. The freezing point of mango is 1.1 C but a chilling injury occurs

at when cooled under 13 C.

8. The pulp is then packed in aseptic packs in a vacuum of

negative pressure (min. 6*) so that there are no air bubbles left

reducing the exposure to rotting.

9. Finally the storage is done at temperatures within the range 13

C – 15 C as below 13 C it causes chiiling injury to the pulp.

It usually takes 2kg fresh mangoes to produce one kilo pulp/puree and 4kg fresh

mangoes to produce one kilo concentrate depending upon the raw material quality.

• The average percentage yield of mango pulp from desi mangoes is 45% and 60%

recovery ratio from grafted mangoes. There may be slight variations with respect to

different varieties of mangoes.

• Some companies mix desi mango pulp with grafted mango pulp to produce blended

mango pulp based on the client’s requirements.

NOC Registration n clearances

Licenses Required

An entrepreneur has to obtain several clearances or permissions depending upon the

nature of his unit and products manufactured. The following registrations are required:

District Industries Centre

Sales Tax Act

Central Excise Act

Payment of Income Tax

Calibration of weights & measures - Weights and Measures Inspector of State

Power Connection - Designated Officer of State Electricity Board

Registering a SSI Unit

The Entrepreneur must file with respective District Industries Centre and he can obtain

acknowledgement for proposed set up in prescribed form The acknowledgement is valid

for period of 2 years, there is no further extension is granted. The project is expected to

be implemented the project within this validity period.

Trade and Storage Licence

There are 2 types of trade licences under Section 394 licences.

They are:

Engineering- mechanical, readymade garments, activities that are not

involving any food items

Activity which are involved food products eg cold drinks, ice creams, bakery

etc

Preconditions or Activities that must precede the application

The application will not be considered unless the form is completely and

correctly filled.

In case of associations, limited companies, co-operative societies, etc.,

particulars of the Head of the Institution should be given

Octroi

Octroi is a local tax collected on various articles brought into a district for consumption.

The industry has to be registered with the Octroi Department, Municipal Corporation by

filling the relevant forms. Exemption from Octroi on the articles declared to have been

imported for the purposes of exportation to foreign countries.

Articles liable to Octroi which are have to be imported into the limits of Greater Bombay

for the purposes of Export to Foreign Countries but which are required to be temporarily

kept in Greater Bombay at the discretion of Municipal Commissioner be exempted from

Octroi at the time of importation provided that:

Such articles have been imported within Greater Bombay for the purposes of

export.

These goods must be exported within 6 months from the importing the

materials.

Excise License

The Central Excise Department spread over the entire country administers and collects

the central excise duty. The apex body that is responsible for the policy and formulation

of connected rules is the Central Board of Excise and Customs, which functions under the

control of the Union Finance Ministry.

Value Added Tax (VAT)

VAT is an indirect tax is that the tax is collected from someone other than the person who

actually bears the cost of the tax (namely the seller than the consumer). To avoid double

taxation on final consumption, exports (which are, by definition, consumed abroad) are

usually not subject to VAT or VAT, which led to such consequences, is refunded.

Import – Export Code (IEC)

Registration with Regional Licensing Authority is a pre-requisite for import of goods. An

IEC code is must for clearance of goods unless the importer has obtained IEC Code

Number from Directorate General of Foreign Trade. A bank account is necessary for an

IEC. Application forms are to be filled.

Location of factory

The most favourable location for setting up the plant is Alibaug. It is a coastal town and a

municipal council in Raigad District in the Konkan region of Maharashtra.

Reason for location:

1. .Alibag is connected by roadways and waterways. Alibag has proximity to ports

viz. Mandwa and Rewas. The catamaran/ferry services are available from Mumbai to

the both these ports. The trip takes just 45 minutes. The alternate is by road, which is

a roundabout route and takes about 3 hours from the city. Due to such proximity, the

owner will not face any difficulties while reaching to his factory from city.

2. Alibag also has climate which is conducive for growth of mangoes. The locals in

this region own mango orchids and are involved in producing mangoes.

3. The Raigarh district, where Alibag has been located has been described as Agri-

export zone by Maharashtra government in 2002 for Totapuri mangoes. A number of

activities have been suggested under the AEZ to facilitate exports, which include

interventions in Production, Post Harvest practices and Marketing areas leading to an

Integrated approach for export development. Such policies are conducive for growth

of MAPCO Ltd.

Sourcing of raw material

In our business of mango pulp the raw material that will be involved largely is mango

and that too totapuri variant. For raw material sourcing we have decided to source it

from local farmers.

Due to direct and bulk purchasing from local farmers we can get them at lower rate, and

this will help to reduce material and logistic cost. The strategic location of plant is added

advantage for sourcing of raw material.

The

Ownership & Structure

The MAPCO[ Mango Pulp Company] is owned by sole proprietor. This group comprises

of professionals with expertise and extensive experience in Business Development and

Management.

Organisational Structure

Labour and Staffing:

1 General Manager who will be proprietor and who will handle finance, HR and

production aspect.

1 Operation/ Plant Manager who will handle logistic, operations, quality control.

1 Export and sales manager

1 Office Assistants

12 Other Workforce

The labour force have been kept low as this factory will be capital intensive and since it

is start-up, it has to keep costs low in initial stages..

Marketing Plan

Owner Cum

General Manager

managerManager

Office Assistants Export/Sales Manager Operation/Plant Manager

Other Workforce

The above graph gives us an insight as to the percentage of exports of mango pulp in

various countries of the world. The main markets for mango pulp are Saudi, Kuwait,

UAE, Netherlands and Hong Kong.

The strategies adopted in these markets are as follows:

Pricing will be made to reflect what the market has already; they will be at

the same level with those of our competitors in order to attract customers.

High prices will tend to drive away customers while very low prices will

result into fewer earnings and at the same time undermine the value of the

products.

Packaging

In packaging attention will be paid to customer needs and convenience.

Individual customers prefer small packages of 300mls to 500mls. This is a

single meal quantity. For storage purposes over longer periods larger

quantities are required and these range from 1 liter to 5-liter packs. Bulk

packaging may be made for institutions in 20-liter containers. A sure

source of quality materials to support production will be established to

make sure of their supply. Among the items to stock are the following:

1. Packaging materials

Plastic bottles

Bulk containers

PVC containers

2. Preservatives

3. Additives

- Sugar syrup

- Aroma

- Food color

Sales and Distribution:

We shall introduce products to organized retailers such as Tesco, Carrefour

and other local retail chains in the above mentioned countries. They will help

in reading the situation in the market and give us a feed back about the

demand and supply of our products compared to products of other dealers.

Categories of our dealers will be as follows:

ProducerOrganized RetailersSupermarkets, Specialty storesConsumers

Promotion

In order to attract more customers we intend to carry out

vigorous and attractive in store advertising, emphasizing the

quality of our products as fresh and nutritious.

Development of sales will be directed to store owners and

consumers at the same time. In this we shall use the following

instruments.

Product catalogues

We shall put up fairs and exhibitions

We shall issue free samples

We shall use sales bulleting

We shall display products in strategic locations.

We shall use attractive packaging of our products

Import and Export Provisions

Under the agri-export zone the exporter can import capital goods at concessional duty for

setting up plant. For agri- export unit For agro exports, excise duty is not applicable.

Customs duty @ 1% with respect to the cost of invoice is charged while processing the

documents. The export is done in dry containers and often Controlled Atmosphere (CA) /

Modified Atmosphere (MA) containers are also being used to enhance the shelf life of the

product. The exporter has to follow the provision of Fruit Products Order, 1955 (FPO),

issued under the Essential Commodities Act which lays down product specifications and

quality control requirements on production-hygiene, re-labelling and marketing of

processed fruits and vegetables. In the target markets that we have defined there is no as

such specific provision or certification for import of mango pulp.

Financing of Project:

In 2005, the approximate price of one kilo mango pulp in the international market was

Rs.39 and Rs.84 made from Totapuri and Alphonso mangoes respectively. To produce

one kilo mango pulp from local mangoes, the raw material cost will range from Rs.17.6

(8*2.22) for desi mango pulp to Rs.33.4 (20*1.67) for grafted mango pulp. The raw

material cost for blended mango pulp will vary between these two numbers depending

upon the composition of a final product. This situation presents a good opportunity for

local producers to make inroad into Indian dominated export market.

DETAILS OF THE PROPOSED PROJECT8.1 land and Building

Land: 1500 sq.ft for Rs12 lakhs at the rate of Rs800/sq.ft

Cost of constructing the factory is estimated at Rs6,00,000

8.2 Machinery

Machinery & Equipments:

Second hand machinery of European technology:

Description Price (Rs) Second hand pirce

Washing, sorting, extraction & treatment line 32,52,000 18,00,000

Sterilization & aseptic filling line 30,24,000 17,00,000

Cleaning-in-place system 8,64,000 5,00,000

Spare parts & assistance to start up 10,08,000 5,75,000

Total Equipments Cost 82,08,000 45,75,000

8.3 Miscellaneous Assets

A provision of Rs.1,00,000/- is made under this head for other items like furniture and

fixtures, storage racks, packing tables etc.

8.4 Preliminary & Pre-operative Expenses

There will be certain pre-production expenses on travelling, registration, establishment

and administrative expenses, interest during implementation, trial run expenses etc. A

provision of Rs.60, 000/- would take care of these expenses.

8.6 Cost of the Project

Item Amount(Rs. in lacs)

Building 18

Machinery 45.75

Miscellaneous Assets 1

P&P Expenses 0.60

Margin @5% 3.3

Total 68.65

8.5 Working Capital Requirements

There will not be much stock during season whereas during off-season, therefore the

working capital requirement will be high. We expect it to be at Rs20,00,000.

Cost per unit

Raw material cost (900 tons of totapuri mango @ Rs3.1/kg, 900 kg of preservtives

@Rs200/kg and 200kg of additives @Rs900/kg) = Rs31.5 lacs

Utilities (150 HP power @ Rs10000/HP, water)= 2 lacs

Wages (12 employees with 1-2 employees for each operation) = 12 lacs

Salaries= 4.8 lacs

Packing = 13.5 lacs

Transportation (at Rs3/kg for 900 tons of mangoes) = Rs 27 lacs

Administrative expenses= Rs1 lac

Promotional expenses @5%= Rs4.3 lacs

Margin@5%=Rs4.8 lacs

Total = Rs1,00,90,000

Capacity:

Line input 0.5 t/h

Line output 0.25 t/h

Therefore, annual capacity will be of 450 tons of pulp.

Variable cost per kg = Rs22.43

Taxes= 5.74 (cont=10.0825)

Commission @ 10%= Rs3.5

Price (ruling FOB price excluding export market taxes) =41.76/kg

Insurance= Rs0.7/kg

Freight = $0.3 (INR 13.5) (U.A.E & S.E. Asia)

Price (excluding local taxes) =Rs55.86/kg (U.A.E & S.E. Asia)

EBIDT= Rs45,37,125

Less: depreciation

Building @10%= Rs1.8 lacs

Machinery @10%= Rs4.5 lacs

Less: Interest on term loan of Rs. 20 lacs is calculated @ 10% per year= Rs2 lacs

PBT= Rs37,07,125

Less: tax provision= Rs11,12,137.5

PAT=Rs25,94,987.5

Total 5.07

Means of Finance

Promoters' Contribution =Rs68.65 lacs

Term Loan from Bank/FI =Rs20 lacs

Debt Equity Ratio 0.29:1

7.0 TENTATIVE IMPLEMENTATION SCHEDULE

Activity Period (in months)

Application and sanction of loan 1.5

Site selection and commencement of civil

work

0.5

Completion of civil work and placement

of orders for machinery

1.5

Erection, installation and trial runs 0.5

10.0 PROJECTED PROFITABILITY

(Rs. in lacs)

No. Particulars 1st Year 2nd Year 3rd Year

Installed Capacity

500 Tonnes

Capacity Utilisation 90% 100% 100%

Sales Income 1,87,92,000 2,06,71,200 2,27,38,320

Cost of Production

Raw and Packing Materials 45 50 53

Wages 12 13 14.5

Utilities 2 2 2

Salaries 4.8 5 5.5

Repairs & Maintenance 3 4 4.5

Selling Expenses

(commission + promotion)

20,50,000 22,05,500 2426050

Transport 27 28.5 31

Administrative Expenses 1 1 1

Margin 4.8 5 5.2

Taxes 25,83,000 2841300 3125430

Total 14593000 15896800 17221480

EBIDT 4537125 4774400 5516840

Interest on Term Loan 2 2 2

Depreciation 5.3 5.3 5.3

Profit before Tax 3707125 4044400 4786840

Income-tax @ 30% 1112137.5 1213320 1436052

Profit after Tax 2594987.5 2831080 3350788

419900047744002666000