Click here to load reader
Upload
r-balaji
View
1.497
Download
5
Embed Size (px)
Citation preview
INTEGRATED COLD STORAGE CUM MARKETINGFACILITY AT NAGPUR
VJTI, Mumbai- Project Management
PROJECT submitted for the fulfilment of M.Tech (Proj. Mgmt ) under the mentorship of Prof.Mr. BALAJIRAMADURAI, ([email protected]), VJTI, Mumbai and Prof. Narkhede ([email protected])
Trishala Zende
[email protected]+91-9029207571
Vivek Lanjewar
[email protected]+91-8806291345
Amol Dhoble
[email protected]+91-9987851209
Harshal Zade
[email protected]+91-8412345672
Ruturaj Bhaskare
[email protected]+91-8087902639
Dec 3, 2015
PROJECT SCOPE
VJTI, Mumbai- Project Management
To construct 5000 MT single commodity coldstorage plant at Nagpur.
To establish marketing and trading division.
To assure a Fixed Remunerative Price for theproduce to the farmers every year.
To actively engaged in marketing of NagpurMandarin at global level and promoting export.
To facilitate setting up of small scale Orangeprocessing industries in the Nagpur.
To work in close collaboration with NRCC forResearch and Development of Mandarin Oranges.
Dec 3, 2015
An Introduction - Why Orange?
VJTI, Mumbai- Project Management
India is a second largest producer offruits and vegetables in the world.
Orange is one of such fruit which isproduced in India at significant scale.
Currently India ranked fourth in terms oftotal orange production besides Brazil,China and Indonesia (source: IFTO report)the latest production being 34.31 LakhTonnes.(source: NHB, Report 2014-15)
Dec 3, 2015
VJTI, Mumbai- Project Management
India is a secondlargest producer of
fruits andvegetables in the
world.
Orange is a fruit whichis produced in India at a
significant scale.
India ranks fourth afterBrazil, China & Indonesiain Orange production – in2014- 34.31 Lakh Tonnes
(source: NHB, Report 2014-15) & source: IFTO report)
LEADING ORANGE PRODUCING STATES IN INDIA
Maharashtra has 1.35 lakh hectares of orangecultivation in 2013-14 while the production hit7.425 million tonnes of production which hasincreased from 4.43MT of 2011-12.
The productivity in this region is particularly lowas compared to other states. It is 5.5 MT/Ha asagainst 21.6 and 17 for Punjab and MadhyaPradesh.
Dec 3, 2015
An Idea to Change Lives
VJTI, Mumbai- Project Management
Orange (Mandarin) occupies thesecond position among allfruits cultivated inMaharashtra which has 1.38 lakhhectares area under orangecultivation with production of8.26 lakh metric tons with theproductivity of 6 MT/ha.
(National Horticultural Database, 2010).
The major orange producing belt in Maharashtra is Vidharbharegion comprising following districts Amravati, Nagpur,Akola, Wardha and Yavatmal, Buldhana and Washim.
Five lakh tons of orange is cultivated in Vidarbha regionin near about 80,000 hectares area. Most lives depend onOrange cultivation, in this region. Hence failure affectslarge number of farmers in this region.
Dec 3, 2015
Crop Rotation
Cold Storage
Refine Supply Chain
•In addition to Mandarin oranges the soil &environment is also suitable for cultivationof sweet lime (“mosambi” in local lingo).Hence, Mosambi can be safely recommended as aneffective “rotation crop” to mitigate farmerdistress
•Install Cold storage facilities to ensureyear-round utilization to normalize supply &price conditions. Naturally staggered seasonalpattern and requirement of similar Coldstorage conditions, help in this effort.
•Re-orient the supply chain to ensurefair, proper, year-round returns tothe farmers
Threemeasures, tomake adifference infarmer’slives
VJTI, Mumbai- Project Management
TYPICAL SCENARIO AT NAGPUR
Dec 3, 2015
Orange Farmers in Distress – News Articles
VJTI, Mumbai- Project Management
News Item from local newspapers say -“Fall in Prices – Oranges Selling free of cost” Dec 3, 2015
VJTI, Mumbai- Project Management
Orange Farmers in Distress – News Articles
Dec 3, 2015
Month Orange Sweet lime
Jan 4,391 2,590
Feb 4,930 4,738
March 5,722 8,250
April 104 10,020
May 0 5,090
June 0 1,410
July 0 1,860
August 0 5,290
September 952 13,120
October 4,470 14,910
November 7,430 9,630
December 10,325 6,960
Average 3,194 7,056
MONTHLY PRODUCTION OF ORANGES AND SWEET LIME INNAGPUR REGION
Source: national horticulturedatabase, 2015 VJTI, Mumbai- Project Management
Dec 3, 2015
43914930
5722
104 0 0 0 0 952
4470
7430
10325
2590
4738
8250
10020
5090
1410 1860
5290
1392014910
9630
6960
0
2000
4000
6000
8000
10000
12000
14000
16000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Orange Sweet Lime
AVERAGE PRODUCTION OF ORANGE AND SWEET LIME(MOSAMBI) FOR THE YEAR 2014
VJTI, Mumbai- Project Management
Source: national horticulturedatabase, 2015
HARVESTING SEASONS OF ORANGES AND SWEET LIME IN CROP ROTATION
Peak
Medium
Low
Dec 3, 2015
2322
2095
2818
3938
0 0 0 0
19301763
1574
1313
1709
1234 1250
1980
23812524
2190
17841919
2134
18511737
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Mosambi
Orange
PRICE VARIATION OF ORANGES & MOSAMBI
VJTI, Mumbai- Project Management
Dec 3, 2015
VJTI, Mumbai- Project Management
Demographic advantage
Nagpur is the Divisional HQ ofthe Central Railway and South EastCentral Railway of Indian Railways
Nagpur is located theoretically inthe geographic centre of India.Two major National roadwaysintersect in this city :
North-South NH7 connectingVaranasi - Kanyakumari and
West to East NH6 connectingHajira-Kolkata
This provides excellent National
connectivity.
In addition, National highway NH-26B connecting Savner-Chhindwara-Narsinghpur in turn connectedwith NH 69 at Savner near Nagpur,provides another optionalconnectivity to Northern part ofIndia.
Nagpur is the largest city incentral India and the thirdlargest in Maharashtra in termsof population as per the 2011census.
Nagpur has Dr. BabasahebAmbedkar International Airportand a Multi-modal InternationalCargo Hub and Airport (MIHAN).
Dec 3, 2015
VJTI, Mumbai- Project Management Dec 3, 2015
VJTI, Mumbai- Project Management
CURRENT SUPPLY CHAIN PROPOSED SUPPLY CHAIN
• What we aim in our proposed structure isreducing the number of links in the SupplyChain, alongwith introduction of “ColdStorage”. Mini “Cold storages” can beintroduced in a mature “hub” model in thenext iteration.
• Additional cost benefits can accrue onaccount of year long transportation andconsolidation.
Note:• This is an approximation. There could be
more links in the current Supply Chain,increasing price at each stage.
Dec 3, 2015
VJTI, Mumbai- Project Management
27%
4%
8%
12%10%
27%
12%
PRICE BREAKDOWN FOR DIFFERENTSTAKEHOLDERS NOW
FARMER PHC TRADER/WHOLESALER
RETAILER COMMISSION AGENT WASTAGE
OTHER COST
Dec 3, 2015
INTEGRATED COLD STORAGE CUMTRADING FACILITY
PRE FEASIBILITYSTUDY
FEASIBILITYSTUDY
SELECTION OF SITE/LOCATION
PROPOSED PLAN
FINANCIAL VIABILITYREPORT
ECONOMIC VIABILITYREPORT
PROJECT RISKANALYSIS
SWOT ANALYSIS
CONSTRUCTION OF COLDSTORAGE FACILITY
PURCHASE OFLAND
STATUTORYCLEARANCE
INTEGRATEDPACK HOUSE
PRE COOLINGUNIT
CA GENERATOR
SPECIALISED CADOOR
CA TENT
WDRA-NWR EQUIPMENT
SPECIALISED PACKAGING
CONSTRUCTION OFBACK OFFICE
DESIGNLAYOUT
AWARDCONTRACTS
SUPPORTING SYSTEM
TRADINGDIVISON
DATA ANALYSIS
COMMODITYPRICING
MARKETINGDIVISION
DEMAND ANDFORCASTING
MARKETINGFACILITY
CUSTOMERINTERFACE
WORK BREAKDOWN STRUCTURE
VJTI, Mumbai- Project Management
Dec 3, 2015
GANTT CHART FOR THE PROJECT
1/1/16 4/10/16 7/19/16 10/27/16 2/4/17 5/15/17 8/23/17 12/1/17
PRE FEASIBILITY STUDY
PURCHASE OF LAND
STATUTORY CLEARANCE
DESIGNS OF LAYOUT
CONSTRUCTIO OF BUILDINGS
INTEGRATED PACK HOUSE
PRE COOLING UNIT
CA GENERATOR
SPECIALISIED CA DOOR
CA TENT
WDRA-NWR EQUPMENT
SPESIALISED PACAGING UNIT
VJTI, Mumbai- Project Management
Dec 3, 2015
Particulars Qty.
Super freeze refrigeration compressor 1
100 HP screen protected Induction Motor 1Hand operated oil immersed starter 1Ammonia Oil Separator 1Atmospheric Type Ammonia Condenser 12
Ammonia Air Cooling units 16Valves & fittings for Condenser 1Ammonia Receiver 1Valves & fittings for Receiver 1Instrument with Dry & Wet Thermometers 6
5HP Monoblock centrifugal pump 2Ammonia valves & fittings 1Insulated cold storage door & fittings 4Slide rail for compressor 2Ammonia interconnecting pipe 1Water pipelines & fittings 1Material Handling equipments (Forklifts, High lifts,
Stackers, Towing tractor, etc)2
VJTI, Mumbai- Project Management
Plant & Machinery Requirements
Dec 3, 2015
COLD STORAGE PROJECTCOMPONENTS
VJTI, Mumbai- Project Management
1. Land Requirement 3 Acre
2. Storage Space 1500 Cum.
3. Technology preferred Gravitycirculation/ Bunker type/fin.coil
4. Cold storage room height 12.2to 18.5 m
5. Electrical Load 125 kw
Desired storage environment oforange and sweet lime
Temp : Orange 0 to 10
°Relative Humidity %: 85 - 90
BROAD TECHNICAL PARAMETERS FOR A
TYPICAL 5000 M.T COLD STORAGE
ASSUMPTIONS FOR WORKING OUT
ECONOMICS OF A MULTI CHAMBER COLD
STORAGE
1. Life of machinery and equipment isassumed as 7 years
2. depreciation assumed @ 10% andthat of civil works @ 5% (assuming alife of 20 years for Civil)
3. For simplification purposemaintenance and repairs, insuranceand expenses on fuel, water,lubricants etc are assumed on perM.T. basis
4. Labor changes for loading unloadingof goods in the cold store may beassume as Rs15/M.T
5. Installation assumed to happen inone year
6. Assume Capacity utilization in the 1styear as 80%
Dec 3, 2015
TOTAL CAPITAL INVESTMENTSUMMARY
VJTI, Mumbai- Project Management
Sr. No. Particulars Value (In Lakhs)
1 Fixed Capital 1,164.5
2 Working Capital (3 times ofWC/ month)
671.53
Total Cost 3,179
MEANS OF FINANCE
EQUITY Value (in Lakhs)
Promoter's contribution 250
Subsidy (NHB 35%) 1,112
Unsecured loan 228
TERM LOAN
Bank/FI 1,590
Total Project Cost 800Dec 3, 2015
Utilities per month and Year
VJTI, Mumbai- Project Management
Sr No Description Units Bill(Rs/month)
Value
1 Power (125KW @3.6)
34,000 1,22,400 14,68,800
2 Water 2,500 30,000
Total Utilities 1,24,900 14,98,800
Other Expenses per month and year
SrNo
Description Expenses(Rs/month)
Value(Rs/Year)
1 Insurance Charges on stored product 40,000 4,80,000
2 Stationary and communication 1,500 18,000
3 Conveyance and Transport 5,000 60,000
4 Advertisement and Publicty 2,500 30,000
5 Other Unforeseen expenses 1,000 1,200
Total- other expenses 35,000 5,89,200
Dec 3, 2015
Additional Info
FIXED REMUNERATIVE PRICE (FRP) MODEL
The fluctuations in Orange prices is one of the main reasonfor orange grower farmer distress, as they often are atreceiving end.
We have tried to develop a FRP model for compensation oforanges and sweet lime for farmers.
The Marketing and Trading Unit will work out FRP for eachyear considering the prevalent production cost of oranges.
The price will be announced prior to the harvesting season.
Pre-harvest contractee will be additionally providedinsurance cover for their harvest.
FRP will be given only on high quality 1ST grade oranges.
The lower grade oranges if required will be purchased atprevalent market prices, duly considering profit margin
VJTI, Mumbai- Project Management Dec 3, 2015
FRP ESTIMATION PRICE FORYEARAverage Production cost
Sr. No. Production Per Acre 4-5 Tonne
1 Production cost per tonne 10,080
1 Market Price Per Tonne(High Grade Orange)
4,500-10,000
2 Profit Margin per Tonne 3,000
3 FRP for first year 13,080
VJTI, Mumbai- Project Management
Sr. No. Particulars Cost
1 Marking and Layout 900
2 Cultivation 1,500
3 Labour (plantation) 2,000
4 Irrigation 30,000
5 Cleaning 6,000
6 Insecticides 9,000
7 Grading 1,000
Total (cost) 50,400
Source- Kalmana market, Nagpur; report in leading newspapers
Dec 3, 2015
Raw Material Cost per Month andYear
VJTI, Mumbai- Project Management
Sr. No MonthlyIntake(80%capacity)
FRP @ Rsper MT
Cost perMonth(InLakhs)
YearlyCost(Inlakhs)
1 3,500 MT 13,080 457.8 5,493.8
2 500 MT 9,500 47.5 570
Total 505.3 6,063.8
Dec 3, 2015
Profit Analysis Revenue per year – total cost of servicing per annum
= 1,06,20,00,000-8,21,80,000 = Rs. 24,02,00,000
Depreciation cost – 25.13
Tax on Profit@ 30% = Rs. 720.6 lakhs
Net Profit = Rs. 1680.4 lakhs
% Profit on sale = 1680.4/10620=15.80%
% ROI = 1680.4/ 3179.2 = 52.82%
VJTI, Mumbai- Project Management Dec 3, 2015
PROJECTED CASH FLOW STATEMENT
Sr. No 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR
Revenue 10,620 11,682 12,850.2 14,135 15,548
Cost of Servicingper annum
8,218 8,875.44 9,585.47 10,352.3 11,180.48
Depreciation 25.13 25.13 25.13 25.13 25.13
EBT 2,376 2,961.43 3,239.6 3,757.57 4,387.52
EAT @30% 1,663.81 2,073 2,267.72 2,630.3 3,057.26
CASH INFLOW 1,688.94 2,098 2,292.85 2,655.43 3,082.39
CCI 1,688.94 3,786.94 6,079.85 8,735.22 11,817.61
DCF @ 10% 0.909 0.826 0.751 0.683 0.621
DCF@10% 1,535.24 1,726.95 1,703.05 1,796.5 1,914.16
CDCI@ 10% 1,535.24 3,262.19 4,965.24 6,761.74 8,675.90
DCF @ 45% 0.689 0.475 0.328 0.226 0.156
VJTI, Mumbai- Project Management
NPV = 8675.898 – 3179= 5496.898 LakhsPI = 11817.608/3179 = 3.71Simple Payback Period 1.71 years
Figures are in lakhs
Dec 3, 2015
Project risk analysis(What-if analysis)
CASE 1: Considering Supply exceeding demand
In general the production of citrus per acre of land is60,000 to 70,000 per year, in excess production period.
In the period of winter season the orange productionreaches its peak. In this approach if demand is lesserthan the supplied quantity due to excessive amount ofproduction the cost of citrus fruit will decrease atcertain extent which will lead to fluctuation in marketprices of other mandarins also.
This excess amount of mandarin have to be stored forcertain period of time in cold storage plant until theyget into market.
The cold storage will increase the storage time of fruitinside the plant for extra two months. These inventoryoranges will be taken out for selling in period of lesserproduction i.e july to august.
.VJTI, Mumbai- Project Management
Dec 3, 2015
The excess of orange can be used tomake several consumable productssuch as orange bars, certain localproducts this will be done by thelocal labourers. It will be asource of income to them andgenerate employment. This can bedone in period from June toJanuary.
Even if fruit demand in market isless but those can be supplied tothe juice industries which requiresthese fruits throughout the year.The juice industry such as NOGA,Tropicana, Real, which will requirethe pulp And also to the cosmeticsindustry.
Main storage is the daily supplyfor the plant, which will go outfor selling it at the market nowthe excess of oranges will be keptin cold storage as inventorystorage.
VJTI, Mumbai- Project Management
Main Storage
Inventorystorage
Fulfilmentof currentdemand
Dec 3, 2015
CASE 2: Considering the demand exceeds supply
SPOKE AND HUB (MITIGATION PLAN)
The oranges will be bought from the nearby states, as Nagpur iscentralised place for all the cities and states such as Madhya Pradeshand Karnataka.
VJTI, Mumbai- Project Management
Nagpur
betul
chindwara
Ujjain
MandsaurRatlam
Chikmaglore
Bijapur
In this period itself theinventory storage oforanges will come forselling in market. So thestock of stored orangeswill go down.
In extreme case scenario,the last resort will be toclose down some sections ofCold storage system.
In this case the marketdemand may not getfulfilled will responsiblefor less supply to thecitrus industry.
Dec 3, 2015
Inter cropping
VJTI, Mumbai- Project Management Dec 3, 2015
Conclusion
Mandarin oranges grow well in a frost free, tropical to sub-tropicalregion, 1500 meters above sea level. The ideal annual rainfall forsuccessfully growing mandarin oranges is 100-120 cms and atemperature between 10-35 degrees Celsius. Mandarin oranges growbest in medium or light loamy soils with slightly heavy sub-soil.
By the availability of such plant the storage problem will be solvedat large extent.
Plant and storage cost of cold storage required for citrusindustries will be saved. Cost of Inventory will be saved.
Since cost of inventory is reduced they will be able to buy it athigher cost. This cost could be transferred to farmers as they willget the benefit of commodity. Same facilities can be used by othermarkets such as vegetable and other fruits.
Manpower has to be recruited as per industry norms so the benefit ofCTC.
For orange and fruit market 16.38 Acres available. Storage capacityis of godown at Mkt Yard 1000 MT
VJTI, Mumbai- Project Management Dec 3, 2015
References:
Data base of existing Kalamna Market at Nagpur.
Paper published by National Centre for Cold-chain Development(NCCD).
Modern cold storage (KSIDC).
Indian Horticulture Database 2014.
International Journal of Emerging Research in Management&Technology ISSN: 2278-9359 (Volume-2, Issue-3)
Kaur A., Sethi K. and Karan S.K. (2006). Marketing pattern ofgreen peas in Punjab. Indian Journal of AgriculturalMarketing. 20(2): 118-123
Websites:
www.nhb.gov.in
www.wikipedia.com.
VJTI, Mumbai- Project Management Dec 3, 2015
VJTI, Mumbai- Project Management
THANKYOU
In case of extra queries orbreak-ups , you maycontact the student authors/ mentors in the contactdetails provided
Dec 3, 2015