A PROJECT REPORT

ON

ENTREPRENEURSHIP DEVELOPMENT(Manufacturing of Caffeine from Tea waste)

SUBMITTED TO:- SUBMITTED BY:-

MR.SAMANNAY BORUAH GAUTOM SONOWAL Lect. Of BUSINESSDEPARTMENT OF MBA 2nd SEM BUSINESS ADDMINISTRATION, ROLL NO. 91 NERIM,GHY-28 SESSION:-2011-13

ACCKNOWLADGMENT

AT THE VERY FRONT PAGE,I WOULD LIKE TO MY RESPECT AND SINCEREST TO Mr.SAMMANOY BORUAH FACULTY OF THE DEPT. OF MASTER OF BUSINESS ADMINISTRATION,NERIM,GHY FOR GIVINGME THE OPPORTUNITY TO DO THIS PROJECT AND ALL ENCOURAGEMENT.

FINALLY , I ALSO THNKFUL TO ALL THOSE WHO HELPED ME AT ANYTIME DIRECTLYOR INDIRECTLY DURING THOSE TIME.

THANKS ONCE AGAIN TO ALL…

EXECUTIVE SUMMARY

1. NAME OF THE UNIT :-M/S LA2 CAFFEINE

MANUFACTURERS

2. TYPE OF THE BUSINESS :- Manufacturing of Caffeine

3. LOCATION :- CHALAKOTOKY, DULIAJAN

4. LEGAL STATUS :-Sole proprietorship

5. NAME OF THE PRORITORSHIP:- GAUTOM SONOWAL

6. PROFILE OF THE PROMOTER:-The promoter of the project Sri Gautom Sonowal ,Age-22, is from Duliajan town, P.O.-Duliajan, Dist.Dibrugarh,Pin-786602(ASOM).He has completed his graduation in Bachelor of Business Administration and currently persuing MBA course from NERIM,GUWAHATI.

7. PRODUCT :-Caffeine from tea waste

8. TARGET MARKET :-Pharmaceuticals

9. CONCEPTION OF PRODUCT IDEA:- The promoter has conceived the idea of manufacturing of Caffeine based on the huge availability of raw materials nearby the area and the growing demand of Caffeine.

10. MARKET APPRAISAL:-The target for the product include the pharmaceuticals.

11.TECHNICAL APPRAISAL:-Raw Materials for the project proposed to purchased mainly from the Tea Factories and near by the local area.

TABLE OF CONTENT

ACKNOWLADGEMENT EXECUTIVE SUMMARY PROJECT AT A GLANCE

INTRODUCTION MARKET SURVEY MANUFACTURING PROCESS FINANCIAL ANALYSIS PROJECT APPRAISAL

MARKET APPRAISAL…………. TECHNICAL APPRAISAL……… MANAGERIAL APPRAISAL…… FINANCIAL APPRAISAL………

ANNEXURES……………………………………… BIBLIOGRAPHY…………………………………..

INTRODUCTION Entrepreneurs are the seeds of industrial development. An entrepreneur is a person who organises and manages a business undertaking and assumes risk for the sake of profit. Entrepreneurship development through promotion of micro, tiny and small enterprise has been accepted in our country as a strategy for achieving the twin objectives of solving the problems of unemployment and also rapid industrialisation.

The north-east region has a vast potential for developing industries in various area . Just required only a little efficiency to do something with the great interest of mind.

Caffeine is widely used in pharmaceuticals. At present manufacturing capacity for caffeine in India is not sufficient to meet the growing demand. Caffeine has an excellent export potential. So keeping in view large scale increase in the demand of caffeine, the setting up of new plants is strongly recommended to meet the additional requirement.

Regional research laboratory, Jorhat has developed a process for the production of caffeine from tea waste.

The production of tea is estimated to be well over 640 ml. kg per year.In the processing of tea, 3-4 percent of the total amount comes out tea waste, which is being wasted at present by burning or as manure.Now tea waste is being utilized for manufature of caffeine.It contains 3-4 percent of caffeine.So manufactured from this tea waste the import of the material could be stopped.

USAGES Caffeine is widely used in pharmaceuticals as free base and in mixtures, such as citrated caffeine and benzoate. Caffeine is very useful as stimulant of central nervous system and as a diudratic.it gives definite relief from fatigue and neuralgia. It is also used in headeches originating from eye strains. It is also used in cola beverages.

It also a cardiac stimulate. Its most important psychological action is that on the kidney causing an increased secretion of urine. Caffeine is exerted in the urine unchanged but chiefly as dimethyl xanthine, methyle xathine, and xathine.There are still more applications of caffeine as medicine.

Considering the market demand for the product and to generate employment in this area, the promoter proposes to set up such a unit of manufacturing of Caffeine at Duliajan,Dist. Dibrugarh,pin-786602(Asom)

In the name of ……

“M/S LA2 CAFFEINE MANUFACTURERS”

PROPERTIES OF CAFFEINE Caffeine or therine C4H10N4O2 occurs in tea,coffee,gurana,kola nuts and in small amounts in cacao. Caffeine is a white powder. It is soluble in boiling water and forms hydrates. The hydrates looses its water completely above 100 degree celsius. It is odoureless and has a very bitter taste.

MARKET SURVEY Caffeine and its compound has been shown to have many uses in pharmaceutical and food industry.

Caffeine is manufactured in India from tea waste abundance from the tea gardens of Darjeeling, Jalpaiguri and Assam..

As the production of soft drink increases the demand of caffeine is also likely to increase.

The consumption of caffeine is estimated to be 90 tonnes per year whereas only 60 tonnes are produced at the present.

PROJECT AT GLANCE

1. NAME OF THE UNIT :-M/S DJ CAFFEINE

MANUFACTURERS

2. CONSTITUTION :-SOLE PROPRIETORSHIP

3. NAME OF THE PROMOTER:- SRI GAUTOM SONOWAL

4. PROPOSEDD LOCATION :- CHALAKOTOKY GAON

P.O.-DULIAJAN

DIST.-DIBRUGARH

PIN-786602

5. TOTAL PROJECT COST:-

TOTAL FIXED CAPITAL

Land OwnBuilding 2,00,000Plant and machinery 2,99,000Other fixed assets 20,000Miscellaneous 1000 Total 5,20,000

TOTAL WORKING CAPITAL/MONTH

Raw material 1,15,000Salary and wages 41,200Utilities and overheads 27,800 Total 1,84,000Working capital for 3 months 1,83,000 x 3 Total 5,52,000

TOTAL CAPITAL INVESTMENT

Total fixed capital =5,20,000

W.C. for 3 months=5,52,000

Total =10,72,000

6. MEANACE OF FINANCE:- SELF

7. RETURN ON INVESTMENT :- 58.32%

8. RETURN ON SALE :- 22.5%

9. BEP :- 51%

MANAGEMENT APPRAISAL

The unit will be managed by the promoter himself. He is technically qualified for this purpose. The other manpower will be appointed as follows -

Manager 1Chemists 2Plant supervisor 1Skilled workers 10Unskilled labor 20Accountant 1 TOTAL 35

FINANCIAL APPRAISAL:-

TOTAL PROJECT COST= 10,70,000.00 (TEN LAKH SEVENTY THOUSAND ONLY)

THE TOTAL PROJECT COST WILL BE COMPOSED OF SELF FINANCE.

PLANT CAPACITY = 0.14 Tones/day

=42.00 tones/annum

POLLUTION CONTROL:-

THERE IS NO MAJOR POLLUTION PROBLEM ASSOCIATED WITH THIS INDUSTRY EXCEPT FOR DISPOSAL OF WASTE WHICH SHOULDBE MANAGED APPROPRIATELY. THE ENTERPRISE IS ALSO ALLOWED BY THE POLLUTION CONTROL BORAD.

BASIC AND PRESUMPTION:-.

THE UNIT WILL BE REMAIN OPEN FOR 8(EIGHT)HOURS A DAY FOR 300 WORKING DAYS IN A CALENDER YEAR.

THE PRICE OF THE RAW MATERIALS AND EQUIPTMENT IS AS PER PRESENT PRICE.

MANAGERIAL APPRAISAL:-

The promoter of this proposed project unit is Sri Gautom Sonowal, S/O- Mr. Dilip Kr. Sonowal. He is an educated youth. He has completed his Bachelor in Business Administration, and also persuing the MBA degree from NERIM, GHY .He is quite capable of managing of unit.

MANUFACTURING PROCESS

Caffeine is manufactured by extraction from tea or coffee.Commercially caffeine is manufactured from tea dust, sweepings and sticks.The process of manufacturing caffeine is shown below in a flow chart----

1000 gms of tea waste is taken in a vessel and 8000 gms of water is added,then

300 gms of lime water is added and the mixture is boiled for about 2 hrs,and then allow it to cool

The slurry is filtered and the filtrate is extracted with benzene in a counter current liquide extractor

The benzene is separated and distilled so that benzene is fully recovered and the crude caffeine is left as residue.

The amount of caffeine is 25 gms. Of 99% purity.

FINANCIAL ANLYSIS

1. PLANT ECONOMY

Rated plant capacity 00.14 tones/day42.00 tones/annum

CAFFEINE FROM TEA WASTE

2. LAND AND BUILDING

Land(800 Sqm) OwnBuilding 2,00,000

3. PLANT AND MACHINERY

Solid-liquid extractor 10 tons of total material

30,000

Battery of strorage tanks 6 tanks each of tons capacity

20,000

Condenser 5000Extract storage tank of 6 tons 4000Electric hoist 2 tons 40’ lift 20,000Piping, fittings and valves etc. 25,000Instrumentation 25,000Steam boiler 40,000Installation and eraction 30,000Condenser 50,000Lime feed hopper 30,000Tea waste feed hopper 1.8 tonnes 20,000 Total 2,99,000

4. OTHER FIXED ASSETS

Office equipment, furniture and other accessories

20,000

Total 20,000

5. TOTAL FIXED CAPITAL

Land OwnBuilding 2,00,000Plant and machinery 2,99,000Other fixed assets 20,000Miscellaneous 1000 Total 5,20,000

WORKING CAPITAL REQUIREMENT/MONTH

6. RAW MATERIALS

Tea waste 500 @ 100 per ton 50,000Lime 100 @ 300 per ton 30,000Process water 5000Benrol 10 tons@ 3000 30,000 Total 1,15,000

7. SALARY AND WAGES/MONTH

Manager 1 no. 4300Chemists 2 no. 5000Plant supervisor 1 no. 3800

Skilled workers 4 no. 8000Unskilled labor 8 no. 12000Accountant 1 no. 1900 Total 35000Plus perks @ 20% p.a. 7000 Total 41200

8. UTILTIES AND OVERHEADS

Power consumption 2000 Kwatt @ Rs 2.4 per Kwatt per hr

4800

Stationary,postage,telephone etc. 3000Publicity and sales promotion 10,000Packing and other miscellaneous expenses

10,000

Total 27800

9. TOTAL WORKING CAPITAL/MONTH

Raw material 1,15,000Salary and wages 41,200Utilities and overheads 27,800

Total 1,84,000Working capital for 3 months 1,83,000 x 3 Total 5,52,000

10. TOTAL CAPITAL INVESTMENT

Total fixed capital =5,20,000

W.C. for 3 months=5,52,000

Total =10,72,000

11.COST OF PRODUCTION

Working capital 1,84,000x12 22,08,000Depreciation on Plant & Machinery @ 10%

29,900

Depreciation on building @ 10% 20,000 Total 22,57,900

12.TURNOVER/PER MONTH

42,OOO X 55.00=23,10,000

13. PROFITABILITY

Sales revenue =23,10,000

Cost of production = 22,57,900

Total = 52,100 (per month)

Profit per year=52,100 x 12

=6,25,200

14. PROJECTED RATIOS

Percentage return on sales turnover

= profit X 100

Sales revenue

= 52100 X 100

23, 10,000

= 2.25 X 100

= 22.5

Rate of return on total capital investment

= profit per year X 100

Total investment

= 6,25,200 X 100

1072000

= 58.32%

15. TOTAL FIXED COST

Depreciation on Plant and Machinery =29,900

Depreciation on Building =20,000

Electricity = 4800

Total fixed cost = 54,700

B.E.P .= Fixed cost

Fixed cost+ profit

= 54700

54700+52100

= 54700 /106800

= 51%

ANNEXURE-I

Electric Hoist 2 tons 20’ lift 20,000

Lime feed hopper 0.9 tons 15,000

Tea waste feed hopper 1.8 tonnes 15,000

Solid-liquid extractor 8 tons of total material 48,000

Battery storage tanks 4 tanks each of tons capacity 60,000Condenser 25,000

Battery pump 200 gpm 15,000

Broth feed tank 8 tons 17,000Extract storage tank 4 tons 8,000Liquid-Liquid extraction column 35,000

Evaporator 45,000

Intermediate Benzene 4 tons 10,000Main storage tank tank for Benzene 40 tons 35,000

Benzene overhead feed tank 1 ton 10,000

Benzene feed pump 10 gpm 7,000Steam boiler 50,000Other machinery 20,000

Installation and Erection @ 10% 38,560

Total 7,18,000

ANNEXURE – II

SUPPLIER OF CHEMICALS

1. M/S Batra Chemicals Pvt. Ltd. 1/1/41, Singh sabha road, S. MandiKolkatta-203142

2. North-East chemicals & FertilizersWest bypass,tarajan,Jorhat-785001

SUPPLIERS OF PLANT AND MACHINERIES

1.M/S Mirch-mirex Ltd.

Ismain building,

Dr. Dadabhai Naroji Road,

Kolkatta-1

2.Singh & Songs Ltd.

Lahoti,

Jorhat-785001.

ANNEXURE-III

To

THE REGIONAL DIRECTOR,

POLLUTION CONTROL BOARD.GUWAHATI.

Subject: Application For the no objection certificate.

Dated-xx.xx.xx

Sir,

With reference to the subject cited above I have the

honour to inform you that i want to set up a “manufacturing of

Caffeine powder from tea waste” plant at Chalakotoky Gaon in

Duliajan . As per my research I have come to know that it

won’t have any detrimental affect in the environment. So I

kindly request you to grant me a no objection certificate (NOC)

for the plant. I will be thankful to you if you grant me the

certificate.

Your’s faithfully,

Gautom Sonowal

Chalakotoky gaon,

Duliajan(Asom)