Paddy Pearl Project

7/30/2019 Paddy Pearl Project

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Entrepreneur profile

Name: Kuniyorath Hishad

Age: 20

Date of birth: 21-05-1987

Educational qualification: 10th passed with 70% mark12th passed with 70% mark

Professional qualification: BBA

Industry type: FMCG

Industry chosen: Rice industry

Initial investment 7 Crore

Main production unit: At Cochin

Target area: We target all Keralites settled worldwide.


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Entrepreneur profile

Name: Mr. X

Age: --

Date of birth: --

Educational qualification: --

Professional qualification: BBA

Industry type: FMCG

Industry chosen: Rice industry

Initial investment 7 Crore

Main production unit: At Cochin

Target area: We target all Keralites settled worldwide.


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Introduction to SSI

The small-scale industries (SSI) constitute an important segment of the Indian economyin terms of their contribution to the countrys industrial production, exports, employmentand creation of an entrepreneurial base. The Government established the Ministry of

Small Scale Industries and Agro and Rural Industries (SSI & ARI) in October, 1999 asthe nodal Ministry for formulation of policies and Central sector programmes/schemes,their implementation and related co-ordination, to supplement the efforts of the States forpromotion and development of these industries in India.

Employment GenerationSSI Sector in India creates largest employment opportunities for the Indian populace,

next only to Agriculture. It has been estimated that a lakh rupees of investment in fixed

assets in the small-scale sector generates employment for four persons.

According to the SSI Sector survey conducted by the Ministry and National Informatics

Centre with the base year of 1987-88, the following interesting observations were made

related to employment in the small-scale sector.

Generation of Employment - Industry Group-wise

Food products industry has ranked first in generating employment, providing

employment to 4.82 lakh persons (13.1%).

The next two industry groups were Non-metallic mineral products with employment of

4.46 lakh persons (12.2%) and Metal products with 3.73 lakh persons (10.2%).

In Chemicals & chemical products, Machinery parts and except Electrical parts, Wood


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products, Basic Metal Industries, Paper products & printing, Hosiery & garments, Repair

services and Rubber & plastic products, the contribution ranged from 9% to 5%, the total

contribution by these eight industry groups being 49%.

In all other industries the contribution was less than 5%.

Per unit employment

Per unit employment was the highest (20) in units engaged in Beverages, tobacco &

tobacco products mainly due to the high employment potential of this industry

particularly in Maharashtra, Andhra Pradesh, Rajasthan, Assam and Tamil Nadu.

Next came Cotton textile products (17), Non-metallic mineral products (14.1), Basic

metal industries (13.6) and Electrical machinery and parts (11.2.) The lowest figure of 2.4

was in Repair services line.

Per unit employment was the highest (10) in metropolitan areas and lowest (5) in ruralareas.

However, in Chemicals & chemical products, Non-metallic mineral products and Basic

metal industries per unit employment was higher in rural areas as compared to

metropolitan areas/urban areas.

In urban areas highest employment per unit was in Beverages, tobacco products (31

persons) followed by Cotton textile products (18), Basic metal industries (13) and Non-

metallic mineral products (12).

State-wise Employment Distribution

Tamil Nadu (14.5%) made the maximum contribution to employment.

This was followed by Maharashtra (9.7%), Uttar Pradesh (9.5%) and West Bengal (8.5%)

the total share being 27.7%.

Gujarat (7.6%), Andhra Pradesh (7.5%), Karnataka (6.7%), and Punjab (5.6%) together

accounted for another 27.4%.

Per unit employment was high - 17, 16 and 14 respectively - in Nagaland, Sikkim andDadra & Nagar Haveli.

It was 12 in Maharashtra, Tripura and Delhi.

Madhya Pradesh had the figure of 2. In all other cases it was around the average of 6.


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Production

The small scale industries sector plays a vital role for the growth of the country. It

contributes 40% of the gross manufacture to the Indian economy.

It has been estimated that a lakh rupees of investment in fixed assets in the small scalesector produces 4.62 lakhs worth of goods or services with an approximate value addition

of ten percentage points.

The small scale sector has grown rapidly over the years. The growth rates during the

various plan periods have been very impressive.

The number of small scale units has increased from an estimated 8.74 lakhs units in the

year 1980-81 to an estimated 31.21 lakhs in the year 1999.

From the year 1990-91 this sector has exhibited a comparitively lower growth trend

(though positive) which continued during the next two years. However, this has to be

viewed in the background of the general recession in the economy. The transition period

of the process of economic reforms was also affected for some period by adverse factors

such as foreign exchange constraints, credit squeeze, demand recession, high interestrates, shortage of raw material etc.

When the performance of this sector is viewed against the growth in the manufacturing

and the industry sector as a whole, it instills confidence in the resilience of the small scale

sector.

The estimates of growth for the year 1995-96 have shown an upswing. The growth of SSI


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sector has surpassed overall industrial growth from 1991 onwards. The positive trend is

likely to strengthen in the coming years. This trend augurs a bright future for the small

scale industry.

Export contribution

SSI Sector plays a major role in India's present export performance. 45% - 50% of the

Indian Exports is being contributed by SSI Sector. Direct exports from the SSI Sector

account for nearly 35% of total exports. The number of small scale units that undertake

direct exports would be more than 5000.

Besides direct exports, it is estimated that small scale industrial units contribute around

15% to exports indirectly. This takes place through merchant exporters, trading houses

and export houses. They may also be in the form of export orders from large units or the

production of parts and components for use for finished exportable goods.

It would surprise many to know that non-traditional products account for more than 95%of the SSI exports.

The exports from SSI sector has been clocking excellent growth rates in this decade. It

has been mostly fuelled by the performance of garment, leather and gems and jewellery

units from this sector.

The lucrative product groups where the SSI sector dominates in exports, are sports goods,

readymade garments, woollen garments and knitwear, plastic products, processed food

and leather products.


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Reasons for the selection of rice industry

The main reason behind choosing the particular topic is the tremendous growth of rice

industry both inside and outside India. The important factors that influence the growth indemand for a major staple, such as rice, are growth in the population, increases in percapita incomes, and the rate of urbanization of the population structure. Only thepopulation factor will be provided a major treatment in this paper, but some remarks needto be put forth regarding the effects of expected increases in per capita incomes andincreasing urbanization.

For increases in per capita incomes, the demand effect will be felt strongest when thepoorer households as the shift from inferior staples to rice realize per capita incomeincreases. For higher income households, further increases in per capita incomes resultmainly to a shift from standard to higher quality rice Increasing urbanization, on the other

hand, has a negative effect in rice demand as other and more food sources becomeavailable with current income.

Increase in demand for rice.

In million metric tons

Country 1993 2020 Absolutechange(1993-2020)

Percentagechange

India 77.4 113.01 35.60 46


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SURVEY

To find out the taste and preference of the customer we conducted a survey among 30

people both inside and outside Kerala as we are marketing our product world widefocusing Keralites. We surveyed 20 people who are settled with in Kerala and 10Keralites who are settled in Bangalore. The tool that we used to conduct the survey wasquestionnaire. The result of our survey is as shown.

1) The first question was regarding the purchasing habit of customers.

30%

20%

50%

0%

Once in a wek

Twice in a week

Once in a month

Once in 6 month

Out of the 30 people surveyed 50% of people buy rice once in a month, 30% of peoplebuy once in a week and 20% buy once in two week.


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2) The second question was regarding the aspect for which the customers give moreimportance.

37%

63%

0%0%0%0%

Price

Quality

Out of the 30 people we surveyed 63% people give more preference to quality and only37% people give more preference to price.

3) The third question was regarding the brand of rice that the customer is currentlyusing.

0

2

4

6

8

10

12

14

Nenmani

Nirapara

Sadhya

Nandhani


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Out of the 30 people 14 are using Nirapara rice, 8 are using Nenmani rice, 5 are usingSadhya rice and 3 are using Nandhani rice.

4) The fourth question was why they prefer that particular brand.

20%

40%

40%

Low price

High quality

High quality low

price

40% of the people are buying the particular brand due to its high quality, another 40%is buying due to high quality and low price of the particular brand and the remaining20% is buying due to low price of the particular brand.

5) The fifth question was based on the brand loyalty of the customers.

57%

43%

YesNo


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Out of the 30 people we surveyed 57% are brand loyal and 43% are not brand loyal.6) The sixth question was regarding the kind of shop from which the customers

usually purchase rice.

47% people usually buy rice from retail shops, 30% from bigshops like big bazaars retail shops and 23% of people from margin free shops.

7) Seventh question was regarding the factor that influences the customers to buy aparticular brand of rice.

60%20%

20%

Past expirience

Advertisment

Other factors

60% of the people are influenced to buy a particular brand of rice from their pastexperience, 20% influenced by advertisement and remaining 20% are influenced byother factors.

30%

23%

47%

Big shops like big

bazaars

Margin free shops

Retail shops


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4Ps of marketing

Product

What is it that you are selling? A good marketing manager will be particularly interestedin knowing what "need" addresses? Engineers like to think in terms of what problem doesit solve? Engineers would think in terms of its functional specifications and marketingpeople would think more in terms of its features and benefits. Manufacturing people willbe thinking about how to make it and along with the accounting group they will bewondering what it costs to make (or buy). Hopefully, they won't be wondering and willdefer instead to rigorous analysis.

In any event, the product is the "currency" which ultimately gets exchanged for cash.

Denny Doyle, consultant and author (founder of Digital Equipment Canada), always toldme that the product is that which you trade for cash. In other words, your customers wantyour product and you want their cash and all you do in business is trade those two items.

PADDY PEARLrice is available in a wide range of varieties that suit various tastes -

brown rice and white rice in round-grained and long grained varieties. Besides these,there are specialty rice varieties for the varied traditional users of rice in kitchens allover the world.

Rice being the staple food from breakfast to dinner and dessert, PADDY PEARLrange

of rice caters to every application of rice in the lives of the people especially of southIndia.

PADDY PEARLrice is the only rice processed using the nutri-select process which

ensures that only the best quality rice with the optimum value of Vitamin B is selectedby the Z sortex machine and packed.

PADDY PEARLrice comes in neat porous traditional jute-bags that help air circulation

that is essential to enhancing shelf life, keeping it fungus free.


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The PADDY PEARLrice range

Single Matta Rice Idli Rice

Rose Matta Rice Jyothi Rice

Payasam Rice Jaya Rice

Matta Broken Rice Cherumani Rice

Ponni Rice Vita Rice.

Price

What is Price? The answer may not be as obvious as one may think. Price is not just thesticker price or the price invoiced. It goes deeper. For example, what about terms? If youcan have 30 days to pay for a purchase or as we often hear on radio commercials forhousehold furniture, "nothing down, no interest, low monthly payments starting nextyear!", or car dealers offering financing of 2.68% on automobile purchases. A goodexample of clever pricing was Xerox's decision to "loan" customers the Xerox 914 (thefirst commercial push-button office copier) and to charge them only $.05 per copy.

As a product moves through the distribution channels, e.g. from manufacturer todistributor to dealer to customer, there are prices set along the way. The manufacturer'sselling price to the distributor becomes the distributor's cost. Is that "cost" in line withcompeting products which the distributor might carry instead? Is the cost low enough sothat dealers will have enough margin in order to want to carry the product? Obviously, itis important to understand pricing and margins along the distribution path. Ultimately, theprice to the consumer or last purchaser in the chain must be such that it is competitive.Who sets this price? Does the manufacturer or the dealer have the final say? Can themanufacturer in any way control the price of his product when it hits the street (i.e. retaillevel)? Most importantly, can the manufacturer make (or sub-contract) the product for a

cost to him which allows him to meet his profit objectivesgiven the retail price target?

There are various pricing strategies that you have probably heard about. For example,markup pricing is the setting of a price based on one's cost. This may be appropriatewhen reselling a product used in providing a service. For example, an auto mechanic maymark up her cost of auto parts by 50%. This may be a simple way for her to determineselling price and from her experience this is in line with what other mechanics are doing.
http://www.nirapara.com/payasamrice.htmhttp://www.nirapara.com/payasamrice.htm


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However, it may be totally inappropriate to set pricing based on cost in the case of a near-commodity item. It should be noted that if you are constrained by both your pricing andcosts, then unless you are a particularly efficient operator, it may not make sense to be inthis business.

Currency is another important aspect for technology companies to consider. Because themarkets for technology based products are usually global, you should price your productsin U.S. dollars, the currency used for international trading. You might even considerpricing on an FOB (Free on Board) Destination basis. For example, if I am selling opticalencoders to machinery makers in Germany, it might behoove me to price on an FOBStuttgart basis. This means that the German customer does not have to calculate freight,duty, etc. in order to come up with a true landed cost. When I was selling video terminalsin Germany in the 1970's, I priced in Deutschmarks, FOB Frankfurt. This meant that Iwas taking more risk with respect to currency fluctuations, freight and insurance charges,but by consolidating large volumes to Frankfurt, I was able to greatly reduce air freightexpenses thereby offering a competitive price to my distributors.

There are many business and marketing theories on pricing. It is not possible to do justiceto this interesting and complex topic herein. The important thing to remember is that this,perhaps next to the product itself, is one of the most important P's of marketing. And youset it.

Product price is in par with the market competition. The latest technology of sortex isbeing used in the production, sortex machine consumes high power and hence increasingthe cost of the product.

Place (i.e. distribution)

Placement if the product is crucial. There are often many paths (i.e. channels) which aproduct can take in going from your shop to the customer. A channel "map" can be drawnin order to visualize this keeping in mind all the middlemen, agents, shops, stores, etc.along the way. Defining a channel strategy is not simply an arbitrary matter. Bear in mindthat all middlemen along the way are, in essence, in partnership with you to sellsomething to the end-user. Therefore, your product and its other 3 P's must be such thatvarious resellers in your channel have their needs (e.g. margin objectives, volumes) met.

A choice of channels may also be dictated by cost constraints. If it is considered tooexpensive and risky to advertise and promote a new product in an established market, it

may make more sense to go the Lanier route in which case your partner will absorb theup-front sales expenses allowing you to concentrate more on product development.

At the risk of oversimplifying, a good practical way to determine, or at least analyze,appropriate channels for your product would be to start at the point of final purchase.Who is the final consumer or user of your product? Where does that person look whenbuying your type of product? If she buys this product from an office products retail store,


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then where does that retailer obtain his products... and so on. Once the various channelshave been identified, it is easier to determine which ones make the most sense or whichones offer the path of least resistance.

The choice of channels may also have a significant bearing on pricing. For example, in

the AES/Lanier case, it was possible for AES to offer very attractive pricing to Lanierbecause Lanier was absorbing the promotional and distribution costs. This gave Lanier anincentive to focus on sales and marketing and not compete with AES by alsomanufacturing such machines.

Product is to be launched in the kerala market and also to be exported to all around theworld targeting mainly keralites.

Promotion

Promotion is that term which many people confuse with the word "marketing". For many,

the words promoter and marketer are synonymous. But, as we know, promotion is justone of the four P's and a good "marketer" is not just a good promoter but also a goodplanner and a good listener.

Promotion can take many forms: advertising in various media, events, press releases,trade shows, brochures, flyers, and internet sites to name a few. Promotion means tocreate awareness although awareness is just the beginning. Good promotion compels thebuyer to buy. The "need" for the product must be addressed. How does it solve thecustomer's needs (even needs he doesn't know he has)?

Promotion is unlimited. There is virtually no limit on the amount of TV, radio, and

newspaper advertising that one can do. When Apple announces the Macintosh in 1984, itused a various "shocking" television advertisement that was aired during the AmericanSuper Bowl broadcast. What an audience! What an impact! And then it was followed upwith an inundation of print advertising as well as focused trade publications and tradeshows. Of course, this also resulted in extensive "free" media coverage because of thenews worthiness of this innovation.

What works best for a technology company? The following chart may provide someinsight with respect to the importance of the various tools which can be used.

We have planned to aggressively promote our product, through print Adds and T.Vcommercial.

Our research has shown that more than 70% of the purchasing power of Rice is possessedby women, so we have planned to advertise on T.V serials.


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Project cost estimation

Equity: 3, 00, 00,000,

Debt: 4, 00,00,000. (Loan from KSIDC (Kerala State Industrial Development

Corporation @ 16% interest)

Working capital loan: 2, 00, 00,000 from ICICI bank @ 12% interest.

Land (Office and Building): 2.5 acres @ 30,000/cent = 75, 00,000,

Machinery: 3, 50, 00,000,

Factory and Office building: 1, 50, 00,000,

Electrification: 1, 25, 00,000,

Raw materials: 2, 00,00,000.


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Machine used

Bhuler Silky Sortex:

The sortex is the most expensive machine used in manufacturing of rice, it cost around75, 00,000.

It is used to differentiate rice into different qualities and also used to differentiate stonesand other particles.

Sortex is a computerized machine and it differentiates Rice on the basis of quality byusing colour differentiation technique.

Location:Company will be set up in the worlds largest industrial belt. Our company will belocated near Cochin.


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Manufacturing flow chart:

A variety of key equipments are used in a systematic order as per the international norms.The key Equipments used for the processing are Automatic flow balance, PaddyClassifier Hi-power Electro-Magnetic, Separator, Destoner, Cyclone Separator, De-husker, Separator Drum Grader, Top Whitener, Aspiration Channels Silky Polisher,Indent Cylinder Programmable Logic Controllers, Storage Bins, Automatic Weighing

Machines and Packaging Equipment.

Processing Steps

Step 1: Automatic flow balancer

Used for the gravimetric proportioning of the free flowing product from a choke productstream. The balancing of the gravimetric flow rate will be attained regardless of thespecific gravity or difference in the moisture content of the product.

Step 2: Paddy Classifier

This is for removing large, small and light impurities.


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Step3: High power Electro-magnetic Separator

It is used to remove metallic impurities including nails, wires, screws, iron powders, etc.

The stock stream is distributed evenly over the entire width of the apparatus, using flapand flows over a permanent magnet on to which the metallic particles cling.

Step 4: Destoner

This facilitates the continuous separation of stones from the paddy stream. The propertyused here is the disparity in the terminal velocity of the materials and the heavierimpurities like stones, metals and glass pieces.

Step 5: Cyclone separator

The cyclone separator is a centrifugal one and the dust particles are carried outwards. Thedust settles down and is conveyed through an air lock valve. The gas changes thedirection of flow above the air lock now virtually free from dust. The air-locks ensure adust free atmosphere in the plant.


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Man power planning

Managing Director:

Managing director will be given a monthly salary of Rs: 50,000.

Executive Director:

Executive director will be given a monthly salary of Rs: 50,000.

General Manager:

General Manager will be given a monthly salary of Rs: 20,000

Production Manager: 10,000

Production Manager will be given a monthly salary of Rs: 10,000

Export Manager: 10,000

Export Manager will be given a monthly salary of Rs: 10,000

Accounts Manager: 8,00,000Accounts Manager will be given a monthly salary of Rs: 8,00,000


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Plant Supervisor: 5,000.Plant Supervisor will be given a monthly salary of Rs: 5,000,One supervisor each in two shifts.

(4)Operators: 5,000Operators will be given a monthly salary of Rs: 5,000

(4)Helpers: 3,500Helpers will be given a monthly salary of Rs: 3,500

(4)Packing Staffs: 3,500Packing Staffs will be given a monthly salary of Rs: 3,500

Loaders and unloaders:Piece rate system will be followed in the payment to loaders and un loaders.

Human resource policies

40 workers are divided into two shifts, 20 workers in each shift.1st shift is from 8 am-8pm. 2nd shift from 8 pm 8 am. One supervisor each in two shifts.

Weekly one holiday + 13 Public holidays will be given to the employees. 30 minutes teabreak will be given to all employees at 9 a.m. All employees will be given lunch breakfrom 12.30- 1.30. During evening also 30 minutes tea break will be given from 4- 4.30p.m. Similarly night shift employees are also given rest time.

Leave policies

Our company will give holidays to all employees on Sundays and all public holidays.Leave will be given to all employees if there is a valid reason. All the employees will begiven 10 casual leaves (leave with pay) and 10 medical leaves. The employees who are

going to take casual leave must get prior permission from H.R manager. The employeesmust give a leave application in writing to the H.R manager stating the reason for leave.If H.R manager thinks that there is a valid reason for taking leave he will give permissionto take leave. This will also help the H.R manager to equally divide the workload amongother employees. The employees who take medical leave must also give a statement inwriting to the H.R manager along with the medical certificate.


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Training policies

Our company believes that the product quality can be maintained only with the help oftrained employees. Various unwanted wastes can be avoided if proper training is given tothe employees. So all the employees are trained before they are appointed for actual job.

All the technical staffs who are working with various machines aregiven on the job training. On the job training will help those employees to becomefamiliar with the work place and companies work environment. All the managers will be

given training from IRRI after one year of their appointment. Need for training. TheInternational Rice Research Institute (IRRI) is the world's leading rice research andtraining center. Based in the Philippines and with offices in 10 other Asian countries, it isan autonomous, nonprofit institution focused on improving the well-being of present andfuture generations of rice farmers and consumers, particularly those with low incomes,while preserving natural resources. IRRI is one of 15 centers funded through theConsultative Group on International Agricultural Research (CGIAR), an association ofpublic and private donor agencies.

All the non-technical staffs, who are in marketing, finance and H.Rdepartment will be given vestibule training, where actual working conditions arestimulated in a classroom. Materials, files and equipment, which are used in actual job,are also used in this training. Training will be given to all employees once in a year. Theywill also be educated regarding various changes happening in the rice industry aroundthem. Well-qualified professionals will give training.


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Conduct

No employees will be terminated. But if he/she is found involved in any fraudulentactivity or misconduct towards the management or to the customers his service will be

immediately terminated; Employees are expected to be sincere towards their work. Allthe employees who are production, packing and packaging department are givenuniforms by the company, which they have to wear during work time. The people whoare in marketing department are expected to behave well to the customers because theyare the persons who take company to the outer world. If there is any misconduct from thepart of marketing personnel's, the company has right to take action against them.

Documents

Paddy Pearl Project