financal projections and assumptions

1. ACHARYA N.G.RANGA AGRICULTURAL UNIVERSITY
AGRICULTURAL COLLEGE , NAIRA
By
Ch.Eshwar sai prasad
NA/2017-014
ELP unit : Commercial Vermiculture & Biofortified vermicompost production
Detailed Project Report
On
Neem oil & Neem cake manufacturing unit

2. Introduction
NEEM OIL :
Neem oil is obtained from the crushing of neem seed kernals which has wide range
applications in agriculture, pharmaceuticals, cosmetics etc., Azadirachtin is one of the
main constituent of the neem oil. Neem seed oil is bitter with garlic/sulphur smell and
contains vitamin E and other essential amino acids.
NEEM CAKE:
Neem cake is the de-oiled residue that is used after Neem kernels are crushed for their
oil. In this kernel, there are some nutrients such as NPK means nitrogen-phosphorus-
potassium as well as tri terpenoids and iso prenoids. These nutrients are nematicidal in
nature so the Neem cake ends up with these properties.

3. ENTERPRISE AT A GLANCE
NAME OF THE ENTERPRISE Esh-Mart enterprises
NAME OF THE PROMOTER &
BACKGROUND
Ch.Eshwar sai prasad, Age: 22 years
B.Sc(Hons) Agriculture
NAME OF THE PRODUCT Neem oil & Neem cake
LOCATION OF THE UNIT Visakhapatnam (near rural areas)
NUMBER OF WORKING DAYS PER
YEAR
300
PRODUCTION CAPACITY 12600 l of neem oil & 18 tons of
neem cake
PROJECT COST Rs.6,40,650/-
BENEFIT COST RATIO 1.38

4. MANUFACTURING PROCESS
Collection of raw materials i.e., neem
seed kernals
Washing of procured neem seed
kernals
Drying of neem seed kernals
Dried seeds are passed trough
cleaner for separation of impurities
Cleaned neem seed kernals are
boiled in boiler
After some rime neem seed kernals are passed into the cold press oil
expeller for mechanical extraction , necessary temperature is maintained
Neem oil is collected
from oil expeller
The leftover byproduct neem cake
is collected and pulverized
Oil is filtered through
filter press
Purified oil is
collected
Packing in bottles marketing
Packed in bags

5. MARKETING ASPECTS
Neem oil is also potent element in pest repellent, which ultimately favors the
market growth since it encourages neem oil manufacturing.
Rising demand from farming community majorly driving the over all growth of this
market. During these present days the trend is shifting towards organic agriculture,
organic products, fruits, vegetables as people are well conscious about their health.

6. COSTS & CAPITAL INVESTMENT
S.No Particular No. of
items
Price per
unit(Rs/-)
Total
amount
(Rs/-)
a) Land & building - - -
b) Machinery
Seed cleaner 1 45000 45000
Steam boiler 1 125000 125000
Cold press oil
expeller
1 180000 180000
Oil press filter 1 50000 50000
Motor pump 1 15000 15000
Subtotal 415000

7. S.No Tools & equipment No. of items Price per
unit(Rs/-)
Total amount
(Rs/-)
c) Bag sewer 1 1500 1500
Bottle capping
machine
1 6000 6000
Synthetic drums 15 300 4500
Buckets 3 200 600
Measuring jars 3 200 600
Sub total 13800
d) Furnitre
Wooden table 1 4000 4000
Chairs 3 1500 4500
Sub total 9500
e) Electrification
(wiring,lights)
- - 6000
Sub total 6000
TOTAL FIXED CAPITAL INVESTMENT (a+b+c+d+e) 444300

8. B. Working capital investment (1 month)
S.No Particular No. of items Price per unit(Rs/-) Total amount(Rs/-)
a) Raw materials
Neem seed kernals 3000kg 30/kg 90000
Bottles 1100 5/bottle 5500
Polythene bags 35 20/bag 700
b) Salaries
Supervisor 1 20000 20000
Men 2 10000 20000
Women 2 8000 16000
Driver cum helper 1 8000 8000
C) utilities 29650
TOTAL WORKING
CAPITAL
(a+b+c) 189850

9. C. Pre-operative expenditure
S.No Particular Amount (Rs/-)
a) Inaugural expenses 2000
b) trail run expenses 4500
TOTAL PRE OPERATIVE EXPENSES(a+b) 6500
COST OF PRODUCTION (1 MONTH)
S.No particular Amount(Rs/-)
a) Total working capital investment 189850
b) Inrerest on total investment @14% 7474
c) Depreciation machginery @10% 3458
TOTAL 200782

10. Total project cost
S.No particular Amount(Rs/-)
A. TOTAL FIXED CAPITAL INVESTMENT 444300
B. TOTAL WORKING CAPITAL INVESTMENT 189850
C. TOTAL PRE OPERATIVE EXPENSES 6500
TOTAL PROJECT COST 640650
Sales revenue
Profitability
S.No Product Quantity sold Unit price(Rs/-) Amount(Rs/-)
1. Neem oil 1050 Lt 250/lt 262500
2. Neem cake 1500 kg 10/kg 15000
TOTAL 277500
S.No Particular Per month(Rs/-) Per year(Rs/-)
a) Total sales 277500 3330000
b) Total costs 200782 2409384
Total ptofit (a-b) 76718 920616

11. FINANCIALANALYSIS
Short run analysis :
Net profit = Gross returns – Total costs
= 3330000 – 2409384
= Rs.920616/-
Benefit-Cost Ratio = Gross returns / Total costs
= 3330000 / 2409384
= 1.38

12. Net Profit Ratio = Net Profit / Gross returns * 100
= 920616 / 3330000 * 100
= 27 %
Rate Of Returns = Net profit / Total costs * 100
= 920616 / 2409384 * 100
= 38 %
BEP = Fixed costs * 100/ (Fixed costs + Net profit )
= 444300*100/ (444300 + 920616)
= 32.5 %

13. Long run analysis
Financial projection for 10 years
YEAR Fixed costs (Rs/-)
Variable
costs(Rs/-) Total costs(Rs/-) Returns(Rs/-) net profit
year 1 444300 2409384 2853684 3330000 476316.00
year 2 0 2409384 2409384 3330000 920616.00
year 3 0 2467104 2467104 3496500 1029396.00
year 4 0 2524824 2524824 3663000 1138176.00
year 5 0 2582544 2582544 3829500 1246956.00
year 6 0 2640264 2640264 3996000 1355736.00
year 7 0 2697984 2697984 4162500 1464516.00
year 8 0 2736384 2736384 4162500 1426116.00
year 9 0 2774784 2774784 4162500 1387716.00
year 10 0 2813184 2813184 4162500 1349316.00

14. Long run analysis :
S.No parameter value
A) Undiscounting techniques
1. Avetage rate of Returns (ARR) 44.50 %
2. Pay Back Period (PBP) 1.178 years
B) Discounting techniques
1. Net present Worth (NPW) Rs.6169594/-
2. Benefit Cost Ratio (BCR) 1.366
3. Internal Rate of Returns (IRR) 13.84%
4. Profitabilty Index (PI) 9.63

15. S W
O T
WEAKNESSES
Lack of consolidation
of industry.
Lack of awareness to
farmers about the
benefits of neem oil
THREATS
Fear of aflotoxin
contamination
Intense
competetion from
rival brands
STRENGTHS
Availabilty of good
raw materials
Availabilty o skilled
labour
Availabilty of good
infrastructure
OPPORTUNITIES
Market expansion
globally for neem oil
Trend shifting
towards organic
agriculture
SWOT

16. Presented by
Ch.Eshwar prasad
Chairman & Managing Director
Esh-Mart enterprises
References :
J-Gate (consortium for e-resources in
agriculture)
ANGRAU manual on Agribusiness
management
Springer.com
Agriculture economics by Subbareddy,
Raghuram, Neelakantasasrhry, Bhavani devi

17. THANK YOU