This the business report of food park at Patna

1. Detailed Project Report
Submitted by Prakash Kumar
17MBA013
Dept. of Management
Sikkim University
For
Setting up a Food Park at Patna, Bihar

2. Table of Content
CHAPTER PARTICULARS PAGE NO.
NO.
Project at a Glance
1
Executive Summary
4 - 5
2
Company Profile
5
3
Project Details
8 - 15
3.1 Project Overview
3.2 Services & revenue Portfolio
4.3 Project Background & Objectives
3.4 Key Objectives of HSFPPL include
3.5 Need for a Mega Food Park in Bihar
3.6 Basic Enabling Infrastructure
3.7 Site Analysis
3.8 FDI in Food Processing Sector
3.9 Tax Benefit
3.10 The Indian Food Processing Industry - Status and
Significance
4
Statutory Clearance Status & Marketing Arrangement
16
5
Macro-Economic Performance
16 - 19
5.1 Growth Drivers.

3. 5.2 Economic Overview
5.3 Infrastructure Overview
6
Project financial analysis
19 – 22
• Business plan
• Estimated Project Cost
• Means of Finance
• Term Loan Repayment Schedule
• Employee Cost
• Cost of Maintenance
• Cost of Insurance
• Admin Overheads
7
Financial Assumptions
22 – 23
8
Revenue Assumptions
23 – 25
• Demand Assessment and Marketing Strategy
• Project Impact
9
SWOT ANALYSIS
26
10
RISK ANALYSIS
27 – 28

4. Executive Summary
Name of the Company Hinduja & Sons FOOD PARK PRIVATE LIMITED (HSFPPL)
Date of Incorporation 2018.
Constitution Private Limited
Name of the Project Greenfield Project
Type of Industry Infra Sector
Sector Service (Food Park)
Nature of activity
Building a food park infrastructure for the agro
processing industry
Registered Office
Space No. 801, 4th Floor , Punpun Square, Dumari
Halt, Patna, Bihar.
Board of Directors
1. Mr. Prakash Kumar Hinduja
Key Personnel Mr. Prakash Kumar Hinduja
We have proposed to set up a food
processing park in an area of 22.85 acres consisting of
Processing cum warehouse units, Silos which will be given
on Lease/rent to the food processors. Out of these
Brief particulars of the
12acres of land will be sold to food processors and
revenue will be collected from them for maintenance
Project
charges and the company will also provide ancillary
Services to them. The project will be equipped with
modern facilities and technologies like waste

5. Estimated Project Cost Rs. 2000 Lacs
Proposed Term Loan Rs. 1450 Lacs
Promoter’s Contribution. Rs. 550 Lacs
Power & Fuel Power & fuel will be sourced from Bihar State
Electricity Board
Manpower Manpower will be available locally
Techno-Economic The project is considered technically feasible and
Viability economically viable.
COMPANY PROFILE
Hinduja & Sons Food Park Pvt. Ltd. (HSFPPL), is a Private Limited Company
incorporated on 2018 having its registered office at Space No. 801, Dumari Halt
Punpun, Patna, Bihar Mr. Prakash Kumar Hinduja are the directors of the
company.
The Scheme of Food Park aims at providing a mechanism to link agricultural
production to the market by bringing together farmers, processors and retailers
so as to ensure maximizing value addition, minimizing wastage, increasing
farmers’ income and creating employment opportunities particularly in rural
sector. The Food Park Scheme is based on “Cluster” approach and envisages a
well-defined agree/ horticultural-processing zone containing other facilities with
support infrastructure.
The company proposes to set up a food park which will have various support
infrastructures needed for setting up Processing centers which will be
leased/rented to food processors and play role of service provider for its core
and other ancillary services. In addition to this the company also proposes to
sale 8 acres to land to other prospective units for which company will collect
maintenance charge for providing infrastructure and supporting services. In
addition, it also intends to facilitate development of other food park in future at
eastern region of India. The proposed Food Park is, thus, envisaged to play larger
role in the development of food processing sector in eastern India.
The food processing industry constitutes three kinds of processors:
• Primary Processors: Primary industries process raw foods (example Paddy into Rice)
• Secondary processors: Use primary products to manufacture other foods
(example Rice Bran into Solvent)

6. • Tertiary Processors: Prepare convenience foods such as frozen dinners and
canned food, animal feed
More so, the Group has a strategic focus for spreading its operations in Bihar in view of
an ambient and favorable economic scenario in State, an emerging consumption
market and increased focus of the State Govt. towards food processing sector. The
Group intends to leverage the Schemes and various fiscal incentives being provided by
State Govt. for new initiatives in food processing sector.

7. PROJECT DETAILS
3.1 PROJECT OVERVIEW
Company will provide all amenities & Facilities related to food processing to the
processing units for which company will charge rent & maintenance charge. The
total cost of Land & land development along with civil.
Proposed land area is sufficient for proposed project with modern sewerage
facility, ETP, Boiler Room, Civil structure and other amenities. The estimated cost
of plant and machineries, utilities and civil structure has been taken on the
conservative basis which is reasonable.
The company has identified the food processing units. Further the promoters
have very good link with other business player of food industry and experience in
proposed project hence the company will easily get the service receivers from
the initial stage of the project.
The revenue model of company which consist mainly rent and maintenance
charges to users is reasonable according to mass practice.
The manpower required for the proposed food park will be 16 no. Including
Manager, Accountant, Supervisor and other support staff.
3.2 SERVICE & REVENUE PORTFOLIO
Company proposes to set up warehousing cum storage facility which will be
given on rent to the users. This will be one of the primary sources of revenue
generation for the company.
Maintenance charges received from the user of warehouse and food processors
is one of the core revenue generate source of company.

8. Company will also generate revenue from their noncore facilities like canteen
charge, guest house charges and other facility charge.
The company has already got the offer from food processors to set up their plant
and the company has agreed to set up one rice mill.
Along with the existing client, promoters of the company are also in contact with
other food processors who are interested to set up their processing centre by
taking lease on the proposed unit.
SALES 35 SERVICE
INDUSTRY ACRES SQ FT LAC/ACRE 10/SQFT/MONTH SERVICE YEARLY
FOOD
PARK 3.49 1,51,807
RICE MILL 2.73 1,19,006 95,62,000 12,55,513 1,50,66,160
SOLVENT 2.5 1,08,813 87,43,000 11,47,977 1,37,75,726
FISH FEED 1.25 54,406 43,71,500 5,73,983 68,87,800
CASHEW 0.66 28,575 22,96,000 3,01,466 36,17,595
ALMONDS 0.51 22,303 17,92,000 2,35,297 28,23,560
11.13 4,84,910 2,67,64,500 35,14,237 4,21,70,840
3.3 Project Background & Objectives
Hinduja & Sons Food Park Private Limited is incorporated to leverage their experience
and knowledge to expand its horizon and play a larger role in infrastructure
development in food processing sector.
Scope of the food processing industry in India is still at a nascent stage. As far as
common infrastructure facility and support to the food processing sector is concerned,
the country has a long way to go. HSFPPL may be considered one amongst a few food
park in Eastern India, with proven ability and knowledge to develop and operate
common infrastructure under the concept of a Mega Food Park Project. The Promoter
has also vast experience in international trade & manufacturing of these products also.
HSFPPL has taken strategic interest in Food Park Project in Bihar since the eastern part of
the country has immense potential in terms of crops and varieties specially. In addition,
it is also keen to expand and diversify its business in the related industries.

9. The promoters have rich experience in food processing and have good relations with
the producers of food products which would be suitably leveraged by the project post
implementation and during commercial operations.
The presence of these two lead promoters would lead to following benefits:
1. They are able to leverage each other’s respective strengths, create, manage
and mentor such businesses with the resources available.
2. In addition to Govt’s grant, the lead promoters of HDFPPL would bring in the
requisite equity contribution to ensure timely completion of the project
3. All key stakeholders with their prominence in their respective fields are aware
that the concept of Food Park has the potential of changing the food
processing scenario in the Eastern zone.
4. The projected profitability of the Project is also good and therefore the promoters
are likely to yield good dividends / returns in subsequent years of operations.
5. The Food Parks Scheme is the flagship program of the Ministry of Food
Processing Industries. The MFPS envisages a cluster-based approach for
proposed Food Park.
The main objective of the Company is to provide modern infra facilities and other
related ancillary services to the food processors and charge rent & maintenance
expenses which can be considered as a minimal risk business module.
The promoters of HSFPPL bring together vast experience of food processing,
organized retailing and infrastructure development. The promoters have belief
that setting up such infrastructure facility, under the mega food parks Scheme,
would be economically viable and would provide a unique opportunity to
various stakeholders across the food value chain to inclusively create value.
Hence AFPPL is formed to provide a total infrastructure solution for food
processors.

10. 3.4 Key Objectives of HSFPPL include
• To create integrated modern infrastructure leading to an ideal eco system to
facilitate diverse food processing operations and encourage entrepreneurship in
food processing in the region.
• To create state of the art enabling infrastructure in the spirit of an industrial park
model.
• To create significant direct employment opportunities in the zone of influence of
the project.
The project will contribute towards the food processing industry in the region through:
• Ensuring low operating cost for the units present in the park through clustering
and sharing of infrastructure thus enhancing economies of scale
• Reducing post-harvest losses for the farmers in the region through creation of
infrastructure.
• Facilitating ease of linkage between farmers and operators through farm
proximate infrastructure
With all these aspects, the project is expected to transform the rural landscape of a
large part of Bihar and play a vital role in changing agriculture sector in the state.
3.5 Need for a Food Park at Patna in Bihar.
Bihar is a major producer of many Cereals like Paddy, fruits and vegetables. It occupies
one of the highest positions in vegetable production and fruits production in the
country. Despite leadership in fruit and vegetable production, the state lags behind in
industrial development in the areas of food processing and related industries. Lack of
adequate storage facilities in the State have led to high wastages of agro horticultural
produce.
In an effort to address the issues at hand, the State Govt. has also initiated several
measures to promote agricultural growth, most important of which is formulation of
separate policies and Schemes to promote investments in food processing sector and
related infra sector. Such efforts have started yielding positive results. All these efforts
have set up the tone for agriculture led development in the State and the project
would play a vital role in changing the agricultural and food processing landscape in
the region at large and the State as a whole.

11. 3.6Basic Enabling Infrastructure
Following are the components of basic enabling infrastructure proposed in the park:
• Bituminous roads/Pavers and foot paths.
• Site development, compound wall and gate complex.
• Common parking facility.
• Water treatment plant and supply system.
• Storm water drains and sewerage collection network.
• Effluent & Sewerage treatment plant.
• Recycle water system.
• Electrical substation and Internal Electrical distribution system.
• Internal Communication network.
• Street lighting.
• Firefighting system and security.
• Security system
• Steam and air generation
• Silos
• Warehouse
3.7 Site Analysis
A. Master Plan for the Park (Planning Concept)
i. The total site area is 22.85 acres, within which the park is to be set up
ii. The concept of the proposed Food Park is derived based on the requirements of
the entrepreneurs, functionality with self-contained facilities. The Food Park shall
be environment friendly facility comprising of physical and common
infrastructure components interwoven with green spaces. The master plan has
been conceptualized considering the opportunities and constraints of the site.
iii. The concept is guided by the applicable development guidelines of the
Local Municipal Policy. The design philosophy revolves around prioritizing
various aspects viz., circulation, land suitability, environmental sustainability
and topography to optimize various land uses.

12. iv. The master plan is based on modern planning concepts of providing good
and efficient internal movement with supporting infrastructure and facilities in
an aesthetic environment. The concept is to maintain a favorable orientation
which shall provide good functionality to all the components of the Food
Park. Provisions of prudent engineering practice have been followed in
preparing the Master Plan.
B. Site Development, Boundary Wall and Gate House
(i) Development of ground including site grading is a prerequisite for starting
of any construction activity at site. Site preparation shall consist of cutting,
removing and disposing of all materials such as bushes, shrubs, stumps,
roots, grass, weeds, top organic soil, rubbish etc., from the area of works
so that the sub base on which the infrastructure is developed is well
prepared for site grading works. The task shall include necessary
excavation, handling, salvaging, and disposal of cleared materials etc.
Site grading will include cutting, filling and compacting. The filled-up earth
so as to integrate the micro drainage pattern of the site to the proposed
storm water drainage system.
(ii) It is proposed to demarcate the entire site of the Park by providing an
aesthetically designed and structurally safe boundary wall. The site shall be
accessible by a Gate House structure with entry/exits and a security office.
(iii) Estimated Cost for the purpose of estimating the block costs, CPWD norms
for quantities and prevalent market rates have been assumed.
C. Water Supply System & Fire Fighting
The water requirement is calculated based on the requirement for the processing
and domestic usage. The source of water in mainly from the proposed bore wells
located within the park premises.
D. Effluent and Sewage Conveyance & Treatment System
An underground sewerage network has been designed to collect sewage from
each plot and convey it to a sewage treatment plant. At the STP, the sewage
would be treated to acceptable standards and the treated sewage could be
used for sparing purpose within the park. Layout of the proposed sewerage
network is presented in the DPR. Bleaching powder doses will be used for
chlorination before disposal of the treated sewage. It is proposed that treated
sewage will be used to the extent possible for landscaping and flushing of toilets.

13. E. Estimated Cost of power supply
Based on the power demand calculations, the cost estimates for electrical
transmission and distribution network and street lighting is calculated.
F. Telecommunication Infrastructure
Success of modern day business depends upon communication infrastructure.
Internet connectivity through broadband connection, close circuit video network
are some of the likely requirements of the proposed park.
National Mission on Food Processing (NMFP):
This was launched in 12th Five Year Plan. Approved by the cabinet committee in August
2012, NMFP is expected to be implemented along with State Government cooperation.
One of the main objectives of NMFP is the decentralization in the implementation of
schemes in the sector, leading to greater involvement of State Government / Union
territories. The main aim of this scheme to provide the adequate facilities to food
processors and infra developers by which these sectors can growth as per government
plan.
3.8. FDI in Food Processing Sector:
Government has permitted up to 100% FDI under automatic route in all processed food
segment except for items reserved for Micro and Small Enterprises (MSEs). FDI in food
processing sector increased at a CAGR of 60% over the period FY 2009-13. However, FY
2014 reported significant increase in FDI amounting to INR 251 Bn on account of huge
investments announced by MNCs such PepsiCo India Holdings Pvt. Ltd, Cadbury India
and Nestle India Ltd which are engaged in food processing sector. INR 31.65 Bn was
invested in the sector as FDI during FY 2015.
Due to above government initiatives there is huge demand of food processing centre,
since Jharkhand is the state which has significant share in total food production in India.
There is huge investment has already came therefore the proposed project has no
need to wait for the service receiver, so there is huge chances to make good
percentage of profit.

14. The Indian Food Processing Industry Size (US$ Bn)
450 400
400 CAGR 10%
350
300
250 200
200
150
68 75
82 90
100 62
50
0
2005 2006 2007 2008 2009 2015 2020 (P)
3.9 Tax Benefit:
Various incentives are provided to FPI under income tax and service tax. Under Section
35-AD of the Income tax Act1961, deduction of 150% of investment is allowed for setting
up and operating warehousing facility for storage of agricultural produce.
3.10The Indian Food Processing Industry - Status and Significance
Despite having several advantages, the level of food processing across various
segments is very low in India which means that India accounts for only 1.5% of the
global processed food trade. High growth in consumption of processed food products
has increased the demand for all ancillary products and services associated with the
sector. Consequently, demand for preservatives, food chemicals, flavor enhancers,
food packaging materials, and logistics services have gone up. This has also benefitted
the Food park industry by providing the infra facilities to these types of manufacturer.

15. Indian Food Processing: Share of
Segments
Beverages,
Fruits and12%
Vegetable,Meat, Poultry
4%& Marine,
14%
Grain &Dairy, 16%
Cereals, 54%
4. STATUTORY CLERANCES & MARKETING ARRANGEMENTS
Details of important approval and clearances for the proposed project are given below:
S.No. Statutory document/authority Status
1 Pollution Clearance Certificate Applied
2 GST registration -----------------
3 Electricity Connection Applied
4 Factory License Applied
5 Weight & Measurement Applied
6 Boiler Installation Applied

16. 5. Macro-Economic Performance
The Indian economy continued to demonstrate resilience in FY 2015. Formation of
stable government and initiation of several reforms circulated strong signals to global
and domestic investors regarding the government’s effort to place the domestic
economy back on the growth trajectory. These included structural reform measures
such as overhauling of archaic laws, passage of long awaited major bills, relaxation in
FDI rules, targeted and cashless transfer of subsidies and revival of large stalled projects
which helped in boosting investor’s confidence. During FY 2015, major economic
indicators such as GDP growth, Index of Industrial Production, exchange rate, inflation,
current account, FII, and FDI inflows indicated an improvement.
5.1 Growth Drivers.
The key factors aiding in the fast growth of the industry are: large share in the world’s
agricultural output, diverse agro-climatic regions & soil types, changing demographic
patterns, living conditions & food habits, increasing incomes & food consumption and
various government initiatives.
India has 52% cultivable land compared to a world average of 11%. It has all 15 major
climate types that exist in the world and 46 of the total 60 soil types exist in the country.
It also has 20 agro-climatic regions. All these factors make India a prime sourcing
destination for various segments in the food processing and infra industry.
India, with a population of 1.31 billion people, is the second largest country in the world
in terms of population which in turn translates into one of the largest consumer markets
in the world. Also, more than 60% of the Indian population is below the age of 30 years
making it a young country with a large earning segment in the total population.
Food Processing
Demand Drivers
Increasing Disposal
incomes spending on food
products
Increasing Urbanization
& changing lifestyles-
more nuclear families,
working women etc
Changing demographics-
more young population
Growth of organized retail
and Private Label
Penetration.
Advantage India in terms
and Production of
various commodities
human resources etc.
Demand for functional
foods/Nutraceuticals

17. Apart from the above favorable factors, there are a host of other factors like changing
lifestyles, more nuclear families and increased health consciousness which are
increasing the demand for processed foods.
Government Initiatives
Keeping in mind the importance this industry holds in terms of reducing wastage and
making appropriate use of the huge supply of natural resources. The central theme of
the 12th Plan has been the decentralization of MoFPI’s initiatives with an aim at making
food processing industry a truly national initiative and ensuring maximum participation
from State Governments. To conclude, it has been observed that the Govt. and its
efforts have been proactive so as to ensure faster growth of the sector.
Demand Assessment and Marketing Strategy
India’s economic growth has accelerated in the last two decades. This has led to a
surge in the spending power of the consumers. Based on the rise in income levels, the
shape of the country’s income pyramid is changing dramatically on account of
fattening of a burgeoning middle income class. It is estimated that India’s middle class
will swell by over ten times from its current size of 50 million to 583 million by 2025. With
positive changes in incomes levels, the expenditure pattern is also witnessing paradigm
shift. Food and beverages today alone contributes about 40-45 percent of monthly
private consumption expenditure (Source: NSSO). With the rising convenience needs of
dual income families, the demand for processed food products is also growing.
Indian food-processing sector is also undergoing rapid transformation. As a country
moves on the path of development, agricultural sector evolves from traditional
subsistence level farming to commercial agriculture producing high value and
processed products. Strong macroeconomic fundamentals (sustained economic
growth rate of 8 %) and the changing socio-economic scene are driving what was
once a traditional, small-scale processed food production system into a modern
industry aimed at catering to the evolving tastes and needs of discerning consumers.
The robust growth in economy and favorable changes in demographics has spurred
the evolution of retail. The growth of retail which so far is largely limited to metro and tier
I cities is now gradually entering in tier II cities.

18. 5.2Economic Overview
The state is largely agrarian and rural with almost 80 percent of the total population
depending on and engaged in agricultural activities. Agriculture still remains the backbone
of the state economy even as industry sector (Especially food processing) and services
sector have made good progress in recent years. Recently, Bihar state GDP has recorded a
very high growth (in the excess of 10%), making Bihar the fastest growing major state of
India. Key economic indicators for the state are given below.
State Overview
Bihar is located in the eastern part of India. Bihar in the north and Orissa in the south.
The state of Bihar has an area of 94,163 sq. km. and a population of 103,804,637 (Census
2011). There are 38 districts, 534 blocks and 45,103 villages. The State has population
density of 2,850 per sq. km. The population of the state continues to grow at a much
faster rate than the national rate.
6.3 Infrastructure Overview
All major cities and towns are well connected in the state through road, railways and
airports. Bihar is well connected by air with the major metro cities of India and some
other major capitals of the world. It has two domestic airports at Patna and at Gaya
airport.

19. 6. Project Financial Analysis
Business plan
The business plan of HSFPPL has been prepared taking into account the proposed
business model in line with the Food Parks Scheme:
• Company would provide developed land plots and SDF sheds to various units in
the park on Rent/Lease.
• The project will provide Processing unit facility to Food Processors and various
players such as grain traders. The project will generate revenue by charging
rental and service/maintenance charge from the users.
• Company would also be supplying power and treated water to units and would
also recover the cost of effluent treatment from the units.
• Non-core facilities would also be givens on rental basis to various users by the
Company.
• The entire project cost will be as mentioned in table.
Estimated Project Cost
S.NO PARTICULARS AMOUNT AMOHNT
PLANT & MACHINERY 3,33,80,000
1 Weight Bridge & Foundation 24,50,000
2 Air Compressor 75 HP WITH PIPELINE 16,30,000
3 R.O water softener 9,00,000
4 Boiler 2,10,00,000
5 ETP & ETP room 34,00,000
6 Deep Bore well, Casing 40,00,000
WAREHOUSE 10,35,00,000
7 Silos 10,54,394 USD CIF KOL 7,15,00,000
8 Primary Processing Centre, Warehouse 3,20,00,000
ELECTRICAL MACHINERIES 3,01,00,000

20. Safety & Security 17,00,0009
10 DG 34,00,000
11 Transformer With Servo & Room 30,00,000
12 Substation & Electricity control room 2,20,00,000
CIVIL 3,20,35,000
13 Sewerage System 25,35,000
14 Supply network 20,00,000
15 Water Tank 30,00,000
16 Chimney 25,00,000
17 Rain Harvesting 15,00,000
18 Pavers, PCC 50,00,000
19 Approach Road 25,00,000
20 Land Development 25,00,000
21 Boundary Works 25,00,000
22 Administrative Building 20,00,000
23 Labour Qtr Building 20,00,000
24 Kitchen & Store & Mess 15,00,000
25 Rest Room, Bath 5,00,000
26 Staff Residence Building 10,00,000
27 Admin Residence 10,00,000
OTHERS 30,00,000
28 Office Computer + equipment’s 10,00,000
29 Tractors + Trolley 10,00,000
30 Commercial Vehicle 10,00,000
TOTAL 20,00,15,000
Means of Finance
The project is proposed to be financed through equity and term loan from Bank. The
promoters would contribute about 35% of the cost of project.

21. Means of Finance
Sl. No Particulars
Total MOF (in % to Total
Lacs) MOF
1 Term Loan 1450.00 72.5%
2 Promoters Contribution 550.00 27.5%
3 Total 2000.00 100%
4 Debt Equity 2.64:1
Term Loan Repayment Schedule
The entire term loan of Rs. 1450.00 Lacs is proposed to be repaid in 32 quarterly
instalments commencing from Quarter Dec 2019 and concluding on Quarter Sept 2027.
The implementation for the project will be 18 months including moratorium period to
streamline the augmentation of cash flows.
Loan Repayment Schedule - Annexed
Employee Cost
The employee cost has been assessed on the basis of organizational structure proposed
by company, which takes into account the managerial and the support staff required
for operating the warehouses and other ancillary services.
Admin Overheads
It includes cost towards travelling, business development, and stationary and to meet
day to day administrative expenses.
7. Financial Assumptions
Taxes
The income tax has been taken @ 33.06% as per the prevailing rate of income tax for
corporate/industry players. The Minimum Alternate Tax (MAT) rate is taken as 18.5% as
per the prevailing rate plus Surcharge.
Depreciation Rates
Depreciation has been calculated using WDV method. The rate of depreciation for plant
& machinery, Misc. fixed assets, buildings and enabling infrastructure has been charged
as per schedule-III of companies Act 2013.

22. Interest
Interest has been calculated @ 11.50% per annum for term Loan. The repayment period
has been kept at 32quarterly installments excluding the moratorium period till March-
19(12 months from COD).
8. Revenue Assumptions
Core Processing Infrastructure:
2.1 Revenue from Leasing of processing unit:
The developed land and processing centre would be offered to units in the CPC on
long term lease rentals and maintenance charges.
SALES 35 SERVICE
INDUSTRY ACRES SQ FT LAC/ACRE 10/SQFT/MONTH SERVICE YEARLY
FOOD
PARK 3.49 1,51,807
RICE MILL 2.73 1,19,006 95,62,000 12,55,513 1,50,66,160
SOLVENT 2.5 1,08,813 87,43,000 11,47,977 1,37,75,726
FISH FEED 1.25 54,406 43,71,500 5,73,983 68,87,800
CASHEW 0.66 28,575 22,96,000 3,01,466 36,17,595
ALMONDS 0.51 22,303 17,92,000 2,35,297 28,23,560
11.13 4,84,910 2,67,64,500 35,14,237 4,21,70,840
Effluent treatment charge.
The Food Park would be providing Common Effluent Treatment Plant (CETP) for
treatment of effluent discharged by units and core processing facilities. The treatment
charges would be recovered along with maintenance charge. The company would
recover the treatment charges as per pre-decided agreement with the units.
Infrastructure management/maintenance Fee
The company would be managing (management, maintenance, security, insurance
etc.) the entire common infrastructure provided in the park. For these services the
company would collect an infrastructure management fee from the units based on the
area allotted to individual unit. The management fee would be a percentage of value
of total common infrastructure managed by company.

23. Key Factors Driving Demand for Processed Food
Clearly, the food processing industry is on the threshold of a demand led vertical
growth in the Country. This may be primarily attributed to the strong macro-economic
fundamentals and the changing socio-economic and demographic scenario not just
of the country but also that of Jharkhand. Some of the key demand drivers for
processed food include:
Project Impact
The development impacts are generally evaluated in terms of changes in community
demographics, employment and income, public services, and aesthetic qualities of the
community. Qualitative assessment of community perceptions about development is
an equally important measure of development impacts. Assessing proposed
developments in a socio-economic context will help community leaders, residents and
policy makers to identify potential social equity issues, evaluate the adequacy of social
services and determine how the project will affect overall social well-being.
It is envisaged that the proposed mega food park project will generate tremendous
socio-economic benefits to the people of the region and number of skilled and
unskilled local workers will be employed. This will generate direct and indirect
employment to persons and facilitate development of social support facilities such as
medical, educational and transportation facilities.
Projected Social and Economic Impact of the Project
The proposed mega food park at Patna in Bihar will have a number of impacts on
existing social and economic status of the region as a whole. Setting up of Food Park
will have following positive effects in the cluster and the region and the State at large:
a) Impact on Agriculture and Horticulture: There will be direct impact of food park
on the Agriculture & Horticulture sector of cluster areas where the growers would
fetch better prices for their produce thus eventually get bigger pie of the
consumer rupee. This is expected to result in increased price realization of for the
producers of this region.
b) Reduction in Wastage: Food park will play a crucial role in enhancing the level of
processing in the region by making available better technology, skilled
manpower, streamlining the supply chain and strong forward linkages. It is

24. estimated that reduction in wastage across value chain will result in significant
increase in value realization to the producers in the zone of influence.
c) Alternate market channel for the farmers: The food park will handle considerable
volumes of fruits & vegetables and grains sourced from the catchment area. This
will eventually become an alternate marketing channel for the farmers for selling
their produce. This processing facility would also stabilize the prices of perishable
commodities in this region as a whole.
d) Better Infrastructure & Living Condition: The setting of this project would ensure new
transportation facilities, water supply facilities and medical facilities being setup in
these regions. Need to bring in the raw construction material will ensure better roads
right from the beginning. Thus the project is expected to improve the infrastructural
facilities and socio economic condition of the people in the region.
e) Contract and Supply Opportunities for Local Population: Local entrepreneurs will be
provided with an opportunity to take up various contracts in the development
of the park. Also the labour force that will be needed in the beginning of the
project can be derived from the local population. Moreover, the farmers in the
surrounding area will also act as supplier of Raw material to the food processors
in Food Park for processing.
f) Entrepreneurial activities: Establishment of Food Park will result in development
of various ancillary businesses apart from the core business. This will promote
entry of new entrepreneurs in the whole business gamut.

25. SWOT ANALYSIS
STRENGTHS WEAKNESSES
The Food Park is proposed to be located in Value addition to the raw produce in the
Patna, Bihar which is endowed with Patna region is very low.
adequate infrastructural facilities in terms of
Lack of a common policy on contract
connectivity, availability of raw material,
Farming.
power, water, etc.
Patna has diverse agro-climatic conditions; Lack of farming technique which could
make the negative impact onit has a wide-ranging and large raw material
base suitable for food processing industries. production
Patna comparatively cheaper workforce
can be effectively utilized to setup large
number of low cost production bases for
domestic and export markets.
Cheaper cost of raw materials provides
synergies to the food processors.
OPPORTUNITY THREAT
The growth potential of this sector is The major threat in the food-processing
enormous and it is expected that food sector is lack of awareness of the
production will double in the next ten years importance of indigenous products due
and consumption of value added products to lack of knowledge.
will grow at fast pace.
Small and marginal entrepreneurs are
Economic liberalization and rising consumer facing threat from big multinational
prosperity is opening up new opportunities brands.
for diversification in food processing sector.
State Government & central government
Economic recession or decline in GDP
growth could impact the sector along
have initiated various new projects to boost
with other sectors.
this sector.

26. RISK ANALYSIS AND MITIGATION MEASURES
Key Risks Risk carrier Proposed Mitigation of Risk
Experience & HSFPPL The promoter directors although do not have much
Capability experience in service industry, they hail from
experienced business group and have the acumen for
running business successfully.
Time Over Run HSFPPL The planned implementation period of 13 months from
Risk the financial closure is adequate for the
implementation of the project as per the
Implementation schedule.
Hence, the risk of time overrun is low.
Infrastructure Risk HSFPPL The land for the project is in the process of acquiring in
the company’s name.
Power requirement will be met from the state
electricity Board
The water requirement for the project is large. The
Company will be meeting its water requirement by
drawing ground water. It will be advisable for the
company to make arrangements for uninterrupted
supply of water by linking up with a perennial source
like river.
Skilled and unskilled labours will be available locally.
The infrastructure risk is therefore reckoned as Medium.
Cost Over Run HSFPPL The project cost has been arrived at after obtaining
Risk quotations for different items of machinery and also
considering the reputation of the machinery suppliers.
Adequate contingency has also been considered to
cover any risk of cost escalation.
Thus, cost overrun risk over and above the
contingency provided is low.
However, in case of any cost overrun the promoters
shall infuse the requisite funds.
Statutory HSFPPL Necessary approvals required for commencement of
Approvals
operation for the proposed project are expected to
be received in time; any delay in approvals will result
in time overrun.

27. Hence the risk in respect of statutory approvals is
Medium
Government HSFPPL The project comes under the Infra sector in food
policies processing industry which are actively encouraged by
the Central and State Government through a host of
incentives, concessions etc.
Hence the risk under this category is minimal.
Off- take/Demand HSFPPL The Company’s proposed plan to provide services has
Risk huge requirement in this region. As such there is good
market potential for the products.
Hence the risk under this category is minimal.
Funding Risk HSFPPL The Greenfield project is to be funded by term loan
and promoters contribution. All the funds required for
the project need to be tied up.
Lenders may validate the capability of the promoters
to bring in the requisite funds for the project.
Pricing level and HSFPPL Though the prices of the service provided by the
sustainability of company is taken on conservative basis. The company
margin proposes to set up food park and collect the revenue
from food processors as rental charges and
maintenance charges.
Hence, the risk of price level and sustainability of
margin is medium.
Competition Risk HSFPPL The company would be facing competition from some
small and medium scale players in the market. Thus,
the Company needs to ensure that they are able to
offer all ancillary facility to the processors under one
roof at attractive terms and enter into long term
contracts with them without undermining the margins
of the Company.
Hence, the competition risk is medium.
Force Majeure HSFPPL The lenders may insist upon the company to take
adequate insurance cover for insurable Force Majeure
risks.