Pan Masala Sada, Meetha & Zarda - Market Survey cum Detailed Techno Economic Feasibility Project Report

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Pan Masala Sada, Meetha &
Zarda -
Market Survey cum Detailed
Techno Economic Feasibility
Project Report

Introduction
Pan Masala is a balanced mixture of betel leaf
with lime, areca nut, clove, cardamom, mint,
tobacco, essence and other ingredients. It is an
agricultural product with herbal properties, also
availablein hygienic packandpouches.

It acts as a mouth freshener and unlike
other Western synthetic pan masala made
with chemical and petroleum ingredients,
the Indian pan masala is safe. But excessive
usemayhaveadverseeffect.

The ingredients in pan masala vary widely,
depending on personal taste and region.
One version of pan masala, guthka, includes
tobacco, which may be flavored or treated
with variousadditives.

As a result, sales are restricted or banned in
some regions, and there is some confusion
about pan masala, with some people
dismissing all mixtures as unhealthy, while
others distinguish between those with
tobaccoandwithout it.

Available in brands in India like 'Raj Darbar', 'Pan
Bahar', 'Goga', 'Rajnigandha', 'Tulsi', the pan masala is
consumed by all age groups and social classes. The
active chemical compounds of betel nut are alkaloids
called arecaine and arecoline, arecaidine, arecolidine,
guracine(guacine),guvacoline,etc.

which is comparable to nicotine due to their stimulating
and mildly intoxicating characteristics. The culture of pan
eating rose to the zenith in North India as a mark of cultural
custom and sophistication, especially in Lucknow and the
North-east. In most of the Hindu religious traditions, the
raw areca nut along with the betel leaf is offered to the
deity as anoffering.

Uses and Applications
Pan Masala is widely used for removing bad odour to impart a
pleasant feeling, used for scenting the breath in order to
impart a pleasant feeling, for serving the guests and friends
and in the parties and functions. It is also used as substances
for tobacco chewing and smoking. It can be used in the Hotel
and restaurants as well.

Market Survey
Pan is consumed by an estimated 200-400 million
people, mainly Indo-Asians and Chinese. India is the
largest consumer of betel nut, or what we call the pan
in the world. It’s not without reason that India tops the
list of smokeless tobacco users in the world with nearly
83 per cent consumers.

With its ban in most of the cities still the fact remains that
the gutkha and pan masala industry in India is huge
pegged at anywhere between Rs 15,000 to Rs 20,000
crore. There is also a tax impact as a result of the ban.
Popular pan masala brand Rajnigandha, produced by
Dharampal Satyapal (DS) Group, has 65 per cent market
share.

Dharampal Satyapal, with sales of Rs 1,600
crore, is headquartered in Noida. Pan Parag
made by Kothari Products has 11 per cent share
in tobacco-scented chewing pan masalas. The
company had revenue of Rs 630 crorer in
FY2010.

It declined to comment if the brand’s non-availability
would impact its market share. The production ban on
most of the big brands has led to a rise in demand for
lesser known brands and such brands are
commanding a premium of over 200 per cent at
present.

PROJECT AT A GLANCE
PROJECT AT A GLANCE (Rs. in lacs)
COST OF PROJECT MEANS OF FINANCE
Particulars Existing Proposed Total Particulars Existing Proposed Total
Land & Site Development Exp. 0.00 130.00 130.00 Capital 0.00 62.63 62.63
Buildings 0.00 27.20 27.20 Share Premium 0.00 0.00 0.00
Plant & Machineries 0.00 39.43 39.43 Other Type Share Capital 0.00 0.00 0.00
Motor Vehicles 0.00 4.00 4.00 Reserves & Surplus 0.00 0.00 0.00
Office Automation Equipments 0.00 11.25 11.25 Cash Subsidy 0.00 0.00 0.00
Technical Knowhow Fees & Exp. 0.00 5.00 5.00 Internal Cash Accruals 0.00 0.00 0.00
Franchise & Other Deposits 0.00 0.00 0.00 Long/Medium Term Borrowings 0.00 187.88 187.88
Preliminary& Pre-operative Exp 0.00 1.00 1.00 Debentures / Bonds 0.00 0.00 0.00
Provision for Contingencies 0.00 4.00 4.00 Unsecured Loans/Deposits 0.00 0.00 0.00
Margin Money - Working Capital 0.00 28.63 28.63
TOTAL 0.00 250.51 250.51 TOTAL 0.00 250.51 250.51

PROJECT AT A GLANCE
Year Annualised Book
Value
Debt Dividend Retained Earnings Payout Probable
Market Price
P/E Ratio Yield Price/ Book
Value
EPS CEPS Per Share Per Share Per Share
No.of Times
Rs Rs Rs Rs Rs % Rs % Rs %
1-2 8.93 10.72 18.93 24.00 0.00 100.00 8.93 0.00 8.93 1.00 0.00
2-3 12.00 13.56 30.93 18.00 0.00 100.00 12.00 0.00 12.00 1.00 0.00
3-4 15.04 16.40 45.97 12.00 0.00 100.00 15.04 0.00 15.04 1.00 0.00
4-5 17.99 19.18 63.96 6.00 0.00 100.00 17.99 0.00 17.99 1.00 0.00
5-6 20.84 21.88 84.80 0.00 0.00 100.00 20.84 0.00 20.84 1.00 0.00

PROJECT AT A GLANCE
Year D. S. C. R. Debt / -
Deposits
Debt
Equity as-
Equity
Total Net
Worth
Return
on Net
Worth
Profitability Ratio Assets
Turnover
Ratio
Current
Ratio
Individual Cumulative Overall GPM PBT PAT Net
Contributi
on
P/V Ratio
(Number of times) (Number of times) % % % % % %
Initial 3.00 3.00
1-2 1.51 1.51 1.27 1.27 2.42 15.30% 9.80% 6.38% 280.07 31.93% 2.18 1.12
2-3 1.88 1.68 0.58 0.58 1.40 16.12% 11.47% 7.35% 277.40 27.11% 2.22 1.35
3-4 2.32 1.88 2.31 0.26 0.26 0.89 16.67% 12.66% 8.05% 315.86 27.01% 2.16 1.61
4-5 2.84 2.09 0.09 0.09 0.60 17.02% 13.51% 8.56% 354.31 26.93% 2.06 1.89
5-6 3.46 2.31 0.00 0.00 0.43 17.23% 14.11% 8.93% 392.77 26.87% 1.94 2.56

PROJECT AT A GLANCE
BEP
BEP - Maximum Utilisation Year 5
Cash BEP (% of Installed Capacity) 43.72%
Total BEP (% of Installed Capacity) 45.38%
IRR, PAYBACK and FACR
Internal Rate of Return .. ( In %age ) 33.54%
Payback Period of the Project is ( In Years ) 2.814 Years
Fixed Assets Coverage Ratio ( No. of times ) 8.170

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Table of Contents
of the
Project Report

1. DISTRICT PROFILE & GEOTECHNICAL SITE
CHARACTERIZATION
1.1. General
1.2. Physical Characteristics
1.3. Climate & Rainfall
1.4. Map
1.5. Transportation and Communications
1.6. Economy and Industry
2. INTRODUCTION
2.1. Active Compounds in Paan Masala
2.2. What is Masala?
2.3. Difference between Gutkha and Pan Masala

3. PROPERTIES
4. USES
5. B.I.S. SPECIFICATIONS
6. MARKET SURVEY
6.1. Central Excise and Customs Duty Structure on Other
Tobacco Products in India
6.2. Excise/Custom Duty Collected from Tobacco
Products in India
6.3. MPCE Class-wise Per 1000 Distribution of
Households

7. EXPORT & IMPORT STATESTICS OF INDIA
7.1. Export Statistics Data Pan Masala
8. MANUFACTURING PROCESS OF SADA PAN MASALA
8.1. Basic Raw Material Required
8.2. Formulation
8.3. Process Details
8.4. Making of Lime and Katha Solution
9. PROCESS FLOW DIGRAM OF SADA PAN MASALA

10. MANUFACTURING PROCESS OF MEETHA PAN
MASALA
10.1. Formulation
10.2. Process Details
10.3. Making of Lime and Katha Solution
11. PROCESS FLOW DIAGRAM OF MEETHA PAN
MASALA
12. MANUFACTURING PROCESS OF ZARDA
12.1. Basic Raw Materials Required
12.2. Formulation
12.3. Process

13. PROCESS FLOW DIAGRAM OF ZARDA
14. SUPPLIERS OF PLANT & MACHINERY
14.1. Blade Type Cutter
14.2. Impact Pulverizer
14.3. Mixer
14.4. Tray Dryer
14.5. Kneading Machine
14.6. Shifter
15. SUPPLIERS OF RAW MATERIAL
15.1. Betel Nut
15.2. Katha( Acacia Catechu)

15.3. Lime
15.4. Pepper Mint
15.5. Rose Petals
15.6. Sugar Powder
15.7. Tobacco Leaves
15.8. Cardamom
15.9. Cinnamon
16. PRODUCT, PLANT MACHINERY & RAW
MATERIAL PHOTGRAPHS
16.1. Impact Pulverizer
16.2. Supari Blade Type Cutter

16.3. Shifter Dry
16.4. Betel Nuts
16.5. Katha (Acacia Catechu)
16.6. Lime
16.7. Pepper Mint
16.8. Rose Petal
16.9. Sugar Powder Tobacco Leaves
16.10. Cardamom
16.11. Cinnamon
17. PLANT LAYOUT
18. QUOTATION OF PLANT, MACHINERY AND
EQUIPMENTS FROM SUPPLIER

Project Financials
• Project at a Glance Annexure
• Assumptions for Profitability workings ………………………..1
• Plant Economics…………………………………………………..2
• Production Schedule………………………………………………3
• Land & Building……………………………………………….……4
Factory Land & Building
Site Development Expenses

• Plant & Machinery……………………………………………..……..5
Indigenous Machineries
Other Machineries (Miscellaneous, Laboratory etc.)
• Other Fixed Assets………………………………………..........….......6
Furniture & Fixtures
Pre-operative and Preliminary Expenses
Technical Knowhow
Provision of Contingencies
• Working Capital Requirement Per Month……………………….…7
Raw Material
Packing Material
Lab & ETP Chemical Cost
Consumable Store

• Overheads Required Per Month and Per Annum………….…….…8
Utilities & Overheads (Power, Water and Fuel Expenses etc.)
Royalty and Other Charges
Selling and Distribution Expenses
• Salary and Wages …………………………………………....…………..9
• Turnover Per Annum ……………………………………………........…10
• Share Capital………………………………………………………….....11
Equity Capital
Preference Share Capital

• Annexure 1 :: Cost of Project and Means of Finance
• Annexure 2 :: Profitability and Net Cash Accruals
 Revenue/Income/Realisation
 Expenses/Cost of Products/Services/Items
 Gross Profit
 Financial Charges
 Total Cost of Sales
 Net Profit After Taxes
 Net Cash Accruals

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• Annexure 3 :: Assessment of Working Capital requirements
 Current Assets
 Gross Working Capital
 Current Liabilities
 Net Working Capital
 Working Note for Calculation of Work-in-
process
• Annexure 4 :: Sources and Disposition of Funds

• Annexure 5 :: Projected Balance Sheets
 ROI (Average of Fixed Assets)
 RONW (Average of Share Capital)
 ROI (Average of Total Assets)
• Annexure 6 :: Profitability Ratios
 D.S.C.R
 Earnings Per Share (EPS)
 Debt Equity Ratio

• Annexure 7 :: Break-Even Analysis
 Variable Cost & Expenses
 Semi-Variable/Semi-Fixed Expenses
 Profit Volume Ratio (PVR)
 Fixed Expenses / Cost
 B.E.P

• Annexure 8 to 11 :: Sensitivity Analysis-Price/Volume
 Resultant N.P.B.T
 Resultant D.S.C.R
 Resultant PV Ratio
 Resultant DER
 Resultant ROI
 Resultant BEP

• Annexure 14 :: Product wise Domestic Sales
Realisation
• Annexure 15 :: Total Raw Material Cost
• Annexure 16 :: Raw Material Cost per unit
• Annexure 17 :: Total Lab & ETP Chemical Cost
• Annexure 18 :: Consumables, Store etc.
• Annexure 19 :: Packing Material Cost
• Annexure 20 :: Packing Material Cost Per Unit

• Annexure 21 :: Employees Expenses
• Annexure 22 :: Fuel Expenses
• Annexure 23 :: Power/Electricity Expenses
• Annexure 24 :: Royalty & Other Charges
• Annexure 25 :: Repairs & Maintenance Expenses
• Annexure 26 :: Other Manufacturing Expenses
• Annexure 27 :: Administration Expenses
• Annexure 28 :: Selling Expenses

• Annexure 29 :: Depreciation Charges – as per Books (Total)
• Annexure 30 :: Depreciation Charges – as per Books (P & M)
• Annexure 31 :: Depreciation Charges - as per IT Act WDV
(Total)
• Annexure 32 :: Depreciation Charges - as per IT Act WDV (P
& M)
• Annexure 33 :: Interest and Repayment - Term Loans
• Annexure 34 :: Tax on Profits
• Annexure 35 :: Projected Pay-Back Period and IRR

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