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Sugar Industry Business Plan


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Sugar Industry Business Plan

  1. 1. “JAY-VIJAYSugarManufacturing andPackaging”.Table of contents: I. Executive summary II. About my Business Plan III. Background: Business description and Aims 4.0 Main Objectives of My Business5.0 Our mission6.0 LOCATION7.0 Business definition:8.0 Product and quality maintain9.0 Business Research11.0 Key success factors12.0 Macro environment analysis13.0 PEST ANALYSIS
  2. 2. 14.0 Entry in new market15.0 GLOBAL SUGAR OVERVIEW16.0 competitors17.0 Internal analysis18.0 Three year financial statement19.0 References1.0 Executive summary:As I mentioned in my feasibility report I am going to start my new business that is sugar manufacturing and packaging. In thisbusiness plan I discussed all the issues, opportunities, challenges, resources, sells government policy-subsidies and competitoranalysis. I have planned to start up my business after finish my MSc. I mean in year 2013 before starting I will have to find outshare holder. The India has become largest producer of sugar manufacturing 280 MT of cane and 16.5 MT of sugar in 2001-2003,creating it the most important producer of sugar within the world, representing concerning 12% of cane sugar production. India additionally produces another ten MT of ancient sweeteners (Jaggery 9 MT, khandsari 1 MT). India additionally contains a massiveclient base, therefore makes it quite at risk of international sugar market, within the event of surplus or deficit state of affairs. At thesometime its smart potential and prospects.Sharing makes success sweeter we believes in being a accountable and caring company citizen. The cluster not solely contributes tothe nations self sufficiency in power, fuel ethanol, chemicals and sugar, however additionally shares its success with society atgiant. By providing employment to rural folks and sharing within the economic development of farmers and their families, we haveprovided a serious impetus to the expansion and development of the agricultural areas of India. It assists farmers within the areas ofsowing, manure, and improved cane varieties through an intensive cane development program. Widening the scope of ancientfarmer-factory relationship, we has been concerned in providing crop data, fashionable cultivation techniques, improved type ofseeds, higher inputs for transportation and irrigation and social welfare activities for the agricultural community close to thefactories.Caring for and preserving the atmosphere has been a prime priority. We’ve got undertaken the task of intensive plantation in andround the factory complexes at numerous locations and to date the exercise has been fairly successful. The native population isadditionally inspired to undertake plantation drives. We encourage use of renewable fuels that not solely save national resourceshowever are eco–friendly. The cluster these days has cogeneration facilities manufacturing 65 MW of power from renewableresources, that dont contribute to Greenhouse gasses .2.0 About my Business Plan:Sugar manufacturing is the major industry in India because sugarcane is the main crop in India. The India is second largest sugarproduction country in the world. My business plan is to start Sugar Manufacturing and packaging Pvt. Ltd. The name of my firm are“Jay-Vijay” Sugar manufacturing Sholapur,(the Sholapur is my hometown), India and the name I have keep is my mother languagethat means always grow up and win. My family background is some like co-related to sugar manufacturing because my father whois a member of sugar industry which are placed near my town as well as we supply sugarcane to manufacturing industry. Beforecoming Ireland I had been visit this industry ones a month with my Dad, whenever I visit I was thinking by business mind that is Iwanted to start sugar manufacturing and packaging small bags after my master course. So now I have got time to start-up mybusiness and grow up as well as to help local unemployment. In my industry I will make white sugar, sugar refiner, and from by-product I will supply molasses to distillery plant and animal feed industry and the cogeneration facilities will burn the residue of
  3. 3. crushed sugarcane and also agricultural waste to generate power. Some of the steam produced in the cogeneration process will beused to refine sugar. I am going to use some technology in my company e.g. crushing capacity pan, cultivator instead of manual.Under the structured Industrial Development Policy, sugar trade was a part of the Five-Year Plans introduced in 1951 and has beenbeneath the direct management of the govt. ever since. Sugar trade is very politicized and therefore closely controlled by the govt.that has no parallel within the trade. Govt. control, covers all aspects of sugar business i.e. licensing/capacity/cane space,procurement/pricing/sugar pricing/distribution and Imports and exports. Sugar scene in India has been that of protectionism. Themills, the farmers and also the shoppers all are protected a method or another. Whereas the protection to farmer and client has beenconsistent, its not been therefore consistent for the mill house owners.3.0 Background: Business description and AimsBusiness Name and address: “Jay-Vijay” Sugar Manufacturing and Packaging Pvt. Ltd. Near N.H. 9 Sholapur, Maharashtra, IndiaOwner Name and address: Mr. Sandesh Dalave Navodaya College Road, Pokhrapur, Mohol Sholapur, India. 413248Family background: Agricultural and businessBusiness Form: ManufacturingRegistered for: Corporate TaxFormed as: New BusinessStart-up Date: 14 March 20134.0 Main Objectives of My Business:4.1 Primary objectives: the major goal of my company is to make high quality products.To give good interest to shareholders and well price of raw material.Customer loyalty and to become leader in sugar market within several years.Grow up manufacturing plant.4.2 Secondary objectives: As the part of our main aim I am follow the secondary objectivesThat is to make $ 200Million total business first year.Get a higher number of shares from small and medium firms.4.3 Business perspective: How realistic are the opportunities? That of the Opportunities is high on priority? How will experiences ofdifferent sugar producing countries be leveraged? What are the desired business imperatives? What ought to be the regulatorysurroundings to facilitate realization of the opportunities?
  4. 4. 4.4 Regulatory perspective: What are the regulatory modifications required? What is the key learning from regulatory changes inkey sugar geographies? What are the potential risks concerned in enterprise the modifications? What are the acceptablemacroeconomic conditions, prerequisites and risk mitigation steps? What ought to be the implementation plan?5.0 Our mission:At Jay-Vijay weve striven to appreciate a company atmosphere of collaborative effort and have worked towards continuousimprovement in each sphere of our activity. In our quest for excellence weve given special thought to our social obligations,whether or not its caring for the agricultural hinterland or the atmosphere we have a tendency to live in. a big and endearing featfor the cluster is that a number of its workers are a vicinity of the Jay-Vijay family for 2 to 3 generations. Projections of thesugarcane primarily based trade in India are exceptionally promising and Jay-Vijay is completely ready to suppose beyond thecube: I. To supply energy alternatives to an energy-starved country through co-generation and ethanol. II. To worth add on our product portfolio III. To maximize the potential of the agro trade in India. IV. To continuously bring down the value of conversion. V. To encourage creativity and resourcefulness, and target continuous R&D. VI. To optimize the worth of stakeholder investments with a nonstop improvement in monetary performance. VII. To diversify and shield the bottom-line throughout trade downturn. VIII. To achieve the best level of accountability, company governance and shareholder worth. To produce and market the best quality of sugar trade connected product and services and constantly evolve todevelop a brand that evokes trust and quality. We tend to will achieve this by displaying the best level of business integrity, hiringthe simplest individuals, providing quality client care and service". In a country where agriculture is that the predominant activity,sugarcane processing units wield an amazing impact on the realm of their location. we have a tendency to still play our role withabsolute commitment and watch with fascination and pride as even the foremost backward areas where our units are located, slowlyrework into a beehive of activity, touching the lives of thousands of individuals, currently a district of the ever increasing "JAY-VIJAY" family.Starting a sugar manufacturing/refinery mission may be a reflection of the aspirations of key stakeholders: farmers, millers,customers and also the government. The world encompasses a vision for achieving high economic growth, minimizing risks,enhancing farmer mille relationships, meeting growing domestic demand and contributing to the nations food and energy wants.6.0 LOCATION:Project web site located twenty two Km from Sholapur and is well connected with National Highway (NH-9), Railway Station andAirport at Sholapur. Low Transportation prices because of proximity to Major highways and low Labor prices because of projectlocation during a ‘D-plus’ zone with no different major business currently in vicinity.No Government regulation demanding sugar production for the state, giving us the liberty to manufacture Ethanol/Gasohol instead-that is much additional profitable. Major state subsidy for power plants, creating the investment terribly engaging.Molasses is being sold in open market and our contacts with the Sugar Mills for last four decades can guarantee offer of enoughmolasses. Co-operative Sugar Mills sell molasses on tenders and amount is abundantly obtainable we tend to need 17400 MTS ofMolasses annually.
  5. 5. Grain of inferior quality broken because of rains, etc. is being auctioned by varied Govt. agencies and is out there simply. Companyhas conjointly contracted with reputed wholesalers for such grain needed amount would be 23,000 MTS annually.Additional good thing about an influence plant primarily based on the freely obtainable by-product baggasse from varied nearbysugar mills.Absolutely no dependence on expensive and air polluting fossil fuel as oil, coal or gas. This guarantees economy because of theperpetual availability of low cost raw material as sugar cane is an agro crop, thereby assuring continuous plant running andprofitability within the future.7.0 Business definition:We are in manufacturing business that is sugar manufacture and packaging to making refined sugar and packing it and sell indomestic or global market. Sugar manufacturing is one of the beneficial industries where we can sell by-products as a raw materialof other industry. It is branch of the food-processing trade comprising specialized enterprises that manufacture white granulatedsugar from sugar beets and refined sugar from granulated sugar. Sugarcane is that the principal raw material employed in sugarprocessing in tropical and subtropical countries. Within the USSR the output of the sugar trade is incredibly vital within thecommodity turnover. Sugar is directly consumed by the general public and is employed in several branches of the food-processingtrade.The production of sugar from sugarcane was known in antiquity. Sugar was 1st industrially made within the sixteenth century inIndia. In Russia the sugar trade originated within the early eighteenth century, when the primary sugar refinery was opened in St.Petersburg (1719). The refinery processed imported raw cane sugar. In Russia and Germany sugar was 1st made from sugar beetswithin the early nineteenth century. The Russian sugar trade was highly centralized and was one in every of the primary branches oftrade to develop large-scale monopolistic associations.8.0 Product and quality maintain:With the idea that the Indian shopper nowadays is as quality and health aware as the other shopper nowadays the planet over, ourSugar Manufacture created an initiative to provide a sugar corresponding to the high standards of the western countries, in India.We have launched into the project which underneath the aegis of the Sugar Technology Mission to create sugar that may besparkling white, pure and healthier. We have perfected the technique and also the result was Indias 1st double refined sulphurlesssugar sold underneath its complete “JAY-VIJAY”.We could be a higher sugar just because its processing continues long then of standard sugar has stopped. The secret behind mycompany purity is that the distinctive Defeco Remelt method, within which the sugar when its crystallized is, melted everywhereonce more and every one the impurities are removed while not the utilization of sulphur.• The double refined our sugar has no impurities; therefore its crystals have natural translucent white color and do not needbleaching with sulphur-dioxide.• Our exported quality sugar is packed underneath a controlled atmosphere, untouched by hand, assuring impeccable hygiene.8.1 Capacity of productionCrushing capacity is the 15000MT sugarcane per dayWe produce 1600 MT sugar per dayCogen Capacity: 65 MWDistillery Capacity: 170,000 LPDProduction, sugar, power, ethanol and by-products like a molasses press mud and bagasse, and this by-product we supply to animalfeed industry and fertilizer industry.8.2 Details about other products:Power generation:
  6. 6. POWER COGENERATION CAPACITY: 65MWBAGASSE, the residual fiber of sugarcane once crushing and extraction, may be a valuable by-product generated throughout thesugar producing method. It high calorific price and is thus used to come up with steam and thereby electricity, that may be astandard thermal various and eliminates emission of inexperienced house gases. My company is second in my district to start-up theEco-friendly cogeneration at one in every of its units, with an occasional project outlay as compared to traditional power plants.Conventionally, this was restricted to providing captive power so as to fulfill the energy necessities of the sugar factory.8.3 ETHANOLCAPACITY: 1, 70,000 Lt. per DayEthanol may be a generic name for Ethyl Alcohol that may be a product of sugarcane molasses and juice, ready by fermentation anddistillation processes. It’s a volatile, flammable and colorless liquid, widely used as a solvent of drugs meant for human contact orconsumption, together with fragrances, flavoring, coloring and medicines. When blended, as an additive with fuel for motorizedvehicles, its referred to as Motor Fuel Grade Alcohol or Power Alcohol. It will be blended with petrol in varying quantities up toany extent relying upon the technology of the engine. Up to fifteen mixes no modifications are needed within the engines.9.0 Business Research:External Analysis:ISSUES with reference to SUGAR tradeLicensing regulations by government: I. Sugar trade may be a schedule trade beneath Industrial Development Regulation Act requiring license to manufacturer. II. Gestation amount has been reduced from three years to at least one. Minimum capability of a replacement sugar mill is 2500 TCD and expandable up to 5000 TCD. III. Minimum distance between two sugar mills is currently 25 Km. that used to be 35 km. Cane availability is not thus crucial demand. IV. Government offers incentives where in new mills will sell up to 100 percent of the sugar in free market against hr of existing mills - Government has additionally announced such incentive for enlargement up to 5000 TCD. V. The impact has been horizontal growth-causing cane shortage-higher per unit processing value etcVI. We are following the government rules and regulation for quantity of sell, price, and export quality and pricing: in this externalanalysis there is restriction on raw material price which has fixed by Indian Government.9.1 Production MonitoringI am using government regulations to Sugar (control) Order 1966 regulates the assembly, sale of sugar, stock limit. It additionallyprescribed normal of quality - to that sugar should conform at the time of delivery.9.2 Sugar Cane Pricing:Sugar Cane (control) Order 1966 was issued to market sugar trade and to make sure truthful deal to cane growers by fixingminimum worth payable by sugar mills. Act provided cane worth fixation basis five hundredth profit sharing. Not enforced in somestates where such state fix its own worth.9.3 Distribution channels:The Levy Sugar offer (control) order 1979 was issued empowering the govt. To direct sugar mills to provide levy sugar toauthorized persons/organization etc. at a worth mounted for the season.
  7. 7. 9.4 Dual Sugar Pricing PolicyUnder the supply of the Sugar management Order, Govt. has been regulating the sugar provides for distribution below PDS and freemarket. Many times within the past, trade has skillful complete management or partial management to complete decontrol and backto partial management.9.5 Quality/PackagingGoverned of India standards Grade 31, 30, 29 and Packaging solely in a hundred kg jute baggage. Client packs allowed in 1, 2, 5 kgin any packaging. Exports packing is in 50 Kg and in any packaging material and thus additionally imports so I am using authorizedpackaging to sell in domestic as well as foreign market. Sugar (Packing and Marking) Order, 1970: -Sugar (Packing and Marking)Order, 1970 provides markings to be indicated on sugar luggage. Unless otherwise permitted by central government, sugar isneeded to be packed in jute luggage conforming to Indian normal specifications. Sugar meant for the aim of export and small-consumed packs of 5 and 1-2 kg.9.6 State government rulesOver and higher than the central Govt. control, every state Government enforces its own regulatory measures to shield theState/farmers. Following are some typical controls within the State of Uttar Pradesh that are there in alternative states in some kindor alternative.9.7 Raw material (Sugar Cane) PurchaseWhen I purchase raw material that is cane-sugar from farmers it has fixed price which done by government and farmers demand.This Order provides for restriction on purchase of sugarcane by sugar producers Order, 1966 now the fixed rate of sugarcane is$47.40 per ton. Sugar Cane (Purchase Tax) Act, 1961 This Act proposes to impose a tax on the acquisition of sugarcane by theowner of a sugar factory. A sugar factory isnt allowed to get rid of any sugar till Purchase tax has been paid thereupon. At thepresent the speed of Purchase Tax is $5/ MT on sugar.9.7 Sugar Cane (Supply & Purchase) order, 1954It provides for rules and rules governing purchase of cane during a reserved space/assigned space and get for cane at cane gettingcenters at intervals the reserved area of a sugar factory.9.8 Raw material (Molasses) management OrderWhile the Central Government has decontrolled the molasses, the State Governments, had imposed its own rules like: I. Ban on interstate movement II. Restriction on finish use i.e. sale to a specified client. III. Ratio of management mounted rate and free market rate IV. Also specifies customers who can get at management worth.9.9 Regulations for trade – domestic marketSugar is ruled by the supply of Essential Commodities Act. The act provides stipulations on trade licenses, stock limits and rotationamount for stocks. Additionally, there are restrictions on sales and distribution which I use when selling, i.e. I. We sell solely to only licensed dealers. II. A dealer will sell to a different dealer one time. III. At times dealer isnt allowed to sell to a different dealer within the same state.
  8. 8. IV. Anybody storing over 900 kg. Of sugar wants license. V. Stock to rotate before 15 days.VI. Sugar - distribution and trading practicesUnder the twin pricing policy Government announces from time to time portion of the sugar, which will be sold within the freemarket and whats to be equipped at the mounted worth below the general public distribution system known as levy sugar.Levy Sugar sales/distribution systemThe shareholder of my company get discount when purchase sugar.9.1.1 Period of SaleWe ought to complete sale and dispatch of 100% of such sugar released by the govt. on monthly basis and at intervals stipulatedamount, thus prescribed.Also so as to cut back speculation and guarantee provides in market, mills are guaranteed to sell the quota evenly in 2 fortnights ofthe month i.e. 50:50. However, the sole relaxation is that mills will sell up to minimum 40.5% during a fortnight and a host of 52.5%.9.1.2 Customer:Customer Base in my State: I am supplying to those customer directly the following figures are approximately:House Hold Users: 1 millionRetailers selling sugar: 30Licensed wholesalers: 70Establishments: 800.9.1.3 Trade ChannelThus driven by statutory necessities most trade from the mills is to licensed wholesalers - who in flip service retailers for thehousehold customers and end-users for institutional demand.Moreover, with such an oversized client base unfold everywhere the country, neither its potential for the individual mill to accessthem, nor service. So trade is a vital link within the offer chain.In order to form positive of commitments/transactions and assortment of sales proceeds a system of indent and order collectingagent got developed over a amount of your time in most states. These agents are appointed by the mills whose role is: I. To book order from wholesalers. II. Place such orders and delivery directions on mills III. Arrange deliveries from mills to the wholesalers. IV. Collect payment from the wholesalers V. Pass on sales proceeds to the mills VI. The mills for the higher than service pay a thought by method of commission (0.5 to 0.75%).
  9. 9. VII. The secondary sale is transacted through brokers. Such brokers bring the wholesalers and also the retailers in reality for the last word sale and charge a free (upto zero.25%) VIII. The retails either acquire the sugar or the wholesaler makes the delivery to the retailer at a price.10.0 EXPORT REGULATIONS: When I am going to export our sugar I have to follow government rules that are export rulesand regulations for sugar. India encompasses a distinct advantage of its geographical location. Its land locked with neighboringcountries like Pakistan, Nepal, Bangladesh and Bhutan. Conjointly Sri Lanka is that the nearest country by Southern India. Besidessome Gulf countries moreover as Indonesia have a marketplace for Indian granular sugar. India is best for Pakistan, Bangladesh,Srilanka and Nepal. Indian Sugar can have $ 30/MT freight advantage over Brazil, 15$ over Thailand, Besides Indian sugar ought tocommand premium over Brazilian sugar.11.0 Key success factors (KSF’s):The key success is the combination of important facts that is required in order to accomplish several desirable goals.The key success factor of sugar manufacturing is:Payment of farmer within 14 days of supply sugarcane to gain confident of supplier farmers. (As specified by the government).To well skilled labor, government support for rules and policy, higher productivity. Optimum utilization of byproduct for additionalrevenue, in a sugar manufacturing most powerful success factor is that there is no single by products means by product of sugar isthe raw material of others. The captive generationCustomer service: to supply final product within time minor to trader or consumers.12.0 Macro environment analysis:Industry analysis:Indian sugar industry has entered the strongest up cycle (lowest stock to use ratio) in the history of 50 years after witnessing supplyglut in previous two sugar seasons in a row (SS 2006-08). In SS2006-07, sugar production reached all-time high of 28.3 ML tones,registering a growth of 46.6% on yoy basis and it declined marginally by 7.1% to 26.3 ml tones in SS2007-08. Sugar productionreached an all-time low of 14.7 ml tones during SS2008-09 due to sharp fall in the sugarcane acreage. However, sugar consumptioncontinued to grow at a steady pace. SS2007-08, these six states together accounted for almost 92% of the total sugar produced inIndia. In SS2007-08, the State of Maharashtra produced the highest sugar at 9.1 ml tones followed by UP with 7.3 ml tones.Sugarcane is the primary raw material for the sugar industry. It accounts for almost 75%-80% the total operating cost of the sugarindustry producing state in the country and accounted for about 37% of the total sugarcane output in SS 2007-08. We expect sugardeficit situation in India to continue in SS2009-10 and SS2010-11. We believe that India will bridge the gap between demand andsupply through imports. We expect that sugar prices will continue to rise till SS2009-10 on account of tight demand and supplysituation in country.The global economic downturn, stemming from the financial crisis and changes in the economy, are expected to impact world sugarmarket in the following ways:A reduction in import demand for sugar with the market becoming more sensitive to income changes with only a moderate impacton household consumption. As the industrial use of sugar accounts for the largest share of demand.Our company is following the pest analysis and porters forces:13.0 PEST ANALYSIS13.1 POLITICALIn India sugar continues to be thought-about an ESSENTIAL COMMODITY hence the govt. still controls the arena largelysignificantly the pricing of sugar and allocation of procurement space.The Levy sales account for 100 percent of individual production that is sold through the general public distribution system, sugar
  10. 10. price is fixed by government we can’t change on any circumstances. Raw material price also fixed by government i.e. fromagricultural ministry but we pay 10% more than other industry because I get more raw material when I pay more.The central government sets the set statutory minimum value (SMP) payable to farmers. The New sugar mills cannot be originated15km radius of the present ones. Some states set costs on top of the SMP referred to as SAP- state suggested costs for sugar cane inrespective state MINIMUM SUPPORT value Highly influenced by state government policies (largely focused in utter Pradesh andMaharashtra.13.2 ECONOMICALSugarcane is that the main raw material for sugar trade and accounts for concerning seventieth of the entire cost of production ofsugar. It’s additionally the most important supply of income for variant farmers. The determination of worth for sugarcane is thus, amatter of crucial importance each for the sugar trade and also the cane growers. The central government fixes a statutory minimumworth in terms of clause three of the sugarcane (control) order, 1966 in respect of every sugar season by onside ring the subsequent1. Price of production of sugarcane.2. Come back to the growers from different crops and also the general trend of costs of agricultural commodities.3. Availability of sugar to customers at a good worth.4. Sugar producers sell worth at that sugar created from sugarcane.5. Recovery of sugar fromThe Sugar accounts for around 5.5% of India’s final personal consumption on food and a couple of on India’s total final personalconsumption. The Second largest producer within the world around ten to twelve a little bit of world’s production the Sugar isIndia’s second largest agro-processing trade. The Sugar contributes around Rs.17 billion annually to numerous state governmentsby ways in which of excise duty and get tax on sugarcane. The Deficit of sugar production for past 3 years. Only 17.5 million toneproduction for nineteen million tone domestic demand for 2005-06. We are exporting our sugar and it helps our government togetting exchange rates and foreign currency.13.3 SOCIO-CULTURALThe Sugar is that the Prime demand Of Diet In each Indian Household the India is that the largest client of sugar within the worldnineteen million tons for 2005-06The Sugarcane Farmers And Their Families No Over forty five Million , Constituting Around seven.5 a little bit of RuralPopulation and also the Sugar trade Employs zero.5 Million staff And additionally to several a lot of Through numerous AncillaryActivities. The Per-capita consumption of sugar is predicted to rise by approx 1.9% annually from sixteen.9kg in 2002-03 toeighteen.9kg by 2009-1013.4 Social Issues:Sugar trade has been attentiveness for socio-economic development within the rural areas by way of mobilizing rural resources,generating employment, providing higher income opportunity, and transport and communication facilities. We bring labor from outof my region that is around 200-400 km. away from my place; labor comes with their family so it’s difficult to getting education oftheir children. So we have decided to open several faculties i.e. colleges, medical centers and hospitals for the good thing about theagricultural population. So our company has additionally diversified into byproduct primarily based industry which has investedand began distilleries, organic chemical plants, paper and board factories and cogeneration plants. The trade generates its ownreplenish able biomass and uses it as fuel while not reckoning on fossil fuel.• Low costs and development outcomes: - Sugar production plays a key role in the economics and employment of least developedcountries. Low domestic or export prices have knock-on effects on field and production labor. Where production is predominantlysmall-scale, e.g. India• Poor operating condition: - operating in sugarcane plantation will be backbreaking work with terribly poor wages. There are alsoimportant exposures to agrochemicals, especially herbicides, though this is often less of a drag than with several alternativecommodity crops.
  11. 11. • Impact on the bottom water:-This is associated significantly with the growing of cane, and additionally within the processing ofeach cane and beet. Sugarcane is deep rooted crop and uses plenty of water; its terribly sensitive to soil water deficits. In severalareas its sometimes from 100 percent of water by irrigation, though in alternative areas its rain fed. The crop will have a greatimpact on the river flow and also the ground water. A recent study of irrigated agriculture in selected river basin of high importanceof biodiversity. WWF ranks sugar because the third “Thirstiest” commodity crop, generally requiring 2000-3000 liters per kg ofcrop.• Modification within the cropping pattern: - its essential to fallow the correct croppingPattern/crop rotation per the agro climatic condition to enhance the biophysical properties of the soil and reduction in pestincidence, however in case of sugarcane production because of its high worth as money crop most of the farmers are began to takethe advantage. However this affects fertility of land by reduction within the production of biomass for livelihood that may13.4 TECHNOLOGICAL:We have our sugar technological laboratory and sometime we get help from The sugar laboratory of Sugar Technology Departmentis accredited by National Accreditation Board for Testing and Calibration Laboratories (NABL) New Delhi. Sugar, molasses,alternative intermediate product from sugar producing method and boiler water are analyzed within the laboratory. Under Extensionand Advisory Services, the Department is successfully guiding the sugar factories to enhance technical performance as regard tocapability utilization, reduction in sugar losses, production of superior quality sugar and conservation of energy. The Departmentadditionally provides suggestions to factories on alteration/ modifications in existing machinery, addition of recent equipments,modernization and enlargement. All the technical help is provided throughout implementation of such comes.13.4.1 Technology for Harvesting:Manually harvesting:In several countries even these days harvesting is completed manually using numerous varieties of hand knives or hand axes.Among the many tools the cutting blade is typically heavier and facilitates easier and economical cutting of cane. Manualharvesting needs skilled laborers as improper harvest of cane results in loss of cane & sugar yield, poor juice quality and issuesin milling as a result of extraneous matter.It was difficult for our company to harvesting by labor so we have been using harvester the following are the explanation of why weare using harvesteMechanical HarvestingHarvesting labor is changing into scarce and expensive in read of diversion of labor to alternative remunerative work in trade,construction, business etc. Mill stoppages due to non-availability of canes arent uncommon attributable to shortage of harvestinglabor. And, most of the new mills are of upper crushing capability and lots of are expanding their crushing capacities. So dailydemand of cane is increasing and hence bigger demand for harvesting labor. Added the current to the current} most of the presentday agricultural laborers arent inquisitive about field operations involving abundant drudgery. So in years to come back, the laborposition is probably going to deteriorate more. So mechanization is inevitable and hence, adoption of mechanical harvesting of canein future is inevitable. In countries like Australia, Brazil, USA, South Africa, Taiwan, Thailand etc where sugarcane cultivation ismuch mechanized huge harvesters are utilized for cane harvesting. In these countries, sugarcane is grown on giant plantation scalein giant farms owned by either mills or huge farmers. The sphere capability of mechanical cane harvesters varies with the scale (2.5to four ha per day of eight hours)The limitation of mechanical harvesters is use of such machines in tiny, irregular and fragmented holdings, diversified croppingpatterns, restricted resource capability of tiny & marginal farmers in many countries.Teaching and coaching could be a permanent feature. Additionally to regular courses, short term courses and additionally specialtailor created courses for organizations operating in sugar business in India and abroad are organized The Installation of applicableeffluent treatment systems (to achieve zero discharge). The Optimization of plant capacities owing to little land holdings in Indiaand lack of adequate infrastructure.15.0 THREAT OF SUBSTITUTESArtificial sweeteners developed in laboratories might prove to create a significant threat to sugar ex- sugar free
  12. 12. Alternate sweeteners to Sugar in India are Gur and Khandsari, however the threat of the substitutes is terribly low as share of Gurand Khandsari are declining.The utilization of sugar cane for production of sugar from forty seven and try to forty two similar to gur and khandari in 96-97 toaround seventy similar to sugar and half-hour for gur and khandari over the last decade. Gur isnt an in depth substitute of sugar asits mainly used food stuffs nay the agricultural population and not as a sweetener, khandsari but could be a shut substitute because itis employed as a sweetener.15.1 BARGAINING POWER OF SUPPLIERSOur major supplier is farmers they provide sugarcane but sometimes they strike to demand more rate of their sugarcane. So ourcompany gives 10% more to get enough raw materials it’s like going against govt. but it beneficial to farmer.The bargaining power of suppliers is incredibly high in India because the government allocates the realm of procurement andannounces the acquisition value from farmers SMP- statutory minimum value and SAP-state suggested value. The governmentprotects the interest of the farmers by implementing the higher than purchase costs.The prices are fastened by the govt. of India within the starting of each season, based mostly on recommendations of commission ofagriculture prices and costs (CACP). the govt. of India has been asserting the SMP sine 1952-53.The SMP has increased once a yearsince 1988, and has been fastened with a six.7% increase over 2005 at Rs79.5 per quintal over 2005. However the sugar mills payan additional higher value on account of upper state suggested costs fastened by the respective state governments. The personalsugar mills additionally face competition as five hundredth of units in India are run by cooperatives managed and owned by farmers(SUPPLIERS) leading to higher power of suppliers as they will can also} enter within the future and also the existing ones can offerto 3 mills.15.2 BARGAING POWER OF consumers (LIMITED)The Government influences the worth of levy sugar 10% of a mills manufacture should be sold at levy value through publicdistribution system the quota releases of free sale sugar. A Householders, sweet and confectionary industries, soft drink industry andsupermarket are our main consumer. All the price has fixed by govt. but big industries want some percent of discount we can do itbecause it has big deal for us. The Rising demand of sugar as a raw material in soft drinks confectionaries food merchandise. Eventhough the demand-supply imbalance are going to be met terribly soon, the export obligation can end in low inventories, thereforeincreasing costs.15.3 POTENTIAL ENTRANTS AND BARRIERS TO ENTRY (MEDIUM)The government has originated minimal barriers for entry in to the sugar trade as theres short fall of production, the governmentused to allow incentives to line up new plants by granting higher free sale for 1st 5 years that has currently been withdrawn tosupport existing players, the govt. policy additionally restricts a production unit to be originated inside 25 km radius of an existingmill. The entry barriers in terms of license and policies are terribly low as government has relicensed in 1998, so entrepreneurs willfreely originated mills or expand existing capacities compiling with the 15km radii rule. The entry barriers in terms of license andpolicies are terribly low as government has relicensed in 1998, so entrepreneurs will freely originated mills or expand existingcapacities compiling with the 15km radii rule.16.0 GLOBAL SUGAR OVERVIEWBrazil is that the largest trader of sugar within the world, but its diverting five hundredth of its production for production of ethanolthat is predicted to possess a big impact on} on the worldwide costs and additionally effect the provision to an extent.The European union nowadays exported sugar to Indonesia, Bangladesh, middle-east, Sri lanka accounting for twelve-tone systemof world exports , but European union is probably going to become a importer within the long-standing time as WTO has orderedthe ecu union (most expensive sugar producer) to prevent dumping backed sugar illegally in to the worldwide market, which mightend in to a cut in volumes of production because the subsidies are planning to be cut , ensuing to gap s for low value producers likeIndia within the world market.There is a big rise in consumption of sugar in china owing to rise in demand of food and beverages, china are predicted to be thebiggest importer of sugar within the future. The global sugar costs are planning to more rise owing to imbalance of demand and
  13. 13. provide in future owing to diversion of a lot of production towards ethanol in Brazil and with an expected cut in European union’sproduction.16.1 CompetitorIn the term of market research I am using both secondary resources such as industry failure and success and business information.In the sugar industry business the part of competitor is quite different than other business because main competition of sugarindustry is how much we have to pay for raw material. Some sugar industries pay fewer amounts for raw material (sugarcane) andsome pays sufficient. I will search about competition from farmers and financial department of sugar industries. The rate of product(sugar) is fixed in India that is domestic and export. Another type of competitor is raw material before ten years it was highlycompetition for raw material between sugar industries. But nowadays there is lot of sugarcane left in farmers farm because higherproduction of sugarcane and less industries. So industries help to each other for raw material. As I wrote before I pay more for rawmaterial to fulfill capacity.16.2 Market and Customer:Indian approach towards export of sugar is vastly completely different and market friendly. India has been exporting sugar often inperiods of sugar surplus whereas, most of the opposite countries dump their excess sugar within the international market despitesimple accessibility to funds carrying low rate of interest rate. The market place of sugar is depending on quality of sugar, we maketwo varieties of sugar one for export quality and other for domestic market. In domestic market Mumbai and Poona are main marketplace, this business is B2B so I will analyze which trader is big seller of sugar for domestic market and in the international market Iwill export myself to USA, UK and European countries. The European countries are good market place of sugar, sugar is basic needof everyone and there is lack of sugar industries in Europe and UK. The ethanol I will send to petroleum industry it has higherdemand in India because India suffering for petroleum and electricity. So I will focus in domestic market for ethanol and electricityI will use in my industry. The traders and exporters are my main consumer, I will contact with trading Companies, andconfectionary industries. I have to keep in touch with politician to sell sugar to government which they provide to poor people as alevy and ration.16.3 Strengths:Provides direct employment as well as ancillary activities to close concerning zero.5 million employees• It additionally supports the downstream industries by providing the raw material.• Sugarcane farming is a lot of profitable then the other money crop in India.• This sector is the put concentration of socioeconomic development of the agricultural India• Robust government policies because it comes below essential commodity of mass consumption16.4 Weakness:Most of the Co-operative sugar industries in India e. g. in Maharashtra realize tough to payFor the sugar cane equipped by the farmers.• Most of the sugar factories are a lot of then thirty years previous and still using the previous technology low put in productioncapability ends up in the decrease in production and losses.• Lack of professionalism16.5 Opportunities I. High worth of by-products for downstream industries. II. Huge potential to extend the productivity of cane and sugar recovery rate.
  14. 14. III. Technology up gradation, new advanced technology accessible for the byproduct utilization. IV. We have opportunity in power and ethanol section because India is facing to petroleum and electricity when I start those plant I won’t have need to pay electricity. 16.6 Threats• Sugar sector is at risk of political interest.• Ground water availability for irrigation.• Quality of soil deteriorates attributable to overuse of fertilizer and pesticides to extend sugarcane yield.• Unhealthy competition between members of the society.17.0 Internal analysis:Investment:First of all I have to arrange for land around 150 acres which has value around 751,109.09 USD and I have got report about price ofequipment and vehicles and other resources which I will have essential. The total investment including resources, technology,building, store, quarters, etc will be 30million USD. The price of per share is 800 USD; my family is supporting me to start up thisbusiness so I am investing 30 % of my own money it will be around 9million USD. After completing my proposal I will submit it toDistrict bank Sholapur, India to sanction my loan that is 9 million USD. The share price is 800USD and I have needed 12 millionUSD to get sufficient amount so I want 15000 shareholders/investors but mostly in India farmers are the shareholder of sugar mill. Ihave to contact around 20,000 farmers and convince them about my mission and vision.This is the investment criteria but I didn’t put distillery plant value and power plant because I will start those plants 2 year later. ButI have planned in details about how much I can get ethanol and power after starting.17.1 Machinery and assets:There are list below who are the supplier of sugar manufacturing equipment: I. Ashoka machine tools Private LTD. Greatest noida II. Address: D 62-67, epic, site V, kasna greater noida UP. Phone: +91-120-2340031 III. Miranda Automation Private Ltd. Navi Mumbai IV. Address: Plot No. R- 632 M.I.D.C. industrial area, rabale thgane belapur road Mumbai, Maharashtra. Phone: +91-22- 2764253 V. Harvesting Machinery supplier Mumbai VI. Industrial estate Dombivali west Mumbai phone: +91-22-59542317.2 Resources:Transport department: I have needed more than 500 trucks and tractors to carry sugarcane from farm to mill, so I will makecontract with tractor and truck owners and it shall change every year one of our transport department will take all responsibility.
  15. 15. IT department: Our IT specialist will work for all technical problems and R and D as well, we have attached our chemicallaboratory to IT department because it can be easy way to work together.Finance Department: to pay a wages of labor, Raw material pay, transport rent, maintenance of company has to arrange by financedepartment. Sometimes farmer want advance of their sugarcane so our finance officer deduct loan amount from their bill. Apply toBank for loan, government subsidiary done by finance department. Share price and paying interest to shareholder as well. ThisSection deals with monetary matters regarding preparation of bills i.e. Pay Bills, Contingency Bills, Travelling Expenses, andMedical Re-Imbursement etc. Issue of L.O.C, Preparation of Surrender & re-appropriation of accounts, Budget Estimate& Revised Estimate. Works of entertaining audit and PAC report, Reconciliation of accounts. Submission of monthly &quarterly expenditure report and Revenue Receipt to the Finance Department. Maintains and controls over expenditure and receiptsand supervises the monetary management of the Directorate & District Offices. Correspondences relating to G.P.F.Withdrawal from P.F Account (N.R) and advance from G.P.F. account together with preparation of such bills and submission ofquarterly withdrawal of G.P.F. to the Finance Department. Assortment of G.P.F statement of Officers and employees from Account& Treasuries Department.HR department:In short, its the hub of the organization serving as a liaison between all involved. Reckoning on the dimensions of the corporate,the HR Department may well be referred to as Personnel with a manageable workforce who will be handled by a personnel managerand little workers. For larger, additional complicated organizations with many departments and divisions, the task is far additionaldemanding, seizing a lifetime of its own.Some corporations have quite one HR Department - company and Union. for instance, a food service trade may need a companyHR Department that oversees “white collared" staff and an HR Department that oversees the “blue collar" workforce with a stresson labor relations. The organization can, thus, institute these 2 HR Departments to manage the distinctive wants of each union andnon-union staff.Organizational Development:To ensure its success, a corporation should establish a hierarchal reporting system. The funnel of responsibility is essential to thepotency of a smoothly operating business entity during which theres a clearly outlined understanding of who is to blame for what.they supply consultation to a companys management team to spot what the companys core business and culture is regarding, andproceeds to arrange and map the companys organizational infrastructure to support those wants.Employee Recruitment and choice Process:There are several steps to recruiting and choosing qualified staff. First, a department head should inform the HR manager of a gapin their department. Then the HR manager should acquire the task description to formulate employment Description Sheet forpublication either internally, publicly, or both. Then HR should field the (many) responses to that job announcement to weed out thequalified from the unqualified candidates. Once thats completed, the interview method should be coordinated. They prepare thetask description, contact the newspaper, run the ad, field the calls, compile a listing of potential candidates, submit that list to thedepartments hiring manager for approval and choice, contact the chosen candidates to line up preliminary interviews, and interviewthe candidates! Employee coaching camp; Development: As a corporation and therefore the necessities of a foothold evolve, acorporation has to take bound measures to confirm a highly skilled workforce is in our company. The Human Resources Departmentoversees the abilities development of companys workforce, acting as an in-house coaching center to coordinate coaching programseither on-site, off-site, or within the field. This would possibly embody on-going company coaching, outside coaching seminars, ormaybe school, during which case an employee can receive tuition reimbursement upon earning a passing grade.Employee Compensation Benefits:This covers salaries, bonuses, vacation pay, sick leave pay, Workers Compensation, and insurance policies like medical, injury.The Human Resources Department is to blame for developing and administering an advantages compensation system that is anincentive to confirm the recruitment and detainment of prime talent that may keep on with the corporate. When an employee isemployed, the companys advantages Coordinator is needed to fulfill with staff one-on-one or in tiny cluster settings to elucidatetheir advantages package. This usually needs an employee to form an informed call and to supply their signature for processingfunctions
  16. 16. Employee Relations:With the increased rise in unethical practices and misbehaviors happening in todays workplace like age, gender, race, and faithdiscrimination and sexual harassment, there has to be necessary compliance with governing rules and laws to confirm honesttreatment of staff. In short, staff got to understand they need an area to show when a supervisor abuses his or her authority inanyway. Whether or not company or union, the HR Department can become involved to act as arbitrator and liaison between legalentities, regulatory agencies like Human Rights, supervisors.Policy Formulation:Regardless of the organizations size, company policies and procedures should be established to confirm order within theworkplace. These policies and procedures are place in place to supply every employee with an understanding of whats expected ofthem. Similarly, these policies and procedural tips can assist hiring managers in evaluating their employees performance. Thesepolicies are often established company-wide or used to outline every departments operate. It’s Human Resources responsibility tocollaborate with department managers on the formulation of those policies and laws to confirm a cohesive organization. a standardapply is that the development and implementation of an Employee Procedure Manual or Employee Handbook thats eitherdistributed to every employee at the time of rent or a master copy allotted one to a department.The Human Resources info Systems keeps track of the vast quantity of knowledge, an individuals resources department shouldhave a decent HRIS in place to automate several functions like designing and tracking prices, monitoring and evaluatingproductivity levels, and therefore the storing and processing of employee records like payroll, benefits, and personnel files. It’s vitalthat you simply, the task seeker, perceive how the HR operate works – specifically within the space of candidate recruitment. Ifyoure considering a career in human resources, youll be able to prefer to become a Generalist or a Specialist. Whether or notemployment seeker or a HR skilled, analysis a corporation well before applying for a foothold.18.0 Three year financing and balance sheet: (value in lacks on Indian ruppes)Sr. No. Particulars May 2013 May 2014 May 20151 Sales/ income 41411.60 47334.02 50295.092 Less excise duty and 1395.45 1551.20 1417045 other taxes3 Net Sales/ Income from 40016.15 45782.82 48877.64 operations4 Other operating income 650.96 535.88 475.255 Total Revenue 40667.11 46318.70 49351.896 EXPENDITUREA) Increase/decrease in 26249.55 5129.31 11833.25 stock in trade and work in processb) Raw material purchase 1394.79 35611.65 28593.51c) Purchase of goods 7904.62 5521.41 228.85
  17. 17. d) Employees wages 1268.05 1606.02 1481.97e) Depreciation 1154.22 1935.58 1650.07f) Other expenditure 2305.32 3240.39 31.86.41g) Off-season expenses Net 2965.86 1285.37 1514.05h) Total 37310.69 44071.11 48488.013. Net Profit before other 3356.42 2247.59 2377.83 income4. Other income 27.23 32.40 53.495 Net profit before interest 3383.65 2279.99 2431.326 Interest 2802.58 2148.10 1689.447 Net profit after interest 4735.71 000 000 but before exceptional and extra ordinary items8 Exceptional items (net 000 and tax 000 000 gain/loss)9 Profit/loss before tax 7-8- 581.07 131.89 741.88 910 Taxation 400.79 92.32 741.8811 Net profit/loss 400.79 92.32 741.8812 Paid-up equity share 5390.60 5390.60 5390.60 capital13 Balance sheet Eps (Rs./share) basic 0.73 0.16 1.38 before and after extraordinary items,15 Public before and after dilutedshareholders: No 28048029 27978029 29674461 of Shares extraordinary items 52.03% 51.90% 55.05 Current percentage of shareholding16 Percentage of shares 22.49% 22.49% 11.69%17 Net profit/loss before tax 581.07 131.89 741.88
  18. 18. 18 Segment result net profit 264.41 580.98 776.23Place Mumbai, India Sandesh DalaveDate : 31/05/2013 (President)Total net profitYear 2012 Rs. 26.4 millionYear 2013 Rs. 58.98 millionYear 2014 Rs. 776.23 million19.0 References:Altenburg, T., Schmitz, H. & Stamm, A., 2008. Breakthrough? China’s and India’s Transition from Production to Innovation. WorldDevelopment, 36(2), pp.325–344.Anon, Acucar Guarani | CrunchBase Profile. Available at: [Accessed May 4,2012a].Anon, Annual Report 2008-2009.pdf. Available at:[Accessed May 4, 2012b].Anon, Brazilian Sugar Companies. Available at: [Accessed May 4, 2012c].Anon, Indian Sugar Industry - Market Research Reports - Research and Markets. Available at: [Accessed May 4, 2012d].Anon, The Oudh Sugar Mills Limited. Available at: [Accessed May 4,2012e].Anon, Available at:,pdf,20082009# [Accessed May 4, 2012f].
  19. 19. Felipe, J., Laviña, E. & Fan, E.X., 2008. The Diverging Patterns of Profitability, Investment and Growth of China and India During1980–2003. World Development, 36(5), pp.741–774.Lee, M., 2010. Will sugar be the oil of the 21st century? Ecologist, 40(7), pp.12–13.M. L. H., 2011. Sugar Changed the World: A Story of Magic, Spice, Slavery, Freedom, and Science. Journal of Children’sLiterature, 37(2), p.49.Mello, M.M., Pomeranz, J. & Moran, P., 2008. The Interplay of Public Health Law and Industry Self-Regulation: The Case of Sugar-Sweetened Beverage Sales in Schools. American Journal of Public Health, 98(4), pp.595–604.Richardson-Ngwenya, P., 2010. The EU sugar reform and the responses of Caribbean sugar producers. Geography, 95(2), pp.70–79.Rule, V., 2008. Sweet dreams. Dance Gazette: Journal of the Royal Academy of Dancing, (1), pp.32–35.Soobian Ahmed, 2012. Indian Sugar Industry. Available at: [Accessed May 4, 2012].Windsor, E., 2010. The human cost of “super-clean” sugar ethanol. Ecologist, 40(10), pp.2–4.Winship, A.E., 1897. SUGAR. Journal of Education, 45(12), pp.194-195