RICE MILLIntroduction:Rice is the staple food for 65% of the population in India. India is the second largest producer of rice inthe world next to China. In India paddy occupies the first place both in area and production. The Indiasrice production reached to a record high of 104.32 million tonnes in 2011-2012 crop year. It isfundamentally a kharif crop in India. It demands temperature of around 25 degree Celsius and aboveand rainfall of more than 100 cm. Rice grows on a variety of soils like silts, loams and gravels. It can alsotolerate alkaline as well as acid soils. However, clayey loam is well suited to the raising of this crop. Insome of the states like West Bengal, Assam, Orissa and Bihar, two crops of rice are raised in a year. Thisprovides us with ample opportunity for development of rice based value-added products for earningmore foreign exchange. Apart from rice milling, processing of rice bran for oil extraction is also animportant agro processing activity for value addition, income and employment generation. Many of therice processing units are of the traditional huller type and are inefficient. Modern rice mills are havinghigh capacity and are capital intensive, although efficient. Small modern rice mills have been developedand are available in the market but the lack of information is a bottleneck in its adoption by theprospective entrepreneur. The present model will go a long way in bridging the information gap.Status of Rice Milling Units in IndiaRice milling is the oldest and the largest agro processing industry of the country. At present it has a turnover of more than 25,500/- crore per annum. It processes about 85 million tonnes of paddy per year andprovides staple food grain and other valuable products required by over 60% of the population.
The basic rice milling processes consist of:1. Pre Cleaning : Removing all impurities and unfilled grains from paddy2. De-stoning : Separating small stones from paddy3. Parboiling (Optional) : Helps in improving the nutritional quality by gelatinization of starchinside the rice grain. It improves the milling recovery percent during deshelling and polishing /whitening operation 4. Husking : Removing husk from paddy5. Husk Aspiration : Separating the husk from brown rice/ unhusked paddy6. Paddy Separation : Separating the unhusked paddy from brown rice7. Whitening : Removing all or part of the bran layer and germ from brown rice8. Polishing : Improving the appearance of milled rice by removing the remaining bran particlesand by polishing the exterior of the milled kernel9. Length Grading : Separating small and large brokens from head rice10. Blending : Mixing head rice with predetermined amount of brokens, as required by thecustomer11. Weighing and bagging : Preparing the milled rice for transport to the customerInvestment components of an improved rice mill:The land requirement for establishing an improved rice milling unit will depend upon1. Whether the unit will be using a parboiling unit for pre-treatment of paddy beforecommencement of milling operation or it will be directly milling raw paddy.2. Whether a single pass or a multipass milling unit is to be installed.Generally 2.00 to 2.50 acre of land is required for establishing an improved rice milling unit having aninstalled processing capacity of 2 MT/ hr; operating for single shift / day of 8 hr duration; 300 days perannum; i.e. 4800 MT /annum. The tentative cost of land and land development charges for the modelproject has been considered at Rs. 5.00 Lakh.
Civil construction:The various construction requirement of an improved rice milling unit are as follows:1. Raw paddy godown2. Cleaning unit3. Drier and necessary supporting structures such as, boiler /blower system etc.4. Milling section5. Finished product stores6. Machine rooms7. Auxiliary structures such as office, watch and ward etc.Project CostS.No. DescriptionCost(Rs in Crores)1 Land & Site Development 1.422 Buildings & Civil works 2.023 Plant & Machinery – Indigenous 1.194 Plant & Machinery – Imported 1.605 Electrical Infrastructure 0.156 Electricity Deposits 0.067 Furniture & Fixtures 0.058 Preliminary Expenses 0.089 Pre-operative Expenses 0.5510 Contingency @5% 0.2411 Margin Money for Working capital 1.32Total Project Cost 8.69
Means of FinanceS.No. Sources of FundsCost(Rs in Crores)1 Share Capital - Equity 4.692 Term Loan from Bank 4.00Total 8.69Key Financial indicatorsThe returns are adequate enough to repay the term loan in 7 years. The key financialindicators are tabulated below.S No Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 71 Sales 14.98 18.38 19.25 19.29 19.29 19.29 19.292 Total Expenditure 13.06 15.71 16.69 17.02 17.05 17.06 17.093 PBIDT 1.93 2.66 2.56 2.27 2.24 2.23 2.204 PBT 1.30 1.39 1.32 1.11 1.16 1.25 1.325 PAT 1.05 1.04 0.96 0.80 0.82 0.86 0.896 Cash Accruals 1.16 1.27 1.20 1.03 1.05 1.09 1.137 BEP @ Installed capacity 24.11% 30.57% 35.83% 37.07% 34.67% 31.32% 28.14%8 BEP @ Operating capacity 34.44% 38.21% 42.15% 43.61% 40.79% 36.85% 33.11%9 Debt Equity Ratio 0.68 0.57 0.44 0.30 0.14 0.00 0.0010 DSCR (Gross) 2.33 1.93 1.75 1.48 1.42 1.36 1.7111 Average DSCR 1.6812 DSCR (Net) 3.28 2.92 2.33 1.75 1.57 1.43 1.7613 Average DSCR 2.2814 IRR (%) 15.48%
Reference1. NABARD.2. Apitco limited engg. company website.
Project Report on Rice MillsPrepared byDurgesh Rajendra Shivade107