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BAKERY

INTRODUCTION

Bakery is a traditional activity and occupies an important place in food processing sector. Despite
the advent of semi-automatic and automatic bread lines as well as biscuit plant, a fairly sizeable
cross-section of the population still prefers fresh bread from bakery. With growing population and
nutritional standards as well as demand for fresh, ready-to-eat convenience foods, the demand
for bakery items has also increased considerably. Bakery items include bread, biscuit, cakes and
pastries and these are consumed both as breakfast and snacks food.

MARKET POTENTIAL

A bakery unit can be set up in urban, semi-urban as well as in rural areas. Considering a semi-
urban centre with a population of one lakh (about 12 such centres in the region) it may be
conservatively assumed that about 40% i.e. 40,000 would consume bread and other bakery items
regularly. Taking the average family size as 5, the number of such households is estimated at
8,000. Assuming each household to consume on an average bread loaf of 400 gram per day
and 2 biscuit packets (50 pieces) per month, the demand potential for a population of 1 lakh is
estimated at 4,000 breads a day and 16,000 biscuit packets per month. Considering a typical unit
to produce 600 breads per day and 100 biscuit packets per day there would be scope for about 6
units in a semi-urban area with a population of 1 lakh. Keeping in view the population in the area,
entrepreneurs could suitably decide on the locations.

PLANT CAPACITY

The production basis for a typical unit would be as under:

Bread
Average weight 400 gm
Daily production 600 breads
Working days 300 days
Annual production capacity 1,80,000 loaves i.e. 72 tonne
Capacity utilization 70%
Annual output 50 tonne
Biscuit
Average weight of packet 50 pcs 250 gm
Daily production 100 packets
Working Days 300 Days
Annual production capacity 30,000 packets i.e. 7.5 tonne
Capacity utilization 70%
Annual output 5.25 tonne

RAW MATERIAL

The major raw materials required are wheat flour, yeast, vanaspati, sugar, milk powder, Yeast is
required for bread and not for biscuits. The annual requirement of raw materials is as under:

Wheat flour 36 tonne
Dried yeast 560 Kg
Sugar 2.30 tonne
Ghee 1.75 tonne
Milk powder 126 Kg.
Salt 840 Kg.
Edible colour, flavour, chemical etc.

SUGGESTED LOCATION :

Urben & semi urban areas in NER. Rumitek, Dentam, Brang, Somgochoo in Sikkim.
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PROCESS
The main process steps are:
Bread
i) Sifting of flour
ii) Preparation of suspension
iii) Preparation of dough by kneading all the ingredients.
iv) Fermentation of mixed dough
v) Dividing the dough as per size of loaf to be manufactured.
vi) Baking
vii) Cooling, slicing and packing.
Biscuit
i) Mixing of ingredients except maida in required proportion in paste form.
ii) Preparation of dough by mixing with maida.
iii) Placing in biscuit moulding and cutting machine.
iv) Baking
v) Cooling and packing.
MACHINERY
The major equipment required are:
i) Dough kneader (capacity 50 Kg/charge)
ii) Flour sifter
iii) Hand divider (capacity 400 gm. 500 800 loaves/hr.)
iv) Moulding machine (capacity 500 loaves/hr.)
v) Country type baking oven
vi) Bread slicer
vii) Platform weighing scale (100 Kg) and counter scale (2 Kg.)
viii) Dies (different sizes).
ix) Vessels, knives, etc.

INFRASTRUCTURE
The main infrastructural requirement are :
Shed 500 Sq. ft.
Power 1 K.W.
Water 1500 litre/day

TOTAL CAPITAL REQUIREMENT
The total capital requirement, including fixed capital and working capital is estimated at Rs.4.83
lakhs as follows. Of this, the project cost comprising fixed capital and margin money for working
capital is Rs. 4.28 lakhs.
A. Fixed Capital: (Rs. in lakh)
Land & Building (200 Sq.m.) On Rent
Plant & Machinery 2.34
Miscellaneous fixed assets 1.50
Preliminary and pre-operative expenses 0.15
________
Total (A) 3.99
=======
B. Working Capital:
Raw materials 1 Week 0.18
Packing materials 1 month 0.13
Working expenses 1 month 0.16
Receivables 1 Week 0.37
Total (B) 0.84
=======
Total (A) + (B) 4.83
Note: Working capital may be financed as :
Bank Finance Rs. 0.55 lakh
Margin Money Rs. 0.29 lakh
Rs. 0.84 lakh
==========
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MEANS OF FINANCE
Promoters Contribution(35%) .. Rs. 1.50 lakhs
Term Loan(65%) Rs. 2.78 lakhs
Rs. 4.28 lakhs
===========
OPERATING EXPENSES

The annual operating expenses are estimated at Rs.12.06 lakhs as given below:

Raw materials
Wheat flour 36 tonne @ Rs. 14000/tonne 5.04
Milk powder 126 Kg @ Rs.130/Kg 0.16
Sugar 2.30 tonne @ Rs.17/-per Kg. 0.39
Salt 840 Kg @ Rs..4/- per Kg. 0.34
Ghee 1.75 tonne @ Rs. 55/Kg. 0.96
Yeast 560 Kg. @ Rs.40/Kg 0.22
Edible colour, flavour, chemical etc. 0.50
Packing materials & Wrapping paper & Carton(L.S.) 1.50
Utilities (Power &Fuel) 0.60
Wages &Salaries 0.84
Rent 0.48
Other overheads 0.24
Selling expenses @ 5% on annual sales 0.08
Interest on term loan @12% 0.33
Interest on Bank Finance @ 15% for W.C. 0.08
Depreciation @ 10% on M/c. 0.30
12.06
====
SALES REALISATION

The current market price of a 400 gram bread is Rs. 13.00 while the market price of biscuits is in
the range of Rs.45 to Rs.55 per Kg. Providing for margins of distributors/retailers a net price of
Rs. 11.00 per 400 gram bread and Rs. 42 per kg of biscuit is considered.

On the above basis, the annual sales realization is estimated at Rs. 15.95 lakhs as under:

Sl.
No.
Products Annual
Production
Price
(Rs.)
Annual Sales
( in lakhs)
1. Bread 1,25,000 Nos. Rs.11/bread 13.75
2. Biscuits 5.25 tonne 42,000/ tonne 2.20
Total: 15.95

PROFITABILITY

Based on the sales realization and the operating expenses, the profit would be Rs. 3.89 lakhs
per year. This works out to a return on investment of 81%. The plant would break-even at about
26% of the rated capacity.

HIGHLIGHTS
The major highlights of the project are as follows:

tal Capital Requirement Rs. 4.83 lakhs
Promoters contribution Rs. 1.50 lakhs
Annual Sales realization Rs. 15.95 lakhs
Annual operating expenses Rs. 12.06 lakhs
Annual profit (pre-tax) Rs. 3.89 lakhs
Pre-tax return on sales 24%
Break-Even Point 26%
No. of persons employed 4
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MACHINERY SUPPLIERS

1. M/s. B.Sen Barry & Co.,
65/11, Rohtak Road,
Karol Bagh,
New Delhi 110 005

2. M/s. J.C. Das & Brothers,
33/8, Ananth Nath Dev Lane,
Belgachia,
Kolkata 700 003

3. M/s. Nagpal Brothers,
2789, Hamilton Road,
Delhi 110 006
4. M/s. Oriental Machinery (1919) Pvt. Ltd.,
25, R.N. Mukherjee Road,
Kolkata 700 001

5. M/s. Raylons Metal works,
J.B. Nagar,
Kondivitta Lane,
Andheri,
Mumbai 400 059

6. M/s. Gee Gee (Foods & Packaging) Co. (P) Ltd.,
B 188/2 Savitri Nagar (Malviya Nagar),
New Delhi 110 017