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Home Resource Hub Information Arecanut Project Arecanut Leaf Plate Manufacturing Project Proposal
Arecanut Leaf Plate Manufacturing Project Proposal

1. Background

The Arecanut palm is one of the important commercial crops of Assam. Though the betelnut is used widely in various forms yet the sheath attached to the leaf of arecanut tree is not used for any productive purpose at present. It is a hard material and has good tensile strength and is available in abundant in most parts of Assam. Arecanut sheaths (extension of the leaf) can be utilised for manufacturing disposable plates and bowls. Such plates are being produced in South India since the last 7 years and sold commonly in the market .Dhriiti,a national level NGO, has been working on this product in the Assam since the last 3 years. Presently 39 units promoted by Dhriiti in Barpeta, Baska, Bongaigoan, Karbianglong, Jorhat and Golaghat district of Assam are producing and selling these products successfully.

2. Product

The product to be manufactured is plates and bowls of different shapes and sizes made out of arecanut sheaths. These disposable utensils can be used for serving and eating food. Some of the qualities of the products are as follows:

  • Completely Eco-friendly, Biodegradable and Hygienic.
  • Sturdy and not easily crushable and at the same time very light in weight.
  • Microwave usable.
  • Can be easily moulded into different shapes and can hold liquid for 4-6 hours.
  • Natural and attractive appearance.
 

3. Raw Material Availability

There are more than 70000 hectares of arecanut plantation in Assam. Around 10 sheathes fall from each arecanut plant every year. Thus there is abundant raw material availabile  inAssam to produce these plates. The following table shows the raw material potential in Assam.  Table 1: Raw Material supply potential in Assam

Sl.No. Particulars Quantity/Area
1 Total plantation of Arecanut in these Areas (in Hectares) 70,542
2 Total plantation of Arecanut (in Bighas) 5,29,065
3 Approximate no. of trees per bigha 200
4 Total no. of Arecanut trees 10,58,13,000
5 Approximate no. of sheaths per tree 10
6 Total no. of sheaths available 1,05,81,30,000
7 If 30% of this resource (arecanut sheaths) can be tapped 31,74,39,000
8 No. of sheaths required in each unit per year 1,00,000
9 No. of manufacturing units that can be set up 3174
 

As evident from the table above there are enough raw materials in this region to set up more than 3000 manufacturing units even if 30% of the raw material can be tapped.  

4. Production Process

The plates can be produced easily using a heat-press machine, which can be procured from Howrah. The machines can be operated by both gas and electricity. The entrepreneurs need to collect the raw material (arecanut sheaths), sun dry them and store them before production. The sheaths can be stored for 9-12 months without damage. Dhriiti has trained the candidates to manufacture these plates and would also provide technical and marketing support after they set up their units. 

5. Market

This product is an excellent substitute for thermocol and plastic plates which has huge demand in the market. There is also a large unsatisfied demand for bio-degradable disposables in the food service industry. Dhriiti aims to leverage this business opportunity for the benefit of the rural masses.

The present producers of arecanut leaf plate along with Dhriiti has formed a marketing company named Tambul Plate Marketing Company(TPMC).TPMC provides 100% buy back guarantee of products to all producers. In the last six months TPMC has produced and sold more than 2 lakh products. TPMC not only market the product within North East but has also supplied to Kolkata and Delhi.TPMC has received very good response from the market and is presently unable to meet the demand of the market.TPMC has presently the capacity to sell products manufactured by atleast 50 units.

  • Wholesalers in Guwahati ,Dimapur and Shillong havee huge demand for the big plates.
  • Sweet shops like Rameswars in Guwahati are also procuring the small katori.
  • Temples are a huge market for this product. Sri Balaji Temple, Dolgobindo, ISKON temple and Satsangh in Guwahati are ready to purchase this product.
  • Delhi and Kolkata are also  have demands for quarter plates and small katories .
  • This product can be sold at a premium in national parks and many hill stations like Gangtok, Shillong and Siliguri in the North East where in usage of plastic is banned.

 
Scheme for Arecanut Leaf Plate Manufacturing Unit
Sl.No. Particulars Amount(Rs) Amount(Rs)
A Fixed Capital    
1 Machinery   59856
2 Building    
               (a) Machine Room 18870  
               (b) Storage Room 26906  
               (c)  Foundation 6010  
               (d) Water Tanks 3420 55206
3 Other Equipments & Material    
                   (a) Hand Pump (Equipment & Labour) 3000  
                  (b) Miscellaneous Furniture & Fixture 1500  
                  (c) Thela 2000 6500
4 Preliminary & Pre-operative Expenses    
                 (a) Gas Connection 2400  
                  (b) Insurance 1180  
                  (c) Other out of Pocket expenses 1000 4580
  Total Fixed Capital 126142
       
B Working Capital    
1 Raw Materials 5104  
2 Manpower 4000  
3 Gas Cylinder( 3 cylinder @ Rs 350) 1050  
4 Packaging material (plastic) 977  
5 Sales Expenses (5% of selling price) 846  
6 Admin &  Maintenance expenses 600  
7 Interest rate 1283  
  Total Working Capital 13860
       
C Total Fund Required    
1 Fixed Capital   126142
2 Total Working Capital   13860
  Total Fund 140002
       
D Means of Finance    
1 Own Contribution (5%)   7000
2 Bank Loan (95%)   133002
  140002
 
 
 
Profitability
Sl. No. Particulars Amount/Quantity
1 Annual Production (300Days) 2,78,400
2 Average Variable Cost of Production per piece 0.42
3 Average Selling Price per piece 0.73
4 Annual Fixed Cost 34,600
5 Annual Projected Turnover 2,03,232
6 Annual Projected Profit 51704
 

* See annexure 1 for machinery detail.

* See annexure 2 for building detail.

* See annexure 3 for working capital and profitability. 
 

                                                                                      

Annexure 1 

Cost of Machinery
Sl. No. Particulars No of Units Price per Unit (in Rs.) Cost (in Rs.)
1 Machine Frame (Double Pillar Screw Press) 2 16100 32200
2 250 mm Die Set (Big Plate) including coil & cutter 1 6600 6600
3 175 mm Die Set (Quater Plate) including coil & cutter 1 4400 4400
4 125 mm Die Set (Katori) including coil & cutter 1 3850 3850
5 Tool Kit (Foundation bolt, Wrench, gloves, hammer etc.) 1 1050 1050
6 Packaging Cost (Wooden box for each frame) 2 800 1600
7 Sub Total     49700
8 Sales tax@10% (if registered party then it would be 2%)     4970
9 Sub Total     54670
10 Road Permit (4% of bill value)     2186
11 Transportation Cost (approx) 2 1500 3000
12 TOTAL 59856
 
 

Annexure 2

(a)Machine Room: A 12 ft x 10 ft room with concrete posts, concrete floor bamboo/ikra base wall and tin corrugated sheets on the roof.

Sl.No. Material Quantity/Unit Rate Amount
1 Concrete Posts 4 pieces 550 2200
2 Tin Corrugated Sheets 10 sheets 320 3200
3 Bamboo (for posts) 6 pieces 40 240
4 Ikra 0 0 0
5 Tarza ((10*9*2)+(12*9*2)) 397  sq.ft. 3.5 1390
6 Wood 12  kb 250 3000
7 Bricks 400 pieces 4 1600
8 Cement 8  bag 300 2400
9 Sand 2 cu.m 500 1000
10 Stones 1 cu.m 800 800
11 Soil (Mitti) Approx 800 800
12 Equipments Approx 500 500
13 Skilled Labour (Mason+Wood) 8 mandays 130 1040
14 Unskilled Labour (Mason+Wood+Bamboo) 10 mandays 70 700
15 Total 18870
 

(b) Store Room: A 12ft. X 30 ft. room with concrete posts, sand floor, bamboo/ikra based walls. The roof should be primarily made of tin corrugated sheets but little bit of fibre/plastic (transparent) corrugated sheets should also be used. It should also have a bamboo platform for keeping the raw material.

Sl.No. Material Quantity/Unit Rate Amount
1 Concrete Posts 6  pieces 550 3300
2 Tin Corrugated Sheets 28  sheets 320 8960
3 Fibre Corrugated Sheets 2  sheets 790 1580
4 Bamboo (for walls & roof) 8  pieces 40 320
5 Ikra 0 0 0
6 Tarza ((30*9*2)+(12*9*2)) 756 sq.ft. 3.5 2646
7 Wood 25 kb 250 6250
8 Sand 0 0 0
9 Soil (Mitti) approx 0 1000
10 Bamboo (for platform) 18 pieces 40 720
11 Equipments Approx 700 700
12 Skilled Labour (Wood) 4 mandays 130 520
13 Unskilled Labour (Wood+Bamboo) 13mandays 70 910
14 Total 26906
 
 
 
c) Foundation: 2 concrete foundations for installing the machines.
  •  
      ü  Height: 1.5ft below the floor and minimum 3ft. above the floor, total 4 ft.
            ü  Breadth: 80 cm
            ü  Length: 100 cm           
Sl.No. Material Quantity/Unit Rate Amount
1 Cement 6bags 300 1800
2 Bricks 600pieces 4 2400
3 Sand 30tin 20 600
4 Stone 27tin 30 810
5 Skilled Labour (Mason) 2 mandays 130 260
6 Unskilled Labour 2 mandays 70 140
  7 Total 6010
 

    (d) Water Tank: 2 concrete water tanks for washing sheaths. Dimensions are 4ft.X4ft.X2ft. (L*B*H). The walls should be of 3 inch. 

Sl.No. Material Quantity/Unit Rate Amount
1 Cement 4bags 300 1200
2 Bricks 375 pieces 4 1500
3 Sand 10 tin 20 200
4 Stone 4 tin 30 120
5 Skilled Labour 2mandays 130 260
6 Unskilled Labour 2mandays 70 140
7 Total 3420

 

 

Annexure 3
General Information
Sl. No. Particulars Quantity/Amount
1 Working Hours in a day (Machine Hours) 8
2 No. of working days in a month 25
3 Cost of Gas Cylinder 350
4 No. of hours a cylinder works 110
5 No. of Direct Labour (Machine workers) 2
6 No. of Indirect Labour (Packaging etc.) 1
7 Direct Labour Wages per month 1500
8 Indirect Labour Wages (Unskilled) per month 1000
9 Cost of Raw Material per piece 0.5
10 Sales Expenses as % of Selling Price 5%
11 Initial Investment (Loan Amount) 140002
12 Interest rate 11%
13 Admin expenses per month 300
14 Maintenance per month (in Rs.) 300
15 Cost of 1kg packaging material (plastic) 140
16 No. of small packets in 1kg packaging material (5”) 250
17 No. of medium packets in 1kg packaging material (8”) 130
18 No. of large packets in 1kg packaging material (10”) 75
19 Selling price of 5” Katori 0.35
20 Selling price of 8” Quarter Plate 0.7
21 Selling price of 10” Rice Plate 1.5
22 Time taken to produce one 5” Katori (in seconds) 50
23 Time taken to produce one 8” Quarter Plate (in seconds) 60
24 Time taken to produce one 10” Rice Plate (in seconds) 90
Variable Cost Calculation
Particulars 5" Bowl 8" Plate 10" Plate Total/Avg
Machinery & Capacity Utilisations
Time taken to produce 1 piece (in sec) 50 60 90  
Production per hour (in pieces) 72 60 40  
No. of machines 0.5 1 0.5 2
Production per day (in pieces) 288 480 160 928
Production per month (in pieces) 7200 12000 4000 23200
Annual Production (in pieces) 86400 144000 48000 278400
Cost of Energy (Gas Consumption)
Production per hour (in pieces) 72 60 40  
No. of working hours of a cylinder 110 110 110  
Production in total working hours of a cylinder 7920 6600 4400  
Cost of cylinder 350 350 350  
Cost of Gas per piece 0.04 0.05 0.08 0.05
Cost of Raw Material
% of Raw Material Used for producing 1 piece 20% 33% 50%  
Cost of 1 raw material 0.50 0.50 0.50  
Cost of RM for producing 1 piece 0.10 0.17 0.25 0.16
Cost of Direct Labour
Production per month 7200 12000 4000  
No. of Labour required to produce 1 1 1  
Time allocation of labourer in percent 50% 100% 50%  
Monthly Wages of Labour 1500 1500 1500  
Monthly Cost of Labour 750 1500 750  
Cost of Direct Labour per piece 0.10 0.13 0.19 0.13
Cost of Packaging
Cost of 1 kg packaging material (in Rs.) 140 140 140  
No. of packets in 1 kg 250 130 75  
No. of pieces in 1 packet 25 25 25  
No. of pieces that can be packaged in 1kg 6250 3250 1875  
Packaging Cost per piece 0.02 0.04 0.07 0.04
Sales Expenses (Secondary Packaging & Transportation)
Selling price per piece 0.35 0.70 1.50  
% of Sales Expense 5% 5% 5%  
Sales expenses per piece 0.02 0.04 0.08 0.04
Total Variable Cost & Operating Margins
Cost of Energy 0.04 0.05 0.08 0.05
Raw Material Cost 0.10 0.17 0.25 0.16
Labour Cost 0.10 0.13 0.19 0.13
Packaging Cost 0.02 0.04 0.07 0.04
Selling Cost 0.02 0.04 0.08 0.04
Total Variable Cost (TVC) 0.29 0.42 0.67 0.42
Selling Price (SP) 0.35 0.70 1.50 0.73
Operating Margin (SP – TVC) 0.06 0.28 0.83 0.31
 
 
 
Annual Fixed Cost
1 Indirect Labour Cost 12000
2 Interest on Loan 15400
3 Annual Maintenance Cost 3600
4 Annual Administration Cost 3600
5 Total 34600
Annual Profitability
1 Sales Revenue 203040
2 Total Variable Cost 117547
3 Total Fixed Cost 34600
4 Annual Profit 50893
Break Even Point
1 Monthly Fixed Cost 2883
2 Operating Margin 0.31
3 Break Even Point 9389
4 Break Even Percentage 40%
 
 
 
Note: Out of 2 machines one will always have the 8” quarter plate die attached and the other  will be utilised equally between 5’’ bowl die & 10’’rice plate die. Thus there is one machine for 8’’ quarter plate and half a machine for 5’’bowl and half a machine for10’’ rice plate.
 
 
Monthly Working Capital
Sl.No Particulars Rate Quantity Amount
1 Cost of Raw material @ Rs.0. 50 per sheath 0.5 10208 5104
2 Cost of Direct Labour 1500 2 3000
3 Cost of Indirect Labour 1000 1 1000
4 Cost of Gas Cylinder 350 3 1050
5 Packaging material (plastic) 0.04 23200 977
6 Sales Expenses (5% of selling material) 0.04 23200 846
7 Admin expenses 300 1 300
8 Maintenance 300 1 300
9 Interest 15400 12 1283
10 Total 13860