Feasibility study-Wheat Milling plant

Date- 6th Oct2013

Devpriya Sarvepalli

Sourcing of Wheat Wheat can be sourced from Australia, North

America, Black Seas, India, Russia, Kazhakistan etc. Wheat price depends on the quality of seeds. And

quality is determined by protein content, Higher the protein content, higher the price The commodity price can be monitored at global

indexes eg. Australian wheat board (AWB) The price depends on demand and supply Other factors which influence the prices are

exchange rate, weather conditions, gold and oil prices

The best sourcing option is to tie up with big commodity houses like Louis Dryfus, Cargill, Olam International, who will procure directly from the farmer and sell it

Current Market price of wheat Highest quality wheat will have 16.5% or

more protein French wheat is considered as lowest

quality wheat with protein content of 9-10% Current Market rate of wheat-Protein content (11.5-12%)- 300$/tProtein content (9-10%)- 250$/t

About the Machinery Buhler is the most popular supplier, but the prices are

almost double compared to other suppliers Other suppliers are from Turkey and China There is no much difference between the machineries of

Buhler and other suppliers The average life of Buhler can go upto 40-50 years while

Chinese Machinery will work upto 20 years only Maintenance also is higher in Chinese and Turkish

Machineries Plant capacity is 300T/Day ie. 300T of wheat seeds per

day. Plant is divided into different lines Machine will work all the 3 shifts- 24hrs for 6 days a

week.

Maintenance Three types of maintenance-a. Preventive maintenance- weekly onceb. Overhaul- Annual Maintenace- mostly

during chritsmas holidays (takes 3-5 working days)

c. Repairs- every line manager will try to reduce this as much as possible

Timeline to set up the facility Actual project may take 1yr-1.5 yrs

depending on the influence of the client

The practice is that once advance money is paid to the supplier of machineries, then the real work starts at the supplier’s end

Pre requisites Key factor is accessiblity to silos, near to

port Labour supply Continuous sourcing of wheat seeds

Different stages in milling

Cleaning

Conditioning

Gristling

Milling

Sifting and Packaging

Extraction Rate The extraction rate of the product depends on

the protein content of wheat More protein content, better extraction rate Typically extraction rate varies between 75-

80%. Extraction rate also depends on miller’s capability

Rest 20-25% of the byproducts will contain Bran (22%) and other impurities (3%)

Bran is very useful byproduct which is used by feed industry

Per hr output would be around 12.5T (300T/24HRS= 12.5 t/Hr)

About the product Flour grade depends on the combination of 3 factors-

Protein+ash content+granulation Ash content refers to the presence of Bran, lower ash

content-whiter flour, more ash content- brownish flour When 100% of wheat seeds are milled, it gives chapati

atta If outer skin is separated, then the flour will have lower

ash content and the resulting byproduct will be Bran Custom made flour is made as per the client’s order by

considering 3 factors-protein content, ash content and granulation

Continue… Low protein flours are cheaper and so in

high demand But milling of both high and low quality

wheat is necessary so as to get correct combination

The process of mixing both high and low quality wheat can be done in 2 ways-

a. Mix wheat seed before millingb. Mix wheat flour after milling in specific

combination to get desired consistency

Packaging Two types of packaging-a. Business users (B2B)- 50 Kgs bag. Very

plain package. It costs around 0.4-0.5% of total product of tocost

b. Retail customers (B2C)- 5kgs, 2kgs and 1 kg bag. Package is attractive, and re-sealable bags. It costs around 2-2.5% of total product cost

Storage The silos capacity is 150,000T On an average twice in a month loaded

ships of wheat arrives at these silos Wheat seeds can be stored at room

temerature for 2-4 months and it should be circulated once every 2 months

The final products are normally not stored beyond 2 weeks. So, storage room is not necessary for final products.

Controlled temperature of 20-25 C is needed to store flour.

Certification QA team at the silos continuously testing the

products Government authority inspects incoming

material For final product, municipality will do some

surprise visit once in a while R&D team will test the final product every time

Waste management Biggest byproduct is bran which goes to

animal feed mill Rest all other wates are disposed in

environmentally phased manner

Market Information Local market constitues 95% share, only 5%

is exported to other countries There is no specific country for export. Only standard product offerrings are

exported (no customozation for export) Local market complete customized products Most of the customers are bakers,

conectioners and catering houses, agents Now ventured into retail segment as well –

Carrefour, lulu etc.

Manpower Requirement Operational levelIf machine is basic equipment-then 3 categories of labour needed-a. Skilled labour- they are called supervisor or line

supervisor. They do planning, organizing and directing the team

b. Semi skilled- maintenance, preventive manitenance work, managing silos etc.

c. Unskilled – baggaing, cleaning the mill etcIf machine is highly automatic, then only skilled labours are needed Thumb rule is for every100T-15 labours are needed out of which 10% supervisor (skilled), 25% semiskilled and rest can be unskilled labours

Continue… Equation goes like this 1st 100T- 15 Labours2nd 100T- 12 Labours3rd 100T- 10 Labours

So maximum 40 labours are needed to run a 300T/Day plant capacity. Out of which4- Skilled labour10-semiskilled26- unskilled

Organizational structure

Plant Manager

Production Team

Labours R & D Analyst

Supply chain Team

Warehouse Procurement

Market analyst Distribution

Finance Team

Sales and Marketing Team

Total Manpower requirementDesignation Number Salary per month

Plant Manager 1 30,000

Supply chain manager 1

Procurement 2

Technical analyst 1

Plant Supervisor 4

Semi skilled labours 10 2000x10= 20,000

Unskilled labours 25

Maintenace Team 2

R & D analyst 3

Sales and Marketing 4

QA team 3

Warehouse manager 1

Distribution team 10

Other cost Major cost –A. Wheat seedsB. Labour All other costs are 9% of total

manufacturing cost*Please refer to the excel for detail cost analysis

Thank You