You are on page 1of 13

A Project Report

TUBE ICE PLANT

Submitted to
Prof. Padmavathi
IFIM Bschool

By
Attada Ekalavya
V.Harsha
V.V.Hareesh
Group 8, PGDM 2010-12, Section-B

January 3, 2011
TABLE OF CONTENTS
1

S. No.
1
2
3
4
5
6
7
8
9
10

CONTENTS
INTRODUCTION
MARKET POTENTIAL
TUBE ICE MARKET
ECONOMIC SIZE OF UNIT AND LAND
REQUIREMENTS
BASIS AND PRESUMPTIONS
IMPLEMENTATION SCHEDULE
BUSINESS PLAN
SWOT
TECHNOLOGY
ASPECTS
FINANCIAL ASPECTS

PAGE
3
3
4
4
5
5
5
6
7
8

INTRODUCTION
2

Visakhapatnam is a major port and the second largest city in the


state of Andhra Pradesh on the east coast of India. Visakhapatnam
fishing harbor is one of India's main fishing ports, has a dedicated
harbor for the fishing industry and handles a large percentage of
India's seafood exports.
The fishing industry is also on the rise with both foreign and
domestic exports of tuna doubling over the past decade. The tuna
fishing season starts in November and ends by February. Last
season, about 60 trawlers, 100 mechanized boats and nearly 1,000
small boats were engaged in the business from the Visakhapatnam
fishing harbor. This harbor was once famous for tiger shrimp
catches, which has a good market internationally. Over 100 trawlers
and 800 mechanized boats were used for this. All types of fishing
boats were used in the last season bringing about 12,600 ton tuna
fish. Murthy told Business Standard that operators got Rs 100 on a
kg. In the international market, a kg of A-grade fish (each fish
weighs more than 20 kg) fetches Rs 300 while the B-grade variety
gets Rs 150-170.We are selling our product to a Kerala-based tuna
export company due to lack of landing and storage facilities at
Visakhapatnam. Last season, the average catch of each trawler was
nearly 40 tones of tuna while for mechanized boats it was about 22
tons each, according to YGK Murthy, president of the Association of
Indian Fisheries Industry (AIFI). Small fiberglass boats also caught
around 8-10 tones of tuna each during the season. The volume of
seafood exports through Visakhapatnam Port has increased to 26,
637 tone in 2001 02, according to the figures compiled by the
Marine products Exports Development Authority (MPEDA).
This document endeavors to provide information on various broad
technical and financial aspects of a cold storage unit to enable the
financing banks to finance for the formulation and implementation
such projects.

MARKET POTENTIAL
This is a project on Tube ice manufacturing of 20 Tons per day
capacity, the location is within the Visakhapatnam Port Trust
jurisdiction and close proximity to the Fishing Harbour, the daily
consumption of Ice is 40 Tons per day and there are 5 units
manufacturing Block Ice of Size 100kg and are able to satisfy the
demand for ice up to 30 tons approximately.
Setting up a plant would have continuous production as
compared to batch production of Block Ice. The peak demand time
is 4 AM 9Am and 2PM 6PM; the ice is used to store fish on the
Fishing trawlers and for transportation within the country. Its
adjoining areas are already running many such industries with full
capacity and getting very good sales in the area with increasing
demand.
3

TUBE ICE MARKET


1. Hotels, Restaurants, Bars, Flight Kitchens, Catering.
2. Concrete Cooling: Mixed into the cement to achieve a better
process of hardening and thereby improving the cement
quality.
3. Chemical Industry Processes: Is of better quality than
actually the water it is made up of since the impurities present
in the water are moved to the centre of the ice tube and
discharged during defrosts ensuring that clean, crystal ice
tubes are formed. Hence it improves the quality of the end
product
when
used
as
a
cooling
agent
during
chemical reactions. Also it do not cause adverse effect on
chemical/dye vessel thereby prevents damage to the vessel
lining.
4. Food Production Processes: Used in poultry, red meat and
sausage plants to retard heat build-up, bacteria and
salmonella growth as well as to prevent water weight loss
during shipment. It can also be used for preserving fruits and
vegetables.
5. In the bakery industry it is used to mix ingredients,
eliminate moisture and to keep yeast from working until the
appropriate time.
6. Fishing Industry: Cooling fish on board fishing vessels.
Maintaining the freshness of fish during storage and land
transportation.
7. Cold Accumulation.
8. Mining, Construction and a variety of laboratory and
medical applications.

ECONOMIC SIZE OF UNIT AND LAND REQUIREMENTS


1. Land to be allocated by VPT at the rate of Rs 275/Sq.mts.,
requested area for the project is 3000sq.mts.
2. Power to be sourced from APTRANSCO with a deposit of Rs.
5000 per KV, required power 100 KV.
3. Tube Ice machine to be ordered from the manufacturers, lead
time 40 days after full payment.
4. Water is sufficiently available in the location itself through own Tube - Well.

5. As the unit is located just in side of the fishing harbour,


therefore, adequate transport facility exists for transportation.
6. The skilled and unskilled labour will be easily available in the
area itself & surrounding. Suitable housing facilities also
4

available in the area and hence, the factory staff will not face
any housing problem.

BASIS AND PRESUMPTIONS


The cost of production and profitability of the project for its first
seven operating years is calculated which is presented later on.
The various assumptions made for the calculation of cost of
production and profitability is listed below:
1. The unit will work for 180 days on double shift basis in a
year.
2. The capacity utilisation has been assumed at 60% in the first
year, 70% in the second year, and 80% in the third year
onwards.
3. The sales prices are considered at ex-factory basis, based on
prevailing market prices.
4. The cost of raw materials has been assumed at F.O.R. work
basis. Any increase in cost of raw materials will be passed
over to the consumers of the finished goods.
5. The details of manpower and wages are on the basis of
industry practice.
6. Employees benefits have been taken at 10% of wages and
salaries, which include benefits, house rent, gratuity, paid
leave etc.
7. Every year an increase of 10% / 5% has been assumed.
8. The interest on term loan has been taken @ 13.50% per
year.
9. The sales expenses and sales commission have been taken
@ 5% sales.

IMPLEMENTATION SCHEDULE
The approximate time required for various activities is given below.
However, it may vary from place to place depending upon the local
circumstances and on the enthusiasm of the.
Entrepreneurs:
Selection of Site
Preparation of Project Report

1 month
1 month
5

Registration as SSI/Other
legal formalities
Availability of Finance
Machinery procurement,
Erection and commissioning

15 days
3 months
2 months

BUSINESS PLAN
Tube Ice will be provided to the fishermen. The facility will be
located at place which is easily assessable. The Ice would be able to
provide a wide range of storage of different fish at the same time.
Skilled labour would be employed to provide best services.

SWOT ANALYSIS

STRENGTHS: Tube Ice plant gives better energy and cost


efficiency than traditional Ice plants.
WEAKNESS: As new entrant, and other competitors in market
has already achieved their Break Even.
OPURTUNITIES: Demand for Ice in the Market
THREATS: Existing Competitors in the market

TECHNOLOGY
1. SALIENT FEATURES:

Capacities offered: 20 TPD


Tube ice dimensions: 1 1/8 diameter
Design/Engineering simplicity
No requirement of skilled workers
High durability, minimum maintenance
High energy efficiency
Prompt service
Complete spare parts provided

2. MACHINE COMPONENTS:

Stainless steel tube ice machine.


Water Distributors: Made up of elastic material which
creates a continuous uninterrupted peripheral seal between
the tube ends and water distributor.
6

Accumulator with insulation


Refrigerant: Ammonia
Float switch
Freezer: Of high quality stainless steel for all water and ice
contact surfaces providing corrosion resistance and easy to
clean
Cutter: Stainless steel cutters driven by gear motors are
uniquely designed to produce both cylindrical and crushed ice
simply by reversing the motor of the cutter using a switch on
the control panel that controls this function
Cutter Motors: Built with heavy duty design to give years of
reliable ice-sizing service.
Pumping Tank (Water Pumps): Centrifugal cast in iron
pump large enough to circulate many times the quantity of
water to be frozen producing crystal clear ice crystals.
Heavy-duty compressor.
Control Panel: Gives use access to the automatic electrical
system, which performs sequences for freezing and thawing
precisely and dependably year after year.

3. ADVANTAGES:

Highest electricity efficiency: Only 47 units per ton of ice


versus more than 90 units for flake ice.
Lowest operating cost: Production efficiency without brine
solution cans etc; using direct refrigeration principles.
Lowest space to production ratio: Only 100sq.ft. Required
for 40 TPD machine making this machine one of the most
sought after ice machines where land and building is
expensive.
Minimal maintenance: Machines are known to run with
minimal or no maintenance due to inherent plant design and
since only world class indigenous components is used.
Flexible batch cycle: Ice batch in less than 20 minutes
ensures no wastage of electricity and thus allows for
production planning.
Overall lowest investment: Net present value is greater
than flake or block ice plant.
Quality ice: The quality of ice is actually better than the
water it is made since the impurities present in the water are
moved to the centre of the ice tube and discharged during
defrost ensuring that clean, crystal ice tubes are formed. On
the other hand, block ice is manufactured using the outdated
method of salt water brine chilling. Due to the leaking of ice
cans, typically the block ice contains a high degree of salinity
which has an adverse effect on the concrete structure.
Uniform melt age: Being consistent in shape the tubes melt
at an equal pace providing an uniform cooling medium.
Variance in flake sizing: Using our customized on-line tube
ice flakers, flake ice can be produced at a required thickness
allowing for present and future variance in flake sizes.
7

Labour cost savings: Due to minimal manpower expense


related to ice crushing and wastage along with accurate and
consistent weight the overall labour expenses are significantly
lower.

4. POLLUTION CONTROL

There are no harmful effluents in the process. However, NOC


may be taken from the concerned State Pollution Control
Board.

5. ENERGY CONSERVATION

Proper insulation
heat/temperature.

should

be

given

to

avoid

loss

of

FINANCIAL ASPECTS
Assets of company
S.N
o.

1
2
3
4
5
6
7
1
2
3
4
5
6
7

Discription
Land and Building
Land 3000 sq.mtr.@ Rs. 280 per sq. mtr.
Machine Room 12m 10m 4m
D.G. Room 8m 4m 4m
Bore Well
Administration 10m 4m 3m
Stair Case
Furniture
Machinery and Equipment
Generator 125 KV
High Pressure Pump-Cleaning
Electricity Panelling / Control Station
Misc Land levelling / Civil works
Electricity Deposit
Water Storage Tanks
Tube Ice Plant
Grand Total

Amount
INR 2,110,000.00

INR 1,535,000.00

INR 3,645,000.00

RECURRING EXPENSES
EMPLOYEES SALARIES
Sl
no.

Numb
er

Designation

Manager

Maintenance Supervisor

Storekeeper

Accountant

Skilled Workers

Unskilled Workers

Watchman

2
Total
Perquisites @ 15%

11

Salary
6,000.0
0
5,000.0
0
4,000.0
0
5,000.0
0
2,000.0
0
1,600.0
0
1,600.0
0
25,200.
00

Total
DEPRECIATION
Depreciation on building @ 8%
Depreciation on machinery @ 10%
Depreciation on Furniture @ 20%
Interest on total investment @
13.5%

Amount
6,000.00
5,000.00
4,000.00
5,000.00
2,000.00
6,400.00
3,200.00
31,600.00
8,280.00
INR
39,880.00
5.61
7.75
0.20

Total
INSURANCE
TOTAL RECURRING EXPENSES

31.87
45.43
INR
30,000.00
INR
69,880.00

VARIABLE EXPENSES
Raw Material
Water 5000 KL @ Rs. 10/KL
Add back of Salt and Ammonia
Utilities
Power @ 80%
Fuel
Other Contingent Expenses
Postage and stationery
Telephone
Consumable stores
Repair and maintenance

INR 600,000.00

INR 318,432.00

INR 100,000.00

Transport
Insurance
Miscellaneous
INR
1,018,432.00

TOTAL VARIABLE EXPENSES


FIXED EXPENSES

INR
3,365,000.00

Machinery and Equipment


Generator 125 KV
Pump Suction
High Pressure Pump-Cleaning
Electricity Panelling / Control Station
Electricity Deposit
Water Storage Tanks
Land and Building
20 TPD ICE Plant
Installation / Erection

INR
2,110,000.00

Land and Building


Misc Land levelling / Civil works
Land Deposit
TOTAL FIXED EXPENSES

INR
5,475,000.00

Fixed Capital
Sl
no.
1

Land and Building


Land 3000 sq.mtr.@ Rs. 280 per sq.
mtr.

2
3
4
5
6
7

Machine Room 12m 10m 4m


D.G. Room 8m 4m 4m
Bore Well
Administration 10m 4m 3m
Stair Case
Furniture

Total
1,400,000.00
120 Sq.
Mts.
32 Sq. Mts.
L.S.
40 Sq. Mts.
L.S.

2500/Sq.Mts.
2500/Sq. Mts.
3000/Sq. Mts.

300,000.00
80,000.00
30,000.00
120,000.00
150,000.00
30,000.00

10

Total
8
9
10
11
12
13
14

Machinery and Equipment


Generator 125 KV
High Pressure Pump-Cleaning
Electricity Panelling / Control Station
Misc Land levelling / Civil works
Electricity Deposit
Water Storage Tanks
Tube Ice Plant

1
1

5000 Lts
10 TPD
Total
GRAND
TOTAL

2,110,000.0
0
800,000.00
60,000.00
50,000.00
100,000.00
500,000.00
25,000.00
18,00,000.00
1,535,000.0
0
3,645,000.0
0

Working Capital
I
Sl
no.
1
2

Personnel
Designation
Manager
Maintenance Supervisor

Numbe
r
1
1

Salary
6,000.00
5,000.00

Total
6,000.00
5,000.00

11

3
4
5
6
7

Storekeeper
Accountant
Skilled Workers
Unskilled Workers
Watchman
Total
Perquisites @ 15%

1
1
1
4
2
11

4,000.00
5,000.00
2,000.00
1,600.00
1,600.00
25,200.00
Total

II
1
2

Raw Material
Water 5000 KL @ Rs. 10/KL
Add back of Salt and Ammonia

QTY
10

Rate
5,000.00
Total

III
1
2

Utilities
Power @ 80%
Fuel

Usage
115200

Rate
2.66
Total

IV
1
2
3
4
5
6
7

Other Contingent Expenses


Postage and stationery
Telephone
Consumable stores
Repair and maintenance
Transport
Insurance
Miscellaneous

Working Capital (per month)

Total
TOTAL
CAPITAL
Genral Reserve

4,000.00
5,000.00
2,000.00
6,400.00
3,200.00
31,600.00
8,280.00
39,880.00
Amount
50,000.00
10,000.00
60,000.00
Amount
306,432.00
12,000.00
318,432.00
Amount
2,000.00
3,000.00
15,000.00
15,000.00
20,000.00
30,000.00
15,000.00
100,000.00
518,312.00
INR
4,163,312.00
INR 836,688.00

Estimated Market Projections


PRESENT MARKET
S.no.
1

Discription

Ice Requirement in fishing harbour


in tons

Requir
ed

45

Availab
le

30

12

PRESENT MARKET PRICING

Market Price / Ice Block


1
S.no.

20

Sale expected per Day in tons

ESTIMATED MARKET SALE


Discription

Harbo
ur

Plant

INR
130.00

INR
86.90

Qty

Rate

Sale expected per Day

10000

130

Discounted price
PRODUCTION COST

10000

100

Productions

10000

Price
INR
1,300,000.00
INR
1,000,000.00
INR
869,000.00

13