A Product Project Report on

City Bakery Prepared by Roll No. Seat No. :::Mordiya Manoj M. 23 2006-07

Academic Year : -

-:Collage:Smt.M.T.Dhamsania College, Rajkot. -:Submitted To: Saurashtra University, Rajkot. Guided by: - Dr. Manish Thaker

DECLARATION
I, the undersigned, Mordiya Manoj M. a student of T.Y.B.B.A. hereby declare that the project work presented in this report is my own work and has been carried out under the supervision and guidance of Dr. Manish Thaker from Smt.M.T. Dhamsania Collage. This work has not been previously submitted to any other university for any other examination.

Date: Place: (Mordiya Manoj M.)

PREFACE
SSI is a pillar of Indian economy. Most of the businesses carried out in china are those of small-scale units. In India due to liberalization and globalization the competition has increase and a severe blow has to be faced by SSI of India and thus most of the small-scale units are paralyzed. Today there is a need for substituting the traditional management techniques by the scientific system of management proper implementation of such a technique provides necessary impetus to SSI in the right direction at the right time. I am extremely happy to submit this project report on a small scale unit under the prescribed syllabus of Saurashtra University Rajkot. The preparation of a Product Project Report is a modest way of helping students to develop entrepreneur skills, ability and aptitude. Making this report I got a golden chance to acquire practical knowledge of forming such a unit. I have tried to cover all the relevant points precisely.

ACKNOWLEDGEMENT
It is a matter of pleasure for me to prepare this report. I would like to thank the SSI Office Staff, Bharat Bakery & Italian Bakery for providing valuable information. I am also thankful to all the local manufacturers and traders of Bread for helping me and providing me with valuable information.

Date: Place: (Mordiya Manoj M.)

INDEX
Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Particulars Introduction Project at a Glance Management set up Bio-Data of Promoters Justification of Location Location Complex Product Details Market Potential Marketing Strategies Manufacturing Process Implementation of Schedule Presumptions Staff and Labour Raw Material Contingencies Utilities Working Capital Requirement Fixed Capital Project Fund Sources of Finance Cost of Production Sales Forecast Break Even Point Ratio Analysis Risk Factors Future Plans Name and Address of Machinery Suppliers Name And Address Of Local Raw Materials Suppliers Page No.

Introduction
Banking and confectionary products are now consume died mass quantity. But unlike in advanced countries the per capital consumption of these products in India is still low. Bread is a fast and convenient food based on wheat. There are many varieties of bread depending upon the local demand like whole flour bread, brown bread, bread fortified with vitamins and minerals, milk bread and bread for diabetic patients. Its consumptions is more in cities and towns where industrial working group population is more. Bread consumption is increasing day by day and it is being used for various feeding programmer for children managed by voluntary agencies and state department of health.

Project at a Glance
Name of the unit Registered Office Form of organization City Bakery 101, Ateet Commercial Complex, Yagnik Road, Rajkot. 1. Mr. Sunil D Mehta 2. Mr. Bipin B Mehta 3. Ms. Ankita S. Mehta Product Size of the Unit SSI Registration No. Location of the Unit Cost of the Project Sources of Finance Brand Name Brand Logo 4. Ms. Binita Mehta Whole from Bread Small Scale Unit Application has been made registration number has not yet been allotted Rs. 15,86,992.80 Ownership : - 10,86,992.80 Borrowed Capital: - 5,00,000 Fresh

Management Set Up
The Four promoters are entitled to take the post of directors. Mr. Sunil D Mehta and Mr. Bipin D Mehta shall be non working partners due to their prior engagements in their current profession / service. Ms. Ankita S. Mehta and Ms. Binita Mehta shall be the working partners. Ms. Binita Mehta. will handle the production and accounts department as she has past experience in the some filed and also holds an MBA with finance degree. The second working partner Ms. Ankita Mehta shall have under her the sales and distribution department along with personal department. The capital ratio of all the four partners i.e. Mr. Sunil Mehta., Mr. Bipin Mehta, Ms. Ankita and Ms. Binita is 30:30:20 respectively. And the profit sharing ratio will be 25% each.

Bio-Data of Promoters
Partner I
Name Age Address Qualification Responsibility Financial cont. Mr. Moradiya Manoj M. 20 Bhidbhajan Sociaty, Uni. Road Rajkot 360 005. B.B.A. Top Level decision making 55%

Partner II
Name Age Address Qualification Responsibility Financial cont. Mr. Moradiya Manoj N. 21 Ravapar Road, Narsang Takary, Morbi. B.B.A. Top Level decision making 25%

Justification of Location
The location of a unit is of a crucial decision an entrepreneur has to make. There are various factors affecting such a decision. The location that City Bakery has chosen for itself is the outcome considered after analysis various facts.

Cost of land: The land cost in this area is lower as compared to land in the middle area of the city. Moreover, on area is chosen for from Lati Plot will increase the overhead cost of transportation. Therefore, after cost of analysis of land, price and transportation cost the location has been selected.

Labour: Cheap labour resides in large quantity in this area. Therefore, the availability of labour is convenient and economical.

Transportation: The transport cost is comparatively less as the market place is away only at a distance of 10-12 Kms.

Availability of Raw-Material: The basic Raw-Material to available at a distance of approximately 10 Kms. From Lati Plot. Moreover, the traders shall deliver the raw material conveniently.

Market Reach: The market place where in daily specified quantity of Bread is distribution to local groceries and supermarkets near to the location chosen.

Product Details
Bread is a fast moving consumers good. Normally a variety of breads are available in the market like whole flour break, brown bread, bread fortified with vitamins and minerals, milk bread etc. The City Bakery however, aims of producing the most preferred whole flow bread. The FRESH bread will be available in the market to the customers in places of 400 gms. i.e. medium size pack 50 gms. i.e. out DAILY FRESH pack. The innovative pack of 50 gms. is designed to meet the needs of those consumers who prefer fresh bread daily and wouldnt want to waste or keep away the left out breads.

Market Potential
With the changing socio-economic environment i.e. increased literacy rate. Higher per capita income larger number of women going out for work to sustain family living standards and tourist population etc. one can expect at least 5% growth rate in case of bakery products in coming years. According to an eximate, they are 75.000 bakeries producing items worth Rs. 2,000 crores annually (1992) out per capital consumption of bakery products is the lowest in the world i.e. 1.27 Kg. Only whereas in advance countries it range from 50-70Kgs. Since ours is a small scale unit and thereby the focus being on the city of Rajkot. Today Rajkot is called Mini Mumbai which means it is turning to a metropolitan city with the increase of excellent education institutes, the best of industries etc. Bread is consumed in the morning for breakfast, it has to come as a substitute of the traditional breakfast of Alu / Gobi paratha. With increasing number of nuclear families, modernization in the society is affecting the habits of all and more and ore women going for work and higher education the consumption of bread is very likely to sustain and its demand shall increase further considering the above facts. Moreover our new concept of Dairy Fresh bread will be available in 50 Gms. pack is likely to penetrate faster in the market since the bread pieces it contains shall be only 5 which are sufficient for an individuals breakfast. Normally when customers purchase the Jumbo Medium or Small size packs, they are always left out with a few pieces of bread which they might have to consume the next day even though it may not be totally fresh. Also the problem of daily purchase of such packs is solved as we plan to provide home delivery to out customers every morning. This concepts is new and can create its own share in the market. The firm also produces the 400Gms Medium Size pack for a family.

Marketing Strategies

With the launch of this product, Fresh Breads, City Bakery enters the market with an intention to penetrate in it with new strategies likes:

(1)

Daily Free Delivery: City Bakery gives the unique facility to its customers of daily free delivery in twice a day.

(2)

Unique Concept: This pack is total innovation wherein the basic concept behind it is of providing a customer with fresh bread daily and in just the exact amount of quantity an individual may require per meal i.e. breakfast or evening snacks.

(3)

To Publicise: By using pamphlets at the outlets of groceries and later apt for hoardings.

Manufacturing Process
Mix all ingredient & Prepare dough

The dough is fermented for two days

Rested for 30 minutes Divided in Loaves

Kept for two hours in Loaves till it attains rising Baked for 20-25 Minutes Removed & Cooked. Sliced & Wrapped.

Method in Detail
Dough is prepared by mixing all he ingredients together. The mixed dough is fermented for two hours. Knocked back and rested for 30-40 minutes. The dough is now ready for dividing. The dividing is done as per the size of the loat to be manufactured. (i.e. we are manufacturing 400gms.) The dough pieces on the loat are kept again for two hours for find processing. When the dough attains a particular rising, they are backed for 20-25 minutes. Baked dough is cooled sufficiently, sliced and then wrapped.

Implementation of Schedule
No.
1. 2. 3. 4. 5. 6.

Activity
Acquisition of land and construction of building. Approval of loan and other formalities. Installation of machinery. Arrangement of power. SSI registration. Staff appointment.

Completion Time
1 Month 1 Month 1 Week 1 Month 20 Days 3-4 Weeks

Presumptions
I II III IV Working days: Shift: Working Hours: Government Policy: 6 Days a Week 25 Days a Week Double shift 11.00 P.M. to 4 A.M. 12.00 A.M. to 4 P.M. (a) Very low tax rate prevails at 0.1% (b) New entrants in bread production are not allowed to establish a factory in V VI Banking Policies: Input Output Ratio near a residential area. (a) Loan Rate 12% pa. (b) Subsidy of 20% With an input of 259.6kgs. Or raw material an out put of 320kgs. Of bread can be produced daily.

Staff and Labour

No. 1. 2 3. 4. 5. 6. 7. 8. Particulars Manager Supervisor Accountant Distributors Salesman (door door delivery) Unskilled Labour Driver Peon Cum watchman No. of Persons 01 01 01 01 to 04 10 02 01 Rate per day 125 100 100 70 35 50 25 Amt. (per month) 3,750 3,000 4,000 3,000 8,400 10,500 3,000 750 Amt. (per year) 45,600 36,600 48,000 36,000 1,08,000 1,26,000 72,000 9,000

TOTAL

45,700

4,72,800

Therefore, staff salary for three months will be: 45,700 3 = 1,37,100

Raw Material
The raw material required to produce 800 packets of 400gms. and 200packs of 50gms. are as follow: No. Items Rate (Rs./Kg.)
1. 2. 3. 4. 5. Raw Material Sugar Yeast Salt Oil 08.88 12 60 3 48.5

Daily Reqmt. (Kg.)

233.75 23.37 2.33 4.67 11.68

Yearly Reqmt. (Kg.)

84.150 8,413.2 838.8 1,681.2 4,204.8

Yearly (Rs.) Amount

7,47,252 1,00,956 49,112 50,325 49,012

TOTAL

10,90,496

Contingencies
No.
1. 2. 3.

Particulars
Traveling expenses (Rs. 200 daily) Repairs & Maintenance Packaging Expenses @ Rs 0.60/Pack 400gms. @ Rs 0.20/Pack 50gms.

Amount Rs./Month
6000 3,000

Amount Rs./Annum
72,000 36,000

13050

156,600

TOTAL

2,64,600

Utilities
No.
1. 2.

Particulars
Water (Rs. 3,000 Per Month) Electricity (Rs. 2,000 Per Month)

Amount (Rs./Annum)
36,000 24,000

TOTAL

60,000

Working Capital Requirement

No.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Particulars
Postage & Stationery Traveling Expenses Electricity Expenses Telephone Expenses Salaries Repairs & Maintenance Raw Material Packaging Interest Depreciation Other material (wood)

Amount (per months)

500 6,000 2,000 1,000 36,400 3,000 23,17,440 13,050 5,000 2,71,660 28,340

Monthly Working Capital

Working Capital Requirement for Three Months: 96,12,440 3 = 2,79,373.20 Working Capital Requirement for Whole Years: 96,12,440 12 = 11,47,492.80

93,124.40

Fixed Capital
Fixed Assets
No.
1. 2. 3.

Particulars
Land Building (Total construction constant clouding labour, material & other expenses) Plant & Machinery. (a) Dough mixing machine (b) Cutter machine (slicer) Other Assets Vehicles (Rickshaws 2) Furniture Electricification.

Amount
2,80,000 1,00,000 3,000 20,000 5,000 1,500

4.

Total Fixed Cost

4,69,500

Project Fund
Particulars
Fixed Capital Working Capital

Amount (Rs.)
10,86,992.80 5,00,00,000

Total Project Cost

15,86,992.80

Sources of Finance
No.
1. (30%) (30%) (20%) 2. Ms. Binita Mehta 31.51 5,00,00,000 (20%) Borrowed Capital Ms. Ankita S. Mehta Mr. Bipin Mehta

Particulars
Owned Capital Mr. Sunil Mehta

% (Percentage)
68.49

Amount (Rs.)
10,86,99,286

Cost of Production
No.
1. 2. 3. 4. 5. 6. 7.

Particulars
Raw Material Labour (Direct) Administrative Cost Depreciation Repairs & Maintenance Interest Power & Fuel

Amount (Rs.)
10,90,946 1,62,000 5,57,400 32,600 36,000 60,000 96,000

Total Cost of Production (P.A.)

20,34,496

Direct labour includes wages of supervision and unskilled laborers. Administrative costs includes salaries of staff, traveling expenses, packing expenses, postage and stationery and telephone charges. Depreciation: (a) Machinery (b) Furniture (c) Vehicle (d) Building @ @ @ @ 20% = 20% = 20% = 15% = 600 1000 16000 15000

Total =

32,600

Sales Forecast
Year Units 400 01 02 03 04 05 800 850 900 950 1000 Day 50om 200 200 300 400 500 Units Months 400 2400 25500 27000 28500 30000 50gms. 3000 6000 9000 12000 15000 Units 400gms . 288000 306000 324000 342000 360000 Annum 50gm. 36000 72000 108000 144000 180000 2304000 2448000 2592000 2736000 288000 72000 144000 216000 288000 360000 Amount Rs.

In the first year the sale are: (a) (b) 400gms. (Medium size pack) a Rs 8/pack 50gms. (Daily Fresh Bread) a Rs 2/pack Annual Sales

Amount = = = 23,04,000 72,000 23,76,000

Break Even Point/Analysis

Break level point is that level of activity where there is neither profit no loss. Break Even Point can be derived through mathematical formula or graphical chart. Break Even Chart indicates approximate profit or loss at different levels of sales volume. However, Break Even Analysis is based on certain assumptions, they are as follows: All costs can be segregated in fixed and variable components. Production and Sales are equal. Selling price remains constant at all levels.

B.E.P. in Rupee Value: Contribution = = Fixed Cost + Profit 3,17,720 + 3,61,504

=
P/V Ratio = = = Therefore B.E.P. = = =

6,59,224
Contribution 100 Sales 6,59,224 100 23,76,000

27.74%
Fixed Cost P/V Ratio 3,17,720 27.74%

11,453.49%

B.E.P. in Percentage:
B.E.P. = = = Fixed Cost 100 Fixed Cost + Profit 3,17,720 100 3,17,720 + 3,41,504

48.19%

Ratio Analysis
Return on Investment: R.O.I. = = = Net Profit 100 Capital Employed 3,41,504 100 15,86,99,280

21.52%

Net Profit Ratio: N.P.R. = = = Net Profit 100 Sales 3,41,504 100 23,76,000

14.37%

Risk Factors
(1) Perishability: Bread is a product which perishes soon and therefore has to be consumed soon after its manufacture.

(2)

Competition: Existing competition from prevailing bread manufacturers like Bharat Bread, Monjinis, Modern etc.

(3)

Seasonal Fluctuations: Seasonal Fluctuations during the year especially in those in the month of Shravan (generally August) when people go for a religious fast and do not consume bread.

Future Plans
The firm plans the following for years to come:
It may increase its production of both packs of bread by 6.1% medium size packs and 100% of daily fresh packs. The firm plans to have tie ups with Pizza Hut and McDonalds which are likely to establish themselves in Rajkot City. After three years of its existence, the firm plans to supply packets of bread to various Ashrams in Rajkot City. To increase the production capacity and thereby employing more and more number of workers.

Name & Address of Machinery Suppliers

1. M/S Ever Fresh Product, Ram Baugh, Indore, M.P. M/S Baker & Co. (p) Ltd. Oomrigar Building, Opp. Crawford Market, Mumbai 400 003. M/S Nagpal Bros. 2798 Zorawar Singh Marg, Delhi 110 006. M/S Mangal Engg. Works Lahoti Gate, Patiala. M/S New Engg. Industries Firozepur Road, Ludhiana. M/S Bijay Engineers Mini Industrial Estate, Arimpur Trichar 680 611 Kerala. Baker Enterprise 23, Behra Enclave, Near Peeragarhi, New Delhi 110 041.

2.

3.

4.

5.

6.

7.

Address of Raw Material Suppliers

1. Gandhi Traders 10, Thosa Gali, Rajkot. 2. Gopalji Jadavji Dharmendra Road, Rajkot. 3. Nair Traders 8, Wholesale Market, Rajkot. 4. Gurikrupa Traders 15, Thosa Gali, Rajkot.