19

P E A-NUT BUTTER

PRODUCT CODE : N.A.

QUALITY AND STANDARDS : PFA Regulations BIS Specification (IS 9037:1979)
PRODUCTION CAPACITY : Qty.: 300 MT (per annum)
Value: Rs. 153 lakhs (per annum)
MONTH AND YEAR : May, 2003
OF PREPARATION
PREPARED BY : Small Industries Service Institute
111/112, B.T. Road, Kolkata-700035

INTRODUCTION Crude fibre : 2%

Ash : 3.5-4.0%
In India, ground-nut is primarily Calories/100 gm. : 580
considered an oil seed and only a small
quantity of this oil seed is directly used MARKET POTENTIAL
as food. The per capita consumption of
ground-nut in remote areas of our Due to shortage of milk in the country,
country has been estimated to be less butter is becoming costlier day by day
than 5 gm/day. Ground-nuts have been and is gradually going beyond the reach
recommended as a good source of of the common people. The main raw
protein. The ground-nut cake and flour material for pea-nut butter is ground-nut
is now generally used in the preparation which is available in reasonable quantity.
of protein isolate and weaning foods. The ground-nut can be best utilized for
the production of Pea-nut Butter to cater
Pea-nut butter is made from pea-nut,
to the needs of the common people. It
vegetable fat, salt and sugar, etc. and is
has good market potential.
of delicious flavour and high nutritive
value like milk butter with low cost. It B ASIS AND PRESUMPTIONS
has butter like consistency and can be
used as a substitute for butter. The profile is drawn on the basis of
The approximate composition of the following presumptions:
peanut butter (in gm./100 gm.) is as Working hours/shift : 8 hours
follows: No. of shift/day : 1
Moisture : 1.8-2% Working days : 300
Protein : 24-27% Total Number of : 2400
Fat : 36-49% working hours
Carbohydrate : 12-17% Working efficiency : 75%
 P EA –NUT BUTTER 111

Time period for : 3rd year from the g) Power connection : 6-7 months
achieving date from which h) Trial run : 7-8 months
maximum capacity production will i) Commencement : 9 months
utilization be started of production onwards
Labour charges : As per the
Minimum Wages TECHNICAL ASPECTS
Act of State
Government Process of Manufacture
Margin money : 25% of capital Best quality pea-nuts (ground-nuts)
investment are selected. After decortication, the
kernels are roasted carefully in an oven
Rate of interest on : 15%
with continuous stirring until they begin
fixed and working
to brown. The temperature should not
capital
exceed 240º F. When an oven is used,
Operative period of : 10 years care is necessary in roasting the nuts
the project otherwise the butter will have darkened
Rent : Covered area– colour and burnt taste. If these are under
Rs. 30 Sq.mtr. roasted, these lack flavour and colour
Uncovered area– and do not keep well. The roasted
Rs. 10 Sq.mtr. kernels are separated into halves by
rubbing on a sieve. The skin and ‘germ’
Value of the machinery and
or embryo are then removed. The
equipment has been estimated on the
presence of the germ is liable to cause
basis of prevailing prices in the market.
the butter to go rancid sooner than it
would otherwise and the skins show up
IMPLEMENTATION SCHEDULE red specks and give a slightly bitter taste.
Project implementation will take a The white kernels are made into a paste
period of 8 months from the date of neither too fine nor too coarse in a
approval of the scheme. Break-up of grinder. Before grinding, it is usual to
activities with relative time for each add salt 1-3 percent and also sugar
activity is shown below: according to taste. To stabilize the pea-
nut butter, solid hydrogenated fats such
a) Scheme preparation : 0-1 month as Dalda, Marvo, etc. are added to the
and approval paste upto 2 percent, the amount
b) SSI provisional : 1-2 months depending upon the type of nuts, degree
registration of solidity and the temperature. The mixture
c) Sanction of loan : 2-5 months is then run through a homogeniser.
There is no necessity of adding any
d) Clearance from : 3-4 months chemical preservatives to the pea-nut
Pollution Control Board butter. However, some anti–oxidants are
e) Placement of order : 3-5 months added to stabilize the pea-nut butter. The
for delivery of butter can be kept in closed jars in a cool,
machines dry place for several months. It is packed
f) Installation of : 6-7 months in cans and sterilized. Rust resistant
machines lacquered cans should be used.
112 P E A–NUT BUTTER

Quality Control and Standards Particulars Amount

(in Rs.)
Product must meet PFA regulations.
(covered) rented @ Rs. 30 per sq.mtr.
However, ISI specification for peanut
butter is IS:9037:1979. It may also be Uncovered area 100 sq.mtr 1,000
@ Rs. 10 sq.mtr.
manufactured as per the consumers’
Total 13,000
choice of taste and aroma.
ii) Machinery and Equipment
Production Capacity
(a) Production Unit
The scheme has been drawn for the
Sl. Description Qty. Total
manufacture of 1000 Kg. salted pea-nut No. (Rs. in
butter per day and the sale value of the lakhs)
finished product has been taken into 1. Decorticator with 5 HP
account @ Rs 60 per Kg. motor complete set
2. Separator with 5 HP motor
Motive Power
3. Roaster oil circulating type 3.95
The estimated power requirement for rotary with 12.5 HP motor
the plant and machinery including 4. Conveyor with 2 HP motor set
lighting and fittings is approximately 55 5. Pulversier 30" with cyclone 1 1.00
HP or 40 KW. separator, dust collector with
22 HP motor
Pollution Control 6. Homogeniser with motor 1 1.25

The proposed unit for the 7. Miscellaneous equipments L.S. 0.60

including weighing scales
manufacturing of peanut butter does not and others
cause any pollution and hence does not
Laboratory equipment 0.40
require any precautionary steps to be installation and electrification
taken for pollution control. However, no Office furniture and equipments 0.35
objection certificate may be obtained
Total 7.55
from the concerned State Pollution
Control Board. iii) Preliminary and Total (Rs.
Pre-operative Expenses in lakhs)
Energy Conservation Legal expenses, establishment cost, 1.25
travelling, start-up expenses,
Only motive power is used to operate consultancy fee, estimate fee,
various machinery and equipment and interest during construction,
hence care should be taken in operating trial run expenses, etc.
machinery to minimize the electrical Total Fixed Capital 8.80 lakhs
consumption. (i+ii+iii)

FINANCIAL ASPECTS B. Working Capital (per month)

i ) Personnel
A. Fixed Capital
S. Designation No. Salary Amount
i) Land & Building No. (In Rs.) (In Rs.)
a) Factory
Particulars Amount
(In Rs.) 1. Works Manager 1 6000 6000
Building 400 sq.mtr. including 2. Supervisor 1 3000 3000
manufacturing area, storage, office etc. 12,000
 P E A–NUT BUTTER 113

Sl. Designation No. Salary Amount (iv) Other Contingent Expenses Amount
No. (In Rs.) (In Rs.) (In Rs.)

3. Store-keeper 1 2500 2500 Rent 13,000

4. Mechanic 1 2500 2500 Consumable Stores 2,000

5. Electrician 1 2500 2500 Repair and Maintenance 3,000

6. Skilled Worker 1 2000 2000 Postage and Stationery 2,500

7. Unskilled worker 5 1500 7500 Transport 3,000

8. Guard/Chowkidar 1 1500 1500 Advertisement and Publicity 2,000

b) Administration Insurance and Taxes 1,000

1. Sales Supervisors 1 3000 3000 Telephone and Telegram, etc. 2,000

2. Accountant-cum- 1 3000 3000 Miscellaneous Expenses 500

Cashier
Total 29,000
3. Clerk-cum- 1 2500 2500
typist (v) Total Recurring Expenditure Amount
(In Rs.)
4. Peon 1 1500 1500
a) Salary and Wages 43,125
Total 37,500
b) Raw Material 9,19,250
Add perquisites @ 15% of total 5,625 c) Utilities 21,500
salary and wages
d) Other Contingent Expenses 29,000
Total 43,125
Total 10,12,875
(ii) Raw Material (Indigenous)
vi) Working Capital (for 3 months)
Sl. Item Qty. Rate/ Total
10,12, 875 × 3 = 30,38,625
No. (Kg.) Kg.(Rs.) (In Rs.)
or Say 30,39,000
1. Pea-nut 25000 30 7,50,000

2. Sugar 1500 14 21,000 C. Total Capital Investment

3. Dalda 625 40 25,000 Total (Rs.
4. Salt 625 6 3,750 in lakh)
a) Fixed Capital 8.80
5. Miscellaneous - - 7,000
Chemicals/ b) Working Capital 30.39
Anti-oxidants (For 3 months)

6. Packaging 25000 4.50 1,12,500 Total 39.19

materials
Total 9,19,250 MACHINERY UTILIZATION
(iii)Utilities Amount The production capacity of the project
(In Rs.) has been taken @ 1000 Kg. per day in
1. Electricity 16,000 single shift. It is estimated that
production may be enhanced three-fold
2. Fuel 5,000
by running three shifts. It is estimated
3. Water 500 that 35 to 40% capacity of the machinery
Total 21,500 will be utilized in single shift production.
114 P E A–NUT BUTTER

FINANCIAL ANALYSIS ii) Net Profit (per year) Rs. 15.80

B.E.P. = Fixed Cost × 100

1) Cost of Production (per year) Total (Rs. Fixed cost + Net profit
in Lakhs)
= 12.14 × 100
a) Total recurring cost 121.56 12.14+15.80
b) Depreciation on machinery 0.76 = 44%
and equipment @ 10% p.a
c) Interest on total investment 5.88
@ 15% p.a
Addresses of Machinery and
Total 128.20
Equipment Suppliers

2) Turnover (per year) Amount i) M/s. Unitech Engg. (P) Ltd.

(In Rs.) Post Box No. 199, Ambala Road,
By the sale of 3,00,000 Kg. of Pea-nut 180.00 Saharanpur (U.P)
@ Rs. 60 Kg.
Less Commission 20% 36.00 ii) M/s. Larsen and Tubro Ltd.
Total 144.00 10, House Bellard Estate,
P.B. No. 278, Mumbai.
3) Net Profit (per year) (Before Income Tax)
= Total Sales – Cost of Production iii) M/s. Alfa Level Ltd.
= 144 – 128.20
10A, Hochi-Min Sarani,
= 15.80 lakhs
Kolkata-700071.
4) Net Profit Ratio Rs. 11%
iv) M/s. Container Industries
5) Rate of Return Rs. 40%
Block -C, Unit No. 299,
6) Break-even Point Ghat Koper Industrial Estate,
72, Lal Bahadur Marg,
i) Fixed Cost (per annum) Total (Rs.
in lakhs) Mumbai.
a) Rent of premises 1.56
v) M/s. Pasteur Engg. Co (P) Ltd.
b) Depreciation on plant and machinery 0.76
15/8/A, The Mall Road,
c) 40% of salary and wages 2.07
Dum Dum, Kolkata-700085.
d) 40% of utilities and other expenses 1.75
e) Insurance charges 0.12
Addresses of Raw Material Suppliers
f) Interest on total investment 5.88
Total 12.14 Available in Local Markets.