This document provides information about peanut butter production. It discusses that peanut butter is made by roasting and crushing peanuts into a paste. It contains 48% protein and minerals. There are two main types - creamy and crunchy. Peanut butter has a shelf life of 12 months when stored at room temperature. It is commonly used as a bread spread. The document outlines the manufacturing process which involves roasting, blanching, crushing peanuts into a paste and adding other ingredients like sugar and salt. It also provides details on the machinery, manpower requirements, implementation schedule, costs and means of finance required to set up a peanut butter production facility.
This document provides information about peanut butter production. It discusses that peanut butter is made by roasting and crushing peanuts into a paste. It contains 48% protein and minerals. There are two main types - creamy and crunchy. Peanut butter has a shelf life of 12 months when stored at room temperature. It is commonly used as a bread spread. The document outlines the manufacturing process which involves roasting, blanching, crushing peanuts into a paste and adding other ingredients like sugar and salt. It also provides details on the machinery, manpower requirements, implementation schedule, costs and means of finance required to set up a peanut butter production facility.
This document provides information about peanut butter production. It discusses that peanut butter is made by roasting and crushing peanuts into a paste. It contains 48% protein and minerals. There are two main types - creamy and crunchy. Peanut butter has a shelf life of 12 months when stored at room temperature. It is commonly used as a bread spread. The document outlines the manufacturing process which involves roasting, blanching, crushing peanuts into a paste and adding other ingredients like sugar and salt. It also provides details on the machinery, manpower requirements, implementation schedule, costs and means of finance required to set up a peanut butter production facility.
This document provides information about peanut butter production. It discusses that peanut butter is made by roasting and crushing peanuts into a paste. It contains 48% protein and minerals. There are two main types - creamy and crunchy. Peanut butter has a shelf life of 12 months when stored at room temperature. It is commonly used as a bread spread. The document outlines the manufacturing process which involves roasting, blanching, crushing peanuts into a paste and adding other ingredients like sugar and salt. It also provides details on the machinery, manpower requirements, implementation schedule, costs and means of finance required to set up a peanut butter production facility.
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Profile No.
: 36 NIC Code: 10402
PEANUT BUTTER
1. INTRODUCTION
Peanut butter is made from raw peanuts by roasting and crushing to paste. It is very nutritional product as it contains about 48% protein and minerals. It is used widely as bread spread. In India it is gradually becoming popular in urban areas. Super market shelf now can be seen with peanut butter jar. There are mainly two types of peanut butter based on smoothness of the end product. Creamy products are very fine and crunchy products are coarse in nature. Moreover other types are made by adding small quantity of chocolate or fruit jelly. The shelf life of the butter is about twelve months from the date of manufacturing. It is not required to store peanut butter in refrigerator or cold temperature. It can be stored at ambient temperature. However once seal is opened it has to be under lower temperature.
2. PRODUCTS AND ITS APPLICATION
Peanut butter is formulated using good quality peanut paste, sugar, salt; stabilizer etc. to prevent oil separation in the container stabilizer is added at the end of the process. The taste of peanut butter varies from place to place. Therefore addition of sugar and salt is done depending on the local demand. For consumer pack it is usually packed in 200, 500 and 1000 grams PET jar. USA is the largest consumer of Peanut Butter.
For institutional sales, it is packed in larger containers of five and ten Kg. pales. For industrial applications such as in confectionary, Chocolate, bakery products, ice-cream etc. it is packed in 200 Kg drums. 3. DESIRED QUALIFICATION FOR PROMOTER
The promoter may have experience in selling consumer food products or having knowledge of sourcing good quality peanuts. Academic qualification in science or food technology may be advantageous to produce quality peanut butter.
4. INDUSTRY OUTLOOK/ TREND
The size of Indian food processing industry is estimated to be at around rupees 12 lakh crores. It contributes 9% of country GDP and growing at about 10% per annum. With encouragement to setup food processing parks and incentives from Government, Food processing sector is growing rapidly. The newer products in the market are being introduced with advanced technology, packaging and enhanced shelf-life.
5. MARKET POTENTIAL AND MARKETING ISSUES, IF ANY
There are about ten plants producing peanut butter in India and mainly concentrated in the state of Gujarat. Most of the existing units are exporting peanut butter to Middle East, south East Asia, Japan, USA, Canada and some of the African countries. The Existing units are working reasonably well and some of them are expansion mode. However they face problem of getting quality peanut as available raw material in India is highly infected with aflatoxin and it is a matter of concern for export.
While export market is still growing and Indian share is increasing in international market, back home market for peanut butter is limited but growing at slower pace. With increase in awareness and health benefits, future looks bright for local sell. In India institutional sale is rapidly increasing with newer products in the market. Foreign companies are also putting up their facilities in food processing sector and some of them need peanut butter. 6. RAW MATERIAL REQUIREMENTS
The main raw material required is good quality peanut having aflatoxin content less than 5 ppb. The main producing states for raw peanut are Gujarat, Andhra Pradesh, Uttar Pradesh, Bihar and Rajasthan. It is usually bought in deshell form to prevent dusting. As shelf life of peanut is short it is purchased as and when required or stored at about 8 degree centigrade.
Other raw materials like sugar, salt and stabilizer are locally available without any difficulty. Packaging material such as PET jar, plastic pale, corrugated box, sealing tape etc. are required to pack jars. It is mandatory to write ingredients used in formulation of peanut butter.
7. MANUFACTURING PROCESS
HPS peanuts are first fed to the hopper of conveyer equipped with magnet. It is then taken in to roaster where peanuts are heated at about 90 degree and cooled in a cooler with high flow of air. Roasted peanuts are blanched to remove red skin. After blanching, peanuts are fed to picking table to remove damaged peanuts manually and then pass through electronic shorting machine. This ensures aflatoxin control.
Split nuts are taken to peanut butter mill where it is crushed to required fineness and additives such as sugar, salt and stabilizer are added in required quantity. For removal of encapsulated air, it is taken to aeration tank. For texture and smoothness it is than pass through votator at very low temperature. After these peanut butter is packed in required containers using packing line.
8. MANPOWER REQUIREMENT
For the production of Peanut Butter following category of manpower will be required for day to day production. Annual wages are also worked out. Manpower Requirement Sr. No. Designation of Monthly Number of employees Annual cost Employees Salary ₹ required ₹. in lacs 1 Unskilled Labour 6,000 4 2.88 1 Production Manager 35,000 1 4.20 2 Supervisor 20,000 3 7.20 3 Lab Chemist 20,000 1 2.40 4 Foreman 12,000 2 2.88 5 Skilled Labour 8,000 6 5.76 6 Accountant 10,000 1 1.20 7 Office Assistant 8,000 1 0.96 8 Watchman 5,000 2 1.20 Total 21 28.68
9. IMPLEMENTATION SCHEDULE
The project can be commissioned within six months of tying up of finance. There is no complicated machinery and requirement of space is also small. Therefore, implementation time required is very short.
10. COST OF PROJECT
The cost of project as per market rate of factory building, machinery, miscellaneous items, working capital margin and preliminary and pre-operative expenses works out as under:
Cost of Project
Sr. No. Particulars ₹ in Lacs
1 Land 35.00 2 Building 53.50 3 Plant & Machinery 180.00 4 Furniture, Electrical Installations 5.00 5 Other Assets including Preliminary / Pre-operative expenses 10.00 6 Margin for Working Capital 45.45 Total 328.95
11. MEANS OF FINANCE
Based on the present norms of the bank, means of finance is worked out as under.
Means of Finance
Sr. No. Particulars ₹ in Lacs
1 Promoter's contribution 131.04
2 Bank Finance 197.92
Total 328.95
12. WORKING CAPITAL CALCULATION
Working capital required for storage of raw materials and finished goods, monthly overheads, goods in process, receivables and trade credit is worked out based on the present norms of the bank as under.
The profitability is worked out as under after taking into account all variable and fixed expenses as under. Profitability Calculations Sr. Particulars Year 1 Year 2 Year 3 Year 4 Year 5 No. 1 Sales 1156.05 1321.2 1486.35 1486.35 1486.35 Raw Materials & Other 1017.15 1162.46 1307.77 1307.77 1307.77 2 direct inputs 6 4 2 2 2 3 Gross Margin 138.894 158.736 178.578 178.578 178.578 4 Overheads except interest 28.126 32.144 36.162 36.162 36.162 5 Interest 29.239 33.416 37.593 37.593 37.593 6 Depreciation 15.001 17.144 19.287 19.287 19.287 7 Net Profit before tax 66.535 76.04 85.545 85.545 85.545
The proposed unit will have the production capacity of 1500 MT of peanut butter per year. The unit cost of power is taken at Rs. 8. The depreciation on building is taken at the rate of 5% whereas for plant and machinery it is at 10%.
The sales price of peanut butter on an average is taken at the rate of Rs. 110 per kg for proposed formulations. The selling price of red skin is taken at the rate of Rs. 10 per kg.
15. BREAKEVEN ANALYSIS
The Break-Even point as percentage of targeted sales works out as under.
Cash Break-Even (as % of Targeted sales)
Sr. No. Particulars UOM Value
1 Sales Realization ₹. In Lacs 1651.50
2 Variable costs ₹. In Lacs 1453.08 3 Fixed costs incl. interest ₹. In Lacs 81.95 4 BEP = FC/SR-VC x 100 = % of sales 41.30%
16. STATUTORY/ GOVERNMENT APPROVALS
There is statutory requirement of FSSAI license for setting up of food processing industry. Moreover, MSME & GST registration, IEC Code for Export of end products and local authority clearance may be required for Shops and Establishment, for Fire and Safety requirement and registration for ESI, PF and Labour laws may be required if applicable. Entrepreneur may contact State Pollution Control Board where ever it is applicable. 17. BACKWARD AND FORWARD INTEGRATION
As backward integration, promoter may in future think of producing HPS peanuts from shell nuts. This can reduce the price of raw material. As forward integration peanut butter products, such as chocolate, honey, jelly filled etc. can be formulated for better market access. Moreover peanut paste can also be produced using same set of equipment.
18. TRAINING CENTERS/COURSES
For food processing industry training and short term courses are available at Indian Institute of Food Processing Technology, Thanjavur, Tamil Nadu and Central Food Technological Institute, Mysore, Karnataka and Ground Nut Research Centre, Junagarh, Gujarat. Udyamimitra portal ( link : www.udyamimitra.in ) can also be accessed for handholding services viz. application filling / project report preparation, EDP, financial Training, Skill Development, mentoring etc. Entrepreneurship development programs help to run businesses successfully and are available from Institutes like Entrepreneurship Development Institute of India (EDII) and its affiliates all over India.
Disclaimer: Only few machine manufacturers are mentioned in the profile, although many machine manufacturers are available in the market. The addresses given for machinery manufacturers have been taken from reliable sources, to the best of knowledge and contacts. However, no responsibility is admitted, in case any inadvertent error or incorrectness is noticed therein. Further the same have been given by way of information only and do not carry any recommendation.
