Project Financing in Food Processing Industry

Abstract

India is a major producer of many agricultural commodities and it accounts for nine per cent of the world’s fruit production and about 11 per cent of the vegetable production.Food today is the single largest component of household consumption expenditure within India with the current food consumption estimated at Rs 8,60,000 crore. Processed foods account for Rs 4,60,000 crore and primary processed food (includes packed fruits and vegetables, packed milk, etc.) Rs 2,80,000 crore. Changing age profile, increase in income, social changes (increasing number of working women), life style factors and organized retail outlets are factors favoring the growth of the food-processing sector. This helps the sector generate significant employment as well as great profit maximization opportunities. The multiplier effect of investment in food processing industry on employment generation is 2.5 times than in other industrial sectors.Taking this fact into consideration we have tried to “check the Financial, Marketing and Technical Viability of a Food processing unit”.In this project work the following points has been taken into consideration that:➢ What are the Marketing elements, which are, need to be taken care of while establishing a food-processing unit. i.e. market competitor analysis, what should be the best place to start the operation, considering the Government policies, benefits, tax policies of the state etc.➢ What are the machineries and equipments and technologies required to start the business.➢ What would be the plant layout, natural and climatic conditions?➢ What are the financial elements, which should be required to be focus upon? i.e. Projected cash flow, Ration analysis, current ration, debt to equity ratio, interest coverage ratio, Return on investment, internal ret of return etc.After analyzing all the above given concerns it has been concluded that its viable and wise decision to make investment in the food processing unit.