DETAILED PROJECT REPORT

ON GHEE MANUFACTURING UNIT

Table of Contents
1. Introduction..........................................................................................................................................2
2. Market Potential ..................................................................................................................................3
3. Need for Processing Unit ....................................................................................................................3
4. Raw Material Description ...................................................................................................................4
5. Standard Operational Procedures (SoPs) of Ghee.............................................................................5
6. Chemical Composition of Ghee .........................................................................................................6
7. Machinery and Equipment ..................................................................................................................7
8. Packaging ...........................................................................................................................................11
9. Food Safety Standards ......................................................................................................................12
10. Hygienic, Sanitary and Good Manufacturing Practices ..................................................................13
11. Financials……………………………………………………………………….……18
Chapter-II (About the product)

1. Introduction

The term "ghee" finds its roots in the Sanskrit word "ghrita." Ghee, a highly renowned
traditional dairy product, holds a significant place in Indian culinary traditions and is widely
embraced in many Middle Eastern countries as well. This golden-hued substance is crafted
from the milk, cream, or butter of various animal species.
Ghee, often referred to as clarified butter fat, is a familiar name in Indian households and is
an integral part of South Asian cuisine. Notably, it originated in India, where it has been used
for centuries. What sets ghee apart is its lactose-free composition and absence of salt,
making it suitable for individuals with specific dietary preferences or restrictions.
Visually resembling liquid gold, ghee is not only a culinary delight but also boasts a rich,
sweet, and delightfully nutty flavour profile. Even in small quantities, ghee has the
remarkable ability to enhance the taste of food, making it a cherished ingredient in various
dishes. Beyond its culinary allure, ghee stands out as a gluten-free dairy product, adding to
its versatility and appeal.
In essence, ghee goes beyond being a mere cooking ingredient; it is a cultural symbol of
taste, tradition, and purity, creating a sensory experience that goes beyond the palate.

1.1 Uses and Benefits of Ghee:

Ghee, as a versatile dairy product, offers a myriad of uses and health benefits:
a) Cooking Fat: Ghee serves as a premium cooking fat, appreciated for its high smoke
point and rich flavour. Its use in traditional Indian cooking imparts a distinctive taste to
various dishes.
b) Ice Cream Manufacturing: In the realm of desserts, ghee plays a role in the
manufacturing of ice cream. Its unique properties contribute to the texture and taste of
this frozen delicacy.
c) Confectionery Industry: Ghee finds its way into the confectionery industry, enhancing
the richness and mouthfeel of sweets and treats. Its inclusion elevates the quality of
confectionery products.
d) Manufacturing Various Fat Spreads: Due to its smooth texture and nutritional profile,
ghee is employed in the production of various types of fat spreads. These spreads benefit
from the wholesome qualities of ghee.
e) Rich in Fat-Soluble Vitamins (A, D, E): Ghee is a natural source of essential fat-soluble
vitamins, including A, D, and E. This makes it a valuable dietary addition, particularly for
vegetarians who may find it challenging to obtain these vitamins from other sources.
f) Vegetarian-Friendly: As a dairy-derived product, ghee provides a source of essential
nutrients for vegetarians. Its nutrient composition makes it a suitable option for those
following a plant-based diet.
g) Cognitive and Energy Benefits: Ghee is believed to have positive effects on cognitive
functions, memory power, and overall body energy. It is often incorporated into traditional
practices to support mental clarity and vitality.
2. Market Potential

Ghee, a staple in Indian cuisine, is the pure butter fat that remains after the removal of milk
solids and water from butter. Known for its fragrant aroma and rich nutty taste, it stands as
the second most consumed dairy product in India, following liquid milk. The substantial
growth of the ghee market can be attributed to various influential factors.
Several driving forces contribute to the flourishing market, including population growth,
increased disposable incomes, widespread availability, and a growing awareness of the
benefits and uses of ghee. Particularly noteworthy is its appeal to a significant vegetarian
population, making ghee a preferred choice. Additionally, factors such as the expanding
population, urbanization rates, enhanced cold supply chain infrastructure, and increased
deep freezer penetration contribute to the overall market growth.
Given that ghee is a dietary mainstay in every household, there is a consistent and
substantial demand for it, both in rural and urban sectors. The market is poised to
demonstrate robust growth in the coming years, with expectations of significant expansion
from 2025 to 2030. As a culturally ingrained and nutritionally valued product, ghee continues
to hold a prominent place in the culinary landscape of India.

2.1 Export Opportunities

India has experienced a notable surge in the export of dairy products, especially ghee, with
destinations including Bhutan, Afghanistan, Canada, Egypt, and the United Arab Emirates.
Renowned for its rich flavour and cultural significance, Indian ghee has garnered
international attention and demand. Countries around the world are increasingly recognizing
the superior quality and traditional craftsmanship that define Indian ghee. With its purity,
nutritional benefits, and diverse applications in culinary practices, there exists a substantial
market for Indian ghee in regions where consumers prioritize authenticity and health-
conscious choices.
As the global interest in natural and traditional food products continues to grow, India’s ghee
emerges as a sought-after commodity, offering ample export opportunities for the country's
dairy industry. Leveraging the reputation of Indian ghee as a premium and authentic product,
exporters have the chance to tap into a lucrative market, meeting the rising demand for high-
quality dairy products on an international scale.

3. Need for Processing Unit

Milk is considered wholesome food mainly because of its high nutritive value. It has to be
processed to;
a) Increase the shelf life, because it is highly perishable.
b) Prepare value added products like ghee, peda, dahi, cheese, paneer, butter,
flavoured milk, cheese, and yogurt, dairy whitener, milk powder etc. and many more
dairy based products, for a good health.
 c) Make business out of it, create job opportunities, consequently building financially
strong Nation.

4. Raw Material Description

The Ghee making unit is characterized by its simplicity in terms of raw material
requirements, as the sole ingredient needed is milk. This primary resource is abundantly and
readily available in the local market. The accessibility of milk makes the establishment and
operation of a Ghee making unit feasible and efficient. This streamlined raw material
requirement not only simplifies the production process but also enhances the economic
viability of the venture. The local availability of milk ensures a consistent and convenient
supply chain, contributing to the overall sustainability and success of the Ghee making unit.

4.1 Process Flow Chart

The production process in the Ghee making unit involves a systematic series of steps to
ensure the quality and consistency of the final products. Milk is procured from vendors and
stored in storage tanks before undergoing primary processing. A boiler is employed to
generate steam, which plays a crucial role in various plant processes, including heating milk
and milk products as needed.
The initial use of steam occurs in the pasteurizer, where milk is heated for pasteurization.
After an appropriate holding time, the milk is transferred to another holding tank, a step
essential for reducing the load on the milk cooler and providing a uniform feed to it. Once the
milk is cooled, it is stored in a holding tank before being supplied to the milk homogenizer,
ensuring a consistent globule size.
From the homogenizer, the milk moves to a balance tank before being directed to the cream
separator, extracting cream that is stored in a separate balance tank. Simultaneously, toned
milk is supplied to the holding tank of the pouch-filling machine, where it is packaged into
appropriately sized packets stored in an Intermediate Bulk Tank (IBT) before dispatch.
The cream undergoes cooling in a chiller, reducing its temperature to 4 to 5 degrees Celsius,
before being fed into the butter churning machine. The machine produces butter, which is
then heated in a vessel to obtain ghee. This freshly made ghee is supplied to another pouch
packaging machine, creating packs of suitable sizes that are stored in a cold room until they
are ready for sale. This meticulous process ensures the production of high-quality ghee and
toned milk, ready to meet market demands.

Figure 1- Process Flow Chart

Procurement
Milk Cream
of raw Pasteurization Cooling
Homogenizing Separation
material

Ghee Butter
Packaging Chilling
Separating Churning
5. Standard Operational Procedures (SoPs) of Ghee

a) Raw Milk Reception: Raw Milk Received by Tankers/ food grade barrels is weighed
either in weighbridge or in weighing bowl, Batch wise sampling & testing need to be
done as per defined procedures.

b) Filtration and Chilling: The accepted milk is weighed and unloaded in the Dump
Tank and Pumped through a chiller (milk temperature not more than 5 deg.) after
properly filtering; such milk is stored in the raw milk silos.

c) Cream Separation and Pasteurization: Prior to initiating the cream separation and
pasteurization processes, the Milk Pasteurize, Cream separator, and Cream
pasteurize equipment undergo thorough preparation through a meticulous Cleaning-
in-Place (CIP) program. The planning for milk pasteurization and cream separation
commences only after confirming an adequate quantity of raw milk, ensuring the
seamless operation for a duration of 5-6 hours. The cream separation and
pasteurization procedures are conducted concurrently, optimizing efficiency.
Pasteurization is executed at a controlled temperature of 90±20°C, adhering to
specified standards for optimal quality and safety.

d) Churning of Cream and Removal of Buttermilk: The butter-churn plays a pivotal

role in the batch-wise production of butter. The operation involves the systematic
rotation of the churn at varying speeds, transitioning from higher to lower speeds
during the churning process. This method facilitates the collection or drainage of
buttermilk, a by-product of the churning, for subsequent reprocessing. The controlled
churning process within the butter-churn ensures the effective separation of butter
from the buttermilk, contributing to the production of high-quality butter.

e) Butter Melting: The butter, freshly produced from the butter churn, undergoes an
additional step in the melting process. It is transferred to a melting vat, where it is
subjected to a temperature of 65⁰C. This temperature is achieved through the
circulation of hot water in the jacketed vat. The melted butter is then pumped into a
pre-stratification vat, where it is allowed to remain undisturbed for the stratification
process to take place. This meticulous procedure ensures that the melted butter is
properly prepared and stratified, contributing to the overall quality and consistency of
the final product.

f) Cooking of Butter: The melted butter, which has undergone pre-stratification,

undergoes further processing through boiling in the Ghee Kettle. This boiling process
occurs within a temperature range of 107⁰C to 109⁰C, achieved by gradually raising
the temperature with the assistance of steam. Subsequently, the ghee, along with
any residue, is left undisturbed for approximately 15-20 minutes within the ghee
kettle before the filtration stage. The processed ghee is then pumped into settling
vats, where it undergoes an additional settling period of 2 hours. This meticulous
 cooking and settling process ensures the refinement and quality of the final ghee
product.

g) Clarification of Ghee: The clarification process for ghee is conducted using a ghee
clarifier to remove any residue particles from the ghee. This clarification operation
takes place at approximately 70⁰C, ensuring that the ghee achieves a clear and
refined consistency by effectively separating and eliminating any undesired particles
from the final product.

h) Ghee Inspection and Testing: To uphold the optimal quality standards, samples of
clarified ghee are regularly drawn at specified intervals from the sanitized double-
jacketed ghee storage tank. This meticulous process is executed following specified
procedures to monitor and control the quality of the ghee. The collected samples
undergo thorough inspection and testing, ensuring that the ghee product consistently
adheres to the specified quality standards throughout the production process.

i) Ghee Filling and Dispatch: Following approval from the Quality Control department,
the clarified ghee undergoes the filling process into tins, glass/PET jars, or cikka pack
containers. The weighing balance is pre-checked for calibration prior to the filling
operation. Subsequently, the ghee-filled tins are transferred to the ghee granulation
room, maintained at a temperature range of 18⁰C to 22⁰C. For dispatch, a designated
vehicle, ensuring cleanliness on the inside body, surface, sides, planks, and free from
dust/dirt, is employed to transport the packaged ghee to its destination. This
meticulous process guarantees the integrity of the product during the filling and
dispatch stages.

6. Chemical Composition of Ghee

Ghee crafted from buffalo milk presents a whitish hue with a subtle greenish tinge, while its
counterpart made from cow milk exhibits a distinctive golden yellow coloration. Typically,
ghee is prepared from various sources such as cow milk, buffalo milk, or a blend of both.
The detailed chemical composition of ghee, elucidating its specific nutritional components, is
provided below.
Table 1 - Chemical Composition of Ghee
Constituents Cow milk ghee Buffalo milk ghee
Fat (%) 99 – 99.5 99 – 99.5
Moisture (%) <0.5 <0.5
Carotene(mg/g) 3.2-7.4 -
Vitamin A(IU/g) 19-34 17-38
Cholesterol (mg/100g) 302 – 362 209 – 312
Tocopherol(mg/g) 26 – 48 18 – 31
Free fatty acid (%) 2.8 2.8

Source: (R.P. Aneja et al., Technology of Indian milk products, Dairy India publication.
Section 3.4: Fat rich dairy products, page 187.)
6.1 Analytical Parameters of Ghee
For the differentiation and characterization of ghee prepared from cow’s and buffalo’s milk,
physical and chemical properties were taken in the consideration. This differentiation is very
important and necessary for the consumer. The parameters are as under
Table 2- Analytical Parameters of Ghee
Constants Cow milk ghee Buffalo milk ghee
Butyro-refractometer (BR) reading 42.3 42.0
Sponification value 227.3 230.1
Reichert-Miessel (RM) value 26.7 32.3
Polenske value 1.76 1.41
Iodine value 33.7 29.4
Kirschner value 22.16 28.52
Solidifying point (oC) 15 – 23.5 16 – 28
Melting point (oC) 28 – 41 32 – 43.5
Colour (yellow unit/g) (Tintometer) 8.8 0.8

6.2 AGMARK Standards of Ghee

Standard
Parameters Special Grade General Grade
Grade
Baudouin Test Negative Negative Negative
Butyro-refractomer reading
at 400C 40.0- 43.0 40.0- 43.0 40.0- 43.0
Not less than Not less than
Reichert Meissl value Not less than 28.0
28.0 28.0
Polenske value 1.0 - 2.0 1.0 - 2.0 1.0 - 2.0
Not more than Not more than
Moisture content Not more than 0.3% 0.3% 0.3%
Percentage of Free Fatty Not more than Not more than
Acid (as oleic acid) Not more than 1.4 2.5 3.0

7. Machinery and Equipment

Establishing a ghee manufacturing unit

requires a set of specialized machinery and
equipment to facilitate the various stages of
production. A comprehensive list of machinery
and equipment typically needed for ghee
manufacturing is as under:

a) Milk Pasteurizer - The process of milk

pasteurization serves two distinct
purposes. First, from a public health
 standpoint, it aims to ensure the safety of milk and milk products for human
consumption by eliminating any bacteria that may pose a health risk, including harmful
pathogens. Second, from a quality perspective, pasteurization is employed to enhance
the keeping quality of both milk and its derived products, contributing to their longevity
and overall stability. In essence, pasteurization acts as a dual-function process,
safeguarding public health while concurrently preserving and improving the quality of
milk and its various derivatives.

b) IBT (Ice Bank Tank) Type Chilling Machine - An

Ice Bank Tank (IBT) is a system designed for the
storage of energy in the form of ice. This innovative
technology finds application in the dairy industry,
particularly for facilitating rapid processes within a
limited time frame and under specified power load
conditions. The IBT system plays a crucial role in
optimizing energy usage and ensuring efficient
operations in dairy processing, allowing for strategic
energy storage in the form of ice to meet specific
power load requirements during critical phases of
production.

c) Milk Storage Tank - The milk storage tank serves

as an optimal solution for cooling and maintaining
milk at a low temperature until it undergoes further
processing. Constructed from stainless steel, this
machine ensures durability and hygiene, effectively
preserving the raw milk in pristine condition. The
selection of the milk storage tank is tailored to meet
the unique needs and specifications of each
individual customer, ensuring that it aligns
seamlessly with their specific requirements for milk
storage and preservation.

d) Boiler - Boilers play a crucial role in steam

production within a steam system. The operational
aspect of a steam system involves the utilization of
a boiler to impart energy to a feedwater supply,
leading to the generation of steam. This process
involves heating the feedwater to produce steam,
and boilers are key components in this thermal
energy conversion system. Through this
mechanism, boilers contribute to the efficient and
controlled generation of steam for various industrial
applications.

e) Balance Tank - These tanks serve the purpose of

securely storing ghee. The processed ghee
undergoes a transfer to the ghee balancing tank
through a ghee pump. Subsequently, the ghee is
 permitted to settle within the tank, facilitating the stabilization and storage of the product.
This controlled settling process in the ghee balancing tank ensures that the ghee is
stored safely and maintains its desired quality characteristics.

f) Milk Homogenizer - The milk homogenizer executes a

straightforward process that involves mixing and
dispersing milkfat through a high-pressure procedure.
This method is employed to break down the milkfat into
smaller particles, ensuring a uniform and consistent
distribution throughout the milk. By subjecting the milk to
high pressure, the homogenizer effectively transforms the
milkfat into smaller and more evenly dispersed
components, contributing to a smoother and more
homogeneous product.

g) Cream Separator - A cream separator is a machine

designed for the separation and removal of cream from
whole milk. Its operational principle relies on the
fundamental fact that skim milk, which is milk without
butterfat, is denser and heavier than cream. Through this
process, the cream separator effectively distinguishes and
extracts the lighter cream from the milk, providing a
means to isolate and utilize both components for various
applications.

h) Chiller- A chiller is a refrigeration system employed

to reduce the temperature of machinery, industrial
spaces, and process fluids. It achieves this by
extracting heat from the system and transferring it
to another location. By effectively removing heat,
chillers play a vital role in maintaining optimal
operating conditions in various industrial settings,
ensuring the efficient performance of machinery
and processes.

i) Butter Churning Machine - Churning involves the

physical agitation of cream until it causes the rupture of
the delicate membranes surrounding the milk fat. This
mechanical process disrupts the structure of the cream,
leading to the separation and coalescence of the milk fat
into butter. The agitation encourages the consolidation of
fat globules, transforming the cream into the desired
 buttery consistency through the rupture of these membranes.

j) Ghee Boiling Kettle - A Ghee Boiling Kettle is employed in the

manufacturing process of ghee from butter or cream. This
specialized equipment plays a crucial role in heating and
processing the butter or cream to extract the clarified butterfat,
resulting in the production of ghee. The kettle is designed to
facilitate the controlled boiling and separation of the components,
ensuring the quality and purity of the final ghee product.

k) Pouch Filling Machine - The Pouch Filling Machine is a

specialized apparatus utilized for filling ghee into pouches
of varying sizes. This machine streamlines the packaging
process, ensuring precise and efficient filling of ghee into
designated pouches. Its design and functionality are
tailored to meet the specific requirements of ghee
packaging, contributing to a streamlined production
process and the creation of standardized ghee packaging
units for distribution and sale.

l) Material handling and other

Equipment - These equipments are
required for material handling
purposes. Additionally, other
essential equipment such as water
pumps, weighing machines, and
more are utilized in the overall
operational processes. These
supplementary tools play crucial
roles in ensuring efficient material
transportation, accurate
measurement, and the seamless
functioning of various tasks within
the operational framework.
Together, these equipment components contribute to the overall effectiveness and
smooth workflow in diverse industrial or manufacturing settings.

7.1 Price list of machineries

Table 3- Machineries price list
Sl. No Type of Machinery Unit Rate Price
1 Milk storage tank 1 35,000 35,000.00
 2 Balance Tank 1 15,000 15,000.00
3 Milk Homogenizer 1 1,95,000 1,95,000.00
4 Milk Pasteurizer 1 2,75,000 2,75,000.00
5 Cream Separator 1 31,000 31,000.00
6 Boiler 1 1,65,000 1,65,000.00
7 Pump 1 17,000 17,000.00
8 Chiller 1 2,75,000 2,75,000.00
9 Butter Churning Machine 1 1,35,000 1,35,000.00
10 Ghee Boiling Kettle 1 85,000 85,000.00
11 IBT Type chilling machine 1 1,45,000 1,45,000.00
12 Pouch Filling Machine 1 2,15,000 2,15,000.00
13 Material handling and other Equipment’s 1 3,50,000 3,50,000.00
19,38,000.00

Note: Total Machinery cost shall be INR 19.38 lakh including equipment’s but excluding GST
and Transportation cost.

8. Packaging

8.1 Selection of Packaging Materials for Ghee Packing

Ghee has a long keeping quality and can be stored for 6 to 12 months under ambient
temperature. The following packaging material may be used for the packaging of ghee:

a) Glass bottles/jars: provide excellent protection, as they do not react with the food
material; but are not in much use for packaging of ghee because of their fragility and
high weight.

b) Food grade plastic containers such as HDPE/PET: are replacing tin plate
containers. They provide a moderately long shelf life (not as long as tin cans), are
lightweight, economical and transport-worthy. Blow moulded HDPE is available in the
form of bottles (200, 400 g), jars (1 kg and 2 kg.), and jerry cans (2 kg, 5 kg, and 15
kg). PET bottles have excellent clarity, are odour free and have gas barrier
properties.

c) Laminates with metallic layer support (aluminium): Laminated pouches made of

PVDC-Al foil-PP are suitable for long term storage of ghee. Self-standing laminates
are used for 250 mL and 500 mL packs which are barrier to moisture, air and light.
multi-layered laminates are available for packaging of ghee. The selection of a
laminate or a multilayer film is governed primarily by the compatibility of the contact
layer, heat sealability, heat-seal strength and shelf life required apart from aroma,
grease, water vapour, oxygen and light barrier properties.

d) Tin containers: lacquered or even unlacquered tin cans of different sizes (250 g,
500 g, 1 kg and 15 kg) are used for packaging of ghee. The only drawback of tin
cans is their high cost. Regular tin pack sizes available in the market are 15, 5 and 1
L and 500 mL.
9. Food Safety Standards

9.1 Registration and Licensing of Food Business

All Food Business Operators in the country will be registered or licensed for FSSAI (Food
Safety and Standards Authority of India) in accordance with the procedures laid down

a) Every Food Business Operator shall register themselves with the Registering
Authority by submitting an application for registration in Form A under Schedule 2 of
these Regulations along with a fee as provided in Schedule 3.

b) The petty food manufacturer shall follow the basic hygiene and safety requirements
provided in Part I of Schedule 4 of these Regulations and provide a self-attested
declaration of adherence to these requirements with the application in the format
provided in Annexure-1 under Schedule 2.

c) The Registering Authority shall consider the application and may either grant
registration or reject it with reasons to be recorded in writing or issue notice for
inspection, within 7 days of receipt of an application for registration.

d) In the event of an inspection being ordered, the registration shall be granted by the
Registering Authority after being satisfied with the safety, hygiene and sanitary
conditions of the premises as contained in Part II of Schedule 4 within a period of 30
days.

e) If registration is not granted, or denied, or inspection not ordered within 7 days as

provided in above sub regulation (3) or no decision is communicated within 30 days
as provided in above sub regulation (4), the petty food manufacturer may start its
business, provided that it will be incumbent on the Food Business Operator to comply
with any improvement suggested by the Registering Authority even later.

f) Provided that registration shall not be refused without giving the applicant an
opportunity of being heard and for reasons to be recorded in writing.

g) The Registering Authority shall issue a registration certificate and a photo identity
card, which shall be displayed at a prominent place at all times within the premises or
vehicle or cart or any other place where the person carries on sale/manufacture of
food in case of Petty Food Business.

h) The Registering Authority or any officer or agency specifically authorized for this
purpose shall carry out food safety inspection of the registered establishments at
least once in a year. Provided that a producer of milk who is a registered member of
a dairy Cooperative Society registered under Cooperative Societies Act and supplies
or sells the entire milk to the Society shall be exempted from this provision for
registration.
10. Hygienic, Sanitary and Good Manufacturing Practices

The dairy establishment in which dairy-based food is being handled, processed,

manufactured, stored, distributed and ultimately sold by the food business operator, and the
persons handling them should conform to the sanitary and hygienic requirement, food safety
measures and other standard as specified below.

10.1 Sanitary Requirements

a) Facilities for the hygienic handling and protection of raw materials and of non-packed
or non-wrapped dairy products during loading and unloading, transport & storing
including Bulk Milk cooling facilities.

b) Special watertight, non-corrodible containers to put raw materials or dairy products

intended for human consumption. Where such raw materials or dairy products are
removed through conduits, these shall be constructed and installed in such a way so
as to avoid any risk of contamination of other raw materials or dairy products;

c) A waste water disposal system which is hygienic and approved.

d) Facilities for cleaning & disinfecting of tanks used for transporting dairy products and
raw milk. These containers have to be cleaned after every use.

e) The occupier of a dairy establishment shall take appropriate measures to avoid

cross- contamination of dairy products in accordance with the cleaning program.

f) Where a dairy establishment produces food stuffs containing dairy products together
with other ingredients, which have not undergone heat treatment or any other
treatment having equivalent effect, such dairy products and ingredients, shall be
stored separately to prevent cross-contamination.

g) The production of heat-treated milk or the manufacture of milk-based products, which

might pose a risk of contamination to other dairy products, shall be carried out in a
clearly separated working area.

h) Equipment, containers and installations which come into contact with dairy products
or perishable raw materials used during production shall be cleaned and if necessary
disinfected according to a verified and documented cleaning programme.

i) Equipment, containers, instruments and installations which come in contact with

microbiologically stable dairy products and the rooms in which they are stored shall
be cleaned and disinfected according to a verified and documented. Food Safety
management programme drawn up by the owner/occupier of the dairy establishment.

j) Disinfectants and similar substances used shall be used in such a way that they do
not have any adverse effects on the machinery, equipment, raw materials and dairy
 products kept at the dairy establishment. They shall be in clearly identifiable
containers bearing labels with instructions for their use and their use shall be
followed by thorough rinsing of such instruments and working equipment with potable
water, unless supplier's instructions indicate otherwise.

10.2 Personal Hygiene Requirements

a) The Food Business Operator shall employ those persons only in such an
establishment to work directly with and handle raw materials or dairy products if
those persons have proved to the occupier's satisfaction by means of a medical
certificate, on recruitment, that there is no medical impediment to their employment in
that capacity.’

b) Persons working directly with and handling raw materials or dairy products shall
maintain the highest standards of personal cleanliness at all times. In particular they
shall wear suitable, clean working clothes and headgear which completely encloses
their hair; wash their hands at least each time work is resumed and whenever
contamination of their hands has occurred; e.g. after coughing / sneezing, visiting
toilet, using telephone, smoking etc.

c) Cover wounds to the skin with a suitable waterproof dressing. No person with injury
on hand, even with dressing, shall be placed in any product making/handling section.

d) Avoid certain hand habits - e.g. scratching nose, running finger through hair, rubbing
eyes, ears and mouth, scratching beard, scratching parts of bodies etc. that are
potentially hazardous when associated with handling dairy products, and might lead
to food contamination through the transfer of bacteria from the employee to product
during its preparation. When unavoidable, hands should be effectively washed before
resuming work after such actions

10.3 Sanitary Requirements for Storage

a) Immediately after procuring, raw milk shall be placed in a clean place, which is
suitably equipped so as to prevent any kind of contamination.

b) The cans/ containers made up of mild steel metal and plastic material used for
storage and transportation of milk and milk products shall not be allowed.

c) If raw milk is brought to the dairy plant by a producer or farmer then it shall be
ensured that he brings it within four hours of milking and it shall be cooled as soon as
practicable to a temperature of 4ºC or lower and maintained at that temperature until
processed.

d) Where raw milk is collected daily from a producer, it shall be cooled immediately to a
temperature of 4ºC to 6ºC or lower and maintained at that temperature until
processed;

e) When the pasteurization process is completed, pasteurized milk shall be cooled

immediately to a temperature of 4ºC or lower. Subject to Paragraph 7 below, any
 dairy product not intended to be stored at ambient temperature shall be cooled as
quickly as possible to the temperature established by the manufacturer of that
product as suitable to ensure its durability and thereafter stored at that temperature.

f) Where dairy products other than raw milk are stored under cooled conditions, their
storage temperatures shall be registered and the cooling rate shall be such that the
products reach the required temperature as quickly as possible.

g) The maximum temperature at which pasteurized milk may be stored until it leaves
the treatment establishment shall not exceed 5ºC.

10.4 Wrapping and Packaging

a) The wrapping and packaging of dairy products shall take place under satisfactory
hygienic conditions and in rooms provided for that purpose.

b) The manufacture of dairy products and packaging operations may take place in the
same room if the following conditions are satisfied:

c) The room shall be sufficiently large and equipped to ensure the hygiene of the
operations; the wrapping and packaging shall have been brought to the treatment or
processing establishment in protective cover in which they were placed immediately
after manufacture and which protects the wrapping or packaging from any damage
during transport to the dairy establishment, and they shall have been stored there
under hygienic conditions in a room intended for that purpose;

d) The rooms for storing the packaging material shall be free from vermin and from dust
which could constitute an unacceptable risk of contamination of the product and shall
be separated from rooms containing substances which might contaminate the
products. Packaging shall not be placed directly on the floor; packaging shall be
assembled under hygienic conditions before being brought into the room, except in
the case of automatic assembly or packaging, provided that there is no risk of
contamination of the products;

e) Packaging shall be done without delay. It shall be handled by separate group of staff
having experience in handling and product wrapping and immediately after
packaging, the dairy products shall be placed in the designated rooms provided for
storage under required temperature.

f) Bottling or filling of containers with heat-treated milk and milk product shall be carried
out hygienically.

g) Wrapping or packaging may not be re-used for dairy products, except where the
containers are of a type which may be re-used after thorough cleaning and
disinfecting.

h) Sealing shall be carried out in the establishment in which the last heat-treatment of
milk or liquid milk-based products have been carried out, immediately after filling, by
means of a sealing device which ensures that the milk is protected from any adverse
effects of external origin on its characteristic. The sealing device shall be so designed
 that once the container has been opened, the evidence of opening remains clear and
easy to check.

10.5 Packaging and Labelling

The packaging design and materials shall provide protection for products in order to prevent
contamination, damage and accommodate required labelling as laid down under the FSS Act
and the Regulations there under. Only food grade packaging materials shall be used as
primary packaging material. Packaging materials like aluminium, tin and plastic shall
conform to the Indian standards as mentioned under the FSS Regulations from time to time.
The food packaging materials shall be inspected before use to avoid using damaged,
defective or contaminated packaging, which may lead to contamination of the product.

a) The wrapping and packaging of dairy products shall take place under satisfactory
hygienic conditions and in rooms provided for that purpose.

b) The rooms for storing the packaging material shall be free from vermin and from dust
which could constitute an unacceptable risk of contamination of the product and shall
be separated from rooms containing substances which might contaminate the
products. Packaging shall not be placed directly on the floor.

c) Packaging shall be done without delay followed by labelling. If it is not the case,
appropriate procedure shall be applied to ensure that no mix-ups or mislabelling
could occur. It shall be handled by separate group of staff having experience in
handling and product wrapping and immediately after packaging; the dairy products
shall be placed in the designated rooms provided for storage under required
temperature.

d) Packaging material/wrapping materials shall be protected from external

environment/contamination during transport and storage. Facilities shall be
established for safe and hygienic storage of packing materials at the dairy plant.”

e) Wrapping or packaging may not be re-used for dairy products, except where the
containers are of a type which may be re-used after thorough cleaning and
disinfecting.

f) “Packaging of milk and milk products shall be carried after processing. The packages
should be designed so as to ensure they are tamper proof and are not easily
damaged during general handling /operation. Once the packages are opened it
should be easily identifiable and cannot be duplicated against a fresh/unopened
package”.

g) The ink used for printing of primary food packaging should be of food grade quality.
This should comply with IS 15495 standards or other international standards for use
in food packaging and printing.

10.6 Date of Manufacturing or Packing

a) The date, month and year in which the commodity is manufactured, packed or pre-
packed, shall be given on the label:
 b) Provided that the month and the year of manufacture, packing or pre-packing shall
be given if the “Best Before Date” of the products is more than three months:

c) Provided further that in case any package contains commodity which has a short
shelf life of less than three months, the date, month and year in which the commodity
is manufactured or prepared or pre-packed shall be mentioned on the label.

d) Labelling of Best Before or Use By Date

Note:

 Month and year may be used in numerals (c) Year may be given in two digits

 On packages of Aspartame, instead of Best Before date, Use by date/recommended

last consumption date/expiry date shall be given, which shall not be more than three
years from the date of packing;
11. Financial Details
11.1. Project Fixed Capital
Details of Fixed Assets

A Water Supply
1 Water Supply with overhead tank, pump and pipeline 34,000
B Electrification

1 Electrical Installation 22,000

C Plant & Machinery

Sl. No. Particulars Specification Qty Unit Price total
1 Milk storage tank 1 35,000 35,000
2 Balance Tank 1 15,000 15,000
3 Milk Homogenizer 1 195,000 195,000
4 Milk Pasteurizer 1 275,000 275,000
5 Cream Separator 1 31,000 31,000
6 Boiler 1 165,000 165,000
7 Pump 1 17,000 17,000
8 Chiller 1 275,000 275,000
9 Butter Churning Machine 1 135,000 135,000
10 Ghee Boiling Kettle 1 85,000 85,000
11 IBT Type chilling machine 1 145,000 145,000
12 Pouch Filling Machine 1 215,000 215,000
Material handling and other
13 Equipment’s 1 350,000 350,000

Total 1,938,000
D Miscellaneous Expenditure
1 Insurance premium of assets 30,000
2 Consultancy Fees 70,000
Total 100,000

11.2. Project Variable Expenses

Details of Recurring Expenditure
A Details of raw material (per annum @ 100%)
Rate/Unit Qty/annum Total Cost
Sl. No. Items Unit Qty/day
(Rs) (kg) (Rs)
1 Milk Ltr 48 2000 730,000 35,040,000
Total 2,000 730,000 35,040,000
Details of salary and other benefits
Salary
Total
Per
Sl. No. Type of Workers No. of Worker Salary per
Month/he
Annum (Rs)
ad (Rs)
Skilled Worker
1 3 10,000 360,000
(Technician/Machine Operator)
2 Unskilled Worker/Helper 15 7,500 1,350,000
Grand Total 18 1,710,000
11.3. Details of Sales
Details of sales (Per annum @100% capacity)
Rate per Quantity Quantity
Sl. No. Type of products Unit Total (Rs)
unit (Rs) per day per annum
1 Ghee kg 900 90 27,000 24,300,000
2 Low Fat Paneer Kg 160 350 105,000 16,800,000
Total 440 132,000 41,100,000
11.4. Project Balance Sheet

Liabilities Y1 Y2 Y3 Y4 Y5 Y6 Y7
Opening Capital - 2,710,870 2,645,465 2,715,511 2,785,077 2,845,942 2,976,092
Add: Introduced 2,500,000
Add: Profit 765,870 774,595 865,046 944,566 1,020,865 1,105,150 1,198,892
Less: Drawing 555,000 840,000 795,000 875,000 960,000 975,000 998,000
Closing Capital 2,710,870 2,645,465 2,715,511 2,785,077 2,845,942 2,976,092 3,176,984
Term Loan from Bank 0 0 0 0 0 0 0
Current Liabilities
Cash Credit from Bank 0 0 0 0 0 0 0
Sundry Creditors 142,800 157,080 172,788 190,067 209,073 229,981 252,979
Expenses Payable 178,500 196,350 215,985 237,584 261,342 287,476 316,224
Current Provisions 328,230 331,970 370,740 404,820 437,510 473,640 513,810
Total Current Liabilities 649,530 685,400 759,513 832,470 907,925 991,097 1,083,013
Total Liabilities 3,360,400 3,330,865 3,475,024 3,617,547 3,753,868 3,967,189 4,259,997
Assets
Fixed Assets 1,994,000 1,994,000 1,994,000 1,994,000 1,994,000 1,994,000 1,994,000
Less Depreciation 299,100 553,335 769,435 953,120 1,109,252 1,241,964 1,354,769
Net Fixed Assets 1,694,900 1,440,665 1,224,565 1,040,880 884,748 752,036 639,231
Current Assets
Sundry Debtors 187,400 250,510 438,087 573,799 659,869 758,850 872,677
Inventories 340,800 374,900 412,400 453,600 499,000 548,900 603,800
Cash and Bank Balance 54,600 73,820 89,902 108,188 125,060 163,693 226,209
Other Current Assets 1,082,700 1,190,970 1,310,070 1,441,080 1,585,190 1,743,710 1,918,080
Total Current Assets 1,665,500 1,890,200 2,250,459 2,576,667 2,869,119 3,215,153 3,620,766
Total Assets 3,360,400 3,330,865 3,475,024 3,617,547 3,753,867 3,967,189 4,259,997
11.5. Calculation of Depreciation

Total depreciation
Rates of Depreciation Cost/ W.D.V. 15%
for the year (Rs)

1 1,994,000 299,100 299,100

2 1,694,900 254,235 254,235
3 1,440,665 216,100 216,100
Year 4 1,224,565 183,685 183,685
5 1,040,880 156,132 156,132
6 884,748 132,712 132,712
7 752,036 112,805 112,805

11.6. Projected P&L

Year ending March 31st
Description
I II III IV V VI VII
Capacity Utilisation 65 70 75 80 85 90 95
Revenue
Sales 26,715,000 28,770,000 30,825,000 32,880,000 34,935,000 36,990,000 39,045,000
Opening Stock of Finished Goods - -244,800 -269,300 -296,200 -325,800 -358,400 -394,200
Closing Stock of Finished Goods 244,800 269,300 296,200 325,800 358,400 394,200 433,600
Total Income (A) 26,959,800 28,794,500 30,851,900 32,909,600 34,967,600 37,025,800 39,084,400
Expenditure
Opening stock of Raw Material - 96,000 105,600 116,200 127,800 140,600 154,700
Purchase (Net) of Material 22,776,000 24,398,000 26,200,714 28,007,429 29,807,893 31,586,298 33,341,093
Closing Stock of Raw material 96,000 105,600 116,200 127,800 140,600 154,700 170,200
Raw Material Consumption 22,680,000 24,388,400 26,190,114 27,995,829 29,795,093 31,572,198 33,325,593
Repair & Maintenance- Machinery (@5% of
99,700 104,700 109,900 115,400 121,200 127,300 133,700
Cost)
Electricity & Utility expense 542,600 569,700 598,200 628,100 659,500 692,500 727,100
Administrative salaries and wages 1,710,000 1,795,500 1,885,300 1,979,600 2,078,600 2,182,500 2,291,600
Other Misc Expenses [@2% of sales] 534,300 575,400 616,500 657,600 698,700 739,800 780,900
Total Cost 25,566,600 27,433,700 29,400,014 31,376,529 33,353,093 35,314,298 37,258,893
Profit Before Depreciation, Interest and
1,393,200 1,360,800 1,451,886 1,533,071 1,614,507 1,711,502 1,825,507
Tax
Depreciation 299,100 254,235 216,100 183,685 156,132 132,712 112,805
Profit Before Interest and Tax 1,094,100 1,106,565 1,235,786 1,349,386 1,458,375 1,578,790 1,712,702
Interest on Term Loan 0 0 0 0 0 0 0
Interest on Working Capital Loan 0 0 0 0 0 0 0
Total Interest Paid 0 0 0 0 0 0 0
Profit Before Tax 1,094,100 1,106,565 1,235,786 1,349,386 1,458,375 1,578,790 1,712,702
Income Tax 328,230 331,970 370,740 404,820 437,510 473,640 513,810
Profit after Tax 765,870 774,595 865,046 944,566 1,020,865 1,105,150 1,198,892
11.7. Projected Cash Flow
Period Ending: I II III IV V VI VII
Cash & Bank Balance at Beginning - 54,600 73,820 89,902 108,188 125,060 163,693
Cash Inflow during the Period 3,915,400 810,465 939,159 1,017,524 1,096,320 1,188,321 1,290,808
Cash Outflow during the Period 3,860,800 791,245 923,077 999,238 1,079,448 1,149,688 1,228,292
Closing Cash & Bank Balance 54,600 73,820 89,902 108,188 125,060 163,693 226,209

11.8. Projected Loan Repayment

Year Interest EMI Principal
1 0 0 0
2 0 0 0
3 0 0 0
4 0 0 0
5 0 0 0
6 0 0 0
7 0 0 0
Total 0 0 0
11.9. Calculation of DSCR, IRR and BEP
Year I II III IV V VI VII
Net Sales 26,715,000 28,770,000 30,825,000 32,880,000 34,935,000 36,990,000 39,045,000
Net Profit 765,870 774,595 865,046 944,566 1,020,865 1,105,150 1,198,892
Depreciation 299,100 254,235 216,100 183,685 156,132 132,712 112,805
Cash Accruals (a) 1,064,970 1,028,830 1,081,146 1,128,251 1,176,997 1,237,862 1,311,697
Principal 0 0 0 0 0 0 0
Interest 0 0 0 0 0 0 0
Total (b) 0 0 0 0 0 0 0
DSCR NA NA NA NA NA NA NA
Average DSCR NA
Calculation of Break-Even Point (BEP)
Sales 26,715,000 28,770,000 30,825,000 32,880,000 34,935,000 36,990,000 39,045,000
Variable Cost 22,680,000 24,388,400 26,190,114 27,995,829 29,795,093 31,572,198 33,325,593
Contribution 4,035,000 4,381,600 4,634,886 4,884,171 5,139,907 5,417,802 5,719,407
Fixed Cost 2,886,600 3,045,300 3,209,900 3,380,700 3,558,000 3,742,100 3,933,300
BEP Sales 19,111,653 19,995,728 21,347,920 22,758,705 24,183,069 25,549,159 4,256,000
Average BEP sales 19,600,319

Calculation of Internal Rate of Return (IRR)

Year PAT Depreciation Cash Accrual
Sl. No.
Cash outflow at beginning -2,500,000
1 I 765,870 299,100 1,064,970
2 II 774,595 254,235 1,028,830
3 III 865,046 216,100 1,081,146
4 IV 944,566 183,685 1,128,251
5 V 1,020,865 156,132 1,176,997
6 VI 1,105,150 132,712 1,237,862
7 VII 1,198,892 112,805 1,311,697
IRR 31.6
Payback Period 2 Years 5 Months
11.10. Summary of Project Cost
Sl. No. Name of Assets Amount (Rs)
1 Irrigation/Water Supply 34,000
2 Electrification 22,000
3 Plant & Machinery 1,938,000
4 Insurance 30,000
5 Consultancy Fees 70,000
Total Fixed Cost 2,094,000
Recurring 406,000
Cost of Project 2,500,000