Feasibility Study Report on Sugar Cane Juice
Sugar Cane Juice Factory is one of the best industries for getting foreign earning in the short run. Basically sugar cane factory is a cottage industry but now it turning in to big industry. Because of its properties, facilities it is now gaining more and more interest of the world wide. The demand of sugar cane juice is increasing world wide. So, to meet the demand of foreign market, exporting firms are producing more sugar cane juice in new packets and bottles. More over the demand is increasing day by day. To comply with the academic requirement of Marketing Management Bus- 315, Manarat International University Bangladesh. We are assigned to design a business report on sugar cane juice factory. At first we have taken a side of background of juice factory which is contributing the national earning by export. A particle observation was conducted to make the ‘sugar cane juice factory’ market demand through technical and financial aspects of proposed project. We have analyzed the projects profitability by four techniques namely NPV and playback period. All the techniques support the project. We have also analyzed the social east benefit aspects. It hoped that the project will contribute our national economy.
Matters Pages 1. Project background and history 2. Strengths, Weaknesses, Opportunities and Threats Analysis (SWOT) 3. Market and Demand Analysis 4. Technical Analysis 5. Financial and Economic Evaluation 6. Drinks based on sugarcane juice 7. Social Cost Benefit Analysis 8. Be Extremely Careful for Sugarcane Juice taking from open place:
1. Project background and history
Making hygienic and fresh bottled juice from sugarcane is what the project is all about. It is predominantly a raw-material oriented project having both domestic and export market orientation. This type of industry is considered to belong to the cottage industry of a country. And a LDC (Least developed country) like Bangladesh, cottage industry like this one can be just the right one to fit into the framework of the economic conditions and the general industrial development of the country. Initially the Industrial Policy of 1973 of Bangladesh emphasized on the development of small and medium scale industries so that it has distribution equity. Later the NIP-82 and other policies only deepened this strategy under SAF (Structural Adjustment Facility) and ESAF (Enhanced Structural Adjustment Facility) in the following form:
Industrial Tariff %(both on input and output) Domestic Industry Export oriented Industry 5% 0%
And since this is a new product in our country, it has a great opportunity to prosper.
1.1 The amazing sugarcane plant
Sugarcane is a giant tropical grass. It belongs to a family of grasses containing some 5000 species including barley, wheat, maize, rice and sorghum. It can trap the sun’s energy and convert it into sucrose (sugar) more effectively than other crop. Sugar is made in the plant’s leaves by a natural process called photosynthesis.
1.2 The perfect climate for sugarcane
Sugarcane prefers warm sunny weather, freedom from frost, well-drained soil and at least 1500 mm of rain or irrigation a year. This makes it highly suitable for the sub-tropical climate, which prevails on the coastal plains and river valleys along Queensland’s eastern coastline. Fine, relatively cool weather, immediately before harvesting, retards plant growth and increases sugar content.
2. Strengths, Weaknesses, Opportunities and Threats Analysis (SWOT)
1. Availability of raw material that is plenty of sugarcane,
2. Domestic as well as foreign sources of supply,
3. Very simple technology is used,
4. Availability of fund,
1. It is difficult to preserve both the sugarcane and the juice for too long,
2. It needs huge warehouse facility,
3. The color of the natural juice is not eye-catching,
4. It will not attract the large number of diabetes patients of Bangladesh
1. There is no energy drink in Bangladesh at present,
2. Difficulty for foreign energy drink to compete in Bangladesh due to alcoholic problem,
3. Possibility of greater acceptability due to its natural features,
4. It will have greater market share as it will serve both the market of juice and soft drink,
1. Consumers’ perception regarding the neutrality of the bottled juice,
2. Absence of such kind of natural energy drink in the market,
3. Many customers want to have the juice prepared in-front of them and drink instantly to get the real natural taste,
3. Market and Demand Analysis
3.1 Situational analysis and specification of objectives:
In Bangladesh, almost 9 months of a year is summer. So there always exists the demand for soft drinks, juice, energy drinks etc. Consumers of these are ready to buy 250 ml @ Tk. 10, 1000 ml @ Tk. 30 and 2000 ml @ Tk. 45.
In case of our sugarcane juice, from our primary data collected from personal contact with its consumers and producers, we find that on an average; it sells 15 glasses (200 ml per glass) per summer hour @ Tk. 5 per glass.
The dominant buyers of our product are the students and laborers. But the upper class of the society can also be attracted if we can market it as “Energy Drink” also.
The highest sale of the traditional sugarcane juice available right now is 400 glasses in a 10-hour day @ Tk. 5 that is 40 glasses per hour. The lowest sale is 80 glasses @ Tk.5 in a 10 hour day that is 8 glasses per hour. Normally the lowest sales days are the rainy days.
There is enough demand in almost 10 months of a year to run the juice business. For the other 2 months we can run the business of the bi-products to sustain in the market.
3.2 Collection of Secondary data
There have been some genuine problems in collecting secondary data. In Bangladesh, nobody is prepared to disclose much. Access is restricted everywhere. Moreover, as this is a new project in the context of Bangladesh, we were always facing the problem of lack of published data that signifies the reality. So we went mainly for internet to search some published data.
We found that there have already been technologies in western countries and even countries like Malaysia for producing bottled sugarcane juice. We found that it is suitable for venture through cottage industries.
3.3 Market Survey
As is evident from the above discussion that our secondary data collection was not sufficient for our purposes to be fulfilled, we went for a market survey.
Sampling Plan for the Survey and Its Result
> We conducted a sampling test in performing the survey. Our sample size comprised 100 consumers of different ages and professions,
> 55% of our sample is consumers of mineral water which is positive for our product,
> 50% is taking the sugarcane juice available right now which also is instrumental for us,
> 60% of the total people are either taking white drinks or fruit juices which justify the feasibility of our product,
> 71% are aware that bottled sugarcane juice are hygienic than the one available in the open market at present,
> 74% are aware of the unique features of sugarcane juice that it can give to human body which highly fruitful for acceptability of our product
Characterization of the Market
> The existing market is highly sophisticated,
> Highly characterized by multinational companies,
> Lack of domestic companies,
> Governmental facilities are available if our product is marketed through cottage industries as suggested by our secondary data,
> Ample domestic raw materials are available.
3.4 Market Planning
We will market our product in two forms namely:
* Bottled sugarcane juice,
* Non-alcoholic natural energy-drink.
We will educate and make aware our consumers of the unique features of sugarcane juice that it can give to human body, We will provide recyclable and attractive bottles and canes.
From the market demand analysis and other financial analysis we found it feasible to produce and sale 25,00000 liters each year.
4. Technical Analysis
4.1 Plant Capacity
The machine to be used for production has a capacity of 3000000 liters a year.
4.2 Material Inputs
In Asian countries, sugar and sugarcane juice are produced only from sugarcane, as the climatic conditions are suitable for cane cultivationThe usual sugarcane constituents along with their content in sugarcane as a % of total weight are as given below.
Constituent % Of total weight Water 69-75 Sucrose 8-16 Reducing sugars 0.5-2 Organic substances 0.5-1 Nitrogenous bodies 0.5-1 Ash 0.3-0.8 Fiber 10-16
Rainfall and temperature are the two important determining factors for the yield and quality of sugarcane. Although reduced level of rainfall can be substituted by irrigation or sprinkling of canal water. Every ton of cane cultivation requires approximately 60-70 ton of water under controlled conditions. But under field conditions the water requirement for sugarcane varies with variations in soil and climatic conditions. The efficiency of water uptake and use varies with different varieties.
4.3 Sugarcane Juice:
Sugarcane juice is acidic in nature. Besides sugar it contains many other organic and inorganic and soluble as well as insoluble substances in varying amounts, together called as non-sugars, to the extent of 3 to 7.5% of total quantity. These insoluble suspended matters make the juice viscous and turbid. The constituents of sugarcane juice as a percentage of total quantity are as given below.
Sugarcane Juice Constituents
Constituent % Of total quantity Water 75-85 Sucrose 10-21 Other sugars 0.3-3 Other organic substances 0.2-0.6 Nitrogenous bodies 0.5-1
4.4 Supply Program
Sugarcane grows in plenty in India, Bangladesh and similar other sub-tropical countries. Besides Asia, Australia possesses the largest market-share in this regard. Although there are bigger producers, Australia is one of the world’s largest and most reliable exporters of high quality sugar. Each year it ships more than four million tones a year, mainly to Asia, North America and the Middle East. Around 94% of Australia’s sugar output comes from Queens land and about 5% from northern New South Wales.
4.5 Location and Site
We have found that raw material for this project is available in Tangail, Pabna, Eashardi, Dinajpur, Kustia and in this region. Besides in our project plan we keep the provision of selling the trashed wastage to Pakshi Paper mill. Keeping every thing in consideration we have choosen the land in Kalihati thana of Tangail.
This land is financed by a financer. It has option to use the river to carry out the materials from other districts if necessary. Behind the plant, we will have land for cultivating sugarcane.
4.6 Project Engineering
Traditionally the popular local drink sugarcane juice is made with a special machine (like on the picture below) out of fresh sugarcane.
Our Version of Making and Preserving Bottled Sugarcane Juice.Traditional sugarcane juice, a highly valued local drink, as is shown in the above picture only keeps for a few hours. Thanks to JUCANN’Tech’s process, it can keep for several weeks, or even several months, and it maintains its authentic taste.
4.6.1 Sugarcane Beverages (Technology Source: CFTRI):
Sugarcane juice is a nutritious product containing natural sugars, minerals and organic acids. At present the juice is extracted by street vendors in an unhygienic way. Further, it cannot be stored even for couple of hours as it deteriorates fast. Sugarcane being available in plenty, it can be utilized for making hygienically prepared and processed beverages. This product has a good market potential. Small units can easily be started in rural areas and the products can be sold in semi urban and urban areas.
The process is simple and consists of crushing, classification and filtration to obtain clear beverages with addition of permitted preservatives at suitable level and then bottling.
How Sugarcane juice is made:
Bottling of Sugarcane Juice
Material input through bottling, everything will be under automation process.
Automated Bottling Line
High-speed move bottles to stations on a
Conveyor belts production line to automatically fill, cap, seal, and package the bottles quickly and efficiently. It will make the production process easier and faster.
Process of bottling sugarcane juice
1. Function : To preserve the sugarcane juice in bottles 2. Specification : (a)Overall dimension : — (b) Capacity : Depending on the production capacity Power required Depending on the production capacity 3. General
Information : A technology has been developed for preserving the sugarcane juice in bottles for a period up to six months. The process of preserving the sugarcane juice involves peeling, crushing, filtration, pasteurization and bottling. Sodium Benzoate @ 125 ppm is added as preservative. The bottled juice can be stored without any loss in the quality and flavor for six months at room temperature. The cost involved for the production of one bottle (200 ml) of juice is Rs.1.50. Consumer acceptability of the preserved juice was evaluated and found to be 98 per cent.
4. Cost of the unit : Rs. 2 lakhs investment for a minimum capacity 5.
Cost of operation Rs. 1.50 per bottle of 200 ml.
4.8 TECHNIQUE IN PRESERVING SUGARCANE JUICE
Sugarcane juice is a popular beverage in Malaysia. Its unique flavor and sweet taste makes a very thirst quenching drink especially when consumed chilled. However, browning and changes in flavor and viscosity have been identified as major problems in sugarcane juice during storage. These have limited the distribution of product to bigger and distant markets. Factors causing the browning reaction and spoilage were investigated. There was no significant effect of using additives to preserve the color of juice extracted from heat treated stems. Using this new technique, storage was enhanced from four days to twelve days at 5ºC.
4.9 Chemical Processing (Improving the juice quality):
5. Financial and Economic Evaluation
5.1 Cost Analysis
Fixed cost: Table: 6
Particulars taka Cost of machine 10,000,000 Cost of building 2,500,000 Cost of furniture and fixture 200,000 Cost of land 1,000,000 Cost of bottle 600,000 Industry setup 100,000
Insurance of plant 150,000 Total costs 14,550,000
Cost data(variable &fixed) Table:7
Particulars Variable(Per unit) Fixed(Per year) Direct expenses: Raw materials 6.50 Direct labor 0.30 Cost of bottle 600000 Factory overheads: Fuel and lubricants 0.10 Depreciation of plant 1000000 Administrative overheads: Staff cost 400000 Depreciation of furniture 20000 Repair and maintenance 5000 Telephone and postage 2000 Insurance 15000 Traveling and conveyance 5000 Legal and professional expense 50000 Printing and office supplies 20000 Selling and distribution expenses Carriage outward 0.10 Advertisement expense 200000 Staff cost 0.20 Postage and currior 3000 Office supplies 12000 Office and godown rent 30000 Licence fee 5000 Total 7.20 2367000 Break even point 132978 5.4 Source of financing:
* Personal sources
* Institutional sources
new processes and products to increase the added value of sugarcane ten-fold. Its business policy will be focused on transferring technology to producers (distillers, sugar producers, fruit juice producers), aimed at The industrial-scale use of sugarcane has remained confined to the production of sugar and rum, products that today have little added value. Yet its processing potential is enormous. Researchers from INRA1 in Guadeloupe have adapted the ultra filtration technique that makes it possible to stabilize sugarcane juice in order to make it process able in many different waysThe process developed by the INRA Guadeloupe researchers makes it possible to solve two of the main problems concerning raw sugarcane juice: the large amount of germs present and colloidal impurities. The ultra filtration technique respects the juice’s qualities and makes it easy to subsequently process and preserve it. Traditional sugarcane juice, a highly valued local drink, only keeps for a few hours. Thanks to JUCANN’Tech’s process, it can keep for several weeks, or even several months, and it maintains its authentic taste.
But other product families can be developed along the lines of the patented process: festive bubbly drinks or a sugarcane “Sauternes style” wine, carbonated drinks competing with cola drinks, a natural sweet ingredient for producing ice-cream, desserts and fruit drinks, health-fitness products thanks to the richness of sugarcane juice in minerals, vitamins and energy.
7. Social Cost Benefit Analysis
7.1 Social cost:
This project has a few social costs:
> It may create a temporary jobless situation for traditional sugarcane juice producer
> It may have some opportunity loss of making sugar from sugarcane
7.2 Social benefit:
The juice is extracted from the cane by pressing it through iron rollers. It is nutritious and refreshing. It contains about 15 per cent natural sugar and is rich in organic salts and vitamins.
Originally, sugarcane was grown solely for chewing in the pacific and South Eastern Asia, a custom which has now spread throughout most of the tropics. The juice can also be used for health improvement.
Sugarcane energy values per 100 gms edible portion
Food Value Minerals and Vitamins Moisture 90.2% Calcium 10 mg Protein 0.1% Phosphorus 10 mg Fat 0.2% Iron 1.1 mg Minerals 0.4% Calorific Value – 39 Carbohydrates 9.1% Total 100%
drinking or sweetening. In hot summer days, it forms a soothing drink. A little lime juice may be mixed in the juice to improve its flavor.
Natural Benefits and Curative Properties Sugarcane juice has many medicinal properties. It strengthens the stomach, kidneys, heart, eyes, brain and sex organs.
The juice is beneficial in fevers. In febrile disorders which causes [ever, when there is great protein loss, liberal intake of sugarcane juice supplies the body with necessary protein and other food elements.
Mixed with lime juice, it can hasten recovery from jaundice. It is, however, very essential that the juice, must be clean, preferably prepared at home. Resistance is low in hepatitis and any infected beverage could make matters worse.
The juice sucked from the sugarcane can prove highly valuable in case of weak teeth due to lack of proper exercise resulting from excessive use of soft foods. It gives a form of exercise to the teeth and makes them strong. It also keeps the teeth clean and increases their life.
Sugarcane is the most important member of the plant kingdom with a metabolism leading to the accumulation of sucrose. It is transported as glucose and fructose within the growing plant. The crop provides the cheapest of energy-giving food.
The sugarcane belongs to the grass family. It is a perennial plant which grows from 2.5 to 4.25 meters. With sufficient care, it grows up to 7.5 meters. The diameter of steins varies from 2.5 to 8 cm. It has several joints after every few centimeters.
How Sugarcane juice is Made Extraction
Evaporation Preserver mixing
Sugarcane is now grown all over the world. India stands first in sugarcane cultivation, followed by Brazil, Cuba, China, Mexico, Pakistan, the U.S.A., South Africa and Columbia.
This sugarcane juice will make a new area in beverage industries. It will be beneficial to all classes of people. It has the fame over the world and we hope that it is just a matter of time that sugarcane juice will be a prospect for our country.