This is Greenfield project on gathering vegetable waste and manufacturing solid fired biomass briquettes out of the same. Briquettes have a huge demand in industries and currently there is a shortage of supply, which gives us great potential to enter this field at the moment.
We propose to commission a plant to manufacture biomass briquettes. This plant would be an SSI, which would initially commence with a smaller capacity, with a vision to expand over the years to come. The location that has been finalized is Shirwal, a small town on the Mumbai – Pune – Satara highway, as the town is in close proximity to a few sugar factories and groundnut oil mills. Besides, sawdust, a main ingredient for manufacturing bagasse is also available in plenty within 100 km radius of the proposed location.
Total Capital Investment in the project is detailed below:
- Plant & Machinery: Approximately Rs. 16,00,000/- per machine, 2 machines planned initially taking the total machinery cost to Rs. 32,00,000/-. Each machine capable of 20 tonnes per day; hence the ideal production cycle in one month would be 1200 tonnes per month.
- Machinery Installation Expenses: Included in the machinery purchase price, however, additional costs for installation of machines expected to be around Rs. 50,000/- onetime cost.
- Renovation / Refurbishing Expenses: This includes all the work that needs to be done for sprucing up the existing plant and altering it according to our business requirements. This would entail a timeframe of around a month and incur an approximate cost of Rs. 10,00,000/-.
- Location & Land Costs: The ideal location to set up such a briquetting manufacturing unit would be in the Nashik – Pune – Satara belt, or Ahmednagar – Akola – Amravati belt, close to Nanded. This is because; the raw materials needed to manufacture briquettes are mostly available round the year in these areas within Maharashtra. The size of land needed to run such a facility depends on the type of raw material used, number of machines installed & production targets. The lease rentals depend on the size of the land available, proximity to the highway, facilities available such as easy transportation in the vicinity, proper 3 – phase industrial electric connection, whether it is a barren land or a ready-to-use plot covered with a shed, etc.
The initial refundable deposit for the plot shortlisted in Shirwal i. Rs. 6,00,000/-.
- Miscellaneous Expenses: A sum of Rs. 5,00,000/- needs to be kept aside for sundry and unexpected expenses that could come up during the project commissioning stage.
- Electric Connection & Installation costs
The location so selected has a transformer which is of 35 bhp; however, the machinery to be installed to manufacture briquettes requires a 100-bhp 3-phased connection. Hence the cable line and the transformer would have to be upgraded and this would cost approximately Rs. 2,00,000/-.
Approximate Revenue Expenditure required every month would be:
- Daily Electricity Costs
Electricity costs per month would be around Rs. 2,00,000/- out of which, only for running the 2 machines the cost could mount to around Rs. 1,50,000/- and the balance expenses for office and other consumption.
- Transportation – Inward & Outward
Transportation is expected to be the highest cost centre in this entire operational schema. Both Inward & Outward transportation is likely to cost around 0.80 paise per kg, totalling to an estimated Rs. 15,50,000/- per month.
- Labour: Local labour preferred as they reduce the cost of operation significantly. Also, having local labour means that the plant is safeguarded from all odds that it can be exposed to. One skilled operator would be however, required, to run the machinery aptly and ensure optimum production from the plant. Approximate Labour cost per month would be Rs. 65,000/- for a staff of 5 people including helpers & a skilled manager.
- Operational Cost: Piston Sleeve, Gaskets & Oil Filters need to be replaced once every month. Oil running the piston smoothly needs to be drained and re-filled once after a production cycle of 1000 tonnes, again approximately once a month.
Break – even period
The time needed to set up a biomass briquette manufacturing plant ranges from 2–3 months, depending on various factors such as availability of land, machinery and raw material. The first saleable produce from the plant can be targeted around 4–5 months from the date of actual commencement of the project. At an estimated production of 20 tonnes per day per machine, the break even period for the project shall be around 8.72 months.
Detailed project scoping and costing documents are available for download on Merar. Interested investors can contact us here as well.