REPORT ON DAL MILL

& WAREHOUSE
By- Shivam Pandey
Why a Dal Mill ?
A dal processor charges about 25% of the total
cost of dal to the consumer.
This margin could be saved by farmers to help
them get better prices for their produce.
The dal mill help generate more share capital
for the FPC.
More value addition to the dal fetching higher
prices.

Why a Warehouse ?
The farmers who lack storage space and store
the produce and save it from spoilage.
The farmers can refrain from the distress
selling and sell their produce only when the
price is right for them.
Farmers can avail loan from banks on the
produce stored in the warehouse.
Questions to be answered
What should be the size of the dal Mill ?
What should be the Business model to be
followed ?
The dal milling machine should be branded or
assembled ?
Size of the dal Mill
The total amount of dal produced yearly in
Kodangal FPC

VILLAGE NAME LAND(ACRES) RED GRAM AREA
YIELD
/ACRE(QTLS)
RED GRAM
PROD(QTLS)
KODANGAL 8785 6149 5 30745
KONDAREDDY
PALLY 2800 1960 5 9800
UDEMESHWARA
M 1135 794 4 3176
PATA KODANGAL 1000 720 4 2880
PARSAPUR 3337 2002 4 8008
ERANPALLY 2748 1923 4 7692
Total 62301
Assuming almost 300 working days in the dal
mill, the per day processing capacity required
is
=> (Total Production/No. of days)
= 6230 Tons/ 300 days
= 20.76 i.e. Approx 20 Tons/day
Business Model to be followed
There are two kinds of business model to be
followed
Transfer Pricing Business model
Service Pricing Business model
In Transfer Pricing the raw material is
procured and processed material is sold to
the whole seller.
In Service Pricing only the service charge for
the processing is charged.
Transfer Pricing Vs Service
Pricing
# Particulars Transfer Pricing Service Pricing
1 Fixed Assets 11.1MINR 11.1 MINR
2 Working Capital 7.6MINR 0.13MINR
3 Income from
Warehouse
1.2MINR 1.2MINR
4 Net Profit 21.7MINR 1.76MINR
5 Net Profit Ratio 18.58% 31.82%
6 ROI 115.69% 15.75%
7 BEP 14.54% 61.2%
Branded Vs Assembled dal mill
# Factors Branded Assembled
1 Investment 6.5MINR 3MINR
2 Duration for Erection 2 Months 3 Months
3 Flexibility in Design Negligible High
4 Scope for Expansion NO YES
Optimistic, Pessimistic & Realistic
Scenarios
# Particulars Pessimistic Realistic Optimistic
1 Rate of Interest 15% 12% 10%
2 Risk factor 20% 10% 0%
3 Depreciation 20% 15% 10%
4 Recovery 75% 83% 85%
5 Net Profit Ratio 5.85% 15.10% 19.16%
6 Return On
Investment
32.16% 91.79% 119.28%
7 Break Even Point 41.36% 17.06% 11.88%
Various Dal mill Visit Summary
The plants mostly work for 6 to 7 months in a year. The
months of working are from December to June.
A few plants which work beyond the months of June
have wood fired dryer which increases the processing
cost.
The plants during the peak load may even work over
the rated 100% efficiency of the plant.
Majority of the plants do not have SORTEX machines
they have outsourced this work.
All the plants up to the capacity of 20 Tons per day
have 2 acres or less land.



The entire shaded portion of the land which consists of
actual processing unit, office, sanitation facilities for
the workers and even some rooms for the workers is
covered in the area of 8000 square feet
There is a government rule that any given point of time
the pulses in any form in the plant are not to exceed
1000 quintals.
None of the private mills visited had any sort of
warehouse.


Documents for Land
Record of Revenue from 1953 to 1980 , 1989 to 1990
and 1999 to 2000.
Searching Encumbrance certificate for 13 years
Patta Passbook
Title Deed
Link Documents
Permissions for Dal Mill
Gram Panchayat Permission & NOC
Pollution Certificate
Conversion of Agricultural to Non
Agricultural Land from Revenue Divisional
Office
Factory registration & License to work at
District Industry Center.
Marketing License will be obtained in 1 week





Form A for the electricity connection.
Registration under Small Scale industries.
Food Grain license from the joint collector of
the district.
Registration of the unit to the fire station.
VAT Registration.



Pre-requisites for warehouse
ISO 9001:2008 certification
NOC from fire Department
Insurance certificate
Pest control Program
Warehouse layout diagram
On-site Inspection
Final Suggestions
Should go for a plant that allows for minimum
amount of manual labor to be employed.
SORTEX machine benefits should be
outsourced, and procure it in future if the
capital allows it.
Instead of straight away going for
manufacturing plant the Kodangal FPC should
try to take an already existing Dal mill on lease
to have an experience.
FPC should Opt for Assembled type dal mill
with transfer Pricing Business model.
Final Deliverables
The PERT Chart of the activities in the construction of
Dal Mill.
Quotations for the Dal Mill.
The Agreement between FPC and the suppliers.
Mr. Vishwanathan Reddy, Secretary of Gulbarga Dal
Mill Association agreed to provide the services of
Consultant, Fitter and the civil contractor free of charge
to Kodangal FPC.
Blueprint of the civil construction will be prepared by
the architect in District Industry Centre at
Mahbubnagar.
Business Plan of the Dal Mill in Excel.
Final Report in Word Format.
THANK YOU