PROJECT PROFILE FOR SETTING UP A MEAT PROCESSING PLANT

INTRODUCTION
This profile envisages the establishment of a plant for the processing of cattle meat
with a capacity of 1000 tonnes per annum. The total investment requirement is
estimated at 10.00 Crores, out of which Rs 3.50 crores is required for plant and
machinery. Poultry meat is the fastest growing sector of Indian animal production.
The plant will create employment opportunities for about 90 persons
There is a large potential for setting up of modern slaughter facilities and
development of cold chains in meat and poultry processing sector. India has several
integrated mechanized slaughterhouse-cum meat processing plants and has facilities
for slaughtering, processing, freezing packing and cold storage of meat. Refer
containers are easily available for factory stuffing of frozen meat. Some of the
exporters have started backward integration for rearing of animals wherein they
provide veterinary health coverage and concentrated feed in the catchment area.
Skilled and technical manpower for slaughtering, processing, packaging etc. of meat
is adequately available in the country.
MARKET & DEMAND ANALYSIS
The product envisaged here is mainly for export. Thus to estimate the potential
market for the product, it was found more appropriate to rely on export market
rather than local demand. The meat industry is the collective of diverse businesses
that together supply much of the food energy consumed by the world population.
Even though food processing is among the largest industries, India ranks fifth in
terms of production, consumption, export and expected growth. India has enormous
growth potential from its current status of being the world's second largest food
producer to be the world's number one producer.
Meat processing industry also is of enormous significance for India's development
because of the vital linkages and synergies that it promotes. Meat processing covers a
spectrum of products from sub-sector comprising animal husbandry and poultry
farms, and bulk frozen meat, packaged meat, ready-to-eat processed meat products.
While India has an abundant supply of meat, the meat processing industry is still
nascent.
Industry analysts say that the demand for meat products is bound to increase as they
foresee a very good future for the take-away ready-to-eat dishes being sold in the
super markets which are opening outlets in big metros. There is a rapidly increasing
demand for processed food (meat) caused by rising urbanisation and income levels.
This is supported by number of people preferring to live as nucleus family, rather
than joint families. Rise in employment with more of adult working ratio and
spending lesser time in the kitchen. In addition to prime factors like, change in
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consumer eating habits as well as rising demand for health, wellness and lifestyle
products, together with inflated take-home packages, and rise in family income
provides tremendous growth opportunities for the meat sector.
Much of the meat sold retail continues to be sold at wet markets, most of which are
to be found in open-air market places or streets. These markets provide a venue at
which the customer can buy live poultry or freshly slaughtered meat produce direct
from local farmers. However, these markets have gradually been removed from
many cities, while supermarkets and hypermarkets are now beginning to take their
place.
Processed meat products are mainly sold through new retail formats such as
supermarkets and hypermarkets. Organised supermarket chains are gaining
significance as sellers of processed meats, particularly for frozen and chilled
products.
This suits the increasingly sophisticated and demanding needs of urban consumers
with rising incomes. People are now able to buy more expensive cuts of meat than
before, leading to greater demand for variety and quality of produce.
The increasing availability of processed and packaged foods has also added to the
general growth in people's interest in food, and all of these factors add to the
growing demand for more variety and better quality of meat products. Sharp growth
in consumer demand has prompted meat producers to introduce greater efficiencies
into their organisations.
PROJECT PARAMETERS
Proposed Location
The envisaged plant is proposed to be located at Kozhikode District
Land
Land required- The envisaged plant will require a total land area of 7,500 m2, of
which 3000 m2 will be covered by factory and office buildings, stores, etc
Proposed Capacity
This profile envisages the establishment of a plant for the processing of cattle meat
with a capacity of 1000 tonnes per annum. The plant is assumed to start production
at 50% of its rated capacity in the first year and increase its production to 60% in the
second year.
Major Raw Materials
The major raw materials required for cattle meat processing and packing plant are
cattle, empty can and salt.
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Raw Materials

Qty

Cattle (head)
Empty can (Pcs)
Table salt (Tonnes)
Packing
material
(carton)

6250 Nos
20,00,000
1
500000

The utilities required for the plant are electricity and water.
Utilities
Requirement
Electricity
(Connected Load)
Water

Qty.
100 KVA
3

70,000 m

Plant & Machinery

The total cost of equipment and machinery required to produce 1000 tonnes of
processed meat per annum is estimated to be about Rs 3.50 crores. The list of
machinery and equipment is given below:
Description

Qty.

Electric hoists
Stunning box
Stunning gun
Platforms for cattle processing
Electric saw for cutting and splitting
Pneumatic knife
Hooks for various purposes
Pneumatic spreader
Sterilizer for processing tools
Processing and inspection tables
Pipe
rail
with
supporting
construction
Rail balances up to 500kg
Cattle balance up to 2000kg
Floor balance up to 200kg
Machine for Washing and cleaning
of stomach
Devise for casing processing
High effect pumps for washing

4
1
1
7
4
1
260
1
5
13
650m
2
1
1
1
1
2
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Pumps for discharging manure

Laboratory equipment
Stainless Tank
Gear Pump
Balance
Seaming Micrometer
Seaming Wire Gauge
Seaming Scale
Seam Band Saw Frame
Seam Band Saw
Vacuum Can Tester
Hand Can Tester
Saccharimeter
Inspection Bar
Thermometer
Salinometer
Boiler

2
1 set
2
1
20
2
2
2
2
10
2
2
2
2
15
2
1

Manpower
The manpower requirement of the plant will be 90 persons.
Implementation Period
The proposed plant is envisaged to be completed within one year.
MANUFACTURING PROCESS
The cattle supplied to the slaughterhouse are weighed on a cattle balance and then
unloaded along the reception ramp into pens for rest.
The cattle undergo a medical check up for the presence of any disease before they are
slaughtered. They are stunned by a gun in a box and afterwards slaughtered and
removed to the bleeding line where blood is collected in a basin. The carcasses are
loaded by electric hoist from the slaughter line to the processing line. Loading,
spreading of rear legs and dehiding are carried out on a three level plat form, and
final dehiding done on a two level plat form by means of a pneumatic knife.
The horns are removed by electric saw, and the heads inspected and washed. The
brisket is opened by electric saw, the entails inspected and extracted. Stomach and
casings are transported for cleaning. Carcasses are split into halves, which are
washed and inspected. The meat is cut on tables in a cutting room by means of
electric or hand operated saws and knives. Then, the meat is washed to remove
blood and kept in the chilled room.

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The meat is then dressed and superficial fat is removed before processing further
after trimming and chopping. The bones are removed and the meat is then cut to
uniform size of sliced chunks of 1.25 cm thickness. The meat is then soaked into salt
water for giving a salty taste and to kill the microorganisms. It is weighed and filled
into cans and seaming process will be carried out. After seaming the cans are fed into
a jet-spraying can washer for cleansing with a neutral cleanser. Then, the seamed
cans undergo sterilization immediately. The by products of cattle meat processing
industry represent a substantial part of the sales value of production derived from
the slaughter cattle. By products include edible fat, non-edible fat, hides, blood, bone
meal, glue etc. The efficient utilization of by products is essential for the economic
operation of a processing plant.
The envisaged plant needs waste water treatment plant that uses physico-chemical
system in order to abate the environmental pollution. The treatment process involves
settling, filtration, addition of flocculates and mixing, and floatation. The sludge from
the treatment plant is used as fertilizer.
PROJECT COST
The total investment cost of the project including working capital is estimated at Rs.
10 Crs. The major breakdown of the total initial investment cost is shown in below:
Total Cost
(Rs. Lakhs)
Land (2 Acres @ Rs. 30 lakhs/Acres)
Land Development
Building and Civil Work (3000 Sq. Mt @ Rs. 10000
/Sq. Mt)
Plant Machinery and Equipment
Utilities(Electrification & plumbing)
Misc Fixed assets
Consultancy Charges
Prel & Pre Operative Expenses
Contingency
Margin Money for Working Capital
Total Investment cost

60.00
5.00
300.00
350.00
20.00
17.00
5.00
93.40
22.72
126.88
1000.00

PROPOSED MEANS OF FINANCE

Promoter Contribution
Term Loan from KSIDC
Total

Rs. Lakhs
500.00
500.00
1000.00

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SALES TURNOVER
Based on the present world market an ex-factory price of Rs 280000.00 per tone is
adopted for financial analysis. Since the project is envisaged for export purpose, it is
recommended that the factory should engage itself in exporting the products
directly.
FINANCIAL INDICATORS
Optimum Utilization (% of installed capacity)
Sales Turnover (Rs. lakhs)
Profit before interest, depreciation & tax (Rs. lakhs)
Cash Profit (after interest) (Rs lakhs )
Net Profit (PAT) (Rs. lakhs)
Debt Equity Ratio
DSCR (average)
Break Even Point %
IRR (%)
Pay Back period (Years)
Moratorium

80%
2240.00
583.69
349.12
295.43
1:1
4.45
29.41
30
3 Yrs
1 Year Implementation
Period + 1 Year

CONCLUSION
The project requires capital investment of medium scale and can create medium
employment opportunity. The plant will have a backward linkage effect with the
livestock sector. The project is financially viable with an internal rate of return (IRR)
of 30 %.

Disclaimer:

The findings contained in this Project Profile are based on the initial information collated through primary and
secondary research, which is indicative in nature. Reference herein to any specific commercial product, process,
service by trade name, trademark, manufacturer, or otherwise, does not constitute or imply its endorsement,
recommendation, or favoring by KSIDC or any entities thereof.

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