LIVE PROJECT

ON

BHUSHAN FLOUR MILL

Submitted By: Group A9 & B9

Abhirup Anand

Karthik Goel

Rishabh Jain

Rupjyoti Borah

Shipra Sinha

Aman Tewari

Bhanu Pratap Singh

Rukmini Ganguly
 CONTENTS

Sl No Title
1 Introduction
2 About The Company
3 Wheat Market in India
4 Wheat Production Scenario in West Bengal
5 Effect on Bhushan Flour Mill
6 SWOT and Porters Five forces Analysis
7 Brief Financial Analysis
8 Supply Chain and Processes Analysis
9 Marketing and Sales promotion
10 Scenario for export of wheat to Saudi
Arabia
11 Conclusion
12 References

INTRODUCTION

Scope of the Project:

Bhushan Flour Mill faces problems as it has to procure wheat from other
states as the wheat epidemic in West Bengal has disrupted the wheat supply
chain for the company. The costs has increased largely which has resulted in
decrease in profit margins. We have to suggest cost cutting techniques and
marketing strategy for the company to increase profit margins.

Aim and Objective:

 Suggest methods for cost cutting and better supply chain management
 Devise a marketing strategy to increase sales for Bhushan Flour Mill
 Feasibility analysis for export of flour to Saudi Arabia

ABOUT THE COMPANY

Bhushan Flour Mills Private Limited is a Plant which manufactures

Flour(Maida) , Atta and related products. It was registered at Registrar of
Companies, Kolkata on 06 August, 2013 and is categorised as Company limited
by Shares and an Non-govt company. Bhusan Flour Mills Private Limited is
situated at Kumorpara, Balighata P.O. – Raghunathganj, P.S. – Raghunathganj,
Murshidabad WB 742225, West Bengal.
Bhusan Flour Mills Private Limited's Corporate Identification Number (CIN) is
U15122WB2013PTC196174 and Registration Number is 196174.

The mill comes under Food processing industry . The primary production of
Bhusan Flour Mill is Wheat Atta , Maida along with related products like Suji
, Wheat Flour , Wheat Suji , Rava and Cattle Fodder.

The Mill uses Buhler an innovative circulation system with the high-
compression PesaMill™ which enables the
production of authentic Atta and flour.

Quality, texture and taste are identical to Atta and

flour produced on traditional Chakki stone mills.
The Buhler mill replaces up to twenty traditional
stone mills. Additional advantages include increased yield, reduced energy
consumption and the ability to produce different Atta flour qualities on the same
milling system. It also enables the flexible adjustment of flour characteristics to
the market requirements. The one of a kind technology and robust design of the
Bühler Atta process with PesaMill™ ensure a long lifetime and optimal
investment protection.

Currently, the company has 3 Active Directors / Partners:

Ashok Ghosh,
Tapan Ghosh,

Subhadip Ghosh

Wherein the majority share is with Mr. Subhadip Ghosh

Wheat Market in India

Wheat is the most widely produced cereal in the world. According to Food and
Agriculture Organisation, in 2014, the total wheat production is 729 Mn tonnes
across the globe. China is at the top in wheat producing countries with a
production capacity of 126 M metric tons and India is the 2 nd largest wheat
producer with the production of around 95 M metric tons. India and China
combined account for around 20% of the total wheat produced across the globe.
There are various varieties of wheat flour, which are differentiated based on the
amount of gluten they contain. Gluten is the wheat's natural protein responsible
for giving the structure to the baked goods. Flours made from hard wheat
contain high protein varieties and have higher gluten content and are known as
strong flours. Whereas, the flour made from soft wheat have low protein content
as well as lower in gluten and are known as weak flours. The wheat flour helps
to lower the cholesterol levels and also assists in regulating blood sugar levels.
It also provides several health benefits ranging from controlling obesity to
improving the body's metabolism. Wheat flour has numerous applications in the
food industry for the preparation of many food items like Chappati , bakery
products, noodles, pasta etc.

Wheat Flour Market Segmentation and Targeting

The wheat flour market can be segmented on the basis of

Product type: This depends on the way of consumption and can be divided into
All-purpose flour, Cake Flour, Pastry Flour, Bread Flour etc

End usage: This depends on the customer base, whether it is for domestic use ,
commercial use. Commercial usage can be for institutions, bulk orders, food
service industry, food manufacturers.

Application: This depends on the product that it is used for like Chapatti,
Paratha, Bakery Products, Snacks, and Noodles etc

Distribution channel / Demographic:

This depends on whether the market is suitable for direct or indirect sales.
Indirect sales include sales through ration shops, convenience stores, retailers,
super markets etc. Direct sales include direct customers like institutions,
factories, hotels and likewise.

Geography: This depends on the land available for cultivation and the market
for the flour in that particular area as well as opportunity for export.
When it comes to selling wheat flour, there is indeed a wide range of available
customers. In essence, the target market is not be restricted to just a group of
people, but everyone who reside in the target market locations. In view of that,
market research is required and ideas need to be taken to determine what the
target market would be expecting from the manufacturer.

Differentiation

Wheat Flour can be differentiated on the basis of the quality. The flour
manufacturer needs to come up with new and innovative packaging and product
proposition to differentiate themselves and to ensure sustainable long-term
growth of the mill. Consumers eventually give more importance to factors like
quality, origin of ingredient, nutritional value and related convenience factors.

Market Growth and Future Prospects

The Packaged Wheat Flour Market in India started breaking the old age
traditions of grinding wheat at local Chakki mills by growing at a whooping
Compound annual growth rate (CAGR) of 19% and may likely to be double the
current size by end of this decade to touch Rs 15,500 crore by 2019-20.
according to IKON Marketing Consultant’s latest pan India research report
titled ‘The Indian Packaged Wheat Flour (Atta) Market – Breaking the
Traditions’.

The report noted that the wheat flour market dominated by local mills in India;
the branded packaged wheat flour segment is growing rapidly in the country as
it offers better quality, nutritional value and convenience.

The Indian packaged wheat flour market consists a few national players and
large number of regional and private label brands operating at pan India or
restricted geographic market based on their size and capacity.
The annual per capita consumption of packaged wheat flour in India remained
nearly at 1.85kg during fiscal 2014-15. However, urban market leads in per
capita consumption of packaged wheat flour with almost 5.5kg, making the
packaged wheat flour an urban phenomenon.

The current market trends

IBISWORLD published a report that stated that the Flour Milling industry of
which Wheat Flour Mill Production line of business is a part of is characterized
by a low level of market share concentration. The report stated that in 2016, the
top three players are expected to account for less than 31.0 percent of industry
revenue. However, with the entry of large number of market players having
better quality, fresh and convenience-packaged flour; the wheat flour
consumption trends have been shifting towards the branded packaged atta.

The competition

The Indian packaged wheat flour market consist of plenty of brands each one is
trying to distinguish themselves with origin of wheat, manufacturing process,
quality, taste, textures and price to attract customers. Besides leading brands,
there are more than 500 regional brands in India. Each flourmill has its own
brand, sometimes even more than 2 brands of packaged wheat flour.

Consumer insights

The urban consumers dominate the consumption of packaged wheat flour

market; which includes working couples, nuclear family, health conscious
consumes highest packaged wheat flour in India and rural consumers prefer
brands or a particular variety of their choice

The various underlying factors driving the consumers for purchase of packaged
wheat flour are, to fulfil the basic nutrition needs, for convenience and time
saving, lack of storage of wheat in bulk and perceived high quality of packaged
wheat flour.

The major challenges

More than 70% consumers prefer to buy specific brands of packaged wheat
flour which shows the brand loyalty.

Due to varied geographical taste preferences and beliefs, to satisfy Indian

consumer with standard offering remain the biggest challenge for marketers and
so as the case with packaged wheat flour.

Wheat Production Scenario In West Bengal

A wheat disease which spread in West Bengal at an alarming rate in 2017 forced the
state government to ban cultivation in two districts bordering Bangladesh for two
years. Wheat blast which is caused by a fungus causes ripe wheat to turn whitish and
dry up. The disease has severe effects and can leave a land barren for two years or
more. In a very short time, this can infect a very large tract of land and once it
strikes, the entire field has to be burnt and the ash disposed to prevent a return the
next season, Indian Express reports.
First identified in Brazil in 1985, it struck last year in Bangladesh, where crops over
20,000 hectares were burnt. In Bengal, symptoms similar to wheat blast was first
discovered in February 2017, leading to burning of crops over 1,000 acres in the
border districts of Murshidabad and Nadia. Other states like, Bihar, Odisha,
Jharkhand, Assam and Meghalaya had also been alerted from the spread of this
disease by the Centre. BSF had also been sensitised against wheat grain entering
from Bangladesh.
Asish Banerjee, state Agriculture Minister said that the only way to stop this is to
stop cultivating the crop. Steps are being taken to prevent the spread of this disease
to any other state, he added. Indian Council of Agricultural Research, said is also
trying to develop blast-resistant strains.
The Effect
The sudden change in the production pattern of wheat crops affected the supply of
wheat to the mills which includes Bhushan Flour Mill.
As the supply of wheat in West Bengal decreased drastically, the mills were forced
to buy wheat from Bihar and Uttar Pradesh which increased the cost of production.

Effect on Bhushan Flour Mill

 Prior to the crop damage in West Bengal the total cost of production was Rs
200 per unit including the cost of good quality wheat brought from Punjab
which ensured proper quality mi. x with the local wheat
 Post the crop damage, the local wheat had to be replaced by wheat brought
from Bihar , UP , MP etc which increased the total cost to Rs 250 per unit.
 SWOT and Porter’s Five Forces
Analysis of the Bhushan Flour Mill

Strength:

 Located in Murshidabad district, West Bengal which is one of the largest

wheat producing districts in India.
 Buhler technology plant design which is one of the finest available
process systems
 Readily available market in the form of institutes, bakery units, industries
and retail shopkeepers.

Weakness:

 As , wheat production unit set up is a capital intensive unit , huge capital

has been invested in setting up the plant but requires more time to break
even
  The change in crop production capacity due the crop damage disrupted
the wheat market in West Bengal

Opportunities:

 Population growth in the region is high which suggests a bigger market in

future
 If the mill maintains it continuous supply of flour to the customers despite
the increase in costs , due to unavailability of crops in the region at
present will ensure better profit in future.

Threat:

 Reoccurrence of the fungal disease causing wheat blast in coming years

 Economic downturn and unfavourable government policies.
 Other nearby flour manufacturers such as Murshidabad Flour mill

Porter’s Five Forces

 Threat from New Entrants: As Murshidabad and the nearby district of

Malda are high crop producing districts , threat from new entrants and
potential competitors is always there.
 Threat of Substitutes: Although there are no direct substitutes but the
Bhushan Flour Mill faces threat from nearby mills manufacturing Flour ,
Atta and allied products.
  Bargaining Power of Suppliers: The suppliers have high bargaining
power as the Mill procures wheat from outside the state through
middlemen and has no direct contact with the producers.
 Bargaining Power of Customers: The customers have less bargaining
power but regular and bulk customers such as factories and bakeries have
liberty of credit sales.
 Threat of Competitors: Bhushan Flour Mill faces competition from mills
producing similar products in the same area and having the same target
market.

Brief Financial Analysis of Bhushan Flour Mill

The Flour Mill was established in 2017. The Financial Statements for the years
2017 and 2018 were analysed the financial stability.

INVENTORY

It can be seen that Inventory has increased over the year that results in lay back
of resources, thus resulting in cash crunch for the company. Also the trade
receivables has increased which can be further stated that the company is not
able to maintain correct flow of cash in its operation which will in due time
effect the company’s profit , cash balance and few important ratios such as
inventory turnover ratio, debtors turnover ratio, debtors collection period etc.

It can be inferred from the balance sheet that the short term borrowings and
trade payable has increased drastically over the years which will ultimately
effect the liquidity and solvency position of the company. The company has
made an increase in its current investment which will positively result in its
asset turnover ratio, current ratio, ROI, etc.

Further it can be observed that the capital work in progress of the company has
declined by a large margin due to increase in the company’s sale and good
inventory ratio.

From the P/L statement it can be inferred that the revenue from operation has
increased, which will definitely give a positive impact on the operating profit
ratio of the company. Also such an increase will help the business to meet its
day-to-day operating activities.

Depreciation and amortization expense has increased over the year because of
installation of new plants and machineries which will give an impact on the
operating and net profit.

Supply Chain and Processes at Bhushan Flour Mill

The Bhushan Flour Mill uses State of the Art Technology by Buhler Inc which
is regarded as one of the best in the world. Bhushan is one of the First Mills in
Eastern India to use this technology.
Storing:

As wheat arrives in the mill it goes through a cleaning process to remove coarse
impurities and is then stored according to its quality. This is mainly determined
by the hardness, protein content and gluten quality of the wheat.

Cleaning:

Cleaning begins with screening to remove coarse and fine materials and the
grain is separated by size, shape, and weight. The finished product, whole pure
wheat, is then passed into conditioning bins.

Conditioning:

Conditioning takes place before milling to produce a uniform moistening helps

to prevent breakup of the bran (hard outer layer) during milling and improves
separation from the floury endosperm (the mass that forms the white flour of the
grain).

Gristing:

After conditioning different batches of wheat are blended together (gristed) to

make a mix capable of producing the required flour quality.

Buhler offers a cutting-edge technology for production of high quality wheat

flour. This technology makes it possible to achieve a quick return on investment
through outstanding product quality and high yields.

The Machinery Used

Item Qty. Description
I PLANT COMPONENTS

A CLEANING SECTION

1 1 DRUM SIEVE MKZM-9510

Application: As a pre-cleaning machine the drum sieve is very

versatile, and it is used above all in the intake sections of
granular and floury bulk material in flour mills, silos and
other factories. It serves to separate coarse impurities, such
as straw particles, string, paper, pieces of wood and cobs etc.
in order to protect them against operating faults and
damage.
Construction: A horizontal, overhung sieve drum rotates in an
enclosed casing. This drum is made of perforated sheet metal
and is kept open, by a brush scraper.
With plug geared motor 0.55 kW. Without driving members.
With Rhinohyde impact plate.
The product is fed via the inlet spout into the interior of the
drum and is revolved so that the fines drop through the
sieve, whereas the rolling motion causes the coarse
impurities to move to the outlet channel below the inlet. The
guide spiral located in front of the outlet assists discharge of
the coarse impurities and prevents the inclusion of fines.
Simple erection and easy accessibility.
Rugged maintenance and free-construction.
The sieve drum can be changed with effortless ease within
few minutes.
Item Qty. Description
High through capacity, with minimal space and power
requirements.

2 1 MAGNET APPARATUS MMUA-50

Metal Construction.
Casing with control cover, Inlet and feed flap. Permanent
magnet block, lift out type for removing extracted ferrous
metal material.

3 1 LUBA 20(SMA-20) CLEANER

High efficiency cleaning machine of our model SMA 20. The
material enters the machine and is spread over the entire
working width. Screening machine with oscillating screen
box, including 1 preliminary screen layer and 1 main screen
layer, with tried rubber ball cleaning system, working width
2000 mm.
Aspiration settings of the outlet air shifting controlled by
operating handle.

The following accessories are included

Outlet hopper SMA 20 for I. grade
Outlet hopper SMA 20 for II. Grade
Aspiration connection SMA 20
Double Inlet connection.

Screen surface:
Total screen surface: 6.0 m
Pre-screen surface : 3.0 m
Main screen surface: 3.0 m
Working width: 2000 mm

Drives:
Screen drive: 0.75 Kw
Voltages:
Motor:3x400 V.50 Hz
Aspiration connection for wheat: 140 m/min. at 300 Pa.
Note-Additional air to be added for feeding & discharge
elevators.

4 1 CYCLONE SEPARATOR MGXG-175

To separate dust/bran from aspiration air. Sheet steel

construction, cylindrical body with spiral-shaped air inlet
socket and central air outlet duct.

5 1 AIRLOCK MPSN-25/23
Item Qty. Description
Gray cast iron housing with four pocket rotor, ball bearings,
final painting coat.
For suction and/or pressure operation to max.+/-500 mbar.
With 1.1 kW motor.

6 1 CENTRIFUGAL FAN FOR GENER ASPIRATION

Standard execution:
Compact steel plate construction.
Motor base directly welded to the housing.
The fan wheel is keyed to the motor shaft.
Vibration absorbers with installation rails.
Including counter flanges for in-and outlets.

With Suitable rated Motor

7 1 MAGNET APPARATUS MMUA-30

Metal Construction
Casing with control cover, inlet and feed flap. Permanent
magnet block, lift out type for removing extracted ferrous
metal material.

8 1 INTERMEDIATE SEPARATOR MANA-40 S

Application: For the pre-separation of dust from the

horizontally following aspiration air.
Construction: Sheet steel design. Conical casing with
enclosed air distributing system and the expansion pace for
dust separation. Inlet and outlet spouts with flanges and
counter flanges, control windows to be arranged below the
intermediate separator for the cleaning section.

9 1 AIRLOCK MPSN-25/15

Gray cast Iron housing with four pocket rotor, ball bearings,
final painting coat. For suction and/or pressure operation to
max +/- 500 mbar. With 0.55 kW motor.

10 1 SEPARATOR CLASSIFIER MTRA-100/200

Metal construction.
Oscillating sieve box with 2 decks of sieves, hinged inlet and
built-on discharge box, supported in machine frame on
hollow rubber springs.
Sieve frame with sieve clothing.
Automatic sieve cleaning.
Drive with 2 vibro-motors with 0.3kW adjustable throw and
Item Qty. Description
impel angel.

11 1 ASPIRATOR MVSF-100 G
Attached air aspiration channel type MVSF with air control
valve and large inspection window.
With connection to central aspiration.
Aspiration channel in wide design.
12 1 DRY DESTONER MTSC-120/120
Application: To separate heavy admixtures, especially stones
from the grain.
Construction: Operates on the vacuum principle. Steel base
frame with sieve slope adjustment. Steel sieve box is
supported by special hollow rubber blocks. Withdrawable
wooden sieve frames, covered with steel screens, aluminium
diffuse baffies and cube-shaped cleaners.
Integrated product distribution system. Plexiglass inspection
window, access openings closed with rubber covers. Final
separation device for the stones is adjustable.
Common board accommodates the product inlet, aspiration
connection and air regulating valve with vacuum indicator.
Outlets equipped with rubber sleeve valves. Collection
funnels for product outlet.
Oscillating drive: 2x0.3 kW.
Built-in lights with ON/OFF switch, ready wired to junction
box.

13 1 CENTRIFUGAL FAN FOR MTSC-120/120

Standard execution.
Compact steel plate construction.
Motor base directly welded to the housing.
The fan wheel is keyed to the motor shaft.
Vibration absorbers with installation rails.
Including counter flanges for in-and outlets.

With Suitable rated Motor

14 1 HORIZONTAL SCOURER MHXF-30/150

Metal construction.
Casing with removable access door.
Dynamically balanced rotor with exchangeable beater bars.
Slotted sieve jacket.
Opening for connection to central aspiration. With machine
base, outlet hopper and V-belt drive include guard and
adjustable motor base. With motor.
Item Qty. Description
15 1 ASPIRATION CHANNEL MVSE-100 G

Sheet steel construction, Adjustable rear wall of safety glass.

Throttle flap for the control of aspiration air, thus the degree
of separation.
Adjustable vibro-feeder with vibro-motor 0.12 kW.
For connection to central aspiration
Built-in lighting in the channel.

16 1 INTENSIVE DAMPENER MOZJ-30/200

Metal design. Horizontal rotor with two parted housing. Rotor

base body, Beater bars, housing, as well as inlet and outlet
spouts in stainless steel. Bearing blocks galvanised.
V-belt drive and belt guard.
With motor 11 kW.

17 1 CYCLONE SEPARATOR MGXD-205

To Separate dust/bran from aspiration air. Sheet steel
construction, cylindrical body with spiral-shaped air inlet
socket and central air outlet duct.
18 1 AIRLOCK MPSN-25/23
Gray cast iron housing with four pocket rotor, ball bearings,
final painting coat.
For suction and/or pressure operation to max, +/- 500 mbar.
With 1.1 kW motor.
19 1 CENTRIFUGAL FAN FOR CYCLONE
20 1 INTENSIVE DAMPENER MOZJ-30/200
Metal design. Horizontal rotor with two parted housing. Rotor
base body, Beater bars, housing, as well as inlet and outlet
spouts in stainless steel. Bearing blocks galvanised.
V-belt drive and belt guard.
With motor 11 kW.
21 1 WATER METERING DEVICE MOZA-650 N
For use with drinking water, as metering unit for standard
dampening worm or for intensive dampener MOZJ
Construction metal and plastic.
Flow meter, Needle valve, Solenoid, Filter and Shut-off valve,
mounted on common plate.
Pressure reduction valve with pressure compensator in case
of water source directly from the water main.
22 1 PRODUCT SENSOR
Item Qty. Description
23 1 MAGNET APPARATUS MMUA-30
Metal Construction.
Casing with control cover, inlet and feed flap. Permanent
magnet block, lift out type for removing extracted ferrous
metal material.
24 1 HORIZONTAL SCOURER MHXF-30/150
Metal construction.
Casing with removable access door.
Dynamically balanced rotor with exchangeable beater bars.
Slotted sieve Jacket.
Opening for connection to central aspiration. With machine
base, outlet hopper and V-belt drive include guard and
adjustable motor base. With motor.
25 1 ASPIRATION CHANNEL MVSE-75 G
Sheet steel construction. Adjustable rear wall of safety glass.
Throttle flap for the control of aspiration air, thus the degree
of separation.
Adjustable vibro-feeder with vibro-motor 0.12 kW.
For connection to central aspiration.
Built-in lighting in the channel.
26 1 DRY DESTONER MTSC-65/120
Application: To separate heavy admixtures, especially stones
from the grain.
Construction: Operates on the vacuum principle. Steel base
frame with sieve slope adjustment. Steel sieve box is
supported by special hollow rubber blocks. Withdrawable
wooden sieve frames, covered with steel screens, aluminium
diffuse battles and cube-shaped cleaners.
Integrated product distribution system Plexiglass Inspection
window, access openings closed with rubber covers. Final
separation device for the stones is adjustable.
Common board accommodates the product inlet, aspiration
connection and air regulating valve with Vacuum indicator.
Outlets equipped with rubber sleeve valves. Collection
funnels for product outlet.
Electrical junction box.
Oscillating drive 0.3 kW.
Built-in lights with ON/OFF switch, ready wired to junction
box.
27 1 CENTRIFUGAL FAN FOR MTSC-65/120
Standard execution.
Compact steel plate construction.
Item Qty. Description
Motor base directly welded to the housing.
The fan wheel is keyed to the motor shaft.
Vibration absorbers with installation rails.
Including counter flanges for in-and outlets.
With Suitable rated Motor
28 1 WATER METERING DEVICE MOZA-125 N
For use with drinking water, as metering unit for standard
dampening worm or for intensive dampener MOZJ
Construction metal and plastic.
Flow meter, Needle valve, Solenoid, Filter and Shut-off valve,
mounted on common plate.
Pressure reduction valve with pressure compensator in case
of water source directly from the water main.
29 1 MAGNET APPARATUS MMUA-30

Metal Construction.
Casing with control cover, inlet and feed flap. Permanent
magnet block, lift out type for removing extracted ferrous
metal material.

30 1 CYCLONE SEPARATOR MGXD-175

To Separate dust/bran from aspiration air. Sheet steel

construction, cylindrical body with spiral-shaped air inlet
socket and central air outlet duct.

No of employees: 100-110

No. of permanent employees: 25

No of contractual employees: 75-85

The Company employs contractual labourers as and when required for it’s day
to day activities like transporting the goods from one place to another within the
plant while the manufacturing of flour from wheat is in progress, operating the
machinery, packaging and despatching the finished goods in required amount.

Since, majority of the manufacturing process is automated requirement of

skilled workforce is less. Therefore, the company chooses to employ contractual
labour as it would reduce concurrent costs and labour can be hired according to
demand.

Comparison of Procurement cost before and after Wheat disease

Before:

Procurement from local farmers: Rs 70 / unit

Procurement from Punjab including transport cost(Higher quality grains):

Rs 130 / unit

After:

Procurement from Bihar or other nearby states: Rs 100 / unit

Transportation Cost: Rs 20 / unit

Procurement from Punjab including transport cost (Higher quality grains):

Rs 130 / unit

Bhushan Flour Mill has additional cost of Rs 50 per unit as it has to procure
wheat from Bihar.

This situation is likely to continue till the next year as the Government ban on
production of wheat is in effect.

RECOMENDATIONS
To reduce costs the company has to focus more on process optimisation and
efficient inventory management as the raw material cost cannot be reduced in
short run.

Competitive Priorities for the Company are:

 Low Cost Operations which the company is ensuring by engaging

contractual labour
 Consistent and Top Quality of product to retain customers and increase
word of mouth.
 Timely delivery of ordered finished goods.
 Variety of products as the Mill offers flour, atta, suji and cattle fodder
with flour being the major contributor .

Labour Productivity for the company is high as the company uses

contractual labour which requires less enforcement of policies.

Multi factor Productivity for the company is high but the materials cost
poses a hindrances and needs to managed through proper inventory
management which can be ensured by employing a plant manager to look after
the day to day stock and inventory.
 Marketing Strategy and Sales Promotion

Customer Survey

Sample Size: 50

The customers were surveyed on the basis of quality parameters which affect
the selection of the brand / company. The parameters considered were Dough
Softness, Clearness, Chokar Content, Odour and Taste. These are the
parameters which affect the consumer perception and branding of the flour mill.

Preference
Parameter 1st 2nd 3rd 4th 5th
Dough Softness 8 10 15 14 3
Clearness 12 18 7 7 6
Chokar Content 4 2 14 13 17
Odour 10 6 12 10 12
Taste 16 14 2 6 12
 18
16
14
12 Dough Softness
Clearness
10
Chokar Content
8
Odour
6
Taste
4
2
0
1st 2nd 3rd 4th 5th

It was found out that,

The First Preference for quality is Taste, followed by Clearness, Dough

Softness, Odour and Chokar content.

Therefore, Bhushan flour mill needs to focus on Taste and Clearness of wheat to
enhance its sales.

Different Types of Promotion Schemes and Incentives

 Price-off : Offering a discount to the normal selling price of a product

 Extra product Offers: an increased quantity of the product without an
increase in normal retail price
 Premium Offers: A free gift in addition to the main purchase for regular
and loyal customers ie. to bakery firms
 Road Shows: Engage in road show in targeted communities from time to
time to sell our wheat flour
 Advertisement: Advertise the wheat flour in community based
newspapers, local TV and radio stations
 List the business and products on yellow pages ads (local directories)
 Increase presence on the internet to promote wheat flour brands like the
newly launched Bhuratna
 Promote direct marketing and sales increasing profit margins
 Encourage the use of Word of mouth marketing (referrals)

Scenario for Export of Wheat to Saudi Arabia

Production
Saudi Arabia ended its residential wheat generation and buy programs FY
2015/16. Notwithstanding, some little agriculturists keep on creating little
amounts of wheat for use in delivering customary bread shop items. As
indicated by nearby farming specialists, add up to yearly wheat generation FY
2016/17 isn't relied upon to surpass 10,000 MT.

Consumption:

Add up to Saudi wheat utilization in FY2016/17 is evaluated at 3.550 million

MT dependent on information given by the Saudi Arabia Grains Organization
(SAGO). This is near USDA's authentic gauge of 3.560 million MT. Official
information issued by SAGO demonstrates that the Kingdom expended 2.6
million MT of wheat flour in FY2016/2017. Add up to wheat utilization is
anticipated to decay throughout the following couple of years because of the
conceivable take-off of a huge number of ostracizes. This is because of a few
estimates the legislature presented a year ago. The three principle Saudi
government estimates executed in 2017 were: (1) ostracize subordinate expense,
(2) strict usage of Saudization measures, and (3) the Saudi battle named "A
Nation without Violations" that centres around removing residency and work
law violators from the nation. The flight of expats from the Kingdom is the
fundamental purpose behind the decrease in wheat utilization amid the
conjecture time frame.

As per SAGO, the Makkah district represents around 35 percent of the

aggregate wheat flour expended in the nation incompletely because of the
inundation of extensive quantities of travellers who came to perform hajj and
umrah customs, which are performed for a couple of days at settled dates every
year. A year ago around two million Muslims came to perform hajj; umrah
customs are performed consistently and around eight million travellers visited
the Makkah area in 2017.

The administration is attempting to build the quantity of religious visitors

coming to perform umrah and hajj from 12 million out of 2017 to 15 million by
2020 and 30 million by 2030 as a feature of its "Vision 2030" financial change
program. The arrangement targets travellers coming to perform umrah and hajj
as a noteworthy monetary supporter, and the estimated flood in pioneers are
required to expand the interest for wheat flour and other sustenance items in the
following couple of years. The legislature is building up the expected
foundation to suit the developing number of travellers and to encourage the
execution of the umrah and hajj ceremonies. As a component of Vision 2030
monetary change plan, the Kingdom reported out of the blue that in January
2018 that it will issue an online traveller visa for 65 nations, including European
Schengen visa nations (25 Countries), the United States, Japan, China,
Singapore, Malaysia, Brunei, Australia, South Korea, and South Africa

Wheat is for the most part devoured as level (pita) bread or nearby ground
sirloin sandwich buns known as 'Samoli' and other western-style bread, for
example, French rolls and pizza. The normal per capita utilization of wheat in
Saudi Arabia is right now evaluated at 109 grams for every day, or around 40 kg
yearly.

White flour establishes the heft of wheat flour expended in Saudi Arabia. As of
late, in any case, there has been a little however developing interest for entire
wheat flour because of its apparent medical advantages especially by wellbeing
cognizant shoppers and those with wellbeing conditions, for example, diabetes
and corpulence. It ought to be noticed that Saudi Arabia has one of the most
elevated diabetic and weight rates on the planet. SAGO, the select wheat flour
 mill operator in Saudi, has expanded its entire wheat generation as of late to
take care of the developing demand.

ARASCO, the prevailing Saudi creature feed processor, imported 60,000 MT

feed wheat from Ukraine in FY2016/17, expanding complete feed and lingering
use to 115,000 MT in FY2016/17. The organization showed that it imported
around 50,000 MT feed wheat in FY2014/15. No feed wheat imports detailed
up to this point in this promoting year.

Trade:
SAGO is the selective merchant of sponsored nourishment review wheat in
Saudi Arabia. The association imports basically hard wheat specifically through
open tenders open to enrolled worldwide exporters. It doesn't purchase through
grain intermediaries. SAGO buys wheat from an extensive variety of
birthplaces, including the EU, North America, South America and Australia.
The association imports wheat through two principle ports, the Jeddah Islamic
Seaport on the Red Sea and the Dammam King Abdul Aziz Seaport on the
Arabian Gulf. SAGO has been making arrangements to build the quantity of
Saudi seaports that can get transported in wheat to five in the following couple
of years by including three littler seaports in Diba, Jazan and Yanbu (All
situated on the Red Sea).

SAGO issued six universal wheat import tenders in FY2017/18 to import an

aggregate of about 3.258 million MT before the finish of June 30, 2018, an
expansion of 8 percent contrasted with a year sooner. There are 24 global wheat
exporters that are endorsed and enlisted with SAGO to take part in its
intermittent wheat import tenders.

Wheat Minimum Quantity Purchase Price Origin Options

Shipment Protein in Per MT in USD
Arrival Data Content MT
 EU, Australia,
Apr.-Jun. 2018 Protein 12.5% 739,000 $240.16 North and South
America
EU, Australia,
Feb.-Apr. 2018 Protein 12.5% 495,000 230.53 North and South
America
EU, Australia,
Dec.2017 - Jan
Protein 12.5% 484,000 223.85 North and South
2018
America
EU, Australia,
Oct - Dec 2017 Protein 12.5% 490,000 218.19 North and South
America
EU, Australia,
Aug. - Oct.
Protein 12.5% 805,000 216.66 North and South
2017
America
EU, Australia,
July 2017 Protein 12.5% 180,000 220.49 North and South
America
Total MY2017/18 SAGO what 3,258,000 metric tons
purchase Source:SAGO

Trade information from wheat providing nations demonstrates that for the initial
a half year of FY2017-18 (July-Dec)
Saudi Arabia imported an aggregate of 1,526,468 MT. There was a decay of
around 29 percent, contrasted with 2,146,484 MT imported in a similar time of
the earlier year. One of the primary explanations behind the decrease in Saudi
wheat imports was because of the way that an expansive number of exiles had
left the nation. The persistent take-off of ostracizes is the fundamental revealed
purpose behind the noteworthy diminishing in Saudi wheat imports in the initial
a half year of this FY. The aggregate Saudi wheat imports for FY2017-18 were
evaluated to be around 3.258 million MT, which was somewhat lower than the
USDA's authentic gauge of 3.3 million MT.

In the initial a half year of FY 2017-18, Lithuania was the best exporter of
wheat to Saudi Arabia with 518,781 MT, representing 34 percent of the
aggregate Saudi wheat imports. Lithuanian wheat fares to Saudi Arabia
expanded by around 68 percent in the initial a half year of this FY, contrasted
with its fares in a similar period for FY2016-17. Latvia was the second-biggest
exporter with 26.5 percent, and Germany was the third-biggest provider with
23.7 percent.

Saudi Arabia imported around 3.633 MMT of processing wheat in FY2016-17,

an expansion of 27 percent contrasted with imports in FY2015-16. The purpose
behind the expansion in wheat imports this FY contrasted with a year ago is
mostly a direct result of the need to keep up vital wheat stores of 8 months for
utilization. Keeping up vital wheat saves for somewhere around 8 months of
utilization is an administration arrangement, as the nation depends completely
on wheat imports to meet its nearby wheat utilization request.

In FY2016-17, Germany was the main wheat provider to Saudi Arabia, with
47.2 percent of the piece of the pie and fares of more than 1.7 million MT.
Poland was the second-biggest provider with 28.2 percent of the piece of the
overall industry, trailed by Lithuania with 9 percent of the piece of the overall
industry. The U.S. held a far off fourth position, with 4.7 percent of the piece of
the overall industry. FY 2016-17 was the first run through the U.S. sent out
wheat to Saudi Arabia since FY 2013-14.

Stocks:
SAGO claims and works storehouse edifices in real urban communities around
the Saudi Arabia. The association had an aggregate consolidated capacity limit
of 3.23 MMT toward the finish of 2017 and an expansion of 70 percent more
than 2011. SAGO had marked contracts to assemble five extra storehouses in
Mecca, Qassim, Jazan, Aseer, and al-Hasa,, which would expand the aggregate
stockpiling ability to 3.7 MMT before the finish of 2019. SAGO had turned into
a specialist in sourcing wheat from the global market and considered the world
wheat supply to be solid. In that capacity, it no longer strived to keep up vital
wheat holds equivalent to yearly utilization. The association's present
arrangement is to keep up wheat stocks at eight months of utilization.

Saudi Arabia Privatizes Flour Mills

On November 9, 2015, the Saudi government endorsed the foundation of four

processing organizations and rebuilt the Grain Silos and Flour Mills
Organization (GSFMO) under another name, the Saudi Grains Organization
(SAGO). The Saudi government approved the Public Investment Fund (PIF) to
set up four flour processing organizations. The PIF has finished the required
rebuilding and framed the four organizations, which have started working
autonomously. The PIF has supposedly finished the expected methodology to
pitch the factories to intrigued purchasers through an aggressive offering
process before the finish of this current year. Outside speculators are permitted
to band together with Saudi financial specialists to co-claim and work these
flour plants. It was accounted for that outside financial specialists are permitted
to claim up to 49 percent of the proprietorship in these flour plants.

The new processing organizations will be customers of SAGO. They will

process and convey wheat flour to the administration affirmed clients at a
concurred sponsored cost. The new plants would be permitted, in the event that
they import wheat for creation of non-financed flour in the wake of acquiring
import licenses from SAGO. This could be utilized for the creation of upscale
quality bread shop and pasta items. A large portion of the income of the private
plants is required to originate from the processing expenses charged to SAGO.
These flour plants have a consolidated every day processing limit of 14,000
MT.

As per SAGO, the administration does not have any desire to end the aggregate
control of wheat storehouses, viewing them as vital with the end goal to
guarantee sustenance security targets and furthermore to privatize just a little
segment of the grain storehouses.

SAGO Roles after Privatization

SAGO will remain the sole merchant of sponsored processing wheat and will
keep up possession and activity of the greater part of the wheat storehouses the
nation over. SAGO will deal with the vital wheat holds and guarantee Saudi
Arabia's sustenance security destinations. SAGO is relied upon to privatize just
a piece of its grain stockpiling storehouses to give a smooth change to the new
flour plants. Whatever remains of the capacity limit will be held by SAGO for
vital hold purposes.

SAGO's post-flour plants privatization jobs will incorporate the accompanying:

• Issuing import licenses for unsubsidized wheat to intrigued flour factories;

• Setting directions identified with wheat flour quality;

• Inspecting flour plants to guarantee consistence with quality directions;

Encouraging and controlling rivalry among private flour factories; and

• Ensuring adequate wheat flour is created and conveyed vast.

Market Development Activities:

Since the resumption of wheat imports in 2008, the U.S. Wheat Associates
(USWA) territorial office has facilitated showcase advancement and exchange
adjusting exercises in Saudi Arabia. The limit building exercises, which
included workshops, preparing and trade programs, were intended to help
SAGO's acquiring staff in understanding the quality traits of different U.S.
wheat assortments. The USWA offered workshops to address differing wheat
buying issues, including hazard the board, contract terms, quality
determinations, wheat assessment and other worldwide market contemplations
identified with wheat free market activity, and also cargo and transportation
costs.

Prices:
Substantial pastry kitchens and modern clients buy wheat flour specifically from
SAGO flour plants, while littler bread kitchens and retailers get their alloted
amounts from SAGO-designated merchants. SAGO's discount costs change
dependent on the flour type and extraction rate. The discount cost of a kg of
shopper pressed white wheat flour was expanded by 50 percent from $0.27 to
$.40 in 2017. Cooks buy at costs from $5.30 to $8 per 45 kg, while mechanical
clients buy in mass at costs that run somewhere in the range of $117.30 and
$160 per MT. Costs to pastry specialists and modern customers have not
changed for more than three decades.

Possible End of Wheat Flour Subsidy:

Privatization of government flour plants may change the costs of wheat flour or
bread. Right now, 500 grams of pita bread or samoli is sold for one Saudi riyal
(SAR) or $0.27. Some administration authorities demonstrate that the
reasonable cost for 500 grams of pita or samoli bread ought to be SAR2.5 or
$0.67. As indicated by the Saudi National Transformation Program (NTP) 2020
propelled in 2016, the administration goes for completion all sponsorships it
pays to customers before the finish of 2020. NTP 2020 is one of the few
exercises that the Saudi government expects to embrace to accomplish its driven
Vision 2030, which is gone for enhancing the nation's economy and radically
lessening the Kingdom's reliance on oil incomes by 2030. On the off chance that
the administration endowment on bread closes, the flour factories will have the
capacity to import wheat and move bread at market costs without government
mediation, which will end SAGO's imposing business model on wheat imports
and bread value controls.

All nourishment items, including wheat flour, bread and rice, are exacted a five
percent esteem included expense, which was executed without precedent for the
Kingdom in January 2018.

RECOMENDATIONS

Analysing the feasibility for export to Saudi Arabia

As the company came into existence in 2016 and started its operations from
2017,it had still not able to cross its break even point. The company has made
loss over the past year. So, it would be advisable for the company to first cover
its BEP, and then focus on expanding its operations to foreign territories of
Arab countries. Export to far off countries would require more cost of
operations which the company cannot afford currently. It would have been
economically feasible if they would have exported flour to any nearby country
like Bangladesh but as Bangladesh already has sufficient supply of flour it is not
required. However, the company can look forward to export to countries like
Thailand, Myanmar where the demand is high and cost of export will be low but
it should be done after a few years after the company attains financial stability.
 Conclusion

The Company has future growth prospects as the West Bengal and eastern part
of India has huge market demand for flour and allied products. The company
needs to device a proper organisational structure as suggested in the report and
implement marketing and sales promotion strategies in order to increase sales
and ensure better market penetration and market share. Also , the processes
need to be optimised in order to ensure cost effectiveness as the cost of
production has increased due to external factors. Feasibilty for export to Saudi
Arabia is low and is not possible given the current financial stability of the
company.
 REFERENCES

1. https://www.buhlergroup.com/global/en/industry-solutions/commodity-food/wheat-
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2. https://www.transparencymarketresearch.com/wheat-flour-market.html
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nt_type=panel&vrtcl_panel_nm=Statistics&ele_id=NOR_55a78702d65c87.46940678
4. https://www.researchgate.net/publication/323109116_Wheat_Flour_Marketing_in_Ba
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5. http://krishikosh.egranth.ac.in/handle/1/93874
6. www.marketing91.com
7. Google images
8. Financial Statements and Equipment Records of Bhushan Flour Mill