Brief Export

Business Model
Small Green Cardamom
Processing & Trading Unit

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S.No Index ( Prepared on 14th October 2020) Page No
1 Executive Summary 3
2 Introduction 4
3 International Scenario 4
4 National Scenario 4
5 State Scenario 5
6 Promoter Details 5
7 Current Export Market Scenario 6
8 Business Briefing 7
9 Opportunity 7
10 Initial Investment 7
11 Exit Plan 7
12 Why to Invest in Us 7
13 Business Model at Glance 8
14 Product Briefing 9
15 Export Markets & Small Green Cardamom: 10
16 →Share of Cardamoms in Total Exports of India 10
17 →Quantum of Export of Cardamom & Black Pepper 10
18 →Data of Exports to Various Countries 11
19 →Graphical Representation of Exports during previous 4 Years 12
20 →Exchange Rates Taken for Conversion of $ to Rs 12
21 →International Market Rates [$/lbs.] 13
22 →International Market Rates [₹/Kgs] 13
23 DISCLAIMER 14
24 Projected Financials 15
25 Initial Set-Up Cost 15
26 Sales Projection & Nominal Profitability 16
27 Monthly 16
28 Quarterly 17
29 Yearly 18
30 Return On Investment 19
31 Various Variables 20
32 Fixed Charges 21
33 Cost of Processing 22
34 About the Product & Profitability in more detail 23
35 Export Sale 23
36 Domestic Sale 23
37 Seasonal Domestic/Export Sales 25
38 Purchases 26
39 Processing 26
40 Grading and Sorting 26
41 Packing 26
42 Sales 27
43 Other Spices for Diversification 27
44 Conclusion 27

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1. Executive Summary

✓ World’s 3rd most expensive spice Cardamom with shelf life of up to 3 to 4 years.
✓ Major market is Asia, 78% Production of India is from Kerala
✓ India world’s 2nd largest producer of cardamom in the world.
✓ Promoter Mr. K K Jayan, more than 20 Years of Experience in this trade.
✓ Export Business Requires Investors Expertise and Connection
✓ Export Prices are always Higher than the Domestic Prices at any point of time.
✓ Promoter has got no Business connection for Exports, He has only got customer names,
✓ USP is exploiting the supply chain & Business Connections for By Products.
✓ Projections are Nominal with Major Incomes and Expenses, detailed shall be provided.
✓ Profit Study Projections (Monthly & Yearly):
• Nominal - Gross Profit @37.39% p.m. on Sales &
• Nominal - PAT @ 26.31% p.m. on Sales,
• Historic Study - In Seasonal Sale around 38% p.a Margin on Purchases only for
Domestic Market. Then it would be very much higher for Export Market.
✓ Percentage Cost of Processing is @ Rs. 66/- per Kg considered Rs. 70/-.
✓ Capacity Utilization, considered between 50% - 70%.
✓ Initial Investments – Scaling from 1 Crore to 5 Crore even more scalable easily.
✓ 90% of Investment made in Stock and a Quick Exit Plan of 1 to 2 Months only.
✓ Working Capital Requirement – 10 Lakh to 15 Lakh mainly for Cost of Processing.
✓ Fixed Charges, Variable Charges all are Nominal and provided at Maximum
✓ Incomes are also Nominal but considered to be Minimum
✓ Units Wise Cost sheet provided in detail on Cost of Processing.
✓ Comparatives of 2 Years Seasonal Sale given with Profitability based on FIFO.
✓ Importance of Packing & Branding
✓ Areas for Diversification into other Spices.
✓ Conclusion with contact details.

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2. Introduction
Small Cardamom (Elettaria cardamomum) belongs to the family Zingiberaceae. Cardamom,
called the "queen of spices", is the world’s third-most-expensive spice after vanilla and
saffron, averaging US$ 10 per kilogram at auction rates. It is used as a spice in culinary
preparations and confectionery and also finds use as medicine. The oil contained in the seeds
and pods are used in perfumes and as a stimulant. It has a Shelf Life of 3 to 4 Years if
properly stored.

3. International Scenario
Guatemala, India, Srilanka, Tanzania, El Salvador, Vietnam, Laos, Cambodia and Papua
New Guinea are the major cardamom growing countries. The world production of cardamom
is around 36000 tonnes /annum. Guatemala with a production of 23000 tonnes is the largest
producer of cardamom followed by India and Tanzania. The major cardamom exporting
countries are Guatemala, India and Indonesia. The major consuming countries of cardamom
are West Asian countries, Pakistan, Scandinavian & European countries, USA and Japan.
The West Asian countries have the maximum consumption with only India, UAE and Saudi
Arabia accounting for 60% of the consumption followed by Denmark, Finland, Norway,
Iceland accounting for 16% and Japan and USA, each accounting for 2.5 % each. The major
importing countries include Saudi Arabia, Kuwait, UAE, China, Japan, Honk Kong,
Netherlands, Singapore and USA.

4. National Scenario

India has been a dominant producer of cardamom. It is the second largest producer of
cardamom in the world. Spices Board India consumes almost 90% of the domestic
production of cardamom. About 5-8% of its total production, is exported, mostly the
premium grade. India also exports value added products of cardamom like cardamom oil,
and oleoresins to the European countries. Saudi Arabia, Japan, Malaysia, UK, Kuwait are
the major countries that import cardamom and value-added products of cardamom from
India. Saudi Arabia (42%) followed by Japan (39%) are the largest markets for Indian
cardamom.

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5. State Scenario
Kerala is the leading producer of cardamom in the country constituting 78 % of the total
production from 56% of the area under cardamom in the country. Idukki District in general
and Udumbanchola, Peeremedu and Devikulam talukas in particular are the main
cardamom growing tracts of Kerala. The agro-climatic conditions prevailing in Kerala is highly
congenial for high biological activity and quick decomposition of farm residues. Such an agro-
ecosystem is advantageous to shift to organic farming on commercial scale. Incidentally,
many of the Accreditation agencies (Commodity Boards) have their headquarters in Kerala.
Besides, many internationally recognized NGOs working for organic farming are active in
Kerala, since long. Kerala being the home of many spices has a major share in the export of
organically produced cardamom from India. The World Bank jointly with Spices Board of India
and International Trade Centre, Geneva is implementing programmes for improvement and
promotion of organic production of spices (including cardamom), certification and export of
selected spices, in Idukki and Wayanad districts. Besides, Spices Board, Cochin is
implementing a grant-in-aid programme to promote organic cultivation of spices.

6. Promoter Details
S.No Particulars Details

1 Name of the Promoter K K Jayan

2 Correspondence Address Plot No 24, Chatrapati Nagar,

Doctors Colony, Nagpur

3 Experience in This Business More than 20 Years in Domestic Market Trade

4 Contact +91 8547728032

+91 9960695460

Kattappana, Vandenmedu, Udumbanchola Taluka,

5 Hometown Address
Idukki District, Kerala - 685515

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7. Current Export Market Scenario
Indian Small Cardamom is famous in the world over decades for its Quality,

Colour and Standards. However, Countries like Guatemala with a wide area of plantations

with naturally conducive weather and climate paves the way for mass production of

Cardamom at a lower cost. This has resulted in the mixing of those lesser quality

cardamoms with higher quality Cardamom produce in India. And there are Other

Countries too in the run like Sir Lanka, Tanzania, Uganda, Laos e.tc but they are not

competitors.

High Local prices may upset India’s efforts to Export more cardamom to West Asian

countries, with local cardamom prices hovering around ₹3,200 per kg in Apr’20.

“Now Guatemala seems to have exhausted the stock and COVID and has impacted

prices. There are offers for Indian cardamom at around $92 per kg (Around Rs. 6440/-) in

Oct’20. This is an Opportunity for Indian Cardamom Exporters”

There are several distributing channels of Cardamom with auction centres, wholesaler,

retailer and other intermediaries through which the Cardamom reaches the customers in India

and abroad. The international market for Indian Cardamom is competitive as more countries

try to dump their product. But there is ample scope for Indian Cardamom to rule in the

Global Market

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8. Business Briefing

▪ Opportunity:
The promoter has an experience of more than 20 years as a Trader, Supplier,
Commission Agent and as a Processor in this business field and has gained many contacts
of supplier, farmers and creditworthiness for the purchase, process and sale
of cardamom and various other spices.

As the Investor wishes to export the said product the Investor can rely on the
promoter for all the back-end processes of the supply chain (like Purchases, Processing
etc.) up to the goods are ready to Export

▪ Initial Investment:
This business can be done at a very optimal Investment cost, where major chunk of
Initial Investment will be made in purchasing the stock approx. 90% and balance 10% or
less on setting up the plant.

▪ Exit Plan:
The exit plan will be needed just for the 10%. As rest 90% can be recovered
immediately by selling the stock in the daily market and rest 10% can be recovered by selling
the unit as a whole to a buyer or by scrap sales (rare case), in only around 1 month.

▪ Why to Invest:
The promoter belongs to the very place where the spice is farmed, he was born and
brought up there, he has a well understanding and experience about the market and the
product. He is familiar with this product since his childhood and that is the primary reason
why he is dealing in this field right now. He also had his own processing plant during 2012-
13, but because of Mullaperiyar Riot between Kerala and Tamil Nadu. He had to shut down
the plant which was in fully operation at Cubum, Theni District, Tamil Nadu. You can benefit
from his Expertise

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9. Business Model at Glance
▪ Name of Project: Small Green Cardamom Processing and Trading Unit
▪ Business Model: This is the flow of the product presented in a downward stream.

S.No Particulars Particulars Details

From Farmer At the lowest price (Primary Source of Purchase)
If further cardamom needed after purchasing
From Wholesale
from farmers to meet our sales orders.
1
Purchases If it is cheaper compared to farmer or is at daily
From Auction
market rate
From Import From Guatemala
Bringing the Bags to the Processing Unit for
2 Transportation By Road
processing
Grading Grading for separating different sized cardamoms
Sorting involves removing defects and separating
Sorting
3 Processing quality cardamoms.
Packing the Cardamom according to sizes and
Packing & Branding
qualities in different packets with brand name
According to the Sale Orders transported to
4 Transportation By Road
buyers desired location
Purchase during the season at low cost and store
5 Store
Storing it for the off season for higher yield
6 Sales Order Quote Identifying Genuine Customers
7 Shipping By Air/Sea Via Air / Sea
8 Remittance Receipt Receiving Sale Proceeds in For Ex

Exports would increase or decrease according to the Demand; Supply only will influence
the price. Minimum Export in a month shall be of a container which would be around 20,000
Kgs. Which is very easy to achieve with this project and investment. Further we can Produce
more output just by investing more in only Wages and Machinery. Details are further in the
report.

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10. Product Briefing
▪ Qualities and Items
Cardamom after processing can be segregated into Different Qualities and
By-Products for Export
➢ Major Export Qualities are:
• AGB – Allepply Green Bold • AGEB – Allepply Extra Green Bold
• AGS - Allepply Green Small • AGS1 – Allepply Green Small One

➢ Other Cardamom products being Exported & Its Prices:

Annex 1 - Product wise Trends to Export Cardamom from India in 2019-20
S.NO. Name Code Qty of Export
1 Small (Ellettaria), Alleppey Green 9083120 734350 Kgs
2 Other Cardamom; Neither Crushed nor Ground 9083190 1056430 Kgs
3 Large (Amomum) 9083110 1048980 Kgs
4 Shelled 9081120 1261240 Kgs
5 Other Cardamom; Crushed or Ground 9083290 154720 Kgs
6 Small, Bleached, Half Bleached or Bleachable 9083140 243330 Kgs
7 Powder 9083210 94660 Kgs
8 In Shell 9081110 468110 Kgs
9 Small Cardamom Seeds 9083220 52600 Kgs
10 Cardamom Husk 9083230 -
11 Cardamom Oleoresins 33019015 -
12 Cardamom Powder 9083070 -
13 Cardamom Small (Mixed) 9083060 -

➢ Few Abroad Customer Names and Country:

Recent Transactions Made
S.No Name of Importer Country Supplier - Exporter Indian City
Date Kgs F.O.B Value
Sweet Crop Trading
1 Qatar MAS Enterprises Ltd Idukki, Kerala 29-Sep-20 300 RS 6,63,168
and Packing
Dadi Trading
2 Qatar MAS Enterprises Ltd Idukki, Kerala 29-Sep-20 500 RS 8,37,683
Company
Sweet Crop Trading
3 Qatar MAS Enterprises Ltd Idukki, Kerala 29-Sep-20 200 RS 3,21,536
and Packing
Thane,
4 Spice Home Japan Sai Exports 29-Sep-20 120 RS 2,92,183
Maharashtra
Freshco Foods
5 Australia Khajanchi Exports NA 30-Sep-20 55 RS 1,06,252
Victoria
Super Asia Food
6 Canada MAS Enterprises Ltd Idukki, Kerala 30-Sep-20 1000 RS 17,16,600
Spices Ltd

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 ▪ Export Markets & Small Green Cardamom:

➢ Share of Cardamoms in Total Exports of India:

Annex 2 - Share of Nutmeg, Mace and Cardamoms in Total Exports of India - Dated: 14/10/2020 [HS Code - 0908] - Rate Assumed @ Rs 70 = $ 1
2020-2021(Apr-Jul) 2019-2020 2018-2019 2017-2018
S.No. Commodity
Rs (Lakhs) $(Millions) Rs (Lakhs) $(Millions) Rs (Lakhs) $(Millions) Rs (Lakhs) $(Millions)
Nutmeg, Mace and
1 Rs. 22,670 $. 30 Rs. 58,117 $. 82 Rs. 61,523 $. 88 Rs. 92,755 $. 144
Cardamoms
2 India's Total Export Rs. 56,527,002 $. 74,823 Rs. 221,985,418 $. 313,361 Rs. 230,772,619 $. 330,079 Rs. 195,651,453 $. 303,526
Global Export
3 4.01% 2.62% 2.67% 4.74%
Share
Source https://commerce-app.gov.in/eidb/ecom.asp

➢ Quantum of Export of Cardamom & Black Pepper

Annex 3 - Quantum of Export of Cardamom & Black Pepper - Rate Assumed @ Rs 70 = $ 1
2019-2020 2018-2019 2017-2018
S.No. ITEM Qty Qty
Qty Tons Rs (Lakhs) $(Millions) Rs (Lakhs) $(Millions) Rs (Lakhs) $(Millions)
Tons Tons
2090 2850 5680
1 Cardamom (Small) Rs. 42,630 $. 60.90 Rs. 35,625 $. 50.89 Rs. 60,908 $. 87.01
Tons Tons Tons
1100 860 760
2 Cardamom (Large) Rs. 6,759 $. 9.66 Rs. 6,106 $. 8.72 Rs. 5,647 $. 8.07
Tons Tons Tons
16250 13540 16840
3 Pepper Rs. 55,187 $. 78.84 Rs. 56,868 $. 81.24 Rs. 82,078 $. 117.25
Tons Tons Tons
Source https://www.indianspices.com/sites/default/files/Major%20Item%20wise%20Export%202019.pdf

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 ➢ Data of Exports to Various Countries:

Annex 4 - Export Data of Small Cardamom to Various Countries - Rate Assumed @ Rs 70 = $ 1

2019-2020 2018-2019 2017-2018 2016-2017

S.No. Country
Qty Value Rs Value $ Value Rs Value $ Value Rs Value $ Value Rs Value $
Qty [Kg] Qty [Kg] Qty [Kg]
[Kg] (Lakhs) (Millions) (Lakhs) (Millions) (Lakhs) (Millions) (Lakhs) (Millions)
1 U.A.E - 19829.99 28.32856 1190.79 15230.25 21.7575 1084.07 11101.99 15.85999 494.24 5720.39 8.171986
2 Kuwait - 5014.31 7.1633 660.48 8034.47 11.477814 196.31 2091.48 2.987829 152.75 1670.83 2.3869
3 Iran - 2211.85 3.159786 217.54 3031.27 4.3303857 301.62 3468.96 4.955657 135 1466.17 2.094529
4 U.S.A - 6481.03 9.258614 117.64 1839.2 2.6274286 214.44 2309.87 3.299814 96.4 929.37 1.327671
5 Saudi - 686.13 0.980186 120.68 1455.26 2.0789429 2923.22 32188.81 45.98401 2500 27469.5 39.24214
6 Qatar - 586.76 0.838229 54.5 745.97 1.0656714 169.69 1949.87 2.785529 29.5 326.51 0.466443
7 Oman - 906.45 1.294929 49.75 666.09 0.9515571 47.72 537.01 0.767157 9.11 96.62 0.138029
8 Canada - 981.03 1.401471 25.24 364.86 0.5212286 76.48 801.45 1.144929 36.8 283.88 0.405543
9 UK - 1268.13 1.811614 27.83 323.09 0.4615571 71.17 678.86 0.9698 12.32 163.01 0.232871
10 Singapore - 1368.76 1.955371 43.66 311.4 0.4448571 33.47 228.59 0.326557 13.74 103.96 0.148514
11 Australia - 1078.78 1.541114 22.44 305.06 0.4358 62.98 587.74 0.839629 26.32 239.93 0.342757
12 Sri Lanka - 160.21 0.228871 19 279.3 0.399 63.19 616.95 0.881357 11.53 66.96 0.095657
13 Bangladesh - 428.99 0.612843 38.5 248.22 0.3546 58 427.17 0.610243 22 58.37 0.083386
14 Lebanon - 106.12 0.1516 16.04 237.43 0.3391857 1 11.71 0.016729 1.54 11.2 0.016
15 Japan - 861.8 1.231143 16.56 228.91 0.3270143 58.98 848.14 1.211629 55.61 622.63 0.889471
16 Germany - 249.64 0.356629 - 573.34 0.8190571 - 177.79 0.253986 - 288.81 0.412586
Source https://www.indianspices.com/sites/default/files/Major%20Item-%20Country%20wise%20export%20of%20Spices%202016web1412018_new.pdf
Source https://commerce-app.gov.in/eidb/ecomxcnt.asp

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 ➢ Graphical Representation of Exports during previous 4 Years

Major Global Consumers of Indian Small Cardamom : Chart 1

35000
Value of Exports in Rs.(Lakhs)
30000
25000
20000
15000
10000
5000
0

Countries

2019-2020 Value Rs (Lakhs) 2018-2019 Value Rs (Lakhs) 2017-2018 Value Rs (Lakhs) 2016-2017 Value Rs (Lakhs)

➢ Exchange Rates Taken for Conversion of $ to Rs

Annex 5 - Average International Market Rates - $/Rs
Year Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Avg. Rate
2019-20 ₹ 69.43 ₹ 69.79 ₹ 69.49 ₹ 68.76 ₹ 71.11 ₹ 71.38 ₹ 71.03 ₹ 71.47 ₹ 71.21 ₹ 71.29 ₹ 71.59 ₹ 74.53 ₹ 70.92
2018-19 ₹ 65.65 ₹ 67.50 ₹ 67.77 ₹ 68.68 ₹ 69.47 ₹ 72.10 ₹ 73.58 ₹ 71.97 ₹ 70.78 ₹ 70.63 ₹ 71.23 ₹ 69.66 ₹ 69.92
2017-18 ₹ 64.56 ₹ 64.43 ₹ 64.45 ₹ 64.45 ₹ 64.00 ₹ 64.38 ₹ 65.09 ₹ 64.86 ₹ 64.24 ₹ 63.65 ₹ 64.40 ₹ 65.05 ₹ 64.46
2016-17 ₹ 66.46 ₹ 66.92 ₹ 67.23 ₹ 67.15 ₹ 66.94 ₹ 66.75 ₹ 66.72 ₹ 67.66 ₹ 67.83 ₹ 68.09 ₹ 66.99 ₹ 65.93 ₹ 67.05
2015-16 ₹ 62.62 ₹ 63.70 ₹ 63.81 ₹ 63.62 ₹ 65.03 ₹ 66.25 ₹ 65.04 ₹ 66.11 ₹ 66.53 ₹ 67.27 ₹ 68.28 ₹ 66.93 ₹ 65.43
2014-15 ₹ 60.34 ₹ 59.30 ₹ 59.68 ₹ 60.06 ₹ 60.84 ₹ 60.84 ₹ 61.35 ₹ 61.67 ₹ 62.81 ₹ 62.16 ₹ 62.04 ₹ 62.48 ₹ 61.13
2013-14 ₹ 54.39 ₹ 54.87 ₹ 58.16 ₹ 59.72 ₹ 62.58 ₹ 63.93 ₹ 61.51 ₹ 62.64 ₹ 61.85 ₹ 62.05 ₹ 62.15 ₹ 61.04 ₹ 60.41
Source: https://www.x-rates.com/average/?from=USD&to=INR&amount=1&year=2020

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 ➢ International Market Rates [$/lbs.]
Annex 6 - Small Cardamom International Market Rates - $/Lbs
Year Particulars Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Avg. Rate
Fancy Green - $ 29.76 $ 29.76 $ 29.76 - - - - - - - - $ 29.76
2019-20
Extra Bold 6-7 mm - $ 35.33 $ 41.51 $ 49.02 - - - - - - - - $ 41.95
Fancy Green $ 20.39 $ 20.41 $ 22.89 $ 26.46 $ 26.46 $ 26.46 $ 26.46 $ 26.46 $ 26.73 $ 27.56 $ 29.76 $ 28.76 $ 25.73
2018-19
Extra Bold 6-7 mm $ 16.32 $ 15.40 $ 15.47 $ 16.83 $ 17.95 $ 19.78 $ 19.56 $ 20.30 $ 21.37 $ 21.70 $ 22.03 $ 22.61 $ 19.05
Fancy Green $ 18.74 $ 18.74 $ 18.74 $ 18.74 $ 18.74 $ 18.74 $ 18.74 $ 18.74 $ 18.74 $ 18.74 $ 19.14 $ 20.39 $ 18.91
2017-18
Extra Bold 6-7 mm $ 20.98 $ 20.09 $ 20.06 $ 20.19 $ 20.28 $ 19.66 $ 17.69 $ 16.35 $ 16.49 $ 17.04 $ 17.49 $ 16.48 $ 18.57
Fancy Green $ 15.32 $ 15.32 $ 15.32 $ 15.32 $ 15.32 $ 15.32 $ 15.32 $ 17.24 $ 18.19 $ 18.19 $ 18.19 $ 18.19 $ 16.44
2016-17
Extra Bold 6-7 mm $ 12.67 $ 13.23 $ 13.95 $ 14.67 $ 16.57 $ 17.45 $ 18.03 $ 20.05 $ 21.82 $ 23.47 $ 23.69 $ 22.20 $ 18.15
Fancy Green $ 15.98 $ 15.99 $ 15.99 $ 15.99 $ 15.99 $ 15.99 $ 15.99 $ 15.99 $ 15.66 $ 15.32 $ 15.32 $ 15.32 $ 15.79
2015-16
Extra Bold 6-7 mm $ 15.14 $ 14.12 $ 14.59 $ 13.29 $ 12.31 $ 12.16 $ 12.08 $ 11.88 $ 11.89 $ 11.97 $ 11.49 $ 11.46 $ 12.70
Fancy Green $ 17.53 $ 17.53 $ 17.53 $ 17.07 $ 16.76 $ 16.76 $ 16.32 $ 16.20 $ 15.99 $ 15.99 $ 15.98 $ 15.98 $ 16.64
2014-15
Extra Bold 6-7 mm $ 17.75 $ 16.88 $ 16.51 $ 16.93 $ 16.93 $ 15.77 $ 15.17 $ 15.03 $ 15.14 $ 17.08 $ 17.94 $ 16.53 $ 16.47
2013-14 Extra Bold 6-7 mm $ 17.39 $ 15.90 $ 14.55 $ 14.20 $ 13.32 $ 12.26 $ 12.35 $ 12.46 $ 12.49 $ 12.41 $ 14.55 $ 15.16 $ 13.92
Source: https://www.indianspices.com/monthly-price-international.html

➢ International Market Rates [₹/Kgs]

Annex 7 - Small Cardamom International Market Rates - Rs/Kg [1 lbs = 0.453592 Kgs]

Year Particulars Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Avg. Rate
Fancy Green - ₹4,579.21 ₹4,559.17 ₹4,511.61 - - - - - - - - ₹4,550.00
2019-20
Extra Bold 6-7 mm - ₹5,436.27 ₹6,359.25 ₹7,431.43 - - - - - - - - ₹6,408.98
Fancy Green ₹2,950.98 ₹3,037.21 ₹3,419.91 ₹4,006.55 ₹4,052.27 ₹4,205.70 ₹4,292.42 ₹4,198.31 ₹4,170.98 ₹4,291.54 ₹4,673.29 ₹4,416.64 ₹3,976.32
2018-19
Extra Bold 6-7 mm ₹2,361.94 ₹2,291.67 ₹2,311.31 ₹2,548.39 ₹2,748.99 ₹3,143.94 ₹3,173.08 ₹3,220.93 ₹3,334.60 ₹3,379.04 ₹3,459.43 ₹3,472.19 ₹2,953.79
Fancy Green ₹2,667.37 ₹2,661.86 ₹2,662.57 ₹2,662.86 ₹2,644.05 ₹2,659.68 ₹2,689.17 ₹2,679.65 ₹2,654.14 ₹2,629.74 ₹2,717.66 ₹2,924.33 ₹2,687.76
2017-18
Extra Bold 6-7 mm ₹2,986.21 ₹2,853.61 ₹2,850.11 ₹2,868.90 ₹2,861.33 ₹2,790.25 ₹2,538.50 ₹2,337.90 ₹2,335.47 ₹2,391.18 ₹2,483.37 ₹2,363.56 ₹2,638.37
Fancy Green ₹2,244.67 ₹2,260.19 ₹2,270.55 ₹2,267.82 ₹2,260.72 ₹2,254.35 ₹2,253.38 ₹2,571.42 ₹2,720.21 ₹2,730.55 ₹2,686.55 ₹2,644.10 ₹2,430.38
2016-17
Extra Bold 6-7 mm ₹1,856.39 ₹1,951.85 ₹2,067.51 ₹2,171.60 ₹2,445.18 ₹2,567.79 ₹2,651.99 ₹2,990.54 ₹3,263.05 ₹3,523.14 ₹3,498.86 ₹3,226.99 ₹2,684.57
Fancy Green ₹2,206.09 ₹2,245.53 ₹2,249.35 ₹2,242.70 ₹2,292.46 ₹2,335.51 ₹2,292.68 ₹2,330.41 ₹2,297.05 ₹2,271.94 ₹2,306.07 ₹2,260.68 ₹2,277.54
2015-16
Extra Bold 6-7 mm ₹2,090.13 ₹1,982.92 ₹2,052.41 ₹1,864.00 ₹1,764.86 ₹1,776.09 ₹1,732.06 ₹1,731.41 ₹1,744.05 ₹1,775.13 ₹1,729.55 ₹1,691.08 ₹1,827.81
Fancy Green ₹2,332.05 ₹2,291.66 ₹2,306.37 ₹2,260.07 ₹2,247.92 ₹2,248.12 ₹2,207.50 ₹2,202.67 ₹2,214.05 ₹2,191.28 ₹2,185.57 ₹2,201.05 ₹2,240.69
2014-15
Extra Bold 6-7 mm ₹2,361.31 ₹2,206.69 ₹2,172.18 ₹2,241.54 ₹2,270.72 ₹2,115.32 ₹2,051.94 ₹2,043.58 ₹2,096.36 ₹2,340.65 ₹2,453.64 ₹2,276.80 ₹2,219.23
2013-14 Extra Bold 6-7 mm ₹2,085.33 ₹1,923.53 ₹1,865.52 ₹1,869.49 ₹1,837.70 ₹1,727.86 ₹1,674.72 ₹1,720.64 ₹1,703.15 ₹1,697.56 ₹1,993.75 ₹2,040.09 ₹1,844.94
Source: https://www.indianspices.com/monthly-price-international.html
*Notes: The Amounts quoted in $ are per Pound & Amount Quoted in Rs. Are Per Kgs

13 | P a g e
DISCLAIMER

As Promoter Stated Earlier, he doesn’t have any Customers Base Outside India as of
now. He approached the Investor with a view to do Business Inside India. He is capable of
providing the Export Quality Product till Free on Board. If the Investor has any
customers or if new customers are canvassed after the initiation of this project the business
would plough lot of profits.

The Main Objective of this Project is to give a gist of Production Cost and Profitability of
the said product if exported at the prevailing market rates quoted at the Indian Spices Board
& at the Current Exchange Market Rates of US Dollar and INR.

This is a ROUGH MONTHLY PROJECTION of the Business Model. Various aspects like
IRR, PV, RATIOS and various other financial ratios, cost ratios, legal aspects and
many other direct and indirect financial related factors are not considered in this
REPORT.

This report only focuses on the Major Purchase & Sales aspects keeping in mind to give
the user a brief understanding about the business model and cost of investment. Business
is subject to normal market risks just like all agricultural products. We have considered the
figures and values keeping the profitability at the lowest possible scenario.

The Capacity utilization is considered to be between 50% to 70% throughout the

report for various variables. And for various reporting requirements we have
assumed rates far below and above the actual market rates with a view of prudence
and to show the minimum return. Whereas if actual rates are taken and assessed the
profits will be more.

The Financials are projected as if there is no lagging in cash realisation. If cash

realisation gap is considered the cycles will be reduced. In case of Quarterly and Yearly
Projection of Profits many aspects are not considered we have just multiplied it with number
of months.

We may present a detailed In-Depth Report of the market, product and the
whole supply chain and the profitability if the user is interested to proceed with this
business model.

The main IDEA of this Report is to Familiarize the User with the Market, Product,
Profit & Opportunities. & Do Consider the Impact of COVID-19 for this Year

You’ll Further see that the Return on 20000Kg and 30000Kg are Indifferent. It is just
because the labour employed. Profit it directly related to Processing and Processing is
directly related to Grading and Sorting. Sorting requires Labour and in both the level we
have same labour so the ROI is Indifferent.

14 | P a g e
 11. Projected Financials

▪ Initial Set-Up Cost:

This is Tentative Initial Setup Cost of the Processing Plant, Purchase Cost of Stock
(has been included in here as it is the major investment) & various major requirements and
cost is as below at various scales of purchases made, we can even scale the business at a
higher scale but the projections remain the same. Standard Deviation shall be considered
up to 10%. See Annex-8.
Annex 8 - Initial Set-Up Cost of Small Green Cardamom Only at Different Scales
Scale of Purchase
S.No Particulars
5000Kg 10000Kg 20000Kg 30000Kg Remarks
Investment Made in Stock
1 Purchases @ Rs. 1500/Kg Rs. 7,500,000 Rs. 15,000,000 Rs. 30,000,000 Rs. 45,000,000 Note 1
Total Purchases Rs. 7,500,000 Rs. 15,000,000 Rs. 30,000,000 Rs. 45,000,000
% of Share in Total Investment 80.09% 88.42% 93.85% 95.82%
Investment Made in Assets
Grading Machine (1000Kg
2 Rs. 100,000 Rs. 200,000 Rs. 200,000 Rs. 200,000 Note 2
Per Day) 1L/Piece
3 Packing Machine Rs. 10,000 Rs. 10,000 Rs. 10,000 Rs. 10,000 Note 3
4 Desktop Rs. 30,000 Rs. 30,000 Rs. 30,000 Rs. 30,000
5 Printer Rs. 15,000 Rs. 15,000 Rs. 15,000 Rs. 15,000
6 Almirah Rs. 10,000 Rs. 10,000 Rs. 10,000 Rs. 10,000
7 Others Rs. 100,000 Rs. 100,000 Rs. 100,000 Rs. 100,000 Note 4
8 CCTV Rs. 100,000 Rs. 100,000 Rs. 100,000 Rs. 100,000 Note 5
9 Official Vehicle (Optional) Rs. 1,500,000 Rs. 1,500,000 Rs. 1,500,000 Rs. 1,500,000 Note 6
Total Assets Rs. 1,865,000 Rs. 1,965,000 Rs. 1,965,000 Rs. 1,965,000
% of Share in Total Investment 19.91% 11.58% 6.15% 4.18%
Total Initial Investment Rs. 9,365,000 Rs. 16,965,000 Rs. 31,965,000 Rs. 46,965,000

*Notes:
1. The Purchase Price of Rs.1500/- used is just a nominal rate (Considering the Mean of Export
Price and Domestic Price) but it is within the upper limits of the average auction prices or purchases
rates from the farmer. This may vary according the market but no worries as the item is not
perishable soon and we shall sell this at a higher value.

2. Scale 5000Kg has allocated 1 Grading Machine rest all scales are allocated 2. Grading
Machine can Process a minimum quantity of 1000Kg per day and Maximum up to 1600Kgs. We
have considered the minimum processing level of capacity.

3. Packing Machines are manual machines which may cost around Rs 5000/ piece which take 3
minutes for a packing.

4. Others may include petty items like Bulb, Fan, Lights etc.

5. CCTV is a must for observing workers and for security reasons

6. A Vehicle for business use is optional at initial stages but is necessary for meet the suppliers
and to travel within the city or interstate if necessary, to reduce cost and travelling time.
15 | P a g e
▪ Sales Projection & Nominal Profitability:

The below projected statement of Profit and Loss is by just considering the major
expenses and major incomes (see note of Annex 9A). It does not reflect all incomes
and expenses but shall be considered as the maximum plausible expenses and
minimum possible income scenario See Annex-9A,9B & 9C. There are many areas to
be explored to generate more income to the business which can only be presented in a
detailed projection later.

➢ Monthly Projection

Annex 9A - Monthly Export Projection and Profitability at Various Scales (Tentative)

Scale of Monthly Processing & Trade
Particulars
15000Kg 22500Kg 30000Kg 30000Kg Remarks
Sales @ 2500 X *Kgs
(67% Above Purchase 3,75,00,000 5,62,50,000 7,50,00,000 7,50,00,000 Note 1
Price)
Less: Purchase Cost @
2,25,00,000 3,37,50,000 4,50,00,000 4,50,00,000 Annex 10
1500 x *kgs
Less: Other Purchase
1,99,800 2,99,700 3,99,600 3,99,600 Annex 8
Expenses
Less: Transportation 2,25,000 3,37,500 4,50,000 4,50,000 Annex 8
Less: Loading Unloading 4,800 7,200 9,600 9,600 Annex 8
Less: Grading 15,000 22,500 30,000 30,000 Annex 8
Less: Sorting 1,50,000 2,25,000 3,00,000 3,00,000 Annex 8
Less: Packing 1,65,000 2,47,500 3,30,000 3,30,000 Annex 8
Gross Profit c/d 1,42,40,400 2,13,60,600 2,84,80,800 2,84,80,800
GP Ratio % 37.97% 37.97% 37.97% 37.97%
Cost of Processing 7,59,600 11,39,400 15,19,200 15,19,200

Cost of Processing/Kg 3.38% 3.38% 3.38% 3.38%

Gross Profit b/f 1,42,40,400 2,13,60,600 2,84,80,800 2,84,80,800

Less: Admin Expenses 80,000 80,000 80,000 80,000 Annex 11
Less: Salary of
40,000 40,000 40,000 40,000
Operational Manager
Annex 8
Less: Depreciation @
28,042 28,875 28,875 28,875 (Row2+3)
10%p. a SLM
*10%
PBT 1,40,92,358 2,12,11,725 2,83,31,925 2,83,31,925
Taxes @ 30%p. a 42,27,708 63,63,518 84,99,578 84,99,578
PAT 98,64,651 1,48,48,208 1,98,32,348 1,98,32,348
NP Ratio % 26.31% 26.40% 26.44% 26.44%
*Notes:
1. The sale price of Rs.2500/- used is just a below average figure of Annex – 4, The sale price
is of the Export Quality item and the Purchase cost is assumed to be the cost of the same
quality purchased from farmers

16 | P a g e
 ➢ Quarterly Projection

Annex 9B - Quarterly Export Projection & Profitability at Various Scales (2&3 Times Monthly)
Scale of Quarterly Processing & Trade
Particulars
30000Kg 45000Kg 60000Kg 60000Kg Remarks
Sales @ 2500 X *Kgs
(67% Above Purchase 7,50,00,000 16,87,50,000 22,50,00,000 22,50,00,000 2 Times
Price)
Less: Purchase Cost @
4,50,00,000 10,12,50,000 13,50,00,000 13,50,00,000 2 Times
1500 x *kgs
Less: Other Purchase
3,99,600 5,99,400 7,99,200 7,99,200 2 Times
Expenses
Less: Transportation 4,50,000 6,75,000 9,00,000 9,00,000 2 Times
Less: Loading Unloading 9,600 14,400 19,200 19,200 2 Times
Less: Grading 30,000 45,000 60,000 60,000 2 Times
Less: Sorting 3,00,000 4,50,000 6,00,000 6,00,000 2 Times
Less: Packing 3,30,000 4,95,000 6,60,000 6,60,000 2 Times
Gross Profit c/d 2,84,80,800 6,52,21,200 8,69,61,600 8,69,61,600
GP Ratio % 37.97% 38.65% 38.65% 38.65%
Cost of Processing 15,19,200 22,78,800 30,38,400 30,38,400
Cost of Processing on
3.38% 2.25% 2.25% 2.25%
Purchases %
Gross Profit b/f 2,84,80,800 6,52,21,200 8,69,61,600 8,69,61,600
Less: Admin Expenses 2,40,000 2,40,000 2,40,000 2,40,000 3 Times
Less: Salary of
1,20,000 1,20,000 1,20,000 1,20,000 3 Times
Operational Manager

Less: Depreciation @ 10%

84,125 86,625 86,625 86,625 3 Times
SLM

PBT 2,80,36,675 6,47,74,575 8,65,14,975 8,65,14,975

Taxes @ 30% 84,11,003 1,94,32,373 2,59,54,493 2,59,54,493
PAT 1,96,25,673 4,53,42,203 6,05,60,483 6,05,60,483
NP Ratio % 26.17% 26.87% 26.92% 26.92%

*Notes:
Just assumed to be 2 times the Monthly Sales and Direct Expenses & 3 Times
Indirect Expenses as in Annexure 9A + Refer Annexure 11 for Input of Kgs

17 | P a g e
 ➢ Yearly Projection

Annex 9C - Yearly Export Projection and Profitability at Various Scales (6&12 Times Monthly)
Scale of Yearly Processing & Trade
Particulars
90000Kg 135000Kg 180000Kg 180000Kg Remarks
Sales @ 2500 X *Kgs
(67% Above Purchase 22,50,00,000 33,75,00,000 45,00,00,000 45,00,00,000 6 Times
Price)
Less: Purchase Cost @
13,50,00,000 20,25,00,000 27,00,00,000 27,00,00,000 6 Times
1500 x *kgs
Less: Other Purchase
11,98,800 17,98,200 23,97,600 23,97,600 6 Times
Expenses
Less: Transportation 13,50,000 20,25,000 27,00,000 27,00,000 6 Times
Less: Loading Unloading 28,800 43,200 57,600 57,600 6 Times
Less: Grading 90,000 1,35,000 1,80,000 1,80,000 6 Times
Less: Sorting 9,00,000 13,50,000 18,00,000 18,00,000 6 Times
Less: Packing 9,90,000 14,85,000 19,80,000 19,80,000 6 Times
Gross Profit c/d 8,54,42,400 12,81,63,600 17,08,84,800 17,08,84,800
GP Ratio % 37.97% 37.97% 37.97% 37.97%
Cost of Processing 45,57,600 68,36,400 91,15,200 91,15,200
Cost of Processing on
3.38% 3.38% 3.38% 3.38%
Purchases %
Gross Profit b/f 8,54,42,400 12,81,63,600 17,08,84,800 17,08,84,800
Less: Admin Expenses 9,60,000 9,60,000 9,60,000 9,60,000 12 Times
Less: Salary of
4,80,000 4,80,000 4,80,000 4,80,000 12 Times
Operational Manager
Less: Depreciation @
3,36,500 3,46,500 3,46,500 3,46,500 12 Times
10% SLM
PBT 8,36,65,900 12,63,77,100 16,90,98,300 16,90,98,300
Taxes @ 30% 2,50,99,770 3,79,13,130 5,07,29,490 5,07,29,490
PAT 5,85,66,130 8,84,63,970 11,83,68,810 11,83,68,810
NP Ratio % 26.03% 26.21% 26.30% 26.30%

*Notes:
Just 6 times the Monthly Sales and Direct Expenses & 12 Times Indirect Expenses
as in Annexure 9A+ Refer Annexure 11 for Input of Kgs.
The Projections are of Both Exports and Rejections Sold Domestically
Disclaimer: The question in your mind would be why the Sales and Indirect
Expenses are assumed at different multiples. That is Because any business does
not run evenly throughout the year and the product being a seasonal item the has
a tentative market rate, we have adjusted they cycle accordingly.
As we said earlier in this report these projections are just to make you
familiar with the market and the profitability.
We can study and present this information more accurately but one thing is
sure If you buy a Kg at Rs. 1500 and cost Rs.70, No let’s consider it more
including various other hypothetical losses and duties. Rs. 500. And you can
sell that at or above Rs. 2500. Still a Profit of Rs. 500/- Per Kg. Simple

18 | P a g e
▪ Return on Investment
Return on investment at various level of investment starting form minimum 1
Crore to maximum up to 5 Crore as in Annexure 8 & Net Profits from Annexure
9A, 9B & 9C are being compare as under:
Annex 10 - Comparison of Return on Investment & Annex 9A,9B & 9C
Particulars Yearly Quarterly Monthly
Initial Investment Made Rs 93,65,000
Sales Rs. 22,50,00,000 Rs. 7,50,00,000 Rs. 3,75,00,000
Purchases Rs. 13,50,00,000 Rs. 4,50,00,000 Rs. 2,25,00,000
Direct Cost RS 45,57,600 RS 15,19,200 RS 7,59,600
Gross Profit Rs. 8,54,42,400 Rs. 2,84,80,800 Rs. 1,42,40,400
Indirect Cost RS 17,76,500 RS 4,44,125 RS 1,48,042
Tax Rs. 2,50,99,770 RS 84,11,003 RS 42,27,708
Net Profit Rs. 5,85,66,130 Rs. 1,96,25,673 RS 98,64,651
Return on Investment 625.37% 209.56% 105.34%
Initial Investment Made Rs. 1,69,65,000
Sales Rs. 33,75,00,000 Rs. 16,87,50,000 Rs. 5,62,50,000
Purchases Rs. 20,25,00,000 Rs. 10,12,50,000 Rs. 3,37,50,000
Direct Cost RS 68,36,400 RS 22,78,800 RS 11,39,400
Gross Profit Rs. 12,81,63,600 Rs. 6,52,21,200 Rs. 2,13,60,600
Indirect Cost RS 17,86,500 RS 4,46,625 RS 1,48,875
Tax Rs. 3,79,13,130 Rs. 1,94,32,373 RS 63,63,518
Net Profit Rs. 8,84,63,970 Rs. 4,53,42,203 Rs. 1,48,48,208
Return on Investment 944.62% 484.17% 158.55%
Initial Investment Made Rs. 3,19,65,000
Sales Rs. 45,00,00,000 Rs. 22,50,00,000 Rs. 7,50,00,000
Purchases Rs. 27,00,00,000 Rs. 13,50,00,000 Rs. 4,50,00,000
Direct Cost RS 91,15,200 RS 30,38,400 RS 15,19,200
Gross Profit Rs. 17,08,84,800 Rs. 8,69,61,600 Rs. 2,84,80,800
Indirect Cost RS 17,86,500 RS 4,46,625 RS 1,48,875
Tax Rs. 5,07,29,490 Rs. 2,59,54,493 RS 84,99,578
Net Profit Rs. 11,83,68,810 Rs. 6,05,60,483 Rs. 1,98,32,348
Return on Investment 1263.95% 646.67% 211.77%
Initial Investment Made Rs. 4,69,65,000
Sales Rs. 45,00,00,000 Rs. 22,50,00,000 Rs. 7,50,00,000
Purchases Rs. 27,00,00,000 Rs. 13,50,00,000 Rs. 4,50,00,000
Direct Cost RS 91,15,200 RS 30,38,400 RS 15,19,200
Gross Profit Rs. 17,08,84,800 Rs. 8,69,61,600 Rs. 2,84,80,800
Indirect Cost RS 17,86,500 RS 4,46,625 RS 1,48,875
Tax Rs. 5,07,29,490 Rs. 2,59,54,493 RS 84,99,578
Net Profit Rs. 11,83,68,810 Rs. 6,05,60,483 Rs. 1,98,32,348
Return on Investment 1263.95% 646.67% 211.77%

19 | P a g e
 ▪ Various Variables for Target Production:
The following are various major variables for the target production that
directly and indirectly affect the production output and cost of processing at different
investments levels. See Annex-11

Annex 11 -Variables of Production at Various Scales

Scale of Production
S.No Particulars
5000Kg 10000Kg 20000Kg 30000Kg Remarks
1 Employees 20 Nos 30 Nos 40 Nos 40 Nos Note 1
Production Per Day Grading
2 1000 Kg 2000 Kg 2000 Kg 2000 Kg Note 2
(Avg 25kg/person)
Production Per Day Sorting
3 500 Kg 750 Kg 1000 Kg 1000 Kg Note 3
(Avg 25kg/person)
4 Minimum Production 500 Kg 750 Kg 1000 Kg 1000 Kg Note 4
Days Required for Total
5 10 Days 13 Days 20 Days 30 Days Note 5
Production
No. Of Cycles of Purchase Per
6 3 Cycles 2.25 Cycles 1.5 Cycles 1 Cycle
Month
Purchases for a Month
7 15000 Kg 22500 Kg 30000 Kg 30000 Kg
(*Cycles X *Kg)
8 Purchases for a Quarter 30000 Kg 45000 Kg 60000 Kg 60000 Kg 2 Times
9 Purchases for a Year 90000 Kg 135000 Kg 180000 Kg 180000 Kg 6 Times
*Notes:
1. Employees stated above are daily wage employees and if we appoint salaried
employees the cost can be further reduced.
2. Grading as stated in Annex-1’s Note-2, The scale of 5000kg contains only 1
Grading machine rest all Scales are on the basis of 2 Grading Machines and the
figures are the minimum amount in Kg that can be Graded per day.
3. Sorting can only be done efficiently under manual sorting method i.e., handpicking,
and this require skilled labours, even if they are unskilled, they can sort up to 25Kg/s
per day per person. If the item has no defects and if the product is good enough,
we may not even require sorting at all. Still if the purchased product has many
infected cardamoms after few weeks, they may catch up the speed and may be able
to sort up to maximum 50Kg per day per person we have considered labour as
unskilled & fresh for the report. Skilled Labors are easily available at reasonable
cost in South India.
4. The Quarterly and Yearly values are multiplied with 2 & 6 is because of the same
reason as stated in the Disclaimer below Yearly projections - Above

20 | P a g e
 ▪ Fixed Charges:
These charges are fixed irrespective of processing scale for the normal
functioning of the plant. See Annex-12.
The following are such major expenses which is necessary apart form the cost of
processing:
Annex 12 - Fixed Charges at Various Levels
Scale of Monthly Production
S.No Particulars
15000Kg 22500Kg 30000Kg 30000Kg Remarks
1 Electricity Charges Rs. 5,000 Rs. 5,000 Rs. 5,000 Rs. 5,000 Note 1
2 Admin Expenses Rs. 10,000 Rs. 10,000 Rs. 10,000 Rs. 10,000 Note 1
3 Salary for Supervisor Rs. 10,000 Rs. 10,000 Rs. 10,000 Rs. 10,000 Note 1
4 Salary for Manager Rs. 10,000 Rs. 10,000 Rs. 10,000 Rs. 10,000 Note 1
5 Salary for Accountant Rs. 15,000 Rs. 15,000 Rs. 15,000 Rs. 15,000 Note 1
6 Drivers Salary x 2 Rs. 20,000 Rs. 20,000 Rs. 20,000 Rs. 20,000 Note 1
8 Salary for Others Rs. 10,000 Rs. 10,000 Rs. 10,000 Rs. 10,000 Note 1
Total Monthly Rs. 80,000 Rs. 80,000 Rs. 80,000 Rs. 80,000
Total Quarterly Rs. 240,000 Rs. 240,000 Rs. 240,000 Rs. 240,000 3 Times
Total Yearly Rs. 960,000 Rs. 960,000 Rs. 960,000 Rs. 960,000 12 Times

*Notes:

1. Electricity Charges are excluding the processing plant equipment’s electricity

charges (i.e., considered in the cost of processing under grading) and are
considered to be the maximum cost of bill for a month.
2. Admin Expenses includes many stationary expenses, fuel expenses, local
travelling, housekeeping, cleaning, and various other expenses and are considered
to be the maximum cost of bill for a month provided business has its own vehicle for
travelling.
3. Supervisor is needed for supervising the labourers and keeping the record of stocks.
4. Manager is needed for managing the plant and many local monetary and non-
monetary transactions when the Operational Manager is not available.
5. Accountant is required for Book-keeping.
6. Drivers are optional as stated earlier only required if business owns Delivery Van
and Business Vehicle.
7. Others may include any other expenses over and above all mentioned expenses.

21 | P a g e
 ▪ Cost of Processing:
These are major cost that varies according to the processing scale and are also
known as Direct variable costs. See Annex-13.

The following are such major costs:

Annex 13 -Cost of Processing at Various Levels Per/Kg
Scale of Monthly Production
S.No Particulars
Rates 15000Kg 22500Kg 30000Kg 30000Kg Remarks
1 Grading Cost Rs 1/Kg Rs. 1 Rs. 15,000 Rs. 22,500 Rs. 30,000 Rs. 30,000
2 Packing Cost Rs 11/Kg Rs. 11 Rs. 165,000 Rs. 247,500 Rs. 330,000 Rs. 330,000 Table 1
Loading Unloading Rs
3 Rs. 16 Rs. 4,800 Rs. 7,200 Rs. 9,600 Rs. 9,600
16/Bag (50kg) Table 2
Purchase & Others
4 Rs. 13 Rs. 199,800 Rs. 299,700 Rs. 399,600 Rs. 399,600
Expenses Rs.13.32/Kg Table 3
Transportation Charges
5 Rs. 15 Rs. 225,000 Rs. 337,500 Rs. 450,000 Rs. 450,000
Rs 15/Kg
6 Sorting Wages Rs 10/Kg Rs. 10 Rs. 150,000 Rs. 225,000 Rs. 300,000 Rs. 300,000 Note 1
Total Rs. 66 Rs. 759,600 Rs. 1,139,400 Rs. 1,519,200 Rs. 1,519,200
Cost of Processing Per Kg = Rs. 66/- Lets Round it higher to Rs. 70/-
*Notes:
1. Sorting charges is computed on the basis that, an employee is paid 250 Rs per
person and they can sort up to 25kg per day as mentioned above that means they
are paid Rs 10 per Kg this will come down to Rs 5 when they become efficient and
skilled enough.
*Tables
Table - 1 Packing Charges of a 50Kg Bag
S. No Particulars Amt/Kg
1 Jute Bag Rs. 100.00
2 Linear Rs. 7.00
3 5Kg Packets x 10 Nos Rs. 50.00
4 1Kg Packets x 50 Nos Rs. 350.00
Total Rs. 503.00
Cost Per Kg Rs. 10.14
Rounded Off Higher Per Kg Rs. 11.00

Table - 2 Purchase Cost from Farmer

S.No Particulars Amt/Kg
1 Local Commission Rs. 10.00
2 Farmer Loading Rs. 0.16
3 Mixing Unloading Rs. 0.16
4 Local Transport Rs. 2.00
5 Local Mixing Labour & Bagging Rs. 1.00
Total Rs. 13.32

22 | P a g e
 Table - 3 Rates in Detail
S.No Particulars Amt/Kg
1 Loading per Bag Rs. 8.00
2 Unloading per Bag Rs. 8.00
3 1 Kg Packing Rs. 7.00
4 5 Kg Packing Rs. 5.00
5 50 Kg Linear Rs. 3.00
6 Jute Bag 50 Kg Rs. 100.00

12. About the Product, Profitability and Mode of Sale in more detail

✓ Export Sale
✓ Domestic Sale
✓ Seasonal Domestic/Export Sale

▪ Export Sale:
The cardamom can be bought from farmers in Bulk (Unprocessed). And the
same can be processed into various Export qualities and sizes and can be exported
further, provided the gap of time involved in processing the stock. Further the
Rejections and left overs can be sold in the Domestic Market and the Domestic
Market rates.

▪ Domestic Sale:
The same Export Quality goods can be sold in the Domestic Market as well.
If there is a Dead lock or any Unfavorable situation, we can sell the Product in the
Domestic market without any loss. And we can also sell items which are By-products
of processing in the Domestic market.

Let’s Consider an Illustration:

Let’s Assume, we have purchased 1000Kg at Rs.1380/-

Per Kg (the Actual Rate quoted by a farmer on 6th August
2020) costing us Rs. 1380000/-. Assuming it took us a day for
processing the same (details of processing cycle given earlier
in the report). Now after separating the Export Quality Items
which amounted to 40% of the Stock, we are left with 60% of
Other by Products. Which we can sell it at next day market rates
as on 7th Aug 2020.

23 | P a g e
 The table on next page shows the type of products of cardamom after processing
and their Current market rates as quoted on 7th August 2020 at different places.

Annex 14A - Current Market Rates of Processed Stock

as on 7th Aug 2020
Export Bid Rates Quoted at
S. Rates Quoted at
Grades Quoted by Bodi/Thevaram
No Nagpur
Spices Board (South)
1 AGEB [7mm & Above] - EXPORT 6000 Rs. 2,600.00 Rs. 2,400.00
2 AGB [6mm to 7mm] - EXPORT 5500 Rs. 2,100.00 Rs. 1,900.00
3 AGS [5mm to 6mm] - EXPORT 5000 Rs. 1,720.00 Rs. 1,650.00
4 Mini Bold - Rs. 1,350.00 Rs. 1,200.00
5 Pan - Rs. 1,380.00 Rs. 1,220.00
6 7.5mm above Fruit Bold - Rs. 2,100.00 Rs. 2,000.00
7 7.5mm above Sikh & Split Bold - Rs. 1,700.00 Rs. 1,400.00
8 Seed - Rs. 1,500.00 Rs. 1,250.00
*Notes: The Export Prices Quoted in August are not available. Hence Avg Rate Quoted
During July’20 Being Rs. 7431 (See Annex 7). Still We have considered only Rs. 6000/-
Per/Kg & the other 2 Below 8mm Export Qualities are given a gap of Rs. 500

As we see there is a gap between the prices of North and South on the same day
this is because the various costs and a profit element. And now let’s see the
output of the processes, which may vary according to the lots purchase even though
we are taking an average output of the processing if done regularly. And the
Average Sale price of the lot. Stated as below See Annex 14B.

Annex 14B - Average Sale Price of Outputs in a Lot of 1000Kg Lot

Outputs [Kgs] % Probable Prices [Rs]
S.No Grades Share in a Total Sales
Max Min Avg Lot Export Domestic
[Rs]
1 AGEB [7mm & Above] - EXPORT 200 50 125 13% 6000 750000
2 AGB [6mm to 7mm] - EXPORT 400 100 250 25% 5500 1375000
3 AGS [5mm to 6mm] - EXPORT 500 200 350 35% 5000 1750000
4 Mini Bold 200 50 125 13% 1350 168750
5 Pan 90 30 60 6% 1380 82800
6 7mm above Fruit Bold 60 10 35 4% 2100 73500
7 7mm above Sikh & Split Bold 80 10 45 5% 1700 76500
8 Seed 20 0 10 1% 1500 15000
Total 1000 Kgs 100% Rs. 4291550
Average Sale Price Per/Kg (Total Sales/1000 Kg) Rs. 4292
*Note
1. Export Prices used are Quoted by Spices Board & Domestic Sale Price as per Market
Quotes
2. Now the Cost of Processing per unit is Rs 70/- lets consider it to be Rs. 200/- at
all scales See Annex 13 Then the Total Cost/ Kg would be Rs. 1580 (i.e., Rs.1380
+ Rs. 200).
Now the profit per Kg is Rs. 2712/- (Rs. 4292 – Rs. 1580).

That is simply 63.1873% on Sales [OR] 196.5211% on Purchases

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 ▪ Seasonal Domestic/Export Sales:
The Domestic/Export Prices of the outputs are not available for past years
as the market is volatile and has a huge hike during off season. If we purchase the
item during the season and store it for the off season, we can gain a huge gain even
without processing the stock.
Let’s have a look at the Domestic Market if the Price Increases here, it is
sure that the Export Prices also would be definitely higher. The average purchase
rates of unprocessed cardamom quoted by the auction centers in Bulk during
May Month (On Season) and January Month (Off Season) of past 2 years
(2018-19 & 2019-2020) taken from Spices Board’s Site, comparatives are
provided in the Annexures Below See Annex 15A & 15B on FIFO Basis.

The Comparisons of Season 2019-20 (i.e., May’19 & Jan’20 given below)
Annex 15A - FIFO assumed Sales
Comparison of Prices during Seasons of 2019-20
Jan'20 (Sale Avg May'19 (Purchase Avg Gain in
S. No Dates Dates
Rates) /Kg Rates) /Kg 7 months /Kg
1 8-Jan-2020 Rs. 3,892.88 16-May-2019 Rs. 2,459.47 Rs. 1,433.41
2 7-Jan-2020 Rs. 3,873.66 15-May-2019 Rs. 2,408.00 Rs. 1,465.66
3 7-Jan-2020 Rs. 3,863.78 15-May-2019 Rs. 2,269.50 Rs. 1,594.28
4 6-Jan-2020 Rs. 3,953.60 14-May-2019 Rs. 2,272.16 Rs. 1,681.44
5 6-Jan-2020 Rs. 3,913.12 14-May-2019 Rs. 2,324.83 Rs. 1,588.29
6 4-Jan-2020 Rs. 4,015.60 13-May-2019 Rs. 2,308.78 Rs. 1,706.82
7 4-Jan-2020 Rs. 4,096.89 13-May-2019 Rs. 2,255.25 Rs. 1,841.64
8 3-Jan-2020 Rs. 3,862.26 11-May-2019 Rs. 2,504.39 Rs. 1,357.87
9 3-Jan-2020 Rs. 3,885.87 11-May-2019 Rs. 2,450.86 Rs. 1,435.01
10 2-Jan-2020 Rs. 3,696.14 10-May-2019 Rs. 2,568.06 Rs. 1,128.08
Total Rs. 39,053.80 Rs. 23,821.30 Rs. 15,232.50
Profit on Sales (Profit/Sales) X100 39.00%
.

The Comparisons of Season 2018-19(i.e., May’18 & Jan’19 given below)

Annex 15B - FIFO assumed Sales
Comparison of Prices during Seasons of 2018-19
Jan'20 (Sale Avg May'19 (Purchase Avg Gain in
S.No Dates Dates
Rates) /Kg Rates) /Kg 7 months /Kg
1 7-Jan-2019 Rs. 1,403.98 17-May-2018 Rs. 829.39 Rs. 574.59
2 5-Jan-2019 Rs. 1,387.97 16-May-2018 Rs. 840.96 Rs. 547.01
3 4-Jan-2019 Rs. 1,345.53 16-May-2018 Rs. 802.56 Rs. 542.97
4 3-Jan-2019 Rs. 1,328.97 15-May-2018 Rs. 823.64 Rs. 505.33
5 2-Jan-2019 Rs. 1,326.29 15-May-2018 Rs. 770.19 Rs. 556.10
6 1-Jan-2019 Rs. 1,325.50 14-May-2018 Rs. 762.73 Rs. 562.77
7 31-Dec-2018 Rs. 1,312.17 14-May-2018 Rs. 853.78 Rs. 458.39
8 29-Dec-2018 Rs. 1,281.00 12-May-2018 Rs. 844.16 Rs. 436.84
9 28-Dec-2018 Rs. 1,314.95 12-May-2018 Rs. 812.63 Rs. 502.32
10 27-Dec-2018 Rs. 1,307.57 11-May-2018 Rs. 816.33 Rs. 491.24
Total Rs. 13,333.93 Rs. 8,156.37 Rs. 5,177.56
Profit on Sales (Profit/Sales) X100 38.83%
You can see the Profit that the stock can grab Between Season and Off
season.

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13. Purchases

Purchases are mainly focused from farmers for availing the best cost
advantage and if it is not sufficient then we can also purchase the item from the local
south Indian traders, you might think that why don’t they sell directly to North India.
As I mentioned earlier there is a language barrier between both this opposite
sides of the country, even if they overcome that barrier the main challenge is to find a
genuine buyer who pays the amount in time and is credit worthy. As we know such
wholesale market depends on credit facility and genuinely, it is very hard to find a
genuine buyer hence the supplier always looks to sell their products through a
Commission agent (Broker) for avoiding the Risk of nonpayment by buyer.
Here is where we have the advantage as mentioned in Key Advantage. The
applicant has been working in this field for over 20 years and have a great knowledge
about the market as well as have many genuine suppliers and buyers all over India.

14. Processing

Currently there are processing units in south India. And they do various types of
processing but most of them are processing for their suppliers and are not independent
enough to invest huge amount in the market.

• Grading & Sorting: Cardamom capsules should be sorted into size classes and
different sizes which will allow different grades to be separated as well as the
separation of split and insect infested small green cardamom. Cardamom is graded
on the basis of colour, clipping (i.e. pods with the tips trimmed), size, whether bleached
or unbleached, the proportion of extraneous matter present, and product origin.
Grading is carried out in accordance with a relevant national standard, if available,
such as those used by Indian producers. In addition, ISO standard 882-1 provides
some general guidelines on the grading, handling and packing of cardamom1.In the
US market, the American Spice Trade Association (ASTA) adopted the original
Cleanliness Specifications for spices, seeds and herbs in 1969. These have been
revised numerous times, the latest occurring in 2007. The ASTA Cleanliness
Specifications were designed to meet or exceed the United States Food and Drug
Administration (FDA) Defect Action Levels (DAL). The DAL refers to Title 21, Code of
Federal Regulations, Part 110.110 that allows the Food and Drug Administration
(FDA) to establish maximum levels of natural or unavoidable defects in foods for
human use that present no health hazard.

• Packing: Small Green Cardamom capsules can be packaged firstly in a 1Kg brand
cover then such 5 covers are again packed in a 5Kg Cover then such ten 5kg covers
are packed into a 50Kg linear then further into a 50Kg Jute Bag.

The bags should be sealed to prevent moisture entering. Sealing machines can be
used to seal the bags. Attractive labels should be applied to the products. The label

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 needs to contain all relevant product and legal information – the name of the product,
brand name (if appropriate), details of the manufacturer (name and address), date of
manufacture, expiry date, weight of the packet, plus any other information that the
country of origin and of import may require (a barcode, producer code and packer
code are all extra information that is required in some countries to help trace the
product back to its origin).This is most necessary part because the buyers buy the
items by selecting the Brand name.

15. Sales
Sales includes selling in domestic market as well as export. Major chunk of sales lies
in domestic market. Finding genuine buyers and selling them on Cash or Credit is the
tricky part in the whole process and this is where many sellers lack the confidence.
This will result as a Key advantage for us. And this area includes many aspects like
price fixation and many other models which can only be detailed in a detailed report.

16. Other Spices for Diversification

The applicant is capable of doing the same business with other spices too because of
the same reasons as stated for the cardamom processing plant. The items are as
follows:
S. No Items
1 Black Pepper
2 White Pepper
3 Bettle Nut (Supari)
4 Nutmeg (Jai)
5 Nutmeg Flower (Jai Patri)
6 Cashew nut
7 Dry ginger

These all are farmed in Kerala, farmers grow them to trade it just like small green
cardamom

17. Conclusion

We seek your investment for this project. We have all other necessities to run
this business except the fund. It would be a great business opportunity to invest in this
and partner in this project. We expect you to invest funds and join us in the journey.
If you have any other queries or require any more details about this business,
please feel free to contact me
K K Jayan
Mob: +91 8547728032, +91 9960695460, +91 8157991006
Email: jayankk2070@gmail.com, abhijithkjayan007@gmail.com

Thank You
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