Detailed project report (DPR) is a document that contains information and factual data for the purpose of raising capital or to take informed decision. DPR is an important cornerstone for setting up any type of food business operations. It acts as a road map, describing the direction in which a food company should proceed and how to reach the goals. It also shows the feasibility of the proposed project and probability of achieving profit.
Food entrepreneur can use the detailed project reports to avail the grants or subsidies provided by the government bodies under the implemented schemes. For instance, under the schemes implemented by MOFPI, applications are invited through EOI (Expression of Interest) where the Food Business Operator (FBO) is required to submit a detailed project report.
Components of a DPR for a food business include:
1. Technical Feasibility in Food Manufacturing
Under this section, details regarding the location of the food manufacturing plant and the detailed process to be followed are mentioned. This section:
- Elucidates the basis of selection of food processing and packaging technology
- Provides the performance data of food manufacturing plants based on the technology.
- Includes detailed flow chart of the food manufacturing process.
- Includes compiled data for specifications of all the raw material and equipment required, the quotations received
- Explains the mode of implementation and provides the detailed schedule of implementation
2. Commercial Viability of Food Product
- Existing and potential market demand and supply for the proposed food product in respect of volume and pattern
- Share of the proposed food product of the company in the total market through marketing strategy
- Selling price of the food product and export potential, if any.
- Buy-back arrangements, if any.
3. Financial Appraisal
It is important to mention the financial aspect of the project in the report. It must include:
- Cost of project, including the cost of land & site development, building, plant and machinery, miscellaneous fixed assets, preliminary expenses, contingencies and marginal money for working capital
- Means of financing, explaining share capital, term loans, government subsidies and grants
- Profitability projections including estimated cash flow and projected balance sheet, the financial ratios can be worked on the basis of the projections to ascertain financial soundness of your project
4. Economic Viability
The company will have to take real value of input as against the value accounted in financial analysis for the purpose of economic evaluation of the project. The company carries out social cost benefit analysis as a measure of the costs and benefits of the project to Society and the Economy. Economic analysis is therefore aimed at inherent strength of the project to withstand international competition in the food segment on its own.
5. Management Evaluation
Under this section, following details should be mentioned:
- Memorandum and Articles of Association
- Corporate plan of the food company, projects promoted/implemented/under implementation
- Bankers’ report on dealings and repayment of past loan assistance details of group companies, operations and balance sheet
- Management and Organization set up including broad composition of the Board, details of full time directors and their responsibilities, details of Chief executive and functional executives including qualification, experience, and organization set-up for existing company and during project implementation for new company.