PROJECT REPORT

OF
CHICKEN NUGGETS PROCESSING UNIT

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Chicken Nuggets Processing Unit.

The objective of the pre-feasibility report is primarily to facilitate potential

entrepreneurs in project identification for investment and in order to serve his
objective; the document covers various aspects of the project concept development,
start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can
also prepare project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak

Building , 27/1/B, Gokhlley Marg, Lucknow-226001
Delhi Office: Multi-Disciplinary Training
Centre, Gandhi Darshan Rajghat, New Delhi 110002
Email: [email protected]
Contact: +91 7526000333, 444, 555
 PROJECT AT GLANCE

1 Name of Proprietor/Director XXXXXXXX

2 Firm Name XXXXXXXX
3 Registered Address XXXXXXXX
4 Nature of Activity XXXXXXXX
5 Category of Applicant XXXXXXXX
6 Location of Unit XXXXXXXX
7 Cost of Project 24.67 Rs. In Lakhs
8 Means of Finance
i) Own Contribution 2.47 Rs. In Lakhs
ii) Term Loan 16.20 Rs. In Lakhs
iii) Working Capital 6.00 Rs. In Lakhs
9 Debt Service Coverage Ratio 3.11
10 Break Even Point 0.23
11 Power Requiremnet 20 KW
12 Employment 12 Persons

Chicken meat brests, flour,

13 Major Raw Materials
Cornstarch, sea-salt, Edible
oil & Food preservatives
14 Details of Cost of Project & Means of Finance

Cost of Project
Particulars Amount in Lacs
Land Owned/Leased
Building & Civil Work Owned/Leased
Plant & Machinery 17.00
Furniture & Fixture -
Other Misc Assets 1.00
Working Capital Requirement 6.67
Total 24.67
Means of Finance
Particulars Amount in Lacs
Own Contribution 2.47
Term Loan 16.20
Working capital Loan 6.00
Total 24.67
 1. INTRODUCTION

A chicken nugget is a chicken product made from either meat slurry or chicken breasts cut to
shape, breaded or battered, then deep-fried or baked. Fast food restaurants typically fry their
nuggets in vegetable oil, such as coconut oil. The chicken nugget was invented in the 1950s by
Robert C. Baker, a food science professor at Cornell University, and published as unpatented
academic work. Dr. Baker's innovations made it possible to form chicken nuggets in any shape.
McDonald's recipe for Chicken McNuggets was created on commission from McDonald's by
Tyson Foods in 1979 and the product was sold beginning in 1980 .

2. PRODUCT DESCRIPTION

2.1 PRODUCT USES

Invented in the 1950s, chicken nuggets have become a very popular fast food restaurant item, as
well as widely sold frozen for home use. Chicken Nuggets are widely used in households as
ready to eat snacks and are also loved by people of all age groups. Chicken Nuggets are one of
the most commonly eaten dish in fast food restaurants.
2.2 PRODUCT RAW MATERIAL

The major raw material required for processing Chicken Nuggets are:

 Chicken meat breasts

 Flour
 Cornstarch
 Sea salt
 Edible oil
 Food preservatives

2.3 MANUFACTURING PROCESS

The processing required for making chicken nuggets begins with deboning. The chicken is cut
and shaped to the correct size. This is done either manually, or by a series of automatic blades, or
by a process called grinding (a method of deboning in which the softer parts of the chicken
carcass are forced through a mesh, leaving behind the more solid pieces, resulting in a meat
paste. If used, this paste is then shaped before battering). The pieces are battered and breaded in a
large cylindrical drum that rotates, evenly coating all of the pieces in the desired spices and
breading. The pieces are then fried in oil until the batter has set and the outside reaches the
desired color. Finally, the nuggets are packaged, frozen and stored for shipping .

CHICKEN DEBONING

The process of making Chicken Nuggets starts with "deboning" with whole chickens. All the
chicken cuts are separated and the Chicken Breast Meat are set aside for the Chicken Nuggets.
TRIMMING OF CHICKEN BREAST

This process involves trimming of chicken breast of fat.

BELNDING

The chicken breasts that have been separated are collected into bin for blending. Inside the
blender, the ground chicken meat is mixed with some seasonings and chicken skin for flavoring.

FORMING OR SHAPING OF CHICKEN NUGGETS

The blended chicken meat is portioned in equal proportion for giving them the shape of Chicken
Nuggets. The Shape of the Chicken Nuggets can be: The ball, the bell, the boot, and the bow tie .

BATTERING AND BREADING

Then the shaped pieces of Chicken Nuggets are firstly covered in light batter for evenly coating
all of the pieces in the desired spices and breading to give crisp texture to the nuggets. After
being dipped in the light batter, they are covered in a second, thicker batter called tempura.

FRYING

The pieces are then fried in oil until the batter has set and the outside reaches the desired color.
The pieces have only been partially cooked at this stage.

COOLING

The fried nuggets will be kept in freezer for cooling after which they will be frozen and
packaged.

FROZEN, PACKAGING AND SHIPPING

Standard and recommended formulated nuggets were packed in low density polyethylene bags,
sealed and then kept at frozen storage (−18 ± 2 °C) for 0, 25, 50 and 75 days. The products were
analysed at studied interval after thawing in a refrigerator (4 ± 1 °C) for 5–6 h.
 FLOW CHART OF THE PROCESS

Deboning Frying Cooling

Battering & Freezing &

Trimming
Breading Packaging

Blending Shaping

3. PROJECT COMPONENTS

3.1 Land & Building

The land required for this manufacturing unit will be approx. around 3000 square feet. Land
Purchase and Building Civil Work Cost have not been considered as part of the cost of project. It
is expected that the premises will be on rental and approximate rentals assumed of the same will
be Rs.30,000 per month.
Land and building requirement may vary depending on the size of project .
3.2 Plant & Machinery

 Meat Deboning Machine: Meat deboning machine is ideal equipment used

for deboning the poultry, rabbit carcass or small animal skeleton, and produce meat paste
in order to further process them into meat products efficiently.

 Meat mincing machine: Meat mincing machine is mainly used for grinding chicken
meat into meat stuffing’s preparing for making chicken nuggets, chicken sausages, etc.

 Automatic Chicken Nugget Forming Machine: This machine is for making chicken
nuggtes, chicken hamburger in the chicken meat processing line. It can automatically
perform various procedures, such as meat filling, forming and output.
 Chicken Nugget Battering and Breading Machine: It is used for battering hamburger
patties, chicken Nuggets, pumpkin pie, meat skewers, etc for seasoning and flavouring.
The machine can be used with fully automatic chicken nugget forming machine, and can
be used separately.

 Deep-Frying Machine: Deep frying is a method of cooking by submerging food into oil
at high heat, typically between temperatures of 350 °F and 375 °F (175 °C to 190 °C).

 Blast Freezer: Blast Feezer are used for cooling food quickly to a low temperature that is
relatively safe from bacterial growth.
 Packaging Machine: Packaging machine is used for filling, sealing, cutting, heating
pouches. packaging speed can be changed according to the speed of production. touch
screen display for setting up different parameters. It involves setting up of parameters
such as bag length and weight followed by sealing of bag and final product delivered by
conveyor.

 Material handling and other Equipment’s: These Equipment’s are used for material
handling. Other equipment’s like water pumps, weighing machine, etc are also used.
 4 LICENSE & APPROVALS

Basic registration required in this project:

 Registration at Bureau of Indian standards.

 Trade License from the local authority.
 MSME Udyam registration.
 GST Registration
 FSSAI Registration
 Factory license
 Choice of a Brand Name of the product and secure the name with Trademark if required .
PROJECTED BALANCE SHEET (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Liabilities
Capital
Opening balance 4.53 6.36 9.13 13.15
Add:- Own Capital 2.47
Add:- Retained Profit 4.57 6.32 9.27 13.02 17.28
Less:- Drawings 2.50 4.50 6.50 9.00 11.50

Closing Balance 4.53 6.36 9.13 13.15 18.93

Term Loan 14.40 10.80 7.20 3.60 -
Working Capital Limit 6.00 6.00 6.00 6.00 6.00
Sundry Creditors 1.84 2.26 2.71 3.19 3.73
Provisions & Other Liability 0.20 0.24 0.29 0.35 0.41
TOTAL : 26.97 25.65 25.33 26.29 29.08
Assets
Fixed Assets ( Gross) 18.00 18.00 18.00 18.00 18.00
Gross Dep. 2.70 5.00 6.95 8.60 10.01
Net Fixed Assets 15.30 13.01 11.05 9.40 7.99

Current Assets
Sundry Debtors 4.93 6.23 7.47 8.82 10.29
Stock in Hand 3.76 4.56 5.43 6.36 7.32
Cash and Bank 2.98 1.86 1.37 1.71 3.47
TOTAL : 26.97 25.65 25.33 26.29 29.08
PROJECTED PROFITABILITY STATEMENT (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Capacity Utilisation % 30% 35% 40% 45% 50%
SALES
Gross Sale
Chicken Nuggets 98.66 124.60 149.45 176.49 205.86

Total 98.66 124.60 149.45 176.49 205.86

COST OF SALES
Raw Material Purchased 55.08 67.66 81.22 95.74 111.78
Electricity Expenses 1.15 1.61 1.72 1.94 2.15
Depreciation 2.70 2.30 1.95 1.66 1.41
Wages & labour 15.36 17.66 20.31 23.36 26.86
Repair & maintenance 2.96 3.74 5.23 6.18 5.15
Packaging 7.89 9.97 11.96 14.12 16.47
Cost of Production 85.14 102.94 122.39 142.99 163.82
Add: Opening Stock - 2.84 3.43 4.08 4.77
Less: Closing Stock 2.84 3.43 4.08 4.77 5.46
Cost of Sales 82.31 102.35 121.74 142.31 163.13
GROSS PROFIT 16.35 22.25 27.71 34.19 42.74
16.57% 17.86% 18.54% 19.37% 20.76%
Salary to Staff 3.96 4.75 5.70 6.84 8.21
Interest on Term Loan 1.59 1.40 1.01 0.61 0.21
Interest on working Capital 0.66 0.66 0.66 0.66 0.66
Rent 3.60 3.78 3.97 4.17 4.38
Selling & Administrative Exp. 1.97 4.98 5.98 7.06 8.23
TOTAL 11.79 15.58 17.32 19.34 21.70
NET PROFIT 4.57 6.67 10.40 14.84 21.04
Taxation - 0.35 1.12 1.82 3.76
PROFIT (After Tax) 4.57 6.32 9.27 13.02 17.28
NET PROFIT RATIO 4.63% 5.08% 6.20% 7.38% 8.40%
PROJECTED CASH FLOW STATEMENT (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
SOURCES OF FUND
Own Margin 2.47
Net Profit 4.57 6.67 10.40 14.84 21.04
Depreciation & Exp. W/off 2.70 2.30 1.95 1.66 1.41
Increase in Cash Credit 6.00 - - - -
Increase In Term Loan 16.20 - - - -
Increase in Creditors 1.84 0.42 0.45 0.48 0.53
Increase in Provisions & Oth labilities 0.20 0.04 0.05 0.06 0.07

TOTAL : 33.97 9.43 12.85 17.04 23.05

APPLICATION OF FUND
Increase in Fixed Assets 18.00
Increase in Stock 3.76 0.80 0.87 0.93 0.96
Increase in Debtors 4.93 1.30 1.24 1.35 1.47
Repayment of Term Loan 1.80 3.60 3.60 3.60 3.60

Drawings 2.50 4.50 6.50 9.00 11.50

Taxation - 0.35 1.12 1.82 3.76
TOTAL : 30.99 10.55 13.34 16.70 21.29

Opening Cash & Bank Balance - 2.98 1.86 1.37 1.71

Add : Surplus 2.98 -1.12 -0.49 0.34 1.77
Closing Cash & Bank Balance 2.98 1.86 1.37 1.71 3.47
CALCULATION OF D.S.C.R

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

CASH ACCRUALS 7.27 8.62 11.22 14.68 18.69

Interest on Term Loan 1.59 1.40 1.01 0.61 0.21
Total 8.86 10.02 12.23 15.29 18.91

REPAYMENT
Instalment of Term Loan 1.80 3.60 3.60 3.60 3.60
Interest on Term Loan 1.59 1.40 1.01 0.61 0.21

Total 3.39 5.00 4.61 4.21 3.81

DEBT SERVICE COVERAGE RATIO 2.61 2.00 2.65 3.63 4.96

AVERAGE D.S.C.R. 3.11
 REPAYMENT SCHEDULE OF TERM LOAN
Interest 11.00%
Closing
Year Particulars Amount Addition Total Interest Repayment Balance
1st Opening Balance
1st month - 16.20 16.20 - - 16.20
2nd month 16.20 - 16.20 0.15 - 16.20
3rd month 16.20 - 16.20 0.15 - 16.20
4th month 16.20 - 16.20 0.15 16.20
5th month 16.20 - 16.20 0.15 16.20
6th month 16.20 - 16.20 0.15 16.20
7th month 16.20 - 16.20 0.15 0.30 15.90
8th month 15.90 - 15.90 0.15 0.30 15.60
9th month 15.60 - 15.60 0.14 0.30 15.30
10th month 15.30 - 15.30 0.14 0.30 15.00
11th month 15.00 - 15.00 0.14 0.30 14.70
12th month 14.70 - 14.70 0.13 0.30 14.40
1.59 1.80
2nd Opening Balance
1st month 14.40 - 14.40 0.13 0.30 14.10
2nd month 14.10 - 14.10 0.13 0.30 13.80
3rd month 13.80 - 13.80 0.13 0.30 13.50
4th month 13.50 - 13.50 0.12 0.30 13.20
5th month 13.20 - 13.20 0.12 0.30 12.90
6th month 12.90 - 12.90 0.12 0.30 12.60
7th month 12.60 - 12.60 0.12 0.30 12.30
8th month 12.30 - 12.30 0.11 0.30 12.00
9th month 12.00 - 12.00 0.11 0.30 11.70
10th month 11.70 - 11.70 0.11 0.30 11.40
11th month 11.40 - 11.40 0.10 0.30 11.10
12th month 11.10 - 11.10 0.10 0.30 10.80
1.40 3.60
3rd Opening Balance
1st month 10.80 - 10.80 0.10 0.30 10.50
2nd month 10.50 - 10.50 0.10 0.30 10.20
3rd month 10.20 - 10.20 0.09 0.30 9.90
4th month 9.90 - 9.90 0.09 0.30 9.60
5th month 9.60 - 9.60 0.09 0.30 9.30
6th month 9.30 - 9.30 0.09 0.30 9.00
7th month 9.00 - 9.00 0.08 0.30 8.70
8th month 8.70 - 8.70 0.08 0.30 8.40
9th month 8.40 - 8.40 0.08 0.30 8.10
10th month 8.10 - 8.10 0.07 0.30 7.80
11th month 7.80 - 7.80 0.07 0.30 7.50
12th month 7.50 - 7.50 0.07 0.30 7.20
1.01 3.60
4th Opening Balance
1st month 7.20 - 7.20 0.07 0.30 6.90
2nd month 6.90 - 6.90 0.06 0.30 6.60
3rd month 6.60 - 6.60 0.06 0.30 6.30
4th month 6.30 - 6.30 0.06 0.30 6.00
5th month 6.00 - 6.00 0.05 0.30 5.70
6th month 5.70 - 5.70 0.05 0.30 5.40
7th month 5.40 - 5.40 0.05 0.30 5.10
8th month 5.10 - 5.10 0.05 0.30 4.80
9th month 4.80 - 4.80 0.04 0.30 4.50
10th month 4.50 - 4.50 0.04 0.30 4.20
11th month 4.20 - 4.20 0.04 0.30 3.90
12th month 3.90 - 3.90 0.04 0.30 3.60
0.61 3.60
5th Opening Balance
1st month 3.60 - 3.60 0.03 0.30 3.30
2nd month 3.30 - 3.30 0.03 0.30 3.00
3rd month 3.00 - 3.00 0.03 0.30 2.70
4th month 2.70 - 2.70 0.02 0.30 2.40
5th month 2.40 - 2.40 0.02 0.30 2.10
6th month 2.10 - 2.10 0.02 0.30 1.80
7th month 1.80 - 1.80 0.02 0.30 1.50
8th month 1.50 - 1.50 0.01 0.30 1.20
9th month 1.20 - 1.20 0.01 0.30 0.90
10th month 0.90 - 0.90 0.01 0.30 0.60
11th month 0.60 - 0.60 0.01 0.30 0.30
12th month 0.30 - 0.30 0.00 0.30 -
0.21 3.60
DOOR TO DOOR 60 MONTHS
MORATORIUM PERIOD 6 MONTHS
REPAYMENT PERIOD 54 MONTHS
 DISCLAIMER

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