Madhya Pradesh Glychem Industries Limited, A Ruchi group company is an existing profit making Company having its registered office at 201 Mahakosh House, 7/5 South Tukoganj, Indore is engaged in Solvent Extraction of oil seeds. In the year 1994 the company proposed to set up Food Processing unit (500 TPD and Oil Refinery of 75 TPD) at Village Kamti, Gadarwara (MP) and a Milk Processing unit (150 KL per day) at Dewas (MP). The total cost of project and means of finance for these projects as appraised by IDBI was as under: -
| Particulars | Food Processing | Milk Processing | Total | |
| (Rs. in Lakhs) | ||||
| a) Cost of Project | ||||
| Land | 20.00 | 6.00 | 26.00 | |
| Site Development | 6.45 | 5.00 | 11.45 | |
| Buildings | 233.08 | 105.41 | 338.50 | |
| Plant & Machinery | 818.06 | 755.04 | 1573.10 | |
| Misc.Fixed assets | 20.90 | 16.15 | 37.05 | |
| Public issue Exps. | 80.00 | 40.00 | 120.00 | |
| Pre-Production Exps. | 81.50 | 12.80 | 94.30 | |
| Contingencies | 58.01 | 44.71 | 102.72 | |
| Working Capital Margin | 456.30 | 111.11 | 567.41 | |
| Total | 1774.30 | 1096.22 | 2870.53 | |
| b) Means of Finance | ||||
| Share Capital | 1082.21 | |||
| Share Premium | 1623.32 | |||
| Lease Finance | 150.00 | |||
| Subsidy | 15.00 | |||
| Total | 2870.53 | |||
The company came out with the public issue and has already implemented the Food Processing unit. The implementation of the Milk processing unit is under progress and the unit shall commence commercial production by Oct. 1995.
I) FOOD PROCESSING UNIT
The food-processing unit of the company consists of a soybean based solvent extraction plant and a refinery. The company has set up an 800 TPD solvent extraction plant in place of planned 500 TPD plant. During 1994-95, the plant was operated but its capacity utilization was poor due to initial bottlenecks. The company has now taken up a programme for capacity optimization in order to obtain scale of economy. It was originally proposed to set up a 75-TPD Batch refinery based on Alfa Laval Supply. However, now company is taking major machinery from Westfalia and DeSemt Chemfood in order to set up a most modern continuous refinery with capacity of 100 TPD.
II) Milk Processing Unit
The project cost of this unit has very slightly increased by Rs. 30.73 lakhs due to additional land acquired by the company and slight increase in Pre-operative expenses due to delay in implementation of the project. Due to high cost of lease finance, the company has not availed lease / hire purchase finance of Rs. 150.00 lakhs as originally envisaged. Besides, the capital subsidy of Rs. 15 lakhs as originally proposed has not yet been disbursed to the company due to revised Govt. guidelines.
These two modifications have led to increased project cost as under :-
| (Rs. in lakhs) | |||
| � | As appriased by IDBI | Now Additional Cost | Proposed Cost |
| Food Processing Unit | 1759.00 | 2955.00 | 1196.00 |
| Milk Processing# | 1112.00 | 1176.00 | 64.00 |
| Total | 2871.00 | 4131.00 | 1260.00 |
#. The expenditure pertaining to Soya Isolate plant, which were originally taken in the project cost of Food Processing unit by IDBI, have now been classified with the Milk Processing project cost as the company shall install this plant with the Milk Processing unit instead of Food processing unit.
With the above shortfall (Rs. 1260), and reduction in the means of finance (Rs. 165 lakhs), the total shortfall of Rs. 1425.00 lakhs (i.e. Rs 1260+Rs. 165 lakhs) is proposed to be financed as under :-
a) Internal accruals (Part of which
has already been
incurred by the company) 425.00
b) Term loan 1000.00
---------
Total 1425.00
=========