Honey Processing Plant Project Report: Economics, Cost, and Profit

Honey processing is an essential industry for many countries and regions worldwide. A honey processing plant is a facility that takes raw Honey and processes it into various forms, such as liquid Honey, creamed Honey, and comb honey. This blog will look at a detailed project report on a honey processing plant. Let’s check out the honey processing plant project report below.

We will cover all aspects of the project, including market research, the manufacturing process, machinery and equipment, financial projections, and more. By the end of this blog, you will have a comprehensive understanding of what it takes to set up and operate a successful honey processing plant. So, let’s get into it!

Introduction to Honey products

In a honey processing plant, raw Honey is collected from bee hives and then undergoes a series of steps to remove impurities, stabilize the Honey, and package it for distribution. The processing methods can vary depending on the type of Honey being produced but typically include filtering, centrifuging, and heating the Honey to remove impurities and kill any bacteria or yeasts that may cause fermentation. The Honey is then cooled and packaged into different forms such as bottles, jars, or comb honey.

Honey is a natural sweetener rich in immunity, antioxidants, minerals, and vitamins. It is considered to have many health benefits, such as helping to strengthen the immune system, reducing inflammation, and promoting wound healing. Additionally, Honey is used in a wide range of food and cosmetic products, from traditional medicines to bakery items and drinks.

Beekeeping is an important industry that provides Honey as a natural sweetener and helps pollinate crops and plants. The beekeeping industry is particularly well-suited to regions with sufficient bee flora available for at least six months of the year. In India, the Honey produced by Indian hive bees is collected by modern extractors. Still, to maintain the quality and value of Honey, it is essential to process it in a modern honey processing plant.

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About Honey Bee farming and Honey production

Honey farming, also known as beekeeping, is keeping and managing bee colonies to produce Honey and other products, such as beeswax and propolis. Honey production is collecting, processing, and packaging honey from bee colonies. Honey farming is considered sustainable and environmentally friendly, as bees are vital in pollinating crops and plants.

Beekeeping can be done on a small scale, with a few hives in a backyard, or on a large scale, with hundreds or thousands of hives spread out over multiple locations. The honey production process begins with the beekeeper installing bee colonies in an area with good bee flora. The bees collect nectar from flowers and convert it into Honey, which they store in the hive.

The beekeeper then harvests the Honey by removing the honeycomb frames from the hive and using a honey extractor. After extraction, the Honey is filtered to remove impurities such as beeswax and bits of the comb. It is then heated to a specific temperature to kill any bacteria or yeasts that may cause fermentation. The Honey is then cooled and packaged into different forms such as bottles, jars, or comb honey.

Market potential/ Market scenario of Honey production

Honey is a widely consumed product in the domestic and international markets, with high demand for high-quality, refined Honey free of pesticides and other agrochemicals. In the domestic market, the majority of Honey is used by the pharmaceutical and confectionery industries. Still, with an increasing focus on health and wellness, there is also a growing demand for Honey as a healthy food.

India is a significant player in the international honey market, with over 50,000 metric tonnes of natural honey exports worth approximately Rs. 653.58 crore/ $101.32 million in the 2017-2018 fiscal year. The major export destinations for Indian Honey include USA, UAE, Canada, and Qatar. The market for Honey in India and around the world is expected to continue growing, driven by increasing demand for natural sweeteners and the health benefits associated with honey consumption.

Process of honey extraction in processing plant

The honey industry is a complex process that involves multiple steps to ensure the quality and safety of the final product. Each step, from initial extraction to packaging, is designed to address specific challenges related to the physicochemical and biological characteristics of different types of Honey.

Steps in Honey processing plant

Initial Extraction
Dehumidification
Liquefaction and mixture
Heating
Pasteurization
Crystallization
Final packaging

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Honey extraction: The initial harvest of Honey is done by introducing honeycombs or frames into a honey extractor. The extractor uses centrifugal force to remove the Honey from the comb. This operation is done in special rooms with the possibility of heating.

Collection and decantation: After the extraction, the Honey is collected by gravity in tanks. The Honey is then sent to decanters with the help of pumps. This process aims to eliminate wax particles and air bubbles that may have been mixed with the Honey during extraction.

Purification techniques: The purification of Honey is done through decanting and filtration. These techniques are essential for ensuring the quality of the final product, primarily when the Honey is intended for medical use. The quality of Honey can be negatively affected by various factors, and precautions should be taken to ensure that the final product meets physicochemical and microbiological standards, especially for medical purposes.

Bottling and packaging: The processed Honey is immediately bottled in clean wide-mouthed bottles and sealed with PP caps. The bottles are then wiped dry and labeled. The filled, sealed, and labeled bottles are then packed in labeled cardboard boxes before they are ready for commercialization.

Honey processing plant project report: Economics of project

The project assumptions for honey production include a capacity of 80 kg per hour with 55% utilization in the first year, 8 hours of daily operation, raw material stock for seven days, finished goods closing stock for ten days, credit periods of 6 days for debtors and ten days for creditors, depreciation and income tax, 11% interest on working capital and term loans, current market rates for salary and wages, power consumption of 25 KW, and a yearly increase of 5% for sales and raw material cost.

Computation of production of Honey

The Production of Honey is based on a machine capacity of 80 kg per hour, 8 hours of daily operation, 25 working days per month, 300 working days per year, 8% wastage, and a raw material requirement of 192000 kg. The final output after accounting for wastage is 176640 kg per year, which will be packaged in 1 kg for a total of 176640 packets per year. The Production of Honey is based on a capacity of 80 Kg per hour.

Production capacity is increase (Expected)

Year 1: 55% (97,152 kg)
Year 2: 58% (1,02,451 Kg)
Year 3: 60% (1,05,984 kg)
Year 4: 60% (1,05,984 kg)
Year 5: 62% (1,09,517 kg).

Raw material cost for producing Honey

Year 1: 55% utilization at a rate of Rs.178/kg (amounting to Rs.187.97 lacs)
Year 2: 58% utilization at a rate of Rs.187/kg (amounting to Rs.208.24 lacs)
Year 3: 60% utilization at a rate of Rs.196/kg (amounting to Rs.225.79 lacs)
Year 4: 60% utilization at a rate of Rs.206/kg (amounting to Rs.237.31 lacs)
Year 5: 62% utilization at a rate of Rs.216/kg (amounting to Rs.257.13 lacs)

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Computation of sale for honey production

1st year: Opening Stock of 3,238 Kg, Production of 97,152 Kg, closing stock of 3,238 Kg, and net sale of 93,914 Kg at a sale price of Rs 250/packet (amounting to Rs 234.78 lacs)
2nd year: Opening Stock of 3,415 Kg, Production of 1,02,451 Kg, closing stock of 3,415 Kg, and net sale of 1,02,275 Kg at a sale price of Rs 263/packet (amounting to Rs 268.98 lacs)
3rd year: Opening Stock of 3,533 Kg, Production of 1,05,984 Kg, closing stock of 3,533 Kg, and net sale of 1,05,866 Kg at a sale price of Rs 276/packet (amounting to Rs 292.19 lacs)
4th year: Opening Stock of 3,533 Kg, Production of 1,05,984 Kg, closing stock of 3,533 Kg, and net sale of 1,05,984 Kg at a sale price of Rs 290/packet (amounting to Rs 307.35 lacs)
5th year: Opening Stock of 3,651 Kg, Production of 1,09,517 Kg, closing stock of 3,651 Kg, and net sale of 1,09,399 Kg at a sale price of Rs 305/packet (amounting to Rs 333.67 lacs).

Total liabilities table for honey processing plant

Year	1	2	3	4	5
Production Capacity (kg)	97,152	1,02,451	1,05,984	1,05,984	1,09,517
Utilization (%)	55	58	60	60	62
Raw Material Cost (Rs/kg)	178	187	196	206	216
Raw Material Cost (Lacs)	187.97	208.24	225.79	237.31	257.13
Opening Stock (kg)	3,238	3,415	3,533	3,533	3,651
Closing Stock (kg)	3,238	3,415	3,533	3,533	3,651
Net Sale (kg)	93,914	1,02,275	1,05,866	1,05,984	1,09,399
Sale Price (Rs/packet)	250	263	276	290	305
Sale Revenue (Rs)	234.78	268.98	292.19	307.35	333.67

Capacity, utilization, production & output of Honey processing plant

Machinery and equipment

Water Treatment Unit: Equipment used to treat water to make it safe to drink, operated, and monitored by plant operators.
Boiler: Steam-generating equipment that generates and delivers steam at the required temperature and pressure.
Stainless Steel Tank: Used to store liquids and particulate solids.
Jacketed Storage Tank: A container designed to control the temperature of its contents using a circulating cooling or heating fluid.
Semi-Automatic Single Head Machine: Filling machine for viscous products, with a piston-operated filling system and adjustable tray.
Air Compressor: 3.0 HP machine used to compress air.
Bottling Plant: machines used to wash, dry, fill, cap, sterilize, and package bottles.
Testing Equipment: Different equipment is used to test the quality of the final product, such as a lactometer and gravity meter.
Weighing Balance: Simple weight measuring device used to determine the weight of an object using standard weights.

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Total cost of the project of the Honey processing plant:

Working capital: Working capital for a Honey processing plant refers to the funds required to cover the day-to-day operating expenses of the business, such as raw materials, wages, utilities, and other costs associated with running the plant. It can include costs like honey harvesting, processing, packaging, and distribution. In the context of the project cost provided, the working capital required is 10.00 Lacs which is likely to cover all the expenses required for the smooth functioning of the honey processing plant. 10.00 Lacs

Particulars	Amount (in Lacs)
Land & Building	Owned/Rented
Plant & Machinery	8.36
Miscellaneous Assets	2.20
Working capital	10.00
Total	20.56

Gross profits of the Honey processing plant

Year	Capacity Utilization (%)	Sales (Lacs)	Cost of Sales (Lacs)	Gross Profit (Lacs)
1	55%	234.78	216.08	18.70
2	58%	268.98	247.34	21.64
3	60%	292.19	267.54	24.65
4	60%	307.35	281.08	26.27
5	62%	333.67	305.01	28.66

Projected balance sheet in the Honey processing project report

A balance sheet is an accounting statement showing a corporation’s assets, liabilities, and equity at a certain point. In a honey processing project report, a balance sheet would show the assets, liabilities, and equity of the honey processing plant, including information such as the value of the land and building, plant and machinery, miscellaneous assets, working capital, and any outstanding loans or debts. The balance sheet gives and provides a snapshot of the company’s financial position. It helps to assess the company’s liquidity, solvency, and overall financial health.

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Total liabilities table for Honey processing plant

Year	1	2	3	4	5
Capital (Opening Balance) (Lacs)	7	9.04	12.37	15.41	18.23
Add: Own Capital (Lacs)	2.05	–	–	–	–
Add: Retained Profit (Lacs)	1.07	2.73	4.33	5.04	5.82
Less: Drawings (Lacs)	–	0.5	1	2	3
Subsidy/grant (Lacs)	4	–	–	–	–
Closing Balance (Lacs)	7	9	12	15	18
Term Loan (Lacs)	5	4	3	1	–
Working Capital Limit (Lacs)	9	9	9	9	9
Sundry Creditors (Lacs)	6.27	6.94	7.53	7.91	8.57
Provisions & Other Liab (Lacs)	0.4	0.5	0.6	0.72	0.86
Total (Lacs)	27.64	29.35	32.07	34.33	36.67

Total assets table for Honey processing plant

Year	1	2	3	4	5
Assets
Fixed Assets (Gross) (Lacs)	11	10.56	10.56	11	10.56
Gross Dep. (Lacs)	1.47	2.74	3.82	4.75	5.55
Net Fixed Assets (Lacs)	9.09	7.82	6.74	5.81	5.01
Current Assets
Sundry Debtors (Lacs)	4.7	5.38	5.84	6.15	6.67
Stock in Hand (Lacs)	11.84	13.13	14.21	14.92	16.19
Cash and Bank (Lacs)	2.02	3.02	5	7.46	8.79
Total (Lacs)	27.64	29.35	32.07	34.33	36.67

Conclusion

The honey processing plant project report outlines the feasibility, design, and implementation of a facility for the production and packaging of hoHoneyThe project is economically viable and has a positive return on investment. The proposed plant is designed to efficiently process raw Honey and produce high-quality, packaged honey products for domestic and export markets.

The project will create employment opportunities and contribute to the growth of the local economy. The plant will comply with all relevant regulations and industry standards to ensure the safety and quality of the final products. Overall, the project has the potential to be a successful and profitable venture.