Introduction:
Rice is the staple food and the largest consumed calorie source among the food grains.
With a per capital availability of 73.8 kg it meets 31% of the total calorie requirement of the population. Apart from rice milling, processing of rice bran for oil extraction is also an important agro processing activity for value addition, income and employment generation and make the entire production of rice a viable.
Many of the rice processing units are of the traditional huller type and are inefficient.
Modern rice mills are having high capacity and are capital intensive, although efficient.
Small modern rice mills have been developed by us and are available in the market but the lack of information is a bottleneck in its adoption by the prospective entrepreneur.
The present model will go a long way in bridging the information gap.
Description of Rice Milling Operation:
Paddy in its raw form cannot be consumed by human beings. It needs to be suitably processed for obtaining rice. Rice milling is the process which helps in removal of hulls and barns from paddy grains to produce polished rice. Rice forms the basic primary processed product obtained from paddy and this is further processed for obtaining various secondary and tertiary products.
The basic rice milling processes consist of:
Process Definition
1. Pre Cleaning: Removing all impurities and unfilled grains from paddy
2. De-stoning: Separating small stones from paddy
3. Parboiling: Helps in improving the nutritional quality by gelatinization of starch inside the rice grain. It improves the milling recovery percent during de-shelling and polishing / whitening operation. Also It makes the rice insect-free for quite some years.
4. Husking: Removing husk from paddy
5. Husk Aspiration : Separating the husk from brown rice/ unhusked paddy
6. Paddy Separation : Separating the unhusked paddy from brown rice
7. Whitening: Removing all or part of the bran layer and germ from brown rice
8. Polishing: Improving the appearance of milled rice by removing the remaining bran particles and by polishing the exterior of the milled kernel
9. Length Grading: Separating small and large brokens from head rice
10. Blending: Mixing head rice with predetermined amount of broken, as required by the customer 11. Weighing and bagging : Preparing the milled rice for transport to the customer

The flow diagram of the various unit operations are as follows:
1. Raw Rice/Parboiled Rice processing flow chart
Paddy

Cleaning

Soaking

Steaming

Sun drying

Mechanical drying Shelling Unit

Cleaning

De-husking

Separator

Paddy

Broken rice

Polishing unit

Separator

Rice grader

Quality rice

Weighment and packing

Bran yard

Broken rice, smaller size rice
& impurities

2. Process flow chart for exporting
Rice produced by common rice mill

Silky unit

De stoning unit

Colour Sorting Machine

Grading

Weighment and Packing

Process Flow

Process cost/Value (in
US$/-qtl. Of rice) 28.29

Accumulated value Remarks

28.29

(URS: Under
Relaxation
System)

Transport
Cleaning, loading, soaking, drying, dehusking, polishing, grading, etc.
Yeild
(a) Raw rice @ 67% i.e. 67 kg. cost of
100 kg raw rice
(b) Parboiled rice @ 68% i.e 68 kg. parboiled rice 100 kg

0.22
0.44

0.22
0.44

Cost of bags (2 nos.)

0.44

Transport

0.44

Paddy (URS)

67 kgs
68 kgs
(a)
(b)

Sell price
Net profit
Sell of rice brand–7%@ 500

A- raw rice
B – Parboiled rice

0.44(a)
(b)
(a)
(b)
(a)
(b)
(a)
(b)

35

Gross profit

(a)
(b)

Analysis of Value Chain( as per FAQ standard)
Process Flow

Process
Cost / Value
(in Rs/qntl)

Accumulate d value

Remarks

1. Paddy (Gd-A)
2. Mktg. Fee 1%
3. Cleaning loading,
4. Misc. 1.5%
5. Total 2.5%
6. Drying
7. Dehusking & polishing
8. Grading
9. Yield
a. Raw rice @ 67% i.e. 67kg.
- Cost of 100 kg. raw rice
b. Parboiled rice @68% i.e
68kg

(a) raw rice
(b) boiled rice
Charges to be

- Cost of 100 kg. parboiled

paid by

rice

CSC/agencies

10. Custody & maint. Charges
11. Cost of gunny bags 2 nos.

12. Transportation

13. Sale price

14.Net profit
15.Sale of rice bran(7%)
16.Sale of husk (19%)
17.Overall gross profit
N.B.: (i) This gross profit is excluding over head and administrative expenses.
(ii) For an average production of 100 kg rice 150 kg of paddy required.
(iii) The above practice would have been implemented but the practice is being considered by the administrative authority.
10. Analysis of Business operations:
a) Raw material procurement and its quality cost etc.
Paddy is the basic raw materials for rice mills. Governments all over the world fixes up the minimum support price of different crops including paddy by way of policy to protect the farmers from exploitations. It is observed in our diagnostic study that no farmer is able to supply standard quality paddy. As such they are not getting minimum support price. This is one of the major problem.
b) Production process related problems
•

In the process of parboiling water affluent is generated and is harmful. The rice millers are getting problem to store it.

•

Rice husk is the cheapest fuel for generating steam but the waste product fly-ash is another headache for disposal for the millers.
This analysis identifies the strong and weak areas as well as opportunities

and threats envisaged in the cluster.

Sl.
No.
1.

Parameter

Strength

Weakness

Markets

•

All rice mills depend

Market support

Opportunity
Tremendous national

Threat
Strong

available under levy/custome milling rice policy.
•
Most suitable climatic environment

2

Technology

3

Inputs availability 4

Skills

5

Business environment upon the levy supply taken up by FCI.

market is there. competition from Asian
•
Institutional
Countries.
support is available
•
All the units having sortex machine may be clubbed off for common brand and export •
Low cost
•
High
•
potential for •
Tradi
fabricated machines production/ automatic productivity. tional plant very costly & technology, •
Technological
•
Cost reduction mostly imported standard infrastructure and quality beyond reach of SSI and nonavailable. enhancement by sector. professional use of appropriate
MS leading
•
Entrepreneur technology/QMS. to high cost not aware of sources may retard of low cost imported the industry automatic plants and both at appropriate domestic / processing international techniques. market.
•
Locally fabricated plant are unstandardised & low productive. Local resource
Controlled
minimum •
* imposition
Large
support price(MSP) of of taxes and domestic paddy at compulsion of levies in
/international
levy rice supply. comparison market available
•
Potential for to non-exporting unit neighbouring states may to export further lead
•
Available institutional support to closure / shift of may be exploited. industries to
•
Formation of neighbouring consortium and states.. making common brand for easy export. Traditional operators
Increased technical
Skill base
•
no skill available and managerial needs upgradation training awareness and upgradation trainings may lead to to adopt productivity, quality latest and efficiency technology and management systems.
Ability of export
Heavy taxes / levies and Tremendous growth
Imposition of segment to grow and controlled trade has potential with taxes, levies meet international lead to closure / shift of institutional support. in challenges. events. comparison to neighbouring states may taper down the industry.

Need for improved rice mills:
The recovery of whole grains in a traditional rice mill using steel hullers for de-husking is around 52-54%. There is excessive loss in the form of coarse and fine brokens. Further loss of large portion of endosperm layers during the de-husking operation further accentuates the problem. Against it, the recovery percent of whole grains in modern rice mills using rubber roll shellers for de-husking operation is around 62-64%. The whole grain recovery percent further increases to 66-68% in case of milling of parboiled paddy.
Thus it can be seen that there is an overall improvement of recovery of whole grains by about 10-14% if one uses rubber roll shellers for rice milling operations. The conversion ratio ( i.e. recovery % of various final product and byproduct for every 100 kg feed of raw paddy) for these improved rice mills are can be as follows:

1. Percent of milled rice : 62-68%
2. Percent of rice bran : 4-5%
3. Percent of rice husk : 25%
4. Percent of germ wastages : 2%-8%
It has been observed that de-husking using rubber roll shellers reduces the risk of breaking the grain because husk is pulled off almost at once and pressure is applied by means of resilient surfaces across the width of the grain, where kernels, generally are much more uniform than they are by length. Moreover, the process does not remove the internal epidermis of the husk. Thus the de-shelled grains with their silver skin envelope are protected against scratches and keep longer and better while the silver skin and the germ increases the quantity of bran which is produced while whitening. The improved rice mills have a better husk and rice bran aspiration system. The same prevents mixing of fine broken with rice bran. Therefore the quality of rice bran obtained is better.
It has also been observed that the location of rice mills are confined to a few selected production centers. Their development as a village level agro processing unit is yet to take a proper shape. In the absence of village level rice milling unit, the farmers have to travel great distances for milling the rice. This leads to increased transportation and handling losses. Thus there is a need to develop improved rice mills as a village level agro processing unit for bringing about technical up-gradation and development of the sector. Value addition and generation of gainful and sustainable employment opportunities are the other possible benefits arising out of this agro processing industry.
Investment components of an improved rice mill:
The various investment components are as follows:
Land, layout plan and site development requirement:
The land requirement for establishing an improved rice milling unit will depend upon

1. Whether the unit will be using a parboiling unit for pre-treatment of paddy before commencement of milling operation or it will be directly milling raw paddy.
2. Whether a single pass or a multipass milling unit is to be installed.
Generally 4.00 to 4.50 acre of land is required for establishing an improved rice milling unit having an installed processing capacity of 6 MT/ hr Paddy; operating for two shift / day of 8-9 hr duration; 300 days per annum; i.e. 32,400 MT /annum. The land should be with proper elevation. Low lying areas should be avoided. Else proper land filling, compaction and consolidation should be done. Drainage and linkages with road and other communication should also be ensured. The layout of the rice milling plant should be done in a manner that helps in smooth operation of various unit operations in tandem to bring about optimal capacity utilization and economizing power consumption. The tentative cost of land and land development charges for the model project has been considered at _________ ( _______ being the cost of the land @ _________ per acre for
2.50 acre and the remaining ___________ being the cost for site development such as construction of boundary wall, internal roads and drainage system etc.)
Civil construction:
The various construction requirement of an improved rice milling unit are as follows:
1. Raw paddy godown
2. Cleaning unit
3. Drier and necessary supporting structures such as, boiler /blower system etc.
4. Milling section
5. Finished product stores
6. Machine rooms
7. Auxiliary structures such as office, watch and ward etc.
The size and civil cost of these structures depend on the production capacity of the project . The tentative civil structures and estimated cost are as follows:
Civil Structures

S.No. Item
1 Raw paddy godown- RCC framed superstructure

Size /
Specifications
80' x 35'

Unit Cost
_____ / sq. ft

(Amt.
Total Cost
________

with 10'' thick brick walls, IPS flooring with damp proof treatment with
1.62 kg DPC
/sq.m of floor area and base of the side walls, roofing consisting of ACC sheets affixed with J hooks, bolts and other accessories to steel truss made of MS angle of desired section
2 Cleaning Shed Similar to the raw paddy godown
3 Milling shed
-RCC framed superstructure with brick walls ,
IPS flooring and roofing consisting of ACC sheets affixed with J
Hooks and nuts to steel trusses made of MS angle of desired section and strength bearing capacity.
4 Finished product or Milled rice storage shed
5 Machine shed with masonry structure with
ACC sheet roofing on lean truss 6 Auxiliary structures a Office unit b Labor quarters c Machine Room for auxiliary

25' x 32'

______ sq. ft

_________

80' x 35'

______ / sq. ft

_________

30' x 35'

_____ /sq.ft

________

40' x25'

______ /sq. ft

_______

_________
10' x 15'
30 ' x 15'
40' x 15'

______sq. ft
_____ sq.ft
______ / sq.ft

__________
__________
____________

machines like blowers/ generator set etc. d Bore well and water connections e Sanitary and plumbing charges f Miscellaneous charges 7 Total for Civil
Construction
Cost

L.S.
L.S.
L.S.

Technology:
It is better to use rubber roll shellers for de-husking of paddy in the unit for better performance. Plant and machinery and electricals:
The details of the nature and type of plant and machinery, their capacity, power consumption, level of automation varies upon the market needs, nature and type of the end products and the investment capacity of the entrepreneur. Whenever paddy is required to be parboiled prior to de-shelling, a parboiling unit with steam boilers has to be installed by the milling unit. The same will increase the P&M cost.

Plant & Machinery

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

QTY
1
1
1
2
2
1
4
1
1
1
2
1
9
16
1
1

Paddy Pre Cleaner
Paddy Cleaner for Milling
D-Stoner
D-Husker
Husk Fan, Husk Separator
Paddy Separator
Polisher/Whitener
Aspirator
Multi Grader
Fine Cleaner for Rice
Silky Polisher
Aspiration
Length Grader
Bucket Elevator
Rice Bran Centifugal
Structure
1
1
1 total total
4

The specifications and capacity of the various equipment has to be judged properly for deciding upon their cost and appropriateness for the rice milling unit.

Electrical and other items:
Electric Motor for Milling Section IN
HP COMPANY ABB
60
30
10
7.5
5
HP
HP
HP
HP
HP
1
1
1
2

3
HP

2
HP
1

1.5
HP

1
HP

1
1
1
1

1
2
1

1
1

1
2
1

2

1
2
1
4

9
12

1

2 no. 0f
60
HP

1 no. 0f
30
HP

5 no. 0f
10
HP

6 no. 0f
7.5
HP

3 no. 0f
5
HP

1 no. 0f
3
HP

3 no. 0f
2
HP

10 no. 0f
1.5
HP

21 no. 0f
1
HP

Total
HP
12
9
9
20
5
5
30
22
5
9
138
9
9
18
5

305
HP

The cost of electrical motors have been included as part of the plant and machinery cost.
Miscellaneous fixed assets:
A provision of $$$$$ under miscellaneous fixed assets has been considered for meeting the expenses for office furniture, fixtures, fire fighting arrangements etc.
Power:
The total power requirement for the model project will to the tune of 305 HP and accordingly suitable standby generator provision is made.

Water:
Water is required for parboiling and domestic comsumption purpose. Suitable arrangements for continuos water supply of desired quality and quantity should be ensured while appraising the proposal.
Standby diesel engines, generator sets and other utilities:
Suitable standby D.G. set is required to be installed in the unit. Thus for the project, a DG
Set of 0000 KVA capacity with a cost of _________ should be considered. However, it is an optional item and the need is to be assessed depending upon the power supply position in the area.
Contingencies:
A 5% contingency provision may be made for the unforeseen expenses.
Organizational setup:
The unit may require a plant supervisor for Parboiled cum Drier and Boiler and One Plant
Supervisor for Milling Section and accountant cum store keeper, three machine operators, one peon and two security staff. Apart from this, three skilled workers and 6 unskilled workers may be required for managing the day to day operation of the unit. Depending upon the size of the unit, the manpower requirement may be modified.
Insurance:
The rice milling units should go in for adequate insurance to cover the fixed assets and stocks. Eligibility of borrowers:
The borrowers can be proprietary and partnership firms, cooperatives, joint stock companies, corporations, APMC board, growers associations, NGOs etc.
Security:
Results of financial analysis are as under:
The financial analysis of the investment on an improved rice mill having an installed capacity of 4800 MT/ annum has been attempted and is placed from Annexures I to VII.
The project has a margin money component of 25% with the rate of interest on term loan and working capital as 12% p.a. and 13% p.a. respectively. For this project, the financial indicators of the investment are as under:
Net Present Value @ 15% DF (NPW) = US$
Internal Rate of Return ($) = 28.22%
Benefit Cost Ratio (BCR) = 1.03:1

Average Debt Service coverage Ratio (DSCR) = 1.64:1