What is a food colours project report?
A food colours project report is a detailed project report (DPR) for a unit that blends FSSAI-permitted synthetic dyes with salt, dextrose or liquid bases into powder and liquid food colours. It sets out the process, machinery, dyes, licences, project cost, means of finance, five-year projections, DSCR and break-even that a lender reviews.
Entrepreneurs and existing food ingredient traders use it to size a blending unit and apply for a term loan, PMEGP or Mudra; bank officers use it to judge whether the unit can repay.
Also known as: food colour manufacturing project report, food colour business plan, edible colour project report, synthetic food colour plant report.
What a bank checks in a food colours project report
A food colours unit is light on machinery and heavy on dye stock, so lenders look hardest at material cost and cash tied up with buyers. These are the values used in our sample report and why each one matters.
Pure dyes are costly, so the margin depends on the dye strength you sell. A report that shows a much lower share is usually overstating profit.
Diluents, liquid bases and preservatives make up the rest. The report should test what a rise in dye prices does to profit and DSCR.
Distributors, bakeries and beverage makers expect credit. Debtor days, with 30 days of dye stock, set the cash credit limit you need.
DSCR (debt service coverage ratio) is cash available for loan repayment divided by the instalments due. Banks look at the weakest year, not only the average of 1.91.
Values are the assumptions in our illustrative sample. Your report uses figures for your capacity, dye suppliers and buyers.
How much does a food colours manufacturing plant cost in India?
Cost depends on daily output, whether you make liquid colours as well as powders, and how far you automate filling. The largest tier is the unit in our sample report; the two smaller tiers are indicative ranges.
Small blending unit
₹25–50 lakh
About 50–100 kg per day, powders in small packs
- Machinery and lab₹10–20 lakh
- Shed and fit-out (or rent)₹5–15 lakh
- Working capital margin₹5–12 lakh
Fits PMEGP or Mudra, subject to limits
Mid-size unit
₹80–140 lakh
About 150–250 kg per day, powder and liquid lines
- Machinery and lab₹40–65 lakh
- Land and building₹25–50 lakh
- Working capital margin₹10–18 lakh
MSME term loan, often with CGTMSE cover
Larger unit
₹206 lakh
450 kg per day, 1,48,500 kg per year
- Plant and machinery₹89.70 lakh
- Building and civil works₹47.40 lakh
- Working capital margin₹19.32 lakh
Term loan ₹154 lakh (75%), promoter ₹51 lakh
Small and mid-size ranges are indicative and exclude land unless stated. Costs vary with location, machine make and the share of liquid colours.
Food colours unit economics in our sample report
The sample report models a 450 kg per day unit working 330 days a year, starting at 60% capacity and reaching 80% in Year 5. The blended colours are priced at ₹550 per kg, ex-factory and before GST.
| Land and site development | 22.08 |
|---|---|
| Building and civil works | 47.40 |
| Plant and machinery | 89.70 |
| Other fixed assets | 15.96 |
| Contingencies | 6.86 |
| Preliminary and pre-operative | 4.55 |
| Working capital margin | 19.32 |
| Total | 205.87 |
| Promoter's contribution (25%) | 51.47 |
|---|---|
| Term loan from bank (75%) | 154.40 |
| Cash credit limit (separate) | 57.97 |
| Total project cost | 205.87 |
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments. All figures are illustrative.
Food colours manufacturing process
A small unit does not make dyes. It buys certified pure dyes and turns them into ready-to-use colours of a fixed shade and strength. The work is mostly accurate weighing, even mixing and testing, with a liquid line running beside the powder line.
- Testing incoming dyes
Each lot of tartrazine, sunset yellow or carmoisine is checked for dye content and shade against the supplier's certificate before it is released to production.
- Weighing to the shade formula
Dyes and diluents such as edible salt or dextrose are weighed to the formula for each shade, for example a lemon yellow or an orange red.
- Dry blending
The powder batch is mixed in a stainless steel ribbon blender until the dye is spread evenly through the diluent, with no streaks or specks.
- Sieving
The blend passes through a vibro sifter to break lumps, so the powder flows freely and dissolves evenly in the buyer's product.
- Liquid preparation
For liquid colours the dyes are dissolved in purified water, glycerine or propylene glycol, preserved and passed through cartridge filters.
- Strength and shade check
A UV visible spectrophotometer measures each batch so the declared dye content on the label stays within the FSSAI tolerance.
- Filling and labelling
Colours are packed in pouches, jars or bottles from 25 g retail packs to bulk tins, each labelled with its total dye content.
Raw materials for food colours: dyes and diluents
Food-grade synthetic dyes are by far the largest cost. They are sold as powders with at least 85% dye content, and the unit dilutes them to the strength each buyer wants. Diluents and liquid bases must come only from the list FSSAI allows for colour preparations.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Food-grade synthetic dyes (tartrazine, sunset yellow, carmoisine, ponceau 4R, brilliant blue) | 72% | 236.48 |
| Diluents (edible salt, dextrose, sodium sulphate) | 13% | 42.70 |
| Liquid base (glycerine, propylene glycol, purified water) | 10% | 32.85 |
| Permitted preservatives and stabilisers | 5% | 16.42 |
| Total | 100% | 328.45 |
The FSSAI specifications for individual synthetic colours set a minimum total dye content of 85% or 87%, depending on the colour.
Machinery for a food colours unit
All contact parts should be stainless steel, and each line needs a dust collector, because a few grams of stray dye can tint the next batch. The ribbon blender is the single largest item in the sample, followed by the powder filling machine.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Stainless steel ribbon blender | Mixes dyes evenly with the diluent | 16.15 |
| Micro pulveriser | Grinds dye and diluent to a fine powder | 8.97 |
| Vibro sifter | Removes lumps from the blend | 6.28 |
| SS liquid mixing tanks with stirrers | Dissolve dyes for liquid colours | 10.76 |
| Cartridge filtration unit | Clears liquid colours of particles | 5.38 |
| Powder pouch and jar filling machine | Fills powders by weight | 13.46 |
| Liquid bottle filling and capping machine | Fills and caps liquid colours | 10.76 |
| QC lab with UV visible spectrophotometer | Measures dye content and shade | 10.76 |
| Dust collector | Captures dye dust at blending and filling | 7.18 |
| Total plant and machinery | 89.70 | |
Costs are the sample report's estimates for a 450 kg per day unit. Get current quotations before you finalise.
Who buys food colours, and how a new unit competes
Demand comes from every kitchen and factory that sells colourful food: mithai and bakery items, soft drinks and syrups, ice cream, jelly, sauces and namkeen. Small buyers want ready shades in small packs; factories want a fixed strength they can dose by weight batch after batch.
Buyers rarely switch for a small price cut. They stay with a supplier whose orange matches last month's orange and whose labels pass a food inspector's check. A new unit wins on shade matching, quick delivery and a wide shade card.
- Sweet shops and bakeries
- Soft drink, squash and syrup makers
- Ice cream and dairy dessert makers
- Namkeen, sauce and ready mix makers
- Food ingredient distributors and wholesalers
- Grocery retail packs for home baking
Synthetic or natural: synthetic blends need only mixing and filling, so they suit a first unit. Natural colours from turmeric, annatto or beetroot need extraction and drying, and cost more to set up. They also fade faster in light and heat, but some buyers now ask for them by name.
FSSAI licence and approvals for food colour manufacturing
Food colours are food additives, so FSSAI rules decide which dyes you may use, what you may dilute them with and what goes on the label. As of October 2026 these are the main approvals.
| FSSAI licence | Manufacturing licence from FSSAI. Per FSSAI's eligibility criteria, a unit making more than 100 kg and up to 2 MT a day of processed food usually takes a state licence; confirm the tier on the FSSAI portal |
|---|---|
| Permitted colours | Only the synthetic colours listed in the FSSAI food additives regulations, such as tartrazine, sunset yellow FCF, carmoisine, ponceau 4R, erythrosine, indigo carmine, brilliant blue FCF and fast green FCF |
| Label declaration | Total dye content declared on every container; FSSAI allows ±7.5% on the declared value for powders and +15% to −5% for liquids |
| Dye standards | Buy dyes that meet FSSAI specifications and the BIS food-grade standards, such as IS 1694:2024 for tartrazine, with a certificate of analysis for each lot |
| Pollution board consent | Consent to establish and operate from the State Pollution Control Board. Dye and dye-intermediate manufacture is in the red category; confirm the category for blending only with your state board |
| Business registration | Udyam (MSME) registration, GST registration, factory licence where thresholds apply and fire NOC |
Mistakes that weaken a food colours project report
- Pricing blends like pure dye
A colour sold at 20% dye content earns far less per kg than an 85% pure dye. Sales must be priced by the strength mix you will actually sell.
- No budget for a spectrophotometer
Without one you cannot prove the declared dye content. A failed food sample can cost you a buyer and bring action under food law.
- Ignoring shade changeover time
Each change from one shade to another needs a full clean of the blender and filler. A plan that assumes non-stop runs overstates output.
- Buying cheap industrial dyes
Textile or industrial dyes are not permitted in food. Every lot must be food grade with a certificate, even if it costs more.
- Too little dye stock in working capital
Each shade needs its own dyes on hand. With 30 days of stock and 45 days of buyer credit, a thin cash credit limit runs dry in the first year.
How NPCS helps you set up a food colours unit
- Shade range and capacityPick powder and liquid lines, pack sizes and daily output to suit your buyers and budget.
- Machinery and labCompare blenders, fillers and spectrophotometers and collect supplier quotations.
- Bank-ready project reportProjections, DSCR and working capital in the format your lender wants, for PMEGP, Mudra or a term loan.
- FSSAI and approvalsThe licence tier, label rules and state approvals list for your location.
NPCS's client list shows 269 assignments in specialty chemicals. The NPCS project team, led by founder Ajay Kumar Gupta, has prepared reports for specialty chemical and food ingredient units since 1994.
What's inside the food colours sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
18 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
Real NPCS food colours project reports
These are food colours project reports NPCS has prepared, with the plant capacity, total capital investment, rate of return and break-even worked out in each. Costs have moved since some were written, so we bring any of them up to date for your capacity and location.
| Project report | Plant capacity | Total investment | Rate of return | Break-even | Action |
|---|---|---|---|---|---|
| Natural Food Colours | Beet Powder 200kg/day, Caramel 500 kg/day, Turmeric yellow colour 250 kg/day | ₹1.33 crore | 41% | 45% | Get this report |
| Tamarind Based Products- Tartaric Acid, Food Colour, Crude Pectin, Tamarind Oil, Tamarind Protein | On request | ₹4.77 crore | 41% | 44% | Get this report |
| Tamarind Based Products- Tartaric Acid, Food Colour, Crude Pectin, Tamarind Oil, Tamarind Protein | 3200 Kgs./Day | ₹4.94 crore | 31.5% | 53.1% | Get this report |
Figures as worked out in each NPCS report. Total investment includes plant and machinery, land and building, and working capital.
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Food Colours project report: frequently asked questions
How much does it cost to start a food colour manufacturing unit?
A small blending and packing unit of 50–100 kg per day needs roughly ₹25–50 lakh, and a 150–250 kg per day unit about ₹80–140 lakh, including working capital margin. Our sample report models a 450 kg per day unit at ₹206 lakh. These are indicative figures; your project report works out the cost for your capacity, shade range and location.
Which colours can be used to make food colours in India?
Only colours permitted under the FSSAI food additives regulations. The synthetic list includes tartrazine, sunset yellow FCF, ponceau 4R, carmoisine, erythrosine, indigo carmine, brilliant blue FCF and fast green FCF. Preparations may add only the diluents FSSAI lists, such as edible salt, sugar, dextrose, glycerine and propylene glycol. Each food has its own limit, so buyers also check how much colour they may use.
What machines are needed for food colour manufacturing?
A powder line needs a stainless steel ribbon blender, a micro pulveriser, a vibro sifter and a pouch or jar filling machine. A liquid line adds mixing tanks with stirrers, a filtration unit and a bottle filling and capping machine. A UV visible spectrophotometer is essential, because the dye content on every label must be tested and kept within tolerance.
Is food colour manufacturing profitable?
In our illustrative sample, a 450 kg per day unit selling at ₹550 per kg earns a 24% return on investment in Year 3. It breaks even at 42% of capacity and pays back in about 3.4 years. Actual profit depends on the price you pay for pure dyes, your shade mix, the dye strength buyers ask for and the credit you give to distributors.
Which licence is needed to make food colours?
You need an FSSAI licence for manufacturing, with the tier set by your daily capacity and turnover, plus Udyam, GST, pollution board consent and the usual factory and fire approvals. Every pack must declare the total dye content, and you should buy only food-grade dyes that meet FSSAI specifications, such as tartrazine to IS 1694, with a certificate of analysis.
Can I get a PMEGP or Mudra loan for a food colour unit?
Yes, if the project fits the scheme. PMEGP covers manufacturing projects up to ₹50 lakh with a margin-money subsidy of 15–35%. Mudra loans go up to ₹20 lakh, with the top band for borrowers who have repaid a Tarun loan. Larger units usually take an MSME term loan, often with CGTMSE guarantee cover. Confirm current terms with your bank.
Should I make synthetic or natural food colours?
Most small units start with synthetic colour blends, because they need only mixing, sieving and filling, and the dyes are stable and strong. Natural colours such as turmeric, annatto or beetroot need extraction, concentration and often spray drying, so machinery and working capital are higher. Many units add a few natural shades later, once their buyers ask for them.
Is the sample report free and can I use it for a loan?
The sample is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report. Its figures are representative and not based on a real project, so it should not be submitted to a bank. For a loan, NPCS prepares a report for your own capacity, location and loan scheme.
Sources and references
- Food Safety and Standards Regulations, Chapter 3: Substances added to food (food colours, colour preparations)Food Safety and Standards Authority of India, checked Oct 2026
- Eligibility and applicability criteria for FSSAI registration and licenceFood Safety and Standards Authority of India, checked Oct 2026
- FAQ on synthetic food coloursFood Safety and Standards Authority of India, checked Oct 2026
- IS 1694:2024 Tartrazine, food grade: SpecificationBureau of Indian Standards, checked Oct 2026
- Prime Minister's Employment Generation Programme (PMEGP)MSME Department, Government of Uttar Pradesh, checked Oct 2026
- Pradhan Mantri MUDRA Yojana: loan limit raised to ₹20 lakhPress Information Bureau, Government of India, checked Oct 2026
- Credit Guarantee Fund Trust for Micro and Small EnterprisesCGTMSE, checked Oct 2026
- List of red category industriesState Pollution Control Board, Odisha, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.