What is a ghee project report?
A ghee project report is a detailed project report (DPR) for a unit that buys cream or white butter, clarifies it by heating and packs the ghee. It sets out the method, machinery, fat supply, licences, project cost, five-year profit, DSCR and break-even that a bank or subsidy office checks.
Dairy entrepreneurs, milk producer groups and sweet makers use it to size the unit and apply for a term loan, PMEGP or PMFME support.
Also known as: ghee manufacturing project report, ghee business plan, desi ghee plant DPR, ghee making unit project report.
What a bank checks in a ghee project report
A ghee unit turns bought fat into a branded product, so the margin between fat cost and ghee price decides everything. Credit officers look first at these four numbers. The values are the ones used in our sample report.
Cream and butter take two thirds of every rupee of sales. A report that shows a much lower share is assuming fat prices no supplier will hold.
Banks compare this with what distributors actually pay for packed ghee in your area, not the shelf price in a supermarket.
Debt service coverage ratio (DSCR) is cash available to repay divided by the instalment due. It dips in Year 2, when full principal repayment starts.
Distributors and sweet shops expect some credit. Longer credit around festivals raises the working capital limit the unit needs.
Values are the assumptions in our illustrative sample. Your report uses figures for your capacity, fat suppliers and market.
How much does it cost to start a ghee unit?
Cost depends on daily output, whether you own land and how much of the cream chain you run yourself. The large tier is the plant in our sample report; the other two are indicative ranges.
Small unit
₹20–50 lakh
About 100–250 kg per day in a rented shed
- Machinery₹12–25 lakh
- Shed fit-out and utilities₹3–10 lakh
- Working capital margin₹4–10 lakh
Fits PMEGP or PMFME, subject to limits
Mid-size unit
₹1–2.5 crore
About 300–600 kg per day
- Machinery₹60 lakh–1.2 crore
- Land and building₹30–90 lakh
- Working capital margin₹8–20 lakh
MSME term loan, often with CGTMSE cover
Large unit
₹385.48 lakh
940 kg per day, 3,10,200 kg per year
- Plant and machinery₹186.15 lakh
- Land and building₹138.74 lakh
- Working capital margin₹12.55 lakh
Term loan ₹289.11 lakh (75%), promoter ₹96.37 lakh
Small and mid-size ranges are indicative and exclude land unless stated. Costs vary with location, method and the make of kettles and filling machines.
Ghee plant economics in our sample
The sample report models a 940 kg per day unit running 330 days a year, starting at 60% of capacity and reaching 80% in Year 5. Ghee is sold at ₹556 per kg before GST, and the unit employs 27 people.
| Land and site development | 24.59 |
|---|---|
| Building and civil works | 114.15 |
| Plant and machinery | 186.15 |
| Other fixed assets | 23.92 |
| Contingencies | 15.02 |
| Preliminary and pre-operative | 9.10 |
| Working capital margin | 12.55 |
| Total | 385.48 |
| Promoter's contribution (25%) | 96.37 |
|---|---|
| Term loan from bank (75%) | 289.11 |
| Cash credit limit (separate) | 37.66 |
| Total project cost | 385.48 |
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments. All figures are illustrative.
Ghee manufacturing process, step by step
Commercial units mostly use the creamery butter or direct cream method, both heated in steam jacketed kettles. The steps below follow the creamery butter route with the temperatures NDDB and NIFTEM describe.
- Receiving and testing
Each lot of cream or white butter is tested for fat, acidity and adulterants before it goes into the cold room, because sour cream loses more fat in the residue.
- Melting the butter
Butter is melted at about 65°C in a jacketed vat and pumped to the ghee kettle, so lumps do not scorch on the kettle wall.
- Boiling and clarification
The fat is heated with stirring to around 110–115°C until the moisture is gone and the curd particles turn golden brown, which gives ghee its cooked flavour.
- Removing the residue
Ghee residue is filtered or separated in a clarifier at about 70°C. It still holds some fat, which many units recover and reuse.
- Settling and granulation
Clear ghee settles in tanks and is then held in a room at about 18–22°C, so it sets with the even grain buyers look for.
- Filling and packing
Batches cleared by the lab are filled into tins, glass or PET jars or pouches, sealed and labelled. Packed well, ghee keeps for 6 to 12 months.
Cream and butter supply for a ghee plant
A ghee unit is only as good as its fat supply. Most units buy cream from chilling centres and private dairies, and white butter from collection agents. Both are paid for by the fat test, so a sharp lab and clear contracts protect the margin.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Cream from dairies and chilling centres | 55% | 444.34 |
| Unsalted white butter | 42% | 339.31 |
| Cleaning chemicals and lab consumables | 3% | 24.24 |
| Total | 100% | 807.89 |
Cream and butter prices move with the flush and lean milk seasons. Your report should test a rise in fat cost against the ghee price.
Machinery for a ghee manufacturing unit
The steam jacketed kettles are the largest machinery item in our sample. The cold room and the lab matter just as much, because they protect the fat you have already paid for.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Steam jacketed ghee boiling kettles with stirrers | Heat and clarify the fat evenly | 40.95 |
| Butter melting vat and cream holding tanks | Melt butter and hold cream before boiling | 22.34 |
| Ghee clarifier and residue filter | Separate residue from hot ghee | 22.34 |
| Settling and storage tanks with pumps | Settle and store clear ghee | 22.34 |
| Cold room for cream and butter | Keeps fat fresh until it is processed | 20.48 |
| Steam boiler | Supplies steam to kettles and vats | 18.61 |
| Ghee filling and sealing machine | Fills tins, jars and pouches by weight | 27.92 |
| Quality control lab | Butyro-refractometer and fat, moisture and acidity tests | 11.17 |
| Total plant and machinery | 186.15 | |
Costs are the sample report's estimates for a 940 kg per day line. Get current quotations before you finalise.
Licences, standards and GST for a ghee business
FSSAI sets the licence tier for a dairy unit by the milk or milk solids it handles, not by the ghee it sells. Check the tier early, because it decides where you apply.
| FSSAI registration or licence | Registration up to 500 litres of milk a day or 2.5 MT of milk solids a year; state licence from 501 to 50,000 litres a day or up to 2,500 MT of milk solids; central licence above that |
|---|---|
| AGMARK grading | Voluntary for ghee. Grade standards cover moisture (0.3% maximum), butyro-refractometer reading at 40°C (40.0–43.0), RM value (28.0 minimum) and a negative Baudouin test |
| GST | 5% on ghee and butter (HSN 0405), cut from 12% under the September 2025 rate changes that took effect on 22 September 2025 |
| Legal Metrology | Registration for packaged commodities, with net quantity and MRP on every pack |
| Business registration | Udyam (MSME) and GST registration |
| Pollution board consent | Consent to establish and operate from the State Pollution Control Board, covering wash water and boiler emissions |
Rules as checked in October 2026. Confirm current requirements with FSSAI and your state departments before applying.
Loans and schemes for a ghee unit
Ghee counts as food processing, so a small unit can choose between PMEGP and PMFME. Larger plants usually take a term loan.
PMFME
35% subsidy, up to ₹10 lakhCredit-linked capital subsidy for new and existing micro food processing units, with at least 10% own contribution.
PMEGP
Manufacturing projects up to ₹50 lakhMargin-money subsidy of 15–35% of project cost for a new unit, depending on category and location.
MSME term loan with CGTMSE
Mid-size and large unitsCollateral-free guarantee cover for eligible micro and small enterprises, often with a separate cash credit limit for fat stock.
Scheme limits change. Confirm current terms with the bank or the scheme portal before applying.
Mistakes that weaken a ghee project report
- Assuming 100% fat recovery
Some fat always stays in the residue. NDDB puts recovery at 88–92% for the creamery butter method, so output must be worked out from the fat test, not the weight of butter.
- One price for fat all year
Cream and butter cost more in the lean summer months. A flat price makes Year 1 cash flow look better than it will be.
- Leaving out the cold room and lab
Without cold storage and a butyro-refractometer, sour or adulterated lots get into the kettle, and one failed sample can cost a buyer.
- Ignoring the festival peak
Sales jump before Diwali and the wedding season. Working capital must cover the extra fat stock and longer credit at that time.
How NPCS helps you set up a ghee plant
- Method and capacityChoose between the creamery butter, direct cream and desi routes for your fat supply and market.
- Fat sourcing planWork out cream and butter needs, fat recovery and seasonal prices for your district.
- Bank-ready project reportProjections, DSCR and working capital in the format your lender, PMEGP or PMFME office wants.
- Approvals and layoutFSSAI licence tier, plant layout, boiler and cold room sizing and the approvals list for your state.
NPCS has prepared project reports and feasibility studies for dairy units, including milk processing and value-added dairy products, since 1994, for entrepreneurs, banks and companies in India and abroad.
What's inside the ghee 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 ghee project reports
These are ghee 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 |
|---|---|---|---|---|---|
| Dairy Farming & Dairy Products (Milk, Butter, Ghee, Paneer& Curd) | A2 Milk, 3,650Kgs per day A2 Butter 57 Kgs per day A2 Ghee 50 Kgs per day A2 Paneer 178.50 Kgs per day A2 Curd 1,244 Kgs per day Manure 7,00… | ₹1.97 crore | 26% | 42% | Get this report |
| A-2 Cow Milk Processing (Milk, Butter, Ghee & Paneer) | A-2 Milk (1 Ltr Tetra Pack)2,250 Kgs per day Butter (100 & 500 gms Pack)46 Kgs per day Paneer (4 Pcs or 1 Kgs Pack) 143 Kgs per day Ghee (1 … | ₹4.84 crore | 25% | 58% | Get this report |
| Milk Processing (Milk, Paneer, Butter and Ghee) | Pasteurised Milk (1 Ltr Pouch):1000 Kgs/day Skimmed Milk (1 Ltr Pouch):3500 Kgs/dayPaneer:1000 Kgs/day Butter | ₹5.19 crore | 15% | 73% | Get this report |
| Vanaspati Ghee | 30 MT/day | ₹16.7 crore | 46% | 35% | Get this report |
| Dairy Farming & Dairy Products (Milk, Butter, Ghee & Paneer) | Milk: 5,000 Ltrs / Day Butter: 120 Kgs / Day Ghee: 100 Kgs / Day Paneer: 220 Kgs / Day Cow Urine: 6,500 Ltrs / Day Kande: 2,900 Pkts / Day | ₹17.68 crore | 27% | 42% | Get this report |
| Dairy farming and dairy products (Pasteurised Milk, Butter, Ghee, Paneer and Butter Milk)- Cattle Breeding… | Farming 200 Cows, 5000 Ltrs/Day, Processed Milk 34000 Lts/Day | ₹18.66 crore | 58% | 34% | 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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Ghee project report: frequently asked questions
What is the cost of a ghee manufacturing plant in India?
A small unit making 100–250 kg a day in rented space needs roughly ₹20–50 lakh, and a 300–600 kg per day unit about ₹1–2.5 crore. Our sample report models a 940 kg per day plant with its own land and building at ₹385.48 lakh. These ranges are indicative; your report works out the cost for your capacity, location and method.
How much cream or butter is needed to make 1 kg of ghee?
It depends on fat content and recovery. Butter with about 80% fat gives roughly 1 kg of ghee from 1.4 kg at 90% recovery, and cream with 40% fat needs about 2.8 kg. Fat lost in the residue and higher acidity in cream both raise the quantity, so a good report states the fat test and recovery it assumes.
Which method is best for a commercial ghee unit?
Most small and mid-size plants use the creamery butter or direct cream method in steam jacketed kettles. NDDB puts fat recovery at 88–92% for creamery butter and 90–95% for direct cream, against 80–85% for the traditional desi method. The desi method gives a stronger aroma that some buyers pay more for, but it recovers less fat.
Is ghee manufacturing profitable?
In our illustrative sample, a 940 kg per day unit earns a 14% return on investment in Year 3. It breaks even at 48% of capacity and pays back in about 4.5 years. Margins are thin because cream and butter are most of the cost. Profit depends on buying fat at a fair price and selling packed ghee under your own brand.
What licence is required for a ghee business?
You need an FSSAI registration or licence based on the milk or milk solids handled per day, plus Udyam and GST registration. A unit handling 501 to 50,000 litres of milk a day needs a state licence; above that, a central licence. Packed ghee also needs Legal Metrology compliance, and AGMARK grading is optional.
Ghee ka business kaise shuru kare?
Start by fixing a steady source of cream or white butter, such as a dairy, chilling centre or milk collection network. Then choose the method and daily capacity, get an FSSAI licence, Udyam and GST registration, and prepare a project report for the bank. Begin with one or two pack sizes and sell through local distributors and sweet shops first.
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
- Technews 99: Technology of ghee manufacturingNational Dairy Development Board, checked Oct 2026
- Ghee processing (PMFME training material)NIFTEM, Ministry of Food Processing Industries, checked Oct 2026
- Model DPR for a ghee making unit (PMFME)NIFTEM, Ministry of Food Processing Industries, checked Oct 2026
- Eligibility and applicability criteria for FSSAI registration and licenceFood Safety and Standards Authority of India, checked Oct 2026
- AGMARK certificationFood Safety and Standards Authority of India, checked Oct 2026
- GST reforms in agriculturePress Information Bureau, Government of India, checked Oct 2026
- FAQs on GST rate changes, September 2025GST Council, checked Oct 2026
- Prime Minister's Employment Generation Programme (PMEGP)Himachal Pradesh Khadi and Village Industries Board, checked Oct 2026
- IND Micro Food Processing Enterprises (PMFME)Indian Bank, 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.