Overview of Flour Mill Business

The milling of grains into flour is a huge industry in India. The flour mill business has been a critical link in the agricultural processing and value addition chain. Akin to most agri-industrial production facilities, the need for such businesses is massive. With its growing flour demand, India has a very fragmented flour milling industry. Almost two-thirds of the flour produced is from small stone mills or chakki. Milling is intended to separate the floury edible endosperm from the branny outer coverings and remove the germ or embryo.

Today, the demand for flour mills in India is based on their application and the dietary habits of a region. This market is further segmented into food (confectionery, bakery, fast foods and others), animal feed and other uses. The food industry held the biggest chunk of the share in 2021. Its growth is due to the use of flour in the preparation of foods, especially confectioneries and bakery items. The flour milling business comes within the food processing industry. This business consists of many associated activities apart from the milling process. So any business in the flour milling segment will require specific licenses and registration from any food manufacturing and processing industry.

Read on to get a complete idea of the legalities of starting a flour mill business. But first, let’s look into primary activities in the milling industry where new businesses can be set up. Though setting up and running flour mills perform most of the activities, an entrepreneur can target a specific stage mentioned below-

• Procurement and transportation of grains for milling
• Grain storage and handling and quality control
• Processing (Milling)
• Packaging and labelling
• Storage/handling and transportation of the finished product

Functioning of Flour Mills

To get flour of desired quality, raw materials, i.e. food grain(wheat, barley,) are required. Cleaning, storing, milling and packing final products like flour must be done by keeping the quality and hygiene standards in mind. Necessary compliances for flour mill business are given below -

• The design of the premises must be as per the given standards, with adequate working space and personnel hygiene facilities.
• The business must have an effective consumer complaints redressal mechanism. Food establishments must have an updated FSSAI license.
• The internal structure, fittings, equipment and containers are made of non-toxic and impermeable material.
• Transporting vehicles for food must be kept clean and maintained in good condition.
• A Flour Mill Business must ensure that food waste and other refuse must be removed regularly from food handling areas.
• Workers handling food must have the necessary knowledge and skills. They must be trained to handle food safely.
• Internal and external audits of the system must be done periodically.
• Measuring and monitoring devices are calibrated periodically.

Licences and authorisation needed to set up a Flour Mill Business

Business registration: Registering your flour mill business as a legal entity is not only mandatory but also has specific benefits associated with it. Most small and medium industries incorporate themselves as either Partnership or Proprietorship Firm.

Consent NOC: Every flour mill or related business that wants to operate or set up an industrial plant must acquire Consent NOCs, given by concerned SPCBs. The No Objection Certificates (NOCs) are granted in the form of Consent to Establish (CTE) and Consent to Operate (CTO) from the State Pollution Control Board (SPCB). To set up a mill, one must comply with the provision of the Environment Protection Act along with Water and Air Acts. Documents required for these NOCs are -

Documents required for CTE to establish flour mill business

• Duly filled application form of concerned SPCB
• Signed undertaking
• Site or layout plan with a roadmap 
• Detailed project report
• Details of different processes and point sources of effluent discharge/air emission/solid waste/hazardous waste that may be generated
• Details of finished products
• List of machinery, the capital cost of the unit (land, building, and plant machinery)
• Water balance, source of water and its required quantity 
• Land documents such as rent/lease agreement
• Industry registration documents
• Consent fee (as applicable)

Documents required for CTOto establish flour mill business

• Duly filled application form of the concerned SPCB
• Balanced sheet certified by a CA
• Copy of CTE issued
• Proof and details of water pollution control/air pollution control devices and solid waste/hazardous waste management facilities provided (their location on the premises, capacity and exit points of the discharge)
• Lab report of the trade emissions and effluents
• Site plan
• Copy of any permission required from the state government, such as environmental clearance
• Any other document specified in the CTO application form

FSSAI Licence: Afterwards, a flour mill business will need to get the required trade and food business licenses from the FSSAI.The FSSAI basic registration is essential for small and medium-scale businesses generating turnover of less than Rs.12 lakhs/annum.

Documentations required for issuance of FSSAI Basic Registration are -

• Photo ID proof
• List of proposed food articles
• A duly filled Form-B by the applicant
• Partnership deed/Certificate of Incorporation/Memorandum of Association(MOA)/Articles of Association (AOA)
• Lease or rental agreement to prove land ownership
• Food Safety Management System (FSMS) plan
• Supporting dossiers (if any, such as NOC of panchayat/municipality, health NOC)
• List of raw materials suppliers
• Form IX
• Water test report through a certified NABL
• Import Export Code (aka IEC) granted by the Directorate General of Foreign Trade (DGFT)
• List of machines and equipment
• List of directors and partners list

Additional Licences and Permits required for Flour Mill Industry

• Trade License from the local authorities
• SSI or MSME  registration with the UdyogAadhaar registration (if applicable)
• Trademark registration
• GST registration for tax purposes
• AGMARK (if required)
• IEC (if one wishes to export the finished product)
• BIS certification

Market analysis and scope of the Flour MillBusiness

Market Analysis: India produces more than 200 million tonnes of food grains yearly. Global wheat consumption during the 2016/17 season reached a record-high 736m tonnes, showing a growth of 25% in the last 15 years. Varying lifestyles, easy availability of raw materials and favourable fiscal policies have pushed the industry's growth considerably. One can earn a decent profit from the flour mill business. However, the quantum of profit depends on several aspects.

Scope of Flour Mill Industry: The increase in future demand can also rely on the fact that flour is the key ingredient in the preparation of staple food like bread, confectioneries, bakeries and fast foods. The reason is it is a healthy choice. Additionally, flour is a sound source of micronutrients like vitamins, minerals, and dietary fibre. Whole wheat flour is known to prevent obesity, ensure good skin and hair health, and reduce the risk of chronic inflammation and heart diseases. Similarly, due to the high oleic acid content (i.e., around 32.6%), chickpea flour maintains mental health by producing myelin, reducing blood sugar levels, preventing free radicals oxidative damage and much more. Businesses can diversify their production to include milling of flour having high demand. Below are the six most profitable small scale Flour Mill businesses -

• Gram Flour Milling Business
• Sooji milling Business
• Wheat Flour (Atta) Milling Business
• Wheat Flour (Maida) Milling Business
• Cornflour Milling Business
• Bran Milling Business

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