Arun Kumar Modi Final Report

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MANAGEMENT RESEARCH PROGRAM 2009

FINAL REPORT

ON

ECONOMIC & OPPORTUNITY ANALYSIS

OF

MANUFACTURING SECTOR IN BIKANER

SUBMITTED TO: SUBMITTED BY:

PROF. R. HARISH ARUN KUMAR MODI

ENROLLMENT NO:

08BS0000572

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AUTHORIZATION:

I, Arun Kumar Modi., hereby declare that this project titled Economic & Opportunity

analysis of manufacturing sector in Bikanerhas been completed by me in IV semester. The

project involved, studying the various factors impacting the growth these mentioned industries

which are as follows: woolen mills, bhujia, sanitary ware, POP. It also includes the comparative

analysis for the same. It also suggests that which industry has more prospects in Bikaner region.

The project was undertaken as a part of the partial fulfillment of the requirement for the M.B.A

program. I also declare that this report has not been submitted to any other institute or company.

Date-15th Feb 2010

Place-IBS, Bangalore

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ACKNOWLEDGEMENT:

I am thankful to my Director Mrs. Lata Chakrobarty for providing me an opportunity to study in

the esteemed organization and learn various aspects of business administration.

I would like to express my gratitude to my Faculty Guide Prof R. Harish for his able support

and guidance, without which this project would not have been successful. He helped me through

out by lending his thoughtful suggestion on project improvisation.

Lastly I would like to thank my colleagues for sharing their thoughts on this project.

Date: 15th Feb 2010

Place: Bangalore

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EXECUTIVE SUMMARY

Presently major industries in Bikaner are related to sanitary ware, woolen mills, plaster of Paris

(POP) and Bhujia. Raw material required for all these industries is easily available there and also

at low price, this is the reason why these industries are growing the most (In Bikaner).This project comprises the areas relating to the study of product launch and its market feasibility.

Situational analysis of the existing products and companies, will lead us to the product which is

of great demand and its marketability aspects. The outcome of the study would increase my

knowledge about the existing market scenario and the expected future demand, profits and

various other aspects relating to the business environment of Rajasthan (Bikaner).

Major concern will be on the following issues:

1) Investment- Investment required setup a particular Industry.

2) Machinery-Kind of machinery required.

3) Raw Material- Availability of raw material of a particular industry.

4) Competition- level of competition in the sector.

5) Distribution Chain- The kind of distribution channel that will be used for the sector.

6) Prices- Factors that needs consideration wile deciding the prices

7) Land- Availability of the land cost of the land.( Land is available at various Industrial

areas in Bikaner these include RIICO Industrial area, NH 11 Jaipur highway )

8) Organized and un-organized sector.

9) Target customers- Industrial market (B2B) or Consumer market.

After evaluations of the following issues picture will be clear regarding the competition in

particular sector, investment required for that industry supply of raw material etc. With

consideration to the resources available we can judge which Industry is best to enter in. Also

various problems erg- monopoly of supplies for various industries etc can be identified. Most

important thing is after this analysis the level of utilization of current distribution channel of

other players can be easily judged.

So with this study the final conclusion we will prioritize the four industries as which one is best

investing in.

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TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................................ 5

OBJECTIVE OF THE STUDY .......................................................................................................6

THIS STUDY INCLUDES THE FOLLOWING SECTORS WHICH ARE AS FOLLOWS: .. .. ..6

SANITARY WARE INDUSTRY ..............................................................................................6

WOOLEN MILL ....................................................................................................................... 10BHUJIA INDUSTRY BIKANER (MINI PLANT) .................................................................. 12

POP INDUSTRY BIKANER .................................................................................................... 15

COST BENEFIT ANALYSIS (SANITARY WARE) .................................................................. 16

COST BENEFIT ANALYSIS (WOOLEN MILL) ....................................................................... 17

COST BENEFIT ANALYSIS (BHUJIA) ..................................................................................... 18

COST BENEFIT ANALYSIS (POP) ............................................................................................19

COMPARATIVE ANALYSIS ..................................................................................................... 20

CONCLUSION ............................................................................................................................. 21

LIMITATIONS OF THE STUDY ................................................................................................ 22

REFRENCES ................................................................................................................................ 23

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OBJECTIVE OF THE STUDY

Economic & opportunity analysis of manufacturing sector in Bikaner

THIS STUDY INCLUDES THE FOLLOWING SECTORS WHICH ARE ASFOLLOWS:

SANITARY WARE INDUSTRYInvestment Required-

Approx 176*176 sq. Feet Land Required (Land on Raisar road Bikaner & RICCO

Industrial area) & is available in ample.

Machinery Required-

a) Automatic plant

o German Technology costing approx 1 Crore.

o Fully Automatic.

o Approx 15 to 20 Labor required to handle the meachiary.

b) Semi Automatic plan

Manual loading unloading required along with other tasks.

Costing approx 50 lakhs.

70 to 90 labors required.

Machinery Required

Turner

Ball Meal Casting Deptt

Module s

Glaze Room Finishing Deptt.

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Raw Material

Kolayat Clay(In Bikaner District) & Thangarh Clay(Gujarat)

Zinc(Gujarat)

Zirconium(Gujarat)

Salphoric acids(Biwar)

Cobalt(Delhi)

China Clay(Delhi)

No monopoly of any supplies in any of the above raw materials.

Total Costing of plant

Land Approx 20 lakh

Building 10 Lakh

Machinery 50 Lakh (Semi Automatic) & 1 Crore (Automatic)

Raw material initially around 15 to twenty Lakhs.

Labor required.

Total Rs. 1.10 Cr (Semi Automatic Plant) & 1.6 Cr (Automatic Plant)

Alternative arrangement

Consuming less land & labor

Shutter arrangement.

In this capacity is limited along with the space.

Functional only for small time duration

Decision of Price

1) Raw Material prices

2) Manufacturing Unit price(Automatic or Semi Automatic)

Target Customers

B2B Selling takes place.

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No direct contact between customer & Company.

Personal Selling takes place.

Distribution Channel being followed

Raw materials are sourced from Bikaner, Gujarat, Biawar, and New Delhi. Main factor is

Kolayat clay available at cheap rates.

Manufacturing plants approximately 18 plants are there in Bikaner, situated in RIICO

industrial area.

Supply throughout India but majorly to Punjab, Haryana, West Bengal, and Delhi &

Orissa.

Supply chain has distributers in all regions, which further supplies to retailers.

All manufacturing Units fall under category of PVT LTD of LTD Company. So it is

totally an organized sector.

Profit Margin

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Approx 10 to 15 % from manufacturers to distributers

Approx 10-12 % from Distributers to retailers

Up to 20 % from retailers to customers

Competition

Low degree of competition among the Industries present in Bikaner, but tough competition from

manufacturing units present in Gujarat.

INSULATORS

This is one of the diversification which has taken place.

Most of the sanitary ware Industry in Bikaner are now into it.

Arrangement for manufacturing remains same only the mould which is used changes.

Selling is mostly done to government on tender & on bidding basis.

Demand as well as profit margin is high.

Supplied throughout India.

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WOOLEN MILL

Investment Required: Land 100*100 sq feet.

Machinery

Washing

Waiving

Thread

Dying

Approx Capital required : 1 to 1.10 Crore Including

Raw Material

Raw Material is raw wool purchased from Bikaner Woolen Association or Ganganagar.

Manufacturing Process

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Supply Chain

Supply mainly to Mirzapur, Badhoi, and Hydrabad.

At these places the thread prepared is converted to woolen carpets and then exported to

US.

Due to rescission this sector is badly hit and 70% of the manufacturing plants have closed

production.

Organized sector falls in Private Limited & limited Companies.

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BHUJIA INDUSTRY BIKANER (MINI PLANT)

Investment Required

Land required minimum 34*34 Feet

1 godawn12*12 feet

1 Raw material Room 12*12 Feet

Packaging Room 10* 20 Feet

Ready products 10*10 feet

Machinery Required

Flourier

Mini Grinder

Centrifugal machine

Diesel Stove & other containers

Total Investment 5 to 5.5 Lakh.Above is the requirement for a Mini plant, if the capacity need to be increased then all the above

can be replicated.

Raw Material:

Sourced from local suppliers

Pulses

Spices

Oil

Water


Pulses 100 Kg.

6 Kg Salt

1.2 Kg red Chili

555 gm other Spices

6 Kg oil

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Above are the in gradients which are mixed together in raw

material room

Then send to production room where it is mixed with water and

finally fried in oil.

Quality of bhujai depends totally on oil and the quality of

ingadients used; according to these the price is fixed.

After the production the bhujia is moved the packaging room

where it is first kept under fan so that it becomes cool n then it is

packed.

PACKAGING OF BHUJIA IS OF TWO TYPES

1) Manual Packaging

In this type of packing the bhujias are manually filled in polybags,

weighed & then packed.

Labor required in this process totally depends on the production.

2) Automatic packing

In this type of packaging the bhujias are directly fed into the

packets which are then sealed in the ongoing process, the quantity

i.e. 100gms, 250gms which is fixed and we get the packaged

products, ready to supply.

Distribution

District wise distribution in Rajasthan.

Separate distributers for Highways specially 100 gms & 250 gms

pouches.

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Factors that need consideration while price is decided

Prices of pulses used

Packaging Material

Competition

Location

Target consumers

Main Consumers

Biakners Local population

Supply throughout Rajasthan as well as India.

Competition

Level of competition for local market is high because of the presence of

the unorganized market.

Survey of KEM road Bikaner

Number of Shops 15

Target group is same

Price range (Between 60 to 90 Rs. Per kg) n quality is

approximately same.

Differentiating factor is the brand name which they have

developed from their presence over the years.

Customers are mostly the local people & from Bikaner district or

at most from Rajasthan.

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POP INDUSTRY BIKANER

Investment Required: Land 100* 100 feet approx

Machinery Required

Blower

Crusher

Filterer

Approx Total Cost : 50 Lakh.

Raw Material : Gypsum (Jamsar)


Gypsum baked in Blower

Blower can be using diesel, wood (Supply from

Ganganagar or Gujarat) as fuel.

Pieces crushed into fine particles using Crushers

Filtering takes place.

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After filtering the products are divided into Super Fine, Fine &

Medium quality.

24 hrs running of blower , production 3 to 3.5 ton of POP

Customer

Mainly used in POP Wash (As a paint in Buildings)

Hospitals.

Supply throughout India specially Punjab & Gujarat.

Competition

Sector is organized as all the players are registered

Approx 15- 18 manufacturing plants are there in Bikaner region

Selling takes place in quantity of Quintals & Tones.

COST BENEFIT ANALYSIS (SANITARY WARE)

1. INVESTMENT

Land minimum requirement is 176 *176 sq.ft.

Investment 40 lakh 1 crores (depending upon the type of manufacturing

plant)

Approximate total investment 1 to 1.6 crore

Availability of land- Land is though available but prices are sky high (e.g.

Jaipur Highway, RIICO Industrial area)

2. RAW MATERIAL

High availability (from KOLAYAT)

3. MACHINERY

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Technical skills required for installation as well as usage

Machinery needs to be transported from Ghaziabad or Delhi or NCR

region

4. Price decided on raw material and type of manufacturing unit, B2B

selling.

5. Setting up of new supply chain is very difficult because both at

distributer and retailer ends are already in tie-ups with earlier

existing manufacturing firms.

6. Profit margin is good and also competition is low.

NOTE: This is a good option to enter into, especially the Insulator

sector is highly growing, but investment required in very high.

In sanitary wares growth is low as compared to Insulator industry as

government is a big consumer of the same.

COST BENEFIT ANALYSIS (WOOLEN MILL)

1. INVESTMENT:

Land minimum requirement is 100*100 sq.ft.

Investment Rs. 50 lakh

Approximate total investment 1 to 1.2 crore



2. RAW MATERIAL

Easily available from Bikaner Woolen Mill Association.

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3. MACHINERY

Semi skilled laborers are required to operate the machines.

Machines are easily available from the local markets.

4. Price decided on raw material.

5. Supply chain is more or less is same for all the units because it is

an export oriented business.


Note: Currently it is not a successful industry as it was hit by

recession most of the manufacturing plants have closed down, so

keeping in view the investment required, this option should be given

least priority.

COST BENEFIT ANALYSIS (BHUJIA)

1. INVESTMENT:


Approximate total investment 5 Lakh

Availability of land- Ample of Land is available (As requirement is low)

2. RAW MATERIAL

Easily available from local market.

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3. MACHINERY

Machines are easily available from the local markets.

4. Price decided on raw material (pulses as their rates keep on

fluctuating), location packaging.

5. Supply chain is not required for local market of Bikaner 5 to 10

labors are required for delivers (Totally depends upon the target

customers).


Note: One of the best option to enter into as investment is low, market

is growing, and demand & consumption is high.

With Bhujias various other varieties are also produced which are

high profit earning.

Although competition is high but growth is good, if positioned

properly can give very high output.

COST BENEFIT ANALYSIS (POP)

1. INVESTMENT


Approximate total investment 50 Lakh



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2. RAW MATERIAL

Easily available from nearby Market (Gypsum from Jamsar).

3. MACHINERY

Machines are easily available from the local markets, still at some

places tires are used to bake the raw material, therefore machinery

required also varies

4. Price decision depends on the type of customer. As supply takes

place in bulk therefore price is for quintals or tones of the product.

5. Well organized Supply chain is required, personal selling plays a

very important role.


Note: This is also a good option to enter into as the Demand &

consumption is high both for the consumer market as well as b2bmarket.

Demand continuously increasing as POP has been now a days used in

finishing of buildings etc.

COMPARATIVE ANALYSIS

Sanitary Woolen Bhujia POP

Investment required High High Low Moderate

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Raw

Material( Availability

)

Easy from

nearby

areas(approx

between 100-

200 kms)

From local

Market(20-

30 kms)

Local

market(2-5

kms)

Nearby

areas(appr

100 kms)

Machinery Skilled Semi

Skilled

Unskilled Semi Skill

Price Decision Raw Material

& type of

manufacturing

unit

Raw

Material

Raw

Material

(Pulses),

Location,

Packaging.

Type

customer &

Customers B2B B2B B2B &

B2C

B2B & B2

Profit Margin High Moderate High High

Competition Low Low High High

Growth Moderate Low High High

CONCLUSION

Best option will be to enter into bhujia sector as investment is low

as well as growth rate demand as well as consumption in local

market is very high.

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POP is the second best option keeping in view the investment and

the level of growth. This market is growing as the demand has

increased in finishing of homes & buildings.

LIMITATIONS OF THE STUDY

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Location of the study is restricted to geographic location of

Bikaner.

Evaluation will be on four types of firms sanitary ware, woolen

mills, plaster of Paris (POP) and Bhujia.

REFRENCES

a. http://www.bikanertradeindustryinfo.com/main.htm

b. http://www.realbikaner.com/industry/index.html

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http://www.bikanertradeindustryinfo.com/main.htmhttp://www.realbikaner.com/industry/index.htmlhttp://www.bikanertradeindustryinfo.com/main.htmhttp://www.realbikaner.com/industry/index.html

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