DPR-Sanitaryware Manufacturing Unit

1DETAILED PROJECT REPORTESTABLISHMENT OF SANITARYWARE MANUFACTURING UNIT

Table of Contents

1 INTRODUCTION............................................................................................................................................................... 3

1.1 ABOUT THE PROJECT.............................................................................................................................................................31.2 END USE OF THE PRODUCT.....................................................................................................................................................3

2 PERSONAL INFORMATION............................................................................................................................................... 4

2.1 INFORMATION ABOUT OUR PROMOTERS....................................................................................................................................4

3 PRESENT STATUS & MARKET POTENTIAL......................................................................................................................... 5

3.1 BASIC MARKET INFORMATION ABOUT THE PROJECT.....................................................................................................................53.2 EXISTING MANUFACTURERS OF THE PRODUCT IN THE LOCAL AREA.................................................................................................53.3 ANNUAL PRODUCTION OF THE LOCAL AREA & THEIR ANNUAL SALES TURN OVER.............................................................................63.4 EXPECTED CUSTOMERS & SELECTED MARKET AREAS...................................................................................................................63.5 ANNUAL PRODUCTION & MARKET NEED...................................................................................................................................73.6 MARKETING STRATEGY...........................................................................................................................................................73.7 PRICING..............................................................................................................................................................................73.8 EXPORT POTENTIAL...............................................................................................................................................................73.9 SCOPE OF DIVERSIFICATION.....................................................................................................................................................83.10 CONCLUSION........................................................................................................................................................................8

4 TYPE OF UNIT & SITE SELECTION...................................................................................................................................... 9

5 COST OF PROJECT.......................................................................................................................................................... 11

6 MEANS OF FINANCE...................................................................................................................................................... 12

7 PRELIMINARY & PRE OPERATIVE EXPENSES................................................................................................................... 13

8 PRODUCTION PROGRAMME.......................................................................................................................................... 14

9 PRODUCTION PROCESS.................................................................................................................................................. 15

9.1 TECHNICAL KNOW HOW AVAILABILITY....................................................................................................................................159.2 FLOW CHART FOR CONVERSION PROCESS FROM RAW MATERIAL TO FINAL PRODUCT......................................................................169.3 STEPWISE CONVERSION PROCESS FROM RAW MATERIAL TO FINISHED GOODS...............................................................................169.4 QUALITY CONTROL MEASURES..............................................................................................................................................17

10 MANPOWER REQUIREMENT (AT 90% CAPACITY UTILISATION).......................................................................................17

11 INFRASTRUCTURAL FACILITIES (AT 90% CAPACITY UTILISATION)....................................................................................18

12 UTILITIES & OVERHEAD COSTS (AT 90 % CAPACITY UTILISATION)...................................................................................18

13 ADMINISTRATIVE EXPENSES (AT 90 % CAPACITY UTILISATION)......................................................................................18

14 ANALYSIS OF BREAK EVEN POINT (BEP).......................................................................................................................... 19

15 PROJECT IMPLEMENTATION SCHEDULE......................................................................................................................... 20

16 ANNEXURE.................................................................................................................................................................... 21

16.1 ANNEXURE 1: COST OF PLANT & MACHINERY..........................................................................................................................2116.2 ANNEXURE 2: RAW MATERIALS (R.M) REQUIREMENT & ITS COST REQUIREMENT PER YEAR (AT 90% CAPACITY UTILISATION)..............2316.3 ANNEXURE 3: WORKING CAPITAL REQUIREMENTS (AT 90% UTILISATION)....................................................................................2316.4 ANNEXURE 4: DEPRECIATION CALCULATION.............................................................................................................................2416.5 ANNEXURE 5: INTEREST CALCULATIONS...................................................................................................................................2416.6 ANNEXURE 6: COST OF PRODUCTION & PROFITABILITY (AT 90 % CAPACITY UTILISATION)...............................................................2416.7 ANNEXURE 7: CASH FLOW STATEMENT...................................................................................................................................25

List of TablesTABLE 1: TABLE SHOWING PRODUCTIVITY DETAILS AND ANNUAL SALES TURNOVER OF MANUFACTURING UNITS.....................................................6TABLE 2: PRODUCTIVITY DETAILS OF THE MANUFACTURING UNIT.....................................................................................................................7TABLE 3: TOTAL COST OF THE PROJECT....................................................................................................................................................11TABLE 4: TABLE SHOWING MEANS OF FINANCE.........................................................................................................................................12TABLE 5: TABLE SHOWING PRELIMINARY & PRE OPERATIVE EXPENSES...........................................................................................................13TABLE 6: PRODUCTION DETAILS COMPARISON AT VARYING CAPACITY UTILISATION..........................................................................................14

JAY A.TRIVEDI (08201001)ENTREPRENEURSHIP DEVELOPMENT INSTITUTE OF INDIA


TABLE 7: MANPOWER REQUIREMENT @ 90% CAPACITY UTILISATION...........................................................................................................17TABLE 8:INFRASTRUCTURE REQUIRED @ 90% CAPACITY UTILISATION...........................................................................................................18TABLE 9: UTILITIES & OVERHEAD COSTS..................................................................................................................................................18TABLE 10:ADMINISTRATIVE EXPENSES......................................................................................................................................................18

List of FiguresFIGURE 1: SITE LOCATION......................................................................................................................................................................10FIGURE 2: FLOW CHART FOR MANUFACTURING PROCESS OF SANITARYWARE..................................................................................................16FIGURE 3: STEPWISE CONVERSION PROCESS FROM RAW MATERIAL TO FINISHED GOODS..................................................................................16

List of GraphsGRAPH 1: PIE-CHART SHOWING THE PERCENTAGE UNITS WITH VARYING PRODUCTION CAPACITY.........................................................................6GRAPH 2: COST BREAKDOWN STRUCTURE FOR THE PROJECT........................................................................................................................11GRAPH 3: CONTRIBUTION OF DIFFERENT MEANS OF FINANCE.......................................................................................................................12GRAPH 4: GRAPH SHOWING PRELIMINARY & PRE OPERATIVE EXPENSES BREAKDOWN......................................................................................13

List of AbbreviationsEXP : ExpensesGEB : Gujarat Electricity BoardGSPC : Gujarat State Petroleum Corporation Ltd.INT : Interest



Name of the Project : Establishment of Sanitaryware Manufacturing UnitPrepared By : Jay A TrivediEnrolment No : 08201001Name : Jay A TrivediAddress : Chotila Road, Near Jamvadi Village, Thangadh, Dist:

Surendranagar, Gujarat - 363530 Tel No. (O) : 02751 220146Date of birth : 6 Feb. 1989 Age : 20 years Education qualification : F.Y. B.com Experience : 6 monthsSpecial training : Diploma in Exports, Sales Management Family background : Business Your strengths in this field : I am very interested in developing this business

1 Introduction 1.1 About the ProjectChoice Sanitaryware Industries has envisaged the project of establishing of high quality production of sanitary ware items to meet the increasing demand of sanitary ware items at the global level. The proposed manufacturing unit will be having a daily production capacity of 1500 – 1600 pieces.

Wide Range of products are planned to be manufactured which are as follows: Ceramic made sanitary ware items for bathrooms washrooms and sanitation such as

1. Wash basins2. Water Closets3. Normal Squatting Pan4. Urinals5. Wall Hung Basins

Other bathroom accessories like 1. Soap Dish2. Shelf3. Toilet roll holder4. Towel hooks etc.

The quality of the final product will match the International quality standards that are achieved by the European and Chinese products, however at much lesser and competitive rates.

1.2 End Use of the ProductThe products manufactured will be supplied to the countries where the demand is on a rise and require them on a massive basis. Hence the products will be transferred in bulk quantities where they will be utilized for the utility purposes in the hotels, restaurants, offices, Mass housing schemes etc.

2 Personal Information 2.1 Information about our PromotersName : Ashok R. Trivedi Address : Chotila Road, Thangadh, Dist: Surendranagar, GujaratTel No : 220146Date of birth : 6|10|1960



Age : 49 years Experience : 25 yearsSpecial training : None Family background : Business You’re strength in this field : Expert in manufacturing of sanitary items and

having very good practical knowledge



3 Present Status & Market PotentialSanitaryware Industries in India for the last 6-7 years have shown very dramatic growth with major players doubling their production capacity. The Companies have also upgraded their manufacturing system by introducing Battery Casting, Beam Casting and have gone in for latest imported Fast Firing Cycle Kiln Technology. These Companies have also upgraded their quality and have introduced high value range in the market, which has been accepted and appreciated. The demand for high value Sanitaryware in India is growing very fast.

The Companies are trying to meet the demand as the realization per Metric Ton for high value product is very good which ultimately results in good profitability. In order to educate the customers in India to go for quality products and also for higher value sanitarywares, companies have adopted a very aggressive advertisement campaign. Companies have also strengthened their dealer network by offering showroom incentives and some of the companies have also gone for their own retail outlets in major towns. The demand for Sanitarywares in India is growing @ 15% -17% every year.

Government of India Policy on Housing Sector is very encouraging. The Government has announced Income Tax rebate on housing loan to boost the housing sector. All financial institutions are lending money for construction of house at a very low rate of interest. Government figure shows that Housing Sector is growing by approximately 25% every year. The need of Housing in India with 100 crores population looks to be very potential. The housing has become a basic necessity, as people are looking forward for improved sanitary condition. The concept of making toilet is fast growing even in village areas, where toilet till last two years did not exist.

The cost of producing sanitaryware in India is substantially low as compared to the advance countries, because the labour cost and the basic raw materials for manufacturing quality sanitarywares is available at very cheap rate and in abundance. Because of our low cost of production, Indian sanitarywares are very competitive in the neighbouring countries and hence export from India is also growing every day.

3.1 Basic Market Information about the ProjectThe unit will manufacture a wide range of high quality sanitary ware. These are mainly used for utility purpose as well covering and decorating material in bathroom, kitchen, w .unit, auditorium, malls, hotels, hospitals, laboratories, swimming pool etc. Effective use of sanitary ware helps in improving the hygienic conditions within a closed space and also helps in improving the aesthetic look of the space where they are fitted. Hence they help in improving the standard of day to day living. Growing awareness of the need for cleanliness in homes and surrounding have given a boost to the industry.

Increase in construction activities both for dwelling and industrial purpose and the increasing demand of a nation’s primary need for housing has given a thrust to the building projects, co-operate housing schemes etc. Growth is always accompanied with prosperity and thus the improved standard of living demands high quality inputs. Hence the demand for sanitary ware is increasing. The growth of sanitary ware industries in recent years has been growing but with that the demand is also increasing.

3.2 Existing Manufacturers of the Product in the Local Area There are around 80 Sanitaryware manufacturing units in the local area. In Gujarat alone around 200 – 250 units manufacture sanitaryware products. While considering the overall status of India, there are only 300 units.

Hence there is lot of competition in the local area but the demand is so huge since these 300 units have to supply to the whole country as well as exporting it to different countries. Hence supplying of Sanitaryware products involves a huge market both at national and global level.



3.3 Annual Production of the Local Area & Their Annual Sales Turn OverThere are 80 units having different production capacity. Following table shows the comparison of the Productivity details of the total no. of units along with the Annual Sales Turn over

Table 1: Table showing Productivity Details and Annual Sales Turnover of Manufacturing Units

Production Capacity (piece per day) Total no. Of Units Annual Sales Turn over (Rs. In

crore)1000 – 1500 25 10 – 15600 – 1000 25 5 – 10300 – 600 30 1 – 3

Hence from the above table it is clear that the majority of the manufacturing units opt for a maximum production capacity ranging from 600-1500 pieces per day for better Annual Turn Over. Following chart further emphasizes the need for higher production capacity

38%

63%

300-600600-1500

Graph 1: Pie-chart showing the Percentage Units with Varying Production Capacity

3.4Expected Customers & Selected Market AreasThere are many expected customers since Choice Sanitaryware Industries is in this business since 30 years. Hence due to old contacts and our reputation in the Market plus with adequate marketing strategies, the company will succeed to attract more customers to our side.

We would target a few local areas in Gujarat and few other developing states and cities. But our main focus will be on the export market. Initially we will target Gulf countries and African countries and then with further improvement in reputation, we will target Australia and some of the European countries. As a part of our marketing plan, we will prepare a website available globally for the customers abroad which will depict the type and quality of work that we do along with the necessary complementary information. We will register our Company in one or two other websites accepted at a global level so that we can find new customers. The pre-implementation stage would be slightly tougher but will become smooth as time passes as it is small scale industry and the production capacity is not so massive.

3.5 Annual Production & Market NeedFollowing Table shows the daily, monthly and annual productivity of the proposed unit

Table 2: Productivity details of the manufacturing unit

Unit No. of pieces manufactured per unit



Daily 1200-1500Monthly 40000Annual 360000

3.5.1 Market need There is an increase in the market need due to faster infrastructure development in the developing countries. Since there are no clear numbers available at the global level the market need cannot be quantified but the need will vary according to the amount that is requested by the customers from different countries.

3.6 Marketing Strategy

During the initial production stages, the company will keep a competitive and attractive price, slightly lower than the current rates while it will mainly focus on the quality and try to improve as much as it is possible because Quality and Economy go hand in hand. Once quality products are manufactured, ultimately they will be produced at an economical cost. Once we achieve the foothold in the market, then the prices can be brought back to normal rate.

Hence while achieving lesser profits at the initial stages we would attract more consumers and hence with growing demand and popularity, we would inflate the rates when we reach that stage.

3.7 PricingThe pricing will be decided after considering the following aspects:

Cost of all raw materials per kg Cost of gas consumption per day and per piece Cost of labour exp inclusive all (Mould making, body making, glaze, packing, loading

and unloading other labour exp) Cost of electricity per day on monthly basis Maintenance expenses Office expenses Other exp related manufacturing Transportation expenses Miscellaneous expenses

3.8 Export PotentialThere is plenty of potential in the export market as the sanitaryware from India is probably the cheapest in the world so people from the developing countries are ready to buy the products with the cheaper rate. Also the quality obtained also is good enough for the export market. Therefore huge orders and tenders are being booked from many parts of the world.

3.8.1 List of Potential Countries Following is the list of countries where sanitary ware products are in huge demand exported in huge quantities:

Middle East African countries like Kenya European countries like Germany Sri Lanka Australia



3.9 Scope of Diversification There is scope for diversification if the quality remains good enough and improves according to the higher standards. Hence we can say that diversification is possible only when we have a standard quality. We can have open market if we have better quality then other local manufacturers.It is trickier to diversify one product to another product as it is difficult to set up a new plant because there is no super normal profit.

3.10 ConclusionAs mentioned earlier, the demand for the sanitary ware has grown over the years and will grow on a steady basis in future. Nowadays more and more people want high quality cleanliness and sanitation as they wants to show and keep their bathroom hygienic and aesthetically beautiful. So an average consumer always looks forward for extra ordinary look but available at affordable prices. It has been observed that there are new projects coming up in India as well as in the other parts of the world. Hence the demand of sanitary ware is going to have a good market potential in coming years.



4 Type of Unit & Site Selection

1 Name of the Unit

Royal Choice Sanitaryware Industries

2 Address Chotila Road, Thangadh, Surendranagar, Gujarat, India3 Type of Unit Small Scale Unit

4

Techno Economic

Reasons for Site Selection

The main reason for the selection of the site is that the raw material that is required for manufacturing is available at a very near distance. (Refer Figure 1)

There is no price discrimination as all of them are well aware of the change in price. As there are lot of buyers and sellers of the material there a very less chances of the prices going very high. So the cost doesn’t go up.

Another reason for the site selection is that the area is in backward zone so we will get some benefits from the government. The company will also get subsidy and other benefit of the taxes.

As far as the labours are concerned they are also available as there are other units which are located near by the site area skilled workers, semi skilled workers and the wage labourers are available at reasonable rates. (Refer Figure 1)

The other reason for the site selection is that the land which is available near the site is at reasonable rate that is the price of the land is at the minimum level.

The place where the site is located is very beneficial as far as the ceramic manufacturing is concerned since Thangadh is considered as the Ceramic Hub of India.

5Location of the

Factory & Address

22O34 N 71O11EChotila Road, Jamwadi village, Thangadh.Dist: Surendranagar ,Gujarat

6 Requirement of Land &Building

a) Area Required for Construction : 40468 sq.mtsb) Area Required for Ware House/Future Development:

20134 sq.mts Total Land Required : a+b = 60702 sq.mts


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DETAILED PROJECT REPORTESTABLISHMENT OF SANITARYWARE MANUFACTURING UNIT

5 Cost of ProjectThe cost of the project has been estimated at total Rs.5, 00, 00,000 (Rupees Five Crores Only).It has been estimated as shown below

Table 3: Total Cost of the Project

Sr.No Description Total Cost

(Rs.)1 Land 37,50,0002 Land Development Exp 8,00,0003 Building 40,00,0004 Plant And Machinery 2,00,00,0005 Other Fixed Assets 50,00,0006 Contingencies And Escalation 7,00,0007 Preliminary And Pre-Operation Exp 15,00,0008 Working Capital Margin 57,00,000

Total 5, 00, 00, 000

The Cost Breakdown Structure is shown in the following Pie-chart

Land9%

Land Development Exp2%

Building10%

Plant And Machinery48%

Other Fixed Assets12%

Contingencies And Escalation

2%

Preliminary And Pre-Operation Exp

4%

Working Capital Margin14%

Land Land Development Exp BuildingPlant And Machinery Other Fixed Assets Contingencies And EscalationPreliminary And Pre-Operation Exp Working Capital Margin

Graph 2: Cost Breakdown Structure for the Project


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6 Means of Finance

Table 4: Table showing Means of Finance


(Rs.)1 Promoters Contribution 1,00,00,0002 Long Term Loan From SFC 2,00,00,0003 Unsecured Deposits 25,00,000 4 Subsidy (15 %) 75,00,000 5 Other Loan (Int Free Loans) 1,00,00,000

Total 5, 00, 00, 000

Promoters Contribution 20%

Long Term Loan From SFC 40%

Unsecured Deposits5%

Subsidy (15 %)15%

Other Loan (Int Free Loans)20%

Promoters Contribution Long Term Loan From SFC Unsecured DepositsSubsidy (15 %) Other Loan (Int Free Loans)

Graph 3: Contribution of different Means of Finance

7 Preliminary & Pre Operative Expenses


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Table 5: Table showing Preliminary & Pre Operative Expenses


(Rs.)1 Training Cost (If Any) 1,00,0002 Legal Exp, Scrutiny Fees 10,00,0003 Project Report Preparation 3,00,0004 Establishment Exp 2,00,0005 Trail Production Exp 20,00,0006 Electrification And Water Deposits 5,00,0007 Inauguration Expenses And Other Exp 2,50,000

Total 43,50,000

Training Cost (If Any) 2%

Legal Exp, Scrutiny Fees 23%

Project Report Preparation 7%

Establishment Exp

5%

Trail Production Exp46%

Electrification And Water Deposits

11%

Inauguration Expenses And Other Exp

6%

Training Cost (If Any) Legal Exp, Scrutiny Fees Project Report Preparation Establishment Exp Trail Production Exp Electrification And Water DepositsInauguration Expenses And Other Exp

Graph 4: Graph showing Preliminary & Pre Operative Expenses breakdown

8 Production Programme

Annual Installed Capacity : 4, 70,000 pieces (5355 tons)Utilized Capacity : 4, 20,000 piecesNo Of Shifts (8 Hrs) Per Day : 1st shift 8:30 am to 5:30pm (General shift) 30 min break.


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2nd shift 6:00 pm to 6:00 am.Production Details per Year:

Table 6: Production Details Comparison at Varying Capacity Utilisation

Sr.No

Name of Product

At 60%Capacity

Utilisation

At 70%Capacity

Utilisation

At 80%Capacity

Utilisation

At 90%Capacity

UtilisationQty.

(pieces)

Value(Rs.la

cs)

Qty.(piece

s)

Value(Rs.la

cs)

Qty.(piece

s)

Value(Rs.la

cs)

Qty.(piece

s)

Value(Rs.la

cs)

1. Wash Basin Small

60,000 57 70,000 66 80,000 76 90,000 85

2.Wash Basin

Medium With Pedestal

55,000 126 65,000 149 75,000 172 85,000 195

3.Wash Basin

BigWith Pedestal

65,000 225 75,000 262 85,000 295 95,000 332

4.Water Closet

Medium With Tank

25,000 87 35,000 125 45,000 155 55,000 190

5.Water Closet

Big With Tank

25,000 92 35,000 130 45,000 158 55,000 195

6. Squatting Pan 65,000 65 75,000 75 85,000 85 95,000 95

7. Bathroom Accessories

20,000 20 30,000 30 40,000 40 50,000 50


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9 Production Process9.1 Technical Know How Availability9.1.1 Raw MaterialRaw materials for body include Quartz, Than clay black, Than clay brown, China clay, Feldspar, Bikaner clay, Makansar, Soda, Talc. Raw materials for glaze include Quartz, Feldspar, Limestone, Zinc oxide, Barium oxide, Zirconium and ceramic colors. Plaster of the Paris is the material that is used for modeling and moulding of the Ceramics sanitary ware.

9.1.2 Slip Preparation and Glaze MakingFor the slip preparation the raw materials are mixed with water as per the requirement. Proper composition along with the sufficient amount of water then gets loaded to the ball mills for grinding.Glaze is a glasslike, multi-ingredient, silicate thin layer, which adheres to the surface of ceramic body. It is usually sprayed upon dry body by manual or automatic spraying method, which after firing produces smooth, glossy, and surface with beautiful color and luster. So properties of glaze have large influence on quality of products. Generally ball milling is used to prepare glaze.

9.1.3 Casting and DryingSlip is cast into plaster moulds. Due to the absorption and water character of porous moulds, an even thin layer gets formed on the surface which becomes thicker with time. When a desired thickness is arrived, surplus slip is poured out. Finally the layer continues to retract by de-watering resulting in the gross body.Before next process, all products need to be dried to a low water content to increase the strength of body, which is called drying.

9.1.4 GlazingThere are many glazing methods such as spraying glaze, dipping glaze, pouring glaze, brushing glaze etc. Sanitary wares are mostly adopted spraying glaze method because large volume complicated shape, low strength of body. Spraying glaze may be manual glazing or automatic glazing. Manual glazing is done in a booth with sufficient de-dust installation, and automatic glaze spraying is done on the conveying belt.

9.1.5 FiringThese sprayed clay wares are then taken to the kiln for firing. As a result the bodies will take place a series of physical and chemical reactions, and will take a fixed shape. The bodies are put in the entrance of tunnel and the products are pushed out from the exit. Fuel is burnt in the resisting firewall on both sides of tunnel. The tunnel kiln is consisting of three zones.v. Preheating zonevi. Heating zonevii. Cooling zone

The heating zone has burners on the both sides, in the third section the product cools down by exhausting. The temperature of every section is strictly controlled by automatic ventilation equipment and the temperature-controlling facilities called thermo couples to ensure to fire every product evenly. Continuous kilns are classified as roller kilns and tunnel kilns, the roller kilns support and convey products by high temperature resistance ceramic rolling stick. In the tunnel Kiln, kiln cars are used that are made from steel frame wheels on which low mass refectories, silicon carbide board etc. are built to support products. These cars are pushed by hydraulic Pusher.

9.1.6 Inspection, Repairing, Re-firing and PackingThis is the last process of production. Finished products are determined according to stipulated standards to select passed products and un-passed parts by repairing and re-firing. Passed products are carefully packed and then dispatched for export and to relevant customers.


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9.2 Flow chart for Conversion Process from Raw Material to Final Product

Figure 1: Flow Chart for Manufacturing Process of Sanitaryware

9.3 Stepwise Conversion Process from Raw Material to Finished Goods

Figure 2: Stepwise Conversion Process from Raw Material to Finished Goods

9.4 Quality Control MeasuresQuality control measures are to be taken on the body material and the glaze material. The materials need to be tested every day. In the laboratory and apart from that quality will be


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checked on the basis of sorting of the finished goods. Random checking will be done. As per the results of day to day shorting the production department will take action on the quality or the improvements needed in the finished goods.

There are two tests basically performed for Quality Control Measures: Firing test Residue test

Firing Test This test is done to see the shining and glossing of the material. In this test calcite loss is nearly 40-44%.

Residue Test This test is done as per sizes. The body mix is passed through 300µ mesh. The glaze mix is passed through 200µ mesh.

10 Manpower Requirement (At 90% Capacity Utilisation)(Total amount to be paid by salary and wages)

Table 7: Manpower Requirement @ 90% Capacity Utilisation

Sr. No. Particulars Nos. Salary per

month(Rs.) Yearly Rs.

(A)1.2.3.4.5.6.

Factory StaffProduction Manager

SupervisorsSkilled Workers

Semi Skilled WorkersUnskilled Workers

Watchmen

251021102

10,0005,0007,5003,5002,0002,000

1,00,00050,00075,00035,00020,00020,000

(B)7.8.9.

Office Staff Clerk

AccountantPeon

412

5,00010,0002,000

50,0001,00,00020,000

(C)10.11.

Sales StaffSales Manger

Field Staff12

15,00010,000

1,50,0001,00,000

Sub Total :Add : Benefits @ 30%

90,000 9,00,000

Total 60 3,00,000 30,00,000

11 Infrastructural Facilities (At 90% Capacity Utilisation)

Table 8:Infrastructure Required @ 90% Capacity Utilisation

Sr.No Description

1Electricity (Total connected

loaded)200 KVA


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2 Fuel requirement/day 2400 cubic meter3 Water requirement/day 20000 litres

4Availability possibilities of

meeting these requirements

Electricity supply by the G.E.B Electricity Board Fuel by G.S.P.C and water by our own Reverse Osmosis plant

12 Utilities & Overhead Costs (At 90 % Capacity Utilisation)

Table 9: Utilities & Overhead Costs

Sr.No.

Particulars Monthly (Rs.) Yearly (Rs.)

1 Electricity 3,75,000 45,00,0002 Fuel 10,50,000 1,05,00,0003 Water 30,000 3,60,0004 Transportation 40,000 4,80,0005 Any Other 10,000 1,00,000

Total 15,05,000 1,59,40,000

13 Administrative Expenses (At 90 % Capacity Utilisation)

Table 10: Administrative Expenses

Sr.No. Particulars Monthly (Rs.) Yearly (Rs.)

1 Stationary& Printing 2,000 20,0002 Postage/ courier 5,000 60,0003 Telephone / fax 7,000 84,0004 Legal charges 1,000 15,0005 Travelling exp. 35,000 4,25,0006 Miscellaneous 10,000 1,20,0007 Total 60,000 7,24,000


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14 Analysis of Break Even Point (BEP)

Sr.No Description Amount (Rs.)

1 Sales Realisation 80,00,000

2 Variable Costs2a Raw Materials 17,60,0002b Consumables 35,0002c Power, Fuel, Water 20,00,000 2d Salaries And Wages 1,00,0002e Interest On Working Capital 6,75,000

2fSelling, Packing, And Distribution

Exp4,00,000

Total Variable Cost 49,70,000

3 Fixed Costs3a Repairing And Maintenance 40,0003b Rent, Taxes, Insurance 60,0003c Salary And Wages 2,00,000 3d Administrative Exp 30,0003e Int. On Term Loan 2,40,000

Total Fixed Cost 5,70,000

4 ContributionSales Realisation- Variable Cost 30,30,000

5 Break-even point Fixed Cost/Contribution*100%5,70,000/30,30,000*100 = 18.81 %

Hence the Break-even point for the Project comes out to 18.81 %

15 Project Implementation Schedule

MonthsActivity 1 2 3 4 5 6 7 8 9 1

011

12

13

14

Product Selection & Completion of Market


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SurveyArrangement of margin money

Preparation of Project Report and registrationFinance assistance

Selection of site and development of landRecruitment of manpower

Electricity, fuel and water tie-up for availability

Construction of buildingIdentification/selection of machine

Placement of order (Machine)Transportation and installation of machine

Selection of raw material/ placement of ordersReceipt of raw material

Trial productionSales Arrangements

Commercial Production

Hence the final Product will be manufactured after 14 months from the date of commencement of the Project


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16 Annexure16.1 Annexure 1: Cost of Plant & Machinery

Sr.No.

Names Of Machinery With Specification

Cost Per M/C (Rs.)

Nos. Reqd

Total Value(Rs.)

1 Moulding DepartmentPlaster Stirrer 50,000 2 1,00,000

Water Pump 15,000 1 15,000Compressor Small 2,50,000 1 2,50,000

Iron Rods And Angles 50,000 -- 50,000Fans And Lights 500 10 5,000

Big Buckets And Drums 1000 5 5,000

2 Slip Dept/Casting Dept Ball Mill 4,00,000 10 40,00,000

Stirrer Underground Well 20,000 10 2,00,000Casting Pump 50,000 2 1,00,000

Water Pump 25,000 2 50,000Return Pump 25,000 1 25,000

Pump For Fill up Casting 6Vibrator 10000 6 60000

Stirrer 25000 2 50000Blunger 15000 2 30000

Bench For Casting 2000 125 250000Weight Bridge 50000 1 50000

Laboratory Equipments 5000 25 1,25,000Battery Casting Lines 1,00,000 10 10,00,000

Separate Air Compressor 2,50,000 2 5,00,000Syntex Tank 5,000 6 30,000

Rechecking Booth 8,000 4 32,000Casting Well 40,000 2 80,000

Pipe Lines For Supply 5,000 8 40,000

3 Glazing DepartmentBall Mill 4,00,000 6 24,00,000

Glaze Vibrator 10000 2 20000Stirrer 25000 1 25000

Laboratory Equipments 50000 1 50000Rapid Mill 20000 1 20000

Compressor 250000 2 500000Rechecking Booth 20000 6 120000

Exhaust Fans 2500 4 10,000Glaze Vibrator 5,000 2 10,000Glazing Booths 15000 12 180000

Glazing Guns 1500 24 36000Glazing Drums 1000 20 20000

Pipes And Valves 5200 24 125000Magnets 1,00,000 1 Set 1,00,000

Pressure Pots 20000 10 200000


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4 Kiln Department

Full Kiln 1,00,00,000 11,00,00,00

0Kiln Furniture 50,000 90 45,00,000

Kiln Cars 50,000 90 45,00,000Operating Panel 5,00,000 1 5,00,000

Hydraulic Pusher 15,00,000 1 15,00,000Motor 50,000 1 50,000

Blower 50,000 2 1,00,000Exhaust 50,000 3 1,50,000

Combustion 75,000 1 75,000Cooling 1,00,000 2 2,00,000

Gas Connection 2,50,000 1 2,50,000Gas Fuel Set Up 1,00,000 1 1,00,000

Fire Extinguishers 50,000 4 2,00,000

5 Packing Department Palette Packing 2,00,000 1 2,00,000

Machine Set 1,00,000 1 1,00,000Box Packing Machine 1,50,000 2 3,00,000

Shrink Packing Machine 2,00,000 1 2,00,000Manual Hydraulic Jack 20,000 3 60,000

Strapped Box Packing M/C 1,00,000 1 1,00,000

6 Store Room Tools And Spares 1000 20 20000

Glazing Equipments 1200 12 15000Generator 250 KVA 1000000 1 1000000

Other Materials 50000 50000

Total 30533000

16.2 Annexure 2: Raw Materials (R.M) Requirement & Its Cost Requirement per Year (At 90% Capacity Utilisation)

Sr.No Particulars of Raw Materials required Qty (kg) Value (Rs. per

kg)

1 For BodyThan clay black 28,08,000 6,31,800

China clay 19,50,000 28,27,500Feldspar 23,40,000 44,46,000

Bikaner clay 4,68,000 44,46,000


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silicate/ 15,600 1,40,400quartz 2,34,000 5,85,000

soda 13,500 2,70,000 Total 53,01,900 1,33,46,700

2 For GlazeFeldspar 1,35,000 3,37,500

Zinc 9000 6,30,000Zirconium 61,500 39,97,500

CMC 135 40500Quartz 103500 258750Calcite 72000 241200

China Clay Modi 24750 138600Barium 27000 81000

Soda Feldspar 27000 59400Total 4,59,885 57,84,450

16.3 Annexure 3: Working Capital Requirements (At 90% Utilisation)

Sr.No Description Amount (Rs.)

1 Raw material 30 days stock 15, 00,0002 Semi finished goods for 20 days stock 15, 00,0003 Finished goods for 30 days 55, 00,0004 Receivables for days 30 days 55, 00,000 5 Working expenses for month (Utilities + wages + salaries) 20, 00,000

Total 1, 60, 00,000LESS: Credit against Purchase 21, 00,000

Net working capital 1, 40, 00,000Margin for networking capital @25% of net working capital 35, 00,000

Total 1, 75, 00, 000

16.4 Annexure 4: Depreciation Calculation

Particulars Percentage Yearly (Rs.)Building @ 10% 40,00,000

Machinery @ 15 % 30,00,000Tools dies and furniture @ 30 % 30,60,000

Total 1,00,60,000

16.5 Annexure 5: Interest Calculations

Particulars Percentage Yearly (Rs.)Interest on long term loan @ 15 % 1,00,00,000Interest on working capital

loan@ 18 % 4,50,00,000

Interest on other As applicable 1,00,00,000


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Deposits, if anyTotal 6,50,00,000

16.6 Annexure 6: Cost of Production & Profitability (At 90 % Capacity Utilisation)

Sr.No. Particulars Yearly (Rs.)

A Cost of production 1 Raw material 1,85,00,0002 Utilities 1,80,00,0003 Consumables , stores and spares 4,00,0004 Repair and maintenance 3,50,0005 Rent , tax and insurance 15,00,0006 Salaries and wages 30,00,0007 Admin. Expenses 7,05,0008 Selling and distribution expenses 10,00,0009 Packing expenses 35,00,000

10 Miscellaneous expenses 30,00,00011 Interest On term loan + working capital loan 1,10,00,00012 Depreciation 1,00,60,000

Total 7,10,15,000B Income1 Total income 7,25,00,000

2 Job work income 20,00,0003 Scrap & other income 5,00,000C Total Annual Income 7,50,00,000D Gross Profit (B-A) 39,85,000E Income Tax 11,95,500

Net Profit (C-D) 27,89,500

16.7 Annexure 7: Cash Flow Statement

Sources of funds Construction period

Year of production

1 2 3Term Loan

Promoters ContributionGross Profit

Working Capital LoanDisposition Of Funds

Capital InvestmentIncrease In Current Assets

Repayment Of LoanInterest On Term Loan Interest On Bank Loan

Opening Balance Net Surplus

Closing Balance


DPR-Sanitaryware Manufacturing Unit

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