Sponge Iron Plant

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ABSTRACT This project deals with the production of good quality of sponge iron at Kuarmunda, which is one of the remote areas of Sundargarh but is rich in iron ores and the transport facility is good as it is on the national highway. The firm is designed such that its growth occurs fast; it grows in line with other industries. It should be that much strong so that it can defend the existing status in the market. It can catch up the leading demand in the market so that the consumers get their work done within limited time. Apart from the establishment of this project, it would also provide employment to the poor people in the unskilled workers grade so that they don’t go beyond the line of poverty. Basically the purpose of making this project is to make huge amount of profit by utilizing the resources available at Kuarmunda. Since the commissioning of the first Sponge iron unit in 1980, it has been a period of notable accomplishments for Sponge Iron India Limited which has played vital role in developing and establishing coal based DR Technology. Establishment and upgradation of coal based Sponge Iron technology in the Country, innovations in the usage of Sponge Iron and its conversion into Steel, conversion of waste material into value added products, visualization of new concepts for

Transcript of Sponge Iron Plant

Page 1: Sponge Iron Plant

ABSTRACT

This project deals with the production of good quality of sponge iron at Kuarmunda,

which is one of the remote areas of Sundargarh but is rich in iron ores and the

transport facility is good as it is on the national highway. The firm is designed such

that its growth occurs fast; it grows in line with other industries. It should be that

much strong so that it can defend the existing status in the market. It can catch up the

leading demand in the market so that the consumers get their work done within

limited time.

Apart from the establishment of this project, it would also provide employment to the

poor people in the unskilled workers grade so that they don’t go beyond the line of

poverty. Basically the purpose of making this project is to make huge amount of profit

by utilizing the resources available at Kuarmunda. Since the commissioning of the

first Sponge iron unit in 1980, it has been a period of notable accomplishments for

Sponge Iron India Limited which has played vital role in developing and establishing

coal based DR Technology. Establishment and upgradation of coal based Sponge Iron

technology in the Country, innovations in the usage of Sponge Iron and its conversion

into Steel, conversion of waste material into value added products, visualization of

new concepts for updating technology and the unique expertise in total consultancy

for establishing new Sponge Iron plants have all contributed to the evolution of

Sponge Iron India into a 'Technology Corporation'. which our project also intends to

do.

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TABLE OF CONTENTS

ABSTRACT...................................................................................................................0

ACKNOWLEDGEMENT.............................................................................................1

TABLE OF CONTENTS...............................................................................................2

1. GENERAL INFORMATION....................................................................................2

2. DETAILS OF THE PROPOSED PROJECT.............................................................5

2.1. Land and Building:.........................................................................................52.2. Machineries / Equipments:.............................................................................62.3. Miscellaneous Fixed Assets...........................................................................62.4. Preliminary and Pre Operative Expenses.......................................................62.5 Working Capital..............................................................................................7

3. MARKET POTENTIAL............................................................................................7

3.1. Present Demand and Supply of the Product Competition:..................................73.2 Target Clients:......................................................................................................83.3 Marketing Strategy:..............................................................................................8

4. MANUFACTURING PROCESS..............................................................................9

4.1 Technical Know How Availability:.....................................................................94.2 Step by Step Description:...................................................................................10

5. PRODUCTION SCHEDULE..................................................................................11

5.1 Number of Working Days per Annum:........................................................115.2 Number of Working Shifts :.........................................................................11

5.2.1 Sales Revenue:..........................................................................................115.2.2 Utilities:.....................................................................................................115.2.3 Salaries/Wages:.......................................................................................115.2.4 Repairs and Maintance :............................................................................125.2.5 Selling and Distribution Expenses:...........................................................125.2.6 Administrative Expenses:..........................................................................125.2.7 Interest:.....................................................................................................125.2.8 Depreciation:............................................................................................125.2.9 Misc. Expenses:......................................................................................135.2.10 Rent:......................................................................................................13Total Cost of the Project:.....................................................................................13Means Of Finance:...............................................................................................13

6. PROFITABILTY PROJECTIONS..........................................................................14

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1. GENERAL INFORMATION

Name of the Entreprenuers:

sssss

ssss

Proposed Project:

Sponge Iron Plant.

Major Product / Services:

Sponge Iron.

Proposed Locations:

Orissa.

Type of Organization:

Private Limited.

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2. ENTREPRENUER PROFILE :

1. Name :

Educational Qualification:

Technical Skills: C, C++, Oracle, VLSI

2. Name:

3. Educational Qualification: Bachelor of Technology

Technical Skills: C, C++, PLC, ETAP, SIMULINK, VLSI

4. Name :

Educational Qualification: Bachelor of Technology

Technical Skills: C, C++, Oracle, ETAP

4. Name :

Educational Qualification: Bachelor of Technology

Technical Skills: C, C++, Oracle, JAVA, Networking

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3. TYPE OF THE PRODUCT / SERVICES:

1. Type of the Project :

Hard Core.

2. Product / Services Description :

It is a Product Oriented type of firm which includes processing and production of

sponge iron. Our firm deals with the ‘A’ grade quality of sponge iron . Its uses are

mainly in the yielding of ingot and Rods of best quality . Sponge Iron is the product

created when iron ore is reduced to metallic iron, usually with some kind of carbon

(charcoal, etc), at temperatures below the melting point of iron. This results in a

spongy mass, sometimes called a bloom, consisting of a mix of incandescent wrought

iron and slag.

Sponge iron is not useful in itself, but must be processed to create wrought iron. The

sponge is removed from the furnace, called a bloomery, and repeatedly beaten with

heavy hammers and folded over to remove the slag, oxidise any carbon or carbide and

weld the iron together. This treatment usually creates wrought iron with about three

percent slag and a fraction of a percent of other impurities. Further treatment may add

controlled amounts of carbon, allowing various kinds of heat treatment (e.g.

"steeling").

Today, sponge iron is created by reducing iron ore without melting it. This makes for

an energy-efficient feedstock for specialty steel manufacturers which used to rely

upon scrap metal.

3. Major Consumers:

Ram Rudai Steel Plant, Durgapur Steel Plant, Rourkela Steel

Plant, Ranigunj Steel plant.

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PROMOTERS:

1. Major Promoter of our project will be loans taken from banks.

2. Capital from reliable and Supportive Capital Ventures.

3. The company with which our firm collaborates.

4. Our Sponsors who have donated us a large amount for the successful start of

this firm.

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4. MARKET POTENTIAL

4.1 Present Demand and Supply of the Product :

The technologies trend of the present century has lead to the evolution of ‘A’ grade

sponge iron which right now has a demand of Rs 21,500 per ton in market. If this

product will be introduced in the market then it will be of great demand as producers

of the sponge iron are less but resources are more to be explored those are much

needed by the leading steel companies and many more core companies.

The supply of this product would be 400 tonnes per year which

would be utilized by all of its leading consumers and the left out product would be

used to furnish its own company at Kolkata.

4.2 Competition:

With other sponge iron plants like Adhunik Metallics, Ganesh Metallics, Jindal Steel

Plant,Bhushan Steel Plant in the market.

4.3 Target Clients:

Our main target clients are Raam Rudaai Steel Plant, Durgapur Steel Plant, Rourkela

Steel Plant, Raniganj Steel Plant for best quality production of Ingot , rods and bars.

4.4 Marketing Strategy:

The Marketing Strategy will be advertising the product in the media and by

company’s representatives by visiting various target clients and by making them

aware of the features, application and the type of technology used in production of

sponge iron in a stipulated time as required by them. Also by passing the tenders with

reasonable prices so that most of the companies can afford it we can sale the product.

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4.5 Technical Know-how Availability

The details of the project were made after analysing the increasing need for sponge

iron in the market by the leading steel industries. The availability of resources in the

large amount is the major cause of this project’s formation.

4.6 Raw Materials Required

Sponge iron manufacture is highly sensitive to raw material characteristics.

Therefore, it is essential to examine the chemical and physical characteristics of

raw materials, both individually and in combination. The basic raw materials for

the production of sponge iron are iron ore, non-coking coal and dolomite. Several

tests are conducted in the company laboratory to ascertain their suitability in a

rotary kiln.

1. Coal

Important factors determining coal quality are:

Chemical properties such as fixed carbon, ash content, volatile matter, etc.:

&

Physical properties viz, reactivity and ash fusion temperature.

The entire coal requirement for this project would be from Bihar.

2. Iron Ore

In sponge iron making, iron ore is reduced in solid state. Unlike in the conventional

steel melting processes, the gangue content of iron ore cannot be separated as a

slag. Therefore, it becomes imperative to select an ore with a high Fe content and a

low gangue content, to optimise yield during steel making. Apart from this, to

ensure a better kiln campaign life and output, the iron ore is made to undergo a

series of other tests viz. shatter, tumbler & abrasion indices, reducibility etc.

By virtue of its location, our project enjoys the proximity of good iron ore

reserves, suitable for sponge iron making, in the Northern part of Orissa. Its sources

of iron ore are from the Barsuan Mines, Kalta mines which has one of the finest

quality iron ore in the region.

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3. Dolomite

Dolomite acts in the process as a desulphuriser, removing sulphur from the feed

mix during the reduction process. It is mixed in small proportion along with other

raw materials before charging into the kiln.

4.7 Step By Step Description of the Manufacturing

Process from Raw Material to Finished Goods

(1) First of all the raw materials like the ores,coal etc are finely crushed by using

the crushers.

(2) The kilns have inlet feeders which consists of three substances namely Iron

ore, Dolomite and coal .

(3) The piston feeding of iron ore is 6 tonnes per hour .

(4) The piston feeding of coal is 3 tonnes per hour.

(5) The piston feeding for dolomite is 0.120 tonnes per hour.

(6) The outlet feeding is 2 tonnes of coal per hour.

(7) There are in all total 7 stages of temperature profile they are 1st zone - 750 C,

2nd zone - 850 C, 3rd zone - 920 C, 4th zone – 990 C, 5th zone – 1020 C, 6th

zone - 1030 C , 7th zone – 1040 C.

(8) After passing through the above stages of temperature in the kiln finally the

sponge iron is produced.

4.8 WORKING PRINCIPLE

In the rotary kiln considerable quantity of fines in the product between 3 and 5 mm in

size are generated which cannot be directly used in electric arc furnaces, because they

tend to get blown away while charging into the furnace. To overcome this problem

and to utilize this hitherto considered waste material, the Company engineered and

build a cold briquetting unit, the first of its kind in the country, for production of high

density Sponge Iron briquettes with improved carbon content a product ideally suited

as feed stock for electric arc furnace. Nearly 40% of heat energy is lost through waste

gases going up the stack in the rotary kiln process. Harnessing this wasted energy

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could result in generating enough electric power to fully meet the requirements of

both the Sponge Iron units, through out the year.

Quality specifications Sponge Iron lumps with the following specifications:

1. Size 3 to 20 mm (95% min)

2. Fe total 90% min

3. Fe metallic 81% min

4. Degree of metallization 88% min

5. Sulphur 0.045% max

6. Phosphorus 0.05% max

7. Carbon 0.1 to 0.3%

8. Non Magnetics 1.5% max

9. Packaging in HDPE bags only

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THE MEASURES TAKEN FOR ESTABLISHMENT

OF PLANT

a) Comprehensive testing of raw materials for the process.

b) Preparation of project report for an investment decision.

c) Basic and detailed engineering of the reduction unit and all the auxiliaries from raw

material preparation to storage and handling of finished products.

d) Preparation and selection of mechanical, electrical and instrumentation equipment

including refractories.

e) Inspection of equipment to ensure compliance of specifications and for meeting the

required standard from operational point of view.

f) Assistance in supervision of erection, start-up and commissioning.

g) Scheduling and monitoring the implementation of project with assistance in trouble

shooting during erection and commissioning.

h) Assistance in commissioning the plant and optimizing the plant operations.

i) Full performance guarantees for achieving rated capacity utilization.

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FLOWCHART OF MANUFACTURING PROCESS

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KILN OUTLETFeeding 2 tonnes of

Coal

6 tonnes per hour Iron ore

3 tonnes per hour Coal

0.120 tonnes per hour dolomite

KILN INLETIron ore, Dolomite

and Coal

7 Stages of temperature

Sponge Iron

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5. PRODUCTION SCHEDULE

5.1 No. of Working Days per Annum – 286 days.

5.2 No. of Working Shifts(8 hours) per Day – There are 3

shifts (namely A, B, C)

5.3 Installed Capacity (Annum) – 1,14,400 tonnes

5.1 Utilized Capacity (%) – 100

I - 2008 - 82

II - 2009 - 94

III - 2010 - 100

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6. DETAILS OF THE PROPOSED PROJECT

This Project is about the production of A grade quality of Sponge Iron by utilizing the

recent most technologies in the yielding of iron from its ores.

(A) LAND AND BUILDING:

Sr. No. Particular Area Required Total Value Remarks

1. 2.

LandBuilding

120 acers50 acers

Rs.62,72,64,000Rs.26,13,60,000

Sufficient land and Building used up.

Total: Rs.88,86,24,000

(B) MACHINERIES / EQUIPMENTS:

Sr. No. Description Nos. Required Rate(Rs.) Total Value(Rs.)

1. Kiln (furnace) 4 40,00,000 1,60,00,000

2. Coolers 4 22,50,000 90,00,000

3. Crushers 4 25,00,000 1,00,00,000

4. Electrostatic Precipitator

4 12,50,000 50,00,000

5. Computers 24 30,000 7,20,000

6. Printers 10 2,000 20,000

7. Scanners 5 2,500 12,500

Total: 4,07,52,500

(C) MISCELLANEOUS FIXED ASSETS:

Sr. No. Description Nos. Required Rate(Rs.) Total Value(Rs.)

1. Furniture T(40), C(40) 1,000 80,000

2. Coffee Maker

1 5,000 5,000

3. A.C. 10 20,000 2,00,000

4. Office tools 10 5,000 50,000

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Total: 3,35,000

(D) PRELIMINARY AND PRE OPERATIVE EXPENSES:

Sr. No. Particulars Amount (Rs.) Remarks1.

2.

3.

Interest during implementationEstablishmentExpensesStart-UpExpenses

2,50,00,000

45,00,00,000

50,00,00,000

Sufficient to establish

Misc. expenses Total

97,50,00,000

(E) SALES REVENUE:

Year Items Quantity sold per year Rate per unit(Rs.)

Sales realisation(Rs.)

2008 Sponge iron 1,44,000 tonnes 3,00,00,000 432000000000

(F) RAW MATERIAL (MONTHLY REQUIREMENT)

Sr. No. Items Quantity Rate(Rs.) Total Value(Rs.)

1. Iron ore 17,280 tonnes 4200 7,25,76,000

2. Coal 14,400 tonnes 3,500 5,04,00,000

3. A.C. 10 20,000 2,00,000

4. Office tools 10 5,000 50,000

Total: 12,32,26,000

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(G) UTILITIES – Monthly

Sr. No.

Particulars Annual Expenditure(Rs)

Remarks

1.2.3.4.

Power/ElectricityWaterCoal/Oil/StreamAny other item ( Misc.)

2,86,00030,00040,00020,000

2MW/day45 lakh gallons/month24,000 litres/month

Total 3,76,000

(H) MAN POWER (Salaries/Wages) - Monthly

Sr.No.

Particulars No. Wages/Salaries per Month(Rs.)

AnnualExpenses(Rs)

1.2.3.4.

SkilledSemi SkilledUnskilledOffice Staff

11015530030

15,000 – 35,00010,000 – 15,000

4,500 - 6,000 7,000 – 8,000

60,000 40,000 10,000 22,000

Total 64,87,500 1,32,000

(I) REPAIRS AND MAINTENANCE - Monthly:

Sr.No.

Particulars Amount(Rs)

1. Computer and Electronic goods 5,0002. Crusher maintenance 10,0003. ESP maintenance 15,0004. Vehicles 15,000

Total: 45,000

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(J) SELLING AND DISTRIBUTION EXPENSES - Monthly:

Sr.No

Particulars Amount(Rs.) Remarks

1.2.3.

4.

Publicity ExpensesTravelingFreightCommission

Total

1,10,0003,00,000

10,000 50,000

Sufficient for sale of product.

4,70,000

(K) ADMINISTRATIVE EXPENSES - Monthly:

Sr.No

Particulars Amount(Rs.) Remarks

1.2.3.

Stationery & PrintingPost/Telephone/FaxGuest Entertainment Expenses

Total

20,000 50,000 20,000

SufficientAmount

90,000

(L) INTEREST - Annual:

Loan Amount

(Rs)

Interest (Rs) Installment(Rs.) Balance(Rs.)

70,00,00,000 1,40,00,000 5,00,000 1,35,00,000

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(M) DEPRECIATION:

Sr.No.

Type of Asset Cost of Asset

Depreciation(WDV)

Amount(Rs.)

1. Buildings 23,13,60,000 10% 2,31,36,0002. Plant and

Machinery2,04,58,000 33% 67,51,140

3. Moulds and Equipments

4,07,52,000 50% 2,03,76,000

Total: 5,02,63,140

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7. WORKING CAPITAL (one month) / One cycle

Sr. No. ITEM Amount (Rs.)1.2.3.4.5.

Raw-MaterialSalary/LabourAdministrative expensesRepairs and maintenance expensesSelling and distribution expenses

12,32,26,000 64,87,500 90,000 45,000 4,70,000

8. TOTAL COST OF THE PROJECT

Sr. No. Particulars Total Value(Rs.)1.

2.

3.

4.

Fixed Capital

Working Capital margin

Preliminary & Pre-operative Expenses

Cost escalation & contingencies

10,00,00,000

13,03,18,500

97,50,00,000

10,00,00,000

Total 130,53,18,500

9. MEANS OF FINANCE

Sr. No. Particulars Amount(Rs.)

Remarks

1.

2.

Own Investment

Term Loan

50,00,00,000

70,00,00,000Some amount from

the sponsors.

Total: 120,00,00,000

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10. PROFITABILITY PROJECTIONS

Sr.No.

Particulars Amount(Rs)

1. Annual sale realization 432,00,00,00,0002. Cost of manufacturing and servicing 12,32,26,000A Annual working capital 13,03,18,500B Annual interest on loan 1,40,00,000C Annual depreciation 5,02,63,140

Total: 19,45,81,6403. Gross profit / Loss (A-B) 11,63,18,500

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11. BREAK EVEN POINT

Break Even Point = (Fixed Cost ) * 100 / (Fixed Cost + Profit )

The Fixed Cost is primarily associated with the cost that doesnot change with respect

to time which are fixed assets like land, building, machinery and equipments.

Break Even Point = (88,86,24,000) * 100 / (88,86,24,000 + 40752500)

= 95.61

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CONCLUSION

Thus we have formulated the action plan that takes both the short term and long term

goals into account, and good use of every resource. Accept, Adapt and Achieve; these

are the three watch words for success in today’s ever-changing situation. We would

stick to our goals inspite of the keen competitions in the market. Keeping in view the

needs and demands of our employees we would also try our level best to provide them

good facilities and yield good profit in the forthcoming years.

 

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REFERENCES

1. http://www.businessplan.com .

2. http://www.bplan.com

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