Adirtha steel furniture
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feasibility report on Manufacture of Steel Furniture industry

feasibility report on Manufacture of Steel Furniture industry

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Adirtha steel furniture Document Transcript

  • 1. 1SUMMARY
  • 2. 2 I. SUMMARY OF THE PROJECT1. Name of the items : Steel furnishers2. Name of the unit : Adirtha Steel Furniture Address : Betkuchi, Bhetapara Guwahati3. Telephone No : Office : 0361-2365019, +91-9706328817 Factory: 0361-2365020, +91-99547510274. Name of the promoter : Mr. Partha Pratim Mahanta Khanapara, Guwahati-7810225. Constitution of the firm : Sole Proprietorship6. Qualification : DEGREE YEAR INSTITUTE/UNIVERSITY B.COM (Management) 2011 K.C.Das Commerce College, Gauhati UniversityMBA (Marketing & Finance) 2013 North Eastern Regional Institute of Management (NERIM), Dibrugarh University 7. Work Experience : NAME OF THE ITEMS MANUFACTURED DURATION ORGANISATION Modern Steel Furniture and Steel Furniture 3 years Engineering (MSFE) Guwahati
  • 3. 38. Family background : Name and address of the units/ items manufactured Mr. Hem Chandra Talukdar, Proprietor of Modern Steel Furniture and Engineering (MSFE) Pathsala, Barpeta- Phone No: +91-9678235249 (M) +91-9864607083 (M)9. Proposed location : Factory : Mr. Amarendra Mahanta Betkuchi, Bhetapara Guwahati Show Room : Ranee Bazar, Joyanagar, Guwahati-78102210. Estimated Project Cost : Rs. 24.50 Lakhs11. Name and Address : IDBI Bank of the Bank : Branch: Pan Bazar Guwahati- 78100112. Scheme of the Loan : Funding Under Credit Guarantee Scheme for Micro and Small Enterprises (CGMSE)13. Sanction Loan Amount : 20.00 Lakhs14. Interest Rate : Interest Rate linked to Base Rate15. Repayable Period : 7 years16. Rate of Return on Total : 22.91 % Capital Investment17. Break-Even Point : 65.44 %
  • 4. 4ECONOMICVIABILITY
  • 5. 5 I. ECONOMIC VIABILITY AND MARKETABILITYINTRODUCTION: The rapid development of steel capacity is indeed a logical corollary ofany program of rapid industrialization for a developing country. Steel is used as a basicmaterial in the manufacture of metal products, electrical machinery. To Jawahar lal Nehru,the first Prime Minister of India, steel was a symbol of the strength of the economy, and aportent of the glory of India of the future.India has many intrinsic advantages in the production of steel. Some of the richest iron oremines with the highest iron content are to be found in India. What is more, coal and iron oreare found in close proximity to each other. In fact at one time, the cost of production of steelin India was much lower than in other countries.The growth of the steel industry is summarized in the given below Table. From 1950-51 to2009-10, there was rapid growth of production of steel in India. As a result of which, thedemand for steel products has been grown-up. The government planning provides a helpinghand towards the growth of production of steel in India. However at the time when the TenthPlan was formulated, there was general slowdown in the major steel consuming sectors.There were also restrictions imposed by major steel importing countries. (million tones) YEAR FINISHED STEEL 1950-51 1.0 1980-81 6.8 1990-91 9.6 2000-01 30.3 2007-08 56.1 2008-09 57.2 2009-10 59.7Source: Economic Survey, 2010-11. RBI handbook of Statistics on the Indian Economy (2009-10)
  • 6. 6SCOPE: Fancy furniture showrooms are mushrooming across urban India as young,upwardly mobile professionals splurge on luxurious living room sets, baroque bedroombasics and stylish kitchens. The spurt in real estate activity and burgeoning growth in theinformation technology and services sectors has led to a mammoth increase in demand forSteel furniture in India.International consulting firm Technopak Advisors estimates that the steel furniture market inIndia is likely to witness a compound annual growth rate (CAGR) of about 30 per cent overthe next three years. In fact, global steel furniture industry research and consulting firm, CSILMilano has classified India as one of the 14 largest steel furniture markets in the world.India‟s rapidly expanding economy is seeing growing affluence, both in urban and ruralareas. The tremendous growth of the mass media is also resulting in millions of middle-classIndians aspiring for better lifestyles. Furniture-makers are catering to the urban middle classneed for stylish homes in compact apartments.The non-organised sector, which accounts for nearly 85 per cent of the furniture made inIndia, mostly uses wood as a raw material for the home segment, while the organised sectorproduces wooden, metal and steel furniture mainly for office use. Increasingly, moulded steelfurniture, iron furniture, board furniture and even bamboo are gaining in popularity.The Indian construction industry, ranked twelfth in the world, is experiencing maximumgrowth and in turn, has created a huge demand for steel furniture and allied products. InIndia, the home furniture segment accounts for 65 per cent of the furniture market, the officesegment about 20 per cent and garden furniture the remaining.With the Indian economy and the real estate sector continuing to grow at a phenomenal pace,demand for office and home furniture is expected to expand.
  • 7. 7MARKETABILITY: The demands for these items are increasing day by day due todevelopment of living standards in rural and urban areas. There is a good demand for theseitems mainly for offices, institutions, commercial places in all areas, towns/big villages.Proposed Selling Arrangement: The furniture produced from the “Adirtha Steel Furniture.”will be distributed by our own showroom and to various distributor of Steel furniture acrossthe entire North-east and mostly in greater Guwahati.Target Places: 1. Guwahati:  Dispur  Ganeshguri  Zoo-road  Maligaon  Beltola  Chandmari  Geetanagar  Hatigaon  Azara  Lakhtokia 2. Entire North-East (in some extent)Target Customers:  Corporate houses  Offices  Flats  Upper and Middle Class Families
  • 8. 8 TECHNICALFEASIBILITY
  • 9. 9 II. TECHNICAL FEASIBILITYMANUFACTURING PROCESS: The manufacturing process of steel furniture‟sinvolves mainly cutting of sheets, tubes, flats to desired size, folding, bending, drilling,punching, riveting and assembling as per the drawings. Finally, the items are to be spraypainted. Steel Raw Cutting Bending Polishing Acid Bath Final Product Figure: 1 MANUFACTURING PROCESS OF STEEL FURNITURE
  • 10. 10SPECIFICATION:ADDRESS: BUREAU OF INDIAN STANDARDS Manak Bhavan 9 Bahadur Shah Zafar Marg IN-New Delhi 110002 Tel: +91 11 23 23 79 91 Fax: +91 11 23 23 93 99 E-mail: ird@bis.org.in Web: www.bis.org.inINDIAN STANDARD INSITUTE (ISI)INTERNATIONAL ORGANISATION FOR STANDARDIZATION - ISO:9001:2008, ISO:14001:2004 certifiedThe Adirtha Steel furniture will be made with the best quality CRCA sheets as per INDIANSTANDARD INSITUTE (ISI) standard and International Organization for Standardization(ISO). It ensures durability & sturdiness of the product. The CRCA sheets used for productare chemically treated with 8 tank pre-treatment processes like de-rusting, degreasing & zincphosphatising, which make product rust-free and long lasting. All Adirtha steel furniture willbe powder coated & oven baked with the help of electrostatic instruments this make productscratch resistant & superior in finish. All Adirtha steel furniture will be provided with ourown „ADIRTHA‟ 7 lever locks for added security.
  • 11. 11PLANT ECONOMICS Shift Per Day 1 Working Days Per Annum 300 Turnover Per Month Steel Almirah (8 Gaze) 10 Show Case 15COMPONENTS TO BE PURCHASED FROM OUTSIDE S.NO. NAME OF THE QUANTITY SPECIFICATION COMPONENT1. Mirror and Glasses 25 Mirror as per the size and glass for other utilities2. Designing materials 25 Handles, Hanger etc
  • 12. 12INSTALLED CAPACITY: S.NO. NAME OF THE QUANTITY COMPONENT 1. Lathe Machine 30 2. Welding Machine 30 3. Sheet Bending 30PROPOSED CAPACITY TO BE UTILISED S.NO. NAME OF THE QUANTITY COMPONENT 1. Lathe Machine 25 2. Welding Machine 25 3. Sheet Bending 25MOTIVE POWER REQUIREMENT (Approximately) S.NO. NAME OF THE VALUE COMPONENT 1. Electricity 6, 500 2. Diesel 1, 500
  • 13. 13 FINANCIALFEASIBILITY
  • 14. 14 III. FINANCIAL FEASIBILITY1. FIXED CAPITAL: LAND AND BUILDING S.No. Particulars Amount (Rs.) 1. Land 3600 sq. f @ Rs. 12.00 Lakhs per kottah 12, 30, 000.00 2. Boundary walls and other expenses 56, 000.00 3. Working Shed 1820 sq. f @ Rs. 65/sq. ft 1, 20,120.00 4. Office 96 sq. ft. @ Rs. 115/sq. ft. 11,040.00 5. Show Room 66, 000.00 6. Registration (AIDC) 10, 000.00 TOTAL 14, 93, 160.00 OFFICE AND SHOWROOM FURNITURE S.No. Particulars Amount (Rs.) 1. Office Furniture 5, 000.00 2. Showroom Furniture 25, 000.00 TOTAL 30, 000.00
  • 15. 15PLANT AND MACHINERY (Quotation has been attach) S.No. Particulars Quantity Rate (Rs) Amount (Rs.)1. Lathe Machine - 6ft 1 1,65, 000.00 1,65, 000.00 2. Welding Machine 350 AMP 1 16, 850.00 16, 850.00 Capacity3. Sheet Bending Machine – 7ft 1 51, 500.00 51, 500.004. Grinding Machine – 4ft 1 6, 500.00 6, 500.005. Bench grinding Machine - 1 6, 150.00 6, 150.00 150 mm6. Stand Drill Machine – 1ft 1 16, 500.00 16, 500.007. Gas welding and with set 1 8, 500.00 8, 500.008. Spray painting Machine – 1hp 1 19, 880.00 19, 880.00 200 lbs9. Loose tools and installation L.S 29, 880.00 29, 088.00 @10%10. Electrification L.S 20, 000.00 20, 000.00 TOTAL 3, 39, 968.00 Total Fixed Capital: Land and Building = Rs. 14, 93, 160.00 Office and Show Room Furniture = Rs. 30, 000.00 Plant and Machinery = Rs. 3, 39, 968.00 Total = Rs. 18, 63,128.00
  • 16. 162. WORKING CAPITAL RAW MATERIALS COMPONENTS REQUIREMENT (MONTHLY) S.No. Particulars Unit Quantity Total Cost Cost/Kg Required (Rs.) (Kg) 1. CRCA Sheets 60.00 800.00 48, 000.00 2. Angle Flat Channel etc. 50.00 550.00 27, 500.00 3. Welding Electrodes 2, 500.00 5 Case 12, 500.00 4. Primer/Red oxide 2, 700.00 60.00 8, 100.00 5. Paint/Putty 2, 800.00 70.00 5, 600.00 6. Fittings and Extra 1, 500.00 L.S 1, 500.00 Charge TOTAL 1, 03, 200.00 STAFF AND LABOUR (MONTHLY) S.No. Category Nos. Salary/Wages (Rs.) Total Amount (Rs.) 1. Manager 1 12, 000.00 12, 000.00 2. Sales Executive 1 8, 000.00 8, 000.00 3. Store Manager 2 4, 500.00 9, 000.00 4. Skilled Worker 2 4,000.00 8, 000.00 5. Semi-Skilled Worker 4 3, 000.00 12, 000.00 6. Accountant 1 6, 000.00 6, 000.00 7. Chowkidar/Peon 2 2, 000.00 4, 000.00 TOTAL 59, 000.00
  • 17. 17UTILITIES AND OVERHEADS (MONTHLY) S.No. Particulars Amount (Rs.)1. Rent (Show Room) 8, 000.002. Power Electricity (Both in Industry and Show- 6, 500.00 Room)3. Diesel 1, 500.004. Tools Replacement 2, 500.005. Stationery and Telephone 1, 000.006. Tax License and Insurance 1, 500.007. Repair and Maintenances 1, 200.008. Travelling Expenses 1, 000.009. Carriage (Inward/Outward) 3, 000.0010. Advertisement and Publicity 500.0011. Office Expenses/ Contingency 1, 500.0012. Miscellaneous Expenses 500.00 TOTAL 28, 700.00Total Working Capital Required (Monthly): Raw Materials = Rs. 1, 03, 200.00 Salaries and Wages = Rs. 59, 000.00 Utilities and Overheads = Rs. 28, 700.00 Total = Rs. 1, 90, 900.00
  • 18. 183. TOTAL CAPITAL INVESTMENT S.No. Particulars Amount (Rs.) 1. Fixed Capital 18, 63, 128.00 2. Working Capital for three months 5, 72, 700.00 (3 × Working Capital / Month) TOTAL 24, 35, 828.004. COST OF PRODUCTION PER MONTH S.No. Particulars Amount (Rs.) 1. Working Capital 1, 90, 900.00 2. Interest @ 18 % per annum on Total Capital 36, 537.42 24,35,828 ×18 Investment ( ) 100 ×12 3. Depreciation Land and Building @ 5 % 6, 221.50 14,93,160×5 ( 100 ×12 ) Plant and Machinery @ 15% per annum for 1 month 4, 249.60 3,39,968 × 15 ( 100 × 12 ) Office and Show room furniture and equipment @ 500.00 20% per annum for 1 month 30,000 × 20 ( 100 × 12 ) TOTAL 2, 38, 408.52
  • 19. 195. SALES TURNOVER (MONTHLY) S.No. Particulars Quantity Rate (Rs) Amount (Rs.) 1. Steel Almirah (18 Gaze) 10.00 15, 000.00 1, 50, 000.00 2. Steel Show case 15.00 9, 000.00 1, 35, 000.00 TOTAL 2, 85, 000.006. PROFITABILITY (MONTHLY) Particulars Amount (Rs) Sales Revenue 2, 85, 000.00 Sales Revenue = Rs. 2, 85, 000.00 Less: Cost of Production 2, 38, 500.00 TOTAL 46, 500.00 Profitability Profit Per Month = Rs. 46, 500.00 Profit Per Annum (46, 500 × 12) = Rs. 5, 58, 000.00
  • 20. 207. PROJECT RATIOS Profit (a) Percentage Return of Sales Turnover = Sales Revenue 46,500 = × 100 2,85,000 = 16.32 % Profit Per Year (b) Rate of Return on Total Capital Investment = Total Investment 5,58,000 = × 100 24,35,828 = 22.91 %8. FIXED COST Interest on Total Capital Investment = Rs. 36, 538.00 Depreciation on Land and Building = Rs. 6, 222.00 Depreciation on Plant and Machinery = Rs. 4, 250.00 Depreciation on Office and Show-Room Furniture = Rs. 500.00 Rent = Rs. 8, 000.00 50 % Power Electricity = Rs. 3, 250.00 40 % of Salary and Wages = Rs. 23, 600.00 40 % of Overheads = Rs. 5, 680.00 TOTAL FIXED COST = Rs. 88, 040.00 Fixed Cost9. BREAK-EVEN POINT (BEP) = Fixed Cost +Profit 88,040 = × 100 88,040+46,500 = 65. 44 %
  • 21. 21ANNEXURE
  • 22. 22 ANNEXURE IADDRESSES OF MACHINERY SUPPLIERS1. Ravinder Engineering House AT Road, Guwahati, Assam- 781001 Phone: 0361- 25458692. Tirupati Tools and Machinery AT Road, Guwahati, Assam- 781001 Phone: 0361- 25483873. Nilachal Machines and Tools SJ. Road, Athgaon, Guwahati, Assam - 7810014. D.G Machineries AT Road, Guwahati, Assam- 781001 Phone: +91- 92070235235. Janata Machineries Stores Pvt. Ltd. AT Road, Guwahati, Assam- 781001 Phone: 0361- 25465906. Humdard Engineering Works AT Road, Guwahati, Assam- 781001 Phone: 0361- 2548193
  • 23. 23 ANNEXURE IIADRESSES OF RAW MATERIAL SUPPLIERS1. Apana Trunk Factory SJ. Road, Athgaon, Guwahati, Assam – 781001 Phone: 0361- 25454352. Associated Iron & Steel Co. Bhanuka Complex Block, SJ. Road, Athgaon, Guwahati, Assam – 781001 Phone: 0361- 2739039 / 25423813. Pawan Steel SJ. Road, Athgaon, Guwahati, Assam – 781001 Phone: 0361-27319414. Steel Sales Corporation SJ. Road, Athgaon, Guwahati, Assam - 7810015. Apna Sail Shop SJ. Road, Athgaon, Guwahati, Assam – 7810016. Kamrup Steel Traders SJ. Road, Athgaon, Guwahati, Assam - 781001