report

1. DETERGENTSOAP INDUSTRY
COMPANY SUMMARY
The company is to be co founded at Patrapada, Bhubaneswar. Harmony Soaps Pvt Ltd is an
enterprise company engaged in manufacturing detergent soaps. In our country, people in villages
are accustomed to washing clothes near rivers and ponds using cakes by scrubbing and applying
mild force. Detergent cakes or bars are suitable for this purpose and are becoming popular both in
the villages and urban areas. This is detergent in cake form, which can be used with hand as well as
in soft water.
START UP SUMMARY
Start up of the company will require a capital of Rs. 16,80,000 of which Rs. 10,00,000 will come as
loan from Syndicate Bank and the rest Rs. 6,80,000 will be provided by the founders. Approximately
Rs. 80,000 will be allocated to equipments.
COMPANY LOCATION AND FACILITIES
The plant is to be located at Patrapada, Bhubaneswar, Orissa for now. Upon expansion, plants will
move to different locations within the state as well outside it.
SERVICE DESCRIPTIONS
The aim of the company is to provide this product throughout the state and country by widening of
distribution channels.

2. DETERGENTSOAP INDUSTRY
INTRODUCTION TO ENTREPRENEURSHIP
The word ‘entrepreneur’ has its origin in the French language. It refers to the ORGANISER OF
MUSICAL or OTHER ENTERTAINMENTS. ENTREPRENURSHIP can be described as a creative
&innovative response to the environment. Such responses can takes place in any field of social
Endeavour-business, agriculture, education, social work the like.
An ENTREPRENEUR is one who organizes, manages & assumes the risks of an enterprise.
An entrepreneur visualizes a business, takes bold steps to establish under taking, co-ordinates the
various factors of production gives it a start.
ENTREPRENEURS are the owners of the business who contribute the capital & bear the risk
of uncertainties in business life.
ENTREPRENEUR is action-orient & highly motivated person who has the ability to evaluate
business opportunities, to gather the necessary resources to take advantage of them &to intimate
appropriate action to ensure success.
ENTREPRENEUR takes decision regarding what to produce, where to produce & whom to
produce. He mobilizes other factors of production namely; land, labour, capital, organization &
initiates production process. He is responsible for either profit or the loss.
ENTREPRENEUR is associated with innovations. He is the main factor of production.

3. DETERGENTSOAP INDUSTRY
ENTREPRENEURIAL PHILOSOPHY
 To take calculated risk.
 Willingness to accept responsibility for one’s own work
 Failure must be accepted as a learning experience.
 Goal orientedness.
 Acceptable results are more important than perfect results.
 Personal growth.
EXPECTATIONS OF ENTREPRENEURSHIP
It is expected from the entrepreneurs that they will help:-
 Increase number of industries.
 Increase production.
 Increase employment opportunities.
 Earn foreign exchange through exports.
 Develop the underdeveloped parts of the country.
 Economical development.
CHARACTERSTICS OF ENTREPRENEUR
 Self confidence
 Task-result oriented
 Risk-taker
 Leadership
 Originality
 Future oriented

4. DETERGENTSOAP INDUSTRY
ROLE OF FIs & BANKS IN SSI FINANCING
The credit needs of entrepreneurs could be divided in three parts:
 Short term
 Medium term
 Long term finance
Accordingly, the conventional mechanism for financing of SSIs in India stressed provision of terms
loans and working capital.
The public and private sector banks, Small Industries Development Bank of India (SIDBI), Regional
Rural Banks (RRBs), Urban Cooperative Banks (UCBs) and foreign loans for setting up of new
industries or modernization of the existing ones, Khadi and Village Industries Commission (KVIC)
and Khadi and Village Industries Boards (KVIBs) assist in financing khadi and village industry
sector. National Small Industries Corporation (NSIC) and State Small Industries Corporations
(SSICs) in their own way, also attempt to develop the cottage and small scale sector by supplying
machinery on a hire-purchase basis to small-scale and ancillary industries, inclusion of the value of
machinery and equipment already installed.
SFCs are one of the oldest credit institutions in the country which mainly cater to the long term
credit needs of small & medium enterprises. At present, there are 18 SFCs covering the entire
country & they have been in existence for 5 decades now. The cumulative sanctions &
disbursements of SFCs aggregated Rs 33000 crore & Rs 27000 crore respectively. It needs to be
high lighted that almost 75% of SFCs assistance flows to the SSI sector. Over the years the
financial health of SFCs has become a cause of concerns. Some of the reasons for the poor
financial health of SFCs are poor recovery performance increase in non performing assets.
Govt. of India had amended the SFCs act 1951 in the year 2000 so as to give them more operational
flexibility & freedom so that they can improve their performance & play their role more effectively.

5. DETERGENTSOAP INDUSTRY
CHALLENGES FOR ENTREPRENEURSHIP PROJECT:-
1. Technology up gradation:-
It is found that our small scale sector is not able to compete because of outdated technology.
We must appreciate that small scale industry has to keep itself updated and then only it can sell
goods. In the post WTO era, the best thing would be available anywhere in the world as there is no
restriction for goods to move. People will purchase only if the goods are of good quality.
We must remember that we may or may not need imported technology for up gradation. Our
small industries have the advantage of developing in import substitution period. Many SSI can
therefore become world class with only small modifications or improvement.
2. Testing facilities: -
Because our small scale industries are situated in far flung areas there for it is not possible
to service by one or two central laboratory. We suggest that educational institution even in small
towns should be equipped to provide testing facilities to small scale industries.
3. Exports: -
We find that small scale industries engaged in exports do not have any benefits, although
they count for bulk export. We strongly advocate special concessions for small scale industries,
which are engaged in exports.

6. DETERGENTSOAP INDUSTRY
4. Involvement of Industrial Associations:-
We feel that many problems of small sector can be taken care of if industrial associations are
involved in a big way.
5. Infrastructure Development:
Small scale industries suffer maximum from lack of infrastructure development. The quality
of power is bad and the power available is at very high cost. This must be corrected. Roads are bad.
Communication facilities are not up to mark etc.
6. Credit: -
The credit is still not available to small scale industries. The credit Guarantee Fund created
by SIDBI is not being exploited as there are still short coming in the scheme.
7. Skill Up gradation: -
Small scale Industries are known for providing on job training. But in the post WTO era when
cost cutting is order of the day, the people are running small scale industries must be skilled and
these skills must be up graded continuously so that they are in the job & no unemployment results.
8. Marketing:-

7. DETERGENTSOAP INDUSTRY
The present market assistance scheme is most welcome. More such schemes are required
.Small Scale Industries are being bundled out of the market by aggressive advertisement done by
large scale& multinationals. The small sector must be protected from this, if the small sector has to
survive.
9. Changing the Labour Laws:-
The present labour laws must be changed to have more flexibility & suitability for running of
small scale sector.
Products Applications,
Market Potential
Basis and Presumptions
Traditionally, soap has been manufactured from alkali (lye) and animal fats (tallow), although
vegetable products such as palm oil and coconut oil can be substituted for tallow. American
colonists had both major ingredients of soap in abundance and so soap making began in America
during the earliest colonial days. Tallow came as a by-product of slaughtering animals for meat, or
from whaling. Farmers produced alkali as a by-product of clearing their land; until the nineteenth
century wood ashes served as the major source of lye. The soap manufacturing process was
simple, and most farmers could thus make their own soap at home.
The major uses for soap were in the household, for washing clothes and for toilet soap, and in
textile manufacturing, particularly for fulling, cleansing, and scouring woolen stuffs. Because
colonial America was rural, soap making remained widely dispersed, and no large producers
emerged. By the eve of the American Revolution, however, the colonies had developed a minor

8. DETERGENTSOAP INDUSTRY
export market; in 1770 they sent more than 86,000 pounds of soap worth £2,165 to the West Indies.
The Revolution interrupted this trade, and it never recovered.
The growth of cities and the textile industry in the early nineteenth century increased soap usage
and stimulated the rise of soap-making firms. By 1840, Cincinnati, then the largest meatpacking
center in the United States, had become the leading soap-making city as well. The city boasted at
least seventeen soap factories, including Procter and Gamble (established 1837), which was
destined to become the nation's dominant firm. A major change in soap making occurred in the
1840s when manufacturers began to replace lye made from wood ashes with soda ash, a lye made
through a chemical process. Almost all soap makers also produced tallow candles, which for many
was their major business. The firms made soap in enormous slabs, and these were sold to grocers,
who sliced the product like cheese for individual consumers. There were no brands, no advertising
was directed at consumers, and most soap factories remained small before the Civil War.
The period between the end of the Civil War and 1900 brought major changes to the soap industry.
The market for candles diminished sharply, and soap makers discontinued that business. At the
same time, competition rose. Many soap makers began to brand their products and to introduce
new varieties of toilet soap made with such exotic ingredients as palm oil and coconut oil.
Advertising, at first modest but constantly increasing, became the major innovation. In 1893 Procter
and Gamble spent $125,000 to promote Ivory soap, and by 1905 the sales budget for that product
alone exceeded $400,000. Advertising proved amazingly effective. In 1900 soap makers
concentrated their advertising in newspapers but also advertised in streetcars and trains. Quick to
recognize the communications revolution, the soap industry pioneered in radio advertising,
particularly by developing daytime serial dramas. Procter and Gamble originated Ma Perkins, one of
the earliest, most successful, and most long-lived of the genre that came to be known as Soap
Operas, to advertise its Oxydol soap in 1933. By 1962 major soap firms spent approximately $250
million per year for advertising, of which 90 percent was television advertising. In 1966, three out of
the top five television advertisers were soap makers, and Procter and Gamble was television's
biggest sponsor, spending $161 million.

9. DETERGENTSOAP INDUSTRY
Advertising put large soap makers at a competitive advantage, and by the late 1920s three firms
had come to dominate the industry: (1) Colgate-Palmolive-Peet, incorporated as such in 1928 in
New York State, although originally founded by William Colgate in 1807; (2) Lever Brothers, an
English company that developed a full line of heavily advertised soaps in the nineteenth century
and in 1897 and 1899 purchased factories in Boston and Philadelphia; and (3) Procter and Gamble.
Synthetic detergent, which was not a soap, but was made through a chemical synthesis that
substituted fatty alcohols for animal fats, had been developed in Germany during World War I to
alleviate a tallow shortage. Detergents are superior to soap in certain industrial processes, such as
the making of textile finishes. They work better in hard water, and they eliminate the soap curd
responsible for "bathtub rings." In 1933 Procter and Gamble introduced a pioneer detergent, Dreft,
which targeted the dishwashing market because it was too light for laundering clothes. It
succeeded, especially in hard-water regions, until World War II interrupted detergent marketing.
In 1940 the "big three"—Colgate, Lever, and Procter and Gamble—controlled about 75 percent of
the soap and detergent market. They produced a wide variety of products, such as shampoos,
dishwashing detergents, liquid cleaners, and toilet soap, but the most important part of their
business was heavy-duty laundry soap, which accounted for about two-thirds of sales. Procter and
Gamble had about 34 percent of the market. Lever was a close second with 30 percent, and Colgate
trailed with 11 percent. In 1946 Procter and Gamble radically shifted the balance in its favor when it
introduced Tide, the first heavy-duty laundry detergent. By 1949, Tide had captured 25 percent of
the laundry-detergent market. By 1956, even though Lever and Colgate had developed detergents of
their own, Procter and Gamble held 57 percent of the market, as compared with 17 percent for Lever
and 11 percent for Colgate. Despite Procter and Gamble's triumph, the big three still competed
fiercely.
By 1972, detergents had almost eliminated soap from the laundry market, although toilet soap
remained unchallenged by detergents. In the 1970s, bans on detergents by some local
governments, which feared contamination of their water supplies, had little impact on the
composition or sales of laundry products. In the early 2000s, the smaller firms within the industry
still produced a multitude of specialized cleansers for home and industry, although in the highly

10. DETERGENTSOAP INDUSTRY
important fields of toilet soaps, laundry soaps, and detergents, the big three remained dominant,
controlling about 80 percent of the total market.
The following ingredients are often used in hand dishwashing soaps and detergents; not all
products contain all ingredients.
INGREDIENTS
• Cleaning Agents/Surfactants lift dirt and soil and produce good grease-cutting capability.
• Stability and Dispensing Aids keep the product consistent under varying storage conditions and
provide desirable dispensing characteristics.
• Mildness Additives may include moisturizing agents, certain oils and emollients, certain protein
compounds, or other neutralizing or beneficial ingredients.
• Fragrance is added to produce a pleasant or distinctive scent.
• Preservatives help prevent any microbiological growth in the product that could cause color or
odor change, poor performance and/or separation of the ingredients.
• Colorants are added to lend individuality and an appealing appearance to the product.
• Enzymes help break down tough stains and burned-on soils.
• Encapsulates deliver stability for special materials/additives (e.g., moisturizer or fragrance).

11. DETERGENTSOAP INDUSTRY
BASIS AND PRESUMPTIONS
1. Single shift of 8 hours a day, 25 days a month and 300 days in an year is presumed.
Efficient machines and workers are also presumed.
2. The quantity of products produced are sold in the market.
3. Labour rates are as per the prevailing rates.
4. An average interest rate of 18% is considered.
5. The estimates are drawn for a production capacity generally considered techno-
economically viable for model type of manufacturing activity.
6. The information supplied is based on a standard type of manufacturing activity viable for
model type of manufacturing activity.
7. The information supplied is based on a standard type of manufacturing activity utilising
conventional techniques of production at optimum level of performance.
8. Costs in respect of land and building, machinery and equipment, raw materials and the
selling prices of the finished products etc., are generally prevailing at the time of
preparation of the project profiles and may vary depending upon various factors.

12. DETERGENTSOAP INDUSTRY
FINANCIAL ASPECTS
FIXED CAPITAL
MACHINERY AND EQUIPMENT
Sl. No. Details Qty Value (in Rs.)
1 Detergent plodder with 5 HP Motor 1 47,000
2 Sigma blender (350 Kgs. capacity) 1 15,000
3 Stamping machine 1 5,000
4 Platform weighing scale 1 5,000
5 Miscellaneous expenditure 3,000
6 Furniture and fixture 5,000
Total 80,000
1 Land 5000sqft 500000
2 Godown 3000sqft 1100000
3 Loan 12% of 10lakhs 120000
4 Machinery And Equipment 80000
Total 18,00,000
TotalFIXED COST per kg of production of soap: Rs. 18,00,000

13. DETERGENTSOAP INDUSTRY
WORKING CAPITAL PER MONTH
PERSONNEL
Sl. No. Description Nos.
Value per kg
production
1 Skilled Worker 2 1.5
2 Semiskilled Worker 2 1.25
3 Watchman 1 0.3
Total 3.05
RAW MATERIALS
Sl. No. Particulars Qty.(Kg.) Rate(Rs./Kg.) Value (Rs.)
1 Oil 100 32 3200
2 Soda Ash 16 38 608
3 Water 50
4 Sodium silicate (binder) 100 9 900
5 Filler powder 50 3.25 162.5
6 Foam booster 2 120 240
7 Color 0.5 500 250
8 Perfume 0.2 200 40
Total 318.7 ≈ 315 5400
Costof raw materials to produce 1kg of soap:Rs.17.14

14. DETERGENTSOAP INDUSTRY

15. DETERGENTSOAP INDUSTRY
UTILITIES
Sl.
No.
Particulars Cost per month
Cost per kg of
production
1 Power 5000 0.5
2 Water 200 0.02
Total 1,700 0.52
OTHER EXPENSES
1 Postage and Stationery 400 0.04
2 Repairs and Maintenance 400 0.04
Total 800 0.08
DEPRICIATION
10% of Rs.12000 per month: Rs.0.06 per kg of production of soaps
TotalVARIABLE COST per kg of production of soap:
3.05+17.14+.52+0.08+0.06= Rs.20.85

16. DETERGENTSOAP INDUSTRY
TOTAL SALES (Per Annum)
By sale of 1,20,000 kg @ Rs. 30 per kg Rs. 36,00,000
PROFITABILITY (Per Annum)
Profit =36,00,000 – 20,56,800 – 1,20,000(interest on loan)= Rs. 14,23,200
Net Profit Ratio : Net profit x 100 / Turnover
14,23,200 * 100 / 36,00,000
= 39.53%
Rate of Return : Net profit x 100 / Total Investment
14,23,200x 100 / 18,00,000
= 79.06%

17. DETERGENTSOAP INDUSTRY
BREAK EVEN ANALYSIS
Sales price = Rs. 30 per kg
Variable cost = Rs. 20.85 per kg
Fixed cost = Rs. 18,00,000
Break Even Quantity = X
Fixed Cost + X * Variable Cost = X * Sales Price
18,00,000 + X * 20.85 = X * 30
X = 196721 kg
Taking 10,000 kg per month production capacity,
No. of months required to achieve Break-Even Quantity = 196721/10000 = 19.67 ≈ 20 months

18. DETERGENTSOAP INDUSTRY
Address of Suppliers
NAMES AND ADDRESSES OF MACHINERY AND EQUIPMENT SUPPLIERS
1. M/s Prototype Development and Training Centre, P.O. Okhla Industrial Estate, New Delhi –
110 020.
2. M/s Precision Machinists, Plot No. 356(D), Kandivli, Industrial Estate, Kandivli, Bombay –
400 067
3. M/s Steel & Brass Trading Corporation, Nirman Nagar, Kesar Baugh, Plot No. 116/17,
Bhavanagar – 364 001.
4. M/s Oriental Machinery Supplying Co. Ltd., Mission road Extension, Calcutta.
NAMES AND ADDRESSES OF RAW MATERIAL SUPPLIERS
1. M/s S.P. Chemical, Plot No. 4, Kengeri, Mysore Road, Bangalore.
2. M/s Surcoats (India), C-29. Royal Industrial Estate, 5-B Naigaum Cross Road, Wadala,
Bombay – 400 031
3. M/s Supertex (India) Corporation, 132, Dr.A.B. Road, Bombay – 53.
4. M/s Saibaba Sugandh Bhandar, 53, Santhusapet, Bangalore – 53
5. M/s M.M. Chemicals, A.S. Char Street, Bangalore – 53
6. M/s Prakash Chemical Agency, Purnaseshachar Street, Behind Chickpet Post, Bangalore –
53.

19. DETERGENTSOAP INDUSTRY
REFERENCES
 Bhalla Industries, Mancheswar, Bhubaneswar
 www.smallindustryindia.com
 www.wikipedia.org
 www.codissa.com
 www.books-directory-projectreports.com/small-scale-industries.html