The document discusses the necessity for modernization in the construction industry, highlighting the environmental, safety, and cost benefits of utilizing ready-to-use cut and bend reinforcement bars (TMT bars). It outlines the cut and bend process, which involves using specialized machines to provide customized rebar shapes, thereby reducing waste, improving working conditions, and enhancing profitability. Financial projections for establishing a cut and bend service are included, detailing capital requirements, operational costs, and projected income, emphasizing the importance of timely delivery and efficiency in meeting customer demands.

1. 1
REPORT
ON
Ready to use Cut and Bend
Reinforcement Bars

2. 2
1. INTRODUCTION: -
There has been a long felt need to bring up speed in the field of construction,
which remain a core contributor to the growth of economy, but still suffers from
low productivity, higher costs and wastages. Unsafe working conditions and
resultant pollution are other areas of concern. This calls for modernization of
construction. As Construction is one of the pillars of domestic economy, but
currently suffering sue to Low Profitability & Margins.
The need has been felt mainly due to the following reasons
• Environmental benefits
• Safety & Health
• Improved working conditions
• Cost reduction/ Waste elimination
• Enhanced customer satisfaction
• Improved profitability
Environmental benefits:
Construction sites are prone to producing pollution in the form of dust, noise and
chemicals used for construction. Longer the duration of construction, bigger will
be the impact on the environment and will cause irritation and health related
hazards in the neighborhood.
Safety & Health
As mentioned above, a typical construction site is a hazardous site with dust,
noise and pilfered scrap pieces lying around. Deep holes dug for foundation work
and other material used cause health and safety hazard for the people working at
the site. By speeding up the process and removing even a part of hazardous
material can improve site operating conditions drastically
Improved working conditions
If construction activity is accelerated, the working condition can be improved by
focusing on site management and overall labor productivity can be improved.
Apart from this many construction sites functioning in metro cities do not have
enough space to organize such activity at site and therefore for such projects cut
& bend rebars in ready to use condition is only solution.
Cost reduction/ Waste elimination
This obviously has an impact on the reduction of the cost of project. Longer the
project takes for completion, higher would be the cost. By focusing on the core
construction activity and eliminating wasteful activities the cost can be lowered
and wastage can be reduced considerably

3. 3
Enhanced customer satisfaction
Since the project duration is reduced and the end customer can make use of the
buildings earlier, customer delight and satisfaction is increased and also increases
the probability of getting more business from same customers.
Improved profitability
With reduction in cost, shortening of schedules and overall improvement in
project execution, the obvious benefit is in the improvement in the profitability.
Clients are undiscriminating and still equate price with cost and select designers
and constructors almost exclusively based on lowest tendered price. Thus, in
order to get more business, it is imperative that construction agencies remain
competitive with low cost of project execution.
Projects are widely seen as unpredictable in terms of on time delivery, within
budget and to the standards of quality expected due to on site conditions
resulting in delays, cost over runs and at times compromised quality, and the
need of the hour is to turn around this situation by bringing focus on quality and
deliveries thereby controlling the over all cost
Drivers of change:
Focus on the customer - Activities which do not add value from the customer's
viewpoint are classified as waste and should be eliminated. Clients would become
much more demanding of construction in time to come.
Quality driven agenda - Quality means not only zero defects but right first time,
delivery on time and to budget, innovating for the benefit of the client and
stripping out waste, whether it be in design, materials or construction on site.
Integrating the process and the team around the product- the industry is
typically dealing with the project process as a series of sequential and largely
separate operations undertaken by individual designers, constructors and
suppliers who have no stake in the long-term success of the product and no
commitment to it. Changing this culture is fundamental to increasing efficiency
and quality in construction.
2. Cut & Bend TMT bars for ready use:-
Cut and Bend Process:
TMT bars provide required strength and shape to any RCC structure. However,
TMT bars are available in market in standard lengths of 12 meters and require
further cutting and bending as per the requirements of the project. This requires
considerable time, space & results in generation of scrap, which is estimated to
be around 3-5% apart from pilferage and damage/ obsolesce. Total cost of Rebar
usage is illustrated in the table1 below:

4. 4
Table 1.
Head Value (Rs/ton)
Base price 41,000
Labor cost @9735/ mon, 60 man hours/
ton 2,921
Scrap @ 5% 2,050
Scrap salvage@ 21000/PMT (1,050)
Pilferage/ obsolesce @2% 820
Inventory carrying cost @ 24% PA for 15
days 820
Yard expenses @ 1% 410
Total Additional cost 5,971
Source: Survey done by McKinsey & Company in 2015-16 and applicable taxes
are extra over the values shown.
The challenge is that in majority of the cases, the cutting and bending of the
rebars is manually done by unskilled labors at construction sites. It usually takes
around 60-man hours for cutting, bending and binding one tone of rebars. This
also generates scrap 5-7%, which needs to be stored separately and disposed
periodically causing losses. This being a manual process, the inaccuracy and
inefficiency rates are high. Slow rate of construction pushes up the construction
cost, increases pilferage of material at site and makes site hazardous due to
littering of scrap and cut pieces around the place.
The cut and bend production process Proposed is a comprehensive and technical
one. It aims to provide customized shapes of rebars that are needed at various
construction sites without customer going through hassles as listed above.
The process uses quality TMT bars to produce cut and bend TMT bars. It cuts &
bends them to precise dimensions & required angles in line with the
requirements of the customer, and as deliveries can be times in line with
customer’s production schedules, customers cab work comfortably with Just in
Time concept reducing their capital blocked up in unproductive stock of Rebars at
site. This also removes requirement of steel yard saving in space (which is at
premium in metros), possibility f theft and expenses incurred in maintaining the
stocks.
The Cut and Bend process involves the following machines-
Shear Line, Automatic Double Side Bending, Cutting and Bending machine,
Electronic Sheer, Automatic Double Head Bender, Automatic Stirrups and large
size bender and Bi-directional Bending Machine
3. PROCESS: -
The process uses quality TMT bars to produce cut and bend TMT bars in the
desired shapes as per reinforcement drawings. It cuts & bends them to precise
dimensions & required angles in line with the requirements of the customer.

5. 5
The Cut and Bend process involves various types of machines like-
Shear Line, Automatic Double Side Bending, Cutting and Bending machine,
Electronic Sheer, Automatic Double Head Bender, Automatic Stirrups and large
size bender and Bi-directional Bending Machine
4. Plant requirements: -
1. Cut & Bend Services require the following equipment’s
a. Shearing Equipment
b. Benders
c. Stirrup making machine
d. Couplers
e. Cage Making facility
f. Any other shape & size indicated by customer
It is learnt from the interaction that for the higher capacities, additional
equipment must be installed.
2. For a bending operation of 2500-3000 MT per month, area apparently required is
about 2-3 acres.
3. For doing volume of about 2500-3000 MT per month required inventory is about
1000-1500 MT with regular levels of ordering to replenish the stocks.
4. As understood from the offer received, for 2500-3000 MT per month operation,
the manpower requirement is about 70 (may be outsourced)
• Supervisor 1
• Draftsman for BBS 6
• Skilled Operators 16
• Crane operator 4
• Unskilled labor 43
Apart from above, one sales manager and adequate security staff is also required
5. The differential price for this service, as understood from industry, is about Rs
2500/ MT over the prevailing TMT price
6. The key success factor in this business is timely delivery. Customer gives the BBS
(Bar Bending Schedule) and Producer has to deliver the product in 5-6 days. The
site comes to a complete halt if the timelines are not met.
5. FINANCIAL ASPECTS: -
A. Land & Building-
The plant will need about 20,000 square feet of covered area for plant
machinery installation and another 20,000 square feet area for storing raw

6. 6
material for 15 days inventory. Estimated cost of land will be around 1.00
crore
B. Machinery & Equipment’s: -
In order to produce around 2500 tons per month, following machines will be
needed:
SHEAR LINE: Hydraulic shear line for TMT Rod Cutting with electrical motor
and the following accessories
• 3 Storage type racks on each side
• Feeding conveyor
• Measuring conveyor with both sides’ kickoff
• Roller track (Transfer of Cut bars to bender), double side
• Storage pockets on both sides with chains
• Panel board
DOUBLE BENDER (ROBO MASTER) – 36 mm capacity: Automatic Robo master
with conveyor table
STIRRUP MAKING MACHINE, HIGH SPEED MODEL. ARUNO 12 (6mm to
12mm) – Fully Automatic Stirrup Bending Machine for Straightening, Bending
and Cutting of TMT
Rod with electrical Servo Motor and accessories as follows.
• Panel Board.
• De coiling stand with brake system
MANUAL BENDING MACHINE 42 D (36 mm capacity) with electrical motor
MANUAL BENDING MACHINE 55 D (40 mm capacity) with electrical motor
MANUAL CUTTING MACHINE WITH ELECTRICAL MOTOR ( 40MM capacity)
Estimated cost of all the above machinery will be Rs 2.5 Crs approximately
Shed of 20000 square feet: Estimated cost will be approximately 150 lakhs
2 no’s of EOT cranes of 5-ton capacity 20 meter span: approximately 60 lakhs
One number mobile Hydra crane approximately 15 lakhs (can be rented)
Thus, total capital requirement will be approximately as under
COST OF PROJECT AMOUNT
(Rs. Lakhs)
LAND 100.00
LAND LEVELING & BUILDING SHED 192.50
EQUIPMENTS 315.00
OFFICE BUILDING & OTHERS 10.00
ELECTRIC CONNECTION 10.50
OTHER FIXED ASSETS 2.00
TOTAL COST OF PROJECT 630.00

7. 7
Working Capital Requirement (P.M.)
Assuming average cost of Raw material at Rs 47000/ PMT including GST, and
average inventory of 10 days (Approx. 750 tons) Valued at 3.5 Crs and as the
product is sold on 30-60 days credit. Approx. Value will be 11.5 Crs.
Considering these two aspects, Requirement of capital to keep the plant
functioning will be 15 Crs approx.
Other Contingent Expenses like telephone. Conveyance & travelling,
Stationary, Power and water charges, Stationary postage and other misc.
expenses etc. to be considered as lumpsum approx. Rs 15 lakhs/mon
Since interest on the working capital will be making heavy dent on the
profitability, suitable means of credit control and facilities like bill discounting
are recommended to reduce this burden.
Treatment of wastage and effluents
Since the operation is only cutting and shaping of bars already rolled, no liquid
discharge is envisaged. The process may generate some quantity of steel
scrap, which will be sold to the local scrap market periodically after salvaging
usable bars. Some negligible amount of mill scale and dust may get generated
(around 0.05%), which can be collected, bagged and disposed of to
prospective users. Used Oil and grease will be collected and disposed of to
prospective users who recycle them.

8. 8
Cost impact to the project
Considering a house construction project of Site Size: 30x50 feet site house construction
cost (Ground + 1, 3 BHK) up to 2125 Sq. ft built up area With Concrete Blocks, Total
House cost (Rs. 74.37 lakhs) and material cost is as per table below:
Total cost of house ownership 7,437,500
Materials Required Quantity Unit
Premium
Brand (Rs.)
Matl.
Cost
share
Overall
Cost
share
TMT Steel 7.6 Tonnes 357,200 29% 5%
Cement 930 Bags 337,590 27% 5%
Plastering M Sand 147 Tonnes 205,800 17% 3%
Concrete M Sand 65 Tonnes 61,750 5% 1%
40mm Jelly 513 Cft 12,825 1% 0%
20mm Jelly 2996 Cft 74,900 6% 1%
6" Concrete Block 3120 Blocks 156,000 13% 2%
4" Concrete Block 1040 Blocks 37,440 3% 1%
Total material cost 1,243,505
Traditional bending @
6000/ton
7.98 Tonnes 47,880 0.5% 0.6%
C&B @ 2500/ton 7.6 Tonnes 19,000 0.2% 0.3%
Saving due to C&B Tonnes 28,880 0.3% 0.4%
Source: https://www.materialtree.com/30-50-house-construction-cost/
From above calculations it may be seen while customer pays Rs. 19,000 extra for C&B
charges, actual saving by the customer is Rs. 28,880 and applicable taxes. Thus
customer doesn’t incur any additional expenses in using Cut & Bent Rabars. Added to
this saving are intangible benefits like quality, reduced pollution levels, wastage and
saving on account of shortened project execution time resulting in overall
improvement in project execution

9. 9
Project time line
Week 0 1 2 3 4 5 6 7 8 9 10 11 12
Sigining of
Consultancy
agreement
Preparation
of Project
feasibility
report
Application
for land
Sanctioning
of land &
initial
payment
Bhoomi Pooja &
Civil work
commencement
Shed
erection
Application
for financial
closure
Finalization
of civil
contractor
Application for
electric
connection
Electric
connection
Negotiation
with
equipment
supplier &
Ordering
Work order
for Job work
finalization
Shortlisting
for sales team
Recruitment Training
Order
booking
Servicing
of orders
Contacting prospective customers and presentations
A
c
t
i
v
i
t
y
Sales team candidate
search
Production of machinary at vendor's place and dispatch
Electric wiring
Civil work in progress
Receipt of
equipments
Equipment erection &
Commissioning
Expected duration of the project will be 12 weeks from beginning to
commissioning
Details of financial working
Table 1
Capital requirement and working capital needed
Break Even
1289
Capital cost Rs. Lakhs Rs. Lakhs Rs. Lakhs
Land 100.00 100.00 100.00
Shed+ Land development 150.00 150.00 150.00
Equipments 315.00 315.00 315.00
Electrical connection & Others 13.65 13.65 13.65
Office building & others 10.00 10.00 10.00
Boundary wall 1300 Feet, 8"X9'high @ 1700/ft 22.10 22.10 22.10
Hardfacing of land 5500m
3
, @350/cu Mtr 19.25 19.25 19.25
Total Capital 630.00 6.3 630.00 630.00
Int. on Capital @ 12% 75.60
Working capital Rs. Lakhs Int Rs. Lakhs Int Rs. Lakhs Int
30 days credit on orders serviced 646.43 6.5 752.25 7.5 1253.75 12.5
Stock @10 days, Rs. 40000/ton+ 18% GST 202.80 2.0 236.00 2.4 393.33 3.9
Total Working capital 849.24 8.5 988.25 9.9 1,647.08 16.5
Cut & Bend Project
Production/ Mon
25001500.00

10. 10
Table 2
Projected Working results of Steel center
Break even
1289
Head
Amount
(Rs. Lakhs/
month)
Amount
(Rs. Lakhs/
month)
Amount
(Rs. Lakhs/
month)
Income
From Sale of FG @ 2500/PMT 32.22 37.50 62.50
From sale of Scrap @ 25000/PMT, 1% Scrap 3.22 3.75 6.25
Total Income 35.45 41.25 68.75 a
Expenses
Operating expenses
Labor contract 20.62 24.00 40.00
Losses due to scrap generation @1% 4.90 5.70 9.50
Total Operating expenses 25.52 29.70 49.50 b
Fixed cost
Interest @12% on capital 6.30 6.30 6.30 c
Depreciation @ 10% on Machinary 2.63 2.63 2.63 d
Staff salaries (including security) 1.00 1.00 1.00 e
Total Fixed cost 9.93 9.93 9.93 f
EBIDTA 8.93 10.55 18.25 (a-b-e)
PBT - 1.63 9.33 (a-b-f)
Cut & Bend Project
Production/ Mon
25001500.00