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SAMAN WEERARATNE
MATERIALS TECHNOLOGY SECTION
INDUSTRIAL TECHNOLOGY INSTITUTE
COST EFFECTIVE ECO-FRIENDLY NOVEL RAIN GUARD
SEALANT BASED ON NATURAL PRODUCT, FOR APPLICATION
ON RUBBER TREES
WHY ITI DEVELOPED THIS NEW
SEALANT ?
Due to price increase in petroleum and petroleum based products,
the cost of tar and fluctuation of the price of rubber latex (two major
components of the conventional sealant) have gone up and it is not
degradable. Further, its life time when applied on trees is limited to
about one year and tar based sealant cracks and removes from the
tree in long term application. In responding to this crisis, ITI has
developed a novel sealant using locally available raw materials. The
major raw material production capacity of Sri Lanka is almost
sufficient to expand rain guard usage to 75% of total rubber trees in
the island.
Research & Development efforts
undertaken in relation to this work.
– Formulas including almost locally available raw
materials were tested.
– Laboratory tests : At ITI.
– Field tests: Sri Lanka Rubber Research Institute
(RRI) Estate, Agalawatta.& other two estates
located at Mathugama and Madulawa.
– Duration : From 2007 to 2012. Number of trees
tested : >150
Results based on field tests :
Comparison
CNSL based novel rain guard sealant
(Solutions)
• Degradable & eco-friendly
• No heating steps involve in preparation.
• Easy to prepare
• Polythene frock can be reused /recycled
• Able to bare extreme weather
conditions
• Can be applied during raining.
• Permits growth around girth of tree.
• Low cost- Rs 85/- per kg (retail selling )
• Active period is more than 01 year
• Major raw material is a renewable
product
Conventional sealant
(Problems)
• Non-degradable. Not eco-friendly. (tar
based)
• Heating is needed
• Not easy. Wants expertise
• Should be disposed.
• Melting & cracking
• Cannot be applied during raining.
• Liable to crack.
• ~140/- Rs per kg (selling price)
• Limited to one year
• Major raw material is not renewable
(tar).
New features:
• Resistant to fungal attack.
• Permits growth around the girth of rubber
tree ( due to elasticity ).
• Active period is more than two years when
attached to rubber tree.
• Can be used to repair conventional sealant
based rain guards.
• Recommended for small, medium, large scale
production
Profitability statement of novel rain guard
sealant application for rubber planters
• Retail price (conventional sealant) = Rs 140.00 per kg
• Average number of trees can be applied = ~16
• Retail price (novel sealant) = Rs 85.00
• Average number of trees can be applied per 01 kg = ~ 08 (minimum) - 10 (maximum)
• Hence, sealant cost per one tree (life time = 01 year)
• Conventional sealant = Rs 8.75
• New sealant = Rs 10.63 (08 trees/kg, basis) = Rs 8.50 (10 trees/kg, basis)
• The same for a life time of two years
• Conventional sealant = Rs 8.75 × 2
= Rs 17.50
• Therefore, profit generated by new sealant for 02 year application = Rs (17.50-10.63)
= Rs 6.87 per tree
(08 trees/kg, basis)
= Rs 9.00 per tree
(10 trees/kg, basis)
Profitability statement of novel rain guard sealant
application for rubber planters (Cont.)
• Profit generated by new sealant for 01 year application, with
respect to in situ production (within the plantation) cost (Rs
56.78) of new sealant = Rs (8.75-56.78/8)
= Rs 1.65 per tree
• For 02 years = Rs (17.50-56.78/8)
= Rs 10.40 per tree
PROFIT FOR TAPPER
• Loss of tapping days annually due to rain = 125
• Income of tapper = ~ Rs 500/ - per day
• Number of tapping days per year = ~220
• Therefore, annual income = 220 × 500 = Rs 10,000/-
• Additional income gained assuming minimum
of 90 days can be tapped using rain guards = 90 × 500
= Rs 45,000/-
• Therefore, increment of annual income of the tapper due
to rain guarding. = 45,000×100/110,000
= ~ 40%
Manufacture of novel rain guard sealant ( Medium
scale )
• Profitability statement 1styear
Rs
Total Sales Revenue 20,400,000
VAT 2,448,000
NBT (Manufacturing) 180,000
Operating Cost 13,628,000
Operating Profit 4,145,000
Profitability statement 1styear (Cont.)
• Internal Rate of Return of the Project -55.83%
• Retail selling price 50kg pack - Rs 4250.00
• Retail selling price 1kg - Rs 85.00
• Total production cost per 1kg - Rs 56.78
How this work will be sustainable in social,
environmental and economic terms.
(i) Social
1. Manufacturing process can also be done by
unskilled personnel even as a cottage industry with
low capital.
2. Tapper’s annual income can be increased by 40%.
(Rubber Development Department,2013).
How this work will be sustainable in social,
environmental and economic terms. (cont.)
(ii) Environmental -
1.No byproducts (toxic/hazardous) emit during
manufacture.
2. The waste is degradable after disposal.
3. Polythene rain guard apron can be reused or
recycled without incineration.
4. All of the raw materials are non/very low-
toxic .
How this work will be sustainable in social,
environmental and economic terms. (cont.)
(iii)Economic - (refer Annexure for calculations)
1.Avoids the use of tar (saves foreign exchange ~ Rs Mn
12.7/year.
2.Avoids the use of valuable field latex (a major component
of conventional sealant). (saves ~Rs Mn 8.8 per year to
rubber sector).
3.Annual income of tapper can be increased by 40%. (~Rs
45,000/-)
4.The value addition to agricultural byproduct used in new
sealant would generate additional income to the
particular organization/planter.(~Rs Mn 8.8 per year).
5. Suitable for SMEs as well as cottage level.
The technology intensity of this work
1. Principle of action : Polymerization.
2. Technology level : Manufacturing is not a high
tech process.
3. Formula is simple
4. Rain guarding using new sealant can be
done by giving initial training to laborers.
Protecting/managing (licensing etc.)
intellectual property rights (IPR) in relation to
this work.
1. Patent : NIPO Appl.No. 16943, Date applied:
19/11/2012.
2. Conception Record : 21/09/2011, ITI.
Short, medium and long term potential socio-
economic benefit. (refer Annexure for
calculations).
• Replacement of conventional sealant by new sealant
would save;
• 1 ~Rs Mn 12-15 per year (for currently rain guarded
10% of rubber trees)-( Short term )~Rs Mn 80-100 per
year (if 70% of the trees are rain guarded)- (Medium &
long term.
• 2 ~Rs Mn 8.8 per year for valuable rubber latex (Short
term) ~Rs Mn 60- (Medium & long term).
• 3 ~Rs Mn 8 annually by selling the major raw material
(Short term) ~Rs Mn 56-( Medium & long term).
• 4 Discussions are in progress for commercialization
through private/public partnerships.
Employment generation
• 15 factory workers for current requirements (for
SME).
Export potential
Local production potential of major ingredient is
~5000 MT per year which is 03 times more than the
requirement for entire local rubber plantation.
Therefore, it is possible to export the new sealant
produced using 1/5th of the of production potential
of above ingredient, at Rs 80/,per kg, which is
adequate for 4% of rubber plantation in Malaysia,
would generate ~ Rs Mn 80 /year.
Future plans to improve this work
A trial showed that the new sealant can also
be used as a water-proof gum and a letter
containing relevant evidences/observations is
attached herewith. (Annexure)
Link to national priorities
Mahinda Chinthana – Vision for the Future
1. Utilization of local raw materials & value addition will
be empowered.
2. Special incentives for commencement of new
industries, based on local raw materials. (page 70).
3. Annual production of rubber is planned to be increased
from137 Mn kg (2009) to 160 Mn kg (2015) and up to
190 Mn kg (2020), (page 44).
• (2015 target can be easily achieved by increasing rain
guard usage from 10%(current) to 70%.)
ANNEXTURE
• PROFIT BY AVOIDING USE OF TAR:
• Retail price of a barrel of tar (180L) = Rs 18,200/-
• Amount of tar in conventional sealant = 57.2%
• Number of rubber trees rain guarded in Sri Lanka = ~ 3.5 Million
• Number of rubber trees that can be rain guarded
using conventional sealant = ~16 per kg
• Therefore, amount of tar needed for rain guarding
annually = (3.5×106 ×57.2)//(16×100)
= 125,125 kg
• Therefore, cost of tar = 125125×18200/180
= ~Rs Mn 12.7 per year
ANNEXTURE
• PROFIT BY AVOIDING USE OF FIELD LATEX:
• Price of field latex = Rs 300/- per kg
(ref: Rubber Dev, Department)
• Amount of latex in conventional sealant = 13.4%
• Amount of field latex needed for current usage
of rain guarding = (3.5×106 × 13.4)/(16×100)
= 29312.5 kg
• Therefore, cost of field latex for the above = 29312.5×300
= ~ Rs Mn 8.8
ANNEXTURE
• PROFITABILITY FOR THE SRI LANKAN RUBBER SECTOR
GENERATED BY NEW SEALANT:
• Selling price of new sealant = Rs 85/- per kg
• Amount of new sealant needed for current usage
of rain guarding for 3.5 million rubber trees = ( 3.5×106)/8
= 437500 kg
• Therefore, cost for the above = Rs 37,187,500/- per two years (life
time of new sealant is ~02 years)
• Therefore, cost for the above for one year = Rs 18,593,750/-
• Cost for the above for the conventional sealant = Rs (3.5 ×106)×140/16
= Rs 30625000/- per year
• Therefore, the amount save by the use of new
rain guard sealant assuming 02 years life time = Rs(30625000-18593750)
= ~ Rs Mn 12 per year
(08 trees/kg, basis)
= ~ Rs Mn 15/Year (10 trees/kg, basis)
ANNEXTURE
• EXPORT POTENTIAL:
• Extent in Sri Lanka under tapping = 104,572 ha
(Rubber Dev. Dept.,Sri Lanka, 2013)
• Therefore, area under rain guarding = 104,572×10%
= 10457.2 ha
• Major raw material of new sealant needed for the
above = 161,000 kg
• Area under rubber cultivation in Malaysia = 1,635,000 ha
• Therefore, 4% of the above = 65,400 ha
• Therefore, major raw material of new sealant
needed for the above = 65,400×161,000/10457.2
= 1,006,904 kg
= ~ 5,000,000×1/5 kg (local annual
production potential is 5,000 MT)
AS WATER-PROOF SEALANT- LETTER OF CERTIFICATION
RESEARCH TEAM
Saman Weeraratne, D S Samarawickrama,
R C W Arachchie, A S K de Alwis, J T S
Motha, Dr K P A Senaratne
Thank YouTHANK YOU
Cost estimation for Rain guard sealant
Manufacture.
Production capacity 1000 kg/day (8 hour shift)
20 working days per month
Total production capacity per year 240000 kg
Pack size 50kg (4800 packs per year)
Rs.
Plant & Equipment 121,900
Pre-operational
Expenses(for technology)
500,000
Contingencies (2%) 12,438
Working Capital 2,495,101
Total 3,129,439
Plant and Machinery
Machinery Qty
Unit price
LKR
Weighing
Balance
1 25,000
Concrete
mixing
machine
1 75,000
Polythene
sealer
1 15,000
Total 115,000
Additional 1.06 121,900
Material Qty/kg Wastage
Actual
Qty/kg
Unit
Price in
LKR
Total
price in
LKR
Compo
nent A
88,320 3% 90,969 100
9096,90
0
Compo
nent B
136,080 3% 140,162 19 266,385
Compo
nent C
4,800 3% 4,944 120 593,290
Total Cost For raw materials
12,353,
325
Raw material cost for 50kg pack 2,573
Material Cost for one year production
Manpower recruitment
(8 hour shift per day)
Position
No. of
Employ
ees
Monthl
y
Remun
eration
Total
Monthl
y
Remun
eration
EPF &
ETF
Total
Cost
Per
Month
Unskilled
labourers
5 12,000 60,000 9,000 69,000
Drivers 1 18,000 18,000 2,700 20,700
Total 89,700
Factory overheard per year
Rs
Salaries & Wages
(Unskilled Labourers)
828,000
Utilities 10,000
Spare parts & Maint. 1,000
Transport 75,000
Depreciation 63,000
Plant Insurance 1,000
Miscellaneous 40,000
Total 1018,000
Rs
Salaries &
Wage(Driver)
248,000
Telephone , Fax 4,000
Stationery Postage 2,000
Office Maintenance 2,000
Total 256,000
Sales / Administration
Overheads per year
Particulars Rs
Total Material
Cost
12353,000
Total Production
O/H
1018,000
Total Sales/Admin.
O/H
256,000
Operating Cost 13628,000
Annual production cost estimate
Working capital calculation
1. Production is 12 months per annum
2. Cash Generation is only after two weeks of production
3. Materials 1 months stock
4. Finished goods 15 days stock
5. Production Overheads 30 days cover
6. Sales & Administration Overheads 30 days cover
Particulars Rs
Accounts
receivable
850,000
Materials 1,029,000
Finished goods 515,000
Production O/h 80,000
Sales/Admin O/h 21,000
Working capital 2,495,000
Rs
Total Sales
Revenue
20,400,000
VAT 2,448,000
NBT
(Manufacturing)
180,000
Operating Cost 13,628,000
Operating Profit 4,145,000
Profitability statement 1styear
Profitability statement 1styear
Rs
Total Sales
Revenue
20,400,000
VAT 2,448,000
NBT
(Manufacturing)
180,000
Operating Cost 13,628,000
Operating Profit 4,145,000
•Internal Rate of Return of the Project 5.83%
•Retail selling price 50kg pack - Rs 250.00
•Retail selling price 1kg - Rs 85.00
-Total production cost per 1kg - Rs 56.78

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SAMAN-presentn-Rubber Plts Ascoc.

  • 1. SAMAN WEERARATNE MATERIALS TECHNOLOGY SECTION INDUSTRIAL TECHNOLOGY INSTITUTE COST EFFECTIVE ECO-FRIENDLY NOVEL RAIN GUARD SEALANT BASED ON NATURAL PRODUCT, FOR APPLICATION ON RUBBER TREES
  • 2. WHY ITI DEVELOPED THIS NEW SEALANT ? Due to price increase in petroleum and petroleum based products, the cost of tar and fluctuation of the price of rubber latex (two major components of the conventional sealant) have gone up and it is not degradable. Further, its life time when applied on trees is limited to about one year and tar based sealant cracks and removes from the tree in long term application. In responding to this crisis, ITI has developed a novel sealant using locally available raw materials. The major raw material production capacity of Sri Lanka is almost sufficient to expand rain guard usage to 75% of total rubber trees in the island.
  • 3. Research & Development efforts undertaken in relation to this work. – Formulas including almost locally available raw materials were tested. – Laboratory tests : At ITI. – Field tests: Sri Lanka Rubber Research Institute (RRI) Estate, Agalawatta.& other two estates located at Mathugama and Madulawa. – Duration : From 2007 to 2012. Number of trees tested : >150
  • 4. Results based on field tests : Comparison CNSL based novel rain guard sealant (Solutions) • Degradable & eco-friendly • No heating steps involve in preparation. • Easy to prepare • Polythene frock can be reused /recycled • Able to bare extreme weather conditions • Can be applied during raining. • Permits growth around girth of tree. • Low cost- Rs 85/- per kg (retail selling ) • Active period is more than 01 year • Major raw material is a renewable product Conventional sealant (Problems) • Non-degradable. Not eco-friendly. (tar based) • Heating is needed • Not easy. Wants expertise • Should be disposed. • Melting & cracking • Cannot be applied during raining. • Liable to crack. • ~140/- Rs per kg (selling price) • Limited to one year • Major raw material is not renewable (tar).
  • 5. New features: • Resistant to fungal attack. • Permits growth around the girth of rubber tree ( due to elasticity ). • Active period is more than two years when attached to rubber tree. • Can be used to repair conventional sealant based rain guards. • Recommended for small, medium, large scale production
  • 6. Profitability statement of novel rain guard sealant application for rubber planters • Retail price (conventional sealant) = Rs 140.00 per kg • Average number of trees can be applied = ~16 • Retail price (novel sealant) = Rs 85.00 • Average number of trees can be applied per 01 kg = ~ 08 (minimum) - 10 (maximum) • Hence, sealant cost per one tree (life time = 01 year) • Conventional sealant = Rs 8.75 • New sealant = Rs 10.63 (08 trees/kg, basis) = Rs 8.50 (10 trees/kg, basis) • The same for a life time of two years • Conventional sealant = Rs 8.75 × 2 = Rs 17.50 • Therefore, profit generated by new sealant for 02 year application = Rs (17.50-10.63) = Rs 6.87 per tree (08 trees/kg, basis) = Rs 9.00 per tree (10 trees/kg, basis)
  • 7. Profitability statement of novel rain guard sealant application for rubber planters (Cont.) • Profit generated by new sealant for 01 year application, with respect to in situ production (within the plantation) cost (Rs 56.78) of new sealant = Rs (8.75-56.78/8) = Rs 1.65 per tree • For 02 years = Rs (17.50-56.78/8) = Rs 10.40 per tree
  • 8. PROFIT FOR TAPPER • Loss of tapping days annually due to rain = 125 • Income of tapper = ~ Rs 500/ - per day • Number of tapping days per year = ~220 • Therefore, annual income = 220 × 500 = Rs 10,000/- • Additional income gained assuming minimum of 90 days can be tapped using rain guards = 90 × 500 = Rs 45,000/- • Therefore, increment of annual income of the tapper due to rain guarding. = 45,000×100/110,000 = ~ 40%
  • 9. Manufacture of novel rain guard sealant ( Medium scale ) • Profitability statement 1styear Rs Total Sales Revenue 20,400,000 VAT 2,448,000 NBT (Manufacturing) 180,000 Operating Cost 13,628,000 Operating Profit 4,145,000
  • 10. Profitability statement 1styear (Cont.) • Internal Rate of Return of the Project -55.83% • Retail selling price 50kg pack - Rs 4250.00 • Retail selling price 1kg - Rs 85.00 • Total production cost per 1kg - Rs 56.78
  • 11. How this work will be sustainable in social, environmental and economic terms. (i) Social 1. Manufacturing process can also be done by unskilled personnel even as a cottage industry with low capital. 2. Tapper’s annual income can be increased by 40%. (Rubber Development Department,2013).
  • 12. How this work will be sustainable in social, environmental and economic terms. (cont.) (ii) Environmental - 1.No byproducts (toxic/hazardous) emit during manufacture. 2. The waste is degradable after disposal. 3. Polythene rain guard apron can be reused or recycled without incineration. 4. All of the raw materials are non/very low- toxic .
  • 13. How this work will be sustainable in social, environmental and economic terms. (cont.) (iii)Economic - (refer Annexure for calculations) 1.Avoids the use of tar (saves foreign exchange ~ Rs Mn 12.7/year. 2.Avoids the use of valuable field latex (a major component of conventional sealant). (saves ~Rs Mn 8.8 per year to rubber sector). 3.Annual income of tapper can be increased by 40%. (~Rs 45,000/-) 4.The value addition to agricultural byproduct used in new sealant would generate additional income to the particular organization/planter.(~Rs Mn 8.8 per year). 5. Suitable for SMEs as well as cottage level.
  • 14. The technology intensity of this work 1. Principle of action : Polymerization. 2. Technology level : Manufacturing is not a high tech process. 3. Formula is simple 4. Rain guarding using new sealant can be done by giving initial training to laborers.
  • 15. Protecting/managing (licensing etc.) intellectual property rights (IPR) in relation to this work. 1. Patent : NIPO Appl.No. 16943, Date applied: 19/11/2012. 2. Conception Record : 21/09/2011, ITI.
  • 16. Short, medium and long term potential socio- economic benefit. (refer Annexure for calculations). • Replacement of conventional sealant by new sealant would save; • 1 ~Rs Mn 12-15 per year (for currently rain guarded 10% of rubber trees)-( Short term )~Rs Mn 80-100 per year (if 70% of the trees are rain guarded)- (Medium & long term. • 2 ~Rs Mn 8.8 per year for valuable rubber latex (Short term) ~Rs Mn 60- (Medium & long term). • 3 ~Rs Mn 8 annually by selling the major raw material (Short term) ~Rs Mn 56-( Medium & long term). • 4 Discussions are in progress for commercialization through private/public partnerships.
  • 17. Employment generation • 15 factory workers for current requirements (for SME).
  • 18. Export potential Local production potential of major ingredient is ~5000 MT per year which is 03 times more than the requirement for entire local rubber plantation. Therefore, it is possible to export the new sealant produced using 1/5th of the of production potential of above ingredient, at Rs 80/,per kg, which is adequate for 4% of rubber plantation in Malaysia, would generate ~ Rs Mn 80 /year.
  • 19. Future plans to improve this work A trial showed that the new sealant can also be used as a water-proof gum and a letter containing relevant evidences/observations is attached herewith. (Annexure)
  • 20. Link to national priorities Mahinda Chinthana – Vision for the Future 1. Utilization of local raw materials & value addition will be empowered. 2. Special incentives for commencement of new industries, based on local raw materials. (page 70). 3. Annual production of rubber is planned to be increased from137 Mn kg (2009) to 160 Mn kg (2015) and up to 190 Mn kg (2020), (page 44). • (2015 target can be easily achieved by increasing rain guard usage from 10%(current) to 70%.)
  • 21. ANNEXTURE • PROFIT BY AVOIDING USE OF TAR: • Retail price of a barrel of tar (180L) = Rs 18,200/- • Amount of tar in conventional sealant = 57.2% • Number of rubber trees rain guarded in Sri Lanka = ~ 3.5 Million • Number of rubber trees that can be rain guarded using conventional sealant = ~16 per kg • Therefore, amount of tar needed for rain guarding annually = (3.5×106 ×57.2)//(16×100) = 125,125 kg • Therefore, cost of tar = 125125×18200/180 = ~Rs Mn 12.7 per year
  • 22. ANNEXTURE • PROFIT BY AVOIDING USE OF FIELD LATEX: • Price of field latex = Rs 300/- per kg (ref: Rubber Dev, Department) • Amount of latex in conventional sealant = 13.4% • Amount of field latex needed for current usage of rain guarding = (3.5×106 × 13.4)/(16×100) = 29312.5 kg • Therefore, cost of field latex for the above = 29312.5×300 = ~ Rs Mn 8.8
  • 23. ANNEXTURE • PROFITABILITY FOR THE SRI LANKAN RUBBER SECTOR GENERATED BY NEW SEALANT: • Selling price of new sealant = Rs 85/- per kg • Amount of new sealant needed for current usage of rain guarding for 3.5 million rubber trees = ( 3.5×106)/8 = 437500 kg • Therefore, cost for the above = Rs 37,187,500/- per two years (life time of new sealant is ~02 years) • Therefore, cost for the above for one year = Rs 18,593,750/- • Cost for the above for the conventional sealant = Rs (3.5 ×106)×140/16 = Rs 30625000/- per year • Therefore, the amount save by the use of new rain guard sealant assuming 02 years life time = Rs(30625000-18593750) = ~ Rs Mn 12 per year (08 trees/kg, basis) = ~ Rs Mn 15/Year (10 trees/kg, basis)
  • 24. ANNEXTURE • EXPORT POTENTIAL: • Extent in Sri Lanka under tapping = 104,572 ha (Rubber Dev. Dept.,Sri Lanka, 2013) • Therefore, area under rain guarding = 104,572×10% = 10457.2 ha • Major raw material of new sealant needed for the above = 161,000 kg • Area under rubber cultivation in Malaysia = 1,635,000 ha • Therefore, 4% of the above = 65,400 ha • Therefore, major raw material of new sealant needed for the above = 65,400×161,000/10457.2 = 1,006,904 kg = ~ 5,000,000×1/5 kg (local annual production potential is 5,000 MT)
  • 25. AS WATER-PROOF SEALANT- LETTER OF CERTIFICATION
  • 26. RESEARCH TEAM Saman Weeraratne, D S Samarawickrama, R C W Arachchie, A S K de Alwis, J T S Motha, Dr K P A Senaratne
  • 28.
  • 29. Cost estimation for Rain guard sealant Manufacture. Production capacity 1000 kg/day (8 hour shift) 20 working days per month Total production capacity per year 240000 kg Pack size 50kg (4800 packs per year) Rs. Plant & Equipment 121,900 Pre-operational Expenses(for technology) 500,000 Contingencies (2%) 12,438 Working Capital 2,495,101 Total 3,129,439
  • 30. Plant and Machinery Machinery Qty Unit price LKR Weighing Balance 1 25,000 Concrete mixing machine 1 75,000 Polythene sealer 1 15,000 Total 115,000 Additional 1.06 121,900
  • 31. Material Qty/kg Wastage Actual Qty/kg Unit Price in LKR Total price in LKR Compo nent A 88,320 3% 90,969 100 9096,90 0 Compo nent B 136,080 3% 140,162 19 266,385 Compo nent C 4,800 3% 4,944 120 593,290 Total Cost For raw materials 12,353, 325 Raw material cost for 50kg pack 2,573 Material Cost for one year production
  • 32. Manpower recruitment (8 hour shift per day) Position No. of Employ ees Monthl y Remun eration Total Monthl y Remun eration EPF & ETF Total Cost Per Month Unskilled labourers 5 12,000 60,000 9,000 69,000 Drivers 1 18,000 18,000 2,700 20,700 Total 89,700
  • 33. Factory overheard per year Rs Salaries & Wages (Unskilled Labourers) 828,000 Utilities 10,000 Spare parts & Maint. 1,000 Transport 75,000 Depreciation 63,000 Plant Insurance 1,000 Miscellaneous 40,000 Total 1018,000
  • 34. Rs Salaries & Wage(Driver) 248,000 Telephone , Fax 4,000 Stationery Postage 2,000 Office Maintenance 2,000 Total 256,000 Sales / Administration Overheads per year
  • 35. Particulars Rs Total Material Cost 12353,000 Total Production O/H 1018,000 Total Sales/Admin. O/H 256,000 Operating Cost 13628,000 Annual production cost estimate
  • 36. Working capital calculation 1. Production is 12 months per annum 2. Cash Generation is only after two weeks of production 3. Materials 1 months stock 4. Finished goods 15 days stock 5. Production Overheads 30 days cover 6. Sales & Administration Overheads 30 days cover
  • 37. Particulars Rs Accounts receivable 850,000 Materials 1,029,000 Finished goods 515,000 Production O/h 80,000 Sales/Admin O/h 21,000 Working capital 2,495,000
  • 38. Rs Total Sales Revenue 20,400,000 VAT 2,448,000 NBT (Manufacturing) 180,000 Operating Cost 13,628,000 Operating Profit 4,145,000 Profitability statement 1styear
  • 39. Profitability statement 1styear Rs Total Sales Revenue 20,400,000 VAT 2,448,000 NBT (Manufacturing) 180,000 Operating Cost 13,628,000 Operating Profit 4,145,000
  • 40. •Internal Rate of Return of the Project 5.83% •Retail selling price 50kg pack - Rs 250.00 •Retail selling price 1kg - Rs 85.00 -Total production cost per 1kg - Rs 56.78