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Aluminium Fabrications
PRODUCT CODE QUALITY AND STANDARDS PRODUCTION CAPACITY : 335908004 : As Per IS 1948:1961 and IS1949:1961 : Qty. Value Qty. Value Qty. Value : (a) Stair Case Hand Rails 9,000 sq. ft. : Rs. 11,25,000 : (b) Doors 12,000 sq. ft : Rs. 12,00,000 : (c) Windows 13,000 sq. ft : Rs. 11,70,000

MONTH AND YEAR OF PREPARATION PREPARED BY

: March, 2003 : Small Industries Service Institute New Colony, Rayagada - 765004, (Orissa)

INTRODUCTION
Aluminium fabricated items like doors, windows, staircase hand rails and supports, railings for verandas, corridors etc. have become the generally accepted feature in most modern buildings. The use of aluminium in business and office complexes, buildings, theatres as well as decorative purposes is very common. Similarly in residential buildings also aluminium doors, windows, railings, grill-works etc. are used extensively. Textile shops and other trading shops built in lighter materials too are going in for shelves made of aluminium for stocking purposes. The advantages of aluminium such as light weight, strength, corrosion

resistance, durability, easy in fabrication, attractive appearance and easy maintenance make it a popular material for use in modern buildings. Aluminium required for use in buildings is available from large scale manufacturers such as Indal, Balco, Jindal etc. as extruded sections in various shapes and sizes for specific uses. These sections are also available through their local dealers. The usual length of these sections is 12 feet/4 meters. Fabricators anodise these to desired colours and fabricate the items as per the customers requirements. These items have good appearance and finish and the maintenance expenses are almost nil while steel and wooden items require regular painting and polishing periodically.

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MARKET POTENTIAL
The development and construction activities being inter-linked, there is good scope for aluminium fabrication units for meeting the growing demand of new buildings for offices, business and shopping complexes, theatres etc. Aluminium fabricated and anodised items like doors, windows, railings, staircases, shelves, ladders etc. are being increasingly used in the modern constructions on consideration of durability and appearance. If the present trend is any guide, theatres, restaurants, hotels, shopping complexes, office premises and other luxurious buildings will fast replace wooden materials with aluminium fabricated items. The consumption of these items is already on the increase.

more than 10 years. The repayment of term loans will be made in 5 years after one year moratorium. 7. The unit is proposed to function in own building. 8. Cost of machinery and equipment has been taken as per the rates quoted by machinery manufacturers/suppliers.

IMPLEMENTATION SCHEDULE
Sl.No. Name of Activity
1. Preparation of project report: (a) Calling Quotations (b) Scheme Preparation 2. Provisional Registration as SSI 3. Financial arrangement from financial institutions and others 4. Purchase and procurement of machinery and equipment 5. Erection and electrification 6. Recruitment of personnel 5 weeks 2 weeks 1 week 12 weeks

Period

B ASIS AND PRESUMPTIONS

1. The production of the unit is worked out on the basis of single shift of 8 hours a day for 300 working days a year. The unit is expected to work at 70% efficiency in the first year. 2. The unit is expected to achieve 80% production capacity in the second year onwards. 3. Wages for labour etc. have been taken as per the rate prevailing at the time of preparation of the project profile. 4. Interest rate is calculated @ 16% on Capital Investment. 5. Entrepreneur has to raise 25% of the capital investment as margin money. 6. Considering the product and usage, the project can last for

8 weeks 3 weeks 4 weeks

Some activities shown above can be undertaken simultaneously in order to minimise the period of completion of the project.

TECHNICAL ASPECTS
Process of Manufacture Manufacturing process involves anodising the aluminium extruded sections first and then fabrication. Anodising process involves buffing, pickling in acid solution, then cleaning in water, neutralising in acid and keeping the extruded sections in anodising tank for specified time. After anodising, the sections are to be fabricated as per the design and sizes of the customer by cutting, drilling, bending, welding,

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screwing, riveting, assembling with glasses and beading, wherever necessary. Handles locks etc. are also fitted as per requirements. Production Capacity (per annum)
Items Stair Case Hand Rails Doors Windows Quantity 9,000 sq. ft 12,000 sq. ft 13,000 sq. ft Value (In Rs.) 11,25,000 12,00,000 11,70,000

Energy Conservation Energy consumption of this unit is on the low side since the lower powered motors are used in the production activity. The workers of the unit should be made aware of the need to conserve energy by switching off the energy sources when not required.

FINANCIAL ASPECTS
A. Fixed Capital
(i) Land And Building (i) Land 500 sq. mtr. @ Rs. 150 per sq. mtr including registration (ii) Cost of land development, fencing, approach road, inside roads, land scaping, drainage etc. @ Rs. 150 per sq. mtr. (iii) Total built-up area 350 sq. mtrs. as follows: Administrative building 75 sq. mtrs. construction cost @ Rs. 2,500 per sq. mtr. Factory shed 200 sq. mtrs. construction cost @ Rs.1,500 per sq. mtr. Stores, staff canteen etc. 75 sq. mtrs. @ Rs. 2,000 per sq. mtr. Total (ii) Machinery and Equipments Sl. Description No. 1. Heavy duty cut off machine with 2 HP motor, starter etc. 2. TIG Welding M/c. with all accessories 3. Anodising plant complete with rectifier 500 Amps 30 volts, complete with necessary tanks of 14 ft. length and initial chemical Qty. 1 Amount (In Rs.) 25,000 1,87,500 Amount (In Rs.) 75,000

Quality Control and Standards IS 1948:1961 specifies requirements regarding materials, fabrication and dimensions of aluminium doors, windows and ventilators manufactured from extruded aluminium alloy sections of standard sizes and designs completed with fittings ready for fixing with buildings. This standard does not cover the requirements for industrial doors, windows and ventilators. IS 1949:1961 deals with aluminium windows suitable for use in industrial buildings. Aluminium doors, windows, stair case hand rails etc. are made as per the customers specifications and requirements. Workmanship and high finish are main criteria for these kind of products. Care should be taken in joining and assembling to get better appearance and finish. Pollution Control The anodising process using acid solution may leave residual solution which has to be disposed off periodically. The local Pollution Control Board may be consulted for appropriate method of disposal of these solutions.

75,000

3,00,000

1,50,000

7,87,500

1 1

1,10,000 3,00,000

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Sl. Description No. 4. Buffing machine with 2 HP motors 5. Drilling machine 12 mm cap. with 0.5 HP motor 6. Double ended bench grinder 200 mm with 0.75 H.P. motor 7. Hand Tools 8. Portable Electric Drill 9. Office furniture and equipments 10. Erection and installation charges Total (iii)Pre-operative expenses Total Fixed Capital (i+ii+iii) Total Qty. 2 1 1 Amount (In Rs.) 12,000 9,000 3,000 Sl. Description No. 6. 2" 1" section 7. Aluminium wire 2 mm for welding 8. Handle section for doors 9. Clips 10. Glass sheet 3 mm/ 4.5 mm thick 11. Chemicals for anodising 12. Misc. items such as hinges, screw, rubber beading, tower bolts, locks, wooden plug etc. Total (iii) Utilities Water L.S. Total Qty. Amount (In Rs.) 1200 ft. 18,000 2000 ft. 60 ft. 4,000 1,200

4200 ft. 14,000 1920 ft. 28,800 LS 5,000

2 -

10,000 5,000 15,000 15,000 5,04,000 15,000 5,19,000 13,06,500

LS 15,000

1,57,000 Amount (In Rs.) 9,000 1,000 10,000

Electricity - 2,000 units @ Rs. 4.50 unit

B. Working Capital (per month)

(i) Personnel Sl. Designation No. 1. Manager 2. Superviser 3. Skilled Worker 5. Helper 6. Accountant/Clerk 7. Field Workman 8. Peon/Watchman Nos. 1 1 3 4 1 3 1 Total Salary (Rs.) 4,500 3,000 2,100 1,500 900 2,400 1,500 1,500 Amount (In Rs.) 4,500 3,000 6,300 9,000 3,600 2,400 4,500 1,500 34,800 5,220 40,020 40,000

(iv) Other Contingent Expenses Amount (In Rs.) 1. Postage, stationery and other office services 2. Consumable stores, tools, repair and maintenance 3. Transport and conveyance 4. Advertisement and sales promotion 5. Insurance 6. Miscellaneous Total 5,000 10,000 5,000 5,000 1,000 4,000 30,000

4. Semi-skilled Worker 6

(v) Total Recurring Expenditure (per month)(In Rs.) (i) Personnel (ii) Raw material (iii) Utilities (iv) Other Contingent Expenses Total 40,000 1,57,000 10,000 30,000 2,37,000

Employees benefits @ 15%

Total or Say (ii) Raw Materials Sl. Description No. 1. Book type hand rails 4" size 2. 1" square pipe 3. Flats 2" width 1/8" thick 4. 4 " section 5. 2 1" section

Qty. Amount (In Rs.) 480 ft. 12,000 3000 ft. 24,000 480 ft. 324 ft. 2,900 8,100

Aluminium extruded sections such as follows:

Working capital is considered for an average working Capital cycle of 1 months Hence, Working Capital = Rs. 2,37,000 1 = Rs. 3,55,500

C. Total Capital Investment

1. Fixed Capital (i) Land and Building (ii) Machinery and Equipments Total (In Rs.) 7,87,500 5,19,000 16,62,000

1200 ft. 24,000

2. Working Capital (for 1 months) 3,55,500

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FINANCIAL ANALYSIS
(1) Cost of Production (per year) Amount (In Rs.) Total recurring expenditure Depreciation on Building @ 5% Depreciation on Machinery and Equipment @ 10% Depreciation on office equipment @ 25% Interest on total capital investment @ 16% Total or Say (2) Turnover (per year) (a) Stair-case hand rails 9000 ft. @ Rs. 125 per ft. (b) Doors - 12,000 sq. ft. @ Rs. 100 per sq. ft. (c) Windows 13,000 sq. ft. @ Rs. 90 per sq. ft. (d) Sale of Scrap Total 28,44,000 39,375 47,400 3,750 2,65,920 32,00,445 32,00,500 (Rs.) 11,25,000 12,00,000 11,70,000 60,000 35,55,000

Fixed Cost (per year) 40% Salary and Wages 40% other contingent expenses Insurance Total or Say B.E.P. = Fixed Cost 100 Fixed Cost + Profit = 7,00,000 100 7,00,000+3,54,500 = 66.38%

Amont (In Rs.) 1,92,000 1,39,200 12,000 6,99,645 7,00,000

(3) Net Profit (per year) (Before Income Tax) Net Profit = Total Sales Cost of Production = Rs. 35,55,000 - Rs. 32,00,500 = Rs. 3,54,500 (4) Net Profit Ratio = = = (5) Rate of Return = = = (6) Break-even Point Fixed Cost (per year) Amount (In Rs.) 90,525 2,65,920 Net Profit per year100 Turnover per year 3,54,500 100 35,55,000 9.97% Net Profit per Year 100 Total Investment 3,54,500 100 16,62,000 21.33%

Addresses of Machinery and Equipment Suppliers 1. M/s. Engineering Tools and Equipments Post Box No. 1972, 64, S.B. Singh Road, Mumbai - 400023. 2. M/s. C M F Engineering 3-A, Continental Plaza, 705, Annasalai, Chennai - 600006. 3. M/s. India Machine Tools Company Pulikwal Buildings Post Box No. 1781, M.G. Road, Eranakulam, Cochin - 670002. 4. M/s. Hind Rectifier Ltd. Lake Road, Bhandup, Mumbai - 400078. 5. M/s. Archem Industries 1/IC, Abdul Halim Lane, Kolkata - 700016. Addresses of Raw Material Suppliers 1. M/s. Hindustan Aluminium Corporation Ltd. Industry House, 159, Church Gate Reclamation, Mumbai - 400020.

Depreciation on building, machinery and office equipment Interest on total capital investment

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2. M/s. Jindal Aluminium Company Limited Tumkur Road, 7th Mile Stone, Bangalore. 3. M/s. Aluminium Corporation of India Ltd. 7 - Council Street, Kolkata - 700001.

4. M/s. Premier Metals and Engg. Company T. D. Road, Eranakulam - 682018. 5. M/s. Bhorukha Aluminium Limited K. R. S. Road, Matagally, Mysore - 570016.