BICYCLE RIMS

PRODUCT CODE : 376860006

QUALITY AND STANDARDS : IS: 624 1991

PRODUCTION CAPACITY : 67,000 pair of rims (per annum)

Value : Rs. 90,45,000/-

MONTH AND YEAR : May, 2014

OF PREPARATION

PREPARED BY : Sh. Ravi Ranjan

Investigator (Mechanical)

1. INTRODUCTION
Since the invention of wheels in the ancient times, transportation became
easier, but due to increasing price of fuel and pollution generating mechanized
transportation people has enforced and encouraged the use of bicycle. Among all the
transportation mode bicycle was preferred most which has one of the major
component called as Rim. Rims are manufactured in various designs and sizes
depending upon the size of cycle/design of bicycle. The most common type of
rims manufactured in India are roadstar model 28 x 1 width. By changing the
rolls, the desired shape of the rim can be obtained. Rims are generally manufactured
in two thicknesses of strip i.e. 18 gauge (Heavy Duty) for cycle rickshaw and heavy
load carrying on the bicycle and 20 gauges for general bicycle use. The project cost
has been taken out for the manufacture of 28 x 1 rims.

2. MARKET POTENTIAL
The requirement for bicycle/rickshaw is increasing day by day for
the transportation, racing, and exercising purposes. The bicycle industry is growing
at a fast rate and thus the demand for rims is bound to increase accordingly. There is
also good export potential for the bicycles, in the developing and Middle East
countries, which will also give a boost of the rim industry. There is thus a good
scope for the development of the industry.

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3. BASIS AND PRESUMPTIONS

i. The basis for calculation of production capacity is on single shift, working of
25 days per month on 75 % efficiency. The required for achieving envisaged
capacity utilization is assumed as one year.
ii. BEP for the scheme has been calculated on full capacity utilization.
iii. Rate of interest has been taken as 16% on an average. This, however, is likely
to change depending upon the location of the project.
iv. Labour wages have been taken on the basis of minimum applicable. There are
likely to change depending upon the location of the project.
v. Rental charges of Rs. 36/- per Sq. Mtr per month have been taken on an
average. This figure is likely to vary depending upon the location of the unit.
vi. Margin money requirement differs from project to project and type
of entrepreneurs such as women, SC/ST, physically handicapped etc. and the
minimum margin money usual asked by the financial institutions and banks
are 15%. Margin money up to 25% in some cases is also asked. The
entrepreneurs may check the margin money requirement from financial
institutions for the project.
vii. Term of loan differs from one financial institution to another and in general
minimum gestation period is normally 6 months and it could be up to 2 years.
Maximum period for repayment of loan is 7 years including gestation period.
The entrepreneurs from the concerned financial institutions may find the
exact terms and conditions.
viii. The cost of machinery and equipments as indicated in the scheme are
approximate those ruling at the time of preparation of the scheme. The
entrepreneur may check the exact price for specific make and model of the
machine selected.
ix. Non-refundable deposits, cost of preparation of project report etc. may be
considered under preoperative expenses.
x. The provision made in other respects viz; raw materials, utilities, overheads
etc. are drawn on the basis of standard variation and output. The cost
indicated against each is approximate and based on local market condition
and observations. The entrepreneur may find out the exact cost from the
concerned sources.
xi. The operative period of this project is estimated to be about 10 years
considering technology obsolesces.

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4. IMPLEMENTATION SCHEDULE
Sl. No. Activity Period
i. Preparation of project report after calling quotations
a) Calling quotations 1 month
b) Preparation of report 2 weeks
ii. Provisional Registration as SSI unit 2 weeks
iii. Financial arrangement 3 months
iv. Purchase and procurement of machines and equipments 3 months
v. Installation of Machines and equipments 3 months
vi. Electrification 1 month
vii. Recruitment of Staff and Workers 1 month
viii. Trial Production 2 weeks

5. TECHNICAL ASPECTS
5.1. Process of Manufacturing
The rims are manufactured out of CRCA strips. The strip roll is mounted on
the rim-forming machine and it is formed to the desired shape of the rim. When the
strip is passing through the set of rollers the formed strip is cut to the required
length and the ends are welded on the butt-welding machine to make a round rim.
The butt-welding seam is then grounded on the grounding machine. The rim is then
put on the rim-rounding machine to get perfectly round shape. The nipple holes
and valve holes are punched on the power presses. The wheel is then
straightened on the straightening machine and it is passed on to the polishing
section for buffing and polishing. The rims are then electroplated, polished and
packed after inspection.

5.2. Quality Control and Standards

BIS 624-1991 is available on the rims and should be followed for quality
control.

5.3. Production Capacity

This scheme envisages manufacturing of 67,000 pair of Bicycle rims per
annum with a value of Rs. 90,45,000/-

5.4. Motive Power

25 HP

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5.5. Pollution Control

For electroplating process no objection certificate (NOC) may be taken
from State pollution control board.

5.6. Energy Conservation

Suitable efficient electrical motors should be used in machines with suitable
shunt capacitors.

6. FINANCIAL ASPECT
6.1. Fixed Capital
Building: Covered area for workshop, office, stores etc. 250 sq. meters on rent.

6.1.1. Machinery and Equipments

Ind. /
Description Nos. Value (Rs.)
Imp.
Rim forming machine (complete with 6 pairs of
Ind. 1 2,60,000
forming rolls) with 7.5 HP electric motor

But welding machine Ind. 1 65,000

Seam welding plant complete with electrical Ind. 1 27,000
Butt weld grinding machine with 0.5 HP motor Ind. 1 40,000
Rim rounding machine with 1 HP Ind. 1 27,000

Rim straightening press complete with electrical

Ind. 1 35,000
and 3 HP motor
Power press for nipple hole complete with
Ind. 1 70,000
electrical & 3 HP motor

Value hole paneling machine with 1.5 HP motor Ind. 1 35,000

Buffing addas with 1.5 HP motor Ind. 2 52,000
Electroplating plant complete with acid tank etc Ind. 1 2,50,000

Electrification and installation @ 10% 86,100

Dies & punches, tools, jigs & fixtures etc. 1,00,000
Office furniture & equipments 40,000
Preoperative expenses 40,000
Total 11,27,100

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6.2. Working Capital (per month)

6.2.1. Personnel
Description Nos. Salary/month Total (Rs.)
Manager 1 12,000 12,000
Accountant (Part Time) 1 4,000 4,000
Clerk 1 8,000 8,000
Supervisor 1 10,000 10,000
Skilled Workers 5 8,112 40,560
Semi-Skilled Workers 3 7,356 22,068
Helpers 4 6,656 26,624
Peon cum Watchman 1 7,356 7,356
Total 1,30,608
Perquisites @ 15% of salary 19,591
Total 1,50,199
Say 1,50,200

6.2.2. Raw Material

Description Amount (Rs.)
CRCA Strips enrolls 185 SWG 14 MT & 705 SWG @ 20000/MT 3,40,000
Elctro Plating Chemical 71,000
Total 4,11,000

6.2.3. Utilities
Power L.S. Rs. 12,000
Water L.S. Rs. 1,500
Total Rs. 13,500

6.2.4. Other Contingent Expenses (Rs.)

1 Rent 8,000/-
2 Transportation 6000/-
3 Packing material 2,000/-
4 Repair & Maintenance 3,000/-
5 Advertisement and Publicity 3,000/-
6 Postage & Stationery 1,500/-
7 Oil & Lubricants 1,500/-
8 Consumable items 2,000/-
9 Miscellaneous 1,500/-
10 Insurance 1,000/-
Total: 29,500/-

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6.2.5. Total Recurring Expenditure (per month)

1. Personnel 1,50,200/-
2. Raw Materials 4,11,000/-
3. Utilities 13,500/-
4. Other Contingent Expenses 29,500/-
Total: 6,04,200/-

Total Working Capital for 3 months Rs. 18,12,600/-

6.3. Total Capital Investment

Total Fixed Capital Rs. 11,27,100/-
Total Working Capital (for 3 months) Rs. 18,12,600/-
Total Rs. 29,39,700/-

7. FINANCIAL ANALYSIS
7.1. Cost of Production (per annum)
Sl. No. Particulars Value(Rs.)
1. Total recurring cost 72,50,400/-
2. Depreciation on machinery and equipment @ 10% 86,100/-
3. Depreciation on dies, punches, tools, jigs & fixtures @ 25% 25,000/-
4. Depreciation on office furniture & equipment @ 20% 8,000/-
5. Interest on total capital investment @ 13% 3,82,161/-
Total: 77,51,661/-

7.2. Turnover (per annum)

Bicycle Rims of 67,000 pairs @ 135/- Rs. 90,45,000

7.3. Net Profit (per annum)

= Turnover cost of production
= Rs. 90,45,000 77,51,661
= Rs. 12,93,339/-

7.4. Net Profit Ratio

Net profit per year
= X 100
Turnover per year

12,93,339
= X 100
90,45,000

= 14.3 %

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7.5. Rate of Return

Net profit per year
= X 100
Total Capital Investment

12,93,339
= X 100
77,51,661

= 44.0 %

7.6. Break-even Point

Fixed Cost:
1. Rent Rs. 96,000/-
2. 40% of Salary & Wages Rs. 7,20,960/-
3. 40% of other contingent expenses Rs. 98,400/-
(excluding rent & insurance)
4. Insurance Rs. 12,000/-
5. Total depreciation Rs. 1,19,100/-
6. Interest on capital investment Rs. 3,82,161/-
Total: Rs. 14,28,621/-

B.E.P
Fixed Cost
= X 100
Fixed Cost + Net Profit

14,28,621
= X 100
14,28,621 + 12,93,339

= 52.5 %

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Name & Address of Machinery and Equipment Suppliers:

1. M/s.Bilco Industries, Nirankari Street No-2, Indl. Area B Ludhiana.
2. M/s. Sharma Engg. Works, Shahdara Indl. Area, New Delhi.

Power Press
3. M/s. Amar Engg. & Fabricators, Plot No-5, Sector-24, NIT, Faridabad.
4. M/s. Prem Engg. Works, 22, Okhla Indl. Area, New Delhi 20

Welding Plants
5. M/s. Gaisu Electricals, Link Road, Ludhiana.
6. M/s. Chawla Arc Welding Transformer, 1478, S.P. Mukherjee Marg, Delhi

Electroplating Plant

7. M/s. Segonds & pawls Pvt. LTd, B-27, Wazirpur Indl. Area, Delhi 52.
8. M/s. S.P. Singh & CO., G.T. Road, Dhalewal, Ludhiana.

Address of Raw Material Suppliers:

1. Steel Authority of India (Raw Material Yard) of Concerned State.
2. Local Market.

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