21

S.S. Ingots

PRODUCT CODE : 71126

QUALITY AND STANDARDS : IS 6529:1972; IS 6529:1978;
IS 6529:1996; AISI 304 and 410
MONTH AND YEAR : November, 2002
OF PREPARATION
PREPARED BY : Small Industries Service Institute
Kanjani Road,
Ayyanthole,
Thrissur-680003 - Kerala
Fax and Phone:0487-2360686, 2360536
Telegram : Smallind
E-Mail: trc_@sancharnet.in
Website:www sisikerala.org.

INTRODUCTION though there are some ingots

conforming to the other grades as well.
The project profile envisages the These stainless steel ingots are
production of stainless steel ingots of converted into stainless steel sheets
3¼" × 4¼" × 52" in medium frequency which have wide applications in
induction furnace. Stainless Steel ingots domestic utensil making industry,
are the raw material for Stainless Steel automobile industries, etc.
Casting and Re-rolling units. Stainless
steel castings in various shapes and MARKET POTENTIAL
sizes are widely used in chemical,
pharmaceutical industry and in dairy In a fast developing country like ours
equipments for its excellent corrosion which is progressing in every sphere,
resistance properties. Another special stainless steel ingots are the basic raw
property namely its non-toxicity and material for stainless steel sheet, strips,
strength establishes its use in large and stainless steel casting, there is a
measure in the aforesaid industries. good market potential for this type of
Probably no other better substitute can industry.
be found. Majority of the castings
conform to the austerity non-magnetic
BASIS AND PRESUMPTIONS
grade in the form of branches, valves, The unit when set up is expected to
valve bodies, propellers for agitators, work for 8 hours a day on single shift
pipe fittings, pumps, machine parts etc. basis with 25 working days a month (300
relating to the above type of industries days a year) and these details have been
108 S.S. INGOTS

worked out consistently. Five per cent moulds. Fast fan cooling should be given.
(5%) melting losses and five per cent Then they are removed from moulds.
(5%) wastage of raw materials and Ingots are ground on grinding machines
rejection of margin during the whole and fettled and are ready for rolling.
process of manufacture of this item has
been taken into account in this scheme Quality Control and Standards
and the turnover has been worked out Product is manufactured as per IS:
accordingly. 6529- 1972, IS: 6529-1978, IS: 6529-
1996 and AISI Standard Specification: 304,
IMPLEMENTATION SCHEDULE and 410.
The major activities and the time Production Capacity (per annum)
required for competition of each activity Present project profile envisages the
and their implementation are illustrated production of stainless steel ingots of
below: 31/4" × 41/4" × 52" size, weighing approx.
Sl.No. Activity Months Weeks 120 Kgs. Production capacity is 675 M.T.
per annum valuing Rs. 3,64,50,000 on
1. Selection of Site – 2
single shift basis.
2. Preparation of Project Report 1 –
3. Provisional Registration – 2 Motive Power
4. Financial Arrangements 3 – The Electric Motive Power required for
5. Procurement of Machinery 3 – this project would be around 50,000
6. Procurement of Essential Raw 1 – KWH.
Materials
7. Installation, Electrification and 2 –
Pollution Control
Commissioning of Machinery Foundry being a pollution intensive
8. Trial and Commercial Production 1 – industry needs to obtain No Objection
Total 11 4 Certificate from the Pollution Control
Board. Every care should be taken to
TECHNICAL ASPECTS minimize the gaseous as well as solid
pollution.
Process of Manufacture
Energy Conservation
Scrap is first degreased, cleaned,
segregated grade wise, weighted and Foundry industries, particularly where
then stainless steel scrap is charged in Induction furnace is used require huge
the furnace and melted. Measured energy in the form of electricity and
quantity of Ferro alloys mainly Ferro optimum use of electricity leads to
chrome is added to make up the reduced production cost. So it is in the
required composition. Melt sample is interest of the unit as well as the nation
taken out for chemical testing and to minimize the wastage of electricity by
accordingly, alloy additions are made using right equipment or motor so that
and again sample is taken out for final optimum use of electricity is possible.
adjustment of the composition. Then Energy audit will certainly help to decide
metal is poured into chilled cast iron the right equipment or motor for specific
 S.S. INGOTS 109

application without hampering the 15. Installation and Electrification 3,43,600

production or process. 16. Instruments, Tools and Fixtures 30,000
17. Office Furniture 30,000
FINANCIAL ASPECTS 18. Pre-operative Expenses 10,000

A. Fixed Capital Total 38,49,600

Say 38,50,000
(i) Land and Building - covered area
300 sq.mtrs rented Rs.10,000 (per month)
B. Working Capital (per month)
(ii) Machinery and Equipments
(i) Personnel
Sl. Description Qty. Amount
No. (In Rs.) Sl. Designation No. Salary Amount
No. (In Rs.) (In Rs.)
1. One box type 500 kg./250 1 20,31,000
KW/1200 HZ pouring 1. Works Manager 1 6,000 6,000
temperature 1650OC basic 2 Foreman/Supervisor 1 4,000 4,000
type of lining medium freque-
ncy induction melting furnace 3 Chemist 1 3000 3,000
with interchangeable crucible 4 Melter 1 4,000 4,000
389 kg./hr.+ 5% and 691 KW
H/T + 5% energy consumpti- 5 Peon/Watchman 1 1,500 1,500
on hydraulic tilting type 6 Skilled Workers 2 3,000 6,000
2. Water cooling system consis- 1 3,50,000 7 Semi skilled workers 2 2,500 5,000
ting of (heat exchanger for DM
Water and pump, furnace water 8 Helpers 5 1,500 7,500
and pump, raw water pump,
9 Office Clerk/Store 1 2,500 2,500
cooling tower, one over head
Keeper
tank, one under ground tank,
cooling tower with pipe lines. Add perquisites @ 15% 5,925
etc. of salary
3. Auxiliary transformer 1 2,00,000 Total 45,425
4. E.OT crane of 7.5 metric ton 1 4,40,000 Say 45,000
capacity with overhead rails
and structure (ii) Raw Materials and Consumables (per month)
5. Pillar type drilling machine 1 15,000
with 1 HP motor 1" cap. Sl. Description Indigenous Qty. Amount
No. /Imported (Nos.) (In Rs.)
6. Flexible shaft grinder with 2 15,000
1 HP motor 1. S.S. Scrap of Indigenous 60 21,00,000
various qualities MT
7. Swing frame grinder with 1 15,000 @ Rs. 35,000
10 HP motor Ton
8. Welding transformer 25,000 2. Ferro Alloys “ LS 75,000
9. Weighing machine 500 kgs 1 15,000 3. Refractories “ LS 25,000
capacity
4. Ramming Mass “ LS 10,000
10. Ladle 50,500,750 Kg Cap. 1 Each 15,000
5. Other Consumables “ LS 15,000
11. Air Compressor 3 HP 1 70,000
Total 22,25,000
12. Cast Iron Moulds 15 Nos 1,05,000
(iii) Utilities (Rs.)
13. Base plate trump pet 1 Set 40,000
1. Electric Power, 50,000 KWH 2,00,000
14. Chemical equipment and L.S. 1,00,000
accessories 2. Water 5,000
Total 34,36,000 Total 2,05,000
110 S.S. INGOTS

(iv) Other Contingent Expenses (per month) (Rs.) (4) Net Profit Ratio on Sales

1. Rent 10,000 39,90,000

Profit (per year) = ————————× 100
2 Transportation and Handling 5,000 3,64,50,000
3 Repairs and Maintenance 15,000
= 10.95%
4 Stationery, Postage and Telephone 5,000
(5) Rate of Return
5. Advertisement/Sales Promotion 5,000
Profit (per year) 39,90,000
6 Miscellaneous Expenditure like 10,000
———————— = —————— × 100
cotton waste, coating materials etc.
Total Cap. Inv. 1,14,25,000
Total 50,000
= 34.92%
(v)Total Recurring Expenditure (per month) (Rs.)
(6) Break-even Point
1. Personnel 45,000
Fixed Cost (per annum) (Rs.)
2 Raw Material 22,25,000
3 Utilities 2,05,000 1. Rent 1,20,000

4 Other Expenses 50,000 2. Interest on Capital Investment 15,99,500

Total 25,25,000 3. Depreciation on Machinery, 5,58,700
Working Capital for 1 Month 25,25,000 furnace, office equipments,
instruments, tools etc.
(vi)Working Capital (for 3 months) Rs. 75,75,000
4. 40% of salaries and wages 2,16,000
C. Total Capital Investment
5. 40% utilities 9,84,000
a) Fixed Capital Rs. 38,50,000
6. 40% of other expenses 1,92,000
b) Working Capital for 3 months Rs. 75,75,000
(excluding rent)
Total Rs. 1,14,25,000
Total 36,70,200
FINANCIAL ANALYSIS Say 36,70,000

(1) Cost of Production (per annum) (Rs.) Fixed cost

B.E.P. = —————— × 100
A. Recurring Expenses 3,03,00,000 Fixed cost+Profit
B. Depreciation on Machinery 1,40,500 36,70,000
and Equipments @ 10% = –––——————— × 100
C. Depreciation on Furnace @ 20% 4,06,200 36,70,000+39,90,000

D. Depreciation on Office Equipments 12,000 = 47.9%

Instruments, Tools @ 20%
E. Interest on Capital @ 14% 15,99,500 Addresses of Machinery and
Total 3,24,58,200 Equipment Suppliers
Say 3,24,60,000
1. M/s. Machine Tools Traders
(2) Sales Proceeds (per annum) (Rs.) P.O. Box-1260,
By Sale of 675 M.Tonnes 3,64,50,000 218, Linghi Chetty Street,
of finished goods Chennai – 600001.
@ Rs.54,000/tonne
2. M/s. Hindustan Machine Crafts
(3) Profit (per year)
386, Linghi Chetty Street,
Sales - Cost of Production
= Rs. 3,64,50,000-3,24,60,000 = Rs.39,90,000
Chennai – 600 001.
 S.S. INGOTS 111

Furnaces Rayapetah,
3. M/s. Electrotherm (India) Ltd. Chennai-600 014
Survey No. 72, 8. M/s. Metal Power Analytical (I) Pvt.
Palodia (Via Thaltej, Ltd.
Ahmedabad – 382 115 8/9, Mehul Premises,
Gujarat
Kanti Nagar,
4. M/s. Pillar (India) Andheri (East),
Vidyut Agni Marketing and Mumbai-400 059
Engineering Services,
Block A-23, 2nd Avenue, Addresses of Raw Material Suppliers
Annanagar,
9. M/s. Raja Steels Pvt. Ltd.
Chennai-600 102
100, Avarampalayam Road,
Foundry Equipments Ganapathy,
5. M/s. Balaji Equipment Co. Coimbatore - 641 006
23-A 6th Cross, BR Puram,
10. M/s. Virwadia Metal Corporation
VK Road, Thanneer Pandal,
Old No.209,
Peelamedu,
Coimbatore-4 New No. 224,
Linghi Chetty Street,
6. M/s. Greaves Foscco Ltd.
Chennai-600 001
Works: Mumbai-Pune Road,
Pune - 411019 11. M/s. Coimbatore Metal Mart
Metallographic and Chemical Dr. Nanjappa Road,
Laboratory Consumables Gandhipuram,
Coimbatore-641 001
7. M/s. Metallurgical Services (P) Ltd.
5, Lalithapuram Street, 12. Local Market.