PROJECT REPORT

Of

AIR SPRINGS

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Air Springs Manufacturing unit.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : info@udyami.org.in
Contact : +91 7526000333, 444, 555
 PROJECT AT A GLANCE
1 Name of the Entreprenuer xxxxxxxxxx

2 Constitution (legal Status) : xxxxxxxxxx

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxx
Mobile xxxxxxx

5 Product and By Product : AIR SPRING

6 Name of the project / business activity proposed : AIR SPRING MANUFACTURING UNIT

7 Cost of Project : Rs.24.07 Lakhs

8 Means of Finance
Term Loan Rs.15.84 Lakhs
Own Capital Rs.2.41 Lakhs
Working Capital Rs.5.82 Lakhs

9 Debt Service Coverage Ratio : 2.85

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 25%

13 Employment : 12 Persons

14 Power Requirement : 50.00 HP

Air Fitting, Nut/Bolt, Bead Plate, Bellows, Girdle,

15 Major Raw materials
: Bumper and Piston

16 Estimated Annual Sales Turnover (Max Capacity) : 194.51 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land Own/Rented
Plant & Machinery 17.00
Furniture & Fixtures 0.60
Working Capital 6.47
Total 24.07

MEANS OF FINANCE
Particulars Amount
Own Contribution 2.41
Working Capital(Finance) 5.82
Term Loan 15.84
Total 24.07
 AIR SPRING MANUFACTURING UNIT

Introduction:

Air springs have been used in heavy duty vehicle suspension systems and as required,
nearly a century, where they have been able to provide usefulness by taking advantage of
the compressed air required for vehicle braking systems. Air springs have provided a two-
fold advantage over mechanical leaf- or coil-springs. One advantage with air suspension
is the extra comfort provided by being able to vary the air pressure inside the spring,
which changes the spring rate, and therefore, ride quality. Additionally, because variable
control over air pressure adjusts the deck or trailer height, aligning loading docks to the
level of the deck is possible when dock plates are unavailable. Air is directed into air
springs, the bladders allow them to expand in a linear fashion, which permits them to be
used as force-developing actuators, like pneumatic cylinders, and as such, rod
attachments are available to mimic the function of them. Most often, however, an air
actuator is simply two end plates connected by a bladder, and as they’re pressurized, force
pushes the plates away from each other. Air spring are also excellent for constant force
applications, such as pulley tensioners or drum roller compression devices. All air springs
are single-acting, unless they are coupled together so one extends while the other retracts.
Uses & Market Potential:

Air springs are widely utilized in industry and transportation. Commonly as actuators in
amusement park rides, packaging equipment, clutch systems, conveyor belts and scissor
lifts, they also act as vibration insulators in centrifuges, commercial laundry machines,
measuring and weighing machinery, and textile looms. While the air spring has impacted
many industries like oil, logging, construction and manufacturing, it is most prominent
in the automobile industry where the air spring is used in suspensions for vehicle brands
like Lincoln, Cadillac, Hummer, and Jeep. The global Air Springs market is valued at
2265.3 million USD in 2020 is expected to reach 2735.4 million USD by the end of 2026,
growing at a CAGR of 2.7% during 2021-2026. Globally, the Air Springs industry market
is concentrated by Continental, Trelleborg, Vibracoustic, Bridgestone, etc. as the
manufacturing technology of Air Springs is relatively much more mature. Also, some
enterprises are still well-known for the wonderful performance of their Air Springs and
related services. At the same time, some countries such as Germany, Japan and USA are
remarkable in the global Air Springs industry because of their market share and
technology status of Air Springs.

Product:
Air Spring

Raw Material:
The raw materials required are:

 Air Fitting

 Nut/Bolt/Mount

 Bead Plate
  Bellows

 Girdle

 Bumper

 Piston
Manufacturing Process:

The steps are:

 First of all, twin carcass drums provide for optimum cycle time distribution
between components application on one drum and dynamic stitching plus
unloading by manipulator on the other drum.
 After that, two dedicated beads setting and turn-up stations are connected to
the carcass building station by means of automatic manipulators, travelling
high speed guides.
 The specially designed transfer devices pick-up the air spring carcass from the
carcass drum and transfer it to the corresponding turn-up station on both sides
of the system.
 Positioning of the carcass inside the turn-up station is executed automatically
by the manipulator, while special center lock device keeps it in position during
the bead setting and turn-up operations.
 The same manipulator removes the finished green air spring from the turn-up
station after bead setting and mechanical turn-up operations and brings it to
the unloading station on its way back to the carcass drum for picking up a new
carcass.
 The finished green air springs from both turn-up stations are automatically

unloaded by manipulators. Material application on the drums is controlled by

special cameras and sensors in automatic mode.
Area:

The industrial setup requires space for Inventory, workshop or manufacturing area, space
for power supply utilities and polishing area. Also, some of the area of building is
required for office staff facilities, office furniture, etc. Thus, the approximate total area
required for complete industrial setup is 2000-2500Sqft.

Cost of Machines:
Machine Quantity Rate
Fully automatic “INTERTECH” Uni- 1 1650000
Stage Building System
Other Equipment’s - 50000
Total Amount 1700000

Power Requirement- The estimated Power requirement is taken at 50 HP.

Manpower Requirement– Following manpower is required:

 Machine operator-2
 Skilled/unskilled worker-3
 Helper-4
 Manager cum Accountant-1
 Sales Personnel-2

FINANCIALS
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 3.45 5.95 9.51 13.25
Add: Additions 2.41 - - - -
Add: Net Profit 5.25 7.10 9.06 10.74 12.52
Less: Drawings 4.20 4.60 5.50 7.00 9.00
Closing Balance 3.45 5.95 9.51 13.25 16.78
CC Limit 5.82 5.82 5.82 5.82 5.82
Term Loan 14.08 10.56 7.04 3.52 -
Sundry Creditors 3.33 3.96 4.62 5.30 6.00

TOTAL : 26.68 26.29 26.99 27.89 28.60

APPLICATION OF FUND

Fixed Assets ( Gross) 17.60 17.60 17.60 17.60 17.60

Gross Dep. 2.61 4.83 6.72 8.33 9.70
Net Fixed Assets 14.99 12.77 10.88 9.27 7.90

Current Assets
Sundry Debtors 4.69 5.81 6.84 7.93 9.08
Stock in Hand 5.10 7.39 8.61 9.89 11.23
Cash and Bank 1.90 0.33 0.66 0.80 0.40

TOTAL : 26.68 26.29 26.99 27.89 28.60

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 100.57 124.43 146.55 169.90 194.51

Total (A) 100.57 124.43 146.55 169.90 194.51

B) COST OF SALES

Raw Material Consumed 66.56 79.20 92.32 105.94 120.07

Elecricity Expenses 3.36 3.92 4.48 5.04 5.60
Repair & Maintenance 2.01 2.49 2.93 3.40 3.89
Labour & Wages 11.97 14.96 18.25 21.91 25.85
Depreciation 2.61 2.22 1.89 1.61 1.37
Cost of Production 86.50 102.79 119.88 137.89 156.77

Add: Opening Stock /WIP - 2.88 3.43 4.00 4.60

Less: Closing Stock /WIP 2.88 3.43 4.00 4.60 5.23

Cost of Sales (B) 83.62 102.25 119.31 137.29 156.14

C) GROSS PROFIT (A-B) 16.95 22.18 27.25 32.61 38.37

16.86% 17.83% 18.59% 19.19% 19.73%
D) Bank Interest i) (Term Loan ) 1.72 1.40 1.02 0.63 0.24
ii) Interest On Working Capital 0.64 0.64 0.64 0.64 0.64
E) Salary to Staff 7.31 9.21 10.87 13.80 16.28
F) Selling & Adm Expenses Exp. 1.81 3.11 4.40 4.76 5.84

G) TOTAL (D+E+F) 11.48 14.36 16.92 19.83 23.00

H) NET PROFIT 5.48 7.82 10.33 12.78 15.37

5.4% 6.3% 7.0% 7.5% 7.9%
I) Taxation 0.23 0.72 1.27 2.04 2.85

J) PROFIT (After Tax) 5.25 7.10 9.06 10.74 12.52

PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND

Own Contribution 2.41 - - - -

Reserve & Surplus 5.48 7.82 10.33 12.78 15.37
Depriciation & Exp. W/off 2.61 2.22 1.89 1.61 1.37
Increase In Cash Credit 5.82 - - - -
Increase In Term Loan 15.84 - - - -
Increase in Creditors 3.33 0.63 0.66 0.68 0.71

TOTAL : 35.48 10.67 12.88 15.07 17.45

APPLICATION OF FUND

Increase in Fixed Assets 17.60 - - - -

Increase in Stock 5.10 2.28 1.23 1.28 1.34
Increase in Debtors 4.69 1.11 1.03 1.09 1.15
Repayment of Term Loan 1.76 3.52 3.52 3.52 3.52
Taxation 0.23 0.72 1.27 2.04 2.85
Drawings 4.20 4.60 5.50 7.00 9.00
TOTAL : 33.58 12.23 12.55 14.93 17.85

Opening Cash & Bank Balance - 1.90 0.33 0.66 0.80

Add : Surplus 1.90 - 1.56 0.32 0.14 - 0.40

Closing Cash & Bank Balance 1.90 0.33 0.66 0.80 0.40
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(10 Days requirement) 2.88 3.43 4.00 4.60 5.23
Raw Material
(10 Days requirement) 2.22 3.96 4.62 5.30 6.00

Closing Stock 5.10 7.39 8.61 9.89 11.23

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 5.10
Less:
Sundry Creditors 3.33
Paid Stock 1.77 0.18 1.60

Sundry Debtors 4.69 0.47 4.22

Working Capital Requirement 5.82

Margin 0.65

MPBF 5.82
Working Capital Demand 5.82
REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 15.84 15.84 0.44 - 15.84
Iind Quarter 15.84 - 15.84 0.44 - 15.84
IIIrd Quarter 15.84 - 15.84 0.44 0.88 14.96
Ivth Quarter 14.96 - 14.96 0.41 0.88 14.08
1.72 1.76
II Opening Balance
Ist Quarter 14.08 - 14.08 0.39 0.88 13.20
Iind Quarter 13.20 - 13.20 0.36 0.88 12.32
IIIrd Quarter 12.32 - 12.32 0.34 0.88 11.44
Ivth Quarter 11.44 11.44 0.31 0.88 10.56
1.40 3.52
III Opening Balance
Ist Quarter 10.56 - 10.56 0.29 0.88 9.68
Iind Quarter 9.68 - 9.68 0.27 0.88 8.80
IIIrd Quarter 8.80 - 8.80 0.24 0.88 7.92
Ivth Quarter 7.92 7.92 0.22 0.88 7.04
1.02 3.52
IV Opening Balance
Ist Quarter 7.04 - 7.04 0.19 0.88 6.16
Iind Quarter 6.16 - 6.16 0.17 0.88 5.28
IIIrd Quarter 5.28 - 5.28 0.15 0.88 4.40
Ivth Quarter 4.40 4.40 0.12 0.88 3.52
0.63 3.52
V Opening Balance
Ist Quarter 3.52 - 3.52 0.10 0.88 2.64
Iind Quarter 2.64 - 2.64 0.07 0.88 1.76
IIIrd Quarter 1.76 - 1.76 0.05 0.88 0.88
Ivth Quarter 0.88 0.88 0.02 0.88 - 0.00
0.24 3.52

Door to Door Period 60 Months

Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R
PARTICULARS I II III IV V

CASH ACCRUALS 7.86 9.32 10.95 12.35 13.89

Interest on Term Loan 1.72 1.40 1.02 0.63 0.24

Total 9.57 10.73 11.96 12.98 14.14

REPAYMENT
Repayment of Term Loan 1.76 3.52 3.52 3.52 3.52
Interest on Term Loan 1.72 1.40 1.02 0.63 0.24

Total 3.48 4.92 4.54 4.15 3.76

DEBT SERVICE COVERAGE RATIO 2.75 2.18 2.64 3.13 3.76

AVERAGE D.S.C.R. 2.85

Assumptions:
1. Production Capacity of Air Springs Manufacturing unit is taken at 170 Pcs per
day. First year, Capacity has been taken @ 30%.

2. Working shift of 10 hours per day has been considered.

3. Raw Material stock and Finished goods closing stock has been taken for 10
days.

4. Credit period to Sundry Debtors has been given for 14 days.

5. Credit period by the Sundry Creditors has been provided for 15 days.

6. Depreciation and Income tax has been taken as per the Income tax Act,1961.

7. Interest on working Capital Loan and Term loan has been taken at 11%.

8. Salary and wages rates are taken as per the Current Market Scenario.

9. Power Consumption has been taken at 50 HP.

10. Selling Prices & Raw material costing has been increased by 3% & 2%
respectively in the subsequent years.
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
assume no financial liability to anyone using the content for any purpose. All the
materials and content contained in Project report is for educational purpose and
reflect the views of the industry which are drawn from various research material
sources from internet, experts, suppliers and various other sources. The actual
cost of the project or industry will have to be taken on case to case basis
considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is
intended for general guidance only and must not be considered a substitute for a
competent legal advice provided by a licensed industry professional. SAMADHAN
hereby disclaims any and all liability to any party for any direct, indirect, implied,
punitive, special, incidental or other consequential damages arising directly or
indirectly from any use of the Project Report Content, which is provided as is, and
without warranties.