STEEL CASTINGS

1. INTRODUCTION:

Steel is an alloy of Iron and carbon. Carbon content below 2% is termed as steel
while that above the limit is termed as cast iron. Steel castings are used when cast
irons cannot deliver enough strength or shock resistance.

Carbons steels are graded in to low, medium and high carbon steel. Depending on
the carbon content steel achieves different microstructure. This can be further
enhanced by controlling cooling rates of molten metal and heat treatment.

This project is focused on value addition in steel castings with consistency in

mechanical properties, superior microstructure and precision casting. This is to be
achieved by monitoring and adopting best practices for process control of
moulding, melt preparation and alloy addition as per requirement.

2. PRODUCT & ITS APPLICATION:

Steel melt with good composition can be cast by melting in medium frequency
induction durance. In addition to controlling carbon impurities content, several
alloy elements are added. Steel castings quality is ensured with proper process
controls. For steel castings addition of alloys is very important to get the desired
properties needed for end application, viz manganese, silicon, chromium, nickel,
vanadium, molybdenum etc. are added to get different properties. Viz heat,
corrosion, wears etc. resistance. Also Stainless and Tool Steels for very high end
application are used in most machines.

Steel casting is widely used in all types of industries for critical components. Steel
castings applications are common for critical machines such as hydroelectric
turbine wheels, forging presses, gears, railroad truck frames, valve bodies, pump
casings, mining machinery, marine equipment, turbocharger turbines and engine
cylinder blocks.
3. DESIRED QUALIFICATIONS FOR PROMOTER:

Preferably mechanical or metallurgical graduate with experience in this technology.

4. INDUSTRY OUTLOOK/TREND

India is the world’s third-largest casting producer after China and the U.S. India
produces castings of about 11 and 12 million tonnes per year. The steel foundries
in India comprises of various large, medium and small companies that manufacture
carbon steel alloys stainless steel and super alloy cast products.

Large players produce bulk of the domestic and export requirements for auto,
mining, Power, capital goods, Railways and defense sectors. Few names are Electro
steel Castings Ltd, Lanco Industries, Rail Wheel Factory, Hinduja Foundries, Nelcast
Ltd., Tata Motors, Brakes India, Dcm Engineering Products, Sakthi Auto Component
Ltd., Cooper Foundry, Mahindra- Hinoday, Mahindra Auto, Jayaswals Neco Ltd.,
NECO Castings, Ashok Iron Works, Kirloskar Ferrous Industries Ltd., Welcast Steels
Ltd. etc. compete with various medium and small companies numbering around
1500 units located all around industrial and urban centers in India to provide
services to end-user industries.

Large companies dominate the bulk of auto, power, railways and defense market in
India with more than 70% share. Small and medium industry are competing in
industrial valves pumps, machine tools, mining, mineral processing, cement,
chemical, pharma, dairy, food processing etc. industry. The steel foundries in
unorganized sector with proper standard specification and approval process are
doing quite well in niche markets.

Though Indian steel foundries are dominated by low technology, slow shift can be
witnessed with energy efficient furnaces, molding machines and metal quality
control systems.

5. MARKET POTENTIAL AND MARKETING ISSUES. IF ANY:

The growth of Indian economy is at 7%, sue to huge population demanding
massive industrial and infrastructure investment in automobiles, Railway, cement,
power generation and fertilizer Industries etc. core sectors and all associated
industries viz Chemical, Pharmaceutical, Dairy, food processing Equipment etc. is
the main driver for steel castings.

The global steel casting market is dominated by Asian countries China, Japan,
India. India is likely to be leader competing with China in near future with a large
number of players. India is emerging in steel casting industry and global demand
will augment the growth opportunities for steel foundries in the coming years. Most
of the global steel castings demand is with better metallurgy with austenitic,
ferritin and martensitic grade steel alloys suitable for Heat Treatment.

Steel Castings units producing their castings with standards and specifications with
respect to chemical composition of steel and close tolerances have immense
scope. There is good scope for setting up such units in the Small to medium Scale
Sector with induction melting and good metallurgical quality control facilities.

6. RAW MATERIAL REQUIREMENTS:

The raw materials – are Steels viz. Stainless Steel, Heat Resistant, Corrosion
Resistant, Tool Steel & even High-Speed Steel. The basic raw material is assorted
steel scrap or ingots for melting. Other materials are fluxes micro alloying additives
and Ferro alloy elements. Other consumables are molding sand and pattern making
materials. Certain additives for molding, viz. refractory powder, graphite etc. And
melt additives for cleaning, metal composition control is used to get desired quality
and finish of castings.

7. MANUFACTURING PROCESS:

Steel Castings with controlled chemical composition can be made by induction

melting process. Depending on furnace capacity large castings can be
manufactured in variety of Materials - viz. Stainless Steel, Heat Resistant, Corrosion
Resistant, Tool Steel & even High-Speed Steel. The main stages Process are as
below:

 Precision pattern Development as per Customer drawing & Foundry practice.

Manufacture of Pattern and cores is critical as ensure close tolerances.
 Preparation of mold for casting.
 Assembling of patterns may be required for complex shapes and sizes.
 Covering of mold with the various materials viz refractory or graphite, silicon
or other additive mixed sand.
 Baking of mold and core inserts
 Melting of metal with desired composition in furnace and chemical/ physical
testing of melt samples prior to casting.
 Pouring the required Metal in molds.
 Removal of moulds and allowing casting to cool at required rate to achieve
microstructure.
 The gates risers are cut-off and grinding is done with flexible shaft grinders.
The casting is then sand or shot blasted to maintain metal skin properties
and finish.
 Casting may be machined as per customer drawing and heat treated before
or after machining. Surface treatments may be carried out.
 Final Inspection, Packing & Dispatch

8. MANPOWER REQUIREMENT:

The unit shall require highly skilled service persons. The unit can start from 20
employees initially and increase to 42 or more depending on business volume.

Monthly
Sr No Type of Employees No of Employees
Salary
Year 1 Year 2 Year 3 Year 4 Year 5
1 Skilled Operators 18000 4 6 8 10 12
2 Semi-Skilled/ Helpers 8000 12 18 24 24 24
3 Supervisor/ Manager 30000 1 2 2 2 2
 4 Accounts/ Marketing 16000 1 2 2 2 2
5 Other Staff 8000 2 2 2 2 2
TOTAL 20 30 38 40 42

9. IMPLEMENTATION SCHEDULE:

The unit can be implemented within 8 months from the serious initiation of project
work.
Time Required in
Sr No Activities
Months
1 Acquisition of Premises 2
2 Construction (if Applicable) 2

3 Procurement and Installation of Plant and Machinery 3

4 Arrangement of Finance 2
5 Manpower Recruitment and start up 2
Total Time Required (Some Activities run
8
concurrently)

10. COST OF PROJECT:

The unit will require total project cost of Rs 210.33 lakhs as shown below:

Sr. No Particulars In Lakhs

1 Land 30.00
2 Building 45.00
3 Plant and Machinery 72.33
4 Fixtures and Electrical Installation 12.20
5 Other Assets/ Preliminary and Preoperative Expenses 4.00
6 Margin for working Capital 46.80

TOTAL PROJECT COST 210.33

11. MEANS OF FINANCE:

The project will require promoter to invest about Rs 87.68 lakhs and seek bank
loans of Rs 122.65 lakhs based on 70% loan on fixed assets.
 Sr. No Particulars In Lakhs

1 Promoters Contribution 87.68

2 Loan Finance 122.65

TOTAL : 210.33

12. WORKING CAPITAL REQUIREMENTS:

Working capital requirements are calculated as below:

Gross Margin
Sr. No Particulars Margin % Bank Finance
Amount Amount

1 Inventories 29.63 40 11.85 17.78

2 Receivables 26.56 50 13.28 13.28

3 Overheads 9.82 100 9.82 0.00

4 Creditors 29.63 40 11.85 17.78

TOTAL 95.63 46.80 48.83

13. LIST OF MACHINERY REQUIRED:

Sr. UO Quantit
Particulars Rate Total Value
No M y
Main Machines/ Equipment
Medium Frequency Induction Furnace 350000
1 Nos 1 3500000
1500 kg 0
Cooling tower, Water softening plant,
2 Nos 1 850000 850000
heat exchanger auxiliaries
3 Molding Machines Nos 3 250000 750000
4 Sand mixer, sieves etc. Nos 1 150000 150000
5 Core molding Machine Nos 2 25000 50000
6 Sand reclamation System Nos 1 200000 200000
Sr. UO Quantit
Particulars Rate Total Value
No M y
7 Core Baking oven with accessories Nos 1 70000 70000
Mold/core coating material mixer / spray
8 Nos 1 35000 35000
gun
9 Ladle with heating system Nos 2 30000 60000
10 EOT Crane Nos 1 350000 350000
11 Shot blasting machine Nos 1 200000 200000
12 Lathe Machine Nos 2 75000 150000
13 Drilling Machine Nos 1 50000 50000
14 Milling Machine Nos 1 300000 300000
15 Mold Boxes and tools LS 1 250000 250000
16 Bench/ Flexible shaft grinders Nos 4 12000 48000
17 Metallurgical Microscope Nos 1 80000 80000
18 Sample grinding / polishing M/c Nos 1 200000 200000
19 Physical testing Lab LS 1 350000 350000
20 Chemical Test Lab LS 1 150000 150000
subtotal : 7013000
Tools and Ancillaries
1 Patterns tools and gauges LS 1 150000 150000
2 Misc. tools etc. LS 1 70000 70000
subtotal : 220000
Fixtures and Elect Installation
Storage racks and trolleys LS 1 30000 30000
Other Furniture LS 1 40000 40000
Telephones/ Computer LS 1 150000 150000
100000
Electrical Installation LS 1 1000000
0
subtotal : 1220000
Other Assets/ Preliminary and
LS 1 400000 400000
Preoperative Expenses

TOTAL PLANT MACHINERY COST 8853000

All the machines and equipment are available from local manufacturers. The
entrepreneur needs to ensure proper selection of product mix and proper type of
dies and tooling to have modern and flexible designs. It may be worthwhile to look
at reconditioned imported machines, dies and tooling.
1. Techno Machines
Chikkanahalli Road,
Opp. Shahi Exports (Unit No 6),
Near Annapoorneshwari Temple,
 Bommanahalli,
BENGALURU-560 068, INDIA

2. S. S. Engineering Works
Ajit Khanna(Proprietor)
Plot No. 100, Sector 6 IMT Manesar,
Gurgaon - 122050, Haryana, India

3. Taurus Private Ltd Co

No. 24, D 2 / E 3, Kiab Industrial,
Area At Pivele
Kiab Industrial Area,
Bengaluru – 560100 Karnataka, India

4. Micro Engineering Works;

No. 6/140, Gandhi Nagar,
Nallampalayam Road Nanjai Gounden,
Pudur, G. N. Mills Post,
Coimbatore - 641029, Tamil Nadu, India

5. Electrotherm India Ltd.,

Survey No. 72, Village Palodia,
Taluka Kalol Via Thaltej
Ahmedabad- 382115, Gujarat

Other well-known machine are Acme Tooling’s, Ace manufacturing systems,

Batliboi Ltd., Bharat Fritz Werner, HMT Machine Tools Ltd., Advani Oerlikon Ltd,
Lakshmi Machine Works Ltd., Lokesh Machines Ltd., Praga Tools Ltd., Toolcraft
Systems Pvt. Ltd. Etc. The above list of machine supplier is illustrative.
14. PROFITABILITY CALCULATIONS:

Sr. No Particulars UOM Year Wise estimates

Year 1 Year 2 Year Year 4 Year 5

 3

1 Capacity Utilization % 35 45 55 65 75
Rs 500.8
2 Sales 318.70 409.75 591.87 682.92
Lakhs 1
Raw Materials & Other Direct Rs 372.4
3 237.01 304.72 440.15 507.87
Inputs Lakhs 4
Rs 128.3
4 Gross Margin 81.69 105.03 151.71 175.05
Lakhs 7
Rs
5 Overheads Except Interest 61.38 61.38 61.38 61.38 61.38
Lakhs
Rs
6 Interest 17.17 17.17 17.17 17.17 17.17
Lakhs
Rs
7 Depreciation 13.35 13.35 13.35 13.35 13.35
Lakhs
Rs
8 Net Profit Before Tax -10.21 13.13 36.47 59.81 83.15
Lakhs

The Unit will have capacity of 1000 MT per year of Steel Castings of different
grades/ types. The bulk sale/ distribution sales prices of steel castings ranges from
Rs 50 per Kg to Rs 300 per kg for super alloy, intricate and high end metal
products depending on type, size, ratings/ specifications and testing requirements
and volumes/ order.

The raw material cost ranges from 45 to 70 per kg for steel scrap. The melt
additives costs range from Rs 30 to 460 per Kg. The material requirements are
considered with wastage/ scrap etc. of 6 % of finished products. The unusable
scrap is sold at @ Rs 18 ~ 50 per Kg. and the income of same is added. Energy
Costs are considered at Rs 7 per Kwh and fuel cost is considered at Rs. 65 per liter.
The depreciation of plant is taken at 10 % and Interest costs are taken at 14 -15 %
depending on type of industry.

15. BREAK EVEN ANALYSIS

The project is can reach break-even capacity at 42.02 % of the installed capacity
as depicted here below:
 Sr. No Particulars UOM Value

1 Sales at Full Capacity Rs Lakhs 910.56

2 Variable Costs Rs Lakhs 677.16

3 Fixed Cost incl. Interest Rs Lakhs 91.90

4 Break Even Capacity % of Inst Capacity 39.38

16. STATUTORY/ GOVERNMENT APPROVALS

The unit shall have to get state industrial unit registration from DIC, IEC Code for
Export and local authority clearance. Depending on structure of finance the
company shall need to register company with registrar of companies. The
registration and approval for factory plan, safety for Fire etc. requirement,
registration as per Labour laws ESI, PF etc. shall be required as per rules and
applicability. Before starting the unit will also need GST registration for
procurement of materials as also for sale of goods. As such there is no pollution
control registration requirements, except installation of chimney/ blowers for heat
treatment furnace / pickling line and ensure safe environment as per rules of
factory safety. Solid waste disposal shall have to meet the required norms.
Entrepreneur may contact State Pollution Control Board where ever it is applicable.

17. BACKWARD AND FORWARD INTEGRATION

The machines and equipment offer scope for diversification in to producing the
continuous flux cored and coated electrode range of products and also take up
import substitution for welding electrodes by ensuring metal and flux compositions.
The unit can also of other consumer and industrial wire products / components etc.
by using the spare capacities and machine capabilities. As such there is not much
scope for organic backward or forward integration.

18. TRAINING CENTERS/COURSES

There are no specific training centers for wire drawing technology. There are
training for dies and tools development run by several centers of excellence viz
Indo German Tool Room at Ahmedabad, Rajkot, Chennai, and CTTC Bhubaneswar
etc. shall be helpful.
The most important scope of learning is in new product design and development
by associating with institutes like NID etc. Entrepreneur may also study the new
product designs, product range, features and specifications of leading Brands /
competitors across the world by scanning the Internet and downloading data. Viz.
North American, Europe, China etc. markets.

Udyamimitra portal (link : www.udyamimitra.in ) can also be accessed for hand-

holding services viz. application filling / project report preparation, EDP, financial
Training, Skill Development, mentoring etc.

Entrepreneurship program helps to run business successfully is also available from

Institutes like Entrepreneurship Development Institute of India (EDII) and its
affiliates all over India.

Disclaimer:
Only few machine manufacturers are mentioned in the profile, although many
machine manufacturers are available in the market. The addresses given for
machinery manufacturers have been taken from reliable sources, to the best of
knowledge and contacts. However, no responsibility is admitted, in case any
inadvertent error or incorrectness is noticed therein. Further the same have been
given by way of information only and do not carry any recommendation.

Source:- Udyami Mitra/Sidbi