PROJECT PROFILE

ON
STEEL RE-ROLLING MILL
(25 TPD)
PREPARED BY

8th Floor, Parishrama Bhavan,

Basheerbagh, Hyderabad

1. Introduction:
Steel is a product of a large and technologically complex industry having strong
forward and backward linkages in terms of material flows and income
generation. TMT Bars are re rolled bars from Ingots/Billets. The finished product
TMT bars are of Fe 415 & Fe 500 Grade steel bars. TMT bars have proven record
in resisting loss of strength at high temperatures as experienced during fires.
These bars are corrosion resistant. TMT Bars can be described as new-generationhigh strength steel having superior properties such as weld ability, strength,
ductility and tensile strength, which meet the highest international quality
standards.

2. Market:

The growth in construction activity and infrastructure projects in India has

buoyed the demand for steel industry. There is a demand for steel products such
has Thermo Mechanically Treated (TMT) Bars , Structural steel viz., angles,
plates, channels, rounds etc.,

3. Raw Material:
The raw materials used in manufacturing of TMT Bars are Ingots and Billets
which are manufactured from scrap and sponge iron.

4. Manufacturing Process
TMT (Thermo Mechanically Treated) Bar is a manufactured in a process in which
the ribbed bar is heat-treated in three stages during the production process itself.
The bar is rapidly cooled/ quenched in high pressure water jacket/spray system
as it emerges from the finishing stand of the rolling mill.

The process of manufacturing TMT Bars is explained in the following process flow
diagram:
Raw material Receipt with desired shapes
(Ingots)
Heating in Reheating Furnace

Hot Rolling into TMT Bars in Mill Stands

(Roughing Mill, Intermediate Mills and
Finishing Mill)

Cutting
Cooling by means of quenching

Inspection

Storage Yard and Dispatch

5. Technology:
The technology/Machinery required for Steel Melting Shop unit are:
Melting Shop Machinery item like Induction Furnace, dies for casting and other
misc. items etc
Rolling Mill Electricals like Motors, drivers, pumps, electrical panels, cables,
liquid starters and Transformer of 1500 KVA etc
Rolling Mill Auxiliary equipments like EOT cranes, Air compressor, gas cutting
machines and other Misc. auxiliary equipments etc.
6. Investment:
The investment for setting up a Steel Melting Shop Plant works out to Rs. 2.34
Crores and the break up of the cost is tabulated below.
The land requirement will be around 1.0 acres. The Preliminary & Pre-operative
expense works out to Rs 0.17 crores. Plant & Machinery including installation,
erecting & transportation charges are of 0.60 Crores. Buildings and civil works
are estimated to be 0.30 Crores. Electricity Deposits of 0.38 Crores has been
estimated. The cost of electrical installation and Misc. Fixed assets works out to
Rs. 0.50 Crores. Contingencies @ 3% have been considered in the project cost.
Margin money for working capital is estimated to be 0.28 Crores.
Table 1: Project Cost
S.No.

Description

Cost
(Rs in Crores)

Land & Site Development

0.80

Buildings & Civil works

0.30

Plant & Machinery including erc., ins.,& trans

0.60

Electrical Inst. & Misc. Fixed Assets

0.50

Contingency @ 3%

0.04

Electricity Deposits

0.38

Preliminary & Pre-operative Expenses

0.17

Margin Money for Working capital

0.28

Total Project Cost

2.34

Means of Finance

The project is proposed to finance with a debt equity ratio of 1.99:1 and the
means of finance is as follows:

Table 2: Means of Finance

S.No.

Sources of Funds

Cost
(Rs in Crores)

Share Capital - Equity

0.78

Term Loan

1.56

Total

2.34

7. Profitability Assumptions:
Basic assumptions of the Steel Melting shop unit are given in the table below:

The installed capacity is considered at 25 TPD

The unit will work for 300 days with single shift operations of 8 hours.

The unit can work at 80% capacity for the first year and can increase by 5%
there on till third year.

The manpower requirement is considered at 38 personnel for various level

viz. casual labour, Technical & Supervisory staff and administrative staff.

8. Key Financial indicators:

The returns are adequate enough to repay the term loan in 5 years. The key financial indicators are tabulated below.

S No
1
2
3
4
5
6
7
8
9
10
11
12
13

Particulars
Sales
Total Expenditure
PBIDT
PBT
PAT
Cash Accruals
BEP @ Operating capacity
Debt Equity Ratio
DSCR (Gross)
Average DSCR
DSCR (Net)
Average DSCR
IRR (%)

Year 1
12.96
12.19
0.77
0.39
0.30
0.38
52.55%
1.68
1.34

Year 2
13.77
12.93
0.84
0.49
0.36
0.44
46.80%
1.38
1.50

1.61

1.84

Year 3
14.58
13.67
0.91
0.59
0.42
0.49
41.99%
1.07
1.70
1.80
2.08
2.15
22%

(Rs. in Crores)
Year 4
Year 5
14.58
14.58
13.68
13.70
0.90
0.88
0.60
0.62
0.42
0.42
0.50
0.50
40.06% 38.13%
0.77
0.46
1.77
1.87
2.09

2.10

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