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PROJECT PROFILE

ON
HURRAICHI CHAPPALS & SANDALS

Product code

291301002

Quality & Standards

As per customer
specification and standards

Production capacity

Quantity 1,20,000 pairs


Value Rs. 91,50,000/-

Month & year.

December ,2005

Prepared by

Small Industries Service Institute,


E-17/18 Industrial Estate
Naini, Allahabad-211 009.
Phone: (0532) 2697468.
Fax: (0532) 2696809

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INTRODUCTION:
Hurraichi Chappals and Sandals are mainly used in Rajasthan and Gujarat. This Item is
solely manufactured in India and not likely to have competition from other Countries. Its production
and productivity have to be increased in relation to increasing Demand. The process of manufacture
is on craft basis and fully hand-made. Standardization should be effected to ensure unformity in
quality and increase in Production at minimum cost. This industry should be broad-based to enable
trade to earn more and more foreign exchange and continue to maintain its grip; on the export
market.
Raw materials for the manufacture of these chappals and sandals are indigenously available
and there is no dearth of raw materials as well as labour for manufacture of this item. There is,
therefore, good scope for setting up SSI units for the said manufacture.
MARKET POTENTIAL
Leather footwear industry in India has been identified as thrust sector for export production
endowed with rich cattle wealth, century old tradition of leather making skills and backed up by
the most modern facilities. Indian Leather Footwear Goods ,has over the years acquired a significant
place in the world market. Today some 120 Countries import Indian Leather Footwear and Leather
goods.
Besides internal demand of leather products, the country has traditionally Remained as an
exporter of leather goods, leather footwear. Of latae, however, the internal-demand has shown a
rising trend.
The Leather Sector occupies a prominent position in export profile of India.. In fact, this is
one important industry where there is immense potential for growth and value addition.
India has been steadily transforming its traditional leather industry in the past two Decades
into a modern industry. There is beter application of new technologies for producing elegantly
designed wide range of. footwear maintaining high standards and better design elements. It is
expected that some units can be motivated to start the production of Hurraichi Chappals & Sandals
to meet the export demand.
BASIS & PRESUMPTION
(i)

the production is based on single shift basis of 8 hours per day and 25 working days in a
month.

(ii) Time period for achieving full capacity utilization is 3 years.


(iii) Labour will be engaged on monthly basis keeping in view the present rates prevailing in
the market.
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(iv) Rate of interest for fixed and working capital @ 15%


(v) Margin money 25%
(vi) Land and building rented built up area 100 Sq. Mtrs.
IMPLEMENTATION SCHEDULE.
It will take 6 months to 1 year time to complete all the formalities before starting the
commercial production.
TECHNICAL ASPECTS
(i)

PRODUCTION DETAILS AND PROCESS OF MANUFACTURE

Hurraichi Chappal & Sandal upper straps are cut by hand/machine out of goat and sheep
skins of bark turned leather and the laces/thongs. The upper components are then skived by upper
skiving machine provided to obtain uniformity in thickness and ensure quality. - The cut -out laces
are supplied to outside parties for weaving. pleated ready laces are fitted to the uppers along with
other preliminary operations such as instep strap fitting, stiching, decorative creasing, punching,
gimping, pinking, etc. finally as the upper components such as studs., flowers and other fittings, link
loops etc. are assembled and fitted and the prick marks done on uppers. Thus, the uppers, ready
for fitting between the top and bottom soles, are fitted in the slots marked on the top sole; and the
finishing done by hand/machine. Then, they are paired sized and packed.
ii)

QUALITY SPECIFICATION

At present, no quality specification are available for Hurraichi Chappal & Sandals. But for
export orders, specifications are provided by the buyers only. Uppers and soles should be made
of good quality Bark tanned leather in order to have uniform colour.
Care should be taken to click the right components from the right portion of the leather.
Before taking different components to the closing section, inspection is to be done to ensure
quality. Good quality adhesive is to be used to ensure a proper bond between different components.
iii)

(iv)

PRODUCTION CAPACITY (Per annum)


i) Quantity

1,20,000 pairs

ii) Value

Rs. 91,50,000

MOTIVE POWER
8 H.P.

(v)

POLLUTION CONTROL:
This industry does not generate any pollution.

(vi)

ENERGY CONSERVATION:
Power operated machinery must be switched off when not in used.
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FINANCIAL ASPECTS
1.

FIXED CAPITAL
Land & Building

Rented

Covered Area 100 Sq. Mtr.

Rs. 3000/- per month.

2.

MACHINERY AND EQUIPMENT

Sl.
No.

Machinery &
Equipments

IMP./
IND.

QTY.

01.

Upper Leather Skiving


Machine

Imp.

02

Upper Strap Cutting


Machine (For Lace
Cutting)

03

RATE

Value
(Rs.)

65,000/-

65,000

Ind.

25,000

25,000

Industrial Swing
Machine, Flat bed
(45K) (Power H.P.)

Ind.

10,000

40,000

04

Bottom Sole Cutting


Press(Power operated)

Ind.

75,000

75,000

05

Bottom Components
Splitting Machine
(Power operated)

Ind.

30,000

30,000

06

Rolling Machine
(Power operated)

Ind.

35,000

35,000

07

Weighing Machine

Ind.

10,000

10,000

08

Tools & Equipments

10,000

10,000

09

Wooden Lasts

200

80,000

10

Office Equipment

30,000

30,000

11

Installation @ 10%

12

Cost of Dies

13

Spare Parts on
Imported Machine
@ 20%

Ind.

400
pairs

28,000
Ind.

3,000

18,000
28,000

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Sub- Total(A)
15% Pre-operative

4,74,000

Expenses (B)

31,600

Total A+B

5,05,600
Rs. 5,10,600/-

Total Fixed Capital


WORKING CAPITAL PM;
Personnel(Administrative and Supervisory) per month
SI.
No.

Designation

No.

Salary
@ Rs.

Total (Rs.)

01

Manager cum Designer

5,000

5,000

02

Supervisor

4,000

8,000

03

Accountant cum Clerk

2,500

2,500

04

Peon-cum-Watchman

1,500

1,500

05

Skilled Worker

10

2,000

20,000

06

Semi-Skilled Workers

1,000

4,000

07

Helper-Part Time

500

1000

08

Chowkidar/Peon

1,500

1,500

Total

43,500

Perquisites @ 20%

8700

Grand Total
i)

52,200

Raw Material (P.M.)


(a) Ladies Chappal

Sl. Description
No.

Qty.

Rate

Value (Rs)

01

Bark tanned Goat/Sheep 200 kgs. skins

200 kgs.

200/- kg.

40,000

02

Bark tanned Buff calf

125 kgs.

180/- kg.

22,500

03

Bark tanned Cow Hide

250 kgs.

175/- kg.

43,750/

(24)

04

Bark tanned Buff hide

350 kgs.

190/- kg.

66,500

05

Grindries

For 5000 pairs

10/- prs.

50,000

06

Packing Material

For 5000 pairs

5/- pair

25,000

Total

2,47,750

(b) Ladiess Sandal


Sl.
No.

Description

Qty.

Rate

Value
(Rs.)

1.

Bark tanned Goat/Sheep skins

125 Kgs.

200/kg.

25,000

2.

Bark tanned Buff calf

70 kgs.

180/kg.

12,600

3.

Bark tanned Cow Hide

125 kgs.

175/kg.

21,875

4.

Bark tanned Buff hide

175 kgs.

190/kg.

33,250

5.

Grindries

For 2500
pairs

15/pair

37,500

6.

Packing Material

For 2500
pairs

5/pair

12,500

Total:

1,42,725

(C) Gents Chappal


Sl.No. Description

Qty.

Rate

Value
(Rs.)

1.

Bark tanned Goat/Sheep


skins

150
Kgs

200/kg.

30,000

2.

Bark tanned Buff calf

80 kgs

180/Kg.

14,400

3.

Bark tanned Cow Hide

150 kgs

175/kg.

26,250

4.

Bark tanned Buff hide

175 kgs

190/kg.

33,250

5.

Grindries

For
2500
pairs

20/pair

50,000

(25)

6.

7.

Packing Material

For 2500 Pairs

6/pair

15,000

Total:

1,68,900

Say Grand Total a+b+c

5,59,375

Say

5,59,400

ii) Utilities (PM)


Sl. No.

Description

Amount (Rs.)

1.

Power

7000

2.

Water

500

Total:

7500

iii) Other Contingent Expenses (P.M.)


Sl.No.

Description

Value (Rs.)

1.

Rent

5,000

2.

Postage & Stationery

2,000

3.

Transport charges

4,000

4.

Telephone

2,000

5.

Repair & Maintenance

1,000

6.

Advertisement & Publicity

3,000

7.

Insurance

2,000

8.

Misc. Expenses

1,000

Total:

20,000

iv) Total Recurring Expenditure (P.M.)


Sl.No.

Description

1.

Personnel

2.

Raw Materials

3.

Utilities

4.

Other Contingent Expenses

Amount (Rs.)
52,200
5,59,400
7,500
20,000

Working Capital Per Month

63,91,00

Total Working Capital for 3 months :


(6,39,100x 3)

Rs. 19,17,300

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TOTAL CAPITAL INVESTMEN


Sl. No. Description

Amount (Rs.)

1.

Fixed Capital

510600

2.

Working Capital for 3 months

19,17,300

Total:

24,27,900

MACHINERY UTILISATION
The machinery utilisation will be the 60% during the first year of its production and will be
reach 80% by the third year.
FINANCIAL ANALYSIS
i) COST OF PRODUCTION
SI.No.

Description

Amount (Rs.)

1.

Total Recurring Expenditure per year

2.

Depreciation of Machinery & Equipment @ 10%

3.

Depreciation on Office equipment @ 20%

4.

Interest on total Investment @ 15%

5.

Depreciation on tools & equipment @ 20%

6.

Depreciation on wooden cost @ 20%

16000

7.

Depreciation of Dies @ 20%

3,600

76,69,200
28,000
6,000
3,47,850
2000

Total:

80,72,650

TURN OVER (PER ANNUM)


SI.No. Description

Qty. Pcs.

Rate @

1.

Ladies Chappal

60,000 pairs

Rs.70/pair

42,00,000

2.

Ladies Sandal

30,000 pairs

Rs. 75/pair

22,50,000

3.

Gents Chappal

30,000 pairs

Rs. 90/pair

27,00,000

Total:

Value(Rs.)

91,50,000
(27)

3) NET PROFIT PER ANNUM


Annual Turnover- Cost of Production

Rs. 91,50,000 -

8072650

= Rs. 1077350/-

4) NET PROFIT RATIO


Net Profit x 100
Turn over per annum

1077350x 100
91,50,000

= 11.7%

1077350 x l00
24,27,900

= 44%

RATE OF RETURN
Net Profit x 100
Total capital investment
BREAK EVEN ANAL YSIS
(i) Fixed Cost (Per Annum)
Sl.No.

Description

Amount (Rs.)

1.

Depreciation on machinery and equipment

28,000

2.

Rent for one year

36,000

3.

Depreciation on Office Equipment

6,000

4.

Depreciation on Tools & Dies @ 20%

5600

5.

Depreciation on wooden last @ 20%

16000

6.

Interest on Capital Investment

7.

40% salary

250560

8.

40% of other Contingent Expenses


excluding Rent

72,000

3,47,850

Total

7,62,010

BREAK EVEN POINT


BEP = FIXED COST X 100
FIXED COST = PROFIT
= 76290 x 100
7,62,010 + 1077,350

=
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41%

Name & address of Machinery & equipment suppliers:1.

M/s Leather & packaging Machine Corporation,


1/23, B, Asaf Ali Road, New Delhi-2.

2.

Singer Sewing Machine Co. Ltd,21, Netaji Subhash Marg,


Darya Ganj,Delhi-6.

3.

M/s Raj Machine Home, 35/116,D Lashkarpur, Kamla Nagar Agra-4.

4.

M/s Precision Shoe Last Factory, 60, Industrial Estate, Nunhai, Agra.

5.

M/s Sanghvi Shoe Accessories Pvt., Ltd., Agra, Mathura Road, Agra.

6.

M/s Harman Sales Union, 24, Kala Bhavan, Mathew Road, Mumbai-400004.

7.

M/s Srinivasan, No. 32, Bishop Garden, Chennai-600028.

8.

M/s Solar Atur House, Warli Nagar, Mumbai-400018.

9.

M/s Tuin Star Engineering, No.2, Thiruneer Malai Road,


Pammal, Chennai-600075.

10. M/s Apparal & Leather Technics Pvt. Ltd., 515, Avanasi
Road, Tirpur-6416002
Name & addresses of Raw Material Suppliers.
1.

M/s Shroff Sales Corporation, Thingki Mandi, Agra-3.

2.

M/s Basant Leather Corporation, Thing ki Mandi,

3.

M/s Esskay Sales Corporation,

4.

M/s General Leather Store


Hing Ki Mandi,Agra-3.

5.

M/s Valliappa Leather Corporation


3/5 & 6, Narayana Chitty Street, Periamet,
Chennai-600003.

6.

M/s T. Abdul Wahid & Co.


26, Veppery High Road, Chennai-600003.

7.

M/s Synthokem Industries,


5, Hindi Prachar Satha Street,
Chennai-6000 17

8.

M/s Zag Tanning, Zajmau, Kanpur.

9.

M/s Super Tannery, Zajmau, Kanpur.


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