ABSTRACT

This project deals with the production of good quality of sponge iron at Kuarmunda, which is one of the remote areas of Sundargarh but is rich in iron ores and the transport facility is good as it is on the national highway. The firm is designed such that its growth occurs fast; it grows in line with other industries. It should be that much strong so that it can defend the existing status in the market. It can catch up the leading demand in the market so that the consumers get their work done within limited time. Apart from the establishment of this project, it would also provide employment to the poor people in the unskilled workers grade so that they don’t go beyond the line of poverty. Basically the purpose of making this project is to make huge amount of profit by utilizing the resources available at Kuarmunda. Since the commissioning of the first Sponge iron unit in 1980, it has been a period of notable accomplishments for Sponge Iron India Limited which has played vital role in developing and establishing coal based DR Technology. Establishment and upgradation of coal based Sponge Iron technology in the Country, innovations in the usage of Sponge Iron and its conversion into Steel, conversion of waste material into value added products, visualization of new concepts for updating technology and the unique expertise in total consultancy for establishing new Sponge Iron plants have all contributed to the evolution of Sponge Iron India into a 'Technology Corporation'. which our project also intends to do.

TABLE OF CONTENTS
ABSTRACT...................................................................................................................1 TABLE OF CONTENTS...............................................................................................2 1. GENERAL INFORMATION....................................................................................2 4. MARKET POTENTIAL............................................................................................6 4.1 Present Demand and Supply of the Product :.......................................................7 4.2 Competition:.........................................................................................................7 With other sponge iron plants like Adhunik Metallics, Ganesh Metallics, Jindal Steel Plant,Bhushan Steel Plant in the market..........................................................7 4.3 Target Clients: .....................................................................................................7 4.4 Marketing Strategy:............................................................................................7 1. Coal....................................................................................................................8 2. Iron Ore..............................................................................................................8 3. Dolomite.............................................................................................................8 PRODUCTION SCHEDULE......................................................................................12 6. DETAILS OF THE PROPOSED PROJECT...........................................................13 (A) LAND AND BUILDING:.................................................................................14 (B) MACHINERIES / EQUIPMENTS:...................................................................14 (C) MISCELLANEOUS FIXED ASSETS:.............................................................14 (D) PRELIMINARY AND PRE OPERATIVE EXPENSES:.................................14 (H) MAN POWER (Salaries/Wages) - Monthly .................................................16 (I) REPAIRS AND MAINTENANCE - Monthly:.............................................16 (J) SELLING AND DISTRIBUTION EXPENSES - Monthly:..........................16 (K) ADMINISTRATIVE EXPENSES - Monthly:.............................................17 .............................................................................................................................17 (L) INTEREST - Annual:....................................................................................17 (M) DEPRECIATION: ......................................................................................17 7. WORKING CAPITAL (one month) / One cycle.....................................................18 8. TOTAL COST OF THE PROJECT.........................................................................19 9. MEANS OF FINANCE...........................................................................................19 10. PROFITABILITY PROJECTIONS.......................................................................19 11. BREAK EVEN POINT..........................................................................................20

1. GENERAL INFORMATION
Name of the Entreprenuers:
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sssss ssss Proposed Project:
Sponge Iron Plant.

Major Product / Services:
Sponge Iron.

Proposed Locations:
Orissa.

Type of Organization:
Private Limited.

2. ENTREPRENUER
1. Name :

PROFILE :

Educational Qualification:
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Technical Skills: C, C++, Oracle, VLSI

2. 3.

Name: Educational Qualification: Bachelor of Technology Technical Skills: C, C++, PLC, ETAP, SIMULINK, VLSI

4.

Name : Educational Qualification: Bachelor of Technology Technical Skills: C, C++, Oracle, ETAP

4.

Name : Educational Qualification: Bachelor of Technology Technical Skills: C, C++, Oracle, JAVA, Networking

3. TYPE OF THE PRODUCT / SERVICES:
1. Type of the Project : Hard Core.
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2. Product / Services Description : It is a Product Oriented type of firm which includes processing and production of sponge iron. Our firm deals with the ‘A’ grade quality of sponge iron . Its uses are mainly in the yielding of ingot and Rods of best quality . Sponge Iron is the product created when iron ore is reduced to metallic iron, usually with some kind of carbon (charcoal, etc), at temperatures below the melting point of iron. This results in a spongy mass, sometimes called a bloom, consisting of a mix of incandescent wrought iron and slag. Sponge iron is not useful in itself, but must be processed to create wrought iron. The sponge is removed from the furnace, called a bloomery, and repeatedly beaten with heavy hammers and folded over to remove the slag, oxidise any carbon or carbide and weld the iron together. This treatment usually creates wrought iron with about three percent slag and a fraction of a percent of other impurities. Further treatment may add controlled amounts of carbon, allowing various kinds of heat treatment (e.g. "steeling"). Today, sponge iron is created by reducing iron ore without melting it. This makes for an energy-efficient feedstock for specialty steel manufacturers which used to rely upon scrap metal.

3.

Major Consumers: Ram Rudai Steel Plant, Durgapur Steel Plant, Rourkela Steel Plant, Ranigunj Steel plant.

PROMOTERS:
1. Major Promoter of our project will be loans taken from banks. 2. Capital from reliable and Supportive Capital Ventures. 3. The company with which our firm collaborates. 4. Our Sponsors who have donated us a large amount for the successful start of this firm.
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4. MARKET POTENTIAL

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4.1 Present Demand and Supply of the Product :
The technologies trend of the present century has lead to the evolution of ‘A’ grade sponge iron which right now has a demand of Rs 21,500 per ton in market. If this product will be introduced in the market then it will be of great demand as producers of the sponge iron are less but resources are more to be explored those are much needed by the leading steel companies and many more core companies. The supply of this product would be 400 tonnes per year which would be utilized by all of its leading consumers and the left out product would be used to furnish its own company at Kolkata.

4.2 Competition:
With other sponge iron plants like Adhunik Metallics, Ganesh Metallics, Jindal Steel Plant,Bhushan Steel Plant in the market.

4.3 Target Clients:
Our main target clients are Raam Rudaai Steel Plant, Durgapur Steel Plant, Rourkela Steel Plant, Raniganj Steel Plant for best quality production of Ingot , rods and bars.

4.4 Marketing Strategy:
The Marketing Strategy will be advertising the product in the media and by company’s representatives by visiting various target clients and by making them aware of the features, application and the type of technology used in production of sponge iron in a stipulated time as required by them. Also by passing the tenders with reasonable prices so that most of the companies can afford it we can sale the product.

4.5

Technical Know-how Availability

The details of the project were made after analysing the increasing need for sponge iron in the market by the leading steel industries. The availability of resources in the large amount is the major cause of this project’s formation.
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4.6 Raw Materials Required
Sponge iron manufacture is highly sensitive to raw material characteristics. Therefore, it is essential to examine the chemical and physical characteristics of raw materials, both individually and in combination. The basic raw materials for the production of sponge iron are iron ore, non-coking coal and dolomite. Several tests are conducted in the company laboratory to ascertain their suitability in a rotary kiln. 1. Coal Important factors determining coal quality are:

Chemical properties such as fixed carbon, ash content, volatile matter, etc.: Physical properties viz, reactivity and ash fusion temperature.

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The entire coal requirement for this project would be from Bihar. 2. Iron Ore In sponge iron making, iron ore is reduced in solid state. Unlike in the conventional steel melting processes, the gangue content of iron ore cannot be separated as a slag. Therefore, it becomes imperative to select an ore with a high Fe content and a low gangue content, to optimise yield during steel making. Apart from this, to ensure a better kiln campaign life and output, the iron ore is made to undergo a series of other tests viz. shatter, tumbler & abrasion indices, reducibility etc. By virtue of its location, our project enjoys the proximity of good iron ore reserves, suitable for sponge iron making, in the Northern part of Orissa. Its sources of iron ore are from the Barsuan Mines, Kalta mines which has one of the finest quality iron ore in the region. 3. Dolomite Dolomite acts in the process as a desulphuriser, removing sulphur from the feed mix during the reduction process. It is mixed in small proportion along with other raw materials before charging into the kiln.
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4.7 Step By Step Description of the Manufacturing Process from Raw Material to Finished Goods
(1) First of all the raw materials like the ores,coal etc are finely crushed by using the crushers. (2) The kilns have inlet feeders which consists of three substances namely Iron ore, Dolomite and coal . (3) The piston feeding of iron ore is 6 tonnes per hour . (4) The piston feeding of coal is 3 tonnes per hour. (5) The piston feeding for dolomite is 0.120 tonnes per hour. (6) The outlet feeding is 2 tonnes of coal per hour. (7) There are in all total 7 stages of temperature profile they are 1st zone - 750 C, 2nd zone - 850 C, 3rd zone - 920 C, 4th zone – 990 C, 5th zone – 1020 C, zone - 1030 C , 7th zone – 1040 C. (8) After passing through the above stages of temperature in the kiln finally the sponge iron is produced. 6th

4.8 WORKING PRINCIPLE
In the rotary kiln considerable quantity of fines in the product between 3 and 5 mm in size are generated which cannot be directly used in electric arc furnaces, because they tend to get blown away while charging into the furnace. To overcome this problem and to utilize this hitherto considered waste material, the Company engineered and build a cold briquetting unit, the first of its kind in the country, for production of high density Sponge Iron briquettes with improved carbon content a product ideally suited as feed stock for electric arc furnace. Nearly 40% of heat energy is lost through waste gases going up the stack in the rotary kiln process. Harnessing this wasted energy could result in generating enough electric power to fully meet the requirements of both the Sponge Iron units, through out the year. Quality specifications Sponge Iron lumps with the following specifications:
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1. Size 3 to 20 mm (95% min) 2. Fe total 90% min 3. Fe metallic 81% min 4. Degree of metallization 88% min 5. Sulphur 0.045% max 6. Phosphorus 0.05% max 7. Carbon 0.1 to 0.3% 8. Non Magnetics 1.5% max 9. Packaging in HDPE bags only

THE MEASURES TAKEN FOR ESTABLISHMENT OF PLANT

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a) Comprehensive testing of raw materials for the process. b) Preparation of project report for an investment decision. c) Basic and detailed engineering of the reduction unit and all the auxiliaries from raw material preparation to storage and handling of finished products. d) Preparation and selection of mechanical, electrical and instrumentation equipment including refractories. e) Inspection of equipment to ensure compliance of specifications and for meeting the required standard from operational point of view. f) Assistance in supervision of erection, start-up and commissioning. g) Scheduling and monitoring the implementation of project with assistance in trouble shooting during erection and commissioning. h) Assistance in commissioning the plant and optimizing the plant operations. i) Full performance guarantees for achieving rated capacity utilization.

FLOWCHART OF MANUFACTURING PROCESS

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3 tonnes per hour Coal 6 tonnes per hour Iron ore 0.120 tonnes per hour dolomite KILN INLET Iron ore, Dolomite and Coal

KILN OUTLET Feeding 2 tonnes of Coal

7 Stages of temperature Sponge Iron

PRODUCTION SCHEDULE
5.1 No. of Working Days per Annum – 286 days.
There are 3 shifts (namely A, B, C)
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5.2 No. of Working Shifts(8 hours) per Day –

5.3 5.1

Installed Capacity (Annum) – 1,14,400 tonnes Utilized Capacity (%) – 100
I II III 2008 2009 2010 82 94 100

6. DETAILS OF THE PROPOSED PROJECT
This Project is about the production of A grade quality of Sponge Iron by utilizing the recent most technologies in the yielding of iron from its ores.

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(A) LAND AND BUILDING:
Sr. No. 1. 2. Particular Land Building Area Required 120 acers 50 acers Total: Total Value Remarks

Rs.62,72,64,000 Sufficient land Rs.26,13,60,000 and Building used up. Rs.88,86,24,000

(B) MACHINERIES / EQUIPMENTS:
Sr. No. 1. 2. 3. 4. 5. 6. 7. Description Kiln (furnace) Coolers Crushers Electrostatic Precipitator Computers Printers Scanners Nos. Required 4 4 4 4 24 10 5 Rate(Rs.) 40,00,000 22,50,000 25,00,000 12,50,000 30,000 2,000 2,500 Total: Total Value(Rs.) 1,60,00,000 90,00,000 1,00,00,000 50,00,000 7,20,000 20,000 12,500 4,07,52,500

(C) MISCELLANEOUS FIXED ASSETS:
Sr. No. 1. 2. 3. 4. Description Furniture Coffee Maker A.C. Office tools Nos. Required T(40), C(40) 1 10 10 Rate(Rs.) 1,000 5,000 20,000 5,000 Total: Total Value(Rs.) 80,000 5,000 2,00,000 50,000 3,35,000

(D) PRELIMINARY AND PRE OPERATIVE EXPENSES:
Sr. No. 1. 2. Particulars Interest during implementation Establishment
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Amount (Rs.) 2,50,00,000 45,00,00,000

Remarks Sufficient to

3.

Expenses Start-Up Expenses Misc. expenses Total

establish 50,00,00,000 97,50,00,000

(E) SALES REVENUE:
Year 2008 Items Sponge iron Quantity sold per year 1,44,000 tonnes Rate per unit(Rs.) 3,00,00,00 0 Sales realisation(Rs.) 432000000000

(F) RAW MATERIAL (MONTHLY REQUIREMENT)
Sr. No. 1. 2. 3. 4. Items Iron ore Coal A.C. Office tools Quantity 17,280 tonnes 14,400 tonnes 10 10 Rate(Rs.) 4200 3,500 20,000 5,000 Total: Total Value(Rs.) 7,25,76,000 5,04,00,000 2,00,000 50,000 12,32,26,000

(G) UTILITIES – Monthly
Sr. No. Particulars Annual Expenditure(Rs) Remarks

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1. 2. 3. 4.

Power/Electricity Water Coal/Oil/Stream Any other item ( Misc.) Total

2,86,000 30,000 40,000 20,000 3,76,000

2MW/day 45 lakh gallons/month 24,000 litres/month

(H) MAN POWER (Salaries/Wages) - Monthly
Sr. No. 1. 2. 3. 4. Particulars Skilled Semi Skilled Unskilled Office Staff Total No. 110 155 300 30 Wages/Salaries per Month(Rs.) 15,000 – 35,000 10,000 – 15,000 4,500 - 6,000 7,000 – 8,000 64,87,500 Annual Expenses(Rs) 60,000 40,000 10,000 22,000 1,32,000

(I) REPAIRS AND MAINTENANCE - Monthly:
Sr. No. 1. 2. 3. 4. Particulars Computer and Electronic goods Crusher maintenance ESP maintenance Vehicles Total: Amount(Rs) 5,000 10,000 15,000 15,000 45,000

(J) SELLING AND DISTRIBUTION EXPENSES - Monthly:
Sr. No Particulars
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Amount(Rs.)

Remarks

1. 2. 3. 4.

Publicity Expenses Traveling Freight Commission Total

1,10,000 3,00,000 10,000 50,000 4,70,000

Sufficient for sale of product.

(K) ADMINISTRATIVE EXPENSES - Monthly:
Sr. No 1. 2. 3. Particulars Stationery & Printing Post/Telephone/Fax Guest Entertainment Expenses Total Amount(Rs.) 20,000 50,000 20,000 90,000 Remarks Sufficient Amount

(L) INTEREST - Annual:
Loan Amount (Rs) 70,00,00,000 Interest (Rs) 1,40,00,000 Installment(Rs.) 5,00,000 Balance(Rs.) 1,35,00,000

(M) DEPRECIATION:
Sr. No. 1. Type of Asset Buildings Cost of Asset 23,13,60,00 Depreciation (WDV) 10%
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Amount(Rs.) 2,31,36,000

2. 3.

Plant and Machinery Moulds and Equipments

0 2,04,58,000 4,07,52,000

33% 50% Total:

67,51,140 2,03,76,000 5,02,63,140

7. WORKING CAPITAL (one month) / One cycle
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Sr. No. 1. 2. 3. 4. 5.

ITEM Raw-Material Salary/Labour Administrative expenses Repairs and maintenance expenses Selling and distribution expenses

Amount (Rs.) 12,32,26,000 64,87,500 90,000 45,000 4,70,000

8. TOTAL COST OF THE PROJECT
Sr. No. 1. 2. 3. 4. Particulars Fixed Capital Working Capital margin Preliminary & Pre-operative Expenses Cost escalation & contingencies Total Total Value(Rs.) 10,00,00,000 13,03,18,500 97,50,00,000 10,00,00,000 130,53,18,500

9. MEANS OF FINANCE
Sr. No. 1. 2. Particulars Own Investment Term Loan Total: Amount (Rs.) 50,00,00,000 70,00,00,000 120,00,00,000 Remarks Some amount from the sponsors.

10. PROFITABILITY PROJECTIONS
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Sr. No. 1. 2. A B C 3.

Particulars Annual sale realization Cost of manufacturing and servicing Annual working capital Annual interest on loan Annual depreciation Total: Gross profit / Loss (A-B)

Amount(Rs) 432,00,00,00,000 12,32,26,000 13,03,18,500 1,40,00,000 5,02,63,140 19,45,81,640 11,63,18,500

11. BREAK EVEN POINT

Break Even Point = (Fixed Cost ) * 100 / (Fixed Cost + Profit )
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The Fixed Cost is primarily associated with the cost that doesnot change with respect to time which are fixed assets like land, building, machinery and equipments. Break Even Point = (88,86,24,000) * 100 / (88,86,24,000 + 40752500) = 95.61

CONCLUSION
Thus we have formulated the action plan that takes both the short term and long term goals into account, and good use of every resource. Accept, Adapt and Achieve; these
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are the three watch words for success in today’s ever-changing situation. We would stick to our goals inspite of the keen competitions in the market. Keeping in view the needs and demands of our employees we would also try our level best to provide them good facilities and yield good profit in the forthcoming years.

REFERENCES
1. http://www.businessplan.com. 2. http://www.bplan.com
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