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IS:11348: IRON ORE PELLETS IS: 11093: -DO- LUMPS FOR DIRECTION PROCESS IS: 11896: -DO- SP.GRAVITY POROSITY IS:11690: -DO- MOISTURE CONTENT, ETC.
PRODUCTION CAPACITY (PER ANNUM): QUANTITY SALEABLE IRON ORE PRODUCT: 10,000 MT MONTH AND YEAR OF PREPARATION: PREPARED BY: SMALL INDUSTRIES SERVICE INSTITUTE GOVT.OF INDIA, MINISTRY OF SSI VIKAS SADAN, COLLEGE SQUARE CUTTACK-753003, ORISSA TEL. 2611329, 2611829 WEBSITE: www.sisiorissa.com VALUE RS.1,80,00,000
INTRODUCTION: Orissa is rich in Iron Ore deposits. Particularly Keonjhar, Mayurbhanj and North west districts are endowed with this mineral. After the recession period of Iron and steel industry in the past several year again it has taken a U-turn and many of the industries for the production of Sponge Iron unit is coming up. Main cluster for Iron and Steel industry has come up in the Joda - Barbil - Keonjhar belt. There is a good opportunity to set up an Iron ore crushing plant for the sponge Iron plants. Sometimes mine owners are unable to process the mineral as per the huge quantity need. Thus the entrepreneur has proposed to set up for iron ore crushing unit at Barbil, Keonjhar by taking leased land and mineral from the mine owner. The similar process is already existing in that area in some other unit but rate of production is quite less as per the quantity requirement. MARKET POTENTIAL: It has already been explained that after the good market demand of Iron and steel industry potential for iron ore processing has grown up. 10-12 more small scale units of sponge iron plant is still to come to this district. Thus entrepreneur has taken a logical step to the processing. Again the entrepreneur has a good tie up with mine owner where regular supply of minerals will be there. Since quality and quantity-wise iron ore is good source for setting up of industry the unit seem to achieve good potential. ENTREPRENEUR’S BACKGROUND: The entrepreneur is having an established metallurgical unit and activity on processing other minerals. It may be assumed that he will not face much difficulty in marketing his product since his unit is supplying other minerals to many mother plants. Entrepreneurs has the experience in export field also. There is a good opportunity in exporting the product to middle east and eastern countries also. BASIS AND PRESUMPTION: The production has been calculated on the basis of three shift of 8 hours each and 300 working days.
The full production capacity presumed to be achieved after one year of production. Labour wages has been considered keeping on minimum wages Act. The rate of interest on both fixed and working capital is considered @ 12%. The operative period of the unit has been considered as 10 years within which full repayment of loan has to be made. The cost of machinery and equipment can be considered based on prevailing market rates. IMPLEMENTATION SCHEDULE: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Survey for collection of data in respect of demand Raw materials including availability of power and water Etc. Arrangement of margin money Preparation of project document and regn. Financial assistance Selection of site and development of land Make shift office Clearance for pollution Electricity, fuel and water tie up for availability Construction of shed Identification and selection of machines Placement of orders for machine Transportation and installation of machine and equipt. Selection of raw material and placement of orders Receipt of raw material Trial production
0-2nd month 2-3rd month 2-3rd month 4-6th month 4-5th month 7th month 3-6th month 4-6th month 7-8th month 5th month 6th month 6-9th month 8th month 9-11th month 12th month
TECHNICAL ASPECTS: 1. Process of Manufacture:
The process of manufacture of crushed stone is a very simple one and does not involve any sophisticated technology. Only care has to be taken to control dust and handling of huge raw materials. The Iron ore lumps of different sizes fed into the jaw crushers/granulators for size reduction. Depending on the desired output sizes of the crushed stone sizes, the raw materials are processed through a series of jaw crushers and finally passed through a rotary screen for gradation. Material is handled through belt conveyor to the different places of operation i.e. from jaw to rotary screen and rotary to storage yard. The resulting graded iron ore is stored in different places as per market need. 2. Quality standards:
There is no Indian Standard Specification for the quality of the crushed stone except the size gradation. Hence the product is sold as per customer’s specification. 3. Production capacity (Per annum): 10,000 MT Rs.1,80,00,000/90 H.P.
Quantity: Value: 4. 5.
Power requirement: Pollution control needs:
During the processing of crushed stone lot of fine dust emerges out for which necessary dust collection arrangement has to be made and workers working in nearby have to be provided with dust masks. 6. Energy conservation needs: Every care has to be taken in best and efficient utilisation of both the
man and machine hours avoiding wastage and held up of works. FINANCIAL ASPECTS: Fixed capital: Land: 1 acre of leased land in Barbil, Keonjhar dist. Building : (a) Workers shed 500 sq.ft. (b) Foundation for jaw crusher, rotary screen, storage and other civil area 2. Machinery and equipment: Qty. 1 no. 1 no. 1 no. 5 no. Value 5,00,000 4,00,000 1,00,000 2,00,000 1,00,000 13,00,000 Power connection/Road development, etc. NESCO deposit Road/Electricity connection and mines lease deposit Total Block capital: i) ii) iii) Land/Building Machinery & equipment Power/utility/infrastructure 5,00,000 13,00,000 2,00,000 20,00,000 1,00,000 1,00,000 2,00,000
3,00,000 1,00,000 1,00,000 Rs.5,00,000
S.no. Item 1. Jaw crusher (30”x12”) plate with Motor cap. 45 HP 2. Jaw crusher (16”x9”) plate with motor cap. 35 HP 3. Rotary screen 14’ length 6 m/m ~ 12 m/m product dust and oversize 4. Conveyors erection commissioning and motor connection etc. 5. Spare jigs, jaws, fixtures, screen frame, conveyors,etc.
1. 2. 3. 4.
Manager/supervisor Mechanic/Fitter Skilled worker Contact labour for material handling
1 no. 1 no. 3 nos. @ 2500 20 nos. @ 2000
5,000 3,000 7,500 40,000 55,500/-
Raw materials (Per Month): Iron ore of 50 ~ 100 m/m size lumps @ 50 tons per day 1250 tons per month. By purchasing @ 800/ton raw material costing including transportation Utility and other expr. 1. 2. 3. 4. 5. 6. Electricity (0.75x 90x 25x10x3) ≅ Postage/stationery Travel and transport Repair/maintenance Insurance Other misc. exp. 50,000 1,000 2,000 2,000 1,000 4,000 60,000/Rs.10,00,000/-
Working capital requirement (P.M.): Total recurring expr. i) ii) iii) Staff and labour Raw material Utility and other expr. = 55,500 10,00,000 60,000 11,15,500 2x 11,15,500 = 22,31,000/-
Working capital for two months
Total Capital Investment: Block capital Working capital for two months Means of finance: Promoter’s contribution @ 25% (maximum) Loan from FI/Bank Annual Turnover: By processing 15,000 MT Iron ore per annum (1250x 12) production (desired grade) will be 10,000 MT only. By selling this product @ Rs.1800/MT annual income will be Cost of production (Per annum): 1. 2. 3. 4. Total recurring exp. Depreciation on building @ 10% Depreciation on plant and machinery @ 15% Interest on capital Invt. @ 12% 1,33,86,000 20,000 1,95,000 5,07,700 1,41,08,700 14,00,000 1,55,08,000 20,00,000 22,31,000 42,31,000 10,00,000 32,31,000 42,31,000
Add commission/royalty etc. @ 10% Profitability Analysis: i) Net profit before tax (P) 1,80,00,000 – 1,55,08,700 = ii) iii) Net Profit ratio (%) =
Return on investment (%)
= iv) v)
Net profit x 100% total cap. Investment
= = =
58.88% 6 years (max.) 34.0% 2,15,000 5,07,700 12,000 2,66,400 2,83,200 12,84,300
Pay back period Break Even point
Average fixed cost (AFC): 1. Depreciation total 2. Interest total 3. Insurance total 4. 40% of salary and wages 5. 40% of utility and other exp.excluding insurance Net Profit (P): B.E.P. = AFC x 100% AFC + P = 34.0%
SUPPLIERS OF PLANT AND MACHINERY: 1. 2. 3. 4. 5. 6.
M/s.Bhagawati Prasad Agarwalla Engg.Works, Branch: 366, Sahid nagar, Bhubaneswar-751007. Fax: 517568 M/s.Orissa Diesel Engines, A-5, Ind.Estate, Mancheswar,Bhubaneswar. Fax: 582615/621. M/s.Keshab Machineries Pvt.Ltd., Bose Park, PO-Sukchar, 24 Parganas. M/s.Mechanico, 54/1/7 (I) Road, Belgachia, Howrah-711105. M/s.Premur Casting and Engg.Works, Regd.Office: 44/45, Kings Road, Howrah-1, W.B. Works: 66/1, C.Road, Bamangachi, Salkia, Howrah-6, W.B. M/s.Marshall Sons & Co.Mfg.Pvt.Ltd., Chatterjee International Centre, 33A, Jawaharlal Nehru Road, Calcutta-71. M/s.Sayaji Iron & Engg.Co., Turnkey Range, Chatterjee International Centre, 4th floor, 53A, Chowringhee Road, Calcutta-71.
RAW MATERIAL SUPPLIERS: Local mines at Barbil, Joda, Keonjhar district.
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