MALLEABLE IRON CASTING

PRODUCT CODE

: 33111200

QUALITY AND STANDARDS

: As per ISI specification

PRODUCTION CAPACITY
Value

: 500 MT
: Rs. 3,29,00,000/-

MONTH AND YEAR

OF PREPARATION

: June, 2014

PREPARED BY

: Dr. Amarnath
Assistant Director (Metallurgy)

1. INTRODUCTION
The term Malleable Iron includes ferritic (or standard) malleable iron and
pearlitic malleable iron. In commercial practice, the unqualified term malleable
iron refers to the ferritic material. There are two types of ferritic malleable iron,
namely, black heart and white heart. The black heart material has a matrix of ferrite
with interspersed nodules of tempered carbon. The white heart type has a different
form of tempered carbon and usually contains some combined carbon, because of its
composition and method of manufacture. Cupola Malleable Iron is a ferritic grade
produced by cupola melting for pipe fitting and similar thin section castings.
Because of lower strength and ductility, cupola malleable usually is not specified for
engineering castings. Pearlitic malleable iron is designed to have combined carbon in
the matrix resulting in higher strength and hardness than is available in ferritic
malleable iron.
Malleable cast iron is better suited for use in bridges, railways lamp-post
bracket, motor trucks and lorry parts. Pipe-fittings like elbow tee, reducing socket,
bush, plug, caps, cross, check nut, short bend, 3-way elbow, 4-way tee etc. are used
at places where strength and malleability both are required. Unfortunately malleable
casting is at a stage of infancy in our country. It has been observed that a large
number of parts can be made of malleable iron, if facility is readily available.

2. MARKET POTENTIAL
Malleable cast iron has been accepted by industries as reliable engineering material.
Even though the use of malleable cast iron is limited to only a few industries like
pipe fittings and auto parts in our country, it can be extended to even bicycle parts,
sewing machines and other allied items in future. These industries are localized in
Punjab, Haryana and around Delhi. The foundry industry, mostly cupola based, are
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Malleable Iron Casting

located in clusters. Howrah belt has the largest concentration of foundry units and
accounts over 20 % of country output of grey cast iron. Even though grey cast iron
foundries are spread throughout the country, the important clusters of grey iron
foundries are Howrah, Rajkot, Agra, Varanasi, Batala, Ahmedabad, Coimbatore,
Ludhiana, Jalandhar, Chennai, Kolhapur, Belgaum, Baroda, Pune, Mumbai and
Bangalore. Delhi/NCR too has good concentration of grey iron foundry. Hence, at
least 40% of these industries can be motivated to include malleabilising treatment
too. Due to liberalized government policies malleable casting units has to grow
rapidly. Keeping in view the future trend the demand for malleable cast iron is
expected to rise in years to come.

3. BASIS AND PRESUMPTIONS

This project is made on the basis of the following presumptions:
i.

It is assumed that the unit will be viable at 75% efficiency on single shift basis
considering 6 working days per week.

ii.

The rate of interest in the scheme is taken at 11.5 % for both fixed and
working capital. Due to liberalization and competition among banks, lower
rate of interest is possible in future.

iii.

The prices of machinery and equipments are approximate which are ruling
locally at the time of preparation of the project. When a tailor-cut project is
prepared the necessary changes are to be made at the local level.

iv.

The cost of staff and labor is approximate which is ruling locally at the time
of preparation of the profile. When a tailor-cut project is prepared the
necessary changes are to be made.

v.

There is a 5% burning loss in the project.

vi.

BEP in the scheme has been calculated on the basis of full capacity utilization.

4. IMPLEMENTATION SCHEDULE
The project can be implemented in a period of 16 to 18 months by performing
the various activities in a systematic manner and simultaneous application of
various common activities as mentioned below;
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.

Preparation of project reports

Provisional registration
Selection of site
Arrangement of finance/loans
Land acquisition & construction of building
Machinery & equipment procurement
Recruitment of staff & labour
Installation of machinery
Trial production
Commercial Production

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1st month
2nd month
2nd month
3rd 5th month
6th 9th month
10th 13th month
14th month
15th month
16th month
16th month

Metallurgy Division

5. TECHNICAL ASPECTS
5.1. Process of Manufacturing
The project is envisaged to produce pearlitic malleable iron cast iron
manufactured in oil fired rotary furnace. Cupola malleable generally referred to as
ferritic malleable iron is not specified for engineering casting due to its lower
strength and ductility. There are two stage of manufacturing malleable cast iron.
i. Manufacture of white cast iron
ii. Its subsequent heat-treatment either in coke fired/oil fired or electrically
heated furnace for malleabilising. In pearlitic cast iron carbon is in combined
form. The purpose of malleabilising treatment is to convert this into nodular
form. It takes about 57 days of stage heating in order to achieve required
microstructure. After heat treatment, the product is sent to machine shop for
proper finishing, machining and threading etc. The product is dispatched
after galvanizing and painting as desired by buyers.

5.2. Quality Control and Standards

A fully annealed malleable casting contains 2.0 to 2.5 per cent graphite
carbon which is equivalent to about 6 to 7.5 % by volume. Because of graphite, the
carbon contributes nothing to the strength of the casting, those with lesser amount of
graphite are somewhat stronger and more ductile than those containing greater
amount.

Gray Cast Iron

(ASTM A48)

Nominal Composition
Uses
(By weight)
C- 3.4, Si -1.8, Mn- 0.5
Engine Cylinder Block, Flywheel.
Gearbox Cases, machine-tool bases

White Cast iron

C- 3.4, Si -0.7, Mn- 0.6

Bearing Surfaces

Malleable Iron
(ASTM A47)

C- 2.5, Si -1.0, Mn- 0.55

Axle bearing, track wheel,

Automotive crankshaft

Name

The typical chemical composition of standard malleable iron as compared

with that of gray iron and steel castings is listed as follows.
Elements
Carbon %

Malleable Iron
2.00-2.65

Gray Iron
2.50 - 3.75

Medium Carbon Steel

0.20 0.50

Silicon %

1.40- 0.90

3.00 0.25

0.80 0.20

Manganese %

Less than 0.55

0.36- 1.00

0.50 1.00

Phosphorus %

Less than 0.18

0.10 1.05

Less than 0.05

Sulphur %

Less than 0.18

0.70 -0.15

Less than 0.06

The Bureau of Indian Standards has also brought out specifications for
malleable iron as follows:
Malleable Pipefitting
BIS 1879:1975
White and Black
BIS 2107:1977
Malleable Iron Castings
BIS 2100:1977
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Malleable Iron Casting

5.3. Production Capacity

Quantity 500 MT (per annum); Value Rs. 3,29,00,000/-

5.4. Motive Power

Total requirement is about 30 H.P.

5.5. Pollution Control

Foundry industry has a share in the present environmental degradation &
therefore No Objection Certificate (NOC) is required from State Pollution Control
Board.
There are mainly two methods for pollution control in foundry industries:
By exploiting the meteorological and topographical conditions.
By using various equipments for cleaning & dispersion of foundry emission.

5.6. Energy Conservation

Use of optimum energy is the need of hour for any enterprise. Hence
conservation efforts are needed to decrease cost of the production and pollution too.
Energy audit should be integral part of the activity of management.
The factors which affect the fuel economy in industrial furnaces may be stated
as follows:
i.

Complete combustion with minimum excess air.

ii.

Proper heat distribution.

iii.

Operation at desired temperature

iv.

Reducing heat loss from openings.

v.

Minimizing wall thickness.

vi.

Waste heat recovery from fuel gas.

For electricity conservation machine tools should be individually motorized

so that energy may be saved when machines are not in use. Use of lubrication and
proper maintenance of machine will further save energy.

6. FINANCIAL ASPECT
6.1. Fixed Capital
Land & Building:
S.N.

Description

Rent per month(Rs.)

1.

Covered Area 4000 ft2 @ Rs.10.0 per ft2

40,000/-

2.

Uncovered area 6000 ft2 @ Rs. 8.0 per ft2

48,000/-

Total Rent

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88,000/-

Metallurgy Division

6.1.1. Machinery and Equipments

S.
N.
(a)

Production Unit

(i)

Casting and Annealing Shop

1.

Rotary furnace of 1 MT capacity with 5HP motor

5,00,000

2.

Core sand mixer, 100 kg capacity with 2 HP motor

55,000

3.

Gyrator Sieve shaker of 24 width with 2 HP motor

60,000

4.

Muller of 100 kg cap. With 2 HP Motor

75,000

5.

Moulding machine equipped with 3 HP motor

3,20,000

6.

Coal fired core baking oven of size 2m x 2m x 3.5m

60,000

7.

Oil fired annealing furnace of size 2m x 4m x 3.5m

with 5 HP motor and fan arrangement.

2,50,000

(ii)

Description of Machine

Quantity

Amount
(Rs)

Machine Shop

8.

6 lathe machine with 3 HP motor

1,00,000

9.

24 stroke shaper machine with 3 HP motor

1,50,000

10.

1 Capacity drill machine with 1 HP motor

35,000

11.

8 capacity wheel double ended grinder with

2 HP motor

50,000

12.

Flexible shaft grinder with 1 HP motor

(b)

Testing Equipments

13.

Rockwell Hardness testing machine

75,000

14.

Weighing scale

20,000

15.

Thermocouple

LS

10,000

16.

Chemical Testing Equipments with accessories

LS
Total

(c)

Diesel generating set of 10 KVA

(d)

Pollution Control Equipments

50,000

(e)

Energy Conservation Facilities

50,000
21,75,000

1
Total (i + ii)

15,000
16,70,000

2,00,000
3,05,000
1,00,000

Total (a, b, c, d, e)
(f)

Electrification and Installation Charges @ 10%

(g)

Office equipment and furniture

2,17,500

Preoperative expenses like legal, establishment, traveling,

Startup consultancy, telephone, electricity connections etc

Total Fixed Capital

L.S.

1,75,000

TOTAL

25,67,500

Rs. 2,00,000/-

Rs. 27,67,500/-

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Malleable Iron Casting

6.2. Working Capital (per month)

6.2.1. Personnel
S.No. Designation

Nos.

Salary (Rs.)

Total (Rs.)

a)

Administration

Engineer cum Manager

12,500/-

12,500

Sales Executive

12,000

12,000

Supervisor

9,500

19,000

Accountant cum clerk, typist

8,500/-

8,500

Peon-cum-watchman

7,500/-

15,000

b)

Workshop

Core Maker

9,500/-

38,000

Furnace operator

9,000/-

18,000

Moulder

8,500

51,000

Machine Operator

8,000

32,000

10

Fitter

8,000

8,000

11

Helper

7,500/-

30,000

Total

2,44,000

Add perquisites etc. @ 15%

36,600

Total

2,80,600

6.2.2. Raw Materials including Packaging Materials

Pig iron

30 MT @ Rs, 33,000/ MT

Rs. 9,90,000

Steel scrap

20 MT @ Rs. 26,000/MT

Rs. 5,20, 000

Ferro Alloys, Fluxes, Limestone, etc.

LS

Total

Rs. 1,00,000
Rs. 16,10,000/-

6.2.3. Utilities
Power

3000 Unit @ Rs.6.50/unit

Rs. 19,500

Water

LS

Rs. 2,000

Hard Coke

4 MT @ Rs.14,000/MT

Rs. 56,000

Steam Coal 8 MT @ Rs. 9,000/MT

Rs. 72,000

Furnace Oil 2000 ltr. @ Rs. 51/Ltr

Rs. 1,02,000

Total

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Rs. 2,51,500/-

Metallurgy Division

6.2.4. Other Contingent Expenses (Per Month)

S.No.

Particular

Amount (In Rs.)

1.

Rent

88,000

2.

Transport expenses

2,500

3.

Stationery and Postage etc

1,500

4.

Telephone & fax etc

1,500

5.

Insurance

1,000

6.

Advertisement & Publicity

8,000

7.

Repair, Maintenance and Replacement

8.

Consumable stores

9.

Miscellaneous

10,000
1,500
1,000
1,15,000

Total

6.2.5. Total Recurring Expenditure (per month)

Rs. 22,57,100/-

6.3. Total Capital Investment

Fixed Capital
Working Capital for 3 months

Rs. 27,67,500
Rs. 67,71,300

Total

Rs. 95,38,800/-

Machinery Utilisation
75% machinery utilization is considered for achieving the projected capacity
of finished products. Bottleneck is on machining & heat treatment of casted parts.
Melting will be performed 23 days per week as per the requirement of the market.

7. FINANCIAL ANALYSIS
7.1. Cost of Production (per annum in Rs.)
1. Total Recurring Cost
2. Total Depreciation (a+b+c)
a. Depreciation on Machinery and Equipment
@ 20% (for Rs 15,82,500)
b. Depreciation on furnaces @ 25% ( for Rs. 8,10,000)
c. Depreciation on office equipments @ 20 % (for Rs.1,75,000)
3. Interest on total Capital @ 11.5 %( Approx.)
Total

2,70,85,200
5,54,000
3,16,500
2,02,500
35,000
10,96,962
2,87,36,162

7.2. Turnover (per annum)

S.N.
1.
2

Item
Finished malleable iron parts
Scrap/ Rejected items

Quantity(MT)
500
70

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Rate/ton
63,000
20,000
Total

Value (Rs.)
3,15,00,000
14,00,000
3,29,00,000

Malleable Iron Casting

7.3. Net Profit (per annum)

=
=
=

Turnover Cost of Production

Rs. 3,29,00,000 - 2,87,36,162
Rs. 41,63,838/-

7.4. Net Profit Ratio

=

Net profit per year

X 100
Turnover per year

41,63,838
X 100
3,29,00,000

= 12.66 %

7.5. Rate of Return

=

Net profit per year

X 100
Total Capital Investment

41,63,838
X 100
95,38,800

= 43.65 %

7.6. Break-even Point

Fixed Cost

(Rs.)

Rent

10,56,000

Total Depreciation

5,54,000

Total Interest

10,96,962

Insurances, Taxes, etc.

12,000

40% of salary and wages

13,46,880

40% of other Contingent expenses

(Excluding rent & Insurance)

1,24,800

Total

41,90,642

B.E.P
=

Fixed Cost
X 100
Fixed Cost + Net Profit

41,90,642
X 100
41,90,642 + 41,63,838

= 50.16%

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Metallurgy Division

Addresses of Machinery and Equipment Suppliers

1. M/s. Doeba Electric Welding Works, 185 Phase I, Block C,
Naraina Industrial Estate, New Delhi
2. M/s. Pioneer Equipments Company Pvt. Ltd, 432-Padra Road, Baroda
3. M/s. Kulkani Foundry E-209, Naraina Ind. Area, New Delhi
4. M/s. Wesman Eng. Company Pvt. Ltd. 7, Ganesh Chandra Avenue, Kolkata
5. M/s. Foundry Accessories 7-Omprakash, 90-Kazi Sayed Street, Mumbai-3
6. M/s. Inspection Instruments Corpn. 7, Sheriff Dovji Zakaria Bldg, Mumbai-3
7. M/s. Engineering & Industrial Foundry Company, Ram Nagar, Coimbatore
8. M/s. National Mechanical Works 72-A, M.M. Road, Paharganj, Delhi
9. M/s. Ashoka Machine Tools Corporation, Mayapuri Industrial Estate,
New Delhi-64
10. M/s. Toshniwal Brothers 3E/8, Jhandewalan Extension, New Delhi-110005
11. M/s. Chola Ram Om Prakash 578 Ishwar Chavan, Khari Bawli, Delhi-6
12. M/s. Greaves Cotton amd Co. Ltd.201, Nirmal Tower, 26 Barakhamba Road,
New Delhi-110001
13. M/s. Machinery Pattern and Foundry India Ltd., Shed No. 12, Noida, (U.P.)

Raw Material will be procured from IOC, BPCL, SAIL and open market.

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