NSIC

Project Profiles

LEATHER BAGS MAKING

1. INTRODUCTION
People use shopping bags to carry things to home ,which they purchase frommarket.
Different material like cloth, nylon, plastic etc are used for manufacturing of bags.But
they ar eless durable and lack aesthetic appeal. Leather can be used for
manufacturing high quality shopping bags to carry grocery,cloth ,cosmetics and other
such similar items.Most of the women used leather hand bags in India . The raw
material avilability is high in Tribal areas of AP and Orissa state. The industry
depends on taning industry.

2. MARKET
There is considerable demand in the local markest and export. The people are very
fashion conscious,expecially the younger generation do not mind paying a high price
for fashionable items having aesthetic value. Most of the leather shopping bags that
are sold in the local market are manufactured in other states. It is assumed that if
some units start manufacturing leather shopping bags they can easily capture the
local market.3. MANUFACTURING PROCESS
The diferent components as per the approved design is clicked from dry miled
pigmented lining leather by hand.The edges of these components are skived by hand
to remove bulkness at seams. Then the components of lining are clicked. The
components are then taken for stiching. The decorative items like
buckles,buttons,chains are fitted. Then the bags for finishing for removing diferent
defects.before taking the bags for marketing they arepacked properly.
4. PRODUCTION CAPACITY PER ANNUM
Capacity
Selling Price

Rs.

7000 Bags per

annum
180 Per kg

5. PROJECT COST/CAPITAL INVESTMENT

S.No

1
2
3

Description

Preliminary & Preoperative Expns

Fixed Capital
Working Capital for
Total Project Cost

Amount Rs.

2000
118000
95615
215615

month(s)

6. MEANS OF FINANCE
S.No

1
2
3

Description

Promoter Contribution
Subsidy /Soft Loan
Term Loan
Total

%age

Amount Rs.

15%
20%
65%

32342.25
43123
140149.8
215615

NSIC

Project Profiles

7. FINANCIAL ASPECTS
A. FIXED CAPITAL
i. Land and Buildings

Rented

2000 per month

ii. Machinery and Equipment

S.No

1
2
5
6

Description

Qty.

Leather finishing and stiching machine Nos

Sewing machines
Other tools
Lum
Packing machine
Electrification
Total

1
2
1
1
1

Rate

90000
6000
10000
3000
3000

Amount Rs.

90000
12000
10000
3000
3000
118000

B. WORKING CAPITAL
i. Salaries & Wages (per month)
S.No

1
2
3

Description

Nos.

Supervisor/Entrepreneur
Skilled
Unskilled
Total

1
3
3

Sal/mon. Amount Rs.

2500
2000
1500

2500
6000
4500
13000

ii. Raw Material (per month)

S.No

1
2
3
4
5

Description

Ljning cloth
Cloth
Buckles
Finishing chemicals
Packing material
Total

Unit

Qty.

Mtrs
Mtrs
Nos

715
600
600
1
600

Nos

Rate

66
30
10
625
0.5

Amount Rs.

47190
18000
6000
625
300
72115

iii. Utilities (per month)

S.No

1
2

Description

Power
Water

Unit

LS
LS
Total

Amount Rs.

2000
500
2500

iv. Other Expenses (per month)

S.No

1
2
3
4
5

Description

Postage & Stationery Expenses

Transportation Expenses
Advertisement Expenses
Consumeble Stores
Miscellaneous Expenses
Total

Amount Rs.

1500
1000
1000
500
2000
6000

NSIC

Project Profiles

v. Total Working Capital (per month)

S.No

1
2
3
4
5

Description

Amount Rs.

Rent
Salaries and Wages
Raw Material
Utilities
Other Expenses
Total

2000
13000
72115
2500
6000
95615

8. COST OF PRODUCTION (PER ANNUM)

S.No

1
2
3

Description

Total Working Capital

Depreciation
Interest
Total

Amount Rs.

@
@

1147380
17700
16818
1181898

15%
12%

9. TURNOVER (PER YEAR)

S.No

Description

Unit

Qty.

Bags per annum7000

Rate Rs. Amount Rs.

180

Total

1260000
1260000

10. FIXED COST (PER YEAR)

S.No

1
2
3
4
5

Description

Depreciation
Interest
Rent
Salaries & Wages
@
Other Expenses incl. Utilities @
Total

Amount Rs.

17700
16818
24000
62400
40800
161718

40%
40%

11. PROFIT ANALYSIS & RATIOS

1
2
3
4

Net Profit
Percentage of Profit on Sales
Percentage of Return on Investment
Break Even Point

Rs.

78102
6%
36%
67%