CLAY BRICK PLANT

Introduction:

Bricks are a significant basic material of construction required in all spheres of constructional
activities and constitute about 13 percent of the total cost of building material required for
construction. By and large three types of materials are used in walling viz. Conventional Burnt
Clay Bricks, different types of board and Concrete Blocks/Bricks. It has been established that the
use of clay bricks provide a superior and comfortable physical living environment than the use of
other materials as far as residential construction is concerned. Despite all initiatives to introduce
alternative walling materials like compressed earth block, concrete/stone Crete block and fly-ash
brick, it is envisaged that burnt clay bricks would still occupy the dominant position.

Typical characteristics of burnt clay brick are as follows:

Dimensions – 250 (L) 125 (W) 75mm (H)
Colour – Red
Weight – 3.6 Kg.
Bulk density – 1700 – 1800 kg/m3
Cold crushing strength – 70 – 90 kg/m3
Water Absorption – 20%

Market Potential:

The demand for bricks have been increasing year by year with the increased building
construction activities in Private/ Govt. Sectors as well as various projects/development activities
envisaged by the Central/State Governments. A significant change is taking place in the building
habits of the region by way of tendency to shift from the traditional Assam Type houses to RCC
type houses using bricks. That is why Bricks industry in the region has been registering a steady
and significant growth over the years.

Current consumption of bricks in NER (year 2005 – 06) is approximately 3000 Million. Assam is
the major consumer of bricks in the NER comprising nearly 70% of the total consumption. Assam
is followed by Tripura with consumption of approximately 9%. The other states make up balance.
Within the state of Assam, consumption of bricks is highest in Central Assam (41%), followed by
Lower Assam (25%), Upper Assam (25%) and South Assam (9%). At present there are around
1200 brick plants in the region with a total production of approximately 3000 million bricks.
Existing brick plants are concentrated in the State of Assam, Tripura & Mizoram.

Brick consumption at the national level has shown an Annual Cumulative Growth Rate (ACGR) of
7% for the last few years. However, NER lags behind the national growth rate and it is expected
to increase at an ACGR of 6% in the N.E. Region. At this growth rate, the demand for bricks in
NER is likely to increase to 4000 million bricks in 2009-10. During the same period, the
production from existing plants within the NER is expected to reach 3400 million bricks. This
takes into consideration possible improvement in capacity utilization of existing plants. The deficit
for bricks in the NER may be 600 million bricks by 2009-10. Considering 70% of this deficit being
clay bricks, there will be a demand for 420 million clay bricks by 2009-10. In order to meet this
demand an additional requirement of 200 brick plants (capacity 20 lakh clay bricks/year each) in
the region.

Plant Capacity:
Keeping in view the gap between demand and supply, technological factors and economic
viability etc., the suggested production capacity of a typical clay bricks manufacturing unit is 20
lakhs clay bricks per annum.

Raw Material:
The basic raw material required is Alluvial Clay with suitable plastic properties. Around 2.83 cubic
metres of clay is required per 1000 number of bricks. The requirement of clay for the unit has
been calculated on the basis of land requirement for 20 years. The depth of clay available for the
plant will be between 2.5 to 3 metres. The requirement of inputs per 1000 clay bricks is as
follows:

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 Inputs Quantity
Clay 4 Tonnes
Silt 0 – 0.04 Tonnes
Coal 0.2 Tonnes
Water 4 KL.
Process:
The process to be employed is based on the process developed and designed by the Central
Building Research Institute, Roorkee. The main process steps are as follows:
• Clay digging (manual) from clay pits and its storage.
• Moulding of clay and manual cutting.
• Manual setting and drying in drying shed.
• Processing to the final product by firing in the kiln firing.
• Storing.
Machinery:
The major equipment required for the unit are as follows:

• Cutting table (3 bricks at a time) – 1 No.

• Wheel barrow’s (transport 14 pallets) – 8 Nos.
• Pallets (3mm thick & 64 x 25 mm size) – 20 Nos.
• I.D. Fan with motor & starter – 1 No.
• Box type wheel barrows (Cap. 40/50 dry bricks) – 10 Nos.
• Kiln accessories (dampers, fed pot etc.)

Location:
The suitable locations for the project may be –
• Outskirts of Guwahati, Jorhat, Tinsukia, Silchar, Bongaigaon, Tezpur, N.Lakhimpur in
Assam.
• Jorabat/ Byrnihat in Meghalaya.
• Outskirts of Agartala, Dharmanagar in Tripura.
Note: Exact location for the plant needs an investigation of the clay quality and
quantity, during feasibility study of clay brick plant at the desired location.

Infrastructure:
The basic infrastructure required are :

Land : 14 bighas
Building : 1200 sq.ft.
Power : 50 Kwh per day
Coal : 200 kg. per 1000 clay bricks.
Manpower : 50 Nos. (Administrative, skilled & unskilled
Workers).
Note: The brick industry is highly seasonal in the NE region due to heavy rains in the region and
production takes place for around 6 – 7 months in a year. Normally the labourers with
some past experience travel to region from West Bengal and Bihar during the said
season of brick manufacturing.

Total Capital Requirement:

The total capital requirement including fixed capital and working capital is estimated at Rs 35.80
lakhs as follows. Of this, the project cost comprising fixed capital and margin money on working
capital is Rs 29.80 lakhs.

A. Fixed Capital: (Rs in lakh)

Land 3.50
Building 8.50
Machinery 10.00
Miscellaneous fixed assets 2.00
Preliminary and pre-operative expenses 1.80
Total (A) 25.80
====
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B. Working Capital:
Raw materials 1 month 2.00
Finished goods 2 weeks 3.50
Working expenses 1 month 2.50
Receivables 1 week 2.00

Total (B) 10.00

===
Total (A)+(B) 35.80

Note: Working capital may be financed as:

Bank Finance ….. Rs 6.00 lakhs
Margin Money ….. Rs 4.00 lakhs
Rs 10.00 lakhs
===========

Means of Finance:

The project cost of Rs 29.80 lakhs including margin money for working capital may be financed
as under:
Promoter’s contribution (35%) …. Rs 10.50 lakhs
Term Loan (65%) …. Rs 19.50 lakhs
Rs 29.80 lakhs
===========
Operating Expenses:
The annual operating expenses are estimated at Rs 34.00 lakhs as given below:
(Rs in lakhs)
1. Raw materials 12.50
2. Utilities 3.00
3. Wages & Salaries 8.75
4. Overheads 3.70
5. Selling expenses @ 2.5% on annual sales 1.25
6. Interest on term loan (13.50%) 2.60
7. Interest on Bank Finance for
Working Capital (13.50%) 0.80
8. Depreciation @10% 1.00
33.60
=====
Sales Realization:

The estimated average ex-factory sales realization from the sale of clay bricks (Grade-1 & II) is
Rs 2500/- per 1000 clay bricks. Based on this the annual sales realization is estimated to be Rs
50.00 lakhs.

Profitability:
Based on the sales realization and the operating expenses, the profit would be Rs 16.40
lakhs per year. This works out to a return on investment of 30%. The plant will break even at 49%
of the rated capacity.

Highlight:
The major highlights of the project are as follows:
Total capital requirement : Rs 35.80 lakhs
Promoter’s contribution : Rs 10.50 lakhs
Annual sales realization : Rs 50.00 lakhs
Annual operating expenses : Rs 33.60 lakhs
Annual profit (pre-tax) : Rs 16.40 lakhs
Pre-tax Return on Sales : 32%
Break Even Point : 49%
No.of persons employed : 50
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List of Machinery Suppliers: List of Raw Materials Suppliers:

1. Hi-Tech Machines & Toold, 1. Coal from local coal dealers.

5, Khetra Das Lane,
Kolkata – 700 012
2. M/s Beta Instruments Co. (P) Ltd.,
S. Block,
Plot No. W – 21,
Bhosari,
Poona – 26
3. M/s The Aluminium Industries,
(Machinery Divisions),
Lingampalli,
Ramchandrapuram,
Hydrabad – 32

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