ALUMINUM RIVETS

PRODUCT CODE : NA

QUALITY AND STANDARDS : IS: 2907-1998

ASTRU AS-280:66 Jan 2004

PRODUCTION CAPACITY : 96 MT
Value : Rs. 2,13,60,000/-

MONTH AND YEAR : June, 2014

OF PREPARATION

PREPARED BY : Dr. Amarnath

Assistant Director (Metallurgy)

1. INTRODUCTION
A rivet is a permanent mechanical fastner. Before being installed, a rivet
consists of a smooth cylindrical shaft with a head on one end. The end opposite the
head is called the buck-tail. On installation the rivet is placed in a punched or drilled
hole, and the tail is upset, or bucked (i.e., deformed), so that it expands to about 1.5
times the original shaft diameter, holding the rivet in place. To distinguish between
the two ends of the rivet, the original head is called the factory head and the
deformed end is called the shop head or buck-tail. Because there is effectively a head
on each end of an installed rivet, it can support tension loads (loads parallel to the
axis of the shaft); however, it is much more capable of supporting shear loads (loads
perpendicular to the axis of the shaft). Bolts and screws are better suited for tension
applications
Aluminum Rivets has abundant application in automobile industries. Present
scheme is made for Aluminum solid rivets and Aluminum solid alloy rivets as per
requirement of industry.

2. MARKET POTENTIAL
India is one of most developing economy of Asia. The market potential for
service industry in general and road transport in particular has seen fastest growth
in last two decades. Automobile industry in the country has increased to its fastest
pace during last three decades. The economic status of the public is improving. Due
to liberalized government policies it will be grown even more. Keeping in view the
future trend for more vibrant road transport system the demand for Aluminum
Rivets is expected to rise in years to come.

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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 and cost of staff and labor 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. 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;
Preparation of Project Reports 1st month
Filling of EM and other necessary registration 2nd month
Selection of site 2nd month
Arrangement of finance/loans 3rd – 5th month
Land acquisition & construction of building 6th – 9th month
Procurement of Machinery & equipment 10th – 13th month
Recruitment of Staff & Labour 14th month
Installation of Machinery and Equipments 15th month
Trial Production 16th month
Commercial Production 16th month

5. TECHNICAL ASPECTS
5.1. Process of Manufacturing
The project is envisaged to produce Aluminum Rivets and Aluminum Solid
Alloy Rivets of different diameter and length as per market demand. The rivets shall
be made by cold forging and shall subsequently be appropriately heat treated, if
necessary. The processes involved in manufacturing of Aluminum Rivets are as
under;

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Raw material (Receipt of Aluminum Wire rod)

Inspection of raw material

Drawing of wire into required size

Inspection of wire

Feeding of Aluminum wire in cold heading machine

Inspection of Rivets

Heat Treatment, if necessary

De-greasing of Rivets

Random sampling and Inspection

Weighing and Packaging

Inspection

Dispatch

5.2. Quality Control and Standards

There will a devoted testing laboratory for inspection of chemical composition
of raw material as well as end material’s hardness and strength. The Bureau of
Indian Standards has also brought out specifications for manufacturing of
Nonferrous rivets specification as per IS 2907-1998. Aluminum rivets shall be made
from Aluminum rivet stock conforming to IS 740.

5.3. Production Capacity

Quantity – 96 MT (per annum); Value – Rs. 2,13,60,000/-

5.4. Motive Power

Total power requirement is about 30 H.P.

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5.5. Pollution Control

This industry will not create any pollution hazards.

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. 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. Total area 4000ft2
2. Rent of Covered Area 3000 ft2 @ Rs.10.0 per ft2 30,000/-
3. Rent Uncovered area 1000 ft2 @ Rs. 8.0 per ft2 8,000/-
4. Total Rent 38,000/-

6.1.1. Machinery and Equipments

S. Amount
Description of Machine Quantity
No. (Rs)
(a) Production Unit
1. High Speed Wire Rolling Machine with 7.5 HP motor 1 2,50,000
2. Single Die Wire Drawing Machine with 5 HP motor 1 1,25,000
suitable for drawing from 6 SWG to 12 SWG
3. Double Die Wire Drawing Machine with 5 HP motor 2 1,80,000
suitable for drawing from 12 SWG to 16 SWG
4. Bobbin winding machine with ½ HP Motor 1 15,000
5. Cold Heading(Forging) Machine 8 2,40,000
6. 6” lathe machine with 3 HP motor 1 1,00,000
7. 1” Capacity drill machine with 1 HP motor 1 35,000
8. Flexible shaft grinder with 1 HP motor 1 15,000
9 Pointing machine with 1 HP motor and starter 1 20,000
10. Tapping Machine 1 25,000
11. Wire Butt Welding machine 10 KVA 1 18,000
12. De-Greasing Machine 1 15,000
13. Oil fired annealing furnace of size 2m x 4m x 3.5m 1 2,50,000
with 5 HP motor and fan arrangement.

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S. Amount
Description of Machine Quantity
No. (Rs)
(b) Testing Equipments
14. Hardness testing machine 1 75,000
15 Universal Testing Machine(UTM) 1 3,20,000
16. Weighing scale 1 20,000
17. Chemical Testing Equipments with accessories LS 2,00,000
Total 19,03,000
(c) Energy Conservation Facilities 50,000
Total (a ,b, c) 19,53,000
(d) Electrification and Installation Charges @ 10% 1,95,300
(e) Dies and fixture L.S. 50,000
(f) Office equipment and furniture L.S. 1,25,000
TOTAL (a,b,c,d,e, f) 23,23,300

Preoperative expenses like legal, establishment, traveling, Rs. 1,50,000/-

Startup consultancy, telephone, electricity connections etc

Total Fixed Capital Rs. 24,73,300/-

6.2. Working Capital (per month)

6.2.1. Personnel
S.No. Designation Nos. Salary (Rs.) Total (Rs.)
a) Administration
1. Works Manager 1 12,500/- 12,500
2. Supervisor 1 9,500 9,500
3. Accountant cum clerk, typist 1 8,500/- 8,500
4. Peon-cum-watchman 2 7,500/- 15,000
b) Workshop
5. Chemist 1 9,500/- 9,500
6. Skilled Worker 3 9,000/- 27,000
7. Semi-skilled Worker 4 8,500 34,000
8. Un Skilled Worker 4 7,500 30,000
Total 1,46,000
Add perquisites etc. @ 15% 21,900
Total 1,67,900

6.2.2. Raw Materials including Packaging Materials

Aluminum Wire Rod 8.5 MT @ Rs. 1,40,000/ MT = Rs. 11,90,000/
Total = Rs. 11,90,000/

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6.2.3. Utilities
Power = 2000 Unit @ Rs.6.50/- per unit Rs. 13,000/-
Water = LS Rs. 2,000/-
Furnace Oil = 500 ltr.@ Rs. 51 /Ltr Rs. 25,500/-
Total Rs.40,500/-

6.2.4. Other Contingent Expenses (Per Month)

S.No. Particular Amount (In Rs.)
1. Rent 38,000
2. Transport expenses 1,500
3. Stationery and Postage etc 1,500
4. Telephone & fax etc 1,500
5. Insurance 1,000
6. Advertisement & Publicity 10,000
7. Repair, Maintenance and Replacement 12,000
8. Consumable stores 2,500
9. Miscellaneous 2,000
Total 70,000

6.2.5. Total Recurring Expenditure (per month) Rs. 14,68,400/-

6.3. Total Capital Investment

Fixed Capital Rs. 24,73,300
Working Capital for 3 months Rs. 44,05,200
Total Rs. 68,78,500/-

Machinery Utilisation
75% machinery utilization is considered for achieving the projected capacity
of finished products. The bottleneck is on cold heading (Forging) operation where
rivets of various specifications depending on length and diameter of Aluminum
Rivets are manufactured as per demand. The project is prepared as per output of this
operation.

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7. FINANCIAL ANALYSIS
7.1. Cost of Production (per annum in Rs.)
1. Total Recurring Cost 1,76,20,800
2. Total Depreciation (a+b+c+d) 4,79,660
a. Depreciation on Machinery and Equipment excluding 3,79,660
furnace @ 20% (for Rs 18,98,300)
b. Depreciation on furnaces @ 25% ( for Rs. 2,50,000/) 62,500
c. Depreciation on dies and fixture @ 25 % for Rs. 50,000 12,500
d. Depreciation on office equipments @ 20 % ( for Rs.1,25,000) 25,000
3. Interest on total Capital @ 11.5 %( Approx.) 7,91,028
Total(1+2+3) 1,88,91,488
Say 1,88,91,500

7.2. Turnover (per annum)

S.N. Item Quantity (MT) Rate/ ton Value (Rs.)
1. Aluminum Rivets and 96 2,15,000 2,06,40,000
Aluminum Solid Alloy
rivets
2 Scrap 6 1,20,000 7,20,000
Total 2,13,60,000

7.3. Net Profit (per annum)

= Turnover – Cost of Production
= Rs. 2,13,60,000 - 1,88,91,500
= Rs. 24,68,500/-

7.4. Net Profit Ratio

Net profit per year
= X 100
Turnover per year

24,68,500
= X 100
2,13,60,000

= 11.6 %

7.5. Rate of Return

Net profit per year
= X 100
Total Capital Investment

24,68,500
= X 100
68,78,500

= 35.9 %

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7.6. Break-even Point

Fixed Cost (Per Annum) (Rs.)
Total Depreciation 4,79,660
Rent 4,56,000
Interest on total capital investment 7,91,028
Insurance 12,000
40% of Salary and Wages 8,05,920
40% of Other Contingent Expenses excluding rent and 1,48,800
insurance ( Rs 12,000)
Total 26,93,408

B.E.P
Fixed Cost
= X 100
Fixed Cost + Net Profit

26,93,408
= X 100
26,93,408 + 24,68,500

= 52.2 %

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Address of Machinery & Equipment Suppliers

1. M/s. Mahavir Engineering Corporation

1, Ambika Estate, Behind Agarwal, Indl. Estate, Off. S.V. Road,
Jogeshwari (W), Mumbai – 400002

2. M/s. Nisha Engineers and Consultants

Nisha Enclave, Plot No. 95, Sec - 23, Codco Indl. Area
Turbhe, Mumbai – 400613

3. M/s. Electroll Super Thermal Engineers

151, Small Factory Area, Lakadganj, Nagpur - 440008.

4. M/s. Mechachem Industries

D-55, M.I.D.C., Nagpur - 440028.

5. M/s. R.R. Khandelwal Steel and Allied Industries Pvt. Ltd.

Ghat Road, Nagpur - 440018.

6. M/s. Krystal Elmec

Ichalkaranji Indl. Co-op. Estate Ltd.
Common Hall No. 5, Block No. 8/9, Ichalkaranji – 416115

7. M /s Khurana Enterprises
Near Subhash Putla, Sataranjipura, Nagpur - 8.

8. M/s. AARPEE Enterprises (Jaya Group)

4950, 4th Floor, Bussi Plaza, Central Bazar Road,
Ramdaspeth, Nagpur - 10

9. M/s. Fuel Instruments and Engineers Pvt. Ltd.

68 to 69, Parvati Co-op. Indl. Estate, Yadrav, Tah. Shirol,
Kolhapur - 416145.

Raw Material will be procured from open market.

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