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CHAPTER
PLANT CAPACITY
Consider these to determine the plant capacity: Project cost corresponding to various sizes and whether one has financial resources to meet the cost and whether one is prepared to run a risk commensurate with the project cost
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Minimum economically viable size of plant Popular plant size of existing small-scale enterprises making similar products Comparative capital cost of major plant sizes, within the maximum of the project cost one has estimated, offered by machinery producers and their operating income/expenditure implications. A comparison of net financial impact of individual plant sizes. Market size and growth prospects (biscuit market in India is growing rapidly and a well-organised promoter may find himself unable to meet the demand, if he chooses too small a market size) SSI in India gets benefit in excise duty and interest rate concessions. But there is a legal ceiling on the investments in plant and machinery to avail these concessions. No wonder, most plants are priced just around that ceiling. You may choose a size matching the ceiling, for exceeding it will deprive you of excise/interest benefits. The cost of expanding the plant capacity vis--vis setting up a larger plant must be considered for it might be cheaper to establish a larger plant of 5 MT per day than to expand capacity from 2 MT to 5 MT.
MANPOWER REQUIREMENT
You will need manpower for: Production (Workers) Supervision (Technicians) Administration, sales, miscellaneous work (Staff) In a small unit, it is possible that the entrepreneur handles administration, sales and technical supervision, and thus have limited manpower needs. It is, however, important to analyse workload and arrive at a gross manpower need. Manpower requirements will be decided by manufacturing operations, material handling and packing jobs. It is useful to classify your manpowerneed in three categoriesskilled, semi-skilled and unskilled. The wage rate for each category varies. Special attention should be paid for hiring and retaining skilled workers.
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Look at the availability of skills at the selected location and plan for their recruitment. It may be, for instance, difficult for a biscuit manufacturing unit in Himachal Pradesh being established at Parwanoo to source biscuit machine operators locally. They may have to be brought from Delhi/Chandigarh. It is difficult to find skilled people in industrially backward areas and may have to be scouted for in nearby towns. Arrangements will have to be made for technical and other staff also. Such employees expect better living conditions or compensation and wont move in otherwise.
SELECTION
OF
LOCATION
Ideally one may want to locate the project in ones home town or native place, but there may be a problem of high land price if that place is a large city. Usually, the government offers investment subsidy and tax concessions to enterprises in specified areas. One must be aware of various physical and commercial facilities to run an enterprise. The hometown or native place may not be an ideal choice. Various parameters need to be considered while deciding a location. One will then have to select a sitea specific piece of land in a given town where the enterprise will be located. Sometimes, one may also have to drop a location for want of a good site. How should one go about location/site selection? We recommend a twostage procedure. Practically, only a few locations will merit consideration. In the first stage, identify two-three such locations. Identify one or two sites at each location. In the second stage, examine each location/site according to a six-dimension selection checklist: Basic consideration (development status of the town and its location vis--vis enterprise needs) Status of physical infrastructure (power, water, etc.) Status of commercial infrastructure (telecom, banking, etc.) Status of social infrastructure (housing, health, etc.) Financial incentive position (investment subsidy, tax concessions etc.) Site-specific considerations (land price, contours, etc.)
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Chapter Eight
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Following is a model layout plan for a jelly and jam manufacturing unit:
PACKING
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