PRE FEASIBILITY STUDY HOSIERY FABRICS Socks & Vests

Presented by:

Abhinav Kumar, Ahmad Sarosh , Singh Rajat B. Surabhi Lodha, Yaman Dhingra DFT VI NIFT, Jodhpur

OVERVIEW
Hosiery sector - one of the key components of Indian clothing industry. Also referred to as leg wear, describes garments worn directly on the feet and legs. Modern hosiery is usually tight-fitting by virtue of stretchy fabrics and meshes. TYPES- Body stockings ,Compression stockings ,Knee highs, Leggings, Socks, tube socks , Stockings, Toe socks etc.

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LOCATION- Ludhiana
Address: Rahon Road, Village Seera, Ludhiana-141007 Reasons for setting the factory Ludhiana is a leading industrial town of the north Indian State of Punjab and an important centre of textile and allied industry. Leading producer of woollen and acrylic knitwear, it also uses extensively cotton and other blended fibres to produce a wide range of fabrics, hosiery, knitwear and ready-made garments. The presence of local suppliers of fabric that will reduce the transportation cost greatly and the lead time simultaneously.

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RAW MATERIAL SUPPLIERS

Domestic
R.K. Gupta Hosiery Simplex knitwears Adinath knits B.S. Sharma Hosiery

Others
Shri Balaji Knits Pytex Hosiery Ganga Hosiery Factory Kartaram Hosiery Factory

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MARKET
Ludhiana has a large number of buyers of hosiery particularly socks and vests, both domestic as well as others. Setting up a new factory can cater to growing demands of the local buyers and can be sent out at low transportation costs in district of Ludhiana.

BUYERS
Swadeshi Woollen Mills (Vest) Sheriff International (Vest) Sunamia Knitwears (Shock, Vest) 7x International (Socks) Anmol Knitters (P) Ltd. (Socks)

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SOCKS
OVERVIEW
Socks of various types and designs can be produced by using cotton yarn, acrylic yarn, and polyester yarn, nylon yarn of different counts, quality and shades.

MARKET
The largest consumers of socks are the Europeans and Western countries who have been using this item as part of their dresses for a very long period. The European and Western countries have been producing socks, from where these items used to be imported into India and other countries.
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TECHNICAL FEASIBILITY
Socks are knitted in continuous process and several operations are performed before it is completed. Knitting is done in stages beginning with elastic portion for which elastic yarn is used. The leg portion is knitted followed by heel and foot portion ending up with the toe portion of the socks. The toe portion of socks is closed by stitching on Overlock machine. Production Capacity (Per Annum) Product Plain Socks Terry Socks Total
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Quantity 1,00,000 70,000 1,70,000

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Value (Rs.) 30,00,000 2100000 48,00000

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FINANCIAL ASPECTS
A. FIXED CAPITAL

Elements
Land and Building Machinery Equipments Other Fixed Assets

Cost (Rs.)
6,72,000 1,37,25,000 10,95,000 17,60,000

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B. WORKING CAPITAL (PER MONTH) Elements

Labour and wages Raw material Utilities (per month) Other contingent expenses (per month) Total recurring expenses Total working capital for 3 months

Cost (Rs.)
1,61,200 16,785,00 1,17,000 80,000 20,45,200(per month) Rs. 70,57,500

C. TOTAL CAPITAL INVESTMENT Elements

Machinery and equipment Working capital for 3 months Total
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Cost (Rs.)
Rs. 1,65,80,000 Rs. 70,57,500 Rs. 2,36,37,500
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FINANCIAL ANALYSIS
COST OF PRODUCTION (Per Year) Elements Cost (Rs.) 2,82,30,000 13,72,500 10,000

Recurring Expenses
Depreciation On Machinery @ 10% Depreciation On Office Furniture @ 20% Depreciation On Equipments @ 25% Interest On Total Investment @ 14% Total

2,73,750 33,09,250 3,29,21,750

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 TURNOVER (Per Year) (Sales)

Product Rate/Dz pair(Rs.) Plain Socks(Doz. 480 pairs) Terry Socks (Doz. 564 pairs) Total

Qty. 1,00,000 70,000 1,70,000

Amount (Rs.) 40,00,000 32,90,000 72,90,000

Net Profit (per year) Net Profit Ratio (Net profit/Turnover per year)

Rs. 24,90,000 34%

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VESTS
OVERVIEW Knitted undergarments are used and liked by the people because of its good drape-ability, stretch ability, softness and absorbency of sweat characteristics. -TECHNICAL ASPECTS Procurement of Knitted Fabric

Cutting and Stitching

Washing, Checking, Pressing and Packing

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PRODUCTION CAPACITY (Per Annum)

PRODUCT Cotton Knitted String Vests Plain Knitted Cotton Vests Interlock Cotton Knitted Vests Total

QUANTITY(DZ) 20,000 23,000 21,000

VALUE (Rs.) 6,00,000 7,36,000 7,35,000

64,000

20,71,000

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FINANCIAL ASPECTS
A. FIXED CAPITAL ELEMENTS Machinery Equipment Other Fixed Assets

COST (RS.) 10,65,000 10,95,000 12,10,000

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 B. WORKING CAPITAL (Per Month)

ELEMENTS Labour and wages Raw material Utilities (per month) Other contingent expenses (per month) Total recurring expenses Total working capital for 3 months COST (RS.) 3,88,500 4,48,200 33,000 80,000 10,38,200(per month) Rs. 31,14,600

C. TOTAL CAPITAL INVESTMENT

ELEMENTS Machinery and Equipment Working capital for 3 months Total
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COST (RS.) Rs. 55,30,000 Rs. 31,14,600 86,44,600

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FINANCIAL ANALYSIS
COST OF PRODUCTION (Per Year)

ELEMENTS Recurring Expenses Depreciation On Machinery @ 10% Depreciation On Office Furniture @ 20% Depreciation On Equipments @ 25% Interest On Total Investment @ 14% Total
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COST (Rs.)
12,458,400 1,06,500 10,000

2,73,750 12,10,244 1,40,58,894

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TURNOVER (Per Year) (Sales) PRODUCT RATE/DZ PAIR (RS.)

Cotton knitted string vests Plain knitted cotton vests Interlock cotton knitted vests Total 64,000 28,85,000 540 23,000 10,35,000 480 20,000 8,00,000

QTY.

AMOUNT (Rs.)

600

21,000

1,05,000

Net Profit (per year) Net Profit Ratio (Net profit/Turnover per year)

Rs. 8,14,000 28%

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REFERENCES
http://turnkey.taiwantrade.com.tw/en/Content.aspx?ID=54

http://turnkey.taiwantrade.com.tw/en/Content.aspx?ID=40
http://www.ludhianadistrict.com/ludhiana-hosiery-garments.php

http://www.slideshare.net/waqarhussain00/socks-manufacturingunit-waqar-hussain

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THANK YOU

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