Introduction

The manufacture of auto tubes and flaps is possible well within the investment limit of small-scale industries and a good number of such units are working successfully in different parts of the country. Automobile continues to be the most popular conveyance for the masses and this is going to be so also for a long time to come. In a developing country like India, automobile forms an important mode of transport.

Market Potential

As auto continues to be the most popular mode of transport both in urban and rural areas, the demand for auto tubes and flaps is likely to increase day by- day. Moreover, this is a labour intensive type of unit and can be located in rural areas solving rural unemployment problem, Small Scale Auto Tubes and flaps units can also function as ancillaries to establish large scale manufacturers.

Basis and Presumptions

1. The estimates are drawn for a production capacity generally considered techno-economically viable for a model type of manufacturing activity.

2. The information supplied is based on standard type of manufacturing activities, utilizing conventional techniques of production.

3. The cost in respect of land and building, machinery and equipment, raw materials and the selling price of the finished products etc. are those generally obtained at the time of the preparation of the Project Report.

4. Where as some names of manufacturers/suppliers of machinery and equipments, raw materials are indicated at the end of the profile, these are by no means exclusive or exhaustive.

Implementation Schedule

In the project, land and building has been taken as rented and as such there is no problem of acquisition of land and other formalities. The entire plant and machinery and other equipments have to be purchased and installed. It may take about 3 to 6 months on an average for a concern to go into regular production.

Technical Aspects

Process of Manufacture

Auto tubes are manufactured by moulding method. First of all rubber along with other materials is properly mixed in the two roller mill or a ban bury mixer. This compounded rubber is fed into the extruder and the rubber compound takes the shape of long tube, then proper length of this green tube is cut and tube valve is fitted in this green tube and the end of the tubes are jointed by means of butt joining machine. This green tube is vulcanized in the mould having air pressure inside. After proper vulcanizing it is tested by filling specific amount of air inside for leakage, if any.

Auto flaps are manufactured by the pressure moulding technique in the mould, after making the rubber compound on a two roll mixing mill.

Financial Aspects

A. Fixed Capital

(i) Land and Building
Total Area	500 Sq. m. Price: Rs. 15,00,000.00
Covered Area	200 Sq. m. Price: Rs. 10,00,000.00
Total civil cost	Rs. 25,00,000.00

(ii) Machinery and Equipments

Sl.No.	Description	Nos.	Value (Rs)
i.	Rubber mixing mill 14" ×36" complete with reduction gear, safety devices, chilled cast iron roll with 20 H.P. 3 Phase motor.	2	15,00,00
ii.	Tube extrusion unit complete with reduction gear, size 6" dia with 10 H.P. motor.	1	2,00,000
iii.	Tube molding units complete with hydraulic	4	8,00,000
iv.	Valve tightening machine complete with electric motor and other accessories.	1	20,000
v.	Valve nut punching machine.	1	25,000
vi.	Air removing machine complete with accessories.	1	90,000
vii.	Air compressor complete with 15 HP motor.	1	4,00,000
viii.	Moulding units for flaps complete with Hydraulic pump and other controls.	2	3,50,000
ix.	Boiler rating capacity 150 kg./hr at 150 psi pressure complete with all accessories and pump	1	6,00,000
x.	Weighing balance and miscellaneous tools.	2	80,000
	1. Thickness gauge tester	1	5,000
	2. Hardness tester	1	15,000
	3. Tensile testing	1	1,00,000
	4. Compression testing apparatus	1	10,000
	5. Impact tester	1	20,000
	6. Abrador	1	20,000
	7. Ross flex machine	1	20,000
	8. Ageing block	1	50,000
xi.	Electrification and installation charges @ 10% of cost of machinery and equipment.		4,30,000
xii.	Cost of office equipments/ working table etc.		2,00,000
xiii.	Generator, Transformer and accessories, water, pollution control devices etc.		15,00,000
	Total erected cost of machinery and equipment		64,35,000

B. Working Capital

(i) Personnel Salary and Wages (per month)

Designation	No.	(Rs.)
Manager	1	15,000
Accountant/Storekeeper	2	12,000
Clerk-cum-Typist	1	5,000
Peon	2	6,000
Watchman	3	10,000
Technical Staff
Supervisor	1	8,000
Skilled workers	20	80,000
Unskilled workers	10	30,000
Total		1,64,000
Perquisites @ 22% of Salaries		36,080
Total		2,00,080
Say		2,00,000

(ii) Raw Materials Including Packaging Requirement (per month)

Particulars	Indige-nous/ Imp-orted	Qty. Kg.	Rate pe kg. (Rs.)	Value (Rs.)
1. Smoked Natural Rubber	Ind.	16000	60	9,60,000
2. Synthetic Rubber	do	4000	120	4,80,000
3. China Clay	do	4000	5	20,000
4. Carbon Black	do	2000	50	1,00,000
5. Stearic Acid	do	300	600	1,80,000
6. Zinc Oxide	do	600	105	63,000
7. Sulphur	do	400	40	16,000
8. Valve Fitting	do	28,000 Nos.	2	56,000
9. Processing Oil	do			10,000
10. Chemicals like Accelerator antioxidant etc.	Ind.			20,000
11. Packing material and other expenses	do			30,000
Total				19.35,000

(iii) Utilities (per month)	(Rs.)
I. Power	50,000
II. Fuel	30,000
III. Water	5,000
Total	85,000
(iv) Other Contingent Expenses (per month)	(Rs.)
Rent	Nil
Postage and Stationery	5,000
Telephone	5,000
Advertisement and Publicity	20,000
Transport charges	30,000
Consumable stores	8,000
Repairs and Maintenance	8,000
Insurance	10,000
Miscellaneous expenditure	8,000
Sales expenses	20,000
Total	1,14,000
(v) Total Recurring Expenditure (per month)	(Rs.)
Staff and Labour	2,00,000
Raw Materials	19,35,000
Utilities	85,000
Other Contingent Expenses	1,14,000
Total	23,34,000
(vi) Total Working Capital (3 months basis)	93,36,000
C. Total Capital Investment
(i) Fixed	89,35,000
(ii)Working Capital	93,36,000
Total	1,82,71,000

Machinery Utilization

The proposed project is based on two shifts basis with 16 hours working. Effective working hours will be 14 hours per day/shift. On an average 75% machine utilisation is assumed per shift.

Financial Analysis

1. Cost of Production (per year)	(Rs.)
Total Recurring Cost (per year)	93,96,000
Depreciation on machineries and equipment @10%	6,23,500
Depreciation on office equipment @ 20%	40,000
Interest on total investment @ 12%	21,92,520
Total	1,22,52,020
Say	1,22,52,000

2. Turnover (per year)

Item	Qty.	Rate (Rs.)	Values (Rs.)
Tubes	3,00,000	50	1,50,00,000
Flap	2,00,000	20	40,00,000
Total			1,90,00.000

3. Net Profit (per year)

Profit =	Turnover - Cost of production
=	Rs. 1,90,00,000 - Rs 1,22,52,000
=	Rs. 67,48,000

4. Net Profit Ratio

=	Net profit per year × 100 ------------------------------
	Turn Over

=	67,48,000 ---------------×100
	1,90,00,000
=	35.5%

5. Rate of Return

=	Net profit per year -----------------------× 100
	Total investment

=	67,48,000 ×100 ------------------------------
	1,82,71,000
=	36.9%

6. Break-even Point (% of Total Production Envisaged)

(i) Fixed Cost	(Rs.)
(a) Depreciation on machinery and equipment	6,23,500
(b) Depreciation on office equipment	40,000
(c) Interest on total capital investment @ 12% per annum	21,92,520
(d) Rent of building	Nil
Fixed Cost	(Rs.)
(e) Insurance	1,20,000
(f) 40% of salary and wages	9,60,000
(g) 40% of other contingent expenses	5,47,200
Total	44,83,220
Say	44,83,000

(ii) Net Profit (per year)

B.E.P.	F.C. ×100 ------------------------------
	F.C.+ Profit
	44,83,000×100 ----------------------------- 44,83,000 + 67,48,000
=	39.9%

Addresses of Machinery and Equipment Suppliers

1. M/s. Premier Industries
Station Road, Sirhind,
Punjab.

2. M/s. Anant Industries
Basis Road, Sirhind,
Punjab.

3. M/s. Anant Corporation
Railway Road, Sirhind,
Punjab.

4. M/s. Sunrise Industries
Railway Road, Sirhind,
Punjab.

5. M/s. Rubbermac Industries
Outer bye pass, Sirhind,
Punjab.

6. M/s. Sohal Engg. Works
Off. Haines Road,
Mumbai-140003.

7. M/s. Modern Tyre Moulds India (P) Ltd.
Bhagat Singh Street,
Paharganj,
New Delhi-110055.

Addresses of Raw Material Suppliers

1. Rubber Chemicals

i. I.C.I. India Ltd.
Post Box No. 310
Crescent House,
Ballard Estate,
Mumbai.

ii. M/s. Bayer India Ltd.
Nagin Mahal,
Veer Nariman Road,
Mumbai.

iii.M/s. Monsanto Chemicals of
India Ltd.
318, Asaf Ali Road,
New Delhi

2. Carbon Black

i. M/s. United Carbon India Ltd.
133, Mahatma Gandhi Road,
Mumbai

ii. M/s. Phillips Carbon black Ltd.
Udyog Bhawan, Ballard Estate,
Mumbai

3. Process Oil
M/s. Indian Oil Co.
Unity Building, J.G Road,
Banglore.

4. Zinc Oxide
M/s. Kamani Metallic Oxide Pvt. Ltd.
Nicols Road, Kamani Chamber,
Mumbai.

5. Mineral Fillers and Synthetic Rubber
M/s. Kila Chand Deva Chand Co. Pvt. Ltd.
Rubber Division, 7,
Jamshed Ji Tata Road,
Mumbai.

6. Stearic Acid
M/s. Godrej Soaps (P) Ltd.
3/6, Delise Road,
Mumbai.

7. Rubber (Natural)
Rubber Board, Kottayam,
Kerala.

8. Tripur forest Development Corporation
Agartala.

9. Synthetic Rubber (SBR)
M/s. Synthetics and Chemicals,
Bareilly, U.P.

Contact for more information:

Information Manager
TIMEIS Project
E-mail: timeis@ficci.com