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Product Code	:	29105, 529107, 29111 and 29112
Quality and Standards	:	N.A.
Production Capacity	:	Quantity: 550000 Nos. (per annum) Value : Rs. (per annum)
Uploaded on	:	May 2007

Introduction

Fire clay refractories are commonest of all refractories. Fire clay refractories containing less than 40% alumina are classified into: (1) Medium heat duty, and (2) High heat duty fire clay refractories with alumina content of over 30% but below 40%. Fireclay refractories are made into bricks and blocks of various standard sizes and shapes and also as per specific requirement of user industries.

Market Potential

Fire clay refractory products are used by almost every industry, which has heat processing in the production process Iron and steel, cement, petrochemicals, sugar, non-ferrous metal, glass and ceramic industries are some of the user industries. Iron and Steel industries account for 75% of the consumption of refractories. Thus, the demand for refractories is dependent on the growth of iron and steel industries in the country.

Basis and Presumptions

Efficiency: 75% efficiency of manpower and machinery is considered. It is envisaged that the kiln will run its complete cycle uninterrupted, pressing operations for 3 shifts a day and other operations on a single shift of 8 hours and for 300 days in a year.

Time Period: Full capacity utilisation is expected to be achieved within one year from the commencement of production.

Labour Wages: The minimum applicable wages are taken into account.

Interest Rate: 13% per annum on total investment is taken into account.

Margin Money: 25% of the total investment may be brought in by the promoters.

Pay Back Period: About 3½ years.

Land Cost and Construction Cost:

a) Land Cost: Rs. 2000 per sq.mtr.

b) Construction Cost: Office and stores: Rs 5000 per sq.mtr and Working shed: Rs. 5000 per sq.mtr.

Implementation Schedule

Sl. No.	Activity	Period (in months)
1.	Selection of site Provisional registration from DIC	2
2.	Availability of finance Construction of building Procurement of Machinery and Equipment Availability of Electrical Power Erections and Commissioning	4
3.	Recruitment of manpower Trial runs and commencement commercial production	2
Total implementation period		8

Technical Aspects
Process of Manufacture

Raw Materials: Fire clays of both plastic and non-plastic varieties, refractory grog (broken fire bricks) and other high alumina minerals like kyanite, sillimanite and bauxite are the raw materials for making fire clay bricks and blocks.

Processing: Fire clays, plastic clays, non plastic materials like grog and other high alumina materials are procured in powdered form. Non plastic materials are screened in vibratory screen into various particle sizes, viz., coarse, medium, and fine varieties. The finely ground fire clays and non-plastic materials of various particle sizes are mixed in suitable proportions to form a batch. The batch is added into the Muller mixer. The addition of water is varied to form consistent mixture either for dry or semi dry pressing in the case of standard size fire clay bricks or for pneumatic ramming in the case of fire clay blocks and special shapes.

Drying: While dry pressed fire clay bricks are ready for stacking in the kiln for firing with little or no drying time, fire clay blocks and special shapes moulded by pneumatic ramming and hand moulding are loaded into the kiln only after being allowed for sufficient drying.

Firing: Likewise any other refractories, pre-determined timetemperature cycle is followed for firing of fire clay bricks and blocks 1350ºC–1400ºC being the optimum firing temperature.

Quality Control and Standards

IS 1526	Sizes and shapes for fire clay bricks (230 mm series)
IS 5459	Sizes and shapes for fire clay blocks (300 mm and higher series)
IS 6	Moderate heat duty fire clay refractories, Group-A
IS 8	High heat duty fire clay refractories
IS 4041	Glossary of terms relating to refractory materials.

Production Capacity (per annum)

Quantity	: Fireclay Bricks and Blocks: 550000 Nos.
Value	24300000

Motive Power

50 HP.

Pollution Control

Cyclonic dust collectors, exhaust and combustion control are required to be installed with the machineries.

Energy Conservation

Provided in the estimate for oil fired kiln. It is envisaged that appropriate furnace insulation brick/ceramic fibre curing and fuel efficient combustion system will be incorporated in the kiln.

Financial Aspects
A Fixed Capital

(i) Land and Building

Particulars	Sq. Metres	Rate (Rs.)	Value (Rs.)
Land	2500	2000	5000000
Built-up Area Office and Stores	100	5000	500000
Workshed	600	5000	3000000
Total			8500000

(ii) Machinery and Equipments

Description	Imp/ Ind.	Qty. (Nos.)	Rate (Rs.)	Value (Rs.)
a) Production Unit
Vibrating screen with 3 HP motor and other accessories	Ind.	1	33000	33000
Double shaft U-Mixer (capacity: 2 tons per shift) with 10 HP motor and other accessories	Ind.	1	90000	90000
Muller mixer (pan size 6'dia) with 10 HP motor and other accessories	Ind.	1	105000	105000
Frictional screw press (150 tonnes) with 20 HP motor and other accessories	Ind.	1	700000	700000
Oil fired kiln (45-50 cubic meters) complete with chimney, oil storage tank, compressed air and oil supply and pre-heating system and 4-6 burners	Ind.	1	1300000	1300000
Pneumatic rammers	Ind.	4	25000	100000
Total				2328000
b) Testing Equipment
CCS testing machine	Ind.	1	45000	45000
RUL Machine			200000	200000
Muffle furnace	Ind.	1	220000	220000
Drying oven	Ind.	1	50000	50000
Shaking equipment Sieve	Ind.	1	30000	30000
Misc. lab. Items	Ind.	LS	30000	30000
Total				575000
Electrification and installation charges @ 10% of cost of machinery and equipment				290300
Total cost of machinery and equipment				3193300
Cost of moulds, tools and other fixtures				200000
Cost of office equipment/working tables etc.				200000
(iii) Pre-operative Expenses				60000
Total fixed capital				3653300

B. Working Capital (per month)

(i) Personnel (per month)

Designation	Nos.	Salary / (Rs.)	Total (Rs.)
Administration and Supervisory
Manager	1	10000	10000
Supervisor	2	7000	14000
Salesman	1	8000	8000
Clerk	2	5000	10000
Watchman	2	3000	6000
Technical: Skilled and Semi or Unskilled
Skilled workers	10	5000	50000
Unskilled workers	15	4000	60000
Technician (Mechanical)	1	6000	6000
Total Salaries			164000
Perquisites @ 22% of salaries			36080
Total			200080

(ii) Raw Materials

Particulars	Imp/ Ind	Qty	Rate (Rs.)	Value (Rs.)
Fire clays	Ind.	150 T	1500/ton	225000
High alumina grog	"	60 T	2000/ton	120000
Kyanite/ sillimanite	"	40 T	8000/ton	320000
Total				665000

(iii) Utilities (per month)	(Rs.)
Furnace oil or LDO: 20 kL @ Rs. 35000 per kL	700000
Power: 2300 kWH @ Rs. 5.00 per kWH	11500
Water: 200 KL @ Rs. 25.00 per kL	5000
Total	716500

(iv) Other Contingent Expenses (per month)

Particulars	Value (Rs.)
Postage, stationery, telephone, taxes	7000
Consumables, repairs and maintenance	10000
Transport charges	10000
Advertisement and Publicity and sales expenses	5000
Misc. expenditure	5000
Insurance	2000
Total cost of Contingent expenses	39000
Total Recurring Expenditure per month	1620580
(v) Total Working Capital (on 2 months basis)	3241160

C. Total Capital Investment

Fixed Capital	11693300
Working Capital	3241160
Total	14934460

Machinery Utilization

Machinery utilization of 75 percent has been considered in the project.

Financial Analysis
(1) Cost of Production (per year)

Description	Value (Rs.)
Total recurring cost	19446960
Depreciation on building @ 5%	425000
Depreciation on kiln @ 20%	260000
Depreciation on moulds and tools @ 25%	50000
Depreciation on Machinery and Equipment @ 10%	102800
Depreciation on testing equipment and office equipment at 20%	155000
interest on capital investment at 13%	1941479.8
Total	22381239.8

(2) Turnover (per year)

Items	Qty	Rate (Rs.)	Value (Rs.)
Medium Heat Duty Fireclay Refractories	1200 tons
Fireclay Bricks	150000 Nos.	30	4500000
Fireclay Blocks	100000 Nos.	60	6000000
High Heat Duty Fireclay Refractories	1600 tons
Fireclay Bricks	200000 Nos.	35	7000000
Fireclay Blocks	100000 Nos.	68	6800000
Total			24300000

(3) Net Profit (per year)	=	Rs. 24300000 – 22381239.8
	=	1918760.2

(4) Net Profit Ratio	=	Net profit per year x 100 --------------------
		Sales Turnover per year

	=	1918760.2x 100 ---------------
		24300000

	=	7.9

(5) Rate of Return	=	Net profit per year x 100 ---------------------------
		Total Capital investment

	=	1918760.2× 100 ----------------------
		14934460

	=	12.85

(6) Break-even Point (% of Total Production Envisaged)
(i) Fixed Cost (per year)

Description	Value (Rs.)
Total Depreciations	992800
Interest on total investment	1941479.8
Insurance	24000
40% of salaries and wages	960384
40% of other contingent expenses (excluding insurance)	177600
Total	4096263.8

(ii) Net profit (per year)

1918760.2

B.E.P	=	Fixed Cost × 100 -----------------------
		Fixed Cost + Net Profit

	=	4096263.8 x 100 -----------------------
		4096263.8 +1918760.2

	=	4096263.8 x 100 -------------------------
		6015024

	=	68.1

Addresses of Machinery and Equipment Suppliers

1. M/s. Amic Industries (P) Ltd.
10, BT Road,
Kolkata-700 036.

2. M/s. Hindustan Engineering Co.
1 and 3/7, Gopalal Tagore Road,
Kolkata-700 035.

3. M/s. Keshab Machinery (Pvt.) Ltd.
Bose Park, Sukchar,
24 Parganas, (West Bengal)

4. M/s. Simplicity Engineers (Pvt.) Ltd.
LB-99, Mayapuri,
New Delhi-110 064.

5. M/s. Wesman Thermal Engg. Process Pvt. Ltd.
269, 18th Main Road,
RMV Extension,
Bangalore-560 080.

6. M/s. Cerakiln Consultants
No. 1, 9th Main, 30th Cross,
BSK II Stage,
Bangalore-560 050.

Raw Material Suppliers

1. M/s. Mysore Minerals Ltd.
39, M G Road,
Bangalore-560 001.

2. M/s. Maruthi Enterprises
LF 13/9, 4th Main,
BTM Layout, II Stage,
Bangalore-560 076.

3. M/s. Industrial Minerals and Refractors
No. 17, Nissen House,
2nd Cross Road, Austin Town,
Bangalore-560 047.

4. M/s. Mineral Processing Industry
Plot No. 180, III Phase, 11th Main,
Peanya Indl. Area,
Bangalore-562 140.

5. M/s. Southern Enterprises
C-265, Peanya Indl. Estate,
I Stage, Bangalore-560 058.