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Product Code	:	N.A
Quality and Standards	:	IS 3316:1974 Structural Granite
Production Capacity	:	Quantity : 75000 Nos. Value : Rs. 8250000
Uploaded on	:	May 2007

Introduction

Granite is the most beautiful and reliable material for the building industry. It is used as a building material in the form of tiles and slabs and is a modular element for flooring, internal and external cladding, steps, sills, etc., in houses, offices, hotels, restaurants, hospitals, temples, etc. It is also used in the monuments.

Granite has been scarcely used in the past on account of high degree of hardness and difficulties in processing. The development of new and advanced technology and machinery has made it possible for the granite industry to reduce its production costs and considerably increase its production capabilities.

Market Potential

India is the second largest producer of granite after South Africa. Besides a good domestic demand due to steady growth in the commercial complexes and other building industry, there is a good export potential for granite tiles. India has an established market in Singapore, Taiwan, Australia, Japan, USA, UK, Italy and Germany. Although there is an export potential for the product, with the envisaged scale of operation, it is advisable to concentrate on domestic market initially before stepping in for an ambitious export market.

Basis and Presumptions

Efficiency: It is envisaged that the unit will run for 8 hrs a day and 300 days in a year. 75% efficiency of manpower and machinery is considered.

Time Period: Full capacity is expected to be achieved within 6 months of trial production.

Labour Wages: Minimum applicable wages are considered.

Interest Rate : 13% per annum is taken into consideration.

Margin Money: One-third of the total capital investment may be brought in by the promoter (s).

Pay back Period: About 4 years.
Land Cost and Construction Cost:
Land Cost Rs .2000 per sq. metre

Construction Cost Office and Stores: Rs. 5000 per sq. metre
Work Shed: Rs. 5000 per sq. metre

Implementation Schedule

Sl. No.	Activity	Period (in months)
1.	Preparation of the project report Selection of site Provisional registration	2
2.	Availability of finance Construction of building, Procurement of machinery and equipment, Availability of electrical power	3
3.	Erection and commissioning, Trial runs, Recruitment of manpower	1
Total Implementation Period		6

Technical Aspects
Process of Manufacture

Granite blocks of 1 cft and 2 cft in size are procured from quarry owners. Blocks of various colours and shades are to be chosen depending on the customers requirements. Varieties of granite are available in various colours and shades in Karnataka, Maharashtra, Andhra Pradesh and Rajasthan. These are Himalayan blue, Ilkal red, Cherry blossom, Blue rose, S K fantasy, Kanakpura multi colour, Hassan green, etc.

Granite blocks are fed into a fully automatic circular sawing machine for slicing. The spacing between the cuts is preset depending on the thickness of tiles to be required. The depth of the cut is adjusted depending on the hardness of the granite. The hardness varies depending on the varieties of granite. Diamond segmented blade is used for cutting or slicing in which, water is the coolant. Water re-circulation system is suggested for minimizing water consumption.

The tiles could be of different sizes viz. 6" × 6", 12" × 12" and 12" × 24". The thickness of the tiles ranges between 10 mm and 20 mm.

The sliced granite is sent for further processing in the following sequence:

a) Rough surface grinding
b) Smooth surface grinding
c) Polishing

For the above three processes different grades of abrasive powders and polishing heads are used. Manual mode of operation of the machine is suggested for the above three processes. Polishing heads are replaceable for different operations on a single machine. Alternatively, three operations can be done on three different machines for increased production.

After polishing the individual tiles can be fed into an edge-cutting machine with double blade for parallel cutting of the two edges. Then, the tiles are positioned so that the other two parallel edges are also cut.

Double blade edge-cutting machines are preferred over single blade edge-cutting machine because sizes are more accurate and 90º is easily maintained between the adjacent edges. Water is used as coolant.

Edge polishing may be done with abrasive stones manually or portable machines.

Finished tiles are inspected for accuracy in size, mirror polish, etc. Tiles with any visual defects in polishing are avoided.

Quality Control and Standards

The Bureau of Indian Standards has published the following standard for structural granite: IS 3316:1974 Specification for structural granite (first revision), Reaffirmed 1987.

According to the above specification, the product should be free from flaws, injurious veins, cavities and similar imperfections that would impair its structural integrity and would adversely affect its strength and appearance.

Besides the above attributes, the above standard also specifies requirements for the following parameters:

Size tolerance: + 2 mm in length and breadth + 1 mm in thickness.

Water absorption: Not more than 0.50%.

Compressive strength: Not less than 1000 Kgs/sq. cm.

Specific gravity: Not less than 2.6

Production Capacity (per annum)

Granite tiles size	Quantity (Nos.)	Price (Rs.)	Value (Rs.)
6" x 6"	50000	140	7000000
12" x 12"	20000	225	4500000
12" x 24"	5000	625	3125000
Total	75000		14625000

Motive Power

80 HP.

Pollution Control

Storage pits for slurry included

Energy Conservation

Nil.

Financial Aspects
A Fixed Capital

(i) Land and Building

	Sq. Metres	Rate (Rs.)	Value (Rs.)
Land	1000	2000	2000000
Built Area Office and Stores	100	5000	500000
Working Shed	400	5000	2000000
Construction of pits for waste slurry storage, etc.			100000
Total			4600000

(ii) Machinery and Equipments

Description	Imp/ Ind.	Qty. (Nos.)	Rate (Rs.)	Value (Rs.)
Production Unit
Circular sawing machine (automatic), max. Cutting depth 375 mm, diamond segmented circular saw of 1000 mm dia., 25 HP main motor, 1 HP elevating motor and other accessories	Ind.	2	700000	1400000
Double blade edge cutting machine (manual), max. work size: 450x450 mm, vertical movement: 80 mm, diamond segmented blade (200 mm dia.), 2 HP motor and other accessories	Ind.	3	180000	540000
Heavy duty polishing machine (manual), max. polishing area: 600x1200 mm, vertical movement: 200 mm, 3 HP motor, polishing heads and other accessories	Ind.	6	80000	480000
Testing Equipment				Nil
Pollution control equipment				Nil
Storage pits for waste slurry included in construction Energy conservation equipment				Nil
Sub Total				2420000
Electrification and installation charges At 10% of cost of machines and equipment.				242000
Total				2662000
Cost of diamond segmented saws, polishing heads, etc.				450000
Cost of office equipment, working tables, etc.				141000
Total				3253000

(iii) Pre-operative Expenses	Rs. 240000
(Project report cost, non-refundable deposits, etc.)
Total Fixed Capital (i+ii+iii)	7853000

B. Working Capital (per month)

(i) Personnel (per month)

Designation	Nos.	Salary / (Rs.)	Total (Rs.)
Administration and Supervisory
Manager	1	16000	16000
Supervisor	1	9000	9000
Salesman	1	9000	9000
Accountant	1	6000	6000
Clerk	1	5000	5000
Watchman	3	3000	9000
Attendant	1	3000	3000
Technical: Skilled and Semi or skilled
Skilled workers	8	5000	40000
Semi-skilled workers	5	4000	20000
Sub Total			117000
Perquisites @ 22% of salaries		LS	25740
Total			142740

(ii) Raw Materials (per month)

Particulars	Imp/ Ind	Qty.	Unit	Rate (Rs.)	Value (Rs.)
Granite rough blocks	Ind.	500	Cft.	1000	500000
Packing materials	Ind.	LS			10000
Total					510000

(iii) Utilities (per month)

Particulars	Qty.	Unit	Rate (Rs.)	Value (Rs.)
Electrical Power	8000	kWh	5.00	40000
Water	250	kL	20.00	5000
Total				45000

(iv) Other Contingent Expenses (per month)

Particulars	Value (Rs.)
Postage and stationery	2000
Telephone	4000
Consumable stores	30000
Repairs and maintenance	15000
Transport charges	10000
Advertisement and publicity	5000
Insurance	2000
Taxes	2000
Sales expenses	10000
Miscellaneous expenses	10000
Total	90000

(v) Total Recurring Expenditure (per month)	787740
(vi) Total Working Capital (on 2 months basis)	1575480

C. Total Capital Investment

Fixed Capital	7853000
Working Capital	1575480
Total	9428480

Machinery Utilization

75% utilization has been considered on machinery and equipment. No bottleneck is expected in the operations.

Financial Analysis

(1) Cost of Production (per year)

Description	Value (Rs.)
Total Recurring Cost	9452880
Depreciation on Building at 5%	230000
Depreciation on Machinery and Equipment at 10%	266200
Depreciation on Tools at 25%	147750
Depreciation on Office equipment at 20%	28200
Interest on total capital investment at 13%	1225702.4
Total	11350732.4

(2) Sales Turnover (per year)

Items	Qty.	Unit	Rate (Rs.)	Value (Rs.)
Granite Tiles of size (6" x 12")	50000	Nos.	140	7000000
Granite Tiles of size (12" x 12")	20000	Nos.	225	4500000
Granite Tiles of size (12" x 24")	5000	Nos.	625	3125000
Total				14625000

(3) Net Profit Before Tax (per year)	=	3274267.6

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

	=	3274267.6x100 ---------------
		14625000

	=	22.39

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

	=	3274267.6x 100 ----------------------
		9428480

	=	34.73

(6) Break-even Point
(i) Fixed Cost (per year)

Description	Value (Rs.)
Depreciations	672150
Interest on total capital investment	1225702.4
Insurance	24000
40% of salaries and wages	685152
40% of other contingent expenses (excluding insurance)	422400
Total	3029404.4

B.E.P	=	Fixed Cost per year x 100 -----------------------
		Fixed Cost per year + Net Profit per year

	=	3029404.4 x 100 -----------------------
		3029404.4 +3274267.6

	=	48.06

Additional Information

It is advisable to set up units in the states where granite quarries are available. For example, Karnataka, Tamil Nadu, and Andhra Pradesh have good deposits of granite rock. Granite being a minor mineral, is under the purview of State Governments and, Govt. policies on granite quarrying and lease vary from State to State.

The proposed project depends on the quarry owners for its raw material. Continuous availability of the desired quantity and quality (viz., colour, shade, etc.,) is very important. The project is envisaged for supply of granite tiles to meet the consumption within the country, local or otherwise. To get export quality finish in the granite tiles, it is also advisable to install Chamfering machine, Grooving machine and Calibrating machine.

Addresses of Machinery and Equipment Suppliers Granite Cutting and Polishing Machinery

1. M/s. M. L. Shah and Co (Machinery) Pvt. Ltd.
Lotus House, 5th floor, 33 A,
New Marine Lines,
Mumbai-400 020

2. M/s. Rajasthan Udyog
13, Heavy Industrial Area,
Jodhpur-342 003

3. M/s. Hensel (India) Pvt. Ltd.
No. 58, Country Club Road,
Singasandra,
Bangalore 560 068

4. M/s. Jodhpur Machine Tools
Suvidha Complex, Sector E-4,
Shastri Nagar,
Jodhpur-342 003

5. M/s. Rajasthan Industries
Behind Old Power House,
Jodhpur-342 001

6. M/s. Yantra Udyog
65/2, KCG Industrial Estate,
Kamakshipalya,
Bangalore–560 079

7. M/s. Afam Stonemachin
No. 85, Sharada Colony,
3rd Stage, 4th Block,
Basaveshwarnagar,
Bangalore-560 079

8. M/s. M. R. Industries
3, Varalin Industrial Estate,
Chand Lodiya Gots Road, Gota,
Ahmedabad-382481

Diamond Segmented Saws and Polishing Heads and Abrasives

1. M/s. Rajasthan Tools Pvt. Ltd.
13/A, Heavy Industrial Area,
Jodhpur-342 003

2. M/s. Winter Misra Diamond
Tools Ltd.
79, Jorbagh,
New Delhi-110 003

3. M/s. Neel Enterprises
15-A, Silver House,
Nr. Mahalakhmi Road,
Paldi, Ahmedabad-380 007

4. M/s. Bhukanvala Diamond Tools Pvt. Ltd.
PO Box No. 946, The Peerage,
86, MV Road, (Andheri-Kurla Road),
Andheri (West),
Mumbai-400 093

Raw Material Suppliers

1. M/s. Mysore Minerals Ltd.
39, M. G. Road,
Bangalore–560 001
Other local granite quarry owners.