|
Leather Chappals
| Product Code |
: |
N.A. |
| Quality and Standards
|
: |
As per Buyers requirement.
|
| Production Capacity
|
: |
Qty. : 90,000 Pair chappals
(per annum) of Rs 22500000 |
| Uploaded
on |
: |
March
2007 |
Introduction
Since time immemorial man has been using
footwear of different kinds to protect feet from the extremities
of weather and external injuries. In addition to functional
utility chappal has also become an item of fashion and also
forms a part of dress. Today chappals are used by simple villagers,
farmers, common people of urban areas and also by the rich
people. To cope with the requirement of different users chappals
are made of different type of materials.
Market Potential
Leather Chappals are being used by the
people from all categories due to their low cost in comparison
to the closed shoes. These Chappals are very much in demand
by ladies, gents and children because of the climatic conditions
and high temperature prevailing in most of the parts of our
country. The demand of such Chappals is increasing rapidly
due to the increase in population every year. Apart from this,
the increase in demand is also due to the fashion consciousness
created among young generation as most of the youth have started
using Chappals as a part of their dress.
Since the demand of Gents/Ladies Chappals
is increasing day by day, the demand of Leather straps is
automatically increasing not only for new Chappals but for
replacement market also.
Basis and Presumptions
1. The basis of production is based on
double shift, where shift duration is of 8 hours a day and
300 working days in a year.
2. The salary and wages for the personnel/labour
are based on the prevailing pattern in the leather industry.
and Minimum Wages Act.
3. Interest rate is calculated @ 12% per
annum on total investment on total capital investment.
4. Land and Building own.
5. Power tariff @ Rs. 4.5 unit.
Implementation Schedule
| Sl. No. |
Activity |
Period (In months)
|
| 1. |
Selection of site |
1 |
| 2. |
Registration of SSI
from DIC |
1 |
| 3. |
Sanction of loan from
financial Institutions |
2 |
| 4. |
Procurement of machinery
|
1 |
| 5. |
Electrification and
Installation of machine |
1 |
| 6. |
Trial production and
procuring confirm orders |
1 |
| |
Total
|
7 |
Technical Aspects
Process of Manufacture
As per the graded patterns of various
sizes of both upper and bottom, the components are cut. The
edges of cut components are skived and stitched. After the
completion of stitching operation, decorative treatment on
the upper such as punching, fixing of buttons, metal fittings
etc. is done either by hand or machine. The straps of the
upper are inserted in the slots of the insoles. The inserted
portion of the straps and its corresponding portion in the
flesh side of the insole are roughened and cemented. Finally
the flesh sides of both the insole and bottom sole are roughened
and the adhesive is applied. The cemented soles and insole
are stuck and pressed in Cementing press to make the bond
permanent.
The next operation is finishing in which
the edges of sole and heel are trimmed, inked and set on the
machine or by hand. The upper is cleaned and dressed before
packing into boxes.
Quality Control and Standards
Standard product as per ISI specification.
1. IS 578:1964 for Upper leather.
2. IS 5867:1979 for leather board.
3. IS 1741:1960 for synthetic rubber sheet.
4. IS 4663:1968 for adhesive.
Production Capacity
The unit is proposed to produce 90,000
pairs Chappals in a year.
Pollution Control
This industry does not come under the
category of polluting industry.
Financial Aspects
A. Fixed Capital
| (i) Land and Building
|
Amount
(In Rs.) |
| (i) Land 3000 sq. ft.
@ Rs. 500 per sq. ft including registration |
1500000
|
| (ii) Total built-up
area 2000 sq. ft. @ Rs 1000 per sq ft |
2000000
|
| Water System (including
Bore Well + over head tank etc) |
100000
|
| Total civil cost= cost
of land + building |
3600000
|
Machinery and Equipments
| Sl. No. |
Description |
Qty. |
HP |
Rate (Rs.) |
Amount (Rs.) |
| 1. |
Strap Cutting Machine
300 mm hand operated |
2 |
- |
20000 |
40000
|
| 2. |
Upper Sewing machine
Power operated |
2 |
2 |
15000 |
30000
|
| 3. |
Sole Cementing press,
4 bed operated with Air Compressor with Motor |
1 |
1 |
40000 |
40000
|
| 4. |
Double ended buffing
machine with exhaust motor |
1 |
1 |
20000 |
20000
|
| 5. |
Trade mark embossing
machine with heating device |
1 |
- |
15000 |
15000
|
| 6. |
Taxes, Electrification
and installation of machine @ 40% on cost of machine |
|
|
|
58000
|
| 7. |
Wooden Cast pairs |
150 |
- |
- |
30000
|
| 8. |
Tools and Equipments
|
- |
- |
- |
30000
|
| 9. |
Cost of office equipments
and furniture |
|
|
|
100000
|
| |
Total
|
363000
|
| (iii) Pre-operative
Expenses |
40000 |
| (iv) Total Fixed Capital
(i+ii+iii) |
4003000
|
B. Working Capital
(per month)
(i) Personnel/Technical
(per month)
| Sl. No. |
Designation |
No. |
Salary (Rs.) |
Total (Rs.) |
| 1. |
Manager (Self) |
1 |
20000 |
20000
|
| 2. |
Designer-cum-Supervisor
|
1 |
10000 |
10000
|
| 3. |
Skilled Worker |
10 |
7000 |
70000
|
| 4. |
Machine Operator |
10 |
7000 |
70000
|
| 5. |
Semi Skilled Worker
|
10 |
5000 |
50000
|
| 6. |
Un-skilled Worker |
15 |
3000 |
45000
|
| 7. |
Accountant-cum-Store
Keeper |
1 |
7000 |
7000
|
| 8. |
Clerk-Cum-Typist |
1 |
4000 |
4000
|
| 9. |
Watchman |
1 |
3000 |
3000
|
| 10. |
Sweeper |
2 |
3000 |
6000
|
| |
Total
|
285000
|
| |
Add perquisites @ 22%
on Salary |
|
|
62700
|
| |
Total
|
347700
|
(ii) Raw Materials (7500 Pairs per month)
| Sl. No. |
Description |
Qty. |
unit |
Rate (Rs.) /unit |
Amount (Rs.) |
| 1. |
Upper leather @ 1.5
Sq.ft./pair |
11250 |
Sq.ft |
40 |
450000
|
| 2. |
Lining Leather @ 1 Sq.ft./pair
|
7500 |
Sq.ft |
40. |
300000
|
| 3. |
Insole |
7500 |
pair |
18 |
135000
|
| 4. |
Sole and heels (Rubber)
|
7500 |
pair |
20 |
150000
|
| 5. |
Grinderies |
7500 |
pair |
10 |
75000
|
| 6. |
Packing materials |
7500 |
pair |
8 |
60000
|
| |
Total
|
1170000
|
(iii) Utilities (per month)
| Sl. No. |
Description |
Amount (Rs.) |
| 1. |
Power |
10000 |
| |
Total
|
10000
|
(iv) Other Contingent Expenses (per month)
| Sl. No. |
Description |
Amount (Rs.) |
| 2. |
Postage and Stationery
|
10000
|
| 3. |
Repair and Maintenance
|
15000
|
| 4. |
Transportation |
20000
|
| 5. |
Telephone |
10000
|
| 6. |
Sales Expenses |
20000
|
| 7. |
Consumable stores |
15000
|
| 8. |
Other contingent Expenses
|
10000
|
| |
Total
|
100000
|
(v) Total Recurring Expenditure (per
month)
| Sl. No. |
Description |
Amount (Rs.) |
| 1. |
Raw Materials |
1170000
|
| 2. |
Staff and Labour |
347700
|
| 3. |
Utilities |
10000
|
| 4. |
Other contingent expenses
|
100000
|
| |
Total
|
1627700
|
(vi) Working Capital (for 1.5 months)
C. Total Capital Investment
| Sl. No. |
Description |
Amount (Rs.) |
| 1. |
Fixed Capital |
4003000
|
| 2. |
Working capital |
1627700
|
| |
Total
|
5630700
|
Financial Analysis
(1) Cost of Production (per year)
| Sl. No. |
Description |
Amount (Rs.) |
| i) |
Total recurring cost |
19532400
|
| ii) |
Depreciation on Building @ 5 % |
180000
|
| iii) |
Depreciation on machinery @ 10% |
20300
|
| iv) |
Depreciation on tools and last @
25% |
15000
|
| v) |
Depreciation on office equipment
@ 20% |
20000
|
| vi) |
Interest on Total Capital Investment
@ 12% |
675684
|
| |
Total
|
20443384
|
(2) Turnover (per year)
| Sl. No. |
Items |
Qty.in pairs |
Rate (Rs.)/pair |
Amount (Rs.) |
| 1. |
Leather Chappals |
90,000 |
250 |
22500000
|
| |
Total
|
22500000
|
| (3) Net Profit (per
year) |
| |
| Total Sales -Cost of
Production |
| |
| 22500000 - 20443384 |
| |
| = 2056616 |
| (4) Net Profit Ratio
|
|
|
| |
|
Net Profit per year
x 100 |
| |
= |
——————————— |
| |
|
Turnover per year |
| |
|
|
| |
|
2056616 x 100 |
| |
= |
———————— |
| |
|
22500000 |
| |
|
|
| |
= |
9.14 |
| |
|
|
| |
|
|
| (5) Rate
of Return on Total Investment |
| |
|
Net Profit per year
x 100 |
| |
= |
—————————— |
| |
|
Total Investment |
| |
|
|
| |
|
2056616 x 100 |
| |
= |
——————— |
| |
|
5630700 |
| |
|
|
| |
= |
36.53% |
(6) Break-even
Point
Fixed Cost
| Sl. No. |
Description |
Amount (Rs.) |
| a) |
Depreciation on Building |
180000
|
| b) |
Depreciation on machinery @ 10% |
20300
|
| c) |
Depreciation on tools and last @
25% |
15000
|
| d) |
Depreciation on office equipment
@ 20% |
20000
|
| e) |
Interest on Total Capital Investment
@ 12% |
675684
|
| f) |
40% on Salary of Staff and Labour
|
1668960
|
| g) |
40% on Utilities and Others Contingent
expenses |
528000
|
| |
Total
|
3107944
|
| B.E.P. |
|
|
| |
|
Fixed cost x 100 |
| |
= |
——————————
|
| |
|
Fixed cost + Net Profit
|
| |
|
|
| |
|
3107944x 100 |
| |
= |
————————— |
| |
|
3107944 + 2056616 |
| |
|
|
| |
= |
60.18% |
Addresses of Machinery and Equipment
Suppliers
1. M/s. Peelu Sales Corporation,
6/38, Galib Pura Kalan,
Nai Ki Mandi,
Agra-282010.
2. M/s. Prototype Development and Training
Centre,
B-24, Guindy Industrial Estate,
P.O. Ekkaduthangal,
Chennai-600 097.
3. M/s. Masa Engineering (India),
4/H/4, Rifle Range Road,
Kolkata - 700 017.
4. M/s. Industrial Machines (Delhi) Pvt.
Ltd.
1/23-B, Asaf Ali Road,
New Delhi-110002.
5. M/s. S.P. Engineering Works
Dayal Bagh Road, New Agra,
Agra-282 005.
Raw Material Suppliers
Raw material required for the production
can be procured locally.
Contact for more information:
Information Manager
TIMEIS Project
E-mail: timeis@ficci.com
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