|
Court Shoe
|
Quality and Standards
|
:
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1) Footwear IS 2051
2) Chromed Leather IS 578
3) Leather Shoe IS 11543
4) Glazed Kid IS 576
5) Lining Leather IS 3840
|
|
Production Capacity
|
:
|
Quantity : 1,80,000 Pairs (per annum)
Value : Rs. 2,40,00,000
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| Uploaded on |
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March 2007 |
Introduction
Footwear is the most common and utility-wise
important end product of the Leather industry. India, which
is one of the largest leather producing countries, is fast
getting into shoe trade. Most European Business Executives
are formal in their dress, unlike the somewhat casual dress
code in the business sector of certain other countries. The
location also influences the degree to which formal dress
is required, for instance whether it is in the capital or
the provinces and, accordingly, the style of footwear has
changed. Court Shoe is used mainly in the developed countries
and varies the heel height and design.
Market Potential
The manufacture of footwear is one of
the traditional industries of India and Leather Footwear has
meanwhile became an important product for the Indian and Export
markets. Footwear serves to protect the human foot from all
kinds of injury and is conveniently classified into open footwear
and closed footwear.
The past five years have been a period
of rapid growth for the Indian Shoe Industry. Many structural
changes have occurred over the years in the footwear industry.
More than 90% of footwear is produced by small scale and cottage
units, which also accounts for 65% of all exports of leather
footwear. 90% to 95% of the total output of the small and
cottage industry are produced by manual or semi-mechanised
methods.
According to the estimate, the degree
of capacity utilisation in the footwear sector was around
60 to 65%. No official statistics exists for production capacities
and actual production in the small scale units. However, approximately
there are around 2,00,000 units existing in India producing
around 400 million pairs of footwear.
Footwear exports have been encouraging
during the past few years. The major importers of Indian footwear
are the U.S.A, The Federal Republic of Germany, U.K., France
and the other EC countries. Many other countries have also
expressed interest in purchasing Indian Footwear because of
the high quality of the calf and kid leathers. The Indian
products also have a price advantage and lower wage costs
that means the manufacturing costs are not too high. Other
production factors, such as environmental pollution problems
in the above countries may lead to greater imports of shoe
from developing countries such as India.
Basis and Presumptions
| i) |
Working hours/shift
|
8hours
|
| ii) |
No. of shift/day
|
3
|
| iii) |
Working days/year
|
300
|
| iv) |
Total no. of working hours
|
7200
|
| v) |
Working efficiency
|
75%
|
| vi) |
Time period for achieving max. cap.
Utilisation
|
3rd year from the date on which
production will be started
|
| vii) |
Labour charges
|
As per the existing rates in the
region
|
| viii) |
Margin Money
|
30% of capital investment
|
| ix) |
Rate of interest on fixed and working
capital
|
12%
|
| x) |
Land & Building
|
Own
|
| xi) |
Water Plant
|
Own(tube well or Borwell)
|
| xii) |
Rate of Electricity
|
Rs 4 per unit
|
| x) |
Pay Back Period
|
5 years
|
Implementation Schedule
The implementation schedule is anticipated
to be about one year which is necessary considering the time
required for preparation of project report and appraisal,
registration, obtaining loan, acquiring land, building, plant
and machinery, organising working infrastructure, establishing
contacts with buyers and market agencies etc.
Technical Aspects
Process of Manufacture
Presently, there is a tremendous change
in the manufacturing of shoes. Various new processes have
come up like cemented direct moulding, direct injecting etc.
Besides this, unit soles are readily available in the market
in different designs and standards with latest shapes for
production.
Quality Control and Standards
Following BIS specifications for manufacturing
shoes are:
|
1)
|
Footwear
|
IS 2051
|
|
2)
|
Chromed Leather
|
IS 578
|
|
3)
|
Leather Shoe
|
IS 11543
|
|
4)
|
Glazed Kid
|
IS 576
|
|
5)
|
Lining Leather
|
IS 3840
|
Production Capacity
It is proposed to manufacture 1,80,000
pairs of Court Shoes @ Rs. 500 per pair, total value Rs. 1,30,00,000
Pollution Control
In particular, a Leather Shoe unit does
not create any environmental hazards, the performance of Production
System is through waste minimisation/utilities. It is observed
that the waste emanating from 70% of the unit is utilised
by the small leather goods (Tiny Sector) industries i.e. Chappal
Manufacturing, Small Coin Purses manufacturing and Key Chain
Purse Manufacturing units.
Energy Conservation
The Energy is spent in the factory in
the form of electricity and fuel. The workers should be properly
trained to operate the machines as and when required. They
should be cautioned to yield maximum units during the machine
operation and should not allow the machine to run by motive
power unnecessarily. The electrical lines should be properly
made and checked at
regular intervals.
Financial Aspects
A. Fixed Capital
|
(i) Land and Building
|
(Rs.)
|
|
Land 700 sq. mtr @ Rs 3500/- per
sq.mtr
|
2450000
|
|
Office building, Lab. Store 100sq.mtr.
@ 7000/mtr.
|
700000
|
|
Floor area construction ,factory
shed, Boundary wall etc. 400 sq.mtr. @ Rs 5000/per sqmt
|
2000000
|
|
Total
|
5150000
|
(ii) Machinery and Equipments
|
Sl. No.
|
Description
|
Imp./ Ind.
|
Qty. Nos.
|
Rate (Rs.)
|
Value (Rs.)
|
|
1.
|
Single Needle Flat Bed Sewing Machine
|
Imp
|
8
|
25000
|
200000
|
|
2.
|
Post Bed Sewing Machine Single Needle
|
Imp
|
3
|
50000
|
150000
|
|
3.
|
Single Needle Cylinder Bed Sewing
Machine
|
Imp
|
1
|
80000
|
80000
|
|
4.
|
Hydraulic Sewing Arm Upper Clicking
|
Imp
|
1
|
300000
|
300000
|
|
5.
|
Upper Leather Skiving M/c.
|
Imp
|
1
|
50000
|
50000
|
|
6.
|
Zig-Zag Sewing Machine
|
Imp
|
1
|
48000
|
48000
|
|
7.
|
4 Station Stuck on Press with Compressor
|
Ind
|
1
|
35000
|
35000
|
|
8.
|
Finishing and Polishing Machine
|
Ind
|
1
|
15,000
|
15000
|
|
9.
|
Strap Cutting Machine
|
Ind
|
1
|
20000
|
20000
|
|
10.
|
Stamping Machine(Power)
|
Imp
|
1
|
100000
|
100000
|
|
11.
|
Tools and Equipment
|
|
LS
|
50000
|
50000
|
|
12.
|
PVC Shoe Last
|
|
400 pairs
|
600
|
240000
|
|
13.
|
Office cum Workshop Furniture
|
|
LS
|
|
200000
|
|
14.
|
Heat Activator
|
Ind
|
1
|
1500
|
15000
|
|
15.
|
Excise, sales tax & erection
and installation charges 40% of total of 1 to 14
|
|
|
|
601200
|
|
16
|
Water systemt (including tube well
& over head tank)
|
|
|
|
200000
|
|
|
Total
|
2304200
|
|
|
Total Fixed Capital
|
(Rs.)
|
|
i)
|
Land and Building
|
5150000
|
|
ii)
|
Plant and Machinery
|
2304200
|
|
|
Total
|
7454200
|
B. Working Capital (per month)
(i) Raw Material (per month)
| Sl. No. |
Designation |
Qty. |
unit |
Rate/unit (Rs.) |
Value (Rs.) |
| 1. |
Upper Leather, Goat, Softy and
Auliva etc. |
270000 |
Dcu |
5.50 |
1485000
|
| 2. |
Lining Leather
Softy Fabric
|
60000
|
SGF |
26 |
1560000 |
| 3 |
Lining Cloth |
1500 |
mtr |
25 |
37500
|
| 4. |
Lusole, Toepuff, Stiffness Adhesives
etc. |
15000 |
pairs |
33 |
495000
|
| 6. |
P.U. Adhesive and Grinderies, Decorative
Emblishments |
15000 |
|
55 |
825000
|
| 7. |
Unit Soles P.U., PVC, TPR |
15000 |
|
50 |
750000
|
| 8. |
Packing Material |
10000 |
|
14 |
140000
|
| |
Total
|
5292500
|
(ii) Staff and Labour (per month)
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Sl. No.
|
Description
|
No.
|
Salary Rs.
|
Total (Rs.)
|
|
1.
|
Manager
|
2
|
20000
|
40000
|
|
2.
|
Designer-cum- Production Manager
|
2
|
10000
|
20000
|
|
3.
|
Supervisor
|
6
|
8000
|
48000
|
|
4.
|
Accountant-cum-Clerk
|
2
|
7000
|
14000
|
|
5.
|
Skilled Worker
|
30
|
7000
|
210000
|
|
6.
|
Semi Skilled Worker
|
15
|
5000
|
75000
|
|
7.
|
Peon/Watchman
|
2
|
3000
|
6000
|
|
8.
|
Sweeper
|
2
|
2500
|
5000
|
|
|
Total
|
418000
|
|
|
20% Perquisites on Total Salary
|
|
|
83600
|
|
|
Total
|
501600
|
|
(iii) Utilities (per month)
|
(Rs.)
|
|
Power and Water
|
50000
|
(iv) Other Contingent Expenses (per month)
| Sl. No |
Description |
Value (Rs.)
|
| 1. |
Postage and Stationery |
12000
|
| 2. |
Consumable Stores |
30000
|
| 3. |
Telephone |
10000
|
| 4. |
Packing and Transportation Charges
|
20000
|
| 5. |
Advertisement and Publicity |
20000
|
| 6. |
Insurance |
7000
|
| 7. |
Misc. Expenses |
15000
|
| |
Total
|
114000
|
(v) Total Recurring Expenditure (per
month)
|
Sl. No
|
Description
|
Amount (Rs.)
|
|
1.
|
Staff and labour
|
501600
|
|
2.
|
Raw Material
|
5292500
|
|
3.
|
Utilities
|
50000
|
|
4.
|
Other Contingent Expenses
|
114000
|
|
|
Total
|
5958100
|
|
(vi) Total Working Capital (for
1 ½ Month )
|
Rs. 5958100 x 1.5
|
|
=
|
8937150
|
C. Total Capital Investment
| Sl. No. |
Description
|
Amount (Rs.)
|
| 1. |
Fixed Cost
|
7454200
|
| 2. |
Working Capital for 1.5 months
|
8937150
|
| |
Total
|
16391350
|
Financial Analysis
(1) Cost of
Production (per annum)
| Sl. No. |
Description
|
Amount (Rs.)
|
| 1. |
Total Recurring Expenditure
|
71497200
|
| 2. |
Depreciation on Machinery @ 10%
|
99800
|
| 3. |
Depreciation on tool and Equipments
@ 20%
|
10000
|
| 4. |
Depreciation on furniture @ 20%
|
40000
|
| 5. |
Depreciation on Building @ 5%
|
257500
|
| 6. |
Interest on total Capital Investment
@ 12%
|
1966962
|
| |
Total
|
73871462
|
(2) Turnover (per annum)
| Sl. No |
Description |
Qty. |
Rate Rs. |
Value (Rs.) |
| 1. |
By sales of Court Shoes pair |
180000 |
500 |
90000000
|
|
(3) Net Profit (per annum)
|
|
|
|
|
=
|
Annual Turnover – Cost of Production
|
|
|
=
|
90000000 – 73871462
|
|
|
=
|
16128538
|
| (4) Net Profit Ratio
|
|
|
| |
|
Net Profit x 100 |
| |
= |
———————— |
| |
|
Turnover per annum
|
| |
|
|
| |
|
16128538x100 |
| |
= |
——————— |
| |
|
90000000 |
| |
|
|
| |
= |
17.92% |
| |
|
|
| (5) Rate of Return
|
|
|
| |
|
Net Profit x 100 |
| |
= |
——————————— |
| |
|
Total Capital Investment
|
| |
|
|
| |
= |
21.83% |
(6) Break-even
Point
(i) Fixed Cost
(per annum)
| Sl. No. |
Description |
Amount (Rs.) |
| 1. |
Depreciation on machinery, tools
and furniture |
109800
|
| 2. |
Interest on Total Investment |
1966962
|
| 3. |
Depreciation on Building |
257500
|
| 4. |
40% of Salary |
2407680
|
| 5. |
40% of Other Contingents and Utilities
|
513600
|
| 6. |
Insurance |
84000
|
| |
Total
|
5339542
|
|
B.E.P.
|
|
Fixed Cost x 100
|
|
|
=
|
—————————
|
|
|
|
Fixed Cost + Profit
|
|
|
|
|
|
|
=
|
24.87%
|
Addresses of Machinery and Raw Material
Suppliers
1. M/s. Prototype Dev. Training Centre
B/24. Guindy Estate,
Ekkaduthangar,
Chennai –9
2. M/s. Cochin Leathers Pvt. Ltd.
Industrial Dev. Area,
Edayar,
Muppathadam P.O.,
Cochin - 683 102
3. M/s. Solar
Atur House,
Worli Naka,
Mumbai-400 018
4. M/s. Chandra Chemical Ent. Ltd.
5, Naval Hospital Road,
Ist Floor, Periamet,
Chennai -3
5. M/s. Valliappa Leather Corporation
3/5, Narayana Chetty Street,
Periamet,
Chennai -3
6. M/s. Omega Polymicrons (P) Ltd.
Meerut Road, Mawana - 250401
Distt. Meerut (U.P.)
Contact for more information:
Information Manager
TIMEIS Project
E-mail: timeis@ficci.com
|
