|
Leather Travelling Bag
| Product Code |
: |
293101000 |
| Quality and Standards
|
: |
As per buyers specification
|
| Production Capacity |
: |
Quantity: 30000 pieces
(per annum)
Value: Rs. 32400000 |
| Uploaded
on |
: |
March
2007 |
Introduction
Travelling bag is one of the convenient goods used for carrying
the belongings such as clothes, daily-use articles and other
essentials during travelling from one place to other. Some
other types of products are also used for carrying important
documents and office use equipments by the executives and
high profile personnel. Although this product is manufactured
from various types of materials such as textile, jute, coated
fabrics, yet leather travelling bag is having wider acceptance
due to its superior strength, aesthetic look and up-man-ship
among middle and high-income group people. A wide range of
travelling bags are in use for various purposes. The cost
of the leather bags depends upon the type of leather, space
and/or style of it. This project aims at manufacturing two
types of bags i.e.:
|
(i)
|
Bags of single large pocket with
one or two zips usually made from heavy cow or buffalo
leather and
|
|
(ii)
|
Bags of multi pockets with interlining
and re-enforcement, flap type, fitted with magnetic
press buttons, commonly made from cow nappa leather.
|
Market Potential
The demand of the leather travelling bag
is increasing day-by-day in tune with the growth of industrialization,
economic standards of people, tourism and fashion consciousness.
The important customers of such products are medium and high-income
group people belonging to service, business and executive
classes. The products with a price range of Rs. 400 to Rs.
2,500 are commonly seen in the market. The proposed product
with the price of about Rs. 600 to Rs. 800 is felt quite acceptable
with reasonable quality. Further, export worthiness of this
product is quite substantial with qualitative and latest designed
ones. A small manufacturer can have tie-up with any exporter
merchant in the country for executing the order as per the
specified design. There is an ample scope of leather travelling
bag units with easy and considerably cheaper availability
of indigenous raw material and skilled manpower.
Basis and Presumptions
This project profile has been prepared
on the basis of following assumptions:
| 1. |
Working Hours |
: |
Double shift(8 hour per
shift) of 16 hours a day for 300 working days in a year
|
| 2. |
Capacity Utilisation
|
: |
60% during first year
70% during second year
80% during 3rd year and onwards |
| 3. |
Entrepreneur |
: |
Anybody having knowledge/experience
of leather goods and/or venture to start leather based
units. |
| 4. |
Location |
: |
Anywhere in India, preferably
nearby any tannery pocket or export facility zone. |
| 5. |
Land and Building |
: |
Own |
| 6. |
Raw Materials |
: |
Chrome tanned heavy cow
or buffalo bag leather and softy cow nappa leather. |
| 7. |
Salary and Wages |
: |
All employees are paid
on monthly basis at prevailing rates of leather industry
|
| 8. |
Transportation and Taxes
on purchase |
: |
Not Included in purchase
price. |
| 9. |
Power Charges |
: |
Rs. 4 per KWH from power
supply source |
| 10. |
Depreciation |
: |
5% on building and civil
construction
10% on plant and machinery
25% on tools and equipments
20% on furniture and fixture
10% on other fixed assets |
| 11. |
Margin Money |
: |
30% of total capital
investment |
| 12. |
Interest Charges |
: |
15% has been calculated
on total capital investment considering the opportunity
cost of margin/equity money. |
| 13. |
Fixed Cost for BEP Analysis
|
: |
100% rent, insurance,
interest and depreciation
40% of total salary and wages
40% of total utilities and other Contingent expenses excluding
rent and insurance. |
Implementation Schedule
| Sl. No. |
Activity |
Period (in months)
|
| 1. |
Site selection, negotiation
with landlord, market survey preparation of project report
and other formalities |
2 |
| 2. |
Seeking quotation of
machines, purchase and installation |
2 |
| 3. |
Trial production, arranging
working capital, Procurement of raw material and market
tie up |
2 |
| |
Total period required
for commencing commercial production |
6 |
Technical Aspects
Process of Manufacture
The leather travelling bags proposed to
be manufactured in this project are mainly of two types. One
is of single large pocket with a space of 3 to 6 ft. fitted
with one or two fasteners and a long strap handle and other
one is of multi-pockets (3 to 5) fitted with different types
of fasteners like zips, velcro or press buttons. While heavy
cow or buffalo bag leather with the thickness of 2.0 to 2.5mm
without lining is preferred for making the former, the softy
type of leather like cow nappa leather with the inter-lining
and reinforcement is usually used for the later.
First of all the components are cut from
suitable materials. The basic raw material is the finished
leather, which is not uniform, irregular in shape and size,
variation with grain structure and presence of defects on
the surface. On the other hand, the components are generally
regular or rectangular shape and the adjacent components should
have similar shade and structure. Therefore, necessary care
should be taken in cutting the components. The cut components
are then skived to the edges for ease of folding and/or stitching.
The edges are then beaded and the zips and other fasteners
attached as per the specification. The outer surface (leather),
the inner surface (lining) and the re-enforcement materials
if required so, are attached first with the adhesive and then
by stitching. The linings and thread-ends are trimmed and
sealed. The surface is cleaned and polished and made ready
for packing.
Quality Control and Standards
The quality of this product has to be
maintained as per buyer's specification. However, the main
criteria for quality control are selection of suitable materials,
(especially the leather with required thickness, shade, strength
and softness) cutting components from suitable portions of
leather, uniform folding, fastener attachment, regular stitching
with suitable thread with
specified stitch length and finishing.
Production Capacity (per annum)
| i) |
Leather travelling bag
single pocket with one long and two small handles (20"x5"x18")
|
18000 Pcs. of Rs 18000000.
|
| ii) |
Leather travelling bag-multi
pocket flap type with one longand two small handles (18"x5"x15")
|
12000 Pcs. of Rs. 14400000
|
Pollution Control
The proposed unit does not produce any
effluent. However, the scraps of leather and other materials
are to be collected and disposed-off at appropriate place
or are burnt at an isolated place.
Energy Conservation
All machines are power driven and are
run individually, whenever required.
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
|
(ii) Machinery and Equipments
| Sl. No. |
Description |
Imp./Ind. |
Qty. |
Rate (Rs.) |
Value (Rs.) |
| 1. |
Strap cutting machine
Straight (12 knives) |
Ind. |
1 |
70,000 |
70000
|
| 2. |
Pneumatic stamping machine-stamping
wheel (0-9 nos.) (A-Z) |
Ind. |
1 |
95,000 |
95000
|
| 3. |
Upper Skiving machine
|
Ind. |
1 |
55,000 |
55000
|
| 4. |
Flat bed single needle
sewing machine |
Ind. |
3 |
25,000 |
75000
|
| 5. |
Heavy duty flat bed single
needle sewing machine |
Ind. |
1 |
40,000 |
40000
|
| 6. |
Cylinder bed sewing Single
|
Ind. |
2 |
90,000 |
180000
|
| 7. |
Combined finishing machine
|
Ind. |
1 |
85,000 |
85000
|
| 8. |
Rivetting machine |
Ind. |
1 |
10,000 |
10000
|
| 9. |
Taxes,Electrification
and erection of machine @ 40% on machine cost |
|
|
|
244000
|
| |
Total
|
854000
|
(iii) Tools and Equipments and Other
Fixed Assets
| Sl. No. |
Description |
Imp. Ind. |
Qty. |
Rate (Rs.) |
Value (Rs.) |
| 1. |
Leather goods makers
tool kit |
Ind. |
3 sets |
5000 |
15000
|
| 2. |
Machine maintenance and
electricians tool kit |
Ind. |
1 set |
L.S. |
5000
|
| 3. |
Testing equipments-thickness
gauge, measuring scales etc. |
Ind. |
- |
L.S. |
5000
|
| 4. |
Workshop working tables,
racks etc. |
Ind. |
- |
L.S. |
80000
|
| 5. |
Office furniture and
equipments |
Ind. |
- |
L.S. |
100000
|
| 6. |
Misc. equipments |
Ind. |
- |
L.S. |
10000
|
| |
Total
|
215000
|
| |
Total [ii +iii]
|
1069000
|
| (iv) Pre-operative
Expenses |
(Rs.) |
| 1. |
Preparation of project
report and consultancy |
40000 |
| 2. |
Administrative expenses
|
10000 |
| 3. |
Travelling, Market development
and tie-up |
20,000 |
| 4. |
Other formalities and
expenses prior to production |
10,000 |
| |
Total
|
80000
|
| |
Total Fixed Capital [i+ii+iii+iv]
|
4749000
|
B. Working Capital
(per month)
(i) Staff and
Labour (per month)
| Sl. No. |
Designation |
No. |
Salary (Rs.) |
Total (Rs.) |
| 1. |
Manager |
1 |
20000 |
20000
|
| 2. |
Supervisor cum Designer
|
10 |
10000 |
100000
|
| 3. |
Skilled Worker |
10 |
7000 |
70000
|
| 4. |
Semi-skilled workers
|
6 |
6000 |
36000
|
| 5. |
Unskilled worker |
4 |
4000 |
16000
|
| 6. |
Electrician and mechanic
|
1 |
5000 |
5000
|
| 7. |
Accountant cum Cashier
|
1 |
6000 |
6000
|
| 8. |
Store keeper cum assistant
|
1 |
5000 |
5000
|
| 9. |
Attendant |
1 |
3000 |
3000
|
| |
Total
|
261000
|
| |
Add perquisites @ 22%
on Salary |
57420
|
| |
Total
|
318420
|
(ii) Raw Material Including Packaging
Materials Per Piece of Bag (per month)
| Sl. No. |
Description |
Quantity |
Rate (Rs.) |
Total (Rs.)
|
| |
|
|
|
Bag SP |
Bag MP |
| 1. |
Heavy cow or buffalo
Chrome tanned Bag Leather (2.0 mm) |
8.5 Sq. ft. |
70 |
595
|
- |
| 2. |
Cow nappa/softee leather
(1.4 mm) |
9.0 Sq. ft. |
80 |
- |
720
|
| 3. |
Linings and reinforcements
|
LS |
|
20 |
70 |
| 4. |
Magnetic press buttons
|
LS |
|
- |
50 |
| 5. |
Zips, Threads, adhesive,
Finishing and other misc. materials |
LS |
|
25 |
38 |
| 6. |
Packaging materials |
LS |
|
9 |
14 |
| |
Total
|
649
|
892
|
| |
Total materials requirement
(per month) (456 x 750 + 622 x 500) |
1865500
|
(iii) Utilities (per month)
| Sl. No. |
Description |
Amount (Rs.) |
| 1. |
Electricity bill LS |
10000
|
| |
Total
|
10000
|
(iv) Other Contingent Expenses (per month)
| Sl. No. |
Description |
Amount (Rs.) |
| 2. |
Repair and maintenance
|
10000 |
| 3. |
Other consumable |
10000 |
| 4. |
Insurance |
2000 |
| 5. |
Telephone, fax and other
postal expenses |
6000 |
| 6. |
Stationery and printing
|
5000 |
| 7. |
Other misc. expenditure
|
10000 |
| |
Total
|
43000
|
(v) Total Recurring Expenses (per month)
| Sl. No.
|
Description
|
Amount
(Rs.) |
| 1. |
Staff and Labour |
318420
|
| 2. |
Raw Materials |
1865500
|
| 3. |
Utilities |
10000
|
| 4. |
Other contingent expenditure
|
43000
|
| |
Total
|
2236920
|
| (vi) Total Working
Capital Requirement |
(Rs.) |
| i. |
Raw material stock-one
month |
1865500
|
| ii. |
Stock in process-2 days
|
124367
|
| iii. |
Finished goods stock-Half
month |
932750
|
| iv. |
One month expenses: |
|
| |
a. Salary and wages |
318420
|
| |
b. Utilities |
10000
|
| |
c. Other Contingent expenses
|
43000
|
| |
Total
|
3294037
|
| (vii) Total Working
Capital Requirement |
(Rs.) |
| v. |
Receivables (One month
credit sale) |
2700000
|
| |
Total
|
5994037
|
C. Total Capital Investment
| Sl. No. |
Description |
Amount (Rs.) |
| 1. |
Fixed Capital |
4749000
|
| 2. |
Working capital |
5994037
|
| |
Total
|
10743037
|
Financial Analysis
(1) Cost of Production (per year)
| Sl. No. |
Description |
Amount (Rs.) |
| i) |
Total recurring cost
|
26843040
|
| ii) |
Depriciation on Building
5 % |
180000
|
| iii) |
Depreciation on machinery
and equipments @ 10% |
85400
|
| iv) |
Depreciation on tools
and equipments @ 25% |
28750
|
| v) |
Depreciation on Furniture
and Fixture @ 20% |
22000
|
| vi) |
Interest on Total Capital
Investment @ 12% |
1289164
|
| |
Total
|
28448354
|
(2) Turnover (per year)
| Sl. No. |
Items |
Quantity/pieces |
Rate (Rs.) |
Value (Rs.) |
| 1. |
Leather travelling bag-Single
pocket |
18000 |
1000 |
18000000
|
| 2. |
Leather travelling bag-Multi
pockets |
12000 |
1200 |
14400000
|
| |
Total
|
32400000
|
| (3) Net Profit (Before
Taxation) (per year) |
| Turnover - Cost of Production
|
| 32400000 - 28448354 |
| = 3951646 |
| (4) Net Profit Ratio
|
|
|
| |
|
Net Profit per year x
100 |
| |
= |
——————————— |
| |
|
Turnover per year |
| |
|
|
| |
|
3951646 x 100 |
| |
= |
———————— |
| |
|
32400000
|
| |
|
|
| |
= |
12.2
|
| |
|
|
| (5) Rate of Return
on Total Investment |
| |
|
Net Profit Per year x
100 |
| |
= |
——————————— |
| |
|
Total Investment |
| |
|
|
| |
|
3951646 x 100 |
| |
= |
———————— |
| |
|
10743037
|
| |
|
|
| |
= |
36.78%
|
(6) Break-even
Point
Fixed cost
| Sl. No. |
Description |
Amount (Rs.) |
| a) |
Depreciation on Building
@ 5 % |
180000
|
| b) |
Total depreciation on
plant machinery tools fixtures office equipments |
136150
|
| c) |
Interest on capital investment
|
1289164
|
| d) |
Insurance |
24000
|
| e) |
40% of Salary and Wages
|
1528416
|
| f) |
40% of other contingent
expenditure and utilities |
51000
|
| |
Total
|
3208730
|
| B.E.P. |
|
|
| |
|
Fixed cost x 100 |
| |
= |
————————— |
| |
|
Fixed cost + Net Profit
|
| |
|
|
| |
|
3208730 x 100 |
| |
= |
—————————— |
| |
|
3208730 +3951646 |
| |
|
|
| |
= |
44.81% |
Addresses of Machinery and Equipment
Suppliers
1. NSIC Technical Service Centre
Sector B-24, Guindy Indl. Estate,
Ekkaduthangal,
Chennai-32.
2. M/s. Atlanta Trading (P) Ltd.
Atur House,
Worli Naka,
Mumbai-18.
3. M/s. Twin Star Engineering
No. 98, Pammal Main Road,
Pammal,
Chennai-75.
4. M/s. Raj Machine Home
Opp. New Jyoti Building,
35/44, Karabala Road,
Agra-5.
Raw Material Suppliers
1. M/s. Alpha Global
445/1,6th Cross, 7th Block,
Jayanagar KPM Road,
Bangalore-560 082.
2. M/s. Amjad Finished Leather Co.
54, Maddox Street, Choolai,
Chennai-112.
3. M/s. Arkay Leathers
No. 3, Third Floor, Crown Court,
34, Chathedral Road,
Chennai-86.
4. M/s. Mow Chung Tannery Pvt. Ltd.
47, South Tangra Road,
Kolkata-46.
5. M/s. Pidilite Industries Ltd.
J.B. Marg, Nariman Point,
Mumbai
(for adhesive)
6. M/s. APL Poly Fab Pvt. Ltd.
48 C, Matheswar Tala Road,
Kolkata-46
(for lining)
7. M/s. Coats India Ltd.
144, M.G. Marg,
Bangalore-1
(for stitching thread)
8. M/s. Asia International
1523, Qasimjan Street,
Lal Kuan, New Delhi
(for fasteners)
9. M/s. Bharani Agencies
No. 126, Thambu Chetty Street,
III Floor, Chennai-1
(for fasteners)
10. M/s. Hyde Park India Pvt. Ltd.
C-21, Sector-7, Noida,
Ghaziabad Distt., U.P.
( for fasteners)
Contact for more information:
Information Manager
TIMEIS Project
E-mail: timeis@ficci.com
|
