White Staple Pins

Product Code	387502009
Quality and Standards	IS 4224 : 1972
Production Capacity	Qty. : 1300 Cartons (per annum) Value : Rs.5850000
Uploaded on	April 2007

Introduction

The project is to manufacture staple pins especially of galvanised iron wire type, commonly known as white staples. These staples find wide application to staple sheets of paper, cheque, common known bills, album photos, sandwich bags and in financial institutions, offices, garment industry, leather industry, rubber industry and any shop delivering the materials in packets and so on.

These white shining staples of good quality are currently imported involving an estimated foreign exchange drain of Rs. 60 crores per year. In India, manufacturing has been limited to mostly copper coated staples, which unfortunately rust fast. Also some white staples made from substandard wires have been in the market. However, neither of these are comparable in quality and performance to these of white staples such as those of "MAX" of Japan.

Market Potential

White staples made in India can compete without strain against "MAX" of Japan especially since the matching quality is assured while the whole sales price is low per packet of No. 10 staples. With the assistance of sales representatives and a network of dealers organisation, it is apparent that the staple pins can be sold easily in domestic market. The project also envisages entering exports especially since the staple pins can stand up to the rigours of the International quality standards.

Basis and Presumptions

• Capacity utilisation - 75% on single shift basis.
• Time period (one year) - 300 days.
  
• Labour wages-Estimated on the minimum wages.
• Rate of interest -12% per annum.
• Margin money -25% varying from State to State.
• Operation period of project- 10 Years.
• Building is of Own at the prevailing rate of market.
• Cost of machinery and equipment is approximate to that prevailing in the market.

Implementation Schedule

Activity	Period
Selection of site	2 weeks
Preparation of project report	4 weeks
Provisional registration	1 week
Financial arrangement	8 weeks
Procurement of machinery	6 weeks
Installation, electrification and commissioning of machinery	8 weeks.

Technical Aspects

Process of Manufacture

The process of making staple pins has been simplified with introduction of sophisticated fully Automatic Staple Pin Making Machines. The preformed round wire is fed to the machine which flattens it and produces the necessary staple pins in pre-determined lengths of 50 staple pins in each length. The formation of this length is assisted by the use of a special staple pin adhesive, also developed in India. The staple pin lengths are packed suitably with each packet containing 1000 pins. 20 of these packets are packed in a box and 40 of these packets are packed in cardboard carton.

Quality Control and Standards

The pins should be manufactured as per relevant Indian specification IS 4224:1972.

Production Capacity (per annum)

1300 cartons of staple pins

Motive Power

10 HP.

Pollution Control

Manufacturing of this product does not attract pollution control measures.

Energy Conservation

The unit is equipped with low powered machinery. The energy conservation efforts need in this unit are the creation of awareness among the workers.

Financial Aspects

Fixed Capital

(i) Land and Building
Total Built up area & covered area	200 Sq. mtrs.@ Rs 6000 / Sq Mtr	1200000
Construction Cost for Working shed, store, office etc	200 Sq Mtr @ Rs 7000/ Sq Mtr	1400000
Total		2600000

(ii) Machinery and Equipments

Description	Qty.	Rate	Amount (In Rs.)
Automatic staple pin making machines with electricals	12	200000	2400000
Double ended Bench grinder cap 8" wheel			25000
Common tools and measuring instruments			15000
Spares and fixtures			10000
Installation and electrification @ 10%			245000
Office equipment, furniture etc.			80000
Total			2775000
(iii) Pre-operative Expenses			40000
Total Fixed Capital (i+ii+ iii)			5415000

B. Working Capital (per month)

(i) Personnel Salary and Wages

Designation	No.	Salary (Rs.)	Amount (In Rs.)
Manager/Foreman	1	18000	18000
Accountant clerk/typist	1	7000	7000
Skilled worker	4	7000	28000
Semi-skilled worker	6	5000	30000
Helper	2	3000	6000
Watchman	1	3000	3000
Total			92000
Add perquisites @22%			20240
Total			112240

(ii) Raw Material (per month)

Raw Material (indigenous)	(In Rs.)
Preformed wire (round wire)@ Rs. 70 per kg. 200 Kg	140000
Adhesive @ Rs. 250 per ltrs. 100 Ltrs.	25000
Packing material/boxes L.S.	40000
Total	205000

(iii) Utilities

	(In Rs.)
Power	10000
Total	10000

(iv) Other Contingent Expenses

	(In Rs.)
Postage and Stationery	1000
Travelling and transport	10000
Repairs and maintenance	3000
Advertisement and publicity	5000
Insurance	1000
Consumable stores	5000
Telephone charges	2000
Selling expenses	10000
Misc. expenditure	3000
Total	40000

(v) Total Recurring Expenditure (per month) (i + ii + iii + iv)	367240
(vi) Total Working Capital for 2 months	734480

C. Total Capital Investment

(i) Fixed Capital	5415000
(ii) Working Capital (for 2 months)	734480
Total	6149480

Financial Analysis

Cost of Production (per year)	(In Rs.)
Total recurring cost	4406880
Depreciation on machinery and equipment @ 10%	245000
Depreciation on Building@5%	130000
Depreciation on office equipment @ 20%	16000
Interest on total investment @ 12%	737938
Total	5535818

Total Sales (per annum)

By sale of 1300 cartons No.10 staple pin @ Rs. 4500/ carton

5850000

Profit (per annum)

	5850000- 5535818
	= 314182

Net Profit Ratio

	Net profit × 100
	Turnover
	= 314182 × 100
	5850000
	= 5.37

Rate of Return

	Net profit × 100
	Total Investment
	314182 × 100
	6149480
	= 5.11

Break-even Point

Fixed Cost (per year)	(In Rs.)
Depreciation on machinery and equipment @ 10%	245000
Depreciation on Building@5%	130000
Depreciation on office equipment @ 20%	16000
Interest on total investment @ 12%	737938
40% of salary and wages	538752
40% of other contingent expenses (excluding insurance)	39000
Insurance	12000
Total	1718690

B.E.P	Fixed Cost × 100 --------------------- Fixed Cost + Profit
	= 1718690 x100
	= 1718690 +314182
	= 84.54

Addresses of Machinery Suppliers

• M/s. Industrial Machine Corporation
  F-36, C, Sainik Market,
  Main Road, Ranchi - 834001.
  
• M/s. OTO Corporation
  305, 5th Main Cross,
  TV Phase Peanya Indl. Area,
  Bangalore - 560058
• Sohal Engg. Corporation
  61, Ganesh Chandra Avenue,
  Kolkata-700013.

Raw Material Suppliers

Raw material available in the local markets

For further information please contact

Information Manager
TIMEIS Project
E-mail: timeis@ficci.com