Automotive Chain (Motorcycle Chain)
| Product Code |
343401002 |
| Quality and Standards |
IS 11740:1986 |
| Production Capacity |
Qty. : 10,26,000 in Nos. (per annum)
Value : Rs. 13,68,00,000 |
Introduction
Chain is an important link to transfer power from engine of a motorcycle to the rear driving wheel through sprockets. Automotive chains are of different sizes based upon the power to be transmitted. The size employed upon the most popular motorcycle in the Indian market is of 12.7 mm × 8 mm dia × 7.85 mm width rollers. The lengths of the chain for such models of motorcycles are either of 120 links or 118 links. This scheme is based on 120 links.
Market Potential
Motorcycle has become a common mode of conveyance as a result of modern life style. As the population is rapidly increasing day by day, the demand of motorcycles is also increasing. As such, there is a demand for motorcycle chains to meet the replacement market as well as for supply to the O.E.M. units.
Therefore, there is a great potential for this item and considerable scope to set up new units in this line.
Basis and Presumptions
- The Project Profile has been prepared on the basis of single shift of 8 hours each day, 25 days in a month and at 75% efficiency.
- It is presumed that in the first year, the capacity utilisation will be 60% followed by 70% in the next year and 80% in the subsequent years.
- The rates of salaries and wages for skilled workers and others are the minimum rates in the State/ Neighbouring States.
- Interest rate for fixed and working capital has been taken on an average rate of 12% whether financed by bankers or by Financial Corporations.
- Margin money required is minimum 30% of the project investment.
- The land, working shed and civil construction has been taken in the project cost.
- The rates quoted in respect of machines, equipment and raw materials are those, prevailing at the time of preparation of this Project Profile and are likely to vary from supplier to supplier and place to place. When a tailor made project profile is prepared necessary changes are to be made.
Implementation Schedule
Activity |
Period |
| Preparation of Project Report |
|
| a) Calling quotations |
1 Month |
| b) Preparation |
2 Weeks |
| Provisional Registration as SSI |
1 Week |
| Financial Arrangement |
3 Months |
| Purchase and procurement of machines and equipments |
2 Months |
| Installation of Machines |
1 Month |
| Electrification |
1 Month |
| Recruitment of Staff and Workers |
1 Month |
Technical Aspects
Process of Manufacture
- Outer and inner link blank are cut from cold rolled steel strips on S.P.M. with progressive die sets.
- Rollers are drawn into cups on compound die sets from CR steel strips and then pierced on an automatic S.P.M.
- Bushes are manufactured by curling process on a S.P.M. from cold rolled strip with rounded edges.
- Pins are cut on an automatic Header Machine to required length.
- Barrelling
- Heat Treatment
- Barrelling
- Colouring
- Block Assembly on automatic machine.
- Chain assembly on automatic machines.
- Rivetting
- Greasing
- Packing.
Quality Control and Standards
BIS has prepared a standard specification No. IS 11740 :1986 on chains for motorcycle and the quality should conform to the same.
Production Capacity (per annum)
Item |
Qty. |
Amount(In Rs.) |
Automotive Chain
(Motorcycle Chain) |
342000 Nos. (Excluding 5% provision made for stage rejections) |
2,39,40,000 |
Pollution Control
The building/workshed, specially heat treatment section is to be provided with exhaust fans. Provision has also been made for neutralising of the cyanide salts. Necessary permission from Pollution Control Department/ Board is required.
Energy Conservation
- Machine Shop should be well ventilated and should have transparent roof sheets to get sufficient light during day time.
- The periodic maintenance of Machines should be carried out.
- Shunt capacitors should be used to improve the power factor.
Financial Aspects
Fixed Capital
| (i) Land and Building |
|
| Land requirement ; 1000 sq. Mtr : @ Rs. 3500 per sq. Mtr.: Rs. 35,00,000 |
| Raw material and finished goods store, office, maintenance room, laboratory, workers room, security room, pollution control area, DG set, raw water and bore well, general store room 250 Sq. Mtr @ 7000 / Sq. Mtr. |
Rs. 17,50,000 |
| Working Shed 400 Sq. Mtr @ Rs. 6000 / sq. mtr |
Rs. 24,00,000 |
| Heat treatment section, 75 Sq.mtr @ Rs. 7000/Sq. mtr |
Rs. 5,25,000 |
| Packing Section 25 Sq. Mtr Rs. 7000/ Sq. Mtr |
Rs. 1,75,000 |
| Land development, boundry wall ,gates and inside roads |
Rs. 5,00,000 |
| Total civil cost : (Land cost + building costs) |
Rs. 88,50,000 |
(ii) Machinery and Equipments
Particulars |
No. |
H.P. |
Amount
(In Rs.) |
| Production unit |
| Single action power press cap. 75 tonnes complete with automatic feeding system and electricals etc. |
2 |
15 |
10,00,000 |
| Single action power press cap. 10 ton complete with electricals |
1 |
2 |
1,00,000 |
| Single action power press cap. 50 tonnes complete with automatic feeding system and electricals etc. |
1 |
5 |
3,00,000 |
| Special purpose roller cups Punching Machine complete with automatic feeding systems and electricals etc. |
2 |
2 |
2,50,000 |
| Special purpose curling and cutting machine complete with automatic feeding system and electrical etc. |
2 |
4 |
5,00,000 |
| Special purpose bush making and sizing machine complete with automatic feeding system and electricals |
2 |
3 |
4,00,000 |
| Automatic header machine for cutting of rivetting pins complete with electricals etc. |
1 |
2 |
1,00,000 |
| Automatic special purpose lock pin turning machine complete with electricals etc. |
1 |
1 |
1,00,000 |
| Tumbling barrels complete with gear box motor and electricals etc. |
4 |
8 |
2,50,000 |
| 30 KW electric rotary retort type gas carborising furnace 30 Kg. Cap, complete with electricals etc. |
2 |
100 |
2,00,000 |
| 15 KW salt bath furnace electrically operated charge cap. 30 Kg. |
2 |
40 |
600,000 |
| Automatic chain block assembly machine complete with electricals and feeding system. |
2 |
4 |
10,00,000 |
| Automatic chain assembly machine complete with electricals etc. |
2 |
4 |
7,00,000 |
| Pneumatic chain stretching machine complete with 1 HP Compressor and electricals |
1 |
2 |
3,00,000 |
| Total |
|
|
58,00,000 |
Testing Section |
| Hardness Testing machine with spare set of diamonds and steel balls and standard test samples |
1 |
|
3,00,000 |
| Chain fatigue testing machine |
1 |
2 |
2,00,000 |
| Total |
|
|
5,00,000 |
Tool Room And Machine Section |
| 1500 mm Bed sliding surfacing and screw cutting centre lathe machine complete with electric motor, starter etc. |
1 |
2 |
3,00,000 |
| 500mm × 200mm traverse Horizontal spindle surface grinding machine complete with electricals etc. |
1 |
1.5 |
1,00,000 |
| 12mm cap. Precision drilling machine complete with electricals etc. and double ended bench grinder 200MM wheel dia with motor |
1 |
0.5 |
50,000 |
| DG set with accessories, Raw water with storage piping and pumping, electrical transformer and other utilities |
|
|
20,00,000 |
| 24" stroke shaping machine complete with electric motor and other electricals etc. |
1 |
3 |
1,50,000 |
| Universal milling machine size No. 2 alongwith vertical attachment and dividing head complete with electricals |
1 |
5 |
5,00,000 |
|
Pollution Control Equipment |
|
3 |
8,00,000 |
| Marking and measuring instruments |
|
|
3,00,000 |
| Special purpose toolings and other petty equipments |
|
|
7,50,000 |
| Total |
|
|
49,50,000 |
Total Fixed Capital Investment
Description |
Amount
(In Rs.) |
| Electrification and Installation |
| (i) Charges including cost of power connection and security deposit @ 10% of cost of machinery and equipment, 30% of plant and m/c cost as excise, sales tax and other expenses. |
45,00,000 |
| (ii) Total Cost of Machinery and Equipments |
1,12,50,000 |
| (iii) Cost of Office Equipment, Furniture |
5,00,000 |
| (iv) Pre-operative Expenses |
7,50,000 |
Total plant and machinery cost
(i +ii + iii+iv) |
1,70,00,000 |
| Total fixed cost = Total civil cost + total plant and machinery cost= Rs. 88,50,000+Rs. 1,70,00,000 |
2,58,50,000 |
B. Working Capital (per month)
(i) Personnel
Description |
No. |
Salary (Rs.) |
Amount
(In Rs.) |
| Administrative |
| General Manager |
1 |
30,000 |
30,000 |
| Production Manager, production supervisors, Laboratory chemists, Maintenance engineer, supervisors, |
10 |
|
2,00,000 |
| Finance manager, and his team |
1 |
2500 |
40,000 |
| Commercial manager and his team consisting of sales and marketing and purchase and administration team |
6 |
2000 |
1,00,000 |
| Foreman |
7 |
5000 |
35,000 |
| Heat Treater |
4 |
5000 |
20,000 |
| Skilled Worker |
50 |
4000 |
2,00,000 |
| Semi-skilled Worker |
24 |
3500 |
84,000 |
| Peon/Chowkidar |
10 |
3000 |
30,000 |
| Sweeper |
3 |
3000 |
9,000 |
| Total |
7,48,000 |
| Add Per-quisites @ 22% of salary |
1,65,000 |
| Total |
9,13,000 |
(ii) Raw Materials Including Packaging Requirements
Particulars |
Qty. MT |
Amount
(In Rs.) |
| Medium carbon steel sheet 19 SWG |
81 |
36,45,000 |
| CRCA, DD Grade steel strips 19 SWG |
25 |
10,00,000 |
| CR. Steel strip 11 mm × 1 mm thick with Rounded edges (rolled from wire) |
16.5 |
7,43,000 |
| Low Carbon 4.5mm dia steel wire |
25.5 |
12,00,000 |
| Liquid carburising materials |
12,000 liters |
2,00,000 |
| Ammonia Gas |
75 Cylinders |
3,00,000 |
| Packaging cartons etc. |
90000 Nos. |
1,50,000 |
| Misc. O/B items |
|
5,00,000 |
| Total |
|
77,38,000 |
(iii) Utilities
| |
(In Rs.) |
| Power |
69120 units @ Rs. 4.0/unit |
2,76,000 |
| Water |
5,000 |
| Total |
2,81,000 |
(iv) Other Contingent Expenses
| |
(In Rs.) |
| Postage and Stationery |
20,000 |
| Consumable Stores |
1,00,000 |
| Telephone and communication expenses |
20,000 |
| Repair and Maintenance |
28,000 |
| Transport Charges |
20,000 |
| Advertisement and publicity |
40,000 |
| Insurance |
14,000 |
| Sales Expenses |
3,00,000 |
| Miscellaneous Expenses |
2,00,000 |
| Total |
7,42,000 |
(v) Total Recurring Expenditure (per month)
| |
(In Rs.) |
| Raw Material |
77,38,000 |
| Personnel |
9,13,000 |
| Utilities |
2,81,000 |
| Other Contingent Expenses |
7,42,000 |
| Total |
96,74,000 |
Working Capital (for 3 months) 96,74,000 × 3 = Rs. 2,90.22,000
C. Total Capital Investment
| (i) Fixed Capital |
Rs. 2,58,50,000 |
| (ii) Working capital for 3 months |
Rs. 2,90,22,000 |
| Total |
Rs. 5,48,72,000 |
Financial Analysis
Cost of Production (per year) |
(In Rs.) |
| (i) Total recurring cost |
11,60,88,000 |
| (ii) Depreciation on pl. and m/c @ 10%
| 15,50,000 |
| (iii) Depreciation on Dies / Tools/ measuring instruments etc. @ 20% |
2,00,000 |
| (iv) Depreciation on office equipment @20% |
1,00,000 |
| (v) Interest on total investment @ 12% |
65,85,000 |
| (vi) Depreciation on civil construction @ 5% |
2,68,000 |
| Total |
12,47,91,000 |
Turnover (per year)
Item |
Qty. |
Rate (Rs.) |
Value (Rs.) |
| Motorcycle Chain |
1026000 Nos. |
133.33/ chain |
13,68,00,000 |
Net Profit (per year) (Before Income Tax)
| Profit |
= Sales - Production Cost |
| |
= Rs. 13,68,00,000 – 12,47,91,000 |
| |
= Rs. 1,20,09,000 |
Net Profit Ratio
| |
Net Profit per year×100 |
| |
Turnover per year |
| |
1,20,09,000 × 100 |
| |
= 13,68,00,000 |
| |
= 8.8% |
Rate of Return
| |
Net Profit per Year ×100 |
| |
Total Investment |
| |
1,20,09,000 × 100 |
| |
= 5,48,72,000 |
| |
= 21.88% |
Break-even Point (% of total Production envisaged)
Fixed Cost |
(In Rs.) |
| Total Depreciation |
21,18,000 |
| Total interest |
65,85,000 |
| 40% of salary and wages |
43,82,000 |
| 40% of other contingent expenses |
35,61,000 |
| Total |
1,66,46,000 |
| (ii) Net Profit (per year) |
Rs. 1,66,46,000 |
| B.E.P |
Fixed cost × 100
|
| |
Fixed cost + Profit |
| |
1,66,46,000 X100 |
| |
16646000 + 1,20,09,000 |
| |
= 58.09% |
Addresses of Machinery Suppliers
- M/s. Milton Machine Tools
P.B. No. 30,
Sonepat (Haryana)
- M/s. Godly Machine Tools (P) Ltd.
C-190, Phase-VI,
Focal Point, Ludhiana.
- M/s. Research and Development
Centre for Bicycle and Sewing
Machines, Focal Point,
Ludhiana.
- M/s. Vishkarma Electric Furnaces
St. No. 2, Partap Nagar,
Ludhiana–141003
- M/s. Kalsi Machine Tools
Gill Road,
Ludhiana-141003
- M/s. Simplicity Furnaces Ltd.
55-B, Phase-II, Mayapuri,
New Delhi.
- M/s. Sant Machine Tools
G.T. Road, Near Dholewal Chowk,
Ludhiana.
- M/s. Raj Enterprises
628, Industrial Area-B,
Ludhiana.
- M/s. Basant Mechanical Works (Regd.)
720-722, Basant Road,
Industrial Area–B,
Ludhiana.
- M/s. Deep Industries
Oswal Street No. 1,
Industrial Area–B,
Ludhiana.
Addresses of Machinery Suppliers
- M/s. Rolled Strips and Profiles Ltd.
Karur (Kerla).
- M/s. Avon Cycles Ltd.
Ludhiana.
- M/s. Special Steels Ltd.
Mumbai and Bhagwan Chowk,
Ludhiana.
- M/s. Steel Strips Ltd.
Industrial Area-B,
Ludhiana-141003.
- State Small Industries and Export Corporations.
- M/s. Steel Authority of India Ltd.
- Open Market.
For further information please contact
Information Manager
TIMEIS Project
E-mail: timeis@ficci.com
