Start a Wrought Iron Furniture Making Unit

      
(203) Start a Wrought Iron Furniture Making Unit

Wrought iron articles in furniture industry are becoming more popular. The articles like chairs, sofas, tables and beds are made in quite attractive models with different designs on their arms and backs. Wooden furniture after some period, is worn out due to defects in wood quality and normal wear and tear. Due to elegant appearance, durability and innovative designs, wrought iron furniture is becoming popular in modern society. They are fast replacing the conventional wooden tables, chairs, sofas, beds.Introduction

Market Potential

With increase in the population and overall development that has taken place in the country, the number of educational institutions, hospitals, commercial establishments and offices are widely using chairs, tables, sofas and beds. This is creating good market potential in urban and semi-urban areas. As already explained, due to certain specific advantages, wrought iron furniture is fast replacing conventional wooden items. Apart from the domestic market, there is also export market for quality wrought iron furniture.

Basis and Presumptions

1) The cost of machinery and equipment is for particular make and prices are approximate.

2) All the operations involved in manufacturing wrought iron furniture will be undert taken in Industrial Workshop of the unit.

3) This project profile is prepared on the basis of double shift for 16 hours of working in a day. Total working days in a year have been assumed to be about 300 and efficiency 75%.

4) The skilled and semi-skilled workers in line are available in the local area.

5) The rental value of the land and built up area has been stipulated on the basis of rate prevailing in the industrial area. It may vary from place to place.

6) Rate of interest has been calculated @ 12% per annum. However, this figure is likely to vary depending on the financial outlay of the project and location of the unit.

7) The provisions made in other respect viz; personnel, utilities, raw material and over head expenses etc. are based on the prevailing market rates.

8) All the machinery, raw material would be available from indigenous sources.

9) The break-even point has been calculated on envisaged capacity utilisation basis.

10) The operative period of this project is estimated to be about ten years, considering technology obsolescence.

Implementation Schedule

Sl.No.	Activity	Period
1.	Preparation of project report	1 Week
2.	Provisional registration from DI/DIC of the area for getting assistance/ financial help	2 Weeks
3.	Location of work shed with necessary infrastructure in industrial Area before ordering the Plant and Machinery	2 Weeks
4.	Placement of order for plant and machinery	3 Weeks
5.	Recruitment of Staff	2 Weeks
6.	Installation of plant and machinery	2 Weeks
7.	Time allotted for other misc. work	2 Weeks
8.	Trial Production	Two Weeks

Total time required to start commercial production is estimated to be about four months.

Technical Aspects

Process of Manufacture

In the open market, plenty of raw material of wrought iron in the shape of round, square, iron rods, square pipes and also in other sectional forms is available. Wrought iron is having its own property of “malleability,” it can withstand the load without cracking.

Chairs, tables, sofas and beds used in offices, factories, houses and hospitals are made from light wrought iron sheets, strips and tubular wrought iron. The sheets, strips and tubular wrought iron are cut to required sizes and pressed to shape, bent in a press brake for sides and drawers. Pipes of wrought iron for chairs, tables, sofas and beds can also be bent according to design. Backs of chairs, sofas and beds consist of decorative designing of various kind of flowers and leaves etc. For this, design can be made on pressing machine on the strips of wrought iron of different sizes. Then the sides and backs of wrought iron furniture are welded. Holes are made by drilling, wherever necessary for fitting screws.

Fixing of doors, hinges, assembly, cleaning, pickling and drying are to be done before painting. The spray painted articles are to be stove enamelled.

Quality Control and Standards 

There is no quality standard. It is only fabrication of wrought iron steel with various self made designs. The attractive designs thus put lot of cheeriness in the products of wrought iron furniture.

Production Capacity

It is proposed to manufacture 1500 Chairs, tables, sofas and beds each per annum assuming their weight to be 7.5 Kg., 15 Kg, 22 Kg and 30 Kgs. respectively of wrought iron steel viz. rods, pipes and strips of various sizes.

Motive Power

10 HP.

Pollution Control

No pollution control device is necessary for this project. However, spray painting will cause pollution to some extent which can be minimised by installing exhaust fans in painting room.

Energy Conservation

No specific energy conservation system is required. Energy conservation can be done by saving single phase power connections as much as possible. General awareness is to be created for economic utilisation of energy at all points as far as practical.

Financial Aspects
A Fixed Capital

(i) Land and Building	Amount (In Rs.)
(i) Land 450 sq. mtr. @ Rs. 3500 per sq. mtr including registration	1575000
(ii) Cost of land development, fencing, approach road, inside roads, land scaping, drainage etc. @ Rs. 1000 per sq. mtr.	450000
(iii) Total built-up area 425 sq. mtrs. as follows:
Administrative building 75 sq. mtrs. construction cost @ Rs. 7,500 per sq. m	562500
Factory shed 300 sq. mtrs. construction cost @ Rs.5000 per sq. mtr.	1500000
Stores, staff canteen etc. 50 sq. mtrs. @ Rs. 6,000 per sq. mtr.	300000
Water System (including Bore Well + over head tank etc)	500000
Total civil cost= cost of land + building	4887500

(ii) Machinery and Equipments

Sl. No.	Description	Ind./ Imp.	Qty.	Amount (In Rs.)
1.	Tredle Guillotine shearing M/c. 48" width	Ind.	1	80000
2.	Power Press 25 Tonne capacity	-do-	1	60000
3.	Hand operated brake press machine capacity 14 SWG x 1800 mm (Sheet Bending)	-do-	1	50000
4.	Spot Welding machine 10 SWG with Accessories	-do-	1	40000
5.	Hand operated hydraulic pipe bending machine 25 mm, 36 mm, capacity with all dies	-do-	1	30000
6.	Drilling machine 1½”	-do-	1	15000
7.	Air Compressor with (1 HP) motor and Spray Gun	-do-	1	18000
8.	Oxy-acetylene gas welding set	-do-	1	14000
9.	Pickling Tanks (Lead-lined)	-do-	7 Nos.	25000
10.	Power Hacksaw machine 6" Jaw Capacity	-do-	1 No.	25000
11.	Stoving Chamber (8' x 4' x 4') fabricated	-do-	1	30000
Total				387000
Tools and Dies				50000
Furniture and Office equipments				80000
Total				517000
(iii)Pre-operative Expenses				30000
Total Fixed Capital (i+ii+iii)				5434500

B. Working Capital (per month)

(i) Staff and Labour

Sl.No.	Designation	Nos.	Salary (Rs.)	Total (In Rs.)
(a) Administrative Staff
1.	Sales-cum-Marketing Manager	1	15000	15000
2.	Accountant-cum Store Keeper	1	8000	8000
3.	Clerk-cum-Typist	1	6000	6000
4.	Peon/chowkidar	2	3000	6000
5.	Sweeper (Part-time)	1	2000	2000
(b) Technical Staff
1.	Foreman/Supervisor	2	8000	16000
2.	Skilled Workers	8	6500	52000
3.	Semi-skilled Workers	4	5500	22000
4.	Welders	4	5000	20000
5.	Helpers	4	4000	16000
Total				163000
Add Perquisites @ 22% of salary				35860
Total				198860

(ii) Raw Material

Sl. No.	Description	Qty.	Rate (Rs.)	Total (In Rs.)
1.	Wrought iron pipes of different Dia. Sizes in Tonnes	10	45000	450000
2.	Wrought iron strips in 2 mm 3 mm, 6 mm and 10 mm thickness in Tonnes	4.8	53000	254400
3.	Angle Irons and Rounds in different size	4	40000	160000
4.	Seating Material for Chairs and Sofas in Nos	1000	550	550000
5.	Coir Foam Sheets for beds in Nos	250	1450	362500
6.	Bought out components such as nuts, bolts, rivets, Welding Rods and Paints etc.			120000
Total				1896900

(iii) Utilities	(In Rs.)
Electricity and fuel	10000

(iv) Other Contingent Expenses	(In Rs.)
1. Insurance Expenses	3000
2. Advertisement/Publicity charges	30000
3. Travelling Expenses	10000
4. Consumable stores such as oil, lubricants and Cotton waste etc.	10000
5. Repair and maintenance	4000
6. Transport and packaging charges	20000
7. Postage and stationery	6000
8. Telephone Expenses	5000
9. Miscellaneous Expenses	10000
Total	98000

(v) Total Recurring Expenditure (per month)	(In Rs.)
1. Personnel	198860
2. Raw Material	1896900
3. Utilities	10000
4. Other Contingent Expenses	98000
Total	2203760

(vi) Total Working Capital (for 2 Months)
Rs 2203760 X 2	4407520

C. Total Capital Investment

(1) Fixed Capital	5434500
(2) Working Capital (for 2 months)	4407520
Total	9842020

Machinery Utilisation

The number of machines to be installed has been determined in such a way, that planned scheduling of jobs will not cause any bottleneck in operation during bulk production. As such, the unit will make utilisation of machines as envisaged, without any bottleneck.

Financial Analysis

(1) Cost of Production (per annum)	(In Rs.)
i) Total recurring cost	26445120
ii) Depreciation on Machine Equipment @ 10%	38700
iii) Depreciation on Furniture and Office Equipment @ 20%	16000
iv) Depreciation on Tools and Dies @ 25%	12500
v) Interest on total investment @ 12%	1181042
vi)Depreciation in Building @ 5 %	244375
Total	27937737

(2) Turnover (per year)	(In Rs.)
i) By sale of 3000 Nos. of Wrought iron Chairs @ Rs. 900 each	2700000
ii) By sale of 3000 Nos. of Wrought Iron Tables @ Rs. 2000 each	6600000
iii) By sale of 3000 Nos. of Wrought Iron Sofas @ Rs. 2800 each	9000000
iv) By sale of 3000 Nos. of Wrought Iron Bed @ Rs. 4000 each	12600000
Total	30900000

(3) Net Profit (per year)		Rs. 30900000 - 27937737
	=	2962263
(4) Profit Ratio	=	Net Profit per year × 100 --------------------
		Turnover per year
	=	2962263 × 100 -------------------
		30900000
	=	9.59
(5) Rate of Return	=	Net Profit/year × 100 ---------------------------
		Capital Investment
	=	30.1

(6) Break-even Point

(i) Fixed Cost (per year)	(In Rs.)
a) Depreciation on machinery, Office Furniture, Tools and Dies etc.	67200
b) Depreciation on Building @ 5 %	244375
c) Insurance	36000
d) 40% of Salaries and Wages	954528
e) 40% of Contingent expenses other than Insurance	456000
f) Interest on total investment	1181042
Total	2939145

(ii) Net Profit (per year)

2962263

B.E.P	=	Fixed Cost × 100 -----------------------
		Fixed Cost + Net Profit
	=	2939145 × 100 -----------------------
		2939145 + 2962263
	=	49.8

Addresses of Machinery and Equipment Suppliers (For Treadline Guillotine m/c.) 

1. M/s. Ganesh Engg. Works
A-287, Okhla Indl. Area,
Phase–I, New Delhi-110020.

2. M/s. Lamba Press and Shears
6/10, Kirti Nagar Indl. Area,
New Delhi–110015

3. M/s. Om Mechanical Works
Plot No. 5, Gali No. 4,
New Rohtak Road Indl. Area,
New Delhi-110005.

4. M/s. United Engg. Corporation
B-96, Mayapuri, Phase-I,
Rewari Line,
New Delhi-110064.

For Power Press 

1. M/s. Lamba Bros (P) Ltd.
6/10, Kirti Nagar Indl. Area,
New Delhi–110015.

2. M/s. Sonar Machine Tools
Near Kishan Cold Storage,
Dr. Vikram Sarabhai Marg,
Gondal Road, Rajkot–360004.

3. M/s. Vishwakala Machine Tools
Gondal Road, Near S.T. Workshop,
Rajkot - 360 004.

4. M/s. Vankes and Company
13/1, Indl., Estate, Patliputra,
Patna - 800 013.

For Hacksaw Machines 

1. M/s. Sagar Heavy Engg. (P) Ltd.
G.T. Road, Nand Pur P.O.,
Near Sannewal,
Ludhiana.

2. M/s. Vee Kay Industries
S-B, Textile Colony, Indl. Area, A
Ludhiana.

3. M/s. Jaswant Engg. Works
G.T. Road, Millar Gang,
Ludhiana.

For Hand Operated Brake Press 

1. M/s. Modgil Co.
G.T. Road,
Batala - 143505.

2. M/s. Sonar Machine Tools
Near Kishan Cold Storage,
Dr. Vikram Sarabhai Marg,
Gondal Road,
Rajkot - 360 004

3. M/s. Khalsa Engg. Works
B-226, Naraina Indl. Area,
Phase-I, New Delhi - 110028.

For Drilling Machine 
1. M/s. Modern Tools Manufacturers
B-118, Phase-I,
Mayapuri Indl. Estate,
New Delhi.

2. M/s. Paul and Co.
24, Najafgarh Road,
New Delhi-110015

3. M/s. Shree Mahalaxmi Engg. Works
27, DLF Indl. Area,
Najafgarh Road (Moti Nagar)
New Delhi-110 015.

For Welding Sets 
1. M/s. Kukreja Welding Equipments
A-63, G.T. Karnal Road,
Indl. Area, Delhi-110 033.

2. M/s. Sham Ravinder and Co.
23, New Qutab Road,
Opp. Telewara,
Delhi - 110 006.

3. M/s. Berco Welding and Electricals (P) Ltd.
G.T. Road By Pass, Near Indl. Estate,
Jullunder City (Punjab).

For Pickling Plants 

1. M/s. Govan Indl. Corporation
29-R/2, Indl. Area,
New Rohtak Road,
New Delhi.

For Air Compressor 
1. M/s. Indoon Projects and Equipments
D-170, Okhla Indl. Area, Phase-I,
New Delhi-110020.

2. M/s. Three-F-Filters (P) Ltd.
C-110/1, Naraina Indl. Area,
Phase-I,
New Delhi-110028.

3. M/s. Hydraulic Machine Tools
S/228, Indl. Area,
Jallandar City.

Raw Material Suppliers 

Raw material is available in the local markets.

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