Start a Neck – Ties Making Unit

         
(244)  Start a Neck – Ties Making Unit
   

Ties are considered as item of fashion. Ties has been finding exceptionally good acceptance among the sales representatives, doctors, CEO's, Engineers, Hotel servants and others such as college and school students. Shirts worn without ties are considered as incomplete. Wearing of ties improves one's personality and respect. Ties are classified into two types, which are bow ties and neck ties. The former one are generally worn by hotel waiters whereas the later are worn by people mentioned above.

Ties are made from various types of fabrics and most popular fabrics that are used for the manufacture of ties are cotton, viscose, silk fabrics and their blends. Manufacturing of ties is very easy and anyone knowing tailoring and managing a unit can venture into this industry. The raw material and machinery required for the manufacture of ties are abundantly available. In this report, an attempt has been made to provide sufficient information for setting up of tie manufacturing units.

Market Potential

In recent years almost all the countries in the world are witnessing lot of changes in life style of people. Present life style is witnessing very fast changes in wearing fashion garments. The demand for fashion garments is very huge due to shifting of wearing fashion garments from elite people to common persons. Among various fashion garments, tie occupies an important place. There are very less number of units engaged in the manufacture of ties and as such demand and supply gap is getting wider. Tie have its own market demand from various market segments. Main customers for ties are Doctors, CEOs, Sales representatives, waiters in star hotels, reception counters and executives.

Basis and Presumptions

1. This project is based on double shift basis and 300 working days in a year.

2. The Building is considered of own.

3. The cost of machinery and equipments/materials indicated refers to particular make and approximately to those prevailing at the time of preparation of this project.

4. The cost of installation and electrification is taken @ 10% of cost of machinery and equipment.

5. Non refundable deposits, project report, cost, trial production, security deposits with electricity board are classified under preoperative expenses.

6. Depreciation has been considered:

(a) on plant and machinery @ 10%
(b) on office furniture & fixtures @ 20%

7. Interest on capital investment has been taken @13% per annum on borrowing amount.

8. Minimum 25% of total investment is required as margin money.

Implementation Schedule

Sl. No.	Activity	Period
1.	Selection of site/working shed	1 month
2.	Preparation of feasibility report	1 month
3.	Registration with commissioner of Industries/DIC	1 month
4.	Arrangement of finance (term loan and working capital)	3 months
5.	Procurement of machinery and equipment	1 month
6.	Plant erection and electrification	2 weeks
7.	Arrangement of raw material including packaging material	1 month
8.	Miscellaneous works like power/water connection etc.	2 months

Note: Considering that some of the above activities may be overlapping, the project implementation will take a period of 4 months approximately for starting the production.

Technical Aspects
Process of Manufacture

Before starting the stitching operations, fabrics of required quality are placed on the cutting table in layers and lay mark is prepared on top of the fabric layer and these layers are perfectly cut as per the mark without any distortion in cutting. The panels after cutting are taken out from the table and supplied to the skilled tailors for stitching. After the stitching, ironing is done with the aid of electric iron. Ironing is an important process by which ties are given proper and final shape. Ties are finally checked for any objectionable faults and packed for marketing.

Quality Control and Standards

This product is consumable item and having different designs and colours and its combinations depending upon the demand of the consumers. So standard specifications of appropriate quality is not possible. However, to manufacture better quality, good quality fabrics and other materials are to be used.

Production Capacity (per annum)

	Qty. (pcs)	Value (Rs.)
Ties of different sizes	210000	5250000

Motive Power

Power required to run this industry will be 5 HP.

Pollution Control

This industry does not involve anypollution.

Energy Conservation

Power requirement is very low, even then energy can be saved by proper house keeping.

Financial Aspects
A. Fixed Capital

(i) Land and Building
Land 200sq.mt. @ Rs. 3000p.s.m. Amounting Rs 600000.00
Building Area
Factory shed	100 sq. mt.
Store (Raw material)	25 sq. mt.
Store (Finished goods)	50 sq. mt.
Office etc.	25 sq. mt.
Total Covered Area	100 sq. mt.
Total Construction Cost @ Rs. 4000/sq.mt.	400000.00
Total Investment in land and Building	1000000.00

Machinery and Equipments

Sl. No.	Description	No.	Rate (Rs.)	Amount (Rs.)
1.	Eastern straight bar cloth cutting machine with motor	1	70000	70000
2.	Power operated single needle lock sewing machine	10	320	3200
3.	Electric iron	4	2200	8800
4.	Table and workshop items	LS	17000	17000

(iii)	Other Fixed Assets	(Rs.)
a.	Erection and installation	9900
b.	Office furniture	25000
c.	Pre-operative expenses	25000
	Total	158900
	Total Fixed Capital	1158900

B. Working Capital (per month)

(i) Staff and labour wages

Sl. No.	Designation	Nos.	Rate (Rs.)	Amount (Rs.)
1.	Manager/Designer	1	8000	8000
2.	Clerk/Typist	1	4000	4000
	Production Staff
1	Cutting Master	2	6000	12000
2.	Skilled workers	18	3800	68400
3.	Helpers	8	3000	24000
	Total			116400
	Perquisites @ 20%			23280
	G. Total			139680

(ii) Raw Material

Sl. No.	Description	Unit	Qty.	Rate/ Unit (Rs.)	Amount (Rs.)
1.	Synthetic fabrics of different colours, shades and design	Mts.	3000	54	162000
2.	Sewing thread labels of different colours and shades	Mts.	LS	7000	7000
3.	Packing materials	Nos.	LS	20000	20000
	Total				189000

(iii) Utilities	(Rs.)
Electricity Bill	6000
Water charges	500
Total	6500

(iv)		Other Contingent Expenses	(Rs.)
1		Postage/Stationery	1000
2		Repairs and maintenance	800
3		Transport /travelling charges	1000
4		Insurance	250
		Misc.	2000
		Total	5050
(v)		Total Recurring Expenses (per month)	340230
(vi)		Total Working Capital (for 2 months)	680460

C. Total Capital Investment

1.	Land Machinery and equipment	1158900
2.	Working capital (for 2 months)	680460
	Total	1839360

Machinery Utilisation

Capacity utilisation is considered as 70% of installation capacity.

Financial Analysis

(1) Cost of Production (per year)	(Rs.)
Recurring expenses	4082760
Depreciation on Building @ 5 %	50000
Depreciation on machinery @ 10%	15890
Depreciation on Office furniture @20%	5000
Interest on total investment @13%	239116.8
Total	4392766.8

(2) Turnover (per year)	Qty. (pcs)	Rate/ (Pc.)	Total (Rs.)
Ties of synthetic fabrics	210000	25	5250000

(3)	Net Profit (per year)	857233.2
(4)	Net Profit Ratio (Net Profit/ Turnover (per year)	19.51
(5)	Rate of Return on Investment (Net Profit/Total Capital Investment)	46.6

(6) Break-even Point

Fixed Cost	(Rs.)
Depreciation on Plant & Machinery office equipment etc	20890
Depreciation on Building	50000
Interest on capital investment	239116.8
40% of wages of staff and labour	670464
40% of other expenses	23040
Insurance	3000
Total	1006510.8