Monday, 19 December 2011

Start a Sanitary Ware Business




   
(251). Start a Sanitary Ware Business 

Today sanitary wares are made from variety of materials each of them having certain advantages over the others. However, sanitary wares made of ceramic has many advantages over those made of other materials and are economical also. It has a wide acceptance in the society. The ceramic sanitary wares are used for sanitation purposes and the product ranges from washbasins, closets, urinals, sinks, baths to hoppers. It has properties like very good resistance to weathering, chemical erosion, mechanical strength and resistance to abrasion. Its use in sanitation has preference over other materials. In near future also the chance for replacing these items by other materials looks very black. They are economical, easy-to-clean, longer life and are available in pleasing colours.Introduction


    
Market Potential
The market for ceramic sanitary ware is very bright since its demand is increasing at a good rate. The reasons are not far to seek. The improved living standards coupled with good economic situations along with supporting Government policies for housing sector speak themselves for the demand of these products. There is large renovation activities taking place in the urban areas. All these factor ensure and creates a positive demand for these items. It is an essential and integral part of building construction in areas like housing, educational and research institutions, hospitals, industries, hotels and restaurants, cinemas and other public places.
The formation of Housing Development Finance Corporation and lucrative financial scheme of Government and private banks and asy availability of finance at low rates of interest from banks has pushed the demand of building material due to all-round growth in the building construction sector. The role of the private sector, which accounts for the lion's share of investment in housing and construction has increased and it shall remain favourable.
The demand of ceramic sanitary wares is increasing day by day in rural and urban areas due to increased construction activities and changing sanitation habits. There are around 120 small scale units with an annual capacity of around 85,000 MT. The small scale industries are manufacturing mostly white coloured opaque sanitary ware which has a large demand in the rural areas. A number of units have also started manufacturing coloured variety of sanitary ware which is in great demand not only in the urban areas but has created a good export market also. The States and Central Govt. have launched a number of house building schemes and sanitation programmes across the country, which promises a good scope for the establishment of small-scale units.

Basis and Presumptions
i. It had been taken into consideration that the unit will work on single shift basis for 300 days in a year. The firing operations are, however, to be carried out continuously on three shift basis till particular firing cycle is complete in all respects

ii. To achieve full plant capacity 1-2 months trial production is required

iii. Interest rate is a t 13%

iv. Margin money will vary from 20- 25% depending upon the location and scheme adopted by the entrepreneurs i.e. self employment or commercial scheme.

v. Operative period of the project is around 10 years considering technology obsolescence rate and period of repayment of loan.

vi. The costs of land, construction charges, cost of machinery and equipment, raw materials and consumables, salary and wages, other expenses etc. indicated in the profile are based on the prices prevailing at the time of preparation. Therefore, there are subject to necessary changes from time to time based on the local conditions.
Implementation Schedule
Sl.No.ActivityPeriod
StartingCompletion  
1.Survey for collection of data in respect of demand Raw material, including power and fuel availability of technology, pollution control0 to2nd month
2.Arrangement of margin money2nd to3rd month
3.Preparation of project document and registration2nd to3rd month
4.Finance assistance4th to6th month
5.Selection of site and development of land4th to6th month
6.Make shift office 7th month
7.Clearance for pollution3rd to6th month
8.Electricity, fuel and water tie-up for availability4th to6th month
9.Construction of building7th to10th month
10.Identification/selection of machine 5th month
11.Placement of order (Machine) 6th month
12.Transportation and installation of machine and equipment10th to11th month
13.Selection of raw material and placement of orders 9th month
14.Receipt of raw material10th to11th month
15.Installation of laboratory9th to11th month
16.Trial production 12 th month


Process of Manufacture
Process of Manufacture The non-plastic raw materials like quartz, felspar and some clays are crushed and ground to required fineness. They are unloaded in an agitator where more clay is added as per composition. The slip is screened, magnetized and kept in an agitating tank with addition of required flocculents. The wares are cast in plaster moulds. The wares are dried and finished and are kept on open racks for drying. The dried wares are tested for cracks and then applied glaze by spraying. It is then loaded in the kilns for firing at a temperature of about 1260OC. After firing they are sorted out and packed for sale.

Quality Control and Standards 
The Bureau of Indian Standards has formulated and published the following specifications for maintaining the quality of the product and testing.
IS 771:1963
IS 771:1979 Series
IS 773to775
IS 2556 Series
IS 2781:1964
IS 2789:1975
Production Capacity (per annum)
Quantity: 1,200 M.T.
Value: Rs. 25200000

Motive Power95 HP.

Pollution Control
In this projects shuttle/tunnel kiln is recommended which is fuel efficient and hence comparatively non-polluting, however dust collecting equipment need be installed on crushing machine and the furnace be fitted with retrofitting for removal of obnoxious waste. The unit should obtain No Objection Certificate from State Pollution Control Board.
Energy Conservation
This industry needs energy conservation in fuel as well as in electricity. Ceramic fibre lined shuttle kiln proposed in the project profile is fuel efficient and the latest modern kiln which conserves fuel energy when compared with conventional ceramic D.D. kilns. Simple precautions and knowledge of effective utilization of electric power need be practiced.

Financial Aspects 
A Fixed Capital
( i ) Land and Building(Rs.)
Land 2400 sq.mtrs. @ Rs.2000 per sq.mtr.4800000
Building 
Office, stores, laboratory 300 sq.mtr @ Rs.3500 per sq. mtr.1050000
Working shed 900 sq.mtr @ Rs.3000 per sq.mtr.2700000
Total
8550000
(ii) Machinery and Equipments Production Unit
DescriptionQty. Nos.Price (Rs.)
Ball mill size 6ftx6ft complete with porcelain lining and grinding media with 1.0 HP motor2400000
Ball mill size 3ftx3ft complete with porcelain lining grinding media with 5 HP motor4400000
Agitator vat dia 10.5 ft and height 10.5 ft. Complete with 5 HP motor3120000
Slurry pump cap.1000 ltrs. Per hr. with 5 HP motor130000
Magnetic seperator of permanent type110000
Spray booths complete with complete with air compressor spray guns etc.460000
Testing Laboratory equipments and apparatusL.S.40000
Ceramic fibre lined, shuttle kilns, oil fired, capacity 5 tonnes complete with firing system, loading cars and setters etc. with one extra car each33600000
Oil pipe fitting for furnaceL.S.80000
Oil storage tank and pre heating systemL.S.60000
Deepwell pump set with over- head storage tank (2 HP)L.S.100000
Installation and erection chargesL.S.80000
Drying racks and working table, slurry container etc.L.S.250000
Office equipment and furnitureL.S.100000
Total cost of machinery and equipment5330000
(iii) Pre-operative (project deposits etc. and other unforeseen expenses)L.S.1,00,000
cost, non-refundable,
Total fixed capital(i+ii+iii)13980000
B. Working Capital (Per Month)

(i) Personnel (per month)
DesignationNos.SalaryTotal (Rs.)
Manager(Ceramist)11500015000
Supervisor5800040000
Accountant180008000
Store keeper160006000
Clerk/Typist3400012000
Skilled workers8500040000
Semi skilled workers10450045000
Un-skilled workers30300090000
Watchman/peon330009000
Total
265000
22% of salary58300
Total
323300
(ii) Raw Materials Including Packing Requirements (per month)
ProductionQty. (tons)Rate Rs (MT)Value (Rs.)
China clay13200026000
Ball clay/fire clay4080032000
Felspar powder30140042000
Quartz powder25180045000
Plaster of paris8200016000
Other colours and chemicalsL.S. 15000
Packing materialL.S. 16000
Total
192000

(iii) Utilities (per month)(Rs.)
Power 13166 kWH unit @ Rs. 5.00 per uni 65830
WaterLS2500
Fuel furnace oil 35 kilo ltr @ Rs.30'000/kt.ltr. 1050000
Kiln furnitureLS20000
Total
1138330

(iv) Other Contingent Expenses (per month)(Rs.)
Postage and stationery2000
Telephone3000
Consumable stores10000
Repair and Maintenance10000
Advertisement and publicity20000
Insurance4000
Misc. expenditure10000
Total
59000

(v) Total Recurring Expenditure (per month)1712630
(vi) Total Working Capital (2 months basis)3425260
C. Total Capital Investment
Fixed capital13980000
Working capital3425260
Total
17405260

Machinery Utilization
Ball mill 80% (on the basis of 24 hours working in a day)
Agitator 100% (on the basis of 24 hours working in a day)
(1) Cost of Production (per year)(Rs.)
Total recurring cost20551560
Depreciation on building @ 5%427500
Depreciation on machinery and equipment @ 10%130000
Depreciation on kilns @ 20%720000
Depreciation on drying racks, hand tools Working tables etc. @ 25%62500
Depreciation on office equipment @ 20%20000
Interest on total capital investment @ 13%2262683.8
Total
24174243.8
(2) Turnover (per year)
ItemsQtyRate per tonValue (Rs.)
Sanitary ware I quality600 MT2800016800000
Sanitary ware II quality600 MT2200013200000
Total
30000000

(3) Net Profit (per year)=Turnover (per year) – Cost of production
 =5825756.2
   
(4) Net Profit Ratio=Net profit x 100
--------------------
  Turnover
   
 =5825756.2 x 100
---------------
  30000000
   
 =19.42
   
(5) Rate of Return=Net profit x 100
----------------------
  Investment
   
 =5825756.2 x 100
----------------------
  17405260
   
 =33.47
(6) Break-even Point
Fixed Cost(Rs.)
Depreciation1360000
Interest on total investment2262683.8
Insurance48000
40% of salary and wages1551840
40% of other contingent expenses excluding insurance264000
Total
5486523.8

B.E.P=Fixed cost x 100
---------------------
  Fixed cost + Profit
   
 =5486523.8 x 100
-----------------------
  5486523.8+ 5825756.2
   
 =48.5%
Additional Information
The scheme has been calculated with capital of 4 M.T. production per day. Since it is economical to purchase powdered quartz and felspar the same has been adopted.

Addresses of Machinery Suppliers 
1. M/s. Amic Industries (P) Ltd.
85-D, Dr. Suresh Sicar Road,
Kolkata

2. M/s.Gidwaney Brothers
73, Netaji Subash Road,
P.B.No.2346,
Kolkata

3. M/s.Saboo Engg. Works
Kuchaman Road- 341509
(Rajasthan)

4. M/s. Perfect machine Tools Corporation
1, Smith Road, Chennai-1

5. M/s. St.Vincent Industries
Convent Road, Kolkata

6. M/s. Jaycee Traders
12, Gitanjali,
1st Floor, P.B. No.378,
Mumbai-5

7. M/s. Bengal Lion Ind. Furnace Ltd.
D-828, New Friends Colony,
New Delhi-110066

8. M/s.Sharma Kiln Technology (P) Ltd.
4, Gujarati House,
Opp. Victoria Garden,
Lal Darwaja,
Ahmedabad – 380001

9. M/s. Unifire
16-13 Shakespere Sarani
4th Floor, Kolkata 700071

Raw Material Suppliers 
1. M/s. Wolkam(P) Ltd.
Mewar Ind. Estate, P.B. No.21,
Udaipur (Rajasthan)

2. M/s. Multani Minerals
Station Road,
Thangadi(Gujarat)

3. M/s.Tahla Ram and Sons,
Rathkhna,
Bikaner, (Rajasthan)

4. M/s. Oriental Prespating Co.
1880/2, Opp. Desai Pot,
Khadra, Ahmedabad

5. M/s. Ompura Parn Shankar and Sons
Thangadh, Dist. Surendranagar (Gujarat)

6. M/s. United Minerals Ltd.
Comm. Building
102-E, Netaji Subash Road,
Kolkata

7. M/s. Ferro Castings and Colours Ltd.
Post Joka 24, Paraganas
Kolkata

8. M/s. Udar Enterprises
1, Gandhi Road,
Salem - 676007

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