kushalbharat rmc services llp

KUSHALBHARAT RMC SERVICES LLP Office: 16, Ganesh Chandra Avenue, 4th Floor, Kol -13 (A premier manufacturer of AAC Blocks/Panels) Factory: Mouza – Ruiya, J.L. No. 20, Kalyani Exp. Way, Dist. - North 24 Parganas

PROJECT AT A GLANCE

1 NAME OF THE COMPANY KUSHALBHARAT RMC SERVICES LLP2 LLPIN AAD-57783 REGISTERED OFFICE 16, Ganesh Chandra Avenue, 4th Floor, Gandhi

House, Kolkata - 700013

4 INDSUTRY TYPE Manufacturing

5 SIZE OF UNIT SSI Industry

6 NATURE OF INDUSTRY Proposed manufacturing of Autoclaved Aerated bricks / blocks by using Fly Ash/Pond Ash as major raw material.

7 LOCATION OF FACTORY Mouza – Ruiya, J.L. No. 20, P.S. – Khardah, Dist.-North 24 Parganas

8 CONSTITUTION OF THE COMPANY Private Limited 9 DATE OF INCORPORATION 19.03.2015

10 NAME OF THE DIRECTORS 1. Shri Naresh Kumar Agarwal2. Shri Biman Roy

11 KEY PERSONNEL Shri Naresh Kumar Agarwal

12 PRODUCTS Autoclaved Aerated bricks / blocks/panels

13 CAPACITY 60,000M3 per Annum

14 PROJECT COST Rs. 11.09 crores15 MEANS OF FINANCE Term Loan: Rs. 4.22 crores

Promoters Contribution: Rs.6.87 crores

16 RAW MATERIALS Fly Ash, Gypsum, Lime, Cement & Aluminium Powder

17 CUSTOMER SEGMENTS 1. Construction Industry 2. Infrastructure Sector

18 TECHNICAL KNOW-HOW: The promoters mainly Mr. Agarwal is engaged insimilar type of business of Fly Ash Bricks andConcrete block with their sister concern and the sameplant is running successfully, and the promoter hasbeen engaged in other business like cement , RMCand bricks & blocks since long and therefore, thepromoters have already adequate technical knowledgefor the mfg. of such products.

CHAPTER– I

1 Prepared by: Dilbar Ali Mallick,9830522500 Blessing Engineering and Financial Consultant


INTRODUCTION

Kushal Bharat RMC Services LLP having its registered office at 16, Ganesh Chandra Avenue, GandhiHouse, 4th Floor, Kolkata – 700013, (W.B) was incorporated in 2011 with an objective to engage intothe manufacturing of Autoclaved Aerated Blocks, blocks & panels using fly ash as major raw materials. The company is promoted by Shri Naresh Kumar Agarwal & Shri Biman Roy. The promoter has beenengaged in multi business activities like cement, woven sacks, fly ash bricks & blocks since long years.

Management Profile:

The entire activity of the company is controlled & managed by overall supervision of top-levelmanagement team headed by Sri Naresh Kumar Agarwal backed by capable executives, assistants,supervisors and managerial personnel.

Sri Naresh Kumar Agarwal

1. Full Name : Sri Naresh Kumar Agarwal

2. Father’s Name : Late Chiranjee Lal Agarwal

3. Age : 52 yrs

4. Qualification : B. Com

5. Office Address :16, G.C. Avenue, 4th Floor, Kolkata – 700013, W.B.

6. Residential Address : 12, May Fair Road, Kolkata – 700019

7. PAN : ACNPA9268M

8. Net Worth : Rs. 2.65 crores

9. Experience:

He is the backbone of the company and he is having long experience for more than 15 yearsin various business activities i.e. manufacturing of Cement, Woven Sacks, Steel, Fly AshBricks & Concrete Block, RMC, Railway Engineering Products such as SEJ, Improved SEJ,Mechanized laundry business tie-up with Indian Railway and Real Estate and Hotel &Luxury. He is presently looking after to implement this AAC blocks /panels by regulardealing and interaction with vendors and Civil Engineer for factory shed.

Sri Biman Roy



1. Full Name : Sri Biman Roy

2. Father’s Name : Late Chandrakanta Roy

3. Age : 45 years

4. Office Address : 16, G.C. Avenue, 4th Floor, Kolkata – 700013, WB.

5. Experience : He possesses a long experience in various businessactivities and he is presently looking after the marketing, accounts and banking of the company.

CHAPTER-II

BRIEF OVERVIEW THE PROJECT

2.1. Product line of KBHPL:



(KBHPL) is proposing to set up Aerated Autoclaved Concrete (AAC) block manufacturing unit at

Mouza – Ruiya, J.L. No. 20, P.S. – Khardah, Dist.- North 24 Parganas, , West Bengal. This product is

used in building/ construction industry for residential, commercial as well as industrial purposes.

AAC Block is a lightweight, precast building material that simultaneously provides structure,

insulation, and fire- and mold-resistance. With a number of socio-economic benefits such as eco-

friendly for using waste material i.e. Fly Ash, reduction in soil consumption, lightweight, thermally

insulated, energy efficient, fire resistant, acoustic performance, easy workability, design flexibility,

earthquake resistant, high precision, cost effective and others, AAC products are finding rampant use in

construction and infrastructure industry. With a great aid in reducing pollution by using waste and

reducing soil consumption, the sector is getting good support from the Government. Recognizing its

numerous benefits, industry people have also started giving it an edge over conventional form of bricks

Raw material for the product is Lime, Cement, Fly Ash, Gypsum and Aluminium powder.

2.2. SCOPE OF TEV Study

Assessment of Promoters and senior management set-up

Marketing Set up

Demand-Supply Analysis – Present scenario and assessment of future market scenario

Assessment of Volume and Sales Realization and trends for domestic market o Marketing and Selling Arrangements

Technical Assessment Plant configuration

Manufacturing Process, Technology used by the Company and its evaluation in the context of present and emerging trends in the industry

Assessment of installed capacities

Forecast and estimate of future capacity utilization in the context of technology status and market assessment

Raw material requirement, sources and logistic issues

Evaluation of utility requirements, manpower availability

Financial Analysis

Operation and Financial Risk Assessment

Conclusions on Technical and Economic Viability of the Company’s operations

2.3. Viability of Project



We have studied the technical feasibility, Commercial and financial viability of the

project of M/s Kushal Bharat Hitech Private Limited, (KBHPL) on following

parameters –

2.4. Technical Viability Availability of raw material/other inputs

Processing technologies being used

Machinery and equipments installed at plants

Infrastructure facilities available (Land, Building other fixed assets and Utilities

2.5. Location of the project

The proposed project site location is at Mouza – Ruiya, J.L. No. 20, P.S. – Khardah, Dist.- North

24 Parganas, West Bengal. The area of the land is 56 khatta.

Our observations for site are as under:

Site Address : Mouza Ruiya, J.L. No. 20, P.S.- KhardahDist. – North 24 Parganas, West BengalBeside – Kalyani Express Way

-

The Company has purchased the land from several parties and the same land belongs to Industrial

Estate and the said documents are registered with Sub register authority, Kolkata. The company

has already obtained mutation of the said land from the concerned authority and shall get the same

converted to non-agricultural from the requisite authority upon completion of the formalities

shortly as the company has already applied for conversion of the land

It was informed by the company that considering the fact that the area is highly industrial and

many fly ash based industries are located there.

Following are the distinct advantages of the location:

The plant is located beside the Kalyani Exp. Way with all modern facilities like electricity, water



and railway siding and it is very near of Bandel Thermal Power Station.

It has got all the advantages of a developed industrial town with cosmopolitan culture including

infrastructural and educational facilities available locally. Consequently technical, commercial ,

skilled & unskilled workforce is available The main raw materials is fly ash and the sources are in

the vicinity of 20-30 Kms from the plant from Bandel Thermal Power station. The plant is on State

Highway (Kalyani Exp. way), facilitating transportation of raw materials & finished goods. Being

located in the industrial area, related raw material, reliable testing laboratories and technical

services are easily accessible.

The unit is located in an industrial area with proximity to roads (highways) and railway stations.

The details are as follows

Distance from approach road & National Highway (with names of roads & Highway),Railway station & airport:

Nearest Connecting National /State Kalyani Exp. Way 0.5 kms

Highway

Nearest railway station Khardah Railway 8 kms

Station

Nearest Thermal Power station Bandel 25 kms

2.6. About the Product

Product proposed to be produced is Autoclaved Aerated Concrete (AAC) Blocks using fly-ash as

the main feed stock material. Size, density and weight of AAC Bricks/blocks depends on the

demand from the customer ie. real estate developer & end use of the product i.e. the nature of

building or structure being erected. These blocks are substitutes for the conventionally used clay

bricks which are being traditionally used in the construction industry.

The market demand is generally of the following sizes of the products:

(Fig in mm)Sr. No Length Breadth Height01 00 230 200



02 600 200 20003 600 150 20004 600 125 20005 600 100 200

These bricks are light in weight having low density, provide insulation from heat & possess

important properties like fire - & acoustic resistance & have ecological green features.

Density of AAC varies from 550 to 700 Kgs/m3. Generally is about 600 Kgs/m3. Volume of a

normal cake is @ 3.02 meter3 taken as 3 m3 for calculation purpose.

Hence average weight of one AAC cake is 600 * 3.00 = 1800 Kgs.

They confirm to IS: 2185 standards. Codes for construction practice & testing methods are as

follows.

Applicable Indian StandardsIS 2185 (Part III) Specification for Concrete Masonry Unit (AAC

Blocks)

1S 6041 Code of practice for construction of AAC blockmasonry

IS 6441 (Part I, II , III & V) Methods of test for AAC products

Comparison of density of different types of bricks:-

Sr. No Type of Bricks Density Kg/m301 Concrete Bricks 240002 Clay Bricks 195003 Fly Ash Bricks 1700

Comparison of properties of AAC Blocks with Clay Bricks:-

Sr No Parameter Clay Bricks AAC Bricks

01 Size (L * H * T) mm 230*75*115 600*200*75 to 225

02 Size Precision (mm) +/- 5 to 15 +/- 1.5

03 Compression Strength 2.5 to 3.5 >3.5

(N/mm2) (IS:1077) (IS:2185)



04 Dry Density (Kg/m3) 1980 550 to 650

(dry from oven)

05 Fire Resistance 02 02 to 06

(No of hours)

06 Sound Insulation Index 50/230 mm thk 45 / 200 mm thk wall

db/ wall thk in mm wall

07 Thermal Conductivity 0.81 0.24

(w / Kg-m)

The main feeling material is fly-ash which is a waste produced by coal-based power plants. Disposal

of fly-ash is a great problem for the power plants to confirm with the strict pollution-control norms

& environmental friendly government policy.

Use of clay is discouraged now-a-days to protect environment. Use of fly -ash for the manufacture of

bricks serves twin purposes simultaneously i.e. disposal of abundant fly-ash available with the power

plants & saving of natural clay.

Hydrogen bubbles formed due to reaction between aluminium powder & concrete expands the

concrete volume by about five times of its original volume. These myriads of tiny non connecting air

bubbles give AAC bricks their diverse qualities and make them an excellent insulating material.

High pressure steam curing in autoclaves achieves a physically and chemically stable product, with

an average density being approximately one fifth of normal concrete.

These bricks have good heat - resistance due to multiple air cells & micro-apertures available inside it.

They are available in various shapes & sizes as per the construction requirements. They are used for all

climatic conditions, for external or internal walls, infill wall, framed structure, fire bricks walls etc.

Other Advantages:-

Sr. No Parameter Clay Bricks AAC Bricks01 Savingsin Steel Nil @ 15 %

Consumption02 Requirement of More due to Low due to flat & smooth

cement-mortar irregular surface surface & less joints& more joints

03 Breakages @ 10 to 12 % Negligible04 Speed of Construction Comparatively Faster due to bigger size,



slow light in weight and easy tocut in any size & shape

05 Labour Productivity Comparatively About double that oflow bricks

06 Quality of construction Variation Uniform & consistent07 Fitting & chasing All kinds All kinds possible

possible (As per IS:1905)08 Carpet Area Comparatively More due to thinner wall-

low matl09 Inventory Levels More in rainy Minimum since factories

season since are working all 12 monthskilns are closed hence can be available

any time10 Water consumption More in longer Low in wetting & curing.

curing duration. Hence low power & labourHence more cost.power & labourcost

11 Energy saving Nil @ 30 % in air-conditionedload both in heating &cooling

12 Maintenance Comparatively Lower due to betterhigher properties.

Cost -Savings by using AAC Bricks:-

1. One brick of size (600 X 200 X 100mm) is equivalent to 6 bricks hence it reduces ½ of joints

resulting in saving of mortar up-to 48%. In case of 150 mm or thicker AAC-brick masonry, the

mortar saving is even more due to avoidance of vertical joint in conventional brick masonry.

2. AAC brick is 1/3 times lighter than clay brick hence it reduce dead load of structure drastically

resulting in to saving of steel up-to 15% and concrete up-to 7%.

3. AAC bricks are cut on machine hence have accurate dimensions which results in thinner coat of

plaster as compared to clay bricks. It saves mortar in plaster to 30 to 35% and having advantage in

carpet area.

4. Cost -savings due to Faster Construction :-

One solid AAC brick (600 X 200mm) is equivalent in area to approximate 6 standard bricks (230

X 75mm), yet it is less than 1/3 in weight and also leads production of walling by approx 1.5 times

faster in case of partition wall. Improvement in labour productivity reduces labour cost.



5. Fine Finish:-

AAC bricks are factory finished with precise edges and shapes. It results in excellent finishing

surface, dimensional stability and consistency. Efflorescence is a big problem in clay bricks

which does not arise in AAC bricks.

6. Cost -Savings due to Minimum Wastage

Breakage in AAC bricks is negligible as compared to ordinary bricks (Approximate 10 to 12%) It

reduces wastage of the AAC bricks and increases the percentage utilization. If any breakage

occurs in the AAC bricks, it breaks into two or three pieces which can be utilised in masonry as

"brick bat".

7. Savings in Water-consumption

AAC bricks construction requires less water compared to traditional brick wall construction

during laying, curing and plastering activities. Less water requirement means less water &

electricity consumption, which leads to saving in cost of construction.

8. Green Product:-

AAC bricks are Green building material & is a walling material of a choice in LEED certified

buildings. It is a recyclable product, which reduce material use, utilize recycled product and avoid

toxic emissions during production therefore it is being recommended for all green buildings.

9. Storage

As availability of materials is not an issue in any season, hence over-storage is not required; hence

blockage of free working space is avoided.

2.7. Raw Material Procurement & Storage

As stated above, raw materials required for AAC Bricks/Blocks are as follows.

1. Fly Ash

2. Lime

3. Cement

4. Gypsum

5. Aluminium Powder

Density of AAC varies from 550 to 700 Kgs/m3. Generally it is about 600 Kgs/m3. Volume of a



normal cake is @ 3.02 meter3 taken as 3 m3 for calculation purpose. Hence average weight of

one AAC cake is 600 * 3.00 = 1800 Kgs.

Raw material contents in the cake are roughly as follows:

S. No. Raw Material % Quantity1. Fly Ash 68.95 1241.102. Lime 20.00 360.003. Cement 8.00 144.004. Gypsum 3.00 54.00

5. Alu. Powder 0.05 0.90Total 100 1800

Raw Material Consumption / Cost per item:-

Approximate Consumption & recipe of above raw materials per cubic meter of finished product

will be as follows:-

Sl. Qty Rate/MT No Material (in Kgs/M3) (in Rs.)

01 Fly-Ash 414 40002 Lime 120 475003 Cement 48 470004 Gypsum 18 400005 Alu. powder 0.42 280000Total 600.42

2.8. Availability of Raw

Materials:

1. Fly Ash: –

It is the main feed-stock whose content in the brick by weight is @ 69 %. It is a silica rich material

like fly ash, pond ash or sand. It is the inorganic mineral residue obtained after burning of

coal/lignite in the boilers. It is sourced from Thermal Power Plants. These plants use different

types of fuels to generate steam such as coal, steam, diesel etc. Most of these plants use country’s

vast coal reserves. While power generation from coal is increasing, generation of fly ash is also

increasing. Fly Ash policy of the government mandates 20% of Fly Ash generated by Thermal

Power plant is to be given free of cost to SME sector on priority basis. Thus, part of fly ash is

available free of cost only with freight to be incurred.



Rest of the fly ash is sold at cheap rate since disposal of fly-ash is a great problem for the power

plants. Improper storage of fly-ash creates environmental problems due to strict air-pollution

control norms.

Being a bulky material, freight of bringing fly-ash to the plant-site is a critical problem & is

many cases higher than the cost. Hence to ensure minimum freight, AAC blocks/bricks mfg

units are being set up in the vicinity of thermal power stations to ensure minimum freight.

List of some of the coal based Thermal Power plants in West Bengal are given below from

where the company can source fly ash.

Sr Name Operator Location DistrictNo

1 BakreshwarCoal Power WBPDC Suri BirbhumStation

2 Bandel Coal Power Station WBPDC Bandel Hooghly3 Budge Budge Coal power CESC Kolkata 24 Pargana

station South4 Durgapur Coal Power Station Durgapur Durgapur Burdwan

Projects Ltd5 Kolaghat Coal Power Station WBPDC Kolaghat East

Midnapur6 Mejia Coal Power Station DVC Durlavpur7 Titagarh Coal Power Station CESC Titagarh 24

ParganaNorth

8 New Cossipore Coal Power CESC Kolkata KolkataStation

9 Durgapur DVC Coal Power DVC Durgapur BurdwanStation

10 Durgapur Steel Works coal NSPCL Durgapur BurdwanPower station

11 Durgapur Projects Limited DPL Durgapur Burdwanpower station

Out of above, following plants at Sr No. 2 is very closed to the proposed Plant.

Prevailing freight being charged by local truck operators is reported @ Rs 500/per MT for distance

up to 15 Kms.



Alternatively, sand can also be used to manufacture AAC blocks. But an additional ball mill will be

required to grind the sand to fine powder. However with the abundant availability of fly-ash, sand

need not be used with extra cost of ball mill. As stated above, it consumption will be @ 414

Kgs/meter3 of finished product.

2. Lime

Active lime in powdered form (with minimum 40% CaO content) is used to give aeration to the

product. Initially, the company intends to buy fine lime powder though costlier than lumps from the

vendor. If lumps are purchased, they will have to be crushed into powder form means increase in cost

of machinery which is avoided at initial stage. Lime is stored in silos fabricated from mild steel (MS)

or built using brick and mortar. It’s consumption will be 120 Kgs/meter3 of finished product. It will

be procured at the rate of Rs 4750/MT. It is available in the state of Rajasthan and supplied pan India

from there.

3. Cement

Cement to be used will be 53-grade Ordinary Portland Cement (OPC). It is required as binding agent in

AAC blocks. It provides strength, improved consistent quality (as compared to other binding material)

and is available locally through nationwide retail network of cement Companies. It’s consumption will

be 48 Kgs/meter3 of finished product. It will be procured at the rate of Rs 4700/MT. Good quality 53-

grade Ordinary Portland Cement (OPC) shall be procured from the sister concern’s Unit at Purulia

namely Bharat Hitech Cements Pvt. Ltd.

4. Gypsum

Gypsum is a Hydrated Calcium Sulphate (CaSo4 2H2O). This too is an industrial waste. This is

available as an industrial byproduct of fertilizer plant & is available nearby. It is responsible to give

long term strength to the AAC blocks. It’s consumption will be 18 Kgs/meter3 of finished product. It

will be procured at the rate of Rs 3750/MT. It is available in nearby areas in Halida.

5. Aluminium Powder

Finely ground Aluminium powder is used in very small quantity to react with active lime & silica in

base material to create aeration & swell the cake making it light by weight. It is easily available in the

market. Since it is required in very small quantity, it is usually weighed manually and added to the

mixing unit. Its consumption will be little at 0.42 Kgs/meter3 of finished product. It will be procured

at the rate of Rs 2.80 lacs/MT.



Raw Material Storage:-

Fly-ash is the main bulky material in powder form. Also cement & lime are in powder form. For storing

fly-ash, cement & lime, silos will be provided. These silos will be either brick-built or fabricated from

mild -steel plates. They will be required to be fitted with accessories like aeration-system, de-dusting-

filters, pressure-gauges, audible-alarm, pressure-safety-valves, control panels etc.

Inventory Levels assumed in working capital assessment: -

Working capital requirement is arrived considering following inventory levels

1. Raw Materials - 10 days

2. Work In Process - 1 day

2. Finished Goods - 7 days

Considering installed capacity as 184 m3/day, raw material storage requirements will be

roughly as follows assuming following rates of consumption.

(Rs. in lacs)Sl.No.

Item I II III

Capacity Utilisation 60% 70% 80% Estimation of Raw Material Cost Fly Ash 98.47 114.88 131.29 Lime 271.35 316.57 361.79 Cement 201.37 234.93 268.49 Gypsum 42.84 49.98 57.13 Aluminium Powder 49.98 58.32 66.65 Total Cost per Annum (Rs in Lacs) 621.17 724.69 828.22

Total Raw Material Cost per Annum (Rs in Lacs) 621.17 724.69 828.22

Approximate Consumption & recipe of above raw materials per cubic meter of finished product:-

To produce 1 m3 AAC Block : Required of RM

1. Fly Ash @68.95% i.e. Rate: Rs.400/MT

1. Lime @16% Rate: Rs.4750.00

2. Cement @12% Rate: Rs. 4700.00

3. Gypsum@ 3% Rate: Rs.4000

4. Aluminium [email protected]% Rate: Rs. 280000.00



CHAPTER-III

Plant Location



The proposed AAC Blocks & Panels unit is situated at Mouza –Ruiya, J.L. No. -20, Block – Barrackpore II, , Dist. –North 24 Parganas beside Kalyani Exp. way which very closed to Kolkata .

***Locational Map

3.1.Connectivity :-

Road Connectivity

Plot is located at @ 0-0.5 KM from Kalyani Express way connected with North

Bengal.

Rail Connectivity - Nearest Railway station - Khardah Station - 5 kms

Air connectivity - Nearest Airport - Kolkata Airport located at @ 20 Kms from the

project site.


PROPOSED FACTORY


3.2. Land Agreement Details:-

There are number of sale deeds registered with the appropriate authority. We have verified all of them.

As mentioned above, the area of the plot is 56 khatta. The sale deed verified by us provides the following information:

S. No. Deed No. Dated

1.

2.

Total area being 56 khatta.

The details of the Purchase Documents are as follows –

Sl. No Particulars Transaction01 Type of Deed Sale Deed02 Plot Address Mouza – Ruiya, Khardah, North 24 Parganas

State – West Bengal03 Description of land Sali/ Bansjhar

04 Type of land Non –Agriculture since last 35 years05 Area of Plot 56 khatta06 Seller Several Parties07 Purchaser Kushal Bharat RMC Services LLP08 Sub-Registrar Office Kolkata sub Registry

where document isregistered

09 Consideration of the Cheque deal

10 Stamp Duty and other Rs. …… Lacscharges



CHAPTER-IV

Project Cost

4.1. Site Development Expenses

Cleaning, Leveling & Development of Land.

It will be raised to a height of 3-4 ft. from the existing level.

Site Development expenses estimates have been calculated as per the prevailing market rate.

The Details of land and its site development are as under:-PARTICULARS AMOUNT



Land : (Free hold land measuirng at 56 khata) 280.00 -

280.00

15.00

Land Development Land Filling 5.00 Boundry Wall 10.00 Total Cost of Land Development Total Cost of Land & Land Development 295.00

4.2. Building:-

Proposed building constructions primarily include main factory shed, office block, labour

quarter, Security Guard room, Pouring mixture tower, boiler and silo foundation, stock yard,

compound wall, internal road and Weigh Bridge.

Company proposes to construct the factory building at a cost of Rs.192.10 Lacs as briefed

hereunder:


Sl.No.

Description of Items Unit Qty Rate(Rs.)

Amount(Rs. inlacs)

1 Work Shed with steel Structure with Tabular Struss with Asbestos Sheet Roofing Concrete on Floor including finishing shed, Electric Room & Security Room ( RCC type)

sq. ft. 15000.00 1,200.00

180.00

2 Constructing of RM Room including stores

sq. ft. 500.00 800.00

4.00

3 Under Ground Water Reservoir 3.00

4 Security Room 200.00 800.00

1.60

5 Labour Hut sq. ft. 700.00 500.00

3.50

GRAND TOTAL 192.10


4.3. Plant and Machinery

Sl.No.

Description Qty. Rate Amount Vendor/Suppliers

A RAW MATERIALS & MIXINGSECTION

1Lime Silo, 20M3 1

55.66

KM ASSOCIATES, 303,Labh Residency - II,

Gorwa, Vadodara, Gujrat2 Cement Silo, 20m3 1 --- DO------

3Silo Gate Valve, Heavy Duty Gate Valve 2

--- DO------

4 Dust Collector, Automatic Dedusting 2 --- DO------

5Raw Material Feeding System, Automatic RM Feeding System 2

--- DO------

6Screw Conveyor Set, 10m Long, Lump Breaker,Italy Make 2

--- DO------

7Scale for Powders, Weighing scale Powder & Liquid. 2

--- DO------

8

Automatic Pnumatic valve Assembly, 200 mm size with actuator, 100 mm size with actuator,25 mm size with actuator, 1

--- DO------

9Main Mixer, Capacity 1.35 m3, 18.5 KW with vortex Breaker, High rpm mixing. 1

--- DO------

10

Mixing Panel, Fully automatic with PLC for highaccuracy.HMI Based, with autorecipe calculator 1

--- DO------

11Compressor with Access, 35-50 cfm,Reciprocating Type.With all accessories 1

--- DO------

12Rail System, Complete Assembly with raft 1 set

--- DO------

13Demoulding Machine, HydrulicDemoulding M/C 1

--- DO------

B Cutting & Slurry System

1

Cutting Machine, Automatic Cutting Machine with variable speed arrangementwith VFD, with varied oscillationspeed, Seimens/ABB Drive

2

41.87

--- DO------

2Back Tilting System for Buffer Removal, Tilting Table ,Hydrulic Operated

1 --- DO------

3 Fly Ash/Pond Ash Slurry Batcher, Capacity 8.44m3, with 35% shock

2 --- DO------



loading, 7.5 HP

4Scrap Tank Agitating System, Capacity 3.18 m3, with 35% shockloading, 5 HP

1 --- DO------

5Cutter Pit Agitating System, Capacity 3.18 m3, with 35% shockloading, 5 HP

1 --- DO------

6

Slurry Pump, Horizontal Slurry pumpwithabbrasion resistant housing and impeller.

4

--- DO------

7

Slurry Piping system, Total slurry piping system with all fittings and auto valves and accessories

1 Set.

--- DO------

8Winch System & Ferry trolley, Winches with Ferry trolleys

3Sets

--- DO------

--- DO------

C Autoclaving Section --- DO------

--- DO------

1

Autoclaves with Automatic Panel, ASME Autoclaves, 1.65 Dia,21.5 m Lwith automatic steam control valvearrangement for precise cyclecontrol, PLC Based Cycle Panel

4 Set

158.24

--- DO------

2

Boiler House complete, 1.5 TPH Boilerwith complete arrangement, withauto loading and unloading

1 Set.

--- DO------

3

IBR Piping & Headers, Complete piping system with Valvesand fittings with headers.

1 Set. --- DO------

4Insulation , Autoclave,Boiler& PipingInsulation

5 Set. --- DO------

DMoulds& Plate Trolley&

Electricals

1 Moulds, Insulated with net-1.15 m3 20 58.28

--- DO------

2Plate with Trolley Base, Plate with trolley base 84

--- DO------

3

Electric Panels, ABB/L&T/Schneidermake components,Main PCC & MCC& Operating Panels. 6

--- DO------

4Electric Cables with trays, Total cabling system with all accessories 1 Set.

--- DO------

5 Sensor Cable & Pnuematic Pipings 1 Set. --- DO------



for Automation

Sub -Total 314.

05

Erection& Installation Cost

28.

40

Total 342.45

4.5. Installed Capacity Calculation:

1 Production per autoclave : Rated Capacity (in m3/day)

46

2 Number of autoclave 43 Total production per day 1844 Rejection per day 2% 3.685 Effective production per day 180.326 Production per Day in M3 180.327 No. of Days Operation per Annum 330.08 Production per Annum in M3 59505.6

Say 59505.60

4.6. Manufacturing Process

Manufacturing Process is explained below in brief

Raw material preparationII

Dosing & MixingII

Casting, Pre-cuttingII

Wire cuttingII

Curing in AutoclaveII

Unloading, Storage & Dispatch

Schematic diagram of the manufacturing process of AAC blocks & panels :-



: Finished Products: AAC Blocks Before storing of AAC Blocks/Panels



Project Implementation:-

1. Land Acquisition :Already Completed2. Land Development & boundary wall : Already Completed3. Plant & Machinery Order placed : July 20174. Factory shed Construction : July 2017 – October 20175. Plant & Machinery supplied : November 20176. Eriction of Plant & Machinery: November 2017 – February 20187. Trial run operation : March 20188. Commencement of commercial production: April 2018

CHAPTER-V

Project Utilities

5. Utilities

5.1. Power

Company will draw power at 11 kV supply voltage from nearby Sub-Station (@ 0.5 kms

from site).Detailed Statement of Power Assessment prepared by Electrical Contractor &

Machinery-Supplier is awaited.

Company may have to pay fees for conducting survey for the path by which the line would bedrawn to the proposed site @ 0.50 km away from the sub-station. & bear the expenses for laying of line from sub-station to the plant-site.

Company has made provision for one DG set of 150 KVA for emergency.

5.2.Water

Company proposes to dig its own bore well with depth of @700 ft.

No of bore wells - 2

Outflow of water from the bore-well in litres/min is not known at the moment

since bore wells are not yet dug.

Water requirement for the processing i.e. manufacturing is to be obtained from the

machinery-supplier.

Water- Analysis Report of the bore-water will be obtained only after bore-wells



are dug.

Water-Softening Plant, DM Plant will be installed by the machinery-supplier.

5.3. Steam

For steam-curing in auto-claves, steam will be required. Steam will be produced by the

boiler. Boiler will be installed by the machinery-supplier. Quantity of steam output

required will be 6 tons/hour for curing in autoclave. Capacity of the boiler to be

procured will be of 1.5 TPH.

CHAPTER-VI

Marketing

Marketing feasibility:-

6.1. Background

Autoclaved Aerated Concrete (AAC) block is a newly-adopted green building material in India which

is used as a substitute of the conventional red clay bricks in residential, commercial and industrial

construction activities. Globally, AAC was originally invented in early 1923 in Sweden, and has been

around for over 90 years. Although AAC was invented to overcome the shortage of timber in

Sweden, the product has found global acceptance. Since then, AAC has been used extensively in

Europe, Asia and USA.

AAC block is a light weight precast building material that provides both construction economy and

speed. It is also an environment friendly product, as it is manufactured using 60-65% of fly ash (by

weight), an unavoidable waste from coal/lignite-based thermal power plants. Due to its many desirable

attributes, AAC block is gaining popularity in India now-a-days as a replacement of the traditional fired

clay brick.

6.2. Industry structure and development

Indian construction industry is one of the most important sectors of the economy as it stimulates

building infrastructure and creates growth opportunities for other sectors in the economy. The

construction sector contributes around 8% in GDP and registered an annual growth of 4.8% during

FY15. (Source: MoSPI) The building materials sector is a key constituent of the construction industry.

Economic growth and demand for building materials usually moves in tandem. Driven by recent growth



in infrastructure and construction activities, the building material sector has recorded considerable

growth over the last few years. Moreover, India’s improving economic growth, expanding population

along with rapid increase in per capita income, industrialisation and urbanisation signals good growth

prospects for this sector.

6.3. Construction Industry in India

Today, India is the second fastest growing economy in the world. The Indian construction industry is an

integral part of the economy and a conduit for a substantial part of its development investment, is

poised for growth on account of industrialization, urbanization, economic development and people's

rising expectations for improved quality of living.

In India, construction is the second largest economic activity after agriculture. Construction accounts

for nearly 65 per cent of the total investment in infrastructure and is expected to be the biggest

beneficiary of the surge in infrastructure investment over the next five years. Investment in construction

accounts for nearly 11 per cent ofIndia’s Gross Domestic Product (GDP). RS 20,000 billion is likely to

be invested in the infrastructure sector over the next 10 years - in power, roads, bridges, city

infrastructure, ports, airports, telecommunications, which would provide a huge boost to the

construction industry as a whole.

With such bullish prospects in infrastructure, affiliated industries such as cement are on a high. Cement

consumption, for the first time, is set to exceed the 150-million tonne mark. Reflecting the demand for

the commodity, capacity utilisation rose to over 100 per cent to touch 102 per cent in January 2007 with

despatches touching 14.10 million tonnes as against the production of 14 million tonnes. As

opportunities in the sector continue to come to the fore, foreign direct investment has been moving

upwards. The real estate and construction sectors received FDI of €216.53 million in the first half of the

current fiscal year.

Real Estate

• Residential (Housing & Development)

• Industrial (Industrial Parks, Factories, Plants, etc.)

• Corporate (Office, Research Centres)

• Commercial (Retail: Malls, Shops, Showrooms; Hotels; etc. )

Infrastructure

• Roads



• Railways

• Urban infrastructure (improved housing, water supply and sanitation, schools, universities, health

and security, etc.)

• Ports

• Airports

• Power

6.4. Indian Real Estate Sector

Indian real estate sector has witnessed a revolution, driven by the booming economy, favourable

demographics and liberalised foreign direct investment (FDI) regime. Growing at a scorching 30 per

cent, it has emerged as one of the most appealing investment areas for domestic as well as foreign

investors.

The second largest employing sector in India (including construction and facilities management), real

estate is linked to about 250 ancillary industries like cement, brick and steel through backward and

forward linkages. Consequently, a unit increase in expenditure in this sector has a multiplier effect

and the capacity to generate income as high as five times.

Real Estate Scenario in Eastern India

The core of the Eastern Indian region, the nation's heartland, is formed by mainly three areas — the

southern part of West Bengal, the area of the Bhiar and Jharkhand

. The major cities of Eastern l India are Kolkatta, Ranchi , Patana which are ringed by highly developed

cities like , Delhi in the north and Mumbai in west

With growing populations, rising incomes and a greater shift towards nuclear families and urbanization,

Eastern India’s residential property sector provides significant opportunities for growth and

development.

One of the new favorite spots for investment has become the region of Eastern India which includes the

two lion states of West Bengal and Bihar. This region is Eastern to agriculture and industry and thus has

become a spot on the hit list for estate investment.

Followed by a steady rise in industry, the India has also been a constant and thriving site of tourism in

the world. The states of West Bengal and Bihar.are centers of culture and art, thereby attracting throngs



of tourists to their priced cities of Kolkata. This has led to a high demand between the states and the real

estate market, whereby, the constant need of accommodating the tourist populace is emphasized. This

has given rise to a lot of investments dealing with property in the tourism sector, making real estate the

most intrinsic and inseparable part of the tourism industry. Further, the growing population in the

metropolitan cities within these states has led to a high demand for residential properties.

The real estate market has concentrated all its bounty in the industrial arena of India. The state of West

Bengal which boasts of the best infrastructure in the country has been overlooked by the Indian

Government until recently. But now, the government has built an entire industrial network with the

states aligning different industries from IT to biotechnology to food processing to medicine. This

hereby has given a major impetus for the real estate developers of the country to invest in upcoming

industrial, commercial as well residential properties

6.5. All-round Development

Rising income levels of a growing middle class along with increase in nuclear families, low interest

rates, modern attitudes to home ownership (the average age of a new homeowner in 2006 was 32

years compared with 45 years a decade ago) and a change of attitude amongst the young working

population from that of 'save and buy' to 'buy and repay' have all combined to boost housing demand.

6.6. AAC block: an emerging green building material in India

AAC block, which is also known as autoclaved cellular concrete or autoclaved lightweight concrete

or aerated brick, is an eco-friendly building material used in construction activities. AAC block

offers a unique combination of strength, low weight, cost-effectiveness and durability compared

with a clay brick. It is a steam-cured mixture of fly ash, cement, lime and aeration agent. Other

AAC products include wall panels, floor and roof panels and lintels.

Although AAC block has been in use since long globally, the AAC block is an emerging product

and a growing industry in India. Currently, AAC products are manufactured in more than 40

countries and are used in more than 70 countries. As of 2014, there are more than 3,000 AAC

production facilities globally with an estimated production capacity of 450 million cubic meters per

annum (CMPA)

(Source: www.iaacpa.org). Xella International GmbH is world’s largest AAC manufacturer, while

Biltech Building Elements Ltd. (rated ‘CARE BBB’) is India’s largest AAC manufacturer. More

AAC block plants are being set up across India as awareness about AAC block is growing.



Salient features of AAC block: Leading to increasing acceptance of the product

The following salient features of AAC block make it user-friendly product over other construction materials:

Environment � Makes productive use of unavoidable waste - fly ash.

Friendly � Through the use of fly ash, AAC helps creation of a

sustainable environment by reducing CO2 emissions,

agricultural soil erosion and water pollution.

� Non-polluting manufacturing process does not exude

gases, the only by-product is steam.

Light weight � Three to four times lighter than traditional clay bricks,

therefore, easier and cheaper to transport.� Lighter block makes construction easier and faster.

Cost saving � Being light weight, AAC reduces the dead weight of the

building, resulting in to reduction in steel and cement on

foundation structure work. Also allows construction of

taller buildings.

� AAC’s light weight saves on labour cost.

� Being bigger in size than clay brick, AAC wall construction

involves less joints; thus, overall savings on mortar work.

� Automatic manufacturing process gives AAC a

dimensional accuracy and smooth surfaces, eliminating

need of three-coat plaster walls and allow for a very thin

final coat.

Energy Efficient � Energy consumption for producing AAC is less compared

with production of other building materials.

� Tiny air pores and thermal mass of block provide thermal

insulation, thus, reducing heating and air conditioning

costs of a building.

Easy workability � Available in custom sizes.

� Block can be easily cut or drilled to fit individual

requirements. Accurate cutting minimizes the generation



of solid waste during use.

Others � High strength, less breakage and less wastage.

� Fire resistant.

� Superior sound absorption due to porous structure of block.

� Pest and moisture resistant.

Use of AAC block in construction activities offers interesting proposition for various segments of

the society. For a project developer, an AAC block means faster construction along with cost

saving; for an environmentally conscious peoples, it means eco-friendly product and for those who

occupy buildings built with AAC block, it means better safety and lower energy costs for cooling

or heating.

A quick comparison between AAC block and clay brick:-

Parameter AAC Block Clay Brick

Production State-of-the-art production Unhealthy working conditions

facility facility due to emission of toxic gases

Production cost

beak-up

Sector and Organised sector with statutory Unorganised sector with

labour labour laws. rampant use of child labour.

Soil Zero soil consumption. Primary One clay brick consumes more

consumption raw material for AAC block is fly than three kgs of top soil

ash which is industrial waste

generated by coal/lignite-based



thermal power plants (TPP).

Fuel One square feet with AAC block One square feet with clay brick

consumption will consume 1 kg of coal. will consume 8 kg of coal.

and CO2 Lower greenhouse gas Higher greenhouse gas

emission emission. emission.

Size Available in custom sizes to fit Available in fixed size.

individual requirements.

Density 550-700 kg per cubic meter Around 1,800 kg per cubic

meter

Availability Available throughout the year. Since the drying and firing is

done in open, the brick cannot

be manufactured in rainy

season; hence, it is mostly

seasonal and operating for

around 8 months in a year.

Tax Contributes to government Clay brick is non-excisable

contribution to taxes in form of central excise product. However, it

exchequer and VAT. contributes in form of VAT and

royalty on earth mining to the

state government.

Selling price Around Rs.2,350/cubic meter Around Rs.2,090/cubic meter

during April 2015 (in and during April 2015 (in and

around Ahmedabad market) around Ahmedabad market;

considering 550 pieces of clay

bricks as one cubic meter).

All the comparison parameters except selling price are in favour of AAC block which has led to

gradual increase in the acceptance of AAC block in the Indian construction sector. Further, although

the clay brick is comparatively cheaper, AAC block allows construction with speed and economy

considering the benefits of natural lightweight and savings on foundation structure work, mortar



work, labour and energy consumption. Furthermore, as the non-excisable products are likely to be

costlier after implementation of Goods and Service Tax Act, the selling price of AAC block would

become more competitive. Further, the issues attached with the key cost components of clay brick

(shortage of labour and increase in fuel cost) and cost-competitiveness of AAC block are likely to

shape the future growth of brick-making industry in India.

Fly ash: changing status from hazardous industrial waste to useful and saleable commodity

Fly ash, the major raw material for AAC block, is the waste of TPP. Coal/lignite-based

thermal power generation has been the back bone of power capacity addition in India. Indian coal is

of low grade with ash content of 30-45% in comparison with imported coal which has low ash

content of 10-15%. Large quantity of fly ash is thus being generated at thermal power stations in

country, which not only requires large area of precious land for its disposal but is also one of the

sources of pollution of both air and water. Ash needs to be converted into ash-based products and

utilised so that ash does not mix in air; it does not get washed away with surface water flow and also

does not get leached to cause ground water pollution.

To address the above concerns and reduce the requirement of land for disposal of fly ash in ash ponds,

Ministry of Environment and Forest (MoEF) has issued various notifications on fly ash utilisation with

an aim to achieve 100% utilisation in phased manner. There have been concerted efforts by the

government on development of new technologies for gainful utilisation and safe management of fly ash.

AAC block manufacturing has emerged as one of the best applications of fly ash. As a result, fly ash

earlier considered to be hazardous industrial waste material, has now acquired the status of useful and

saleable commodity.

Fly ash generation and utilisation: AAC block won’t allow the fly ash to fly away

As on March 31, 2014, there were 143 TPPs with installed capacity of 133,381 megawatt (MW) power

generation in India. During FY14, TPP consumed 524 million tons (MT) of coal and generated 173 MT

of fly ash with average ash content of 33.02%. Management of fly ash is a challenging task in view of

large quantity of fly ash being generated at these TPPs. However, constant efforts from the government

have increased the fly ash utilisation from 6.64 MT in 1996-97 (nearly 10% of total fly ash generated)

to 99.96 MT in 2013-14 (58% of total fly ash generated) and gradually bridging the gap between

generation and utilisation. Despite increased utilisation, ample fly ash is available and also expected to

be generated in large quantities going forward which would assure the uninterrupted supply of it for the

manufacturing of AAC block.

Source: Central Electricity Authority

Other modes of fly ash utilisation include reclamation of low lying area, mine filling, roads and



agriculture apart from rising of ash dyke.

6.7. Demand-supply scenario of AAC block

AAC block is a relatively new phenomenon in the Indian construction industry; however, it has

started gaining popularity as a replacement of the traditional clay brick due to many desirable

attributes. Although first AAC block manufacturing plant in India was set up in the early 1970s by

Siporex India Pvt. Ltd. at Pune, it is only over past few years that the manufacturing and usage of

AAC block has grown significantly.

As on March 31, 2010, there were around five AAC block manufacturing plants with installed capacity

of around one million CMPA in India. However, eco-friendly nature along with the unique properties

attached to the product has led to gradual increase in acceptance of the product in India. As on March

31, 2015, it is estimated that there are more than 70 AAC block manufacturing plants in India with total

installed capacity of around 11 million CMPA and it is increasing gradually as the awareness about

salient features and cost competitiveness of AAC block increases in the market. The AAC block

manufacturing industry has changed many folds over past five years.

Despite significant growth in manufacturing capacities of AAC block over past few years, the market

share of AAC block is miniscule compared with red clay bricks. The AAC block industry is

estimated to be around Rs.1,500 crore for FY15 which translates to just around 2%-3% of total brick

industry. Hence, there is huge potential for AAC block manufacturing industry to grow further over

the medium to long term. Further, the fly ash being the key raw material is available in plenty at very

minimal costs (only transportation charges), which assures uninterrupted manufacturing of AAC

block and encourages fresh capacity addition in future.

Increasing competition resulting into pressure on realizations

There has been substantial addition of manufacturing capacities over past 2-3 years considering thesalient features and demand potential of the product going forward. AAC block manufacturing is alsoa low entry barrier business as an average capacity.



of 100,000 CMPA requires a tentative investment of around Rs.20 crore for Chinese technology plant

and machinery leading to many small and regional players mushrooming in a short span of time. Hence,

the competition in AAC market has intensified over the period which has also resulted into price war in

the market. There has been continuous decline in the price of AAC block over past 2-3 years as shown

in the chart; which also led to sharp drop in the operating profitability of AAC block manufacturers

over the period. However, here it may be noted that continuous decline in sales price of AAC block has

also helped to narrow down the gap with the sales price of cheaper clay brick which in turn has also led

to increasing acceptance of the product.

The other risks related to the AAC block industry is logistic intensiveness of the product which forces

the manufacturers to operate with three-four manufacturing plants at different locations to cater the

different geographies and increase the market share. Moreover, the plant needs to be located in the

vicinity of the TPP for uninterrupted supply of key raw material - fly ash at low cost (transportation

costs). Furthermore, real estate construction activities is one of the major consumers of AAC block

which exposes the manufacturer to the risks and cyclicality associated to the sector which is also

currently passing through a sluggish market scenario.

AAC block also faces stiff competition from relatively cheaper clay brick which has been in use since

many decades and has established presence with wider reach in

the construction activities. Here, it may be noted that as the clay brick units depend on soil as major raw

material, they requires lease from the Mines Department to mine soil. During FY14, the value of

production of brick-earth was estimated at nearly Rs.2,729 crore, ie, 5.20% of the total value of

production of minor minerals in India, which increased by nearly 13% over FY13. (Source: Ministry of

Mines). Hence, as the promotion of AAC block would be at a cost of brick-earth mining revenue for the

government; albeit AAC manufacturing earns excise revenue, it would be crucial to see the stance and

support of the government for transformation of the traditional brick industry.

Financial performance of AAC block manufacturers

With increasing acceptance of the product in Indian construction activities, the AAC block

manufacturers registered continuous growth in total operating income (TOI) over past five years.

However, on the contrary, profitability has shown declining trend due to significant increase in

installed capacities of AAC block in short span of time together with the strong competition from

cheaper clay bricks.



Source: Company.

These are financial aggregates of top three AAC manufactures of India who are solely engaged into AAC block business and have operational track record of more than five years.

On the back of increased competition together with the sluggish demand scenario in real estate sector

over past one year, the profitability is estimated to have declined further during FY15.

Rating Dispersion

Out of the sample of 42 rated entities which are solely engaged in AAC block business; only three

entities are in the investment grade rating category being the top AAC block manufacturers of India

with operational track record of more than five years, whereas the remaining entities are in the non-

investment grade rating category mainly on account of either being project phase entities or have short

operational track record with small scale of operations.

The way forward

The demand for building materials is mainly driven by GDP growth. The growth in



India’s economy, population and urbanisation has resulted in an increasing demand for residential,

commercial and industrial construction which in turn has led to consistent growth in building material

industry. Environment conservation has also become a key focus simultaneously as clay brick

manufacturing is a source of environment pollution. Growing emphasis on environment sustainability

is thus expected to spur the demand for AAC block. Further, the government's continued support,

focus and encouragement for using green building products is expected to give an additional impetus

to the growth of the evolving AAC block industry.

There is a huge demand potential for AAC block considering eco-friendly and cost-effective natured

substitute product, increasing price parity against the conventional clay brick and its miniscule

market share in overall brick industry. Furthermore, with the increasing awareness and acceptance for

usage of green building products amongst developers and consumers coupled with the regulatory

restrictions, non-availability of clay bricks in certain markets and anticipated growth in the real estate

sector enhanced by Government of India’s ‘Housing for All by 2022’ and ‘Smart City’ mission, the

market for AAC block is expected to exhibit strong growth going forward.

The plant is strategically located in Barrackpore - Howrah area and this plant is reported to be

the first plant coming up in this region. The company proposed to sell it finished products in

Kolkata, Newtown, North and South 24 Parganas and Howrah.

, The distance of the said areas from the site is mentioned here-in-below:

Kolkata 20 Kms

Newtown 25 KmNorth & South 24 Pgs 10-15 Kms

Howrah 35 KM

The company presently is focusing in Kolkata as its primary market. However is should also be

noted that Newtown is already declared as Smart City under the Smart City Scheme which shall

foresee immense infrastructural development, affordable housing development etc.

5.8. Marketing & Selling Arrangements

The company plans to undertake the following activity to spread knowledge about the product:

1. Advertisements in magazines and other real estate related journals

2. TV commercials to increase product knowledge

3. Networking with general building contractors in the state of West Bengal



4. Website

5. Radio Ads

6. Conferences with Builders, Architects, Contractors and cement dealers in West Bengal.

7. Hoarding ads.

CHAPTER-VII

Financial Viability

7.1. Financial viability:-



The technical feasibility and commercial viability of the project under reference is already established.

We shall now discuss the financial viability of the proposed project.

We have taken into consideration following points while judging the financial viability of the project:

Cost of Project & Means of Finance

Financial Projections

Financial Assumption for Project

Key components for Financial Appraisal: o

DSCR Calculation

o Internal Rate of Return

o Break Even Point Analysis

o Working capital Assessment for the for the Company o Payback

Period

o Sensitivity Analysis

o Other Financial indicators

7.2.Cost of Project and Means of Finance

Cost of the project envisaged is Rs.11.09 crores. The management proposes to raise Rs. 6.87crores as equity contribution, Rs.4.22 crores as a term loan from financing bankers. Details ofcost of project, means of finance and our observations are as under:

(Rs. in lacs)

Sl.No.

Item Amount

1 Land & Land Development 407.002 Plant Shed & Other Civil Work 192.103 Plant & Machinery 342.454 Electrical Installation 35.005 Miscellaneous Fixed Assets 19.06 Total Hard Cost 995.616 Contingency Provision for Cost Escalation 9.917 Preliminary & Pre-operative Expenses 59.328 Margin for Working Capital 44.38 Total Soft Cost 113.62 Total 1,109.00

MEANS OF FINANCE

(Rs. in lacs)



Sl.No. Item Amount1 Term Loan 422.00

2 Promoters' Contribution 687.00

3 Total 1,109.00

4 Debt Equity Ratio 0.61

5 Promoters Contribution to Project Cost 61.95%

6 Fixed Assets Coverage Ratio 2.38

7.3. Risk Analysis & Mitigation Measures

The risk analysis, allocation and mitigation specific to the project are shown in the following

table –

Key Risks Risk Proposed Mitigation of RiskCarrier

Experience KBRSLLP The promoters of the project are experienced in the sectors

& Capabilitylike fly ash bricks and blocks by their sister concern and others manufacturing business like cement, woven sacks, real estate etc. Considering their experience in various businesses and their capacity to generate profit on their existing business and researchmade on the proposed project, the risk pertaining toexperience & capability appears low.

Time KBRSLLP The promoter group is experienced in the field of variousOverrun manufacturing businesses which were set up over the

years.� Land acquisition is already done and mutation of land is

already completed.� Land development is in process & boundary wall is being

erected.� Civil contractor is under negotiation & shall be finalized by

the end of this month.� Suppliers of key Plant & Machineries have already been

finalized.The COD is assumed at 1st April 2018 i.e. 9 monthsfrom Julyl 2017 and we presume that adequate time hasbeen provided for the construction and the completion ofthe project. Hence, Time Over Run is not envisaged.

Cost KBRSLLP The price of the plant and machinery has been arrivedOverrun based on the quotations. However, to avoid further



escalation contingencies @ 2.5% has been consideringimplementation period of 12 months.Hence, Cost Over Run is not envisaged

Statutory KBRSLLP As mentioned above, mutation of land is already completed.Approvals Similarly, the company has applied to other authorities for

various approvals.

Hence, attaining the necessary approvals within stipulatedtime will not be a problem.

Raw Material KBRSLLP The Company proposes to procure the required quantity ofAvailability raw materials from Bandel Thermal Power Station which is

approximately 20 km from the project site.

As per the norms after the site development and buildingwork is complete, the officials from the power plant will visitthe site and then enter into a definitive agreement ofsupplying the fly ash. Also as per the reference of theSupreme Court, the power plants are compulsorilymandated to give atleast 20% of the fly ash disposal forfree to the brick manufacturers.On achievement of the guidelines, for procurement of RawMaterial, this will ensure no shortage of raw material to theproposed Company.

Pricing Level KBRSLLP The Selling Price of AAC Block per CUM is lower than the& market price. This is a strategy of the company to enter intoSustainabilit the market and to sell their products at a long distancey where transportation cost is involved comparatively high.

Hence, the Company has a scope to increase their sellingprice if there is any direct increment in cost.

Competition KBRSLLP The Company may face competition from Biltech BuildingRisk Elements Limited at Budge Budge, Kolkata. Other

competitors will be “Koncrate”-UAL Industries Limited inBagnan. The Company proposes to focus on quality priceand delivery aspects and to invest in brand building tocounter the competition.

Technology KBRSLLP The project technology is environmentally safe and soundRisk as compared to the baseline technology of producing red

clay bricks. The project would help the reduction of fly ashdumping problem faced by thermal power plants (classifiedunder hazardous materials category by MOEF - GOI) bymaking useful application of fly ash for producing buildingconstruction material. Also, the technology would be lessenergy and carbon intensive as compared to conventionalbricks manufacturing technology in India.

Force KBRSLLP The lenders may insist the Company to take adequateMajeure Risk /Insurer insurance cover for insurable Force Majeure risks



CHAPTER-VIII

SWOT ANALYSIS

Strengths (S)

Location of the proposed plant is ideal since main raw material fly-ash is available from thenearby power plant i.e. Bandel Thermal Power Station. Hence cost freight will be minimum.

One of the promoters Mr. Naresh Kumar Agarwal is already an established entrepreneur inWest Bengal dealing with lot of project since long. Promoter is already dealing with thesimilar type of fly ash bricks and blocks project will make the project technically feasible.

Company is importing the main plant with technical know-how from the Chinese supplier.



Product is environment-friendly since it saves natural clay & at the same time solves theproblem of the coal-based power plants for the disposal of huge fly-

AAC Blocks claim many advantages over traditional clay-bricks as mentioned in detail in thereport.

Electric Power will be available from the sub-station nearby.

Water will be available from the proposed bore-well.

Location of plant being close to big metro like Kolkata, Newtown & Howrah, Company willhave competitive advantage to supply AAC blocks/bricks to the customers.

Weaknesses (W)

Product being bulky in nature, freight cost, brings limitations for its market. Means they canbe marketed within a limited radius from the plant-location.

Raw materials i.e. fly-ash, cements, lime, gypsum all in dry powder form, can Create air-pollution problem. Hence norms as set out by Pollution Control Board are required to befollowed strictly.

Mfg.Technology being of foreign origin, its earliest indications will be necessary to avoidCompany’s dependence on foreign supplier to ensure smooth running of the plant.

Opportunities (O)

Market for AAC Blocks as a substitute for traditional clay-bricks is lucrative. However plantis required to be located precisely as near as possible to the power-plants for fly-ashavailability at minimum freight as well as availability of market nearby to deliver thefinished goods at minimum freight.

Threats (T)

Changes in Govt. policy on imports of capital goods, reduction in trade-barrier, may increasethe competition from foreign manufacturers.

After successful commissioning of the plant, it will attract other businessmen as well to thesame location & same machinery-supplier may commission similar

plants within close vicinity thereby increasing competition within same market area.

CONCLUSION:

Conclusion

The objective of the study was to assess techno economic viability of the proposed project of Kushal

Bharat RMC Services LLP i.e. to set up a AAC Block manufacturing at Barrackpore , Kalyani Exp.

Way, North 24 Parganas and evaluate the capability of the Company to repay the loan which they

propose to raise for the project.

Technical Assessment Summary:-



Land: The Company has 56 khatta of land. The said land is sufficient to carry out the proposed project.

The site is suitable for the project.

Factory & Plant Layout: The layout has been designed by experts in the field and will meet the plant

requirement.

Power: The Company will take electricity connection from the power board to meet the power

requirements at 150 KW for the project.

Manpower: The region has several small and large units and getting required categories of skilled and

unskilled manpower to run the unit should not pose any problem, as per planned manpower

requirement.

Raw Materials: The Company is setting up a project which is 20 km from the Bandel Thermal Power.

Once the agreement with the power plant takes place for the supply of fly ash/pond ash, the proposed

project is not expected to face any shortage of raw material (Fly Ash/Pond Ash)

Pollution Control: Adequate pollution precaution and control measures have been planned by the

Company.

Critical Success Factors:-

Maintaining of Quality of Finished goods will be critical

The Company should focus on quality aspects of the product. The Company should follow the

total quality management policy to maintain the quality of products as these products are of

very specialized nature. The Company plans for Trade Mark i.e BIS/ISO certification for its

products.

Ability to maintain margins

The fluctuation in sale prices and/or raw material prices will have a direct impact on the

margins. Ability to pass on the increase in cost of raw material to consumers and maintaining

the margins will be critical for the Company to meet its debt service requirements.

The Company should adhere to the project implementation schedule



A comprehensive credit appraisal for Term Loan & Cash Credit of a real life manufacturing projectsby applying the methods and techniques has been prepared. In the given project report the viability ofthe project, considering all the facts and figures are narrated. The report consists of detailedinformation, which is provided by the promoters with the aspiration of running of the export businesssmoothly. The export business has ready market to get overseas customers, so there is no risk ofproject failure; rather there is an opportunity of further growth of the business.

The preparing of the project report for export business is to provide a basic framework for appraisingthe overall feasibility and bank ability of a Term Loan and Cash Credit proposal.

The following conclusions from feasibility study are: Promoter has experience in multi- manufacturing business since long. Promoters have similar experience in mfg. of fly ash bricks & blocks. The Govt. of India emphasis the fly ash based industry for its eco-friendly nature. Estimated and projected financial parameters are within acceptable limit.

Based on the foregoing facts, the export business has been found to be technically &operationally feasible and economically & commercially viable.

RECOMMENDATIONS:

In view of financial help from the Bank, the fly AAC blocks & panels project has due merits forimplementation.

Bank may consider the following limits to the company- (Rs. In crs)

Nature of Limit Limit RemarksTerm Loan 4.22 For purchase of Plant &

machineries Cash Credit( CC) 1.18 For smooth running of the

businessBank Guarantee/LC 0.10 Electricity department & others Total (Fund Based + Non FundBased limit)

5.50

ACKNOWLEDGEMENT-

The Consultant acknowledges with thanks them for sincere co-operation from the Directors of KushalBharat RMC Services LLP. We have assessed the cost of investment based on the information anddata supplied by the Company, which are as per prevalent market rates.


