BUSINESS PLAN ON

SPONGE PLANT

By USHA GROUP(Kiran)

VINAYAKA SPONGE Pvt. Ltd

VS(p)L

OUT LINE OF BUSINESS PLAN• Name of the Company• About the Sponge • Organization Structure• Procedure to take the permission• Production Process• Location of the plant• Financial information

NAME OF THE COMPANY

Our company name is “VINAYAKA SPONGE PRIVATE LIMITED”

The “VINAYAKA Sponge private limited” is only concentrate on SPONGE only. Now a days the demand for the sponge is more. That is the main reason to start this business. The company is aim to produce the good quality of Sponge Iron, Lumps & fines only.

ABOUT THE SPONGE The product Sponge is main raw

material for are 1) Iron Ore 2) Coal 3) Dolomite Chips

The main supplier of Iron Ore is “Sri Venkateshwara Mines” and we also purchase from other.

The material “Coal” is purchased form the “South Africa”.

The Dolomite Chips is purchased from the producers of “Andhra Pradesh”.

And the Sponge is the main raw material for the steel.

Our main customers are The Steel Plants of Chennai, Kerala, Andhra Pradesh, Goa, and other places.

The project cost include Lands, Buildings, machinery and set up has cost almost 30 crores.

Our company is estimated to recruit 130 employees.

ORGANIZATION STRUCTURE

Engineers

Work Men

Production Dept.

Board Of Directors

General Manager

Shift incharge

Sales Dept. Finance Purchase Dept.

PROCEDURE TO TAKE THE PERMISSION

• First we need to get the permission of KUM (Karnataka Udyog Mithra)

• And then we need to get the permission of Pollution Control BoardEnvironment Control Board

ENVIRONMENT POLICIES

ENVIRONMENT POLICIES

• 20 acres of land is must require. In that ¼ is greenery.

• The plant is ½ km for away from Highways.• 1½ km for away from village and railways.• 25 km for away from Monuments.• 5 km for away from Rivers.• 10 km for away from city.

PRODUCTION PROCESSIron Ore Coal Dolomite

Feeding into kiln and materials heat up to 11000 C

Cooler

Material cooled at 100-1500 C

[Output is Sponge Iron and unburned coal (dolochar)]

-5 mm for magnetic separation

+5mm for magnetic seperation

Sponge Iron fines for product house bin

Dolochar Sponge Iron lumps [+5mm]

Screening

+5mm for magnetic separation

ABOUT THE MACHINERY

The machinery contains “kiln” “vibrators” and “air vaccum filters”

And the machinery is occupy the 40mts length and 3mts diameter.

And capacity of machine is 100 tons per day.

The life span of the machinery is 20 year.

OUT PUTFor 100 tons out put we require to input

the raw material of200 tons of Iron Ore100 tons of Coal160 kg of Dolomite

And the out put is 100 tons Sponge and 40 tons of Dolochar (waste) and this Dolochar is used for the power

plants and bricks.

COST OF RAW MATERIALS

• The Raw Materials are ‘Iron ore’ ‘coal’ and ‘Dolomite’

The cost of Iron ore is 1800 per ton,The cost of coal is 7000 per ton,The cost of Dolomite is 800 per

ton.

LOCATION OF THE PLANT

• The location of plant is at ALKUNDI, which is 10km away form Bellary.

• And it is fulfill the all requirement of environmental policies.

PROJECT COST DETAIL

• The total project cost is estimated that 30crores.

• Out of 30crores, 9crores is contributing by partners and 21crores by loan.

• In that 17 crores for machinery • We need 20 acre of for that we need that 6

lakhs per acre that 1.2 crores• And remaining for set up of machinery, working

capital and others.

ABOUT THE COMPANY

• The “VINAYAKA Sponge Private Limited” is a partnership firm. It has 6 partners.

• Each partner has invest 1.5 crores• And the profit sharing ratio is 1:1:1:1:1:1• And remaining amount is taken loan, At the

interest rate 14%.

ABOUT EXPENDITURES

• The electricity cost will come Rs.300 per ton.• And monthly salary for the workers and

labours is around the 10lakhs.• And the transportation charges per month is

20lakhs.

FINANCIAL INFORMATION Cost : 200 tons of Iron ore per day

cost of Iron Ore per ton is 1,800 that is 200 1,800 3,60,000/day 100 ton of Coal per day cost of Coal per ton is 7,000 that is 100 7,000 7,00,000/day 160kgs of Dolomite per day cost of Dolomite per ton is 800 that is 160kg is 130/day

• The total cost per day is Iron Ore 3,60,000.00Coal 7,00,000.00Dolomite 130.00

10,60,130.00/dayand that is per year is 10,60,130.00 30 12

38,16,46,800.00

REVENUE • Total production of Sponge Iron per day is 100 tons

And Dolachar is 40 tons. Sponge Iron is 18,000 per ton that for 100 ton is 100 18,000

Rs.18,00,000/day Dolachar is Rs. 500 per ton that is for

40tons is 40 500 Rs.20,000/dayTotal revenue is 18,00,000 20,000 18,20,000/day

per year is 18,20, 000 30 12 65,52,00,000

GROSS PROFIT Revenue cost

that 65,52,00,000.00 38,16,46,800.00 27,35,53,200.00

Expenditure for the yearElectricity 9,00,000.00 12

1,08,00,000.00Salary 10,00,000.00 12

1,20,00,000.00Transportation expenses 20,00,000.00 12

2,40,00,000.00

Total ExpenditureElectricity 1,08,00,000.00Salary 1,20,00,000.00Transportation expenses 2,40,00,000.00

4,68,00,000.00 interest 1st year installment 3,02,48,033.00 missl expenses 1,00,00,000.00

interest on partners capital 6% 5,40,000.00 9,24,48,033.00

NET PROFIT

Gross Profit Expensesthat is 27,35,53,200.00 9,24,48,033.00

Net Profit 18,11,05,167.00Income Tax 30% 5,43,31,550.00profit for sharing is 18,65,05,167.00 5,43,31,550.00

12,67,73,617.00/year

PROFIT SHARING

Total Profit 12,67,73,617.00/yeartotal partners 6 there fore 12,67,73,617.00 6

2,11,28,936.16/yearper month is 2,11,28,936.16 12

17,60,744.68/month

THANK YOU