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MINI TOOL ROOM

PRODUCT CODE 359960313

QUALITY AND STANDARDS Tool room facility/Machine shop is a

servicing industry to cater the tooling needs

such as jigs, fixture, press tools, die sets,

forming tools and moulds etc, to other

industrial units as per their products. Every

tool produced in the tool room requires

100% of inspection to adhere to the

drawing, design and specifications of the

user industry. Wherever necessary relevant

IS: Specifications are to be followed in

selecting the tool material and tolerances in

the production of components of the tooling

to be produces.

PRODUCTION CAPACITY

S.No. Item Qty. Rate Value (Rs.)

1. Sheet metal dies. 600 Nos. Rs. 20,000 1,20,00,000

2. Plastic injection moulding dies. 600 Nos. Rs. 12,000 72,00,000

3. Bakelite moulding dies. 600 Nos. Rs. 8,000 48,00,000

4. Job work L.S. L.S. 5,00,000

5. Sale of Scrape L.S. L.S. 1,00,000

Total 2,46,00,000

MONTH AND YEAR May, 2014

OF PREPARATION

PREPARED BY Sh. Kamal Singh

Deputy Director (Mechanical)

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1. INTRODUCTION

Tool room facility is a necessity for production of tooling in all disciplines of

engineering industry whether mechanical, electrical, and electronic or plastics, etc

with the rapid industrialization in our country. It has become imperative to produce

various tools on job work basis e.g.

i. Jigs & fixtures

ii. Press tools

iii. Forming tools

iv. Moulding dies

v. Forging dies

2. MARKET POTENTIAL

The tool room serves as a backbone to a number of SSI Units situated in any

area. The demand for a tool room depends directly on the growth of other units.

Wherever there is concentration of more than 100 SSI Units, a tool room of this size

will be viable. The decision to set up a tool room facility can be taken, keeping in

view an action plan of the area and growth of existing units.

3. BASIS AND PRESUMPTIONS

i. The project profile has been prepared on the basis of single shift of 8 hours a

day. 25 days in a month and at 75% efficiency.

ii. It is presumed that in the first year, the capacity utilization will be 70% and

followed by 85% in the next year and 100% in the subsequent years.

iii. The rates quoted in respect of salary and wages for skilled workers and others

are above the minimum rates in other states.

iv. Interest rate for fixed and working capital has been taken at 15% on an

average, whether by bankers and or financial corporation.

v. Margin money required is minimum 30% of the promoters.

vi. The rental value of the work has been taken at the rate of Rs. 100 per square

meter approx.

vii. After the initial gestation period of one a half year. It will require seven years

to pay back the loans

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4. IMPLEMENTATION SCHEDULE

i. Preparation of project report:

a) Inviting quotation 1 month

b) Preparation month

ii. Provisional registration month

iii. Financial arrangements 1 month

iv. Purchase of machinery 2 months

v. installation of machinery 2 months

vi. Installation of machinery 1 month

vii. Electrification 1 month

viii. Recruitment of manpower 1 month

Total time Taken 9 months

5. TECHNICAL ASPECTS

1. In the tool room various machine tools including EDM facilities have been

provided to carry out various machining operations e.g. hacksaw wing,

drilling, turning, shaping, milling, surface grinding, and cylindrical grinding

to produce different parts/components of a tool. However, heat treatment

facilities will be availed from outside as the same is not economical for this

size of tool room.

2. The quality of the tools produces will be 100% inspected conforming to

drawing and specification of the user industries, wherever possible is

Specifications for tolerances and standard parts will be used to meet the

requirements.

3. Production capacity in term of machine hours is available as the products

tooling cannot be specified except types as mentioned above in the

introduction.

4. Approximate motive power has been given against each machine to the

installed. The total horsepower comes to 50 H.P.

5. Rate of interest is taken @ 15% in the report.

6. Pollution control needs: The tool room workshop is equipped with machine

tools only for doing job works like machining of ferrous metals to make

different types of tooling and there will also be no discharge of effluents.

There will be no chance of pollution and hence no pollution control

equipment is required.

7. Energy conservation: The machine tools provided in the scheme are

individually motorized. The motive power of each motor is according to the

requirement of each for proper performance.

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6. FINANCIAL ASPECT

6.1. Fixed Capital

Building: Built up workshop shed, Covered area of 500 sq. mtrs. on Rent.

6.1.1. Machinery and Equipments

a) Production Unit:

1. Surfacing, sliding and screw cutting Precision lathe machine cap. 1500 mm. Bedx400 mm swing x 40 mm, Bore motorized with 3 HP Motor & Electrical complete with standard Accessories i.e. face place, steady and with one 250 mm 4 jaw chuck and One 200 mm true chuck (3 jaws) and tool Holders etc of graded quality.

1 Nos. Rs. 10,00,000

2. 24 stroke shaping machine with 3 HP Electric motor & electrical

1 No. Rs. 50,000

3. Power hacksaw machine cutting capacity 7 dia with 1 HP motor and starter

1 No. Rs. 20,000

4. Bench type capacity drill Machine with HP Motor and Starter

1 No. Rs. 7,500

5. MTR Vertical Milling with 2 HP Motor & Accessories

1 No. Rs. 6,00,000

6. Surface grinding machine 16x8 with 2 HP Motor & Starter

2 No. Rs. 3,00,000

7. Cylindrical grinding machine Cap, 150x500mm, with internal Attachment with 2 HP main motor HP internal grinding motor and HP spindle driving motor and starter

2 No. Rs. 3,00,000

8. Double ended bench type 10 dia wheel Grinder motorized with 1 HP motor & starter

1 No. Rs. 10,000

9. EDM Spark Erosion Machine Table size 20 cmx30cm with 7.5 HP Load

1 No. Rs. 5,00,000

10 CNC milling Machine with all accessories 1 No. Rs. 25,00,000

Total Rs. 52,87,500

Installation & Electrification Charges @ 10 % Rs. 5,28,750

Total Rs. 58,16,250

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b) Testing Equipments:

1. Rockwell Hardness Tester 1 No. Rs. 50,000

2. Profile Projector 1 No. Rs. 3,00,000

Installation & Electrification Charges L.S. Rs. 35,000

Total Rs. 3,85,000

c) Measuring Instruments:

1. Surface plate 600x600 1 No. Rs. 50, 000

2. 12 Vernier height gauge 1 No. Rs. 12,000

3. Vernier Caliper 200 mm 1 No. Rs. 3000

4. Vernier caliper 300 mm 1 No. Rs. 4000

5. Micrometer 0.25 mm 1 No. Rs. 3000

6. Micrometer 0.50 mm 1 No. Rs. 3500

7. Inside Micrometer 0.20 1 Set Rs. 25,000

8. 41 pcs slip gauges set 1 Set Rs. 50,000

9. Combination set consisting of right angle bevel protector and center head and 12 scale

1 Set Rs. 20,000

10. Dial vernier caliper 1 No. Rs. 7500

11. Misc. marking instruments and vices etc. L.S. Rs. 50,000

Total Rs. 2,28,000

Initial Purchase of non-recurring type cutting tools L.S. Rs. 3,00,000

Total cost of machinery & equipments

Rs. 67,29,250

d) Office Equipments:

1. Computer with Design software 1 No. Rs. 1,50,000

2. Office table 2 Nos. Rs. 15,000

3. Chairs 5 Nos. Rs. 10,000

4. Almirah 2 Nos. Rs. 20,000

5. Working tables & stools 3 Nos. Rs. 10,000

6. Fixtures etc. L.S. Rs. 10,000

Total Rs. 2,15,000

Total cost of machinery, equipments and office equipments Rs. 69,44,250

Pre-operative expenses i.e. project cost and Non-refundable deposits etc.

Rs. 1,50,000

Total Rs. 70,94,250

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6.2. Working Capital (per month)

6.2.1. Building

Building (on rent) (Rs.)

Built up workshop shed, Covered area of 500 sq. mtrs. @ Rs. 100 per sq. mtr.

50,000

6.2.2. Personnel

S. No. Designation Nos. Salary (Rs.) Total (Rs.)

1. Manager 01 20,000 20,000

2. Designer-Cum-Engineer 01 15,000 15,000

3. Accountant/Storekeeper 01 7500 7,500

4. Supervisor 02 12,000 24,000

5. Clerk-Cum-Typist 01 7,500 7,500

6. Skilled Workers 03 10,000 30,000

7. Semi-Skilled Worker 04 7,500 30,000

8. Die fitters 02 7,500 15,000

9. Helpers 03 6,000 18,000

10. Peon/Chowkidar 01 6,000 6,000

Total 1,73,000

Perquisites @ 15% of salary 26,000

Total 1,99,000

6.2.3. Raw Material

Die steels assorted size 5000 kg @ Rs. 200 per kg. Rs. 10,00,000

Mild sheets assorted size: 2500 kg @ Rs. 60 per kg. Rs. 1,50,000

Total Rs. 11,50,000

6.2.4. Utilities

Power 1500 KWH Units @ Rs. 5/- Rs. 7,500

Water L.S. Rs. 300

Total Rs. 7,800

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6.2.5. Other Contingent Expenses (per month)

1. Postage & Stationery Rs. 2000

2. Telephone Rs. 1000

3. Consumable store, Waste Cotton, Lubricants, Cutting tools, grinding Wheels, etc. Rs. 20,000

4. Repairs & Maintenance Rs. 20,000

5. Transport Charges Rs. 10,000

6. Advertisement & Publicity Rs. 10,000

7. Taxes Rs. 3,000

8. Sales Expenses Rs. 5000

9. Misc. expenses including heat treatment charges to outside units Rs. 25,000

Total Rs. 96,000

6.2.6. Total Recurring Expenditure (per month)

1. Rent Rs. 50,000

2. Personnel Rs. 1,99,000

3. Raw Material Rs. 11,50,000

4. Utilities Rs. 7,800

5. Other contingent Expenses Rs. 96,000

Total Rs. 15,02,800

Total Working Capital for 3 months Rs. 45,08,400

6.3. Total Capital Investment

Total Fixed Capital Rs. 70,94,250

Total Working Capital (for 3 months) Rs. 45,08,400

Total Rs. 1,16,02,650

Machinery Utilization

This project profile is for tool room facility (medium size). It is expected that in 1st year 70%, 2nd year 85% and third year 100% machines will be utilized at 75% efficiency. No provision has been made in respect of heat treatment facilities, which are to be out sourced. This is necessary as the HT Equipment cannot be economically viable for this size of tool room.

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7. FINANCIAL ANALYSIS

7.1. Cost of Production (per annum)

1. Total recurring cost Rs. 1,80,33,600

2. Depreciation of machinery & equipment including

Testing machines @ 10% Rs. 5,28,750

3. Depreciation on measuring & marking instruments

and cutting tools etc. @ 20% Rs. 1,82,600

4. Depreciation on office equipments @ 20% Rs. 43,000

5. Interest on total capital investment @ 15% Rs. 17,40,398

Total Rs. 2,05,28,348

Say Rs. 2,05,28,000

7.2. Turnover (per annum)

S. No. Item. Qty. Rate Value (Rs.)

1. Sheet metal dies. 600 Nos. Rs. 20,000 1,20,00,000

2. Plastic injection moulding dies. 600 Nos. Rs. 12,000 72,00,000

3. Bakelite moulding dies. 600 Nos. Rs. 8,000 48,00,000

4. Job work L.S. L.S. 5,00,000

5. Sale of Scrape L.S. L.S. 1,00,000

Total 2,46,00,000

7.3. Net Profit (per annum)

= Turnover cost of production

= Rs. 2,46,00,000 - 2,05,28,000

= Rs. 40,72,000

7.4. Net Profit Ratio

= Net profit per year

X 100 Turnover per year

= 40,72,000

X 100 2,46,00,000

= 16.6 %

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7.5. Rate of Return

= Net profit per year

X 100 Total Capital Investment

= 40,72,000

X 100 1,16,02,650

= 35.1 %

7.6. Break-even Point

Fixed Cost (Per Annum) 1. Total depreciation Rs. 7,54,350 2. Rent Rs. 6,00,000 3. Interest Rs. 17,40,398 4. 40% of salaries Rs. 9,55,200 5. 40% of other expenses Rs. 4,60,800

Total Rs. 45,10,748

B.E.P

= Fixed Cost

X 100 Fixed Cost + Net Profit

= 45,10,748

X 100 45,10,748 + 40,72,000

= 52.6 %

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Address of Suppliers of Machines:

1. M/s H.M.T. Bangalore

2. M/s Addison & Co. Madras.

3. M/s Cooper Engg. Works, Chuchawad, Poon

4. M/s Perfect Machine Tools (P) ltd. Bell Building Sir P.M. Road Bombay

5. M/s Leading Engg. Co., 31, New Rohtak road, New Delhi

6. M/s Daulat Industries Corpn. Pvt. Ltd, Civil Lines, Ludhiana.

7. M/s. R.K. Machine Toos, Indl. Area-A, Ludhiana.

8. M/s Sagar Engg. Works, Indl. Area-B, Ludhiana

9. M/s Ashoka Bros., Panchkuian Road, New Delhi.

10. M/s Internation Machine Tools Corporation, 5, Park Street, Behind State

Bank of India, for, Bombay.

Address of Suppliers of Raw Materials:

1. M/s Radhi & sons, 82, Nagdevi Cross Lane, Bombay.

2. M/s Durga Mill Store, Miller Gnaj, Ludhiana

3. M/s Victor Steels Pvt. Ltd., Sirkiwalan Bazar, Delhi.

4. M/s B.K. Steel, Ludhiana

5. M/s. B.K. Steel, Ludhiana

6. M/s. New India Steel Engg. Co., Bank of India Building, 185, Sheikh

Memun Street, Bombay.

7. M/s Excel Steel Corporation, 162, Nagdevi Street, Bombay.