LEATHER WAIST BELT 1. INTRODUCTION 2. MARKET POTENTIAL PRODUCT CODE : PRODUCTION CAPACITY : 18,000 Nos. (Per Annum) Value : Rs.
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1 LEATHER WAIST BELT PRODUCT CODE : QUALITY AND STANDARDS : As Per Customer Requirement PRODUCTION CAPACITY : 18,000 Nos. (Per Annum) Value : Rs. 39,60,000/- MONTH AND YEAR : July, 2014 OF PREPARATION PREPARED BY : Sh. Tarsem Lal Deputy Director (Leather & Footwear) 1. INTRODUCTION Leather waist belt is an item of dress used by young and old. It has a functional value besides being a fashion item. The actual use of this belt is to keep the pant tight at the waist. They are made in different widths and lengths to suit customers of all age groups and build. The leather used is plain or chrome tanned cowhides of even substance in different colours and shades of mainly black and brown. The buckles used are in different attractive designs and plated. They are detachable and fitted as per customer s choice. Leather belts are more comfortable in use and long lasting than belts made of other materials. The manufacturing process of these belts is very simple. This item can easily be fabricated by small scale/cottage scale units. 2. MARKET POTENTIAL The demand of waist belts made of leather is increasing in domestic as well as export markets. It is popular among school-going children and youths wearing western dress. It is also popular among the other age groups of men. There is no scarcity of raw materials and skilled workers, as the same is available in abundant quantity at every place of the country. -97-
2 Leather & Footwear Division 3. BASIS AND PRESUMPTIONS This project is made on the basis of the following presumptions: i. The production is based on single shift basis of 8 hrs. per day and 25 numbers of working days in a month. ii. Maximum capacity period 5 years. iii. Labour will be engaged on monthly basis keeping in view the present rates prevailing in the market. iv. Rate of 15% per annum. v. Margin money of the total investment 25%. vi. Payback period 10 to 12 years. vii. Land and building rented; constructed area 75 sq.mt. 4. IMPLEMENTATION SCHEDULE It will take 10 month time to complete all the formalities before starting the commercial production. 5. TECHNICAL ASPECTS 5.1. Process of Manufacturing After selection of suitable leather, the belts of different sizes are cut by strap cutting machine and skived from the edges. Similarly the lining of the same sizes of required leather is also cut. The skived edges are folded. Then the lining is attached by paste. After pasting the belts are stitched with help of stitching machine. The excess of lining are to be trimmed. The other operations like buckle attaching edge setting punching are then carried out according to the design. The belts are then finally inspected and packed Quality Control and Standards The belts are generally manufactured as per buyer s requirements and specifications. However, the quality of this item will be maintained by the good quality of raw materials, selection of appropriate designs and strict supervision during manufacturing process Production Capacity The unit is proposed to produce 18,000 nos. leather waist belt per year Motive Power Total power requirement is about 3 H.P Pollution Control This industry does not create any kind of pollution and as such there is no need to take any preventive measures for pollution control. -98-
3 Leather Waist Belt 6. FINANCIAL ASPECT 6.1. Fixed Capital Land & Building: Built-up area of 75 Sq. meters Rs. 10,000/- per month Machinery and Equipments S.No. Particulars Ind/Imp Qty. Rate Value (Nos.) (Rs.) (Rs.) 1. Strap cutting machine Power Ind. 1 15,000 15,000 Operated 2. Upper Leather skiving machine Ind. 1 40,000 40, Single Needle flatbed Industrial Ind. 2 15,000 30,000 Sewing Machine 31 ND 15 Merrit 4. Side creasing machine Ind. 1 5,000 5, Hand tools and other equipments 10, Office equipment and working table 15, Electrification and installation 10% of machinery 9,000 Total 1,24,000 Preoperative expenses Rs. 16,000/- Total Fixed Capital Rs. 1,40,000/ Working Capital (per month) Personnel S.No. Description Nos Salary (Rs.) Amount (Rs.) 1. Manager (self) 1 15,000 15,000 2 Supervisor 1 8,500 8, Accountant-cum-Storekeeper 1 8,000 8, Skilled Workers 4 8,000 32, Semi-Skilled Workers 2 7,000 14, Watchman/Peon 1 8,000 8,000 Total 85,500 Add 20% on salary 17,100 Grand Total 1,02, Raw Materials including Packaging Materials S.No. Description Qty. Rate (Rs.) Amount (Rs.) 1 Chrome Tanned upper Leather 9000 Rs.9/dcm 81,000 2 Split Upper Rs.4/dcm 36,000 3 Buckle, thread, solution etc Rs.20/pc 30,000 4 Packing material 1500 Rs.2/pc 3,000 Total 1,50,
4 Leather & Footwear Division Utilities Power: 400 Rs. 6/- per unit Rs. 2,400/- Water: L.S. Rs. 200/- Total Rs. 2,600/ Other Contingent Expenses (Per Month) S.No. Particular Amount (Rs.) 1. Rent 10, Postage & Stationery Repair & Maintenance Transportation 1, Insurance Sales Expenses 1, Consumable stores Advertisement/Publicity 2, Miscellaneous expenses 1,000 Total 17, Total Recurring Expenditure (per month) Rs. 2,72,700/ Total Capital Investment Fixed Capital Rs. 1,40,000 Working Capital for 3 months Rs. 8,18,100 Total Rs. 9,58,100/- MACHINERY UTILISATION Initially 60% utilization of machinery is there and thereafter it will 10% per year and 100% utilization will be achieved during the next five years. 7. FINANCIAL ANALYSIS 7.1. Cost of Production (per annum in Rs.) S. No. Description Amount (Rs.) 1. Total recurring cost 32,72, Deprecation on 10% 9, Depreciation on tools, furnitures & 20% 5, Interest on total capital 15% 1,43,715 Total 34,30,115 Say 34,30, Turnover (per annum) Leather Waist Belts 18,000 Rs.220/- Rs. 39,60,000/
5 Leather Waist Belt 7.3. Net Profit (per annum) Turnover Cost of Production Rs. 39,60,000-34,30,000 Rs. 5,30,000/ Net Profit Ratio Net profit per year Turnover per year 5,30,000 39,60, % 7.5. Rate of Return Net profit per year Total Capital Investment 5,30,000 9,58, % 7.6. Break-even Point Fixed Cost (Per Annum) (Rs.) Total Depreciation 14,000 Rent 1,20,000 Interest on total capital investment 1,43,715 Insurance 6,000 40% of Salary and Wages 4,92,480 40% of Other Contingent Expenses excluding rent & 33,600 insurance Total 8,09,795 B.E.P Fixed Cost Fixed Cost + Net Profit 8,09,795 8,09, ,30, % -101-
6 Leather & Footwear Division Names & Addresses of suppliers of Machinery & Equipments 1. M/s Raj Machine Home 35/118-D, Lashkarpur Near Kamla Nagar Agra M/s Leather Machinery Corpn. 11, Harrington Road Chetpet, Chennai M/s Paul Bros. Nai Sarak, Delhi Names & Addresses of suppliers of Raw Material Can be locally procured from Delhi
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