PROJECT PROFILE PRODUCT CODE ASICC(2000): PRODUCTION CAPACITY : QUANTITY 8,04,000 mtrs. Lancing (P.A) Valued Rs.

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1 PROJECT PROFILE NAME OF THE PROJECT: LANCING PIPE NIC CODE (1998): NIC:27152, PRODUCT CODE ASICC(2000): PRODUCTION CAPACITY : QUANTITY 8,04,000 mtrs. Lancing (P.A) Valued Rs. 3, 05,52,000 pipes MONTH & YEAR OF PREPARATION: PREPARED BY; MECHANICAL DIVISION MSME DEVELOPMENT INSTITUTE GOVT. OF INDIA, MINISTRY OF MSME VIKAS SADAN, COLLEGE SQUARE CUTTACK , ORISSA TEL ,

2 INTRODUCTION : Lancing Tubes are mainly required by steel plants, Ferro - alloy plants and other industries when similar furnaces are used. It is used for blowing oxygen into the furnace. There are ½ or 1 ½ -1 dia tubes made of 14 SWG or 16 SWG M.S. sheets. The joint of the tube is welded in tight. PLANT CAPACITY PER ANNUM: It is envisage to produce 8,04,000 mtrs. Lancing pipes per annum. MARKET AND DEMAND ASPECTS: Orissa is a rich source of minerals like iron oxide and bauxite. Number of steel industries like SAIL in Rourkela, Nilachal Ispat in Jajpur, Bhusan, Jindal in Angul & Jharsugada, number of sponge iron companies, rerolling mills, ferro alloys like IMFA & others are doing good business in outside the State and in export. Mesco, Mittal, Posco will also come up in the State to set up their mega steel plant in future. All these units will require large quantities of lancing pipes & tubes for their requirement. IMFA is having 4 projects producing different ferro-alloy. All these projects will require lancing pipes. On an assay the requirement of each of these units per annum is meters. So the total requirement for the 4 units of IMFA will be alone metres annum. Facor is also having a similar unit in Orissa requiring about metres of lancing tubes. IDC, Orissa will also require about metres for these ferroalloys unit. The requirement of Rourkela steel Plant is quite substantial and is estimated at metres per annum. Though two or three units has ventured to produce lancing pipes, none of them are yet successful in producing the same to conform to the quality standards prescribed by the consumers. The present unit has, will employ the modern technique of industrial welding for producing the pipes to meet the

3 required quality standards. Hence the unit will not face any difficulty in marketing its products. RAW MATERIALS: To produce 67,000 mtr. lancing pipes M.S. sheet 40 45,000/MT. Rs. 18,00,000 Other misc. LS Rs. 20,000 Rs.18,20,000/- MANUFACTURING PROCESS & SOURCE OF TECHNOLOGY: The process involves the following operations: 1. Cutting the sheets to size. 2. Rolling the sheets to tubes in the Tube mill. 3. Welding the seasons in induction welding machinery. 4. Inspection and packing. 5. The unit should follow the IS specification & any of the following manufacturing processes. a. Continuous oxy-acetylene gas welded pipes (OAW). b. Electric resistance welded (ERW). c. High frequency induction welded (HFIW). d. Hot finished welded (HFW). SOURCE: From experience of technical personnel at MSME-DI, Cuttack. BASIS OF PROJECT SELECTION: Since many steel plants and alloy steel plants have come up in Orissa, many entrepreneurs started demanding preparation of project profile on lancing pipe. The market was study and their tentative requirement was assed and it was found that some MSMEs can be engaged in manufacture of lancing pipe who will not face any problem in marketing their products and the cost of production will be competitive in the market. PRESUMPTION: 1. The rate of interest on the bank loan capital investment will be 12%. 2. One shift per day and 300 days taken as working period. 3. Minimum labour cost has been taken into account.

4 4. 2% raw material may be wasted during processing. PRODUCTION CAPACITY: To produce 67,000 mtrs. Lancing pipes / month valued at Rs.25,46,000/- Utility: Electricity 12, Rs. 42,000 Water own source as per requirement IMPLEMENTATION SCHEDULE: Preparation of project profile & regn.with DIC, other Organisations Availability of finance Construction of shed, digging of tube well and Other civil works Purchasing of plants, seeds for vegetation, flowering, And their plantation Appointment of staff and labour & trial run 1 month 3 months 3 months 1 month 1 month 9 months POLLUTION CONTROL: The unit should get no objection certificate from Pollution Control Board. FINANCIAL ASPECTS: Fixed Capital: Land & Building: Land: 0.5 acre Rs. 3,00,000 Land development Rs. 50,000 Boring with pump Rs. 1,00,000 Shed : 8, /sq.ft. Rs.20,00,000 Boundary with watchman gate Rs. 1,50,000 Rs.26,00,000

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6 Machinery & Equipments: 1. Tube welder ( 50 KW ) 1 18,00, D.C. motor with Thyroster control 1 4,50, Tube mill 1 15,00, Transformer with switch gear 7,00, Storage racks and bins 50,000 Total 45,00, Installation of 10% 4,50,000 Rs. 49,50,000 Pre-operative expenditure: Project profile 1,000 Electric connection 25,000 Telephone, stationary 4,500 Office furniture 15,000 Travel & transport 15,000 Rs. 60,500/- Total Fixed capital investment: = Rs.26,00,000 + Rs.49,50,000 + Rs.60,500 = Rs.76,10,500/- WORKING CAPITAL ANALYSIS: A)Man Power Requirement: Management 9,600 man hours / annum Skilled man power- 1,44,00 man hour/ annum Unskilled worker 1,6800 man hours / annum B)Salary and wages: Manager 15,000/- 15,000 Supervisor 10,000/- 10,000 Store keeper cum accountant one@4,500/- 4,500 Machinist 5,000/- 5,000 Skilled worker 4,500/- 22,500 Unskilled worker 3000/- 15,000 Peon cum watchman 3000/- 6,000 Rs. 78,000/-

7 C)Raw material estimation: ( To produce 67,000 mtr. lancing pipes ) M.S. sheet 40 45,000/MT. Rs. 18,00,000 Other misc. LS 20,000 Rs. 18,20,000 D. Utility (p.m.): Electricity 12, Rs. 42,000 E. Other miscellaneous recurring expenses (p.m.): Transportation expenditure 30,000 Stationery 1,000 Telephone 1,500 Maintenance charges 5,000 Publicity 2,000 Insurance 2,000 Misc. expenditure 5,000 Rs.46,500/- Sales per year/ Turnover per year: To produce 8,04,000 mtrs. Lancing 38/mtr. Rs. 3, 05,52,000/- Financial Aspects: Total Working Capital (p.m): B + C + D+ E = = Rs 19,86,500/- Rs. 78,000 +Rs.18,20,000 + Rs.42,000 +Rs.46,500 Working Capital for Three Month: Rs.59,59,500/- Total Capital Investment: Fixed capital Rs 76,10,500/- Working capital for 3 months Rs 59,59,500/- Rs 1,35,70,000/-

8 Financial Analysis: Cost of production per annum: Total recurring expenditure Rs 2,38,38,000 Depreciation on civil 5% Rs 1,07,500 Depreciation on machinery 10% Rs 4,50,000 Interest on bank loan 12% Rs 13,90,020 Rs 2,57,85,520/- Turnover per year: To produce 8,04000 mtrs. Lancing pipes per year valued at Rs.3,05,52,000/- Net profit per year: =Turn over - cost of production = Rs. 47,66,480/- Profit Ratio on sales = Profit x 100 = 15.6% Turnover Rate of return = Profit x 100 = 41.1 % Total Investment BREAK EVEN ANALYSIS: Fixed cost : Depreciation on civil 5% Rs 1,07,500 Depreciation on machinery 10% Rs 4,50,000 Interest on bank loan 10% Rs 13,90,020 Insurance Rs. 24,000 40% salary Rs 3,74,400 40% other exp. excl. insurance Rs 2,13,600 Rs. 25,59,520/- Break Even Point = Fixed cost x 100 = 25,59,520X 100 = 35 % Fixed cost + profit 73,26,000

9 ADDRESSES OF MACHINERY AND EQUIPMENT SUPPLIERS: Nanny and Co., 125, Bilious Road, Howrah Parked Machine tools, 5, Khetra Das Lane, Besides Broadway Holes, Howrah. Atlas Works (P) Ltd, 100, Rippon Street, Calcutta-16. M/S. Potel Tools, Mangalabag, Cuttack M/S. Pathak Machine tools, Espland, Kolkata. ADDRESSES OF RAW MATERIALS SUPPLIERS: 1)M/s. Orissa Small Industries Corporation,Industrial estate, Khapuria, Cuttack. 2) M/s. Steel Authority of India Limited, New Delhi 3) M/S. Tata Iron & Steel Company, Jamshedpur, Jharkhand. Resource Centre of Technology: 1) Mechanical division MSME-DI, Vikas Sadan,College square,cuttack 2) Technological Bureau of Small Entreprises, Ministry of MSME, Govt. of India, New Delhi. 3) Different Engineering colleges in the country. List Of The Units Setup By Using This Project Profile: 1) M/S. Sekhar Enterprises Ramuna Golai, Balasore. 2) Vikram Jain 18/C, Jaydurga Nagar, Bamikhal, Bhubaneswr, Dist: Khurda. 4) Sk. Habibur Rahman Trijanga Colony, P.O: Dangadi Dist: Jajpur. Mob