feasibility report on Manufacture of Steel Furniture industry

1. 1
SUMMARY

2. 2
I. SUMMARY OF THE PROJECT
1. Name of the items : Steel furnishers
2. Name of the unit : Adirtha Steel Furniture
Address : Betkuchi, Bhetapara
Guwahati
3. Telephone No : Office : 0361-2365019, +91-9706328817
Factory: 0361-2365020, +91-9954751027
4. Name of the promoter : Mr. Partha Pratim Mahanta
Khanapara, Guwahati-781022
5. Constitution of the firm : Sole Proprietorship
6. Qualification :
DEGREE YEAR INSTITUTE/UNIVERSITY
B.COM (Management) 2011 K.C.Das Commerce College,
Gauhati University
MBA (Marketing & Finance) 2013 North Eastern Regional
Institute of Management
(NERIM), Dibrugarh
University
7. Work Experience :
NAME OF THE ITEMS MANUFACTURED DURATION
ORGANISATION
Modern Steel Furniture and Steel Furniture 3 years
Engineering (MSFE)
Guwahati

3. 3
8. Family background :
Name and address of the units/ items manufactured
Mr. Hem Chandra Talukdar,
Proprietor of Modern Steel Furniture and Engineering (MSFE)
Pathsala, Barpeta-
Phone No: +91-9678235249 (M)
+91-9864607083 (M)
9. Proposed location :
Factory : Mr. Amarendra Mahanta
Betkuchi, Bhetapara
Guwahati
Show Room : Ranee Bazar,
Joyanagar, Guwahati-781022
10. Estimated Project Cost : Rs. 24.50 Lakhs
11. Name and Address : IDBI Bank
of the Bank : Branch: Pan Bazar
Guwahati- 781001
12. Scheme of the Loan : Funding Under Credit Guarantee Scheme for
Micro and Small Enterprises (CGMSE)
13. Sanction Loan Amount : 20.00 Lakhs
14. Interest Rate : Interest Rate linked to Base Rate
15. Repayable Period : 7 years
16. Rate of Return on Total : 22.91 %
Capital Investment
17. Break-Even Point : 65.44 %

4. 4
ECONOMIC
VIABILITY

5. 5
I. ECONOMIC VIABILITY AND MARKETABILITY
INTRODUCTION: The rapid development of steel capacity is indeed a logical corollary of
any program of rapid industrialization for a developing country. Steel is used as a basic
material in the manufacture of metal products, electrical machinery. To Jawahar lal Nehru,
the first Prime Minister of India, steel was a symbol of the strength of the economy, and a
portent of the glory of India of the future.
India has many intrinsic advantages in the production of steel. Some of the richest iron ore
mines with the highest iron content are to be found in India. What is more, coal and iron ore
are found in close proximity to each other. In fact at one time, the cost of production of steel
in India was much lower than in other countries.
The growth of the steel industry is summarized in the given below Table. From 1950-51 to
2009-10, there was rapid growth of production of steel in India. As a result of which, the
demand for steel products has been grown-up. The government planning provides a helping
hand towards the growth of production of steel in India. However at the time when the Tenth
Plan was formulated, there was general slowdown in the major steel consuming sectors.
There were also restrictions imposed by major steel importing countries.
(million tones)
YEAR FINISHED STEEL
1950-51 1.0
1980-81 6.8
1990-91 9.6
2000-01 30.3
2007-08 56.1
2008-09 57.2
2009-10 59.7
Source: Economic Survey, 2010-11. RBI handbook of Statistics on the Indian Economy (2009-10)

6. 6
SCOPE: Fancy furniture showrooms are mushrooming across urban India as young,
upwardly mobile professionals splurge on luxurious living room sets, baroque bedroom
basics and stylish kitchens. The spurt in real estate activity and burgeoning growth in the
information technology and services sectors has led to a mammoth increase in demand for
Steel furniture in India.
International consulting firm Technopak Advisors estimates that the steel furniture market in
India is likely to witness a compound annual growth rate (CAGR) of about 30 per cent over
the next three years. In fact, global steel furniture industry research and consulting firm, CSIL
Milano has classified India as one of the 14 largest steel furniture markets in the world.
India‟s rapidly expanding economy is seeing growing affluence, both in urban and rural
areas. The tremendous growth of the mass media is also resulting in millions of middle-class
Indians aspiring for better lifestyles. Furniture-makers are catering to the urban middle class
need for stylish homes in compact apartments.
The non-organised sector, which accounts for nearly 85 per cent of the furniture made in
India, mostly uses wood as a raw material for the home segment, while the organised sector
produces wooden, metal and steel furniture mainly for office use. Increasingly, moulded steel
furniture, iron furniture, board furniture and even bamboo are gaining in popularity.
The Indian construction industry, ranked twelfth in the world, is experiencing maximum
growth and in turn, has created a huge demand for steel furniture and allied products. In
India, the home furniture segment accounts for 65 per cent of the furniture market, the office
segment about 20 per cent and garden furniture the remaining.
With the Indian economy and the real estate sector continuing to grow at a phenomenal pace,
demand for office and home furniture is expected to expand.

7. 7
MARKETABILITY: The demands for these items are increasing day by day due to
development of living standards in rural and urban areas. There is a good demand for these
items mainly for offices, institutions, commercial places in all areas, towns/big villages.
Proposed Selling Arrangement: The furniture produced from the “Adirtha Steel Furniture.”
will be distributed by our own showroom and to various distributor of Steel furniture across
the entire North-east and mostly in greater Guwahati.
Target Places:
1. Guwahati:
 Dispur
 Ganeshguri
 Zoo-road
 Maligaon
 Beltola
 Chandmari
 Geetanagar
 Hatigaon
 Azara
 Lakhtokia
2. Entire North-East (in some extent)
Target Customers:
 Corporate houses
 Offices
 Flats
 Upper and Middle Class Families

8. 8
TECHNICAL
FEASIBILITY

9. 9
II. TECHNICAL FEASIBILITY
MANUFACTURING PROCESS: The manufacturing process of steel furniture‟s
involves mainly cutting of sheets, tubes, flats to desired size, folding, bending, drilling,
punching, riveting and assembling as per the drawings. Finally, the items are to be spray
painted.
Steel Raw
Cutting
Bending
Polishing
Acid Bath
Final Product
Figure: 1 MANUFACTURING PROCESS OF STEEL FURNITURE

10. 10
SPECIFICATION:
ADDRESS:
BUREAU OF INDIAN STANDARDS
Manak Bhavan
9 Bahadur Shah Zafar Marg
IN-New Delhi 110002
Tel: +91 11 23 23 79 91
Fax: +91 11 23 23 93 99
E-mail: ird@bis.org.in
Web: www.bis.org.in
INDIAN STANDARD INSITUTE (ISI)
INTERNATIONAL ORGANISATION FOR STANDARDIZATION
- ISO:9001:2008, ISO:14001:2004 certified
The Adirtha Steel furniture will be made with the best quality CRCA sheets as per INDIAN
STANDARD INSITUTE (ISI) standard and International Organization for Standardization
(ISO). It ensures durability & sturdiness of the product. The CRCA sheets used for product
are chemically treated with 8 tank pre-treatment processes like de-rusting, degreasing & zinc
phosphatising, which make product rust-free and long lasting. All Adirtha steel furniture will
be powder coated & oven baked with the help of electrostatic instruments this make product
scratch resistant & superior in finish. All Adirtha steel furniture will be provided with our
own „ADIRTHA‟ 7 lever locks for added security.

11. 11
PLANT ECONOMICS
Shift Per Day 1
Working Days Per Annum 300
Turnover Per Month
Steel Almirah (8 Gaze) 10
Show Case 15
COMPONENTS TO BE PURCHASED FROM OUTSIDE
S.NO. NAME OF THE QUANTITY SPECIFICATION
COMPONENT
1. Mirror and Glasses 25 Mirror as per the size
and glass for other
utilities
2. Designing materials 25 Handles, Hanger etc

12. 12
INSTALLED CAPACITY:
S.NO. NAME OF THE QUANTITY
COMPONENT
1. Lathe Machine 30
2. Welding Machine 30
3. Sheet Bending 30
PROPOSED CAPACITY TO BE UTILISED
S.NO. NAME OF THE QUANTITY
COMPONENT
1. Lathe Machine 25
2. Welding Machine 25
3. Sheet Bending 25
MOTIVE POWER REQUIREMENT (Approximately)
S.NO. NAME OF THE VALUE
COMPONENT
1. Electricity 6, 500
2. Diesel 1, 500

13. 13
FINANCIAL
FEASIBILITY

14. 14
III. FINANCIAL FEASIBILITY
1. FIXED CAPITAL:
LAND AND BUILDING
S.No. Particulars Amount (Rs.)
1. Land 3600 sq. f @ Rs. 12.00 Lakhs per kottah 12, 30, 000.00
2. Boundary walls and other expenses 56, 000.00
3. Working Shed 1820 sq. f @ Rs. 65/sq. ft 1, 20,120.00
4. Office 96 sq. ft. @ Rs. 115/sq. ft. 11,040.00
5. Show Room 66, 000.00
6. Registration (AIDC) 10, 000.00
TOTAL 14, 93, 160.00
OFFICE AND SHOWROOM FURNITURE
S.No. Particulars Amount (Rs.)
1. Office Furniture 5, 000.00
2. Showroom Furniture 25, 000.00
TOTAL 30, 000.00

15. 15
PLANT AND MACHINERY (Quotation has been attach)
S.No. Particulars Quantity Rate (Rs) Amount
(Rs.)
1. Lathe Machine - 6ft 1 1,65, 000.00 1,65, 000.00
2. Welding Machine 350 AMP 1 16, 850.00 16, 850.00
Capacity
3. Sheet Bending Machine – 7ft 1 51, 500.00 51, 500.00
4. Grinding Machine – 4ft 1 6, 500.00 6, 500.00
5. Bench grinding Machine - 1 6, 150.00 6, 150.00
150 mm
6. Stand Drill Machine – 1ft 1 16, 500.00 16, 500.00
7. Gas welding and with set 1 8, 500.00 8, 500.00
8. Spray painting Machine – 1hp 1 19, 880.00 19, 880.00
200 lbs
9. Loose tools and installation L.S 29, 880.00 29, 088.00
@10%
10. Electrification L.S 20, 000.00 20, 000.00
TOTAL 3, 39, 968.00
Total Fixed Capital:
Land and Building = Rs. 14, 93, 160.00
Office and Show Room Furniture = Rs. 30, 000.00
Plant and Machinery = Rs. 3, 39, 968.00
Total = Rs. 18, 63,128.00

16. 16
2. WORKING CAPITAL
RAW MATERIALS COMPONENTS REQUIREMENT (MONTHLY)
S.No. Particulars Unit Quantity Total Cost
Cost/Kg Required
(Rs.) (Kg)
1. CRCA Sheets 60.00 800.00 48, 000.00
2. Angle Flat Channel etc. 50.00 550.00 27, 500.00
3. Welding Electrodes 2, 500.00 5 Case 12, 500.00
4. Primer/Red oxide 2, 700.00 60.00 8, 100.00
5. Paint/Putty 2, 800.00 70.00 5, 600.00
6. Fittings and Extra 1, 500.00 L.S 1, 500.00
Charge
TOTAL 1, 03, 200.00
STAFF AND LABOUR (MONTHLY)
S.No. Category Nos. Salary/Wages (Rs.) Total Amount
(Rs.)
1. Manager 1 12, 000.00 12, 000.00
2. Sales Executive 1 8, 000.00 8, 000.00
3. Store Manager 2 4, 500.00 9, 000.00
4. Skilled Worker 2 4,000.00 8, 000.00
5. Semi-Skilled Worker 4 3, 000.00 12, 000.00
6. Accountant 1 6, 000.00 6, 000.00
7. Chowkidar/Peon 2 2, 000.00 4, 000.00
TOTAL 59, 000.00

17. 17
UTILITIES AND OVERHEADS (MONTHLY)
S.No. Particulars Amount (Rs.)
1. Rent (Show Room) 8, 000.00
2. Power Electricity (Both in Industry and Show- 6, 500.00
Room)
3. Diesel 1, 500.00
4. Tools Replacement 2, 500.00
5. Stationery and Telephone 1, 000.00
6. Tax License and Insurance 1, 500.00
7. Repair and Maintenances 1, 200.00
8. Travelling Expenses 1, 000.00
9. Carriage (Inward/Outward) 3, 000.00
10. Advertisement and Publicity 500.00
11. Office Expenses/ Contingency 1, 500.00
12. Miscellaneous Expenses 500.00
TOTAL 28, 700.00
Total Working Capital Required (Monthly):
Raw Materials = Rs. 1, 03, 200.00
Salaries and Wages = Rs. 59, 000.00
Utilities and Overheads = Rs. 28, 700.00
Total = Rs. 1, 90, 900.00

18. 18
3. TOTAL CAPITAL INVESTMENT
S.No. Particulars Amount (Rs.)
1. Fixed Capital 18, 63, 128.00
2. Working Capital for three months 5, 72, 700.00
(3 × Working Capital / Month)
TOTAL 24, 35, 828.00
4. COST OF PRODUCTION PER MONTH
S.No. Particulars Amount (Rs.)
1. Working Capital 1, 90, 900.00
2. Interest @ 18 % per annum on Total Capital 36, 537.42
24,35,828 ×18
Investment ( )
100 ×12
3. Depreciation
Land and Building @ 5 % 6, 221.50
14,93,160×5
( 100 ×12
)
Plant and Machinery @ 15% per annum for 1 month 4, 249.60
3,39,968 × 15
( 100 × 12
)
Office and Show room furniture and equipment @
500.00
20% per annum for 1 month
30,000 × 20
( 100 × 12
)
TOTAL 2, 38, 408.52

19. 19
5. SALES TURNOVER (MONTHLY)
S.No. Particulars Quantity Rate (Rs) Amount
(Rs.)
1. Steel Almirah (18 Gaze) 10.00 15, 000.00 1, 50, 000.00
2. Steel Show case 15.00 9, 000.00 1, 35, 000.00
TOTAL 2, 85, 000.00
6. PROFITABILITY (MONTHLY)
Particulars Amount (Rs)
Sales Revenue 2, 85, 000.00
Sales Revenue = Rs. 2, 85, 000.00
Less: Cost of Production 2, 38, 500.00
TOTAL 46, 500.00
Profitability
Profit Per Month = Rs. 46, 500.00
Profit Per Annum (46, 500 × 12) = Rs. 5, 58, 000.00

20. 20
7. PROJECT RATIOS
Profit
(a) Percentage Return of Sales Turnover =
Sales Revenue
46,500
= × 100
2,85,000
= 16.32 %
Profit Per Year
(b) Rate of Return on Total Capital Investment =
Total Investment
5,58,000
= × 100
24,35,828
= 22.91 %
8. FIXED COST
Interest on Total Capital Investment = Rs. 36, 538.00
Depreciation on Land and Building = Rs. 6, 222.00
Depreciation on Plant and Machinery = Rs. 4, 250.00
Depreciation on Office and
Show-Room Furniture = Rs. 500.00
Rent = Rs. 8, 000.00
50 % Power Electricity = Rs. 3, 250.00
40 % of Salary and Wages = Rs. 23, 600.00
40 % of Overheads = Rs. 5, 680.00
TOTAL FIXED COST = Rs. 88, 040.00
Fixed Cost
9. BREAK-EVEN POINT (BEP) =
Fixed Cost +Profit
88,040
= × 100
88,040+46,500
= 65. 44 %

21. 21
ANNEXURE

22. 22
ANNEXURE I
ADDRESSES OF MACHINERY SUPPLIERS
1. Ravinder Engineering House
AT Road, Guwahati, Assam- 781001
Phone: 0361- 2545869
2. Tirupati Tools and Machinery
AT Road, Guwahati, Assam- 781001
Phone: 0361- 2548387
3. Nilachal Machines and Tools
SJ. Road, Athgaon,
Guwahati, Assam - 781001
4. D.G Machineries
AT Road, Guwahati, Assam- 781001
Phone: +91- 9207023523
5. Janata Machineries Stores Pvt. Ltd.
AT Road, Guwahati, Assam- 781001
Phone: 0361- 2546590
6. Humdard Engineering Works
AT Road, Guwahati, Assam- 781001
Phone: 0361- 2548193

23. 23
ANNEXURE II
ADRESSES OF RAW MATERIAL SUPPLIERS
1. Apana Trunk Factory
SJ. Road, Athgaon,
Guwahati, Assam – 781001
Phone: 0361- 2545435
2. Associated Iron & Steel Co.
Bhanuka Complex Block,
SJ. Road, Athgaon,
Guwahati, Assam – 781001
Phone: 0361- 2739039 / 2542381
3. Pawan Steel
SJ. Road, Athgaon,
Guwahati, Assam – 781001
Phone: 0361-2731941
4. Steel Sales Corporation
SJ. Road, Athgaon,
Guwahati, Assam - 781001
5. Apna Sail Shop
SJ. Road, Athgaon,
Guwahati, Assam – 781001
6. Kamrup Steel Traders
SJ. Road, Athgaon,
Guwahati, Assam - 781001