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Requirements for electronic weighing scales manufacuring unit uma tech weighing scales company tiruppur - tamil nadu
1. ELECTRONICWEIGHINGSCALESMANUFACURINGUNIT
Weighing function finds application in almost all industries besides retail outlets, laboratories, jewellers, dairies, couriers companies, etc. Electronic type weighing machines have an advantage over mechanical balances due to the following reasons;
INTRODUCTION
Compactness
Ruggedness and reliability
Good accuracy
Ease of operations
Facility for digital print-out, remote indication and parallel display
An electronic weighing scale consists of a basic load cell and a weighing platform or a pan. The associated electronics mainly comprises of such as signal conditioner and display/indicator and optionally a dot-matrix printer.
Electronic weighing scales come in different types depending on their application and weighing capacity. Some of the important types of electronic weighing scales are:
Sr. No.
Type
Application
Capacity
Least count
1.
Table top/ Retail scales
Weighing scales with platforms / pans for retail stores
30 kg.
5 gm.
2.
Bench scales
Weighing scales for chemical industries, wholesalers, grain merchants, all types of industries
1 ton
10 gm.
3.
Jewellery scales
High precision / low capacity weighing scales for weighing precious metals
500 gm.
0.01 gm.
4.
Analytical scales
High precision / low capacity weighing scales for laboratory application
200 gm.
0.01 gm.
5.
Industrial Platform scales
High capacity weighing scales for high volume weighing such as metals, industrial raw materials, industrial output
5 ton
100 gm.
6.
Hanging scales
Heavy duty weighing scales for field weighing
1 ton
10 gm.
7.
Weighbridges
Heavy duty weighing and rugged electronic weighing scales for truck weighing at industries, warehouses and transportation depots
60 ton
10 kg.
The heavy-duty electronic weighing scales such as industrial platform scales and weighbridges use a 4 load cell bridge technique. The proposed project envisages manufacture of electronic weighing scales of capacity upto 1 ton, i.e. table top (retail) and bench scales. As the basic manufacturing technology for heavy duty electronic weighing systems remains the same, the unit could, at a later stage, also explore the possibility of diversifying into heavy duty electronic weighing systems (such as weighbridges, etc.).
Electronic type weighing scales are fast replacing their mechanical counterparts in retails establishments (groceries, bakeries, sweetmeat shops, fruit and vegetable vendors, supermarkets, hardware stores, etc.). Electronic scales are also being widely used by post offices, couriers, poultries, dairies and small scale industries for weighing applications.
MARKET POTENTIAL
The total electronic weighing scales market in India is estimated at 100,000 units corresponding to Rs. 120 Cr. There are about 30 – 40 units manufacturing electronic weighing scales in the SSI sector besides 10 large units in the organised sector.
The total annual market for electronic weighing scales in the eastern region of the country (including West Bengal, Bihar, Jharkhand and Orissa) is estimated to be 9,000 units. The North
2. East market for electronic weighing scales is estimated to be close 2,000 units corresponding to Rs. 2.4 Cr.
Given the growth in organised retail industry in the country and the increase in penetration of electronic weighing scales, industry sources estimate the demand for electronic weighing machines in the North East to grow at a rate of 15% over the next 10 years. Thus the market is expected to reach a size of Rs. 8.4 Cr. by 2013. Overall, the national market for electronic weighing scales is estimated to reach a size of Rs. 280 Cr. by 2013.
Plant capacity and production targets for the proposed unit have been arrived at based on the following factors:
PLANT CAPACITY AND PRODUCTION TARGETS
Product Mix (of retail scales and bench scales)
Demand : Supply Gap (in the North East and adjoining region)
Minimum economic plant size (based on discussions with few existing manufacturers)
Rated capacity of the key equipment
The proposed electronic weighing scales unit would have a rated capacity to produce 1800 nos. on a 3-shift basis. At the rated capacity the total revenue would be close to Rs. 2.16 Cr. Although this is approximately 90% of the current total North East demand, it is just 1.8% of the total national demand. Given the expected market growth, at the end of 10 years (i.e by 2013), the rated plant capacity would be just over 25% of the then total North East demand. With the proposed capacity, there is scope for setting up only one unit for manufacturing electronic weighing scales in the North East.
It is assumed that the proposed manufacturing unit would not undertake the marketing of the products initially and would supply its entire production to an existing manufacturer/s which in turn would sell it under their brandname. However, at a later stage the manufacturing unit will have to explore the possibility of marketing the product under its own brandname.
Since total manufactured volumes of the proposed unit are relatively low, it is not justifiable to set up a unit exclusively for manufacturing electronic weighing scales. Hence it is proposed that the production facility for electronic weighing scales should be setup at the existing units manufacturing electronic items. Some of facilities at the existing units could be used for manufacturing the proposed products.
In the first year, the manufacturing unit would operate only in 2-shifts. However, from the second year the proposed unit should target to operate at the rated capacity.
Summing up;
Rated Plant Capacity – 1800 nos. on three shift basis
Average Gross Realisation – Rs. 12000/unit
Revenue at Rated Capacity – Rs. 2,16,00,000
Production Target (Year 1) - 1200 MT (2 shifts)
Revenue (Year 1) - Rs. 1,44,00,000
The basic raw materials used for manufacturing of electronic weighing scales are:
MAJOR INPUTS (RAWMATERIALS)
Load Cells
Printed Circuit Boards (PCBs)
Integrated Circuits (ICs)
Components (diodes, transistors, resistors, capacitors, rectifiers, potentiometers, transformers, switches, filters, etc.)
LED 7-segment display panels
Wires and connectors
Housing material (metal)
Consumables (solder)
Stainless Steel Platforms / pans
Packing material
3. The electronic weighing system comprises of a load cell, suitable signal conditioners and an output indicator. The signals from the load cell are amplified and fed to an analog to digital converter, which provides an output in a digital format for display. Occasionally, the output is also provide to a printing / processing unit. Exhibit 1 provides a schematic representation of the manufacturing process for electronic weighing scales.
PRODUCTION DETAILS&PROCESS TECHNIQUES
Exhibit 1
The manufacturing of electronic weighing scales is an assembly process involving the load cell, electronic circuits and electro-mechanical hardware. In the electronic assembly, the ICs, transistors, diodes, resistors, capacitors, transformers, coils, relays, potentiometers are laid on a PCB and soldered. The soldering is done either manually or using wave soldering machines.
Schematic – Electronic Weighing scales
The assembled PCBs are tested for performance. Subsequently the electronics assembly alongwith electro-mechanical assembly, hardware such as connectors, switches, terminals, display, are assembled and housed in a metallic case. An attractive front panel (or fascia) is fitted on to the metallic casing.
The testing process is the most critical in the entire manufacturing process. The electronic weighing scale is tested and calibrated to the desired specification on a testing assembly using standard weights. After testing and calibration, the equipment is packaged and ready for dispatch.
There is statutory requirement of obtaining approval from the Department of Weights & Measures for manufacture of Electronic weighing scales. It is mandatory to get the testing and calibrating equipment certified from the department on a regular basis.
QUALITY AND STANDARDS
The International Organisation of Legal Metrology (OIML) standards R 60 and R 76 are the most widely followed by the manufacturers of load cells. The certification ensures that their products meet international specifications for metrological performance and testing.
The key success factor for this project would be the after-sales service network. Given the density of retail outlets in Guwahati, a large share of the total sales would be in Guwahati. From the point of view of ease in operation, it is proposed that the unit be located in Guwahati.
LOCATION OF THE UNIT
The unit will work for 300 days on 2-shift basis in the first year after which it with work in three shifts.
BASIS AND ASSUMPTIONS
Inflation is assumed to affect both revenues and cost by the same amount, hence ignored for
PCB assembly
PCB testing
Electro-mechanical assembly
Testing and calibration
Painting / coating
Fitting of fascia
Electronic Circuit
Casing
Packaging & dispatch
4. financial workings.
Selling and distribution expenses have been ignored as the proposed unit would sell its entire production to an existing manufacturer, which in turn would sell it under his brandname.
Sr. No.
Item
Value
Basis
1.
Net realizations
Rs. 12000 / unit
Average net price realization for a table top (retail) electronic weighing scale
2.
Plant and building
~ 60% of land
ndustry norm
3.
Machinery and Equipment
--
Current cost inclusive of installation expenses
4.
Miscellaneous Fixed assets
--
ndustry norm
5.
Provision for contingency
10% of Total capital expenditure
Assumption
6.
Raw material prices
--
Landed cost (including transportation)
7.
Labour
--
Prevalent rate in North East
8.
Power and Fuel
--
Prevalent tariff in Assam
9.
Repair and maintenance
2% of fixed capital investment p.a.
ndustry norm
10.
Raw Material (RM)
0.5 months
11.
Work in Progress (WIP)
0.1 months
12.
Finished Goods (FG)
0.5 months
13.
Bills receivable
1 month
14.
Creditors
1 month
15.
nterest on Working Capital
9%
3% subsidy on Working Capital Loan under the Central Interest Subsidy Scheme, 1997
16.
Subsidy on Plant and Machinery
15%
Under the Central Capital Investment Subsidy Scheme, 1997
17.
Subsidy on Insurance Premium
100%
Under the Central Comprehensive Insurance Scheme, 1997
18.
Subsidy on Income Tax
100%
19.
Debt : Equity
60 : 40
20.
nterest on Term Loan
12%
21.
Margin money for Working Capital
25%
22.
RM cost
Landed cost at the factory gate (inclusive of transportation cost and excise duty)
FIXED CAPITAL
A. LAND AND SITE DEVELOPMENT
Particular
Units
Unit rate
Total
1.
Land & Site Development
1500 sq.m.
Rs. 200 / sq.m.
Rs. 3,00,000
Total
Rs. 3,00,000
B. PLANT AND BUILDING
Particular
Units
Unit rate
Total
1.
Buildings & Civil works
Office, Store, etc
Work shed
Warehouse
200 sq.m.
500 sq.m.
100 sq.m.
Rs. 3000 sq.m.
Rs. 1500 sq.m.
Rs. 1500 sq.m.
Rs. 6,00,000
Rs. 7,50,000
Rs. 1,50,000
Total
Rs. 15,00,000
Sr.
C.MACHINERY AND EQUIPMENT
Item
Quantity
Unit Cost
Total
1.
Load cell simulator
1 nos.
Rs. 40,000
Rs. 40,000
2.
General purpose oscilloscope DC – 10 MHz
1 nos.
Rs. 20,000
Rs. 20,000
3.
Power Supply (0 – 30 V, 2 A)
2 nos.
Rs. 5,000
Rs. 10,000
4.
Digital Multimeters
3 nos.
Rs. 3,000
Rs. 9,000
5. Sr.
Item
Quantity
Unit Cost
Total
5.
Standard Weights
1 set
Rs. 10,000
Rs. 10,000
6.
True RMS Multimeter
1 nos.
Rs. 5,000
Rs. 5,000
7.
Digital LCR Meter
1 nos.
Rs. 15,000
Rs. 15,000
8.
IC Tester / EPROM Programmer
1 nos.
Rs. 20,000
Rs. 20,000
9.
Transistor Tester
1 nos.
Rs. 4,000
Rs. 4,000
10.
UV Eraser
1 nos.
Rs. 4,000
Rs. 4,000
11.
Variacs (4 A)
2 nos.
Rs. 1500
Rs. 3,000
12.
Bench Drilling Machine
1 nos.
Rs. 5,000
Rs. 5,000
13.
Portable grinder
1 nos.
Rs. 3,000
Rs. 3,000
14.
Tools / jigs / fixtures
Rs. 20,000
15.
Assembly line (conveyorised)
Rs. 30,000
Total
Rs. 1,98,000
Sr.
D.MISCELLANEOUS FIXED ASSETS
Item
Total
1.
Office Equipment & Furniture
Rs. 25,000
2.
Electric fittings and fixtures
Rs. 20,000
3.
Fire fighting equipment
Rs. 10,000
Total
Rs. 55,000
Sr.
E. PRE-OPERATIVE EXPENSES
Item
Total
1.
Detailed Techno-commercial Feasibility Study
Rs. 1,00,000
2.
Loan application processing expenses
Rs. 5,000
3.
Establishment expenses
Rs. 20,000
Total
Rs. 1,25,000
Provision for contingency - @10% of the Total Capital Investment
F. PROVISION FOR CONTINGENCY
OPERATINGEXPENSES
Sr.
A. RAW MATERIAL
Raw Materials (Monthly)
Qty (nos.)
Unit Value (Rs./unit)
Value (Rs)
1.
Load Cells (Strain gauge)
100
Rs. 3500
Rs. 3,50,000
2.
Ics
1200
Rs. 6,000
3.
Transistors / Resistors / Diodes / Capacitors / Rectifiers / Potentiometers
Rs. 5,000
4.
Crystal
100
Rs. 40
Rs. 4,000
5.
Transformers
100
Rs. 10
Rs. 1,000
6.
Terminals / Connectors
Rs. 1,000
7.
Switches
Rs. 2,000
8.
PCB
100
Rs. 50
Rs. 5,000
9.
Fluorescent Display
100
Rs. 500
Rs. 50,000
10.
Other mechanical hardware
Rs. 20,000
11.
Cabinet / Housing (Metal)
100
Rs. 500
Rs. 50,000
12.
Packing material
Rs. 2,000
13.
Consumables
Rs. 2,000
Total
Rs. 4,98,000
Annual Raw Material cost - Rs. 59,76,000 (for 1200 units i.e. 2 shifts)
Rs. 89,64,000 (for 1800 units i.e. 3 shifts)
Sr.
B(1). DIRECT LABOUR
Labour (Monthly)
Qualifications
Nos.
Unit salary
Cost (Rs.)
2 -shift
3-shift
2-shift
3-shift
6. 1.
Production Supervisor
B.E./ B. Tech. (Electronics)
2
3
Rs. 10000
Rs. 20,000
RS. 30,000
2.
Skilled Workers
Diploma (Electronics)
24
36
Rs. 6000
Rs. 1,44,000
RS. 2,16,000
3.
Semi Skilled Workers
TI Certificate
4
6
Rs. 3000
Rs. 12,000
RS. 18,000
Rs. 1,76,000
RS. 2,64,000
Add: 15% perks
Rs. 26,400
RS. 39,600
Total Wage Bill (Monthly)
30
45
Rs. 2,02,400
RS. 3,03,600
Annual Direct Labour cost - Rs. 24,28,800 (for 1200 units i.e. 2 shifts)
Rs. 36,43,200 (for 1800 units i.e. 3 shifts)
Sr.
B(2). LABOUR INDIRECT
Staff (Monthly)
Qualifications
Nos.
Unit salary
Cost (Rs.)
1.
Manager
B.E/ B.Tech + MBA
1
Rs. 15000
Rs. 15,000
2.
Storekeeper-cum-Clerk
B. Com / M. Com
1
Rs. 4000
Rs. 4,000
Rs. 19,000
Add: 15% perks
Rs. 2,850
Total Wage Bill (Monthly)
2
Rs. 21,850
Annual Indirect Labour cost - Rs. 2,62,200 (at all production levels)
Sr.
C. POWER &FUEL
Utilities (Monthly)
Units
Unit Cost
Value (Rs.)
1.
Power
2000 units
Rs. 6
Rs. 12,000
Total
Rs. 12,000
Annual Power and Fuel cost - Rs. 1,44,000 (for 1200 units i.e. 2 shifts)
Rs. 2,16,000 (for 1800 units i.e. 3 shifts)
Sr.
D. OTHER EXPENSES
Other Expenses (Monthly)
Value (Rs.)
1.
Stationery and postage (including operating manual)
Rs. 5,000
2.
Repair and maintenance
@2% fixed capital investment per year
Rs. 4,000
3.
Marketing and distribution
Rs. 60,000
4.
Advertisement & Publicity
Rs. 20,000
5.
After Sales Service
Rs. 15,000
6.
Telephone, Fax and Internet
Rs. 3,000
7.
Miscellaneous (Electricity)
Rs. 3,000
8.
nsurance Premium
-
Total
Rs. 1,10,000
Annual Other expenses - Rs. 13,20,000 (at all production levels)
Sr.
E. TOTAL WORKING CAPITAL
Fixed Capital
Assumption
Value (Rs.)
1.
Raw Material (RM)
0.5 months
Rs. 2,49,000
2.
Work in Progress (WIP)
0.1 months
Rs. 71,240
3.
Finished Goods (FG)
0.5 months
Rs. 6,00,000
4.
Bills receivable
2 month
Rs. 24,00,000
5.
Creditors
1 month
Rs. 5,10,000
Total
Rs. 28,10,240
Margin money (@25% of total Working Capital) – Rs. 7,02,560
7. Sr.
TOTAL COST OF PROJECT
Cost item
Value (Rs.)
1.
Land & Site development
Rs. 3,00,000
2.
Building and Civil Works
Rs. 15,00,000
3.
Machinery and Equipment
Rs. 1,98,000
4.
Misc. Fixed assets
Rs. 55,000
5.
Pre-operative expenses
Rs. 1,25,000
6.
Provision for contingency
Rs. 2,17,800
7.
Margin money for Working Capital
Rs. 7,02,560
Total
Rs. 30,98,360
Total Cost of Project Rs. 30.98 lakhs
Debt : Equity
Promoters Equity (40%) Rs. 12.39 lakhs
Term Loan from financial institution Rs. 18.59 lakhs
FINANCIALWORKINGS
PROFIT &LOSS STATEMENT FOR 10 YEARS
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Capacity
1800
1800
1800
1800
1800
1800
1800
Capacity Utilisation
67%
100%
100%
100%
100%
100%
100%
Production
1200
1800
1800
1800
1800
1800
1800
Sales Realisation
14,400,000
21,600,000
21,600,000
21,600,000
21,600,000
21,600,000
21,600,000
Raw Material
5,976,000
8,964,000
8,964,000
8,964,000
8,964,000
8,964,000
8,964,000
Direct Labour
2,428,800
3,643,200
3,643,200
3,643,200
3,643,200
3,643,200
3,643,200
Indirect Labour
262,200
262,200
262,200
262,200
262,200
262,200
262,200
Power and Fuel
144,000
216,000
216,000
216,000
216,000
216,000
216,000
Total operating costs
8,811,000
13,085,400
13,085,400
13,085,400
13,085,400
13,085,400
13,085,400
Gross Profit
5,725,800
8,719,800
8,719,800
8,719,800
8,719,800
8,719,800
8,719,800
Other Operating Expenses (Fixed)
1,320,000
1,320,000
1,320,000
1,320,000
1,320,000
1,320,000
1,320,000
PBDIT
4,405,800
7,399,800
7,399,800
7,399,800
7,399,800
7,399,800
7,399,800
Interest on WC
189,691
284,537
284,537
284,537
284,537
284,537
284,537
Interest on Term Loan
220,944
220,944
196,394
171,845
147,296
122,746
98,197
Depreciation
187,442
166,829
148,569
132,382
118,020
105,268
93,938
PBT
3,807,723
6,727,491
6,770,300
6,811,037
6,849,948
6,887,249
6,923,128
Tax
-
-
-
-
-
-
-
8. PAT
3,807,723
6,727,491
6,770,300
6,811,037
6,849,948
6,887,249
6,923,128
Cash Profit
3,995,165
6,894,320
6,918,869
6,943,418
6,967,968
6,992,517
7,017,066
GP Margin
39.8%
40.4%
40.4%
40.4%
40.4%
40.4%
40.4%
NP Margin
26.4%
31.1%
31.3%
31.5%
31.7%
31.9%
32.1%
Return on Investment (ROI) in the first year of operation – 122.9%
BREAKEVEN ANALYSIS
Particulars
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Capacity Utilisation
67%
100%
100%
100%
100%
100%
100%
Gross Realisation
14,400,000
21,600,000
21,600,000
21,600,000
21,600,000
21,600,000
21,600,000
Variable Costs
Direct Material
5,976,000
8,964,000
8,964,000
8,964,000
8,964,000
8,964,000
8,964,000
Power & Fuel
144,000
216,000
216,000
216,000
216,000
216,000
216,000
Interest on Working Capital
189,691
284,537
284,537
284,537
284,537
284,537
284,537
Total Variable Costs
6,309,691
9,464,537
9,464,537
9,464,537
9,464,537
9,464,537
9,464,537
Contribution
8,090,309
12,135,463
12,135,463
12,135,463
12,135,463
12,135,463
12,135,463
Fixed Costs
Other Expenses (Fixed)
1,320,000
1,320,000
1,320,000
1,320,000
1,320,000
1,320,000
1,320,000
Manpower Cost
2,691,000
3,905,400
3,905,400
3,905,400
3,905,400
3,905,400
3,905,400
Interest on Term Loan
220,944
220,944
196,394
171,845
147,296
122,746
98,197
Total Fixed Cost
4,231,944
5,446,344
5,421,794
5,397,245
5,372,696
5,348,146
5,323,597
Break Even Point
7,532,467
9,693,987
9,650,291
9,606,596
9,562,900
9,519,205
9,475,510
Actual Sales
14,400,000
21,600,000
21,600,000
21,600,000
21,600,000
21,600,000
21,600,000
Break Even Sales at % of Capacity
35%
45%
45%
44%
44%
44%
44%
SOURCES OFRAWMATERIAL
Electronic Components
Bharat Electronics, Bangalore
116/2, Trade Centre,
Race Course Road
Bangalore - 560 001
Tel: 080 226 7322
DID: 080 2260252, 2260253
Fax: 080 225 8410
Electronic Corporation of India Ltd., Hyderabad
ECIL Post,
Hyderabad - 500 062,
Tel: +91-40-7123409
Load Cells
AG Measurematics
30, Civil Lines,
Roorkee – 247667
Tel: 91-1332-70772
Fax: 91-1332-71172
Sens Tech (P) Ltd, Bangalore
#17 , Survey No : 43 / 1,
Hesserghatta Road,
Bangalore – 560073
Tel - +911-080-8379935
Fax - +911-080-8379935.