STAINLESS STEEL VESSELS

A. INTRODUCTION
The consumption of stainless steel has been increasing in the country all over these
years.

The stainless steel is used in the manufacture of vessels, utensils, tanks and other
sophisticated items. In view of its versatility and non-corrosive nature of the metal it has
various applications in domestic and industrial uses. Considering the growth in this area
there is a good scope for new stainless steel vessels manufacturing units to be set up.

B. PRODUCT USES AND SPECIFICATIONS

There is no is specifications for Stainless utensils. The raw material namely stainless
steel should be of good quality. The products are manufactured according to market
requirements and customers specifications. The Stainless steel tumblers, cooking
vessels, plates, tawas are very popular and consumed widely in all sectors. The
stainless steel utensils are normally made with 24 and 28 gauge stainless steel sheets.

C. MARKET POTENTIAL
The stainless steel is exceedingly used in utensils and domestic vessels. With the
growth of population and housing the demand for stainless steel vessels is increasing
day by day. The demand for stainless steel vessels emanates from domestic
households, hotels and establishments and processing industries. The demand for
housing is increasing as there is a heavy backlog of houses to be constructed in India
and there is a scope of adding 50 lakhs houses every year. This allows a big demand
for Stainless steel vessels. The growth of chemical industries and hotels also provide
ample scope for stainless steel vessels.

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D. TECHNICAL ASPECTS
1. Installed Capacity
The installed capacity of the proposed unit is manufacturing of 36 tonnes of Stainless
steel vessels per annum .This is based on 120 kgs of stainless steel vessels per day of
8 hours working, 300 days in ayear.

2. Plant and Machinery

The following machineries are required for production.
Items Qty Value
(nos.) (Rs.Lakhs)
6” Spinning lathe 6 3.50
Deep Drawing Power Press 50 Tonne 1 1.90
Single sided fly Press 1 0.12
Spot Welding machine 1 0.10
Beading machine 1 0.60
Circle cutting machine 36” 2 0.40
100 Tonne hydraulic Press 1 5.20
Shearing Machine 1 0.50
Polishing Machine 5 1.50
Misc tools & instruments 0.50
Electrically heated box type chamber furnace 2.00
Heating chamber size 24”x24 “x18”-20 kw
rolling with temperature control
Stamping machine 0.15
Weighing scales 0.50
Dies for press and fixtures 1.50

For Maintenance
41/2 ‘ Light duty lathe machine 1 1.20
¼ capacity geared drilling machine 1 0.15
Bench grinder 1 0.08
Gas Welding 1 0.10
Total 20.00

3. Manufacturing Process
The manufacturing involves Sheet cutting, pressing, welding, and polishing. The
spinning lathe is used to give curve shape to the product using suitable tool. The
welding set is used to join the different pieces and to form the required shape. Grinder is
used to smoothen the projected surface to give uniform surface. Polishing machine is

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used to give a bright finish to the product. The beading machine is used to raise
projections wherever required especially in the case where lid is used. Drilling machine
is used for drilling hole at required places. Fly press is used to make small components
by using suitable die. Circle cutting is used to cut sheets in the circular form.

4. Raw Material
The raw materials required for manufacturing Stainless steel vessels is stainless sheets
of various gauges. The other consumables such as polishing wheels, emery powder,
polishing soap, Brass rod, wood, Carbide stones, Oxygen gas, Silver Brazing Rod, etc
The stainless sheets of suitable grade is available from Salem stainless steel and other
dealers.

5. Land & Building

A rented place with 1000 sqft. area is required. The monthly rent is estimated at
Rs.5,000 and also an advance of Rs.50,000.

6. Utilities

Power:
The total power requirement of the unit will be 30 HP

Water:
Water is required only for human consumption.
Man power:
Category Nos Monthly Total
salary Salary
Supervisors 1 5000 5000
Operators 3 3000 9000
Unskilled 5 2000 10000
Assistants 2 3000 6000
Security 2 2000 4000
Total 34000
Add 20%benefits 6800
Total 40800
Annually Rs.4.90 lakhs

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7. Implementation Schedule
If financing arrangement is made available the project can be implemented within three
months period.

8. ASSUMPTIONS

Installed capacity per annum Stainless Steel Vessels-36 MT

Capacity utilization-Year -1 60%
Year-2 70%
Year-3 80%
Selling price per unit Stainless Steel Vessels-Rs.2.80 lakhs/Mt

Material cost at 100% Qty(including Rate/MT Value

20%wastage) (Rs.lakhs)
Stainless Sheets 43.20 Mt Rs.150000 64.80
Polishing Wheels, 6.95
Emery powder,
Polishing Soap,/oil.
Brass rods, Wood,
Carbide Stones,
Oxygen gas, Silver
Brazing rod,
Total 71.75

Consumables per annum-at 100% (Rs.lakhs) Rs.1.20 lakhs

Power and Fuel-100% (Rs.lakhs) Rs.3.23lakhs
Wages & salaries-100% (Rs.lakhs) Rs.4.90lakhs
Repairs & Maintenance p.m. Rs.2000/-
Depreciation Straight Line Method
General & administration Expenses per month Rs.10000/-
Selling expenses 3% on Sales
Interest on term loan and Working capital finance 14% p.a.
Income tax provision 36% on profit

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LIST OF MACHINERY SUPPLIERS
1. Orient Machine Tools
New No.269 (old No.130) Linghi Chetty Street
Chennai-600 001

2. Quality Machine Tools

New No.238, Linghi Chetty Strret
Chennai 600 001

3. Gujrat Machine Tools

New No.279, Linghi Chetty Street
Chennai 600 001

4. Premier Machine Tools

New No.103, Armenian Street
Chennai 600 001

5. Machine Centre
New No.214, Linghi chetty Street
Chennai 600 001

LIST OF RAW MATERIAL SUPPLIERS

1. Salem Steel
Old No.177 (New No.392) Walltax Road,
Chennai 600 003.

2. S.C.Shah Enterprises
No.315, Mint Street,
Chennai 600 003.

3. Anil Metals
New No.215, Linghi Chetty Street,
Chennai 600 001.

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1. COST OF PROJECT
[Rs.lakhs]

Land & Building (Advance) 0.50

Plant & Machinery 20.00
Other Misc. assets 0.50
Pre-Operative expenses 1.00
Margin for WC 1.72
23.72

2. MEANS OF FINANCE

Capital 8.72
Term Loan 15.00
23.72

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3. COST OF PRODUCTION & PROFITABILITY STATEMENTS
[Rs.lakhs]
Years 1 2 3

Installed Capacity (MT) 36 36 36

Utilisation 60% 70% 80%
Production/Sales p.a. (MT) 22 25 29

Selling Price/ MT (in Rupees) 2.80 lakhs

Sales Value 61.60 70.00 81.20

Raw Materials 43.05 50.23 57.40

Consumables 0.72 0.84 0.96
Power 1.45 1.69 1.94
Wages & Salaries 4.90 5.15 5.41
Repairs & Maintenance 0.24 0.25 0.26
Depreciation 2.15 2.15 2.15
Cost of Production 52.51 60.31 68.12

Admin, & General expenses 1.20 1.26 1.32

Selling expenses 1.85 2.10 2.44
Interest on Term Loan 2.10 1.84 1.31
Interest on Working Capital 0.73 0.73 0.73
Total 58.39 66.24 73.92

Profit Before Tax 3.21 3.76 7.28

Provision for tax 1.15 1.34 2.60
Profit After Tax 2.06 2.42 4.68

Add: Depreciation 2.15 2.15 2.15

Cash Accruals 4.21 4.57 6.83

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4. WORKING CAPITAL:
[Rs.lakhs]
Months Values % Margin Bank
Consumption Amount Finance

Raw Materials 0.75 2.69 25% 0.67 2.02

Consumables 1.00 0.06 25% 0.02 0.04
Finished goods 0.25 1.09 25% 0.27 0.82
Debtors 0.50 2.57 10% 0.26 2.31
Expenses 1.00 0.50 100% 0.50 0.00
6.91 1.72 5.19

5. PROFITABILITY RATIOS BASED ON 80% UTILISATION

Profit after Tax 4.68

6%
Sales 81.20

Profit before Interest and Tax 9.32

32%
Total Investment 28.91

Profit after Tax 4.68

54%
Promoters' Capital 8.72

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6. BREAK EVEN LEVEL

Fixed Cost (FC):

[Rs.lakhs]
Wages & Salaries 5.41
Repairs & Maintenance 0.26
Depreciation 2.15
Admin. & General expenses 1.32
Interest on TL 1.31
10.45

Profit Before Tax (P) 7.28

FC x 100 10.45 80
BEL = x x 100
FC +P 17.73 100

47% of installed capacity