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PROJECT PROFILE

ON

HURRAICHI CHAPPALS & SANDALS

Product code : 291301002

Quality & Standards : As per customer

specification and standards

Production capacity : Quantity 1,20,000 pairs

Value Rs. 91,50,000/-

Month & year. : December ,2005

Prepared by : Small Industries Service Institute,

E-17/18 Industrial Estate

Naini, Allahabad-211 009.

Phone: (0532) 2697468.

Fax: (0532) 2696809

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INTRODUCTION:

Hurraichi Chappals and Sandals are mainly used in Rajasthan and Gujarat. This Item is

solely manufactured in India and not likely to have competition from other Countries. Its production

and productivity have to be increased in relation to increasing Demand. The process of manufacture

is on craft basis and fully hand-made. Standardization should be effected to ensure unformity in

quality and increase in Production at minimum cost. This industry should be broad-based to enable

trade to earn more and more foreign exchange and continue to maintain its grip; on the export

market.

Raw materials for the manufacture of these chappals and sandals are indigenously available

and there is no dearth of raw materials as well as labour for manufacture of this item. There is,

therefore, good scope for setting up SSI units for the said manufacture.

MARKET POTENTIAL

Leather footwear industry in India has been identified as thrust sector for export production

endowed with rich cattle wealth, century old tradition of leather making skills and backed up by

the most modern facilities. Indian Leather Footwear Goods ,has over the years acquired a significant

place in the world market. Today some 120 Countries import Indian Leather Footwear and Leather

goods.

Besides internal demand of leather products, the country has traditionally Remained as an

exporter of leather goods, leather footwear. Of latae, however, the internal-demand has shown a

rising trend.

The Leather Sector occupies a prominent position in export profile of India.. In fact, this is

one important industry where there is immense potential for growth and value addition.

India has been steadily transforming its traditional leather industry in the past two Decades

into a modern industry. There is beter application of new technologies for producing elegantly

designed wide range of. footwear maintaining high standards and better design elements. It is

expected that some units can be motivated to start the production of Hurraichi Chappals & Sandals

to meet the export demand.

BASIS & PRESUMPTION

(i) the production is based on single shift basis of 8 hours per day and 25 working days in a

month.

(ii) Time period for achieving full capacity utilization is 3 years.

(iii) Labour will be engaged on monthly basis keeping in view the present rates prevailing in

the market.

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(iv) Rate of interest for fixed and working capital @ 15%

(v) Margin money 25%

(vi) Land and building rented built up area 100 Sq. Mtrs.

IMPLEMENTATION SCHEDULE.

It will take 6 months to 1 year time to complete all the formalities before starting the

commercial production.

TECHNICAL ASPECTS

(i) PRODUCTION DETAILS AND PROCESS OF MANUFACTURE

Hurraichi Chappal & Sandal upper straps are cut by hand/machine out of goat and sheep

skins of bark turned leather and the laces/thongs. The upper components are then skived by upper

skiving machine provided to obtain uniformity in thickness and ensure quality. - The cut -out laces

are supplied to outside parties for weaving. pleated ready laces are fitted to the uppers along with

other preliminary operations such as instep strap fitting, stiching, decorative creasing, punching,

gimping, pinking, etc. finally as the upper components such as studs., flowers and other fittings, link

loops etc. are assembled and fitted and the prick marks done on uppers. Thus, the uppers, ready

for fitting between the top and bottom soles, are fitted in the slots marked on the top sole; and the

finishing done by hand/machine. Then, they are paired sized and packed.

ii) QUALITY SPECIFICATION

At present, no quality specification are available for Hurraichi Chappal & Sandals. But for

export orders, specifications are provided by the buyers only. Uppers and soles should be made

of good quality Bark tanned leather in order to have uniform colour.

Care should be taken to click the right components from the right portion of the leather.

Before taking different components to the closing section, inspection is to be done to ensure

quality. Good quality adhesive is to be used to ensure a proper bond between different components.

iii) PRODUCTION CAPACITY (Per annum)

i) Quantity 1,20,000 pairs

ii) Value Rs. 91,50,000

(iv) MOTIVE POWER

8 H.P.

(v) POLLUTION CONTROL:

This industry does not generate any pollution.

(vi) ENERGY CONSERVATION:

Power operated machinery must be switched off when not in used.

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FINANCIAL ASPECTS

1. FIXED CAPITAL

Land & Building Rented

Covered Area 100 Sq. Mtr. Rs. 3000/- per month.

2. MACHINERY AND EQUIPMENT

Sl. Machinery & IMP./ QTY. RATE Value

No. Equipments IND. (Rs.)

01. Upper Leather Skiving Imp. 1 65,000/- 65,000

Machine

02 Upper Strap Cutting Ind. 1 25,000 25,000

Machine (For Lace

Cutting)

03 Industrial Swing Ind. 4 10,000 40,000

Machine, Flat bed

(45K) (Power ½ H.P.)

04 Bottom Sole Cutting Ind. 1 75,000 75,000

Press(Power operated)

05 Bottom Components Ind. 1 30,000 30,000

Splitting Machine

(Power operated)

06 Rolling Machine Ind. 1 35,000 35,000

(Power operated)

07 Weighing Machine Ind. 1 10,000 10,000

08 Tools & Equipments 10,000 10,000

09 Wooden Lasts Ind. 400 200 80,000

pairs

10 Office Equipment 30,000 30,000

11 Installation @ 10% 28,000

12 Cost of Dies Ind. 6 3,000 18,000

13 Spare Parts on 28,000

Imported Machine

@ 20%

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Sub- Total(A) 4,74,000

15% Pre-operative

Expenses (B) 31,600

Total A+B 5,05,600

Total Fixed Capital Rs. 5,10,600/-

WORKING CAPITAL PM;

Personnel(Administrative and Supervisory) per month

SI. Designation No. Salary Total (Rs.)

No. @ Rs.

01 Manager cum Designer 1 5,000 5,000

02 Supervisor 2 4,000 8,000

03 Accountant cum Clerk 1 2,500 2,500

04 Peon-cum-Watchman 1 1,500 1,500

05 Skilled Worker 10 2,000 20,000

06 Semi-Skilled Workers 4 1,000 4,000

07 Helper-Part Time 2 500 1000

08 Chowkidar/Peon 1 1,500 1,500

Total 43,500

Perquisites @ 20% 8700

Grand Total 52,200

i) Raw Material (P.M.)

(a) Ladies Chappal

Sl. Description Qty. Rate Value (Rs)

No.

01 Bark tanned Goat/Sheep 200 kgs. skins 200 kgs. 200/- kg. 40,000

02 Bark tanned Buff calf 125 kgs. 180/- kg. 22,500

03 Bark tanned Cow Hide 250 kgs. 175/- kg. 43,750/

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04 Bark tanned Buff hide 350 kgs. 190/- kg. 66,500

05 Grindries For 5000 pairs 10/- prs. 50,000

06 Packing Material For 5000 pairs 5/- pair 25,000

Total 2,47,750

(b) Ladies’s Sandal

Sl. Description Qty. Rate Value

No. (Rs.)

1. Bark tanned Goat/Sheep skins 125 Kgs. 200/kg. 25,000

2. Bark tanned Buff calf 70 kgs. 180/kg. 12,600

3. Bark tanned Cow Hide 125 kgs. 175/kg. 21,875

4. Bark tanned Buff hide 175 kgs. 190/kg. 33,250

5. Grindries For 2500 15/pair 37,500

pairs

6. Packing Material For 2500 5/pair 12,500

pairs

Total: 1,42,725

(C) Gents Chappal

Sl.No. Description Qty. Rate Value

(Rs.)

1. Bark tanned Goat/Sheep 150 200/kg. 30,000

skins Kgs

2. Bark tanned Buff calf 80 kgs 180/Kg. 14,400

3. Bark tanned Cow Hide 150 kgs 175/kg. 26,250

4. Bark tanned Buff hide 175 kgs 190/kg. 33,250

5. Grindries For 20/pair 50,000

2500

pairs

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6. Packing Material For 2500 Pairs 6/pair 15,000

Total: 1,68,900

7. Say Grand Total a+b+c 5,59,375

Say 5,59,400

ii) Utilities (PM)

Sl. No. Description Amount (Rs.)

1. Power 7000

2. Water 500

Total: 7500

iii) Other Contingent Expenses (P.M.)

Sl.No. Description Value (Rs.)

1. Rent 5,000

2. Postage & Stationery 2,000

3. Transport charges 4,000

4. Telephone 2,000

5. Repair & Maintenance 1,000

6. Advertisement & Publicity 3,000

7. Insurance 2,000

8. Misc. Expenses 1,000

Total: 20,000

iv) Total Recurring Expenditure (P.M.)

Sl.No. Description Amount (Rs.)

1. Personnel 52,200

2. Raw Materials 5,59,400

3. Utilities 7,500

4. Other Contingent Expenses 20,000

Working Capital Per Month 63,91,00

Total Working Capital for 3 months : Rs. 19,17,300

(6,39,100x 3)

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TOTAL CAPITAL INVESTMEN

Sl. No. Description Amount (Rs.)

1. Fixed Capital 510600

2. Working Capital for 3 months 19,17,300

Total: 24,27,900

MACHINERY UTILISATION

The machinery utilisation will be the 60% during the first year of its production and will be

reach 80% by the third year.

FINANCIAL ANALYSIS

i) COST OF PRODUCTION

SI.No. Description Amount (Rs.)

1. Total Recurring Expenditure per year 76,69,200

2. Depreciation of Machinery & Equipment @ 10% 28,000

3. Depreciation on Office equipment @ 20% 6,000

4. Interest on total Investment @ 15% 3,47,850

5. Depreciation on tools & equipment @ 20% 2000

6. Depreciation on wooden cost @ 20% 16000

7. Depreciation of Dies @ 20% 3,600

Total: 80,72,650

TURN OVER (PER ANNUM)

SI.No. Description Qty. Pcs. Rate @ Value(Rs.)

1. Ladies Chappal 60,000 pairs Rs.70/pair 42,00,000

2. Ladies Sandal 30,000 pairs Rs. 75/pair 22,50,000

3. Gents Chappal 30,000 pairs Rs. 90/pair 27,00,000

Total: 91,50,000

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3) NET PROFIT PER ANNUM

Annual Turnover- Cost of Production : Rs. 91,50,000 -

8072650 = Rs. 1077350/-

4) NET PROFIT RATIO

Net Profit x 100

Turn over per annum = 1077350x 100= 11.7%

91,50,000

RATE OF RETURN

Net Profit x 100 =1077350 x l00

= 44% 24,27,900

Total capital investment

BREAK EVEN ANAL YSIS

(i) Fixed Cost (Per Annum)

Sl.No. Description Amount (Rs.)

1. Depreciation on machinery and equipment 28,000

2. Rent for one year 36,000

3. Depreciation on Office Equipment 6,000

4. Depreciation on Tools & Dies @ 20% 5600

5. Depreciation on wooden last @ 20% 16000

6. Interest on Capital Investment 3,47,850

7. 40% salary 250560

8. 40% of other Contingent Expenses 72,000

excluding Rent

Total 7,62,010

BREAK EVEN POINT

BEP =FIXED COST X 100

FIXED COST = PROFIT

=76290 x 100

= 41%7,62,010 + 1077,350

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Name & address of Machinery & equipment suppliers:-

1. M/s Leather & packaging Machine Corporation,

1/23, B, Asaf Ali Road, New Delhi-2.

2. Singer Sewing Machine Co. Ltd,21, Netaji Subhash Marg,

Darya Ganj,Delhi-6.

3. M/s Raj Machine Home, 35/116,D Lashkarpur, Kamla Nagar Agra-4.

4. M/s Precision Shoe Last Factory, 60, Industrial Estate, Nunhai, Agra.

5. M/s Sanghvi Shoe Accessories Pvt., Ltd., Agra, Mathura Road, Agra.

6. M/s Harman Sales Union, 24, Kala Bhavan, Mathew Road, Mumbai-400004.

7. M/s Srinivasan, No. 32, Bishop Garden, Chennai-600028.

8. M/s Solar Atur House, Warli Nagar, Mumbai-400018.

9. M/s Tuin Star Engineering, No.2, Thiruneer Malai Road,

Pammal, Chennai-600075.

10. M/s Apparal & Leather Technics Pvt. Ltd., 515, Avanasi

Road, Tirpur-6416002

Name & addresses of Raw Material Suppliers.

1. M/s Shroff Sales Corporation, Thingki Mandi, Agra-3.

2. M/s Basant Leather Corporation, Thing ki Mandi,

3. M/s Esskay Sales Corporation,

4. M/s General Leather Store

Hing Ki Mandi,Agra-3.

5. M/s Valliappa Leather Corporation

3/5 & 6, Narayana Chitty Street, Periamet,

Chennai-600003.

6. M/s T. Abdul Wahid & Co.

26, Veppery High Road, Chennai-600003.

7. M/s Synthokem Industries,

5, Hindi Prachar Satha Street,

Chennai-6000 17

8. M/s Zag Tanning, Zajmau, Kanpur.

9. M/s Super Tannery, Zajmau, Kanpur.