leather garments introduction
TRANSCRIPT
LEATHER GARMENTS
INTRODUCTION
A leather jacket is a type of clothing—a jacket-length coat usually worn on top of
other apparel, and made from the tanned hide of various animals. The leather
material is typically dyed black, or various shades of brown, but a wide range of
colors is possible. Leather jackets can be designed for many purposes, and
specific styles have been associated with the subculture called greasers,
motorcyclists, military aviators, police, and music subcultures (punks, goths,
metal heads, rivet heads), who have worn the garment for protective or
fashionable reasons, and occasionally to create a potentially intimidating
appearance.
Leather Garments are one of the sophisticated products of finished leather.
Leather Garments consists of articles of leather apparel and other cloth
accessories as per ITC Classification which would include more specifically
Gents Leather jackets, Long Coats, Waist/Shorts, Leather Pants/Shorts and
Children Garments. These are used only in cold places and usually garments
made for autumn – winter are made of some what heavy leather from Hides with
thick lining of either wool or artificial sheep nappa is generally high for European
markets in spring summer while that for cow hides and somewhat heavy sheet
skin is high for the autumn-winter in Europe and the USA.
MARKET
Leather Industry – Overview, Export Performance and Prospects
The Leather Industry holds a prominent place in the Indian economy. This
sector is known for its consistency in high export earnings and it is among
the top ten foreign exchange earners for the country.
With an annual turnover of over US$ 7.5 billion, the export of leather and
leather products increased manifold over the past decades and touched
US$
4.86 billion in 2011-12, recording a cumulative annual growth rate of about
8.22% (5 years).
The Leather industry is bestowed with an affluence of raw materials as
India is endowed with 21% of world cattle & buffalo and 11% of world goat
& sheep population. Added to this are the strengths of skilled manpower,
innovative technology, increasing industry compliance to international
environmental standards, and the dedicated support of the allied
industries.
The leather industry is an employment intensive sector, providing job to
about 2.5 million people, mostly from the weaker sections of the society.
Women employment is predominant in leather products sector with about
30% share.
Though India is the second largest producer of footwear and leather garments in
the world, India accounts for a share of close to 3% in the global leather import
trade of US$ 137.96 billion (2010)
The major production centers for leather and leather products in India are
located in Tamil Nadu - Chennai, Ambur, Ranipet, Vaniyambadi, Vellore,
Pernambut, Trichy, Dindigul and Erode ; West Bengal – Kolkata ; UttarPradesh – Kanpur, Agra, Noida, Saharanpur; Maharashtra – Mumbai ;
Punjab – Jallandhar ; Karnataka – Bangalore ; Andhra Pradesh -
MARKET
Leather Industry – Overview, Export Performance and Prospects
The Leather Industry holds a prominent place in the Indian economy. This
sector is known for its consistency in high export earnings and it is among
the top ten foreign exchange earners for the country.
With an annual turnover of over US$ 7.5 billion, the export of leather and
leather products increased manifold over the past decades and touched
US$
4.86 billion in 2011-12, recording a cumulative annual growth rate of about
8.22% (5 years).
The Leather industry is bestowed with an affluence of raw materials as
India is endowed with 21% of world cattle & buffalo and 11% of world goat
& sheep population. Added to this are the strengths of skilled manpower,
innovative technology, increasing industry compliance to international
environmental standards, and the dedicated support of the allied
industries.
The leather industry is an employment intensive sector, providing job to
about 2.5 million people, mostly from the weaker sections of the society.
Women employment is predominant in leather products sector with about
30% share.
Though India is the second largest producer of footwear and leather garments in
the world, India accounts for a share of close to 3% in the global leather import
trade of US$ 137.96 billion (2010)
The major production centers for leather and leather products in India are
located in Tamil Nadu - Chennai, Ambur, Ranipet, Vaniyambadi, Vellore,
Pernambut, Trichy, Dindigul and Erode ; West Bengal – Kolkata ; UttarPradesh – Kanpur, Agra, Noida, Saharanpur; Maharashtra – Mumbai ;
Punjab – Jallandhar ; Karnataka – Bangalore ; Andhra Pradesh -
MARKET
Leather Industry – Overview, Export Performance and Prospects
The Leather Industry holds a prominent place in the Indian economy. This
sector is known for its consistency in high export earnings and it is among
the top ten foreign exchange earners for the country.
With an annual turnover of over US$ 7.5 billion, the export of leather and
leather products increased manifold over the past decades and touched
US$
4.86 billion in 2011-12, recording a cumulative annual growth rate of about
8.22% (5 years).
The Leather industry is bestowed with an affluence of raw materials as
India is endowed with 21% of world cattle & buffalo and 11% of world goat
& sheep population. Added to this are the strengths of skilled manpower,
innovative technology, increasing industry compliance to international
environmental standards, and the dedicated support of the allied
industries.
The leather industry is an employment intensive sector, providing job to
about 2.5 million people, mostly from the weaker sections of the society.
Women employment is predominant in leather products sector with about
30% share.
Though India is the second largest producer of footwear and leather garments in
the world, India accounts for a share of close to 3% in the global leather import
trade of US$ 137.96 billion (2010)
The major production centers for leather and leather products in India are
located in Tamil Nadu - Chennai, Ambur, Ranipet, Vaniyambadi, Vellore,
Pernambut, Trichy, Dindigul and Erode ; West Bengal – Kolkata ; UttarPradesh – Kanpur, Agra, Noida, Saharanpur; Maharashtra – Mumbai ;
Punjab – Jallandhar ; Karnataka – Bangalore ; Andhra Pradesh -
Hyderabad ; Haryana - Ambala, Gurgaon, Panchkula, Karnal and
Faridabad; Delhi; Madhya Pradesh – Dewas ; Kerala – Calicut and
Ernakulam / Cochin
Strengths of Indian leather sector
Own raw material source – 2 billion sq ft of leather produced
annually Some varieties of goat / calf / sheep skins command
premium position Strong and eco-sustainable tanning baseModernized manufacturing unitsTrained / skilled manpower at competitive wage levelsWorld-class institutional support for Design & Product Development, HRD
and R & D.
Presence of support industries like leather chemicals and finishing
auxiliaries Presence in major markets – Long Europe experience
Strategic location in the Asian landmass
Emerging strengths
Design development initiatives by institutions and
individuals Continuous modernization and technology
upgradation
Economic size of manufacturing unitsConstant human resource development programme to enhance
productivity Increasing use of quality components
Shorter prototype development
time Delivery compliance
Growing domestic market for footwear and leather articles
Highlights of Leather Product Segments:
Tanning Sector – Annual production 2 billion Sq.ft. Accounts for 10% of
world leather requirement. Indian colors continuously being selected at the
MODEUROPE Congress
Footwear Sector - Second largest footwear producer after China. Annual
Production 2065 million pairs. Huge domestic retail market 1950 million
pairs (95%) are sold in domestic market. Footwear export accounts for
45.05% share in India’s total leather & leather products export. The
Own raw material source – 2 billion sq ft of leather produced
annually Some varieties of goat / calf / sheep skins command
premium position Strong and eco-sustainable tanning baseModernized manufacturing unitsTrained / skilled manpower at competitive wage levelsWorld-class institutional support for Design & Product Development, HRD
and R & D.
Presence of support industries like leather chemicals and finishing
auxiliaries Presence in major markets – Long Europe experience
Strategic location in the Asian landmass
Emerging strengths
Design development initiatives by institutions and
individuals Continuous modernization and technology
upgradation
Economic size of manufacturing unitsConstant human resource development programme to enhance
productivity Increasing use of quality components
Shorter prototype development
time Delivery compliance
Growing domestic market for footwear and leather articles
Highlights of Leather Product Segments:
Tanning Sector – Annual production 2 billion Sq.ft. Accounts for 10% of
world leather requirement. Indian colors continuously being selected at the
MODEUROPE Congress
Footwear Sector - Second largest footwear producer after China. Annual
Production 2065 million pairs. Huge domestic retail market 1950 million
pairs (95%) are sold in domestic market. Footwear export accounts for
45.05% share in India’s total leather & leather products export. The
Own raw material source – 2 billion sq ft of leather produced
annually Some varieties of goat / calf / sheep skins command
premium position Strong and eco-sustainable tanning baseModernized manufacturing unitsTrained / skilled manpower at competitive wage levelsWorld-class institutional support for Design & Product Development, HRD
and R & D.
Presence of support industries like leather chemicals and finishing
auxiliaries Presence in major markets – Long Europe experience
Strategic location in the Asian landmass
Emerging strengths
Design development initiatives by institutions and
individuals Continuous modernization and technology
upgradation
Economic size of manufacturing unitsConstant human resource development programme to enhance
productivity Increasing use of quality components
Shorter prototype development
time Delivery compliance
Growing domestic market for footwear and leather articles
Highlights of Leather Product Segments:
Tanning Sector – Annual production 2 billion Sq.ft. Accounts for 10% of
world leather requirement. Indian colors continuously being selected at the
MODEUROPE Congress
Footwear Sector - Second largest footwear producer after China. Annual
Production 2065 million pairs. Huge domestic retail market 1950 million
pairs (95%) are sold in domestic market. Footwear export accounts for
45.05% share in India’s total leather & leather products export. The
Footwear product mix Gents 52%, Ladies 39% and Children 9%
Leather Garments Sector – Second largest producer with annual
production capacity of 16 million pieces. Third largest global exporter.
Accounts for 10.43% share of India’s total leather export
Footwear product mix Gents 52%, Ladies 39% and Children 9%
Leather Garments Sector – Second largest producer with annual
production capacity of 16 million pieces. Third largest global exporter.
Accounts for 10.43% share of India’s total leather export
Footwear product mix Gents 52%, Ladies 39% and Children 9%
Leather Garments Sector – Second largest producer with annual
production capacity of 16 million pieces. Third largest global exporter.
Accounts for 10.43% share of India’s total leather export
Leather Goods & Accessories Sector including Saddlery & Harness -
Fifth largest global exporter. Annual production capacity - 63 million pieces
of leather articles, 52 million pairs of Industrial gloves & 12.50 million
pieces of Harness & Saddlery items. Accounts for 23.44% share of India’s
total export
Product-wise Brands sourced from India:
Footwear Leather Garments Leather Goods /Accessories
Acme, Ann Taylor, Bally, Charter Armani, Zegna, Coach, Liz Claiborne,Club, Clarks, Coach, Colehann, Abercrombie & Fitch, Harrods, Yves St,Daniel Hector, Deichmann, DKNY, Marco Polo, Mango, Laurent, TommyDouble H, Ecco, Elefanten, Colehaan, Andre Hilfiger, Etienne Aigner,Etienneaigner, Florsheim, Gabor, Maarc, Guess Pierre Geoffrey Beene,Geoffrey Beene, Guess, Harrods, Cardin, Tommy Marks & Spencer,Hasley, Hush Puppies, Kenneth Hilfiger, Versace, Guess, Next, PierreCole, Liz Claiborne, Marks & DKNY, Liz Claiborne, Cardin, Prada, GAP,Spencer, Nautica, Next, Nike, Ann Taylor, Nautica, Levis, H & M, BritishCole Haan, Nunn Bush, Pierre Kenneth Cole, Home Stores, BananaCardin, Reebok, Rockport, Charter Club, Daniel Republic, Furla,Salamander, Stacy Adams, Hector American EagleTommy Hilfiger, Tony Lama, Outfitters, Bracciliani,Versace, Yves St. Laurent, Zara, Walmart etc.Johnston & Murphy, Docksteps,Timberland, Armani, Geox,Diesel, Ted Baker, Lacoste,Kickers, Calvin Klein, Sioux,Brasher, Zegna, Massimu Dutti,Buggatti, Lloyd, Christian Dier,Salamander, Camper, Bata,Espirit, French Connection,
Leather Goods & Accessories Sector including Saddlery & Harness -
Fifth largest global exporter. Annual production capacity - 63 million pieces
of leather articles, 52 million pairs of Industrial gloves & 12.50 million
pieces of Harness & Saddlery items. Accounts for 23.44% share of India’s
total export
Product-wise Brands sourced from India:
Footwear Leather Garments Leather Goods /Accessories
Acme, Ann Taylor, Bally, Charter Armani, Zegna, Coach, Liz Claiborne,Club, Clarks, Coach, Colehann, Abercrombie & Fitch, Harrods, Yves St,Daniel Hector, Deichmann, DKNY, Marco Polo, Mango, Laurent, TommyDouble H, Ecco, Elefanten, Colehaan, Andre Hilfiger, Etienne Aigner,Etienneaigner, Florsheim, Gabor, Maarc, Guess Pierre Geoffrey Beene,Geoffrey Beene, Guess, Harrods, Cardin, Tommy Marks & Spencer,Hasley, Hush Puppies, Kenneth Hilfiger, Versace, Guess, Next, PierreCole, Liz Claiborne, Marks & DKNY, Liz Claiborne, Cardin, Prada, GAP,Spencer, Nautica, Next, Nike, Ann Taylor, Nautica, Levis, H & M, BritishCole Haan, Nunn Bush, Pierre Kenneth Cole, Home Stores, BananaCardin, Reebok, Rockport, Charter Club, Daniel Republic, Furla,Salamander, Stacy Adams, Hector American EagleTommy Hilfiger, Tony Lama, Outfitters, Bracciliani,Versace, Yves St. Laurent, Zara, Walmart etc.Johnston & Murphy, Docksteps,Timberland, Armani, Geox,Diesel, Ted Baker, Lacoste,Kickers, Calvin Klein, Sioux,Brasher, Zegna, Massimu Dutti,Buggatti, Lloyd, Christian Dier,Salamander, Camper, Bata,Espirit, French Connection,
Leather Goods & Accessories Sector including Saddlery & Harness -
Fifth largest global exporter. Annual production capacity - 63 million pieces
of leather articles, 52 million pairs of Industrial gloves & 12.50 million
pieces of Harness & Saddlery items. Accounts for 23.44% share of India’s
total export
Product-wise Brands sourced from India:
Footwear Leather Garments Leather Goods /Accessories
Acme, Ann Taylor, Bally, Charter Armani, Zegna, Coach, Liz Claiborne,Club, Clarks, Coach, Colehann, Abercrombie & Fitch, Harrods, Yves St,Daniel Hector, Deichmann, DKNY, Marco Polo, Mango, Laurent, TommyDouble H, Ecco, Elefanten, Colehaan, Andre Hilfiger, Etienne Aigner,Etienneaigner, Florsheim, Gabor, Maarc, Guess Pierre Geoffrey Beene,Geoffrey Beene, Guess, Harrods, Cardin, Tommy Marks & Spencer,Hasley, Hush Puppies, Kenneth Hilfiger, Versace, Guess, Next, PierreCole, Liz Claiborne, Marks & DKNY, Liz Claiborne, Cardin, Prada, GAP,Spencer, Nautica, Next, Nike, Ann Taylor, Nautica, Levis, H & M, BritishCole Haan, Nunn Bush, Pierre Kenneth Cole, Home Stores, BananaCardin, Reebok, Rockport, Charter Club, Daniel Republic, Furla,Salamander, Stacy Adams, Hector American EagleTommy Hilfiger, Tony Lama, Outfitters, Bracciliani,Versace, Yves St. Laurent, Zara, Walmart etc.Johnston & Murphy, Docksteps,Timberland, Armani, Geox,Diesel, Ted Baker, Lacoste,Kickers, Calvin Klein, Sioux,Brasher, Zegna, Massimu Dutti,Buggatti, Lloyd, Christian Dier,Salamander, Camper, Bata,Espirit, French Connection,
Legero, Mercedez, H & M andmany more famous brands
Besides, major brands are sourced from India, MNC brands are sold inIndia and Indian brands sold in India.
MNC Brands Sold in India Indian Brands sold in India
Aldo, Bally, Clarks, Ecco, Florshiem,Ferragammo, Hush Puppies, Lee cooper,Lloyd, Marks & Spencer, Nike, Nine West,New Balance, Reebok, Rockport, StacyAdams, Tod’s, Geox , Louis Vuitton
Red Tape, Bata, Liberty,Khadims, Lakhani, Metro, Action
India’s export of leather and leather products for Five years
(Value in Million$)
2007- 2008- 2009- 2010- 2011-08 09 10 11 12
Finished Leather 807.19 673.37 627.95 841.13 1023.21Footwear 1489.35 1534.32 1507.59 1758.67 2077.27Leather Garments 345.34 426.17 428.62 425.04 572.54Leather Goods 800.46 873.44 757.02 855.78 1088.09Saddlery &Harness 106.18 92.15 83.39 87.92
107.60
Total 3548.51 3599.46 3404.57 3968.54 4868.71% Growth 15.99% 1.44% -5.41% 16.57% 22.68%Source: DGCI&S
% Share of Leather Products in Export Performance (2011-12)
% share of various countries in India’s Leather & Leather ProductsExports (2011-12)
Major Markets:
The major markets for Indian Leather & Leather Products are Germany with a
share of 15.01%, UK 11.15%, Italy 10.85%, USA 9.02%, Hong Kong 7.38%,
France %, Spain 6.08%, Netherlands 4.07%, Belgium 2.32%, China 2.54%,
U.A.E.2.24%, Australia 1.39%, These 12 countries together accounts for nearly
78.30% of India’s total leather& leather products export.
India’s Export of Leather & Leather Products to the European Union touched
US$ 3116.52 mn in 2011-12, accounting for a share of 64.01% in India’s total
leather export trade of US$ 4868.71 mn.
(Value in million USD)
COUNTRY2007-
082008-
092009-
102010-
112011-
12 % Share
Germany 493.34 508.45 491.28 575.38 730.77 15.01%Italy 490.77 461.56 398.56 455.76 528.39 10.85%UK 417.64 413.24 456.59 505.20 542.99 11.15%USA 311.21 359.22 296.37 348.13 439.27 9.02%Hong Kong 280.97 237.72 251.53 325.20 359.51 7.38%Spain 216.07 219.18 219.13 247.99 295.81 6.08%France 198.52 221.33 255.29 280.04 304.23 6.25%Netherlands 134.75 148.77 137.10 155.43 198.29 4.07%U.A.E. 76.23 85.79 69.06 74.27 109.11 2.24%Portugal 56.93 48.17 39.39 39.62 46.55 0.96%Belgium 55.32 54.77 65.39 80.89 113.08 2.32%China 55.46 49.96 48.58 75.48 123.78 2.54%Australia 50.44 55.76 53.92 51.81 67.79 1.39%Denmark 49.58 60.12 55.73 57.75 74.15 1.52%Sweden 38.99 38.03 36.07 31.36 44.29 0.91%Canada 36.92 35.29 27.66 29.32 40.01 0.82%Korea Rep. 29.55 26.17 29.04 31.31 38.22 0.78%South Africa 27.90 22.45 24.60 32.14 41.17 0.85%Switzerland 25.79 26.07 27.10 25.02 33.52 0.69%Austria 25.68 27.22 28.01 27.01 38.43 0.79%Greece 23.57 17.82 12.77 10.05 10.88 0.22%Saudi Arabia 15.96 19.28 21.01 22.14 40.89 0.84%Japan 15.95 20.24 17.19 21.74 33.18 0.68%Russia 15.77 12.01 6.68 19.99 33.05 0.68%Indonesia 15.31 13.45 10.08 20.15 25.16 0.52%Finland 14.39 15.52 9.96 14.57 22.14 0.45%Ireland 8.15 6.44 5.79 5.36 7.56 0.16%New Zealand 5.61 5.46 4.29 5.98 7.29 0.15%Others 361.74 389.97 306.42 399.45 519.20 10.68%Total 3548.51 3599.46 3404.57 3968.54 4868.71 100.00%
Region-wise Export of Leather & Leather Products 2010-11
Future Outlook:
The Government of India had identified the Leather Sector as a Focus Sectorin its Foreign Trade Policy 2004-09 in view of its immense potential for export
growth prospects and employment generation. Accordingly, the Government is
also implementing various Special Focus Initiatives under the Foreign Trade
Policy for the growth of leather sector. With the implementation of various
industrial developmental programmes as well as export promotional activities;
and keeping in view the past performance, and industry’s inherent strengths of
skilled manpower, innovative technology, increasing industry compliance to
international environmental standards, and dedicated support of the allied
industries, the Indian leather industry aims to augment the production, thereby
enhance export, and resultantly create additional employment opportunities for
overall one million people.
Hence, considering the current export trends and the previous growth rates, theexport target in respect of leather & leather products is envisaged to touchUS$ 9 billion mark by the financial year 2014
INSTALLED CAPACITY
Product Installedcapacityper hour
No of workinghours per day
Capacityper day
Capacity perannum300 days perannum
LeatherGarments
25 8 200 60000
PLANT AND MACHINERY
Sl.No Name of the Machinery Qty Value
1. Flat Bed, Lock Stitch Sewing M/c 5 260000
2. Flat Bed Two Thread, Double Needle
Lock Stitch Sewing M/c
4 480000
3. Zig-Zag Stitch Sewing M/c 2 96000
4. Cylinder Bed Lockstich Sewing M/c 2 240000
5. High Speed Single Thread Lock Stitch
Sewing M/c
2 110000
6. Strap Cutting M/c 1 32000
7. Post Bed Lock Stitch Sewing M/c 2 140000
8. High Speed Single Thread Chain Stitch
Sewing Machine
1 55000
9. Button Stitching Sewing, Single Thread 1 65000
10. Hem Turning M/c, Clicking Press 1 47000
11. Skiving Machine 1 68000
12. Clicking Press 1 477000
13. Tools and Equipments 46000
14. Electrification and installation 200000
TOTAL 2316000
MANUFACTURING PROCESS
The manufacturing process in the industry does not involve much complicated
techniques. Leather garments industry is normally based on strict specification of
buyer and country to which items are exported. Due care has to be taken in the
manufacturing garments as follows:
I. The component of the article is to cut from the material as per
specification or keeping in view the quality. This comprises a complete
list of properly evaluated materials both leather and auxiliaries,
components in addition to correct pattern for cutting leather, lining etc.
II. The design evaluation may be conducted in a small batch or trial
production to find out the production difficulties so that these can be
sorted out and timely corrected.
III. The items should be manufactured as per strict design and
specification of the buyer or standards.
IV. Component Specification: This consists of details of materials plus
dimensional stability or tolerance so that the component will fit up or
stand satisfactorily.
V. Process and Production Control: This is an area where control could
be actually implemented. As for materials, Leather lining and
auxiliaries should be tested for tear, stitch tear and tensile strength.
Fastness of colours of Leather has to be tested repeatedly.
Threads: One of the most important requirement in thread is a level of properly
balanced twist, particularly in Garment industry, stitching plays a vital role and
synthetic thread is much stronger than cotton and does not absorb moisture so
readily.
Glue and Cements: Adhesive plays a dominant role in the fabrication of leather
joints is first secured by adhesives and later by means of stitching.
Grindery and Hardware: These are known as metal grindery or hardware and
some of the embellishments and fittings are also grouped in this category.
Zip Fastener: In garment industry zip Fastener plays a key role and oftenly tear
and wear related complaint come from buyers. So the imported fastener may be
sued duly tested by repeated closing and opening method. Finally in the
assembling section, which is mainly concerned with the workmanship is carried
out at each stage. The final inspection takes place before the goods are packed
and sent for stores.
Embellishment: Due care should be taken while doing this job, a small negligence will
damage the whole product.
Raw Material
The Raw materials required for the production at full capacity is given below:
Calculation of Raw Materials Unit Qty Rate Rs Value RsNappa Leather Sft 25 80.00 2000.00Lining Sft 3 75 225.00Zip, Bottons, Threads Adhesives Sft 170.00Embellishment Other accessories 30.00Packing Materials 2255.00
For 60000 garments per annum the total value works out to Rs.1413.00 lakhs
LOCATION LAND AND BUILDING
Built up area-Sq.ft 5000
Rent p.m.-Rs per .12 per 60000
sq.ft
Advance-10 months. Rs 600000
UTILITIES
Power 20 HPI.e 14.92No. Of Working hours 8Per day 119 KwhrsPer annum Rate perunit
35700Rs.6.25
Kwhrs
Power charge per annum Rs.2.23 lakhs
MANPOWER
Category Nos. MonthlyTotal
monthlySalary Salary
Production Manager 1 18000 18000Supervisor 2 10000 20000Assistant 1 7000 7000
60000 Leather Garments per annum
Accountant 1 8000 8000Substaff 3 5000 15000Skilled workers 20 8000 160000Semi skilled 6 7000 42000Unskilled 1 5000 5000Total 35 275000Add Benefits 0.20 55000
330000Annually Rs.lakhs 39.60
SCHEDULE OF IMPLEMENTATION
If the financing arrangements are finalised the project can be
implemented in three months time.
COST OF PRODUCTION AND PROFITABILITY
A cost and profitability statement projected for the first 3 years of
operations is given in Annexure. The profitability is based on the following
assumptions.
Assumptions
Capacity utilisation Year-1-60%
Year-2-70%
Year-3-80%
Selling price Rs.3000.00 per Leather Garment
Raw materials As per the details given above
Packing materials As per details given above
Power Rs.2.23 lakh per annum at 100%
Wages and salaries Rs. 39.60 lakhs with increase 5% every
year.
Repairs and Maintenance Rs.1.20 lakhs per annum
Depreciation Written down value method -15 % on
machinery
Installed capacity
Selling general and
administrative expenses
Rs.12.00 lakh per annum
Interest on Term loan 14% per annum
Interest on working capital 14 % per annum
Income tax 34 % on profits
ADDRESSES OF MACHINERY AND RAW MATERIAL SUPPLIERS
LIST OF MACHINERY SUPPLIERS
1. Juki Machinery ( India) AC-8 (31) 1 st Floor 4 th Avenue
Annanagar
Chennai 600 040
2. K.S.R.Agencies
17/13 First Floor,3. Kattur Sadayappan Street Periamet,
Chennai 600 003
3. Cardinal Industries
No 4/8 Ganapathy Nagar 1st street Ekkatuthangal
Chennai 600 097
5. M/s. Leather Machinery Corporation 11, Harrington
Road,
Chetpet,
Chennai 600 006.
6. M/s. Paul Bros. and Co. 642, Annal Salai, Thousand
Light, Chennai 600 006.
RAW MATERIAL SUPPLIERS
1. M/s. Prototype Dev Training Centre B/24, Guindy Estate,Ekkaduthangar, Chennai 600 009.
2. M/s. Cochin Leathers Pvt. Ltd Industrial Dev. Area,
Edayar, Muppathadam PO, Cochin 683 102.
3. M/s. Twin Star Engineering 2, Thiruneermala Road,
Pammal, Chennai 75.
4. M/s. Atlant Trading PVt Ltd. Atur House, Worli Naka,
Mumbai 400 018.
5. M/s. Valliappa leather Corporation 3/5,
Narayana Chetty Street, Periamet,
Chennai 600 003.
6. M/s. Solar
Atur House,
Worli Naka,
Mumbai 400 018
7. M/s T. Abdul Wahid and Co
26, Vepery High Road, Chennai
600 003.
8. M/s. Chandra’s Chemical Ent Ltd, 5,
Naval Hospital Road,
1st Floor, Periamet,
Chennai 600 003.
9. M/s. Akay Sales Corporation
Office: c-8-346, Ring Road,
Naraina, New Delhi 110028.
10. M/s. Zeb Exports Pvt Ltd
280, Sidappa Lay Out,
Bornmanhalli Post Madivala
Bangalore 560 068.
11. M/s. Jay Cee Enterprises (P) Ltd E-
357, Greater Kailash – II
New Delhi 110048.
FINANCIAL ASPECTS
1. COST OF PROJECT [Rs.lakhs]Building-Rented-Advance 6.00Plant & Machinery 23.16Other Misc.assets 2.00Pre-Operative expenses 3.00Margin for WC 36.47
------70.63------
2. MEANS OF FINANCE
Capital 53.63Term Loan 17.00
------70.63------
3. COST OF PRODUCTION &PROFITABILITY STATEMENTS
Years 1 2 3
Installed Capacity (Nos p.a.) 60000 60000 60000Utilisation 60% 70% 80%Production/Sales (Nos p.a.) 36000 42000 48000
Selling Price Rs.3,000 per Leather garment
Sales Value 1080.00 1260.00 1440.00
Raw Materials 847.80 989.10 1130.40Power 1.34 1.56 1.78Wages & Salaries
39.60 41.58 43.66Repairs & Maintenance 1.20 1.26 1.32Depreciation 4.11 3.51 2.99
Cost of Production 894.05 1037.01 1180.15
Admin, & General expenses 12.00 12.60 13.23
Interest on Term LoanInterest on Working
2.38 2.08 1.49
Capital 22.67 22.67 22.67
Total 931.10 1074.36 1217.54
ProfitBefore Tax 148.90 185.64 222.46Provision fortax 50.63 63.12 75.64ProfitAfter Tax 98.27 122.52 146.82
Add: Depreciation 4.11 3.51 2.99Cash Accruals 102.38 126.03 149.81
4. WORKINGCAPITAL:
Months Values % Margin BankConsumptions Amount Finance
RawMaterialsFinishedgoods
1.00
0.50
70.65
37.25
25%
25%
17.66
9.31
52.99
27.94
Debtors 1.00 90.00 10% 9.00 81.00Expenses 1.00 0.50 100% 0.50 0.00
198.40 36.47 161.93
Say--> Rs.161.90 lakhs
5. PROFITABILITY RATIOS BASED ON 80% UTILISATION
Profit after Tax 146.82
Sales 1440.00
Profit before Interest and Tax 246.62
Total Investment 232.53
Profit after Tax 146.82
Promoters Capital 53.63
6. BREAK EVEN LEVELFixedCost(FC):Wages &
[Rs.lakhs]
Salaries 43.66Repairs & maintenance 1.32Depreciation 2.99Admin. & Generalexpenses 13.23Interest on TL 1.49
62.69Profit Before Tax (P) 222.46
FC x100 62.69 0.80
BEL = 285.15 18% FC +P
4. WORKING CAPITAL:
Months ValuesConsumptions
% MarginAmount
BankFinance
Raw Materials 1.00 51.90 25% 12.98 38.92
Finishedgoods 0.50 27.56 25% 6.89 20.67
Debtors 1.00 75.00 10% 7.50 67.50
Expenses 1.00 0.50 100% 0.50 0.00
154.96 27.87 127.09
Say--> Rs.127.06 lakhs
6. PROFITABILITY RATIOS BASED ON 80% UTILISATION
Profit after Tax 196.08
Sales 1200.00
Profit before Interest and Tax 314.84
Total Investment 190.11
Profit after Tax 196.08
Promoters Capital 47.92
6. BREAK EVEN LEVEL
Fixed Cost (FC):
Wages & [Rs.lakhs]Salaries 36.04Repairs & maintenance 1.32Depreciation 2.67Admin. & Generalexpenses 13.23Interest on TL 1.23
54.49
Profit Before Tax (P) 297.09
FC x100 54.49 0.80
BEL = 351.58 12%FC +P
of installedcapacity