project report (madhur shah)
TRANSCRIPT
-
7/31/2019 Project Report (Madhur Shah)
1/40
1
ANNEXURE - 1
STEEL PROCESSING CENTRE FUTURE OF PROCESSED STEEL
PROJECT REPORT
Submitted in partial fulfillment of the requirements for the award of the
INTERNATIONAL MBA IN LEADERSHIP AND ENTERPRUNERSHIP
By
MADHUR SHAH
UBI/MBA/I/JUL11/6592
Under the guidance of
Ms. Manjushri Shah (B.E. Electronics, MBA) Sr. Manager Secure Metering Ltd
JARO EDUCATION
MUMBAI
April 2012
-
7/31/2019 Project Report (Madhur Shah)
2/40
2
ANNEXURE -2
DECLARATION
I,Mr. Madhur Dhondilal Shah hereby declare that this project report titled STEEL PROCESSING
CENTRE FUTURE OF PROCESSED STEEL submitted in partial fulfillment of the requirement
for the in Specialization name is my original work and it
has not formed the basis for the award of any other degree.
(Signature of the Student)
Madhur Shah
Place: Mumbai
Date: 16th
April 2012
-
7/31/2019 Project Report (Madhur Shah)
3/40
3
ACKNOWLEDGMENT
I sincerely take this opportunity to thank every one involved in completing my
project report STEEL PROCESSING CENTRE FUTURE OF PROCESSED
STEEL. Content of this project report is combined analysis of both theoretical
and practical data. Theoretical data is backed by news and reports published in
weekly / quarterly steel magazines and bulletins. Practical data is gathered from
my own experience of about 8 to 9 years while working in this Industry. I thank all
those institutions / organizations who shared valuable information during these 8
to 9 years that made this project report complete in actual sense.
-
7/31/2019 Project Report (Madhur Shah)
4/40
4
TABLE OF CONTENTS
Sr. No Particulars
1 Steel Industry - Overview
2 Steel Processing India (Preface)
3 Business Outline Steel Processing Centre
4 Salient features Steel Processing Centre
5 Factors In Establishing Steel Processing Centre
6 Activities at Steel Processing Centre
7 Pictorial re-presentation - Slitting process (a) & Shearing process (b)
8 Automotive Steel Processing Centre Entrepreneurs point of view
9 Specimen Project feasibility Costing
10 SWOT Analysis
11 Conclusion
-
7/31/2019 Project Report (Madhur Shah)
5/40
5
(1) STEEL INDUSTRY OVERVIEW
Indias finished steel demand is expected to grow to some 113.3m tones in fiscal
2016-17 a jump of more than 60% from about 70m t for the year ending March
2011. Over the next five years domestic demand would be driven chiefly by
planned massive investments in infrastructure, rising urbanization, growth in
manufacturing and various government initiatives to drive steel usage in rural
areas. The Indian steel industry is currently experiencing a slowdown and faces
grim and gloomy prospects for short-term steel demand. An expected
slowdown in the Indian economy would be further aggravated by the uncertain
global economic environment. Nevertheless, Indias growth is largely driven by
domestic demand rather than being export-led. One of the significant drivers for
increased steel consumption would be Indias plans to invest the equivalent of $1
trillion during 2012-17 in infrastructure. This alone is expected to generate
incremental steel demand of some 40m tones/year. Per capita steel consumption
in India was 51.7 kg in 2010 compared to the world average of 202.7 kg. Indias
rising middle-class population would generate additional demand for
automobiles, white goods and other steel-containing goods. Higher urbanization
would also drive steel usage as per capita steel consumption is only about 10kg
in rural areas.
-
7/31/2019 Project Report (Madhur Shah)
6/40
6
TOP STEEL PRODUCING COUNTRIES
Unit:- Million TonsCountry 2010 2011 % Change
China 638.7 695.5 +8.9
Japan 109.6 107.6 -1.8
USA 80.50 86.2 +7.1
India 68.3 72.2 +5.7
Russia 66.9 68.7 +2.7
S. Korea 58.9 68.5 +16.2
Germany 43.8 44.3 +1.0
Ukraine 33.4 35.3 +5.7
Brazil 32.9 35.2 +6.8
Turkey 29.1 34.1 +17.0
Source:- Steel Business Briefings Edition 24h Jan 2012
India steel demand forecast until 2016-17 (Unit:- Million Tones)
Domestic Demand Imports Exports
2011-2012 66.50 3.50 7.00 3.30
2012-2013 73.30 4.00 6.00 4.00
2013-2014 80.80 4.25 5.50 5.00
2014-2015 89.10 4.50 5.50 6.00
2015-2016 98.30 4.75 5.00 7.00
2016-2017 108.30 5.00 5.00 7.00
Source:- Planning commission report in context of Indias twelfth five-year plan for April 2012-March 2017.
-
7/31/2019 Project Report (Madhur Shah)
7/40
7
India has acquired central Position on Global Steel Map with
Giant Steel Mills
Acquisition of global scale capacities
Continuous modernization & up gradation of Old Plants
Improving Energy Efficiency
Backward Integration into Global raw Material sources
Curd Steel Production in India registered a year-on-year growth of 6.4% in
2010 and will grow at a CAGR of around 10% during 2010-2013.
(Source:- Indian Steel Industry Outlook 2012)
Led by stronger demand for Automobile and Engineering services, pipe
Industry, power, infrastructure, construction Industry, the domestic steel
demand in India remains robust.
(Source:- Moodys sectoral analysis on Asias steel sector)
-
7/31/2019 Project Report (Madhur Shah)
8/40
8
(2) STEEL PROCESSING CENTER INDIA (PREFACE)
Steel Processing activity was highly fragmented and unorganized before 1993.
In 1993, Mahindra & Mahindra in partnership with Mitsubishi Corporation (Japan)
and Nisho Iwai Corporation (Japan) set up first organized steel processing centre
in Maharashtra.
With advent of globalization and entry of global players in business segments like
Automobile, White Goods etc in Indian market, there felt a need of stringent
quality requirements, tight delivery commitments and expectation of professional
service thus making steel processing business more organized. Late 90s and
early 20s witnessed entry of renowned professional players from Far east,
Europe etc investing in organized steel processing centers in India looking at the
growth potential in Indian Industry.
At present, organized steel services centers play a vital role as an ancillary
industry to many business clusters like Automobile, electrical, electronics etc
spread across prominent states like Maharashtra, Gujarat, Karnataka,
Tamilnadu, National Capital region (Delhi NCR) among others..
At the moment, Approximately 300,000 firms buy large portion of their metal
requirements from steel processing centers. It is estimated that in future, Steel
Service Centers will process around 25-30% of Indian steel output as demand
grows for smaller batch and shorter lead time.
-
7/31/2019 Project Report (Madhur Shah)
9/40
9
(3) BUSINESS OUTLINE STEEL PROCESSING CENTER
STEEL MILL OEM / TRADERS
STOCK YARD
STEEL PROCESSING CENTER
RETAIL OUTLET STATION
CUSTOMER
TRADERS
VALUE
ADDITION
-
7/31/2019 Project Report (Madhur Shah)
10/40
10
(4) SALIENT FEATURES - STEEL PROCESSING CENTRE
SUPPLY CHAIN
Steel processing center fill in the service gap between steel producers and
final consumers by providing supply chain management.
VALUE ADDITION
Steel Processing Center is VALUE adding intermediary and the link
between global steel producers and final end user
STOCK AND INVENTORY
Steel processing centre maintain stock and inventory for end users with Just
In Time (JIT) Delivery thus enabling end users to focus on core business
activities
SHORT LEAD TIME
Ability of Steel processing center to provide steel products with shorter lead
time as compared to Steel Mills rolling schedule is added advantage to End
Users as it saves time and cost.
WIDE PRODUCT RANGE
Ability of steel processing center to cater various business verticals with
diverse product portfolio from Branded steel Mills helps to ensure right
product at right place and at right time.
-
7/31/2019 Project Report (Madhur Shah)
11/40
11
LOGISTICS ADVANTAGE
Proximity to customers enables steel processing center to reduce cost on
transportation.
TAILOR MADE PRODUCTS
With improved infrastructure and modern technology, steel processing center
play an active role in supplying tailor made products as per customers design
& requirement, as steel mills prefer to supply in big orders as per their
standard specifications and size mix.
QUALITY CERTIFICATION
Organized steel processing center with ISO certification is very critical in
determining the process & delivery of material to End users. Quality
Certification ensures optimum product quality and customer satisfaction.
PAYMENT AND CREDIT TERMS
Steel processing center can extend relaxed payment and credit terms in local
currency to end clients thereby reducing foreign exchange risk incurred by
end users while dealing directly with global steel mills in foreign currency.
-
7/31/2019 Project Report (Madhur Shah)
12/40
12
(5) FACTORS IN ESTABLISHING STEEL PROCESSING
CENTRE
QUALITY CERTIFICATION: - Is one of the most important criteria for
a successful steel processing center. Quality management system is
designed to help organizations ensure they meet the needs of
customers and other stakeholders
COMMERCIAL & CREDIT TERMS: - Customers and end users prefer
sourcing processed steel from steel processing centre instead of Steel
Mill directly due to better credit facility and foreign exchange risk.
DELIVERY:- Prompt & Just In Time delivery enables steel processing
center to offload work pressure of End Client by controlling their
inventory and keeping overhead cost under control.
-
7/31/2019 Project Report (Madhur Shah)
13/40
13
LEAD TIME - ORDER PROCESSING:- Ability to process orders in
minimum time make steel processing centre first choice of OEM
companies as preferred trade partners for sourcing raw materials.
LOCATION:- Is the most important factor in establishing steel
processing centers. The location should be ideal considering proximity
to end users facility and well connected with Sea ports & industrial
clusters etc...
INFRATRUCTURE & ANIMITIES:- Modern Infrastructure is essential
for establishing a potential steel service center. The establishment
should be well connected with good roads, highways etc.
Uninterrupted electricity supply (If possible should have dedicated Kv
lines from State Electricity Boards), Ample of drinking & industrial
water. Employee quarters (If required), canteen, fist aid medical
services (As it is under industrial category), Social activities for
employees (indoor & outdoor) among others.
-
7/31/2019 Project Report (Madhur Shah)
14/40
-
7/31/2019 Project Report (Madhur Shah)
15/40
15
(6) ACTIVITIES AT STEEL PROCESSING CENTRE
SLITTING: - Is a mechanical process of dividing wide steel mother
coils into customized steel narrow strips with modern equipments.
CUT TO LENGTH: - Process that allows Steel coils to cut steel
sheet into the required length.
SHEARING: - Is a cutting processes in which a piece of sheet
metal is separated by applying a great enough force to cause the
material to fail. The most common cutting processes are performed
by applying a shearing force, and are therefore sometimes referred
to as shearing processes.
PICKLING & OILING:- Metal surface treatment used to remove
impurities, such as stains, inorganic contaminants, rust or scale
from ferrous metals, copper, and aluminum alloys.
-
7/31/2019 Project Report (Madhur Shah)
16/40
16
ROLL FORMING: - is a continuous bending operation in which a
long strip of sheet metal (typically coiled steel) is passed through
sets of rolls mounted on consecutive stands, each set performing
only an incremental part of the bend, until the desired cross-section
profile is obtained. Roll forming is ideal for producing constant-
profile parts with long lengths and in large quantities.
PLATE BURNING: - Include oxy-fuel & plasma burning, straight
line burning, track burning, custom burning & beveling.
Burning is performed using computerized & networked tables,
AutoCAD & Sigma Nest auto-nesting programs. Multitorch
plasma & oxyfuel cutting machines with straight plasma
heads, high definition pneumatic punch marker, &
programmable rotating plasma bevel heads
BENDING:- Is a process that produces a V-shape, U-shape, or
channel shape along a straight axis in ductile materials, most
-
7/31/2019 Project Report (Madhur Shah)
17/40
17
commonly sheet metal.[1] Commonly used equipment include box
and pan brakes, brake presses, and other specialized machine
presses.
BLANKING:- The process of cutting metal coils in the shape
required by customers. The advantage of this process is to allow for
greater finished product savings.
PUNCHING: - Is a metal fabricating process that removes a scrap
slug from the metal workpiece each time a punch enters the
punching die. This process leaves a hole in the metal workpiece.
Characteristics of the punching process include:
o Ability to produce economical holes in both strip and sheet
metal during medium or high production processes
o Ability to produce holes of varying shapes - quickly.
Note:- Pictorial representation of commonly followed Slitting and Shearing
process up to CUT to Length is outlined below. The process for other
functions as above is product specific & case to case basis.
-
7/31/2019 Project Report (Madhur Shah)
18/40
18
(7a) SLITTING PROCESS
UNCOILER
SLITTER KNIFE
SEPERATOR
-
7/31/2019 Project Report (Madhur Shah)
19/40
19
Continued..
SLIT NARROW PACKED
RECOILER
-
7/31/2019 Project Report (Madhur Shah)
20/40
20
(7b) SHEARING PROCESS
UNCOILER
LEVELLER
SHEARING
GUILLOTHINE
SHEARING
CUT TO SIZE
SHEETS
-
7/31/2019 Project Report (Madhur Shah)
21/40
21
(8) AUTOMOTIVE STEEL PROCESING CENTER
(ENTREPRENEURS POINT OF VIEW)
India is emerging as automobile hub for International market after China.
Automakers in India import nearly 75% of high-grade automotive steel for
outer panels of cars and other vehicles. Taking this opportunity, Major
automotive steel manufacturers in Far East have forayed in Indian market to
support Indian automobile industry to tap the growing automobile demand.
Major collaborations / joint ventures to acquire a production base for auto
steel by global steel producers is as below
Nippon Steel, Japan with Tata Steel
JFE Steel, Japan with JSW Steel
Sumitomo Steel, Japan with Bhushan Steel
Arcelor Mittal, Luxembourg with Uttam Steel (For re-rolling)
Biggest ever planned FDI investment in India by Posco Steel Korea.
In a small car, the cost competition is a big factor. Sourcing steel from
domestic steelmakers is cost effective. Moreover, unlike in the Western world,
new steelmaking capacities are being added in India," a sector analyst points
out. However, at 2 to 3 million tonnes (mt), auto steel is likely to remain a
niche segment in quality and quantity, accounting for only a slice of the 50-60
mt planned capacity additions in steel sector by 2014-15
-
7/31/2019 Project Report (Madhur Shah)
22/40
22
INDIAN AUTOMOTIVE INDUSTRY PROJECTIONS.
15.65 %CAGR
-
7/31/2019 Project Report (Madhur Shah)
23/40
23
AUTOMOBILE CLUSTERS IN INDIA
-
7/31/2019 Project Report (Madhur Shah)
24/40
24
(9) SPECIMEN PROJECT FEASIBILITY COSTING
PLANT ECONIMIES
Operations:- Processing of flat steel products (Ex. Plates, Coils etc)
Rated Plant Capacity:- 0.70 MT / Day (210 Tons / Anum)
Number of Working Days:- 25 Days / Month (300 Days / Anum)
No. of Shifts:- 1 per day
Working Hours:- 8 Hours / Shift
LAND AND BUILDING
Particulars Costing
Factory Area (400 Sq. Meter @ Rs. 250 / Sq. Meter)Rs.1,00, 000 /-
Working Shed (150 Sq. Meter @ Rs. 900 / Sq. MeterRs.1,35,000 /-
Godown for raw material and finished products
(60 Sq. Meter @ Rs. 900 / Sq. Meter)Rs.54,000 /-
Administrative Block (20 Sq. Meter @ Rs. 1000 / Sq. Meter)Rs.20,000/-
Boundary Wall Etc..Rs.10,000/-
Total Rs.3,19,000/-
-
7/31/2019 Project Report (Madhur Shah)
25/40
25
PLANT AND MACHINERY
Particulars Costing
Sheet Metal Slitting Machine (1 Nos) Rs.50,000 /-
Sheet Metal Shearing Machine (1 Nos) Rs.50,000 /-
Spare Dies Rs.5,000 /-
Work Bench, Hand Tools, Spanner, Screw Driver,
Weighing Machine etcRs.5,000/-
Total Rs.1,10,000/-
-
7/31/2019 Project Report (Madhur Shah)
26/40
26
OTHER FIXED ASSETS
Particulars Costing
Office equipment, furniture, other equipments accessories Rs.20,000/-
Instillation cost of water, electricity, fuel etc Rs.20,000/-
Total Rs.40,000/-
FIXED CAPITAL
Particulars Costing
Land And Building Rs.3,19,000/-
Plant And Machinery Rs.1,10,000/-
Other Fixed Assets Rs.40,000/-
Total Rs.4,69,000/-
-
7/31/2019 Project Report (Madhur Shah)
27/40
27
WORKING CAPITAL REQUIREMENT PER MONTH
Raw Materials Costing
Flat Steel (Plates, Coils etc.) 18.50 MT @34000 / MT Rs.6,29,000/-
Lubricants and other Consumable Items Rs.500/-
Total Rs.6,29,500/-
SALARY AND WAGES PER MONTH
Particulars Staff Salary
Foreman 1 Nos. Rs.1,400 /-
Skilled Labor 4 Nos. Rs.4, 400/-
Semi Skilled Labor 2 Nos. Rs.2,000/-
Watchman / Peon 1 Nos. Rs.900 /-
Total Rs.8,700/-
Plus Perks @20% / Anum Rs.1,740 /-
Total Rs.10, 440/-
-
7/31/2019 Project Report (Madhur Shah)
28/40
28
UTILITIES AND OVERHEADS
Particulars Costing
Power Consumption of 1000 Kwatt hrs @ Rs. 1.10 per
Kwatt hr.Rs.1,100/-
Water Consumption of 200 KLs @ Rs. 1.00 / KL Rs.2,00/-
Postage, Stationery & Telephone Rs.500/-
Miscellaneous Rs.500/-
Total Rs.2,300/-
TOTAL WORKING CAPITAL / MONTH
Particulars Costing
Raw Material Rs.6,29,500/-
Salary & Wages Rs.10,440/-
Utilities & Overheads Rs.2,300/-
Total Rs.6,42,240/-
a. Working capital for 3 months Rs.1,926,720/-
b. Margin money for working capital for Loan Rs.4,81,680/-
-
7/31/2019 Project Report (Madhur Shah)
29/40
29
COST OF PROJECT
Particulars Costing
Total Fixed Capital Rs.4,69,000/-
Margin Money Rs.4,81,680/-
Total Rs.950,680/-
TOTAL CAPITAL INVESTMENT
Particulars Costing
Total fixed capital Rs.4,69,000/-
Total Working Capital for 3 months Rs.1,926,720/-
Total Rs.2,395,720/-
-
7/31/2019 Project Report (Madhur Shah)
30/40
30
COST OF PRODUCTION / ANUM
Particulars Costing
Working Capital for 1 year Rs.7,706,880.00/-
Interest @16.5% on T.C.I (Total Capital Investment) Rs.395,293.80/-
Depreciation @ 6.50% on Buildings Rs.14,235.00/-
Depreciation @33.33% on Plant and Machinery Rs.36,663.00/-
Depreciation @20% on office equipment & furniture Rs.4,000.00/-
Total Rs.8,157,071.80/-
TURN OVER PER ANUM
Particulars Costing
By sale of 210 Tons of processed flat products (Various
Sizes @ Rs. 42,000 / TonRs.88,20,000/-
By sale of steel scrap of 21 Tons @ Rs. 9,000 / Ton Rs.1,89,000/-
Total Rs.9,009,000/-
-
7/31/2019 Project Report (Madhur Shah)
31/40
31
PROFIT (RECEIPTS - COST OF PRODUCTION)
Particulars Costing
Receipts Rs.9,009,000/-
(Less) Cost of Production Rs.8,157,071.80/-
Profit Rs.851,928.20/-
PROFIT SALES RATIO (PROFIT / SALES X 100)
Particulars Costing
Profit Rs.851,928.20/-
Sales Rs.9,009,000/-
Profit 9.46%
-
7/31/2019 Project Report (Madhur Shah)
32/40
32
RATE OF RETURN ( OPERATING PROFIT / TOTAL CAPITAL
INVESTED X100)
Particulars Costing
Operating Profit Rs.851,928.20/-
Total Capital Invested Rs.2,395,720/-
Rate of return 35.56%
FIXED COSTS FOR BREAK EVEN POINT (B.E.P)
Particulars Costing
Interests Rs.395,293.80 /-
Depreciation Rs,54,898/-
40% of Salaries Rs.4,176 /-
40% of Overheads Rs.920/-
Total Rs.455,287.80/-
-
7/31/2019 Project Report (Madhur Shah)
33/40
33
BREAK EVEN POINT
FIXED COST
B.E.P = --------------------------------------- X 100
FIXED COST + PROFIT
Particulars Costing
Fixed Cost Rs.455,287.80/-
Fixed Cost + Profit Rs.1,307,216/-
Rate of return 34.83%
LAND MAN RATIO (TOTAL LAND / MANPOWER)
400 : 9 :: 44 : 1
-
7/31/2019 Project Report (Madhur Shah)
34/40
34
RESOURCES OF FINANCE
Particulars Costing
Term Loans from Financial institutions (80% of fixed
capital) @14% Rate of Interest per anumRs.375,200/-
Bank Loan for 3 months (75% of working Capital)
@18% rate of interest per anum.Rs.1,445,040/-
Self raised capital from even funds & loans from closed
ones to meet the margin money needs @ 20% rate of
interest per anum
Rs.575,480/-
Total Rs.2,395,720/-
INSTALLMENT PAYABLE IN 5 YEARS
YearFinancial
InstitutionsCommercial
BanksOthers Total
1 Rs.75,040 Rs.289,008 Rs.115,096 Rs.479,144
2 Rs.75,040 Rs.289,008 Rs.115,096 Rs.479,144
3 Rs.75,040 Rs.289,008 Rs.115,096 Rs.479,144
4 Rs.75,040 Rs.289,008 Rs.115,096 Rs.479,144
5 Rs.75,040 Rs.289,008 Rs.115,096 Rs.479,144
-
7/31/2019 Project Report (Madhur Shah)
35/40
35
INTEREST PAYABLE IN 5 YEARS
YearTerm Loans@14% P.A
Comm. Banks @ 18%P.A
Others @ 20%P.A
Total
1 Rs.52,528 Rs.260,107 Rs.115,096 Rs.427,731
2 Rs.42,022 Rs.208,086 Rs.92,077 Rs.342,185
3 Rs.31,517 Rs.156,064 Rs.69,058 Rs.256,639
4 Rs.21,011 Rs.104,043 Rs.46,038 Rs.171,092
5 Rs.10,506 Rs.52,021 Rs.23,019 Rs.85,546
TOTAL REPAYMENT SCHEDULE FOR 5 YEARS
Year Interests Installments Total
1 Rs.427,731 Rs.479,144 Rs.906,875
2 Rs.342,185 Rs.479,144 Rs.821,329
3 Rs.256,639 Rs.479,144 Rs.735,783
4 Rs.171,092 Rs.479,144 Rs.650,236
5 Rs.85,546 Rs.479,144 Rs.564,690
-
7/31/2019 Project Report (Madhur Shah)
36/40
36
DEPRECIATION CHART FOR 5 YEARS
Year
Building Cost
(@6.50% P.A)
Plant & Machinery (@
33.33% P.A)
Fur. & Office Eqp
(@20% P.A) Total
1 Rs.14,235 Rs.36,663 Rs.4,000 Rs.54,898
2 Rs.13,310 Rs.24,443 Rs.3,200 Rs.40,953
3 Rs.12,445 Rs.16,296 Rs.2,560 Rs.31,301
4 Rs.11,636 Rs.10,865 Rs.2,048 Rs.24,548
5 Rs.10,879 Rs.7,244 Rs.1,638 Rs.19,761
PROFIT ANALYSIS FOR 5 YEARS (Currency Rupee)
YrCapacity
UtilizationSales Mfg. Exp.
Gross
ProfitDepreciation Interest NPBT
Tax
35.85%NP
1 70% 6,306,300 5,394,816 911,484 13,833 59,882 837,769 300,340 53
2 80% 7,207,200 6,165,504 1,041,696 15,809 68,437 957,450 343,246 61
3 80% 7,207,200 6,165,504 1,041,696 15,809 68,437 957,450 343,246 61
4 90% 8,108,100 6,936,192 1,171,908 17,785 76,992 1,077,131 386,152 69
5 100% 9,009,000 7,706,880 1,302,120 19,761 85,546 1,196,812 429,057 76
-
7/31/2019 Project Report (Madhur Shah)
37/40
37
CASH FLOW STATEMENT FOR 5 YEARS
YrCapacity
UtilizationNet Profit(After Tax)
DepreciationCash inHand
Repay ofinstallment
NetSurplus
1 70% Rs.537,429 Rs.54,898 Rs.592,327 Rs.369,135 Rs.223,192
2 80% Rs.614,204 Rs.40,953 Rs.655,157 Rs.369,135 Rs.286,022
3 80% Rs.614,204 Rs.31,301 Rs.645,505 Rs.369,135 Rs.276,370
4 90% Rs.690,980 Rs.24,548 Rs.715,528 Rs.369,135 Rs.346,393
5 100% Rs.767,755 Rs.19,761 Rs.787,516 Rs.369,135 Rs.418,382
PROJECTED BALANCE SHEET FOR 5 YEARS (Currency Rupee)
Construction Period
Liabilities1 year(70% Cap
Util)
2 year(80% Cap
Util)
3 year(80% Cap
Util)
4 year(90% Cap.
Util)
5 Year(100% Cap.
Util))
Promoter's Capital 575,480 575,480 798,672 1,084,694 1,361,064 1,707,457
Net Surplus 0 223,192 286,022 276,370 346,393 418,382
Term Loans 375,200 300,160 225,120 150,080 75,040 0
W/C Loans 1,445,040 1,156,032 867,024 578,016 289,008 0
Total 2,395,720 2,254,864 2,176,838 2,089,160 2,071,505 2,125,839
-
7/31/2019 Project Report (Madhur Shah)
38/40
38
Assets1 year(70% CapUtil)
2 year(80% CapUtil)
3 year(80% CapUtil)
4 year(90% Cap.Util)
5 Year(100% Cap.Util))
1. W.D.V of FixedAssets
349,000 294,102 253,149 221,848 197,300 177,539
2. Working capital instock
0 1,348,704 1,541,376 1,541,376 1,734,048 1,926,720
3. Surplus funds 2,046,720 612,058 382,313 325,936 140,157 21,580
Total 2,395,720 2,254,864 2,176,838 2,089,160 2,071,505 2,125,839
-
7/31/2019 Project Report (Madhur Shah)
39/40
39
(10) SWOT ANALYSIS
Strength
Just in time Delivery
Customized steel processing
Inventory Control
Diverse product portfolio
Value addition
Weakness
Unstable sourcing of raw material
No or limited control on pricing
High operational cost
Long cash conversion cycle
Capital intensive Industry
Opportunity
Growing Industrial clusters
Introduce modern technology
Increase in foreign exchange
Vast export market.
Threats
Limited modern infrastructure
Complex government policies
Inadequate productive resources
Rigid approval process with Clients
-
7/31/2019 Project Report (Madhur Shah)
40/40
(11) CONCLUSION
In recent times steel processing business has gained momentum as ancillary
Industry for Industrial clusters (like Automobile, Electrical hubs Etc). Ability to
provide quality processed steel at Just in Time delivery from various sources
remains the key success factor for this business.
Renowned Multinational steel trading giants from Far East and Europe are
looking at India as attractive destination for setting up steel processing centers.
1) Mahindra Inter Trade (In JV between Mahindra and Nippon steel Japan)
2) POSCO IPCC (100% Subsidiary of POSCO Korea)
3) POS Hyundai (JV between POSCO & Hyundai (Korea)
4) Thyssen India German company (For stampings)
5) Tata Steel processing & Distribution Limited
6) JSWs recent tie up with Marubeni Itochu to set up steel processing centre
7) JFE Shoji (Japanese Steel Trading Company)
It is very important for a Prospective Entrepreneur to deeply analyze market
potential and fine tune the project costing to set-up steel processing centre
before making investment plans.