Leather Chappals

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Product Code N.A.
Quality and Standards As per Buyers requirement.
Production Capacity Qty. : 90,000 Pair chappals (per annum) of Rs 22500000
Uploaded on March 2007


Since time immemorial man has been using footwear of different kinds to protect feet from the extremities of weather and external injuries. In addition to functional utility chappal has also become an item of fashion and also forms a part of dress. Today chappals are used by simple villagers, farmers, common people of urban areas and also by the rich people. To cope with the requirement of different users chappals are made of different type of materials.

Market Potential

Leather Chappals are being used by the people from all categories due to their low cost in comparison to the closed shoes. These Chappals are very much in demand by ladies, gents and children because of the climatic conditions and high temperature prevailing in most of the parts of our country. The demand of such Chappals is increasing rapidly due to the increase in population every year. Apart from this, the increase in demand is also due to the fashion consciousness created among young generation as most of the youth have started using Chappals as a part of their dress.

Since the demand of Gents/Ladies Chappals is increasing day by day, the demand of Leather straps is automatically increasing not only for new Chappals but for replacement market also.

Basis and Presumptions

  • The basis of production is based on double shift, where shift duration is of 8 hours a day and 300 working days in a year.
  • The salary and wages for the personnel/labour are based on the prevailing pattern in the leather industry. and Minimum Wages Act.
  • Interest rate is calculated @ 12% per annum on total investment on total capital investment.
  • Land and Building own.
  • Power tariff @ Rs. 4.5 unit.

Implementation Schedule


Period (in month)

Selection of site 1
Registration of SSI from DIC 1
Sanction of loan from financial Institutions 2
Procurement of machinery 1
Electrification and Installation of machine 1
Trial production and procuring confirm orders 1
Total 7

Technical Aspects

Process of Manufacture

As per the graded patterns of various sizes of both upper and bottom, the components are cut. The edges of cut components are skived and stitched. After the completion of stitching operation, decorative treatment on the upper such as punching, fixing of buttons, metal fittings etc. is done either by hand or machine. The straps of the upper are inserted in the slots of the insoles. The inserted portion of the straps and its corresponding portion in the flesh side of the insole are roughened and cemented. Finally the flesh sides of both the insole and bottom sole are roughened and the adhesive is applied. The cemented soles and insole are stuck and pressed in Cementing press to make the bond permanent.

The next operation is finishing in which the edges of sole and heel are trimmed, inked and set on the machine or by hand. The upper is cleaned and dressed before packing into boxes.

Quality Control and Standards

Standard product as per ISI specification.

  • IS 578:1964 for Upper leather.
  • IS 5867:1979 for leather board.
  • IS 1741:1960 for synthetic rubber sheet.
  • IS 4663:1968 for adhesive.

Production Capacity

The unit is proposed to produce 90,000 pairs Chappals in a year.

Motive Power 6 H.P.

Pollution Control

This industry does not come under the category of polluting industry.

Financial Aspects

Fixed Capital

Land and Building
Land 3000 sq. ft. @ Rs. 500 per sq. ft including registration 1500000
Total built-up area 2000 sq. ft. @ Rs 1000 per sq ft 2000000
Water System (including Bore Well + over head tank etc) 100000
Total civil cost= cost of land + building 3600000

Machinery and Equipments




Rate (Rs.)

Amount (Rs.)

Strap Cutting Machine 300 mm hand operated 2   20000 40000
Upper Sewing machine Power operated 2 2 15000 30000
Sole Cementing press, 4 bed operated with Air Compressor with Motor 1 1 40000 40000
Double ended buffing machine with exhaust motor 1 1 20000 20000
Trade mark embossing machine with heating device 1   15000 15000
Taxes, Electrification and installation of machine @ 40% on cost of machine       58000
Wooden Cast pairs 150     30000
Tools and Equipments       30000
Cost of office equipments and furniture       100000
Total       363000
Pre-operative Expenses 40000
Total Fixed Capital 4003000

B. Working Capital (per month)

(i) Personnel/Technical (per month)



Salary (Rs.)

Total (Rs.)

Manager (Self) 1 20000 20000
Designer-cum-Supervisor 1 10000 10000
Skilled Worker 10 7000 70000
Machine Operator 10 7000 70000
Semi Skilled Worker 10 5000 50000
Un-skilled Worker 15 3000 45000
Accountant-cum-Store Keeper 1 7000 7000
Clerk-Cum-Typist 1 4000 4000
Watchman 1 3000 3000
Sweeper 2 3000 6000
Total 285000
Add perquisites @ 22% on Salary 62700
Total 347700

(ii) Raw Materials 3000 Nos. Portfolio Bag.





Value (Rs.)

Upper leather @ 1.5 Sq.ft./pair 11250 Sq.ft 40 450000
Lining Leather @ 1 Sq.ft./pair 7500 Sq.ft 40 300000
Insole 7500 pair 18 135000
Sole and heels (Rubber) 7500 pair 20 150000
Grinderies 7500 pair 10 75000
Packing materials 7500 pair 8 60000
Total   1170000

(iii) Utilities (per month)


Amount (Rs.)

Power 10000
Total 10000

(iv) Other Contingent Expenses (per month)


Amount (Rs.)

Postage and Stationery 10000
Repair and Maintenance 15000
Transportation 20000
Telephone 10000
Sales Expenses 20000
Consumable stores 15000
Other contingent Expenses 10000
Total 100000

(v) Total Recurring Expenditure (per month)


Amount (Rs.)

Raw Materials 1170000
Staff and Labour 347700
Utilities 10000
Other contingent expenses 100000
Total 1627700

vi) Working Capital for 1.5 months

1627700 x 1.5 2441550

C. Total Capital Investment

Fixed Capital 4003000
Working capital 1627700
Total 5630700

Financial Analysis

Cost of Production (per annum)

Amount (Rs.)

Total recurring cost 19532400
Depreciation on Building @ 5 % 180000
Depreciation on machinery @ 10% 20300
Depreciation on tools and last @ 25% 15000
Depreciation on office equipment @ 20% 20000
Interest on Total Capital Investment @ 12% 675684
Total 20443384

Turnover (per year)


Qty.in pairs

Rate (Rs.)/pair

Amount (Rs.)

Leather Chappals 90,000 250 22500000
Total 22500000

Net Profit (per year)


Total Sales -Cost of Production

  22500000 - 20443384
  = 2056616

Net Profit Ratio


Net Profit per year x 100

Turnover per year

  2056616 x 100

Rate of Return on Total Investment


Net Profit per year x 100

Turnover per year

  2056616 x 100

Break-even Point

Fixed Cost


Amount (Rs.)

Depreciation on Building 180000
Depreciation on machinery @ 10% 20300
Depreciation on tools and last @ 25% 15000
Depreciation on office equipment @ 20% 20000
Interest on Total Capital Investment @ 12% 675684
40% on Salary of Staff and Labour 1668960
40% on Utilities and Others Contingent expenses 528000
Total 3107944
B.E.P Fixed cost x Profit
Fixed cost + Net Profit
  3107944x 100
  3107944 + 2056616

Addresses of Machinery and Equipment Suppliers

  • M/s. Peelu Sales Corporation,
    6/38, Galib Pura Kalan,
    Nai Ki Mandi,
  • M/s. Prototype Development and Training Centre,
    B-24, Guindy Industrial Estate,
    P.O. Ekkaduthangal,
    Chennai-600 097.
  • M/s. Masa Engineering (India),
    4/H/4, Rifle Range Road,
    Kolkata - 700 017.
  • M/s. Industrial Machines (Delhi) Pvt. Ltd.
    1/23-B, Asaf Ali Road,
    New Delhi-110002.
  • M/s. S.P. Engineering Works
    Dayal Bagh Road, New Agra,
    Agra-282 005.

Raw Material Suppliers

Raw material required for the production can be procured locally.

For further information please contact

Information Manager
TIMEIS Project
E-mail: timeis@ficci.com