Portfolio Bag
| Product Code | 293999007/293101000 |
| Quality and Standards | As Per Buyer's Specification |
| Production Capacity | Qty. 36000 Pieces (per annum) Value: Rs. 22080000 |
| Uploaded on | April 2007 |
Introduction
Portfolio bags made of leather are used generally by office goers as well as by business people to carry papers, pen, pencils, tiffin box and personal belongings etc. These types of bags are also widely used by medical representatives because they need to keep a large number of samples of medicines.
Portfolio bags are made of vegetable tanned leather/semi-chrome leather. All the machines and raw materials used for its manufacture are easily available from indigenous sources and not much technology is involved in manufacturing.
Market Potential
The scope of manufacturing this item is increasing due to the growing demand of Portfolio bags in cities from the increasing number of consumers. Hence, the market of portfolio bags required by the office-goers and travellers is very bright. Portfolio bags industry is located mainly in Kolkata, Mumbai, Delhi, Chennai, Kanpur and Bangalore. The item has demand not only in India but also abroad. India is exporting portfolio bags and similar types of items to Bangladesh, Nepal, Middle East, Germany, Canada etc.
Basis and Presumptions
- The production is based on double shift basis of 16 hours per day and 25 working days in a month i.e. 300 working days in a year.
- The unit is expected at 60% efficiency in the first year and 90% efficiency will be achieved within 3-4 years.
- Time period for achieving envisaged capacity utilization is 3 months after trial run.
- Interest rate is calculated @ 12% per annum on average.
- Payback period is 4-5 years.
- Labour will be engaged on monthly basis, which is more than the minimum wage declared by the State Govts.
Considering the product and usage, the project can work for more than 20 years.
Land & Building Own
Implementation Schedule
Activity |
Period (in month) |
| Registration and other formalities | 1 |
| Acquisition of land and shed | 3 |
| Arrangement of electricity and water supply | 2 |
| Machinery purchasing and installation | 4 |
| Trial Production | 1 |
| Total | 11 |
Technical Aspects
Process of Manufacture
These articles are manufactured by different methods. However, the main operations are
- Pattern cutting
- Economical layout of pattern
- Clicking of components
- Skiving
- Colouring of edges
- Assembling
- Stitching
- Fitting
- Cleaning and finishing.
The components are cut as per the patterns of various sizes and designs, from the leather by hand after duly checking of the leather keeping in view holes and flaying cuts. The components are then stitched after skiving, wherever necessary. After completion of stitching, handle is fixed and stitched on the central portion of the bag. Zips, buckles, rivets and other fittings are attached. The bags are cleaned, polished, finished and packed.
Quality Control and Standards
Specific standards are to be followed as mutually agreed upon between the manufacturers and the buyers. In case of export, rigid quality control is to be maintained. The quality of product depends upon the purchase of right raw material, grinderies and strict supervision. Final inspection is a must before packing.
Production Capacity
Quantity |
Rate |
Value (Rs.) |
|
| Portfolio Bag (1st Quality) | 16000 Pieces | 680 | 10880000 |
| Portfolio Bag (2nd Quality) | 20000 Pieces | 560 | 11200000 |
| Total | 22080000 | ||
| Motive Power | 5 HP. |
Pollution Control
These types of leather goods industries do not pollute. Hence, no arrangement is necessary to check the pollution.
Energy Conservation
Energy conservation in this type of unit is on the lower side since low power motors are used in the production line. The staff of the unit should be made aware of the need to conserve energy by switching off the energy sources when not required.
Financial Aspects
Fixed Capital
| Land and Building | |
| Land 300 sq. mtr @ Rs 5000/- per sq.mtr | 1500000 |
| Office building, Lab. Store 100sq.mtr. @ 7000/mtr. | 700000 |
| Floor area construction ,factory shed, Boundary wall etc. 200 sq.mtr. @ Rs 5000/per sqmt | 1000000 |
| Total | 3200000 |
Machinery and Equipments
Description |
Total H P |
Imp./ Ind. |
Qty. |
Rate |
Amount (Rs.) |
| Flat-bed Stitching machine | 1 | Ind. | 2 | 15000 | 30000 |
| Cylinder-bed stitching machine | 0.5 | Imp. | 1 | 160000 | 160000 |
| Skiving machine | 0.5 | Ind. | 1 | 70000 | 70000 |
| Splitting machine | 1 | Ind. | 1 | 280000 | 280000 |
| Punching machine | 0.5 | Ind. | 1 | 30000 | 30000 |
| Roughing, Buffing and Polishing machine | 0.5 | Ind. | 1 | 30000 | 30000 |
| Cutting table for components | 2 | 10000 | 20000 | ||
| Tools and Equipments | L.S. | 80000 | |||
| Office equipment and furniture, | L.S. | 100000 | |||
| Taxes , Erection Electrification and Installation charges @ 40% upto Sl. No. 6 |
240000 | ||||
| Total | 1040000 | ||||
| Pre-operative Expenses | 50000 |
| Total Fixed Capital | 4290000 |
B. Working Capital (per month)
(i) Personnel (per month)
Designation |
No. |
Salary (Rs.) |
Total (Rs.) |
| Manager | 1 | 17000 | 17000 |
| Supervisor | 1 | 8000 | 8000 |
| Cashier-cum-Accountant | 1 | 6,000 | 6,000 |
| Store keeper-cum-typist | 1 | 4500 | 4500 |
| Master Cutter | 2 | 7000 | 14000 |
| Machine Operators | 10 | 6000 | 6000 |
| Skilled Worker | 4 | 6000 | 24000 |
| Semi-skilled worker | 4 | 4000 | 16000 |
| Helper | 4 | 3000 | 12000 |
| Peon | 1 | 3000 | 3000 |
| Watchman | 1 | 3000 | 3000 |
| Sweeper | 1 | 3000 | 3000 |
| Total | 170500 | ||
| Add. 22% perquisites | 37510 | ||
| Total | 208010 | ||
(ii) Raw Materials 3000 Nos. Portfolio Bag.
Description |
Qty. |
Unit |
Rate |
Value (Rs.) |
| V.T. finished leather/Semi-chrome leather-brown/coffee brown/black colour (1.2 mm to 1.5 mm) | 3600 | Kg. (Approx.) | 250 | 900000 |
| Grinderies, Lock, D-ring, Zip, rivets, adhesive, thread etc.) | L.S.(3000 pieces) | 100 | 300000 | |
| Packing | L.S. | 6 per piece | 18000 | |
| Total | 1218000 | |||
(iii) Utilities (per month)
Amount (Rs.) |
|
| Power requirement including lighting, fan etc. | 15000 |
| Total | 15000 |
(iv) Other Contingent Expenses (per month)
Description |
Amount (Rs.) |
| Postage and Stationery | 4000 |
| Telephone | 5000 |
| Consumable stores | 10000 |
| Repair and Maintenance | 10000 |
| Transport charges | 15000 |
| Advertisement and publicity | 20000 |
| Insurance | 6000 |
| Sales & Marketing Expenses | 20000 |
| Misc. Expenses | 10000 |
| Total | 100000 |
(v) Total Recurring Expenditure (per month)
Description |
Amount (Rs.) |
| Salary and Wages | 208010 |
| Raw Materials | 1218000 |
| Utilities | 15000 |
| Other contingent expenses | 100000 |
| Total | 1541010 |
vi) Working Capital for 1.5 months
| Rs. 1541010 X 1.5 = | 2311515 |
C. Total Capital Investment
| Total Fixed Capital | 4290000 |
| Working capital for 1.5 months | 2311515 |
| Total | 6601515 |
Machinery Utilisation
Initially there will be 50% utilization of major machines which will increase thereafter @ 10% per year and consequently 90% utilization will be achieved in course of time, say, between 4-5 years.
Financial Analysis
Cost of Production (per annum) |
Amount (Rs.) |
| Total recurring cost | 18492120 |
| Depreciation on machinery @ 10% including installation charges | 86000 |
| Depreciation on tools and equipment @ 25% | 20000 |
| Depreciation on office equipment and furniture @ 20% | 20000 |
| Depreciation on building @ 5% | 160000 |
| Interest on Total Capital Investment @ 12% | 792182 |
| Total | 19570302 |
Turnover (per annum)
Items |
Qty. in No. |
Rate/piece |
Price (Rs.) |
| Portfolio bags 1st quality | 16000. | 680 | 10880000 |
| Portfolio bags 2nd quality | 20000 | 560 | 11200000 |
| Total | 22080000 | ||
Net Profit (per year) (before Income Tax)
| Turnover | 22080000 |
| Cost of Production | 19570302 |
| Total | 2509698 |
Net Profit Ratio
Net Profit per year x 100 Turnover per year |
|
| 2509698 x 100 | |
| 22080000 | |
| 11.37 |
Rate of Return on Total Investment
Net Profit per year x 100 Total Investment |
|
| 2509698 x 100 | |
| 6601515 | |
| 38.02 |
Break-even Point
Fixed Cost
Description |
Amount (Rs.) |
| Depreciation on machinery @ 10% including installation charges | 86000 |
| Depreciation on tools and equipment @ 25% | 20000 |
| Depreciation on office equipment and furniture @ 20% | 20000 |
| Depreciation on building @ 5% | 160000 |
| Interest on Total Capital investment @ 12% | 792182 |
| Insurance | 72000 |
| 40% of salary and wages | 998448 |
| 40% of utilities | 72000 |
| 40% of other Contingent expenses (Excluding insurance) | 451200 |
| Total | 2671830 |
| B.E.P | Fixed cost x Profit ---------------------------- Fixed cost + Profit |
| 2671830 x 100 | |
| 2671830 + 2509698 | |
| 51.56 |
Additional Information
With the same plant and machinery, it is possible to manufacture different types of leather goods namely industrial hand gloves, suitcases, briefcases, bags etc.
Addresses of Machinery and Equipment Suppliers
- M/s. Benson Industries,
96, Shri Aurobindo Road,
Salkia, Howrah.
- M/s. Bengal Machinery Co. (P) Ltd.
9-A, New Tangra Road,
Kolkata-700 046. - M/s. PTDC (Under NSIC)
Industrial Estate,
Ekkaduthangal,
Chennai-97. - M/s. Bharat Sales Agency
Gesham Assurance House,
3rd Floor, Sir P.M. Road,
Mumbai-1. - M/s. Leather and Packaging
Machinery Corpn.,
1/23-B, Asaf Ali Road,
New Delhi-110001.
Raw Material Suppliers
- M/s. Modern Leather Stores
1, Biddhan Sarani,
Kolkata-700 012.
(Misc. Items) - M/s. Vallappa Leather Corporation
Narayana Chetty Street,
Periamet,
Chennai-1.
(Misc. Items) - M/s. Asia Tannery (P) Ltd.
1/A, Jazmau,
Kanpur.
(Leather only) - M/s. Zaz Tannery
150, Feet Road,
Jazmau,
Kanpur.
(Leather only) - M/s. Kazi Khilafat Hussain and Co.
Lower Chitpur Road,
Kolkata-700 001.
(Leather only) - M/s. T.A. Abdul Wahid and Co.
26, Vepery High Road,
Chennai-600 003.
(Leather only)
For further information please contact
Information Manager
TIMEIS Project
E-mail: timeis@ficci.com
