Leather Sandal with P.U. Sole

Product Code	2913
Quality and Standards	There are no BIS standards for all raw materials and grinderies. However, IS 6493:1971 may
Production Capacity	Qty. 72000 pairs (per annum) Value : Rs. 27360000
Uploaded on	March 2007

Introduction

Leather Sandals and Chappals in different designs and forms are made of leather which is a natural protective material for the foot. The purpose of using sandals is mainly to protect the feet from injury, thorn, insects, heat and cold. With the rapid increase of population and civilization more and more people are using footwear. It may be either chappal or sandal or shoe.

The term footwear covers mainly

• Chappal
• Sandal
• Shoe and
• Boot

The project profile deals with sandals with top made of upper leather and the bottom made of PU sole, which are available in the market readily. PU sole, being more durable, will eliminate a number of operations.

Market Potential

Footwear in India is manufactured in cottage, small and large units. About 90% of the total output of footwear is made by cottage and small-scale sector.

Sandals are in more demand from the countries, which have moderate climate or hot climate. Sandals will be more useful than the chappal in populous cities like Kolkata, Mumbai, Delhi, Chennai, Bangalore and many other cities/towns because due to buckle/strap sandals will not come out of feet as the chappal does in a crowded bus or train. Hence from the utility point of view the sandals have also very good market in our country as well as abroad where climate is not cold.

Basis and Presumptions

• Efficiency and working Hours: 240 pairs of Gents sandal with leather upper and P.U. sole per day on double shift basis, where single shift is of 8 hours and 25 working days in a month. Or, 72,000 pairs of sandal/year.
• Time period for achieving full/envisaged capacity utilisation: The project may take 12 months to achieve the full capacity utilisation.
• Labour wages: On monthly basis including perquisites.(at prevailing rates of market)
  
• Interest rate: Assumed at 12% per year on capital investment.
  
• Margin money: The entrepreneurs share is 20-25% of the capital.
• Operative period of the project: 10-15 years
• Land and Construction Cost: Own
• Moratorium Period: 3-5 years.

Implementation Schedule

Activity	Period (in month)
Registration and other formalities	1
Allotment of shed	2
Machinery procurement and installation	3
Recruitment of personnel	1
Arrangement of electric supply	3
Trial production	1
Commercial production	1
Total	12

Technical Aspects

Process of Manufacture

The upper components i.e. leather straps, split lining leather for outside straps and inside straps are cut. The straps are skived wherever necessary and pasted with latex or rubber solution. The front straps, which are having selflining, are folded and stitched. The outside and inside straps are pasted and nicked at the deep carved portion to facilitate folding. The split linings are pasted and attached with the outside and inside straps. The buckle holder pieces are also cut and buckles are fixed. The buckle holder piece, which is carrying the buckle, is fixed on the outside by rivets. The ends of the straps are fitted between outside strap and lining, and inside strap and lining. The upper is secured by stitching.

The bottom surface of synthetic insoles (PVC) is buffed lightly. These are temporarily fixed under the bottom of the sandal last. The uppers are fitted on the last and lasted under the insole by pasting. Adhesive is applied under the buffed surface of the PVC insole and lasted upper. Mock welts (4 to 5 mm width) are attached on the PU soles all round the edges.

The top surface of PU soles treated by primer and then halogenated by chemical. Slight heat treatment is given on PU. The top surface of PVC insoles are buffed lightly and adhesive (SR-NL) is applied and slight heat treatment is given. After proper drying, both the surfaces are stuck together by cementing press. The upper complete with sole is removed from the last. The sandals are cleaned, polished and packed.

Quality Control and Standards

Quality and specifications are as per buyer's specification and for export, certain quality and specifications are maintained, but for local market, no strict quality standards are followed.

IS 578:1971 and IS 3890:1966 can be seen for chrome tanned upper leather and lining leather respectively.

The upper leather should be uniform in thickness and colour and should have water fastness property. Very good quality adhesive and chemicals are to be applied for fixing sole and insole. Proper care should be taken while doing final inspection before packing.

Production Capacity

Quantity	72000 pairs
Value	Rs. 27360000

Motive Power

3 HP.

Pollution Control

There is hardly any pollution except a little noise pollution on account of running of the machine.

Energy Conservation

Normally it is not required.

Financial Aspects

Fixed Capital

Land and Building
Land 300 sq. mtr. @ Rs. 5000 per sq. mtr including registration	1500000
Total built-up area 200 sq. mtrs. as follows
Administrative office,factory hed 200 sq. mtrs. construction cost @ Rs. 6000 per sq. m	1200000
Water System (including Bore Well + over head tank etc)	200000
Electricity backup(generator and others equipment)	100000
Total civil cost= cost of land + building	3000000

Machinery and Equipments

Description	Imp./ Ind.	Qty.	Rate	Amount (Rs.)
Flat bed single-needle stitching machine, power operated with 0.33 H.P. Motor	Ind.	3	18000	54000
Strap cutting machine, power operated with 0.5 HP Motor	Ind.	1	35000	35000
Upper leather skiving machine complete with table, stand with 0.5 HP motor.	Ind.	1	100000	100000
Hand operated strap folding machine	Ind.	1	12000	12000
Buffing and roughening machine with 0.5 HP motor	Ind.	1	20000	20000
Polishing Machine with 0.25 HP motor	Ind.	1	10000	10000
Sole cementing press-4 bed operated with Air compressor 1 HP motor	Ind.	1	40000	40000
Trademark embossing machine hand operated	Ind.	1	15000	15000
Wooden sandal last	Ind.	100 pairs	250	25000
Tools, equipment etc.	Ind.	L.S.		30000
Office equipment, furniture etc.	Ind.	L.S.		100000
Taxes ,Electrification and Installation charges @ 40%	Ind.	L.S.		124400
Total				565400

Pre-operative Expenses	50000
Total	3615400

B. Working Capital (per month)

(i) Personnel (per month)

Designation	Qty.	Rate (Rs.)	Total (Rs.)
Manager	1	20000	20000
Designer-cum-Supervisor	1	10000	10000
Accountant-cum-Store Keeper	1	7000	7000
Clerk-Cum-Typist	1	5000	5000
Clickers	4	6000	24000
Upper assembly and preparation	4	6000	24000
Semi-Skilled Workers for bottoming	4	4500	18000
Machine Operators	14	6000	84000
Unskilled Workers	4	4000	16000
Watchman	1	3000	3000
Sweeper	1	3000	3000
Total			214000
Add. 22% perquisites			47080
Total			261080

(ii) Raw Materials (6000 pairs) (per month)

Description	Ind./ Imp.	Qty.	Unit	Rate (Rs.)	Value (Rs.)
Chrome upper leather lower quality	Ind.	6000	sq. ft.	55	330000
Split lining leather (approx. 1/2 sq. ft. to be used for buckle strap and side strap only)	Ind.	3000	sq. ft.	30	90000
PVC readymade insole	Ind.	6000	pairs	38	228000
P.U. Sole	Ind.	6000	pairs	140	840000
Grinderies like Mock welt, Adhesive, Thread, Buckle etc.	Ind.	L.S.	Per pair	20	120000
Packing	Ind.	L.S.	Per pair	8	48000
Total					1656000

(iii) Utilities (per month)

	Amount (Rs.)
Power and fuel	20000
Total	20000

(iv) Other Contingent Expenses (per month)

Description	Amount (Rs.)
Postage and Stationery	10000
Telephone	10000
Consumable stores	15000
Repair and Maintenance	10500
Transport charges	20000
Advertisement and publicity	100000
Insurance	8000
Sales Expenses	10000
Misc. Expenses	20000
Total	203500

(v) Total Recurring Expenditure (per month)

Description	Amount (Rs.)
Salary and Wages	261080
Raw Materials	1656000
Utilities	20000
Other Contingent Expenses	203500
Total	2140580

vi) Working Capital for 1.5 months

( 2140580 x 1.5)

3210870

C. Total Capital Investment

Total Fixed Capital	3615400
Working capital for 1.5 months	3210870
Total	6826270

Financial Analysis

Cost of Production (per annum)	Amount (Rs.)
Total recurring cost	25686960
Depreciation on Building @ 5%	150000
Depreciation on machinery @ 10%	31100
Depreciation on office furniture and equipment @ 20% on Rs. 50,000	20000
Depreciation on tools and equipment @ 25% of Rs. 35,000	7500
Interest on Total Capital Investment @ 12%	819152
Total	26714712

Turnover (per annum)

Items	Qty./pair	Rate/pair	Price (Rs.)
Gents sandal with P.U. Sole	72,000	380	27360000
Total			27360000

Net Profit (per year) (before Income Tax)

	Turnover - Cost of Production
	27360000- 26714712
	645288

Net Profit Ratio

	Net Profit per year x 100 ------------------- Turnover per year
	645288 x 100
	27360000
	2.36

Rate of Return on Total Investment

	Net Profit per year x 100 ------------------- Total Investment
	645288 x 100
	6826270
	9.45

Break-even Point

Fixed Cost (per annum)

Description	Amount (Rs.)
Depreciation on Building @ 5%	150000
Depreciation on machinery @ 10%	31100
Depreciation on office furniture and equipment @ 20% on Rs. 50,000	20000
Depreciation on tools and equipment @ 25% of Rs. 35,000	7500
Interest on Total Capital Investment @ 12%	819152
40% of salary and wages	1253184
40% of utilities	938400
Insurance	96000
Total	3315336

B.E.P	Fixed cost x 100 ---------------------------- Fixed cost + Profit
	3315336 x 100
	3315336 + 645288
	83.71%

Addresses of Machinery and Equipment Suppliers

• M/s. Benson Industries
  96, Sri Aurobindo Road,
  Salkia,
  Howrah.
  
• M/s. Bengal Machinery Co. (P) Ltd.
  9-A, New Tangra Road,
  Kolkata-700046.
• M/s. PTDC (Under NSIC),
  Industrial Estate,
  P. O. Ekkaduthangal,
  Chennai-600 097.
• M/s. Indian Leather Machines
  6, Sangita Indl. Estate.,
  Pokkram Road, No. 1, Upwan,
  Thane, Mumbai - 400 606.



Sandal Last

• M/s. Alison Singh and Co.
  174, Baluganj,
  Agra-1.
  
• M/s. Sanghavi Shoe accessories Pvt. Ltd.
  11, Harikripa, 10th Road,
  Chembur,
  Mumbai-400 071.
• M/s. Footform,
  30, Banerjee Para Road,
  Sarsuna,
  Kolkata-700 061.

Raw Material Suppliers

• M/s. Modern Leather Stores
  1, Bidhan Sarani,
  Kolkata-12
  (Misc. items)
• M/s. Kohinoor Leather Co.
  P-14, Bentinck Street,
  Kolkata
  (Misc. items)
• M/s. Valliappa Leather Corporation
  3/5 and 6, Narayana Chetty Street,
  Periamnt,
  Chennai-600 003
  (Misc. items)
• M/s. Bengal Tanning Company
  11/2, Harshi Street,
  Kolkata-9
  (Leather only)
• M/s. Super Tannery (India) Ltd.
  Jajmau, Kanpur.
• M/s. Omega Polymicrons Pvt. Ltd.
  Meerut Road,
  Mawana-250 401.
• M/s. Sethu Exports Agencies
  114, Vepery High Road,
  Chennai - 600 003.
• M/s. Saxon India
  59/2, Cockburn Road,
  Bangalore-560 051.
• M/s. Chemet,
  Taj Building, 1st Floor,
  P. B. No. 195,
  Dr. D. N. Road, Fort,
  Mumbai-400 001.
• M/s. Peoples Enterprises Pvt. Ltd.
  16/1, G. C. Avenue,
  Kolkata-700 013.
• M/s. Pidilite Industries Ltd.
  Ramkrishna Mandir Road,
  Andheri (E), P. B. No. 17401,
  Mumbai-59.
• M/s. Nanavati Engineering Co. Pvt. Ltd.
  A-195, 4th Cross Road,
  Peanya Indl. Estate,
  Bangalore-560 058.
• M/s. Atlas Trading Corporation
  7627, (P) Daroga Street,
  Resham House, Sadar Bazar,
  New Delhi-110 006.
• M/s. Star Processors Ltd.
  3, Chingrighata Lane,
  Kolkata-700 015.
• M/s. Bharani agencies
  126, Thambuchetty Street,
  3rd Floor,
  Chennai-600 001.

For further information please contact

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