Leather Travelling Bag

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Product Code 293101000
Quality and Standards As per buyers specification
Production Capacity Quantity: 30000 pieces (per annum) Value: Rs. 32400000
Uploaded on March 2007


Travelling bag is one of the convenient goods used for carrying the belongings such as clothes, daily-use articles and other essentials during travelling from one place to other. Some other types of products are also used for carrying important documents and office use equipments by the executives and high profile personnel. Although this product is manufactured from various types of materials such as textile, jute, coated fabrics, yet leather travelling bag is having wider acceptance due to its superior strength, aesthetic look and up-man-ship among middle and high-income group people. A wide range of travelling bags are in use for various purposes. The cost of the leather bags depends upon the type of leather, space and/or style of it. This project aims at manufacturing two types of bags i.e.

Bags of single large pocket with one or two zips usually made from heavy cow or buffalo leather and
Bags of multi pockets with interlining and re-enforcement, flap type, fitted with magnetic press buttons, commonly made from cow nappa leather.

Market Potential

The demand of the leather travelling bag is increasing day-by-day in tune with the growth of industrialization, economic standards of people, tourism and fashion consciousness. The important customers of such products are medium and high-income group people belonging to service, business and executive classes. The products with a price range of Rs. 400 to Rs. 2,500 are commonly seen in the market. The proposed product with the price of about Rs. 600 to Rs. 800 is felt quite acceptable with reasonable quality. Further, export worthiness of this product is quite substantial with qualitative and latest designed ones. A small manufacturer can have tie-up with any exporter merchant in the country for executing the order as per the specified design. There is an ample scope of leather travelling bag units with easy and considerably cheaper availability of indigenous raw material and skilled manpower.

Basis and Presumptions

This project profile has been prepared on the basis of following assumptions

Working Hours Double shift(8 hour per shift) of 16 hours a day for 300 working days in a year
Capacity Utilisation 60% during first year
70% during second year
80% during 3rd year and onwards
Entrepreneur Anybody having knowledge/experience of leather goods and/or venture to start leather based units.
Location Anywhere in India, preferably nearby any tannery pocket or export facility zone.
Land and Building Own
Raw Materials Chrome tanned heavy cow or buffalo bag leather and softy cow nappa leather.
Salary and Wages All employees are paid on monthly basis at prevailing rates of leather industry
Transportation and Taxes on purchase Not Included in purchase price.
Power Charges Rs. 4 per KWH from power supply source
Depreciation 5% on building and civil construction
10% on plant and machinery
25% on tools and equipments
20% on furniture and fixture
10% on other fixed assets
Margin Money 30% of total capital investment
Interest Charges 15% has been calculated on total capital investment considering the opportunity cost of margin/equity money.
Fixed Cost for BEP Analysis 100% rent, insurance, interest and depreciation
40% of total salary and wages
40% of total utilities and other Contingent expenses excluding rent and insurance.

Implementation Schedule


Period (in months)

Site selection, negotiation with landlord, market survey preparation of project report and other formalities 2
Seeking quotation of machines, purchase and installation 2
Trial production, arranging working capital, Procurement of raw material and market tie up 2
Total period required for commencing commercial production 6

Technical Aspects

Process of Manufacture

The leather travelling bags proposed to be manufactured in this project are mainly of two types. One is of single large pocket with a space of 3 to 6 ft. fitted with one or two fasteners and a long strap handle and other one is of multi-pockets (3 to 5) fitted with different types of fasteners like zips, velcro or press buttons. While heavy cow or buffalo bag leather with the thickness of 2.0 to 2.5mm without lining is preferred for making the former, the softy type of leather like cow nappa leather with the inter-lining and reinforcement is usually used for the later.

First of all the components are cut from suitable materials. The basic raw material is the finished leather, which is not uniform, irregular in shape and size, variation with grain structure and presence of defects on the surface. On the other hand, the components are generally regular or rectangular shape and the adjacent components should have similar shade and structure. Therefore, necessary care should be taken in cutting the components. The cut components are then skived to the edges for ease of folding and/or stitching. The edges are then beaded and the zips and other fasteners attached as per the specification. The outer surface (leather), the inner surface (lining) and the re-enforcement materials if required so, are attached first with the adhesive and then by stitching. The linings and thread-ends are trimmed and sealed. The surface is cleaned and polished and made ready for packing.

Quality Control and Standards

The quality of this product has to be maintained as per buyer's specification. However, the main criteria for quality control are selection of suitable materials, (especially the leather with required thickness, shade, strength and softness) cutting components from suitable portions of leather, uniform folding, fastener attachment, regular stitching with suitable thread with
specified stitch length and finishing.

Production Capacity (per annum)

Leather travelling bag single pocket with one long and two small handles (20"x5"x18") 18000 Pcs. of Rs 18000000.
Leather travelling bag-multi pocket flap type with one longand two small handles (18"x5"x15") 12000 Pcs. of Rs. 14400000
Motive Power 10 HP.

Pollution Control

The proposed unit does not produce any effluent. However, the scraps of leather and other materials are to be collected and disposed-off at appropriate place or are burnt at an isolated place.

Energy Conservation

All machines are power driven and are run individually, whenever required.

Financial Aspects

Fixed Capital

(i) 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

(ii) Machinery and Equipments


Imp. Ind.


Rate (Rs.)

Value (Rs.)

Strap cutting machine Straight (12 knives) Ind. 1 70,000 70000
Pneumatic stamping machine-stamping wheel (0-9 nos.) (A-Z) Ind. 1 95,000 95000
Upper Skiving machine Ind. 1 55,000 55000
Flat bed single needle sewing machine Ind. 3 25,000 75000
Heavy duty flat bed single needle sewing machine Ind. 1 40,000 40000
Cylinder bed sewing Single Ind. 2 90,000 180000
Combined finishing machine Ind. 1 85,000 85000
Rivetting machine Ind. 1 10,000 10000
Taxes,Electrification and erection of machine @ 40% on machine cost       244000
Total 854000

(iii) Tools and Equipments and Other Fixed Assets


Imp. Ind.


Rate (Rs.)

Value (Rs.)

Leather goods makers tool kit s Ind. 3 sets 5000 15000
Machine maintenance and electricians tool kit Ind. 1 set L.S. 5000
Testing equipments-thickness gauge, measuring scales etc. Ind.   L.S. 5000
Workshop working tables, racks etc. Ind.   L.S. 80000
Office furniture and equipments Ind.   L.S. 100000
Misc. equipments Ind.   L.S. 10000
Total       215000
Total [ii +iii]       1069000

(iv) Pre-operative Expenses



Preparation of project report and consultancy 40000
Administrative expenses 10000
Travelling, Market development and tie-up 20000
Other formalities and expenses prior to production 10000
Total 80000
Total Fixed Capital [i+ii+iii+iv] 4749000

B. Working Capital (per month)

(i) Staff and Labour (per month)



Salary (Rs.)

Total (Rs.)

Manager 1 15000 15000
Supervisor cum Designer 2 8000 16000
Skilled Worker 10 6500 65000
Semi-skilled workers 1 6000 6000
Unskilled worker 4 4000 16000
Electrician and mechanic 1 5000 5000
Accountant cum Cashier 1 6000 6000
Store keeper cum assistant 1 5000 5000
Attendant 1 3000 3000
Total 261000
Add perquisites @ 22% on Salary 57420
Total 318420

(ii) Raw Material Including Packaging Materials Per Piece of Bag (per month)



Rate (Rs.)

  Total (Rs.)

      Bag SP Bag MP
Heavy cow or buffalo Chrome tanned Bag Leather (2.0 mm) 8.5 Sq. ft. 70 595  
Cow nappa/softee leather (1.4 mm) 9.0 Sq. ft. 80   720
Linings and reinforcements LS   20 70
Magnetic press buttons LS     50
Zips, Threads, adhesive, Finishing and other misc. materials LS   25 38
Packaging materials LS   9 14
Total     1.20 1.20
Logo/Monogram Printing 649 892
Total materials requirement (per month) (456 x 750 + 622 x 500) 1865500

(iii) Utilities (per month)


Amount (Rs.)

Electricity bill LS 10000
Total 10000

(iv) Other Contingent Expenses (per month)


Amount (Rs.)

Repair and maintenance 10000
Other consumable 10000
Insurance 2000
Telephone, fax and other postal expenses 6000
Stationery and printing 5000
Other misc. expenditure 10000
Total 43000

(v) Total Recurring Expenses (per month)


Amount (Rs.)

Staff and Labour 318420
Raw Materials 1865500
Utilities 10000
Other contingent expenditure 43000
Total 2236920

vi) Total Working Capital Requirement

Raw material stock-one month 1865500
Stock in process-2 days 124367
Finished goods stock-Half month 932750
One month expenses  
a. Salary and wages 318420
b. Utilities 10000
c. Other Contingent expenses 43000
Total 3294037

(vii) Total Working Capital Requirement

Receivables (One month credit sale) 2700000
Total 5994037

C. Total Capital Investment

Fixed Capital 4749000
Working capital 5994037
Total 10743037

Financial Analysis

Cost of Production (per annum)

Amount (Rs.)

Total recurring cost 26843040
Depriciation on Building 5 % 180000
Depreciation on machinery and equipments @ 10% 85400
Depreciation on tools and equipments @ 25% 28750
Depreciation on Furniture and Fixture @ 20% 22000
Interest on Total Capital Investment @ 12% 1289164
Total 28448354

Turnover (per year)



Rate (Rs.)

Value (Rs.)

Leather travelling bag-Single pocket 18000 1000 18000000
Leather travelling bag-Multi pockets 12000 1200 14400000
Total     32400000

Net Profit (Before Taxation) (per year)


Turnover - Cost of Production

  32400000 - 28448354
  = 3951646

Net Profit Ratio


Net Profit per year x 100

Turnover per year

  3951646 x 100

Rate of Return on Total Investment


Net Profit Per year x 100

Total Investment

  3951646 x 100

Break-even Point

Fixed Cost


Amount (Rs.)

Depreciation on Building @ 5 % 180000
Total depreciation on plant machinery tools fixtures office equipments 136150
Interest on capital investment 1289164
Insurance 24000
40% of Salary and Wages 1528416
40% of other contingent expenditure and utilities 51000
Total 3208730
B.E.P Fixed cost x 100
Fixed cost + Net Profit
  3208730 x 100
  3208730 +3951646

Addresses of Machinery and Equipment Suppliers

  • NSIC Technical Service Centre
    Sector B-24, Guindy Indl. Estate,
  • M/s. Atlanta Trading (P) Ltd.
    Atur House,
    Worli Naka,
  • M/s. Twin Star Engineering
    No. 98, Pammal Main Road,
  • M/s. Raj Machine Home
    Opp. New Jyoti Building,
    35/44, Karabala Road,

Raw Material Suppliers

  • M/s. Alpha Global
    445/1,6th Cross, 7th Block,
    Jayanagar KPM Road,
    Bangalore-560 082.
  • M/s. Amjad Finished Leather Co.
    54, Maddox Street, Choolai,
  • M/s. Arkay Leathers
    No. 3, Third Floor, Crown Court,
    34, Chathedral Road,
  • M/s. Mow Chung Tannery Pvt. Ltd.
    47, South Tangra Road,
  • M/s. Pidilite Industries Ltd.
    J.B. Marg, Nariman Point,
    (for adhesive)
  • M/s. APL Poly Fab Pvt. Ltd.
    48 C, Matheswar Tala Road,
    (for lining)
  • M/s. Coats India Ltd.
    144, M.G. Marg,
    (for stitching thread)
  • M/s. Asia International
    1523, Qasimjan Street,
    Lal Kuan, New Delhi
    (for fasteners)
  • M/s. Bharani Agencies
    No. 126, Thambu Chetty Street,
    III Floor, Chennai-1
    (for fasteners)
  • M/s. Hyde Park India Pvt. Ltd.
    C-21, Sector-7, Noida,
    Ghaziabad Distt., U.P.
    ( for fasteners)

For further information please contact

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