Full PVC Footwear

Product Code	301201005
Quality and Standards	(1) PVC Sandals IS 2167:1972 (2) PVC Industrial Boots IS 12254:1993
Production Capacity	Quantity: Pairs 1,50,000 Value: RS. 41,25,000
Uploaded on	March 2007

Introduction

Full PVC Footwear such as Chappal, Sandals and Shoes are popular in Indian Market due to their cheap prices, durability and easy maintenance and affordability by a common man. Used PVC footwear containing basic rawmaterial i.e. PVC can again be used for making cheaper types of footwear. The plant and machinery and raw materials are available indigenously. The PVC Footwears are generally light weight and very comfortable to wear in rainy seasons.

Market Potential

PVC Footwears were introduced in 1964 and it gained momentum in 1967. Initially, plants and moulds were being imported generally of multisation type. Although the capacity creation was restricted due to shortage of rawmaterial, additional capacity continued to be created with indigenously available two-station machinery and moulds. The capacity at present is estimated 300 million pair per annum. There is scope for setting up these units in rural and backward areas using PVC granules in combination units PVC Scrap materials.

Basis and Presumptions

• It is proposed to manufacture 500 pairs per day on double shift(each shift=8hr) basis of 16 hours duration and 25 working days in a month.
• The project may take 3 year to achieve full capacity utilisation depending on various factors.
• Labour charges has been given on per month basis including 15% of perquisites for 25 working days.
  
• The rate of interest for both fixed and working capital is assumed at 12% per year.
  
• The entrepreneur is expected to raise 20 to 25% of the capital as margin money.
• The operative period of the project may be given 10 to 15 years considering obsolescence of technology. The loan may be paid back within 10 years. The unit is proposed to function in own building.
• Cost of machinery and equipment has been taken as per the rates quoted by machinery manufacturers/suppliers.

Implementation Schedule

Activity	Duration (in Week)
Arrangement of Finance	1st to 8 th
Arrangement of Electric Supply	8th to 30 th
Procurement of Machinery	15th to 30th
Selection of personnel	20th to 30th
Installation of Machinery	30th to 38th
Trial Production	39th to 40th
Commencement of Commercial Production	40th

The unit is expected to start commercial production from 40th week onwards.

Technical Aspects

Process of Manufacture

As per the design of the sample, PVC Footwear to be manufactured, the moulds are obtained and fitted in the machine. Then the PVC compound is fed according to requirement into a heated cylinder from sopper either in strip, granular or powder form. Ceramular form is more common. The Injection Cycle starts with closing and locking of the moulds under pressure either applied by hand or mechanical levers or automatically by hydraulic or pneumatic power. When PVC in the cylinder is sufficiently softened by heat, the same is forced forward by ram or screw action through an intermediate channel known as 'SPRUE' into the mould until it has cooled down to a state of sufficient rigidity and the pressure in the mould relaxed. The time cycle, therefore, can be adjusted into several stages, namely, mould filling time, dwell time under pressure, cooling time and mould opening time. The cooling time usually is the longest of all and has to be cut especially in small machine and the same has been recommended in the project.

PVC compounds are available as natural/transparent granules. Prior to use, colour concentrate granules known as master batches are mixed with the natural PVC Compound in the required proportion to give the desired colour. Initial mixing can be done in any convenient container units, a scoop or small showel. The final mixing is automatically achieved in the cylinder of the moulding machine.

The PVC compound, suitably mixed with the master batch is fed into the sopper of the machine. Normally 10 to 12 kg. PVC compound are fed at a time. Shore hardness of 70 to 78 for PVC granules temperature of 160oC and pressure of 80 lbs/square inch gives satisfactory results.

The main operations are

• Feeding of PVC granules into the sopper
• Trimming of surplus materials
• Cleaning and spraying (if required)
• Fixing of fittings
• Checking and Packing.

Quality Control and Standards

Following specifications are followed to customer's requirements

• PVC Sandals IS 2167:1972
• Polyvinyl Chloride Resins Method of text IS 4669:1968.

Production Capacity

Quantity	1,50,000 pair
Value	Rs. 41,25,000

Motive Power

2 KW.

Pollution Control

There is no pollution in the manufacturing of PVC Footwear.

Financial Aspects

Fixed Capital

Land and Building
Land 500 sq. mtr. @ Rs. 3500 per sq. mtr including registration	700000
Cost of land development, fencing, approach road, inside roads, land scaping, drainage etc. @ Rs. 1000 per sq. mtr.	500000
Total built-up area 425 sq. mtrs. as follows
Administrative building 75 sq. mtrs. construction cost @ Rs. 7,500 per sq. m	562500
Factory shed 300 sq. mtrs. construction cost @ Rs.5000 per sq. mtr.	1500000
Stores, staff canteen etc. 50 sq. mtrs. @ Rs. 6,000 per sq. mtr.	300000
Water System (including Bore Well + over head tank etc)	500000
Total civil cost= cost of land + building = 17,50,000+3362500	5112500

Machinery and Equipments

Description	Imp./ Ind.	Qty.	Value (Rs.)
Six Station PVC Injection Moulding Machine fully automatic Rotary Type	Ind.	1	1000000
Cost of Moulds 4 Sets each consists of four sizes sandal and shoes		1	200000
Tools and Equipments/ Jigs and Fixtures			50000
Cost of Office Equipments, Working Table, Racks, Trollies, Stools etc.			250000
Excise, sales tax & erection and installation charges 40% of total of 1 to 4			600000
Total			2100000

Pre-operative Expenses	100000
Total	7312500

B. Working Capital (per month)

(i) Personnel (per month)

Designation	Qty.	Rate (Rs.)	Total (Rs.)
Manager	1	15,000	15000
Engineer Mechanical/Electrical	1	10,000	10000
Designer	2	7,000	14000
Supervisor	2	7,000	14000
Accountant/Cashier	1	6000	6000
Clerk-cum-typist	1	5,000	5000
Chowkidar	1	3000	3000
Skilled Workers	6	6,000	36000
Un-skilled Workers	12	4000	48000
Total			151000
22% Perquisites on Total Salary			33220
Total			184220
Say			184220

(ii) Raw Material (per month)

Description	Qty.	Unit	Rate @/unit (Rs.)	Value (Rs.)
PVC Granules	5600	Kg	70	392000
Master Batch (Colour)	110.	Kg	130	14300
Fittings, Buckles, Button and Lacer etc.	12500	Pairs	5	62500
Packing Material	12500	Pairs	4	50000
Total				518800

(iii) Utilities (per month)

	Amount (Rs.)
Power 5,000 kWH	25000
Total	25000

(iv) Other Contingent Expenses (per month)

Description	Amount (Rs.)
Repair and Maintenance	10000
Postage and Stationery	15000
Travelling Expenses	15000
Telephone/internet etc	10000
Consumable Stores	20000
Advertisement and Publicity	100000
Insurance	7000
Sales Expenses	40000
Misc. Expenses	20000
Total	237000

(v) Total Working Capital (per month)

Description	Amount (Rs.)
Personnel	184220
Raw Material	518800
Utilities	25000
Other Contingent Expenses	237000
Total	965020

vi) Working capital is considered for an average working Capital cycle of 1½ months

Hence, Working Capital (965020 * 1.5)

1447530

C. Total Capital Investment

Fixed Capital	7312500
Working Capital	1447530
Total	8760030

Machinery Utilisation

70% - 80%

Financial Analysis

Cost of Production (per annum)	Amount (Rs.)
Total Recurring Expenditure	11580240
Depreciation on Machinery @ 10%	120000
Depreciation on Building @ 5%	255625
Depreciation on Tools-dies @ 25%	12500
Depreciation on Furniture @20%	50000
Interest on Total Investment @ 12%	1051204
Total	13069569

Turnover (per annum)

Items	Qty.	Rate (Rs.)	Value (Rs.)
PVC Shoes and Sandals pairs	1500000	100	150000000

Net Profit (before taxation) (per year)

	Total Turnover – Cost of Production
	1,50,00,000- 13069569
	1930431

Net Profit Ratio

	Net profit x 100 ------------------- Turnover per annum
	1930431 x100
	1,50,00,000
	1.29

Rate of Return on Total Investment

	Net Profit x 100 ------------------- Total Capital Investment
	1930431 x100
	13069569
	14.77

Break-even Point

Fixed Cost (per annum)

Description	Amount (Rs.)
Depreciation on Machinery @ 10%	120000
Depreciation on building @ 5%	255625
Depreciation on Tools-dies @ 25%	12500
Depreciation on Furniture @20%	50000
Interest on Total Investment @ 12%	1051204
40% of Salary Wages	884256
40% of other Contingent expenses	1137600
Total	3511185

B.E.P	Fixed Cost x 100 ---------------------------- Fixed Cost +Profit
	3511185 x 100
	3511185 + 1930431
	3255560 x100
	5441616
	59.83%

Addresses of Machinery and Equipment Suppliers

• M/s. Indian Hydraulic Industries,
  70, Najafgarh Road,
  New Delhi –15
  
• M/s. J.K Traders & Engineering,
  Industrial Area, Kirti Nagar,
  New Delhi – 15
• M/s. Ambika Dies and Moulds
  B-217, Naraina Industrial Area,
  Phase-1, New Delhi –28
• M/s. National Engineering Works
  New Nagapada Road,
  Mumbai-8
• M/s. R.H. Windser India Ltd.,
  E-7, U. Road,
  Thana Indl. Estate,
  Mumbai.



Raw Material Suppliers

• M/s. Pioneer Plastic Industries,
  Industrial Estate, Okhla,
  New Delhi – 20
  
• M/s. National Organic Chemical Industries Ltd.
  Worli, Mumbai – 18
• M/s. Calico Plastic and Chemicals
  Anik Chamber,
  Mumbai – 400 074
• M/s. Chemicals and Plastic,
  Mettur, Tamil Nadu
• M/s. Kundatia Industries,
  No. 69, Najafgarh Road,
  New Delhi.
• M/s. Omega Polymicrons Pvt. Ltd.
  Meerut Road,
  Mawana- 250401
  Meerut (U.P.)

For further information please contact

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