Domestic LPG Stove
| Product Code |
340504005 |
| Quality and Standards |
IS 4246 : 1984 for LPG Stove
IS 11480:1985 for LPG Grillers |
| Production Capacity |
IS 5116:1985 for General requirements for domestic and commercial equipment with LPG |
| Uploaded on |
Qty. : 90,000 Nos. (per annum)
Value : 49500000 |
Introduction
L.P.G is the most convenient and clean fuel for domestic use and is very popular in these days. The LPG stove industry is about 36 years old and is mainly concentrated in the small-scale sector. LPG is a by product formed during petroleum distillation and is stored and marketed in gas cylinders of 14.2 KG capacity and used generally for cooking stoves and to some extent for industrial purpose also. The domestic LPG stove is primarily being used in the urban areas as well as in rural areas. The industry of domestic LPG stove has grown considerably over the last 18 years and offers a wide range of products i.e.
- Gas stove with one burner,
- Gas stove with two burners,
- Gas stove with two burners, one grill also called as cooking grill,
- Gas stove with three burners,
- Gas stove with four burners etc.
Market Potential
In 1980, the Government of India had planned to push the exploration and production of LPG from Bombay High Project, thereby providing tremendous push to the LPG Stove Industry. More and more number of new connections are being released by the Govt. and therefore the demand of LPG stove is also increasing day by day. As per the last Census, there were 186, units manufacturing LPG stoves in India. Out of them, 139 were from SSI sector. Most of the units are located in the state of Delhi and Haryana.
Basis and Presumptions
- The basis for calculation of production capacity is on double shift , working of 25 days per month on 75% efficiency. The time period required for achieving envisaged capacity utilization is assumed as one year.
- Break-even Point for the scheme has been calculated on full capacity utilization.
- Rate of interest has been taken @ 12% on an average. This, however, is likely to change depending upon the location of
the project.
- Labour wages have been taken on the basis of applicable rates in industry. These are likely to change depending upon the location of the project.
Building is considered of own
- Margin money requirement differs from project to project and type of entrepreneurs such as women, SC/ST, physically handicapped etc. and the minimum margin money usually asked by the financial institutions and banks is 15%. Margin money up to 25% in some cases is also asked. The entrepreneurs may check the margin money requirement from financial institutions for the project.
- Terms of loan differ from one financial institution to another and in general minimum gestation period is 6 months and it could be 2 years also. Maximum period for repayment of loan is 7 years including gestation period. The entrepreneurs may find the exact terms and conditions from the concerned financial institutions .
- The cost of machinery and equipments as indicated in the scheme is approximate ruling at the time of preparation of the scheme. The entrepreneur may check the exact price for specific make and model of the machine selected.
- Non-refundable deposits, cost of preparation of project report etc. may be considered under preoperative expenses.
- The provision made in other respects viz; raw materials, utilities, overheads etc. is drawn on the basis of standard variation and output. The cost indicated against each is approximate based upon local market conditions and observations. The entrepreneur may find out the exact cost from the concerned sources.
- The operative period of this project is estimated to be about 10 years considering technology obsolescence.
- Calculations are based on manufacture of double burner stove only.
Implementation Schedule
It is envisaged that from the conception to commercial production, it may take about one and half years, which also includes time for preparation of project report, provisional registration, procurement of Machinery and Equipments, their installation and electrification, clearance from all local authorities, obtaining loan from financial institutions. However, the duration for implementation of project/unit may vary depending upon the circumstance.
Technical Aspects
Process of Manufacture
C.R. sheet is to be cut according to the desired length and width on the guillotine-shearing machine. Then it has to be fed in the double action deep draw press for giving shape of the body of LPG stove. The holes may be cut on power press in the body and burr must be removed. After that, the small holes may be done on drilling machine. Then it may be sent for Ni-crome plating from outside of MC Limit. Then all bought out components like burners, burner tops, pan supporting casting, Gas pipe assembly, gas cook assembly knobs, rubber rolls and name plates etc. are to be fitted on the body. Finally the stove must be tested as per ISI mark requirement and packed for despatching/selling.
Quality Control and Standards
The LPG stove may be manufactured and checked according to IS 4246:1984, IS 11480:1985 and IS 5116:1985. The following testing facilities are required for getting ISI certification mark
- Strength testing equipment.
- Thermal efficiency apparatus.
- Combustion apparatus.
- Gas soundness testing equipment.
- Floor wall and ceiling temperaturemeasuring equipment.
- Gas consumption testing apparatus.
Production Capacity (per annum)
| Quantity(per annum) |
Value (Rs.) |
| 90,000 Nos. |
Rs. 49500000 |
| Motive Power |
16 H.P. |
Pollution Control
No pollution control is required in the unit as the unit has to get nickel crome plating from outside. However, the general feature for pollution control must be taken into consideration during the process of the unit.
Energy Conservation
General precautions must be taken into consideration to conserve energy such as shunt capacitors must be used on electric motors and carbide gas must be used with due care while welding and general lighting system.
Financial Aspects
Fixed Capital
| (i) Land and Building (per month) |
(In Rs.) |
| (i) Land 350 sq. mtr. @ Rs. 3500 per sq. mtr including registration |
1575000 |
| (ii) Cost of land development, fencing, approach road, inside roads, land scaping, drainage etc. @ Rs. 1000 per sq. mtr. |
350000 |
| (iii) Total built-up area 300 sq. mtrs. as follows |
|
| Administrative building 75 sq. mtrs. construction cost @ Rs. 7,500 per sq. m |
562500 |
| Factory shed 225 sq. mtrs. construction cost @ Rs.5000 per sq. mtr. |
1125000 |
| Water System (including Bore Well + over head tank etc) |
500000 |
| Total civil cost= cost of land + building |
4112500 |
(ii) Machinery and Equipment
Description |
Ind./ Imp. |
Qty. Nos. |
Total
(In Rs.) |
| Treadle guillotine shearing machine cap. 1250×1.6 mm with 3 HP motor and accessories |
Ind |
1 |
300000 |
| Double action deep draw press No.6 with 15 HP motor and accessories |
Ind |
1 |
1100000 |
| Power press cap. 100 tonne with 10 HP motor and accessories |
Ind |
1 |
450000 |
| Power press cap. 50 tonne with 5 HP motor and accessories |
-do- |
1 |
280000 |
| Circle cutting machine cap. 50mm dia with one HP motor and accessories |
-do- |
1 |
50000 |
| Bench drilling machine cap. up to 20 mm with 1 HP motor and accessories |
-do- |
1 |
20000 |
| Double ended bench grinder 200 mm wheel size with 0.5 HP motor and accessories |
-do- |
1 |
13000 |
| Flexible shaft grinder |
-do- |
1 |
8000 |
| Edge folding press No. 12 |
-do- |
1 |
35000 |
| Fly press No. 4 |
-do- |
1 |
20000 |
| Gas welding set complete with all accessories |
-do- |
1 |
15000 |
| Portable drilling machine 12 mm cap. with motor |
-do- |
2 |
10000 |
| Spot welding set 15 KW |
-do- |
1 |
80000 |
| Electric welding set cap. 300 amp |
-do- |
1 |
10000 |
| Total |
2391000 |
| Cost of power connection |
25500 |
| Electrification and installation charges @ 10% of the cost of machinery |
239100 |
| Office furniture racks etc. |
100000 |
| Measuring instruments and testing apparatus etc. |
100000 |
| Tools dies and fixtures etc. |
100000 |
| Total (ii) |
2955600 |
| (iii) Pre-operative Expenses |
50000 |
| Total Fixed Capital (i+ii+iii) |
7118100 |
Working Capital (per month)
(i) Salary and Wages
Description |
No. |
Salary (Rs.) |
Amount
(In Rs.) |
| Administration |
| Sales-cum-Marketing Manager |
1 |
18000 |
18000 |
| Clerk-cum-Typist |
1 |
5000 |
5000 |
| Accountant-cum-Cashier |
1 |
7000 |
7000 |
| Chowkidar/Peon |
2 |
3000 |
6000 |
| Sweeper (part time) |
1 |
2000 |
2000 |
| Technical |
| Engineer |
2 |
15000 |
30000 |
| Supervisor |
3 |
8000 |
24000 |
| Skilled Workers |
12 |
6000 |
72000 |
| |
9 |
4500 |
40500 |
| Helper |
4 |
3500 |
14000 |
| Total |
218500 |
| Perquisites @22% |
48070 |
| Total |
266570 |
(ii) Raw Material (per month)
Particulars |
Rate (Rs.) |
Unit |
Qty. |
Amount
(In Rs.) |
| CR sheet 1.00 mm thickness (20 SWG)/ tonne |
43000 |
Tonne |
30 |
1290000 |
| Bought out Components |
| Burners and burners tops (ISI mark) |
50 |
pair |
7500 |
375000 |
| Pan suppor- ting casted rings |
22 |
Set |
7500 |
165000 |
| Gas pipe assembly |
12 |
each. |
7500 |
90000 |
| Gas cock assembly ISI mark |
90 |
pair |
7500 |
675000 |
| On and off knob |
5 |
pair |
7500 |
37500 |
| Name plates |
1.5 |
each |
7500 |
11250 |
| Card board boxes for packing |
15 |
each |
7500 |
112500 |
| Total |
2756250 |
(iii) Utilities
| |
(Rs.) |
| Power -10000 kWH @ Rs. 5/unit |
50000 |
| Total |
50000 |
(iv) Other Contingent Expenses (per month)
| |
(In Rs.) |
| i. Telephone |
2000 |
| ii. Postage and Stationery |
2000 |
| iii. Transport Charges |
20000 |
| iv. Repair and Maintenance |
10000 |
| v. Nickel crome plating charges 7500 × 50 |
375000 |
| vi. Consumables like carbide, gas welding rods, oxygen gas etc. |
25000 |
| vii. Advertisement and Publicity & marketing |
100000 |
| viii. Insurance |
8000 |
| ix. Miscellaneous/sales Expenses |
10000 |
| Total |
552000 |
| (v) Total Recurring Expenditure (per month) [i + ii + iii + iv] |
3624820 |
| (vi) Total Working Capital (for 2 months) Rs. 3624820 × 2 |
7249640 |
Total Capital Investment
| (i) Fixed Capital |
7118100 |
| (ii) Working capital for 2 months |
7249640 |
| Total |
14367740 |
Machinery Utilisation
The number of machines to be installed has been determined in such a way that planned schedule of process will not cause any bottleneck in operation during bulk production. As such the unit will make utilization of machinery envisaged.
Financial Analysis
Cost of Production (per year) |
(In Rs.) |
| i. Total recurring cost |
43497840 |
| ii. Depreciation on machinery @ 10%
| 239100 |
| iii. Depreciation on Building @5% |
205625 |
| iv. Depreciation on office furniture @ 20% |
20000 |
| v. Depreciation on dies, tools and fixture @ 25% |
25000 |
| vi. Depreciation on measuring and testing apparatus @ 10% |
10000 |
| vii. Interest on Total Capital Investment @ 12% |
1724129 |
| Total |
45721694 |
Turnover (per year)
|
Total
(In Rs.) |
| By sales of 90,000 domestic LPG stoves @ Rs. 550 per stove |
49500000 |
| |
|
| Net Profit (per year) Turnover - Cost of Production |
3778306 |
Net Profit Ratio
| |
Net profit × 100 |
| |
Turn over |
| |
3778306 × 100 |
| |
49500000 |
| |
= 7.63 |
Rate of Return
| |
Net profit × 100 |
| |
Total Capital Investment |
| |
3778306 × 100 |
| |
14367740 |
| |
= 26.3 |
Break-even Point
Fixed Cost |
(In Rs.) |
| Total Depreciation |
499725 |
| Total interest |
1724129 |
| Insurance |
96000 |
| 40% of Salaries |
1279536 |
| 40% of other contingent expenses |
2649600 |
| Total |
6248990 |
| B.E.P |
Fixed Cost × 100
|
| |
Fixed Cost + Profit |
| |
6248990 × 100 |
| |
6248990+ 3778306 |
| |
= 62.32 |
Addresses of Machinery and Equipment Suppliers
- M/s. Essential Machine Tools (P) Ltd.
5, Nyayamurthi, G.N Vaidya Marg,
Post Box No. 2, Behind State Bank, Fort,
Mumbai-400001
- M/s. Dutta Engg. Works
C-162, Mayapuri Indl. Area,
Phase-II,
New Delhi.
- M/s. JNW Engineers
Commercial Complex,
Mayapuri Indl. Area, Phase-I,
New Delhi.
- M/s. United Machine Co.
B-96, Mayapuri Indl. Area,
New Delhi.
- M/s. Prem Engg. Works
20, Okhla Indl. Area,
New Delhi-110020.
- M/s. Patel Indl. Corporation
2-B, DLF Indl. Area,
Nazafgarh Road,
New Delhi.
- M/s. Mahalaxmi Engg. Works
20, DLF Indl. Area,
Nazafgarh Road,
New Delhi.
- M/s. Simplicity Engineers
B-99, Mayapuri Indl. Area,
New Delhi.
- M/s. Atlas Engg. Works
G. T. Road,
Batala
- M/s. P. K. Engg. Works
B-1, Indl. Estate,
Aligarh.
- M/s. S.S. Mechanical Works
Indl. Estate–B,
Ludhiana.
Raw Material Suppliers
Raw Material can be purchased fromlocal market, as it is available easily.Moreover, it can also be had from theGovernment Depots and Corporations.
For further information please contact
Information Manager
TIMEIS Project
E-mail: timeis@ficci.com
