Welded Wire Mesh

Product Code	349910014
Quality and Standards	As per customers' specifications.
Production Capacity	Qty. : 3384 MT (per annum) Value : Rs. 115732800
Uploaded on	April 2007

Introduction

Welded wire mesh is the latest development in land wire product industry. The welded wire, generally called reinforcing wire, is mostly used in cement concrete work for construction of buildings, National Highway pavements, runways, dams, airports etc. It is also used for fencing purposes and for partition walls and as a safety guard in engineering workshops.

Market Potential

Welded wire mesh is used extensively in constructional work and fencing purposes. The wire mesh is made by automatic welding process, thus saving a lot of human labour and achieving uniformity in distance and quality.

Basis and Presumptions

• The project profile has been prepared on the basis of two shifts per day of 8 hours duration each having 300 working days per year.
• The capacity utilisation is assumed as 75% for the first year and 100% onwards.
• Promoters contribution towards margin money is taken as nil.
• Interest is calculated both on fixed and working capital at a simple rate of 12%.
• Rate of machinery and equipments, raw material and other items is based upon the prices prevailing at the time of preparation of the project.
• Break-even point is calculated at 100% capacity utilisation.
• Building is of own

Implementation Schedule

Activity	Period in Weeks
Preparation of Project Report
Calling quotations	4
Preparation	2
Provisional Registration as SSI	1
Financial arrangement with financial institutions and others	12
Purchase and procurement of machinery and equipment	8
Erection and electrification	3
Recruitment of personnel	4

Some activities shown above can be undertaken simultaneously in order to minimise the period.

Technical Aspects

Process of Manufacture

6 to 20 wires depending on the type of mesh are fed horizontally, parallel to one another over rollers to the machine. Distance between these wires is as per design. From the machine, a cross wire overtapping the parallel wires is fed and all the joints are electrically welded. The rollers move the parallel wires further and another cross wire comes in at specified distance. The process goes on, to give a wire mesh of desired specification. The welded wire mesh is pulled out for making rolls.

Quality Control and Standards

As the product is being processed in an automatic welding machine, the quality raw material of M.S. wire or G. I. wire of standard gauges is to be used to keep the production schedule of the machine. The proper maintenance of machine is necessary from time to time. Production is done according to specifications given by the customer.

Production Capacity (per annum)

Quantity	Value (In Rs.)
3384 Mt.	Rs. 115732800 Lakhs

Pollution Control

The level of pollution in this type of industry is minimal. However, permission and guidance from State Pollution Control Board is to be sought to meet its requirements.

Financial Aspects

Fixed Capital

(i) Land and Building	Amount (In Rs.)
(i) Land 1000 sq. mtrs. @ Rs. 3500 per sq. mtr including registration.	3500000
(ii) Cost of land development, fencing, approach road, inside roads, land scaping, drainage etc. @ Rs. 1000/ sq. mtr.	1000000
(iii) Total built-up area would be 700 sq. mtrs. as follows: Administrative building 100 sq.mtrs. construction cost Rs. 6000 persq. mtr.	600000
Factory shed 450 sq. mtr. construction cost @ Rs. 4000 per sq. mtr.	1800000
Stores and staff canteen etc. 150 sq. mtrs @ Rs. 4000 per sq. mtr.	600000
Total	7500000

(ii) Machinery and Equipment

Description	Qty.	Amount (In Rs.)
Semi-automatic wire mesh Welder model WMW 1800 suitable for manufacturing wire meshes having a width of 6 feet with different sizes and wire diameters varying from 2 mm to 5.6 mm (prestraightened and cut to length) complete with solid state synchronous IC controller, thyristor panel, 6 Nos. of water cooled encapsulated transformers, each having rating 100 KVA at 50% duty cycle holder assemblies and automatic cross wire feeder mechanism. The machine is suitable for connecting 400/440 Volts, 2 line of a 3 phase 50 HZ	1	2500000
Weld mesh cutting machine suitable for 8 mm dia rod x 9' length with 10HP motor	1	130000
Wire cutting and straightening machine upto 8 mm dia with 7.5 HP motor	1	45000
Air compressor with 3 HP motor 200 ltr. tank capacity	1	18000
Wolf make portable hand 6" grinder wheel dia	1	4000
Wire but welding machine 6 KVA	1	19000
Installation and line fitting.		40000
Step down transformer 250 KVA	1	240000
Furniture and office equipment		80000
Generator Set		400000
Total		3476000
(iii) Pre-operative Expenses		25000
Total Fixed Capital (i+ii+iii)		11001000

Working Capital (per month)

(i) Personnel

Designation	Nos.	Salary (Rs.)	Total (In Rs.)
General Manager	1	16000	16000
Production/ Maintenance Supervisor	1	12000	12000
Sales Supervisor	1	10000	10000
Skilled Workers	6	7000	42000
Un-skilled Workers	6	4000	24000
Helpers	4	3000	12000
Accountant	1	6000	6000
Clerk/Typist	1	5000	5000
Peon	1	3000	3000
Watchman	2	3000	6000
Total			136000
Add Perquisites @ 20%			27200
Total			163200

(ii) Raw Material

	(In Rs.)
M.S. Wire coil 2 mm to 5.6 mm dia 300 MT @ Rs. 28000 per MT	8400000

(iii) Utilities

	Amt.(In Rs.)
Electricity charge	50000
Total	50000

(iv) Other Contingent Expenses

	(In Rs.)
Postage, stationery and other office services	6000
Consumable stores, tools, repair and maintenance	20000
Transport and conveyance	30000
Advertisement and sales promotion	15000
Wire conversion charge (drawing)	40000
Insurance	2000
Miscellaneous expenses	10000
Total	123000

(v) Total Recurring Expenditure (per month)

	(Rs.)
Personnel	163200
Raw material	8400000
Utilities	50000
Other Contingent expenses	123000
Total	8736200

Working capital is considered on an average cycle of 1½ months	13104300
Hence, Working Capital	= 1½ months of recurring expenses

Total Capital Investment

(i) Fixed Capital	11001000
(ii) Working Capital	13104300
Total	24105300

Financial Analysis

Cost of Production (per year)	(In Rs.)
Total recurring expenditure	104834400
Depreciation on Building @ 5%	375000
Depreciation on Machinery and equipment @ 10%	307600
Depreciation on office equipments @ 25%	20000
Interest on total capital investment	2892636
Total	108429636

Turnover (per year)

	(In Rs.)
By sale of welded wire mesh 2-6mm dia of cross and line wire of different size 3384 MT @ Rs. 38000/MT	128592000
Trade Commission @ 10% (-)	12859200
Total	115732800

Net Profit (per year) (Before Income Tax)

	Turnover– Cost of Production
	Rs. 115732800 – Rs. 108429636
	= 7303164

Net Profit Ratio

	Net Profit per year × 100
	Turnover per year
	7303164 × 100
	115732800
	= 6.31%

Rate of Return

	Net Profit per year × 100
	Total Investment
	7303164 × 100
	108429636
	= 30.3%

Break-even Point

Fixed Cost (per annum)	(In Rs.)
Depreciation on building, machinery equipment and office equipments	702600
Insurance	24000
Interest on total investment	2892636
40% of salary and wages	783360
40% of other contingent expenses excluding insurance	580800
Total	4983396

B.E.P	Fixed Cost × 100
	Fixed Cost + Profit
	4983396 × 100
	4983396 +7303164
	= 40.56%

Addresses of Machinery and Equipment Suppliers

• M/s. Jaya Hind Sciaky Ltd.
  D-1 Block, Plot No. 18/1,
  Chinchwad, Pune - 411 019
  Phone Nos. 7475579,7475089 (Purchase), 7475088 (Sales)
  

For further information please contact

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