M.S. Rounds, Angles, Channel, Tor Steel etc.
| Product Code | 35450200 |
| Quality and Standards | IS 226 : 1975 (Superseded By IS 2062 : 1992) |
| Uploaded on | February 2007 |
Introduction
Small Scale Re-Rolling Mills produce various types of rolled sections such as Round, Tor Steel, Flat, Square, Light Angle and Z Section. Among these products, M.S. Round and Tor Steel are the most popular products and therefore, this profile has been drawn incorporating the required machinery and equipment for manufacturing these items. Round and Tor steel are produced up to 25mm diameter. Any construction work, whether that is civil or structural, require rolled sections like Round, Tor Steel, Flat, Angle etc. The products, as indicated in this profile are mainly for civil constructional work like Govt. office buildings, Hospitals, Hotels, Domestic houses, Dam, Bridges and various other establishments.
Market Potential
After independence, development work started in multi-directions. This development encompassed construction of Barrage, Hydro-Electric Power Station, and other establishments mentioned above. In city and urban areas, lot of houses are being constructed. Besides this, both Central and State Govt. are spending huge amounts of money for construction of Houses for accommodating people of low income group. All this work will be continuing for a long time. As stated earlier, M.S. Rounds and Tor Steel are indispensable products in civil construction work and therefore, the demand for the same will not only continue but will also increase. As a matter of fact, there is sufficient gap between the demand and supply of Re-rolled products, which is revealed from the fact that the products are sold on hard cash basis.
Basis and Presumptions
The profile is drawn on the basis of following presumptions:
| Working Hours/Shift | 8 hours. |
| No. of shift/day | 3 |
| Working days | 300 |
| Total No. of working hours | 7200 |
| Working Efficiency | 75% |
| Margin Money | 25% of Capital Investment |
| Rate of Interest on Fixed and Working Capital. | 12% |
| Operative period of the Project | 10 years |
| Value of Machinery and Equipment is estimated on the basis of prevailing cost in the market. | |
Implementation Schedule
Project implementation will take a period of 8 months from the date of approval of the scheme. Break-up of activities with relative time for each activity is shown below:
Nature of Activities |
Period in Month (Estimated) |
| Scheme preparation and approval | 0–1 |
| SSI Provisional registration | 1–1 1/2 |
| Sanction of loan | 1–4 |
| Clearance from Pollution Control Board | 3–4 |
| Placement of Order for Delivery of M/c. | 3–4 |
| Installation of Machines | 4–5 |
| Power connection | 2–5 |
| Trial run | 5–5 1/2 |
| Commencement of production | 5 1/2 onwards |
Technical Aspects
Process of Manufacture
Standard Billets and scraps will be cut to required size by shearing machine and will be fed into coal fired heating furnace for heating at a temperature of about 1100 deg. C.
After that, these stores will be fed into the roughing rolls and other rolls one by one, where cross sectional size will be reduced gradually. The semi-finished store is finally passed through the chilled rolls of the last stand which comprise of 2 rolls. Shape and size of the cross section of the finished products depend on grooves made on rollers. All kinds of sections except Tor Steel is finished at the last stand.
In case of Tor Steel, Scrap/Billet/Ingot are passed through special rolls, so that special rounds are formed with two ribs along the whole length of the bar and the same have ceration marks on the whole area of its surface. After this operation, these bars are twisted at cold condition by the help of a motor operated Twisting Machine and thus Tor Steel is formed.
Quality Control and Standards
In the market tested as well as commercial grade, re-rolled sections are sold. Commercial products are not so much controlled from the angle of quality, but tested quality products are tested in accordance with the Indian Standard Specification No. IS:226 : 1975 (Superseded by IS:2062 : 1992). The tests are comprised of chemical analysis of the product, determination of tensile strength and elongation percentage etc. In this profile, provision has been made for physical testing of the products, but provision has not been made for chemical laboratory because the seller of Billets/Ingots will provide chemical analysis report for every lot.
Production Capacity (per annum)
| Quantity | 10,980 M.T. of Rolled Products 300 M.T. Scrap. |
| Value | Rs. 35,84,20,000 |
Motive Power
| Plant and Machinery | 1200 H.P |
| Office and Lighting | 20 H.P. |
Pollution Control
In the Re-Rolling Industry the main operations are cutting to desired size, pre-heating and rolling. During preheating the coal fired/oil fired furnace with recuperator and raised stack height above 30 metres may produce pollution within the prescribed limit. In rolling mill noise pollution is created to some extent; but due to large open shed of rolling mill the noise level is automatically maintained within the prescribed limit of noise pollution. The unit will take care to satisfy the pollution norms at the time of selection of machinery and equipment and also the process. Before finalisation of the project, necessary clearance will be obtained from Pollution Control Board.
Energy Conservation
Presently the energy conservation efforts are needed to be strengthened substantially. The potential for conservation however is high and all efforts need to be made by the individuals to realise it. The energy audit is an integral part of an energy conservation project for a systematic approach for decision. Electrical power is one of the main impulses in this type of industry which in our country is not sufficient and there is need to consume as little as possible. The machines are individually motorised so that the energy may be saved when the machines are not in use. Use of lubricant and proper maintenance of machine still further act towards energy conservation. The use of capacitor band where necessary, also helps to this effect.
Financial Aspects
A. Fixed Capital (Non-Recurring Expenditure)
(i) Land and Building |
Amount (In Rs.) |
| Land measuring 4000 sq. mtrs. @ Rs. 3500 / Sq. mtr | 1,40,00,000 |
| Construction of boundary wall: Gate, General Office, Factory Shed, Store etc., workers room, raw material and finished store, security, electrical transformer, pollution control area, bore well and water distribution 2000 Sq. Mtrs. @ Rs. 7000 per Sq. mtr. | 1,40,00,000 |
Total |
2,80,00,000 |
(ii) Machinery and Equipments (Indigenous) |
(Rs.) |
|
| 230mm Rolling Mill of stands consist of 3 sets geared couplings, iron fly wheel, reduction gear, 230mm PCD pinion stand, spindles of couplings, one set of rolls, 7 nos. mill stands. | 1 Set | 57,00,000 |
| Cooling Bed 13 Mtr. ×2 Mtr. | 1 | 5,00,000 |
| Coal fired furnaces 13 Mtr. ×2.75 Mtr. ×2 Mtr. | 1 | 15,00,000 |
| Shearing machine 37 mm with 20 H.P Motor | 1 | 7,00,000 |
| Cropping machine with 10 HP Motor, capacity 12.5 mm to 25 mm | 1 | 2,00,000 |
| Twisting Machine with 10 HP Motor, capacity up to 16mm. | 1 | 4,00,000 |
| Twisting Machine with 20 HP Motor, capacity up to 25mm. | 2 | 10,00,000 |
| Piller Drilling Machine 25mm capacity with 2 HP Motor. | 1 | 50,000 |
| Heavy duty Lathe 3000mm with 5 HP Motor | 1 | 2,00,000 |
| Bench grinder 240mm wheel with 1 HP motor. | 1 | 20,000 |
| Electric welding Set 500 amp. | 1 | 50,000 |
| Shaping machine with 2 HP motor | 1 | 1,00,000 |
| Measuring instruments, hand tools etc. | LS | 2,00,000 |
| DG set with accessories | LS | 20,00,000 |
| Platform type weighing scale | 1 | 50,000 |
| Pollution control devices, bore well, overhead tank, deep tube well, pipe line, under ground tank, chain pulley etc. | 1 set | 15,00,000 |
| Structure to hold over head channel for movement of long carrying Hot Billets. | LS | 5,00,000 |
| Office furniture | LS | 3,00,000 |
| Typewriters, Computer, Fan, Telephone, Fire fighting equipment, First aid box etc. | LS | 10,00,000 |
| 500 KVA step down Transformer, distribution Box, Fuse, cable etc. | LS | 10,00,000 |
| Excise, sales tax electric fittings and Installation @ 40% of the cost of Machinery | 67,88,000 | |
| Total (ii) | 2,37,58,000 | |
| (iii) Pre-operative Expenses | Rs. 8,00,000 |
| Total Fixed Capital (i + ii + iii) | Rs. 5,25,58,000 |
B. Working Capital (per month)
(i) Staff and Labour
Item |
No. |
Salary (In Rs.) |
Amount(In Rs.) |
| Works Manager | 1 | 30,000 | 30,000 |
| Production manager, shift in charge, maintenance engineers, | 200,000 | ||
| Shift Supervisors, foremen, electrical and mechanical | 1,00,000 | ||
| Finance and accounts staff | 30,000 | ||
| Sales and marketing staff | 50,000 | ||
| Purchase and stores staff | 1 | 3,000 | 30,000 |
| Skilled Workers | 10 | 6,000 | 6,000 |
| Administrative staff | 25,000 | ||
| Semi-Skilled Workers | 80 | 4,000 | 3,20,000 |
| Unskilled Workers | 60 | 3,000 | 180,000 |
| Unskilled Workers | 60 | 3,000 | 180,000 |
| Peon | 3 | 3,000 | 9,000 |
| Watch and Ward | 6 | 3,000 | 18,000 |
| Sweeper | 4 | 3000 | 12,000 |
| Perquisites @ 22% | 234,000 | ||
| Total | 12,98,000 | ||
(ii) Raw Materials
Designation |
Qty. MT |
Rate Rs.)/M.T |
Value ( Rs.) |
| Re-Rollable Scrap | 360 | 20,000 | 72,00,000 |
| Billets | 600 | 24,000 | 1,44,00,000 |
| Steam Coal | 90 | 4,000 | 3,60,000 |
| Re-fractory, Lubricant clay, Rolls etc. | LS | 3,00,000 | |
| Total | 2,22,60,000 | ||
Utilities |
Amount (In Rs.) |
| Electricity and Water | 10,00,000 |
(iv) Other Contingent Expenses |
Rs |
| Maintenance and Spares | 60,000 |
| Transport Charge | 30,000 |
| Travelling | 3,00,000 |
| Postage, Stationery and communications | 50,000 |
| Advt. and Publicity | 2,00,000 |
| Insurance | 31,000 |
| Misc. Expenses | 2,00,000 |
| Total | 8,71,000 |
| Total Recurring Expenditure (i+ii+iii+iv) | 2,54,29,000 |
| Working Capital for 3 Months | 7,62,87,000 |
C. Total Capital Investment
| Non-Recurring Expenditure | Rs. 5,25,58,000 |
| Working Capital | Rs. 7,62,87,000 |
| Total | Rs. 12,88,45,000 |
Financial Analysis
Cost of Production (per year) |
(Rs.) |
| Total recurring cost | 30,51,48,000 |
| Depreciation on Building @ 5% | 7,00,000 |
| Depreciation on Machinery and equipment @ 10% | 20,96,000 |
| Depreciation on furniture and furnace, @ 20% | 5,60,000 |
| Interest on total Capital Investment @ 12% | 1,54,61,000 |
| Total | 32,39,65,000 |
(2) Sales Proceed (per year)
Items |
Qty. (M.T.) |
Rate (In Rs.) MT |
Amount (In Rs.) |
| Rounds, Tor steel, Angles, Channels | 10980 | 32,233 | 32,233 |
| Sale of Scrap | 300 | 15,000 | 45,00,000 |
| Total | 35,84,20,000 | ||
(3) Profitability (per annum)
i) Profit |
= Total Sales– Cost of Production = Rs.35,84,20,000 – Rs.32,39,65,000 = Rs. 3,44,55,000 |
ii) Cash Generation |
= Profit + Depreciation = 3,78,11,000 |
iii) % of Profit on Sales |
3,44,55,000 ×100 35,84,20,000 9.61% |
iv) % of Return on Investment |
3,44,55,000×100 12,88,45,000 26.7% |
Break-even Point
Fixed Cost |
(Rs.) |
| Depreciation on Building, plant and m/c, furniture and furnace | 33,56,000 |
| Interest on Total Investment | 1,54,61,000 |
| 40% of Salary and Wages | 62,30,000 |
| 40% of other Expenditure | 41,80,000 |
| 40% of Utilities | 4,00,000 |
| Total | 2,96,27,000 |
B.E.P.
2,96,27,000×100 2,96,27,000 + 3,44,55,000 46.2% |
Addresses of Machinery Suppliers
- M/s. G.R.C.
1, Taratala Road,
Kolkata-700024. - M/s. Standard Electricals
282, B.B. Chatterjee Road,
Kolkata-700042. - M/s. Associated Engineers
32, G.C. Avenue,
Kolkata-13. - M/s. Machine Tools Impex
75, S.C. Avenue,
Kolkata-700013. - M/s. Rona Udyog (P) Ltd.
18D, Everest House,
46C, Chowringhee Road,
Kolkata-700071.
Raw Material Suppliers
- Steel Authority of India Ltd.
- Local Market.
For further information please contact
Information Manager
TIMEIS Project
E-mail: timeis@ficci.com
