Cotton Knitted Fabrics
| Product Code | 260101001 |
| Quality and Standards | N.A. |
| Uploaded on | January 2006 |
Introduction
Knitting is one of the fabric manufacturing techniques in which yarn is converted into loops and loops are intermeshed to form fabric. The knitted fabrics are quite different from woven fabrics in which yarn lie in straight line resulting in rigid structure and less elongation. Cotton knitted fabric is used as raw material for the manufacture of undergarments and knitwears. Generally, hosiery yarn of count 20s-40s is being used for the manufacture of knitted fabric. Since, the machinery required to set up this industry are indigenously available, this industry can be easily set up with low investment and can be run by new entrepreneurs. Main buyers of knitted fabrics are garment manufacturing units. Hence, knitted fabrics should be manufactured and supplied as per the requirement of garment manufacturers.
Market Potential
Knitwears are manufactured out of knitted fabrics mainly due to its softer feeling, bulkiness, good draping quality etc. Knitting industry is low skill, labourintensive and remunerative, more attractive to workers, less capital investment, easy process, more turnover, more profits and attractive to entrepreneurs. The main buyers of knitted fabrics are garment manufacturing units and processing units. Presently, garment manufacturing units are running short of quality fabrics, so it is presumed that marketing of knitted fabrics will not be a major hurdle provided the knitting unit is prepared to supply the goods to the buyers in scheduled time without any delay. Besides, there is tremendous export potential for this product as the large number of Western garment manufacturers intend to source their requirement of fabric from India.
Basis and Presumptions
This project is based on two shift basis with 300 working days in a year. The time period for achieving maximum capacity utilisation is considered from 3rd year from the date on which production is started. Rental value of proposed building for the project is considered at Rs. 20 per sq. mt. The costs of machinery and equipment/ material indicated refer to a particular make and approximate to those prevailing at the time of preparation of this project. Installation and electrification cost is taken @ 10% of cost of machinery and equipment.
Non-refundable deposits, project report cost, trial production, security deposit with Electricity Board are taken as pre-operative expenses. Depreciation has been considered at 10% on plant and machinery, 15% on furniture and fixtures and 25% on equipments. Minimum 25% of the total investment is required as margin money. The interest rate on capital loan has been considered at 12% per annum.
Implementation Schedule
The implementation schedule of this project may take a total period of six months approximately for starting the production.
Technical Aspects
Process of Manufacture
Cotton yarn of particular count, purchased from spinning mills or yarn dealers on cones, are loaded into the machine and threaded through eyelets and tensioning device, stop motion and finally to the needle. While cloth is knitted by running the machine, care must be taken to see any breakages in the yarn while knitting and breakage must be attended to. After sufficient length of roll is knitted, the knitted cloth is cut and taken away from the machine. Details regarding yarn count, weight of cloth rolls, date of packing, manufacturers etc. are marked on each cloth rolls and sent to the customers.
Quality Control and Standards
There is no standard specification formulated for cotton knitted cloth. The quality of knitted fabric mainly depends on raw material quality, therefore quality yarn must be used for the manufacture of knitted cloth. Hosiery yarn should be purchased from reputed spinning mills only. Spare parts should be kept ready for immediate replacement in order to maintain the targets.
Production Capacity (per annum)
Plain knitted cloth
Quantity (Kg.) |
Amount (In Rs.) |
| 3,20,800 | 8,65,90,000 |
Motive Power
Totally 50 HP power is required to run the industry at full capacity, this is proposed to be obtained from State Electricity Board.
Pollution Control
The process of manufacture does not involve any pollution.
Energy conservation
Wastage of energy can be minimised by proper housekeeping.
Financial Aspects
Financial Aspects
| Land and Building | |
| Land area 1000 Sq. Mtr @ Rs. 3500 per meter | Rs.35,00,000 |
| Boundry wall and Gates | Rs. 5,00,000 |
| Covered area for processing yarn into knitted fabric 350 Sq. mtr @ Rs. 8000 per Sq. Mtr | Rs. 28,00,000 |
| Covered Area for utility plants like bore well, DG Set, electrical room, maintenance room, store room, staff office workers room etc. 250 Sq. mtr.@ Rs. 9000/sq.mtr | Rs. 22,50,000 |
| Total Civil Cost (Land and building) | Rs. 88,00,000 |
Machinery and Equipments
Description |
No. |
Rate (Rs.) |
Amount (Rs.) |
| Sinker body knitting machine 22 gauge 17" dia with needles and all accessories | 8 | 75,000 | 6,00,000 |
| Sinker body knitting machine 18 gauge 18" dia with needles and all accessories | 8 | 100,000 | 8,00,000 |
| Sinker body knitting machine 24 gauge 15" dia with needles and all accessories | 8 | 80,000 | 6,40,000 |
| Electrical motor for knitting machines | 24 | 10,000 | 2,40,000 |
| Electronic weighing balance | 1 | 75,000 | 75,000 |
| D.G. Set, Bore well, electricals | LS | 50,000 | 10, 00,000 |
| Total | 33,55,000 | ||
Other Fixed Assets |
|||
| Erection and installation 10% of plant and m/c | 3,36,000 | ||
| Office furniture | 5,00,000 | ||
| Pre-operative expenses | 2,00,000 | ||
| Total | 10,36,000 | ||
| Total Fixed Capital | 1,31,91,000 | ||
Working Capital (per month)
Staff and labour Wages
Designation |
Nos. |
Rate (Rs.) |
Amount (Rs.) |
| Manager | 1 | 25,000 | 25,000 |
| Sales, marketing, finance, purchase administration, office, laboratory, stores, computer and office staff | 15 | 1,50,000 | |
| Watchmen and peon | 6 | 3,500 | 21,000 |
| Total | 1,96,000 | ||
Production Staff |
|||
| Machine operators | 30 | 5,000 | 1,50,000 |
| Unskilled workers | 6 | 3,000 | 18,000 |
| Total | 1,68,000 | ||
| S. Total | 3,18,000 | ||
| Perquisites @22% | 70,000 | ||
| G. Total | G. Total | ||
Raw Material
Description |
Qty. (Kgs.) |
Rate/(Rs.) |
Amount (Rs.) |
| 40 S Cotton yarn | 27200 | 180 | 48,96,000 |
| Total | 48,96,000 | ||
Utilities |
(Rs.) |
| Electricity bill 37.5 x 25 x 4 x 0.8 x 24 | 72,000 |
| Water charges | 10,000 |
| Fuel Coal/furnace oil | 100,000 |
| Fuel for vehicle | 8,000 |
| Total | 1,90,000 |
Utilities (per month) |
(Rs.) |
| Electricity bill 37.5x 0.8x4x16x25 | 48,000 |
| Water charges lump sum | 2,000 |
| Total | 50,000 |
Other Contingent Expenses (per month) |
(Rs.) |
| Rent | - |
| Postage/stationery | 5,000 |
| Repair and maintenance | 12,000 |
| Transport/travelling charges | 50,000 |
| Insurance | 8,000 |
| Telephone bills | 10,000 |
| Total | 85,000 |
Total Recurring Expenses (per month) = Rs. 54,19,000
Total Working Capital for 3 months= = Rs. 1,62,57,000
Total Capital Investment
| Total fixed asset value | Rs. 1,31,91,000 |
| Working capital for 3 months | Rs. 1,62,57,000 |
| Total | Rs. 2,94,48,000 |
Machinery Utilisation
Machinery utilisation is considered as 75% of installed capacity.
Financial Analysis
Cost of Production (per year) |
(Rs.) |
| Recurring expenses | 6,50,28,000 |
| Depreciation on machinery @ 10% | 3,35,000 |
| Depreciation on office furniture and equipments @ 20%Depreciation on building and civil construction@ 5% | 1,00,000 2,75,000 |
| Interest on total investment @ 12% | 35,34,000 |
| Total | 6,92,72,000 |
Turnover (per year)
Product |
Kg. |
Rate/Kg. |
Amount (Rs.) |
| Cotton Knitted fabric | 3,20,800 | 269.92 | 8,65.90,000 |
| Total | 8,65,90,000 | ||
| Net Profit (per year) | Rs. 1,73,18,000 |
| Net Profit Ratio (Net Profit/ Turnover (per year) | 25% |
| Rate of Return on Investment (Net Profit/Total Capital Investment) | 58.8% |
Break-even Point
Fixed Cost |
(Rs.) |
| Depreciation | 710,000 |
| Interest on capital investment @12% | 35,34,000 |
| 40% of wages of staff and labour | 18,62,000 |
| 40% of other contingent expenses | 4,08,000 |
| Insurance | 96,000 |
| Total | 66,10,000 |
| B.E.P. | FC × 100 --------------- FC + Profit = 27.6% |
Addresses of Machinery and Equipment Suppliers
- M/s. Bharat Machinery Works
44, Industrial Area-A,
Ludhiana. - M/s. Moonlight Knitting Machinery
Works
Vishvakarma Colony,
Ludhiana. - M/s. S.T.M. Knitting Machinery
Works
Near Savitry Complex,
G.T. Road, Ludhiana. - M/s. T.S. Mechanical Works
Janta Nagar,
Ludhiana. - M/s. Raj Mechanical Works
410, Industrial Area-A,
Ludhiana. - M/s. Sohalson Knitting Machinery Works
Industrial Area-B,
Ludhiana. - M/s. Punjab Machinery Works
Vishvakarma Chowk,
Near Fire Brigade,
Ludhiana.
Raw Material Suppliers
- M/s. Mahavir Spinning and
General Mills
Hoshiarpur. - M/s. Abohar Co-operative
Spinning Mills
Abohar. - M/s. Adinath Textiles Ltd.
Registered Office,
Village Bholapur,
P. O. Sahibana,
Chandigarh Road,
Ludhiana. - M/s. Vardhman Spinning General Mills
Samarala Road,
Ludhiana.
For further information please contact
Information Manager
TIMEIS Project
E-mail: timeis@ficci.com
