The demand for the bricks will increase in line with the demand for construction.

Transcription

1 CONVENTIONAL BRICKS A. INTRODUCTION The construction activity is one of the vital sectors of the economy. There is hardly any sector in the economy where there is no construction involved. There has been tremendous increase in the growth of construction activities during the last decade and with the higher targets of growth envisaged by end of this century, and in the next century the construction activity is poised for further growth. The general construction sector consisting of industrial projects, agricultural projects, defence projects commercial establishments and housing sector, all contribute to the growth of construction activity. B. PRODUCT SPECIFICATION & USES IS specifies the strength of bricks as given below: Bricks having a compressive strength of minimum 35 kg/cm2 must be used for any work of permanent nature. Bricks having compressive strength 140 kg/cm2 are classified as class AA bricks. Bricks having a compressive strength between 70 and 140 kgs/cms2 are classified as class A bricks. According to IS common burnt clay bricks are classified on the basis of their average compressive strength as given in the specifications. C. MARKET POTENTIAL Every year several construction works are undertaken. Several bridges, dams, roads, shopping complexes, commercial complexes, hospitals, hotels, educational institutions, Govt. offices and residential houses are constructed. All these civil construction activities consume large quantity of bricks and therefore consumption of bricks is increasing. The demand for housing is increasing as there is a heavy backlog of houses to be constructed in India and there is a scope of adding 95 lakhs houses every year. This is creating good demand for construction of new flats and houses. 1

2 The present housing shortage is estimated at 19 million houses per annum. This is likely to touch 25 million in next 10 years. The investment required to meet the demand gap is expected to be $88 billion( about 352,000 crores) The urban sector alone is expected to account for an investment of $ 25 billion in next five years. The demand for housing is increasing as there is a heavy backlog of houses to be constructed in India and there is a scope of adding 200 lakhs houses every year. This allows a big demand for new flat and houses construction. The consumer demand for housing has increased manifold. The rise in nucleus families has increased the demand for the houses / flats. In the last few years, the real estate sector has witnessed a spurt in demand not just for residential property but also commercial property. This rise in demand may be attributed to the large and growing middle class population of about 300 million people. It is estimated that the urban housing sector alone would require a total investment of Rs.1,21,371 crores during the next five years to meet the requirement of housing shortage of 75.7 lakhs DUs (dwelling Units), upgradation of 3.2 lakh semi-pucca EWS ( Economically Weaker Section) units and the additional construction requirement of 86.7 lakh units. The total fund requirement including rural housing need would be 1,50,000 crores whereas the total availability is Rs.52,000 crores only from the formal sector (Rs.34,000 crores for urban and Rs.18,000 crores for rural housing). The demand for the bricks will increase in line with the demand for construction. 2

3 D. TECHNICAL ASPECTS 1. Installed capacity The installed capacity of the unit proposed is 40,00,000 pieces of bricks per annum. 2. Plant & Machinery The following items of plant & machinery are required. Sl. Item Value Rs. lakhs a. Chamber civil works consisting of 18 chambers with 8.60 the capacity of 17,000 Nos. of bricks in each chamber and 2 Ht. Platform surrounding the outer sides of chamber building with 4 width. b. Klin-covering all the 18 chambers and connected to height, 21 diameter M.S.Chimney c. Mould 0.50 d. Cart Wheeler 0.40 e. Water Buckets 0.20 f. Pumps & Motor 0.60 Total Manufacturing Process The following chart shows the manufacturing process of Bricks. Excavation of Clay Mixing of Clay with Sand Moulding Loading of Moulded bricks into chamber kiln Firing Removal of Bricks from Kiln Inspection 3

4 Packing and Loading 4. Raw Materials Raw materials required for manufacturing 40,00,000 bricks at 100% capacity utilisation per annum. Qty. Rate Value (Rs.lakhs) Clay 8400 MT Rs Sand 275 MT Rs Total Land & Building For installing the machinery required, a land area of 2 acres with constructed floor space of sq. ft. will be sufficient. A building area of sq. ft. is required for the following purpose: Area (sqft) Stock Sheds 1000 sqft. Moulding Sheds (Thatched) 4800 sqft. Coal Shed 800 sqft. Store Room 500 sqft. Office 500 sqft. Labour Quarters 5000 sqft. 6. Utilities Power: A single phase load is sufficient for lighting facility. The fuel (fire wood) required for firing bricks will be 50 MT per annum. Water: Water required per day is about 20,000 litres. Pollution: The project does not discharge any harmful effluents. 4

5 Man power: The direct labour required are as follows. Category Rate Per 1000 bricks Total Value No. of worker to Moulding Shifting (Dired Bricks to Chamber) Mounting (Arranging in firing kiln) Firing Firewood Transfer Dismounting Loading & Unloading Total In addition to above the unit proposes to appoint the following permanent staff: Category Nos. Salary/month Total salary Accountant Supervisor (Maistry) Day Watchman Night Watchman Add: 20% benefits 3000 Total Total salary per annum (Rs.lakhs) Rs.2.16 lakhs Total Wages & salaries per annum Rs lakhs (Rs.8.28+Rs2.16 lakhs 7. Implementation Schedule The chamber could be constructed within a period of 3 months. The building could be constructed in a period of 4 months. The project could be implemented within a period of 6 months after the idea is conceived. 5

6 8. ASSUMPTIONS Installed capacity is 40,00,000 of bricks per annum. During first year, the capacity utilisation is at 60%. This will be increased to 70% and 80% in subsequent years. Selling price is assumed at Rs.3000 per 1000 bricks Cost of raw materials Rs lakhs at 100% utilization per annum. Power charge is estimated at the current rate, this works out to Rs.3,000 per annum. Wages & Salaries is estimated at Rs lakhs per annum. Repairs & Maintenance is estimated at Rs.2000 per month. Depreciation is calculated on WDV method Selling, General & Adm. expenses is Rs per month. Interest on Term Loan & working capital borrowings are estimated at 12%. Income tax is provided at 33.99% on taxable income. LIST OF MACHINERY SUPPLIERS The chamber is normally constructed by experienced masons under the supervision of civil engineers, who should be locally available. The chimney can be procured from any engineering fabricators. LIST OF RAW MATERIAL SUPPLIERS Suitable sources of clay has to be located nearer the proposed site of the chamber brick factory, so as to reduce the excavation and transportation cost. About 10 acres of land is required for continuous supply of clay. 6

7 1. COST OF PROJECT Rs.lakhs Land Building Plant & Machinery Other Misc. assets 0.00 Pre-Operative expenses 2.00 Margin for WC MEANS OF FINANCE Capital Term Loan COSTOF PRODUCTION & PROFITABILITY STATEMENTS Years Installed Capacity (No. of bricks) p.a Utilisation 60% 70% 80% Production/Sales (No. of bricks) p.a Selling Price Rs.3,000 per 1000 bricks Sales Value Raw Materials Consumables (Rs.5000 p.m.) Electricity Fuel (Coal 50 Rs2500 / MT) Wages & Salaries Repairs & Maintenance Depreciation Cost of Production Admin, & General expenses Interest on Term Loan Interest on Working Capital Total Profit Before Tax Provision for tax Profit After Tax

8 Add: Depreciation Cash Accruals WORKING CAPITAL: Months Values % Margin Bank Consumptions Amount Finance Raw Materials % Fuel % Finished goods % Debtors % Expenses % Say --> Rs.7.70 lakhs 6. PROFITABILITY RATIOS BASED ON 80% UTILISATION Profit after Tax % Sales Profit before Interest and Tax % Total Investment Profit after Tax % Promoters Capital BREAK EVEN LEVEL Fixed Cost (FC): Rs.lakhs Wages & Salaries Repairs & maintenance 0.26 Depreciation 0.37 Admin. & General expenses 2.65 Interest on TL Profit Before Tax (P) BEL = FC x x 80 x 100 FC +P % of installed capacity 8