WOOD SCREWS. Bureau of Indian Standards has laid down specifications for wood screws in IS-451

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1 A. INTRODUCTION WOOD SCREWS Wood screws are used in furniture industry, packing cases, Electrical wiring, railway carriages. In building construction work they are commonly used. The sizes of wood screw varies between smaller to bigger sizes. Even though there are several manufacturers of wooden screws the market is growing due increased house construction and requirement from new houses. B. PRODUCT USES & SPECIFICATION Bureau of Indian Standards has laid down specifications for wood screws in IS-451 C. MARKET POTENTIAL The product to be manufactured belong to the engineering sector and the general engineering sector has been growing well all these years at faster rate. There is continuous demand for this product as it is consumed in all engineering workshops. A strong engineering base exists in the state of Tamilnadu involving products ranging from automobiles, bicycles, castings and forgings, to textile machines, electrical and non-electrical machinery, pumps and transportation equipment. Engineering ancillary industries are concentrated in Chennai, Coimbatore, Salem, etc. The exports of engineering products from Tamil Nadu is around Rs billion (US $ 320 million) of which automobile ancillaries along contribute around US $ 150 million. It is an established fact that the automobile industry in the state accounts for nearly 50% of the All India export market. The strong engineering base consists of a network of nearly 3,000 units, employing a skilled workforce of more than 2.5 lakh, making high quality inputs such as castings and forgings and a wide variety of ancillary products. Intensive efforts are being made to boost further development of this industry. 1

2 D. TECHNICAL ASPECTS 1. Installed capacity The installed capacity is screws per day of 2 shifts, size ranging from 1/8 to 3/16 dia and length from ¼ to 1½, average weight is 3 gms. Per day production of screws is kgs, this works out to MT per annum of 300 days working. 2. Plant and Machinery The machinery list is given below: Description Qty. (Nos.) Value (Rs.lakhs) Double stroke heading M/c High speed screw head slotting M/c Thread cutting M/c Head shaving M/c Wire stand Nickel plating Misc. Tools 0.25 Other equipment 0.25 Total Manufacturing Process The manufacturing process of wood screw is as follows: The wire is fed to an automatic heading machine where the head is formed and parting off done according to desired length The slotting on head is made on slotting machine The threading is done on thread cutting machine Packing and Despatch 4. Raw Materials Hard Bright MS wire is used to manufacturing the wood screws, Nickel is used coating. 5. Land & Building A Built up area of 500 sqft. is required this may be taken on rental basis Rs.2500 per month. Advance Rs

3 6. Utilities Power: A power load of 6 HP is sufficient for the operation of the M/c. Water: Water is requirement human consumption only. Man Power: Category Nos. Monthly Total Salary Salary p.m. Supervisor Skilled workers Helpers Assistants Security Add: 20% benefits Total salary per annum (Rs.lakhs) Rs.4.75 lakhs 7. Implementation Schedule As the machines and materials are available indigenously, the project can be implemented within 3 months period if financial arrangements are made. 8. ASSUMPTION Installed Capacity per annum Wood Screws MT p.a. Capacity utilization - Year 1 60% - Year 2 70% - Year 3 80% Selling price Wood Screws Rs.75,000/MT Raw Material Qty (MT) Rate/MT Value (Rs.lakhs) MS Wire (including 5% wastage) Nickel Total

4 Consumables cost p.a. at 100% (Rs.lakhs) Rs.1.20 lakhs Power & Fuel at 100% (Rs.lakhs) Rs.0.97 lakh Wages & Salaries (Rs.lakhs) Rs.4.75 lakhs Repairs & Maintenance per month Rs.2,000 p.m Depreciation Straight Line method Administrative & General expenses p.m. Rs.5,000 Selling expenses 3% Interest on Term loan and Working capital 14% finance 4

5 LIST OF MACHINERY SUPPLIERS 1. A.M.I.Machine Tools 20. Ambalal Doshi Marg,(Hammam Street) Fort Mumbai Quality Machine Tools New 238 Linghi Chetty Strret Chennai Gujrat Machine Tools New 279, Linghi Chetty Street Chennai Premier Machine Tools New 103 Armenian Street Chennai Machine Centre New 214 linghi chetty Street Chennai LIST OF RAW MATERIAL SUPPLIERS 1. Sai Steel Centre 28-A, Mooker Nallamuthu Street Chennai Mahavir Indusrial Corporation New 273, Linghi Chetty Street Chennai Bhagawandas Metals ltd No.54 Sembudoss street Chennai Southern Iron and Steel company ltd No.7, Wallace garden Second Street Chennai P.K.Vaduvammal No.97, Rasappa Chetty Street Chennai

6 1. COST OF PROJECT [Rs.lakhs] Land & Building (Advance) 0.25 Plant & Machinery 6.00 Other Misc. assets 0.50 Pre-Operative expenses 0.50 Margin for WC MEANS OF FINANCE Capital 3.52 Term Loan

7 3. COST OF PRODUCTION & PROFITABILITY STATEMENTS Years Installed Capacity (MT) Utilisation 60% 70% 80% Production/Sales (MT) Selling Price/MT (in Rupee) 75,000 per MT Sales Value (Rs.lakhs) Raw Materials Consumables Power Wages & Salaries Repairs & Maintenance Depreciation Cost of Production Admin, & General expenses Selling expenses Interest on Term Loan Interest on Working Capital Total Profit Before Tax Provision for tax Profit After Tax Add: Depreciation Cash Accruals

8 4. WORKING CAPITAL: Months Values % Margin Bank Consumption Amount Finance Raw Materials % Consumables % Finished goods % Debtors % Expenses % PROFITABILITY RATIOS BASED ON 80% UTILISATION Profit after Tax 2.55 Sales % Profit before Interest and Tax 4.56 Total Investment % Profit after Tax 2.55 Promoters' Capital % 8

9 6. BREAK EVEN LEVEL Fixed Cost (FC): [Rs.lakhs] Wages & Salaries 5.24 Repairs & Maintenance 0.26 Depreciation 0.70 Admin. & General expenses 0.66 Interest on TL Profit Before Tax (P) 3.99 BEL = FC x x FC +P x % of installed capacity 9