Project Profile - LAP TOP BAG

INTRODUCTION

         Laptop Bags are used for carrying Laptop Computers safely and securely while you are on the move. They come in different shapes and designs, suiting the customer interests. There are a few varieties of the item, viz., Women Laptop Bags, Laptop Messenger Bags, Laptop Shoulder Bags, Laptop Backpacks, Laptop Sleeves, Hard Shell Laptop Bags, Rolling Laptop Bags, Laptop Bags for Laptop Accessories, etc. Of them, Laptop Shoulder Bags and Laptop Backpacks are of chief use.

MARKET POTENTIAL

         Nowadays, there is growing demand of these items in the society, especially with IT revolution worldwide. IT Professionals, Executives, Businessmen and others have started switching over from Desktop Computers to Laptop Computers for easy use. Laptop Computers are prone to scratches and damage during move. Laptop Bags prevent such destruction of the units and keep them handy, new and intact. Hence there is great demand for these items both in the domestic and international markets and people do not mind paying for them because of their great utility and attraction.

BASIS AND PRESUMPTIONS

1.
 Efficiency and working hours
Single shift basis consisting of 8 hours per day, 25 working days in a month and 300 working days in a year.
2.
 Time period for achieving the full envisaged capacity utilization
5 years
3.
 Labour & wages
Monthly basis
4.
 Interest rate for fixed working capital
16 %
5.
 Margin money
25 %
6.
 Operative period of the project
5 to 10 years.
7.
 Land and building
Rented.
8.
 Pay back period of loan
10 to 12 years.

IMPLEMENTATION SCHEDULE

1.
 Registration and other formalities
1 month
2.
 Land acquisition and quotation
2 months
3.
 Construction work
4 to 6 months
4.
 Machinery purchase and installation
2 to 3months
5.
 Trial production
1 month
Total
12 months

TECHNICAL ASPECTS

(i) PRODUCTION DETAILS & PROCESS OF MANUFACTURE:

         The components are marked as per the pattern on Rexene, Lining Rexene and are cut out. Then, adhesive is applied on the components and lining attached. Edges are beaded with beading wires and zips attached. Then, the components are assembled and stitched with the help of post-bed/cylinder bed sewing machine. The excess lining is trimmed and bags are reversed inside out. Handles, fancy fittings, buttons, etc are attached. Excess threads are trimmed and finishing done. The bags are stamped brand name, inspected and packed for dispatch.

(ii) QUALITY SPECIFICATION: As per the customers’ requirement.

(iii) Production Capacity:

Sl No.
 Item
Quantity
Rate (Rs.)
Value (Rs.)
1.
 Lap Top Bag
30,000 Nos.
1300/bag
3,90,00,000/-

(iv) Motive Power (Approximate):                     5 HP

(v) Pollution Control:

         There is no pollution from the production of Lap Top Bag. Hence, arrangement of pollution control does not arise.

(vi) Energy Conservation:

         The workers should be properly trained to operate the machines as and when required. They should be cautious to yield maximum units during the machine operation and should not be allowed to run the machine by motive power unnecessarily. The electrical line should be properly made and checked at regular intervals.

FINANCIAL ASPECTS:

1. Fixed Capital:

Land & Building
Rented – 4000 sq. ft.
Rs. 8,000 per month

2. Machinery and Equipment:

Sl.No.
 Description of Machinery & Equipment
Imp/Ind.
Qty Nos
Rate (Rs.)
Value (Rs.)
1.
 Post bed sewing machine (single needle)
Imp.
3
65,000
1,95,000
2.
 Cylinder bed sewing machine
"
3
70,000
2,10,000
3.
 Stamping machine
Ind.
1
20,000
20,000
4.
 Strap cutting machine
"
1
25,000
25,000
5.
 Tools & Equipment
"
 
 
15,000
6.
 Electrification & Installation charges@ 10% of the cost of machines
"
 
 
45,000
7.
 Cost of Office equipment
"
 
 
50,000
Total
5,60,000

3. Pre-operative Expenses                     Rs. 30,000

         Total Fixed Capital (2+3)                 Rs.5,90,000

WORKING CAPITAL (per month)

(i) Personnel/Technical (per month)

Sl.No.
 Description
No.
Salary (Rs.)
Total (Rs.)
1.
 Manager
1
6,000
6,000
2.
 Supervisor
1
3,500
3,500
3.
 Mechanic
1
3,500
3,500
4.
 Accountant-cum-Storekeeper
1
5,000
5,000
5.
 Clerk-cum-Typist
1
3,000
3,000
6.
 Peon
1
2,000
2,000
7.
 Watchman
1
2,000
2,000
8.
 Machine Operators
6
3,500
21,000
9.
 Skilled Workers
4
3,000
12,000
10.
 Unskilled Workers
4
1,500
6,000
Total
 
 
64,000
Add perquisites @ 20% on salary
 
 
12,800
Grand Total
 
 
76,800

(ii) Raw Materials (per month)

Sl.No.
 Description
Qty
Rate
Amount (Rs.)
1.
 Imported Rexene
5000 mtrs
400/mtr
20,00,000
2.
 Lining Rexene
2500 mtrs
150/mtr
3,75,000
3.
 U Foam Sheets
1250 Nos.
30/sheet
37,500
4.
 Card Board
1250 Nos.
50/sheet
62,500
5.
 Grinderies (Zip, Button, Fittings, etc.)
2500 Nos.
100/No.
2,50,000
6.
 Packing materials per 2500 bags
 
10/per bag
25,000
Total
27,50,000

(iii) Utilities (per month)

Sl.No.
 Description
Amount (Rs.)
1.
 Power
4,500
2.
 Water
500
 
Total
5,000

(iv) Other Contingent Expenses (per month)

Sl.No.
 Description
Amount (Rs.)
1.
 Repair & maintenance
1,000
2.
 Postage and Stationery
1,000
3.
 Transport charges
2,000
4.
 Telephone
2,000
5.
 Advertisement and publicity
2,000
6.
 Packing & forwarding charges
1,000
7.
 Insurance
2,000
8.
 Misc. Expenses
1,000
9.
 Rent
8,000
Total
28,000

(v) Total Recurring Expenditure (per month)

Sl.No.
 Description
Amount (Rs.)
1.
 Personnel - Salaries and wages
76,800
2.
 Raw Materials
27,50,000
3.
 Utilities
5,000
4.
 Other contingent expenses
20,000
Total Working capital per month
28,51,800

(vi) Working Capital for 3 months: Rs.85, 55, 400 (Say, Rs.85, 55, 000)

(vii) Total Capital Investment

Sl.No.
 Description
Amount (Rs.)
1.
 Fixed Capital
5,90,000
2.
 Working Capital for 3 months
85,55,000
Total
91,45,000

MACHINERY UTILIZATION

         Anticipated utilization of the machinery is about 75% to 90%. All machine operations are important. Hence, it is difficult to cut power supply to any particular machine, which is a bottleneck. However, it can be said that machines such as Sewing Machines occupy an important position in the manufacturing process. Hence, proper control and monitoring is required so that an even flow of production is assured. Moreover, the supervisory personnel should be effective enough to reduce the down time of the machine, carry out regular maintenance of the machines.

FINANCIAL ANALYSIS

(i) Cost of Production (per year)

Sl No.
 Description
Amount (Rs.)
1.
 Total recurring expenditure per year
3,42,20,000
2.
 Depreciation on machinery & equipment @ 10%
45,000
3.
 Depreciation on furniture, fixtures @20%
13,000
4.
 Interest on Total Capital Investment @ 16%
14,63,000
 
Total
3,57,41,000

(ii) Turnover (per year)

Sl.No.
 Description
Quantity
Rate (Rs.)
Value (Rs.)
1.
 Lap Top Bags
30,000 Nos.
Rs.1300/bg
3,90,00,000

(iii) Net Profit per annum (before taxation)

Annual Turn over 3,90,00,000
Cost of Production (-) 3,57,41,000
Net Profit 32,59,000

(iv) Net Profit Ratio:

        = Net Profit x 100 / Turn-over per year

        = 32,59,000 x 100 / 3,90,00,000

        = 8.3 %

(v) Rate of Return on Total Investment

        = Net Profit per year x 100 / Total Capital Investment

        = 32,59,000 x 100 / 91,45,000

        = 36%

BREAK EVEN ANALYSIS:

(i) Fixed Cost

Sl.No.
 Description
Amount (Rs.)
1.
 Total Depreciation On Machinery
45,000
2.
 Depreciation on Tools & Equipment
13,000
3.
 Interest on Total Investment
14,63,000
4.
 Rent for one year
96,000
5.
 40% of wages & salaries
3,68,640
6.
 40% of other contingents
57,600
7.
 Insurance
24,000
Total
30,67,240

BREAK EVEN POINT

B.E.P. = Fixed cost x 100 / Fixed cost + Net Profit

           = 30,67,240 x 100 / 30,67,240+ 32,59,000

           = 30,67,24,000 / 63,26,240

           = 48 %

ADDRESSES OF MACHINERY & EQUIPMENT SUPPLIERS

        1.     M/s. Leather & Packing Machinery Corporation,
                1/23B, Asaf Ali Road,
                New Delhi 110 02

        2.     M/s. Harman Sales Union,
                24, Kala Bhavan, Mathew Road,
                Mumbai 400 004

        3.     M/s. Srinivasan, No. 32,
                Bishop Garden, Chennai 600 028

        4.     M/s. NSIC Technical Services Center,
                Sector B.24, Guindy Indl. Estate,
                Eakkatuthangal Post, Chennai 600 097

        5.     M/s. Solar, Atur House,
                Worli Nagar, Mumbai 400 018

        6.     M/s. Raj Machine Home,
                35/118-D, Lashkarpur,
                Near Kamala Nagar, Agra 282 005

        7.     M/s Twin Star Engineering,
                No.2, Thiruneer Malai Road,
                Pammal, Chennai – 600075

        8.     Apparel & Leather Technics Pvt Ltd
                515, Avanashi Road, Tirpur – 641602

ADDRESSES OF RAW MATERIAL SUPPLIERS

        1.     M/s. Valliappa Leather Corporation,
                3/5&6, Narayana Chetty Street,
                Periamet, Chennai 600 003

        2.     M/s. T. Abdul Wahid & Co.,
                26, Veppery High Road,
                Chennai 600 003

        3.     M/s. Synthokem Industries,
                5, Hindi Parachar Sabha Street,
                Chennai 600 017

        4.     M/s. Bharani Agencies,
                126, Thumbu chetty Street,
                Chennai 600 001