PROJECT PROFILE : ETHINIC FOOTWEAR

INTRODUCTION As per the traditional and modern demands of the people, footwears are made in various designs. The Ethnic Footwears are made according to the requirements of the customers. This type of chappal, which serves multi-purpose, is mainly used in villages, deriving the name Ethnic Footwear. This chappal is prepared with leather/velvet upper. Embroidery work is done on the upper which is stitched on to the leather sole. This chappal is made completely as one piece. This is without lace so it is easy to wear and remove. It is famous among the people of Rajasthan and is known as Jodhpuri chappals. Since Madhya Pradesh is bordering Rajasthan, about 90% of the people of MP in villages also use these chappals. According to the liking and demands of customers, various colours and designs of these chappals are made. Wearing these chappals has become fashion, including special occasions like marriages and festivals.

MARKET POTENTIAL At present, there is heavy demand for this item in the market. This item is far more convenient also for agro-work. The villagers, therefore, like to wear them. As it is also a fancy wear, embroidery work is done to make it more attractive and embossing. There is a lot of demand for this item in Haryana, Punjab, Uttar Pradesh, Madhya Pradesh, etc other than its home-state Rajasthan. In order to exploit the said market potential, some units can also be started in States like Kerala.

BASIS AND PRESUMPTION:

Single Shift basis consisting of 8 Hours per 1. Efficiency and Working Hours day, 25 working days in a A month and 300 working days in a year 2. The time period for achieving the full-envisaged capacity 1 to 1 1/2 years utilization 3. Labour wages Monthly basis 4. Interest Rate for fixed working 18 % capital 5. Margin Money 25 % 6. Operative Period of the Project 2 to 10 years 7. Land and Building Rented 8. Pay back period of Loan 10 Years
IMPLEMENTATION SCHEDULE

1. Registration and Other formalities 2. Land acquisition and Quotation

1 month 2 months

3. Construction Work 4. Machinery Purchasing and its Installation 5. Trail Production

4 to 5 months 2 to 3 months 1 month - (total 12 months)

TECHNICAL ASPECTS (i) PRODUCTION DETAILS AND PROCESS OF MANUFACTURE First the pattern is cut according to the size for preparing Ethnic Footwear. According to the Pattern foam, Velvet is cut and design is made on that and Embroidery work is done. After Embroidery work Goat Leather As there is stitched in lower side and is cut according to the upper. After preparing upper sole is cut according to the pattern. After cutting the sole and upper is placed inner portion of sole and hand stitch is made by thread. At least one small piece of leather is stitched on the back portion of the chapel stitching the upper chappal is given correct shape by putting chappal last and after finishing it is inspected and is packed. (ii) Quality Specification:

At present no quality specifications for Ethnic Footwear are available. But for export order, specifications are provided by the buyers only. The raw materials for Ethnic Footwear should have good quality of uppers and have soft type sole should be uniform co lour. Care should be taken to click the right components from the right portion of the leather. Before taking different components to the closing section, inspection is to be done to ensure quality. Good quality thread is to be used to ensure proper stitches between different components. (iii) Production Capacity (Per Annum)

i) Quantity ii) Value (iv) MOTIVE POWER 3 K.W.

22,500 pairs Rs. 32,17,500

(v) Pollution Control

Not Applicable

(vi) Energy Conservation:

FINANCIAL ASPECTS

1.FIXED CAPITAL: Land & Building Covered Area 100 Sq. Met.

Rented Rs.5, 000 per month

2. Machinery & Equipments

SL. No. 1 2 3 4 5 6 7

Machinery & Equipments Description Flat Bed Sewing Machine with Motor, Stand & Table Clutch Type Combined Finishing Machine Stappling Machine Plastic Last (Chappal) Tools, Equipments Electrification and Installation Charges @ 10% of machine cost Office Equipment, Furniture etc. Total

IMP. /IND QTY. Ind Ind Ind Ind 2Nos. 1 1 100 pairs L.S. L.S. L.S.

RATE Rs. 10,000 80,000, 30,000 300

Value Rs. 20,000 80,000 30,000 30,000 10,000 14,000 20,000 2,04,000

PRE OPERATIVE EXPENSES Total Fixed Capital (2+3) 3. Working Capital (per month)

Rs. 20,000 Rs 2,24,000

a) Personnel (Administrative and Supervisory) per month S No. Description 1 2 3 4 5 6 7 8 Footwear Technologist/Production Manager Designer Supervisor Accountant-cum-Cashier Clerk-cum-Typist Mechanic Machine Operator/Skilled Worker Semi Skilled Worker No 1 1 1 1 1 1 5 4 Salary @ Rs. 7000 6000 5000 4000 3000 3500 3500 2000 Total (Rs.) 7000 6000 5000 4000 3000 3500 17,500 8000

9 10

Store Keeper Peon/Chowkidar Total Perquisites @ 20% Total

1 1

2500 2000

2500 2000 58,500 11,700 70,200

b) Raw materials (PM)

SL No 1 2 3 4 5 6

Description Velvet Goat leather V-T Sole Canvas/Foam Embroidery Grindery item Total

Qty 124 meter 9,300 dcm. 450 kg 90 meter 1875 pairs 1875 pair

Rate Rs 100/met. Rs 4/dcm. Rs 125/kg Rs 60/met Rs 5/pair Rs 5/pair

Value (Rs) 12,400 37,200 56,250 5,400 9,375 9,375 1,30,000

c) Utilites (PM)

SL.NO 1 2

Description Power Water Total

Amount(Rs) 4,500 500 5,000

d) Other Contingent Expenses (PM)

SL No 1 2 3 4 5 6 7 8 9

Description Rent Postage & Stationery Transport Charges Telephone Repair & Maintenance Advertisement & Publicity Insurance Taxes Misc. Expenses Total

Value (Rs) 5,000 2,000 2,000 2,000 2,000 4,000 1,000 1,000 1,000 20,000

e) Total Recurring Expenditure (PM)

SL No

Description

Amount(Rs)

1 2 3 4

Personnel Raw Materials Utilities Other Contingents Expenses Working Capital Per Month

70,200 1,30,000 5,000 20,000 2,25,200

Total Working Capital for 3 months:

Rs 6,75,600

5. TOTAL CAPITAL INVESTMENT

Sl No 1 2

Description Fixed Capital Working Capital for 3 months Total

Amount(Rs) 2,24,000 6,75,600 8,99,600

6. MACHINERY UTILISATION As stitching process is a bottleneck in production, care should be taken

Sl.No 1 2 3 4

Description Total Recurring Expenditure per year Depreciation of Machinery & Equipment @ 10% Depreciation on PVC Last @ 20% Interest on total Investment @ 18% Total

Amount(Rs) 27,02,400 14,000 6,000 1,61,928 28,84,328

2) TURN OVER (PER ANNUM)

Sl No 1

Description Chappals

Qty Pcs 22,500 Pairs

Rate @ Rs Rs 143/pair

Value (Rs) 32,17,500

3) NET PROFIT PER ANNUM Annual Turnover Cost of Production :

Rs. 32,17,500- 28,84,328 = Rs. 3,33,172

4) NET PROFIT RATIO

Net Profit x 100/ Turnover per Annum

3,33,172x 100/ 32,17,500

= 10.3 %

5) RATE OF RETURN

Net Profit per year x 100/ Total Capital Investment Profit

3,33,172x100/ 8,99,600 =Rs.1,51,258/-

= 37%

BREAK EVEN ANALYSIS (i) Fixed Cost (Per Annum)

Sl No 1 2 3 4 5 6 7

Dscription Amount(Rs) Depreciation on machinery and equipment 14,000 Rent for one year 60,000 Depreciation on Office Equipment 4,000 Depreciation on PVC Last 6,000 Interest on Capital Investment 1,61,928 40% Salary 3,36,960 40% of other Contingent Expenses excluding 72,000 Rent Total 6,54,888

BREAK EVEN POINT B E P = FIXED COST X 100/ FIXED COST +PROFIT

= 6,54,888 x 100/ 6,54,888+3,33,172 = 6,54,888 x 100/ 9,88,060 = 66%

ADDRESSES OF MACHINERY & EQUIPMENT SUPPLIERS

1. M/s. Leather & PackingMachinery 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 Centre, 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 Kamla Nagar, Agra 282 005 7. M/s Twin Star Engineering, No.2, Thiruneer Malai Road, Pammal, Chennai 600075 9. 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 Adhesive 4. M/s. Bharani Agencies, 126, Thanmbuchetty Street, Chennai 600 001 Grinderies 5. M/s. Sanghvi Shoe Accessories Pvt. Ltd., 3, Hari Kripa, 10th Road,Chembur, Mumbai 400 071 Shoe Last 6. M/s. Toscana (Shoe lasts) Limited. Flat No. 190,Block 48,LIC Colony, Anna Nagar West Extn., Chennai- 600101 Shoe Last