Profile No.

: 128 NIC Code:25119

SHEET METAL FABRICATION

1. INTRODUCTION:

Metal fabrication is the building of metal components and structures by cutting, bending, and
assembling processes.
A fab shop will bid on a job, usually based on the engineering drawings, to build the end product.
Large fab shops will employ a multitude of value added processes in one plant or facility including
welding, cutting, forming and machining. These large fab shops offer additional value to their
customers by limiting the need for purchasing personnel to locate multiple vendors for different
services.

2. PRODUCT & ITS APPLICATION:

Sheet metal Fabrication is a value added process that involves the creation of machines parts,
panels, and structures from various steel sheet as raw materials.
Sheet Metal fabrication jobs usually start with design drawings including precise measurements
as per customer or product specifications. The sheets are then move to the fabrication stage
where different parts of design specified are cut from sheets or punched, bent, formed, deep
drawn, and finally all the parts are welded or fastened to give final products. Some of the items
may be joined at installation stage of the final product / project.

Sheet Metal Fabrication shops are employed by contractors, Original equipment manufacturers
and Value Added Re-sellers. Typical projects include loose parts, structural frames for machines
and equipment ranging from domestic appliances viz washing machine, refrigerator and furniture
items viz stairs and hand railings fences for buildings to industrial machine panels, automobile
body parts.
3. DESIRED QUALIFICATIONS FOR PROMOTER:

Any ITI, Diploma or graduate preferably with fabrication or marketing experience.

4. INDUSTRY OUTLOOK/TREND

The global sheet metal market can be bifurcated into automobile, aerospace, building &
construction for roofing/ panels etc, steel pipes and tube industries, Air-Conditioning Ducts Pipe,
agricultural machinery, shipbuilding, and others machinery viz industrial, chemical, pharma,
food, etc as well as in in furniture, utensils, consumer durable and electronic and computer
industry, etc. The products are used in large volumes. Steel sheets of various grades, stainless
steel, Aluminum and brass, copper etc sheet metals parts are being consumed in variety of
equipment.

The global sheet metal equipment market is growing steadily since last decade and will post a
CAGR of almost 7% by 2020. The market analysis identifies the growing demand for fabricated
metal products. Though most manufacturing companies produce only a limited range of
products, the requirement of fabricated metals has been considerably high in automotive and
consumer durable/ appliances segments and other local machinery segments. The market of
sheet metal fabricators and part manufacturers appears to be fragmented as competition among
the major vendors in the market is quite intense in automotive and consumer durable market
leaving out several industrial and electronics product market having huge demand that is still
not met fully by local vendors.

The industry has several regional and local vendors offering customized parts having reasonable
volumes at a comparatively lower cost, in turn, posing a stiff competition to international
vendors. Though there are entry barriers for in terms of quality, features, functionalities, and
services. The introduction of new products in computer, electronic, kitchen appliance, etc will
generate new demand with new features and technologies that can be tapped by new units and
offer competition to existing vendors.
5. MARKET POTENTIAL AND MARKETING ISSUES. IF ANY:
Precision Sheet metal components and structures are having wide use in industrial and
machinery manufacturing activities.

The main industries that require the sheet metal components are all types of automobile, off
road, heavy vehicles for body and other components, domestic white goods, electronics for
equipment chassis, material handling and mining, electrical control panels and internal
components like cable trays, rails etc., Industrial machine casings, guards, housing and
construction industry, medical equipment, defense and aviation sector.

All of these sectors are undergoing rapid growth in our country. Also there is good scope for
exports of precision sheet metal components for diverse applications in electrical and electronic
etc.

The entrepreneur should develop precision products in different industry sectors for diverse
application and emerge as innovative and reliable supplier for success.

6. RAW MATERIAL REQUIREMENTS:

CR carbon steel, stainless steel, etc. are the usual starting materials for fabrication, along with
the welding wire, flux, and fasteners that will join the cut pieces. Other materials may include,
welding electrodes, surface treatment chemicals etc. Steel sheets of various grades and gauges
are required as per the customers’ specifications.

7. MANUFACTURING PROCESS:

Sheet Metal fabrication involves various processing technologies ranging from most common to
advanced system depending on size, shape, other complexities, precision of components as well
as volume to be produced.

The process variants are indicated along with the processes used in these shops.

 Cutting may be done by sawing, shearing, or gas torching, or by CNC cutting machines.
Viz, Laser or water jet.
  Bending may be done by manual or electric powered or hydraulic presses with simple or
complex die shapes as per need. Modern metal fabricators use CNC controlled machines
to mark bend lines in the correct position. CNC controlled press brakes are very efficient.
 Punching may be done with manual or powered fly press, or hydraulic press.
 Assembling – joining of the pieces is done by arc gas or electro resistant type spot and
seam welding. Other methods used are riveting, threaded fasteners, or bending and
crimping and bead formations with help of special machines.
 As with other manufacturing processes, both human labor and automation is used. The
manipulators or positioners and jigs and fixtures are used. Shops that specialize in this
type of metal work may carry out surface treatments like pickling, passivation and spray/
powder painting of components.

8. MANPOWER REQUIREMENT:

The unit shall require highly skilled service persons. The unit can start from 15 employees initially
and increase to 42 or more depending on business volume.

Monthly
Sr No Type of Employees No of Employees
Salary
Year 1 Year 2 Year 3 Year 4 Year 5
1 Skilled Operators 16000 3 6 8 10 12
2 Semi-Skilled/ Helpers 7000 10 12 15 18 24
3 Supervisor/ Manager 20000 0 1 1 1 1
4 Accounts/ Marketing 15000 1 1 2 3 3

5 Other Staff 7000 1 2 2 2 2

TOTAL 15 22 28 34 42

9. IMPLEMENTATION SCHEDULE:

The unit can be implemented within 6 months from the serious initiation of project work.
 Time Required in
Sr No Activities
Months
1 Acquisition of Premises 2
2 Construction (if Applicable) 2
3 Procurement and Installation of Plant and Machinery 2
4 Arrangement of Finance 2
5 Manpower Recruitment and start up 2

Total Time Required (Some Activities run concurrently) 6

10. COST OF PROJECT:

The unit will require total project cost of Rs 137.33 lakhs as shown below:

Sr No Particulars In Lakhs

1 Land 15.00
2 Building 30.00
3 Plant and Machinery 68.15
4 Fixtures and Electrical Installation 3.70
5 Other Assets/ Preliminary and Preoperative Expenses 1.50
6 Margin for working Capital 18.98

TOTAL PROJECT COST 137.33

11. MEANS OF FINANCE:

The project will require promoter to invest about Rs 48.57 lakhs and seek bank loans of Rs 88.76
lakhs based on 70% loan on fixed assets.

Sr No Particulars In Lakhs

1 Promoters Contribution 48.57

2 Loan Finance 88.76
TOTAL: 137.33
12. WORKING CAPITAL REQUIREMENTS:

Working capital requirements are calculated as below:

Gross Margin Margin Bank

Sr No Particulars
Amount % Amount Finance
1 Inventories 11.09 40 4.44 6.65
2 Receivables 10.12 40 4.05 6.07
3 Overheads 4.43 100 4.43 0.00
4 Creditors 15.18 40 6.07 9.11
TOTAL 40.81 18.98 21.83

13. LIST OF MACHINERY REQUIRED:

Sr No Particulars UOM Qty Rate Total Value

Main Machines/ Equipment

1 Sheet Shearing Machine Nos 1 200000 200000

2 Laser/ Plasma Profile cutting m/cs Nos 2 800000 1600000

2 Hydraulic Press Brake Nos 1 450000 450000

3 Hydraulic Press Nos 2 850000 1700000

4 Mech Power Press Nos 1 250000 250000

5 Manual Shearing Press Nos 3 40000 120000

6 Manual Sheet Folding Machines Nos 2 45000 90000

7 Fly Press Nos 3 35000 105000

Sr No Particulars UOM Qty Rate Total Value

8 Spot Seam etc. Welding M/c Nos 4 80000 320000

9 Profile Rolling Machine Nos 2 350000 700000

 10 Beading Curling Machine Nos 1 120000 120000

11 Pillar Drill Nos 1 50000 50000

12 Lathe Nos 1 60000 60000

13 Sand Blasting Machine Nos 1 200000 200000

14 Pickling and Surface treatment Nos 1 200000 200000

15 Spray/ Powder Paint Shop Nos 1 250000 250000

16 Paint Baking oven Nos 1 200000 200000

Subtotal: 6615000

Tools and Ancillaries

1 Misc. equipment Dies tools etc. LS 1 150000 150000

2 Hand Tools and gauges LS 1 50000 50000

Subtotal: 200000

Fixtures and Elect Installation

Storage and transport bins LS 1 50000 50000

Office Furniture LS 1 20000 20000

Telephones/ Computer LS 1 50000 50000

Electrical Installation LS 1 250000 250000

Subtotal: 370000

Other Assets/ Preliminary and

LS 1 150000 150000
Preoperative Expenses

TOTAL PLANT MACHINERY COST 7335000

All the machines and equipments are available from local manufacturers. The entrepreneur
needs to ensure proper selection of product mix and proper type of dies and tooling to have
modern and flexible utensil designs. It may be worthwhile to look at reconditioned imported
machines, dies and toolings. Some of the machinery and dies and toolings suppliers are listed
here below:
1. PMT MACHINES LTD.
 Behind PCMC Building, Mumbai-Pune Road, Pimpri,
Pune 411 018. Maharashtra, India.

2. Machineries and Spares

Ranjit Chawla (Director)201, Karmastambh, LBS Marg, Vikhroli West
Mumbai - 400083, Maharashtra, India

2. Pacific Engineering Corporation

A-297, MIDC-Mahape, Near Mahape Bus Depot,
Anthony Garage, Thane-Belapur Road, Mahape Midc,
Navi Mumbai-400710, Maharashtra, India

3. Face Automation
D215A, Ghatkopar Industrial Estate,
Agra Road Industrial Premises Co Operative Society Limited,
LBS Marg, Ghatkopar West, Mumbai- 400086, Maharashtra, India

Other well known machine manufacturers can be searched from directories/ internet are ACME
TOOLINGS, Ace Manufacturing Systems Ltd., Batliboi Ltd., Bharat Fritz Werner Ltd. , HMT
Machine Tools Ltd., Advani Oerlikon Ltd, Lakshmi Machine Works Ltd., TAL Manufacturing
Solutions Ltd., Vigel Manufacturing Technologies (P) Ltd, Lokesh Machines Ltd., Praga Tools
Ltd. , Toolcraft Systems Pvt. Ltd. , Vaddigiri Factory Automation Pvt Ltd

14. PROFITABILITY CALCULATIONS:

Sr No Particulars UOM Year Wise estimates

Year 1 Year 2 Year 3 Year 4 Year 5

1 Capacity Utilization % 40 50 60 70 80

2 Sales Rs. Lakhs 121.42 151.77 182.13 212.48 242.84

3 Raw Materials & Other Direct Rs. Lakhs 88.70 110.88 133.06 155.23 177.41
 Inputs

4 Gross Margin Rs. Lakhs 32.72 40.89 49.07 57.25 65.43

5 Overheads Except Interest Rs. Lakhs 14.13 14.13 14.13 14.13 14.13

6 Interest Rs. Lakhs 12.43 12.43 12.43 12.43 12.43

7 Depreciation Rs. Lakhs 10.34 10.34 10.34 10.34 10.34

8 Net Profit Before Tax Rs. Lakhs -4.17 4.01 12.19 20.36 28.54

The basis of profitability calculation:

The Unit will have capacity 350 MT of sheet metal parts. The sales prices range from Rs 40 per
kg to Rs 150 per kg for depending on materials/ grade of metal used, complexities of cutting/
blanking/ bending and fabrication, scrap generation as well as volumes. The material
requirements are considered for carbon steel from Rs 30 to 60 per kg including angles and
sections. The SS prices range from 150 to 230per kg, Brass/ bronze and copper material cost
and sales prices vary according to base metal prices.

Depending on volume, the die costs are to be amortized for new components. Consumables
costs also considered at prevailing market rate. Energy Costs are considered at Rs 7 per Kwh.
The depreciation of plant is taken at 10 % and Interest costs are taken at 14 -15 % depending
on type of industry.

15. BREAK EVEN ANALYSIS

The project is can reach break-even capacity at 45.10 % of the installed capacity as depicted
here below:

Sr No Particulars UOM Value

1 Sales at Full Capacity Rs. Lakhs 303.55

2 Variable Costs Rs. Lakhs 221.76

 3 Fixed Cost incl. Interest Rs. Lakhs 36.89

4 Break Even Capacity % of Inst Capacity 45.10

16. STATUTORY/ GOVERNMENT APPROVALS

The unit will require state industry unit registration with District Industry center. No other
procedures are involved. For export, IEC Code and local authority clearances. The industry
registration and approval for factory plan, safety etc are required as per factory inspectorate
and labor laws. Other registration as per Labor laws are ESI, PF etc. Before starting the unit will
also need GST registration for procurement of materials as also for sale of goods. As such there
is no pollution control registration requirements, however the unit will have to ensure safe
environment through installation of chimney etc as per rules. Solid waste disposal shall have to
meet the required norms. Entrepreneur may contact State Pollution Control Board where ever it
is applicable.

17. BACKWARD AND FORWARD INTEGRATION

The machines and equipment offer scope for diversification in to producing several consumer
and industrial parts/ components and parts. The unit can utilize the spare capacities. As such
there is not much scope for organic backward or forward integration. The entrepreneur needs
to ensure proper selection of Job mix and also be careful in maintaining product parameters in
terms of dimensions, tolerances and geometric profiles along with final weights of products.

The workshop business needs building up reputation, ensuring reliability and quality of services
rendered. Also personal rapport of key persons can generate good business volumes from OEM
units and ancillary component unit. The location with good catchment area ensures good market
potential to new business units.

18. TRAINING CENTERS/COURSES

There are no specific training centers for production technology. However foundry technology
can be obtained by joining as apprentice in foundry units. The Prototype Development Centers
can provide some assistance and for foundry technology, casting, machining, dies and Tools
development, courses run by centers of excellence viz Indo German Tool Room at Ahmedabad,
Rajkot, Chennai, etc shall be helpful.

The most important scope of learning is in new product design and development by study of the
new product designs, product range, features and specifications of leading Brands / competitors
across the world by scanning the Internet and downloading data from websites of Viz. North
American, Europe, China etc markets.

Udyamimitra portal (link: www.udyamimitra.in) can also be accessed for hand-holding services
viz. application filling / project report preparation, EDP, financial Training, Skill Development,
mentoring etc.

Entrepreneurship program helps to run business successfully is also available from Institutes like
Entrepreneurship Development Institute of India (EDII) and its affiliates all over India.

Disclaimer:
Only few machine manufacturers are mentioned in the profile, although many machine
manufacturers are available in the market. The addresses given for machinery manufacturers
have been taken from reliable sources, to the best of knowledge and contacts. However, no
responsibility is admitted, in case any inadvertent error or incorrectness is noticed
therein. Further the same have been given by way of information only and do not carry any
recommendation.