BUSINESS PLAN ON INDUSTRIAL PRODUCT

- WHITE GOLD(RECYCLED COTTON YARN)

PRESENTED BY-

AKSHAY BHARTI(16)

PIYUSH SINGLA (24)

ABOUT TEXTILE INDUSTRY

The Indian textile industry is one the most important industries for the Indian economy.

Its importance is underlined by the fact that it accounts for around 4% of GDP, 14% of the industrial production and 17% of the country’s total export earnings.

Besides, the sector employs nearly 35 mn employees; the textile industry is the second-largest employment generating industry in both rural and urban areas, after the agriculture industry.

 India is aiming at textile exports of $60 billion in 2014-15 as it will seek to encash on the increased demand from the developed nations and its traditional partners in the international market.

GOVERNMENT INITIATIVESTechnology Upgradation Fund Scheme (TUFS)As on March 31, 2008, the government sanctioned Rs

725.2 bn and disbursed Rs 609.5 bn under the TUFSIn June 2013, the government released an additional

subsidy of Rs 25.5 bn in the textile sector under the TUFS.

GOVERNMENT INITIATIVESInitiatives under National Textile Policy (NTP) 2000The rate of depreciation for investment in high-tech

processing machines has been increased from 25% to 50%.

The import duty on specified hi-tech processing machines has been brought down to 5%.

Import of hi-tech processing machines has been permitted under zero duty Export Promotion Capital Goods Scheme.

BASIC IDEA OF BUSINESSThe basic idea of business is to convert tailor

cutting cotton waste into WHITE GOLD which has varied uses.

White gold is used in manufacturing of- 1. Canvas cloth2. Curtains ,bed sheets and other handloom

products3. Door mats4. Floor wipers5. Carry bags

COMPANY PROFILE

Product type – Recycled cotton yarnProduct name – WHITE GOLDCompany name – NEW AGE SPINNERSCompany address – vill. Madhana, Gohana road , PanipatDirectors – Piyush Singla and Akshay Bharti

INVESTMENTTotal investment = Rs 5.43crCapital brought by partners = Rs 2cr eachCash credit from Union bank of India = 1.43cr against

collateral security of factory premises

CONVERSION PROCESS OF INPUTS

Cotton waste(tailor cutting)

Bleaching process Carding process of converting tailor cutting to break comber

SWOT ANALYSIS

StrengthWeakness

Opportunity

Threat

1. Low technical knowledge required

2. Easy availability of man power

3. Huge demand

1. Shade and shade variations

2. Loss due to power failure

3. High initial investment

1. Competition from international brands

2. Competitors practice of labour poaching

3. Loss due to fire

1. Subsidy from government

2. Continous market demand

3. High return on investment

LAYOUT OF FACTORY

120ft * 430ft = 51600sqft

DEMAND FORECASTCollective opinion test

sample method

1. number of yarn traders = 147 (as per THE PANIPAT YARN TRADER

ASSN.)

2. number of export houses = 73

3. 55 samples collected under opinion method 4. on an average the sales of yarn traders are 8000kg a day and for export houses 4000kg a day

Expenditure : fixed and working capital expenditureFixed capital

1. Land – Rs 1.18cr (1.18 acre @ 1cr/acre)

2. building – Rs1.20cr( for building construction and office)

3. machinery – Rs1.85cr

(3 open ends D1- Rs 84,00,000

8 card machines- Rs 48,00,000

2 blow rooms- Rs 38,00,000

weighing scale- Rs 9,00,000

power factor- Rs 5,00,000

office furniture- Rs 1,00,000)

4. hotline electricity connection – Rs 12 lac

5. AC plant – Rs 6 lac

6. borewell – Rs 3 lac (2 connections 3 inches)

7. Registration fees – Rs 1,61,000

Expenditure : fixed and working capital expenditure

Working capital

1. Conversion expenses – Rs 38,33,268

2. Raw material – Rs 59,50,000

BLENDINGBreak comber (95%) - 6175*30days = 185250*Rs.29.5=

Rs54,64,875

Polyster cotton(P.C) (5%)- 325kg*30 = 9750*49.75=

Rs.4,85,125

*5% yield wastage on blended quantity resulting to increasing cost of blending per kg

CONVERSION EXPENSESDetails Cost per kg Amount

Blow room conversion cost

195000 kgs*Rs 3/kg 5,85,000

Card room conversion cost

185000kgs*Rs 2.5/kg 4,62,500

Open end conversion cost

185000kgs*Rs 2.5/kg 4,62,500

Packing expenses 3600*10 36,000

total 15,40,000

SALARY CHARTParticulars Amount (Rs.)

Gate keeper 6000*2 = Rs.12000

Electrician 20000

Junior electrician 9000*2 = Rs.18000

Weighing scale operator 7500

Store manager 16000

Accountant 25000

Intern for accountant 6500

Bahadur for office 4000

Ladies labour 30000 for month

SALARY CHART CONTD.Particulars Amount (Rs.)

Field boy (2) (sales) 30000

Field boy (spares) 10000

General production manager 340000

Godown keeper 18000

Sweepers (2) 9000

Total 2,40,000

SUPPLIERS DETAILSG.G. spuntex

Across pakka kabri fatak, kabri road , panipat

Phone number- 9034560008 (Mr. Manish)

breakcomber @ Rs29.5/kg

Under an agreement for a quarter to supply 6000 kg breakcomber daily by his conveyance to our factory premise.

CONTINGENCY PLAN FOR SUPPLIERS (LOCAL)Prem cottex @ Rs. 30.25/kg

Shree Durga Spinning Mills @ Rs. 30.50/kg

Mahaluxmi Trading Co. @ Rs. 30/kg

OUR CUSTOMERSPrince Yarns Gangapuri road, sanoli road, panipat

Royal Yarns Old yarn market, panipat

Channana Yarns City chowk, near lal masjid, panipat

Banga Yarns New yarn market, S.D college road, panipat

COMPETITOR’S ANALYSISAverage rate of yarn per kg in the market is Rs 64Major competitors are as follows-

- Gupta overseas @ 65/kg

- Chirag spinning mills @ 64/kg

- Vishal spinning mills @ 65/kg

- Gupta international @ 64.2/kg

CONTINGENCY PLANLoss by theft and fire (covered under Insurance)- annual

premium of Rs38,609 against stock of Rs 50lacs

Machinery insurance- annual premium of Rs 2,15,621 against machinery costing Rs.1.85cr

Provision for bad debts- Rs 20,000/month

Building insurance- annual premium of Rs 47,281 against building costing Rs 50 lacs

SEGMENTATION, TARGETING AND POSITIONINGo SEGMENTATION

On the basis of UV and NON-UV clear yarn

On the basis of various counts of production

o TARGETING

Export houses, traders and inter state dealers

o POSITIONING

Penetration pricing and brand creation within a time span of next 10 years

TRADING A/C

Particulars Amount (Rs)

Particulars Amount (Rs)

To purchasesTo wagesTo electric billTo gross profit b/d

59,5000015,46,0009,00,00024,04,000--------------1,08,00,000

By sales a/c 1,08,00,000

--------------1,08,00,000

(for 1 month)

PROFIT & LOSS A/CParticulars Amount

(Rs)Particulars Amount

(Rs)

To interest on C.CTo salaryTo spare partsTo office expensesTo medical expensesTo freight outwardTo fire equipmentsTo EPF contributionTo provision for bad debtsTo free samplesTo insuranceTo bobinTo packing bagsTo net profit before tax

To tax @30%To net profit after tax

1,72,0002,40,0001,50,00050,0005,00090,00010,00024,00020,00040,00025,12575,00050,40014,52,475------------4,35,74210,16,732-------------24,04,000

By gross profit c/d 24,04,000

-------------24,04,000