PROJECT REPORT

ON

“ENTERPRENEURSHIP”
GARMENT FACTORY

THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF

[Link] Vocational

SESSION 2017-18
Govind Singh
[Link] 2nd Semester
Roll No. 1708265931010

UNDER THE GUIDANCE OF

DR. K.K. PACHORI

(HEAD OF THE DEPARTMENT)

DAU DAYAL INSTITUTE OF VOCATIONAL EDUCATION KHANDARI CAMPUS, AGRA

AFFILIATED TO DR. B.R. AMBEDKAR UNIVERSITY, AGRA

 PREFACE

This project report is made by me during the 2 nd Semester in

partial fulfillment of “[Link]. (Vocational)” (Students are

essentially required to conduct a project work on the topic

provided by the related department of the institute. The idea

behind it is to test acquired knowledge through practical

experience and to apply the theorical aspect of management

in the practical field.

This project report is on the study of “Garment Factory”

 ACKNOWLEDGEMENT

Any accomplishment requires the efforts of many people and this work

is no different. It has been my proud privilege to be attached to

“Garment Factry” with the respect. For Accommodation me as a

Project Report.

I would like to express my gratitude with deep sense of reverence to Dr.

K.K. Pachouri (Head of the Department) & all Faculty Members, it

would have been difficult to go through this project without their help.

He did not only helped me collected in data but also supported me with

their valuable knowledge and experience in the successful completion of

the project.

I would like also thankful to almighty god for his grace and mercy to

successfully complete the project.

Govind Singh
 DECLARATION

I Govind Singh hereby declare that the project report I am

submitting is not a part of any Publication or any project which has

been published before. I had done this project as a part of my

curriculum needed for the project Purpose for the completion of

[Link] (Vocational) by the Dau Dayal Institute of Vocational

Education.

Govind Singh
[Link]. (Vocational) II Sem.
Roll No.1708265931010

TABLE OF CONTENTS

EXECUTIVE SUMMERY:
Name of project

Location & site selection

Organizational Profile:

Technical study

Estimated cost of the project

Implementation Schedule

Financial Ratios

Introduction:

PROJECT PROFILE

Legal status

Advantages

Project brief

Name of promoters

Market Analysis

Target Customers

Market Demand

Market supply
INDUSTRY GROWTH:

Ex- Factory price

Retail price

Distribution Channel

Technical Study

Financial Analysis:

ANNAXTURE:

Estimated cost of land

Estimated cost of Machinery and office equipment

Estimated cost of Building and civil work

Estimated cost of salaries and wages

Estimated cost of furniture and fixture

Estimated Depreciation of assets

Capacity:

Product mix table

i) At 60% capacity

ii) At 70% capacity

iii) At 80% capacity

Assumption for calculation:

Raw material volume

Detail of prices

Power and Fuel

Insurance

Store and Sappers

Manufacturing and Selling Expenses

INTRODUCTION
 The cost of the project has been estimated RS. 25 million in
which includes machinery cost of building staff salaries furniture and
fixtures are included in the cost of the project of ready made men’s
garments which is located at Sanjay Place, Agra This study provides
information and guidelines about the investment opportunities in
stitching unit for dress shirts and pent for men. The production of this
unit will be utilized for meeting the countries requirements and earn
the revenue. There is vast Varity in dress pants in relation to quality of
the fabric used , style, stitching techniques etc. This project will start its
operations on commercial bases

Name of Project:

Garments industry

Named

HMS men’s garments

Project Location:

The proposed location of men’s garments is located near Sanjay

Place, Agra

Location & Site Selection:

Location Study:
Selection of proper site is an important step, some of the basic
considerations in selecting site are:

 Soil characteristics
 Cost of land
 Approach to site for transportation of raw material,
finished products, employees, etc.
 Sources and availability of water
 Availability of power
 Availability of skilled manpower
 Social amenities in the area
 Availability of tax incentive, if any
 Facilities for drainage and effluent disposal
 Acceptance of the project by the local population
Office Location

Men’s ready made garment office is situated at university road near

Sanjay Place, Agra

Organizational Profile:

Business has its operational plant 3 KM from Sanjay Place, Agra\

Product Market Survey:

The product of the organization has much demand because of the large
number of consumers. These days overall garments industries grooming
so the demand of the product is increasing. Also the product has its
demand outside the country. Politically the garment industry has much
importance and government also wants to promote the industry

Raw material Survey:

The raw material survey confirms that adequate material will be

available to supports the project. Raw material may available in fabric
form. The managers has great experience to purchase the raw material
i.e. fabric. Raw martial which we use we purchase from “Nishat textile
mill” Ahemedabad

Technical Study:

Technically the project is totally feasible. Machinery and equipment

needed to run operations is locally available.

Machinery

 Flat lock
 Over lock
 Stitching machine

Products
Unit is producing different types of Readymade Garments which
includes i.e.

Years 2014 2015 2016

Estimated 60% 70% 80%
capacity
 T-Shirt
 Dress Shirt
 Dress Pent
Human resource requirement

70 employees work as a

Stitching 3 security guard

1 driver

8 staff members

Installed Capacity Of project:

The initial stage the capacity of the ready made garment is 60% . our
machine capacity is very much outstanding but the labor is not vailable
whiles the 100% capacity of the machinery is 500 per day.

Estimated cost of the Project:

The estimated cost of the project is Rs 25 Million. Project cost would
include Fixed cost and working capital requirements. Fixed cost would
normally include cost of:

 Land
 Building and civil works
 Machinery and equipment and its installation
 Office equipment and furniture
 Office vehicles
 Pre-operative expenses
 Working capital
Project Investment:

Description Total Cost

(Rs. in Millions)
Fixed Investment 24.233816
Working Capital 0.766184

Total Investment 25

Means of finance:

Equity 40%
Debt 60%
Name of Lenders:

Project will take long term finance from National Allahabad Bank to
finance its fixed cost.

Terms for Financing Source Expenditure to

be Financed
Long-term financing Loan from Allahabad Fixed cost and
Bank Agra Working Capital

Name of Machinery Suppliers:

“Citizen machinery suppliers” Ashoka road, Ahmedabdad.

Implementation Schedule:

Start completion Start finish

 Establishment of local machinery
Engineering studies and designing of civil works 1 sep 2016
31st Dec 2016

Order for local machinery 1 Sep 2014

Arrival of local machinery at site 2 Oct 2014

Construction of a building and civil works 15 Sep 2013

30 Nov 2013

Erection and installation of machinery 5th Nov 2014

20 Nov 2014

Order for raw material 20 Nov 2014 30

Nov 2014

Financial Ratios:

years 2014 2015 2016

Net profit 9.49 14.47 24.52
margin
Current Ratio 57% 59% 61%
Debt equity 40:60 - -
Ratio
Gross margin 32.48 31.12 36.66
EPS 0.02 0.03 0.06
Interest 1.76 2.82 6.14
coverage
Sponsor Stake 40 - -

Production Process Flow:

Procurement of

Finished Fabric
Cutting

Stitching

Trimming

Final Inspection

Pressing

Packing & Dispatch

Advantages:

Advantages of the project are as follows

. The following are the main key success factors:

 Strong marketing skills/knowledge is required from entrepreneur

 Assurance of high consistent quality

 Assurance of on time delivery

 Competitive rates

 Cost efficiency

 Better services to the customer i.e. claim settlement etc.

 Better communication development with customers

Market Analysis

For formulating strategies for marketing in the local markets, the

following should

Be considered:

 A market opportunity analysis to determine suitable sales market(s)

and suitable
Sales channels.

1. Selection of target markets to identify suitable markets for selling

trousers dress shirts and T-shirts.

As we know that the scope of the ready made garments is every

[Link] such products are useable in every where like offices
schools colleges’ universities etc.

Target customers:

Our target is upper middle and lower level of the people because our
mission is to provide standard quality of the product at cheaper
prices and to capture the market.
EXPORTS:

India Export (Means, boys suits, jackets, trousers etc knit or

crochet-2014-2016)

Reporting Countries Trade Value in $Millions

USA 27.794484

United Kingdom 4.204848

Spain 2.241756

Italy 2.373816

Germany 1.947852
MARKET DEMAND

At present there is high demand of GARMENTS because of increasing in

demand of made ups. Due to increasing trend of made ups demand of
garments is increased. This trend has led to enhancing the confidence in
the minds of the general public regarding the wearing of fashionable
made ups. The location of project plays pivotal role, towards its
successful running. Therefore, the location of the above project is
prime.
Market Supply

There are many ready made garments units are working in India but
they are unable to meet the demand of the customers .we are
confident that to meet the local market .and we know that there is no
even one stitching.

INDUSTRY GROWTH

There has been a tremendous growth in this sector over the years. The
total numbers of garments industries are increasing to fulfill the
demand of market. So, in coming years demand of garments must
increase because population is increasing. Overall industry growth is
good.
Ex factory price

Description Prices (Rs.)

Dress Shirts 180
T-shirts 150
Pants 220
Annually 5 % increase in prices.

Retail Price:

Ref: geo garment .B.W.P

Description prices (Rs.)

All types of shirts 550

350

250
All types of pants 800

600

550

350

Technical Study:
Technically the project is totally feasible. Machinery and equipment
needed to run operations is locally available.

List of Machinery:

 Flat lock
 Over lock
 Stitching machine

Materials and inputs:

 Finishing fabric
 Yarn
 Button
 Zip
 Hooks
 Needle

 Sewing thread
  Labels fusing {buckram}
 Packing material
 Buckles
Personal Analysis

For the success of the project skilled and unskilled workers are hire.
Such workers are available at project place at cheaper prices so we
are decided to provide the training to unskilled labors for future need
also.

Financial Analysis

The cost of the project is RS. 25 million Which is included machinery

which included over lock, karal mayors machine. which are
included.60% capacity of our debt and remaining 40% is equity.

“Estimated cost of land”

Sr. No Description Rs. In (000)

1 3 Kanals land 6600

(@ 110000 /Marla)
2 Transfer charges 330

(@ 5% of cost of land)
3 Development charges 330

(@ 5% of cost of land)
Total cost of land 7260

HMS Men’s ready made garment industry

“Estimated cost of Machinery and office Equipment”

Sr. No Description Quantity Per unit Total cost
cost
(Rs in 000).
1 flat lock 25 25000 625

2 Stitching 25 12000 300

machine
3 Over lock 10 23000 230
machine
4 seizer 100 100 10

6 grantor 1 1000000 1000

7 telephone 3 1000 3

8 printer 1 10000 10

9 Air 2 32500 65
condition
10 Room 5 10000 50
cooler
11 Security 3 6000 18
cameras

12 computers 2 10000 20

13 Fax 1 9400 9.4

machine
14 scanner 1 5500 5.5
 Total 2345.9

“Estimated cost for salaries and wages

Designation No of Wage rate Amount

employees
(Rs. In 000)
CEO 1 30000 30
Managers 1 18000 18
Supervisors 3 10000 30
Accountants 1 15000 15
Skilled labour 60 20+40 187.2
Non-Skilled 10 5000 50
labour
Guards 3 5000 15
Derivers 1 5000 5
Office boys 2 4000 8
Total 82 358.2

Monthly salaries & wages Rs. 358200

Annually salaries & wages Rs. 358200*12= 4298400

Assuming annually increase in salary 2%

 Estimated cost for furniture & fixture

Sr. No Description Quantity Per unit Total cost

cost
(Rs. In 000)
1 Wooden 70 170 11.9
stool
2 trolleys 3 7000 21
3 Cutting 7 4000 28
+finishing
tables
4 racks 2 1800 3.6
5 Mirror 2 12000 24
tables
6 Office 6 6000+1500 18
chairs
7 Visitors 1 10000 10
sofa
8 Common 20 450
chairs
Total cost 116.5

Estimated depreciation of Asset

Items Values Rate Amount

Machinery 2165000 10% 216500
Building 12729600 10% 1272960
Office 180900 20% 36180
equipment

Computers etc
Furniture & 116500 10% 11650
fixture
Total 1537290

“Capacity”

At 100% capacity we can produce 500 dress shirts, T-shirt and pant daily
Monthly 13000{500*26}

Ready made Quantity Produced Product Mix

garments per Month
Dress shirt 5200 40%
T-shirt 5200 40%
Dress pent 2600 20%
Total 13000 100%

At 60% capacity:
Daily Monthly Annually

300 7800 93600

Annul Inventory 10% of production 9360

At 70% Capacity:

Daily Monthly Annually

350 9100 109200

Annul Inventory 10% of production 10920

At 80% Capacity:

Daily Monthly Annually

400 10400 124800

Annul Inventory 10% of production 12480

Assumptions for Calculation:

1. Operation time 1 shift/day

2. Production period 312/year
3. Capacity utilization 60% 1st year
70% 2nd year

80% 3rd year

4. At 100% capacity

Per day production 500 units

Per year production 156000 units

Raw material volume: (in meters)

Year 1st 2nd 3rd

Capacity 60% 70% 80%
utilize
Finished 75000 87500 283500
fabrics
Detail of Prices: Rs. per meter

Fabrics (55+85+105) 245/

{1.5meetr}

2% Increase in prices for each year is projected.

Power & Fuel

Fixed energy charges for electric connection of 25kv 100000

Estimated variable energy charges are @ 6.50/ unit produce. Because

the energy cost is less compare to day charges. we are also purchase
generator for emergency.

Insurance:

2%. Of production building

 2% of office furniture

Stores and sappers:

Year 1st 2nd 3rd

Amount 20000 25000 30000

“Manufacturing admin & selling Expenses”

Year 1st 2nd 3rd

Capacity 60% 70% 80%
utilization
Fixed:
Power 100000 100000 100000
Insurance:
Building 87584 87584 87584
Depreciation:
Building 1272960 1272960 1272960
Machinery 216500 216500 216500
Variable exp:
Power 608400 709800 811200
Wages & 2846400 2903328 2961395
salaries
Store & spares 20000 25000 30000

Total 5151844 5315172 5479639

manufacturing
exp
Admin &
Selling Exp:
Salaries 1452000 1481040 1510660
Postages & 30000 32000 34000
telegram
Printing & 40000 42000 44000
Stationary
Advertisement 100000 105000 110000
Depreciation:
Office 36180 36180 36180
equipment
Furniture & 11650 11650 11650
Fixture
Insurance:
Furniture & 2330 2330 2330
Fixture
Total 1672160 1710200 1748820