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PROJEC
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A MINIU
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This partticular pre-fe

easibility is re
egarding Alu
uminium Po
owder.

The obje
ective of the
e pre-feasibility report is primarily to
t facilitate potential en
ntrepreneurss in
project id
dentification for investment and in o
order to serv
ve his objecctive; the do
ocument covvers
various aspects of the projecct concept development, start-up, marketing
g, finance and
a
ment.
managem

[We can modify the project cap

pacity and prroject cost as
a per your requirement. We can also
a
prepare project
p report on any subject as per your require
ement.]

Lucknow O Office: Sidhivin

nayak Building ,
27/1/B, Gokhlley Marg, Lucknow-226001
L 1

Delhi Officce : Multi Discip

plinary Trainin
ng
Centre, Gaandhi Darshan Rajghat,
New Delhi 110002

Email : inffo@[Link]
Contact : ++91 75260003333, 444, 555
 PROJECT AT A GLANCE

1 Name of the Entreprenuer xxxxxxxxxx

2 Constitution (legal Status) xxxxxxxxxx

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxxxxxxx
Mobile xxxxxxx

5 Product and By Product : ALUMINIUM POWDER

6 Name of the project / business activity proposed : ALUMINIUM POWDER MAKING UNIT

7 Cost of Project : Rs.21.22 Lakhs

8 Means of Finance
Term Loan Rs.12.6 Lakhs
Own Capital Rs.2.12 Lakhs
Working capital Rs.6.5 Lakhs

9 Debt Service Coverage Ratio : 2.51

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 31%

13 Employment : 9 Persons

14 Power Requirement : 30.00 HP

15 Major Raw materials : Aluminium Ingots

16 Estimated Annual Sales Turnover (Max Capacity) : 145.40 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land Own/Rented
Plant & Machinery 12.00
Furniture & Fixtures 2.00
Working Capital 7.22
Total 21.22

MEANS OF FINANCE
Particulars Amount
Own Contribution 2.12

Working Capital(Finance) 6.50

Term Loan 12.60

Total 21.22
 ALUMINIUM POWDER

Introduction: Aluminium powder is a fine granular powder made from

Aluminium. In form of powders, Aluminium is used for several applications
such as manufacture of slurry, explosive and detonators, thermit process used
for manufacture of ferro alloys and for specialised welding applications such
as rails, pyrotechnic to manufacture crackers, sparkles and other pyrotechnic
products; manufacture of aluminium paste, paints and several powder
components used in automobiles. The most important property of aluminium
powder to undergo a vigorous exothermic reaction when it gets oxidised finds
application in pyrotechnic process. In foundry, aluminium powder is used as a
deoxidant and exothermic tapping compounds to increase the yield of casting.

Market Potential: The aluminium powder is a consumable product.

Presently there are four major organised manufacturers of aluminium
powder. They are Metal Powder Company, Thirumangalam,INDAL, Mumbai,
Khosla Metal Powder Company, Pune and Arasan Aluminium Industries,
Sivakasi. In addition, there are a number of small scale industries located in
Karnataka, M.P., Maharashtra, Gujarat and Delhi with an installed capacity of 1
tonne per day. In a recent report of DSIR, the total production of aluminium
powder in the country has been estimated at more than 10,000 MT per year.
DGTD has estimated the growth of demand between 8 to 10% per annum. In
conclusion, it can be said that production of aluminium powders of various
grades and products such as aluminium paste is well established in the
country. The aluminium powder industry is of a remarkable size. There is a
growing market for export of aluminium powder and paste. Good
opportunities exist in the field of setting up new units in small scale sectors
with proven technology and appropriate quality orientation.

Raw material: The only raw material that is used to manufacture

aluminium powder is Aluminium Ingots.

Machinery Requirements: Major machines & equipments are as follows:

S No. Description Qty. Amount
1. Oil Fired Furnace-250 Kg 1 300000
2. Ball Mill Capacity- 50 Ltr 1 200000
3. Compressor 1 75000
4. Hot Air chamber 1 175000
5. Powder collecting duct complete 1 150000
with suction arrangements etc.
6. Oil Tanker 1 50000
7. Water Cooling Tank, pumps Ls 50000
8. Weighing Platform- 500 Kg Cap. 1 150000
9. Other equipments & hand tools Ls 50000
Total Amount 1200000

Manufacturing Process: The aluminium powder is manufactured in

several forms such as flake-like particles, granular powder (atomised
aluminium) etc. For the production of aluminium powder, there are several
processes, one can use any of them. The metal is melted in furnaces and the
temperature maintained is around 720°C to 760°C. Atomised Aluminium is
produced by blasting the stream of molten Aluminium into small particles by
air jet. For this purpose, an atomiser is used which consists of a straight tube
with lower end dipped in molten metal and upper end terminating as a small
orifice. A jet of hot air under pressure is passed through armular opening near
the top which impinges on a stream of molten Aluminium drawn by suction
through the orifice. This leads to the formation of small particles of
Aluminium. These particles are drawn by suction, through a collecting duct
placed above the nozzle and finally into a cyclone collecting system. The
particle size can be controlled to some extent by varying nozzle opening air
pressure etc. The different sizes of Aluminium powders are segregated by
sieving. Then packing is done as per market requirement for specific quantity.

Area: The industrial setup requires space for Inventory, workshop or

manufacturing area, space for power supply utilities and auxiliary like
Generator setup. Also some of the area of building is required for office staff
facilities, documentation, office furniture, etc. Thus, the approximate total area
required for complete industrial setup is 1500 to 2000Sqft.

Power Requirement: The power consumption required to run all the

machinery could be approximated as 30 Hp

Manpower Requirement: There are requirement of skilled machine

operators to run the machine set. Experience quality engineers are required
for desired quality control. Some helpers are also required to transfer the
material from one work station to other. Office staffs are required to maintain
the documentation. The approximate manpower required is 9 including 1
Supervisor, 1 Plant operator, 1 unskilled worker, 2 Helper and 1 Security
guard. 3 Skilled worker including Accountant, Manager and Sales person.

Bank Term Loan: Rate of Interest is assumed to be at 11%

Depreciation: Depreciation has been calculated as per the Provisions of

Income Tax Act, 1961
Approvals & Registration Requirement:
Basic registration required in this project:

 GST Registration
 Udyog Aadhar Registration (Optional)
 Choice of a Brand Name of the product and secure the name with
Trademark if require.
 NOC from State Pollution Control Board

Implementation Schedule:
S No. Activity Time required
1. Acquisition of premises 1-2 Months
2. Procurement & installation of Plant & Machinery 1-2 Months
3. Arrangement of Finance 1.5-2 Months
4. Requirement of required Manpower 1 Month
5. Commercial Trial Runs 1 Month
Total time Required (some activities shall run 5-6 Months
concurrently)

FINANCIALS
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 4.49 8.23 11.10 14.20
Add: Additions 2.12 - - - -
Add: Net Profit 3.36 4.94 5.87 7.10 8.82
Less: Drawings 1.00 1.20 3.00 4.00 5.00
Closing Balance 4.49 8.23 11.10 14.20 18.02

CC Limit 6.50 6.50 6.50 6.50 6.50

Term Loan 11.20 8.40 5.60 2.80 -
Sundry Creditors 1.44 1.70 1.89 2.08 2.26

TOTAL : 23.62 24.83 25.09 25.58 26.78

APPLICATION OF FUND

Fixed Assets ( Gross) 14.00 14.00 14.00 14.00 14.00

Gross Dep. 2.00 3.71 5.17 6.42 7.49

Net Fixed Assets 12.00 10.29 8.83 7.58 6.51

Current Assets
Sundry Debtors 4.32 5.14 5.83 6.54 7.27
S k in
Stock i H
Hand
d 44.58
58 6 56
6.56 7 36
7.36 8 16
8.16 8 98
8.98
Cash and Bank 2.73 2.83 3.07 3.30 4.03

TOTAL : 23.62 24.83 25.09 25.58 26.78

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 86.30 102.89 116.61 130.78 145.40

Total (A) 86.30 102.89 116.61 130.78 145.40

B) COST OF SALES

Raw Material Consumed 61.60 72.77 80.85 88.94 97.02

Elecricity Expenses 1.83 2.05 2.28 2.51 2.74

Repair & Maintenance 1.73 2.06 2.92 3.92 4.36
Labour & Wages 10.33 10.85 13.02 14.97 17.22
Depreciation 2.00 1.71 1.46 1.25 1.07

Cost of Production 77.48 89.44 100.53 111.59 122.41

Add: Opening Stock /WIP - 2.53 2.93 3.32 3.72

Less: Closing Stock /WIP 2.53 2.93 3.32 3.72 4.13

Cost of Sales (B) 74.96 89.04 100.14 111.19 121.99

C) GROSS PROFIT (A-B) 11.35 13.85 16.47 19.59 23.40

13.15% 13.46% 14.12% 14.98% 16.09%
D) Bank Interest (Term Loan ) 1.37 1.12 0.81 0.50 0.19

ii) Interest On Working Capital 0.72 0.72 0.72 0.72 0.72

E) Salary to Staff 5.04 6.05 7.26 8.71 10.02
F) Selling
S lli & Adm
Ad Expenses
E Exp.
E 0 86
0.86 1 03
1.03 1 17
1.17 1 31
1.31 1 45
1.45

TOTAL (D+E) 7.98 8.91 9.95 11.23 12.38

H) NET PROFIT 3.36 4.94 6.52 8.35 11.02

3.9% 4.8% 5.6% 6.4% 7.6%
I) Taxation 0.65 1.25 2.20

J) PROFIT (After Tax) 3.36 4.94 5.87 7.10 8.82

PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND

Own Contribution 2.12 -

Reserve & Surplus 3.36 4.94 6.52 8.35 11.02
Depriciation & Exp. W/off 2.00 1.71 1.46 1.25 1.07
Increase In Cash Credit 6.50
Increase In Term Loan 12.60 - - - -

Increase in Creditors 1.44 0.26 0.19 0.19 0.19

TOTAL : 28.02 6.91 8.17 9.79 12.28

APPLICATION OF FUND

Increase in Fixed Assets 14.00 - - - -

Increase in Stock 4.58 1.98 0.79 0.81 0.82
Increase in Debtors 4.32 0.83 0.69 0.71 0.73
Repayment of Term Loan 1.40 2.80 2.80 2.80 2.80

Taxation - - 0.65 1.25 2.20

Drawings 1.00 1.20 3.00 4.00 5.00
TOTAL : 25.30 6.81 7.93 9.57 11.55

Opening Cash & Bank Balance - 2.73 2.83 3.07 3.30

Add : Surplus 2.73 0.10 0.24 0.23 0.73

Closing Cash & Bank Balance 2.73 2.83 3.07 3.30 4.03
COMPUTATION OF MAKING OF ALUMINIUM POWDER

Item to be Manufactured Aluminium Powder

Manufacturing Capacity per day 300 Kg

No. of Working Hour 8

No of Working Days per month 25

No. of Working Day per annum 300

Total Production per Annum 90,000 Kg

Total Production per Annum 90,000 Kg
ALUMINIUM
Year Capacity POWDER
Utilisation

I 40% 36,000.00

II 45% 40,500.00
III 50% 45,000.00
IV 55% 49,500.00
V 60% 54,000.00

COMPUTATION OF RAW MATERIAL

Quantity of Total CostPer
Unit Unit Rate
Item Name Raw Material Annum (100%)
Aluminum Ingots 110.00 MT 1,40,000.00 1,54,00,000.00

Total 1,54,00,000.00

Total Raw material in Rs lacs 154.00

Raw Material Consumed Capacity Amount (Rs.)

Utilisation

I 40% 61.60
II 45% 72.77 5% Increase in Cost
III 50% 80.85 5% Increase in Cost
IV 55% 88.94 5% Increase in Cost
V 60% 97.02 5% Increase in Cost
COMPUTATION OF SALE
Particulars I II III IV V

Op Stock - 1,200.00 1,350.00 1,500.00 1,650.00

Production 36,000.00 40,500.00 45,000.00 49,500.00 54,000.00

36,000.00 41,700.00 46,350.00 51,000.00 55,650.00

Less : Closing Stock(10 Days) 1,200.00 1,350.00 1,500.00 1,650.00 1,800.00

Net Sale 34,800.00 40,350.00 44,850.00 49,350.00 53,850.00

Sale Price per Kg 248.00 255.00 260.00 265.00 270.00

Sale (in Lacs) 86.30 102.89 116.61 130.78 145.40

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(10 Days requirement) 2.53 2.93 3.32 3.72 4.13
Raw Material
(10 Days requirement) 2.05 3.64 4.04 4.45 4.85

Closing Stock 4.58 6.56 7.36 8.16 8.98

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 4.58
Less:
Sundry Creditors 1.44
Paid Stock 3.15 0.31 2.83

Sundry Debtors 4.32 0.43 3.88

Working Capital Requirement 6.71

Margin 0.75

MPBF
PBF 66.71
71
Working Capital Demand 6.50
BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary
Supervisor 22,000.00 1 22,000.00
Plant Operator 18,000.00 1 18,000.00
Unskilled Worker 14,000.00 1 14,000.00
Helper 10,000.00 2 20,000.00
Security Guard 8,000.00 1 8,000.00

82,000.00
Add: 5% Fringe Benefit 4,100.00

Total Labour Cost Per Month 86,100.00

Total Labour Cost for the year ( In Rs. Lakhs) 6 10.33

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Manager 18,000.00 1 18,000.00
Accountant cum store keeper 12,000.00 1 12,000.00

Sales 10,000.00 1 10,000.00

Total Salary Per Month 40,000.00

Add: 5% Fringe Benefit 2,000.00

Total Salary for the month 42,000.00

Total Salary for the year ( In Rs. Lakhs) 3 5.04

COMPUTATION OF DEPRECIATION

Plant &
Description Land Machinery Furniture TOTAL

Rate of Depreciation 15.00% 10.00%

Opening Balance Leased - - -
Addition - 12.00 2.00 14.00
- 12.00 2.00 14.00
- -
TOTAL 12.00 2.00 14.00
Less : Depreciation - 1.80 0.20 2.00

WDV at end of Ist year - 10.20 1.80 12.00

Additions During The Year - - - -
- 10.20 1.80 12.00
Less : Depreciation - 1.53 0.18 1.71

WDV at end of IInd Year - 8.67 1.62 10.29

Additions During The Year - - - -
- 8.67 1.62 10.29
Less : Depreciation - 1.30 0.16 1.46
WDV at end of IIIrd year - 7.37 1.46 8.83
Additions During The Year - - - -
- 7.37 1.46 8.83

Less : Depreciation - 1.11 0.15 1.25

WDV at end of IV year - 6.26 1.31 7.58
Additions During The Year - - - -

- 6.26 1.31 7.58

Less : Depreciation - 0.94 0.13 1.07
WDV at end d off Vth
V h year - 5 32
5.32 1 18
1.18 6 51
6.51
 REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 12.60 12.60 0.35 - 12.60
Iind Quarter 12.60 - 12.60 0.35 - 12.60
IIIrd Quarter 12.60 - 12.60 0.35 0.70 11.90
Ivth Quarter 11.90 - 11.90 0.33 0.70 11.20
1.37 1.40
II Opening Balance
Ist Quarter 11.20 - 11.20 0.31 0.70 10.50
Iind Quarter 10.50 - 10.50 0.29 0.70 9.80
IIIrd Quarter 9.80 - 9.80 0.27 0.70 9.10

Ivth Quarter 9.10 9.10 0.25 0.70 8.40

1.12 2.80
III Opening Balance
Ist Quarter 8.40 - 8.40 0.23 0.70 7.70

Iind Quarter 7.70 - 7.70 0.21 0.70 7.00

IIIrd Quarter 7.00 - 7.00 0.19 0.70 6.30
Ivth Quarter 6.30 6.30 0.17 0.70 5.60
0.81 2.80
IV Opening Balance
Ist Quarter 5.60 - 5.60 0.15 0.70 4.90
Iind Quarter 4.90 - 4.90 0.13 0.70 4.20

IIIrd Quarter 4.20 - 4.20 0.12 0.70 3.50

Ivth Quarter 3.50 3.50 0.10 0.70 2.80
0.50 2.80

V Opening Balance
Ist Quarter 2.80 - 2.80 0.08 0.70 2.10
Ii d Q
Iind Quarter 2 10
2.10 - 22.10
10 00.06
06 0 70
0.70 11.40
40
IIIrd Quarter 1.40 - 1.40 0.04 0.70 0.70
Ivth Quarter 0.70 0.70 0.02 0.70 0.00
0.19 2.80

Door to Door Period 60 Months

Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R

PARTICULARS I II III IV V

CASH ACCRUALS 5.36 6.65 7.33 8.35 9.89

Interest on Term Loan 1.37 1.12 0.81 0.50 0.19

Total 6.73 7.77 8.14 8.85 10.08

REPAYMENT
Repayment of Term Loan 1.40 2.80 2.80 2.80 2.80
Interest on Term Loan 1.37 1.12 0.81 0.50 0.19

Total 2.77 3.92 3.61 3.30 2.99

DEBT SERVICE COVERAGE RATIO 2.43 1.98 2.26 2.68 3.37

AVERAGE D.S.C.R. 2.51

COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day Hours 8

Electric Load Required HP 30
Load Factor 0.7460
Electricity Charges per unit 7.50
Total Working Days 300
Electricity Charges 4,02,840.00

Add : Minimim Charges (@ 10%)

(B) DG set
No. of Working Days 300 days
No of Working Hours 0.3 Hour per day
Total no of Hour 90
Diesel Consumption per Hour 8
Total Consumption of Diesel 720
Cost of Diesel 65.00 Rs. /Ltr
Total cost of Diesel 0.47
Add : Lube Cost @15% 0.07
Total 0.54

Total cost of Power & Fuel at 100% 4.57

Year Capacity Amount

(in Lacs)

I 40% 1.83
II 45% 2.05
III 50% 2.28
IV 55% 2.51
V 60% 2.74
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
assume no financial liability to anyone using the content for any purpose. All the
materials and content contained in Project report is for educational purpose and
reflect the views of the industry which are drawn from various research material
sources from internet, experts, suppliers and various other sources. The actual
cost of the project or industry will have to be taken on case to case basis
considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is
intended for general guidance only and must not be considered a substitute for a
competent legal advice provided by a licensed industry professional. SAMADHAN
hereby disclaims any and all liability to any party for any direct, indirect, implied,
punitive, special, incidental or other consequential damages arising directly or
indirectly from any use of the Project Report Content, which is provided as is, and
without warranties.