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EXECUTIVE SUMMARY
INTRODUCTION
We are introducing the business of fly ash brick with a view point of eliminating fly ash from the ecosystem as an environmental pollutant, which
will provide huge benefits to organizations as well as to the environment.
MISSION AND VISION• To provide and promote
business as well as services that strengthen the brick manufacturing sector for the ultimate benefit of it’s customers and society.
• To be at the forefront in creating the environment & to be the largest players in the field of Fly Ash Brick Manufacturing
GEOGRAPHICAL ADVANTAGE
• The area is rich with coal content and has a large number of heavy and small industries using coal fuel. Hence, large amount of fly ash is produced.
• In a survey, it was found that the total amount of ash produced in North India alone can support the demand of fly ash bricks in India
• The govt. has implemented rules which define the constructions with in a radius of 100 Kms from thermal power plants are bound to use fly ash brick.
CONTINUED• The location helps in acquiring of raw materials,
which is basically fly ash at a cheaper cost.
• One of the main advantages is the absence of competitors in the area. The area, as a fact, has manufacturers of Fly Ash bricks.
• Land is available in abundance and with the government helping in the acquiring of the land, the task gets easier.
• The construction business is booming in Delhi and Haryana and is expected to grow more with the passage of time.
THE NEED FOR SUCH AN INITIATIVE
• The brick we currently use are made of a specific quality of top soil (Approximately 10000 Hectares of to soil is lost every year for brick Manufacturing ).
• If the top soil consumption carries on at the same pace, very soon, we will not have enough soil for cultivation.
• Also, the thermal power plants and the industrial units using coal as a fuel have no use with the fly ash left after the combustion and they need to dump some where.
CONTINUED
• For dumping this fly ash, they need to acquire land from mining firms, which in turn is provided in the form of used underground mines.
• But as result of this, huge amount of pollution takes place.
• Fly ash is reported to cause ailments like allergic bronchitis, fibrosis of lungs, silicosis and asthama.
• Also causes water and soil pollution along with air pollution.
SCOPE OF PROJECT
• Nearly 73% of India's total installed power generations capacity is thermal, which coal based generation is 90% the remaining comprising of diesel and gas.
• The 85 utility thermal power plants, beside the captive power plants, use bituminous and sub bituminous coal and produce large quantities of fly ash.
• High ash content (30-50%) contributes to large volumes of fly ash.
PRODUCTION DESCRIPTION
FEATURES
• Size of brick will be 230x110x76mm (as per the international norms)
• Faster construction
• Less mortar consumptions.
• Most suitable for walls as the bricks are earthquake and water resistant.
• Decorative like stone masonry.
• Ash content as high as 60%.
ACQUIRING THE RAW MATERIALS
• Fly ash is readily available with thermal power plants and can be acquired from them even without spending on transportations.
• Lime, gypsum and sand are available in the market and can purchase as per requirement.
OPERATIONAL FINANCE
& HR PLANNING
PLANTS PARAMETERS
• Capacity (Bricks/Year) - 5,11,000 (1,40,000x365)
• Brick /Day - 1,40,000
• No of shifts/ Day - 2
• Bricks/Shift - 70,000
• Working days /year - 365
• Land required - 9 Acres (of which the
plant will require only 6 acres)
MANPOWER REQUIRED
Description Total Nos Nos/shift Salary Total Salary
Manager 4 2 34,000 1,36,000
Production Engineer 16 8 15,000 2,40,000
Skilled Workers 80 40 5,200 4,16,000
Un-skilled Workers 160 80 85/day 13,600/day 4,08,00 (30d)
Chowkidars 8 4 3,000 24,000
Peons 16 8 3,5000 56,000
Cashier-Cum-Clerk 4 2 6,000 24,000
Total 13,04,000
FINANCIAL ASPECTS (FIXED CAPITAL)
S no Activity Period Starting
Period completion
1 Survey of collection of data in respect of demand, availability of technology, power, land and clearance from state pollution control
Day 1 2nd Month
2 Arrangement for margin money 2nd month 3rd month
3 Preparation of project report and registrations
2nd month 3rd month
4 Finance assistance 2nd month 4th month
5 Development of site and construction of building
5th month 7th month
6 Machine purchasing and installation 7th month 8th month
7 Trial production 8th month 8th month
This will include a total cost of 10,50,000 including land acquisitions.
FINANCIAL ASPECTS (MACHINERY AND EQUIPMENTS)
Description Qty Total price (Rs)
Pan mixer (run by 20 hp motor) 2 1,50,000
Hydraulic press (30 tones capacity) 2 3,00,000
Belt conveyor (run by 3 hp motor) 1 70,000
Deep tube well 1 35,000
Generator 1 1,25,000
Steel plates and extra moulds 50 85,000
Trolleys 15 30,000
Office furniture and equipments 32,000
Installation and erection charges 28,000
Total 8,55,000
There will be other pre operative expanses at around Rs 70,000
WORKING CAPITAL PER MONTH (STAFF & LABOUR)
Description Total nos Nos/shifts Salary Total salary
Manager 2 1 17000 34000
Production engineer 2 1 12500 25000
Skilled worker 10 5 5200 52000
Unskilled workers 20 10 3800 76000
Chowkidars 6 3 3500 21000
Peon 4 2 3500 14000
Cashier cum clerk 2 1 6000 12000
234000
Add pre requisites @ 15% 195600
Total 269100
ROW MATERIAL PER MONTH (WC)
Description Qty (ton) Rate (per ton) Total cost ( in Rs)
Fly ash 1000 40 40000
Lime 250 800 200000
Sand 125 100 12500
Gypsum 125 900 112500
Total 365000
UTILITIES PER MONTH (WC)Description Cost (in Rs)
Power 30000
Fuel 8000
Total 38000
OTHER CONTINGENT EXPENSES (WC)
Description Cost (in Rs)
Postage and stationary 1200
Telephone 1800
Transportation 2500
Insurance 5000
Repairs and maintenance 2200
Advertisement and publicity 2500
Misc. expenditure 2500
Total 17700
SUMMING THE FINANCES
• Total Working Capital Per Month = 6,89,800
• Total Working Capital for Months = 20,70,000
• Fixed Capital = 10,50,00+8,55,000+70,000=19,75,000
• Total Capital Investment = Fixed Capital + Working Capital = 19,75,000+20,70,000= 40,45,000
FINANCIAL ANALYSISDescription Cost (In Rs)
Total Recurring cost of production per year 82,78,000
Depreciation on building @ 5% 36,5000
Depreciation on Machinery & Equipments @ 10% 79,500
Depreciation of Office Equipments @ 20% 6,400
Interest on Total Capital Investment @ 14% 5,66,300
Total 89,66,700
ANNUAL TURNOVER
Quantity Rate Value
60,00,00 Rs 1.75 per Brick Rs 1,05,00,000
OTHERS IMPORTANT STATS
Net Profit Ratio = (Net Profit x 100)/Total Turnover
= (15,33,300 X100)/1,-5,00,00
= 14.60%
Rate of Return = (Net Profit per year x 100)/Total Investment
=(15,33,300 x 100)/40,45,00
=37.90%
BREAK EVEN POINT
Fixed cost In Rupees
Deprecation on building @ 5@ 36500
Deprecation on machinery and equipment @ 10% 79500
Deprecation on office equipment @ 20% 6400
Interest on total capital investment @14% 566300
Insurance 60000
40% of salary and wages 1291680
40% of other contingent expenses (excluding insurance) 7080
Total 2047460 or 202048000
PROCUREMENT OF RAW MATERIAL
Lime & gypsum from chemical
plants
Sand from local contractors
Fly ash from thermal power
plants
Procurement
STORAGE OF RAW MATERIALS
• FLY ASH in open yard. Duly wetted and covered with plastic sheet.
• LIME dumped in open yard or stored in packets.
• SAND in open yard. Duly wetted and covered in plastic sheet.
• GYPSUM in bags stored in godowns.
BATCH MIXING OF RAW MATERIALS
Fly ash Sand
Lime Gypsum
Transportation of raw materials to
pan mixer
MECHANIZED TRANSFER FROM PAN MIXER TO AUTOMATIC BRICK MAKING MACHINE
Hydraulic press
Pan mixer
Hydraulic press
DRYING AND CURING
The green bricks are dried up under sun from 24 to 48 hours
The dried up bricks are stacked and subjected for water spray curing once or twice a day for
7-21 days depending on ambience
Dispatch to the market
HR CONCERNS
• Scientific task planning
• Authority and responsibility
• Equity
• Unity of command.
• Unity of direction.
• Stability of tenure.
• Following rules for ethical decision making.
• Corporate social responsibility (CSR)
• Corporate philanthropy.
ECONOMIC CONCERNS• Currently, the demand for brick is very high from the supply.
• Demand and supply gap is around 250 billion bricks per annum.
• Raw material used for regular red brick is limited.
• In India, the annual production of fly ash can result in manufacturing 780 billion bricks
• To reduce the demand and supply gap, we will need to expand in this sector at a larger rate than what is undergoing at the present time.
COMPETITIVE STRENGTHS TO CLAY BRICKS
• Fly ash bricks are 28% lighter than clay bricks
• These bricks have a pleasing color like cement, are uniform in shape and smooth in finish, also they require no plastering for building works.
• These brick can provide advantages being available several load-bearing grade, savings in mortar plastering, and giving smart looking brickwork.
• High compressive strength eliminates breakages/ wastages during transport and handling
• The brick also have a very high tensile strength, which eliminates the chances of their collapse during earthquakes.
• The bricks are less water absorbent and hence we have less dampening in the bricks
PRICING & PROMOTIONAL STRATEGIES
• Penetration price of Rs 1.75 per brick for the first two years and then concession to high end buyers at a rate of 7.5 %
• Aggressive Selling.
• Trade Promotion.
• Publicity.
• Large volume of sales to the government.
• Seeking the help of the government in publicity.
MARKETING STRATEGIES
CURRENT MARKET SCENARIO
• Market is dominated by clay bricks.
• Fly Ash brick is a new product to the market.
• The government has imposed rules for the use of 100 fly ash bricks in a radius of 100 Kms from thermal power plants. However, the government is itself not implying to the norms. The govt. can be forced to imply to such norms by NGOs and when such a scenario occurs, the demand for the bricks from the side of the govt. will increase many folds.
• Use of these bricks result savings of almost 37% in the construction cost.
• The unit will also require a no objection certificate from the state government of in regard to pollution and other concerns
STP STRATEGY
SEGMENTATION• Based on the geographic location.- As the plant is located in Jharkhand,
we will first try to capture the local market and then move to the neighboring states.
• Based on demographic location.- Demographic factors will help greatly in determining the target customers.
• Name of company - FLASH INDUSTRIES
• Product Brand Name - FLASH BRICKS
TARGETING & POSITIONING
POSITIONING
Positioned as environmental pollutant
cleaner
TARGETING
Builders
Consultant
Architects
Government
