NSIC Project Profiles

POWERLOOMS UNIT

1. INTRODUCTION
The plain fabric is used as a raw material in manufacturing printed bed sheets,
sarees, dress material, furnishings, etc. The finished powerloom cloth can be
supplied either bleached or unbleached and in a wide range of colours and shades.
For coloured cloth, the yarn is bleached and dyed before weaving.

2. MARKET
There is good demand for cotton cloth throughout the country. There is shortage felt
in the supply of cloth in wholesale market according to the dealers.

The demand for cotton fabric is oin increase for use as bed sheets, sarees, dhoties,
towels, kerchiefs, dress materials, furnishings, napkins, etc The cloth from power
looms is cheaper in price with quality finish and uniform appearance when compared
to the cloth from handlooms.

3. MANUFACTURING PROCESS
The process includes fixing the yarn of suitable count on the loom to form both wrap
and weft and weave the cloth. Normally, the rejection rate in manufacture is lower in
powerlooms in both yarn and finished product when compared to handlooms.

4. PRODUCTION CAPACITY PER ANNUM

Capacity 6 Tons
Selling Price Rs. 130000 Per pair

5. PROJECT COST/CAPITAL INVESTMENT

S.No Description Amount Rs.
1 Preliminary & Preoperative Expns 5000
2 Fixed Capital 312000
3 Working Capital for 2 month(s) 101600
Total Project Cost 418600

6. MEANS OF FINANCE
NSIC Project Profiles

S.No Description %age Amount Rs.

1 Promoter Contribution 15% 62790
2 Subsidy /Soft Loan 20% 83720
3 Term Loan 65% 272090
Total 418600

7. FINANCIAL ASPECTS

A. FIXED CAPITAL
i. Land and Buildings Rented 1000 per month

ii. Machinery and Equipment

S.No Description Qty. Rate Amount Rs.
1 Powerlooms 5 60000 300000
2 Installation and electrification 1 10000 10000
3 Miscellaneous expeness 1 2000 2000
Total 312000

B. WORKING CAPITAL

i. Salaries & Wages (per month)

S.No Description Nos. Sal/mon. Amount Rs.
1 Supervisor/Entrepreneur 1 2500 2500
2 Skilled Labour 5 2000 10000
3 Semi-skilled Labour 1 1500 1500
4 Unskilled Labour 1 1000 1000
Total 15000

ii. Raw Material (per month)

S.No Description Unit Qty. Rate Amount Rs.
1 Yarn Ton 0.5 60000 30000
Total 30000

iii. Utilities (per month)

S.No Description Unit Amount Rs.
1 Power LS 3000
2 Water LS 300
Total 3300
NSIC Project Profiles

iv. Other Expenses (per month)

S.No Description Amount Rs.
1 Postage & Stationery Expenses 200
2 Transportation Expenses 500
3 Consumeble Stores 500
4 Miscellaneous Expenses 300
Total 1500

v. Total Working Capital (per month)

S.No Description Amount Rs.
1 Rent 1000
2 Salaries and Wages 15000
3 Raw Material 30000
4 Utilities 3300
5 Other Expenses 1500
Total 50800

8. COST OF PRODUCTION (PER ANNUM)

S.No Description Amount Rs.
1 Total Working Capital 609600
2 Depreciation @ 15% 46800
3 Interest @ 12% 32651
Total 689051

9. TURNOVER (PER YEAR)

S.No Description Unit Qty. Rate Rs. Amount Rs.
1 Powerlooms Tons 6 130000 780000
Total 780000

10. FIXED COST (PER YEAR)

S.No Description Amount Rs.
1 Depreciation 46800
2 Interest 32651
3 Rent 12000
4 Salaries & Wages @ 40% 72000
5 Other Expenses incl. Utilities @ 40% 23040
Total 186491

11. PROFIT ANALYSIS & RATIOS

1 Net Profit Rs. 90949

2 Percentage of Profit on Sales 12%
3 Percentage of Return on Investment 22%
4 Break Even Point 67%