LAUNDRY. Export of garments value (Rs. in crores) , ,764
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- Abner Gordon
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1 LAUNDRY A. NTRODUCTON: Washing of fabrics is a regular activity for garment exporters. The fabrics have to be washed before they are cut and stitched. Sometimes garments are washed after stitching also according to buyers requirement. There are about more than 500 nos. of garment export units in around Chennai and exports worth Rs crores take place from Chennai. This is increasing year after year and this provides ample scope for job work for washing. B. PRODUCT USES & SPECFCATONS: This is a service industry. There is no standard specification for washing. The standards are fixed by the customers by general practice followed. The washing is being done by garment exporters, hotels, hospitals, railways etc. C. MARKET POTENTAL: Garment exporters, establishments like hotels, hospitals, and railways require regular washing of cloth / clothes. The Railways provide bed sheets, face towels and bedding materials (mattresses) to travellers in AC coaches. These are to be washed every day and the daily requirement is in large quantities. A well equipped unit to handle large varieties of fabrics and other washable items can take up more and more of job works. The following figures of garment exports also reveal that the numbers of garments exported are increasing year after year providing scope for ancillary business like washing Years Export of garments value (Rs. in crores) , ,764
2 , , , , , , , , ,324 Source: AEPC Every year, new export targets are being fixed and there is a large scope for this. The requirement of washing in domestic market is so large that an estimate cannot be made so easily. The demand for washing in cities and towns is emanating from hotels, hospitals, hostels and other establishments. D. TECHNCAL ASPECTS: nstalled Capacity The installed capacity is estimated at 2000 kgs of textile material per day representing about 6000 pieces per day. On this basis the installed capacity works out to pieces per annum of 320 days working. Plant & Machinery Sl Particulars Nos. Rs. lakhs 1 ndustrial Washing (100 kgs.) Hydro Extractor (50 kgs.) Tumble dryer Electrical ron Box with tables
3 Total 5.50
4 Cleaning/Washing Process: The process of washing involves the following sequence of operations. Weighing of detergents and other chemicals as per Determined quantity for a batch Feeding of detergents and other mix to the industrial washing machine feeding fabrics garments to the industrial washing machine Washing operation takes place by stirring process and circulation in the washing machine Circulating water and cleaning the materials in the washing machine Drying out water and transferring washed material to Hydro extractor Squeezing of material and removal of water in the Hydro extractor Transferring squeezed material to the electrical tumble dryers Drying the material in the dryers Transferring the material to roning tables fitted with electrical ron boxes Manually ironing the materials Folding and Dispatching Raw Materials There is no requirement of raw materials. The clothes are supplied by the parties who are entrusting job work. The unit has to purchase consumable materials like, detergent and washing materials, chemicals both for export and local market i.e., 50% for export and 50% for domestic market.
5 Land & Building: A factory shed with an area 3000 sq. ft on rental basis is sufficient Utilities Electricity: Power requirement is 20 H.P. which is sufficient for operation Water: Water is required is about 5000 litres per day. A bore well and an overhead tank with a capacity of 5,000 litres is adequate for the purpose. Man Power Requirement: Production Nos Rs./ Month Total Salary p.m. 1 Supervisors Skilled operators Semi-skilled workers Add: Benefits 20% 3800 Total Total Wages & Salaries per annum (Rs.lakhs) Rs.2.74 lakhs 7. MPLEMENTATON SCHEDULE: The Plant & Machinery required for industrial washing is available from local manufacturers and machinery can be installed in two months period. The production can commence after a week s trial. 8. ASSUMPTONS: 1. The installed capacity is 1500 garments washing per day (double shift) 4.50 lakhs garments p.a. Rs.4.00 per garment. 2. Utilisation assumed is 60%, 70%, & 80% for first 3 years. 3. Materials (Consumables for washing) is assumed at Re.0.30 per piece.
6 4. Power is calculated for 20 HP for 16 Rs.5.00 per unit. 5. Repairs & Maintenance is assumed at Rs.2500 per month. 6. Depreciation is calculated at 15% on WDV method. 7. Admn. & General expenses are calculated at Rs pm which includes transport and delivery charges. 8. nterest on TL is calculated at 12% p.a., Term Loan will be paid back in 5 years. 9. Working capital facility is not provided. 10.ncome tax is provided at 33.99% on profits. MACHNERY SUPPLERS 1. M/s.Veesew Machines, 11, Thiruvalluvar Street, Villivakkam, Chennai Phone: M/s.Lucky Engineering Works, 779-A, Faridpuri, West Patel Nagai, New Delhi M/s.Layer nstrumentation, 3, Chokkalingam Nagar, Vellala Teynampet, Chennai RAW MATERALS Detergents 1. M/s.United Chemical & Detergents,167, Govindappanaicken Street, Chennai M/s.N.R.G. Chemical Private Ltd., 67, Bazulla Road, Chennai
7 FNANCAL ASPECTS 1. COST OF PROJECT Rs. lakhs Land & Building (Advance) 2.40 Plant & Machinery 5.50 Other Misc. assets 0.10 Pre-Operative expenses 0.20 Margin for WC 0.18 Total MEANS OF FNANCE Capital 4.25 Term Loan 4.13 Total COST OF PRODUCTON & PROFTABLTY STATEMENTS Rs.lakhs] Years nstalled Capacity (Nos.) Utilisation 60% 70% 80% 80% 80% Production/Sales (Nos.) Selling Rate - Local Rs.4.00 per piece Total Value (Rs.lakhs) Materials (Consumables) Power Wages & Salaries Repairs & Maintenance Depreciation Cost of Production Admin. & General expenses Selling expenses nterest on Term Loan nterest on Working Capital Total Profit Before Tax Provision for tax
8 Profit After Tax Add: Depreciation Cash Accruals Repayment of Term Loan WORKNG CAPTAL: Months Values % Margin Bank Consumptions Amount Finance Materials -Consumables % Debtors % Expenses % PROFTABLTY RATOS BASED ON 80% UTLSATON Profit after Tax 1.86 = Sales Profit before nterest and Tax 3.16 = Total nvestment 8.60 Profit after Tax 1.86 = Promoters Capital % 37% 44% 7. BREAK EVEN LEVEL Fixed Cost (FC): Rs. lakhs Wages & Salaries 3.02 Repairs & Maintenance 0.36 Depreciation 0.60 Admin. & General expenses 3.31 nterest on TL Profit Before Tax (P) 2.82 BEL = FC x = x FC +P x % of installed capacity
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