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DRY CLEANING UNIT/LAUNDRY

Introduction
With the growth of Urbanization, washing of cloths has turned out to be a commercial
proposition and led to the establishment of modern dry cleaning units in the cities as well in big
towns. The services of these units are very prompt and efficient. The occupation includes all
types of cleaning, dyeing, bleaching and dry cleaning. The occupation has changed with the
passage of time.
The laundering services in the past were rendered by dhobis who used to collect clothes,
wash and iron them and deliver the clothes back to their customers. Nowadays the customers
themselves go to deliver and collect clothes.
About Services
People of today are very particular about their dress material, furnishing, linen etc,
People prefer to wear and use expensive and well cleaned and ironed dress materials.
Furnishing, linen etc. especially during public appearances. This has opened the scope for Dry
Cleaning units.
Dry Cleaning unit is servicing industry. The process of conventional cleaning, prevailing
in nook and corner of cities and towns is slowly refused by people and Dry Cleaning process is
preferred instead. Disadvantage in conventional cleaning, like river or well cleaning causes
damage to expensive synthetic dress material and furnishings.
Market Potential
Developments taking in all spheres of human life have an effect on the cleanliness and decency
of dress materials and other linen also. Lack of time and other factors has make people to get
their dress, furnishing and linen materials washed and ironed in dry cleaners. Easy in removing
strains, get original looking of repairing of turned cloths and smooth ironing in dry cleaning system
are the desired aspect of mechanized dry cleaning.
Most people don't think about how their clothes are going to be cleaned when they drop them off
at a neighborhood dry cleaner. They are only interested in receiving professionally cleaned and
pressed clothing, at a reasonable price, within a short amount of time.
In cities and town of northeast India, the fashion & style and way of life are, like other parts of the
country, cleaning fast and equally the dependence on service base industries is also growing.
Suggested Capacity:

The proposed dry cleaning unit all kind of dress and furnishing will be washed dried and ironed
without damaging its colour, shed or embroidery works. The dry cleaning services per annum will
be as follows:
Cleaning and pressing per day: 100 KG
Cleaning and pressing per annum: 30,000 KG
Miscellaneous job (annually) like-
colour dying: 300 Pcs.
patch repairing: 1,000 Pcs.
polishing 2,000 Pcs.
Basis:-
No. of working days = 300 days per year
No. of Shifts = 1 per day.
One shift = 10 hours

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Infrastructure Requirement:
The main Infrastructure facilities required are:
Required area: 500 Sq.ft.
Power requirement 5 kw.
Water (required in every working day) 6-7 KL of water

Raw Materials and its availability:

The typical unit being a service industry, the amount required for working materials is negligible.
The main requirement are washing powder and cake soap, petrol, stain-removing chemicals,
sewing threads and packaging materials. Total annual requirement is calculated at Rs. 0.50 lakh.
All material & consumable items can be procured from local agencies in the open market.

Suggested Location:

Modern dry cleaning units can be located in the cities, big towns and as well as in large urban
areas preferably near main marketing center in northeastern states, including Sikkim.

Services/Process

Services: Cleaning, Pressing, dyeing, bleaching, dry cleaning, patch repairing and polishing.

Process: A dry cleaning process in which the garments are cleaned by immersion in a solvent in
one machine and physically transferred to another piece of equipment for drying. During the
transfer, the opportunity exists for release of solvents to the work environment.
The process for cleaning sensitive textiles (i.e., wool, silk rayon, linen) and removing certain
stains and dust by skilled professionals using water, detergents and additives to minimize the
potential for adverse effects. Appropriate drying and restorative finishing procedures follow this
process. Until recent years, this term involved primarily very skilled hand processing.
PROJECT ECONOMICS

The total capital requirement estimated is Rs.12.92 lakhs as given below: -
A. Fixed Capital (Amount Rs. in lakhs)
Land & Building Own/Lease
Ci vil Works
i.) Counter/Store 2.80
ii.) Built up of working shed 150 Sq. Ft. 1.10

Plant & equipments 5.00
Other misc. Fixed Assets
(Water arrangement/Overhead-Reservoir/Pump-set
Water & Electrical fittings/Other Equipments) 1.20

Preliminary & Pre-operati ve Expenses 0.50
Sub Total (A) Rs. 10.60
B. Working Capital
(Norms) (Amount Rs. in lakhs)
Raw Materials/Consumables 2 months 1.00
Working Expenses 1 month 0.33
Finished Goods 10 days 0.17
Receivable 25 days 0.82
Sub Total (B) Rs. 2.32

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Note: Working Capital to be financed as:-
Margin Money: Rs. 0.92
Bank Finance: Rs. 1.40
Rs. 2.32


Means of Finance (Rs. in Lakhs)

Promoters Equity(25%) 2.88
Term Loan(75%) 8.64
Rs.11.52

Production Expenses (Rs. in Lakhs)

Raw materials/consumables 0.50
Wages & Salaries 3.17
Utilities 0.74
Repair & Maintenance 0.12
Administrative Overhead 0.20
Selling expenses 5% on sales 0.49
Depreciation 0.40
Interest 1.14
6.76

Profitability:

Based on the sales Turnover and the operating expenses, the profit would be Rs. 3.04 lakhs
per year. This works out to a return on capital investment of 14%. The unit would break-even at
about 41% of the rated capacity.

Raw Materials/Consumables

Items Quantity Amount (Rs.)
Washing Powder 250 KG 12,000
Petrol 500 Ltr. 23,000
Misc. Soap Cake, Chemicals, threads,
stationeries, packing materials and
others.
L.S. 15,000


Plant & Machinery

Plant & Machinery No.
Required
H.P. required Amount in Rs.

Heavy duty Washing
Machine
1 2 H.P. 96,000
Hydro Extractor 1 2 H.P. 60,000
Dry Cleaning Machine with
motor
1 - 1,20,000
Drying Tumbler 1 4 H.P. 1,22,000
Pressing Machine 1 1 H.P. 28,000
Hand irons 5 - 3,000
Misc. equipments L.S. 5,000
Add.15% towards tax, freights insurance. etc. 65,000
Total Rs. 4,99,000
Say Rs. 5.00 Lakhs


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Raw Materials/Consumables
Items Quantity Amount (Rs.)
Washing Powder 250 KG 12,000
Petrol 500 Ltr. 23,000
Misc. Soap Cake, Chemicals, threads,
stationeries, packing materials and others.
L.S. 15,000
Utilities: Power Requirement:
For Plant & Machinery 10 H.P.
For General Lighting 2 H.P.
Total 12 H.P.
Annual power consumption:
12 H.P. X 0.746 X 5 hrs.X 300 days.X Rs5.50
Annual Electric Bill Rs.= 74,000
Sales Turnover:
Services Annual
services (pcs.)
Annual Turn Over
(Rs. in Lakhs)
1. Cleaning and pressing
2. Miscellaneous job like-
colour dying:
patch repairing:
polishing
30,000 KG


300 Pcs
1,000 Pcs.
3,000 Pcs.
6.00

0.30
0.50
3.00
Total Rs. 9.80
Break Even Analysis
A. Variable Cost: (Rs. in Lakhs)
Raw Materials/Consumables 0.50
Utilities 0.74
Selling Expenses 0.49
1.73
B. Semi-Variable Cost: (Rs. in Lakhs)
Wages & Salaries 3.17
Repair & Maintenance 0.12
Administrative Overhead 0.20
Depreciation 0.40
Interest 1.14
5.03
C. Sales Turnover: Rs. 9.80 Lakhs
D. Contribution: Rs. 8.07 Lakhs
E. Break Even Point B/D X !00% 62%
Manpower:
Category No. of
Person
Salary Per Person
Per Month(Rs)
Monthly Salary Bill
(Rs.)
a) Manager 1 6,000 6,000
b) Technician/ Skilled Worker 2 5,000 10,000
c) Semi skilled workers 2 4,000 8,000
Total Manpower cost Rs. 24,000
Salary Bill Rs 2.88 Lakhs + Benefits @10% annually i.e. Rs 0.29
Total Annual Salary Bill: Rs. 3.17
Highlights:
The major highlights of the project are as follows:
Total Capital requirement Rs. 12.92 lakhs
Promoters contribution Rs. 2.90 lakhs
Annual Sales realization Rs. 9.80 lakhs
Annual Operating Expenses Rs. 6.76 lakhs
Annual Profit Rs. 3.04 lakhs
Return on sales 31%
Break-even point 62%
No. of person employed