PROJECT PROFILE

ON
Manufacturing of S.G. Iron Castings

Month & Year of Preparation : October, 2016

PREPARED BY

Akshaykumar Varma
K. Venkatesh
Dhananjay Kamath

1.

INTRODUCTION:The present project profile envisages the production of S.G. Iron Castings of various shapes
and sizes having weight between 500 gm. to 25 kg. in Medium frequency induction furnace. S.G.
Iron Castings are extensively used because of their high strength, ductility, shock as well as wear
resistance properties and easy machinability.

2.

MARKET POTENTIAL:S.G. Iron possesses greater tensile strength, machinability than ordinary cast iron and also has
a considerable measure of ductility, resistance to impact comparable to that of steel and low cost
involved that justifies it as the metal of future. Due to economic reforms based upon principle of
liberalization, globalization, privatization and changes at international economy including the
emergence of WTO global and domestic challenges, the demand for components of S.G. Iron
particularly in automobile sector is likely to increase manifold not only for domestic consumption
but also for export purpose. Since small-scale sector accounts for 40% of gross value of output in
the manufacturing sector and 35% of total exports from the country, this industry has great scope.
Automobile sector is largest sector of casting hence our primary consumer.

3.

BASIS AND PRESUMPTIONS :1. All machinery and equipments are indigenously available.
2. Prices of machinery and equipment as included in the profile are of particular make and will
change with the make and model of actual machine procured.
3. Prices of Raw Material, and others are those ruling at the time of preparation of this project
profile.
4. Break-even Point has been calculated on full capacity utilization basis.
5. 5% irrecoverable melting loss has been considered. Rejection of runners and risers will be recycled.
6. Pay back period of 4 years had been considered after 1.5 years of moratorium period.
7. The scheme is based on single shift of 8 hours at 75% efficiency assuming 300 working days
in a year.
8. It is presumed that capacity utilization will be 60% in the 1st year, 70% in the second year and
80% in the subsequent years.
9. The rate taken in respect of salaries and wages for skilled workers and others are the
prevailing rates in the State Gujarat.

10. The interest rate for fixed and working capital has been assumed @15% on an average
whether financed by Bankers or by Financial Institutions.
11. Margin money required is minimum 30% of the projected investment.
12. The value of the work shed and other built up/covered area has been taken on the basis of that
prevailing in the area.

4.

IMPLEMENTATION SCHEDULE
Sl.No

Activity

Period (in Weeks)

1.

Selection of Site

01-02

2.

Preparation of Project Report

3.

Provisional Registration

00-01

4.

Financial Arrangements

08-09

5.

Procurement of Machinery

12-16

6.

Installation and electrification

08-10

06-08

The above-mentioned schedule maybe considered as guideline only. It can best be

implemented in a period of 12 to 15 months by performing some common activities
simultaneously with proper and systematic planning.

5.

TECHNICAL ASPECTS:Process of Manufacture

S.G Iron is a high carbon ferrous material with graphite in the spheroidal form achieved with a
small amount of magnesium and therefore the name derived. To make S.G. Iron, mild steel scrap,
Fe-Si, Coke etc. is melted in induction furnace. Once the melt is ready, it is inoculated with small
addition of Magnesium or Chromium available in Ferro blends. The metal is then poured into
moulds, cooled and fettled. The total carbon remains as spheroid in as-cast condition but if
required, it may further be annealed to achieve the desired properties.

Quality Control and Standards

a. As per BIS: 1865-1974.
b. BIS: 5789-1970 S.G. Iron Castings for low temperature applications.
c. BIS: 5788-1970 S.G. Iron Castings for elevated temperature applications.

Production Capacity
250 MT.(as cast) per month
Motive Power
800 KW
.
Energy Conservation
It can effectively be achieved by :
(a) Energy audit
(b) Better combustion system
(c) Use of lubricant and proper maintenance of the machines.

Pollution Control
Foundry industry produces heat, gases, dust, noise and a large quantity of wastes such as
irreclaimable sands, ashes and slags. These individual elements have considerable effect on
environmental degradation and cause conditions unsuitable for human health. So it requires getting
NOC from the State Pollution Control Board.
In order to minimize the level of above pollution, the Government provides information on
related acts from time to time. The pollution can also be reduced by installing number of low cost
equipments meant for foundry.

6.

FINANCIAL ASPECTS:A. Land & BuildingRs.20,00,000/Land 2500 sq. mtrs. @ Rs. 800/ Sq. mtr.
Building
Office / Laboratory 800 sq. mtr. @ Rs.2000/ sq. mtr.
Factory shop floor 1800 sq. mtr. @ Rs.1200/ sq. mtr.

Rs.16,00,000/Rs.21,60,000/-

Sl.
Machinery
Quantity
No.
Grand Total:
Rs.57,60,000
1
500 KG medium frequency Induction
01 No.
Induction
melting Furnace with
B. Machinery
& Equipments:interchangeable crucibles, with Input
voltage adjust
transformer
D.G.
set (60
01 No.
and solid state
Inverter power pack
KVA)
output 550 KW and two way change
over switch with hydraulic power pack
arrangement for lifting of crucible

Amount
(Rs.)
35,00,000
2,00,000

One overhead tank, one underground

Water tank pipelines with cooling
towers

01 No.

4,00,000

Water Softening Plant

01 No.

2,00,000

Plate Type Heat Exchanger

01 No.

2,00,000

Immersion Pyrometer

01 No.

40,000

Air Compressor (7.5 HP)

01 No.

2,50,000

01 No.

3,00,000

7
EOT Crane (1.5 Ton Capacity)
8

Grinders (flexible shaft)

02 No.

1,50,000

Grinders (swing frame type)

02 No.

1,50,000

10

Platform Weighing Scale

01 No.

1,00,000

11

Transformer, cables and cost of Power

01 No.

6,00,000

connection

12
13

Jolt Squeeze Moulding Machine

02 No.

14,00,000

14

DARPA 300 Symultenous Jolt Squeeze

Sand Mixer, 350 kg batch with 20 HP
motor and accessories

01 No.

9,00,000

15

Knock Out - eccentric shaft.

01 No.

3,00,000

15

Vibratory feeder with SS Liner below

shakeout.

01 No.

3,60,000

17

Belt Conveyor(BC:1) without head

pulley after mettalic feeder to feed
polygonal sieve with dust hood. Various
lengths as per layout

01 No.

10,00,000

18

Magnetic Pulley for BC-1.

01 No.

1,50,000

19

Over Band Magnetic Separator on BC-1

01 No.

3,20,000

20

Polygonal screen with dust collection

and bends

01 No.

6,00,000

21

Pneumatic operated fish mouth gate

below main storage hopper.

01 No.

50,000

22

Water spraying system with infrared

temperature sensor

01 No.

80,000

23

Core and mould drying oven,

01 No.

75,000

Oil fired provided with Blower, Burner

etc.
24

LS

1,50,000

Fettling and Cutting Tools (Mechanised)

25

Chemical laboratory equipment for

routine testing [UTM, C-S apparatus,
Ultrasonic Magnetic Detector etc.]

LS

10,00,000

26

Material Handling Equipment

LS

1,20,000

27

Mold box . Size:- 500 x 400 x 150 /200

mm

130 No.

4,00,000

28

Pallet Car using angle and specially

designed for hydraulic puller system in

65 No.

13,00,000

future.
29

Track for Pallet Car using standard rail

section

70mts

4,000

30

Manual Operated Transfer car

2 Nos.

80,000

31

Electric Wire Rope hoist for box

handling above Knockout, with
Powerised Trolley

1 No.

42,000

32

Electrical control panel with PLC

Siemens + Text Display complete with
sensors.

1 No.

2,00,000

33

Ladles

3.Nos

1,50,000

33

Total:
Electrification
and installation
charge @ 10%
of the cost of
machinery and
equipment

LS

34

14,77,100
1,47,71,000

LS

2,00,000

LS

1,50,000

Cost of Moulds and Foundry Tools

34
Patterns
35

Office Equipments

LS

3,50,000

36

Pre-operative Expenses

LS

2,50,000

Grand Total:

1,71,98,100

C. Working Capital Requirement (P.M.)

Personnel
Sl.
No.
a.
b.
c.
d.

Particular
Metallurgist
Melter
Foreman
Chemist

Nos.
01
01
01
01

Salary
(Rs. P.M.)
40,000
20,000
30,000
18,000

Amount
(Rs.)
40,000
20,000
30,000
18,000

e.
f.
g.

Clerk
Storekeeper
Furnace Operator

01
01
02

12,000
15,000
20,000

12,000
15,000
40,000

h.

Skilled Workers

12

15,000

1,80,000

i.

Unskilled Workers

10

8,000

80,000

j.
k.

Peon
Watchmen

01
02

8,000
8,000

8,000
16,000
______
4,59,000

Total:

Raw Materials/Consumables
Sl.
No.
a.

Particular

Cost (Rs. (P.M.)

27,00,000

Mild Steel scrap 150 MT @

Rate Rs.18,000 per MT
b.

Pig Iron 100 MT @ Rate

30,00,000

Rs.30,000 per MT
c.

8,00,000
Ferro Alloys [Fe-Si, Fe-Mg etc.]
10MT@ Rs.80,000 per MT

d.

1,00,000
Refractory such as hot top and
crucible linings and Ramming

e.

1,50,000
Moulding sand, binder and other
materials

f.

Packaging

1,00,000
______
Total :
68,50,000
@72%consumption=49,32,000

Utilities
Sl.
No.
a.

Particular
Power 5,00,000 Unit @ Rs. 8 per unit,

Cost (Rs.
(P.M.)
40,00,000

b.

20,000
Water Charges (Lump sum)

c.

2,00,000
Furnace Oil [5000 litres @ Rs. 40/Litre]

d.

1,00,000
Diesel [2000 litres @ Rs. 50/Litre
Total :

43,20,000

Telephone
Postage
Consumable stores like chemicals, oil for hydraulic

Cost (Rs.
(P.M.)
20,000
2,000
50,000

Other Contingent Expenses

Sl.
No.
a.
b.
c.
d.
e.
f.
g.

Particular

power pack prinding wheel

Repair and Maintenance
Marketing
Insurance
Misc. Expenses
Total :

25,000
25,000
20,000
50,000
_____
1,92,000

Total Recurring expenditure (P.M.)

Sl.
No.
a.
b.

Particular
Personnel
Raw Materials/Consumables

c.
d.

Utilities
Other Contingent Expenses

Cost (Rs.
(P.M.)
4,59,000
49,32,000

Total :

7.

43,20,000
1,92,000
______
96,33,000

TOTAL CAPITAL INVESTMENT:Sl.

No.
a.

Particular

Cost (Rs)
57,60,000

Land and Building

b.

1,71,98,100
Machinery and Equipment

d.

8.

Working Capital (Recurring expenses for 3 months)

2,88,99,000
______

Total :

5,18,57,100

COST OF PRODUCTION:Sl.
No.
a.

Particular

Cost (Rs. (P.Annu

Total recurring expenditure

b.
Depreciation on Building @ 5 %
c.
Depreciation on machinery and equipment @15%
d.
Depreciation on Furnaces @ 30 %
f.
Depreciation on office equipment @ 20%
g.
Interest on total investment @ 13%

Total :

9.

12,57,65,688

TOTAL SALES (PER ANNUM):1

14,70,00,00
0

by sale of S.G. Iron Castings 3000 MT

@ Rs. 70,000 per MT
Total :

14,70,00,00

10.

PROFIT (PER ANNUM):Revenue Earned Cost of Operating

14,70,00,000 12,57,65,688

11.

2,12,34,312

PERCENTAGE OF PROFIT ON REVENUE

2,12,34,312x 100
14,70,00,000

12.

14.44%

PERCENTAGE OF PROFIT ON CAPITAL INVESTMENT

2,12,34,312x 100
5,18,57,100

13.

40.95%

61.51%

BREAK EVEN POINTS

B.E.P.
=

Fixed cost x 100

Fixed cost + Profit

3,39,34,488
x 100
3,39,34,488 + 2,12,34,312

Fixed Cost
Total Depreciation
Interest on Capital Investment @ 13%
40% of Salaries & Wages
40% of Contingent and utility excluding insurance
Total:

14.

34,62,715
67,06,973
22,03,200
2,15,61,600
________
3,39,34,488

Addresses of Machinery Suppliers

1.

M/s. White India Machines, No. 18, 2nd Floor, School Road, Nandanam, Chennai 600035

2.

M/s. Armstrong Smith & Co., 45, Armenian Street, Chennai 60001

3.

M/s. Hindustan Machine Corporation, Unit Building, J.C. Road, Bangalore 560002

4.

M/s. Elgi Equipment Ltd., Mission school street, Secunderabad (A.P.)

5.

M/s. Thermal Equipments, 2-Lataiee Bridge Road, Chennai.

6.

M/s. Tempo Industrial Corporation, 394, Bhadkankar Road, Mumbai 4

7.

M/s. Therlek Electrical Furnace manufacturing Co., Tripunithera, Kerala.