FIRE WORKS/CRACKERS Introduction: Fireworks are very ... - smallB

Introduction:
FIRE WORKS/CRACKERS
Fireworks are very popular in our country. These are extensively used during celebration of
various festivals. Fireworks provide a grand finale to most of the functions. Fireworks industry is
labour intensive and it involves a degree of skill and specialization. This industry is concentrated
in Sivakasi, Ramanand District, Tamil Nadu.
The fireworks industry is governed by the Indian Explosives Act and Rules 1940 and the unit has
to comply with all the regulations. A no objection certificate from the District Magistrate for the
establishment of such industry has to be obtained and approval for establishment of the factory
has to be obtained from the Inspector of Explosives of the region.
Further the entrepreneur has to obtain a license from the District Magistrate for possession and
use of sulphur, a license under the Factories Act from the Chief Inspector of the Factories of the
State is required. A Municipal License from the Municipal Commissioner for running the factory
and a License under the Industries (Development & Regulation) Act 1951 from the Ministry of
Industry, Govt. of India, New Delhi, is also required if 50 or more workers are employed with
power and 100 or more workers are employed without power.
Market Potential:
Corresponding with the present economic development and increase in social activities the
demand for fireworks items e.g. crackers, sparklers, coloured matches, magnesium pencil, pinwheels,
etc. is continuously growing. Except a few such units in and around Barpeta there is no
such manufacturing units existing the N.E. Region. The required fireworks supply for the region
mostly comes from Sivakasi in Tamil Nadu. However, Sivakasi being located at a large distance,
the supply of fireworks involves additional burden transport costs which resulted in increase of
price of fireworks in the region. Besides, too often the supply of fireworks to the region remains
irregular. Therefore, a few fireworks manufacturing units can come up particularly in the states of
Assam & Tripura in the region.
Plant Capacity:
The production basis for a typical tiny unit would be as under:
Working hours/day : 8 (1 shift)
Working days in a year 30
Annual Production capacity : Rocket (15,000 Nos.),
Letter tree (12,000 Nos.)
Cherki (2,700 Nos.),
Mater gash (1,500 Nos. with colour
with sound 1,800 Nos., white 1,200 Nos.),
Phuljari (6,000 Nos.).
The unit has been assumed to operate at 70%, 80% and 90% of its installed capacity in the first,
second and third year and onwards of its operation.
Raw Material:
The main raw materials required for manufacturing the above mentioned fireworks items are
provided below:
Salt petry : 4,050 Kg.
Sulphur 4,200 Kg.
Carbon 1,425 Kg.
Aluminium powder : 600 Kg.
Berata : 750 Kg.
Bussa : 450 Kg.
Nichiya 150 Kg.
Gun-powder : 60 Kg.
Blasting powder 30 Kg.
Potash : 60 Kg.
Cast iron : 600 Kg.
Phuljari Box
68
: 6,000 Nos.

In addition to the raw materials, consumables like Bamboo, Jute, Polyethylene paper, cover
paper, cover paper, colour paper etc. will be required.
Process:
The chemicals which form ‘explosive mixtures’ have to be properly mixed. The mixture will then
be filled in suitable containers which will be closed after inserting the fuse. There are also other
processes such as coating, dipping, etc. depending upon the products manufactured. Later the
articles are wrapped and packed in cartons. The process of manufacture depends upon the
nature of article produced. In case of different products, the manufacturing process is briefly
mentioned below:
1. Rocket: For preparation of Rocket, initially bamboo cases or boxes are made, which are
then covered by jute. Thereafter crushed sulphur and salt petry are put into the cases. A
stick also is placed into it.
2. Letter Tree: The letter of the letter tree is made of Halpata which is covered by some
pieces of cloth. Then sulphur is applied followed by black gun powder.
3. Cherki: The cases or boxes of Cherki are made of bamboo, which is then covered by
jute. Thereafter crushed sulphur and salt petry are poured into the cases with the help of
a stick.
4. Mater Gash: Mater gash cases are made of paper. Sulphur and salt petry are crushed
separately. These crushed substances are taken mixed with aluminium powder etc.
Lastly the mixture is poured into the cases and fully covered.
5. Phuljari: The cases of phuljari are made of clay. Salphur, salt petry and carbon are
separately crushed. The mixture is then put into the Phuljari case with the help of a stick.
Machinery:
The major equipment required by the unit for producing the aforesaid fireworks items are as
follows:
Paper cutting machine 32” complete with motor: No.
Disintegrator 12” complete with 20 HP motor: No.
Flour Mills 12” complete with 7.5 HP motor: 1 No.
Conical grinders complete with 3 HP motor: 1 No.
Wire straightening & cutting machine: No.
Strapping operation tools (manual): 3 sets.
Location:
The suitable locations for the project may be –
• Guwahati, Tinsukia, Karimganj, Dhubri in Assam.
• Agartala, Dhamanagar in Tripura
The fireworks industry will have to be located on the outskirts of the town or city due to the
hazards involved in the manufacture of the goods. The units should therefore posses a van to
gather raw materials from the railway station as also to transport finished products.
Infrastructure:
The basic infrastructure required are :
Land : 50,000 sq.ft.
Building 18,000 sq.ft.
Power : 30 KW
Water : 1,000 Ltr. Per day.
Manpower : 60 Nos. (Administrative (5), Factory Staff (55),
Total Capital Requirement:
The total capital requirement including fixed capital and working capital is estimated at Rs 21.60
lakhs as follows. Of this, the project cost comprising fixed capital and margin money on working
capital is Rs 20.50 lakhs.
69

A. Fixed Capital: (Rs in lakh)
Land 2.00
Building 9.50
Machinery 2.50
Miscellaneous fixed assets 3.50
Preliminary and pre-operative expenses _ 1.50
Total (A) 19.50
B. Working Capital:
Raw materials & Packing material 1 month 0.50
Finished goods weeks 0.60
Working expenses 1 month 1.00
Receivables 1 week _0.50
Total (B) 2.60
====
Total (A)+(B) 21.60
Note: Working capital may be financed as:
Bank Finance ….. Rs 1.10 lakhs
Margin Money ….. Rs 1.50 lakhs
Rs 2.60 lakhs
===========
Means of Finance:
The project cost of Rs 20.50 lakhs including margin money for working capital may be financed
as under:
Promoter’s contribution (35%) . Rs 7.20 lakhs
Term Loan (65%) …. Rs 13.30 lakhs
Rs 20.50 lakhs
===========
Operating Expenses:
The annual operating expenses are estimated at Rs 18.50 lakhs (70% capacity utilization) as
given below:
(Rs in Lakhs)
1. Raw materials 6.50
2. Utilities 0.70
3. Wages & Salaries 8.50
4. Overheads 0.60
5. Selling expenses @ 1% on annual sales 0.20
6. Interest on term loan (13.50%) 1.80
7. Interest on Bank Finance
for working capital (12.50%) 0.15
8. Depreciation @10% 0.25
18.50
====
Sales Realization:
The basis on which average ex-factory sales realization from the sale of various fireworks items
are based is provided below:
Items Nos. Unit Sales Price (Rs) Annual Sales Price (Rs)
Rocket 15,000 50/- 7,50,000
Latter Tree 12,000 40/- 4,80,000
Cherki 2,700 250/- 6,75,000
Mater Gash:
i) with colour
ii) with sound
iii) white
1,500
1,800
1,200
300/-
250/-
220/-
Phuljari 6,000 50/- 3,00,000
TOTAL 33,69,000
Based on this the annual sales realization is estimated to be Rs 33.69 lakhs and at 70% capacity
utilization the same is Rs 23.60 lakhs.
70
4,50,000
4,50,000
2,64,000

Profitability :
Based on the sales realization and the operating expenses, the profit would be Rs 5.10 lakhs
per year (70% capacity utilization). This works out to a return on investment of 25%. The plant
will break even at 51% of the rated capacity.
Highlight:
The major highlights of the project are as follows:
Total capital requirement : Rs 21.60 lakhs
Promoter’s contribution : Rs 7.20 lakhs
Annual sales realization (70% cap.) : Rs 23.60 lakhs
Annual operating expenses (70% cap.) : Rs 18.50 lakhs
Annual profit (pre-tax) : Rs 5.10 lakhs
Pre-tax Return on Sales : 22%
Break Even Point : 51%
No.of persons employed : 60
List of Machinery Suppliers: List of Raw Materials Suppliers:
1. M/s Standard Printing Machinery,
Shanti Building, 9, Mount Road,
Chennai – 600 002
2. M/s Indo European Trading Co.,
10 Sunkurama Chetty Street,
Chennai - 600 001
3. M/s Corporated Engineers,
7, Chittaranjan Avenue,
Kolkara – 700 013
4. M/s Singhasani Engineering Corpn.,
82/25 Factory Area,
Kanpur
(UP)
1. M/s Indian Metal Powder Industries,
5/50 Tardeo A/C Market,
Mumbai – 34
2. M/s Bengal Chemical & Pharmaceutical works,
8, Ganesh Chandra Avenue,
Kolkata – 700 013
3. M/s Anil Starch Products Ltd.,
P.B. No. 1062,
Anil Road,
71
Ahmedabad – 380 002
4. M/s Metal Powder Co. Ltd.,
Maravankualam,
Pudunagar,
P.O: 626709, Thirumangalam,
Madurai Dt.