PHENYL MAKING INTRODUCTION: The unit propose to ... - smallB

PHENYL MAKING
INTRODUCTION:
The unit propose to manufacture “Phenyl” which is a fluid disinfectant that destroys pathogenic
organism.
THE PRODUCT:
Phenyl is a strong deodorant and germicide for disinfecting areas covering places like hospital,
nursing homes, drains, lavatory, toilets, cowsheds and is extensively used for sanitation purpose.
It is notified as a “Drug” under the Drug Act and as such, prior permission and License from Drug
Control Authority is necessary for its production.
MARKET POTENTIAL:
The demand for phenyl is rapidly increasing due to the propagation and awareness regarding
importance of hygiene. The market segment of this product can be classified as follows:
(A. Rural & Urban Household
(B. Govt. health Sector
(C. Private health Sector
(D. Others.
All the above sectors are rapidly increasing in terms of numbers of units in today’s time. But there
are hardly sufficient number of units manufacturing phenyl covering the demand. Hence, there is
a scope of about 10 – 12 units to be set up in north-eastern region.
SUGGESTED CAPACITY:
A production of 180 Kilolitre per annum is suggested on the following basis –
No.of shift per day : 1 shift
No.of working hours per shift : 8 hours
Daily production : 600 litres.
Operating days/year : 300 days
Annual production : 180 Kilolitre.
INFRASTRUCTURE:
The main infrastructure requirements are –
A. Covered area : 500 sq.ft.
B. Utilities
Power : 1.5 KW
Water : 300 ltrs/day.
RAW MATERIALS:
The major raw materials required are cresylic creosote and cresol which are phenol bearing
liquids. A typical raw materials composition is furnished below:
[Weight (%)]
Cresylic cresole (27% phenol) 68.0
Cresol (99% phenol) 7.0
W.W. Rosin 9.0
Soyabean oil 4.0
Caustic soda 2.5
Water 4.5
Castor oil 5.0
100%
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Since none of the raw materials are manufactured in the region, but most of them are available in
the local market in Guwahati.
SUGGESTED LOCATION:
Suggested locations are –
Assam : Guwahati, Nagaon, Jorhat, Tezpur, Dibrugarh
Bongaigaon.
Meghalaya : Shillong, Tura, Jowai.
Manipur : Imphal
Arunachal Pradesh : Itanagar, Naharlagun.
Tripura : Agartala.
Sikkim : Gangtok, Pakyong, Mangan, Penlang, Lachung
PRODUCTION PROCESS:
The process of manufacturing phenyl are as follows in step-wise –
(A. Specification of fatty oils & rosin
(B. Preparation of soft soap by adding boiling solution of caustic soda to the mixture
of fatty oils & rosin.
(C. Dissolving soft soap in hot water and adding cresol & cresol.
(D. Filling in bottles.
FIXED CAPITAL
(Rs lakh)
Land and Building
On rent
Plant & Machinery 0.90
Misc. Fixed Assets 0.30
Preliminary & Pre-operative expenses 0.25
Total 1.75
CAPITAL COST OF PROJECT:
A. Fixed capital 1.75
B. Working Capital 5.57
Total 7.32
WORKING CAPITAL REQUIREMENT:
(Rs. Lakh)
1. Raw materials & consumables ½ month 1.50
2. Finished goods ½ month 1.60
3. Receivable ½ month 2.47
Total 5.57
COST OF PRODUCTION & PROFITABILITY:
(Rs Lakh)
1. Raw materials & consumables 35.91
2. Utilities & overheads 0.46
3. Wages bill 1.89
4. Other overheads 0.60
5. Depreciation 0.12
6. Selling expenses (@ 15% of annual sales) 7.56
7. Interest on Term Loan 0.16
8. Interest on Working Capital Loan 0.63
Total 47.33
PROFITABILITY:
Based on the sales realization and the cost of production, the profit at target production would be
Rs 3.07 lakh per year. This works out to be a return on sales at 6.09% and the return on
investment at 41.93%.
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SALES REALIZATION (Turnover):
Item Qty./Annum Price/Litre (Rs) Total Realization (Rs Lakh)
Phenyl 1,80,000ltrs/ 28/- Rs 50.40
180 Kilolitre
NOTE: The north east market for phenyl is shared by a few local products and producers located
at Kolkata like Kolkata Chemical & others. The detail price per litre ranges from Rs 35/- to Rs
40/- . At ex-factory price of Rs 28/- per litre, the annual sales turn over 180 Kilolitres of Phenyl is
estimated at Rs 50.40 Lakh.
SOURCE OF FINANCE:
A. On Fixed Capital:
Term Loan : Rs 0.44 lakh
Promoter’s contribution : Rs 1.31 lakh
Total Rs 1.75 lakh
B. On Working Capital
Bank Finance : Rs 4.17 lakh
Promoter’s Contribution : Rs 1.70 lakh
Total : Rs 5.57 lakh
C. Total (Term Loan + Working Capital Loan)
i) Loan amount(75%) Rs 5.48 lakh
ii) Promoter’s contribution(25%) Rs 1.84 lakh
Total Rs 7.32 lakh
Note: The source of finance has been calculated at 75% as Bank Finance and
25% as promoter’s equity.
MACHINERY:
The equipment required are –
(A. Karahi – 500 Litre capacity.
(B. Bottle washing machine 0.5 HP fitted on M.S. tank.
(C. Pilfer proof cap. Sealing machine.
(D. Weighing scale platform type of 300 Kg. capacity.
COST OF RAW MATERIALS & CONSUMABLES:
Sl.No. Materials Qty. tonne/KL Price
Tonne/KL
Amount
(Rs Lakh)
1. Cresylic cresole 100.80 18,000 18.14
2. Cresol
12.20 44,000 5.37
(99% Phenol)
3. W.W. Rosin 15.40 29,000 4.47
4. Castor Oil
9.00 15,500 1.39
(Second presence)
5. Soyabean Oil 6.40 36,000 2.30
6. Caustic soda 4.5 16,500 0.74
7. Packing Materials
(Bottles, labels etc.)
L.S 3.50
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COST OF UTILITIES & OVERHEADS:
1. Power - 1.5 KW : Rs. 0.16 Lakh
2. Other overheads : Rs 0.30 Lakh
(Water – 300 ltrs./day
@ Rs 100/day
MANPOWER REQUIREMENT & WAGES BILL:
Sl.No. Category No. Salary
per person
Amount
(Rs Lakh)
per month (Rs)
1. Manager 1 4,000/- 0.48
2. Salesman 1 3,000/- 0.36
3. Skilled labour 2 2,500/- 0.60
4. Semi-skilled labour 2 1,500/- 0.36
5. Helper 1 700/- 0.09
TOTAL 1.89
FINANCIAL RATIOS:
1. Profit + sales ratio : 6.09%
2. Profit + investment ratio : 41.93%
3. Break-Even Point
a) at 100% utilization : 52.55%
b) at 70% utilization : 36.76%
MACHINERY SUPPLIERS:
1. M/s Oriental Machinery (1919) Pvt. Ltd.
25, R.N. Mukherjee Road,
Kolkata – 700 001.
2. M/s Gee Gee Co (P) Ltd.,
B – 188/2, Savitri Nagar (Malaviya Nagar),
New Delhi – 17
3. M/s Archana Machinery
A.T. Road,
Guwahati (Assam)
4. M/s Kamrup Machinery,
A.T. Road,
Guwahai (Assam).
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