Automotive Chain (Motorcycle
PRODUCT CODE : 343401002
QUALITY AND STANDARDS : IS 11740:1986
PRODUCTION CAPACITY : Qty. : 3.42 lakhs (per annum)
Value : Rs. 239.4 lakhs
MONTH AND YEAR : February, 2003
PREPARED BY : Small Industries Service Institute
Industrial Area-B, Ludhiana-141 003 (Punjab)
Tel. Nos.: 0161- 531733-34-35
Fax: 0161- 533225
INTRODUCTION demand of motorcycles is also
increasing. As such, there is a demand
Chain is an important link to transfer for motorcycle chains to meet the
power from engine of a motorcycle to replacement market as well as for supply
the rear driving wheel through sprockets. to the O.E.M. units.
Automotive chains are of different sizes Therefore, there is a great potential
based upon the power to be transmitted. for this item and considerable scope to
The size employed upon the most set up new units in this line.
popular motorcycle in the Indian market
is of 12.7 mm × 8 mm dia × 7.85 mm B ASIS AND PRESUMPTIONS
width rollers. The lengths of the chain
1. The Project Profile has been
for such models of motorcycles are
prepared on the basis of single
either of 120 links or 118 links. This
shift of 8 hours each day, 25 days
scheme is based on 120 links.
in a month and at 75% efficiency.
MARKET POTENTIAL 2. It is presumed that in the first year,
the capacity utilisation will be 60%
Motorcycle has become a common followed by 70% in the next year
mode of conveyance as a result of and 80% in the subsequent years.
modern life style. As the population is 3. The rates of salaries and wages
rapidly increasing day by day, the for skilled workers and others are
A UTOMOTIVE CHAIN (MOTORCYCLE CHAIN) 17
the minimum rates in the State/ ii) Rollers are drawn into cups on
Neighbouring States. compound die sets from CR steel
4. Interest rate for fixed and working strips and then pierced on an
capital has been taken on an automatic S.P.M.
average rate of 16% whether iii) Bushes are manufactured by
financed by bankers or by curling process on a S.P.M. from
Financial Corporations. cold rolled strip with rounded
5. Margin money required is edges.
minimum 30% of the project iv) Pins are cut on an automatic
investment. Header Machine to required
6. The rental value of the workshed length.
and other built up/covered area v) Barrelling
has been taken at the rate of vi) Heat Treatment
Rs. 25.00 per square meter. vii) Barrelling
7. The rates quoted in respect of viii) Colouring
machines, equipment and raw
ix) Block Assembly on automatic
materials are those, prevailing at
the time of preparation of this
Project Profile and are likely to x) Chain assembly on automatic
vary from supplier to supplier and machines.
place to place. When a tailor xi) Rivetting
made project profile is prepared xii) Greasing
necessary changes are to be made. xiii) Packing.
IMPLEMENTATION SCHEDULE Quality Control and Standards
BIS has prepared a standard
Sl.No. Activity Period
specification No. IS 11740 :1986 on
i. Preparation of Project Report:
chains for motorcycle and the quality
a) Calling quotations 1 Month
should conform to the same.
b) Preparation 2 Weeks
ii. Provisional Registration as SSI 1 Week Production Capacity (per annum)
iii. Financial Arrangement 3 Months
Item Qty. Amount (In Rs.)
iv. Purchase and procurement of 2 Months
machines and equipments Automotive Chain 342000 Nos. 2,39,40,000
(Motorcycle Chain) (Excluding 5%
v. Installation of Machines 1 Month provision made
vi. Electrification 1 Month for stage
vii. Recruitment of Staff and Workers 1 Month
Motive Power 160 KW.
Process of Manufacture The building/workshed, specially heat
i) Outer and inner link blank are cut treatment section is to be provided with
from cold rolled steel strips on exhaust fans. Provision has also been
S.P.M. with progressive die sets. made for neutralising of the cyanide
18 A UTOMOTIVE CHAIN (MOTORCYCLE CHAIN)
salts. Necessary permission from Pollution Sl. Description No. H.P. Amount
Control Department/ Board is required. No. (In Rs.)
4. Special purpose roller 2 2 1,30,000
Energy Conservation cups Punching Machine
complete with automatic
i) Machine Shop should be well feeding systems and
ventilated and should have electricals etc.
transparent roof sheets to get 5. Special purpose curling 2 4 2,60,000
sufficient light during day time. and cutting machine
complete with automatic
ii) The periodic maintenance of feeding system and
Machines should be carried out. electrical etc.
iii) Shunt capacitors should be used 6. Special purpose bush 2 3 2,00,000
to improve the power factor. making and sizing
with automatic feeding
FINANCIAL ASPECTS system and electricals
7. Automatic header 1 2 50,000
A. Fixed Capital machine for cutting of
rivetting pins complete
(i) Land and Building (Rented) with electricals etc.
Built up area/covered area:
8. Automatic special 1 1 50,000
a) Store and Office 50 Sq. Mtrs. purpose lock pin
b) Working Shed 300 Sq. Mtrs. complete with
c) Heat Treatment Section 75 Sq. Mtrs.
9. Tumbling barrels 4 8 1,30,000
d) Packing Section 25 Sq. Mtrs.
complete with gear
Total 450 Sq. Mtrs. box motor and
Total Rs. 11,250 (per month)
10. 30 KW electric rotary 2 100 7,50,000
(ii) Machinery and Equipments retort type gas
Sl. Description No. H.P. Amount 30 Kg. Cap, complete
No. (In Rs.) with electricals etc.
Production unit 11. 15 KW salt bath furnace 2 40 2,50,000
1. Single action power 2 15 4,00,000 charge cap. 30 Kg.
press cap. 75 tonnes
complete with 12. Automatic chain block 2 4 4,00,000
automatic feeding assembly machine
system and electricals complete with electricals
etc. and feeding system.
2. Single action power 1 2 40,000 13. Automatic chain 2 4 3,80,000
press cap. 10 ton assembly machine
complete with electricals complete with
3. Single action power 1 5 1,50,000
14. Pneumatic chain 1 2 9,00,00
press cap. 50 tonnes
complete with 1 HP
A UTOMOTIVE CHAIN (MOTORCYCLE CHAIN) 19
Sl. Description No. H.P. Amount Sl. Description No. H.P. Amount
No. (In Rs.) No. (In Rs.)
Testing Section Electrification and Installation
15. Hardness Testing 1 — 1,00,000 Charges including cost of power 4,59,750
machine with spare connection and security deposit
set of diamonds and @ 10% of cost of machinery
steel balls and and equipment
Total Cost of Machinery and 50,57,250
16. Chain fatigue 1 2 75,000
(iii) Cost of Office Equipment, 1,00,000
(iv) Pre-operative Expenses 1,00,000
Tool Room And Machine Section
Total Fixed Capital 52,57,250
17. 1500 mm Bed sliding 1 2 1,00,000 (i +ii + iii+iv)
surfacing and screw
cutting centre lathe
with electric motor, B. Working Capital (per month)
18. 500mm × 200mm 1 1.5 60,000
traverse Horizontal Sl. Designation No. Salary Amount
spindle surface No. (In Rs.) (In Rs.)
electricals etc. 1. Manager 1 7000 7000
19. 12mm cap. Precision 1 0.5 20,000 2. Engineer 1 8000 8000
drilling machine 3. Accountant 1 2500 2500
complete with 4. Clerk/Typist/ 3 2000 6000
electricals etc. Store Keeper
20. Double ended bench 1 0.5 7,500 Technical
grinder 200 mm
5. Foreman 2 4000 8000
wheel dia. with motor.
6. Heat Treater 1 3000 3000
21. 24" stroke shaping 1 3 80,000
machine complete 7. Skilled Worker 14 2000 28000
with electric motor 8. Semi-skilled Worker 6 1750 10500
9. Peon/Chowkidar 3 1500 4500
10. Sweeper 1 1100 1100
22. Universal milling 1 5 2,00,000
machine size No. 2 Total 78,600
alongwith vertical Add Per-quisites @ 15% of salary 11,790
attachment and Total 90,390
complete with Say 90,400
(ii) Raw Materials Including Packaging
23. Pollution Control Equipment 3 2,50,000 Requirements
24. Marking and measuring — 75,000
Sl. Particulars Qty. Rate/ Amount
No. MT MT (In Rs.)
25. Special purpose toolings — 3,50,000 1. Medium carbon 27 21000 567000
and other petty steel sheet 19 SWG
2. CRCA, DD Grade 8.20 20000 164000
Total 11,42,500 steel strips 19 SWG
20 A UTOMOTIVE CHAIN (MOTORCYCLE CHAIN)
Sl. Particulars Qty. Rate/ Amount Working Capital (for 3 months) 15,86,000 × 3
No. MT MT (In Rs.) = Rs. 47,58,000
3. CR. Steel strip 5.5 30000 165000 C. Total Capital Investment
11 mm × 1 mm
thick with Rounded (i) Fixed Capital Rs. 52,58,000
edges (rolled from (ii) Working capital for 3 months Rs. 47,58,000
wire) Total Rs. 100,16,000
4. Low Carbon 4.5mm 8.5 30000 255000
dia steel wire
5. Liquid carburising 4000 10 40000
materials liters per ltr. (1) Cost of Production (per year) Amt. (In Rs.)
6. Ammonia Gas 25 2500 62500 (i) Total recurring cost 1,90,32,000
(ii) Depreciation on machinery 5,08,300
7. Packaging 30000 0.70 21000 and equipments @ 10%
cartons etc. Nos. each
(iii) Depreciation on Dies / Tools/ 15,000
8. Misc. O/B items LS 96000 measuring instruments
Total 13,70,500 etc. @ 20%
(iv) Depreciation on office 20,000
(iii) Utilities (In Rs.) equipment @20%
1. Power 19200 units @ Rs. 3.50/unit 67200 (v) Interest on total 16,00,000
2. Water 800 investment @ 16%
Total 68000 Total 2,11,75,300
(iv) Other Contingent Expenses (In Rs.)
(2) Turnover (per year)
1. Rent 11,250
2. Postage and Stationery 1,000 Item Qty. Rate (Rs.) Value (Rs.)
3. Consumable Stores 10,000 Motorcycle 342000 70/ 2,39,40,000
Chain Nos. chain
4. Telephone Charges 1,500
(3) Net Profit (per year) (Before Income Tax)
5. Repair and Maintenance 7,000
6. Transport Charges 5,000 Profit = Sales - Production Cost
7. Advertisement and publicity 5,000 = Rs. 2,39,40,000 – 2,11,75,000
8. Insurance 2,000
= Rs. 27,65,000
9. Taxes 1,500
10. Sales Expenses 10,000 (4) Net Profit Ratio
11. Miscellaneous Expenses 3,000 = Net Profit × 100
Turn over per year
Say 57300 = 27,65,000 × 100
(v) Total Recurring Expenses (per month) (Rs.) = 11.5%
1. Raw Material 13,70,500 (5) Rate of Return
2. Personnel 90,400
= Net Profit × 100
3. Utilities 68,000 Total Invesment
4. Other Contingent Expenses 57,300 = 27,65,000 × 100
Total 15,86,200 10016000
Say 15,86,000 = 27.6%
A UTOMOTIVE CHAIN (MOTORCYCLE CHAIN) 21
(6) Break-even Point (% of total Production envisaged) 6. M/s. Simplicity Furnaces Ltd.
(i) Fixed Cost (per year) (Rs.)
55-B, Phase-II, Mayapuri,
(a) Total Depreciation 5,43,300
(b) Rent 1,35,000 7. M/s. Sant Machine Tools
(c) Total interest 16,00,000 G.T. Road, Near Dholewal Chowk,
(d) Insurance 24,000 Ludhiana.
(e) 40% of salary and wages 4,33,920 8. M/s. Raj Enterprises
(f) 40% of other contingent expenses 2,11,440 628, Industrial Area-B,
(Excluding rent and Insurance) Ludhiana.
Total 29,47,660 9. M/s. Basant Mechanical Works
(ii) Net Profit (per year) Rs. 27,65,000 (Regd.)
B.E.P. = Fixed Cost × 100 720-722, Basant Road,
Fixed cost + Profit Industrial Area–B,
= 51.5% Ludhiana.
Addresses of Machinery and 10. M/s. Deep Industries
Equipment Suppliers Oswal Street No. 1,
1. M/s. Milton Machine Tools Ludhiana.
P.B. No. 30,
Sonepat (Haryana) Addresses of Raw Material Suppliers
2. M/s. Godly Machine Tools (P) Ltd. 1. M/s. Rolled Strips and Profiles Ltd.
C-190, Phase-VI, Karur (Kerla).
Focal Point, 2. M/s. Avon Cycles Ltd.
3. M/s. Research and Development 3. M/s. Special Steels Ltd.
Centre for Bicycle and Sewing Mumbai and
Machines, Focal Point, Bhagwan Chowk, Ludhiana.
Ludhiana. 4. M/s. Steel Strips Ltd.
4. M/s. Vishkarma Electric Furnaces
St. No. 2, Partap Nagar,
Ludhiana–141003 5. State Small Industries and Export
5. M/s. Kalsi Machine Tools
Gill Road, 6. M/s. Steel Authority of India Ltd.
Ludhiana-141003 7. Open Market.