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JUICER-MIXER-GRINDER MANUFACTURING/ASSEMBLING UNIT

Introduction / Background: Features and Application: Domestic Mixer-Grinders or Juicer-Mixer Grinders are small kitchen and applications. In India these appliances have increasing importance given the unique food preparation processes and the culinary style. The basic functions carried out by these appliances are: (i) Mixer-Grinder: performs dry and wet grinding of spices, coffee beans etc. and mixing for gravy preparations, Milk shakes, whipping operation etc. MG comes with dry grinding, wet grinding jar and mixer jars and a set of blades. Juicer-Mixer-Grinder(JMG): in addition to the Mixer-Grinder functions the JMG can perform juice extraction function mainly for fruits and similar items like carrots etc.

(ii)

Since it is an electrically operated consumer durable item, usually the product design takes care of the high level of safety requirements. Attractive look and finish as well as features enhance the sale of the product. Equally important is the after sales service for increasing the good will of the brand. Standards and Regulatory Aspects

Bureau of Indian standards specification IS:4250:1980 is applicable for Electrical Mixer-Grinders. Periodic acceptance tests need to be carried out at the premises of the manufacturing/assembly location. In addition to these sampling inspection needs to be carried out by the quality testing section in the plant. The type tests for Juicer-Mixer-Grinder are to be carried out at the BIS laboratory. As the Juicer-Mixer-Grinder is specifically for the Indian Culinary and food preparation related requirements, the Indian standard is most appropriate for the manufacturing. Manufacturing Process

Given the nature of the product and the process the industry practice is to outsource most of the component/subassemblies such as blades, high speed motors, injection moulded components, and such supplies/vendors are available in manufacturing clusters. Some reputed manufactures such as sumeet (Power Control and Appliances Pvt. Ltd.) manufacture the motor themselves while others outsource the same. These days due to the high costs involved in the manufacturing of the dies and moulds for the plastic body parts, most JMG manufactures provide the design of the moulded parts to independent plastic moulding units and procure main body moulds and other plastic moulded parts from them. The mould preparation cost is usually borne by the moulding units who in turn supply. The additional production to the replacement market to recover their investment in the moulds. Process Flow The total manufacturing process usually follows the marketing of various sub-assemblies as mentioned below and carrying out final total assembly, which is followed with inspection and testing and final packaging.

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Exhibit 1 Estimated Raw Material Requirement for JMG Manufacturing Sl. No. 1 2 3 4 5 6 7 8 9 10 11 Capacity and Production The proposed capacity and production for the JMG is based on the factors such as: Current demand-supply gap, Future demand for the product, Minimum economic plant size. Raw material Item Electrical Motor 500 Watt Plastic Moulded Body Parts/Kit Die Cast Items/Base Plates Jars set Blades set Sheet metal components Rubber components sets(bushes, gaskets etc.) Cables and Switches Other Small Hardware items Consumables Thermo Cole/Other packaging

BASIS AND ASSUMPTIONS FOR FINANCIAL WORKINGS Sl. No. Parameter Assumption Basis as applicable 1 Capacity 36,000,units/annum on a single shift basis for 300 days 2 Capacity utilization in initial At 67% in the 1st year at year 100% after 1st year 3 Average unit realization Rs. 1,225 unit Current prices at contract manufactures end 4 Cost of land, Plant and Values taken at current rates machinery 5 Salary and wages Local prevailing Rates 6 Debt: Equity ratio 60:40 7 Interest on term loan 12% p.a. PLR of 10% + 2% 8 Margin Money 25% of working capital Project financing norms 9 Effect of Inflation The effect of inflation not It is considered that the inflation would considered affect the revenues and the expenses by the same amount 10 Selling and Distribution Not considered as the unit Expenses is expected to operate as contract manufacturing unit INCENTIVES 11 Interest on working capital 9% p.a. (i.e. 3% subsidy on Central interest subsidy scheme 2007 interest on working capital loan) 12 Capital investment subsidy 15% on plant and Central capital investment subsidy machinery scheme 2007

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Sl. No. 13 14

Parameter Insurance premium Income Tax

Assumption 100% subsidy on insurance premium for 10 year 100% subsidy on Income Tax for a period of 10 year

Basis as applicable Central comprehensive insurance scheme 2007 Central Income Tax subsidy scheme 2007

Thus in Summation: Rated plant capacity 36,000 Juicer-Mixer-Grinders per annum on a single shift basis Average Net Realization Rs. 1,225/- per unit Revue at rated Capacity Rs. 4,41 Crore Production target (Year 1) 24,120 Nos. (1 shift) Revenue (Year 1) Rs. 2.96 Crore Capital cost of the project Fixed capital A. Land of the Project Particular Leased Land Units 1,500 Sq. meter One time lease Payment Rs. Sq. meter Rs. 250/- Sq. meter

B. Plant and Building Construction Cost Particular Units Land Development Building 950 Sq meter and Civil Work Plant (800 Sq. m) Office (50 Sq. m) Storage Warehouse (100 Sq. m) C. Machinery and Equipment
Sl. No. Item

Average Construction Cost per Sq. Meter

1 2 3 4 5 6 7 8

9 10 11

Redial Drilling machine with upto 25 mm drill capacity Jig type vertical drilling machine with 12.5 mm Diameter Drill capacity Buffing machine with dual wheel 250 mm Hand press 1 tonne Fly press 10 tonne capacity Air compressor unit and set of pneumatic screwing units for work stations (Set price) Work stations with associated eqpt. Conveyor belt system 1.5 ft width with 0.35 ft/min to 1.5 ft/min variable speed with provision for length upto 75 ft and load upto 200 kg Soldering Units Screen printing unit Miscellaneous Eqpt. Incl. pedestal Grinder, tool room bench, tables for jar Assembly, vices, rimmer sets etc.

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Rs. 2,152 /sq. m Rs. 3,230 /Sq. m Rs. 2,152/Sq. m

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R
1 2 1 2 1 1 19 1

Total Rs. 375,000/-

Total Rs. 2,098,300/1,21,00/161,500/215,200/-

Quantity

Unit Cost(Rs.)

Total

60,000 15,000 20,000 5,000 20,000 57,000 8,000 15,000

60,000 30,000 20,000 10,000 20,000 57,000 152,000 150,000

4 1 1

2,000 20,000 60,000

8,000 20,000 60,000

Sl. No.

Item

Quantity

Unit Cost(Rs.)

Total

12 13 14 15 16 17 18 19 20 21

Storage racks and drying racks for screen printing High voltage testing set Multi meters Ammeter 0-10 amps Voltmeter 0-500 V Wattmeter (1000 watts range) Auto-transformer (270 V x 5Amp) Vernier caliper and other precision measuring equipment etc. Jig, Fixtures and tools Electrification, installation and commissioning etc. Total Plant and Machinery Cost

10 1 3 3 3 3 2 1 set 1 set

2,500 20,000 3,600 700 700 5,000 6,000 8,000 50,000 172,760

25,000 20,000 10,800 2,100 2,100 15,000 12,000 8,000 50,000 172,760 940,760

D. Miscellaneous Fixed Assets Sl. No. 1 2 3 4 Particulars Office Equipment and Furniture Electric fittings and fixtures Fire fighting equipment A/C Equipment Total

E. Pre-operative Expenses Sl. No. 1 2 3 4

Establishment Cost Loan Processing Fee Rent, Taxes, Traveling expenses and other miscellaneous expenses Detailed project Feasibility report Total Pre-operative Expenses

F. Provision for Contingency

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Item

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Total Value Rs. 100,000 25,000 25,000 50,000 200,000

Total Rs. 25,000 25,000 25,000 150,000 225,000

Provision for contingency at 10% of the total capital investment Operating Expenses

A. Raw Material Requirement

Sl. No. Raw Material item Quantity per month Rate including transport cost (Rs./ unit) Total Rs.

1 2 3 4 5 6 7 8 9

Electrical motor 500 watt Plastic moulded body parts/kit Die cast item/base plates Jars set Blades Sheet metal components Rubber components sets (bushes, gaskets etc.) Cable and Switches Other small hardware items

3,000 3,150 3,150 3,150 3,150 6,300 3,150 3,150 3,150

277.00 150.00 45.00 171.00 40.50 50.00 20.00 55.00 11.00

831,000 472,500 141,750 538,650 127,575 315,000 63,000 173,250 34,650

10 11

Consumables Thermocole/other packaging Total for inputs/raw materials at 3,000 pieces per month

3,150 3,150

6.00 25.00

18,900 78,750 2,795,025

Annual Raw Material Costs at 36,000 pieces per year production = Rs. 33,540,300=00. Annual Raw Material Costs at 24,000 pieces per year production = Rs. 22,470,001=00.

B. Direct Labour
Sl. No. Direct Labour Expected Qualification 2,000 JMG/Mont h (67% cap.) Nos. 3,000 JMG/Month (100% cap.) Unit salary/Mo nth Rs. Annual Cost Rs. 2,000 3,000 JMG/Mont JMG/Mont h (67% h (100% cap.) cap.)

2 3

4 5 6 7

Diploma in Engg./ITI certificate with sufficient experience Skilled workers on ITI Certificate conveyor assembly Skilled workers on ITI Certificate Jar assembly and Screen Printing Process Inspection ITI certificate with training for Inspection Testing and QC ITI certificate with training for QC testing Packing Matriculate Perks at 15% Total Direct Labour Cost per Year

Production Supervisor/Foreman

5,500

66,000

66,000

12 3

18 5

5,000

720,000 180,000

1,080,000 300,000

There is no specific requirement of other highly skilled and specifically trained manpower apart from the normally available qualified manpower as mentioned above at the proposed manufacturing location as Guwahati.

C. Indirect Labour
Sl. No. Indirect Labour

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1 19
Nos.

C
1 1 2 28

5,000

5,000 5,000 3,000

60,000 60,000 36,000 168,300 1,290,300

60,000 60,000 72,000 245,700 1,883,700

Expected Qualification

Unit Salary per month

Total cost per month (Rs.)

Total cost per year (Rs.)

Manager

2 3 4 5

Storekeeper cum Clerk Security Guard Delivery and Matriculate Distribution Staff Perks at 15% Total Indirect Labour Cost

B.E. Mechanical or Production, MBA an advantage B.Com

8,000

8,000

96,000

1 1 2

4,000 3,500 3,000

4,000 3,500 6,000 3,225 24,725

48,000 42,000 72,000 28,700 296,700

There is no specific requirement of other highly skilled and specifically trained manpower apart from the normally available qualified manpower as mentioned above at the proposed manufacturing location as Guwahati.

D. Power and Fuel

Sl. No. Utilities (Monthly) Consumption/month at 3,000 unit/month production Unit rate Rs. Total Monthly Cost Rs.

Power 10 KVA 3,500 units 6 Water 500 Liters 2.5 Total Total Annual Power and Fuel Cost at full capacity production = Rs. 267,000/E. Other Expenses
Sl. No. Particulars Monthly total Rs.

1 2

21,000 1,250 22,250

Total Annual Cost Rs.

1 2 3 4 5 6 7 8 9

Postage and Stationery Telephone Consumable incl. that for computers Transport Conveyance Repairs and Maintenance R & D Expenses Monthly Lease Rent at 3,45/Sq. Feet/month for 1,500 Sq. m leased land Other Miscellaneous expenses at 5% of the above Total

F. Total Working Capital

Sl. No. Fixed Capital

Assumption

1 2 3 4 5

Raw Material (RM) Work in Progress (WIP) Finished Goods Inventory Bills Receivable (Debtors) Creditors Total Working Capital

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1 month 0.25 month 0.5 month 1 month 1 month

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1,000.00 5,000.00 2,000.00 7,000.00 5,000.00 5,000.00 5,000.00 55,675.00

12,000 60,000 12,000 84,000 60,000 60,000 60,000 668,100 51,405 1,079,505

4,283.75 89,958.75

Total value Rs. (At 2,000 units/Month Production)

Total value Rs. (At 3,000 units/Month Production)

1,872,667 498,775 936,333 2,462,250 1,887,574 3,882,451

2.795,025 743,563 1,397,513 3,675,000 2,817,275 5,793,825

Margin Money at 25% of the Working Capital (2,000 Units/Month)= Rs. 970,613/Margin Money at 25% of the Working Capital (3,000 Units/Month)= Rs. 1,448,456/-

Total Capital Cost of the JMG Project Sl. No. 1 2 3 4 5 6 7 Cost Head Land (One time lease cost) Land Development and plant building construction cost Machinery, Installation and Equipment Miscellaneous fixed Assets Pre-operative Expenses Margin money for working capital Provision for Contingency Total Value Rs. 375,000 2,098,300 904,760 200,000 225,000 970,613 477,367 5,251,040

Debt: Equity Total capital cost of the Project Equity (40%) Loan (60%) Rs. 52.51 Lakhs Rs. 21.00 Lakhs Rs. 31.51 Lakhs

Profit and Loss statement for the JMG project

Parameter INCOME Capacity (Nos.) Capacity Utilisation Production Net Sales Realization (Rs.) EXPENDITURE Raw Material Direct Labour Indirect Labour Power and Fuel Total Operating Costs Gross operating profit including transport subsidy (Rs.) Other operating expenses PBDIT Interest on working capital Loan Interest on Term Loan for capital Exp. Depreciation PBT Tax PAT (Rs.) Cash Profit Gross profit margin Net profit Margin

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

36,000 36,000 67% 100% 24,120 36,000 29,547,000 44,100,000

36,000 36,000 36,000 36,000 36,000 100% 100% 100% 100% 100% 36,000 36,000 36,000 36,000 36,000 44,100,000 44,100,000 44,100,000 44,100,000 44,100,000

22,472,001 33,540,300 1,290,300 1,883,700 296,700 296,700 178,890 267,000 24,237,891 35,987,700 5,399,559 8,247,300

33,540,300 33,540,300 33,540,300 33,540,300 33,540,300 1,883,700 1,883,700 1,883,700 1,883,700 1,883,700 296,700 296,700 296,700 296,700 296,700 267,000 267,000 267,000 267,000 267,000 35,987,700 35,987,700 35,987,700 35,987,700 35,987,700 8,247,300 8,247,300 8,247,300 8,247,300 8,247,300

1,079,505 4,320,054 262,065 368,303 372,496 3,317,190 0 3,317,190 3,689,686 18% 11%

1,079,505 7,167,795 391,083 368,303

1,079,505

327,300 6,081,109 0 6,081,109 6,408,409 19% 14%

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7,167,795 391,083 327,381

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1,079,505 7,167,795 391,083 286,458 253,382 6,236,872 0 6,490,254 6,490,254 19% 14%

1,079,505 7,167,795 391,083 245,536 223,223 6,307,943 0 6,531,176 6,531,176 19% 14%

1,079,505 7,167,795 391,083 204,613 196,837 6,375,262 0 6,572,099 6,572,099 19% 14%

1,079,505 7,167,795 391,083 163,690 173,701 6,439,321 0 6,613,022 6,613,022 19% 15%

287,851 6,161,480 0 6,449,331 6,449,331 19% 14%

Return on Investment = 65% Pay back period = 2 Year

Particulars Capacity Utilisation Net Realization Variable Costs Direct material Power & Fuel Interest on working capital Total variable costs Contribution Fixed costs Other expenses (Fixed) Manpower costs Interest on term Loan Total fixed cost Break even Point Actual Sales Break even sales at % of Actual Sales

Year 1 67% 29,547,000 22,472,001 178,890 262,065 22,912,956 6,634,044 1,079,505 1,587,000 368,303 3,034,808 13,516,563 29,547,000 46%

Year 2 80%

Year 3 100%

Year 4 100%

Year 5 100%

Year 6 100%

Year 7 100%

44,100,000 44,100,000 44,100,000 33,540,300 33,540,300 33,540,300 267,000 267,000 267,000 391,083 391,083 391,083 34,198,383 34,198,383 34,198,383 9,901,617 1,079,505 2,180,400 368,303 9,901,617 1,079,505 2,180,400 327,381 9,901,617 1,079,505 2,180,400 286,458

44,100,000 44,100,000 44,100,000 33,540,300 33,540,300 33,540,300 267,000 267,000 267,000 391,083 391,083 391,083 34,198,383 34,198,383 34,198,383 9,901,617 1,079,505 2,180,400 245,536 9,901,617 1,079,505 2,180,400 204,613 9,901,617 1,079,505 2,180,400 163,690

3,628,208 3,587,286 3,546,363 16,159,378 15,977,119 15,794,855 44,100,000 44,100,000 44,100,000 37% 36% 36%

Sources of major raw material for JMG FHP Motors Plastic Moulded Body Parts Kanta Plastech, A-696, TTC Botisha Home Appliances, Plot No. 61, Sector-25, Faridabad 121 005, India Industrial Area, M.I.D.C. Mahape, New Bombay 400709, Maharashtra India Phone- +91-129-5231471/5231470 Usaka Industrial Components Pvt. Ltd. Tel-91-22-27685551 Fax-91-22-27685552 The Progressive Enterprises, 22 B-11, DSIDC Industrial Complex, New Delhi-110041, India. Phone +91-11-5472433 Fax-+91-11-5474752 Rabindra, Sarani, Calcutta, West Bengal Damini Marketing Company, 16 Tel- +91-33-2368641/2374276 Crown Plaza 27 28 Neelam Bata Road Nit, Fax- +91-33-4005506 Premium Moulding & Pressing Pvt. Ltd. Faridabad 121001, India Phone- +91129185 Indl. Estate Udyog Vihar Phase-1 25022345/25022124/25022125/9810099259 Gurgaon India Tel- +91-124-340351 Fax- +91-124-341832 Fax- +91-129-25022125 SS Jars Set Blades Set nd Boskina International, 40-1, Mahavir Mkt., 2 S.K. Beri Pvt. Ltd. A-119, Okhla Industrial Area, Panjrapole, Lane, C.P.Tank, Mumbai-400004 Phase II, New Delhi- 110020, India. Tel- +91-22-8174545, Fax- +91-22-8166363 Phone - +91-11-26385027/26384462/26385177/ Eastwest Enterprises, Mp-106, 26386454 Maurya Enclave, Pitampura, Delhi-110034 Fax - +91-11-26386453/24628275 Tel-+91-11-7138736, Fax-+91-11-7132801 Bhalaria Metalcraft Pvt. Ltd., K-1 Todi Indl. Est. Radhaswami Satsang Rpad, Off.: Uttan Cross Road, Bhayanadar West, thane- 401101 Tel- +91-22-8198226, Fax-+91-22-8198227

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3,505,441 3,464,518 3,423,595 15,612,596 15,430,333 15,248,069 44,100,000 44,100,000 44,100,000 35% 35% 35%

Switches Namoelectric Controls, 427/2 Gultekdi Industrial Estate, Pune 411037 Maharashatra, India Tel- +91-20-4263235 Fax- +91-20-4472484 Anchor Electronics And Electrical Ltd. Basushree Plot No. G-9 , Cross Road, Marol Bus Depot Lane, A. M.I.D.C., Andheri (East), Mimbai-400093, Tel91-22-6938695, Fax- +91-22-693-8673/74

Packaging Amrat Packaging, A /3 '13 , Janakpuri, New Delhi 110058 www.amratpackaging.com Yogeshwa Prackers, PlotN o. 13/4, Mohite l.E. Wanadongri, MIDC Hingna Road, Nagpur- 440016 Tel.0 710 4-2235497 Fax. 07104-2237665.

Sources of technology/Machinery for JMG Manufacturing Hand Press, Fly Press, Drilling Machine Perfect Machine tools Bell Building, Sir PM Road, Mumbai 400001 Tel- 022-22872211 Modern tools Manufacturers, B-118 Mayapuri Industrial Area, New Delhi 110064 Tel- 011-25132243/25131769 Mankoo India Pvt. Ltd. (Mankoo Pressas) 29/535, G.T. Road opp. Dhandari Kalan Railway Station, Ludhiana -141010. Punjab. Tel- 0161-2510948 Conveyor System and Storage Racks Cornpetent Conveyor Systems Pvt. Ltd E-37 & 67 Sec 9 Noida - 201301Uttar Pradesh (lNDlA), Tel- +(91) (120)-244769/2444240/2544522 Vinar Systems 36 Lal Bahadur Shastry Stadiurn, Hyderabad 500001 Tel- 040-23232019 Fax-23249811 Pneumatic Screwdrivers Tools Sivenara Engineers, 2973, 13th Mani Road 1st Floor, li Stage, D-Block, Rajaji Nagar, Bangalore 560021, India Tel- +91-80-3422085 Fax- +91-80-3422085 Buffing Machine and Bench grinder Grind Master Machines P. Ltd., B-11 MIDC Area, Aurangabad- 431005. Tel- 0241-376262,376908 Novelty Buff Company Gala No.2, Opp Mahakali Temple, Laxmi Nagar, Off. Link Road, Goregaon(W), Mumbai-400090, Tel-022-2083920 Fax- 022-2018107 Vijoy Machine Tools, 20 Wasan Udyog Bhaban Off Senapati Bapat Marg, Lower Parel, Mumbai 400123, Tel-022-24950886 Soldering U nit Klapp Heating Controls Pvt. Ltd Electronic Sadan Bldg. 1, Unit No. 34 MIDC Bhosari Pune-41102 Tel -020-7121512 Fax-0204114993 Soldron India 157, A/2 Shah and Nahar Industrial Estate, S.J. Marg Lower Parel, Mumbai 400013. India Tel- 24953077,24961286, Fax- 24953076 Electronic Test and Measuring Instruments Meco Instruments P. Ltd. 301 Bharat Industrial Estate T.J. Road Sewree Mumbai 400015, India Tel- +91-22-24137423,24437253,24132425 Fax - +91-22-24146234 Bharat Electronics & Electrical, 407. Commerce House 140 N. Master Road Fort, Mumbai Maharashatra India 400001, Tel 24228057

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High Voltage Test Setup SPS Electronic UK Limited Old Bank House 1 High Street Arundel West Sussex BN 18 9AD +44(0)1903884663, +44(0)1903884629 info@spselectronic.co.uk K.P. Electronics : B23/204, Anand Nagar, C.S. Road, Dahiser, Mumbai, Tel- 022-28941714

Screen Printing Machinery Universal Technologies 7/16, 1st Floor Vishal I.E. Navghar, Vasai (E), Thane Tel- 0240-392922/392780 Fax- 95250-392780 Solar Machines P. Ltd. 22D, Wadia Charities Bldg., 2nd Floor S.A. Brelvi Road. Fort Mumbai 400001 Tel- 022-22875181 Fax- 022-22870470