Automobile Body Building (Bus Body)

Product Code : 374103003

Quality and Standards : Buyer's Specifications
Qty. : 324 Nos.(per annum)
Production Capacity :
Value : Rs. 13,51,00,000

Introduction

Automobile body (Bus Body) building is an important activity. The chasis are supplied by
Automobile manufacturers, and body is built by automobile body builders as per the
requirements of the customer and specifications of the different State Transport Undertakings.

Market Potential

Bus is used as the most common public transport vehicle in our country. Different State
Transport Undertakings are plying their buses for commuting public from one place to another
and from one State to another. Apart from these Undertakings, Private Bus Operators, travel
agencies etc. are also operating buses on permit basis. With rapid changes in the society, now
a days it has become necessary to provide good and efficient service to the public. Also with
the rapid industrialisation, public is moving very frequently from one place to another using
public transport. Since more and more development in the coming years, it is expected that
demand of public transport, private transport and luxury transport in the form of buses will
increase in the coming years.

Basis and Presumptions

1. Working will be for 3 shifts per day of 08 hrs each at minimum 75% working efficiency to
achieve the envisaged production capacity.

2. A time period of three years has been considered for achieving the full capacity utilisation
after start of commercial production.

3. Labour wages are considered as per the prevailing market rates.

4. Interest on fixed and working capital investment has been calculated at an average rate of
12% per annum.

5. The cost of land and building has been calculated as per the prevailing market prices, and
these rates are likely to vary from place to place.

Implementation Schedule

The following activities are to be completed and the approximate time for each activity is as
mentioned against each of them:

Sl. Period (in

Activity
No. Weeks)

1. Selection of product 4

2. Selection of Industrial site 2

3. Provisional registration 2
 4. Preparation of project Report 2

Application for finance and getting Loan

5. 24
sanctioned

6. Recruitment of man power 4

7. Purchase and Installation of machinery 14

8. Trial Run 1

It is necessary to obtain permanent Registration Certificate from the concerned District

Industries Centre after commencement of commercial production.

Technical Aspects

Process of Manufacture

Metal sheets are cleaned and derusted for grease/oil if any. Then sheets are cut to size for
forming different parts and these parts are formed on press brake. Now different parts and
their subassemblies are fabricated as per their design and size. These parts and subassemblies
are fabricated– together to make them a complete bus body. The complete body is painted as
per the requirements of the customer. Shower test is carried out for leakage etc.

Production Capacity (per annum)

Quantity : 324 Nos.

Value : Rs 13,51,00,000

Motive Power : 150 HP (Approx.)

Pollution Control

The manufacturing/fabrication of bus body does not pose any problem for pollution. However,
proper ventilation is to be done in shop floor area and painting area. Provision for pollution
control equipments has been made in this Project Profile.

Energy Conservation

Suitable energy efficient motors are to be used on proposed machines with provision of
recommended shunt capacitors.

Financial Aspects

A. Fixed Capital

(i) Civil cost Amt. (In Rs.)

(a) Land 4000 Sq.Mtrs. @ Rs. 3500/ Sq.Mtr. 1,40,00,000

(b) Office - 100 Sq. Mtr @ Rs.7500/Sq.mtr. 7,50,000

(c) Store –150 Sq. Mtr @Rs.6000/Sq.mtr. 9,00,000

(d) Working shed - 2000 Sq. Mtr. @ Rs. 6000/Sq.mtr. 1,20,00,000

 bore well and raw water storage, DG set room, security
room, laboratory, maintenance room, workers room

(e) Paint Shop (Preferably Dust Proof) - 100 Sq. Mtr. @

7,00,000
Rs. 7000 per Sq. mtr.

(f) Boundary wall, gates, roads inside the premises 8,00,000

Cost of land and building = 1,40,00,000 + 1,51,50,000 2,91,50,000

(ii) Machinery and Equipments

Sl. Ind./ Total

Description Qty.
No. Imp. (In Rs.)

Motorised Guillotine Sheet Shearing

Machine Capacity 2500×4 mm with 10
1. HP electric motor and starter etc. also Ind. 1 9,00,000
fitted with front and back side gauges,
sheet holding devices etc

Power operated Press Brake bending

capacity 2440 × 4 mm, 100 Ton with 15
2. Ind 1 11,00,000
HP Main Motor and 2 HP raw adjustment
Motor

Suspension type M.I.G. Welding system

250 Amp. along with power source, wire
3. feeder, Torch and flow Calibrated Co2 Ind. 1 2,00,000
regulator and Co2 heated with core
assembly OPC.

Gas Welding set with all the Accessories

4. Ind. 2 50,000
etc.

Arc welding machine 300 Amps. 15 kVA

5. Air Cooled complete with all the Ind. 5 2,00,000
accessories

Air Compressor with painting equipment

6. Ind. 1 2,00,000
and accessories for painting

Different types of power/Air operated

7. Ind. L.S. 4,00,000
tools like Nut runner, drilling gun etc.

8. Drilling Machine 1½" capacity Ind. 2 1,00,000

Metal cutting bandsaw for cutting

9. Aluminium sections complete with 2 HP Ind. 1 1,00,000
Electric motor and accessories

Hoist chain pulley block crane and

10. Ind. L.S. 5,00,000
material handling trolley etc.

Testing Equipment and others

Shower tester self fabricated (Nozzles to

1. be arranged at different orientations to Ind. 1 3,00,000
cover the entire portion of the vehicle)

Portable digital paint thickness checking

2. Ind. - 25,000
equipment (Coating thickness checking)
 3. Small measuring tools: Ind. - 25,000

4. Pollution Control Equipment - 2,00,000

Bore well and raw water system, DG set

5. - 15,00,000
with accessories

Excise and sales tax electrification and

6. installation charges @ 40% cost of - 27,20,000
machinery and equipment

7. Cost of Jigs, Fixtures etc. L.S. 5,00,000

8. Cost of office equipment L.S. 5,00,000

Total plant and m/c cost 95,20,000

(iii) Preoperative expenses 5,00,000

Total Fixed Capital (i+ii+iii) Rs. 2,91,50,000 +

3,91,70,000
95,20,000 + 5,00,000

B. Working Capital (per month)

(i) Personnel

Total
Description No. Salary
(In Rs.)

i) Administrative and Supervisory

General Manager 1 30,000 30,000

Commercial Manager, Sales and Marketing

staff, finance and accounts staff and 1,75,000
purchase staff and stores staff

Administrative officer and staff 30,000

Production manager, laboratory chemists

maintenance engineers and staff, shift 2,00,000
incharges

Chowkidar/Watchman 7 21,000

ii) Technical

Skilled Workers 40 5000 2.00,000

Semi-skilled workers 45 4000 1,80,000

Un-skilled Workers 40 3000 1,20,000

Total 9,56,000

Add perquisites @ 22% 2,10,000

Total 11,68,000

(ii) Raw Materials

Sl. Ind./ Rate Amount (In
Particulars Qty.
No. Imp. (Rs.) Rs.)

M.S. Channel 75 × 40 to ×
1. Ind. 9 MT 40,000 3,60,000
50 mm

M.S. Equal Angle 25× 25×3

2. Ind. 15 MT 40,000 6,00,000
to 50×50×6 mm

3. M.S. Flat 50 to 70 mm wide Ind. 3.750 MT 40,000 1,50,000

Aluminium chequered Plate

4. Ind. 3 MT 2,50,000 7,50,000
8 mm to ½ inch

5. CR/BP Sheet 10 to 26 SWG Ind. 75 MT 52,000 39,00,000

6. M.S. Pipe 3/4" to 1" Dia Ind. 1.500 MT 40,000 60,000

7. Aluminium Rolled Sections Ind. 1.500 MT 2,50,000 3,75,000

Bought out items and

8. Ind. L.S. 2,00,000
hardware items

Other bought out items such

as Raxine Ply,. PVC. Sheet.
9. Ind. L.. 5,00,000
Foam OTC, Electrical fittings
and fixtures, emblem etc.

Total 68,95,000

Amount
(iii) Utilities
(In Rs.)

Power 150x0,8x0.73x24x25x4 2,10,000

Water L.S. 10,000

Total 2,20,000

(iv) Other Contingent Expenses Amt (In Rs.)

Lubricants 20,000

Postage and Stationery and communication expenses 30,000

Consumable stores (Redoxide, Paint, Putty, Kerosene, Emery

5,00,000
paper, Welding electrode, tools etc.)

Transport Charges 25,000

Advertisement and Publicity 25,000

Insurance Charges 21,000

Sales Expenses 1,50,000

Misc. Expenses 50,000

Total 8,21,000
 (v) Total Recurring Expenditure (per month) (In Rs.)

Staff and labour 11,68,000

Raw material 68,95,000

Utilities 2,20,000

Other Contingent Expenses 8,21,000

Total 91,04,000

(vi) Working capital for 3 months Rs. 2,71,35,000

C. Total Capital Investment

(i) Fixed Capital Rs. 3,91,70,000

(ii) Working Capital for 3 months Rs. 2,73,12,000

Total Rs. 6,64,82,000

Machinery Utilisation

It is assumed that machinery will be utilised at 75% efficiency.

Financial Analysis

(1) Cost of Production (per year) Amt (In Rs.)

Total recurring cost 10,92,48,000

Depreciation on building @ 5% 7,58,000

Depreciation on Dies, Jigs and Fixtures etc. @ 20% 1,00,000

Depreciation on machinery and equipments @ 10% 8,52,000

Depreciation on office equipment 20% 1,00,000

Interest on total capital investment @ 12% 79,78,000

Total 11,90,36,000

(2) Turnover (per year)

Sl. Rate Total

Item Qty.
No. (Rs.) (In Rs.)

Full size Bus 324

i) 4,11,440 per piece 13,33,00,000
body Nos.

ii) Sale of scrap 90 MT 20000/MT 18,00,000

Total 13,51,00,000

(3) Net Profit (per year) (before tax)

 = Rs. 13,51,00,000 – 11,90,37,000
= Rs. 1,60,63,000

Net Profit (per year) ×100

(4) Profit Ratio =
--------------------
Total Sale

1,60,63,000 × 100
=
----------------------
13,51,00,000

= 11.89%

Net Profit (per year) × 100

(5) Rate of Return =
--------------------------------
Total investment

1,60,63,000 × 100
=
-----------------------
6,64,82,000

= 24.16%

(6) Break-even Point

Fixed Cost (Rs.)

Depreciation on machinery and equipment, tools, fixtures,

18,10,000
office equipment and building

Interest on total investment 79,57,000

40% of Salary and wages 56,06,000

40% of utilities and other contingent expenses 39,40,000

Total 1,93,13,000

Fixed cost × 100

B.E.P =
-----------------------
Fixed cost + Profit

1,93,34,000×100
=
-------------------------------
 1,93,34,000 + 1,60,63,000

= 54.62%

Additional Information

The unit should install degreasing and phospating plant for obtaining long life and good quality
paint of bus body to improve the quality of product .

Addresses of Machinery and Equipment Suppliers

1. M/s. Parekh Machine Tools

5, Khetra Das Lane, Behind Broad
Way Hotel, Kolkata.

2. M/s. Economic Machine Tools

21, Dr. V.B. Gandhi Marg,
(Forbes Street), Fort,
Mumbai-1

3. M/s. Master Engg. Works (Regd.)

G.T. Road (Dholewal), Opp. Indian
Oil Petrol Pump, Ludhiana-3.

4. M/s. International Machine Tools Corporation

5, Nyayamurti G.N. Vaidhya Marg,

Bank Street, Post Box No-2,
Behind State Bank of India,
Fort, Mumbai-1.

Raw Material Suppliers

1. M/s. Steel Authority of India.

2. State Laghu Udyog Nigam.
3. Local Market.

Contact for more information:

Information Manager
TIMEIS Project
E-mail: timeis@ficci.com