PROJECT PROFILE ON STEEL RE-ROLLING MILL (25 TPD)

PREPARED BY

8th Floor, Parishrama Bhavan, Basheerbagh, Hyderabad

1. Introduction: Steel is a product of a large and technologically complex industry having strong forward and backward linkages in terms of material flows and income generation. TMT Bars are re rolled bars from Ingots/Billets. The finished product TMT bars are of Fe 415 & Fe 500 Grade steel bars. TMT bars have proven record in resisting loss of strength at high temperatures as experienced during fires. These bars are corrosion resistant. TMT Bars can be described as new-generationhigh strength steel having superior properties such as weld ability, strength, ductility and tensile strength, which meet the highest international quality standards.

2. Market:

The growth in construction activity and infrastructure projects in India has buoyed the demand for steel industry. There is a demand for steel products such has Thermo Mechanically Treated (TMT) Bars , Structural steel viz., angles, plates, channels, rounds etc.,

3. Raw Material: The raw materials used in manufacturing of TMT Bars are Ingots and Billets which are manufactured from scrap and sponge iron.

4. Manufacturing Process TMT (Thermo Mechanically Treated) Bar is a manufactured in a process in which the ribbed bar is heat-treated in three stages during the production process itself. The bar is rapidly cooled/ quenched in high pressure water jacket/spray system as it emerges from the finishing stand of the rolling mill.

The process of manufacturing TMT Bars is explained in the following process flow diagram: Raw material Receipt with desired shapes (Ingots) Heating in Reheating Furnace

Hot Rolling into TMT Bars in Mill Stands (Roughing Mill, Intermediate Mills and Finishing Mill)

Cutting Cooling by means of quenching

Inspection

Storage Yard and Dispatch

5. Technology: The technology/Machinery required for Steel Melting Shop unit are: Melting Shop Machinery item like Induction Furnace, dies for casting and other misc. items etc Rolling Mill Electricals like Motors, drivers, pumps, electrical panels, cables, liquid starters and Transformer of 1500 KVA etc Rolling Mill Auxiliary equipments like EOT cranes, Air compressor, gas cutting machines and other Misc. auxiliary equipments etc. 6. Investment: The investment for setting up a Steel Melting Shop Plant works out to Rs. 2.34 Crores and the break up of the cost is tabulated below. The land requirement will be around 1.0 acres. The Preliminary & Pre-operative expense works out to Rs 0.17 crores. Plant & Machinery including installation, erecting & transportation charges are of 0.60 Crores. Buildings and civil works are estimated to be 0.30 Crores. Electricity Deposits of 0.38 Crores has been estimated. The cost of electrical installation and Misc. Fixed assets works out to Rs. 0.50 Crores. Contingencies @ 3% have been considered in the project cost. Margin money for working capital is estimated to be 0.28 Crores. Table 1: Project Cost S.No. Description Cost (Rs in Crores) 1 2 3 4 5 Land & Site Development Buildings & Civil works Plant & Machinery including erc., ins.,& trans Electrical Inst. & Misc. Fixed Assets Contingency @ 3% 0.80 0.30 0.60 0.50 0.04

6 7 8

Electricity Deposits Preliminary & Pre-operative Expenses Margin Money for Working capital Total Project Cost

0.38 0.17 0.28 2.34

Means of Finance

The project is proposed to finance with a debt equity ratio of 1.99:1 and the means of finance is as follows:

Table 2: Means of Finance S.No. 1 2 Sources of Funds Share Capital - Equity Term Loan Total Cost (Rs in Crores) 0.78 1.56 2.34

7. Profitability Assumptions: Basic assumptions of the Steel Melting shop unit are given in the table below: The installed capacity is considered at 25 TPD The unit will work for 300 days with single shift operations of 8 hours. The unit can work at 80% capacity for the first year and can increase by 5% there on till third year. The manpower requirement is considered at 38 personnel for various level viz. casual labour, Technical & Supervisory staff and administrative staff.

8. Key Financial indicators: The returns are adequate enough to repay the term loan in 5 years. The key financial indicators are tabulated below. (Rs. in Crores) Year 4 Year 5 14.58 14.58 13.68 13.70 0.90 0.88 0.60 0.62 0.42 0.42 0.50 0.50 40.06% 38.13% 0.77 0.46 1.77 1.87 2.09 2.10

S No 1 2 3 4 5 6 7 8 9 10 11 12 13

Particulars Sales Total Expenditure PBIDT PBT PAT Cash Accruals BEP @ Operating capacity Debt Equity Ratio DSCR (Gross) Average DSCR DSCR (Net) Average DSCR IRR (%)

Year 1 12.96 12.19 0.77 0.39 0.30 0.38 52.55% 1.68 1.34 1.61

Year 2 13.77 12.93 0.84 0.49 0.36 0.44 46.80% 1.38 1.50 1.84

Year 3 14.58 13.67 0.91 0.59 0.42 0.49 41.99% 1.07 1.70 1.80 2.08 2.15 22%

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