NSIC

Project Profiles

LEATHER BAGS MAKING

1. INTRODUCTION People use shopping bags to carry things to home ,which they purchase frommarket. Different material like cloth, nylon, plastic etc are used for manufacturing of bags.But they ar eless durable and lack aesthetic appeal. Leather can be used for manufacturing high quality shopping bags to carry grocery,cloth ,cosmetics and other such similar items.Most of the women used leather hand bags in India . The raw material avilability is high in Tribal areas of AP and Orissa state. The industry depends on taning industry.

2. MARKET There is considerable demand in the local markest and export. The people are very fashion conscious,expecially the younger generation do not mind paying a high price for fashionable items having aesthetic value. Most of the leather shopping bags that are sold in the local market are manufactured in other states. It is assumed that if some units start manufacturing leather shopping bags they can easily capture the local market.3. MANUFACTURING PROCESS The diferent components as per the approved design is clicked from dry miled pigmented lining leather by hand.The edges of these components are skived by hand to remove bulkness at seams. Then the components of lining are clicked. The components are then taken for stiching. The decorative items like buckles,buttons,chains are fitted. Then the bags for finishing for removing diferent defects.before taking the bags for marketing they arepacked properly. 4. PRODUCTION CAPACITY PER ANNUM Capacity Selling Price 5. PROJECT COST/CAPITAL INVESTMENT
S.No Description Amount Rs.

Rs.

7000 Bags per annum 180 Per kg

1 2 3

Preliminary & Preoperative Expns Fixed Capital Working Capital for Total Project Cost

month(s)

2000 118000 95615 215615

6. MEANS OF FINANCE
S.No Description %age Amount Rs.

1 2 3

Promoter Contribution Subsidy /Soft Loan Term Loan Total

15% 20% 65%

32342.25 43123 140149.8 215615

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Project Profiles

7. FINANCIAL ASPECTS A. FIXED CAPITAL i. Land and Buildings ii. Machinery and Equipment
S.No Description Qty. Rate Amount Rs.

Rented

2000 per month

1 2 5 6

Leather finishing and stiching machine Nos Sewing machines Other tools Lum Packing machine Electrification Total

1 2 1 1 1

90000 6000 10000 3000 3000

90000 12000 10000 3000 3000 118000

B. WORKING CAPITAL i. Salaries & Wages (per month)

S.No Description Nos. Sal/mon. Amount Rs.

1 2 3

Supervisor/Entrepreneur Skilled Unskilled Total

1 3 3

2500 2000 1500

2500 6000 4500 13000

ii. Raw Material (per month)

S.No Description Unit Qty. Rate Amount Rs.

1 2 3 4 5

Ljning cloth Cloth Buckles Finishing chemicals Packing material Total

Mtrs Mtrs Nos Nos

715 600 600 1 600

66 30 10 625 0.5

47190 18000 6000 625 300 72115

iii. Utilities (per month)

S.No Description Unit Amount Rs.

1 2

Power Water Total

LS LS

2000 500 2500

iv. Other Expenses (per month)

S.No Description Amount Rs.

1 2 3 4 5

Postage & Stationery Expenses Transportation Expenses Advertisement Expenses Consumeble Stores Miscellaneous Expenses Total

1500 1000 1000 500 2000 6000

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v. Total Working Capital (per month)

S.No Description Amount Rs.

1 2 3 4 5

Rent Salaries and Wages Raw Material Utilities Other Expenses Total

2000 13000 72115 2500 6000 95615

8. COST OF PRODUCTION (PER ANNUM)

S.No Description Amount Rs.

1 2 3

Total Working Capital Depreciation Interest Total

@ @

15% 12%

1147380 17700 16818 1181898

9. TURNOVER (PER YEAR)

S.No Description Unit Qty. Rate Rs. Amount Rs.

1 Total 10. FIXED COST (PER YEAR)

S.No Description

Bags per annum 7000

180

1260000 1260000

Amount Rs.

1 2 3 4 5

Depreciation Interest Rent Salaries & Wages @ Other Expenses incl. Utilities @ Total

40% 40%

17700 16818 24000 62400 40800 161718

11. PROFIT ANALYSIS & RATIOS 1 2 3 4 Net Profit Percentage of Profit on Sales Percentage of Return on Investment Break Even Point Rs. 78102 6% 36% 67%