CONVENTIONAL BRICKS

A.

INTRODUCTION

The construction activity is one of the vital sectors of the economy. There is
hardly any sector in the economy where there is no construction involved.
There has been tremendous increase in the growth of construction activities
during the last decade and with the higher targets of growth envisaged by end
of this century, and in the next century the construction activity is poised for
further growth. The general construction sector consisting of industrial
projects, agricultural projects, defence projects commercial establishments and
housing sector, all contribute to the growth of construction activity.
B.

PRODUCT SPECIFICATION & USES

IS 1077-1957 specifies the strength of bricks as given below: Bricks having a

compressive strength of minimum 35 kg/cm2 must be used for any work of
permanent nature.

Bricks having compressive strength 140 kg/cm2 are

classified as class AA bricks. Bricks having a compressive strength between 70

and 140 kgs/cms2 are classified as class A bricks. According to IS 1077-1976
common burnt clay bricks are classified on the basis of their average
compressive strength as given in the specifications.
C.

MARKET POTENTIAL

Every year several construction works are undertaken. Several bridges, dams,
roads,

shopping

complexes,

commercial

complexes,

hospitals,

hotels,

educational institutions, Govt. offices and residential houses are constructed.

All these civil construction activities consume large quantity of bricks and
therefore consumption of bricks is increasing.
The demand for housing is increasing as there is a heavy backlog of houses to
be constructed in India and there is a scope of adding 95 lakhs houses every
year. This is creating good demand for construction of new flats and houses.

The present housing shortage is estimated at 19 million houses per annum.

This is likely to touch 25 million in next 10 years. The investment required to
meet the demand gap is expected to be $88 billion( about 352,000 crores) The
urban sector alone is expected to account for an investment of $ 25 billion in
next five years.

The demand for housing is increasing as there is a heavy backlog of houses to

be constructed in India and there is a scope of adding 200 lakhs houses every
year. This allows a big demand for new flat and houses construction. The
consumer demand for housing has increased manifold. The rise in nucleus
families has increased the demand for the houses / flats.

In the last few years, the real estate sector has witnessed a spurt in demand
not just for residential property but also commercial property. This rise in
demand may be attributed to the large and growing middle class population of
about 300 million people.

It is estimated that the urban housing sector alone would require a total
investment of Rs.1,21,371 crores during the next five years to meet the
requirement of housing shortage of 75.7 lakhs DUs (dwelling Units),
upgradation of 3.2 lakh semi-pucca EWS ( Economically Weaker Section) units
and the additional construction requirement of 86.7 lakh units. The total fund
requirement including rural housing need would be 1,50,000 crores whereas
the total availability is Rs.52,000 crores only from the formal sector (Rs.34,000
crores for urban and Rs.18,000 crores for rural housing).

The demand for the bricks will increase in line with the demand for
construction.

D. TECHNICAL ASPECTS
1.

Installed capacity

The installed capacity of the unit proposed is 40,00,000 pieces of bricks per
annum.
2.

Plant & Machinery

The following items of plant & machinery are required.

Sl.

Item

a.

Chamber civil works consisting of 18 chambers with

the capacity of 17,000 Nos. of bricks in each chamber
and 2 Ht. Platform surrounding the outer sides of
chamber building with 4 width.
Klin-covering all the 18 chambers and connected to
41 height, 21 diameter M.S.Chimney
Mould
Cart Wheeler
Water Buckets
Pumps & Motor
Total

b.
c.
d.
e.
f.

3.

Value Rs.
lakhs

Manufacturing Process

The following chart shows the manufacturing process of Bricks.

Excavation of Clay
Mixing of Clay with Sand
Moulding
Loading of Moulded bricks into chamber kiln
Firing
Removal of Bricks from Kiln
Inspection

8.60

1.70
0.50
0.40
0.20
0.60
12.00

Packing and Loading

4.

Raw Materials

Raw materials required for manufacturing 40,00,000 bricks at 100% capacity

utilisation per annum.
Qty.
Clay
Sand

Rate

8400 MT

Rs.180

15.12

275 MT

Rs.650

1.78

Total

5.

Value (Rs.lakhs)

17.90

Land & Building

For installing the machinery required, a land area of 2 acres with constructed
floor space of 12600 sq. ft. will be sufficient. A building area of 12600 sq. ft. is
required for the following purpose:
Area (sqft)
Stock Sheds

1000 sqft.

Moulding Sheds (Thatched)

4800 sqft.

Coal Shed

800 sqft.

Store Room

500 sqft.

Office

500 sqft.

Labour Quarters

6.

5000 sqft.

Utilities

Power: A single phase load is sufficient for lighting facility. The fuel (fire wood)
required for firing bricks will be 50 MT per annum.
Water: Water required per day is about 20,000 litres.
Pollution: The project does not discharge any harmful effluents.

Man power:
The direct labour required are as follows.
Category

Rate Per 1000 bricks

Total Value

No. of worker to

Moulding

95.00

380000

20

Shifting

35.00

140000

14

40000

15.00

60000

5.00

20000

Dismounting

35.00

140000

14

Loading & Unloading

12.00

48000

828000

61

(Dired Bricks to Chamber)

Mounting

10.00

(Arranging in firing kiln)

Firing
Firewood Transfer

Total

In addition to above the unit proposes to appoint the following permanent staff:

Category

Nos. Salary/month

Total salary

Accountant

4000

4000

Supervisor (Maistry)

5000

5000

Day Watchman

3000

3000

Night Watchman

3000

3000
15000

Add: 20% benefits

3000
Total

18000

Total salary per annum (Rs.lakhs)

Rs.2.16 lakhs

Total Wages & salaries per annum Rs.10.44 lakhs (Rs.8.28+Rs2.16 lakhs

7.

Implementation Schedule

The chamber could be constructed within a period of 3 months. The building

could be constructed in a period of 4 months.

The project could be

implemented within a period of 6 months after the idea is conceived.

8.

ASSUMPTIONS

Installed capacity is 40,00,000 of bricks per annum. During first year, the
capacity utilisation is at 60%. This will be increased to 70% and 80% in
subsequent years.

Selling price is assumed at Rs.3000 per 1000 bricks

Cost of raw materials Rs.17.90 lakhs at 100% utilization per annum.

Power charge is estimated at the current rate, this works out to Rs.3,000
per annum.

Wages & Salaries is estimated at Rs.10.44 lakhs per annum.

Repairs & Maintenance is estimated at Rs.2000 per month.

Depreciation is calculated on WDV method

Selling, General & Adm. expenses is Rs.20000 per month.

Interest on Term Loan & working capital borrowings are estimated at 12%.

Income tax is provided at 33.99% on taxable income.

LIST OF MACHINERY SUPPLIERS

The chamber is normally constructed by experienced masons under the
supervision of civil engineers, who should be locally available. The chimney
can be procured from any engineering fabricators.

LIST OF RAW MATERIAL SUPPLIERS

Suitable sources of clay has to be located nearer the proposed site of the
chamber brick factory, so as to reduce the excavation and transportation cost.
About 10 acres of land is required for continuous supply of clay.

1. COST OF PROJECT

Rs.lakhs

Land

10.00

Building

15.00

Plant & Machinery

12.00

Other Misc. assets

0.00

Pre-Operative expenses

2.00

Margin for WC

1.89
40.89

2. MEANS OF FINANCE
Capital

20.64

Term Loan

20.25
40.89

3. COSTOF PRODUCTION & PROFITABILITY STATEMENTS

Years

Installed Capacity (No. of bricks) p.a.

4000000

Utilisation

60%

4000000 4000000
70%

80%

Production/Sales (No. of bricks) p.a.

2400000

2800000 3200000

Selling Price

Rs.3,000 per 1000 bricks

Sales Value

72.00

84.00

96.00

Raw Materials

10.74

12.53

14.32

Consumables (Rs.5000 p.m.)

0.60

0.63

0.66

Electricity

0.03

0.03

0.03

1.14

1.25

1.38

10.44

10.96

11.51

Repairs & Maintenance

0.24

0.25

0.26

Depreciation

3.30

2.88

0.37

26.49

28.53

28.53

Admin, & General expenses

2.40

2.52

2.65

Interest on Term Loan

2.43

2.13

1.52

Interest on Working Capital

0.92

0.92

0.92

Total

32.24

34.10

33.62

Profit Before Tax

39.76

49.90

62.38

Provision for tax

13.51

16.96

21.20

Profit After Tax

26.25

32.94

41.18

Fuel (Coal 50 MT @ Rs2500 / MT)

3800.00

Wages & Salaries

Cost of Production

Add: Depreciation
Cash Accruals

3.30

2.88

0.37

29.55

35.82

41.55

4. WORKING CAPITAL:
Values

Months

Consumptions

Margin

Bank

Amount

Finance

Raw Materials

2.00

1.79

25%

0.45

1.34

Fuel

2.00

0.19

25%

0.05

0.14

Finished goods

0.50

1.10

25%

0.28

0.82

Debtors

1.00

6.00

10%

0.60

5.40

Expenses

1.00

0.50

100%

0.50

0.00

1.88

7.70

Profit after Tax

41.18

43%

Sales

96.00

9.58
Say

-->

Rs.7.70 lakhs

6. PROFITABILITY RATIOS BASED ON 80% UTILISATION

Profit before Interest and Tax

64.82

Total Investment

48.59

Profit after Tax

41.18

Promoters Capital

20.64

133%
200%

7. BREAK EVEN LEVEL

Fixed Cost (FC):

Rs.lakhs

Wages & Salaries

11.51

Repairs & maintenance

0.26

Depreciation

0.37

Admin. & General expenses

2.65

Interest on TL

1.52
16.31

Profit Before Tax (P)

BEL =

62.38

FC x 100

16.31

FC +P

16.31+ 62.38
17%

80
100

of installed capacity

x 100