PROJECT REPORT

OF
ALUM MANUFACTURING UNIT

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Alum Manufacturing Unit.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in

project identification for investment and in order to serve his objective; the document covers
various aspects of the project concept development, start-up, marketing, finance and
management.

[We can modify the project capacity and project cost as per your requirement. We can also
prepare project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak

Building , 27/1/B, Gokhlley Marg, Lucknow-226001
Delhi Office: Multi-Disciplinary Training
Centre, Gandhi Darshan Rajghat, New Delhi 110002
Email: info@udyami.org.in
Contact: +91 7526000333, 444, 555
 PROJECT AT GLANCE

1 Name of Proprietor/Director XXXXXXXX

2 Firm Name XXXXXXXX
3 Registered Address XXXXXXXX
4 Nature of Activity XXXXXXXX
5 Category of Applicant XXXXXXXX
6 Location of Unit XXXXXXXX
7 Cost of Project 24.06 Rs. In Lakhs
8 Means of Finance
i) Own Contribution 2.41 Rs. In Lakhs
ii) Term Loan 16.65 Rs. In Lakhs
iii) Working Capital 5.00 Rs. In Lakhs
9 Debt Service Coverage Ratio 3.31
10 Break Even Point 0.28
11 Power Requiremnet 25 KW
12 Employment 9 Persons
Bauxite, Potassium Sulphate,
Concentrated Sulphuric acid,
13 Major Raw Materials Distilled water, Flaked Glue
& Black ash or borium
sulphate
14 Details of Cost of Project & Means of Finance

Cost of Project
Particulars Amount in Lacs
Land Owned/Leased
Building & Civil Work Owned/Leased
Plant & Machinery 17.50
Other Misc Assets 1.00
Working Capital Requirement 5.56
Total 24.06
Means of Finance
Particulars Amount
Own Contribution 2.41
Term Loan 16.65
Working capital Loan 5.00
Total 24.06
 1. INTRODUCTION

Alums are hydrated double sulphate salt of aluminum with the general formula X (Al 2SO4)2. 12
H2O, where “X” can be a monovalent cation such as the Potassium or the Ammonium cation.
However, the tripositive ion, aluminum, are also replaced by Chromium and Iron ions. The name
“Alum” is also more generally used for salts with the same chemical formula and structure,
except for the fact that aluminum is replaced by other tri-positive metal ions such as Chromium
(III), example being Chrome Alum which is K Cr(SO4)2·12H2O. Those containing Iron sulphate
are termed as “Ferric Alum” while those that contain Chromium and Aluminum Sulphate are
called “Non-Ferric Alum”. By itself, “Alum” generally refers to Potassium Alum with the
formula K (Al2SO4)2. 12 H2O. Other alums are named after the monovalent cation that is present
in the compound such as the Sodium alum when sodium cation is present, Ammonium alum
when ammonium ions are present, etc.

These Alums have been used due to their properties since the ancient ages. It was used as a
mordant in the Dye Industry during the Islamic Middle ages. Some of the alums occur naturally
while some need to be prepared synthetically. The most important mineral that contains Alum is
“Alunite” which is hydroxylated Aluminum Potassium Sulphate mineral. Other important alums
such as potassium, sodium, and ammonium alums are produced industrially.

These processes mainly involve combining aluminum sulphate and any other monovalent
sulphate cation. Aluminum sulphate is obtained by treating minerals like Alum Schist, Bauxite,
and Cryolite with Sulphuric Acid.
Most of the Alums are soluble in water, they have an Astringent taste, they turns Blue litmus
Red, and form Octahedral shaped crystals. In the molecules of the alum, each metal atom is
surrounded by six water molecules. When they are heated, then they liquefy, and if the heating is
continued, the water of crystallization is driven off, the salts froth and swell and at last only an
amorphous powder remains.

The cheapest grade of Alum is called “Alum Cake”. Potash Alum is also known as “Alum
Alumen”. Though Alum can be recovered from its naturally occurring minerals like Alunite and
Kalinite, but they are not much available in India. So in most of the Indian industries, Alum is
prepared by co-precipitating equivalent proportions of potassium and aluminum sulphate, where
the aluminum sulphate is obtained by treating aluminum ores with concentrated acid.

2. PRODUCT DESCRIPTION

2.1 PRODUCT USES

The different uses of Potash Alum can be given as follows.

 The commercial uses of the alum stem from the hydrolysis of the aluminum ions in the
alum to form aluminum hydroxide which precipitates out in the medium. In the paper
industries, paper is sized by depositing aluminum hydroxide from the alum in the
interstices of the Cellulose fiber.

 It is used in the water treatment industries (almost 65 % of the Alum goes to the water
treatment plants) as the aluminum hydroxide from the alum absorbs the suspended
particles in water and thus used as a flocculating agent. For the same reason it is also
added to soaps and detergents as well.

 In the Clothing industries, it is used as a mordant (binder) to fix the dyes to the cottons
and other types of fabrics, rendering the dye insoluble.

 Additionally, they are used to make Pickles, in the Baking Powder, in Fire Extinguishers,
as Deodorizers, and as Astringents in skincare products and pharmaceutical products.

 Potash Alum can also be used to harden the Concrete and Plaster of Paris.
  It is used in the chemical laboratories for the manufacture of a range of other compounds
and other purposes.

2.2 PRODUCT RAW MATERIAL

The raw materials required for the manufacture of the Alum are:

 Bauxite (with 60% Alumina content and less than 3 % Ferric Oxide or Fe 2O3)
 Potassium Sulphate
 Concentrated Sulphuric Acid (60 % concentration)
 Potassium Sulphate (99 % pure)
 Distilled water
 Flaked Glue
 Black Ash or Barium Sulphide

2.3 MANUFACTURING PROCESS

The manufacturing process of Potash Alum has the following steps:

 The first step consists washing the procured bauxite and the concentration of the ore. This
is done in the Bauxite washing machine to get rid of all the dirt and the impurities.
 The second step involves the crushing of the bauxite ore to 1” size pieces in a Jaw
Crusher. It is crushed further to 105 – 110 mesh size in a Pulverizer.
 In the next step the powdered bauxite with almost 70 – 80 % alumina content and less
than 2 % Ferric Oxide content is charged into a lead-lined M.S. reactor vessel. Sulphuric
acid of 60 % concentration is slowly added and the reactants are thoroughly agitated by
steam. The temperature is kept in between 105 – 110 °C with the help of the steam.

Al2O3 + 3 H2SO4 

steam
1100 C
 Al2 (SO4)3 + 3 H2O
 The bauxite is added in excess to achieve maximum conversion. It takes about 8 – 10
hours for the reaction to complete.
 When the specific gravity of the reaction mixture reaches 60 degree TW, the solution is
supplied to a large settling tank. In the settling tank, Flaked glue is added to enhance the
 coagulation of the suspended particles. Barium Sulphide is added in the form of Black
Ash to reduce Ferric Sulphate, to obtain a clear solution of Aluminum Sulphate.
 After settling, the clear solution of Aluminum Sulphate is filtered in a clean Frame and
Plate Filter Press. The pressed cake is then washed with water and the washings termed
as “Spent Liquor” can be used in the next process.
 An aqueous solution of Potassium Sulphate is now added to the Aluminum Sulphate
solution for the crystallization to take place in large mixing tanks
 The liquid is then drawn from the mixing tank and sent to the concentrator.
 It takes about 8 – 10 hours for the concentration process to take place when a
concentrated alum solution is obtained.
 In the next step, the concentrated liquid is are transferred to Plastic molds where the
liquid further cools and form crystals.
 After the Alum is formed, it is dried properly in Fluidized bed Dryers to get rid of all the
moisture that is present in it.
 Finally, it is sent to the Automatic packaging machines from where required amounts of
the product are filled in the bags and then sent to be stored in storage till they are finally
dispatched.

3. PROJECT COMPONENTS

3.1 Land & Building

The land required for this manufacturing unit will be approx. around 4000 square feet. Land
Purchase and Building Civil Work Cost have not been considered as part of the cost of project. It
is expected that the premises will be on rental and approximate rentals assumed of the same will
be Rs.40000 to Rs.50000 per month.
3.2 Plant & Machinery

 Jaw Crusher machine: The first requirement is that of a Jaw Crusher machine. Single
toggle type size 5” x 9” with Manganese Steel jaws and side plates and heavy duty fly
wheel.

 Mineral Pulverizer/Hammer Mill: Used to finely ground the crushed ores. Made from
mild Steel operated by a electrical motor with a power consumption of 20 – 150 HP,
operated automatically and also Semi-automatically.
 Reaction Digester: The third requirement is a Reaction Digester, Mild Steel, and lead
lined tank. The tank is covered with acid-proof bricks and a mechanical stirrer is fitted at
the top operated with a 5 H.P. motor along with a reduction gear assembly lead bonded
steam coil and discharge valves

 Evaporation tanks: made from Mild steel, lead-bonded, operated automatically,

operating on a three phase AC supply..
 Coal-fired boilers: Smoke tube, multi-tubular vertical working pressure of 100 psi
complete with box, steam generator, water heater, motorised pump and overhead tanks,
standard boiler mounting fitting, fire doors and bars, ash plate, chimney and refractory
etc.

 Water-softening plant: Water-softening plant with inlet water hardness 250 -300 ppm.
Treated water quality is < 3 ppm. Operated manually and treatment technique Ion
Exchanging.

 Acid Pump: Acid Pump, 75 x 40 mm, completed with a 3 HP motor, capacity 40 m 3/hr
at 6m head, speed 1500 rpm, operated mechanically.
 Jacketed and Non-jacketed Mixing vessels: Jacketed and Non-jacketed Mixing vessels
for the preparation of the KOH solution and the Potassium Sulphate solutions
respectively. Made from Stainless Steel and fitted with a Stirrer at the top to ensure
generous mixing of the components.

 Packaging Machine: Jumbo bag packaging machine filling speed is of two types (major
and dribble) working on a single phase AC supply, air pressure 6 Kg/cm 2
6 LICENSE & APPROVALS

Basic registration required in this project:

 MSME Udyam registration

 GST registration

 NOC for fire safety board

 NOC from Pollution Control Board

 Trade License

 Factory License

 Import/Export License

 Choice of a Brand Name of the product and secure the name with Trademark if required .
PROJECTED BALANCE SHEET (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Liabilities
Capital
Opening balance 5.36 8.06 11.16 14.18
Add:- Own Capital 2.41
Add:- Retained Profit 5.96 8.19 10.60 13.53 17.92
Less:- Drawings 3.00 5.50 7.50 10.50 12.50

Closing Balance 5.36 8.06 11.16 14.18 19.61

Term Loan 14.80 11.10 7.40 3.70 -
Working Capital Limit 5.00 5.00 5.00 5.00 5.00
Sundry Creditors 1.58 1.87 2.18 2.52 2.89
Provisions & Other Liability 1.00 1.20 1.44 1.73 1.90
TOTAL : 27.75 27.23 27.18 27.13 29.40
Assets
Fixed Assets ( Gross) 18.50 18.50 18.50 18.50 18.50
Gross Dep. 2.78 5.13 7.14 8.84 10.29
Net Fixed Assets 15.73 13.37 11.36 9.66 8.21

Current Assets
Sundry Debtors 4.09 4.98 5.82 6.72 7.70
Stock in Hand 3.67 4.32 4.99 5.73 6.51
Cash and Bank 1.76 1.56 2.51 2.03 1.48
Loans & Advances /Other Current Assets 2.50 3.00 2.50 3.00 5.50
TOTAL : 27.75 27.23 27.18 27.13 29.40
PROJECTED PROFITABILITY STATEMENT (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Capacity Utilisation % 40% 45% 50% 55% 60%
SALES
Gross Sale
Alum 81.85 99.65 116.31 134.37 153.96

Total 81.85 99.65 116.31 134.37 153.96

COST OF SALES
Raw Material Consumed 47.52 56.14 65.50 75.65 86.66
Electricity Expenses 1.92 2.59 2.88 3.17 3.46
Depreciation 2.78 2.36 2.00 1.70 1.45
Wages & labour 7.20 7.92 8.71 9.58 10.06
Repair & maintenance 0.82 1.99 2.33 2.69 3.08
Packaging 2.46 2.49 2.91 3.36 3.85
Cost of Production 62.69 73.49 84.33 96.15 108.55
Add: Opening Stock - 2.09 2.45 2.81 3.21
Less: Closing Stock 2.09 2.45 2.81 3.21 3.62
Cost of Sales 60.60 73.13 83.97 95.76 108.14
GROSS PROFIT 21.25 26.52 32.34 38.61 45.82
25.96% 26.61% 27.81% 28.74% 29.76%
Salary to Staff 3.36 4.03 4.84 5.81 7.26
Interest on Term Loan 1.64 1.44 1.03 0.63 0.22
Interest on working Capital 0.55 0.55 0.55 0.55 0.55
Rent 5.40 6.48 7.78 9.33 11.20
Selling & Administrative Exp. 4.09 4.98 5.82 6.72 4.62
TOTAL 15.04 17.49 20.01 23.03 23.84
NET PROFIT 6.21 9.03 12.33 15.58 21.97
Taxation 0.25 0.84 1.73 2.05 4.05
PROFIT (After Tax) 5.96 8.19 10.60 13.53 17.92
7.28% 8.22% 9.11% 10.07% 11.64%
PROJECTED CASH FLOW STATEMENT (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
SOURCES OF FUND
Own Margin 2.41
Net Profit 6.21 9.03 12.33 15.58 21.97
Depreciation & Exp. W/off 2.78 2.36 2.00 1.70 1.45
Increase in Cash Credit 5.00 - - - -
Increase In Term Loan 16.65 - - - -
Increase in Creditors 1.58 0.29 0.31 0.34 0.37
Increase in Provisions & Oth labilities 1.00 0.20 0.24 0.29 0.17
-
TOTAL : 35.63 11.88 14.88 17.91 23.96
APPLICATION OF FUND
Increase in Fixed Assets 18.50
Increase in Stock 3.67 0.65 0.67 0.73 0.78
Increase in Debtors 4.09 0.89 0.83 0.90 0.98
Repayment of Term Loan 1.85 3.70 3.70 3.70 3.70
Loans & Advances /Other Current Assets 2.50 0.50 - 0.50 0.50 2.50
Drawings 3.00 5.50 7.50 10.50 12.50
Taxation 0.25 0.84 1.73 2.05 4.05
TOTAL : 33.87 12.08 13.93 18.39 24.51

Opening Cash & Bank Balance - 1.76 1.56 2.51 2.03

Add : Surplus 1.76 -0.20 0.95 -0.48 -0.55
Closing Cash & Bank Balance 1.76 1.56 2.51 2.03 1.48
CALCULATION OF D.S.C.R

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

CASH ACCRUALS 8.73 10.55 12.61 15.23 19.37

Interest on Term Loan 1.64 1.44 1.03 0.63 0.22
Total 10.37 11.99 13.64 15.86 19.59

REPAYMENT
Instalment of Term Loan 1.85 3.70 3.70 3.70 3.70
Interest on Term Loan 1.64 1.44 1.03 0.63 0.22

Total 3.49 5.14 4.73 4.33 3.92

DEBT SERVICE COVERAGE RATIO 2.97 2.33 2.88 3.66 5.00

AVERAGE D.S.C.R. 3.31
 REPAYMENT SCHEDULE OF TERM LOAN
Interest 11.00%
Closing
Year Particulars Amount Addition Total Interest Repayment Balance
1st Opening Balance
1st month - 16.65 16.65 - - 16.65
2nd month 16.65 - 16.65 0.15 - 16.65
3rd month 16.65 - 16.65 0.15 - 16.65
4th month 16.65 - 16.65 0.15 16.65
5th month 16.65 - 16.65 0.15 16.65
6th month 16.65 - 16.65 0.15 16.65
7th month 16.65 - 16.65 0.15 0.31 16.34
8th month 16.34 - 16.34 0.15 0.31 16.03
9th month 16.03 - 16.03 0.15 0.31 15.73
10th month 15.73 - 15.73 0.14 0.31 15.42
11th month 15.42 - 15.42 0.14 0.31 15.11
12th month 15.11 - 15.11 0.14 0.31 14.80
1.64 1.85
2nd Opening Balance
1st month 14.80 - 14.80 0.14 0.31 14.49
2nd month 14.49 - 14.49 0.13 0.31 14.18
3rd month 14.18 - 14.18 0.13 0.31 13.88
4th month 13.88 - 13.88 0.13 0.31 13.57
5th month 13.57 - 13.57 0.12 0.31 13.26
6th month 13.26 - 13.26 0.12 0.31 12.95
7th month 12.95 - 12.95 0.12 0.31 12.64
8th month 12.64 - 12.64 0.12 0.31 12.33
9th month 12.33 - 12.33 0.11 0.31 12.03
10th month 12.03 - 12.03 0.11 0.31 11.72
11th month 11.72 - 11.72 0.11 0.31 11.41
12th month 11.41 - 11.41 0.10 0.31 11.10
1.44 3.70
3rd Opening Balance
1st month 11.10 - 11.10 0.10 0.31 10.79
2nd month 10.79 - 10.79 0.10 0.31 10.48
3rd month 10.48 - 10.48 0.10 0.31 10.18
4th month 10.18 - 10.18 0.09 0.31 9.87
5th month 9.87 - 9.87 0.09 0.31 9.56
6th month 9.56 - 9.56 0.09 0.31 9.25
7th month 9.25 - 9.25 0.08 0.31 8.94
8th month 8.94 - 8.94 0.08 0.31 8.63
9th month 8.63 - 8.63 0.08 0.31 8.33
10th month 8.33 - 8.33 0.08 0.31 8.02
11th month 8.02 - 8.02 0.07 0.31 7.71
12th month 7.71 - 7.71 0.07 0.31 7.40
1.03 3.70
4th Opening Balance
1st month 7.40 - 7.40 0.07 0.31 7.09
2nd month 7.09 - 7.09 0.07 0.31 6.78
3rd month 6.78 - 6.78 0.06 0.31 6.47
4th month 6.47 - 6.47 0.06 0.31 6.17
5th month 6.17 - 6.17 0.06 0.31 5.86
6th month 5.86 - 5.86 0.05 0.31 5.55
7th month 5.55 - 5.55 0.05 0.31 5.24
8th month 5.24 - 5.24 0.05 0.31 4.93
9th month 4.93 - 4.93 0.05 0.31 4.62
10th month 4.62 - 4.62 0.04 0.31 4.32
11th month 4.32 - 4.32 0.04 0.31 4.01
12th month 4.01 - 4.01 0.04 0.31 3.70
0.63 3.70
5th Opening Balance
1st month 3.70 - 3.70 0.03 0.31 3.39
2nd month 3.39 - 3.39 0.03 0.31 3.08
3rd month 3.08 - 3.08 0.03 0.31 2.77
4th month 2.77 - 2.77 0.03 0.31 2.47
5th month 2.47 - 2.47 0.02 0.31 2.16
6th month 2.16 - 2.16 0.02 0.31 1.85
7th month 1.85 - 1.85 0.02 0.31 1.54
8th month 1.54 - 1.54 0.01 0.31 1.23
9th month 1.23 - 1.23 0.01 0.31 0.92
10th month 0.92 - 0.92 0.01 0.31 0.62
11th month 0.62 - 0.62 0.01 0.31 0.31
12th month 0.31 - 0.31 0.00 0.31 -
0.22 3.70
DOOR TO DOOR 60 MONTHS
MORATORIUM PERIOD 6 MONTHS
REPAYMENT PERIOD 54 MONTHS
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
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considering specific requirement of the project, capacity and type of plant and
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