ALUMINIUM TOWER BOLTS AND HINGES

A. INTRODUCTION

Aluminium extruded products are increasingly used in building construction, architecture and
furniture making. Aluminium is a versatile material which has properties of high strength, light
weight, high electric and heat conductivity. Every household and offices require hinges and
tower bolts for windows are doors and these items made of aluminium are strong, elegant,
durable and non-rustic in nature. The consumption of aluminium tower bolts and hinges is
increasing due construction of new houses and other buildings. Considering the growth in this
area there is a good scope for new Tower bolts and Hinges manufacturing units to be set up.

B. PRODUCT USES AND SPECIFICATIONS

A Bolt is a metal fastening for door or window consisting of a sliding pin or rod and staple into
which it fits in. They are used in doors and also in railway furniture and doors.

A hinge is a joint arrangement in a door or window on which the lid, door or gate turns or
swings. The tower Bolts are available in most popular sizes of 3”,4”,6”,and 8”.The Hinges are
available in most popular sizes of 3”and 4”.Bureau of Indian standard has prescribed the IS: 204
and IS:205 or Tower Bolts and hinges

C. MARKET POTENTIAL

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 50 lakhs houses every year. This allows a big demand for
Building materials like aluminium tower bolts and hinges.
DEMAND DRIVERS IN CONSTRUCTION SECTOR
India has been showing good progress in overall development in all sectors for the last several
years. India has several growth factors to its credit such as strong democratic fundamentals,
independent judiciary and legal system, credible banking system, availability of a large pool of
educated and technically qualified labour etc. India is currently experiencing unprecedented
economic growth. The country had over 8% growth on an average for the last three years. The
eleventh plan envisages a growth of 10%.

The construction sector has been showing a growth of 15 to 20 percent for the last three years.
The construction contributes about 8 to 10% of the GDP.
The main reasons which can be attributed to the phenomenal growth of construction sector are
the following. These are broadly termed as Driving Forces or Demand Drivers of construction
sector in India.

- Housing shortage, growing urbanisation, growing population and increased level of income,
- Increased requirement of information technology space
- Increased requirements of other commercial and industrial space

- Increased availability of housing loans

- Allowing foreign direct investment in housing and real estate sector

- Increased investment in shopping malls

- Increased space requirement and investment in hotel sector

- Increased space requirement and investment in health care and hospitals

- Corpoaritisation of real estate and construction and increased flow of funds

- Permitting large number of special economic zones.
Construction sector is broadly divided into three segments namely, Infrastructure, industrial
activities and real estate. Infrastructure development includes roads, ports, power, railways, and
urban infrastructure. Industrial activity consists of construction of plants for cement, fertilizer
refining and industrial structures, while real estate consists of residential and commercial
construction.

Aluminium is widely consumed in all sectors of the construction industry.

CONSTRUCTION INDUSTRY TARGETS

Domestic Construction enterprise is poised to grow @ of 15% per annum from about 10% now
to touch $ 120 billion by 2012 from its current size of over $
70 billion and the manpower requirements for the industry will be over 90 million by the
projected period, according to the Associated Chambers of Commerce and Industry of India
(ASSOCHAM) estimates.
D. TECHNICAL ASPECTS

1. Installed Capacity
The installed capacity of the proposed unit is manufacturing of 12000 Dozens of Tower Bolts
and 12000 dozens of Hinges per annum .This is based on 300 days working per annum, 8 hours
per day.

2. Plant and Machinery

The following machineries are required for production.

Machine name Quantity Value

Nos (Rs.lakhs)
Vertical Milling machine100 x 225 mm 1 1.25

Drilling machine ½” 1 0.18

Pillar drilling machine 32 mm 1 0.20
Universal Milling machine 1 1.85
Fly Press 1 0.12
Rivetting machine 1 0.90
Bench grinder 1 0.20
Lathe Screw cutting 1 0.95
Weighing Machine 1 0.35
Total 6.00
3. Manufacturing Process
The manufacturing of tower bolts involves the following sequence of
operations.

Cut the extruded sections into required length I

Stradle mill slots for axial movement of knob I
Mill cross slots fro up& down movements of rod I
Drill and countersink holes for wood screw I
Drill cavity hole for loading I
Drill hole on rod I
Fit rod inside extruded section I
Rivet knob on rod and stab I
Remove burs by files, emery paper/wheels finish fittings I
Polish by buffing I
Stamp makers brand I
Anodising (Job work) I
Packing and delivery

The Manufacturing of Hinges involves the following sequence of operations

Cut the extruded sections into required length and flaps I

Milling slots at taper on a fixture on plain milling I
Drilling holes for hinges /pin of the butt of flaps I
Drilling wood screw holes I
Cut the steel wire to proper length of hinge pin and rivet by stabbing both top and bottom face
Finish fitting, de-burring and buffing I
Stamp maker’s stamp I
Anodising (Job work) I
Packing and delivery

4. Raw Material
The Raw materials required for manufacturing Aluminium bolts and hinges are aluminium rods
and aluminium plates. These are available dealers. The anodizing can be done on job work
basis.
5. Land & Building

A rented place with 1500 sqft. area is required. The monthly rent is estimated at Rs.15000 and
also an advance of Rs.150000.

6. Utilities
Power:
The total power requirement of the unit will be 15 HP

Water:
Water is required only for human consumption.
Man power:

Category No Monthly Total

s salary Salary
Manager 1 8000 8000
Skilled 2 6000 12000
Unskilled 2 4000 8000
Assistants 2 5000 10000
Security 2 4000 8000
Total 46000
Add 20%benefits 9200
Total 55200
Annually Rs.6.62 lakhs

7. Implementation Schedule
If financing arrangement is made available the project can be implemented within three months
period.
8. ASSUMPTIONS

Installed capacity per annum Tower Bolts - 12000 dozens

Hinges - 12000 dozens
Capacity utilization-Year -1 60%
Year -2 70%
Year -3 80%
Selling price per unit Tower Bolt Rs.260.00 per
Dozen
Hinges Rs.210.00 per Dozen

Material cost at Qty (including Rate Value

100% wastage 3%) (Rs.lakhs)
Almn-rods for Bolts 14.40 Mt
Almn-rods for 7.20 Mt
Hinges
22.25 Mt Rs.99000/Mt 22.03
Steel wire 1200 kgs Rs 35/kg 0.42
Anodising charges 230400sq.inch Re.0.30/sq.inc h 6.91
- Bolts
- Hinges 115200sq.inch Re.0.30/sq. 3.46
inch
Total 32.82

Consumables and Packing per annum-at 100% Rs.1.44 lakhs

(Rs.lakhs)
Power and Fuel-100% (Rs.lakhs) Rs.1.42 lakhs
Wages & salaries-100% (Rs.lakhs) Rs.6.62 lakhs
Repairs & Maintenance per month Rs.2000/-
Depreciation WDV method – 15%
General & administration Expenses per Rs.15000/-
month
Selling expenses 3% on Sales
Interest on term loan and Working capital 13% p.a
finance
Income tax provision 34% on profit

LIST OF MACHINERY SUPPLIERS

1. Orient Machine Tools
New No.269(old No.130) Linghi Chetty Street
Chennai-600 001

2. Quality Machine Tools

New 238 Linghi Chetty Strret
Chennai 600 001.

3. Gujrat Machine Tools

New 279, Linghi Chetty Street
Chennai 600 001

4. Premier Machine Tools New

103 Armenian Street Chennai
600 001

5. Machine Centre
New 214 linghi chetty Street
Chennai 600 001

LIST OF RAW MATERIAL SUPPLIERS

1. Premier Metal engineering Corporation JVL

Towers
117.Nelson Manikem Road
Chennai-600 029.

2. Southern Aluminium Company

New 22.Mooker Nallamuthu Street Chennai-600 001.

3. Zenith Traders
New.62 Nynuyappa naicken street
Chennai-600 003.

4. Tamilnadu Aluminium Company

44.basin Bridge Road
Mint Chennai-25.
Anodisers

1. Akshaya Enterprises
9.Ganesh Nagar
G.K.Industrial Estate
Chennai - 600 116

2. Sree Rajalakshmi Industries New

163 Sydenhams Road Chennai-
600 003

3. Industrial Anodisers
B-8-1 Guindy Industrial estate
Chennai-600 032

1. COST OF PROJECT
[Rs.lakhs]

Land & Building (Advance) 1.50

Plant & Machinery 6.00
Other Misc. assets 0.50
Pre-Operative expenses 1.00
Margin for WC 1.12
10.12

2. MEANS OF FINANCE

Capital 5.12
Term Loan 5.00
10.12

3. COST OF PRODUCTION & STATEMENTS

PROFITABILITY Rs.lakhs
Years 1 2 3
Installed Capacity (Dozens)
Tower Bolts 12000 12000 12000
Hinges 12000 12000 12000
Utilisation 60% 70% 80%
Production/Sales (Dozens)
Tower Bolts 7200 8400 9600
Hinges 7200 8400 9600

Selling Price/Dozen (in Rupee)

Tower Bolts Rs.260 per dozen
Hinges Rs.210 per dozen

Sales Value (Rs.lakhs)

Tower Bolts 18.72 21.84 24.96
Hinges 15.12 17.64 20.16
Total sales value 33.84 39.48 45.12

Raw Materials 19.69 22.97 26.26

Consumables 0.86 1.01 1.15
Power 0.85 0.99 1.14
Wages & Salaries 6.62 6.95 7.30
Repairs & Maintenance 0.24 0.25 0.26
Depreciation 0.90 0.77 0.65
Cost of Production 29.16 32.94 36.76

Admin, & General expenses 1.80 1.89 1.98

Selling expenses 1.02 1.18 1.35
Interest on Term Loan 0.65 0.57 0.41
Interest on Working Capital 0.35 0.35 0.35
Total 32.98 36.93 40.85

Profit before Tax 0.86 2.56 4.27

Provision for tax 0.29 0.87 1.45
Profit after Tax 0.57 1.69 2.82

Add: Depreciation 0.90 0.77 0.65

Cash Accruals 1.47 2.45 3.47

4. WORKING CAPITAL:

Consumption Months Values % Margin Bank

Amount Finance
Raw Materials 0.75 1.23 25% 0.31 0.92
Consumables 1.00 0.07 25% 0.31 0.05
Finished goods 0.25 0.61 25% 0.15 0.46
Debtors 0.50 1.41 10% 0.14 1.27
Expenses 1.00 0.50 100% 0.50 0.00
3.82 1.12 2.70

4. PROFITABILITY RATIOS BASED ON 80% UTILISATION

Profit after Tax 2.82

6%
Sales 45.12
Profit before Interest and Tax 5.03 Total
39%
Investment 12.82
Profit after Tax 2.82
55%
Promoters' Capital 5.12

5. BREAK EVEN LEVEL

Fixed Cost (FC):

[Rs.lakhs]
Wages & Salaries 7.30
Repairs & Maintenance 0.26
Depreciation 0.65
Admin. & General expenses 1.98
Interest on TL 0.41
10.60

Profit Before Tax (P) 4.27

FC x 100 10.60 80
BELL= x x 100
FC +P 14.87 100

57% of installed capacity