PROJECT REPORT OF M/S XYZ GRANITES

GRANITE PROCESSING PROJECT

INTRODUCTION

M/s XYZ Granites, a partnership firm is started with the main objective of manufacturing and
processing of granite slabs for both domestic and export market.

The promoters of the firm are:

1. Mr. XYZ – Managing Partner
2. Mrs. XYZ – Partner
3. Mr. XYZ – Partner
4. Mr. XYZ – Partner

PRODUCT MARKET POTENTIAL

Granite, well known building and construction stone with a high abrasion hardness, is very resistant to
weathering and extremely resistant to chemical attach. The granite slabs/monuments possess features
such as ever shine, glittering, durability, consistency in dimensions and quality, excellent natural
colour, reduced cost, as well as aesthetic and mechanical characteristics of the natural stones as
granite is. The advantages of a typically high production creates demand for granite products to be
used for panelling of walls, interior and exterior decoration, bath rooms, kitchen platforms, steps etc.

Granite can be used in slab form or in tile form, or in monuments form. It is now proved and
consolidated that beyond the decorative features, the granite products with thin thickness, guarantees
stability and resistance for long periods of time if traditionally installed for building interiors.

The geometrical features of the product, such as the ground surface, the high level polishing, the
peripheral squareness/finishing with the chamfering of the edges, are fundamental requisites for
successful utilization.

The demand for granite stones has increased steadily and during the last 20 years of the world
production and demand rose spectacularly. The industry experienced tremendous expansion on all
fronts. Instead of raw granite blocks and semi-finished products for monuments, building slabs, panels
and tiles are being utilised at present for a variety of purposes. The number of industrial units
generated multiplied by more than 150 times.
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It should be clearly noted that India is not the only country engaged in granite industry. At present 39
countries the world over are in granite industry. Of those nine countries can be said to be the leaders
having captures sizeable chunk of the market. India occupies the seventh position in the list and
Indian granites are much sought after.

There are 9 countries which can be said to be leading in importing granites. Several countries import
granite and re-export them after processing. Indian granite in its form is being imported by several
countries of which Japan, Italy, Germany and nine others are leaders. Indian finished granite as
building slabs and monuments are also imported by different countries the world over. Of them UK,
USA, Holland, Japan and five others account for a major share.

In this modern world the usage of granite has increased in one place or the other like wall panelling,
flooring, kitchen tops, work tops, sit out, besides tomb stones and kerb stones. Granite is not only
used in construction industry but is also used in other activities. Even during the construction of
Alexander Dock at Bombay (now Mumbai) the strength of the south Indian granite was proved to be
better than Danish and Norwegian granite which they were using earlier.

As per the unofficial study conducted, the annual international requirements of polished granite stone
for the building industry alone is 140 million cubic meters. The monumental industry in world require
about 15.5 million cubic meters of granite for various purposes. As per latest statistics, the granite
exporting countries, including India, put together meet only 102 million cubic meters for the building
industry and 7 million cubic meters for the monumental industry. Hence there is a wide gap between
supply and demand.

It is evident that with concentrated efforts India’s position among leading exporters can be further
improved by setting up new cutting and polishing units which can produce material that stand the test
of International Standards.

However, in order to boost-up the foreign exchange, the internal consumption for other purposes
cannot be neglected. Due to change in lifestyle the needs have enlarged the scope for use in granite.

It is a welcome feature that indigenous demand for granite in India has been created few years ago
and has been steadily growing. The granites are being more sought after for the construction of
memorials to national leaders, luxury hotels, public building and shopping complexes in metropolitan
cities. Granite tiles are being increasingly used for flooring purposes by the well-to-do and as table

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tops, ledges, bathroom, decorations etc. even by middle class Indian. Yet, it looks that there is
tremendous scope for increasing the domestic market. Efforts in this direction are being made by the
Association of Granite Manufacturers to further quicken the growth of domestic land.

PRODUCT

Granite are rocks which are mined from earth. Because of their excellent resistance to weathering and
good hardness (rendering them almost unbreakable in normal circumstances), these are considered
very useful for ornamental purposes in building construction, table tops and for making tomb stones.
Depending on the requirements, rough granite blocks are sawed to the right thickness and polished to
become processed granite slab monuments.

MANUFACTURING PROCESS

The manufacturing process for cutting and polishing of granite blocks is simple. The granite blocks
extracted and obtained from quarries are first marked and then cut using circular saw. The sliced
granites are then washed and polished on both sides using polishing machines. After this the polished
slabs are marked to required sizes and then sides are cut using edge cutting machine. The sides are
then polished if necessary using smaller size polishing machines. After visual inspection and washing,
slabs are packed using polythene bags/thermo Cole and dispatched in wooden crates.

LOCATION AND SITE

Promoters will buy a one acre property at KIADB Industrial Area in Harohalli, Kanakpura Road to
setup the proposed granite slabs factory.

The main parameters that are generally looked into for locating an industrial project are raw material
proximity, availability of power, skilled personnel, nearness of the market, good connection to the site
by means of transport and existing industrial infrastructure.

The nearness of the quarries will provide the following advantages:

a. Reduced cost of freight
b. Easy mobility, hence ease in purchase of raw material
c. Easy supervision and control over quarries.

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The firm will be able to solicit the prospective buyers and improve overall the sales realization.
Besides the domestic market the firm will also engage in Export Sales of the products in future.

BUILDING AND CIVIL WORKS

The promoters have projected the cost of building and other civil works at Rs.44.70 lacs. The building
consisting of factory shed of size 2400 sft. Area approximately and polishing shed of size 1400 sft.
Besides labour rooms, stock yard, office room, electrical room, security room, besides foundation of
machines, water tanks etc.

PLANT AND MACHINERY

Total investment proposed to invest in machineries, tools and accessories is Rs.72.30 lacs as per the
list of machineries enclosed. The project involves 1 indigenous vertical cutting machines and 02
Imported multi-blade machines of 2.50 mtr dia, one gantry crane with 40 ton capacity and span of 65
feet, 4 polishing machines, besides compressor, transformer, pumps, tools and tackles etc.
“Indigenous MAKE” machineries are being purchased after fixing the price suitably.

MARKETING

The promoters of the firm have gained experience in the granite business. The promoter also have a
lot of family friends and relatives in the granite industry enabling them to sell their production easily.
Since the demand for granite is on the rise due to steep rise in construction activities, the promoters
have realized the ever growing potential in the industry for granite slabs. So to take advantage of the
rise in demand, they have decided to start a new unit at Harohalli. The promoters by maintaining good
quality for the product and competitive prices are confident of attracting customers.

In spite of competition, the demand for granite slabs is vast, as surveyed by the promoters. So the
promoters are confident of marketing the products without much problem.

PLANT CAPACITY & MACHINE UTILIZATION

With proposed setup of 3 cutting machines and matching polishing machines, the unit can produce
4,80,000 sft. of granite slabs per annum (working for 8 hours per shift for 3 shifts per day with 300
days in a year). Production achievable on an average is estimated at 80% to 95% per annum.
FINANCING PATTERN

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Total investment of Rs.192.00 lacs will be required for this project. Of this Rs.128.00 lacs would be
mobilized by way of term loan. Promoters’ contribution will be Rs.64.00 lacs. Promoters will further
invest a working capital margin of Rs. 8.00 lacs after completion of construction activities.

So, term loan of Rs.128.00 lacs is sought for to complete the project against the security of the land,
proposed buildings, machineries, and flat worth Rs.80.00 lakhs as secondary collateral all worth
Rs.182.00 lacs. Term loan will be repaid within 7 years and with 9 months holiday period initially as
per the term loan repayment chart with 12.5% p.a. rate of interest. Besides above the promoters are
offering their own flat valued at Rs.80.00 lacs as secondary collateral.

As per the projections enclosed the project is viable in all angles and a profitable one. Promoters will
also offer their personal guarantee to the term loan besides collateral security.

UTILITIES

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POWER

The unit requires to the extent of 200 HP including lighting load. The same will be available from
BESCOM.

WATER

Water requirements for the process and other purposes has been estimated at 25000 litres of fresh
water. Water required for this project is available at site area itself. Bore well also will be installed
after getting necessary permissions.

EFFLUENT DISPOSAL

No gaseous effluents will be generated from the process. However water based slurry will be
generated in the cutting and polishing sections. This slurry will be suitable sedimented and the water
will be used for recycling.

MAN POWER REQUIREMENT

Staff
Supervisor 1
Computer Assistant 1
Accountant 1

Operators
B/Saw 2
Polishers 5
Others 8

Security
Guard 1

The direct employment potential of the project is estimated at 19 persons. Since the area is surrounded
by industrial units, labours are available and salary will be based on the prevalent conditions of the
industrial area.

RAW MATERIAL

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The only raw material required for this project is granite rough blocks.

In trade granite includes similar rocks namely diorite, gabbro, dolerite, scheist and gneies, andesite,
diabase from some localities especially. Tamil Nadu, Karnataka and bordering Andhra Pradesh is
termed as black granite in the export trade and is highly priced.

Karnataka is known as the store house of large and exclusive varieties of rocks. Over 100 varieties of
rocks are known to occur in Karnataka. The most known and abundant varieties are granite, gnesis,
migmatite and dykes. The rough estimation of popular varieties of granite as per colour are as follows:
Grey Granite – 688 lac tonnes
Pink Granite – 1535 lac tonnes
Black Granite – 140 lac tonnes

Apart from raw granite the firm will require consumables such as diamond circular saw blade,
grinding heads, abrasives, polishing powder / bricks which are available in India. The firm has
proposed to make arrangement for regular supply of these items from the market.

FLOW PROCESS CHART

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 Sl.No. Description

1 Raw material arrive from quarries

2 Unloaded at yard

3 Blocks are transported to required position

4 Blocks are washed

5 Blocks are marked to specification

6 Blocks transported to cutting section

7 Blocks cut/sawed to required slab sizes

8 Slabs transferred to washing section

9 Slabs are washed

10 Washed slabs transported to polishing section

11 Slabs are polished

12 Polished slabs transported to grinding section

13 Surface grinding of slabs carried out

14 Slabs are inspected for quality of finish

15 Slabs are transported after inspection to finished goods yard

16 Slabs are checked and dispatched

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