CONCRETE PRODUCTS

(Well Rings)

INTRODUCTION
Some of the major concrete products include concrete well rings. Concrete posts are used mainly
for fencing purpose. A number of posts are required at regular intervals along barbed wire
fencing. Some posts also find application as street light electric posts. Kitchen sinks are an
integral part of most urban homes. In view of its convenience, sinks are fast entering rural homes
also. Cement well rings, as the name implies, are required for open wells. Apart from forming the
firm side walls they also facilitate movement into the well for cleaning purpose.

MARKET POTENTIAL
The demand for concrete posts would be largely linked with the magnitude of barbed wire fencing
and rural electrification posts. Barbed fencing is carried out by the Home Department (Border
Division), armed Forces, Forest Department and PWD. Generally, the spacing between two posts
is about 3 to 3 ½ metre, each post being about 100 mm 100mm, in cross section with height
varying from 1.5 to 3 metre. Thus in 1 Km of fencing about 300 posts would be required.
Considering the vast borders of the north-eastern region and the massive programme being
undertaken to fence the borders as well as regular requirements in forest areas it may be
expected that the requirement of fencing would be about 300 to 400 Km per year. the
corresponding demand for cement posts would be in the range of 90,000 to 1,20,000 per year.
Besides, the demand for posts for rural electrification may be around 75,000 to 1,00,000 per year.
Thus, the demand potential for cement posts in the north- eastern region could be of the order of
1.7 lakhs per year. There are a number of tiny units (about 20 to 30) supplying cement posts.
Considering that each unit produces about 5000 posts per year on an average, the available
market opportunity for new tiny units is placed at about 70,000 posts per year.

Kitchen sinks are being made by 2 to 43 units. It is estimated that in order to meet the housing
shortage, about 80,000 dwellings will have to be constructed per year in the urban areas and
about 8 lakhs dwellings per year in rural areas. Considering that majority of urban homes would
generally opt. for ceramic sinks, the vast rural market is available for concrete sinks.
Conservatively assuming that about 6 lakhs rural dwellings and 60,000 urban dwellings would be
constructed per year and assuming that 10% of these dwellings and the private construction and
replacement demand require RCC sinks, there is demand potential for about 1,60,000 sinks per
year. Considering a typical unit to produce 3000 sinks per year there is scope for about 50 such
units. However, there may be enough scope initially for setting up 15 units having a product-mix
as given in the next paragraph.

TARGET PRODUCTION
Now-a-days, tube-wells have gained prominence over conventional wells. The demand for
cement well rings would therefore be in specific areas where tube-wells are not possible /popular,
and hence a small quantity of cement will rings is included in the product-mix. The main products
would be concrete posts and kitchen sinks. About 300 numbers of well rings are also suggested.
The production basis of a typical unit would be as follows:

Sl. Particulars No. of Posts No. of Sinks No. of Rings

No.
1. Daily production 10 5 1
2. Working Days/year 300 300 300
3. Annual Production 3000 1500 300

The products would be manufactured in the following typical sizes.

Concrete Posts 100m 100m 1,500 mm

Kitchen Sinks 600mm long 300 mm wide 450 mm deep

Well rings 2m dia, 1 m ht., 50 mm thickness.

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RAW MATERIALS
The major raw materials required are cement, sand, stone dust, stone chips and iron strips.
Cement is manufactured in the north-eastern region in Assam, Meghalaya and Manipur. Bulk of
the cement required, however, still comes from outside the region. Cement may be available from
local dealers or directly from nearby plants located at Bokajan, Mawmlucherra. Sand and stone
chips may be procured locally and iron strips from the market.

PROCESS
The main process of steps involved are:

i) Fabrication of suitable moulds.

ii) Preparation of concrete mix by mixing water in cement, sand and stone chips in suitable
proportion.

iii) Pouring of cement concrete into the moulds and stirring to avoid gaps or honey comb.
Suitable reinforcement is to be provided while pouring cement concrete mixture for
increasing the durability and strength of the product.
iv) Curing of the product for 4/5 days. During this period, water is to be poured. After
opening from the moulds, water is to be sprinkled for about 6/7 days.

MACHINERY
The process is essentially manual and no major production equipment is required. The following
accessories would suffice for the production:

1. Mould for posts (to be made from Steel plate)

2. Buckets, Shovels &Tools.

INFRASTRUCTURE
The main infrastructural facilities required are:

Land … 2000 Sq.ft.

Shed … 600 Sq. ft.
Power 1 KW
Water 2000 Litre/day

LOCATIONS
The suggested locations are:

Assam : Bokajan, Nagaon,

Silchar, Goalpara

Meghalaya : Mawmluhcherra, Jowai

Manipur : Hundung

Sikkim : Dzongri, Brang

TOTAL CAPITAL REQUIREMENT

The total capital requirement, including fixed capital and working capital, is estimated at Rs.3.84
lakhs as follows. Of this, the project cost comprising fixed capital and margin money on working
capital is Rs. 2.05 lakhs.
A. Fixed Capital: (Rs. in lakh)
Land & Building On lease
Plant & Machinery 0.80
Miscellaneous fixed assets 0.20
Preliminary and pre-operative expenses 0.10
Total (A) 1.10

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 B. Working Capital:
Raw materials 1 month 0.42
Stock of Finished goods 10 Days 0.32
Working expenses 1 month 0.35
Receivables 1½ month 1.65
____
Total (B) 2.74
====
Total (A) + (B) 3.84
====

Note: Working capital may be finance as :

Bank Finance … Rs. 1.79 lakh
Margin Money … Rs. 0.95 lakh
___________
Rs. 2.74 lakh
===========

MEANS OF FINANCE

Promoter’s Contribution (35%) .. Rs. 0.72 lakhs

Term Loan(65%) … Rs. 1.33 lakhs

___________
Rs. 2.05 lakhs
===========

OPERATING EXPENSES

The annual operating expenses are estimated at Rs.11.02 lakhs as given below:

Raw materials –
Cement 53 tonnes @ Rs. 5200/tonne 2.76
Sand 61 Cu.m. @ Rs.420/Cu.m. 0.26
Stone chips 89 Cu.m. @ Rs.700/Cu.m. 0.62
Iron Strips 5 tonne @ Rs.2800-/tonne 1.42
Utilities 0.20
Wages &Salaries 4.00
Rent 0.36
Other overheads 0.25
Selling expenses @ 5% on annual sales 0.66
Interest on term loan @12% 0.16
Interest on Bank Finance @ 15% for W.C. 0.27
Depreciation @ 10% on M/c. 0.08
_____
11.02
=====

SALES REALISATION

The annual sales realization is estimated at Rs. 13.20 lakhs as under

Sl. Products Quantity Nos. Price Sales

No. Rs./Unit Rs.lakh/Yr.
1. Concrete Posts 3000 150 4.50
2. Kitchen sinks 1500 300 4.50
3. Well Rings 300 1400 4.20
Total: 13.20

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PROFITABILITY

Based on the sales realization and the operating expenses, the profit at annual production
envisaged would be Rs. 2.18 lakhs per year. This works out to a return on investment of 57%.
The plant would break-even at about 50% of the targeted annual production.

HIGHLIGHTS

The major highlights of the project are as follows:

Total Capital Requirement Rs. 3.84 lakhs

Promoter’s contribution Rs. 0.72 lakhs
Annual Sales realization Rs. 13.20 lakhs
Annual operating expenses Rs. 11.02 lakhs
Annual profit (pre-tax) Rs. 2.18lakhs
Pre-tax return on sales 17%
Break-Even Point 50%
No. of persons employed 15

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