WOOD SCREWS

A. INTRODUCTION
Wood screws are used in furniture industry, packing cases, Electrical wiring, railway
carriages. In building construction work they are commonly used. The sizes of wood
screw varies between smaller to bigger sizes. Even though there are several
manufacturers of wooden screws the market is growing due increased house
construction and requirement from new houses.

B. PRODUCT USES & SPECIFICATION

Bureau of Indian Standards has laid down specifications for wood screws in IS-451

C. MARKET POTENTIAL
The product to be manufactured belong to the engineering sector and the general
engineering sector has been growing well all these years at faster rate. There is
continuous demand for this product as it is consumed in all engineering workshops.

A strong engineering base exists in the state of Tamilnadu involving products ranging
from automobiles, bicycles, castings and forgings, to textile machines, electrical and
non-electrical machinery, pumps and transportation equipment. Engineering ancillary
industries are concentrated in Chennai, Coimbatore, Salem, etc. The exports of
engineering products from Tamil Nadu is around Rs.14.50 billion (US $ 320 million) of
which automobile ancillaries along contribute around US $ 150 million. It is an
established fact that the automobile industry in the state accounts for nearly 50% of the
All India export market. The strong engineering base consists of a network of nearly
3,000 units, employing a skilled workforce of more than 2.5 lakh, making high quality
inputs such as castings and forgings and a wide variety of ancillary products. Intensive
efforts are being made to boost further development of this industry.

1
D. TECHNICAL ASPECTS
1. Installed capacity
The installed capacity is 43200 screws per day of 2 shifts, size ranging from 1/8” to
3/16” dia and length from ¼” to 1½”, average weight is 3 gms. Per day production of
screws is 129.6 kgs, this works out to 38.88 MT per annum of 300 days working.

2. Plant and Machinery

The machinery list is given below:
Description Qty. Value
(Nos.) (Rs.lakhs)
Double stroke heading M/c. 1 1.60
High speed screw head slotting M/c. 1 0.80
Thread cutting M/c. 1 1.00
Head shaving M/c. 1 1.00
Wire stand 1 0.10
Nickel plating 1 1.00
Misc. Tools 0.25
Other equipment 0.25
Total 6.00

3. Manufacturing Process
The manufacturing process of wood screw is as follows:
The wire is fed to an automatic heading machine where the head is formed and parting
off done according to desired length
↓
The slotting on head is made on slotting machine
↓
The threading is done on thread cutting machine
↓
Packing and Despatch

4. Raw Materials
Hard Bright MS wire is used to manufacturing the wood screws, Nickel is used coating.

5. Land & Building

A Built up area of 500 sqft. is required this may be taken on rental basis Rs.2500 per
month. Advance Rs.25000.

2
6. Utilities
Power:
A power load of 6 HP is sufficient for the operation of the M/c.

Water:
Water is requirement human consumption only.

Man Power:
Category Nos. Monthly Total
Salary Salary p.m.
Supervisor 1 5000 5000
Skilled workers 2 3000 6000
Helpers 4 2000 8000
Assistants 2 3000 6000
Security 4 2000 8000
--------
33000
Add: 20% benefits 6600
--------
39600
--------
Total salary per annum (Rs.lakhs) Rs.4.75 lakhs

7. Implementation Schedule
As the machines and materials are available indigenously, the project can be
implemented within 3 months period if financial arrangements are made.

8. ASSUMPTION
Installed Capacity per annum Wood Screws – 38.88 MT p.a.
Capacity utilization - Year 1 60%
- Year 2 70%
- Year 3 80%
Selling price Wood Screws – Rs.75,000/MT

Raw Material Qty (MT) Rate/MT Value

(Rs.lakhs)
MS Wire (including 5% wastage) 40.82 24000 9.80
Nickel 40.82 5000 2.04
Total 11.84

3
Consumables cost p.a. at 100% (Rs.lakhs) Rs.1.20 lakhs
Power & Fuel at 100% (Rs.lakhs) Rs.0.97 lakh
Wages & Salaries (Rs.lakhs) Rs.4.75 lakhs
Repairs & Maintenance per month Rs.2,000 p.m
Depreciation Straight Line method
Administrative & General expenses p.m. Rs.5,000
Selling expenses 3%
Interest on Term loan and Working capital 14%
finance

4
LIST OF MACHINERY SUPPLIERS

1. A.M.I.Machine Tools
20. Ambalal Doshi Marg ,(Hammam Street)
Fort
Mumbai-400 023

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. Sai Steel Centre
28-A, Mooker Nallamuthu Street
Chennai-600 001

2. Mahavir Indusrial Corporation

New 273, Linghi Chetty Street
Chennai-600 001

3. Bhagawandas Metals ltd

No.54 Sembudoss street
Chennai-600 001

4. Southern Iron and Steel company ltd

No.7, Wallace garden Second Street
Chennai-600 006

5. P.K.Vaduvammal
No.97, Rasappa Chetty Street
Chennai-600 003

5
1. COST OF PROJECT
[Rs.lakhs]

Land & Building (Advance) 0.25

Plant & Machinery 6.00
Other Misc. assets 0.50
Pre-Operative expenses 0.50
Margin for WC 0.77
8.02

2. MEANS OF FINANCE

Capital 3.52
Term Loan 4.50
8.02

6
3. COST OF PRODUCTION & PROFITABILITY STATEMENTS

Years 1 2 3

Installed Capacity (MT) 38.88 38.88 38.88

Utilisation 60% 70% 80%
Production/Sales (MT) 23.33 27.22 31.10

Selling Price/MT (in Rupee) 75,000 per MT

Sales Value (Rs.lakhs) 17.50 20.42 23.33

Raw Materials 7.10 8.29 9.47

Consumables 0.72 0.84 0.96
Power 0.58 0.68 0.78
Wages & Salaries 4.75 4.99 5.24
Repairs & Maintenance 0.24 0.25 0.26
Depreciation 0.70 0.70 0.70
Cost of Production 14.09 15.75 17.41

Admin, & General expenses 0.60 0.63 0.66

Selling expenses 0.53 0.61 0.70
Interest on Term Loan 0.63 0.55 0.39
Interest on Working Capital 0.18 0.18 0.18
Total 16.03 17.72 19.34

Profit Before Tax 1.47 2.70 3.99

Provision for tax 0.53 0.97 1.44
Profit After Tax 0.94 1.73 2.55

Add: Depreciation 0.70 0.70 0.70

Cash Accruals 1.64 2.43 3.25

7
4. WORKING CAPITAL:

Months Values % Margin Bank

Consumption Amount Finance

Raw Materials 0.75 0.44 25% 0.11 0.33

Consumables 1.00 0.06 25% 0.02 0.04
Finished goods 0.25 0.29 25% 0.07 0.22
Debtors 0.50 0.73 10% 0.07 0.66
Expenses 1.00 0.50 100% 0.50 0.00
2.02 0.77 1.25

5. PROFITABILITY RATIOS BASED ON 80% UTILISATION

Profit after Tax 2.55

11%
Sales 23.33

Profit before Interest and Tax 4.56

49%
Total Investment 9.27

Profit after Tax 2.55

72%
Promoters' Capital 3.52

8
6. BREAK EVEN LEVEL

Fixed Cost (FC):

[Rs.lakhs]
Wages & Salaries 5.24
Repairs & Maintenance 0.26
Depreciation 0.70
Admin. & General expenses 0.66
Interest on TL 0.39
7.25

Profit Before Tax (P) 3.99

FC x 100 7.25 80
BEL = x x 100
FC +P 11.24 100

52% of installed capacity