Project Profile on Readymade Garments

Project Profile

on

Readymade Garments

Promoter

pROJECT AT A GLANCE

1.  Name and Address of the Unit:    

2.  Promoter                                      :        

3.  Project                                :         Readymade and Designer Garments                          

Making Unit

4.  Type                                   :         Micro Enterprise

5.  Management                       :         Proprietary

6. Category                              :         

7.  Location                             :         

8.  Total Project Cost              :         9.63 L

9.  Fixed Capital                      :         6.7 L

10. Working Capital                :         2.92 L

11. Equity(20 %)                     :         1.93 L

12. Margin Money Grant(20%)        :         1.93 L

12.  Employment                     :         17 Nos

13. DSCR                                :         3.90

14. Break Even Point              :         42.67%

BIO – DATA

1. Full name and address                                      :        

                                                                

2. Name of Panchayath & Taluk                 :      

3. Occupation                                             :       

4. Name of Father/Husband                                   :       

5. Age                                                         :      

6. Sex                                                          :      

7. Nationality                                              :       Indian

8. Category                                                 :       Minority

9. Academic Qualification                           :       SSLC

10. Functional Responsibilities in the unit :       Proprietor

                                                                                     

                                                                                      Signature

1.       Introduction

                   After food and shelter, clothing is the most essential human need.  It was earlier to wear individually tailored dresses, then it became fashion to wear readymade garments.  It is easier to go to a shop and select what she/he likes and wear it right away.  During readymade era, there is no need to go to a shop to select a shirt piece and go to another shop to get it tailored and wait for the clothing.  Readymade garments are bulk manufactured and hence it is cheaper than individually tailored ones.  But now people find that, many people wear the same clothing, since readymade dresses are made alike.  Now fashion conscious people started turned to designer garments.  By realising the potential of both areas, this project aims to establish a readymade garments as well as an designer garments unit for the fashion sensitive people.

                   The readymade garment industry is on of the channel of India’s textile industry which dates back to the middle of 19^th century.  The textile industry is a leading industry in the country.  There are mainly two types of clothing, one is natural and the other is synthetic.  Cotton, Silk, Wool etc. comes under natural clothing and Polyester, Nylon etc. comes under synthetic clothing.

                   The overall demand of clothing is gone up since the increase in number of middle and upper middle class people who are very keen in their dressing habits.  Compared to any other state in the country, Keralite purchases more clothing for their personal needs.  The increasing level of travel habits of the people has in turn created demand for occasional and seasonal clothing.  The development in all spheres of life in general especially in educational, industrial and commercial sectors made the demand for garments manifold which can be evident from the fact that there are a lot of garment shops in every nuke and corner of even remote places.  Very big players are setting up garment shops in almost every town.  Being in the field for a long time, the promoter studied various aspects of the industry and now confidently came forward to establish a garment unit.  Moreover she is setting up a designer garment unit, which is a value addition to the readymade industry.

2.       Promoter

                   The promoter of the unit is ............. He/She is aged ..... years and is an enterprising and hard working Man/women.  He/She is also well experienced in the industry. He/She has specialized in the Designer Churidar making and is well known for it in the surrounding areas. She is capable of managing the unit.  His/Her Father/husband’s long experience in the industry and contacts with a lot of customers and various shops make her very confident of running and managing the unit profitably.  He/She is a dynamic person with a greater aspiration.  

3.       Location, Land and Building

                   The unit intended to start in a rented building at ........ town  .  There is all necessary amenities for locating the unit.

                   There will not be any problem for getting required power and communication facilities and is accessible.  Therefore the location is highly suitable for the unit.  The promoter already entered into an agreement with owner of the building for occupying the premises.

4.       Scope

                        The conventional tailoring unit can not cater to the need of people who have no patience to go here and there to select a cloth piece and wait for long to get it tailored to the desired size and shape.  Now readymade garments are preferred to individually tailored ones due to its cost effectiveness and time saving.  We can straight away purchase it and is ready to wear.  Business, industry, service sector and growing rapidly and demand for clothing are increasing manifold.  Numerous industrial, educational, commercial, service and financial institutions are located in and around the unit.  There are a great number of garment shops are functioning in the town and nearby places and this unit can sell their products through these shops also.  Hence one can easily say the scope of the unit is beyond doubt.

5.       Plant and machinery

                   The details of plant and machinery are enlisted in the economics of the project.  They include embroidery machines, sewing machines, overlock machines, button hole machine, collar fusing machine, furniture etc.  The proposed machineries are selected from reputed machinery makers with utmost care.

6.       Manufacturing Process

                   Different types of cloths are selected keeping in mind with the current trend of the industry. The promoter’s long time experience in the industry will make her able to keep up with the latest trend.  She and her team can cut them, stitch them and finish them to latest fashion dresses which can easily sell. She can even make designer garments to the taste of special people and for special occasions.

7.       Raw Materials

                   The raw materials are various clothing and sewing materials.  They are easily available and care will be taken for the selection of the same.

8.       Staff and Labour

                   Skilled and semi skilled workers are required for the smooth functioning of the unit.  They can be arranged locally.  The promoter herself has a lot of experience in the field and is capable of managing the staff and labour force of the unit.  The total staff strength is detailed in economics of the project.  The unit will be operated in on shift.

9.       Power

                   Electricity works as the source of power.  The promoter has already sought the power allocation from KSEB to the proposed building. The total requirement of the power is 8 HP single phase.

10.     Marketing

                   The marketing of the product is the decision making factor of the existence of any unit.  Considering this as the key factor, the promoter’s vast experience in the industry will do a major role.  Her and her husband’s wide spread contacts can assure a stable market for the products.  There are a great number of garments shop in the town and nearby areas through which the product can be sold in addition to direct sales through own shop.  A wide potential market comes around the unit.  Hence a sound market is assured for the products.  Utmost care will be taken for the change of fashion and trend since they decide the sale of readymade garments day to day.

11.     Source of Finance

          The total outside fund is raised by way of loan to the tune of Rs.6.7 Lakhs from Bank as Term loan, and Rs.2.92 Lakhs as working capital loan.  Rs.1.93 Lakhs is raised by the promoter herself.  She is financially sound and is able to raise fund according to the need.  The term loan will be repaid within 5 years.

12.     Conclusion

                   The promoter of the unit is a dynamic and result oriented person. The project has enough scope in all over Kerala/India and nearby areas as the need for garments is increasing day by day.  The sufficient orders for the product can be achieved since the promoter is working in the same line for a last several years.  The demand for products can be increased by maintaining a distinct quality of the product.  The unit can provide direct and full time employment to 16 persons and can provide indirect employment too.

                   With the financial assistance, the promoter will be able to establish the unit in scheduled time.  The promoter plans to start the unit under MSME sector and can get subsidy to the tune of 20% under WIS (Women Industries Scheme) of the Industries Department.  On revealing the various aspect of the project and studying the financial and technical features if the scheme, it can be easily concluded that the project will be a great success.

                  

IMPLEMENTATION SCHEDULE

  

          Sl.No.                   Activity                                   Period of Completion

                                                                                     (Change as per needs)

          1.                Sanction of loan                                Aug’ 2010

         

          2.                Procurement of machinery                Sept’ 2010

          3.                Erection & electrification                            Oct’ 2010

          4.                Government Approvals                              Nov’ 2010

          6.                Procurement of materials                  Dec’ 2010

           

          7.                Commercial production                              Dec’2010

ECONOMICS OF THE PROJECT

13.     Land and Building       :                  Rented @ Rs. 900 per Month

14.     Plant and Machinery   

The following machineries are required for the smooth functioning of the proposed unit.  Their respective costs as per lowest quotation including taxes are as follows:- 

Sl.No	Description	Qty.	Price(Rs)	Suppliers
1	Ranew Embroidery foot+ power motor	2	28000	Naidu and Sons,Attingal
2	Feiyue Button hole machine & button fixing machine	1	156000	-do-
3	Feiyue collar fusing machine	1	140000	-do-
4	Feiyue cutting machine	1	16120	-do-
5	Ranew overlock machine	1	8000	-do-
6	Merrit 8208 foot + power motor auto oil lubricant	10	200000	-do-
7	Scissors, Accessories etc.	-	2000	-do-
	Sub Total(1)		550120
8	Cash cuboard	1	15000
9	Stool	20	16000
10	Cutting table	1	14500
11	Shelf with glass front 210 sq.ft	1	49500
12	Ironing - Table	1	10500
	Sub Total(2)		105500
	Grant Total		655620

15.                      Pre Operative Expenses

                   Pre operative expenses such as Electrification, Installation etc. costs        :                                                        

                                                          :        Rs. 15,000/-

16.     Total Fixed Capital                :        Rs.6,70,620/-

                                                                   =========

17.     Raw Material required per month

Various clothing and sewing materials for Churidar, Nighty, Shirt etc. for one month costs                               :         Rs.2,50,000/-

18.     Staff and Labour per moth

Manager                         1 No.                    Rs.5000/-

Tailors                           14 Nos.                Rs.49000/-

Helper/Trainee               2 Nos.                  Rs.6000/-

                                      ______                 __________

                   Total          17               :        Rs.60,000/-

19.     Other Expenses per Month

Electricity charges                                       :         Rs.1500

Traveling expenses                           :         Rs.1000

Marketing and Selling                       :         Rs.5000

Postage and telephone                      :         Rs.1600

Rent                                                  :         Rs.900

Repair and maintenance                    :         Rs.500

Other unforeseen expenses               :         Rs.500

                                                                ____________

                             Total                    :        Rs.11,000/-

20.     Working capital

Stock of Raw materials 1/2 month    :         Rs.1,25,000/-

Raw materials in process 3 days       :         Rs.30,000/-

Stock of finished goods 2 days                   :         Rs.36,000/-

Credit sale 5 days                             :         Rs.90,000/-

One month working expenses           :         Rs.11,000/-

                                                                _____________

                             Total                    :        Rs.2,92,000/-

                                                               ============

21.     Total Capital Investments

Land and Building                                      :         Rented

Plant and machinery                         :         Rs.6,55,620/-

Pre- Operative Expenses                            :         Rs.15,000/-

Working capital                                :         Rs.2,92,000/-

                                                                _____________

         Total Project Cost                  :        Rs.9,62,620/-

                                                                  ===========

                                          

22.     Source of Finance

Promoter’s Contribution (20%)                                     :         Rs.1,92,524/-

                                                                  

Term loan from Bank(less P.C& Grant)              :         Rs.4,0,2372/-

Working Capital loan from Bank(less P.C& Grant)      :         Rs.1,75,200/-

Margin Money Grant from Industries Dept(20%)         :         Rs.1,92,524/-

                                                                                   ______________

                                       Total                              :        Rs.9,62,620/-

                                                                                   =============

23.     Cost of Production per Month

Raw materials                                                      :         Rs.2,50,000/-

Staff and Labour                                                  :         Rs.60,000/-

Other Expenses                                                    :         Rs.11,000/-

Interest on Term loan(@13%)                              :         Rs.4360/-

Repayment of Term Loan                                    :         Rs.6706/-

Interest on Working Capital Loan(@13%)           :         Rs.1898/-

Repayment of Working Capital Loan                            :         Rs.2920/-

Depreciation(@10%)                                            :         Rs.5464/-

Sales promotion expenses                                    :         Rs.5000/-   

                                                                                    ____________                                              Total                              :        Rs.3,47,348/-

                                                                                    ===========                                             

24.                Sales Revenue per Month

Revenue by sale of Readymade garments and Designer garments per month for the first year :

Churidar                        750 Nos                         :         Rs.2,25,000/-

Nighty                            1000 Nos                       :         Rs.80,000/-

Shirts                                       375 Nos                         :         Rs.93,750/-

                                                                                ________________

                                      Total Sales                    :        Rs.3,98,750/-

                                                                                 ==============

25.                 Profitability

Profit per month                                                  :         Rs.51,402/-

Profit per year                                                      :         Rs.6,16,824/-

Provision for taxes                                               :         Rs.1,28,047/-

Net profit                                                             :         Rs.4,88,777/-

Break Even Point                                                 :         42.67 %

Debt service coverage ratio                                  :         3.89

 

REPAYMENT CHART OF TERM LOAN

                                                                                                            Rs. in Rupees

	1 year	2 year	3 year	4 year	5 year
Opening Balance	402372	321898	241424	160950	80474
Principal Repayment per year	80474	80474	80474	80474	80474
Closing Balance	321898	241424	160950	80474	0
Interest@13%	52308	41847	31385	20924	10462
Total Repayment per year	132782	122321	111859	101398	90936

Depreciation of Plant and Machinery

Year	1	2	3	4	5
Opening Balance	655620	590058	531052	477947	430152
Depreciation @ 10%	65562	59006	53105	47795	43015
Closing Balance	590058	531052	477947	430152	387137

Projected profitability statement

                                                                             Rs. in Lakhs

Sales Revenue
Year	1	2	3	4	5
Capacity (%)	70	75	80	80	80
Sales	47.85	51.27	54.69	60.15	66.15
Cost of Production
Raw materials	30.0	32.14	34.29	37.71	41.48
Staff & Labour	7.20	7.71	8.23	9.05	9.95
Other Expenses	1.32	1.414	1.509	1.659	1.82
Interest on T.L	0.523	0.561	0.598	0.658	0.724
Repayment of T.L	0.804	0.861	0.919	1.01	1.11
Interest on W.C.L	0.227	0.243	0.259	0.284	0.312
Repayment of W.C.L	0.35	0.375	0.40	0.44	0.484
Depreciation@10%	0.656	0.59	0.53	0.48	0.43
Sales Promotion Expenses	0.60	0.643	0.686	0.754	0.829
Total Cost of Production	41.68	44.537	47.421	52.045	57.139
Profit per Year	6.17	6.733	7.269	8.105	9.011
Taxes, Cess etc.	1.281	1.449	1.611	1.862	2.133
Net Profit	4.89	5.284	5.658	6.243	6.88

Computation of DSCR (for I^st Year)

Net Income after Tax                         =       4.89

Interest on Term Loan                       =       0.523

Depreciation                                      =       0.656

         

Total A                                             =       6.069

Repayment of Term Loan                 =       0.804

Total Debt Obligation                       =       0.75

Total B                                              =       1.554

DSCR  A/B                                                 =       3.90

                            

BREAK EVEN ANALYSIS (Based on I^st  year)

                                                            Rs. in Lakhs

Sales                                                 :         47.85

Variable Cost                                    :         32.15

Contribution                                               :         15.70

Fixed Cost                                        :         6.70

                                                                   Fixed Cost  x  100

Break Even Point                              =     ---------------------------

                                                                   Contribution

                                                                   6.70 x 100

                                                          =       -----------------

                                                                    15.70

                                                          =       42.67  %

The Project is Economically viable and Technically feasible. The project is submitted for approval.

                                                                        

                                                                                    Signature of Promoter