Project Report on Readymade Garments TIny Mfg Unit

PROJECT REPORT ON READYMADE GARMENTS By: Dr.R.Suresh Kumar, Chartered Engineer

1. Introduction
This project profile is based on manufacture of readymade garments such as shirts, trousers tops, ladies suits (Salwar kameez and nighties). The demand of readymade garments is increasing day by day due to urbanization of the cities. The garments are very simple to manufacture and easily marketable both in urban and rural areas.

2. Market potential
The market for readymade garments is increasing in India and abroad and has a good scope, especially for ladies and children garments. The marketing of garments will not be a problem provided the users are made aware of the cost benefit. All over the country significant local market is available for different types of products in garments.

3. Technical details
(a) Manufacturing process
In woven fabrics, different types of colour and design are available in the open market.
After checking unevenness of fabric and defects before cutting of the clothes, the fabric is then marked by coloured chalk of shape different parts as per design and size of the garments and cut over the marking manually by using scissors. The stitching of different parts of the garments is carried out in sewing machine and overlock machine. The garments are labeled, pressed and then packed in polythene packets, followed by carton boxes for dispatch.

(b) Production targets 4,800 Nos.

(c) Utilities (power water fuel etc. per month) 2 KW

4. Details of plant and machinery

1. Foot operated sewing machine 3 Nos.@ Rs.3,000.00 - Rs.9,000.00
2. Over Lock Stitching Machine with 0.5 HP Motors and stand fitted on
Table 1 No. @Rs.5,000.00 –Rs.5,000.00

TOTAL :Rs.14,000.00

5. Cost of the project
1. Building (200 sq ft rented) Rented
2. Plant and machinery (Including installation) Rs.14,000.00
3. Misc. Fixed Assets (Dummies, Scissors, Presses, Scales etc.) Rs.10,000.00
4. Furniture and fixtures (including office equipments)Rs. 10,000.00
5. Preliminary and pre-operative expenses Rs.4,000.00
6. Contingencies (including cost escalation) Rs.2,000.00
7. Working capital Rs.60,000.00

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TOTAL :Rs.1,00,000.00
6. Means of finance
1. Promoters' Contribution @13%- Rs.13,000.00
2. Banks Term Loan @87%-Rs.87,000.00
TOTAL Rs.1,00,000.00

7. Utilities (per annum)
1. Power :Rs.12,000.00
2. Water :Rs.3,600.00
TOTAL Rs.15,600.00

8. Manpower requirement (per month)
1. Manager @Rs.4000.00 –Rs.4000.00
2. Supervisor Cutter 1No. @Rs. 3500.00-Rs. 3500.00
3. Skilled 2 Nos.@Rs.3,000.00- Rs.6,000.00
4. Unskilled 1No.@Rs. 2,000.00 -Rs.2,000.00
TOTAL Rs.15,500.00

9. Raw material requirement

Sl.No
Items
Qty(mtr)
Rates(Rs.)
Value(Rs.)
1
Cotton/synthetic plain & printed fabric of various colours and shades. 500
40
20,000.00

2
Cotton printed fabric in different colours and shades
500
30
15,000.00

3
Terry cot fabric in different colours and Shades

50
60
3,000.00
4
Misc. items like sewing threads cotton yarn button, hook, laces,packing material etc.

12,000.00
TOTAL:Rs.50,000.00

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10. Working capital requirement

Sl.No.
Item
Period(month)
Amount(inRs.)
1
Raw Material
1/2
25,000.00
2
Stores & spares
1/4
500.00
3
Stock in process
1/2
12,000.00
4
Finished Goods
1/2
15,000.00
5
Receivable/debtors
1
5,500.00
6
Other Current assets
1
2,000.00
TOTAL: Rs.60,000.00

11. Project economics (Annual)

A. Sales realization
Sl.No
Item
Qty.(Nos.)
Rate(Rs.)
Value(Rs.)
1
Shirt/tops
1000
150
1,50,000.00
2
Trousers
900
300
2,70,000.00
3
Ladies Suit
1,900
200
3,80,000.00
4
Nighty
1,000
100
1,00,000.00
TOTAL:Rs.9,00,000.00

B. Cost of production (Per annum)
Sl.No.
Item
Amount(in Rs.)
1
Raw material (including Packing material)
6,00,000.00
2
Stores & Spares
6,000.00
3
Utilities (power, fuel, water etc.)
15,600.00
4
Salaries and wages
1,86,000.00
5
Rent
24,000.00
6
Transportation/Freight
6,000.00
7
Selling expenses (including advertising distribution cost, commission and rebates)

4,000.00
8
Repair and Maintenance
2,000.00
9
Interest
6,000.00

TOTAL :Rs.8,49,600.00

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C. Cash Profit (A-C) 50,400.00
D. Depreciation @ 15% of fixed assets costs 5,100.00
E Profit before tax (D-E) 45,300.00
F. Taxes -
G. Profit after tax 45,300.00

12. Viability indicators

Sl.No
Particulars
Amount
1
Repayment per annum (period - 5 years)
Rs.20,000.00
2
Return on Investment
45.30%
3
Debt Service Coverage Ratio
2.17%

13. General remarks
 The Cost of Plant and Machinery has been taken on the basis of items manufactured by standard/reputed suppliers having sound service network. The suppliers shall preferably be based in local areas or nearby States.
 Optimum working capital cycle has been taken for calculating the requirements.
 The cost of project will vary in different States & region
It is assumed that the products/services have good demand and the promoters have sound experience in the relevant fields.

Prepared By:

Dr.R.Suresh Kumar
Certified Chartered Engineer No.M57869-4
Old No.348/1,New No.496,Behind Archies Gallery,
Between 10th&11th Cross, Sampige Road,
Malleswaram,BANGALORE-560003,Karnataka,India.
Ph:91-80-23349593,Mob:[phone],Email:[e-mail]

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