23

Suede

PRODUCT CODE : 292001 QUALITY AND STANDARDS : IS 8170-1983 PRODUCTION CAPACITY : Qty. : 60,000 Peices (per annum) Value: 5,04,00,000 MONTH AND YEAR : January, 2003 OF PREPARATION PREPARED BY : Small Industries Service Institute, 107, Industrial Estate, Kalpi Road, Kanpur-208 012. (U.P.) Phone Nos.: 295070, 295071 and 295073 (EPBAX) 295072 (SENET and TRC) Tele/Fax No.: 0512-220831 Email: [email protected] Website:www.sisikanpur.com

INTRODUCTION international market for this leather especially in the developed countries Suede Leather can be manufactured like USA, Canada, Great Britain, from cow , goat skin, buffalo hide Germany, Italy, Australia, Japan and and even from sheep skins. This leather many other countries. Although the is finished on the flesh side and has a exact demand figure of export for this velvety nap. The velvety nap on the flesh leather is not available now, there is a side is the beauty of this leather. great hope for an expanding market for Upper, garment and other fancy products this kind of leather throughout the globe. are manufactured from this leather but India has got very rich resources in mostly it is manufactured from cow hide terms of availability of skilled manpower, or goat skins. advanced technical know-how and highest raw-material resources i.e. raw- MARKET POTENTIAL hides and skins. With this background India is now among the top four global There exists a very good market players in the leather trade, according potential for the Suede Leather both in to a recent FAO survey. the domestic market as well as in the There are a number of and overseas market. The use of this leather leather garments manufacturing units in making fashionable leather products throughout the country. These units are is increasing day-by-day. There is an manufacturing footwear and leather enormous export potential in the garments from suede leather. 142 SUEDE LEATHER

BASIS AND PRESUMPTIONS TECHNICAL ASPECTS 1. The production capacity of Suede Process of Manufacture Leather given in this profile is Raw Material based on single shift basis for 300 days in a year of 8 hours working Wet salted hair-slip quality cow hides. per day. Soaking: The hides are washed 2. Three years will be required to thoroughly and soaked in a paddle containing Na S(Sodium Sulphide) 0.2% achieve 90% capacity utilisation. 2 and water 400-500%. The hides are kept 3. Labour wages are based on in the paddle overnight and next prevailing rates in the State. morning checked for proper soaking and 4. Rate of interest on capital then washed in running water. The water investment is based on banks or is drained out and soaked weight is financial institutions interest rates. taken. 5. The period of loan to be Liming (in drum): The following recovered by the bank or chemicals are taken on soaking weight- financial institutions as per their water 300%. Sodium Sulphide 5%, norms. Staked lime 4 to 6%, salt 3%. Total liming is done for 18-20 hours and the 6. The cost of machinery and drum is run 2-3 minutes after every two equipment are based on the hours. The stock is rinsed in soft water prevailing rates at the time of for 10 minutes. The hides are fleshed preparation of project profile. and the weight determined. 7. The cost of land, construction, : The fleshed pelt is washed raw materials, chemicals etc. may in running water in drum for 20 minutes. vary from time to time and place The water is drained out and the to place. following chemicals are taken on pelt weight. Ammonium sulphate 1.2-1.7%, Sodium bi-sulphate 0.4-0.6% water IMPLEMENTATION SCHEDULE 250%. Sl. Activity Period The drum is run for 30-40 minutes No. (in months) and checked by phenolphthalein and 1. Registration and other 1 test should show 20-25% red. Drain out formalities the water and wash thoroughly with 2 changes of water for 20 minutes. 2. Land acquisition 2 Pickling: The pelt are picked with the and calling of quotations following chemicals: Water 30-60%, salt 3. Construction 6 8%, Drum run for 10 minutes and then 4. Machinery purchasing 6 add H2SO4 (1.84 Conc.) 1.5%. and installation The acid is diluted with water and added in 3 installments after the interval 5. Trial production 3 of 10 minutes and after last instalment SUEDE LEATHER 143 drum run for 45 minutes and then 2. As per the buyer’s specification. Formaldehyde 0.5% is added. Drum run for 5 minutes and checked Production Capacity p H of pelt with bromophenol blue Quantity : 60,000 cow hides. indicator, which should be 2.3 to 3.0 Value : Rs. 5,04,00,000 and the PH of the float be about 8. Chrome : Half of the pickle Motive Power 130 HP. liquor is drained out and the hides are run for 15 minutes and B.C.S. powder Pollution Control 3%, sodium Acetate 0.5% is added. The The tanning process require a huge following chemicals are fed in two quantity of water for processing and installments after the interval of 15 generates a large quantity of waste minutes and drum run for further 2-2.5 water. Non-degradable organic matter hours. Next day Samming, setting, and organic salt. Most of the chemicals splitting and shaving 1.3-1.4mm is used in the tanning process are bio-non- done. The shaved leather is washed for degradable and pose a serious threat to 10 minutes in warm water of 30-35ºC. the environment. Thus the tannery Retannage: Basic Chrome crystal waste water contains a variety of (33%) 5% (without float-dissolved 1:1, different substances like salt, Sulphide, sodium formate 1%, Let the drum run chrome sulphate, solvents, dyes and for 10 minutes and then add sodium other materials. formate 0.5%, and Sodium bi-carbonate In view of the above, the leather 0.7%(dissolved 1.10) the drum is run tanning industry is identified as the most for 45 minutes and pH should be 4.5- highly polluting industry and marked as 4.6 and then add wattle extract powder “RED CATEGORY” in the list of polluting 4% and Tanigan PR(Bayer)1%. The drum industry. is run for 45 minutes and rinsed for 5 minutes. Therefore, the unit requires an “Effluent Treatment Plant” of its own in Dyeing and Fat Liquoring: Acid dye the unit premises. in powder 3%, the drum is run for 25 minutes and 100% water is added. Drum For the treatment of tanning waste water run for 20 minutes and Sandozol KS 6% the following steps may be adopted: is added. Drum run for 20 minutes and 1. Change in process, segregation taffnilon 210A-1% is added. Drum run and recovery, reuse of water. for 20 minutes and then horse up. The leather are sammed, set up saw dusted, 2. Primary treatment of waste water. staked, toggled, buffed on grain side with 3. Secondary treatment of the effluents. 400 grit emery paper, dust off and dry miled. 4. Disposal of solid wastes. Quality Control and Standards Since the complete tanning waste 1. Indian Standard Specification IS treatment is very expensive and it is also 8170 : 1983 will be used in not possible for any small-scale unit, maintaining standards for cow therefore, the tanning waste treatment suede leather. system has been classified in to two sections: 144 SUEDE LEATHER

1. Primary Treatment Sl. Description Specif- Qty. Value 2. Secondary Treatment No. ication (Rs.) 3. Fleshing 1800mm 1 2,00,000 The primary treatment should be Machine width done by respective tanning unit, and (15 HP)

secondary treatment should be done by 4. Experimental 3x3 1 50,000 Municipalities corporations, Waste Drums (5 HP) Treatment Organisation. 5. Double width 1800mm 1 4,00,000 The basic objectives of the primary Shaving width treatment plant are screening, Machine sedimentation, reducing effluents 6. Dyeing Fat 2 3,00,000 volume, settling, filtration and Liquoring Drum evaporation. (10 HP)+ One Dry Energy Conservation Drum i) Common drive system to run the 7. Stacking S/o comb type 1 1,00,000 paddles may be adopted. Machine ii) Thorough checking of the 8. Toggle 10 plates 1 1,00,000 motors, driving system etc. Chamber should be done from time to time. 9. Measuring 1800mm 1 2,00,000 Machine width FINANCIAL ASPECTS 10. Generator Set 1 2,00,000 A. Fixed Capital 11. Working Table, Toggle etc. 1 50,000 (i) Land and Building (Rs.) a) Land 1500 Sq. Meter 15,00,000 12. Weighing Scale 1 50,000 b) Building (Built-up Area) 13. Buffing 1. Office Stores etc. 150 sq. mtr. 3,00,000 Machine 1 1,00,000 2. Working Shed 800 sq.mtr. 20,00,000 14. Testing 3. Well Overhead Tank, Water 2,00,000 Equipment LS 50,000 connection etc. 15. Office LS 1,00,000 Total 40,00,000 Equipment Effluent Treatment Plant (Primary) 2,50,000 and Furniture

(ii) Machinery and Equipments 16. Electrification LS 2,50,000 and Installation

Sl. Description Specif- Qty. Value Total 26,50,000 No. ication (Rs.) 1. Wooden Paddle 8’x7' 2 2,00,000 (iii) Total Fixed Capital (Rs.) with motor and starter 1. Land and Building 40,00,000 (10 HP) 2. Primary Effluent 2. Tanning drum 8x7 2 3,00,000 Treatment Plant 2,50,000 with motor 3. Machinery and Equipments 26,50,000 and starter (10 HP) Total 69,00,000 SUEDE LEATHER 145

B. Working Capital (per month) (iv) Other Contingent Expenses (per month) Sl. Description Amount (i) Staff and Labour (per month) No. (Rs.) 1. Postage and Stationery 5,000 Sl. Designation No. Salary Total No. (Rs.) (Rs.) 2. Telephone 5,000 3. Transportation Charges 5,000 1. Manager 1 10,000 10,000 4. Consumable Stores 5,000 2. Production Manager 1 8,000 8,000 5. Repair and Maintenance 5,000 3. Supervisor 1 5,000 5,000 6. Insurance 5,000 7. Other misc. expenditure 5,000 4. Clerk-cum-Accountant 1 4,000 4,000 Total 35,000 5. Store Keeper 1 4,000 4,000 (v) Total Working Capital (per month) 6. Peon 1 2,000 2,000 Sl. Description Amount 7. Watchman 1 2,000 2,000 No. (Rs.) 1. Staff and Wages 1,38,000 8. Skilled Workers 6 4,000 24,000 2. Raw Material 32,50,000 9. Semi-skilled Workers 7 3,000 21,000 3. Utilities 40,000 10. Machine Operators 5 4,000 20,000 4. Other contingent expenditure 35,000 11. Fitter/Electrician 1 3,000 3,000 Total 34,63,000

12. Unskilled Workers 6 2,000 12,000 (vi) Working Capital (for 3 months)

Total 1,15,000 Working Capital for 3 months 1,03,89,000 34,63,000 x3 Add perquisites @ 20% on Salary 23,000 Total 1,03,89,000 Total 1,38,000 C. Total Capital Investment (ii) Raw Material (per month) Sl. Description Amount No. (Rs.) Sl. Description Quantity Rate Total 1. Fixed Capital 69,00,000 No. (Rs.) (Rs.) 2. Working capital (3 months) 1,03,89,000 1. Wet Salted 5000 20 per 25,00,000 Cow Hides pieces Sq.Ft. Total 1,72,89,000 equiva- lent to FINANCIAL ANALYSIS 1,25,000 Sq.Ft. (1) Cost of Production (per year) 2. Processing L.S. 6 per 7,50,000 Chemicals Sq.Ft. Sl. Description Amount No. (Rs.) Total 32,50,000 i) Working Capital 4,15,56,000 (iii) Utilities (per month) ii) Depreciation on Building @ 5% 1,25,000 iii) Depreciation on machinery 2,50,000 Sl. Description Amount and equipments @ 10% No. (Rs.) iv) Depreciation on Equipment 30,000 1. Power 30,000 and Fixture @ 20% 2. Fuel/Diesel 10,000 v) Interest on Total Capital Investment @ 15% 25,93,350 Total 40,000 Total 4,45,54,350 146 SUEDE LEATHER

(2) Turnover (per year) Sl. Items Quantity Rate Value No. (Rs.) (Rs.) 1. Grade I-2% 30,000 Sq.ft. 50 15,00,000 2. Grade II-20% 3,00,000 Sq.ft. 40 1,20,00,000 3. Grade III-40% 6,00,000 Sq.ft. 35 2,10,00,000 4. Grade IV-30% 4,50,000 Sq.ft. 30 1,35,00,000 5. Rejection 8% 1,20,000 Sq.ft. 20 24,00,000 Total 5,04,00,000

(3) Net Profit (Before Taxation) (per year) (Rs.) B.E.P. = Fixed cost x 100 Profit = Turnover – Cost of Production Fixed cost + Net Profit Turn Over 5,04,00,000 = 40,56,750 x 100 40,56,750 + 58,45,650 Cost of Production (–) 4,45,54,350 = 40.96% Total 58,45,650 Addresses of Machinery and Raw (4) Net Rate of Return on Investment Material Suppliers = Net Profit per year x 100 Turnover per year 1. M/s. Bengal Machinery Co. 9-A, New Tangra Road, Kolkata. = 58,45,650x100 1,72,89,000 2. M/s. Annapurna Engg. Works, = 33.8% F-10/2, MIDC, Shiroli, Kolhapur.

(5) Rate of Net Profit Ratio 3. M/s .Shalimar Engg. Works, 12-B, Prabhorah Sarkar Lane, = Net Profit Per year x 100 Total Investment Kolkata-15. = 58,45,650x100 4. Prototype Development and 5,04,00,000 Training Centre, = 11.60% B-24 Guindy Estate, (6) Break-even Point Ekkaduthangal, Chennai-9. 5. M/s. Hindustan Engg. Works, Fixed Cost Jawahar Nagar, Kolhapur. Sl. Description Amount No. (Rs.) 6. M/s. Soloi Engg. Works, 43/420, North Usman Road, a) Depreciation on Building @ 5% 1,25,000 Chennai-17. b) Depreciation on Machinery @ 10% 2,50,000 7. M/s. New Bengal Engg. Works, c) Depreciation on Equipments and Furniture @ 20% 30,000 9A, New Tangra Road, Kolkata-46. d) Interest on capital investment 25,93,350 8. M/s. Rajam brothers Engg. Pvt. Ltd., e) Insurance 60,000 57, Tirupalli Street, Chennai-1. f) 40% of Salary and Wages 6,62,400 9. M/s. India Tanning Machinery g) 40% of other contingent Corporation, expenditure and utilities 3,36,000 36-37, Angappa Meken Street, Total 40,56,750 Chennai-1. SUEDE LEATHER 147

10. M/s. Elgi Equipment Ltd. 6. M/s. BASF India Ltd., 24/16, Pantheon Road, Egmore, Tikon House, Chennai-6. Mumbai-11. 11. Wet salted cow hides are available 7. M/s. BASF India Ltd., locally in Kanpur. Tikon House, Jajmau, Kanpur-10. Raw Material and Chemical Suppliers 8. M/s. Colour Chem Ltd., Jajmau, Kanpur-10. 1. M/s. Tan India Wattle Extract Corporation, 9. M/s. Indofil Chemicals Ltd., 95/A, Mound Road, Chennai-16. Nirlon House, Dr. Annie Besant Road, 2. M/s. leather Aids and Auxillaries, Mumbai-20. 13, V.V. Koil Street, Chennai-3. 10. M/s. LIDCAL Enterprises, 3. M/s. Ausuchem, 188, Pardevan Purwa, 12, Bhuvan Building, 422, Kanpur-10. Veer Savarkar Marg, Prabhadevi, Mumbai-25. 11. M/s. Tanpel International, Shop No.2, No.296, Tiwaripur, 4. M/s. Leather Chemical Industries, Lal Bangla, Kanpur. 1-A, New Alipur, Kolkata. 12. M/s. L.D. Chemicals, 5. M/s. Asiatic Chemical Company, 461-D, Defence Colony, 26/46, Birhana Road, Kanpur. Kanpur-10.