STEEL FURNITURE

1. INTRODUCTION:

Furniture is a product of design of sizes, shapes and décor, in addition to provide

functional role. Furniture items are essential item for better living and working
conditions. Chairs, stools, and sofas, tables, and sleeping beds, etc function
oriented designs have evolved over the centuries of human civilization.

Furniture items are made from many materials, like traditional wood and stone to
modern materials like metal, plastic, etc. Cast Iron is used with decorative carving
or engraving designs have been used since centuries but in modern times for mass
requirements, metals like steel, stainless steel and plastics are used due to lower
costs.

2. PRODUCT & ITS APPLICATION:

Every household and commercial building requires furniture. There are a whole
range of items like chairs, bed, tables sofa seats, shelves etc. are required for huge
growing population for residences and work places, and public places viz hotels,
cinema theaters, restaurants, airports, etc.

Since wood has become scare and costly, steel and plastic furniture has become
popular due to its durability and reasonable cost. Steel Furniture is easy to make,
aesthetic utilitarian furniture designs have evolved with the use of materials like
mild steel, stainless steel, cast iron etc.

For steel furniture choosing the right finish is important to provide aesthetic appeal
and durability. Paint, powder coating, anodizing, chrome plating etc. are used.

3. DESIRED QUALIFICATIONS FOR PROMOTER:

Any ITI, Diploma or graduate preferably with fabrication or marketing experience.

4. INDUSTRY OUTLOOK/TREND

The outlook of furniture industry prospects remains optimistic, mainly driven by the
demand from construction, household remodeling, commercial etc sectors; due to
recent economic and industrial policies and measures taken by government. The
furniture market in India is highly fragmented with majority of the revenue being
generated from the local players. The unorganized sector, which includes onsite
carpenters, independent furniture manufacturers and domestic retailers have
accounted for nearly 85% of the furniture market revenue in the country. In the
recent years, moulded plastic, wrought iron, board and bamboo furniture have
been widely purchased by the households in India.
New trend of ready made furniture modules for standard home formats are now
being offered. In order to cater to the rising requirements, special Home décor
show rooms and even online shopping is making inroads in the country. Number of
companies have stepped up effort for mass produced modular steel and wood
furniture market in the last few years.

The Indian furniture market, which has grown at a CAGR of 17.2% in last decade.
The economic growth and policies of house for all, huge infrastructure investments,
etc is likely to see annual rate growth of 15 % for next 5~7 year period. Heavy
demand of household items including furniture and furnishing products from the
urban class has historically been conducive to the growth of furniture market in
India. This trend is expected stay in the future as well, as greater number of people
are even in semi urban and rural areas are aspiring to achieve rise in the standard
of living.

5. MARKET POTENTIAL AND MARKETING ISSUES. IF ANY:

The furniture market in India has historically witnessed a healthy boom in the
country due to rapid urbanization in all the states across India. There are a number
of factors which have led to a growth in furniture demand in the Indian households
in the last few years. The growing economy of the country has boosted spending
capacity of the people, young generation is adapting to modern living standards
demanding furniture items hitherto not used in past, and urban home designs are
getting more and more standard including the standard set of furniture and interior
furniture fitments. This trend in turn has impelled the sales of modular ready made
furniture units offered by branded modular furniture manufacturers in the market.
The growing phase of infrastructure and real estate market has augmented the
demand for furniture products in the country. In the organized retail segment, the
market is occupied by leading companies such as Godrej Interio, Home centre,
Nilkamal, Durian Furniture, Style Spa among others, which have over the years
grabbed significant position in the domestic market. Furthermore, the entry of
international brands like IKEA etc is likely to strengthen trend for modular design
and brand awareness.

There is new as well as replacement / house remodeling demand for these items
and its growth is linked with growth of residential, commercial and office building
construction. The construction industry is growing at a rapid rate in the country.
Therefore there is scope for these items. It is recommended to develop and
produce aesthetic and modular design of furniture components with precision and
good decor. The scope is good for furniture units in the recent that offer modular
designs for furniture retailing in India.

6. RAW MATERIAL REQUIREMENTS:

Structural steel sections, CR, galvanizes steel sheets of various thickness,

Perforated sheets, angles, channels, rods, pipes, wire mesh etc. are used. Cast
iron, Aluminum sections, brass, bronze and stainless steel may also be used in
combination with traditional wood, plywood, particle board, laminates etc Other
materials are surface coating plating, paints, powder coating, and etc. materials.

7. MANUFACTURING PROCESS:

The process of manufacture involves operations as below.

 Cutting of material sheets, tubes, pipes, sections as per required dimensions

in shear machine. Certain components like cast iron and steel rods may be
machined.
 Bending twisting and of rods/ pipes and forming of sheets in bending
machine, press brake or deep drawing as per need.
  Welding of sections, pipes and sheets
 Drilling and threading of components
 Pickling and surface treatment like phosphating, anodizing, hard chrome
plating etc. to provide surface finish to components.
 Painting and polishing of components.
 Assembly of parts with fasteners.
 Inspection and packing for dispatch.

The project should also focus on development of aesthetic designs of furniture for
different uses in residential as well as commercial purposes. Also surface finishes
viz anodizing, hard chrome plating, copper, brass, etc. in addition to paints, is
important.

8. MANPOWER REQUIREMENT:

The unit shall require highly skilled service persons. The unit can start from 11
employees initially and increase to 26 or more depending on business volume.

Sr Monthly
Type of Employees No of Employees
No Salary
Year 1 Year 2 Year 3 Year 4 Year 5
1 Skilled Operators 16000 3 4 6 6 8
2 Semi-Skilled/ Helpers 7000 6 8 10 12 12
3 Supervisor/ Manager 20000 0 0 0 1 1
4 Accounts/ Marketing 15000 1 1 2 2 2
5 Other Staff 7000 1 2 2 3 3

TOTAL 11 15 20 24 26
9. IMPLEMENTATION SCHEDULE:

The unit can be implemented within 6 months from the serious initiation of project
work.

Time Required in
Sr No Activities
Months
 1 Acquisition of Premises 2
2 Construction (if Applicable) 2
Procurement and Installation of Plant and
3 2
Machinery
4 Arrangement of Finance 2
5 Manpower Recruitment and start up 1
Total Time Required (Activities run
6
concurrently)

10. COST OF PROJECT:

The unit will require total project cost of Rs 72.79 lakhs as shown below:

Sr No Particulars In Lakhs
1 Land 15.00
2 Building 25.00
3 Plant and Machinery 20.84
4 Fixtures and Electrical Installation 1.05
Other Assets/ Preliminary and Preoperative
5 1.00
Expenses
6 Margin for working Capital 9.90
TOTAL PROJECT COST 72.79

11. MEANS OF FINANCE:

The project will require promoter to invest about Rs 25.63 lakhs and seek bank
loans of Rs 47.17 lakhs based on 70% loan on fixed assets.

Sr No Particulars In Lakhs
1 Promoters Contribution 25.63
2 Loan Finance 47.16
TOTAL: 72.79

12. WORKING CAPITAL REQUIREMENTS:

Working capital requirements are calculated as below:

 Sr Gross Margin Margin Bank
Particulars
No Amount % Amount Finance
1 Inventories 5.22 40 2.09 3.13
2 Receivables 5.09 40 2.03 3.05
3 Overheads 2.73 100 2.73 0.00
4 Creditors 7.63 40 3.05 4.58
TOTAL 20.66 9.90 10.76
13. LIST OF MACHINERY REQUIRED:

Sr Total
Particulars UOM Qtty Rate
No Value
Main Machines/ Equipment
1 Rod/ flat strip Twisting machine Nos 1 25000 25000
2 Hand Shear Machines Nos 2 12000 24000
23000
3 Mech Power Press Nos 2 460000
0
30000
4 Press brake Nos 2 600000
0
5 Sheet Shearing Machine Nos 1 25000 25000
6 Manual Sheet Folding Machines Nos 2 30000 60000
7 Fly Press Nos 3 25000 75000
8 Sand Blasting Facility Nos 1 80000 80000
25000
9 Pickling and Surface treatment Nos 1 250000
0
10 Spray / powder Painting Facility Nos 2 50000 100000
11 Rod / Flat/ Pipe Bending Bench Nos 2 20000 40000
12 Pillar Drill Nos 1 30000 30000
13 Lathe Nos 1 45000 45000
Spot /Seam/ TIG Welding
14 Nos 4 30000 120000
Machine
15 Paint Baking oven Nos 1 70000 70000
Subtotal: 2004000
Tools and Ancillaries
1 Misc. equipment Dies tools etc. LS 1 50000 50000
2 Hand Tools and gauges LS 1 30000 30000
Subtotal: 80000
Fixtures and Elect
Installation
Storage and transport bins LS 1 10000 10000
 Office Furniture LS 1 5000 5000
Telephones/ Computer LS 1 15000 15000
Electrical Installation LS 1 75000 75000
Subtotal: 105000
Other Assets/ Preliminary and 10000
LS 1 100000
Preoperative Expenses 0
TOTAL PLANT MACHINERY
2289000
COST

All the machines and equipments are available from local manufacturers. The
entrepreneur needs to ensure proper selection of product mix and proper type of
dies and tooling to have modern and flexible utensil designs. It may be worthwhile
to look at reconditioned imported machines, dies and toolings. Some of the
machinery and dies and toolings suppliers are listed here below:

1. Yashwant Industries
440/7-A, G.I.D.C.,
Nr.Neptune Textile, Odhav, Ahmedabad - 382 415.

2. Amritsar Machine Tools

Plot No. 542, Part - A, M. I. E.,
Bahadurgarh-124507, Haryana, India

3. Arpan Machine Tools

No. 12/3, Atika Industrial Area, Near Jaydev Foundry
Atika Industrial Area, Rajkot- 360002 Gujarat, India

4. RAJESH MACHINE TOOLS PVT. LTD.

New Nehrunagar Main Road, 2 - Kailashpati Society, Plot No. 7, Dhebar Road
(South), "ATIKA" Industrial Area,, Rajkot, Gujarat, India
http://www.rajeshpowerpressindia.com

The above list of machine supplier is illustrative. There are many machinery, dies
and tools suppliers and consultants at several industrial clusters all over India
where you may find suppliers of services and machineries for a chosen product
mix.

14. PROFITABILITY CALCULATIONS:

Sr
Particulars UOM Year Wise estimates
No
Year 1 Year 2 Year 3 Year 4 Year 5
1 Capacity Utilization % 40 50 60 70 80

2 Sales Rs. Lakhs 61.04 76.30 91.56 106.81 122.07

Raw Materials & Other
3 Rs. Lakhs 41.74 52.18 62.61 73.05 83.48
Direct Inputs
4 Gross Margin Rs. Lakhs 19.30 24.12 28.94 33.77 38.59
Overheads Except
5 Rs. Lakhs 9.78 9.78 9.78 9.78 9.78
Interest
6 Interest Rs. Lakhs 6.60 6.60 6.60 6.60 6.60

7 Depreciation Rs. Lakhs 4.79 4.79 4.79 4.79 4.79

8 Net Profit Before Tax Rs. Lakhs -1.87 2.95 7.77 12.60 17.42

The basis of profitability calculation:

The Unit will have capacity of 15000 units of modular steel furniture items per year
with product mix consisting of standard products with designs that use
combination of stainless steel / carbon steel, aluminum, brass, particle board/
plywood, glass, etc. The bulk /Distributor sales prices for average price range of
product is taken at Rs 1000 to Rs 15000 depending type of module, size, design,
materials, grade, etc. The raw material used are mild steel, brass, aluminum, as
well as particle boards, plywood, etc as per bulk order specified by retailers. The
direct costs of raw material costs and manufacturing for these products are taken
at 65 ~ 75 %. The material requirements are considered with wastage/ scrap of 6
~ 14 % of finished products, which can be sold at @ Rs 15 to 30 per Kg. and the
income of same is added. Energy Costs are considered at Rs 7 per Kwh. The
depreciation of plant is taken at 10 % and Interest costs are taken at 14 -15 %
depending on type of industry.

15. BREAK EVEN ANALYSIS

The project is can reach break-even capacity at 43.88 % of the installed capacity as
depicted here below:

Sr No Particulars UOM Value

1 Sales at Full Capacity Rs. Lakhs 152.59

2 Variable Costs Rs. Lakhs 104.35

3 Fixed Cost incl. Interest Rs. Lakhs 21.17

4 Break Even Capacity % of Inst Capacity 43.88

16. STATUTORY/ GOVERNMENT APPROVALS

The unit shall need industrial unit registration of state. The industry registration
and approval for factory plan, safety for Fire requirement, registration as per Labor
laws ESI, PF etc shall be required as per rules and applicability. Before starting the
unit will also need GST registration for procurement of materials as also for sale of
goods. There are no pollution control requirements, while unit will have to ensure
solid waste/ scrap disposal in proper manner. Entrepreneur may contact State
Pollution Control Board where ever it is applicable.

17. BACKWARD AND FORWARD INTEGRATION

The machines and equipments offer scope for diversification in to producing tailor
made products for consumer for their industrial parts/ components by using the
spare capacities and machine capabilities which may be attempted. As such there
is not much scope for organic backward or forward integration.

18. TRAINING CENTERS/COURSES

There are no specific training centers for this product design or production
technology. However the dies and Tools development courses run by several
centers of excellence viz Indo German Tool Room at Ahmedabad, Rajkot, Chennai,
and CTTC Bhubaneshwar shall be helpful.

The most important scope of learning is in new product design and development
by associating with institutes like NID etc. Entrepreneur may also study the new
product designs, product range, features and specifications of leading Brands /
competitors across the world by scanning the Internet and downloading data. Viz.
North American, Europe, China etc markets.

Udyamimitra portal ( link : www.udyamimitra.in ) can also be accessed for hand-

holding services viz. application filling / project report preparation, EDP, financial
Training, Skill Development, mentoring etc.

Entrepreneurship program helps to run business successfully is also available from

Institutes like Entrepreneurship Development Institute of India (EDII) and its
affiliates all over India.

Disclaimer:
Only few machine manufacturers are mentioned in the profile, although many
machine manufacturers are available in the market. The addresses given for
machinery manufacturers have been taken from reliable sources, to the best of
knowledge and contacts. However, no responsibility is admitted, in case any
inadvertent error or incorrectness is noticed therein. Further the same have been
given by way of information only and do not carry any recommendation.

Source:- Udyami Mitra/Sidbi