SOAP
PRODUCT CODE
: 3051
QUALITY AND STANDARDS
: IS: 2888:1983
PRODUCTION CAPACITY
Value
: 4,76,400 Nos. Soaps of 100 grams each
: Rs. 47,64,000/-
MONTH AND YEAR
OF PREPARATION
: June, 2014
PREPARED BY
: Ms. Vanshi Uniyal
Investigator (Chemical)
1. INTRODUCTION
Chemically, soap is a salt of a fatty acid. Soaps are mainly used as surfactants
for washing, bathing, and cleaning, but they are also used in textile spinning and are
important components of lubricants.
Soaps for cleansing are obtained by treating vegetable or animal oils and fats
with a strongly alkaline solution. Fats and oils are composed of triglycerides; three
molecules of fatty acids are attached to a single molecule of glycerol. The alkaline
solution, which is often called lye (although the term "lye soap" refers almost
exclusively to soaps made with sodium hydroxide) brings about a chemical reaction
known as saponification. In this reaction, the triglyceride fats are first hydrolyzed
into free fatty acids, and then these combine with the alkali to form crude soap, an
amalgam of various soap salts, excess fat or alkali, water, and liberated glycerol
(glycerin). The glycerin is a useful by-product, which can be left in the soap product
as a softening agent, or isolated for other uses.
Soap is undoubtedly the oldest product to be produced specifically as a
surfactant and in its many forms continues to play a major role today. Within this
highly competitive marketplace soap is presented in a multitude of forms both solid
and liquid.
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Soap
2. PRODUCT & ITS USES
The product categories can be classified into three segments; premium (Lux,
Dove), popular (Cinthol, Nirma), and economy (Nirma Bath, Lifebuoy). The price
differential between the premium and economy segments is about 2X. The popular
and economy segments account for about 4/5th of the entire market for soaps. Soaps
are generally opaque type to translucent.
3. MARKET POTENTIAL
The market of soap is growing at 7% a year. This means that the incremental
demand generation is 5% over and above the population growth. With increasing
awareness of hygienic standards, the market for the soaps could grow at a rate
higher than 8% annually. Interestingly, 60% of the market is now sourced from the
rural sector. This means that the variance between the two segments is not very
large. Since upper-end market focus is the urban areas, margins come from the
urban sector.
India with a huge population has a household penetration of soaps at 98%.
People belonging to different income levels use different brands, which fall under
different segments, but all income levels use soaps, making it the second largest
category in India. Rural consumers in India constitute 70% of the population. Rural
demand is growing, with more and more soap brands being launched in the
discount segment targeting the lower socio-economic strata of consumers. Soap
manufacturers originally targeted their products to the lowest income strata in urban
as well as rural areas, positioning their brands as a way to remove dirt and clean the
body. For some brands, that positioning persists even today with a focus on removal
of body odor and keeping the user healthy. However, soap positioning is moving
towards skin care as a value-added benefit.
(http://www.indianmirror.com/indian-industries/soap.html)
4. MARKETING STRATEGY
There are many established national as well as international brands but they
have captured mainly the urban and elite markets and for a quality product, there is
a vast market which can be penetrated by offering competitive prices. Apart from a
growing household market, other lucrative segments are spa, hotels, restaurants, etc.
Marketing would play a crucial role and placement, publicity, commission to
retailers etc. are important aspects.
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Chemical Division
5. BASIS AND PRESUMPTIONS
i.
It is presumed that the unit will run single shift per day & 300 days in a year.
ii.
The rate of interest has been taken 14% on an average both for fixed
investment and working capital.
iii.
The calculations have been carried out on considering the present trend of
market.
iv.
After installation of the said machinery these are also helpful for other kind of
similar product.
v.
The wastage has been considered at a rate of 2% of the total production.
vi.
For raw material and machinery and equipment the local market rates has
been considered.
vii.
All raw material of good quality are presumed to be used.
viii.
The rates of machinery and equipments and raw materials are those
prevailing at the time of preparation of Project Profile. They are likely to vary
from place to place and supplier to supplier and necessary changes are to be
made as and when required.
ix.
Owing to its nature of beautifying the skin and hair, the pH of the soap has to
be maintained up to 7.5.
6. IMPLEMENTATION SCHEDULE
The approximate time required for various activities is given below.
However, it may vary from place to place depending upon the local circumstances
and enthusiasm of the entrepreneur:
S. No.
Activity
Period (in Months)
1.
Scheme Preparation and Approval
0-1 Month
2.
Provisional Registration (EM – Part I) & Preparation
of Project Report
1-2 Months
3.
Sanction of loan
2-5 Months
4.
Clearance from State Pollution Control Board
3-4 Months
5.
Placement of order for machinery and delivery
4-5 Months
6.
Installation of machines
6-7 Months
7.
Power connection
6-7 Months
8.
Trial Run
7-8 Months
9.
Commercial Production
9th Months onwards
Due to overlapping of some activities, normally 6-9 months are required to
implement the project.
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Soap
7. TECHNICAL CONCEPTS
7.1. Process of Manufacture
Toilet soap and its method of manufacturing is more or less similar to other
toilets soap. It is fancy because of its standard quality raw material and packing. To
prepare this fancy soap, first of all its formulation is to be set in following way:
S. No
1.
Name of raw material
Coconut oil
% Composition
50
2.
Tallow
25
3.
Lard
25
4.
Caustic lye
50
5.
Color
Total
Perfume mixtures for this soap
1.
Bergamot oil
8.8
158.8
6.5
2.
Sassafras oil
1.75
3.
Clove oil
1.75
4.
Thyme oil
1.75
5.
Oil of neroli
0.8
6.
Tincture for musk
0.3
Total
12.85
This perfume mixture can be had readily prepared from the market or can
also be prepared in the unit.
Process: To manufacture this fancy soap two batches are made. Into first
saponification is done and into second mixing of perfume is carried out. To prepare
base of soap take all raw material coconut oil, tallow lard are taken into kettle and
add caustic soda lye slowly when the saponification is done add perfume made as
per above said formulation or can use readily prepared perfume. The mixing is
carried out properly so that homogeneity may be obtained put this mixture into the
moulds/frame for few hours. When the soap is set, stamping and packing is being
done.
7.2. Quality Control & Standards
In order to manufacture good quality soap, it is utmost urgent to purchase
good quality of raw material from only the established and renowned suppliers.
Before putting the raw material into operation all those has got to be tested for their
chemical properties at the gate testing facilities and after the finished product.
Quality means the producer has to satisfy the desire and urge of uses. Keeping in
view the demand of people from quality point of view it is necessary to adopt better
technique of manufacturing and good quality of raw material. To manufacture the
fancy soap of good quality, specific BIS standard can be followed.
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Chemical Division
7.3. Production Capacity (Per Annum)
Quantity
: 4,76,400 Nos. Soaps of 100 grams each
7.4. Pollution Control
There might be some pollution in the manufacturing of soap. However, the
producer is advised to adopt and follow the prescribed norms by the pollution
control board. Before switching over to manufacturing, NOC from the concerned
State Authority is very much required in this case. To minimize the pollution some
control measures and monitors can be installed.
7.5. Energy Conservation
To conserve the energy required thickness of vessels should be taken. Only
necessary machinery and equipment and jig jags should be purchased. Proper space
is given to proper flow for manufacturing raw material and finished products.
Control is maintained over consumption of electricity light and fuel so that
extravagance expenditure can be checked.
8. FINANCIAL ASPECTS
8.1. Fixed Capital
Land & Building
Land of 200 Sq. mtr and Covered area of 100 Sq. mtr. rented @ 12,000/- per month
8.1.1. Machinery & Equipments
S.No
Particulars
Nos.
Rate (Rs.)
Value (Rs.)
1
Melting pans/kettle with agitator 100 kg
capacity
01
80,000
80,000
2
Saponifying tank 100kg. capacity
01
50,000
50,000
3
Lye Storage tank with SS lining 50 lit.
capacity
04
8,000
32,000
4
Stamping machine automatic
(50 pcs. per minute)
01
35,000
35,000
5
Baby boiler
01
68,000
68,000
6
Cutting machine
01
12,000
12,000
7
Lab Equipments
LS
Office Furniture
LS
Total
Installation/Electrification @10%
Total
Rs. 30,000
Preoperative Expenses
Rs. 5,000
Total Fixed Capital
Rs. 3,50,700/-46-
10,000
2,87,000
28,700
3,15,700
Soap
8.2. Working Capital (Per Month)
8.2.1. Personnel (Salary & Wages)
S. No.
1.
Designation
Manager
Nos.
01
Salary (Rs.)
self
Total (Rs.)
--
2.
Chemist
01
10,000
10,000
3.
Sales Manager
01
7,000
7,000
4.
Skilled workers
01
9,000
9,000
5.
Unskilled worker
02
8,000
16,000
42,000
6,300
48,300
Total
Perquisites @ 15%
Total
8.2.2. Raw Material (including packing materials)
S.No.
1
Particular
Coconut oil
Qty.(kg)
1250
Rate (Rs./ kg)
87
Value (Rs.)
1,08,750
2
Tallow
625
36
22,500
3
Lard
625
36
22,500
4
Caustic Soda Lye
1250
17
21,250
5
Color / Perfume mixture
L.S.
6
Packing materials @ Rs 5/- per kg
23,000
Total
19,850
2,17,850
8.2.3. Utilities
S. No.
1
2
Particular
Power @ Rs. 7/- (60 units per day) 25 Days
Value (Rs.)
10,500
Water
Total
1,000
11,500
8.2.4. Other Contingent Expenses
S. No.
1
Particulars
Rent
Value (Rs.)
12,000
2
Printing & stationery
1,500
3
Telephone
1,000
4
Postage
1,000
5
Repair and maintenance
2,000
6
Consumable stores
2,000
7
Transportation charges
3,900
8
Advertisement
3,000
9
Miscellaneous
2,000
28,400
Total
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Chemical Division
8.2.5. Working Capital/ Total Recurring Expenditure (p.m.)
Working capital (per month) = (48,300 + 2,17,850 + 11,500 + 28,400) Rs. 3,06,050/-
8.3. Total Capital Investment
Fixed Capital
Rs. 3,50,700
Working Capital (for 2 months)
Rs. 6,12,100
Total
Rs. 9,62,800
9. FINANCIAL ANALYSIS
9.1. Cost of Production (Per Annum)
Sl.No. Cost of Production (P.A.)
1
Total recurring expenditure
Amount (Rs.)
36,72,600
2
Depreciation on Machinery & Equipments @ 10%
31,570
3
Depreciation on furniture and lab equipments @ 20%
4
Interest on total investment @ 14%
Total
9.2. Turn Over (Per Annum)
Total production
3,970 Kg per month, i.e., 47,640 Kg per annum
4,76,400 nos. soaps @ 100 grams each
Sale Realization
Cost of each soap @ Rs.10/Cost of 4,76,400 soaps
Rs. 47,64,000
9.3. Net Profit (Per annum) (Before Taxation)
= Rs. 47,64,000 – Rs. 38,44,962
= Rs. 9,19,038/-
9.4. Net Profit Ratio
=
9,19,038
X 100
47,64,000
= 19.29 %
9.5. Rate of Return
=
9,19,038
X 100
9,62,800
= 95.45 %
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6,000
1,34,792
38,44,962
Soap
9.6. Break Even Point
Fixed Cost (Per Annum)
Sl. No
1
Description
Depreciation on Machinery & Equipment @ 10%
Amount (Rs.)
31,570
2
Depreciation on Furniture & Lab Equipments@ 20%
6,000
3
Rent
4
40% of other Expenses excluding Rent/Transport
5
40% of Salary & Wages
2,31,840
6
Interest on Total Investment @ 14% per annum
1,34,792
1,44,000
60,000
Total
6,08,202
B.E.P
=
6,08,202
X 100
6,08,202 + 9,19,038
= 39.8 %
ADDRESSES OF MACHINERY & SUPPLIERS
1 M/s. Atas Engineering Works
Diwan Hall, Chandni Chowk, Delhi
2 M/s. K.S. Krishnan Associates Pvt. Ltd.
15, Community Centre, East of
Kailash, New Delhi
ADDRESS OF RAW MATERIAL SUPPLIERS
1 M/s. A. K. Enterprises
No. 580 A, Main Road, Chirag
Delhi, Near Shiv Mandir, Delhi - 17
2 M/s. Ram Chemicals & Co.
Tilak Bazar, Delhi – 06
3 M/s. Mahalaxmi Micron
Runwad, Chhota Udepur,
Vadodara - 165
4 M/s. Advance Surfactants India Limited 511/2/1, Rajokri, Near- Radisson
Hotel, , New Delhi - 38
5 M/s. Agrawal Chemicals
95/1, GIDC Estate, Okha , P.S.
Ahmedabad (Gujarat )
6 M/s. Averest Chemicals Steel Industries
265, Samuel Street, Mumbai
7 M/s. Prakash Chemicals Pvt. Ltd.
Induchacha House, Opp. Chhani
Octroi Naka, Chhai, Vadodara - 02,
8 M/s. Vinod Minerals & Chemicals
G-4, Avinash Mansion, 16/82, Joshi
Road, Karol Bagh, New Delhi - 05
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