MALLEABLE IRON CASTING
PRODUCT CODE
: 33111200
QUALITY AND STANDARDS
: As per ISI specification
PRODUCTION CAPACITY
Value
: 500 MT
: Rs. 3,29,00,000/-
MONTH AND YEAR
OF PREPARATION
: June, 2014
PREPARED BY
: Dr. Amarnath
Assistant Director (Metallurgy)
1. INTRODUCTION
The term Malleable Iron includes ferritic (or standard) malleable iron and
pearlitic malleable iron. In commercial practice, the unqualified term “malleable
iron” refers to the ferritic material. There are two types of ferritic malleable iron,
namely, black heart and white heart. The black heart material has a matrix of ferrite
with interspersed nodules of tempered carbon. The white heart type has a different
form of tempered carbon and usually contains some combined carbon, because of its
composition and method of manufacture. “Cupola Malleable Iron” is a ferritic grade
produced by cupola melting for pipe fitting and similar thin section castings.
Because of lower strength and ductility, cupola malleable usually is not specified for
engineering castings. Pearlitic malleable iron is designed to have combined carbon in
the matrix resulting in higher strength and hardness than is available in ferritic
malleable iron.
Malleable cast iron is better suited for use in bridges, railways lamp-post
bracket, motor trucks and lorry parts. Pipe-fittings like elbow tee, reducing socket,
bush, plug, caps, cross, check nut, short bend, 3-way elbow, 4-way tee etc. are used
at places where strength and malleability both are required. Unfortunately malleable
casting is at a stage of infancy in our country. It has been observed that a large
number of parts can be made of malleable iron, if facility is readily available.
2. MARKET POTENTIAL
Malleable cast iron has been accepted by industries as reliable engineering material.
Even though the use of malleable cast iron is limited to only a few industries like
pipe fittings and auto parts in our country, it can be extended to even bicycle parts,
sewing machines and other allied items in future. These industries are localized in
Punjab, Haryana and around Delhi. The foundry industry, mostly cupola based, are
-222-
Malleable Iron Casting
located in clusters. Howrah belt has the largest concentration of foundry units and
accounts over 20 % of country output of grey cast iron. Even though grey cast iron
foundries are spread throughout the country, the important clusters of grey iron
foundries are Howrah, Rajkot, Agra, Varanasi, Batala, Ahmedabad, Coimbatore,
Ludhiana, Jalandhar, Chennai, Kolhapur, Belgaum, Baroda, Pune, Mumbai and
Bangalore. Delhi/NCR too has good concentration of grey iron foundry. Hence, at
least 40% of these industries can be motivated to include malleabilising treatment
too. Due to liberalized government policies malleable casting units has to grow
rapidly. Keeping in view the future trend the demand for malleable cast iron is
expected to rise in years to come.
3. BASIS AND PRESUMPTIONS
This project is made on the basis of the following presumptions:
i.
It is assumed that the unit will be viable at 75% efficiency on single shift basis
considering 6 working days per week.
ii.
The rate of interest in the scheme is taken at 11.5 % for both fixed and
working capital. Due to liberalization and competition among banks, lower
rate of interest is possible in future.
iii.
The prices of machinery and equipments are approximate which are ruling
locally at the time of preparation of the project. When a tailor-cut project is
prepared the necessary changes are to be made at the local level.
iv.
The cost of staff and labor is approximate which is ruling locally at the time
of preparation of the profile. When a tailor-cut project is prepared the
necessary changes are to be made.
v.
There is a 5% burning loss in the project.
vi.
BEP in the scheme has been calculated on the basis of full capacity utilization.
4. IMPLEMENTATION SCHEDULE
The project can be implemented in a period of 16 to 18 months by performing
the various activities in a systematic manner and simultaneous application of
various common activities as mentioned below;
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
Preparation of project reports
Provisional registration
Selection of site
Arrangement of finance/loans
Land acquisition & construction of building
Machinery & equipment procurement
Recruitment of staff & labour
Installation of machinery
Trial production
Commercial Production
-223-
1st month
2nd month
2nd month
3rd – 5th month
6th – 9th month
10th – 13th month
14th month
15th month
16th month
16th month
Metallurgy Division
5. TECHNICAL ASPECTS
5.1. Process of Manufacturing
The project is envisaged to produce pearlitic malleable iron cast iron
manufactured in oil fired rotary furnace. Cupola malleable generally referred to as
ferritic malleable iron is not specified for engineering casting due to its lower
strength and ductility. There are two stage of manufacturing malleable cast iron.
i. Manufacture of white cast iron
ii. Its subsequent heat-treatment either in coke fired/oil fired or electrically
heated furnace for malleabilising. In pearlitic cast iron carbon is in combined
form. The purpose of malleabilising treatment is to convert this into nodular
form. It takes about 5–7 days of stage heating in order to achieve required
microstructure. After heat treatment, the product is sent to machine shop for
proper finishing, machining and threading etc. The product is dispatched
after galvanizing and painting as desired by buyers.
5.2. Quality Control and Standards
A fully annealed malleable casting contains 2.0 to 2.5 per cent graphite
carbon which is equivalent to about 6 to 7.5 % by volume. Because of graphite, the
carbon contributes nothing to the strength of the casting, those with lesser amount of
graphite are somewhat stronger and more ductile than those containing greater
amount.
Gray Cast Iron
(ASTM A48)
Nominal Composition
Uses
(By weight)
C- 3.4, Si -1.8, Mn- 0.5
Engine Cylinder Block, Flywheel.
Gearbox Cases, machine-tool bases
White Cast iron
C- 3.4, Si -0.7, Mn- 0.6
Bearing Surfaces
Malleable Iron
(ASTM A47)
C- 2.5, Si -1.0, Mn- 0.55
Axle bearing, track wheel,
Automotive crankshaft
Name
The typical chemical composition of standard malleable iron as compared
with that of gray iron and steel castings is listed as follows.
Elements
Carbon %
Malleable Iron
2.00-2.65
Gray Iron
2.50 - 3.75
Medium Carbon Steel
0.20 – 0.50
Silicon %
1.40- 0.90
3.00 – 0.25
0.80 – 0.20
Manganese %
Less than 0.55
0.36- 1.00
0.50 – 1.00
Phosphorus %
Less than 0.18
0.10 – 1.05
Less than 0.05
Sulphur %
Less than 0.18
0.70 -0.15
Less than 0.06
The Bureau of Indian Standards has also brought out specifications for
malleable iron as follows:
Malleable Pipefitting
BIS 1879:1975
White and Black
BIS 2107:1977
Malleable Iron Castings
BIS 2100:1977
-224-
Malleable Iron Casting
5.3. Production Capacity
Quantity – 500 MT (per annum); Value – Rs. 3,29,00,000/-
5.4. Motive Power
Total requirement is about 30 H.P.
5.5. Pollution Control
Foundry industry has a share in the present environmental degradation &
therefore No Objection Certificate (NOC) is required from State Pollution Control
Board.
There are mainly two methods for pollution control in foundry industries:
 By exploiting the meteorological and topographical conditions.
 By using various equipments for cleaning & dispersion of foundry emission.
5.6. Energy Conservation
Use of optimum energy is the need of hour for any enterprise. Hence
conservation efforts are needed to decrease cost of the production and pollution too.
Energy audit should be integral part of the activity of management.
The factors which affect the fuel economy in industrial furnaces may be stated
as follows:
i.
Complete combustion with minimum excess air.
ii.
Proper heat distribution.
iii.
Operation at desired temperature
iv.
Reducing heat loss from openings.
v.
Minimizing wall thickness.
vi.
Waste heat recovery from fuel gas.
For electricity conservation machine tools should be individually motorized
so that energy may be saved when machines are not in use. Use of lubrication and
proper maintenance of machine will further save energy.
6. FINANCIAL ASPECT
6.1. Fixed Capital
Land & Building:
S.N.
Description
Rent per month(Rs.)
1.
Covered Area 4000 ft2 @ Rs.10.0 per ft2
40,000/-
2.
Uncovered area 6000 ft2 @ Rs. 8.0 per ft2
48,000/-
Total Rent
-225-
88,000/-
Metallurgy Division
6.1.1. Machinery and Equipments
S.
N.
(a)
Production Unit
(i)
Casting and Annealing Shop
1.
Rotary furnace of 1 MT capacity with 5HP motor
2
5,00,000
2.
Core sand mixer, 100 kg capacity with 2 HP motor
1
55,000
3.
Gyrator Sieve shaker of 24” width with 2 HP motor
1
60,000
4.
Muller of 100 kg cap. With 2 HP Motor
1
75,000
5.
Moulding machine equipped with 3 HP motor
4
3,20,000
6.
Coal fired core baking oven of size 2m x 2m x 3.5m
1
60,000
7.
Oil fired annealing furnace of size 2m x 4m x 3.5m
with 5 HP motor and fan arrangement.
1
2,50,000
(ii)
Description of Machine
Quantity
Amount
(Rs)
Machine Shop
8.
6” lathe machine with 3 HP motor
1
1,00,000
9.
24” stroke shaper machine with 3 HP motor
1
1,50,000
10.
1” Capacity drill machine with 1 HP motor
1
35,000
11.
8” capacity wheel double ended grinder with
2 HP motor
2
50,000
12.
Flexible shaft grinder with 1 HP motor
(b)
Testing Equipments
13.
Rockwell Hardness testing machine
1
75,000
14.
Weighing scale
1
20,000
15.
Thermocouple
LS
10,000
16.
Chemical Testing Equipments with accessories
LS
Total
(c)
Diesel generating set of 10 KVA
(d)
Pollution Control Equipments
50,000
(e)
Energy Conservation Facilities
50,000
21,75,000
1
Total (i + ii)
15,000
16,70,000
2,00,000
3,05,000
1,00,000
Total (a, b, c, d, e)
(f)
Electrification and Installation Charges @ 10%
(g)
Office equipment and furniture
2,17,500
Preoperative expenses like legal, establishment, traveling,
Startup consultancy, telephone, electricity connections etc
Total Fixed Capital
L.S.
1,75,000
TOTAL
25,67,500
Rs. 2,00,000/-
Rs. 27,67,500/-
-226-
Malleable Iron Casting
6.2. Working Capital (per month)
6.2.1. Personnel
S.No. Designation
Nos.
Salary (Rs.)
Total (Rs.)
a)
Administration
1
Engineer cum Manager
1
12,500/-
12,500
2
Sales Executive
1
12,000
12,000
3
Supervisor
2
9,500
19,000
4
Accountant cum clerk, typist
1
8,500/-
8,500
5
Peon-cum-watchman
2
7,500/-
15,000
b)
Workshop
6
Core Maker
4
9,500/-
38,000
7
Furnace operator
2
9,000/-
18,000
8
Moulder
6
8,500
51,000
9
Machine Operator
4
8,000
32,000
10
Fitter
1
8,000
8,000
11
Helper
4
7,500/-
30,000
Total
2,44,000
Add perquisites etc. @ 15%
36,600
Total
2,80,600
6.2.2. Raw Materials including Packaging Materials
Pig iron
30 MT @ Rs, 33,000/ MT
Rs. 9,90,000
Steel scrap
20 MT @ Rs. 26,000/MT
Rs. 5,20, 000
Ferro Alloys, Fluxes, Limestone, etc.
LS
Total
Rs. 1,00,000
Rs. 16,10,000/-
6.2.3. Utilities
Power
3000 Unit @ Rs.6.50/unit
Rs. 19,500
Water
LS
Rs. 2,000
Hard Coke
4 MT @ Rs.14,000/MT
Rs. 56,000
Steam Coal 8 MT @ Rs. 9,000/MT
Rs. 72,000
Furnace Oil 2000 ltr. @ Rs. 51/Ltr
Rs. 1,02,000
Total
-227-
Rs. 2,51,500/-
Metallurgy Division
6.2.4. Other Contingent Expenses (Per Month)
S.No.
Particular
Amount (In Rs.)
1.
Rent
88,000
2.
Transport expenses
2,500
3.
Stationery and Postage etc
1,500
4.
Telephone & fax etc
1,500
5.
Insurance
1,000
6.
Advertisement & Publicity
8,000
7.
Repair, Maintenance and Replacement
8.
Consumable stores
9.
Miscellaneous
10,000
1,500
1,000
1,15,000
Total
6.2.5. Total Recurring Expenditure (per month)
Rs. 22,57,100/-
6.3. Total Capital Investment
Fixed Capital
Working Capital for 3 months
Rs. 27,67,500
Rs. 67,71,300
Total
Rs. 95,38,800/-
Machinery Utilisation
75% machinery utilization is considered for achieving the projected capacity
of finished products. Bottleneck is on machining & heat treatment of casted parts.
Melting will be performed 2–3 days per week as per the requirement of the market.
7. FINANCIAL ANALYSIS
7.1. Cost of Production (per annum in Rs.)
1. Total Recurring Cost
2. Total Depreciation (a+b+c)
a. Depreciation on Machinery and Equipment
@ 20% (for Rs 15,82,500)
b. Depreciation on furnaces @ 25% ( for Rs. 8,10,000)
c. Depreciation on office equipments @ 20 % (for Rs.1,75,000)
3. Interest on total Capital @ 11.5 %( Approx.)
Total
2,70,85,200
5,54,000
3,16,500
2,02,500
35,000
10,96,962
2,87,36,162
7.2. Turnover (per annum)
S.N.
1.
2
Item
Finished malleable iron parts
Scrap/ Rejected items
Quantity(MT)
500
70
-228-
Rate/ton
63,000
20,000
Total
Value (Rs.)
3,15,00,000
14,00,000
3,29,00,000
Malleable Iron Casting
7.3. Net Profit (per annum)
=
=
=
Turnover – Cost of Production
Rs. 3,29,00,000 - 2,87,36,162
Rs. 41,63,838/-
7.4. Net Profit Ratio
=
Net profit per year
X 100
Turnover per year
=
41,63,838
X 100
3,29,00,000
= 12.66 %
7.5. Rate of Return
=
Net profit per year
X 100
Total Capital Investment
=
41,63,838
X 100
95,38,800
= 43.65 %
7.6. Break-even Point
Fixed Cost
(Rs.)
Rent
10,56,000
Total Depreciation
5,54,000
Total Interest
10,96,962
Insurances, Taxes, etc.
12,000
40% of salary and wages
13,46,880
40% of other Contingent expenses
(Excluding rent & Insurance)
1,24,800
Total
41,90,642
B.E.P
=
Fixed Cost
X 100
Fixed Cost + Net Profit
=
41,90,642
X 100
41,90,642 + 41,63,838
= 50.16%
-229-
Metallurgy Division
Addresses of Machinery and Equipment Suppliers
1. M/s. Doeba Electric Welding Works, 185 Phase I, Block C,
Naraina Industrial Estate, New Delhi
2. M/s. Pioneer Equipments Company Pvt. Ltd, 432-Padra Road, Baroda
3. M/s. Kulkani Foundry E-209, Naraina Ind. Area, New Delhi
4. M/s. Wesman Eng. Company Pvt. Ltd. 7, Ganesh Chandra Avenue, Kolkata
5. M/s. Foundry Accessories 7-Omprakash, 90-Kazi Sayed Street, Mumbai-3
6. M/s. Inspection Instruments Corpn. 7, Sheriff Dovji Zakaria Bldg, Mumbai-3
7. M/s. Engineering & Industrial Foundry Company, Ram Nagar, Coimbatore
8. M/s. National Mechanical Works 72-A, M.M. Road, Paharganj, Delhi
9. M/s. Ashoka Machine Tools Corporation, Mayapuri Industrial Estate,
New Delhi-64
10. M/s. Toshniwal Brothers 3E/8, Jhandewalan Extension, New Delhi-110005
11. M/s. Chola Ram Om Prakash 578 Ishwar Chavan, Khari Bawli, Delhi-6
12. M/s. Greaves Cotton amd Co. Ltd.201, Nirmal Tower, 26 Barakhamba Road,
New Delhi-110001
13. M/s. Machinery Pattern and Foundry India Ltd., Shed No. 12, Noida, (U.P.)
Raw Material will be procured from IOC, BPCL, SAIL and open market.
-230-