Profile No.

: 237 NIC Code:8107

CALCINED BAUXITE

1. INTRODUCTION:

India currently imports 60% of its Calcined Bauxite from China. Spurred by expansion of
domestic steel production, a scarcity of acceptable quality of bauxite from China and raising
import cost, drives are now under way in India to produce high grade bauxite from domestic
bauxite sources. At present, India is very minor producer of non-metallurgical bauxite, despite
having occurrence of high grade bauxite in west coast and central India. This is attributed to
limited effort to test high grade bauxite occurrence in region outside the main bauxite producing
area around Gujarat. The product has good demand growth, so there is good scope for new
entrepreneurs.

2. PRODUCT AND ITS APPLICATION:

Calcined bauxite is an important raw material for two main products, refractory and abrasives.
Smaller volumes are consumed in other applications including proppant, welding fluxes and
antiskid surface. While the process of calcining bauxite for each of these applications is
fundamentally the same (i.e. it involve the same basic burning process), the physical and
chemical characteristic of each grade vary. Calcined bauxite is classified by the major end use
abrasive and refractory.

3. DESIRED QUALIFICATIONS FOR PROMOTER:

Promoter must have basic knowledge of mineral process and operation and quality of bauxite. It
is desirable to have Graduate in any Science. If promoter having experience in refractories
industry, it will be added qualification.
4. INDUSTRY LOOK OUT AND TRENDS

With production, consumption, revenue (million USD), market share and growth rate of Calcined
Bauxite in these regions, from 2012 to 2022 (forecast), covering North America, Europe, China,
Japan, Southeast Asia, India Global Calcined Bauxite market competition by top manufacturers,
with production, price, revenue (value) and market share for each manufacturer; the top players
including Futong Industry, LKAB Minerals, Baud Minerals, Plomp Mineral Services, Omnicrete
On the basis of product, this report displays the production, revenue, price, market share and
growth rate of each type, primarily split into <1mm , 1-3mm, 3-5mm, >5mm On the basis of the
end users/applications, this report focuses on the status and outlook for major applications/end
users, consumption (sales), market share and growth rate for each application, including
Abrasive, Cement, Metallurgy, Refractory.

5. MARKET POTENTIAL AND MARKETING ISSUES, IF ANY:

The vast resource of laterite and bauxite occurs in various parts of the Country and India
occupies 5th position in the World bauxite map. Despite availability of large bauxite resources
there are limited occurrences of high grade bauxite deposits. Gujarat occupies the top position in
resources and production of high alumina bauxite suitable for valued added refractory, abrasive
industry. However, this bauxite has significant calcium content, which deteriorates its value for
refractory industry. Some high alumina and high titania deposits are found in Maharashtra and
Central India (Chhattisgarh, Jharkhand & Madhya Pradesh) region and small scattered deposits
are also exploited in various parts of the country. In many cases the non-metallurgical grades are
specially selected high quality bauxite from metal grade deposits for which normally higher prices
can be obtained. With the fast depletion of good quality bauxite resources, it has become
necessary to use suitable beneficiation process, mainly to bring down iron and titania content in
Indian bauxite. In the current scenario, China is the leading country to supply refractory bauxite
in the World after Russia, India and Guyana. Guyana is the main competitor to China in the
International market and further new production from UC Rusal due on stream in 2012. After the
China, Russia, India and Guyana, other producers of refractory grade bauxite in the world are
Brazil, Greece, Malaysia, and Australia. Brazil has small refractory grade production for the
domestic market and also for proppant production. In the present paper, the high grade bauxite
deposits of India are highlighted and the Indian Calcined bauxite is compared with world
producers.

India is 5th largest resources of bauxite in the World and comprises more than 3000 million ton
resources. Most of these deposits, particularly those located in the Eastern Ghats of India are
suitable for alumina production. There are limited resources of high grade bauxite, suitable for
refractory-abrasive industries. In the state of Gujarat high alumina, low iron and low titanium
bauxite occur and they are widely used for calcination for refractory and abrasive industries,
although this bauxite is contaminated with calcium content. The high alumina bauxite of
Chhattisgarh, Madhya Pradesh, Jharkhand and Maharashtra, generally have high titania and also
significant iron content. Some of the high grade bauxite deposits of Chhattisgarh and Jharkhand
are not accessible due to forest and tribal issues however, some Gujarat deposits suitable for
value added non-metallurgical industry, is already getting exhausted. In the present paper,
various aspects of calcined bauxite are discussed. India’s present position is compared with
leading high grade bauxite producers of World i.e. China and Guyana. Based on
 
6. RAW MATERIAL REQUIREMENTS:

Iron oxide levels must be lower than 2.5%, compared with ten times that for metallurgical
grades, and the alkali content has to be minimal. Deposits which can satisfy these requirements
are not widespread; hence there is relative scarcity of refractory grade bauxite sources.

Utility: Power 1000 units: Fuel 90 liters

7. MANUFACTURING PROCESS:

Bauxite calcination plant is established near the mines or set up near the market. Bauxite of
different grades is tested and then is crushed manually or by jaw crusher in smaller sizes in
inches. Oil fired vertical shaft kiln (VSK)refractory lining inside portion having about 33 meter
conical vertical chimney, is used for the firing or calcination of bauxite at a temperature of
about900 dig C. The chimney of VSK is so arranged that the speed of exhaust gases and fumes
in the chimney may travel @ 9 to 12m/sec. The diameter of chimney is so calculated that the
lower/bottom portion of chimney is one third of the total stack of chimney. Skip bucket with
rope, which is driven by electric motor, is arranged for loading of stone pieces for firing of
calcination. These stone pieces are loaded from the top of kiln; this process is done regularly as
per the requirement of stone calcination.

8. MANPOWER REQUIREMENT:

The enterprise requires 12 employees as detailed below:

Designation of Monthly
Sr. No. Number of employees required
Employees Salary ₹
Year-1 Year-2 Year-3 Year-4 Year-5
1 Machine Operators 12,000 2 2 2 3 3
2 Helpers 8,000 6 6 8 8 10
1 Sales/ Purchase man 10,000 2 2 2 1 1
2 Accounts/Stores Asst 12,500 1 1 1 1 1
3 Office Boy 9,500 1 1 1 1 1
Total 12 12 14 14 16

9. IMPLEMENTATION SCHEDULE:

The project can be implemented in 4 months’ time as detailed below:

Sr. No. Activity Time Required

(in months)
1 Acquisition of premises 1.00
2 Construction (if applicable) 2.00
3 Procurement & installation of Plant & 1.00
Machinery
4 Arrangement of Finance 2.00
5 Recruitment of required manpower 1.00
Total time required (some activities shall run 3.00
concurrently)
10. COST OF PROJECT:

Total project cost of is 64.00 lakhs.

Sr. No. Particulars ₹ in Lacs

1 Land 4.50
2 Building 8.50
3 Plant & Machinery 27.00
4 Furniture, Electrical Installations 3.00
Other Assets including Preliminary /
5 2.00
Pre-operative expenses
6 Working Capital 19.00
Total 64.00

11. MEANS OF FINANCE:

Bank term loans are assumed @ 75% of fixed assets and current assets. The proposed funding
pattern is as under:
Sr. No. Particulars ₹ in Lacs
1 Promoter's contribution 16.00
2 Bank Finance 48.00
Total 64.00

12. WORKING CAPITAL CALCULATION:

The project requires working capital of 19.00 lacs as detailed below:

Sr. No. Particulars Gross Amt Margin % Margin Amt Bank Finance
1 Inventories 8.00 25.00 2.00 6.00
2 Receivables 8.00 25.00 2.00 6.00
3 Overheads 3.00 100% 3.00 -
4 Creditors - 40% - -
Total 19.00 7.00 12.00

13. LIST OF MACHINERY REQUIRED:

Sr. No. Description Qty.

Rate (₹) Value (₹)
Machinery and Equipments (All
Indigenous)
 (a) Production Unit
1 Oil fired vertical shaft kiln with Refractory lining 2 No. 7,50,000 15,00,000
inside portion of kiln having 33 meter height
chimney made of steel Fabricated plate form
type having all arrangement with skip bucket and
burners etc. Capacity-30 Ton per day
2 Jaw crusher for crushing the stone or pebbles 1 No. 1,25,000 1,25,000
with 10 HP motor and starter etc.
Sr. No. Description Qty.
Rate (₹) Value (₹)
3 Rotary self-driven for sieving the bauxite having 1 No. 50,000 50,000
different mesh sizes with 1.5 HP motor and
starter etc.
4 Wheel barrow for handling of raw material and 4 Nos. 15,000 60,000
finished product
5 Balance for weighing up to 500kg. 2 Nos. 5,000 10,000
6 Overhead water tank; capacity 1000 liters. Water 1 No. 30,000 30,000
storage having well boring jet with 2 HP motor
and starter, and pipe line fitting etc.
7 Beg sewing machine 1 No. 30,000 30,000
8 Generator set capacity 10 kVA 1 No. 50,000 50,000
9 Other tools, fixtures, dies, hand tools, racks etc. L.S. 20,000 20,000
(b) Testing Equipments L.S. 10,000 10,000
(c) Pollution Control Equipments
1 Exhaust Fan 5 Nos. 3,000 15,000
2 Dust catcher 1 No. 40,000 40,000
3 Scrubber 1 No. 1,80,000 1,80,000
4 Ducting L.S. 15,000 15,000
5 Fencing for plantation L.S. 30,000 30,000
6 Hand gloves, eye goggles etc. L.S. 10,000 10,000
(d) Energy Conservation Equipments L.S. 10,000 10,000
TAXES AND TRANSPORTATION 5.15%
Subtotal Machinery and Equipments 27,00,000
Furniture / Electrical installations
a) Office furniture LS 50,000 50,000
b) Stores & Spares LS 30,000 50,000
c) Computer & Printer 1 No 1,00,000 1,00,000
subtotal furniture and electrical installations 2,00,000
Other Assets
a) Licenses and other fees 2 Nos. 50,000 1,00,000
sub-total Other Assets 1,00,000
Total 30,00,000
All the machines and equipment are available from local manufacturers. The entrepreneur needs
to ensure proper selection of product mix and proper type of machines and tooling to have
modern and flexible designs. It may be worthwhile to look at reconditioned imported machines,
dies and tooling. Some of the machinery and dies and tooling suppliers are listed here below:

 Kamdhenu Agro Machinery

Plot No. 6, Near Power House,
Wathoda Road, Wathoda
Nagpur - 440035
Maharashtra, India

 Future Industries Private Limited

Shed No. 15, Ambica Estate,
Corporation Municipal Plot,
Opposite Sadvichar Hospital,
Naroda, Ahmedabad - 382330,
Gujarat, India

 The Global Pharma Equipments

Star Industrial Estate,
D-32, Naik Pada,
Near Hanuman Mandir,
Opposite Dwarka Industrial Estate,
Vasai East, Vasai - 401208,
Maharashtra, India

14. PROFITABILITY CALCULATIONS:

Financial statements (Cost of production @ 80 %)

Sr. No. Particulars Rs.
A. Variable cost
1 Raw material and utilities 22,00,000
 2 Spares and maintenance 2,40,000
3 Selling expenses 3,10,000
Total variable cost (A) 27,50,000
B. Fixed cost
1 Salaries and wages 16,60,000
2 Interest on term loan and working capital loan @ 10% 4,80,000
3 Depreciation 3,90,000
4 Administrative expenses 1,60,000
Total fixed cost (B) 26,90,000
C. Total cost of production (A+B) 54,40,000
D. Selling price per kg. (in Rupees) 20
E. Annual sales turnover 60,00,000
F. Net profit before tax (E-C) 5,60,000
G. Breakeven point in % 56.6%

Five Year Projections:

Sr. No. Particulars UOM Year-1 Year-2 Year-3 Year-4 Year-5

1 Capacity Utilization % 50% 50% 60% 70% 80%
2 Sales ₹. In Lacs 37.50 37.50 45.00 52.50 60.00
Raw Materials & Other direct
3 ₹. In Lacs 13.75 13.75 16.50 19.25 22.00
inputs
4 Gross Margin ₹. In Lacs 23.75 23.75 28.50 33.25 38.00
5 Overheads except interest ₹. In Lacs 9.00 9.00 10.00 11.60 11.60
6 Interest @ 10 % ₹. In Lacs 4.80 4.80 3.50 2.80 1.60
7 Depreciation ₹. In Lacs 9.00 8.00 6.50 4.20 3.00
8 Net Profit before tax ₹. In Lacs 1.05 1.95 8.50 14.65 21.8
The basis of profitability calculation:
The growth of selling capacity will be increased 10% per year. (This is assumed by various
analysis and study, it can be increased according to the selling strategy.)

Energy Costs are considered at Rs 7 per Kwh and fuel cost is considered at Rs. 65 per litre. The
depreciation of plant is taken at 10-12 % and Interest costs are taken at 14 -15 % depending on
type of industry.

15. BREAKEVEN ANALYSIS:

The project shall reach cash break-even at 48.42 % of projected capacity as detailed below:

Sr. No. Particulars UOM Value

1 Sales at full capacity ₹. In Lacs 75.00
2 Variable costs ₹. In Lacs 27.50
3 Fixed costs incl. interest ₹. In Lacs 26.90
4 BEP = FC/(SR-VC) x 100 = % of capacity 56.6%

16. STATUTORY / GOVERNMENT APPROVALS

As per the allocation of business rules under the Constitution, labour is in the concurrent list of
subjects. It is dealt with by the MOLE at the Central and Departments of Labour under State
Governments in respective States / UTs. The MOLE has enacted workplace safety and health
statutes concerning workers in the manufacturing sector, mines, ports and docks and in
construction sectors.

Further, other Ministries of the Government of India have also enacted certain statutes relating
to safety aspects of substances, equipment, operations etc. Some of the statutes applicable in
the manufacturing sector are discussed below :

The Static and Mobile Pressure Vessels (Unfired) Rules, 1981

These (SMPV) Rules are notified under the Explosives Act, 1884. These rules regulate storage,
handling and transport of compressed gases. These rules stipulate requirements regarding
construction and fitments, periodic testing, location, fire protection, loading and unloading
facilities, transfer operations etc. in respect of pressure vessels whose water capacity exceeds
one thousand litres. These rules are enforced by the Chief Controller of Explosives under the
Ministry of Industry and Commerce, Govt. of India (PESO).

The Manufacture, Storage and Import of Hazardous Chemicals Rules (MSIHC), 1989
These MSIHC Rules are notified under the Environment (Protection) Act, 1986. These rules are
aimed at regulating and handling of certain specified hazardous chemicals. The rules stipulate
requirements regarding notification of site, identification of major hazards, taking necessary steps
to control major accident, notification of major accident, preparation of safety report and on-site
emergency plan; prevention and control of major accident, dissemination of information etc.
These rules are notified by the Ministry of Environment and Forests (MOEF) but enforced by the
Inspectorates of Factories of respective States / UTs in the manufacturing sector.

The Factories Act, 1948 and State Factories Rules

The Factories Act, 1948 is very comprehensive legislation dealing with the matters of safety,
health and welfare of workers in factories. The Act places duties on the occupier to ensure
safety, health and welfare of workers at work. Some of the salient provisions of the Act include:

 Guarding of machinery
 Hoists and Lifts; Lifting Machines and Appliances
 Revolving Machinery
 Pressure Plant
 Excessive Weight
 Protection of Eyes
 Precautions against dangerous fumes, gases etc.
 Explosive or inflammable dust, gas etc.
 Precautions in case of fire
 Safety of buildings and machinery
 Permissible limits of exposure of chemical and toxic substances
 Entrepreneur may contact State Pollution Control Board where ever it is applicable.

17. BACKWARD AND FORWARD INTEGRATIONS

Chemical companies often become integrated and undergo other activities outside the chemical
industry. Increased competition prompts many companies to reduce supply chain costs by
looking outside the chemical sector at suppliers and customers. While most companies within the
chemicals sector primarily produce chemicals, some companies also conduct other manufacturing
activities. The exact proportion of chemicals sector companies that are integrated with other
sector activities is unknown, but many companies actively seek vertical integration. Many
manufacturers pursue vertical integration to secure suppliers and customers for their products.

Mergers and acquisitions are a common way for companies to undertake new chemical ventures.
By purchasing their chemical suppliers, some manufacturers secure future chemical feedstock for
their products or other chemicals that they use in manufacturing. The company making the
purchase obtains valuable expertise and equipment. Some mining and petrochemical production
is more cost-effective when integrated within a chemical company.

Energy and feedstock costs are often a significant expense for chemical companies. Integrating
chemical production with activities that secure supplies of chemical feedstock and energy is
relatively common as chemical companies grow. Chemical companies are located near mines, oil
fields, ammonia factories and water supplies. This reduces transportation costs and increases the
reliability of supplies by reducing the distance between feedstock and the factory.

Some companies, such as Sino-Coking Coal and Coke Chemical Industries Incorporated, own
their mines. BHP Billiton operates a broad range of mines and is primarily a mining company. It
does, however, also produce petrochemical feedstock for the chemical industry and therefore
operates within the chemical industry as well. These companies technically operate within both
the chemical and mining industries in their normal business operations.

Integrating a chemical company with other activities provides several direct benefits for the
company and is becoming increasingly common. High energy costs necessitate greater control of
energy resources and minimal reliance on expensive transportation. Chemical companies
experience volatile profitability due to fluctuations in feedstock and energy expenses. Some
companies control this volatility through careful supply chain management and by charging
supply surcharges. Actively researching and developing alternative feedstock and energy supplies
helps the company reduce costs.
Vertical integration supports these activities by eliminating redundant activities at multiple
companies and increasing efficiency. By consolidating activity among multiple, similar operations,
chemical companies achieve cost savings that contribute to higher profitability. End products are
often very profitable, and some chemical companies purchase their former customers to take
advantage of the marked-up prices of products further along in the supply chain.

Integration may become more common for many chemical companies as competition
strengthens and traditional feedstock becomes more expensive. Market demand for chemical
feedstock increases as emerging market economies grow and result in increased consumer
spending around the world.

18. TRAINING CENTERS AND COURSES

There is no such training required to start this business but, basic chemical bachelor’s degree is
plus point for enterpriser. Promoter may train their employees in such specialized institutions to
grow up the business. There are few specialised Institutes provide degree certification in
chemical Technology, few most famous and authenticate Institutions are as follows:

 Department of chemical LD college of engineering

No.120, Circular Road, University Area, Navrangpura,
Opposite Gujarat University, Ahmedabad, Gujarat 380015

 MIT College of chemical Engineering, Pune

Gate.No.140, Raj Baugh Educational Complex,
Pune Solapur Highway,
Loni Kalbhor, Pune – 412201
Maharashtra, India

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

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.