Profile No.

: 55 NIC Code: 14104

LEATHER BELT

1. INTRODUCTION:

Leather belt is a popular item of leather used by everyone. The school going children, young
and old invariably wear a waist belt as an item of dress. It has a functional value besides
being a fashion item. The actual use of this belt is to keep the pant tight at the waist. They
are made in different widths and lengths to suit customers of all age groups and build. The
leather used is plain or chrome tanned cowhides of even substance in different colors and
shades of mainly black and brown. The buckles used are in different attractive designs and
plated. They are detachable and fitted as per customer’s choice. Leather belts are more
comfortable in use and long lasting than belts made of other materials. The manufacturing
process of these belts are very simple. This item can easily be fabricated by small
scale/cottage scale units

2. PRODUCT & ITS APPLICATION:

The term "leather belt" can be very misleading. It can be used to describe many different
types of belts that vary in quality and price. All these belts look like a simple strip of leather
with a buckle, but conceptual differences abound in their manufacturing process. Depending
on the exact material, a leather belt can exhibit different levels of strength, durability and
flexibility.
Synthetic Leather Belt: The synthetic leather contains no leather at all. It is made out of
polymer that gives the appearance and feel of leather. Their manufacture is very easy, which
makes them highly affordable and accessible in all sorts of colors, designs, and patterns.
Faux leather belts are a good choice for those who wish to swap different belts with their
wardrobe. They are not very durable, but if you do not use them often, they can last for
years.
 Bonded Leather Belt: Bonded leather belts represent the most affordable real leather option
on the market. These belts are created by pressing together leather waste scraps. The small
leather fibers are glued together and treated to look like a single piece of leather. Very cost-
efficient, the process results in a cheap alternative to genuine leather belts.
 Genuine Leather Belt: Genuine leather belts contain higher-grade leather. They may still
have layers of leather scraps, but only as a fill in the middle. The outer layers are top-grain
leather, which increases its strength and durability. This type of belt is considerably cheaper
compared to one made solely out of top-grain leather. With a little maintenance, a real
leather belt can serve its purpose for a very long time.
Full Grain Leather Belt: The highest-grade leather belt, full grain leather belts are
constructed out of top-grain leather, found only on the top layers of the animal's skin. This
layer may contain blemishes, but that only adds to the belt's charm. In terms of durability,
flexibility and strength, a full grain belt is unmatched. However, one can cost as much as
several bounded leather belts. Full grain belts are a good choice for those who priorities
quality over quantity.

 Formal or Casual: Leather belts are an essential part of men's formal clothing, and a few
rules apply to choosing an appropriate one. The chosen men's formal belt should be same
color, contrast, hue, and tone as the shoes. In addition, it should measure between 3 and
4.5 cm wide and 3 mm thick. Men's casual belts are not that constrictive and do not need to
be leather at all. Still, many casual leather belts can be an interesting addition to your
wardrobe.

3. DESIRED QUALIFICATIONS FOR PROMOTER:

Graduate in any graduate.

4. MARKET POTENTIAL AND MARKETING ISSUES, IF ANY:

The market for belts is estimated at Rs 8.5 billion which includes leather belts, leather
lookalikes and fabric belts. Leather belts command the highest market share of 41%,
followed closely by leather lookalikes at 31% and fabric belts at 28%. Leather belts are
mostly purchased from organized formats owing to the assurance factor attached to their
quality. Presence of brands is limited and there are a handful of branded players which offer
belts as a part of their extended portfolio. In India, leather industry is in a predominant
position with substantial export revenue generation and thereby providing economic
growth. Indian leather industry is one among the top 8 industries for export revenue
generation in India, holding 10% of the global raw material, and 2% of the global trade.
India enjoys competitive benefits such as availability of abundant raw material, cheap and
skilled labor, supporting institutions for industrial developments, and supportive domestic
market. A recent survey states that India has the largest livestock in the world. Moreover,
the country possesses the largest population of buffaloes, goat, and sheep. India also has
the world’s largest technically trained manpower in leather craft, which enables it to surpass
its competitors in the global market. The major markets for Indian Leather & Leather
Products are Germany with a share of 12.32%, the USA 11.83%, U.K. 11.57%, Italy 7.76%,
France 5.72%, Hong Kong 6.50%, Spain 5.41%, Netherlands 3.46%, China 2.99%, Denmark
1.29%, UAE 4.3%, and Belgium 1.68%.

5. RAW MATERIAL REQUIREMENTS:

The major raw materials are chrome tanned upper leather and split upper. Other required
materials are the buckle, thread, solution etc. Additionally, you will also need to arrange the
packaging consumables.

6. MANUFACTURING PROCESS:

After selecting the right leather, cut the belts of different sizes by strap cutting machine.
Additionally, skive it from the edges. Similarly, cut the lining of the same sizes of required
leather. Then, fold the skived edges. Then the lining attached by paste. After pasting the
belts, stitch them with help of stitching machine. Additionally, trim the excess of lining
properly. Then carry out the other operations like buckle attaching edge setting punching
according to the design. Finally, inspect the belts properly and then pack. Finally, you must
maintain the quality control and standards in leather belt manufacturing. Basically, you must
procure the good quality raw materials, select appropriate designs and perform strict
supervision during the manufacturing process.

7. MANPOWER REQUIREMENT:

The enterprise requires 6 employees as detailed below:

Sr. Designation of Salary Per Monthly

Number of employees required
No. Employees Person Salary ₹
Year-1 Year-2 Year-3 Year-4 Year-5
1 Machine Operators 12,000 12000.00 1 1 1 1 1
2 Helpers 8,000 16000.00 2 2 2 3 3
3 Production supervisor 15,000 0.00 0 0 0 0 0
4 Accounts/Stores Asst 12,500 12500.00 1 1 1 1 1
5 Office Boy 9,000 9000.00 1 1 1 1 1
Total 49500.00 5 5 5 6 6

8. IMPLEMENTATION SCHEDULE:

The project can be implemented in 3 months’ time as detailed below:

Sr. No. Activity Time Required

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

9. COST OF PROJECT:

The project shall cost ₹ 3.63 lacs as detailed below:

Sr. No. Particulars ₹ in Lacs

1 Land 0.00
2 Building 0.00
3 Plant & Machinery 1.50
4 Furniture, Electrical Installations 0.25
5 Other Assets including Preliminary / Pre-operative expenses 0.38
6 Margin for Working Capital 1.50
Total 3.63

10. MEANS OF FINANCE:

Bank term loans are assumed @ 75 % of fixed assets.

₹ in
Sr. No. Particulars
Lacs
1 Promoter's contribution 0.91
2 Bank Finance 2.72
Total 3.63

11. WORKING CAPITAL CALCULATION:

The project requires working capital of ₹ 1.50 lacs as detailed below:

Sr. No. Particulars Gross Amt Margin % Margin Amt Bank Finance
 1 Inventories 0.75 0.25 0.19 0.56
2 Receivables 0.38 0.25 0.09 0.28
3 Overheads 0.38 100% 0.38 0.00
4 Creditors - 0.00 0.00
Total 1.50 0.66 0.84

12. LIST OF MACHINERY REQUIRED:

A detail of important machinery is given below: Power Requirement: 3 HP

Rate Value
Sr. No. Particulars UOM Qtty
(₹) (₹ in Lacs)
Plant & Machinery /
equipments
a) Main Machinery
i. Strap cutting machine NOS. 1 25000 0.25
Upper Leather skiving
ii. Nos 1 50000 0.50
machine
iii. Sewing Machine Nos 2 22000 0.44
b)
i. Side creasing machine Nos 1 10,000 0.10
ii. Hand tools NOS. 1 21000 0.21
sub-total Plant & Machinery 1.50
Furniture / Electrical
installations
a) Office furniture LS 1 10000 0.10
b) Stores Almirah LS 1 5,000 0.05
c) Computer & Printer L. S. 1 10000 0.10
sub total 0.25
Other Assets
a) preliminary and preoperative 0.38
sub-total Other Assets 0.38
 Total 2.13

13. PROFITABILITY CALCULATIONS:

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

1 Capacity Utilization % 60% 70% 80% 90% 100%
₹. In
2 Sales 9.00 10.50 12.00 13.50 15.00
Lacs
Raw Materials & Other direct ₹. In
3 6.07 7.08 8.09 9.10 10.11
inputs Lacs
₹. In
4 Gross Margin 2.93 3.42 3.91 4.40 4.89
Lacs
₹. In
5 Overheads except interest 2.38 2.53 2.83 2.92 2.98
Lacs
₹. In
6 Interest 0.27 0.27 0.18 0.14 0.11
Lacs
₹. In
7 Depreciation 1.05 0.75 0.53 0.38 0.34
Lacs
₹. In
8 Net Profit before tax -0.77 -0.13 0.37 0.97 1.46
Lacs

14. BREAKEVEN ANALYSIS:

The project shall reach cash break-even at 63.17 % of projected capacity as detailed
below:

Sr. No. Particulars UOM Value

1 Sales at full capacity ₹. In Lacs 15.00
2 Variable costs ₹. In Lacs 10.11
3 Fixed costs incl. interest ₹. In Lacs 3.09

4 BEP = FC/(SR-VC) x 100 = % of capacity 63.17%