Detailed Project Report (DPR) on gold jewellery casting factory

GOLD JEWELLERY CASTING FACTORY [3513]

Gold Jewellery Casting is having great demand and also having a bright future scope. There is a good export potential of these products. Jewellery is broadly defined as “ornament for the body”; it is ornament which can be worn and while this definition is frequently challenged and stretched by what are often referred to as “art jewellers” or “contemporary jewellers”, the majority of jewellery can be described as being wearable ornaments, often made from high-value materials such as precious metals and gemstones. The Gems and Jewellery industry in India, like other MSME industries, is a highly fragmented industry. This characteristic of the Gems & Jewellery industry leads to a high share of the unorganized sector as compared to the organized sector. The components of jewellery include not only traditional gold but also a variety of diamond and platinum. The industry also trades in varieties of precious and semi-precious stones. Gems and Jewellery form an important part of India’s rich culture. This culture is the primary reason for a flourishing Gems and Jewellery industry in India. The numbers also support this statement. India is the largest consumer of gold, with over 20% share of the total gold consumed in the world.  The overall size of the industry is Rs. 12,400 crore. Its total exports add up to Rs. 78,100 crore annually. This comprises 4% of the global Gems and Jewellery market. India is also the largest diamond cutting and polishing centre in the world. On the domestic front the sales figure equals to Rs 73,500 crore. There are lot of advantages that India offers to the Gems and Jewellery market. India is the fastest growing branded jewellery market in the world. It is expected to grow at an annual growth rate of 40%. India also has a vast pool of highly skilled labour that is available at a low cost. Many design centres and training institutes have also blossomed. India holds a good reputation in the global market for being a top class manufacturer of jewellery. The technological environment for the industry is also advanced and comparable to the best in the world. A huge potential still remains to be harvested. To facilitate this government has allowed 100% FDI (through the automatic route), proposed Gems & Jewellery parks and supported the Gems and Jewellery Export Promotion Council in organizing the IIJS Signature, which is the largest jewellery show in Asia. Going forward the branded jewellery market is expected to grow to Rs. 10,100 crore by 2010. Exports are expected to grow from Rs. 78,100 crore in 2006 to over Rs. 1.2 lakh crore by 2012. A bright future awaits the Gems & Jewellery industry with large potential still untapped. India is the largest fabricator of gold for jewellery with more than 90% of this gold acquired for making jewellery Gold is valued in India for savings and investment purpose. It is the second preferred investment after bank deposits. This makes India the world’s largest consumer of gold in jewellery. Gold circulates within the system and roughly 30% of gold jewellery is made from recycled pieces. In India gold jewellery plays a dual role of beautifying as well as an asset. Here gold ornaments are made for every part of the body. The range of jewellery varies from religious to purely aesthetic one. Jewellery as investment and identity maker is evident from the plethora of ornaments worn by people. The settings of precious gems and stones in rings, pendants, necklaces and bracelets gained prominence due to the belief that these stones are associated with certain powers. This shows the importance of gold jewellery in Indian society. The Indian jewellery market is large and the production of gold jewellery takes place in all parts of India. It is worth over $10 billion a year, but it is largely fragmented and is not branded. Branded jewellery accounts for less than 2% by value. The rest of the market is in the hands of about 300,000 unorganised jewellers. The jewellery segment as opposed to the diamond segment is directed more towards the domestic market of India. It has lot of structural differences with the diamond segment. The jewellery retailers are generally present in all cities and they control the industry. The jewellery is manufactured in their units or it is outsourced from a lot of small units attached to them. At the distribution end, small and unbranded retailers predominate, with only a handful of branded retailers. In the middle, there are thousands of small traders whose trading relations are very private and largely invisible to the public, tending to hide information on procurement and sales destinations from their competitors. The jewellery exports instead, are more organized, have larger units and try to carry out almost all stages of production in-house to ensure better quality control.

COST ESTIMATION

Plant Capacity                                     500 GM/Day  
Land & Building                                  Rented
Plant & Machinery                               Rs. 58 Lacs
Working Capital for 1 Month             Rs. 3.62 Cr
Total Capital Investment                   Rs. 4.33 Cr
Rate of Return                                    32%
Break Even Point                                45%



INTRODUCTION    
TYPES OF GOLD JEWELLERY    
VARIETIES OF JEWELLERY ARE USED AS FUNCTIONAL OR TO ADORN
   BODY PARTS. THEY ARE    
JEWELLERY IS CATEGORIZED INTO THESE MAIN MANUFACTURING TERMS    
A BRIEF DESCRIPTION OF THE ABOVE MENTIONED TERMS ARE BEING
   GIVEN BELOW    
A. HANDMADE    
B. CAST    
C. DIE STRUCK    
D. GOLD FILLED & ROLLED-GOLD PLATE    
E. GOLD ELECTROPLATE    
PROPERTIES OF GOLD    
THESE PROPERTIES INCLUDE    
GRADE OF GOLD    
COLOR PALETTE OF GOLD/GOLD COMPOSITION    
MATERIALS USED IN GOLD JEWELLERY MAKING    
(1) DIAMONDS    
(2) GEMSTONES    
(3) PEARLS    
(4) KUNDAN    
(5) ENAMEL    
B.I.S. SPECIFICATION    
PROCESS FLOW DIAGRAM    
MANUFACTURING PROCESS    
FOR GOLD CASTING JEWELLERY    
THE MAIN STEPS ARE GIVEN BELOW    
1. PREPARATION OF WAX PATTERN    
PATTERN DIES    
2. ASSEMBLE THE WAX PATTERNS    
3. PREPARATION OF INVESTMENT    
REFRACTORIES    
BINDERS    
SLURRY PREPARATION    
PATTERN TREE OR CLUSTER PREPARATION    
COATING AND DRYING    
4. REMOVAL OF PATTERN    
5. MOLD FIRING AND BURN OUT PROCESS    
6. MELTING AND CASTING PROCESS    
MELTING EQUIPMENT    
CASTING METHODS    
7. POSTCASTING OPERATIONS    
8. FINISHING    
POLISHING PROCESS    
EMBELLISHMENTS/DECORATIVE PROCESSES    
PLATING PROCESS    
9. PACKAGING AND TRANSPORTING    
10. INSPECTION AND TESTING    
MARKET POSITION    
MARKET SIZE    
INVESTMENTS/DEVELOPMENTS    
SOME OF THE KEY INVESTMENTS IN THIS INDUSTRY ARE LISTED BELOW.    
GOVERNMENT INITIATIVES    
ROAD AHEAD    
ORGANISED JEWELLERS WILL ENJOY 35% -40% OF DOMESTIC GOLD
   MARKET BY 2020    
GOLD JEWELLERY DEMAND    
GOLD RULES IN INDIA    
DEMOGRAPHICS TO BOOST GOLD JEWELLERY DEMAND WGC    
PUSH FACTORS HELPING CONSUMPTION OF COMPLEMENTARY JEWELLERY
   IN INDIA    
CONSUMPTION OF JEWELLERY IN INDIA WILL GET STRONGER    
JEWELLERY RETAILLING BUSINESS MODEL    
EXHIBIT 7-1 GOLD'S BROAD APPEAL AS A SAFE HAVEN INVESTMENT IN INDIA    
FED UP RETAILERS TRYING TO DISRUPT THE DOMINANT BUSINESS MODEL    
EXHIBIT 7-2 RETAILER MARGINS FOR PRECIOUS JEWELLERY    
THERE IS A STRONG BUSINESS CASE FOR THIS    
MODERNIZATION OF THE RETAILING LANDSCAPE CRUCIAL FOR BRANDED JEWELLERY AND RETAIL JEWELLERY BRANDS    
MODERN STORES NOT SUSTAINABLE AT CURRENT GOLD MARGINS    
EXHIBIT 7-3 HIGHER BUSINESS COSTS...SAME MARGINS    
INDIA'S DEMOGRAPHIC TREND IS POSITIVE FOR PRECIOUS JEWELLERY CONSUMPTION    
EXHIBIT 5-1 INCREASING NUMBER OF PERSONS IN CORE AGES FOR
   MARRIAGE    
EXHIBIT 5-2 INCREASING NUMBER OF MARRIAGES PER YEAR    
EXHIBIT 5-3 WOMEN TAKING LONGER TO GET MARRIED    
EXHIBIT 5-4 AGE PROFILE OF MARRIED COUPLES    
PLANT LAYOUT    
MANUFACTURERS/SUPPLIERS OF GOLD JEWELLERY    
SUPPLIERS OF PLANT AND EQUIPMENTS    
SUPPLIERS OF CHAIN MAKING MACHINE    

     
        
APPENDIX – A:

 1.      COST OF PLANT ECONOMICS      
 2.      LAND & BUILDING                                      
 3.      PLANT AND MACHINERY                                  
 4.      FIXED CAPITAL INVESTMENT                             
 5.      RAW MATERIAL                                         
 6.      SALARY AND WAGES                                     
 7.      UTILITIES AND OVERHEADS                              
 8.      TOTAL WORKING CAPITAL                                
 9.      COST OF PRODUCTION                                   
10.      PROFITABILITY ANALYSIS                               
11.      BREAK EVEN POINT                                     
12.      RESOURCES OF FINANCE                           
13.      INTEREST CHART                                       
14.      DEPRECIATION CHART                                   
15.      CASH FLOW STATEMENT                                   
16.      PROJECTED BALANCE SHEET