Adityaraj Rathore

BY ADITYARAJ RATHORE- KUNJAN SHAH- PRIYANK SHAH- PROJECT- (Project Proposal Screening) PART – 2 LOCATIONAL ANALYSIS FOR ESTABLISHONG A UNIT FOR THE PRODUCTION OF COTTON KHANDY’S The locational analysis is one of the most important analysis after the decision of the business to be adopted. It must be done very carefully and jeopardising it could lead to structural failure in economy and revenue output of the industry. Many important geographical factors involved in the location of individual industries are of relative significance, e.g., availability of raw materials, power resources, water, labour, markets and the transport facilities. After looking and the importance of the factors above the location of the jinning and pressing factory would be done according to the place where the cotton production is maximum, and it would play an enhancing role in the establishment of the production. So, the Locational data required is: The Maximum cotton production is the state of Gujarat and the business could easily be setup here. The production of cotton is the maximum in the South Gujarat that is the Saurashtra region. But placing the industry there would be one of the greatest risks. Because of the maximum production of cotton there the maximum units of jinning and production are present there and as a result the setting up of one more industry would be adding a drop of water in an ocean. So, the best region to be chosen as the Narmada region. Being close to the Narmada dam and getting more amount of water for irrigation and more availability of the black cotton soil in the region makes it the most exciting region to set up an industry of jinning and pressing. The location becomes more enhancing and the other factors helpful for the development of the jinning. Consequently, the factors influencing the location of industry can be divided into two broad categories: I. II. Geographical Analysis Non-Geographical Analysis Here in this article the detailed geographical analysis of the project that is shortlisted from all of them is done i.e. the locational analysis of the project. Now we will look at the factors required for the industrial project GEOGRAPHICAL FACTORS ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ 1. RAW MATERIALS Cotton Cotton cloth for exporting (grey cloth) Pack strap 2. POWER Major factor HT (high tension) different requirement > 200 HP 6-8 months Transformer (450 kWh) Seasonal connection (6 months) Industrial unit charges TOTAL 250 UNITS/HOUR REQUIREMENT Electrical Connection 3. LABOUR Not much requirement Fully Automatic 30 -daily, skilled, managerial contract labours, fitters 4. TRANSPORT Input and output Cotton incoming and bails outcoming Cotton seeds outgoing 5. MARKET International market Domestic market No local market 6. WATER Moisture machine (Overhead Tank) requirement during pressing. ❖ Machine for pressuring water and air together. ❖ Most precise work effort is required 7. SITE ❖ Cotton producing areas ❖ Power availability ❖ Labour availability and Manpower 8. CLIMATE ❖ Rainfall must be avoided ❖ Humid climate destroys the production NON-GEOGRAPHICAL FACTORS ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ 1. CAPITAL Land acquisition Construction Plant and machinery Working capital a. Purchase fund b. Goods and purchase capital c. Administration capital 2. GOVERNMENT POLICIES Under textile Ministry Plant and machinery subsidiary Land subsidiary Plant and Machineries subsidy (40%) Registry under MSME portal (Specialised subsidiary provided by govt.) NABAD (Banking finance organization) Nationalised and Private Banks subsidiary provision. (Cotton corporation of India) -an imp central govt. wing. CCI has 4 wings GUJARAT Corporation consists of 2 branches a. AHMEDABAD BRANCH b. RAJKOT BRANCH (Cotton corporation of India) -an imp central govt. wing. ATIRA (In Ahmedabad) 3. INDUSTRIAL INERTIA ❖ ❖ ❖ ❖ ❖ 4. EFFICIENT ORGANISATION Proper HR department Selection Administration department a. Manager b. Accounts Manager c. Sales Manager d. Production e. Purchase Manager 5. BANKING FACILITIES Available 5-6 Banking Facilities CDMA Report ❖ Loan against stock- to be provided by the bank which is totally dependent on the basis PROJECT- (Project Proposal Screening) PART – 3 THE DEMAND ANALYSIS FOR ESTABLISHING A UNIT OF COTTON KHANDY PRODUCTION AND IDENTIFYING THE REVENUE STREAM THE DEMAND ANALYISIS FOR THE INDUSTRY The demand for this industry must cannot be demanded because this industry comes under the sector of the Central Government. The demand and supply totally generated is by the government or the private organization which provides the job work to the industry.so the demand of the bails is at the national level or the international level. The demand for the for the CCI will be applicable to this business. So, the image clearly indicates the demand and supply. The Total demand of the Cotton Bales is up to 131(in lakh bales of 170 kg). The stock present with the ginners for the production Is 79 (in lakh bales of 170 kg). The bales required are total of 131 and the supply by the Indian Jinner is around 260 for the hour. The ending stocks holds its mark up to 129 (in lakh bales of 170 kg.) Thus, the data totally represent the need of the Cotton bales in India for the textile mills. International demand is separate from these and are eradicated form this and expected. IDENTIFYING THE REVENUE STREAM The revenue stream is the term which is used to indicate that the cash or the income is generated from how many sources. Primarily there are two types of revenues: 1. The types of revenues recorded on a business account depending on the type of activities carried out by the business. 2. Generally, the revenue accounts of retail businesses are more diverse, as compared to the business that provide services. This business consists of production of Cotton khandies from cotton and selling it to the government or a private body (depending upon the contract acquired). Thus, the basic revenue which will be produced by the selling of the cotton bails produced by jinning and pressing. The other or the contemporary revenues can also be generated form this business. The major revenue is called the operating revenue. Revenue = Units Sold x Sales Price Operating revenue: Production and selling of the cotton khandies (bales). Mentioned details: (The below mentioned data is totally based on the cost of the described product would change according to the present change in the market) 'PRODUCTION COST/BAIL' by 'YEAR OF PRODUCTION' - 5 10 15 20 25 Millions YEAR OF PRODUCTION YEAR OF PRODUCTION 'REVENUE GENERATED / BAIL' by 'YEAR OF PRODUCTION' - 200 400 600 PRODUCTION COST/BAIL REVENUE GENERATED / BAIL YEAR OF PRODUCTION REVENUE GENERATED / BAIL PROFIT MARGIN PRODUCTION COST/BAIL NUMBER OF BAIILS SELLING PRICE - - 20% 30% 30% 30% 35% - - - 800 Non-Operational revenue: Rent revenue-The storage rooms which are used for the storage of the cotton during the season can be rented during the off season and as result the revenue is generated. The renting could be done totally based on the requirement and some precondition is also replicated from it. Interest revenue – the electrical deposit Is done before the season in the jinning is stated and as a result the total cost of the expected electricity bill along with the same mentioning ha to be submitted along with the cash deposit. On the cash deposit the bank would provide an additional 4% annual interest. Complimentary product revenue – the revenue generated from this is the revenue of the cotton seeds.the cotton seeds are totally generated form the cotton that is to be used for ginning. On an average the cotton content is 67% and the rest is the seed proportion, so based on that the cotton seeds which are the waste in the jinning could be used in , or be sold to the cotton oil producing company. The data regarding it is: (The below mentioned data is totally based on the cost of the described product would change according to the present change in the market) YEAR OF PRODUCTIO N NUMBE R OF BAIILS 2020 - - WEIGHT OF COTTO N IN ALL THE BAILS 10385 WEIGHT PRICE OF OF COTTON/QUINTA COTTO L N SEEDS REVENU E 5115 3200 - 11055 5445 3500 - 11725 5775 4000 - 12395 6105 4300 - 2024 - 13065 6435 4800 - Importance of Revenue Stream: Revenue is a key performance indicator (KPI) for all businesses. Financial analysis need to be able to recognize the revenue streams for which the company generates cash. Performance Prediction Differs between different revenue streams a) Recurring revenue provides consistent cash inflow b) Transaction based and service revenue tend to fluctuate with the customer demand c) Project revenue is the most volatile because it is a largely contingent on customer relationships. Different Forecasting Models are needed for different revenue models a) Ko recurring revenue forecast model should have a uniform structure and consistent prediction pattern. b) CT project-based revenue forecast model needs continuous monitoring of latest project opportunities. Transaction based revenue Model(partially)- it is not a fully TBR model but partial where there is one-time payment purchase product. While the fact contradicting is that the purchaser and the provider remains constant throughout. REVENUE STREAM OVERALL VIEW REVENUES OEPRATIONAL REVENUE REVENUE FROM THE PRODUCTION OF THE KHANDIES(CANDIES) NON-OPERATINAL REVENUE INTERST REVENUE FORM THE ELECTRIITY BOARD COMMODITY REVENUE FROM TE COTTON SEEDS SELLING FOR OIL RENT REVENUE BY RENTING THE GODOWNS DURING THE OFF-SEASON